Dena
Bank Vs. Kiritikumar T. Patel [1997] INSC 832 (19 November 1997)
S.C.
AGRAWAL, V.N. KHARE
ACT:
HEADNOTE:
THE
19TH DAY OF NOVEMBER, 1997 Present:
Hon'ble
Mr.Justice S.C.Agrawal Hon'ble Mr.Justice V.N.Khare P.P.Rao, Sr.Adv., Ramji Srinivasan,
Shaju Francis, R.Sasiprabhu, Advs. with him for the appellant Jitendra Sharma, Sr.Adv.,
(A.C.), Ms.Gunwant Dara, Ms.Minakshi Vij, Advs. with him for the Respondent Raj
Kumar Gupta H.V.I.Sharma and A.N.Bardiyar, Advs. for Intervenors.
The
following Judgment of the Court was delivered:
S.C.AGRAWAL,
J.:
Special
leave granted.
The
question that falls for consideration in this appeal is whether the expression
"full wages last drawn" in Section 17-B of the Industrial Disputes
Act, 1947 [hereinafter referred to as as `the Act'] means wages drawn by a
workman at the time of termination of his employment or wages which he would
have drawn on the date of the award.
The
respondent was employed as Clerk-cum-Cashier with the appellant-Bank. After
holding an inquiry into charges relating to misappropriation of funds of the
Bank of the tune of Rs.5,000/- as contained in charge sheet dated June 18, 1983 he was dismissed by order dated July 1, 1986. The said dismissal of the
respondent gave rise to an industrial dispute which was referred for
adjudication to the Central Industrial Tribunal, [hereinafter referred to as
`the Tribunal']. The tribunal found that the charges were not established and
held that the dismissal of the respondent was illegal. The Tribunal directed
reinstatement of the respondent in service. The appellant-Bank has filed a writ
petition under Article 227 of the Constitution in the Gujarat High Court
challenging the said award of the Tribunal and the said writ petition in
pending in the High Court. In the said writ petition the Division Bench of the
High Court on September 11, 1991 passed in interim order staying the operation
of the award on the condition that the appellant-Bank would comply with the
provisions of Section 17-B of the Act and will pay to the respondent during pendency
of the writ petition wages as per the said provisions subject to the respondent
complying with its requirement meaning thereby that he will be paid wages last
drawn or which would have been drawn if he was not suspended. An application was
submitted by the respondent for modification of the said order seeking a
direction for payment of wages as on the date of the award. The said
application was, however, rejected by the Division Bench of the High Court by
order dated October 22,
1991. Subsequently
another application was filed by the respondent whereunder it was submitted
that during pendency of the writ petition in the High Court settlements had
been signed with regard to wage revision, etc., the last such settlement being
dated 14, 1995 and that the said settlement had been implemented by the
appellant-Bank in respect of employees already in employment. The respondent
claimed that he was also entitled for revision in wage structure including
Dearness Allowance and other perks and perquisites. On the said application the
learned Single Judge on September 26, 1995 passed an order directing that the
respondent shall be paid the wages as revised by the appellant-Bank including
the increments, D.A., etc. which are granted to all the employees pursuant to
two settlements signed during the pendency of the writ petition between the
banking industry and the All India Trade Unions which are known as the Fifth
and the Sixth Bipartite Settlements and that arrears be paid to him from the
date of the award accordingly. The Letters Patent Appeal filed by the
appellant-Bank against the said order of the learned Single Judge was decided
by a Division Bench of the High Court by the impugned judgment dated February
7, 1996 whereby the direction given by the learned Single Judge regarding wages
payable to the respondent has been maintained but the direction regarding
arrears has been modified and it has been directed that the appellant-Bank
shall deposit all deposit of three years in the name of the respondent and that
from January 1, 1996 onwards the respondent will be paid according to the order
of the learned Single Judge and that the deposit will abide by the final result
of the Special Civil Application but the interest accruing on the fixed deposit
shall be paid to the respondent. Feeling aggrieved by the said judgment of the
Division Bench of the High Court the appellant-Bank has filed this appeal.
Shri P.P.Rao,
the learned senior counsel appearing for the appellant-Bank, has urged that
under Section 17-B of the Act the respondent is only entitled to payment of
wages last drawn on the date of the termination of his employment and that the
High Court was in error in directing that he should be paid the wages as
revised by the appellant-Bank including the increments, D.A., etc. which are
granted to all the employees pursuant to two settlement between the banking
Industry and the All India Trade Unions which are known as the Fifth and the
Sixth Bipartite Settlements which were signed during the pendency of the writ
petition in the High Court. It has been urged that the expression "full
wages last drawn" only means the quantum of emoluments actually drawn by
the workman at the time of the termination of his employment and would not mean
the wages which the workman would be entitled in terms of the award whereby the
order of dismissal has been set aside. In support of his aforesaid submission
the learned counsel has placed reliance on the following decisions of the
various High Court:
Airports
Authority of India, [1990] 1 LLJ 1192 (Mad.);
2. Daladdi
Coop. Agriculture Service Society Ltd. vs. Gurcharan Singh & Anr., 1993 (5)
SLR 719 (Punjab & Hary.);
3. Elpro
International Ltd. vs. K..B.Joshi & Ors., 1987 Lab.I.C. 1468 at 1472-1473 (Bom);
4. The
Kapurthala Central Cooperative Bank Ltd. vs. the Presiding Officer, Labour Court, Jalandhar, 185 (2) 88 Pun.L.R.74.
Shri Jitendra
Sharma, the learned senior counsel, who was requested to assist the Court as
amicus curiae since the respondent did not chose to appear in spite of notice,
has submitted that the expression "full wages last drawn" does not
connote the amount that was being paid to the workman at the time of
termination of his employment but means the wages that would be payable to him
at the time of order of reinstatement. In support of his aforesaid submission Shri
Jitendra Sharma has referred to the Objects and Reasons underlying the
enactment of Section 17-B and has urged that the said provisions have been
enacted to give protection to a workman who having succeeded in obtaining an
award from the Labour Court, Industrial Tribunal or National Tribunal setting
aside the order of termination of his service and directing that he be
reinstated, is not allowed to resume work because the employer has filed
proceeding in the High Court or in this Court to challenge the said award. The
learned counsel has urged that if the workman is to get only what he was
getting at the time of termination of his service, whether as subsistance
allowance or wages, he gets no benefit of the award in his favour and is put
back to his position as a suspended or charge sheeted workman notwithstanding
the fact that termination order has been set aside. Shri Jitendra Sharma has
also emphasised that it takes years to get a matter decided that it could not
be the intention of Parliament in enacting Section 17-B that workman should
only be paid wages that he was drawing several years ago at the time of the
termination of his service. In support of his submissions Shri Jitendra Sharma
has placed reliance on the following decisions of the High Courts:
i. Vishveswaraya
Iron and Steel Ltd. vs. M. Chandrappa & Anr., 1994 (84) FJR (Kar);
ii. Carona
Sahu Co. Ltd vs. A.K.Munakhan & Ors., 1995 (70) FLR 25 (Bom);
iii. Kirtiben
B.Amin vs. Mafatlal Apparels, 1995 (2) GLR 804 (Guj.);
iv. Macneil
and Magor Ltd. vs. 1st Additional
Labour Court and Anr.,
1995 (1) Labour Law Notes 1014 (Mad);
v. Fouress
Eng. (India) Pvt. Ltd. vs. Delhi Administration & Ors., 1987 (1) LLJ 485 (Delhi); and vi. P.Channaiah vs. Dy.Ex.Eng.
R.R.Dist. & Ors. 1996 (2) LLJ 240 (A.P.).
Shri Raj
kumar Gupta, the learned counsel for the Intervenor, has also placed reliance
on the decisions referred to above on which reliance was placed by Shri Jitendra
Sharma and has emphasised the hardship that would be caused to the workman if
the expression "full wages last drawn" is construed to mean wages
that were being drawn by him at the time of termination of his employment
because it would not take into account the rise in the cost of living during
the period the matter was pending adjudication before the Tribunal and is under
consideration before the High Court or this Court.
It
would be convenient at this stage to set out the provisions contained in
Section 17-B of the Act which reads as under:
Section
17-B. Payment of full wages to workman pending proceeding is higher courts. -
Where in any case a Labour court, Tribunal or National Tribunal by its award
directs reinstatement of any workman and the employer prefers any proceedings
against such award in a High Court or the Supreme Court, the employer shall be
liable to pay such workman, during the period of pendency of such proceeding in
the High Court or the Supreme Court, full wages last drawn by him, inclusive of
any maintenance allowance admissible to him under any rule if the workman had
not bee employed in any establishment during such period and an affidavit by
such workman had been filed to that effect in such Court:
Provided
that where it is proved to the satisfaction of the High Court or the Supreme Court
that such workman had ben employed and had been receiving adequate remuneration
during any period or part thereof, the Court shall order that no wages shall be
payable under this section for such period or part, as the case may be."
The objects and reasons for enacting the said provisions were as follows :
"When
Labour Courts pass award of reinstatement, these are often contested by an
employer in the Supreme Court of High Courts. It was felt that the delay in the
implementation of the award cause hardship to the workman concerned.
It
was, therefore, proposed to provide the payment of the wages last drawn by the
workman concerned, under certain conditions, from the date of the award till
the case is fianlly decided in the Supreme Court High courts." It would
thus appear that the object underlying the enacting of the provisions contained
in Section 17-B is to give relief to the workman in whose favour an award of
reinstatement has been passed by the Labour Court and the said award is under challenge in the High Court of
this Court. The said relief has been given with a view to relieve the hardship
that would be caused to a workman on account of delay in implementation of the
award as a result of the pendency of the proceedings in the High Court or this
Court.
The
question for consideration is: what is the extent to which such relief has been
granted to a workman under this provision? The objects and reason do not
indicate an answer to this question and its answer has to be found in the
provisions of the enactment. Since the expression "full wages last
drawn" in Section 17-B has been construed by the various High Court in the
decisions referred to above we would briefly refer to the same:
A
Division Bench of the Karnataka High Court in Vishveswaraya Iron and Steel Ltd.
vs. M. Chandrappa & Anr. [Supra] has held that the words "full wage
last drawn" take into their fold the wages drawn on the date of
termination of the services plus the yearly increment and the D.A. to be worked
out till the date of the award. In taking this view the learned Judge have
pointed out that it is not uncommon that the proceedings before the Labour
Court linger on for years and in some cases it takes a decade and that if after
a decade the full wages last drawn are to be paid from the date of the award
during the pendency of the proceedings before the Court at the same rate at
which the wages where last drawn by the workman when he was removed, dismissed
or terminated from the service, it would cause him great prejudice and
injustice and will result in harassment of the workman and that during the last
period of 10 years there would be escaiations in the cost of living and there
would also be increase in the wages paid to the workman doing the work of
similar nature.
The
said decision was followed by learned Single Judge of the Gujarat High Court in
Kirtiben B. Amin vs. Mafatlal Apparels [supra].
In Carona
Sahu Co. Ltd. vs. A.K.Munakhan & Ors [supra], a Division Bench of the
Bombay High Court, after referring to the decision of the Karnataka High Court Vishveswaraya
Iron and Steel Ltd. [supra], has laid down that the expression "full wages
last drawn" means the full wages which the workman was entitled to draw in
pursuance of the award and the implementation of which is suspended during the pendency
of the proceedings. The learned Judges have observed that though the work
"drawn" connotes past tense, it is obvious that the proper
construction of the section is that the workman is entitled to the full wages
which the workman would have been entitled to draw but for the pendency of the
proceedings in the High Court or this Court.
According
to the learned Judges every component of wages payable on the date of the award
must be taken into consideration while determining what were the wages payable
to the workman on the date of the award. It has been held that this
interpretation of the expression "full wages last drawn" subserves of
the object and intention of the Parliament in enacting Section 17-B of the Act.
In Macneil
and Magor Ltd. vs. 1st Additional Labour Court and Anr. [supra], a learned Single Judge of the Madras High
Court has followed the said decision of the Bombay High Court in Carona Sahu
Co. ltd. [supra]. Similarly in P.Channaiah vs. Dy. Ex. Eng. [supra] the
Division Bench of the Andhra Pradesh High Court has followed the said decision
of the Bombay High Court in Carona Sahu Co. Ltd. [supra].
The
High Court of Punjab & Haryana in Daladdi Cooperative Agriculture Service
Society Ltd. vs. Gurcharan Singh & Anr., 1993 (5) SLR 719, has, however,
taken a different view. The learned Judge have held that the provisions in
Section 17-B imply that if the workman is not gainfully employed in any
establishment he is entitled to the payment of wages at the same rate at which
he was being paid immediately before the termination of his services.
According
to the learned Judges the legislature while introduction Section 17-B intended
that the workman who remains unemployed in spite of an award having been passed
by the competent court or Tribunal, should be paid at least the wages at the
rate last drawn by him so that he may be able to subsist. It has been held that
the workman who has not been reinstated is entitled to payment of wages only at
the rate last drawn by him and not at the same rate at which the wages are
being paid to the workmen who are actually working.
The
decision of the Delhi High Court in Fouress Eng. (India) Pvt. Ltd. vs. Delhi
Administration & Ors., on which reliance has been placed by Shri Sharma,
does not throw much light on the meaning of the expression "full wages
last drawn".
The
decision of the Bombay High Court in Elpro International Ltd vs. K..B.Joshi
& Ors. [supra] and that of the Punjab & Haryana High Court in Kapurthala
Central Cooperative Bank Ltd. vs. The Presiding Officer, Labour Court, Jalandhar
[supra], on which reliance has been placed by Shri Rao do not deal with the
meaning of the expression "full wages last drawn".
In Elpro
International Ltd. vs. K..B.Joshi, the Division Bench of the Bombay High Court
was dealing with the challenge to the validity of the provisions in Section
17-B on the ground that the same are vague and arbitrary inasmuch as no
provisions is made as to what would happen to the amount paid if ultimately the
employer succeeds and the award is quashed and set aside and are therefore, violative
of Article 14 of the Constitution. It was also urged that the said provisions
encroach upon the powers of the High Court and this Court under Articles 226
and 136 of the Constitution. The High Court has rejected both the contention.
It was held that the absence of a provisions as to what would happen to the
amount paid under Section 17-B if ultimately the employer succeeds in the
litigation does not make the section either vague or arbitrary because what is
to be paid under Section 17-B is in the nature of subsistence allowance that is
payable under Section 10-A of the Industrial Employment [Standing Orders] Act,
1946 which is neither refundable nor recoverable irrespective of the result of
the enquiry. As regards challenge on the ground of encroachment upon the powers
of the High Court under Article 226 and this Court under Article 136 of the
Constitution, the High Court was of the view that Section 17-B only guarantees
to the workman the payment of wages by the employer during the pendency of the
proceedings before the High Court or the Supreme Court and that too subject to
the conditions laid down by the said section and the proviso, irrespective of
the result of the proceedings and it also imposes an obligation upon the
workman concerned to file an affidavit before the Court stating that he has not
been employed in any establishment during the pendency of the proceedings and
it also absolves the employer of his obligation to pay such wages if he is able
to prove to the satisfaction of the Court that the workman had been otherwise
and had been receiving adequate remuneration. The High Court has observed that
Section 17-B nowhere lays down that in extreme cases it is demonstrated that
award passed is either without jurisdiction or is otherwise a nullity or
grossly erroneous or perverse, the High Court or the Supreme Court is deterred
from exercising its powers under Articles 226 and 136 of the Constitution. On
that view the High Court held that Section 17-B does not in any way encroach
upon or override the powers of the High Court under Article 226 and this Court
Article 136 of the Constitution.
Similarly
in the Kapurthala Central Cooperative Bank Ltd. vs. The Presiding Officer, Labour
Court, Jalandhar [supra] the High Court of Punjab & Haryana considered the
validity of the challenge the Section 17-B as violative of the provisions of
Article 226 of the Constitution and negativing the said challenge it was held
that Section 17- B does not in any way interfere or restrict the same and that
the section only guarantees the workers the payment of wages by the employer
during the course of proceeding in the High Court or the Supreme Court of
Course subject to the safeguard provided for irrespective of the result of the
proceedings.
In
International Air Cargo Workers Union vs. International Airports Authority of
India [supra} the Division Bench of the Madras High Court has expressly stated
that they were not dealing with a case where a workman whose services have been
terminated was ordered to be reinstated by an award of the Tribunal and that it
was a case where the Tribunal had directed that management to absolve the
workman. Without deciding whether Section 17-B would be attracted in such a
case the High Court while applying the principles underlying the said section,
directly by way of interim relief, payment at the rate the workmen were being
paid by the contractor and in that context there are observations to the effect
that even if Section 17-B would be attracted no directions could have been
issued to pay wages more than the last wages drawn.
As per
the decisions of the High Court referred to above the expression "full
wages last drawn" in Section 17- B can mean as under:
(i) wages
only at the rate last drawn and not the same rate at which the wages are being
paid to the workman who are actually working. [Daladdi Cooperative Agriculture
Service Society Ltd. vs. Gurcharan Singh] (ii) Wages drawn on the date of
termination of the services plus the yearly increment and the Dearness
Allowance to be worked out till the date of the award.
[Vishveswaraya
Iron and Steel Ltd. vs. M.Chandrappa & Anr. and Kirtiben B. Amin vs. Mafatlal
Apparels] (iii) Full wages which the workman was entitled to draw in pursuance
of the award and the implementation of which is suspended during the pendency
of the proceeding [Carona Sahu Co. Ltd. vs. A.K.Munakhan & Ors., Macneil
and Magor Ltd. vs. 1st Additional Labour Court & Anr. and P.Channaiah vs. Dy.Eng.]
The first construction give to the words "full wages last drawn"
their plain and material meaning. The second as well as the third construction
read something more than their plain and material meaning in this words. In
substance these construction read the words "full wages last drawn"
as "full wages which would have been drawn". Such an extended meaning
to the words "full wages last drawn" does not find support in the
language of Section 17-B. Nor can this extended meaning be based on the object
underlying the enactment of Section 17-B.
As
indicated earlier Section 17-B has been enacted by Parliament with a view to
give relief to a workman who has been ordered to be reinstated under the award
of a Labour Court or the Industrial Tribunal during
the pendency of proceedings in which the said award is under challenge before
the High Court or the Supreme Court. The object underlying the provision is to
relieve a certain extent the hardship that is caused to the workman due to
delay in the implementation to the workman is in the nature of subsistence allowance
which would not be refundable or recoverable from the workman even if the award
is set aside by the High Court or this Court. Since the payment is of such a
character Parliament thought it proper to limit it to the extent of the wages
which were drawn by the workman when he was in service and when his services
were terminated and therefore used the words "full wages last drawn".
To read these words to mean wages which would have been drawn by the workman if
he had continued in service if the order terminating his services had not
passed since it has been by the award of the Labour of Industrial Tribunal,
would result in so enlarging the benefit as to comprehend the relief that has
been granted under the award that is under challenge.
Since
the amount is not refundable or recoverable in the even of the award being set
aside it would result in the employer being required to give effect to the
award during the pendency of the proceeding challenging the award before the
High Court or the supreme Court without his being able to recover the said
amount in the event of the awarded being set aside. We are unable to constitute
the provisions contained in Section 17-B, to cast such a burden on the
employer. In our opinion, therefore, the words "full wages last drawn"
must be given their plain and material meaning and they cannot be given the
extended meaning as given by the Karnataka High Court Visveswarya Iroon &
Steel Ltd.
[supra]
or the Bombay High Court in Carona Sahu Co. Ltd.
[supra].
Shri Jitendra
Sharma has laid emphasis on the word "full" in the expression
"full wages last drawn" and has submitted that the said word implies
that the last drawn must be the was which the workman would have drawn under
the award. We are unable to agree. In our opinion, the expression
"full" only emphasis that all the emoluments which are included in
"wages" as defined in clause [rr] of section 2 of the Act so as to
include in "wages" as referred to in sub-clauses (i) to (iv) are
required to be paid. In this context, it may also be mentioned that in Section
17-B Parliament has also used the words "inclusive of any maintenance
allowance admissible to him under to him any rule". These words indicate
that maintenance allowance that is admissible under any rule is required to be
paid irrespective of the amount which was actually being paid as maintenance
allowance to the workman. But with regard to wages Parliament has used the
words "full wages last drawn" indicating that the wages that were
actually paid and not the amount that would be payable are required to be paid.
As
regards the powers of the High Court and the Supreme Court under Article 226
and 136 of the Constitution it may be stated that Section 17-B, by conferring a
right on the workman to be paid the amount of full wages last drawn of the Labour
Court, Industrial Tribunal or National Tribunal in the High Court or the
Supreme Court which amount is not refundable or recoverable in the event of the
award being set aside, does not in any way preclude the High Court or the
Supreme Court to pass a order directing payment of a higher amount to the
workman if such higher amount is considered necessary in the interest of
justice. Such a direction would be dehors the provisions contained in Section
17-B and while giving the direction the Court may also give directions
regarding refund or recovery of the excess amount in the event of the award
being set aside. But we are unable to agree with the view of the Bombay High
Court in Elpro International Ltd. [supr] that in exercise of the power under
Article 226 and 136 of the Constitution an order can be passed denying the
workman the benefit granted under Section 17-B. The conferment of such a right
under Section 17-B cannot be regarded as a restriction on the powers of the
High Court or the Supreme Court under Article 226 and 136 of the Constitution.
In the
present case by his order dated September 26, 1995 the learned Single Judge,
while exercising the powers under Section 17-B, has directed payment of wages
as revised, including the increments, D.A., etc. which are granted to all the
employee pursuant to the Fifth and Sixth Bipartite Settlements. The said
direction of the learned Single Judge, which has been upheld by the Division
Bench of the High Court in the impugned judgment, cannot tb upheld since it
amounts to directing payment of wages which would have been drawn by the
respondent if he had been reinstated and not the full wages last drawn by him.
For
the reasons aforementioned, the appeal is allowed and the impugned judgment of
the Division Bench of the High Court dated February 7, 1996 as well as the order dated September 26, 1995 passed by the learned Single judge
are set aside, No order as to costs.
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