CWP No.1493 of 2008 1 IN THE HIGH COURT OF PUNJAB & HARYANA, CHANDIGARH CWP No.1493 of 2008 Date of decision October 13, 2009 M/s Indian Sulphacid Industries Ltd. ....... Petitioner Versus Presiding Officer, Industrial Tribunal, Ambala and others. ........ Respondents CORAM: HON'BLE MR. JUSTICE K. KANNAN Present:- Mr. B. R. Mahajan, Advocate with Mr. V.K. Kaushal, Advocate for the petitioner. Mr. Anil Chawla, Advocate for respondent Nos. 2 and 3. Mr. Rajneesh Bansal, Advocate for respondent Nos. 4 and 5. **** 1. Whether reporters of local newspapers may be allowed to see the judgment ? 2. To be referred to the reporters or not? 3. Whether the judgment should be reported in the digest? **** K. Kannan, J (oral). 1. The award in challenge before this Court is a direction by the Labour Court for payment of one month's salary in lieu of notice to the workman who sought for reference on issues of retrenchment compensation, encashment of due earned leave and bonus for the years 1998-99, 1999-2000 along with interest at the rate of 12% with effect w.e.f.5.12.1999 till the date of payment. This award came to be passed, answering a reference on a dispute referred by the Government for adjudication whether the retrenchment that resulted by cessation of activities of the establishment was justified or not and whether the CWP No.1493 of 2008 2 workmen were entitled to bonus and whether they were entitled to shoe and uniform allowances. 2. After a reference was made to the Labour Curt it bears out from records that the Labour Court issued notice to both the parties and finding that there was no reference on behalf of the Management, proceeded to set respondent Nos. 2 and 3 ex-parte. The first respondent which was the Company was found, on the return of summons, to be lying closed for the previous 2 or 3 years and the Court proceeded to set the first respondent factory also ex-parte. Only on 15.7.2003 after the respondents had been set ex-parte the Labour Court directed the filing of claim statement by the workmen and directed the matter to come up on 1.9.2003. It appears that even on 1.9.2003 the workmen had not filed the claim statement. But at the next hearing on 17.9.2003 the documents and the claim statement had been filed and the Labour Court posted the case for evidence of the workmen on 3.12.2003. The cases meandered for nearly three years even at the ex-parte stage before ultimately the Labour Court issued an award on 16.1.2007, admitting the claims only in the manner referred to above. The claim for shoe allowances alone had been rejected. 3. Learned counsel appearing for the Management submits, making pointed reference to Section 10-B of the Industrial Disputes (Punjab) Rules, 1958 to contend that as per Section 10-B (2) the workman was bound to furnish a copy of the claim statement to the opposite party and the Court shall fix the first date of hearing not beyond one month from the date of receipt of the order of reference when the opposite party shall file the written statement together with the documents within a period of 15 days from the date of first hearing and simultaneously forward a copy there of to the other party. Clause (3) of Section 10-B states that if the Labour Court found that the party referring a dispute CWP No.1493 of 2008 3 though directed did not forward the copy of the statement, it shall give direction to furnish the same or extend the time limit for filing the statement by an additional period. Clause (4) provides for right to the claim to file a rejoinder if it chooses to do so. Clauses 1 to 4 therefore provide for procedure for how the statements of the respective parties shall be received. Section 10-B (9) sets out a procedure for when the Court may set a person ex-parte. “ 10.B (9) In case any party defaults or fails to appear at any stage the Labour Court of Tribunal, as the case may be, may proceed with the reference ex-parte and decide the reference or application in the absence of the defaulting party. Provided that the Labour Court or Tribunal, as the case may be, may on the application of either party filed before the submission of the award revoke the ex-parte order if it is satisfied that the absence of the party was on justifiable grounds.” 4. By the only fact that Section 10-B (9) is cast after said clauses 1,2,3 and 4, learned counsel appearing for the Management would contend that without serving even a copy of the claim statement, the Management could not have invoked its powers under Clause 9 to set the Management ex-parte. In my view such an interpretation of the Section is unwarranted. Clause (9) enables a Labour Court, Tribunal, or National Tribunal to proceed with the reference ex-parte, in case the party had a case to appear “at any stage” . The construction made to this clause that any stage must be the stage after the copy of the statement is filed by the workmen against the Management is again not contemplated in the scheme of the Act. The duty to serve a copy arise only so long as a party has not been proceeded ex-parte. Clauses 1 to 4 prescribe a procedure as CWP No.1493 of 2008 4 to how the statement of the respective parties are to be exchanged so that no party is put at any surprise during trial. There are at least two stages when the parties are apprised of proceedings before the Labour Court: i) At the time when the Government makes a reference after receiving the report from the Conciliation Officer. ii) When the Labour Court itself issues notice after a reference is received from the Government. If any party does not avail to himself the benefit of notice by appearance before the Labour Court which may be either prior or after filing of claim statement by the workmen, it shall be perfectly legitimate for a Labour Court to proceed ex-parte. All that is necessary and which the law casts as an obligation is the subjective satisfaction of the Court that a notice has been served and the party has either not appeared or defaulted or failed to appear. It is not as if the Court has no power to allow the party to come to the Court for appropriate reliefs if any party is aggrieved by such an order setting him ex-parte and shows any justifiable causes. The proviso enables the Labour Court to entertain an application before the statement of the award to revoke the order if it is satisfied that the absence of the parties was on justifiable grounds. 5. I have pointed out that from the date when the respondent was proceeded against ex-parte, that was on 15.7.2003, the case was pending before the Labour Court for nearly four years and for all that time the Management allowed grass to grow under its own feet and did not evince interest in participating in the proceedings. 6. The justification for remaining ex-parte or even not responding to the workmen's claim comes in a different fashion for the Management. The justification was that it was in acute financial straits and the petitioner Company had itself applied under the provisions of the Sick Industries Special Provisions Act, 1985 for adjudging it as a sick Company. Even the proceedings under SICA does not relieve the Management of its CWP No.1493 of 2008 5 obligation to the workman protected under the provisions of Industrial Disputes Act. The Labour Court, on evidence, did not enter a finding of entitlement, relief of reinstatement but having due regard to the actual state of affairs merely directed the minimum of what the statute provided in its award, It had provided pay for one month's notice period, retrenchment compensation and the bonus which the workmen were entitled under the provisions of Bonus Act. It even denied to the workmen minor provisions like shoe allowances. The award of the Labour Court had considered the relevant factors and it provided for the reliefs but while doing so it also provided for encashment of due earned leave and interest at 12% for the bonus. 7. While adverting to the merits of the award that was passed, the learned counsel appearing for the Management would contend that even the reference did not contain adjudication of a dispute with reference to the alleged entitlement of the workmen for encashment of leave and therefore a direction to that effect violated the statutory provisions under Section 10(4) of the Industrial Disputes Act, 1947. Learned counsel would also submit that the provisions of interest @ 12% w.e.f. 5.12.1995 was not justified. He would further state that the bonus for the year 1999-2000 must be reckoned only for the wages earned up to 5.12.2009 when according to the workmen they had been illegally terminated and it could not be for the whole period ending 31.3.2000. As regards the claim for encashment of due earned leave the workmen may have any other relief under the Payment of Wages Act and they may pursue the same and I accept the contention that the Labour Court could not have granted a relief which was not a point referred to for adjudication. As regards even the period of entitlement of bonus, the learned counsel appearing for the workmen is prepared to concede that the calculation shall be only up to 5.12.1999 but contests the interest portion. I am of the view CWP No.1493 of 2008 6 that the Labour Court has considered the fact that the Management had not paid what was due by them. Section 20 of the Payment and Bonus Act cast the liability for the bonus to be paid within one year and contains also the provisions to secure its enforcement through coercive process. If the statute cast a liability for payment within a particular period and a demand had also been raised by the Management which was not complied with, then the provisions of the Interest Act makes possible for a Court to award interest although, there is no specific stipulation. The period of payment under the Payment of Bonus Act and the demand themselves are sufficient for a Court to award interest. Learned counsel for the workman also states that for all these years in spite of the award the Management has not made any payments. I find no justification to take a different view from that of the Labour Court to pay bonus which they were bound to pay. The only modification that the award shall suffer shall be the provisions of encashment of earned leave and a clarification that the bonus shall become payable only up to the period when wages were earned up to 5.12.1999. In all other respects the award of the Labour Court is confirmed. The writ petition is dismissed with such variations in the award as indicated above. The Management shall also be liable to pay costs of Rs.5,000/-. (K. KANNAN) JUDGE October 13, 2009 archana