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Supreme Court of India
Sri Dorairaj Spintex vs R. Chittibabu on 22 September, 2021Author: Hon’Ble Dr. Chandrachud
Bench: Hon’Ble Dr. Chandrachud, Vikram Nath, B.V. Nagarathna
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No 5897 of 2021
(Arising out of SLP (Civil) No 30511 of 2018)
Sri Dorairaj Spintex …. Appellant(s)
Versus
R Chittibabu & Ors ….Respondent(s)
JUDGMENT
Dr. Dhananjaya Y. Chandrachud, J
1 Leave granted.
2 The appeal arises from a judgment of a Division Bench of the High Court of
Judicature at Madras dated 14 March 2018. The High Court dismissed the Letters
Patent Appeal filed by the management against a judgment of a Single Judge. The
Single Judge had upheld an order dated 31 March 2003 of the Assistant
Commissioner of Labour, Dindigul, rejecting an application filed by the
management under Section 33(2)(b) of the Industrial Disputes Act 1947 1. The
management is in appeal.
3 The appellant had an establishment which was functioning in Dindigul District. An
Signature Not Verified
Digitally signed by
Sanjay Kumar
Date: 2021.10.05
12:41:43 IST
application was filed by the appellant on 16 November 2002 before the Assistant
Reason:
Commissioner of Labour under Section 33(2)(b) of the ID Act for the grant of
1 “ID Act”
2
approval of its action to dismiss thirty-one workmen against whom disciplinary
proceedings had been initiated and concluded. The material facts which need to
be summarized for the purpose of the present appeal are thus: On 4 July 2002, the
workmen raised an industrial dispute under Section 2(k) of the ID Act. The dispute
was taken into conciliation. While the conciliation proceedings were pending, the
workers commenced a stay-in strike on 31 July 2002. On 1 August 2002, another
dispute was raised by the workmen, which was taken into conciliation. The
management initially suspended forty-seven workmen. A charge memo was issued
to the workmen on 20 August 2002 to which there was a reply on 30 August 2002.
The management commenced a domestic enquiry. After the conclusion of the
enquiry, a show cause notice was issued to the workmen on 29 October 2002. On 16
November 2002, an order of dismissal was issued. Following the order of dismissal,
the management filed an application for approval before the Assistant
Commissioner of Labour under Section 33(2)(b).
4 The Assistant Commissioner of Labour held that since conciliation proceedings were
pending with reference to a dispute which was raised by the workmen on 4 July
2002 and, subsequently, on 1 August 2002, prior approval before the termination
was necessary under Section 33(1)(b) and that the action of management in taking
steps in pursuance of Section 33(2)(b) was unlawful. The application for approval
under Section 33(2)(b) was rejected. The order of the Assistant Commissioner of
Labour was challenged in writ proceedings before the High Court. By a judgment
dated 4 March 2013, the Single Judge held that since conciliation proceedings
were pending before the Conciliation Officer, “even though the dismissal order is for
some other reason”, yet the prior approval of the authority specified in terms of
Section 33(1)(b) was necessary. The order of the Single Judge was carried in appeal
before the Division Bench. The Division Bench, while affirming the judgment,
3
directed the appellant to pay (i) 50% of the back wages for the period from the
date of dismissal till the date of the closure of the appellant’s unit; (ii) closure
compensation; and (iii) interest at 6% per annum calculated from the date of
closure. The appellant has closed its unit from 8 July 2009.
5 Mr Niraj Kumar Singh, counsel appearing on behalf of the appellant, submits that
the Assistant Commissioner of Labour failed to notice the distinction between
Section 33(1)(b), which postulates a requirement of prior approval, and Section
33(2)(b), on the other hand, which requires compliance with two conditions,
namely, (i) payment of one month’s salary, which is not in dispute; and (ii) the filing
of an application to the authority before which the proceeding is pending for
approval of the action taken by the employer. Counsel submitted that the
provisions of Section 33(1)(b) are attracted when the action of the management is
in respect of any misconduct connected with the dispute. On the other hand,
where the action of the management is for misconduct not connected with the
dispute, Section 33(2)(b) would stand attracted. On the above premises, it has been
urged that the Assistant Commissioner of Labour erred in rejecting the application
for approval on the ground that prior approval under Section 33(1)(b) was required.
6 On the other hand, Mr T Harish Kumar, counsel appearing on behalf of the
respondent – workmen, submitted that, by an order dated 10 February 2020 passed
by the Chamber Judge in these proceedings, the appeal stands dismissed as
against Respondent Nos 10, 22, 26 and 31, who had died during the pendency of
the proceedings before the High Court for failure to bring the legal representatives
on the record. Besides this, it has been submitted that the workmen had raised an
industrial dispute initially on 4 July 2020 which was taken into conciliation and,
thereafter, another industrial dispute was raised on 1 August 2020 in respect of
4
which conciliation proceedings were in progress. Hence, it has been submitted that
on a holistic view of the provisions of Section 33(1)(b), the termination of the
workmen for misconduct is a matter which must be held to be connected with the
dispute. Hence, it was submitted that the provisions of Section 33(1)(b) and not
Section 33(2)(b) would stand attracted. In the absence of prior approval, the
termination was, according to the counsel, unlawful and the Assistant Commissioner
of Labour was correct in rejecting the application.
7 The rival submissions fall for consideration.
8 Sections 33(1) and 33(2), upon which the dispute in the present case turns, are
extracted below for convenience of reference:
“33. Conditions of service, etc., to remain unchanged under
certain circumstances during pendency of proceedings.-
(1) During the pendency of any conciliation proceeding
before a conciliation officer or a Board or of any
proceeding before an arbitrator or a Labour Court or
Tribunal or National Tribunal in respect of an industrial
dispute, no employer shall,–
(a) in regard to any matter connected with the dispute,
alter, to the prejudice of the workmen concerned in such
dispute, the conditions of service applicable to them
immediately before the commencement of such
proceeding; or
(b) for any misconduct connected with the dispute,
discharge or punish, whether by dismissal or otherwise, any
workmen concerned in such dispute,
save with the express permission in writing of the authority
before which the proceeding is pending.
(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
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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, or
discharge or punish, whether by dismissal or otherwise, that
workman:
Provided that no such workman shall be discharged or
dismissed, unless he has been paid wages for one month
and an application has been made by the employer to
the authority before which the proceeding is pending for
approval of the action taken by the employer….”
9 The basic premise underlying Section 33(1) is that during the pendency of the
conciliation proceedings before a Conciliation Officer or a Board or of any
proceeding before an arbitrator or a Labour Court or Tribunal or National Tribunal in
respect of an industrial dispute, an employer is prohibited from (a) altering the
conditions of service of the workmen; or (b) dismissing, discharging or punishing the
workmen in respect of any matter or misconduct connected with the dispute save
with the express permission in writing of the authority before which the proceeding is
pending. Both in the context of clause (a) as well as clause (b) of sub-Section (1),
the crucial words are “connected with the dispute”. Clause (a) of sub-Section (1)
deals with an alteration of the conditions of service in regard to any matter
connected with the dispute. Clause (b) deals with discharge or punishment,
whether by way of dismissal or otherwise, of a workman for any misconduct
connected with the dispute. Where the connection with the dispute exists, Section
33(1) requires the prior permission in writing of the authority before whom a
proceeding is pending.
6
10 On the other hand, Section 33(2) applies to (i) an alteration of the conditions of
service in regard to a matter not connected with the dispute; or (ii) the discharge or
punishment, whether by way of dismissal or otherwise, of a workman for misconduct
which is not connected with the dispute. The distinction between sub-Section (1)
and sub-Section (2) lies in whether the action which is proposed by the employer
during the pendency of a conciliation proceeding is or is not connected with the
dispute. Whether the action is connected to the dispute has to be determined on
the basis of the facts of each case.
11 When the ID Act was enacted, Section 33 imposed a ban on the employer
discharging, dismissing or punishing a workman during the pendency of
proceedings before the Tribunal and other specified authorities “except for
misconduct not connected with the dispute”. By Amending Act 48 of 1950, Section
33 was substituted and a complete ban was imposed against discharge, dismissal or
punishment of a workman during the pendency of proceedings before the Court
and other specified authorities. The right of the employer to take action even for
misconduct was withdrawn. Parliament being conscious of the need for discipline in
industry amended the provision by substituting Section 33 by Act 36 of 1956 so as to
restore to the employer the right to take punitive action in specified conditions. The
impact of the legislative change was noticed in a judgment of three judges of this
Court in Strawboard Manufacturing Company Ltd. v. Govind 2, Justice KN Wanchoo,
speaking for the three judge Bench observed :
“3. Before however we turn to the interpretation of the proviso we
may refer to the circumstances in which Section 33(2) came to be
enacted. Originally there was no such provision like Section 33(2)
in the Act and the only provision to be found therein
corresponded to the present Section 33(1). The object behind
enacting Section 33 as it was before the amendment of 1956 was
2 (1962) Supp 3 SCR 618
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to allow continuance of industrial proceedings pending before
any authority prescribed by the Act in a calm and peaceful
atmosphere undisturbed by any other industrial dispute. The plain
object of the section was to maintain the status quo as far as
possible during the pendency of any industrial dispute before a
tribunal. But it seems to have been felt that Section 33, as it stood
before the amendment of 1956, was too stringent for it completely
took away the right of the employer to make any alteration in the
conditions of service or to make any order of discharge or
dismissal without making any distinction as to whether such
alteration or such an order of discharge or dismissal was in any
manner connected with the dispute pending before an industrial
authority. It seems to have been felt therefore that the stringency
of the provision should be softened and the employer should be
permitted to make changes in conditions of service etc. which
were not connected with the dispute pending before an Industrial
Tribunal. For the same reason it was felt that the authority of the
employer to dismiss or discharge a workman should not be
completely taken away where the dismissal or discharge was
dependent on matters unconnected with the dispute pending
before any tribunal. At the same time it seems to have been felt
that some safeguards should be provided for a workman who
may be discharged or dismissed during the pendency of a dispute
on account of some matter unconnected with the dispute.
Consequently Section 33 was redrafted in 1956 and considerably
expanded. It is now in five sub-sections while before 1956 it
consisted practically of what is now sub-section (1).”
This decision was also confirmed by a Constitution Bench of this Court in Jaipur Zila
Sahakari Bhoomi Vikas Bank Ltd v. Ram Gopal Sharma and Ors. 3. These provisions
have been interpreted in several decisions of this Court including Chartered Bank,
Bombay v. Chartered Bank Employees’ Union 4; Tata Oil Mills Co. Ltd v. Workmen 5 ;
PD Sharma v. State Bank of India 6; Air India Corporation v. Rebellow 7; Workmen of
Sudder Office, Cinnamara v. Management of Sudder Office 8; and Mahendra Singh
Dhantwal v. Hindustan Motors Ltd 9. Where the termination for misconduct is not
3
AIR 2002 SC 643
4 (1960) 3 SCR 441
5 (1964) 7 SCR 555
6 (1968) 3 SCR 91
7 (1972) 1 SCC 814
8 (1972) 4 SCC 746
9 (1976) 4 SCC 606
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connected to the industrial dispute, Section 33(2)(b) recognizes the authority of the
employer to initiate disciplinary action while at the same time imposing safeguards.
They are intended to balance the disciplinary jurisdiction of the employer with the
need to ensure that there is no victimization of the workmen.
12 In the present case, the order of the Assistant Commissioner of Labour takes note of
the fact that initially a dispute was raised on 4 July 2002 by the workmen under
Section 2(k) based on the following demands:
“1. Passed (sic) on seniority in the spoiling unit, the workmen
should be posted as sider and arya lifters
2. The monthly salary for the workmen working in the factory
should be paid before 7th of the month
3. The workmen working in the factory shall be given hygienic
drinking water
4. The women workmen working in the factory should be
given two protective clothes to protect from the accident
in every year.”
13 The demand was received in the office of the Conciliation Officer and conciliation
proceedings were in progress. The Union commenced a stay-in strike. Another
dispute was raised on 1 August 2002 for the grant of permanency to the workmen in
the factory and the conciliation proceedings were initiated on the demand. The
management convened the disciplinary proceeding on the ground that the
workmen had indulged in acts of vandalism involving the property of the employer.
The disciplinary proceedings were convened for acts of vandalism involving the
property of the employer. The misconduct for which the enquiry was convened had
no connect with the demands by the workmen. In the first of the two conciliation
proceedings, the demand of the workmen was for promotional avenues, the
payment of monthly salary before the seventh day of each month, drinking water
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and protective clothing. In the second conciliation proceedings, the workmen had
claimed the status of permanency. The disciplinary enquiry was held in respect of
the acts of misconduct alleged to have been committed by the workmen involving
the property of the employer. These dismissal for misconduct cannot be regarded
as being connected to the dispute which was raised in conciliation, as noted
above. The Assistant Commissioner of Labour came to the conclusion that the
enquiry was conducted in accordance with the principles of natural justice and
entered a finding of fact that there was no evidence to indicate that some of the
workmen were protected workmen. The Assistant Commissioner of Labour also held
that on 2 August 2002, a law and order problem had arisen as a result of which the
management had initiated disciplinary proceedings. Nonetheless, the Assistant
Commissioner of Labour came to the conclusion that once conciliation
proceedings were initiated, prior approval under Section 33(1)(b) was necessary
and this finding has been confirmed both by the Single Judge and the Division
Bench of the High Court. In entering this finding, all the three fora have clearly lost
sight of the distinction between sub-Section (1) and sub-Section (2) of Section 33 of
the ID Act. The Single Judge noticed that the dismissal was for some other reason,
yet held that Section 33 (1)(b) was attracted. There has been no independent
application of mind by the Division Bench at all.
14 Once we have come to the conclusion that the action of dismissal for misconduct
was not connected with the dispute which was pending in conciliation, the
provisions of Section 33(2)(b) of the ID Act would stand attracted. There is no dispute
about the fact that there was compliance of the provisions of Section 33(2)(b), nor is
there a finding to the contrary. In this view of the matter, the order of the Assistant
Commissioner of Labour was contrary to law and there was an error on the part of
the Single Judge and the Division Bench in affirming the order. We accordingly
10
allow the appeal and set aside the impugned judgment and order of the Division
Bench of the High Court of Judicature at Madras dated 14 March 2018. In
consequence, the application for approval filed by the appellant under Section
33(2)(b) of the ID Act would stand approved.
15 Since the appeal stands rejected against Respondent Nos 10, 22, 26 and 31 in
pursuance of the order of the Chamber Judge dated 10 February 2020, we clarify
that this order shall not affect the entitlement of the legal representatives of the
deceased – workmen to the benefits which flow in accordance with law.
16 There shall be no order as to costs.
17 Pending application, if any, stands disposed of.
………………………….……………………..J.
[Dr Dhananjaya Y Chandrachud]
…..…..…….………..……………….………..J.
[Vikram Nath]
…..…..…….………..……………….………..J.
[B V Nagarathna]
New Delhi;
September 22, 2021
-S-
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ITEM NO.7 Court 4 (Video Conferencing) SECTION XII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s).30511/2018
(Arising out of impugned final judgment and order dated 14-03-2018
in WA No. 1292/2013 passed by the High Court of Judicature at
Madras)
SRI DORAIRAJ SPINTEX Petitioner(s)
VERSUS
R. CHITTIBABU & ORS. Respondent(s)
Date : 22-09-2021 This petition was called on for hearing today.
CORAM :
HON’BLE DR. JUSTICE D.Y. CHANDRACHUD
HON’BLE MR. JUSTICE VIKRAM NATH
HON’BLE MRS. JUSTICE B.V. NAGARATHNA
For Petitioner(s) Mr. Niraj Kumar Singh, Adv. Mr. Satyajeet Kumar, AOR
For Respondent(s) Mr. T. Harish Kumar, AOR
Mr. Navneet Dugar, Adv.
Mr. Shubham Kothari, Adv.
UPON hearing the counsel the Court made the following
O R D E R
1
(SANJAY KUMAR-I) (SAROJ KUMARI GAUR)
AR-CUM-PS COURT MASTER
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