ORDERS ACT, 1946 (Central Act No. 20 of 1946) — Purpose of Act — Karnataka Agro Industries Corporation Ltd. ‘industrial establishment’ covered by Act — Applicability of Act to be decided on facts and circumstances of given case.
Petitioner contended that Corporation though in existence since 1967 employing more than 100 workmen, without drafting Standing Orders has been seeking to apply Service Rules to all employees. Corporation resisted the same contending that since persons working in the establishment outnumbered persons working in the workshop, Corporation could not be brought within the provisions of the Act, not being an Industrial Establishment.
Held:
(i) The very purpose of the Standing Orders Act is to require the employers of industrial establishments to define with sufficient precision the conditions of employment under them and to make those conditions known to the workmen employed by them.
(ii) Admittedly, the third Respondent’s establishment consists of five workshops which arc registered under the Factories Act. There workshops employ more than 100 workmen. The workshops under the workshop and management of the third respondent Corp ration are industrial establishments which, in turn, are covered by Section 2(e) of the Standing Orders Act …. Even accepting that hardly 150 workmen of the third Respondent work in the workshops, it will not take the third Respondent outside the meaning of the term ‘industrial establishment’. There could be no doubt that the third Respondent is an industrial establishment which comes within the ambit of the Standing Orders Act. Hence, it is bound to comply with the provisions of Sections 3, 4 and 5 of that Act and cannot bind the workmen to the Service Rules unilaterally prescribed by its Board of Management.
(B) CONSTITUTION OF INDIA – Article 226 — Open to Court to mould reliefs on the facts though not coming within prayers and grant declaratory reliefs.
Regard being had to the wide discretion conferred on this Court under Article 226 of the Constitution, it is always open to this Court to mould the reliefs depending on the facts and circumstances of each case, though such reliefs may not fall within the prayer in the Writ Petition …. It is open to the Court in appropriate cases to grant declaratory reliefs.
ON FACTS:
The Petitioner is entitled to a declaration that the Service Rules framed by the third Respondent are not binding on the workmen and till such time as certified Standing Orders are brought into force by the third Respondent in accordance with the provisions of the Standing Orders Act, the Model Standing Orders provided for under Section 12A of the Act shall be applicable.
The question of applicability of the standing order has to be decided having due regard to the plea and facts in a given case and the general declaration made in the order of the learned Single Judge is not conclusive in respect of all the employees of the Corporation.
ORDER
Bopanna, J.
1. The petitioner, Karnataka Agro Industries Corporation Employees’ Association, is a trade union registered under the Trade Unions Act, 1926, and it is the representative union of the employees of the third respondent-Corporation. It is not in dispute that the third respondent is a Government Company registered under the Companies Act, 1956. The petitioner has sought for a Writ in the nature of Mandamus to the State Government, the first respondent herein, to grant the necessary sanction for prosecuting the third respondent-Corporation under Section 13(3) of the Industrial Employment Standing Orders Act, 1946 (in short, ‘the Standing Orders Act’) and for a further direction to the third respondent not to enforce the Service Rules as they exist now covering the service conditions of its employees.
2. The Learned Counsel for the petitioner submitted that though the third respondent-Corporation came into existence some time in 1967 and had been employing more than 100 workmen, it had never drafted any standing orders as contemplated under Section 3 of the Standing Orders Act and in spite of the petitioner’s demands from time to time, the Corporation had been taking the stand that the Service Rules introduced by it unilaterally should be made applicable to its employees and that it was not obligatory to have any certified standing orders since it was not an establishment covered by the provisions of the Act.
3. On the third respondent’s own assertion, it has five workshops registered under the Factories Act, 1948, in various parts of the State. Its administrative office is situated in Hebbal and it has also a workshop attached to it. However, the learned Counsel for the third respondent maintained that since the persons working in the establishment outnumbered the persons working in the workshop, the Corporation as a whole could not be brought under the provisions of the Standing Orders Act. His contention is that the third respondent is not an industrial establishment within the meaning of Section 2(e) of the Standing Orders Act as an industrial establishment under that provision could be either a factory as defined under the Factories Act, or an establishment as defined in Section 2 of the Payment of Wages Act, but a major part of respondent-3 does not come under either of these definitions.
4. Under the definition of the term ‘industrial establishment’ in Section 2(e) of the Standing Orders Act, a factory is an industrial establishment and if it employs more than 100 persons, it is covered by the Act. Admittedly, the. third respondent’s establishment consists of five workshops which are registered under the Factories Act. These workshops employ more than 100 workmen. Further, under the relevant portion of the definition of the term ‘industrial establishment’ under Section 2 of the Payment of Wages Act, an industrial establishment means a workshop or other establishment in which articles are produced, adapted or manufactured with a view to their use, transport or sale. Any dispute or doubt about the nature of the industrial activities performed by the third respondent Corporation, is removed by its own document which is produced by the learned Counsel for the petitioner in this Court. The third respondent had brought out a report on the service done by it to the farmers of the State for the period 1967 to 1977. In that report, at para 17, a reference is made to the activities of the Central Workshop, Hebbal in the following words :–
“The workshop is well organised with different sections like foundry, engine repairs, fabrication, welding, smithy, carpentry etc. During 1974, the workshop became the production workshop and started manufacturing of agricultural implements, tractors, tractor-hoods etc.”
Therefore, the Workshops under the ownership and management of the third respondent-Corporation are industrial establishments which, in turn, are covered by Section 2(e) of the Standing Orders Act. However, the learned Counsel for third respondent maintained that a major portion of the establishment is outside the purview of the definition of ‘industrial establishment’ since the head-office employs majority of the workmen and these five workshops employ about 150 workmen. Even accepting that hardly 150 workmen of the third respondent work in the workshops, it will not take the third respondent outside the meaning of the term ‘industrial establishment’. The very purpose of the Standing Orders Act is to require the employers of industrial establishments to define with sufficient precision the conditions of employment under them and to make those conditions known to the workmen employed by them. Indisputably, the five workshops of the third respondent which are registered under the Factories Act are covered by the Standing Orders Act. Further, the Head Office in Hebbal is attached to the workshop which is also covered by the Standing Orders Act. In the circumstances, by applying the principle of functional integrality, the Court has to determine whether the head office is also part of the industrial establishment. How this principle has to be established is made clear by the Supreme Court in Associated Cement Co. Ltd. (Chaibasa Cement Works, Jhinkpani)-v.- Their Workmen, 1960 I LLJ 1. The Supreme Court observed :–
“The Act (i.e., the Industrial Disputes Act) not having prescribed any specific tests for determining what is “one establishment”, we must fall back on such considerations as in the ordinary industrial or business sense determine the unity of an industrial establishment, having regard no doubt to the scheme and object of the Act and other relevant provisions of the Mines Act, 1952, or the Factories Act, 1948. What then is “one establishment” in the ordinary industrial or business sense? The question of unity or oneness presents difficulties when the industrial establishment consists of parts, units, departments, branches, etc. If it is strictly unitary in the sense of having one location and one unit only, there is little difficulty in saying that it is one establishment. Where, however, the industrial undertaking has parts, branches, departments, units etc., with different locations, near or distant, the question arises what tests were referred to in the course of arguments before us, such as geographical proximity, unity of ownership, management and control, unity of employment and conditions of service, functional integrality, general unity of purpose, etc.. To most of these we have referred while summarising the evidence of Mr. Dongray and the findings of the tribunal thereon. It is, perhaps, impossible to lay down any one test as an absolute and invariable test for all cases. The real purpose of these tests is to find out the true relation between the parts, branches, units, etc. If in their true relation they constitute one integrated whole, we say that the establishment is on ; if on the contrary, they do not constitute one integrated whole, each unit is then a separate unit. How the relation between the units will be judged must depend on the facts proved, having regard to the scheme and object of the statute which gives the right of unemployment compensation and also prescribes a disqualification therefor. Thus, in one case the unity of ownership, management and control may be the important test ; in another case functional integrality or general unity may be the important test ; and in still another case, the important test may be the unity of employment.”
These observations are, in my View, equally applicable to understand the term ‘industrial establishment’ under the Standing Orders Act. That all these features are present in this case is not denied by the learned, Counsel for the third respondent. In the circumstances, there could be no doubt that the third respondent is an industrial establishment which conies within the ambit of the Standing Orders Act. Hence, it is bound to comply with the provisions of Sections 3A and 5 of that Act and cannot bind the workmen to the Service Rules unilaterally prescribed by its Board of Management.
5. The further point for consideration is whether the petitioner-Association is entitled to all the reliefs that it has prayed for in this petition. In view of the finding that the third respondent is covered by the Standing Orders Act, it (third respondent) is liable to be prosecuted in the manner provided for under Section 13 of the Act. Section 13, however, requires the previous sanction of the Government for the prosecution of the third respondent. It is not necessary to issue any direction to the Government to grant the necessary sanction because Mr. Prabhkar, Learned Counsel for the third respondent, submitted that his client had some bona fide doubt about the applicability of the Standing Orders Act since it was not purely a manufacturing organisation and its action was not wilful. Now that the law is made clear by this Court, the third respondent should implement the provisions of the Act within a reasonable time. The drafting of standing orders and the hearing before the certifying officer after notice to all the unions representing the workmen, will necessarily take considerable time. Hence, taking a reasonable view of the matter, the third respondent is granted six months’ time to implement the provisions of the Act. Till such time, as per the provisions of Section 12-A of the Standing Orders Act, the model standing orders Would be applicable to the workmen of the third respondent. Hence, it is not necessary at this stage to issue any direction to the State Government for according sanction for prosecuting the third respondent.
6. Regarding the second prayer of the petitioner, in the light of the ruling of the Supreme Court in Praga Tools Corporation -v.- Imanual, it is not possible for this Court to issue any Writ in the nature of Mandamus to the third respondent-Corporation since it is a company registered under the Companies Act. But this Court has taken the view that in appropriate cases declaratory reliefs can be granted. Mr. Prabhakar contended that in the absence of any specific prayer for such declaratory relief, this Court cannot grant the same. I am unable to agree with this contention. Regard being had to the wide discretion conferred on this Court under Article 226 of the Constitution, it is always open to this Court to mould the reliefs depending on the facts and circumstances of each case, though such reliefs may not fall within the prayer in the Writ Petition. Hence, as observed by a Division Bench of this Court in Workmen of HMT Ltd. -v.- C. N. Nanjappa, ILR 1984(2) KAR 97 it is open to this Court in appropriate cases to grant declaratory reliefs. Accordingly, the petitioner is entitled to a declaration that the Service Rules framed by the third respondent are not binding on the workmen and till such time as certified standing orders are brought into force by the third respondent in accordance with the provisions of the Standing Orders Act, the Model Standing Orders provided for under Section 12-A of the Act shall be applicable.
7. In the result, this petition is partly allowed and a declaration is granted as indicated above. In the circumstances of the case, the parties shall bear their own costs.