Shanker Swarup Saxena Vs. Allahabad Dist. Co-operative Bank Ltd. and anr. - Court Judgment

S.D. Agarwala, J.

1. This is a petition under Article 226 of the Constitution of India seeking a writ of certiorari to quash the order dated 10th March, 1972 passed by the Labour Court, Allahabad, on an application made by the petitioner under Section 6H(2) of the U.P. Industrial Disputes Act, 1947, hereinafter referred to as the Act.

2. The petitioner Shanker Swamp Saxena was a clerk in the employment of the Allahabad District Co-operative Bank Ltd., Allahabad. He retired from the Bank services on 1-12-1967. Thereafter his services were maintained even after retirement for 21 months with the result that he continued in the service of the Bank and was finally relieved on 30th September, 1969. On 22nd February, 1966 a settlement was arrived at between the Bank and the U.P. Bank Employees' Union, Lucknow on behalf of all the employees of the said Bank. By virtue of Clause (7) of this agreement the Bank was liable to pay gratuity to their employees at the retirement on the age of 58 years of service one month pay and allowances for each year of service of an employee with a maximum of 20 months of his wages. The Bank thereafter issued a notice dated 13th May, 1966 to all its employees informing them of the settlement and sought their consent and signatures on the said settlement. The petitioner gave his consent to the said settlement and thereafter also affixed his signatures on the said document.

3. After retirement the petitioner demanded gratuity in accordance with the terms of the agreement but since the Bank did not pay the same the petitioner moved an application under Section 6H, Sub-clause (2) of the Act before the Labour Court, Allahabad for computing the gratuity payable to the applicant and for issue of a direction for payment of the same to the petitioner. The Labour Court by its order dated 10th March, 1972 rejected the application under Section 6H (2) of the Act solely on the ground that since the settlement dated 22nd February, 1966 was not registered it was not valid settlement in law arrived at between the parties in respect of gratuity and as such the petitioner could not claim any gratuity from the Bank. The Labour Court also held that there was no completed contract of service between the petitioner and the Bank in relation to the payment of gratuity and as such the amount was not payable to the petitioner. Aggrieved the petitioner has filed the present petition against the said order.

4. Sri K. P. Agarwal, learned Counsel for the petitioner, has urged before us that the Labour Court, Allahabad, has erred in refusing to exercise jurisdiction vested in it by law. The mere fact that the settlement was not registered did not disentitle the petitioner to claim gratuity under Section 6H(2) of the Act. The application of the petitioner was maintainable in law. It was further urged that in fact in the instant case the question of the registration of the settlement did not arise as there was an individual contract by the Bank with the petitioner by virtue of which his conditions of service had been modified and as such he was entitled in law to enforce the payment of gratuity under the terms and conditions of his service.

5. In reply Sri S.C. Dey, learned Counsel for the respondent has urged that since the agreement dated 22nd February, 1966 had been arrived at between the union and the Bank as a result of collective bargaining it could not be enforceable in law as it was not registered under Section 6B of the Act. In the alternative firstly, learned Counsel for the respondent-Bank contended that the application under Section 6H(2) was not maintainable as a claim for gratuity is a claim for money and such a claim is not contemplated by the provisions of Section 6H (2) of the Act. Secondly, it was contended that even if a monetary benefits is contemplated then too the ' payment of gratuity' is not a benefit within the meaning of the expression used in Section 6H(2) of the Act. Thirdly, it was contended by the learned Counsel that the: entitlement of gratuity is determinable by a Tribunal under Schedule 11, item No. 5, of the Act and as such the claim for gratuity is only cognizable by a Tribunal and the Labour Court had no jurisdiction to grant gratuity in proceedings under Section 6H(2) of the Act.

6. As stated earlier, a Bipartite Settlement between the Bank and the workmen of the Bank was entered into on the 2nd of February, 1966. In this agreement Clause 7 related to gratuity. On 13th May, 1966, by Ext. W/2, the Bank gave notice to the petitioner informing him of the fact that such a bipartite agreement had been entered into and that the agreement was effective from 1st of January, 1965 and that he will be given his pay and allowances as agreed upon provided he gave his consent to it. The petitioner accepted the terms of the settlement and affixed his signatures on the said agreement. This position has not been denied by the Bank at any stage of the proceedings. The only defence taken by the Bank has been that the petitioner has got no right to file the application under Section 6H(2) as the bipartite settlement dated 22nd February, 1966 was not a settlement in the eye of law as it was not registered under Section 6B of the Act and as such was not enforceable in law. It has not been denied that the petitioner affixed his signatures on the said agreement. It has not been denied that the agreement was acted upon and that the petitioner was paid salary in accordance with the terms of the agreement. In fact the result of the agreement was that the petitioner's conditions of service were changed and he was thereafter entitled to the payment of gratuity as laid down in Clause 7 of the agreement. Since the said settlement ultimately formed one of the conditions of service of the petitioner the petitioner was entitled to get the gratuity envisaged in the said settlement. Since the condition of payment of gratuity became a part of condition of service of the petitioner he was entitled to enforce the said term and condition under Section 6H, Sub-clause (2) of the Act. The question is whether the settlement was a registered settlement or not was not relevant to the controversy. The Labour Court committed patent error in rejecting the petitioner's claim merely on the ground that the agreement was not registered.

7. Section 6H(1) and 6H(2) of the Act are in the following terms :

6H. Recovery of money due from an employer.-(1) Where any money is due to a workman from an employer under the provisions of Sections 6J to 6O or under a settlement or award, or under an award given by an adjudicator for the State Industrial Tribunal appointed or constituted under this Act, before the commencement of the Uttar Pradesh Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956, the workmen may without prejudice to any other mode of recovery make an application to the State Government for the recovery of the money due to him, and if the State Government is satisfied that any money is so due, it shall issue a certificate for that amount to the Collector who shall proceed to recover the same as if it were an arrear of land revenue.

(2) Where any workman is entitled to receive from the employer any benefit which is capable of being computed in terms of money, the amount at which such benefit should be computed may, subject to any rules that may be made under this Act, be determined by such Labour Court as may be specified in this behalf by the State Government, and the amount so determined may be recovered as provided for in Sub-section (2).

8. Section 33C of the Industrial Disputes Act is pan materia to the above mentioned provisions of the U.P. Act. The Supreme Court in East India Coal Co. v. Kameshwar A.I.R. 1968 S.C. 21, had occasion to consider the provisions of Section 33C of the Industrial Disputes Act. The Supreme Court laid down various propositions on the scope of Section 33C(2) after considering its earlier decisions. The Supreme Court laid down the following preposition :

The fact that the words of limitation used in Section 20(2) of the Industrial Disputes (Appellate Tribunal) Act, 1950, are omitted in Section 22C(2) shows that the scope of Section 33C(2) is wider than that of Section 33 C(i). Therefore, whereas Sub-section (i) is confirmed to claims arising under an award or settlement or Chap. V.A. Claims which can be entertained under Sub-section (2) are not as confined to those under an award, settlement or Chap. V. A.

9. Section 6H(2) has much wider scope than Sub-section (1) of the Act. Sub-section (1) is confined to cases arising out of settlement, award and an award given by an adjudicator or the State Industrial Tribunal appointed or constituted under the Act. Sub-section (2) of Section 6H is not confined to cases arising under the award or settlement alone. On a plain reading of Section 6H it is clear that Section 6H(2) does not restrict the claim only to a settlement or an award. A workman is entitled to make an application to the Labour Court seeking relief against the employer for enforcement of any benefit which is computable in terms of money under the conditions of his service. In our opinion since the petitioner was seeking to enforce a condition of service, his application under Section 6H(2) was maintainable in law and the contrary view taken by the Labour Court is manifestly erroneous in law.

10. Learned Counsel for the respondents made attempts to support the validity of the award on other grounds. He urged that the claim for gratuity being a claim for money the petitioner's application was not maintainable under Section 6H(2) of the Act as only a benefit which is being capable of being computed in terms of money is maintainable under this provision. Learned Counsel has supported this argument by relying upon Section 33C(2) of the Industrial Disputes Act where the words ' any money ' have been inserted before the word ' benefit' by Act 34 of 1964. Since the expression ' any money ' have been inserted before the word ' benefit' by Act 34 of 1964. Since the expression 'any money ' according to the learned Counsel does not find place in Section 6H(2), a claim for money is not maintainable.

11. Prior to the amendment of Section 33C(2) of the Industrial Disputes Act when the word 'any money ' was not in existence and only the word ' benefit' was there the Supreme Court considered the scope of the expression ' benefit capable of being computed in terms of money ' in Punjab National Bank v. K. L. Kaharbanda : (1962)ILLJ234SC , Justice Wanchoo, as he then was, speaking for the Court had opined :

Looking, therefore, to the words of the sub-section and the previous decisions with respect to them we are of opinion that the word 'benefit' used in Sub-section (2) is not confined merely to non-monetary benefit which could be converted in terms of money but is concerned with all kinds of benefits, whether monetary or non-monetary, to which a workman may be entitled.

12. In view of the decision of the Supreme Court even in the absence of the words ' any money ' in the Act monetary benefits are also covered by the expression ' benefit' in Section 6 H(2) of the Act. In this view of the matter we find no substance in the respondent's contention.

13. Learned Counsel for the respondent then contended that the claim for gratuity is not a benefit which is capable of being computed in terms of money as claim for gratuity itself was money. We do not agree with the submission as in our opinion gratuity is a benefit. The amount of gratuity varies on the number of years of service by an employee and it has to be computed in accordance with the length of service of an employee. The maximum amount of gratuity payable to a workman has also been prescribed in the condition of service and as such it is a benefit which i capable of being computed in terms of money and would clearly fall within the said expression

14. Lastly, it was contended for the respondent that since the petitioner's claim was for gratuity and it fell under Schedule 2, item 5, therefore, only an Industrial Tribunal had jurisdiction to consider the claim of gratuity and the Labour Court had no jurisdiction. Section 4A empowers the State Government to constitute one more Labour Court for the adjudication of industrial disputes relating to any matter specified in the 1st Schedule. Similarly under Section 4B of the Act the State Government is empowered to constitute one or more Industrial Tribunals for the adjudication of industrial disputes relating to any matter whether specified in the first or the second Schedule. The second Schedule under the Act includes gratuity at item 5. The effect is that whenever there is an industrial dispute in regard to the entitlement of gratuity the State Government is required to refer the matter to an Industrial Tribunal for adjudication. It is only when the question of entitlement is in dispute then an Industrial Tribunal has the jurisdiction to go into that industrial dispute. In the instant case the payment of gratuity was a part of the condition of service between the petitioner and the respondent-Bank. This was because as a result of a bipartite settlement already arrived at between the workman and the Bank and as such no question arose of determining any industrial dispute with regard to the entitlement of gratuity. In the instant case the dispute related to the computation of gratutity considering the length of service of the petitioner. In the circumstances since it was a question of computation of a benefit already conferred by the conditions of service no question of entitlement to that benefit arose and as such the petitioner was entitled to maintain his application for computation of gratuity payable to him under Section 6H(2) of the Act. On a reading of Section 6 H(2) of the Act. It is clear that the Legislature specifically conferred power on the Labour Court to compute a benefit on an application of a workman. This power was given to a Labour Court and as such Section 4E and Section 6H have to be read together. Section 4B would come into effect when an industrial dispute is raised in regard to the entitlement but when the question of a benefit is to be computable in terms of money then it is the Labour Court which has jurisdiction to grant the relief to the workman. In our opinion the petitioner was entitled to maintain his application under Section 6H(2) of the Act for getting his gratuity computed in terms of money. The submission in this respect raised by the learned Counsel for the respondent also has no force.

15. In the result the petition succeeds and is allowed with costs. The order of the Labour Court, Allahabad, dated 10th of March, 1972 is quashed. The matter is remanded to the Labour Court Allahabad, for computing the gratuity payable to the petitioner in the light of the observations made above in accordance with law.