# r ENGINEERING KAMGAR UNION v. MIS. ELECTRO STEELS CASTINGS LTD. AND ANR

- **Citation:** [2004] Supp. 1 S.C.R. 301
- **Court:** Supreme Court of India
- **Decided:** 2004-04-16
- **Case number:** Civil Appeal No. 86-89 of2000
- **Bench:** Y.K. Sabharwal, S.B. Sinha
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/r-engineering-kamgar-union-v-mis-electro-steels-castings-ltd-and-anr-19931
- **Pages:** 23

## Headnote

B
Constitution of India, 1950-Article 254(2):
State Act and Central Act enacted in terms of List Ill-Inconsistency
between laws made by both the enactments-Applicability of Article 254(2)- C
Held: Article 254(2) is attracted when there exists direct conflict between two
enactments-Conflict is direct not only in case where provisions of one Act
have to be disobeyed if provisions of the other is followed and also where both
laws lead to different legal results-Furthermore, subsequent State legislation
having received President's assent would prevail over the Parliamentary Act D
and in absence, the Parliament Act would prevail-On facts, State Act and
Central Act covering same field relating to lay off. retrenchment and closure
of undertaking and there exists a conflict between them, as such there is
repugnancy-Hence, Article 254 (2) attracted-Section 6 V to 6X of State Act
would prevail over Chapter VB of Central Act-Entry 22 List-II/, Seventh
Schedule-Industrial Disputes Act, 1947-Section 25K-25S, Chapter V-B- E
U.P. Industrial Disputes Act, 1947-Section 6V-6X
Repugnancy-Determination of-With regard to the date of enactment
of legislation or date of its coming into force-State Act received assent on
10./0./983 whereas Central Act (46of1982) came into force with effect.from
21.8.1984-Held· Article 254 does not contemplate coming into effect of a F
law having regard to the nature of the legislation as a conditional oneConjlict is with regard to the law already been made-State Act which received
Presidential assent in conflict with earlier Central Act, hence State Act would
prevail over the Central Act-Industrial Disputes Act, 1947-U.P. Industrial
Disputes Act, 1947.
G
Presidential assent to State Law-Application of Article 254(2)-Held:
To arrive at finding of fact that President was actually informed about the
reason for grant of his assent-If the same is not fulfilled then such plea
should be raised in Writ Petition or Special Leave Petition and not at the
301
H
302
SUPREME COURT REPORTS [2004] SUPP. I S.C.R.
A stage of hearing for its first time as presumption exists with regard to the
validity and legality of an official Ac~-Evidence Act, 1872-Section I 14 (e)
and (j).
B
Interpretation of Statutes-Non-obstante clause-Overriding ejfectDiscussed-lndustrial Disputes Act, 1947-U.P. Industrial Disputes Act, 1947.
First respondent-industrial establishment employed more than 100
persons in its factory. It issued notice for closure of the factory and
termination of services of 99 workmen. Appellant-registered trade union
challenged the validity of the notice that as more than 300 workmen are
employed in the factory, the Industrial Disputes Act, 1947-Central Act
C would be applicable. Thereafter, Assistant Labour Commissioner issued
notice to. the respondent for prosecution for contravention of section 25 of
the Central Act. Respondent contended that as the number of employees
in the undertaking being less than 300, no permission for closure of the
undertaking was required in view of section 6-W read with section 6-V of
D the Uttar Pradesh Industrial Disputes Act, 1947-State Act. First respondent
filed writ petitions challenging the notice and appellant filed writ petition
challenging the closure notice. High Court held that the State Act would
prevail over the Central Act having regard to Article 254(2) of the
Constitution. It allowed the writ petitions filed by first respondent; however
dismissed the petition filed by appellant. Hence the present appeal.
E
Appellant-trade union contended that the rights of both the employer
and the workmen in relation to an industrial establishment having more
than one hundred workmen in respect of layoff, retrenchment and closure
would be governed by sections 2SK, 25S, 250 along with 2SJ of Chapter
V-B of the Central Act notwithstanding the State Act laying down provision
F to .the contrary; that the provisions of Chapter V-B would be applicable
to an industrial establishment employing more than one

## Text

_Characters 0–39,823 of 57,729. This is a partial read: ask again with offset=39823 for what follows._

-r
ENGINEERING KAMGAR UNION
A
v.
MIS. ELECTRO STEELS CASTINGS LTD. AND ANR.
APRIL 16, 2004
[Y.K. SABHARWAL AND S.B. SINHA, JJ.]
B
Constitution of India, 1950-Article 254(2):
State Act and Central Act enacted in terms of List Ill-Inconsistency
between laws made by both the enactments-Applicability of Article 254(2)- C
Held: Article 254(2) is attracted when there exists direct conflict between two
enactments-Conflict is direct not only in case where provisions of one Act
have to be disobeyed if provisions of the other is followed and also where both
laws lead to different legal results-Furthermore, subsequent State legislation
having received President's assent would prevail over the Parliamentary Act D
and in absence, the Parliament Act would prevail-On facts, State Act and
Central Act covering same field relating to lay off. retrenchment and closure
of undertaking and there exists a conflict between them, as such there is
repugnancy-Hence, Article 254 (2) attracted-Section 6 V to 6X of State Act
would prevail over Chapter VB of Central Act-Entry 22 List-II/, Seventh
Schedule-Industrial Disputes Act, 1947-Section 25K-25S, Chapter V-B- E
U.P. Industrial Disputes Act, 1947-Section 6V-6X
Repugnancy-Determination of-With regard to the date of enactment
of legislation or date of its coming into force-State Act received assent on
10./0./983 whereas Central Act (46of1982) came into force with effect.from
21.8.1984-Held· Article 254 does not contemplate coming into effect of a F
law having regard to the nature of the legislation as a conditional oneConjlict is with regard to the law already been made-State Act which received
Presidential assent in conflict with earlier Central Act, hence State Act would
prevail over the Central Act-Industrial Disputes Act, 1947-U.P. Industrial
Disputes Act, 1947.
G
Presidential assent to State Law-Application of Article 254(2)-Held:
To arrive at finding of fact that President was actually informed about the
reason for grant of his assent-If the same is not fulfilled then such plea
should be raised in Writ Petition or Special Leave Petition and not at the
301
H
302
SUPREME COURT REPORTS [2004] SUPP. I S.C.R.
A stage of hearing for its first time as presumption exists with regard to the
validity and legality of an official Ac~-Evidence Act, 1872-Section I 14 (e)
and (j).
B
Interpretation of Statutes-Non-obstante clause-Overriding ejfectDiscussed-lndustrial Disputes Act, 1947-U.P. Industrial Disputes Act, 1947.
First respondent-industrial establishment employed more than 100
persons in its factory. It issued notice for closure of the factory and
termination of services of 99 workmen. Appellant-registered trade union
challenged the validity of the notice that as more than 300 workmen are
employed in the factory, the Industrial Disputes Act, 1947-Central Act
C would be applicable. Thereafter, Assistant Labour Commissioner issued
notice to. the respondent for prosecution for contravention of section 25 of
the Central Act. Respondent contended that as the number of employees
in the undertaking being less than 300, no permission for closure of the
undertaking was required in view of section 6-W read with section 6-V of
D the Uttar Pradesh Industrial Disputes Act, 1947-State Act. First respondent
filed writ petitions challenging the notice and appellant filed writ petition
challenging the closure notice. High Court held that the State Act would
prevail over the Central Act having regard to Article 254(2) of the
Constitution. It allowed the writ petitions filed by first respondent; however
dismissed the petition filed by appellant. Hence the present appeal.
E
Appellant-trade union contended that the rights of both the employer
and the workmen in relation to an industrial establishment having more
than one hundred workmen in respect of layoff, retrenchment and closure
would be governed by sections 2SK, 25S, 250 along with 2SJ of Chapter
V-B of the Central Act notwithstanding the State Act laying down provision
F to .the contrary; that the provisions of Chapter V-B would be applicable
to an industrial establishment employing more than one hundred workmen
and the provisions of State Act would not apply to industrial establishment
employing less than 300 workmen, but there does not exist any
contradiction or repugnancy as it is possible to apply both the Central Act
G and the State Act by the employer upon following the procedure laid down
under the Central Act; that sections 6V to 6W of the State Act received
President's assent on 10.10.1983 and Central Act (46of1982) was brought
into force with effect from 21.8.1984 as such when Presidential assent was
obtained for the State Act in 1983, there was no repugnancy in fact but
there existed merely a future possibility of r~pugnancy; that no records
H had been produced by the State showing that the President was actually
)-
ENGINEERING KAMGAR UNION v.ELECTRO STEELS CASTINGS LTD.
303
informed about the reason for grant of his assent; and that in relation to A
Chapter V-B and section 6R of the State Act there does not exist any such
conflict as section 25J has become part of Chapter V-B by reason of section
25S of the Cen~ral Act, section 6R of the State Act remained unaltered
and as such the non-obstante clause contained therein make the same
prevail over the State Act.
Respondent-industrial establishments contended that the statutory
schemes of Central Act and the State Act are distinct and produce two
different legal results and must be held to be irreconcilable and repugnant
to each other and as such Clause (2) of Article 254 would apply; that clause
B
(2) of Article 254 refers to Central Act which had already been made, the C
application thereof at a later stage would be wholly immaterial and
irrelevant; that as the appellant did not raise the plea that the President's
assent was obtained without informing him the purpose for which it was
sought either in the writ petition or Special Leave Petitiol_I he should not
be permitted raise the same at this stage; and that as regard applicability
of the non-obstante clause contained in section 25S vis-a-vis section 25J D
of the Central Act, the former introduced a non-obstante clause as regard
Chapter V-A and, thus, section 25J cannot be held to have formed a part
of Chapter V-B, in any event, even if section 25S vis-a-vis section 25J have
an overriding effect, the constitutional provisions contained in Clause (2)
of Article 254 would prevail thereover.
E
Dismissing the appeals, the Court
HELD: 1. Article 254 of the Constitution of India, 1950 would be
attracted only when both the Parliament and State Legislatures have
legislative power to make laws with respect to any matter enumerated in F
the Concurrent List, they operate in the same field and there exists direct
conflict between two provisions and not otherwise. Ordinarily both the
laws would be allowed to have their play in their own respective fields.
Once it is held that the law made by the Parliament, and the State
Legislation occupy the same field and there exists direct conflict between
two enactments, the subsequent legislation made by the State which had G.
received the assent of the President o~ India indisputably would prevail
over the parliamentary Act and in absence of presidential assent, the
Parliamentary Act would prevail. [313-A-H; 314-A-C]
Deep Chand v. State of Uttar Pradesh and Ors., AIR {19S9) SC 648;
M Karunanidhi v. Union of India and Anr., (1979) 3 SCC 431; The State of H
304
SUPREME COURT REPORTS {2004] SUPP. I S.C.R.
A West Bengal v. Kesoram Industries Ltd and Ors., (2004) 1 SCALE 425 and
MP.A. T. T. Permit Owners Assn. and Anr. v. State of Madhya Pradesh (2003)
10 SCALE 380, relied on.
Zaverbhai Amaidas v. The State of Bombay (1955) 1 SCR 799; Ch. Tika
Ramji and Ors etc. v. State of Uttar Pradesh and Ors., (1956) SCR 393 and
B ITC Ltd v. Agricultural Produce Market Committee and Ors., (2002) 9 SCC
232, referred to.
2.1. The Industrial Disputes Act, 1947-Central Act and the U.P.
Industrial Disputes Act, 1947-State Act have been enacted in terms of
Entry 22 of List III of the Seventh Schedule of Constitution in 1947.
C Chapter V-A of the Central Act relates to lay off and retrenchment which
was inserted by Act No. 43of1953 and section 25J provides for effect of
laws inconsistent with Chapter V-A of the Central Act. It had an
overriding effect. The State Act was amended in the year 1957 providing
for lay off, retrenchment and closure which was made applicable in
D relation to an industrial establishment wherein not less than 300 workmen
are employed. Section 6R of _the State Act provides for effect of laws
inconsistent with sections 6J to 6Q and in terms of sub-section (2) thereof,
the provision of section 6R shall be deemed not to affect the provision of
any other law for the time being in force. The Parliament introduced
special provisions relating to layoff, retrenchment and closure by inserting
E Chapter V-B in the Central Act containing section 25K to 25S in the year
1976. In terms of Section 25K, Chapter V-B was to apply in an
establishment in which not less than 300 workmen are employed. Section ·
25S provides that certain provisions of Chapter V-A including Section 25J
shall apply to an industrial establishment to which the provisions of
F Chapter V-B apply. [311-H; 312-A-D)
2.2. By Act No. 46of1982 the Chapter V-B of the Central Act was
amended inter alia to extend the beneficent provisions to workmen of small
establishments by reducing the existing employment limit thence from 300
to 100. But the State Act was amended by Act No. 26 of 1983 after the
G amendment of the Central Act. It is not in dispute that Section 25K and
Section 250 of the Central Act are in pari materia with Sections 6Y and
6W of the State Act. If the procedures laid down in the Central Act are
not applicable, a person need not comply the provisions therein keeping
in view the fact that its industrial establishment is covered by the State
H Act in terms whereof the applicability of the relevant provisions would
',
ENGINEERING KAMGAR UNION v.ELECTRO STEELS CASTINGS LTD.
305
be attracted only when the establishment employs more than 300 persons. A
(312-D-G)
2.3. In the instant case, Central Act and State Act indisputably covers
the same field. The jurisdiction of the State Legislature to enact a law by
a parliamentary legislation is not impermissible. Subject to the provisions
contained in Article 254 both will operate in their respective fields which B
is absolutely clear and unambiguous. With regard to the effect of one Act
over the other in the event it is found that there exists a conflict, the conflict
would be direct not only in a case wherein the provisions of one Act would
have to be disobeyed if the provisions of the other is followed but also
where both the laws lead to different legal results. The conflict between C
the Central Act and the State Act was apparent. (314-D-F, 318-D)
" M. Karunanidhi v. Union of India and Anr., (1979) 3 SCC 431,
distinguished.
3. The Central Act received the President's Assent on 31.8.1982, the
State Act received the President's Assent on 10.10.1983. The amending D
Act of 1982 was published in Gazette of India on 1.9.1982 and was given
effect to from 21.8.1984 whereas the State Act was published in the U.P.
Gazette on 12.10.1983 and was given effect to from 3.8.1983. The
phraseology used in Article 254 of the Constitution is clear and
unambiguous. It does not contemplate coming into effect ofa law having E
regard to the nature of the legislation as a conditional one. It in no
uncertain terms states that the conflict is required to be found out keeping
in view a law which has already been made. The makers of the Constitution
deliberately and consciously used past tense. It has, thus, to be given its
ordinary meaning. Therefore, keeping in view the plain language used in
Article 254(2), in the fact and circumstance of the case, the State Act in F
view of the Presidential Assent given thereto would prevail over the
Central Act. [321-A-B]
Pt. Rishikesh and Anr. v. Sa/ma Begum [1995] 4 SCC 718 and M.P.
Shikshak Congress and Ors. v. R.P.F. Commissioner, Jabalpur and Ors.,
[199911 sec 396, distinguished.
G
4. State of Uttar Pradesh inserted Section 6V by Act No. 26of1983
being conscious of the fact that an Act had been passed to the contrary
by the Parliament in terms of Act No. 46 of 1982. So long Chapter V-B
was applicable to an industrial establishment engaging 300 or more
persons, the State did not insert any provision and allowed the Parliament H
306
SUPREME COURT REPORTS (2004] SUPP. I S.C.R.
A to occupy the field relating to layoff, retrenchment and closure of industrial
undertakings. Only Y'hen the number of workmen having regard to the
legislative policy as would appear from the Statement of Objects and
Reasons was brought down to 100 from 300 for the purpose of applicability
of Chapter V-B of the Central Act, the amendment was brought in by the
B State. The provisions contained in Section 6V by reason of the 1983
Amendment by the Legislature of the State of Uttar Pradesh must have
been made consciously in relation whereto only the legislation was reserved
for the Presidential Assent. The plea that the assent of the President was
obtained without clearly informing him the purpose for which the same
was sought for, it was necessary for them to raise such a plea in the writ
C petition. Such plea had not been raised in the writ petition, Special Leave
Petition and cannot be raised at this stage before this Court for the first
time. Section 114 (e) of the Evidence Act raises a presumption that all
official acts must have been performed regularly and Section 114(t) that
the common course of business has been followed in particular cases. The
D said presumptions would apply in this case also. Therefore, it is proceeded
on the presumption that the State amended the Act having regard to the
provisions of the Central Act and the Presidential Assent was sought for
only on account thereof. (322-B-F)
Kaiser-I-Hind Pvt. Ltd and Anr. v. National Textile Corp. (Maharashtra
E North) Ltd and Ors., (2002) 8 SCC 182, referred to.
5. Section 25S does not introduce a non-obstante clause as regard
Chapter V-A. Furthermore, Section 25J is not a part of Chapter V-B. By
reason of Section 25S where the Parliament has deliberately used the
words "so far as may be" which would indicate that provisions of Chapter
F V-A were to apply also in relation to certain industrial establishment to
which provisions of Chapter V-B apply. The non-obstante clause contained
in Section 2SJ does not apply to the entire Chapter V-B. It is required to
be kept confined to Chapter V-A. Applicability of Chapter V-A in relation
to the industrial establishments covered by Chapter V-B in terms of
G Section 25J vis-a-vis Section 25B is permissible but it cannot be said that
Section 250 of the Central Act prevail over the State Act by taking
recourse to the non-obstante clause. In that view of the matter Chapter
V-B does not have an overriding effect over the State Act. Furthermore,
even if Section 25S of the State Act is read to have an overriding effect,
undoubtedly the provisions of the supreme lax shall prevail over a statute.
H A non-obstante clause contained in a statute cannot override the provisions
ENGINEERING KAMGAR UNION v.ELECTRO STEELS CASTINGS LTD. [SINHA, J.] 3 07
of the Constitution. [323-A-F)
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 86-89 of2000.
From the Judgment and Order dated 14.10.99 of the Allahabad High
Court in C.M.W.P. Nos. 38838, 33093/98, 4333 and 13086 of 1999.
Gaurab Banerjee, Rajiv Mehta, Saurav Aggarwal and B. Aggarwal fdr
the Appellants.
Jayant Bhushan, Ramesh Singh, Ms. Gauri Rasgotra at)d Sanjeev Kumar
for the Respondents.
The Judgment of the Court was delivered by
S.B. SINHA, J. The question of application of Clause (2) of Article
254 of the Constitution of India is involved in this appeal which arises out
A
B
c
of the judgment and order dated 14.10.1999 passed by the High Court of
Allahabad dismissing the writ petition filed by the appellants herein and D
allowing the writ petitions filed by the respondent-company herein.
BACKGROUND FACTS:
The appellant herein is a Trade Union registered under the Indian Trade
Unions Act, 1926. The first respondent herein is an industrial establishment E
carrying on business in Engineering Industry. It admittedly employed more
than 100 persons in its factory at Ghaziabad. A notice was issued by it on or
about 21.9.1998 declaring its intention to close down the said factory at
Ghaziabad with effect from 23.9.1998 as a result whereof it was notified that
services of 99 workmen would be terminated.
F
An industrial dispute was raised by the appellant herein on or about
23.9.1998 questioning the validity of the said notice raising a factual plea
that more than 300 workmen are employed by the first respondent in jts
Ghaziabad establishment and, thus, the Industrial Disputes Act, 194 7
(hereinafter referred to as "the Central Act") would be applicable. Pursuant G
to or in furtherance of the purported complaint made by the appellant herein,
a notice was served by the Assistant Labour Commissioner upon the first
respondent herein directing it to show cause. as to why it should not be
prosecuted for contravention of the provisions contained in Section 25 of the
Central Act. In its reply dated 3 .10.1998, the first respondent raised a plea to
the effect that as the number of employees in the said industrial undertaki~g H
308
SUPREME COURT REPORTS [2004] SUPP. l S.C.R.
A was less than 300, no pennission for closure of the industrial undertaking
was required in view of Section 6-W read with Section 6-V of Uttar Pradesh
Industrial Disputes Act, 1947 (hereinafter referred to as 'the State Act').
Two recovery certificates were issued against the first respondent towards
the salary of the workmen under the State Act. Three writ petitions came to
B be filed by the first respondent questioning the show-cause notice as also the
recovery certificates aforementioned. The appellant herein also filed a writ
petition questioning the closure notice issued by the first respondent. By
reason of the impugned judgment, the writ petitions filed by the first respondent
were allowed, whereas the writ petition filed by the appellant herein was
C dismissed.
HIGH COURT JUDGMENT:
The High Court in i_ts impugned judgment held that having regard to
the factthat Chapter V-B of the Central Act was inserted on or about 21.8.1984,
D the State Act having been enacted in the year 1983 whereby and whereunder
Sections 6-V to 6-X were inserted, the latter shall, having regard to Article
254 (2) of the Constitution of India, prevail over the fonner. The High Court
although took notice of the fact that the Chapter V-B of the Central Act came
into force in the year 1984, it was held that in view of the phraseology used
in Article 254 the repugnancy has to be tested in tenns of the date of enactment
E of the legislation in preference to the date of its coming into force. In support
of its aforementioned conclusion, strong reliance was placed by the High
Court on the decision ofthl's Court in Pt. Rishikesh and Anr. v. Sa/ma Begum,
[1995] 4 sec 118.
/
F
G
H
SUBMISSIONS:
Mr. Gaurab Banerjee, learned senior counsel appearing on behalf of the
appellant has raised a number of contentions in support of these appeals. At
the outset the learned Counsel had taken us through the relevant provisions
of the Central Act, State Act and submitted as under:
(i)
A perusal of the Central Act would show that the relevant
provisions relating to closure are found in Chapter V-B of the
Act covering Sections 25K to 25S. Section 25K, as it stands,
provides that Chapter VB applies to industrial establishments
employing not less than l 00 workmen. Section 250 provides for
the procedure for closing down an undertaking. Section 25S
ENGINEERING KAM GAR UNION v.ELECTRO STEELS CASTINGS LTD. [SINHA, J.] 309
provides inter a/ia that Section 25J in Chapter V-A shall also A
apply in relation to an industrial establishment to which the
provisions of Chapter V-B would apply. A reading of the said
provision and in particular Sub-Section (2) thereof would show
that the Central Act would govern the rights and liabilities of
both the employers and the workmen insofar as they relate ,to B
fayoff and retrenchment notwithstanding the State Act laying
down provision to the contrary and in that view of the matter the
Central Act shall be applicable.
(ii) Reading Sections 25K and 25S of the Central Act along with
Section 25J of the Central Act, it is clear that in relation to c
industrial establishments having more than 100 workmen, the
rights of workmen in respect of layoff, retrenchment and closure
would have to be decided as per the Central Act, regardless of
any State law. Necessarily the procedure under Section 250 would
have to be followed in such a case before effecting any closure.
(iii) Sections 6J to 6Q of the State Act providing for layoff and D
retrenchment although are in pari materia with Chapter V-A of
the Central Act which contain a non-obstante clause by way of
Section 6R titled "Effect of Laws Inconsistent with Section 6J to
6Q" and in terms of Sub-Section (2) whereof the provisions of
the State Act were to have effect over any other law inconsistent E
with Sections 6J to 6Q and in that view of the matter although
there was an irreconcilable conflict between the relevant
provisions of State Act and the Central Act as has been held by
this Court in UP. Electricity Supply Co. Ltd. v. R.K. Shukla and
Anr. Etc., [1970] I SCR 507; but in relation to Chapter V B
there does not exist any such conflict inasmuch as whereas Section F
25J has become part of Chapter V-B by reason of Section 25S
of the Central Act, Section 6R of the State Act remained unaltered
and in that view of the matter the non-obstante clause contained
therein make the same prevail over the State Act.
(iv) In terms of Section 250 of the Central Act, the provisions of G
Chapter V-B would be applicable to an industrial establishment
employing one hundred or more workmen; and although in terms
of the State Act inter alia the provisions relating to those would
not apply to industrial establishment employing less than 300
workmen, but there does not exist any irreconcilable or intolerable H
A
B
c
D
E
F
G
H
310
SUPREME COURT REPORTS [2004] SUPP. I S.C.R.
inconsistency as it is possible to apply both the Central Act and
the State Act by the employer upon following the procedure laid
down under the Central Act and, thus, it is possible for the
employer to obey both the laws. There, thus, does not exist any
contradiction or repugnancy. Reliance in this behalf has been
placed on Mis. Ram Chandra Mawa Lal, Varanasi and Ors, v.
State of Uttar Pradesh and Ors., [1984] Supp SCC 28, Zaverbhai
Amaidas v. The State of Bombay, [1955] l SCR 799, Municipal
Corporation of Delhi v. Shiv Shanker, [ 1971] l SCC 442 and M
Karunanidhi v. Union of India and Anr. [1979] 3 SCC 431.
(v) In any event, even assuming that Article 254 of the Constitution
would be attracted in the instant case, Sections 6V to 6W of the
State Act having received the assent of the President on
10.10.1983 and the Central Act (Act ~o. 46 of 1982) having
been brought into force with effect from 21.8.1984, the question
of Presidential Assent of the State Act must be judged. Relying
on Shyamakantlal v. Rambhajan Singh, (1939) FCR 193, Ch.
Tika Ramji and Ors. etc. v. the State of Uttar Pradesh and Ors.,
[1956] SCR 393, Municipal Council Palai v. T.J. Joseph and
Ors., [1964] 2 SCR 87, Kera/a State Elect_ricity Boardv. Indian
Aluminum Co., [1976] 1 SCR 552 and Belsund Sugar Co. Ltd
v. State. of Bihar and Ors., [1999] 9 SCC 620, Mr. Banerjee
would submit that at the material time when Presidential assent
was obtained for the State Act in 1983, there was no repugnancy
in fact but there existed merely a future possibility ofrepugnancy.
Seeking to distinguish the decisi~n of this Court in Rishikesh
(supra) Mr. Banerjee would urge that the same was distinguished
in MP. Shikshak Congress and Ors. v. R.P.F. Commissioner,
Jabalpur and Ors., [1999] 1 SCC 396. Furthermore, as it was
held as of fact in Rishikesh (supra) that there did not exist any
conflict, it was argued, the purported law laid down Clause (2)
of Article 254 must be held to be a mere obiter.
(vi) In any event before Clause (2) of Article 254 is applied, a'finding
of fact must be arrived at that the President was actually informed
about the reason for grant of his assent and as no records had
been produced by the State showing the proposal placed before
the President by it, no inference can be drawn that the same
fulfilled the constitutional mandate. Reliance in this behalf has
been placed on Kaiser-I-Hind Pvt. Ltd. and Anr. v. National
ENGINEERING KAM GAR UNION v. ELECTRO STEELS CASTINGS LTD. [SiNHA, J.]
3 } }
Textile Corpn., (Maharashtra North) Ltd And Ors., [2002] 8 A
sec 1s2.
·Mr. Jayant Bhushan, learned senior counsel appearing on behalf of~he
respondent, would, on the other hand, submit that whereas under the State
Act the procedure to issue notice before the closure of the industrial
undertaking was not required to be followed, the Central Act and the State B
Act must be held to be irreconcilable and repugnant to each other. The
learned counsel would contend that the provisions of the State Act and the
Central Act produce two different legal results and, in that view of the matter,
Clause (2) of Article 254 would apply having regard to the fact that the
statutory schemes of both the Acts are distinct and different.
Mr. Bhushan would urge that keeping in view the fact that Clause (2)
of Article 254 refers to a Central Act which had already been made, the
application thereof at a later stage would be wholly immaterial and irrelevant.
c
The learned counsel would submit that the decision of this Court in D
MP. Shikshak Congress (supra) is not applicable to the fact of the present
case whereas the decision in Rishikesh (supra) is.
As regard applicability of ratio of this Court in Kaiser-I-Hind (supra),
Mr. Bhushan, would argue that the decisions relied therein clearly demonstrate
that such a question should be raised in the writ petition itself so as to enable E
the State Government to bring the relevant documents on records. As the
appellant herein did not raise such a contention either in the writ petition or
in the Special Leave Petition, the learned counsel would contend, that the
appellant should not be permitted to raise the same at this stage particularly
having regard to the fact that there exists a presumption as regard legality and
validity of an official act.
· F
As regard applicability of the non-obstante clause contained in Section
25S vis-a-vis Section 25J of the Central Act, Mr. Bhushan would submit that
the former introduced a non-obstante clause as regard Chapter V-A and, thus;
Section 25J cannot be held to have formed a part of Chapter V-8. In any
event, he would urge that even if Section 25S vis-a-vis Section 25J have ..m G
overriding effect, the constitutional provisions contained in Clause (2) of
Article 254 shall prevail thereover.
ANALYSIS:
The Central Act as also the State Act have been enacted in terms of H
312
SUPREME COURT REPORTS [2004] SUPP. I S.C.R.
A Entry 22. of List III of the Seventh Schedule of Constitution of India. Both
Acts were enacted in the year 1947. Chapter V-A of the Central Act relates
to layoff and retrenchment which was inserted by Act No. 43 of 1953. Section
251 provides for effect of laws inconsistent with Chapter V-A of the Central
Act. It had an overriding effect. The State Act was amended in the year 1957
B providing for layoff and retrenchment. It is not in dispute that Section 6R of
the State Act provides for effect of laws inconsistent with Sections 61 to 6Q
and in terms of sub-Section (2) thereof, the provision of Section 6R shall be
deemed not to affect the provision of any other Jaw for the time being in
force.
C
The Parliament introduced special prov1S1ons relating to layoff,
retrenchment and closure by inserting Chapter V-B in the Central Act in
certain establishments containing Section 25K to 25S in the year 1976. In
terms of Section 25K, Chapter V-B was to apply in an establishment in
which not less than 300 workmen are employed. Section 25S provides that
certain provisions of Chapter V-A including Section 251 shall apply to an
D industrial establishment to which the provisions of Chapter V-B apply.
It may be true that the reason for amending Chapter V-B of the Central
Act by reason of Act No. 46 of 1982 inter alia was to extend the beneficient
provisions to workmen of small establishments by reducing the existing
employment limit thence from 300 to 100. But it is equally true that the State
E Act was amended by Act No. 26 of 1983 after the amendment of the Central
Act. It is not in dispute that Section 25K and Section 250 of the Central Act
are in parimateria with Sections 6V and 6W of the State Act. We must also
notice that whereas the Central Act received the President's Assent on
31.8.1982, the State Act received the President's Assent on 10.10.1983. It is
p also not in dispute that by reason of the State Act the Chapter relating to
layoff retrenchment and closure was made applicable in relation to an industrial
establishment wherein not less than 300 workmen are employed. The amending
Act of 1982 was published in Gazette of India on 1.9.1982 and was given
effect to from 21.8.1984 whereas the State Act was published in the U.P.
Gazette on 12.10.1983 and was given effect to from 3.8.1983.
G
H
CONSTITUTIONAL SCHEME:
Before analyzing the relevant provisions of the State Acts vis-a-vis 'the
Act', we may have an overview of the constitutional scheme. Articles 245
and ·246 of the Constitution of India read with the Seventh Schedule and
!
ENGINEERING KAMGAR UNION v.ELECTRO STEELS CASTINGS LTD. [SINHA, J.] 313
Legislative Lists contained therein prescribe the extent of legislative A
competence of Parliament and State Legislatures. Parliament has exclusive
power to make laws with respect of any of the matters enumerated in List I
in the Seventh Schedule. Similarly, State Legislatures have exclusive power
to make laws in respect of any of the matters enumerated in List II, but the
questions raised herein must be considered keeping in mind the fact that the B
Parliament and State Legislatures both have legislative power to make laws
with respect to any matter enumerated in the Concurrent List.
The various entries in the three Lists are fields of legislation. They are
designed to define and delimit the respective areas of legislative competence
of the Union and State Legislatures. Since legislative subjects cannot always C
be divided into water tight compartments; some overlappings between List I,
II and III of the Seventh Schedule is inevitable.
As in a federal Constitution division of legislative powers between the
Central and Provincial Legislatures exists, controversies arise as regards
encroachment of one legislative power by the other particularly in cases D
where both the Union as well as the State Legislation have the competence
to enact laws. Article 254 provides that if any provision of a law made by
the Legislature of a State is repugnant to any provision made by the Parliament
which Parliament is competent to enact, or to any provision of an existing
law with.respect to one of the matters enumerated in the Concurrent List then
subject to provisions of clause (2), the law made by the Parliament shall E
prevail to the extent of the repugnancy required.
In terms of clause 2 of Article 254 of the Constitution of India where
a law made by the legislature of a State with respect to one of the matters
enumerated in the Concurrent List contains any provisions repugnant to the F ,
provisions of an earlier law made by the Parliament or an existing law with
respect to the matters, then the law so made by the Legislature of such State
shall, if it has been reserved for consideration of the President and has received
its assent, prevail in that State. It is not in dispute that the 1961 Act has
received the assent of the President oflndia and, thus, would prevail over any
parliamentary law governing the same field.
G ,
Article 254 of the Constitution of India would be attracted only when
legislations covering the same ground both by Centre and by the Province
operate in the field; both of them being competent to enact. [See Deep Chand
v. State of Uttar Pradesh and Ors., AIR (1959) SC 648; M Karunanidhi
(supra) and The State of West Bengal v. Kesoram Industries Ltd and Ors., H
314
SUPREME COURT REPORTS (2004] SUPP. I S.C.R.
A (2004) 1 SCALE 425.
Recourse to the said principles, however, would be resorted to only
when there exists direct conflict between two provisions and not otherwise.
Once it is held that the law made by the Parliament and the State LegislatUre
occupy the same field, the subsequent legislation made by the State which
B had received the assent of the President of India indisputably would prevail
over the parliamentary Act when there exists direct conflict between two
enactments. Both the laws would ordinarily be allowed to have their play in
their own respective fields. However, in the event, the.re exists any conflict,
the Parliamentary Act or the State Act shall prevail over the other depending
C upon the fact as to whether the assent of the President has been obtained
therefor or not.
The Central Act and the State Act indisputably cover the same field.
The jurisdiction of the State Legislature to enact a law by a Parliamentary
legislation is not impermissible. Subject to the provisions contained in Article
D 254 of the Constitution of India, both will operate in their respective fields.
E
The Constitutional Scheme in this behalf is absolutely clear and unambiguous.
In this case, this Court is not concerned with the conflicting legislations
operating in the same field by reason of enactments made by the Parliament
and the State in exercise of their respective legislative powers contained in
List I and List II of the Seventh Schedule of Constitution of India but
admittedly the field being the same, a question would arise as regard the
effect of one Act over the other in the event it is found that there exists a
conflict. For the said purpose, it is not necessary that the conflict would be
direct only in a case wherein the provisions of one Act would have to be
disobeyed if the provisions of the other is followed. The conflict may exist
F even where both the laws lead to different legal results.
G
In Zaverbhai Amaidas (supra), it is stated:
"The principle embodied in Section 107 (2) and Article 254 (2) is
that when there is legislation covering the same ground both by the
centre and by the Province, both of them being competent to enact
the same, the law of the Centre should prevail over that of the State."
In M Karunanidhi (supra) the fact of the matter was completely different.
Therein the scheme of the two Acts was not in conflict with each other. This
Court referred to Colin Howard's Australian Federal Constitutional Law, 2nd
H Edition, Hume v. Palmer, 38 CLR 441 (Aus), Zaverbhai Amaidas (supra),
•
ENGINEERING KAMGAR UNION v.ELECTRO STEELS CASTINGS LTD. [SINHA, J.] 315
Tika Ramji (supra), Deep Chand (supra) and State of Orissa v. MA. Tulloch A
and Co., [1964] 4 SCR 461 opining:
"l. That in order to decide the question of repugnancy it must be
shown that the two enactments contain inconsistent and irreconcilable
provisions so that they cannot stand together or operate in the same
~
B
2. That there can be no repeal by implication unless the inconsistency
appears on the face of the two statutes.
3. That where the two statutes occupy a particular field, but there is
room or possibility of both the statutes operating in the same field C
without coming into collision with each other, no repugnancy results.
4. That where there is no inconsistency but a statute occupying the
same field seeks to create distinct and separate offences, no question
of repugnancy arises and both the statutes continue to operate in the
same field."
The judgments of this Court clearly lay down the law to the effect that
if two Acts produce two different legal results, a conflict will arise.
The State Act lays down a complete exhaustive code. It covers the
same subject-matter as contained in Sections 25K and 250 of the Central E
Act. Both the State Act and the Central Act contain penal provisions. If the
procedures laid down in the Central Act are not applicable, a person need not
comply the provisions therein keeping in view the fact that its industrial
establishment is covered by the State Act in terms whereof the applicability
of the relevant provisions would be attracted only when the establishment
employees more than 300 persons.
F
In Tika Ramji (supra), the question which arose for consideration was
as to whether there existed a repugnancy between the U.P. Sugarcane
(Regulation of Supply and Purchase) Act, 1953 which was enacted in terms
of Entry 33 of List III of the Seventh Schedule of the Constitution and the
notifications issued thereunder vis-a-vis the Industries (Development and G
Regulation) Act, 195 l. The Court referred to Nicholas's Australian
Constitution, 2nd Ed. Page 303, which reads thus :
"(l) There may be inconsistency in the actual terms of the competing
statutes (R.V. Brisbane Licensing Court, (1920 28 CLR 23).
H
316
A
B
c
SUPREME COURT REPORTS [2004] SUPP. I S.C.R.
(2) Though there may be no direct conflict, a State law may be
inoperative because the Common-wealth law, or the award of
the Commonwealth Court, is intended to be a complete exhaustive
code Clyde Engineering Co. Ltd v. Cowburn, (1926) 37 C.L.R.
466.
(3) Even in the absence of intention, a conflict may arise when both
State and Commonwealth seek to exercise their powers over the
same subject matter [Victoria v. Commonwealth, (1937)58 C.L.R.
618; Wenn v. Attorney-General (Viet.), (I 948) 77 C.L.R. 84]
Isaacs, J. In Clyde Engineering Company, Limited v. Cowburn
laid down one test of inconsistency as conclusive : "If, however,
a competent legislature expressly or implicitly evinces its intention
to cover the whole field, that is a conclusive test of inconsistency
where another Legislature assumes to enter to any extent upon
the same field"."
In a case, thus, where both the State Act and the Central Act have been
D enacted in terms of List III of the Seventh Schedule of the Constitution of
India, the question of repugnancy as envisaged under Article 254 would
arise. In that type of cases, it is well-settled that in absence of Presidential
Assent, the Parliamentary Act would prevail and where the assent has been
received, the State Act would. [See also MP.A.I. T. Permit Owners Assn. and
E Anr. v. State of Madhya Pradesh, (2003) I 0 SCALE 380].
The question again came up for consideration before a Constitution
Bench of this Court in ITC Ltd v. Agricultural Produce Market Committee
and Ors., [2002) 9 SCC 232. The majority applied Tika Ramji (supra) having
regard to both the positive test ancl negative test .evolved therein. One of us
F (Sabharwal, J.) proceeded to uphold the market fee levied Oii tobacco on the
basis that Parliament was not competent to pass legislation in respect of sale
of agricultural produce of tobacco covered by Entry 52 of the Union List
under which the Parliament can legislate only in respect of the industries,
namely, "the process of manufacture or production". It was held that the
G activity regarding sale of raw tobacco as provided in the Tobacco Board Act
would not be regarded as "inC:ustry".
H
Ruma Pal, J.