Case Note & Summary
The Supreme Court of India considered an appeal by special leave filed by State Bank of India against an order of the Central Government Labour Court at Delhi. The litigation arose from the termination of the services of the respondent, a money tester in the cash department of the Agra branch of the Imperial Bank of India, during the pendency of an industrial dispute between the bank and its employees. The respondent had been prosecuted along with four other employees in connection with missing currency notes but was acquitted by the Sessions Court, receiving the benefit of doubt. Thereafter, the bank served a charge-sheet on December 10, 1954 alleging carelessness and dereliction of duty. An enquiry officer found the charge established, and the bank decided to terminate his services with effect from May 16, 1955 by paying three months' pay and allowances. The respondent challenged the validity of the enquiry, and after proceedings before the Labour Appellate Tribunal, a fresh enquiry was held on November 21 and 22, 1956, which again found the charges proved. The bank then decided in November 1960 to terminate his services by giving three months' salary in lieu of notice under Para 521(2)(c) of the Sastry Award. Since an industrial dispute was pending before the National Industrial Tribunal, the bank made an application on November 21, 1960 under Section 33(2) of the Industrial Disputes Act, 1947 for approval of its action. Before making the application, the bank had informed the respondent by letter dated November 4, 1960 and tendered a payment order for Rs. 450.71 representing three months' pay and allowances. The National Industrial Tribunal transferred the application to the Central Government Labour Court at Delhi. The respondent resisted the application, contending among other things that he had not been paid one month's wages as required by the proviso to Section 33(2). The respondent also filed an application under Section 33A complaining of contravention of Section 33. The Labour Court held that payment of three months' salary under Para 521(2)(c) of the Sastry Award did not amount to compliance with the requirement of payment of one month's wages under the proviso to Section 33(2), and accordingly rejected the bank's application for approval. The bank appealed to the Supreme Court by special leave. The sole question before the Supreme Court was whether payment of three months' salary in terms of Para 521(2)(c) of the Sastry Award satisfied the requirement of payment of one month's salary under the proviso to Section 33(2). The bank contended that it was unreasonable to think that three months' salary did not include the one month's wages required under the proviso. The respondent argued that the payment under the Sastry Award had a different purpose, because it was expressed to be 'in lieu of notice', unlike the proviso payment. The Supreme Court rejected the respondent's argument, holding that the words 'in lieu of notice' in Para 521(2)(c) did not have the significance attributed to them. The Court observed that the Sastry Award intended that three months' pay and allowances had to be paid in every case of termination, and the object of the provision was the same as the proviso, namely to give the employee some monetary assistance. The Court concluded that payment for a longer period should be held to include payment for a shorter period, and therefore no further payment of one month's wages was required where three months' pay and allowances had been paid under Para 521(2)(c). Consequently, the Supreme Court allowed the appeal, set aside the Labour Court's order, and directed that the application under Section 33(2)(b) be disposed of on merits, with no order as to costs.
Headnote
A) Industrial Dispute - Termination Approval - Payment of One Month's Wages Under Proviso to Section 33(2) - Industrial Disputes Act, 1947, Section 33(2) proviso - The Bank paid three months' pay and allowances under Para 521(2)(c) of the Sastry Award instead of separately paying one month's wages under the proviso. The Labour Court held that this did not amount to compliance; the Supreme Court held that the payment for a longer period should be held to include payment for the shorter period and the object of both provisions is to give the employee monetary assistance. Held that no further payment of one month's wages is required where three months' pay and allowances have been paid under Para 521(2)(c); accordingly, the Labour Court's order rejecting the Bank's application under Section 33(2)(b) was set aside and the application directed to be disposed of on merits, with no order as to costs. (Paras 622-625)
Issue of Consideration
Whether payment of three months' salary in terms of Para 521(2)(c) of the Sastry Award amounts to compliance with the requirement of payment of one month's wages under the proviso to Section 33(2) of the Industrial Disputes Act, 1947.
Final Decision
Appeal allowed; order of Labour Court set aside; application under Section 33(2)(b) directed to be disposed of on merits; no order as to costs.
Law Points
- Payment for longer period includes payment for shorter period
- three months' pay and allowances under Para 521(2)(c) of Sastry Award includes one month's wages under proviso to Section 33(2) of Industrial Disputes Act
- 1947
- no separate payment of one month's wages required
- object of both provisions is monetary assistance to employee
