Municipal Commissioner, Pune Municipal Corporation v. Ashish Laxman Chavan

1. Rule. Rule is made returnable forthwith.With the consent of the parties, Petitions are taken up for final hearing and disposal.

2. Pune Municipal Corporation has filed the present petitions challenging the Orders passed by the Industrial Court in various Complaints filed by the Respondent-Employees. The Industrial Court has allowed the complaints of Respondentemployees and has directed the Petitioner-Corporation to pay the amount of ‘Mushahira’ coming to the share of the Respondent-Employees within a period of three months. ‘Mushahira’ is sort of 20% incentive payable to employees on the compromise fees recovered from Octroi evaders. The Industrial Court has further directed that interest @ 6% p.a. would be payable on the amount due on failure to pay the same within three months.

3. Petitioner is a Municipal Corporation established under the provisions of Maharashtra Municipal Corporations Act, 1949. Respondents are employees of Pune Municipal Corporation who were posted on various posts in the Octroi Department. The General Body of Municipal Corporation adopted a Resolution in its meeting held on 27 August 1984 resolving that 20% of amount recovered towards the compromise fees from Octroi evaders be paid as Mushahira to the employees apprehending the goods. The Respondents were deployed on the duty of apprehending the Octroi evaders from time to time. It appears that the employees apprehending Octroi evaders were being paid 20% amount of compromise fees towards Mushahira up to the year 2007. From the year 2008-2009, the Municipal Corporation discontinued the system of paying such Mushahira to Octroi employees. The Union therefore made representations dated 21 July 2009, 22 January 2010, 12 August 2010 and 25 November 2010 complaining about discontinuation of system of payment of Mushahira. Additionally, the concerned employees also made representations on 17 February 2010 and 25 February 2010. A notice was also served upon the Municipal Corporation through Advocate on 07 December

2010. It appears that the Chief Octroi Officer also requested the Municipal Commissioner for continuation of scheme for payment of 20% Mushahira. However, since the system of payment of Mushahira was not continued, the Union sent letter dated 11 March 2013. The employees finally approached the Industrial Court by filing various complaints under Section 28(1) of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (MRTP & PULP Act) alleging unfair labour practices on the part of Municipal Corporation and demanding payment of unpaid amount of Mushahira for various periods.

4. For illustrative purposes, it would be appropriate to refer to the pleadings raised in Complaint filed by the employee-Ashish Laxman Chavan (Respondent) in Writ Petition No.8953 of 2018. Shri. Ashish Laxman Chavan came to be appointed in the municipal service on 06 May 1995. He was deputed to work in Patrolling Squad of Octroi Department from 06 August 2004 to 26 August 2009. His designation at the relevant time was Patrolling Squad Inspector. According to him, the total amount due and payable for having apprehended several Octroi evaders during the period from 06 August 2004 to 26 August 2009 is Rs. 3,15,000/-, records of which are available with the Municipal Corporation. Accordingly in the Complaint (ULP No. 90 of 2013) Shri. Ashish Laxman Chavan prayed for payment of amount of Mushahira during the period from 06 August 2004 to 26 August 2009 along with the interest at the rate of 18% per annum.

5. The complaints were resisted by the Municipal Corporation by filing its reply. The Municipal Corporation claimed that its Octroi Department is not an ‘industry’ and that therefore the complaints filed by the employees were not maintainable. The complaints were also resisted on the ground of delay and laches. It was also contended that the system of paying Mushahira was stopped by the Municipal Corporation from 02 September 2009 vide Resolution No.183 dated 13 May 2010.

6. The Industrial Court, after hearing both the sides, delivered Award dated 02 April 2016 allowing the complaints holding that the Petitioner-Municipal Corporation has indulged in unfair labour practices as enumerated in item-9 of Schedule IV of MRTU & PULP Act. The Corporation is directed to pay the amount of Mushahira coming to the share of the Complainants within three months, failing which interest at the rate of 6% per annum from the date of the order till the actual date of payment.

7. Mr. Kulkarni, the learned counsel would appear on behalf of the Petitioner-Municipal Corporation and submit that the complaints filed by the Respondent-employees were not maintainable as the Octroi Department of the Municipal Corporation is not an industry. In support of this contention, he would rely upon the Judgment of the Apex Court in Parmanand Vs. Nagar Palika, Dehradun & Others[1] and Judgement of the Division Bench of this Court in Abdul Shabir Khan Ahmed Khan & Ors. Vs. Municipal Council, Bhandara[2].

8. Mr. Kulkarni would further submit that the Complaints filed by the Respondents were otherwise time barred. That, no right was created in favour of the employees to demand the amount of Mushahira. That it is their duty to collect Octroi and therefore they cannot seek any additional 1 (2004) ILLJ 235 SC, 2003 (10) SCALE 481, (2003) 9 SCC 290 2 1969 MHLJ 532. payments over and above the salary and allowances. That, grant of any such Mushahira creates discrimination between two sets of employees of the Municipal Corporation. That while other employees do not get any incentive, those working in Octroi Department demand incentive for collection of higher amount of Octroi. He would pray for setting aside Awards passed by the Industrial Court.

9. Per Contra, Mr. Rao would appear for Respondentemployees and oppose the petition and support the orders passed by the Industrial Court. He would submit that even Octroi Department of Municipal Corporation is held to be an industry. Relying on the Judgment of the Apex Court in Corporation of City of Nagpur Vs. Its employees & Ors,[3] he would submit that the Tax Department of Municipal Corporation has been held to be an Industry. He would also place reliance on Division Bench Judgment of this Court in Abdul Wahab Sheikh Lal Bhai Vs. G.E. Patankar, Industrial Tribunal Vs. Ors.[4] in support of his contention that Octroi Department of a Municipal Corporation falls within the definition of the term ‘industry’. He would therefore 3 1960 LLJ 523 4 1989 MHLJ 100 submit that complaints filed by the employees were therefore maintainable.

10. Mr. Rao would further submit that the Resolution passed by the General Body of the Municipal Corporation has created a right in favour of employees to claim payment of Mushahira. That, such right created in favour of employees’ cannot be defeated at the whims and caprices of the Municipal Commissioner. That, there is nothing on record to indicate that the Resolution passed by the Municipal Corporation has been rescinded by the State Government or any fresh resolution is passed discontinuing the system of payment of Mushahira. That, even the subsequent Resolution No. 183 dated 13 May 2010 envisaged continuance of the scheme for payment of Mushahira. That, the Industrial Court has directed payment of Mushahira to the employees in respect of the period when the scheme for payment of such Mushahira was invogue. That, in such circumstances, there is no patent error in the order of Industrial Court. He would pray for dismissal of the Petitions.

11. Rival contentions of the parties now fall for my consideration.

12. The first issue raised by the Petitioner-Municipal Corporation is that its Octroi Department is not an ‘industry’ and therefore, the complaints filed by the employees were not maintainable. It would therefore be necessary to first answer the issue of maintainability of the complaints. The Industrial Court has relied upon judgment of the Apex Court in Corporation of City of Nagpur (supra) for holding that the Octroi Department of the Municipal Corporation is an industry. In Corporation of City of Nagpur (supra), the Apex Court has considered each and every department of the Municipal Corporations for determining whether such departments would be covered by the expression ‘industry’ within the meaning of Industrial Disputes Act. So far as the Tax Department is concerned, the Apex Court held as under:- “(1) Tax department: The main functions of this department are the imposition and collection of conservancy, water and property taxes. No separate staff has been employed for the assessment and levy of property taxes: the same staff does the work connected with assessment and collection of water-rates as well as scavenging taxes. It is not disputed that the work of assessment and levy of water-rate and scavenging rate for private latrines is far heavier than the other works entrusted to this department. No attempt has been made to allocate specific proportion of the staff for different functions. We, therefore, must accept the finding of the State industrial court that the staff of this department doing clerical or manual work predominantly does the work connected with scavenging taxes and water-rate. The said rates are really intended as fees for the service rendered. The services, namely, scavenging and supply of water, can equally be undertaken by a private firm or an individual for remuneration and the fact that the municipality does the same duty does not make it any the less a service coming under the definition of "industry." We would, however, prefer to sustain the finding on a broader basis. There cannot be a distinction between property tax and other taxes collected by the municipality for the purpose of designating the Tax department as an industry or otherwise. The scheme of the Corporation Act is that taxes and fees are collected in order to enable the municipality to discharge its statutory functions. If the functions so discharged are wholly or predominantly covered by the definition of "industry," it would be illogical to exclude the Tax department from the definition. While in the case of private individuals or firms services are paid in cash or otherwise, in the case of public institutions, as the services are rendered to the public, the taxes collected from them constitute a fund for performing those services. As most of the services rendered by the municipality come under the definition of "industry," we should hold that the employees of the Tax department are also entitled to the benefits under the Act.

13. However, a Division Bench of this Court in Abdul Shabir Khan Ahmed Khan (supra) considered the issue specifically with regard to the Octroi Department of the Municipal Corporation. It considered the Judgement of the Apex Court in Corporation of City of Nagpur (supra) and held that the judgment of Apex Court envisaged examination of activities of each of the departments for arriving at a conclusion as to whether that department would be treated as an ‘industry’. Though Tax Department of Municipal Corporation is held as an industry in Corporation of City of Nagpur, Division Bench of this Court considered whether Octroi Department would be an industry and held that the same cannot be treated as an industry. This Court held in para 13 as under:-

13. It will thus be seen that this Octroi Department not only does not produce material goods, nor render material services but only shares by delegation in the governmental functions, namely, imposing, collecting and levying the Octroi tax and as such, the activities of the Octroi Department cannot be held to amount to an "industry". In view of this, we are of opinion that the Octroi Department of which the petitioners are the employees cannot be held to be an "industry" and as such, the provisions of the Industrial Disputes Act, and particularly those of section 25F thereof, cannot be made applicable to the present employer. Therefore, there was no need for the respondent-Municipal Council to follow the procedure laid down in section 25F (b) of the Industrial Disputes Act and the non-payment of the retrenchment compensation provided therein does not make the termination or the retrenchment invalid. The petitioners have been given a proper notice and there is no infirmity on that account.