LPA/513/2008 1/8 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD LETTERS PATENT APPEAL No. 513 of 2008 In CIVIL APPLICATION No. 3007 of 2008 In SPECIAL CIVIL APPLICATION No. 27048 of 2006 With CIVIL APPLICATION No. 5403 of 2008 In LETTERS PATENT APPEAL No. 513 of 2008 For Approval and Signature: HONOURABLE MR. JUSTICE A. L. DAVE HON'BLE SMT. JUSTICE ABHILASHA KUMARI =============================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? =============================================== MITCO MANAGEMENT SERVICES PVT LTD. Versus KETANKUMAR MUKUNDRAI PATEL. =============================================== Appearance : MR DIPAK R DAVE for the Appellant. MR MAYUR S BAROT for the Respondent. =============================================== CORAM : HONOURABLE MR. JUSTICE A. L. DAVE and LPA/513/2008 2/8 JUDGMENT HON'BLE SMT. JUSTICE ABHILASHA KUMARI Date : 31/07/2008 ORAL JUDGMENT:- (Per : A. L. DAVE, J.) 1. Heard learned Advocate, Mr. Dipak Dave, for the appellant and learned Advocate, Mr. Mayur Barot, for the respondent. 2. In view of the fact that a very narrow question is involved in the appeal, by consent of parties, the appeal is taken up today for final hearing. 3. Learned Advocate, Mr. Dipak Dave, for the appellant has submitted that the learned Single Judge, by the impugned order has directed the appellant to pay to the respondent last wages drawn by the respondent from the date of the award till the main matter, i.e. Special Civil Application No.27048 of 2006, is finally decided by the Court. According to Mr. Dave, this order is not in consonance with the provisions contained in Section 17B of the Industrial Disputes Act, 1947, which provides for grant of such benefit only during the period of pendency of proceedings before the High Court or the Supreme Court in given set of circumstances and, therefore, the order may be set aside to that extent. He has relied on the following judgments in support of his case that the workman would be entitled to the benefits of Section 17B only from the date of making such application and not from the date of either the award or from the date of filing of the litigation by the employer before the High Court or the Supreme Court :- LPA/513/2008 3/8 JUDGMENT (1) Uttaranchal Forest Development Corporation & Another v. K. B. Singh & Others, (2005) 11 SCC 449. (2) Ganga Crops Safe Pvt. Ltd. v. Becharbhai Maganbhai Patel (Letters Patent Appeal No.1372 of 2006, decided on 11.03.2008). He also contended that the unit is closed and, therefore, the workman would not be entitled to the benefits of Section 17B of the Industrial Disputes Act, 1947. 4. Learned Advocate, Mr. Mayur Barot, has opposed this appeal. According to him, the petition is preferred after eight months from the date of the award by the Labour Court and, therefore, the order by the learned Single Judge. Mr. Barot has relied on decision in the case of Narendra Kumar and Others v. Management, Taj Services Ltd. and Another, as reported in 2001 (90) FLR 356 and submitted that the benefit of Section 17-B would accrue during the period of pendency of proceedings in the High Court or the Supreme Court until the employer files an affidavit that the employee is employed somewhere else. 5. To appreciate the arguments canvassed by learned advocates for parties, it would be appropriate to go to the provisions contained in Section 17B, which runs as under :- “17B. Payment of full wages to workman pending proceedings in 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 LPA/513/2008 4/8 JUDGMENT employer shall be liable to pay such workman, during the period of pendency of such proceedings 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 been 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 been employed and had been receiving adequate remuneration during any such 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.” 6. It is, thus, clear that where a Labour Court, Tribunal or National Tribunal directs reinstatement of any workman and the employer prefers any proceedings either before a High Court or the Supreme Court, the employer is under an obligation to pay to such workman full wages last drawn by the workman during the pendency of such proceedings in the High Court or the Supreme Court, subject to a rider that the employee was not gainfully employed during this period. It is also clear that the obligation cast on the employer is to pay full wages last drawn by the workman during the period of pendency of proceedings before the High Court or the Supreme Court, initiated by the employer. The period of pendency of proceedings would mean the period between the date of institution and date of final disposal of such proceedings either before the High court or the Supreme Court. It cannot include any time period either prior to such institution or subsequent to the disposal of the proceedings. LPA/513/2008 5/8 JUDGMENT 7. The contention that the benefit of Section 17B would be available to the workman only when he makes an application or files an affidavit is not possible to be accepted for the reason that the language of the Section itself is very clear that such right accrues in favour of the workman, who is ordered to be reinstated by a Labour Court or a Tribunal and that order of Labour Court or Tribunal is challenged by the employer either before a High Court of before the Supreme Court. The decisions which are relied upon by learned Advocate, Mr. Dave, are considered by us. In the case of Uttaranchal Forest Development Corporation (supra), the Supreme Court directed that the workmen would be entitled to the benefit of Section 17B of the Industrial Disputes Act from the date of filing affidavits. The facts are not known and we do not find any absolute proposition of law being set out that the workman would be entitled to the benefit of Section 17B of the Industrial Disputes Act only from the date of filing of affidavit or making an application. Similarly, in the case of Ganga Crops Safe Pvt. Ltd. (supra), we find that, in that case, assertion that the workman was not gainfully employed was made by the workman in the affidavit made by him on a particular date and, therefore, the Court held that the employer's liability to pay wages last drawn by the workman would arise from that date and not before. We are unaware about the other facts of the case, but there also the directions were given in the light of facts of that case and no absolute proposition of law is laid down by the Division Bench on the lines canvassed by learned Advocate, Mr. Dave. 7.1 Contrary to this, if we see that language of Section 17B, as discussed earlier by us, it is clear that what is required is that the workman must not be gainfully employed in any establishment during such period and an affidavit by such workman is filed to that effect in the LPA/513/2008 6/8 JUDGMENT Court. Such period would mean the period of pendency of litigation before the High Court or the Supreme Court, initiated by the employer to challenge the order of reinstatement passed by the Labour Court, Tribunal or National Tribunal, as the case may be. The entitlement, therefore, is for the said period provided the workman files an affidavit indicating that he was not gainfully employed during the period. The only exception that seems to have been carved out by the law makers finds its place in the proviso to the said section when it is said that, if it is proved to the satisfaction of the High Court or the Supreme Court that such workman had been employed and had been receiving adequate remuneration during any such period or part thereof, the Court shall order that no such wages shall be payable under the said section. Therefore, it is for the employer to satisfy the High Court or the Supreme Court that the workman was employed during the period and was receiving adequate remuneration. Otherwise, the workman, on the basis of an affidavit, would be entitled to the benefit of Section 17B, if he asserts that he was not gainfully employed during the period of pendency of the litigation before the High Court or the Supreme Court. 7.2 In the instant case, we have already indicated that, in the affidavit, the workman has stated that he was not gainfully employed from the date of termination till making of the application, being Civil Application No.3007 of 2008, for grant of 17B benefit. The workman, therefore, has filed an affidavit to show that he was not gainfully employed. His right to the benefit of 17B, therefore, would accrue from the date of institution of the proceedings before the High Court by the employer. The employer has not placed anything on our record asserting that the workman was gainfully employed during this period. 8. So far as the contention raised by Mr. Dave that the factory is LPA/513/2008 7/8 JUDGMENT closed and, therefore, the workman would not be entitled to the benefit of Section 17B is concerned, we may refer to a decision in the case of Iron Rolling Mills Pvt. Ltd. v. Vinodkumar R. Singh (Letters Patent Appeal No.486 of 2008), where this Court has taken a view that closure of the factory is not a relevant consideration for grant of benefit of Section 17B and, therefore, the contention cannot be accepted. 9. Under these circumstances, we are of the view that the direction to pay full wages last drawn by the workman from the date of the impugned award, i.e. 14.02.2006, is not in accordance with the provisions contained in Section 17B. The obligation under Section 17B of the Industrial Disputes Act cast on the appellant-employer would start from the date of filing of the petition, being Special Civil Application No.27048 of 2006, by the appellant and not from the date of the application made by the workman for the reason that, in the affidavit in support of the application, he has stated that he was not gainfully employed from the date of termination and the aspect of not being gainfully employed or the liability to pay full wages last drawn are not disputed by the appellant. The appeal is, therefore, partly allowed. The order of the learned Single Judge so far as it relates to grant of benefit of Section 17B in the form of full wages last drawn is confirmed. However, the direction to pay such wages from the date of the award is set aside and is replaced by a direction to pay the full wages last drawn by the workman from the date of institution of the petition being Special Civil Application No.27048 of 2006. There shall be no order as to costs. 7. In view of the fact that the main appeal is disposed of, Civil Application No.5403 of 2008 would not survive. It shall stand disposed of accordingly. Rule is discharged. Ad-interim stay is vacated. There shall be no order as to costs. LPA/513/2008 8/8 JUDGMENT [ A. L. DAVE, J. ] [ SMT. ABHILASHA KUMARI, J. ] gt