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PETITIONER: SOUTH INDIAN BANK LTD.

       Vs.

RESPONDENT: A.R. CHACKO

DATE OF JUDGMENT: 02/12/1963

BENCH: GUPTA, K.C. DAS BENCH: GUPTA, K.C. DAS GAJENDRAGADKAR, P.B. WANCHOO, K.N.

CITATION:  1964 AIR 1522            1964 SCR  (5) 625  CITATOR INFO :  RF         1964 SC1699  (6)  RF         1971 SC 922  (7)  R          1975 SC1898  (5)  RF         1975 SC2238  (31)  RF         1980 SC2181  (137)  RF         1981 SC1829  (74)

ACT: Industrial  Disputes-Promotion  of   workman-Pay-Application Whether lies under s. 33C(2)-Jurisdiction of Labour  Court,- Sastry  Award-if  benefits accrue after Award ceased  to  be operative--Accountant-If  Workman-Industrial  Disputes  Act, 1947(14 of 1947) 1/S.C.I./64--40 626 ss.  7,  19(3), 19(6), 33C(2)-Industrial  Disputes  (Banking Companies) Decision Act, 1955 (41 of 1955), s. 4.

HEADNOTE: The respondent, a clerk in the appellant Bank, was  promoted as  Accountant and his pay was fixed in the new  post.   The respondent  filed  an  application under s.  33C(2)  of  the Industrial  Disputes Act claiming that he was entitled  from the  date of his joining as accountant (a) to the basic  pay of  his old grade with annual increments due on December  1, every  year, (b) special allowance of Rs. 40 per  month  for the  additional  supervisory duties under para  164  of  the Sastry  Award,  and (c) dearness allowance in terms  of  the award,  and prayed to the Labour Court for recovery  of  the amount  due  to  him.  In  resisting  this  application  the appellant  contended (1) that such an application  under  s. 33C(2)  was  incompetent, (2) that in any  case  the  matter would  be  one  within the  jurisdiction  of  an  industrial tribunal and not the Labour Court, (3) that the Sastry Award had  ceased  to  be operative long before the  date  of  the respondent’s appointment as an Accountant and so no benefits accrued  to  him  under  that Award, and  (4)  that  by  his appointment as accountant, the respondent had ceased to be a workman  and  therefore not entitled to the benefit  of  the Sastry  Award.   The  Labour Court rejected  all  these  ob- jections and allowed the application.  In appeal by  special

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leave. Held:     (i)  Such  an application by  workmen  lies  under s.33C(2) of the Industrial Disputes Act. Central  Bank of India v. P.S. Rajagopalan, [1964] 3  S.C.R. 140, followed. (ii) In  view of the provisions of s. 7 and s.  33C(2),  the Labour Court as     specified by the Government and not  the Industrial Tribunal has  jurisdiction  to  deal  with   this matter. (iii)     The  objection  that no benefit as  claimed  could accrue  to the respondent after the Sastry Award had  ceased to  be  operative, must be rejected.  The  provision  in  s. 19(6)  as  regards  the period for  which  the  award  shall continue to be binding is not in any way affected by s. 4 of the Industrial Disputes (Banking Companies) Decision Act. The different provisions made by the legislature in s. 19(3) and  s.  19(6) illustrate the distinction between  an  award being  in  operation  and  an award  being  binding  on  the parties.  Section 19(6) makes clear that after the period of operation of an award has expired, the award does not  cease to be effective. Though  in  consequence of s. 4 of the  Industrial  Disputes (Banking  companies)  Decision Act, the  Award  remained  in force only until March 31, 1959, it continued to have effect as  a  contract between the parties that had  been  made  by industrial adjudication in place of the old contract. (iv) On  consideration of the evidence in the present  case, the  respondent  was  merely a senior  clerk,  doing  mainly clerical duties 627 and  going  by  the designation of  accountant  and  was  in reality a workman as defined in the Industrial Disputes  Act doing an element of supervisory work.  The Labour Court  has taken proper note of the distinction between accountants who are  really officers and accountants who are  merely  senior clerks  with supervisory duties as envisaged by  the  Sastry Award.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No.178 of 1963. Appeal  by special leave from the order dated  November  27, 1961  of the Central Government Labour Court, Delhi Camp  at Madras in L.C.A. No. 564 of 1961. M.C.  Setalvad,  J.N.  Hazarika  and  K.P.  Gupta  for   the appellant. M.K. Ramamurthi, R.K. Garg, S.C. Agarwal and D.P. Singh  for the respondent. December  2, 1.963. The Judgment of the Court was  delivered by DAS GUPTA J.-This appeal arises out of an application  under s.  33C(2) of the Industrial Disputes Act.   The  respondent A.R. Chacko was working as a clerk in the Coimbatore  Branch of the appellant-Bank when by an order dated June 19,  1959, he  was  promoted as Accountant and was transferred  to  the Alleppy Branch of the Bank.  The appellant’s pay in the  new post was fixed by an order on July 16, 1960.  By this  order he was allowed Rs. 120 as basic pay in the new grade of  Rs. 120-10-160  from January 1, 1960.  From August 1,  1960  and thereafter he was allowed to draw Rs. 10 per month as  CAIIB allowance.   The petitioner’s case in the application  under S.  33C(2)  is  based  on  the  contention  that  after  his promotion   to  the  post  of  accountant  with   additional supervisory duties he was entitled to the special  allowance

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of Rs. 40 tinder Para 164 of the Sastry Award.  His case  is that  he  was  entitled  from the date  of  his  joining  as accountant,  i.e., from July 13, 1959 (a) to a basic pay  of Rs.  95  of  his old grade with  annual  increments  due  on December  1, every year i.e., at the rate of Rs. 95  in  the month  of August, September, October and November  1959  and thereafter at the rate of 628 Rs. 100 from December 1959 to November 1960, and  thereafter at  the  rate  of Rs. 106 from December  1960;  (b)  special allowance of Rs. 40 per month for the additional supervisory duties  and  (c) dearness allowance in terms of  the  award. The total amount to which he would be entitled thus would be Rs. 4,495.22. The amount actually paid to him for the period July  13,  1959  to  the end of March  1961  for  which  the application  was brought was Rs. 3637.73. He claimed  to  be entitled  to the additional amount of Rs. 855.49 and  prayed that the Labour Court be pleased to issue a certificate  for this  amount to the Collector authorising the  Collector  to recover the amount in accordance with law. In  resisting this application the Bank contended  (1)  that such  an  application  under s.  33C(2)  of  the  Industrial Disputes Act, 1947 was incompetent, (2) that in any case the matter would be one within the jurisdiction of an industrial tribunal and not the Labour Court, (3) that the Sastry Award had  ceased to be operative from March 31, 1959 long  before the  date of the respondent’s appointment as  an  accountant and  so no benefits accrued to him under that award and  (4) by  his appointment as accountant the respondent had  ceased to  be  a  workman and was therefore  not  entitled  to  the benefits of the Sastry Award.  The Labour Court rejected all these objections and allowing the application, computed  the amount due to the respondent from the Bank to be Rs. 855.49. Against  this decision the present appeal has been filed  by special leave. The  first objection raised by the Bank is now concluded  by the  decision of this Court in the Central Bank of India  v. P.  S. Rajagopalan (1) where it has been held that  such  an application by workmen lies under s.    33C(2) of the Act. In  support  of the second objection Mr. Setalvad  drew  our attention to the second schedule to the Industrial  Disputes Act,  which sets out the matters within the jurisdiction  of the Labour Court, but (1)  [1964] 3 S.C.R. 140. 629 does  not  include  any  which could be  said  to  cover  an application  under  s. 33C(2).  The  contention  is  clearly misconceived.   The schedule refers specifically to s. 7  of the  Act.   That  section lays  down  that  the  appropriate government  may,  by notification in the  official  gazette, constitute one or more Labour Courts for the adjudication of industrial disputes relating to any matter specified in  the second  Schedule and for performing such other functions  as may  be assigned to them under this Act.  Section 33C(2)  in terms assigns the determination of the amount of benefit  to which  the workman is entitled to receive from the  employer and which is capable of being computed in terms of money  to such Labour Court as may be specified in this behalf by  the appropriate  Government.   Clearly,  therefore,  the  Labour Court as specified by the government and not the  Industrial Tribunal has jurisdiction to deal with this matter. In  support  of the third objection raised by the  Bank  Mr. Setalvad  drew  our  attention to s.  4  of  the  Industrial Disputes (Banking Companies) Decision Act, 1955, and  argued that  in  view  of this provision  the  respondent  was  not

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entitled  to  any benefit of the Sastry Award in  July  1959 when  he  was asked to perform  the  additional  supervisory duties.  Section 4 runs thus:-               "Notwithstanding  anything  contained  in  the               Industrial   Disputes   Act,  1947,   or   the               Industrial Disputes (Appellate Tribunal)  Act,               1950 the award as now modified by the decision               of the Labour Appellate Tribunal in the manner               referred  to  in s. 3 shall  remain  in  force               until March 3 1, 1959." It  is  said that the non-obstante  clause  "Notwithstanding anything  contained  in the Industrial Disputes  Act,  1947" makes the provisions of s. 19(6) inapplicable to the  Sastry Award  and  so  the provision there  that  the  award  shall continue to be binding on the parties until a period of  two months had elapsed from the date on which notice is given by any  party bound by the award to the other party or  parties intimating 630 its  intention  to terminate the award, does not  come  into operation.   To  this objection two answers  are  available. The first is that there is difference between an award being in operation and an award being binding on the parties.  The different provisions made by the legislature in s. 19(3) and s.  19(6) illustrate this distinction.  Under s.  19(3)  the award  remains in operation for a period of one  year.  (The words "from the date on which the award becomes  enforceable under s. 17A" were inserted after the words "     period  of one year" by the amending Act of 1956).  Section 19(6) is in these words:-               "Notwithstanding  the expiry of the period  of               operation  under  sub-section (3),  the  award               shall  continue to be binding on  the  parties               until a period of two months has elapsed  from               the date on which notice is given by any party               bound  by  the  award to the  other  party  or               parties intimating its intention to  terminate               the award." This makes it clear that after the period of operation of an award has expired, the award does not cease to be effective. For   it continues to be binding thereafter  on  the parties until  notice  has been given by one of the parties  of  the intention  to terminate it and two months have elapsed  from the  date  of  such  notice.  The effect  of  s.  4  of  the Industrial Disputes (Banking Companies) Decision Act is that the award ceased to be in force after March 31, 1959.   That however has nothing to do with the question as to the period for which it will remain binding on the parties  thereafter. The provision in s. 19(6 as regards the period for which the award shall continue to be binding on the parties is not  in any way affected by s. 4 of the Industrial Dispute  (Banking Companies) Decision Act, 1955. Quite  apart from this, however, it appears to us that  even if  an award has ceased to be in operation or in  force  and has ceased to be binding on the parties under the provisions of  s.  19(6)  it  will continue to have  its  effect  as  a contract   between  the  parties  that  has  been  made   by industrial adjudication in place 631 of  the  old  contract.  So long as  the  award  remains  in operation under s. 19(3), s. 23(c) stands in the way of  any strike  by  the  workmen and lock-out  by  the  employer  in respect of any matter covered by the award.  Again, so  long as  the  award is binding on a party, breach of any  of  its terms  will make the party liable to penalty under s. 29  of

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the  Act, to imprisonment which may extend to six months  or with  fine or with both.  After the period of its  operation and  also  the period for which the award  is  binding  have elapsed s. 23 and s. 29 can have no operation.  We can  how- ever  see nothing in the scheme of the  Industrial  Disputes Act  to  justify  a conclusion  that  merely  because  these special  provisions  as regards prohibition of  strikes  and lock-outs  and of penalties for breach of award cease to  be effective  the new contract as embodied in the award  should also  cease  to  be effective.  On the  contrary,  the  very purpose for which industrial adjudication has been given the peculiar authority and right of making new contracts between employers and workmen makes it reasonable to think that even though  the period of operation of the award and the  period for  which it remains binding on the parties  may  elapse-in respect  of both of which special provisions have been  made under  ss.  23  and  29  respectively-may  expire,  the  new contract would continue to govern the relations between  the parties  till  it  is displaced by  another  contract.   The objection  that no such benefit as claimed could  accrue  to the  respondent  after  March 31,  1959  must  therefore  be rejected. This brings us to the last objection that on appointment  as accountant,  the respondent Chacko ceased to be  a  workman. Admittedly,  the  mere  fact  that  he  was  designated   as accountant  would  not  take  him out  of  the  category  of workman.   This  was recognised in para 332  of  the  Sastry Award when it was said:-               "The  categories  of  workmen  known  as  Head               Clerks,  Accountants,  Head  Cashiers   should               prima facie be taken as workmen wherever  they               desire   to  be  so  treated  but  with   this               important proviso               632               that  the  banks are at liberty  to  raise  an               industrial  dispute about such  classification               wherever  they feel that with reference  to  a               particular  branch and a particular  office  a               person so designated is really entrusted  with               work  of a directional and controlling  nature               and perhaps even supervision of a higher  type               over ordinary supervisory agencies."               In para 167, where the case of accountants was               specially dealt with it was again said:-               In  several  cases they will  indisputably  be               officers.  It is difficult to lay down a  hard               and   fast  rule  in  respect  of  them.    An               Accountant    oftentimes   is    the    second               officer-in-charge  of  branches,  particularly               where  the branches are  comparatively  small.               In  big  banks where there is a  hierarchy  of               officers  there  may be  a  chief  accountant,               accountants, and sub-accountants.  In most  of               these cases the "accountants" will probably be               officers.  There will however be incumbents of               such  posts, though going under the  dignified               designation of accountants who are in  reality               only  senior  clerks  doing  higher  type   of               clerical   work   involving  an   element   of               supervision over other clerks as part of their               duties.    In  such  cases  where  they.   can               properly  be regarded as workman  the  minimum               allowances  which  we  have  fixed  for   sub-               accountants would equally apply to them." The  Labour Court appears to have taken proper note of  this

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distinction between accountants who are really officers  and accountants  who are merely senior clerks  with  supervisory duties and on a consideration of the evidence on the  record as  regards the duties actually performed by the  respondent Chacko,  has  come to the conclusion that he  was  merely  a senior clerk, doing mainly clerical duties, and going by the designation  of accountant and was in reality a  workman  as defined in the Industrial Disputes Act and doing an  element of supervisory work. 633 We  can find no mistake in the approach of the Labour  Court to  the  question  nor  can we  see  any  justification  for interfering with its conclusion on the evidence in the case. All   the  relevant  documents  produced  have   been   duly considered by the Labour Court in light of the oral evidence given;  and  on  such  consideration  it  has  come  to  the conclusion  that though on paper certain rights  and  powers were assigned to him and occasionally he acted in the  place of the Agent when the Agent was absent, such duties did  not form part of his principal and main duties. Mr. Setalvad drew our attention to a copy of the  resolution passed by the Board of Directors under which the  respondent as Accountant was authorised "to make, draw, sign,  endorse, purchase,  sell, discount and negotiate Bills  of  Exchange, Hundies,  Drafts, Cheques, Promissory Notes and other  Nego- tiable instruments in the name of and on behalf of the  Bank and  also to operate upon all banking account maintained  by this  Bank with banks, bankers, and others in India for  and on  behalf  of  the  South  Indian  Bank  Limited.   "  This resolution  was dated July 18, 1959 and on the same  date  a circular-letter was issued to all branches sending a  binder containing  specimen signatures of all the officers  of  the Bank  and  the respondent’s name was also included  in  this list.   In  spite  of this however, as pointed  out  by  the Labour  Court,  it does not appear from  the  evidence  that generally  Mr. Chacko had occasion to exercise  the  several powers said to have been granted to him.  A truer picture of his  actual functions appears from a document  dated  August 28,  1961 signed by the Agent which was put in  evidence  as Ex.1.  and the correctness of which does not appear to  have been challenged on behalf of the Bank authorities.  The list of  duties  mentioned in this document  clearly  shows  that these  are almost wholly clerical-the only  exception  being Item 14, viz., "and other work entrusted to him by the Agent from  time to time." The Labour Court has also  pointed  out that  no power of attorney was granted to Mr. Chacko.   When on a consideration 634 of  all the relevant evidence the Labour Court has  come  to the  conclusion that the duties performed by the  respondent consisted  of clerical work with supervisory  functions  and were certainly not managerial or administrative as contended for  by the Bank, we find no reason to interfere  with  that conclusion. It is pertinent to notice that on the Bank’s case a  workman in the position of Chacko would on promotion to the rank  of an officer from that of a workman be financially a loser  by being deprived of the special allowance which he would  have got  as a workman with supervisory duties without  obtaining sufficient   recompense   for  the  same  because   of   the performance  of the so-called managerial and  administrative duties.  It is not unreasonable to think that this so-called promotion to officer’s grade was really intended to undo the effect  of the recommendations of the Sastry Award for  this supervisory  allowance.   It.  is  difficult  to  understand

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otherwise  that  persons with  higher  responsibilities  and managerial  duties to perform would in fact be getting  less in  rupees  and  annas than what they would  be  getting  as workmen.   In the circumstances, the finding of  the  Labour Court  that  the respondent was a workman  entitled  to  the benefits   of  the  Sastry  Award  cannot  be   successfully challenged. All  the  points taken in the appeal  therefore  fail.   The appeal is dismissed with costs. Appeal dismissed. 635