Manager, Rohtas Industries Ltd. vs Judge, Labour Court and Others

Arun Madan, J.—This writ petition under Articles 226 and 227 of the Constitution of India was filed in this Court by the management of the petitioner industry in the matter of Industrial Disputes Act and interpretation concerning its relevant provisions.

The facts giving rise to the filing of this writ petition, briefly stated, are that non-petitioners Nos. 2 to 5 and other workmen of the petitioner-industry went on strike thereby committing dereliction of duty and misconduct for which they were issued charge-sheet and passed suspension orders which were served on them in the first week of April, 1979. This fact has not been disputed by the respondents. During the intervening period of the inquiry there was some settlement between the Union representing the workmen and the management and as a consequence of the settlement, the union withdrew its claim against the management on behalf of the workmen and it was agreed as a result of the settlement that non-petitioners Nos. 2 to 5 shall remain under suspension with no stipulation for payment of suspension allowance to them. The non-petitioners had made a request for change of the inquiry officer who was conducting the inquiry on behalf of the management against the said workmen and as a consequence of which the inquiry was delayed. As a result of the inquiry, the Inquiry Officer found the workmen guilty of misconduct and they were consequently dismissed in December, 1979.

Non-petitioners Nos. 2 to 5 and one Shri Ram Kumar Pandey through their counsel filed an application u/s 33(c)(2) of the Industrial Disputes Act, 1947 (hereinafter referred to as ''the Act of 1947'')(Ex.1) on May 15, 1979 praying for the relief that an amount at the rate of Rs. 1650/20 may be computed and an order may be passed for the payment of the claim in favour of the workmen along with cost. The statement of claim was filed before the Labour Court and in the said claim petition it was contended on behalf of the workmen that they were placed under suspension in October, 1978 by the petitioner-industry. It was further contended on behalf of the workmen that as per the standing orders applicable to the petitioner-company, workmen were entitled for payment of subsistence allowance for first three months at the rate of 50% of the wages and after three months at the rate of 3/4th of the wages. It was contended that since the management did not make the payment of the subsistence allowance to non-petitioners Nos. 2 to 5 for October, 1978 and from December, 1978 they were paid only half of the wages towards subsistence allowance, therefore, non-petitioners were entitled for subsistence allowance which they claimed at the rate of Rs. 341.65, Rs. 318.30 and Rs. 330.30 for the period October, 1978 to April 1979 in all Rs. 1650.20 and no other claim was made except subsistence allowance as referred to above. With regard to the claim of Raj Kumar Pandey for subsistence allowance, the same was given up by the said workmen during the course of adjudication of the proceedings before the Labour Court,

It is admitted case of the parties that strike had taken place during the relevant period, as referred to above. It was decided on December 5, 1978 that non-petitioners Nos. 2 to 5 shall remain suspended during the period of inquiry though no order of suspension was formally served on the concerned workmen during the period of their absence, i.e. October 27, 1978 to Decembers, 1978.

On June 30, 1979 the petitioner-Management received a notice from the Labour Court regarding filing of claim petition on behalf of the workmen u/s 33(c)(2) of the Act of 1947 along with the statement of claim and the schedule attached thereto vide Ex. 1, to which the petitioner-Management submitted a detailed reply on August 2, 1979 before the Labour Court. The said application was duly contested on merits and certain preliminary objections were raised on behalf of the petitioner against its maintainability.

It was contended on behalf of the petitioner-management that since non-petitioners Nos. 2 to 5 went on illegal strike with effect from October 27, 1978, without any justification, as such they were not entitled for payment of any wages for the period of strike as they had deliberately remained absent from duty. Ultimately as a consequence of settlement which was arrived at between the parties on December 5, 1978 and from December 6, 1978 the strike was called off, it was decided that non-petitioners shall remain under suspension and all the disputes shall be deemed to have been settled. It was further contented on behalf of the petitioner-management that though suspension order had been served on the concerned workmen after December 5, 1978 but even if the said date of settlement is taken into consideration, concerned workmen shall be deemed to be under suspension only from December 5, 1978 and consequently they are not entitled to claim any suspension allowance for the period from October 27, 1978 to December 5, 1978, as referred to above.

On behalf of the petitioner-management following contentions were advanced: -

(a) Non-petitioners Nos. 2 to 5 went on illegal strike from August 27, 1978, which was called off on December 5, 1978 and hence they are not entitled for any benefit whatsoever.

(b) Since order of suspension was served on the concerned workmen on December 5, 1978, hence question of granting any subsistence allowance for the earlier period does not arise:

(c) Even if it be admitted that the concerned workmen are held entitled for subsistence allowance for the period October 27, 1978 to December 5, 1978 even the matter requires adjudication by a reference to be made by the State Government u/s 10 of the Act of 1947 and this question regarding entitlement of the workmen cannot be adjudicated u/s 30(c)(2) of the said Act implying thereby, that the question of jurisdiction regarding maintainability of application u/s 33(c)(2) of the Act has to be decided at the first instance.

On merits, the aforesaid contentions of the, petitioner- management were controverted on behalf of the workmen on the ground that in absence of any statutory bar for payment of any subsistence allowance, to the workmen from October 27, 1978 to December 5, 1978, the workmen were entitled for payment of subsistence allowance, since there was no provision to the contrary in the settlement between the parties. It was further contended on behalf of the petitioner-management with reference to the relevant provisions of the Standing Orders that at the most the workmen could be held entitled to 1/4th of the wages towards subsistence allowance on account of delay in the initiation of disciplinary proceedings which was entirely on account of the workmen. A reference may be made in this regard to the relevant provisions of the Standing Orders. Clauses 56(3)(c), (d) and (e) of the Standing Orders provide as under:-

"(c) If after enquiry the workman is adjudged guilty of misconduct and is awarded punishment under the provisions of the Standing Order, the workman shall be deemed to be absent from duty for the period of suspension and shall not be entitled to any wages for such period and shall not be permitted to enter the premises of the industrial establishment. If, however the order of suspension is rescinded, the workman shall be deemed to be on duty during the period of suspension and shall be entitled to the same wages as he would have received if he had not been suspended.

(d) A workman under suspension under this order shall not leave his headquarters without the written permission of the competent authority till the company''s decision is out, unless the order of suspension or a subsequent act lets him free from this condition.

(e) In case a workman is suspended pending enquiry he will be paid a subsistence allowance during his suspension period as under-

(i) where the enquiry is departmental, the subsistence allowance shall be equal to 50% of his ordinary rate of wages as defined in the Payment of Wages Act, 1936, for the first ninety days excluding the initial period often days. If the departmental enquiry gets prolonged and the workman continues to be suspended for a period exceeding ninety days as above, the subsistence allowance shall be paid @ 75% of his wages but if the enquiry gets delayed due to reasons directly attributable to the workman, the subsistence allowance shall be reduced to 25% of his wages.

During the course of hearing of the writ petition it so transpired that non-petitioners Nos. 2 to 5 filed the affidavit before the Industrial Tribunal vide Exs. 2 to 5. In one of the affidavits filed by one Bhagwan Sahai (Non-petitioner No. 2), it is specifically mentioned that the said workman was placed under suspension with effect from October 28, 1978 and from the suspension period he was not paid any subsistence allowance up to December 5, 1978. Thereafter the said workman was paid only @ 50% of the amount due, whereas the subsistence allowance should have been paid @ 75% hence he is entitled to claim balance @ 25% of the subsistence allowance. As against the salary of Rs.221.20, the said workman was paid 50% of the amount, i.e, Rs. 110.60 paise only. Identical affidavits were filed by non-petitioners Nos. 3 to 5 on the same terms before the Labour Court.

On behalf of the petitioner-management it was contended that notwithstanding the fact that on August 4, 1980 as well as on November 29, 1980 two separate applications were filed before the Labour Court to decide the preliminary question regarding maintanability the claim petition u/s 33(c)(2) of the Act. The Labour Court failed to decide this premilinary question and passed an order contrary to the record without deciding the same. The contention of the petitioner in short was that payment of 50% of the amount to the concerned workman, does not by itself establish that the petitioner-management had agreed to pay the rest of the amount due to the workman. It was further contended that in the absence of existing legal right of the workman, the Labour Court could not draw such conclusion in favour of the workman.

The Labour Court vide its order, dated September 13, 1984 (Ex.7), decided the claim petition by specifically mentioning therein that subsistence allowance and the salary due to the workman are two separate things and the workman is entitled to payment of subsistence allowance for his livelihood even during the period of suspension and hence it will not be correct that since the workmen were subjected to disciplinary enquiry on account of alleged misconduct, therefore, they should not be paid any subsistence allowance. Another question which arose for consideration before the Labour Court was as to whether concerned workmen are entitled to payment of subsistence allowance with effect from October 27, 1978, since it is not disputed that they were on strike from the said date? Another question which arose for consideration before the Labour Court was as to whether in the absence of strike being declared illegal, whether the workmen would be entitled for payment of full wages. On behalf of the management strong objection was raised regarding maintainability of the claim petition before the Labour Court u/s 33(c)(2) for the Act. In this respect the Labour Court held that since the aforesaid question had already been decided by the said court on November 29, 1980, the same was not open to challenge. Consequently the Labour Court computed the claim of (he workmen for payment of Rs. 1531.90 only. Aggrieved by the aforesaid order of the Labour Court the present writ petition was filed in this court which was admitted on December 5, 1984, when rule nisi was issued.

During the course of hearing, learned counsel for the petitioner placed reliance upon a judgment of the Division Bench of Bombay High Court in the matter of Sermon Jagoo v. The General Manager, Western Railway 1979 Lab IC 1225 wherein the said High Court held that an application u/s 33(c)(2) of the Industrial Disputes Act, 1947 has to be on the basis of existing right which is a condition precedent for the same. It was further held that an application under the said provision is in the nature of execution proceedings and must be based on existing right. It was further held;

"The determination of the question of validity of the order of compulsory retirement cannot be termed as incidental, because the very existence of the right of the petitioner to claim the benefit depends on the validity or other of the impugned order".

In the matter of General Manager, Central Railway v. Jankoo Vithal (1971 I LJ 35) the Division Bench of Bombay High Court has observed as under pp 23/-238:-

"Section 33C(2) assumes an existing right of the employee to the money or benefit and on the basis of this assumption, if a question were to arise as to the amount of money due or as to the amount at which such benefit should be computed, the section empowers the Labour Court to decide that question. If there is no existing right to the money or benefit or such right has to be adjudicated upon, then the Labour Court has no power under the section to proceed further or adjudicate upon that right. Thus, where the right of the employee to receive wage, allowances and other benefits from the date of his compulsory retirement depended upon the disputed question whether the order of compulsory retirement passed against the employee is valid or not, the claim to the money or benefit could not be said to be based on an existing right and the matter required an adjudication of the right itself which question on the plain language of Section 33C(2) is outside the purview of that section. The Labour Court was, therefore, perfectly justified in rejecting the application as not maintainable."

In the matter of State of Punjab Vs. Amar Singh Harika, the Constitution Bench of the Apex Court held that mere passing of an order of dismissal is not effective unless it is published and communicated to the officer concerned. It was further observed by the Apex Court that an order of dismissal passed by an appropriate authority and kept on its file without communicating it to the officer concerned or otherwise publishing it does not take effect as from the date on which the order is actually written out by the said authority, but such an order can only have the effect after it is communicated to the officer concerned, or is otherwise published. The Apex Court further held(at p. 193):

"Having regard to the procedure adopted by the State authorities in appointing the Enquiry Committee in formulating the questionnaire containing the charge, charges against the respondent, in making the report and in dealing with the recommendations made by the Chief Secretary from time to time, we are satisfied that the High Court was right in coming to the conclusion that the respondent had not received a reasonable opportunity to make his defence, and that the proceedings of the enquiry and the report made by the Committee, as well as the final order of dismissal passed against the respondent have contravened the safeguards guaranteed by Section 14(2) of the Ordinance".

In the matter of The Central Bank of India Ltd. Vs. P.S. Rajagopalan etc., it was held by the Apex Court as under at page 95 :-

"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 that 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 must 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 is clear for the opening clause in Section 33C(2) of the Act, ''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". It must accordingly be held that Section 33C(2) take within its purview cases of workmen who claim that the benefit to which they are entitled would be computed in terms of money, even though the right to the benefit on which their claim is based is disputed by their employers. There is no force in the contention that the provisions of Section 36A of the Act would bar the labour court in interpreting an award or settlement while entertaining an application u/s 33C(2) of the Act.

Besides, there can be no doubt that when the Labour Court is given the power to allow an individual workman to execute or implement his existing individual rights, it is virtually exercising executive powers in some cases, and it is well-settled that it is open to the executing court to interpret the decree for the purpose of execution. Hence it must held that for the purpose of making the necessary determination u/s 33C(2) of the Act, it would, in the appropriate cases, be open to the Labour Court to interpret the award or settlement on which the workman''s right rests.

Though it was considered to he unnecessary in the instant case to decide or indicate what additional claims would fall u/s 33C(2) of the Act which may not fall within the ambit of the said provision. However, some of the claims which would not fall u/s 33C(2) of the Act were indicated by the Supreme Court by way of illustration.

Admittedly, up to December 5, 1978 the order of suspension was not communicated to the workmen in view of the settlement arrived at between (he parties and, therefore, I am of the considered opinion that since it was specifically agreed to as a term of settlement between the parties that the workman shall not be entitled to claim any allowance for the period during which the workman remained on strike, i.e. from October 27, 1978, to Decembers, 1978, the workman obviously cannot be held entitled for any allowance for the said period as they had voluntarily remained on strike and were wilfully absent from duty and hence would not be entitled to claim any allowance, on the principle on ''No work, no pay''. It is settled proposition of law that when the workmen have not discharged any duties to the management and have voluntarily adopted the path of strike they cannot be permitted to have rendered any service to the management and it was incumbent upon the Labour Court to decide the said question at first instance, before arriving at any conclusion with regard to the quantum of amount due to the workmen. Instead of deciding this question with regard to the legal right of the workmen to claim any wages or subsistence allowance for the period during which they remained on strike, the Labour Court was not competent to decide the question of entitlement of the amount due to the workmen by way of computing the amount and, therefore, the decision of the Labour Court is not in accordance with law. I am further of the opinion that any settlement arrived at between the parties cannot apply for the past period retrospectively and since nothing was fixed in the settlement between the parties, the workmen cannot be held entitled for payment of any amount for the strike period. I am further of the opinion that the application u/s 33C(2) of the Act is in the nature of execution proceedings and must be based on an existing legal right and in the absence of such existing legal right, the workman cannot be held entitled for any wages or subsistence allowance for the period during which they had remained absent from duty.

My view is fortified from the judgment of the Apex Court in the matter of Central Bank of India v. Rajagopalan (supra) that on a fair and reasonable construction of Sub-section (2) of Section 33C of the Act, if a workman''s right to receive some benefit is disputed by the management, the said dispute should be decided by the Labour Court at the first instance by treating the same as a preliminary issue and besides, finding must be specifically recorded in this regard by the Labour Court before determining the quantum of amount due to workman which has not been done by the Labour Court in the instant case. Hence, consequently I am of the opinion that for the purpose of making necessary determination u/s 33C(2) of the Act it was open to the Labour Court to interpret that the settlement in its true perspective since the workmen were seeking their claim on the basis of settlement arrived at between the parties.

My views are further fortified from the Standing Orders of the petitioner-management, as referred to above, which are fully binding and applicable to the workmen in the facts of the instant case.

Alter hearing learned counsel for the petitioner management and examining the rival contentions of the parties on the record, I am consequently of the opinion that since the order of the Labour Court dated September 13, 1984 computing the claim of the workmen to Rs. 1650.20 for the period from October, 1978 to April 1979 is not in accordance with law and, therefore, the same is squashed and set aside with a direction that the Labour Court shall first decide the question regarding maintainability of the claim of the workmen with reference to Section 33C(2) of the Act by treating the same as a preliminary issue and alter adjudicating the same by recording positive finding with regard to the maintainability of the claim petition, then only it would be proper for the Labour Court to go into the question of computation of the claim amount due to the workmen.

With the above observations, the matter is consequently remanded back to the Labour Court with a direction to expeditiously decide the matter and in any case not later than three months from the date of communication of this order, in accordance with law.

This writ petition is disposed of with the above observations with no order as to costs.

Ordered accordingly.