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. 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. 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.
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.
1
2) In order to appreciate the issues involved in
this appeal, which lie in a narrow compass, few
facts need mention hereinbelow.
3) The appellant (workman) was appointed on
26.05.1978 as Duplicating Machine OperatorcumClerk
by the respondent Northern India Textile
Research Association, Ghaziabad (UP). On
24.04.1987, the appellant was dismissed from
service on five charges of misconduct after holding a
Departmental Enquiry.
4) The respondent (employer) on 27.04.1987
moved an application before the Presiding Officer,
Industrial Tribunal at Meerut under Section 6E (2)
of the UP Industrial Disputes Act, 1947 (hereinafter
referred to as “the Act”) read with Rule 31 (2) of the
Rules (Adj case No. 53/1986) and sought approval
of the dismissal of the appellant. The respondent
contended that they have complied with all
necessary prerequisites for seeking approval as
2
provided in proviso to subSection (2) of Section 6E
of the Act.
5) During the pendency of approval proceedings,
the State Government, on 03.08.1988, also made an
Industrial Reference (31/1988) to the Industrial
Tribunal under Section 4K of the Act for deciding
the legality and correctness of the appellant’s
dismissal order dated 24.04.1987.
6) In the meantime, the appellant (workman) filed
his reply to approval proceedings (53/1986) filed by
the respondent in the Industrial Tribunal. The
appellant opposed the respondent's prayer for grant
of approval essentially on the ground that the
respondent (employer) did not ensure full
compliance with the prerequisites, which were
necessary for grant of approval to the dismissal
order in terms of proviso to subSection (2) of
Section 6E of the Act. The appellant contended that
in terms of proviso to subSection (2) of Section 6E
3
of the Act his services could not have been
discharged/dismissed unless he had been paid
“wages for one month”. It was contended that the
respondent though paid the wages for one month,
but did not pay “full wages of one month” to the
appellant.
7) In other words, the grievance of the appellant
was that the respondent was under legal obligation
to pay to the appellant full wages for one month so
as to enable them to obtain approval for his
dismissal as provided in subSection (2) of Section
6E of the Act but since there was a short payment
of Rs.110/ in total monthly wages, the respondent
could not be said to have ensured full compliance
with the proviso to subSection (2) of Section 6E of
the Act. It was contended that it is only after the full
compliance with Section 6E is done which is held
mandatory by this Court, the respondent becomes
entitled to claim its benefit else not. It was,
4
therefore, contended that since the respondent
failed to ensure full compliance with Section 6E of
the Act, no approval could be accorded to the
dismissal order as provided under Section 6E of the
Act.
8) The respondent filed rejoinder stating therein
the break up of the appellant’s monthly wages with
a view to show that they had paid full monthly
wages to the appellant as per the terms of
employment along with the dismissal order and,
therefore, there was a full compliance with proviso
to subSection (2) of Section 6E of the Act entitling
them to seek approval to the appellant’s dismissal
order.
9) In the meantime, the respondent filed an
application and sought permission of the Industrial
Tribunal to allow them to withdraw their application
which they had filed for obtaining approval to the
dismissal order. According to the respondent, in
5
view of the Industrial Reference No.31/1988 having
already made by the State to the Industrial Tribunal
wherein the legality and correctness of the dismissal
order was being examined, it was not necessary for
them to seek any approval to such dismissal order,
as required under Section 6E of the Act, from the
Industrial Tribunal.
10) By order dated 29.06.1990, the Industrial
Tribunal dismissed the respondent’s aforementioned
application. The respondent felt aggrieved and filed
a writ petition (W.P. No.18679/1990) in the High
Court. By order dated 11.02.1998, the High Court
allowed the writ petition and set aside the order
dated 29.06.1990. It was held that two parallel
proceedings in relation to the same matter cannot
be allowed to be continued. Felt aggrieved, the
appellant (workman) filed SLP(c) No. 8465/1998 in
this Court.
6
11) By order dated 28.03.2000, this Court allowed
the appeal, set aside the order of the High Court
and remanded the case to the High Court. This
Court held that firstly, the scope of proceedings
under the two provisions was entirely different; and
secondly, since the Act provided separate rights,
protection and remedies to the parties for
prosecuting these proceedings, the disposal of one
proceedings would not bring to an end the other.
The High Court was, therefore, requested to decide
the writ petition afresh on merits keeping in view
the observations made.
12) On remand, when the High Court took up the
writ petition for its disposal, the respondent did not
press their withdrawal application in view of the
decision of the Constitution Bench in Jaipur Zila
Sahakari Bhoomi Vikas Bank Ltd. vs. Ram Gopal
Sharma & Ors. (2002) 2 SCC 244 wherein it was
laid down that proviso to Section 33(2)(b) of the
7
Industrial Disputes Act, 1947, which is akin to
Section 6E of the Act, is unambiguous, clear and
equally mandatory in nature for ensuring its
compliance. It was held that if the employer has
failed to ensure compliance with the provisions and
the conditions stated therein, the discharge or
dismissal order passed by the employer would be
void and inoperative.
13) Since Section 6E of the Act is in pari materia
with Section 33(2)(b) of the Industrial Disputes Act,
the interpretation of Section 33 (2)(b) made by this
Court in Jaipur Zila Sahakari Bhoomi Vikas Bank
(supra) will have its full application to Section 6E of
the Act. The writ petition was accordingly dismissed
as having rendered infructuous.
14) The Industrial Tribunal thereafter proceeded to
try the reference on merits. An issue on the
question of compliance with Section 6E (2)(b) of the
Act, as directed by the High Court in the order
8
dated 02.03.2005 passed in W.P.No.13094/2005,
was accordingly framed. Parties adduced their
evidence.
15) So far as the appellant is concerned, he
adduced the evidence to prove that he was paid
total sum of Rs.1103.30 by way of his monthly
wages in terms of proviso to subSection (2) of
Section 6E of the Act along with the dismissal order
whereas his actual monthly wages payable was
Rs.1214.40 thereby leaving a deficit of Rs.110/.
The respondent on their part produced the wages
register to prove the appellant’s actual monthly
wages, its nature and also gave its break up.
16) By order dated 24.07.2008, the Industrial
Tribunal answered the reference in appellant's
favour. It was held that the respondent did not
ensure full compliance with proviso to Section 6E
(2) inasmuch as the respondent failed to pay full
wages of one month to the appellant. In other
9
words, it was held that there was a deficit of
Rs.110/ in paying monthly wages by the
respondent to the appellant along with the dismissal
order and hence the appellant was held deemed to
be in service as if no dismissal order had been
passed.
17) The respondent felt aggrieved by the order of
the Industrial Tribunal and filed a writ petition in
the High Court out of which this appeal arises. By
impugned order, the High Court allowed the writ
petition and set aside the order of the Industrial
Tribunal. It was held that assuming that there was
a short payment of Rs.110/ while paying monthly
wages to the appellant, yet since the respondent
had also paid a sum of Rs.1618.30 to him towards
leave encashment in his monthly wages, a sum of
Rs.110/ could always be adjusted out of
Rs.1618.30. It was accordingly held that in this
way, it can be held that the respondent has ensured
10
full compliance with Section 6E(2) of the Act while
paying monthly wages to the appellant along with
his dismissal order. The High Court, therefore,
accorded sanction to the respondent as required
under Section 6E(2) of the Act and upheld the
dismissal order as being legal.
18) The workman (appellant herein) felt aggrieved
and has filed the present appeal by way of special
leave in this Court.
19) Three questions arise for consideration in this
appeal. First, whether the High Court was justified
in allowing the respondent's writ petition and
thereby was justified in setting aside the order of
the Industrial Tribunal; Second, whether an isolated
payment of Rs.110/ made by the employer
(respondent) to the employee (appellant) by way of
interim relief (ex gratia) in August 1986 in monthly
wages can be regarded as wages under Section 2(y)
read with Section 6E(2) of the Act or in other words,
11
whether such payment is a part of the appellant’s
monthly wages; and third whether the respondent
can be held to have paid wages for one month to the
appellant in compliance with the requirements of
Section 6E (2) of the Act so as to enable them to
claim sanction to the appellant’s dismissal order.
20) Heard Mr. Sanjay Parikh, learned counsel for
the appellant and Mr. Jitendra Mohan Sharma,
learned senior counsel for the respondent.
21) Having heard the learned counsel for the
parties at length and on perusal of the record of the
case, we are inclined to uphold the conclusion
arrived at by the High Court but we do so on our
reasoning given hereinbelow. In other words, though
we uphold the conclusion arrived at by the High
Court, but not the reasoning of the High Court.
This we say for the following reasons.
22) In our view, the respondent’s application made
under Section 6E(2) of the Act deserves to be
12
allowed by granting them approval to the appellant’s
dismissal.
23) Section 2 (y) and Section 6E (2) of the Act are
relevant. They are quoted below:
“Section 2(y)
‘Wages’ means all remuneration capable of
being expressed in terms of money, which
would, if the terms of employment, expressed
or implied, were fulfilled, be payable to a
workman in respect of his employment, or of
work done in such employment, and
includes:
(i) such allowances (including dearness
allowance) as the workman is for the
time being entitled to;
(ii) the value of any house accommodation,
or of supply of light, water, medical
attendance or other amenity or of any
service or of any concessional supply of
foodgrains or other articles;
(iii) any traveling concession, but does not
include
(a) any bonus;
(b) any contribution paid or payable
by the employer to any pension
fund or provident fund or for the
benefit of the workman under any
law for the time being in force;
13
(c) any gratuity payable on the
termination of his service.
Section 6E
Conditions of service, etc. to remain
unchanged in certain circumstances during
the pendency of proceedings –
(1) ……………….
(2) During the pendency of any such
proceeding in respect of an industrial
dispute, the employer may, in
accordance with the standing orders
applicable to a workman concerned in
such dispute
(a)………………
(b) for any misconduct not connected
with the dispute, discharge or punish,
whether by dismissal or otherwise;
Provided that no such workman shall be
discharged or dismissed, unless he has been
paid wages for one month and an application
has been made by the employer to the
authority before which the proceeding is
pending for approval of the action taken by
the employer.”
(emphasis supplied)
24) Section 2(y) defines the term ‘wages’ whereas
Section 6E provides that condition of service of a
workman has to remain unchanged in certain
14
circumstances. Proviso to Section 6E(2) says that no
workman can be discharged or dismissed from the
services unless he has been paid wages for one
month and an application is made by an employee
to an authority before whom the proceedings are
pending for approval of the action taken by the
employer against the workman.
25) Coming to the facts of this case, to answer
these three questions posed above, we find that the
appellant has relied on the break up of his monthly
wages. It is this amount which, according to the
appellant, should have been paid to him by the
respondent as a precondition to give effect to his
dismissal order. The break up reads as under:
Basic Salary Rs.
334.00
F.D.A Rs.
108.00
F.D.A Rs.
62.00
A.D.A Rs.
494.35
15
Interim Relief Rs.
110.00
H.R.A. Rs.
75.60
C.C.A. Rs.
30.45
Rs.1214.
40
26) So far as the respondent is concerned, they
relied on the details of the appellant’s monthly
wages payable/paid to him at the time of his
dismissal in full and final satisfaction. It reads as
under:
1. Salary for April from 1.4.87 to
27.4.89 4 days under LWP
suspension 926.70
2. Increments from 25.11.86 to
31.3.87 67.90
994.60
Less:PF/EPF deduction 73.00
3. Leave encashment for 44 days 1618.30
4. One months notice pay as per
provision of UP Industrial
Disputes Act Section 6E(2)(b) 1103.40
3643.30
16
27) According to the appellant, there was a short
payment of Rs.110/ because he was paid
Rs.1103.40 whereas his monthly wages was
Rs.1214.40.
28) The stand of the respondent was that there
was no short payment because a sum of Rs.110/
was paid to the appellant only once in August 1986
by way of ex gratia in the form of “interim relief”.
This sum, i.e., (Rs110/), according to the
respondent, was thereafter never paid to the
appellant after August, 1986 till 24.04.1987 (date of
dismissal order). It is for this reason, the
respondent contended that a sum of Rs.110/ is
neither a wage and nor its component and nor the
appellant has any right in law to claim such amount
under the terms of his employment from the
respondent.
29) What types of payment would constitute a
wage or its component within the meaning of the
17
word “wages” as defined under Section 2 (rr) of the
Industrial Disputes Act has been the subject matter
of several decisions of this Court. The word “wages”
defined in Section 2(y) of the Act is in peri materia
with the definition of word “wages” defined in
Section 2(rr) of the Industrial Disputes Act.
30) A question arose before the Three Judge Bench
in the case of Bharat Electronics Limited vs.
Industrial Tribunal, Karnataka, Bangalore & Anr.
(1990) 2 SCC 314 as to whether “night shift
allowance” would form part of “wages” in the context
of Section 33 (2) (b) of the Industrial Disputes Act,
1947.
31) Justice M.M. Punchhi (as His Lordship then
was and later CJI) speaking for the Bench examined
the object of Section 33(2)(b) of the Industrial
Disputes Act. After referring to earlier decision of
this Court in Syndicate Bank Limited vs.
Ramanath (1968) 1 SCR 327, it was held that the
18
intention of the legislature in providing for such a
contingency is not far to seek. It was held that the
section was enacted “to soften the rigour of
unemployment that will face the workman against
whom an order of discharge or dismissal has been
passed”. This Court held that one month's wages as
thought and provided to be given are conceptually
for the month to follow, the month of unemployment
and in the context wages for the month following
the date of dismissal and not a repetitive wage of
the month previous to the date of dismissal. This
Court further held that if the converse is read in the
context of the proviso to Section 33(2)(b), it
inevitable would have to be read as double the
wages as earned in the month previous to the date
of dismissal and that would, in our view, be reading
in the provision something which is not there, either
expressly or impliedly. This Court held that we have
to blend the contextual interpretation with the
19
conceptual interpretation to come to the view that
night shift allowance could never be part of wages,
and those would be due only in the event of
working. It was held that the conclusion is
inescapable that the workman had to earn night
shift allowance by actually working in the night shift
and his claim to that allowance was contingent
upon his reporting to duty and being put to that
shift. It was held that the night shift allowance
automatically did not form part of his wages and it
was not such an allowance which flowed to him as
his entitlement not restricted to his service.
32) Now coming to the facts of this case, we find
that it has come in evidence that the respondent
had paid Rs.110/ to the appellant in August 1986
by way of “interim relief” as an ex gratia payment. It
is not in dispute that a sum of Rs.110/ was paid
only once in August 1986 and not thereafter.
20
33) In our opinion, such payment cannot be
termed either as wages or its component within the
meaning of Section 2 (y) read with Section 6E (2) of
the Act.
34) The reason is that any isolated one time ex
gratia payment made by way of an interim relief
neither satisfies the requirement of Section 2 (y) and
nor it satisfies the requirement of clauses (i) to ( iii )
of Section 2 (y) of the Act.
35) If such amount had been paid regularly by the
respondent to the appellant in compliance with his
terms of employment, it would have been regarded
as wages or its component within the meaning of
Section 2(y) of the Act. In order that any payment is
regarded as “wages”, it must be proved that it was
being paid by the employer to his employee
21
pursuant to the terms of his employment. It is only
then a right is created in employee’s favour to claim
such amount from the employer provided the
employee proves that he has fulfilled the terms of
his employment.
36) A question arose before the Two Judge Bench
in Ghaziabad Zila Sahkari Bank Ltd. vs.
Additional Labour Commissioner & Ors. (2007) 11
SCC 756 as to whether any ex gratia payment made
to the employee by the Bank would be regarded as
Bonus (production, incentive or customary). This
Court held that it was not. It was held that it is not
possible to employ a term of service on the basis of
employment contract. It was held that the payment
made as ex gratia was neither in the nature of
production bonus nor incentive bonus nor
customary bonus and nor any statutory bonus. It
cannot be regarded as part of the contract
“employment”. It was accordingly held that the ex
22
gratia payment made by the Bank cannot be
regarded as remuneration paid or payable to the
employees in fulfillment of the terms of the contract
of employment within the meaning of definition of
wage under Section 2 (rr) of the ID Act.
37) We are, therefore, of the considered opinion
that the respondent rightly paid Rs.1103.40 to the
appellant by way of his wages for one month along
with his dismissal order. Such payment, in our
view, was made strictly in accordance with the
requirements of Section 2(y) read with Section 6E
(2) of the Act. On the other hand, we find that the
appellant failed to adduce any evidence to prove
that Rs.110/ was being paid to him every month by
the respondent as a part of his term of the
employment and, if so, under which head.
38) In view of the foregoing discussion, we are of
the view that the High Court was not justified in
holding that such amount, even if, held to be the
23
wages, the same could be adjustable against the
payments made by the respondent under other
head in the appellant’s monthly wages. The High
Court, in our view, failed to examine the main
question as to whether a payment of Rs.110/ was
in the nature of “wages” or its component within the
meaning of Section 2(y) of the Act. Without deciding
this question, the High Court held that such
amount could be adjusted against the payment
made by the employer (respondent) to the appellant
under “leave encashment”. In our opinion, it was
not the correct approach.
39) In the light of aforementioned reasons, though
we uphold the conclusion of the High Court but do
not agree to the reasoning on which such
conclusion is based.
24
40) In view of the foregoing discussion, we find no
merit in this appeal. It thus fails and is accordingly
dismissed.
………...................................J.
[ABHAY MANOHAR SAPRE]
…...……..................................J.
[INDU MALHOTRA]
New Delhi;
December 03, 2018
25
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. 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. 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.
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.
1
2) In order to appreciate the issues involved in
this appeal, which lie in a narrow compass, few
facts need mention hereinbelow.
3) The appellant (workman) was appointed on
26.05.1978 as Duplicating Machine OperatorcumClerk
by the respondent Northern India Textile
Research Association, Ghaziabad (UP). On
24.04.1987, the appellant was dismissed from
service on five charges of misconduct after holding a
Departmental Enquiry.
4) The respondent (employer) on 27.04.1987
moved an application before the Presiding Officer,
Industrial Tribunal at Meerut under Section 6E (2)
of the UP Industrial Disputes Act, 1947 (hereinafter
referred to as “the Act”) read with Rule 31 (2) of the
Rules (Adj case No. 53/1986) and sought approval
of the dismissal of the appellant. The respondent
contended that they have complied with all
necessary prerequisites for seeking approval as
2
provided in proviso to subSection (2) of Section 6E
of the Act.
5) During the pendency of approval proceedings,
the State Government, on 03.08.1988, also made an
Industrial Reference (31/1988) to the Industrial
Tribunal under Section 4K of the Act for deciding
the legality and correctness of the appellant’s
dismissal order dated 24.04.1987.
6) In the meantime, the appellant (workman) filed
his reply to approval proceedings (53/1986) filed by
the respondent in the Industrial Tribunal. The
appellant opposed the respondent's prayer for grant
of approval essentially on the ground that the
respondent (employer) did not ensure full
compliance with the prerequisites, which were
necessary for grant of approval to the dismissal
order in terms of proviso to subSection (2) of
Section 6E of the Act. The appellant contended that
in terms of proviso to subSection (2) of Section 6E
3
of the Act his services could not have been
discharged/dismissed unless he had been paid
“wages for one month”. It was contended that the
respondent though paid the wages for one month,
but did not pay “full wages of one month” to the
appellant.
7) In other words, the grievance of the appellant
was that the respondent was under legal obligation
to pay to the appellant full wages for one month so
as to enable them to obtain approval for his
dismissal as provided in subSection (2) of Section
6E of the Act but since there was a short payment
of Rs.110/ in total monthly wages, the respondent
could not be said to have ensured full compliance
with the proviso to subSection (2) of Section 6E of
the Act. It was contended that it is only after the full
compliance with Section 6E is done which is held
mandatory by this Court, the respondent becomes
entitled to claim its benefit else not. It was,
4
therefore, contended that since the respondent
failed to ensure full compliance with Section 6E of
the Act, no approval could be accorded to the
dismissal order as provided under Section 6E of the
Act.
8) The respondent filed rejoinder stating therein
the break up of the appellant’s monthly wages with
a view to show that they had paid full monthly
wages to the appellant as per the terms of
employment along with the dismissal order and,
therefore, there was a full compliance with proviso
to subSection (2) of Section 6E of the Act entitling
them to seek approval to the appellant’s dismissal
order.
9) In the meantime, the respondent filed an
application and sought permission of the Industrial
Tribunal to allow them to withdraw their application
which they had filed for obtaining approval to the
dismissal order. According to the respondent, in
5
view of the Industrial Reference No.31/1988 having
already made by the State to the Industrial Tribunal
wherein the legality and correctness of the dismissal
order was being examined, it was not necessary for
them to seek any approval to such dismissal order,
as required under Section 6E of the Act, from the
Industrial Tribunal.
10) By order dated 29.06.1990, the Industrial
Tribunal dismissed the respondent’s aforementioned
application. The respondent felt aggrieved and filed
a writ petition (W.P. No.18679/1990) in the High
Court. By order dated 11.02.1998, the High Court
allowed the writ petition and set aside the order
dated 29.06.1990. It was held that two parallel
proceedings in relation to the same matter cannot
be allowed to be continued. Felt aggrieved, the
appellant (workman) filed SLP(c) No. 8465/1998 in
this Court.
6
11) By order dated 28.03.2000, this Court allowed
the appeal, set aside the order of the High Court
and remanded the case to the High Court. This
Court held that firstly, the scope of proceedings
under the two provisions was entirely different; and
secondly, since the Act provided separate rights,
protection and remedies to the parties for
prosecuting these proceedings, the disposal of one
proceedings would not bring to an end the other.
The High Court was, therefore, requested to decide
the writ petition afresh on merits keeping in view
the observations made.
12) On remand, when the High Court took up the
writ petition for its disposal, the respondent did not
press their withdrawal application in view of the
decision of the Constitution Bench in Jaipur Zila
Sahakari Bhoomi Vikas Bank Ltd. vs. Ram Gopal
Sharma & Ors. (2002) 2 SCC 244 wherein it was
laid down that proviso to Section 33(2)(b) of the
7
Industrial Disputes Act, 1947, which is akin to
Section 6E of the Act, is unambiguous, clear and
equally mandatory in nature for ensuring its
compliance. It was held that if the employer has
failed to ensure compliance with the provisions and
the conditions stated therein, the discharge or
dismissal order passed by the employer would be
void and inoperative.
13) Since Section 6E of the Act is in pari materia
with Section 33(2)(b) of the Industrial Disputes Act,
the interpretation of Section 33 (2)(b) made by this
Court in Jaipur Zila Sahakari Bhoomi Vikas Bank
(supra) will have its full application to Section 6E of
the Act. The writ petition was accordingly dismissed
as having rendered infructuous.
14) The Industrial Tribunal thereafter proceeded to
try the reference on merits. An issue on the
question of compliance with Section 6E (2)(b) of the
Act, as directed by the High Court in the order
8
dated 02.03.2005 passed in W.P.No.13094/2005,
was accordingly framed. Parties adduced their
evidence.
15) So far as the appellant is concerned, he
adduced the evidence to prove that he was paid
total sum of Rs.1103.30 by way of his monthly
wages in terms of proviso to subSection (2) of
Section 6E of the Act along with the dismissal order
whereas his actual monthly wages payable was
Rs.1214.40 thereby leaving a deficit of Rs.110/.
The respondent on their part produced the wages
register to prove the appellant’s actual monthly
wages, its nature and also gave its break up.
16) By order dated 24.07.2008, the Industrial
Tribunal answered the reference in appellant's
favour. It was held that the respondent did not
ensure full compliance with proviso to Section 6E
(2) inasmuch as the respondent failed to pay full
wages of one month to the appellant. In other
9
words, it was held that there was a deficit of
Rs.110/ in paying monthly wages by the
respondent to the appellant along with the dismissal
order and hence the appellant was held deemed to
be in service as if no dismissal order had been
passed.
17) The respondent felt aggrieved by the order of
the Industrial Tribunal and filed a writ petition in
the High Court out of which this appeal arises. By
impugned order, the High Court allowed the writ
petition and set aside the order of the Industrial
Tribunal. It was held that assuming that there was
a short payment of Rs.110/ while paying monthly
wages to the appellant, yet since the respondent
had also paid a sum of Rs.1618.30 to him towards
leave encashment in his monthly wages, a sum of
Rs.110/ could always be adjusted out of
Rs.1618.30. It was accordingly held that in this
way, it can be held that the respondent has ensured
10
full compliance with Section 6E(2) of the Act while
paying monthly wages to the appellant along with
his dismissal order. The High Court, therefore,
accorded sanction to the respondent as required
under Section 6E(2) of the Act and upheld the
dismissal order as being legal.
18) The workman (appellant herein) felt aggrieved
and has filed the present appeal by way of special
leave in this Court.
19) Three questions arise for consideration in this
appeal. First, whether the High Court was justified
in allowing the respondent's writ petition and
thereby was justified in setting aside the order of
the Industrial Tribunal; Second, whether an isolated
payment of Rs.110/ made by the employer
(respondent) to the employee (appellant) by way of
interim relief (ex gratia) in August 1986 in monthly
wages can be regarded as wages under Section 2(y)
read with Section 6E(2) of the Act or in other words,
11
whether such payment is a part of the appellant’s
monthly wages; and third whether the respondent
can be held to have paid wages for one month to the
appellant in compliance with the requirements of
Section 6E (2) of the Act so as to enable them to
claim sanction to the appellant’s dismissal order.
20) Heard Mr. Sanjay Parikh, learned counsel for
the appellant and Mr. Jitendra Mohan Sharma,
learned senior counsel for the respondent.
21) Having heard the learned counsel for the
parties at length and on perusal of the record of the
case, we are inclined to uphold the conclusion
arrived at by the High Court but we do so on our
reasoning given hereinbelow. In other words, though
we uphold the conclusion arrived at by the High
Court, but not the reasoning of the High Court.
This we say for the following reasons.
22) In our view, the respondent’s application made
under Section 6E(2) of the Act deserves to be
12
allowed by granting them approval to the appellant’s
dismissal.
23) Section 2 (y) and Section 6E (2) of the Act are
relevant. They are quoted below:
“Section 2(y)
‘Wages’ means all remuneration capable of
being expressed in terms of money, which
would, if the terms of employment, expressed
or implied, were fulfilled, be payable to a
workman in respect of his employment, or of
work done in such employment, and
includes:
(i) such allowances (including dearness
allowance) as the workman is for the
time being entitled to;
(ii) the value of any house accommodation,
or of supply of light, water, medical
attendance or other amenity or of any
service or of any concessional supply of
foodgrains or other articles;
(iii) any traveling concession, but does not
include
(a) any bonus;
(b) any contribution paid or payable
by the employer to any pension
fund or provident fund or for the
benefit of the workman under any
law for the time being in force;
13
(c) any gratuity payable on the
termination of his service.
Section 6E
Conditions of service, etc. to remain
unchanged in certain circumstances during
the pendency of proceedings –
(1) ……………….
(2) During the pendency of any such
proceeding in respect of an industrial
dispute, the employer may, in
accordance with the standing orders
applicable to a workman concerned in
such dispute
(a)………………
(b) for any misconduct not connected
with the dispute, discharge or punish,
whether by dismissal or otherwise;
Provided that no such workman shall be
discharged or dismissed, unless he has been
paid wages for one month and an application
has been made by the employer to the
authority before which the proceeding is
pending for approval of the action taken by
the employer.”
(emphasis supplied)
24) Section 2(y) defines the term ‘wages’ whereas
Section 6E provides that condition of service of a
workman has to remain unchanged in certain
14
circumstances. Proviso to Section 6E(2) says that no
workman can be discharged or dismissed from the
services unless he has been paid wages for one
month and an application is made by an employee
to an authority before whom the proceedings are
pending for approval of the action taken by the
employer against the workman.
25) Coming to the facts of this case, to answer
these three questions posed above, we find that the
appellant has relied on the break up of his monthly
wages. It is this amount which, according to the
appellant, should have been paid to him by the
respondent as a precondition to give effect to his
dismissal order. The break up reads as under:
Basic Salary Rs.
334.00
F.D.A Rs.
108.00
F.D.A Rs.
62.00
A.D.A Rs.
494.35
15
Interim Relief Rs.
110.00
H.R.A. Rs.
75.60
C.C.A. Rs.
30.45
Rs.1214.
40
26) So far as the respondent is concerned, they
relied on the details of the appellant’s monthly
wages payable/paid to him at the time of his
dismissal in full and final satisfaction. It reads as
under:
1. Salary for April from 1.4.87 to
27.4.89 4 days under LWP
suspension 926.70
2. Increments from 25.11.86 to
31.3.87 67.90
994.60
Less:PF/EPF deduction 73.00
3. Leave encashment for 44 days 1618.30
4. One months notice pay as per
provision of UP Industrial
Disputes Act Section 6E(2)(b) 1103.40
3643.30
16
27) According to the appellant, there was a short
payment of Rs.110/ because he was paid
Rs.1103.40 whereas his monthly wages was
Rs.1214.40.
28) The stand of the respondent was that there
was no short payment because a sum of Rs.110/
was paid to the appellant only once in August 1986
by way of ex gratia in the form of “interim relief”.
This sum, i.e., (Rs110/), according to the
respondent, was thereafter never paid to the
appellant after August, 1986 till 24.04.1987 (date of
dismissal order). It is for this reason, the
respondent contended that a sum of Rs.110/ is
neither a wage and nor its component and nor the
appellant has any right in law to claim such amount
under the terms of his employment from the
respondent.
29) What types of payment would constitute a
wage or its component within the meaning of the
17
word “wages” as defined under Section 2 (rr) of the
Industrial Disputes Act has been the subject matter
of several decisions of this Court. The word “wages”
defined in Section 2(y) of the Act is in peri materia
with the definition of word “wages” defined in
Section 2(rr) of the Industrial Disputes Act.
30) A question arose before the Three Judge Bench
in the case of Bharat Electronics Limited vs.
Industrial Tribunal, Karnataka, Bangalore & Anr.
(1990) 2 SCC 314 as to whether “night shift
allowance” would form part of “wages” in the context
of Section 33 (2) (b) of the Industrial Disputes Act,
1947.
31) Justice M.M. Punchhi (as His Lordship then
was and later CJI) speaking for the Bench examined
the object of Section 33(2)(b) of the Industrial
Disputes Act. After referring to earlier decision of
this Court in Syndicate Bank Limited vs.
Ramanath (1968) 1 SCR 327, it was held that the
18
intention of the legislature in providing for such a
contingency is not far to seek. It was held that the
section was enacted “to soften the rigour of
unemployment that will face the workman against
whom an order of discharge or dismissal has been
passed”. This Court held that one month's wages as
thought and provided to be given are conceptually
for the month to follow, the month of unemployment
and in the context wages for the month following
the date of dismissal and not a repetitive wage of
the month previous to the date of dismissal. This
Court further held that if the converse is read in the
context of the proviso to Section 33(2)(b), it
inevitable would have to be read as double the
wages as earned in the month previous to the date
of dismissal and that would, in our view, be reading
in the provision something which is not there, either
expressly or impliedly. This Court held that we have
to blend the contextual interpretation with the
19
conceptual interpretation to come to the view that
night shift allowance could never be part of wages,
and those would be due only in the event of
working. It was held that the conclusion is
inescapable that the workman had to earn night
shift allowance by actually working in the night shift
and his claim to that allowance was contingent
upon his reporting to duty and being put to that
shift. It was held that the night shift allowance
automatically did not form part of his wages and it
was not such an allowance which flowed to him as
his entitlement not restricted to his service.
32) Now coming to the facts of this case, we find
that it has come in evidence that the respondent
had paid Rs.110/ to the appellant in August 1986
by way of “interim relief” as an ex gratia payment. It
is not in dispute that a sum of Rs.110/ was paid
only once in August 1986 and not thereafter.
20
33) In our opinion, such payment cannot be
termed either as wages or its component within the
meaning of Section 2 (y) read with Section 6E (2) of
the Act.
34) The reason is that any isolated one time ex
gratia payment made by way of an interim relief
neither satisfies the requirement of Section 2 (y) and
nor it satisfies the requirement of clauses (i) to ( iii )
of Section 2 (y) of the Act.
35) If such amount had been paid regularly by the
respondent to the appellant in compliance with his
terms of employment, it would have been regarded
as wages or its component within the meaning of
Section 2(y) of the Act. In order that any payment is
regarded as “wages”, it must be proved that it was
being paid by the employer to his employee
21
pursuant to the terms of his employment. It is only
then a right is created in employee’s favour to claim
such amount from the employer provided the
employee proves that he has fulfilled the terms of
his employment.
36) A question arose before the Two Judge Bench
in Ghaziabad Zila Sahkari Bank Ltd. vs.
Additional Labour Commissioner & Ors. (2007) 11
SCC 756 as to whether any ex gratia payment made
to the employee by the Bank would be regarded as
Bonus (production, incentive or customary). This
Court held that it was not. It was held that it is not
possible to employ a term of service on the basis of
employment contract. It was held that the payment
made as ex gratia was neither in the nature of
production bonus nor incentive bonus nor
customary bonus and nor any statutory bonus. It
cannot be regarded as part of the contract
“employment”. It was accordingly held that the ex
22
gratia payment made by the Bank cannot be
regarded as remuneration paid or payable to the
employees in fulfillment of the terms of the contract
of employment within the meaning of definition of
wage under Section 2 (rr) of the ID Act.
37) We are, therefore, of the considered opinion
that the respondent rightly paid Rs.1103.40 to the
appellant by way of his wages for one month along
with his dismissal order. Such payment, in our
view, was made strictly in accordance with the
requirements of Section 2(y) read with Section 6E
(2) of the Act. On the other hand, we find that the
appellant failed to adduce any evidence to prove
that Rs.110/ was being paid to him every month by
the respondent as a part of his term of the
employment and, if so, under which head.
38) In view of the foregoing discussion, we are of
the view that the High Court was not justified in
holding that such amount, even if, held to be the
23
wages, the same could be adjustable against the
payments made by the respondent under other
head in the appellant’s monthly wages. The High
Court, in our view, failed to examine the main
question as to whether a payment of Rs.110/ was
in the nature of “wages” or its component within the
meaning of Section 2(y) of the Act. Without deciding
this question, the High Court held that such
amount could be adjusted against the payment
made by the employer (respondent) to the appellant
under “leave encashment”. In our opinion, it was
not the correct approach.
39) In the light of aforementioned reasons, though
we uphold the conclusion of the High Court but do
not agree to the reasoning on which such
conclusion is based.
24
40) In view of the foregoing discussion, we find no
merit in this appeal. It thus fails and is accordingly
dismissed.
………...................................J.
[ABHAY MANOHAR SAPRE]
…...……..................................J.
[INDU MALHOTRA]
New Delhi;
December 03, 2018
25
