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2009 DIGILAW 2837 (ALL)

HINDUSTAN ALUMINIUM CORPORATION LTD. ,MIRZAPUR v. DY. LABOUR COMMISSIONER, PIPRI, MIRZAPUR

2009-08-13

TARUN AGARWALA

body2009
JUDGMENT Hon’ble Tarun Agarwala, J.—The workman lost his lien on his appointment on account of overstay on leave. The workman raised an industrial dispute with regard to his non-employment. The Labour Court, after considering the matter, passed an award directing reinstatement of the workman with back wages. The said award was implemented and the workman was reinstated and back wages was paid by the employer. The workman, not being satisfied with the back wages, filed an application under Section 6-H(1) of the U.P. Industrial Disputes Act for the payment of Rs. 78,875.70 claiming that he was entitled for annual and adhoc increment pursuant to the Award directing reinstatement with back wages. The workman also filed another application claiming Rs. 30,562.71 claiming encashment of earned leave, casual leave, bonus and leave travel assistance pursuant to the award. The petitioner filed his objection stating that the application of the workman was not maintainable nor had the Deputy Labour Commissioner any jurisdiction to decide such a dispute. The petitioner contended that the amount claimed was not wages as defined under Section 2 (y) of the U.P. Industrial Disputes Act nor is it “money due” under a settlement or an award as contemplated under Section 6-H (1) of the U.P. Industrial Disputes Act and consequently the entire proceeding are ex facie illegal and that no amount whatsoever was payable. 2. The Deputy Labour Commissioner, after considering the matter, held that the application was maintainable and that it had the jurisdiction to decide the matter and further found that the workman was entitled to increment, encashment of earned leave, bonus, etc. pursuant to the award of the Labour Court. The petitioner, being aggrieved by the said order and recovery certificate issued by the Deputy Labour Commissioner, has filed two separate writ petitions, which have been clubbed together and are being decided by a common judgment. 3. Heard Sri Ritvik Upadhya, the learned counsel for the petitioner and Sri K.P. Agarwal, the learned Senior Counsel duly assisted by Sumati Rani Gupta, the learned counsel for the respondent workman. 4. The learned counsel for the petitioner submitted that the amount claimed is not a “money due” under an award, and therefore, such amount cannot be calculated under Section 6-H(1) of the U.P. Industrial Disputes Act and that the amount claimed could only be adjudicated under Section 6-H(2) of the U.P. Industrial Disputes Act. 4. The learned counsel for the petitioner submitted that the amount claimed is not a “money due” under an award, and therefore, such amount cannot be calculated under Section 6-H(1) of the U.P. Industrial Disputes Act and that the amount claimed could only be adjudicated under Section 6-H(2) of the U.P. Industrial Disputes Act. The learned counsel further submitted that the amount claimed was not part of wages, and therefore, the application under Section 6-H(1) of the U.P. Industrial Disputes Act was not maintainable. 5. On the other hand, Sri K.P. Agarwal, the learned senior counsel for the workman submitted that the amount claimed was an “entitlement” pursuant to the award and, consequently the Deputy Labour Commissioner was only required to make a verification of the amount by a simple arithmetical calculation which was permissible in a proceeding under Section 6-H(1) of the U.P. Industrial Disputes Act, and therefore, the said application was maintainable. The learned counsel further submitted that the amount claimed, would come under the category of “allowances” which was part of wages, as defined under Section 2(y) of the U.P. Industrial Disputes Act. The learned counsel further submitted that the amount claimed such as leave encashment, increment, etc. were part of the conditions of service, and therefore, would again come within the definition of wages as defined under Section 2(y) of the U.P. Industrial Disputes Act. In support of his contention, the learned counsel placed reliance of the decision of the Supreme Court in the matter of Central Bank of India Ltd. v. P.S. Rajagopalan etc., AIR 1964 SC 743 and another decision of the Supreme Court in the matter of Kays Construction Co. (Private) Ltd. v. State of Uttar Pradesh and others, AIR 1965 SC 1488 . 6. Having heard the parties at some length, the moot question which arises for consideration is whether the amount claimed, namely, increment, encashment of earned leave, casual leave, bonus and leave travel assistance during the period when the workman was out of work is part of wages as defined under Section 2(y) of the U.P. Industrial Disputes Act. For facility, the definition of wages as defined under Section 2(y) of the U.P. Industrial Disputes Act states as under : “2. For facility, the definition of wages as defined under Section 2(y) of the U.P. Industrial Disputes Act states as under : “2. Definitions.— (y) ‘Wages’ means all remuneration capable of being expressed in terms of money, which would, if the terms of employment, expressed or implied, were fulfilled, be payable to a workman in respect of his employment, or of work done in such employment, and includes— (i) such allowances (including dearness allowance) as the workman is for the time being entitled to; (ii) the value of any house accommodation, or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply to foodgrains or other articles; (iii) any travelling concession, but does not include— (a) any bonus; (b) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the workman under any law for the time being in force; (c) any gratuity payable on the termination of his service.” 7. ‘Wages’ as defined in Section 2(y) of the U.P. Industrial Disputes Act is comprehensive and includes such allowances as the workman is, for the time being entitled to. In the case of Bharat Electronics Ltd., Bangalore v. Industrial Tribunal Karnataka, Bangalore and another, 1990 (60) FLR 622, the Supreme Court after considering the judgment of Bennett Coleman’s case and Dilbagh Rai Jarry’s case, 1969 (19) FLR 32 (SC) and 1973 (27) FLR 428 (SC) held that an allowance contemplated under the definition clause of the word “wages” was an allowance which from the term of employment flows as not contingent on actual working is part of wages. The Supreme Court further held that an allowance which was earnable only by active serving was not an allowance which would form part of wages. The Supreme Court held : “Now confluencing the two legal thoughts expressed in Bennett Coleman’s case (supra) and Dilbagh Rai Jarry’s case ( supra), the stream of thought which inevitably gurgles up is that an allowance which from the term of employment flows as not contingent on actual working is part of wages for the purposes of Section 33(2)(b) but an allowance which is earnable only by active serving is not an allowance which will form part of wages within the meaning of the said provision.” 8. In the light of the aforesaid, the question which arises for consideration is whether the amount claimed by the workman would form part of wages as contemplated under Section 2(y) of the U.P. Industrial Disputes Act or not. 9. From the decision of the Supreme Court in Bharat Electronics Ltd. case (supra), it is clear that leave encashment is earnable only by active serving and is not an allowance which formed part of wages. 10. In K.R. Tyagi v. National Textile Corporation and another, 1999 (77) FLR 175, it was held that L.T.C., earned leave and medical reimbursement for the period when the workman was not permitted to work was not part of wages and that the salary was payable upon actual service. 11. In Rajes Jink Ltd. v. Jialal Kapur, 1989 (58) FLR 228, it was held that LTC cannot be calculated under Section 33-C (1) which is pari materia to the provision of Section 6-H(1) of the U.P. Industrial Disputes Act. Similarly U.P. State Electricity Board v. Deputy Labour Commissioner, Agra Region, Agra, 2002 (95) FLR 846 , it was held that encashment of earned leave could not be calculated under Section 6-H (1) of the I.D. Act. 12. In A.P. S.R.T.C. and another v. S. Narsagoud, 2003 (2) SCC 212 , the Supreme Court held that the increment for the period which the workman had not put in active service could not be calculated towards back wages. The Supreme Court held : “We find merit in the submission so made. There is a difference between an order of reinstatement accompanied by a simple direction for continuity of service and a direction where reinstatement is accompanied by a specific direction that the employee shall be entitled to all the consequential benefits, which necessarily flow from reinstatement or accompanied by a specific direction that the employee shall be entitled to the benefit of the increments earned during the period of absence. In our opinion, the employee after having been held guilty of unauthorised absence from duty cannot claim the benefit of increments notionally earned during the period of unauthorised absence in the absence of a specific direction in that regard and merely because he has been directed to be reinstated with the benefit of continuity in service.” 13. In our opinion, the employee after having been held guilty of unauthorised absence from duty cannot claim the benefit of increments notionally earned during the period of unauthorised absence in the absence of a specific direction in that regard and merely because he has been directed to be reinstated with the benefit of continuity in service.” 13. The said decision was followed in A.P. State Road Transport Corporation and others v. Abdul Kareem, 2005 (6) SCC 36 and in the case of I. Laxma Reddy v. Andhra Pradesh State Road Transport Corporation and others, 2007 (13) SCC 415 . 14. In the light of the aforesaid, this Court is of the opinion that the amount claimed towards, increment encashment of earn leave, casual leave, bonus and leave travel assistance allowance was not wages as defined under Section 2(y) of the U.P. Industrial Disputes Act and consequently the said amount could not be claimed in proceedings under Section 6-H(1) of the U.P. Industrial Disputes Act. 15. In view of the aforesaid, the impugned order and the recovery certificate cannot be sustained and are quashed. The writ petition is allowed. 16. In the circumstances of the case parties shall bear their own cost. ————