S. GANAPATHY AND ORS. versus AIR INDIA AND ANR.

Citation: [1993] 3 S.C.R. 1006 · Decided: 16-06-1993 · Supreme Court of India · Bench: M.M. PUNCHHI · Disposal: Dismissed

Judgment (excerpt)

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S. GANAPATHY AND ORS. 
AIR INDIA AND ANR. 
JU.NE 16, 1993 
[MADAN MOHAN PUNCHHI ANDS.C. AGRAWAL,J.J.) 
Industrial Dispwes Act, 1947 : 
Section 33(2) (b) read with Section 2( rr}-Statutory wage-Computation of 
amount of one month's wages ro .be ."paid to discharged/dismissed 
c workinen-Whether employer jusiijied·in reducing the amount by statutory tax. 
deductions-Whether approval applications liable to be rejected on g~ound thai 
deduction of tax resulted in payment of less thanone month's wages-Order of 
discharge/termination requiring .approval of competent authority-Na111re and 
effect of order till approval. 
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The appellants, e~ployees of the respo~dent ·- .Air India, who were 
awarded penalties of removal or dismissal by the respondent, as a result of the 
disciplinaQ· proceedings, were paid oite month's s"alary or.wages, reducing it 
by a sum of Rs. 10 or 15, as deductible. on acco.unt of m~nthly paymel)t of tax 
on employment, imposed on salary and wage earners, under the provisions of 
the West Bengal State Tax on Professions,.Trades, Callings and Employ-
ments Act, 1979. The respond.ent ~Air Iridia sought approval ofits action from 
the National Industrial Tribunal, under Section 33(2) (b) of the lndustria'I 
. Disputes Act, which was opposed by the appellants on the ground that there· 
was short payment and accordingly it was 11f!t in terins of the mandatory 
provisions of Section 33(2) (b).ofthe Act. The Tribunal upheld the objection 
F . and rejected the approval applications. · 
In writ petitions preferred by the respondents; a Single .Judge of the 
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High Court held that the Tribunal was in error in refusing approval on the 
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ground of short payment and remanded. the matter to the Tribunal for 
<lecision on merits~ Letters Patent Appeals preferred by the appellants were 
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dismissed by a Division Bench of the High Court ~ffirming the view Jr the 
Single Judge. 
In the appeals preferr~d by the employees, on behalf of the appellants it 
H . was contended that one month's wagesta~torily required to be paid in terms 
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S. GANAPA THY v. AIR INDIA 
l007 
of Section 33(2) (b) was a payment which did not P'Jl't~1l..e the charader 111 
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salary or wage. as the appellant'> were n(}tsalary or wage earners wl~ile getting 
that one month's wage, and therefore, not being salary or wage earners in that 
month, order of dismissal or termination of service having bt;en passed 
against them, they were not in employment and hence not liable to pa)· tax, 
that the very basis of tax stood displaced and hence the deduction of tax at the 
snapped source rendered the paj•ment. or deposit of one month's wage 
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deficient, contravening the mandatory provisions of Section 33(2) (b) of the 
Act. 
It was contended on· behalf' of the respondent - Air India that the 
statutor~· deduction of tax payable under the Tax Act inhered in th,e payment 
of one month's wage, and in an)' case, the difference had been tendered before 
the Tribunal for pa)·mcnt to the workman, on objection raised, during the 
pend enc)' of the approval proceedings. 
Dismissing the appeals, this Court 
HELD : I. When an order of discharge or dismissal of a workman is 
incomplete and inl·hoate until it'> approval is obtained from the Tribunal, 
there is no effective termination of the relationship of the employer and the 
employee. Not only in a limited way that the relationship is snapped factually 
and one month's wage is given to the employee to soften the rigour of his 
factual unemplo)·ment, but the content and character of the wage ~ould 
extendedly tend to remain the same so tar as subjection to statutory tax 
deduction is concerned, being remuneration paid as understood in Section 2 
(rr) of the Industrial Disputes Act, OR' the supposition that the terms of 
emplo)'ment, exp1·essed or implied, were fulfilled and the same was du.e as 
wages payable to the workman in respect of his employment, or of work done 
in such employment, even though he was not put to work. 
2.1. Bare-facedl)' the inclusions and exclusions provided in Section 2(rr) 
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do not refer to tax dues. Rather the 'provision is silent about statutor~· tax 
deductions. But it goes without saying; if there is a statutory compulsion to 
deduct, that compulsion would have an intrusive role to pla)', getting a proper G 
fitment, as the law may warrant it'i effect, Secthm 33(2) (b) apart. The matter 
has to be viewed in this light. 
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2.2. In the instan

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