Full Judgment Text
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PETITIONER:
BHARAT ELECTRONICS LIMITED, BANGALORE
Vs.
RESPONDENT:
INDUSTRIAL TRIBUNAL, KARNATAKA,BANGALORE AND ANR.
DATE OF JUDGMENT15/03/1990
BENCH:
PUNCHHI, M.M.
BENCH:
PUNCHHI, M.M.
MISRA RANGNATH
REDDY, K. JAYACHANDRA (J)
CITATION:
1990 AIR 1080 1990 SCR (1) 971
1990 SCC (2) 314 JT 1990 (1) 431
1990 SCALE (1)443
ACT:
Industrial Disputes Act, 1947: Section 33(2)(b)--’Night
shift allowance’--Whether ’Wages’
HEADNOTE:
Respondent-workman was in employment of the Appellant-
management as Bus driver. Following an incident of miscon-
duct committed by him, a domestic inquiry was conducted
against him under Standing Orders 15(1)(b) and 15(1)(r) of
the Company wherein he was held guilty by the Enquiry Offi-
cer and was eventually dismissed from the service w .e.f.
31.12.1979. On that day itself the management moved an
application before the Industrial Tribunal under section
33(2)(b) of the Act for approval of the action taken and
towards meeting the requirements of the provisions of the
act paid to the workman before hand wages for one month. The
workman filed his objection Statement to that application
raising several contentions denying all the allegations made
against him and challenging the validity of the domestic
enquiry. This application somehow was kept pending by the
Tribunal for over six years when sometime in July, 1986 the
workman moved an application before the Tribunal seeking
amendment of his objection petition to urge an additional
ground that one month’s wages paid to him were short by Rs.
12, being the monthly night shift allowance as he was ordi-
narily expected to work by rotation as per standing orders
of the Company and thus as full one month’s wages had not
been paid to him as required under section 33(2)(b) of the
Act, the approval sought for ought to be declined. The
management contended that the night shift allowance is
neither paid nor payable unless the night shift is actually
performed and thus this amount cannot form part of the
month’s wages automatically. The Industrial Tribunal while
abandoning giving any finding on the validity of the domes-
tic enquiry, upheld the additional objection taken by the
workman and declined the management’s application seeking
approval to the dismissal of the workman. Hence this appeal
by special leave by the management. Setting aside the im-
pugned judgment and order of the Tribunal and allowing their
application made under section 33(2)(b) of the Industrial
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Disputes Act, this Court in allowing the appeal,
972
HELD: 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. The night shift allowance did not
automatically form part of his wages and it was not such an
allowance which flowed to him as an entitlement of his
service. [981C]
The Tribunal fell into a grave error in declining the
application of the management for approval on the ground of
short payment of Rs. 12 on account of night shift allowance,
which the workman supposedly would have earned had he gone
to report for duty. [981D]
Syndicate Bank Limited v. Ram Nath Bhat, [1967-68]
(XXXX) FJR 490 at 497; M/s. Podar Mills Ltd. v. Bhagwan
Singh and Another, [4974] 3 SCC 157; Bennett Coleman & Co.
(P) Ltd. v. Punya Priya Das Gupta, [1970] 1 SCR 181 and
Dilbagh Rai Jarry v. Union of India & Ors., [1974] 2 SCR
178. referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 744 of
1987.
From the Judgment and Order dated 9.10.1986 of the
Industrial Tribunal Karnataka in Serial No. 1/80 in I.D. No.
26 of 1979.
Narayan B. Shetye, Vineet Kumar and Vinay Bhasin for the
Appellant.
M.C. Narasimhan and Jitender Sharma for the Respondent No.
2.
The Judgment of the Court was delivered by
PUNCHHI, J. Whether "night shift allowance" forms part
of "wages" in the context of section 32(2)(b) of the Indus-
trial Disputes Act, 1947 (hereinafter referred to as ’the
Act’) is the issue which crops up for decision in this
appeal by special leave against the order dated October 9,
1986 of the Industrial Tribunal, Karnataka at Bangalore in
Serial No. 1 of 1980 in I.D. No. 26 of 1979.
It arises on these facts.
Bharat Electronics Limited, Bangalore, the appellant-
herein, is the "management" and the respondent Shri B.
Sridhar, "workman"
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was in employment with the management as a bus driver. The
establishment of the management, at the relevant time, had
about 13,500 employees out of whom about 2,800 were females.
The management provided transport facilities for picking up
and dropping down its employees from and at stipulated
official stops. The driver,, plying buses of the establish-
ment on a rotational basis, working on night shifts, used to
get a variable night shift allowance. On May 1, 1979 the
workman was detailed to work in the first shift for picking
up certain employees of the second shift and general shift,
and for drop. ping school children at various scheduled
points. He was also detailed to pick up female employees,
who were to report for the shift commencing from 10.30 a.m.
to 7.00 p.m. from the stipulated official stops. En route
the workman did not park his vehicle at one of the stipulat-
ed establishment bus stops but rather quite away from it,
which caught the attention of Shri K.L. Balasubramaniam, a
senior Engineer in the employment of the Management wanting
to go the factory. Shri Balasubramaniam went there and in
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the process of boarding the bus enquired whether he could go
to the factory in the same bus. He was in for a shock to see
the workman indulging in sexual act with a woman in the gang
way of the bus. The sudden appearance of Shri Balasubramani-
am surprised the workman and he abruptly and falsely replied
in the negative. The matter was reported to the high offi-
cials of the Management. He confessed his guilt before Shri
M.V. Subbarayappa, Deputy Manager, Transport. The misconduct
committed by the workman became the subject matter of a
domestic enquiry. At the enquiry S/Shri Balasubramaniam and
Subbarayappa appeared for the management and deposed to the
aforesaid facts. The Enquiry Officer found the workman
guilty of the misconduct imputed under Standing Orders
15(1)(h) and 15(1)(r) of the Standing Orders of the
Company.The workman was thereafter dismissed from service
with effect from December 31, 1979. On that very day, the
management sought approval from the Industrial Tribunal,
Karnataka at Bangalore under section 33(2)(b) of the Act of
the action taken and towards meeting the requirement of the
provision paid to the workman before-hand a sum of Rs.607.90
as wages for one month,
Before the Industrial Tribunal the workman filed an
objection statement raising various contentions denying
inter alia the allegations made against him and challenging
the validity of the domestic enquiry. It somehow kept pend-
ing for over six years though under the unamended section
32(5), it was required of the Tribunal to without delay hear
the application and pass such order in relation thereto as
it deemed fit. Now with effect from 21-8-1984, three months
time limit is
974
fixed though extendable by an order in writing. Anyway while
that was in progress, he made an application on July 13,
1986 before the Tribunal seeking amendment of the objection
petition enabling him to urge an additional ground to the
effect that one month’s wages paid to him were short by Rs.
12, the monthly sum due for night shift’ allowance. The
additional objection was based on the premises that since
the workman was ordinarily expected to work on night shift
on a rotational basis as per the Standing Orders of the
Company, such allowance should have formed part of the
wages. On that basis it was urged that since full wages had
not been paid to the workman, there was a serious infraction
of the provisions of section 33(2)(b) warranting the sought
for approval to be declined.
The management could not, and did not, deny that factu-
ally the night shift allowance had not been included in one
month’s wages as paid to the workman. The management however
maintained that the question of the validity of the domestic
enquiry, which the Tribunal had already undertaken, should
first be settled and that in any case the additional objec-
tion raised by the workman required leading evidence. The
management further contended that the night shift allowance
was neither paid nor was payable to the workman as he could
not be said to have earned it automatically as part of wages
unless he had actually worked on the night shift. It was
pointed out that the said allowance was variable in nature
depending upon the number of shifts in which the workman had
actually performed work. It was asserted that the night
shift allowance is not payable to the workman when he does
not come for work for any reason and thus was not such
allowance which would automatically flow even without work-
ing. Lastly it was projected that since during the pendency
of the domestic enquiry the workman was under suspension
there could otherwise arise no occasion for his coming on
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duty to earn the night shift allowance.
The Presiding Officer, Industrial Tribunal, Bangalore
relying on the views expressed by an Hon’ble Single Judge of
the Karnataka High Court in Writ Petition No. 6607 of 1985
decided on August 28, 1986, titled Ramakrishnappa v. The
Industrial Tribunal & Another, sustained the objection of
the workman taking the view that night shift allowance
should have formed part of one month’s wages and on that
score went alongwith the workman in abandoning giving any
finding the validity of domestic enquiry. Consequentially
for the view so taken the management was declined approval
to the dismissal of the workman. So the order of the Tribu-
nal taking that view is directly under attack in this appeal
by special leave and indirectly at issue is the
975
correctness of the decision of the Karnataka High Court in
Ramakrishnappa’s case aforementioned.
Two provisions of the Act which would require being
adverted to are these.
Section 2(rr) provides the definition to the word
"wages". It reads as follows:
"2. DEFINITIONS--In this Act, unless there is anything
repugnant in the subject or context,
(rr) ’wages’ means all remunerations 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 food-
grains or other articles;
(iii) any travelling concession;
(iv) any commission payable on the promotion of
sales or business or both;
but does not include--
(a) any bonus;
(b) any contribution paid or payable by the em-
ployer to any pension fund or provident fund or for the
benefit of the workman under any law for the time being in
force;
(c) any gratuity payable on the termination of his
service;
Section 33(2)(b) as extracted reads as follows:
976
"33. CONDITIONS OF SERVICE, ETC. TO REMAIN
UNCHANGED UNDER CERTAIN CIRCUMSTANCES DURING PENDENCY OF
PROCEEDINGS-
(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 for where there are no such stand-
ing orders, in accordance with the terms of the contract,
whether express or implied, between him and the workman],--
(b) for any misconduct not connected with the
dispute, discharge or punish, whether by dismissal or other-
wise, that workman:
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 approv-
al of the action taken by the employer."
It is not disputed that section 33(2)(b) was attracted
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to the facts of this case. The only point, as said before,
is whether night shift allowance was to be paid to the
workman as part of wages even though he had not factually
worked on the night shift.
The definition of the word "wages", as given in clause
(rr) of section 2 is comprehensive enough to include (vide
inclusion 1) such of the allowances as the workman is for
the time being entitled. Yet, despite such comprehension,
the inclusive meaning is subject to a meaningful change if
there is anything repugnant in the subject or context. The
proviso to section 33(2)(b) mandates that unless the workman
is paid wages for one month and an application as contem-
plated is made by the employer for approval of his action,
no such workman can be discharged or dismissed. The inten-
tion of the legislature in providing for such a contingency
is not far to seek and as was pointed out by this Court in
the case of Syndicate Bank Limited v. Ram Nath Bhat, [1967-
68] (XXXII) FJR 490 at 497 was "to soften the rigour of
unemployment that will face the workman, against whom an
order of discharge or dismissal has been passed". One
month’s wages as thought and provided to be given are con-
ceptually for the month to
977
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 dis-
missal. If the converse is read in the context of the provi-
so to section 32(b), it inevitably 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. We have thus to blend the contextual interpreta-
tion with the 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. This Court
in M/s. Podar Mills Ltd. v. Bhagwan Singh and Another,
[1974] 3 SCC 157 ruled that the date of dismissal under
section 33(2)(b) is the date when the approval application
is filed, after dissmissal- With effect from that date, the
occasion to earn night shift allowance cannot, and will not,
arise.
This Court in Bennett Coleman & Co. (P) Ltd. v. Punya
Priya Das Gupta, [1970] 1 SCR 181 was called upon to rule
whether car allowance and benefit of free telephone and
newspaper were such allowances, includable in wages under
section 2(rr) of the Act in order to determine a claim of
gratuity of a journalist. This Court held as follows:
"Since wages has not been defined in the Act, its meaning is
the same as assigned to it in the Industrial Disputes Act.
Under s. 2(rr) of that Act, "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 employ-
ment or of work done in such employment, and includes (i)
such allowances (including dearness allowance) as the work-
man 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 food-grains or other articles; (iii)
any travelling concession; but does not include any bonus
and other items mentioned therein. Mr. Ramamurthi’s argument
was that the car allowance as also the benefit of the free
telephone and newspapers would fall under the first part of
the definition as they are remuneration capable of being
expressed in terms of money. The argument, however, cannot
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be accepted as neither of them can be said to be remunera-
tion payable in respect of emp-
978
1oyment or work done in such employment. Neither the car
allowance nor the benefit of the free telephone was given to
the respondent in respect of his employment or work done in
such employment as the use of the car and the telephone was
not restricted to the employment, or the work of the re-
spondent as the special correspondent. There was no evidence
that the car allowance was fixed after taking into consider-
ation the expenses which he would have ordinarily to incur
in connection with his employment or the work done in such
employment. Even if the respondent had not used the car for
conveying himself to the office or to other places connected
with his employment and had used other alternative or cheap-
er means of conveyances or none at all, the car allowance
would still have had to be paid. So too, the bills for the
telephone and the newspapers whether he used them or not in
connection with his employment or his work as the special
correspondent. Therefore we have to turn to the latter part
of the definition and see if the two items properly fall
under. So far as the car allowance is concerned, there was,
as aforesaid, nothing to suggest that it was paid to reim-
burse him of the expenses of conveyance which he would have
to incur for discharging his duties as the special corre-
spondent, or that it was anything else than an allowance
within the meaning of s. 2(rr) of that Act. It would, there-
fore, fall under the inclusive part (i) of the definition.
Likewise, the benefit of the telephone and newspapers was
allowed to the respondent and merely for the use thereof in
connection with his employment or duties connected with it.
Both the car allowance and the benefit of the free telephone
and newspapers appear to have been allowed to him to direct-
ly reduce the expenditure which would otherwise have gone
into his family budget and were therefore items relevant in
fixation of fair wages. [See Hindustan Antibiotics Ltd. v.
Workmen, [1957] 1 SCR 652]. That being the position, the two
items could on the facts and circumstances of the present
case be properly regarded as part of the respondent’s wages
and had to be taken into calculations of the gratuity pay-
able to him."
(Emphasis supplied)
The above extract and more so the emphasised words are
significant to convey that the car allowance and the bene-
fits of free telephone and newspapers were held allowances
includable in wages in the
979
facts and circumstances of that case. These allowances were
held part of the wages of the journalist on the finding that
he was entitled to them not as remuneration capable of being
expressed in terms of money but as allowances within the
meaning of the First inclusion.
In Dilbagh RaiJarry v. Union of India & Ors., [1974] 2
SCR 178 this Court was required to determine whether "run-
ning allowance" formed part of wages for the purpose of
Payment of Wages Act, 1936. That was a case in which a
railway guard, who was convicted in a criminal case but
later acquitted, and who in the meantime had been dismissed
from service but his dismissal too had been upset by the
High Court followed by his reinstatement, had asked for back
wages for the period between the date of his dismissal and
the date of reinstatement. Finally he was let to this Court
reiterating his claim that a running allowance was part of
his wages which he would have earned while on duty. This
Court in that context observed as follows:
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Mr. Bishan Narain further contends that Running Allowance
was a part of the pay or substantive wages. In support of
this argument he has invited our attention to rule 2003 of
the Railway Establishment Code, clause 2 of which defines
’average pay’. According to the second proviso to this
clause in the case of staff entitled to running allowance,
average pay for the purpose of leave salary--shall include
the average running allowance earned during the months
immediately preceding the month in which a Railway servant
proceeds on leave subject to a maximum of 75 per cent of
average pay for the said period, the average running allow-
ance once determined remaining in operation during the
remaining part of the financial year in cases of leave not
exceeding one month. The crucial words, which have been
underlined, show that such Running Allowance is counted
towards ’average pay’ in those cases only where the leave
does not exceed one month. It cannot, therefore, be said
that Running Allowance was due to the appellant as part of
his wages for the entire period of his in active service.
Travelling allowance or running allowance is eligible if the
officer has travelled or run, not otherwise. We therefore
negative this contention."
(Emphasis supplied)
It is noteworthy that running allowance or travelling allow-
ance, as the
980
case may be, had to be earned by actually travelling or
running, and not otherwise, as held in Dilbagh Rai Jarry’s
case (supra). Only a fiction was available for a limited
period as per Clause 2003 of the Railway Establishment Code.
The average running allowance once determined in accordance
with the Clause, afore-quoted, was to remain operative
during the remaining part of the financial year only in
those cases where the employee had taken leave not exceeding
one month, and not otherwise. In cases of leave exceeding
one month the fiction on its’own dropped.
Now confluencing the two legal thoughts expressed in
Bennett Coleman’s case (supra) and Dilbagh Rai Jarry’s case
(supra), the stream of thought which inevitably gurgles up
is that an allowance which from the term of employment flows
as not contingent on actual working is part of wages for the
purposes of section 33(2)(b) but an allowance which is
earnable only by active serving is not an allowance which
will form part of wages, within the meaning of the said
provision.
In Ramakrishnappa’s case Hon’ble Single Judge of the
Karnataka High Court employed Bennett Coleman’s case to come
to the conclusion that night shift allowance was part of the
wages by observing as follows:
"Therefore, I find it difficult to accede to the
contention of the management that conveyance allowance,
night shift allowance and turnout allowance were not wages
as defined in section 2(rr) of the Act, and therefore, they
were not required to be included in computing the wages of
the petitioner for one month. The decision of the Supreme
Court in Bennett Coleman and Co. [1970] 37 FJR 498; AIR 1970
SC 427, though it arose in the context of quantification of
gratuity, the view taken therein that the allowances given
for purchase of newspapers, towards telephone and conveyance
also should be calculated in computing one month’s wages for
the purpose of computing gratuity, sup˜ ports the construc-
tion placed on section 2(rr) of the Act for the petitioner,
for, the Supreme Court invoked the said definition as the
word "wages" had not been defined in the Working Journalists
(Conditions of Service and Miscellaneous Provisions) Act,
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1955. In the Case of Jarry, AIR 1974 SC 130, on which the
learned counsel for the second respondent relied, the ques-
tion decided was, whether
981
wages payable to a railway guard for the period he was kept
out of service consequent on his dismissal from service till
he was reinstated included the amount of running allowance,
which was under the rules payable only if the railway serv-
ant had gone on duty, and the Supreme Court held that it was
not, in view of the condition. Section 2(rr) of the Act did
not come up for consideration in that case and, therefore,
not apposite to this case."
This view, as said before, was adopted by the Tribunal to
decline approval to the management. But for reasons set out
before, we are of the view that the Hon’ble Single Judge
fell into an error in enlarging the scope of Bennett Cole-
man’s case and dwarfing that of Dilbagh Rai Jarry’s case.
Thus 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. The night
shift allowance automatically did not form part of his wages
and it was not such an allowance like in Bennett Coleman’s
case which flowed to him as his entitlement not restricted
to his service. Thus we hold that the Tribunal fell into a
grave error in declining the application of the management
for approval on the ground of short payment of Rs. 12 on
account of night shift allowance, which the workman suppos-
edly would have earned had he gone to report on duty, which
in the circumstances he could not, or having worked rota-
tionally at night, which he did not, and that too fictional-
ly, in the month following the month and the date of the
application, on which date the dismissal was to be effec-
tive.
We cannot refrain from expressing our concern to the
manner in which the other issue before the Tribunal regard-
ing the validity of the domestic enquiry was side-tracked.
Had there been a finding on the same, one way or the other,
we could have easily finalised the matter. For over six
years the matter on that count was kept pending and the
additional objection being permitted to be raised was unac-
countably abandoned. The matter could have in this situation
been sent back to the Tribunal but at this late stage we do
not propose to do so and are inclined to close the matter,
as we are otherwise satisfied that plea about the validity
of the domestic enquiry was without merit and even though
raised was by conduct abandoned.
Before concluding the judgment the observations in
Syndicate Bank’s case, afore-quoted, are again to be borne
to mind. In the facts and circumstances of this case the
management paid to the workman a
982
sum of Rs.607.90 as a month’s salary "to soften the rigour
of unemployment that will face the workman". How could a
short payment of Rs. 12 be said to have lessened the soften-
ing of such rigour is thought stirring. Viewed in the con-
text, there could genuinely be a dispute, as in the present
case, as to whether a particular sum was due as wages. It
is, of course, risky for the management to raise it as to
pay even a paise less than the month’s wages due under
section 33(2)(b), would be fatal to its permission sought.
But at the same time it needs to be clarified that it is for
the management to establish, when questioned, that the sum
paid to the workman under section 33(2)(b) represented full
wages of the month following the date of discharge or dis-
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missal, as conceived of in the provision and as interpreted
by us in entwining the ratios in Bennett Coleman’s case
(supra) and Dilbagh Rai Jarrv’s case (supra) and adding
something ourselves thereto.
Thus for the foregoing reasons, we allow this appeal,
set aside the judgment and order of the Industrial Tribunal,
Karnataka at Bangalore and allow the application of the
management under section 33(2)(b) of the Industrial Disputes
Act without any order as to costs.
R.N.J. Appeal
allowed.
983