Management of Delhi Transport Undertaking vs Industrial Tribunal, Delhi and Another

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 790 of 1963

Decision Date: 30 October 1964

Coram: M. Hidayatullah, P.B. Gajendragadkar, K.N. Wanchoo

In this matter, the appellant was the Management of Delhi Transport Undertaking and the respondents were the Industrial Tribunal, Delhi and another party. The judgment was delivered on 30 October 1964 by a bench of the Supreme Court of India comprising Justice M Hidayatullah, Justice P B Gajendragadkar and Justice K N Wanchoo. The case is reported in 1965 AIR 1503 and 1965 SCR (1) 998. The dispute concerned the application of section 33 (2) (b) of the Industrial Disputes Act, 1947 (14 of 1947) and involved the question of whether actual payment of wages was necessary, whether a tender of wages was sufficient, whether an executive instruction formed part of the standing orders, and whether a charge that failed to specify the standing orders was defective. The factual background was that a conductor employed by the transport undertaking was discovered in possession of used tickets, conduct that was prohibited by Instruction No 12 issued under Standing Order 2. After an inquiry into his conduct the charge against him was held proved, and on the recommendation of the enquiry officer the Traffic Manager proposed to dismiss him. Because this proposal was made while an industrial dispute was pending, the undertaking applied to the Industrial Tribunal for approval of the dismissal order under the proviso to section 33 (2) (b). The Tribunal, after hearing both sides, refused to grant its approval. It held that Instruction 12 was not incorporated into the standing orders and therefore no action could be taken on its basis, and it also found that there was no satisfactory proof that one month’s wages had actually been paid or could be considered tendered before the dismissal took effect on 31 October 1961, as required by the proviso.

The Supreme Court held that the Tribunal had adopted an unduly narrow interpretation of the standing orders. It observed that, by virtue of Standing Order 2, executive instructions were issued as a code of principles and practices that every conductor was required to follow, and that the standing orders contained a warning that any breach of an instruction would expose the conductor to disciplinary action as provided in paragraph 15 (2) of the Regulations. The Court further noted that clause (m) of Standing Order 19 was sufficiently broad to encompass a breach of instructions issued under Standing Order 2. Consequently, the charge for breaching Instruction 12 could be read in conjunction with Standing Order 19 (m), Standing Order 2 and paragraph 15 (2) of the Regulations. Regarding the charge sheet, the Court found that the particulars set out were adequate to inform the conductor of the allegations against him. The omission of a specific reference to the relevant standing order, regulation or provision of the Act did not render the charge defective. Accordingly, the Court concluded that the Tribunal was in error in both its view of the standing orders and its finding that the charge was defective.

The Court observed that the authorities cited in the earlier cases‑ Devi Sugar Mills v. Nand Kishore, [1956] S.C.R. 916 and Lord Krishna Sugar Mills Ltd. v. Union of India, [1961] 1 S.C.R. 39‑ were not applicable to the present dispute. The Court further held that the Tribunal erred in concluding that there was no tender of wages. The proviso to the statutory provision does not require that the wages for the month be actually paid before the dismissal becomes effective; rather, it is sufficient that the employer tender the amount before the dismissal, even though the employee may not actually receive the payment prior to the dismissal taking effect. In the facts before the Court, the tender of one month’s wages had been made within the prescribed time, and therefore there was no breach of section 33(2)(b) of the Industrial Disputes Act, 1947, in this respect. The judgment that follows is a civil appellate jurisdiction matter, designated as Civil Appeal No. 790 of 1963, arising by special leave from the award dated 20 April 1962 of the Industrial Tribunal, Delhi, in O.P. No. 97 of 1961 and Complaint I.D. No. 305 of 1961, which had been published in the Delhi Gazette on 31 May 1962. Counsel for the appellant was T. R. Bhasin and counsel for respondent No. 2 was Gopal Singh. The judgment was delivered by Justice Hidayatullah. The appeal concerned a dispute between the Delhi Transport Undertaking and its employee, Shri Hari Chand, who had formerly been a conductor on an omnibus and was at the time of the appeal serving as Assistant Traffic Inspector. The Undertaking sought to set aside the award of the Industrial Tribunal dated 20 April 1962. The factual background disclosed that on 28 March 1960 Hari Chand was serving as conductor on omnibus No. 484, route 21, when his vehicle was inspected at Kashmiri Gate and five used tickets of five nP. and six used tickets of ten nP. were found in his possession. Clause 12 of the Executive Instructions governing conductors prohibited such possession and prescribed dismissal as the penalty for a guilty conductor. After an inquiry the charge was proved, and on the recommendation of the enquiry officer the Traffic Manager proposed to dismiss Hari Chand effective 31 October 1961. Because this dismissal was sought during the pendency of an industrial dispute, the Undertaking filed an application on 28 October 1961 seeking the Tribunal’s approval for the dismissal under section 33(2)(b) of the Industrial Disputes Act, 1947. A memorandum dated 30 October 1961 was issued to Hari Chand informing him of the dismissal order, directing him to report to the Accounts Officer at the Head Office to receive one month’s wages as required by the same statutory provision, and instructing him to surrender his uniform, badge and identity card. It was later contested whether Hari Chand actually received the payment; the Court noted a dispute as to whether he appeared to collect the amount or, if he did appear, whether the amount was paid. Subsequently, on 3 November 1961, Hari Chand lodged a complaint under section 33(A) of the Act, alleging that his one‑month wages had not been paid.

In this case the employee Hari Chand filed a complaint under section 33(A) of the Industrial Disputes Act, alleging, among other things, that the one month’s wages due to him had not been paid. On the same day that the complaint was lodged, the Undertaking sent the amount of one month’s wages to Hari Chand by money order. The Tribunal identified as L2Sup./65‑2 dismissed the complaint and, because no appeal was filed against that order, the Court did not need to consider it further. After hearing both parties, the Tribunal also refused to grant its approval of the Undertaking’s application for dismissal and consequently dismissed the application. The Tribunal reasoned that the action sought against Hari Chand could not be based on Executive Instruction No 12 because that instruction had never been incorporated into the Standing Orders. Moreover, the Tribunal observed that the Standing Orders governing the conduct of employees of the Undertaking contained no provision that the possession of used tickets would constitute misconduct or an offence on the part of a conductor. In addition, the Tribunal held that there was no satisfactory evidence that the one month’s wages had actually been paid to Hari Chand, nor could the payment be treated as having been tendered before the dismissal order took effect on 31 October 1961, as required by section 33(2)(b) of the Act.

The Delhi Transport Undertaking challenged both conclusions of the Tribunal, and the appeal was limited to those two points. To determine the correct legal position, the Court examined the statutory framework that created and governs the Authority now known as the Delhi Transport Undertaking. The Delhi Road Transport Authority Act, 1950 became operative on 27 March 1950, establishing a statutory corporation called the Delhi Road Transport Authority. Section 39 of that Act empowers the Central Government, after consulting the Authority, to issue general instructions, including directions concerning conditions of service, employee training, wages, and the reserves that the Authority must maintain. Section 53 confers on the Authority the power to make regulations for the administration of its affairs and the performance of its functions under the Act, particularly for prescribing the conditions of appointment and service of its servants, except for certain specially named officers. Exercising that power, the Authority framed the Delhi Road Transport Authority (Conditions of Appointment and Service) Regulations, 1952. Part III of those Regulations provides that every employee shall perform such duties, functions, and exercise such powers as may be assigned by the Authority, the General Manager, or an authorized officer, subject to the provisions of the Factories Act, the Motor Vehicles Act, or any other applicable law. Paragraph 15 of the Regulations states that the Authority may from time to time issue standing orders governing employee conduct, and that any breach of those orders will amount to misconduct, thereby establishing the basis for disciplinary action.

The Court explained that an employee of the Delhi Road Transport Authority could be subjected to various penalties for misconduct or for any other sufficient reason, and that among those penalties dismissal from the service of the Authority was expressly listed. It further noted that, pursuant to the authority granted by paragraph fifteen, standing orders had been framed. In particular, Standing Order two set out the duties of every employee, stating that each employee was required to perform such duties and execute such functions as might be entrusted to him by the Authority, the General Manager, or any other officer authorized by the Authority. By virtue of this power the Authority issued a series of Executive Instructions, which were compiled in a small booklet titled “Duties of a Conductor.” Instruction number four provided that each conductor should receive ten rupees in small change as bag money each day, that the conductor was prohibited from carrying any private cash while on duty, and that any cash that had to be carried for a particular reason must be recorded on the conductor’s way bill and countersigned by an authorized official. The instruction further declared that any cash found on the conductor’s person during duty that was not declared on the way bill would be deemed to belong to the Authority, a measure intended to prevent dishonest ticket issuance. Instruction number twelve, the provision under which Hari Chand was charged, stipulated that once a ticket had been issued it could never be used again, that no conductor should pick up or retain any used ticket, and that any conductor found possessing or issuing a used ticket would be liable to dismissal and could also face criminal proceedings.

Hari Chand faced three separate counts in the charge framed against him. The first count alleged that he had incorrectly punched a ticket that had been given to a passenger. The second count alleged that he possessed a sum of fifteen rupees that he had not declared and that he had obtained dishonestly. The third count alleged that he was in possession of used tickets, contrary to the provisions of Executive Instruction number twelve. Hari Chand admitted the first count but denied the second and third counts, specifically denying that he possessed any used tickets. While the second and third charges were ultimately dropped, the finding of fact was that he was guilty of contravening Instruction twelve. The Court observed that it was unnecessary to recount the evidence that established this particular charge, because the issue before the Court was whether the order refusing approval of his dismissal was legal and proper. Assuming, for the purpose of that inquiry, that the fact of possession of used tickets had indeed been proved, the Court turned to the first question: whether the application for approval of dismissal should have been rejected on the ground that wages for one month had not actually been paid before the dismissal order, as required by the proviso to section thirty‑three, subsection two, sub‑paragraph (b) of the Industrial Disputes Act. The Court indicated that, in its view,

In this case the Court observed that Hari Chand did not deliberately refuse to take the wages that were offered to him through the memorandum which announced his dismissal, because he was intending to lodge a grievance against the Undertaking. He did indeed lodge such a complaint, and that complaint was subsequently dismissed by the authorities. The monetary amount in question was made available to him on 30 October 1961. The Tribunal, however, noted certain irregularities in the register entries and therefore expressed doubt as to whether the memorandum had actually been issued on the 30th of the month. Although the register was doubtful, the Tribunal found no basis for concluding that the memorandum could have been issued on the following day, the 31st. Hari Chand himself acknowledged that he was present in the office on 30 October with the expectation of receiving the payment, but he asserted that no one gave him any attention at that time. He further contended that he received the dismissal order on that same day at five o’clock in the evening, after ordinary office hours had ended. His signature, dated on the duplicate copy of the memorandum, was retained in the office as a receipt of the notice. On the basis of this receipt, the Court held that the Tribunal was wrong in concluding that there was no tender of wages as required by section 33 of the Industrial Disputes Act. The receipt clearly demonstrates that a tender had been made on the 30th, prior to the dismissal order becoming operative, and that the wages would have been paid either on the 30th or on the 31st had Hari Chand chosen to accept them. Moreover, the amount was forwarded to him by money order immediately thereafter, and the application for approval of the dismissal, which was filed three days before the effective date of dismissal, expressly mentioned that the wages were being paid to him. The proviso to section 33(2)(b), which the Tribunal relied upon, reads: “Provided that no such workman shall be discharged or dismissed, unless he has been paid wages for one month and an application has been made by the employer to the authority before which the proceeding is pending for approval of the action taken by the employer.” The Court explained that this proviso does not require that the wages for a full month actually be disbursed before dismissal; it merely requires that the employer tender the wages before the dismissal takes effect, recognising that an employer cannot compel an employee to receive the payment prior to the dismissal becoming effective. In the present circumstances the tender was unmistakably made before the dismissal order took effect, and the wages would certainly have been transferred to Hari Chand had he asked for them. Consequently, there was no breach of the statutory requirement. The Tribunal also held that the charge against Hari Chand was defective for several reasons. It observed that he had not been prosecuted for any act of dishonesty or fraud because he had not issued any used tickets to passengers; the allegation concerned only his possession of used tickets, and such possession alone did not constitute misconduct sufficient to justify dismissal as a penalty. The Tribunal appeared to be influenced by a central fact, namely, that Executive Instruction No. 12 had not been incorporated into the

In this case the Court observed that, according to paragraph 15 of the Regulations, the Standing Orders governing employee conduct had to be issued before any breach of an instruction could be regarded as misconduct. The Standing Orders were indeed issued in accordance with paragraph 15(1) and they provided that a breach would constitute misconduct and would expose an employee to disciplinary action as set out in paragraph 15(2). However, those Orders did not enumerate the specific duties of a conductor nor did they expressly forbid the possession of used tickets. Consequently, the Tribunal concluded that the allegation of possessing used tickets could not be punished under the Standing Orders and therefore could not support a dismissal. The Court considered that view to be overly restrictive. It noted that Standing Order 19 contains a general clause stating: “Without prejudice to the provisions of the foregoing Standing Orders, the following acts of commission and omission shall be treated as misconduct (m) any other activity not specifically covered above, but which is prima facie detrimental to the interests of the Organisation.” In addition, Standing Order 2, which had been cited earlier, obliges all employees of the Authority to perform such duties and to carry out functions that may be entrusted to them by the Authority, the General Manager, or any other authorised officer. By virtue of Standing Order 2, the Executive Instructions were issued as a code of principles and practices that every conductor must follow strictly, and a breach of any instruction was warned to invite disciplinary action under paragraph 15(2). The Court held that clause (m) of Standing Order 19 is sufficiently wide to encompass a breach of instructions issued under Standing Order 2. Hari Chand had been charged with violating Executive Instruction No. 12; therefore the charge brought within the ambit of Standing Order 19(m) read with Standing Order 2 and paragraph 15(2) of the Regulations. The counsel for the respondent relied on the authorities in Laxmi Devi Sugar Mills v. Nand Kishore Singh (1956) S.C.R. 916 and Lord Krishna Sugar Mills Ltd. & Anr. v. The Union of India and Another (1961) S.C.R. 39 to argue that the charge could not be amplified by referencing Standing Orders 2 and 19 and Regulation 15. The Court rejected that argument, stating that those precedents were not applicable because the facts in the present case were adequate to place Hari Chand on notice of the charge, and the failure to mention the specific Standing Order, Regulation or statutory provision did not constitute a defect that would invalidate the charge. No additional factual detail was required to be stated, and the particulars supplied were sufficient for Hari Chand to comprehend the nature of the accusation. Accordingly, the Court found that the Tribunal was mistaken in holding that the charge was defective, and this error led to the further conclusions articulated in the subsequent portion of the judgment.

In this matter, the Court held that the Tribunal had erred also by refusing to give approval to the dismissal prescribed under section 33(2)(b). Counsel for the petitioner argued that the employee, Hari Chand, had subsequently been promoted and was now serving as an Assistant Traffic Inspector, and that such promotion indicated that the Delhi Transport Undertaking retained confidence in his performance and that he had reformed his conduct. Counsel for the respondent, however, submitted that because the Tribunal’s order had not been implemented, the dismissal had never taken effect, and consequently the promotions that Hari Chand later received were merely successive advancements that occurred in the normal course of service. The Court stated that it would not adjudicate this ancillary dispute. It further observed that this issue could not be taken into consideration when determining whether the request for approval, originally made on 28 October 1961, had been properly refused. Accordingly, the Court allowed the appeal, set aside the Tribunal’s order, and granted the sought approval to the dismissal order, which was to be deemed effective from 31 October 1961. The Court declined to make any order as to costs. No further directions were issued regarding the conduct of the parties. The appeal was thus allowed. L2 Sup./65-2,500-18-11-65-GIPF.