1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE APPELLATE SIDE APPELLATE SIDE LETTERS PATENT APPEAL NO. 357 OF 2002 LETTERS PATENT APPEAL NO. 357 OF 2002 LETTERS PATENT APPEAL NO. 357 OF 2002 THE MAHALAXMI CO-OPERATIVE ) HOUSING SOCIETY LIMITED ) 120, Manmala Tank Road, ) Bombay 400 016. ) .. APPELLANT Vs. 1. DILIP SINGH PAROCHA ) 2. SMT. ANGOORI DILIP SINGH ) PAROCHA ) 3. SMT. KRISHNA SURESH PAROCHA ) All residing at C/o The ) Mahalaxmi Co-op. Hsg.Society) Ltd., 120, Manmala Tank Road) Bombay 400 016. ) 4. SHRI A.B. SHAIKH ) Presiding Officer, ) 7th Labour Court, Bombay ) .. RESPONDENTS Mr. R.V. Paranjape for appellant Mr. P.M. Patel for R-1 to 3 CORAM:-SMT. RANJANA DESAI & SMT. V.K. TAHILRAMANI, JJ. DATED ON WHICH THE JUDGMENT RESERVED: 27/09/06 DATE ON WHICH THE JUDGMENT PRONOUNCED:17/11/06 JUDGMENT:-(Per Smt. Ranjana Desai, J.) . In this letters patent appeal the appellant has 2 challenged judgment and order dated 16th August, 2002, rendered by the learned Single Judge of this court in Writ Petition No. 6486 of 1995. 2. Few facts which give rise to the present letters patent appeal may have to be shortly stated; . The appellant is a co-operative housing society engaged inter alia in the business of Real Estate. The 1st respondent was employed with the appellant as a sweeper since 1961. The 1st respondent filed an application being IDA No. 754 of 1987 in the Labour Court at Bombay under Section 33C(2) of the Industrial Disputes Act,1947 ("the said Act" for short) making monetary claim against the appellant on the ground that the appellant is covered under the Bombay Shops and Establishment Act, 1948 and is, therefore, required to pay the minimum wages payable to him under the Bombay Shops and Establishment Act, 1948. Respondent 1 also claimed other benefits such as weekly off and leave wages, national paid holidays, overtime wages etc. . The appellant filed its written statement and challenged the maintainability of the said 3 application, inter alia on the ground that the appellant being a Co-operative Housing Society is not an industry and is not a commercial establishment within the meaning of Section 2(4) of the Bombay Shops and Establishment Act, 1948 and, therefore, the provisions of the said Act are not applicable to it. 3. The Labour Court recorded evidence of the parties and by its judgment and order dated 13/11/95 dismissed the application. The Labour Court inter alia relied on the judgment of the Supreme Court in Central Inland Water Transport v. The Workman & Anr., (1974) 4 SCC 696. The Labour Court held that the proceedings under Section 33C(2) of the said Act are in the nature of execution proceedings and in such proceedings it cannot arrogate to itself, the function of an Industrial Tribunal which alone is entitled to make adjudication of the main issue as to whether the appellant is an industry or not. That question can be only decided under Section 10 of the said Act and cannot be decided in execution proceedings. 4. Being aggrieved by this judgment and order, the appellant preferred Writ Petition No. 6486 of 1995 4 in this court. By the impugned order the learned Single Judge quashed and set aside the impugned order of the Labour Court. The learned Single Judge held that the Labour Court wrongly held that it had no jurisdiction to entertain and try the application filed by the respondent merely because the appellant has raised an issue that it was not an industry. According to the learned Single Judge, since the question whether a person is a workman or not relates to the jurisdiction of the Labour Court, it must be open to that court to decide the facts on which it gets the jurisdiction or the jurisdiction is ousted. The learned Single Judge remanded the matter to the Labour Court for decision in accordance with law. The said order is impugned in this letters patent appeal. 5. We have heard the learned counsel appearing for the parties. Mr. Paranjape, learned counsel appearing for the appellant contended that the learned Single Judge erred in setting aside the well reasoned order of the Labour Court. He submitted that Section 33C(2) postulates pre-existance of employer - employee relationship between the appellant and the respondent and the only dispute that can be decided by the Labour 5 Court under this section is in a very narrow compass i.e. relating to the computation of quantum of amount of money that may be due. He submitted that when the employer - employee relationship is in dispute the Labour Court while trying the application under Section 33C(2) does not have jurisdiction to determine the said relationship because the said relationship can only be determined on an application under Section 10 of the said Act, that being a substantive issue. 6. Mr. Paranjape further contended that the determination of the question whether there exists a relationship of employer - employee between the parties cannot be termed as "incidental" issue so as to bring it within the scope of execution proceedings under Section 33C(2) Similarly determination of status of an establishment i.e. whether it is an industry or not is also not covered by Section 33C(2). These issues are substantive issues. They are not incidental issues which can be determined in a proceeding under Section 33C(2). 7. Mr. Paranjape contended that in Som Vihar Apartment Owners Housing Maintenance Society Ltd. 6 v. Workmen, (2001 I LLJ 1413, the Supreme Court has held that Co-operative Society is not an Industry within the meaning of Section 2(J) of the Industrial Disputes Act, 1947 and, therefore, the said issue cannot be termed as an incidental issue which required determination. In support of his submissions Mr. Paranjape relied on Central Inland Water Transport Corporation v. The Workman & Anr., AIR 1974 SC 1604 (2) P.K. Singh & Ors. v. Presiding Officer & Ors., AIR 1988 SC 1618 (3) Municipal Corporation of Delhi v. Ganesh Razak, 1995 I CLR 170 (4) Tara & Ors. v. Director Social Welfare & Ors., AIR 1999 SC 1508 (5) State of U.P. & Ors. v. Brijpal Singh, 2005 SCC L & S 1081 (6) RSR Mohta Spinning & Weaving Mills Pvt. Ltd. & Ors. v. Govindrao & Ors., 2001 LAB.I.C 2269 (Bom) (7) Central Group & Ors., v. Motiram Thakre, 2005 II LLJ 492 (Bom). He submitted that the impugned judgment and order deserves to be set aside. 8. Mr. Patel, learned counsel appearing for the respondent on the other hand submitted that no interference is necessary with the impugned judgment and order. He submitted that in an application under Section 33C(2) the Labour Court’s jurisdiction cannot be ousted by raising a mere 7 plea denying the workman’s claim to the money due. The Labour Court has to examine whether it has jurisdiction or not. The defence raised by the employer cannot oust the jurisdiction of the Labour Court. 9. Mr. Patel heavily relied on the Constitution Bench judgment of the Supreme Court in Central Bank of India’s case (supra). He also relied on R.B. Bansilal’s case (supra) where the Supreme Court has held that if the workmen claim lay off compensation but the employer contends that it is not a lay off but closure then the Labour Court has power to decide as to whether it is lay off or closure. Mr. Patel also relied on the judgment of this court in Ramakrishna Ramnath v. State of Maharashtra, 1975 Labour Industrial Cases 1561. He pointed out that in this case the Division Bench of this court has held that Labour Court has jurisdiction under Section 33C(2) to decide the issue as to whether there is relationship of employer-employee between the parties. Mr. Patel contended that reliance placed by the appellant on Tara’s case (supra) is misplaced because that judgment does not indicate what were the facts before the Supreme Court. 8 10. Mr. Patel further contended that reliance placed on the judgment in Ganesh Razak’s case (supra) is also misplaced because in that case the Supreme Court was concerned with the case of daily rated casual workers. They wanted themselves to be treated as permanent workmen. They were claiming salary which was paid to the permanent workmen on the principle of equal pay for equal work. They wanted the Labour Court to adjudicate and first decide that they were doing regular work as done by regular workmen and treat them as regular workmen. This exercise is outside the scope of jurisdiction of Labour Court under Section 33C(2). According to Mr. Patel under Section 33C(2) of the said Act the Labour Court has all the power to go into jurisdictional facts and decide whether it has jurisdiction or not. Mr. Patel submitted that when the court decides jurisdictional issue, it does not enlarge and widen its scope. Mr. Patel contended that, therefore, the learned Single Judge was right in setting aside the Labour Court’s order. 11. We have given our anxious consideration to the submissions advanced by learned counsel appearing for the appellant and the respondents. They have 9 taken us through several judgments. We shall soon advert to them. But before we do that it is necessary to quote Section 33C(2) of the said Act. Section 33C(2) reads thus: 33C(2) Where any workman is entitled to receive from the employer any money or any benefit which is capable of being computed in terms of money and if any question arises as to the amount of money due or as to the amount at which such benefit should be computed, then the question may, subject to any rules that may be made under this Act, be decided by such Labour Court as may be specified in this behalf by the appropriate Government (within a period not exceeding three months)." 12. The scope of section 33C(2) of the said Act fell for consideration before the Constitution Bench of the Supreme Court in Central Bank of India Ltd. v. P.S. Rajagopalan etc., AIR 1964 SC 743. The said judgment still holds the field. All later judgments will have to be read in the light of this judgment. We shall, therefore, refer to it. 10 13. In that case the claim of the respondents was that besides attending to their duties as clerks, they had been operating adding machines and hence they were entitled to special allowance as provided by the Sastry Award. The appellant Central Bank disputed this claim. Three preliminary objections were raised. Firstly it was urged that the respondents could claim only non-monetary benefits under the Award that were capable of computation and so, Section 33C(2) was inapplicable to their claim. Secondly it was argued that without a reference made by the Central Government, the applications were not maintainable. Last preliminary objection was that since applications involved a question of interpretation of Sastry Award, they were outside the purview of Section 33C(2). On the merits also the appellants contested the claim. 14. The Central Government Labour Court overruled the preliminary objections of the appellant and on merits found that the respondents were entitled to claim special allowance. The appellants therefore, approached the Supreme Court. The basic argument of the appellants before the Constitution Bench was 11 that the Labour Court had exceeded its jurisdiction in entertaining the applications because the claim made by the respondents was outside the purview of Section 33C(2). It was urged that,if there is a dispute about the workman’s right to claim the benefit, that has to be adjudicated upon not under subsection 2, but in other appropriate proceedings permissible under the said Act and since the appellant has disputed the respondent’s right to claim the special allowance, the Labour Court had no jurisdiction to deal with their claim. 15. While dealing with this submission the Constitution Bench traced the history of the relevant provisions of the said Act. It was observed that the said Act as it was originally passed, made relevant provisions on the broad basis that industrial disputes should be adjudicated upon between trade unions or representatives of labour on the one hand and the workmen’s employers on the other and that is why Section 10(1) which deals with the reference of disputes to Boards, Courts or Tribunals, has been interpreted by the Supreme Court to mean that the disputes which are referable under Section 10(1) should be disputes which are raised by the trade unions to which the workmen 12 belong or by the representatives of workmen acting in such a representative character. The Constitution Bench observed that the legislature recognised that individual workmen should be given a speedy remedy to enforce their existing individual rights and so, it inserted Section 33A in the said Act in 1950 and added Section 33C in 1956. These provisions, observed the Constitution Bench, illustrate the cases in which 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. The Constitution Bench laid down two important considerations which must be borne in mind while construing Section 33C of the said Act. We may quote the relevant observation of the Constitution Bench. "Therefore, in construing S. 33C we have to bear in mind two relevant considerations. The construction should not be so broad as to bring within the scope of S.33-C case which would fall under S. 10(1). Where industrial disputes arise between employees acting collectively and their employers, they 13 must be adjudicated upon in the manner prescribed by the Act, as for instance, by reference under S.10(1). These disputes cannot be brought within the purview of S.33C. Similarly, having regard to the fact that the policy of the Legislature in enacting S.33C is to provide a speedy remedy to the individual workmen to enforce or execute their existing rights, it would not be reasonable to exclude from the scope of this section cases of existing rights which are sought to be implemented by individual workmen. In other words, though in determining the scope of S. 33C, we must take care not to exclude cases which legitimately fall within its purview, we must also bear in mind that cases which fall under S.10(1) of the Act for instance, cannot be brought within the scope of S.33C." 16. The Constitution Bench rejected the argument that, if a dispute is raised about the workman’s right to receive the benefit in question, that dispute cannot be determined by the Labour Court 14 under Section 33C(2). The Constitution Bench held that on a fair and reasonable construction of subsection (2) it is clear that if a workman’s right to receive the benefit is disputed that may have to be determined by the Labour Court and a contrary view would mean that it would be at the option of the employer to allow the workman to avail himself of the remedy provided by subsection (2), 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. The Constitution Bench further observed that the claim under Section 33C(2) clearly postulates that the determination of the question about computing the benefit in terms of money may, in some cases, have to be preceded by an enquiry into the existence of the right and such an enquiry must be held to be incidental to the main determination which has been assigned to the Labour Court by subsection (2). It was held that Section 33C(2) takes within its purview cases of workmen who claimed that the benefit to which they are entitled should be computed in terms of money, even though the right to the benefit on which their claim is based is disputed by their employers. 15 17. The Constitution Bench clarified that if an employee is dismissed or demoted and it is his case that the dismissal or demotion is wrongful, it would not be open to him to make a claim that the dismissal or demotion is unlawful and, therefore, he continues to be the workman of the employer and is entitled to the benefits due to him under a pre-existing contract. It was further clarified that, it would not be open to an employee, notwithstanding a settlement, to claim the benefit as though the said settlement had come to an end. If the settlement exists and continues to be operative, no claim can be made under Section 33C(2) inconsistent with the same. If the settlement is intended to be terminated prior steps may have to be taken in that behalf and a dispute that may arise thereafter may be dealt with according to the other procedure prescribed by the said Act. 18. In R.B. Bansilal Abirchand Mills Co. Pvt. Ltd. v. The Labour Court, Nagpur & Ors., AIR 1972 SC 451, the Supreme Court was concerned with the question whether if a claim is made on the basis of a lay off and the employer contends that there was 16 no lay-off but closure, it is open to a Labour Court to entertain an application under Section 33C(2). The Supreme Court held that the Labour Court must go into the matter and come to a decision as to whether there was really a closure or a lay off and if it took 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. The Supreme Court further observed that the Labour Court’s jurisdiction could not be ousted by a mere plea denying the workman’s claim to the computation of the benefit in terms of money; the Labour Court had to go into the question and, determine whether, on the facts, it had jurisdiction to make the computation. It could not however, give itself jurisdiction by wrong decision on the jurisdictional plea. In this case the Supreme Court relied on the Constitution Bench judgment in Central Bank of India’s case (supra) and quoted extensively from it. 19. In Central Inland Water Transport Corporation Ltd. v. The Workmen (1974) 4 SCC 696: (1974 Lab IC 1018) the question before the Supreme Court was whether the Labour Court had jurisdiction to deal 17 with the question as to whether the undertaking of the Company had been transferred to the Corporation and if so, whether the settlement of August 25, 1965 between the Company and the Union was binding on the Corporation. The second issue was whether employees who were parties to the said settlement were entitled to continue in the employment of the Corporation and, if so what amount they were entitled to and whether said amount was recoverable from the Corporation. The third issue was whether 92 employees in list No. II who were parties to the said settlement were entitled to get compensation under S. 25FF of the said Act and, if yes, what was the amount to which they were entitled. 20. The Supreme Court referred to the Constitution Bench judgment in Central Bank’s case. The Supreme Court held that proceedings under S.33C are analogous to execution proceedings. It compared them to execution proceedings of a suit. It observed that in a suit a claim for relief made by the plaintiff against the defendant involves an investigation directed to determination of (i) the plaintiff’s right to relief, (ii) the corresponding liability of the defendant, including whether the 18 defendant is at all liable or not, and (iii) the extent of the defendant’s liability if any. In execution proceedings liability of the defendant has to be worked out. The extent of the defendant’s liability may sometimes be left over for determination in execution proceedings. But the determination of the plaintiff’s right and corresponding liability is not to be left to the execution proceedings. The Supreme Court made it clear that they are functions of a suit. The Supreme Court further held that since proceedings under S. 33-C (2) are in the nature of execution proceedings, looking into the applicant’s rights and the opponents liability is outside the scope of the Labour Court’s jurisdiction. 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. But that is merely incidental. It is only incidental question which can be gone into by the Labour Court and it cannot arrogate to itself functions, say of an Industrial Tribunal. 21. The Supreme Court went on to consider what is incidental. The Supreme Court observed that when the workman comes before the Labour Court for computation of his wages under S.33C(2), he cannot 19 ask the Labour Court to disregard his dismissal as wrongful and on that basis compute his wages. Determination as to whether dismissal was justified or not would be the principal matter for adjudication and computation of wages was consequent upon such adjudication. Determination of existing right is not what the Labour Court can take upon itself under S.33C(2). 22. In P.K. Singh & Ors. v. Presiding Officer & Ors., AIR 1988 SC 1618, the workmen filed applications under Section 33C(2) of the said Act for computation of wages payable to them. They claimed that even though they had been engaged as C-Grade fitters they were entitled to the salary allowances payable to B-Grade fitters. The management contested the claim stating that the applications were not maintainable as they involved reclassification of the workmen which could not be done under Section 33C(2). 23. The Supreme Court held that if the claim of the workmen was that they had been actually promoted to B-Grade fitters cadre and that the Management had denied that there was such a promotion, the Labour Court would have been under 20 an obligation to determine whether there was such a promotion or not. But under Section 33C(2), the workers engaged as C-Grade Fitters cannot claim salary of B-Grade Fitters because they have no existing right to it unless they are promoted to that post. The workmen, therefore, cannot ask the Labour Court under Section 33C(2) to do reclassification. The Supreme Court observed that it would be open to the workmen, however, if they so desire to seek a reference of the question whether they are entitled to be treated as E-Grade Fitters under Section 10 of the said Act. While arriving at this conclusion the Supreme Court relied on the Constitution Bench Judgment in Central Bank of India’s case (supra). 24. In Municipal Corporation of Delhi v. Ganesh Razak & Anr., 1995 1 CLR 170, the respondents claimed to be daily rated/casual workers of the appellant Municipal Corporation of Delhi. They claimed that they were doing the same kind of work as the regular employees and, therefore, they were required to be paid by the appellant the same pay as the regular employees. Their applications made under Section 33C(2) to the Labour Court were allowed. Writ Petition filed by the appellant was 21 dismissed by the Delhi High Court. Hence the appellant approached the Supreme Court. 25. The Supreme Court held that where the very basis of the claim or the entitlement of the workmen to a certain benefit is disputed, there being no earlier recognition thereof by the employer, the dispute relating to entitlement is not incidental to the benefit claimed and is, therefore, clearly outside the scope of proceedings under Section 33C(2) of the said Act. It is only when the entitlement has been earlier adjudicated or recognized by the employer and thereafter for the purpose of implementation or enforcement thereof, some ambiguity requires interpretation that the interpretation is treated as incidental to the Labour Court’s power under Section 33C(2) like that of the executing Court’s power to interpret a decree for the purpose