The Workmen vs K.Shanthi
2022 Latest Caselaw 13676 Mad

Citation : 2022 Latest Caselaw 13676 Mad
Judgement Date : 2 August, 2022

Madras High Court

The Workmen vs K.Shanthi on 2 August, 2022

                                                                              Order dated : 02.08.2022
                                                                      Contempt Petition No.989 of 2020

                              IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                            DATED: 02.08.2022

                                                  CORAM

                            THE HONOURABLE MR. JUSTICE S.M.SUBRAMANIAM

                                      Contempt Petition No.989 of 2020

                The Workmen
                represented by the Secretary,
                Industrial Estate General Workers Union,
                No.11, Lawyer Jaganathan Street,
                Guindy, Chennai - 32.                                           ... Petitioner

                                                     Vs.

                K.Shanthi, IAS,
                Chief Executive Officer,
                Tamil Nadu Khadi and Village
                  Industries Board,
                Guindy Unit, No.11,
                Industrial Estate, Guindy,
                Chennai - 32.
                Address change of
                Now at Tamil Nadu Khadi & Village
                   Industries Board,
                Kuralagam, Chennai - 600 108.                                   ... Respondent

                PRAYER: Contempt Petition filed u/s.11 of the Contempt of Courts Act
                praying to initiate contempt proceedings against the respondent for committing
                willful disobedience of the order of this Court passed on 15.11.2019 in
                W.P.No.39320 of 2015.



https://www.mhc.tn.gov.in/judis
                1/6
                                                                                  Order dated : 02.08.2022
                                                                          Contempt Petition No.989 of 2020

                                  For Petitioner   : Mrs.R.Vaigai, Senior Advocate
                                                     for M/s.Anna Mathew

                                  For Respondent   : Mr.P.S.Raman, Senior Advocate
                                                     for Mr.S.K.Bose
                                                         *****

                                                   ORDER

This contempt petition was filed to punish the respondent for willfull

disobedience of the order of this Court passed in W.P.No.39320 of 2015 dated

15.11.2019.

2. After several hearings, the respondent passed an order implementing

the directions issued by this Court.

3. Learned Senior Counsel appearing on behalf of the respondent made a

submission that as per the statutory provision and based on the advice of the

audit unit of the department, TDS has been deducted as lump sum amount is to

be paid to the workmen as per the orders of this Court.

4. Learned Senior Counsel appearing on behalf of the contempt

petitioner raised an objection by stating that the lump sum amount is not

pertaining to one financial year and it is to be spread over for more than 20

https://www.mhc.tn.gov.in/judis

Order dated : 02.08.2022 Contempt Petition No.989 of 2020

years and therefore, TDS cannot be deducted. Each year entitlement is to be

ascertained and accordingly, payment is to be made. In this regard, learned

Senior Counsel relied on the judgment of the Supreme Court in U.P.State Road

Transport Corporation v. Muniruddin [(1990) 4 SCC 464], wherein it has

been held thus:

"5. In the instant case also we are of the view that ends of justice require that such a relief should be granted. Taking into consideration all these aspects including that the respondent would have been entitled for some retirement benefits, we award Rs.35,000 and direct the U.P.State Road Transport Corporation, the appellant herein, to pay this amount to the respondent within two months from today. Since the amount would be received in lump sum by the respondent, it may attract the levy of income tax. But since the amount represents the salary and allowances over the last so many years the respondent may make an application under Section 89 of the Income Tax Act for spreading over this lump sum amount. We may also point out that in similar circumtances, this Court in Sundaram Motors Pvt. Ltd. v. Ameerjan [(1985) 1 SCC 118] where the compensation by way of lump sum amount was awarded, observed that the same should be spread over and gave a dirction to the concerned Income Tax Officer to give immediate relief under Section 89 without further enquiry.

6. Accordingly we direct the Corporation to pay the lump sum amount of Rs.35,000 without deducting income tax. Since the respondent is entitled for relief under Section 89 of the Income Tax Act, he shall make an application to the concerned Income Tax Officer who shall give the necessary relief without any further enquiry. The appeal is disposed of accordingly. In the circumstances of the case there will be no order as to costs."

5. In the case of Workmen of American Express International Banking

Corporation v. Management of American Express International Banking

https://www.mhc.tn.gov.in/judis

Order dated : 02.08.2022 Contempt Petition No.989 of 2020

Corporation and others [1987 (Supp) SCC 590], the Hon’ble Supreme Court

made the following observation:

"Learned counsel appearing for both the parties informs us that the matter has been settled. The workman Ravi Chandran will forthwith tender his resignation. In addition to the amount of Rs.81,000 already paid to the workman, he will be paid a sum of Rs.1,06,500 (Rs.One lakh six thousand five hundred) only in full and final settlement of all his claims against respondent management of American Express International Banking Corporation within two months. The management will not deduct any amount of income tax from this amount. This amount will be spread over in previous years under the provisions of Section 89 read with Rule 21-A of Income Tax Act, 1961 in terms of the judgment of this Court in Sant Raj v. O.P.Singla [(1985) 2 SCC 349]. The appeal is disposed of accordingly. No costs."

6. In yet another case in Management of Rourkela Fertiliser Plant,

Hindustan Steel Ltd., Rourkela v D.S.Verma and another [1987 (Supp) SCC

400], the Hon’ble Supreme Court has held thus:

"... On his delivering the vacant possession of the premises to the Management the amount of Rs.1,50,000 shall be paid to respondent 1. The sum of Rs.1,50,000 may be spread over equally over the period commencing from May 1, 1975 up-to-date. This direction we have given for the purpose of Section 89 of the Income Tax Act, 1961. This order is made in substitution of tthe order of the Industrial Tribunal."

7. Relying on the above judgments, learned Senior Counsel appearing on

behalf of the contempt petitioner made a submission that TDS cannot be

deducted and therefore, backwages are to be paid in lump sum to the workmen

as per the calculation.

8. In reply, learned Senior Counsel appearing on behalf of the respondent https://www.mhc.tn.gov.in/judis

Order dated : 02.08.2022 Contempt Petition No.989 of 2020

made a submission that the provident fund contribution is to be deducted as per

the provisions of the Act and Rules.

9. There is no impediment for deducting the provident fund contribution

as per the Act and Rules. However, it is made clear that TDS amount need not

be deducted and appropriate application is to be filed before the Income Tax

Department for necessary orders. Thus, it is made clear that the respondent