Case Note & Summary
The dispute arose from an industrial award directing the appellant company to reinstate certain workmen and pay 50 per cent of their back wages for the period they were forcibly kept out of employment. The appellant company was the successor of a private concern owned by H. M. Khosla, and an industrial dispute was referred to the Allahabad Industrial Tribunal (Sugar), which passed an award on January 31, 1958. A large number of workmen filed claims for back wages under Section 6-H(1) of the U.P. Industrial Disputes Act, 1947, before the Labour Commissioner. The Labour Commissioner issued a recovery certificate on July 21, 1958, for Rs. 1,06,588-6-6, and after objections and verification, issued a second certificate on September 9, 1959, reducing the amount to Rs. 50,654-9-6, stating that the balance would be covered later. The Collector passed an order on September 10, 1959, for recovery from the company's security deposit. The company filed a writ petition under Article 226 of the Constitution before the Allahabad High Court, seeking to quash the orders dated September 9 and 10, 1959, and release of attached property. A single judge, Broome J., allowed the petition and quashed the Labour Commissioner's orders, holding that since the exact amount had to be determined, proceedings should have been under Section 6-H(2) and not Section 6-H(1). The State appealed under the Letters Patent, and a Division Bench reversed the single judge's decision, holding that 'benefits' under Section 6-H(2) meant advantages like free quarters or electricity, not earned wages, and that back wages were 'money due' requiring only arithmetical calculation. The company then appealed to the Supreme Court by special leave. The Supreme Court examined the analogous provisions of Section 33-C of the Industrial Disputes Act, 1947, and Section 20 of the Industrial Disputes (Appellate Tribunal) Act, 1950, which similarly distinguished between recovery of 'money due' and computation of 'benefits'. The Court noted that the contrast between 'money due' and 'benefit' lies in the fact that a benefit such as free quarters is not money due until its monetary value is computed, whereas back wages are directly money due, needing only arithmetical calculation of total wages for the period. The Court agreed with the Division Bench that the elaborate procedure under Section 6-H(2) was not meant for cases where only arithmetical calculation was required. Accordingly, the Supreme Court dismissed the appeal against the Division Bench judgment and did not consider the companion appeal on the question of Article 133 certification. The final decision upheld the recovery certificate under Section 6-H(1) for back wages.
Headnote
A) Industrial Disputes - Recovery of Back Wages - Distinction Between 'Money Due' and 'Benefit' - Uttar Pradesh Industrial Disputes Act, 1947, Section 6-H(1) and 6-H(2) - The appellant challenged a recovery certificate issued under Section 6-H(1) for back wages, contending that the amount was not 'money due' but a 'benefit' requiring computation under Section 6-H(2). The Supreme Court held that back wages, being calculable by arithmetical calculation, fall under 'money due' and not under the second sub-section; the Division Bench correctly confined 'benefits' to advantages like rent-free quarters. Held that the appeal failed. B) Industrial Disputes - Scope of Section 6-H(2) - Computation of Benefits Versus Arithmetical Calculation - Uttar Pradesh Industrial Disputes Act, 1947, Section 6-H(2) - The court distinguished 'benefits' such as free quarters or free electricity, which require computation in terms of money, from earned wages which only require arithmetical calculation of total money wages over a period. The elaborate procedure under Section 6-H(2) was not meant for cases where only arithmetical calculation was required. Held that the claim for back wages could proceed under Section 6-H(1).
Issue of Consideration
Whether back wages of workmen, where exact amount is not pre-calculated but is capable of arithmetical calculation, constitutes 'money due' recoverable under Section 6-H(1) of the U.P. Industrial Disputes Act, 1947, or a 'benefit capable of being computed in terms of money' requiring proceedings under Section 6-H(2).
Final Decision
The Supreme Court dismissed the appeal against the Division Bench judgment. It held that back wages were 'money due' under Section 6-H(1) of the U.P. Industrial Disputes Act, 1947, and not a 'benefit' requiring computation under Section 6-H(2). The recovery certificate issued by the Labour Commissioner was valid. Civil Appeal No. 1109 of 1963 concerning certification under Article 133 was not decided because the main appeal failed.
Law Points
- Back wages under an award are 'money due' under Section 6-H(1) of U.P. Industrial Disputes Act
- 1947
- A 'benefit' under Section 6-H(2) refers to non-wage advantages like rent-free quarters or free electricity
- Arithmetical calculation of wages is distinct from computation of benefits
- Recovery certificate under Section 6-H(1) can be issued for back wages without prior determination by Labour Court
- The elaborate procedure under Section 6-H(2) is not meant for cases requiring only arithmetical calculation
