Pandiyan Roadways Corpn. Ltd. v. N. Balakrishnan

Pandiyan Roadways Corpn. Ltd. v. N. Balakrishnan

(2007) 9 SCC 755

Key Words: shall, directory, mandatory, substantive, procedural, prejudice, non-compliance

Facts:

Respondent herein was employed as a helper of Appellant. A criminal complaint was lodged against him for alleged commission of theft. A disciplinary proceeding was also initiated against him. In the disciplinary proceeding, he was, however, found to be guilty and dismissed from services only after a show cause notice was served on him.

Appellant filed an application for approval of the said order of removal purported to be in terms of Section 33(2)(b) of the Industrial Disputes Act, 1947. Approval sought for was not granted on the premise that in passing the same, Clause 17(5)[1] of the Certified Standing Orders of the Corporation, which required the management to take into account the past record before passing the order of dismissal, was not complied with. During pendency of the said proceedings before the Tribunal, admittedly the Criminal Court held the respondent not guilty and acquitted him. A Writ Petition was filed by the appellant questioning the said Order of the Labour Court.

Held:

As regards Clause 17(5), the Court emphasized the significance of the word “shall” in following words –

“On a plain reading of the said provision and particularly in view of the fact that the word “shall” has been used, prima facie it would be construed to be imperative in character. It may, however, be held to be directory in certain situation. While construing a statute of this nature, the context plays an important role. Interpretation of a statute would also depend upon the fact situation obtaining in the case.”

The Court also emphasized the test of ‘prejudice’ in following words at Para 12-

“…a provision in a statute which is procedural in nature although employs the word ‘shall’ may not be held to be mandatory if thereby no prejudice is caused.”

As regards the question of whether a statutory provision in mandatory or directory it referred to Ashok Lanka case and quoted certain part of it which is reproduced below-

“In Ashok Lanka v. Rishi Dixit it was held: (SCC p. 621, para 53)

“53. The question as to whether a statute is mandatory or directory would depend upon the statutory scheme. It is now well known that use of the expression ‘shall’ or ‘may’ by itself is not decisive. The court while construing a statute must consider all relevant factors including the purpose and object the statute seeks to achieve. (See P.T. Rajan v. T.P.M. Sahir7 and U.P. SEB v. Shiv Mohan Singh5.)”

The Court then discussed the degree of compliance required for provisions of such nature in the following words-

“…ordinarily consequences flowing from contravention of an imperative character of a statute has to be given effect to. A statutory provision may be substantive or procedural. If it is substantive, the requirements laid down in the statute should ordinarily be complied with. However, when the provisions contain a procedural matter, substantial compliance thereof would serve the purpose.”

It also noted at the same time at Para 16 that- “Only because the statute is imperative, it may not necessarily lead to a declaration that the order impugned is a nullity.”

The Court accordingly held that although Sub-clause (5) of Clause (17) of the Certified Standing Orders was required to be complied with, the same would not mean that there cannot be any deviation therefrom in a given situation. In a case where dismissal or removal of service is to be ordinarily followed strict enforcement of the rule may not be insisted upon. However, “where a procedural provision merely embodied the principles of natural justice, in view of the decision of this Court in State Bank of Patiala (supra), the question as to whether the principle has been followed or not, will depend upon the fact situation obtaining in each case.”

At Para 17 the Court referred to the judgment in State Bank of Patiala vs. S.K. Sharma and quoted (page 764):

“(4)(a) In the case of a procedural provision which is not of a mandatory character, the complaint of violation has to be examined from the standpoint of substantial compliance. Be that as it may, the order passed in violation of such a provision can be set aside only where such violation has occasioned prejudice to the delinquent employee.”

Conclusion:

• Substantial compliance was sufficient to uphold the validity of the act.