3 S.C.R.

SUPREME COURT REPORTS 457

We therefore allow the appeal in part and set aside the award in so far as it directed the payment of 50%

of the total emoluments for the strike period but maintain the rest of the award. There will be no order as to costs.

Appeal allowed.

ASSAM. OIL COMP ANY ·

ITS WORKMEN (P. B. GAJENDRJ.GADKAR and K. C. DAs

GUPTA, JJ.)

Industrial Dispu, te-Termination of service in accordance with contract-If can be qu.estioned before industrial tribunal-Termination on basis of misconduct of workman-If amounts to dismissal- No enquiry-,-Reinstatement if appropriate relief.

One S was employed by the appellant as a secretary and one_ of.the terms of employment was that the appointment may be terminated on one month's notice on either side. The appellant was thoroughly dissatisfied with the work of S and disapproved of her conduct in joining the union. Purporting to act under the contract, the appellant terminated the services of S and gave her one month's pay in lieu of notice.

No enquiry was held by the appellant before terminating the services of S.

The industrial tribunal held that the termination of services amounted to a dismissal for misconduct and since no enquiry was held it was illegal and unjustified and it passed an order for the reinstatement of S.

The appellant contended that as the termination was strictly in accurdance with the terms of the contract it could not be challenged before an \ndustrial tribunal, that even if no enquiry was held the order of discharge was justified as the evidence led before the tribunal established the misconduct of S and that at the highest it was a case for awarding compensation and not for reinstatement: Held, that the discharge amounted to punishment for alleged misconduct and was unjustified in the absence of a proper enquiry. Even where the discharge was in exercise of the power under the contract it was competent for. the tribunal to enquire whether the discharge had been effected in the bona fide exercise of that power. If the tribunal found that the purported exercise of the power was in fact the result of the misconduct alleged then it would be justified in dealing with the dispute m the basis that the order of discharge was in effect an order of dismissal.

Western India Automobile Association v. Industrial Tribunal, 8omba)I, [1949] F.C.R. 321, followed ..

Management of Ckandramalai Estate, Ernakulam,

Its Workmen

Das G1<pta ] •

April 'f.·

t960 Held, further, that in the circumstances of the present case compensation and not reinstatement \Vas the appropriate relief

~ ssam Oil Co.. that should have been awarded. The normal rule \Vas that in New nelhi cases of wrongful dismissal the dismissed employee was entitled v. to reinstatement but there could be cases \vhere it would not be Its Work1nen expedient to follow the normal rule.

In the present case the appellant's office was a small one and S occupied a position of some confidence.

The appellant was dissatisfied with the work of S and had lost confidence in her.

In such a case it would not be fair either to the employer or the employee to direct reinstatement.

CIVIL APPELLATE JURISDICTION: .Civil Appeal - No. 24 of 1959.

Appeal by special leave from the Award dated September 18, 1957, of the Industrial Tribunal, Delhi, in I. D. No. 3 of 1957. H. N. Sanyal, Additional Solicitor-General of India., Vidya Sagar and. B. N. Ghosh, for the appellant.

Frank Anthony and Janardan Sharma, for the respondents.

1960. April 4.

The Judgment of the Court was delivered by .

Gajend••gadka• ].

GAJENDRAGADKAR, J.-This appeal by special leave arises from an industrial dispute between the a ppellant, Assam Oil Company Ltd., and the respondent, its workmen. The dispute was in regard to the termination of services of Miss P. Scott, one of the employees of the appellant. The respondent alleged that the said termination of Miss Scott's services was illegal and that was one of the points referred to the Industrial Tribunal, New Delhi, for its adjudication. The other point of dispute bet.ween the parties was in regard to the quantum and conditions of the payment of bonus for the year 1955-56 to the appellant's workmen. The industrial tribunal has directed the appellant to reinstate Miss Scott and to pay her all the back wages from the date of her dismissal until the date of her reinstatement. It has also ordered that Miss Scott should be paid bonus for the two years in question as specified in the award. The direction for the payment of bonus is not challenged by the appellant; but the validity of the order asking the appellant to reinstate Miss Scott and to pay her the whole of the back wages during the relevant period is questioned before us, and so the main point which calls for

our decision is whether the appellant was justified in r96o terminating the services of Miss Scott, and if not, ld b

Assam:Oi/..Cr> .. whether in the circumstances of this case it wou e N'ew Delhi appropriate to direct an order of reinstatement ? v.

The appellant company is chiefly engaged in search- Its . .Workme11 ing for and refining crude oil and it has a refinery at c . d dL 1.

D. b . . A

A N D lh' h II .ffi a; en raga "a' • ig 01 m ssam. t ew e I it as a sma o ce ·· with 3 or 4 employees. Miss Scott was originally in the employment of M/s. Burmah-Shell, New Delhi, as a lady secretary. Her services were lent to the Delhi representative of the appellant company sometime in January, 1954. In September, 1954, the appellant set 1lp its own gffice at New Delhi and then offered Miss Scott direct employment on the same terms and condition& that governed her employmet with M/s.

Burmah-Shell. Miss Scott then resigned her service from M/s. Burmah-Shell and joined the appellant as a regular employee in October, 1954.

Her appointment was subsequently confirmed on September 1, 1955, on terms and conditionswhich were communicated to her and which she accepted. One of the terms was that the appointment in question may be terminated on one month's notice on either side.

During the course of her employment Miss Scott did not give satisfaction to the appellant and on many occasions she was verbally warned to iprove her work and not to repeat her lapses. On ; February 26, 1957, Mr. Gowan, the Delhi. representative of the • appellant, warned Miss Scott in writing about her lapses and added that he did not , consider her work satisfactory. He told her to strive to improve her work and mend matters failing which he would have to consider whether she was suitable to continue in the appellant's employment. On February 28, 1957, the services of Miss Scott were terminated by Mr. Gowan and she was told that the faultf! pointed. out to her had not been corrected and that her performance during her service had not matched up to the standard -required. Miss Scott was given one month's pay in

lieu Of notice and she accepted it. At the time when her services were terminated Miss Scott used to receive the total remuneration of Rs. 535 per month.

Assam Oil Co.,

New Delhi

Its Wo,.kmen

Gajendf'agadkaf' J.

On March 13, 1957, Miss Scott made a representation to the Conciliation Officer, New Delhi, against the termination of her services, and it is out of the proceedings taken by the Conciliation Officer on this representation that the present dispute ultimately came to be referred to the industrial tribunal for adjudication. The union of the appellant's workmen which sponsored her case alleged before the tribunal that the termination of Miss Scott's services was wrongful and illegal and she was entitled to reinstatement.

It was urged on her behalf that no enquiry was held by the appellant before terminating Miss Scott's services and that made the impugned termination illegal and unjustified.

A claim for bonus for the years 1955 and 1956 was also made on her behalf.

The appellant resisted this claim. It was urged by the appellant that the dispute was an individual dispute and as such the reference was incompetent. It was alleged that Miss Scott was not a workman under s. 2(s) of the Industrial Disputes Act, 194 7 (hereinafter called the Act), and so the tribunal had no jurisdiction - to deal with the dispute. On the merits the appellant's case was that it had purported to terminate the services of Miss Scott in terms of the contract after paying her one month's wages in lieu of notice, and that the industrial tribunal would not be justified in interfering with such an order.

The tribunal has held that Miss Scott was a workman under s. 2(s) and since the union had sponsored her cause the dispute was an industrial dispute under s. 2(k) of the Act. According to the tribunal the termination of Miss Scott's services in substance amounted to dismissal for misconduct, and since no enquiry had been held it was illegal and unjustified.

On the merits the tribunal took the view that even if Miss Scott had been guilty of some negligence tbe punishment of dismissal was unduly severe. The tribunal also observed that in dismissing her Mr. Gowan was influenced by the consideration that Miss Scott

had become a member of the union and that was substantially responsible for her dismissal. It is on these findings that the tribunal has passed an order of reinstatement.

...

In the present appeal the learned Addition.al Solici-

I960 tor-General has raised two points before us.

He Assam oil Co. contends that the appellant has terminated the services v. of Miss Scott in pursuance of the terms of the contract Its Workmm and an order of discharge passed strictly according to . - the contract cannot be questioned before the ind us- Ga; endragadkar J. trial tribunal. Alternatively he argues that even if the order of discharge is found to be unjustified because no enquiry was held the whole evidence relating to the alleged misconduct of Miss Scott has been led before the tribunal and in the light of the said evidence the order of discharge should not have been interfered with and reinstatement should not have been ordered.

At the. highest it may be a case for awarding compensation and no more. The other findings recorded by the tribunal against the appellant have not been challenged in the present appeal. , The wide scope of the jurisdiction of industrial tribunals is now well established. As early as 1949 it was held by the Federal Court in Western India' Automobile Association v. Industrial Tribunal, Bombay (1) that the argument based upon th.e sanctity and the validity of contracts between the employer and the employees "overlooks the fa.pt , that when a dispute arises about the employment df/a person at the instance of a trade union or a trade union objects to the employment of a certain person, the definition of industrial dispute would cover both those cases. In each of those cases, ' although the employer may be unwilling to do so, there will be jurisdiction in the tribunal to direct the employment or non-employment of the person by the employer. / This is the same thing as making a contract of employment when the employer is unwillingto enter into such a contract with a particular person". It_ was also observed that the industrial tribunal "can direct in the case of dis:rnissal that an employer or employee shall have the relation, of employment with the other party, although one of them is unwilling to have such relation " (p. 337). In other words, the jurisdiction of the industrial tril; mnal to direct reinstatement of a discharged or dismissed employee is no longer in doubt. That being the nature ad extent of the juris-

(1) [1949] F.C.R. 321, 3~6,

z96o diction of the industrial tribunal it is too late now to contend that the contractual power of the emrJloyer to Assam oil Co. v. discharge his employee under the terms of the con-

Tts workmen tract cannot be questioned in any case.

If the contract gives the employer the power to Gajendragadkar J. terminate the services of his employee after a month's notice or subject to some other condition it would be open to him to take recourse to the said term or condition and terminate the services of his employee ; but when the validity of such termination is challenged in industrial adjudication it would be competent to the industrial tribunal to enquire whether the impugned discharge has been effected in the bona fide exercise of the power conferred by the contract. If the discharge has been ordered by the employer in bona fide exercise of his power then the industrial tribunal may not interfere with it ; but the words used in the order of discharge and the form which it ma, y have 'taken are not conclusive in the matter and the industrial tribunal would be entitled to go behind the words and the form and decide whether the discharge is a discharge simpliciter or not. If it appears that the purported exercise of the power to terminate the services of the employee was in fact the result of the misconduct alleged against him then the tribunal will be justified in dealing with the dispute on the basis that despite its appearance to the contrary the order of discharge is in effect an order of dismissal. The exercise of the power in question to be valid must always be bona fide. If the bona fides of the said exercise of power are successfully challenged then the industrial tribuns, l would be entitled to interfere with the order in question. It is in this context that the industrial tribunal must consider whether the discharge is mala fide or whether it amounts to victimisation or an unfair labour practice, or is so capricious or unreasonable as would lead to the inference that it has been passed for ulterior motives and not in bona fide exercise of the power conferred by the contract.

In some cases the employer may disapprove of the trade union activities of his employee and may purport to discharge his services under the terms of the contract. In such cases, if it appears that the real reason

... -

...

and motive for discharge is the trade union activities z96o of the employee that would be a case where the indus- Assam oil Co. trial tribunal can justlyhold that the discharge is unv. justified and has been niade mala fide. It may also Its workmen appear in some cases that though the order of discharge is couched in words which do not impute any Gajendrogadka" J. misconduct to the employee, in substance it is based on misconduct of which, according to the employer, the employee has been guilty ; and that would make the impugned discharge a punitive dismissal. In such a case fairplay and justice require that the employee shou.ld be given a chance to explain the allegation

weighing in the mind of the employer and that would necessitate a proper enquiry. Whether or not the termination of services in a given case is the result of the bona fide exercise of the power conferred on the employer by the contract or whether in substance it is a punishment for alleged misconduct would always depend upon the facts and circumstances of each case.

In this connection it is important to remember that just as the employer's right to exercise his option in terms of the contract has to be recognised so is the employee's right' to expect security of tenure to be taken into account. These principles ha_ve been consistently followed by industrial tribunals and we think rightly (Vide : Buckin'gham and Garnatic Company Ltd. v. Workers of the Company (2). Therefore we are not prepared to accede to the argument urged before us by the learned Additional Solicitor-General that whenever the employer purports to terminate the services of his employee by virtue of the power conferred on him by the terms of contract, industrial tribunals cannot question its validity, propriety or legality. , - In the present case there is no doubt that the order of discharge passed against Miss Scott proceeds on the basis that she was guilty of a misconduct. As we have already pointed out Mr. Gowan communicated to her what he thought were grave defects in her work and in the letter of discharge itself the same allegations are made against her. That being so, it must be held that the discharge in the present case i~

{a) [1952) f..A.C. ~90,

r¢o punitive. It amounts to a punishment for alieged

Assam oil Co. misconduct and so the tribunal was right in holding v. that the appellant was not justified in discharging Its wo, kmen Miss Scott without holding a proper enquiry.

It, however, appears that evidence has been led by Gajend,.gadkar J. the appellant before the tribunal in support of its case that Miss Scott was guilty of dereliction of duty on several occasions which justified her dismissal. Mr.

Gowan has given evidence about the quality and standard of Miss Scott's work and he has sworn that a long series of instances of bad work and failure to carry out orders, insolence and untruthfullness had come to his notice. On one occasion the letter typed from a draft had been incorrectly typed and more than a complete paragraph had been omitted, and in addition Miss Scott told him that she had checked the letter. According to Mr. Gowan she was disobedient to him and he had occasion to warn her verbally several times in the past. It is true that Mr. Gowan has also stated that he knew that Miss Scott had become a member of the union and he thought that a person who was holding a confidential position in his office should not have become a member of the union.

The evidence given by Mr. Gowan on the whole appears to be straightforward and it leads to two conclusions: (1) that Mr. Gowan was thoroughly dissatisfied with the work of Miss Scott, and (2) that he did not approve of Miss Scott's conduct in joining the union. Since the latter circumstance has at least partially weighed in the mind of Mr. Gowan in terminating the services of Miss Scott it must be held that the said termination is not justified. It would not be open to an employer to dismiss his employee solely or principally for the reason that he or she had joined a trade union. That is a fundamental right guaranteed to every citizen in this country and it would be idle for anybody to contend that the mere exercise of the said right would incur dismissal from service in private employment. Therefore we are prepared to accept the finding of the tribunal that the dismissal of Miss Scott is not justified.

That raises the question as to whether reinstatement can be ordered in the present case.

There is no doubt

that the normal rule is that in cases of wrongful dis- ·

I960 missal the dismissed employee is entitled to reinstate- ' Assam oil Co. ment; but there can be cases where it woulil not be v. expedient to follow ,, this normal rule and to direct Its Wo•kmen reinstatement. In the present case the appellant's - office is very small .an.d Miss Scott undoubtedly occu. Gajendragadkar J. pied a position of some confidence with Mr. Gowan.

The warnings given by Mr. Gowan to Miss Scott from time to time clearly bring out his dissatisfaction with her work, and if Mr. Gowan has sworn that he has lost confidence in Miss Scott it would be unfair to hold that the loss of confidence is due solely or substantially because Miss Scott joined the union of the appellant's workmen. It i.s no doubt true that the effect of the employer's plea that he has lost confidence in the dismissed employee cnnot ordinarily be exaggerated; but in the special circumstances of this case we are inclined to hold that it would not be fair either to the employer or to the employee to direct reinstatement. It appears that subsequent to her dismissal and in spite of it Miss Scott found employment with Parry & Company and Nestles Products (India) Ltd., between May 19, 1958 to October 31, 1958 and December 1, 1958 to November 30, 1959, respectively. The first of the said two companies paid her Rs. 500 per month except for October when she was paid Rs. 525 and the latter company has paid her Rs. 500 per month except for November when her salary was Rs. 525 and for December and January when she was paid Rs. 15 per day. Besides she has received from the appellant Rs. 2, 700 as subsistence allowance during the pendency of. the present appeal. We are, therefore, satisfied that it would be fair and just to direct the appellant to pay a substantial amount of compensation to her. The learned Additional Solicitor-General has agreed to pay Rs. 12,500 in addition to Rs. 2, 700 which have been already paid to her as subsistence allowance.

We think that in the circumstances of this case the amount of Rs. 12,500 represents a fair amount of compensation on the payment of which the order of reinstatement passed by the tribunal should

Assam oil Co. v.

Its TV 0rk1nen

Gajendragadkar } .

April 6.

be set aside. We would accordingly set aside the order of reinstatement and direct that the appellant should pay to Miss Scott Rs. 12,500 as compensation. The order in respect of bonus has n!it been challenged and is confirmed. There will be no order as to costs.

Appeal partly allowed.

•THE STANDARD.VACUUM REFINING CO.

OF INDIA LTD. v.

ITS WORKMEN AND OTHERS. (P. B. GAJENDRAGADKAR, K. N. WANCHOO and K. c. DAS GUPTA, JJ.) Industrial Dispute-Abolition of contract system of labour- Dispute raised by regular workmen of company-Reference to Tribunal, if competent-Industrial Dispu.tes Act, r947 (r4 of r947), SS. 2 (k), IO.

A dispute was raised by the respondents, the workmen of the appeJlant company, with respect to contract labour employed by it for cleaning maintenance work at the refinery including premises and plant belonging to it. They made a demand for abolition of the contract system and for absorbing the workmen employed through the contractors into the regular service of the company.

The matter was referred to the Tribunal under s. IO of the Industrial Disputes Act, 1947 The company objected to the reference on the grounds (1) that it was incompetent inasmuch as there was no dispute between it and the respondents and it was not open to them to raise a dispute with respect to the workmen of some other employer, viz., the contractor, and (2) in any case, it was for the company to decide what was the best method of carrying on its business and the Tribunal could not interfere with that function of the management.

The Tribunal held that the reference was competent and on the merits it was of opinion that the work which was being done through the contractor was necessary for the company to be done daily, that doing this work through annual contracts resulted in the deprivation of security of service and other benefits, privileges, leave, etc., of the.workmen of the contractor and that therefore the contract system with respect to this work should be abolished: Held, (1) that the dispute in the present case was an industrial dispute within the meaning of s. 2(k) of the Industrial Disputes Act, 1947, as interpreted in Workmen of Dimakuchi Tea Estate v. The Management of Dimakuchi Tea Estate, [1958),

\..

ASSAM. OIL COMP ANY

ITS WORKMEN

GUPTA, JJ.

[1949] F.C.R. 321

H. N. Sanyal

Vidya Sagar

B. N. Ghosh

Frank Anthony

Janardan Sharma

Gajend••gadka•

GAJENDRAGADKAR

Assam Oil Company Ltd.

P. Scott

Scott

Industrial Tribunal, New Delhi

New Delhi

Delhi

Burmah-Shell

M/s. Burmah-Shell

September 1, 1955

February 26, 1957

Gowan

February 28, 1957

Assam Oil Co.

March 13, 1957

s. 2(s)

Industrial Disputes Act

s. 2(s)

s. 2(k)

Assam oil Co.

[1949] F.C.R. 321

Gajendragadkar

Gajendrogadka

Gajend,.gadkar J.

Gowan

Parry & Company

Nestles Products (India) Ltd.

May 19, 1958

October 31, 1958

December 1, 1958

November 30, 1959

P. B. GAJENDRAGADKAR

K. N. WANCHOO

K. c. DAS GUPTA

SS. 2

IO of the Industrial Disputes Act, 1947

s. 2(k)

Industrial Disputes Act, 1947


Assam oil Co. v.

Its TV 0rk1nen

Gajendragadkar } .

April 6.

SUPREME COURT REPORTS

[1960J

be set aside. We would accordingly set aside the order of reinstatement and direct that the appellant should pay to Miss Scott Rs. 12,500 as compensation. The order in respect of bonus has n!it been challenged and is confirmed. There will be no order as to costs.

Appeal partly allowed.

•THE STANDARD.VACUUM REFINING CO.

OF INDIA LTD. v.

ITS WORKMEN AND OTHERS. (P. B. GAJENDRAGADKAR, K. N. WANCHOO and K. c. DAS GUPTA, JJ.) Industrial Dispute-Abolition of contract system of labour- Dispute raised by regular workmen of company-Reference to Tribunal, if competent-Industrial Dispu.tes Act, r947 (r4 of r947), SS. 2 (k), IO.

A dispute was raised by the respondents, the workmen of the appeJlant company, with respect to contract labour employed by it for cleaning maintenance work at the refinery including premises and plant belonging to it. They made a demand for abolition of the contract system and for absorbing the workmen employed through the contractors into the regular service of the company.

The matter was referred to the Tribunal under s. IO of the Industrial Disputes Act, 1947 The company objected to the reference on the grounds (1) that it was incompetent inasmuch as there was no dispute between it and the respondents and it was not open to them to raise a dispute with respect to the workmen of some other employer, viz., the contractor, and (2) in any case, it was for the company to decide what was the best method of carrying on its business and the Tribunal could not interfere with that function of the management.

The Tribunal held that the reference was competent and on the merits it was of opinion that the work which was being done through the contractor was necessary for the company to be done daily, that doing this work through annual contracts resulted in the deprivation of security of service and other benefits, privileges, leave, etc., of the.workmen of the contractor and that therefore the contract system with respect to this work should be abolished: Held, (1) that the dispute in the present case was an industrial dispute within the meaning of s. 2(k) of the Industrial Disputes Act, 1947, as interpreted in Workmen of Dimakuchi Tea Estate v. The Management of Dimakuchi Tea Estate, [1958),

\..

3 S.C.R.

SUPREME COURT REPO~TS 467

S.C.R. n56, because (i) the respondents had a community of r960 interest with the workmen of the contractor, (ii) they had also a substantial interest in the subject-matter of the dispute in Standard Vacuum the sense that the class to which they belonged, namely, work- Refining Co. of

mn, was substantially affected thereby, and (iii) the company India Ltd. could give relief in the matter. v.

The reference was, accordingly, competent.

Its Wo1kmen

(2) that the direction given by the Tribunal that the contract system should be abolished was just in the circumstances of the case and should not be interfered with.

D. Macropollo and Co. (P) Ltd. v. D. Macropollo and Co. (P) Ltd. Employees' Union, A.LR. 1958 S.C. 1012, distinguished.

C1v1i.

APPELLATE JURISDICTION: Civil Appeal No. 130 of 1959.

Appeal by special .leave Jfrom the Award dated September 5, 1958, of the Industrial Tribunal, Bombay, in Reference (I.T.) No. 187 of 1958.

0. K. Daphtary, Solicitor-General of India, G. B. Pai and Sardar Bahadur, for the appellants.

H. R. Gokhale, S. B. Naik and K. R. Ohaudhury, for respondent No. 1.

1960. April 6.

The Judgment of the Court was delivered by W ANCHOO, J.-This is an appeal by special leave in Wanchoo J. an industrial matter. The appellant is The Standard

Vacuum Refining Company of India Limited (hereinafter called the company).

A dispute was raised by the workmen of the company (hereinafter called the respondents) with respect to contract labour employed by the company for cleaning maintenance of the , refinery, (plant and premises) belonging to the company. The system in force in the company is that this work is given to contractors for a period of one year from October 1 to September 30.

At the time when the reference was made the contract was with Ramji Gordhan and Company for the period from October 1, 1957, to September 30, 1958.

On April 27, 1957, the respondents made a demand for abolition of the contract system that prevailed in the company and for a)Jsorbing the workmen employed through the contractors into the regular service of the company with retrospective effect from the date of their employment in the company through the . contractors.

The case of the respondents was that the contractor used to change sometimes from year to year with the

SU~REME COURT REPORTS [1960]

'960 result that the workmen employed by the previous

S d -d v contractor were thrown out of employment.

As an tan "' - acuum . . 'd th t .

O b l Refining co. of mstance, rt was sar a prev10us to cto er , 1957, India Ltd. the contract was with Gowri Construction Company. v.

That company employed 67 workmen to do the work. 11, Wo•kmen But when the contract was given to Ramji Gordhan and Company, all these 67 workmen were thrown out Wanchoo ]. of employment, though 40 of them were subsequently re-employed as fresh employees by Ramji Gordhan and Company. The result of the system therefore was that there was no security of service to the workmen who were in effect doing the work of the company.

Besides the contractors were paying much less to the workmen than the amount paid by the company to its unskilled regular workmen. Further, the workmen of the contractors were not entitled to other benefits and amenities such as provident fund, gratuity, bonus, privilege leave, medical facilities and subsidised food and housing. to which the regular workmen of the company were entitled. The work was of a permanent nature, but the contract system was introduced to deny the workmen the rights and benefits which the company gave to its own workmen.

The dispute was taken to the conciliation officer.

When conciliation failed, the Government of Bombay made the following reference on May 13, 1958.

"The contract system for cleaning the premises and plant should be abolished and workers working in the refinery through the Ramji Gordhan and Company should be treatec! as workers of the Standard Vacuum Refining Company of India Limited, Bombay, and wage-scales, conditions of service, etc., that are applicable to the workers of the refinery be made applicable to them.

Past service of these workers should be counted and they should be treated as continuously in the service of the Stanvac refinery from the date of their entertainment." The company resisted the claim and raised two main con.tentions. In the first place it was contended that the reference under s. 10 of the Industrial Disputes Act, No. 14 of 1947 (hereinafter called the Act), was incompetent. In the second place it w!\os <)9ntended

 ..

...

that the work done by the contractor's workmen was z960 not germane to the manufacturing process and was Standa-;;; acuum therefore entrusted to the contractor. If the workmen Refini11g co. of of the contractor were not satisfied with the conditions India Ltd. of service, they could take up the matter with the v. contractor and the company had nothing to do with Its Workmen it. As to the difference between the wages and bene- Wanchoo 1. fits and amenities of the regular workmen of the company and the contractor's workmen, it was said that the work of the two sets of workmen was very different and that in any case this was a matter between the contractor and its workmen. The contractor was an independent employer and it was incorrect to say that the real employer was the company. It ; was for the company to decide what was the best method of carrying on its business and the industrial tribunal should not interfere with that function of the management.

The tribunal held that the reference was competent.

On the merits it was of opinion that the work which was being done through the contractor was necessary for the company and had to be done daily, though it was not a part of the manufacturing process. It further held that doing of this work through annual contracts resulted in the deprivation of security of service and other benefits, privileges, leave, etc., for the workmen of the contractor. Therefore considering the nature of the case it was of opinion that this was a proper case where a direction should be given to the company to abolish the contract system with respect to this work. In the result the company was directed with effect from November 1, 1958, to discontinue the practice of getting this work done through contractors and to have it done through workmen engaged by itself. The other part of the demand, namely, that all the workmen of the contractor should be taken over by the company and their past servicls should be counted and that they should be given the same wagescale and conditions of service, etc., which were applicable to the regular workmen of the company was • rejected. The company was further directed fo engage regular workmen for this work and_ in so doing it was to give preference to the workmen employed by Ramji

tlo

470~

SUPREME COURT REPORTR [1960]

r95o Gordhan and Company. Wage-scale and other bene-

51 d -d v fits to be given to these workmen were left to the an a1 - acuum . .

Refining co. of company to be determmed by 1t.

India Ltd.

Learned Solicitor-General a.ppearingfor the company v. raised two contentions before us, namely, (i) is this Its Workmen dispute an industrial dispute and therefore tho ref<, rence was competent? and (ii) is the tribunal justified Wanchoo ].

in interfering with the management function as to how it should get its work done ?

Re. (i): The contention under this head is that there is no dispute between the company and the respondents and that it was not open to the respondents to r'1.ise a dispute with respect to the workmen of some other employer (in this case, Ramji Gordhan and Company).

Reliance in thil'l connection was placed on the definition of "industrial dispute " in s. 2 (k) of the Act and the judgment of this Court in Workmen of Dimakuchi Tea Estate v. The Management of Dimakuchi Tea Estate (1 ).

The definition of " industrial dispute " m s. 2 (k) requires three things-

(i) There should be a dispute or difference;

(ii) The dispute or difference should be between employers and employers, or between employers and workmen or between workmen and workmen ;

(iii) The dispute or difference must be connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person.

The first part thus refers to the fact um of a real and substantial dispute, the second part to the parties to the dispute and the tiiird to the subject-matter of the dispute. The contention of the learned Solicitor- General is two-fold in this connection, namely, (i) that there is no real or substantial dispute between the company and the respondents, and (ii) that the subjectmatter of the dispute is such that it cannot come within the terms of the definition in s. 2 (k) .

The first submission can be disposed of shortly.

There is undoubtedy a real and substantial dispute between the company and t.he respondents on the question of the employment of contract-labour for thr-

Pl [tgsSJ S.C.R. 11s6.

.3 S.C.R. SUPHE.ME COURT REPUR'l'S 471 ... work of the company. The fact that the respondents r960 who have raised this dispute are not employed on 5 d -v . . . h l tan ardacuunt contract basis will not make the dispute any t e ess, Refining co. of a real or substantial dispute between them and the India Ltd. company as to the manner in which the work of the v. company should be carried on.

The dispute in this Its Workmen case is that the company should employ , workmen d l d h . .

Wanchoo ]. irect y an not t rough contractors in carrymg on its work and this dispute is undoubtedly real and substan. tial even though the regular workmen (i.e., the respondents) who have raised it are not employed on contract labour. In Dimakuchi case (1) to which reference has been made, the dispute was relating to an employee of the tea estate who was not a workman.

It was nevertheless held that this was a real and substantial dispute beteen the workmen and the company.

How the work should be carried on is certainly a matter of some importance to the workmen and in the circumstances it cannot be said that this is not a real and substantial dispute between the cqmpany and its workmen. Thus out of the three ingre~ dients of s. 2(k) the first is satisfied ; the second also is satisfied because the dispute is between the company al}d the respondents; it is the third ingredient which really calls for determination in the light of the decision in Dimakuchi case {1 ).

Section 2(k), as it is worded, would allow workmen of a particular employer to raise a dispute connected with the employment or non-employment, or the terms of employment or with the. conditions of labour of any person. It was this aspect of the matter which was considered in Dimakuchi case {1) and it was held that the words " any person " used in s. 2(k) would not justify the workmen of a particular employer io raise a dispute about any one in the world, though the words " any person " in that provision may not be equated with the words "any workman". The test therefore to be applied in determining the scope of the words "any person " in s. 2(k) was stated in the following words at pp. 1174-75 :- " If, therefore, the dispute is a collective dispute; the party raising the dispute must have either a direct interest in the _subject-matter of dispute or a

(1) (~9~8) S, C,:!l,, u,;6.

Statidard Vacuum

Refining Co. of

India Ltd.

v. /Is Workmen

Wanchoo ].

substantial interest therein in the sense that the class to which the aggrieved party belongs is substantially affected thereby. It is the community of interest of the class as a whole-class of employers or class of workmen-which furnishes the real nexus between the dispute and the parties to the dispute. We see no insuperable difficulty in the practical application of this test. In a case where the party to a dispute is composed of aggrieved workmen themselves and the subject-matter of the dispute relates to them or any of them, they clearly have a direct interest in the dispute.

Where, however, the party to the dispute also composed of workmen espouse the cause of another person whose employment or non-employment, etc., may prejudicially affect their interest, the workmen have a substantia, l interest in the subjectmatter of dispute. In both such cases the dispute is an industrial dispute."

We have therefore to see whether the respondents who have raised this dispute have a direct interest in the subject-matter of the dispute or a substantial interest therein in the sense that the class to which the respondents belong is substantially affected thereby and whether there is community of interest between the respondents and those whose cause they have espoused.

There can be no doubt that there is community of interest in this case between the respondents and the workmen of Ramji Gordhan and Company. They belong to the same class and they do the work of the same employer and it is possible for the company to give the relief which the respondents are claiming. The respondents have in our opinion also a substantial interest in the subject-matter of the dispute, namely, the abolition of the contract system in doing work of this kind. The learned Solicitor- General particularly emphasised that there was no question of the interest of the respondents being prejudicially affected by the employment or nonemployment or the terms of service or conditions of labour of the workmen of Ramji Gordhan and Company and placed reliance on the words "may prejudicially affect their interest" appearing in the observations quoted abuve.

We may, however, mention that

the test laid down is that the workmen espousing the r960 cause should have a substantial interest in the subjectst . d d v f h d. d . l h "ll an ar - acuwn matter o t e ispute, an it was on y w en 1 ustrat- Refining co. of ing the practical application of the test that this Court India Ltd. used the words "may prejudicially affect".their interest". v.

Besides it is contended by Mr. Gokhale for the respon- Its Workmen dents that even if preJ"udicial effect on the interest of Wanchoo /. the workmen espousing the cause is necessary, this is a case where the respondents' interest may be prejudicially affected in future in case the contract system of work is allowed to prevail in this branch of the work of the company.

He submits that if the company can carry on this part of the work by contract system it may introcfuce the _same system in other branches of its work which are now being done by it.s regular workmen.

We do not think it necessary tcr go into this aspect of the matter as we have already indicated that prejudicial effect is only one of the illustrations of the practical application 6f the test laid down in Dimakuchi case (1), viz., substantial interest in the sense that the class to which the aggrieved party belongs is substantially affected thereby. It seems to us therefore that the respondents have a community of interest with the workmen of Ramji Gordhan and Company who are in effect working for the same employer .. They have also a substantial interest in the subject-matter of the dispute in the sense that the class to which they belong (namely, workmen) is substantia.lly affected thereby. Finally the company can give relief in the matter. we are therefore of opinion that all the ingredients of s. 2(k) as interpreted in Dimakuchi case(1 ) are present in this case and the dispute between the parties is an industrial dispute and the reference was competent.

- Re. (ii) : We now come to the question whether the tribunal was justified in giving the direction for the abolition of the contract system in the manner in which it has done so. In dealing with this question it may be relevant to bear in mind that industrial adjudication generally does not encourage the employment of contract labour in

modern times. As has been observed by tlrn Royal Com. mission on Labour "whatever the merits of the system (I) [1958] S, C.R, n56,

474 l:iUPHEME OUUH:l' H, El'UBTl:i LHH:iUJ

z960 in primitive times, it is now desirable, if the ma.nage- - ment is to discharge completely the complex respon- Siandard-Vacuum "b"l' J 'd b 1 d b 't h t h Refining Co. of SI I 1ty a1 upon it y aw an y eqm y, t a t e India Ltd. manager should have full control over the selection,

v hours of work and payment of the workers". The same Its Workmen opinion has been expressed by several Labour Enquiry Committees appointed in different States. We agree that lVanchoo ]. h d d b k w enever a ispute is raise y wor men m regard to the employment of contract labour by any employer it would be necessary for the tribunal to examine the merits of the dispute a part from the general consideration that contract labour should not be encouraged, and that in a given case the decision should rest not merely on theoretical or abstract objections to contract labour but also on the terms and conditions on which contract labour is employed and the grievance made by the employees in respect thereof.

As in other matters of industrial adjudication so in the case of contract labour theoretical or academic considerations may be relevant but their importance should not be overestimated.' Let us then consider the contract labour system in the present case.

The contract in . this case related to four matters.

But the reference is confined to one only, viz., cleaning maintenance work at the refinery including premises and plant and we shall deal with that only. lcio far as this work is concerned, it is incidental to the manufacturing process and is necessary for it and of a perennial nature which must be done every day., Such

work is generally done by workmen in the regular employ of the employer and there should be no difficulty in having regular workmen for this kind of work. The matter would be different if the work was of intermittent or temporary .nature or was so little that it would not be possible to employ full-time workmen for the purpose.

Under the circumstances the order of the tribunal appears to be just and there are no good reasons for interfering with it.

Our attention in this connection was drawn to D. 111acropollo And Go. (P) Ltd. v. D. Macropollo And Go. (P) Ltd. Ernployees' Union(') and it was urged that the tribunal should not have interfered with the

\I) A.LR. 1958 S.C. IOIZ.

, - -

management's manner of hving its work done in the

I960 · most economical and convenient way that it thought Standa-:;-:;, acuum proper. It was pointed out that this was not a case Refi'ningCo. of where the contract system was a camouflage and the India ua. workmen of the contractor were really the workmen of v. the company. It may be acceptd that the contractor Its Workmen in the present case is an independent person and the wa:;;;,0 f. system is genuine and there is no question of the · company carrying on this work itself and camouflaging it as if it was done through contractors in order to pay less to the workmen. But the fact that the contract in this case is a bona fide contract would not necessarily mean that it should not be touched by the industrial tribunals. If the contract had been mala fide and a cloak for suppressing the fact that the workmen were really the workmen of the company, the tribunal would have been justified in ordering the company t'o take over the entire body of workmen and treat it as its own workmen. But because the contract in this case was bona fide the tribunal has not ordered the company to take over the entire body of workmen.

It has left to it to decide for itself how; many workmen it should employ and on what .terms and has merely directed that when selection is. being made preference should be given to the workmen employed by the present contractor. In Macropollo case (1), this Court held that the reorganisation had been adopted by the employer for reasons of economy and convenience a.nd was bona fide.

In that case the main. business of the concern was the selling agency of variou@ cigarette manufacturing concerns. Before 1946 the concern used to employ distributors for the purpose and these distributors used to employ salesmen. In 1946 there were communal riots in Calcutta and therefore the concern took over the salesmen in its direct employment in ortler to reorganise them on communal basis in the then prevailing circumstances.

In 1954 the concern decided to close down its own outdoor sales department and revert to the distributor system. It was in that context that certain workmen had to be retrenched, and this Court held that the reorganisation scheme adopted in 1954 for :reasons of economy and convenience was bona fide

(1) ./\.I.l~. 19ss s.<;:. 1oia. ·

z96o and if it resulted in retrenchment that was

51 d -:;-;:; inevitable. These facts would show that in that

;~;; n; c":."0/"' case there was reorganisation of the business result.

India Ltd. ing in retrenchment. In the present case no such v. thing arises and the only question for decision is Its Wa>kmen whether the work which is perennial and must go on from day to day and which is incidental and Wanchoo ].

April 7.

necessary for the work of the refinery and which is sufficient to employ a considerable number of wholetime workmen and which is being done in most concerns through regular workmen should be allowed to be done by contractors. Considering the nature of the work and the conditions of service in the present case we are of opinion that the tribunal's decision is right and no interference is called for, except that the date .should now be changed, for such a direction cannot be put into force with retrospective effect from November l, 1958. It appears that a few months remain before the present contract will come to an end. We think that for these few months the present system may continue.

W' e therefore dismiss the appeal with this modification that the order of the tribunal will be carried into effect from such date on which the present contract in force in the company comes to an end. The respondents will get their costs from the company.

Appeal dismissed subject to modification..

MADHYA PR.ADESH MINERAL INDUSTR.Y

ASSOCIATION

TFIE REGIONAL LABOUR COMMISSIONER

JABALPUR AND OTHERS (P. B. GAJENDRAGADKAR, K. N. w ANCHOO

and K. C. DAS GUP'l'A, JJ.) Minimum Wages, Fixation of-Notification by State Government prescribing minimum rates for stone-breaking or stone-crushing in mines-Validity-Minimum Wages Act, r948 (II of r948), ss. 5 (2), 27, Sch., Part I item 8.

The Madhya Pradesh Government issued a notification under s. 5 (2) of the Minimu!Il Wacs Act, 1948 (rr of 1948), prcscribin(j

Gajendragadkar

Scott

ITS WORKMEN AND OTHERS

K. N. WANCHOO

K. c. DAS GUPTA, JJ.

SS. 2

IO of the Industrial Disputes Act, 1947

s. 2(k)

Industrial Disputes Act, 1947

India Ltd.

APPELLATE JURISDICTION

K. Daphtary

G. B. Pai

Sardar Bahadur

H. R. Gokhale

S. B. Naik

K. R. Ohaudhury

W ANCHOO

Wanchoo

October 1 to September 30.

Ramji Gordhan and Company

October 1, 1957

September 30, 1958

April 27, 1957

Government of Bombay

May 13, 1958

Bombay

Stanvac refinery

s. 10

Industrial Disputes Act

November 1, 1958

Ramji

s. 2

s. 2

s. 2

S 471

India Ltd. company

Dimakuchi

s. 2(k)

Section 2(k)

s. 2(k)

s. 2(k)

Statidard Vacuum

Gokhale

Wanchoo

s. 2(k)

Macropollo

Calcutta

MADHYA PR.ADESH MINERAL INDUSTR.Y

K. N. w ANCHOO

K. C. DAS GUP'l'A

Minimum Wages Act

ss. 5

Madhya Pradesh Government

s. 5

Il Wacs Act, 1948


. 476

SUPREME COURT REPORTS [1960]

z96o and if it resulted in retrenchment that was

51 d -:;-;:; inevitable. These facts would show that in that

;~;; n; c":."0/"' case there was reorganisation of the business result.

India Ltd. ing in retrenchment. In the present case no such v. thing arises and the only question for decision is Its Wa>kmen whether the work which is perennial and must go on from day to day and which is incidental and Wanchoo ].

April 7.

necessary for the work of the refinery and which is sufficient to employ a considerable number of wholetime workmen and which is being done in most concerns through regular workmen should be allowed to be done by contractors. Considering the nature of the work and the conditions of service in the present case we are of opinion that the tribunal's decision is right and no interference is called for, except that the date .should now be changed, for such a direction cannot be put into force with retrospective effect from November l, 1958. It appears that a few months remain before the present contract will come to an end. We think that for these few months the present system may continue.

W' e therefore dismiss the appeal with this modification that the order of the tribunal will be carried into effect from such date on which the present contract in force in the company comes to an end. The respondents will get their costs from the company.

Appeal dismissed subject to modification..

MADHYA PR.ADESH MINERAL INDUSTR.Y

ASSOCIATION

TFIE REGIONAL LABOUR COMMISSIONER

JABALPUR AND OTHERS (P. B. GAJENDRAGADKAR, K. N. w ANCHOO

and K. C. DAS GUP'l'A, JJ.) Minimum Wages, Fixation of-Notification by State Government prescribing minimum rates for stone-breaking or stone-crushing in mines-Validity-Minimum Wages Act, r948 (II of r948), ss. 5 (2), 27, Sch., Part I item 8.

The Madhya Pradesh Government issued a notification under s. 5 (2) of the Minimu!Il Wacs Act, 1948 (rr of 1948), prcscribin(j

3 S.C.R. SUPREME. COURT RF..A?ORTS 477

the minimum rates of wages for employment in stone breaking x960 and stone crushing operations carried on in mines in exercise of the authority delegated to it by the President by a notification :Vladhya Pradesh under Art. 258 of the Constitution. The appellant company, lVIineral I nduslry Association engaged in manganese mining industry, challenged the validity v. of the said notification by a writ petition filed in the High Court Regional Labour and its case was that the said notification was ultra vires s. 5(2) Commissioner of the Act.

The High Court found against the appellant and rejected the petition. The question for determination in the appeal, therefore, was whether item 8 in Part l of the Schedule to the Act, properly construed, included stone breaking and stone crushing operations in a mining industry: Held, that item 8 in Part l of the Schedule to the Minimum Wages Act, 1948, was not intended to cover the breaking or crushing of stones incidental to mining operations and must be limited to stone breaking and stone crushing employment in quarries. The impugned notification was, therefore, ultra vires s. 5(2) of-the Act and could not be enforced.

It would, however, be open to the Government, if it so desired, to achieve the object it had in view in issuing the impugned notification by adding appropriate items to the Schedule in exercise of its power under s. 27 of the Act : Held, further, that it was not necessary for the appellant to challenge the vires of the Presidential notification in the first instance in order that he might impugn the notification in question.

A. Thangal Kunju Musaliar v. M. Venkitachalam Patti, [1955] 2 S.C.R. n96, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 389 of 1959. - Appeal from the judgment and order dated October 25, 1957, of the Bombay High Court at Nagpur in Misc. Petition No. 476 of 1956.

A. S. Bobde and Ganpat Rai, for the appellant.

H. J. Umrigar K. L. Hathi and R.H. Dhebar, for respondent No. 2; ·

1960. April 7.

The Judgment of the Court was delivered by GAJENDRAGADKAR, J.-This appeal arises from a Gajendragadkar J. writ petition filed by the appellant, Madhya Pradesh Mineral Industry Assoiation, in whch the appellant challenged the validity of the notification issued by the Madhya Pradesh State Government on March 30, 1952, under s. 5(2) of the Minimum Wages Act, 1948 (11 of 1948) (hereinafter called the Act).

The High Court of Bombay at Nagpur dismissed the appellant's petition but has granted the appellant

r960 a certificate of fitness under Art. 133(l)(c) of the Constitution. It is with the said certificate that the Madhya Pradesh Mineral Industry present appeal has been brought to this Court.

Association The appellant is a non-pr_ofit making company limited by guarantee and registered under s. 26 of the Regional Labour v.

commissioner Indian Companies Act, 1913. It has been formed with the object of protecting and promoting the Gajendragadkar J. interest of its members-shar_eholders who are engaged in the mining industry by all legitimate and constitutional means. It appears that under Art. 258 of the Constitution the President of India by Notification No. S.R.O. 2052 published on December 11, 1951, entrusted Governments of certain States including Madhya Pradesh with their consent the functions of the Central Government under the Act in so far as such functions relate to the fixation of minimum rates of wages in respect of employees employed in stonebreaking or in stone-crushing operations carried on in mines situated within their respective States. Pursuant to the said delegation the Madhya Pradesh Government issued the impugned notification purporting to act under s. 5(2) of the Act.

This notification has prescribed the minimum rates of wages for employment in stone-breaking or in stone-crushing operations carried on in mines. The rates thus prescribed were inclusive of dearness allowance or compensatory cost of living allowance.

The Regional Labour Commissioner (Central), Nagpur, Respondent 1, wrote to the appellant for the first time on June 20, 1956, stating that the State of Madhya Pradesh, Respondent 2, had considered the question whether the Act was applicable to the manganese mining industry and had come to the conclusion that it was so applicable; that is why the appellant's members were asked by respondent 1 to implement the Act within a fortnight from the receipt of his letter. The appellant made several representations to respondent 1 urging that the Act was inapplicable to the manganese mining industry; nevertheless respondent 1 threatened large-scale prosecution of the appellant's members on the basis that the Act applied to them, and its provisions had been contravened by them. The appellant was thus driven to file the

......

present petition because it alleged that it had no .alternative remedy, at any rate equally speedy and efficaeix960

M adhya Pradesh ous, and so it was urged on its behalf that the High Mineral Industry Court should issue a writ quashing the impugned Association v. notification as ultra vires. In its petition the appelh II d h h fi . . d b h Regional Labqur _ lant ad also a ege t at t e noti ca.t10n issue y t e commissioner President of India under Art. 258 cannot fasten upon the manganese mining industry the character of Gajendragadkar J. employment in stone-breaking or stone-crushing and if that was the object of the said notification it was invalid.

The respondents disputed the correctness of the appellant's contention that the impugned notification is invalid. It was urged on their behalf that any industry wherein the workers are employed in operations involving stone-breaking or stone-crushing is governed by the Act. In their written statement they described the details about the mining operations and contended that the mining of manganese ore mainly consists of development work or the removal of overburden, breaking of big mineral stones like boulder ore or bed ore to manageable sizes, dressing of ores to remove impurities, etc. According to the respondents, having regard to the nature of the manganese mining industry the Act applied to the stone-breaking or :'!tone-crushing operations connected with it.

The High Court has accepted the respondent's plea and has rejected the appellant's prayer that a writ ghould be issued in its favour prohibiting the respondents from enforcing the provisions of the Act against its members. Unfortunately, on two important points the High Court has misdirected itself. It appears to havi; i assumed that the impugned notification has added an entry in the Schedule to the Act, ; ind has observed that as a result of the said addition the provisions of the Act came to be applied to the employment in stone-breaking or in stone-crushing operations carried on in the mines.

The High Court has made this observation in setting out the appellant's case.and it is on the basis of this observation that the High Court has proceeded to examine the validity of the appellant's contention. It is, however, clear that the impugned notification does not purport to add any

'960 item in Schedule I and that was also not the case of

Madhya p, adesh th.e appellant. Thus the assi:impton ade by the Mine>al lndust'Y High Court on both the pomts IS, with respect,

Association erroneous.

Regiona~Labour In its jugment the igh Court as alo observed Commis.<ioncr that the vires of the impugned not1ficat10n, though . - challenged in the petition, was not challenged before Ga1endragadkar J the High Court and so the only question that remained for its decision was one of interpretation of the relevant provisions of the entry introduced by the notification. This statement again does not appear to be entirely correct. The principal, if not the sole, ground on which the appellant sought for a writ from the High Court was that the impugned notification was ultra vires s. 5(2) of the Act. If the validity of the said notification had been conceded by the appellant its writ petition would have immediately become ineffective because if the notification is valid then the question of construction of the material entry can present no difficulty whatever. In terms tbe stonobreaking and stone-crushing operations carried on in mines are specified and the appellant could not possibly urge that the relevant activities carried on by its members did not attract the said description. In view of the fact that the High Court has made a clear statement to the effect that the vires of the impugned notification had not been challenged before it we were at first not inclined to allow Mr. Bobde, for the appellant, to argue that point before us; however, after hearing him and after constdering the rest of tho record we are satisfied that the statement made in the judgment is not accurate. In the petition filed by the appellant the validity of two notifications was challenged ; the first was the notification issued by the President of India under Art. 258 oft.he Constitution, and the second is the impugned notification under which proceedings are threatened against the appellant's mem hers. It is clear from the record that the appellant did not and could not have pressed its case against the validity of the first notification, but it did , press its objection against the validity of the second notification; and that would be clear from the certificate of fitness granted by the.High Court itself. The

\ r

certificate says that the questions raised by the appelz960 Ia_nt relat~ to the applicab.ility of the prvisions of the Madhya Pradesh

Act to persons employed m stone-breakmg or stone- Mineral Industry crushing operations carried on at various manganese Association mines. Now it is clear that this question can arise - R . ~· L b only if the appellant seeks to challenge the validity ~~'::.'::issin~~· of the notification, not otherwise. It is because the employees in question are, according .to the appellant, Gajendragadkar J. not employed under any of the items prescribed in the Schedule to the Act that the impugned notification is invalid ; in that context the questions posed in the certificate would arise.

If the notification itself is valid then the solution to the question posed can hardly be regarded as fit for a certificate under Art. 133(1)( c) of the Constitution. Besides, the appellant's contention against the validity of the impugned notification has been set ou_t in its application for certificate. before the High Court and the same has been expressly repeated in the statement of case filed by the appellant before us.

We must, therefore, hold that the High Court was in error in assuming that the vires of the impugned notification had been conceded by the appellant before it.

This is another serious infirmity in the judgment of the High Court.

As a consequence of the two infirmities in the judgment the approach which the High Court adopted in dealing with the matter has -been consid€lrably influenced. It has no doubt considered the meaning of Uie word "employment " and " stone" in connection with the expression "stone-breaking" and "stonecrushing ". Even this part of the discussion in the judgment seems to as!lume that the impugned notification has really added one item to the list in the Schedule. It has apparently not been realised that if the present notification purpotted to make an addition to the items in the Schedule there would. have been no controversy between the parties. Accordin, g to . the High Court employment should be given its wider sense and should be held to mean " the action of employing or the state of being employed". The High Court has also held that the word " stohe" should be taken to mean " a piece of rock or hard mineral substance (other than metal) of a small and moderate

'960 size". The interpretation of the two words adopted

Madhya Pradesh by the High Cort. has been taker: by it rom the Mineral Industry Shorter Oxford Dwt10nary, and ha vmg assigned to

Association the two words the two respective meanings just stated

llegiona~Labour the High ourt has. held that ston~-brei; tking and Commissioner stone-crushmg operat10ns earned on m mmes would

G . d-dk 1 attract the provisions of the Act. a; en raga "' • Before dealing with the vires of the impugned notification it would be material to examine the relevant provisions of the Act. The Act has been passed to provide for minimum rates of wages in certain employments.

Section 2(b) defines the appropriate government as meaning, inter alia, (1) in r\)lation to any scheduled employment carried on by or under the authority of the Central Government or in relation to a mine the Central Government, and (2) in relation to any other scheduled employment the State Government.

It would thus appear that the Legislature intended that the provisions of the Act may in due course be extended to mines and so it has prescribed that in respect thereof the Central Government would be the appropriate Government.

Section 2(e) defines an employer as meaning, inter alia, any person who employs whether directly or through another person or whether on behalf of himself or any other person one or more employees in any scheduled employment in respect of which minimum rates of wages have

ben fixed uhder this Act. Section 2(g) defines scheduled employment as meaning an employment specified in the Schedule or any process or branch of work forming part of such employment. Section 3 authorises the appropriate government to .fix minimum rates of wages in regard to the employments specified in Parts I and II of the Schedule respectively and prescribes the procedure in that behalf.

Section 5 lays down the procedure for the fixing and revising of minimum wages. Section 5(2) provides that after following the procedure prescribed by the said section the appropriate government shall by notification in the official gazette fix, or as the case may be, revise the minimum rates of wages in respect of each scheduled employment, and unless such notification othervJise provides, it shall come into force on the expiry

I f.l

of three months from the date of its issue.

There is

I960 only one more section which needs to be mentioned,· Madhya Pradesh that is s. 27 which empowers the appropriate govern- Mineral Industrv dd h f h S h d Association ment to a o eit er part o t e c e ule any employment in respect of which it is of opinioh that Region:i J, abour minimum, rates of wages should be fixed under this Commissioner Act after following the procedure prescribed by it, and . - the section adds that after the notification is thus Ga1endragadkar f. issued the Schedule shall, in its application to the State, be deemed to be amended accordingly.

It is thus clear that the whole scheme of the Act is intended to work in regard to the emplOyments specified in Part I and Part II of the Schedule and the Legis- lature has wisely left it to the appropriate government to decide to what employments the Act should be extended and in what areas. Section 5(2) empowers the appropriate government to fix or revise minimum wages in regard to any of the employments in the Schedule to which the Act applies. This power can be exercised only if the employment in question is specified in the Schedule and the Act is therefore applicable to it. Section 27 confers a wider power on the appropriate government, and in exercise of tpe said power the appropriate government may add an employment to the Schedule. The nature and extent of the said two powers are thus quite separate and distinct and there can be no doubt that what can be done by the appropriate government in exercise of its power under s. 27 cannot be done by it in exercise of its pe>wer under s. 5(2). It is significant that the impugned notification has been issued by the Madhya Pradesh Government by virtue of the powers under s. 5(2) of the Act which have been delegated to it by the President irr exercise of his authority under Art. 258 of the Constitution. The main argument urged by Mr. Bobde is that the impugned notification is ultra vires s. 5(2) because stone-breaking and stone-crushing operations in manganese mines do not fall under any of the items in Part I of the Schedule. The dispute thu~ raised really lies within a very narrow compass : Does employment in stone-breaking or in stone-crushing operations carried on in mines ,.specified in the impugned

notifiction amount to employment in , atone-breaking

x960 or stone-crushing which is item 8 in Part I of the ground that the under any other M d' -P d h Schedule to the Act? It is common a "Y" ra es 1 . t" d .c ]] Mineral Industry emp oyment m ques 10n oes not ia

Assodation item in Part I. v.

Regional Labour It is true that the provisions of the Minimum Wages Commissioner Act are intended to achieve the object of doing social . -- justice to workmen employed in the scheduled em- Ga; endragadkar f ployments by prescribing minimum rates of wages for them, and so in construing the said provisions the court should adopt what is sometimes described as a beneficent rule of construction. If the relevant words are capable o(two constructions preference may be given to that construction which helps to sustain the validity of the impugned notification; but it is obvious that an occasion for showing preference for one construction rather than the other can legitimately arise only when two constructions are reasonably possible, not otherwise.

Now, does employment in stone-breaking or stone-crushing as specified in Part I of the Schedule on a reasonable construction include stone-breaking or stone-crushing operations in a mining industry ? In answering this question it would be necessary to bear in mind that the scheduled employment under s. 2(g) covers the employment specified in the Schedule or any process or branch of work forming part of such employment. It is conceded before us by both the parties that the provisions of the Act aP.ply to the scheduled employments in all branches of their work which may be incidental to the main scheduled employments.

The impugned notification, on the other hand, applies only to the stone-breaking or stone-crushing operations carried on in mines and it does not cover other operations connected with the manganese mining works. This position is inconsiiitent with the scheme of the Schedule and that is a point which prima facie is in favour of the appellant's contention.

It is, however, urged by Mr. Umrigar, for the respondents, that the word "employment" as well as the word "stone" used in item 8 should receive their widest denotation, and that, according to him, would include stone-breaking or 13tone-orushing operation&

.. ,.

carried on in mines. It is conceded that stone-breakr960 ing or stone-crushing operations have to be carried on in regard to the work in manganese mines. Mdhya Pradesh , Mineral Industry Stones are beaten . to small pieces by means of a Association hammer and they are washed and passed. through v •. sieves of different meshes before manganese is obtain- Regional. L_abour

ed. When the Schedule refers to the employment

Commissioner of stone-breaking or stone-crushing does it referGajendragadkar J. to the incidental stone-breaking or stone-crushing in connection with manganese piine operations ?

In a chemical or a geological sense stones may include manganese and that is one of the meanings given to the word in the Short.er Oxford Dictionary. On the other hand, the word "stone " as popularly understood in ordinary parlance particularly when it is coupled with the word "breaking" or " crushing " would exclude manganese. When we speak of stone-breaking or stone-crushing normally we refer to stone in the sense of " piece of rock " and that would exclude manganese. Employment in stone-breaking or stonecrushing in this sense would refer to quarry operations. Thus whether or not the word " stone " should be understood in the wider sense or in a limited sense must depend upon the context in which the word is used. The intention which is reasonably deducible . from the context would decide whether it is the expanded meaning or the limited meaning of the word that can be accepted. The same consideration could apply to the denotation of the word "employment".

We have carefully considered all the items in the Schedule and have taken into account the general beneficent policy of the Act but we are unable to hold . that when item 8 refers to stone-breaking or stonecrushing it is intended to cover the breaking or the crushing of stones incidental to the manganese mining operations. The context seems to exclude the application of the wider meaning of the word " stone " used in item 8. Therefore, our conclusion is that the stonebreaking or stone-crushing operations which are carried on in mines are not included in item 8 in the Schedule; a.n:d if that be the true position the impugned notification issued by the State Government under s. 5(2) is ultra vires.

Cii

r96o The High Court has referred to the fact that in describing some items in Part I the word " any '' has Madhya Pradesh Mineral Indmtry been used whereas the said word has not been used in Association item 8. For instance, item 1 refers to employment in

v. any woollen carpet making or shawl weaving establish- Regionaz Labour

Commissioner ment, whereas item 8 merely refers to employment in stone-breaking and stone-crushing. The absence of Gajendragadkar J. the word" any" according to the High Court indicates that the wm:d "stone" as well as the word "employment" had been used in their wide denotation. We are not satisfied that this conclusion is right. In fact it appears to us that if the word "auy" had been used

in item 8 it might have helped to make its scope wider; that is to say, if item 8 had read as "employment in any stone-breaking or any stone-crushing operations" it might have tended to make its scope wider.

As it stands the entry is, in our opinion, confined to stone-breaking and stone-crushing employment in quarries and not in mines.

As we have already pointed out a notification under s. 5(2) can be issued only in respect of employment.s which fall under the Schedule. We would, however, like to add that this conclusion merely helps to emphasise the fact that the appropriate government may, and can, act under s. 27 of the Act if it is desired that the employment in mines or in connection with any operations incidental to mining should be governed by the provisions of the Act.

Section 27 empowers the appropriate government to add items to the Schedule and it would be open to the appropriate government to adopt such a course if it is intended to achieve the object with which the impugned notification has been issued.

One more point still remains to be considered.

Mr. Umrigar attempted to argue that the appellant cannot challenge the vires of the impugned notification without challenging the vires of the delegation of authority effected by the notification issued by the President of India under Art. 258 of the Constitution.

The argument is that if the notification of the President is valid then the State Government bas merely exercised its authority as a delegate and its validity cannot be challenged in isolation from the principal

or parent notification _which conferred the authority z960 on the State Government. This contention has obvi- M dh--;, ously not been raised before the High Court. Besides, Mfne!a~ Tn~:~~:; if the State Government purports to take action on Association the strength of the impugned notification which is v. h 1 Regional Labour invalid it would be open tot e appe lant to resist the commissioner threatened action on the ground that the notification - is invalid and no action can be validly taken againstGajendragadkar J. the appellant for the contravention of the provisions of the Act. As this Court has observed in A. Thangal Kunju Musaliar v. M. Venkitachalam Potti(1 ), "there can be no agency in the matter of a commission of a wrong. The wrong-doer would certainly be liable to be dealt with as a party directly responsible for his wrongful action", and it was added that" on the analogy of a civil wrong the tortfeasor could certainly not protect himself against the liability on the ground of having committed the tort under the directions of his principal, and so the agent could in no event exculpate himself from the liability for the wrongful act done by him and if he is amenable to the jurisdic tion of the High Court the High Court could certainly issue an appropriate writ against, him under Art. 226".

By parity of reasoning it would follow that if the impugned notification issued by the State Government is ultra vires it cannot fall back upon the President's

notificatioi+ in support of the plea that the action which it proposes to take against the appellant would nevertheless be justified. We must accordingly hold that it is open to the appellant to claim a writ against the respondents even without challenging the vires of the Presidential notification.

In the result we hold that the impugned notification issued by respondent 2 is invalid and canno_t be enforced.

The appeal is accordingly allowed, the order" passed by the High Court set aside and the application for a writ made by the appellant allowed with costs throughout.

Appeal allowed.

(1) (1955] 2 s.c.R, 1196, i:au,

India Ltd.

Wanchoo

November l, 1958

MADHYA PR.ADESH MINERAL INDUSTR.Y

AS

P. B. GAJENDRAGADKAR

K. N. w ANCHOO

K. C. DAS GUP'l'A

Minimum Wages Act

ss. 5

Madhya Pradesh Government

s. 5

Il Wacs Act, 1948

S.C.R. SUPREME. COURT

Art. 258

lVIineral I nduslry Association

s. 5(2)

Part l of the Schedule to the Act

s. 5(2)

s. 27

CIVIL APPELLATE JURISDICTION

A. S. Bobde

Ganpat Rai

H. J. Umrigar K. L. Hathi

R.H. Dhebar

GAJENDRAGADKAR

Gajendragadkar

s. 5(2)

Minimum Wages Act, 1948

High Court of Bombay at Nagpur

Art. 133(l)(c)

Madhya Pradesh Mineral Industry

s. 26

Indian Companies Act, 1913

Gajendragadkar

Art. 258

President of India

December 11, 1951

Madhya Pradesh Government

s. 5(2)

June 20, 1956

State of Madhya Pradesh

India

Art. 258

Schedule I

s. 5(2)

Bobde

Art. 258

Art. 133(1)( c)

Section 2(b)

Section 2(e)

Section 2(g)

Section 3

Section 5

Section 5(2)

s. 27

Section 5(2)

Section 27

s. 27

s. 5(2)

s. 5(2)

Art. 258

s. 5(2)

s. 2(g)

Umrigar

referGajendragadkar

s. 5(2)

s. 5(2)

s. 27

Section 27

Art. 258

againstGajendragadkar

Art. 226