PETITIONER:
MANAGEMENT SHAHDARA (DELHI) SAHARANPURLIGHT RAILWAY CO., LTD
Vs.
RESPONDENT:
S.S. RAILWAY WORKERS' UNION
DATE OF JUDGMENT:
18/09/1968
BENCH:
SHELAT, J.M.
BENCH:
SHELAT, J.M.
BHARGAVA, VISHISHTHA
VAIDYIALINGAM, C.A.
CITATION:
1969 AIR 513 1969 SCR (2) 131
CITATOR INFO :
R 1970 SC 82 (7)
RF 1970 SC 512 (5,10)
RF 1972 SC1210 (14)
R 1984 SC 516 (23)
R 1984 SC1227 (6,8)
ACT:
Industrial Employment (Standing Orders) Act (20 of 1946),
as amended by Act 36 of 1956, ss. 6 and 10(2)-Modification
of existing Standing Orders-When permitted.
HEADNOTE:
Six months after the, appelIant's Standing Orders as
modified had come into operation, the respondent applied for
further modification of the Standing Orders, under s.
10(2) of the Industrial Employment (Standing Orders) Act,
1946, 'as amended in 1956. The certifying officer allowed
some of the modifications and on appeal by the respondent,
the Appellate Authority allowed some more modifications.
In appeal, to this Court under Art. 136 of the
Constitution, the appellant objected to four modifications,
namely: (i) that the appellant should give reasons and
communicate them to the workmen even in cases of
discharge simpliciter; (ii) that appeals against penalties
imposed should be disposed of within 60 days; (iii) that
when a workman is removed on the ground of inefficiency due
to physical unfitness, the appellant should offer to such
workman alternative; employment on reasonable emoluments;
and (iv) that a second show cause notice should be served on
the workman at the stage of taking a decision on the
suitable punishment. The grounds urged were: (1 )The
authorities under the Act can certify modifications of
existing Standing Orders under s. 10(2) only when a change
of circumstances is established, because, s. 6 of the Act
confers finality on certified Standing Orders or
modifications thereof; (2). On principles analogous to res
Judicata, the authorities had no jurisdiction to grant the
modifications in the present case; and (3) the modifications
were not reasonable or fair.
HELD: (1) [Per Shelat and Vaidialingam, JJ.]: A change
of circumstances is not a condition precedent to the
maintainability of an application for modification under s."
10(2).
Under the Act before its 'amendment in 1956, a workman
could not object that the Standing Orders were not
reasonable or fair. His only remedy was to raise an
industrial dispute, but that remedy was unsatisfactory,
since the dispute had to be sponsored by a union or at least
a substantial number of workmen and even then, the process
was a protracted one. Parliament knew that the workmen had
the right to raise an industrial dispute and also the
defects in that remedy and so amended ss. 4 and 10 of the
Act by Act 36 of 1956. The amendment conferred on
individual workman the right to object to draft Standing
Orders submitted by an employer on the ground that they are
either not fair or not reasonable, and also gave the right
to apply for their modification. Under s. 6, a person
aggrieved by the order of the certifying officer certifying
or modifying Standing Orders, may appeal to the Appellate
Authority whose decision shall be final. But the finality
only means that there is no further appeal or revision
against the order and that the order cannot be challenged in
'a civil court. It can, however. be modified under s.
10(2). The only limitations on the power are, (a) reason.-
132
ableness and fairness of the modification and (b) except
on agreement between employer and the workmen six months
must have elapsed from the date on which the Standing Orders
or the last modifications thereof, came into operation, the
object being that Standing Orders or the modifications
should be allowed to work for some time to see if they are
satisfactory. In an application for modification the issue
before the authority would be not as to reasonableness or
fairness of the existing Standing Orders. but whether the
modification 'applied for is fair and reasonable. Such an
application is an independent application and merely
because it could be made on the ground that the existing
Standing Orders are discovered to be unsatisfactory even
without any change in circumstances, it would not amount to
a review of an earlier order. Further, there will not be
a multiplicity of applications because the workmen
individually have the right to apply for modifications.
For, unless there is some justification for the
modification, the authorities under the Act would reject the
applications. [139 G-H; 140 C-D; 141 A-C; 142 A-C; G-H; 143
A-C]
Bangalore Woollen Cotton & Silk Co. Ltd. v. The Workmen
[1968] l L.L.J. 555, Buckingham and Carnatic Co. Ltd. v
Workmen C.A. No. 674 of 1968 dt. 25th July 1968 and
Hindustan Brown Boveri Ltd. v. The Workmen C.A. No. 1631 of
1966 dt. 31st July 1967, referred to.
[Per Bhargava, J. dissenting]: When an application under
s. 10(2) is made, the certifying officer can modify
Standing Orders already certified, only if the request is
not made on the basis of the same material which existed at
the earlier stage when they were certified. [155 G-H]
Before the amendment in 1956 if the workmen had any
grievance on the ground of unfairness or unreasonableness of
the Standing Orders, their only remedy lay under the
Industrial Disputes Act. By amendment in 1956, a limited
remedy was provided for them in the Act itself by conferring
on the certifying officer the power of judging the
reasonableness and fairness of the Standing Orders and of
modifying them under s. 10(2). Therefore, after 1956 the
workmen have two alternative remedies for seeking alteration
in the Standing Orders proposed or certified. Under s. 10(2)
a request for modification can only be made on the basis of
fresh facts or fresh circumstances arising subsequent to
the passing of the order by the Appellate Authority under s.
6 on the limited ground of reasonableness and fairness.. The
Industrial Tribunal, however. can direct the alteration of a
Standing Order held to be reasonable and fair, without any
fresh grounds, material, or change in circumstances if an
industrial dispute, in 'relation to it is raised, and this
is the only remedy available if a modification is desired
without a change of circumstances. If it is held that even
the certifying officer can reconsider the reasonableness or
fairness of a Standing Order already certified and confirmed
under s. 6 the finality envisaged by the section would be
nullified. After a period of six months had elapsed, the
certifying officer could set aside an order passed earlier
by his superior, or a succeeding Appellate Authority may
interfere with his predecessor's order, merely because the
certifying officer or Appellate Authority considers the
modification to be reasonable and fair even though there
was no change in the circumstances. [153 F-G; 154 A-B, D-F;
155 C-F; 156 A-C]
(2) [Per Shelat and VaidiaIingam, JJ.]: It is
doubtful whether principles analogous to res judicata can
property be applied to industrial adjudication. [143 H]
Burn & Co. v. Their Employees, [1956] S.C.R. 781, Guest,
Keen, Williams (P) Ltd. v. Sterling, [1960] 1 S.C.R. 348
and Workmen of Balmer Lawrie & Co. v. Balmer Lawrie & Co.
[1964-] 5 S,C.R. 344, referred to,
133
[Per Bhargava, J.]: This Court bas expressed conflicting
views on the question of 'applying the principle underlying
the rule of res judicata to industrial adjudication. [150 E]
Burn & Co.'s case, [1956] S.C.R. 781, Balmer Lawrie
Co.'s case, [1964] 5 S.C.R. 344 and Associated Cement Staff
Union v. Associated Cement Co. [1964] 1 L.L.J. 12. referred
to.
(3) [Per Shelat and Vaidialingam, JJ.]: So far as
modifications (ii) and (iii) are concerned, in an appeal
under Art. 136, this Court would not interfere with the
conclusion of the authorities under the Act since no
principle is involved. [144 F]
As regards modification (iv), the authorities under the
Act held that it was fair and reasonable, and there is no
justification for this Court to interfere with the decision.
In Industrial matters, at present, the doctrine of hire and
fire is completely abrogated, because, security of
employment is one of the necessities for industrial peace
and harmony. If reasons for discharging an employee are
furnished tO him he not only has the satisfaction of knowing
why his services are dispensed with, but in appropriate
cases he can challenge it, as even when the services of an
employee are terminated by an order of discharge
simpliciter, its legality and propriety can be challenged
before an industrial tribunal. [145 A-E]
As regards modification (iv) the requirement of a second
show cause notice is peculiar to cases coming under Art. 311
of the Constitution and neither the ordinary law nor the
industrial law requires an employer to give such a notice.
Even in Art. 311, the requirement is now removed and so, it
is not necessary to import it into industrial matters. [145
E-F]
[Per Bhargava J. dissenting]: The order must be set
aside because the four modifications were not based on any
fresh facts, material or change of circumstances. In fact,
modification (i) was, specifically disallowed by the
Appellate Authority at an earlier stage and merely because
his successor considered it reasonable and fair it was
permitted without any change in the circumstances. [156 E-F,
H]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 27 of 1968.
Appeal by special leave from the order dated October
27, 1967 of the Chief Labour Commissioner (Central) and
Appellate Authority, New Delhi in No. I.E. 1 ( 11 )/7/66-
H.R. Gokhale, B. Parthasarathy: O.C. Mathut, J.B.
Dadachanji and Ravinder Narain, for the appellant.
R.K. Garg, S.C. Agarwala and Anil Kumar Gupta, for the
respondent.
The Judgment of J.M. SHELAT and C.A. VAIDIALINGAM, JJ.,
was delivered by SHELAT, J. BHARGAVA, J. delivered a
dissenting Opinion.
Shelat, J. This appeal, by special leave, is by the
employer and raises the question as to the scope of sec.
10(2) of the Industrial Employment (Standing Orders) Act, 20
of 1946, as amended by Act 36 of 1956 (referred to
hereinafter as the Act).
134
The Standing Orders of the Appellant-company were
certified on August 7, 1962 by the Regional Labour
Commissioner, Central, under s. 4 of the Act. Both the
company and the workmen filed appeals against the said order
which were disposed of by the Appellate authority under s.
6. Sometime thereafter the respondent-union applied for
certain modifications, some of’ which were certified by the
Regional Labour Commissioner by his order dated December 28,
1963. The Appellant-company filed an appeal against the
said order which was disposed of by the Chief Labour
Commissioner in April 1964. On April 25, 1965 the respondent
union made a further application for modifications. The
Regional Labour Commissioner by his order dated September 2,
1965 allowed certain modifications but rejected the rest.
The union thereupon appealed against the said order. After
hearing the parties the Chief Labour Commissioner passed
his impugned order dated October 27, 1967 ordering
certification of certain modifications. Though the
Appellant-company objected at first to all the
modifications, counsel pressed the appeal in respect of four
modifications only. The first modification challenged is in
Standing Order 9, clause (a)which, as unamended, read as
follows:
“The railway under the terms of
employment has the right to terminate the
services of a permanent Workman on giving
him one month’s notice in writing or one
month’s pay may be paid in lieu of notice.”
The union claimed that the management should give reasons
even when they terminated the services of an employee by a
discharge simpliciter. The modification allowed directed
reasons to be recorded in writing and communicated to the
workman if he so desires at the time of discharge but not if
the management considers it inadvisable. The second
modification is in Standing Order 12, clause (A), which,
in its unamended form, read as follows:
“When any of the penalties specified
in Order 9 is imposed upon a workman an appeal
shall lie to the authority next above that
imposing the penalty. An appeal shall lie to
the Managing Agents only on original orders
passed by the General Manager ….. ”
The union’s plea was that some time limit was necessary for
the disposal of the appeals as the managing agents who are
the appellate authority against the orders of the General
Manager took months to dispose of such appeals thereby
delaying the workman from raising an industrial dispute in
time and seek timely relief. The modification allowed was
that every such appeal shall be disposed, of by the
appellate authority within 60 days from the date of its
receipt. The third modification is in Standing Order 11
(‘vii) which read as follows:
135
“Removal from service: A workman shall
be liable to be removed from service in the
following circumstances:
(a) Inefficiency.
The modification allowed was as follows:
“In case of inefficiency due to
physical unfitness the workman whom the
management considers suitable for some
alternative employment shall be offered the
same on reasonable emoluments having regard to
his former emoluments.”
The modification contains, it will be noticed, four
limitations: (1 ) it applies only to cases of removal on the
ground of physical unfitness, (2) the consideration of
suitability for an alternate employment is left to the
management, (3 ) the existence of alternative post, and (4)
the question as to what reasonable emoluments should be is
left to the management. The fourth modification is in
Standing Order 11 (vii) (c) which, in its unamended form,
was as follows.
"Every person against whom departmental enquiry is being made shall be supplied with a copy of the findings
in connection with his dismissal and removal
from ser- vice. The workman shall also be
supplied with a copy of the proceedings
of the enquiry committee as soon as
possible after the conclusion of the enquiry
proceedings in his case and be allowed
to defend his case through union’s
representative.”
The modification allowed was as follows:
“In case the management propose to
remove the workman from service they shall
serve on the workmen separate show cause
notice to that effect.”
Counsel for the company challenged the impugned order
in its two facets: the scope of the power of modification
under s. 10(2), and on merits on the ground that the
modifications did not stand the test of reasonableness and
fairness. On the first question his contention was that the
jurisdiction and powers of the authorities under the Act to
certify modifications of the existing standing orders are
limited to cases where a change of circumstances is
established. In the course of his argument, counsel,
however, qualified the contention by conceding that if at
the time of the last certification certain circumstances
were, for one reason
136
or the other, omitted from consideration they would
constitute a Valid reason for modification and the
modification would be granted even though in such a case a
change of circumstances has not occurred. He next contended
that in any case though s. 11 of the Code of Civil Procedure
did not apply, principles analogous to res judicata would
apply to an application for modification unless such
application is occasioned by new circumstances having arisen
or is based on new facts. Briefly, the argument was that
the object of the Act is to have conditions of service of
workmen in an establishment defined with precision, and
therefore, to have standing orders dealing with such
conditions certified. For industrial harmony and peace it
is necessary that those conditions are stable and do no.t
remain undefined or fluctuating. In pursuance of this
object the Act confers finality to such certified standing
orders or modifications thereof under s. 6. The contention
was that if modifications were allowed without any
restraint, there would be multiple applications specially as
individual workman have been given the right to apply for
modifications. Therefore, the word ‘final’ in s. 6, it’ was
argued, must be so read as to mean that an application for
modification under s, 10(2) can only be maintainable if it
is justified on the ground of a change of circumstances
having occurred after the fast certification, which of
course, according to the concession made by counsel, also
would include cases where certain circumstances were not
taken into account at the time of the last certification.
The relevant provisions of the Act requiring
consideration in this appeal are ss. 4, 6, 10, 11 and 12.
Section 4 provides that standing orders shall be certified
under the Act if (a) a provision is made therein for every
matter set out in the Schedule, and (b) they are otherwise
in conformity with the provisions of the Act. The section
further provides that it shall be the function of the
certifying officer or the appellate authority to adjudicate
upon the fairness or reasonableness ‘of the’ provisions of
the standing orders. Section 6 provides that any person
aggrieved by the order of the certifying officer passed
under s. 5(2) may appeal to the appellate authority and the
appellate authority, “whose decision shall be final”, shall
by an order confirm the standing orders in the form
certified under s. 5 (2) or amend or add thereto to render
them certifiable under the Act. Section 10, whose
interpretation is in question, provides by sub-s. 1 as
follows:
“Standing orders finally certified under
this Act shall not, except on agreement
between the employer and the workmen, be
liable to modification until the expiry of 6
months from the date on which the standing
orders or the last modifications thereof came
into operation.”
137
Sub-s. 2 runs as follows:
“Subject to the provisions of sub-section
(1), an em-
ployer or workman may apply to the
certifying officer
to have the standing orders modified …..
Sub-s. 3 provides that the foregoing provisiOnS of the Act
shall apply in respect of an application for modification as
they apply to the certification of the first standing
orders. Section 11 empowers the certifying officer and the
appellate authority to correct clerical or arithmetical
mistakes in an order passed by them or errors arising from
any accidental slip or omission. Lastly, s. 12 provides
that no oral evidence having the effect of adding to or
otherwise varying or contradicting standing orders as
finally certified under the Act shall be admitted in any
court.
Counsel conceded, and did so rightly, that there is no
express provision in any one of these sections restricting
the right to apply for modification or the power of the
authorities to allow modification only on proof of a change
of circumstances. The only limitations to the power are the
reasonableness or fairness which of course must be
established and the expiry of six months after the date of
the standing orders or their last modifications coming into
operation. In the absence of any such express restriction
we should then ask ourselves whether there is in any of
these sections anything which would indicate such a
restriction by necessary implication. In that connection
the only word which can point to such a restriction,
according to. counsel, is the word ‘final’ in sec. 6, so
that the contention reduces itself to this that by making
the order of the appellate authority final under sec. 6,
Parliament intended by necessary implication that the bar of
finality can only be removed if new circumstances arise
which necessitate or justify modification.
But the intention of the legislature, as observed by
Lord Watson in Salomon v.A. Salomon & Co. Ltd.(1) “is a
common but very slippery phrase, which popularly understood,
may signify anything from intention embodied in positive
enactment to speculative opinion as to what the legislature
probably would have meant, although there has been an
omission to enact”. It is well settled that the meaning
which words ought to be understood to bear is not to be
ascertained by any process akin to speculation and the
primary duty of a court is to find the natural meaning of
the words used in the context in which they occur, that
context including any other phrase in the Act which may
throw light on the sense in which the makers of the Act used
the words in dispute. In R.v. Wimbledon Justices(2) Lord
Goddard said: “Although in construing an Act of
Parliament the court must always try to give effect to the
intention of the Act and must look
(1) [1897] A.C. 22, 38. (2) [1953] 1 Q.B. 380.
2 Sup. C.l./69–10
138
not only at the remedy provided but also at the mischief
aimed at, it cannot add words to a statute or read words
into it which are not there …. “Similarly, in R.v.
Mansel Jones(1) Lord Coleridge said that it was me business
of the courts to see what Parliament had said, instead of
reading into an Act what ought to have been said. So too, in
Latham v. Lafone(2), Martin B. said: “I think the proper
rule for construing this statute is to adhere to its words
strictly; and it is my strong belief that, by reasoning on
long-drawn inferences and remote consequences, the courts
have pronounced many judgments affecting debts and actions
in a manner that the persons who originated and prepared the
Act never dreamed of.” In the light of these principles we
ought, therefore, to give a literal meaning to the language
used by Parliament unless the language is ambiguous or its
literal sense gives rise to an anomaly or results in
something which would defeat the purpose of the Act.
The Act was passed because the legislature thought that
in many industrial establishments the conditions of service
were not uniform and sometimes were not even reduced to
writing. This led to conflicts resulting in unnecessary
industrial disputes. The object of passing the Act was thus
to require employers to define with certainty the conditions
of service in their establishments and to require them to
reduce them to writing and to get them compulsorily
certified. The matters in respect of which the conditions
of employment had to be certified were specified in the
schedule to the Act. As the Act stood prior to its
amendment in 1956, sec. 3 required the employer to submit to
the certifying. officer draft standing orders proposed by
him for adoption in his establishment. Section 4 provided
that standing orders shall be certifiable if (a) provision
is made therein for every matter set out in the Schedule,
and (b) that they were otherwise in conformity with the
provisions of the Act.. The section, however, expressly
provided that it shall not be the function of the certifying
officer or the appellate authority to adjudicate upon the
fairness or reasonableness of the standing orders. Under s.
5, the certifying officer was required to send a copy of the
draft standing orders to the union, if any, or in its
absence to the workmen in the manner prescribed together
with a notice calling for objections by them, if any, and to
give opportunity to the employer and the workmen of being
heard and then to decide whether or not any modification of
or addition to the draft standing orders was necessary to
render them certifiable under the Act. Section 6 provided
for an appeal by any person aggrieved by the order passed
under s. 5. The appellate authority, whose decision was
made final, had the power to confirm or amend or add to the
standing orders passed by the certifying officer to render
them certifiable under the Act. Though the
[1889] 23Q.B.D. 29,32. (2) [1867] L.R. 2 Ex.
115,121.
139
order passed by the appellate authority was made final under
s. 6, sec. 10 provided for modification. Sub-s. 1 of s. 10
provided that standing orders finally certified under this
Act shall not, except on agreement between the employer and
the workmen, be liable to modification until expiry of six
months from the date on which they or the last modification
thereof came into operation. Sub-s. 2 read as follows:
“An employer desiring to modify his
standing orders shall apply to the Certifying
Officer in that behalf
Sub-s. 3 provided that the foregoing provisions of the Act
shall apply in respect of an application under sub-sec. 2 as
they apply to the certification of the first standing
orders.
As the Act stood prior to 1956, there was thus a
prohibition against the certifying officer going into the
question of reasonableness or fairness of the draft standing
orders submitted to him by the employer. His only function
was to see that the draft made provisions for all matters
contained in the Schedule and that it D was otherwise
certifiable under the Act. Therefore though the workmen
through the union or otherwise were served with the copy
of the draft and had the right to raise objections, the
objections could be of a limited character, namely, that the
draft did not provide for all matters in the Schedule or
that it was not otherwise certifiable under the Act. Even in
an appeal under s. 6, the E only objections they could
raise were limited to the two aforesaid questions. The
workmen thus could not object that the draft standing orders
were not reasonable or fair. Under s. 10, the right to
apply for modification was conferred on the employer alone
and in view of sub-s. 3 the only consideration which the
certifying authority could apply to such modification was
the one which he F could apply under ss. 4 and 6.
Therefore, no question whether the modification was fair
or reasonable could be raised. It is thus clear that the
workman had very little say in the matter even if he felt
that the standing orders or their modifications were either
not reasonable or fair. They could, of course, raise an
industrial dispute. But that remedy was hardly
satisfactory. Such a dispute had to be first sponsored
by a union or at least a substantial number of workmen; it
bad next to go through the process of conciliation and
lastly the appropriate Government may or may not be
prepared to refer such a dispute to industrial adjudication.
Even if it did, the entire process was a protracted one.
In 1956, parliament effected radical changes in the Act
widening its scope and altering its very complexion. Section
4, as amended by Act 36 of 1956, entrusted the authorities
under the Act with the duty to adjudicate upon fairness
and reasonableness of the standing orders. The enquiry
when such-standing’ orders
140
are submitted for certification is now two-fold: (1 )
whether the standig orders are in consonance with the model
standing orders, and (2) whether they are fair and
reasonable. The workmen, therefore, can raise an objection
as to the reasonableness or fairness of the draft standing
orders submitted for certification. By amending s. 10(2)
both .the workmen and the employer are given the right to
apply for modification and by reason of the change made in
s. 4 a modification has also now to be tested by the
yardstick of fairness and reasonableness. The Act provides
a speedy and cheap remedy available to the individual
workman to have his conditions of service determined and
also for their modifications. By amending ss. 4 and 1 O,
Parliament not only broadened the. scope of the Act but
also. gave a clear expression to the change in its
legislative policy. Parliament knew that the workmen, even
as the unamended Act stood, had the right to raise an
industrial dispute, yet, not satisfied with such a remedy,
it conferred by amending ss. 4 and 10 the right to
individual workmen to contest the draft standing orders
submitted by the employer for certification on the ground
that they are either not fair or reasonable, and more
important still, the right to apply for their modification
despite the finality of the order of the appellate authority
under s. 6. Parliament thus deliberately gave a dual remedy
to the workmen both under this Act and under the Industrial
Disputes Act. This fact has in recent decisions been
recognised by this Court. (of Bangalore Woollen, Cotton &
Silk Co. Ltd. v. Their Workmen(1), Buckingham & Carnatic Co.
Ltd. v. Workmen(2) and Hindustan Brown Boveri Ltd. v. The
Workmen(a).
It will be pertinent, while examining the question
whether there is a restriction, as suggested by counsel, to
the right to apply for modifications, to bear in mind the
change in the legislative policy reflected in the amendments
of ss. 4 and 10. It will be noticed that s. 10 does not
state that once a standing order is modified and the
modification is certified, no further modification is
permissible except upon proof that new circumstances have
arisen since the last modification. As a matter of fact the
legislature has not incorporated any words in the sub-sec.
restricting the right to apply for modification except of
course the time limit of six months in sub-s. 1. Section 6
no doubt lays down that the order of the appellate authority
in an appeal against the order of the certifying officer
under s. 5 is final but that finality is itself subject to
the right to apply for modification under s. 10(2). Even so,
it was urged that the finality of the order under s. 6 was
indicative of a condition precedent to the jurisdiction
under sec. 10(2) to entertain an application for
modification on a new set
(1) [1968] 1 L.LJ. 555.
(2) C.A. No. 674 of 1968 decided oft 25th July, 1968.
(3) C.A. No. l631 ofl966 decided on 31st July, 1967.
141
circumstances having arisen in the meantime. The
question is whether such is the position.
The finality to the order passed under s. 6 really means
that there is no further appeal or revision against that
order and no more. This view finds support from s. 12 which
lays down that once the standing orders are finally
certified, no oral evidence can be led in any court which
has the effect of adding to or otherwise varying or
contradicting such standing orders. Section 6, when read
with s. 12, indicates that the finality given to the
certification by the appellate authority is against a,
challenge thereof in a civil court. But the finality given
to the appellate authority’s order is subject to the
modification of those very standing orders certified by him.
As already stated, s. 10 itself does not lay down any
restriction to the right to apply for modification- Apart
from the right to apply for modification under the Act, the
workmen ,can raise an industrial dispute with regard to the
standing orders. There is nothing in the Industrial Disputes
Act restricting the right to raise such a dispute only when
a new set of circumstances has arisen. If that right is
unrestricted, can it be possible that the very_ legislature
which passed both the Acts could have, while conferring the
right on the workmen individually, restricted that right as
suggested by counsel ? To illustrate, a new industrial
establishment is set up and workmen are engaged therein.
Either there is no union or if there is one it is not yet
properly organised. The standing orders of the establishment
are certified under the Act. At the time of certification,
the union or the workmen’s representatives had raised
either no objections or only certain objections. If
subsequently the workmen feel that further objections could
have been raised and if so raised the authority under the
Act would have taken them into consideration, does it mean
that because new circumstances have since then not arisen,
the workmen would be barred from applying for modification ?
Let us take another illustration. Where, after the standing
orders or their modifications are certified, it strikes a
workman after they have been in operation for some time that
a further improvement in his conditions of service is
desirable, would he be debarred from applying for a
further modification on the ground that no change of
circumstances in the meantime has taken place? Where the
standing orders provide 10 festival holidays, if counsel
were right, the workmen can never apply for an addition in
their number as they would be faced with the contention that
the festivals existed at the time of the last certification
and there was therefore no change of circumstances.
The Act is a beneficent piece of legislation and
therefore unless compelled by any words in it we would not
be justified in importing in s. 10 through inference only a
restriction to the right conferred by. it on account of a
supposed danger of multiplicity
153
for the purpose of ensuring that conditions of service,
which the employer laid down, became known to the workmen
and the liberty of the employer in prescribing the
conditions of service was only limited to the extent that
the Standing Orders had to be in conformity with the
provisions of the Act and, as far as practicable, in
conformity with Model Standing Orders. The Certifying
Officer or the Appellate Authority were debarred from
adjudicating upon the fairness or the reasonableness of the
provisions of the Standing Orders. Then, as noticed in the
case of Rohtak Hissar District Electricity Supply Co.
Ltd.(1), the Legislature made a drastic change in the
policy of the Act by amending section 4 and laying upon
the Certifying Officer the duty of deciding whether the
Standing Orders proposed by the employer were reasonable and
fair, and also by amending section 10(2) so as to permit
even a workman to apply for modification of the certified
Standing Orders, while, in the original Act, the employer
alone had the right to make such an application. It is,
however, to be noticed that the preamble of the Act was no.t
altered, so that the purpose of the Act remained as before.
While the Act was in its unamended form, if the workmen had
a grievance, they could not apply for modification of
certified Standing Orders and, even at the time of initial
certification, they could only object to a Standing Order on
the ground that it was not in conformity with the provisions
of the Act or Model Standing Orders. After amendment, the
workmen were given the right to object to the draft Standing
Orders at the time of first certification on the ground that
the Standing Orders were not fair and reasonable and, even
subsequently, to apply for modification of the certified
Standing Orders after expiry of the period of six months
prescribed under s. 10( 1 ) of the Act. These rights
granted to the workmen and the powers conferred on the
Certifying Officer and the Appellate Authority, however,
,still had to be exercised for the purpose of giving effect
to the object of the Act as it continued to remain in the
preamble, which was not altered. Before the amendment of
the Act, if the workmen had any grievance on the ground of
unfairness or unreasonableness of the Standing Orders
proposed by the employer, their only remedy lay under the
Industrial Disputes Act. By amendment in 1956, a limited
remedy was provided for them in the Act itself by conferring
on the Certifying Officer the function of judging the
reasonableness and fairness of the proposed Standing Orders.
These amendments cannot, however, affect the alternative
remedy which the workmen had of seeking redress under the
Industrial Disputes Act if they had grievance against any
of the Standing Orders certified by the Certifying Officer
[See Bangalore Woollen, Cotton and Silk Mills Company Ltd.
v. Their Workmen and Another(2), and the
(1) [1966] 2 S.C.R, 863. (2) [1968] 1
L,L.J. 555.
2 Sup. C1169–11
143
of applications. The policy of s. 10 is clear that a
modification should not be allowed within six months from
the date when the standing orders or the last modifications
thereof came into operation. The object of providing the
time limit was that the standing orders .or their
modifications should be allowed to work for sufficiently
long time to see whether they work properly or not. Even
that time limit is not rigid because a modification even
before six months is permissible if there is an agreement
between the parties.
The ground for urging that a restriction should be read
in s. 10 was the apprehension that since workmen
individually have the right to apply for modifications
there would be multiple applications which an employer
would have to face. Secondly, that an application without a
change of circumstances would be tantamount to a review by
the same authority of his previous order of
certification. It was said that if no restriction is read
in s. 10 it would mean that the same authority. who. on
satisfaction of the fairness and reasonableness of a
standing order or its last modification had certified it
would be called upon to review his previous decision on
reasonableness and fairness. Such a review, it was argued,
is permissible only on well-recognised grounds, namely,
discovery of new and important matter or evidence, a
mistake or an error apparent on the face of the record or
any other sufficient reason.
An application for modification would ordinarily be
made where (1) a change of circumstances has occurred, or
(2) where experience of the working of the standing orders
last certified results in inconvenience bardship anomaly
etc. or (3) where some fact was lost sight of at the t;me
of certification, or (4) where the applicant feels that a
modification will be more beneficial. In category (1) there
would be no difficulty as a change of circumstances has
taken place. But in cases falling, under the rest of the
categories there will be no change of circumstances. Does-
it mean that though the implementation of the standing
orders has resulted. in hardship. inconvenience or anomaly
no modification can be asked for because there is no change
of circumstances ? As to multiplicity of applications we
think that there is no justification for any such
apprehension. for. unless there in a justification for
modification the authorities under the Act would reject them
on the ground that they are frivolous and therefore neither
fair nor reasonable. Lastly as to such an application being
a review of the last certifying order an application under
s. 10 is not a review. An application for review would be
made in the proceedings in ‘which the’ judgment or order
sought to be reviewed is passed That would not be s0 in the
case of an application under s. ’10(2); Such an application
is independent of the proceedings in which the’
last.certifying order was passed and. is made in ‘the
143
exercise of an independent right conferred upon the
applicant by s. ]0(2). In an application for modification,
the issue before the authority would be not as to the
reasonableness or fairness of the standing orders or their
last modification, but whether the modification now applied
for is fair and reasonable. Therefore, the contention that
a change of circumstances is a condition precedent to the
maintainability of an application under s. 10(2) or that an
application for modification without proof of such a change
amounts to review by the same authority of its previous
order is not correct .
It was then argued that assuming that a modification
without a change of circumstances is permissible though s.
11 of the Code of Civil Procedure does not apply to industry
matters, sound policy dictates that principles analogous to
res judicata must be applied and it must be held that unless
circumstances have changed an application for modification
would be ,barred. For this, counsel relied on Burn & Co. v.
Their Employees(x). There the demand was for wage scales
fixed in an award by the Mercantile Tribunal instead of the
scales in accordance with the scheme of the Bengal Chamber
of Commerce. In a dispute previously raised by labour an
award was made in 1950 which accepted the wage scales
according to the scheme of the Bengal Chamber of Commerce
and rejected the demand for the scales according to those
awarded by the Mercantile Tribunal which were more
favourable. It was in these circumstances that this Court
expressed the view that an award fixing wage scales should
have fairly long range operation and should not be unsettled
unless a change of circumstances has occurred justifying
fresh adjudication. But with the constant spiralling of
prices the principle would appear to have lost much of its
efficacy. The trend in recent decisions is that application
of technical rules such as res judicata. acquiescence,
estoppel etc. are not appropriate to industrial
adjudication. In Guest, Keen, Williams Private Ltd. v.P.J.
Sterling(2) a modification of a standing order relating to
the age of superannuation was sought by raising an
industrial dispute. It was contended that the reference of
that dispute was barred by acquiescence and laches. That
contention was rejected, the Court observing that
industrial tribunal should be slow and circumspect in
applying technical principles such as acquiescence and
estoppel. In Workmen of Balmer Lawrie & Co. v. Balmer
Lawrie & Co.(3) also it was observed that the question as to
revision of wage scales must be examined on the merits of
each individual case and technical considerations of res
judicata should not be allowed to hamper the discretion of
industrial adjudication therefore. doubtful whether
principles analogous to res judicata can properly be
applied to industrial adjudication.
(1) S.C.R.781, 789. (2) [1960] l S.C.R. 348.
(2) [1964] 5 S.C.R. 344.
144
On merits, Mr. Gokhale argued that the four
modifications to which he objected were neither fair nor
reasonable and that therefore we should set them aside, The
,question is, whether in an appeal under Art. 136 we would
be justified in interfering with conclusions as to
reasonableness and fairness by authorities empowered by the
Act to arrive at such conclusions. In Rohtak Hissar
District Electricity Supply Co. Ltd. v. State of Uttar
Pradesh & Ors.(1) this Court prevented counsel for the
employer from canvassing such a question on the Found that
the matter of fairness and reasonableness was left by the
legislature to the authorities constituted under the Act.
In Hindustan Antibiotics Ltd. v. The Workmen & Ors.(2) this
Court repeated what it had earlier stated in Bengal Chemical
& Pharmaceutical Workers v. Their Workmen(3) that though
Art., 136 is couched in widest terms, it is necessary to,
exercise discretionary jurisdiction of this Court only in
cases where awards are made in violation of the principles
of natural justice or axe made in a manner causing grave
injustice to parties or raise an important principle of
industrial law requiring elucidation by this Court or
disclose exceptional or Special circumstances which merit
consideration by this Court.
As aforesaid, the modifications objected by the
appellant company are: (1 ) giving reasons and communicating
them to the workman concerned even in eases of discharge
simpliciter, (2) insertion of lime limit of 60 days in the
disposal of appeals, (3) insertion in standing order 11 of a
clause that where a workman is re. moved on the ground of
inefficiency due to physical unfitness, the management
should offer to such a workman alternative employment on
reasonable emoluments and (4) insertion of the clause
requiring a_ second show cause notice at time stage when the
decision of suitable punishment is to be made. So far as
modifications (2), and (3) are concerned, clearly no
principle is involved and there would be no justification
for us to interfere with the conclusion of the appellate
authority on the question of their being fair and
reasonable. As regards the first modification, the
contention was that an employer has under the law of master
and servant the right to terminate the service`s of his:
employee by a discharge simpliciter after giving a month’s
notice or a month’s wages in. lieu thereof, and is not
required to give reasons for such an order. The Industrial
Disputes Act also does not lay down any fetter to that right
by requiring him to give reasons to the employee concerned
and industrial adjudication has so far recognized such a
right. To impose such a fetter by a change in
orders is therefore not warranted by any statute, and,
therefore, cannot be said to be either fair or reasonable.
It must, however, be borne. in mind that the right to
contract in industrial
S.C.R. 863. (2) [1967] 1 S.C.R. 652,
supp. 2 S.C.R. 136, 140.
145
matters is no longer an absolute right and statutes dealing
with industrial matters abound with restrictions on the
absolute fight to contract. The doctrine of hire and fire,
for instance, is now completely abrogated both by statutes
and by industrial adjudication, and even where the services
of an employee are terminated by an order of discharge
simpliciter the legality and propriety of such an order can
be challenged in industrial tribunals. These restrictions
on the absolute right to contract are imposed evidently
because security of employment is. more and more regarded
as one of the necessities for industrial peace and harmony
and the contentment it brings about a prerequisite of social
justice. During the last decade or so statutes have been
passed such as the Bihar Shops and Establishments Act, 1953
which require a reasonable cause for dispensing with the
services of an employee by an order of discharge
simpliciter. If reasons for discharging an employee are
furnished to the employee concerned, he not only has the
satisfaction of knowing why his services are dispensed
with- but it becomes easy for him in appropriate cases to
challenge the order on. the ground that it is either not
legal or proper which in the absence of knowledge of those
reasons it may be difficult, if not impossible for him to
do. In these circumstances, if the authorities under the
Act have come to the conclusion that such a modification is
fair and reasonable we would hardly be justified in
interfering with such a decision.
As regards the modification requiting a second show
cause notice, neither the ordinary law of the land nor the
industrial law requires an employer to give such a notice.
In none of the decisions given by courts or the tribunals
such a second show cause notice m case of removal has ever
been demanded or considered necessary. The only class of
cases where such a notice has been held to be necessary are
those arising under Art. 311. Even that has now been removed
by the recent amendment of that Article. To import such a
requirement from Art. 311 in industrial matters does not
appear to be either necessary. or proper and would be
equating industrial employees with civil servants. In our
view, there is no justification on any principle for such
equation, Besides, such a requirement would unnecessarily
prolong disciplinary enquiries which in the interest of
industrial peace should be disposed of in as short a time
as possible. In our view it is not possible to consider this
modification as justifiable either on the ground of
reasonableness or fairness and should therefore be set
aside.
The appeal, therefore, is partly allowed to the extent
aforesaid and the impugned order to that extent is set
aside. There v,ill be
Bhargava, J. The management of the Shahdara (Delhi)
Saharnpur Light Railway Co., Ltd. (hereinafter referred to
as
146
“the Company”) has riffled this appeal, by special leave,
against an order passed by the Chief Labour
Commissioner (Central) under section 6 ,of the Industrial
Employment (Standing Orders) Act, 1946 (hereinafter
referred to as “the Act”) as an appellate authority,
granting partially an application made under section 10
of the Act presented on behalf of the respondent, Shahdara-
Saharanpur Railway Workers’ Union. The first draft Standing
Orders submitted by the Company to the Certifying
Officer under s. 4 of the Act were certified by him on
7/8-8-1962, after deciding objections that had been filed
on behalf of the workmen In appeal, the Chief Labour
Commissioner (Central), New Delhi, modified those
Standing Orders to some extent by his order dated 12th
February, 1963. Subsequently, these certified Standing
Orders were modified by the order dated 28th December, 1963
passed by the Certifying Officer, and the appeal against his
orders of modification was dismissed on the 23rd April,
1964. Then, on 25th April, 1965, an application was
presented under s. 10(2) of the Act on behalf of the
respondent seeking modifications in a number of Standing
Orders as they stood after original certification and
first modification. The Certifying Officer passed his
orders on this application and, against those orders, the
respondent filed an appeal before the Chief Labour
Commissioner (Central), New Delhi. The Chief Labour
Commissioner, by his order dated 27th October, 1967,
allowed modifications in a number of Standing Orders. The
present appeal is directed against this order and
challenges the modifications granted in Standing Orders
Nos. 9(a), 12(A), 11(ix), 11(vii) and 13. The main
ground urged by the Company before this Court in support
of this appeal was that the Chief Labour Commissioner was
not justified in directing modifications in the Standing
Orders, already certified, in the absence of fresh
material or fresh facts on the basis of which alone he
was entitled to grant modifications under s. 10 of the Act.
Learned counsel appearing on behalf of the Company in the
alternative, also put forward the plea that on principles
analogous to the rule of res judicata it should be held
that the Chief Labour Commissioner had no jurisdiction to
grant these modifications under s. 10 in view of the
previous decisions given when the Standing Orders were
originally certified and modified for the first time.
So far as the argument of learned counsel based on the
applicability of principles analogous to the rule of res
judicata is concerned, learned counsel conceded that there
is no direct ruling of any Court laying down that such
principles are applicable when a Certifying Officer is
dealing with an application for modification of Standing
Orders under s. 10 of the Act, or when an appeal against
such an order is being heard by the Appellate Authority
under s. 6 of the Act. Reliance was, however, placed on the
decision of this Court in Burn & Co., Calcutta v.. Their
Emplo
147
yees(1), where this Court was dealing with the applicability
of the principle analogous to the rule of res judicata to
proceedings before an Industrial Tribunal dealing with a
reference under the Industrial Disputes Act. In that case,
an earlier award had been given in an industrial dispute and
the question arose whether, in the subsequent dispute for
adjudication, the decisions given in the earlier award
should be held as binding, unless it was shown that there
had been a change of circumstances. In the appeal before
this Court, it was urged that the Appellate Tribunal was in
error in brushing aside the earlier award and in deciding
the matter afresh as if it arose for the first time for
determination; and it was argued that, when once a dispute
is referred to a Tribunal and that results in an
adjudication, that must be taken as binding on the parties
thereto, unless there was a change of circumstances, and, as
none such had been alleged or proved, the earlier award
should have been accepted, as indeed it was accepted by
the Adjudicator. This Court held: ‘
“In the instant case, the Labour Appellate
Tribunal dismissed this argument with the
observation that that was ‘a rule of prudence
and not of law’. If the Tribunal meant by
this observation that the statute does not
enact that an award should not be re-opened
except on the ground of change of
circumstances, that would be quite correct.
But that is not decisive of the question,
because there is no provision in the statute
prescribing when and under what circumstances
an award could be re-opened. Section 19(4)
authorises the Government to move the Tribunal
for shortening the period during which the
award would operate, if ‘there has been a
material change in the circumstances on which
it was based’. But this has reference to the
period of one year fixed under section 19 (3)
and if that indicates anything, it is that
that would be the proper ground on which the
award could be re-opened under section
19(6), and that is what the learned Attorney-
General contends. But we propose to consider
the question on the footing that there is
nothing in the statute to indicate the grounds
on which an award could be reopened. What
then is the position ? Are we to hold that an
award given on ‘a matter in controversy
between the parties after full hearing ceases
to have any force if either of them repudiates
it under section 19(6), and that the Tribunal
has no option. when the matter is again
referred to it for adjudication, but to
proceed to try it de novo, traverse the entire
ground once again, land come to a fresh
decision. That would be contrary
(1) [1956]S.C.R 781
148
to the well-recognised principle that a
decision once rendered by a competent
authority on a matter in issue between the
parties after a full enquiry should not be
permitted to be re-agitated. It is on this
principle that the rule of res judicata
enacted in section 11 of the Civil Procedure
Code is based. That section is, no doubt,
in terms inapplicable to the present matter,
but the principle underlying it, expressed
in the maxim ‘interest rei publica ut sit
finis litium’, is rounded on sound public
policy and is of universal application. ‘The
rule of res judicata is dictated’, observed
Sir Lawrence Jenkins, C.J., in Sheoparsan
Singh v. Ramnandan Prasad Singh(1), ‘by a
wisdom which is for all time.’ And there are
good reasons why this principle should be
applicable to decisions of Industrial
Tribunals also. Legislation regulating the
relation between Capital and Labour has two
objects in view. It seeks to ensure to the
workmen, who have not the capacity to treat
with capital on equal terms, fair returns for
their labour. It also seeks to prevent
disputes between employer and employees, so
that production might not be adversely
affected and the larger interests of the
society might not suffer. Now, if we are to
hold that an adjudication loses its force when
it is repudiated under section 19(6) and that
the whole controversy is at large, then the
result would be that far from reconciling
themselves to the award and settling down to
work it, either party will treat it as a mere
stage in the prosecution of a prolonged
struggle, and far from bringing industrial
peace, the awards would turn out to be but
truces giving the parties breathing time
before resuming hostile action with renewed
vigour. On the other hand, if we are, to
regard them as intended to have long term
operation and at the same time hold that they
are liable to be modified by change in the
circumstances on which they were based, both
the purposes of the legislature would be
served. That is the view taken by the
Tribunals themselves in The Army & Navy Stores
Ltd., Bombay v. Their Workmen(2), and Ford
Motor Co. o] India Ltd. v. Their Workmen(a)
and we are of opinion that they lay down the
correct principle, and that there
were no
grounds for the Appellate Tribunal for not
following them”.
As against this view expressed by this Court, learned
counsel for the respondent relied on the remarks made by
this Court in
(1) [1916]. L.R. 43 I.A., 91. (2) 119511 2
L.L.J. 31, (3) [1951] 2 L.L.J. 231,
149
a subsequent case Workmen of Balmer Lawrie and Co. v.
Balmer Lawrie and Co. (1). In that case, the Court was
dealing with the question of alteration in wage structure
and had to consider the effect of an earlier award. The
Court held:
“When a wage structure is framed, all
relevant factors are taken into account and
normally it should remain in operation for a
fairly long period; but it would be
unreasonable to introduce considerations of
res judicata as such, because for various
reasons which constitute the special
characteristics of industrial adjudication,
the said technical considerations would be in
admissible. As the Labour Appellate Tribunal
itself has observed, the principle of gradual
advance towards the living wage which
industrial adjudication can never ignore,
itself constitutes such a special feature of
industrial adjudication that it renders the
application of the technical rule of res
judicata singularly inappropriate. If the
paying capacity of the employer increases or
the cost of living shows an upward trend, or
there are other anomalies, mistakes or errors
in the award fixing wage structure, Or there
has. been a rise in the wage structure in
comparable industries in the region,
industrial employees would be justified in
making a claim for the re-examination of the
wage structure and if such a claim is referred
for industrial adjudication, the
Adjudicator would not normally be justified in
rejecting it solely on the ground that enough
time has not passed after the making of the
award, or that material change in relevant
circumstances had not been proved. It is, of
course, not possible to lay down any hard and
fast rule in the matter. The questio
n as to
revision must be examined on the merits in
each individual case that is brought before an
adjudicator for his adjudication.”
Further support was sought by learned counsel from the
remarks made by this Court in Associated Cement Staff Union
and Another v.Associated Cement Company and. Others(a). The
judgment in this case was given only about a month after the
judgment in the case of Workmen of Balmer Lawrie & Co. (1)
by the same Bench of this Court which held:
“It is true that too frequent
alterations of conditions of service by
industrial adjudication have been generally
deprecated by this Court for the reason that
it is likely to disturb industrial peace and
equilibrium. At the same time, the Court has
more than once pointed
(1) [1964] 5
S.C.R. 344. (2) [1964] 1 L.L.J. 12.
150
out the importance of remembering the dynamic
nature , of industrial relations. That is
why the Court has, specially in the more
recent decisions, refused to apply to
industrial adjudications principles of res
judicata that are meant and suited for
ordinary civil litigations. Even where
conditions of service have been changed only a
few years before, industrial adjudication has
allowed fresh changes if convinced of the
necessity and justification of these by the
existing conditions and circumstances. Where,
as in the present case, in a previous
reference the tribunal has refused the demand
for change., there is even less reason for
saying that that refusal should have any such
binding effect. It is important to remember
in this connection that working hours remained
unchanged for many years in this concern and
during these years, considerable changes have
taken place in the country’s economic position
and expectations. With the growing
realization of need for better distribution of
national wealth has also come an understanding
of the need for increase in production as an
essential prerequisite of which greater
efforts on the part of the labour force are
necessary. That itself is sufficient reason
against accepting the argument against any
change in working hours if found justified on
relevant considerations that have been
indicated above.”
These three decisions, which have been brought to our notice
prima facie indicate that the Court has expressed
conflicting views’ on the question of applying the principle
underlying the rule of res judicata to proceedings for
adjudication of industrial disputes by an Industrial
Tribunal under the Industrial Disputes Act. In the
circumstances, I have felt some hesitation in applying
this principle in the present case as urged on behalf of the
Company consider that, in the present case, it would be
much more appropriate to examine the scheme of the Act
itself to find out the intention of the legislature and to
arrive at a decision on thin basis on the question whether
a modification on an application under s. 10 of the Act
should only be allowed on the basis of facts or
circumstances appearing subsequent to the previous
certification of the Standing Orders, or whether, in dealing
with the application for modification, the Certifying
Officer and the Appel late Authority can re-examine the
entire position even as it existed at the time of the
previous orders and arrive at a differed decision.
The scheme of the Act was examined by this Court in
Rohtak Hissar District Electricity Supply Co. Ltd. v. State
of Uttar Pradesh and Others(1), where this, Court held:
.
(1) [1966] 2 S.C.R. 863. ‘
“The Act was passed on the 23rd April, 1946,
and the Standing Orders framed by the U.P.
Government under section 15 of the Act were
published on the 14th May, 1947. The Central
Act (the Industrial Disputes Act No. 14 of
1947 ) came into force on the I st April,
1947, whereas the U.P. Act (U.P. Industrial
Disputes Act No. 28 of 1947) came into force
on the 1st February, 1948. It will thus be
seen that the Act came into force before
either the Central Act or the U.P. Act was
passed. The scheme of the Act originally was
to require employers in industrial
establishment to define with sufficient
precision the conditions of employment under
them and to make the said conditions known to
the workmen employed by them. The Legislature
thought that, in many industrial
establishments, the conditions of employment
were not always uniform, and sometimes, were
not even reduced to writing, and that led to
considerable confusion which ultimately
resulted in industrial disputes. That is why
the Legislature passed the Act making it
compulsory for the establishments, to which
the Act applied, to reduce to writing
conditions of employment and get them
certified as provided by the Act. The matters
in respect of which conditions of employment
had to be certified were specified ‘in the
schedule appended to the Act. This Schedule
contains 11 matters in respect of which
Standing orders had to be made. In fact, the
words “Standing orders” are defined by s. 2(g)
as meaning rules relating to matters set out
in the Schedule. The “Certifying officer”
appointed under the Act is defined by s. 2(c),
whereas “Appellate Authority” is defined by s.
2(a).
Originally, the jurisdiction of the Certifying officer
and the Appellate Authority was very limited; they were
called upon to consider whether the Standing orders
submitted for certification conformed to the Model
Standing orders or not. Section 3(2) provides that these
Standing orders shall be, as far as practicable, in
conformity with such Model Standing orders. Section 15,
which deals with the powers of the appropriate Government
to make rules, authorises, by cl. (2)(b), the appropriate
Government to set out Model Standing Orders for the purposes
of this Act. That is how the original jurisdiction of the
certifying authorities was limited to. examine the draft
Standing Orders submitted for certification and cOmPare
them with the Model.. Standing Orders.
152
In 1956, however, a radical change was
made in the provisions of the Act. Section 4,
as amesded by Act 36 of 1956, has imposed upon
the Certifying Officer or the Appellate
Authority the duty to adjudicate upon the
fairness or the reasonableness of the
provisions of any Standing Orders. In other
words, after the amendment was made in 1956,
the jurisdiction of the certifying authorities
has become very much wider and the scope of
the enquiry also has become correspondingly
wider. When draft Standing Orders are
submitted for certification, the enquiry now
has to be two-fold; are the said Standing
Orders in conformity with Model Standing
Orders; and are they reasonable or fair ? In
dealing with this latter question, the
Certifying Officer and the Appellate Authority
have been given powers of a Civil Court by s.
11 (1 ). The decision of the Certifying
Officer is made appealable to the Appellate
Authority under s. 6 at the instance of
either party. Similatly, by an amendment made
in 1956 in s. 10(2), both the employer and the
workmen are permitted to apply for the
modification of the said Standing Orders after
the expiration of 6 months from the date of
their coming into operation. It will thus be
seen that when certification proceedings are
held before the certifying authorities, the
reasonableness or the fairness of the
provisions contained in the draft Standing
Orders falls to be examined.”
It is in the fight of this scheme of the Act explained by
this Court that the decision has to be arrived at as to how,
in what manner, and under what circumstances the Certifying
Officer or the Appellate Authority should grant
modifications when an application under s. 10(2) of the Act
is validly made after the expiry of the period of six months
laid down in s. 10 (1 ) of the Act.
The purpose of the Act, as it was originally passed in
1946, was merely to require employers in industrial
establishments to define with sufficient precision the
conditions of employment under them and to make the said
conditions known to the workmen employed by them. To. give
effect to this purpose, s. 3 of the Act gave the power
exclusively to the employers to submit draft Standing Orders
for certification. The Certifying Officer had to certify
the Standing Orders, if provision was made in them for every
matter set out in the Schedule and the Standing Orders were
otherwise in conformity with the provisions of the Act. In
addition, sub-s. (2) of section 3 also laid down that the
provision to be made was to. be, as far as practicable, in
conformity with Model Standing Orders prescribed by the
appropriate State Government. Thus, the Act, in its
original form, was designed only
153
for the purpose of ensuring that conditions (A service,
which the employer laid down, became known to the workmen
and the liberty of the employer in prescribing the
conditions of service was only limited to the extent that
the Standing Orders had to be in conformity with the
provisions of the Act and, as far as practicable, in
conformity with Model Standing Orders. The Certifying
Officer or the Appellate Authority were debarred from
adjudicating upon the fairness or the reasonableness of the
provisions of the Standing Orders. Then, as noticed in the
case of Rohtak Hissar District Electricity Supply Co.
Ltd.(1), the Legislature made a drastic change in the policy
of the Act by amending section 4 and laying upon the
Certifying Officer the duty of deciding whether the Standing
Orders proposed by the employer were reasonable and fair,
and also by amending section 10(2) so as to permit even a
workman to apply for modification of the certified Standing
Orders, while, in the original Act, the employer alone had
the right to make such an application. It is, however, to
be noticed that the preamble of the Act was not altered, so
that the purpose of the Act remained as before. While the
Act was in its unamended form, if the workmen had a
grievance, they could not apply for modification of
certified Standing Orders and, even at the time of initial
certification, they could only object to a Standing Order on
the ground that it was not in conformity with the provisions
of the Act or Model Standing Orders. After amendment, the
workmen were given the right to object to the draft Standing
Orders at the time of first certification on the ground that
the Standing Orders were not fair and reasonable and, even
subsequently, to apply for modification of the certified
Standing Orders after expiry of the period of six months
prescribed under s. 10(1) of the Act. These rights granted
to the workmen and the powers conferred on the Certifying
Officer and the Appellate Authority, however, still had to
be exercised for the, purpose of giving effect to the object
of the Act as it continued to remain in the preamble, which
was not altered. Before the amendment of the Act, if the
workmen had any grievance on the ground of unfairness or
unreasonableness of the Standing Orders proposed by the
employer, their only remedy lay under the Industrial Dis-
putes Act. By amendment in 1956, a limited remedy was pro-
vided for them in the Act itself by conferring on the,
Certifying Officer the function of judging the
reasonableness and fairness of the proposed Standing Orders.
These amendments cannot, however, affect the alternative
remedy which the workmen had of seeking redress under the
Industrial Disputes Act if they had grievance against any of
the Standing Orders certified by the Certifying Officer [See
Bangalore Woollen, Cotton and Silk Mills Company Ltd. v.
Their Workmen and Another(2), and the
(1) [1966] 2 S.C.R. 863.
(2) [1968] 1 L.L.J. 555.
2 Sup. CI/69-11
154
Buckingham and Carnatic Co. Ltd. v. Their Workmen(1). It
is, therefore, clear that, after the amendment in 1956, the
workmen have now two alternative remedies for seeking
alterations in the Standing Orders proposed or ,already
certified. They can object to the proposed Standing Orders
at the time of first certification, or can ask for
modification of the certified Standing Orders under s. 10(2)
on the limited ground of fairness or reasonableness. But,
for the same purpose, they also have the alternative remedy
of seeking redress under the Industrial Disputes Act, in
which case the scope of their demand would be much wider.
If the proceedings go for adjudication under the Industrial
Disputes Act, the workmen can claim alterations of the
Standing Orders not merely on the ground of fairness or
reasonableness, but even on other grounds, such as
further, liberalisation of the terms and conditions of
service, even though the certified Standing Orders may be
otherwise fair and reasonable. The remedy provided by the
Act has, therefore, a limited scope only.
In this background, the effect of s. 6, which lays down
that when the Appellate Authority gives its decision
confirming the Standing Orders either in the form certified
by the Certifying Officer or after amending the Standing
Orders by making modifications, thereof or additions
thereto, his decision shall be final, has further to be
considered. On the face of it, this provision means
that, if the Appellate Authority confirms the Standing
Orders at the time of first certification, that order is
not to be subsequently questioned before any authority.
There is, of course, the provision in s. 10(2) permitting
either an employer or a workman to apply for modification
of the Standing Orders after the expiry of six months from
the date of certification. It appears to me that, on the
language of s. 6, it must be held that this request for
modification under s. 10(2) can only be made on the basis of
fresh facts or fresh circumstances arising subsequent to the
passing of the order by the Appellate Authority under s. 6
confirming the Standing Orders for the first time. If, on
receiving an application for modification under s. 10(2) the
Certifying Officer is held to be authorised to reconsider
the reasonableness or fairness of a Standing Order already
certified and confirmed under section 6 the finality
envisaged under that section in respect of the decision of
the Appellate AuthOrity will be nullified. Cases may arise
where, on first application for certification of the
Standing Orders, an objection may be raised by the workmen
and a modification sought on the ground that the proposed
Standing Order is not fair or reasonable. Such an objection
may be dismissed both by the Certifying Officer and the
Appellate Authority. Six months after the certification, a
workman may apply for the same modification of the same
Standing Order without any fresh facts or circumstances. If
it be held that the power of the (1) Civil Appeal No.
674 of 1968 decided on 25-7-1968.
155
Certifying Officer on an application for modification is not
limited at all and can be exercised even on the material
which was originally before the Certifying Officer and the
Appellate Authority, the Certifying Officer may, on the same
material, come to a conclusion different from the conclusion
arrived at by the Appellate Authority at the first stage
under s. 6 of the Act. In that case, the Certifying Officer
may allow the modification which was previously rejected by
the Appellate Authority. The wide interpretation, urged by
learned counsel for the workmen in this appeal that the
power of a Certifying Officer on an application for
modification is not limited at all, can thus result in
orders being made which completely negative the finality of
the decision given by an Appellate Authority under section 6
at an earlier stage. In fact, if tins interpretation is
accepted and it is held that an order of modification can be
made on the identical material which was available to the
Appellate Authority at the time of its earlier order, it
would mean that merely because a period of six months has
elapsed,, a Certifying Officer would be competent to re-
appraise the same facts and circumstances, take a different
view and set aside the order passed by his superior
authority and, thus, in effect, sit in judgment over an
order made by a superior authority. of course, a Certifying
Officer, being junior to the Appellate Authority, may
hesitate to do so; but a successor Appellate Authority may
very well hold views different from his predecessor and may
come to a decision on identical material that a Standing
Order held to be fair and reasonable by his predecessor at
the stage of appeal under s. 6 was not fair and reasonable;
and that a modification should be allowed on the ground of
being fair and reasonable, even though that modification was
disallowed by his predecessor. It is also to be noted that
the right to apply for modification is not confined to
workmen alone, but that right is granted to the employers
also. There can, therefore, be reverse’ cases where the
draft Standing Order submitted by an employer may be
modified by the Appellate Authority under s. 6 and, six
months later, the employer may again apply for modification
so as to result in restoration of his original draft in the
hope that the successor Appellate Authority would hold the
opinion that the original draft Standing Order proposed by
the employer was fair and reasonable and that the
modification made by his predecessor under s. 6 was not
justified. Considering these circumstances, I am of the
view that, when an application under s. 10(2) of the Act is
made, the Certifying Officer can modify Standing Orders
already certified, only if the request is not made on the
basis of the same material which existed at the earlier
stage when the Standing Orders were certified. I am
unable to accept an interpretation which will completely do
away with the finality of orders made under s. 6 of the Act
by an Appellate Authority.
156
This interpretation, of course, does not affect the
right of the workmen to seek an amendment of the Standing
Orders, even if certified as reasonable and fair by the
Appellate Authority under s. 6 by appropriate
proceedings .under the Industrial Disputes Act. In fact,
it appears to me that the power of a Tribunal dealing with
an industrial dispute under that Act relating to a Standing
Order will, of course, be wide enough to permit the Tribunal
to direct alteration of a Standing Order held to be
reasonable and fair by the Appellate Authority under s. 6 of
the Act, in case a dispute about it is referred to the
Tribunal; and that is the only remedy available if either
the workman or the employer desires to have modification
without any fresh grounds, material or circumstances. The
validity of the order of the Appellate Authority in the
present appeal has to be judged on this basis.
I have already mentioned earlier the various Standing
Orders in respect of which modifications allowed by the
Appellate Authority were sought to be challenged in this
appeal. The objections in respect of some of these
modifications, which were originally challenged, were not
pressed by counsel during the hearing of the appeal and,
consequently, those modifications need not be interfered
with. At the stage of final hearing, learned counsel only
pressed for setting aside four modifications mentioned by
the Chief Labour Commissioner in his. appellate order as
items Nos. 1, 3, 5 and 6 relating to modifications .of
Standing. Orders 9(a), 12(A) and 11(vn). It may be
mentioned that items 5 and 6 are both modifications in
Standing Order 11 (vii). In each of these cases, the order
passed by the Chief Labour Commissioner now impugned shows
that he did not rely on any fresh facts, material or
circumstances which were not available at the earlier stage
when the Standing Orders were first certified or first
modified. In effect, therefore, the present order amounts
to passing orders, different from earlier orders passed by
the Appellate Authority, on a reconsideration of the same
material which was available to both the Authorities. In
fact, the modification at item No. 1 in Standing Order 9(a)
had been specifically disallowed in appeal by the Chief
Labour Commissioner in his order dated 12th February, 1963,
when he first heard the appeal under s. 6 and confirmed the
certification of the original Standing Orders. Thus, in
respect of item No. 1, what the present Chief Labour
CommisSioner has done is to permit the modification because
he considered it reasonable and fair, even though, on the
same material, his predecessor had disallowed this very
modification on the basis that, in his opinion, the
original. draft Standing Order was fair and reasonable. On
the principle enunciated above, it is clear that the order
of the Chief Labour Commissioner, allowing all these four
modifications, which is not based on any fresh facts,
material or circumstances, is liable to be set aside.
As a result, I would partly allow the appeal and set
aside the order of the Chief Labour Commissioner (Central),
permitting modifications mentioned by him in his Order at
item Nos. 1, 3, 5 and 6 relating to Standing Orders 9(a),
12(A) and Il(vii). In the circumstances of this case, I
would direct parties to bear their own costs of this appeal.
V.P.S. Appeal allowed in part.
158