SCA/7819/2008 1/51 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 7819 of 2008 For Approval and Signature: HONOURABLE MR.JUSTICE H.K.RATHOD Sd/- ========================================================= 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 ? YES 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 ? YES 5 Whether it is to be circulated to the civil judge ? NO ========================================================= THE MANAGER, NAAZ CINEMA - Petitioner(s) Versus VASANTBEN RAMESHBHAI GHUMADIYAW/D OF RAMESHBHAI RAIJIBHAI GH - Respondent(s) ========================================================= Appearance : MR JV JAPEE for Petitioner(s) : 1, MR ASHISH H SHAH for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE H.K.RATHOD Date : 18/06/2008 ORAL JUDGMENT 1. Heard learned advocate Mr. J.V. Japee appearing on behalf of petitioner and learned advocate Mr. Ashish H. Shah appearing on behalf of respondent. SCA/7819/2008 2/51 JUDGMENT 2. Law abiding person facing many difficulties when the person gets justice from the Court. In the facts and circumstances of the present case, it is very unfortunate situation that undisputed claim of the workman challenged by employer with all legal and technical aspects that workman is not entitled this amount and Labour Court has committed an error in granting such benefit. How the Court machineries are being utilised for unnecessary legal fight between two unequal. This is a clear example of such a situation. 3. In the present petition, according to prayer made by petitioner in Para 14-A, order dated 4th December 2007 passed by Labour Court in Recovery Application No.80 of 2006 is challenged which is at Page 35. 4. Learned advocate Mr. J.V. Japee raised following contentions before this Court : (i) The Labour Court being an Executing Court has no jurisdiction to grant interest. (ii) The Labour Court has not condoned the delay as no prayer is made by the workman though application under Section 33-C-1 was filed after a period of one year. (iii) Leave Encashment claimed by the SCA/7819/2008 3/51 JUDGMENT workman in Recovery Application is covered by Schedule-Third and not by Schedule-Second, therefore, Labour Court has no jurisdiction to grant such amount. 5. He has relied upon the decision of Apex Court in case of H.P. State Electricity Board and Another v. Ranjeet Singh and Others reported in (2008) 4 SCC 241, in case of Punjab State & Others v. Harvinder Singh reported in 2008 SCCL.COM 223 and in case of Gujarat State Road Transport Corporation Limited v. Kantilal Balshanker Patel reported in 2002(0) GLHEL 204220. 6. The aforesaid decisions have been relied upon in support of his submissions. 7. Learned advocate Mr. Ashish H. Shah supported the decision of Labour Court. 8. I have perused the papers annexed to the petition by the petitioner and I have also perused the order passed by Labour Court in Recovery Application No.80 of 2006 dated 4th December 2007. The workman was working as Sweeper with the petitioner as a permanent employee. His service was terminated on 1st May 1983 by the petitioner, then, he raised industrial dispute before the Labour Court, Nadiad being a Reference No.1080 of 1983 which has been decided by the Labour Court in favour of workman. The Labour Court granted reinstatement with 75% backwages SCA/7819/2008 4/51 JUDGMENT of interim period from 1st May 1983 to 16th June 1992. Against this award, one Review Application was filed by the petitioner which was ultimately withdrawn by the petitioner, but, one fact is admitted by the petitioner before the Labour Court as well as before this Court that award in question is not set aside by the higher forum or Labour Court and till date, award remains intact. 9. According to learned advocate Mr. Japee that respondent workman was working in Municipal Corporation and therefore, he was not interested in job, but, workman is entitled for the wages as per direction issued by Labour Court for the period from 1st May 1983 to 16th June 1992. Earlier, workman had filed an application under the Payment of Wages Act which was dismissed on the ground that Recovery Application is filed by the workman under Section 33-C-1 of the Industrial Disputes Act, 1947. In Recovery Application, claim was Rs.41,106/- with 18% interest and with cost of Rs.3,000/-. Before the Labour Court, petitioner had filed reply vide Exh.7 and raised certain contentions that Labour Court has no jurisdiction. There was no certain amount mentioned in the award, therefore, Labour Court cannot pass such order as claimed by respondent. 10. It is necessary to note that before the Labour Court, workman had claimed the interest in the application itself. No such contention was raised by the petitioner before the Labour Court that Labour SCA/7819/2008 5/51 JUDGMENT Court has no jurisdiction to grant interest. No such contention was raised by petitioner before the Labour Court that leave encashment is covered by Schedule- Third of the Industrial Disputes Act, 1947 and not by Schedule-Second. The reply Exh.7 admitting the legality and validity of award in question and it was made clear that according to award, workman is entitled 75% backwages for the period from 1st May 1983 to 16th September 1992. The Miscellaneous Application No.31 of 2000 filed by petitioner which was withdrawn by petitioner. Ultimately, Labour Court framed the issue and before the Labour Court, the widow of deceased workman was joined as a party who was examined vide Exh.13 and it is very important and relevant to note that learned advocate Mr. Japee has argued at length relying upon the Supreme Court decisions as well as decision of this Court, but, before the Labour Court, after widow was examined vide Exh.13, no oral evidence was led by petitioner before the Labour Court. No documentary evidence was produced before the Labour Court, meaning thereby that except written statement vide Exh.7 which was filed by petitioner, no dispute was raised by the petitioner before the Labour Court which has been raised before this Court for the first time by learned advocate Mr. Japee. Learned advocate Mr. Japee has raised the contention that under Section 33-C-1, Appropriate Government has power to decide such application and Labour Court has no power. In fact, Appropriate Government has delegated the power to Labour Court to decide such application under SCA/7819/2008 6/51 JUDGMENT Section 33-C-1 of the Industrial Disputes Act, 1947 and long back i.e. on 21st April 1982, a notification was issued by Appropriate Government. 11. Apart from that a conduct of petitioner is very relevant, because, undisputed backwages of 75% for period specified in award not paid by petitioner. No efforts have been made by petitioner for making payment even after the death of the workman to the widow. On the contrary, petitioner having legal fight with the widow which total amount comes to round about Rs.41,000/-. This is making clear the intention of the petitioner by not paying the legally due amount to widow after expiry of the workman concerned. The Labour Court has taken note of it that petitioner has not led any evidence to rebut the claim and not produced any documentary evidence before the Labour Court and considering the facts, delay has been condoned by the Labour Court and Labour Court has rightly observed the attitude of the petitioner to avoid the payment to the respondent workman. The calculation prepared by widow annexed to application, but, no counter calculation is prepared and produced by petitioner before the Labour Court and raising the contention that it must be for specific amount, therefore, Labour Court has relied upon the calculation prepared by the respondent, because, no counter calculation is placed on record by the petitioner. The Labour Court has considered that due amount from 15th June 1998 i.e. date of award is not paid to the respondent by the petitioner about SCA/7819/2008 7/51 JUDGMENT more than ten years, therefore, Labour Court has granted interest amount to the respondent. 12. The power to grant interest is a discretionary power of the Labour Court. Order XXI of the Code of Civil Procedure is not applicable to the Labour Court proceedings. The decision of Apex Court in case of Punjab State & Others (supra) as referred above is in respect to original decree where the interest was not awarded and Executing Court has granted it is not applicable to the facts of this case. 13. In this case, facts are very clear that award passed by Labour Court on 15th June 1998 granted 75% backwages in favour of workman not paid till the death of workman and even after death of the workman, no mercy has been shown by the petitioner to make the payment to widow. On the contrary, a legal fight has been started against the widow knowing fully well that this amount has been due in favour of widow. Therefore, Labour Court has considered that attitude and conduct of the petitioner is not clear and proper to fight with widow raising technical contention and therefore, Labour Court has granted 9% interest for the period for 9 years and 4 months against the due amount while exercising the discretionary power, according to my opinion, is perfectly justified. 14. Section 33-C-1 is incorporated with an object that if any amount of the workman is due SCA/7819/2008 8/51 JUDGMENT against the employer based on settlement and award and not paid by the employer, then, workman can immediately approach to the concerned Labour Court for demanding such amount with interest because of delayed payment without justification. In this case, payment is not made to the workmen by the employer without any justification. For employer, there is no justification for not paying the amount which was legally due in favour of respondent. Therefore, every Court has inherent power to pass appropriate order considering the facts and circumstances of the case. Therefore, Labour Court has rightly granted the interest amount in favour of respondent workman. 15. Leave encashment is a part of wages not available to the workman which dispute was not raised by the petitioner before the Labour Court. Therefore, workman has rightly calculated the amount of leave encashment along with backwages. For that, Labour Court has rightly granted it, because, employer has not raised any contention before the Labour Court that leave encashment amount is not covered by wages and it covered by Schedule-Third not by Schedule- Second. A jurisdictional question not raised before the Labour Court and Labour Court has examined the matter. Now, for the first time, a question raised only being a technical one, but, according to my opinion, in wages definition, a leave encashment is covered, therefore, there is no separate claim over and above the wages made by the workman. Therefore, once the part of the wages is covered inclusive of SCA/7819/2008 9/51 JUDGMENT leave encashment amount, then, question of Schedule- Third to be examined does not arise. 16. Therefore, the decisions which has been relied upon by learned advocate Mr. Japee are not applicable to the facts of this case and not helpful to him or his arguments. Naturally, this Court cannot entertain such challenge against the undisputed due amount of the respondent. 17. It is necessary to note one important aspect that how the challenge is made by the lawyer of order in question when no such contention is raised by the petitioner before the Labour Court. 18. In light of aforesaid background, according to my opinion, Labour Court has rightly granted the amount of backwages with 9% interest with cost of Rs.3,000/- and total comes to Rs.79,188/-, for that, Labour Court has not committed any error while exercising the power under Section 33-C-1 of the Industrial Disputes Act, 1947. 19. Learned advocate Mr. Japee has not pointed out the error committed by Labour Court while passing such order. Normally, petition is filed challenging the order and award of the Labour Court, then, petitioner shall have to point out the error on the part of the Labour Court committed while passing such order and award. In this case, without pointing out any error committed by Labour Court, straightway, the SCA/7819/2008 10/51 JUDGMENT arguments has advanced that these are the points which are not considered by the Labour Court as if that, these are the contentions raised before the Labour Court and not considered or dealt with by the Labour Court. 20. Learned advocate Mr. Japee raised contention that leave encashment claimed by workman is specified as Item No.4 in Schedule Third, for which, only Industrial Tribunal has jurisdiction under Section 7A of the Industrial Disputes Act, 1947. The Labour Court has no jurisdiction to grant such relief relating to matter of Schedule Third. No doubt, such contention was not raised before the Labour Court and not raised in the present petition by the petitioner. However, he relied upon the recent decision of Apex Court in case of H.P. State Electricity Board and Another (supra). Before the Supreme Court, the same question was raised that claim of bonus is Item V in Schedule Third and not covered by Schedule Second. Therefore, Labour Court has no jurisdiction to grant the claim of bonus under Section 33(C)(2) and claim of bonus not covered in Schedule Second, the relevant observation made by Apex Court in Para 1 to 16 which is quoted as under : “1. These appeals involve an identical question and therefore are disposed of by common judgment. 2. The Himachal Pradesh High Court SCA/7819/2008 11/51 JUDGMENT disposed of several writ petitions by a common judgment dated 30-12-1998. The primary issue was whether a petition in terms of Section 33-C (2) of the Industrial Disputes Act, 1947 (in short “the Act”) is maintainable and whether daily wager can claim minimum bonus under the Payment of Bonus Act, 1965 (in short “the Bonus Act”). 3. Factual position is almost undisputed and needs to be noted in brief: The respondents were employed on daily-wage basis. The Labour Court by order dated 6-7-1991 held that the respective applicants were entitled to be paid minimum statutory bonus within the stipulated time. The decision was rendered on reference made. 4. Primary stand before the High Court was t hat daily wagers cannot get bonus. Additionally, the Labour Court has no jurisdiction to adjudicate such a matter. The High Court held that since there was a statutory obligations to pay minimum bonus the application under Section 33-C(2) of the Act was maintainable. 5. In support of the appeals, learned counsel for the appellants submitted inter alia as follows: (i) The Labour Court has no jurisdiction to decide the issue. SCA/7819/2008 12/51 JUDGMENT (ii) The Bonus Act was not applicable. 6. The Act has application only when the employees concerned get salaries or wages per mensum. Dearness allowance is not payable to daily wagers. The reference to Section 8 of the Bonus Act to decide eligibility was not correct. Merely because a person is working for 30 days in a year that does not entitle him to bonus. 7. Stand of the appellants that Section 2(21) of the Bonus Act is applicable only to persons who receive monthly salary, has also not been dealt with. 8. The claim was made for the period from 1977 to 1986. But the application was filed long after in 1991. The High Court was wrong in saying that only the quantum and not the question of liability can be decided in a reference under Section 22. Section 33-C(2) is in the nature of execution application. Section 33-C(2) relates to pre-existing right and the claim for bonus cannot be included within the scope of Section 33-C(2) of the Act. 9. In Civil Appeals Nos.87 of 2002, 8490 of 2001 and 331 of 2002 the grievance is that there was no claim for any interest. But the Labour Court and the High Court wrongly decided the entitlement of interest @12%. SCA/7819/2008 13/51 JUDGMENT 10. Learned counsel for the respondents submitted that Sections 10 and 11 of the Bonus Act deal with payment of minimum bonus. Section 22 of the Bonus Act used the expression “bonus payable.” It relates tot he quantum and varies between minimum and the maximum. 11. The High Court was right in holding that the application in terms of Section 33- C(2) of the Act was maintainable. 12. The scope and ambit of Section 33- C(2) has been examined by this Court in several cses. 13. In U.P.SRTC V.Birendra Bhandari reported in (2006) 10 SCC 211: (2007) 1 SCC (L&S) 69), it has been stated as under: “7. The benefit which can be enforced under Section 33-C(2) is a pre- existing benefit or one flowing from a pre-existing right. 8. In SBI V.Ram Chandra Dubey reported in (2001) 1 SCC 73 : 2001 SCC (L&S) 3 this Court held as under: (SCC pp.77-78, paras 7-8) `7. When a reference is made to an Industrial Tribunal to adjudicate the question not only as to whether the termination of a workman is justified SCA/7819/2008 14/51 JUDGMENT or not but to grant appropriate relief, it would consist of examination of the question whether the reinstatement should be with full or partial back wages or none. Such a question is one of fact depending upon the evidence to be produced before the Tribunal. If after the termination of the employment, the workman is gainfully employed elsewhere it is one of the factors to be considered in determining whether or not reinstatement should be with full back wages or with continuity of employment. Such questions can be appropriately examined only in a reference. When a reference is made under Section 10 of the Act, all incidental questions arising thereto can be determined by the Tribunal and in this particular case, a specific question has been referred to the Tribunal as to the nature of relief to be granted to the workman. 8. The principles enunciated in the decision referred by either side can be summed up as follows: Whenever a workman is entitled to receive from his employer any money or any benefit which is capable of being computed in terms of money and which he is entitled to receive SCA/7819/2008 15/51 JUDGMENT from his employer and is denied of such benefit can approach Labour Court under Section 33-C(2) of the Act. The benefit sought to be enforced under Section 33-C(2) of the Act is necessarily a pre-existing benefit or one flowing from a pre- existing right. The difference between a pre-existing right or benefit on one hand and the right or benefit, which is considered just and fair on the other hand is vital. The former falls within jurisdiction of Labour Court exercising powers under Section 33-C(2) of the Act while the latter does not. It cannot be spelt out from the award in the present case that such a right or benefit has accrued to the workman as the specific question of the relief granted is confined only to the reinstatement without stating anything more as to the back wages. Hence that relief must be deemed to have been denied, for what is claimed but not granted necessarily gets denied in judicial or quasi-judicial proceeding. Further when a question arises as to the adjudication of a claim for back wages all relevant circumstances which will have to be gone into, are to be considered in a judicious manner. Therefore, the appropriate forum wherein such SCA/7819/2008 16/51 JUDGMENT question of back wages could be decided is only in a proceeding to whom a reference under Section 10 of the Act is made. To state that merely upon reinstatement, a workman would be entitled, under the terms of award, to all his arrears of pay and allowances would be incorrect because several factors will have to be considered, as stated earlier, to find out whether the workman is entitled to back wages at all and to what extent. Therefore, we are of the view that the High Court ought not to have presumed that the award of the Labour Court for grant of back wages is implied in the relief of reinstatement or that the award of reinstatement itself conferred right for claim of back wages.'” The above position has also been highlighted in Vijay Kumar v. Whirlpool of India Ltd. reported in (2008) 1 SCC 119 : (2008) 1 SCC (L&S) 5 : (2007) 13 Scale 379). 14. In Central Inland Water Transport Corpn. Ltd. v. Workmen reported in (1974) 4 SCC 696 : 1974 SCC (L&S) 421 : AIR 1974 SC 1604), it was inter alia held as follows: (SCC pp.701-02, para 13) “13. In a suit, a claim for relief made by the plaintiff against SCA/7819/2008 17/51 JUDGMENT the defendant involves an investigation directed to the determination of (i) the plaintiff's right to relief; (ii) the corresponding liability of the defendant, including, whether the defendant is, at all, liable or not; and (iii) the extent of the defendant's liability, if any. The working out of such liability with a view to give relief is generally regarded as the function of an execution proceeding. Determination (iii) referred to above, that is to say, the extent of the defendant's liability may sometimes be left over for determination in execution proceedings. But that is not the case with the determinations under Heads (i) and (ii). They are normally regarded as the functions of a suit and not an execution proceeding. Since a proceeding under Section 33- C(2) is in the nature of an execution proceeding it should follow that an investigation of the nature of Determinations (i) and (ii) above is, normally, outside its scope. It is true that in a proceeding under Section 33-C(2), as in an execution proceeding, it may be necessary to determine the identity of the person by whom or against whom the claim is made if there is a challenge on that SCA/7819/2008 18/51 JUDGMENT score. But there is merely `incidental'. To call Determinations (i) and (ii) `incidental' to an execution proceeding would be a perversion, because execution proceedings in which the extent of liability is worked out are just consequential upon Determinations (i) and (ii) and represent the last stage in a process leading to final relief. Therefore, when a claim is made before the Labour Court under Section 33-C(2) that court must clearly understand the limitations under which it is to function. It cannot arrogate to itself the functions – say of an Industrial Tribunal which alone is entitled to make adjudications in the nature of Determinations (i) and (ii) referred to above, or proceed to compute the benefit by dubbing the former as `incidental' to its main business of computation. In such cases Determinations (i) and (ii) are not `incidental' to the computation. The computation itself is consequential upon and subsidiary to Determinations (i) and (ii) as the last stage in the process which commenced with a reference to the Industrial Tribunal. It was, therefore, held in State Bank of Bikaner and Jaipur V.R.L.Khandelwal reported in (1968) 1 SCA/7819/2008 19/51 JUDGMENT LLJ 589 (SC), that a workman cannot put forward a claim in an application under Section 33-C(2) in respect of a matter which is not based on an existing right and which can be appropriately the subject-matter of an industrial dispute which requires a reference under Section 10 of the Act.” 15. The case at hand belongs to Category (i) as elaborated in Central Inland Case.” 16. Further, the High Court seems to have lost sight of the fact that the Labour Court under the Act can decide only the matters specified in the Second Schedule. “Bonus” is not covered by the Second Schedule. Item 6 of the Second Schedule says that it deals with all matters except those covered by the Third Schedule. “Bonus” appears as Item 5 in the Third Schedule. Therefore, the question of entitlement to bonus could not have been decided