Supreme Court Dismisses Appeal of Employer in Industrial Disputes Act Case; Approval of Discharge Refused Due to Invalid Domestic Enquiry. Section 33(2)(b) Application Survives Final Determination of Main Industrial Dispute and Order Remains Incomplete Without Approval.

Case Note & Summary

This appeal by special leave arose from an order of the Central Government Industrial Tribunal at Dhanbad refusing approval under Section 33(2)(b) of the Industrial Disputes Act, 1947 for the discharge of an employee. The appellant, Tata Iron and Steel Co. Ltd., had discharged its employee, S. N. Modak, after a domestic enquiry for alleged misconduct in failing to detect unauthorised alterations in bills. Since certain industrial disputes were then pending between the appellant and its employees, the appellant sought the Tribunal's approval as required by the proviso to Section 33(2)(b). Before the Tribunal heard the application, the main industrial disputes were disposed of by awards. The appellant contended that the application no longer survived, but the Tribunal rejected this contention. On merits, the Tribunal found the domestic enquiry invalid and refused approval. The Supreme Court dismissed the appeal, upholding the Tribunal's order. Background The appellant, Tata Iron and Steel Co. Ltd., employed the respondent, S. N. Modak, as a Grade 11 Clerk in the Chief Mining Engineer's Office at Jamadoba. The respondent's duties included checking arithmetical calculations in bills and reporting discrepancies or unauthorised alterations. It was discovered that several additions and alterations in bills passed by the respondent were not noticed or reported, constituting misconduct under the Standing Orders. A charge-sheet was issued, a departmental enquiry was conducted, and the appellant passed an order on December 17, 1960, terminating the respondent's services with effect from December 24, 1960. The application under Section 33(2)(b) was drafted on December 17, 1960 and filed with the Tribunal on December 23, 1960. Facts At the time of the application, four industrial disputes between the appellant and its employees were pending in References Nos. 27, 34, 40 and 49 of 1960. The respondent challenged the discharge order, contending that the enquiry was invalid, improper and the result of mala fides. Evidence was led by both parties. Before the matter was argued, all four references had been disposed of by awards dated October 31, 1960, November 8, 1960, April 14, 1961 and September 22, 1961. The appellant then raised a preliminary objection that the application under Section 33(2)(b) did not survive because the main industrial disputes had been finally decided. The Tribunal overruled this objection and proceeded to examine the merits. It found that the enquiry was invalid because the Enquiry Officer, Mr. Watcha, did not record statements of witnesses; he himself gave evidence against the respondent; and the evidence was actually recorded not by Mr. Watcha but by Mr. Paravatiyar. The Tribunal concluded that the enquiry was 'a farce, a mere eyewash, biased with pre-determined result, and entirely mala fide and not at all fair'. It therefore refused approval of the discharge order. Legal Issues The primary legal issue was whether an application under Section 33(2)(b) of the Industrial Disputes Act survives the final determination of the main industrial dispute pending at the time the application was made. The second issue was whether the Tribunal correctly refused approval due to the invalidity of the domestic enquiry. Arguments The appellant contended that the application under Section 33(2)(b) no longer survived because all the industrial disputes pending at the time of application had been disposed of and awards had been published. The respondent argued that the application was a separate proceeding and must be decided on its merits, and that the domestic enquiry was invalid and unfair. Court's Analysis The Supreme Court held that Section 33(2)(b) imposes conditions precedent: payment of one month's wages and an application for approval. The section is intended to protect workmen during the pendency of industrial proceedings. The Court reasoned that an application validly commenced under Section 33(2)(b) is a separate, independent proceeding between the employer and the individual employee, even though it may be incidental to the main industrial dispute. It is not an interlocutory proceeding in the full sense. Consequently, the application does not automatically come to an end merely because the main industrial dispute has been finally determined. The Court further observed that the order of discharge is incomplete and inchoate until approval is obtained; without approval, it cannot effectively terminate the employer-employee relationship. If approval is refused, the employer must treat the employee as continuing in service and pay full wages for the period. The Court also noted that holding otherwise would render Section 33-A, which treats an employee's complaint as an independent proceeding, nugatory. On the merits, the Court upheld the Tribunal's finding that the enquiry was invalid and biased. Decision The Supreme Court dismissed the appeal and upheld the Tribunal's order refusing approval under Section 33(2)(b) of the Industrial Disputes Act, 1947. The application was held to survive the final determination of the main industrial disputes, and the refusal of approval was affirmed due to the invalid and mala fide domestic enquiry.

Headnote

Issue of Consideration

Final Decision

The Supreme Court dismissed the appeal and upheld the Industrial Tribunal's order refusing approval under Section 33(2)(b) of the Industrial Disputes Act, 1947. The Court held that the application survived the final determination of the main industrial disputes and that the Tribunal rightly refused approval because the domestic enquiry was invalid and mala fide.

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