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M/S Atherion Mills, Kanpur v. Labour Court, Kanpur and others - WRIT - C No. 932 of 1982 [2004] RD-AH 818 (17 September 2004)


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Civil Misc. Writ Petition No.932 of 1982

Artherton Mills, Anwarganj, Kanpur Vs. Labour Court (III), Kanpur & others.

Hon'ble V.C. Misra, J.

Heard Sri Gopal Misra, holding brief of Sri Vivek Misra, learned counsel for the petitioner and learned standing counsel on behalf of respondent no.1.  No one has appeared on behalf of respondent no.2.

1. The facts of the case in brief are that the petitioner Company M/s Atherton West Company Limited running a Cotton Mill duly constituted under the Indian Companies Act was closed down w.e.f. 2.5.1975.  The Government of India took over the management of the said Company in the public interest and the company vested in the Central Government in view of the provision contained in Section 3 (1) of the Ordinance known as Laxmiratan & Atherton West Cotton Mills taking over the Management under Ordinance, 1976.  Section 3 (7) of the Ordinance provides as under :-

"(7) For the removal of doubts it is hereby declared that any liability incurred by either of the two companies in relation to its undertakings before the appointed day shall be enforceable against the said concerned company and not against the Central Government or the Custodian"

2. Under Section 4 of the Ordinance the Central Government may appoint any person or body of person as Custodian of the said undertakings.  In exercise of the said power, the National Textial Corporation Limited, New Delhi and the National Corporation (U.P.) Ltd., Kanpur were appointed as custodian and additional custodian and took over the charge of the said Mill on 19th July, 1976 and restarted the Mill w.e.f. 13th November 1976.  On restarting of the Mill, the petitioner employed major part of the workers, who were working in the Mill immediately before its closure and who offered themselves for employment.

3. The respondent no.2 Sri Balraj Singh, was one of the workers taken in the employment as clerk w.e.f. 19th July, 1976.  He retired on 15.2.1978 on attaining the age of superannuation.  Though there was no such provision for giving 30 days earned leave in a year to the clerk in the certified standing orders, yet at the time of retirement of respondent no.2 he was paid a sum of Rs.195.24 paisa in cash towards the payment of unavailed earned leave in the preceding year which he accepted without any protest towards full and final payment of entire leave dues.

4. After a lapse of 3 years of retirement, respondent no.2 filed an application under Section 33 C (2) of the Industrial Dispute Act, 1947 (hereinafter referred to as the Act) before the Labour Court (III), U.P. at Kanpur, praying therein, inter alia, his entitlement to earned leave for the previous years of 1973, 1974 and 1975, mentioning therein that payment of earned leave to some other clerks had been made in January, 1981, hence he too was entitled to the same and prayed that it may be computed in terms of money.

5. A Misc. Case No. 17 of 1981 was registered before the Labour Court (III), Kanpur.  On receipt of a notice from the Labour Court the petitioner filed its objection, inter alia, stating that since the respondent No.2 was no more in employment and was not a workman, his application under Section 33 C (2) of the Act was not maintainable and he was not entitled of encashment of earned leave.  Only those workmen were paid, who were in employment in 1981 with the Mills and had entered into an agreement-dated 16.5.1981. Since the respondent no.2 was not in employment on the date of agreement and he was not entitled to get benefit of the said agreement entered into subsequent to his retirement.  It was further pleaded that since the earned leave which was claimed by the respondent no.2 was for the period prior to the taking over of the management of the Mills by the Central Government, and the petitioner was not liable to pay the same.  

6. The respondent no.2 examined himself before the Labour Court and admitted that the Mill has closed down on 2.5.1975 and remained closed till 19.7.1976, he also admitted that he did not receive any wage during this period.  The Labour Court respondent no.1 vide its order dated 14.10.1981 held that respondent no.2 was entitled to get unavailed leave encashment in the said proceedings and directed that a sum of Rs. 653.92 may be paid to him.

7. Being aggrieved, the petitioner filed the present writ petition, challenging the impugned order dated 14.10.1981, on the ground that the Labour court had no jurisdiction to entertain the application of respondent no.2 under Section 33 C (2) of the Act as he was not a workman employed in the petitioner's factory on the date he filed the application, that the earned leave claimed for by respondent no.2 was not an existing right on the date of retirement of the workman, and in absence of any provision, the Labour Court has no jurisdiction to compute the value of un-availed leave in proceedings under Section 33C (2) of the Act, that in absence of any provision of encashment of unavailed earned leave either in the standing order or in any rule the Labour Court having misinterpreted the agreement dated 16.5.1980, committed an error of law apparent on the face of the record  in holding that respondent no.2 was also entitled to get benefits of the agreement dated 16.5.1980 in spite of the fact that he was not in employment with the petitioner and the agreement did not apply to him and could not be treated on equal footing with the other employees, who retired subsequent to the agreement.

8. In the counter affidavit filed on behalf of the respondent no.2, it has been stated, that after the Mill had been restarted, all the workmen had been taken in employment and 30 days' earned leave per year of service was implied condition of service in terms of the Factories Act and Dookan and Vanijya Adhishthan Adhiniyam.  No demand of amount of earned leaves encashment having been made at the time of his retirement, did not mean that he had given up his other claims against the company to which he was entitled to, and he could not be discriminated amongst the workmen by the Mills and that the Labour Court had correctly computed the claim of the petitioner.

9. In the rejoinder affidavit the petitioner has stated that the Mills were lying closed and restarted afresh after its taking over. On closure the relationship of master and servants between the then Company and workmen had come to an end and unless and until there was any provision of encashment of earned leave in any rule and standing order, the workmen was not entitled to the same.

10. The learned counsel for the petitioner has relied upon the following decisions of the Apex Court as laid down in the Case of Central Inland Water Transport Vs. Workmen, reported in (1994) 4 SCC, 696, in the case of Chief Mining, India Coal Co. Ltd. Vs.  Rameswar, reported in (1968 1 SCR 110;AIR 1968 Supreme Court, 218, in case of Municipal Corporation of Delhi Vs. Ganesh Razak and Anr. Reported in J.T. 1994 (7) S.C.,  476, in the case of Rashtriya Mill Mazdoor Sangh Vs. NTC (South Maharasrta) Ltd., reported in (1996) 1 SCC, 313.  

11. It is now well settled law that the proceedings under Section 33 C (2) are analogous to execution proceedings and the Labour Court, called upon to compute in terms of money the benefit claimed by workmen is in such cases in the position of an execution court.  The right to the benefit which is sought to be computed must be an existing one, that is to say, already adjudicated upon or provided for and must arise in the course of and in relation to the relationship between an industrial workman and his employer.  If the workman is entitled to any benefit which is capable of being computed in terms of money, the Labour Court proceeds to compute accordingly, which follows upon an existing right to the money or benefit in view of its being previously adjudged, or, otherwise duly provided for, and must arise in the course of and in relation to the relationship between an industrial workman and his employer. Labour Court has no jurisdiction to first decide the entitlement of the workmen and then proceed to compute the benefits so adjudicated on that basis in exercise of its power under Section 33 C (2) of the Act. It is only when the entitlement has been earlier adjudicated or recognized by the employer and thereafter for the purpose of implementation or enforcement thereof some ambiguity requires interpretation that the interpretation is treated as incidental to the Labour Court's power under Section 33 C (2) like that of the Executing Court's power to interpret the decree for the purpose of its execution, and whereupon the basis of the claim for entitlement of the workmen to certain benefit is disputed.

12.  In the present case, I find that, there is no earlier adjudication or recognition by the employer, in any award or adjudication for the purpose of implementation or enforcement thereof, or some ambiguity which required interpretation, which could be treated as incidental to the Labour Court's power under Section 33 C (2), like that of the Executing Courts power to interpret the decree for the purpose of its execution, and the dispute relating to the entitlement is not incidental to the benefit claimed and thus is clearly beyond the scope of proceedings under Section 33 C (2).  The case is squarely covered by the decision given in the cases cited herein before. The petitioner is not liable for making any payment of earned leave encashment, even if any had become due for the payment by the former employee, ( the textile company) in view of Section 3 (7) of the Act No.98 of 1978, prior to the appointed date. The impugned order dated 14.10.1981 is wrong, bad and illegal being without jurisdiction.

13. In view of the above said facts, circumstances, settled law and observations made hereinabove, the impugned order dated 14.10.1981 (Annexure No.5 to the writ petition) passed by respondent no.1 in Misc. Case No.17 of 1981 is hereby quashed.  The writ petition is allowed.  No order as to costs.

Dated: 17.9.2004



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