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Koduvayur S.C.B. vs Labour Court And Ors.

High Court Of Kerala|14 August, 1998

JUDGMENT / ORDER

Koshy, J. 1. Appellant in this appeal filed the original petition to quash Ext. P5 order of the Labour Court passed under Section 33-C (2) of the Industrial Disputes Act (hereinafter referred to as 'the Act'). Third respondent employee filed the claim petition claiming interest on the security deposit deposited by him in the Bank. Third respondent was appointed in the year 1967. An amount of Rs. 2,000/- was taken from him as security. Under the terms of agreement, the management bank was liable to pay interest on the security to the third respondent employee every year. Interest was paid to him upto July 1, 1970. In the year 1971, third respondent was proceeded against for alleged deficit in stock which was detected at the time of scrutiny of the accounts for the year 1970-71 and he was placed under suspension pending enquiry. In the domestic enquiry, he was found guilty and he was dismissed from service. His dismissal was referred to the Industrial Tribunal for adjudication. The Tribunal passed an Award on February 16, 1978 confirming the dismissal. It was challenged before this Court by the third respondent by filing O.P. No. 2606/1978. The matter was remanded for reconsideration by the Tribunal. Thereafter, fresh award was passed by the Tribunal setting aside the order of dismissal. The Tribunal also directed reinstatement of the third respondent. The Tribunal, however, denied backwages. The appellant bank challenged the above award in so far as it found that the third respondent is not responsible for the deficit in stock and third respondent is entitled to reinstatement. Third respondent also challenged the award to the extent of denial of backwages to him. Both the original petitions were dismissed by a common judgment. This Court found that there was no reason to interfere with the finding entered by the Tribunal. Thereafter, the claim petition was filed for realisation of interest due to the third respondent for an amount of Rs. 2,000/-deposited with the Society for the period from July 1,1970 to June 30,1988.
2. The appellant Bank contended before the Labour Court that the petition is not maintainable. It admitted the deposit of Rs. 2,000/-. But, according to the Bank, the above amount was adjusted towards value of deficit in stock which was found during the year 1970-71. Labour Court held that the petition, under Section 33-C(2) is maintainable. The fact that in terms of the agreement with the third respondent the Bank had to pay interest on the security amount and interest was being paid upto July 1, 1970 was not disputed. The only incidental question to be considered was that whether the contention of the petitioner that the amount was already adjusted towards value of the deficit in stock is correct or not. The Labour Court found that the employer had admitted receipt of the deposit and also the terms in the agreement that the workman is entitled to interest on the amount of deposit. The contention that the workman is not entitled to interest on the security amount as the amount has been adjusted towards the value of the deficit in stock was rejected by the Labour Court on the ground that the Industrial Tribunal, Kozhikode had already found that the workman cannot be held responsible for the shortage. Therefore, Ext. PS order was passed by the Labour Court granting interest at the rate of 12% for Rs.2,000/- from July 1, 1970 to June 30, 1988 which comes to Rs.4,080/-. The learned single Judge did not accept the contention of the appellant that petition under Section 33-C(2) is not maintainable and confirmed Ext. P5 order.
3. It is contended by the appellant/petitioner that the liability to pay interest is a civil liability and, therefore, it cannot be claimed in a proceeding under Section 33-C(2) of the Act. Secondly, it was contended that since the amount was adjusted the liability to pay interest on the security deposit cannot be adjudicated in a proceeding under Section 33-C(2) as it is a proceeding in the nature of execution. Therefore, it is prayed that Ext. P5 order of the Labour Court as well as the judgment of the learned single Judge should be set aside.
4. In Central Inland Water Transport Corporation Ltd. v. The Workmen and Anr. (1974) 4 SCC 696 and in Divisional Personnel Officer, Southern Railway v. Kamalam and Ors. (1995-III-LLJ-(Suppl)-1 (Ker) it was held that the proceedings under Section 33-C(2) are akin to the execution proceedings and if the right to receive the amount and the very entitlement is disputed by the employer it cannot be granted Section 33-C(2) of the Act is quoted below:
"33-C. Recovery of money due from an employer:-
XX XX XX (2) 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 within a period not exceeding three months."
5. In East India Coal Co. Ltd v. Rameshwar (1968-I-LLJ6)(SC)it was held that Section 33-C(2) takes within its purview claims of workmen regarding the benefit to which they are entitled to which can be computed in terms of money even though the alleged right to the benefit or amount is disputed by their employer. It also held as follows at pp 9-10:
"It is clear that the right to the benefit which is sought to be computed must be an existing one, that is to say, already adjudicated upon or provided for and must arise in the course of and in relation to the relationship between an industrial workman and his employer. Since the scope of Sub-section (2) is wider than that of Sub-section (1) and the sub-section is not confined to cases arising under an award, settlement or under the provisions of Chapter VA, there is no reason to hold that a benefit provided by a statute or a scheme made thereunder without there being anything contrary under such statute or Section 33-C(2) cannot fall within Sub-section (2). Consequently, the benefit provided in the bonus scheme made under the Coal-mines Provident Rinds and Bonus Schemes Act, 1948 which remains to be computed must fall under Sub-section(2) and the Labour Court, therefore, had jurisdiction to entertain and try such a claim it being a claim in respect of an existing right arising from the relationship of any industrial workman and his employer."
After considering various decisions of the Apex Court, recently the Supreme Court in Municipal Corporation Delhi v. Ganesh Razak (1995-I-LLJ-395) held as follows at p. 400:
"The ratio of these decisions clearly indicates that where the very basis of the claim or the entitlement of the workman 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 a proceeding under Section 33-C(2) of the Act.... 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."
6. In Suresh Sakharam Chaugule v. Parel Cotton Press Factory Pvt. Ltd. (1994-11-LLJ-525) the Supreme Court considered a case where certain workmen were dismissed from service and when an industrial dispute was raised, management made a statement that it had withdrawn the dismissal order against the workmen the result of which was that the dismissal order automatically became inoperative. Subsequently, workmen made an application to the Labour Court under Section 33-C(2) claiming wages and bonus for the period from the date of their being stopped from work by the management to the date of the award of the Tribunal. The Labour Court dismissed the application under Section 33-C(2) on the ground that there is no specific order by the management reinstating the workmen into service. However, the Supreme Court found that when a statement was made by the Tribunal that dismissal is withdrawn, the workmen can maintain an application under Section 33-C(2) for wages and other benefits denied to them notwithstanding the denial by the management to its entitlement. All these authorities including the earlier decisions of the Supreme Court of India in Central Bank of India Ltd. v. P.S. Rajagopalan etc. (1963-II-LLJ-89) and Bombay Gas Co. Ltd. v. Gopal Shiva and Ors. (1963-II-LLJ-608) clearly show that a workman cannot put forward a claim under Section 33-C(2) in respect of an anticipated right. He can claim only in respect of an existing right or pre-existing benefit or a benefit flowing from a pre-existing right. If he seeks a new right or benefit in the conditions of service which is neither acquired by the Act nor granted, he must pursue his remedy by a reference under Section 10 of the Act and he cannot approach the Labour Court under Section 33-C(2). But, a mere denial of right will not oust the jurisdiction of the Labour Court under Section 33-C(2). The Labour Court can examine whether there is an existing right and the workman is entitled to receive any money or any benefit capable of being computed in terms of money on the basis of the above existing right. In the instant case, admittely, there was an agreement to pay interest every year on the security deposit. He was receiving the interest till 1970. The only question to be considered is whether the above right was extinguished after 1970 as contended by the employer by adjusting the deposit towards the deficit in stock. The Labour Court in Ext. P5 order did not create any new right; but, enquired first, whether there is any existing right and after finding so, computed the amount due to the employee on the basis of an existing right after considering all incidental questions raised by the parties.
7. It is contended by the appellant/petitioner that after adjusting Rs. 2,000/- for the balance amount an arbitration case was filed as A.R.C.No.161/72-73 for recovery of the amount. When the Industrial Tribunal found that the 3rd respondent is not responsible for the deficit in stock, according to the Labour Court, the above amount cannot be adjusted. Therefore, 3rd respondent is entitled to interest to the above amount on the basis of the original agreement. The contentions of the petitioner/ appellant that an amount of Rs. 2,000/- was adjusted and only for the balance amount A.R.C. was filed is also not correct. The award of the Arbitrator dated December 31, 1994 in A.R.C. No.161/72-73 is also on the files. The award is seen to have been passed after the writ appeal is filed. In para, 1 it is stated as follows:
"The plaintiff has filed the above petition under Section69 and Rule 67 of the Kerala Co-operative Societies Act, 1969. The case is that the workman herein was found liable for the shortage of Rs. 29,651.70 worth stock as it was revealed by the stock verification statement dated October 9, 1971 and audit report for the year 1969-70 of the Koduvayur Service Co-operative Bank Ltd. The plaint is for the recovery of Rs. 29,651.70 and 18% interest from the above defendant till the date of realisation and cost."
Therefore, for the entire amount of shortage in stock claim was filed. After considering the case in detail, the arbitration case filed by the appellant Bank was dismissed holding that third respondent was not responsible for the loss. Therefore, the very contention of the appellant that Rs. 2,000/- was adjusted cannot be believed in any view. When it was categorically found by the Industrial Tribunal that third respondent was not responsible for the loss, the defence that the amount was already adjusted cannot be accepted at all.
8. Under Section 33-C(2) any money that is due from the employer can be recovered and the workman need not approach the civil court for recovery of interest. The security is deposited for due performance of the employment and interest payable on the security as agreed should be paid by the employer. It was held in Kodaikanal Motor Union Pvt. Ltd. v. Nallathambi (1969-II-LLJ-141) (Mad) and General Manager, Co-operative Sugar Market Madurai v. Presiding Officer, Additional Labour Court, Madurai (1977-II-LLJ-274) (Mad) that claim for refund of the security amount can be entertained by the Labour Court and once such a claim is filed it is for the employer to prove satisfactorily that the security amount need not be paid. In this case, no valid ground was urged by the appellant Bank in not paying interest on security amount to the third respondent for the years in question as agreed by the Bank. Therefore, we see no reason to interfere in Ext. P5 order of the Labour Court or in the impugned judgment. It is to be noted that for the interest of Rs. 2,000/- third respondent was dragged to the Labour Court and then to the High Court by way of original petition and then writ appeal.
In the above circumstances, the writ appeal is dismissed with cost.
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Title

Koduvayur S.C.B. vs Labour Court And Ors.

Court

High Court Of Kerala

JudgmentDate
14 August, 1998
Judges
  • O Prakash
  • J Koshy