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(Shri) Bipinchandra B. Singwala v. Navin Fluorine Industries And Another

Gujarat High Court
Mar 27, 1981
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Structured Summary of the Opinion (Thakkar, J.)

Factual and Procedural Background

An employee who had been appointed as an apprentice Assistant Chemist on December 20, 1973 (having completed one year of service on December 19, 1974) was orally terminated on August 14, 1975 without any inquiry. The industrial dispute was referred to the Labour Court at Surat under sections 9 and 10(1)(e) of the Industrial Disputes Act, 1947. By an Award dated October 8, 1979 (Annexure XX), the Presiding Officer of the Labour Court ordered reinstatement of the employee with back wages and awarded Rs. 100/- costs, directing implementation within one month of publication.

The employee filed a petition in the High Court under the Contempt of Courts Act, 1971 seeking punishment of the employer company and its manager for alleged wilful non-compliance with the Labour Court's Award. The respondents contended there was a dispute as to the interpretation of the Award concerning the basis for computation of back-wages and argued that the petitioner should have sought recourse under section 36-A of the Industrial Disputes Act (or alternatively section 33-C) instead of approaching the High Court.

Legal Issues Presented

  1. Whether the petitioner could approach the High Court under the Contempt of Courts Act for alleged non-compliance with the Labour Court's Award instead of seeking a reference under section 36-A of the Industrial Disputes Act or pursuing a recovery application under section 33-C.
  2. Whether, for the purpose of computation of back-wages, the petitioner must be treated as having become a permanent employee by operation of law after completion of one year of service and thus be paid on the pay-scale applicable to a permanent Assistant Chemist (and not as an apprentice) for the period between termination and reinstatement.
  3. Whether the respondents were obliged to implement the Award by treating the termination of August 14, 1975 as ineffective and to give full continuity of service and posting consistent with the Labour Court's findings.

Arguments of the Parties

Petitioner's Position

  • The petitioner sought contempt proceedings in the High Court alleging wilful non-compliance by the employer and its manager with the Labour Court's Award directing reinstatement with back-wages.
  • The petitioner relied on the Labour Court's finding that he had become a permanent employee by force of law after the lapse of one year from his initial appointment and therefore was entitled to back-wages computed on the basis of a permanent Assistant Chemist's pay-scale.

Respondents' Arguments

  • The respondents contended there was a dispute about the interpretation of the Labour Court's directions as to the basis for computing back-wages; on that account they urged that the petitioner should have availed of section 36-A of the Industrial Disputes Act.
  • They alternatively suggested that the petitioner could pursue a Recovery Application under section 33-C of the Industrial Disputes Act to enforce the Award.
  • The respondents identified five practical objections to pursuing relief under section 33-C: (1) expected lengthy debate on scope and ambit of section 33-C; (2) prolonged Labour Court proceedings delaying relief; (3) possibility of further appeals to the High Court under Articles 226/227; (4) time and money costs to parties, particularly burdensome for the employee; and (5) undue multiplicity of proceedings and the hardship of making a worker "run from court to court."

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court's analysis follows these principal steps, drawn from the text of the Award and the parties' positions:

  1. The Labour Court had expressly found that the employee "become permanent servant by force of law after lapse of one year after the date of his initial appointment" (quoted in the Award). The Labour Court's operative direction ordered reinstatement with continuity of service and back-wages from August 14, 1975, and directed implementation within one month of publication.
  2. The High Court read the Award "as a whole in a harmonious fashion" and concluded that the Award required the respondents to: (a) treat the oral termination of August 14, 1975 as non-existent; (b) treat the petitioner as having continued in service without break; (c) treat the petitioner as having become permanent with effect from the date on which one year had elapsed after initial appointment (the opinion refers to December 19/20, 1974 in this connection); (d) pay back-wages on that basis; and (e) give him a posting.
  3. On the narrow issue of computation, the Court held that to give effect to the Labour Court's finding that the petitioner became a permanent employee by force of law after one year, the back-wages had to be computed on the footing that the petitioner was a permanent Assistant Chemist (not an apprentice) as from that operative date. The Court noted that salary had in fact not been fixed on that basis; instead, respondents had fixed pay as if permanence arose only on actual reposting (January 10, 1980), which did not accord with the Award.
  4. The Court examined the statutory alternatives suggested by respondents: section 36-A and section 33-C. It observed that section 36-A vests a power in the appropriate Government to refer questions of interpretation of an award to a Labour Court or Tribunal; it does not confer any right on an individual workman to insist on a reference. Thus, it is not a valid reason to compel the petitioner to seek the Government's intervention. The respondents themselves could have sought such reference but had not done so.
  5. Regarding section 33-C (recovery application), the Court accepted the practical objections raised by respondents about delay, multiplicity of proceedings, appeals and costs, and emphasised the desirability of avoiding driving a worker into prolonged litigation. The Court stressed that the High Court's power under the Contempt of Courts Act to enforce compliance with its orders or subordinate courts' awards does not depend on whether other avenues (Labour Court reference, recovery proceedings) remain available.
  6. The Court concluded that since the Award had become final and the respondents had accepted it, they were bound to implement it. For reasons of avoiding multiplicity of proceedings and to secure speedy justice, the Court would not force the petitioner to proceed afresh but instead would direct direct compliance with the Award's terms as interpreted in the opinion.
  7. The Court specified practical mechanics: the petitioner's pay must be notionally fixed on the footing of permanence from the relevant one-year date and in the appropriate pay scale as on August 14, 1975; back-wages (including dearness allowance, increments, bonus, etc.) were to be paid from August 14, 1975 until actual reinstatement. The Court clarified that respondents are not required to pay on that permanence-basis for the period December 20, 1974 to August 13, 1975 because the Labour Court had not directed any payments for that period.

Holding and Implications

Core Ruling: The petition is disposed of with directions that the respondents must pay the petitioner back-wages with effect from August 14, 1975 on the footing that he had become a permanent employee with effect from December 20, 1974 (as found by the Labour Court), and to fix his pay notionally in the appropriate pay scale as on August 14, 1975. The payment shall include all emoluments due to a permanent employee (dearness allowance, increments, bonus, etc.).

Other specific operative consequences:

  • The respondents are to make the payment within 60 days from the date of the High Court's order.
  • Failure to comply with this direction will constitute contempt of Court and it will be open to the petitioner to revive the petition.
  • The Court made clear that it would not require respondents to pay on the permanence-basis for the intervening period from December 20, 1974 to August 13, 1975 because the Labour Court did not direct payment for that period.
  • The petition was disposed of subject to the above directions and there was no order as to costs.

Implications for precedent or broader law: The Court did not state the creation of any new general precedent; it applied the Labour Court's Award and principles of statutory interpretation (including the limited scope of section 36-A) to the facts to secure effective and speedy compliance rather than driving the employee to multiplicity of proceedings.

Show all summary ...

Thakkar, J.:— An employee whose service was terminated on August 14, 1975 raised an industrial dispute which was referred to the Labour Court at Surat under sections 9 and 10(1)(e) of the Industrial Disputes Act, 1947 hereinafter referred to as the Act) for adjudication in accordance with law. By an Award dated October 8, 1979, Annexure XX the Presiding Officer, Labour Court, Surat, ordered reinstatement (with back wages) of the employee concerned. The employee has approached this Court by way of an application under the Contempt of Courts Act, 1971 for punishing the employer Company and its Manager, respondents nos. 1 and 2 herein for wilful non-compliance Mvith the directions given by the Labour Court. The respondents have contended that there exists a dispute in regard to the interpretation of the directions issued by the Labour Court as regards the basis on whish the back-wages were to be computed. And that is why the petitioner was asked by them to make recourse to section 36-A of the Act and that instead of doing so the petitioner had approached the High Court by way of the present petition which according to them was not maintainable.

2. In order to understand the dispute, a few facts require to be stated. The petitioner was initially appointed, as an apprentice Assistant Chemist on December 20, 1973. On December 19, 1974 he completed one year of service as an apprentice Assistant Chemist Some eight months later, on August 14, 1975 his service was terminated by an oral order without holding any inquiry. The dispute in the Labour Court arose in the back-ground of these facts.

3. The presiding Officer, Labour Court, Surat, In para 12 of his judgment in clear terms recorded a finding in favour of the employee and concluded that he had become a permanent employee of the respondent company by force of law on the lapse of one year after the date of his initial appointment under order Ex. 11, whereby he was appointed. The relevant portion from the Award may be reproduced for the sake of preciseness:

“…… This mode standing order 3(2) cannot be committed breach of by the first party and after period of one year the second party cannot be treated as an apprentice and therefore, clearly in my opinion the second party become permanent servant by force of law after lapse of one year after the date of his initial appointment under order Exh. 11,”

(Emphasis Supplied)

4. It is, therefore, clear that according to the Labour Court, the petitioner became a permanent employee with effect item December 19, 1974 which is the date on which the period of one year elapsed after the date of his initial appointment as per Ex. 11. In the wake of finding the aforesaid the Labour Court directed the respondents to reinstate the petitioner with back-wages. The Labour Court observed, in para 14 nf its Award, as under.

“…. Hence I order that the second party should be reinstated by the first party in service With continuity and paid back wages from 14-8-1975 up to date of actual reinstatement and paid Rs. 100/- by way of costs. The first party shall implement this order within one month of its publication.”

(Underlines added)

5. The Award must read as a whole in a harmonious fashion. If this is done, it is abundantly clear that the Labour Court has directed reinstatement of the petitioner with back-wages from August 14, 1975 With continuity of service on the footing that the petioner became a permanent employee on December 20, 1974. In other words, the obligation of the respondents under the award was—

(1) To treat the oral order of termination dated August 14, 1975 as non-est.

(2) To treat the petitioner as having continued in service throughout without break as if the order of termination dated August 14, 1975 was non existant.

(3) To treat the petitioner as an employee who had become permanent with effect from December 20, 1974.

(4) To pay him backwages on the aforesaid basis.

(5) To give him a posting.

6. The petitioner has already been reposted. The only dispute which has given rise to the controversy is as regards the computation of the backwages in the light of the Award rendered by the Labour Court which imposed the aforesaid obligations — particularly the obligation projected in clause (3), namely, to treat the petitioner as employee who had become permanent with effect from December 20, 1974. In order to give effect to this obligation in, letter as well as in spirit the petitioner's back-wases had to be determined on the footing that he was held to be a permanent employee with effect from December 20, 1974, as disclosed by relevant provision of the Award extracted and quoted in the earlier part of this judgment. The salary was required to be fixed as per the salary payable to a permanent Asstt. Chemist (and not as an apprentice) on December 20, 1974. Admittedly salary has not been fixed on this basis but on the basis that he became a permanent Asstt. Chemist on January 10, 1980 on which date he was actually reposted, in other words for the period between (1) August 14, 1975, on which day his service was terminated by the order held to be void and (2) January 10, 1980 on which date he was reposted salary is not paid as a permanent Asstt. Chemist put as an apprentice. In view of the aforesaid position there can be no dispute that the petitioner has to be treated as a permanent employee with effect from December 20, 1974 and he has to be paid backwages with effect from August 14, 1975 on the footing that he became a permanent employee on the lapse of one year from the date of his initial appointment. It is not in dispute that the petitioner has not been paid on this basis notwithstanding the conclusion reached by the Labour Court that the petitioner had become a permanent employee by force of law from December 20, 1974. Even so he has not been paid salary on the basis of the pay scale applicable to a permanent, employee. Learned Counsel for the respondents called our attention to some portion from the application made by the petitioner and also called our attention to the standing Orders. However, since the respondents have accepted the Award and the Award has become finals we are not concerned with the question as to whether the Award is justified or not. The Award has been accepted as it is and the respondents are, therefore, bound to abide by the Award and to pay the backwages in accordance with the directions given by the Labour Court. Learned Counsel has contended that it is open to the petitioner to approach the Labour Court either under section 36-A or under section 33-C of the Act. Section 36-A In so far as it is material for our purpose, reads as under:

“36-A(1). If, in the opinion of the appropriate Government any difficulty or doubt arises as to the interpretation, of any provision of an award or settlement, it may refer the question to such Labour Court, Tribunal or National Tribunal as it may think fit.

(2) ………………………….”

7. It is evident that this provision does not confer a right on the employee to insist on any question being referred to the Labour Court. Far from it — the appropriate Government alone has the power to do so upon being satisfied as regards the difficulty or doubt as to the interpretation of an award, to make a reference in order to remove difficulty in the implementation of the Award.

8. It is therefore, not a valid reason to drive the petitioner to approach the, Government to exercise the aforesaid power. What is more the respondents themselves could have done so. Why should they (who can afford the time and money cost) not do so and insist on the petitioner doing so? It as there fore, not possible to uphold the contention of the respondents in this behalf. Though no such contention is indicated in the Affidavit-in-reply, it is argued that recourse can also be made to the Labour Court by way of a Recovery Application under section 33-C of the, Industrial Dispute Act. There are 5 extremely vital objections to this course indicated by the respondents:

(1) A long drawn out and subtle debate, on the true scope and ambit of section 33-C of the Industrial Disputes Act, must be anticipated.

(2) The proceedings in the Labour Court (the present proceedings lasted for 4 years during which the employee was starving remaining idle, suffering indignity and getting state at the cost of his self respect) will not be completed for years even if numerous adjournments are not sought or granted.

(3) Further appeals and ultimate recourse to this Court under Articles 226 and/or 227 of the Constitution of India cannot be ruled out (in fact must be anticipated and taken into account).

(4) It will result not only in time cost but also in money cost to both the sides. The employer can well afford it (more than 50% will be borne by the State coffers upon the legal expenses being allowed as business expenditure). The employee may have to spend more than what he may eventually gain.

(5) Multiplicity of proceedings should not be encouraged on principle regardless of the nature of litigation. But in no case it must be encouraged where, it will result in tiring out a worker who can be driven from piller to post and made to abandon the claim rather than run from Court to Court personally (the employer can send one of its officers — the employee has to take leave and attend personally).

9. We have no supervisory control over the Labour Courts. Even if we had supervisory control we would not be in a position to direct the Labour Court to dispose of the matter within a specified time because the Courts are flooded with work as is well known. Besides, the power of the High Court under the contempt of Courts Act does not depend on whether or not the petitioner can make an approach to the Labour Court or can file Civil Suit or apply for the execution of the Award through the Collector by way of Recovery Application. Though under the circumstances we do not hold the respondents guilty of contempt for their failure to comply with the Award so far and punish them, we do not see why we should drive the petitioner to a fresh round of litigation. The anxiety of the Court must be to avoid multiplicity of proceedings and to see that speedy justice is done to the parties and they are not obliged to incur avoidable expenditure. Since there is no doubt whatsoever that the petitioner is entitled to be paid back-wages from August 14, 1975 onwards in accordance with the pay scale applicable to a permanent employee for the reasons discussed hereinabove, the respondents may well have abstained from raising such a plea. Be that as it may. We do not agree that the petitioner is not entitled to approach this Court by way of a petition of this nature. Indeed this course can more often be adopted with advantage when the demands of justice so enjoin so that parties are not driven from piller to post and obliged to incur time cost and money cost which neither they nor the society can afford.

10. We, therefore, direct the respondents to pay to the petitioner backwages with effect from August 14, 1975 on the footing that he had already become a permanent employee with effect from December 20, 1974. Of course the respondents will not be required to pay on that basis for the intervening period from December 20, 1974 to August 13, 1975 because the Labour Court has not issued any such direction. The pay of the petitioner will no doubt have to be notionally fixed on the footing that he had become a permanent employee with effect from December 20, 1974. On that basis his pay may be fixed in the appropriate pay scale as on August 14, 1975 and he must be paid back-wages with effect from August 14, 1975 till the date of reinstatement. We may make it clear that back-wages wilt include all the payments to which a permanent employee would be entitled to such as, dearness allowance, increments, bonus, etc. The payment shall be made within 60 days from to day. In case of failure to comply with this direction it will constitute contempt of Court and it will be open to the petitioner to revive this petition. Subject to the aforesaid directions this petition stands disposed of in the aforesaid terms. There will be no order as to costs.

(I.S.S)

11. Order accordingly.