TMI Blog1991 (1) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... Serial No. 49) named Parmar Hareshbhai C. has expired during the pendency of the petition. After the dispute was referred to the Industrial Tribunal and decided by it, Saijpur Bogha Nagar Palika merged with the respondent Ahmedabad Municipal Corporation. By this petition it is prayed that the aforesaid employees who were working in Saijpur Bogha Nagar Palika in respective time scale of pay be declared as permanent employees of the respondent Municipal Corporation and the respondent Municipal Corporation has no right to reduce the wages or convert their status to that of daily rated casual employees and that wages cannot be changed from time-scale of pay to minimum wages. 3. Special Civil Application No. 991 of 1989 is filed by the same individual employees whose names appear in Annexure 'B' to Special Civil Application No. 1362 of 1986. It relates to an award passed by Arbitrator conferring certain benefits on employees of Ahmedabad Municipal Corporation. The petitioner pray for a declaration that the Award Part III passed by the Arbitrator on July 31, 1987 is applicable to them and for direction to the respondent Corporation for payment of the amount of wages with 18% i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipality agreed to confirm all the clerks and peons working in the Octroi department with effect from November 1, 1985 and also agreed to place the clerks in the time scale of pay of ₹ 260-400 and the peons in the time scale of pay of ₹ 196-232. (2) The Municipality also agreed to pay arrears arising out of the said time scale of pay within a period of one month and also agreed that regular wages, in the aforesaid time-scale of pay as per Desai Pay Commission be paid to the employees from December 1985 in January 1986 onwards. (3) The Union representing the workmen agreed to withdraw other demands raised in the reference. (4) It was a package deal and the Union representing the workmen agreed not to raise any demand or dispute in respect of any issue raised in the reference for a period of three years from the date of the award. The Union also agreed to withdraw the Letters Patent Appeal No. 421 of 1984 pending in this High Court. (5) The settlement also provided that the seniority of the staff members was to be reckoned from the date of their appointment. However they were not to claim any other monetary benefits . The aforesaid award became enforceable o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petition (Special Civil Application No. 1362 of 1986) praying that the Corporation had no right to change the status of the employees who had become permanent by virtue of the award to daily rated casual employees. The petitioner also claimed that the employees covered by the award were entitled to claim time-scale of pay and all other benefits. In short it is claimed by the petitioners that the Corporation being successor of the specified local authority it was bound by the award passed on December 21, 1985. 10. It is not disputed by the respondent -Corporation that it is the successor of the specified local authority. However, it is contended that the Corporation would be liable to abide by the terms and conditions of the services of the employees as they existed on November 5, 1985. According to the Corporation whatever happened between November 5, 1985 and February 22, 1986 (i.e. the date of draft notification and the date of final notification) was not binding to the Corporation. Even if the award were passed by the Tribunal during this period, it would be nullity and, therefore, not binding to the Corporation. It is also contended that the Corporation was not a party to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith effect on and from the 23rd February, 1986: (a) Transfers, in whole, of all assets, rights and liabilities of the specified local authorities (including the rights and liabilities under any contract made by any of the specified local authorities) to the Municipal Corporation of the City of Ahmedabad (hereinafter referred to as the said Corporation ); (b) Substitutes the Corporation for the relevant specified local authority or, as the case may be, adds the Corporation as a party to any legal proceeding to which a specified local authority is a party; and transfers all proceedings pending before any specified local authority or any authority or officer subordinate to any such specified local authority to the Corporation. (c) Transfers all such employees of the specified local authorities, who were in the employment of the specified local authorities on the 5th November, 1985 and immediately before the 23rd February, 1986 continued to be so employed to the Corporation cm the same terms and conditions which governed them on the 5th November, 1985. .... Here it may be noted that Section 452-A was inserted in the Corporations Act by Gujarat Act 16 of 1970 and remained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1986 it cannot be said that the Tribunal was lacking in jurisdiction. 15. The provisions of Section 452-A of the Corporations Act and the provisions made in the Notification dated February 22, 1986 are required to be read harmoniously with the provisions of the I.D. Act. Section 452-A of the Corporations Act empowered the State Government to make provisions inter alia for the transfer of employees of specified local authority to the absorbing local authority, i.e., the Corporation. By these provisions the legislature never intended to confer power upon the State Government to repeal the provisions of a Central Act or for that matter the provisions of any other Act validly enacted by the appropriate legislature. The power conferred by Section 452-A of the Corporations Act has got to be read so as to be consistent with the provisions of other statutes. The phrase 'notwithstanding anything contained in this Act or any other law for the time being in force' cannot be interpreted to mean that the State Government intended to confer power upon the executive so as to take away the jurisdiction of the validly constituted Tribunals or Courts under the appropriate provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by which the terms and conditions of the services of the employees of the erstwhile Municipality (Saijpur Bogha Nagar Palika) have been changed is without jurisdiction. For the reasons stated hereinabove it is not possible to agree with the contention raised by the learned counsel for the respondent. Hence if fails. Can the award be challenged by way of collateral attack ? 19. It is evident that the Industrial Tribunal constituted under the provisions of the I.D. Act performs judicial functions. The validly constituted Tribunal has rendered the award. It has become final under the provisions of the I.D. Act. It is very much doubtful that such an award can be challenged by way of collateral attacks. In this connection reference may be made to the following observations by de Smith in Judicial Review of Administrative Action (Fourth Edition) at page 77. A judicial decision made within jurisdiction is binding and conclusive insofar as it cannot be impeached in collateral proceedings, and it cannot, in general, be rescinded by the Tribunal itself. Again at page 107 of the same book it is inter alia observed: A judicial determination may be valid and binding even thou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, 1985. Therefore, on November 5, 1985 these employees were to be treated in the time-scale of pay as regular employees. There is nothing in Section 452-A or the Notification dated February 22, 1986 which can forestall or prevent the operation of the award passed by validly constituted Industrial Tribunal. 23. In view of the aforesaid position of law, the plea taken by the Corporation that the award is not binding to it cannot be entertained in these proceedings. If the Corporation felt that the award was not binding to it, it ought to have challenged the legality and validity, of the same by taking appropriate proceedings either by filing writ petition under the provisions of Article 226/227 of the Constitution of India or by approaching the Supreme Court under Article 136 of the Constitution of India. Was the respondent-Corporation required to be joined in the reference ? 24. It was argued that the Corporation ought to have been joined as a party in the reference before the Tribunal. The reference was made by the appropriate Government in respect of the disputes of the workmen engaged by the specified local authority i.e., Saijpur Bogha Nagar Palika. When the reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erms have been admitted and accepted by the signatories thereto. Thereafter the award in terms of the consent terms is passed by the Tribunal. Such award cannot be treated on par with agreement between two parties. As indicated hereinabove, the award becomes enforceable as provided under Section 17-A of the I.D. Act. Such an award cannot be challenged by way of collateral attack even on the ground of fraud or collusion. 27. In fairness to the learned counsel for the respondent- Corporation it needs to be stated that during the course of argument he has referred to the award and not the agreement. It was argued that the award was obtained by collusion. Therefore although it is not open to the respondent-Corporation to challenge the award on ground of fraud or collusion, by way of collateral attack, the argument may be examined. 28. In properly initiated proceedings, the superior Courts have inherent jurisdiction to set aside orders and convictions made by inferior Tribunals if such orders or convictions have been procured by fraud or collusion. Where fraud is alleged the Court will decline to quash unless it is satisfied that the fraud was clear and manifest and was instrumen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1983. Industrial dispute was raised by making demand some time in the year 1984. The settlement was produced before the Tribunal on December 10, 1985. The Tribunal considered the same on December 21, 1985 and passed order directing that the award be passed in terms of the settlement. 31. In this connection some other dates and events be noted. The Director of Municipalities by letter dated January 1, 1985 and January 25, 1985 has instructed the specified local authority that since the question of extension of the city limits of the Corporation was under consideration the Municipality should not unnecessarily make addition in its permanent or temporary establishment and should not unnecessarily add* financial burden. The officer of the Municipality may be presumed to be conscious about such directions. The appropriate State Government made reference to the Industrial Tribunal in respect of the demands raised by the employees in February 1985. Thus even after the Director of Municipalities had issued the aforesaid direction to the Municipality, the reference was made by the State Government itself. The office bearers of the Municipality initially adopted a stern stance. They sacke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is collusion such should be instrumental and should have induced the Court to pass the award or decree as the case may be. 35. In the instant case the roots of the reference are to be found in the demand raised in the year 1984. It is not even the case of the respondent-Corporation that the demand raised was unreal. Again it may be noted that the reference was made by the appropriate Government in February 1985 after being satisfied that there was a genuine dispute between the parties. The terms of settlement do not disclose the undue benefits have been conferred upon the workmen. On the contrary, it discloses a package deal by which the workmen were also required to give up certain demands. 36. All that has happened is that the workmen who were in the employment of the specified authority as daily wagers since December 1982 and January 1983 (only a few of them were in employment since February, March and May, 1983) have been conferred benefits of permanency. Thus, it appears that a long standing dispute has been resolved amicably. While resolving such disputes little give and take on either side is necessary. Again the Industrial Tribunal has considered the terms of set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent has not disputed the position that the respondent-Municipal Corporation would be the successor of the specified local authority. His contention was cased on the provisions of Section 452-A of the Corporations Act and the notification dated February 22, 1986. On this basis it was contended that the respondent-Corporation was bound to absorb the employees of specified local authority as per the terms and conditions as on November 5, 1985. This contention has already been dealt with hereinabove. Hence it is not necessary to refer to any of the decisions cited by the learned Counsel for the petitioners. Case law cited by learned Counsel for the respondent: 39. Learned Counsel for the respondent has relied upon the decision of the Supreme Court in the case of Union of India v. G.M. Kokil and Ors. reported in 1984-II LLJ 20. It was a case pertaining to the non obstante clause in Section 70 of the Bombay Shops and Establishments Act, the Supreme Court has explained as to what non obstante clause means. However, in our opinion the decision is not at all relevant; for the purpose of interpreting the provisions of Section 452-A of the Corporations Act, and the notification dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e award. The petitioners have also prayed for interest at the rate of 18 per cent per annum on the unpaid amount. It is further prayed that the amount of arrears of bonus as well as leave travel concession and dress allowance as per the award may be ordered to be paid to them. 42. The petition is filed on January 25, 1989 and admitted on February 7, 1989. Still, however, no affidavit-in-reply is filed. Learned counsel for the respondent-Corporation has fairly conceded that if Special Civil Application No. 1362 of 1986 is allowed and if the petitioners succeed in that petition, this petition also should be decided in their favour. Thus it is conceded that the success or failure of the petitioners depended upon the result of Special Civil Application No. 1362 of 1986. We have already held that the award passed by the Tribunal in Reference (IT) No. 152 of 1985 is binding upon the respondent-Municipal Corporation. In this background the petition be examined. 43. As shown in Annexure 'A' to the petition, 53 petitioners are working as junior clerks while 35 petitioners are working as peons. Peons are paid wages in the pay scale of ₹ 196-232 and clerks are being paid w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved from the liability to pay interest on the delayed payment of wages. Once the amount of wages falls due, it must be paid. If not paid, the employer will be saddled with the liability to pay interest on the amount of wages. If the amount advanced by the Bank is not paid, the employer does not get himself relieved of the liability to pay interest because he was overcome by unforeseen events and because he had become bankrupt due to circumstances beyond his control. The same logic and same principles as regard payment of interest would be applicable even with regards to the amount of wages payable to the employees/ workmen. 45. In the case of Satinder Singh v. Umrao Singh reported in AIR 1961 SC 908, the Supreme Court has upheld the claim of interest on equitable grounds on the delayed payment of amount of compensation in lieu of some property acquired. In the case of State of Rajasthan v. Raghubir Singh reported in AIR 1979 SC 852 the claim of interest made by a building contractor has been upheld by the Supreme Court on equitable grounds. In the case of Krishna Prasad Sinha v. State of Bihar reported in 1983 (2) LLJ 263 the Supreme Court directed the State Government to make p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wages till the actual payment is made. It may again be noted that even if there is an express term of contract specifying that the amount of interest would not be paid on the delayed payment of wages such term of contract would be unlawful. It would be on the face of it unjust and unfair and, therefore, unlawful. 49. In facts of the case, we would not like to grant interest at the rate of 18% as claimed by the petitioners. Having regard to overall circumstances of the case and having regard to the market conditions, amount of interest at the rate of 15% on the delayed payment of wages and other monetary benefits would be just and proper. Result in Special C.A. No. 1362 of 1986: 50. In the result Special Civil Application No. 1362 of 1986 is allowed. The respondent-Municipal Corporation is directed to abide by the directions given in the award passed in Reference (IT) No. 152 of 1985. As per this award the employees listed at Schedule B to the petition and whose names are mentioned at Serial No. 1 to 89 (except Serial No. 4-Parmar Hareshbhai C-who has unfortunately expired during the pendency of the proceedings) have become permanent employees and they are entitled to clai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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