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2011 DIGILAW 3057 (MAD)

FDC Limited Rep. by its D. G. M v. G. Nagarajan

2011-06-29

D.MURUGESAN, K.K.SASIDHARAN

body2011
JUDGMENT :- K.K. SASIDHARAN, J 1. The attempt on the part of a private management to defeat the order passed by the writ Court to pay 17-B wages to the workman, as a condition precedent for granting stay of operation of the award of re-instatement, is the sum and substance of the issue involved in this writ appeal. Background facts: 2. The appellant is a Company engaged in the manufacture and distribution of pharmaceutical products. The first respondent was employed in the said Company as Medical Representative with effect from 1 March, 1983. While he was functioning as such at Tirunelveli, he was transferred to Mumbai as per proceedings dated 5 August, 1998. Since the first respondent failed to honour the order of transfer, disciplinary proceedings were initiated against him, which resulted in his termination. 3. The order of dismissal was unsuccessfully challenged before the Managing Director in his capacity as the Appellate Authority. Thereafter, the first respondent raised an Industrial Dispute. The dispute was registered before the Labour Court, Tirunelveli in I.D.No.121 of 2000. The Labour Court passed an award on 24 November, 2003 whereby and whereunder, the appellant was directed to re-instate the first respondent with continuity of service and 50% backwages. 4. The award of the Labour Court was challenged before the writ Court in W.P.No.11286 of 2004. The appellant also filed an interlocutory application to stay the direction with regard to re-instatement and the further direction to pay backwages. The learned Single Judge as per order dated 26 April, 2004 stayed the operation of the award subject to the condition regarding deposit of back wages besides payment of wages under Section 17-B of the Industrial Disputes Act. 5. The appellant, without complying with the interim order, called upon the first respondent as per their letter dated 15 May, 2004 to join at New Delhi. In the meantime, the first respondent filed a writ petition in W.P.No.15647 of 2004, challenging the award insofar as it negatived the claim regarding full backwages. The first respondent by way of a miscellaneous application prayed for stay of the communication dated 15 May, 2004 relating to the order of transfer. 6. The learned Single Judge as per order dated 8 June, 2004 granted stay of all further proceedings pursuant to the communication dated 15 May, 2004. 7. The first respondent by way of a miscellaneous application prayed for stay of the communication dated 15 May, 2004 relating to the order of transfer. 6. The learned Single Judge as per order dated 8 June, 2004 granted stay of all further proceedings pursuant to the communication dated 15 May, 2004. 7. Subsequently, the appellant filed a memo before the writ Court stating that the matter has been settled between the parties and as such, made a request to post the matter for withdrawal. Accordingly, the writ petition was posted before the learned Judge for the purpose of withdrawal. While permitting the appellant to withdraw the writ petition, the learned Single Judge directed them to comply with the order under Section 17-B of the Industrial Disputes Act for the period from 26 April, 2004 to 22 April, 2010. The writ petition filed by the first respondent in W.P.No.15647 of 2004 was dismissed. 8. The appellant is aggrieved by the direction given by the learned Single Judge to pay wages under Section 17-B of the Industrial Disputes Act, not withstanding the dismissal of the writ petition as "not pressed". Submissions: 9. The learned counsel for the appellant contended that the appellant was not aware of the interim stay granted by the writ Court on 8 June, 2004 in W.P.No.15647 of 2004 staying the operation of letter sent by the appellant on 15 May, 2004 directing the first respondent to join at New Delhi. According to the learned counsel, the management has decided to re-instate the first respondent into service and it was only for the said purpose, a letter was sent on 15 May, 2004. The first respondent obtained stay of operation of the said letter. Therefore, the appellant is not liable to pay wages under Section 17-B of the Industrial Disputes Act for the period from the date of admission till the date of dismissal of the writ petition as "not pressed". It was his further contention that the order of re-instatement was made in strict compliance of the observation given by the Labour Court in paragraph 15 of the award. Therefore, the learned Single Judge was not justified in directing the appellant to pay wages under Section 17-B of the Industrial Disputes Act. 10. The learned counsel for the first respondent submitted that the appellant played fraud on the Court by not complying with the interim order. Therefore, the learned Single Judge was not justified in directing the appellant to pay wages under Section 17-B of the Industrial Disputes Act. 10. The learned counsel for the first respondent submitted that the appellant played fraud on the Court by not complying with the interim order. The letter sent by the appellant on 15 May, 2004 does not contain any reference about the writ petition filed by the management and interim stay granted by the Court. It was only to defeat the order passed by the Court to pay wages under Section 17-B of the Industrial Disputes Act, such a letter was sent on 15 May, 2004. The learned counsel disputed the so called settlement arrived at between the parties as contained in the memo filed before the Court for the purpose of posting the matter for withdrawal. In short, it was the contention of the learned counsel that the first respondent was out of employment for the period indicated in the order passed by the learned Single Judge and as such, the appellant is bound to pay wages under Section 17-B of the Industrial Disputes Act for the said period. Discussion: 11. The award of the Labour Court directing re-instatement of the first respondent was made on 24 November, 2005. The first respondent appears to have sent a letter to the appellant enclosing a copy of the award with a request to re-instate him into service. The appellant on their part filed a Writ Petition on 21 April, 2004 in W.P.No.11286 of 2004 challenging the award of the Labour Court. The appellant by way of a miscellaneous application requested the Court to grant stay of the operative portion of the award, including payment of backwages. The learned Single Judge as per order dated 26 April, 2004 granted stay of operation of the award subject to payment of full backwages. A further direction was given to pay wages under Section 17-B of the Industrial Disputes Act. The appellant was granted six weeks time to deposit the backwages and to comply with the direction regarding payment of 17-B wages. 12. The appellant as per their communication dated 15 May, 2004 called upon the first respondent to join at New Delhi. The said letter does not contain any reference about the writ petition filed by the management, assailing the correctness of the award passed by the Labour Court. 12. The appellant as per their communication dated 15 May, 2004 called upon the first respondent to join at New Delhi. The said letter does not contain any reference about the writ petition filed by the management, assailing the correctness of the award passed by the Labour Court. It was a very cleverly worded letter. The first respondent was asked to undergo training at New Delhi. The appellant made a condition in that letter that the backwages would be paid to the first respondent on his joining service at New Delhi. Therefore, the payment of backwages was a conditional one, the condition being, joining at New Delhi. 13. The learned counsel for the appellant contended that the conditional order made by the learned Single Judge dated 26 April, 2004, made the appellant to sent the letter dated 15 May, 2004 expressing their willingness to re-instate the first respondent. The said argument has to be brushed aside summarily. The order of stay was granted on 26 April, 2004. The appellant was granted six weeks time to pay the amount. However, even before the expiry of the time granted for deposit of backwages and payment of 17-B wages, the appellant has sent a letter to the first respondent to join at New Delhi. In fact, the earlier proceedings before the Labour Court was also on account of the transfer of the first respondent to Mumbai and his failure to join at the transferred place. 14. It is true that the Labour Court has made an observation in paragraph 15 of the award admitting the management's right to transfer an employee. The said observation has to be read in the light of the background facts. The Labour Court was considering the failure on the part of the first respondent to join at Bombay. It was only in such circumstances, the Labour Court observed that it is left to the management to post the first respondent anywhere which it considers best after re-instatement. Therefore, the word "after re-instatement" assumes significance. 15. The first respondent was transferred from Tirunelveli to Mumbai and this transfer resulted in his termination ultimately. The direction to re-instate the first respondent was given by way of relief in the writ petition. Therefore, the order of re-instatement has to be treated as re-instatement at the original place. It is open to the appellant to transfer him after re-instatement. The first respondent was transferred from Tirunelveli to Mumbai and this transfer resulted in his termination ultimately. The direction to re-instate the first respondent was given by way of relief in the writ petition. Therefore, the order of re-instatement has to be treated as re-instatement at the original place. It is open to the appellant to transfer him after re-instatement. The order passed by the Labour Court has to be taken in its entirety and in the light of the factual situation. 16. It is not as if the appellant was not aware of the position and the course of action to be taken in such matters. The offer letter dated 15 May, 2004 was not a bona fide one. It was with so many conditions. The failure on the part of the appellant to mention the writ petition filed by them and the order of stay granted by this Court against re-instatement was conveniently omitted. The payment of backwages was also made conditional on joining at New Delhi. The offer was made with a definite purpose and not with a good intention. The appellant was aware that the cause of action for the earlier proceedings was the failure on the part of the first respondent to join at Bombay. Therefore, the appellant expected that the first respondent will not join at New Delhi. In case he has not joined at New Delhi, there was no question of payment of backwages. It was only with that hidden agenda the appellant has issued the conditional order of re-instatement to the first respondent. 17. The writ petition was not withdrawn before issuing the letter dated 15 May, 2004. Therefore, on the one hand, the management wanted the writ petition to be kept pending and on the other hand, they want to project a case that they have offered employment to the first respondent and as such, there was no necessity to pay wages under Section 17-B of the Industrial Disputes Act. The factual matrix clearly shows that the letter dated 15 May, 2004 was a clear device invented by the management for denying wages under Section 17-B of the Industrial Disputes Act to the first respondent. Section 17-B – Labour Welfare Provision: 18. Section 17-B of the Industrial Disputes Act was introduced with a specific purpose. The factual matrix clearly shows that the letter dated 15 May, 2004 was a clear device invented by the management for denying wages under Section 17-B of the Industrial Disputes Act to the first respondent. Section 17-B – Labour Welfare Provision: 18. Section 17-B of the Industrial Disputes Act was introduced with a specific purpose. The objects and reasons for incorporating this provision was indicated in the preamble thus: “When Labour Courts pass award of reinstatement, these are often contested by an employer in the Supreme Court and High Courts. It was felt that the delay in the implementation of the award causes hardship to the workman concerned. It was, therefore, proposed to provide the payment of wages last drawn by the workman concerned, under certain conditions, from the date of the award till the case is finally decided in the Supreme Court or High Courts." 19. The payment of full wages to the workman under Section 17-B during the pendency of the writ petition is a statutory right. The payment is in the nature of subsistence allowance. This provision appears to have been made with a social objective. It was intended to protect the interest of the workmen during the pendency of the proceedings before the High Court or the Supreme Court, in spite of granting order of re-instatement by the Labour Court. The Parliament was aware that the workers would not be in a position to enjoy the fruits of the award passed by the Labour Court or Tribunal directing their re-instatement on account of the prolonged litigation at the instance of the management. During the period of suspension, the management would have paid subsistence allowance. The payment under Section 17-B of the Industrial Disputes Act stands on a high pedestal. The management was required to pay full wages to the workmen, in view of the denial of employment, in spite of the order of re-instatement passed by the Labour Court or Tribunal. Therefore any attempt on the part of the management to avoid statutory payment should be viewed seriously. The question of bona fides should also be looked into in case the offer to give employment was only a device to get over the direction to pay wages under Section 17-B of the Industrial Disputes Act. 20. Therefore any attempt on the part of the management to avoid statutory payment should be viewed seriously. The question of bona fides should also be looked into in case the offer to give employment was only a device to get over the direction to pay wages under Section 17-B of the Industrial Disputes Act. 20. The Supreme Court in Dena Bank v. Kiritikumar T. Patel, 1998(1) LLN 375 = (1999) 2 SCC 106 , indicated the scope of Section 17-B thus: "21. As indicated earlier Section 17-B has been enacted by Parliament with a view to give relief to a workman who has been ordered to be reinstated under the award of a Labour Court or the Industrial Tribunal during the pendency of proceedings in which the said award is under challenge before the High Court or the Supreme Court. The object underlying the provision is to relieve to a certain extent the hardship that is caused to the workman due to delay in the implementation of the award. The payment which is required to be made by the employer to the workman is in the nature of subsistence allowance which would not be refundable or recoverable from the workman even if the award is set aside by the High Court or this Court. Since the payment is of such a character, Parliament thought it proper to limit it to the extent of the wages which were drawn by the workman when he was in service and when his services were terminated and therefore used the words “full wages last drawn”. 21. In Workmen of Hindustan Vegetable Oils Corporation Ltd., v. Hindustan Vegetable Oils Corporation Ltd., and others ( 2000(2) LLJ 792 ), the Supreme Court underlined the necessity to dispose of the application under Section 17-B with great promptitude and well before the disposal of the writ petition. This shows the concern of the Court in the matter of payment of wages under Section 17-B of the Industrial Disputes Act. 22. We are convinced that the offer made by the appellant through their letter dated 15 May, 2004 was not a bona fide one and it was intended only to defeat the claim of the first respondent under Section 17-B of the Industrial Disputes Act. 22. We are convinced that the offer made by the appellant through their letter dated 15 May, 2004 was not a bona fide one and it was intended only to defeat the claim of the first respondent under Section 17-B of the Industrial Disputes Act. Things would have been different in case the appellant has made this offer immediately after passing the award by the Labour Court on 24 November, 2003. The very fact that the offer was made only after granting the interim order of stay by the writ Court on condition, shows the evil intention of the appellant to avoid payment of wages under Section 17-B of the industrial Disputes Act. 23. There is no dispute that the appellant has not paid wages under Section 17-B of the Industrial Disputes Act. Therefore, the learned Single Judge was correct in his observation, that as a condition precedent for dismissal of the writ petition as "not pressed" the appellant has to pay backwages on the basis of the order passed by the Court on 26 April, 2004. We do not find any reason to set aside the direction regarding payment of wages during the pendency of the proceedings. 24. While admitting the writ petition in W.P.No.11286 of 2004, the writ Court has granted interim stay. Subsequently, the appellant wanted the Court to dismiss the writ petition as "not pressed". Necessarily the Court has to pass an order with respect to the interim proceedings. The Court found that the appellant has not complied with the interim order. The learned Single Judge, therefore, directed the appellant to pay back wages pursuant to the earlier order, so as to give a quietus to the whole issue. The learned Judge was fully justified in directing the appellant to pay wages under Section 17-B for the relevant period. 25. We consider it appropriate to quote the following observation of the Supreme Court in Harjinder Singh v. Punjab State Warehousing Corporation, 2010(1) Scale 613 = (2010) 3 SCC 192 : 31. It need no emphasis that if a man is deprived of his livelihood, he is deprived of all his fundamental and constitutional rights and for him the goal of social and economic justice, equality of status and of opportunity, the freedoms enshrined in the Constitution remain illusory. It need no emphasis that if a man is deprived of his livelihood, he is deprived of all his fundamental and constitutional rights and for him the goal of social and economic justice, equality of status and of opportunity, the freedoms enshrined in the Constitution remain illusory. Therefore, the approach of the courts must be compatible with the constitutional philosophy of which the directive principles of State policy constitute an integral part and justice due to the workman should not be denied by entertaining the specious and untenable grounds put forward by the employer—public or private." Conclusion: 26. The appellant is directed to pay 17-B wages to the first respondent for the period in question as expeditiously as possible and in any case, within four weeks from today. The writ appeal is dismissed with cost quantified at Rs.10,000/-. Consequently, the connected MP is closed. No costs.