S. 33C(2) ID Act| Right To Claim Interest Can Be Considered Pre-Existing Only If Explicitly Determined In Employment Contract: Karnataka HC

The Karnataka High Court has observed that under Section 33C(2) of the Industrial Disputes Act, the right to claim interest can be considered a pre-existing right/benefit only if it is explicitly determined in the contract of employment.

Relying on the case of The Management of NWKRTC Dharwad Division Vs. Shri Shankrayya, the  Bench of Justice Shivashankar Amarannavar observed that, "The right to claim interest can be said to be a preexisting right or benefit, provided the terms and conditions of contract of the employment between the employer and employee is determined in the contract of employment, or if it is determined in the Resolutions governing service conditions."

Counsel Veena Hegde appeared for the petitioner, while Counsel Ravi Hegde appeared for the respondent.

This case was a legal battle between the management of NWKRTC and Manjunath, the aggrieved ex-driver. He filed petition under Articles 226 and 227 of the Constitution of India, seeking to quash an order by the Labour Court.

At the heart of the dispute lay the dismissal of Manjunath from his position as a driver by the Corporation on 20.11.2006 due to proven misconduct. However, six years later, Manjunath filed an application under Section 33C(2) of the Industrial Disputes Act, 1947, seeking a direction for the payment of Rs. 6,11,103/- with interest from the date of dismissal till 31.08.2012, based on his last drawn salary.

The Labour Court, in its impugned order, had directed the Corporation to pay the aforementioned sum along with interest at the rate of 6% per annum. Aggrieved by this decision, the Corporation had approached the High Court seeking redress.

During the proceedings, the petitioners had argued that the application under Section 33C(2) of the ID Act was not maintainable. It was contended that such proceedings required prior adjudication or recognition of the workman’s claim by the employer, which was absent in this case. It was emphasized that the order of dismissal existed at the time of filing the application, rendering it invalid.

The respondents justified the Labour Court’s decision, highlighting the non-approval of the dismissal order by the appropriate authority as per Section 33(2)(b) of the ID Act. They argued that this rendered the order non-est, entitling the workman to seek wages from the date of dismissal.

The High Court observed that, "A perusal of Section 33C(2)of ID makes it evident that, there should be a relationship of employee and employer and in the absence of challenge to the order of dismissal dated 20.11.2006 before appropriate forum, the application filed under Section 33C(2) of ID Act would not be maintainable. The ingredients of Section 33C(2) of ID Act clearly envisages that, it is in the nature of execution proceeding and the same envisages a prior adjudication or recognition by an employer of the claim of the workman to be paid wages at the rate which they claim."

Subsequently, it was held that the application filed under Section 33C(2) of the ID Act was not maintainable before the Labour Court. Accordingly, the petition was allowed.

Cause Title: The Management of NWKRTC vs Manjunath

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