WP/2397/2010 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.2397 OF 2010 Force Motors Ltd., Pune ... Petitioner V/s. Shantilal Hukumchand Sancheti & Anr. ... Respondents Mr. S.K. Talsania, Sr. Counsel, with Mr. Vishal Talsania and Ms. Pallavi Dedhia i/b. Sanjay Udeshi & Co. for the Petitioner. Mrs. Neeta P. Karnik for Respondent No.1. CORAM : SMT. NISHITA MHATRE, J. RESERVED ON : 20 TH DECEMBER, 2010. PRONOUNCED ON : 8 TH MARCH, 2011. JUDGMENT : 1. Rule. Rule made returnable forthwith, by consent. 2. Once again the vexed question as to what could be considered as an incidental issue in an application under Section 33C(2) of the Industrial Disputes Act, 1947, (for short “the I.D. Act”), arises for determination in the present Petition. 3. The first respondent, (hereinafter referred to as “the workman”), was employed with the petitioner, (hereinafter referred to as “the Company”), from 5th October, 1970. He was recruited as a “Junior Clerk” in the Traffic Department. He was later re- WP/2397/2010 2 designated as a “Senior Assistant” on 1st November, 1979. Thereafter, he was transferred to the Stores Department on 14th January, 1980. The Company dismissed the workman on 7th August, 1982 for having committed gross misconduct of insubordination and disobedience. Aggrieved by that order, the workman preferred Complaint (ULP) No.51 of 1988, which was allowed partly by the Labour Court, Pune. The Company was directed to reinstate the workman with continuity of service and to pay him 50% of his back- wages by the order of the Labour Court dated 27th September, 1988. Both the workman as well as the Company preferred Revision Applications before the Industrial Court, Pune. By an order dated 1st March, 1993, the Industrial Court allowed the Revision Application of the workman and granted him full back-wages. The Revision Application of the Company was dismissed. According to the Company it complied with the order of the Industrial Court by reinstating the workman with effect from 23rd April, 1993 and paying him an amount of `2,93,984.34 on 14th May, 1993 as back-wages. 4. The workman filed Miscellaneous Application (ULP) No.12 of 1993 before the Labour Court under Section 50 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, (for short “the MRTU & PULP Act”), claiming that he was entitled to the benefits of Settlements which were signed by the Company with the Union representing the employees while he was out of service. These Settlements were signed on 24th January, 1985, 22nd June, 1988 and 30th April, 1993. The workman claimed an amount of `2,41,096/-. Criminal Complaint (ULP) No.22 of 1993 was also filed by the workman under Section 48 of the MRTU & PULP Act. The process issued by the Labour Court against the Managing Director of the Company was WP/2397/2010 3 quashed by the Industrial Court. Criminal Writ Petition No.1066 of 1997 filed by the workman against the order of the Industrial Court was dismissed on 30th July, 2001. Soon thereafter on 3rd September, 2001, the Miscellaneous Application filed under Section 50 of the MRTU & PULP Act was also dismissed by the Labour Court by concluding that it did not have the jurisdiction to decide the Miscellaneous Application. The Industrial Court set aside this order of the Labour Court and remanded the application again to the Labour Court. The application was dismissed once again which lead to another Revision Application being filed by the workman. The Industrial Court dismissed that application. No further proceedings have been initiated by the workman against that order of the Industrial Court passed on 5th October, 2002 in Revision Application (ULP) No.81 of 2000. 5. While these proceedings under the MRTU & PULP Act were pending, the workman filed an application under Section 33C(2) of the I.D. Act, being Application (IDA) No.75 of 2000. The workman claimed an amount of `2,45,345.55 as dues payable to him under the Settlement dated 30th April, 1993. He also claimed interest @ 18% p.a. on that amount. According to the workman, after he was reinstated in service on 24th April, 1993, the Company did not pay the benefits of the aforesaid Settlement. 6. The workman filed another application, being Application (IDA) No.25 of 2003, under Section 33C(2) of the I.D. Act claiming `2,41,096/- together with interest @ 18% p.a. In this application, he sought dues payable to him under the Settlement of 1984, 1988 and 1993 which had not been extended to him after he was reinstated in service. WP/2397/2010 4 Thus, the period for which the workman claimed difference in wages in both the applications, taken together, was from 1982 till 1993. 7. The workman and five other workmen filed Complaint (ULP) No.377 of 1977 before the Industrial Court under Item 9 of Schedule IV of the MRTU & PULP Act. It was alleged that the Company had committed an unfair labour practice by not extending the benefits of certain Settlements to them. The Industrial Court allowed the complaint by an order dated 7th September, 1998. Aggrieved by this decision, the Company preferred Writ Petition No.6605 of 1998 which is pending in this Court. The order of the Industrial Court has been stayed by this Court. 8. In its written statement, the Company contended that the workman was not given the benefits of the Settlement dated 30th April, 1993 while paying him his back- wages. The Company pleaded that this was because the Settlement of 30th April, 1993 was binding only on such workmen who had submitted an undertaking in writing, accepting the terms and conditions of the Settlement. As the workman had not submitted any such undertaking, as required under the Settlement, he was denied the benefits of the Settlement of 30th April, 1993. It was also pleaded that the application was barred under Section 59 of the MRTU & PULP Act since he had sought the same relief before the Industrial Court. 9. Both the applications filed under Section 33C(2) of the I.D. Act, i.e. Application (ULP) Nos.75 of 2000 as well as 25 of 2003, were heard together by the Labour Court, WP/2397/2010 5 on an application made by the workman. The workman filed his affidavit in lieu of examination-in-chief in which he has stated that he had sent several letters and had orally requested officials of the Company to permit him to sign the undertaking in order to avail of the benefits of the Settlement. However, the Company had refused to accept his request. In his cross-examination, when asked whether he had furnished the undertaking accepting the conditions in the aforesaid Settlements the workman answered that the Company had not supplied the Form of Undertaking to him. He further stated that he had written to the Company asking for the Undertaking Form. 10. The witness of the Company has stated in his affidavit filed in lieu of examination- in-chief that the workman had refused to submit any undertaking accepting the terms and conditions of the Settlement dated 30th April, 1993 and it was for this reason that the benefits of this Settlement were not extended to him. In his cross-examination, the witness has denied the suggestion that the Company had not furnished Annexure-I of the Settlement to the workman despite his request. Annexure-I was the Form of Undertaking. 11. The Labour Court by its Judgement and Order dated 27th April, 2009 has allowed the Application (IDA) No.75 of 2000. It has directed the Company to pay an amount of `2,45,345/- to the workman along with the interest thereon @ 8% p.a. from the date of the application, i.e. from 29th April, 2000, till realization of the entire amount. By another order dated 27th April, 2009 passed in Application (IDA) No.25 of 2003 the Labour Court directed the Company to pay an amount of `2,08,555/- with interest @ 8% p.a. from the date of the application i.e. from 13th March, 2003 till realization of the WP/2397/2010 6 amount. The petitioner then preferred Miscellaneous Application No.3 of 2009 for review of the order passed in Application (IDA) No.25 of 2003. That application was dismissed by the Labour Court on 10th February, 2010 on the ground that the review was not maintainable. ARGUMENTS OF MR. TALSANIA, THE LEARNED COUNSEL FOR THE COMPANY 12. Mr. Talsania, the learned Counsel appearing for the Company, pointed out that the claim under Section 33C(2) of the I.D. Act was not maintainable as the entitlement of the workman to the amount payable under the Settlement was disputed. His submissions were as follows : . The jurisdiction of the Labour Court under Section 33C(2) of the I.D. Act is akin to that of the Civil Court which executes a judgement or order. It cannot traverse beyond the computation of the amount payable. The Labour Court has no jurisdiction to decide the entitlement of the workman. The very fact that the workman had not signed the declaration would indicate that he was not entitled to the amount. Any decision or enquiry by the Labour Court as to whether the workman was prevented from signing such a declaration or he had voluntarily refused to sign the same would amount to deciding his entitlement. Whether the workman was prevented from signing the declaration is a disputed question which cannot be answered by the Labour Court under Section 33C(2) of the I.D. Act as that would lead to adjudication of his entitlement. Such an enquiry would not amount to deciding whether there was an existing right as the WP/2397/2010 7 enquiry would not be incidental to the main issue of computation of an amount under Section 33C(2) of the I.D. Act. Clause (1.2) of the Settlement of 30th April, 1993 required each individual workman to signify the acceptance of the terms and conditions of the Settlement by giving a declaration in the form of Annexure-I to the Settlement. This declaration was not furnished by the workman and, therefore, the amount was not paid to him. No letters signifying his acceptance were produced by the workman, neither was any letter produced indicating that the Company had refused permission to him to sign the declaration envisaged under the Settlement of 30th March, 1993. By the impugned order, the Labour Court has modified the Settlement by observing that no declaration was required from the Senior Clerk. It was only in his evidence that the workman contended that he was willing to sign the relevant declaration. Such an offer made after seven years is of no consequence. Therefore, the application ought to have been dismissed. ARGUMENTS OF MRS. NEETA KARNIK, THE LEARNED ADVOCATE FOR THE WORKMAN 13. Mrs. Karnik's submissions were as follows: The benefits claimed under Section 33C(2) of the I.D. Act by the workman flows from a pre-existing right contained in the Settlement dated 30th April, 1993. The refusal by the Company to permit him to sign the Settlement was because the workman had litigious tendencies. The entitlement of the dues is envisaged in the Settlement. The undertaking required to be furnished under the Settlement had not been furnished by the workman because of the refusal by the WP/2397/2010 8 Company to furnish him the format in which the undertaking was expected. The issue as to whether the workman was refused permission or he voluntarily did not sign the declaration is a question which is incidental to the main issue of payment of the amounts under the Settlement of 30th April, 1993. The furnishing of the undertaking does not dictate the entitlement as the entitlement is contained in the Settlement itself. 14. Both the learned Counsel have referred to several judgements which I will deal with presently. 15. By a letter dated 20th September, 1995, the workman had called upon the Company to recalculate the amounts paid to him in accordance with the Settlement of 1993. Several similar letters have been written by the workman to the Company. By a letter dated 15th January, 1996, the Company has stated that the question of payment of arrears in accordance with the Settlement of 30th April, 1993 was a subject matter of various cases filed by the workman in Court and, therefore, it had not extended the benefits of that Settlement to the workman. There does not appear to be any letter on record written by the Company to the workman calling upon him to sign the declaration in order to pay him the amount. The Labour Court by the impugned order has held that the Company had avoided the request of the applicant, i.e. the workman, to permit him to sign the undertaking with an intention to deny him the benefits of the Settlement of 30th April, 1993. It was, therefore, of the view that the workman was entitled to the amount claimed by him together with interest @ 8% p.a. WP/2397/2010 9 16. The issue involved in the present case is as to whether the workman had not signed the declaration because of the Company denying him the opportunity to do so or because of an overt act on the part of the workman refusing to sign the undertaking. There can be no dispute that the Labour Court is not vested with the jurisdiction to adjudicate an entitlement of any amount payable to the workman. It can merely compute the amount. However, while doing so it can always conduct an incidental enquiry which would facilitate its decision while computing the amount. 17. In the case of The Mahalaxmi Co-operative Housing Society Ltd. vs. Dilip Singh Parocha & Ors., reported in 2007(1) ALL MR 571, the Division Bench of this Court has considered the judgements of the Supreme Court in the cases of Central Bank of India Ltd. vs. P.S. Rajagopalan, reported in AIR 1964 SC 743, R.B. Bansilal Abirchand Mills Co. Pvt. Ltd. vs. The Labour Court, Nagpur, reported in AIR 1972 SC 451, Ramakrishna Ramnath vs. State of Maharashtra, reported in 1975 LIC 1561, Municipal Corporation of Delhi vs. Ganesh Razak, reported in (1995) I CLR 170, Central Inland Water Transport vs. The Workman, reported in (1974) 4 SCC 696, Som Vihar Apartment Owners Housing Maintenance Society Ltd. vs. Workmen, reported in (2001) I LLJ 1413, P.K. Singh vs. Presiding Officer, reported in AIR 1988 SC 1618, Tara vs. Director, Social Welfare, reported in AIR 1999 SC 1508, State of U.P. vs. Brijpal Singh, reported in 2006 (2) ALL MR (S.C.) 6, R.S.R. Mohata Spinning & Weaving Mills Pvt. Ltd., Hinganghat vs. Chintaman Govindrao, reported in 2001 LAB I.C. 2269, Central Group vs. Motiram Thakre, reported in (2005) II LLJ 492 (Bom), and Divisional Personnel Officer, Southern Railway, Palghat vs. P. Ramchandren, WP/2397/2010 10 reported in (1991) 11 CLR 364. Speaking for the Bench, Desai J. has elucidated in para 40 of the judgement in the case of The Mahalaxmi Co-operative Housing Society Ltd. (supra) the propositions which emerged on consideration of the aforesaid judgements. Para 40 of the judgement reads as under : “40. From the judgments of the Supreme Court and of this Court to which we have made a reference following propositions emerge:- a) The legislature recognised that individual workmen should be given a speedy remedy to enforce their existing individual rights and so it inserted Section 33C in the said Act in 1956. By resorting to Section 33C individual workmen can enforce their rights without having to take recourse to Section 10(1) of the said Act or without having to depend upon their union to espouse their cause. b) There is no bar preventing a Labour Court dealing with an application under Section 33C(2) of the said Act from determining the workmen’s right to receive benefit if it is disputed by the employer. c) This view is consistent with the legislative intent and a contrary view would mean that it would be at the option of the employer to allow the workmen to avail himself of the remedy provided by Subsection (2) of Section 33C because he has merely to raise an objection on the ground that the right claimed by the workman is not admitted to oust the jurisdiction of the Labour Court, to entertain the workman’s application. d) In some cases determination of the question about computing the benefit in terms of money may have to be preceded by an enquiry into the existence of the right, and such an enquiry must be held to be incidental. e) Whether such inquiry is incidental or not will depend on the facts and circumstances of each case. f) When Labour Court’s jurisdiction is sought to be ousted by raising objection to it, the Labour Court will have to WP/2397/2010 11 examine whether it has jurisdiction or not. In such a situation the question of status of the person applying under Section 33C(2) becomes an incidental matter and the Labour Court can enquire into that matter. g) In a given case it may be necessary to determine the identity of the person against whom the claim is made if there is challenge and such determination would be incidental. h) Interpretation of an Award or a Settlement on which the workman’s right exists is incidental to the Labour Court’s power under Section 33C(2). i) Under Section 33C(2) the Labour Court cannot be asked to disregard the dismissal of the workman as wrongful and on that basis compute his wages. j) Under Section 33C(2) the workman cannot claim that his dismissal or demotion is unlawful and, therefore, he continues to be the workman of the employer and he is entitled to the benefits due to him under a pre- existing contract. k) Under Section 33C(2), it would not be open to an employee, notwithstanding a settlement, to claim the benefit as though the said settlement has come to an end. l) If the workman makes his claim on the basis of a lay off and the employer raises a plea that there was no lay off but closure, the Labour Court must decide as to whether there was really a lay off or a closure and if it takes the view that there was a lay off without any closure of the business, it would be acting within its jurisdiction if it awarded compensation in terms of the provisions of Chapter V-A. In such a situation the plea raised by the employer is a jurisdictional plea and the Labour Court has to decide whether it has jurisdiction to make the computation. Thus, jurisdictional pleas will have to be decided by the Labour Court. m) If the workers claim that they had been actually promoted to a particular cadre and the management denies the promotion the Labour Court can decide whether there was such a promotion or not it being an WP/2397/2010 12 incidental question, but under Section 33C(2) the Labour Court cannot reclassify the workers. n) While dealing with an application under Section 33C(2) the Labour Court has to keep the legislative intent in enacting this provision in mind. It must adopt a cautious approach and it must not allow an attempt to oust the jurisdiction of the Labour Court by raising frivolous plea succeed for that would mean driving the workman unnecessarily to another forum. In such cases it will have to conduct incidental inquiry to determine the identity of the person against whom the claim is made and the person who makes the claim. Nature of incidental inquiry will obviously depend on facts and circumstances of each case. ” 18. Thus, an incidental enquiry can always be conducted to determine whether a workman is entitled to the benefits as computed by him. The issue as to whether the declaration was not signed because of an overt act by the employer or the workman is an incidental issue involving no complicated question relating to the entitlement of the workman to the amounts payable under Section 33C(2) of the I.D. Act. Therefore, in my opinion, the Labour Court was correct in deciding the application under Section 33C(2) of the I.D. Act. 19. According to Mr. Talsania, in the case of Indu Vishnu Mahajan vs. National Safety Council & Ors., reported in 1987 II CLR 259, another Division Bench of this Court, while interpreting the law laid down by the Supreme Court in the case of R.B. Bansilal Abirchand Mills Co. Pvt. Ltd. (supra) , takes a view contrary to the one expressed by the Division Bench in The Mahalaxmi Co-operative Housing Society Ltd. (supra). He pointed out that a judgement in the case of Indu Vishnu Mahajan (supra) was not noticed by the Division Bench while deciding the case of The Mahalaxmi Co- WP/2397/2010 13 operative Housing Society Ltd. (supra). In the case of Indu Vishnu Mahajan (supra), the workman was terminated from service without following the procedure required under the rules governing her service conditions and in breach of the provisions of Section 25F of the I.D. Act. She claimed her wages by filing an application under Section 33C(2) of the I.D. Act, contending that her termination from service was thus non est. The Labour Court dismissed the application on the ground that it could go on decide whether the respondent in that case was an “Industry” or whether the “Claimant” was a workman. It further held that there was substantial compliance with Section 25F of the I.D. Act. The Labour Court was of the view that it was only upon the striking down of the order of termination that the claimant could be considered to have an existing right to collect the salary from the employer. This could not be considered as an incidental matter. The salary was claimed by the employee contending that there was no termination of service as there was a breach of the provisions of Section 25F of the I.D. Act and, therefore, she was entitled to wages as the order terminating her services was void, ab initio, invalid and inoperative. After considering the judgement of the Supreme Court in the case of Central Bank of India Ltd. (supra), the Division Bench held that the Labour Court acting under Section 33C(2) of the I.D. Act is not vested with the powers to adjudicate the issue as to whether the provisions of Section 25F of the I.D. Act had been complied. The Division Bench noticed the judgement in the case of R.B. Bansilal Abirchand Mills Co. Pvt. Ltd. (supra) and held that the Labour Court could not give a wrong decision on the jurisdictional plea. The Court further observed that the Labour Court’s jurisdiction could not be ousted by a mere plea denying the workman’s claim to computation of the benefits. In the circumstances of the facts before it, the WP/2397/2010 14 Division Bench held that there was no existing right in the employee to claim salary when there was an order of termination passed against her and until that order was set aside, she was not entitled to claim the salary by filing an application under Section 33C(2) of the I.D. Act. 20. In my opinion, there is no conflict between the two decisions of the Division Benches. In the case of Indu Vishnu Mahajan (supra) all that the Division Bench has observed is that in the facts and circumstances of that case, the Labour Court had rejected the application correctly as it could not arrogate to itself the jurisdiction to determine whether the workman had been terminated from service in breach of the provisions of Section 25F of the I.D. Act while considering an application under Section 33(C) of the I.D. Act. The Court has merely held that a wrong decision on the jurisdictional plea cannot confer jurisdiction on the Labour Court. This finding, in my opinion, is not contrary to the decision of the Division Bench in Mahalaxmi’s case. The Division Bench has held in Mahalaxmi’s case that an enquiry which precedes the determination of the benefit in terms of money may be incidental depending on the facts and circumstances of each case. Both the Division Benches have noticed that the jurisdiction of the Labour Court