South Indian Bank Ltd. Vs. A.R. Chacko
 INSC 233 (2 December 1963)
02/12/1963 GUPTA, K.C. DAS GUPTA, K.C. DAS
CITATION: 1964 AIR 1522 1964 SCR (5) 625
RF 1964 SC1699 (6) RF 1971 SC 922 (7) R 1975 SC1898
(5) RF 1975 SC2238 (31) RF 1980 SC2181 (137) RF 1981 SC1829 (74)
Industrial Disputes-Promotion of
workman-Pay-Application Whether lies under s. 33C(2)-Jurisdiction of Labour
Court Sastry Award-if benefits accrue after Award ceased to be operative--Accountant-If
Workman-Industrial Disputes Act, 1947(14 of 1947) 1/S.C.I./64--40 626 ss. 7,
19(3), 19(6), 33C(2)-Industrial Disputes (Banking Companies) Decision Act, 1955
(41 of 1955), s.
The respondent, a clerk in the appellant Bank,
was promoted as Accountant and his pay was fixed in the new post. The
respondent filed an application under s. 33C(2) of the Industrial Disputes Act
claiming that he was entitled from the date of his joining as accountant (a) to
the basic pay of his old grade with annual increments due on December 1, every
year, (b) special allowance of Rs. 40 per month for the additional supervisory
duties under para 164 of the Sastry Award, and (c) dearness allowance in terms
of the award, and prayed to the Labour Court for recovery of the amount due to
him. In resisting this application the appellant contended (1) that such an
application under s.
33C(2) was incompetent, (2) that in any case
the matter would be one within the jurisdiction of an industrial tribunal and not
the Labour Court, (3) that the Sastry Award had ceased to be operative long
before the date of the respondent's appointment as an Accountant and so no
benefits accrued to him under that Award, and (4) that by his appointment as
accountant, the respondent had ceased to be a workman and therefore not
entitled to the benefit of the Sastry Award. The Labour Court rejected all
these objections and allowed the application. In appeal by special leave.
Held: (i) Such an application by workmen lies
under s.33C(2) of the Industrial Disputes Act.
Central Bank of India v. P.S. Rajagopalan,
 3 S.C.R.
(ii) In view of the provisions of s. 7 and s.
33C(2), the Labour Court as specified by the Government and not the Industrial
Tribunal has jurisdiction to deal with this matter.
(iii) The objection that no benefit as
claimed could accrue to the respondent after the Sastry Award had ceased to be
operative, must be rejected. The provision in s. 19(6) as regards the period
for which the award shall continue to be binding is not in any way affected by
s. 4 of the Industrial Disputes (Banking Companies) Decision Act.
The different provisions made by the
legislature in s. 19(3) and s. 19(6) illustrate the distinction between an
award being in operation and an award being binding on the parties. Section
19(6) makes clear that after the period of operation of an award has expired,
the award does not cease to be effective.
Though in consequence of s. 4 of the
Industrial Disputes (Banking companies) Decision Act, the Award remained in
force only until March 31, 1959, it continued to have effect as a contract
between the parties that had been made by industrial adjudication in place of
the old contract.
(iv) On consideration of the evidence in the
present case, the respondent was merely a senior clerk, doing mainly clerical
duties 627 and going by the designation of accountant and was in reality a
workman as defined in the Industrial Disputes Act doing an element of
supervisory work. The Labour Court has taken proper note of the distinction
between accountants who are really officers and accountants who are merely
senior clerks with supervisory duties as envisaged by the Sastry Award.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No.178 of 1963.
Appeal by special leave from the order dated
November 27, 1961 of the Central Government Labour Court, Delhi Camp at Madras
in L.C.A. No. 564 of 1961.
M.C. Setalvad, J.N. Hazarika and K.P. Gupta
for the appellant.
M.K. Ramamurthi, R.K. Garg, S.C. Agarwal and
D.P. Singh for the respondent.
December 2, 1.963. The Judgment of the Court
was delivered by DAS GUPTA J.-This appeal arises out of an application under s.
33C(2) of the Industrial Disputes Act. The respondent A.R. Chacko was working
as a clerk in the Coimbatore Branch of the appellant-Bank when by an order
dated June 19, 1959, he was promoted as Accountant and was transferred to the
Alleppy Branch of the Bank. The appellant's pay in the new post was fixed by an
order on July 16, 1960. By this order he was allowed Rs. 120 as basic pay in
the new grade of Rs.
120-10-160 from January 1, 1960. From August
1, 1960 and thereafter he was allowed to draw Rs. 10 per month as CAIIB
allowance. The petitioner's case in the application under S. 33C(2) is based on
the contention that after his promotion to the post of accountant with
additional supervisory duties he was entitled to the special allowance of Rs.
40 tinder Para 164 of the Sastry Award. His case is that he was entitled from
the date of his joining as accountant, i.e., from July 13, 1959 (a) to a basic
pay of Rs. 95 of his old grade with annual increments due on December 1, every
year i.e., at the rate of Rs. 95 in the month of August, September, October and
November 1959 and thereafter at the rate of 628 Rs. 100 from December 1959 to
November 1960, and thereafter at the rate of Rs. 106 from December 1960; (b)
special allowance of Rs. 40 per month for the additional supervisory duties and
(c) dearness allowance in terms of the award.
The total amount to which he would be
entitled thus would be Rs. 4,495.22. The amount actually paid to him for the
period July 13, 1959 to the end of March 1961 for which the application was
brought was Rs. 3637.73. He claimed to be entitled to the additional amount of
Rs. 855.49 and prayed that the Labour Court be pleased to issue a certificate
for this amount to the Collector authorising the Collector to recover the
amount in accordance with law.
In resisting this application the Bank
contended (1) that such an application under s. 33C(2) of the Industrial Disputes
Act, 1947 was incompetent, (2) that in any case the matter would be one within
the jurisdiction of an industrial tribunal and not the Labour Court, (3) that
the Sastry Award had ceased to be operative from March 31, 1959 long before the
date of the respondent's appointment as an accountant and so no benefits
accrued to him under that award and (4) by his appointment as accountant the
respondent had ceased to be a workman and was therefore not entitled to the
benefits of the Sastry Award. The Labour Court rejected all these objections
and allowing the application, computed the amount due to the respondent from
the Bank to be Rs. 855.49.
Against this decision the present appeal has
been filed by special leave.
The first objection raised by the Bank is now
concluded by the decision of this Court in the Central Bank of India v.
P. S. Rajagopalan (1) where it has been held
that such an application by workmen lies under s. 33C(2) of the Act.
In support of the second objection Mr.
Setalvad drew our attention to the second schedule to the Industrial Disputes Act,
which sets out the matters within the jurisdiction of the Labour Court, but (1)
 3 S.C.R. 140.
629 does not include any which could be said
to cover an application under s. 33C(2). The contention is clearly
misconceived. The schedule refers specifically to s. 7 of the Act. That section
lays down that the appropriate government may, by notification in the official
gazette, constitute one or more Labour Courts for the adjudication of
industrial disputes relating to any matter specified in the second Schedule and
for performing such other functions as may be assigned to them under this Act.
Section 33C(2) in terms assigns the determination of the amount of benefit to
which the workman is entitled to receive from the employer and which is capable
of being computed in terms of money to such Labour Court as may be specified in
this behalf by the appropriate Government. Clearly, therefore, the Labour Court
as specified by the government and not the Industrial Tribunal has jurisdiction
to deal with this matter.
In support of the third objection raised by
the Bank Mr. Setalvad drew our attention to s. 4 of the Industrial Disputes
(Banking Companies) Decision Act, 1955, and argued that in view of this
provision the respondent was not entitled to any benefit of the Sastry Award in
July 1959 when he was asked to perform the additional supervisory duties.
Section 4 runs thus:"Notwithstanding anything contained in the Industrial
Disputes Act, 1947, or the Industrial Disputes (Appellate Tribunal) Act, 1950
the award as now modified by the decision of the Labour Appellate Tribunal in
the manner referred to in s. 3 shall remain in force until March 3 1,
1959." It is said that the non-obstante clause "Notwithstanding
anything contained in the Industrial Disputes Act, 1947" makes the
provisions of s. 19(6) inapplicable to the Sastry Award and so the provision
there that the award shall continue to be binding on the parties until a period
of two months had elapsed from the date on which notice is given by any party
bound by the award to the other party or parties intimating 630 its intention
to terminate the award, does not come into operation. To this objection two
answers are available.
The first is that there is difference between
an award being in operation and an award being binding on the parties. The
different provisions made by the legislature in s. 19(3) and s. 19(6)
illustrate this distinction. Under s. 19(3) the award remains in operation for
a period of one year. (The words "from the date on which the award becomes
enforceable under s. 17A" were inserted after the words " period of
one year" by the amending Act of 1956). Section 19(6) is in these words:"Notwithstanding
the expiry of the period of operation under sub-section (3), the award shall
continue to be binding on the parties until a period of two months has elapsed
from the date on which notice is given by any party bound by the award to the
other party or parties intimating its intention to terminate the award."
This makes it clear that after the period of operation of an award has expired,
the award does not cease to be effective.
For it continues to be binding thereafter on
the parties until notice has been given by one of the parties of the intention
to terminate it and two months have elapsed from the date of such notice. The
effect of s. 4 of the Industrial Disputes (Banking Companies) Decision Act is
that the award ceased to be in force after March 31, 1959. That however has
nothing to do with the question as to the period for which it will remain
binding on the parties thereafter.
The provision in s. 19(6 as regards the
period for which the award shall continue to be binding on the parties is not
in any way affected by s. 4 of the Industrial Dispute (Banking Companies)
Decision Act, 1955.
Quite apart from this, however, it appears to
us that even if an award has ceased to be in operation or in force and has
ceased to be binding on the parties under the provisions of s. 19(6) it will
continue to have its effect as a contract between the parties that has been
made by industrial adjudication in place 631 of the old contract. So long as
the award remains in operation under s. 19(3), s. 23(c) stands in the way of
any strike by the workmen and lock-out by the employer in respect of any matter
covered by the award. Again, so long as the award is binding on a party, breach
of any of its terms will make the party liable to penalty under s. 29 of the
Act, to imprisonment which may extend to six months or with fine or with both.
After the period of its operation and also the period for which the award is binding
have elapsed s. 23 and s. 29 can have no operation. We can however see nothing
in the scheme of the Industrial Disputes Act to justify a conclusion that
merely because these special provisions as regards prohibition of strikes and
lock-outs and of penalties for breach of award cease to be effective the new
contract as embodied in the award should also cease to be effective. On the
contrary, the very purpose for which industrial adjudication has been given the
peculiar authority and right of making new contracts between employers and
workmen makes it reasonable to think that even though the period of operation
of the award and the period for which it remains binding on the parties may
elapse-in respect of both of which special provisions have been made under ss.
23 and 29 respectively-may expire, the new contract would continue to govern
the relations between the parties till it is displaced by another contract. The
objection that no such benefit as claimed could accrue to the respondent after
March 31, 1959 must therefore be rejected.
This brings us to the last objection that on
appointment as accountant, the respondent Chacko ceased to be a workman.
Admittedly, the mere fact that he was
designated as accountant would not take him out of the category of workman.
This was recognised in para 332 of the Sastry Award when it was said:"The
categories of workmen known as Head Clerks, Accountants, Head Cashiers should
prima facie be taken as workmen wherever they desire to be so treated but with
this important proviso 632 that the banks are at liberty to raise an industrial
dispute about such classification wherever they feel that with reference to a
particular branch and a particular office a person so designated is really
entrusted with work of a directional and controlling nature and perhaps even
supervision of a higher type over ordinary supervisory agencies." In para
167, where the case of accountants was specially dealt with it was again said:In
several cases they will indisputably be officers. It is difficult to lay down a
hard and fast rule in respect of them. An Accountant oftentimes is the second
officer-in-charge of branches, particularly where the branches are
In big banks where there is a hierarchy of
officers there may be a chief accountant, accountants, and sub-accountants. In
most of these cases the "accountants" will probably be officers.
There will however be incumbents of such posts, though going under the
dignified designation of accountants who are in reality only senior clerks
doing higher type of clerical work involving an element of supervision over
other clerks as part of their duties. In such cases where they. can properly be
regarded as workman the minimum allowances which we have fixed for subaccountants
would equally apply to them." The Labour Court appears to have taken
proper note of this distinction between accountants who are really officers and
accountants who are merely senior clerks with supervisory duties and on a
consideration of the evidence on the record as regards the duties actually
performed by the respondent Chacko, has come to the conclusion that he was merely
a senior clerk, doing mainly clerical duties, and going by the designation of
accountant and was in reality a workman as defined in the Industrial Disputes
Act and doing an element of supervisory work.
633 We can find no mistake in the approach of
the Labour Court to the question nor can we see any justification for
interfering with its conclusion on the evidence in the case.
All the relevant documents produced have been
duly considered by the Labour Court in light of the oral evidence given; and on
such consideration it has come to the conclusion that though on paper certain
rights and powers were assigned to him and occasionally he acted in the place
of the Agent when the Agent was absent, such duties did not form part of his
principal and main duties.
Mr. Setalvad drew our attention to a copy of
the resolution passed by the Board of Directors under which the respondent as
Accountant was authorised "to make, draw, sign, endorse, purchase, sell,
discount and negotiate Bills of Exchange, Hundies, Drafts, Cheques, Promissory
Notes and other Negotiable instruments in the name of and on behalf of the Bank
and also to operate upon all banking account maintained by this Bank with
banks, bankers, and others in India for and on behalf of the South Indian Bank
Limited. " This resolution was dated July 18, 1959 and on the same date a
circular-letter was issued to all branches sending a binder containing specimen
signatures of all the officers of the Bank and the respondent's name was also
included in this list. In spite of this however, as pointed out by the Labour
Court, it does not appear from the evidence that generally Mr. Chacko had
occasion to exercise the several powers said to have been granted to him. A
truer picture of his actual functions appears from a document dated August 28,
1961 signed by the Agent which was put in evidence as Ex.1. and the correctness
of which does not appear to have been challenged on behalf of the Bank authorities.
The list of duties mentioned in this document clearly shows that these are
almost wholly clerical-the only exception being Item 14, viz., "and other
work entrusted to him by the Agent from time to time." The Labour Court
has also pointed out that no power of attorney was granted to Mr. Chacko. When
on a consideration 634 of all the relevant evidence the Labour Court has come
to the conclusion that the duties performed by the respondent consisted of
clerical work with supervisory functions and were certainly not managerial or
administrative as contended for by the Bank, we find no reason to interfere
with that conclusion.
It is pertinent to notice that on the Bank's
case a workman in the position of Chacko would on promotion to the rank of an
officer from that of a workman be financially a loser by being deprived of the
special allowance which he would have got as a workman with supervisory duties
without obtaining sufficient recompense for the same because of the performance
of the so-called managerial and administrative duties. It is not unreasonable
to think that this so-called promotion to officer's grade was really intended
to undo the effect of the recommendations of the Sastry Award for this
supervisory allowance. It. is difficult to understand otherwise that persons
with higher responsibilities and managerial duties to perform would in fact be
getting less in rupees and annas than what they would be getting as workmen. In
the circumstances, the finding of the Labour Court that the respondent was a
workman entitled to the benefits of the Sastry Award cannot be successfully
All the points taken in the appeal therefore
fail. The appeal is dismissed with costs.