1. Termination of service — Labour Court award for reinstatement — High Court direction for payment of regular pay scale during pendency of challenge. (Para 2 )
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2001 Supreme(SC) 875
SUPREME COURT OF INDIA
S.N.Phukan : S.S.M.Quadri
Dena Bank
Versus
Ghanshyam
Case No. : 3731 of 2001
Date of Decision : 5/8/01
Advocates Appeared: Dhingra M.C. : Mehta Rajiv : Nair Geeta : Rao P.P. : Singh Narendra : Srinivasan Ramji
Section 17B of the Industrial Disputes Act, 1947, provides minimum wages during litigation but does not restrict High Courts or the Supreme Court from granting higher relief/salary in the interest of justice, provided any excess payment is recoverable if the employer eventually succeeds.
Headnote:(A) Industrial Disputes Act, 1947 - Section 17B - Payment of full wages to workman pending proceedings in higher courts - Section 17B provides for payment of full wages last drawn to a workman during the pendency of proceedings in the High Court or Supreme Court to mitigate hardship caused by delay in implementation of the award (Paras 7, 8, 9) - This provision does not preclude High Courts or the Supreme Court from passing appropriate interlocutory orders under Articles 226 and 136 of the Constitution of India in the interests of justice, which may include granting better benefits than those contemplated under Section 17B (Paras 10, 12).
(B) Interlocutory Orders - Power of Court - High Court may, in its discretion, stay the operation of an award in entirety or in part, or impose conditions regarding payment of salary as on the date of the order (Para 10).
(C) Recovery of Excess Payments - While amounts paid under Section 17B are generally not refundable, any amount paid over and above the sum payable under Section 17B may be ordered to be refunded by the workman to the employer if the employer succeeds in the proceedings (Paras 13, 14).
Facts of the case:
A personal driver's services were terminated, and a Labour Court subsequently ordered reinstatement with back wages. The employer challenged the award in the High Court. The High Court stayed the award on the condition that the employee be reinstated and paid salary regularly in accordance with law. The employer paid only the full wages last drawn as per Section 17B of the Act. The High Court subsequently directed the employer to pay the regular pay scale.
Findings of Court:
The High Court's direction to pay the regular pay scale is sustainable as Section 17B does not restrict the court's power to grant more equitable relief. However, the employer is entitled to recover the difference between the regular salary paid and the wages payable under Section 17B if the employer succeeds in the writ petition.
Issues: Whether the High Court is justified in directing the payment of regular salary payable on reinstatement, which exceeds the "full wages last drawn" provided under Section 17B of the Industrial Disputes Act, 1947.
Ratio Decidendi: Section 17B of the Industrial Disputes Act, 1947, establishes a minimum wage requirement to prevent hardship but does not limit the discretionary powers of the High Court or Supreme Court to grant higher relief in the interest of justice. Any payment exceeding the statutory requirement of Section 17B is, however, subject to recovery by the employer if the challenge to the award is successful.
Result: Appeal allowed (modified).
Legal Category Hierarchy
Table of Contents
2. Whether the workman is entitled only to full wages last drawn under Section 17B, Industrial Disputes Act, or regular pay scale as ordered by High Court. (Para 3 , 4 )
3. Section 17B provides minimum wages to mitigate hardship but does not restrict High Courts from granting more equitable relief through interlocutory orders based on specific facts. (Para 10 , 12 )
4. Section 17B of the Industrial Disputes Act does not preclude High Courts from granting benefits beyond full wages last drawn in the interests of justice. (Para 10 , 12 )
5. High Court order upheld, but employer entitled to recover amounts paid in excess of full wages last drawn if the writ petition is successful. (Para 14 , 15 )
6. Does Section 17B of the Industrial Disputes Act limit the High Court's power to grant wages higher than the last drawn wages?
No. Section 17B ensures a minimum payment to mitigate hardship but does not preclude High Courts or the Supreme Court from passing appropriate interlocutory orders, including granting better benefits, in the interests of justice. (Para 10 , 12 )
7. What is the meaning of full wages last drawn under Section 17B of the Industrial Disputes Act?
The expression refers to the wages which were drawn by the workman when he was in service and at the time his services were terminated. (Para 9 )
8. Is an employer entitled to recover wages paid to a workman during the pendency of proceedings in higher courts?
Wages paid strictly under Section 17B are not refundable. However, any amount paid over and above the sum payable under Section 17B can be recovered by the employer if the workman loses the case. (Para 13 , 14 )
SYED SHAH MOHAMMED QUADRI, J.
(1) LEAVE is granted.
(2) THIS appeal arises from the order of the High Court of Judicature at Allahabad, Lucknow Bench, in Writ Petition No. 7548 (S/S) of 1996 dated 4/5/2000. The respondent who was engaged as a personal driver by the Regional Manager of Dena Bank at Lucknow - the appellant, claimed to be a workman of Dena Bank. At the end of the tenure of the incumbent Regional Manager of Dena Bank at Lucknow, the services of the respondent were terminated with effect from August 1990. He raised an industrial dispute under the Industrial Disputes Act, 1947 (for short "the Act") with regard to his retrenchment and eventually, on 8/5/1996, the Labour Court passed an award holding that the respondent was a driver of Dena Bank; termination of his service was bad in law and ordered his reinstatement with back wages. The correctness of that award was assailed by the appellant in , the aforesaid writ petition in the High Court. By the impugned order dated 4-5-2000, the High Court directed the appellant to pay regular pay scale to the respondent with effect from 6-12-1996, within one month from the date of production of a certified copy of that order, failing which the appellant should appear before the Court on 4/7/2000. That order is under challenge in this appeal.
(3) MR P.P. Rao, the learned Senior Counsel appearing for the appellant has contended that under Section 17B of the Act the respondent is entitled to the wages last drawn as interpreted by this Court in Dena Bank v. Kiritikumar T. Patel and, therefore, the High Court was in error in directing payment of regular wages to the respondent. He invited our attention to the order of this Court dated 7/8/2000 recording the statement of the counsel for the appellant that the pay last drawn by the respondent before termination of the services was Rs.900.00 which was being paid as per Section 17B of the Act pending further proceedings in the High Court and, therefore, the order under challenge deserves to be set aside.
(4) MR M.C. Dhingra, the learned counsel appearing for the respondent has submitted that Section 17B of the Act ensures that the minimum amount mentioned therein is paid to the workman during pendency of the proceedings in the High Courts or the Supreme Court but it does not restrict the powers of the High Court in passing appropriate orders on the merits of the case. In this case, submitted the learned counsel, the High Court stayed the award subject to the appellant reinstating the respondent and paying him salary regularly in accordance with law and that order was modified on 17/2/1997 which entitles him to receive full salary which is not contrary to Section 17B, as such he is entitled to full salary under the orders of the High Court. In support of his contention he has relied on para 23 of the judgment in Dena Bank case1.
(5) THE short question that arises for consideration is: whether the order of the High Court directing payment of regular salary payable on reinstatement as on the date of the order to the respondent, which is over and above full wages last drawn occurring in Section 17B of the Act, is sustainable.
(6) IN a case where a workman is retrenched the relationship of master and servant comes to an end so thereafter the workman is not entitled to receive any emoluments from his employer. This principle is not disturbed by the provisions of the Act. However, the Act provides, inter alia, a machinery for a workman to raise an industrial dispute in regard to the validity of his retrenchment which will be adjudicated by an Industrial Tribunal/Labour Court on reference under Section 10 of the Act. If a Tribunal/Labour Court holds the termination to be illegal, Section 11A of the Act empowers it to set aside such order of discharge or dismissal and direct reinstatement of the workman on terms and conditions as it thinks fit and to give such relief to the workman includ
