Partly allowed

Air India Ltd. v. Jagdish v.Gursahani and Anr. .

Bombay HC24 Sept 2004WP/448/2003

Case brief

AI extract

What is this about?

Petitioner challenged an order refusing approval for dismissal. Court held settlement required Board approval which was granted later. Petitioner did not need to deposit shortfall. Order set aside and matter remanded for fresh evidence opportunity.

What did the court decide?

Impugned order refusing approval set aside. Petitioner permitted to lead evidence on misconduct and matter remanded to Tribunal.

Air India Ltd. Vs Jagdish v.Gursahani and Anr. . — Labour and Industrial Disputes | Bombay HC (2004)

¶1

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

¶2

WRIT PETITION NO.448 OF 2003

¶3

Air India Limited, ) A Company incorporated under ) the Companies Act, 1956 having ) its office at Air India Building) Nariman Point, Mumbai-400 021. )..PETITIONERS Versus 1. Mr. Jagdish Gursahani, ) B-2/18, Gautam Arcade CHS ) Thane (East)-400 603. ) 2. Union of India through the ) Presiding Officer, Central ) Government Industrial Tribunal) No.1, Sion, Mumbai. ) 3.State of Maharashtra, Ministry) of Labour, Mumbai. )..RESPONDENTS Mr. S.U. Talsania with Mr. J.Saluja i/b. M.V.Kini & Co., for the Petitioners. Respondent No.1 in person. CORAM: F.I. REBELLO, J. DATE : 24th September,2004 ORAL JUDGMENT:

¶4

The petitioners by the present petition impugns the

¶5

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¶6

order	dated 23rd July, 1999 whereby the lear	ned	Presiding
Officer	of the National Industrial Tribunal, Mumbai,	held	that
the	enquiry against the respondent No.1 herein is	neither	fair
nor	legal and the findings are perverse and	granted	an
opportuni	ty to the petitioners herein to prove	the	charges
against	the respondent No.1, as also the sub	sequent	order
dated	20th December, 2002 passed in a Review	application	made
by	the respondent No.1 herein. By the order in	review	the
learned	Presiding Officer considering his earli	er	findings
that	the petitioner herein had failed to pay one	month’s	wages
in	lieu of notice recalled its earlier order and	refused	to
grant	approval to the petitioners herein for the	action	of
dismissal	against the respondent No.1. It may be	made	clear
that	the finding is that there was a shortfall in	the	payment
of	one month’s wages as the increase in wa	ges by	the

¶7

Settlement of 31st December, 1995 had not been taken into

¶8

consideration.

¶9

2.	At th	e hearing	of this p	etition o	n behalf	of the
petitioners	their	lear	ned	Counse	l c	ontends	that	the		impugned
orders	disclose	an	error	of	law	apparent	on	the face	of	the
record.	It i	s p	ointed	out	that	the	entire	case	of	the
respondent	is base	d on	non	payment	of	the	wag	es purported		to be
calculated	based	on	the	se	ttlement	dated		31st Decem	ber,	1995.
It is	pointed	out	th	at cla	use 2	of		the said		settlement
provided	that	both	the	parties	agr	ee that	th	e agreemen	t	will
be	subject to	the	approval	"of	the	Board	of	Directors	of	the
Air	India Li	mited".	It	is	pointed	out	that	the Bo	ard	gave
approval	to the	sett	lement	on		27th	Marc	h, 1996.		The
application	for	a	pproval	by	the	petitio	ner	filed befo	re	the

¶10

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¶11

Presiding		Officer,	National In	dustrial	Tribun	al	was	on	15th
March,	1	996. It	is, therefor	e, su	bmitted	that	the		agreement
had	not	come into	force as on	15th	March	,June,	1996	when	the
application		was mo	ved which w	as re	ceived	by	the		respondent
No.1	on	16th Marc	h, 1996 and	conse	quently	the	finding	by	the
learned		Presiding Of	ficer discloses	an	error	of	law		apparent
on the	fac	e of th	e record.	Alter	natively	it	is	submitt	ed that
though	th	ere was	a settlement	entered	into	on	31st		December,
1995	that	settlement	was not a	cted	upon.	For	t	hat	purpose
reliance	is	placed	on various	docum	ents	anne	xed	with	the
petition.		It is	then pointed	out	that	sub	sequent		settlement
was	entered	into	on 5th May,	1996	and	it	is thi	s	settlement
which	is	acted	upon. T	his se	ttlement,	there	fore,	is	also
after	15th	March, 1	996 and con	sequently	it	could	not	be	said
that	the	petitioners	herein had	mis	calculated	the	qu	antum	of
one	month	’s salary	payable to	the	responden	t N	o.1.	For	the

¶12

aforesaid reasons also it is submitted that the orders are

¶13

liable to be set aside.

¶14

On the other hand on behalf of the respondent No.1,

¶15

who appea	rs	in	person,		it is	su	bmitted	that	the			petitioners
had acted	o	n the	settlem	ent	on	31st	Dec	ember,	1995.			Reliance
is placed	on	salary	vouch	ers	to	show	that	amounts		in	te	rms of
settlement	of	31st	December	,	1995	had	been	paid	to			employees
who were		entitled	to	by	the	petitio	ners	before	1	5t	h	March,
1996.	Once	that	be	the	case,	the	sett	lements	have		been	acted
upon and,		therefore,	the		order	of	the	Tribunal	is			justified.
Alternatively	it	is	su	bmi	tted	that		considering			that	the
settlement i	tself	do	es not		provide	for	the	date	on		which	it
will come	into	forc	e con	sid	ering	the	langu	age of		S	ection	19(1)

¶16

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¶17

of	the Ind	ustrial Disputes Act, 19	47 as	no	date is		specified
the agr	eement is	deemed to have co	me into	force	on	the d	ay the
settlement	was	signed by the parties.		In the	instan	t ca	se the
settlement	wa	s signed on 31st	December,	1995	and,		therefore,
that	is the	date on which the	settlem	ent has	come	into	force.
It	is, t	herefore, submitted that	the	learned	Tribuna	l ha	s not
committed	any	error of law in	recording	a fi	nding	that	the
settlement	had	come into force on	31st	December	, 1995	.	It is
lastly	urged	that the material	on w	hich th	e petit	ioners	are
now	relying	to contend that the	settlemen	t had	not	come	into
force	on	account of various act	s by	several	parties	can	not be
gone	into	by this Court in th	e exer	cise of	its	extra	ordinary
jurisdiction	as	these materials w	ere not	placed		before	the
Industrial	Trib	unal and it is f	or the	first	time	that	these
materials	are	now sought to be	placed	before	this	Court.	The
petitioners,	it	is pointed out,	cannot	place	ne	w	material
and/or	call	upon the court to	place	reliance	on	that	material
which	was	not available for	consider	ation b	y the		Industrial
Tribunal.		This Court, therefore,	ought	not	to co	nsider	the
said	contention	urged on behalf	of	the	petiti	oner	and/or
ignore	the	material in the form	of	documents	which	are	sought
to	be relie	d upon by the petitio	ners.	For	all th	e	aforesaid

¶18

reasons the respondent No.1 in person prays that the order of

¶19

the Industrial Tribunal be not interfered with.

¶20

3.	From	the above,	the main qu	estion	which c	omes for
consideration	is	wheth	er the		settleme	nt dated	31st	December,
1995 had	beco	me	operative	on	31st	December,	1995.	If the
answer to	this	question	is	in	the	affirmative	then	the finding

¶21

of the Tribunal will have to be supported and the petition

¶22

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¶23

rejected.

¶24

A few facts may be now set out to enable this Court to

¶25

consider		the controversy which has arisen.	The responde	nt on
6th	Feb	ruary, 1990 was apprehended by	the Customs	Authorities
for	being	involved in smuggling activities.	An order	for
detention		under COFEPOSA. was passed on	22nd February,	1990.
A	charge	sheet was served on him on	31st January,	1992.
Earlier	to	that he had been suspended	by order of	6th
February,	1990	. The Enquiry Officer gave	his findings on	30th
June,	1995.	An order of dismissal of the	respondent No.1	came
to	be	passed on 6th December, 1995 which	was to come	into
effect	from	the date of communication of	the order to	the
responden	t	No.1. That order along with	the application	was
served	on	the respondent No.1 on 16th March,	1996. There	is
no	dispute	that the application as required	by law had	been
made	under	Section 33(2)(b) of the I.D.	Act by the	petitioner
herein.		An employer seeking approval un	der Section	33(2)(b)
has	to	satisfy (1) There is an orde	r of dismiss	al or
discharge	;	(2) That they have paid wages	for one month	and
(3)	An	application had been made by the	employer to	the
authority	be	fore which the proceedings	are pending	for
approval		of the action taken by the emplo	yer. In the	instant
case	the	respondent No.1 was dismissed	from service.	An
applicatio	n	for approval before the Compete	nt Tribunal	was

¶26

made and the petitioner was offered wages for one month. The

¶27

only dispute is regarding the quantum of the said wages.

¶28

At the outset it may be mentioned that the learned

¶29

Industrial Tribunal has also recorded a finding

¶30

that the

¶31

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¶32

enquiry conducted agai	nst the respondent No.1	suffers	from
violation of principles	of natural justice and	fair play	and
further that the findin	gs are perverse.	Consequences of	such
findings are that the	petitioner is permitted	to lead	evidence
de novo before the Tri	bunal in support of	their allegations	of
misconduct. See Shankar	Chakravarti v.	Britannia Biscuit	Co.
Ltd. and Anr. AIR	1979 SC 1652. The	petitioners in	fact
have moved such an	application. The law i	n the subject	has
now been answered by	the Apex Court in	the judgment	in
Karnataka State Road	Transport Corporation	v.	Smt.
Lakshmidevamma & Anr. 20	01 AIR SCW 1981 1981.	It is no	doubt
true that the stage	at which the application	can be	moved
considering the majority	judgments are at th	e stages as	set
out in the Judgment.	In the instant case,	however, such	an
opportunity was sought	in the application fo	r approval	dated
March 15, 1996 the	consequence of that wo	uld be on	the
Tribunal having come	to the conclusion that	the inquiry	has
been conducted contrary	to the principles o	f natural	justice
and fair play and/or	the findings are perve	rse ought to	grant
an opportunity to the	respondent No.1 to	lead evidence	afresh

¶33

in support of the misconduct if the opportunity had not been

¶34

refused.

¶35

The real question, however, is that if there has been

¶36

non-compliance		of	the	requ	irement	of	the	proviso	to	Section
33(2)(b)	then	in	that	event	and	if	appro	val has	been	rejected
there	is	no	question	of	the	petiti	oners	having	an op	portunity
once	again	of	leading	evid	ence	to	prove	misconduct	before	the
Tribunal	in	an	ap	plication	whic	h is	pend	ing u	nder	Section
33(2)(b).	The		law	now	stands	settled	by	the	judgment	in

¶37

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¶38

Jaipur	Zila		Sahakari	Bhoo	mi	Vikas	Ba	nk Ltd.		v. Shri	Ram
Gopal	Shar	ma	& Ors.,	AIR	2002	SC		643.	The	question that	has
to	be	an	swered i	s, whet	her	in f	act	the	settlem	ent had	come
into	force.		There	is	no	dispu	te	that	the	settlement	was
signed	on	behal	f of	the	Union	as		also	by	representative of	the
petitioners		on	31st	Decembe	r,	1995.		But	wha	t is relevant	and

¶39

needs to be reproduced are the clauses 2, 6, 7 and 12 of the

¶40

said settlement which read as under:-

¶41

Both the parties agree that this agreement will be

¶42

subject to the approval of the Board of Directors of

¶43

Air India Ltd.

¶44

	6.	Applicab	ility:	Th	is settlement is in respect of
all	workmen	cove	ring		non-technical and technical
categories		rep	resente	d	by AIEG.
	7.	Period	of	settlem	ent: This settlement covers the
period	1.9.90	to	31	.12.91	and 1.1.92 to 31.12.96
respectively.

¶45

Both the parties agree that an amount ranging

¶46

from Rs.12,000/- at the minimum and Rs.20,000/- at the

¶47

maximum on different slabs will be paid by way of

¶48

repayable advance in January, ’96 against arrears arising out of this settlement, and the remaining arrears amount after adjusting this advance will be paid on mutually agreed dates subject to financial

¶49

position of the Company."

¶50

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¶51

These	ad	ditional	clauses	apar	t	fro	m	clause	(2	)	also	have	been
reproduced	as		on beh	alf	of	th	e	respond	ent		No.1,	who	is
appearing	i	n	person,	has	plac	ed	re	liance	upon		t	he	receipts
issued	by	the	petitioner	in	resp	ec	t o	f som	e		of its	em	ployees
to	show	that	advances	as	payable		in	terms	of		clause	12 of	the
settlement		have	in fact	been	pa	id	to	the	e	mp	loyees.	There	is
also	no	dis	pute that	the	sett	le	ment	does	not		provide	for	on
what	date	it	will	come	into		force	except	t	ha	t it	will	cover
the	period	peri	od from	1st	Se	pt	ember,	1990	t	o	31st	De	cember,
1991	and	1st	January,	1992	to		31st	Decemb	er,		1996	and	covers
all	work	men	cov	ering	non-t	ec	hnical	and		te	chnical	cat	egories

¶52

represented by AIEG. Section 10(1) of the I.D. Act reads as

¶53

under:-

¶54

"A settlement shall come into operation on such date as is agreed upon by the parties to the dispute, and if no date is agreed upon, on the date on which the memorandum of the settlement is signed by the parties to the dispute." The respondent No.1 would be right in contending that in the absence of the date in the settlement on which date it will come into operation by virtue of Section 19(1) it would be the date on which the settlement was signed on 31st December, 1995. What, however, will be the effect of clause 2 of the settlement as reproduced earlier, as both the representative representing the management of the petitioner and the representative of the Union agreed that the agreement will be subject to the approval of the Board of Directors of Air India Limited. In other words, therefore, even though the

¶55

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¶56

settlement unless	the	has Board	been of	signed it Directors	wo grants	uld ap	be of proval.	no	effect It is	until no	and doubt
true	that	it	is	a Settlement	in	Form	"H".	Se	ttlement	is	a
contract	b	etween	t	wo parties	.	Howev	er, by		virtue	of	the
provisions		of	the	Industrial	Disp	utes	Act, 1	947	it	has	a
statutory		implica	tions	both for	th	e m	anagemen	t as	well	as	the
respondent		No.1.		The language	of	claus	e 2	would	be	that	the
settlement		would	not	be	operati	ve	unles	s	the	Board	of
directors	of	the	pe	titioner gran	ts	its	approval.		If	there	was
no	appro	val	what	will be	the	effect	need	not	be lo	oked	into
today	as	that	does	not arise.		Adm	ittedly,	the	board	did	grant
approval		on 2	7th	March, 199	6.	The	effect	of	this	approv	al is
that	the		settlem	ent gets	post	facto	sanctio	n o	n 27th		March,
1996,	Th	e e	ffect	is that i	t is	only	from	the	date	the	Board
grants		approval	can	the set	tlement	be	said	to	be	a se	ttlement
by	law	bindin	g	on the p	etitioner	s th	ough	it w	ill rela	te	back
to	31st	Dec	ember,	1995.	It is	by	now	well	settled	that	the
company		or	cor	poration can	be	bound	any	contr	act by		persons
duly	authori	sed i	n	law.	The	very	fact	that	the	repre	sentative
of	the	peti	tioners	had held	out	in	the	settleme	nt	that	the
settlement		would	c	ome into	e	ffect	on	the	Boar	d	granting
approval	an	d the	o	ther party	to	the	settle	ment	agreein	g to	it,
it	was	a	clear	pointer to	the	unio	n that	the	sett	lement	to
become		effective		required	the	sanctio	n or	appro	val	of	the
Board.		It	wo	uld, ther	efore,	be	clear	that	the	se	ttlement
become		operativ	e	consequent	to	the	board	gran	ting	approval	on
27th	Mar	ch,	1996.	That	approval	wou	ld be	deem	ed to	be	post

¶57

facto approval for the settlement which was entered into on

¶58

31st December, 1995.

¶59

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¶60

. The next question, then is whether the petitioners as

¶61

on 15	th March, 1996 were bound to calculate	the	wages in	terms
of	the settlement which got approval by the	boa	rd of	the
petitioner	on 27th March, 1996 or based upon	the	emoluments	or
wages	existing on that day i.e. 15th March,	1996.	The	effect
of the	approval on 27th March, 1996 would be	that	the wages	in
terms	of the Settlement would have to be	paid	from	31st
December,	1995. That could not have been	contemp	lated on	15th
March,	1996, the date on which the application	was	made as	on
that	date the petitioners were bound to pay	wages	de hors	the
settlement. there is no .	The petitioners have so paid and on that count dispute. It may only be pointed out that the respondent No.1 in
person	has in fact produced some	supporti	ng docu	mentary
evidence	to show that the petitioners thems	elves	had acted	in
terms	of the settlement of 31st December,	1995	by	making
atleast	some payments in terms of Clause 12	of	the sett	lement.
In	my opinion that can be of no assistance	in so	far as	the
legal	issue involved. Considering that	there	would	be
approval	the officers of the petitioners may		have r	eleased
amounts	in advance. That would not make	the	settlement	in
force	on the date the amounts were paid.	At	the highest	this
was	pending post facto approval to the	sett	lement.	The
respondent	is not be entitled to take advan	tage o	f the	said
fact.	The settlement had not come into	for	ce on	31st
December,	1995 or on 15th March, 1996. Mere	paym	ent of	some
advance,	therefore, is of no consequence, to	hold	that	the

¶62

settlement had come into force on 31st December, 1995 or was

¶63

in force on 15th March, 1996.

¶64

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¶65

It was also urged on behalf of the petitioners herein

¶66

placing		reliance on	the	jud	gment	of	a lea	rned	singl	e Judge	of
this	Court	in Balmer	Lawrie	&	Co.	Ltd.	vs.	Wa	man	B.	More
and	Anr.,	1981 (42)	F.L.R	.272	that	in	case	of	short	fall it	was
open	to	the	petitione	rs	to	have	deposited	the	dif	ference	of
shortfall		before	the	Ind	ustrial		Tribunal	a	nd	that	the

¶67

petitioners have in fact so done. For the view to be taken it

¶68

is not necessary for this Court to go into that issue.

¶69

Considering the above, in my opinion the order passed

¶70

refusing		to gran	t	ap	proval f	o	r	t	h	e	a	ct	of	dismi	ssal w	ill have
to be	set	aside.		It	will		h	ave			to	be	held	that	the	petitioners
had	compl	ied	with		the req	ui	r	ement			of		payment	of	one	month’s
wages.		Once	that		be the			case			the		impugned	order	dated	23rd
July,	199	and	20th		December,			200	2		to		that	extent	will	have to
be set		aside.	T	he	matter		h	as	t	o	be		remanded	b	ack	to the
National		Industrial		Tr	ibunal	f	o	r		g	iving		fresh	opp	ortunity	to
the	petiti	oners	herein		to lea	d		e	v	id	ence		on	the	allegation	of
misconduct		levelle	d	ag	ainst t	h	e		r	e	sponde	nt	No.	1.	Nee	dless to

¶71

say that the respondent No.1 will be entitled to participate

¶72

in the proceedings and lead his own evidence.

¶73

Rule made absolute in terms of paragraph 8. No order

¶74

as to costs.

¶75

10.		Consi	dering	that the	applicatio	n for a	pproval i	s of
the	year	the		the	year	1995	the	Presi	ding	Office	r	of	the
National	In	petitio	ners	have	in	fact	so	done	.	For	the	view	to
be	taken	it	T	ribunal	whe	n	appoin	ted	to	dispo	se	of	the
applicatio	n	w	is	not	necessar	y	for	this	Court	to	go	into	that