Full Judgment Text
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PETITIONER:
DENA BANK
Vs.
RESPONDENT:
KIRITIKUMAR T.PATEL
DATE OF JUDGMENT: 19/11/1997
BENCH:
S.C. AGRAWAL, V.N. KHARE
ACT:
HEADNOTE:
JUDGMENT:
THE 19TH DAY OF NOVEMBER, 1997
Present:
Hon’ble Mr.Justice S.C.Agrawal
Hon’ble Mr.Justice V.N.Khare
P.P.Rao, Sr.Adv., Ramji Srinivasan, Shaju Francis,
R.Sasiprabhu, Advs. with him for the appellant
Jitendra Sharma, Sr.Adv., (A.C.), Ms.Gunwant Dara,
Ms.Minakshi Vij, Advs. with him for the Respondent
Raj Kumar Gupta H.V.I.Sharma and A.N.Bardiyar, Advs. for
Intervenors.
J U D G M E N T
The following Judgment of the Court was delivered:
S.C.AGRAWAL, J.:
Special leave granted.
The question that falls for consideration in this
appeal is whether the expression "full wages last drawn" in
Section 17-B of the Industrial Disputes Act, 1947
[hereinafter referred to as as ‘the Act’] means wages drawn
by a workman at the time of termination of his employment or
wages which he would have drawn on the date of the award.
The respondent was employed as Clerk-cum-Cashier with
the appellant-Bank. After holding an inquiry into charges
relating to misappropriation of funds of the Bank of the
tune of Rs.5,000/- as contained in charge sheet dated June
18, 1983 he was dismissed by order dated July 1, 1986. The
said dismissal of the respondent gave rise to an industrial
dispute which was referred for adjudication to the Central
Industrial Tribunal, [hereinafter referred to as ‘the
Tribunal’]. The tribunal found that the charges were not
established and held that the dismissal of the respondent
was illegal. The Tribunal directed reinstatement of the
respondent in service. The appellant-Bank has filed a writ
petition under Article 227 of the Constitution in the
Gujarat High Court challenging the said award of the
Tribunal and the said writ petition in pending in the High
Court. In the said writ petition the Division Bench of the
High Court on September 11, 1991 passed in interim order
staying the operation of the award on the condition that the
appellant-Bank would comply with the provisions of Section
17-B of the Act and will pay to the respondent during
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pendency of the writ petition wages as per the said
provisions subject to the respondent complying with its
requirement meaning thereby that he will be paid wages last
drawn or which would have been drawn if he was not
suspended. An application was submitted by the respondent
for modification of the said order seeking a direction for
payment of wages as on the date of the award. The said
application was, however, rejected by the Division Bench of
the High Court by order dated October 22, 1991. Subsequently
another application was filed by the respondent whereunder
it was submitted that during pendency of the writ petition
in the High Court settlements had been signed with regard to
wage revision, etc., the last such settlement being dated
14, 1995 and that the said settlement had been implemented
by the appellant-Bank in respect of employees already in
employment. The respondent claimed that he was also entitled
for revision in wage structure including Dearness Allowance
and other perks and perquisites. On the said application the
learned Single Judge on September 26, 1995 passed an order
directing that the respondent shall be paid the wages as
revised by the appellant-Bank including the increments,
D.A., etc. which are granted to all the employees pursuant
to two settlements signed during the pendency of the writ
petition between the banking industry and the All India
Trade Unions which are known as the Fifth and the Sixth
Bipartite Settlements and that arrears be paid to him from
the date of the award accordingly. The Letters Patent Appeal
filed by the appellant-Bank against the said order of the
learned Single Judge was decided by a Division Bench of the
High Court by the impugned judgment dated February 7, 1996
whereby the direction given by the learned Single Judge
regarding wages payable to the respondent has been
maintained but the direction regarding arrears has been
modified and it has been directed that the appellant-Bank
shall deposit all deposit of three years in the name of the
respondent and that from January 1, 1996 onwards the
respondent will be paid according to the order of the
learned Single Judge and that the deposit will abide by the
final result of the Special Civil Application but the
interest accruing on the fixed deposit shall be paid to the
respondent. Feeling aggrieved by the said judgment of the
Division Bench of the High Court the appellant-Bank has
filed this appeal.
Shri P.P.Rao, the learned senior counsel appearing for
the appellant-Bank, has urged that under Section 17-B of the
Act the respondent is only entitled to payment of wages last
drawn on the date of the termination of his employment and
that the High Court was in error in directing that he should
be paid the wages as revised by the appellant-Bank including
the increments, D.A., etc. which are granted to all the
employees pursuant to two settlement between the banking
Industry and the All India Trade Unions which are known as
the Fifth and the Sixth Bipartite Settlements which were
signed during the pendency of the writ petition in the High
Court. It has been urged that the expression "full wages
last drawn" only means the quantum of emoluments actually
drawn by the workman at the time of the termination of his
employment and would not mean the wages which the workman
would be entitled in terms of the award whereby the order of
dismissal has been set aside. In support of his aforesaid
submission the learned counsel has placed reliance on the
following decisions of the various High Court:
1. International Air Cargo Workers Union Vs. International
Airports Authority of India, [1990] 1 LLJ 1192 (Mad.);
2. Daladdi Coop. Agriculture Service Society Ltd. vs.
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Gurcharan Singh & Anr., 1993 (5) SLR 719 (Punjab &
Hary.);
3. Elpro International Ltd. vs. K..B.Joshi & Ors., 1987
Lab.I.C. 1468 at 1472-1473 (Bom);
4. The Kapurthala Central Cooperative Bank Ltd. vs. the
Presiding Officer, Labour Court, Jalandhar, 185 (2) 88
Pun.L.R.74.
Shri Jitendra Sharma, the learned senior counsel, who
was requested to assist the Court as amicus curiae since the
respondent did not chose to appear in spite of notice, has
submitted that the expression "full wages last drawn" does
not connote the amount that was being paid to the workman at
the time of termination of his employment but means the
wages that would be payable to him at the time of order of
reinstatement. In support of his aforesaid submission Shri
Jitendra Sharma has referred to the Objects and Reasons
underlying the enactment of Section 17-B and has urged that
the said provisions have been enacted to give protection to
a workman who having succeeded in obtaining an award from
the Labour Court, Industrial Tribunal or National Tribunal
setting aside the order of termination of his service and
directing that he be reinstated, is not allowed to resume
work because the employer has filed proceeding in the High
Court or in this Court to challenge the said award. The
learned counsel has urged that if the workman is to get only
what he was getting at the time of termination of his
service, whether as subsistance allowance or wages, he gets
no benefit of the award in his favour and is put back to his
position as a suspended or charge sheeted workman
notwithstanding the fact that termination order has been set
aside. Shri Jitendra Sharma has also emphasised that it
takes years to get a matter decided that it could not be
the intention of Parliament in enacting Section 17-B that
workman should only be paid wages that he was drawing
several years ago at the time of the termination of his
service. In support of his submissions Shri Jitendra Sharma
has placed reliance on the following decisions of the High
Courts:
i. Vishveswaraya Iron and Steel Ltd. vs. M. Chandrappa &
Anr., 1994 (84) FJR (Kar);
ii. Carona Sahu Co. Ltd vs. A.K.Munakhan & Ors., 1995 (70)
FLR 25 (Bom);
iii. Kirtiben B.Amin vs. Mafatlal Apparels, 1995 (2) GLR 804
(Guj.);
iv. Macneil and Magor Ltd. vs. 1st Additional Labour Court
and Anr., 1995 (1) Labour Law Notes 1014 (Mad);
v. Fouress Eng. (India) Pvt. Ltd. vs. Delhi Administration
& Ors., 1987 (1) LLJ 485 (Delhi); and
vi. P.Channaiah vs. Dy.Ex.Eng. R.R.Dist. & Ors. 1996 (2)
LLJ 240 (A.P.).
Shri Raj kumar Gupta, the learned counsel for the
Intervenor, has also placed reliance on the decisions
referred to above on which reliance was placed by Shri
Jitendra Sharma and has emphasised the hardship that would
be caused to the workman if the expression "full wages last
drawn" is construed to mean wages that were being drawn by
him at the time of termination of his employment because it
would not take into account the rise in the cost of living
during the period the matter was pending adjudication before
the Tribunal and is under consideration before the High
Court or this Court.
It would be convenient at this stage to set out the
provisions contained in Section 17-B of the Act which reads
as under:
Section 17-B. Payment of full wages
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to workman pending proceeding is
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, during the
period of pendency of such
proceeding 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 bee 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 ben employed and had
been receiving adequate
remuneration during any 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."
The objects and reasons for enacting the said
provisions were as follows :
"When Labour Courts pass award of
reinstatement, these are often
contested by an employer in the
Supreme Court of High Courts. It
was felt that the delay in the
implementation of the award cause
hardship to the workman concerned.
It was, therefore, proposed to
provide the payment of the wages
last drawn by the workman
concerned, under certain
conditions, from the date of the
award till the case is fianlly
decided in the Supreme Court High
courts."
It would thus appear that the object underlying the
enacting of the provisions contained in Section 17-B is to
give relief to the workman in whose favour an award of
reinstatement has been passed by the Labour Court and the
said award is under challenge in the High Court of this
Court. The said relief has been given with a view to relieve
the hardship that would be caused to a workman on account of
delay in implementation of the award as a result of the
pendency of the proceedings in the High Court or this Court.
The question for consideration is: what is the extent to
which such relief has been granted to a workman under this
provision? The objects and reason do not indicate an answer
to this question and its answer has to be found in the
provisions of the enactment. Since the expression "full
wages last drawn" in Section 17-B has been construed by the
various High Court in the decisions referred to above we
would briefly refer to the same:
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A Division Bench of the Karnataka High Court in
Vishveswaraya Iron and Steel Ltd. vs. M. Chandrappa & Anr.
[Supra] has held that the words "full wage last drawn" take
into their fold the wages drawn on the date of termination
of the services plus the yearly increment and the D.A. to be
worked out till the date of the award. In taking this view
the learned Judge have pointed out that it is not uncommon
that the proceedings before the Labour Court linger on for
years and in some cases it takes a decade and that if after
a decade the full wages last drawn are to be paid from the
date of the award during the pendency of the proceedings
before the Court at the same rate at which the wages where
last drawn by the workman when he was removed, dismissed or
terminated from the service, it would cause him great
prejudice and injustice and will result in harassment of the
workman and that during the last period of 10 years there
would be escaiations in the cost of living and there would
also be increase in the wages paid to the workman doing the
work of similar nature.
The said decision was followed by learned Single Judge
of the Gujarat High Court in Kirtiben B. Amin vs. Mafatlal
Apparels [supra].
In Carona Sahu Co. Ltd. vs. A.K.Munakhan & Ors [supra],
a Division Bench of the Bombay High Court, after referring
to the decision of the Karnataka High Court Vishveswaraya
Iron and Steel Ltd. [supra], has laid down that the
expression "full wages last drawn" means the full wages
which the workman was entitled to draw in pursuance of the
award and the implementation of which is suspended during
the pendency of the proceedings. The learned Judges have
observed that though the work "drawn" connotes past tense,
it is obvious that the proper construction of the section is
that the workman is entitled to the full wages which the
workman would have been entitled to draw but for the
pendency of the proceedings in the High Court or this Court.
According to the learned Judges every component of wages
payable on the date of the award must be taken into
consideration while determining what were the wages payable
to the workman on the date of the award. It has been held
that this interpretation of the expression "full wages last
drawn" subserves of the object and intention of the
Parliament in enacting Section 17-B of the Act.
In Macneil and Magor Ltd. vs. 1st Additional Labour
Court and Anr. [supra], a learned Single Judge of the Madras
High Court has followed the said decision of the Bombay High
Court in Carona Sahu Co. ltd. [supra]. Similarly in
P.Channaiah vs. Dy. Ex. Eng. [supra] the Division Bench of
the Andhra Pradesh High Court has followed the said decision
of the Bombay High Court in Carona Sahu Co. Ltd. [supra].
The High Court of Punjab & Haryana in Daladdi
Cooperative Agriculture Service Society Ltd. vs. Gurcharan
Singh & Anr., 1993 (5) SLR 719, has, however, taken a
different view. The learned Judge have held that the
provisions in Section 17-B imply that if the workman is not
gainfully employed in any establishment he is entitled to
the payment of wages at the same rate at which he was being
paid immediately before the termination of his services.
According to the learned Judges the legislature while
introduction Section 17-B intended that the workman who
remains unemployed in spite of an award having been passed
by the competent court or Tribunal, should be paid at least
the wages at the rate last drawn by him so that he may be
able to subsist. It has been held that the workman who has
not been reinstated is entitled to payment of wages only at
the rate last drawn by him and not at the same rate at which
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the wages are being paid to the workmen who are actually
working.
The decision of the Delhi High Court in Fouress Eng.
(India) Pvt. Ltd. vs. Delhi Administration & Ors., on which
reliance has been placed by Shri Sharma, does not throw much
light on the meaning of the expression "full wages last
drawn".
The decision of the Bombay High Court in Elpro
International Ltd vs. K..B.Joshi & Ors. [supra] and that of
the Punjab & Haryana High Court in Kapurthala Central
Cooperative Bank Ltd. vs. The Presiding Officer, Labour
Court, Jalandhar [supra], on which reliance has been placed
by Shri Rao do not deal with the meaning of the expression
"full wages last drawn".
In Elpro International Ltd. vs. K..B.Joshi, the
Division Bench of the Bombay High Court was dealing with the
challenge to the validity of the provisions in Section 17-B
on the ground that the same are vague and arbitrary inasmuch
as no provisions is made as to what would happen to the
amount paid if ultimately the employer succeeds and the
award is quashed and set aside and are therefore, violative
of Article 14 of the Constitution. It was also urged that
the said provisions encroach upon the powers of the High
Court and this Court under Articles 226 and 136 of the
Constitution. The High Court has rejected both the
contention. It was held that the absence of a provisions as
to what would happen to the amount paid under Section 17-B
if ultimately the employer succeeds in the litigation does
not make the section either vague or arbitrary because what
is to be paid under Section 17-B is in the nature of
subsistence allowance that is payable under Section 10-A of
the Industrial Employment [Standing Orders] Act, 1946 which
is neither refundable nor recoverable irrespective of the
result of the enquiry. As regards challenge on the ground of
encroachment upon the powers of the High Court under Article
226 and this Court under Article 136 of the Constitution,
the High Court was of the view that Section 17-B only
guarantees to the workman the payment of wages by the
employer during the pendency of the proceedings before the
High Court or the Supreme Court and that too subject to the
conditions laid down by the said section and the proviso,
irrespective of the result of the proceedings and it also
imposes an obligation upon the workman concerned to file an
affidavit before the Court stating that he has not been
employed in any establishment during the pendency of the
proceedings and it also absolves the employer of his
obligation to pay such wages if he is able to prove to the
satisfaction of the Court that the workman had been
otherwise and had been receiving adequate remuneration. The
High Court has observed that Section 17-B nowhere lays down
that in extreme cases it is demonstrated that award passed
is either without jurisdiction or is otherwise a nullity or
grossly erroneous or perverse, the High Court or the Supreme
Court is deterred from exercising its powers under Articles
226 and 136 of the Constitution. On that view the High Court
held that Section 17-B does not in any way encroach upon or
override the powers of the High Court under Article 226 and
this Court Article 136 of the Constitution.
Similarly in the Kapurthala Central Cooperative Bank
Ltd. vs. The Presiding Officer, Labour Court, Jalandhar
[supra] the High Court of Punjab & Haryana considered the
validity of the challenge the Section 17-B as violative of
the provisions of Article 226 of the Constitution and
negativing the said challenge it was held that Section 17-
B does not in any way interfere or restrict the same and
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that the section only guarantees the workers the payment of
wages by the employer during the course of proceeding in the
High Court or the Supreme Court of Course subject to the
safeguard provided for irrespective of the result of the
proceedings.
In International Air Cargo Workers Union vs.
International Airports Authority of India [supra} the
Division Bench of the Madras High Court has expressly stated
that they were not dealing with a case where a workman whose
services have been terminated was ordered to be reinstated
by an award of the Tribunal and that it was a case where the
Tribunal had directed that management to absolve the
workman. Without deciding whether Section 17-B would be
attracted in such a case the High Court while applying the
principles underlying the said section, directly by way of
interim relief, payment at the rate the workmen were being
paid by the contractor and in that context there are
observations to the effect that even if Section 17-B would
be attracted no directions could have been issued to pay
wages more than the last wages drawn.
As per the decisions of the High Court referred to
above the expression "full wages last drawn" in Section 17-
B can mean as under:
(i) wages only at the rate last drawn and not the same rate
at which the wages are being paid to the workman who
are actually working. [Daladdi Cooperative Agriculture
Service Society Ltd. vs. Gurcharan Singh]
(ii) Wages drawn on the date of termination of the services
plus the yearly increment and the Dearness Allowance to
be worked out till the date of the award.
[Vishveswaraya Iron and Steel Ltd. vs. M.Chandrappa &
Anr. and Kirtiben B. Amin vs. Mafatlal Apparels]
(iii) Full wages which the workman was entitled to draw in
pursuance of the award and the implementation of which
is suspended during the pendency of the proceeding
[Carona Sahu Co. Ltd. vs. A.K.Munakhan & Ors., Macneil
and Magor Ltd. vs. 1st Additional Labour Court & Anr.
and P.Channaiah vs. Dy.Eng.]
The first construction give to the words "full wages
last drawn" their plain and material meaning. The second as
well as the third construction read something more than
their plain and material meaning in this words. In substance
these construction read the words "full wages last drawn" as
"full wages which would have been drawn". Such an extended
meaning to the words "full wages last drawn" does not find
support in the language of Section 17-B. Nor can this
extended meaning be based on the object underlying the
enactment of Section 17-B.
As indicated earlier Section 17-B has been enacted by
Parliament with a view to give relief to a workman who has
been ordered to be reinstated under the award of a Labour
Court or the Industrial Tribunal during the pendency of
proceedings in which the said award is under challenge
before the High Court or the Supreme Court. The object
underlying the provision is to relieve a certain extent the
hardship that is caused to the workman due to delay in the
implementation to the workman is in the nature of
subsistence allowance which would not be refundable or
recoverable from the workman even if the award is set aside
by the High Court or this Court. Since the payment is of
such a character Parliament thought it proper to limit it to
the extent of the wages which were drawn by the workman when
he was in service and when his services were terminated and
therefore used the words "full wages last drawn". To read
these words to mean wages which would have been drawn by the
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workman if he had continued in service if the order
terminating his services had not passed since it has been by
the award of the Labour of Industrial Tribunal, would result
in so enlarging the benefit as to comprehend the relief that
has been granted under the award that is under challenge.
Since the amount is not refundable or recoverable in the
even of the award being set aside it would result in the
employer being required to give effect to the award during
the pendency of the proceeding challenging the award before
the High Court or the supreme Court without his being able
to recover the said amount in the event of the awarded being
set aside. We are unable to constitute the provisions
contained in Section 17-B, to cast such a burden on the
employer. In our opinion, therefore, the words "full wages
last drawn" must be given their plain and material meaning
and they cannot be given the extended meaning as given by
the Karnataka High Court Visveswarya Iroon & Steel Ltd.
[supra] or the Bombay High Court in Carona Sahu Co. Ltd.
[supra].
Shri Jitendra Sharma has laid emphasis on the word
"full" in the expression "full wages last drawn" and has
submitted that the said word implies that the last drawn
must be the was which the workman would have drawn under the
award. We are unable to agree. In our opinion, the
expression "full" only emphasis that all the emoluments
which are included in "wages" as defined in clause [rr] of
section 2 of the Act so as to include in "wages" as referred
to in sub-clauses (i) to (iv) are required to be paid. In
this context, it may also be mentioned that in Section 17-B
Parliament has also used the words "inclusive of any
maintenance allowance admissible to him under to him any
rule". These words indicate that maintenance allowance that
is admissible under any rule is required to be paid
irrespective of the amount which was actually being paid as
maintenance allowance to the workman. But with regard to
wages Parliament has used the words "full wages last drawn"
indicating that the wages that were actually paid and not
the amount that would be payable are required to be paid.
As regards the powers of the High Court and the Supreme
Court under Article 226 and 136 of the Constitution it may
be stated that Section 17-B, by conferring a right on the
workman to be paid the amount of full wages last drawn of
the Labour Court, Industrial Tribunal or National Tribunal
in the High Court or the Supreme Court which amount is not
refundable or recoverable in the event of the award being
set aside, does not in any way preclude the High Court or
the Supreme Court to pass a order directing payment of a
higher amount to the workman if such higher amount is
considered necessary in the interest of justice. Such a
direction would be dehors the provisions contained in
Section 17-B and while giving the direction the Court may
also give directions regarding refund or recovery of the
excess amount in the event of the award being set aside. But
we are unable to agree with the view of the Bombay High
Court in Elpro International Ltd. [supr] that in exercise of
the power under Article 226 and 136 of the Constitution an
order can be passed denying the workman the benefit granted
under Section 17-B. The conferment of such a right under
Section 17-B cannot be regarded as a restriction on the
powers of the High Court or the Supreme Court under Article
226 and 136 of the Constitution.
In the present case by his order dated September 26,
1995 the learned Single Judge, while exercising the powers
under Section 17-B, has directed payment of wages as
revised, including the increments, D.A., etc. which are
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granted to all the employee pursuant to the Fifth and Sixth
Bipartite Settlements. The said direction of the learned
Single Judge, which has been upheld by the Division Bench of
the High Court in the impugned judgment, cannot tb upheld
since it amounts to directing payment of wages which would
have been drawn by the respondent if he had been reinstated
and not the full wages last drawn by him.
For the reasons aforementioned, the appeal is allowed
and the impugned judgment of the Division Bench of the High
Court dated February 7, 1996 as well as the order dated
September 26, 1995 passed by the learned Single judge are
set aside, No order as to costs.