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PETITIONER:

DENA BANK

Vs.

RESPONDENT:

KIRITIKUMAR T.PATEL

DATE OF JUDGMENT: 19/11/1997

BENCH:

S.C. AGRAWAL, V.N. KHARE

ACT:

HEADNOTE:

JUDGMENT:

THE 19TH DAY OF NOVEMBER, 1997

Present:

Hon'ble Mr.Justice S.C.Agrawal

Hon'ble Mr.Justice V.N.Khare

P.P.Rao, Sr.Adv., Ramji Srinivasan, Shaju Francis,

R.Sasiprabhu, Advs. with him for the appellant

Jitendra Sharma, Sr.Adv., (A.C.), Ms.Gunwant Dara,

Ms.Minakshi Vij, Advs. with him for the Respondent

Raj Kumar Gupta H.V.I.Sharma and A.N.Bardiyar, Advs. for

Intervenors.

J U D G M E N T

The following Judgment of the Court was delivered:

S.C.AGRAWAL, J.:

Special leave granted.

The question that falls for consideration in this

appeal is whether the expression "full wages last drawn" in

Section 17-B of the Industrial Disputes Act, 1947

[hereinafter referred to as as `the Act'] means wages drawn

by a workman at the time of termination of his employment or

wages which he would have drawn on the date of the award.

The respondent was employed as Clerk-cum-Cashier with

the appellant-Bank. After holding an inquiry into charges

relating to misappropriation of funds of the Bank of the

tune of Rs.5,000/- as contained in charge sheet dated June

18, 1983 he was dismissed by order dated July 1, 1986. The

said dismissal of the respondent gave rise to an industrial

dispute which was referred for adjudication to the Central

Industrial Tribunal, [hereinafter referred to as `the

Tribunal']. The tribunal found that the charges were not

established and held that the dismissal of the respondent

was illegal. The Tribunal directed reinstatement of the

respondent in service. The appellant-Bank has filed a writ

petition under Article 227 of the Constitution in the

Gujarat High Court challenging the said award of the

Tribunal and the said writ petition in pending in the High

Court. In the said writ petition the Division Bench of the

High Court on September 11, 1991 passed in interim order

staying the operation of the award on the condition that the

appellant-Bank would comply with the provisions of Section

17-B of the Act and will pay to the respondent during

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pendency of the writ petition wages as per the said

provisions subject to the respondent complying with its

requirement meaning thereby that he will be paid wages last

drawn or which would have been drawn if he was not

suspended. An application was submitted by the respondent

for modification of the said order seeking a direction for

payment of wages as on the date of the award. The said

application was, however, rejected by the Division Bench of

the High Court by order dated October 22, 1991. Subsequently

another application was filed by the respondent whereunder

it was submitted that during pendency of the writ petition

in the High Court settlements had been signed with regard to

wage revision, etc., the last such settlement being dated

14, 1995 and that the said settlement had been implemented

by the appellant-Bank in respect of employees already in

employment. The respondent claimed that he was also entitled

for revision in wage structure including Dearness Allowance

and other perks and perquisites. On the said application the

learned Single Judge on September 26, 1995 passed an order

directing that the respondent shall be paid the wages as

revised by the appellant-Bank including the increments,

D.A., etc. which are granted to all the employees pursuant

to two settlements signed during the pendency of the writ

petition between the banking industry and the All India

Trade Unions which are known as the Fifth and the Sixth

Bipartite Settlements and that arrears be paid to him from

the date of the award accordingly. The Letters Patent Appeal

filed by the appellant-Bank against the said order of the

learned Single Judge was decided by a Division Bench of the

High Court by the impugned judgment dated February 7, 1996

whereby the direction given by the learned Single Judge

regarding wages payable to the respondent has been

maintained but the direction regarding arrears has been

modified and it has been directed that the appellant-Bank

shall deposit all deposit of three years in the name of the

respondent and that from January 1, 1996 onwards the

respondent will be paid according to the order of the

learned Single Judge and that the deposit will abide by the

final result of the Special Civil Application but the

interest accruing on the fixed deposit shall be paid to the

respondent. Feeling aggrieved by the said judgment of the

Division Bench of the High Court the appellant-Bank has

filed this appeal.

Shri P.P.Rao, the learned senior counsel appearing for

the appellant-Bank, has urged that under Section 17-B of the

Act the respondent is only entitled to payment of wages last

drawn on the date of the termination of his employment and

that the High Court was in error in directing that he should

be paid the wages as revised by the appellant-Bank including

the increments, D.A., etc. which are granted to all the

employees pursuant to two settlement between the banking

Industry and the All India Trade Unions which are known as

the Fifth and the Sixth Bipartite Settlements which were

signed during the pendency of the writ petition in the High

Court. It has been urged that the expression "full wages

last drawn" only means the quantum of emoluments actually

drawn by the workman at the time of the termination of his

employment and would not mean the wages which the workman

would be entitled in terms of the award whereby the order of

dismissal has been set aside. In support of his aforesaid

submission the learned counsel has placed reliance on the

following decisions of the various High Court:

1. International Air Cargo Workers Union Vs. International

Airports Authority of India, [1990] 1 LLJ 1192 (Mad.);

2. Daladdi Coop. Agriculture Service Society Ltd. vs.

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Gurcharan Singh & Anr., 1993 (5) SLR 719 (Punjab &

Hary.);

3. Elpro International Ltd. vs. K..B.Joshi & Ors., 1987

Lab.I.C. 1468 at 1472-1473 (Bom);

4. The Kapurthala Central Cooperative Bank Ltd. vs. the

Presiding Officer, Labour Court, Jalandhar, 185 (2) 88

Pun.L.R.74.

Shri Jitendra Sharma, the learned senior counsel, who

was requested to assist the Court as amicus curiae since the

respondent did not chose to appear in spite of notice, has

submitted that the expression "full wages last drawn" does

not connote the amount that was being paid to the workman at

the time of termination of his employment but means the

wages that would be payable to him at the time of order of

reinstatement. In support of his aforesaid submission Shri

Jitendra Sharma has referred to the Objects and Reasons

underlying the enactment of Section 17-B and has urged that

the said provisions have been enacted to give protection to

a workman who having succeeded in obtaining an award from

the Labour Court, Industrial Tribunal or National Tribunal

setting aside the order of termination of his service and

directing that he be reinstated, is not allowed to resume

work because the employer has filed proceeding in the High

Court or in this Court to challenge the said award. The

learned counsel has urged that if the workman is to get only

what he was getting at the time of termination of his

service, whether as subsistance allowance or wages, he gets

no benefit of the award in his favour and is put back to his

position as a suspended or charge sheeted workman

notwithstanding the fact that termination order has been set

aside. Shri Jitendra Sharma has also emphasised that it

takes years to get a matter decided that it could not be

the intention of Parliament in enacting Section 17-B that

workman should only be paid wages that he was drawing

several years ago at the time of the termination of his

service. In support of his submissions Shri Jitendra Sharma

has placed reliance on the following decisions of the High

Courts:

i. Vishveswaraya Iron and Steel Ltd. vs. M. Chandrappa &

Anr., 1994 (84) FJR (Kar);

ii. Carona Sahu Co. Ltd vs. A.K.Munakhan & Ors., 1995 (70)

FLR 25 (Bom);

iii. Kirtiben B.Amin vs. Mafatlal Apparels, 1995 (2) GLR 804

(Guj.);

iv. Macneil and Magor Ltd. vs. 1st Additional Labour Court

and Anr., 1995 (1) Labour Law Notes 1014 (Mad);

v. Fouress Eng. (India) Pvt. Ltd. vs. Delhi Administration

& Ors., 1987 (1) LLJ 485 (Delhi); and

vi. P.Channaiah vs. Dy.Ex.Eng. R.R.Dist. & Ors. 1996 (2)

LLJ 240 (A.P.).

Shri Raj kumar Gupta, the learned counsel for the

Intervenor, has also placed reliance on the decisions

referred to above on which reliance was placed by Shri

Jitendra Sharma and has emphasised the hardship that would

be caused to the workman if the expression "full wages last

drawn" is construed to mean wages that were being drawn by

him at the time of termination of his employment because it

would not take into account the rise in the cost of living

during the period the matter was pending adjudication before

the Tribunal and is under consideration before the High

Court or this Court.

It would be convenient at this stage to set out the

provisions contained in Section 17-B of the Act which reads

as under:

Section 17-B. Payment of full wages

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to workman pending proceeding is

higher courts. - Where in any case

a Labour court, Tribunal or

National Tribunal by its award

directs reinstatement of any

workman and the employer prefers

any proceedings against such award

in a High Court or the Supreme

Court, the employer shall be liable

to pay such workman, during the

period of pendency of such

proceeding in the High Court or the

Supreme Court, full wages last

drawn by him, inclusive of any

maintenance allowance admissible to

him under any rule if the workman

had not bee employed in any

establishment during such period

and an affidavit by such workman

had been filed to that effect in

such Court:

Provided that where it is proved to

the satisfaction of the High Court

or the Supreme Court that such

workman had ben employed and had

been receiving adequate

remuneration during any period or

part thereof, the Court shall order

that no wages shall be payable

under this section for such period

or part, as the case may be."

The objects and reasons for enacting the said

provisions were as follows :

"When Labour Courts pass award of

reinstatement, these are often

contested by an employer in the

Supreme Court of High Courts. It

was felt that the delay in the

implementation of the award cause

hardship to the workman concerned.

It was, therefore, proposed to

provide the payment of the wages

last drawn by the workman

concerned, under certain

conditions, from the date of the

award till the case is fianlly

decided in the Supreme Court High

courts."

It would thus appear that the object underlying the

enacting of the provisions contained in Section 17-B is to

give relief to the workman in whose favour an award of

reinstatement has been passed by the Labour Court and the

said award is under challenge in the High Court of this

Court. The said relief has been given with a view to relieve

the hardship that would be caused to a workman on account of

delay in implementation of the award as a result of the

pendency of the proceedings in the High Court or this Court.

The question for consideration is: what is the extent to

which such relief has been granted to a workman under this

provision? The objects and reason do not indicate an answer

to this question and its answer has to be found in the

provisions of the enactment. Since the expression "full

wages last drawn" in Section 17-B has been construed by the

various High Court in the decisions referred to above we

would briefly refer to the same:

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A Division Bench of the Karnataka High Court in

Vishveswaraya Iron and Steel Ltd. vs. M. Chandrappa & Anr.

[Supra] has held that the words "full wage last drawn" take

into their fold the wages drawn on the date of termination

of the services plus the yearly increment and the D.A. to be

worked out till the date of the award. In taking this view

the learned Judge have pointed out that it is not uncommon

that the proceedings before the Labour Court linger on for

years and in some cases it takes a decade and that if after

a decade the full wages last drawn are to be paid from the

date of the award during the pendency of the proceedings

before the Court at the same rate at which the wages where

last drawn by the workman when he was removed, dismissed or

terminated from the service, it would cause him great

prejudice and injustice and will result in harassment of the

workman and that during the last period of 10 years there

would be escaiations in the cost of living and there would

also be increase in the wages paid to the workman doing the

work of similar nature.

The said decision was followed by learned Single Judge

of the Gujarat High Court in Kirtiben B. Amin vs. Mafatlal

Apparels [supra].

In Carona Sahu Co. Ltd. vs. A.K.Munakhan & Ors [supra],

a Division Bench of the Bombay High Court, after referring

to the decision of the Karnataka High Court Vishveswaraya

Iron and Steel Ltd. [supra], has laid down that the

expression "full wages last drawn" means the full wages

which the workman was entitled to draw in pursuance of the

award and the implementation of which is suspended during

the pendency of the proceedings. The learned Judges have

observed that though the work "drawn" connotes past tense,

it is obvious that the proper construction of the section is

that the workman is entitled to the full wages which the

workman would have been entitled to draw but for the

pendency of the proceedings in the High Court or this Court.

According to the learned Judges every component of wages

payable on the date of the award must be taken into

consideration while determining what were the wages payable

to the workman on the date of the award. It has been held

that this interpretation of the expression "full wages last

drawn" subserves of the object and intention of the

Parliament in enacting Section 17-B of the Act.

In Macneil and Magor Ltd. vs. 1st Additional Labour

Court and Anr. [supra], a learned Single Judge of the Madras

High Court has followed the said decision of the Bombay High

Court in Carona Sahu Co. ltd. [supra]. Similarly in

P.Channaiah vs. Dy. Ex. Eng. [supra] the Division Bench of

the Andhra Pradesh High Court has followed the said decision

of the Bombay High Court in Carona Sahu Co. Ltd. [supra].

The High Court of Punjab & Haryana in Daladdi

Cooperative Agriculture Service Society Ltd. vs. Gurcharan

Singh & Anr., 1993 (5) SLR 719, has, however, taken a

different view. The learned Judge have held that the

provisions in Section 17-B imply that if the workman is not

gainfully employed in any establishment he is entitled to

the payment of wages at the same rate at which he was being

paid immediately before the termination of his services.

According to the learned Judges the legislature while

introduction Section 17-B intended that the workman who

remains unemployed in spite of an award having been passed

by the competent court or Tribunal, should be paid at least

the wages at the rate last drawn by him so that he may be

able to subsist. It has been held that the workman who has

not been reinstated is entitled to payment of wages only at

the rate last drawn by him and not at the same rate at which

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the wages are being paid to the workmen who are actually

working.

The decision of the Delhi High Court in Fouress Eng.

(India) Pvt. Ltd. vs. Delhi Administration & Ors., on which

reliance has been placed by Shri Sharma, does not throw much

light on the meaning of the expression "full wages last

drawn".

The decision of the Bombay High Court in Elpro

International Ltd vs. K..B.Joshi & Ors. [supra] and that of

the Punjab & Haryana High Court in Kapurthala Central

Cooperative Bank Ltd. vs. The Presiding Officer, Labour

Court, Jalandhar [supra], on which reliance has been placed

by Shri Rao do not deal with the meaning of the expression

"full wages last drawn".

In Elpro International Ltd. vs. K..B.Joshi, the

Division Bench of the Bombay High Court was dealing with the

challenge to the validity of the provisions in Section 17-B

on the ground that the same are vague and arbitrary inasmuch

as no provisions is made as to what would happen to the

amount paid if ultimately the employer succeeds and the

award is quashed and set aside and are therefore, violative

of Article 14 of the Constitution. It was also urged that

the said provisions encroach upon the powers of the High

Court and this Court under Articles 226 and 136 of the

Constitution. The High Court has rejected both the

contention. It was held that the absence of a provisions as

to what would happen to the amount paid under Section 17-B

if ultimately the employer succeeds in the litigation does

not make the section either vague or arbitrary because what

is to be paid under Section 17-B is in the nature of

subsistence allowance that is payable under Section 10-A of

the Industrial Employment [Standing Orders] Act, 1946 which

is neither refundable nor recoverable irrespective of the

result of the enquiry. As regards challenge on the ground of

encroachment upon the powers of the High Court under Article

226 and this Court under Article 136 of the Constitution,

the High Court was of the view that Section 17-B only

guarantees to the workman the payment of wages by the

employer during the pendency of the proceedings before the

High Court or the Supreme Court and that too subject to the

conditions laid down by the said section and the proviso,

irrespective of the result of the proceedings and it also

imposes an obligation upon the workman concerned to file an

affidavit before the Court stating that he has not been

employed in any establishment during the pendency of the

proceedings and it also absolves the employer of his

obligation to pay such wages if he is able to prove to the

satisfaction of the Court that the workman had been

otherwise and had been receiving adequate remuneration. The

High Court has observed that Section 17-B nowhere lays down

that in extreme cases it is demonstrated that award passed

is either without jurisdiction or is otherwise a nullity or

grossly erroneous or perverse, the High Court or the Supreme

Court is deterred from exercising its powers under Articles

226 and 136 of the Constitution. On that view the High Court

held that Section 17-B does not in any way encroach upon or

override the powers of the High Court under Article 226 and

this Court Article 136 of the Constitution.

Similarly in the Kapurthala Central Cooperative Bank

Ltd. vs. The Presiding Officer, Labour Court, Jalandhar

[supra] the High Court of Punjab & Haryana considered the

validity of the challenge the Section 17-B as violative of

the provisions of Article 226 of the Constitution and

negativing the said challenge it was held that Section 17-

B does not in any way interfere or restrict the same and

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that the section only guarantees the workers the payment of

wages by the employer during the course of proceeding in the

High Court or the Supreme Court of Course subject to the

safeguard provided for irrespective of the result of the

proceedings.

In International Air Cargo Workers Union vs.

International Airports Authority of India [supra} the

Division Bench of the Madras High Court has expressly stated

that they were not dealing with a case where a workman whose

services have been terminated was ordered to be reinstated

by an award of the Tribunal and that it was a case where the

Tribunal had directed that management to absolve the

workman. Without deciding whether Section 17-B would be

attracted in such a case the High Court while applying the

principles underlying the said section, directly by way of

interim relief, payment at the rate the workmen were being

paid by the contractor and in that context there are

observations to the effect that even if Section 17-B would

be attracted no directions could have been issued to pay

wages more than the last wages drawn.

As per the decisions of the High Court referred to

above the expression "full wages last drawn" in Section 17-

B can mean as under:

(i) wages only at the rate last drawn and not the same rate

at which the wages are being paid to the workman who

are actually working. [Daladdi Cooperative Agriculture

Service Society Ltd. vs. Gurcharan Singh]

(ii) Wages drawn on the date of termination of the services

plus the yearly increment and the Dearness Allowance to

be worked out till the date of the award.

[Vishveswaraya Iron and Steel Ltd. vs. M.Chandrappa &

Anr. and Kirtiben B. Amin vs. Mafatlal Apparels]

(iii) Full wages which the workman was entitled to draw in

pursuance of the award and the implementation of which

is suspended during the pendency of the proceeding

[Carona Sahu Co. Ltd. vs. A.K.Munakhan & Ors., Macneil

and Magor Ltd. vs. 1st Additional Labour Court & Anr.

and P.Channaiah vs. Dy.Eng.]

The first construction give to the words "full wages

last drawn" their plain and material meaning. The second as

well as the third construction read something more than

their plain and material meaning in this words. In substance

these construction read the words "full wages last drawn" as

"full wages which would have been drawn". Such an extended

meaning to the words "full wages last drawn" does not find

support in the language of Section 17-B. Nor can this

extended meaning be based on the object underlying the

enactment of Section 17-B.

As indicated earlier Section 17-B has been enacted by

Parliament with a view to give relief to a workman who has

been ordered to be reinstated under the award of a Labour

Court or the Industrial Tribunal during the pendency of

proceedings in which the said award is under challenge

before the High Court or the Supreme Court. The object

underlying the provision is to relieve a certain extent the

hardship that is caused to the workman due to delay in the

implementation to the workman is in the nature of

subsistence allowance which would not be refundable or

recoverable from the workman even if the award is set aside

by the High Court or this Court. Since the payment is of

such a character Parliament thought it proper to limit it to

the extent of the wages which were drawn by the workman when

he was in service and when his services were terminated and

therefore used the words "full wages last drawn". To read

these words to mean wages which would have been drawn by the

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workman if he had continued in service if the order

terminating his services had not passed since it has been by

the award of the Labour of Industrial Tribunal, would result

in so enlarging the benefit as to comprehend the relief that

has been granted under the award that is under challenge.

Since the amount is not refundable or recoverable in the

even of the award being set aside it would result in the

employer being required to give effect to the award during

the pendency of the proceeding challenging the award before

the High Court or the supreme Court without his being able

to recover the said amount in the event of the awarded being

set aside. We are unable to constitute the provisions

contained in Section 17-B, to cast such a burden on the

employer. In our opinion, therefore, the words "full wages

last drawn" must be given their plain and material meaning

and they cannot be given the extended meaning as given by

the Karnataka High Court Visveswarya Iroon & Steel Ltd.

[supra] or the Bombay High Court in Carona Sahu Co. Ltd.

[supra].

Shri Jitendra Sharma has laid emphasis on the word

"full" in the expression "full wages last drawn" and has

submitted that the said word implies that the last drawn

must be the was which the workman would have drawn under the

award. We are unable to agree. In our opinion, the

expression "full" only emphasis that all the emoluments

which are included in "wages" as defined in clause [rr] of

section 2 of the Act so as to include in "wages" as referred

to in sub-clauses (i) to (iv) are required to be paid. In

this context, it may also be mentioned that in Section 17-B

Parliament has also used the words "inclusive of any

maintenance allowance admissible to him under to him any

rule". These words indicate that maintenance allowance that

is admissible under any rule is required to be paid

irrespective of the amount which was actually being paid as

maintenance allowance to the workman. But with regard to

wages Parliament has used the words "full wages last drawn"

indicating that the wages that were actually paid and not

the amount that would be payable are required to be paid.

As regards the powers of the High Court and the Supreme

Court under Article 226 and 136 of the Constitution it may

be stated that Section 17-B, by conferring a right on the

workman to be paid the amount of full wages last drawn of

the Labour Court, Industrial Tribunal or National Tribunal

in the High Court or the Supreme Court which amount is not

refundable or recoverable in the event of the award being

set aside, does not in any way preclude the High Court or

the Supreme Court to pass a order directing payment of a

higher amount to the workman if such higher amount is

considered necessary in the interest of justice. Such a

direction would be dehors the provisions contained in

Section 17-B and while giving the direction the Court may

also give directions regarding refund or recovery of the

excess amount in the event of the award being set aside. But

we are unable to agree with the view of the Bombay High

Court in Elpro International Ltd. [supr] that in exercise of

the power under Article 226 and 136 of the Constitution an

order can be passed denying the workman the benefit granted

under Section 17-B. The conferment of such a right under

Section 17-B cannot be regarded as a restriction on the

powers of the High Court or the Supreme Court under Article

226 and 136 of the Constitution.

In the present case by his order dated September 26,

1995 the learned Single Judge, while exercising the powers

under Section 17-B, has directed payment of wages as

revised, including the increments, D.A., etc. which are

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granted to all the employee pursuant to the Fifth and Sixth

Bipartite Settlements. The said direction of the learned

Single Judge, which has been upheld by the Division Bench of

the High Court in the impugned judgment, cannot tb upheld

since it amounts to directing payment of wages which would

have been drawn by the respondent if he had been reinstated

and not the full wages last drawn by him.

For the reasons aforementioned, the appeal is allowed

and the impugned judgment of the Division Bench of the High

Court dated February 7, 1996 as well as the order dated

September 26, 1995 passed by the learned Single judge are

set aside, No order as to costs.