Madras High Court
M.Madhan vs The Management Of Mrf Limited on 1 October, 2024
Author: M.S.Ramesh
Bench: M.S. Ramesh
2024:MHC:3502
W.A.No.948 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on 09.09.2024
Pronounced on 01.10.2024
CORAM :
THE HONOURABLE MR. JUSTICE M.S. RAMESH
AND
THE HONOURABLE MR. JUSTICE C.KUMARAPPAN
W.A.No.948 of 2024
and
C.M.P.No.6794 of 2024
M.Madhan ...Appellant
Vs.
The Management of MRF Limited,
Represented by its Managing Director,
P.B.No.5285, Thiruvottiyur,
Chennai – 600 019. ...Respondent
Prayer: Writ Appeal filed under Clause 15 of the Letters Patent, to set
aside the order of this Court dated 31.10.2023 passed in W.P.No.20445
of 2023.
For Appellant : Mr.V.Prakash, Sr. Counsel
for Ms.Radhaa Priya A.M.
For Respondent : Mr.Vijayan
for M/s.King & Partridge
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Page 1 of 21
W.A.No.948 of 2024
JUDGMENT
M.S.RAMESH, J.
1.1. On the strength of the proven charges of misconduct, the
appellant/workman was dismissed from service on 30.09.2016 by the
respondent/Management. Together with the order of dismissal, the
workman was paid one month wages amounting to Rs.18,051.70/- and
had also filed an application in A.P.No.84 of 2016 on the same day before
the Industrial Tribunal, Chennai, as mandated under the Proviso to
Section 33(2)(b) of the Industrial Disputes Act (hereinafter referred to as
'the Act').
1.2. Before the Tribunal, the workman had filed an application
under Section 11 of the Act, seeking for dismissal of the approval
application, in I.A.No.20 of 2019 for non-compliance of the mandatory
requirement of payment of one month wages under the Proviso to Section
33(2)(b) of the Act. According to the workman, his one month wages
would amount to Rs.26,145/-, which also includes an interim relief
amount of Rs.4,000/- ordered to be paid, as per the order passed by this
Court and confirmed by the Hon'ble Supreme Court of India, together
with an amount of Rs.203/-, which is the concessional value of health
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drinks coupons and coconut oil.
1.3. The Tribunal, through its order dated 03.12.2021, had found
that the Management had not paid the workman the full wages for one
month and therefore, since has not complied with the requirements under
the Proviso to Section 33(2)(b) of the Act, rejected the application in
A.P.No.84 of 2016.
1.4. When the Management had challenged the order of the
Tribunal before the learned single Judge of this Court in W.P.No.20445 of
2023, the Writ Petition came to be allowed on 31.10.2023, by holding
that the Tribunal had erred on the following counts:-
“a) Inordinate delay of more than five years in
deciding on the approval petition.
b) Misinterpreting the components of the monthly
wages paid to the respondent without
understanding the amount payable was contingent
or not.
c) Not clarifying whether Rs.4,000/- as interim
allowance was paid for September 2016 or not.
d) Concluding on the one month wages based on
earlier months' pay slips.
e) Not adverting its attention to the validity of the
domestic enquiry.”
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2. The aforesaid order of the learned single Judge is assailed in this
intra-court appeal.
3. The learned senior counsel appearing on behalf of the workman
submitted that the learned single Judge had traversed beyond the scope of
judicial review under Article 226 of the Constitution of India and had
interfered with the order of the Tribunal like an Appellate Authority.
According to the learned senior counsel, though the workman had
claimed for inclusion of several allowances, he restricted the claim to
include a sum of Rs.4,000/- per month towards wages, which is an
interim relief ordered by the Tribunal in I.D.No.08 of 2014, dated
12.08.2015, which order was confirmed till the Hon'ble Supreme Court,
together with a sum of Rs.203/-, which is the concessional value of health
drinks coupons and coconut oil, which amounts were regularly paid to
the workman, prior to his dismissal. With such submissions, he submitted
that the payment of partial wages is opposed to the mandate under the
Proviso to Section 33(2)(b) of the Act, as well as several decisions of the
Hon'ble Supreme Court.
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4. On the contrary, the learned counsel for the Management put
forth his submissions in two folds. Firstly, he would submit that since the
defacto relationship between the workman and the Management had
ended from the date of his dismissal, he would not be entitled for the
payment of the interim relief of Rs.4,000/-, since he would not be
performing his duties after the order of dismissal. Secondly, he raised a
similar objection stating that since the workman will not be undertaking
any physical duty after the date of his dismissal, he would not be entitled
to seek for concessional value of health drinks coupons and coconut oil.
With such submissions, he placed reliance on the decision of the Hon'ble
Supreme Court in the case of S.Ganapathy and Others Vs. Air India
and Another reported in (1993) 3 SCC 429 and submitted that even
assuming that the workman was entitled for the interim relief, as well as
the concessional value of health drinks coupons and coconut oil, the
Tribunal ought to have granted approval to the Management, with a
condition to pay the differential amount in the one month wages.
5. The claim of a sum of Rs.4,000/-, payable to the workman in the
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monthly wages, relates to an order pending dispute, touching upon the
charter of demands in I.D.No.08 of 2014 before the Tribunal. This order
of the Tribunal, awarding an interim relief to the workman pending the
main Industrial Dispute, was taken up on appeals and ultimately
confirmed by the Hon'ble Supreme Court, fixing the interim relief at
Rs.4,000/-. The fact that the workman was receiving this interim relief of
Rs.4,000/- till his date of dismissal, is not in dispute. When the workman
had claimed that his one month wage paid under Section 33(2)(b) of the
Act did not include the interim relief of Rs.4,000/-, the Management had
admitted the non-payment, but had raised an objection stating that the
interim relief is not a remuneration, which falls under the definition of
'Wages' under Section 2(rr) of the Act. Likewise, a similar objection was
also raised by the Management for non-inclusion of the concessional
value of health drinks coupons and coconut oil.
6. The Tribunal had observed in its order that the interim relief is a
remuneration, which is a part of the definition of 'Wages' under Section
2(rr) of the Act, as well as under the definition of 'Wages' under the
Payment of Wages Act. The fact that the workman was being paid every
month a sum of Rs.4,000/- by the Management, as well as the
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concessional value of health drinks coupons and coconut oil, was also
taken into account by the Tribunal and thereby had come to the
conclusion that the one month wage of Rs.18,051.70/- was only partial
wage, as against the entitlement of the workman's one month wage of
Rs.26,145/- and accordingly had rejected the approval petition filed by
the Management.
7. The learned Single Judge, however, had made an observation in
the order stating that the principles to be considered by the Tribunal
before granting or refusal of approval under Section 33(2) of the Act are
to observe, whether the standing orders justify the orders of dismissal;
whether the enquiry has been held as prescribed by standing orders and
whether the condition laid down in the Proviso to Section 33(2)(b) of the
Act are fulfilled. With such an observation, it was remarked that the first
two principles were not followed by the Tribunal, but the non-payment of
one month wage alone was dealt with by the Tribunal. In our view, the
principles recorded by the learned Single Judge is beyond the scope of the
procedure to be followed by the Tribunal in exercise of its powers under
Section 33(2)(b) of the Act. However, since no further discussions were
made with regard to how these principles will be relevant, we shall not
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delve any further on this aspect.
8. With regard to the quantum of one month wages is concerned,
the learned Single Judge had made an observation that there was no
clarity as to whether the interim relief of Rs.4,000/- was paid to the
workman or not. By remarking on the order of the Tribunal that there was
no clarification as to whether the interim relief was paid or not, the
learned Single Judge had relied on S.Ganapathy's case (supra) and held
that the Tribunal could have granted approval, with a condition to pay the
balance amount, in the event of the one month wages being less than the
actual wages payable to the employee. The learned Single Judge had also
taken note of the inordinate delay of 5 years in deciding the approval
petition and failure to deal with the validity of the domestic enquriy.
9. The scope of inquiry by the Tribunal in the proceedings under
Section 33(2)(b) of the Act is summary in nature and an exercise of its
powers is restricted to a very few considerations, which legal ratios have
been consistently held in several decisions of the Hon'ble Supreme Court,
including the cases in Lalla Ram Vs. D.C.M. Chemical Works reported
in AIR 1978 (S.C.) 1004; John D' Souza Vs. Karnataka State Road
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Transport Corporation reported in (2019) 18 SCC 47 and Cholan
Roadways Ltd. Vs. G.Thirugnanasambandam reported in (2005) 3 SCC
241. Among the restricted jurisdiction, which the Tribunal could exercise
while dealing with the proceedings under Section 33(2)(b) of the Act, the
mandate of payment of one month wages, along with the order of
dismissal to the workman, also requires to be complied. It is the
consistent view of the Hon'ble Supreme Court that the mandate of
payment of one month wages under the Proviso is “to soften the rigour
of unemployment that will face the workman against whom an order of
discharge or order of dismissal has been passed”, as held in the case of
Syndicate Bank Ltd. Vs. K.Ramanath V. Bhat reported in AIR 1968 SC
231, among several other like decisions of the Hon'ble Supreme Court.
10. In the case of Bennett Coleman & Co. (P) Ltd. Vs. Punya
Priya Das Gupta reported in (1969) 2 SCC 1 and Dilbagh Rai Jarry Vs.
Union of India and Others reported in (1974) 3 SCC 554, the mandate
on the part of the Management to pay one month full wages to the
workman while issuing the order of discharge or dismissal, was made
obligatory. In the case of Bharat Electronics Limited Vs. Industrial
Tribunal, Karnataka, Bangalore and Another reported in (1990) 2 SCC
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314, the Hon'ble Supreme Court had observed that even a paisa less in
one month wage paid to the workman, would be fatal and it is for the
Management to establish that the wages paid under the Proviso to Section
33(2)(b) of the Act, represent the full wages of the month. The relevant
portion of the judgment reads as follows:
“17. Before concluding the judgment the
observations in Syndicate Bank case [(1967-68) 32
FJR 490, 497: (1968) 1 SCR 327: AIR 1968 SC
231], aforequoted, are again to be borne in mind.
In the facts and circumstances of this case the
management paid to the workman a sum of Rs
607.90 as a month's salary “to soften the rigour of
unemployment that will face the workman”. How
could a short payment of Rs 12 be said to have
lessened the softening of such rigour is thought
stirring. Viewed in the context, there could
genuinely be a dispute, as in the present case, as to
whether a particular sum was due as wages. It is, of
course, risky for the management to raise it as to
pay even a paisa less than the month's wages due
under Section 33(2)(b), would be fatal to its
permission sought. But at the same time it needs to
be clarified that it is for the management to
establish, when questioned, that the sum paid to the
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workman under Section 33(2)(b) represented full
wages of the month following the date of discharge
or dismissal, as conceived of in the provision and
as interpreted by us in entwining the ratios in
Bennett Coleman case [(1969) 2 SCC 1: (1970) 1
SCR 181] (supra) and Dilbagh Rai Jarry case
[(1974) 3 SCC 554: 1974 SCC (L&S) 89: (1974) 2
SCR 178] and adding something ourselves
thereto.”
11. Thus, the law is well established making it compulsory for the
Management to pay the full wages of a month, for which the workman
would be entitled to under the express or implied terms of employment.
12. The learned senior counsel for the workman made a faint
attempt to place reliance to S.Ganapathy's case (supra) and attempted to
propose that even when the one month wage falls short, the difference
could have been ordered to be paid by the Tribunal as a pre-condition,
while granting approval. This submission, in our view, is misconceived to
the ratio decidendi laid down in S.Ganapathy's case (supra).
13. The issue that arose for consideration in S.Ganapathy's case
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(supra) was, as to whether the statutory deduction of income tax from the
one month wages payable under the Proviso to Section 33(2)(b) of the
Act, would amount to violation of the provision. While dealing with this
decision, the Hon'ble Supreme Court had observed that, if an approval
was to be rejected on merits and otherwise to be rejected for not making
complete payment of one month wage, it would thus be just and proper to
let the employer deduct the statutory tax deduction from that one month
wage, since the relationship of an employer and an employee has
effectively not been terminated, to meet the eventuality, lest the approval
application be dismissed on merits. It was further held that, on the other
hand, it would be just and proper either for the employer on his own or
on the asking of the Tribunal to let the sum representing statutory tax
deduction be deposited in the Tribunal for payment to the workman in the
event of the approval application being allowed. It is in the background of
these two situations, the Hon'ble Supreme Court had held that there
would, in no event, be a dismissal of the approval application for payment
of wage subjected to statutory tax deduction. The Hon'ble Supreme Court
had also taken note of the fact in their case relating to statutory tax
deduction and the further fact that apart from the statutory tax deduction,
not a penny was retained by the Management. Such observations are
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hereunder:-
“12..... Here distinction would have to be
drawn between statutory deductions like tax
deductions and other deductions which the
employer considers he can make. In either event, he
takes the risk when making a deduction. In the case
of statutory tax deductions, his justificatory burden
is less, for he has the shelter of the tax law. The
case of the other deductions would obviously be on
different footing for he may not have any thrust of
law. Those may purely be contractual. Those
deductions may not be compulsive under any law.
The employer makes the deduction in such cases at
his peril. But here, in the present situation, there
definitely arose a genuine claim to make the tax
deduction and doing so the employer projected its
case before the Tribunal in that angle. Not a paisa
otherwise was kept back. Thus in the facts and
circumstances it appears to us that the respondent
was able to establish that its deliberate deduction
representing the tax from one month's wage was not
to shorten the wage and cause infraction of Section
33(2)(b) but a compulsive deduction to fulfil a
statutory obligation by the thrust of the Tax Act.”
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14. S.Ganapathy's case (supra) case deals only with situations
involving deduction of statutory income tax amount from the one month
wage alone and no universal law was laid down therein to facilitate the
Management to deduct any short falls or deficits in the mandatory full
back wages payable under Section 33(2)(b) of the Act.
15. The learned Single Judge of this Court had placed reliance on
S.Ganapathy's case (supra) for holding that the short payment in the one
month wages will not be fatal. We do not agree with such findings on
account of the above reasons rendered by us.
16. The predominant issue that was raised by the learned counsel
for the Management is that the interim relief of Rs.4,000/-, as well as the
concessional value of health drinks coupons and coconut oil, do not form
part of the wages, as defined under Section 2(rr) of the Act. The definition
of 'wages' under Section 2(rr) of the Act is comprised of three parts. The
first portion is a general definition of all remunerations, the second
portion is for specific inclusion of certain remunerations and the third
portion disqualifies certain remuneration payable. Under the general
definition, all remunerations capable of being expressed in terms of
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money, which would, if the terms of employment, expressed or implied,
were fulfilled, be payable to a workman in respect of his employment.
The second portion inter alia provides for inclusion of certain allowances,
concessions, etc. The third portion specifically excludes certain
remunerations being bonus, terminal gratuity and contributions towards
pension fund or provident fund.
17. In the instant case, the Management has admitted to put forth
their case claiming that the interim relief of Rs.4,000/- and the
concessional value of health drinks coupons and coconut oil will not form
part of wages. Under the general definition of 'wage', the Act brings in all
kinds of remuneration capable of being expressed in terms of money,
which a workman would have earned, while fulfilling his terms of
employment. In other words, had the workman attended his regular
duties under the terms of his employment for the ensuing months, the
heads of remunerations, which he will be legally entitled, can be termed
as wages for the purpose of Section 33(2)(b), subject to the specific
exclusions provided therein.
18. When the charter of demands raised by the Union was pending
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for a substantial period, the workman had made a plea before the
Tribunal seeking for an interim relief. This claim was adjudicated by the
Tribunal and ultimately, when the dispute reached the Apex Court, an ad
hoc payment of Rs.4,000/- per month was determined. Had the workman
continued his employment after the date of his dismissal, he would be
entitled to receive this interim relief, which fact is not under dispute.
19. The only ground raised by the learned counsel for the
Management is that since their de facto relationship with the workman
had ceased, he will not be entitled for his relief. We are unable to endorse
such an objection. The entitlement of the workman to receive this interim
relief was not contingent upon any condition and mere reporting for duty
alone would suffice for his entitlement to receive the interim relief.
20. In the case of Bennett Coleman (supra), when the Hon'ble
Supreme Court, while answering to a reference as to whether free
telephone allowances and newspaper allowances would be includable in
wages, as defined under Section 2(rr) of the Act, it was held that all
remunerations capable of being expressed in terms of money, is not
dependent on any contingents and therefore, held those allowances to be
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included under the definition of wages. Similarly, while excluding night
shift allowances from the purview of definition of wages in Bharat
Electronics Limited's case (supra), the yardstick that the Hon'ble
Supreme Court had adopted was that the night shift allowance was
contingent upon his reporting to duty and being put to that shift and thus
would not flow as an entitlement and therefore, excluded night shift
allowance from the purview of the term 'wages'.
21. In the light of our above discussions and in line with the
observations of the Hon'ble Supreme Court in all the aforesaid cases, the
interim relief of Rs.4,000/-, which the workman was otherwise entitled to
receive, would form part of his one month wage.
22. Insofar as the concessional value of health drinks coupons and
coconut oil are concerned, the very definition of 'wages' under Section
2(rr)(ii) of the Act exclusively provides it as an ingredient of wages,
which definition is extracted hereunder:-
2(rr)(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 food-grains or other
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articles;
23. Admittedly, the Management had not included the
remuneration under the head of concessional value of health drinks
coupons and coconut oil, in the one month wages paid to the workman
under Section 33(2)(b) of the Act, which is in violation to the very
definition of the term 'wages'.
24. The learned Single Judge, however, had not taken note of all
these aspects into consideration while dealing with the non-payment of
the full wages for one month. A reference has also been made in the order
of the learned Single Judge to a delay of five years in deciding the
Approval Petition. The upper limit of three months prescribed under
Section 33(5) is not mandatory, but rather directory in nature, in view of
the Proviso therein, which entitles the Tribunal to extend the proceedings
over and above a period of three months for recorded reasons.
25. What would be relevant in a case of this nature is the
consequential prejudice that may have been caused to the Management in
this regard. The Management has come out with a specific prejudice that
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may have caused to them, owing to the delay in concluding the
proceedings before the learned Single Judge. In the absence of any
serious prejudice to the Management, we do not find the observation of
the learned Single Judge in this regard appealing.
26. For all the foregoing reasons, the impugned order of the learned
Single Judge passed in W.P.No.20445 of 2023 dated 31.10.2023 is set
aside. Consequently, the Management shall forthwith pass orders,
allotting duty to the appellant/workman by extending all the service and
monetary benefits, including continuity of service from 30.09.2016 and
disburse the backwages forthwith, in any event, within a period of two
weeks from the date of receipt of a copy of this judgment.
27. In the result, the Writ Appeal stands allowed. No costs.
Consequently, connected miscellaneous petition is closed.
[M.S.R., J] [C.K., J]
01.10.2024
Index:Yes
Neutral Citation:Yes
Speaking order
hvk
https://www.mhc.tn.gov.in/judis
To
The Managing Director,
Management of MRF Limited,
P.B.No.5285, Thiruvottiyur,
Chennai – 600 019.
https://www.mhc.tn.gov.in/judis
M.S.RAMESH, J.
and
C.KUMARAPPAN, J.
hvk
Pre-delivery judgment made in
01.10.2024
https://www.mhc.tn.gov.in/judis
