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Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
Acts
  • Section 33-A of the Act
  • Section 31 of the Act
  • Section 33(2)(b) of the Act
  • Section 10(1)(d) of the Act
  • Section 33(2)(b) of the Industrial Disputes Act, 1947
  • Section 5, Subsection 2 of the 1983 Income Tax Act
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
Acts
  • Section 33-A of the Act
  • Section 31 of the Act
  • Section 33(2)(b) of the Act
  • Section 10(1)(d) of the Act
  • Section 33(2)(b) of the Industrial Disputes Act, 1947
  • Section 5, Subsection 2 of the 1983 Income Tax Act
Smart Summary

Factual and Procedural Background

The appeals arise out of an order of dismissal passed against an employee in 1974. The principal procedural question concerns the effect of the employer’s failure, or inability, to secure approval of that dismissal under Section 33(2)(b) of the Industrial Disputes Act, 1947. After hearing counsel at length, the court noted that earlier benches of equal strength had reached conflicting conclusions on this very issue. Consequently, the present bench issued an order designed to resolve those conflicts through reference to a larger bench.

Legal Issues Presented

  1. What is the status of the dismissal order, and therefore of the employee, between the date of dismissal and the date on which approval is granted under Section 33(2)(b) of the Industrial Disputes Act, 1947?
  2. Does the employee become entitled to be treated as never having been dismissed if the employer’s application for approval under Section 33(2)(b) is disapproved?
  3. Is the requirement of approval under Section 33(2)(b) a mere technicality, or is it a condition precedent to the validity of the dismissal order?
  4. Does the dismissal order remain inchoate and ineffective until approval under Section 33(2)(b) is obtained?

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Strawboard Manufacturing Co. v. Gobind
1962 Supp (3) SCR 618; AIR 1962 SC 1500; (1962) 1 LLJ 420
Non-approval of dismissal under Section 33(2)(b) renders the order ineffective from the outset; employee is entitled to wages for the intervening period. Cited as one of two three-judge decisions adopting the “dismissal ineffective” view.
Tata Iron & Steel Co. Ltd. v. S. N. Modak
(1965) 3 SCR 411; AIR 1966 SC 380; (1965) 2 LLJ 128
Same principle as Strawboard Manufacturing: dismissal remains inchoate without approval. Cited alongside Strawboard Manufacturing as supporting the “inchoate” position.
Punjab Beverages (P) Ltd., Chandigarh v. Suresh Chand
(1978) 2 SCC 144; (1978) 3 SCR 370
Failure to obtain approval does not invalidate dismissal; employer incurs penal liability, and employee’s remedy lies under Section 33-A or reference under Section 10(1)(d). Identified as a conflicting three-judge decision that was not considered in later cases adopting the opposite view.
S. Ganapathy v. Air India
(1993) 3 SCC 429; JT (1993) 4 SC 10
Re-affirmed Strawboard and Tata Iron & Steel, holding that dismissal without approval remains inchoate. Noted as a two-judge decision that followed the “inchoate” view without noticing Punjab Beverages.

Court's Reasoning and Analysis

The court began by identifying four specific questions revolving around the legal effect of Section 33(2)(b) approval. It then surveyed prior Supreme Court jurisprudence and found two distinct and irreconcilable lines of authority:

  • Two three-judge benches (Strawboard Manufacturing and Tata Iron & Steel) held that lack of approval makes a dismissal ineffective from its inception.
  • Another three-judge bench (Punjab Beverages) held that non-approval does not disturb the dismissal; instead, the employer faces statutory penalties, and the employee’s remedy lies elsewhere.

The court observed that a more recent two-judge decision in S. Ganapathy had followed the first line of authority without noticing the contrary view expressed in Punjab Beverages. Given that benches of equal and even lesser strength had produced conflicting pronouncements, the court concluded that the legal position remained unsettled and was generating uncertainty in subsequent litigation.

To resolve the conflict definitively, the court determined that the matter should be considered by a larger bench of five judges, as mandated when conflicting three-judge bench decisions exist.

Holding and Implications

ORDER: The Registry is directed to place the matter before the Hon’ble Chief Justice of India for constitution of a five-judge bench to settle the conflicting views on Section 33(2)(b) of the Industrial Disputes Act, 1947.

Implications: No final adjudication on the merits of the employee’s dismissal has been made. The law on the status of a dismissal lacking Section 33(2)(b) approval remains unsettled until a five-judge bench renders an authoritative ruling. In the interim, lower courts and litigants continue to face uncertainty.

    Jaipur Zila Sahakari Bhoomi Vikas Bank Ltd. v. Ram Gopal Sharma And Another

    Order

    1. The questions which fall for consideration in the present appeals are as follows:

    (1) What is the status of the order of dismissal and therefore of the dismissed employee between the date of the order of dismissal and the approval of dismissal under Section 33(2)(b) of the Industrial Disputes Act, 1947?

    (2) Does the employee become entitled to being treated as never to have been dismissed from service if the application filed by the employer under Section 33(2)(b) is not approved?

    (3) Is the requirement of the approval under Section 33(2)(b) a mere technicality the non-compliance of which does not vitiate the order or is it a condition precedent to the order being rendered valid?

    (4) Does the order of dismissal remain inchoate and is not effective till it is approved under Section 33(2)(b)?

    2. We have heard learned counsel on both sides at considerable length. Various decisions were cited before us and we find that two Benches consisting of three learned Judges have taken the view that if the approval is not granted under Section 33(2)(b), the order of dismissal becomes ineffective from the date it was passed and, therefore, the employee becomes entitled to wages from the date of dismissal to the date of disapproval of the application. The decisions in which this view has been taken are Strawboard Manufacturing Co. v. Gobind 1962 Supp (3) SCR 618, AIR 1962 SC 1500, (1962) 1 LLJ 420 and Tata Iron & Steel Co. Ltd. v. S.N Modak (1965) 3 SCR 411, AIR 1966 SC 380, (1965) 2 LLJ 128.

    3. As against this, another Bench of three learned Judges in Punjab Beverages (P) Ltd., Chandigarh v. Suresh Chand (1978) 2 SCC 144, (1978) 3 SCR 370 has taken the view that the non-approval of the order of dismissal or failure to make application under Section 33(2)(b) would not render the order of dismissal inoperative. The failure to apply for approval under Section 33(2)(b) would only render the employer liable to punishment under Section 31 of the Act and the remedy of the employee is either by way of a complaint under Section 33-A or by way of a reference under Section 10(1)(d) of the Act. There is no reference in this decision to the earlier two decisions of the Court cited above.

    4. Recently, a Bench of two Judges, in a decision in S. Ganapathy v. Air India (1993) 3 SCC 429, JT (1993) 4 SC 10 has followed the view taken by this Court in Strawboard Manufacturing Co. case 1962 Supp (3) SCR 618, AIR 1962 SC 1500, (1962) 1 LLJ 420 and Tata Iron & Steel Co. Ltd. case (1965) 3 SCR 411, AIR 1966 SC 380, (1965) 2 LLJ 128 and has held that the order of dismissal passed without the approval under Section 33(2)(b) remains in inchoate condition. This decision has in true not noticed the decision in Punjab Beverages (P) Ltd. case (1978) 2 SCC 144, (1978) 3 SCR 370. The point arises in a number of cases and in view of the conflicting decisions, presents difficulty to all the courts. It is therefore, necessary that the law on the subject is settled for future. We are, therefore, constrained to direct the Registry to place this matter before Hon'ble the Chief Justice for referring the same to a Bench of five Judges since the decisions in which the conflict arises, are all pronounced by a Bench of three learned Judges. The order of the dismissal in the present case is of 1974. At the request of the parties, we give liberty to them to approach Hon'ble the Chief Justice to constitute the Bench at his early convenience.

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    Jaipur Zila Sahakari Bhoomi Vikas Bank Ltd. v. Ram Gopal Sharma And Another
    (Aug 18, 1993)