Supreme Court of India
UNION OF INDIA AND ORS.versusSURESH C. BASKEY AND ORS. ETC. ETC.
- Citation
- 1995 INSC 721
- Decided
- 13 November 1995
- Disposal
- Appeal(s) allowed
Holding
Employees occupying government accommodation are not entitled to include house rent allowance as part of the ordinary rate of wages for computing overtime allowance.
Summary
The Supreme Court considered whether workmen of the Government Mint in Calcutta, who were allotted government accommodation and therefore did not receive house rent allowance (HRA), could notionally include HRA in the "ordinary rate of wages" for calculating overtime allowance under Section 59 of the Factories Act, 1948. The Central Administrative Tribunal had earlier directed that overtime be computed on the basis of emoluments including HRA, and the Union of India appealed this decision. The Court held that the government instructions did not extend the benefit of HRA to employees who were not actually entitled to it, and that the definition of "ordinary rate of wages" in the Act includes only those allowances to which a worker is presently entitled. Consequently, HRA could not be notionally added for those occupying government housing. The Court allowed the appeals, set aside the Tribunal judgments, and directed that the ruling apply prospectively, while confirming that no refund of overtime already paid is required.
Issues considered
- Whether employees of the Government Mint occupying government accommodation and not receiving house rent allowance are entitled to include HRA notionally in the ordinary rate of wages for overtime computation.
- Whether the government instructions directing overtime computation on the basis of emoluments including HRA apply to such employees.
- Interpretation of "ordinary rate of wages" under Section 59(2) of the Factories Act, 1948.
Legislation cited
- Factories Act, 1948s. 59
Subjects
Overtime allowanceOrdinary rate of wagesHouse rent allowanceFactories ActGovernment employeesStatutory interpretation
Judgment
A UNION OF INDIA AND ORS.
v.
SURESH C. BASKEY AND ORS. ETC. ETC.
NOVEMBER 13, 1995
B [KULDIP SINGH AND B.L. HANSARIA, JJ.]
Factolies Act, 1948: Section 59.
Workmen-Calcutta Mint-Employees in occupation of Govemment
accommodation-Ove1time allowance-Computation of-lnclusion of no-
c tional element of House Rent Allowance in overtime allowance held not
pennissible-Govemment orders regarding computation of overtime al-
lowance-Held should be read in confonnity with provisions of the Act.
Words and Phrases : 'Ordinary rate of wages'-:Meaning of-Section
D 59(2) Fact01ies Act, 1948.
The question in these appeals is whether the employees- workmen of
the Government Mint, Alipur, Calcutta who are occupying Government
accommodation and as such are not being paid House Rent Allowance are
entitled to compute the overtime allowance payable to them after taking
E into account notionally the element of house rent allowance.
Following its earlier decision in O.A. No. 13 of 1987 decided on April
17, 1990 the Central Administrative Tribunal, Calcutta answered the ques-
tion in favour of the employees. Accordingly, it directed the respondents
to implement Government Order dated 11th November, 1985 read with
F order dated 28th September, 1984 and Mint Diary Order No. 130/84 dated
26th October, 1984 and include the House Rent Allowance as part of the
'ordinary rate of wages' for computing the overtime allowance. Union of
India preferred appeals before this Court.
G Allowing the appeals and setting aside the impugned judgment of the
High Court, this Court
HELD : 1. The respondents and other employees of the Government
Mint who are occupying Government accommodation are not entitled to
include the house rent allowance as part of the "ordinary rate of wages"
H for computing the overtime allowance. [160-G]
152
U.0.1. v. S.C. B~KEY 153
Govind Bapu Salvi and Ors. v. Viswanath Janardhan Joshi and Ors., A
[1995] Supp. l'SCC 148 and The Master of the Mint v. Kashi Nath Dutta
and Anr., [1995] 7 scale SP 7.
2. It is no doubt correct that the Government instructions spPcifically
provide that "overtime allowance will be computed on the basis of emolu-
B
ments including house rent allowance", but it is nowhere provided in the
said instructions that even those employees who are occupying Government
houses and as such are not being paid the house rent allowance, are also ·
entitled to include House Rent Allowance, notionally, in their wages for the
purposes of computing the overtime allowance. A bare reading of the
Government instructions relied upon by the Tribunal goes to show that the c
said instructions do not give any right to the respondents and others
similarly situated to have the house rent amount included in their emolu-
ments for the purpose of computing overtime allowance. [157-E-F; 158-G]
3. Even otherwise the Government instructions have to be read in D
conformity with the provisions of the Act. The overtime allowance has to
be computed on the basis of the "ordinary rate of wages". Sub-section (2)
of Section 59 of the Factories Act defines "ordinary rate"of wages" to mean
the basic wages plus such allowance as the worker is for the time being
entitled to, but does not include the bonus and wages for overtime work.
E
Thus the ordinary rate of wages is the basic wages plus the allowances to
which a worker is entitled for the time being. If a worker is not entitled to
a particular allowance the same cannot be includ~d in the "ordinary rate
of wages". In the present case, admittedly, the respondents are not entitled
to the house rent allowance and as such the same cannot be included while
determining the ordinary rate of wages. It would be wholly fallacious to F
include an allowance 'notionally' which has been excluded specifically. The
legislature in its wisdom included the cash equivalent of the advantage
accruing through the concessional sale to workers of foodgrains and other
articles in the definition of "ordinary rate of wages". The legislature has
not done so ~n respect of the house rent allowance. [159-D-F] G
4. It is directed that the respondents or other employees of the
. Government-Mint similarly situated who have already been paid overtime
allowance in terms of the Tribunal judgments shall not be asked to refund
the same. [160-H] H
154 SUPREME COURT REPORTS (1995) SUPP. 5 S.C.R.
A CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1837 of
1991 Etc.
From the Judgment and Order dated 6.9.90 of the Central Ad-
ministrative Tribunal, Calcutta, in O.A. No. 983 of 1990.
B V.C. Mahajan, Ms. Shashi Kiran, S.N. Terdol, C.V.S. Rao, D.S.
Mehra and B.K. Prasad for the Appellants
Krishan Mahajan, P.H. Parekh and S. Fazl for the Respondents.
Tapas Ray and H.K. Puri for the Respondent in S.L.P. No. 4854/90.
c The Judgment of the Court was delivered by
KULDIP SINGH, J. The question before the Central Achninistrative
Tribunal Calcutta Bench (the Tribunal) was whether the employees
(workmen) working in the Government-Mint, Alipur, Calcutta - who were
D allottees of Government accommodation and as such were not being paid
house rent allowance - were entitled to compute the over-time allowance
payable to them after taking into account, notionally, the element of house
rent allowance. Following its earlier decision ip. .QA U of 1987 (decided
on April 17, 1990) the Tribunal answered the question by the impugned
E judgment dated September 6, 1990 in the affirmative and decided the same
in favour of the employees. This appeal, by the Union of India is against
the judgment of the Tribunal.
It is not necessary for us to go into the chequered history of litigation
on the question whether the employees of Government- Mint were entitled
F to the over-time allowance. It is not disputed before us that the employees
of the Government-Mint who come within the definition of workmen under
the Factories Act, 1948 (the Act) are entitled to extra wages for over-time
under Section 59 of the Act. It is further not disputed that all those
employees who have not been allotted Government accommodation and
are in receipt of house rent allowance are entitled to commute the over-
G time allowance by including house rent allowance into the "ordinary rate
of wages." The short question before us is whether the employees who are
occupying Government accommodation and as such are not being paid
house rent allowance, are entitled to compute the "ordinary rate of wages"
by notionally adding the amount of house rent allowance which they would
H have got, had they not been allotted the Government accommodation.
. U.0.1. v. S.C. BASKEY [KULDIP SINGH,J.]
The Tribunal accepted the contention of the respondents-applicants
before it that they were entitled to similar relief as was given to the
employees of the Government-Mint in OA 13 of 1987. On the concession
155
A
of the learned counsel for the Union of India, the Tribunal allowed the
application by the impugned order in the following terms :
"Mr. C.R. Bag very fairly concedes that the facts of this case are B
identical with those in OA 13 of 87 (Ninnal Ch. Bhowmich & Ors.
v. Union of India & Ors.).
In that view of the matter, we dispose of this application at the
admission stage itself with a direction to the respondents to dispose
of the repr<?sentation of the applicants dated 8.12.86 (Annexure-C)
c
in the light of the aforesaid two judgments and pass an appropriate
order giving the same benefits within 60 days from today."
. We may, therefore, examine the judgment of the Tribunal in OA 13
of 1987. It would be useful to reproduce the operative part of the judgment: D
"It is the grievance of the applicants that although an order has
been made on 11th November, 1985 directing that overtime should
be calculated inclusive of house rent allowance, the respondents
are not implementing the same. This application has been taken
out for implementation of the order dated 11th November, 1985 E
read with order dated 28th September, 1984 and Mint Diary Order
No. 130/84 dated 26th October, 1984.
Mr. Samir Ghosh appearing for the applicants invites my at-
tention to annexure 'A' at page 22 of the application which is the
letter dated 11th November, 1985. The subject matter of this letter F
is "Computation of overtime allowance on the basis of emoluments
including house rent allowance - payment of arrears regarding....".
This letter is addressed to The General Manager, India Govt. Mint,
Bombay/Hyderabad/Calcutta and is written by the Under
Secretary to the Govt. of India, Ministry of Finance, Department G
of Economic Affairs. This letter reads as follows :-
"I am directed to convey the approval of the Govt. of India,
Ministry of Finance, Department of Economic Affairs, for making
payments of arrears of overtime allowance from l.1.1956 onwards
on the l..tSis of emoluments including house rent allowance to the R
A
156 SUPREME COURT REPORTS [1995] SUPP. 5 S.C.R.
industrial employees as well as the classified staff of the India
Government Mints at Bombay, Calcutta and Hyderabad.
.
xxx xxx xxx
This issues with the approval of IFA in the department vide f
B their U.O. No. 3825/IFA/85 dated 7.11.1985."
The letter dated 28th September, 1984 at page 23 of the application
is addressed to Shri H.N. Gupta, General Manager, India Govt.
Mint, Calcutta. Paragraph 1 of this letter states as follows :-
c "Please refer to the correspondence resting with our letter of
even number dated 28th June, 1984 regarding computation of
O.T.A. on the basis of emoluments including H.R.A. addressed to
the General Manager, India Govt. Mint, a copy of which has been
endorsed to you."
D
The third letter annexed to the application at page 24 is dated 26th
October, 1984, the subject matter of which is - "Computation of
overtime allowance on the basis of emoluments including house
rent allowance for work between 37V2 and 48 hours a day". This
letter records as follows :-
E
"Computation of overtime allowance on the basis of emolu-
ments including house rent allowance was under consideration of
the Government of India, Ministry of Finance (D.E.A.) since quite
some time. It has now been decided by the Government that
F overtime allowance will be computed on the basis of emoluments
including house rent allowance with effect from 9th May, 1984 for
work done between 371/z hours to 48 hours per week in respect of
all employees of the three (3) Mints."
Going through the annexures to the application, the correctness
G of which has not been disputed by the respondents, I have no doubt
in my mind that overtime allowance payable to the applicants must
be computed inclusive of house rent allowance."
The Tribunal, thereafter, allowed OA ·13 of 1987 in the following
H terms:
U.0.1. v. S.C. BASKEY [KULDIP SINGH, J.) 157
"In view of the facts stated above, this application is allowed. The A
respondents are directed to give effect to the Government Order
dated 11th November, 1985 read with order dated 28th September,
1984 and Mint Diary Order No. 130/84 dated 26th October, 1984,
as appended in annexure 'A' of the application collectively, so far
as the applicants are concerned the respondents are directed to B
draw and disburse the overtime allowance in terms of the said
order. This. order should be complied with within three months
from date. All arrears payable to the applicants be paid to them
within the said period.
Matter is disposed of. There will be no order as to costs." C
Special leave petition 4854 of 1990 filed against the above quoted judgment
of the Tribunal in OA 13of1987 was dismissed by this Court on February
26, 1990 by the following order :
D
"We find no grounds to condone the delay. Interlocutory applica-
tion for condonation of delay is dismissed. Consequently, the
special leave petition is dismissed as barred by time."
The judgment of the Tribunal in OA 13 of 1987 shows that the
Tribunal, after quoting the three Government instructions, directed the E
Union of India to give effect to the said instructions. It is no doubt correct
that the Government instructions specifically provide that "over-time al-
lowance will be computed on the basis of emoluments including house rent
allowance", but it is no where provided in the said instructions that even
those employees who are occupying Government houses and as such are F
not being paid the house rent allowance, are also entitled to include House
Rent Allowance, notionally, in their wages for the purposes of computing
the over-time allowance. We are of the view that on the plain reading of
the instructions relied upon by the Tribunal it is not possible to interpret
the same to mean that the employees of the Government-Mint who are
occupying Government accommodation and as such are not being paid G
house rent allowance, are entitled to compute the over-time allowance by
including the house rent allowance - notionally - in their emoluments. Since
the Tribunal in its judgment in OA 13 of 1987 did not interpret the
Government instructions the same shall be read in the light of the inter-
pretation given by us. H
158 SUPREME COURT REPORTS [1995) SUPP. 5 S.C.R.
A This Court on July 26, 1994 passed the following order : ....
"CA. No. 1837/91 This appeal is directed against the judgment of
the Central Administrative Tribunal, Calcutta Bench dated Sep-
tember 6, 1990 in 0.A. No. 983/90. The Tribunal in turn relied
upon its earlier judgment in O.A. No. 13/87 decided on September
B 1, 1989.. Special Leave Petition against the judgment on the
Tribunal in O.A. No. 13/87 was dismissed by this Court on the
ground of delay.
Since this Court has granted leave to appeal against the judg-
c ment of the Calcutta Bench in 0.A. No. 983/90, the matter has to
be finally decided on merits. There is a connected appeal on the
same point from the judgment of the Central Administrative
Tribunal, Bombay.
We are prima facie of the view that any decision on merits in
D these two appeals is likely to affect the respondents in SLP (C) .....
(CC No. 23481) filed against the judgment of the Central Ad-
ministrative Tribunal, Calcutta Bench, in O.A. No. 13/87. The
special leave petition was dismissed on the ground of delay on
February 26, 1990. We direct the Registry to issue notices to the
E respondents in S.L.P.(C) No ... (CC No. 23481) which was dis-
missed on February 26, 1990. The notices shall be returnable on
September 7, 1994. The Union of India to obtain dasti process in
addition to serve those respondents".
In response to the above quoted order, Nirmal Ch. Bhowmich has
F filed affidavit on behalf of the respondents in SLP 4854/90.
We have heard learned counsel for the parties. We agree with the
contention of the learned counsel for the appellant that a bare reading of
the Government instructions relied upon by the Tribunal goes to show that
G the said instructions do not give any right to the respondents and others
similarly situated to have the house rent amount included in their emolu-
ments for the purpose of computing over-time allowance.
Even otherwise the Government instructions have to be read in
conformity with the provisions of the Act. The claim of the respondents
H for grant of over-time allowance is based on Section 59 of the Act.
U.O.L v. S.C. BASK.BY [KULDIP SINGH, J.] 159
Sub-sections (1) and (2) of Section 59 of the Act, which are relevant, are A
as under:
"Extra wages for over-time - (1) Where a worker works in a factory
for more than nine hours in any day or for more than forty eight
hours in any week, he shall, in respect of overtime work, be entitled
to wages at the rate of twice his ordinary rate of wages. B
(2) For the purposes of sub-section (1), 'ordinary rate of wages'
means the basis wages plus such allowances, including the cash
equivalent of the advantage accruing through the concessional sale
to workers of foodgrains and other articles, as the worker is for C
the time being entitled to, but does not include a bonus and wages
for overtime work".
The over-time allowance has to be computed on the basis of the
"ordinary rate of wages". Sub-section (2) of Section 59 of the Act defines
"ordinary rate of wages" to mean the basic wages plus such allowances as D
the worker is for the time being entitled to, but does not include the bonus
and wages for over-time work. In other words, the ordinary rate of wages
is the basic wages plus the allowances to which a worker is entitled for the
time being. If a worker is not entitled to a particular allowance the same
cannot be included in the "ordinary rate of wages". In the present case, E
admittedly, the respondents are not entitled to the house rent allowance
and as such the same cannot be included while determining the ordinary
rate of wages. It would be wholly fallacious to include an allowance
'notionally' which has been excluded specifically. The legislature in its
wisdom included the cash equivalent of the advantage accruing through the
concessional sale to workers of foodgrains and other articles in the defini- F
tion of "ordinary rate of wages". The legislature has not done so in respect
of the house rent allowance.
We respectfully agree with the law laid down by this Court in Govind
Bapu Salvi and Others v. Vishwanath Janardhan Joshi and Others, (1995] G
Supp. 1 SCC 148 and in The Master of the Mint v. Kashi Nath Dutta and
Another, (1995) 7 Scale SP 7.
We are inclined to agree with the learned counsel for the appellant
that despite the respondents getting a slightly lesser rate for computing the
overtime allowance they are placed in an advantageous position as com- H
160 SUPREME COURT REPORTS (1995] SUPP. 5 S.C.R.
A pared to those who are not in occupation of Government accommodation.
-
In the additional affidavit filed on behalf of the Union of India, multiple
benefits which accrue to a Government employee, who is allotted Govern-
ment accommodation, have been shown as under :
"Government Accommodation Private Accommodation
B
1. Nominal Licence fee upto - exorbitant rent-incremental at
10% of basis pay the mercy of landlord.
2. No HRA payable - HRA admissible approx. Rs.
250 for this category of
employees.
c
3. In the vincity of Mint - Far from Mint.
4. No expenditure on transport. - some expenditure on transport
and inconvenience.
5. Little time taken to reach - some time taken to reach
D Mint Mint.
6. Free maintenance by - minor maintenance has to be
Government attended by the allottee - all
other maintenance by the
landlord at his convenience.
E 7. One can live till the age of - at the mercy of landlo~d.
superannuation and 6 months
thereafter.
8. In case of 'die in harness' the - No such provision exists.
quarter is allotted to deceased
F dependent."
We, therefore, hold that the respondents and others employees of
the Government-Mint who are occupying Government accommodation are
not entitled to include the house rent allowance as a part of the "ordinary
G rate of wages~. for computing the over-time allowance. ·
We allow the appeals, set aside the impugned judgments of the
Tribunal. We, however, direct that the respondents or other employees of
the Government-Mint similarly situated who have already be~n paid over-
H time allowance fti terms of the Tribunal judgments shall not be asked to
U.0.1. v. S.C. BASKEY [KULDIP SINGH, J.] 161
refund the saine. A
In OA 13 of 1987 the Tribunal directed that the Government instruc-
tions relied upon by the Tribunal be implemented. Since we have inter-
preted the Government instructions and also the provisions of Section 59
of the Act, it would be in the interest of justice that the law laid down by
us be made applicable to the applicants in OA 13 of 1987 (respondents in B
SLP 4854/90) prospectively from the date of this judgment. No costs.
T.N.A. Appeals allowed.
Search Indian case law
Ask in plain English, not just keywords. 25,000 AI words free, no card.
Try "Overtime allowance"Sign in to search