AIR INDIA v. S. GANAPATHI — 1986 DIGILAW 27 (BOM)

JUDGMENT : Pendse, J.—By this petition filed under Article 226 of the Constitution of India, the petitioner-Air India are challenging the legality of the order dated April 30, 1983 passed by the Presiding Officer, National Industrial Tribunal, Bombay, dismissing the application seeking approval to the action of removal of respondent No. 1 u/s 33(2)(b) of the Industrial Disputes Act, 1947 (hereinafter referred to as 'the Act'). The facts giving rise to filing of that application are as follows. 2. Respondent No. 1 was an employee of Air India and working as Traffic Supervisor in the Commercial Department at Calcutta. On or about Nov. 17, 1980 a charge-sheet was issued to respondent No. 1 alleging wilful insubordination, disobedience and disorderly behaviour and wilful damage to the work and property of the Corporation. The charge pertains to the actions of respondent No. 1 on Nov. 9, 1980 and Nov. 12, 1980. The charge-sheet recites that respondent No. 1 on Nov. 9, 1980 took away some of the important flight papers in respect of the flights to be operated on that day and misbehaved with his superior officer; while on Nov. 12, 1980 the employee was found preventing passengers from flying on the flight AI-302 stating that the flights were not safe. The inquiry committee was constituted to examine the charges framed against the employee, and the inquiry committee constituted under the Regulations, submitted report holding respondent No. 1 guilty of the charges levelled. By an order dated Nov. 3, 1981 the competent authority accepted the report and ordered that the employee be removed from service from the date of the communication of the order. The order was forwarded to the employee along with a demand draft for the sum of Rs. 1,675.24 as required by the proviso to Sub-clause (b) of Section 33(2) of the Act, On the same day, that is Nov. 7, 1981, the petitioner filed an application u/s 33(2) of the Act before the Presiding Officer of the National Industrial Tribunal for approval of the action taken by the petitioners. Three other applications for approval against three other employees were also filed before respondent No. 2. Tribunal and all the four applications were heard and disposed of by a common order, which is under challenge. 3. Three other applications for approval against three other employees were also filed before respondent No. 2. Tribunal and all the four applications were heard and disposed of by a common order, which is under challenge. 3. The employees raised various contentions before the Industrial Tribunal and the findings recorded by the Tribunal are that the complaint of the employees that the charge-sheets served on them were invalid and vague and therefore the proceedings were vitiated was without any substance. The Tribunal further held that the complaint that the inquiry committee acted both as Judge and as prosecutor, was not correct. The Tribunal recorded a clear cut finding that the inquiry committee had conducted the inquiry fairly and properly and in accordance with principles of natural justice. The Tribunal did not accept the charge that the inquiry committee did not examine the witnesses or put leading questions to those witnesses who were examined. The Tribunal further held that the order of dismissal and the payment of wages and the application for approval were done simultaneously by the Corporation. After rejecting all the preliminary objections raised on behalf of the employees, the Tribunal proceeded to reject the application for approval on the ground that one month's wages were not paid to the employees. The claim that one month's wages were not paid was based on three grounds, first that the washing allowance was not included in the wages, but this contention was given up at the hearing after perusal of the pay bills. The second ground was that the shift allowance was not included in one month's wages, but this cause was negatived by the Tribunal holding that the shift allowance was not payable when the employees were not working on the shifts. The third ground, which prevailed with the Tribunal was that the professional tax under the West Bengal State Tax on Professions, Callings and Employments Act, 1979 should not have been deducted from one month's wages. On this ground alone, the Tribunal held that the requirements of proviso to Section 33(2)(b) of the Act are not complied with and thereupon the approval was refused. The order of the Tribunal is under challenge. 4. Shri Taleyarkhan, learned counsel appearing on behalf of the petitioners, submitted that the finding recorded by the Tribunal that the provisions of proviso to Section 33(2)(b) are not complied with is entirely erroneous. The order of the Tribunal is under challenge. 4. Shri Taleyarkhan, learned counsel appearing on behalf of the petitioners, submitted that the finding recorded by the Tribunal that the provisions of proviso to Section 33(2)(b) are not complied with is entirely erroneous. To appreciate the submission of the learned counsel, it is necessary to set out the relevant provisions of Section 33(2) of the Act. "33. Conditions of service, etc. to remain unchanged under certain circumstances during 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, or, where there are no such standing orders, in accordance with the terms of the contract, whether express or implied between him and the workman, - (a) alter, in regard to any matter not connected with the dispute, the conditions of service applicable to that workman immediately before the commencement of such proceeding; or (b) for any misconduct not connected with the dispute, discharge or punish, whether by dismissal or otherwise, that workmen: 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". The Tribunal held that the application for approval of order of dismissal and payment of wages was done simultaneously by the Corporation, but the approval was refused on the ground that the Corporation was in error in deducting the professional tax from the wages of one month payable to the employees. Shri Taleyarkhan submits that the finding of the Tribunal is wrong because under the provisions of the West Bengal State Tax on Professions, Callings and Employments Act, 1979, an obligation is cast on the employer to deduct arid pay tax on behalf of the employees. Section 3 of this Act is a charging section and provides that there shall be levied and collected a tax on profession, trade, callings and employment in accordance with the provisions of the Act. Section 3 of this Act is a charging section and provides that there shall be levied and collected a tax on profession, trade, callings and employment in accordance with the provisions of the Act. Section 4 prescribes that the tax payable under the Act by any person earning a salary or wage shall be deducted by his employer from the salary or wages payable to such person, before such salary or wages are paid and the employer shall, irrespective of whether such deduction has been made or not, be liable to pay the tax. The expression "salary or wage" has been defined u/s 2(j) and includes pay, clearness allowance and all other remunerations received by any person on regular basis, whether payable in cash or in kind, and also includes perquisite and profits in lieu of salary as defined in Section 17 of the Income Tax Act, 1961. Shri Taleyarkhan submits that Section 17(3) of the Income Tax Act deals with the "profits in lieu of salary" and the expression includes the amount of any compensation due to or received by an assessee from his employer or former employer, at or in connection with the termination of his employment. Relying upon the provisions of the Income Tax Act, Shri Taleyarkhan contended that the management was under a statutory obligation to deduct the tax out of one month's wages before it was paid over to the employee. The submission is correct and deserves acceptance. Shri Damania, learned counsel appearing on behalf of the employee, on the other hand urged that what is paid to the employee under the proviso to Section 33(2)(b) of the Act is not a compensation or an amount in connection with the termination of the employment, but the amount is given by the employer merely as a monetary assistance out of humanitarian consideration and therefore it is not permissible to deduct professional tax from this amount. It is not possible to accept this contention. It is not possible to accept this contention. The plain words of proviso to Section 33(2)(b) of the Act makes it clear that the workman shall be paid wages for one month and whether the wages are paid to an employee who has been dismissed or to an employee who is in service makes no difference because of the expression "profits in lieu of salary" u/s 17(3) of the Income tax Act includes an amount of compensation received from the employer or former employer in connection with termination of the employment. In my judgment, the conclusion recorded by the Tribunal that the deduction of the professional tax by the Corporation was without justification and that the deduction must lead to the conclusion that one month's wages were not paid to the employee is unsustainable and deserves to be set aside. It is interesting in this connection to note that the employee did not raise this contention in the written statement but advanced it for the first tune during the arguments. The refusal of the Tribunal to grant approval on the ground of non-compliance with the proviso to Section 33(2)(b) of the Act therefore cannot be upheld and is required to be set aside. 5. Shri Damania then submitted that the Tribunal has not recorded findings on other issues raised by the employees before the Tribunal and the question as to whether the approval should be given or not cannot be concluded in the present proceedings but the matter will have to be remitted back to the Tribunal for determination of other issues. The learned counsel urged that at least at five places in the order the Tribunal has observed that the issues raised by the employees would be examined while scrutinising the evidence on merits and that exercise would be done at the time of final hearing of the application on merits. Shri Damania submits that the Tribunal has not examined other questions raised by the employees, and therefore, the matter will have to be remitted. The submission advanced by Shri Damania is correct and deserves acceptance. The Supreme Court examined the ambit of inquiry in proceedings u/s 33(2)(b) of the Act in a decision reported in Lalla Ram Vs. Management of D.C.M. Chemical Works Ltd. and Another, (1978) 3 SCC 1 and set out five requirements which must be satisfied before grant of approval. The submission advanced by Shri Damania is correct and deserves acceptance. The Supreme Court examined the ambit of inquiry in proceedings u/s 33(2)(b) of the Act in a decision reported in Lalla Ram Vs. Management of D.C.M. Chemical Works Ltd. and Another, (1978) 3 SCC 1 and set out five requirements which must be satisfied before grant of approval. The Supreme Court observed : "In the proceedings u/s 33(2)(b) of the Act, the jurisdiction of the Industrial Tribunal is confined to the enquiry as to (i) whether a proper domestic enquiry in accordance with the relevant Rules/Standing Orders and principles of natural justice has been held; (ii) Whether a prima facie case for dismissal based on legal evidence adduced before the domestic tribunal is made out; (iii) whether the employer had come to a bona fide conclusion that the employee was guilty and the dismissal did not amount to unfair labour practice and was not intended to victimise the employee, regard being had to the position settled by the Supreme Court that though generally speaking the award of punishment for misconduct under the Standing Orders is a matter for the management to decide and the Tribunal is not required to consider the propriety or adequacy of the punishment or whether it is excessive or too severe yet an inference of mala fides may in certain cases be drawn from the imposition of unduly harsh, severe, unconscionable or shockingly disproportionate punishment; (iv) whether the employer has paid or offered to pay wages for one month to the employee; and (v) whether the employer has simultaneously or within such reasonable short time as to form part of the same transaction applied to the authority before which the main industrial dispute is pending for approval of the action taken by him. If these conditions are satisfied, the Industrial Tribunal would grant the approval which would relate back to the date from which the employer had ordered the dismissal. If these conditions are satisfied, the Industrial Tribunal would grant the approval which would relate back to the date from which the employer had ordered the dismissal. If, however, the domestic inquiry suffers from any defect or infirmity, the labour authority will have to find out on its own assessment of the evidence adduced before it whether there was justification for dismissal and if it so finds it will grant approval of the order of dismissal which would also relate back to the date when the order was passed provided the employer had paid or offered to pay wages for one month to the employee and the employer had within time applied to the authority before which the main industrial dispute is pending for approval of the action taken by him ". 6. Shri Taleyarkhan submits that the Tribunal has recorded a finding that the domestic inquiry held by the Corporation was in accordance with the relevant Rules/Standing Orders and principles of natural justice were not violated. The Tribunal also held that the employer has simultaneously applied to the authorities before which the main industrial dispute is pending for approval of the action taken against the employee and the Corporation had paid wages for one month to the employee. The submission of Shri Taleyarkhan is correct and it is clear that the Tribunal has concluded in favour of the Corporation on the three requirements set out at (i), (iv) and (v) in the Supreme Court decision. Shri Damania submits that the requirements at (ii) and (iii) set out in the judgment were not examined by the Tribunal and therefore the matter is required to be remitted back to the Tribunal. After pursuing the entire order of the Tribunal, the submission deserves acceptance. Shri Damania invited my attention to an application filed on behalf of the employees before the Tribunal on March 8, 1983 and the order passed thereunder. By this application the employees submitted that apart from the preliminary issues raised by the Tribunal, two more issues should be framed and those two issues were: (1) whether the finding of the inquiry officer was perverse, basically erroneous or mala fide, and (2) whether the inquiry officer and the competent authority applied their minds before coming to the decisions in regard to the delinquents on all material aspects. The Tribunal while passing the order observed that the Tribunal will go through all evidence to record its finding on those points if they survive after the findings on the preliminary issues and further observed that no preliminary hearing was required on those points. The order of the Tribunal indicates that the Tribunal had left this question open for consideration at the final hearing. It would have been better if the Tribunal had disposed of the entire matter at one time instead of framing preliminary issues. The result of framing preliminary issues and recording finding thereon, leaving open the other issues for further determination, has caused serious prejudice, both to the employer and the employee. The term of the Presiding Officer and the Industrial Tribunal has come to an end and it would be necessary for the Government of India to appoint another person to decide the matter after remand. As the result of the recording of the finding on the preliminary issues, the matter has remained pending for over three years and is again required to be remitted back. All this difficulty could have been avoided if the Tribunal had disposed of all the points at one hearing instead of framing the preliminary issues. 7. In these circumstances the order of the Tribunal is required to be set aside and the matter is remitted back for disposal. The Tribunal on remand will only examine whether the requirements (ii) and (iii) as mentioned in the judgment of the Supreme Court referred to hereinabove are satisfied or not. The Tribunal shall proceed on the basis that the requirements (i), (iv), (v) are satisfied. The Tribunal shall try to dispose of the matter, as early as possible: 8. Shri Damania submits that by an interim order passed in this petition, the Corporation was directed to deposit the full wages payable to respondent No. 1 from May 1983 onwards and the employee was given permission to withdraw it on an undertaking to repay the same, in case the petition succeeds. The learned counsel urged that the respondent employee should be permitted to retain the amount till the final disposal of the application by the Tribunal and the employee is giving a further undertaking that the amount would be repaid back to the Corporation, in case the Tribunal grants approval to the action proposed by the Corporation. The learned counsel urged that the respondent employee should be permitted to retain the amount till the final disposal of the application by the Tribunal and the employee is giving a further undertaking that the amount would be repaid back to the Corporation, in case the Tribunal grants approval to the action proposed by the Corporation. I accept the undertaking and direct that the employee shall repay the amount received by him up-til-now to the Corporation in case the 'Tribunal grants approval as sought by the Corporation u/s 33(2)(b) of the Act. The Corporation is naturally not bound to deposit any more amount in pursuance of the interim order passed by this Court. 9. Accordingly, petition succeeds and the impugned order dated April 30, 1983 passed by the Presiding Officer, National Industrial Tribunal, Bombay is set aside and the matter is remitted back to the National Industrial Tribunal for fresh disposal in the light of the observations made in this judgment. The respondent No. 1 employee undertakes to repay the entire amount received by him from the Corporation in pursuance of the interim order passed by this Court, in case the Tribunal grants approval u/s 33(2)(b) of the Act. The undertaking of the employee is accepted. In the circumstances of the case, there will be no order as to costs.