LPA/486/2008 1/16 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD LETTERS PATENT APPEAL No. 486 of 2008 In CIVIL APPLICATION No. 14435 of 2006 In SPECIAL CIVIL APPLICATION No. 7850 of 2001 With CIVIL APPLICATION No. 5068 of 2008 In LETTERS PATENT APPEAL No. 486 of 2008 For Approval and Signature: HON'BLE MR.JUSTICE A.L.DAVE HON'BLE SMT.JUSTICE ABHILASHA KUMARI ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? Yes 2 To be referred to the Reporter or not ? Yes 3 Whether their Lordships wish to see the fair copy of the judgment ? No 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 ? No 5 Whether it is to be circulated to the civil judge ? No ========================================================= IRON ROLLING MILLS PVT. LTD - Appellant Versus VINODKUMAR R SINGH - Respondent ========================================================= Appearance : MR DIPAK R DAVE for Appellant MR DG SHUKLA for Respondent ========================================================= CORAM : HONOURABLE MR.JUSTICE A.L.DAVE and HON'BLE SMT. JUSTICE ABHILASHA KUMARI Date : 17/07/2008 ORAL JUDGMENT LPA/486/2008 2/16 JUDGMENT (Per : HONOURABLE MR.JUSTICE A.L.DAVE) 1. This Letters Patent Appeal arises out of an order passed in Civil Application No.14435 of 2006 in Special Civil Application No.7850 of 2001 on 26th March, 2008. 2. Brief Facts: 2.1 The opponent-workman raised an industrial dispute and by order dated 18th May, 2001, in Reference (LCA) No.1880 of 1991, the Labour Court directed reinstatement in service without continuity of service and without back-wages. The said order came to be challenged by the present appellant by preferring Special Civil Application No.7850 of 2001. In the said Special Civil Application, interim relief was granted staying the order of reinstatement and the benefit of Section 17B of the Industrial Disputes Act, 1947 (“the Act” for short) came to be extended to the workman pursuant to a Civil Application preferred by the workman. 2.2 Subsequently, Civil Application No.14435 of 2006 was preferred by the appellant-employer praying LPA/486/2008 3/16 JUDGMENT for discontinuance of the benefit of Section 17B to the opponent-workman on the ground that the Unit is closed as it is not economically viable to run the Unit. 2.3 By the impugned order, the learned Judge rejected the application and hence this Appeal. 3. By order dated 28th April, 2008, the Appeal came to be admitted and ad-interim relief in terms of paragraph-5(B) was granted while issuing Rule in Civil Application No.5068 of 2008. 3.1 When the matter came up for hearing, since the points involved and required to be canvassed and considered for deciding the Civil Application and Appeal are the same, at the request of learned advocates for the parties, the Appeal was taken up for final hearing along with Civil Application. 4. We have heard learned advocate Mr.D.R.Dave for the appellant and learned advocate Mr.D.G.Shukla for the respondent. LPA/486/2008 4/16 JUDGMENT 4.1 Learned advocate Mr.D.R.Dave submitted that the benefit of Section 17B of the Act would be available to the workman only if the Unit is working. This, he canvasses on the basis of the provision contained in Section 17B and the definition of the terms `employer' and `workman' under the said Act. He has placed reliance on the decision in case of Hariprasad Shivshankar Shukla and another v. A.D.Divelkar and others reported in AIR 1957 SC 121. He also placed reliance on a decision of the Division Bench of this Court in Civil Application No.5486 of 2003 in Letters Patent Appeal No.933 of 1999, dated 19th August, 2003, (Akbarkhan M.Pathan v. General Manager) where benefits of Section 17B were denied to a workman in view of the fact that the Undertaking, having been declared as a sick Unit under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985, (“SICA” for short) was closed down by an order made under Section 25-O(1) of the Act, which decision was followed subsequently by learned Single Judge in Civil Application No.13284 of 2006 in Civil Application No.2145 of 2002 in Special LPA/486/2008 5/16 JUDGMENT Civil Application No.12744 of 2001 (Sarabhai Machineries Ltd. v. Ramdev Rambharose Yadav) by order dated 13th March, 2007. Mr.Dave submitted that as held by the Apex Court in case of Hariprasad Shivshankar Shukla and another v. A.D.Divelkar and others (supra), the term `industry' has to be read as an industry which is running and not one which is closed. He has drawn our attention to paragraphs 12 and 13 of the said judgment. Mr.Dave therefore submitted that the learned Judge has erred in rejecting the prayer of discontinuance of benefits under Section 17B to the workman in view of the fact that the Unit is closed because of non-viability. 4.2 On the other hand, learned advocate Mr.Shukla has opposed this Appeal. He submitted that Section 17B of the Act has to be read as it stands. It cannot be interpreted or read by introducing different meanings to the words and the language employed therein. Mr.Shukla submitted that the object behind introduction of Section 17B in the Act was to provide support to a workman who is not gainfully employed during pendency of the litigation which the LPA/486/2008 6/16 JUDGMENT employer used to prolong by approaching the High Court and Supreme Court. Mr.Shukla placed reliance on the decision in case of Dena Bank v. Kiritkumar T.Patel reported in (1999)2 SCC 106 and Confederation of Ex-Servicemen Associations and Others v. Union of India and Others reported in (2006)8 SCC 399. Mr.Shukla submitted that as long as the proceedings continue, the obligation of the employer continues under Section 17B of the Act and, therefore, the Appeal may be dismissed. 5. We have given the matter our thoughtful consideration. In order that the contentions raised by both the sides may be appropriately dealt with and applied to the facts of the case, it would be appropriate to mention certain important dates of events. Sr No Date Event 1 18.5.2001 Labour Court ordered reinstatement 2 14.9.2001 The award was stayed by order in the main petition 3 28.10.2002 Order passed in Civil Application No.7220 of 2002 granting benefit of Section 17B to the workman 4 18.11.2005 The Unit was formally closed by informing the authorities under the Act LPA/486/2008 7/16 JUDGMENT 6. The whole controversy spins around the question whether the obligation of the employer to pay last drawn wages to the workman, as provided under Section 17B of the Act, comes to an end if the Unit is closed. To understand this, the provision contained in Section 17B of the Act has to be given a close scrutiny. Section 17B 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 employer shall be liable to pay such workman, 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.” 6.1 What emerges out of reading the said Section is that where a Labour Court, Tribunal or National LPA/486/2008 8/16 JUDGMENT Tribunal, by its award directs reinstatement of any workman and the employer prefers any proceeding against such award in a High Court or the Supreme Court, the employer is 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 such workman. Therefore, it has to be examined whether there is an order of reinstatement by the Labour Court, Tribunal or National Tribunal, whether such an award is challenged by the employer before the High Court or the Supreme Court, and whether the workman is not gainfully employed, and if the answer to the above questions is in the affirmative, the employer is under an obligation to pay to the workman, full wages last drawn by him inclusive of maintenance allowance admissible to him. Section 17B of the Act does not contemplate any eventuality as canvassed by learned advocate for the appellant, namely the closure of Unit, and if the argument of learned advocate for the appellant is to be accepted, a proviso will have to be added and read in Section 17B which would relieve the employer of his obligation of paying to the workman the last LPA/486/2008 9/16 JUDGMENT wages drawn by him. 6.2 A reading of the Section on the contrary indicates that full wages last drawn by a workman are required to be paid by an employer during the period of pendency of proceedings in the High Court or the Supreme Court. The liability to pay under this provision would subsist till the proceedings before the High Court or the Supreme Court remain pending. Thus, for accepting the contention of the appellant, this Court would not only be required to read something which is not provided in the Section, but also to ignore something which is provided in the Section, which cannot be done. 7. Heavy reliance was placed by learned advocate Mr.Dave for the appellant on the decision in case of Hariprasad Shivshankar Shukla and another v. A.D.Divelkar and others (supra), particularly, paragraphs 12 and 13, wherein, Their Lordships referred to the observations made in case of Pipraich Sugar Mills Ltd. v. Pipraich Sugar Mills Mazdoor Union reported in AIR 1957 SC 95, which read thus: LPA/486/2008 10/16 JUDGMENT “It cannot be doubted that the entire scheme of the Act assumes that there is in existence an industry, and then proceeds on to provide for various steps for being taken, when a dispute arises in that industry. Thus the provision of the Act relating to lock out, strike, lay off, retrenchment, conciliation and adjudication proceedings, the period during which the awards are to be in force, have meaning only if they refer to an industry which is running and not one which is closed.” 7.1 It was therefore canvassed that since the present Unit is closed, provisions of the Act, including Section 17B would not remain operative. In this regard, it may be noted that the said judgment was rendered on 27th November, 1956, when Section 17B was not part of the Industrial Disputes Act, 1947. The said provision was introduced in the Act by Act 46 of 1982 and became effective from 21st August, 1984. It, therefore, cannot be said that the view expressed in the said judgment was expressed after considering the provision, its content, and impact. In our view, therefore, the said judgment cannot benefit the appellant in any way. 7.2 Similarly, reliance was placed on an order passed in Civil Application No.5486 of 2003 in Letters Patent Appeal No.933 of 1999 (Akbarkhan LPA/486/2008 11/16 JUDGMENT M.Pathan v. General Manager). In that case, the Unit was declared as a Sick Industrial Company under the provisions of SICA and it was closed down by an order made under Section 25-O(1) of the Act. This was a development at a stage prior to the workman seeking benefit of Section 17B. Now, in the instant case before us, the Unit is not declared to be a Sick Unit under SICA. The order of reinstatement was passed on 18th May, 2001, whereas the Unit is closed on 18th November, 2005, i.e. a subsequent event, not a situation which existed in case of Akbarkhan M.Pathan relied upon by learned advocate for the appellant. The right of the workman accrued when the order was passed on 28th October, 2002, granting benefit of Section 17B. Such subsequent development in form of closure of business and consequential exemption to the employer from obligation to pay full wages last drawn is not contemplated under Section 17B. In our view, therefore, the said order in Civil Application No.5486 of 2003 in case of Akbarkhan M.Pathan v. General Manager will have no application to the present case. LPA/486/2008 12/16 JUDGMENT 7.3 Another order which is relied upon by learned advocate for the appellant is in Civil Application No.13284 of 2006 in Civil Application No.2145 of 2002 dated 13th March, 2007, where again, benefits of Section 17B were denied relying on the said order in case of Akbarkhan M.Pathan v. General Manager. That order of the learned Single Judge will not have a binding effect in view of the foregoing discussion that the view taken in case of Akbarkhan M.Pathan v. General Manager would not be applicable to the facts of the present case. 8. Learned advocate Mr.Shukla relied on the decision in case of Dena Bank v. Kiritkumar T.Patel (supra), wherein in paragraph 7, Their Lordships have quoted the objects and reasons for enacting the said provision, which run as under: “7. ...When Labour Courts pass award of reinstatement, these are often contested by an employer in the Supreme Court or High Court. It was felt that the delay in the implementation of the award causes hardship to the workman concerned. It was, therefore, proposed to provide the payment of wages last drawn by the workman concerned, under certain conditions, from the date of the award till the case is finally decided in the Supreme Court or High Courts. (emphasis supplied) LPA/486/2008 13/16 JUDGMENT 8.1 It is thus clear that the intention of the law makers was to provide a support for subsistence to the workman where an award of reinstatement is challenged by the employer before the High Court or Supreme Court and the workman is not in any gainful employment. The situation which is projected here, namely closure of the Unit because of non-viability, was not the factor which weighed with the law makers while introducing Section 17B on the statute book. 8.2 During the course of arguments, a reference was made to decision in case of Confederation of Ex- Servicemen Associations and Others v. Union of India and Others (supra) and it was canvassed that all that a workman is expecting is a right to life envisaged under Article 21 of the Constitution of India. In this context, in paragraph-61, it is observed thus: “61. It cannot be gainsaid that the right to life guaranteed under Article 21 of the Constitution embraces within its sweep not only physical existence but the quality of life. If any statutory provision runs counter to such a right, it must be held unconstitutional and ultra vires Part III of the Constitution. Before LPA/486/2008 14/16 JUDGMENT more than hundred years, in Munn. v. Illinois [94 US 113 : 24 L Ed 77 (1877)], Field, J. explained the scope of the words “life” and “liberty” in the 5th and 14th amendments to the US Constitution and proclaimed: (US P.142) “By the term 'life' , as here used, something more is meant than mere animal existence. The inhibition against its deprivation extends to all these limbs and faculties by which life is enjoyed. The provision equally prohibits the mutilation of the body by the amputation of an arm or leg, or the putting out of an eye, or the destruction of any other organ of the body through which the soul communicates with the outer world... By the term 'liberty', as used in the provision, something more is meant than mere freedom from physical restraint or the bounds of a prison.” 8.3 It also appears that the said observations have been quoted with approval by the Apex Court in several other judgments. An order sought by the appellant, if granted, would virtually amount to denial of right to life, as it would adversely affect the quality of life of the workman. 8.4 Similar view has been taken by this Court in case of Jayantilal Shanubhai Tailor v. Ralchem Ltd., Ankleshwar reported in 2005(2) GLR 1218, where it was LPA/486/2008 15/16 JUDGMENT held that a workman cannot be denied relief under Section 17B on the ground that the manufacturing activities of the employer-Company have come to a halt. In the said decision, order in case of Akbarkhan M.Pathan v. General Manager (supra) was also considered and distinguished. 9. It is thus clear from the foregoing discussion that section 17B of the Act does not contemplate a situation of closure of the employer's Unit. What is contemplated is retrenchment, order of reinstatement by an award of the Labour Court or Industrial Tribunal or National Tribunal, challenge to the same by the employer before the High Court or Supreme Court, pendency of the proceedings and lack of gainful employment of the workman. The argument of the learned advocate for the appellant, therefore, cannot be accepted. In our view, no error can be said to have been committed while passing the impugned order refusing exemption from the order granting payment of benefits under Section 17B. The Appeal must fail, stands dismissed. No costs. LPA/486/2008 16/16 JUDGMENT 10. Ad-interim relief, granted earlier, would stand vacated in the light of dismissal of the Appeal. Civil Application stands disposed of. Rule is discharged. No costs. 11. A request is made to suspend the operation of this order and extend the ad-interim relief enjoyed by the appellant. In the light of what is observed by us above, granting such indulgence would be deciding against the right to life of the workman. Hence, rejected. (A.L.Dave, J.) (Smt.Abhilasha Kumari, J.) (sunil)