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Allahabad High Court · body

1993 DIGILAW 167 (ALL)

UTTER PRADESH CO-OPERATIVE BANK LTD. v. PRESCRIBED AUTHORITY

1993-03-02

J.K.MATHUR

body1993
J. K. MATHUR, J. ( 1 ) THIS petition seeks quashing of a decision of the prescribed Authority under the payment of Wages Act, Lucknow, passed on 12-11-1990, the decision of the VIIth Additional District Judge in an appeal passed on 13-11-1991 and (he decision of the authority dated 16-12-1991 in addition to the proceedings pending before the prescribed Authority in case bo, 265 of 1991. ( 2 ) THE opposite party no. 2 Rana Pratap Singh started working with the petitioner in September, 1983 as a clerk. His employment was terminated on 31-3-1985. He raised a dispute under the U. P. Industrial Disputes Act, 1947. By the award dated 30-3-1987 the termination of opposite party no. 2 was found to be illegal and he was directed to be treated in service and entitled to fifty percent of back wages, He then approached the petitioner-bank for, being given the employment and offered any deduction being made from the wages. He allowed to join the services of the bank on the stipulation that the period of his absence was to be considered as leave without pay. He thereupon joined the bank on 27-5-1987. However, in January, 1988 he moved the prescribed Authority under the Payment of Wages Act asking for various, allowances, bonus and exgratia and also annual increments payable to him. This petition was contested but the Prescribed Authority allowed this application by an order passed on 12-11-1990 to the extent of requiring an amount of Rs, 3811. 87 p. and a similar amount as damages in addition to an amount of Rs. 300/- as costs. An appeal filed against it was dismissed by the Additional district Judge. The opposite party employee moved another application befoae the Prescribed Authority claiming over-time wages payable to him. After contest this application was also allowed by the Prescribed Authority on 16-12-1991 allowing an amount of Rs. 19310. 15 P. as arrears of wages, a similar amounts as damages and an amount of Rs. 500/-as cost. ( 3 ) THE opposite party has moved still another application before the authority for being awarded his wages for the period from January, 1988 to March, 1991, these proceedings are pending before the prescribed authority. ( 4 ) THE petitioner also moved an application for amendment of writ petition to challenge the award passed by the labour Court on 7-5-1987. ( 4 ) THE petitioner also moved an application for amendment of writ petition to challenge the award passed by the labour Court on 7-5-1987. The main contention raised on behalf of the petitioner is that the award of the Labour Court is bad because the opposite party No. 2 had been illegally appointed and the petitioner had a right to discharge him and terminate his services and in this situation he did not have any right to continue in service much less right to be regularized. In these circumstances the provisions of section 6-N were not attracted and the termination of opposite party No. 2, could not be held to be illegal. ( 5 ) THE orders passed by the payment of wages were challenged only in respect of the wages ordered to be paid to the opposite party No. 2 for the period between 31-3-1985 and 27-5-1987 firstly on the ground that there was no deduction or delay in the payment of wages and, therefore, the provisions of Section 15 (2) were not attracted. It was also urged that the Labour court directed the petitioner to initiate proceedings under Section 6-H (1) of the Industrial Disputes Act and, therefore he could not have approached the Prescribed Authority for recovery of amount. A ground was also raised about the competence of the payment of wages Authority to adjudicate about the right of opposite party No, 2 to get the wages in view of fact that he had agreed to permit deductions from the wages awarded to him by the Labour Court. Lastly the recovery of amounts payable to opposite party No. 2 as wages for the period between his termination and reinstatement was said to be barred because of the aforesaid representation of opposite party No. 2 giving rise to the promissory estoppel to prevent him from claiming the wages for that period. ( 6 ) THE lenrned counsel for the parties were heard. ( 7 ) SRI N. K. Seth appearing on behalf of petitioner bank urged that recruitment to the petitioners society was regulated by the provisions of U. P. Co-operative Societies Act and the Rules made thereunder according to which all the appointments have to be made by U. P. Co-operative Institutional service Board. It was urged that the opposite party having admittedly not been so appointed had no right to hold the post. It was urged that the opposite party having admittedly not been so appointed had no right to hold the post. His appointment being illegal if his services were terminated, it would not attract the provisions of Section 6-N of Industrial Disputes Act. ( 8 ) FOR this reliance was placed on the case of Vlrendera Pal Singh v. District Assistant Registrar ( 1980 (4) SCC 109 ). In this case the question of recruitment to the Co-operative societies under the aforesaid Act has been discussed and it has been held ;"if despite the constitution of the Board and the issuance of administrative instructions some co-operative societies chose to make appointments, such appointments have necessarily to be held to be invalid. " ( 9 ) THUS in view of above the appointment of the petitioner was urged to be invalid. Reliance was also placed on the case of Dhiraj Ghosh v. Union of India ( AIR 1991 SC. 73 ). In this case it has been held that if a person is appointed to a temporary post likely to be continued for indefinite period, he cannot be deemed to have been confirmed automatically after non-extension of period of probation. ( 10 ) THIS decision does not have any relevance in the present case because opposite party No. 2 never claimed either regularization or confirmation on the post that he is holding. ( 11 ) RELIANCE was also placed on the case of State of Harvana v. Piara Singh ( 1992 (4) SCC 118 ) and Delhi Development Horticulture Employees Union v. Delhi Administration ( AIR 1992 SC. 789 ). These cases also related to the right of persons to be regularized or confirmed in service and their liability to be discharged or terminated. As would be discussed presently these cases dp not have a bearing upon the validity of the decision of the Labour Court. ( 12 ) A perusal of the judgment of the Labour Court would show that the termination of the opposite party was found to be illegal and he was directed to be reinsated with back wages mainly on the ground that petitioner had not complied with the conditions prescribed by Section 6-N of U P. Industrial Disputes Act, 1947. ( 12 ) A perusal of the judgment of the Labour Court would show that the termination of the opposite party was found to be illegal and he was directed to be reinsated with back wages mainly on the ground that petitioner had not complied with the conditions prescribed by Section 6-N of U P. Industrial Disputes Act, 1947. ( 13 ) EVEN assuming that the opposite party was appointed not in accordance with law and was liable to have his services terminated, whenever the services of any person are terminated otherwise than by way of disciplinary action or voluntary retirement or on reaching the age of superannuation, it would amount to retrenchment as defined under Section 2 (s) of U. P. Industrial Disputes Act and if such a person has been in continuous service for a period not less than one year under the employer, he cannot be retrenched unless the conditions prescribed by Section 6-N are complied with. ( 14 ) SECTION 6-N does not relate to the right of person to continue in " service or liability to be discharged. If a person is entitled to continue in service as of right, termination of his services may be against the provisions of law or agreement which entitled him to continue. However, even where the person is not so entitled to continue, even then his services cannot be terminated unless such a termination is covered by any of the aforesaid clauses, without complying with the provisions of Section 6-N. The conditions contained in Section 6-N are conditions precedent to retrenchment and the retrenchment affected without complying with these conditions would render retrenchment itself illegal. ( 15 ) THUS even if appointment of opposite Party No. 2 was illegal and he was liable to be retrenched, which are non-factors for the application of section 6-N he would still be entitled to the retrenchment compensation and notice if he fulfils the only qualification of having been in continuous service for one year with the employer, such continuous service being the one as defined in the U. P. Industrial Disputes Act. ( 16 ) APPLICATION of Section 6-N does not depend upon the nature of employment, it being either temporary, ad-hoc or permanent nor does it confer any rights in regard to the conditions of service. ( 16 ) APPLICATION of Section 6-N does not depend upon the nature of employment, it being either temporary, ad-hoc or permanent nor does it confer any rights in regard to the conditions of service. It merely provides that whenever a person is retrenched, having put in requisite period of service, he would be entitled to receive certain amount of compensation. The object of this provision is merely to give him some relief as has been said in the case of Indian Hume Pipe Co. Ltd. v. The Workmen ( AIR 1960 SC 251 ) :"as the expression "retrenchment compensation" indicates it is compensation paid to a workman on his retrenchment and it is intended to give him some relief and to soften the rigour of hardship which retrenchment inevitable causes. The retrenched workman is, suddenly and without his fault, thrown on the street and has to face the grim problem of unemployment. At the commencement of his employment a workman naturally expects and looks forward to security of service spread over a long period but retrenchment destroys his hopes and expectations. The object of retrenchment compensation is to give partial protection to the retrenched employee and his family to enable them to tide over the hard period of unemployment". In view of above the various cases cited on behalf of the petitioner that the period of 240 days does not qualify a person either to be regularized or confirmed and that a person who has been appointed against the provisions of law would have his appointment invalid and, therefore, his services are liable to be terminated, are all the cases which spell out the rights relating to the term of service. However, if in accordance with the terms of service or other statutory conditions a persons services have to be terminated and before such termination that person has become qualified as required by the provisions of section 6-N of U. P. Industrial Disputes Act, he would be entitled to get compensation. The payment of compensation has been rendered mandatoty and non-compliance with the payment of compensation proceeding the retrenchment renders retrenchment itself invalid and inoperative See State of Bombay v. Hospital Mazdoor Sabha ( AIR 1960 SC 610 ). ( 17 ) SECTION 6-N does not in itself confer any right of retrenchment nor does it distinguish justified or unjustified retrenchment. The payment of compensation has been rendered mandatoty and non-compliance with the payment of compensation proceeding the retrenchment renders retrenchment itself invalid and inoperative See State of Bombay v. Hospital Mazdoor Sabha ( AIR 1960 SC 610 ). ( 17 ) SECTION 6-N does not in itself confer any right of retrenchment nor does it distinguish justified or unjustified retrenchment. It concerns itself only with the factum of retrenchment in respect of an employee who fulfils the qualifications prescribed by this provision and if it is so the employer is required to pay the retrenchment compensation. If retrenchment compensa- t ion is not paid, the retrenchment itself becomes invalid. ( 18 ) IN the present case it was also urged that the appointment of opposite party was valid only upto 31-3-1985 and, therefore, the subsequent non-employment did not amount to retrenchment. ( 19 ) THIS argument is not available to the petitioner because the proviso to clause (a) of section 6-N does away with the necessity of notice only when the retrenchment is under an agreement which specifies a date for termination of service. This necessarily implies that the provision of retrenchment is applicable even to the persons whose services stand terminated because of a date having been specified upto which the person has to hold the employment. In such a case the only concession available is that he need not be given a notice required by clause (a) of section 6-N yet he would be entitled to the compensation provided for in clause (b) and service of notice as mandated by clause (c) of section 6-N. ( 20 ) IN the case of State Bank of India v. Shri N. Sundara Money ( AIR 1976 SC 1111 ) the employment was for a fixed period and was to automatically cease on a date specified. This was also held to be retrenchment attracting the provisions of Section 25-F of Industrial Disputes Act which corresponds to Section 6-N of U. P. Industrial Disputes Act. The termination without payment of retrenchment compensation was held to be invalid. In the case of Santosh Gupta v. State Bank of Patiala, ( AIR 1980 SC 1219 ) this provision came up for interpretation again when the services of the petitioner were terminated in accordance with rules for his having not been able to pass an examination during probation. The termination without payment of retrenchment compensation was held to be invalid. In the case of Santosh Gupta v. State Bank of Patiala, ( AIR 1980 SC 1219 ) this provision came up for interpretation again when the services of the petitioner were terminated in accordance with rules for his having not been able to pass an examination during probation. Further discussing the various authorities, including the case of N. S. Money (Supra) the Supreme court held,". . . AS a result of our discussion, that the discharge of the workman on the ground she did not pass the test which would have enable her to be confirmed was retrenchment within the meaning of Section 2 (00)and, therefore, the requirements of Section 25-F had to be complied with. " ( 21 ) THUS in the present case neither the nature of employment nor the fact that the employment was to terminate on a given date in accordance with the contract would enable the petitioner to escape from the operation of section 6-N of U. P. Industrial Disputes Act as either of the two are not factors relevant to determine the applicability of Section 6-N. Undisputedly the opposity party was in the employment and had worked for more than 240 days in the year preceding the date of retrenchment and was not terminated either as a result of any disciplinary proceedings or as a consequence of voluntary retirement or retirement on reaching the age of superannuation. In these circumstances, the findings of the Industrial Tribunal about the order of termination being invalid are not assailable. ( 22 ) NEXT contention raised on behalf of petitioner was that the opposite party had agreed to any deductions that may be made from his salary and, therefore, the order passed by the petitioner that the period of absence would be treated as leave without pay is in pursuance of said agreement and it was not open to the opposite party to claim wages for that period. ( 23 ) A copy of application purported to have been moved by opposite party is annexed to the petition being annexure 5. ( 23 ) A copy of application purported to have been moved by opposite party is annexed to the petition being annexure 5. By this he represented that in case No. 125 of 1986 the Labour Court had found the order of his termination to be invalid and had asked half the wages for that period to be paid to him, which decision had been informed by him to the petitioner. He after pointing out personal problems went on to state that in case he was appointed on regular basis, any deduction in the interim payment would be accepted by him. ( 24 ) THIS application was moved by him on 19-5-1987. The petitioner passed an order on 25-5-1987 appointing the opposite Party on ad hoc basis and also stating that the period during which the opposite Party was not performing service would be treated to be leave without salary. Even after this the opposite party claimed wages for this period. ( 25 ) WHAT was offered by the opposite party was only a deduction in the interim payment of wages and that too on his being appointed on regular basis. The petitioners did not appoint him on regular basis which perhaps they could not do without the opposite Party having been selected by the co-operative Institutional Service Board as discussed above and again they did not make any deductions from the interim payments but did away with the entire payment ordered by the Labour Court by saying that it would be treated as leave without salary. ( 26 ) THE effect of the order of Labour Court was that the order of termination passed against the petitioner effective on 1-4-1985 stood invalidated and the petitioner was to be deemed in continuous service. As the order of termination had been declared to be invalid, the petitioner was firstly entitled to be taken back on that basis and he was also to be deemed to be in service during the period between the date on which his services were terminated and the date on which he actually joined. His right to get the wages was however curtailed to the extent that he was to get only half of the wages payable for the period between the date of retrenchment and the date of taking over again. His right to get the wages was however curtailed to the extent that he was to get only half of the wages payable for the period between the date of retrenchment and the date of taking over again. ( 27 ) ON his joining the nature of his employment would have remained the same as it stood on the date of retrenchment. He would have continued to be an ad hoc employee or even an employe with a defective order of appointment which might have rendered him liable to be terminated. ( 28 ) IN these circumstances it is apparent that the opposite party being out of employment and having not been able to get his salary for more than two years on the date of application wanted the petitioner to take him back in service and also to be given a regular employment For this the opposite party was prepared for any deduction from the interim payment as may be made to him. ( 29 ) HE was prepared to surrender Part of his right of salary on being given a regular appointment. ( 30 ) THE petitioner now claims that he having agreed to a deduction could not now claim the entire amount because of aforesaid representation. ( 31 ) THIS representation of opposite party cannot bind him unless this offer was accepted unconditionally. No binding agreement can come into existence between the parties unless the acceptance is unconditional. Any variation in acceptance renders in a defective acceptance and it does not mature into an agreement unless the varied terms are accepted by the person who had made the inital offer. ( 32 ) THE petitioner did not accept the offer in terms it was made in as much as no regular appointment was given to the opposite party. Also they did not make any deductions from the interim payment but totally disentitled the opposite party from getting any wages whatsoever for the period during which he was not serving the petitioner. Neither of the two terms in the appointment of opposite party were in consonance with the terms offered by the opposite party and, therefore, it does not lay with the petitioner now to say that opposite party is estopped from claiming wages awarded to him by the Labour Court. Neither of the two terms in the appointment of opposite party were in consonance with the terms offered by the opposite party and, therefore, it does not lay with the petitioner now to say that opposite party is estopped from claiming wages awarded to him by the Labour Court. ( 33 ) STILL another reason for not giving effect to his agreement even if there was any agreement is that Section 23 of Payment of Wages Act prohibits contract in respect of a right relating to wages conferred by that Act. ( 34 ) SECTION 7 of Payment of Wages Act provides for a right in a work-mas to get his wages without any deductions. This right of opposite party to get his wages is, therefore; right recognized by Section 7 of Payment of Wages Act and the offer made by the opposite party that any deductions be made from that which were not permissible under the Payment of Wages Act was, therefore, an agreement which could not have beek entered into in view of section 23 of this Act. The agreement ori the basis of letter of opposite party as contained in annexure 5 would become impermissible by law and unenfor-ceable. ( 35 ) THE contention of the petitioner that the opposite party was stopped from claiming the charges is, therefore, untenable. ( 36 ) IT was also urged that these was a promissory estoppel operating against the opposite party in this regard, ( 37 ) THE promissory estoppel also would arise if the opposite party had agreed to do something in future also relying upon that representation, petitioner had acted upon it. N6 such representation was made by the opposite party and in any case even if the deduction of wages stood to be one, the petitioner did not do anything. Thus the action of the petitioner could not be said to have resulted from any representation made by the opposite party as the petitioner was required to do under the judgment of the Labour Court; ( 38 ) THIS, however is one of the most in appropriate cases where the plea of promissory estoppel can even be considered. A promissory estoppel by its very nature is a principle of equity and has always been used when the rigours of contract spell hardship on one or the parties. A promissory estoppel by its very nature is a principle of equity and has always been used when the rigours of contract spell hardship on one or the parties. In this case plea of promissory estoppel is being taken to force an inequitable condition forced on the opposite party by refusing him salary which had been allowed to him by the Labour Court. ( 39 ) THE opposite party is a workman. He had been dut of job for two years inspite of fact that he had been found entitled to hold that job by the Labour Court. The petitioner instead of giving effect to the award of the Court tried to force the opposite party to give up his wages and are now claiming the support of equitable principle of promissory estoppel to perpetrate injustice on the opposite party. In addition the basic reliefs of this principle hot being available in the present cage, the very principle is not available in a situation in which its help is being sought. "the doctrine of promissory estoppel is now well established one in the field of administrative law. This principle has been evolved by equity to avoid injustice. It is neither in the realm of contract nor in the realm of estoppel. Its object is to interpose equity shorn of its from to migrate the rigour of strictlaw". "it is equally settled law that the promissory estoppel cannot be used compelling the Government of a public authority to carry out a representation or promise which is prohibited by law or which was devoid of the authority or power of the officer of the Government or the public authority to make. We may also point out that the doctrine of promissory estoppel being an equitable doctrine, it must yield place to the equity, if larger public interest so requires. . . . . . "it was so stated in Vasant Kumar Radhakishan Vora v. Board of trustees of the port of Bombay (1991 SC 14 ). Thus neither estoppel nor a promissory estoppel is available to the petitioner to defend its action of denying the wages to the opposite party nor is there any contract which authorizes the petitioner to do so. . . "it was so stated in Vasant Kumar Radhakishan Vora v. Board of trustees of the port of Bombay (1991 SC 14 ). Thus neither estoppel nor a promissory estoppel is available to the petitioner to defend its action of denying the wages to the opposite party nor is there any contract which authorizes the petitioner to do so. ( 40 ) IT was also urged that the Payment of wages authority could not take cognizance of the matter firstly because there was no deduction or delay in payment of wages and secondly because. the opposite party had been specifically directed to approach under Section 6-H and, therefore, Payment of Wages Authority could not have had the jurisdiction. ( 41 ) THE amount which were being claimed by the opposite party were the wages payable to him. In addition to it being payable to him as -I remuneration consequent to his retrenchment having been found to be invalid, it was also the remuneration payable to him under the award which by itself, has been given to be included in the term wages in section 2 (vi) of the Payment of Wages Act. ( 42 ) UNDER Section 15 (2) whenever any deductions have been made or the payment of wages has been delayed, a workman can approach the Prescribed authority constituted under the provisions of section 15 (1) of the said Act. ( 43 ) IN this case the order issued by the petitioner saying that the period for which the wages were payable will be treated as leave without pay amounts to be deduction in the wages and, therefore, it lay with the opposite party to approach the payment of wages authority under the aforesaid provision of law. It was also urged on behalf of petitioner that payment of wages authority was not entitled to go into the question of entitlement to wages. ( 44 ) BOTH the aforesaid contentions of petitioner are answered in by i Chagla C. J. , as he then was, in Modern Mills Ltd. v. R, Mangalvedhekar (AIR 1950 Bombay 342 ). In that case the workman claimed bonus while the employer said that they were not liable to pay bonus because of an award. ( 44 ) BOTH the aforesaid contentions of petitioner are answered in by i Chagla C. J. , as he then was, in Modern Mills Ltd. v. R, Mangalvedhekar (AIR 1950 Bombay 342 ). In that case the workman claimed bonus while the employer said that they were not liable to pay bonus because of an award. It was held in that case that the authority constituted under the Payment of Wages Act was competent to go into this question ;"if the contention of the employer is that he is required by the award not to pay the wages, it is for the authority to be satisfied that such a contention is a valid one and in order to determine that he must construe the award and be satisfied that the award on which the employer is relying requires the employer not to pay the bonus. It is impossible to contend, in my opinion, that it is not open to the authority under the Payment of Wages Act to construe the award in order to determine whether the deduction made by the employer was an authorized deduction or not". It may be that the petitioner could initiate proceedings under Section 6-H and specially when he was so directed when he moved an application under Section 6h (2 ). The remedy provided by Section 6-H (1) is, however "without prejudice to another mode of recovery" as contained in that provision itself. Thus it was open to the petitioner to move either under Section 6-H (1) of the Industrial Disputes Actor under Section 15 (2) of Payment of wages Act. If he moved under the Payment of Wages Act, which was a remedy available to him under law, merely because the Labour Court directed him to initiate proceedings under Section 6-H (1) of the Industrial Disputes act, which was also available to him it cannot be said that the jurisdiction of the Prescribed Authority under the Payment of Wages Act was no longer available to him. ( 45 ) THIS contention of the petitioner, therefore, is also not tenable. ( 46 ) THUS considering the contentions raised on behalf of petitioner, there is no reason to interfere with the award of the Labour Court which has now been sought to be challenged after a lapse of almost six years, without there being any explanation for delay. ( 45 ) THIS contention of the petitioner, therefore, is also not tenable. ( 46 ) THUS considering the contentions raised on behalf of petitioner, there is no reason to interfere with the award of the Labour Court which has now been sought to be challenged after a lapse of almost six years, without there being any explanation for delay. The proceedings decided by and pending before the authority constituted under the Payment of Wages Act are also valid and cannot be interfered with by this Court on any of the grounds discussed above. This petition, therefore, fails and is hereby dismissed. Writ dismissed. .