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2016 DIGILAW 237 (KER)

S. THIRUMALAISWAMY v. MANAGER, CHEMBRA ESTATE

2016-02-29

K.SURENDRA MOHAN, P.V.ASHA

body2016
JUDGMENT : K. Surendra Mohan, J. The appellant who unsuccessfully claimed grant of interest on the amount awarded under Section 33C(2) of the Industrial Disputes Act, 1947 ( for short the 'Act') challenges the judgment of the learned Single Judge in W.P.(C) No.27375/2011. The appellant was a workman under the 1st respondent. He was working as a Group Electrician-cum-Mechanic from 1972 onwards. He was terminated from service in the year 1984. He raised an industrial dispute that was the subject matter of I.D No.22/1984 before the Labour Court, Kozhikode. As per award dated 29-02-1988, the Labour Court ordered reinstatement of the appellant with back wages. Though the appellant was reinstated in service and he joined duty on 21-07-1988, he was not paid his back wages as directed by the Labour Court. 2. In the above circumstances, he filed C.P.No.78/1991 under Section 33C(2) of the Act before the Labour Court, Kannur. As per Ext.P2 order dated 26-02-1993, the Labour Court directed an amount of Rs.1,68,682/- (Rupees One Lakh Sixty Eight Thousand Six Hundred and Eighty Two only) to be paid to the appellant, immediately. According to the appellant, in spite of Ext.P2 order, the amount that was determined by the Labour Court was not paid. Therefore, he approached this Court by filing O.P.No.1892/1995. The said Original Petition was finally disposed of by this Court by Ext.P3 judgment dated 13-06-2005. In the Writ Petition, the appellant had claimed that in view of the inordinate delay in payment of the amount quantified by the Labour Court, he was entitled to claim interest on the amount that was awarded. This Court held that there had been no adjudication on the claim for interest made by the appellant. Therefore, the appellant was directed to institute separate proceedings for enforcing his claim for interest. This Court noticed that, the principal amount had been tendered to the appellant and that he had declined to receive the same. Therefore, it was found that, it was for the appellant to receive the payment and then claim interest in accordance with law. According to the appellant, in spite of Ext.P3 judgment, the amount was not paid. Therefore, the appellant sought for the initiation of Revenue Recovery proceedings for recovery of the amount invoking Section 33C of the Act. Pursuant to Revenue Recovery proceedings initiated, the amount was finally paid on 12-11-2007. However, only the principal amount was paid. According to the appellant, in spite of Ext.P3 judgment, the amount was not paid. Therefore, the appellant sought for the initiation of Revenue Recovery proceedings for recovery of the amount invoking Section 33C of the Act. Pursuant to Revenue Recovery proceedings initiated, the amount was finally paid on 12-11-2007. However, only the principal amount was paid. Since no interest was paid, the appellant filed C.P.No.14/2008 before the Labour Court, Kannur, claiming interest. However, by Ext.P7 order dated 22-07-2011, the claim for interest was disallowed. W.P.(C) No.27375/2011 was filed by the appellant challenging Ext.P7 order. After considering the claim for interest made by the appellant, this Court disposed of the Writ Petition finding that the appellant was entitled to claim interest only for the period from 13-06-2005 to 12-11-2007, that too @ 6% per annum. The appellant is aggrieved by the said judgment. 3. According to Advocate Philip Mathew who appears for the appellant, the workman had been dismissed from service without any justification. It was for the reason that, his termination was set aside and a direction issued, to reinstate him with full back wages. Though the said direction was issued on 29-02-1988, the direction to pay back wages was not complied with. Later on, as per order dated 26-02-1993 of the Labour Court in Ext.P2, the amount was quantified and fixed at Rs.1,68,682/-. Even after quantification, the amount was not paid. The same was finally paid only on 12-11-2007 after Revenue Recovery proceedings were initiated for recovery of the amount. Therefore, it is contended that the appellant is entitled to be paid interest for the period from 29-02-1988 to 12-11-2007. The counsel also placed reliance on various decisions to support his contention that the back wages ordered to be paid to the workman are with the object of restoring to him all that he had lost by virtue of his termination from service. Therefore, any dilution of the quantum that has been determined by the Labour Court either by denial of payment of interest or by reduction thereof would work injustice. 4. Per contra, Adv.Lal K.Joseph who appears for the 1st and 2nd respondents submits that the management had run into trouble in the late 1980's. A Court Receiver had been appointed by the Bombay High Court where recovery proceedings initiated at the instance of the Bank of Tokyo was in progress. 4. Per contra, Adv.Lal K.Joseph who appears for the 1st and 2nd respondents submits that the management had run into trouble in the late 1980's. A Court Receiver had been appointed by the Bombay High Court where recovery proceedings initiated at the instance of the Bank of Tokyo was in progress. Our attention is drawn to Ext.P2 award to point out that, the Court Receiver was also a party to the said proceedings. On 25-05-1990, M/s.T.P.Muraleedharan and Associates, Cochin, had been appointed as agents for payment of the amount due to the appellant. Though the agents had tendered the payment, the same was not received by the appellant on the ground that the interest portion had not been included in the payment. The 2nd respondent who is the present owner had purchased the property in court auction only on 13-10-2000. Therefore, it is contended that non-payment of the amount awarded by the Labour Court as back wages was not willful. The learned counsel also points out that, though O.P.No.1892/1995 was pending before this Court, no action was initiated by the workman by filing a petition or otherwise to recover the amount that had been awarded by the Labour Court. No proceedings for enforcement of the award was instituted before the Labour Court also. Had such proceedings been instituted, it is pointed out that, the award amount could have been recovered by the appellant, much earlier. It was only in O.P.No.1892/1995, the claim for interest was put forward. This Court after considering the claim had relegated the appellant to pursue appropriate proceedings separately. It was taking into account the above aspect that the learned Single Judge has declined to grant interest for the period prior to 13-06-2005, the date of Ext.P3 judgment. Therefore, according to the learned counsel, there are no grounds to interfere with the judgment appealed against. 5. Heard. 6. It is not in dispute that the appellant had been ordered to be reinstated in service by the Labour Court, Kozhikode, as per award dated 29-02-1988 in I.D.No.22/1984 and that, he had been reinstated in service on 21-07-1988. The dispute is confined to non-payment of back wages that was also ordered to be paid. 5. Heard. 6. It is not in dispute that the appellant had been ordered to be reinstated in service by the Labour Court, Kozhikode, as per award dated 29-02-1988 in I.D.No.22/1984 and that, he had been reinstated in service on 21-07-1988. The dispute is confined to non-payment of back wages that was also ordered to be paid. Though the back wages was ordered to be paid by Labour Court on 29-02-1988, we find that quantification of the back wages has taken place only as per Ext.P2 order of the Labour Court, Kannur dated 26-02-1993 in C.P.No.78/1991. As per the said order, the payment was directed to be made immediately. It appears that, the amount had been offered at some point of time thereafter, though the date is disputed. Finally, the appellant filed O.P.No.1892/1995 putting forward a claim for interest on the back wages that were remaining unpaid. After considering the claim of the appellant, this Court in Ext.P3 judgment held as follows: "It seems the amount was offered to the petitioner but petitioner refused to accept it as he was not offered interest. The petitioner's claim for interest is a matter which does not appear to be adjudicated by any authority. Ext.P1 does not award any interest to the petitioner but the direction was to make payment immediately. Therefore, it is for the petitioner to claim interest either in accordance with the statue or by making claim before the company court. However since the amount exclusive of interest is held by M/s.Travancore Malabar Estates, they are bound to make payment to the petitioner. It is for the petitioner to receive the payment and then make claim for interest in accordance with law. The O.P. is disposed of as above." 7. What is evident from the above is that, this Court had relegated the claim of the petitioner to be determined in appropriate proceedings to be separately instituted. It was accordingly that, C.P.No.14/2008 was filed by the appellant claiming interest. The same was instituted after receiving the principal amount on 12-11-2007. It is not in dispute that the said amount was recovered pursuant to Revenue Recovery proceedings that were initiated. It is therefore clear that, despite Ext.P3 judgment the payment had not been made even thereafter. But, the same was delayed up to 12-11-2007 for which, the appellant cannot be blamed. It is not in dispute that the said amount was recovered pursuant to Revenue Recovery proceedings that were initiated. It is therefore clear that, despite Ext.P3 judgment the payment had not been made even thereafter. But, the same was delayed up to 12-11-2007 for which, the appellant cannot be blamed. As per Ext.P7, the Labour Court has disallowed the claim for interest made by the appellant. However, the award has been modified by the judgment appealed against and the appellant has been held entitled to interest for the period from 13-06-2005 to 12-11-2007. We confirm the said findings. 8. This is for the reason that, there is no justification for the delay in payment of the amount of back wages to the appellant, after Ext.P3 judgment. The contention of the management was that the entire amount tendered had not been received by the workman. It was certainly incumbent on respondents 1 and 2 to have paid the amount immediately after Ext.P3 judgment. Since the appellant had not taken any effective measures to recover the amount before the said date, we are not satisfied that denial of interest for the period prior to the said date, requires to be interfered with. We bear in mind the fact that, the order for payment of back wages was issued with the intention of restoring to the workman all that was lost to him by his abrupt termination from service, which has been found to be bad, by the Labour Court. Therefore, the management had an obligation to pay the said amount without delay. The undue delay in payment of said amount therefore, entitles the workman to claim interest. Any amount that is rightfully due to a person, if withheld without any justification should carry interest on presumption that, during the said period, the amount would have been gainfully utilised by the party retaining the same. For the foregoing reasons, we hold that the appellant is entitled to claim interest for the period from 13-06-2005 to 12-11-2007. 9. The learned counsel for the appellant has advanced a claim before us for the rate of interest to be enhanced to 12% per annum. It is pointed out that the workman has retired. He is now aged more than 80 years. 9. The learned counsel for the appellant has advanced a claim before us for the rate of interest to be enhanced to 12% per annum. It is pointed out that the workman has retired. He is now aged more than 80 years. Considering the fact that, there was lack of diligence on the part of the management in making payment of the amount that was awarded by the Labour Court and considering the further fact that the appellant is a workman who had been dismissed from service, whose dismissal was held to be bad by the Labour Court, we enhance the rate of interest stipulated by the judgment of the learned Single Judge and fix the same at 9% per annum. 10. In the result, this Writ Appeal is allowed to the limited extent of modifying the judgment of the learned Single Judge by holding that the appellant is entitled to claim interest on the amount of Rs.1,68,682/- awarded by the Labour Court, Kannur, for the period from 13-06-2005 to 12-11-2007 @ 9% per annum. The Writ Appeal is allowed to the limited extent indicated above. We direct respondents 1 and 2 to pay the amount to the appellant within a period of one month from today.