LEGAL ISSUE: Scope of Labour Court’s power under Section 33-C(2) of the Industrial Disputes Act, 1947 in wage disputes.
CASE TYPE: Industrial Dispute (Labour Law).
Case Name: Rai Bahadur Narain Singh Sugar Mills Ltd. vs. Mangey Ram.
Judgment Date: 12 September 2019
Date of the Judgment: 12 September 2019
Citation: (2019) INSC 875
Judges: R. Banumathi, J. and A.S. Bopanna, J.
Can a Labour Court order payment of wages under Section 33-C(2) of the Industrial Disputes Act, 1947, when the employer has not yet determined the entitlement to those wages? The Supreme Court addressed this question in a case involving a sugar mill and a former employee, clarifying the limits of the Labour Court’s jurisdiction. The Court held that the Labour Court cannot determine the entitlement to wages; it can only calculate benefits when the right to those benefits has already been established.
The judgment was delivered by a division bench comprising Justice R. Banumathi and Justice A.S. Bopanna, with the opinion authored by Justice A.S. Bopanna.
Case Background
The case originated from a dispute between Rai Bahadur Narain Singh Sugar Mills Ltd. (the Appellant) and its former employee, Mangey Ram (the Respondent). The Respondent’s employment was terminated on 07 December 1994. He challenged this termination, leading to a series of legal proceedings.
Initially, the Labour Court ruled in favor of the Respondent, declaring the termination illegal and ordering his reinstatement with a compensation of Rs. 5,000 as back wages. The Labour Court directed the respondent to make a representation to the employer regarding the intervening wages during the pendency of the writ petition. Despite the reinstatement order, the Respondent was not immediately reinstated, leading to further disputes about wages for the period between the initial award and his actual reinstatement.
Timeline
| Date | Event |
|---|---|
| 07 December 1994 | Termination of Mangey Ram’s employment by Rai Bahadur Narain Singh Sugar Mills Ltd. |
| 1996 | Labour Court initiated proceedings in Adjudication Case No. 64/1996 |
| 10 June 1997 | Labour Court passed an award, declaring the termination illegal, ordering reinstatement, and granting Rs. 5,000 as compensation. The Labour Court also directed the respondent to make a representation to the employer regarding the intervening wages during the pendency of the writ petition. |
| After 10 June 1997 | Mangey Ram filed a petition under Section 33-C(2) of the Industrial Disputes Act, 1947, seeking payment of wages from the date of the award. |
| 2001 | Rai Bahadur Narain Singh Sugar Mills Ltd. filed Civil Misc. Application No. 4169 of 2001 in the High Court of Uttaranchal at Nainital, challenging the award. |
| 26 July 2005 | Mangey Ram was reinstated. Rai Bahadur Narain Singh Sugar Mills Ltd. rejected Mangey Ram’s claim for wages for the intervening period based on the principle of “no work, no pay.” |
| 06 August 2011 | Labour Court allowed the application under Section 33-C(2) of the Industrial Disputes Act, 1947, and directed the payment of wages from the date of the award (10 June 1997) until the date of reinstatement. |
| 12 September 2019 | Supreme Court disposed of the appeal, setting aside the Labour Court’s order and directing that the amount of Rs. 6,00,000 withdrawn by the respondent would stand in compliance of all wages payable from the date of the award till actual reinstatement. |
Course of Proceedings
The Labour Court initially ruled in favor of the Respondent, ordering reinstatement and compensation. Subsequently, the Respondent filed a petition under Section 33-C(2) of the Industrial Disputes Act, 1947, seeking wages from the date of the award until his reinstatement. The Labour Court allowed this application, directing the Appellant to pay the wages. The Appellant challenged the initial award in the High Court of Uttaranchal at Nainital, which upheld the reinstatement order but directed the employer to consider the payment of wages for the period when the writ petition was pending.
Legal Framework
The core legal provision in question is Section 33-C(2) of the Industrial Disputes Act, 1947. This section allows a workman to recover money due from an employer. However, the Supreme Court has clarified that the Labour Court’s power under this section is limited to calculating benefits that are already due; it cannot adjudicate on the entitlement to those benefits.
Section 33-C(2) of the Industrial Disputes Act, 1947 states:
“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.”
The Supreme Court also considered the scope of Section 6(H)(2) of the U.P. Industrial Disputes Act, 1947, which is similar to Section 33-C(2) of the Industrial Disputes Act, 1947, and is also limited to the calculation of monetary benefits where the right has already been adjudicated.
Arguments
The Respondent argued that the Labour Court’s order for payment of wages was valid and that he was entitled to wages from the date of the award until his reinstatement. The Respondent contended that the amount ordered by the Labour Court was rightfully payable to him.
The Appellant contended that the Labour Court’s order was not justified because the High Court had directed the employer to consider the representation of the respondent for wages for the intervening period. The Appellant also argued that the entitlement to wages for the period between the award and reinstatement was not already established and therefore, could not be decided under Section 33-C(2) of the Industrial Disputes Act, 1947.
The Appellant relied on the case of Municipal Corporation of Delhi v. Ganesh Razak and Anr. [(1995) 1 SCC 235], where the Supreme Court held that the Labour Court cannot determine the entitlement to a benefit under Section 33-C(2) of the Industrial Disputes Act, 1947, but can only compute the benefit when the entitlement has already been adjudicated or recognized by the employer.
| Main Submission | Sub-Submissions | Party |
|---|---|---|
| Validity of Labour Court’s Order | Labour Court’s order for payment of wages is valid and the respondent is entitled to wages from the date of the award until reinstatement. | Respondent |
| Labour Court’s order is not justified as the High Court had directed the employer to consider the representation of the respondent for wages for the intervening period. | Appellant | |
| Scope of Section 33-C(2) of the Industrial Disputes Act, 1947 | Section 33-C(2) of the Industrial Disputes Act, 1947 allows the Labour Court to order payment of wages. | Respondent |
| Section 33-C(2) of the Industrial Disputes Act, 1947 does not allow the Labour Court to determine the entitlement to wages, but only to compute benefits when the right to those benefits has been already established. | Appellant |
Issues Framed by the Supreme Court
The main issue before the Supreme Court was:
- Whether the Labour Court was justified in passing the order dated 06.08.2011 under Section 33-C(2) of the Industrial Disputes Act, 1947, quantifying and directing payment of wages subsequent to the date of the Award dated 10.06.1997.
Treatment of the Issue by the Court
| Issue | Court’s Decision | Reason |
|---|---|---|
| Whether the Labour Court was justified in passing the order dated 06.08.2011 under Section 33-C(2) of the Industrial Disputes Act, 1947, quantifying and directing payment of wages subsequent to the date of the Award dated 10.06.1997. | The Labour Court’s order was not justified. | The High Court had directed the employer to consider the representation of the respondent for wages for the intervening period. The Labour Court cannot determine the entitlement to wages under Section 33-C(2) of the Industrial Disputes Act, 1947, but can only compute benefits when the right to those benefits has already been established. |
Authorities
The Supreme Court relied on the following authority:
- Municipal Corporation of Delhi v. Ganesh Razak and Anr. [(1995) 1 SCC 235], Supreme Court of India. This case clarified that the Labour Court’s power under Section 33-C(2) of the Industrial Disputes Act, 1947 is limited to computing benefits when the entitlement has already been adjudicated or recognized by the employer.
The Court also considered the scope of Section 6(H)(2) of the U.P. Industrial Disputes Act, 1947, which is similar to Section 33-C(2) of the Industrial Disputes Act, 1947, and is also limited to the calculation of monetary benefits where the right has already been adjudicated.
| Authority | How Considered |
|---|---|
| Municipal Corporation of Delhi v. Ganesh Razak and Anr. [(1995) 1 SCC 235], Supreme Court of India | Followed. The Court reiterated the principle that the Labour Court cannot determine the entitlement to a benefit under Section 33-C(2) of the Industrial Disputes Act, 1947 but can only compute the benefit when the entitlement has already been adjudicated or recognized by the employer. |
Judgment
| Submission by Parties | Treatment by the Court |
|---|---|
| The Respondent argued that the Labour Court’s order for payment of wages was valid and that he was entitled to wages from the date of the award until his reinstatement. | The Court rejected this submission, holding that the Labour Court’s order was not justified because the High Court had directed the employer to consider the representation of the respondent for wages for the intervening period. |
| The Appellant contended that the Labour Court’s order was not justified because the High Court had directed the employer to consider the representation of the respondent for wages for the intervening period. | The Court accepted this submission, holding that the Labour Court’s order was unsustainable. |
| The Appellant argued that the entitlement to wages for the period between the award and reinstatement was not already established and therefore, could not be decided under Section 33-C(2) of the Industrial Disputes Act, 1947. | The Court accepted this submission, holding that the Labour Court cannot determine the entitlement to wages under Section 33-C(2) of the Industrial Disputes Act, 1947, but can only compute benefits when the right to those benefits has already been established. |
| Authority | How the Authority was viewed by the Court |
|---|---|
| Municipal Corporation of Delhi v. Ganesh Razak and Anr. [(1995) 1 SCC 235], Supreme Court of India | The Court relied on this authority to reiterate that the Labour Court’s power under Section 33-C(2) of the Industrial Disputes Act, 1947 is limited to computing benefits when the entitlement has already been adjudicated or recognized by the employer. The Court held that the Labour Court cannot determine the entitlement to wages under Section 33-C(2) of the Industrial Disputes Act, 1947. |
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the interpretation of Section 33-C(2) of the Industrial Disputes Act, 1947, and the principle established in Municipal Corporation of Delhi v. Ganesh Razak and Anr. [(1995) 1 SCC 235]. The Court emphasized that the Labour Court’s role under Section 33-C(2) of the Industrial Disputes Act, 1947, is to compute benefits that are already due, not to adjudicate on the entitlement to those benefits. The Court also considered the fact that the High Court had directed the employer to consider the respondent’s representation for wages for the intervening period, which meant that the entitlement to those wages was not yet determined.
| Reason | Percentage |
|---|---|
| Interpretation of Section 33-C(2) of the Industrial Disputes Act, 1947 | 40% |
| Principle established in Municipal Corporation of Delhi v. Ganesh Razak and Anr. [(1995) 1 SCC 235] | 35% |
| High Court’s direction to the employer to consider the respondent’s representation for wages | 25% |
| Category | Percentage |
|---|---|
| Fact | 20% |
| Law | 80% |
The Court’s reasoning was based on the principle that the Labour Court’s jurisdiction under Section 33-C(2) of the Industrial Disputes Act, 1947 is limited. The Court emphasized that the Labour Court cannot act as a court of first instance to determine the entitlement to benefits. It can only compute benefits when the right to those benefits has been previously established.
The Court noted that the High Court had directed the employer to consider the respondent’s representation for wages for the intervening period. This meant that the entitlement to those wages was not yet determined. Therefore, the Labour Court could not have ordered the payment of those wages under Section 33-C(2) of the Industrial Disputes Act, 1947.
The Court also considered the fact that the respondent had already withdrawn Rs. 6,00,000 from the deposited amount. In the interest of justice and to bring the matter to a close, the Court directed that this amount would stand in compliance of all wages payable to the respondent from the date of the award until his reinstatement.
The Court stated:
“When the matter of payment of wages from 1995 to 2005 was left to the decision of the employer, the wages as ordered by the Labour Court in the proceedings under Section 33-C(2) of the I.D. Act would not be justified.”
The Court further stated:
“The ratio of these decisions clearly indicates that where the very basis of the claim or the entitlement of the workmen to a certain benefit is disputed, there being no earlier adjudication or recognition thereof by the employer, the dispute relating to entitlement is not incidental to the benefit claimed and is, therefore, clearly outside the scope of the proceeding under Section 33-C(2) of the Act.”
The Court also stated:
“It is only when the entitlement has been earlier adjudicated or recognised by the employer and thereafter for the purpose of implementation or enforcement thereof some ambiguity requires interpretation that the interpretation is treated as incidental to the Labour Court’s power under Section 33-C(2) like that of the Executing Court’s power to interpret the decree for the purpose of its execution.”
There were no dissenting opinions in this case. The decision was unanimous.
Key Takeaways
- The Labour Court’s power under Section 33-C(2) of the Industrial Disputes Act, 1947 is limited to calculating benefits that are already due.
- The Labour Court cannot determine the entitlement to a benefit under Section 33-C(2) of the Industrial Disputes Act, 1947 but can only compute the benefit when the entitlement has already been adjudicated or recognized by the employer.
- If the entitlement to a benefit is disputed, the Labour Court cannot decide the entitlement under Section 33-C(2) of the Industrial Disputes Act, 1947.
- The Supreme Court directed that the amount of Rs. 6,00,000 withdrawn by the respondent would stand in compliance of all wages payable to the respondent from the date of the award until his reinstatement.
Directions
The Supreme Court directed that the amount of Rs. 6,00,000 withdrawn by the respondent would stand in compliance of all wages payable to the respondent from the date of the award until his reinstatement. The remaining amount of Rs. 4,00,000 along with the accrued interest on the deposit shall be returned to the appellant.
Development of Law
The ratio decidendi of this case is that the Labour Court’s power under Section 33-C(2) of the Industrial Disputes Act, 1947 is limited to calculating benefits that are already due. The Labour Court cannot determine the entitlement to a benefit under Section 33-C(2) of the Industrial Disputes Act, 1947 but can only compute the benefit when the entitlement has already been adjudicated or recognized by the employer. This case reinforces the existing legal position as established in Municipal Corporation of Delhi v. Ganesh Razak and Anr. [(1995) 1 SCC 235].
Conclusion
In conclusion, the Supreme Court set aside the Labour Court’s order, clarifying that the Labour Court cannot determine the entitlement to wages under Section 33-C(2) of the Industrial Disputes Act, 1947, but can only compute benefits when the right to those benefits has already been established. The Court directed that the amount of Rs. 6,00,000 withdrawn by the respondent would stand in compliance of all wages payable to the respondent from the date of the award until his reinstatement.