Amar Kaur vs State of Punjab and Others

S.S. Sandhawalia, C.J.—Whether the Labour Court must first entertain and decide the question that the relationship of employer and employee existed between the parities (where the same is controverted), in proceedings u/s 33-C(2) of the Industrial Disputes Act, 1947--is the meaningful question which has necessitated this reference to the Larger Bench.

The facts are not in dispute and fall indeed within a narrow compass. The Petitioner along with others had preferred applications u/s 33-C(2) of the Industrial Disputes Act, 1947 (hereinafter called ''the Act'') before the Labour Court, Ludhiana, seeking various reliefs like notice pay, retrenchment compensation and wages on account of leave etc. from their employers Messrs: P.K. Oswal Hosiery Mills, Ludhiana. The Respondent-Management, straightaway denied the relationship of employer and employee between the parties and took up the firm stand that the applications were not maintainable and were liable to be rejected on this score alone. Several other objections were also taken regarding the maintainability of the application. On the aforesaid material question, the Labour Court framed the following issues:

Whether the application u/s 33-C(2) of the Industrial Disputes Act, 1927 can proceed when the relationship of master and servant is denied by the Respondent.

The Labour Court noticed some conflict of precedent on the point but took the view that it was bound by the Single Bench decision of this Court reported as Sher Singh Verma and Rup Chandra and Anr. 1967 (2) L.L.J. 582 and held accordingly that because the relationship of the employer and the employee was denied, he could not go into the same u/s 33-C(2) of the Act and the matter can only be decided in a proper reference u/s 10 of the Industrial Disputes Act, 1947. Consequently, the Petitioner''s application along with others was dismissed.

This writ petition first came before my learned brother Sharma, J. sitting singly. Before him also, the learned Counsel for the parties relied on rival judicial view points and because of the somewhat intricate legal issue involved, the matter was referred for decision by a Larger Bench.

I am inclined to take the view that so far as this Court is concerned, the Gordian knot of controversy has now been cleanly cut in recent decision of this Court to which reference follows. This apart, I am equally of the view that the matter also stands concluded in favour of the Petitioner by way of analogous observations of the final Court, which are equally attracted to the situation.

The question before us, along with others, arose before their Lordships in The Central Bank of India Ltd. Vs. P.S. Rajagopalan etc., . On behalf of the employer, the identical stand which is sought to be taken by the Respondent before us, was pressed. Categorically rejecting the same, it was observed as follows:

We are not impressed by this argument. In our opinion, on a fair and reasonable construction of Sub-section (2) it is clear that if a workman''s right to receive the benefit is disputed, that may have to be determined by the Labour Court. Before proceeding to compute the benefit in terms of money, the Labour Court inevitably has to deal with the question as to whether the workman has a right to receive feat benefit. If the said right is not disputed, nothing more needs to be done and the Labour Court can proceed to compute the value of the benefit in terms of money, but if the said right is disputed, the Labour Court musty deal with that question and decide whether the workman has the right to receive the benefit as alleged by him and it is only if the Labour Court answers this point in favour of the workman that the next question of making the necessary computation can arise. It seems to us that the opening clause of Sub-section (2) does not admit of fee construction for which the Appellant contends unless we add some words in that clause. The Clause "where any workman is entitled to receive from the employer any benefit" does not mean "Where such workman is admittedly or admitted to be, entitled to receive such benefit". The Appellant''s construction would necessarily introduce the addition of the words "admittedly, or admitted to be" in that clause and that clearly is not permissible. Besides, it seems to us that if the Appellant''s construction is accepted, it would necessarily mean that it would be at the option of the employer to allow the workman to avail himself of the remedy provided by Sub-section (2), because he has merely to raise an objection on the ground that the right claimed by the workman is not admitted to oust the jurisdiction of the Labour Court to entertain the workman''s application. The claim u/s 33-C(2) clearly postulates that the determination of the question about computing the benefit in terms of money may, in some cases have to be preceded by an enquiry into the existence of the right and such an enquiry must be held to be identical to the main determination which has been assigned to the Labour Court by Sub-section (2). As Maxwell has observed:

Where ah Act confers a jurisdiction, it impliedly also grants the powers of doing all such acts, or employing such means, as are essentially necessary to its execution. We must accordingly hold that Section 33-C(2) takes within its purview cases of workmen who claimed that the benefit to which they are entitled should be computed in terms of money, even though the right to the benefit on which their claim is based is disputed by their employers.

The aforesaid observations appear to me as governing the point on all fours. However, Mr. Jawala Dass, for the Respondent-employers sought to raise some doubts about the same on the basis of subsequent observations made in Central Inland Water Transport Corporation Limited Vs. The Workmen and Another, . However, a close analysis of the latter judgment would show that, in essence, there is no conflict of opinion whatsoever betwixt the two. Indeed, the latter judgment expressly noticed the Central Bank of India Limited''s case (supra) in paragraphs 14, 15 and 21 of the report. Far from expressing even a hint of dissent therefrom the learned judges applied the earlier view after quoting therefrom. I am, therefore, wholly unable to accept the stand of the learned Counsel for the Respondent that there is any divergence of opinion betwixt the Central Bank of India Limited''s case (supna) and the Central Inland Water Transport Corpn. Ltd''s case (supra).

As a matter of abundant caution, however, it has to be pointed, out that even placing the case of Respondent-employers at the highest and assuming entirely for argument sake that there is any conflict on this point, then this High Court is bound by the larger Constitution Bench of five Judges in the Central Bank of India Limited case (supra) in preference to the later view.

What next calls for notice is that the sheet-anchor of the Respondent-employer''s case in Sher Singh Verma v. Rup Chandra and Anr. (1 supra) Was the subject-matter of specific challenge before a recent Division Bench of this Court in The Market Committee, Amritsar v. The Presiding Officer Labour Court Amritsar and Ors 1981 Lab. I.C. 473 Relying on the Central Bank of India Limited''s case (supra) and a Division Bench of the Delhi High Court in Yad Ram (died) and Ors v. Bir Singh and Ors. 1974 Lab. I.C. 910 the aforesaid judgment was overruled. It is true that in the Market Committee, Amritsar''s case (supra), the alleged reliance on Central Inland Water Transport Corpn. Ltd''s case (supra), was not noticed. However, I have already opined earlier, there is neither any conflict nor can the later view be preferred over the earlier larger Bench in the Central Bank of India Limited''s case (supra).

In view of the fact that the question before us appears to be concluded in favour of the Petitioner by precedent, it is unnecessary to examine the matter on principle or on the language of the statute.

To conclude, the answer to the meaningful question posed at the out-set must be rendered in the affirmative and it is held that the Labour Court must first entertain and decide the question of the relationship of the employer and the employee (where the same is denied), in proceedings u/s 33-C(2) of the Industrial Disputes Act, 1947.

In accordance with the aforesaid view the Award of the Labour Court is hereby quashed and the matter is remanded back for a decision afresh on merits in accordance with the law as enunciated above.

The writ petition is allowed in the aforesaid terms. However, in view of the intricacy of the question involved and some apparent conflict of precedent, the parties are left to bear their own costs.