State Bank of India Vs. Nanak Chand
Jain  INSC 234 (2 December 1963)
02/12/1963 GUPTA, K.C. DAS GUPTA, K.C. DAS
CITATION: 1965 AIR 122 1964 SCR (5) 621
Industrial Dispute-Sastry award-Requirement
of payment of one month's wages in lieu of notice of termination-Payment of
three month's wages-If sufficient compliance.
The respondent who was an employee of the
appellant Bank was acquitted of the charge of misappropriation of the latter's
money. But on an enquiry by the appellant the respondent was found guilty of
carelessness and it was decided that his service should be terminated. In
accordance with this decision he was informed of the termination of his
services and the appellant tendered three months' pay and allowances in lieu of
notice. Since industrial dispute was pending between the appellant and its
employees the former made an application to the Tribunal under s. 33(2) of the Industrial
Disputes Act, 1947 for approval of its action. The Tribunal held that the
payment of three months pay in lieu of notice in terms of 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 s. 33(2) of the Act The Bank filed the
present appeal on special leave granted by this Court.
Held: The payment for a longer period should
be held to include payment for the shorter period and where three months pay
and allowances had been paid under the provisions of para 521(2)(c) of the
Sastry Award no further payment of one month’s wages under the proviso to s.
33(2) is required.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No.126 of 1963.
Appeal by special leave from the order dated
April 3, 1962, of the Central Government Labour Court at Delhi in O.P. No. 15
C.K. Daphtary, Attorney-General, H.N. Sanyal
Solicitor- General, S.V. Gupte, Additional Solicitor General, K.B. Mehta, H.L.
Anand and Vidhya Sagar, the appellant.
Anand Prakash and S.N. Bhandari, for the
December 2, 1963. The Judgment of the Court
was delivered by DAs GUPTA J. The respondent, Nanak Chand 622 Jain, was a money
tester in the cash department of the Agra Branch of the Imperial Bank of India.
On December 20, 1952 it was detected that a packet containing 10 pieces of 100
rupee notes shroffed by another employee of the Bank and handed over by him to
the respondent were missing. In connection with this the respondent and four
other employees of the Bank were prosecuted, the trial in the Sessions Court
ending with their acquittal-the respondent having been given the benefit of
doubt. Thereafter on December 10, 1954 the Bank served on the respondent a
charge-sheet alleging carelessness and dereliction of duty. An enquiry was held
and the Enquiry Officer found the' charge against the respondent established.
On a consideration of the report of the Enquiry Officer the Bank decided to
terminate his services with effect from May 16, 1955 by paying him three months
pay and allowances. The respondent was given further hearing as regards the
nature of the proposed punishment and thereafter his services were terminated
as from the close of business on May 16, 1955. The validity of the enquiry
proceedings was challenged by the respondent on the ground that he had not been
given adequate facility for being represented by a Union official of his choice
and ultimately after a decision of the Labour Appellate Tribunal that the
employee had an unqualified option in regard to the selection of persons who
would represent him at the departmental enquiry a fresh enquiry was held after
withdrawing the order of termination of his services. This fresh enquiry. was
held on the 21st and 22nd of November, 1956, On this occasion also the enquiry
officer found the charges against the respondent proved. After consideration of
the report and after giving the respondent an opportunity to show cause why the
reposed punishment of termination of his services on payment of three months'
salary in lieu of notice should not be imposed on him the Bank decided in
November 1960 to terminate his. services by giving him three months' salary in
lieu of notice in terms of Para 521 (2) (c) of the Sastry Award.
623 As an industrial dispute between the Bank
and its employees was pending before the National Industrial Tribunal at this
time, the Bank made an application on November 21, 1960 to that Tribunal under
s. 33(2) of the Industrial Disputes Act for approval of its action in
terminating the services of the respondent. Before making this application the
Bank had informed the respondent by its letter dated November 4, 1960 of its
decision to terminate his services and tendered a payment order for Rs. 450.71
being his pay and allowances for three months. The National Industrial Tribunal
transferred this application to the Central Government, Labour Court at Delhi,
for disposal. Resisting this application the respondent contended inter alia
that he had not been paid wages for one month as required under the proviso to
s. 33(2) and so the application should be dismissed. An application under s.
33A of the Industrial Disputes Act was also filed by the respondent before the
Central Government Labour Court at Delhi, complaining that the Bank had
contravened the provisions of s. 33 by not paying him the one month's pay as
required under the proviso. This application was resisted by the Bank which
contended that the application was not maintainable and the action taken by it was
legal and justified. It was urged by the Bank that there had not been any
contravention o section 33(2) as alleged by the employee as three months' pay
and allowances had been paid. The Labour Court held that payment of three
months' salary in terms of 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 s. 33 (2). It held accordingly that the application under s. 33A was
maintainable and fixed the application for further hearing on other issues on a
When the application under s. 33 (2) (b) of
the Industrial Disputes Act that had been filed by the Bank came up for hearing
before the Court the Presiding Officer, Mr. Vyas, held himself bound by 624 the
decision of his predecessor Mr. Krishnamurty in the application under s. 33A
that there had been contravention of this requirement of payment of one month's
pay under the proviso. Accordingly, he rejected the Bank's application for
approval to terminate the services of the respondent.
It is against this order that the present
appeal has been filed by the Bank by special leave.
The only question for our consideration is
when payment of three months' salary has been made in terms of Para 521 (2) (c)
of the Sastry Award, is it correct to say that the requirement of payment of
one month's salary under the proviso to s. 33(2) has not been complied with? On
behalf of the Bank it is urged that it is unreasonable to think that three
months' salary already paid did not include the wages for one month required
under the proviso. On the other hand learned counsel appearing on behalf of the
respondent contends that the payment of three months' pay and allowances as
provided in para 521 (2) (c) of the Sastry Award has a different purpose from
that of payment of one month's wages in the proviso to s. 33 (2). In support of
this argument he has drawn our attention to the words of the provision as
regards this payment in para 521 (2) (c).
These words are shall be liable only for
termination of service with three months' pay and allowances in lieu of
notice... . . . . . . . " According to the learned counsel the use of the
words "in lieu of notice" in this provision marks the difference in
character of the payment-provided for in the proviso to s. 33(2) and it is
clearly not in lieu of notice. It appears to us that the words "in lieu of
notice" in para 521(2) (c) have not the significance which the learned
counsel attributes to them. We do not think that the Sastry Award intended that
the services of such an employee could be terminated by giving him three
months' notice without paying him three months' pay and allowances.
Though the words "in lieu of
notice" have been used it is clear that three months' pay and allowances
have to be paid in every 625 such case of termination of service. The object in
making this provision appears therefore to be the same as in the proviso, viz.,
to give the employee some monetary assistance. It is difficult to see why
therefore three months' pay and allowances paid under para 521 (2) (c) should
not be held to include pay for a lesser period as provided under the proviso to
In our opinion, the payment for a longer
period should be held to include payment for the shorter period and where three
months' pay and allowances had been paid under the provisions of para 521 (2)
(c) no further payment of one month's wages under the proviso to s. 33 (2) is
We have therefore come to the conclusion that
the Labour Court erred in dismissing the Bank's application under s. 33 (2) on
the ground that the requirement or payment of one month's wages had not been complied
Accordingly, we allow the appeal, set aside
the order of the Labour Court and direct that the application under s. 33 (2)
(b) be disposed of on merits. There will be no order as to costs.