Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 7056-7065 OF 2001
H.P. State Electricity Board and Anr. ....Appellants
Versus
Ranjeet Singh and Ors. ....Respondents
(With Civil Appeal Nos. 2802/2007, 331/2002, 8490/2001
and 87 of 2002)
J U D G M E N T
Dr. ARIJIT PASAYAT, J.
1. These appeals involve an identical question and therefore
are disposed of by a common judgment.
2. The Himachal Pradesh High Court 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 wages 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 a reference made.
Primary stand before the High Court was that daily
wagers cannot get bonus. Additionally, the Labour Court has
no jurisdiction to adjudicate such a matter. The High Court
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held that since there was a statutory obligation to pay
minimum bonus the application under Section 33-C(2) of the
Act was maintainable.
4. 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.
(ii)
the Bonus Act was not applicable.
5. The Act has application only when the concerned
employees 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.
6. Stand of the appellants that Section 2(11) of the Bonus
Act is applicable only to persons who receive monthly salary,
has also not been dealt with.
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7. 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.
8. In Civil Appeal No.87/2002, 8490/2001 and 331/2002
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%.
9. Learned counsel for the respondents submitted that
Sections 10 and 11 of Bonus Act deal with payment of
minimum bonus. Section 22 of Bonus Act uses the expression
‘bonus payable’. It relates to the quantum and varies between
minimum and the maximum.
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The High Court was right in holding that the application in
terms of Section 33-C(2) of the Act was maintainable.
10. The scope and ambit of Section 33-C(2) has been
examined by this Court in several cases.
11. In U.P. State Road Transport Corporation v. Birendra
Bhandari (2006 (10) SCC 211) 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 the case of State Bank of India v. Ram
Chandra Dubey & Ors. (2001 (1) SCC 73), this
Court held as under:
"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
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
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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 workmen.
8. The principles enunciated in the
decisions 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
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
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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 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
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or that the award of reinstatement
itself conferred right for claim of back
wages."
12. The above position has also been highlighted in Vijay
Kumar v. Whirlpool of India Ltd. (2007 (13) SCALE 379).
13. In Central Inland Water Transport Corporation Ltd. v.
The Workmen and Anr. (AIR 1974 SC 1604) it was inter-alia
held as follows:
“13. In a suit, a claim for relief made by the
plaintiff against 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
defendants 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 No. (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
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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 score. But that 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 the
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
[1968] 2 L.LJ. 589 (SC} that a workman cannot
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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.”
14. The case at hand belongs to category (i) as elaborated in
Central Inland’s case (supra).
15. 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 Second Schedule. “Bonus” is not covered
by the Second Schedule. Item 6 of 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 by the Labour Court. In case of pre existing
rights there must be agreements by both sides about existence
of such rights. If there is dis-agreement this has to be decided
by the competent authority. The stand that the expression
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‘bonus payable’ relates to the quantum and not payability is
also not correct.
16. Since the High Court has not considered the above
aspects, we remit the matter to it for considering (i) the
applicability of Section 33-C(2) of the Act and (ii) the
jurisdiction of the Labour Court to decide the matter; and (iii)
the applicability of the Bonus Act to daily wagers.
17. The appeals are allowed with no order as to costs.
………………………….J.
(Dr. ARIJIT PASAYAT)
…………….……………J.
(P. SATHASIVAM)
New Delhi,
March 5, 2008
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