@JUDGMENTTAG-ORDER
S.K. Dubey, J.
Letters Patent Appeal No. 25 of 1995, arises out of the Order dated 5-1-1995, passed in Writ Petition No. 4077 of 1994, by Shri A. K. Mathur, J. (as he then was) and the rest of the appeals arise out of the common Order passed on 20-2-1995, by Shri M. V. Tamaskar, J. In all the aforesaid appeals, the common question is involved in relation to the interpretation of Section 65(3) of the Madhya Pradesh Industrial Relations Act, 1960 (for short ''the Act''). In all the cases, the Order terminating the services of the respective employees was set aside by the Labour Court. The employer, aggrieved by the Order passed by the Labour Court of reinstatement with back wages, preferred separate appeals u/s 65 of the Act before the State Industrial Court. The Industrial Court stayed the operation of the Order of reinstatement and payment of back wages directing the employer to make payment of full wages last drawn, u/s 65(3) of the Act. According to the Appellant-employers, the employee is entitled to full wages last drawn by him at the time of his removal from service, and not the wages which may be payable including the revision of wages and dearness allowance and other allowances at the time of the passing of the Award or the current wages. Hence, aggrieved, by the Order of Industrial Court, the Appellants preferred Writ Petitions which were dismissed. Aggrieved by the said Order of dismissal of the Writ Petitions, the Appellants-employers have filed separate intra Court appeals, which involve common question of law for our consideration.
Shri R. K. Gupta, learned Counsel for the employees, raised a preliminary objection about the maintainability of the Letters Patent Appeals. Relying on the decision of the Supreme Court in
Shri G. M. Chaphekar, appearing with Shri A. K. Khaskalam and Shri Abhay Sapre, counsel for the Appellants, contended that the petitions were filed under Articles 226 and 227 of the Constitution for issuance of a writ in the nature of certiorari; but the said petitions were dismissed, after dealing the contentions raised in the Writ Petitions on merits. Therefore, the Order of Single Judge would be treated as an Order passed under Article 226 of the Constitution and not under Article 227 of the Constitution of India. Reliance was placed on a decision of the Supreme Court in
After giving our due consideration to the Orders passed in Writ Petitions, we are of the view that, though the Appellants preferred the Writ Petitions under Articles 226/227 of the Constitution against the Order passed by the Industrial Court u/s 65(3) of the Act, the Writ Court did not decide the aforesaid petitions under Article 227 of the Constitution and dealt with the question involve on its original side by considering the ambit and scope of Section 65(3) of the Act, and passed the Orders accordingly. Therefore we consider it proper in the interest of justice to deal with these appeals on merits against the Order of the Writ Court.
On merits, it was submitted that the expression "wages last drawn" in Sub-section (3) of Section 65 of the Act, which is in pari materia to Section 17-B of the Industrial Disputes Act, 1947 (for short ''the I.D. Act'') is clear and unambiguous. It does not call for two interpretations. The idea and the object of the provision is to pay subsistence allowance and not full wages, so that the employee, who has succeeded in the Labour Court, is saved from hardship. To calculate the subsistence allowance, the Legislature in its wisdom evolved a readymade formula by using the expression "wages last drawn". It is submitted that in case the appeal is allowed, no provision is made of recovery of the amount so paid. However, if the employee succeeds, in that case, the employee would be entitled to all components of remuneration of being expressed in terms of money falling within "wages" as defined in Section 2(35) of the Act. Therefore, when the intention of the Legislature is found from the words used in the legislation itself and the language used by the statute in plain and unambiguous, the Court cannot construe differently. In support of the contention, learned Counsel cited the decisions in
To appreciate the contentions raised before us, it would be worthwhile to make a reference to the definition of ''Wages'' in Section 2(35); Section 65 of the Act as it stood prior to substitution of Sub-section (3) of Section 65 of the Act by the Madhya Pradesh Audyogik Sambandh (Sanshodhan) Adhiniyam, 1986 (Act No. 13 of 1986) which was published in Madhya Pradesh Rajpatra dated 26-4-1986 and substituted Section 65(3) and Section 17-B of the I.D. Act, which is pari materia to substituted provision of Section 65(3) of the Act.
Section 2(35) "Wages" means remuneration of all kinds capable of being expressed in terms of money and payable to the employee in respect of his employment or work done in such employment and includes
(i) any bonus, allowance (including dearness allowance) reward of additional remuneration;
(ii) the value of any house accommodation, light, water, medical attendance or other amenity or service;
(iii) and wages payable for the period of leave;
(iv) any compensation payable for lay-off or retrenchment;
(v) any contribution by the employer to any social security scheme, pension or provident fund;
(vi) any gratuity payable on discharge;
(vii) any travelling allowance or value of any travelling concession;
(viii) any sum paid or payable to or on behalf of an employee to defray special expenses "entailed on him by the nature of his employment"; and
(ix) any amount payable to an employee under any law for the time being in force for the protection of rights of employees or for regulating their relations with the employers, or under any award, settlement or agreement.
Section 65 [As it stood prior to substitution of Section 65(3)]
Appeal (1) Notwithstanding anything contained in the Act, an appeal shall lie to the Industrial Court
(a) against a final decision of a Labour Court in respect of matter falling under Clause (a) or Clause (c) of paragraph (A) or paragraph (B) or paragraph (C) of Sub-section (1) of Section 61 by the person affected or the representative of employees or the employer;
(b) against a conviction by a Labour Court, by the person convicted;
(c) against the acquittal by a Labour Court, by the State Government;
(d) for enhancement of sentence awarded by a Labour Court, by the State Government:
Provided that no appeal shall lie against an order of a Labour Court u/s 107.
(2) Every appeal shall be made within thirty days from the date of the decision, conviction, acquittal or sentence, as the case may be:
Provided that in computing the period of thirty days the period requisite for obtaining a copy of the order appealed against shall be excluded:
Provided further that the Industrial Court may for sufficient reasons, admit any appeal made after the expiry of such period.
(3) Where an appeal is filed by an employer "under Sub-section (1) against the order of a Labour Court setting aside the termination of service of an employee, the employer shall in case he has not reinstated the employee in compliance with the order of the Labour Court, pay to the employee subsistence allowance at the rate of seventy five per centum of the average pay of the employee, till the appeal is finally disposed of by the Industrial Court.
Explanation. - In this section, the expression ''average pay'' shall have the meaning assigned to it in Clause (aa) of Section 2 of the Industrial Disputes Act, 1947 (XIV of 1947).
Section 65(3) (Substituted) Where in any case, a Labour Court, by its order directs reinstatement of any employee and the employer prefers an appeal before the Industrial Court against such order, or any proceedings against the order of the Industrial Court in the High Court or the Supreme Court, as the case may be, the employer shall be liable to pay such employee during the pendency of such appeal, in the Industrial Court or such proceedings in the High Court or the Supreme Court, as the case may be, full wages last drawn by him inclusive of any maintenance allowance admissible to him under any rule if the employee had not been employed in any establishment during such period and an affidavit by such employee had been filed to that effect in such Court:
Provided that where it is proved to the satisfaction of the Industrial Court or the High Court or the Supreme Court as the case may be that such employee 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.
Section 17-B, I. D. Act - 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:
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.
Section 17-B of the I.D. Act was inserted by the Industrial Disputes (Amendment) Act, 1982 with effect from 21-8-1984. As to what would be the import and scope of Section 17-B of the I.D. Act, is authoritatively laid down by the Supreme Court in
8. It is common knowledge that even before Section 17-B was enacted, Courts were, in their discretion, awarding wages to workman when they felt such a direction was necessary but that was only a discretionary remedy depending upon Court to Court. Instances are legion where workmen have been dragged by the employers in endless litigation with preliminary objections and other technical pleas to tire them out. A fight between a workman and his employer is often times an unequal fight. The legislature was thus aware that because of the long pendency of dispute in Tribunals and Courts, on account of the dilatory tactics adopted by the employer, workman had suffered. It is against this background that the introduction of this section has to be viewed and its effects considered.
The Objects and Reasons for enacting the section are as follows:
When Labour Courts pass awards of reinstatement, these are often contested by an employer in the Supreme Court and High Courts. 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.
The objects and Reasons give an insight into the background why this section was introduced. Though Objects and Reasons cannot be the ultimate guide in interpretation of statutes, it often times aids in finding out what really persuaded the legislature to enact a particular provision. The Objects and Reasons here clearly spell out that delay in the implementation of the awards is due to the contests by the employer which consequently cause hardship to the workman.R. F. 106 If this is the object, then would it be in keeping with this object and consistent with the progressive social philosophy of our laws to deny to the workman the benefits of this section simply because the award was passed, for example just a day before the section came into force. In our view it would be not only defeating the rights of the workman but going against the spirit of the enactment. A rigid interpretation of this section as is attempted by the learned Counsel for the Respondents would be rendering the workman worse off after the coming into force of this section. This section has in effect only codified the rights of the workmen to get their wages which they could not get in time because of the long drawn out process caused by the methods employed by the Management. This section, in other words, gives a mandate to the Courts toward wages if the conditions in the section are satisfied.
Then in Paragraph 16, the Supreme Court ruled that Section 17-B is not the conferment of a new jurisdiction but the codification in statutory form of a right available to the workman to get back wages when certain given conditions are satisfied. There are no words in the section to compel the Court to hold that it cannot operate retrospectively. Before Section 17-B was introduced, there was no bar for Courts for awarding wages. Of course the workmen had no right to claim it. This section recognises such a right. To construe it in a manner detrimental to workman would be to defeat its object.
In view of insertion of Section 17-B in the I.D. Act, Section 65(3) as it stood prior to its substitution, had already a provision for payment of subsistence allowance, in case of an appeal filed by an employer under Sub-section (1) against the order of the Labour Court setting aside termination of service of an employee, the employer, in case did not reinstate the employee, in compliance of the order of the Labour Court, was bound to pay to the employee subsistence allowance at the rate of seventy five percentum of the average pay of the employee till the appeal is finally disposed of by the Industrial Court. However, after the insertion of Section 17-B of the I.D. Act, this provision of Sub-section (3) of Section 65 was substituted by Act No. 13 of 1986. It would be relevant to refer to the statement of objects and reasons for substitution.
Statement of Objects and Reasons.The amendments recently made by the Central Government in the Industrial Disputes Act, 1947 inter alia, provide for payment of ''full wages'' to workmen during the period of pendency of proceedings in higher Courts and specify certain practices as unfair labour practices on the part of the employers, workman and trade unions and penalties for those indulging in such practices have been provided in Chapter V-C.
With a view to apply said provisions to the undertakings covered by the Madhya Pradesh Industrial Relations Act, 1960, suitable amendments in Sections 65 and 110 are being proposed.
From the Statement of Objects and Reasons of substitution of Section 65(3) of the Act, the provision of making payment of subsistence allowance was omitted and in substituted Sub-section provision was made for payment of full wages to the workman during the period of pendency of the proceedings in Higher Courts. Hence, to read the wages as subsistence allowance will defeat the object of the provision so made by substitution. If that would have been the meaning of last drawn wages by evolving a formula for calculating the subsistence allowance, as contended by the Appellants, there would have been no occasion to substitute Sub-section (3) of Section 65 of the Act, as it had already a provision for payment of subsistence allowance till the decision in appeal filed by the employer against the order of the Labour Court granting reinstatement. Sub-section (3) of Section 65 of the Act gives an option to employer in case the employer challenges the order of reinstatement of the employee before the Industrial Court or in the High Court or before the Supreme Court, as the case may be, during the pendency of the appeal or proceedings before the High Court or the Supreme Court, as the case may be, if the employer does not wish to reinstate such workman, to pay full wages last drawn by him inclusive of any maintenance allowance admissible to him under any rule, if the conditions laid down in the provision are fulfilled. On the other hand, if the employer challenges the order of the Labour Court granting reinstatement and allow the employee to join the duty and reinstate him and to work till the decision of the appeal or proceedings before the High Court or the Supreme Court, as the case may be, such employee would be paid the wages as defined u/s 2(35) of the Act, after the order of the Labour Court and from the date of reinstatement. Therefore, it is the employer who has to choose that option and, in case, he does not wish to allow the employee to be reinstated till the decision of the appeal or proceedings in the High Court or the Supreme Court, as the case may be if the conditions are fulfilled, the employer has to pay the full wages last drawn by him from the date of the order of the Labour Court granting reinstatement.
The decision of Bombay High Court in case of Elpro International Ltd. v. K. B. Joshi and Ors. (supra) is of no help as the controversy before the Division Bench of Bombay High Court was relating to the constitutional validity of Section 17-B of I.D. Act, where the question of payment of last drawn wages was not involved. The Division Bench, while dealing with the question of constitutional validity on the arguments advanced in case the employer succeeds, the amount so paid will not be recovered, the Court repelled the argument by relying on the observations of the Supreme Court in Bharat Singh v. Management of New Delhi Tuberculosis Centre, New Delhi and Ors. (supra) and observed that if Section 17-B is read in the background in which it was introduced, then a conclusion is inevitable that it is wholly reasonable and has been enacted to achieve the avowed object of protecting employee from the hardship resultant from unemployment. Such a provision has been made so as to enable the employees to survive during the pendency of the litigation and reap the fruits of the order of reinstatement. These wages are to be paid if certain conditions are satisfied. In paragraph 7, the Court further observed that it is no doubt true that no provision is made as to what would happen to the amount paid u/s 17-B, if ultimately the employer succeeds in the litigation. The Court referring to the provisions of Section 10-A of the Industrial Employment (Standing Orders) Act, 1946, which deals with payment of subsistence allowance, observed that the amount paid as subsistence allowance is neither recoverable nor refundable irrespective of the result of the enquiry. The reason is obvious, as the allowance contemplated to be paid under the said section, is nothing but a subsistence allowance. Similarly, the amount to be paid u/s 17-B of the I.D. Act, is also in the nature of subsistence allowance. The expression "inclusive of any maintenance allowance admissible to him under any rule" is indicative of the legislative stand. The wages payable during the pendency of the proceedings in the High Courts or Supreme Court are at the rate of wages last drawn by him. The proviso further lays down that where it is proved 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 thereof as the case may be. The payment of wages will be obviously on month to month basis, or on the basis of the practice followed by the concerned industry or factory.
Similar to Section 10-A of the Industrial Employment (Standing Orders) Act, 1946, a provision is also made in the Standard Standing Orders for all the undertakings in the State in the Annexure to the M. P. Industrial Employment (Standing Orders) Rules, 1963, framed under M. P. Industrial Employment (Standing Orders) Act, 1961. Standard Standing Order 12 deals with Disciplinary action for misconduct of which Clauses (g) to (i) of Section 12(4) which deal with payment of suspension allowance during the pendency of the departmental enquiry, which is neither refundable nor recoverable irrespective of the result of the enquiry. The relevant clauses read thus:-
Disciplinary action for misconduct.
(1) ... ... ...
(2) ... ... ...
(3) ... ... ...
(4) ... ... ...
(a) ... ... ...
(b) ... ... ...
(c) ... ... ...
(d) ... ... ...
(e) ... ... ...
(f) ... ... ...
(g) In case of an employee other than the one belonging to the clerical, technical or supervisory staff the manager can suspend him pending enquiry into an alleged major misconduct for a period not exceeding four days;
(h) The manager may suspend a clerical, technical or supervisory employee for a period of three months pending enquiry into major misconduct alleged against him and shall pay suspension allowance to such employee at the rate of half of the average wage;
(i) The order of suspension shall be in writing and may take effect immediately on communication thereof to the employee. If no action is taken within a period of six months then the amount of wages for the period of suspension shall be payable in full.
(5) ... ... ...
(6) ... ... ...
A Division Bench of the Delhi High Court, in M/s Fouress Engineering (I) Pvt. Ltd. v. Delhi Administration and others, 1992 : II L.L.J. 710, while considering the scope of Section 17-B of the I.D. Act, observed in Paragraph 8 that 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.
A Division Bench of Karnataka High Court in
We are of the view that we have to take into consideration the pendency of the proceedings before the Labour Court which is usually long, in order to decide as to what should be the content of "full wages last drawn" by the workman to be ordered to be paid from the date of the award. It is possible and it is not uncommon that the proceedings before the Labour Court linger on for years. In some cases it takes a decade. If after a decade, the full wages last drawn are to be paid from the date of the award during the pendency of the proceedings before the Court at the same rate at which the wages were last drawn by the workman when he was removed, dismissed or terminated from the service, it would cause him great prejudice and injustice and results in harassment of the workman. During the last period of 10 years there would be escalations in the cost of living and there would also be increase in the wage paid to the workmen doing the work of similar nature. It would be highly unjust even after passing of the award, which directs the reinstatement, to direct the management to pay only that much of the sum which was paid when the services of the workman were terminated about a decade ago. The Objects and Reasons with which this provision is inserted, the words "full wages last drawn" used in the section, the time occupied for passing the award by the Labour Court or the Industrial Tribunal as the case may be, the escalation in the cost of living during this period and the increase in the wages have to be taken into consideration in determining the content of full wages last drawn by the workman, because the object of the proviso is to ensure that the workman gets the wages which he would have got had he been continued in service. If the management wants to have the pleasure of not reinstating the workman according to the award, it must be prepared to pay the full wages last drawn worked out till the date of the award with increments and D. As., as admissible to the workman, if the award has to be stayed during the pendency of the proceeding before this Court.
A Division Bench of Bombay High Court in Carona Sahu Co. Ltd. v. Abdul Karim Munafkhan and others, 1995 1 L.L.J. 47, after considering the decisions of the Karnataka and Delhi High Courts in the aforesaid two cases, considered the scope and the meaning of the expression ''full wages last drawn'' used in Section 17-B of the I.D. Act, because the sole contention of the employer in that case was that ''wages last drawn'' means the payment of those wages which were drawn by him at the time of dismissal or termination of service. After reproducing Section 17-B of the I. D. Act, the Division Bench observed in Paragraph 5 that subsequent observation of Delhi High Court that "full wages during the course of employment and not what was paid upon the termination of employment" seem to be conflicting with the observations in the case before the Division Bench of Karnataka High Court. The Division Bench of Karnataka High Court 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 D. A. but also the revision of pay, if any, effected during the pendency of the proceedings before the Labour Court, and the amount payable per month should be determined accordingly. The Division Bench subsequently held that the content of the words "full wages last drawn" would take into their fold the wages drawn or the date of termination of the service plus the yearly increment and the D.A. 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. The Bombay High Court observed that the subsequent observations of Karnataka High Court are accurate and the former are not so. It is possible that the Division Bench had in contemplation with 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 view of the Bombay High Court, it is not possible even to grant the component of revision of wages while determining the quantum of wages payable on the date of the award to the workman. The very component of wages payable on the date of the award must be taken into consideration while determining what were the wages payable to the workman on the date of the award. This interpretation of expression "wages last drawn", in the opinion of the Bombay High Court, subserves the object and intention of the Parliament in enacting Section 17-B of the I.D. Act.
We are in respectful agreement with the view taken by the Bombay High Court in Carona Sahu Co. Ltd. v. Abdul Karim Munafkhan and Ors. (supra) as to the meaning of expression "full wages last drawn" in Section 17-B of the I.D. Act. The same expression is used in Section 65(3) of the Act, which would mean the very component of wages as defined u/s 2(35) of the Act, which an employee would be entitled on the date of the award if the employer chooses not to reinstate the employee after the order of the Labour Court and challenges the order of Labour Court by filing an appeal and, thereafter also takes proceedings in the High Court or Supreme Court, as the case may be. This interpretation subserves the object and intention of the Legislature substituting Section 65(3) of the Act vide Act No. 13 of 1986. It is well settled rule of interpretation that the Court always lean towards a construction which would help to the true intention of Legislature and the object underlying thereto. In our considered view, there cannot be any other interpretation to the expression "wages last drawn" otherwise it will frustrate the purpose if the wages last drawn are construed to mean subsistence allowance, for which there was already a provision in Section 65(3) of the Act as it stood prior to the substitution.
As an upshot of the above, the appeals fail and are dismissed with costs. Counsel fee Rs. 250/- in each case. The Industrial Court is directed to decide the appeals expeditiously, as far as possible within an outer limit of one month from the date fixed in the appeals.
