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LPA/486/2008 16/ 16 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
LETTERS
PATENT APPEAL No. 486 of 2008
In
CIVIL
APPLICATION No. 14435 of 2006
In
SPECIAL CIVIL
APPLICATION No. 7850 of 2001
With
CIVIL
APPLICATION No. 5068 of 2008
In
LETTERS
PATENT APPEAL No. 486 of 2008
For
Approval and Signature:
HON'BLE
MR.JUSTICE A.L.DAVE
HON'BLE
SMT.JUSTICE ABHILASHA KUMARI
=========================================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ? Yes
2
To
be referred to the Reporter or not ? Yes
3
Whether
their Lordships wish to see the fair copy of the judgment ? No
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ? No
5
Whether
it is to be circulated to the civil judge ? No
=========================================================
IRON
ROLLING MILLS PVT. LTD - Appellant
Versus
VINODKUMAR
R SINGH - Respondent
=========================================================
Appearance :
MR
DIPAK R DAVE for Appellant
MR DG SHUKLA for
Respondent
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE A.L.DAVE
and
HON'BLE
SMT. JUSTICE ABHILASHA KUMARI
Date
: 17/07/2008
ORAL
JUDGMENT
(Per
: HONOURABLE MR.JUSTICE A.L.DAVE)
1. This
Letters Patent Appeal arises out of an order passed in Civil
Application No.14435 of 2006 in Special Civil Application No.7850 of
2001 on 26th March, 2008.
2. Brief
Facts:
2.1 The
opponent-workman raised an industrial dispute and by order dated 18th
May, 2001, in Reference (LCA) No.1880 of 1991, the Labour Court
directed reinstatement in service without continuity of service and
without back-wages. The said order came to be challenged by the
present appellant by preferring Special Civil Application No.7850 of
2001. In the said Special Civil Application, interim relief was
granted staying the order of reinstatement and the benefit of Section
17B of the Industrial Disputes Act, 1947 (?Sthe Act?? for short)
came to be extended to the workman pursuant to a Civil Application
preferred by the workman.
2.2 Subsequently,
Civil Application No.14435 of 2006 was preferred by the
appellant-employer praying for discontinuance of the benefit of
Section 17B to the opponent-workman on the ground that the Unit is
closed as it is not economically viable to run the Unit.
2.3 By
the impugned order, the learned Judge rejected the application and
hence this Appeal.
3. By
order dated 28th April, 2008, the Appeal came to be
admitted and ad-interim relief in terms of paragraph-5(B) was granted
while issuing Rule in Civil Application No.5068 of 2008.
3.1 When
the matter came up for hearing, since the points involved and
required to be canvassed and considered for deciding the Civil
Application and Appeal are the same, at the request of learned
advocates for the parties, the Appeal was taken up for final hearing
along with Civil Application.
4. We
have heard learned advocate Mr.D.R.Dave for the appellant and learned
advocate Mr.D.G.Shukla for the respondent.
4.1 Learned
advocate Mr.D.R.Dave submitted that the benefit of Section 17B of the
Act would be available to the workman only if the Unit is working.
This, he canvasses on the basis of the provision contained in Section
17B and the definition of the terms `employer’ and `workman’ under
the said Act. He has placed reliance on the decision in case of
Hariprasad Shivshankar Shukla and another v. A.D.Divelkar and
others reported in AIR 1957 SC 121. He also placed
reliance on a decision of the Division Bench of this Court in Civil
Application No.5486 of 2003 in Letters Patent Appeal No.933 of 1999,
dated 19th August, 2003, (Akbarkhan M.Pathan v. General
Manager) where benefits of Section 17B were denied to a workman in
view of the fact that the Undertaking, having been declared as a sick
Unit under the provisions of the Sick Industrial Companies (Special
Provisions) Act, 1985, (?SSICA?? for short) was closed down by an
order made under Section 25-O(1) of the Act, which decision was
followed subsequently by learned Single Judge in Civil Application
No.13284 of 2006 in Civil Application No.2145 of 2002 in Special
Civil Application No.12744 of 2001 (Sarabhai Machineries Ltd. v.
Ramdev Rambharose Yadav) by order dated 13th March, 2007.
Mr.Dave submitted that as held by the Apex Court in case of
Hariprasad Shivshankar Shukla and another v. A.D.Divelkar and
others (supra), the term
`industry’ has to be read as an industry which is running and not one
which is closed. He has drawn our attention to paragraphs 12 and 13
of the said judgment. Mr.Dave therefore submitted that the learned
Judge has erred in rejecting the prayer of discontinuance of benefits
under Section 17B to the workman in view of the fact that the Unit is
closed because of non-viability.
4.2 On
the other hand, learned advocate Mr.Shukla has opposed this Appeal.
He submitted that Section 17B of the Act has to be read as it stands.
It cannot be interpreted or read by introducing different meanings to
the words and the language employed therein. Mr.Shukla submitted that
the object behind introduction of Section 17B in the Act was to
provide support to a workman who is not gainfully employed during
pendency of the litigation which the employer used to prolong by
approaching the High Court and Supreme Court. Mr.Shukla placed
reliance on the decision in case of Dena Bank v. Kiritkumar
T.Patel reported in (1999)2 SCC 106 and Confederation
of Ex-Servicemen Associations and Others v. Union of India and Others
reported in (2006)8 SCC 399. Mr.Shukla submitted that as long
as the proceedings continue, the obligation of the employer continues
under Section 17B of the Act and, therefore, the Appeal may be
dismissed.
5. We
have given the matter our thoughtful consideration. In order that the
contentions raised by both the sides may be appropriately dealt with
and applied to the facts of the case, it would be appropriate to
mention certain important dates of events.
Sr
No
Date
Event
1
18.5.2001
Labour
Court ordered reinstatement
2
14.9.2001
The
award was stayed by order in the main petition
3
28.10.2002
Order
passed in Civil Application No.7220 of 2002 granting benefit of
Section 17B to the workman
4
18.11.2005
The
Unit was formally closed by informing the authorities under the
Act
6. The
whole controversy spins around the question whether the obligation of
the employer to pay last drawn wages to the workman, as provided
under Section 17B of the Act, comes to an end if the Unit is closed.
To understand this, the provision contained in Section 17B of the Act
has to be given a close scrutiny. Section 17B runs as under:
?S17B.
Payment of full wages to workman pending proceedings in higher
courts :-
Where
in any case, a Labour Court, Tribunal or National Tribunal by its
award directs reinstatement of any workman and the employer prefers
any proceedings against such award in a High Court or the Supreme
Court, the employer shall be liable to pay such workman, full wages
last drawn by him, inclusive of any maintenance allowance admissible
to him under any rule if the workman had not been employed in any
establishment during such period and an affidavit by such workman
had been filed to that effect in such Court:
Provided
that where it is proved to the satisfaction of the High Court or the
Supreme Court that such workman had been employed and had been
receiving adequate remuneration during any such period or part
thereof, the Court shall order that no wages shall be payable under
this section for such period or part, as the case may be.??
6.1 What
emerges out of reading the said Section is that where a Labour Court,
Tribunal or National Tribunal, by its award directs reinstatement of
any workman and the employer prefers any proceeding against such
award in a High Court or the Supreme Court, the employer is liable to
pay such workman during the period of pendency of such proceedings in
the High Court or the Supreme Court, full wages last drawn by such
workman. Therefore, it has to be examined whether there is an order
of reinstatement by the Labour Court, Tribunal or National Tribunal,
whether such an award is challenged by the employer before the High
Court or the Supreme Court, and whether the workman is not gainfully
employed, and if the answer to the above questions is in the
affirmative, the employer is under an obligation to pay to the
workman, full wages last drawn by him inclusive of maintenance
allowance admissible to him. Section 17B of the Act does not
contemplate any eventuality as canvassed by learned advocate for the
appellant, namely the closure of Unit, and if the argument of learned
advocate for the appellant is to be accepted, a proviso will have to
be added and read in Section 17B which would relieve the employer of
his obligation of paying to the workman the last wages drawn by him.
6.2 A
reading of the Section on the contrary indicates that full wages last
drawn by a workman are required to be paid by an employer during the
period of pendency of proceedings in the High Court or the Supreme
Court. The liability to pay under this provision would subsist till
the proceedings before the High Court or the Supreme Court remain
pending. Thus, for accepting the contention of the appellant, this
Court would not only be required to read something which is not
provided in the Section, but also to ignore something which is
provided in the Section, which cannot be done.
7. Heavy
reliance was placed by learned advocate Mr.Dave for the appellant on
the decision in case of Hariprasad Shivshankar Shukla and another
v. A.D.Divelkar and others (supra),
particularly, paragraphs 12 and 13, wherein, Their Lordships referred
to the observations made in case of Pipraich Sugar Mills Ltd. v.
Pipraich Sugar Mills Mazdoor Union reported in AIR 1957 SC 95,
which read thus:
?SIt
cannot be doubted that the entire scheme of the Act assumes that
there is in existence an industry, and then proceeds on to provide
for various steps for being taken, when a dispute arises in that
industry. Thus the provision of the Act relating to lock out,
strike, lay off, retrenchment, conciliation and adjudication
proceedings, the period during which the awards are to be in force,
have meaning only if they refer to an industry which is running and
not one which is closed.??
7.1 It
was therefore canvassed that since the present Unit is closed,
provisions of the Act, including Section 17B would not remain
operative. In this regard, it may be noted that the said judgment was
rendered on 27th November, 1956, when Section 17B was not
part of the Industrial Disputes Act, 1947. The said provision was
introduced in the Act by Act 46 of 1982 and became effective from
21st August, 1984. It, therefore, cannot be said that the
view expressed in the said judgment was expressed after considering
the provision, its content, and impact. In our view, therefore, the
said judgment cannot benefit the appellant in any way.
7.2 Similarly,
reliance was placed on an order passed in Civil Application No.5486
of 2003 in Letters Patent Appeal No.933 of 1999 (Akbarkhan M.Pathan
v. General Manager). In that case, the Unit was declared as a Sick
Industrial Company under the provisions of SICA and it was closed
down by an order made under Section 25-O(1) of the Act. This was a
development at a stage prior to the workman seeking benefit of
Section 17B. Now, in the instant case before us, the Unit is not
declared to be a Sick Unit under SICA. The order of reinstatement was
passed on 18th May, 2001, whereas the Unit is closed on
18th November, 2005, i.e. a subsequent event, not a
situation which existed in case of Akbarkhan M.Pathan relied upon by
learned advocate for the appellant. The right of the workman accrued
when the order was passed on 28th October, 2002, granting
benefit of Section 17B. Such subsequent development in form of
closure of business and consequential exemption to the employer from
obligation to pay full wages last drawn is not contemplated under
Section 17B. In our view, therefore, the said order in Civil
Application No.5486 of 2003 in case of Akbarkhan M.Pathan v. General
Manager will have no application to the present case.
7.3 Another
order which is relied upon by learned advocate for the appellant is
in Civil Application No.13284 of 2006 in Civil Application No.2145 of
2002 dated 13th March, 2007, where again, benefits of
Section 17B were denied relying on the said order in case of
Akbarkhan M.Pathan v. General Manager. That order of the learned
Single Judge will not have a binding effect in view of the foregoing
discussion that the view taken in case of Akbarkhan M.Pathan v.
General Manager would not be applicable to the facts of the present
case.
8. Learned
advocate Mr.Shukla relied on the decision in case of Dena Bank v.
Kiritkumar T.Patel (supra), wherein
in paragraph 7, Their Lordships have quoted the objects and reasons
for enacting the said provision, which run as under:
?S7. …When
Labour Courts pass award of reinstatement, these are often contested
by an employer in the Supreme Court or High Court. 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.
(emphasis supplied)
8.1 It
is thus clear that the intention of the law makers was to provide a
support for subsistence to the workman where an award of
reinstatement is challenged by the employer before the High Court or
Supreme Court and the workman is not in any gainful employment. The
situation which is projected here, namely closure of the Unit because
of non-viability, was not the factor which weighed with the law
makers while introducing Section 17B on the statute book.
8.2 During
the course of arguments, a reference was made to decision in case of
Confederation of Ex-Servicemen Associations and Others v. Union of
India and Others (supra) and it was canvassed that all that a
workman is expecting is a right to life envisaged under Article 21 of
the Constitution of India. In this context, in paragraph-61, it is
observed thus:
?S61. It
cannot be gainsaid that the right to life guaranteed under Article
21 of the Constitution embraces within its sweep not only physical
existence but the quality of life. If any statutory provision runs
counter to such a right, it must be held unconstitutional and ultra
vires Part III of the Constitution. Before more than hundred years,
in Munn. v. Illinois [94 US 113 : 24 L Ed 77 (1877)], Field, J.
explained the scope of the words ?Slife?? and ?Sliberty?? in the
5th and 14th amendments to the US Constitution
and proclaimed: (US P.142)
?SBy
the term ‘life’ , as here used, something more is meant than mere
animal existence. The inhibition against its deprivation extends to
all these limbs and faculties by which life is enjoyed. The
provision equally prohibits the mutilation of the body by the
amputation of an arm or leg, or the putting out of an eye, or the
destruction of any other organ of the body through which the soul
communicates with the outer world…
By
the term ‘liberty’, as used in the provision, something more is
meant than mere freedom from physical restraint or the bounds of a
prison.??
8.3 It
also appears that the said observations have been quoted with
approval by the Apex Court in several other judgments. An order
sought by the appellant, if granted, would virtually amount to denial
of right to life, as it would adversely affect the quality of life of
the workman.
8.4 Similar
view has been taken by this Court in case of Jayantilal Shanubhai
Tailor v. Ralchem Ltd., Ankleshwar reported in 2005(2) GLR
1218, where it was held that a
workman cannot be denied relief under Section 17B on the ground that
the manufacturing activities of the employer-Company have come to a
halt. In the said decision, order in case of Akbarkhan M.Pathan v.
General Manager (supra) was also considered and distinguished.
9. It
is thus clear from the foregoing discussion that section 17B of the
Act does not contemplate a situation of closure of the employer’s
Unit. What is contemplated is retrenchment, order of reinstatement by
an award of the Labour Court or Industrial Tribunal or National
Tribunal, challenge to the same by the employer before the High Court
or Supreme Court, pendency of the proceedings and lack of gainful
employment of the workman. The argument of the learned advocate for
the appellant, therefore, cannot be accepted. In our view, no error
can be said to have been committed while passing the impugned order
refusing exemption from the order granting payment of benefits under
Section 17B. The Appeal must fail, stands dismissed. No costs.
10. Ad-interim
relief, granted earlier, would stand vacated in the light of
dismissal of the Appeal. Civil Application stands disposed of. Rule
is discharged. No costs.
11. A
request is made to suspend the operation of this order and extend the
ad-interim relief enjoyed by the appellant. In the light of what is
observed by us above, granting such indulgence would be deciding
against the right to life of the workman. Hence, rejected.
(A.L.Dave,
J.)
(Smt.Abhilasha
Kumari, J.)
(sunil)
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