Merla Jagannayakulu vs The Presiding Officer, Labour Court, Madras and Others

(1) The fourth respondents on the ground that he had been retrenched from the service of the fifth respondent of which the petitioner was a partner

applied to the Labour Court, Madras under S. 33-C(2) of the Industrial Disputes Act, for computation of the benefits of retrenchment

compensation, notice pay and arrears of wages. The fifth respondent was a firm of partnership constituted on or about 25-9-1958. On 12-9-

1959, the petitioner went out of the firm and ceased to be a partner, as he claims. The first firm was engaged in production of a picture by name

Samajam"" in Telugu. The fourth respondent claimed that he was employed in the from April 1958 to December 1959, and, on 31-12-1959, the

management terminated his service without any reason and without any notice. He claimed Rs. 200 as retrenchment compensation, another sum of

Rs. 200 in lieu of notice, the sum being his salary for a month and Rs. 4200 as arrears of salary from April 1958 to December 1959. The labour

Court allowed the entire claim. the petitioner states that he, having gone out of the partnership as early as September 1959, knew nothing about the

proceedings under S. 33-C(2) and he had no notice of them. The first notice that he had was in or about August 1962, when the order of the

Labour Court was sought to be executed against him under the provisions of the Revenue Recovery Act by the Collector of East Godavari, on a

request for the purpose from the Collector of Madras. He has, therefore, applied to this court to quash the order of the Labour Court.

(2) It is argued for the petitioner that, nowhere in its order, the labour court has directed its mind to find whether this was a case of retrenchment at

all. I has not found that the services of the fourth respondent were dispensed with on the ground of surplus labour. It is only in such a case,

according to the petitioner, the termination could be called as retrenchment.

(3) I think this contention is well founded, in The Management of Murugesa Naicker Co. Vs. The Presiding Officer, Labour Court and Others, this

court held that termination of services in order to be retrenched should be of surplus labour and in an industry which was continuing and not closed

or transferred. E.C.P. Rathinaswami Nadar Vs. The Presiding Officer, Labour Court and Another, also took the same view. In this case, as in the

first of those cases, the labour court assumed that it automatically followed from its finding that the services of the workman had been terminated

that he was retrenched from service. That is a misdirection, and the labour court''s order in so far as it related to notice pay and retrenchment

compensation, should be quashed.

(4) The further contention for the petitioner is that the lower court had no jurisdiction to compute arrears of salary. In Daniel Dorairaj Vs.

Management of the Buckingham and Carnatic Co. Ltd., Madras and Another, this court, dealing with the scope of S. 33-C expressed the view

that there was no special reason why sub-section (2) of Sec. 33-C should be read de hors the purpose of the section, namely to provide a

machinery for speedy execution and as comprehending any benefit whatever awarded outside the provisions of the Industrial Disputes Act. I held

that the words ""any benefit"" in S. 33-C(2) meant only that which flowed from a settlement or an award or under the provisions of Ch. V-A of the

Industrial disputes Act. But Daniel Dorairaj, No. 254 M.O.C. B and C Mills, General Secretary, B and C Mills Staff Union Vs. Management of

the Buckingham and Carnatic Mills Co. Ltd. and Another, which was an appeal from Daniel Dorairaj Vs. Management of the Buckingham and

Carnatic Co. Ltd., Madras and Another, took a different view following The Central Bank of India Ltd. Vs. P.S. Rajagopalan etc., .The learned

Judges referring to the view in Daniel Dorairaj Vs. Management of the Buckingham and Carnatic Co. Ltd., Madras and Another, observed:

The view taken by the learned Judge can no longer be supported having regard to the decision in The Central Bank of India Ltd. Vs. P.S.

Rajagopalan etc., . Their Lordships of the supreme Court, after exhaustively dealing with the scope of the section, held that sub-section (2) of S.

33-C was wider in scope than sub-section(1)"".

Daniel Dorairaj Vs. Management of the Buckingham and Carnatic Co. Ltd., Madras and Another, was a case in which S. 33-C(2) was invoked

for computing the benefit arising from a private arbitration award. It has, therefore, to be taken that sub-section (2) of S. 33-C is wider in scope

than sub-section (1) and not confined to computation of the benefits arising out of an award, settlement or under the provisions of Ch. VA of the

Industrial Disputes Act. But how wider is sub-section (2) and what classes of cases will fall within its ambit is a matter which has to be decided in

each case, and it is not possible to comprehensively lay down the classes of cases which may fall within its ambit. In fact in The Central Bank of

India Ltd. Vs. P.S. Rajagopalan etc., the supreme Court considered such an attempt to be not desirable. This is what the Supreme Court

observed:

''Thus, our conclusion is that the scope of S. 33-C(2) is wider than S. 33-C(1) and cannot be wholly assimilated with it, though for obvious

reasons, we do not propose to decide or indicate what additional cases would fall under S. 33-C(2) which may not fall under S. 33-C(1)"".

But, their Lordships, at the same time, indicated:

If an employee is dismissed or demoted and it is his case that the dismissal or demotion is wrongful, it would not be open to him to make a claim

for the recovery of his salary or wages u/s 33-C(2). His demotion or dismissal may give rise to an industrial dispute which may be appropriately

tried, but once it is shown that the employer has dismissed or demoted him, a claim that the dismissal or demotion is unlawful and, therefore, the

employee continues to be the workman of the employer and is entitled to be benefits due to him under a pre-existing contract, cannot be made

under S. 33-C(2).

This, no doubt, is a case where the fourth respondent claimed to have been retrenched from service. I have already held, that, in the absence of a

finding that his termination of service was consequent upon the fact that he became a surplus, his claim did not fall within Ch. VA. He is no longer

an employee of the firm; but he could have raised an industrial dispute on his non-employment. He is relying on his former contract of employment.

He will have other remedies to realise his arrears of salary. In my opinion, to such a case, S. 33-C(2) will not be applicable for computation of

arrears of salary. In fact, there appears to have been no dispute as to the quantum of salary per month which the fourth respondent was receiving,

and hardly any problem can arise which could justifiably be brought under sub-section (2) of S. 33-C. No computation of any benefit in terms of

money would arise in this case.

(5) On that view, the petition is allowed, and the order of the Labour court is quashed. There will be no order as to costs.

(6) Petition allowed.