Execution Proceedings U/S 33C(2) ID Act Do Not Provide For Awarding Interest By Labour Court: Allahabad HC
The Allahabad High Court stated that execution proceedings under Section 33C(2) of the Industrial Disputes Act does not provide for awarding interest by Labout Court.
The Court examined the provisions of Section 33C(2) of the Industrial Disputes Act, 1947 (I.D. Act) and clarified that the entire scheme of the Section was in the form of execution proceedings for recovering the money due from an employer to a workman which was under a settlement or an award.
A Single Bench of Justice Rohit Ranjan Agarwal observed, “In the instant case, though the provisional pension was granted immediately but the other retiral dues could not be paid as there stood outstanding amount against respondent no. 1, and on the submission of No Dues Certificate, the amount was released. The Labour Court was swayed away with the fact that there was a delay on the part of petitioner in releasing retiral dues which was payable to respondent no. 1 on his retirement.”
Advocate A.L. Yadav represented the petitioner, while Advocate Manu Mishra appeared for the respondents.
Executive Engineer Electricity Transmission Division (Company), the petitioner, contested the Labour Court's decision to award 18% interest to an employee on delayed payments of pension, Provident Fund, and leave encashment. According to the petitioner, the Labour Court not have power to grant interest in proceedings under Section 33C(2) of the I.D. Act.
The employee contended that the delay in payment was attributable to the Company’s negligence. It was argued that the entire amount should have been paid upon the employee’s retirement back in 1997, instead of being delayed for three years.
The High Court had to determine whether an interest could be awarded in proceedings under Section 33C(2) of the I.D. Act.
The Court pointed out that “in case of dispute of quantum of money, the same has to be settled by Labour Court, and once the decision is made by Labour Court, it forwards the same to appropriate Government to be recovered in the manner provided under sub-section (1) of Section 33C. Thus, the entire scheme of Section 33C is in the form of execution of the amount from the employer to be paid to the employee.”
The Bench explained that the entire mechanism as provided under Section 33C of the I.D. Act was in the form of execution, but the provision did not provide for awarding interest.
“Moreover from perusal of the records of the instant case, it is clear that the delay cannot be attributed solely to petitioner as there stood outstanding amount against respondent no. 1 which after being settled that pensionary benefits were released,” the Court noted.
Therefore, the Court held that the Labour Court was "misled" in awarding 18% interest for delayed payment, as it was beyond the competence of the Labour Court under Section 33C(2), which does not permit the granting of interest.
Accordingly, the High Court set aside the grant of interest and allowed the petition.
Cause Title: Executive Engineer Electricity Transmission Division v. Mahesh Chandra & Anr. (Neutral Citation: 2024:AHC:69169)
Appearance:
Petitioner: Advocate A.L. Yadav
Respondents: Advocate Manu Mishra
