SHRI H.D. SHARMA versus NORTHERN INDIA TEXTILE RESEARCH ASSOCIATION on 3 December 2018

1. This appeal is directed against the final judgment and orderdated 06.02.2009 passed by the High Court of Judicature at Allahabadin Civil Misc. Writ Petition No.2311/2009 whereby the High Court allowedthe writ petition filed by the respondent herein and set aside the order ofthe Industrial Tribunal.

2. In order to appreciate the issues involved in this appeal, whichlie in a narrow compass, few facts need mention hereinbelow.

3. The appellant (workman) was appointed on 26.05.1978 asDuplicating Machine Operator-cum-Clerk by the respondent- NorthernIndia Textile Research Association, Ghaziabad (UP). On 24.04.1987,the appellant was dismissed from service on five charges of misconductafter holding a Departmental Enquiry.

4. The respondent (employer) on 27.04.1987 moved an applicationbefore the Presiding Officer, Industrial Tribunal at Meerut under Section6E (2) of the UP Industrial Disputes Act, 1947 (hereinafter referred toas “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 respondentcontended that they have complied with all necessary pre-requisites forseeking approval as provided in proviso to sub-Section (2) of Section 6Eof the Act.

5. During the pendency of approval proceedings, the StateGovernment, on 03.08.1988, also made an Industrial Reference (31/1988)to the Industrial Tribunal under Section 4K of the Act for deciding thelegality and correctness of the appellant’s dismissal order dated24.04.1987.

6. In the meantime, the appellant (workman) filed his reply toapproval proceedings (53/1986) filed by the respondent in the IndustrialTribunal. The appellant opposed the respondent’s prayer for grant ofapproval essentially on the ground that the respondent (employer) didnot ensure full compliance with the pre-requisites, which were necessaryfor grant of approval to the dismissal order in terms of proviso to sub-Section (2) of Section 6E of the Act. The appellant contended that interms of proviso to sub-Section (2) of Section 6E of the Act his servicescould not have been discharged/dismissed unless he had been paid “wages A

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Afor one month”. It was contended that the respondent though paid thewages for one month, but did not pay “full wages of one month” to theappellant.

7. In other words, the grievance of the appellant was that therespondent was under legal obligation to pay to the appellant full wagesBfor one month so as to enable them to obtain approval for his dismissalas provided in sub-Section (2) of Section 6E of the Act but since therewas a short payment of Rs.110/- in total monthly wages, the respondentcould not be said to have ensured full compliance with the proviso tosub-Section (2) of Section 6E of the Act. It was contended that it is onlyafter the full compliance with Section 6E is done which is held mandatoryCby this Court, the respondent becomes entitled to claim its benefit elsenot. It was, therefore, contended that since the respondent failed to ensurefull compliance with Section 6E of the Act, no approval could be accordedto the dismissal order as provided under Section 6E of the Act.

8. The respondent filed rejoinder stating therein the break up ofDthe appellant’s monthly wages with a view to show that they had paidfull monthly wages to the appellant as per the terms of employmentalong with the dismissal order and, therefore, there was a full compliancewith proviso to sub-Section (2) of Section 6E of the Act entitling them toseek approval to the appellant’s dismissal order.E9. In the meantime, the respondent filed an application and soughtpermission of the Industrial Tribunal to allow them to withdraw theirapplication which they had filed for obtaining approval to the dismissalorder. According to the respondent, in view of the Industrial ReferenceNo.31/1988 having already made by the State to the Industrial TribunalFwherein the legality and correctness of the dismissal order was beingexamined, it was not necessary for them to seek any approval to suchdismissal order, as required under Section 6E of the Act, from theIndustrial Tribunal.

10. By order dated 29.06.1990, the Industrial Tribunal dismissedGthe respondent’s aforementioned application. The respondent feltaggrieved and filed a writ petition (W.P. No.18679/1990) in the HighCourt. By order dated 11.02.1998, the High Court allowed the writpetition and set aside the order dated 29.06.1990. It was held that twoparallel proceedings in relation to the same matter cannot be allowed tobe continued. Felt aggrieved, the appellant (workman) filed SLP(c) No.H8465/1998 in this Court.

11. By order dated 28.03.2000, this Court allowed the appeal, setaside the order of the High Court and remanded the case to the HighCourt. This Court held that firstly, the scope of proceedings under thetwo provisions was entirely different; and secondly, since the Act providedseparate rights, protection and remedies to the parties for prosecutingthese proceedings, the disposal of one proceedings would not bring to anend the other. The High Court was, therefore, requested to decide thewrit petition afresh on merits keeping in view the observations made.

12. On remand, when the High Court took up the writ petition forits disposal, the respondent did not press their withdrawal application inview of the decision of the Constitution Bench in Jaipur Zila SahakariBhoomi Vikas Bank Ltd. vs. Ram Gopal Sharma & Ors. (2002) 2SCC 244 wherein it was laid down that proviso to Section 33(2)(b) ofthe Industrial Disputes Act, 1947, which is akin to Section 6E of theAct, is unambiguous, clear and equally mandatory in nature for ensuringits compliance. It was held that if the employer has failed to ensurecompliance with the provisions and the conditions stated therein, thedischarge or dismissal order passed by the employer would be void andinoperative.

13. Since Section 6E of the Act is in pari materia with Section33(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 writpetition was accordingly dismissed as having rendered infructuous.

14. The Industrial Tribunal thereafter proceeded to try the referenceon 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 dated02.03.2005 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 evidenceto prove that he was paid total sum of Rs.1103.30 by way of his monthlywages in terms of proviso to sub-Section (2) of Section 6E of the Actalong with the dismissal order whereas his actual monthly wages payablewas Rs.1214.40 thereby leaving a deficit of Rs.110/-. The respondenton their part produced the wages register to prove the appellant’s actualmonthly wages, its nature and also gave its break up.

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A16. By order dated 24.07.2008, the Industrial Tribunal answeredthe reference in appellant’s favour. It was held that the respondent didnot ensure full compliance with proviso to Section 6E (2) inasmuch asthe respondent failed to pay full wages of one month to the appellant. Inother words, it was held that there was a deficit of Rs.110/- in payingmonthly wages by the respondent to the appellant along with the dismissalBorder and hence the appellant was held deemed to be in service as if nodismissal order had been passed.

17. The respondent felt aggrieved by the order of the IndustrialTribunal and filed a writ petition in the High Court out of which thisappeal arises. By impugned order, the High Court allowed the writ petitionCand set aside the order of the Industrial Tribunal. It was held that assumingthat there was a short payment of Rs.110/- while paying monthly wagesto the appellant, yet since the respondent had also paid a sum ofRs.1618.30 to him towards leave encashment in his monthly wages, asum of Rs.110/- could always be adjusted out of Rs.1618.30. It wasDaccordingly held that in this way, it can be held that the respondent hasensured full compliance with Section 6E(2) of the Act while payingmonthly wages to the appellant along with his dismissal order. The HighCourt, therefore, accorded sanction to the respondent as required underSection 6E(2) of the Act and upheld the dismissal order as being legal.

E18. The workman (appellant herein) felt aggrieved and has filedthe 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 writpetition and thereby was justified in setting aside the order of the IndustrialFTribunal; Second, whether an isolated payment of Rs.110/- made by theemployer (respondent) to the employee (appellant) by way of interimrelief (ex gratia) in August 1986 in monthly wages can be regarded aswages under Section 2(y) read with Section 6E(2) of the Act or in otherwords, whether such payment is a part of the appellant’s monthly wages;and third whether the respondent can be held to have paid wages forGone month to the appellant in compliance with the requirements of Section6E (2) of the Act so as to enable them to claim sanction to the appellant’sdismissal order.

20. Heard Mr. Sanjay Parikh, learned counsel for the appellantand Mr. Jitendra Mohan Sharma, learned senior counsel for theHrespondent.

21. Having heard the learned counsel for the parties at length andon perusal of the record of the case, we are inclined to uphold theconclusion arrived at by the High Court but we do so on our reasoninggiven hereinbelow. In other words, though we uphold the conclusionarrived 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 Section6E(2) of the Act deserves to be allowed by granting them approval tothe appellant’s dismissal.

23. Section 2 (y) and Section 6E (2) of the Act are relevant. Theyare quoted below:

“Section 2(y)

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

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

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

(iii) any traveling concession, but does not include- (a)any bonus; (b)any contribution paid or payable by the employerto any pension fund or provident fund or for thebenefit of the workman under any law for thetime being in force;

(c) any gratuity payable on the termination of hisservice.

Section 6E

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

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A(1)……………….

(2) During the pendency of any such proceeding inrespect of an industrial dispute, the employer may, inaccordance with the standing orders applicable to aworkman concerned in such dispute- B

(a) ………………

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

CProvided 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.”

(emphasis supplied)

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24. Section 2(y) defines the term ‘wages’ whereas Section 6Eprovides that condition of service of a workman has to remain unchangedin certain circumstances. Proviso to Section 6E(2) says that no workmancan be discharged or dismissed from the services unless he has beenpaid wages for one month and an application is made by an employee toEan authority before whom the proceedings are pending for approval ofthe action taken by the employer against the workman.

25. Coming to the facts of this case, to answer these three questionsposed above, we find that the appellant has relied on the break up of hismonthly wages. It is this amount which, according to the appellant,Fshould have been paid to him by the respondent as a pre-condition togive effect to his dismissal order. The break up reads as under:

SHRI H.D. SHARMA v. NORTHERN INDIA TEXTILERESEARCH ASSOCIATION [ABHAY MANOHAR SAPRE, J.]

26. So far as the respondent is concerned, they relied on thedetails of the appellant’s monthly wages payable/paid to him at the timeof his dismissal in full and final satisfaction. It reads as under:

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1. Salary for April from 1.4.87 to

27.4.89 4 days under LWP

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4. One months notice pay as per

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27. According to the appellant, there was a short payment ofRs.110/- because he was paid Rs.1103.40 whereas his monthly wageswas Rs.1214.40.

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28. The stand of the respondent was that there was no shortpayment because a sum of Rs.110/- was paid to the appellant only oncein August 1986 by way of ex gratia in the form of “interim relief”. Thissum, i.e., (Rs110/-), according to the respondent, was thereafter neverpaid to the appellant after August, 1986 till 24.04.1987 (date of dismissalorder). It is for this reason, the respondent contended that a sum ofRs.110/- is neither a wage and nor its component and nor the appellanthas any right in law to claim such amount under the terms of hisemployment from the respondent.

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29. What types of payment would constitute a wage or itscomponent within the meaning of the word “wages” as defined underSection 2 (rr) of the Industrial Disputes Act has been the subject matterof several decisions of this Court. The word “wages” defined in Section2(y) of the Act is in peri materia with the definition of word “wages”defined in Section 2(rr) of the Industrial Disputes Act.

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A30. A question arose before the Three Judge Bench in the case ofBharat Electronics Limited vs. Industrial Tribunal, Karnataka,Bangalore & Anr. (1990) 2 SCC 314 as to whether “night shiftallowance” would form part of “wages” in the context of Section 33 (2)(b) of the Industrial Disputes Act, 1947.B31. Justice M.M. Punchhi (as His Lordship then was and later A

B31. Justice M.M. Punchhi (as His Lordship then was and laterCJI) speaking for the Bench examined the object of Section 33(2)(b) ofthe Industrial Disputes Act. After referring to earlier decision of thisCourt in Syndicate Bank Limited vs. Ramanath (1968) 1 SCR 327, itwas held that the intention of the legislature in providing for such acontingency is not far to seek. It was held that the section was enactedC“to soften the rigour of unemployment that will face the workman againstwhom an order of discharge or dismissal has been passed”. This Courtheld that one month’s wages as thought and provided to be given areconceptually for the month to follow, the month of unemployment and inthe context wages for the month following the date of dismissal and notDa repetitive wage of the month previous to the date of dismissal. ThisCourt further held that if the converse is read in the context of the provisoto Section 33(2)(b), it inevitable would have to be read as double thewages as earned in the month previous to the date of dismissal and thatwould, in our view, be reading in the provision something which is notthere, either expressly or impliedly. This Court held that we have toEblend the contextual interpretation with the conceptual interpretation tocome 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 theconclusion is inescapable that the workman had to earn night shiftallowance by actually working in the night shift and his claim to thatFallowance was contingent upon his reporting to duty and being put tothat shift. It was held that the night shift allowance automatically did notform part of his wages and it was not such an allowance which flowedto him as his entitlement not restricted to his service.

32. Now coming to the facts of this case, we find that it has comeGin evidence that the respondent had paid Rs.110/- to the appellant inAugust 1986 by way of “interim relief” as an ex gratia payment. It isnot in dispute that a sum of Rs.110/- was paid only once in August 1986and not thereafter.

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33. In our opinion, such payment cannot be termed either as wagesor its component within the meaning of Section 2 (y) read with Section6E (2) of the Act.

34. The reason is that any isolated one time ex gratia paymentmade by way of an interim relief neither satisfies the requirement ofSection 2 (y) and nor it satisfies the requirement of clauses (i) to ( iii ) ofSection 2 (y) of the Act.

35. If such amount had been paid regularly by the respondent tothe appellant in compliance with his terms of employment, it would havebeen regarded as wages or its component within the meaning of Section2(y) of the Act. In order that any payment is regarded as “wages”, itmust be proved that it was being paid by the employer to his employeepursuant to the terms of his employment. It is only then a right is createdin employee’s favour to claim such amount from the employer providedthe employee proves that he has fulfilled the terms of his employment.

36. A question arose before the Two Judge Bench in GhaziabadZila Sahkari Bank Ltd. vs. Additional Labour Commissioner &Ors. (2007) 11 SCC 756 as to whether any ex gratia payment made tothe employee by the Bank would be regarded as Bonus (production,incentive or customary). This Court held that it was not. It was held thatit is not possible to employ a term of service on the basis of employmentcontract. It was held that the payment made as ex gratia was neither inthe nature of production bonus nor incentive bonus nor customary bonusand nor any statutory bonus. It cannot be regarded as part of the contract“employment”. It was accordingly held that the ex gratia payment madeby the Bank cannot be regarded as remuneration paid or payable to theemployees in fulfillment of the terms of the contract of employmentwithin the meaning of definition of wage under Section 2 (rr) of the IDAct.

37. We are, therefore, of the considered opinion that the respondentrightly paid Rs.1103.40 to the appellant by way of his wages for onemonth along with his dismissal order. Such payment, in our view, wasmade strictly in accordance with the requirements of Section 2(y) readwith Section 6E (2) of the Act. On the other hand, we find that theappellant failed to adduce any evidence to prove that Rs.110/- was beingpaid to him every month by the respondent as a part of his term of theemployment and, if so, under which head.

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A38. In view of the foregoing discussion, we are of the view thatthe High Court was not justified in holding that such amount, even if,held to be the wages, the same could be adjustable against the paymentsmade by the respondent under other head in the appellant’s monthlywages. The High Court, in our view, failed to examine the main questionas to whether a payment of Rs.110/- was in the nature of “wages” or itsBcomponent within the meaning of Section 2(y) of the Act. Withoutdeciding this question, the High Court held that such amount could beadjusted against the payment made by the employer (respondent) to theappellant under “leave encashment”. In our opinion, it was not the correctapproach.

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39. In the light of afore-mentioned reasons, though we uphold theconclusion of the High Court but do not agree to the reasoning on whichsuch conclusion is based.

40. In view of the foregoing discussion, we find no merit in thisappeal. It thus fails and is accordingly dismissed.D

Devika Gujral

Appeal dismissed.

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