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CASE NO.: Appeal (civil)  3053 of 2008

PETITIONER: A. Satyanarayana Reddy and Ors

RESPONDENT: The Presiding Officer, Labour Court,Guntur & Ors

DATE OF JUDGMENT: 29/04/2008

BENCH: S.B. Sinha & V.S. Sirpurkar

JUDGMENT: J U D G M E N T REPORTABLE

CIVIL APPEAL NO. 3053  OF 2008 (Arising out of SLP (C) No.15731 of 2005)

S.B. Sinha, J.

1.      Leave granted. 2.      Interpretation of the provisions of Section 33C(2) of the Industrial  Disputes Act, 1947 vis-‘-vis a Voluntary Retirement Scheme framed by the  State of Andhra Pradesh is in question in this appeal which arises out of a  judgment and order dated 13.4.2005 passed by a Division Bench of the  Andhra Pradesh High Court in Writ Appeal No. 820 of 2005 dismissing the  appeal from a judgment and order dated 21.3.2005 passed by a learned  single judge of the said Court in Writ Petition No. 4196 of 2005.   3.      Appellants were the employees of Nagarjuna Cooperative Sugars  Limited, a Government of Andhra Pradesh Undertaking.  It was declared to  be a ’relief undertaking’ in terms of Andhra Pradesh Relief Undertaking  (Special Provisions) Act, 1971.  The management of the industrial  undertaking declared lay off wherefor compensation was to be paid.  The  Employees’ Union of the said industrial undertaking filed a Writ Petition in  the High Court of Andhra Pradesh questioning a Memo dated 5.1.1998  whereby and whereunder lay off compensation was denied to the workmen.   According to the workmen, that lay off compensation was paid only for the  months of June and July 1995.  They claimed existing legal right for  obtaining lay off compensation for the period 1.8.1995 to 6.9.2002.   4.      Before, however, we embark upon the said question, we may place on  record that the State of Andhra Pradesh sold the said factory to one SCM  Sugars Limited.  Some of the workmen were absorbed by the transferee \026  Company.  Out of the said absorbed employees, some of them were paid lay  off compensation and some were not.   At one point of time, all the workmen  had shown their willingness to continue to work under the new management.   Later, however, the Government of Andhra Pradesh permitted the said SCM  Sugars Limited to shift the factory to the State of Karnataka, as a result  whereof, the workmen lost the opportunity to continue to be employed.   5.      The Government of Andhra Pradesh  issued G.O. Ms. No. 25 dated  21.5.2001 providing for a special compensation package for the employees.   The said amount of compensation was to be paid to the workmen only in the  event they had not opted for employment with the new owner.   6.      The benefits provided for under the said Voluntary Retirement  Scheme were stated as under:                          "Terminal benefits         The following benefits as statutorily due will  be paid as per eligibility. i.      The balance in the P.F. Account payable as  per the CPF regulation.

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ii.     Cash equivalent of accumulated earned  leave as per the rules of the enterprise. iii.    Gratuity as per the provisions of the  Payment of Gratuity Act or other applicable  Rules of the Organization. EXGRATIA BENEFITS i)      An employee who is regular or  permanent, whose request for VRS is  accepted would be entitled to an Ex-gratia  payment equivalent to One and Half months  emoluments (Pay + DA) last drawn, for each  completed year of service or the monthly  emoluments at the time of retirement  multiplied by the balance months of service  left before normal date of retirement  whichever is less, subject to a minimum of  Rs.30,000/- (Rupees Thirty Thousand only). One month/three months notice pay, as per the  service conditions applicable."

7.      Appellants opted for voluntary retirement.  Indisputably, they were  paid the amount of special compensation in terms of the said G.O.   Contending, however, that the said Voluntary Retirement Scheme did not  provide for payment of lay off compensation, a writ petition was filed by the  Union, which was marked as Writ Petition No. 16916 of 1998.  Before the  High Court, a contention was raised by the respondents herein that the  workmen having taken voluntary retirement and the relationship of employer  and employee having ceased, the writ petition was not maintainable.  A  learned single judge of the High Court, however, opined: "Be that as it may, in the circumstances of this  case, I am of the considered opinion that the  petitioner should approach the appropriate labour  court or the Industrial tribunal and work out its  remedies by way of a claim petition and by leading  appropriate evidence before the said court.  The  petitioner can raise all the questions, which are  available to it, including those which have been  raised in this Writ Petition.  Therefore, the Writ  Petition is disposed of giving liberty to the  petitioner to approach the appropriate labour Court  or Industrial tribunal by filing an appropriate claim  petition.  On filing such a claim petition, the labour  court/industrial tribunal shall entertain the same  and decide on merits within a period of six months  from the date of filing of such a petition."

8.      Pursuant to or in furtherance of the said observations, the workmen  filed applications under Section 33C(2) of the Industrial Disputes Act, 1947  (for short "the Act") claiming lay off compensation for the period between  1.8.1995 to 6.9.2002.  The Labour Court, Guntur, did not entertain the said  applications holding that the same were not maintainable in view of a  decision of this Court in A.K. Bindal and Another v. Union of India and  Others [(2003) 5 SCC 163] holding: "The workman under Sec. 33C(2) must be a  workman under Sec. 2(s) of the I.D. Act.  Under Sec. 2 (s) of the I.D. Act, there are  four categories of workmen, 1) persons presently  employed, 2) persons dismissed from service, 3)  persons discharged from service and 4) persons  retrenched from service.         All other persons do not come under Sec.  2(s) of the I.D. Act.          Persons retired from service, whether  voluntarily or due to superannuation, persons left  the service voluntarily and persons resigned from

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the service do not come under Sec. 2(s) of the I.D.  Act.  Those persons, even though they have got  any right to receive any amount or any benefit  from the employer for the work done by them are  not entitled to file petition under Section 33-C(2)  of the I.D. Act.  Because they are not workmen  under Section 2(s) of the I.D.Act."

A writ petition was preferred thereagainst, which was dismissed by a  learned single judge of the Andhra Pradesh High Court by an order dated  21.3.2005.   9.      Mr. A. Subba Rao, learned counsel appearing on behalf of the  petitioner would contend that the Labour Court and consequently the High  Court committed a manifest error in passing the impugned orders insofar as  they failed to take into consideration that the existing right of the workmen  for obtaining the lay off compensation payable to them under the Industrial  Disputes Act, 1947 having nothing to do with the Voluntary Retirement  Scheme and furthermore having regard to the directions of the High Court in  the earlier Writ Petition, the proceedings under Section 33C(2) was  maintainable.  Strong reliance in this behalf has been pressed on National  Buildings Construction Corporation v. Pritam Singh Gill & Ors. [(1973) 1  S.C.R. 40]. 10.     Mr. R. Sundravardhan, learned Senior Counsel appearing on behalf of  the respondents, on the other hand, would contend that in view of the  definition of workman as contained in Section 2(s) of the Industrial Disputes  Act, 1947, the workman having opted for voluntary retirement ceased to be  the workman of the State and thus the proceedings under Section 33C(2) of  the Act was rightly held to be not maintainable.           Apart from relying on A.K. Bindal (supra), reliance has also been  placed by Mr. Sundravardhan on a decision of the Bombay High Court in  Premier Automobiles Ltd. v. PAL VRS Employees Welfare Association &  Anr. [2002 (1) LLJ 527].   11.     Section 2(s) of the Act defines a workman to mean : "2(s)   "workman" means any person (including an  apprentice) employed in any industry to do any  manual, unskilled, skilled, technical, operational,  clerical or supervisory work for hire or reward,  whether the terms of employment be express or  implied, and for the purposes of any proceeding  under this Act in relation to an industrial dispute,  includes any such person who has been dismissed,  discharged or retrenched in connection with, or as  a consequence of, that dispute, or whose dismissal,  discharge or retrenchment has led to that dispute,  but does not include any such person -   (i)     who is subject to the Air Force Act, 1950  (45 of 1950), or the Army Act, 1950 (46 of 1950), or the  Navy Act, 1957 (62 of 1957); or  (ii)    who is employed in the police service or as  an officer or other employee of a prison; or (iii)   who is employed mainly in a managerial or  administrative capacity; or (iv)    who, being employed in a supervisory  capacity, draws wages exceeding one thousand six  hundred rupees per mensem or exercises, either by the  nature of the duties attached to the office or by reason of  the powers vested in him, functions mainly of a  managerial nature."

12.     A literal meaning given to the said provision would indicate that the  workmen have ceased to enjoy the protection conferred upon them under the  said Act.   13.     Would the workmen continue to be workmen for the purpose of filing  an application under Section 33C(2) of the Act is the question.   14.     Before embarking on the said question, we may notice that the

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contention of Mr. Sundravardhan before us was that all the legal dues have  been paid to the workmen.  We are not concerned with the merit of the  matter; maintainability of the application under Section 33C(2) being in  issue.   15.     There cannot be any doubt whatsoever that ordinarily upon opting for  a voluntary retirement under a Scheme framed in that behalf, the workmen  would cease to have any claim against the management.  However, the same  prima facie in our opinion would not mean that a statutory right of opting for  lay off compensation, unless expressly waived, may continue to remain  within the realm of legal right, so as to enforce the same before a forum  constituted under the Act.   The Bombay High Court in Premier  Automobiles Ltd. (supra) as also this Court in A.K. Bindal (supra)  proceeded on the basis that an employee having received the amount of  compensation without any demur whatsoever would be estopped and  precluded from raising any other or further claim stating: "The employees accepted VRS with their eyes  open without making any kind of protest regarding  their past rights based upon revision of pay scale  from 1.1.1992."

       The said decision moreover proceeded on the basis that when the  parties enter into a transaction known as "golden handshake", the jural  relationship between the employer and the employee comes to an end.  It  was opined: "After the amount is paid and the employee ceases  to be under the employment of the company or the  undertaking, he leaves with all his rights and there  is no question of his again agitating for any kind of  his past rights with his erstwhile employer  including making any claim with regard to  enhancement of pay scale for an earlier period.  If  the employee is still permitted to raise a grievance  regarding enhancement of pay scale from a  retrospective date, even after he has opted for  Voluntary Retirement Scheme and has accepted  the amount paid to him, the whole purpose of  introducing the Scheme would be totally  frustrated."

       The claim of the appellants in A.K. Bindal (supra) was based on the  revision in the scale of pay.  It was in that context, the aforementioned  observations were made.   16.     The question which fell for consideration before the Bombay High  Court was as to whether the employees having opted for the Voluntary  Retirement Scheme can still ask for benefits under a settlement which were  overlapping with each other.           What was sought to be enforced in the said proceeding was the terms  of a settlement.  The Bombay High Court held: "The terms and conditions of the said Scheme are  clear enough which show that the employees who  opted for Voluntary Retirement Scheme were to be  considered as relieved from services of the  Company within a week from the date of their  letter of acceptance. According to the said Scheme,  it would come into force with effect from  December 20, 1991 and stood open till January 27,  1992."

       The said decision, thus, was rendered in different fact situation.         In Vijay Kumar & Ors. v. Whirlpool of India Ltd. & Ors. [(2008) 1  SCC 199], the Division Bench, inter alia, followed A.K. Bindar (supra). 17.     The decision of this Court in National Buildings Construction  Corporation (supra) was not noticed in the aforementioned decision.  The  question which arose for consideration therein was as to whether a workman  even after an order of discharge could maintain an application under Section

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33C(2) of the Act claiming lay off compensation, in response whereto this  Court held: "In U.P. Electric Supply Co. v. R.K. Shukla [AIR  1970 SC 237] this Court approvingly referred to a  passage from the judgment in Chief Mining  Engineer, East India Coal Co. Ltd. (supra), already  reproduced by us, in which, inter alia, it was  emphasized that Labour Court had jurisdiction to  entertain a claim in respect of an existing right  arising from the relationship of an industrial  workman and his employer.  Again in R.B.  Bansilal Abhirchand Mills Co. (P) Ltd. v. The  Labour Court, Nagpur [AIR 1972 S.C. 451] this  Court, after a review of its previous decisions,  upheld the jurisdiction of the Labour Court to  entertain application for lay-off compensation  under s. 33C observing that such jurisdiction could  not be ousted by a mere plea denying the  workman’s claim to computation of the benefit in  terms of money, adding that the Labour Court had  to go into the question and determine whether on  the facts it had jurisdiction to make the  computation."

Noticing a large number of decisions of the High Courts on the said  subject, this Court held: "In order to remove this repugnancy s. 33C(2)  must be so construed as to take within its fold a  workman, who was employed during the period in  respect of which he claims relief, even though he is  no longer employed at the time of the application.   In other words the term "workman" as used in s.  33C(2) includes all persons whose claim, requiring  computation under this sub-section, is in respect of  an existing right arising from his relationship as an  industrial workman with his employer.  By  adopting this construction alone can we advance  the remedy and suppress the mischief in  accordance with the purpose and object of  inserting s. 33C in the Act."

18.     The right of the workman to claim payment of lay off compensation is  not denied or disputed.  If the said claim has no nexus with the Voluntary  Retirement Scheme, in our opinion, in a given case, like the present one, it is  possible to hold that a proceeding under Section 33C(2) of the Act would be  maintainable.  We are, therefore, of the opinion that the question being one  of some importance should be considered by the larger Bench as there exists  an apparent conflict in the said decisions of National Buildings Construction  Corporation (supra) and A.K. Bindal (supra).   We direct accordingly.  Let the records be placed before the Hon’ble  the Chief Justice of India for passing appropriate orders.