Ramachandra Kamath vs Lord Krishna Bank Ltd. and Others

T.V. Ramakrishnan, J.—The validity of the decision reported in Lord Krishna Bank v. Deputy Labour Commissioner and 2 Ors. ILR 1991 Ker 78 is under challenge in this writ appeal.

When an application is received by the State Government or its delegate u/s 4 of the Kerala Payment of Subsistence Allowance Act, 1972 (for short "the Act") read along with Rule 4 of the Kerala Payment of Subsistence Allowance Rules, 1974 (for short "the Rules") from an employee whose employer falls under the category of employers mentioned in Section 2(a)(i) of the Industrial Disputes Act, 1947 (for short "the I.D. Act"), to which conciliation officer appointed under the I.D. Act, the application should be sent to for enquiry and report is the main question to be decided in this appeal. To put it differently the question to be considered in the case is whether an application received under Rule 4 of the Rules should be sent to the conciliation officer appointed by the Central or State Government depending upon the status of the employer? The learned Single Judge has taken the view that the conciliation officer appointed by the Central Government is the officer to whom the application has to be forwarded if the employer is one coming u/s 2(a)(i) of the I.D. Act.

Brief facts necessary to decide the issue are thus: The Appellant who is alleged to be an employee of the first Respondent-Lord Krishna Bank Limited was suspended pending enquiry as per Ext. P-1 memo issued by the Bank. Since subsistence allowance was not paid, the Appellant filed Ext. P-2 application u/s 4 of the Act claiming the same for the period from 1st April 1989 to 31st May 1989 before the second Respondent-Deputy Labour Commissioner to whom Government has delegated its power u/s 4 of the Act as per notification issued u/s 6 of the Act. On receipt of the application, the second Respondent sent the application for enquiry and report to the third Respondent--Deputy Labour Officer appointed by the Government of Kerala, under the I.D. Act. Third Respondent accordingly conducted the enquiry and sent his report to the second Respondent. Accepting the report the second Respondent passed Ext. P-5 order directing the Bank to pay subsistence allowance as per the said order. Appellant also claimed subsistence allowance for the period from 1st June 1989 to 31st August 1989. That too was granted by Ext. P-6 order. Aggrieved by the said orders, the first Respondent-Bank challenged Exts. P-5 and P-6 orders in the O.P. contending inter alia that the Act is not applicable to the Bank and its employees. The jurisdiction or authority of the third Respondent to conduct the enquiry on the claim for subsistence allowance was also challenged by the Bank. It was also contended that no opportunity was granted to the Bank to adduce evidence. According to the Bank the conciliation officer appointed under the I.D. Act by the Central Government alone has jurisdiction to conduct enquiry in a claim against the employer-Bank under the Act which comes u/s 2(a)(i) of the I.D. Act. It was accepting the aforesaid contention of the Bank that the learned Single Judge had set aside Exts. P-5 and P-6 orders and directed the second Respondent to send the claim petition to the Assistant Labour Commissioner (Central) for enquiry and report as per the impugned judgment.

Relevant provisions with reference to which the question has to be decided are Sections 4 and 6 of the Act, Rules 4 and 5 of the Rules and Sections 2(a)(i), 2(d) and 4 of the I.D. Act. Section 4 read along with Section 6 of the Act would show that the authority competent to entertain an application for subsistence allowance is the State Government or such officers to whom State Government may by notification delegate its powers u/s 6 of the Act. The State Government or its delegate is to forward an application received under Rule 4 of the Rules to a conciliation officer appointed under the I.D. Act for enquiry into the employee''s claim and submission of report as provided under Rule 5 of the Rules. The conciliation officer to whom an application is forwarded under Rule 5(1) has to submit a report to the Government or to its delegate after conducting an enquiry giving the parties an opportunity of being heard within a period of three months from the date of receipt of the application in his office specifying the amount, if any, due from the employer to the employee and enclosing thereto all the documents relating to the enquiry conducted by him. On receipt of the report and on consideration of the same, the Government or its delegate is to satisfy itself whether any money is due by the employer to the employee and shall issue certificate to the Collector u/s 4 of the Act. Section 2(a)(i) of the I.D. Act defines appropriate Government as the Central Government in respect of industrial disputes falling under the category mentioned in Section 2(a)(i) of the I.D. Act and the State Government as the appropriate Government in the case of industrial disputes falling u/s 2(a)(ii) of the I.D. Act. Section 4 of the I.D. Act authorises the appropriate Government to appoint such number of persons as it thinks fit to be conciliation officers charged with the duty of mediating in and promoting the settlement of industrial disputes. Pursuant to Section 4 of the I.D. Act both the Central and State Governments have appointed their own conciliation officers charged with the duty of mediating in and promoting the settlement of industrial disputes for different specified areas in the State. As per Rule 5 of the Rules what is directed to be done is to send the application under Rule 4 to a conciliation officer appointed under the I.D. Act. There is no indication either express or by necessary implication that the reference is to be made to the conciliation officer appointed by the Central or State Government.

Mr. M. Ramachandran, learned Counsel for the Appellant has contended that provisions of the Act which is a State enactment constitute the State Government or its delegate as the exclusive authority to entertain and decide applications for subsistence allowance submitted by employees working in the various concerns in the State without making any distinction between the employers under whom they work. The learned Counsel pointed out that the provisions of the Act would apply with equal force to industries run by employers falling u/s 2(a)(i) and those u/s 2(a)(ii) of the I.D. Act. As such it is evident that as far as matters coming within the purview of the Act are concerned, no distinction is made between industries coming within the control of the Central Government and its officials and those coming within the control of the State Government and its officials as made u/s 2(a)(i) and 2(a)(ii) of the I.D. Act. In the circumstances, there may not be any justification to hold that as per Rule 5 a power to conduct an enquiry at an intermediary stage of the application received under Rule 4 of the Rules has been conferred on an authority functioning under the Central Government when the State Government and its delegate has been constituted as the sole authority to entertain and take a final decision in the application under Rules 4 and 5 of the Rules.

Pointing out the above scheme contained in the Act, it was submitted that there may not be any justification for making an assumption as has been done by the learned Single Judge in paragraph 4 of his judgment that the conciliation officer who is competent to conduct an enquiry into the application for subsistence allowance is the one appointed by the Central Government. No reason whatsoever has been stated by the learned Single Judge in making such an assumption. As the entire judgment is based upon the above assumption made without any basis, the same is liable to be set aside was the submission of the learned Counsel for the Appellant.

While vehemently supporting the judgment of the learned Single Judge, Mr. Pathrose Mathai, learned Counsel for the first Respondent, has submitted that the only way in which Rule 5 of the Rules can be understood is in the manner interpreted by the learned Single Judge and the decision does not call for any interference in the appeal. As the Respondent-Bank is an employer coming within the definition contained in Section 2(a)(i) of the I.D. Act, it is only reasonable to presume that the rule making authority while making Rule 5 must have intended to confer authority to conduct an enquiry and submit report on the application only on a conciliation officer who has jurisdiction over the parties under the I.D. Act. It will be totally unreasonable to hold that the rule making authority has intended to confer a power of enquiry on an officer who has no power or authority over the parties under the I.D. Act. As such in the scheme of the Act and Rules, Rule 5 is bound to be construed as a provision authorising the forwarding of the application received under Rule 4 only to the conciliation officer appointed by the Central Government where the employer is one coming within Section 2(a)(i) of the I.D. Act. The conciliation officer appointed by the State Government under the I.D. Act has no power or jurisdiction over the employers like the first Respondent and as such they could not have been legally indicated as the authority to conduct enquiry and submit report on the applications was the submission of the learned Counsel for the first Respondent.

The Act is a legislation by the State intended to provide for the payment of subsistence allowance to the employees in certain establishments in the State during the period of suspension. The word ''establishment'' has been defined in Section 2(c) of the Act to mean any place where any industry, trade business, undertaking, manufacture, occupation or service is carried on but excluding any office or department of any Government of any establishment of any Railway, Major Port, Mine or Oil field. Section 5A of the Act also specifically excludes all public sector undertakings of the Central Government from the purview of the Act. Section 3 of the Act declares that whenever an employee is placed under suspension he shall be paid by the employer for the period during which he is under suspension subsistence allowance as indicated in the section. The word ''employer'' is defined in Section 2(b) to mean the owner of an establishment including any person responsible to the owner for supervision and control of the establishment. Section 3 of the Act thus subjects all employers to the liability of paying subsistence allowance to all their employees without any distinction, whether they are employers falling u/s 2(a)(i) or 2(a)(ii) of the I.D. Act. No distinction is made by the Act while constituting the authority to entertain and decide the application or in the matter of fixing the rate of subsistence allowance payable under the Act with, reference to any difference in the status of the employers concerned. On the other hand, Section 3 has provided a standard rate of subsistence allowance to all employees engaged by employers belonging to both categories and a common authority to entertain and decide the application u/s 4 of the Act. The scheme of the provisions in the Act would thus indicate that it is an enactment applicable to employers of all establishments coming within the purview of the Act irrespective of the fact that they fall under one or the other category mentioned in Section 2(a)(i) of the I.D. Act. As far as establishments brought within the purview of the Act are concerned no distinction seems to have been made by the legislature regarding the applicability of the provisions based upon the distinction between the employers. Employees working in all establishments coming within the purview of the Act seems to have been dealt with equally in all respects and no distinction in procedure seems to have been intended to be made in the matter of processing the application and taking a decision thereon depending upon the difference in the status of the employers as contended by the learned Counsel for the first Respondent. If this be the scheme of the Act, can Rule 5(1) of the Rules be interpreted as a direction to send the application received under rule to different conciliation officers appointed under the I.D. Act depending upon the status of the employers is the question to be decided in the case.

Keeping in mind the scheme of the Act as analysed above and also the fact that the Act is an enactment by the State legislature, we are of the view that the only reasonable and harmonious manner in which Rule 5(1) of the Rules can be interpreted is that the conciliation officer to whom the application is to be directed to be sent is the one appointed by the State Government under the Act and not the officer appointed by the Central Government even in cases where the employer involved is one coming within the definition contained in Section 2(a)(i) of the I.D. Act. If a difference in the procedure to be followed is contemplated as contended by the first Respondent and upheld by the learned Single Judge, the rule making authority would have indicated so expressly. That has not been done. Moreover, as already indicated none of the provisions in the Act has made any distinction in the matter of conferment of right to the employees and power on the authorities to entertain application under the Act based upon difference in the status of employers. Yet Anr. matter to be noted is that the claim for subsistence allowance and disputes relating thereto cannot be treated as industrial disputes coming within the purview of the I.D. Act and as such there is no justifiable reason to think that only an officer who has jurisdiction over the employer under the I.D. Act can be conferred with power to conduct an enquiry and submit report on the application filed u/s 4 of the Act also.

The interpretation canvassed for by the learned Counsel for the first Respondent can be accepted only on the assumption that a classification or differentiation has been made by the provisions in the Act in the case of applications received from employees working under the employers coming within the definition of Section 2(a)(i) of the I.D. Act. It cannot be said that though in matters coming within the purview of the I.D. Act, only the conciliation officers appointed by the Central Government may have power or jurisdiction over employers like the first Respondent who falls u/s 2(a)(i) of the I.D. Act, they cannot be subjected to the jurisdiction of officers appointed by the State Government for matters not falling under the purview of the I.D. Act as per the provisions of the Act and Rules passed by State legislatures. In fact the Act and Rules itself are example for it. As such we find it difficult to assume that only an officer having jurisdiction over the employer under the I.D. Act could have been legally indicated as the conciliation officer for conducting the enquiry and submission of report. Similarly, we are not also impressed by the submission that only the conciliation officers appointed by the Central Government will be properly equipped to conduct the enquiry in an effective and satisfactory manner avoiding delays. The main purpose of the enquiry is only to ascertain whether any amount is due as subsistence allowance from the employer to the employee and if so what is the quantum. Of course incidental questions such as dispute regarding the status of employee, etc., may also arise. None of the above matters can be considered as matters which cannot be dealt with by conciliation officers appointed by the State if materials are placed before them. As such we do not find any merit in any of the contentions raised in support of the view taken by the learned Single Judge.

On the other hand, we find that if the rule is interpreted as a direction to send the application to the conciliation officer appointed by the State, reference will be to an officer under the administrative control of the State Government and its delegate so that it will be possible to control the entire proceedings more effectively and to take a final decision thereon within the time limit fixed by the Act and rules. The rule so interpreted will have the advantage of extending an equal treatment to all the employees coming within the purview of the Act as far as the procedure to be followed in reaping the benefit conferred on them by Section without any distinction whatsoever.

For all these reasons, we find that the view taken by the learned Single Judge cannot be sustained in law. We would accordingly hold that the conciliation officer to whom a copy of the application is to be sent for enquiry and report under Rule 5 of the Rules is the concerned conciliation officer appointed by the State Government under the I.D. Act and not the conciliation officer appointed by the Central Government, even in cases where the employer is one falling u/s 2(a)(i) of the I.D. Act.

Though we have found that the view taken by the learned Single Judge on the disputed point is unsustainable in law, we will not be justified in setting aside the consequential directions issued by the learned Judge since such directions have already been carried out and fresh orders have also been passed under Rule 5(4) of the Rules based upon the report submitted by the conciliation officer appointed by the Central Government and such orders are under challenge in a separate O.P. filed by the first Respondent. In the light of the subsequent developments indicated above, we would allow the directions issued by the learned Single Judge intact subject to the result of the O.P.

We would accordingly dispose of the appeal declaring the legal position and refusing consequential relief to the Appellant in the light of the subsequent developments. No costs.