# November II v. BASTI SUGAR MILLS CO., LTD

- **Citation:** [1961] 2 S.C.R. 330
- **Court:** Supreme Court of India
- **Decided:** 1961
- **Case number:** Civil Appeal No. 790 of 1957
- **Bench:** P. B. Gajendragadkar, A. K. Sarkar, IC SuBBA RAO, K. N. Wanchoo, J. R. Mudholkar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/november-ii-v-basti-sugar-mills-co-ltd-2231
- **Pages:** 14

## Headnote

Indt<striaJ Dispt<te-Bonus-Statute empowering Government
to direct payment of bonus by notification-Validity of-Whether
retrospective-United Provinces Indt<striaJ Disputes Act, I947•
(U. P. z8 of I947), s. 3(b) and (d)-Constitt<tion of India, Art.
I9(I)(j).
The Government of U. P. appointed a Court of enquiry
under ss. 6 and 10 of the United Provirlces Industrial Disputes
Act, 1947, and referred to it the present dispute. The Court of
enquiry submitted its report to the Government, whereupon the
Government issued a notification in July, 1950, directing the
various sugar factories to pay bonus to their workmen for the
years 1948-49 as well as to pay certain amounts as bonus for the
years 1947-48.
•
The respondents obtained writ of prohibition from the High
2 S.C.R. SUPREME COURT REPORTS
331
Court against the Government, prohibiting it from enforcing the
I960
notification. The State Government came up in appeal, urging
that the provisions of cl. (b) of s. 3 of the United Provinces
State of Uttar
Industrial Disputes Act, 1947, were wide enough to permit it to Pradesh & Others
issue such a direction to the employer because by doing so the
v.
State Government would be imposing a condition of employment Basti Sugar Mills
in future.
Co , Ltd.
The respondents, inter alia, contended that (r) clause (b) of
~· 3 of the Act does not operate retrospectively ; (2) bonus could
only be a term of employment by agreement and could not be
imj,losed by itatute; (3) where there was an ind~strial dispute
cll{d) and not cl. (b) of s. 3 of the Act would apply and (4) if cl. (b)
was applicable it was ultra vires being discriminatory and violative of Art. 14 of the Constitution and also violative of Art. 19(1)
of the Constitution as it-confers arbitrary powers on the State
Government.
Held, that (i) though cl. (b) of s. 3 of the United Provinces
Industrial Disputes Act, 1947, could not be given a retrospective
effect, yet there was nothing therein which prohibited the State
Government from giving a direction with regard to the payment
of bonus and by giving such a direction the State Government
was not giving retrospective effect to the provisions of that
clause nor did it add a new term or a condition for a period
which was over, it merely required the employer to pay an additional sum of money to their employees as a term and condition
of employment in future;
(ii) though normally wage is a term of contract it can be
made a condition of employment by statute, and it was open to
the State Government under ch (b) of s. 3 to make the payment
of bomu; to workmen a condition of their employment in
future;
(iii) where the employees bargained in their collective
capacity, the fact that the personnel of the factory when the
order for the pa~·ment of bonus was made by the Government
and in the year to which dispute related were not the same, did
not affect the power of the Gov.ernment as the order would
apply only to those employees who had worked during the
period in question and not to new employees ;
(iv) the normal way of dealing with an industrial dispute
would be to have it dealt with judicially and not by resort to
executive action, but cl. (b) of s. 3 empowers the Government to
act promptly in case of an emergency. and £:rms it with additional powers to deal with such an emergency in the public
interest;
(v) when the Government had made an executive order
under cl. (b) of s. 3 on the ground that it was in the public
interest to do so it was open to the aggrieved party to move the
Government to refer the industrial dispute for conciliation or
adjudication uader cl. (b) of s. 3 of the Act.
332
SlJPREME COURT REPORTS
[1961]
r960
(vi) the provisions of cl. (b) of s. 3 are not in any sense
alternative to those of cl. (d) and the former could be availecfof
State of U ttar by the State Government only in an emergency and as a temPradesh & Oth""porary measure. The right of the employer or the employee to
v.
require the dispute to be referred for conciliation

## Text

330
SUPREME COURT REPORTS
(1961)
i96u
law validly made and applicable to a case pending in
Tl
C-. .
appeal must be considered and given effect to by the
ie
01n1niss1oner A
II
C
Th
I .
.
of Income-tax
ppe ate ourt.
e cone us10n we have reached IS
Hyderabad ' that the notification of 1956 was validly made and
v.
applies to the present case. In view of this conclusion
Dtwan Bahadur we have considered it unnecessary to examine the
Ramgopat Mi.'; notification of 1953 or the reasons for which the High
Ltd.
Court held that notification to be bad.
s. 1c Da' 1.
For the reasons given above, we allow this appeal
and set aside the judgment and order of the High
Court dated February 16, 1954. The question referred
to the High Court is answered in favour of the appellant. The appellant has succeeded by reason of the
notification of 1956 and taking that circumstance into
consideration, we direct that there will be no order for
costs for the hearing in this Court.
Appeal allowed.
zv6o
STATE OF UTTAR PRADESH AND OTHERS
November II.
V.
BASTI SUGAR MILLS CO., LTD.
(P. B. GAJENDRAGADKAR, A. K. SARKAR,
IC SuBBA RAO, K. N. WANCHOO and
J. R. MUDHOLKAR, JJ.}
Indt<striaJ Dispt<te-Bonus-Statute empowering Government
to direct payment of bonus by notification-Validity of-Whether
retrospective-United Provinces Indt<striaJ Disputes Act, I947•
(U. P. z8 of I947), s. 3(b) and (d)-Constitt<tion of India, Art.
I9(I)(j).
The Government of U. P. appointed a Court of enquiry
under ss. 6 and 10 of the United Provirlces Industrial Disputes
Act, 1947, and referred to it the present dispute. The Court of
enquiry submitted its report to the Government, whereupon the
Government issued a notification in July, 1950, directing the
various sugar factories to pay bonus to their workmen for the
years 1948-49 as well as to pay certain amounts as bonus for the
years 1947-48.
•
The respondents obtained writ of prohibition from the High
2 S.C.R. SUPREME COURT REPORTS
331
Court against the Government, prohibiting it from enforcing the
I960
notification. The State Government came up in appeal, urging
that the provisions of cl. (b) of s. 3 of the United Provinces
State of Uttar
Industrial Disputes Act, 1947, were wide enough to permit it to Pradesh & Others
issue such a direction to the employer because by doing so the
v.
State Government would be imposing a condition of employment Basti Sugar Mills
in future.
Co , Ltd.
The respondents, inter alia, contended that (r) clause (b) of
~· 3 of the Act does not operate retrospectively ; (2) bonus could
only be a term of employment by agreement and could not be
imj,losed by itatute; (3) where there was an ind~strial dispute
cll{d) and not cl. (b) of s. 3 of the Act would apply and (4) if cl. (b)
was applicable it was ultra vires being discriminatory and violative of Art. 14 of the Constitution and also violative of Art. 19(1)
of the Constitution as it-confers arbitrary powers on the State
Government.
Held, that (i) though cl. (b) of s. 3 of the United Provinces
Industrial Disputes Act, 1947, could not be given a retrospective
effect, yet there was nothing therein which prohibited the State
Government from giving a direction with regard to the payment
of bonus and by giving such a direction the State Government
was not giving retrospective effect to the provisions of that
clause nor did it add a new term or a condition for a period
which was over, it merely required the employer to pay an additional sum of money to their employees as a term and condition
of employment in future;
(ii) though normally wage is a term of contract it can be
made a condition of employment by statute, and it was open to
the State Government under ch (b) of s. 3 to make the payment
of bomu; to workmen a condition of their employment in
future;
(iii) where the employees bargained in their collective
capacity, the fact that the personnel of the factory when the
order for the pa~·ment of bonus was made by the Government
and in the year to which dispute related were not the same, did
not affect the power of the Gov.ernment as the order would
apply only to those employees who had worked during the
period in question and not to new employees ;
(iv) the normal way of dealing with an industrial dispute
would be to have it dealt with judicially and not by resort to
executive action, but cl. (b) of s. 3 empowers the Government to
act promptly in case of an emergency. and £:rms it with additional powers to deal with such an emergency in the public
interest;
(v) when the Government had made an executive order
under cl. (b) of s. 3 on the ground that it was in the public
interest to do so it was open to the aggrieved party to move the
Government to refer the industrial dispute for conciliation or
adjudication uader cl. (b) of s. 3 of the Act.
332
SlJPREME COURT REPORTS
[1961]
r960
(vi) the provisions of cl. (b) of s. 3 are not in any sense
alternative to those of cl. (d) and the former could be availecfof
State of U ttar by the State Government only in an emergency and as a temPradesh & Oth""porary measure. The right of the employer or the employee to
v.
require the dispute to be referred for conciliation or adjudicaBasti Sugar Mills ti on would still be there and could be exercised by them by
Co., Ltd.
taking appropriate steps;
(vii) clause (b) of s. 3 of the Act is not violative of the
provisions of Art. rg(r)(g) of the Constitution as it permits
action to be taken thereunder by the Government only in an
emergency and in the public interest. The restriction placed
upon the employer is only a temporary one and having been
placed in the public interest falls under cl. (6) of Art. rg of the
Constitution.
Ram Nath Koeri and Anr. v. Lakshmi Devi Sugar Mills and
Ors., (r956) II L.L.J. II, approved.
L. D. Mills v. U. P. Government, A.LR. r954 All. 705, overruled.
CIVIL APPELLATE JURISDICTION:
Civil Appeal
No. 790 of 1957.
Appeal from the judgment and decree dated ]'ebru.
ary 10, 1954, of the Allahabad High Court in Civil
Misc. Writ No. 280 of 1950.
0. B. Aggarwala, G. O. Mathur and O. P. Lal, for
the appellants.
G. S. Pathak and D. N. Mukherjee, for the respondent No. I.
1960. November II. The Judgment of the Court
was delivered by
Mudholkar J.
MUDHOLKAR J.-This is an appeal by the State of
Uttar Pradesh against the decision of the Full Bench
of the Allahabad High Court in a writ petition. In
the writ petition the respondents challenged certain
orders made by the Government of Uttar Pradesh
under s. 3, cl. (b) of the United Provinces Industrial
Disputes Act, 1947, (XXVIII of 1947) requiring the
respondents to pay bonus at certain rates for the years
1947-48 and 1948-49 to their workers and also payment of retaining allowances to the skilled seasowL!
workmen and clerical staff. The circumstances under
which the orders were made are briefly these :
,
.,
•
2 S.C.R. SUPREME COURT REPORTS
333
The Indian National Sugar Mills \Yorkers' Federai96o
tion, Lucknow, served notices on various sugar factost t. 1 Utt
ries in Uttar Pradesh on December 15, 1949, in which p,.;,:h•.,. at~:,,
they made six demands. \Ve need, however, mention
v.
only one of them as that alone is in controversy in Bast; Sugar Mills
this appeal. . That demand ,related to the bonus for
Co., Ltd,
the year 1948-49 and to the restoration of the reduc-
-
.
Jlfudkolkar ].
tion which had been made in the previous year's
bonus. By that notice the Federation threatened a
strike in the industry with effect from January 16,
1960, if the demands were not met by the sugar
factories. Since this situation brought into existence
an industrial dispute, the Government of Uttar
Pradesh, in exercise of the power conferred by ss. 6
and 10 of the Industrial Disputes Act, 1947, (XIV of.
l!J47) appointed a Court of Inquiry and referred the
dispute to it. The notification also stated the points
which were referred to tbe Court of Inquiry. That
notification was twice amended but nothing turns on
those amendments. · A full enquiry was held by the
Court of Inquiry at which the representatives of both
the employers as well as the employees were represented and material was placed before the Court of Inquiry
by both the sides. The Court of Inquiry submitted its
report to the Government on April 15, 1950. On
receipt of this report the Government ofUttar Pradesh
published the report in the Uttar Pradesh gazette on
J\Iay 8, 1950, as provided for in s. 17 of the Industrial
Disputes Act, 1947. On July 5, 1950, the Government
of Uttar Pradesh, in exercise of the powers conferred
by s. 3(b} of the Uttar Pradesh Industrial Disputes
Act, 1947, issued a. notification directing the various
sugar factories to pay bonus to their workmen for the
year 1948-49 as well as to pay certain amounts as
bonus for the year 194 7-48. A further direction was
made in the notification for payment of retaining
allowance to the skilled seasonal workmen and clerical
staff with effect from the off season in the year 1950.
Thereupon the Indian Sugar Millers Association,
which is an Association of sugar factories in India. and
is registered under the Trade Union Act made a
petition before the High Court at Allahabad under
' .
334
SUPREME COURT REPORTS
[1961]
'960
Art. 226 of the Constitution for the issue of a writ
State -;,j Uttar against the Government of Uttar Pradesh prohibiting
Pradesh .;;, Othm the Government from enforcing the notification. The
v.
writ petition was dismissed by the High Court on
Basti Sugar Mills September 14, 1950, on the ground that the AssociaCo .. Ltd.
tion had no legal interest in the matter. Thereupon
Mudholkar J. various sugar mills preferred separate writ petitions
before the High Court, the respondents before us being
one of them. As many as fourteen grounds were
taken on their behalf in their writ petition. We are,
however, concerned with only three of them to which
Mr. G. S. Pathak, who appears for the respondents
confined his arguments. Before we refer to those
grounds we would complete the narration of facts.
The High Court of Allahabad allowed the writ petitions, in so far as the question of payment of bonus
was concerned, though Sapru, J., one of the judges
constituting the Full Bench, expressed a doubt as to
the correctness of the view that the order of the State
Government as regards the payment of bonus was
invalid. After the decision of the High Court, the
State of Uttar Pradesh applied for a certificate under
Art. I33(l)(b) and Art. l33(l)(c) of the Constitution.
The High Court having granted the certificatr, the
present appeal has been brought to this Court.
In order to appreciate the points raised by Mr .. G. S.
Pathak, it is necessary to set out the provisions of s. 3
of the Uttar Pradesh Industrial Disputes Act, 1947.
They are as follows :
" If, in the opinion of the State Government, it is
necessary or expedient so to do for securing the public
safety or convenience, or the maintenance of public
order or supplies and services essential to the life of
the community, or for maintaining employment, it
may, by general or special order, make provision-
(a) for prohibiting, subject to the provisions of
the order, strikes or lock-outs generally, or a strike or
lock-out in connection with any industrial dispute ;
(b) for requiring employers, workmen or both to
observe for such period, as may be specified in the
order, such terms and conditions of employment as
may be determined in accordance with the order;
'
2 S.C.R. SUPREME COURT REPORTS
335
(c) for appointing industrial courts;
I960
(cc) for appointing committees representative
State of Uttar
both of the employer and workmen for securing amity Pradesh & Others
·and good relations between the employer and workv.
men and for settling industrial disputes by conciliation; Basti Sugar Mills
for consultation and ad vice on matters relating to
co· Ltd.
production, organization, welfare and efficiency;
Mudholkar J.
{d) for referring any industrial dispute for conciliation or adjudication in the manner provided in
the order;
(e) for requiring any public utility service, or any
subsidiary undertaking not to close or remain closed
and to work or continue to work on such conditions
as may be specified in the order;
(f) for exer.cising control over any public utility
service, or any subsidiary undertaking, by autQ.orising
any person (hereinafter referred to as an authorised
controller) to exercise, with respect to such service,
undertaking or part thereof such functions of control
as may be specified in the order ; and, on the making
of such order the service, undertaking or part thereof
such functions of control as may be specified in the
order ; and, on the making of such order the service,
undertaking or part, as the case may be, shall so long
as the order continues to be carried on in accordance
with any directions given by the authorised controller
in accordance with the provisions of the order and
every person having any functions of management of
such service, undertaking or pa.rt thereof shall comply
with such directions;
(g) for any incidental or supplementary matters
which appear to the State Government necessary or
expedient for the purposes of the order: Provided
that no order ma.de under clause (b)
(i) shall require an employer to observe terms
and conditions of employment less favourable to the
workmen than those which were applicable to them
at any time within three months preceding the date
of the order;
(ii) shaU, if an industrial dispute is referred, for
adjudication under clause (d), be enforced after the
decision of the adjudicating authority is announced by, or with the consent of, the State Government."
336
SUPREME COURT REPORTS
[1961]
I96o
The view taken by the High Court was that clause
St 1
/ u
(b) of s. 3 of the Uttar Pradesh Industrial Disputes
p,0;,;h
0
.,,, ~:~:,,Act, 1947, is prospective in operation in that therev.
under it is open to the State Government to ask an
Basti Sugar Mills employer or an employee to observe a term or a conco .. Ltd.
dition of employment in future and that consequently
Mudholkar J. it is not competent thereunder to require an employer
to pay bopus to workmen in respect of a period of
employment which is already .past. The view of the
High Court was challenged before us on behalf of the
State. According to the State the provisions of the
aforesaid clause are wide enough to permit the making of such a direction to the employer because by
doing so the State· Government would only be imposing a condition of employment in future. In answer
to this contention Mr. Pathak has, as already stated,
raised three points and they are as follows :
(1) Clause (b) of s. 3 does not operate retrospectively and must be construed as having a prospective
operation only.
(2) This clause does not apply at all where an
industrial dispute has arisen and that the appropriate
provision under which the State Government can take
action where an industrial dispute has arisen is
cl. (d).
·
(3) If cl. (b) is susceptible of the interpretation
that it is applicable even when an industrial dispute
has arisen then it is ultra vi res in as much as it would
enable the State Government to discriminate between
an industry and an industry or an industrial unit and
another industrial unit or between a workman and a
workman by referring some cases for adjudication to
an industrial court under cl. (d) and passing executive
order itself in respect of others. The provisions of
cl. (b), according to him, are violative of Art. 14 of
the Constitution. Further, according to him, they are
also violative of the provisions of Art. 19(l)(g) of the
Constitution in as much as they confer an arbitrary
power on the State Government to require an employ.er to pay whatever it thinks fit to an employee and
thus place an unreasonable restriction on the rights of
the employer to carry on his business.
2 S.C.R. SUPREME COURT REPORTS
337
We entirely agree with the learned judges of the
i96o
Allahabad High Court that cl. (b) of s. 3 cannot be
.
.
ff
B
bl
State of Uttar
given a retrospective e ect.
ut we are una e to Pradesh o;, Others
agree with them that the State Government in ma,_k·
v.
ing a direction to the employers to pay bonus for the Basti St<gar Mills
years in question purported to give a retrospective
Co., Ltd.
operation to the provisions of that clause. The order
made by the State Government in regard to bonus· is
M"dholkar f.
to the effect that it shall be paid for the year 194 7 -48
to those persons who worked during that year and
for the year 1948-49 to those persons who worked in
that year. This payment was directed to be made
within six weeks of the making of the order.· By
giving this direction the State Government did no
more than attach a condition to the employment of
workmen in the year 1950-51 in sugar factories affected by the order. That is all that it has done.
Mr. Pathak contended that bonus has certain attributes of a wage and wage being a matter of contract can
only be a term of employment agreed to bet.ween the
employer and the employee but could not be a condition of employment which could be imposed by a statute or which could be imposed by a Government acting under a sta~ute. We agree that normally wage is a
term of contract but it would be futile to say that it
cannot be made a condition of employment. The
Minimum Wages Act provides for the fixation of a
statutory minimum wage payable to a worker in
respect of certain types of emplqyments and is an
instance of wage being made a condit.ion of employment. That apart, whether wage or bonus is a term
of a contract or a condition of employment it is clear
that s. 3 empowers the State Government to require
the employert> and workmen or both to observe any
term or condition of employment for a specified period.
Since the law enables the State Government to
impose a term it is apparent that the legislature which
enacted that law did not import into that word a consensual sense. \Ve cannot, therefore, accept the
argument that under cl. (b) it was not open to the
State Government to make the payment of bonus to
43
338
SUPREME COURT REPORTS
[1961]
r96o
workmen a condition of their employment in future
S.t t
,, u
and thus augment their past wages.
'·
0
'
01 "°'
M P h k h
c
d
Pradesh & Others
r. at a t en reierre
to the following observav.
tions in the judgment of Bhargava, J.
Basti Sugar Mills
"Obviously there can be no question of requiring
Co., Ltd.
any one to observe for a future period terms and conditions of employment which have already remained
Mudholkar .f. effective and have already been carried out by those
persons".
According to Mr. Pathak the effect of the order of the
Government is to add a new term or a condition with
regard to employment for a period which is already
over. We would again point ·out that this is not the
effect of the order of the Government. The effect of
that order is merely to require the employer to pay
an additional sum of money to his employees as a
term and condition of work in future. Mr. Pathak,
however, said that this would involve payment of
bonus even to new employees, that is, those who had
not participated in earning the profits in the past and
that this would be contrary to the very conception of
bonus. The answer to that is that under the order of
the Government suoh bonus is payable only to those
workers who had worked during the years in question
and not to new employees. It is further to be borne in
mind that in the dispute in question· the employees
were bargaining in their collective capacity and,
therefore, the question whether the personnel forming
the employees of the factories in July, 1950, when the
order was made by the Government, and in the years
I
1947-48 and 1948-49 to which the dispute relates was
the same is quite immaterial. As has been rightly
pointed out by Sapru, J., "The employees might well
have taken in the industrial dispute the line that the
payment of bonus in respect of the years 1947-48
and 1948-49 to the workmen employed in those
years was regarded by those who were employed in future as a preliminary and essential condition for not only the settlement of the industrial
dispute in progress but also for carrying on their
future work in sugar factories". We also concur with
the observations of the learned judge that by coming
to the conclusion that the workers' demand should be
2 S.C.R. SUPREME COURT REPORTS
339
conceded the State Government was not passing an
r96o
orde~ which will h~ve retrospective effect but was
State of Uttar
passmg an order which was to ensure that the work- Pradesh & others
men tv be employed in the year 1950 would work in
v.
a contented manner. It must not be forgot·ten that Basti Sugar Mills
the dispute was in the present, that is, it existed when
co., Ltd.
the impugned order was ma.de, though its origin was
Mudholkar J.
in the past. What the order did was to rasolve
that dispute and this it could only do by removing its
cause.
Mr. Pathak then relied upon the following observations of Bhargava, J., in L. D. Sugar Mills v. U. P.
Government (1):
·
" The expression ' to observe for such period as
may be specified, such terms and condition!'! of employment as may be determined' gives an indication that
clause (b) of s. 3 of the U. P. Industrial Disputes Act,
1947, is meant for the purpose of passing orders by
which the Government gives directions a.bout what
the terms and condi~ions of employment should be
and not how a. particular term and condition of
employment already in existence should be acted
upon."
Bhargava., J.'s decision was, however, reversed in
Ram Nath Koeri and, .Another v. Lakshmi Devi Sugar
Mills and Ors.(~) by a. division benc~ of the Allahabad
High Court in Letters Patent Appeal brought against
Bhargava., J.'s decision. We agree with the view
taken by the Appellate Bench.
~·
In our opinion, therefore, there is nothing in cl. (b)
of s. 3 of the Act which prohibited the State Government from making a direction to the sugar factories
with regard to the payment of bonus for the years
-1947-48 and 1948-49 in their order of July 7, 1950 and
that by ma.king such a direction the State Government was not giving a retrospective effect to the provisions of that clause. In this connection it is relevant
to remember that any direction as to payment of
bonus must inevitably be based on the available surplus, and such surplus can be determined only at the
end of a given year. Therefore, what the impugned
(1) A.I.R. 1954 All. 705, 714.
(2) (1956) n L. L. J. n.
340
SUPREME COURT REPORTS
[1961)
i96o
order purports to do is to require the employers to
S
.
pay specified amounts in future, though the said
tale oj Uflar
fi
b
c
fi
d •
Prnd''" & Othm amounts are
xed y re1erence to the pro ts ma e m
v.
the two preceding years. If a direction as to payment
Ba.<ti Sugar Mills of bonus can be issued under s. 3(b) it cannot, thereCo., Ltd.
fore, be said to be retrospective.
The next argument of Mr. Pathak appears, at first
M udholkar .! .
h
b
h
sig t; to e more formidable.
He points out t at undoubtedly an industrial dispute had arisen, and indeed
it is upon that basis that the State Government proceeded to appoint a Court of Inquiry. Therefore,
according to Mr. Pathak resort could be taken by the
State Government only to the special provisions of
cl. (d) and not to the more general provisions of cl. (b)
of s. 3. In other words, where there is an industrial
dispute, the appropriate thing for the Government to
do is to refer it for conciliation or adjudication under
the provisions of cl. (d) and not to deal with the
matter by an executive order as it has done in this
case. Mr. Pathak then refers to a further passage
from the judgment of Bhargava, J., just cited which
is as follows :
"It appears from the language that this provision was not meant for the purpose of dealing with
individual disputes arising out of the application of a
term or condition of employment and no power was
granted to the State Government under this provision
of law, to sit as an adjudicator to decide a dispute
that might have arisen relating to the working and
actual application of terms and conditions of employI
ment already in force.
The provision was for the
purpose of enabling the State Government to vary the
agreed terms and conditions of employment for purposes specified in s. 3 of U. P. Industrial Disputes Act,
1947, under the pressing necessities or expediency
justifying such course of action."
We entirely agree with Mr. Pathak that the normal
way of dealing with an industrial dispute under the
Act would be to have it dealt with judicially either
by conciliation or by adjudication and that judicial
process cannot be circumvented by resort to executive
action. The proceeding before a conciliator or an
2 S.O.R,. SUPREME COURT REPORTS
341
adjudicator is, in a sense, a judicial proceeding because
I960
therein both the parties to the dispute would have the
State of Uttar
opportunity of being heard and of placing the relevant Pradesh & Others
material before the conciliator or adjudicator. But
v.
there may be an emergency and the Government may Basti Sugar Mills
have to act promptly "for securing the public safety
co., Ltd.
or convenience or the maintenance of public order or
Mudholkar 1.
supplies and services essential to the life of the community or maintaining employment." It was, therefore, necessary to arm it with additional powers for
dealing with 1mch an emergency. Clause (b) of s. 3
was apparently enacted for this purpose.
An order
made thereunder would be in the nature of a temporary or interim order as would be clear from the words
"for such period as may be specified " appearing
therein and from the second proviso to s. 3. Under
this proviso where an industrial dispute is referred for
adjudication under cl. (d) an order made under cl. (l:i)
cannot be enforced after the decision of the adjudicating authority is announced by or with the consent of
the State Government. It would, therefore, follow
from this that where the Gov~rnment has made an
executive order, as it did in this case, under cl. (b) of
s. 3, it is open to the aggrieved party to move the
Government to refer the industrial dispute for conciliation or adjudication under cl. (d) of s. 3. Mr. Pathak,
however, stated that under this section, the Government has a discretion whether or not to refer a dispute
for conciliation or adjudication under cl. (d).
But in
our opinion where once the Government has acted
under cl. (b) on the ground that it was in the public
interest to do so, it would not be open to the Government to refuse to refer the dispute under cl. (d) for
conciliation or adjudica~ion. Mr. C. B. Agarwal, who
appeared for the State of Uttar Pradesh conceded,
and we think rightly, that this would be so and added
that in case the State Government was recalcitrant it
could be fprced to do its duty by the issue of a writ of
mandamus by the High Court under Art. 226 of the
Constitution.
There is a further argument of Mr. Pathak which
mll8t be noticed and that argument is that ther.e is.
342
SUPREME COURT REPORTS
[1961]
r96o
nothing in cl. (b) which limits its operation to an
S
- 1 u
emergency and that. it is, therefore, not open to us to
tale o
tlar
l
.
h
.
Pradesh & Othm p ace a construction t ereon of the kmd we are placv.
ing. The opening words of s. 3 themselves indicate
nasti Sugar lfWls that the provisions thereof are to be availed of in an
Co., Ltd.
emergency. It is true that even a reference to an
arbitrator or a conciliator could be made only if there
M"dholkar J. is an emergency. But then an emergency may be
acute. Such an emergency may necessitate the exercise of powers under cl. (b) and a mere resort to those
under cl. (d) may be inadequate to meet this situation.
Whether to resort to one provision or other must
depend upon the subjective satisfaction of the
State Government upon which powers to act under
s. 3 have been conferred by the legislature. No doubt,
this result is arrived at by placing a particular construction on the provisions of that section but we
think we are justified in doing so.
As Mr. Pathak
himself suggested in the course of his arguments, we
must try and construe a statute in such a way, where
it is possible to so construe it, as to obviate a conflict
between its various provisions and also so as to render
the statute or any of its provisions constitutional. By
limiting the operation of the provisions of cl. (b) to an
emergency we do not think that we are doing violence
to the language used by the legislature. Further,
assuming that the width of the language could not be
limited by construction it can be said that after the
coming into force of the Constitution the provisions
can, by virtue of Art. 13, have only a limited effect as
stated above and to the extent that they are inconsistent with the Constitution, they have been rendered
void.
In our view, therefore, the provisions of cl. (b) of
s. 3 are not in any sense alternative to those of cl. (d)
and that the former could be availed of by the State
Government only in an emergency and as a temporary measure. The right of the employer or the employee to require the dispute to be referred for conciliation or adjudication would still be there and
could be exercised by them by taking appropriate
steps.
Upon the construction we place on the
2 s.c.R. SUPREME COURT REPORTS
343
provisions of cl. (b) of s. 3 it is clear that no question
I96o
of discrimination at all arises. Similarly the fact that
-
t•
t k
b th G
t ·
State of Uttar
ac ion was
~ ~n y
e overnmen m an emergency Pra!Wh .s. Others
in the pubhc mterest would be a complete answer to
v.
the argument that that action is violative of the pro. Basti Sugar Mills
visions of Art. 19(l)(g). The restriction placed upon
Co., Ltd.
the employer by such an order is only a temporary
one and having been placed in the public interest Mudholkar f.
would fall under cl. (6) of Art. 19 of the Constitution.
Upon this view we hold that the High Court was in
error in issuing a writ against the State Government
quashing their order in so far as it related to pay-
' ment of bonus. The appeal is allowed and order of
the High Court is set a.side. Costs of this appeal will
be paid by the respondents.
Appeal allowed.
MANOHAR LAL
v.
THE STATE OF PUNJAB
(JAFER IMAM, J. L. KAPUR, K. c. DAS GU.PTA,
RAGHUBAR DAYAL and
N. RAJAGOPALA AYYANGAR, JJ.)
Trade Employees-Close day-Enactment, if violative of funilamental rights-Workers' Welfare-Protection-Restriction, if imreasonable-Punjab Trade Employees Act, z940, (Punj. X of z940)
s. 7 (I)
The appellant who was a shopkeeper was convicted for the
second time by the Additional District Magistrate for contravening the provisions of s. 7(1) of the Punjab Trade Employees Act,
1940, under which he was required to keep his shop closed on
the day which he had himself chosen as a "close day ''. He
raised the plea that the Act did not apply to his shop as he did
not employ any-stranger but that himself alone worked in it and
that the application of s. 7(1) to his shop would be· violative of
his fundamental rights under Arts. 14, 19(1)(f) and (g) of the
Constitution and also that the restriction imposed was not reasonable within Art. xg(6) as it was not in the interest of the general
1960
November II.