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Carona Sahu Co. Ltd., Bombay v. Abdul Karim Munafkhan And Another
Structured Summary: Opinion of M.L. Pendse, J.
Factual and Procedural Background
The respondent No. 1 joined the appellant company on April 10, 1974 and worked in the Stitching Department. Employees of the appellant were members of one union; in 1981 some workmen joined another union, leading to inter-union rivalry. From June 1, 1982 workmen resorted to go-slow tactics; respondent No. 1 allegedly instigated others, and engaged in intimidation and violence. The company issued a charge-sheet dated June 13, 1982 and suspended respondent No. 1. A departmental enquiry followed and respondent No. 1 was dismissed effective April 23, 1983.
Respondent No. 1 sought reinstatement. After conciliation failed, the Deputy Commissioner of Labour (C), Bombay, made a reference under section 10(1)(c) of the Industrial Disputes Act, 1947 to the 7th Labour Court, Bombay. The Labour Court first held (November 3, 1988) that the enquiry was legal and fair, but later (February 4, 1993) modified punishment under section 11-A of the Act, directing reinstatement with continuity of service and payment of 75% back wages.
The appellant company filed a writ petition (No. 976 of 1993) under Article 226 challenging the award; interim stay of the award's operation was granted. The workman applied for payment of wages pending the writ petition under section 17-B of the Industrial Disputes Act. The principal dispute before this Court was the proper quantum of wages payable to the workman during the pendency of the writ petition.
Legal Issues Presented
- What is the precise legal meaning of the expression "full wages last drawn" in section 17-B of the Industrial Disputes Act, 1947 — whether it refers to the wages last actually drawn by the workman at the time of dismissal, or to the wages which the workman would have been entitled to draw in pursuance of the award (i.e., wages as on the date of the award, inclusive of increments, dearness allowance and revisions)?
- Whether, in the facts of this case, the respondent is entitled to wages during the pendency of the petition at the higher rate claimed by the respondent (as on the date of the award) rather than the wage actually being drawn at the time of dismissal.
Arguments of the Parties
Appellant's Arguments (Shri Bhatkal)
- The phrase "full wages last drawn" in section 17-B should be read literally to mean the full wages actually last drawn by the workman at the time of dismissal. The appellant asserted that those wages were Rs. 1,024.53 per month (as stated in the petition).
- The appellant did not dispute which wage components should be considered when calculating wages; the contention was confined to the temporal reference of "last drawn" — i.e., wages paid at dismissal.
Respondent's Arguments (Shri Ganguli)
- The entitlement under section 17-B is to the full wages which the workman is entitled to draw in pursuance of the award; therefore the proper reference date for measuring "full wages last drawn" is the date of the award (or the wages the workman would have drawn had he continued in service).
- The construction of section 17-B should advance the object of the legislation — protecting the workman from hardship caused by delays in implementation of awards when employers challenge awards in higher courts.
- The workman claimed that, had he continued in service, the wages payable on the date of the award would have been Rs. 2,558.15 per month (as claimed in the pleadings before the Single Judge and in parts of the record).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Fouress Engineering (I) Pvt. Ltd. v. Delhi Administration, (1992) I LLJ 710 (Division Bench of Delhi High Court) | The judgment (quoting a Single Judge) observed that section 17-B postulates "full wages last drawn by the workman" and stated that "full wages means full wages during the course of employment, and not what was paid upon termination of the employment." | The present Court noted these observations but stated it could not "appreciate" the Single Judge's remark that last drawn wages would be those drawn during the period of service; the present Court found parts of those observations conflicting and not persuasive for the appellant's submission. |
| Visveswaraya Iron and Steel Co. Ltd. v. M. Chandrappa, (1993) II LLJ 198 (Division Bench of Karnataka High Court) | The Division Bench observed that "full wages last drawn" could include yearly increments, dearness allowance and revision of pay effected during the pendency of proceedings before the Labour Court, and that the wages payable per month should be determined accordingly (i.e., wages on the date of the award inclusive of such components). | The present Court considered these observations and described the Division Bench's subsequent statements as not accurate in part. The present Court accepted the proposition that all components of wages payable on the date of the award must be taken into consideration and thus treated that aspect as supportive of its own interpretation. |
Court's Reasoning and Analysis
The Court began with the statutory text and legislative context. Section 17-B was introduced by the Industrial Disputes (Amendment) Act, 1982 to mitigate hardship caused to workmen by delays in implementing awards challenged in higher courts. The Court identified the three preconditions in the section for a workman's entitlement: (a) an award directing reinstatement; (b) the employer preferring proceedings in the High Court or Supreme Court; and (c) the workman not being employed elsewhere during the pendency of those proceedings. All three were satisfied in the present case.
The pivotal issue was the proper construction of the phrase "full wages last drawn". The appellant urged a literal, temporal reading: "last drawn" means the amount actually drawn at the time of dismissal (the Appellant asserted Rs. 1,024.53 per month). The Court rejected that narrow construction.
The Court interpreted the provision purposively: Parliament intended to ensure the workman does not lose the wages to which he would be entitled if the award directing reinstatement were implemented. Where an award declares a dismissal illegal and orders reinstatement with continuity and back wages, the legal position is that the workman is to be treated as having continued in service; back wages are then calculated to cover the period from dismissal to reinstatement and include permissible increases during that interval.
The Court held that "full wages last drawn" means the full wages which the workman would be entitled to draw in pursuance of the award — in other words, wages as on the date of the award (including all components due on that date). The Court observed that although "drawn" is in the past tense, the correct construction is that the workman should receive the wages he would have been entitled to but for the pendency of proceedings.
The Court further analyzed the proviso to section 17-B, which allows the court to order reduced or no payment where the workman has been employed and has been receiving "adequate remuneration" during the pendency. The contrast between the principal provision's phrase "full wages last drawn" and the proviso's "adequate remuneration" demonstrated that Parliament envisaged payment of wages as if the workman were employed (full wages) where the workman had not been employed elsewhere.
The Court reviewed the two High Court decisions relied on by the appellant. It found the Delhi Division Bench's approval of a Single Judge's language to be conflicted and not persuasive for appellant's literalist position. As to the Karnataka Division Bench, the Court rejected certain subsequent observations of that Bench as inaccurate but endorsed the core notion that increments, dearness allowance and other components payable on the date of the award must be included when determining the wages payable during the pendency.
On the facts, the Court noted the parties' figures: the wage actually drawn at dismissal (stated in parts of the record as Rs. 1,024.53 and in other parts as Rs. 1,024.23) and the higher monthly figure that would have been payable if the workman had continued (stated as Rs. 2,558.15 in some passages and Rs. 2,588.15 in others). The Court concluded that the Single Judge's direction to pay the higher monthly sum during the pendency was justified because the statutory construction requires payment of the wages the workman would have been entitled to in pursuance of the award, inclusive of permissible increases.
Holding and Implications
Holding: The Court dismissed the appeal. The Court affirmed the Single Judge's order directing payment of the higher monthly wages to the respondent during the pendency of the proceedings. The Court expressly held that the expression "full wages last drawn" in section 17-B must be construed to mean the full wages which the workman would be entitled to draw in pursuance of the award (i.e., wages as on the date of the award, inclusive of permissible increments, dearness allowance and revisions).
DISPOSED OF — appeal dismissed with costs.
Implications:
- Direct effect on the parties: the appellant company must pay the respondent the monthly wage figure determined as the wage the respondent would have drawn in pursuance of the award during the pendency of the writ petition (the Court upheld the Single Judge's direction to pay the higher monthly amount specified in the record).
- Statutory construction: the decision interprets section 17-B purposively — employers who challenge reinstatement awards in higher courts may be liable to pay wages during pendency measured as wages payable on the date of the award (inclusive of increments/DA/revisions), unless the proviso applies because the workman obtained adequate remuneration elsewhere.
- No broader new legal principle beyond the interpretation of section 17-B was asserted as a novel precedent; the Court applied the statutory intent and dismissed the appeal, thereby upholding the practical effect of section 17-B in similar circumstances.
Appeal dismissed.
M.L Pendse, J.:— The respondent No. 1 joined the services of the appellant company with effect from April 10, 1974 and was working in the Stitching Department. The employees of the appellant company were members of Carona Sahu Co. Employees' Union. In year 1981 some of the workmen became the members of Maharashtra General Kamgar Union. Due to inter-union rivalry, the workmen resorted to go-slow tactics from June 1, 1982 and respondent No. 1 indulged in instigating and exciting other workmen to resort to go-slow tactics. The respondent No. 1 also indulged in intimidation and violence. The Company thereupon served charge-sheet dated June 13, 1982 and suspended respondent No. 1 with immediate effect. The departmental enquiry was held against respondent No. 1 and the workman was dismissed from services with effect from April 23, 1983.
2. The respondent No. 1 sought reinstatement and after consideration of failure report by conciliation officer the Deputy Commissioner of Labour (C), Bombay in exercise of powers under section 10(1)(c) of the Industrial Disputes Act, 1947 (hereinafter referred to as the said Act) made reference to the Presiding Officer, 7th Labour Court, Bombay for adjudication of dispute raised by respondent No. 1. The respondent No. 1 sought reinstatement with continuity of service and full back wages with effect from the date of dismissal i.e April 23, 1983. The reference was resisted by the Company inter alia claiming that the enquiry held against the workman was legal, fair and proper and the punishment awarded was proportionate to the misconduct committed. The Labour Court by order dated November 3, 1988 held that the enquiry against the workman was legal, fair and proper. The Labour Court subsequently held by order dated February 4, 1993 that the punishment imposed upon the workman was disproportionate and was required to be modified in exercise of powers under section 11-A of the Act. The Labour Court directed the appellant Company to reinstate the workman with continuity of service and directed payment of back wages to the extent of 75%.
3. The appellant Company preferred writ petition No. 976 of 1993 under Article 226 of the Constitution on the Original Side of this Court. The petition was presented on April 21, 1993 and was duly admitted. The appellant Company secured interim relief of stay of operation of the award directing reinstatement with 75% back wages. The ad interim relief came for confirmation before the learned Single Judge but prior to that date, on behalf of the workman application was filed for payment of full wages pending the writ petition, as prescribed under section 17-B of the Act. It was not disputed on behalf of the appellant Company that the workman is entitled to relief under section 17-B of the Act but the dispute arose as to what should be the quantum of wages payable to the workman during the pendency of writ petition in this Court. It was claimed on behalf of the appellants that on April 23, 1983 when the workman was removed from services, the wages drawn by the workman were Rs. 1,024.53 and that should be the amount payable during the pendency of the proceedings. On the other hand, it was claimed on behalf of the workman that the entitlement of wages should be determined with reference to the date of the award and in case the workman would have continued in service, then the wages payable on the date of the award were Rs. 2,558.15. The learned Single Judge by impugned judgment dated August 27, 1993 held that the appellant Company is liable to pay amount of Rs. 2,558.15 p.m to the respondent No. 1 during the pendency of the petition. The order of the learned Single Judge is under challenge.
4. Shri Bhatkal, learned counsel appearing on behalf of the appellant Company, submitted that the trial Judge was in error in holding that the workman is entitled to the wages which were payable on the date of the award. It was submitted that the plain reading of the provisions of section 17-B of the Act makes it clear that the workman is entitled to full wages last drawn by him and those wages were one which were paid to the workman on the date of dismissal. Shri Bhatkal did not dispute the components which should be taken into consideration while determining the full wages payable to the workman. Shri Ganguli, learned counsel appearing on behalf of the workman; on the other hand urged that the entitlement under section 17-B of the Act is in respect of the full wages which the workman is entitled to draw in pursuance of the award and the construction of section 17-B should be one which would subserve the object of the legislation. In view of this rival contention, the question which falls for determination is what is the exact import of the expression “full wages last drawn” in section 17-B of the Act.
5. section 17-B reads as follows:—
“Payment of full wages to workmen 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, during the period of pendency of such proceedings in the High Court or the Supreme Court, 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.”
6. The section was introduced by Industrial Disputes (Amendment) Act, 1982 and the statement and objects for introduction of the section sets out that the need was felt to provide for payment of wages last drawn by the workman in view of the delay in implementation of the award caused due to award being challenged before the High Court or the Supreme Court by the employer and which delay causes hardship to the workman. The plain reading of the section makes it clear that the right to secure full wages is conferred upon the workman in cases where (a) award directs reinstatement of any workman; (b) employer prefers proceedings against such award in High Court or the Supreme Court and (c) the workman had not been employed in any establishment during the pendency of the proceedings in High Court or the Supreme Court. It is not in dispute in the present case that the award directs reinstatement of respondent No. 1 and the appellant Company had preferred petition in this Court to challenge the legality of the award and the respondent No. 1 had not been employed in any establishment during the pendency of the writ petition. Shri Bhatkal therefore very rightly did not dispute that the workman is entitled to the benefit under section 17-B of the Act. The only dispute is in respect of quantum of wages payable to the workman during the pendency of the proceedings and to determine that question, it is necessary to ascertain the exact import of the expression “full wages last drawn”. As mentioned hereinabove, the wages drawn by the workman on the date of dismissal were Rs. 1,024.23. It is not in dispute that in case the workman had continued in service till the date of the award, then the workman would have been entitled to draw the wages at the rate of Rs. 2,558.15 p.m The sole submission urged by Shri Bhatkal is that the expression “wages last drawn” connotes that the workman is entitled to the payment of those wages which were drawn by him at the time of dismissal from services. It is not possible to accede to the submission. The Parliament had introduced section 17-B of the Act with the object that the workman is not deprived of wages which he is entitled to draw in case the award directing reinstatement is implemented. The workman is deprived of the wages payable in pursuance of the award only because of pendency of the proceedings. The award directing reinstatement and continuity of service makes it clear that the dismissal of the employee was illegal and in the eyes of law the workman continued in service and consequently the workman was entitled also to payment of back wages. The determination of the back wages is only on the basis of what the workman would have drawn during the period commencing from the date of dismissal and till the date of reinstatement and the quantum of back wages includes all the permissible increases during that interregnum. The expression “full wages last drawn” in our judgment means the full wages which the workman was entitled to draw in pursuance of the award and the implementation of which is suspended during the pendency of the proceedings. The submission of Shri Bhatkal, that the expression “last drawn” suggests that the workman is entitled only to that amount which was received by him at the time of dismissal, cannot be accepted. Though the word “drawn” connotes past tense, it is obvious that the proper construction of the section is that the workman is entitled to the full wages which the workman would have been entitled to draw but for the pendency of the proceedings in Court.
7. The proviso to section 17-B sets out that in case the workman had been employed and had been receiving adequate remuneration during the pendency of the proceedings, then the court can order that no wages will be payable or only part of the wages will be payable. The use of the expression “adequate remuneration” in the proviso while the use of the expression “full wages last drawn” in the principal body of the section indicates that the legislature contemplated payment of full wages as if employed in cases where the workman had not been employed in any establishment. It cannot even be suggested that the amount of Rs. 1,024.23 was the full wages when the workman, in case of reinstatement is entitled to draw a sum of Rs. 2,588.15. In these circumstances, in our judgment, the learned Single Judge was perfectly justified in directing the appellant Company to pay a sum of Rs. 2,588.15 to the respondent No. 1 during the pendency of the proceedings.
8. Shri Bhatkal referred to decision of Delhi High Court reported in (1992) I LLJ 710, Fouress Engineering (I) Pvt. Ltd. v. Delhi Administration, and to the decision of Karnataka High Court reported in (1993) II LLJ 198, Visveswaraya Iron and Steel Co. Ltd. v. M. Chandrappa. Shri Bhatkal very fairly submitted that the issue did not directly come up for consideration in these two cases, but the learned counsel relied upon some of the observations made in the decisions in support of the submission. The Division Bench of Delhi High Court which was hearing an appeal against order passed by learned Single Judge quoted the observations made by the learned Single Judge in paragraph 8 of the judgment. The observations are to the following effect:—
“…………What section 17-B postulates is ‘full wages last drawn by the workman’. Last drawn wages would be those which were drawn during the period of service, and the order which needs to be passed in such matters, would take into account the full wages last drawn. “Back wages” is just a convenient expression. Statutory provision requires full wages last drawn by the workman to be paid to him. Full wages means full wages during the course of employment, and not what was paid upon termination of the employment.”
9. The Division Bench then confirmed the order passed by the learned Single Judge. We cannot appreciate the observations of the learned Single Judge approved by the Division Bench to the effect that the last drawn wages would be those which were drawn during the period of service. The subsequent observation that the full wages means ‘full wages during the course of employment and not what was paid upon termination of the employment’ seems to be conflicting. In the case before the Division Bench of Karnataka High Court, the award directing reinstatement of the workman was challenged before the learned Single Judge and the operation of the award was stayed on condition that the workman is reinstated and paid current wages. In view of the limited suspension of the award, the question as to the applicability of section 17-B of the Act did not arise for consideration. The Division Bench did make certain observations in paragraphs 12 and 13 of the judgment. The Division Bench observed in paragraph 12 that the contention, that the full wages last drawn should be interpreted so as to include not only the yearly increment and the DA but also the revision of pay, if any, effected during the pendency of the proceeding before the Labour Court and the amount payable per month should be determined accordingly, cannot be controverted. The Division Bench subsequently held that the content of the words “full wages last drawn” would take into their fold the wages drawn on the date of termination of the services plus the yearly increment and the DA to be worked out till the date of the award and that sum has to be paid to the workman during the pendency of the proceedings before the High Court. In our judgment, subsequent observations are not accurate. It is possible that the Division Bench had in contemplation that though the wages payable to the workman were those payable on the date of the award, still while determining those wages, the component of revision of wages cannot be taken into consideration. In our judgment, it is not possible even to deny the component of revision of wages while determining the quantum of wages payable on the date of the award to the workman. Every component of wages payable on the date of the award must be taken into consideration while determining what are the wages payable to the workman on the date of the award. In our judgment, this interpretation of the expression “wages last drawn” subserves the object and intention of the Parliament in enacting section 17-B of the Act. The decision of the learned Single Judge therefore does not suffer from any infirmity and the appeal must fail.
10. Accordingly, appeal is dismissed with costs.
Appeal dismissed.
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