Merely Because There Was An Interim Stay Of The Order Of Reinstatement During The Pendency Of The Proceedings, An Employee Cannot Be Denied The Back Wages When Ultimately The Order Of Reinstatement Came To Be Confirmed By The Court: Apex Court

CASE TITLE:
D.N. Krishnappa Vs. The Deputy General Manager

DATE OF ORDER:
12 December 2022

JUDGE(S):
Justice M.R. Shah
Justice C.T. Ravikumar

SUBJECT

The Division Bench comprising Justice M.R.Shah and Justice C.T. Ravikumar set aside the order of the High Court of Karnataka and opined that where the appellant approached the Central Government Industrial Tribunal for his reinstatement and then for the implementation of award providing for such reinstatement, it can not be said that the same matters have not been adjudicated upon so as to not make it a subject matter of proceeding u/s 33-C(2) of the Industrial Disputes Act. The Court also held that merely because there was an interim stay of thereinstatement while theproceedings were pending, the employee cannot be denied the back wages when ultimately the Court ended up confirming the order of reinstatement. It observed- “ itwas the employer – bank who obtained the stay against reinstatement and ultimately order of reinstatement attained the finality. Why should the employee be made to suffer, when the bank obtained the stay of reinstatement and when the order of reinstatement subsequently came to be confirmed and attained the finality?”

IMPORTANT LEGAL PROVISIONS

THE INDUSTRIAL DISPUTES ACT

• Section 32-C (2)- provides that any question as to the amount of money due from an employer to his employee can be decided by such Labour Court as specified by Central Government on this behalf.
• Section17B- stipulates that when an Award of reinstatement of a workman is challenged by the employer before the High Court or the Supreme Court and the operation of the same is stayed, the employer shall be liable to pay the workman, during the period of pendency of such proceedings, full wages last drawn by him.

BRIEF FACTS OF THE CASE

• The appellant was an employee of the respondent bank. The bank dismissed him in the departmental proceedings.
• The said order of dismissal was challenged by the appellant before the Central Government Industrial Tribunal u/s 10(2)(a) of the Industrial Disputes Act.
• The CGIT set aside the order of dismissal and passed an order for the reinstatement of the appellant along with 50% back wages and withholding four annual increments with cumulative effect starting from the date when the order was passed i.e. 18.07.2007 till the date of reinstatement.
• The order of CGIT was challenged before the High Court. The Single Bench of HC while confirming the order of reinstatement, reduced the back wages from 50% to 25%. The Division Bench of the same Court also upheld the order of reinstatement but ruled that the appellant was not entitled to any back wages. A Special Leave Petition was also preferred against this order on 12.07.2013, which was dismissed.
• In the end, the order dated 18.07.2007 passed by CGIT attained finality.
• On failure of the bank to pay the full wages from the date of order to that of reinstatement, the appellant again filed an application u/s 33-C(2) of the ID Act. CGIT ruled in the appellant’s favour.
• On an appeal against the same by the respondent bank, the High Court set aside the order passed by the CGIT on the ground that CGIT had no jurisdiction to decide the application u/s 33-C(2) of the Act.The High Court relied upon the case of Bombay Chemical Industries v. Deputy Labour Commissioner &Anr. [(2022) 5 SCC 629]
• It is against this impugned judgement of the High Court that the present appeal is preferred before the Supreme Court.

ARGUMENTS RAISED BY THE APPELLANT

• The learned counsel appearing for the appellant contended that the High Court has misapplied the ratio of the Bombay Chemical Industries Case.
• While relying upon the decision of the Apex Court in Namer Ali Choudhary &Ors. V. Central Inland Water Transport Corporation Ltd. &Anr. [(1997) 4 SCC 575], submitted that once there is an award, the question as to the amount of money due under the award will be the subject matter of a proceeding u/s 33-C(2) of the ID Act.
• It was also submitted that if the order of the High Court is upheld, the employee/workman will have to suffer for no fault of his.
• The learned counsel also argued that mere pendency of proceedings will not amount to dilution of the requirement of reinstatement in terms of the award.

ARGUMENTS RAISED BY THE RESPONDENT

• The learned counsel appearing for the respondent submitted that the operation of the award passed on 18.07.2007 was stayed by the High Court.
• The learned counsel while relying on the applicability of the doctrine of merger pleaded the award dated 18.07.2007 merges with the judgement and order dated 12.07.2013 and therefore, only the final judgement and order passed by the Division Bench of High Court on 12.07.2013 shall be enforceable. As such, the appellant shall not be entitled to claim back wages for the said period.
• It was also submitted that in view of the provision of section 17 B of the Act, the appellant was paid the last drawn wages for the period of stay of the award. As such, he was not entitled to full back wages for the said period.

LEGAL ISSUE

• Whether the appellant shall be entitled to the full wages from the date of award of reinstatement i.e. 18.07.2007 passed by the CGIT to the actual date of reinstatement i.e. 23.09.2013?

ANALYSIS BY THE COURT

• The Court observed that an interim order is always subject to the final order . As a result, it can not be upheld that merely because there was an interim stay of the order of reinstatement while the suit was pending, the appellant can be denied the back wages when ultimately the Court ended up confirmingthe said order of reinstatement.
• There is no applicability of the principle of merger as contended by the learned counsel for the respondent to the present case.
• The Court further noted that the fact that the appellant was paid the last drawn wages u/s 17B of the ID Actfor the period during the stay of the order of reinstatement would not disentitle him from receiving any wages for the said period. However, such amount paid can be deducted or adjusted while paying the wages.
• The Court also observed that the High Court erred in applying the ratio of the Bombay Chemical Industries Case. In the present case, it can not be said that the claim of the appellant was not adjudicated upon as the appellant had approached the CGIT for his grievances and CGIT had passed appropriate order after adjudicating upon the said matters.

CONCLUSION

In view of the above observations, the Apex Court set aside the impugned order of the learned High Court. The Apex Court directed the bank to pay to the appellant full wages with all the emoluments from the date of the order of reinstatement i.e. 18.07.2007 to the date of reinstatement i.e. 12.07.2013. The Court also provided for the deduction of the amount already paid u/s 17B of the ID Act.

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