Shri H.D. Shrma vs Northern India Textile Res.Assn.

Shri H.D. Sharma ….Appellant(s)

VERSUS

Northern India Textile Research Association …Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

1) This appeal is directed against the final

judgment and order dated 06.02.2009 passed by

the High Court of Judicature at Allahabad in Civil

Misc. Writ Petition No.2311/2009 whereby the High

Court allowed the writ petition filed by the

respondent herein and set aside the order of the

Industrial Tribunal.

Signature Not Verified Digitally signed by ANITA MALHOTRA Date: 2018.12.03 17:00:41 IST Reason: 1

2) In order to appreciate the issues involved in

this appeal, which lie in a narrow compass, few

facts need mention hereinbelow.

3) The appellant (workman) was appointed on

26.05.1978 as Duplicating Machine Operator­cum­

Clerk by the respondent­ Northern India Textile

Research Association, Ghaziabad (UP). On

24.04.1987, the appellant was dismissed from

service on five charges of misconduct after holding a

Departmental Enquiry.

4) The respondent (employer) on 27.04.1987

moved an application before the Presiding Officer,

Industrial Tribunal at Meerut under Section 6E (2)

of the UP Industrial Disputes Act, 1947 (hereinafter

referred to as “the Act”) read with Rule 31 (2) of the

Rules (Adj case No. 53/1986) and sought approval

of the dismissal of the appellant. The respondent

contended that they have complied with all

necessary pre­requisites for seeking approval as

2 provided in proviso to sub­Section (2) of Section 6E

of the Act.

5) During the pendency of approval proceedings,

the State Government, on 03.08.1988, also made an

Industrial Reference (31/1988) to the Industrial

Tribunal under Section 4K of the Act for deciding

the legality and correctness of the appellant’s

dismissal order dated 24.04.1987.

6) In the meantime, the appellant (workman) filed

his reply to approval proceedings (53/1986) filed by

the respondent in the Industrial Tribunal. The

appellant opposed the respondent's prayer for grant

of approval essentially on the ground that the

respondent (employer) did not ensure full

compliance with the pre­requisites, which were

necessary for grant of approval to the dismissal

order in terms of proviso to sub­Section (2) of

Section 6E of the Act. The appellant contended that

in terms of proviso to sub­Section (2) of Section 6E 3 of the Act his services could not have been

discharged/dismissed unless he had been paid

“wages for one month”. It was contended that the

respondent though paid the wages for one month,

but did not pay “full wages of one month” to the

appellant.

7) In other words, the grievance of the appellant

was that the respondent was under legal obligation

to pay to the appellant full wages for one month so

as to enable them to obtain approval for his

dismissal as provided in sub­Section (2) of Section

6E of the Act but since there was a short payment

of Rs.110/­ in total monthly wages, the respondent

could not be said to have ensured full compliance

with the proviso to sub­Section (2) of Section 6E of

the Act. It was contended that it is only after the full

compliance with Section 6E is done which is held

mandatory by this Court, the respondent becomes

entitled to claim its benefit else not. It was,

4 therefore, contended that since the respondent

failed to ensure full compliance with Section 6E of

the Act, no approval could be accorded to the

dismissal order as provided under Section 6E of the

Act.

8) The respondent filed rejoinder stating therein

the break up of the appellant’s monthly wages with

a view to show that they had paid full monthly

wages to the appellant as per the terms of

employment along with the dismissal order and,

therefore, there was a full compliance with proviso

to sub­Section (2) of Section 6E of the Act entitling

them to seek approval to the appellant’s dismissal

order.

9) In the meantime, the respondent filed an

application and sought permission of the Industrial

Tribunal to allow them to withdraw their application

which they had filed for obtaining approval to the

dismissal order. According to the respondent, in

5 view of the Industrial Reference No.31/1988 having

already made by the State to the Industrial Tribunal

wherein the legality and correctness of the dismissal

order was being examined, it was not necessary for

them to seek any approval to such dismissal order,

as required under Section 6E of the Act, from the

Industrial Tribunal.

10) By order dated 29.06.1990, the Industrial

Tribunal dismissed the respondent’s aforementioned

application. The respondent felt aggrieved and filed

a writ petition (W.P. No.18679/1990) in the High

Court. By order dated 11.02.1998, the High Court

allowed the writ petition and set aside the order

dated 29.06.1990. It was held that two parallel

proceedings in relation to the same matter cannot

be allowed to be continued. Felt aggrieved, the

appellant (workman) filed SLP(c) No. 8465/1998 in

this Court.

6

11) By order dated 28.03.2000, this Court allowed

the appeal, set aside the order of the High Court

and remanded the case to the High Court. This

Court held that firstly, the scope of proceedings

under the two provisions was entirely different; and

secondly, since the Act provided separate rights,

protection and remedies to the parties for

prosecuting these proceedings, the disposal of one

proceedings would not bring to an end the other.

The High Court was, therefore, requested to decide

the writ petition afresh on merits keeping in view

the observations made.

12) On remand, when the High Court took up the

writ petition for its disposal, the respondent did not

press their withdrawal application in view of the

decision of the Constitution Bench in Jaipur Zila

Sahakari Bhoomi Vikas Bank Ltd. vs. Ram Gopal

Sharma & Ors. (2002) 2 SCC 244 wherein it was

laid down that proviso to Section 33(2)(b) of the

7 Industrial Disputes Act, 1947, which is akin to

Section 6E of the Act, is unambiguous, clear and

equally mandatory in nature for ensuring its

compliance. It was held that if the employer has

failed to ensure compliance with the provisions and

the conditions stated therein, the discharge or

dismissal order passed by the employer would be

void and inoperative.

13) Since Section 6E of the Act is in pari materia

with Section 33(2)(b) of the Industrial Disputes Act,

the interpretation of Section 33 (2)(b) made by this

Court in Jaipur Zila Sahakari Bhoomi Vikas Bank

(supra) will have its full application to Section 6E of

the Act. The writ petition was accordingly dismissed

as having rendered infructuous.

14) The Industrial Tribunal thereafter proceeded to

try the reference on merits. An issue on the

question of compliance with Section 6E (2)(b) of the

Act, as directed by the High Court in the order

8 dated 02.03.2005 passed in W.P.No.13094/2005,

was accordingly framed. Parties adduced their

evidence.

15) So far as the appellant is concerned, he

adduced the evidence to prove that he was paid

total sum of Rs.1103.30 by way of his monthly

wages in terms of proviso to sub­Section (2) of

Section 6E of the Act along with the dismissal order

whereas his actual monthly wages payable was

Rs.1214.40 thereby leaving a deficit of Rs.110/­.

The respondent on their part produced the wages

register to prove the appellant’s actual monthly

wages, its nature and also gave its break up.

16) By order dated 24.07.2008, the Industrial

Tribunal answered the reference in appellant's

favour. It was held that the respondent did not

ensure full compliance with proviso to Section 6E

(2) inasmuch as the respondent failed to pay full

wages of one month to the appellant. In other

9 words, it was held that there was a deficit of

Rs.110/­ in paying monthly wages by the

respondent to the appellant along with the dismissal

order and hence the appellant was held deemed to

be in service as if no dismissal order had been

passed.

17) The respondent felt aggrieved by the order of

the Industrial Tribunal and filed a writ petition in

the High Court out of which this appeal arises. By

impugned order, the High Court allowed the writ

petition and set aside the order of the Industrial

Tribunal. It was held that assuming that there was

a short payment of Rs.110/­ while paying monthly

wages to the appellant, yet since the respondent

had also paid a sum of Rs.1618.30 to him towards

leave encashment in his monthly wages, a sum of

Rs.110/­ could always be adjusted out of

Rs.1618.30. It was accordingly held that in this

way, it can be held that the respondent has ensured

10 full compliance with Section 6E(2) of the Act while

paying monthly wages to the appellant along with

his dismissal order. The High Court, therefore,

accorded sanction to the respondent as required

under Section 6E(2) of the Act and upheld the

dismissal order as being legal.

18) The workman (appellant herein) felt aggrieved

and has filed the present appeal by way of special

leave in this Court.

19) Three questions arise for consideration in this

appeal. First, whether the High Court was justified

in allowing the respondent's writ petition and

thereby was justified in setting aside the order of

the Industrial Tribunal; Second, whether an isolated

payment of Rs.110/­ made by the employer

(respondent) to the employee (appellant) by way of

interim relief (ex gratia) in August 1986 in monthly

wages can be regarded as wages under Section 2(y)

read with Section 6E(2) of the Act or in other words,

11 whether such payment is a part of the appellant’s

monthly wages; and third whether the respondent

can be held to have paid wages for one month to the

appellant in compliance with the requirements of

Section 6E (2) of the Act so as to enable them to

claim sanction to the appellant’s dismissal order.

20) Heard Mr. Sanjay Parikh, learned counsel for

the appellant and Mr. Jitendra Mohan Sharma,

learned senior counsel for the respondent.

21) Having heard the learned counsel for the

parties at length and on perusal of the record of the

case, we are inclined to uphold the conclusion

arrived at by the High Court but we do so on our

reasoning given hereinbelow. In other words, though

we uphold the conclusion arrived at by the High

Court, but not the reasoning of the High Court.

This we say for the following reasons.

22) In our view, the respondent’s application made

under Section 6E(2) of the Act deserves to be

12 allowed by granting them approval to the appellant’s

dismissal.

23) Section 2 (y) and Section 6E (2) of the Act are

relevant. They are quoted below:

“Section 2(y)

‘Wages’ means all remuneration capable of being expressed in terms of money, which would, if the terms of employment, expressed or implied, were fulfilled, be payable to a workman in respect of his employment, or of work done in such employment, and includes:­

(i) such allowances (including dearness allowance) as the workman is for the time being entitled to;

(ii) the value of any house accommodation, or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of foodgrains or other articles;

(iii) any traveling concession, but does not include­

(a) any bonus;

(b) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the workman under any law for the time being in force;

13 (c) any gratuity payable on the termination of his service.

Section 6E

Conditions of service, etc. to remain unchanged in certain circumstances during the pendency of proceedings –

(1) ……………….

(2) During the pendency of any such proceeding in respect of an industrial dispute, the employer may, in accordance with the standing orders applicable to a workman concerned in such dispute­

(a)………………

(b) for any misconduct not connected with the dispute, discharge or punish, whether by dismissal or otherwise;

Provided that no such workman shall be discharged or dismissed, unless he has been paid wages for one month and an application has been made by the employer to the authority before which the proceeding is pending for approval of the action taken by the employer.” (emphasis supplied)

24) Section 2(y) defines the term ‘wages’ whereas

Section 6E provides that condition of service of a

workman has to remain unchanged in certain

14 circumstances. Proviso to Section 6E(2) says that no

workman can be discharged or dismissed from the

services unless he has been paid wages for one

month and an application is made by an employee

to an authority before whom the proceedings are

pending for approval of the action taken by the

employer against the workman.

25) Coming to the facts of this case, to answer

these three questions posed above, we find that the

appellant has relied on the break up of his monthly

wages. It is this amount which, according to the

appellant, should have been paid to him by the

respondent as a pre­condition to give effect to his

dismissal order. The break up reads as under :

Basic Salary Rs.

334.00 F.D.A Rs.

108.00 F.D.A Rs.

62.00 A.D.A Rs.

494.35

15 Interim Relief Rs.

110.00 H.R.A. Rs.

75.60 C.C.A. Rs.

30.45 Rs.1214.

40

26) So far as the respondent is concerned, they

relied on the details of the appellant’s monthly

wages payable/paid to him at the time of his

dismissal in full and final satisfaction. It reads as

under:

1. Salary for April from 1.4.87 to 27.4.89 4 days under LWP suspension 926.70

2. Increments from 25.11.86 to 31.3.87 67.90 994.60

Less:PF/EPF deduction 73.00

3. Leave encashment for 44 days 1618.30

4. One months notice pay as per provision of UP Industrial Disputes Act Section 6E(2)(b) 1103.40 3643.30

16

27) According to the appellant, there was a short

payment of Rs.110/­ because he was paid

Rs.1103.40 whereas his monthly wages was

Rs.1214.40.

28) The stand of the respondent was that there

was no short payment because a sum of Rs.110/­

was paid to the appellant only once in August 1986

by way of ex gratia in the form of “interim relief”.

This sum, i.e., (Rs110/­), according to the

respondent, was thereafter never paid to the

appellant after August, 1986 till 24.04.1987 (date of

dismissal order). It is for this reason, the

respondent contended that a sum of Rs.110/­ is

neither a wage and nor its component and nor the

appellant has any right in law to claim such amount

under the terms of his employment from the

respondent.

29) What types of payment would constitute a

wage or its component within the meaning of the

17 word “wages” as defined under Section 2 (rr) of the

Industrial Disputes Act has been the subject matter

of several decisions of this Court. The word “wages”

defined in Section 2(y) of the Act is in peri materia

with the definition of word “wages” defined in

Section 2(rr) of the Industrial Disputes Act.

30) A question arose before the Three Judge Bench

in the case of Bharat Electronics Limited vs.

Industrial Tribunal, Karnataka, Bangalore & Anr.

(1990) 2 SCC 314 as to whether “night shift

allowance” would form part of “wages” in the context

of Section 33 (2) (b) of the Industrial Disputes Act,

1947.

31) Justice M.M. Punchhi (as His Lordship then

was and later CJI) speaking for the Bench examined

the object of Section 33(2)(b) of the Industrial

Disputes Act. After referring to earlier decision of

this Court in Syndicate Bank Limited vs.

Ramanath (1968) 1 SCR 327, it was held that the

18 intention of the legislature in providing for such a

contingency is not far to seek. It was held that the

section was enacted “to soften the rigour of

unemployment that will face the workman against

whom an order of discharge or dismissal has been

passed”. This Court held that one month's wages as

thought and provided to be given are conceptually

for the month to follow, the month of unemployment

and in the context wages for the month following

the date of dismissal and not a repetitive wage of

the month previous to the date of dismissal. This

Court further held that if the converse is read in the

context of the proviso to Section 33(2)(b), it

inevitable would have to be read as double the

wages as earned in the month previous to the date

of dismissal and that would, in our view, be reading

in the provision something which is not there, either

expressly or impliedly. This Court held that we have

to blend the contextual interpretation with the

19 conceptual interpretation to come to the view that

night shift allowance could never be part of wages,

and those would be due only in the event of

working. It was held that the conclusion is

inescapable that the workman had to earn night

shift allowance by actually working in the night shift

and his claim to that allowance was contingent

upon his reporting to duty and being put to that

shift. It was held that the night shift allowance

automatically did not form part of his wages and it

was not such an allowance which flowed to him as

his entitlement not restricted to his service.

32) Now coming to the facts of this case, we find

that it has come in evidence that the respondent

had paid Rs.110/­ to the appellant in August 1986

by way of “interim relief” as an ex gratia payment. It

is not in dispute that a sum of Rs.110/­ was paid

only once in August 1986 and not thereafter.

20

33) In our opinion, such payment cannot be

termed either as wages or its component within the

meaning of Section 2 (y) read with Section 6E (2) of

the Act.

34) The reason is that any isolated one time ex

gratia payment made by way of an interim relief

neither satisfies the requirement of Section 2 (y) and

nor it satisfies the requirement of clauses (i) to ( iii )

of Section 2 (y) of the Act.

35) If such amount had been paid regularly by the

respondent to the appellant in compliance with his

terms of employment, it would have been regarded

as wages or its component within the meaning of

Section 2(y) of the Act. In order that any payment is

regarded as “wages”, it must be proved that it was

being paid by the employer to his employee

21 pursuant to the terms of his employment. It is only

then a right is created in employee’s favour to claim

such amount from the employer provided the

employee proves that he has fulfilled the terms of

his employment.

36) A question arose before the Two Judge Bench

in Ghaziabad Zila Sahkari Bank Ltd. vs.

Additional Labour Commissioner & Ors. (2007) 11

SCC 756 as to whether any ex gratia payment made

to the employee by the Bank would be regarded as

Bonus (production, incentive or customary). This

Court held that it was not. It was held that it is not

possible to employ a term of service on the basis of

employment contract. It was held that the payment

made as ex gratia was neither in the nature of

production bonus nor incentive bonus nor

customary bonus and nor any statutory bonus. It

cannot be regarded as part of the contract

“employment”. It was accordingly held that the ex

22 gratia payment made by the Bank cannot be

regarded as remuneration paid or payable to the

employees in fulfillment of the terms of the contract

of employment within the meaning of definition of

wage under Section 2 (rr) of the ID Act.

37) We are, therefore, of the considered opinion

that the respondent rightly paid Rs.1103.40 to the

appellant by way of his wages for one month along

with his dismissal order. Such payment, in our

view, was made strictly in accordance with the

requirements of Section 2(y) read with Section 6E

(2) of the Act. On the other hand, we find that the

appellant failed to adduce any evidence to prove

that Rs.110/­ was being paid to him every month by

the respondent as a part of his term of the

employment and, if so, under which head.

38) In view of the foregoing discussion, we are of

the view that the High Court was not justified in

holding that such amount, even if, held to be the

23 wages, the same could be adjustable against the

payments made by the respondent under other

head in the appellant’s monthly wages. The High

Court, in our view, failed to examine the main

question as to whether a payment of Rs.110/­ was

in the nature of “wages” or its component within the

meaning of Section 2(y) of the Act. Without deciding

this question, the High Court held that such

amount could be adjusted against the payment

made by the employer (respondent) to the appellant

under “leave encashment”. In our opinion, it was

not the correct approach.

39) In the light of afore­mentioned reasons, though

we uphold the conclusion of the High Court but do

not agree to the reasoning on which such

conclusion is based.

24

40) In view of the foregoing discussion, we find no

merit in this appeal. It thus fails and is accordingly

dismissed.

………...................................J. [ABHAY MANOHAR SAPRE] …...……..................................J. [INDU MALHOTRA]

New Delhi;

December 03, 2018

25