Employer In Relation To Management Of Central Mine Planning And Design Institute Ltd. v. Union Of India
2001-04-06
A.K.PRASAD, VINOD KUMAR GUPTA
body2001
DigiLaw.ai
ORDER V.K. Gupta, C.J. 1. This appeal under Clause 10 of the Letters Patent is directed against the judgment and order dated 26.4.1999, passed by a learned single Judge of this Court on an application under Section 17B of the Industrial Disputes Act, 1947, in a pending writ application filed by the appellant challenging the legality, validity and correctness of an Award passed by the Central Government Industrial Tribunal No. 2, Dhanbad, whereby the respondents workmen were directed to be reinstated with the benefit of payment of back wages. The aforesaid Award was challenged by the appellant in writ petition, being CWJC No. 2406 of 1997( R). 2. Vide judgment and order dated 26.4.1999, under challenge in this appeal. the learned single Judge, while allowing the respondents workmens application under Section 17B of 1947 Act, directed the appellant to pay to them full wages last drawn by them as on the date of termination of the services of the workmen. It may be worthwhile to mention here that the learned Industrial Tribunal while directing reinstatement of the workmen and regularisation of their services also held them entitled to receive 40% of full wages, back wages and other benefits. 3. The main ground, on which the judgment of the learned single Judge has been assailed in this appeal before us, is that, while considering the application under Section 17B of the 1947. Act. the learned single Judge did not take into account at all the basic question that the Award passed by the Industrial Tribunal suffered from a patent error of jurisdiction, inasmuch as there did not exist any relationship of employer and workmen between the parties and since the respondents were not the workmen of the appellant, there could not be any question of the Industrial Tribunal ordering for their reinstatement in the service of the appellant or payment of any back wages at any date. A perusal of the judgment under appeal, does suggest one thing very clearly; The learned single Judge indeed has not considered the aforesaid aspect of the matter at all. 4. The contention of the learned counsel for the appellant before us is very simple. It is that, while deciding an application under Section 17B of the Act, 1947, it is obligatory upon the High Court to consider the ground of challenge to the award.
4. The contention of the learned counsel for the appellant before us is very simple. It is that, while deciding an application under Section 17B of the Act, 1947, it is obligatory upon the High Court to consider the ground of challenge to the award. In so far it relates to the basic jurisdictional aspect or any patent error of law on the face of the Award and if the employer challenging the Award does succeed prima facie in establishing that the Award suffers from some jurisdictional error or a patent error of law on the face of it, Section 17B application should be rejected. On the other hand, the learned counsel for the respondents workmen submitted that a clear interpretation of Section 17B of the Act, 1947 suggests that the Court has no jurisdiction, power, or authority in dealing with the aforesaid question relating to the challenge of an Award; and that whenever an application under Section 17B is filed by a workman, the Court has to pass order directing payment of wages last drawn in favour of the workmen. 5. In the case of Bharat Singh v. Management of New Delhi Tubercluosis Centre, New Delhi and Ors., reported in (1986)2 SCC 614 , their Lordships of the Supreme Court have clearly held that even before Section 17B was enacted. Courts were, in their discretion, awarding wages to workmen when they felt such a direction was necessary but that was only a discretionary remedy depending upon Court to Court. After summing up various historical developments, their Lordships came to the conclusion that by enacting Section 17B the legislature did not confer any new jurisdiction upon the High Courts and the Supreme Court but merely codified in a statutory form a right available to the workman to get back wages, when certain given conditions were satisfied. The following observations in paragraph 8 of the aforesaid judgment of the Supreme Court are relevant for our purposes :-- "It is common knowledge that even before Section 17B was enacted, courts were, in their discretion, awarding wages to workmen when they felt such a direction was necessary but that was only a discretionary remedy depending upon Court to Court. Instances are legion where workmen have been dragged by the employers in endless litigation with preliminary objections and other technical pleas to tire them out.
Instances are legion where workmen have been dragged by the employers in endless litigation with preliminary objections and other technical pleas to tire them out. A fight between a workman and his employer is oftentimes an unequal fight. The legislature was thus aware that because of the long pendency of disputes in tribunals and courts, on account of the dilatory tactics adopted by the employer, workmen had suffered. It is against this background that the introduction of the section has to be viewed and its effects considered." Again at another place in the same judgment, their Lordships observed as under :-- "...... That is not the case with Section 17B. Here it is not the conferment of a new jurisdiction but the codification in statutory form a right available to the workmen to got back wages when certain given conditions are satisfied. There are no words in the Section to compel the Court to hold that it cannot operate retrospectively. Before Section 17B was introduced there was no bar for courts for awarding wages. Of course the workmen had no right to claim it. This section recognizes such a right. To construe it in a manner determinental to workmen would be to defeat its object." 6. The point, therefore, which is required to be considered and determined in this appeal is whether Section 17B of the 1947 Act takes away the power of the High Court under Article 226 of the Constitution of India and is the High Court bound under Section 17B to always pass an order directing payment of wages last drawn by a workman, even if in a given case it prima facie finds that the Award suffers from grave and serious vice of jurisdictional error or any other error of law or facts. Undoubtedly, before the introduction of Section 17B in the Act, the High Courts while dealing with writ petitions relating to the challenges to an award, always had plenary jurisdiction and unfettered power to direct either the stay of the Award or payment of wages to the workmen during the pendency of the proceedings in the High Court. All that Section 17B has done now is to codify this power in a statutory form. 7. In the case before us, of course, the point to be decided is not about the unfettered or plenary powers.
All that Section 17B has done now is to codify this power in a statutory form. 7. In the case before us, of course, the point to be decided is not about the unfettered or plenary powers. The point is as to whether in a given case, where a writ petitioner challenges the Award on the ground of it being a perversity and a nullity in the eyes of law, or being totally without jurisdiction or being based on a patent error of law on the face of the Award, does Section 17B still enjoin upon the High Court the mandatory obligation to pass an order directing payment of wages last drawn to workman and, therefore, does it debar or preclude the High Court from examining and considering the merits of the aforesaid contentions of the writ petitioner in order to decide whether to stay the implementation of the Award or not, or in other words not to allow the prayer of the workmen for payment of wages last drawn to them. There can be cases where the writ petitioners challenge revolves around the very basic jurisdictional aspect of the Award, or otherwise on some legal ground the Award being a nullity in the eyes of law. For instance, a writ petitioner (employer) while challenging the Award can contend that the respondent in whose favour the Award has been passed was never a workman of the writ petitioner and the writ petitioner was never an employer of the respondent and, therefore, there being no relationship of an employer and the workman between the petitioner and the respondent, and on that score no industrial dispute deemed to be in existence between the two of them, no Award in the eyes of law could be validly passed, in other words, if the writ petitioners grievance against the Award is based on and originates from his contention that the person in whose favour the award has been passed, was never employed by the petitioner and was not his workman, and, therefore, the writ petitioner was never his employer, is the High Court precluded from examining the merits of such contention.
If, on examination the High Court, prima facie, finds merit in the aforesaid contention, does it still have to direct payment of wages last drawn to the workman under Section 17B of the Act and is the High Court powerless in rejecting the respondent-workmans application. Proposing differently, in such a situation does the High Court not have jurisdiction to deny any relief to the respondent-workman under Section 17B of the Act, prima facie, satisfied based on the aforesaid consideration of the merits of the writ petitioners contention that the Labour Court or the Industrial Tribunal had passed a perverse award. 8. In Godrej and Boyce MFG. Co. v. Pr. Lab. Court Madras, reported in (1992) 2 Lab LJ 201, a Full Bench of the Madras High Court held as under :-- "11. Consensus of judicial opinion is that there is no vice in the rule enshrined in Section 17B of the Act inasmuch as it is not unconstitutional and although it does not infringe or makes inroad in any manner into this Courts power under Article 226 of the Constitution of India, it creates a liability upon the employer and conversely, a right in the workman to pay and receive wages last drawn by him inclusive of any maintenance allowance admissible to him under any rule during the period of pendency of the proceedings in the Court with the exception that if during this period or any part thereof he was gainfully employed elsewhere, he should not be entitled to such wages for the period of gainful employment. In Chitram and Co., Ltd. case (supra), it has been rightly stated by a Division Bench of this Court that Section 17B cannot be construed as in any manner taking away or fettering the plenary powers of the High Court under Articles 226 and 227 of the Constitution of India, to make appropriate orders taking note of the relevant facts. That appropriate order will invariably be to the aid of the workman for a payment of fully wages pending proceedings in the Court unless the award is demonstrated to be a nullity or made without jurisdiction.
That appropriate order will invariably be to the aid of the workman for a payment of fully wages pending proceedings in the Court unless the award is demonstrated to be a nullity or made without jurisdiction. The unfettered power of the Court under Article 226 of the Constitution cannot be used to destroy the statutory right granted to a workman under Section 17B of the Act, i.e., a right pendente lite which has been recognised, as well have seen to remove the hardship and to protect the interests of the workman. The workman cannot be left uncared to suffer a total deprivation of wages merely because the employer has chosen and accordingly initiated a proceeding under Articles 226 and 136 of the Constitution of India. This beneficial legislation that operates within a limited sphere is subject to conditions laid down by the section itself and that the section nowhere lays down that in extreme cases where it is demonstrated that the award passed is either without jurisdiction or is otherwise a nullity, the High Court or the Supreme Court is debarred from exercising its powers under Articles 226 and 136 of the Constitution. 12. Before we conclude and answer the reference, we feel constrained to observe that any challenge to the award on the ground that it is without jurisdiction or is otherwise nullity alone will not be sufficient to suspend the operation of Section 17B of the Act. The final adjudication in a case where the award is without jurisdiction or is otherwise a nullity shall ordinarily meet the ends of Justice. The workman, who shall be waiting for the implementation of the award during the pendency of the proceedings, however, shall receive only the wages at the rate last paid for the period of the pendency of the proceeding in the Court. It is not a burden of any serious consequence upon the employer, but will be a deprivation of a sort which may cause havoc to the workman and his family. If we proceed on the footing that the Courts power to make the final order includes the power to make an interim order, then we may say, the power will extend to Suspending the liability of the employer under Section 17B of the act and accordingly the right of the workman to receive wages pendente lite.
If we proceed on the footing that the Courts power to make the final order includes the power to make an interim order, then we may say, the power will extend to Suspending the liability of the employer under Section 17B of the act and accordingly the right of the workman to receive wages pendente lite. But, this will be possible in the nearest of the rare cases. Otherwise, it will defeat the very purpose for which this section has been introduced in the Act. There shall be any number of employers/managements, who shall successfully contrive petitions and proceedings challenging the award on some such grounds as the award being without jurisdiction or a nullity. Courts cannot afford to be manipulated and allow the management/employer to use the interim order as a weapon to avoid such a statutory liability. Some error of fact or even some error of law alone will not thus be enough to issue any interim order. If, however, the error is such that goes to the root of the jurisdiction of the Tribunal and the Court has got sufficient materials to ignore the effect of Section 17Bof the Act, the Court may decline to order payment of wages pendente file. The Bombay High, Court in the case of ELPO International Ltd. v. K. B. Joshi and Ors., (supra), has indicated this caution the words, in para 8 (p. 215) that : ".......Extreme cases where it is demonstrated that the award passed is either without jurisdiction or is otherwise a nullity......." the Court can decline to make an order in terms of Section 17B of the Act. The words "or grossly erroneous or perverse" in that judgment and in the judgment of the Division Bench of this Court in Chitram and Company, (supra), have to be understood only to mean illustratively when the Court may treat the award a nullity." 9. In the case of Dena Bank v. Kirtikumar T. Patel, reported in (1999) 2 SCC 106 , their Lordships of the Supreme Court held as under :-- "16.
In the case of Dena Bank v. Kirtikumar T. Patel, reported in (1999) 2 SCC 106 , their Lordships of the Supreme Court held as under :-- "16. In Elpro International Ltd. v. K.B. Joshi, the Division Bench of the Bombay High Court was dealing with the challenge to the validity of the provisions in Section 17B on the ground that the same are vague and arbitrary inasmuch as no provision 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 contentions. It was held that the absence of a provision as to what would happen to the amount paid under Section 17B 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 17B is in the nature of subsistence allowance that is payable under Section 10A 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 17B 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 employed and had been receiving adequate remuneration.
The High Court has observed that Section 17B nowhere lays down that in extreme cases if it is demonstrated that the 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 17B does not in any way encroach upon or override the powers of the High Court under Article 226 and this Court under Article 136 of the Constitution." Elsewhere in the same judgment their Lordships held as under :-- "23. As regards the powers of the High Court and the Supreme Court under Articles 226 and 136 of the Constitution, it may be stated that Section 17B, by conferring a right on the workman to be paid the amount of full wages last drawn by him during the pendency of the proceedings involving challenge to the award 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 an 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 17B and while giving the direction, the Court may also give directions regarding refund or recovery of the excess amount in the event of the a ward being set aside. But we are unable to agree with the view of the Bombay High Court in Elpro International Ltd. that in exercise of the power under Articles 226 and 136 of the Constitution, an order can be passed denying the workman the benefit granted under Section 17B. The conferment of such a right under Section 17B cannot be regarded as a restriction on the powers of the High Court or the Supreme Court under Articles 226 and 136 of the Constitution." 10. We are in respectful agreement with the view expressed and the ratio laid down by the Full Bench of Madras High Court in Godrej and Boyce, (supra).
We are in respectful agreement with the view expressed and the ratio laid down by the Full Bench of Madras High Court in Godrej and Boyce, (supra). Similarly in Dena Bank, (supra) their Lordships of the Supreme Court asserted once again the fact that basic power still originates from Article 226 of the Constitution. On a consideration of all the relevant aspects of the matter, therefore, our view is that Section 17B of the Act does not take away the unfettered power and plenary jurisdiction of the High Court conferred upon it under Article 226 of the Constitution and that Section 17B of the Act has to be read with Article 226 of the Constitution. We are of the view, therefore, that whenever a writ petitioner challenges an award passed by a Labour Court or an Industrial Tribunal and raises contentions concerning the very basic jurisdictional aspects of the Award or brings to the notice of the Court some patent error of law apparent on the face of the award and thus satisfies the Court, prima facie, with reference to the merits of the aforesaid contentions (duly supported by the material on record) that the Labour Court or the Industrial Tribunal erred in passing the Award (award can thus be termed as a perversity or nullity in the eye of law) merely because Section 17B is there on the Statute Book, there is no mandatory requirement that even in such cases where the High Court, prima facie, is satisfied about such illegality in the Award, it must pass an order directing the writ petitioner to pay wages last drawn to the respondent during the pendency of the proceedings in the High Court. We have thus no hesitation in saying that there can be cases where despite Section 17B being there on the State Book the High Court can decline to grant relief paying wages last drawn to a person. At the same time we must hasten to add that cases where the High Court may decline to pass an order under Section 17B of the Act, have to be the rarest of the rare. Granting relief under Section 17B of the Act and passing order directing payment of wages last drawn, is generally the rule; refusing to grant relief under Section 17B an exception, as it would be in the rarest of the rare cases.
Granting relief under Section 17B of the Act and passing order directing payment of wages last drawn, is generally the rule; refusing to grant relief under Section 17B an exception, as it would be in the rarest of the rare cases. The cases may be only those where an award is challenged on the basic issue of jurisdictional error or errors apparent on the face of the Award. One instance of jurisdictional error can be about the absence of the relationship of workman and the employer between the parties. If the writ petitioner challenging the Award before the High Court genuinely, bona fide, seriously and gravely raises the question of absence of this relationship and the High Court is satisfied, prima facie in full measure with reference to such contentions of the writ petitioner, which have to be duly supported by the material on record and the High Court comes to a prima facie conclusion that indeed very serious and grave doubts do exist with respect to the question of such relationship between the parties, it can refuse to pass an order under Section 17B of the Act, thus declining to issue a direction to the writ petitioner to pay wages last drawn to the respondent. Since the satisfaction of the High Court on this score has to be prima facie very clear, it goes without saying that while declining to grant relief under Section 17B of the Act, we are required to act with utmost circumspection. 11. A perusal of the judgment of the learned single Judge under challenge in this appeal as noticed in the beginning, does suggest that the learned Single Judge did not consider the question as raised by the appellant that between itself and the respondent-workman there was no relationship of the employer and workman and on that score the Award of the Tribunal was bad in the eyes of law. In this appeal we are confronted in this consideration process on a pure question of law and hence we have not at all gone into the merits of the appellants contention as raised before the learned Single Judge. We are, therefore, not expressing any views on the merits of such contention. The issue is left open to be decided by the learned Single Judge. 12. The appeal is allowed and the judgment under appeal is set aside.
We are, therefore, not expressing any views on the merits of such contention. The issue is left open to be decided by the learned Single Judge. 12. The appeal is allowed and the judgment under appeal is set aside. The learned Single Judge shall reconsider the application under Section 17B of the Act in the light of the aforesaid observations and pass appropriate orders thereupon. The matter shall be listed before the learned Single Judge in the week commencing 23rd April, 2001. We hope and trust that Section 17B application shall be disposed of by the learned Single Judge very very expeditiously. No order as to costs. 13. Appeal allowed.