Writ Petition No.329 of 1999

11th April, 2001

Petitioner Counsel: Mr. N.V.WALAWALKAR, Mr. G.R.KINKHABWALA, MULLA & MULLA
Respondent Counsel: Mr. MOHAN BIR SINGH, V.M.SINGH

JUDGMENT

JUDGMENT :- The Petitioners are aggrieved by the Judgment and Order passed by the Central Government Labour Court NO.II, Mumbai on 30.7.1998 in Application No.LC-2/44 of 1997 filed by the Applicant employee, who is Respondent No.1 before me in the above Writ Petition. The Respondent employee filed an application under Section 33-C(2) of the Industrial Disputs Act, 1947 claiming wages for January, February and March 1997 at the rate of 40,800/- basic per month and allowances at the rate of Rs.1,63,200/ per month. He has also claimed retrenchment compensation under Section 25-F of the Industrial Disputes Act and Gratuity, Provident Fund, Leave Encashment, Medical Reimbursement with 18% interest per annum on the due amount. He has based him claim on the letter dated 19.12.1995 whereby he was informed that his salary was increased with effect from 1.1.1996 to the above extent. According to the Respondent employee his services were discontinued abruptly with immediate effect by a letter dated 31.3.1997. The grievance of the Respondent employee, inter alia, is that under the service contract dated 10.1.1995 it was obligatory for the petitioner company to have given two months notice and since no such notice was given the petitioner became entitled to get two months wages in lieu of notice period.

2. The Petitioners filed their written statement to oppose the said application on various grounds including the one of maintainability of the application under the I.D.Act, as the Respondent employee was not "a workman" within the meaning of Section 2-S of the Act. The Petitioners however have admitted that due to financial difficulties they could not pay the wages to the respondent employee for the months of February and March 1997 while he was paid a demand draft for the month of January 1997. The Petitioners have denied their liability and the entitlement of the respondent employee to receive the said benefits. By way of rejoinder the Respondent employee has given up the claim for the month of January 1997 as he received a demand draft for the whole amount after the two cheques for the said amount were bounced and dishonoured.

3. The learned Labour Court Judge by his well reasoned order on the basis of the evidence and material on record and after considering the case law cited before him has held that the employee was entitled to get Rs. 4,08,000/- towards the wages for February and March 1997 with interest at the rate 6% p.a. The learned Judge has refused to grant any other reliefs.

4. Shri. Walawalkar the learned Counsel for the petitioners company, has submitted that the petitioners have paid the whole amount to the respondent employee as per the order of the Labour Court and the directions of this Court during the pendency of the Petition. He, however, submitted that such payment was made by the petitioners without prejudice to their rights and contentions. I have heard Shri. Walawalkar, who raised several contentions to oppose the claim of the Respondent employee. I do not find any substance and merits in the said contentions that the Respondent employee was not a workman and that his application was not maintainable. The Labour Court has decided all other points in favour of the Petitioners Company that the Respondent employee was not entitled to retrenchment compensation, gratuity and any other benefits claimed by him. It is an admitted fact that the Petitioners had not paid wages for the months of February and March 1997 and had abruptly terminated the services of the Respondent employee in contravention of the term of appointment order dated 10.1.1995 wherein either party was required to give two months prior notice before termination of the contract. According to Shri. Walawalkar the wages for the two months were not payable as they did not amount to wages as defined under the Act. In my opinion there is not merit in the said contention. By the appointment order dated 10.1.1995 if the Petitioners were required to give two months prior notice before terminating the contract of service of the Respondent employee they had to pay two months wages in lieu of notice period. Had the Petitioners Company complied with the said term in the contract of service the Respondent employee would have been in employment for a period of two months and he would have earned the said wages till March 1997. By terminating his services in contravention of the said term in the contract of service the Petitioners have become liable to pay two months wages in lieu of the notice. The Term wages has been defined by the Act. The relevant part is reproduced below :

(rr) "wages means all remuneration capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to a workman in respect of his employment, or of work done in such employment, and includes......"

It is, therefore, clear that if the terms of employment which were express were fulfilled, the respondent workman would have been entitled to get wages for the period of two months. There is therefore no substance in the contention of the Petitioners that they were not liable to pay two months wages for the notice period.

5. It is significant to note that the Petitioners had issued cheques towards the said payment for two months wages but the said cheques were dishonoured and thereafter on intervention of the Asstt. Commissioner for Labour the Petitioners were required to give a demand draft for the month of January 1997. The Respondent employee has therefore given up his claim for that period. The Petitioners have subjected the Respondent employee to the present litigation upto this Court. The Respondent employee was made to bear the cost of litigation for no reason and justification. In these circumstances the Labour Court was right in imposing interest on the Petitioners for the amounts held to be payable. In the similar other companion matter I have awarded 9% interest. Since the Petitioners have finally made payment I do not want to increase the rate of interest from 6% to 9%. Even Shri. Singh for the Respondent employee fairly did not press for enhancement of rate of interest.

6. The Writ Petition therefore fails. Rule is discharged with costs quantified at Rs.10,000/- to be paid by the Petitioners to the Respondent employee within four weeks from today.

7. All parties to act on an ordinary copy of this order duly authenticated by the Associate of this court.

Petition dismissed.