# BANK OF INDIA v. T.S. KELAWALA AND ORS

- **Citation:** [1990] 3 S.C.R. 214
- **Court:** Supreme Court of India
- **Decided:** 1990-05-04
- **Bench:** Kuldip Singh, P.B. Sawant
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/bank-of-india-v-t-s-kelawala-and-ors-10843
- **Pages:** 26

## Headnote

Payment of Wages Act, 1936: Sections 7(2) and 9-Absence from
work or indulging in go-slow tactics-Pro-rata deduction/non-payment
of wages by employer-Whether justified.
j
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In the former appeal, the appellant is a nationalised Bank. In
1977, some demands for wage revision made by the employees of all
Banks were pending and in support of their demands, a call for a
country wide strike was given. The appellant-Bank issued a Circular ou
September 23, 1977 to its managers and agents directing them to deduct
wages of the employees for the days they go on strike. The respondent·
E
Unions gave a call for a four hour strike on December 29, 1977. Two
days before the strike, the appellant-Bank issued an Administrative "'
Circular warning the employees that if they participate in the strike,
they would be committing a breach of their contract of service and they
would not be entitled to salary for the full day and they need not report
~
for work for the rest of the working hours on that day. However, the
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employees went on strike as scheduled, for four hours which included
banking hours of the public, and resumed duty thereafter. The
appellant-Bank did not prevent them from doing so. The appellant·
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Bank hy its circular directed the managers and agents to deduct the full
day's salary of those employees who participated in the strike. On a
writ petition tiled by the respondents, the High Court quashed the said
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Circular. The Letters Patent Appeal filed by the appellant was dismis·
sed. Hence, the appeal by the Bank.
In the latter appeal, the appellant is a company whose workers
had indulged in "go-slow" in July 1984, thereby bringing down pro1'
duction. The workers did not attend to their work and were loitering in
H the premises and were indulging in go-slow tactics to pressurise the
214
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BANK OF INDIA v. KELAWALA
215
company to concede their demands. The company suspended its operation by giving a notice of lock out. It did not pay wages to the workers
for July, 1984 on the ground that they did not work during all the
working hours and had not earned their wags. The workers' union filed
a complaint before the Industrial Court complaining that the appellnatcompany had indulged in unfair labour practice and that the lock-out
declared was illegal. The Industrial Court held that the deduction of
wages for July, 1984 on account of the go-slow W31' not justified. It also
declared that.the company had committed an unfair labour practice by
not paying full monthly wages to the workers and directed the company
to pay the said wages for the month of July, 1984. Aggrieved, the
appellant company has preferred the appeal.
Allowing the appeals, this Court,
HELD: J.l . There is no doubt that whenever a worker indulges in
a misconduct such as a deliberate refusal to work, the employer can
take disciplinary action against him and impose on him the penalty
prescribed for it which may include some deduction from his wages.
However, when misconduct is not disputed but is, on the other hand, '
admitted and is resorted to on a mass scale such as when the employees
go on strike, legal or illegal, there is no need to hold an inquiry. To
insist on an inquiry even in such cases is to pervert the very object of the
inquiry. In a mass action such as strike it is not possible to bold an
inquiry against every employee nor is it necessary to do so unless, of
course, an employee contends that although he did not want to go on
strike and wanted to resume bis duty, he was prevented from doing so
by the other employees or that the employer did not give him proper
assistance to resume his duty though he had asked for it. That was
certainly not the situation in the present case in respect of any of the
employees and that is not the contention of the employees either. It is
true that in the present case when the employees came back to work
after their four-hours strike, they were not prevented from entering the
Bank premises. But admittedly,

## Text

_Characters 0–39,668 of 70,092. This is a partial read: ask again with offset=39668 for what follows._

A
BANK OF INDIA
v.
T.S. KELAWALA AND ORS.
WITH
B
S.U. MOTORS PRIVATE LID.
v.
Tiffi WORKMEN EMrLOYED UNDER IT
·'"{
MAY 4, 1990
-...,
c
(KULDIP SINGH AND P.B. SAWANT, JJ.)
Payment of Wages Act, 1936: Sections 7(2) and 9-Absence from
work or indulging in go-slow tactics-Pro-rata deduction/non-payment
of wages by employer-Whether justified.
j
D
In the former appeal, the appellant is a nationalised Bank. In
1977, some demands for wage revision made by the employees of all
Banks were pending and in support of their demands, a call for a
country wide strike was given. The appellant-Bank issued a Circular ou
September 23, 1977 to its managers and agents directing them to deduct
wages of the employees for the days they go on strike. The respondent·
E
Unions gave a call for a four hour strike on December 29, 1977. Two
days before the strike, the appellant-Bank issued an Administrative "'
Circular warning the employees that if they participate in the strike,
they would be committing a breach of their contract of service and they
would not be entitled to salary for the full day and they need not report
~
for work for the rest of the working hours on that day. However, the
F
employees went on strike as scheduled, for four hours which included
banking hours of the public, and resumed duty thereafter. The
appellant-Bank did not prevent them from doing so. The appellant·
'
.;.
Bank hy its circular directed the managers and agents to deduct the full
day's salary of those employees who participated in the strike. On a
writ petition tiled by the respondents, the High Court quashed the said
G
Circular. The Letters Patent Appeal filed by the appellant was dismis·
sed. Hence, the appeal by the Bank.
In the latter appeal, the appellant is a company whose workers
had indulged in "go-slow" in July 1984, thereby bringing down pro1'
duction. The workers did not attend to their work and were loitering in
H the premises and were indulging in go-slow tactics to pressurise the
214
··-.,.
' '>- .
- _,,,,,/·
BANK OF INDIA v. KELAWALA
215
company to concede their demands. The company suspended its operation by giving a notice of lock out. It did not pay wages to the workers
for July, 1984 on the ground that they did not work during all the
working hours and had not earned their wags. The workers' union filed
a complaint before the Industrial Court complaining that the appellnatcompany had indulged in unfair labour practice and that the lock-out
declared was illegal. The Industrial Court held that the deduction of
wages for July, 1984 on account of the go-slow W31' not justified. It also
declared that.the company had committed an unfair labour practice by
not paying full monthly wages to the workers and directed the company
to pay the said wages for the month of July, 1984. Aggrieved, the
appellant company has preferred the appeal.
Allowing the appeals, this Court,
HELD: J.l . There is no doubt that whenever a worker indulges in
a misconduct such as a deliberate refusal to work, the employer can
take disciplinary action against him and impose on him the penalty
prescribed for it which may include some deduction from his wages.
However, when misconduct is not disputed but is, on the other hand, '
admitted and is resorted to on a mass scale such as when the employees
go on strike, legal or illegal, there is no need to hold an inquiry. To
insist on an inquiry even in such cases is to pervert the very object of the
inquiry. In a mass action such as strike it is not possible to bold an
inquiry against every employee nor is it necessary to do so unless, of
course, an employee contends that although he did not want to go on
strike and wanted to resume bis duty, he was prevented from doing so
by the other employees or that the employer did not give him proper
assistance to resume his duty though he had asked for it. That was
certainly not the situation in the present case in respect of any of the
employees and that is not the contention of the employees either. It is
true that in the present case when the employees came back to work
after their four-hours strike, they were not prevented from entering the
Bank premises. But admittedly, their attendance after· the four-hours
strike was useless because there was no work to do during the rest of the
hours. It is for this reason that the Bank had made it clear, in advance,
that if they went on strike for the four-hours as threatened, they would
not be entitled to the wages for the whole day and hence they need not
report for work thereafter. Short of physically preventing the employees from resuming the work which it was unnecessary to do, the
Bank had done all in its power to warn the employees of the consequences of their action and if the employees, in spite of it, chose to enter
the Bank's premises where they had no work to do, and in fact did not
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SUPREME COURT REPORTS
I 1990] 3 S.C.R.
do any, they did so of their own choice and not according to the requirement of the service or at the direction of the Bank. In fact, the direction ·"('
was to the contrary. Hence, the later resumption of work by the
employees was not in fulfihnent of the contract of service or any obligation under it. The Bank was therefore not liable to pay either full day's
salary or even the pro rata salary for the hours or work that the
employees remained in the Bank premises without doing any work. It is
not a mere presence of the workmen at the place of work but the work
that they do according to the terms of the contract which consitutes the
·\
. ..,
fulfilment of the contract of employment and for which they were
entitled to be paid. [222E-H; 223A-F]
1.2 Although the service regulations do not provide for a situation where employees on a mass scale resort to absence from duty for
whole day or a part of the day whether during crucial hours or
otherwise they do provide for treating an absence from duty of an .1
individual employee as a misconduct and for taking appropriate action
against him for such absence. [2240-E]
2.1. When the contract, Standing Orders, or the service rules/
regulations are silent, but enactment such as the payment of Wages Act
providing for wage-cuts for the absence from duty is applicable to the
establishment concerned, the wages can be deducted even under the
provisions of such enactment. [231F]
2.2. The working class has indisputably earned the right to strike
as an industrial action after a long struggle, so much so that the relevant
industrial legislation recognises it as their implied right. However, the
legislation also circumscribes this right by prescribing conditions under
which alone its exercise may become legal. Whereas, therefore, a legal
strike may not invite disciplinary proceedings, an illegal strike may do
so, it being a misconduct. However, whether the strike is legal or illegal,
the workers. are liable to lose wages for the period of strike. The liability
to lose wages does not either make the strike illegal as a weapon or
deprive the workers of it. When workers resort to it, they do so knowing
full well its consequences. During the period of strike the contract of
employment continues but the workers withhold their labour. Consequently, they cannot expect to be paid. [232C-E]
2.3. The contract, which is this case is monthly, cannot be subdivided into days and hours. If the contract comes to an end amidst a
month by death, resignation or retirement of the employee, he would
H
not be entitled to the proportionate payment for the part of the month
.\.
'y
BANK OF INDIA v. KELAWALA
217
he served. If the employment-contract is held indivisible, it will be so
for both the parties. There is no difficulty, inequity or impracticability
in construing the contract as divisible into different periods such as days
and hours for proportionate reimbursement or deduction of wages,
which is normally done in practice. [232G-H; 233A]
2.4. The contract of employment, Standing Orders or the service
rules provide for disciplinary proceedings for the lapse on the part of a
particular individual or individuals when the misconduct is disputed.
As things stand today, they do not provide a remedy for mass-misconduct which is admitted or cannot be disputed. Hence, to drive the
management to hold disciplinary proceedings even in such cases is
neither necessary nor proper. The service conditions are not expected to
visualise and provide for all situations. When they are silent on unexpected eventualities, the management should be deemed to have the
requisite power to deal with them consistent with law and the other
service conditions and to the extent it is reasonably necessary to do so.
The pro rata deduction of wages is not an unreasonable exercise of
power on such occasions. Whether on such occasions, the wages are
deductible at all and to what extent will, however, depend on the facts
of each case. Although the employees may strike only for some hours
but there is no work for the rest of the day as in the present case, the
employer may be justified in deducting salary for the whole day. On the
other hand, the employees may put in work after the strike hours and
the employer may accept it or acqquiesce in it. In that case the employer
may not be entitled to deduct wages at all or be entitled to deduct only
for the hours of strike. If statutes such as the Payment of Wages Act or
the State enactments like the Shops and Establishments Act apply, the
employer ,-.ay be justified in deducting wages under their provisions.
Even if they do not apply, nothing prevents the employer from taking
guidance from the legislative wisdom contained in it to adopt measures
on the lines outlined therein, when the contract of employment is silent
on the subject. [233B-F l
V. T. Khanzode & Ors. v. Reserve Bank of India & Anr., [1982] 3
SCR 411; Paluru Ramkrishnaiah & Ors. etc. v. Union of India & Anr.
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etc., [1989] l JT 595 and Senior Superintendent of Post Office & Ors. v.
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Izhar Hussain, [1989] 3 JT 4ll, relied on.
Buckingham and Carnatic Co. Ltd. v. Workers of the Buckingham and Carnatic Co. Ltd., [1953] SCR 219; V. Ganesan v. The State
Bank of India & Ors., [1981] 1 LLJ 64; State Bwk of India, Canara
Bank, Central Bank etc. & Ors. v. Ganesan, Jambunathan, VenkataraH
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SUPREME COURT REPORTS
[ 1990) 3 S.C.R.
man, B. V. Karnath, V.K. Krishnamurthy, etc. & Ors., [1989] I LU 109;
Sukumar Bandyopadhyyay & Ors. v. State of West Bengal & Ors.,
[1976) IX LIC 1689; Algemene .Bank Nederland, N. V. v. Central
Government Labour Court, Calcutta & Ors., [1978) II LU, i 17; V.
Ramachandran v. Indian Bank, [1979) I LLJ 122; Dharam Singh Rajput
& Ors. v. Bank of India, Bombay & Ors., [1979) 12 LIC 1079; R.
Rajamanickam, for himself and on behalf of other Award Staff v.
Indian Bank, [1981) II LLJ 367; R.N. Shenoy & Anr. etc. v. Central
Bank of India & Ors. etc., [1984] XVII LIC 1493; Prakash Chandra
Johari v. Indian Overseas Bank & Anr., [1986) II LLJ 496; Workmen of
M fs.Firestone Tyre & Rubber Co. of India (P) Ltd. v. Firestone Tyre &
Rubber Co., [1976) 3 SCR 369; Krishnatosh Das Gupta v. Union of
India & Ors., [1980) 1 LLJ 42; Sant Ram Sharma v. State of Rajasthan &
Anr., [1968) 1SCR111; Roshan Lal Tandon v. Union of India, [1968]
1 SCR 185; Secretary of State for Employment v. A>Sociated Society of
Locomotive Engineers and Firemen and Ors. (No. 2), I 1972] 2 All ER
949; Miles v. Wakefield Metropolitan District Council, [1989] I LLJ 335
and Cutter v. Pwell, [1795) 6 TR 320, referred to.
3. J. There cannot he two opinions that go-slow is a serious misconduct being a covert and a more damaging breach of the contract of
employment. It is an insidious method of undermining discipline and at
the same time a crude device to defy the norms of work. It has been
roundly condemned as an industrial action and has not been recognised
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as a legitimate weapon of the workmen to redress their grievances. In
fact the model standing orders as well as the certified standing orders of
most of the industrial establishments define it as a misconduct and
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provide for disciplinary action for it. Hence, once it is proved, those
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guilty of it have to face the consequences which may include deduction
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of wages and even dismissal from service. [237G-H: 238Al
3.2. The proof of go-slow, particularly when it is dispnted,
involves investigation into various aspects such as the nature of the
process of production, the stages of prodnction and their relative
importance, the role of the workers engaged at each stage of production, the pre-production activities and the facilities for production and
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the activities of the workmen connected therewith and their effect on
production, the factors hearing on the average production etc. The
go-slow further may be indulged in by an individual work.man or only
some workmen either in one section or different sections or in one shift
or both shifts affecting the output in varying degrees and to different
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extent depending upon the nature of product and the productive process. Even where it is admitted, go-slow may in some case present
BANK OF INDIA v. KELAWALA
219
difficulties in determining the actual or approximate loss, for it may
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have repercussions on production after the go-slow ceases which may be
difficult to estimate. The deduction of wages for go-slow· may, therefore, present difficulties which may not he easily resoluble. When,
therefore, wages are sought to he deducted for breach of contract on
account of go-slow, the quantum of deduction may become a bone of
contention in most of the cases inevitably leading to an industrial disB·
pule to be adjudicated by_ an independent machinery statutory or
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otherwise as the parties may resort to. The simplistic method of deduct-
,.
ing uniform percentage of wages from the wages of all workmen
calculated on the basis of the percentage fall in production compared to
the normal or average production may not always be equitable. It is,
therefore, necessary that in all cases where the factom of go-slow and /or c
the extent of the loss of production on account of it, is disputed, there
should be a proper inquiry on charges which furnish particulars of the
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go-slow and the loss of production on that account. The rules of natural
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justice require it, and whether they have been followed or not will
depend on the facts of each case. [2388-G]
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3.3. In the instant case, there is a finding recorded hy the lndustrial Court that there was a gil-slow resorted to by tbe workmen result-
~
ing in loss of production during the said period. Since the said finding is
not challenged, it is not possible to interfere with it in this appeal.
Though the appellant is justified in deducting wages for the said period,
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in the facts and circumstances of the case it is directed that it will not
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deduct more than 5 per cent of the wages of the workmen for the month
of July, 1984 when they indulged in go-slow tactics. [239D-F]
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M /s. Bharat Sugar Mills Ltd. v. Shri Jai Singh & Ors., [1962] 3
SCR 684; T.S. Kelwala & Ors. v. Bank of India & Ors., [1981] 43 FLR
341 and Apar (Pvt) Ltd. v. S.R. Samant & Ors., [1980] II LU 344,
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referred to.
)..
CIVIL APPELLA1E JURISDICTION: Civil Appeal No. 2581
of 1986.
Appeal by Certificate from the Judgment and Order dated G
15.10.1985 of the Bombay High Court in Appeal No. 547of1984.
__:,,
WITH
Civil Appeal No. 855 of 1987.
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SUPREME COURT REPORTS
[ 1990) 3 S.C.R.
From the Judgment and Order dated 8.12.1986 of the Industrial
Court, Maharashtra, Bombay in Complaint (ULP) No. 1202 of 1984.
Ashok Desai, Attorney General, G.B. Pai, J. Ramamurthy,
Jitendra Sharma, B.N. Dutt, H.S. Parihar, Vipin Chandra, R.F. Nariman, P.H. Parekh, N.K. Sahu, Mrs. Urmila Sirur and Raj Birbal for
the appearing parties.
The Judgment of the Court was delivered by
SAW ANT, J. These are two appeals involving a common question of law, viz., whether an employer has a right to deduct wages
unilaterally and without holding an enquiry for the period the employees go on strike or resort to go-slow. In CA No. 2581of1986we are
concerned with the case of a strike while in the other appeal, it is a·case
of a go-slow. By their very nature, the facts in the two appeals differ,
though the principles of law involved and many of the authorities to be
considered in both cases may be the same. For the sake of convenience, however, we propose to deal with each case separately to the
extent of the distinction.
Civil Appeal No. 258 lof 1986
2. The appellant in this case is a nationalised bank, and responE
dents 1 and 2 are its employees whereas respondents 3 and 4 are the
Unions representing the employees of the Bank. It appears that some
demands for wage-revision made by the employees of all the banks
were pending at the relevant time, and in support of the said demands
the All India Bank Employees' Association had given a call for a
countrywide strike. The appellant-Bank issued a circular on SeptemF
ber 23, 1977 to all its managers and agents to deduct wages of the
employees who would participate in the strike for the days they go on
strike. Respondents 3 and 4, i.e., the employees' Unions gave a call
for a four-hours strike on December 29, 1977. Hence, the Bank on
December 27, 1977 issued an Administrative Circular warning the
employees that they would be committing a breach of their contract of
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service if they participated in the strike and that they would not be
entitled to draw the salary for the full day if they did so, and consequently, they need not report for work for the rest of the working
hours on that day. Notwithstanding it, the employees went oh a fourhours strike from the beginning of the working hours on 29th
December 1977. There is no dispute that the banking-hours for the
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public covered the said four hours. The employees, however, resumed
BANK OF INDIA v. KELAWALA [SAWANT, J.)
221
work on that day after the strike hours, and the Bank did not prevent
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them from doing so. On January 16, 1978, the Bank issued a Circular
directing its managers and agents to deduct the full day's salary of
those of the employees who had participated in the strike. The respondents filed a writ petition in the High Court for quashing the circular.
The petition was allowed. The Bank preferred a Letters Patent Appeal
in the High Court which also came to be dismissed. Hence, the present
B
:irrieal.
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The High Court has taken the view, firstly, that neither regulalions nor awards nor settlements empowered the Bank to make the
deductions, and secondly, in justice, equity and good conscience the
....
Bank could not by the dictate of the impugned circular attempt to stifle
the legitimate weapon given by the law to the workers to ventilate c
their grievances by resorting to strike. The High Court further took
,._
the view that since strikes and demonstrations were not banned in the
country and despite the inconvenience that they may cause, they were
recognised as a legitimate form of protest for the workers, the circular
acted as a deterrent to the employees from resorting to a legally recogD
nised mode of protest. According to the High Court, the circular even
acted as an expedient to stifle the legitimate mode of protest allowed
and recognised by law. The deduction of the wages for the day according to the Court amounted to unilaterally changing the service condilions depriving the workers of their fixed monthly wages under the
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contract of service. The Court also reasoned that under the conditions
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of service, wages were paid not from day to day or hour to hour but as
a fixed sum on a monthly basis. The contract between the Bank and
the workers being not a divisible one, in the· absence of a specific term
_,
in the regulations, awards and settlements, the Bank could not unilaterally reduce the monthly wage and thus give the employees lesser
monthly wages than the one contracted. The non-observance by the
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employees of the terms of the contract may give the employer a cause
of action and a right to take appropriate remedy for the breach, but the
employer was not entitled to deduct any part of the wages either on a
pro rata basis or otherwise. The High Court further opined that the
Bank was not without a remedy and the employees cannot hold the
bank to ransom. The Bank could get the four-hours strike declared
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illegal by recourse to the machinery provided by law or put the erring
workers under suspension for minor misconduct under Regulation
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19. 7, hold an enquiry and if found guilty, impose punishment of warning, censure, adverse remarks or stoppage of increment for not more
than six months as prescribed by Regulation 19.8. The High Court also
rejected the contention of the Bank that the Bank was entitled to make
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SUPREME COURT REPORTS
[1990] 3 S.C.R.
deductions under Section 7(2) of the Payment of Wages Act, 1936 by
holding that the provision enabled the employer to deduct wages only
if the Bank had power under the contract of employment.
4. The principal question involved in the case, according to us,
is, notwithstanding the absence of a term in the contract of employment or of a provision in the service rules or regulations, whether an
employer is entitled to deduct wages for the period that the employees
refuse to work although the work is offered to them. The deliberate
refusal to work may be the result of various actions on their part such
as a sit-in or stay-in strike at the work-place or a strike whether legal or
illegal, or a go-slow tactics. The deliberate refusal to work further may
be legal or illegal as when the employees go on a legal or illegal strike.
The legality of strike does not always exempt the employees from the
deduction of their salaries for the period of strike. It only saves them
from a disciplinary action since a legal strike is recognised as a legitimate weapon in the hands of the workers to redress their grievances. It
appears to us that this confusion between the strike as a legitimate
D weapon in the hands of the workmen and the liability of deduction of
wages incurred on account ofit, whether the strike is legal or illegal,
has been responsible for the approach the High Court has taken in the
matter.
5. It is necessary to clear yet another misconception. There is no
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doubt that whenever a worker indulges in a misconduct such as a
deliberate refusal to work, the employer can take a disciplinary action
against him and impose on him the penalty prescribed for it which may
include some deduction from his wages. However, when misconduct is
not disputed but is, on the other hand, admitted and is resorted to on a
mass scale such as when the employees go on strike, legal or illegal,
F
there is no need to hold an inquiry. To insist on an inquiry even in such
cases is to pervert the very object of the inquiry. 1n a mass action such
as a strike it is not possible to hold an inquiry against every employee
nor is it necessary to do so unless, of course, an employee contends
that although he did not want to go on strike and wanted to resume his
duty, he was prevented from doing so by the other employees or that
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the employer did not give him proper assistance to resume his duty
though he had asked for it. That was certainly not the situation in the
present case in respect of any of the employees and that is not the
contention of the employees either. Hence, in cases such as the present one, the only question that has to be considered is whether, when
admittedly the employees refuse to work by going on strike, the empH toyer is entitled to deduct wages for the relevant period or not. We
BANK OF INDIA v. KELAWALA [SAWANT, J.I
223
thOught that the answer to this question was apparent enough am\ did
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not require much discussion. However, the question has assumed a
different dimension in the present case because on the facts, it is
contended that although the employees went on strike only for four
hours and thereafter resumed their duties, the Bank has deducted
wages for the whole day. It is contended that in any case this was
impermissible and the Bank could at the most deduct only pro rata
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wages. Normally, this contention on the part of the workers would be
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valid. But in a case such as the present one, where the employees go on
·-,,,...
strike during the crucial working hours which generate work for the
rest of the day, to accept this argument is in effect to' nega.te the
purpose and efficacy of the remedy, and to permit its circumvention
.-
effectively. It is true that in the present case when the employees came
back to work after their four-hours strike, they were not prevented c
from entering the Bank premises. But admittedly, their attendance
after the four-hours strike was useless because there was no work to do
during the rest of the hours. It is for this reason that the Bank had
made it clear, in advance, that if they went on strike for the four-hours
as threatended, they would not be entitled to the wages for the whole
D
day and hence they need not report for work thereafter. Short of
physically preventing the employees from resuming the work which it
was unnecessary to do, the Bank had done all in its power to warn the
employees of the consequences of their action and if the employees, in
spite of it, chose to enter the Bank'spremises where they had no work
?'
to do, and in fact did not do any, they did so of their own choice and
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not according to the requirement of the service or at the direction of
the Bank. In fact, the direction was to the contrary. Hence, the later
resumption of work by the employees was not in fulfilment of the
..
contract of service or any obligation under it. The Bank was therefore
not liable to pay either full day's salary or even the pro rata salary for
the hours of work that the employees remained in the Bank premises
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without doing any work. It is not a mere presence of the workmen at
the place of work but the work that they do according to the terms of
the contract which constitutes the fulfilment of the contract of employment and for which they are entitled to be paid.
6. It is also necessary to state that thongh, before the High
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Court, reliance was placed by the Bank on the provisions of Section
7(2)(b) read with Section 9 of the Payment of Wages Act, 1936 for a
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right to deduct the wages for absence from duty, there is nothing on
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record to show that the provisions of the said Act have been made
applicable to the Bank. However, assuming that Act was applicable to
the Bank, we are of the opinion that the relevant discussion of the
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High Court has missed the contentions urged by the Bank on the basis
of the said provisions. What was urged by the Bank was that the said
provisions enabled it to deduct wages for absence from duty. Hence,
even if the Service rules/regulations were silent on the point, the Bank
could legally deduct the wages under the said provisions. The High
Court has reasoned that the power given by the said provisions come
into play only when the employer has power to do so, probably meaning thereby, the power under the Service rules/regulations. We are
unable to appreciate this reasoning, which to say the least, begs the
question. It is, therefore, necessary to point out that if the Act was
applicable, the Bank would certainly have had the power to deduct the
wages under the said provisions in the absence of any service rule
regulation to govern th~ situation.
7. Since the admitted position is that the service rules do not
provide for such a sitution, the question as stated earlier which
requires to be answered in the present case, is whether there exists an
~
implied right in the employer-Bank to take action as it has done. There
D is no dispute that although the service regulations do not provide for a
situation where employees on a mass scale resort to absence from duty
for whole day or a part of the day whether during crucial hours or
otherwise, they do provide for treating an absence from duty of an
individual employee as a misconduct and for taking appropriate action
against him for such absence. Since the High Court has indicated a
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disciplinary action under the said provision even in the present
circumstances, we will also have to deal with that aspect. But before
we do so, we may examine the relevant authorities cited at the Bar.
8. In Buckingham and Carnatic Co. Ltd. v. Workers of the
Buckingham and Carnatic Co. Ltd., [1953] SCR 219 the facts were that
F
on 1st November, 1948 the night-shift operatives of the carding and
spinning department of the appellant-Mills stopped work, some at 4
p.m., some at 4.30 p.m. and some at 5 p.m. and the stoppage ended at
8 p.m. in·both the departments, and at 10 p.m. the strike ended completely. The apparent cause for the strike was that the management of
the Mills had expressed its inability to comply with the request of the
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workers to declare the forenoon of the Jst November, 1948 as a holiday for solar-eclipse. On 3rd November, 1948, the management put up
a notice that the stoppage of work on the 1st November amounted to
an illegal strike and a break in service within the meaning of the
Factories Act and that the management had decided that the workers
who had participated in the said strike would not be entitled to holiH
days with pay as provided by the Act. The disputes having thus arisen,
''r·
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BANK OF INDIA v: KELAWALA [SAWANT, J.]
225
the State Government referred the matter to Industrial Tribunal. The
Tribunal held that the workers had resorted to an illegal strike and
upheld the view of the management that the c<'ntinuity of service of
the workers was broken by the interruption caused by the illegal strike
and as a result the workers were not entitled to annual holidays with
pay under Section 49-B(l) of the Factories Act. The Tribunal, however, held that the total deprivation of leave with pay was a severe
p>>nish!!'P!lt and reduced the punishment by 50 per cent and held that
the workers would be deprived of only half their holidays with pay. In
the appeal before the then Labour Appellate Tribunal, the Tribunal
held, among other things, that what happened on the night of the 1st
November did not amount to a strike and did not cause any interruption in the workers' service. The Tribunal observed that "It would be
absurd to hold that non-permitted absence from work even for half an
hour or less in the course of a working day would be regarded as
interruption of service of a workman for the purpose of the said section (i.e., Section 49-B(l) of the Factories Act). We are inclined to
hold that the stoppage of work for the period for about 2 to 4 hours in
the circumstances of the case is not to be regarded as a strike so as to
amount to a break in the continuity of service of the workman concerned". In the result, the Tribunal allowed the Union's appeal and
ordered that holidays at full rates as provided for in Section 49-A of
the Factories Act will have to be calculated on the footing that there
was no break in the continuity of service. This Court set aside the
finding of the Appellate Tribunal by holding that it could not be
disputed that there was a ce'ssation of work by a body of persons
employed in the Mills and that they were acting in combination and
their refusal to go back to work was concerted, and the necessary
ingredients of the definition of "strike" in Section 2 (q) of the Industrial Disputes Act existed and it was not a case of an individual worker's
failure to tum up for work. Hence, it was an illegal strike because no
notice had been given to the management, the Mills being a public
utility industry.
In Secretary of State for Employment v .Associated Society of
Locomotive Engineers and Firemen and Ors. (No. 2), I 1977] 2 All ER
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949, Lord Denning MR observed:
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" ... It is equa]]y the case when he is employed as one of
many's to work in an undertaking which needs the service
of all. If he, with the others, takes steps wilfully to disrupt
the undertaking to produce chaos so that it will not run as it
should. then each one who is a party to those steps is ~uilty
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[1990] 3 S.C.R.
of a breach of his contract. It is no answer for any one of
them to say 'I am only obeying the rule book', or 'I am not
bound tCN!o more than a 40 hour week'. That would be all
very well if done in good faith without any wilful disruption of services; but what makes it wrong is the object with
which it is done. There are many branches of our law when
an act which would otherwise be lawful is rendered unlawful by the motive or object with which it is done. So here it
is the wilful disruption which is the breach. It means that
the work of each man goes for naught. It is made of no
effect. I ask: is a man to be entitled to wages for his work
when he, with others, is doing his best to make it useless?
Surely not. Wages are to be paid for services rendered, not
for producing deliberate chaos. The breach goes to the
whole of the consideration. as was put by Lord Campbell
CJ in Cuckson v. Stones, [1858] 1 E & E 248 at 255, (198360) All ER Rep 390 at 392 and with other cases quoted in
Smith's Leading Cases (13th Edn., Vol. 2, p. 48), the notes
to Cutterv. Powell, [1795] 6 Term Rep 320, (1775-1802) All
ER Rep 159)".
In Miles v. Wakefield Metropolitan District Council, [1989] I LLJ
335 the facts were that the plaintiff, Miles was the SuperintendentRegistrar in the Wakefield Metropolitan District Council. His duties
E
included performing marriages. As part of trade union action, he
declined to perform marriages on Saturdays which day was very popular with marrying couples. However, on that day he performed his
other duties. The Council, not wanting to terminate his services,
imposed a cut in his remuneration. He sued the Council for payment
but failed. He appealed to the Court of Appeal and was successful.
F
The appellate court held that he was a statutory official and there was
no contractual relation and the only action against him was dismissal.
Aggrieved by this appellate decision, the Council went before the
House of· Lords in appeal. The House of Lords held that the salary
payable to the plaintiff was not an honorarium for the mere tenure of
office but had the character of remuneration for work done. If an
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employee refused to perform the full duties which could be required of
him under his contract of service, the employer is entitled to refuse to
accept any partial performance. In an action by an employee to
recover his pay, it must be proved or admitted that the employee
worked or was willing to work in accordance with the contract of
employment or that such service as was given by the employee, if
H
falling short of. his contractual obligations was accepted by the
BANK OF INDIA v. KELAWALA (SAWANT, J.]
227
employer as sufficient performance 'Jf the contract. In a contract of
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~
employment wages and work go together. The employer pays for the
work and the worker works for his wages. If the employer declines to
pay, the worker need not work. If the worker declines to work, the
employer need not pay. In an action by a worker to recover his pay, he
must allege and prove that he worked or was willing to work. In the
instant case, the plaintiff disentitled himself to salary for Saturday
B
!'.
morning becuase he declined to work on Saturday morning in accordance with his duty. Since the employee had offered only partial
....
performance of his contract, the employer was entitled, without
terminating the contract of employment, to decline partial performance, and in that case the employee would not be entitled to sue for
,--
his unwanted service.
c
In this connection, Lord Templeman stated as follows:
·~··
"The consequences of counsel's submissions demonstrate
that his analysis of a contract of employment is deficient. It
cannot be right that an employer should be compelled to
D
pay something for nothing whether he dismisses or retains
a worker. In a contract of employment wages and work go
together. The employer pays for work and the worker
works for his wages. If the employer declines to pay, the
worker need not work. If the worker declines to work, the
,.,
employer need not pay. In an action by a worker to recover
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his pay he must allege and be ready to prove that he
worked or was willing to work ..... "
''i
It may be mentioned here that on the question whether the empIoyee engaged in some kind of industrial action can claim wages on the
basis of quantum meruit, only two of the Law Lords expressed
F
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themselves in favour, while the other three did not want to express any
definite opinion on the question.
9. Among the decisions of the various High Courts relied upon
by the parties in support of the respective cass, we find that except for
the decision in V. Ganesan v. The State Bank of India & Ors., [1981] 1
G
LLJ 64 given by the learned Single Judge of the Madras High Court
and the decision of the Division Bench of the same Court in that
A.
matter and other matters decided together in State Bank of India,
Canara Bank, Central Bank etc. & Ors. v. Ganesan, Jambunathan,
Venkataraman, B. V. Karnath, V.K. Krishnamurthy, etc. & Ors.,
[1989] 1 LLJ 109, all other decisions, namely, (i) Sukumar BandyoH
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[1990] 3 S.C.R.
padhyyay & Ors. v. State of West Bengal & Ors., [1976] IX UC 1689; (ii)
Algemene Bank Nederland, N. V. v. Central Government Labour
Court, Calcutta & Ors., [1978] II LU, 117; (iii) V. Ramachandran v.
Indian Bank, [1979] 1 LU 122; (iv) Dharam Singh Rajput & Ors. v.
Bank of India, Bombay & Ors., [1979] 12 UC 1079; (v) R.
Rajamanickam, for himself and on behalf of other Award Staff v.
Indian Bank, [1981] II LU 367; (vi) R.N. Shenoy & Anr. etc. v.
Central Bank of India & Ors. etc., [1984] XVII UC 1493 and (vii)
Prakash Chandra Johari v. Indian Overseas Bank & Anr., l 1986] II LU
496, have variously taken the view that it is not only pennissible for the
employer to deduct wages for the hours or the days for which the
employees are absent from duty but in cases such as the present, it is
permissible to deduct wages for the whole day even if the absence is for
a few hours. It is also held that the contract is not indivisible. Some of
the decisions have also held that the deduction of wages can also be
made under the provisions of the Payment of Wages Act and similar
statutes where they are applicable. It is further held that deduction of
wages in such cases is not a penalty but is in enforcement of the
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contract of employment and hence no disciplinary proceedings need
precede it.
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Even in V. Ganesan v. The State Bank of India & Ors., (supra), it
was not disputed on behalf of the employees that the employer,
namely, the Bank had no right to deduct pro rata the salary of the
officers for the period of absence from duty. What was contended
there was that the Bank was not entitled to deduct the salary for the
whole three days on which the employees had staged a demonstration
for a duration of 30 minutes during working hours on two days and for
an hour, on the third day. The learned Judge held that by pennitting
the employees to perfonn their work during the rest of the day and by
accepting such perfonnance the bank must be deemed to have
acquiesced in the breach of contract by the employees. It is on this fact
that the learned Judge held that the right to deduct salary (obviously
for the whole day) on the principle of "no work no pay" could be
exercised only when there was a tenn in the contract or when there was
a statutory provision to that effect.