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Full Case Details
E.S. VENKATARAMIAH, J.
- In the standing orders governing the appellant there was no provision for payment of any
subsistence allowance (either the whole of the allowance which the workman was entitled to draw or a
part thereof) during the pendency of an application made by the management under Section 33(3) of the
Act for permission to dismiss a protected workman. Admittedly the appellant was not paid any allowance
from August 13, 1979 to August 5, 1985 on which date the Tribunal accorded its permission to the
management to dismiss him from service.
- 2. During the pendency of a reference made under the Industrial
Disputes Act, 1947 to the Industrial Tribunal, Gujarat the management served a charge-sheet on the
appellant who was one of the workmen working in the factory belonging to the management of the
Alembic Chemical Works Co. Ltd., Baroda asking him to show cause why disciplinary action should not
be taken against him for an alleged act of misconduct said to have been committed by him on July 12,
- The act of misconduct attributed to the appellant was that he was playing cards along with two
other workmen during the working hours of the factory. It was alleged that the appellant had given a letter
addressed to Shri R.A. Desai, Manager, Industrial Relations, Alembic Chemical Works Co. Ltd.
admitting his guilt and tendering apology. The disciplinary enquiry was held against all the three
workmen including the appellant. At the conclusion of the enquiry the appellant was found guilty of the
act of misconduct alleged to have been committed by him by the Inquiry Officer Shri J.N. Patel, Director
(Manufacturing) of the Alembic Chemical Works Co. Ltd. and it was decided by the management to
dismiss him but because the appellant was a protected workman as defined in the Explanation to subsection (3) of Section 33 of the Act and the permission of the Tribunal had to be obtained before
dismissing him as required by sub-section (3) of Section 33 of the Act, the management made an
Application (IT) No. 88 of 1979 before the Tribunal for such permission. The appellant was, however,
suspended from service with effect from August 13, 1979 pending disposal of the application before the
Tribunal after he had been found guilty at the domestic enquiry but without any wages or allowances. The
appellant also filed an application before the Tribunal under Section 33-A of the Act complaining
violation of Section 33 of the Act by the management. The complaint of the appellant was registered as
Complaint (IT) No. 124 of 1979 in Reference (IT) No. 434 of 1978. Both, the application under Section
33(3) of the Act and the complaint under Section 33-A of the Act, were filed in the year 1979. The
Tribunal was able to dispose of them finally only on August 5, 1985. The Tribunal granted permission to
the management to dismiss the appellant and rejected the complaint filed by him. Aggrieved by the said
decision of the Tribunal the appellant has filed these two appeals. - In these appeals the learned counsel for the appellant has confined his submission to the effect of
non-payment of any subsistence allowance on the decision of the Tribunal under Section 33(3) of the Act.
It is urged by the learned counsel for the appellant that since the appellant was denied the subsistence
allowance it was not possible for him to defend himself effectively before the Tribunal in the proceedings
relating to the permission prayed for by the management under Section 33(3) of the Act and, therefore,
the permission accorded by the Tribunal was vitiated. In support of his cuase he has relied upon the
decision of this Court in State of Maharashtra v. Chandrabhan Tale [(1983) 3 SCC 387]. In that case
the respondent Chandrabhan Tale was a government servant. He was convicted and sentenced to
imprisonment by the trial court in a criminal case. He filed an appeal against his conviction and sentence
and remained on bail throughout without undergoing the sentence of imprisonment. He was, however,
kept under suspension pending trial of the criminal case and was paid normal subsistence allowance under
the main Rule 21 of the Bombay Civil Services Rules, 1959 from the date of his suspension until the date
“on which he was convicted and sentenced to imprisonment by the trial court. But from the date of his
conviction the subsistence allowance was reduced to the nominal sum of Re 1 per month under the second
proviso to Rule 15(1)(ii)(b) of the Bombay Civil Services Rules, 1959. The order reducing his subsistence
allowance was questioned in this Court in the above case. The Court held that the second proviso to Rule
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15(1)(ii)(b) of the Bombay Civil Services Rules, 1959 which directed the reduction of the subsistence
allowance to Re 1 per month was unreasonable and void. The Court further held that a civil servant under
suspension was entitled to the normal subsistence allowance even after his conviction by the trial court
pending consideration of his appeal filed against his conviction until the appeal was disposed of finally
one way or the other, whether he was on bail or lodged in prison on conviction by the trial court. Relying
upon the above decision the learned counsel for the appellant contended that there was denial of
reasonable opportunity to the appellant to defend himself before the Tribunal in the proceedings initiated
by the application made under Section 33(3) of the Act. - Sub-section (3) of Section 33 of the Act provides that notwithstanding anything contained in subsection (2) thereof no employer shall during the pendency of any such proceeding in respect of an
industrial dispute, lake any action against any protected workman concerned in such dispute – (a) by
altering, to the prejudice of such protected workman, the conditions of service applicable to him
immediately before the commencement of such proceedings; before or (b) by discharging or punishing
whether by dismissal or otherwise, such protected workman, save with the express permission in writing
of the authority before which the proceeding is pending. It follows from the provisions of sub-section (3)
of Section 33 of the Act that the workman does not cease to be a workman until the Tribunal grants
permission to dismiss the workman and the management dismisses the workman pursuant to such
permission. An order of suspension by itself does not put an end to the employment. The workman
continues to be an employee during the period of suspension and it is for this reason ordinarily the various
standing orders in force in several factories and industrial establishments provide for payment of
subsistence allowance which is normally less than the usual salary and allowance that are paid to the
workman concerned. An order of suspension no doubt prevents the employee from rendering his service
but it does not put an end to the relationship of master and servant between the management and the
workman. When an application is made under Section 33(3) of the Act the workman is entitled to defend
himself before the Tribunal. In these proceedings it is open to him to show that the domestic enquiry held
against him was not in accordance with law and principles of natural justice and the action proposed to be
taken against him by the management is unjust and should not be permitted. Sometimes it may be
necessary to either of the parties to lead evidence even before the Tribunal. The proceedings before the
Tribunal very often take a long time to come to an end. In this very case the proceedings were pending
before the Tribunal for nearly six years. Most of the workmen are not in a position to maintain themselves
and the members of their families during the pendency of such proceedings. In addition to the cost of
maintenance of his family the workman has to find money to meet the expenses that he has to incur in
connection with the proceedings pending before the Tribunal. In this case the appellant was in receipt of
salary and allowances till the end of the disciplinary enquiry. But from August 13, 1979 he was not paid
even the barest subsistence allowance till August 5, 1985 when the Tribunal passed its order/award on the
application of the management and the complaint of the appellant. It is true that in the instant case the
Tribunal granted the application of the management and rejected the complaint of the appellant. It was
also quite possible that the Tribunal could have rejected the application of the management and upheld the
complaint of the appellant in which case the appellant would have been entitled to continue to be an
employee under the management of the factory and the disciplinary enquiry had against him would have
had no effect at all. Because it is difficult to anticipate the result of the application made before the
Tribunal it is reasonable to hold that the workman against whom the application is made should be paid
some amount by way of subsistence allowance to enable him to maintain himself and the members of his
family and also to meet the expenses of the litigation before the Tribunal. And if no amount is paid during
the pendency of such an application it has to be held that the workman concerned has been denied a
reasonable opportunity to defend himself in the proceedings before the Tribunal. Such denials leads to
violation of principles of natural justice and consequently vitiates the proceedings before the Tribunal
under sub-section (3) of Section 33 of the Act and any decision given in those proceedings against the
workman concerned. No material has been placed before us in this case to show that the appellant had
sufficient means to defend himself before the Tribunal.
110 - The learned counsel for the management however relied upon the decision of this Court in
Management of Hotel Imperial, New Delhi v. Hotel Workers’ Union [AIR 1959 SC 1342]. In that case
this Court was mainly concerned with the right of the management to suspend a workman where the
management had taken a decision to dismiss him but could not immediately give effect to such decision
owing to the restriction imposed by Section 33(1) of the Act which required the management to obtain the
permission of the Tribunal when a reference was pending adjudication before it. In that case this Court
observed at pp. 485, 488-89 thus:
“We have, therefore, to see whether it would be reasonable for an Industrial Tribunal where
it is dealing with a case to which Section 33 of the Act applies, to imply a term in the contract
giving power to the master to suspend a servant when the master has come to the conclusion after
necessary enquiry that the servant has committed misconduct and ought to be dismissed, but
cannot do so because of Section 33. It is urged on behalf of the respondents that there is nothing
in the language of Section 33 to warrant the conclusion that when an employer has to apply under
it for permission he can suspend the workmen concerned. This argument, however, begs the
question because if there were any such provision in Section 33, it would be an express provision
in the statute authorising such suspension and no further question of an implied term would arise.
What we have to see is whether in the absence of an express provision to that effect in Section
33, it will be reasonable for an Industrial Tribunal in these extraordinary circumstances arising
out of the effect of Section 33 to imply a term in the contract giving power to the employer to
suspend the contract of employment, thus relieving himself of the obligation to pay wages and
relieving the servant of the corresponding obligation to render service. We are of opinion that in
the peculiar circumstances which have arisen on account of the enactment of Section 33, it is but
just and fair that Industrial Tribunals should imply such a term in the contract of employment….
We are, therefore, of opinion 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
Section 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 Section 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. In dealing with this point the basic and decisive consideration introduced by
Section 33 must be borne in mind. The undisputed common law right of the master to dismiss his
servant for proper cause has been subjected by Section 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 Section 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 workmen would be entitled to all his wages from the date of
suspension.” - In the above decision it was laid down that the management should be deemed to possess the power
to suspend an employee in respect of whom a decision had been taken to dismiss him but an application
for permission had to be filed until the application for permission was decided. The court in giving the
above decision also relied on an earlier decision of the court in Rampur Colliery v. Bhuban Singh [AIR
1959 SC 833]. In that case it was pointed out that but for the ban on the employer by Section 33(1) the
employer would have been entitled to dismiss the employee immediately after the completion of his
enquiry on coming to the conclusion that the employee was guilty of misconduct but Section 33 stepped
in and stopped the employer from dismissing the employee immediately on the conclusion of his enquiry
and compelled him to seek permission of the Tribunal. It was, therefore, held that it was reasonable that
the employer having done all that he could do to bring the contract of service to an end should not be
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expected to continue paying the employee thereafter. It was pointed out that in such a case the employer
would be justified in suspending the employee without pay as the time taken by the Tribunal to accord
permission under Section 33 of the Act was beyond the control of the employer. Lastly, it was observed
that this would not cause any hardship to the employee for if the Tribunal granted permission the
employee would not get anything from the date of his suspension without pay while if the permission was
refused he would be entitled to his back wages from such date. - But in neither of the above two decisions the court considered the question from the angle from
which we have approached the problem. In neither of them the court had the occasion to consider whether
the denial of payment of subsistence allowance during the pendency of the proceedings under Section
33(3) of the Act would amount to violation of principles of natural justice. They approached the question
from the angle of the common law right of a master to keep a workman under suspension either during
the pendency of a domestic enquiry into an act of misconduct alleged to have been committed by a
workman or during the pendency of an application under Section 33 of the Act. Those were perhaps
halcyon days when such applications were being disposed of quickly. If the court had realised that such
applications would take nearly six years as it has happened in this case their view would have been
different. An unscrupulous management may by all possible means delay the proceedings so that the
workman may be driven to accept its terms instead of defending himself in the proceedings under Section
33(3) of the Act. To expect an ordinary workman to wait for such a long time in these days is to expect
something which is very unusual to happen. Denial of payment of at least a small amount by way of
subsistence allowance would amount to gross unfairness. - Apart from the violation of the principles of natural justice, the very concept of the relationship of
master and servant has undergone a sea-change since the date on which Hotel Imperial case was decided.
We have pointed out that in that case this Court recognised the power of suspension without pay vested in
the management after it had decided to dismiss an employee where it had to make an application for
permission under Section 33(1) of the Act. The case falling under Section 33(1) of the Act is not in any
way different from a case falling under sub-section (3) of Section 33 and in both these cases previous
permission of the authority concerned should be obtained before any action is taken against the workman
concerned unlike a case falling under Section 33(2) (b) of the Act where only its approval to an action
already taken is required to be sought. This Court further observed in the above decision that the
management could relieve itself of the obligation to pay wages during the period of such suspension. Now
what is the effect of suspension? Does it put an end to the relationship of master and servant altogether? It
does not. This Court has in its subsequent decision in Khem Chand v. Union of India [AIR 1963 SC 687
at 236-37] observed thus:
“An order of suspension of a government servant does not put an end to his service under the
government. He continues to be a member of the service in spite of the order of suspension….
The real effect of the order of suspension is that though he continued to be a member of the
government service he was not permitted to work, and further, during the period of his
suspension he was paid only some allowance – generally called “subsistence allowance” – which
is normally less than his salary – instead of the pay and allowances he would have been entitled to
if he had not been suspended. There is no doubt that the order of suspension affects a government
servant injuriously. There is no basis for thinking however that because of the order of
suspension he ceases to be a member of the service.” - If the order passed at the conclusion of domestic enquiry is only one of suspension (even though
the management has decided to dismiss him) where the workman has a chance of being reinstated with
back wages on the permission being refused under Section 33(3) of the Act, it cannot be said that the
workman is not entitled to any monetary relief at all. In such a case the right of the workman to receive
some reasonable amount which may be fixed either by the standing orders or in the absence of any
standing order by the authority before which the application is pending by way of subsistence allowance
during the pendency of the application under Section 33(3) of the Act with effect from the date of
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suspension should be implied as a term of the contract of employment having regard to the observations
made in Khem Chand case. In the two earlier decisions referred to above this aspect of the matter has not
been considered.
