Glaxo Laboratories (India) Ltd. v. City Magistrate. Aligarh
1989-07-12
S.K.DHAON
body1989
DigiLaw.ai
ORDER S. K. Dhaon, J. - This and the companion Writ Petition No. 94(X1 of 1987 at the instance of the same employer, stem from proceedings initiated by the same workman under S. 15(2) of the Payment of Wages Act. 1936 (hereinafter referred to as the Act). They arise out of different but similar orders passed by the City Magistrate, Aligarh, acting as the Authority under the Act. The controversy raised in them is the same. Therefore. they can be conveniently disposed of by a common judgment. 2. M/s. Glaxo Laboratories (India) Ltd. is factory within the meaning of the Factories Act. M is. Glindia Limited (formerly M/s. Glaxo Laboratories (India) Limited) too is a factory within the meaning of the said Act. Sri B.B.L. Pandey the respondent No. 2 in both the writ petitions (hereinafter referred to as the workman), made an application under S. 1512) of the Act complaining of the deduction of wages during the months of May to July. 1986. He made a similar complaint With respect to the months of August and September. 1986. The first complaint has given rise to the instant writ petition and the second complaint has given rise to Writ Petition No. 94(X)of 1987. In both the cases, the petitioners raised a preliminary objection that the Authority had no jurisdiction to entertain the application under S. 15(2). In both the cases the Authority disposed of three issues as preliminary issues and in substance. held that the applications were maintainable and the sum claimed by the workman constituted wages within the meaning of the Act. In this petition the appeal preferred by the petitioners against the decision on the preliminary issues was dismissed by the Appellate Authority on the ground that the appeal was incompetent. Therefore, the appellate order too is being impugned. In the other writ petition no appeal was preferred and therefore, the order of the Authority alone is being assailed. 3. The material facts, in brief, are these. The workman and some others were given a charge-sheet alleging therein misconduct on their part. A domestic enquiry was held and the Enquiry Officer submitted his report. The Management took a decision to dismiss the workman from service.
3. The material facts, in brief, are these. The workman and some others were given a charge-sheet alleging therein misconduct on their part. A domestic enquiry was held and the Enquiry Officer submitted his report. The Management took a decision to dismiss the workman from service. Since an industrial dispute No. 4 of 1978 was pending before the Industrial Tribunal the order of dismissal could not be made effective without the prior permission of the Industrial Tribunal as contemplated by the provisions of S. 6-E of the U. P. Industrial Disputes Act, 1947 (hereinafter referred to as the U. P. Act). By its letter dated 26th May, 1978, the Management informed the workman that an application seeking permission to dismiss him from service was being made to the Tribunal and his services would stand suspended without wages till such time the application made by it (the Management) under S. 6-E of the U. P. Act is disposed of. The workman was also informed that the order dismissing him from service will become effective from 27th May, 1978, if such a permission was granted. The application under S. 6-E is pending before the Industrial Tribunal. On 4th July, 1976 a settlement was arrived at in accordance with the provisions of S. 4-F of the U. P. Act and R. 5(1) of the Rules framed thereunder between the petitioners factory and its workmen through the Glaxo Staff Association (hereinafter referred to as the Union). The recitals in the preamble of the settlement. as relevant, are these : "A dharna before the factory gates was held by women and children (including the wives and children of the workmen suspended). The Union on 29th May, 1978, resolved that unless action against the 11 workmen was not withdrawn with immediate effect a strike in the establishment would commence from 00 hours on 1st June. 1978. Hunger strike by 2 workmen would also commence from 29th May, 1978. The strike did commence from 1st June, 1978. Two workmen went on hunger strike from 29th .May, 1978. By its order dated 5th June, 1978, the Government prohibited the strike. In spite of the prohibition the strike continued till 8.00 A.M. on 21st June, 1978. The strike was called off unconditionally on 21st June, 1978. The Union approached the Management to hold negotiations.
Two workmen went on hunger strike from 29th .May, 1978. By its order dated 5th June, 1978, the Government prohibited the strike. In spite of the prohibition the strike continued till 8.00 A.M. on 21st June, 1978. The strike was called off unconditionally on 21st June, 1978. The Union approached the Management to hold negotiations. Negotiations were held on 4th July, 1978 in presence of the Assistant Regional Conciliation Officer." The relevant terms of the settlement are these. The Management. on humanitarian grounds and as a gesture of grace and as a special case and without forming a precedent for future, will pay subsistence allowance equal to 75% of the wage with effect from the date on which the application was made to the Industrial Tribunal seeking the dismissal of the 7 concerned workmen. If the proceedings before the Industrial Tribunal extend beyond 180 days, because of reasons directly attributable to the concerned workmen, payment of subsistence allowance will be reduced to 25%. The suspended workmen will obey all lawful orders and instructions of the Management during the period of suspension and if they fail to do so, the subsistence allowance will be stopped. During the period of suspension the workmen will not engage themselves in any other employment. If they accept any employment during the period of suspension in any place. they will not be entitled for any subsistence allowance and the same will be stopped. The Union and the said workmen assured that they shall not resort to and/or support any Dharnas, hunger strike, strike, prevention of movements of men and materials to and from the factory. 4. On 13th July, 1978, another settlement was arrived at. By it, the Management agreed to increase the subsistence allowance from 75% to 1(X)% with effect from 16th July, 1978, with respect to the workman and some others. However. it was made clear that the subsistence allowance was being paid on purely humanitarian ground and without creating any precedent and also subject to the condition that all the provisions of the agreement dated 4th July, 1978, were acceptable and would be accepted by the Union as well as by the 7 suspended workmen. 5. According to the petitioners, the workman, on 4th February. 1981, entered into the factory premises.
5. According to the petitioners, the workman, on 4th February. 1981, entered into the factory premises. addressed the general body meeting of the Union and delivered inflammatory and instigatory speeches although he had been directed not to enter into factory premises. The workman unlawfully travelled by the staff bus of the Management. He also addressed a meeting at the gate. He was given a show cause notice as to why the subsistence allowance be not stopped for violating the conditions of the settlement dated 4th July, 1978. The reply given by the workman was not found satisfactory by the Management. By a letter dated 15th July. 1986, issued by the Manager of the factory the workman was informed that the payment of the subsistence allowance had been stopped. 6. Sub-section (1) of S. 6-b of the U. P. Act is analogous to the provision as contained in sub-section (1) of S. 33 of the Industrial Disputes Act, 1947 (hereinafter referred to as the Central Act). The aforesaid provisions prohibit the exercise of the common law right of an employer or a master to dismiss its employees or servants on justifiable grounds. They impose a ban on the exercise of such a right with the rider that the embargo will be lifted only if permission is granted by the Industrial Tribunal or the Labour Court concerned. In the Management, Hotel Imperial, New Delhi v. Hotel Workers' Union, AIR 1959 SC 1342 , a question arose before the Hon'ble Judges as to whether an employer or a master, having decided to dismiss its employee or servant from service could, during the pendency of the proceedings for the accord of permission under sub-section (1) of S. 33 of the Central Act sever the relationship of either master and servant or employer and employee during the limited period of the pendency of the proceedings for permission before the concerned Industrial Tribunal or Labour Court. Speaking through Wanchoo.
Speaking through Wanchoo. J. (as he then was), the Court observed that the ordinary law of master and servant as to suspension can be and should be held to have been modified in view of the fundamental change introduced by S. 33 in that law and a term should be implied by industrial Tribunals in the contract of employment that if the master has held a proper enquiry and come to the conclusion that the servant should be dismissed and in consequence suspends him pending the permission required under S. 33. he has the power to order such suspension. thus suspending the contract of employment temporarily, so that there is no obligation on him to pay wages and no obligation on the servant to work. The undisputed common law right of the master to dismiss his servant for proper cause has been subjected by S. 33 to a ban; and that in fairness must mean that. pending the removal of the said statutory ban, the master can after holding a proper enquiry temporarily terminate the relationship of master and servant by suspending his employee pending proceedings under S. 33. It follows, therefore. that if the Tribunal grants permission, the suspended contract would come to an end and there will be no further obligation to pay any wages after the date of suspension. If, on the other hand. the permission is refused, the suspension would be wrong and the workman would be entitled to all his wages from the date of suspension. 7. The theory of implied term in the contract of employment in the context of S. 33 of the Central Act as expounded in hotel Imperial's case ( AIR 1959 SC 1342 ) (supra) is, it appears, by implication approved by six Hon'ble Judges of the Supreme Court in the case of V. P. Giudroniya v. State of Madhya Pradesh. AIR 1970 SC 1494 : (1970 Lab IC 13321. 8. In Delhi Cloth aped General Mills Co. Ltd. v. Ganesh Dutt, 1972 Lab IC 504 (SC), two Hon'ble Judges (C. A. Vaidialingam and K. K. Mathew, ''J.) held that the suspension of an employee pending percussion of the Tribunal in proceedings under S. 33(1)(b) of the Central Act for dismissing him is not illegal.
8. In Delhi Cloth aped General Mills Co. Ltd. v. Ganesh Dutt, 1972 Lab IC 504 (SC), two Hon'ble Judges (C. A. Vaidialingam and K. K. Mathew, ''J.) held that the suspension of an employee pending percussion of the Tribunal in proceedings under S. 33(1)(b) of the Central Act for dismissing him is not illegal. Their Lordships relied upon the view taken in the Management, Hotel Imperial's case ( AIR 1959 SC 1342 ) (supra) that the ordinary law of master and servant as to suspension can be and should be held to have been modified in view of the fundamental change introduced by S. 33 in that law and a term should be implied by the Industrial Tribunals in the contract of employment that if the master has held a proper enquiry and come to the conclusion that the servant should he dismissed and in consequence suspends him after the permission required under S. 33. he has the power to order such suspension. thus suspending the contract of employment temporarily, so that there is no obligation on him to pay wages and no obligation on the servant to work. 9. In Fakirhhai Fulhhai Solanki v. Presiding Officer. 1986 Lab IC 879: ( AIR 1986 SC 1168 , a workman, during the pendency of a reference made under the Central Act to the Industrial Tribunal, was charge-sheeted on the ground of misconduct. The Enquiry Officer found him guilty. The Management decided to dismiss h ;,n, but because the workman was a protected workman as defined in the Explanation to sub-section (3) of S. 33 of the Central Act and the permission of the Tribunal had to be obtained before dismissing him as required by sub-section (3) of S. 33 of that Act, the Management made an application to the Tribunal for such permission. However, the workman was suspended from service with effect from a certain date pending disposal of the application before the Tribunal. alter he had been found guilty at the domestic enquiry, but without any wages or allowances. A complaint under S. 33-A was filed by the workman. The Tribunal allowed tie application under sub-section (3) of S. 33 of the Central Act made by the Management and rejected the complaint under S. 33-A made by the workman. No subsistence allowance was paid to the workman.
A complaint under S. 33-A was filed by the workman. The Tribunal allowed tie application under sub-section (3) of S. 33 of the Central Act made by the Management and rejected the complaint under S. 33-A made by the workman. No subsistence allowance was paid to the workman. It as held by a Bench of two Hon'bie Judges that it followed from the provisions of sub-section (3) of S. 33 that the workman did not cease to he a workman until the Tribunal granted pet mission to dismiss the workman and the Management dismissed the workman pursuant to such permission. As order of suspension by itself did not put the employment to an end, the workman continued to be an employee during the period of suspension. On behalf of the employer the decision in Management. Hotel Imperial's case ( AIR 1959 SC 1342 ) (supra) was pressed into service. Their Lordships pointed out that in the Management. Hotel Imperial's case the Court did not consider whether the denial of payment of subsistence allowance during the pendency of the proceedings under S. 33(3) of the Act would amount to violation of principles of natural justice. Their Lordships also took the view that he effect of suspension from service was not that it put to an end the relationship of master and servant altogether. Their Lordships relied upon a case of Khem Chand v. Union of India, AIR 1963 SC 687 , a decision given by five Hon'ble Judges In Khem Chand's case the Court speaking through Das Gupta. J. laid down that an order of suspension of a Government servant did not put to an end his service. He continued to he a member of the service in spite of the order of suspension. Though he continued to be a member of the Government service; he was not permitted to work. However, during the period of his suspension he was paid only some allowance generally called "subsistence allowance" which is normally less than his salary. 10. The view taken by the Supreme Court in Fakirbhai Bulabhai's case (1956 Lab IC is diametrically opposed to the view expressed in the Management. Hotel Imperial's case (AIR 1959 SC 1312). these petitions cannot he decided by me by giving respect to both the decisions. Learned Counsel opposing each other have used the two decisions :is their respective sheet-anchors.
10. The view taken by the Supreme Court in Fakirbhai Bulabhai's case (1956 Lab IC is diametrically opposed to the view expressed in the Management. Hotel Imperial's case (AIR 1959 SC 1312). these petitions cannot he decided by me by giving respect to both the decisions. Learned Counsel opposing each other have used the two decisions :is their respective sheet-anchors. Khem Chand's case (AIR 1963 SC N S7) dealt with the effect of an order of suspension of services of a Government servant. As already indicated. in that case it was held that in spite of the order of suspension a Government servants continued to he it member of the service. V. P. Gindroniy's case (1970 Lib IC 1332 (SC) too dealt with the case of a Government servant. In it, it was held that the right to suspend the contract of service of it public servant during. the pendency of an enquiry is regulated by the contract of employment or the provisions regulating the conditions of service. In this care it was also emphasised that it Government servant may merely he forbidden from discharging his duties during the pendency of an enquiry against him which act is also called suspension. A conflict of opinion between Khem Chand's case and V.P. Gindroniva's case can be avoided if the view is taken that Khem Chand's case was confined to that class of orders of suspension which merely forbade a public servant from discharging his duties during the pendency of an enquiry against him. However. if the contention of the learned Counsel for the respondents that Khem Chand's case dealt exhaustively with all types of orders of suspension of a Government servant is accepted. a conflict of opinion in the two cases cannot he avoided. 11. There appears to be an inevitable impasse. Luckily the Supreme Court itself has shown a way out. In Mattu Lai v. Radhey Lal, AIR 1974 SC 1596 it was held that if it is not possible to reconcile the observations made in the decisions then the decision of a larger Bench should he followed.
11. There appears to be an inevitable impasse. Luckily the Supreme Court itself has shown a way out. In Mattu Lai v. Radhey Lal, AIR 1974 SC 1596 it was held that if it is not possible to reconcile the observations made in the decisions then the decision of a larger Bench should he followed. In Union of India v. K. S. Subramanian, AIR 1976 SC 2433 at page 2437: (1976 Lab IC 1551 at p. 54) it was held that if a High Court is confronted with conflicting decisions of the Supreme Court, the proper course for a High Court, in such a case, is to find out and follow the opinion expressed by the larger Bench of the Supreme Court in preference to those expressed by the smaller Benches of the Court. Such it practice is followed by the Supreme Court itself. The practice has now crystallised into a rule of law declared by the Supreme Court. In State of U.P. v. Ram Chandra Trivedi, AIR 1976 SC 2517 at page 2556 : ( 1976 Lab IC 1647 at p. 1657), it is held that in case where it High Court finds any conflict between the views expressed by larger and smaller Benches of the Supreme Court, it cannot disregard or skirt the view expressed by the larger Benches. The appropriate course for it High Court in such a case is to try to find out and follow the opinion expressed by larger Benches in preference to those expressed by smaller Benches of the Supreme Court. Similar view has been taken by the Supreme Court in the case of State of Orissa v. Titaghur Paper Mills, AIR 1985 SC 1293 and the Union of India v. Godfrey Philips India Limited, AIR 1986 SC 806 . Finally. the aforementioned cases have been quoted with approval by the Supreme Court in the case of A. R. Antulay v. R. S. Nayak, AIR 1988 SC 1531 . 12. In A. R. Antulay's case the principle in England that the size of the Bench - Whether it is comprised of two or three or more Judges does not matter and the later decision should be followed has not been accepted by the Supreme Court. The Supreme Court has held that according to well-settled law and various decisions of that Court.
The Supreme Court has held that according to well-settled law and various decisions of that Court. it is well-settled that a Full Bench or a Constitution Bench decision as in Anwar All Sarkar's case (. AIR 1952 SC 75 ) was binding on the Constitution Bench because it was Bench of. seven Judges. 13. In U. P. State Road Transport Corporation v. State Transport (Appellate) Tribunal. U. P. Lucknow, AIR 1977 All I (FB) a Bench of three Hon'ble Judges had been constituted to resolve the alleged conflict between the decisions given in the cases of Ram Sanehi Singh v. Bihar State Road Transport Corporation, (1971) 3 SCC 797 and Mysore State Road Transport Corporation v. The Mysore State Transport Appellate Tribunal, AIR 1974 SC 1940 . Both the decisions had been rendered by three Hon'ble Judges of the Court. However, in the later case one of the Hon'ble Judges gave a 4 4 dissenting judgment. Obviously the decision given in Mysore State Road Transport Corporation's case was it later one. This Court observes that even if there is some conflict in the two decisions of the Supreme Court, we have to follow the law as declared in the later case of Mysore State Road Transport Corporation. It is to be presumed that this Court was aware of the decisions of the Supreme Court in the cases of Mattu Lal v. Radhey Lal ( AIR 1974 SC 1596 ): Union of India v. Subramanian (1976 Lab IC 1551 and the State of U. P. v. Ram Chandar Trivedi (1976 Lab IC 1647). Therefore. I find no difficulty in taking the view that this Court did not and could not intend to take the view that an earlier decision of the Supreme Court, though of a larger Bench. will give way to a later decision given by a smaller Bench. Their Lordships were dealing with two decisions of the Supreme Court of equal strength. In any view of the matter, the latest view of the Supreme Court in A. R. Antulay's case L AIR 1988 SC 1531 1 discards the principle prevalent in England that the later decision holds the field. 14. The law declared by the Supreme Court in the Management of Hotel imperial's case ( AIR 1959 SC 1342 ) is binding on this Court and has to he given full effect. Therefore.
14. The law declared by the Supreme Court in the Management of Hotel imperial's case ( AIR 1959 SC 1342 ) is binding on this Court and has to he given full effect. Therefore. the question is, whether the authority has jurisdiction to entertain the applications made by the workman under S. I5(2) of the Act? The preamble to the Act discloses that the purpose of the enactment is to regulate the payment of wages to certain classes of employed persons. By Section 2 of Act 38 of 1982 the words "persons employed in industry" have been substituted by the words "employed persons". Sub-section (4) of S. I of the Act inter alia, provides that its provisions are applicable to the payment of wages to persons employed in any factory and persons employed in industries and other establishments. As defined in S. 2 "factories" has been given the same meaning as contained in clause (m) of S. 2 of the Factories Act, 1948. The definition of "wages" as contained in S. 2 and as relevant to the present controversy means "all remuneration payable to a person employed in respect of his employment or a work done in such employment". Section 3 provides that every employer shall he responsible for the payment to persons employed by him of all wages required to he paid under the Act. Sub-section (2) of S. 15 gives a right to an employed person etc. to make an application to the payment of Wages Authority complaining therein the deduction from the wages of an employed person. For the purposes of aforementioned provisions of the Act. the Legislature should he presumed to have in view the same concept of employment. There appears to he no intention, either express or implied, to the contrary in any of the said provisions. The concept of employment involves three ingredients. They are : I i t employer: (2) employees: and 13) contract of employment. The employer is one who employees, i.e., who engages services of other persons. The employee is one who works for another for hire. the employment is the contract of service between the employer and the employee wherein the employee agrees to serve the employer subject to his control and supervision. See Chintaman Rao v. State of Madhya Pradesh, AIR 1958 SC 388 . 15. Applying the ratio of the decision of the Supreme Court in the Management.
the employment is the contract of service between the employer and the employee wherein the employee agrees to serve the employer subject to his control and supervision. See Chintaman Rao v. State of Madhya Pradesh, AIR 1958 SC 388 . 15. Applying the ratio of the decision of the Supreme Court in the Management. Hotel Imperial's case ( AIR 1959 SC 1342 ), the conclusion is inevitable that no relationship of employer or employee or master or servant exists between the petitioners and the workman and the contract of service between the petitioners and the workman is in abeyance. To put it differently, on the date when the workman complained under sub- section (2) of S. 15 of the Act he (the workman) was not an employed person within the meaning of that provision nor was he a person employed within the meaning of the definition of "wages". In the instant case, the wages alleged to have been deducted accrued subsequent to the suspension of the workman by the petitioners. 16. Let us now examine the effect of the settlements dated 4th July, 1978 and 13th July, 1978. The relevant provisions of the preamble and the terms have already been set out above. In substance, the Management (the petitioner) had agreed to pay subsistence allowance to the workman purely on humanitarian grounds. Therefore, the Management agreed to make ex-gratia payments to the workman. It is clear from the terms of the settlements that the Management neither expressly nor impliedly gave up its implied right under the contract of employment to severe the relationship of master and servant or employer and employee till the decision of the industrial Dispute in proceedings under S. 6-E of the U. P. Act. It is to be presumed that the Management was aware of its rights as declared by the Supreme Court in the case of the Management, Hotel Imperial's case, AIR 1951 SC 1342. 17. The net result is that the decision of the petitioners to suspend 'he workman without wages thereby sovering the relationship of master and servant or employer and employee stood intact all along and that position obtains even now.
17. The net result is that the decision of the petitioners to suspend 'he workman without wages thereby sovering the relationship of master and servant or employer and employee stood intact all along and that position obtains even now. It necessarily follows that the authority under the Act had no jurisdiction to entertain the applications made by the workman under sub-section (2) of S. I5 of the Act and it patently erred in taking, a contrary view in the two impugned orders. It also follows that the petitioners are entitled to the relief claimed that a suitable relief quashing the applications filed under sub-section (2) of S. 15 of the Act be granted. The District Judge was perfectly justified in taking the view that the appeal preferred by the petitioners against the findings of the Authority on preliminary issues was not maintainable. However, the order of the District Judge need not be quashed as the order of the Authority has not merged into his order. 18. The petitions succeed and are allowed. The orders dated 11th Jan., 1987 and 16th Feb., 1987 passed by the payment of Wages Authority are quashed. The applications made by the workman under sub-section (2) of S. 15 of the Act are also quashed. 19. There shall be no order as to costs in both the writ petitions.