Holding

The settlement applies only to employees who were on the rolls as of 30‑June‑1995; erstwhile workmen who had taken voluntary retirement are not entitled to its benefits, and Section 33‑C(2) does not apply.

Summary

The appellants, who had taken a Voluntary Retirement Scheme (VRS) on 26 May 1995 and received the stipulated payments, later claimed that a settlement dated 13 October 1995 between the employer and the workmen’s union, which altered wages and retirement age, also applied to them. The settlement expressly covered "permanent workmen on the rolls as on 30‑June‑1995". The appellants filed an application under Section 33‑C(2) of the Industrial Disputes Act, 1947 seeking the benefits, and the Industrial Tribunal allowed the claim. The employer challenged this, and the High Court held that Section 33‑C(2) was inapplicable because the benefits were not a pre‑existing right for erstwhile workmen. The Supreme Court affirmed the High Court, observing that a plain reading of the settlement limited its coverage to employees who were on the rolls on the specified date, and that a VRS terminates the employment relationship, precluding any later claim under Section 33‑C(2). Consequently, the appeal was dismissed.

Issues considered

Whether the settlement dated 13‑Oct‑1995, which referred to "permanent workmen on the rolls as on 30‑June‑1995", extends to workmen who had opted for Voluntary Retirement before that date.
Whether Section 33‑C(2) of the Industrial Disputes Act, 1947 can be invoked by erstwhile workmen to enforce benefits flowing from such a settlement.

Legislation cited

Industrial Disputes Act, 1947s. 10, s. 12(3), s. 2(s), s. 33-C(2)

Subjects

Voluntary Retirement SchemeSettlementIndustrial Disputes ActSection 33-C(2)Pre‑existing benefitLabour CourtWage increaseRetirement age

Judgment

VIJA Y KUMAR AND ORS. A
v.
WHIRLPOOL OF INDIA LTD. AND ORS.

NOVEMBER 22, 2007
B
[DR. ARIJITPASAYAT AND P. SATHASIVAM,JJ.]

Industrial Disputes Act, I 947:
-.
s. 33-C(2)-Application by erstwhile workmen claiming benefits c
under a settlement arrived at between employer and its workmen after
they had opted for voluntary retirement and had been paid amounts
under the VR. Scheme-HELD: Settlement covered only cases of
existing employees and not of erstwhile workmen-Voluntary
Retirement Scheme.
' D
~' The appellants-workmen opted for voluntary retirement under the
Scheme floated by the respondent-employer on 26.5.1995 and were paid
the amounts accordingly. Subsequently, on 13.10.1995, a settlement was
arrived at between the respondent-Management and its workmen with
E
regard to the wages and retirement age of the workmen. The appellants
along with others made an application under s.33-C(2) of the Industrial
Disputes Act, 1947 claiming the benefits granted under the settlement.
The Industrial Tribunal-cum-Labour Court allowed the application. In
the writ petition flied by the employer the High Court held that the view
~
F
of the Tribunal was unsustainable.

In the instant appeal it was contended for the appellants that the
Settlement covered the permanent workmen on the rolls on 30.6.1995,
and as they continued to be on rolls beyond 30.6.1995, they were entitled
to the benefits. For the respondent it was contended that at the time G
'-J the settlement was arrived at, the appellants were not existing workmen
and the benefits under the settlement were relatable to future
production targets.

425 H
+
426 SUPREME COURT REPORTS [2007] 12 S.C.R.

A Dismissing the appeal, the Court

HELD: A bare reading of the settlement clearly shows that it
covered only cases of exi~ting employees. The question of any erstwhile
workman attaining specified production target does not arise.
[Para 8) [429-B]
B
A.K. Bindal v. Union of India, [2003) 5 SCC 163; CEAT Ltd. v.
Anand Abasaheb Hawaldar and Ors., [2006) 3 SCC 56 and UP. State
Road Transport Corporation v. Birendra Bhandari, [2006) 10 SCC 211,
relied on.
c CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5787 of
2000.
From the Judgment and Order dated 31.10.2000 of the High Court
of Punjab and Haryana at Chandigarh in LPA No. 14 of2000 (0 & M).
D
S.B. Sanyal, Subhro Singh and Goodwill Indeever for the
Appellants.
•

Ashok Desai, Nageshwar Rao, A.S. Chadha and Meera Mathur
for the Respondents.
E
The Judgment of the Court was delivered by
DR. ARIJIT PASAYAT, J. I. Challenge in this appeal is to the
judgment of the Division Bench of the Punjab and Haryana High Court
dismissing the Letters Patent Appeal filed by the appellants questioning
F the legality of the judgment rendered by a learned Single Judge dismissing
the writ petition.
2. The controversy lies within a very narrow compass. The appellants
were employees of respondent No. I (hereinafter referred to as the
G 'employer'). A voluntary retirement scheme was floated by the employer
on 26.5.1995. Undisputedly, appellants and 125 others opted to be
covered by the scheme. They were paid the amounts required to be paid
under the scheme. Subsequently, a settlement was arrived at between the
management and the workmen through the registered Union on
H 13.10.1995. The settlement was in terms of Section 12(3) of the Industrial
VIJA Y KUMAR v. WHIRLPOOL OF INDIA LTD. 427
[PASAYAT, J.]
Disputes Act, 1947 (in short the 'Act'). 143 persons including the present A
appellants raised a dispute on two issues; one relating to the age of
retirement and the other relating to monetary benefits. According to them,
the settlement arrived at on 13 .10.1995 also covered their cases and they
were entitled to higher amounts. The claim was made by an application
under Section 33-C(2) of the Act. The Presiding Officer, Industrial B
Tribunal-cum-Labour Court-I, Faridabad (hereinafter referred to as the
'Tribunal') held that the claimants were entitled to the benefits flowing from
the settlement and that the claimants were entitled to be continued in
service by treating age of retirement to be 58 years. The employer filed
'
a writ petition before the High Court. Learned Single Judge held that the C
view of the Tribunal is unsustainable. It was held that Section 33-C(2) of
the Act does not apply to the facts of the case and no benefit was
available under the settlement. The essential conclusions of the learned
Single Judge are as follows:
"What is the position herein? A settlement was arrived at. At best, D
the Labour Court could interpret the said settlement and ifthere
was anything more due, the benefit could be given to the workmen
but tl1e Labour Court could not interpret or go into the controversy
of fraud, if any, because on basis of fraud in execution the decree
cannot be modified. Similarly, when there was a basic controversy E
about the age of retirement, it was not pertaining to a pre-existing
right. The award of the Labour Court in this regard, therefore,
cannot be sustained."
3. Eighteen persons i.e. the present appellants filed Letters Patent F
Appeal which was dismissed as noted above.
4. In support of the appeal, learned counsel for the appellants
submitted that stress in the settlement was on "permanent workmen on
tlle rolls of specified divisions on 30.6.1995". According to the appellants G
all of them continued to be on rolls beyond 30.6.1995 and, therefore,
they are entitled to be benefits.
5. In response, learned counsel for the respondent No. I-employer
submitted that at the point of time the settlement was arrived at, the
H
t
428 SUPREME COURT REPORTS [2007] 12 S.C.R.

A appellants were not existing workmen. In addition, the benefits are
relatable to future production targets and the instalments of financial
benefits are given only on attainment of specified production target. The
stand of the appellants of continuance beyond 30.6.1995 is also disputed
on the ground that learned Single Judge has referred to various documents
B to conclude that none of the appellants were in fact on the rolls of the
employer as on 30.6.1995. The illustrative case of one Jeet Singh as noted >.
by the High Court was referred to. It was also submitted that in order to
get over the factual position the basic case before the Tribunal was alleged
fraud purported to have been practiced by the employer. The High Court
c has categorically found that there was no element of fraud. Reference is
made to para 7 of the application filed under Section 33-C{2) of the Act.
6. Learned counsel for the appellants submitted that the plea relating
to age and the alleged fraud are not pressed. The only plea is relatable to
the claim flowing from the settlement.
D
7. Few portions of the settlement which throw considerable light on >•
the controversy need to be noted:
"0.1 Coverage
E All paras of this Settlement shall cover all permanent workmen,
except casuals, of Kelvinator of India Ltd., Faridabad and
Ballabgarh on the rolls of (its various specified divisions) as on
30.6.1995, (hereinafter called eligible workmen).
0.6 Financial Benefits
F
The parties decided to grant the undemoted financial benefits
to the workmen:
Increase in Basic Wage

G Period Amount
'.,__..
1. 7.95 Rs.800/-
1.7.96 Rs.400/-
I. 7.97 Rs.300/-.
H
VIJA Y KUMAR v. WHIRLPOOL OF INDIA LTD. 429
[PASAYAT,J.]
The amount of financial benefit shall be added to the concerned A
workman's basic wage as on 30th June, 1995 and the total thereof
would be the revised basic wage of that workman. The second
and third instalments of the financial benefits shall be given only on
attainment the specified production target and the current 15 per
cent special worker allowance shall be added to the workmen's B
basic wage from 1.10.1995."

8. A bare reading of the above quoted portion clearly shows that
the settlement covered only cases of existing employees. The question of
any erstwhile workman attaining specified production target does not arise. C
9. At this juncture, it would also be appropriate to take note of what
has been stated by this Court in some cases.
10. In A.K. Bindal v. Union of India, [2003] 5 SCC 163, it has
been stated as under:
D
"34. This shows that a considerable amount is to be paid to
an employee ex gratia besides the terminal benefits in case he opts
for voluntary retirement under the scheme and the option is •
accepted. The amount is paid not for doing any work or rendering
any service. It is paid in lieu of the employee himselfleaving the E
services of the company or the industrial establishment and
foregoing all his claims or rights in the same. It is a package deal
of give and take. That is why in the business world it is known as
"golden handshake". The main purpose of paying this amount is
to bring about a complete cessation of the jural relationship between F
the employer and the employee. After the amount is paid and the
employee ceases to be under the employment of the company or
the undertaking, he leaves with all his rights and there is no question
of his again agitating for any kind of his past rights with his erstwhile
employer including making any claim with regard to enhancement G
of pay scale for an earlier period. If the employee is still permitted
to raise a grievance regarding enhancement of pay scale from a
retrospective date, even after he has opted for Voluntary Retirement
Scheme and has accepted the amount paid to him, the whole
H
-t
430 SUPREME COURT REPORTS [2007] 12 S.C.R.

~·

A purpose of introducing the scheme would be totally frustrated."

11. In CEAT Ltd v. Anand Abasaheb Hawaldar and Ors., [2006]
3 sec 56 it has been held as under:
"10. According to learned counsel for the appellant, a
B complaint of unfair labour practice can be made only by the existing
employees. Under clause (5) of Section 3 of the Act the expression
"employee" only covers those who are workmen under clause (s)
•
of Section 2 of the Industrial Disputes Act, 1947 (in short the 'ID
Act'). The expression "workman" as defined in clause (s) of
c Section 2 of the ID Act relates to those who are existing
employees. The only addition to existing employees, statutorily
provided under Section 2(s) refers to dismissed, discharged and
retrenched employees and their grievances can be looked into by
the forums created under the Act. In the instant case, the
D complainants had resigned from service by voluntary retirement
and, therefore, their cases are not covered by the expression ),

'workman'. On the factual scenario, it is submitted that after the
337 employees had accepted VRS-1, others had raised disputes
and had gone to Court. Order was passed for paying them the
E existing salary and other emoluments. This went on nearly two
years and, therefore, with a view to curtail litigation a Memorandum
of Understanding was arrived at in 1994. This basic difference in
the factual background was not noticed by either the Industrial
Court or the High Court." ...
F
12. In UP. State Road Transport Corporation v. Birendra '
Bhandari, [2006] 10 SCC 211 it has been stated as under:
"7. The benefit which can be enforced under Section 33-C(2) is
a pre-existing benefit or one flowing from a pre-existing right.
G
8. In the case oi State Bank ofIndia v. Ram Chandra Dubey &
Ors., [2001] 1 SCC 73, this Court held as under:
"7. When a reference is made to an Industrial Tribunal to
adjudicate the question not only as to whether the termination
H
VIJA Y KUMAR v. WHIRLPOOL OF INDIA LTD. 431
[PASAYAT,J.]
of a workman is justified or not but to grant appropriate relie~ A
it would consist of examination of the question whether the
reinstatement should be with full or partial back wages or none.
Such a question is one of fact depending upon the evidence
... to be produced before the Tribunal. If after the termination of
the employment, the workman is gainfully employed elsewhere B
it is one of the factors to be considered in determining whether
or not reinstatement should be with full back wages or with
continuity of employment Such questions can be appropriately
examined only in a reference. When a reference is made under
Section l 0 of the Act, all incidental questions arising thereto C
can be determined by the Tribunal and in this particular case,
a specific question has been referred to the Tribunal as to the
nature of relief to be granted to the workmen.
8. The principles enunciated in the decisions referred by either
side can be summed up as follows: D.
Whenever a workman is entitled to receive from his employer
any money or any benefit which is capable of being computed
in terms of money and which he is entitled to receive from his
employer and is denied of such benefit can approach Labour E
Court under Section 33-C(2) of the Act. The benefit sought
to be enforced under Section 33-C(2) of the Act is necessarily

-
a pre-existing benefit or one flowing from a pre-existing right.
The difference between a pre-existing right or benefit on one
hand and the right or benefit, which is considered just and fair F
on the other hand is vital. The former falls within jurisdiction
of Labour Court exercising powers under Section 33-C(2) of
the Act while the latter does not. It cannot be spelt out from
the award in the present case that such a right or benefit has
accrued to the workman as the specific question of the relief G
granted is confined only to the reinstatement without stating
anything more as to the back wages. Hence that relief must
be deemed to have been denied, for what is claimed but not
granted necessarily gets denied in judicial or quasi-judicial
proceeding. Further when a question arises as to the H
432 SUPREME COURT REPORTS [2007] 12 S.C.R.

A adjudication of a claim for back wages all relevant
circumstances which will have to be gone into, are to be
considered in a judicious manner. Therefore, the appropriate
forum wherein such question of back wages could be decided
is only in a proceeding to whom a reference under Section
B 10 of the Act is made. To state that merely upon reinstatement,
a workman would be entitled, under the tenns of award, to
all his arrears of pay and allowances would be incorrect
because several factors will have to be considered, as stated
earlier, to find out whether the workman is entitled to back
c wages at all and to what extent. Therefore, we are of the view
that the High Court ought not to have presumed that the award
of the Labour Court for grant of back wages is implied in the
relief of reinstatement or that the award of reinstatement itself
conferred right for claim of back wages."
D
13. Looked at from any angle, this appeal is without merit, deserves
dismissal which we direct. Costs made easy.
RP. Appeal dismissed.

t