[Industrial Disputes Act] Labour Court Can't Award Interest In Proceedings For Recovery Of Money From Employer U/S 33C(2): Allahabad High Court

The Allahabad High Court has held that while proceeding under Section 33C(2) of the Industrial Disputes Act, 1947, Labour Court does not have the power to grant interest to the employee on delayed payment of amount due by the employer. The Court held that proceeding under Section 33C(2) are execution proceedings.

Section 33C (1) provides that where any money is due to an employee from his employer, the employee shall make an application to the appropriate Government for the recovery of the money due to him. If the government is satisfied that money is due, application must be forwarded to the collector for recovery of such amount. When amount so due is disputed, the case may be decided by the Labour Court as specified by the Government under Section 33C(2).

“The entire mechanism as provided under Section 33C is in the form of execution, either in sub-section (1) which is the recovery of the amount quantified in the award or settlement or under sub-section (2) where the workman is entitled to receive any money or benefit which is capable of being computed in terms of money from the employer. The provision does not provide for awarding interest,” held Justice Rohit Ranjan Agarwal.

Factual Background

In 1996, respondent-employee was appointed as Assistant Storekeeper by U.P. State Electricity Commission at Electricity Transmission Division, Aligarh. Upon retiring, his provisional pension was sanction by the Executive Engineer, Aligarh which was subject to adjustment from his final pension. On 24.06.1997, total dues against respondent employee came to be Rs.27,38,504/-. Further dues of Rs.7,110/- were added due to which No Dues Certificate was not issued to the respondent-employee.

In 2000, he filed an application under Section 33C(2) of the ID Act before the Labour Court. The Labour Court directed for payment of 18% interest in delay payment of pension, Provident Fund and leave encashment and directed payment of Rs.1,500/- as expenses of the case.

Counsel for petitioner argued that Labour Court did not have the power to levy interest on delayed payment of pension. It was argued that the delay in payment was due to No Dues Certificate not being obtained. Once the No Dues was received, amount was paid to the employee.

High Court Verdict

The Court relied on Central Inland Water Transport Corporation Ltd. vs. The Workmen and another, where the Supreme Court held that proceedings under Section 33C(2) are execution proceedings and the Labour Corut cannot adjudicate the right of reemployment alleged by an employee.

“Therefore, when a claim is made before the Labour Court under Section 33-C(2) that court must clearly understand the limitations under which it is to function. It cannot arrogate to itself the functions—say of an Industrial Tribunal which alone is entitled to make adjudications in the nature of determinations (i) and (ii) referred to above, or proceed to compute the benefit by dubbing the former as 'Incidental' to its main business of computation,” held the Apex Court.

Justice Agarwal observed that though provisional pension was granted, and the remaining amount was subsequently released, the Labour Court got swayed because of the delay in releasing the balance amount.

Disagreeing with the decision of the Kerala High Court in M.M. Joseph vs. Labour Court where interest had been granted on equity, the Court held that proceedings under Section 33C(2) are execution proceedings where providing interest is beyond the scope of Section 33C(2).

Accordingly, the order of the Labour Court was set aside to the extent of the grant of interest.

Case Title: Executive Engineer Electricity Transmission Division vs. Mahesh Chandra And Another 2024 LiveLaw (AB) 257 [WRIT - C No. - 61111 of 2012]

Case citation: 2024 LiveLaw (AB) 257

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