Research › Search › Judgment

Calcutta High Court · body

2018 DIGILAW 508 (CAL)

J. Thomas & Co. Pvt. Ltd. v. State Of West Bengal

2018-07-19

ARINDAM SINHA

body2018
JUDGMENT : Arindam Sinha, J. Petitioner company has impugned order dated 22nd September, 2017 made by First Labour Court, West Bengal. Mr. Ghosh, learned advocate appears on behalf of petitioner and submits, a settlement dated 4th October, 2016 under section 12(3) of Industrial Disputes Act, 1947 was duly made between his client and workmen. A recital and term of settlement are reproduced below:- Recital: "The settlement dated 04.11.2010 between M/s. J. Thomas & Company Private Limited (hereinafter referred to as the company) and J. Thomas & Associate Companies Employees' Union has expired on 31.03.2013. After the expiry of the said settlement, the union submitted its charter of demands but due to un-compromise attitude on the part of the said union, no settlement could be arrived at. In the mean time a computation case being no. 28 of 2014 has been filed before the learned First Labour Court in connection with the claim relating to bonus as per the said settlement. Term: It is agreed that Bonus equivalent to two months Basic Salary and corresponding Dearness Allowance shall be paid to all employees of Category 'C' irrespective of salary or wage drawn in respect of the financial years of the Company ending on 31st March 2014, 31st March 2015, 31st March 2016 and 31st March 2017. For the purpose of computation of the Bonus, Basic Salary and Dearness Allowance will be the Basic Salary and Dearness Allowance (including Additional Dearness Allowance applicable, if any) of each employee as on 31st March of each relevant financial year, as stated above, and it is hereby agreed that such Bonus will be in full and final settlement of the dues of the staff in respect of statutory and/or Customary Bonus and the Management shall not be liable to pay and the Union and/or Members of the Staff shall not be entitled to claim any further amount on account of Statutory and/or Customary Bonus at any time in respect of the aforesaid years. No other amount, statutory or otherwise, shall be payable on account of Bonus or otherwise, save and except as stated above." 2. He demonstrates from annexure-D at pages 109 and 110 of the writ petition, settled amounts were paid to workmen of his client on or before 28th November, 2016. Private respondent no. 5 applied to Labour Court under section 33C(2) of the Act. Others joined and impugned order were made. He demonstrates from annexure-D at pages 109 and 110 of the writ petition, settled amounts were paid to workmen of his client on or before 28th November, 2016. Private respondent no. 5 applied to Labour Court under section 33C(2) of the Act. Others joined and impugned order were made. He submits, impugned order is required to be set aside. Section 33C(2) empowers Labour Court to compute either amount of money a workman is entitled to or the money value of a benefit a workman is entitled to. Workmen joining in seeking to invoke the provision and the Court acting accordingly cannot be sustained under the provision. 3. He demonstrates from impugned order, settlement of 2016 was noticed. Said provision does not allow the Court to act against terms of a settlement duly made. Finding in impugned order that previous settlement dated 4th November, 2010 was still in operation and binding on the parties is perverse. It is also in excess of the jurisdiction and power granted under said provision. There can be no finding of entitlement of interest when the agreement under which it is claimed stood terminated as expired and thereafter another settlement duly arrived at. Scope of section 33C(2) proceeds on entitlement but does not call for adjudication of it. He seeks interference. 4. Mr. Shaw, learned advocate appearing for respondent nos. 4 to 14 draws attention to impugned order. He submits, said Court found, under both settlements workmen were entitled to two months salary and dearness allowance as bonus in every accounting year covering the period under settlements dated 4th November, 2010 and 4th October, 2016. Settlement of year 2010 was to continue to operate even after accounting year 2013 unless replaced by another settlement. Thus, settlement of 2010 came to an end on execution of settlement of 2016. As both settlements entitle workmen to get two months salary and dearness allowance as bonus for each accounting year of period covered by them, said Court found, since employer had made delayed payment in the interregnum, his clients were entitled to interest. He submits, section 33C (2) and (5) of Industrial Disputes Act, 1947 and provisions of Interest Act, 1978 stand attracted as applicable in the case. 5. He relies on judgment in Sakhkkar Mills Mazdoor Sangh v. G.S. Co. He submits, section 33C (2) and (5) of Industrial Disputes Act, 1947 and provisions of Interest Act, 1978 stand attracted as applicable in the case. 5. He relies on judgment in Sakhkkar Mills Mazdoor Sangh v. G.S. Co. Ltd. reported in (1985) 2 SCC 134 by which Supreme Court directed bonus payable to employees to carry interest at rate of 9% per annum from date when it became due till payment. His next case is judgment of a Division Bench of Madras High Court in E.I.D. Parry (India) Ltd. v. Industrial Tribunal and Ors., reported in 1991 (1) LLJ 250 . He relies on paragraph 9. He submits, view taken was though Payment of Bonus Act does not contain provision for grant of interest, Interest Act would apply and Industrial Tribunal is justified in granting interest on bonus awarded to workers, from due date. He also relies on judgment of a learned Single Judge of said Court in Narayanaswamy v. Presiding Officer, Labour Court reported in 1971 (1) LLJ 310, to paragraphs 6 and 7. He submits, case of management being settlement dated 4th November, 2010 stood terminated on or after 31st March, 2013, in similar situation learned Single Judge had held there was entitlement to relief on the basis of settlement till superseded. Subsequent settlement is of 4th October, 2016 pursuant to which delayed payment of bonus for period in the interregnum was paid. In the facts Labour Court made no error in ordering entitlement of his clients' claim of interest calculated at 5% on delayed payment of bonus. He submits, impugned order is lawful and does not contain any perversity. Writ petition is without merit and should be dismissed. 6. In the facts Labour Court made no error in ordering entitlement of his clients' claim of interest calculated at 5% on delayed payment of bonus. He submits, impugned order is lawful and does not contain any perversity. Writ petition is without merit and should be dismissed. 6. Section 33C (2) provides as follows: "Where any workman is entitled to receive from the employer any money or any benefit which is capable of being computed in terms of money and if any question arises as to the amount of money due or as to the amount at which such benefit should be computed, then the question may, subject to any rules that may be made under this Act, be decided by such Labour Court as may be specified in this behalf by the appropriate Government (within a period not exceeding three months) (Provided that where the presiding officer of a Labour Court considers it necessary or expedient so to do, he may, for reasons to be recorded in writing, extend such period by such further period as he may think fit.)" 7. Sub-section (5) has been relied upon by answering respondents for purpose of justifying them having joined together in their application made to Labour Court. 8. It is clear what must be computed under sub-section (2) of section 33C is any money or benefit in terms of money a workman is entitled to. This entitlement relates to entitlement of workman in labour laws. That has to be the position since award of interest under Interest Act, 1978 is in exercise of power granted under that Act to Court, which includes tribunal and arbitrator. As such this Court finds Labour Court proceeded without authority of law in ordering entitlement of workmen to interest calculated at 5% on amount mentioned in column 4 of exhibit-D in the case. 9. In impugned order, inter alia, following was said. "After the pronouncement of the Hon'ble Supreme Court in the case of Municipal Corporation of Delhi v. Ganesh Razak & Anr. reported in J.T. 1994 (7) S.C. 476 and several other subsequent decisions, it is now well-settled that no order under section 33C(2) of the Act can be passed by the Labour Court unless the entitlement of the employee is either adjudicated or recognised as a pre-existing right. reported in J.T. 1994 (7) S.C. 476 and several other subsequent decisions, it is now well-settled that no order under section 33C(2) of the Act can be passed by the Labour Court unless the entitlement of the employee is either adjudicated or recognised as a pre-existing right. The decision cited by the Learned Advocate for the O.P has no application here because this court shall not go into adjudication of the question of entitlement of the applicants to bonus as a pre-existing right. Moreover, this court under section 33C(2) of the Act does not have the jurisdiction to adjudicate such entitlement." 10. An agreed term in settlement dated 4th October, 2016 is reproduced below. "It is agreed that Bonus equivalent to two months Basic Salary and corresponding Dearness Allowance shall be paid to all employees of Category 'C' irrespective of salary or wage drawn in respect of the financial years of the Company ending on 31st March 2014, 31st March 2015, 31st March 2016 and 31st March 2017. For the purpose of computation of the Bonus, Basic Salary and Dearness Allowance will be the Basic Salary and Dearness Allowance (including Additional Dearness Allowance applicable, if any) of each employee as on 31st March of each relevant financial year, as stated above, and it is hereby agreed that such Bonus will be in full and final settlement of the dues of the staff in respect of statutory and/or Customary Bonus and the Management shall not be liable to pay and the Union and/or Members of the Staff shall not be entitled to claim any further amount on account of Statutory and/or Customary Bonus at any time in respect of the aforesaid years. No other amount, statutory or otherwise, shall be payable on account of Bonus or otherwise, save and except as stated above." 11. Labour Court not only lost sight of fact that settlement of dues in respect of statutory and/or customary bonus was full and final but also workers had agreed as not entitled to claim any further amount, statutory or customary bonus at any time in respect of aforesaid years and that no other amount, statutory or otherwise, shall be payable on account of bonus or otherwise, save and except as stated. This would include workers agreeing to not claim entitlement to interest. This would include workers agreeing to not claim entitlement to interest. Furthermore, by the two settlements workers had got settled to themselves an extra month basic salary and corresponding dearness allowance to be paid as bonus for accounting years covered, over the statutory minimum. Whether they were entitled to interest on delayed payment of this settled amount of bonus in view of clear subsequent settlement and acceptance of payment thereunder, is a question that can only be gone into upon adjudication or recognition of such sum to be paid as bonus for accounting years in the period. Recognition of the bonus sum payable to the workers for the period is by the settlements. The settlements nowhere entitle, as an agreed term, workers to get interest for delayed payment of agreed bonus amount, paid immediately pursuant to subsequent settlement dated 4th October, 2016. Labour Court having been of the view of not having jurisdiction to adjudicate entitlement to bonus under section 33C could not then have proceeded to pronounce on entitlement of interest on delayed payment of bonus recognised as settled. Furthermore, entitlement of interest on delayed payment of bonus is not provided in the payment of Bonus Act. Labour Court sought to exercise power under Interest Act in deciding question raised under section 33C. 12. In Sakhkkar Mills Mazdoor Sangh (supra) dispute had arisen since employer contended seasonal employees had not been employed throughout the year disentitling them from getting bonus. High Court held in favour of employer but Supreme Court, otherwise. Supreme Court on restoring award of Industrial Court directed bonus payable to employees will carry interest. This was in clear exercise of power of Court to grant interest. Division Bench of Madras High Court said in E.I.D. Parry (India) Ltd. (supra), it had already held Industrial Tribunal had wider powers than Civil Court in the matter of adjudication of industrial dispute to have jurisdiction to grant interest. Power of Civil Court to grant interest flows from Code of Civil Procedure, 1908 and Interest Act, 1978, the latter including Tribunal in its definition of Court. Narayanaswamy (supra) does not apply in aid of workmen in view of settled term extracted above. 13. For above reasons writ petition is allowed and impugned order set aside. Registrar General will release deposit made to petitioner alongwith interest accrued, if any.