H.P. State Electricity Board & Anr vs Ranjeet Singh & Ors

H.P. State Electricity Board and Anr. ....Appellants

Versus

Ranjeet Singh and Ors. ....Respondents

(With Civil Appeal Nos. 2802/2007, 331/2002, 8490/2001 and 87 of 2002)

JUDGMENT

Dr. ARIJIT PASAYAT, J.

1. These appeals involve an identical question and therefore

are disposed of by a common judgment.

2. The Himachal Pradesh High Court disposed of several

writ petitions by a common judgment dated 30.12.1998. The

primary issue was whether a petition in terms of Section 33-C

(2) of the Industrial Disputes Act, 1947 (in short the Act) is

maintainable and whether daily wager can claim minimum

bonus under the Payment of Bonus Act, 1965 (in short the

`Bonus Act').

3. Factual position is almost undisputed and needs to be

noted in brief:

The respondents were employed on daily wages basis.

The Labour Court by order dated 6.7.1991 held that the

respective applicants were entitled to be paid minimum

statutory bonus within the stipulated time. The decision was

rendered on a reference made.

Primary stand before the High Court was that daily

wagers cannot get bonus. Additionally, the Labour Court has

no jurisdiction to adjudicate such a matter. The High Court

2 held that since there was a statutory obligation to pay

minimum bonus the application under Section 33-C(2) of the

Act was maintainable.

4. In support of the appeals, learned counsel for the

appellants submitted inter-alia as follows:

(i) the Labour Court has no jurisdiction to decide the

issue.

(ii) the Bonus Act was not applicable.

5. The Act has application only when the concerned

employees get salaries or wages per mensum. Dearness

allowance is not payable to daily wagers. The reference to

Section 8 of the Bonus Act to decide eligibility was not correct.

Merely because a person is working for 30 days in a year, that

does not entitle him to bonus.

6. Stand of the appellants that Section 2(11) of the Bonus

Act is applicable only to persons who receive monthly salary,

has also not been dealt with.

3

7. The claim was made for the period from 1977 to 1986.

But the application was filed long after in 1991. The High

Court was wrong in saying that only the quantum and not the

question of liability can be decided in a reference under

Section 22. Section 33-C(2) is in the nature of execution

application. Section 33-C(2) relates to pre existing right and

the claim for bonus cannot be included within the scope of

Section 33-C(2) of the Act.

8. In Civil Appeal No.87/2002, 8490/2001 and 331/2002

the grievance is that there was no claim for any interest. But

the Labour Court and the High Court wrongly decided the

entitlement of interest @12%.

9. Learned counsel for the respondents submitted that

Sections 10 and 11 of Bonus Act deal with payment of

minimum bonus. Section 22 of Bonus Act uses the expression

`bonus payable'. It relates to the quantum and varies between

minimum and the maximum.

4 The High Court was right in holding that the application in

terms of Section 33-C(2) of the Act was maintainable.

10. The scope and ambit of Section 33-C(2) has been

examined by this Court in several cases.

11. In U.P. State Road Transport Corporation v. Birendra

Bhandari (2006 (10) SCC 211) it has been stated as under:

"7. The benefit which can be enforced under Section 33-C(2) is a pre-existing benefit or one flowing from a pre-existing right.

8. In the case of State Bank of India v. Ram Chandra Dubey & Ors. (2001 (1) SCC 73), this Court held as under:

"7. When a reference is made to an Industrial Tribunal to adjudicate the question not only as to whether the termination of a workman is justified or not but to grant appropriate relief, it would consist of examination of the question whether the reinstatement should be with full or partial back

5 wages or none. Such a question is one of fact depending upon the evidence to be produced before the Tribunal. If after the termination of the employment, the workman is gainfully employed elsewhere it is one of the factors to be considered in determining whether or not reinstatement should be with full back wages or with continuity of employment. Such questions can be appropriately examined only in a reference. When a reference is made under Section 10 of the Act, all incidental questions arising thereto can be determined by the Tribunal and in this particular case, a specific question has been referred to the Tribunal as to the nature of relief to be granted to the workmen.

8. The principles enunciated in the decisions referred by either side can be summed up as follows:

Whenever a workman is entitled to receive from his employer any money or any benefit which is capable of being computed in terms of money and which he is entitled to receive from his employer and is denied of such benefit can approach Labour Court under Section 33-C(2) of the Act. The benefit sought to be enforced under Section 33-C(2) of the Act is necessarily a pre-existing benefit or one flowing from a pre-existing right. The difference between a pre-existing right or benefit on one hand and the right or benefit, which is considered

6 just and fair on the other hand is vital. The former falls within jurisdiction of Labour Court exercising powers under Section 33-C(2) of the Act while the latter does not. It cannot be spelt out from the award in the present case that such a right or benefit has accrued to the workman as the specific question of the relief granted is confined only to the reinstatement without stating anything more as to the back wages. Hence that relief must be deemed to have been denied, for what is claimed but not granted necessarily gets denied in judicial or quasi-judicial proceeding. Further when a question arises as to the adjudication of a claim for back wages all relevant circumstances which will have to be gone into, are to be considered in a judicious manner. Therefore, the appropriate forum wherein such question of back wages could be decided is only in a proceeding to whom a reference under Section 10 of the Act is made. To state that merely upon reinstatement, a workman would be entitled, under the terms of award, to all his arrears of pay and allowances would be incorrect because several factors will have to be considered, as stated earlier, to find out whether the workman is entitled to back wages at all and to what extent. Therefore, we are of the view that the High Court ought not to have presumed that the award of the Labour Court for grant of back wages is implied in the relief of reinstatement

7 or that the award of reinstatement itself conferred right for claim of back wages."

12. The above position has also been highlighted in Vijay

Kumar v. Whirlpool of India Ltd. (2007 (13) SCALE 379).

13. In Central Inland Water Transport Corporation Ltd. v.

The Workmen and Anr. (AIR 1974 SC 1604) it was inter-alia

held as follows:

"13. In a suit, a claim for relief made by the plaintiff against the defendant involves an investigation directed to the determination of

(i) the plaintiff's right to relief; (ii) the corresponding liability of the defendant, including, whether the defendant is, at all, liable or not; and (iii) the extent of the defendants liability, if any. The Working out of such liability with a view to give relief is generally regarded as the function of an execution proceeding. Determination No. (iii) referred to above, that is to say, the extent of the defendant's liability may sometimes be left over for determination in execution proceedings. But that is not the case with the

8 determinations under heads (i) and (ii). They are normally regarded as the functions of a suit and not an execution proceeding. Since a proceeding under Section 33(C)(2) is in the nature of an execution proceeding it should follow that an investigation of the nature of determinations (i) and (ii) above is, normally, outside its scope. It is true that in a proceeding under Section 33(C)(2), as in an execution proceeding, it may be necessary to determine the identity of the person by whom or against whom the claim is made if there is a challenge on that score. But that is merely 'incidental'. To call determinations (i) and (ii) 'incidental' to an execution proceeding would be a perversion, because execution proceedings in which the extent of liability is worked out are just consequential upon the determinations (i) and (ii) and represent the last stage in a process leading to final relief.

Therefore, when a claim is made before the Labour Court under Section 33(C)(2) that court must clearly understand the limitations under which it is to function. It cannot arrogate to itself the functions--say of an Industrial Tribunal which alone is entitled to make adjudications in the nature of determinations (i) and (ii) referred to above, or proceed to compute the benefit by dubbing the former as 'incidental' to its main business of computation. In such cases determinations (i) and (ii) are not 'incidental' to the computation. The computation itself is consequential upon and subsidiary to determinations (i) and (ii) as the last stage in the process which commenced with a reference to the Industrial Tribunal. It was, therefore, held in State Bank of Bikaner and Jaipur v. R.L. Khandelwal [1968] 2 L.LJ. 589 (SC} that a workman cannot

9 put forward a claim in an application under Section 33(C)(2) in respect of a matter which is not based on an existing right and which can be appropriately the subject-matter of an industrial dispute which requires a reference under Section 10 of the Act."

14. The case at hand belongs to category (i) as elaborated in

Central Inland's case (supra).

15. Further, the High Court seems to have lost sight of the

fact that the Labour Court under the Act can decide only the

matters specified in Second Schedule. "Bonus" is not covered

by the Second Schedule. Item 6 of Second Schedule says that

it deals with all matters except those covered by the Third

Schedule. "Bonus" appears as Item 5 in the Third Schedule.

Therefore, the question of entitlement to bonus could not have

been decided by the Labour Court. In case of pre existing

rights there must be agreements by both sides about existence

of such rights. If there is dis-agreement this has to be decided

by the competent authority. The stand that the expression

10 `bonus payable' relates to the quantum and not payability is

also not correct.

16. Since the High Court has not considered the above

aspects, we remit the matter to it for considering (i) the

applicability of Section 33-C(2) of the Act and (ii) the

jurisdiction of the Labour Court to decide the matter; and (iii)

the applicability of the Bonus Act to daily wagers.

17. The appeals are allowed with no order as to costs.

...............................J. (Dr. ARIJIT PASAYAT)

...............................J. (P. SATHASIVAM)

New Delhi, March 5, 2008

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