Bombay Gas Co. Ltd vs Gopal Bhiva and Ors

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

Court: Supreme Court of India

Case Number: Civil Appeals Nos. 333-334 of 1962

Decision Date: 9 May 1963

Coram: P.B. Gajendragadkar, K.N. Wanchoo, K.C. Das Gupta

In the matter titled Bombay Gas Co. Ltd versus Gopal Bhiva and others, the Supreme Court of India rendered its judgment on 9 May 1963. The judgment was recorded by Justice P B Gajendragadkar, with Justices K N Wanchoo and K C Das Gupta forming the bench. The petitioner in the appeal was Bombay Gas Co. Ltd and the respondents were Gopal Bhiva and several other individuals. The decision is reported in the law reports as 1964 AIR 752 and 1964 SCR (3) 709, and it has subsequently been cited in numerous later reports covering the years 1967 through 1975. The dispute concerned applications filed under section 33C(2) of the Industrial Disputes Act, 1947, which permits certain categories of workers to claim benefits under an award made by an industrial tribunal.

Sixteen respondents filed petitions invoking section 33C(2), seeking to have the monetary value of the benefits computed and to compel the appellant to pay the amounts prescribed in the award. The appellant raised numerous objections, but the Labour Court rejected those objections, accepted the respondents’ claims, and directed the appellant to pay each respondent the specific sum set out beside his name in the award. Dissatisfied with that order, the appellant obtained special leave to approach this Court.

Before the Supreme Court, the appellant argued three main points. First, it contended that the award on which the claim relied was issued without jurisdiction, and therefore the Labour Court should not have enforced it. Second, the appellant maintained that a worker could obtain the benefit only if he actually worked on every Sunday in the year preceding September 1948. Third, the appellant asserted that the respondents’ claims were filed after an unreasonable delay and should consequently be barred.

The Court examined each argument and held that the Labour Court would have been justified in refusing to implement the award only if it had been convinced that the direction contained in the award was ultra vires. Because the Court found that the award was within jurisdiction, the challenged direction was deemed lawful. The Court further concluded that the applications filed by the respondents were competent and that the Labour Court possessed the authority to determine the monetary computation of the benefit conferred on the respondents.

In addition, the Court observed that proceedings contemplated by section 330(2) of the Industrial Disputes Act are, in many respects, analogous to execution proceedings. Accordingly, a Labour Court called upon to calculate a monetary benefit functions in the capacity of an executing court. Such a court is therefore competent both to interpret the underlying award and to consider any plea that the award is a nullity. Held also, that

In this case the Court observed that there was no merit in the contention that the respondents could not claim the benefit awarded because they had not actually been required to work on every Sunday during the relevant year. The Court explained that the test to be satisfied by the workers was not that they had actually worked on Sundays, but that they could have been required to do so in that year. The Court also held that the legislature had not provided any limitation period for applications made under section 33C (2) of the Industrial Disputes Act, and therefore the Courts were not authorised to create a limitation on grounds of fairness or justice. The language of section 33C (2) was described as plain and unambiguous, placing a duty on the Labour Court to give full effect to the provision without entertaining any limitation considerations. The Court noted that employees who are eligible for the benefit under section 33C (2) may not always be aware of their right, and it would be unfair to impose a time‑bar on claims that they may later have to make under that provision. No justification was found for applying the provisions of the Payment of Wages Act or article 181 of the Limitation Act to proceedings under section 33C (2). The Court distinguished claims for a bonus, which are based on principles of social justice and not on a specific statutory provision, from claims under section 33C (2). It stated that in bonus cases an industrial adjudicator may consider all relevant circumstances and may refuse to entertain a claim or the Government may refuse to make a reference if the claim is made after a long delay. However, such considerations were held to be irrelevant for claims made under section 33C (2); in those cases a limitation period cannot be introduced by industrial adjudication on academic grounds of social justice. The Court referred to several authorities, namely Central Bank of India Ltd. v. P. S. Rajagopalan [1964] Vol. 3 S.C.R. 140; Rai Manekbai v. Manekji Kavasji (1883) 7 Bomb. 213; Hansral Gupta v. Official Liquidators, Dehra Dun Musoorie Electric Tramway Co. Ltd. (1932) L.R. 60 I.A. 13; and Sha Mulchand & Co. Ltd. v. Jawahar Millar Ltd. [1953] S.C.R. 351. The judgment was delivered under the civil appellate jurisdiction for Civil Appeals Nos. 333‑334 of 1962, which were filed by special leave from a preliminary order dated 3 June 1961 and an order dated 29 September 1961 of the Second Labour Court, Bombay, in Applications (I.D.A.) Nos. 447‑462 of 1958. Counsel for the appellant included R.J. Kolah, J.B. Dadachanji, O.C. Mathur and Ravinder Narain, while counsel for the respondents comprised S.V. Gupte, the Additional Solicitor‑General of India, K.T. Sule, M.C. Bhandare, M. Rajagopalas and K.B. Chaudhuri. The judgment was delivered on 9 May 1963 by Justice Gajendragadkar. These sixteen appeals arose from petitions filed by the sixteen respondents who were employees of the appellant, Bombay Gas

The respondents were employees of Bombay Gas Co. Ltd. and filed their applications under section 33C (2) of the Industrial Disputes Act (No 14 of 1947). They held the positions of District Siphon Pumpers and Heat‑Appliances‑Repairers Inspectors. In the proceedings before the Second Labour Court, Bombay, the respondents asserted that an award rendered by the Industrial Tribunal in reference I.T. No. 54 of 1949, and published in the Bombay Government Gazette on 11 May 1950, granted them a specific benefit. On that basis they asked the Labour Court to compute the monetary value of the benefit and to direct the appellant, the employer, to make the payment to them.

The earlier award contained a direction expressed in these terms: “The demand in respect of the workers of the Mains, Services and District Fittings Departments and Lamp Repairers and others who were till 1948 required to work on Sundays and in respect of whom a weekly day off was enforced thereafter without any corresponding increase in wages is granted. In respect of the rest, the demand is rejected.” The appellant challenged the respondents’ applications on several preliminary grounds, which gave rise to a number of preliminary issues before the Labour Court.

The appellant’s principal preliminary objections were as follows. First, it contended that the respondents’ applications were not maintainable under section 33C (2) of the Act. Second, it argued that the applications were barred by the principle of res judicata because awards had already been made in other proceedings involving the same parties. Third, the appellant maintained that even if the claim relied upon the earlier award, that award had been issued by the Tribunal without jurisdiction and therefore could not be enforced. Fourth, the appellant asserted that the direction in the earlier award did not apply to the respondents. Finally, the appellant submitted that, assuming the direction was valid and conferred a right on the respondents, none of the respondents had satisfied the conditions precedent prescribed in that direction, and consequently their claim could not succeed on the merits.

The Labour Court examined ten of the preliminary issues in the first instance. In its judgment dated 3 June 1961, the Court rejected all of the appellant’s preliminary pleas, thereby finding each of the preliminary issues in favour of the respondents. Following that determination, the applications were scheduled for a full hearing on the merits. Both parties presented evidence supporting their respective positions. After evaluating the evidence, the Labour Court concluded that the respondents had satisfactorily proved their claims. Accordingly, the Court directed the appellant to pay to each respondent the specific amounts indicated beside their names in the award.

The award was granted by the Labour Court, which rejected the appellant’s contention that the entire claim advanced by the respondents should be barred on the grounds of delay and laches. The Court held that the appellant’s plea could not be sustained under section 33C (2). Consequently, the Labour Court calculated the monetary benefits claimed by the respondents from the date on which the earlier award became enforceable up to the date on which the present applications were filed. The appellant has approached this Court by way of special leave, challenging both the preliminary decision and the final order of the Labour Court that were decided in favour of the respondents. Before addressing the issues raised in the appellant’s appeals, the Court found it necessary to set out briefly the terms of the earlier award on which the respondents’ claims are founded. In the preceding industrial dispute, the employees of the appellant had made several demands, the present case focusing on demand number eleven. Demand number eleven comprised two parts: (a) a request that workers should receive a paid weekly off; and (b) a request that workers in the Mains, Services and District Fitting Departments and lamp repairers, who had suffered a loss of earnings because overtime and Sunday work were discontinued, should be compensated for the loss incurred since the scheme’s introduction. The Tribunal that considered this demand observed that part (a) was poorly worded, but it was clear that the employees were essentially seeking a paid weekly off for those workers who were already receiving a weekly off without pay. While examining this demand, the Tribunal noted that all monthly paid staff employed by the appellant already enjoyed a paid weekly off, and therefore saw no reason to differentiate between those staff and the daily‑rated workers. Regarding the daily‑rated workers, their monthly remuneration was ordinarily calculated on the basis of a month consisting of twenty‑six working days. The claim statement filed by the Union before the Tribunal indicated that, prior to 1946, most workers laboured all seven days of the week. By August 1946, weekly offs had been introduced for the majority of the workmen. In June 1946, the appellant and the Union had entered into an agreement concerning wage scales for various categories of workers, and the Tribunal inferred that, for most daily‑rated workers, wages must have been fixed on the premise that their monthly income would be derived from twenty‑six working days. It was against this background that the Tribunal proceeded to examine demand number eleven (a). The Tribunal further observed that, for the four categories of workers identified in demand number eleven (b), a distinction was necessary because it could not be said that their daily rates of wages were fixed with reference to a month of twenty‑six working days.

The Tribunal observed that it could not say that the daily rates of wages for the workers in question had been fixed with reference to a month comprising twenty‑six working days. Consequently, when a weekly holiday was introduced, the wages of those workers fell. The Tribunal noted that, in such circumstances, granting a weekly holiday could not be regarded as a genuine benefit if it resulted in a reduction of the workers’ monthly earnings. For this reason, the Tribunal issued the specific direction on which the respondents’ present claim is founded; this direction had already been quoted at the beginning of the judgment. After dealing with demand number eleven (a), the Tribunal turned to demand number eleven (b). In respect of demand eleven (b), it ordered that the employees of the Mains, Services and District Fittings Departments, as well as the lamp‑repair workers, who had suffered a loss of earnings because Sunday work was discontinued, should receive compensation. The compensation was to consist of the payment of their wages and dearness allowance for the weekly holiday that had been given to them from 1 June 1949 up to the date on which the award was published. This order was intended to make good the loss suffered by those workers as a result of the closure of Sunday work.

The scope and effect of the provisions of section 33C(2) of the Industrial Disputes Act, and the extent of the jurisdiction conferred on the Labour Court by that provision, had recently been examined by this Court in The Central Bank of India Ltd. v. P. S. Rajagopalan (1). That decision demonstrated that the applications filed by the respondents were competent and that the Labour Court possessed jurisdiction to determine the monetary computation of the benefit claimed by the respondents. Counsel for the appellant contended that, although the respondents’ applications might be competent and the claim could be examined under section 33C(2), the appellant was entitled to argue that the award on which the claim was based was rendered without jurisdiction. The appellant further submitted that, if this contention succeeded, the Labour Court would be justified in refusing to give effect to the award. In our view, this contention was well‑founded. The proceedings contemplated by section 33C(2) are, in many respects, analogous to execution proceedings. When the Labour Court is called upon to calculate in monetary terms the benefit claimed by an industrial employee, it occupies a position similar to that of an executing court under the Code of Civil Procedure. Accordingly, the Labour Court, like an executing court, is competent to interpret the award on which the claim is based and may also consider the plea that the award to be enforced is a nullity. There is no doubt that, if a decree that has been put into execution is shown to be a nullity, the executing court may refuse to execute it; the same principle applies to proceedings under section 33C(2) and to the jurisdiction of the Labour Court before which such proceedings are commenced.

The Court observed that a court of execution may refuse to carry out a decree that is shown to be a nullity, and that the same principle extended to proceedings commenced under section 33C (2) before a labour court. It noted that industrial tribunals created under section 10 (1) (d) of the Act possessed only limited jurisdiction: they were authorised to adjudicate the disputes expressly referred to them, but they could not go beyond the terms of reference to address matters not included, except for incidental issues that fell within their limited authority. Accordingly, the Court agreed with the submission that, on principle, the labour court would have been justified in refusing to give effect to an award if it were satisfied that the direction relied upon by the respondents was beyond the tribunal’s jurisdiction. The Court then turned to the substantive merit of the plea raised by counsel for the petitioner. Counsel argued that the direction supporting the respondents’ claim was invalid because the tribunal had exceeded its terms of reference by inserting the words “and others” into the direction. The argument asserted that the direction had been issued under demand 11 (b), which was confined to four specific categories of workmen, and that the tribunal therefore lacked authority to extend relief to any workers outside those four categories by adding “and others.” While acknowledging that this line of reasoning was attractive, the Court examined the structure of the award as it pertained to demand 11 and found that the impugned direction actually related to demand 11 (a), which was a blanket demand referring to all workers and was not limited to any particular categories. The Court recognized that the tribunal, in discussing demand 11, had specifically mentioned the four categories of employees listed in demand 11 (b) to illustrate the classes of workmen entitled to relief under demand 11 (a). However, this specific reference did not restrict the demand to those four categories. After naming those four categories, the tribunal deemed it appropriate, and the Court agreed, to add the words “and others” to ensure that any other workmen who, up to 1948, were required to work on Sundays and thereafter received a weekly day off without a corresponding wage increase, would also receive the same benefit as the four categories expressly discussed. The Court emphasized that by comprehensively describing the workers entitled to the benefit, the tribunal correctly extended the relief to all relevant workmen, and the addition of “and others” was therefore within its jurisdiction.

In this case, the Court observed that demand No. 11 (a) concerning the remaining workmen had been rejected. Consequently, the Court was satisfied that the relief granted by the Tribunal in paragraph 115 of its award related to demand No. 11 (a) and that the inclusion of the words “and others” fell within the terms of reference and was appropriate and justified. The Court therefore found it difficult to accept the submission that the impugned direction was issued without jurisdiction. The counsel for the respondents relied on the claim that the present respondents never considered themselves entitled to the benefit created by the impugned direction. To support that claim, the counsel pointed to a demand made in 1952 on behalf of the respondents for a similar benefit. The counsel argued that if the respondents had believed the benefit from the impugned direction was available to them, they would not have made the 1952 demand on the basis that the earlier award had not granted it. It appeared that the 1952 demand had indeed been made on behalf of the respondents and that the Government of Bombay held that the Tribunal had already considered the matter and that it was too late to reopen it for other categories of employees; consequently the Government declined to refer the matter. The Court held that this circumstance could not materially aid the counsel, because a fair and reasonable construction of the material direction in the award showed that the clause applied to all workers of the appellant who satisfied the prescribed test. The Court stated that a lack of understanding by the respondents of the true scope and effect of the clause could not alter its construction. Accordingly, the Court concluded that the respondents’ failure to invoke the clause soon after the earlier award could not influence the interpretation of the clause. The counsel further suggested that, on the merits, the respondents were not entitled to claim because they had not demonstrated that they were required to work on all Sundays in the relevant years. The counsel argued that the test set by the direction required the benefit to be available to workmen who, until 1948, were required to work on Sundays, and that this phrase must be read as “who were required to work on all Sundays in the year.” The Court noted that the Labour Court had examined this argument and had found that the respondents were required to work on Sundays before 1948, although they might not have attended every Sunday. The Labour Court supported its finding by referring to Exhibit 32 and inferred from that document that workers in the Syphon Department were required to work on all Sundays before September 1948, and it added that the fact that they

The Court observed that the fact that workers did not work on some Sundays could be explained by ordinary circumstances, for example the workers may have voluntarily stayed away, there may have been insufficient work for all of them, or some may have been sent home. The counsel for the appellant drew the Court’s attention to the chart labeled Ext. 32 and demonstrated that in certain instances the employees were not required to work even half of the Sundays in the relevant year. The Court held that this line of argument was based on a misinterpretation of the clause in the award that dealt with the benefit. The clause does not require that, before obtaining the benefit, a worker must show that he actually worked on every Sunday of the year. Rather, the test to be satisfied is whether the worker could have been required to work on Sundays during that year. In other words, the Tribunal had decided that any worker employed by the appellant who could be required by the appellant to work on Sundays in the relevant year would be entitled to the benefit. The essential question, therefore, is whether the terms and conditions of service imposed an obligation on the workers to attend duty on Sundays if they were called upon. This requirement is fundamentally different from a condition that the benefit would be available only if the workers had actually worked on all Sundays. Consequently, the Court found no merit in the argument that the respondents were not entitled to the benefit because they had not actually been required to work on every Sunday in the relevant year. The Court then turned to another issue raised by the appellant’s counsel, who vigorously argued that the Labour Court should not have permitted the respondents’ claim because it was filed almost eight years after the award was pronounced. The Court noted that the original award had been pronounced on 11 May 1950 and that the present applications were filed in 1958. To support the contention that the delay should be taken into account, the counsel referred to the Payment of Wages Act (No 4 of 1936), which provides that a claim for wages must be made within six months of the date on which the cause of action accrues to the employee. In the State of Maharashtra, a local modification extends this period to one year. The argument advanced was that the present claim made by the respondents under section 33C(2) constitutes a claim for wages within the meaning of the Payment of Wages Act. If the respondents had presented such a claim before the authority established under that Act, they could not have obtained relief for a period exceeding one year. The counsel described it as anomalous that, merely by changing the forum, the respondents should be allowed to claim relief for as many as eight years under section 33C(2).

In this connection, the counsel for the respondents also argued that, by virtue of section 22 of the Payment of Wages Act, an industrial employee could not bring a claim for wages before a civil court after one year had elapsed. The counsel pointed out that although a civil suit for such a claim might be allowed a period of three years under Article 102, section 22 nonetheless barred the suit after the one‑year limit. The counsel further maintained that the jurisdiction given to the payment authority under the Act was exclusive and that, according to that statute, every wage claim had to be filed within one year. Prima facie, the Court observed that the argument possessed some force. It indeed seemed anomalous that a claim which would be dismissed as time‑barred if presented under the Payment of Wages Act could be entertained under section 33C(2) of the Industrial Disputes Act. The Court then considered whether this apparent inconsistency warranted the introduction of limitation considerations into proceedings under section 33C(2). The counsel suggested that the Court could treat the delay on the part of the employees as a relevant factor even in cases brought under section 33C(2), and urged reliance on several earlier decisions in which the Court had discouraged belated bonus claims. While evaluating the merit of that suggestion, the Court declined to decide whether the jurisdiction conferred on the payment authority is exclusive in the sense that a wage claim could not be filed in a civil court within the three‑year period allowed by Article 102; the Court noted that such a question would have to be decided on its merits if it arose directly. For the present appeal, the Court identified the sole issue to be whether the limitation period prescribed for wage recovery under the Payment of Wages Act justified the introduction of limitation considerations in actions filed under section 33C(2) of the Industrial Disputes Act. In addressing that issue, the Court kept in mind that the legislature was aware of how the Payment of Wages Act dealt with wage recovery and had prescribed a limitation period for that purpose, yet it deliberately omitted any limitation provision when it enacted section 33C(2). The Court held that the omission could not be regarded as accidental. Consequently, it was reasonable to infer that the legislature intentionally chose not to impose any limitation under section 33C(2). The legislative intent may have been to recognize that employees entitled to the benefit of section 33C(2) might not always be aware of their rights, and that imposing a time bar on such claims would be unfair. Moreover, even if an analogy with execution proceedings were considered relevant, the Court concluded that the absence of a prescribed limitation in the statute meant that courts could not supply one on grounds of fairness or justice.

In this case the Court observed that a decree issued under the Code of Civil Procedure could be executed for a period of twelve years, but only if the decree was kept in force by periodically taking steps necessary for execution as mandated by article 182 of the Limitation Act. Consequently the one‑year or six‑month limitation period prescribed by the Payment of Wages Act could not be applied as a uniform rule to every type of execution claim. The Court further held that where Parliament had omitted to prescribe any limitation period, the courts could not supply such a limitation on the basis of fairness or justice. The language of section 33C(2) of the Industrial Disputes Act was described as clear and unambiguous, and the Labour Court was therefore bound to give effect to that provision without taking any limitation considerations into account. Counsel for the respondent, Mr. Kolah, pointed out that allowing a large number of delayed claims could cause substantial inconvenience to employers, but the Court noted that such a policy concern was for the legislature to consider; if Parliament decided that equity and justice required a limitation, it could legislate accordingly. In the absence of any statutory limitation, the Labour Court could not import the consideration of employer inconvenience when hearing applications under section 33C(2). Mr. Kolah then argued that article 181 of the First Schedule to the Limitation Act might apply, proposing that a three‑year limitation period should therefore govern the present applications. Article 181 provides a three‑year limitation for applications for which no other limitation period is specified in Schedule 1 or by section 48 of the Code of Civil Procedure, and the period commences when the right to apply accrues. The Court characterised this argument as a desperate attempt. It reiterated the settled principle that article 181 applies only to applications filed under the Code of Civil Procedure, and therefore its extension to applications under section 33C(2) of the Act could not be justified. The Court cited the 1880 decision of the Bombay High Court in Rai Manekbai v. Manekji Kavasji, which held that article 181 relates solely to Code of Civil Procedure applications where no prescribed limitation exists, a view later affirmed by the Privy Council in Hansraj Gupta v. Official Liquidator and by the Dehra Dun Mussoorie Electric Tramway Company Ltd. case. An attempt in Sha Vulchand & Co. Ltd. v. Jawahar Mills Ltd. to argue that amendments to articles 158 and 178 changed the meaning of article 181 was rejected, with the Court observing that the long series of decisions under article 181 had firmly established its scope.

The Court observed that the phrase “under the Code” had been inserted into the first column of Article 181, and therefore it could not accept the argument that the limitation period prescribed by Article 181 was applicable to applications filed under section 33C (2) of the Act. The Court acknowledged that, in matters such as claims for bonus, industrial tribunals have traditionally discouraged laches and delay; however, the Court emphasized that such bonus claims must be distinguished from claims brought under section 33C (2). A bonus claim, the Court explained, is advanced on the basis of social justice and does not arise from any specific statutory provision. Consequently, it is within the discretion of industrial adjudication to consider all relevant factors before granting a bonus claim, and if the claim is made after a prolonged period, the tribunal or the Government may refuse to entertain it or to make a reference on its behalf. The Court further noted that these considerations become irrelevant when the claim arises under section 33C (2), because, as in the present case, the claim is based on an arbitral award and is intended merely to enforce that award. In such circumstances, the Court held that limitation cannot be imposed by industrial adjudication on the theoretical ground of social justice; if limitation is to be introduced at all, it must be done by the legislature. Accordingly, the Court concluded that the Labour Court was correct in rejecting the appellant’s contention that the claim should be denied because it was filed belatedly. As a result, the appeals were dismissed with costs, and the orders of the Labour Court were affirmed.