-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION LETTERS PATENT APPEAL NOS. 290, 291 AND 292 OF 2007 IN CIVIL APPLICATION NO. 2105, 2106 AND 2107 OF 2006 IN WRIT PETITION NO. 8699 OF 2005. M/s. U.P. State Bridge Corporation Limited ) Unit Kala Nagar, Under Flyover, Bandra (East) ) Mumbai-400 051 )..Appellant (Orig.Petitioner) Versus Maharashtra General Kamgar Union, ) 252 Janta Colony, RN Narkar Market, ) Ghatkopar (E), Mumbai-400 077 )..Respondents (Orig. Respondents) Mr. J.P. Cama, Senior Advocate, instructed by Ms. Shilpa Kapil for the appellants. Mr. N.M. Ganguli for the respondents. CORAM: SWATANTER KUMAR, C.J. & J.P. DEVADHAR, J. Judgment reserved on : December 10, 2007 Judgment delivered on: January 17, 2008 JUDGMENT (Per Swatanter Kumar, C.J.): The legislature with an intention to provide protection to a workman, who by award of the competent forum has been directed to be reinstated, where the employer prefers any proceedings against -2- such an award in the Higher Courts, introduced Section 17-B of the Industrial Disputes Act, 1947, hereinafter referred to as “the Act”. Of course, this statutory benefit of receiving full wages last drawn by the workman is subject to filing of an affidavit as commanded by the provision. This protection could be denied to the workman by the order of the Court where it is proved to the satisfaction of the Court that the workman had been employed or has been receiving adequate remuneration during the relevant period. This grant or refusal of statutory benefit would primarily depend upon the extent of onus on either party to a case. Admittedly, the provisions of Section 17-B of the Act or the Rules framed under the Act do not contemplate or provide any particular format in which an affidavit as required under Section 17- B of the Act should be filed by the workman. The question involved in this case is “Does absence of such format of affidavit absolve the workman of any primary onus in relation to the requirements of the Section and shifts the entire burden upon the management restricting their right only to the proviso to Section 17-B of the Act?” Thus, a limited but interesting question of law in relation to ambit and scope of burden of proof and its ramification on the right and obligation of the parties requires consideration of the Court in the present case. 2. The members of the respondent Union were working with the -3- appellant, a Corporation fully owned and controlled by the Government of Uttar Pradesh. According to the workmen, their services were illegally terminated by the management along with other workers on 13th February, 1994, against which the workmen raised an industrial dispute demanding reinstatement with continuity of service and full back wages. In furtherance to the notice of demand, the Appropriate Government referred the dispute to the Labour Court for adjudication being Reference (IDA) No. 1 of 1995. The Labour Court, Thane, made an award on 21st September, 2005, directing reinstatement of all the 98 workmen in service of the appellant with continuity of service and full back wages. The appellant filed a writ petition challenging the correctness of the award dated 21st September, 2005 and vide an order dated 29th March, 2006,the operation of the award was stayed by the Court. 3. Three civil applications were filed by the respondent union in the said writ petition wherein they averred that the members of the respondent union were not gainfully employed in any establishment from the date of the award and, therefore, the workmen were entitled to get wages in terms of Section 17-B of the Act. Affidavits were filed by the workmen and it will be useful to reproduce the relevant paragraphs -4- of the said affidavit which read as under: “5. I say that as per the statement made on behalf of the Petitioner at the hearing of the Petition for admission, my last drawn wages at the time of termination of service were Rs. 103/- per day. The Petitioner, is a commercial establishment within the meaning of term under Section 2 (4) of the Bombay Shops and Establishments Act under which the weekly off is a paid weekly off. Consequently my monthly wages at the last drawn rate would be Rs. 3090/- per month. 6. As required under 17B of the Industrial Disputes Act, I hereby declare and say that I am not gainfully employed in any establishment since the date of making the Award. I hasten to add that I was not gainfully employed in any establishment since the wrongful termination of service by the Respondent original petitioner. 7. I am entitled to the wages at Rs. 3090/- per month from 23.11.2005 being the date of filing of the Petition (though the award was made as early as 13.5.2005) till the Petition is finally disposed of. 8. I pray that the Petitioner may be directed to pay to me wages at Rs. 3090/- per month with effect from 23.11.2005 till the hearing and final disposal of the writ petition.” 4. The application was opposed by the management by filing an affidavit wherein it has been stated that the workmen were seen regularly moving on two wheelers in New Bombay and some of them were employed in the establishments in New Bombay. The management, therefore, prayed that the application of the workmen under Section 17-B of the Act be rejected. Vide order dated 14th -5- September, 2007, the learned single Judge accepted the prayer of the workmen and directed that they be paid wages under Section 17-B of the Act and the applications were allowed in terms of prayer clause (a). The relevant part of the order reads as under: “3. The submission of the learned counsel for the respondent cannot be accepted. Over a period of time, case law has developed on the question of Section 17B of the Industrial Disputes Act, where the workman is expected to disclose whether he is gainfully employed during the period after the award is stayed by the High Court or the Supreme Court. Each of the workman has stated that he is not gainfully employed. The application cannot be dismissed because the workman does not disclose in his affidavit as to how he subsists. 4. Civil application allowed in terms of prayer clause (a). 5. The arrears shall be paid within a period of six weeks from today. 6. Civil application disposed of.” 5. We may also notice that earlier, vide order dated 29th March, 2006, the learned single Judge of this Court had granted stay of the impugned award subject to furnishing of a total security of Rs. 50 lakhs. 6. The argument on behalf of the management is that the affidavit contemplated under Section 17-B of the Act has to be an affidavit of correct and complete facts. It cannot be a mere formality by -6- making a vague averment that the workman was not gainfully employed. In fact, the provisions of Section 17-B raise an implied presumption that workman was gainfully employed but for which he could not have survived for the intervening long period and obliges the workman to state complete and full facts in relation to his employment/non-employment and in the event of absence of specific averment to explain as to how would the workman survive for the long intervening period. 7. To buttress the submission in relation to these principles, reliance has been placed upon the case of Haryana Urban Development Authority vs. Devi Dayal, [2002 (1) CLR 1038]. In this case, while considering the question of grant of back wages where the award was in favour of the workman granting him reinstatement with full back wages, the Supreme Court held as under:- “We are of the view that having regard to the facts of the case, the award of full back wages covering a period of nearly five years is not warranted. Firstly, it is to be noted that the respondent was in service for a short period with frequent spells of absence. The second and more important aspect is that there is a reasonable possibility of the respondent being gainfully employed somewhere else. The respondent was working as a helper which, apparently, involves performance of work of manual labourer. In all probability, he would have been working somewhere and earning daily wages, if not regularly, at least for some days in a month. The respondent did -7- neither asserts in the claim statement nor did he give any evidence that he could not earn anything throughout by way of daily wages or otherwise during this long interregnum. Considering all these aspects, it would not be a sound exercise of discretion to saddle the appellant with the liability of full back wages. We are inclined to think that the award of back wages to the extent of 50% would be proper and justified, on the peculiar facts of this case. “ 8. Reliance is also placed on the case of Shridhar Sakharam Omle vs. Yeshwantrao Chavan Academy of Development Administration, Pune, [ 2006 III CLR 358] where a Bench of this Court observed that ordinarily the workman would have been gainfully employed elsewhere during the relevant period particularly when there was no specific averment in the affidavit by the petitioner that he was not gainfully employed, though the writ petition was filed one and half years from the date of dismissal. Some Courts have also taken the view that mere absence on the part of the employer to establish gainful employment does not by itself entitle the workman to secure back wages. In the case of Navin J. Surti vs. Modi Rubber Ltd. and another, [ 2004 II CLR 46] where the Labour Court while directing reinstatement allowed back wages to the extent of 50 per cent only. This Court held that merely because employer had failed to prove gainful employment it was not necessary that full back wages should automatically follow. There was no averment that the workman had made any effort to secure -8- alternative job or employment. The Court held as under :- “Considering the above decisions therefore it cannot be said that mere absence on the part of the employer to establish the gainful employment of the employee during the period he was out of the employment on account of termination of the service would entitle him to secure as a matter of course the order for the back wages in its entirety pursuant to order for his reinstatement in the service. Apart from the obligation on the part of the employer to establish gainful employment of the employee during such period, it would also be necessary for the employee to disclose the efforts made by him to get some other job or employment during such period as well as about the source of income during the said period and if so to what extent. Mere silence on the part of the employee in that regard cannot in any manner enure to the benefit of the employee to justify the claim for back wages in entirety. It cannot be forgotten that the order for payment of back wages has to be from the point of view of compensating the employee for the loss suffered during the time he was out of the employment and not a reward for having succeeded in establishing the action of termination of the service by the employer to be illegal.” 9. As already noticed, it is contended with some emphasis on behalf of the petitioner that the provisions of section 17B of the Act only gives a right and does not guarantee order for payment by the court of competent jurisdiction unless the provisions of section 17B are satisfied substantially. Entitlement to receive wages would not by itself be an executable right under this provision. The court has to record satisfaction that an affidavit in accordance with the provisions of section 17B has been filed wherein besides disclosing that the workman was -9- not employed during the relevant period, the affidavit should also state as to the efforts put in by the workman to gain employment and how the workman was able to subsist. According to the petitioner, upon declaration of such true and complete facts, the court had to satisfy itself and pass an appropriate order in consonance with these provisions. Despite filing of such affidavit, the Management could prove to the satisfaction of the court that the workman was gainfully employed. Thus, it is argued that the order of the court would not be an automatic consequence of filing of an affidavit under section 17B by the workman and particularly when such affidavit is incomplete and does not disclose facts ought to be disclosed which are within the personal knowledge of the workman. Heavy reliance is placed by the petitioner upon the following dictum of the Supreme Court in the case of U.P. State Brassware Corpn.Ltd. and another v. Udai Narain Pandey, 2006 I CLR 39: “22. No precise formula can be laid down as to under what circumstances payment of entire back wages should be allowed. Indisputably, it depends upon the facts and circumstances of each case. It would, however, not be correct to contend that it is automatic. It should not be granted mechanically only because on technical grounds or otherwise an order of termination is found to be in contravention of the provisions of Section 6-N of the U.P. Industrial Disputes Act.” -10- 10. The object of filing the affidavit is not a mere technical compliance but is for substantive disclosure of true and correct facts which would unequivocally show that the workman was not gainfully employed. The term “gainfully employed” would include self- employment from where income could be generated and even if the same was less than wages payable to the workman, the Management would be entitled to adjustment of such sums. This argument is advanced while placing reliance of the judgment of the Supreme Court in North East Karnataka Road Transport Corporation v. M. Nagangouda, 2007 I CLR 939. The Supreme Court in that case took the view that the Industrial Tribunal was not justified in granting full back wages as the workman was self-employed in agricultural activity to maintain himself. The court held as under: “17. On the said question, we are unable to accept the reasoning of the Labour Court that the income received by the respondent from agricultural pursuits could not be equated with income from gainful employment in any establishment. In our view, “gainful employment” would also include self- employment wherefrom income is generated. Income either from employment in an establishment or from self-employment merely differentiates the sources from which income is generated, the end use being the same. Since the respondent was earning some amount from his agricultural pursuits to maintain himself, the -11- Labour Court was not justified in holding that merely because the respondent was receiving agricultural income, he could not be treated to be engaged in “gainful employment”.” 12. Section 17B requires that during the pendency of the proceedings before the High Court or the Supreme Court, as the case may be, a liability is created upon the employer to pay the workman the full wages drawn by him inclusive of other allowances, but only if the workman had not been employed in any other establishment during such period and an affidavit by such workman had been filed to that effect in such court. Thus, first is a matter of fact known to the workman which is within his personal knowledge while the letter is the requirement of law. The workman employed in any establishment would not be entitled to the benefit of interim protection during the proceeding before the High Court or the Supreme Court, as the case may be. Thus, the onus is placed upon the workman to comply with the statutory provisions of which the court must be satisfied before it directs the employer to make the payment of the required wages. There is definite onus upon the workman which is clear from the language of the legislature. But the onus is a primary onus which stands discharged the moment the workman complies with the -12- requirement of the provisions, unless the Management or employer claims and discharges onus by definite evidence as required by the proviso to section 17B. Even, the normal rule is equally applicable to the proceedings before the Industrial or the Labour Court, namely the extent of burden of proof and requirement of proof is to be construed liberally. Undoubtedly, the provisions of section 17B imply an obligation on the court and give a statutory protection to the workman. The direction of the court would be issued only where an affidavit in terms of section 17B has been filed. That apparently is the intention of the Legislature. A statute is to be construed “to the intent of them that make it”. A Full Bench of Delhi High Court in the case of Delhi Transport Corporation through its Regional Manager (Rural) v. Shri Jagdish Chander, 2005 II LLJ 390 while examining the provision of section 17B of the Act, held as under:- “9. In the light of the above enunciated principles we would revert back to the language of section 17(b) of the Act. The plain reading of this provision shows the legislative intent to give certain protection to the workman during the pendency of the proceedings before the High Court or the Supreme Court in relation to payment of wages. The provisions further show the liability created by statute upon an employer for payment of such wages. This entitlement is subject to the proviso to the said -13- section. The essential ingredients of this provision appear to be:- (1) By its award direct reinstatement of any workman. (2) The employer prefers any proceedings against such award in the High Court or Supreme Court. (3) The employer shall be liable to pay such workman during the pendency of such proceedings full wages drawn by the workman. The liability to pay arises if the workman had not been employed in any establishment during such period and an affidavit to that effect is filed in Court and (4) Even if the above conditions exist but it is shown to the satisfaction of the Court that workman had been employed and receiving adequate remuneration during any such period or part thereof then no backwages would be payable for that period. 10. The emphasis of legislature is on the expression `reinstatement’ rather than on an `award’. Where the workman is reinstated and the Management prefers any proceedings before the High Court or Supreme Court, the object appears to be that the workman if he was not gainfully employed during the relevant period should not starve and should be able to contest the proceedings before the Court meaningfully and without being deprived of the wages which he was entitled to receive under the terms of the award. 11. Obviously the intention of the legislature was to provide definite protection to the workman against the long litigation and -14- exploitation by the affluent Management. As such these welfare provisions are directly relatable to the prescribed benefit to the workman under various provisions of the statute.” 13. Similar view was also expressed by the Supreme Court in the case of Regional Authority, Dena Bank and another v. Ghanshyam, JT 2001 (suppl.1) SC 229. 14. The statement of object and reasons leading to the Amendment Act, 46 of 1982 which introduced section 17B of the Act, persisted that object of Amendment Act was mainly to maintain speedy resolution of industrial dispute by removing procedural delays keeping in mind that delay in implementation of the award causes hardship to the workman concerned, it was proposed that 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 the High Courts. This, obviously, mean that the intention of the legislature was to give interim statutory protection during the pendency of the proceedings before the High Court or the Supreme Court and direction for payment of such last drawn wages could be issued -15- only if there was an award made to the workman and that he had not been employed in any establishment during the relevant period. To satisfy this ingredient, the onus is apparently on the workman. Unless he discharges his onus in accordance with the statutory provisions, no directive for payment to an employee would be issued. 15. In the case of Hira Lal v. Presiding Officer and another, 2003 Vol. II SLR 96, Bench of Punjab High Court held as under: “We are not able to appreciate this contention raised on behalf of the petitioner before us. The basic rule, one who claims must plead and prove is equally applicable to the proceedings before the Labour Court. Primary onus is placed upon the workman that he must plead minimum facts in his statement of claim averring that he was not gainfully employed from the date of his termination anywhere and was entitled to get full back wages which he was drawing at the time of his termination. Once the workman has pleaded such fact and during his evidence and primary evidence is led by him in support thereof the onus certainly shifts to the management to prove to the contrary. The onus placed upon the management is certainly of a higher standard and it must by reasonable and prudent evidence to show that workman was gainfully employed somewhere else or was earning during the period of termination till he is reinstated, if ordered. It may not be very correct to state as a matter -16- of rule that there is no onus upon the workman and grant of full back wages should be an automatic corollary to the grant of relief of reinstatement in each and every case. The scheme of the Act and Legislature intent behind the provisions of Section 17B of the Act clearly shows that the Legislature intended not to provide double advantage to the workman. In other words a workman who is gainfully employed somewhere else cannot claim wages from his employer for the relevant period. Even to obtain the benefit of interim order under Section 17-B of the Act, workman is required to file affidavit specifically stating that workman has not gainfully employed in any establishment. Further more, under Section 11 of the Act Labour Court is vested with the powers as that of a Civil Court under the Code of Civil Procedure and the proceedings before it are judicial proceedings for all intents and purposes. This would make it necessary that general principle applicable to such proceedings must necessarily relates to principle of pleadings and proof. The workman is under obligation to discharge a primary onus in regard to the claim raised by him before a Labour court. In the case of Range Forest Officer v. S.T. Hadimani, 2002(3) Supreme Court Cases, 25, the Hon’ble Apex Court explaining applicability of principle of onus to these proceedings held as under:- “In our opinion the Tribunal was not right in placing the onus on the management without first determining on the basis of cogent evidence that the respondent had worked for more than 240 days in the year preceding his termination. It was the case of the claimant that he had so worked but this claim was denied by the appellant. It was then for the claimant to lead evidence to show that he had in fact worked for 240 days in the year preceding his termination. Filing of an affidavit is only his own statement in his favour and that cannot be regarded as sufficient evidence for any court or tribunal to come to the conclusion that a -17- workman had, in fact, worked for 240 days in a year. No proof of receipt of salary or wages for 240 days or order or record of appointment or