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M/s Bombay Chemical Industries vs. Deputy Labour Commissioner & Anr.

Civil Appeal · 2022 INSC 152Decided 4 Feb 2022
Civil Appeal No. 813 of 2022
M.R. Shah · B.V. Nagarathna

Background

A person (respondent no. 2) filed an application before the Labour Court under Section 33(C)(2) of the Industrial Disputes Act, claiming a difference in wages for a six-year period on the basis that he had worked as a salesman for the appellant company. The company denied any employer-employee relationship, insisting the respondent had never been engaged by it and that the documents he relied on were forged. Despite this dispute, the Labour Court examined the evidence, concluded the respondent had indeed worked as a salesman, and ordered payment of the wage difference: an order the Allahabad High Court upheld.

Decision Breakdown

The Supreme Court held that Section 33(C)(2) proceedings are akin to execution proceedings: the Labour Court under this provision can only compute and enforce a pre-existing, already-established right or benefit; it has no jurisdiction to first adjudicate a disputed question such as whether an employer-employee relationship exists in the first place. Relying on its earlier rulings in Municipal Corporation of Delhi v. Ganesh Razak and Union of India v. Kankuben, the Court held that since the very existence of the employment relationship was seriously and specifically disputed (with allegations that the supporting documents were forged), the Labour Court should have declined to proceed under Section 33(C)(2) and instead relegated the workman to seek an appropriate reference/adjudication under Section 10 of the Act to first establish his right. The Court set aside both the Labour Court's and High Court's orders, allowing the workman to pursue proper adjudication of his claim through other available remedies, without expressing any opinion on the merits of whether the employment relationship actually existed.

Lesson Learnt

A summary wage-recovery proceeding under Section 33(C)(2) of the Industrial Disputes Act cannot be used to first establish disputed facts like the existence of an employment relationship: such disputes must go through a proper adjudicatory reference first; only once a right is already established can the Labour Court compute and enforce the amount due.

Official source (sci.gov.in)View Judgment (PDF)

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