Allowed

Association of Engineering Workers v. Smt.N.a.Kadam and Anr.

Bombay HC1 Sept 2004LPA/112/1992

Case brief

AI extract

What is this about?

An appeal regarding entitlement to subsistence allowance for workmen suspended pending an inquiry. The High Court held that while Certified Standing Orders did not mandate payment during suspension, Section 10A of the Industrial Employment (Standing Orders) Act, 1946, entitled the workmen to subsistence allowance.

What did the court decide?

The impugned orders were set aside. The Official Liquidator was directed to work out the entitlement of workmen based on representation on dues within eight weeks.

Association of Engineering Workers Vs Smt.N.a.Kadam and Anr. — Property and Title | Bombay HC (2004)

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	IN	THE HIGH	COURT	OF JUDICATURE	AT BOMBAY
		APPELLATE	SIDE,	CIVIL	JURISDICTION
		LETTERS PAT	ENT IN	APPEAL NO.112	OF 1992
		WRIT	PETITION	NO.2672	of 1984
Association			of		Engineering
Workers		having		its	office
at		252,	Janata	Colony,	R.N.
Narkar		Marg,		Ghatkopar	(East),
Bombay-400 07	7.			..APPELLANTS
	Versus
1.Smt.N.A.			Kadam,		Member,
Industrial			Court,		Bombay.
2.The			Official		Liquidator,
High		Court,		The	Liquidator
in			Mafatlal		Engineering
Industries					Ltd.,having
his		office	at	Bank	of
India		Building,		5th	Floor,
M.G.		Road,	Fort,	Bomba	y-23.....RESPONDENTS
Mr.	N.M.	Ganguli,		for the	Appellants.
None		for		the	respondents.

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CORAM: F.I. REBELLO & ANOOP V.MOHTA, JJ. DATE : 1st September, 2004

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ORAL JUDGMENT (PER F.I. REBELLO, J.)

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Appellants were the original petitioners in a
complaint which was filed before the Industrial Court,
Thane. It was the contention of the complainant union
that the workers had been suspended, but subsistence
allowance had not been paid and consequently the
complaint under Items 9 and 10 of Schedule IV of M.R.T.U.
& P.U.L.P. Act 1971. The Industrial Court by its order
of 22nd December, 1983 was pleased to dismiss the
complaint in so far as the employees other than those
working as Clerical staff, considering that those
employees were governed by the Certified Standing Orders
for hourly or daily rated workmen employed with the

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respondent	NO.2.		The		petition	ers	aggriev	ed	im	pugned	the
said order	before	the	learn	ed	Sing	le	Judge	of		this	Court,
who by	his	judgme	nt dat	ed	June	25,	1992	d	ism	issed	the
petition.	It	may	be	m	entioned	that	the	learn	ed	Judg	e in
paragraph	3 h	as s	et ou	t	that	the	petiti	oners		had	invoked
Article	227 of	the	Const	itu	tion o	f In	dia.	T	he		petition
in fact	was	filed	under		Articles	226	and	227		of	the
Constitution.	F	rom	the		judgment	of	the	lear	ned		Single
Judge it	is	not	possible		to find	out	as	to	wh	ether	the
learned	Judge	treated	the		petition	a	s u	nder		Articles	226

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and 227 and consequently we are hearing the present

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Appeal.

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2.	O	n behalf o	f the appellants, their learned
Counsel	contend	s	that the conditions of service of	the
workmen	involve	d	in the present appeal are governed	by
the	Model	Standin	g Orders and that being the case	they
are	not ent	itled	for any subsistence wages. It	is
submitted	by	the	learned Counsel that even if it is	held
that	the	respo	ndents had power to suspend, c	onsidering
the	Model	Standing	Orders and the suspension was	an
interim	suspension	pen	ding the enquiry, the workmen	would
be	entitled	to	full wages. In the alternative it	is
submitted	that	if	it is held that the Certified	Standing
Orders	apply	then	also considering Section 10A of	the
Industrial	Empl	oyment	(Standing Orders) Act, 1946	the
workmen	would	be	entitled to subsistence allowance.	It
is	submitted	that	merely because the workmen had	not
referred	to	Section	10A cannot result in depriving	them
of th	e benefits	if	otherwise in law they are entitle	d to.
Our	attention	has	been invited to the judgment of	the

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Apex	C	ourt in	the	case	of The Management	Hotel	Imperial,
New	Delhi	and	Ors.	v.	Hotel Workers’ Union,	AIR	1959
SC.1342,		Balvantrai		Ratilal	Patel v.	State	of
Maharashtra,		AIR	1968	S.C.	800, and the jud	gment	of the
Constitution		Bench	of	the	Apex Court in the	case	of
V.P.Gindronia		v.		State	of Madhya Pradesh, AIR	1970	SC
1494	in	suppo	rt	of th	e submissions. Reliance	was	also
placed	on	the		judgment	of the Division bench	of	this
Corut	in	the case	of	May	& Baker Ltd. v.	Shri	Kishore
Jaikrishandas		Ichaporia		&	Ors., wherein		considering
Section	10	A of		the	Industrial Employm	ent	(Standing
Ordders)		Act, as	a	mended	in the State of	Maharasht	ra the
learned	Di	vision	Bench		held that the	provisions	of
Section	10A	even	wh	en	there are Certified	Standing	Orders

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would apply and payment would have to be made in terms of

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Section 10A.

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3.		The law in t	he matter o	f payment during the
period	of	suspension	in	our opinion has	be	en settl	ed	by
various	jud	gments of	the	Apex Court. Th	e	law	as	earlier
declared	has	been	redeclared	by the Cons	tit	ution	Bench	in
V.P.		Gindroniya	(supra	). In the matt	er	of		suspension
the	settled	position	is	that the power to		suspend	i	s not
an	implied	term	in	an ordinary contract		between		master
and	servant,	such a	power	can only be	t	he cre	ature	either
of	a	statute go	verning	the contract, or of		an		express
term	in	the contr	act i	tself. Ordinarily i	n	the		absence
of	such	a power	either	under the express	te	rms	of	the
contract	o	r under	the	rules framed under		some	stat	ute it
would	mean	that the	master	would have no		power	to	suspend
a	workman	and ev	en if	he does so, in th	e	sense	that	he

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forbids	the	employee to	work,	he	will	hav	e	to pay	the
wages	during	the so-cal	led	period		of	sus	pension.	Where,
however,	there i	s power	to	suspend		either		in the	contract
or em	ployment	or in	the	statute	or		the	rules	framed
thereunder	the	suspension	has	the		effect		of	temporarily
suspending	the	relationship	of	mas	ter	and		the	servant

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with the consequence that the servant is not bound to

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render service and the master is not bound to pay.

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. With the above, we may now consider the Certified

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Standing Orders applicable to the establishment.

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Certified Standing Order 23(1) reads as under:-

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"23(1) A	workman	against whom any acti	on is
proposed to b	e taken	for misconduct may	be
suspended pendi	ng the	enquiry or for the	period,
if any, al	lowed to	him for giving	his
explanation.	The order	of suspension may	taken
effect immediatel	y on	its communication to	the
workman. If	as a r	esult of the inquiry held	or
explanation tende	red, it	is decided not to	take
any action unde	r standing	order 23(3) the	workman
shall be deemed	to have	been on duty and sh	all be
entitled to full	wages	and all privileges for	the
period		of s	uspension.
It is, therefore, clear	from	the reading of	this
Certified Standing Order	that	there is a power	to
suspend. There is	no	provision for payment	of
subsistence wages.	The onl	y provision as contained	in
the Standing Orders	is that	on the enquiry held	or

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explanation	tendered	if the	manag	ement	de	cides	not	to
take	any action	under	Standing	Order		23(3)	the	the
workman	would be	entitled	to	full		wages	and	all
privileges	during	the period	of	suspension	.		Apart	from
that	there is	no provision	for	payment		of	wages	during
the	period of	suspension.	Applyin	g the		well	known	test
as	set out by	earlier it	would	be	cle	ar that	the	workmen

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would not be entitled to payment of subsistence wages at

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least under the standing orders as they stood.

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4.	The learned Counsel for the appellant however,
seeks	to contend that on a reading of	the	judgments
earlier	adverted to the workmen are	entitled	to
subsistence	allowance. Let us examine the	said	judgments
to find	out whether this submission has merit.	It	is not
necessary	for us to advert to the judgments i	n the	case
of	the Management, Hotel Imperial (supra)	and	Balvantrai
Ratilal	Patel (supra) as both the judgments	have	been
considered	by the Constitution Bench in V.P	.	Gindroniya
(supra).	The Apex Court noted that there are	3	kinds of
suspensions;	(1) A public servant may be	suspended	as a
mode	of punishment; (2) he may be suspended	during	the
pendency	of an enquiry against him if	the	order
appointing	him or statutory provisions	governing	his
service	provide for such suspensions and (3)	Lastly	he
may	merely be forbidden from discharging	his	duties
during	the pendency of an enquiry against him	which	act
is als	o called suspension. The Apex	Court	further
observed	that the right to suspend as a	meas	ure of
punishment	as well as the right to suspend	the	contract
or s	ervice during the pendency of an enquiry	are	both

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regulated	by the contr	act o	f em	ployme	nt	or	th	e	provisions
regulating	the conditio	ns of	service	at		the	s	ame	time
keeping	in force	the	master’s		obli	gations		under	the
contract.	In other	words	the	master		may	ask	his	servant
to	refrain from ren	dering	his	service		but	he	must	fulfil
his	part of the co	ntract.	Refer	ring	to	the	jud	gment	in
Management	of Hotel	Imperial,	New	De	lhi	in	the	matt	er of
suspension	and payment	of	wages	this	i	s how		the	Apex

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Corut has set out the law as set out in Management of

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Hotel Imperial:-

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	"Therein this Court observed that it was	well
settled	that under the ordinary law of maste	r and
servant	the power to suspend the servant	without
pay	could not be implied as a term in an	ordinary
contract	of service between the master and	the
servant,	but must arise either from an	express
term	in the contract itself or a	statutory
provision	governing such contract. It	was
further	observed therein that ordinarily in	the
absence	of such a power either in express	terms
in	the contract or under the rules framed	under
some	statute would mean that the master	would
have	no power to suspend a workman and even	if he
does	so in the sense that he forbids the	employee
to	work he will have to pay the wages dur	ing the
so-called	period of suspension. Where,	however,
there	is power to suspend either in the	contract
or	employment or in the statute or the	rules
framed	thereunder, the suspension has the	effect
of	temporarily suspending the relationship	of

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	master	and	the	serv	ant	with	the	consequence	that
	the	servant	is	not	bound	to	render	service	and
	the	master	is		not		bound	to	pay."
It	would,	therefore	be	clear	from	the	judgment	of	the
Constitution	Bench	that	where	there	is	a	power	to	suspend

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the master is not bound to pay unless the Standing

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Orders, Rules and Regulations so provide.

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	Then considering	the judgment in	Balvantray
Ratilal	Patel (supra)	the Apex Corut once	again
reiterated	the law	in the following	words:-
	"Therein the leg	al position was stated thus:	The
general	principle is	that an employer can	suspend
an	employee of	his pending an enquiry into	his
misconduct	and the	only question that can	arise
in	such a suspensi	on will relate to the	payment
of	his wages	during the period of	such
suspension.	It is	now well settled that the	power
to	suspend, in the	sense of a right to forbid	a
employee	to work,	is not an implied term in	an
ordinary	contract	between master and	servant,
and	that such a	power can only be the	creature
either	of a statute	governing the contract, o	r of
an	express term	in the contract	itself.
Ordinarily,	therefore,	the absence of such	a
power	either as an	express term in the	contract
or	in the rules	framed under some statute	would
mean	that an e	mployer would have no power	to
suspend	an employee of	his and even if he do	es so

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in the	sen	se th	at he forbi	ds the employee	to
work,	he	will hav	e to pay	the employee’s	wages
during	the	period	of	suspension..	Where,
however,	there	is	power to	suspend either in	the
contract	of	employment	or in	the statute or	the
rules	framed	there	under, the	order of su	spension
has	the	effect	of tempor	arily suspending	the
relationship	of	master	and	servant with	the
consequence	that	the	servant	is not bound	to
render	service	and	the master	is not bound	to
pay.	It is	equally	well settl	ed that an order	of
interim	suspensio	n ca	n be	passed against	the
employee	while	an	enquiry is	pending into	his
conduct	even	though	there is	no such term in	the
contract	of	employm	ent or in	the rules, but	in
such a	case	the em	ployee would	be entitled to	his
remuneration	for	the	period	of suspension	if
there be	is no	statute	or rule	under which it w	could ithheld."

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From	the	law	as	declared	by	the	Apex	Corut	therefore	, it
is	clear	that	where	there	is	a	power	to suspe	nd	unless
there	is	a	provi	sion	for		providing	for	sub	sistence
allowance		or	wages	during	the		period	of sus	pension	there
would	be	no	power	in	a Cou	rt	to	direct	payment	of
subsistence		allowance.		We,	theref	ore,	find	that	there	is

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no infirmity in the judgment of either Industrial Court

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or the learned Single Judge on that count.

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We may, however, note that the provisions of Industrial Employment (Standing Orders) 1946 had been

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amended and Section 10A has been introduced which reads

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as under:-

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	"10A.			Payment	o	f su	bsistence	a	llowance:-(1)
Where	any			workman	is	suspended	by the		employer
pending		i	nve	stigation	or	inquiry	into		complaints
or	charges		of	miscon	duct	agai	nst hi	m,	the
employer	s	hall		pay	to	such	workman		subsistence
allowance.
	(a)	at		the rate	of	fifty per	cent of	the	wages
which	the			workman	was	entitled	to		immediately
preceding	t	he		date	of	such sus	pension,	for	the
first	ninety			days	of	suspe	nsion;		and

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(b) at the rate of seventy-five per cent of such

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wages for the remaining period of suspension if

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the delay in the completion of disciplinary

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proceedings against such workman is not directly

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attributable to the conduct of such workman.

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(2	) if	any	dispute	arises		regarding	the
subsistence	allowance	lpay	able to	a	w	orkman	under
sub-section	(1)	the	workman	or		the	employer
concerned	may	refer	the disp	ute to		the	Labour
Court,	constitu	ted	under	the	Indus	trial	Disputes
Act,	1947 (14	of	1947),	whichin	the	local	limits
of	whose		jurisdiction		the		industrial
establishment	wherein	such	work	man	is	employed	is
situate an	d the	Labour	Corut	to	which	the	dispute
is so	referred	shall,	after	giving	the	parties	an

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opportunity		of	being	heard, de	cide	the	dispute
and	such	decision	shall	be final	and	binding	on
the							parties.

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(3) Notwithstanding anything contained in the

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foregoing provisions of this section, where provisions relating to payment of subsistence allowance under any other law for the time being in force in any State are more beneficial than the provisions of this Section, the provisions of such other law shall be applicable to the payment of subsistence allowance in that state."

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From	a re	ading	of this S	ection it is		clear that	during
the	pendency	of	an enquiry	or pending		investigation	if a
workman	is	susp	ended the	n subsistence		wages/allowance	to
be	paid in	the	manner set	out. The		language of	the
Section	is	clear.	The	certified Stand	ing	Orders	are
nothing	but a	cont	ract having	a statutory		flavour.	The
provisions	of	the	Act, th	erefore, overr	ide	the	provisions
of	the said		Certified Sta	nding Orders.		The	Division
Bench	of this	Court	has noted	so in the	cas	e of May	&
Baker	Ltd.	(supra).	We	are, therefore,		of the	opinion
that	though	under	the C	ertified Stan	ding	Orders	the
workmen	represented	b	y the	petitioners		and who	are
suspended	would	not	be e	ntitled to		subsistence	allowance,
however,	they	wou	ld be	entitled to		subsistence	allowance

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in terms of Section 10A of the Industrial Employment

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(Standing Orders) Act.

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To that extent the Appeal is allowed. The

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impugned	orders	of	the	Trial C	ourt	and the	le	arned	single
Judge	are	set	aside.	The	Official	Liquidator		who	has
been	added	as	party	to work	out	the entit	lement	of	the
workmen	based	on	the	representation	in	the	matter	of	dues
during	the	period	of	suspension	which	will	be		submitted

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by the petitioners to the Official Liquidator within a

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period of eight weeks from today.

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(F.I. REBELLO, J.)

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(ANOOP V. dMOHTA, J.)

Association of Engineering Workers v. Smt.N.a.Kadam and Anr.

Case brief

What is this about?

What did the court decide?

Association of Engineering Workers v. Smt.N.a.Kadam and Anr.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

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