Judgment:
Kailash Gambhir, J.
1. This order shall dispose of C.M. No. 5803/2008 in W.P. (C) 6927/2007, CM No. 5659/2008 in W.P. (C) No. 6970/2007, CM 5658/2008 in W.P. (C) No. 6998/2007 and CM 5806/2008 in W.P. (C) No. 6954/2007.
2. By way of these applications filed under Section 17-B of the I.D. Act the applicants/respondents seek grant of full back wages till final disposal of the petition.
3. Counsel for the petitioner submitted that the award passed by the learned Tribunal is ultra vires on account of the fact that the Tribunal had exceeded to the terms of the reference. Counsel for the petitioner further submitted that in terms of the reference the respondents sought their regularization, but exceeding the terms of the reference the Tribunal gave direction for the reinstatement of the respondents along with 25% backwages. Counsel further submitted that services of the respondents were terminated on account of the termination of the contract of the contractor as the respondents were employees of the contractor. Counsel further submitted that even the petitioner was never given an opportunity to cross-examine some of the workmen. Counsel for the petitioner further submitted that since the petitioner was declared sick industry under the provisions of Sick Industrial Companies (Special Provisions) Act, the proceedings were liable to be stayed. Counsel also submitted that in any case this fact is not in dispute that the factory of the petitioner where the respondents were working through contractor already stands closed under Section 25-O of the Industrial Disputes Act w.e.f. 31st August, 2008. Based on these submissions, counsel states that no order under Section 17-B of the Industrial Disputes Act can be passed and in any case not after the date of the closure of the factory.
4. Counsel for the respondents on the other hand submitted that all these pleas taken by the petitioner relates to the merits of the case, which can be decided at the time of the final disposal of the present petition. Counsel for the respondents further submitted that under Section 17-B of the Industrial Disputes Act, which is in the nature of subsistence allowance this Court has to see whether the directions for the reinstatement of the workmen have been passed by the Tribunal or not and whether such an order is under challenge by the employer/management. Counsel thus stated that in the impugned Award the Tribunal has given the direction for the reinstatement of all these workmen with payment of 25% backwages and, therefore, the twin requirements of Section 17B are fully satisfied in the present case. Counsel for the respondents further submitted that the closure of the petitioner's factory came later i.e. after the publication of the Award and, therefore, the respondents/workmen cannot be deprived of the benefit of grant of wages under Section 17-B of the Industrial Disputes Act. Counsel for the respondents submitted that merely because of the declaration of the petitioner as sick industry would not debar the remedy of the respondents under Section 17-B of the Industrial Disputes Act. In support of his arguments counsel for the respondents placed reliance on the following judgments:
1. Mideast India Ltd. v. Shri K.M. Unni and Ors. : 2002 (62) DRJ 537.
2. Ramniranjan Kedia Tourism Services Pvt. Limited v. Tilakraj and Ors. -CM No. 11831/2007 in WP (c) No. 14981/2005 (decided on 2.4.2008).
3. Kapur Son (India) v. NCT and Anr. - W.P. (Civil) No. 1719/2005 (Decided on 24.03.2008).
4. Delhi Transport Corporation v. Balwant Rai Ex. Cond. W.P. (Civil) No. 11849/2005 (decided on 18.3.2008).
5. Netaji Subhash Institute of Technology v. Dilkush Bairwa LPA No. 975/2006 (Decided on 30.07.2007).
5. I have heard Ld. Counsel for the parties at considerable length.
6. Section 17-B of the ID Act confers valuable rights on the workmen and correspondingly imposes onerous duty on the employer. In order to appreciate the contention of the learned Counsel for the parties, it would be proper to read Section 17-B.
Section 17-B:
Payment of full wages to workman 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.
7. A perusal of the above provision would make it clear that when an award directing reinstatement is made by the Labour Court or Tribunal or National Tribunal and if that award is challenged in any proceedings in the High Court or Supreme Court this section makes it obligatory for the employer to pay the workman during the pendency of the proceedings in the High Court or the Supreme Court full wages last drawn by him or the minimum wages, whichever are higher. The Phraseology of Section 17-B is very clear. It leaves no discretion to the court where proceedings are pending. The employee is required to pay the workman full wages last drawn by him during the pendency of the proceedings in High Court of Supreme Court.
8. Section, 17-B, takes care of the period during which proceedings remain pending before the High Court or the Supreme Court, it does not take into account any period prior to the preferring of the proceedings in the High Court or the Supreme Court. During the pendency of proceedings, the employer is under obligation to pay full back wages last drawn by the employer.
9. In Dena Bank v. Ghanshyam : (2001) 5 SCC 169, the Hon'ble Apex Court dealt in detail with the object and purpose of the said provision, which is reproduced as under:
8. Section 17-B provides that where the employer prefers any proceedings against an award directing reinstatement of any workman, 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. The proviso says that if the High Court or the Supreme Court is satisfied that the workman had been employed and had been receiving adequate remuneration during such period or part thereof, the Court shall order that no wages shall be payable under that section for such period or part, as the case may be.
9. The Statement of Objects and Reasons for inserting the said provision indicates that when Labour Courts pass awards of reinstatement, they are often contested by employers in the Supreme Court and High Courts. To mitigate the hardship that would be caused due to delay in implementation of the award, it was proposed to provide for payment of wages last drawn by the workman concerned from the date of the award till the dispute between the parties is finally decided in the High Courts or the Supreme Court. It follows that in the event of an employer not reinstating the workman and not seeking any interim relief in respect of the award directing reinstatement of the workman or in a case where the Court is not inclined to stay such award in toto the workman has two options, either to initiate proceedings to enforce the award or be content with receiving the full wages last drawn by him without prejudice to the result of the proceedings preferred by the employer against the award till he is reinstated or proceedings are terminated in his favour, whichever is earlier. In Dena Bank case this Court elucidated the expression 'full wages last drawn' as follows: (SCC p. 115, para 21) ...Parliament thought it proper to limit it to the extent of the wages which were drawn by the workman when he was in service and when his services were terminated and therefore used the words 'full wages last drawn...
10. It may be noticed that Section 17-B of the Act does not preclude the High Courts or this Court under Articles 226 and 136 of the Constitution respectively from passing appropriate interlocutory orders, having regard to the facts and circumstances of the case, in the interests of justice (Dena Bank case). The High Court or this Court may, while entertaining the employer's challenge to the award, in its discretion, in appropriate cases, stay the operation of the award in its entirety or in regard to back wages only or in regard to reinstatement without interfering with payment of back wages or on payment of wages in future irrespective of the result of the proceedings before it etc. and/or impose such conditions as to the payment of the salary as on the date of the order or a part of the back wages and its withdrawal by the workman as it may deem fit in the interests of justice. The Court may, depending on the facts of a case, direct payment of full wages last drawn under Section 17-B of the Act only by the employer to the workman. The question whether a workman is entitled to the full wages last drawn or full salary which he would be entitled to in the event of reinstatement while the award is under challenge in the High Courts or this Court depends upon the terms of the order passed by the court, which has to be determined on interpretation of the order granting relief. 10. It is thus clear that the intention of the law makers was to provide a support for sustenance to the workman where an award of reinstatement is challenged by the employer before the High Court or Supreme Court and the workman is not in any gainful employment.
11. Further, granting relief under Section 17B of the Act and passing orders directing payment of wages last drawn, is generally the rule; refusing to grant relief under Section 17B is an exception, as the relief could be denied only in the rarest of the rare cases of jurisdictional error where there is no relationship of employer and employee between the parties.
12. From the above discussion, it is manifest that the following ingredients must be satisfied for the applicability of Section 17-B of the ID Act:
(i) An Award is passed by a Labour Court, Tribunal or National Tribunal directing reinstatement of a workman;
(ii) The said award is assailed by the employer in proceedings in a High Court or the Supreme Court and the said award so far it directed reinstatement is stayed.
(iii) If the workman has not been gainfully employed in any establishment during such period and an affidavit has been filed to such effect.
13. In the instant case, the aforesaid conditions/ingredients have been duly met by all the respondents. Further, it is not the case of the petitioner that the respondents are gainfully employed somewhere else.
14. Also, as regards the contention of counsel for the petitioner that since the petitioner was declared as sick industry under the provisions of SICA and since the factory where respondents were employed already stands closed under Section 25-O of the ID Act, order under Section 17-B cannot be made, I do not feel that there is any merit in the said contention of the counsel for the petitioner.
15. Before delving on this issue, I would like to mention some important dates regarding facts of the present case. The unit was declared sick on 8/8/1996 but production had stopped since 9/2/1993; labour court ordered reinstatement on 1/12/2006; award stayed by High Court on 21/9/2007; application for seeking benefits under Section 17-B ID Act was filed on 19/4/2008 and unit was closed on 31/8/2008, after the said application for seeking benefits under Section 17-B ID Act was filed by the respondents applicants.
16. As discussed above, the preliminary consideration for making available such a relief under Section 17B to a workman is to be found in the benevolent purpose of the enactment, its spirit, intendment and object underlying, which is to mitigate and relieve, to a certain extent, the hardship which would be caused to a workman due to delay in the implementation of an award directing reinstatement of his services on account of the challenge made to it by the employer. Section 17B recognizes workman's right to the bare minimum to keep the body and soul together when a challenge has been made to an Award directing his reinstatement. The statutory provisions provide no inherent right of assailing an order or an award by an industrial adjudicator by way of an appeal. The payment which is required to be made by the employer to the workman has been held to be akin to a subsistence allowance.
17. Section 17B of the Act has to be read as it stands. It cannot be interpreted or read by introducing different meanings to the words and the language employed therein. The object behind introduction of Section 17B in the Act was to provide support to a workman who is not gainfully employed during pendency of the litigation which the employer used to prolong by approaching the High Court and Supreme Court, as discussed in Dena Bank's case (supra). Section 17B of the Act does not contemplate any eventuality as canvassed by learned advocate for the petitioner, namely the closure of Unit, and if the argument of learned advocate for the petitioner is to be accepted, a proviso will have to be added and read in Section 17B which would relieve the employer of his obligation of paying to the workman the last wages drawn by him or the minimum wages, whichever are higher.
18. A reading of the Section on the contrary indicates that full wages last drawn by a workman or the minimum wages, whichever are higher, are required to be paid by an employer during the period of pendency of proceedings in the High Court or the Supreme Court. The liability to pay under this provision would subsist till the proceedings before the High Court or the Supreme Court remain pending. Thus, for accepting the contention of the petitioner, this Court would not only be required to read something which is not provided in the Section, but also to ignore something which is provided in the Section, which cannot be done.
19. On reading the ingredients of Section 17-B ID Act as mentioned above and Dena Bank's case (supra), it is manifest that the intention of the law makers was to provide a support for subsistence to the workman where an award of reinstatement is challenged by the employer before the High Court or Supreme Court and the workman is not in any gainful employment. The situation which is projected here, namely closure of the Unit because of non-viability, was not the factor which weighed with the law makers while introducing Section 17B on the statute book.
20. The petitioner having been declared as sick industry under the provisions of SICA and the factory where respondents were employed having already been closed under Section 25-O of the ID Act would not come in the way of grant of relief to the respondents under Section 17-B ID Act as the provisions of SICA only create an embargo against disposal of assets of the sick company for the purpose of recovery of its debts and does not bar payment of money by the company or its directors to other persons for satisfaction of their legally enforceable dues. The fact that the petitioner has been declared as sick industry under the provisions of SICA and the factory where respondents were employed has already been closed under Section 25-O of the ID Act would be of relevance while deciding the issue of grant of reinstatement with backwages or compensation, but so far the benefit of Section 17-B ID Act is concerned, the same cannot be withheld from the workmen respondent.
21. A similar situation came for consideration before Gujarat High Court in Iron Rolling Mills Pvt. Ltd. v. Vinodkumar R. Singh reported in (2008) 3 GLR 1926 (DB), wherein the Division Bench of Gujarat High Court after discussing various decisions and contentions of the parties observed as under:
9. It is thus clear from the foregoing discussion that Section 17B of the Act does not contemplate a situation of closure of the employer's Unit. What is contemplated is retrenchment, order of reinstatement by an award of the Labour Court or Industrial Tribunal or National Tribunal, challenge to the same by the employer before the High Court or Supreme Court, pendency of the proceedings and lack of gainful employment of the workman. The argument of the learned advocate for the appellant, therefore, cannot be accepted. In our view, no error can be said to have been committed while passing the impugned order refusing exemption from the order granting payment of benefits under Section 17B. The Appeal must fail, stands dismissed. No costs.
22. The said decision of the Division Bench of Gujarat High Court is also consistent with the discussion made hereinabove.
23. The counsel for the petitioner has relied on the decision of this Court in CM No. 13779/2005 in WPC No. 12496/2005 dated 5/9/2006 entitled Pure Drinks (New Delhi) Ltd. v. Ashish Dhingra. In the said case the petitioner company's about 20 winding up petitions were sub-judice before the Punjab and Haryana High Court and the dues of the workmen were being adjudicated by the company court and the said high court had vide orders dated 20/2/1997 restrained the said company from alienating and disposing off its assets and a liquidator was also appointed in the said matter. Same is not the case pleaded here. Thus, the said case has no bearing on the facts of the case at hand and therefore, is of no assistance to the petitioner.
24. In the circumstances, the petitioner has not been able to make out any cogent reason for denying the relief claimed by the applicants. Consequently, for the foregoing reasons, the application is allowed.
25. The petitioner is directed to pay the last drawn wages or minimum wages whichever, are higher to the respondents/applicants from the date of award i.e. 1/12/2006. Arrears be paid to the applicants within eight weeks. The petitioner shall continue to pay the last drawn wages or minimum wages, whichever are higher, by the 15th day of every English Calendar month during the pendency of the present writ petition. The respondents/applicants are also directed to give an undertaking that in case the petition is allowed, they shall refund/repay the difference of amount of last drawn wages and the minimum wages whichever are higher within such time as may be permitted by this Court. The undertakings be filed by the respondents/applicants within four weeks before Registrar.
26. With the above directions, the applications are disposed of.