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Mitra Prakashan Ltd. & Another v. Labour Court & Others - WRIT - C No. 20002 of 2004 [2005] RD-AH 5023 (27 October 2005)


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                                                                            Court No.38

Civil Misc. Writ Petition No. 20002 of 2004

Mitra Prakashan Ltd. & another  Vs.    Labour Court & others

Hon'ble Vineet Saran, J

The industrial unit of the petitioners was closed down on 13.12.2000. Respondents no. 2 to 61 were workers of the petitioners-unit. The workers did not dispute the closure of the industry. They, however, filed an application under Section 33-C(2) of the Industrial Disputes Act, 1947 before the Labour Court, Allahabad for payment of closure compensation. Several cases were registered. Case No. 36 of 2001 was the leading case. After hearing the parties, the Labour Court passed an award dated 11.2.2002 directing the petitioners to pay closure compensation within three months of the passing of the award, failing which the petitioners would be liable to pay interest at the rate of 10% per month from the date of the award. The review application of the petitioners for reducing the interest was  rejected by the Labour Court. Another application was also filed by the petitioners for correcting the operative portion of the award to the extent that the interest awarded at the rate of 10% per month be corrected as 10% per annum, which was also rejected by the Labour Court. The petitioners have thus filed this writ petition challenging the award dated 11.2.2002 only to the extent that the operative portion of the award be corrected and the interest awarded be made as 10% per annum instead of 10% per month. No other prayer has been pressed before me.

I have heard Sri P.K.Sinha, learned counsel appearing for the petitioners as well as S/Sri A.D.Prabhakar and A.K.Tripathi, learned counsel appearing for the contesting respondents and have perused the record.

The interest awarded by the Labour Court at the rate of 10% per month appears to be unjustified as the same would amount to awarding interest at the rate of 120% per annum, which is highly excessive and thus unsustainable in law. However, considering the fact that the liability for payment of the amount is not disputed and the industry had been closed down on 13.12.2000 and the closure compensation ought to have been paid immediately, the liability for payment of interest for delayed payment would definitely be there.

It is not disputed that after the passing of the said award the first instalment of such payment had been made by the petitioner on 30.1.2003, the second instalment on 13.3.2003 and the final instalment on 22.4.2003. Substantially all the workers have been paid closure compensation. However, because of calculation mistakes some workers have been paid excess amounts,  whereas others have been paid lesser amount. The same may be finalized by the executing authority at the time of making of final payment alongwith interest.

Learned counsel for the parties have agreed that the interest on the amount due to each individual worker, if paid at the rate of 50% of the total amount payable to him would be just and fair, meaning thereby, that in case if the worker was entitled to payment of Rs. 10,000/- as closure compensation, he would be paid an interest amount of Rs. 5,000/- on account of delay in payment.

Accordingly, the operative portion of the award is modified and it is directed that the petitioners shall pay interest of 50% of the total amount of closure compensation to each of its worker on account of delay in payment made by the petitioners. In case if any amount has been recovered from or deposited by the petitioners in pursuance of the award passed by the Labour Court, the same shall be adjusted in accordance with the aforesaid directions and the balance, if any, shall be refunded to the petitioners. In case of any shortfall, the balance may be recovered from the petitioners.

With the aforesaid observations/directions, this writ petition is finally disposed of. No order as to costs.




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