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Municipal Corporation of Delhi Versus Female Workers (Muster Roll) and another[ALL SC 2000 MARCH]

KEYWORDS:- iNDUSTRIAL DISPUTE – MUNICIPALITY WHETHER INDUSTRY-MATERNITY BENEFIT-CASUAL WORKERS-

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DATE:-08-03-2000-

AIR 2000 SC 1274 : (2000) 2 SCR 171 : (2000) 3 SCC 224 : JT 2000 (3) SC 13 : (2000) 2 SCALE 269

(SUPREME COURT OF INDIA)

Municipal Corporation of Delhi Appellant
Versus
Female Workers (Muster Roll) and another Respondent

(Before: S. Saghir Ahmad And D. P. Wadhwa, JJ.)

Spl. Leave Petn. (Civil) No. 12797 of 1998, Decided on: 08-03-2000.

Constitution of India, 1950—Articles 14, 11, 15, 38, 39, 42 and 43—Maternity Benefit Act, 1961—Sections 2, 3(b), 3(c) and 3(h)—Employees State Insurance Act, 1948—Section 50.

Counsel for the Parties:

Ms. Amita Gupta, Advocate, for Petitioner

K. K. Rai, Advocate, for Respondents.

Judgement

S. Saghir Ahmad, J—Female workers (muster roll), engaged by the Municipal Corporation of Delhi (for short, ‘the Corporation’), raised a demand for grant of maternity leave which was made available only to regular female workers but was denied to them on the ground that their services were not regularised and, therefore, they were not entitled to any maternity leave. Their case was espoused by the Delhi Municipal Workers Union (for short, ‘the Union’) and, consequently, the following question was referred by the Secretary (Labour), Delhi Administration to the Industrial Tribunal for adjudication:-

“Whether the female workers working on Muster Roll should be given any maternity benefit? If so, what directions are necessary in this regard?”

2. The Union filed a statement of claim in which it was stated that Municipal Corporation of Delhi employs a large number of persons including female workers on muster roll and they are made to work in that capacity for years together though they are recruited against the work of perennial nature. It was further stated that the nature of duties and responsibilties performed and undertaken by the muster roll employees are the same as those of the regular employees. The women employed on muster roll, which have been working with the Municipal Corporation of Delhi for years together, have to work very hard in construction projects and maintenance of roads including the work of digging trenches etc. but the Corporation does not grant any maternity benefit to female workers who are required to work even during the period of mature pregnancy or soon after the delivery of child. It was pleaded that the female workers required the same maternity benefits as were enjoyed by regular female workers under the Maternity Benefit Act, 1961. The denial of these benefits exhibits a negative attitude of the Corporation in respect of a humane problem.

3. The Corporation in their written statement, filed before the Industrial Tribunal, pleaded that the provisions under the Maternity Benefit Act, 1961 or Central Civil Services (Leave) Rules were not applicable to the female workers, engaged on muster roll, as they were all engaged ony on daily wages. It was also contended that they were not entitled to any benefit under the Employees’ State Insurance Act, 1948. It was for these reasons that the Corporation contended that the demand of the female workers (muster roll) for grant of maternity leave as liable to be rejected.

4. The Tribunal, by its Award dated 2nd of April, 1996, allowed the claim of the female workers (muster roll) and directed the Corporation to extend the benefits under the Maternity Benefit Act, 1961 to muster roll female workers who were in the continuous service of the Corporation for three years or more. The Corporation challenged this judgment in a Writ Petition before the Delhi High Court which was dismissed by the Single Judge on January 7, 1997. The Letters Patent Appeal (LPA No. 64 of 1998), filed thereafter by the Corporation was dismissed by the Division Bench on March 9, 1998 on the ground of delay.

5. Learned counsel for the Corporation contended that the Division Bench was not justified in rejecting the appeal on the ground of delay which ought to have been condoned as there was only a 33 days’ delay in filing the Letters Patent Appeal which was caused on account of the opinion of different Departments which had to be obtained before filing the Letters Patent Appeal. Since the High Court has already exercised its discretion and has not condoned the delay in filing the appeal, we find it difficult to enter into that controversy and examine the reasons why the appeal was filed before the Division Bench after the expiry of the period of limitation. However, since the question involved in this case is important, we deem it fit to express ourselves on the merits of the matter as we have heard the counsel for the Corporation on merits also.

6. Not long ago, the place of a woman in rural areas has been traditionally her home; but the poor illiterate women forced by sheer poverty now come out to seek various jobs so as to overcome the economic hardship. They also take up jobs which involve hard physical labour. The female workers who are engaged by the Corporation on muster roll have to work at the site of construction and repairing of roads. Their services have also been utilised for digging of trenches. Since they are engaged on daily wages, they, in order to earn their daily bread, work even in advance stage of pregnancy and also soon after delivery, unmindful of detriment to their health or to the health of the new-born. It is in this background that we have to look to our Constitution which, in its Preamble, promises social and economic justice. We may first look at the Fundamental Rights contained in Chapter III of the Constitution. Article 14 provides that the State shall not deny to any person equality before law or the equal protection of the laws within the territory of India. Dealing with this Article vis-a-vis the Labour Laws, this Court in Hindustan Antibiotics Ltd. v. Workmen, AIR 1967 SC 948: (1967) 1 SCR 652, has held that labour to whichever sector it may belong in a particular region and in a particular industry will be treated on equal basis. Article 15 provides that the State shall not discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them. Clause (3) of this Article provides as under:-

“(3) Nothing in this article shall prevent the State from making any special provision for women and children”.

7. In Yusuf Abdul Aziz v. State of Bombay, AIR 1954 SC 321: (1954) SCR 930, it was held that Article 15 (3) applies both to existing and future laws.

8. From Part III, we may shift to Part IV of the Constitution containing Directive Principles of State Policy. Article 38 provides that the State shall strive to promote the welfare of the people by securing and protecting, as effectively as it may, a social order in which justice, social, economic and political shall inform all the institutions of the national life. Sub-Clause (2) of this Article mandates that the State shall strive to minimise the inequalities in income and endeavour to eliminate inequalities in status, facilities and opportunities.

Article 39 provides, inter alia, as under:

“39. Certain principles of policy to be followed by the State – The State shall, in particular, direct its policy towards securing —

(a) that the citizens, men and women equally, have the right to an adequate means of livelihood;

(b) and (c) **********

(d) that there is equal pay for equal work for both men and women;

(e) that the health and strength of workers, men and women, and the tender age of children are not abused and that citizens are not forced by economic necessity to enter avocations unsuited to their age or strength;

(f) . . . . . . . . . . . .”.

Articles 42 and 43 provides as under:

“42. Provision for just and humane conditions of work and maternity relief – The State shall make provision for securing just and humane conditions of work and for maternity relief.

43. Living wage, etc., for workers – The State shall endeavour to secure, by suitable legislation or economic organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities and, in particular, the State shall endeavour to promote cottage industries on an individual or co-operative basis in rural areas.”

9. It is in the background of the provisions contained in Article 39, specially in Articles 42 and 43, that the claim of the respondents for maternity benefit and the action of the petitioner in denying that benefit to its women employees has to be scrutinised so as to determine whether the denial of maternity benefit by the petitioner is justified in law or not.

10. Since Article 42 specifically speaks of “just and humane conditions of work” and “maternity relief”, the validity of an executive or administrative action in denying maternity benefit has to be examined on the anvil of Article 42 which, though not enforceable at law, is nevertheless available for determining the legal efficacy of the action complained of.

11. The Parliament has already made the Maternity Benefit Act, 1961. It is not disputed that the benefits available under this Act have been made available to a class of employees of the petitioner-Municipal Corporation. But the benefit is not being made available to the women employees engaged on muster-roll, on the ground that they are not regular employees of the Corporation. As we shall presently see, there is no justification for denying the benefit of this Act to casual workers or workers employed on daily wage basis.

12. Section 2 of the Maternity Benefit Act, 1961 deals with the applicability of the Act. Section 3 contains definitions. The word “child” as defined in Section 3(b) includes a ‘still-born’ child. “Delivery” as defined in Section 3(c) means the birth of a child. “Maternity Benefit” has been defined in Section 3(h), which means the payment referred to in sub-section (1) of Section 5. “Woman” has been defined in Clause (o) of Section 3 which means “a woman employed, whether directly or through any agency, for wages in any establishment.” “Wages” have been defined in Clause (h) of Section 3 which provides, inter alia, as under:

“Wages means all remunerations paid or payable in cash to a woman”.

Section 5 provides, inter alia, as under:

“5. Right to payment of maternity benefit –

(1) Subject to the provisions of this Act, every woman shall be entitled to, and her employer shall be liable for, the payment of maternity benefit at the rate of the average daily wage for the period of her actual absence, that is to say, the period immediately preceding the day of her delivery, the actual day of her delivery and any period immediately following that day.

Explanation – For the purpose of this sub-section, the average daily wage means the average of the woman’s wages payable to her for the days on which she has worked during the period of three calendar months immediately preceding the date from which she absents herself on account of maternity, the minimum rates of wages fixed or revised under the Minimum Wages Act, 1948 or ten rupees, whichever is the highest.

(2) No woman shall be entitled to maternity benefit unless she has actually worked in an establishment of the employer from whom she claims maternity benefit, for a period of not less than eighty days in the twelve months immediately preceding the date of her expected delivery.

**********

Explanation – For the purpose of calculating under this sub-section the days on which a woman has actually worked in the establishment, the days for which she has been laid off or was on holidays declared under any law for the time being in force to be holidays with wages during the period of twelve months immediately preceding the date of her expected delivery shall be taken into account.

(3) The maximum period for which any woman shall be entitled to maternity benefit shall be twelve weeks which not more than six weeks shall precede the date of her expected delivery.

**********

**********”

13. The object and reasons as set out in Govt. of India Gazette, Part II, Section 2, dated 6-12-1960 (p-817), provide as under:

“This clause entitles a woman to receive maternity benefit at the rate of her average daily wage subject to a minimum of seventy-five naye paise per day for a maximum period of 12 weeks, including six weeks following the day of her delivery. The qualifying condition is employment for 240 days in the 12 months immediately preceding the expected date of delivery, but there is no such restriction as to entitlement in the case of an immigrant woman who is pregnant when she first arrives in Assam.”

14. With regard to the period of 240 days, the Select Committee remarked as under:

“The Committee are of the view that the qualifying condition of employment for a period of 240 days during the 12 months immediately preceding the expected date of delivery to entitle a worker to maternity benefit is too rigorous and the period should be reduced to 160 actual working days inclusive of the period of ‘lay-off’, if any.”

15. Section 5-A provides that if the Employees’ State Insurance Act, 1948 is applied or becomes applicable to the establishment where a woman is employed, such woman shall continue to be entitled to receive the maternity benefits under this Act so long as she does not become qualified to claim maternity benefits under Section 50 of that Act.

16. It may be stated that Section 50 of the Employees State Insurance Act, 1948 provides as under:

“Maternity benefit – The qualification of an insured woman to claim maternity benefit, the conditions subject to which such benefit may be given, the rates and period thereof shall be such as may be prescribed by the Central Government.”

17. Section 5-B of the Maternity Act speaks of payment of maternity benefit in certain cases. Section 6 provides notice of claim for maternity benefit and payment thereof. Section 8 provides that every woman entitled to maternity benefit under this Act shall also be entitled to receive her employer a medical bonus of 250 rupees, if no pre-natal confinement or post-natal care is provided by the employer free of charge.

18. Section 9 contemplates leave for miscarriage or medical termination of pregnancy. Section 9-A contemplates leave for tubectomy operation whereas Section 10 provides for leave for illness arising out of pregnancy, delivery, premature birth of a child or miscarirage. Section 11 provides as under:

“11. Nursing breaks – Every woman delivered of a child who returns to duty after such delivery shall, in addition to the interval for rest allowed to her, be allowed in the course of her daily two breaks of the prescribed duration for nursing the child until the child attains the age of fifteen months.”

19. Section 12, which contains a very significant prohibition in regard to the service of a woman employee, provides as under:

“12. Dismissal during absence or pregnancy – (1) When a woman absents herself from work in accordance with the provisions of this Act, it shall be unlawful for her employer to discharge or dismiss her during or on account of such absence or to give notice of discharge or dismissal on such a day that the notice will expire during such absence, or to vary to her disadvantage any of the conditions of her service.

(2) (a) The discharge or dismissal of a woman at any time during her pregnancy, if the woman but for such discharge or dismissal would have been entitled to maternity benefit or medical bonus referred to in section 8, shall not have the effect of depriving her of the maternity benefit or medical bonus.

Provided that where the dismissal is for any prescribed gross misconduct, the employer may, by order in writing communicated to the woman, deprive her of the maternity benefit or medical bonus or both.

(b) Any woman deprived of maternity benefit or medical bonus, or both, or discharged or dismissed during or on account of her absence from work in accordance with the provisions of this Act, may, within sixty days from the date on which order of such deprivation or discharge or dismissal is communicated to her, appeal to such authority as may be prescribed, and the decision of that authority on such appeal, whether the woman should or should not be deprived of maternity benefit or medical bonus, or both, or discharged or dismissal shall be final.

(c) Nothing contained in this sub-section shall affect the provisions contained in sub-section (1).”

20. This section prohibits dismissal of a woman employee during or on account of her absence on maternity leave. It ensures that the conditions of her service would not be varied to her disadvantage during her absence.

21. Contravention of the provisions of this Act has been made an offence under Section 21 of the Act which provides as under:

“21. Penalty for contravention of Act by employer – (1) If any employer fails to pay any amount of maternity benefit to a woman entitled under this Act or discharge or dismisses such woman during or on account of her absence from work in accordance with the provisions of this Act, he shall be punishable with imprisonment which shall not be less than three months but which may extend to one year and with fine which shall not be less than two thousand rupees but which may extend to five thousand rupees:

Provided that the Court may, for sufficient reasons to be recorded in writing, impose a sentence of imprisonment for a lessor term or fine only in lieu of imprisonment.

(2) If any employee contravenes the provisions of this Act or the rules made thereunder, he shall, if no other penalty is elsewhere provided by or under this Act for such contravention, be punishable with imprisonment which may extend to one year, or with fine which may extend to five thousand rupees, or with both:Provided that where the contravention is of any provision regarding maternity benefit or regarding payment of any other amount and such maternity benefit or amount has not already been recovered, the Court shall, in addition, recover such maternity benefit or amount as if it were a fine and pay the same to the person entitled thereto.”

22. Cognizance of offences has been provided for in Section 23, which is reproduced under:

“23. Cognizance of offences – (1) Any aggrieved woman, an office-bearer of a trade union registered under the Trade Unions Act, 1926 of which such woman is a member or a voluntary organisation registered under the Societies Registration Act, 1860 or an Inspector, may file a complaint regarding the commission of an offence under this Act in any Court of competent jurisdiction and no such complaint shall be filed after the expiry of one year from the date on which the office is alleged to have been committed.

(2) No Court inferior to that of a Metropolitan Magistrate or a Magistrate of the first class shall try any offence under this Act.”

23. Section 27 deals with the effect of laws and agreements inconsistent with this Act. Sub-section (1) provides that the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law or in the terms of any award, agreement or contract of service. Sub-section (2) of this section, however, provides that it will be open to a woman to enter into an agreement with her employer for granting her rights or privileges in respect of any matter which are more favourable to her than those she would be entitled to under this Act.

24. The provisions of the Act which have been set out above would indicate that they are wholly in consonance with the Directive Principles of State Policy, as set out in Article 39 and in other Articles, specially Article 42. A woman employee, at the time of advanced pregnancy cannot be compelled to undertake hard labour as it would be detrimental to her health and also to the health of the foetus. It is for this reason that it is provided in the Act that she would be entitled to maternity leave for certain periods prior to and after delivery. We have scanned the different provisions of the Act, but we do not find anything contained in the Act which entitles only regular women employees to the benefit of maternity leave and not to those who are engaged on casual basis or on muster roll on daily wage basis.

25. The Industrial Tribunal, which has given an award in favour of the respondents, has noticed that women employees have been engaged by the Corporation on muster roll, that is to say, on daily wage basis for doing various of works in projects like construction of buildings, digging of trenches, making of roads, etc., but have been denied the benefit of maternity leave. The Tribunal has found that though the women employees were on muster roll and had been working for the Corporation for more than 10 years, they were not regularised. The Tribunal, however, came to the conclusion that the provisions of the Maternity Benefit Act had not been applied to the Corporation and, therefore, it felt that there was a lacuna in the Act. It further felt that having regard to the activities of the Corporation, which had employed more than a thousand women employees, it should have been brought within the purview of the Act so that the maternity benefits contemplated by the Act could be extended to the women employees of the Corporation. It felt that this lacuna could be removed by the State Govt. by issuing the necessary notification under the Proviso to Section 2 of the Maternity Act. This Proviso lays down as under:

“Provided that the State Government may, with the approval of the Central Government, after giving not less than two month’s notice of its intention of so doing, by notification in the Official Gazette, declare that all or any of the provisions of this Act shall apply also to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise.”

26. It consequently issued a direction to the management of the Municipal Corporation, Delhi to extend the benefits of Maternity Benefit Act, 1961 to such muster roll female employees who were in continuous service of the management for three years or more and who fulfilled the conditions set out in section 5 of the Act.

27. We appreciate the efforts of the Industrial Tribunal in issuing the above directions so as to provide the benefit of the Act to the muster roll women employees of the Corporation. This direction is fully in consonance with the reference made to the Industrial Tribunal. The question referred for adjudication has already been reproduced in the earlier part of the judgment. It falls in two parts as under:

(i) Whether the female workers working on muster roll should be given any maternity benefit ?

(ii) If so, what directions are necessary in this regard.

28. The award made by the Industrial Tribunal completely answers the question in both the respects.

29. Learned counsel for the Corporation contended that since the provisions of the Act have not been applied to the Corporation, such a direction could not have been issued by the Tribunal. This is a narrow way of looking at the problem which essentially is human in nature and anyone acquainted with the working of the Constitution, which aims at providing social and economic justice to the citizens of this country, would outrightly reject the contention. The relevance and significance of the doctrine of social justice has, times out of number, been emphasised by this Court in several decisions. In Messrs Crown Aluminium Works v. Their Workmen, (1958) SCR 651 , this Court observed that the Constitution of India seeks to create a democratic, welfare State and secure social and economic justice to the citizens. In J. K. Cotton Spinning and Weaving Mills Co. Ltd. v. Badri Mali, (1964) 3 SCR 724 , Gajendragadkar, J., (as his Lordship then was), speaking for the Court, said (Para 19):

“Indeed the concept of social justice has now become such an integral part of industrial law that it would be idle for any party to suggest that industrial adjudication can or should ignore the claims of social justice in dealing with industrial disputes. The concept of social justice is not narrow, onesided, or pedantic, and is not confined to industrial adjudication alone. Its sweep is comprehensive. It is founded on the basic ideal of social-economic equality and its aim is to assist the removal of socio-economic disparities and inequalities; nevertheless, in dealing with industrial matters, it does not adopt a doctrinaire approach and refuses to yield blindly to abstract notions, but adopts a realistic and pragmatic approach.”

30. A just social order can be achieved only when inequalities are obliterated and everyone is provided what is legally due. When who constitute almost half of the segment of our society have to be honoured and treated with dignity at places where they work to earn their livelihood. Whatever be the nature of their duties, their avocation and the place where they work; they must be provided all the facilities to which they are entitled. To become a mother is the most natural phenomena in the life of a woman. Whatever is needed to facilitate the birth of child to a woman who is in service, the employer has to be considerate and sympathetic towards her and must realise the physical difficulties which a working woman would face in performing her duties at the work place while carrying a baby in the womb or while rearing up the child after birth. The Maternity Benefit Act, 1961 aims to provide all these facilities to a working woman in a dignified manner so that she may overcome the state of motherhood honourably, peaceably, undeterred by the fear of being victimised for forced absence during the pre or post-natal period.

31. Next it was contended that therefore the benefits contemplated by the Maternity Benefit Act, 1961 can be extended only to workwomen in an ‘industry’ and not to the muster roll women employees of the Municipal Corporation. This is too stale an argument to be heard. Learned counsel also forgets that Municipal Corporation was treated to be an ‘industry’ and, therefore, a reference was made to the Industrial Tribunal, which answered the reference against the Corporation, and it is this matter which is being agitated before us.

32. Now, it is to be remembered that the Municipal Corporations or Boards have already been held to be “industry” within the meaning of “Industrial Disputes Act”. In Budge Budge Municipality v. P. R. Mukherjee, (1953) 1 Lab LJ 195 (SC), it was observed that the Municipal activity would fall within the expression “undertaking” and as such would be an industry. The decision was followed in Baroda Borough Municipality v. Its Workmen, (1957) 1 Lab LJ 8 , in which the Court observed that those branches of work of the Municipalities which could be regarded as analogous to the carrying-on a trade or business, would be “industry” and the dispute between the Municipalities and their employees would be treated as an “industrial dispute”. This view was reiterated in the Corporation of the City of Nagpur v. Its Employees, (1960) 1 Lab LJ 523 . In this case, various Departments of the Municipality were considered and certain Departments including General Administration Department and Education Department were held to be covered within the meaning of “industry”. The Punjab and Haryana High Court in Municipal Committee, Bhiwani v. Padam Singh, 1973 Lab IC 1512, held that fire-brigade service, maintained by Municipal Committee, was an “industry”. But a contrary view was taken by the Bombay High Court in Administrator of the City of Nagpur Municipal Corporation v. Presiding Officer, Labour Court, Nagpur, 1976 Lab IC 107, which held that the fire-brigade service, maintained by the Municipal Corporation, was not an “industry”. We are not, in this case, attempting to resolve the conflict between the Punjab and Haryana High Court and the Bombay High Court but what we intend to emphasise is that this Court has already held some of the Departments of the Municipal Corporation to be an “industry”. The High Courts have also held the running of dispensary as also sanitary and conservancy activities to be an “industry”. (See Sirur Municipality v. Its Workmen, (1960) 2 Lab LJ 657; Municipal Council, Washim v. Manguji Zenduji Dhamane, 1978 Lab IC 881). The Andhra Pradesh High Court in Rajendranagar Municipality v. B. V. Perraju, 1995 Lab IC 2102, has held that storing and distribution of water was a systematic activity of the Corporation which would fall within the definition of “industry”.

33. Taking into consideration the enunciation of law as settled by this Court as also the High Courts in various decisions referred to above, the activity of the Delhi Municipal Corporation by which construction work is undertaken or roads are laid or repaired or trenches are dug would fall within the definition of “industry”. The workmen or, for that matter, those employed on muster roll for carrying on these activities would, therefore, be “workmen” and the dispute between them and the Corporation would have to be tackled as an industrial dispute in the light of various statutory provisions of the Industrial Law, one of which is the Maternity Benefit Act, 1961. This is the domestic scenario. Internationally, the scenario is not different.

34. Delhi is the capital of India. No other City or Corporation would be more conscious than the City of Delhi that India is a signatory to various International covenants and treaties. The Universal Declaration of Human Rights, adopted by the United Nations on 10th of December, 1948, set in motion the universal thinking that human rights are supreme and ought to be preserved at all costs. This was followed by a series of Conventions. On 18th of December, 1979, the United Nations adopted the “Convention on the Elimination of all forms of discrimination against women”. Article 11 of this Convention provides as under:-

“Article 11

1. States Parties shall take all appropriate measures to eliminate discrimination against women in the field of employment in order to ensure, on a basis of equality of men and women, the same rights, in particular;

(a) The right to work as an inalienable right of all human beings;

(b) The right to the same employment opportunities, including the application of the same criteria for selection in matters of employment;

(c) The right to free choice of profession and employment, the right to promotion, job security and all benefits and conditions of service and the right to receive vocational training and retraining, including apprenticeships, advanced vocational training and recurrent training;

(d) The right to equal remuneration, including benefits, and to equal treatment in respect of work of equal value, as well as equality of treatment in the evaluation of the quality of work;

(e) The right to social security, particularly in cases of retirement, unemployment, sickness, invalidity and old age and other incapacity to work, as well as the right to paid leave.

(f) The right to protection of health and to satisfy in working conditions, including the safeguarding of the function of reproduction.

2. In order to prevent discrimination against women on the grounds of marriage or maternity and to ensure their effective right to work, States Parties shall take appropriate measures:

(a) To prohibit, subject to the imposition of sanctions, dismissal on the grounds of pregnancy or of maternity leave and discrimination in dismissals on the basis of marital status;

(b) To introduce maternity leave with pay or with comparable social benefits without loss of former employment, seniority or social allowances;

(c) To encourage the provision of the necessary supporting social services to enable parents to combine family obligations with work responsibilities and participation in public life, in particular through promoting the establishment and development of a network of child-care facilities;

(d) To provide special protection to women during pregnancy in types of work proved to be harmful to them.

3. Protective legislation relating to matters covered in this article shall be reviewed periodically in the light of scientific and technological knowledge and shall be revised, repealed or extended as necessary.”.

(Emphasis supplied)

35. These principles which are contained in Article 11, reproduced above, have to be read into the contract of service between Municipal Corporation of Delhi and the women employees (muster roll); and so read these employees immediately become entitled to all the benefits conceived under the Maternity Benefit Act, 1961. We conclude our discussion by providing that the direction issued by the Industrial Tribunal shall be complied with by the Municipal Corporation of Delhi by approaching the State Government as also the Central Government for issuing necessary Notification under the Proviso to Sub-section (1) of Section 2 of the Maternity Benefit Act, 1961, if it has not already been issued. In the meantime, the benefits under the Act shall be provided to the women (muster roll) employees of the Corporation who have been working with them on daily wages.

36. For the reasons stated above, the Special Leave Petition is dismissed.

DATE:-08-03-2000

Functions of the Chief Labour Commissioner (Central) in India

Keywords:- Labour Commissioner

Indian Law Encyclopedia

Chief Labour Commissioner (Central) CLC(C) is entrusted with the following functions.

1.Prevention and settlement of industrial disputes through conciliation/mediation.
2.Enforcement of Labour Laws and Rules made there under in Central Sphere.
3.Quasi-Judicial functions
4.Verification of Trade Union membership
5.Miscellaneous Functions

  1. Prevention And Settlement Of Industrial Disputes

The CIRM ensures harmonious industrial relations in the central sphere establishments through :
A) Intervention, mediation and conciliation in industrial disputes with a view to bring about settlements of disputes.
B) Implementation of settlements and awards
C) Interventions in situations of threatened strikes and lockouts with a view to avert them.

2.Enforcement of Labour Laws and Rules made there under

Enforcement of labour laws and rules made there under is an important function of the organisation of CLC ( C). Major establishments covered under the Central sphere include Railways, Mines, Banks, Insurance, Major Ports, Cantonment Boards, ONGC, Indian Oil, BPCL, HPCL, FCI. Under the Industrial Employment (Standing Order) Act, besides the above establishments all central public sector undertakings are covered and under Payment of Gratuity Act besides the above establishment all central public sector undertakings and establishments having branches in more than one state fall in Central Sphere.

3.Names of the Enactments Enforced in Central Sphere

  1. Industrial disputes Act, 1947
    2.Payment of Wages Act, 1936 & Rules made there under for Mines, Railways, Air Transport Services and Docks Wharves and Jetties in major ports
    3. Minimum Wages Act, 1948
    4.Contract Labour (Regulation & Abolition) Act, 1970
    5.Equal Remuneration Act, 1976
    6.Inter State Migrant Workmen (RE&CS) Act, 1979
    7.Payments of Bonus Act, 1965
    8.Child Labour (P&R) Act, 1986
    9.Payment of Gratuity Act, 1972
    10.Labour Laws (Exemption from Furnishing returns and Maintaining Registers by Certain Establishments) Act, 1988
    11.Building & other Construction Workers (RE&CS) Act, 1996
    12.Chapter VI-A of Indian Railway Act, 1989 Hours of Employment Regulations for Railway Employees
    13.Industrial Employment (Standing Orders) Act, 1946
    14. Maternity Benefit Act, 1961 (Mines & Circus Rules 1963)
    15. MES Contractors Workers Regulations

4.Quasi-Judicial functions

The officers of CIRM perform quasi-judicial functions under various labour enactments as shown below: –

CLC (C) Director General (Inspection) under BOCW (RE&CS) ACT (now the power is delegated to one of the Dy.CLCs(C) ) & Appellate Authority under IE (SO) Act & Right to Information Act, 2005
Dy. CLC(C) Appellate Authority under IE (SO) Act. Authority under Rule 25(2) (v)(a) and (b) of CL (R&A) Central Rules 1971.
RLC(C) Authority under M.W. Act. RLC?s(C) who are not heading a region have been declared as Registering and Licensing Officer under CL(R&A) Act and Registering officer under BOCW Act, Controlling Authority under P.G. Act and Authority under Equal Remuneration Act, Appellate Authority under CL(R&A) Act, P.G. Act, E.R. Act, Certifying officer under IE (SO) Act. Supervisor of Railway Labour under HOER.
ALC(C) Controlling Authority under P.G. Act., Authority under E.R. Act, Registering & Licensing Officer under CL(R&A) Act. Registering Officer under BOCW (RE&CS) Act & ISMW Act.

 5.Verification of Trade Union membership

 The officers of CIRM are required to conduct verification of trade union membership as under:-

a) Verification of Trade Union membership for recognition under Code of Discipline as directed by Ministry of Labour and Employment or by order of High Court, Supreme Court. b) Statutory verification for appointment of workmen Director in Nationalised and State Banks under i) State Bank of India and its subsidiaries (Appointment of Employee Directors) Rule, 1947. ii) Nationalized Banks (Management and Miscellaneous Provisions) Scheme, 1980. c) General verification of Central Trade Unions Organisation by checking records and sampling.

6  Functions under Right to Information Act, 2005.

Right to Information Act was introduced in October, 2005. All the RLCs(C) in the field have been declared as CPIO and Dy. CLCs(C) in the field have been declared as Appellate Authority. Dy CLC(C) in Headquarters has been declared as CPIO and Chief Labour Commissioner (C) is the Appellate Authority for Hqrs w.e.f. 17th January, 2007. During the year 2005-06 total no. of cases disposed off were 56 under the Right to Information Act, 2005.

7 Miscellaneous Functions

In addition to the above, CIRM performs many miscellaneous functions described below: In addition to the above, CIRM performs many miscellaneous functions described below:

1. Conducting periodic meetings of Minimum Wages Advisory Board and notifying V.D.A. every six months as per A.I.C.P.I. number.
2. Defending M.O.L. in Writ Petitions filed against Ministry in different High Courts
3. Investigations of Complaints.
4. Assisting Central Advisory Contract Labour Board as convenors of different sub-committees to examine the question of abolition of contract labour system in different employments.
5. Assisting Ministry in preparation of different reports required to be submitted to ILO.
6. Supplying information to Ministry for replying Parliament Questions on statutes enforced by CLC organization.
7. Advising M.O.L&E in Conflict situation like strikes of All India Nature and other Labour matters.
8. Assisting Ministry in interpretation/clarification of complicated legal issues raised by other employing Ministries, State Governments, employers and workmen.
9. Attending to Parliamentary Committees and other important delegations as per advice of the Ministry.
10. Keeping Liaison with State Government Labour Departments for collection of information as per directions of Ministry.
11. Assisting M.O.L&E in training of C.L.S. officers. Monitoring the work of and providing guidance to ALWCs, DLWCs, LWCs posted in the industrial and other establishments under the control of the Central Government.

A Dealing subjects under jurisdiction of CLC(C)    
  1. Industrial Dispute (IDs ) and Conciliation in matter of Major Ports, Railways Defence Undertakings, Food Corporation of India, Post & Telegraph, CPWD, Banks, Insurance, Air Transport Corporations, Coal Mines and Non Coal Mines including oil fields and controlled industries i.e. Oil Refinery, Atomic, Minerals, Mines and Projects under Industrial Dispute Act 1947.
  2. Implementations of Settlements and Awards on industries mentioned as (1) above.
  3. Important Strikes and Lockout in the industries mentioned as (1) above.
  4. Complaints/ Grievances received from any union or individual pertaining to industries mentioned as (1) above.
  5. Parliament Questions/ Writ Petitions on industries mentioned as (1) above.
  6. FOCs & offer regarding above matters referred by Ministry of Labour & Employment for opinion in respect of Industries mentioned as (1) above.
  7. Any other matter concerning to Coal Mines and Non Coal Mines not specifically assigned to any other Section.
  8. Submission of weekly Review of Labour Situation.
  9. Monthly report for Cabinet on Labour Situation/ Monthly Statistical report to Cabinet / Weekly Statement regarding important strikes/ Lockout continuing for more than seven days in central sphere. Matters relates to State Sphere.
  10. Complaints/ Grievance is received from any Union or Individual pertaining to industries mentioned as (1) above.
  11. FOCs referred by Ministry of Labour for opinion in respect of Industries mentioned as (1) above.
  12. Any other matter concerning to Coal Mines and Non Coal Mines mot specifically assigned any other

National Kamgar Union Vs. Kran Rader Pvt. Ltd. Ors[SC 2018 JANUARY]

KEYWORDS:- INDUSTRIAL DISPUTE-ARTICLE 227- ARTICLE 136-

Capture

  • It is the duty of the High Court while exercising the supervisory jurisdiction to see that the subordinate Court has exercised its powers in accordance with law and did not commit any illegality or perversity in reaching to its conclusion. While recording a finding, if it is noticed by the High Court that the subordinate Court has failed to take into consideration the material evidence or recorded a finding without there being any evidence, then the High Court would be entitled to interfere in such finding in exercise of its supervisory jurisdiction under Article 227 of the Constitution. Such is the case here.
  • Once the Courts record a finding on such question, be that of concurrence or reversal, the finding is usually held binding on this Court while hearing the appeal under Article 136 of the Constitution.  It is only when such finding is found to be against any provision of law or evidence or is found to be wholly perverse to the extent that no average judicial person could ever record such finding, it would not be held binding on the superior Court.

  • This Court has, however, cautioned that it must be remembered that even if the question raised is one of the mixed question of fact and law, this Court would not readily interfere with the conclusion of the Tribunal unless it is satisfied that said conclusion is manifestly or obviously erroneous.

DATE:-January 5, 2018

ACTS:-Trade Union Act, 1926,Section 25 FFA of the Industrial Disputes Act, 1947 , Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971,

SUPREME COURT OF INDIA

National Kamgar Union Vs. Kran Rader Pvt. Ltd. Ors.

[Civil Appeal No.20 of 2018 arising out of S.L.P. (C) No.18413 of 2015]

Abhay Manohar Sapre, J.

1. Leave granted.

2. This appeal is filed by the appellant-Trade Union against the final judgment and order dated 12.09.2014 passed by the High Court of Judicature at Bombay in Writ Petition No.5241 of 2003 whereby the High Court allowed the writ petition filed by respondent No.1-Kran Rader Pvt. Ltd. and set aside the award dated 08.04.2003 passed by the Industrial Court, Pune in a Complaint (ULP) No.544 of 1990 and, in consequence, dismissed the complaint filed by the appellant herein.

3. In order to appreciate the short issue involved in the appeal, it is necessary to set out few relevant facts infra.

4. The appellant is the Trade Union registered under the Trade Union Act, 1926 having several members working in Factories. Respondent No.1 owned a factory (manufacturing unit) at Pune. This Unit was originally owned by respondent Nos. 2 and 3 who, in turn, sold it to respondent No.4 in 1991 and then it was owned by respondent No.1. The Unit was engaged in the manufacture of several components like Traction Gears for supply to Railways, forging for oil industries and other manufacturing units etc. The members of the appellant-Union were working in respondent No.1’s factory at all relevant time.

5. In 1990, respondent No.1 suffered business loss in running the said manufacturing unit and, therefore, decided to close down the said unit permanently. With that end in view, respondent No.1 served a notice of closure to the State Government (Maharashtra) under Section 25 FFA of the Industrial Disputes Act, 1947 (in short, “ID Act”) on 29.08.1990 with a copy to the appellant-Union expressing therein their intention to close the operation of the Unit on expiry of 60 days with effect from 29.10.1990.

6. The appellant-Union, felt aggrieved of the closure notice issued by respondent No.1, filed complaint against respondent No.1 under Section 28 read with Items 9 and 10 of the Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (hereinafter referred to as “the Act”) in the Industrial Court at Pune in October 1990 being Complaint(ULP) No.544/1990.

7. In substance, the grievance of the appellant in their complaint was that since respondent No.1 had employed more than 100 workers on an average per working day for preceding 12 months in their manufacturing unit, the provisions of Chapter VB (Section 25-K) of the ID Act and, in turn, all the relevant provisions contained therein were applicable to respondent No.1. It was alleged that due to this reason, it was obligatory upon respondent No.1 to have ensured compliance of all the relevant provisions applicable for closure of the Unit.

It was alleged that since admittedly the relevant provisions applicable to closure were not complied with by respondent No.1, a case was made out under the ID Act read with the Act to seek a declaration that the intended closure declared by respondent No.1, vide their notice dated 29.08.1990, is illegal under the ID Act read with the Act with a further grant of all consequential reliefs to each worker arising out of grant of such declaration sought by the appellant in the Complaint in their favour.

8. Respondent No.1 (employer) filed a reply and denied therein the allegations made by the appellant-Union in their complaint. According to Respondent No.1 they never employed more than 100 workers in their Unit so as to attract the rigor of Chapter VB and other related provisions of the ID Act to give effect to the closure. In other words, according to respondent No.1, the strength of workers working in their Unit was always less than 100 in number, therefore, the provisions of Chapter VB and the related provisions of the I.D. Act had no application to respondent No.1. It was, therefore, contended that the decision taken by respondent No.1 to close the Unit with effect from 29.10.1990 was legal, proper and in accordance with law and hence could not be faulted with.

9. The parties adduced evidence (documentary/oral) in support of their respective 6 contentions. The Industrial Court, by its award dated 08.04.2003, allowed the appellant’s complaint. It was held that respondent No.1 had employed 115 workers at all relevant time in their Unit, therefore, the provisions of Chapter VB of the ID Act were required to be followed while effecting the closure of the Unit. It was held that since the relevant provisions were not complied with by respondent No.1, the closure in question was bad in law entitling the members of the appellant-Union to claim all consequential benefits arising therefrom as if there was no closure of the Unit.

10. Respondent No.1 felt aggrieved and filed a writ petition before the Bombay High Court. By impugned judgment, the Single Judge allowed the writ petition and while setting aside of the award of the Industrial Court dismissed the appellant’s complaint. The High Court held that the total strength of the workers working at all relevant time in respondent No.1’s Unit was 99 and not 115 as 7 held by the Industrial Court. It was held that due to this reason, it was not necessary for respondent No.1 to ensure compliance of the provisions of Chapter VB of the ID Act while declaring the closure of their Unit.

11. The appellant-Union felt aggrieved and filed the present appeal by way of special leave in this Court.

12. Heard Mr. B.H. Marlapalle, learned senior counsel for appellant and Mr. D.J. Bhanage and Mr. Sanjay R. Hegde, learned senior counsel for respondents.

13. Having heard the learned counsel for the parties at length and on perusal of the record of the case, we find no good ground to interfere in the impugned judgment of the High Court. In other words, the reasoning assigned by the High Court appears to be just and reasonable calling no interference for the reasons mentioned hereinbelow.

14. The main question, which arises for consideration in this appeal, is only one, viz., how many workers were working in the Unit of respondent No.1 at all relevant time, whether the strength of the workers was above 100 or below 100. In other words, the question, which arises for consideration, is whether the provisions of Section 25-K of Chapter VB of the ID Act were applicable to respondent No. 1-Unit at the relevant time.

15. If the strength of the workers was above 100 at the relevant time, in that event, the provisions of Section 25-K were applicable to respondent No.1 whereas if the strength was below 100, in such event, the provisions of Section 25K had no application. In the case of former, the appellant-Union succeeds and in the case of later, respondent No.1 succeeds.

16. As mentioned above, the Industrial Court held that 115 workers were found working at the relevant time whereas the High Court held that 99  workers were found working in the Unit of respondent No.1 at the relevant time.

17. There can be no dispute to the proposition that the question as to what is the total strength of the workers employed in the Unit or, in other words, how many workers were working in a particular unit is essentially a question of fact. Such question is required to be decided by the Courts on appreciation of evidence adduced by the parties.

18. Once the Courts record a finding on such question, be that of concurrence or reversal, the finding is usually held binding on this Court while hearing the appeal under Article 136 of the Constitution.

19. It is only when such finding is found to be against any provision of law or evidence or is found to be wholly perverse to the extent that no average judicial person could ever record such finding, it would not be held binding on the superior Court.

20. When the question arises as to what is the status of a “workman”, this Court has held that it has to be inferred as a matter of law from facts found and if the question involved is one of drawing a legal inference as to the status of a party from facts found, it is not a pure question of fact. It is held that if the inference drawn by the Tribunal in regard to the status of the workman involved the application of certain legal tests, it necessarily becomes a mixed question of fact and law.

21. This Court has, however, cautioned that it must be remembered that even if the question raised is one of the mixed question of fact and law, this Court would not readily interfere with the conclusion of the Tribunal unless it is satisfied that said conclusion is manifestly or obviously erroneous. (See AIR 1967 SC 428)

22. With a view to examine the question from both angels which is taken note of above, we perused the evidence and also called upon the parties to file additional evidence before this Court and it was filed.

23. Having perused the record, we are not inclined to interfere in the finding recorded by the High Court though of reversal. In other words, we are inclined to agree with the reasoning of the High Court and accordingly hold that the total strength of workers employed at the relevant time in respondent No.1’s Unit was 99 and that the status of disputed employees could not be conclusively proved to be that of a “workman” for the reasons stated infra.

24. First, the High Court assigned the reasons as to why the finding of the Industrial Court holding the strength of workers as 115 is not factually and legally sustainable. Second, the reasons assigned are neither arbitrary nor against the record and nor perverse to that event so as to call for any interference by this Court. Third, in these circumstances, this Court would be slow to appreciate the entire evidence afresh on this question in this appeal and lastly, such being a question of fact or a mixed question of law and fact, it is binding on this Court.

25. Inspite of this, we have gone through the evidence with a view to find out as to whether the High Court has committed any jurisdictional error in reaching to its conclusion. In our view it is not. We notice that the Industrial Court held that there was no dispute regarding the status of 79 workers. The dispute of status of an employee was confined only to 36 employees, namely, whether their status was that of the “worker” or “supervisor”. The Industrial Court, however, held that the status of all the 36 employees was that of “worker” and accordingly recorded a finding that 79+36 = 115 employees were working as “worker” in the Unit at the relevant time.

26. The High Court, however, while reversing the aforementioned finding of the Industrial Court came 13 to a conclusion that out of 36 employees, only 20 employees could be regarded as “worker” and, therefore, the total strength of workers at all relevant time was 79+20 = 99. In our opinion, the High Court rightly held that there was no cogent evidence adduced by the appellant to prove the status of remaining 16 employees as to whether they also could be regarded as “worker” employed in the Unit and, therefore, it was not possible to hold that the total strength of the workers at the relevant time was more than 100, i.e., 115.

27. We, while concurring with the reasoning of the High Court, also find that since the Industrial Court did not elaborately discuss the issue regarding the status of employees while holding the strength of workers at 115 except clubbing 36(20+16) with 79, the High Court was right in going into the evidence to the extent permissible and reversed the finding of Industrial Court. In our view, the Industrial Court should have examined the status of each such disputed employee independently for holding whether they could also be regarded as “worker”. It was, however, not done so.

28. Mr. B.H. Marlapalle, learned senior counsel for the appellant-Union, strenuously argued with the help of the entire evidence and the relevant provisions of the Factories Act, 1948 and the Payment of Wages Act including the statutory forms prescribed in the two Acts for filing the details of workers working in the Unit that the finding of the Industrial Court appears to be more plausible and reasonable as compared to the finding recorded by the High Court on this question and hence the finding of the Industrial Court deserves to be restored.

29. We cannot accept this submission of learned counsel for the appellant in the light of what we have held above. In our view, the appellant, in order to prove the status of 16 employees, did not adduce any cogent evidence as against the evidence of the respondent No.1. It is, therefore, not possible for this Court to hold that the finding of the High Court is wholly arbitrary or illegal or against the evidence. We do not wish to go into this factual question any more.

30. Learned counsel for the appellant then urged that the High Court has committed a jurisdictional error when it went on to re-appreciate the evidence and then reversed the finding of the Industrial Court under Article 227 of the Constitution. In our view, it does not appear to be so.

31. It is the duty of the High Court while exercising the supervisory jurisdiction to see that the subordinate Court has exercised its powers in accordance with law and did not commit any illegality or perversity in reaching to its conclusion.

32. While recording a finding, if it is noticed by the High Court that the subordinate Court has failed to take into consideration the material evidence or recorded a finding without there being any evidence, then the High Court would be entitled to interfere in such finding in exercise of its supervisory jurisdiction under Article 227 of the Constitution. Such is the case here.

33. In the light of foregoing discussion, we do not consider proper to disturb the findings recorded by the High Court which are more plausible and reasonable rather than that of the Industrial Court.

34. In view of the foregoing discussion, we also hold that respondent No.1 had employed 99 workers in their manufacturing Unit at the time of declaring the closure of the Unit in 1990. Since the strength of workers was below 100, it was not necessary for respondent No.1 to ensure compliance of Chapter VB. In other words, in such circumstances, the provisions of Section 25-K had no application to respondent No.1.

35. This takes us to examine the next question as to how much compensation and under which heads the workers are entitled to receive from respondent No.1 (Company).

36. Learned counsel for respondent No.1, however, stated that out of total workers, most of the workers have settled their claims by accepting the compensation offered by respondent No.1 voluntarily. Learned counsel stated that the compensation paid to each worker consisted of

(i) amount of Gratuity payable under the Payment of Gratuity Act,

(ii) closure compensation payable under the I.D. Act, and over and above these two statutory payments of compensation, the respondent No.1 also paid 30 days’ wages for each completed year of service as ex gratia payment to each worker. It was also stated that now hardly 16 workers or so remain unpaid because they did not accept the compensation when offered to them and preferred to prosecute the present litigation.

37. Learned counsel for respondent No.1 stated that the total compensation paid to every worker in 1990-1991 varies between Rs.1 lakh to Rs.2 lakhs.

38. Taking into consideration the aforementioned background facts and circumstances of the case, we consider it just and proper to award in lump sum a compensation of Rs.2,50,000/- (Rs.Two Lakhs and Fifty Thousand) to each worker who did not accept the compensation.

39. Let Rs.2,50,000/- (Rs.Two Lakhs and Fifty Thousand) be paid to each such worker after making proper verification. If any worker is not available for any reason, the amount payable to such worker be paid to his legal representatives or nearest relatives, as the case may be, after making proper verification.

40. Respondent No.1 will, accordingly, deposit the entire compensation payable to all such workers with details in the Industrial Court, Pune. A notice will then be served to each worker or his legal 19 representatives, as the case may be, by the Industrial Court to enable the workers to withdraw the amount from the Industrial Court.

41. The amount will be paid to every worker or his nominee as the case may be by the demand draft issued in his/her name or in the name of legal representatives, as the case may be. It will be duly deposited in his/her Bank account to enable him/her to withdraw the same.

42. The appellant would submit necessary details of each such worker before the Industrial Court. The Industrial Court would ensure compliance of the directions of this Court and complete all formalities within three months from the date of this order.

43. We make it clear that this order is applicable only to those workers who did not accept the compensation from respondent No.1.

44. In other words, those workers who already accepted the compensation will not be entitled to get any benefit of this order.

45. With these directions, the appeal stands disposed of finally.

 [R.K. AGRAWAL]

 [ABHAY MANOHAR SAPRE]

New Delhi;

January 5, 2018

Bidi, Bidi Leaves and Tobacco Merchants’ Association, Gondia Appellant Versus State of Bombay[SC 1961 November]

Keywords :- Doctrine of implied Power , Doctrine of Enabling Act

sc


AIR 1962 SC 486 : (1962) 1 Suppl. SCR 381

(SUPREME COURT OF INDIA)

Bidi, Bidi Leaves and Tobacco Merchants’ Association, Gondia Appellant
Versus
State of Bombay Respondent

(Before : P. B. Gajendragadkar, A. K. Sarkar, K. N. Wanchoo, K. C. Das Gupta And N. Rajagopala Ayyangar, JJ.)

Civil Appeals Nos. 415 to 418 of 1960,

Decided on : 15-11-1961.

Minimum Wages Act, 1948—Sections 2, 3, 5, 20, 21—Fixation of minimum wages.

Counsel for the Parties:

Mr. A. V. Viswanatha Sastri, Senior Advocate (Mr. S. P. Varma, Advocate and M/s. S. N. Andley, Rameshwar Nath and P. L. Vohra, Advocates of M/s. Rajinder Narain and Co. with him), for Appellants (In C. A. No. 415 of 60) and Respondents (Nos. 1 to 3 in C. A. No. 416 of 60); M/s. A. S. Bobde and Ganpat Raj, Advocates, for Appellants (In C. A. No. 417 of 60) and Respondents (In C. A. No. 418 of 60)

M/s. H. R. Khanna and R. H. Dhebar, Advocates, for Appellant (In C. As. Nos. 416 and 418 of 60) and Respondent No. 1 (In C. As. Nos. 415 and 417 of 60); Mr. A. G. Ratnaparkhi, Advocate for Respondent No. 3 (In C. A. No. 415 of 60).

Judgment

Gajendragadkar, JThese four appeals consist of two sets of cross appeals each and they arise from two petitions filed in the High Court of Bombay at Nagpur challenging the validity of the notification dated June 11, 1958, issued by the State of Bombay, now represented by the State of Maharashtra, under S. 5 of the Minimum wages Act 11 of 1948 (hereafter called the Act). The petitioners in Special Civil Application No. 205 of 1951 are the Bidi, Bidi Leaves and Tobacco Merchants’ Association, Gondia and two others whereas the petitioners in Special Civil Application No. 214 of 1958 are Haji Latif Ghani Kachhi and five others. The impugned notification consists of seven clauses. By the majority decision of the High Court cls. 1 to 5 and the first part of cl. 6 are held to be intra vires, whereas the latter part of cl. 6 and cl. 7 as well as the explanation added to it are held to be ultra vires. The first part of the finding is challenged by the petitioners in the two writ petitions by their Civil Appeals. Nos. 415 and 417 respectively, while the latter part of the finding is challenged by the State of Maharashtra in its Civil Appeals Nos. 416 and 418 respectively. Thus, Civil Appeals Nos. 415 and 416 are cross appeals and Civil Appeals Nos. 417 and 418 are cross appeals. These appeals have been brought to this Court with a certificate granted by the High Court under Art. 132 (1) of the Constitution. As will presently appear the only point which calls for our decision in these appeals is one relating to the validity of the impugned notification; and so the certificate might well have been given under Art. 133 (1) (c) and not under Art. 132 (1) because the case does not involve a substantial question of law as to the interpretation of the Constitution. For convenience we will refer to the petitioners in the writ petitions as petitioners and the State of Maharashtra as the respondent in these appeals.

2. The petitioners are bidi manufacturers in different parts of the Vidarbha region and they employ a large number of persons for the purpose of making bidis for them. It appears that the Government of the State of Madhya Pradesh within whose jurisdiction Vidarbha was then situated had fixed the minimum rates of wages in respect of employment in tobacco (including bidi making) manufactories by issuing a notification on January 11, 1951. This notification had purported to fix the minimum rates of wages per 1000 bidis by reference to different localities in the State. The rates thus fixed were inclusive of dearness allowance or compensatory cost of living allowance and they varied from place to place as specified in columns 2 to 4 of the notification respectively. An Advisory Board was thereafter constituted by the said State in exercise of the powers conferred on it by S. 7 of the Act. Subsequently, in 1956 the said minimum rates of wages were revised by a notification issued on February 23, 1956. As a result of the State Re-organisation Act 1956 (37 of 1956) the Vidarbha region became part of the State of Bombay. After Vidarbha thus became a part of the State of Bombay the Government of Bombay notified that the Advisory Board appointed by the said Government under S. 7 shall be the Advisory Board for Vidarbha. This notification was issued on November 1, 1956. The Government of Bombay then issued a notification publishing the draft of the notification which was proposed to be issued under S. 5, sub-s. (2) read with cl. (b) of suit-s. (1) of S. 5, and notice was thereby given to all the bidi manufacturers that the said draft would be taken into consideration on or after March 1, 1957. Thereafter the procedure prescribed by S. 5 was followed, an enquiry was held, a report of the Advisory Board was received and finally the impugned notification was issued on June 11, 1958. It is the validity of the several clauses contained in this notification that is challenged before us in the present appeals.

3. In their petitions the petitioners alleged that cls. 3 to 7 of the notification were invalid and ultra vires the powers of the respondent under Ss. 3, 4 and 5 of the Act. According to them the respondent had no power to make provision for deciding as to the extent to which “chhat” will be permitted or directing the action to be taken by the employer and employee relating to bad bidis. Their contention was that the said clauses purported to make provisions for the settlement of disputes between the employer and the employee concerning an industrial matter and were outside the purview of type respondent’s power under the relevant sections. They urged that the different provisions of the notification were so interrelated that it was difficult to dissociate one from the other and so it was necessary that the notification as a whole should be quashed.

4. The respondent disputed the correctness of the contentions raised by the petitioners. It urged that there were constant disputes among bidi manufacturers and bidi workers regarding the minimum wages fixed in the Vidarbha region and so the respondent thought it necessary to institute on enquiry into these complaints in order to decide whether it was necessary to revise the minimum wages prescribed by the earlier notification and the mode of determining those wages. It was only after a comprehensive enquiry was held at which all parties were heard that the respondent issued the notification in question. Its case was that the minimum rates of wages had been fixed on industry-cum-regionwise basis and that Cls. 3 to 7 were intended to make the fixation of minimum rates of wages effective. According to the respondent, the absence of any rules regarding the exercise of the right of “chhat” by the employers tends to deprive the bidi workers of their right of getting the minimum rates of wages, and so Cls. 1 to 7 were deliberately introduced to make the material provisions of the Act effective in their implementation.

5. These petitions were first heard by Mudholkar and Kotval, JJ.) Mudholkar, J. held that all the clauses in the impugned notification were valid for, according to him, though the Act had not conferred express powers on the respondent to prescribe the impugned clauses of the notification yet the respondent could prescribe the said rules under the doctrine of implied powers. Kotval, J. agreed that Clauses 1 and 2 were vaild but he thought that even under the doctrine of implied powers the remaining Cls. 3 to 7 could not be sustained. According to him the said clauses were, however, severable from Cls. 1 and 2 and so they should be struck down leaving Cls.1 and 2 intact. Since there was a difference of opinion between the two learned judges the matter was referred to Tambe, J. He held that Cls. 1 to 5 and the first part of Cl. 6 were intra vires whereas the latter part of Cl. 6 and Cl. 7 as well as the explanation added to it were ultra vires. After Mr. Justice Tambe pronounced his judgment the matter was again referred to a Division Bench, and the Division Bench, in accordance with the majority opinion, has upheld the validity of Cls. 1 to 5 and the first part of Cl. 6 and his struck down the latter part of Cl. 6 as well as Cl. 7 and its explanation. It is against this decision that the petitioners and the respondent have come to this Court with a certificate granted by the High Court in that behalf.

6. Before dealing with the merits of the controversy between the parties it would be relevant to refer to the material provisions of the Act. The Act was passed in 1948 in order to provide for fixing minimum rates of wages in certain employments. Its provisions apply to the scheduled employment which expression under S. 2 (g) means an employment specified in the schedule, or any process or branch of work forming part of such employment. It is common-ground that employment in any tobacco (including bidi making) manufactory is a scheduled employment under the schedule of the Act. Section 2 (h) defines wages and it prescribes, inter alia, that wages means all remuneration capable of being expressed in terms of money which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes house-rent allowance, but does not include the items specified by cls. (i) to (v) of the said definition. Section 3 authories the appropriate Government to prescribe different minimum rates of wages for different scheduled employment, different classes of work in the same scheduled employments, adults, adolescents, children and apprentices and different localities. Under Section 4 are prescribed the components of the minimum rates of wages. Section 5 provides for the procedure for fixing and revising minimum wages. Section 7 provides inter alia, that minimum wages payable under the Act shall be paid in cash. Under S. 12 an obligation is imposed on the employer to pay every one of his employees engaged in the scheduled employment wages at a rate not less than the minimum rate of wages fixed by the notification issued in that behalf. Section 12 (2) saves the application of the provisions of the Payment of Wages Act. Section 20 authorises the appropriate Government to appoint an authority to hear and decide for any specified area all claims arising out of the payment of less than the minimum rates of wages and other claims specified therein. The remaining sub-sections of the said section prescribe the procedure for determining such claims. Under S. 21 a single application can be made in respect of a number of employees who wish to prefer a claim for the decision of the authority under S. 20 Section 22 prescribes penalties for the offences therein specified. Section 22A provides that if any employer contravenes any of the provisions of the Act or any rule or order made thereunder he shall, if no other penalty is provided for such contravention be punishable with fine which may extend to five hundred rupees. Section 22B provides, inter alia, the manner in which Courts may take cognizance of a complaint against any person for an offence committed under the Act. That in brief is the scheme of the material provisions of the Act.

7. At this stage it would be necessary to read the several clauses of the impugned notification:

“No MWA. 1557-J. In exercise of the powers conferred by sub-sec. (2) of S. 5 read with clause (b) of sub-sec. (1) of that section of the Minimum Wages Act, 1948 (XI of 1948) and after consulting the Advisory Board and in supersession of the former Government of Madhya Pradesh Labour Department Notification No. 564-451-XXIII, dated 23rd February, 1956, the Government of Bombay hereby revise the minimum rates of wages in respect of the employment in nay tobacco (including bidi making) manufactory in the Vidarbha region of the State of Bombay as mentioned in the Schedule hereto annexed and directs that this notification shall come into force with effect from 1st July, 1958.

SCHEDULE.

Subject to the other provisions of this Schedule, the revised minimum rates of wages payable to employees per thousand bidis (when leaves are supplied by the employer) shall be as follows:

Area. Revised rates in `
(i) Nagpur District 1.69
(ii) Bhandara District 1.62
(iii) Chanda, Akola, Buldana, Yeotmal, Amravati, and Wardha District 1.56

2. For all bidis in which 7 chataks or more of tobacco mixture is used and for those bidis which are known as “Hatnakun” bidis, there shall be an increase of 12 Naye Paise per 1000 bidis in the rates mentioned above in all the areas.

3. It shall be within the discretion of the employer to decide which are “chhat” bidis or bad bidis, up to 5 per cent of the bidis prepared by the employee. If the employer decided that any bidis are “chhat” or bad, the “chhat’ or bad bidis up to 5 per cent shall be destroyed forthwith by the employee and whatever tobacco is recovered from them shall be retained by the employer. If, however, the employer wants to retain these “chhat” or bad bidis, he shall pay full wages for the same to the employee.

4. If “chhat” or bad bidis are more than 5 per cent, but less than 10 per cent, and if there is any dispute between the employer and the employee as to whether the “chhat” or bad bidis is done properly or not equal number of representatives of the employer and the employees shall inspect the “chhat” is done properly or not, if there is any difference of opinion among the representatives of the two sides, the majority opinion shall prevail. If the opinion is equally divided and the employer wants to retain the “chhat” bidis, he shall pay wages for “chhat” bidis between 5 per cent to 10 per cent at half the rates fixed above. If the employer does not want to retain these bidis the employee shall destroy them forthwith.

5. The employer shall nominate his representatives and the employees shall elect their representatives.

6. In the case of “chhat” above 10 per cent, the employee shall be entitled to full wages. It shall, however, be open to the employer to take suitable action against the employee if the “chhat” is more than 10 per cent for 6 continuous working days in a calendar month.

7. The “chhat” shall be made once in a day only, at any premises within a distance of not more than 2 miles from the premises where bidis are manufactured.

Explanation—For the purpose of this Schedule the expression “employer” includes his thekedar, contractor or agent as the “case may be.”

The validity of Cls. 1 and 2 is not in dispute. The petitioners, however, contend that Ch. 3 to 7 are outside the powers conferred on the respondent by the relevant provisions of the Act and as such are invalid. It is common ground that, even if the impugned clauses are held to be ultra vires they are severable from Cls. 1 and 2 so that the invalidity of the impugned clauses will not affect the validity of the said two clauses and they will stand even if the other clauses are struck down.

8. In determining the question about the validity of the impugned clauses it is necessary to refer to two material facts. The nature and scope of the terms of contract between the petitioners and their employees are really-not , in dispute. It is alleged by the petitioners that they employ a large number of persons for the purpose of making bidis for them, that these persons are supplied with tendu leaves, tobacco and other necessary materials, they take the said articles to their respective places where they work and bring back the bidis prepared by them to the employer. The employer their examines the bidis, accepts such of them as are found to have been prepared according to the terms of the contract, rejects such of them as are found to be of poor quality and not prepared according to the terms of the contract and pays for the bidis actually accepted. The respondent has not traversed these allegations made by the petitioners. It admitted that the workers are paid on piecerate basis and the payment is made “On the basis of bidis selected and accepted by the employer after rejecting certain portions of bidis prepared by the workers”. In fact the respondent has expressly stated that “there is a recognised practice of making payment on the basis of bidis accepted by employers as coming up to a certain standard of skill”. It is further admitted that the employers have insisted on their right in principle of rejecting the sub-normal or sub-standard bidis prepared by the employees. Thus, there is no doubt that under the terms of the contract the workers are entitled to receive payment only for the bidis accepted by the employers and not for those which are rejected. It is also not disputed that the bidis which are rejected by the employer, otherwise known as “chhats” are retained by the employer though he refuses to take them into account in the matter of payment to the workers on the ground that they do not come up to the standard of skill or quality prescribed by the contract.

9. It also appears to be true that the employees in this region have been protesting against improper rejection of the bidis by the employers. They have contended that the employers reject an unreasonably high proportion of bidis falsely dubbing them as of sub-normal quality without paying anything to the workers for their labour spent in rolling such rejected bidis. In its affidavit the respondent has emphasised that as a result of this method of discarding bidis on the ground that they are of sub-standard quality bidi workers were deprived of the labour charges for bidis which are rejected by their employers; and so it was urged that the question of fixing minimum rates of wages for bidi workers necessarily involved the question as to the quantum or percentage of such rejection which should be permissible to the employer. According to the respondent the impugned notification has purported to fix the minimum rates of wages after taking into consideration the problem presented by the practice of discarding bidis and paying wages to the workers only for such bidis as are accepted. In support of the validity of the notification the respondent also relied on the fact that the formula prescribed by the notification had been evolved after taking into account the representations made both by the employers and the employees. In fact, according to the respondent, the said formula represented a substantial degree of agreement between the parties on this point.

10. It would thus be seen that on the two material facts there is really no serious dispute between the parties. The respondent agrees that under the practice which must be taken to be consistent with the implied terms of contract between the bidi manufacturer and his employee, after the bidis are prepared by the employees and brought back to the employer the employer has a right to examine the quality of the bidis, accept only such as have come up to the standard prescribed by the contract and reject the rest. The practice further justifies the payment of wages to the employees only for the bidis actually accepted and not for those which are rejected though the rejected bidis may be retained by the employer. On the other hand, it is not, and cannot be, seriously disputed by the petitioners that in some cases this practice may work great hardship on the workers, and in every case the workers do not get wages for the labour put by them in rolling the rejected bidis. The main question which arises for our decision in the present appeals is whether the injustice resulting from the practice of discarding bidis and not making any payment for them to the workers can be checked, controlled and regulated by the respondent by issuing a notification under the powers conferred on it by S. 5 of the Act. If the relevant provisions of the Act confer upon the respondent the power to check the evil against which the workers complain then of course the validity of the impugned clauses would be beyond challenge. If, on the other hand, the power to prescribe or revise minimum rates of wages does not either expressly or by necessary implication include the power to provide for the machinery to check the evil in question, then the impugned clauses would be ultra vires however necessary it may be to check and control the said evil in question.

11. In this connection let us broadly examine the scope and effect of the impugned clauses. Clauses 1 and 2 prescribe the revised minimum rates district wise and provide for the payment of higher price for the bidis known as Hatnakhun bidis in all the said districts. These two clauses are obviously valid and the petitioners have not disputed the conclusion of the High Court in that behalf. Clauses 3 to 6 deal with the problem of the Chhat bidis or bidis which are rejected because they are bad. Clause 3 leaves it to the discretion of the employer to decide which are chhat bidis up to 5 per cent of the bidis prepared by the employees. This clause provides that the bidis so rejected would be destroyed and tobacco recovered from them retained by the employer; and it adds that if the employer wants to retain the rejected bidis he shall pay full wages for the same to the employee. In other words, this clause means that the employer may discard bidis up to 5 per cent but if he does not want to pay the workers for the said bidis he must destroy them. That would show that the discretion exercised by him is honest and fair. If, on the other hand, he wants to retain the said bidis that would mean that he thinks that the bidis would find a market and in that case he must pay for them on the basis that they are good bidis. On principle this provision may perhaps not be open to any serious criticism and it is act unlikely that if the notification had not made further detailed provisions by Cls. 4 to 6 the present dispute would not have been brought before the High Court. The employers probably do not have a serious grievance against Cl. 3 on the merits.

12. Clause 4 deals with cases where the rejection may be more than 5 per cent. but less than 10 per cent, of the total work produced by the worker. In regard to this class of cases Cl. 4 provides for a machinery to deal with cases falling under it. Representatives of the employers and employees have to be appointed and they have to decide whether the work has been properly done or not. The decision would be according to the opinion of the majority. If the opinion is equally divided and the employer wants to retain the chhat bidis, between 5 per cent to 10 per cent, he shall pay at half the rates fixed in Cl. 1. If the employer does not want to retain them the employees shall destroy them. The clause does not seem to provide for a case where the majority opinion may support the rejection between 5 per cent, and 10 per cent; that is a lacuna in the clause. The only comment which can be legitimately made against the clause on its merits is that the setting up of the machinery for a kind of adjudication of the dispute between the employer and the employee may, instead of solving the difficulties in actual working, add to them.

13. That takes us to Cl. 6. This clause has been very severely criticised by the petitioners. It provides that in case of chhat above 10 per cent, the employees shall be entitled to full wages which means that even if chhat above 10 per cent, is made reasonably and for a proper cause the employer has to pay for the discarded work as therein prescribed; the only right given to the employer in such a case is to take suitable action against the employee if the chhat is more than 10 per cent, and that too for six continuous working days in a calendar month. Prima facie this clause appears to be unreasonable and unjust.

14. The explanation to Cl. 7 is also criticised by the petitioners because the thekedar; contractor or agent, who is appointed by the employer would, if the explanation is valid, be liable to perform all the obligations imposed on the employer by the relevant provisions of the Act such as Ss. 12 and 18. We have examined the broad features of the notification and indicated the comment made on it by the petitioners for the purpose of showing that on the merits some of the clauses do not appear to be fair and just, but that is not the ground on which their validity can be or has been challenged before us. The main argument in support of the challenge rests on the assumption that Cls. 3 to 7 are all beyond the powers conferred on the respondent by the relevant provisions of the Act; and it is this argument which needs to be examined.

15. It is well settled that industrial adjudication under the provisions of the Industrial Disputes Act 14 of 1947 is given wide powers and jurisdiction to make appropriate awards in determining industrial disputes brought before it. An award made in an industrial adjudication may impose new obligations on the employer in the interest of social justice and with a view to secure peace and harmony between the employer and his workmen and full co-operation between them, such an award may even alter the terms of employment if it is thought fit and necessary to do so. In deciding industrial disputes the jurisdiction of the tribunal is not confined to the administration of justice in accordance with the law of contract. As Mukherjea, J., as he then was, has observed in Bharat Bank Ltd., Delhi vs. Employees of Bharat Bank Ltd. Delhi, (1950) SCR 459 at p. 513 the tribunal “can confer rights and privileges on either party which it considers reasonable and proper, though they may not be within the terms of any existing agreement. It has not merely to interpret or give effect to the contractual rights and obligations between them which it considers essential for keeping industrial peace”. Since the decision of the Federal Court in Western India Automobile Association vs. Industrial Tribunal, Bombay, AIR 1949 FC 111:1949 FCR 321 it has been repeatedly held that the jurisdiction of industrial tribunals is much wider and can be reasonably exercised in deciding industrial disputes with the object of keeping industrial peace and progress (Vide:Rohtas Industries, Ltd. vs. Brijnandan Pandey, (1956) SCR 800, Patna Electric supply Co. Ltd., Patna vs. Patna Electric Supply Workers’ Union, (1959) 2 Suppl. SCR 761). Indeed, during the last ten years and more industrial adjudication in this country has made so much progress in determining industrial disputes arising between industries of different kinds and their employees that the jurisdiction and authority of industrial tribunals to deal with such disputes with the object of ensuring social justice is no longer seriously disputed.

16. But, it is necessary to remember that no claim can be made for such broad jurisdictional power by the respondent when it purports to issue a notification under the provisions of the Act. These powers and authority would necessarily be conditioned by the relevant provisions under which it purports to act, and the validity of the impugned notification must therefore be judged not by general considerations of social justice or even considerations for introducing industrial peace; they must be judged solely and exclusively by the test prescribed by the provisions of the statute itself. It appears that in 1956 before Vidarbha became a part of the State of Bombay the State Government of Madhya Pradesh had made a comprehensive reference for the arbitration by the State Industrial Court between the bidi manufacturers of Bhandara District and their employees. In this dispute all the material issue arising from the prevailing practice which authorised employers to reject chhat bidis had been expressly referred for adjudication. Subsequently, when the impugned notification was issued the respondent apparently took the view that what could have been achieved by reference to the arbitration of State Industrial Court may well be accomplished by issuing a notification under S. 5 of the Act. It may be that there is substance in the grievance made by the employees that the practice of rejecting chhat bidis often leads to injustice and deprives them of the wages legitimately earned by them by rolling the said bidis and there can be no doubt that if a comprehensive reference is made for the decision of this industrial dispute between the bidi manufacturers and their employees an award may well be passed which will resolve this dispute; but the question which falls for our decision is whether the relevant provisions of the Act authorised the State Government to make rules for the decision of the dispute in that behalf and for the payment of minimum rates of wages on the basis of such decision? In our opinion the answer to this question has to be in the negative.

17. What is the extent of the authority conferred on the respondent in fixing or revising minimum rates of wages under the relevant provisions of the Act ? In dealing with this question we must necessarily bear in mind the definition of the term “wages” prescribed by S. 2 (h). As we have already seen the term “wages” includes remuneration which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment, in other words, the term “wages”refers to remuneration payable to the employee as a result of the terms of employment, what would be the amount to which the employee is entitled if the other terms of the contract are performed ? That is the question which has to be asked in determining what the term “wages” means under S. 2 (h). No doubt Ss. 3, 4 and 5 authorise the appropriate Government to fix the minimum rates of wages. In other words, if the wages fixed by a contract which is either express or implied are found to below authority is conferred on the appropriate Government to increase them so as to bring them to the level of what the said. Government regards as the minimum wages in the particular scheduled employment in the particular area concerned. This means that power is conferred on the appropriate Government to modify one term of the contract express or implied between the employer and the employee and that is a term which has reference to the payment of wages. If for a certain piece of work done by the employee the employer has agreed to pay him either expressly or by implication a certain amount of wages the appropriate Government can issue a notification and prescribe that for the said work done under the contract the employer must pay his employee a much higher rate of wages and the higher rate of wages thus prescribed would be deemed to be the minimum rate of wages between the parties.

18. It would, however, be noticed that in defining “wages” Cl. 2 (h) postulates that they would be payable if the other terms of the contract of employment are fulfilled. That is to say, in authorising the fixation of minimum rates of wages the other terms of the contract of employment have always to be fulfilled. The fulfilment of . the other terms of the contract is a condition precedent for the payment of wages as defined under S. 2 (h) and it continues to be such a condition precedent even for the payment of the minimum rates of wages fixed and prescribed by the appropriate Government. The significance of the definition contained in S. 2 (h) lies in the fact that the rate of wages may be increased but no change can be made in the other terms of the contract. In other words, the Act operated on the wages and does not operate on the other terms of the contract between the employer and the employee. That is the basic approach which must be adopted in determining the scope and effect of the powers conferred on the appropriate Government by the relevant provisions of the statute authorising it to prescribe minimum rates of wages or to revise them. What the appropriate Government is authorised to do is to prescribe, fix or revise wages and wages are defined to be remuneration payable to the employees if the terms of the contract of employment, express or implied, were fulfilled. This definition runs, as it inevitably must, through the material provisions of the Act and its importance cannot therefore be ignored.

19. Bearing this fact in mind let us examine the impugned clauses of the notification. Clauses 1 and 2 clearly fall within the purview of the power conferred on the respondent because they do no more than prescribe the minimum rates of wages as therein specified but Cls. 3 to 7 clearly and unambiguously purport to deal with the terms of the contract between the parties other than that relating to the remuneration. These clauses are obviously intended to deal with the dispute between the employers and their employees as to how bidis should be discarded and in what proportion and what should be the procedure to be followed in regard to the payment for such discarded bidis. In appreciating the true effect of these clauses it is necessary to recall that the parties are agreed about the practice at present prevailing which must be token to represent the terms of the contract either express or implied. According to the said practice the employer decides which bidis should be discarded, he retains the discarded bidis and pays only for such bidis as are accepted by him. It is plain that the impugned clauses of the notification purport to modify these terms in material particulars and that would be plainly outside the jurisdiction of the authority of the respondent. It may well form the subject-matter of reference for industrial adjudication but it cannot form the subject-matter of a notification prescribing minimum rates of wages under s. 3, 4 or 5. It is conceded by the respondent that there is no express provision in the Act which authorised the setting up of the machinery as prescribed by Cls. 3 and 4 or for laying down the manner in which the employer should make payment for the discarded bidis. It is, however, strenuously urged that the validity of these clauses should be upheld on the ground of the implied power of the respondent; and that takes us to the question as to the true scope and effect of the doctrine of, implied power.

20.One of the first principles of law with regard to the effect of an enabling act”, observes Craies, “is that a Legislature enables something to be done, it gives power at the same time by necessary implication to do everything which is indispensable for the purpose of carrying out the purposes in view”[1]. The principle on which this doctrine is based is contained in the legal maxim ‘Quando lex aliquid concedit concedere videtur et illud sine quo res ipsa ease non potest’. This maxim has been thus translated by Broom thus:”whoever grants a thing is deemed also to grant that without which the grant itself would be of no effect”. Dealing with this doctrine Pollock, C. B., observed in Fenton vs. Hampton, (1858) 117 RR 32 at p. 41:II Moo PC 347 “it becomes therefore all important to consider the true import of this maxim, and the extent to which it has been applied. After the fullest research which I have been able to bestow, I take the matter to stand thus:Whenever anything is authorised, and especially if, as matter of duty, required to be done by law, and it is found impossible to do that thing unless something else not authorised in express terms be also done, then that something will be supplied by necessary intendment.’ This doctrine can be invoked in cases “Where an Act confers a jurisdiction it also confers by implication the power of doing all such acts or employing such means, as are essentially necessary to its execution”[2]. In other words, the doctrine of implied powers can be legitimately invoked when it is found that a duty has been imposed or a power conferred on an authority by a statute and it is further found that the duty cannot be discharged Or the power cannot be exercised at all unless some auxiliary or incidental power is assumed to exist. In such a case,, in the absence of an implied power the statute itself would become impossible of compliance. The impossibility in question must be of a general nature so that the performance of duty or the exercise of power is rendered impossible in all cases. It really means that the statutory provision would become a dead letter and cannot be enforced unless a subsidiary power is implied. This position in regard to the scope and effect of the doctrine of implied Powers is not seriously in dispute before us. The parties are at issue, however, on the question as to whether the doctrine of implied powers can help to validate the impugned clauses in the notification.

21. The respondent strenuously contends that clauses I and 2. of the notification which have prescribed the minimum rates of wages per 1000 bidis would become ineffective unless cls. 3 to 7 supplement them. The argument is that by improper or dishonest exercise of the power conferred on the employer by the contract of employment to discard chhat bidis the employees would be cheated of their legitimate due wages under cls. 1 and 2 and so, in order to make the provisions of cls. 1 and 2 effective some subsidiary provisions had to be made for settling the dispute between the employer and his workmen in regard to chhat bidis. As we have already observed, the grievance made by the employees on the score of improper rejection of bidis may in many cases be well-founed; but the seriousness of the said grievance and the urgent necessity to meet it would hardly be a proper basis for invoking the doctrine of implied power where the provisions of the statute are quite clearly against the assumption of such implied power. The definition of the term “wages” postulates the binding character of the other norms of the contract and brings within the purview of the Act only one term and that relates to wages and no other. That being so, it is difficult to hold that by implication the very basic concept of the term “wages” can be ignored and the other terms of the contract can be dealt with by the notification issued under the relevant provisions of the Act. When the said other terms of the contract are outside the scope of the Act altogether how could they be affected by the notification under the Act under the doctrine of implied powers?

22. Besides, in this connection it is also necessary to bear in mind the provisions of Ss. 20-21 of the Act. These two sections provide for the settlement of claims made by employees in regard to the payment of minimum rates of wages. If, for instance, good bidis are rejected by the employer as chhat bidis improperly and without justification the employee can make a claim in that behalf and the same would be tried under Ss. 20-21. Therefore the Act has made a specific provision for the enforecement and implementation of the minimum rates of wages prescribed by notifications. The present notification purports to ignore the said provisions and sets up a machinery to settle the said disputes. Clauses 1 and 2 prescribed the revised minimum rates of wages. It, in the matter of payment of the said wages, any disputes arise they must be left for adjudication by the authority prescribed by S. 20. That is another reason why the doctrine of implied powers cannot be invoked in support of the validity of the impugned clauses in the notification.

23. There is yet another consideration which is relevant in dealing with the question about the implied powers. The doctrine of implied power can be invoked where without the said power the material provision of the Act would become impossible of enforcement. In the present case all that S. 5 requires is the fixation of minimum rates of wages, and that has been done by the notification by cls. 1 and 2. What the subsidiary clauses purport to do is to make the enforcement of the fixed rate effective by providing for a machinery to deal with the possible disputes arising between the parties as a result of the practice of discarding chhat bidis. In other words, cls. 1 and 2 fix the minimum rates of wages and thus S. 5 has been complied with and enforced. The remaining clauses purport to make the implementation of the provisions of cls. 1 and 2 effective. That is very different from giving effect to S. 5 itself. The enforcement of the notification is clearly not the same thing as exercising the power of fixing or revising the minimum rates of wages under S. 5. A power may be implied, if necessary, in discharging the duty imposed upon the appropriate Government or in exercising the power conferred on the State Government in the matter of fixing or revising the minimum rates of wages; but surely no power can be implied for making effective the implementation of the notification issued under the said power or in the discharge of the said duty. The purpose of the Act cannot be said to have failed after the minimum rates of wages are prescribed and notified. What may turn out to be ineffective is the provision for payment of the said wages by reason of the rejection of good bidis; but that is a matter of an industrial dispute which has to be adjudicated upon under Ss. 20 and 21 or under other provisions of the law. It is true that a large section of the workers in the bidi trade is illiterate, uneducated and unorganised; and there can be no doubt that their grievance on the ground of improper rejection of the bidis deserves to be redressed but, in our opinion, the procedure adopted by the respondent in redressing the said grievance is outside the scope of the Act, and therefore beyond the powers conferred on it by S. 5. The proper remedy in such a case may be to make a comprehensive reference of the dispute to the competent industrial tribunal and invite the tribunal to make a proper award in that behalf. We are, therefore, inclined to take the view that cls. 3 to 7 which form an integral scheme are outside the purview of the powers conferred on the respondent by S. 5 of the Act and must therefore be declared to be ultra vires. It is common ground that these clauses are severable from cls. 1 and 2 and that their invalidity does not affect the validity of the said two clauses.

24. In the result Civil Appeals Nos. 415 and 417 are allowed and Civil Appeal Nos. 416 and 418 are dismissed. Respondent to pay the costs of the petitioners in Civil Appeals Nos. 415 and 417. One set of hearing costs.


[1]. Craies on Statute Law, p. 239.

[2]. Maxwell on Interpretation of Statutes, 10th ed., p. 361.

Uttarakhand Transport Corporation (earlier known as U.P.S.R.T.C.) & Ors. Vs. Sukhveer Singh [SC 2017]

SERVICE-INQUIRY REPORT

  • KEYWORDS: award of the labour court

SC

  • We are in agreement with the findings of the inquiry officer which were accepted by the disciplinary authority and approved by the appellate authority and the labour court that the Respondent had committed the misconduct in collusion with the conductor. It is no more res integra that acts of corruption/misappropriation cannot be condoned, even in cases where the amount involved is meagre.

DATE: November 10, 2017

ACTS:

BENCH:  [ARUN MISHRA] [L. NAGESWARA RAO]


SUPREME COURT OF INDIA

Uttarakhand Transport Corporation (earlier known as U.P.S.R.T.C.) & Ors. Vs. Sukhveer Singh

[Civil Appeal No. 18448 of 2017 Arising out of Special Leave Petition (Civil) No.4012 of 2017]

L. NAGESWARA RAO, J.

Leave granted.

1. This Appeal is filed by the employer against the judgment of the High Court by which the order of dismissal of the Respondent- driver from service was set aside by the High Court.

2. The Respondent was appointed as a driver with the Appellants – Road Transport Corporation in the year 1989. On 27th October, 1995 while driving a vehicle on Karnal-Haridwar route, the Respondent did not stop the vehicle when the inspection team signalled. The inspection team had to follow the vehicle which was stopped six kilometres away from where it was signalled to stop. On verification, it was found that 61 passengers were travelling without a ticket. The Respondent was placed under suspension on 31st October, 1995 and disciplinary proceedings were initiated by issuance of a charge sheet on 3rd November, 1995.

The Respondent submitted his explanation after which an inquiry was conducted by the Assistant Regional Manager, Haridwar. After considering the material on record, the inquiry officer found that the charges against the Respondent were proved. The inquiry officer relied upon the admission of the Respondent that though there was a signal by the inspecting team to stop the vehicle at Bidouli, he stopped the vehicle only after driving for two kilometres. The explanation given by the Respondent that he drove the vehicle due to a call given by the conductor was not accepted by the inquiry officer.

It was held that the Respondent was duty bound to stop the vehicle when a signal was given by the inspecting team. The inquiry officer further held that the Respondent colluded with the conductor and did not stop the vehicle as there were a number of ticketless passengers in the bus. The disciplinary authority issued a show cause notice on 26th December, 1996 along with which the inquiry report was supplied to the Respondent. Not satisfied with the explanation submitted by the Respondent to the show cause notice, the disciplinary authority dismissed him from service by an order dated 23rd April, 1997. The appellate authority dismissed the appeal filed by the Respondent on 25th July, 2000.

3. A reference was made to the labour court which was answered in favour of the Respondent on 15th November, 2007. The writ petition filed by the Respondent challenging the award of the labour court was allowed by the High Court and the labour court was directed to reconsider the matter. After remand, the labour court by an award dated 12th September, 2011 upheld the order of dismissal of the Respondent from service.

The Respondent challenged the award of the labour court by filing a writ petition in the High Court of Uttarakhand at Nainital. The High Court while relying upon a judgment of this Court in Managing Director ECIL Hyderabad & Ors. v. B. Karunakar & Ors.1 allowed the writ petition and set aside the dismissal order. The High Court directed that the Respondent should be deemed to be in service with all consequential benefits. Assailing the legality of the said judgment of the High Court, the Appellants have approached this Court.

4. It is contended on behalf of the Appellants that the impugned judgment is contrary to the law laid down in Managing Director ECIL Hyderabad & Ors. v. B. Karunakar & Ors. (supra). It is further submitted that a copy of the inquiry report was in fact supplied to the Respondent. The other point that was canvassed by the Appellants is that the Respondent neither pleaded nor proved that any prejudice was caused to him by the non-supply of the inquiry report prior to the issuance of show cause notice.

The counsel for the Respondent supported the judgment of the High Court by submitting that it was incumbent upon the disciplinary authority to supply the inquiry report prior to the issuance of the show cause notice as per the judgment of this Court in Managing Director ECIL Hyderabad & Ors. v. B. Karunakar & Ors. (supra). He also relied upon certain findings in the inquiry report which were in favour of the Respondent. He finally submitted that the punishment of dismissal from service is disproportionate to the delinquency.

5. The award of the labour court was set aside by the High Court on the sole ground that non-supply of the inquiry report prior to the show cause notice vitiated the disciplinary proceedings. The High Court, in our opinion, committed an error in its interpretation of the judgment in Managing Director ECIL Hyderabad & Ors. v. B. Karunakar & Ors. (supra). It is no doubt true that this Court in the said judgment held that a delinquent employee has a right to receive the report of the inquiry officer before the disciplinary authority takes a decision regarding his guilt or innocence. Denial of a reasonable opportunity to the employee by not furnishing the inquiry report before such decision on the charges was found to be in violation of principles of natural justice.

In the instant case, the disciplinary authority communicated the report of the inquiry officer to the Respondent along with the show cause notice. There is no dispute that the Respondent submitted his reply to the show cause notice after receiving the report of the inquiry officer. On considering the explanation submitted by the Respondent, the disciplinary authority passed an order of dismissal.

Though, it was necessary for the Appellants to have supplied the report of the inquiry officer before issuance of the show cause notice proposing penalty, we find no reason to hold that the Respondent was prejudiced by supply of the inquiry officer’s report along with the show cause notice. This is not a case where the delinquent was handicapped due to the inquiry officer’s report not being furnished to him at all. In Managing Director ECIL Hyderabad & Ors. v. B. Karunakar & Ors. (supra) this Court, while considering the effect on the order of punishment when the report of the inquiry officer was not furnished to the employee and the relief to which the delinquent employee is entitled, held as under:

[v] ……..When the employee is dismissed or removed from service and the inquiry is set aside because the report is not furnished to him, in some cases the non-furnishing of the report may have prejudiced him gravely while in other cases it may have made no difference to the ultimate punishment awarded to him. Hence to direct reinstatement of the employee with back-wages in all cases is to reduce the rules of justice to a mechanical ritual. The theory of reasonable opportunity and the principles of natural justice have been evolved to uphold the rule of law and to assist the individual to vindicate his just rights. They are not incantations to be invoked nor rites to be performed on all and sundry occasions.

Whether in fact, prejudice has been caused to the employee or not on account of the denial to him of the report, has to be considered on the facts and circumstances of each case. Where, therefore, even after the furnishing of the report, no different consequence would have followed, it would be a perversion of justice to permit the employee to resume duty and to get all the consequential benefits. It amounts to rewarding the dishonest and the guilty and thus to stretching the concept of justice to illogical and exasperating limits. It amounts to an “unnatural expansion of natural justice” which in itself is antithetical to justice.

6. The question of the relief to be granted in cases where the report of the inquiry officer was not supplied to the delinquent employee came up for consideration of this Court in Haryana Financial Corpn. v. Kailash Chandra Ahuja2 in which it was held as follows:

21. From the ratio laid down in B. Karunakar [(1993) 4 SCC 727] it is explicitly clear that the doctrine of natural justice requires supply of a copy of the inquiry officer’s report to the delinquent if such inquiry officer is other than the disciplinary authority. It is also clear that non-supply of report of the inquiry officer is in the breach of natural justice. But it is equally clear that failure to supply a report of the inquiry officer to the delinquent employee would not ipso facto result in the proceedings being declared null and void and the order of punishment non est and ineffective. It is for the delinquent employee to plead and prove that non-supply of such report had caused prejudice and resulted in miscarriage of justice. If he is unable to satisfy the court on that point, the order of punishment cannot automatically be set aside. After a detailed examination of the law on the subject, this Court concluded as follows:

44. From the aforesaid decisions, it is clear that though supply of report of the inquiry officer is part and parcel of natural justice and must be furnished to the delinquent employee, failure to do so would not automatically result in quashing or setting aside of the order or the order being declared null and void. For that, the delinquent employee has to show “prejudice”. Unless he is able to show that non-supply of report of the inquiry officer has resulted in prejudice or miscarriage of justice, an order of punishment cannot be held to be vitiated. And whether prejudice had been caused to the delinquent employee depends upon the facts and circumstances of each case and no rule of universal application can be laid down.

7. It is clear from the above that mere non-supply of the inquiry report does not automatically warrant re-instatement of the delinquent employee. It is incumbent upon on the delinquent employee to plead and prove that he suffered a serious prejudice due to the non-supply of the inquiry report. We have examined the writ petition filed by the Respondent and we find no 9 pleading regarding any prejudice caused to the Respondent by the non-supply of the inquiry report prior to the issuance of the show cause notice. The Respondent had ample opportunity to submit his version after perusing the report of the inquiry officer.

The Respondent utilised the opportunity of placing his response to the inquiry report before the disciplinary authority. The High Court committed an error in allowing the writ petition filed by the Respondent without examining whether any prejudice was caused to the delinquent employee by the supply of the inquiry officer’s report along with the show cause notice. We are satisfied that there was no prejudice caused to the respondent by the supply of the report of the inquiry officer along with the show cause notice. Hence, no useful purpose will be served by a remand to the court below to examine the point of prejudice.

8. The Respondent contended that the punishment of dismissal is disproportionate to the delinquency. It is submitted that he was working as a driver and the irregularity in issuance of tickets was committed by the conductor. We are in agreement with the findings of the inquiry officer which were accepted by the disciplinary authority and approved by the appellate authority and the labour court that the Respondent had committed the misconduct in collusion with the conductor. It is no more res integra that acts of corruption/misappropriation cannot be condoned, even in cases where the amount involved is meagre. (See – U.P.SRTC v. Suresh Chand Sharma).

9. For the aforementioned reasons, we allow the appeal and set aside the judgment of the High Court. No order as to costs.

Kerala Private Hospital Association Vs. State of Kerala & Ors[SC 2017]

November 09, 2017

•KEYWORDS:- Nominated Person-fixing minimum wages-

SC

A person, who is nominated to represent the interest of his employer, in our considered opinion, need not necessarily be the employer himself. If on the other hand, his employee is nominated to represent his employer’s interest, such nomination is in accordance with the requirement of Section 9 of the Act. It is for the reason that such nominee once nominated would defend his employer’s interest and not individual interest as an employee in the Committee. In other words, a nominee in such a case does not participate in his individual capacity as an employee in the Committee but participates as a representative of his employer.

•HISTORY-The appellant herein is the Association of the employers/owners of the Hospitals and Medical Organizations. The appellant was neither a party to the original writ petition nor the intra court appeal in the High Court. The appellant, however, sought permission from this Court to file special leave to appeal to challenge the impugned judgment on the ground that they have an interest in the subject matter of the Lis arising in the case and since their interest is adversely affected due to improper constitution of the Committee though upheld by the High Court, they have felt aggrieved of the impugned judgment and, therefore, they may be allowed to file SLP to question the legality and correctness of the impugned judgment. Accordingly, this Court granted permission to the appellant as prayed. This is how, the appellant has filed this appeal by way of special leave against the impugned judgment before this Court.

Acts:-Section 9 of the Minimum Wages Act, 1948

Bench : [R.K. AGRAWAL] [ABHAY MANOHAR SAPRE]


SUPREME COURT OF INDIA

Kerala Private Hospital Association Vs. State of Kerala & Ors.

[Civil Appeal No.18368 of 2017 arising out of SLP (C) No.16602/2017]

N. Abdul Rasheed & ANR. Vs. State of Kerala & ANR.

[Special Leave Petition (C) No.15791/2017]

Abhay Manohar Sapre, J.

IN S.L.P.(c) No.16602 of 2017

1. I.A. seeking impleadment as party respondent is allowed.

2. Leave granted.

3. This appeal is filed against the final judgment and order dated 16.02.2017 passed by the High Court of Kerala at Ernakulam in Writ Appeal No.311 of 2017 whereby the High Court dismissed the appeal filed by respondent Nos.2, 3 and 4 herein and upheld the order of the Single Judge dated 01.02.2017 in W.P. (C) No.1054 of 2017 wherein the challenge made to the constitution of the Committee set up by the State of Kerala (respondent No.1) under Section 9 of the Minimum Wages Act, 1948 (hereinafter referred to as “the Act”) for revision of minimum wages payable to the employees working in the private hospitals and other allied institutions was repelled by the Single Judge.

4. We herein set out the facts, in brief, to appreciate the issue involved in these appeals.

5. In order to revise the minimum wages for the employees working in the Private Hospitals, Dispensaries, Pharmacies, Scanning Centers, X-ray Units and other allied institutions, the Government of Kerala-Labour & Skills (E) Department issued G.O. (Rt) No.1334/2016/Labour dated 28.10.2016 accorded sanction for constitution of a Committee called “Private Hospital Industrial Relation Committee” under Section 5 read with Section 9 of the Act.

6. The Committee was to function under the Chairmanship of Labour Commissioner and it, inter alia, consisted of Employers’ Representatives and Employees’ representatives as its Members in equal numbers amongst others. So far as the Employers’ representatives are concerned with which we are concerned herein, the State nominated 13 persons representing Private Medical Hospitals Associations, Medical colleges, and private hospitals of the State.

These persons are:

(1) Dr. P.K. M. Rasheed, President, Kerala Private Hospital Association, Medical Care Hospital, Kodungalloor-680666

(2) Fr. Tijo Joy Mullakkara, Assistant Director, Jubilee Mission Hospital, Thrissur-680005,

(3) Fr. Thomas Vaikkath Parambil, Director, Lisie Hospital, Ernakulam-682018,

(4) Sri Manoj V.C., Head HR, Aster DM Health Care, South Chittoor P.O. Cheranelloor, Kochi-27,

(5) Chairman, Pariyaram Medical College, Kannur,

(6) Sri Fazal Gafoor, President, Muslim Education Society, Bank Road, Calicut,

(7) Sri Don S.R., General Manager (HR), Kims Hospital, PB No.1, Anayara P.O. Thiruvananthapuram-695 029,

(8) Sri Antony Jacob. M, General Manager (HR), Kosmo Politan Pvt. Hospital, Murinjapalam Pattom P.O., Thiruvananthapuram,

(9) Sri K.P. Mathew, Personal Manager, Medical Trust Hospital, Pallimukku, Ernakulam South,

(10) Sri Saji Mathew, Assistant General Manager, Baby Memorial Hospital, Calicut-673004,

(11) Dr. A.M. Anvar, Vice-President, 4 Ayurveda College Management Association, Pooyappallil, Ambedkar Road, Edappally North P.O. Kochi-24,

(12) Sri O.P. Paul, Manager(HR), Elite Mission Hospital, Koorkkanchery, Thrissur-680018 and

(13) Sri Saidu Muhammad V.M., Administrator, Moulana Hospital, Perinthalmanna, Malappuram.

7. As far as the Employees’ representatives are concerned, the State nominated persons representing various Trade Unions, Medical Colleges, and Private Hospitals.

These persons are:

(1) Sri A. Madhavan, (CITU), Arunima, Devan Road, Kanhangad, Kasaragod,

(2) Sri K.P. Sahadevan, A.K.G. Nagar, Housing Colony, House No.10, Kakkad, Kannur-2,

(3) Smt. Bhageerathi K.(CITU), Pranavam, Moonnamkandathil, East Devagiri, Medical College PO, Kozhikode-673 008,

(4) Smt. Geetha Viswambharan, (CITU), Pulincherry House, Gramala, Mulankunnathukavu P.O., Trichur-680 581,

(5) Sri Velayudhan. K. (CITU), Chinchu, 5 14/518 A, Chakkerikkaduparambu, Arakkinar P.O. Kozhikode-673 028,

(6) Sri Saju Thomas, (INTUC), Kandathara, Perumbadanna, North Paravur P.O., Ernakulam,

(7) Sri Vadakkevila Sasi, (INTUC), Kailas, Vadakkevila P.O., Kollam-691010,

(8) Sri A.N. Rajan, (AITUC), Ambattumyalil, Kolazhi P.O. Thrussur,

(9) Sri Jacob Umma, (HMS), Nadayil Veettil, Chettikulangara PO, Mavelikkara-690 106,

(10) Sri T.K. Sulfi, (UTUC), Pandala Veedu, Jonakappuram, Kollam-691006,

(11) Sri P.A. Shahul Hameed, (STU), Ponoth House, Near North Juma Masjid, Vadanappally P.O.,Thrussur-690 614,

(12) Sri Jasmine Shah. M.(UNA), Manthadathil, Vettam P.O., Tirur, Malappuram-676 102 and

(13) Sri Libin Thomas (INA), Kunnathettu House, Arabi P.O. Kannur.

8. The Committee was to take evidence and then to submit the proposal to enable the State Government to issue notification under the Act.

9. Respondent Nos.2 to 4, who are running their private hospitals in the State of Kerala, questioned the constitution of the Committee by filing writ petition in the High Court of Kerala. The constitution of the Committee was challenged essentially on the ground that it did not satisfy the requirements/norms prescribed in Section 9 of the Act inasmuch as it did not give proper representation so far as the Employers’ representatives are concerned. According to the writ petitioners(respondent Nos.2 to 4), the nomination of the persons whose names were appearing at serial Nos.4, 7, 8, 9, 10, 12 and 13 was not proper and it was against the spirit of Section 9 of the Act.

10. It was the case of the writ petitioners that the persons, who are nominated in the Committee as employers’ representatives are actually employees working in their respective Employers’ Organizations(Hospitals/ Medical colleges etc.) and, therefore, according to the writ petitioners such persons would not be the proper persons to be nominated in the Committee. In other words, the contention was that only employers/owners of the Hospitals/Organizations could be nominated as Members to represent the interest of employers in the Committee but not their employees working in their Hospitals/Organizations.

11. The State contested the writ petition and defended the constitution of the Committee. According to the State, the constitution of the Committee was made in accordance with the requirement of Section 9 of the Act and, therefore, no flaw could be found in its constitution on any ground much less on the ground raised by the writ petitioners.

12. The Single Judge dismissed the writ petition and upheld the constitution of Committee. The writ petitioners (respondent Nos.2-4) filed intra court appeal before the Division Bench against the order of Single Judge. By impugned judgment, the Division Bench of the High Court dismissed the appeal and affirmed the order of the Single Judge.

13. The appellant herein is the Association of the employers/owners of the Hospitals and Medical Organizations. The appellant was neither a party to the original writ petition nor the intra court appeal in the High Court. The appellant, however, sought permission from this Court to file special leave to appeal to challenge the impugned judgment on the ground that they have an interest in the subject matter of the Lis arising in the case and since their interest is adversely affected due to improper constitution of the Committee though upheld by the High Court, they have felt aggrieved of the impugned judgment and, therefore, they may be allowed to file SLP to question the legality and correctness of the impugned judgment. Accordingly, this Court granted permission to the appellant as prayed. This is how, the appellant has filed this appeal by way of special leave against the impugned judgment before this Court.

14. Heard Mr. Huzefa Ahmadi, learned senior counsel for the appellant and Mr. C.K. Sasi, learned counsel for the respondents.

15. Mr. Huzefa Ahamdi, learned senior counsel while assailing the legality and correctness of the impugned judgment reiterated the same submissions that were urged before the High Court in the writ petition and writ appeal by the writ petitioners/appellants(respondent Nos.2 to 4 herein) as noted above.

16. In substance, his submission was that the constitution of the Committee made by the State vide order dated 28.10.2016 cannot be said to be in conformity with the requirement of Section 9 of the Act inasmuch as there was no proper representation given to the employers engaged in the medical activities.

17. Learned counsel pointed out that the persons, who are nominated to represent each employer (Hospitals/Medical Organizations), whose names are at S.Nos.4,7,8,9,10,12 and 13(Sri Manoj V.C., Head HR, Aster DM Health Care, South Chittoor P.O. Cheranelloor, Kochi-27, Sri Don S.R., General Manager (HR), Kims Hospital, PB No.1, Anayara P.O. Thiruvananthapuram-695 029, Sri Antony Jacob. M, General Manager (HR), Kosmo Politan Pvt. Hospital, Murinjapalam Pattom P.O., Thiruvananthapuram, Sri K.P. Mathew, Personal Manager, Medical Trust Hospital, Pallimukku, Ernakulam South, Sri Saji Mathew, Assistant General Manager, Baby Memorial Hospital, Calicut-673004, Sri O.P. Paul, Manager (HR), Elite Mission Hospital, Koorkkanchery, Thrissur-680018 and Sri Saidu Muhammad V.M., Administrator, Moulana Hospital, Perinthalmanna, Malappuram) are the employees working in the Hospitals/Nursing Homes etc..

18. According to learned counsel, the proper person, who should have been nominated to represent the employers’ interest, was the “employer” himself of the Hospital/Organization but not their employees working under them.

19. Learned counsel submitted that if the employee is nominated to represent the interest of his employer then such nominee(employee) would be more interested in his(employee) own financial interest while making recommendation for revision of minimum wages rather than to take care of his master’s (employer’s) interest in recommending the wages. But if the employer is nominated personally in the Committee, he would be in a better position to safeguard his interest. Such nominations, according to learned counsel, would be regarded as having been made in keeping the real object of Section 9 of the Act in mind.

20. In reply, learned counsel for the respondent (State) supported the impugned judgment including the constitution of the Committee made by the State and contended that it is in accordance with Section 9 of the Act and hence the submissions urged by learned counsel for the appellant are totally misconceived and deserve rejection.

21. Having heard the learned counsel for the parties and on perusal of the record of the case, we find no merit in the appeal.

22. Section 9 of the Act, which is relevant for this case, reads as under: “9. Composition of Committees , etc . – Each of the committees, sub-committees and the Advisory Board shall consist of persons to be nominated by the appropriate Government representing employers and employees in the scheduled employments, who shall be equal in number, and independent persons not exceeding one-third of its total number of members; one of such independent persons shall be appointed the Chairman by the appropriate Government.”

23. Section 9 deals with constitution of various Committees for due performance of several acts specified under the Act. An appropriate Government is empowered to constitute a Committee whose composition consists of members by nomination to represent the employers’ and employees’ interest in equal numbers. The independent persons are also the members of the Committee whose number should not exceed one third of its total number of the members. The Chairman of the Board by the Central Government is empowered to appoint one independent person.

24. The Minimum Wages (Central) Rules, 1950 (hereinafter referred to as “the Rules”) prescribes, inter alia, a term of office of the members of the Committee and the Advisory Committee(Rule 3), Nomination of substitute-members (Rule 4A), eligibility for re-nomination of the members of the Committee, Advisory Committee and the Board (Rule 7), resignation of the Chairman and members of the Committee/Board and filling of the casual vacancies (Rule 8) and disqualification (Rule 10). The Rules nowhere provide as to who should be nominated as representative of employer in the Committee.

25. Now coming to the facts of the case on hand, there lies a fallacy in the submissions urged by the learned counsel for the appellant.

26. A person, who is nominated to represent the interest of his employer, in our considered opinion, need not necessarily be the employer himself. If on the other hand, his employee is nominated to represent his employer’s interest, such nomination is in accordance with the requirement of Section 9 of the Act. It is for the reason that such nominee once nominated would defend his employer’s interest and not individual interest as an employee in the Committee. In other words, a nominee in such a case does not participate in his individual capacity as an employee in the Committee but participates as a representative of his employer.

27. A representation, by way of nomination, is a well accepted phenomenon. A fortiori, an employee while in the employment of his employer, when nominated as his employer’s representative in the Committee then such employee, who is well-versed with the working of his organization and the subject, is regarded as a competent person(nominee) to represent the interest of his master(employer). No fault can thus be found in such nomination when made by the State while constituting the Committee. It is more so when we find that the employer did not object to such nomination made by the State of their employee in the Committee.

28. We consider it apposite to refer here a three- Judge Bench decision of this Court in Ministry of Labour & Rehabilitation & Anr. vs. Tiffin’s Barytes Asbestos & Paints Ltd. and Anr., AIR 1985 SC 1391 wherein the challenge laid to constitution of Committee and the resultant notification issued under Section 5(1) read with Section 9 of the Act fixing minimum wages for the workers working in Manganese, Gypsum, Barytes and Bauxite Mines was repelled by upholding the constitution of the Committee and the notification with following pertinent observation. The learned Judge, Chinnappa Reddy, J. succinctly observed as under:

“3………………………..We are afraid that the approach of the High Court was entirely wrong. For the purpose of appointing the committee to represent the employers in a scheduled employment, it was not necessary that the person appointed should be engaged for profit in the particular employment.

It is enough if a nexus exists between the persons so appointed to represent the employers in the particular employment and the particular employment concerned. For example it may be absurd to appoint persons engaged in the newspaper industry to a committee to represent employers concerned in the employment of Barytes mines or Bauxite mines…………………………………………………… ….We also wish to emphasise that notifications fixing minimum wages are not to be lightly interfered with under Art.226 of the Constitution on the ground of some irregularities in the constitution of the committee or in the procedure adopted by the committee.

It must be remembered that the committee acts only as a recommendatory body and the final notification fixing minimum wages has to be made by the Government. A notification fixing minimum wages, in a country where wages are already minimal should not be interfered with under Art.226 of the Constitution except on the most substantial of grounds. The legislation is a social welfare legislation undertaken to further the Directive Principles of State Policy and action taken pursuant to it cannot be struck down on mere technicalities.”

29. In the case at hand, we find that equal representation is given to both – employer and employee (13 persons each) in the Committee.

30. So far as the employers’ representation is concerned, we find that there exists a nexus between the persons who are nominated and for whom they are nominated. We also find that the employees who are nominated, are working as Head of Human Resources Department in their respective 18 organizations (see at serial Nos. 4, 7, 8 and 9), they are thus well-versed in the subject in question by virtue of the posts held by them in their respective employment.

31. In our opinion, we have not been able to notice any flaw or illegality in the constitution of the Committee or/and in nominating the members by the State. It is in accordance with the requirement of Section 9 of the Act and hence does not call for any interference. It was, therefore, rightly repelled by the Single Judge and Division Bench of the High Court.

32. There is no challenge to the constitution of Committee on any other ground except the one which we have dealt with supra. In this view of the matter, the impugned judgment deserves to be upheld. It is accordingly upheld.

33. In the light of foregoing discussion, we find no merit in the appeal, which fails and is accordingly dismissed. In SLP (C) No.15791 of 2017 In view of the judgment rendered above in appeal arising out of S.L.P.(C) No.16602 of 2017, the special leave petition is, accordingly, dismissed.

An employee engaged for the same work, cannot be paid less than another, who performs the same duties and responsibilities.

02-01-2017-YASH PAL

Supreme Court-min

KEYWORDS:-Temporary workers-Minimum wages

IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION

WRIT PETITION (CIVIL) NO. 616 OF 2013

YASH PAL & ORS …. PETITIONERS

VERSUS

UNION OF INDIA & ORS …..RESPONDENTS

WITH WRIT PETITION (CIVIL) NO. 912 OF 2013

Bench: T.S. Thakur, D.Y. Chandrachud

J U D G M E N T

Dr D Y CHANDRACHUD, J

The petitioners – twenty nine of men – have been engaged as porters in the Indian Army as casual labouror daily wage employees in the border areas of Rajouri, Jammu and Poonch. Annexure P-1 to the writ petition, which has been instituted under Article 32 of the Constitution of India, contains photocopies of identity cards issued by the army authorities. The grievance is that the petitioners have not been treated as regular employees and have been denied the benefit of minimum pay-scales despite long years of service in arduous conditions prevalent in a difficult terrain. According to the petitioners, many of them have worked for long years. Details have been furnished of the period over which they have been engaged in the writ proceedings. The relief which they seek is in the following terms :

“(a) ..an appropriate writ in the nature of mandamus or any other writ, direction or order commanding respondents to treat petitioners as regular civilian employees in the Indian Army and extend them all benefits which are being given to the regularly appointed / recruited porters discharging..identical work by treating already rendered services by the petitioners as .. by regularly appointed/recruited porters.” 2 Similarly situated porters engaged by the Indian Army as casual labour instituted a proceeding before the Armed Forces Tribunal at its Principal Bench in New Delhi.[1] By a judgment dated 11 May 2010, the Tribunal held that since the porters are not subject to statutory provisions which govern the Army, Navy and Air Force, their grievance did not fulfil the definition of a ‘service matter’ under Section 3(o) of the Armed Forces Tribunal Act, 2007. Hence by the judgment of the Tribunal, the application was dismissed.

3 Special Leave Petitions were moved before this Court which eventually resulted in a judgment dated 14 May 2013 in Isher Singh v. Union of India[2]. Leaving open the issue of jurisdiction, a Bench of two learned Judges of this Court held that the appellants were working for between fifteen and twenty years. Hence, in the view of the Court, the observations contained in paragraph 53 of the decision of a Constitution Bench of this Court in Secretary, State of Karnataka v. Uma Devi[3] “would come in their aid”. For convenience of reference the observations in Uma Devi have been extracted below :

“53. One aspect needs to be clarified. There may be cases where irregular appointments (not illegal appointments) as explained in State of Mysore vs. S.V. Narayanappa (1967) 1 SCR 128, R.N.Nanjundappa vs. T. Thimmiah (1972) 1 SCC 409 and B.N.Nagarajan vs. State of Karnataka (1979) 4 SCC 507, and referred to in paragraph 15 above, of duly qualified persons in duly sanctioned vacant posts might have been made and the employees have continued to work for ten years or more but without the intervention of orders of courts or of tribunals. The question of regularization of the services of such employees may have to be considered on merits in the light of the principles settled by this Court in the cases above referred to and in the light of this judgment. In that context, the Union of India, the State Governments and their instrumentalities should take steps to regularize as a one time measure, the services of such irregularly appointed, who have worked for ten years or more in duly sanctioned posts but not under cover of orders of courts or of tribunals and should further ensure that regular recruitments are undertaken to fill those vacant sanctioned posts that require to be filled up, in cases where temporary employees or daily wagers are being now employed. The process must be set in motion within six months from this date. We also clarify that regularization, if any already made, but not subjudice, need not be reopened based on this judgment, but there should be no further by-passing of the constitutional requirement and regularizing or making permanent, those not duly appointed as per the constitutional scheme.”

The appeals were disposed of by directing the Union government to consider the case of the appellants considering their past service record, within a period of four months.

4 Contempt petitions were filed before this Court with a grievance that the judgment had not been complied with.[4] By an order dated 23 September 2015 this Court took on the record a decision taken by the Union Ministry of Defence in the following terms :

“Hon’ble Supreme Court, during the course of hearing of above Contempt Petitions on the above mentioned case, has observed that some benefits/ex- gratia should be paid to those porters who worked for a specified number of years say 10 or 12.

2. The issue of giving some additional benefits to these petitioners has been considered in the Ministry in deference to the above observation of the Hon’ble Supreme Court.

3. In recognition of the services rendered by these petitioners for Indian Army in operationally active areas having life threatening conditions, it is proposed that these petitioners engaged at the border posts of Army along the LOC for a minimum period of 10 years, be paid an honorarium of Rs.50,000/- (Rs. Fifty thousand only). The payment of honorarium is being granted as a special dispensation and as a onetime measure. The above decision should not be treated as a precedent.” While dealing with the question of regularization, the court noted the submission of the Union government that the employment of porters is “absolutely seasonal” and that when the earlier civil appeals were disposed of, there was no direction to regularize the services of the porters. After recording this submission, this Court held thus :

“In our considered opinion, there cannot be a direction for regularization.” However, the Court (having regard to the hazardous conditions in which the porters have to work, facing injury and disability and in some cases death) suggested to the Union Ministry of Defence to frame a scheme which would govern porters who suffer injury or disability. The Court directed that the scheme shall also contain provisions for the payment of compensation to the families of civilians who meet with death while working as porters. This Court noted that a roster is maintained when civilians are engaged as porters. The contempt petitions were disposed of with the following observations :

“Before parting with this application for contempt, we may note that if the authorities feel appropriate, apart from what we have stated hereinabove, they can frame a better scheme so that these seasonal porters feel secured. The competent authorities shall discuss with the Chief of Army Staff or the officers deputed by him and work out the modes so that there is real enthusiasm to take these kinds of risky jobs.

Professor Bhim Singh also submitted with agony that unless economic security is provided to this category of porters, who because of the basic livelihood take up such jobs, may not feel that they are not being looked after. We hope and trust, the authorities who engage them shall understand and appreciate their agony, anguish and the need and proceed as suggested by us”.

5 The issue as to whether the porters are entitled to regularization has been dealt with first in the judgment dated 14 May 2013 and subsequently in the order disposing of the contempt petitions on 23 September 2015. The Bench hearing the civil appeals had left it open to the Union government to consider the case of the porters having regard to their past service record in the light of para 53 of the decision of the Constitution Bench in Uma Devi. In the contempt proceedings the plea for regularization was not accepted and the Court observed that a direction for regularization could not be granted. However, it was left open to the Union government to frame a better scheme so that the porters feel secure. We may also note here that the plea for regularization was not declined in the original judgment of 14 May 2013. In fact, this Court had adverted to the observations in para 53 of the decision in Uma Devi.

6 In response to the present proceedings, a counter affidavit has been filed on behalf of the respondents stating that (i) of the petitioners who have moved this Court, only the first and second petitioners have been working since 1998 while the others have been recruited after 2000; and

(ii) petitioners eleven to sixteen have been engaged since 2010. It has been stated that with the acceptance of the recommendations of the Sixth Pay Commission, Group D posts were upgraded to Group C posts as a result of which the former stand abolished. The implications of this have been set out in a memorandum of the Union government in the Ministry of Personnel (Department of Personnel and Training) dated 30 April 2010, followed by a clarificatory memorandum. In the present case, it has been submitted that casual labour is engaged when required on “Nerrik Rates” as approved by the station headquarters.

7 Relying upon the above mentioned contentions in the counter affidavits, Mr P.S.Patwalia, learned Additional Solicitor General and Mr R Balasubramanian, learned counsel have submitted that they are no sanctioned posts against which the petitioners can be regularized. Direct recruitmentis to Group C posts and for posts of multi-tasking staff, minimum qualifications and age criteria have to be fulfilled.

8 During the course of the hearing of these proceedings, an order was passed on 29 July 2016 allowing the Additional Solicitor General to take instructions on the willingness of the Union government to formulate a suitable policy or scheme for providing better working conditions “and related matters” for a large number of porters working with the Indian Army. A draft was filed before this Court of a proposed scheme and the court was apprised that given sufficient time, the Union government would formulate a proper scheme. The proceedings have thereafter been stood over on 22 August 2016, 14 September 2016 and 30 September 2016. On 30 September 2016, the Court was informed that the Union government “is seriously considering the steps that will ameliorate the conditions of porters serving with the Army”.

9 In the meantime,an affidavit has been filed stating that a scheme has been finalized by the Ministry of Defence in consultation with the Indian Army for the engagement of “seasonal civilian labour in high risk/highly active field areas” in pursuance of the observations contained in the order of this Court. The scheme has been produced as Annexure R-1A to the affidavit. We may note at this stage, that the court has been informed by the learned Additional Solicitor General that the scheme which has been placed on the record is now awaiting approval of the competent authority. The learned ASG and Mr R Balasubramanian have taken pains to pursue the matter at all levels of the government and have assured the Court that the plea for dignified conditions for these porters is engaging active attention.

10 The Indian Army engages twelve thousand porters. The nature of the work which is rendered by the porters engaged as casual labour by the Army is not in dispute. They are engaged, as the affidavit of the Union government indicates, in “high risk/highly active field areas”. The decision which was taken earlier (and referred to in the order dated 23 September 2015) referred to the work being rendered by the porters in “operationally active areas having life threatening conditions.” These porters are civilians who possess an innate knowledge of the terrain and its hazards. The proposed scheme indicates in a fair measure the nature of the work which the porters perform, in the following terms :

“Hiring of Seasonal Porters Concert with Ministry of Defence policy letter, “Seasonal Porters and Animals will be hired for bona fide duties, to enhance the operational efficiency of troops. They will be utilized for carriage of stores, stocking of posts, collection of water for troops, carriage and replenishment of ammunition, beating of tracks, snow clearance, conveyance of private mail and evacuation of serious casualties”. (emphasis supplied) By all accounts, there is no element of doubt that the porters provide valuable support to the Indian Army and are an integral, if not indispensable, requirement of operations in border areas. They are engaged for the carriage of stores, stocking of posts, collection of water, replenishment of ammunition, clearance of tracks and evacuation of casualties. In high altitudes of the north and north-east, the porters trudge along with their mules, ponies and donkeys in terrain inaccessible to any other form of transport. They belong to the poorest strata of society. Many of the porters may not possess educational qualifications. However, the value addition which they provide to the Indian Army in terms of their knowledge of conditions makes them a sure footed ally in hostile conditions. To look at their work from a metro centric lens is to miss the wood for the trees. They work, albeit as casual labour, for long years with little regard of safety. Faced with disability, injury and many times death, their families have virtually no social security. Such a situation cannot be contemplated having regard to the mandate in Articles 14 and 16 of the Constitution.

11 This Court consistent with the position in law and the background of this case in regard to regularization may not be in a position to issue a mandamus to the Union government to regularise but surely that does not prevent the government from taking a robust view of reality in consultation with the Armed Forces whom the porters serve with diligence and loyalty. The scheme which has been proposed undoubtedly marks a welcome improvement over the present conditions of porters and we appreciate the steps which have been pursued by Mr P. S. Patwalia, learned Additional Solicitor General, Mr R Balasubramanian, learned Counsel assisting him and by the concerned officials of the Ministry of Defence and the Indian Army to ensure a just resolution. The scheme as proposed contains provisions for

The scheme as proposed contains provisions for:

(i) maintenance of records of hiring; (ii) paid weekly and national holidays; (iii) hours of work and a six day week; (iv) medical facilities in emergent circumstances; (v) compensation in the event of death or permanent disability; (vi) canteen services; (vii) insurance cover; and (viii) a onetime financial grant on severance.

12 In State of Punjab v. Jagjit Singh , this Court has recently revisited the entire body of law on the subject. The Court observed that the principle of equal pay for equal work has been extended to temporary employees (differently described as work – charge, daily wage, casual, ad- hoc, contractual and the like).

The principles have been succinctly summarised thus :

“79. In our considered view, it is fallacious to determine artificial parameters to deny fruits of labour. An employee engaged for the same work, cannot be paid less than another, who performs the same duties and responsibilities. Certainly not, in a welfare state. Such an action besides being demeaning, strikes at the very foundation of human dignity. Any one, who is compelled to work at a lesser wage, does not do so voluntarily. He does so, to provide food and shelter to his family, at the cost of his self respect and dignity, at the cost of his self worth, and at the cost of his integrity. For he knows, that his dependents would suffer immensely, if he does not accept the lesser wage. Any act, of paying less wages, as compared to others similarly situate, constitutes an act of exploitative enslavement, emerging out of a domineering position. Undoubtedly, the action is oppressive, suppressive and coercive, as it compels involuntary subjugation.”

13 There are three areas where we propose to issue directions to the Union government, and accordingly do so in the following terms.

Firstly, the scheme as proposed provides for the payment of minimum wages at the prevailing ‘Nerrik Rates’. This aspect requires a fresh look so that the porters are paid wages at par at the lowest pay-scale applicable to multi- tasking staff. Further, if there are provisions enabling additional payments to be made (either by way of allowances or otherwise) for work in high altitude areas or in high risk/active field areas, such payments shall be allowed under the scheme. Secondly, the scheme must provide for regular medical facilities including in the case of injury or disability. Thirdly, the amount of compensation in the case of death or permanent disability should also be looked at afresh and suitably enhanced. The present scheme provides for an interim relief of rupees twenty thousand to be sanctioned at the discretion of the local formation commander. A maximum payment of Rupees two lakhs as applicable under the Workmen’s Compensation Act, 1923 is contemplated. The provision for compensation shall be enhanced to provide for dignified payments in the event of death or disability. Fourthly, a one-time severance grant of rupees fifty thousand is provided in the proposed scheme subject to a minimum service of ten years. This measly payment on severance does not fulfil the mandate of fairness, on the part of the State. We direct that the terminal benefits should be enhanced so as to provide for compensation not less than at a rate computed at fifteen days’ salary for every completed year of service. The Union government shall bear in mind these directions in the course of the finalization of the scheme which shall be done within the next three months.

14 During the course of the hearing, the learned Additional Solicitor General indicated that the formulation of a proposal for regularization is under consideration. It has also been stated during the course of the submissions that the proposal may envisage regularizing army porters who have rendered service for a stipulated period upto five per cent of the sanctioned strength of multi-tasking staff. Since the pool of porters is large, the number of persons who may benefit from such a proposal every year may be minimal. This is an aspect which should be duly borne in mind while enhancing the proportion of the sanctioned strength for regularization; in order that the benefit of security of tenure is made available to a reasonable proportion of persons who complete a stipulated minimum tenure of service. The competent authority will consider this aspect while taking a decision in the matter.

15 The writ petitions are accordingly disposed of in the above terms.

 [T S THAKUR]

 [Dr D Y CHANDRACHUD] New Delhi January 02, 2017.

New Delhi January 02, 2017.

Hindustan Tin Works Pvt. Ltd Versus The Employees of M/s. Hindustan Tin Works Pvt. Ltd.

07-09-1978

Supreme Court-min

Industrial Disputes Act, 1947-from being a factor of production the labour has become a partner in industry

AIR 1979 SC 75 : (1979) 1 SCR 563 : (1979) 2 SCC 80

(SUPREME COURT OF INDIA)

Hindustan Tin Works Pvt. Ltd Appellant
Versus
The Employees of M/s. Hindustan Tin Works Pvt. Ltd. and others Respondent

(Before : V. R. Krishna Iyer, D. A. Desai And O. Chinnappa Reddy, JJ.)

Civil Appeal No. 656 of 1978,

Decided on : 07-09-1978.

Constitution of India, 1950—Article 136—U.P. Industrial Disputes Act, 1947—Sections 4K and 6—Article 136 of the constitution does not envisage this Court to be a regular Court of Appeal but it confers a discretionary power on the Supreme Court to grant special leave to appeal, inter alia, against the Award of any Tribunal in the territory of India. The scope and ambit of the wide constitutional discretionary power cannot be exhaustively defined. It cannot obviously be so construed as to confer a right to a party when he has none under the law. The Court will entertain a petition for special leave in which a question of general pubic importance is involved or when the decision would shock the conscience of this Court. The Industrial Disputes Act is intended to be a self-contained one and it seeks to achieve social justice on the basis of collective bargaining, conciliation and arbitration. Awards are given on circumstances peculiar to each dispute and the Tribunals are to a large extent free from restrictions of technical considerations imposed on courts. A free and liberal exercise of the power under Art. 136 may materially affect the fundamental basis of such decision, viz., quick solution of such disputes to achieve industrial peace. Though Art. 136 is couched in widest terms, it is necessary for this Court to exercise its discretionary jurisdiction only in cases where Awards are made in violation of the principles of natural justice causing substantial and grave injustice to parties or raises an important principle of industrial law requiring elucidation and final decision by this Court or discloses such other exceptional or special circumstances which merit consideration of this Court (See Bengal Chemical and Pharmaceutical Works Ltd., Calculatta v. Their Workmen, 1959 Supp (2) SCR 136)

Counsel for the Parties:

Mr. G. B. Pai, Sr. Advocate (M/s. L. R. Singh, R. P. Singh, R. K. Jain, Suman Kapoor and Sukumar Sahu, Advocates with him), for Appellant

M/s. R. K. Garg, V. J. Francis and Madan Mohan Advocates (for No. 1) and Mr. G. N. Dikshit, Sr. Advocate (Mr. O. P. Rana, Advocate with him) (fir Nos. 2, 3), for Respondents.

Judgement

D. A. Desai, J—This appeal by special leave, limited to the question of grant of back wages, raises a very human problem in the field of industrial jurisprudence, namely, where termination of service either by dismissal, discharge or even retrenchment is held invalid and the relief of reinstatement with continunity of service is awarded what ought to be the criterion for grant of compensation, to the extent of full wages or a part of it?

2. A few relevant facts will highlight the prolem posed. Appellant is a private Limited Company having set up an industrial unit in engineering industry. The raw material for its manufacturing process is tin plates. The appellant served notice of retrenchment on 56 workmen in February, 1974 alleging non-availability of raw material to utilise the full installed capacity, power shedding limiting the working of the unit to 5 days a week, and the mounting loss. Subsequently, negotiations took place between the Union and the appellant leading to an agreement dated 1st April, 1974 whereby the workmen who were sought to be retrenched were taken back in service with continuity of service by the appellant and the workmen on their part agreed to co-operate with the management in implementing certain economy measures and in increasing the productivity so as to make the undertaking economically violable. Simultaneously, the workmen demanded a revision of the wage scales and the appellant pleaded its inability in view of the mounting losses. Some negotiations took place and a draft memorandum of settlement was drawn up which provided for revision of wages on the one hand and higher norms of production on the other, but ultimately the settlement fell through. Appellant thereafter on 1st July, 1974 served a notice of retrenchment on 43 workmen. The Tin Workers’ Union, Ghaziabad, espoused the cause of such retrenched workmen and ultimately the Government of Uttar Pradesh by its notification dated 9th October, 1974, issued in exercise of the power conferred by s. 4-K of the U. P. Industrial Disputes Act, 1947, referred the industrial dispute arising out of retrenchment of 43 workmen, between the parties, for adjudication to the Labour Court. Names of the retrenched workmen were set out in an Annexure to the order of reference.

3. The Labour Court, after examining the evidence led on both sides and considering various relevant circumstances, held that the reasons stated in the notice dated 1st July, 1974, Ext. E-2, viz., heavy loss caused by nonavailability of tin plates, persistent power curbs and mounting cost of production, were not the real reasons for effecting retrenchment but the real reason was the annoyance felt by the management consequent upon the refusal of the workmen to agree to the terms of settlement contained in the draft dated 5th April, 1974 and, therefore, the retrenchment was illegal. The Labour Court by its award directed that all the workmen shall be reinstated in service from 1st August, 1974 with full back wages, permitting the appellant deduct any amount paid as retrenchment compensation from the amount payable to the workmen as back wages. The appellant challenged the Award in this appeal. When the special leave petition came up for admission, this Court rejected the special leave petition with regard to the relief of reinstatement but limited the leave to the grant of full back wages.

4. The question whether the workmen who were retrenched were entitled to the relief of reinstatement is no more open to challenge. In other words, it would mean that the retrenchment of workmen was invalid for the reasons found by the Labour Court and the workmen were entitled to the relief of reinstatement effective from the day on which they were sought to be retrenched. The workmen were sought to be retrenched from 1st August, 1974 and the Labour Court has directed their reinstatement effective from that date. The Labour Court has also awarded full back wages to the workmen on its finding that the retrenchment was not bona fide and that the non-availability of the raw material or recurrent power shedding any lack of profitability was a mere pretence or a ruse to torment the workmen by depriving them of their livelihood, the real reason being the annoyance of the appellant consequent upon the refusal of the workmen to be a party to a proposed settlement by which work-load was sought to be raised.

5. Mr. Pai, learned counsel for the appellant in his attempt to persuade us to give something less than full back wages, attempted to re-open the controversy concluded by the order of this Court while granting limited leave that the retrenchment was inevitable in view of the mounting losses and falling production for want of raw material and persistent power shedding. It was said that for the limited purpose of arriving at a just decision on the question whether the workmen should be awarded full back wages, we should look into the compelling necessity for retrenchment of the workmen. Once leave against relief of reinstatement was rejected, the order of the Labour Court holding that retrenchment was invalid and it was motivated and the relief of reinstatement must follow, has become final. Under no pretext or guise it could now be re-opened.

6. Before dealing with the contentions in this appeal we must bear in mind the scope of jurisdiction of this Court under Art. 136 of the Constitution vis-a-vis the Awards of the Industrial Tribunal. Article 136 of the constitution does not envisage this Court to be a regular Court of Appeal but it confers a discretionary power on the Supreme Court to grant special leave to appeal, inter alia, against the Award of any Tribunal in the territory of India. The scope and ambit of the wide constitutional discretionary power cannot be exhaustively defined. It cannot obviously be so construed as to confer a right to a party when he has none under the law. The Court will entertain a petition for special leave in which a question of general pubic importance is involved or when the decision would shock the conscience of this Court. The Industrial Disputes Act is intended to be a self-contained one and it seeks to achieve social justice on the basis of collective bargaining, conciliation and arbitration. Awards are given on circumstances peculiar to each dispute and the Tribunals are to a large extent free from restrictions of technical considerations imposed on courts. A free and liberal exercise of the power under Art. 136 may materially affect the fundamental basis of such decision, viz., quick solution of such disputes to achieve industrial peace. Though Art. 136 is couched in widest terms, it is necessary for this Court to exercise its discretionary jurisdiction only in cases where Awards are made in violation of the principles of natural justice causing substantial and grave injustice to parties or raises an important principle of industrial law requiring elucidation and final decision by this Court or discloses such other exceptional or special circumstances which merit consideration of this Court (See Bengal Chemical and Pharmaceutical Works Ltd., Calculatta v. Their Workmen, (1959) 2 Suppl. SCR 136 at page No. 140.

7. The question in controversy which fairly often is raised in this Court is whether even where reinstatement is found to be an appropriate relief, what should be the guiding considerations for awarding full or partial back wages. This question is neither new nor raised for the first time. It crops up every time when the workman questions the validity and legality of termination of his service howsoever brought about, to wit, by dismissal, removal, discharge or retrenchment, and the relief of reinstatement is granted. As a necessary corollary the question immediately is raised as to whether the workman should be awarded full back wages or some sacrifice is expected of him.

8. Let us steer clear of one controversy whether where termination of service is found to be invalid, reinstatement as a matter of course should be awarded or compensation would be an adequate relief. That question does not arise in this appeal. Here the relief of reinstatement has been granted and the award has been implemented and the retrenched workmen have been reinstated in service. The only limited question is whether the Labour Court in the facts and circumstances of this case was justified in awarding full back wages.

9. It is no more open to debate that in the field of industrial jurisprudence a declaration can be given that the termination of service is bad and the workmen continues to be in service. The spectre of common law doctrine that contract of personal service cannot be specifically enforced or the doctrine of mitigation of damages does not haunt in this branch of law. The relief of reinstatement with continuity of service can be granted where termination of service is found to be invalid. It would mean that the employer has taken away illegally the right to work of the workman contrary to the relevant law or in breach of contract and simultaneously deprived the workman of his earnings. If thus the employer is found to be in the wrong as a result of which the workman is directed to be reinstated, the employer could not shirk his responsibility of paying the wages which the workman has been deprived of by the illegal or invalid action of the employer. Speaking reaslistically, where termination of service is questioned as invalid or illegal and the workman has to go through the gamut of litigation, his capacity to sustain himself throughout the protracted litigation is itself such an awesome factor that he may not survive to see the day when relief is granted. More so in our system where the law’s proverbial delay has become stupefying. If after such a protracted time and energy consuming litigation during which period the workman just sustains himself, ultimately he is to be told that though he will be reinstated, he will be denied the back wages which would be due to him, the workman would be subjected to a sort of penalty for no fault of his and it is wholly undeserved. Ordinarily, therefore, a workman whose service has been illegally terminated would be entitled to full back wages except to the extent he was gainfully employed during the enforced idleness. That is the normal rule. Any other view would be a premium on the unwarranted litigative activity of the employer. If the employer terminates the service illegally and the termination is motivated as in this case, viz., to resist the workmen’s demand for revision of wages, the termination may well amount to unfair labour practice. In such circumstances reinstatement being the normal rule, it should be followed with full back wages. Articles 41 and 43 of the Constitution would assist us in reaching a just conclusion in this respect. By a suitable legislation, to wit, the U. P. Industrial Disputes Act, 1947, the State has endeavoured to secure work to the workmen. In breach of the statutory obligation the services were terminated and the termination is found to the invalid; the workmen though willing to do the assigned work and earn their livelihood, were kept away, therefrom. On top of it they were forced to litigation up to the apex Court and now they are being told that something less than full back wages should be awarded to them. If the services were not terminated the workmen ordinarily would have continued to work and would have earned their wages. When it was held that the termination of services was neither proper nor justified, it would not only show that the workmen were always willing to serve but if they rendered service they would legitimately be entitled to the wages for the same. If the workmen were always ready to work but they were kept away therefrom on account of invalid act of the employer, there is no justification for not awarding them full back wages which were very legitimately due to them. A Division Bench of the Gujarat High Court in Dhari Gram Panchayat v. Safai Kamdar Mandal, (1971) 1 Lab LJ 508 and a Division Bench of the Allahabad High Court in Postal Seals Industrial Co-operative Society Ltd. v. Labour Court, Lucknow, (1971) 1 Lab LJ 327 have taken this view and we are of the opinion that the view taken therein is correct.

10. The view taken by us gets support from the decision of this Court in Workmen of Calcutta Dock Labour Board v. Employers in relation to Calcutta Dock Labour Board, (1974) 3 SCC 216. In this case seven workmen had been detained under the Defence of India Rules and one of the disputes was that when they were released and reported for duty, they were not taken in service and the demand was for their reinstatement. The Tribunal directed reinstatement of five out of seven workmen and this part of the Award was challenged before this Court. This court held that the workmen concerned did not have any opportunity of explaining why their service should not be terminated and, therefore, reinstatement was held to be the appropriate, relief, and set aside the order of the Tribunal. It was observed that there was no justification for not awarding full back wages from the day they offered to resume work till their reinstatement. Almost an indentical view was taken in Management of Panitole Tea Estate v. The Workmen, (1971) 3 SCR 774.

11. In the very nature of things there cannot be a strait-jacket formula for awarding relief of back wages. All relevant considerations will enter the verdict. More or less, it would be a motion addressed to the discretion of the Tribunal. Full back wages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure. At that stage the Tribunal will exercise its discretion keeping in view all the relevant circumstances. But the discretion must be exercised in a judicial and judicious manner. The reason for exercising discretion must be cogent and convincing and must appear on the face of the record. When it is said that something is to be done within the discretion of the authority, that something is to be done according to the rules of reason and justice, according to law and not humour. It is not to be arbitrary, vague and fanciful but legal and regular (See Susannah Sharp v. Wakefield, 1891 AC 173 at page No. 179).

12. It was, however, very strenuously contended that as the appellant company is suffering loss and its carry-forward loss as on 31 st March, 1978 is ` 8, 12, 416, 90, in order to see that the industry survives and the workmen continue to get employment, there must be some sacrifice on the part of workmen. If the normal rule in a case like this is to award full back wares, the burden will be on the appellant employer to establish circumstances which would permit a departure from the normal rule. To substantiate the contention that this is an exceptional case for departing from the normal rule it was stated that loss is mounting up and if the appellant is called upon to pay full back wages in the aggregate amount of ` 2,80,000/-, it would shake the financial viability of the company and the burden would be unbearable. More often when some monetary claim by the workmen is being examined, this financial inability of the company consequent upon the demand being granted is voiced. Now, undoubtedly an industry is a common venture, the participants being the capital and the labour. Gone are the days when labour was considered a factor of production. Article 43-A of the Constitution requires the State to take steps to secure the participation of workmen in the management of the undertaking, establishments or other organisation engaged in any industry. Thus, from being a factor of production the labour has become a partner in industry. It is a common venture in the pursuit of desired goal.

13. Now, it a sacrifice is necessary in the overall interest of the industry or a particular undertaking, it would be both unfair and inequitous to expect only one partner of the industry to make the sacrifice. Pragmatism compels common sacrifice on the part of both. The sacrifice must come from both the partners and we need not state the obvious that the labour is a weaker partner who is more often called upon to make the sacrifice. Sacrifice for the survival of an industrial undertaking cannot be a unilateral action. It must be a two way traffic. The management need not have merry time to itself making the workmen the sacrificial goat. If sacrifice is necessary, those who can afford and have the cushion and the capacity must bear the greater brunt making the shock of sacrifice as less poignant as possible for those who keep body and soul together with utmost difficulty.

14. The appellant wants us to give something less than full back wages in this case which the Labour Court has awarded. There is nothing to show whether the Managing Director has made any sacrifice; whether his salary and perks have been adversely affected; whether the managerial coterie has reduced some expenses on itself. If there is no such material on record, how do we expect the workmen, the less affording of the weaker segment of the society, to make the sacrifice, because sacrifice on their part is denial of the very means of livelihood.

15. We have also found that since 1976-77 the appellant is making profit. A Statement of Account certified by the Chartered Accountants of the company dated 25th July, 1978 shows that the appellant has been making profit since 1976-77. The unit is, therefore, looking up.

16. One relevant aspect which would assist us in reaching a just conclusion is that after retreating 43 workmen effective from 1st August 1974, 36 of them were recalled for service on a large number of days in 1975, 1976 and 1977, the maximum being the case of Jai Hind who was given work for 7241/2 days, and the minimum being Harsaran s/o Baldev who was given work for 15 days. An amount of ` 74.587.26 was paid to these 36 workmen for the work rendered by them since the date of retrenchment. Certainly, the appellant would get credit for the amount so paid plus the retrenchment compensation it must have paid. Even then we were told that the employer will have to pay ` 2,80,000/- by way of back wages. We were also told that the appellant had offered to pay by way of settlement 50 per cent of the back wages. There fore, the only question is whether we should confirm the Award for full back wages.

17. Now, undoubtedly the appellant appears to have turned the corner. The industrial unit is looking up. It has started making profits. The workmen have already been reinstated and, therefore, they have started earning their wages. It may, however, be recalled that the appellant has still not cleared its accumulated loss. Keeping in view all the facts and circumstances of this case it would be appropriate to award 75 per cent. of the back wages to the workmen to be paid in two equal instalments.

18. It may well be that in appropriate cases the Court may, in the spirit of labour and management being partners in the industry, direct scaling down of back wages with some sacrifice on management’s part too. We were, even here, inclined to saddle the condition that till the loss is totally wiped out the Managing Director and the Directors shall not charge any fee for the service rendered as Director, no dividend shall be paid to equity shareholders, and the Managing Director shall not be paid any overriding commission, if there be any, on the turnover of the company since this will account for the pragmatic approach of common sacrifice in the interest of the industry. We indicate the implications of Art. 43-A in this area of law but do not impose it here for want of fuller facts. 19. The Award shall stand accordingly modified to the effect that the retrenched workmen who are now reinstated shall be paid 75 per cent, of the back wages after deducting the amount paid to them as wages when recalled for work since the date of retrenchment and adjustment of the retrenchment compensation towards the amount found due and payable. The appellant shall pay the costs of the respondents quantified at ` 2,000/- as directed while granting special leave.

 

Wages minimum

Tagwages– Means all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, [and includes house rent allowance], but does not include—
(i) the value of—
(a) any house-accommodation, supply of light, water, medical attendance, or
(b) any other amenity or any service excluded by general or special order of the
appropriate Government;
(ii) any contribution paid by the employer to any Pension Fund or Provident Fund or under any scheme of social insurance;
(iii) any travelling allowance or the value of any travelling concession;
(iv) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or
(v) any gratuity payable on discharge;


S22. Penalties for certain offences.—Any employer who—
(a) pays to any employee less than the minimum rates of wages fixed for that employee’s class of work, or less than the amount due to him under the provisions of this Act, or (b) contravenes any rule or order made under section 13,
shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five hundred rupees, or with both:
Provided that in imposing any fine for an offence under this section, the Court shall take into consideration the amount of any compensation already awarded against the accused in any proceedings taken under section 20.

Cognizance of offences.—(1) No Court shall take cognizance of a complaint against any person for an offence—
(a) under clause (a) of section 22 unless an application in respect of the facts constituting such offence has been presented under section 20 and has been granted wholly or in part, and the appropriate Government or an officer authorised by it in this behalf has sanctioned the making of the complaint;
(b) under clause (b) of section 22 or under section 22A except on a complaint made by, or with the sanction of, an Inspector.
(2) No Court shall take cognizance of an offence—
(a) under clause (a) or clause (b) of section 22, unless complaint thereof is made within one month of the grant of sanction under this section;
(b) under section 22A, unless complaint thereof is made within six months of the date on which the offence is alleged to have been committed.

Bar of suits—No Court shall entertain any suit for the recovery of wages


BULLET 2Employee” means any person who is employed for hire or reward to do any work, skilled or unskilled, manual or clerical, in a scheduled employment in respect of which minimum rates of wages have been fixed; and includes an out-worker to whom any articles or materials are given out by another person to be made up, cleaned, washed, altered, ornamented, finished, repaired, adapted or otherwise processed for sale for the purposes of the trade or business of that other person where the process is to be carried out either in the home of the out-worker or in some other premises not being premises under the control and management of that other person; and also includes an employee declared to be an employee by the appropriate Government; but does not include any member of the Armed Forces of the Union.


Maintenance of registers and records.—(1) Every employer shall maintain such registers and records giving such particulars of employees employed by him, the work performed by them, the wages paid to them, the receipts given by them and such other particulars and in such form as may be prescribed.
(2) Every employer shall keep exhibited, in such manner as may be prescribed, in the factory, workshop or place where the employees in the scheduled employment may be employed, or in the case of out-workers, in such factory, workshop or place as may be used for giving out-work to them, notices in the prescribed form containing prescribed particulars.
(3) The appropriate Government may, by rules made under this Act, provide for the issue of wage books or wage slips to employees employed in any scheduled employment in respect of which minimum rates of wages have been fixed and prescribe the manner in which entries shall be made and authenticated in such wage books or wage slips by the employer or his agent.


S 20. Claims.—(1) The appropriate Government may, by notification in the Official Gazette, appoint  [any Commissioner for Workmen’s Compensation or any officer of the Central Government exercising functions as a Labour Commissioner for any region, or any officer of the State Government not below the rank of Labour Commissioner or any other officer with experience as a Judge of a Civil Court or as a stipendiary Magistrate to be the Authority to hear and decide for any specified area all claims arising out of payment of less than the minimum rates of wages or in respect of the payment of remuneration for days of rest or for work done on such days under clause (b) or clause (c) of sub-section (1) of section 13 or of wages at the overtime rate under section 14,] to employees employed or paid in that area.

Dock worker”

TagDock worker:  means a person employed or to be employed in, or in the vicinity of, any port on work in connection with the loading, unloading, movement or storage of cargoes, or work in connection with the preparation of ships or other vessels for the receipt or discharge of cargoes or leaving port;

Scheme for employment

S 3. Scheme for ensuring regular employment of workers.—(1) Provision may be made by a scheme for the registration of dock workers and employers with a view to ensuring greater regularity of employment and for regulating the employment of dock workers, whether registered or not, in a port.
(2) In particular, a scheme may provide—
(a) for the application of the scheme to such classes of dock workers and employers as may be specified therein;
(b) for defining the obligations of dock workers and employers subject to the fulfilment of which the scheme may apply to them and the circumstances in which the scheme shall cease to apply to any dock workers or employers;
(c) for regulating the recruitment and entry into the scheme of dock workers, [and the registration of dock workers and employers], including the maintenance of registers, the removal either temporarily or permanently, of names from the registers and the imposition of fees for registration;

(d) for regulating the employment of dock workers, whether registered or not, and the terms and conditions of such employment, including rates of remuneration, hours of work and conditions as to holidays and pay in respect thereof;
(e) for securing that, in respect of periods during which employment, or full employment, is not available for dock workers to whom the scheme applies and who are available for work, such workers will, subject to the conditions of the scheme, receive a minimum pay;
(f) for prohibiting, restricting or otherwise controlling the employment of dock workers to whom the scheme does not apply and the employment of dock workers by employers to whom the scheme does not apply;
[(ff) for creating such fund or funds as may be necessary or expedient for the purposes of the scheme and for the administration of such fund or funds;]
(g) for the training  of dock workers, in so far as satisfactory provision therefore does not
exist apart from the scheme;
[(gg) for the welfare of the officers and other staff of the Board;]
(i) for the manner in which, and the persons by whom, the cost of operating the scheme is to be defrayed;
[(j) for constituting  the authority to be responsible for the administration of the scheme;]
(k) for such incidental and supplementary matters as may necessary or expedient for the purposes of the scheme.
(3) A scheme may further provide that a contravention of any provision thereof shall be punishable with imprisonment for such term as may be specified but in no case exceeding three months in respect of a first contravention or six months in respect of any subsequent contravention, or with fine which may extend to such amount as may be specified but in no case exceeding five hundred rupees in respect of a first contravention or one thousand rupees in respect of any subsequent contravention, or with both imprisonment and fine as aforesaid.


Dock Labour Boards for implementation of Scheme said above

Dock Labour Boards.—(1) The Government may, by notification in the Official Gazette, establish a Dock Labour Board for a port or group of ports to be known by such name as may be specified in the notification.

5B. Functions of a Board.—(1) A Board shall be responsible for administering the scheme for the port or group of ports for which it has been established and shall exercise such powers and perform such functions as may be conferred on it by the scheme.


BULLET 2Calcutta Dock Labour Board was constituted under Section 5A of the Dock Workers (Regulation of Employment) Act, 1948 with the objective of regulation of employment of Dock workers in connection with handling of cargo on board the vessel in the Port of Kolkata within the limits from Konnagar to Budge-Budge. The Board started functioning since 5th October, 1953.There is a 15 member Board, five representing Central Govt., 5 from labour unions and 5 from employers of dock workers and shipping companies. At present the Board is administering two schemes i.e Calcutta Dock Workers (Regulation of Employment) Scheme, 1970 and Calcutta Dock Clerical & Supervisory (Regulation of Employment) Scheme, 1970.

Ref : THE DOCK WORKERS (REGULATION OF EMPLOYMENT) ACT, 1948