# AGRA ELECTRIC SUPPLY CO. LTD v. SRI ALLADIN & ORS

- **Citation:** [1970] 1 S.C.R. 808
- **Court:** Supreme Court of India
- **Decided:** 1970
- **Bench:** J. M. SHELAT A!'D C. A. VAIDIALl:\GAM
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/agra-electric-supply-co-ltd-v-sri-alladin-ors-4698
- **Pages:** 13

## Headnote

J11du11rial E111ploy111e.111 (Stn11ding Orders) Act (20 of 1946)-Standing Ordtr.r certified under Acr-Whe1Jrer applicable to H'Orkmen employed bej('re such cer1ificatio11.
Termination of service d11ri11g probation-Real
basis
1nisconducrOrder worded as si1nple tern1i11a1ion-Power of Labour Court to go behind and asc~rtain real basis.
Prior to 1951 there were no rules or conditions of service prescribing
the age o! supc(annuation in the appellant-Company. In 1951, its Standing Ordtrs were ccrtilied under the Industrial
EmployQ!Cnt
(Standing
Orders) Act, 1946, and were brought into force. Standing Order 32 provided 5~ years as !he age of supcran1ioation. 'fhe first three respondents
were workmen employed in the Company in 1929, 1935 and 1937. Relying on Standing Order 32 the Company served notices on these 3 \\'Orkruen who had :tttained the <iges of 58. 64 and 59 on the dates of the f(.-spcctive notices, and rc-lircd them. ·1ne Labour Court, to which the dispute
arising from such rc1ircn1ent \Vas referred, held that the Standing Orders
having he.en certified long after these \\'Orkmen \Vere employed and the
condition, or their employment not having provided any age of retiretnent,
the Company could not apply Standing Order 32 to them, that the orders
of retirement on the ground or superannuation were h;1d and gave con.<>e·
quential directions.
·rhe Company appointed the 4th respnndcnt in I>ccember 1965 as a
cleaner.
The lctt~r Clf appointment staled that he v.·as to be a probationer
for 6 months v.:ith discretion to the concerned officer to c~tend the period.
The letter also stated that during the probationary period his servicf" ":as
liable to termination \Vilhout any notiee and without as..c;igning any H:aions
therefor.
His service \\'as tern1inatcd
in February
1966.
Before the
Labour Court evidence \\'ac; led on bchalr df the Management that
the
work.man's service v.•as terminated
becauc;c his v.·ork as probationer was
unsatisfactory. The L1hour Court found on the evidence heforc it that
the real reason for pas<jing: the impugned order of termination wa-; not the
alleged unsatisfnctory work but his having unauthorisedly used a motor·
cycle belonging to an engineer of the Con1pany and caused <lamag.: to it.
Jn that viev.•, the Labour Court held that
the exercise of the power to
terminate vt'as not bnnn fide and consequently set aside that order also.
Jn appeal to thi<; (',.ourl,
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HELD: (1) (a) The Act provides that every employer o'{ an industrial e&tablishmen: must have his Standing Orders certified, that the Stand·
ing Order' should be submitted t0 the certifying
authority along
wi1h
particulars of all the W(lrkmen then employed as
also the name of 1h:-
11nion if any. to \\·hich they belong, that the certifying authority should
f!ive notice to the union, and in ilc; absence, to the workmen to make their
1 I
ohjection5 and an op1l0rtunity to the employer and the rcpre<;cntatives of
1hc workntcn for heing heard. that the authority c;hould thereafter adjudi·
<:ate upon the rairncc;s and rcasonahlencs,.; of the Standing Orders submit-
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AGRA ELECT. SUPPLY CO. v. ALLAD!N
809
ted, that the authority should certifY the-Standing Orders wjth. modilicationi or additions if any, that any person aggrieved, by such certification·
may appeal to the appellate authority, that the Standing Orders as fi.na1ly
certified come into operation on a particular day, that the ..... employer should
publish them on notice boards in such a manner that they become ,Casily
known to the workmen, and that, after the_ expiry Of 6 months• froin, the_
date on which the Standing· Orders or the last modification. came into
operation, either the employer or any of the workmen could apply for a
mOdification.
These provisions show
that once the Standing Qrders ~S,
certified come into operation, they become binding._ on the empJoyer· as
well as all the woi-kmen presently enzployed_ and those employedthereaftei in the, establishment, as
4 uiliform

## Text

AGRA ELECTRIC SUPPLY CO. LTD.
v.
SRI ALLADIN & ORS.
A 11g11sr J 2, 1969
[J. M. SHELAT A!'D C. A. VAIDIALl:\GAM, JJ.]
J11du11rial E111ploy111e.111 (Stn11ding Orders) Act (20 of 1946)-Standing Ordtr.r certified under Acr-Whe1Jrer applicable to H'Orkmen employed bej('re such cer1ificatio11.
Termination of service d11ri11g probation-Real
basis
1nisconducrOrder worded as si1nple tern1i11a1ion-Power of Labour Court to go behind and asc~rtain real basis.
Prior to 1951 there were no rules or conditions of service prescribing
the age o! supc(annuation in the appellant-Company. In 1951, its Standing Ordtrs were ccrtilied under the Industrial
EmployQ!Cnt
(Standing
Orders) Act, 1946, and were brought into force. Standing Order 32 provided 5~ years as !he age of supcran1ioation. 'fhe first three respondents
were workmen employed in the Company in 1929, 1935 and 1937. Relying on Standing Order 32 the Company served notices on these 3 \\'Orkruen who had :tttained the <iges of 58. 64 and 59 on the dates of the f(.-spcctive notices, and rc-lircd them. ·1ne Labour Court, to which the dispute
arising from such rc1ircn1ent \Vas referred, held that the Standing Orders
having he.en certified long after these \\'Orkmen \Vere employed and the
condition, or their employment not having provided any age of retiretnent,
the Company could not apply Standing Order 32 to them, that the orders
of retirement on the ground or superannuation were h;1d and gave con.<>e·
quential directions.
·rhe Company appointed the 4th respnndcnt in I>ccember 1965 as a
cleaner.
The lctt~r Clf appointment staled that he v.·as to be a probationer
for 6 months v.:ith discretion to the concerned officer to c~tend the period.
The letter also stated that during the probationary period his servicf" ":as
liable to termination \Vilhout any notiee and without as..c;igning any H:aions
therefor.
His service \\'as tern1inatcd
in February
1966.
Before the
Labour Court evidence \\'ac; led on bchalr df the Management that
the
work.man's service v.•as terminated
becauc;c his v.·ork as probationer was
unsatisfactory. The L1hour Court found on the evidence heforc it that
the real reason for pas<jing: the impugned order of termination wa-; not the
alleged unsatisfnctory work but his having unauthorisedly used a motor·
cycle belonging to an engineer of the Con1pany and caused <lamag.: to it.
Jn that viev.•, the Labour Court held that
the exercise of the power to
terminate vt'as not bnnn fide and consequently set aside that order also.
Jn appeal to thi<; (',.ourl,
A
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F
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HELD: (1) (a) The Act provides that every employer o'{ an industrial e&tablishmen: must have his Standing Orders certified, that the Stand·
ing Order' should be submitted t0 the certifying
authority along
wi1h
particulars of all the W(lrkmen then employed as
also the name of 1h:-
11nion if any. to \\·hich they belong, that the certifying authority should
f!ive notice to the union, and in ilc; absence, to the workmen to make their
1 I
ohjection5 and an op1l0rtunity to the employer and the rcpre<;cntatives of
1hc workntcn for heing heard. that the authority c;hould thereafter adjudi·
<:ate upon the rairncc;s and rcasonahlencs,.; of the Standing Orders submit-
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AGRA ELECT. SUPPLY CO. v. ALLAD!N
809
ted, that the authority should certifY the-Standing Orders wjth. modilicationi or additions if any, that any person aggrieved, by such certification·
may appeal to the appellate authority, that the Standing Orders as fi.na1ly
certified come into operation on a particular day, that the ..... employer should
publish them on notice boards in such a manner that they become ,Casily
known to the workmen, and that, after the_ expiry Of 6 months• froin, the_
date on which the Standing· Orders or the last modification. came into
operation, either the employer or any of the workmen could apply for a
mOdification.
These provisions show
that once the Standing Qrders ~S,
certified come into operation, they become binding._ on the empJoyer· as
well as all the woi-kmen presently enzployed_ and those employedthereaftei in the, establishment, as
4 uiliform conditions of.._ service. If. th~ Stan~~!·
·~
in:· OrdeIS were to bind only those who are subsequently employ.ed, ,tn~· .
r«;,ult ·would be that there
would be ,different.,copditions Of employmen\ "
for different classes of workmen, depending
on whethe;r the workmen .;
we_rc employed before or cifter the certification of the standing~,Orders or·: .•
a inodifi.catiqn of" such Standing Orders, and would render ·'th~. principle ~-'r
of.i;:Ollective bargaining ineffective.
Such·-a result WoWd·renQCf the' con-<""
ditions df servlce of workmen as indefinite ,and div~rsified 'as befo!e the'"
enacJment qf the 'statute though it was to do away with iuc6: diverSity tllat
tile Act was passed. [812 D-H; 813 A-D; 814 A-El
Salem Erod~ Electficity Distribution Co. Ltd. v. Sale1n Eroae Electricity Distribution Co.
Ltd. Employees
Union; [1966] 2 ·s.C.R. 498,
followed."
Guest, Keen, Williams Pvt. Ltd. v. P. l .. Sterling, [1960] 1 S.C:R. 348,
explained.
'
(b) J'he decision of the same Labour Court in Ref. No. 91 of 1964
between the appeilant-Company and. its
workmen, wherein it was held
that the very same Standing Orders did not apply to v.·orkrnen employed
prior to their coming into force, did not prevent the Company from reagitating the same question, because; [816 F]
(i) The rule that an award binds all the workmen
employed in an
establishment and even future entrants is not based on the principle of
res judicata but is founded on the condition for raising an industrial dispu\o. [817 A-BJ
F
The NeWspapers Ltd. v . . The State Industri9l Tribunal, U,.P.
[1957]
S.C.R. 754, 761, Workinen v., Balmer Lawrie d"c Co. [1964] 5 S.C.R. 344
and Slwhdara
(Del/Ji)
Saharanpur Light Rly.
Co. Ltd. v. ShahdizraSaharanpur Railway Workers· Uniqn [1969] 1 L.L.J. 734, r~'ferred to.
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(ii) The award in Ref. 91 of 1964 was based on the .supposition that
the Guest, Keen, Williams" case. decided that Stinding Orders
were .not
binding on those who were employed prior to the certifi.Cation and their
coming into force.
But·the Salem Erode Electricity Di9trihution Co.• Ltd.
'case has explained th.it case and shown that \hat such a supposition was
not correct.
Since the verY basis of the aWard in Ref. 91 was wrong the
di!itinction made therein between tho"Se
who were previOusly appointed
ana those appointed subsequently ~ also wrong. [817 E-H]
(iii} Further, the consequence of holding that ihe Company was barred· by p(inciples analcgous to reS judicata would be tha.t thCre would be
two ~_ets of con~itions ,o'f §ervice, ~pne for those previously ·employed ahd
the other for tl!ose employed after the Standing OrdCrs \Vere certified, a
.conSequence wholly incompatible "Xilh the object and policy _of the Act.
[817 D-EJ
810
SUPREME COURT REPORTS
(1970] l SC.R.
(2). It is a wcll-sett1e<l principle of industrial adjudication that even if
an impugned order is v.·orded in the language of a simple termination of
service, industrial lribunals can look into !he facts and circumstances o'i
the case to ascertain if it was passed in colourable exercise of the power
of the n1anagcmcnt to terminate the service of an employee and find out
\4'hether it \1.:as in fact passed with a view 10 punish him.
In the present
::asc, the letter of appointment states that the workn1an was appointed as
a probationer for a period of 6 months with power to extend the period
of probation.
Standing Order 2(c) also provides that the normal period
of probation shall be 6 months with discretion to extend the period, the
maximum period of probation being 12 months. That means that at tile
end of the period of probation the Company would have to de<:ide whedler
to confirm him or terminate his service and that the probationer's service
cannot be terminated during the probation period except
for some mi5·
conduct. The statement in the letter that workman·~ service was liable
to termination even during the probationary period only meant that the
appointment "''as subject to the Maaagemcnt's power of termination
as
provided in the Standing Orders.
Such a power is provided in Standing
Order 14, but the termination of the workman
\\:as not for any of the
grounds $Ct out therein.
Therefore, the termination
during
probation
\l.'as not in conformity with the pov.:cr to terminate under the S.anding
Orders. [819 A-Fl
Further, the
0 finding of the Labour ('..curt
ic; one of fact and meant
that it rejected 1hc evidence led hy the ~lanagemcnt that the work of the
\\.'Orkman v.·as found unsatisfactory.
Since the finding is not perverse and
is based on cvider.ce, it means the tcrminalion
v.·as punitive in nature.
Such an order could be pa<;sed only after a proper inquiry.
Therefore,
order d( the I .a hour Court setting aside the tennination v.·as right. [819
G-Hj
CIVIL APPELi.ATE JURISDICTION: Civil Appeal No. 2483 of
1968.
Appeal by special leave from the Award dated July 24, 1968
of the Labour Court, Meerut in Case No. 92 of 1966.
S. V. Gupte, D. N. Mukherjee and M. L. Car, for the appellant.
Mohan Kwnaramangalam, M. K. Ramamurthi, Vineet Kumar,
Shyamala Pappu and J. Ramamurth,v, for the respondents.
The Judgment of the Court was delivered by
Shelat, J_
In this appeal, by special leave, two questions arise :
( 1) whether standing orders govern the employees appoi.nlc-0 before they are certified under the Industrial Employment (Standing
Orders) Act, 20 of 1946, and (2) whether the appellant-company
was entitled to terminate the service of a workman appointed as a
probationer before the expiry of the period of probation except Qn
the ground of misconduct.
The first question relates to 3 workmen, Alladin, Ram Prasad
and Noorul Zaman, who were employed in 1929, 1935 and 1937
respectively, long before the company's standing orders were certified and brought into force i.n 1951 and who were superannuated
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AGRA ELECT. SVPPLY co. v. ALLADIN (She/at, J.)
811
under standing order 32 of the said standing orders.
Prior to
19 51 there wen~. no rules or conditions of service prescribing the
age of superannuation.
Standing order 32 for the first time laid
down 55 years as the age of supera,nnuation.
Relying on standing
order 32 the company served on the three workmen notices dated
Decen1ber 19, 196-41 November 20, 1963 and January 27, 1964,
who had by the)l attained the age of 58, 64 and 59 years, by
which the company retired them with effect from Ja_nuary 1, 1965,
December 29, 19Ji3 and March 1, 1964 respectively. The Labqur
Court, to which the <lispute arising from the compulsory retirement
was referred, held th;it the company's standi,ng orders having been
certified long after -these workmen were employed and the conditions of their employment not having provided any age of retirement, the company could not apply standing order 32 to them,
and therefore, the orders of supera.ninuation were bad, and directed
their reinstatement.and payment to them of their wages from the
date of retirement till the date when they would be reinstated.
Thus, the question involved in this appeal is whether the company could retire by applying standing order 32 these three workmen, who admittedly had long passed the age of superannuation
provided thereunder.
Counsel for the company argued that once
the standing orders are certified and come into operation, they
would, subject to their modification as provided under the Act,
bind all workmen, jrrespective of whether they were employed
before or after they came into force, and that therefore, the Labour
Court was in error• in holding to the contrary and ordering their
reinstatement.
Mr. Kumaramangalam, on the other hand, argued
( 1) that the company's action amounted to applying standing order
32 retrospectivdy, that that was not warranted, for, if the standing
orders were intend~d to be so applied, they would have so expressly
provided, a.ild (2) that in a previous reference, being Ref: 91 of
1964, between the appellant-company and its workmen, this very
Labour Court had, decided that these standing orders did not apply
to workmen previously employed, that an appeal was sought to be
filed in this · Coutt against that order but no special leave was
granted, and therefore, that order became final.
Consequently,
the company was not entitled to reagitate the same question, as it
was precluded from doing so by principles analogous to the
principle of res fudicata.
The question as to whether standing orders were retrospective
in their application can obviously arise only if they do not in Jaw
bind workmen_ previously employed.
Such a question can hardly
arise if the provisions of the Act show, as contended by counsel
for the compa.tt)';that once they are certified and come into force,
they bind both the employer and all the workmen presently
employed.
8!2
SUPREME COURT REPORTS
[1970] l S.C. R
As observed in Shahdara (Delhi)-Saharanpur Light Railway
Company Ltd. v. Shahdara-Saharanpur Railway Workers' Union(')
the Act is a beneficient piece of legislation, its object being to
require, as its preamble and its long title lay down, employers ii!l
industrial establishments to define with sufficient precision the
conditions of employment of workmen employed under them and
to make them known to such workmen. Before the passing of the
Act, there was nothing in law to prevent an employer having
different contracts of employment with workmen employed by him
with different and varying conditioins of service.
Such a state of
affairs led to confusion and made possible discriminatory treatment
between employees and employees though all of them were
appointed in the same premises and for the same or similar work.
Such a position is clearly incompatible with the principles of collective 'bargaining and renders their effectiveness difficult, il not
impossible.
To do away with such diversity and bargaining with
each individual workman, the legislature provided by s. 3 of the
Act that every employer of an industrial establishment must, withm
6 months from the date of the Act becoming applicable to his
industrial establishment, submit to the certifying authority under
tb.e Act draft standing orders prepared by him for adoption in his
industrial establishment providing therein for all matters set out in
the Schedule to the Act, and where model standing orders are
prescribed to have such draft standing orders in conformity with
them.
The draft standing orders are to be accompanied by particulars o.f workmen employed in the establishment as also the name
of the union, if any, to which they belong.
This
requirement
clearly means particulars of the workmen in employment at the
date of the submission of the draft standing orders for certification
and not those only who would be employed in future after certification.
Under s. 4, such draft orders are certifiable if they provide
for all matters set out in the Schedule, are otherwise in conformity
with the Act and are adjudicated as fair and reasonable by the
certifying officer or the appellate authority.
Section 5 requires
the certifying officer to forward a copy of the draft standing orders
to the union or in its absence to workmen in the prescribed malliller
with a notice requiring objection, if any from the workmen. After
giving the employer and the union or th~ workmen's representatives
an opportunity of being heard, the certifying officer has to decide
whether or not any modification or addition to the draft submitted
by the employer is necessary and then certify the draft standing
orders and send copies thereof and of his order in that behaLf to
the employer, the union or the representatives of the workmen.
Section 6 confers the right of appeal to any person aggrieved by
such order to the appellate authority, who, by his order, can either
confirm or amend the standing orders.
Under s. 7, such standing
(I) [1969] I L.L.J. 734.
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AGRA ELECT. SUPPLY co. v. ALLADIN (She/at, !J
813
A
orders are to come into operation on the expiry of 30 days from
~ .tl\e date on which their authenticated copies are sent by the
certifying officer to the parties where no appeal against these orders
is filed or where such appeal is filed on expiry of 7 days from the
date on which copies of the appellate authority's order are sent as
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required by s. T5 (2).
Section 9 req]lires the employer to post the
standing orders as finally certified 0n-troards maintained for that
purpose at or near the entrance through which the majority of
workmen e,nter the industrial establishment and in all departments
thereof.
Section 10 confers the right to an employer or any of the
workm\'n to apply for modification after expiry of 6 months from
the date on which they ot the last modificatiQi!; theteo,f came into
operation.
The Schedule \O' the Act sets out matters which the
standing orders must provide for.
These m~tters are classification
of workmen, shiit working, periods aind ·hours of work, holidays,
pay days, wage rates, conditions and proc.edure Jot. applying .for
grant of leave, closing aniLreopening of sections of the"i!Jdusfyial
establishment, temporary .stoppage of. Wbrk, Jiabilities:and rights of
the employer and the ·wprknlen arisi;ng ·therefrom,. termination of
employment, disciplinary action,. penalties et«.
Tlie obligation imposed on the employer 't.o haye, standing
orders .. certified,. the duty of :the certifying. autlfodfy tt>. a.dju\licate
up?n their ~ai:ness and ,reason.abJe;ness, ,the: notice- tff l;>e ~\'en to the
umon and m its absence tc5 the representatives of tl!e:workmen, .the·
right conferred on them to raise~objections, t!)e cipportnnjty give,n
to them of being heard before they are certified, :the·right of appeal
and the right to apply for modifiC;ttions, given .to w9rkmen individually, the. obligation on the eniplbyer to have them published in
such a manner that they become.easily known to the workm"'ll, all
these provisions .abundantly show that·once the.standing orders are-'
certified and come into operation, they become bincling :On the
employer and all the workmein presently employed as also :those· ..
eniployed thereafter in 'the establishment conducted by that. employer.
I\ cannot p0ssibly be that sttcli standing orders would
bind· only those who' are empluyed.after they. come into force and
n'ot those who were employed pr,eviously but are still in employment when they come into force. · The right of bei;ng heard. give.n.
to the union or, where thete is no union, to the representl\tives of
the workmen, the right Of appeal and the right to apply for modification given to workmen individually clearly indicate that they
were provided for because the standi1ng'orders. '1s they emerge after
certification. are intended to .be bindinir on all workmen in the
employment of the establishmenJ at the date when they come into
force and those employed thereaft.er.
Surely, the union or, in its
absence,. the representatives of workmen, who are given the right
to raise objections either to the draft standing order~ proposed by'
the employet or to the fairness and reasonableness of their ~rovi-
814
SUPREME COURT REPORTS
( 1970) I S.C.R.
sions, could not have been intended to speak for workmen to be
employed thereafter and not those whom they presently represent.
Besides, if the sta.nding orders were to bind only those who arc
subsequently employed, the result would be that there would be
different conditions of employment for different classes of workmen, one set of conditions for those who are previously employed
and another for those employed subsequently, and where they arc
modified, even several sets of conditions of service depending upon
whether a workman was employed before the standing orders are
certified or after, whether he was employed before or af1er a modification is made to any one of them and would bind only a few
who arc recruited after and not the bulk of them, who though in
employment were recruited previously.
Such a result could never
have been intended by the legislature, for, that would render the
conditions of service of workmen as indclinu~ and di\crnncd, as
'•before the enactment of the Act. Why docs s. 3(3) of the Act
require the employer to ~ive particulars of the workmen employed
by him at the date of his submission of the draft standing orders
unless the object of making him furnish the particulars wa~ to
have uniformity of conditians of service and to make the standing
orders binding on all those ipresently employed. That is why the
Act also insists among other things that after thcv arc certified they
must be made known to all workmen by posting them at or near
the entrance through which they pass and i.n the language known
to the majority of them.
In Guest, Keen, Williams- Pvt. Ltd. v. P. J. Sterling(') a view
apparently contrary to the o·ne above stated was said to have been
taken since it was held there that it was unfair in that particular
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case to fix the age of superannuation of previous employees by a
subsequent standing order, which should apply in that matter to
future entrants.
In that view the Court fixed 60 years as the .age
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of retirement for such previous employees although the standing
order had provided 55 years as the age of superannuation.
In
Salem Erode Electricity Distribution Company [.td.
v.
Salem
Erode ,£/ectricity Distrib111ion Co. Ud. Employees Union(') this
Court, however, took the: same view which we have stated above
and held that the provisi<fns of the Act clearly indicated that
matters specified in the S~hedulc to the Act should be covered by
G
uniform standing order< applicable to all workmen employed in an
industrial establishment and not merely to entrants employed after
their certification. The question arose out of an applicalic>n mad~
by the employer for modification o: the existing standing orders by
providing different rules relating to holidays and leave for employees appointed before a certain date and those appointed after that
H
date.
Negativing such a modification. the Court, after examining
(I) (1960) I S.CR. 348.
(2) (1966) 2 SC.R. 49R.
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AGRA ELECT. SUPPLY co. v. ALLADIN (She/at, !.)
815
A . the relevant provisions of the Act, stated at page~ 504 and 505 as
foU'ows:
"One has• merely to examine these clauses one by one
to be satisfied that there is no scope for having two
separate Stao,ding Orders in respect to any one of them.
Take the case of classification of workmen. It is inconB
ceivable that there can be two separate Standing Orders
in· respect of this matter.
What we have said about
classification is equally true about each one of the other
said clauses; and so, the conclusion appears to be irresistible that the object of the Act is to certify Standing
Orders in respect of the matters covered by the Schee
dule; and having regard to these matters, Standing
Orders so certified would be uniform ajJld woul<! apply to
all workmen alike who are employed in any industrial
establishment.
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On principle, it seems expedient and desirable that
matters specified in the Schedule to the Act should be
covered by uniform Standing Orders applicable to all
workmen employed in an industrial establishment. It
is not difficult to iinagine how the application of two
sets of Stan<ling Orders in respect of the said matters is
bound to lea~ to confusion in the working of the estabiishment and cause dissatisfaction amQllgst the employees. If Mr. Setalvad is right in contending that the
Standing Orders in relation to these matters can be
changed from time to time, it may lead to the anomalous
result that in course of 10 or 15 years there may come
into existence 3 or 4 different sets of Standing Orders
applicablti to the employees in the same industrial establishment/the application of the Standing Orders depending upon the date of employment of the respective emplpyees.
T4at, we think, is not intended by the provisions
of the Act."
At page 509 to sio the Court referred to the case of Guest, Keen.
Williams Private Ltd.('), relied on by the employers' counsel, and
explained why l:he Court had fixed 60 years as the age of superannuation for the employees appointed before the standing orders
were certified aJthough the standing orders had fixed 55 years as
the age of superatumation stating that :
"that course was adopted under the special and unusual circumstances expressly stated in the course of the
judgment."
(I) [1960] 1 S.C.R. 348.
LlSSupCJ/69-8
816
SUPREME COURT REPORTS
[1970] l S.C.R.
This decision thus confirms the view taken by us that the object of
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the Act is to have uniform standing orders providing for the matters
enumerated in the Schedule to the Act, that it was not intended
that there should be different conditions of service for those who
are employed before and those employed after the standing orders
come into force, and finally, that once the standing orders come
into force, they bind all those presently in the employment of the
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concerned establishm®t as well those who are appointed thereafter.
Counsel for the work.men, however, drew our attention to the
award in Ref. 91 of 1964 under s. 4{k) of the U.P. Industrial
Disputes Act, 194 7.
That reference, no doubt, was between the
appellant-company and its workmen and the yucstion decided there
was whether the company was right in compulsorily retirinJl the six
. workmen there concerned under these very standing orders although
they were employed before they were certified and came into force.
The Labour Court, relying on Workmen of Kettlewell Bullen &
Co. Ltd. v. Ket1lewell Bullen & Co. Ltd.(') which in tum had
relied on Guest, Keen, Williams' case('), held that Stwling Order
.32 of these Standing Orders could not be applied to those previously appointed and that, therefore. the company's action in
retiring those workmen was not justified.
We may mention that the case of Kettlewell Bullen & Co.(')
was not one concerned with Standing Orders but with rules made
by the company and this Court, relying on the decision in Guest,
Keen, Williams Private Ltd.(') held that where the rules of retirement are framed by the company they would have no application
to its prior employees unless such employees have accepted the
new rules. It is clear that neither the case of Kettlewell Bullen &
Co. (1 ) nor the case of Guest, Keen, Williams Private Ltd.(') in
the light of the explanation given in the case of Salem Erode Electricity Distribution Co. Ltd. (8), was applicable and the Labour
Court was, therefore, clearly in error in basing it~ award on the
decision in the case of Kettlewell Bullen & Co.(').
The argument, however, was that even if that award was erronoous, the company did not appeal against it. consequently it became final and the issue there decided being the same and between
the same parties, principles analogous to the principle of res
judicata would apply and therefore no relief should be granted in
the present case to the company. It is true, as stated in The
Newspapers Ltd. v. The State Industrial Tribunal, U.P. (') that an
award binds not only the individuals present or represented but all
workmen employed in the establishment and even future entrants.
But that principle is founded on the essential condition for the
(I) (1964J 2 L.L.J. 146.
(3) tt966J 2 S.C.R. 98.
(2) (1960J I S.C.R. 348.
(4) (19S7] S.C.R. 7S4, 761.
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AGRA ELECTI SUPPLY' co. v. ALLADIN (She/at, !.)
817
raising of an indu$trial dispute itself. If an industrial dispute can
be raised only by a group of workmen acting on their own or
through their union, ,the conclusion must be that all those who
sponsor~ the dispute are concerned in it and therefore bound by
the decision on such dispute.
(see M/ s. New India Motors (P)
Ltd. v. K. T. MQrris)(').
Such a consideration, however, is not
the same as the principle of res judicata or prin<:iples analogous
to res judicata. Jn Workmen v.
Balmer Lawrie & Co.(2 ) 'no
doubt, a ca,se of revi$ion of wage scales, this Court cautioned
against applying t~hnical considerations of res judicata thereby
hampering the discretion of industrial adjudicatirin.
(see also
Sh4hdara (Delhi)·Saharanpur Light Railway Co. Lid. v. ShahdaraSaharanpur Railway Workers' Union(•). How iJJ.expedient it is
to apply such a principle is evident from the fact that the 'award
in Ref. 91 of 1964 was based on the decision in K,ett/ewell Bullen
& ca: Ltd.(') which in tum had followed the case'of Guest, Keen.,
Williams Private Ltd.(0 ) on the supposition (which, as aforesaid,
was not correct) ' that standing orders are not binding on those
who are employed ppor to their certification and tJ:ieir coming into
force.
The compajly, presumably, did not challenge the correct·
ness of that awarpJ1ecause it was perhaps thelli thought that that
was the law laid ,down in Guest, Keen, Williams Private Ltd. (0).
The consequence.-Of holding that the company 1s barred by principles analogous to res judicata would be that there would be two
sets of conditions ohervice; one for those previously employed and
the other for those employed after the standing orders were certi·
fied, a consequea;i.teiwholly incompatible with the object and policy
of the Act.
Tile very basis of the award in Ref. 91 of 1964,
namely, the wrong understanding of the decision in Guest, Keen,
Williams Private Ltd.("), having goine, it becomes all the more
difficult and undesirable to perpetuate the distinction made therein
between those who were previously appointed and those appointed
subsequently and t(); refuse on such an untenable distinction relief
to the company. The award in Re.f. 91 of 1964 was made on
Ma'y 24, 1965. when it was believed that the decision in Guest,
Keen, Williams Ca. Ltd, (0) laid down the principle that standing
orders would not bl!!d workmen previously employed.
That that
was' not so was tlalified in the case of Salem Erode Electricity Distribution Co. Lrl:l.(8), the decision in which was pronounced on
November 3, 1965 removing thereby any possible misapprehen·
sion. The present reference was made 011 June 23, 1966, long
aftevthe decision in Salem Erode Electricity Pistribution Co,
Ltd.(") ,and the !.11.bour Court gave the award Impugned in this
appeal on July ,24.: 1968. Thus, both the Reference and the
award were'c. ma~ in circumstances diflerent from those which
(!) [1960]·S.C.R.
p, 357.
(3) [1969] I L,t,J; . 4.
(5) [1960] I S.C.R. 348.
!':.,
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(2) [1964] 5 S.~.R. 344.
(4) [1964] 2 L;L.J. 146.
(6) (1966] 2 s:c.R. 498.
818
SUPREME Co"URT REPORTS
[1970] l S.C.R.
prevailed when Ref. 91 of 1964 was made and disposed of, a
factor making it doubtful the application "' ,, principle such as
res ;udicata.
The second question relates ro the workman, Shameem Khan.
The company appointed him under a letter of appoinrment dated
December 2, 1965 to the post of a cleaner as a probationer for 6
month; with discretion to the resident engineer to extend that
period.
The letter also stated that during his probationary period
his service would be liable to termination without any .notice and
without assigning any reason therefor and that he would not be
deemed to have been confirmed automatically in the post on the
expiry of the probation period unless so advised in writing.
The
workman worked as such probationer till February 28, 1966 when
he was served with a memorandum that his service was terminated
as from the close of that day.
The workman's case was that the company had no right to terminate his service before the expiry of the 6 months period of
probation which is the period prescribed by standing order 2(c),
that the stipulation in the letter of appointment that his service
was liable to termination during the probation period was contrary
to that standing orJer, and that therefore, that stipulation was not
valid, and lastly, that the said order, though apparently one of termination simpliciter, was not a bona fidt! order, was in truth punitive in nature, and therefore, could not be passed without an opportunity of being heard having been given to him in a properly held
enquiry.
The fact is that no such enquiry was he!<.. and no opportunity was given to the workman t<) ~xplain any misconduct for
which he could be removed or dismissed.
The evidence before the Labour Court was that the concerned
workman had unauthorisedly used the motor-cycle belonging to
one Sidhana, a shift engineer in the company and that that motorcycle met with an acci<lent while the workman was using it causing
damage to it.
Three days after that accident a report alleging
that his work as a probationer was unsatisfactory was made by his
superior officer.
On this evidence the Tribunal came to the conclusion that the impugned order was not an order of termination
simpliciter, that though couched in that language it was passed as
a punishment or the workman having used that vehicle without
the consent of its owner and was, therefore, an order of dismissal.
The Tribunal was also of the opinion that the said report alleging
unsatisfactory work by the workman was co!ourable and made at
the instance of the shift engineer or at any rate was inspired by the
said incident.
In this view the Labour Court held that the exercise of power to terminate the service of the workman was not
bona fide and conscquenty it set aside that order and directed his
reinstatement.
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AGRA ELECT. SUPPLY co. v .. . IU.LADIN (She/at, J.)
819
Now, it is a well settled principle of industrial adjudication
that even if an impugned order is worded in the language of a
simple termination of service; industria.l tribunals can look into the
facts and circumstances of the case to ascertain if if was passed in
colourable exercise of the power of the manageme;nt to terminate
the service of an employee and find out whether it was in fact
passed with a view to punish him.
The letter of appointment
clearly states that the workman, Shameem Khan, was appointed as
a probationer for a 17eri<?d of 6 months with power to the resident
engineer to extend the period of probation.
Ordinarily, that would
mean that at the end of the probation period the company would
have to decide whether to confirm him to a permanent post or, if
that is not possible, to terminate his service.
Standing order 2(c)
provides that a probationer i~ ·an employee who is provisionally
employed to fill a permanent vacancy in a post and who has not
completed the period of probation thereunder.
It also lays down
that the normal period of probation shall ~e 6 months but the
resident engineer has the discretion to extend that period, the
maximum period of probation being 12 months in all.
Ordinarily,
this would mean. that a probationer's service cannot be terminated
except for some misconduct until the expiry of the probation
period.
The letter of appointment, no doubt, contained a provision that the service ·of the worlanan was liable to termination
even during the probationary period.
That provision, however,
must be read to meainl that the appointment was subject to the
management's power of termination a> provided in the standing
orders.
Standing order 14 provides for such a power and lays
down that the service of "any employee" (which expression includes
a probationer as is clear from the classification of employees in
stalllding order 2) can be tenninated on grounds (a) to (f) therein
set cut. It is quite clear that the termination of service of .the
concerned workman cannot be attributed to •ny one of these
grounds.
Therefore, that order cannot be s? · ', to have been passed
in conformity with the power to terminate nis service under the
stalllding orders.
But apart from this consideration, the Labour Court came to
a finding on the evidence before it that the real reason for passing
the impugned order was not the alleged unsatisfactory work on the
part of the workr!lan but his having unauthorisedly used the motorcycle and cansinJ! damage to it, that the order was punitive and
not a simple tenrunation of service and was therefore in colourable
exercise of the power of tennination.
This finding is clearly one
of fact and meant that the Labour Court rejected the evidence
led by the management that the work of the cOil'cerned workman
was found unsatisfactory. It is impossible to say from the evidence before the Labo1J'r Court that that finding was perverse or
such as could not be reasonably arrived at.
In that view, it is
820
SUPREME COURT REPORTS
[1970] 1 s.c. t
impossible to interfere with the order of the Labour Court relating
to workman, Shameem Khan.
In the result, the appeal is partly allowed. The order of the
Labour Court in connection with the 3 workmen whom the company retired, Is set aside but its order relating to workman,
Shameem Khan, is confinned. In accordance with the 0rder,
passed by this Court on January 24, 1969, while granting stay to
the appellant-company, the company will pay to the workman,
Shamccm Khan, interest at 6% per annum on the amount of the
arrears of wages still due to him under the order of the Labour
Court.
As the appeal is partly allowed and partly dismissed, there
will be no order as to costs.
V.P.S.
Appeal partl,v a/lowed.
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