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Judgment
T. Venkatadri, J.—An important and interesting question of law arises in these writ petitions namely whether the receipts passed by the
erstwhile workmen to the management in full settlement of all their claims at the time of the closure of the business would estop them from claiming
the full statutory benefits conferred on them under the Industrial Disputes Act.
The petitioner in all these writ petitions is the management of Messrs. Andhra Laundry. There was an industrial dispute between the management
of the Laundry and its workmen, and the Labour Court, Madras passed an award, by consent of parties, in I.D. No. 32 of 1962 relating to
demands for revision of pay-scales, payment of dearness allowance and for the introduction of a gratuity scheme. The management carried out the
obligations undertaken by it in that award. However, in July, 1963, the management did not find it possible to continue the business and decided to
close the Laundry. That was mainly because the proprietor of the Laundry was incapacitated to manage the business due to loss of vision of his
eyes. Accordingly, the management issued a notice of closure dated 27th June, 1963 informing the workmen that it had decided to close down the
business in accordance with Section 25-FFF of the Industrial Disputes Act with effect from 1st August, 1963 and that the workers would be paid
all their dues in accordance with law on and from 30th July, 1963 during working hours. All the Workmen received their wages, retrenchment
compensation and gratuity from the management. All the workmen passed individual receipts for having received the sums mentioned therein from
the management of Andhra Laundry towards retrenchment compensation, gratuity and arrears of wages in full quit of all claims including
reinstatement in view of the closing down of the Laundry from 31st July, 1963.
The very next day, the Tamilnadu Employees'' Union sent a communication to the management informing it that the workmen had received their
amounts under protest, that until they were paid their wages according to law they would offer satyagraha and picketing in front of the shop of the
Laundry. There is '' no evidence that the Union carried out the threat as mentioned in its communication. But the erstwhile workmen filed claim
petitions before the Labour Court, Madras, u/s 33-C (2) of the Industrial Disputes Act, claiming computation of the benefits of retrenchment
compensation, gratuity and leave wages under the Act after giving credit to the amount received from the management just on the eve of closure of
the business.
These petitions were resisted by the management that the workmen Were paid closure compensation, gratuity and arrears of wages, that each
of the Workmen had passed a stamped receipt in full and final settlement of all his claims, that even before the closure of the business a notice of
closure was sent to them together with the details of rates of wages, compensation and gratuity due to them and that, having received the amounts
in full settlement of their claims, they could not file any petition to claim the alleged balance of amount due to them and that it was no longer open to
them to go behind the same and make further claims on the management.
The Labour Court found that the workmen received the amounts under protest and passed an order for the amounts due to them after giving
credit to the amounts paid by the management before the closure of the business.
The management has filed the present writ petitions questioning the legality of the order passed by the Labour Court. The main contention of the
management is that the Whole matter was summarily disposed of by the Presiding Officer, Additional Labour Court, that it has not dealt with the
legal significance of the receipt passed by each of the workmen in full settlement of his claim and that therefore the order passed by the Labour
Court suffers from an apparent error.
The point for consideration, therefore, is whether the workmen are entitled to claim the statutory benefits under the Industrial Disputes Act,
when they have once received amounts and passed receipts in full and final settlement of their claims With full knowledge of fights.
The respondents-workmen admit that they have passed receipts in full settlement of their claims. But now they contend that they received the
amounts under protest. It is common case that the management nearly a month before the closure of the business, issued notice of closure to each
of the workmen together with a statement of wages, compensation and gratuity he would be entitled to. The workmen did not protest to the
management about the correctness of the amount shown in the statement. Nor did the Union give any notice to the management questioning the
propriety and legality of the amounts arrived at in the statement. The Union gave notice to the management only after the erstwhile workmen
received the amounts due to them and passed the receipts aforesaid. A copy of the notice of closure was also sent to the Union. If really the Union
was interested in its members, it could have protested about the correctness of the figures mentioned in the statements sent to the workmen
together with a copy of the notice. Having allowed the members to receive the payments and pass the receipts in full settlement of their claims, it
does not appear to be fair on the part of the Union to question the propriety of the payment of closure compensation by the management. In their
petitions filed u/s 33-C (2) of the Act, the Workmen did not allege any coercion, or undue influence of practice of fraud on them by the
management. Further, the workmen did not plead in their petitions that they received the amounts from the management under protest. It is also
common knowledge that the amounts were disbursed in the presence of a third party, R.W. 1, the proprietor of Vinayakar Medical Hall, situate
very near the Andhra Laundry. He has stated in his evidence that he attested Exhibit R-1 and the stamped receipts acknowledging the receipt of
payment in full settlement of the claims. He has stated in his evidence that he was sent for by the Proprietor, that he translated the contents of the
receipts as per the request of the workers and that moneys were not received under protest. The Presiding Officer of the Labour Court has not
believed the evidence of R.W. 1. He has stated ""disbelieving the evidence of R.W. 1 and believing the evidence of the petitioner (workmen) I find
that the petitioner had not received on 1st August, 1963 the amount from the management in full and final settlement of his claim and that he had
received it only under protest."" The Presiding Officer of the Labour Court has not assigned any reasons for disbelieving the evidence of R.W. 1. In
R.V. Agricultural Land Tribunal (1960) 2 All E.R. 518, the Queens'' Bench Divison has observed:
There is a clear distinction between a tribunal that acts without jurisdiction and one which goes wrong in law while acting within its jurisdiction, e.g.,
in acting on no evidence or in acting on evidence which ought to have been rejected or in failing to take into consideration evidence which ought to
have been considered.
In State of Orissa v. Murlidhar AIR 1963 S.C. 404, their Lordships of the Supreme Court have held that it is open to the High Court to find out
whether there is evidence or not to justify the conclusion. Their Lordships of the Supreme Court have held in Union of India (UOI) Vs. H.C. Goel,
, that the High Court cannot consider the question about the sufficiency or adequacy of evidence in support of a particular conclusion, that it is a
matter which is within the competence of the authority which deals with the question but the High Court can and must enquire whether there is any
evidence at all in support of the conclusion.
Even assuming that the Labour Court has disbelieved the evidence of R.W. 1 for valid reasons, still we have to consider the effect in law of
passing receipts in full and final settlement of their claims by the workmen. In full and final settlement means termination of a disputed matter by
adoption of terms agreeable between the parties the parties may express their consent to receive the agreed amount. Even assuming that a person
is entitled to a much more amount under the Act, still he can give his approval to take a lesser amount. The point for consideration is whether he
can question that what he received is not in accordance with the law. Learned Counsel for the management contends that parties can always
contract themselves out of the statute or can contract themselves out of the rights given to them by the statute, and that, once they waive the
benefits conferred on them, they are estopped by their conduct from setting up a defence. Where a statute prescribes that a contract shall be in a
particular form, or shall or shall not contain certain terms the statutory form must be followed. But in the absence of express prohibition to the
contrary, the statutory terms may be waived by the parties to the contract. But the conditions in the statute may be imposed in such terms that
waiver is impossible. In the instant case under the Industrial Disputes Act, the question for consideration is whether the parties are prevented or
prohibited from entering into a contract contrary to the statute. In Melliss v. Shirley Local Board (1885) L.R. 16 Q.B.D. 446, Bowen, L.J. said:
We have to find out upon the construction of the Act whether it was intended by the Legislature to prohibit the doing of a certain act altogether, or
whether it was only intended to say that, if the act was done, certain penalties should follow as a consequence. If you can find out that the act is
prohibited, then the principle is that no man can recover in an action founded on that which is a breach of the provisions of the statute.
Now the relevant provision in the Industrial Disputes Act is Section 25-FFF and it provides that where an undertaking is closed down for any
reason whatsoever every workman who has been in continuous service for not less than one year in that undertaking immediately before such
closure shall be entitled to notice and compensation in accordance with the provisions of Section 25-F, as if the workman had been retrenched.
While construing that section, their Lordships of the Supreme Court in Hatisingh Mfg. Co. Ltd. and Another Vs. Union of India (UOI) and Others,
, have observed that it is not a condition precedent to pay closure compensation or give notice before the closure of the business, though no doubt,
if the procedure is not followed, certainly an industrial dispute can be raised to claim closure compensation u/s 25-FFF and that on the other hand
payment of retrenchment compensation and serving of notice or payment of wages in lieu of notice are conditions precedent to retrenchment of
workmen u/s 25-F. In B.N. Elias and Co. Private Ltd. Vs. Fifth Industrial Tribunal of West Bengal and Others, , certain workmen were
retrenched. They were not paid retrenchment compensation immediately but it was paid after one month of the retrenchment. The concerned
workmen received the compensation in final settlement. In View of the fact that the retrenchment was effected without complying with the statutory
provisions contained in Section 25-F of the Act, the Tribunal directed payment of one month wages by way of compensation. When it was urged
that the concerned workmen were estopped from demanding any further payment since they were paid in final settlement, it was held by the
Calcutta High Court that the concerned workmen were not estopped from receiving such payments even though they had received the amounts in
full settlement and that there could not be any estoppel against a statute.
There seems to be a difference in the wording of the sections between retrenchment compensation and closure compensation. In the case of
retrenchment, the parties cannot Waive payment of compensation or notice; but it appears that the parties can, in the case of closure
compensation, contract themselves out of the statute. This can be seen by looking into the provisions of some analogous statutes; where specific
provision has been made that the parties cannot contract themselves out of the statute. For instance, the Minimum Wages Act, Section 25 provides
that any contract or agreement relinquishing or reducing the employee''s right to a minimum rate of wages is null and Void. Similarly Section 23 of
the Payment of Wages Act provides that any contract or agreement whereby an employed person relinquishes any right conferred by that Act is
null and Void in so far as it purports to deprive him of such right. Section 1.7 of the Workmen''s Compensation Act provides that any contract or
agreement entered into by a workman with his employer relinquishing any right of compensation from the employer for personal injury arising out of
or in the course of employment is null and void in so far as it purports to remove or reduce the liability of any person to pay compensation under
the Act. Again, in the Payment of Bonus Act, Section 10 says that every employer shall be bound to pay to every employee in an accounting year
the. minimum bonus whether there are profits in the account year or not. But in the Industrial Disputes Act, as far as closure compensation is
concerned there appears to be no provision preventing the parties from contracting out of the statute.
The passing of receipts by the erstwhile employees in full and final settlement of their claims amounts in law to an act of waiver, estoppel or
election. I do not think that the act of the workmen in this case will amount to election, since election always contemplates the existence of two
remedies. But it may amount to waiver or estoppel. It may be waiver, because it is an intentional act with the full knowledge thereof. It is a distinct
act done by the workmen. The signing of the stamped receipts in full and final settlement of their claims is an intentional act, the intention being to
treat the matter as if the condition did not exist or as if the breach of condition had not occurred. The workmen signed the stamped receipts with
full knowledge of their claims. The conduct of the workmen in refuting their own receipts is an act of approbation and reprobation. The conduct of
the workmen may also amount to estoppel; for, they were aware of their rights under the Act and they had sufficient time either to reject the terms
offered by the management and insist upon the statutory benefits under the Act or accept the terms offered by the management. When once the
workmen passed receipts acknowledging the payment in full settlement of their claims, they are estopped from putting forth a claim for the statutory
benefits. I am clearly of the view that it is a case where the Workmen, by receiving the payments and passing the stamped receipts in full and final
settlement of all their claims, have deliberately contracted themselves out of the statute. They have thereby waived their right to claim the statutory
benefits under the Act. They are therefore estopped in law from claiming the benefits .. under the statute at this stage.
For the reasons mentioned in the foregoing paragraphs, the writ petitions are allowed and the order of the Presiding Officer, Additional Labour
Court, Madras, is quashed. There will be no order as to costs.