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Judgment
Honourable Mr. Justice K. Chandru
The petitioner is the Special Officer of Arunmanai Milk Producers Co-operative Society Limited. In this writ petition, the challenge is to the order passed by the first respondent, Labour Court, Tirunelveli in C.P.No.247 of 1993, dated 23.02.2004.
By the impugned order, the Labour Court, computed a sum of Rs.1,52,751/- as due and payable to the second respondent workman.
When the writ petition came up on 09.03.2007, this Court ordered notice of motion and pending notice of motion, this Court also granted an interim injunction restraining the third respondent, Tahsildar, Vilvancodu Taluk, from taking any steps to recover the interest amount of Rs.96,615/-. In the application for interim stay of the impugned order, only notice was ordered.
In the meanwhile, the workman filed an application for fixing an early date in M.P.(MD).No.1 of 2008 and no orders were passed in that petition.
The facts leading to the case are as follows:-
The second respondent was employed as a cattle field salesman in the petitioner society. Subsequently, he was promoted as a Junior Assistant on 01.07.1982. He was also asked to discharge the additional function of a cattle field salesman. The second respondent requested them to relieve him from the additional responsibility of a cattle field salesman and to appoint some other person separately.
b) Even after his promotion to the post of Junior Assistant, he was not given pay scale. Thereafter, one Vargheese was appointed as an Assistant Salesman with effect from 19.07.1982. The second respondent was given a charge memo on 15.03.1983 for insubordination of work and the other charges relates not handing over sales amount and not opening sales depot for a particular period. After conducting an enquiry and giving a second show cause notice, he was dismissed from service by order, dated 01.12.1983.
c) An industrial dispute was raised by the second respondent, which was referred for adjudication to the first respondent Labour Court by the State Government vide their order in G.O.Ms.No.1267, Labour and Employment Department dated 22.06.1987. The said dispute was taken on file by the first respondent I.D.No.173 of 1987. The Labour Court after a trial found that the dismissal of the second respondent from service was not justified and therefore, the second respondent was directed to be reinstated with backwages and continuance of service, vide order dated 12.01.1993.
d) The petitioner management challenged the award in a writ petition before the Principal Bench being W.P.No.19387 of 1993 and obtained an interim stay on 28.04.1997. The writ petition was finally dismissed by an order dated 04.02.2002 thereby confirming the award.
e) Subsequently, a writ appeal being W.A.No.2081 of 2002 was filed by the petitioner''s society before a Division Bench and the Division Bench also dismissed the writ appeal on 07.10.2003.
f) During the pendency of the writ petition, the second respondent was reinstated on 29.11.1998. Even while the writ petition was pending before the Principal Bench, the second respondent filed a claim petition in C.P.No.247 of 1993 u/s 33C(2) of the Industrial Disputes Act claiming wages of Rs.78,960. 50 towards backwages and Rs.10,666/- towards bonus.
g) In the claim petition notice was ordered to the petitioner society. The stand of the petitioner society was that last drawn salary of the workman was only Rs.315/- and he was working as Junior Clerk. Till November 1997, the same salary was in force. Thereafter, his salary was revised and the for the period from 01.12.1983 till February 1991, for a period of 9 nine years he was eligible to get Rs.26,775/- at the rate of Rs.315/- per month and February, 1996 for the next 59 months, he was eligible to get Rs.32,450/- at the rate of Rs.610/- per month and February 96 till 97, for a period of 21 months he was eligible to get Rs.12,810/- at the rate of 610/- per month. Therefore, in total, the second respondent was entitled to get Rs.72,035/-.
Before the Labour Court on the side of the second respondent workman, eight documents were filed and marked as Ex.W1 to Ex.W8 and he himself was examined as PW1. On the side of the petitioner society, five documents were filed and marked as Ex.R1 to Ex.R5 and one Selvaraj was examined as RW1. The Court also summoned the salary register for the year 1982 in Serial Nos.13 and 14, which were marked as Ex.C1 and Ex.C2.
The Labour Court, on the basis of the material placed, came to the conclusion that one junior to the second respondent by name Santhakumari was getting a basic salary of Rs.1035/- during November 1983 and the total salary of Rs.2532.90/- during the year 1998. The second respondent was made to draw salary lesser than santhakumari and hence the contention that under the guise of implementing the award, the management should not reduced or fixed a improper scale for the second respondent.
The Labour Court also referred to the cross-examination of RW1, who had agreed that there was difference in wages payable to the second respondent for the month of February.
In the salary register during February 1983 five pages were found missing. In the light of this, the Labour Court felt that the workman would eligible to get wages at rate of Rs.1,52,751/- and made the pay fixation rules of the State Government as Ex.P7 as part of the order.
Despite the order passed as early as on 23.02.2004, the petitioner society did not even show interest in implementing the award. It is only when the workman moved the State Government for getting the amount as arrears of land revenue, a notice was issued by the third respondent, (the Tahsildar). Thereafter, the management challenged the order in the year 2004.
The delay in filing the writ petition, which was nearly 3 years was not explained in the affidavit. In the grounds raised it was contended that they were only challenging the awarding of interest at the rate of 5.5% in the order passed by the Labour Court. It was claimed that there was no provision for grant of interest. The counsel for the petitioner also placed reliance upon a judgment of this Court in G. Ramadoss V. T.D.C. Industrial Estate reported in 2000 (4) L.L.N. 914 to contend that the Labour Court has no power to grant interest u/s 33C(2) of the Industrial Disputes Act. In paragraph 12 it was observed as follows:
As stated earlier, admittedly, award in I.D.No.459 of 1987, does not contain any clause for interest. In such circumstance, though the Labour Court has power to award interest in appropriate cases, in the absence of any provision in the main award itself for interest, the same cannot be granted while computing, the amount in an application filed under S.33C(2) of the Act. In the light of the above conclusion, I am unable to accept the argument of the learned counsel for the workman with regard to interest and accordingly the same is rejected.
Since in the case cited by the learned counsel for the petitioner, a reference was made to a judgment of the Supreme Court in Ghaziabad Development Authority Vs. Union of India and Another, , it is necessary to refer to the said decision regarding awarding of interest by an executing court. In paragraph 10, it was observed as follows: 10.We are therefore of the opinion that interest on equitable grounds can be awarded in appropriate cases. In Sovintorg (India) Ltd. case3 the rate of 15 per cent per annum was considered adequate to serve the ends of justice. The Court was apparently influenced by the fact that the claimant had to suffer winding-up proceedings under the Companies Act and the defendant must be made to share part of the blame. However, in the cases before us, the parties have not tendered any evidence enabling formation of opinion on the rate of interest which can be considered ideal to be adopted. The rate of interest awarded in equity should neither be too high nor too low. In our opinion awarding interest at the rate of 12 per cent per annum would be just and proper and meet the ends of justice in the cases under consideration. The provision contained in the brochure issued by the Development Authority that it shall not be liable to pay any interest in the event of an occasion arising for return of the amount should be held to be applicable only to such cases in which the claimant is itself responsible for creating circumstances providing occasion for the refund. In the cases under appeal the fault has been found with the Authority. The Authority does not therefore have any justification for resisting refund of the claimants'' amount with interest.
On that case the Supreme Court had also considered the difference between Section 33C(1) and 33C(2) of the I.D. Act with reference to the grant of interest. It was held that Section 33C(1) is only for the issuance of revenue recovery certificates by the State Government for recovering due amounts. In the matter of grant of certificate, no interest component can be added. It was further held that an executing court when enforcing a decree can decide the question of interest. The Supreme Court while deciding the scope of Section 32-G of the State Financial Corporations Act, 1951, compared the provision by way of analogy with Section 33C(1) vide its judgment in Delhi Fin. Corpn. and Another Vs. Rajiv Anand and Others, .
The following passages found in paragraphs 21 and 22 may be usefully extracted below:
21........ It is with that object in view that Sections 29, 31 and 32 have been enacted. These have been found to be inadequate. Thus, by Section 32-G one more remedy of recovery is given to a financial corporation. Merely for execution of a decree of a court no such provision is required. Once a decree is passed it can be executed in the normal manner. That Section 32-G is not for execution of a decree of a court is also clear from the fact that it does not use the word "decree". All that Section 32-G contemplates is that where an amount is due an officer will make an application to the State Government, the State Government or an authority appointed by them would, after following procedure as may be prescribed, issue a certificate for that amount to the Collector and the Collector shall proceed to recover that amount as arrears of land revenue.
It must also be noted that in the case of Haryana Financial Corpn. v. Jagdamba Oil Mills13 it has been held that the State Financial Corporations as instrumentalities of the State deal with public money. It has been held that there can be no doubt that the approach has to be public-oriented. It is held that such approach can only operate effectively if there is regular realisation of the instalments. It is held that even though the Corporation is expected to act fairly there is also corresponding duty cast upon the borrowers to repay the amounts in time. It is held that regular payment is the rule and non-payment due to extenuating circumstances is the exception. It is held that if the repayments are not received, as per the scheduled time-frame, it would disturb the equilibrium and financial arrangements of the financial corporations. It is held that these corporations do not have unlimited funds at their disposal. It is held that they have to cater to the needs of the intended borrowers with the available finance and non-payment of the instalment by a defaulter stands in the way of a deserving borrower getting financial assistance. It is held that the corporation cannot be shackled hand and foot in the name of fairness. It has been held that fairness cannot be a one-way street. It is noted that the financial corporations borrow money from the Government or other financial corporations and are required to pay interest thereon. It has been held that a borrower who has no genuine intention to repay and who adopts pretexts and ploys to avoid repayment cannot make a grievance that the financial corporation was not acting fairly, even if the requisite procedure has not been followed. It is held that the fairness required of the financial corporations cannot be carried to the extent of disabling them from recovering what is due to them. Thus a provision incorporated by the legislature with the intention to enable financial corporations to speedily recover amounts due to them cannot be whittled down by giving an interpretation which would render it nugatory.
Similarly, the Supreme Court in Sovintorg (India) Ltd. Vs. State Bank of India, New Delhi, in paragraph 6 had held as follows:
6......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 Singh1. Referring to the province of the Interest Act of 1839, in relation to the compulsory acquisition of land where no specific provision is made for grant for awarding the interest, the Court held:
In this connection we may incidentally refer to Interest Act, 1839 (XXXII of 1839). Section 2 of this Act confers power on the court to allow interest in cases specified therein, but the proviso to the said section makes it clear that interest shall be payable in all cases in which it is now payable by law. In other words, the operative provisions of Section 1 of the said Act do not mean that where interest was otherwise payable by law court''s power to award such interest is taken away. The power to award interest on equitable grounds or under any other provisions of the law is expressly saved by the proviso to Section 1. This question was considered by the Privy Council in Bengal Nagpur Rly Co. Ltd. v. Ruttanji Ramji2. Referring to the proviso to Section 1 of the Act the Privy Council observed ''this proviso applies to cases in which the court of equity exercises its jurisdiction to allow interest''. We have already seen that the right to receive interest in lieu of possession of immovable property taken away either by private treaty or by compulsory acquisition is generally regarded by judicial decisions as an equitable right; and so, the proviso to Section 1 of the Interest Act saves the said right. We must accordingly hold that the High Court was in error in rejecting the claimants'' case for the payment of interest on compensation amount, and so we direct that the said amount should carry interest at 4% per annum from the date when Respondent 2 took possession of the claimants'' lands to the date on which it deposited or paid the amount of compensation to them.
To the same effect is the judgment in Laxmichand v. Indore Improvement Trust3. The State Commission as well as the National Commission were, therefore, justified in awarding the interest to the appellant but in the circumstances of the case we feel that grant of interest at the rate of 12% was inadequate as admittedly the appellant was deprived of the user of a sum of Rs one lakh for over a period of seven years. During the aforesaid period, the appellant had to suffer the winding-up proceedings under the Companies Act, allegedly on the ground of financial crunch. We are of the opinion that awarding interest at the rate of 15 per cent per annum would have served the ends of justice.
Therefore, it cannot be totally incorrect to state that under no circumstances, the Labour Court while hearing a claim petition u/s 33C(2), can order interest. In the present case, the petitioner''s right was concretised by an award passed by the Labour Court in I.D.No.173 of 1987 dated 12.01.1993. After 5 years he was reinstated, but he was not paid backwages. The management took up the matter to the High Court by way of a writ petition being W.P.No.19387 of 1993, which was dismissed ultimately on 04.02.2002. If the workman was reinstated immediately after the award during January 1993, question of denial of interest may not arise. But, the management deliberately delayed in implementing the award for over a period of 9 years, before the Principal Bench and thereafter under the guise of filing a writ appeal further delayed it for some years.
The deliberate delay in implementing the award will certainly deny the real value of the money being obtained by the workman. It can never be the intention of any one that after dragging the matter over 10 years, Workman will get the same amount as what was payable to him 10 years before. When the real value of the money keeps on progressively decreasing, thanks to the inflation in the economy, which has telling effect on the worker. But even after succeeding before the three courts, he cannot be asked to draw the same amount, which should have come to him 10 years ago. In the present case, C.P.247 of 1993 was filed only to execute the award. Since, the award was decreed in favour of the workman, then certainly the Labour Court can decide to grant a minimum compensation (at least on par with the saving bank interest). There is no illegality in adding interest on the delayed payment.
Further in the decision cited above itself suggests, interest on equitable grounds can be granted in appropriate cases. In the present case, the Labour Court had granted interest only 5.5% which was less than the lending interest. This Court is not inclined to disturb the order passed by the Labour Court. Hence, the writ petition will stand dismissed. Consequently, the connected miscellaneous petitions are closed. No costs.