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PETITIONER: KAYS CONSTRUCTION CO. (P) LTD.

       Vs.

RESPONDENT: STATE OF UTTAR PRADESH AND OTHERS

DATE OF JUDGMENT: 26/11/1964

BENCH: HIDAYATULLAH, M. BENCH: HIDAYATULLAH, M. GAJENDRAGADKAR, P.B. (CJ) SHAH, J.C. SIKRI, S.M. BACHAWAT, R.S.

CITATION:  1965 AIR 1488            1965 SCR  (2) 276  CITATOR INFO :  RF         1966 SC 616  (5)  R          1972 SC 451  (22)

ACT: U.P.  Industrial Disputes Act, 1947, sub-ss. (1) and (2)  of s.  6-H--Back wages of workmen--Exact amount not  calculated but  amendable  to  arithmetical  calculation--Such   amount whether  ’money due’ under first clause or ’benefit  capable of being computed in terms of money’ under second clause.

HEADNOTE: The  appellant  company  bad to pay under an  award  of  the Labour Tribunal the back wages of some workmen.  The  Labour Commissioner  issued  a recovery certificate in  respect  of part of these wages to the Collector under s. 6-H (1) of the U.P. Industrial Disputes Act, 1927, and stated that for  the rest  of the amount due he would issue  another  certificate later  when  the  exact amount had  been  worked  out.   The appellant company challenged the certificate before the High Court, contending that it was not in respect of ’money  due’ for  which proceedings under sub.s. (1) of s. 6-H  could  be taken, but was a ’benefit’ to be computed in terms of  money for  which the appropriate proceedings could be  only  under sub-s.  (2)  of that section.  A single Judge  of  the  High Court accepted the contention of the appellant company,  but his  judgment was reversed by a Division Bench of  the  High Court.  The company appealed to the Supreme Court by special leave. HELD  : The Division Bench had correctly confined  the  term ’benefits’  under  the second clause to benefits  like  rent free  quarters, free electricity etc. which were not  things which a man earned through his labour.  In the present  case what  was  required was not computation  of  money-value  of ’benefits’  but  only an arithmetical calculation  of  total money wages over a certain period.  The elaborate  procedure under sub-s. (2) of S. 6-H was not mean for cases where only arithmetical calculation was required.  The appeal therefore could not succeed. [281 C-G] M.S.N.S. Transports, Tiruchirapalli v. Rajaram and  another,

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[1960]  1 L.L.J. 336, Seshmusa Sugar Works Ltd. v. State  of Bihar,  A.I.R. 1955 Patna 49, S. S. Shetty v.  Bharat  Nidhi Ltd.,  [1958]  S.C.R.  442, Kasturi & Sons (P)  Ltd.  v.  N. Salivatesaram, [1959] S.C.R. 1, Punjab National Bank Ltd. v. Kharbunda,  [1962] Supp. 2 S.C.R. 977 and  Shri  Amarsinghji Mills Ltd. Nagarashua (M.P.), [1961] 1 L.L.J. 581,  referred to.

JUDGMENT: CIVIL  APPELLATE JURISDICTION : Civil Appeals Nos. 1108  and 1109 of 1963. Appeals by special leave from the judgment and order,  dated March,  15,  1962  of the Allahabad High  Court  in  Special Appeal  No. 574 of 1960 and Supreme Court Appeal No.  53  of 1962 respectively. Sir  Iqbal Ahmad, K. Rajendra Chaudhuri and K. R.  Chaudhuri for the appellant (in both the appeals). 277 C.   B. Agarwala and O. P. Rana, for respondents Nos.  1  to 4 (in both the appeals). The Judgment of the Court was delivered by Hidayatullah,  J. These are two appeals by special leave  in which  Kays  Construction  Co. (P) Ltd.  is  the  appellant. Civil  Appeal No. 1108 of 1963 is against a judgment of  the Allahabad High Court, dated March 15, 1962 and Civil  Appeal No. 1109 of 1963 is against an order of the same High Court, dated  May 9, 1962 declining to certify the case under  Art. 133 of the Constitution as in the opinion of the High  Court the proceedings from which the appeal arose before the  High Court  was  not  a civil proceeding  within  Art.  133.   As special  leave has been granted against the judgment of  the High  Court  and we are of opinion that the  appeal  against that  judgment  must  be  dismissed,  we  do  not  think  it necessary to decide the other appeal. The  facts  of  the case may now  be  stated  briefly.   The appellant  Company  is the successor of  a  private  concern which  went under the name of Kays Construction Company  and was  owned  by  one Mr. H. M. Khosla  who  is  now  Managing Director  of  the appellant Company.  It  appears  that  Mr. Khosla found it unprofitable to continue the business as his own  and he stopped it for a while before Kays  Construction Co.  (Private)  Ltd.  came into  existence.   The  appellant Company  took  over the business and with it,  some  of  the workmen  of the former concern but not all.  This led to  an Industrial dispute before the Allahabad Industrial  Tribunal (Sugar)  and an award was made on January 31, 1958.  One  of the  questions  in  dispute  before  the  Tribunal  was  the reinstatement and back wages of the workmen who were not re- employed  by the appellant Company.  The Tribunal  delivered an  award.   The parties to this appeal have  not  cared  to produce  the award but an extract from it relevant  to  this part  of  the controversy is on the record and  it  runs  as follows :-               "As a result of my findings above, I hold that               management  of Messrs.  Kays Construction  Co.               (Private) Limited, Allahabad, are required  to               reinstate   the  old  workmen  given  in   the               Annexure  of Messrs.  Kays  Construction  Co.,               Allahabad.  They will be restored in their old               or  equivalent  jobs and given  continuity  of               service.   In  view of the  somewhat  peculiar               features  of  this  case and  in  the  largest               interest  of the Industry, I  would,  however,

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             order  that  the workmen be paid only  50  per               cent, of their 278               back  wages for the period they were  forcibly               kept out of employment." After  this  award a large number of the  workmen  preferred claims  for their back wages purporting to do so  under  the first sub.section of s. 6-H of the U.P. Industrial  Disputes Act,  1947.  That section, shorn of provisions which do  not concern us, reads as follows :-               "6-H(1) Where any money is due to the  workmen               from  an  employer  under  the  provisions  of               Section  6-H  to  6-R under  a  settlement  or               award,   or  under  an  award  given   by   an               adjudicator  or the State Industrial  Tribunal               appointed  or  constituted  under  this   Act,               before  the commencement of the Uttar  Pradesh               Industrial     Disputes     (Amendment     and               Miscellaneous   Provisions)  Act,  1956,   the               workman  may, without prejudice to  any  other               mode  of recovery, make an application to  the               State Government for the recovery of the money               due  to  him, and if the State  Government  is               satisfied  that any money is so due, it  shall               issue  a  certificate for the  amount  to  the               collector  who  shall proceed to  recover  the               same as if it were an arrear of land revenue.               (2)   Where any workman is entitled to receive               from the employer any benefit which is capable               of  being  computed  in terms  of  money,  the               amount   at  which  such  benefit  should   be               computed  may subject to any rule that may  be               made  under  this Act be  determined  by  such               Labour  Court  as  may be  specified  in  this               behalf by the State Government, and the amount               so determined may be recovered as provided for               in subsection (1).               (3) The  appellant Company made a large number of objections  to this demand before the Labour Commissioner, U.P. to whom the powers  of the State Government under the first  sub-section of  S.  6-H had been delegated.  These  objections,  briefly stated,  were that some of the workmen had already  accepted employment  either with the appellant Company  or  elsewhere and  that  some  of  them were either  not  parties  to  the original  dispute or had died subsequent to the award.   The appellant Company also contended that as the exact number of days for which different workmen had been forcibly kept  out of employment was not determined an order 279 under S. 6-H(1) could not be passed.  There were some  other contentions into which it is not necessary to go because the case now lies within a narrow compass. On July 21, 1958 the Labour Commissioner, purporting to  act under  the first sub-section of s. 6-H issued a  certificate to  the  Collector,  Allahabad  for  the  recovery  of   Rs. 1,06,588-6-6.   Certain objections having been filed by  the appellant Company before the State Government, the  Regional Conciliation  Officer, Allahabad was ordered to  verify  the claims.   In  the meantime, the Labour  Commissioner  issued another certificate on September 9, 1959 by which the sum to be  recovered was reduced to Rs. 50,654-9-6.  This was  said to  be certainly due and it was stated that for the  balance another certificate would issue after the claims were  fully verified.   On September 10, 1959, the Collector  passed  an

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order  which was communicated telegraphically to  the  Chief Mechanical Engineer, North-East Railway, Gorukhpur demanding the  said sum for payment to the workmen, from the  security deposited by the appellant Company with the Chief Mechanical Engineer.  On November 2, 1959 the appellant Company filed a petition  under  Art. 226 of the Constitution  to  have  the orders  dated September 9 and 10, 1959 quashed by a writ  of certiorari  or by any other suitable order or direction  and for release of some property which, it may be mentioned, was under  attachment  after the first certificate  was  issued. The  petition  was  heard  by  Mr.  Justice  Broome  of  the Allahabad High Court and was allowed by him.  He quashed the two orders of the Labour Commissioner and the attachment  of the  property  on  condition  that  the  Company   furnished adequate  security  to  the  satisfaction  of  the  District Magistrate of Allahabad. The  dispute was considerably narrowed before Broom  J.  The only  question that was considered was whether the claim  of the  workmen  before  the Labour  Commissioner  fell  to  be considered  under the first or the second sub-section of  s. 6-H.   Mr. Justice Broome relying upon the analogy of M.  S. N.  S. Transports, Tiruchirapalli v. Rajaram and  Another(1) decided  under  s. 33-C of the Industrial Disputes  Act  and Sesamusa Sugar Works Ltd. v. State of Bihar and Others (2  ) decided  under s. 20 of the Industrial  Disputes  (Appellate Tribunal)  Act,  1950,  held that as the  exact  amount  was required  to  be  determined, proceedings had  to  be  taken before  the  Labour Court under the  second  sub-section  to determine the money equivalent of the "benefit" to which the workmen were (1) [1960] 1 L.L.J. 336. Sup./65-2 (2) A.I.R. 1955 Patna 49. 280 entitled  before  the  certificate could  issue.   In  other words,  Broome  J.was opinion that the  application  of  the first sub-section of s.  6-H   was   premature   and    thus erroneous. Against this decision an appeal was filed under the Letters Patent of the High Court and by the order, now under appeal, the judgment of Broome J. was reversed.  The Division  Bench held  that the words of the second sub-section "any  benefit which  is  capable  of being computed  in  terms  of  money" indicated  benefits like free quarters or  free  electricity and not something which a workman earned through his labour. Reliance  was placed upon a decision of this Court in S.  S. Shetty v. Bharat Nidhi Ltd.(") where Bhagwati J. has pointed out  that  if any benefit awarded by the  Tribunal  was  not expressed  in  terms of money it was necessary  to  have  it computed in terms of money before the appropriate Government could be asked to help in the recovery under s. 20(2) of the Industrial  Disputes (Appellate Tribunal) Act 1950.  In  the opinion of the Division Bench this decision supported  their conclusion  that  the  computation in terms of  money  of  a ’benefit’  was  something different from  mere  arithmetical calculation  of  the amount of back wages.   The  Divisional Bench   distinguished  Kasturi  &  Sons  (P)  Ltd.   v.   N. Salivatesaram  &  Anr.(2) on the ground that s.  17  of  the Working  Journalists (Conditions of Service &  Miscellaneous Provisions) Act, 1955 referred expressly to money due by way of  compensation,  gratuity and wages.  The case  in  Punjab National  Bank Ltd. v. Kharbunda(3) where it was  held  that monetary advantage or profit was not necessarily outside the word ’benefit’ as used in s. 33C of the Industrial  Disputes Act  1947, was also distinguished.  In view of  these  cases

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the  Division  Bench did not follow the two rulings  of  the High  Courts  cited  earlier and another  reported  in  Shri Amarsinghji Mills Ltd. v. Nagarashua (M.P.) & Ors.(4). It  is  contended  before  us  that  the  judgment  of   the Divisional Bench is erroneous in its interpretation of s. 6- H(1)  and  (2).  The question thus is how are the  two  sub- sections to be read ? This section is analogous to s. 33C of the  Industrial  Disputes  Act,  1947  and  s.  20  of   the Industrial  Disputes (Appellate Tribunal) Act, 1950,  It  is significant  that  in  all the three  statutes  the  cognate section  is divided into two parts and the first part  deals with recovery of ’money due’ to a workman under an award and the  second  deals with a ’benefit’ computable in  terms  of money.  Under the first sub-section the State Government (or its delegate), if (1)  [1958] S.C.R. 442.                          (2)  [1959] S.C.R. I. (3)  [1962] Supp. 2 S.C.R. 977.                (4) [1961]  1 L.L.J. 581. 281 satisfied  that  any  money is due, is enabled  to  issue  a certificate  to the collector who then proceeds  to  recover the  amount as an arrear of land revenue.  The  second  part then speaks of a benefit computable in terms of money  which benefit,  after  it is so computed by a Tribunal,  is  again recoverable  in  the same way as money due under  the  first part.  This scheme runs through S. 6-H sub-ss. (1) and (2). That  there is some difference between the two  sub-sections is obvious enough.  It arises from the fact that the benefit contemplated  in the second sub-section is not  "money  due" but  some advantage or perquisite which can be  reckoned  in terms of money.  The Divisional Bench has given apt examples of benefits which are computable in terms of money, but till so commuted are not "money due".  For instance, loss of  the benefit  of free quarters is not loss of "money due"  though such  loss can be reckoned in terms of money by inquiry  and equation.  The contrast between ,’money due" on the one hand and  a  "benefit"  which is not "money due"  but  which  can become  so after the money equivalent is determined  on  the other, marks out the areas of the operation of the two  sub- sections.  If the word "benefit" were taken to cover a  case of  mere arithmetical calculation of wages, the  first  sub- section   would  hardly  have  any  play.   Every  case   of calculation, however, simple, would have to go first  before a  Tribunal.  In our judgment, a case such as  the  present, where  the  money  due  is back  wages  for  the  period  of unemployment is covered by the first sub-section and not the second.  No doubt some calculation enters the  determination of  the  amount for which the  certificate  will  eventually issue  but this calculation is not of the type mentioned  in the  second  sub-section and cannot be made to  fit  in  the elaborate phrase "benefit which is capable of being computed in  terms of money".  The contrast in the  two  sub-sections between  "money  due" under the first  sub-section  and  the necessity of reckoning the benefit in terms of money  before the benefit becomes "money due" under the second sub-section shows that mere arithmetical calculations of the ).mount due are  not  required  to be dealt  with  under  the  elaborate procedure of the second sub-section.  The appellant no doubt conjured  up  a number of obstructions in the  way  of  this simple calculation.  These objections dealt with the "amount due"   and  they  are  being  investigated   because   State Government must first satisfy itself that the amount claimed is in fact due.  But the antithesis between "money due"  and a  "benefit which must be computed in terms of money"  still

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remains,  for  the  inquiry being made is not  of  the  kind contemplated by the second sub-section but is one for 282 the  satisfaction  of the State Government under  the  first sub-section.   It  is  verification of the  claim  to  money within the first sub-section and not determination in  terms of  money  of the value of a benefit.  The judgment  of  the Division Bench was thus right.  The appeal fails and will be dismissed  with  costs.  The companion appeal will  also  be dismissed but we make no order about costs in that appeal. Appeal dismissed. 283