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Judgment
A.K. Mathur, J.—The petitioner by this writ petition has challenged the award dated September 21, 1985 (Ex.6) passed by the Labour Court.
The brief facts which are necessary for the disposal of this writ petition are that the respondent losses incurred by the petitioner vide their meeting held on December 7, 1983. It was decided in that meeting that due to heavy losses the post of Accountant and Store Keeper may be abolished and in accordance with the resolution, the services of the petitioner were terminated and the petitioner was paid the retrenchment compensation along with order of the termination Ex. 1 dated December 12, 1983. The respondent raised an industrial dispute and State referred the following question for decision of the Labour Court.
The Labour Court after hearing both the parties and perusing the record came to the conclusion that the petitioner''s services were terminated on December 12, 1983 and a cheque of Rs. 1915.85 was given simultaneously but that was given with the order at 2.00 p.m. and same could not be encashed on the same day on account of bank being closed, therefore, tribunal found that the amount was not paid to the petitioner simultaneously, as such there is a breach of Section 25F of the Industrial Disputes Act, 1947 and the tribunal set aside the order of termination. In this connection the reliance was placed of the decision of the Madras High Court reported in 1977 LIC 1338 (R. Sankaran v. The Presiding Officer, Additional Labour Court, Madras and Anr.). The second question is that the petitioner was also not paid the full compensation in accordance with the provisions of Section 25F of the Industrial Disputes Act, 1947. This contention was negativedby the tribunal and the tribunal found that the amount of compensation which was calculated in a sum of Rs. 1915.85 being the valid calculation and the termination order cannot be quashed on that count. Aggrieved against this judgment the present writ petition has been filed by the Management.
Mr. Parihar, learned counsel for the petitioner, has strenuously urged before me that a valid cheque tendered along with the termination order by way of compensation should be treated to be a sufficient compliance of Section 25F of the Industrial Disputes Act. The Learned counsel further submitted that the decision given by the Madras High Court in 1977 Lab IC 1338 (supra) has been over-ruled by the Division Bench of the Madras High Court in the case reported in 1977 Factory Law Reports page 403 (Management of Industrial Chemicals Ltd., Madras v. Presiding Officer, Labour Court, Madras and Ors.).
As against this Mr. Trivedi, learned counsel for the respondent, has invited my attention to the decision given by this Court in the case reported in 1984 RLR 981 (RSRTC and Anr. v. Judge, Labour Court, Jaipur and, Anr.).
Now the question before me is that whether any payment made by a cheque for compensation along with the order of the termination can be said to be valid tender or not. Section 25F of the Industrial Disputes Act, 1947 requires that the order of the termination and the amount of compensation should be simultaneous. In the present case the order of termination along with cheque of compensation was tendered at 2.00 p.m. and at 2.00 p.m. the work of the bank is stopped, therefore, this could riot be treated to be a simultaneous payment. In my view this view taken by the tribunal is not correct. Once a termination order is passed accompanied with the correct amount of compensation in cheque is a valid tender. The cheque is a valid tender, simply because the cheque cannot be encashed on that very day when the termination was affected, that will not change the situation that the amount is not paid simultaneously. Simply because that the cheque could not be encashed at 2.00 p.m. from that it cannot be said that the amount was not simultaneous. Some time difficulties can arise on account of making the cash payment, therefore, the cheque can be treated to be a valid tender. Now in case cheque is bounced after day or two, the order of termination will automatically render invalid and the management can be prosecuted for offence u/s 138 of the Negotiable Instruments Act also. Section 138 reads as under:-
Dishonour of cheque for insufficiency, etc., of funds in the account: Where any cheque drawn by a person on an account maintained by him with a banker for payment of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to to twice the amount of the cheque, or with both:
Provided that nothing contained in this Section shall apply unless-
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque failed to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation. - For the purposes of this Section, "debt or other liability" means a legally enforceable debt or other liability."
Therefore, these two checks namely that in case the cheque is bounced back the order will automatically become invalid and secondly that the management will be liable to be prosecuted u/s 138, are safeguards against the management employing dilatory tactics. Therefore, the payment of a cheque along with the order of termination can reasonably be accepted as a valid tender and sufficient compliance of Section 25F of the Industrial Disputes Act, 1947. So far as earlier decision given in Madras High Court in 1977 LIC 1338 (supra), in that case the services of incumbent was terminated and the compensation was paid by cheque and cheque was encashed next day, the court held that this does not amount to simultaneous payment but this view has not been upheld by the Division Bench of the Madras High Court in the case reported in 1977 FLR 403 (supra). The Division Bench over-ruled this decision and has held as under:-
"We, therefore, hold that the passing of the cheque by the company in favour of Sankaran on June 23, 1970 was an effective payment of compensation at that very moment of time, which was also the moment of retrenchment, and hence in compliance with the terms of Section 25F of the Industrial Disputes Act."
Therefore, the view taken by the tribunal on the basis of the over-ruled decision of the Single Bench of the Madras High Court cannot be sustained. Mr. Parihar has also invited my attention to the decision of his Court in the case of Hazari Ram v. The Manti, Khadi Mandir, Bikaner reported in RLW 197 76. This was a case under Payment of Wages Act and the question was that whether memorandum of appeal was accompanied by a certificate of the amount deposited with the authorities or not. In that case the amount was given by a cheque within limitation but the memorandum was not accompanied with certificate. The amount was given by a cheque before filing the appeal and in that context it was held that sufficient compliance of me provisions of the Act has been made though the cheque might have been encashed after expiry of period of limitation for appeal. In that context the learned single Judge has made a reference a the number of decisions given by the Hon''ble Supreme Court that the cheque has been found to be a valid tender.
Mr. Trivedi, learned counsel for the respondent has invited my attention to the decision given in the case of RSRTC v. Judge Labour Court, Jaipur and another reported in 1984 RLR 981. In that case the termination order was passed on June 1, 1982 and drafts were not sent along with the termination order. In that case 130 workmen were retrenched w.e.f. June 1, 1982. None of them was paid his dues Under Section. 25F of the Act on that day and the retrenchment was effected on June 1, 1982. In that context Their Lordships found that sufficient compliance of Section 25F of the Act of 1947 has not been made. Therefore, this case does not provide any assistance so far as the present case is concerned. As in the present case the termination order was passed on December 12, 1983 and cheque was given simultaneously on that very day along with termination order, therefore, in my opinion such tender by cheque on the same day along with order of termination can be said to be a valid tender. Learned counsel for respondent has further submitted that some more dues of the petitioner has not been paid by the management. Though so far as amount of notice and compensation is concerned, same has been found by the tribunal to be paid but the respondent in his reply has mentioned that the dues of salary for December 1, 1983 to December 12, 1983 amounting to Rs. 260.10 and overtime dues of Rs. 153 and dues on earned leave of Rs. 943 are also outstanding and same has not been paid. Though on that account the order of termination cannot be quashed as the one months notice and compensation as required u/s 25F has been rightly calculated and same has been paid. But if any other dues which has been indicated by the respondent in his reply of para No. 4 if they are due, same shall be paid by the respondent within a period of two months from today along with interest @12% from the date of filing of the claim petition before the tribunal i.e. May 1, 1985. Since this amount has not been contested by the respondent either before the tribunal or before this Court by filing rejoinder, therefore, it seems that the petitioner does not contest this dues of the respondent. The aforesaid amount shall be paid within two months otherwise the respondent will be entitled to earn the interest @18%.
This writ petition is allowed in part as indicated above.