Punjab National Bank Limited vs K. L. Kharbanda

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 103 of 1961

Decision Date: 02/02/1962

Coram: K.N. Wanchoo, P.B. Gajendragadkar, A.K. Sarkar

In this case the Supreme Court considered an appeal filed by Punjab National Bank Limited against K. L. Kharbanda, who was a supervisor in the bank. The judgment was delivered on 2 February 1962 by a bench consisting of Justice K. N. Wanchoo, Justice P. B. Gajendragadkar and Justice A. K. Sarkar. The case is reported in 1963 AIR 487 and 1962 SCR Supl. (2) 977. The citation also appears in several later reports. The principal issue concerned the application of section 33C(2) of the Industrial Disputes Act, 1947, to the computation of monetary benefits under the Sastri Award, which was an award governing wages for bank clerks. The Sastri Award established a single wage scale for clerks in all banks and provided a special allowance for clerks who were assigned special posts that required special skill. Paragraph 297(7) of the award fixed the basic wages of bank employees who joined after 31 January 1951 in the new scales prescribed. The respondent, Kharbanda, had been appointed a clerk and was promoted to a supervisor in 1951. The bank fixed his basic wages according to the scale applicable to graduate clerks and also granted him the special allowance prescribed by the Sastri Award. Kharbanda filed an application under section 33C(2) of the Industrial Disputes Act, 1947, seeking a monetary computation of the benefit to which he claimed entitlement under the Sastri Award, contending that his basic wages should be fixed according to the scale that the bank used for supervisors. The bank argued that section 33C(2) did not apply to monetary benefits and that, because the respondent was a clerk, his wages had been fixed correctly. The Court held that section 33C(2) was applicable to the computation of monetary benefits as well as non‑monetary benefits, and therefore the application was maintainable. The Court explained that the term “benefit” in the provision includes both monetary and non‑monetary benefits and there was no reason to exclude monetary benefits. Moreover, the word “computed” in section 33C(2) means to calculate, not merely to convert, and the provision concerns the execution of a calculation of benefit. The Court referred to earlier decisions, including Glaxo Laboratories (India) Limited v. Shri A. Y. Manjrekar (1955) L. A. C. 505, South Arcot Electricity Distribution Company Limited v. Elumalai (1959) I. L. L. J. 624 and 978, and M. S. N. S. Transports, Tiruchirapalli v. Rajaram (K) (1960) I. L. L. J. 316, supporting this interpretation. The Court further held that the respondent was entitled to a basic salary according to the scale fixed for supervisors, observing that the grades of supervisors were also grades for workmen prevailing in the appellant bank. It noted that the Sastri Award provided a single grade for all clerical workmen, regardless of the name by which they were known in the bank, and therefore the respondent’s wages could not be reduced below what they would be under a point‑to‑point adjustment on the corresponding scale he was drawing before the award, as affirmed by the relevant paragraph of the award.

In this case the Court observed that, according to paragraph 292(7) of the Sastry Award, the respondent’s basic wages could not be lowered below the amount that would result from a point‑to‑point adjustment on the same scale that he was drawing before the Sen Award, while he was employed as a workman in the bank. The Court cited the decision of Punjab National Bank Ltd. v. Their Workmen, Civil Appeal No. 450 of 1959, decided on 6 December 1960, to support this interpretation.

The appeal before this Court was Civil Appeal No. 103 of 1961, filed by special leave against the judgment and order dated 2 August 1960 of the Central Government Labour Court at Delhi in Labour Court Appeal No. 80 of 1960. Counsel for the appellant and counsel for the respondent were instructed to present their arguments. The judgment was delivered on 2 February 1962 by Justice Wanchoo. The matter concerned the fixation of the respondent, Kharbanda, who held the position of supervisor in Punjab National Bank Limited, the appellant. The dispute arose under the All India Industrial Tribunal (Bank Disputes) Award, commonly referred to as the Sastry Award. Kharbanda had applied to the Central Labour Court, Delhi, invoking section 33‑C(2) of the Industrial Disputes Act, 1947, asserting that he was entitled to certain monetary benefits computable under the Sastry Award, but that the appellant had erred in calculating his basic salary. He prayed that the Labour Court compute the benefit correctly and determine the arrears payable, which he claimed amounted to Rs 6,428.28 up to the date of his application. The appellant opposed the application on two grounds: first, that the application was not maintainable under section 33‑C(2) and the Labour Court therefore lacked jurisdiction; second, that the appellant’s method of fixing the basic salary was accurate, and consequently the respondent was not deprived of any benefits that required calculation by the Court.

Before addressing the two questions raised on appeal, the Court set out the background of the Sastry Award. Initially, a tribunal known as the Sen Tribunal was constituted in June 1949 to resolve disputes between banks across the country and their employees. After an exhaustive inquiry, the Sen Tribunal issued an award; however, that award was set aside by this Court on appeal in 1951. In response, Act II of 1951 was enacted as a temporary measure to freeze certain provisions of the Sen award in order to curb the widespread unrest among bank employees. The Central Government subsequently referred the matter to the Sastry Tribunal in January 1952. The Sastry Tribunal conducted a detailed inquiry and issued its award, which was published on 20 April 1953. Both banks and their employees filed appeals against this award before the Labour Appellate Tribunal, and on 28 April 1954 the Appellate Tribunal substantially affirmed the recommendations and directions of the Sastry Tribunal, making only limited modifications. The Court noted that for the purposes of the present appeal, the relevant provisions of the Sastry Award that formed the subject of the dispute had remained unchanged, as they were later incorporated and settled by the Industrial Disputes (Banking Companies) Decision Act, 1955.

The Court explained that the award originally issued by the Sen Tribunal was set aside in 1951. Subsequently, Act II of 1951 was enacted as a temporary measure to freeze certain provisions of that award so as to prevent the spread of the unrest that then existed among bank employees. The dispute was then referred by the Central Government to the Sastry Tribunal in January 1952. After conducting an elaborate inquiry, the Sastry Tribunal issued its award on 20 April 1953. Both the banks and their employees filed appeals against that award before the Labour Appellate Tribunal. On 28 April 1954, the Appellate Tribunal substantially confirmed the recommendations and directions of the Sastry Tribunal, although it made a few modifications. The Court noted that it would not consider the subsequent history of the dispute because it was admitted that the provisions of the Sastry award that related to the matter now before the Court had remained unchanged when the dispute was finally closed by the Industrial Disputes (Banking Companies) Decision Act, Chapter XLI of 1955.

The Court further described how the Sastry Tribunal, after deciding to provide a single scale for clerks in all banks, classified banks into four classes and the locations of banks into three areas. The specific category relevant to the present appeal was Class A, Area I, for which the grade ranged from Rs 85 to Rs 280 with varying increments, as mentioned in paragraph 119 of the award. Having established one cadre of clerks, the Tribunal then turned to the question of certain special posts that required special skill for efficient discharge of duties. The issue was whether a separate pay scale should be created for these special posts or whether the incumbents should remain on the clerk scale with additional advantages such as extra increments, a special allowance, or a combination of both. The Tribunal rejected the idea of a separate scale and instead decided to grant a special allowance on top of the clerical scale. For the class of supervisors, to which the respondent belonged, the award provided a special allowance of Rs 50 in A‑class banks in Area I, as set out in paragraph 164. The award then addressed the fixing of employees’ pay into the new scale in paragraph 292, dividing employees into two categories: those who entered bank service before 31 January 1950 and those who entered after that date. The Court noted that the present appeal concerned only the latter category, i.e., employees who joined after 31 January 1950.

In this case the Court noted that the matter concerned employees who had entered the service of the bank after 31 January 1950. The relevant provision for those employees was clause (7) of paragraph 292, which provided that “the workman shall be fitted into the new scale of pay on a point‑to‑point basis as though it had been in force since he joined the service of the bank, provided that his adjusted basic pay is not less than what it would be under a point‑to‑point adjustment on the corresponding ‘pre‑Sen’ scale.” The respondent had been appointed as a superior by the appellant on 22 April 1951 with a basic salary of Rs 120 per month. At that time the basic pay scale for supervisors was Rs 120‑8‑200‑EB‑10‑300, while the basic scale for graduate clerks and similar posts was Rs 75‑5‑120‑8‑200. The dispute between the parties arose because the respondent claimed that, for the purpose of the proviso to clause (7), his basic salary should be fixed according to the supervisor’s scale, whereas the appellant contended that it could be fixed only at the highest point of the graduate clerk scale. The appellant had therefore fixed the respondent’s pay on the graduate clerk scale, which prompted the respondent to file the present application under section 33‑C(2) of the Industrial Disputes Act. The tribunal had decided in favour of the respondent, and the appellant subsequently applied for special leave, which was granted, bringing the matter before this Court. The first question for determination was whether an application could be made under section 33‑C(2). Section 33‑C(2) states: “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 rules that may be made under this Act, be determined by such Labour Court as may be specified in this behalf by the appropriate Government, and the amount so determined may be recovered as provided for in sub‑section (1).” The appellant argued that the provision dealt only with benefits that were non‑monetary in nature but which could be valued in monetary terms, and that only in such cases could a workman apply to the Labour Court to have the non‑monetary benefit quantified. Conversely, the respondent contended that the term “benefit” was not limited to non‑monetary advantages and that any benefit to which a workman was entitled under an award, if it required computation, could fall within the scope of an application under section 33‑C(2).

In this matter the respondent relied on a series of decisions of industrial tribunals and High Courts that held the term “benefit” in sub‑section (2) of section 33‑C was not limited to non‑monetary benefits. The Court identified the essential phrase to be interpreted as “any benefit which is capable of being computed in terms of money”. It observed that the word “benefit” has a broad meaning, and dictionary definitions describe it as “advantage” or “profit”, which naturally encompass both monetary advantage and monetary profit. Consequently, there is no basis for excluding monetary benefits from the term “benefit” in this sub‑section unless the language unmistakably shows that monetary benefits were intended to be omitted. The appellant argued that the qualification “which is capable of being computed in terms of money” should be read to exclude monetary benefits, contending that it would be nonsensical to compute monetary benefits in monetary terms. The Court rejected this contention, noting that the qualifying word is “computed” rather than “converted”. It explained that had the language read “which is capable of being converted in terms of money”, the implication would be that the benefit to be converted was something other than a monetary benefit, because “convert” means “to change by substituting an equivalent”. Since the clause uses “computed”, whose dictionary meaning is merely “to calculate”, the provision applies where a benefit has not already been calculated. For example, where an award grants a benefit but does not specify its monetary amount, sub‑section (2) would be invoked to determine the amount if a dispute arises. The Court further compared sub‑section (1) with sub‑section (2) of the same section. Sub‑section (1) concerns cases where money is due to a workman under a settlement, an award, or Chapter VA, and assumes that the amount is already computed or that there is no dispute over its calculation. In contrast, sub‑section (2) addresses situations where a monetary benefit has been awarded but the exact amount has not been computed in the award, and a dispute exists regarding its calculation. Accordingly, the Court concluded that it cannot be said, based on the wording of sub‑section (2), that the provision is confined only to non‑monetary benefits that must be converted into money.

In interpreting sub‑section (2) the Court observed that it should not be limited to situations where a non‑monetary benefit must be converted into money. The sub‑section can likewise apply to monetary benefits that have not been calculated or computed, for example when an award confers a monetary benefit but the exact amount is not set out and there is a dispute between the workman and the employer regarding its calculation. The Court further noted that section 33‑C was introduced into the Act in 1956 for the purpose of execution after the Industrial Disputes (Appellate Tribunal) Act, 1950 was repealed. The repealed Act contained section 20, which dealt with execution of awards and was substantially similar to the present section 33‑C. When the Appellate Tribunal Act was withdrawn, a provision analogous to section 20 was incorporated into the Act at the same time. Accordingly, section 33‑C is an execution‑related provision; where the amount to be executed is already worked out, for instance in an award, or where it can be worked out without any dispute, section 33‑C(1) is applicable. However, where the award does not state the amount due to the workman and a dispute exists as to its calculation, sub‑section (2) becomes applicable and the workman may invoke it to have the amount computed, provided he is entitled to a benefit—whether monetary or non‑monetary—that can be expressed in money. The Court cited a 1955 decision of the Appellate Tribunal in Glaxo Laboratories (India) Limited Bombay v. Shri A. Y. Manjrekar, where the Tribunal held that section 20 of the Appellate Tribunal Act dealt solely with execution and there was no basis for restricting sub‑section (2) to non‑monetary benefits. The same approach was adopted by a learned Single Judge of the Madras High Court in South Electricity Distribution Company Limited v. Elumalal, and later reaffirmed by a Division Bench of the same High Court in M.S.N.S. Transports' Tiruchirapalli v. Rajaram (K). Considering the language of the sub‑section and the authorities cited, the Court concluded that the term ‘benefit’ in sub‑section (2) is not confined to non‑monetary benefits that require conversion into money; it embraces all benefits, monetary or otherwise, to which a workman may be entitled under an award. The sub‑section becomes operative whenever such benefits have to be computed or calculated and a dispute exists regarding that computation. Once the benefits have been computed, the workman may proceed under sub‑section (1) to recover the amount in the same manner as arrears of land‑revenue. In the present case, the Sastry award had granted a benefit to the respondent and to others in a similar position by fixing a pay in a new scale; even though that benefit could be monetary and there was a dispute about its amount, the respondent was entitled to approach the labour court for computation of that benefit in monetary terms, and the labour court possessed jurisdiction to entertain the application and determine the amount due based on the benefit conferred by the award.

Even though the benefit conferred by the award could be calculated in monetary terms and the parties were disputing the exact amount of that benefit, the Court observed that the respondent was entitled to approach the labour court for a monetary computation of the benefit. The labour court possessed jurisdiction to entertain such an application and to determine the amount due based on the benefit specified in the award. Accordingly, the respondent could seek a determination of the pay in the new scale, and the labour court would be authorized to compute the sum that the respondent was owed under the award.

The Court then turned to the question of how the basic salary should be fixed. The appellant placed particular emphasis on the term “corresponding” that appears in clause (7) of paragraph 292. The appellant argued that the Sastry Tribunal had fixed a single scale for all clerks, and because supervisors were classified as clerks, the respondent should be regarded as belonging to the corresponding clerk scale of the appellant‑bank for the purposes of applying the proviso. The appellant further submitted that, on that basis, the respondent would be eligible for the special allowance of Rs. 50 per mensem. In contrast, the respondent maintained that supervisors were to be treated as workmen, a position that had been affirmed in a previous dispute between the same bank and its supervisors. That dispute was referred to an industrial tribunal which rendered an award on April 4, 1957, an award that the Court had earlier described in Punjab National Bank Ltd. v. Their Workmen. According to the respondent, determining the appropriate corresponding scale required identifying the scale of workmen to which the respondent belonged at the relevant time.

The Court noted that the appellant did not contest the proposition that its supervisors, accountants and accounts‑in‑charge were generally workmen under the Industrial Disputes Act, although it recognized that some individuals in those positions might not fall within that category. The difficulty for the appellant stemmed from the existence of nine separate pay scales covering workmen of all categories, ranging from peons and chaukidars at the lower end to accountants and accounts‑in‑charge at the upper end. Of these nine scales, three applied to subordinate staff as defined by the Sastry award, while six applied to clerical staff, a group that also comprised the supervisor grade. The appellant contended that only four grades—Assistant Cashiers, Head Cashiers, Undergraduate clerks, typists and Godown keepers, and Graduate clerks together with all sanctioned stenographers—should be treated as clerks for the purpose of correlating with the clerk scale fixed by the Sastry award. It argued that the remaining two grades, namely Supervisors and Accountants and Accounts‑in‑charge, should not be classified as clerks for correspondence purposes. However, in light of the industrial tribunal’s decision in the earlier dispute involving the bank’s supervisors and accountants, the Court found it evident that those two grades were also recognised as workmen within the bank’s structure. The Sastry award, as the Court explained, had established a single grade for all clerical workmen, thereby rendering the distinction between “clerks” and “supervisors” irrelevant for the purpose of applying the clause on corresponding scales.

In this case, the Court examined clause (7) of the Sastry award and noted that the award created a single grade for all clerical workmen. The Court explained that when clause (7) speaks of “correspondence”, it refers to the grades of workmen that existed in a bank, regardless of the specific titles those grades carried. Consequently, the Court held that the fact that some clerical workmen were designated as “clerks” while others were called “supervisors”, “accountants” or “accounts in‑charge” did not affect the determination of correspondence. Paragraph 292, the Court observed, deals with workmen in general and does not draw a separate line between clerical staff and subordinate staff. Moreover, clause (7) itself mandates that workmen shall be placed on the new pay scale on a point‑to‑point basis. Therefore, to identify the appropriate scale for the purpose of the proviso in clause (7), the Court reasoned that it was necessary to look at the scale that corresponded to a workman before the Sen award was introduced. If the supervisor’s scale constituted the scale of a workman prior to the Sen award, then, according to the Court, it must be treated as the corresponding pre‑Sen scale for the respondent, irrespective of the label assigned to that class of workmen in that particular bank.

The Court further explained that the proviso to clause (7) requires that, after any adjustment, the basic pay of a workman must not fall below the amount that would result from a point‑to‑point adjustment on the corresponding pre‑Sen scale. Accordingly, if the supervisor’s scale was a workman’s scale, it had to be regarded as the relevant pre‑Sen scale for the respondent, and his basic pay could not be fixed in the new Sastry‑award scale at a level lower than what the point‑to‑point adjustment on that supervisor’s pre‑Sen scale would yield. The Court pointed out that it had already been held in previous proceedings involving the same bank that supervisors were to be treated as workmen, and therefore the supervisor’s scale in that bank was a workmen’s scale. When fixing pay under clause (7), the Court concluded that the only appropriate corresponding scale for the respondent, examined at a time before the Sen award, was the supervisor’s scale, since supervisors had been recognized as workmen between the parties to the present dispute. The Court noted that the Sastry award’s provision of a social pay for certain employees, including supervisors, was irrelevant to the question of correspondence that had to be resolved under clause (7) to determine the basic pay. In light of this reasoning, the Court affirmed that the respondent was correct in asserting that his basic pay could not be reduced below the amount resulting from a point‑to‑point adjustment on the corresponding pre‑Sen scale, and that the labour court’s view was therefore correct. Once this principle was established, the Court observed that there was no longer any dispute regarding the amount due to the respondent.

The Court observed that the sum which was claimed to be owed to the respondent had been duly determined and was payable to him. Having examined the contentions presented in the appeal, the Court concluded that the appellant had not established any ground on which the order could be set aside or altered. Consequently, the appeal was found to be without merit and therefore failed. In accordance with this conclusion, the Court ordered that the appeal be dismissed and that the costs of the proceedings be awarded against the appellant. The dismissal of the appeal was thus confirmed, and the order of dismissal stood as the final determination of the matter.