THE MANAGEMENT OF SRI RAMNARAYAN MILLS LTD. versus SECRETARY COIMBATORE DISTRICT TEXTILE WORKERS UNION (HMS) AND ORS

Citation: [2018] 13 S.C.R. 1198 · Decided: 02-11-2018 · Supreme Court of India · Bench: ABHAY MANOHAR SAPRE · Disposal: Dismissed

Judgment (excerpt)

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SUPREME COURT REPORTS
[2018] 13  S.C.R.
THE MANAGEMENT OF SRI RAMNARAYAN MILLS LTD.
v.
SECRETARY COIMBATORE DISTRICT TEXTILE WORKERS
UNION (HMS) AND ORS.
(Civil Appeal No. 1977 of 2010)
NOVEMBER 02, 2018
[ABHAY MANOHAR SAPRE AND INDU MALHOTRA, JJ.]
Labour Law: Certified Standing Orders – Application filed
by the appellant (employer) to the Joint Commissioner of Labour
(certifying officer) seeking permission to add new ground i.e. “break
in service” in Clause 16 of the Chapter of Punishment in Certified
Standing Orders – Labour court and High Court dismissed the
application – On appeal, held: A “break in service” cannot be
allowed as a ground by way of punishment in Clause 16 of the
Chapter of Punishment in Certified Standing Orders – Such a ground
will defeat the very object of the Payment of Gratuity Act which is a
beneficial legislation enacted for the benefit of the employees –
The proposed ground, if allowed, is likely to be misused by the
employers against its employees for their own benefit and detrimental
to the employees’ interest – No interference with the order of High
Court called for – Payment of Gratuity Act.
Dismissing the appeal, the Court
HELD:  The existing grounds enumerated in Clause 16 by
way of punishment are sufficient to take care of any misconduct
committed by any employee and there is no reason to introduce
one more new ground in the existing grounds specified in Clause
16 for imposing a new punishment. Secondly, the proposed
ground, if allowed, would likely to be misused by the employer
against its employees for their own benefit and detrimental to
the employees’ interest.  Thirdly, it would enable the employer
to take action against its employees even in a situation where an
employee is found absent even for a day and such absence will be
treated as “break in service” under the Certified Standing Orders
and also under the Payment of Gratuity Act. It will, therefore, be
in conflict with the definition of the expression “continuous
[2018] 13  S.C.R. 1198
1198
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service” defined under the Payment of Gratuity Act which gives
different modes of calculation for determining the continuous
service for payment of gratuity amount. Fourthly, such ground
will, therefore, defeat the very object of the Payment of Gratuity
Act which is a beneficial legislation enacted for the benefit of the
employees and lastly, it is neither bona fide nor reasonable and
nor required and hence it cannot be allowed.  [Paras 13-16]
[1202-G-H; 1203-A-D]
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1977
of 2010
From the Judgment and Order dated  13.08.2007 of the  High
Court of Judicature at Madras in W.A. No. 2675 of 2002.
Ashish Kumar Upadhyay, Manohar Gupta, Gopal Singh Chauhan,
P. V. Yogeswaran, Advs. for the Appellant.
T. R. B. Sivakumar, Adv. for the Respondents.
The Judgment of the Court was delivered by
ABHAY MANOHAR SAPRE, J. 1. This appeal is filed against
the final judgment and order dated 13.08.2007 passed by the High Court
of Judicature at Madras in W.A. No. 2675 of 2002 whereby the Division
Bench of the High Court dismissed the Writ Appeal and affirmed the
order of the Labour Court and Single Judge.
2. Facts of the case lie in a narrow compass. They, however,
need mention in brief infra to appreciate the short controversy.
3. The appellant is a limited company having its mill in Coimbatore.
The appellant being an employer applied to the Joint Commissioner of
Labour (Respondent No.3) praying in their application that they be allowed
to add one more new ground namely “break in service” in Clause 16 of
the Chapter of Punishment in Certified Standing Orders in addition to
the existing grounds specified therein. 
4. In other words, the appellant’s prayer was that if any employee
commits “break in service” in any year, then it should be regarded as
one of the ground for punishment enabling the employer (appellant) to
take action against such employee under their certified standing order.
They, therefore, prayed that they may be allowed to add this new ground
in Clause 16 of the Chapter of Punishment in Certified Standing Orders.
THE MGMNT. OF SRI RAMNARAYAN MILLS v. SECR. COIMBATORE
DISTRICT TEXTILE WORKERS UNION [ABHAY MANOHAR SAPRE, J.]
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5. On 02.04.1992 the third respondent (Joint Commissioner of
Labour) allowed the said application of appellant and permitted them to
amend their certified standing orders by adding 

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