S. Venugopal v. The Presiding Officer Labour Court, Ernakulam and Harrisons Malayalam Ltd.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE P.V.KUNHIKRISHNAN MONDAY, THE 26[TH] DAY OF JUNE 2023 / 5TH ASHADHA, 1945** ## **WP(C) NO. 33527 OF 2017** **AGAINST THE ORDER/JUDGMENT IN CP 9/2016 OF LABOUR COURT, ERNAKULAM** ## **PETITIONER:** S.VENUGOPAL AGED 62 YEARS, SON OF M.R SANKARANARAYANA PILLAI, HEAVENLY APARTMENTS, VALIYAKANDAM, KUMILY P.O., IDUKKI DISTRICT - 685 509. BY ADVS. SRI.B.ASHOK SHENOY SRI.K.V.GEORGE SRI.P.S.GIREESH SRI.P.N.RAJAGOPALAN NAIR SRI.RIYAL DEVASSY ## **RESPONDENTS:** 1 THE PRESIDING OFFICER LABOUR COURT, ERNAKULAM, KOCHI - 682 031. 2 HARRISONS MALAYALAM LTD., WALLARDIE ESTATE, VANDIPERIYAR P.O. - 685 533. BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR, SC SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 26.06.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO.33527 OF 2017 2 **P.V.KUNHIKRISHNAN, J. -----------------------------W.P.(C)No.33527 of 2017 ---------------------------------------------Dated this the 26[th] day of June, 2023** ## **JUDGMENT** Petitioner was a workman under the 2[nd] respondent. The petitioner through his union raised an industrial dispute challenging the dismissal of his service and the same was referred for adjudication to the Industrial Tribunal, Idukki as per G.O.(Rt) No.3121/2005/LBR dated 09.11.2005. The Industrial Tribunal, Idukki passed Ext.P1 award finding that the misconduct alleged against the petitioner by the 2[nd] respondent having not been proved, the petitioner is eligible for reinstatement in service with back wages and all other benefits. Thereafter, the 2[nd] respondent reinstated the petitioner in his service with effect from 02.11.2009, without prejudice to their right to challenge Ext.P1 award and simultaneously, the 2[nd] respondent filed W.P.(C)No.934/2010 before this Court, challenging Exhibit P1 award. The above writ petition WP(C) NO.33527 OF 2017 3 was dismissed as evident by Ext.P2 judgment and Ext.P2 judgment was confirmed by the Division Bench of this Court as per Ext.P3 judgment. Thereafter, the 2[nd] respondent did not pay the petitioner, the back wages and other benefits in terms of Ext.P1 award. Hence the petitioner filed a petition under Section 33C(2) of the Industrial Disputes Act 1947, before the 1[st] respondent claiming the benefits thereof due to him from the 2[nd] respondent as also the interest on it at the rate of 10% per annum for the period from 28.09.2009. Ext.P4 is the petition submitted by the petitioner. The 1[st] respondent considered the claim petition and as per Ext.P5 order allowed the petition in part granting the claim for back wages, but declined the claim for interest. Aggrieved by the denial of interest, this writ petition is filed with the following prayers: _“(a) Call for the records, and files leading to Exhibit P5 order from the 1st respondent and quash Exhibit P5 order to the extent it declines and dismisses petitioner's claim for interest on claim of backwages of Rs.7,55,202-02 granted thereunder, for the period from 28.9.2009 until date of Exhibit P5 order, by issuance of writ in the nature of certiorari or any other appropriate writ, order or direction;_ _(b) Declare that petitioner is entitled to interest on claim of backwages of Rs.7,55,202-02 granted thereunder to him, for the_ WP(C) NO.33527 OF 2017 4 _period from 28.9.2009 until date of Exhibit P5 order, at the rate of 10% per annum, as claimed in Exhibit P4 petition, and accordingly modifying Exhibit P5 order;_ _(c) Direct 2nd respondent to pay petitioner, interest at the rate of 10% per annum from 28.9.2009 upto date of Exhibit P5 order, on the claim of backwages of Rs.7,55,202-02, within a reasonable time limit as this Hon'ble Court may deem fit to fix in the facts and circumstances of the case; and_ _(d) Grant such other and further reliefs as are deemed just and necessary in the facts and circumstances of the case including the costs of this proceedings as also the following:”[SIC]_ 2. Heard the learned counsel appearing for the petitioner and the learned Standing counsel appearing for the 2nd respondent. 3. The short point to be decided in this case is whether interest can be allowed for the amount due in a claim petition filed under Section 33C (2) of the Industrial Disputes Act 1947, when the interest is not granted in Ext.P1 award. This point is considered by this Court in detail in **Joseph M.M. v. Labour Court and Another** [2015 (3) KHC 36]. It will be better to extract the relevant portion of the above judgment: “10. The Labour Court, as also the counsel for the respondents, proceed on the premise that proceedings under S.33C(2), is akin to that of an execution Court, under the Code of Civil Procedure. WP(C) NO.33527 OF 2017 5 Undoubtedly, it has been stated oftener than ever, that the proceedings under S.33C is akin to that of an execution. However, it is one thing to say that the power is akin to that of an execution Court and quite another, to assert that it exercises the jurisdiction, conferred on the execution Court, under CPC. The powers granted to the execution Court, under the CPC, is not that which is exercised by the Labour Court under S.33C(2). If that be so, then, definitely one could import the principle that the execution Court cannot go behind the award of a Labour Court; which the claimants under S.33C(2) seeks to execute. Otherwise there is no warrant for such an assumption. 11. Considering the question of limitation under the Industrial Disputes Act. Bombay Gas Company v. Gopal Biva, 1964 KHC 488 : AIR 1964 SC 752 : 1964 (3) SCR 709 : 1963 (2) LLJ 608 : 1963 (7) FLR 709 : 1964 Cur LJ (SC) 83 held that the Labour Court is not a Civil Court and the provisions of the Limitation Act would not be applicable. The said finding was despite the fact that in the earlier part of the judgment the Supreme Court found that a Labour Court under S.33C(2), can decline computation, on the ground that the award, the benefit of which is sought to be computed in terms of money, is a nullity. The said finding was on the premise that S.33C(2) was analogues to execution proceedings. Hence, there is a distinction WP(C) NO.33527 OF 2017 6 insofar as S.33C(2) being found to be analogues to the proceedings under Order XXI CPC; and of identical jurisdictional import. 12. In Town Municipal Counsel, Athani v. Labour Court, 1969 KHC 475 : AIR 1969 SC 1335 : 1969 (1) SCC 873 : 1969 Lab IC 1538 : 1969 (2) LLJ 651 : 1969 (18) FLR 373 the proposition as to the inapplicability of the Limitation Act, to proceedings under the ID Act; was reiterated on the findings that the Courts constituted thereunder, are not Courts under the CPC. In KSEB v. T. P. Kunjaliamma, 1976 KHC 177 : AIR 1977 SC 282 : 1976 KLT 810 : 1976 (4) SCC 634 : 1977 (1) SCR 996, Town Municipal Corporation (supra) stood overruled, insofar as; in a proceeding permitted by an enactment before a Civil Court, Limitation Act was held to be applicable. But the position in Nithyanand M. Joshi v. Life Insurance Corporation, 1969 KHC 504 : AIR 1970 SC 209 : 1969 (2) SCC 199 : 1969 (2) LLJ 771 : 1970 (20) FLR 153 : 1970 (1) SCR 396 stood undisturbed insofar as a Labour Court is concerned. 13. The Labour Court was found to be a special Court constituted under a separate enactment and the Limitation Act was found to be not applicable to such proceedings. There has been considerable deviation insofar as relief to be granted, when delay, that too an untimely delay, is occasioned. The Hon'ble Supreme Court has in recent decisions held the moulding of relief, to be the WP(C) NO.33527 OF 2017 7 discretion of the Court, on grounds of delay. We are not concerned with that question. 14. What is significant is the declaration of the Hon'ble Supreme Court that the Labour Court would not be a Civil Court. While conceding the accepted position that the Labour Court exercises jurisdiction akin to execution proceedings; under S.33C(2), it is to be emphasised that the Labour Court would not be constrained, insofar as the jurisdiction being confined to that, exercised under Order XXI of the CPC. The CPC has been held to be a guide insofar as any adjudication proceeding is concerned. But one cannot limit or restrict the powers of a Special Court; under the provisions of the CPC. The Labour Court hence would not be entitled to fall back on the provisions of S.34 to grant interest when passing an order of payment of backwages nor could it be said that; when such an interest is not granted; under sub-section (2) of S.34, there is a deemed refusal as provided therein; when the decree itself is silent on that aspect. 15. One should pause here to consider provisions of the CPC, which is "an Act to consolidate and amend the laws relating to the procedure of the Courts of Civil Judicature". The entitlement to interest, of a plaintiff, in a suit for recovery, is not under S.34 of the CPC and that would depend upon the contract on which the claim is WP(C) NO.33527 OF 2017 8 based. S.34(1) confers a discretion on the Court to award reasonable interest from the date of suit to the date of decree and future interest from the decree till payment; the latter not exceeding six percent, if the liability is not one arising from a commercial transaction. The interest so awarded, is in addition to "any interest adjudged on such principal sum for any period prior to the institution of the suit". Subsection (2) specifically provides for a deemed refusal, if the decree is silent on the future interest. This incapacities an executing Court under Order XXI, from awarding any interest from the date of decree to the date of payment. Such a fetter does not inhibit a Labour Court under S.33C(2). 16. S.33C(2) reads as under: - "Where any workman is entitled to receive from the employer any money or any benefit which is capable of being computed in terms of money and if any question arises as to the amount of money due or as to the amount at which such benefit should be computed, then the question may, subject to any rules that may be made under this Act, be decided by such Labour Court as may be specified in this behalf by the appropriate Government within a period not exceeding three months." 17. Under the said provision, the workman could seek for computation in terms of money, any benefit which is capable of such WP(C) NO.33527 OF 2017 9 computation. Decisions are legion that such benefit could be one under a settlement or an award, or any other benefit legally due, which is capable of being computed in terms of money. Any money due to a workman from the employer under a settlement or an award or under the provisions of Chapter V - A or V - B is capable of being recovered through an application to the appropriate Government, under S.33C. Sub-section (2) of S.33C is, however, more widely worded. "Any money or any benefit which is capable of being computed in terms of money" could be sought for in such a proceeding. Hence a claim made under an award or a settlement or a benefit which is legally due, and possible of computation in terms of money; would be entitled to be urged under S.33C(2). 18. A learned Single Judge of this Court has in G4S Security Services (India) Pvt. Ltd. v. Satheesh Kumar, 2010 (1) KHC 342 : 2010 (1) KLT 463 : ILR 2010 (1) Ker. 316 considered the entire gamut of decisions on S.33C(2) by this Court and the Hon'ble Supreme Court and found that a claim for backwages, as per an award could be claimed under S.33C(2); to be computed in terms of the Minimum Wages Act. Despite there being a procedure stipulated under the Minimum Wages Act, for recovery of such amounts; it was held that the entitlement to minimum wages as per a notification issued by the appropriate Government was a benefit; which could be WP(C) NO.33527 OF 2017 10 computed in terms of money and which required no separate adjudication or a reference under S.10 of the ID Act. 19. The present proceedings under S.33C(2), is one initiated by the workman for the benefit, which accrued to him under an award. That backwages is a legitimate claim flowing from the award itself; cannot be disputed. Would the Courts be rendered helpless, in providing succour to a workman, by way of interest; if the payment of amounts due under an award is delayed? If the restriction under S.34(2) of the CPC is adopted and there is no grant of interest in the original proceeding; there is definitely a deemed refusal. However CPC on its terms, in the matter of procedure is not adopted to proceedings under the ID Act. Then a delay, whether it be justified or not, would enable the Courts to step in, to ameliorate the prejudice caused to the workman. The learned counsel for the respondent would contend that, if a proper proceeding under S.33C(2) is initiated, then, on an order being passed, there could be future interest granted. If it be so, then why not for the period in which delay was caused; since obviously both would only be a mere mathematical exercise of computation. 20. Interest entitlement, even when specifically provided in a Statute, is on the principles of equity. On a consideration of the facts, occasioning the delay in satisfaction of an award, a Court would be WP(C) NO.33527 OF 2017 11 entitled to consider application of interest on a granted amount, for the period of delay. There is no prohibition that two claims which are possible to be computed in terms of money has to be agitated separately. It cannot also be said that there need to be any adjudication, on the aspect of interest. De hors the provisions of the Interest Act, going by the principles of equity alone, this Court would hold that the claim for interest would be a question of discretion, even under a claim raised under S.33C(2) which has to be considered on the facts, which come out in a particular case. 21. The learned counsel for the petitioner has placed before me a decision of the High Court of Judicature at Mumbai in WP (C) No. 5529/2009 [Prabhavati Ramgarib B. v Divisional Railway Manager]. The learned Single Judge in the said decision found on a an elaborate consideration of the various provisions of the Industrial Disputes Act, Civil Procedure Code and the Interest Act that the High Court has power under Art.226 to grant interest in appropriate cases. While agreeing with the said proposition, this Court would go a step further to find that the Labour Court examining an issue under S.33C(2) could also exercise discretion insofar as the award of interest looking at the facts and circumstances of the case. 22. A brief glance into the decisions cited by the Bombay High Court is enlightening. Trojan & Co. Ltd. v. RM.N.N. Nagappa Chettiar, WP(C) NO.33527 OF 2017 12 1953 KHC 345 : 1953 SCR 789 : AIR 1953 SC 235 : 1953 (1) MLJ 729 : 1953 (23) Comp Cas 307 was a case in which damages was claimed along with interest. The damages were claimed by the client of a stock - broker, for advising purchase of shares in a Company, without proper disclosure, and hence fraudulently. After affirming the award of damages, but with modification of the quantum; the grant of interest was also made on the reasoning: "We think it is well settled that interest is allowed by a Court of equity in the case of money obtained or retained by fraud". The following extract from the opinion of the Privy Council in Johnson v. Rex, 1904 AC 817 was quoted with approval: "In order to guard against any possible misapprehension of their Lordships' views they desire to say that in their opinion there can be no doubt whatever that money obtained by fraud and retained by fraud can be recovered with interest, whether the proceedings be taken in a Court of equity, or a Court of law, or in a Court, which has jurisdiction both equitable and legal." 23. Satinder Singh v. Amrao Singh, 1961 KHC 593 : 1961 (3) SCR 676 : AIR 1961 SC 908 considered an appeal from the judgment of the High Court, which declined interest for the compensation awarded under the East Punjab Requisition of Immovable Property (Temporary Powers) Act, 1948; on the ground that the Statute excluded the WP(C) NO.33527 OF 2017 13 provision for interest under the Land Acquisition Act of 1894. On the aspect of exclusion, it was held that: "Stated broadly the act of taking possession of immovable property generally implies an agreement to pay interest on the value of the property and it is on this principle that a claim for interest is made against the State." Again quoting the Privy Council in Inglewood Pulp and Paper Co. Ltd. v. New Brunswick Electric Power Commission, 1928 AC 492, it was held: "but for all that, the owner is deprived of his property in this case as much as in the other, and the rule has long been accepted in the interpretation of Statutes that they are not to be held to deprive individuals of property without compensation unless the intention to do so is made quite clear. The right to receive the interest takes the place of the right to retain possession and is within the rule." Satinder Singh (supra) was followed in Sovintorg (India) Ltd. v. State Bank of India, 1999 (6) SCC 406 which held so: "Interest cannot be claimed under S.34 of the Civil Procedure Code as its provisions have not been specifically made applicable to the proceedings under the Act. We, however, find that the general provision of S.34 being based upon justice, equity and good conscience would authorise the Redressal Forums and Commissions to also grant interest appropriately under the circumstance of each WP(C) NO.33527 OF 2017 14 case. Interest may also be awarded in lieu of compensation or damages in appropriate cases. The interest can also be awarded on equitable grounds as was held by this Court in Satinder Singh v. Umrao Singh." No pleading on fraud arises herein. But the principles stated in the afore cited decisions would squarely apply in considering the grant of interest on principles of equity. 24. The facts which led to the dismissal and the consequent setting aside of the dismissal, by the Industrial Tribunal, was referred to above. The Industrial Tribunal had found that the workman is entitled to reinstatement with backwages as early as in 1994. The writ petition was filed by the management as OP No. 15787/1995, which was dismissed on 05/01/2005. The petitioner moved an application for wages under S.17B and pursuant to a specific direction issued in the Original Petition, the petitioner was granted reinstatement in February, 1996. There would have been no cause for the petitioner to file an application under S.33C(2) at that point of time for reason of the pending Original Petition. Subsequently, the Original Petition stood dismissed on 05/01/2005 and WA No. 840/2006 was filed which was dismissed on 31/01/2006. In the Writ Appeal, there was a stay in operation. The SLP also stood dismissed on 2007. WP(C) NO.33527 OF 2017 15 25. The learned counsel for the respondent management would argue that a claim having not been raised at any point of time, the workman would not be entitled to interest on the said amounts, during the period in which the management had been validly prosecuting, the available remedies before the higher Courts. The petitioner retired while the proceedings were pending and even after the judgment in the SLP, there was a further delay of two years in approaching the Labour Court. On facts there would be no reason why this Court should exercise discretion to grant interest, is the argument. 26. On a specific query, as to why the management did not, voluntarily pay the backwages, the learned Counsel would argue that no prudent person would do that, especially in the circumstance of a valid proceeding having been instituted against the award, in which there was a stay of the award. The prudent litigant who choses not to comply with an order of the Court and challenge the same before the higher forums without complying with the direction in the award, on the basis of the stay orders issued by the higher forums should also be willing to take the risk of the consequences, which would flow on the available remedies being exhausted to his detriment. 27. On facts it has to be noticed that the workman had been denied payment of the backwages he was granted in 1994 till 2011; WP(C) NO.33527 OF 2017 16 when the management paid the amounts as per the order of the Labour Court under S.33C(2). If it is held that the claim of interest is not sustainable then, the consequence of such finding would be that a management could with ceaseless impunity refuse to comply with an award passed by the Labour Court, till all the existing remedies are over and then at the end of the day without any reference to the passage of time, pay the amounts as awarded in the distant past. That, is not the intention of the Legislature; in providing for a separate remedy with separate procedure as also separate forum, for adjudication of Industrial Disputes which has been taken out of its normal realm under the civil law. 28. Just as has been held in the cases relating to compulsory acquisition of land; the right to receive interest takes the place of the right to have received wages when it was due. The entitlement arises at the time when the employee was illegally kept away from employment, and deprived of his wages. Levy of interest, inter alia, takes into account the diminution of money value. Bereft of any technicalities; what Rs.1 lakh could have achieved 20 years back cannot at all be compared to what it could purchase now. Interest compensates that, to an extent. 29. Principles of equity definitely, commend grant of interest when the management choses not to comply with an award of the WP(C) NO.33527 OF 2017 17 Labour Court on the basis of valid proceedings before a higher forum. There can be no question, that the management is entitled to challenge orders adverse to itself, before the appropriate forum in appeal or revision as provided by law. The specific provisions for grant of an interim order, is also based on the principles of equity since the party approaching the higher forum should not be prejudiced insofar as having to comply with an order, which he expects to get overturned in an appeal. By rote, the specific averments made in every affidavit accompanying an interim application for stay, is that "the applicant has a reasonable belief of success in the appellate forum and hence the appellant would be prejudiced insofar as the compliance is enforced when the challenge against the order is pending". The undisputed corollary would be that, when against the reasonable expectation of the appellant, the appellate forum upholds the impugned order, necessary consequences would follow. 30. The reasonable belief stands dispelled by the appellate order and the reasonable expectation of the opposite party, who was deprived of the fruits of the order, at the proper time, would be; some compensation for the delay caused, by an unsuccessful appellate or revisional proceeding. "He who seeks equity must do equity". The grant of interest compensates the loss caused to the workman and WP(C) NO.33527 OF 2017 18 repairs the injury occasioned by deprivation of lawful employment and wages due at a distant, earlier point of time. Equity is not a one way street, nor are benefits legally admissible always found between the pages of an enactment / legislation. The guiding principles in S.34 of the CPC would be the grant of interest, to a person who is made to wait, to reap the benefits of an order; by reason of the opposite party having availed an appellate remedy. [2002 (2) KLT SN 6 (Case No. 6) (Co - operative Sugars Ltd. v. Noorudeen)]. 31. On the above reasoning, this Court finds that the claim of interest made by the petitioner is to be allowed.” 4. In the light of the above judgment, I am of the considered opinion that the petitioner is entitled to interest. The counsel appearing for the 2nd respondent relied on the judgment of the Bombay High Court in **Municipal Council, Bhandara v. Vimal** [2014 (2) Mh.L.J. 904], the decision of the Calcutta High Court in **Director of Transport v. General Secretary State Transport Employees' Union, Port Blair** [2010 SCC OnLine Cal 2562] and also the judgment of the Delhi High Court in **Indraprashtha Power Generation Co. v. Ishwari Devi** [2007 (99) DRJ 485]. The counsel also relied on the judgment of the Madhya Pradesh WP(C) NO.33527 OF 2017 19 High Court in **Gram Panchayat Bahadurpur v. Mohammad Ummar Khan** [2011 SCC OnLine MP 1943]. 5. In the light of the dictum laid down by this Court in **Joseph M.M** 's case (supra), I am of the considered opinion that the decision of the other High Courts cited by the learned counsel appearing for the 2nd respondent need not be considered. The point raised by the petitioner in this writ petition falls squarely within the facts in **Joseph M.M** 's case (supra). Even though the Labour court considered the dictum laid down by this Court in **Joseph M.M** 's case (supra) in Ext.P5 order, it is stated that, in the light of the judgment of the Apex Court in **Rameshwar Das Gupta v. State of U.P. and another** [AIR 1997 SC 410], the dictum laid down in **Joseph M.M** 's case (supra) is not applicable. While deciding these type of matters, the Labour court has to consider the facts of the case. A mere perusal of the facts in **Rameshwar Das Gupta** 's case (supra) will show that, it was a case in which an execution petition filed under Order 21 of the Civil Procedure Code was the issue. This Court in **Joseph M.M** 's case (supra) considered the distinction between the execution petition filed as per Order 21 WP(C) NO.33527 OF 2017 20 of the CPC and a claim petition filed under Section 33C(2) of the Industrial Disputes Act. I am of the considered opinion that the Supreme Court judgment relied in Ext.P5 order is not at all applicable to the facts of the case. But the principle laid down by this Court in **Joseph M.M** 's case (supra) is squarely applicable. Upshot of the above discussion is that the prayers in this writ petition is to be allowed. Therefore, this writ petition is allowed in the following manner: i. Ext.P5 order to the extent it declines the petitioner's claim for interest from 28.09.2009 until date of Ext.P5 order, is quashed. ii. It is declared that the petitioner is entitled to interest on an amount of Rs.7,55,202/-(Rupees Seven lakhs fifty five thousand two hundred and two only) @ 9% p.a. from 28.09.2009 till 10.05.2017 which is the date on which Ext.P5 order is passed. Sd/- **P.V.KUNHIKRISHNAN JUDGE** DM WP(C) NO.33527 OF 2017 21 ## **APPENDIX OF WP(C) 33527/2017** PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF AWARD DATED 28.8.2009 PASSED BY INDUSTRIAL TRIBUNAL, IDUKKI,I.D NO.35 OF 2005. EXHIBIT P2 TRUE COPY OF JUDGMENT DATED 24.7.2015 IN W.P(C) NO.934 OF 2010 BEFORE THE HON'BLE COURT. EXHIBIT P3 TRUE COPY OF JUDGMENT DATED 10.2.2016 IN W.A NO.2691 OF 2015 BEFORE THIS HON'BLE COURT. EXHIBIT P4 TRUE COPY OF PETITION DATED 10.3.2016 FILED BY PETITIONER BEFORE THE 1ST RESPONDENT, AS CP NO.9 OF 2016, WITHOUT ANNEXURES. EXHIBIT P5 TRUE COPY OF ORDER DATED 10.5.2017 PASSED BY 1ST RESPONDENT, IN CP NO.9 OF 2016. RESPONDENTS EXHIBITS : NIL //TRUE COPY// PA TO JUDGE