SRI DORAIRAJ SPINTEX versus R CHITTIBABU & ORS on 22 September 2021

[2021] 12 S.C.R. 475

SRI DORAIRAJ SPINTEX

v.

R CHITTIBABU & ORS

(Civil Appeal No 5897 of 2021)

SEPTEMBER 22, 2021

[DR. DHANANJAYA Y CHANDRACHUD, VIKRAM NATHAND B. V. NAGARATHNA, JJ.]

Industrial Disputes Act, 1947: s.33: Dismissal of workmenduring pendency of Conciliation Proceedings – On 4 July 2002,workmen raised industrial dispute under s.2(k) – Dispute was takeninto conciliation and proceedings were pending – Thereafter,workmen commenced a stay-in strike on 31 July 2002 – On 1 August2002, another dispute raised by the workmen which was also takeninto conciliation – Appellant-management initially suspended fewworkmen – Thereafter, domestic enquiry was commenced whichresulted into dismissal of workmen – Following the order of dismissal,management filed an application for approval of its action ofdismissal before the Assistant Commissioner of Labour unders.33(2)(b) of the ID Act – The Assistant Commissioner rejected theapplication for approval of dismissal on the ground that a priorapproval was necessary under s.33(1)(b) before the terminationand that the action of management in taking steps in pursuance ofs.33(2)(b) was unlawful – High Court upheld the said order – Onappeal, held: s.33 imposes a ban on the employer discharging,dismissing or punishing a workman during the pendency ofconciliation proceedings and other specified authorities – However,s.33(1)(b) provides that employer may dismiss workmen with theexpress permission in writing of the authority before which theproceeding is pending in regard to “any matter connected with thedispute” – s.33(2)(b) deals with the power of employer to dismissworkmen in regard to “matter which is not connected with thedispute” – In the instant case, in the first conciliation proceeding,the demand of workmen was for promotional avenues, the paymentof monthly salary before the seventh day of each month, drinkingwater and protective clothing – In the second conciliationproceedings, the workmen had claimed the status of permanency –The disciplinary enquiry was held in respect of the acts of misconduct

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Aalleged to have been committed by the workmen involving theproperty of the employer – These dismissal for misconduct cannotbe regarded as being connected to the dispute which was raised inconciliation – Hence, the provisions of s.33(2)(b) of the ID Act wouldstand attracted – In this view of the matter, the order of the AssistantCommissioner was contrary to law.B

Disposing of the appeal, the Court

HELD : 1.1 The basic premise underlying Section 33(1) isthat during the pendency of the conciliation proceedings beforea Conciliation Officer or a Board or of any proceeding before anCarbitrator or a Labour Court or Tribunal or National Tribunal inrespect of an industrial dispute, an employer is prohibited from(a) altering the conditions of service of the workmen; or (b)dismissing, discharging or punishing the workmen in respect ofany matter or misconduct connected with the dispute save withthe express permission in writing of the authority before whichDthe proceeding is pending. Both in the context of clause (a) aswell as clause (b) of sub-Section (1), the crucial words are“connected with the dispute”. Clause (a) of sub-Section (1) dealswith an alteration of the conditions of service in regard to anymatter connected with the dispute. Clause (b) deals with dischargeEor punishment, whether by way of dismissal or otherwise, of aworkman for any misconduct connected with the dispute. Wherethe connection with the dispute exists, Section 33(1) requiresthe prior permission in writing of the authority before whom aproceeding is pending. [Para 9][482-H; 483-A-C]

F1.2 On the other hand, Section 33(2) applies to (i) analteration of the conditions of service in regard to a matter notconnected with the dispute; or (ii) the discharge or punishment,whether by way of dismissal or otherwise, of a workman formisconduct which is not connected with the dispute. Thedistinction between sub-Section (1) and sub-Section (2) lies inGwhether the action which is proposed by the employer during thependency of a conciliation proceeding is or is not connected withthe dispute. Whether the action is connected to the dispute hasto be determined on the basis of the facts of each case. [Para 10][483-D-E]H

2. When the ID Act was enacted, Section 33 imposed a banon the employer discharging, dismissing or punishing a workmanduring the pendency of proceedings before the Tribunal and otherspecified authorities “except for misconduct not connected withthe dispute”. By Amending Act 48 of 1950, Section 33 wassubstituted and a complete ban was imposed against discharge,dismissal or punishment of a workman during the pendency ofproceedings before the Court and other specified authorities.The right of the employer to take action even for misconductwas withdrawn. Parliament being conscious of the need fordiscipline in industry amended the provision by substitutingSection 33 by Act 36 of 1956 so as to restore to the employer theright to take punitive action in specified conditions. Where thetermination for misconduct is not connected to the industrialdispute, Section 33(2)(b) recognizes the authority of the employerto initiate disciplinary action while at the same time imposingsafeguards. They are intended to balance the disciplinaryjurisdiction of the employer with the need to ensure that there isno victimization of the workmen. [Para 11][483-E-G; 485-B]

3. In the present case, the order of the AssistantCommissioner of Labour takes note of the fact that initially adispute was raised on 4 July 2002 by the workmen under Section2(k) The demand was received in the office of the ConciliationOfficer and conciliation proceedings were in progress. The Unioncommenced a stay-in strike. Another dispute was raised on 1August 2002 for the grant of permanency to the workmen in thefactory and the conciliation proceedings were initiated on thedemand. The management convened the disciplinary proceedingon the ground that the workmen had indulged in acts of vandalisminvolving the property of the employer. The misconduct for whichthe enquiry was convened had no connect with the demands bythe workmen. In the first of the two conciliation proceedings, thedemand of the workmen was for promotional avenues, thepayment of monthly salary before the seventh day of each month,drinking water and protective clothing. In the second conciliationproceedings, the workmen had claimed the status of permanency.The disciplinary enquiry was held in respect of the acts ofmisconduct alleged to have been committed by the workmen AB

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Ainvolving the property of the employer. These dismissal formisconduct cannot be regarded as being connected to the disputewhich was raised in conciliation, as noted above. The AssistantCommissioner came to the conclusion that the enquiry wasconducted in accordance with the principles of natural justice andentered a finding of fact that there was no evidence to indicateBthat some of the workmen were protected workmen. TheAssistant Commissioner also held that on 2 August 2002, a lawand order problem had arisen as a result of which the managementhad initiated disciplinary proceedings. Nonetheless, the AssistantCommissioner of Labour came to the conclusion that onceCconciliation proceedings were initiated, prior approval underSection 33(1)(b) was necessary and this finding has beenconfirmed both by the Single Judge and the Division Bench ofthe High Court. In entering this finding, all the three fora haveclearly lost sight of the distinction between sub-Section (1) andsub-Section (2) of Section 33 of the ID Act. The Single JudgeDnoticed that the dismissal was for some other reason, yet heldthat Section 33 (1)(b) was attracted. There has been noindependent application of mind by the Division Bench at all. Onceit is held that the action of dismissal for misconduct was notconnected with the dispute which was pending in conciliation,Ethe provisions of Section 33(2)(b) of the ID Act would standattracted. There is no dispute about the fact that there wascompliance of the provisions of Section 33(2)(b), nor is there afinding to the contrary. In this view of the matter, the order of theAssistant Commissioner was contrary to law and there was anerror on the part of the Single Judge and the Division Bench inFaffirming the order. [Paras 12, 13, 14][485-C-G; 486-A-G]

Strawboard Manufacturing Company Ltd. v. Govind[1962] Supp 3 SCR 618, Jaipur Zila Sahakari BhoomiVikas Bank Ltd v. Ram Gopal Sharma and Ors. AIR2002 SC 643 : [2002] 1 SCR 284. Chartered Bank,GBombay v. Chartered Bank Employees’ Union [1960] 3SCR 441; Tata Oil Mills Co. Ltd v. Workmen [1964] 7SCR 555; PD Sharma v. State Bank of India [1968] 3SCR 91; Air India Corporation v. Rebellow (1972) 1SCC 814 : [1972] 3 SCR 606; Workmen of Sudder H

Office, Cinnamara v. Management of Sudder Office(1972) 4 SCC 746; Mahendra Singh Dhantwal v.Hindustan Motors Ltd. (1976) 4 SCC 606 : [1976]Suppl. SCR 635 – referred to.

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CIVIL APPELLATE JURISDICTION : Civil Appeal No.5897of 2021.

From the Judgment and Order dated 14.03.2018 of the High Courtof Judicature at Madras in W.A. No.1292 of 2013.

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Niraj Kumar Singh, Satyajeet Kumar, Advs. for the Appellant.

T. Harish Kumar, Navneet Dugar, Shubham Kothari, Advs. forthe Respondents.

The Judgment of the Court was delivered by DR. DHANANJAYA Y CHANDRACHUD, J.

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1. Leave granted.

2. The appeal arises from a judgment of a Division Bench of theHigh Court of Judicature at Madras dated 14 March 2018. The HighCourt dismissed the Letters Patent Appeal filed by the managementagainst a judgment of a Single Judge.The Single Judge had upheld anorderdated 31 March 2003 of the Assistant Commissioner of Labour, Dindigul,rejecting an application filed by the management under Section 33(2)(b)of the Industrial Disputes Act 1947[1]. The management is in appeal.

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A3. The appellanthad an establishment which was functioning inDindigul District.An application was filed by the appellant on 16November 2002 before the Assistant Commissioner of Labour underSection 33(2)(b) of the ID Act for the grant of approval of its action todismiss thirty-one workmen against whom disciplinary proceedings hadbeen initiated and concluded. The material facts which need to beBsummarized for the purpose of the present appeal are thus: On 4 July2002, the workmen raised an industrial dispute under Section 2(k) of theID Act.The dispute was taken into conciliation. While the conciliationproceedings were pending, the workers commenced a stay-in strike on31 July 2002. On 1 August 2002, another dispute was raised by theCworkmen,which was taken into conciliation.The management initiallysuspended forty-seven workmen. A charge memo was issued to theworkmen on 20 August 2002 to which there was a reply on 30 August2002. The management commenced a domestic enquiry.After theconclusion of the enquiry, a show cause notice was issued to the workmenon 29 October 2002. On 16 November 2002, an order of dismissal wasDissued. Following the order of dismissal, the management filed anapplication for approval before the Assistant Commissioner of Labourunder Section 33(2)(b).

4. The Assistant Commissioner of Labour held that sinceconciliation proceedings were pending with reference to a dispute whichEwas raised by the workmen on 4 July 2002 and, subsequently, on 1 August2002, prior approval before the termination was necessary under Section33(1)(b) and that the action of management in taking steps in pursuanceof Section 33(2)(b) was unlawful. The application for approval underSection 33(2)(b) was rejected.The order of the Assistant CommissionerFof Labour was challenged in writ proceedings before the High Court.Bya judgment dated 4 March 2013, the Single Judge held that sinceconciliation proceedings were pending before the Conciliation Officer,“even though the dismissal order is for some other reason”, yet the priorapproval of the authority specified in terms of Section 33(1)(b) was necessary. The order of the Single Judge was carried in appeal beforeGthe Division Bench.The Division Bench,while affirming the judgment,directed the appellant to pay (i) 50% of the back wages for the periodfrom the date of dismissal till the date of the closure of the appellant’sunit; (ii) closure compensation; and (iii) interest at 6% per annumcalculated from the date of closure. The appellant has closed its unitHfrom 8 July 2009.

5. Mr Niraj Kumar Singh, counsel appearing on behalf of theappellant, submits that the Assistant Commissioner of Labourfailed tonotice the distinction between Section 33(1)(b), which postulates arequirement of prior approval, and Section 33(2)(b), on the other hand,which requires compliance with two conditions, namely, (i) payment ofone month’s salary, which is not in dispute; and (ii) the filing of anapplication to the authority before which the proceeding is pending forapproval of the action taken by the employer.Counsel submitted that theprovisions of Section 33(1)(b) are attracted when the action of themanagement is in respect of any misconduct connected with thedispute.On the other hand, where the action of the management is formisconduct not connected with the dispute, Section 33(2)(b) would standattracted. On the above premises, it has been urged thatthe AssistantCommissioner of Labour erred in rejecting the application for approvalon the ground that prior approval under Section 33(1)(b) was required.

6. On the other hand, Mr T Harish Kumar, counsel appearing onbehalf of the respondent – workmen, submitted that, by an order dated10 February 2020 passed by the Chamber Judge in these proceedings,the appeal stands dismissed as against Respondent Nos 10, 22, 26 and31, who had died during the pendency of the proceedings before theHigh Court for failure to bring the legal representatives on the record.Besides this, it has been submitted that the workmen had raised anindustrial dispute initially on 4 July 2020 which was taken into conciliationand, thereafter, another industrial dispute was raised on 1 August 2020in respect of which conciliation proceedings were in progress. Hence, ithas been submitted that on a holistic view of the provisions of Section33(1)(b), the termination of the workmen for misconduct is a matterwhich must be held to be connected with the dispute. Hence, it wassubmitted that the provisions of Section 33(1)(b) and not Section33(2)(b)would stand attracted.In the absence of prior approval, thetermination was, according to the counsel, unlawful and the AssistantCommissioner of Labour was correct in rejecting the application.

7. The rival submissions fall for consideration.

8. Sections 33(1) and 33(2), upon which the dispute in the presentcase turns, are extracted below for convenience of reference:

“33.Conditions of service, etc., to remain unchanged undercertain circumstances during pendency of proceedings.- AB

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(1) During the pendency of any conciliation proceedingbefore a conciliation officer or a Board or of any proceedingbefore an arbitrator or a Labour Court or Tribunal or NationalTribunal in respect of an industrial dispute, no employershall,—

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(a) in regard to any matter connected with the dispute, alter,to the prejudice of the workmen concerned in such dispute,the conditions of service applicable to them immediatelybefore the commencement of such proceeding; or B

(b) for any misconduct connected with the dispute,discharge or punish, whether by dismissal or otherwise, anyworkmen concerned in such dispute, C

save with the express permission in writing of the authoritybefore which the proceeding is pending.

(2) During the pendency of any such proceeding in respectof an industrial dispute, the employer may, in accordancewith the standing orders applicable to a workman concernedin such dispute or, where there are no such standing orders,in accordance with the terms of the contract, whetherexpress or implied, between him and the workman - D

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(a) alter, in regard to any matter not connected with thedispute, the conditions of service applicable to that workmanimmediately before the commencement of such proceeding;or (b) for any misconduct not connected with the dispute, ordischarge or punish, whether by dismissal or otherwise, thatworkman:

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Provided that no such workman shall be discharged ordismissed, unless he has been paid wages for one monthand an application has been made by the employer to theauthority before which the proceeding is pending forapproval of the action taken by the employer….”

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9. The basic premise underlying Section 33(1) is that during thependency of the conciliation proceedings before a Conciliation Officeror a Board or of any proceeding before an arbitrator or a Labour CourtHor Tribunal or National Tribunal in respect of an industrial dispute, an

employer is prohibited from (a) altering the conditions of service of theworkmen; or (b) dismissing, discharging or punishing the workmen inrespect of any matter or misconduct connected with the dispute savewith the express permission in writing of the authority before which theproceeding is pending. Both in the context of clause (a) as well as clause(b) of sub-Section (1), the crucial words are “connected with the dispute”.Clause (a) of sub-Section (1) deals with an alteration of the conditionsof service in regard to any matter connected with the dispute.Clause (b)deals with discharge or punishment, whether by way of dismissal orotherwise, of a workman for any misconduct connected with the dispute.Where the connection with the dispute exists, Section 33(1)requires theprior permission in writing of the authority before whom a proceeding ispending.

10. On the other hand, Section 33(2) applies to (i) an alteration ofthe conditions of service in regard to a matter not connected with thedispute; or (ii) the discharge or punishment, whether by way of dismissalor otherwise, of a workman for misconduct which is not connected withthe dispute. The distinction between sub-Section (1) and sub-Section (2)lies in whether the action which is proposed by the employer during thependency of a conciliation proceeding is or is not connected with thedispute.Whether the action is connected to the dispute has to bedetermined on the basis of the facts of each case.

11. When the ID Act was enacted, Section 33 imposed a ban onthe employer discharging, dismissing or punishing a workman during thependency of proceedings before the Tribunal and other specified authorities“except for misconduct not connected with the dispute”. By AmendingAct 48 of 1950, Section33 was substituted and a complete ban wasimposed against discharge, dismissal or punishment of a workman duringthe pendency of proceedings before the Court and other specifiedauthorities. The right of the employer to take action even for misconductwas withdrawn. Parliament being conscious of the need for discipline inindustry amended the provision by substituting Section 33 by Act 36 of1956 so as to restore to the employer the right to take punitive action inspecified conditions. The impact of the legislative change was noticed ina judgment of three judges of this Court in Strawboard ManufacturingCompany Ltd. v.Govind[2], Justice KN Wanchoo, speaking for the threejudge Bench observed :

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A“3. Before however we turn to the interpretation of the provisowe may refer to the circumstances in which Section 33(2) cameto be enacted. Originally there was no such provision like Section33(2) in the Act and the only provision to be found thereincorresponded to the present Section 33(1). The object behindenacting Section 33 as it was before the amendment of 1956 wasBto allow continuance of industrial proceedings pending before anyauthority prescribed by the Act in a calm and peaceful atmosphereundisturbed by any other industrial dispute. The plain object of thesection was to maintain the status quo as far as possible duringthe pendency of any industrial dispute before a tribunal. But itCseems to have been felt that Section 33, as it stood before theamendment of 1956, was too stringent for it completely took awaythe right of the employer to make any alteration in the conditionsof service or to make any order of discharge or dismissal withoutmaking any distinction as to whether such alteration or such anorder of discharge or dismissal was in any manner connectedDwith the dispute pending before an industrial authority. It seems tohave been felt therefore that the stringency of the provision shouldbe softened and the employer should be permitted to make changesin conditions of service etc. which were not connected with thedispute pending before an Industrial Tribunal. For the same reasonit was felt that the authority of the employer to dismiss or dischargeEa workman should not be completely taken away where thedismissal or discharge was dependent on matters unconnectedwith the dispute pending before any tribunal. At the same time itseems to have been felt that some safeguards should be providedfor a workman who may be discharged or dismissed during theFpendency of a dispute on account of some matter unconnectedwith the dispute. Consequently Section 33 was redrafted in 1956and considerably expanded. It is now in five sub-sections whilebefore 1956 it consisted practically of what is now sub-section(1).”

This decision was also confirmed by a Constitution Bench of thisGCourt in Jaipur Zila Sahakari Bhoomi Vikas Bank Ltd v. Ram GopalSharma and Ors.[3].These provisions have been interpreted in severaldecisions of this Court including Chartered Bank, Bombay v.Chartered Bank Employees’ Union[4]; Tata Oil Mills Co. Ltd v.

3AIR 2002 SC 643H4 (1960) 3 SCR 441

Workmen[5]; PD Sharma v. State Bank of India[6]; Air IndiaCorporation v. Rebellow[7]; Workmen of Sudder Office, Cinnamarav. Management of Sudder Office[8]; and Mahendra Singh Dhantwalv. Hindustan Motors Ltd[9].Where the termination for misconduct isnot connected to the industrial dispute, Section 33(2)(b) recognizes theauthority of the employer to initiate disciplinary action while at the sametime imposing safeguards. They are intended to balance the disciplinaryjurisdiction of the employer with the need to ensure that there is novictimization of the workmen.

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12. In the present case, the order of the Assistant Commissionerof Labour takes note of the fact that initially a dispute was raised on 4July 2002 by the workmen under Section 2(k) based on the followingdemands:

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“1.Passed (sic) on seniority in the spoiling unit, the workmenshould be posted as sider and arya lifters

2. The monthly salary for the workmen working in the factoryDshould be paid before 7[th] of the month

3. The workmen working in the factory shall be given hygienicdrinking water

4. The women workmen working in the factory should be giventwo protective clothes to protect from the accident in everyEyear.”

13. The demand was received in the office of the ConciliationOfficer and conciliation proceedings were in progress. The Unioncommenced a stay-in strike. Another dispute was raised on 1 August2002 for the grant of permanency to the workmen in the factory and theconciliation proceedings were initiated on the demand.The managementconvened the disciplinary proceeding on the ground that the workmenhad indulged in acts of vandalism involving the property of the employer.The disciplinary proceedings were convened for acts of vandalisminvolving the property of the employer. The misconduct for which theenquiry was convened had no connect with the demands by the workmen.

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5 (1964) 7 SCR 5556 (1968) 3 SCR 917 (1972) 1 SCC 8148 (1972) 4 SCC 7469 (1976) 4 SCC 606

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AIn the first of the two conciliation proceedings, the demand of theworkmen was for promotional avenues, the payment of monthly salarybefore the seventh day of each month, drinking water and protectiveclothing. In the second conciliation proceedings, the workmen had claimedthe status of permanency. The disciplinary enquiry was held in respectof the acts of misconduct alleged to have been committed by the workmenBinvolving the property of the employer.These dismissal for misconductcannot be regarded as being connected to the dispute which was raisedin conciliation,as noted above. The Assistant Commissioner of Labourcame to the conclusion that the enquiry was conducted in accordancewith the principles of natural justice and entered a finding of fact thatCthere was no evidence to indicate that some of the workmen wereprotected workmen. The Assistant Commissioner of Labour also heldthat on 2 August 2002, a law and order problem had arisen as a result ofwhich the management had initiated disciplinary proceedings.Nonetheless, the Assistant Commissionerof Labour came to theconclusion that onceconciliation proceedings were initiated, prior approvalDunder Section 33(1)(b) was necessary and this finding has been confirmedboth by the Single Judge and the Division Bench of the High Court. Inentering this finding, all the three fora have clearly lost sight of thedistinction between sub-Section (1) and sub-Section (2) of Section 33 ofthe ID Act. The Single Judge noticed that the dismissal was for someEother reason, yet held that Section 33 (1)(b) was attracted.There hasbeen no independent application of mind by the Division Bench at all.

14. Once we have come to the conclusion that the action of dismissalfor misconduct was not connected with the dispute which was pendingin conciliation, the provisions of Section 33(2)(b) of the ID Act would Fstand attracted. There is no dispute about the fact that there wascompliance of the provisions of Section 33(2)(b), nor is there a finding tothe contrary. In this view of the matter, the order of the AssistantCommissioner of Labour was contrary to law and there was an error onthe part of the Single Judge and the Division Bench in affirming theorder.We accordingly allow the appeal and set aside the impugnedGjudgment and order of the Division Bench of the High Court of Judicatureat Madras dated 14 March 2018.In consequence, the application forapproval filed by the appellant under Section 33(2)(b) of the ID Actwould stand approved.

15. Since the appeal stands rejected against Respondent Nos 10,H22, 26 and 31 in pursuance of the order of the Chamber Judge dated 10

February 2020, we clarify that this order shall not affect the entitlementof the legal representatives of the deceased – workmen to the benefitswhich flow in accordance with law.

16. There shall be no order as to costs.

17. Pending application, if any, stands disposed of.

Devika Gujral

Appeal disposed of.

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