Holding

A dismissal order that is not approved by the Tribunal under Section 33(2)(b) is void and the employee is deemed to have remained in continuous service, entitling him to reinstatement and back wages.

Summary

The Tamil Nadu State Transport Corporation dismissed a junior superintendent after a departmental inquiry and sought approval of the dismissal under Section 33(2)(b) of the Industrial Disputes Act, 1947. The Labour Tribunal rejected the application on merit, finding no prima facie case for dismissal. Despite the rejection, the corporation neither reinstated the employee nor paid his wages, prompting the employee to obtain a writ order for reinstatement and back wages from the High Court. On appeal, the Supreme Court examined the effect of a Tribunal's refusal to approve a dismissal, holding that such refusal renders the dismissal void and the employee must be treated as continuously in service. The Court affirmed that the employer is obligated to pay all consequential benefits, including back wages, and that the High Court's direction was lawful. Consequently, the corporation's appeal was dismissed with costs.

Issues considered

What is the legal effect of a Tribunal's refusal to approve an employer's order of dismissal under Section 33(2)(b) of the Industrial Disputes Act, 1947?
Is the employee entitled to reinstatement and back wages when the dismissal order is not approved?
Does the employer have any recourse to enforce its right to dismiss the employee after such refusal?

Legislation cited

Industrial Disputes Act, 1947s. 33(1), s. 33(2)(b)

Subjects

Industrial Disputes ActSection 33DismissalReinstatementBack wagesLabour TribunalEmployee rightsVoid order

Judgment

M.D. TAMIL NADU STATE TRANSPORT CORPORATION A
v.
NEETHIVILANGAN, KUMBAKONAM

MAY 4, 2001

[D.P. MOHAPATRA AND SHIVARAJ V. PATIL, JJ.] B

Industrial Disputes Act, 1947-S. 33(2)(b)-Dismissal-Emp/oyee-
-- .(
Dismissed from service during pendency of dispute before Tribunal-
Application for approval of order of dismissal-Rejected by Tribunal-Effect
of-Held; order of dismissal, invalid-Employee entitled to reinstatement C
with continuity of service and backwages.

Appellant-Corporation initiated Departmental inquiry against
respondent employee and on establishment of the charges, an order of
dismissal of respondent from service was passed. Thereafter, appellant-
Corporation made an application before the Tribunal for approval of said D
order of dismissal under Section 33(2)(b) of The Industrial Disputes Act,
1947, which was dismissed on merit. Appellant unsuccessfully filed writ
petition, writ appeal and special leave petition thereafter. Even after Tribunal's
refusal to approve the order of dismissal, respondent was neither re-instated
in service nor was he paid wages. Aggrieved, respondent filed a writ petition E
for re-instatement in service, for payment of wages and other consequential
benefits which was allowed by single Judge of High Court. Hence the present
appeal

On behalf of appellant-Corporation it was contended that the respondent
was not entitled as of right to claim reinstatement on the ground that the F
application for approval under Section 33(2)(b) of the Act filed by the
management had been rejected by the li'ibunal but has to approach the Tribunal
for enforcement of his right.

On behalf of the respondent-employee it was contended that on rejection
of the employer's prayer for approval of the order of removal of the workman G
the punishment order becomes void and unenforceable indeed it is nonest in
the eye of the law; thus the High Court rightly directed reinstatement of the
respondent with back-wages.

Dismissing the appeal, the Court
499 H
500 SUPREME COURT REPORTS [2001] 3 S.C.R.

A HELD: 1.1. Where the Tribunal refuses to accord approval for the
•
order of dismissal and rejects the application filed under Section 33(2)(b) of ~~

the Industrial Disputes Act, 1947 on merit, the employer is bound to treat
the employee as continuing in service and give him all the consequential
benefits. Thus, High Court was justified in issuing a direction for reinstating
the respondent and to pay him the back wages. [506-F; 507-C]
B
1.2. There is no rational basis for holding that even after the order of
dismissal or discharge has been rendered invalid on the Tribunal's rejection
of the prayer for approval the workman should suffer the consequences of ).:_ .
such invalid order of dismissal or discharge till the matter is decided by the
Tribunal again in an industrial dispute. Accepting this contention would render
c the bar contained in Section 3J(1) irrelevant. While the employer has the
discretion to initiate a departmental inquiry and pass an order of dismissal ,.......
or discharge against the workman the order remains in an inchoate state
till the employer obtains order of approval from the Tribunal. By passing the
order of discharge or dismissal de facto relationsf!ip of employer and
D employee may be ended but not the de Jure relationship for that could happen
only when the Tribunal accords its approval. The relationship of employer
and employee is not legally terminated till approval of discharge or dismissal -.,.---
is given by the Tribunal. In the instant case, the Tribunal on consideration
of the matter held that the employer had failed to establish a prima facie case ~

for dismissal/discharge of the workman, and therefore, dismissed the
E application filed by the employer on merit. The inevitable consequence of this
would be that the employer was duty bound to treat the employee as continuing
in service and pay him his wages for the period, even though he may be
subsequently placed under suspension and enquiry initiated against him.
-
[506-E-F; 507-A-B]
F Strawboard Manufacturing Co. v. Gobind, (1962] Suppl. 3 SCR 618;
Punjab Beverages Pvt. Ltd. Chandigarh v. Suresh Chand and Am:, [1978] 3
SCR 370 and Tata Iron and Steel Col Ltd. v. S.N. Modak, (1965] 3 SCR 411,
relied on.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3593 of
G 2001.
From the Judgment and Order dated 9.2.2000 of the Madras High Court
in W.A. No. 157 of 2000. .......~.

S. Sivasubrarnaniarn, R. Nedurnaran and M.A. Krishna Moorthy for the
H Appellant.
M.D.T.N. STATE TRANS. CORP. v. NEETHIVILANGAN [D.P. MOHAPATRA, J.] 501

K. V. Viswanathan and V. Ramasubramanian for the Respondent. A
The Judgment of the Court was delivered by

D.P. MOHAPATRA, J. Leave granted.

The core question that arises for determination in this case is what is B
the right of a workman after the application filed by the employer for approval
of the order for his dismissal/discharge from service is refused by the Tribunal
and what is the remedy open to the workman in such a situation?

The facts of the case may be shortly stated thus : ·the appellant, Tamil
Nadu State Transport Corporation, (Kumbakonam Division -I) Ltd., C
Kumbakonam initiated a departmental inquiry against the respondent
Neethivilangan who was a Junior Superintendent in the Head Office at
Kumbakonam. The charges having been established in the departmental inquiry
an order for dismissing the respondent from service was passed on 5th
March, 1984. Thereafter an application was made by the appellant for accord D
of approval under section 33(2)(b) of the Industrial Disputes Act, 1947, (for
short 'the Act') before the Tribunal. The Tribunal rejected the prayer for
approval on merit vide the order dated 30.7.1984. The appellant filed Writ
Petition No.8849/84 challenging the order passed by the Tribunal which was
dismissed by the High Court by the judgment dated 18.12.1987. Writ Appeal
No.321/88 filed against the said judgment was dismissed. The appellant filed E
special leave petition No.12350/88 in this Court which was also dismissed.
Even after it failed to obtain approval of the Tribunal for the order of removal
of the respondent the appellant neither reinstated him in service nor paid him
wages. The resultant position was that the respondent remained without work
and without wages though he was ready and willing to render service in the F
establishment.

Under the impelling circumstances as no1ed above the respondent filed
the Writ Petition No.1498/99 for reinstatement in service, for payment of
wages and other consequential benefits. A single Judge of the High Court
by the judgment dated 4.11.1999 allowed the writ petition on the following G
terms:

"In the result, all the points (A) to (D) are answered in favour of the
petitioner and against the respondent. This Court further holds that
the petitioner is deemed to have been in service continuously since
5.3.1984 onwards and deemed to be discharging his functions as an H
502- SUPREME COURT REPORTS (2001] 3 S.C.R.

A employee of the respondent and he is entitled to all arrears of salary
with annual increments and all attendant and concomitant benefits for
the said period and till date of reinstatement. There will be a direction
directing the respondent to work out the money value of the same and
pay the arrears within 12 weeks from today.

B In the circumstances, there will be a further direction directing the
respondent to forthwith reinstate the petitioner in service with all
attendant and consequential benefits. However, at the same time as
criminal prosecution is pending against the writ petitioner, liberty is )o:: .,
given to the respondent to place the petitioner under suspension
subject to payment of full salary at the present rate of scales payable.
c
Further liberty is given to the writ petitioners to institute
,--
appropriate proceedings before a competent court or fort1ms or file a '-

writ petition for damages after termination of the pending criminal
prosecution and work out his. remedies.
!'
D The writ petition is allowed with costs ofRs.3,500/-. Consequently,
W.M.P. No.2118 of 1999 is closed."
~-
The writ appeal No.157/2000 filed by the appellant against the said
judgment was dismissed by the Division Bench by the judgment dated 9.2.2000. #,,

E Hence this appeal by the employer by special leave.

The main thrust of the contentions raised by Shri S. Sivasubramaniam ,.
learned senior counsel for the appellant is that the respondent is not entitled
as of right to claim reinstatement on the ground that the application for
approval under section 33(2) (b) of the Act filed by the management has been
F rejected by the Tribunal. It is his submission that the respondent has to
approach the Tribunal for enforcement of his right and is entitled to such
relief as the Tribunal decides.
..
Per contra Shri K. V Vishwanathan learned counsel appearing for the "
respondent supported the judgment of the single Judge which was confirmed
G by the Division Bench of the High Court. It is his submission that on rejection
of the employer's prayer for approval of the order of removal of the workman '
the punishment order becomes void and unenforceable; indeed it is non est /......___,
in the eye of the law. Therefore, th~ High Court rightly directed reinstatement
of the respondent with back-wages. On the rival contentions raised by the
H counsel for the parties the question formulated earlier arises for consideration.
M.D.T.N. STATE TRA."IS. CORP. v. NEETHIVILANGAN [D.P. MOHAPATRA, J.] 503

Section 33 of the Act makes provision for insuring that the conditions A
;..- of service remain unchanged during pendency of certain proceedings. In sub-
....,.._...,._
section(!) is incorporated the bar that no employer shall during pendency of

- any conciliation proceeding before a conciliation officer or a Board or any
proceeding before an arbitrator or labour court or Tribunal in respect of an
industrial dispute, in regard to any matter connected with the dispute, alter
to the prejudice of the workman concerned with such dispute, conditions of B
service applicable to them immediately before commencement of the
proceedings; or for any misconduct connected with the dispute, discharge or
punish, whether by dismissal or otherwise any workman concerned with such
~
dispute, save with the express permission in writing of the authority before
which the proceeding is pending. c
The purpose of the prohibitions contained in Section 33 is two-fold. On
the one hand, they are designed to protect the workmen concerned during
' A

the course of industrial conciliation, arbitration and adjudication, against
employer's harassment and victimisation, on account of their having raised
the industrial dispute or their continuing 'the "pending proceedings", on the D
other they seek to maintain status quo by prescribing management conduct
which may give rise to "fresh disputes which further exacerbate the already
\ strained relations between the employer and the workmen". However, the
section recognises the right of the employer to take necessary action like the
discharge or dismissal on justified grounds. To achieve this object, a ban has
been imposed upon the employer exercising his common law, statutory or E
... contractual right to terminate the services of his employees according to the
contract or the provisions of law governing such service. The ordinary right
of the employer to alter the terms of his employee's services to their prejudice
'
. -- or to terminate their services under the general law governing the contract of
employment has been banned subject to certain conditions. F
Sub-section (2) deals with alteration in the conditions of service or the
discharge or punishment by dismissal or otherwise of the workman concerned
in the pending dispute but in regard to any matter not connected with such
""'-- pending dispute. Though this provision also places a ban in regard to matters
not connected with the pending dispute, it leaves the employer free to discharge
G
or dismiss a workman by paying wages for one month and making an application
-~
to the authority dealing with the pending proceedings for its 'approval' of the
action taken. There is a distinction between matters connected with the
--'... industrial dispute and those unconnected with it. Thus, a balance between
the interests of the workmen and the employer is sought to be maintained in
the provisions of Section 33. The action taken under Section 33(2) will become H
r
504 SUPREME COURT REPORTS [2001] 3 S.C.R.

A effective only if 'approval' is granted. If the 'approval' is refused, the order
of dismissal will be invalid and inoperative in law. In other words, the order
of dismissal has to be treated as non est and the workman will be taken never

B
to have been dismissed.

Considering the scheme of section 33 this Court, in the case of
Strawboard Manufacturing Co. v. Gobind, [1962] Suppl. 3 SCR 618, observed:
-
"Thus sub-s.(l) lays down that if an employer proposes to discharge
a workman in relation to a matter connected with the dispute which
might be pending before a tribunal the employer must put such
proposal before the tribunal and obtain its express permission in
c writing before carrying out the proposal whether it be for alteration
of any conditions of service or for punishment or discharge of a
workman by dismissal or otherwise.

Sub-section(2)(a) on the other hand gives power to the employer
to alter any conditions of s~rvice not connected with the dispute and
D this the employer can do without approaching at all the tribunal where
the dispute may be pending. It further permits the employer to discharge
or punish, whether by dismissal or otherwise, any workman where this
may be on account of any matters unconnected with the dispute
pending before the tribunal; but such discharge or dismissal is subject
to the proviso, which imposes certain conditions on it. The intention
E
behind enacting sub-s.(2) obviously was to free the employer from the
fetter which was put on him under s.33 as it was before the amendment
in 1956 with respect to action for matters not connected with a dispute
pending before a tribunal. So far as conditions of service were
concerned, if they were unconnected with matters in dispute the
F employer was given complete freedo~ to change them, but so far as
discharge or dismissal of workmen was concerned, though the employer
was given freedom, it was not complete and he could only exercise
the power of discharge or dismissal subject to the conditions laid
down in the proviso. Even so, these conditions in the proviso cannot
be so interpreted, unless of course the words are absolutely clear, as
G to require that the employer must first obtain approval of the tribunal
where a dispute may be pending before passing the order of discharge
or dismissal of a workman, for on this interpretation there will be no
differem;e betweens. 33(1) (b) and s.33(2)(b) and the purpose of the
amendment of 1956 may be lost".
H (emphasis supplied)
M.D.T.N. STATE 'rRANS. CORP. v. NEETHIVILANGAN [D.P. MOHAPATRA, J.] 505

A Bench of three learned Judges of this Court, in the case of Punjab A
Beverages Pvt. Ltd. Chandigarh v. Suresh Chand andAnr., [1978] 3 SCR 370
->----r held, inter a/ia, that the object of the legislature in enacting section 33 clearly

- appears to be to protect the workman concerned in the dispute which forms
the subject matter of pending conciliation or adjudication proceedings against
victimisation by the employer. But at the same time it recognises that occasions
may arise when the employer may be justified in discharging or punishing by B
dismissal his employee and so it allows the employer to take such action,
subject to the condition that in the one case before doing so, he must obtain
the express permission in writing of the Tribunal before which the proceeding
' ~
is pending and in the other, he must immediately apply to the Tribunal for
_/
approval of the action taken by him. Thereunder this Court further held that c
the only scope of the inquiry before the Tribunal exercising jurisdiction under

.... section 33 is to decide whether the ban imposed on the employer by this
section should be lifted or maintained by granting or refusing the permission
or approval asked for by the employer. If the permission or approval is refused
by the Tribunal, the employer would be precluded from discharging or
punishing the workman by way of dismissal and the action of discharge or D
dismissal already taken would be void.
(emphasis supplied)
~
This Court also observed that section 33 in both its limbs undoubtedly
uses language which is mandatory in terms. In this connection this 'Court
specifically observed : (at p.385)
E

"Where the Tribunal entertains an application for approval under
section 33(2) (b) on merits, it applies its mind and considers whether
the dismissal of the workman amounts to victimisation or unfair labour
~ ......
practice and whether a prima facie case has been made out by the F
employer for the dismissal of the workman. If the Tribunal finds that
either no primafacie case has been made out or there is victimisation
or unfair labour practice, it would refuse to grant approval and reject
/'
the application on merits. Then of course the dismissal of the workman
would be void and inoperative, but that would be because the Tribunal
having held that no prima facie case has been made out by the G
employer or there is victimisation or unfair labour practice, it has
"" refused to lift the ban." (emphasis supplied)

--( In the case of Tata Iron and Steel Co. Ltd. v. S.N. Modak, [1965] 3
SCR 411, a Bench of three learned Judges of this Court, considered the effect
of an order of the Tribunal refusing to accord approval to the order of H
506 SUPREME COURT REPORTS [2001] 3 S.C.R.

A dismissal or discharge of the workman and helci: (at p.418)

"But it cannot be overlooked that for the period between the date on
which the appellant passed its order in question against the
respondent, and the date when the ban was lifted by the final
determination of the main dispute, the order cannot be said to be valid
B unless it receives the approval of the Tribunal. In other words, the
order being incomplete and inchoate until the approval is obtained,
cannot effectively terminate the relationship of the employer and the
;
employee between the appellant and the respondent; and so, even if
the main industrial dispute is finally decided, the question about the
c validity of the order would still have to be tried and if the approval
is not accorded by the Tribunal, the employer would be bound to treat

D
the respondent as its employee and pay him his full wages for the
period even though the appellant may subsequently proceed to
terminate the respondent's service. Therefore, the argument that the
proceedings if continued beyond the date of the final decision of the
main industrial dispute would become futile and meaningless, cannot
-
'"'
.__
'
be accepted."

From the conspectus of the views taken in the decisions referred to
above, the position is manifest that while the employer has the discretion to
E initiate a departmental inquiry and pass an order of dismissal or discharge
against the workman the order remains in an inchoate state till the employer
obtains order of approval from the Tribunal. By passing the order of discharge
or dismissal de facto relationship of employer and employee may be ended
but not the de Jure relationship for that could happen only when the Tribunal
..
accords its approval. The relationship of employer and employee is not legally
F terminated till approval of discharge or dismissal is given by the Tribunal. In
a case where the Tribunal refuses to accord approval to the action taken by
the employer and rejects the petition filed under section 33 (2)(b) of the Act
on merit the employer is bound to treat the employee as continuing in service
and give him all the consequential benefits. If the employer refuses to grant -,
G the benefits to the employer the latter is entitled to have his right enforced
by filing a petition under Article 226 of the Constitution. There is no rational
basis for holding that even after the order of dismissal or discharge has been
rendered invalid on the Tribunal's rejection of the prayer for approval the
workman should suffer the consequences of such invalid order of dismissal
or discharge till the matter is decided by the Tribunal again in an industrial
H dispute. Accepting this contention would render the bar contained in section
I
~-

M.D.T.N. STATE TRANS. CORP. v. NEETHIVILANGAN [D.P. MOHAPATRA, J.] 507

.. 33(1) irrelevant. In the present case as noted earlier th,e Tribunal on consideration A
of the matter held that the employer had failed to establish aprimafacie case
for dismissaVdischarge of the workman, and therefore, dismissed the application
filed by the employer on merit. The inevitable consequence of this would be
that the employer was duty bound to treat the employee as continuing in
service and pay him his wages for the period, even though he may be
subsequently placed under suspension and an enquiry initiated against him. B
In the facts and circumstances of the case it is our view that the High
Comt committed no illegality in issuing a direction to the appellant for
• ·-I-
reinstating the respondent and pay him the back wages.

The appeal, being devoid of merit, is dismissed with costs, which is C
assessed at Rs.10,000.

S.Y.K Appeal dismissed.