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Management Of Pandian Roadways Corporation, Ltd. v. Deputy Commissioner Of Labour
Factual and Procedural Background
The second respondent was an employee of the appellant Pandiyan Roadways Corporation who was absent from duty on multiple occasions in 1985: from 7 February to 16 February (nine days), on 12 April (failed to report at 12:45 P.M. but sent a telegram received at 2:10 P.M.), and from 4 June 1985 onward without any written leave letter. The Corporation deducted salary for the days of absence.
The Deputy Commissioner of Labour, Madurai, accepted the Corporation's claim for deduction of wages for the period 4 June 1985 to 7 June 1985 but did not uphold other deductions on the ground that no notice was given prior to those deductions. The appellant-Corporation filed a writ petition against the Deputy Commissioner's order (W.P. No. 3260 of 1987). The learned Single Judge dismissed that writ petition by order dated 21 August 1996. The Corporation preferred the present writ appeal against the Single Judge's order.
The second respondent filed vakalatnama but did not appear at hearing; the Court appointed Sri V. Anantharaju as amicus curiae, who presented the second respondent's side before the Court.
Legal Issues Presented
- Whether notice is necessary before deductions are made from the salary of an employee for the period of his absence from duty.
Arguments of the Parties
Appellant's Arguments
- Under the Standing Orders only acts of indiscipline require an enquiry; absence from duty is not enumerated as misconduct under Clause 16, and therefore absence is not treated as misconduct under the Standing Orders.
- Proviso to Clause 7 of the Standing Orders requires written information of absence; a mere telegram does not satisfy Clause 7 and must be followed by a written leave application.
- Relying on S. 7(2)(b) of the Payment of Wages Act, 1936, deductions from wages (including for absence from duty) can be made in accordance with the Act; accordingly, there is no necessity to issue prior notice before deducting salary for absence from duty.
Amicus Curiae / Second Respondent's Position (as presented by amicus)
- The amicus relied on several decisions of the Supreme Court and this Court to argue the relevance of procedural protections and that technicalities should not be allowed to defeat substantive rights where the employee knew the charges.
- The amicus took the Court through provisions of the Payment of Wages Act: S. 7(2) (deduction of wages), S. 8 (imposition of fine), and S. 10 (deduction for damage or loss), and contended that prior notice is necessary in case of deduction of wages for absence from duty, although proviso to S. 7(2) does not provide for issuance of such notice.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Controller of Examinations v. G.S Sunder [1993 Supp (3) SCC 82] | When the employee knew the charges fully, technicalities of law should not be imported to further the case of such employees. | The decision was placed before the Court by the amicus to support the proposition that procedural technicalities should not defeat the substantive outcome where the employee was aware of the consequences. |
| Mohd. Bux v. District Judge, Jhansi [1997-II L.L.J 372] | Withholding of payment of wages is a deduction; such amount has to be refunded and compensation may be awarded; employer's conduct is relevant in determining compensation. | The amicus relied on this authority to show that deductions amount to denial of entitlement and that refund and compensation may be appropriate. |
| Pandian Roadways Corporation, Ltd. v. Principal District Judge, Madurai [(1996) 3 I.L.R 1200] | When a petitioner is aware of the consequences of his action or expected to know them, it cannot be said that a decision was taken affecting his rights to his surprise. | The Court cited this view to support the proposition that notice may not be necessary where the affected person was or should have been aware of consequences. |
| Pandian Roadways Corporation, Ltd. v. Deputy Commissioner of Labour [1997 (3) L.L.N 386] | Purpose of notice of enquiry is to give opportunity to defend; if petitioner is aware of consequences, his rights are not affected to his surprise. | The Court referred to this reasoning to explain when notice is required and when an affected person cannot claim surprise. |
| Aligarh Muslim University v. Mansoor Ali Khan [(2000) 7 SCC 529 : A.I.R 2000 S.C 2783] | If upon admitted or indisputable facts only one conclusion is possible, breach of natural justice is not necessarily prejudicial and need not lead to quashing of the order. | The Court invoked this principle (and approved S.L. Kapoor v. Jagmohan) to hold that where only one conclusion is possible on undisputed facts, a procedural defect (breach of natural justice) may not invalidate the outcome. |
| S.L Kapoor v. Jagmohan [(1980) 4 SCC 379 : A.I.R 1981 S.C 136] | Principles concerning breach of natural justice and the circumstances in which such a breach may not be prejudicial. | Referenced (through Aligarh Muslim University) to support the proposition that statutory omission of prior notice does not automatically amount to a prejudicial breach of natural justice when facts admit only one conclusion. |
Court's Reasoning and Analysis
The Court identified the single issue as whether prior notice is necessary before deducting salary for absence from duty. It examined the relevant Standing Orders and statutory provisions and proceeded with the following analysis:
- Clause 7 (proviso) of the Standing Orders requires that, ordinarily, prior permission be obtained for leave, and where that is not possible the head of department shall be informed in writing of the absence and its probable duration as soon as practicable. In the present case the second respondent did not provide any written leave letter; a telegram sent on one occasion was received but the Court found that a mere telegram is not sufficient compliance with Clause 7 and must be followed by a written leave application.
- Under S. 7(2)(b) of the Payment of Wages Act, 1936, deductions from wages shall be made only in accordance with the provisions of the Act; deductions for absence from duty are one of the provisions by which wages can be deducted. The appellant relied on this provision to contend that no prior notice is necessary for such deductions.
- The amicus relied on case law and argued for the necessity of prior notice; he also pointed out that the Act contains specific statutory provisions for prior notice in relation to fines and deductions for damage or loss (S. 8 and S. 10), but that proviso to S. 7(2) does not provide for prior notice for deductions for absence.
- The Court applied the principle that the requirements of natural justice can be dispensed with by statute. Observing that the Legislature expressly provided for prior notice in some contexts (e.g., imposition of fines under S. 8 and deductions for damage under S. 10) but omitted such a provision for deductions under S. 7(2), the Court inferred that the Legislature did not intend to require prior notice for deductions for absence from duty.
- Relying on cited authorities concerning when procedural defects are not prejudicial (e.g., when facts admit of only one conclusion or where the affected person was aware of consequences), the Court concluded that lack of prior notice did not amount to violation of natural justice in the circumstances of deduction for absence under S. 7(2).
Holding and Implications
Holding: The Court set aside the order of the learned Single Judge and allowed the writ appeal. The Court held that prior notice was not necessary before deduction of wages for the days of absence from duty under the Payment of Wages Act, 1936 (S. 7(2)). The Court ordered that the writ appeal is allowed and directed that there be no costs.
Implications: The direct effect is that the Corporation's appeal succeeded and the Single Judge's order was set aside. The Court's reasoning rests on statutory interpretation (the Legislature's omission of a requirement of prior notice in S. 7(2)) and principles regarding when a breach of natural justice will not be treated as prejudicial. The opinion does not expressly purport to lay down any novel binding precedent beyond the application of those principles to the facts of this case.
We record appreciation for the assistance rendered by Sri V. Anantharaju, amicus curiae, as noted by the Court.
Rajan, J.:— This writ appeal is preferred against the order passed by the learned Single Judge in W.P No. 3260 of 1987, dated 21 August, 1996.
2. The second respondent is an employee in the appellant-Pandiyan Roadways Corporation. He absented himself from duty from 7 February, 1985 to 16 February, 1985, for a period of nine days and again on 12 April, 1985, he did not report for duty at 12.45 P.M instead sent a telegram, which was received in the office at 2.10 P.M Subsequently, the second respondent did not send any leave letter in writing. Again from 4 June, 1985 he was absent from duty without any leave letter. The management deducted the salary for the days of his absence without leave.
3. The Deputy Commissioner of Labour, Madurai, accepted the claim of the petitioner-Corporation for deduction wages for the period from 4 June, 1985 to 7 June, 1985 and did not agree with the order passed by the appellant-Corporation in respect of other deductions on the ground that no notice was given before deductions were made. The appellant-Corporation has filed the writ petition against the order of the first respondent-Deputy Commissioner. Learned Single Judge of this Court by order, dated 21 August, 1996, dismissed the writ petition. It is against the order of the learned Single Judge, the present writ appeal has been preferred.
4. The second respondent though filed vakalath, did not appear when the case was taken up for hearing. Therefore, this Court appointed Sri V. Anantharaju, as amicus curiae, and he has also putforth the case effectively on the side of the second respondent.
5. The only point that arise for consideration in this appeal is, whether notice is necessary before deductions are made from the salary of an employee for the period of his absence from duty.
6. Learned counsel for the appellant argued that as per the Standing Orders, only in case of acts of indiscipline, enquiry has to be conducted. The enumerated acts of misconduct as per Cl. 16 of the Standing Orders, abence from duty does not find a place. Therefore, according to the Standing Orders, the absence from duty of an employee of the appellant-Corporation does from part of misconduct.
7. Proviso to Cl. 7 of the Standing Order reads as follows:
“Ordinarily the previous permission of the head of the department in the establishment shall be obtained before such leave is taken, but, when this is not possible, the head of the department shall as soon as may be practicable be informed in writing of the absence from and of the probable duration of such absence.”
In this case, admittedly, the second respondent had not informed in writing, even on any subsequent date, for the period of his absence from duty. Mere telegram is not sufficient compliance with Cl. 7 of the Standing Orders. The counsel also submitted that when telegram if issued, it is only a prior intimation, which is necessarily to be followed by subsequent leave letter in writing. If such leave letters in writing are not forwarded, the telegram issued even though by the same employee, will not have the effect of compliance with Cl. 7 of the Standing Orders. This argument of the learned counsel is acceptable. The mere issuance of telegram does not amount to compliance with sending a leave letter in writing. Therefore, when such telegrams are issued, it should be followed by a leave letter in writing to the satisfaction of the authorities concerned.
8. Learned counsel for the appellant submitted that under S. 7(2)(b) of the Payment of Wages Act, 1936, hereinafter referred to as the Act, deductions from the wages of an employed person shall be made only in accordance with the provisions of this Act. Deductions for absence from duty is one of the provisions of the Act and by which wages can be deducted. Therefore, the authorities are well within their powers when they deducted the salary for the days the employee was absent from duty. There is no necessity to issue prior notice in case of deduction of salary for the days of absence from duty.
9. The amicus curiae, who appeared on behalf of the second respondent has placed before this Court some of the decisions of the Supreme Court as well as this Court, in Controller of Examinations v. G.S Sunder [1993 Supp (3) SCC 82], the Supreme Court has held that when the employee knew the charges fully, the technicalities of law should not be imported to further the case of such employees. Following this decision of the Supreme Court, the Allahabad High Court in Mohd. Bux v. District Judge, Jhansi, [1997-II L.L.J 372], has held as follows:
“It is now established that withholding of payment of wages for whatsoever reason, when entitlement of the workmen is denied, is a deduction unless liability to pay is admitted. In the facts of this case there cannot be second opinion that the amount represents deduction and such amount has to be refunded, together with the compensation as the authority may deem fit to decide. While the interest of the workman has to be looked into at the same time, the conduct of the employer is also a relevant factor for determining the amount of compensation.”
10. In Pandian Roadways Corporation, Ltd. v. Principal District Judge, Madurai, [(1996) 3 I.L.R 1200], a learned Single Judge of this Court has held as follows:
“But when the petitioner is aware of the consequence of his own action or he is expected to know about such consequences when he does not act, it cannot be said that even in such circumstances, a decision has been taken or order has been passed affecting his rights to the surprise of the person affected.”
11. Similar view was taken by one of us in the decision reported in Pandian Roadways Corporation, Ltd. v. Deputy Commissioner of Labour [1997 (3) L.L.N 386] which reads as follows, in Para. 5, at page 388:
“… the purpose of notice of enquiry before an order is passed or decision is taken affecting any civil right of the citizen is to give him an opportunity to defend, if there is a possibility to defend. The principle behind the granting of an opportunity is that the affected person should not be taken by surprise, i.e, his right should not be affected in a surprising or unexpected manner, but when the petitioner is aware of the consequences of his own action or he is expected to know about such consequences when he does not act, it cannot be said that even in such circumstances, a decision has been taken or order has been passed affecting his rights to the surprise of the persons affected …”
12. In the recent case reported in Aligarh Muslim University v. Mansoor Ali Khan [(2000) 7 SCC 529 : A.I.R 2000 S.C 2783], the Supreme Court has approved its earlier decision in S.L Kapoor v. Jagmohan [(1980) 4 SCC 379 : A.I.R 1981 S.C 136], and held as follows:
“if upon admitted or indisputable facts only one conclusion was possible, then in such a case, the principle that breach of natural justice was in itself prejudice, would not apply. In other words if no other conclusion was possible on admitted or indisputable facts, it is not necessary to quash the order which was passed in violation of natural justice.”
13. Further, the amicus curiae appearing for the second respondent took us through various provisions of the Act. Section 7(2) deals with deduction of wages and S. 8 deals with imposition of fine and S. 10 of the Act deals with deduction for damage or loss. Further, the case of the amicus curiae is that prior notice is necessary in case of deduction of wages for the period of absence from duty. However, as per proviso to S. 7(2) of the Act, issuance of such notice is not provided for.
14. It is axiomatic principle that the principles of natural justice can be dispensed with by a statute. Where the Legislature thought fit to provide for prior notice before imposition of fine under S. 8 of the Act and before deductions for damage or loss sustained and for various other acts of commission by the employees, it has not thought it fit to provide for issue of prior notice for deduction of wages for absence from duty. Hence, though notice was not necessary before deduction of wages for the days or absence from duty, there is no violation of the principles of natural justice. Therefore, the order of the learned Single Judge is not acceptable and hence it is set aside. Accordingly, the writ appeal is allowed. No costs.
15. We record our appreciation for the assistance rendered by Sri V. Anantharaju, amicus curiae, in this matter.
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