M/S TRENDS vs SMT. LEELAMMA THOMAS AND ANR.

* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on : 30th November, 2023
Pronounced on: 11th December, 2023
+ W.P.(C) 10537/2019
M/S TRENDS ….. Petitioner
Through: Mr. Sandeep Prabhakar with
Mr. Vikas Mehta, Advocates.
versus

SMT. LEELAMMA THOMAS AND ANR. ….. Respondents
Through: Mr.Saurabh Bhargavan,
Mr. Christopher and Ms. Iban Sara Syiemlieh, Advocates for R-1.

CORAM:
HON’BLE MR. JUSTICE ANISH DAYAL

O R D E R
ANISH DAYAL, J.
CM APPL. 22958/2023
1. This application has been filed by respondent/worker under section 17B of the Industrial Disputes Act, 1947 (“the Act”) for payment of wages during the pendency of the present proceedings. The brief facts are that she was employed with the petitioner/organization on 13th November, 2007 as a receptionist and was terminated on 7th March, 2014. Reference was made on 21st July, 2015 by the competent authority to the Ld. Labour Court. The Ld. Labour Court reverted with a decision on 27th April, 2019 directing reinstatement of the respondent/worker with full back-wages along with continuity of services and all other consequential benefits. This writ petition challenging the same was filed by the petitioner/management on 25th September, 2019 on which date this Court directed a stay on operation of the impugned award subject to the petitioner depositing a sum of Rs. 3 lakhs. The Court had also noted that the petitioner was ready to explore the possibility of an amicable settlement; however, mediation report dated 29th April, 2023 was filed by the Delhi High Court Mediation and Conciliation Centre stating that despite deliberations, mediation was unsuccessful.
2. As per the application, respondent/worker was unemployed since the time of her termination on 7th March, 2014. Further, she states that she has to look after her family and had been borrowing money from relatives and friends since her removal from the service; as she is also living on rent and has no source of income from any means.
3. In response, a reply was filed by the petitioner/management. Learned counsel for the petitioner adverting to this reply, submitted as under:
a. There was a gross delay in filing the section 17B application, in that while the petition was filed in 2019, the application was filed in September, 2022. Such a gross delay would substantiate the contention of the petitioner/management that there was no financial hardship and the assertion by the respondent/worker is false, bogus and suspicious.
b. The respondent/worker had actually resigned from the petitioner/organization and thereafter has been gainfully employed elsewhere. It was also stated that the petitioner/organization is a small entity with 5 employees, which in fact closed down on 30th May, 2014. To substantiate the assertion of resignation, the petitioner’s counsel relied upon a letter dated 7th March, 2014, Annexure P-8 to the petition, which is a resignation letter of the respondent/worker as also a full and final settlement of all her dues.
c. To support the contention that the petitioner entity had been closed, reliance was placed on letter dated 30th May, 2014 addressed by the proprietor of the petitioner to the Senior Manager, Canara Bank, Lajpat Nagar Branch, New Delhi stating that she has closed the business and would like to close the bank account No. 0341201014906 in the name of the petitioner entity. He therefore, contended that since the entity was closed even before the award could be passed, respondent/worker would not be entitled to relief under section 17B. At best, even if she was disengaged from service in March, 2014 and the business had been closed in May, 2014, she could only have been employed for 2 more months since then. The petitioner’s counsel relies upon the decision of Gujarat High Court in Iron Rolling Mills Pvt. Ltd. v. Vinodkumar R. Singh, 2008 SCC OnLine GUJ 65, in relation to a section 17B application where the issue discussed in para 7.2 was the closure of a unit which was declared as a sick industrial company wherein there is reference to an earlier decision in LPA 933/1999, namely, Akbarkhan M. Pathan v. General Manager. What was noted in the said order was that the closure was a subsequent event after the passing of the award. Therefore, the right of the worker had accrued when the award was passed and a subsequent development in form of closure of a business is not contemplated under section 17B of the Act. The petitioner’s counsel however contends that on the basis that there is evidence in terms of a letter addressed to a bank that the business was closed (in May, 2014) prior to award being passed (in May, 2019), the question of relief being granted under section 17B does not arise.
d. Learned counsel for the petitioner further drew attention to a purported experience certificate dated 21st July, 2011 filed by the respondent/worker with her evidence. The said certificate was allegedly signed by the proprietor of the petitioner/company, though for a sister entity called ‘SOUL’. The said signatures, on the face of it were totally different from the actual signatures of Ms. Rooby Dhawer, the proprietor of the petitioner. These were requested to be verified and communications were sent to Kotak Mahindra Bank and Yes Bank where accounts of petitioner were maintained. Both the banks reverted back with communication dated 21st September, 2019 and 20th September, 2019 respectively, that there was a mismatch between the actual signatures of Ms. Dhawer with the bank and the one that was appended to the experience certificate. The petitioner’s counsel placed very strong reliance on this issue stating that this would amount to fraud and therefore, would not entitle the respondent/worker to any relief. On this he has relied upon the decision in Devendra Kumar v. State of Uttaranchal and Others, (2013) 9 SCC 363, where it is stated as under:
“13. It is a settled proposition of law that where an applicant gets an office by misrepresenting the facts or by playing fraud upon the competent authority, such an order cannot be sustained in the eye of the law. “Fraud avoids all judicial acts, ecclesiastical or temporal.”(Vide S.P.Chengalvaraya Naidu v. Jagannath [(1994) 1 SCC 1 : AIR 1994 SC 853] .) In Lazarus Estates Ltd. v. Beasley [(1956) 1 QB 702 : (1956) 2 WLR 502 : (1956) 1 All ER 341 (CA)] the Court observed without equivocation that : (QB p. 712)
“… No judgment of a court, no order of a Minister can be allowed to stand if it has been obtained by fraud, for fraud unravels everything.””

e. Petitioner’s counsel further contended that the plea of financial hardship by the respondent/worker was not honest and correct considering that she belonged to an affluent family and was owner of a residential dwelling unit (DDA flat at Mathura Road, New Delhi) which was converted from lease hold to free hold in the month of January, 2017. A copy of the agreement to sell of February, 1994 along with a copy of conveyance deed executed by the DDA for conversion from lease hold to free hold of the said property, was annexed with the reply to this application under section 17 B by the petitioner. It was further stated in their reply that the spouse of the respondent/worker was settled in a Middle Eastern Country and their children were in Canada for studies and were settled there. Therefore, the claims that she was staying on rent and facing financial hardships were completely belied by these documents of ownership of the flat.

4. In response to the above submissions, the learned counsel for the respondent/worker stated that the petitioner/management had not taken the stand before the Ld. Labour Court that the entity had closed and is now taking this plea afresh before this Court. Moreover, except for the letter of closure of bank accounts, nothing else has been filed. On this basis their plea that the entity was closed cannot be accepted. Secondly, on the account of delay it was submitted that there was no limitation prescribed in Section 17 of the Act which would disentitle the worker from approaching the Court for relief. Thirdly, respondent/worker had already stated on affidavit that she was not employed elsewhere and that was the only condition that was required to be satisfied for seeking relief under section 17B.
5. The respondent/worker’s counsel did not deny issue of sale deed and the ownership of the property as contended by the petitioner. Further, he did not place on record a rejoinder, to controvert the submissions made by the petitioner in their reply to the application, as directed by this Court vide Order dated 10th October 2023.
6. This Court has given serious consideration to the submission by the parties and the documents placed before it. For the ease of reference, it would be useful to extract section 17B of the Industrial Disputes Act, 1947:
“17B. Payment of full wages to workman pending proceedings in higher courts.—Where in any case, a Labour Court, Tribunal or National Tribunal by its award directs reinstatement of any workman and the employer prefers any proceedings against such award in a High Court or the Supreme Court, the employer shall be liable to pay such workman, during the period of pendency of such proceedings in the High Court or the Supreme Court, full wages last drawn by him, inclusive of any maintenance allowance admissible to him under any rule if the workman had not been employed in any establishment during such period and an affidavit by such workman had been filed to that effect in such Court:
Provided that where it is proved to the satisfaction of the High Court or the Supreme Court that such workman had been employed and had been receiving adequate remuneration during any such period or part thereof, the Court shall order that no wages shall be payable under this section for such period or part, as the case may be.”
7. It is evident from bare reading of the said section that this provision is to provide relief to a worker resulting in delay of implementation of an award in their favour due to a pending challenge before a Court. In this regard it would be useful to refer to observations of the Ld. Division Bench of this Court in MCD v. Santosh Kumari, 2012 SCC OnLine Del 4390, where it is stated as under:
“20. …. However, while considering an application under Section 17B of the ID Act, it is necessary to bear in mind that the spirit, intendment and object underlying the statutory provision of Section 17B is to mitigate and relieve, to a certain extent, the hardship resulting to a workman due to delay in the implementation of an award directing reinstatement of his services on account of the challenge made to it by the employer. The preliminary consideration for making available such a relief to a workman is to be found in the benevolent purpose of the enactment. It recognizes a workman’s right to a bare minimum to keep body and soul together when a challenge has been made to an Award directing his reinstatement. The statutory provisions provide no inherent right of assailing an order or an award by an industrial adjudicator by way of an appeal. The payment which is required to be made by the employer to the workman has been held to be akin to a subsistence allowance which is neither refundable nor recoverable from a workman even if the Award in favour of the workman is set aside by the High Court. “

8. The said decision basically deliberated on the issue of the date from which relief under section 17B of the Act ought to be granted, i.e. from the date of the award or from the date of filing of the application by the worker. Certain principles relevant to that determination have been culled out in the said judgment.
9. What stands out from the submissions of the parties, in the opinion of this Court, firstly, is that the respondent/worker has not approached the Court with clean hands. The assertion in her application that she was facing financial hardship and was staying on rent, is completely belied by a public document filed by the petitioner evidencing the worker’s ownership of a DDA flat which was also converted into freehold, which was not rebutted by the learned counsel for the respondent/worker.
10. Secondly, a perusal of the experience certificate would ex facie bear out that the signatures on the same, purported to be of Ms. Dhawer, were not really hers (from a simple ocular examination of the signatures). The communication from two banks clearly stating that there was a mismatch of the signatures and therefore could not be verified, was also indicative of the fact that signatures on the said experience certificate were signed by someone else and utilized as such by the respondent/worker. Even though this issue of the experience certificate forms part of the pleadings in the writ petition to which there is a response by the respondent/worker in her reply, the same does not prima facie assist her contention for seeking relief under section 17B.
11. Thirdly, there is a delay of 3 years from the time when the writ petition was instituted in 2019, in filing section 17B application. Even though a delay as such is not fatal in allowing section 17B application, it does reflect that there was no immediate financial hardship which was being faced by the worker.
12. This Court is conscious of various legal pronouncements relating to inflexible nature of section 17B application and that the normal course is to direct grant relief under this provision. It is also conscious of the fact that writ petition is pending adjudication before this Court and arguments on merits should not be considered in determination under section 17B of the Act. However, having heard the parties and their submissions as noted above, this Court is not convinced that there is a serious financial hardship to the respondent/worker for which the petitioner ought to be continuing her wages. There is also no option of reinstatement, since the petitioner has already closed down the unit. The fact that a communication was addressed to the bank by the petitioner entity stating that they had closed down in May, 2014 has also informed the opinion of this Court. Relief under section 17B of the Act is in principle premised upon the entity which was functioning at the time award was passed. In a situation as contemplated in Iron Rolling Mills (supra) where an entity had closed 4 years after passing of the award of reinstatement, it was held that the relief under section 17B would be granted.
13. The proviso to section 17B of the Act gives allowance for satisfaction of the court to not award relief under section 17B in case it is found that the worker had been employed or receiving adequate remuneration. This obviously is premised upon a basic principle that there was no serious financial hardship faced by the respondent/worker.
14. In the opinion of this Court, therefore, this proviso cannot be confined in a straitjacket involving only a narrow assessment of ‘employment’, but must also account for facts presented by the management, of circumstances that belie a plea of serious financial hardship by the worker. In this case, the assertion itself that she was staying on rent is completely falsified by the document of house ownership i.e. conveyance deed. The existence of this deed was not refuted by the learned counsel for the respondent/worker.
15. In these facts and circumstances, this Court is of the opinion that the respondent/worker has disentitled herself to any statutory relief under section 17B of the Act, at this stage. This application is therefore dismissed and disposed of accordingly.
16. Copy of the order be uploaded on the website of this Court.

(ANISH DAYAL)
JUDGE
DECEMBER 11, 2023/sm

W.P.(C) 10537/2019 10/10