Kays Construction Co. (P) Ltd. Vs.
State of Uttar Pradesh & Ors  INSC 274 (26 November 1964)
26/11/1964 HIDAYATULLAH, M.
GAJENDRAGADKAR, P.B. (CJ) SHAH, J.C.
CITATION: 1965 AIR 1488 1965 SCR (2) 276
RF 1966 SC 616 (5) R 1972 SC 451 (22)
U.P. Industrial Disputes Act, 1947, sub-ss.
(1) and (2) of s. 6-H--Back wages of workmen--Exact amount not calculated but
amendable to arithmetical calculation--Such amount whether 'money due' under
first clause or 'benefit capable of being computed in terms of money' under
The appellant company bad to pay under an
award of the Labour Tribunal the back wages of some workmen. The Labour
Commissioner issued a recovery certificate in respect of part of these wages to
the Collector under s. 6-H (1) of the U.P. Industrial Disputes Act, 1927, and
stated that for the rest of the amount due he would issue another certificate
later when the exact amount had been worked out. The appellant company
challenged the certificate before the High Court, contending that it was not in
respect of 'money due' for which proceedings under sub.s. (1) of s. 6-H could
be taken, but was a 'benefit' to be computed in terms of money for which the
appropriate proceedings could be only under sub-s. (2) of that section. A
single Judge of the High Court accepted the contention of the appellant
company, but his judgment was reversed by a Division Bench of the High Court.
The company appealed to the Supreme Court by special leave.
HELD : The Division Bench had correctly
confined the term 'benefits' under the second clause to benefits like rent free
quarters, free electricity etc. which were not things which a man earned
through his labour. In the present case what was required was not computation
of money-value of 'benefits' but only an arithmetical calculation of total
money wages over a certain period. The elaborate procedure under sub-s. (2) of
S. 6-H was not mean for cases where only arithmetical calculation was required.
The appeal therefore could not succeed. [281 C-G] M.S.N.S. Transports,
Tiruchirapalli v. Rajaram and another,  1 L.L.J. 336, Seshmusa Sugar
Works Ltd. v. State of Bihar, A.I.R. 1955 Patna 49, S. S. Shetty v. Bharat
Nidhi Ltd.,  S.C.R. 442, Kasturi & Sons (P) Ltd. v. N. Salivatesaram,
 S.C.R. 1, Punjab National Bank Ltd. v. Kharbunda,  Supp. 2 S.C.R.
977 and Shri Amarsinghji Mills Ltd. Nagarashua (M.P.),  1 L.L.J. 581,
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 1108 and 1109 of 1963.
Appeals by special leave from the judgment
and order, dated March, 15, 1962 of the Allahabad High Court in Special Appeal
No. 574 of 1960 and Supreme Court Appeal No. 53 of 1962 respectively.
Sir Iqbal Ahmad, K. Rajendra Chaudhuri and K.
R. Chaudhuri for the appellant (in both the appeals).
277 C. B. Agarwala and O. P. Rana, for
respondents Nos. 1 to 4 (in both the appeals).
The Judgment of the Court was delivered by
Hidayatullah, J. These are two appeals by special leave in which Kays
Construction Co. (P) Ltd. is the appellant.
Civil Appeal No. 1108 of 1963 is against a
judgment of the Allahabad High Court, dated March 15, 1962 and Civil Appeal No.
1109 of 1963 is against an order of the same High Court, dated May 9, 1962
declining to certify the case under Art.
133 of the Constitution as in the opinion of
the High Court the proceedings from which the appeal arose before the High
Court was not a civil proceeding within Art. 133. As special leave has been
granted against the judgment of the High Court and we are of opinion that the
appeal against that judgment must be dismissed, we do not think it necessary to
decide the other appeal.
The facts of the case may now be stated
briefly. The appellant Company is the successor of a private concern which went
under the name of Kays Construction Company and was owned by one Mr. H. M.
Khosla who is now Managing Director of the appellant Company. It appears that
Mr. Khosla found it unprofitable to continue the business as his own and he
stopped it for a while before Kays Construction Co. (Private) Ltd. came into
existence. The appellant Company took over the business and with it, some of
the workmen of the former concern but not all. This led to an Industrial
dispute before the Allahabad Industrial Tribunal (Sugar) and an award was made
on January 31, 1958. One of the questions in dispute before the Tribunal was
the reinstatement and back wages of the workmen who were not re- employed by
the appellant Company. The Tribunal delivered an award. The parties to this
appeal have not cared to produce the award but an extract from it relevant to
this part of the controversy is on the record and it runs as follows :-
"As a result of my findings above, I hold that management of Messrs. Kays
Construction Co. (Private) Limited, Allahabad, are required to reinstate the
old workmen given in the Annexure of Messrs. Kays Construction Co., Allahabad.
They will be restored in their old or equivalent jobs and given continuity of
service. In view of the somewhat peculiar features of this case and in the
largest interest of the Industry, I would, however, order that the workmen be
paid only 50 per cent, of their 278 back wages for the period they were
forcibly kept out of employment." After this award a large number of the
workmen preferred claims for their back wages purporting to do so under the
first subsection of s. 6-H of the U.P. Industrial Disputes Act, 1947. That
section, shorn of provisions which do not concern us, reads as follows :-
"6-H(1) Where any money is due to the workmen from an employer under the
provisions of Section 6-H to 6-R under a settlement or award, or under an award
given by an adjudicator or the State Industrial Tribunal appointed or
constituted under this Act, before the commencement of the Uttar Pradesh Industrial
Disputes (Amendment and Miscellaneous Provisions) Act, 1956, the workman may,
without prejudice to any other mode of recovery, make an application to the
State Government for the recovery of the money due to him, and if the State
Government is satisfied that any money is so due, it shall issue a certificate
for the amount to the collector who shall proceed to recover the same as if it
were an arrear of land revenue.
(2) Where any workman is entitled to receive
from the employer any benefit which is capable of being computed in terms of
money, the amount at which such benefit should be computed may subject to any
rule that may be made under this Act be determined by such Labour Court as may
be specified in this behalf by the State Government, and the amount so
determined may be recovered as provided for in subsection (1).
(3) The appellant Company made a large number
of objections to this demand before the Labour Commissioner, U.P. to whom the
powers of the State Government under the first sub-section of S. 6-H had been
delegated. These objections, briefly stated, were that some of the workmen had
already accepted employment either with the appellant Company or elsewhere and
that some of them were either not parties to the original dispute or had died subsequent
to the award. The appellant Company also contended that as the exact number of
days for which different workmen had been forcibly kept out of employment was
not determined an order 279 under S. 6-H(1) could not be passed. There were
some other contentions into which it is not necessary to go because the case
now lies within a narrow compass.
On July 21, 1958 the Labour Commissioner,
purporting to act under the first sub-section of s. 6-H issued a certificate to
the Collector, Allahabad for the recovery of Rs. 1,06,588-6-6. Certain
objections having been filed by the appellant Company before the State
Government, the Regional Conciliation Officer, Allahabad was ordered to verify
the claims. In the meantime, the Labour Commissioner issued another certificate
on September 9, 1959 by which the sum to be recovered was reduced to Rs.
50,654-9-6. This was said to be certainly due and it was stated that for the
balance another certificate would issue after the claims were fully verified.
On September 10, 1959, the Collector passed an order which was communicated
telegraphically to the Chief Mechanical Engineer, North-East Railway, Gorukhpur
demanding the said sum for payment to the workmen, from the security deposited
by the appellant Company with the Chief Mechanical Engineer. On November 2,
1959 the appellant Company filed a petition under Art. 226 of the Constitution
to have the orders dated September 9 and 10, 1959 quashed by a writ of
certiorari or by any other suitable order or direction and for release of some
property which, it may be mentioned, was under attachment after the first
certificate was issued.
The petition was heard by Mr. Justice Broome
of the Allahabad High Court and was allowed by him. He quashed the two orders
of the Labour Commissioner and the attachment of the property on condition that
the Company furnished adequate security to the satisfaction of the District
Magistrate of Allahabad.
The dispute was considerably narrowed before
Broom J. The only question that was considered was whether the claim of the
workmen before the Labour Commissioner fell to be considered under the first or
the second sub-section of s. 6-H. Mr. Justice Broome relying upon the analogy
of M. S. N. S. Transports, Tiruchirapalli v. Rajaram and Another(1) decided
under s. 33-C of the Industrial Disputes Act and Sesamusa Sugar Works Ltd. v.
State of Bihar and Others (2 ) decided under s. 20 of the Industrial Disputes
(Appellate Tribunal) Act, 1950, held that as the exact amount was required to
be determined, proceedings had to be taken before the Labour Court under the
second sub-section to determine the money equivalent of the "benefit"
to which the workmen were (1)  1 L.L.J. 336.
Sup./65-2 (2) A.I.R. 1955 Patna 49.
280 entitled before the certificate could
issue. In other words, Broome J. was opinion that the application of the first
sub-section of s. 6-H was premature and thus erroneous.
Against this decision an appeal was filed
under the Letters Patent of the High Court and by the order, now under appeal,
the judgment of Broome J. was reversed. The Division Bench held that the words
of the second sub-section "any benefit which is capable of being computed
in terms of money" indicated benefits like free quarters or free
electricity and not something which a workman earned through his labour.
Reliance was placed upon a decision of this
Court in S. S. Shetty v. Bharat Nidhi Ltd.(") where Bhagwati J. has
pointed out that if any benefit awarded by the Tribunal was not expressed in
terms of money it was necessary to have it computed in terms of money before
the appropriate Government could be asked to help in the recovery under s.
20(2) of the Industrial Disputes (Appellate Tribunal) Act 1950. In the opinion
of the Division Bench this decision supported their conclusion that the
computation in terms of money of a 'benefit' was something different from mere
arithmetical calculation of the amount of back wages. The Divisional Bench
distinguished Kasturi & Sons (P) Ltd. v. N. Salivatesaram & Anr.(2) on
the ground that s. 17 of the Working Journalists (Conditions of Service &
Miscellaneous Provisions) Act, 1955 referred expressly to money due by way of
compensation, gratuity and wages. The case in Punjab National Bank Ltd. v.
Kharbunda(3) where it was held that monetary advantage or profit was not
necessarily outside the word 'benefit' as used in s. 33C of the Industrial
Disputes Act 1947, was also distinguished. In view of these cases the Division
Bench did not follow the two rulings of the High Courtís cited earlier and
another reported in Shri Amarsinghji Mills Ltd. v. Nagarashua (M.P.) &
It is contended before us that the judgment
of the Divisional Bench is erroneous in its interpretation of s. 6- H(1) and
(2). The question thus is how are the two sub- sections to be read ? This
section is analogous to s. 33C of the Industrial Disputes Act, 1947 and s. 20
of the Industrial Disputes (Appellate Tribunal) Act, 1950, It is significant
that in all the three statutes the cognate section is divided into two parts
and the first part deals with recovery of 'money due' to a workman under an
award and the second deals with a 'benefit' computable in terms of money. Under
the first sub-section the State Government (or its delegate), if (1) 
S.C.R. 442. (2)  S.C.R. I.
(3)  Supp. 2 S.C.R. 977. (4)  1
281 satisfied that any money is due, is
enabled to issue a certificate to the collector who then proceeds to recover
the amount as an arrear of land revenue. The second part then speaks of a
benefit computable in terms of money which benefit, after it is so computed by
a Tribunal, is again recoverable in the same way as money due under the first
part. This scheme runs through S. 6-H sub-ss. (1) and (2).
That there is some difference between the two
sub-sections is obvious enough. It arises from the fact that the benefit
contemplated in the second sub-section is not "money due" but some
advantage or perquisite which can be reckoned in terms of money. The Divisional
Bench has given apt examples of benefits which are computable in terms of
money, but till so commuted are not "money due". For instance, loss
of the benefit of free quarters is not loss of "money due" though
such loss can be reckoned in terms of money by inquiry and equation. The
contrast between ,'money due" on the one hand and a "benefit"
which is not "money due" but which can become so after the money
equivalent is determined on the other, marks out the areas of the operation of
the two sub- sections. If the word "benefit" were taken to cover a
case of mere arithmetical calculation of wages, the first sub- section would
hardly have any play. Every case of calculation, however, simple, would have to
go first before a Tribunal. In our judgment, a case such as the present, where
the money due is back wages for the period of unemployment is covered by the
first sub-section and not the second. No doubt some calculation enters the
determination of the amount for which the certificate will eventually issue but
this calculation is not of the type mentioned in the second sub-section and
cannot be made to fit in the elaborate phrase "benefit which is capable of
being computed in terms of money". The contrast in the two sub-sections
between "money due" under the first sub-section and the necessity of
reckoning the benefit in terms of money before the benefit becomes "money
due" under the second sub-section shows that mere arithmetical
calculations of the ).mount due are not required to be dealt with under the
elaborate procedure of the second sub-section. The appellant no doubt conjured
up a number of obstructions in the way of this simple calculation. These
objections dealt with the "amount due" and they are being
investigated because State Government must first satisfy itself that the amount
claimed is in fact due. But the antithesis between "money due" and a
"benefit which must be computed in terms of money" still remains, for
the inquiry being made is not of the kind contemplated by the second sub-section
but is one for 282 the satisfaction of the State Government under the first
sub-section. It is verification of the claim to money within the first
sub-section and not determination in terms of money of the value of a benefit.
The judgment of the Division Bench was thus right. The appeal fails and will be
dismissed with costs. The companion appeal will also be dismissed but we make
no order about costs in that appeal.