Gnanambikai Mills Ltd. vs M.R. Ramachandran

Rajagopalan, J.—The respondent, Ramachandra was an employee of the petitioner. An industrial dispute between the management of the

petitioner company and its employees was referred to the Industrial Tribunal for adjudication under the Industrial Disputes Act. During the

pendency of these proceedings the management took disciplinary action against the respondent.

The management held an inquiry and came to the conclusion that the respondent should be dismissed for proved misconduct. On 16-6-1954 the

management directed suspension of the respondent pending the contemplated dismissal, for which the sanction of the Industrial Tribunal was

necessary under S. 33 of the industrial Disputes Act On 29-6-1954, the petitioner applied to the Industrial Tribunal for the requisite sanction. It

was represented that that application has not been disposed of despite the lapse of about three years.

On 21-10-1954 the respondent preferred an application to the prescribed statutory authority under the Payment of Wages Act, for a direction

under S. 15(3) of the Act, that the management should pay the respondent the wages due to him for the period 16-6-1954 to 19-10-1954. The

Additional Commissioner for workmen''s compensation. Madras disposed of that application. He upheld the respondent''s claim, that despite the

suspension ordered by the management, the respondent was entitled to payment of wages during that period. The petitioner applied under Art.

227 of the Constitution to set aside the order of the Additional Commissioner.

Cl. 20(1) of the Standing Orders, which admittedly regulated the conditions of service of the respondent, could not obviously apply to a

suspension ordered by the management pending disposal of the application for the sanction prescribed by S. 33 of the Industrial Disputes Act. It

should be taken as well settled now that suspension pending an enquiry is not itself a punishment. Neither is suspension pending disposal of the

application preferred by the management under S. 33 of the Industrial Disputes Act a punishment. That has been laid down by the Supreme Court

in Lakshmi Devi Sugar Mills Ltd. Vs. Pt. Ram Sarup, ).

The Additional Commissioner was right when he pointed out that, apart from Cl. 20(1), there was no specific provision in the Standing Orders

for the suspension of an employee. The definition of ""wages"" in S. 2(6) of the Payment or Wages Act makes it clear that the basis of the right of the

employee to get his wages and the corresponding obligation of the employer to pay those wages is the contract, express or implied, between the

parties.

The learned counsel for the respondent Urged that in the absence of any provision in the Standing Orders to confer a right on the petitioner to

suspend its employee, the respondent, except in the contingency for which Cl. 20(1) provided, the petitioner was not entitled to deprive the

respondent of his right to wages; the suspension did not terminate the relationship of employer and employee as between the petitioner and the

respondent. The learned counsel referred to the observations of Rajagopala Ayyangar J. in Bhavani Kudal Co-operative Urban Bank Ltd. v.

Venkatapathi, 1955-1-Mad L. J. 293 at p. 297 : (AIR 1956 Mad 150 at p. 153) (B). The learned Judge observed:

The authorities are clear on two points: (1) in the case of a private employment, the power of suspension must be specifically contracted for, and

(2) even if the power exists, the employer cannot withhold salary for the duration of the suspension unless the misconduct to enquire into which

suspension was ordered is proved to have been made out.

That contention was accepted by the Additional Commissioner. That case did not arise under the Payment of Wages Act. The principles referred

to by the learned Judge are concepts of common law. To that extent they can apply in cases where suspension of an employee is ordered pending

disposal of an application, preferred under S. 33 of the Industrial Disputes Act would appear to be a different problem.

The learned counsel for the respondent also referred to a recent unreported judgment of the Labour Appellate Tribunal, Lucknow, in the

Management of Swiss Hotel, Delhi v. Hotel Worker''s Union, Katra, where the Appellate Tribunal upheld the grant of an interim relief to the

employees pending final disposal of the applications preferred by the employers under S. 33 of the Industrial Disputes Act for their dismissal.

That decision may not have a direct bearing on the question at issue in the proceedings before me, whether any amount can be claimed as wages

under the Payment of Wages Act when the employee is kept under suspension pending disposal of the application preferred under S. 33 of the

Industrial Disputes Act for permission to dismiss that employee.

The learned counsel for the petitioner urged, in effect that in such a contingency, the right to receive wages and the liability to pay them also

remain suspended. He relied on a passage in the judgment of Bhagwati J. in 1957-1 Lab LJ 17. ((S) Lakshmi Devi Sugar Mills Ltd. Vs. Pt. Ram

Sarup, . At page 24 (of Lab LJ): (at pp. 92, 93 of AIR) the learned Judge observed:

It has been rightly held by the Labour Appellate Tribunal that suspension without pay pending enquiry as also pending permission of the tribunal

under the relevant section could not be considered as punishment as such suspension without payment would only be an interim measure and

would last till the application for permission to punish the workmen was made and the tribunal had passed orders thereupon. If the permission was

accorded, the workman would not be paid during the period of suspension but if the permission was refused he would have to be paid for the

whole period of suspension.

There is nothing like a contingent punishment of a workman and therefore such suspension could not be deemed to be a punishment of the

workman at all. Such suspension could of necessity be of an indefinite duration because to get a written permission of the tribunal would mean

delay and no tribunal would lightly issue any order without notice and without hearing all the parties concerned. Orders for suspension were meant

only as security measures or precautionary once taken in the interest of the industry itself or its employees in general. These measures were

sometimes called for immediately... and any delay, however small, might defeat the purpose for which such measures were intended.

I must record at this stage that it was not the case of any one, that there was any unreasonable delay on the part of the management either in

conducting the enquiry against the respondent or in applying thereafter to the Industrial Tribunal to accord its sanction under S. 33 of the Industrial

Disputes Act.

It is no doubt true, as pointed out by the learned counsel for the respondent, that in ((S) Lakshmi Devi Sugar Mills Ltd. Vs. Pt. Ram Sarup,

there was no occasion for the Supreme Court to refer expressly to the provisions of the Payment of Wages Act. Nonetheless, I have to accept it

as an authoritative pronouncement of the Supreme Court on the rights and liabilities of the employer and employee in the interval that elapses

between the presentation of the application under S. 33 of the Industrial Disputes Act and the orders of the Industrial Tribunal thereon.

Section 33 of the Industrial Disputes Act imposes a special statutory restriction on the exercise of the right of the employer to dismiss his

employee. In the present case, it should be remembered, the petitioner decided to dismiss the respondent for misconduct. But for the statutory

restriction imposed by S. 33, the petitioner would have been in a position to dismiss the respondent on 16-6-1954. Whether the correctness and

the validity of that dismissal could have been made the subject-matter of an industrial dispute does not arise for consideration at this stage. If the

petitioner had dismissed the respondent on 16-6-1954, there would have been no need for any suspension.

The suspension was necessary because the petitioner had to obtain the sanction of the Industrial Tribunal under S. 33 of the Industrial Disputes

Act. I have already pointed out there was no unreasonable delay on the part of the management in applying to the Industrial Tribunal under S. 33

of the Industrial Disputes Act for the required sanction.

If the application presented on 29-6-1954 could have been disposed of by the tribunal the same day there would have been no occasion for any

further suspension. If the tribunal accorded permission to dismiss the respondent he could have been dismissed immediately, and the liability to pay

wages thereafter would have come to an end.

If the tribunal had refused permission, the respondent would have continued in service and would have been entitled to his wages. The rights and

liabilities of neither the petitioner nor the respondent could be enlarged or curtailed by the delay, inevitable in the circumstances of such cases, in

the disposal of the application to the Tribunal.

As I said what are the rights and liabilities of the employer and the employee during the period of suspension pending the decision of the Tribunal in

such cases has been clearly laid down by the Supreme Court in ((S) Lakshmi Devi Sugar Mills Ltd. Vs. Pt. Ram Sarup, . I must point out that the

decision of the Supreme Court was long subsequent to the order of the Additional Commissioner in this case.

The learned counsel for the petitioner is, in my opinion, well founded in his contention, that the respondent is not entitled to any immediate

payment of wages during the period of suspension, indefinite though it has turned out to be. The Additional Commissioner had therefore no

jurisdiction to award any amount as constituting wages lawfully payable to the respondent.

The petition is allowed and the order of the Additional Commissioner is set aside. No order as to costs.