http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5  

CASE NO.: Appeal (civil) 3731  of  2001

PETITIONER: REGIONAL AUTHORITY, DENA BANK & ANR.

       Vs.

RESPONDENT: GHANSHYAM

DATE OF JUDGMENT:       08/05/2001

BENCH: Syed Shah Mohammed Quadri & S.N. Phukan

JUDGMENT:

SYED SHAH MOHAMMED QUADRI,J.

Leave is granted. L...I...T.......T.......T.......T.......T.......T.......T..J

   This  appeal arises from the order of the High Court  of Judicature  at  Allahabad, Lucknow Bench, in  Writ  Petition No.7548(S/S)  of 1996 dated May 4, 2000.  The respondent who was  engaged as a personal driver by the Regional Manager of the  Dena  Bank at Lucknow  the appellant, claimed to be  a workman  of the Dena Bank.  At the end of the tenure of  the incumbent  Regional  Manager  of Dena Bank at  Lucknow,  the services  of the respondent were terminated with effect from August  1990.   He  raised an industrial dispute  under  the Industrial  Disputes  Act, 1947 (for short, the Act)  with regard  to his retrenchment and eventually, on May 8,  1996, the Labour Court passed an award holding that the respondent was  a driver of the Dena Bank;  termination of his  service was  bad  in  law and ordered his  reinstatement  with  back wages.   The  correctness of that award was assailed by  the appellant  in the aforesaid writ petition in the High Court. By  the  impugned  order dated May 4, 2000, the  High  Court directed  the  appellant  to pay regular  pay-scale  to  the respondent  with  effect from December 6, 1996,  within  one month  from  the date of production of a certified  copy  of that  order;   failing  which the  appellant  should  appear before  the  court  on July 4, 2000.  That  order  is  under challenge in this appeal.

   Mr.P.P.Rao, the learned senior counsel appearing for the appellant,  has contended that under Section 17-B of the Act the  respondent  is  entitled  to the wages  last  drawn  as interpreted  by this Court in Dena Bank vs.  Kiritikumar  T. Patel  [1999 (2) SCC 106] and, therefore, the High Court was in  error  in  directing  payment of regular  wages  to  the respondent.   He invited our attention to the order of  this Court  dated  August 7, 2000 recording the statement of  the counsel  for  the appellant that the pay last drawn  by  the respondent  before termination of the services was  Rs.900/- which  was being paid as per Section 17-B of the Act pending further  proceedings  in the High Court and, therefore,  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5  

order under challenge deserves to be set aside.

   Mr.M.C.Dhingra,  the  learned counsel appearing for  the respondent,  has  submited  that  Section 17-B  of  the  Act ensures that the minimum amount mentioned therein is paid to the  workman during pendency of the proceedings in the  High Courts  or  the Supreme Court but it does not  restrict  the powers  of  the High Court in passing appropriate orders  on the  merits of the case.  In this case, submited the learned counsel,  the  High  Court stayed the award subject  to  the appellant  reinstating the respondent and paying him  salary regularly in accordance with law and that order was modified on  February  17,  1997 which entitles him to  receive  full salary  which is not contrary to Section 17-B, as such he is entitled  to full salary under the orders of the High Court. In  support of his contention he has relied on paragraph  23 of  the  judgment  in Dena Banks case (supra).   The  short question  that  arises for consideration is :   whether  the order  of the High Court directing payment of regular salary payable  on reinstatement as on the date of the order to the respondent,  which  is over and above full wages last  drawn occurring in Section 17-B of the Act, is sustainable.

   In a case where a workman is retrenched the relationship of  master  and  servant comes to an end so  thereafter  the workman  is not entitled to receive any emoluments from  his employer.  This principle is not disturbed by the provisions of  the  Act.   However,  the Act provides,  inter  alia,  a machinery  for  a workman to raise an industrial dispute  in regard  to  validity  of  his  retrenchment  which  will  be adjudicated by Industrial Tribunal/Labour Court on reference under  Section  10 of the Act.  If a  Tribunal/Labour  Court holds the termination to be illegal, Section 11-A of the Act empowers  it  to  set  aside  such  order  of  discharge  or dismissal,  and direct reinstatement of the workman on terms and  conditions as it thinks fit and to give such relief  to the  workman including the award of any lesser punishment in lieu  of discharge or dismissal as the circumstances of  the case may require.  When the award passed by the Labour Court is  challenged  in the High Court or the Supreme Court,  the Court  may, having regard to the facts and circumstances  of the case, stay the award or pass such other interim order as it may deem fit.

   Section  17-B  which  is  inserted in  the  Act  by  the Industrial  Disputes (Amendment) Act, 1982, reads as follows :

   17-B.   Payment  of  full   wages  to  workman  pending proceedings in higher courts.  -

   Where  in any case, a Labour Court, Tribunal or National Tribunal  by its award directs reinstatement of any  workman and  the employer prefers any proceedings against such award in  a High Court or the Supreme Court, the employer shall be liable to pay such workman, during the period of pendency of such  proceedings  in the High Court or the  Supreme  Court, full  wages last drawn by him, inclusive of any  maintenance allowance  admissible  to him under any rule if the  workman had  not  been  employed in any  establishment  during  such period  and  an affidavit by such workman had been filed  to that effect in such Court:

   Provided  that where it is proved to the satisfaction of the  High  Court or the Supreme Court that such workman  had

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5  

been  employed and had been receiving adequate  remuneration during  any  such  period or part thereof, the  Court  shall order  that no wages shall be payable under this section for such period or part, as the case may be.

   Section  17-B  provides that where the employer  prefers any  proceeding against an award directing reinstatement  of any  workman,  the  employer  shall be liable  to  pay  such workman,  during the period of pendency of such  proceedings in  the  High  Court or the Supreme Court, full  wages  last drawn   by  him  inclusive  of  any  maintenance   allowance admissible to him under any rule if the workman had not been employed  in  any  establishment during such period  and  an affidavit  by such workman had been filed to that effect  in such  Court.  The proviso says that if the High Court or the Supreme  Court  is  satisfied  that  the  workman  had  been employed and had been receiving adequate remuneration during such  period or part thereof, the Court shall order that  no wages shall be payable under that section for such period or part, as the case may be.

   The  Statement of objects and reasons for inserting  the said provision indicates that when Labour Courts pass awards of  reinstatement, they are often contested by employers  in the Supreme Court and High Courts.  To mitigate the hardship that  would be caused due to delay in implementation of  the award,  it was proposed to provide for payment of wages last drawn  by  the workman concerned from the date of the  award till  the dispute between the parties is finally decided  in the  High  Courts or the Supreme Court.  It follows that  in the event of an employer not reinstating the workman and not seeking any interim relief in respect of the award directing reinstatement of the workman or in a case where the court is not  inclined to stay such award in toto the workman has two options  either to initiate proceeding to enforce the  award or  be  content with receiving the full wages last drawn  by him  without  prejudice  to the result  of  the  proceedings preferred  by  the  employer against the award  till  he  is reinstated  or  proceedings  are terminated in  his  favour, whichever  is  earlier.  In Dena Banks case  (supra),  this Court  elucidated the expression full wages last drawn  as follows :

   The  Parliament  thought it proper to limit it  to  the extent  of the wages which were drawn by the workman when he was  in  service and when his services were  terminated  and therefore used the words full wages last drawn.

   It  may be noticed that Section 17B of the Act does  not preclude  the  High Courts or this Court under Articles  226 and  136  of  the  Constitution  respectively  from  passing appropriate interlocutory orders, having regard to the facts and  circumstances of the case, in the interests of justice. [Dena  Banks  case (supra)].  The High Court or this  Court may,  while entertaining employers challenge to the  award, in  its discretion, in appropriate cases, stay the operation of the award in its entirety or in regard to back wages only or  in  regard  to reinstatement  without  interfering  with payment  of  back  wages or on payment of  wages  in  future irrespective of the result of the proceedings before it etc. and/or  impose  such  conditions as to the  payment  of  the salary  as  on the date of the order or a part of  the  back wages  and its withdrawal by the workman as it may deem  fit in  the  interests of justice.  The court may, depending  on the facts of a case, direct payment of full wages last drawn

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5  

under  Section  17B of the Act only by the employer  to  the workman.   The question whether a workman is entitled to the full  wages  last  drawn or full salary which  he  would  be entitled to in the event of reinstatement while the award is under  challenge  in the High Courts or this  Court  depends upon  the terms of the order passed by the Court, which  has to  be  determined on interpretation of the  order  granting relief.   Turning to the facts of this case it is seen  that on  December  10, 1996, the High Court passed the  following order :

   Sri Y.S.Lohit appearing on behalf of the opposite party no.1  prays  for and is allowed three weeks time for  filing counter affidavit.

   Issue  notice  to the opposite parties nos.2 and 3.   In the  meantime,  Award  of the Tribunal shall  remain  stayed provided petitioner is reinstated in service and is paid his salary   regularly   in   accordance   with   law.

                           (emphasis supplied).

   A  plain reading of this order shows that the High Court stayed  the  award of the Labour Court on condition  of  the appellant  reinstating the respondent in service and  paying him  salary  regularly in accordance with law.  It needs  no debate to conclude that on reinstatement the respondent will be  entitled  to  his salary on a par with  other  employees working  in the same post and it is in that meaning that the said  clause and is paid his salary regularly in accordance with  law,  has to be understood.  The appellant,  however, did  not  reinstate the respondent but filed an  application for modification of that order.  The High Court modified the order  on February 17, 1997;  while maintaining the order of stay  of  the  award  as ordered on December  10,  1996  the following  modified conditions were incorporated :  (i)  the appellant  shall  pay salary to the respondent regularly  in accordance with law from the date of the writ petition filed on  December 6, 1996 as stated by the counsel for the  bank; and  (ii) the arrears of salary from December 6, 1996  shall be  paid within a period of seven days and thereafter as and when  the  salary  is being paid to the other staff  of  the bank.   It appears that the counsel of the bank also made  a statement  to  that effect.  On a complaint that  the  order dated  February 17, 1997 was not complied with, the case was taken up on March 31, 2000 and the appellant was directed to explain as to why the said order has not been complied with. On  May  4, 2000, it was brought to the notice of the  Court that  the respondent was being paid Rs.900/- per month which represented  the  full wages last drawn.  On that  date  the court directed the appellant to pay the regular pay scale to the  respondent with effect from December 6, 1996 within one month  of  producing  a certified copy of the order  of  the Court.  In our view no exception can be taken to that order. Obviously,  the  salary  which  ought  to  be  paid  to  the respondent could not be anything other than the salary which he  would  be entitled to on reinstatement, a  fortiori,  he would  also be entitled to the arrears at the same rate.  We have  mentioned above that the import of Section 17-B admits of no doubt that Parliament intended that the workman should get the last drawn wages from the date of the award till the challenge to the award is finally decided which is in accord with  the  Statement  of  the objects  and  reasons  of  the Industrial  Disputes (Amendment) Act, 1982 by which  Section 17-B  was  inserted  in the Act.  We have also  pointed  out

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5  

above that Section 17-B does not preclude the High Courts or this  Court  from granting better benefits  more  just  and equitable  on  the facts of a case -- than  contemplated  by that  provision  to  a workman.  By interim order  the  High Court  did  not grant relief in terms of Section 17-B,  nay, there  is no reference to that section in the orders of  the High  Court, therefore, in this case the question of payment of full wages last drawn to the respondent does not arise. In  the light of the above discussion the power of the  High Court to pass the impugned order cannot but be upheld so the respondent  is  entitled to his salary in terms of the  said order.   It must, however, be pointed out that while passing an  interlocutory order the interests of the employer should not  be  lost sight of.  Even though the amount paid by  the employer  under  Section  17-B  to  the  workman  cannot  be directed  to  be refunded in the event he loses the case  in the  writ  petition, [See :  Dena Banks case  (supra)]  any amount  over  and  above  the sum  payable  under  the  said provision,  has to be refunded by him.  It will,  therefore, be  in  the interests of justice to ensure, if the facts  of the  case  so justify, that payment of any amounts over  and above  the  amount  payable under Section 17-B  to  him,  is ordered  to  be paid on such terms and conditions  as  would enable  the employer to recover the same.  It is brought  to our  notice  that pursuant to the orders of the  High  Court@@                                                        JJJJJ under  challenge  the appellant had paid the amount  to  the@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ respondent.   It is clarified that if the appellant succeeds in  the  writ petition, it will be entitled to  recover  the difference  of amount (i.e.  amount paid under the  impugned order less the amount payable under Section 17-B of the Act) from the respondent in accordance with law.  The order under challenge  is modified in the above terms and the appeal  is allowed  accordingly;  in the circumstances of the case,  we make no order as to costs.