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1964 DIGILAW 382 (MAD)

Merla Jagannayakaiu v. The Presiding Officer, Labour Court, Madras

1964-09-08

K.VEERASWAMI

body1964
ORDER:- The fourth respondent, on the ground that he had been retrenched from the service of the fifth respondent of which the petitioner was a partner, applied to the Labour Court, Madras, under section 33-C(2) of the Industrial Disputes Act, for computation of the benefits of retrenchment compensation, notice-pay and arrears of wages. The fifth respondent was a firm of partnership constituted on or about 25th September, 1958. On 12th September, 1959, the petitioner went out of the firm and ceased to be a partner, as he claims. The firm was engaged in production of a picture by name ‘Samajam ‘in Telugu. The fourth respondent claimed that he was employed in the firm from April, 1958 to December, 1959, and, on 31st December, 1959, the management terminated his service without any reason and without any notice. He claimed Rs. 200 as retrenchment compensation, another sum of Rs. 200 in lieu of notice, the sum being his salary for a month, and Rs. 4,200 as arrears of salary from April, 1958 to December, 1959. The Labour Court allowed the entire claim. The petitioner states that he, having gone out of the partnership as early as September 1959, knew nothing about the proceedings under section 33-C(2) and he had no notice of them. The first notice that he had was in or about August, 1962, when the order of the Labour Court was sought to be executed against him under the provisions of the Revenue Recovery Act by the Collector of East Godavari, on a request for the purpose from the Collector of Madras. He has, therefore, applied to this Court to quash the order of the Labour Court. It is argued for the petitioner that, nowhere in its order, the Labour Court has directed its mind to find whether this was a case of retrenchment at all. It has not found that the services of the fourth respondent were dispensed with on the ground of surplus labour. It is only in such a case, according to the petitioner, the termination could be called as retrenchment. I think this contention is well-founded. In Murugesa Naicker Co. v. Presiding Officer, Labour Court1, this Court held that termination of services in order to be retrenchment should be of surplus labour and in an industry which was continuing and not closed or transferred. I think this contention is well-founded. In Murugesa Naicker Co. v. Presiding Officer, Labour Court1, this Court held that termination of services in order to be retrenchment should be of surplus labour and in an industry which was continuing and not closed or transferred. Rathinaswami Kadar v. Presiding Officer, Labour Court, Madurai2, also took the same view. In this case, as in the first of those cases, the Labour Court assumed that it automatically followed from its finding that the services of the workman had been terminated that he was retrenched from service. That is a misdirection and the Labour Court’s order, in so far as it related to notice-pay and retrenchment compensation should be quashed. The further contention for the petitioner is that the labour Court had no jurisdiction to compute arrears of salary. In Daniel Dorairaj v. Management of Buckingham & Carnatic Co.3 this Court dealing with the scope of section 33-C, expressed the view that there was no special reason why sub-section (2) of section 33-C should be read de hors the purpose of the section, namely, to provide a machinery for speedy execution and as comprehending any benefit whatever awarded outside the provision of the Industrial Disputes Act. I held that the words “any benefit” in Section 33-C(2) meant only that which flowed from a settlement or an award or under the provisions of Chapter V-A of the Industrial Disputes Act. But Daniel Dorairaj v. Management of Buckingham &38; Carnatic Co. Ltd.4, which was an appeal from Daniel Dorairaj v. Management of Buckingham &38; Carnatic Co., Ltd.3, took a different view following Central Bank of India v. Rajagopalan.5 The learned Judges refer. ring to the view in Daniel Dorairaj v. Management of Buckingham & Carnatic Co., Ltd.1 observed: “The view taken by the learned Judges can no longer be supported having regard to the decision in Central Bank of India v. Rqjagopalan2. Their Lordships of the Supreme Court, after exhaustively dealing with the scope of the section, held that sub-section (2) of section 33-C was wider in scope that sub-section (1)”. Daniel Dorairaj v. Management of Buckingham & Carnatic Co., Ltd.1, was a case in ‘which section 33-C (2) was invoked for computing the benefit arising from a private arbitration award. Their Lordships of the Supreme Court, after exhaustively dealing with the scope of the section, held that sub-section (2) of section 33-C was wider in scope that sub-section (1)”. Daniel Dorairaj v. Management of Buckingham & Carnatic Co., Ltd.1, was a case in ‘which section 33-C (2) was invoked for computing the benefit arising from a private arbitration award. It has, therefore, to be taken that sub-section (2) of section 33-C is wider in scope than sub-section (1) and not confined to computation of the benefits arising out of an award, settlement or under the provisions of Chapter V-A of the Industrial Disputes Act. But how wider is sub-section (2) and what classes of cases will fall within its ambit is a matter which has to be decided in each case, and it is not possible to comprehensively lay down the classes of cases which may fall within its ambit; in fact, in Central Bank of India Ltd. v. Rajagopalan2, the Supreme Court considered such an attempt to be not desirable. This is what the Supreme Court observed: “Thus, our conclusion is that the scope of section 33-C(2) is wider than section 33-C(1) and cannot be wholly assimilated with it, though for obvious reasons, we do not propose to decide or indicate what additional cases would fall under section 33-C(2) which may not fall under section 33-C(1).” But, their Lordships, at the same time, indicated: “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 for the recovery of his salary or wages under section 33-C(2). His demotion or dismissal may give rise to an industrial dispute which may be appropriately tried, but once it is shown that the employer had dismissed or demoted him, a claim that the dismissal or demotion is unlawful and, therefore, the employee continues to be the workmen of the employer and is entitled to the benefits due to him under a pre-existing contract, cannot be made under section -33-C(2).” This, no doubt, is a case where the fourth respondent claimed to have been retrenched from service. I have already held that, in the absence of a finding that his termination of service was consequent upon the fact that he became a surplus, his claim did not fall within Chapter V-A. He is no longer an employee of the firm ; but he could have raised an industrial dispute on his non-employment. He is relying on his former contract of employment. He will have other remedies to realise his arrears of salary. In my opinion, to such a case, section 33-C(2) will not be applicable for computation of arrears of salary. In fact there appears to have been no dispute as to the quantum of salary per month which the fourth respondent was receiving, and hardly any problem can arise which could justifiably be brought under sub-section (2) of section 33-C No computation of any benefit in terms of money would arise in this case. On that view, the petition is allowed, and the order of the Labour Court is quashed. There will be no order as to costs. V.K. ------------ Petition allowed.