SHRI H.D. SHRMA vs. NORTHERN INDIA TEXTILE RES.ASSN.

          REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No.3168 OF 2010 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: 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 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 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, 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 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.  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 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 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 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 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, 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 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; (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 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 :

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:

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 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 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 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. 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 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 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 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. 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