# 63 l CALTEX INDIA LIMITED v. PRESIDING OFF1CER, LABOUR COURT, AND ORS

- **Citation:** [1966] 3 S.C.R. 631
- **Court:** Supreme Court of India
- **Decided:** 1966-02-23
- **Case number:** Civil Appeal No. 1006 of 1964
- **Bench:** P. B. Gajendragadkar, K. N. Wanchoo, M. Hidayatullah, J. C. Shah, S. M. S1Kri
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/63-l-caltex-india-limited-v-presiding-off1cer-labour-court-and-ors-3637
- **Pages:** 5

## Headnote

Bihar Shops and Estaulishment Act (B of 1954), s. 26(1) provlooPower of States Government to prescrlue what kinds of misconduct could
be punished by dismissal/ discharge without notice under s. 26(1 )-
Provl90 whether ultra vires.
The appellant company held an enquiry into the misconduct of two
of its permanent employees and dismissed one of them while discharging
the other.
They made applications to the Labour Court under •· 26
of the Bihar Shops and Establishments Act 8 of 1954. The said court
issued a notice to the appellant asking it to show cause why the di,..
missal/ discharge should not be set aside.
The appellant went to the
High Coon under Art. 226 of the Constitution and, Inter alia challenged the validity of s. 26. The High Court having held that the section
was valid the appellant came to this Court by special leave. It
was contended that the proviso to s. 26(1) was ultra vires because it
rolfcred from the vice of excessive delegation in as much as it gave
unguided power to the State Government to prescribe what kinds
of
misconduct were punishable with clischarge or dismissal without notice
under s. 26(1).
HELD : It is well known that in industrial law there are two kinds of
misconduct, namely, (i) major misconducts which justify punishment of
d!smi,.al I discharge and (ii) minor misconducts which do not jmtify
punishment of dismissal/ discharge but may call for lesser
punishments.
Therefore when the legislature gave power to the State Government
under cl. ( c) of s. 40 to specify which kinds of misconduct could be
punished without notice under s. 26(1) it clearly indicated to the State
Government to include in its list of ~isconducts such of them as are
generally understood as major misconducts which justify the dismissal/
discharge of an employee.
This was sufficient guidance to the State
Government and it is difficult to see what other guidance the legislature
could have given to the rule-making authority in this behalf. [633 H634 CJ
Looking at the list of the several items of misconduct which were
prescribed by the State Government under r. 20( I) it was clear that
the State Government properly understood the guidance.
In the circumstances it could not be said that the proviso to s. 26(1)
was ultra vires because of the vice of excessive delegation.
[634 HJ

## Text

• • '
A
B
c
D
E
F
G
H
63 l
CALTEX INDIA LIMITED
v.
PRESIDING OFF1CER, LABOUR COURT, AND ORS.
February 23, 1966
[P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO, M. HIDAYATULLAH,
J. C. SHAH AND S. M. S1KRI, JJ.}
Bihar Shops and Estaulishment Act (B of 1954), s. 26(1) provlooPower of States Government to prescrlue what kinds of misconduct could
be punished by dismissal/ discharge without notice under s. 26(1 )-
Provl90 whether ultra vires.
The appellant company held an enquiry into the misconduct of two
of its permanent employees and dismissed one of them while discharging
the other.
They made applications to the Labour Court under •· 26
of the Bihar Shops and Establishments Act 8 of 1954. The said court
issued a notice to the appellant asking it to show cause why the di,..
missal/ discharge should not be set aside.
The appellant went to the
High Coon under Art. 226 of the Constitution and, Inter alia challenged the validity of s. 26. The High Court having held that the section
was valid the appellant came to this Court by special leave. It
was contended that the proviso to s. 26(1) was ultra vires because it
rolfcred from the vice of excessive delegation in as much as it gave
unguided power to the State Government to prescribe what kinds
of
misconduct were punishable with clischarge or dismissal without notice
under s. 26(1).
HELD : It is well known that in industrial law there are two kinds of
misconduct, namely, (i) major misconducts which justify punishment of
d!smi,.al I discharge and (ii) minor misconducts which do not jmtify
punishment of dismissal/ discharge but may call for lesser
punishments.
Therefore when the legislature gave power to the State Government
under cl. ( c) of s. 40 to specify which kinds of misconduct could be
punished without notice under s. 26(1) it clearly indicated to the State
Government to include in its list of ~isconducts such of them as are
generally understood as major misconducts which justify the dismissal/
discharge of an employee.
This was sufficient guidance to the State
Government and it is difficult to see what other guidance the legislature
could have given to the rule-making authority in this behalf. [633 H634 CJ
Looking at the list of the several items of misconduct which were
prescribed by the State Government under r. 20( I) it was clear that
the State Government properly understood the guidance.
In the circumstances it could not be said that the proviso to s. 26(1)
was ultra vires because of the vice of excessive delegation.
[634 HJ
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1006 of
1964.
Appeal by special leave from the judgment and order dated
August 7, 1963 of the Patna High Court in Misc. Judi. Case No.
343 of 1961.
Niren De, Additional Solicitor-General, A. N. Sinha and D.
N. Gupta, for the appellants.
·632
SUPREME COURT REPORTS
(1966] 3 S.C.R.
N. S. Bi11dra and R. N. Sachthey, for respondent No. 4.
The Judgment of the Court was delivered by
Wancboo, J. The main question raised in this appeal
y special leave against the judgment of the Patna High Court is
·the constitutionality of s. 26 of the Bihar Shops and Establishments Act, No. 8 of 1954, (hereinafter referred to as the Act).
The question arises in this way. The appellant is carrying on
business in petroleum products in the Patna district.
Habibur
Rahman was serving as a watchman and Abdul Rahim as a driver
in the permanent employ of the appellant at the Dinapore depot.
They were charged with gross misconduct and an enquiry was held
by the appellant in that connection. Habibur Rahman was discharged on May 5, 1960 and one month's pay in lieu of notice was
offered to him. Abdul Rahim was dismissed on April 22, 1960.
These two employees made applications under s. 26 of the Act in
December 1960 before the labour court. l11ese applications were
obviously barred by time. The labour court condoned the delay
without giving any notice to the appellant on the question and
issued notice to show cause why the dismissal/discharge be not set
aside.
On receipt of this notice, the appellant learnt that delay
in making the applications had been condoned without hearing it.
Consequently the appellant moved the High Court at Patna under
Art. 226 of the Constitution for quashing the order of the labour
court condoning the delay on the ground that it had been passed
without hearing the appellant.
Thereafter in March 1961 the
appellant moved the labour court for recalling the ex parte order
of condonation. The labour court heard the appellant on March
27, 1961 and decided on April 4, 1961 to condone the delay and
confirm the ex parte order already passed. Thereupon the appellant filed another writ petition in the High Court out of which
the present appeal has arisen. In this petition the order dated
April 4, 1961 was attacked on various grounds. Besides the appellant also attacked the validity of s. 26 of the Act.
It may be
mentioned that a number of other petitions had also been filed before the High Court attacking the validity of ~- 26 of the Act. AU
these petitions were heard together and the High Court held t~t
s. 26 was constitutionally valid. It also held that the order of April
4, 1961 showed that delay had been condoned after hearing the
appellant and therefore there was no cause for interference. with
that order. The appellant moved the High Court for a ce~ttficatc
to appeal to this Court, which was refused. It then applied for
special leave, which was granted and that is how the matter has
come before us.
The attack of the appellant is on the proviso to s. 26 (I) ?f
.the Act, and the only ground that has been urged before us on its
behalf is •hat that proviso suffers from the vice of excessive delegaB
c
D
E
JI
G
H
-
.
•
..
•
. .
' •
!
--""
•
CALTEX v. LABOUll. COURT (Wanchoo, /.)
633
A
tion and should therefore be struck down. The relevant part
of s. 26 is in these terms :
•
c
D
1
G
H
"26. Notice of dismissal or discharge-(!) No employer shall dismiss or discharge from his employment any
employee who has been in such employment continuously for a period of not less than six months except for a
reasonable cause and without giving such employee at
least one month's notice or one month's wages in lieu
of such notice :
Provided that such notice shall not be necessary where
the services of such employee are dispensed with on a
charge of such misconduct as may be prescribed by the
State Government, supported by satisfactory evidence recorded at an inquiry held for the purpose."
It is not necessary to set out the rest of s. 26 for that is not under
attack.
The contention on behalf of the appellant is that when the
proviso lays down that no such notice would be necessary as is
mentioned in the main part of s. 26(1) where services are dispensed
with on the charge of misconduct and the State Government is.
given full power to specify the nature of the mis-conduct which
would eliminate the necessity of a notice, there is excessive delegation of its authority by the legislature in the matter of specifying
the nature of such misconduct. It is urged that as the proviso
stands it gives arbitrary and naked power to the State Government to specify any misconduct on proof of which notice could
be dispensed with.
We are of opinion that there is no substance in this contention. Under s. 40 of the Act, the State Government has been
given the power to make rules to carry out the purposes of the
Act. Clause (c) of s. 40 (2) specifically empowers the State Government to frame rules to provide for the nature of misconduct of an
employee for which his services may be dispensed with without
notice. By virtue of that power, the State Government framed r.
20(1) which specifies as many as 11 acts which are to be treated as
misconduct on proof of which no notice as required by s. 26 (I)
would be necessary.
We are of opinion that there is guidance in the words of the
section itself in the matter of specifying misconduct on proof of
which no notice would be necessary. It is well known that in
industrial law there are two kinds of misconduct, namely, (i) major
misconducts which justify punishment of dismissal/discharge, and
(ii) minor misconducts which do not justify punishment of dismissal/discharge but may call for lesser punishments. Therefore •
·634
SUPREME COURT REPORTS
[1966] 3 S.C.R.
when the legislature indicated that the State Government will prescribe the kinds of misconduct on proof of which no notice will
be required and services of an employe4 can be dispensed with it
was clearly indicating to the State Government to include in its
list of misconducts such of them as are generally understood as
major misconducts which justify the dismissal/discharge of an
employee. This in our opinion is sufficient guidance to the State
Government to specify in the rule it was expected to make such
misconduct as is generally understood in industrial law to call for
the punishment of discharge/dismissal. It is difficult to sec what
other guidance the legislature could have given to the rule making
authority in this behalf. The only other way in which the legislature could have acted would be to indicate the list of several
items of misconduct in the section itself; but apparently the legislature thought that by delegating authority to the State Government the matter of what misconduct should be sufficient to dispense with notice would remain flexible and the State Government would from time to time look into the matter and see what
misconduct should be prescribed for this purpose. The authority
was being delegated to the State Government and that is also
a consideration which the legislature might have kept in its mind
when it gave this flexible power to the State Government. The
legislature must have known that in industrial law misconduct
is generally of two kinds (namely, (i) major misconduct justifying
punishment of discharge/dismissal, and (ii) minor misconduct
justifying lesser punishment), and that appears to have been thought
by the legislature to be sufficient guidance t , the State Government
to prescribe by rule such misconduct as is major in nature and
deserves punishment of discharge or dismissal. Looking at the list
of several items of misconduct which have been prescribed by the
State Government under. r. 20(1), we are of the opinion that the
State Government also properly understood the guidance which was
;:ontaincd in the words of s. 26( I) and its proviso and has prescribed
a list of what are clearly major misconducts for the purpose and
has also included therein by the last clause "breach of the provisions of the Standing Orders applicable to the establishment and
certified under the Industrial Employment (Standing Orders) Act,
1946". The last clause would thus include all other major misconducts which would justify an order of dismissal/discharge.
Therefore as we read th~ words of s. 26(1) and its proviso, we have
no doubt that there is sufficient guidance there for the State Government to define misconduct on proof of which no notice would be
necessary. Further if we look at what the State Government has
done by r. 20 (I), it is clear that the State Government also rightly
understood the guidance contained in the words of the section
and has acted accordingly. In the circumstances we are of opinion that the proviso to s. 26(1) is not ultra vires because of the
vice of excessive delegation.
A
B
c
D
E
F
G
II
•
• .
•
--.._
~~
' •
I
-,
..
l
' -
(
•
A
B
c
CAI.TEX v. LABOUR COURT (Wanchoo, /.)
635
Learned counsel for the appellant also wanted to urge that the
order of the labour court condoning delay was bad. We have
not allowed him to pursue this point. It is true that t)» first order
condoning delay made in December 1950 was ex parte; but after
the writ petition was filed against that order by the appellant in
the High Court, the labour court gave an opportunity to the appellant and heard it on March 27, 1961. After hearing both partiei,
the labour court confirmed the order condoning delay which it
had already made. It cannot therefore be said now that the order
was made without hearing both the parties. The High Court hai
not thought fit to interfere with the order condoning delay after
hearing both parties made on April 4, 1961. We cannot see how
the appellant can ask us to interfere in the matter in an appeal by
special leave.
The appeal therefore fails and is hereby dismissed with coi;tl;
to reipondent No. 4, namely, the State of Bihar.
Appeal dismissed.