D.N. KRISHNAPPA versus THE DEPUTY GENERAL MANAGER on 12 December 2022

[2022] 17 S.C.R. 809

D.N. KRISHNAPPA

v.

THE DEPUTY GENERAL MANAGER

(Civil Appeal No. 9008 of 2022)

DECEMBER 12, 2022

[M. R. SHAH AND C. T. RAVIKUMAR, JJ.]

Industrial Disputes Act, 1947 – s.33-C(2) – Recovery of moneydue from an employer – Award passed ordering reinstatement withback wages – Order stayed during pendency of proceedings –Denial of back wages from date of award – Not justified – Principleof merger – Non-applicability of – Appellant was dismissed fromservice by respondent-bank – Labour Court ordered reinstatementwith 50% back wages vide order dtd.18.07.07 – Eventually, HighCourt confirmed the order of reinstatement but without any backwages vide order dtd. 12.07.13 – SLP dismissed, appellant wasreinstated on 23.09.13 – Appellant again approached the LabourCourt by filing application u/s.33-C(2) claiming back wages fromthe date of award i.e., 18.07.07 till actual reinstatement on 23.09.13,allowed – Order set aside by High Court – Plea of bank that as theoperation of award dtd. 18.07.07 was stayed by the High Courtand continued to be stayed till disposal of the writ appeals on12.07.13, the appellant shall not be entitled to the wages from theaward dtd. 18.07.07 – Also, as per the Bank, the award dtd.18.07.2007 merged with the order dtd.12.07.13 therefore, the saidorder would be enforceable on the principle of merger – On appeal,held: Interim orders are always subject to the final decision – Merelybecause there was an interim order/stay of the order of reinstatementduring the pendency of the proceedings, the appellant cannot bedenied the back wages/wages when ultimately the order ofreinstatement came be confirmed by the Court – Further, principleof merger will also not be applicable as the order of award ofreinstatement was confirmed by the Division Bench which will relyback to the original order passed by the Labour Court – Appellantentitled to the full wages with all emoluments from the date of orderof reinstatement i.e., 18.07.07 to the date of actual reinstatementi.e., 23.09.13, after adjusting the amount already paid under s.17B,ID Act.

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AIndustrial Disputes Act, 1947 – s.33-C(2) – Bombay ChemicalIndustries Vs. Deputy Labour Commissioner & Anr. if applicable –Held: In the said case it is held that an un-adjudicated claim cannotbe the subject matter of proceedings u/s.33-C(2) and in theproceedings u/s.33-C(2), the Tribunal can only interpret the awardor settlement on which the claim is based – In the present case, theBclaim of the appellant was adjudicated upon, thus High Courtmisapplied the said decision to the facts herein – Appellantapproached the Industrial Tribunal by way of an application u/s.33-C(2) for implementation of award dtd. 18.07.07 – Therefore,so far as the order of reinstatement and the wages claimed on theCorder of reinstatement is concerned, the same were alreadyadjudicated upon – Thus, the said decision shall not be applicableto the facts of the case on hand.

Allowing the appeal, the Court

Conclusion

Allowing the appeal, the Court

HELD: 1.1 The order of reinstatement vide award datedD18.07.2007 has been confirmed up to the Division Bench of theHigh Court and even by this Court. What was modified by theHigh Court was the back wages from the date of termination tillthe date of award passed by the CGIT. It was the bank – employerwho obtained the stay order against the order of reinstatementwhich ultimately came to be terminated on 12.07.2013 when theEDivision Bench of the High Court dismissed the writ appeals. Itwas the employer – bank who obtained the stay againstreinstatement and ultimately order of reinstatement attained thefinality. Why should the employee be made suffer, when the bankobtained the stay of reinstatement and when the order ofFreinstatement subsequently came to be confirmed and attainedthe finality? So far as the submissions on behalf of the bank thatthe interim order merged with final order dated 12.07.2013 andtherefore, the appellant is not entitled to claim the back wagesfor the period between 18.07.2007 and 12.07.2013 is concerned,at the outset, it is required to be noted that the interim order isGalways subject to the final order that may be passed finally whileterminating the proceedings. Interim orders are always subjectto the final decision. Therefore, merely because there was aninterim order/stay of the order of reinstatement during thependency of the proceedings, the employee-appellant cannot beHdenied the back wages/wages when ultimately the order of reinstatement came be confirmed by the Court. Similarly, thesubmission on behalf of the bank applying the principle of mergerhas also no substance. In the present case as such the order ofaward of reinstatement has been confirmed by the Division Benchof the High Court. Therefore, the order of reinstatement willrely back to the original order passed by the Labour Court.Merely because the reinstatement order was under challengeand there was a stay of the order of reinstatement during thependency of the proceedings before the High Court, it cannot bea ground to deny the wages to the employee when ultimately theorder of reinstatement came to be confirmed and attained thefinality. [Paras 7, 7.2][817-D-H; 818-A-E]

1.2 Now so far as the submissions on behalf of the bankthat as during the pendency of the proceedings before the HighCourt and for the period during the stay of order of reinstatement,the appellant was paid the last drawn wages under Section 17B ofthe ID Act and therefore he is not entitled to any wages for theperiod during the stay is concerned, there is no substance. Atthe most, whatever is held to be entitled to pay the appellant –employee as wages from the order of award of reinstatement tillactual reinstatement, whatever is paid under Section 17B of theID Act, the same is to be deducted and/or adjusted. Now relianceplaced upon the decision of this Court in the case of BombayChemical Industries considered by the High Court is concerned,as such the High Court has mis-applied the said decision to thefacts of the case on hand. In the present case, the claim of theappellant was adjudicated upon. The appellant approached theIndustrial Tribunal by way of an application under Section 33-C(2) of the ID Act for implementation of award dated 18.07.2007.Therefore, so far as the order of reinstatement and the wagesclaimed on the order of reinstatement is concerned, the samewere already adjudicated upon. In the case of Bombay ChemicalIndustries, it is observed and held that un-adjudicated claim cannotbe the subject matter of proceedings under Section 33-C(2) andin the proceedings under Section 33-C(2), the Tribunal can onlyinterpret the award or settlement on which the claim is based.Under the circumstances, the said decision shall not be applicableto the facts of the case on hand. [Paras 7.3, 7.4][818-C-G]

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A1.3 In view of the above and for the reasons stated, theimpugned judgment and order passed by the Division Bench ofthe High Court allowing the writ petition preferred by therespondent – bank and quashing and setting aside the orderpassed by the CGIT under Section 33-C(2) of the ID Act directingthe bank to pay the wages from 18.07.2007 to 23.09.2013 isBunsustainable and the same deserves to be quashed and set asideand is accordingly quashed and set aside. It is held that theappellant shall be entitled to the full wages with all emolumentsfrom the date of order of reinstatement i.e., 18.07.2007 to thedate of actual reinstatement i.e., 23.09.2013, however, afterCadjusting/deducting the amount already paid under Section 17Bof the ID Act. Present appeal is allowed accordingly to theaforesaid extent. [Para 8][818-H; 819-A-B]

Bombay Chemical Industries Vs. Deputy LabourCommissioner & Anr. (2022) 5 SCC 629 : 2022 (2 ) JTD14 – held inapplicable.

Namer Ali Choudhury & Ors. Vs. Central Inland WaterTransport Corporation Ltd. and Anr. (1977) 4 SCC 575: [1978] 2 SCR 205; M.L. Bose & Company Pvt. Ltd.Vs. Employees AIR 1961 SC 1198; Kunhayammed andEOrs. Vs. State of Kerala and Anr. (2000) 6 SCC 359 :[2000] 1 Suppl. SCR 538 – referred to.

Case Law Reference

From the Judgment and Order dated 30.06.2022 of the High Courtof Karnataka at Bengaluru in Writ Petition No. 7176 of 2021 (L-RES).G

Shailesh Madiyal, Mahesh Thakur, Ajay Kanojiya, Ms. VinayakaS. Pandit, Ms. Vipasha Singh, Ms. Shivani, Akshay Gupta, Advs. for theAppellant.

Rajesh Kumar Gautam, Anant Gautam, Nipun Sharma, SachinSingh, Vidur Ahluwalia, Sumit Sharma, Advs. for the Respondent.H

The Judgment of the Court was delivered by

M. R. SHAH, J.

1. Feeling aggrieved and dissatisfied with impugned judgment andorder dated 30.06.2022 passed by the High Court of KarnatakaatBengaluru in Writ Petition No. 7176/2021, by which, the High Court hasallowed the said writ petition preferred by the respondent - bank and hasset aside the order passed by the Central Government Industrial Tribunal– cum - Labour Court (hereinafter referred to as the CGIT/Labour Court)in an application under Section 33-C(2) of the Industrial Disputes Act,1947 (hereinafter referred to as the ID Act) awarding wages for theperiod from 18.07.2007 to 23.09.2013, the employee – workman haspreferred the present appeal.

2. The facts leading to the present appeal in a nutshell are asunder: - 2.1 That the appellant herein was working with the respondent -bank. In the departmental proceedings he was dismissed from serviceon 27.09.1996. The order of dismissal was challenged by the appellantbefore the CGIT under Section 10(2)(a) of the ID Act. By the awarddated 18.07.2007, the CGIT set aside the order of dismissal and passedan order of his reinstatement with 50% back wages and withholdingfour annual increments with cumulative effect from the date of order ofpunishment. The said award was challenged before the High Court bythe bank as well as the appellant herein. The learned Single Judge byjudgment and order dated 18.04.2013 confirmed the order ofreinstatement, however, reduced the back wages from 50% to 25%. Inthe appeal(s), the Division Bench of the High Court also confirmed theorder of reinstatement passed by the CGIT, howeverheld that theappellant is not entitled to any back wages. The judgment and orderdated 12.07.2013 was the subject matter of Special Leave Petition(s)before this Court. This Court dismissed the Special Leave Petition(s).Thus, the order of reinstatement in terms of award dated 18.07.2007attained the finality. That thereafter, the appellant came to be reinstatedon 23.09.2013.

2.2 That neither was he reinstated earlier in spite of award dated18.07.2007 nor was he paid full wages from the date of awardi.e.,18.07.2007, therefore, he again approached the CGIT by filing anapplication under Section 33-C(2) of the ID Act claiming back wages B

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Afrom the date of award dated 18.07.2007 passed by the CGIT till hisactual reinstatement. The CGIT allowed the said application and directedthe bank – employer to pay the wages due from the date of award to thedate of actual reinstatement. The bank preferred the present writ petitionbefore the High Court. By the impugned judgment and order, the DivisionBench of the High Court has set aside the order passed by the CGITBrelying upon the decision of this Court in the case of Bombay ChemicalIndustries Vs. Deputy Labour Commissioner & Anr.; (2022) 5SCC 629, and has observed and held that CGIT had no jurisdiction todecide the application under Section 33-C (2) of the ID Act. Feelingaggrieved and dissatisfied with the impugned judgment and order passedCby the Division Bench of the High Court, the employee – workman haspreferred the present appeal.

3. Shri Shailesh Madiyal, learned counsel appearing on behalf ofthe appellant has vehemently submitted that in the facts and circumstancesof the case, the High Court has materially erred in setting aside theDorder passed by the CGIT under Section 33-C(2) of the ID Act directingthe bank to pay the wages from the date of order of reinstatement passedby the CGIT vide award dated 18.07.2007 to the date of actualreinstatement i.e., 23.09.2013.

3.1 It is vehemently submitted that the order of reinstatement hadEattained the finality and therefore, the appellant ought to have beenreinstated and/or is entitled to all the benefits including the wages fromthe date of award dated 18.07.2007 till the date of actual reinstatement.

3.2 It is submitted that the High Court has misread and/or mis-applied the decision of this Court in the case of Bombay ChemicalIndustries (supra). It is submitted that the ratio of the judgment inFBombay Chemical Industries (supra) is that an unadjudicated claimcannot be the subject matter of proceedings under Section 33-C (2), andthe CGIT can only interpret the award or settlement on which the claimis based. It is submitted that in the present case what was sought wasimplementation of award dated18.07.2007 as modified by the DivisionGBench of the High Court. It is submitted that therefore, the applicationclaiming the wages and other benefits from the date of award ofreinstatement passed by the CGIT on 18.07.2007 was maintainable.

3.3 Relying upon the decision of this Court in the case of NamerAli Choudhury & Ors. Vs. Central Inland Water TransportHCorporation Ltd. and Anr.; (1977) 4 SCC 575 (para 4), it is submitted that as observed and held by this Court once there is an award andquestion arises as to the amount of money due under the award, thesame would be the subject matter of proceedings under Section 33-C(2) of the ID Act.

3.4 It is submitted that if the impugned judgment and order, theHigh Court interfering with the order of CGIT is upheld and thesubmissions on behalf of the bank is accepted, in that case, the appellant– employee/workman has to suffer for no fault of him by denying thewages from the date of award of reinstatement passed by the CGIT/Labour Court which as such had attained the finality.

3.5 It is submitted that the submissions on behalf of the bank thatbecause there were stay order(s) from time to time after the award waspassed and because the award was the subject matter of challenge beforevarious Courts upto 12.07.2013, the appellant was not required to bepaid the wages from the date of award till the actual reinstatement on23.09.2013 is concerned, it is submitted that as a matter of fact theaward dated 18.07.2007 to the extent of directing the bank to reinstatethe appellant had attained finality and the same has remained un-interferedwith. It is submitted that mere pendency of proceedings does not dilutethe requirement of reinstatement in terms of the award with all itsconsequences including payment of wages.

3.6 Making the above submissions and relying upon the decisionof this Court in case of M.L. Bose & Company Pvt. Ltd. Vs.Employees; AIR 1961 SC 1198, it is prayed to allow the presentappeal.

4. Present appeal is vehemently opposed by Shri Rajesh KumarGautam, learned counsel appearing on behalf of the respondent - bank.It is submitted that in the facts and circumstances of the case as suchthe High Court has not committed any error in quashing and settingaside the order passed by the CGIT under Section 33-C(2) of the IDAct granting wages from the date of award of reinstatement passed bythe CGIT on 18.07.2007 to the date of actual reinstatement. It is submittedthat as such the operation of award dated 18.07.2007 remained stayedby the High Court as the said interim order continued till disposal of thewrit appeals on 12.07.2013. It is submitted that as per the settled positionof law the interim order passed by the High Court always merges withthe final order. It is submitted that thus as in the present case interimstay granted by the High Court on the operation of award dated A

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A18.07.2007 continued till the disposal of the writ appeals on 12.07.2013,therefore, award dated 18.07.2007 as modified by the final order dated12.07.2013 passed by the Division Bench of the High Court becomesfinal and enforceable only on 12.07.2013. It is submitted that therefore,the appellant shall not be entitled to claim back wages for the periodfrom 18.07.2007 to 12.07.2013.B

4.1 It is further submitted by the learned counsel appearing onbehalf of the bank that since award dated 18.07.2007 remained stayedby the High Court till 12.07.2013, therefore, in view of the provisionscontained in Section 17B of the ID Act, the appellant was paid lastdrawn wages amounting to Rs. 3,18,782.36/- for the period during theCperiod the award passed by the CGIT remained stayed. It is submittedthat since the last drawn wages as provided under Section 17B of theID Act have been paid during the period award passed by the CGITremained stayed by the High Court, even for the said period also theappellant is not entitled to full back wages, as is being claimed by theDappellant.

4.2 It is further submitted by the learned counsel appearing onbehalf of the bank that even on the principle of merger the appellantshall not be entitled to any back wages from the date of award i.e.,18.07.2007 till the judgment and order passed by the Division Bench ofEthe High Court. It is submitted that applying the principle of merger, onlythe final judgment and order dated 12.07.2013 passed by the DivisionBench of the High Court shall be executable and enforceable. Relianceis placed on the decision of this Court in the case of Kunhayammedand Ors. Vs. State of Kerala and Anr.; (2000) 6 SCC 359.

F4.3 Making the above submissions and relying upon the abovedecision, it is prayed to dismiss the present appeal.5. We have heard learned counsel appearing on behalf of therespective parties at length.

5.1 The short question which is posed for consideration of thisGCourt is whether the appellant shall be entitled to the full wages from thedate of award of reinstatement i.e., 18.07.2007 passed by the CGIT tothe actual date of reinstatement i.e., 23.09.2013?

6. It is the case on behalf of the bank that as the award dated18.07.2007 of reinstatement passed by the CGIT was stayed by theHHigh Court and continued to be stayed till 12.09.2013, the appellant shall not be entitled to the wages from the date of award dated 18.07.2007. Itis also the case on behalf of the respondent – bank that award dated18.07.2007 ultimately merges with the judgment and order dated12.07.2013 passed by the Division Bench of the High Court and therefore,the order passed by the Division Bench of the High Court would beenforceable on the principle of merger. It is also the case on behalf ofthe bank that during the pendency of the stay of the order of reinstatementdated18.07.2007, the appellant was paid the last drawn wages underSection 17B of the ID Act, the appellant shall not be entitled to anyfurther wages/back wages from the date of the award of reinstatementdated18.07.2007 to the final judgment and order passed by the HighCourt dated 12.07.2013.

7. Having heard learned counsel appearing on behalf of therespective parties and considering the facts narrated hereinabove, itemergers that the order of reinstatement vide award dated 18.07.2007has been confirmed up to the Division Bench of the High Court andeven by this Court. What was modified by the High Court was the backwages from the date of termination till the date of award passed by theCGIT. It was the bank – employer who obtained the stay order againstthe order of reinstatement which ultimately came to be terminated on12.07.2013 when the Division Bench of the High Court dismissed thewrit appeals. As observed hereinabove, it was the employer – bank whoobtained the stay against reinstatement and ultimately order ofreinstatement attained the finality. Why should the employee be madesuffer, when the bank obtained the stay of reinstatement and when theorder of reinstatement subsequently came to be confirmed and attainedthe finality?

7.1 So far as the submissions on behalf of the bank that the interimorder merged with final order dated 12.07.2013 and therefore, theappellant is not entitled to claim the back wages for the period between18.07.2007 and 12.07.2013 is concerned, at the outset, it is required tobe noted that the interim order is always subject to the final order thatmay be passed finally while terminating the proceedings. Interim ordersare always subject to the final decision. Therefore, merely because therewas an interim order/stay of the order of reinstatement during thependency of the proceedings, the employee – appellant cannot be deniedthe back wages/wages when ultimately the order of reinstatement camebe confirmed by the Court.

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A7.2 Similarly, the submission on behalf of the bank applying theprinciple of merger has also no substance. In the present case as suchthe order of award of reinstatement has been confirmed by the DivisionBench of the High Court. Therefore, the order of reinstatement will relyback to the original order passed by the Labour Court. Merely becausethe reinstatement order was under challenge and there was a stay of theBorder of reinstatement during the pendency of the proceedings beforethe High Court, it cannot be a ground to deny the wages to the employeewhen ultimately the order of reinstatement came to be confirmed andattained the finality.

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7.3 Now so far as the submissions on behalf of the bank that asCduring the pendency of the proceedings before the High Court and forthe period during the stay of order of reinstatement, the appellant waspaid the last drawn wages under Section 17B of the ID Act and thereforehe is not entitled to any wages for the period during the stay is concerned,there is no substance. At the most, whatever is held to be entitled to payDthe appellant – employee as wages from the order of award ofreinstatement till actual reinstatement, whatever is paid under Section17B of the ID Act, the same is to be deducted and/or adjusted.

7.4 Now reliance placed upon the decision of this Court in thecase of Bombay Chemical Industries (supra) considered by the HighECourt is concerned, as such the High Court has mis-applied the saiddecision to the facts of the case on hand. In the present case, the claimof the appellant was adjudicated upon. The appellant approached theIndustrial Tribunal by way of an application under Section 33-C(2) ofthe ID Act for implementation of award dated 18.07.2007. Therefore,so far as the order of reinstatement and the wages claimed on the orderFof reinstatement is concerned, the same were already adjudicated upon.In the case of Bombay Chemical Industries (supra), it is observedand held that un-adjudicated claim cannot be the subject matter ofproceedings under Section 33-C(2) and in the proceedings under Section33-C(2), the Tribunal can only interpret the award or settlement on whichGthe claim is based. Under the circumstances, the said decision shall notbe applicable to the facts of the case on hand.

8. In view of the above and for the reasons stated above, theimpugned judgment and order passed by the Division Bench of the HighCourt allowing the writ petition preferred by the respondent – bank andHquashing and setting aside the order passed by the CGIT under Section 33-C(2) of the ID Act directing the bank to pay the wages from18.07.2007 to 23.09.2013 is unsustainable and the same deserves to bequashed and set aside and is accordingly quashed and set aside. It isheld that the appellant shall be entitled to the full wages with all emolumentsfrom the date of order of reinstatement i.e., 18.07.2007 to the date ofactual reinstatement i.e., 23.09.2013, however, after adjusting/deductingthe amount already paid under Section 17B of the ID Act. Present appealis allowed accordingly to the aforesaid extent. No costs.

Divya Pandey(Assisted by : Deepak Panwar, LCRA)

Appeal allowed.

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