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IN THE HIGH COURT OF DELHI
Prathiba M. Singh, J.
Wearwell (India) Private Limited - Appellant
Versus
Umesh Shah - Respondent
W.P.(C) 2106 of 2022
Decided On : 03-02-2022




Settlements in industrial disputes can be validly recognized if voluntarily accepted by both parties, even if one party does not appear to confirm the terms in court.

Headnote:(A) Payment of Wages Act, 1936 - Section 15(2) - The court examined the validity of an out-of-court settlement between a workman and management regarding wage disputes. The terms stipulating the settlement and frustration caused due to non-acknowledgment by the workman were critical to the ruling. (Paras 3, 10, 16)

(B) Industrial Disputes Act, 1947 - Section 18(1) - The court affirmed that settlements reached outside conciliation are binding unless contested fraudulently. The absence of the workman in proceedings and acknowledgement does not negate the settlement's validity. (Paras 13, 18)

(C) The appeal contested an appellate court's refusal to refund a pre-deposit in light of the settlement. The court affirmed the refund noting that the workman had accepted the settlement terms and encashed relevant payments. (Paras 10, 20)

Facts of the case:
The dispute arose from a workman’s claim against termination, leading to a settlement agreement after entering conciliation proceedings, which included a payment dispute.

Findings of Court:
The court ruled that the settlement should be recognized and upheld as valid due to its voluntary nature and acceptance by the workman.

Issues: The court addressed whether the settlement could be acknowledged despite the workman not appearing in the appellate court.

Ratio Decidendi: The court found that an out-of-court settlement is valid under Section 18(1) of the Industrial Disputes Act, and once signed by the workman and payment made, should be recognized despite the workman's absence in further proceedings.

Result: The appeal was partly allowed and the pre-deposit amount was ordered refunded.

JUDGMENT

Prathiba M. Singh, J. (Oral)--This hearing has been done through video conferencing.

CM APPL. 6050/2022 (for exemption)

2. Allowed, subject to all just exceptions. Application is disposed of.

W.P.(C) 2106/2022 & CM APPL. 6049/2022 (for stay)

3. The present writ petition challenges the impugned order dated 7th August, 2020 in RCA No. 50/2019 titled Wearwell (India) Pvt. Ltd. v. Umesh, passed by the D&SJ, South-East, Saket Courts, New Delhi (hereinafter "Appellate Court"). Vide the impugned order the appeal against the order dated 26th November, 2018 in PWA No. 60/2018 titled Umesh Singh v. M/s Wear Well India Pvt. Ltd., passed by Addl. D&SJ, POLC-V, Dwarka Courts, Delhi (hereinafter "Authority") under the section 15(2), PAYMENT OF WAGES ACT , 1936 (hereinafter "Act") has been partially set aside.

4. The background of this petition is that the Respondent/Workman (hereinafter "Workman") was employed with the Petitioner/Management (hereinafter "Management") and the last drawn salary was Rs.11,830/-. The Management claims that it had placed the Workman under suspension on 16th December, 2017 and a charge sheet was issued. However, the claim of the Workman was that he was terminated by the Management on 18th December, 2017.

5. The Workman then approached the Conciliation Officer under the Industrial Disputes Act, 1947 wherein he along with 21 other workmen, entered into a settlement dated 03rd May 2018 with the Management. Terms of the said settlement read as under:

    "1. The management will reinstate all the complainant workmen expect Sh. Kalim, Sh. Hussain and Sh. Firoz, with the continuity of service w.e.f. 04/05/2018.

    2. The workmen have agreed that they will work with honesty and will maintain peace in the factory and will help to increase the production.

    3. It has also been agreed between both the parties that the interest of peace and harmony of the factory, all the disputes/claims/complaints of bonus and contract Labour raised/filed by them shall be deemed to have been withdrawn after this settlement. The management has also agreed to withdraw all the cases i.e., charge sheet, suspension order/police complaints against the workmen."

6. However, the disputes thereafter arose in respect of the amount payable as per the terms of the said settlement entered into before the Conciliation officer. This led to the Workman approaching the authority under section 15(2) of the Act. The said dispute was adjudicated by the Authority on 26th November, 2018 by holding that a sum of Rs.3,01,466/- would be payable to the Workman. The order reads as under:

    "30. In view of the outcome of issue No.2, the claimant is held entitled to an amount of Rs.3,01,466/- (27,406 + 2,74,060 amount of wages deducted + 10 times penalty).

    31. Accordingly, in these circumstances, in terms of provisions of Section 15 (5) (b) of PAYMENT OF WAGES ACT , 1936, the court hereby issue a direction to the ld. CMM, Dwarka Court to recover the said amount of Rs.3,01,466/- as if it were a fine imposed by a Magistrate in terms of provisions of Section 421 (1) (a) of the Cr.P.C.

    32. Petition accordingly stands Allowed."

7. The said order of the Authority was challenged before the ld. Single Judge of this Court in WP(C) 2242/2019 titled Wearwell (India) Pvt. Ltd. v. Umesh. The said writ petition was disposed of vide order dated 13th March 2019 while granting liberty to the Petitioner to approach the Appellate Court under the Act after pre-depositing the amount of Rs.27,406/-. The order reads as under:

    "2. This Court is satisfied that this case is similar to W.P.(C) 1698/2019 and the petitioner's prayer for similar order is justified. In that view of the matter, the petitioner is granted liberty to approach the Appellate Authority under the Act by depositing only the actual wages found due to the respondent under the impugned order. Upon depositing of the actual wages found due to the respondent, the Appellate Authority shall consider the petitioner's appea

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