# ROHTAK HISSAR DISTRICT ELECTRICITY SUPPLY CO. LTD v. STATE OF UTTAR PRADESH AND OTHERS

- **Citation:** [1966] 2 S.C.R. 863
- **Court:** Supreme Court of India
- **Decided:** 1965-12-03
- **Case number:** Civil Appeal Nos. 164 of 1965
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/rohtak-hissar-district-electricity-supply-co-ltd-v-state-of-uttar-pradesh-and-3761
- **Pages:** 18

## Headnote

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863
ROHTAK HISSAR DISTRICT ELECTRICITY SUPPLY
CO. LTD.
v.
STATE OF UTTAR PRADESH AND OTHERS
December 3, 1965
[P.
B.
GAJENDRAGADKAR,
C.J., K.
N.
WANCHOO,
M. HIDAYATULLAH, V. RAMASWAMI AND
P.
SATYANARAYANA
RAJU,
JJ.]
Standing Orders-Scope of-Jurisdictlan of Certifying
Authorities,
character and extent of-Jurisdiction of Court to exan1ine rearonableness-Industrial Employment (Standing Orders) Act,. 1946 (20 of 1946),
U.P. Industrial Disputes Act, 1947 (28 of 1948).
In accordance with the provisions
of
the
Industrial
Employment
(Standing Orders) Act, 1946,
the appellant prepared
draft standing
orders in consultation with its employees
and submitted the same
to
the Certifying Officer for certification.
Since
the appellant's workers
had not formed any union, three representatives of the \vorkmen were
elected to represent them at the cenification proceedings.
These representatives took no objection to the draft standing orders submitted by the
appellant. The Certifying Officer examined
the reasonableness
of the
provisions contained in the draft Standing Orders made several changes
in the draft and accordingly certified them.
The appellant's appeal
to
the Appellate Authority was dismissed.
In appeal by special leave,
HELD: (i) The contention that the procedure adopted by the certifying authorities in dealing with the question of the fai'rness or reaso_nablene.ss of the draft Standing Orders is invalid, must fail.
Though, originally the jurisdiction of the cettifying officer and
the
Appellate Authority was very
limited,. s. 4 as amended by Act 56 of
. 1956 has imposed upon the certifying ofllcer or th~ appellate authority
the duty to adjudicate upon the fairness or the reasonableness of the provisions of any Standing Orders and thus the jurisdiction of these authorities and the scope of inquiry have become wider. The Act contemplates
that the Standing Orders must cover matters
initially included in
the
Schedule as well as matters which may be added to the Schedule by the
appropriate Government in exercise of the authority conferred on it by
s. 15. [867 H; 868 F]
It cannot be said that since an elaborate machinery has been established by the U.P. Industrial Disputes Act,
1948
any attempt by the
certifying authorities to devise detailed provisions in respect of matters
cove.red by the First and Second Schedules to the U.P. Act would trespass upon the provisions of that Act. The scope of the provisions of the
two Acts and the fields covered by them are not the same. While the
Industrial Employment (Standing Orders) Act purports to secure to industrial employees clear and unambiguous
conditions
of their employment, the scheme of the U.P. Act is to deal with problems
posed by
Industrial Disputes which have actually arisen or are apprehended.
[869
G-870 CJ
. (ii) Consent of the employees, though relevant cannot have a decis1ye significance in
ce~tification proceedings.
The authority has to deal
w•!h the matt".' accordmg to its own judgment and must decide in appropnate cases, hke the mstant case where the employees are not organised
or strong enough, whether or not a particular standing order is fair or
reasonable. [871 A-CJ
864
SUPREME COURT
REPORTS
[1966] 2 S.C.R.
(iii) The draft Standing Orders cannot relate to matters outside the
A
Schedule to the Act.
By s. 3(2) of the Act the emplayers
have to
frame draft Standing Orders and these must normally cover the items in
the schedule to the Act. If, however, it
appears to the appropriate
autho'rities that having regard to the relevant facts and circumstances it
would be unfair and unreasonable to make provision for
a particular
item, it would be competent to the authorities not to frame draft Standing Orders in that behalf, but the employer cannot insist upon adding a
condition to the Standing Order which relates to a matter which is not
B
included in the Schedule. [871 F; 872 BJ
(iv) The wording of s. 3(2) of the Act indicates that the appropriate authority may permit

## Text

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863
ROHTAK HISSAR DISTRICT ELECTRICITY SUPPLY
CO. LTD.
v.
STATE OF UTTAR PRADESH AND OTHERS
December 3, 1965
[P.
B.
GAJENDRAGADKAR,
C.J., K.
N.
WANCHOO,
M. HIDAYATULLAH, V. RAMASWAMI AND
P.
SATYANARAYANA
RAJU,
JJ.]
Standing Orders-Scope of-Jurisdictlan of Certifying
Authorities,
character and extent of-Jurisdiction of Court to exan1ine rearonableness-Industrial Employment (Standing Orders) Act,. 1946 (20 of 1946),
U.P. Industrial Disputes Act, 1947 (28 of 1948).
In accordance with the provisions
of
the
Industrial
Employment
(Standing Orders) Act, 1946,
the appellant prepared
draft standing
orders in consultation with its employees
and submitted the same
to
the Certifying Officer for certification.
Since
the appellant's workers
had not formed any union, three representatives of the \vorkmen were
elected to represent them at the cenification proceedings.
These representatives took no objection to the draft standing orders submitted by the
appellant. The Certifying Officer examined
the reasonableness
of the
provisions contained in the draft Standing Orders made several changes
in the draft and accordingly certified them.
The appellant's appeal
to
the Appellate Authority was dismissed.
In appeal by special leave,
HELD: (i) The contention that the procedure adopted by the certifying authorities in dealing with the question of the fai'rness or reaso_nablene.ss of the draft Standing Orders is invalid, must fail.
Though, originally the jurisdiction of the cettifying officer and
the
Appellate Authority was very
limited,. s. 4 as amended by Act 56 of
. 1956 has imposed upon the certifying ofllcer or th~ appellate authority
the duty to adjudicate upon the fairness or the reasonableness of the provisions of any Standing Orders and thus the jurisdiction of these authorities and the scope of inquiry have become wider. The Act contemplates
that the Standing Orders must cover matters
initially included in
the
Schedule as well as matters which may be added to the Schedule by the
appropriate Government in exercise of the authority conferred on it by
s. 15. [867 H; 868 F]
It cannot be said that since an elaborate machinery has been established by the U.P. Industrial Disputes Act,
1948
any attempt by the
certifying authorities to devise detailed provisions in respect of matters
cove.red by the First and Second Schedules to the U.P. Act would trespass upon the provisions of that Act. The scope of the provisions of the
two Acts and the fields covered by them are not the same. While the
Industrial Employment (Standing Orders) Act purports to secure to industrial employees clear and unambiguous
conditions
of their employment, the scheme of the U.P. Act is to deal with problems
posed by
Industrial Disputes which have actually arisen or are apprehended.
[869
G-870 CJ
. (ii) Consent of the employees, though relevant cannot have a decis1ye significance in
ce~tification proceedings.
The authority has to deal
w•!h the matt".' accordmg to its own judgment and must decide in appropnate cases, hke the mstant case where the employees are not organised
or strong enough, whether or not a particular standing order is fair or
reasonable. [871 A-CJ
864
SUPREME COURT
REPORTS
[1966] 2 S.C.R.
(iii) The draft Standing Orders cannot relate to matters outside the
A
Schedule to the Act.
By s. 3(2) of the Act the emplayers
have to
frame draft Standing Orders and these must normally cover the items in
the schedule to the Act. If, however, it
appears to the appropriate
autho'rities that having regard to the relevant facts and circumstances it
would be unfair and unreasonable to make provision for
a particular
item, it would be competent to the authorities not to frame draft Standing Orders in that behalf, but the employer cannot insist upon adding a
condition to the Standing Order which relates to a matter which is not
B
included in the Schedule. [871 F; 872 BJ
(iv) The wording of s. 3(2) of the Act indicates that the appropriate authority may permit departure from the Model Standing Orders
if it is satisfied that insistence upon such conformity may be impracti·
cable. [872 GJ
Associated Cement Co, Ltd. v. P.
D. Vyas [1960J 2 S.C.R. 974 :
[1960] 1 L.L.J. 565, referred to.
C
(v) The object of the Act being to require the employers to define
with sufficient precision the conditions of employment under them, it is
open to the appropriate Government to add to the Schedule if the item
added has relation to conditions of employment. The enumeration
of
particular matters by s. 15(2) will not control or limit the width of the
power conferred on the appropriate Government by s. 15(1). Whether
or not an addition should be made is a matter for such Government to
D
decide in its discretion and the reasonableness of such addition cannot
be questioned.
So, having regard to the development of industrial law
in this country it cannot be said that gratuity, provident fund and the age
of superannuation or retirement are not matters relating to conditions of
employment. [873 E-HJ
(vi) The provision for pension which the
certified Standing Order
No. 54 purports to make must be regarded as invalid since it was neither
extended by the employer nor agreed upon between the parties as required by item 11-C of the Schedule to the Act. As such, it will not be
fair or reasonable to retain the other part of Standing Order No. 54
dealing with retirement age without the provision as to payment
of
pension. [874 E-HJ
(vii) The two provisos to Standing Order 47 as
well as Standing
Orders 48(a)(l) & (2) which make elaborate provisions for appeals and
the finality assigned to the decision of the Labour Commissioner under
Standing Order 49 are outside the purview of the Act and therefore must
be held to be bad in law. Though the scheme of the Act, as modified in
1956, has widened the scope of the enquiry
before the appropriate
authorities, the Act does not authorise the introduction of Standing
Orders which would result in appeals to outside authorities either by the
workmen or the employer and thereby extend the scope of the provisions
which can legitimately be made by Standing Orders. The Standing Orders
are intended to regulate the conditions of service of the employees and in
that behalf may legitimately make provisions concerning the rights and
liabilities of the parties and their enforcement
by an internal arrange..-
ment between the employer and his employees. [878 H-879 BJ
(viii) In an appeal under Art. 136 of the Constitution this Court
would not be justified in examining
the correctn""s of the conclusions
reached by the appropriate authorities in dealing with the 'reasonableness
or fairness of the Standing Orders. That is a matter left to the discretion of the authorities. [879 Fl
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 164 of
1965 and 1105 of 1964.
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H!SSAR ELECTY. co. V. u. P. STATE (Gajendragadkar, C.J.) 865
A
Appeals by special leave from the orders dated the June 29,
1963 and August 31, 1963 of the Industrial Tribunal (II) Uttar
Pradesh and Industrial Tribunal (II), Uttar Pradesh (Appellate
authority) in Appeals Nos. l of 1963 and 4 of 1963 respectively.
M. C. Setalvad, B. L. Khanna and K. K. Jain, for the appelB
!ant (in C.A. No. 164/65).
c
B. L. Khanna and K. K. Jain, for the appellant (in C.A. No.
1105/65).
C. B. Agarwala and 0. P. Rana, for respondents 1 and 2.
The Judgment of the Court was delivered by
Gajendragadkar, C.J.
This appeal has been brought to this.
Court by special leave and it challenges the validity of certain
orders passed by the Certifying Authorities in respect of the draft
Standing Orders which the appellant, The Rohtak Hissar District
Electric Supply Co. Ltd., had submitted to them for certification.
D Five respondents have been impleaded to this appeal; they are the
State of U.P., Certifying Officer for Standing Orders and Labour
Commissioner, U.P., Kanpur, and three representatives of the
employees respectively.
At the hearing before us, the employees'
representatives have not appeared and the appeal has been conE tested by respondent No. l alone.
The appellant is a Joint Stock Company incorporated under
the Companies Act, and it has its registered office at Allahabad.
The principal object for which this Company has been incorporated is to carry on the business of generation and distribution of
electricity. In accordance with the provisions of the Industrial
F
Employment (Standing Orders) Act, 1946
(No. 20 of 1946)
(hereinafter called 'the Act'), the appel!ant prepared draft Standing Orders in consultation with its employees and submitted the
same to the Certifying Officer on the 24th December, 1950, for
certification.
At that time, the workmen employed by the appellant had not formed any Union, and so, the Labour Department
G held proceedings for the election of the three representatives from
the said workmen.
Normally, a Union representing the workmen
would have been competent and qualified to represent the workmen in the certification proceedings; but since there was no Union
in exi~tence, the Labour Department had to adopt the expedient
H
of askmg the workmen to elect three representatives.
That is how
respondents 3 to 5 came to be elected as the representatives of
workmen. . In . the certification proceedings, these representatives
took no obiechon to the draft Standing Orders submitted by the
.S66
SUPREME COURT REPORTS
(1966] 2 S.C.R .
appellant.
In fact, the said draft Standing Orders were subA
mitted to the Certifying Officer on the basis that they had been
agreed to by the appellant and its workmen.
The Certifying Officer, however, examined the fairness
and
reasonableness of the provisions contained in the said draft Standing Orders and made several changes in them. The draft Standing
B
-Orders with the changes made by the Certifying Officer were
accordingly certified on the 21st November, 1962.
Against the said order passed by the Certifying Officer, the ·
appellant filed an appeal before the Industrial Tribunal, U.P.,
Allahabad, which had been appointed the Appellate Authority
C
under the Act.
It was urged by the appellant before the Appellate
Authority that the Certifying Officer was in error in.making modifications in the draft Standing Orders submitted to him for his
certification, but the Appellate Authority did not accept the appellant's contention and, in substance, confirmed the order passed by
the Certifying Officer.
In the result, the appeal preferred by the
D
appellant was dismissed by the Appellate Authority on the 29th
June, 1963. It is against this appellate order that the appellant
has come to this Court by special leave.
Along with this appeal, Civil Appeal No. 1105 of 1964 has
been placed before us for hearing and final disposal.
This appeal
arises between the appellant M/ s Amitabh Textile Mills Ltd., and
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its workmen and it raises substantially the same points as arise in
Civil Appeal No. 164 of 1965.
Mr. K. K. Jain, who appeared
for the appellant in this appeal, has stated before us
that the
decision in this appeal will follow our decision in Civil Appeal No.
164 of 1965. That is why we do not propose to refer to the facts
in this appeal nor deal with it separately.
F
The -first point which Mr. Setalvad has raised before us in
Civil Appeal No. 164 of 1965 is of a general character. He contends that the Model Standing Orders which have been followed
as a pattern by the certifying authorities in the present certification proceedings, are themselves invalid in some material partiG
culars.
His argument is that the Model Standing Orders permissible under the Act should be confined to matters which do not
fall within the purview of the provisions of the Industrial Disputes
Act, 1947 (No. 14 of 1947) (hereinafter called 'the Central Act')
or of the U.P. Industrial Disputes Act, 1947 (No. 28 of 1947)
(hereinafter called 'the U.P. Act').
H
Before dealing with this point, it is necessary to indicate the
broad features of the Act.
The Act was passed on the 23rd
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HISSAR ELECTY. co. V. u. P. STATE (Ga;endragadkar, C.J.) 867
A . April, 1946, and the Standing Orders framed by the U.P. Government under s. 15 of the Act were published on the 14th May,
1947.
The Central Act came into force on the 1st April, 1947,
whereas the U.P. Act came into force on the 1st February, 1948.
It will thus be seen that the Act came into force before either
the Central Act or the U.P. Act was passed.
The scheme of the
B
Act originally was to
require employers in industrial establishments to define with sufficient precision the conditions of employment under them and to make the said conditions known to the·
workmen employed by them.
The Legislature thought that in
many industrial establishments, the conditions
of
employment
were not always uniform, and sometimes, were not even reduced
C
to writing, and that led to considerable confusion which ultimately
resulted in industrial disputes.
That is why the Legislature passed
the Act making it compulsory for the establishments to which the
Act applied to reduce to writing conditions of employment and
get them certified as provided by the Act.
The matters in respect
D
of which conditions of employment had to be certified were specified in the Schedule appended to the Act.
This Schedule contains 11 matters in respect of which Standing Orders had to be
made.
In fact, the words "Standing Orders"
are defined by
s. 2(g) as meaning rules relating to matters set out in the Schedule.
The "Certifying Officer" appointed under the Act is defined
E by s. 2 ( c), whereas "Appellate Authority" is defined by s. 2 (a).
Originally, the jurisdiction of the Certifying Officer and the
Appellate Authority was very limited; they were called upon to
consider whether the Standing Orders submitted for certification
conformed to the Model Standing Orders or not.
Section 3 (2)
provides that these Standing Orders shall be, as far as practicable,
F
in conformity with s11dh Model Standing Orders.
Section 15
which deals with the powers of the appropriate Government to
make rules, authorises, by cl. (2) (b), the appropriate Government
to set out Model Standing Orders for the purposes of this Act.
That is how the original jurisdiction of the certifying authorities
G was limited to examine the draft Standing Orders submitted for
certification and compare them with the Model Standing Orders.
In 1956, howeler, a radical change was made in the provisions
of the Act.
Section 4 as amended by Act 36 of 1956 has imposed upon the Certifying Officer or the Appellate Authority the
duty to adjudicate upon the fairness or the reasonableness of the
H
provisions of any Standing Orders.
In other words, after the
amendment was made in 1956, the jurisdiction of the certifying
authorities has become very much wider and the scope of the
868
SUPREME COURT REPORTS
[1966] 2 S.C.R.
enquiry also has become correspondingly wider.
When draft
Standing Orders are submitted for certification, the enquiry now
has to be twofold; are the said Standing Orders in conformity
with Model Standing Orders; and are they reasonable or fair? In
dealing with this latter question, the Certifying Officer and the
Appellate Authority have been given powers of a Civil Court by
A
s. 11 ( 1). The decision of the Certifying Officer is made appealB
able to the Appellate Authority under s. 6 at the instance of either
party.
Similarly, by an amendment made in 1956 in s. 10(2)
both the employer and the workmen are permitted to apply for
the modification of the said Standing Orders after the expiration
of 6 months from the date of their coming into operation. H will
thus be seen that when certification proceedings are held before
the certifying authorities, the reasonableness or the fairness of the
provisions contained in the draft Standing Orders falls to be examined.
That is one aspect of the matter which has to be borne
in mind in dealing with Mr. Setalvad's contention.
c
The second aspect of the matter which is relevant on this
D
point is that the Standing Orders have to cover the matters specified in the Schedule attached to the Act.
Item 11 in the said
Schedule refers to any other matter which may be prescribed. We
have already mentioned the fact that s. 15 confers power on the
appropriate Government to make rules.
Section 15(2) (a) provides that the appropriate Government may, by rules, prescribe
E
additional matters to be included in the Schedule, and the procedure to be followed in modifying Standing Orders certified under
this Act in accordance with any such addition. Thus there can be
no doubt that the Act contemplates that the Standing Orders must
cover matters initially included in the Schedule as well as matters
which may be added to the Schedule by the appropriate GovernF
ment in exercise of the authority conferred on it by s. 15. In fact,
by virtue of this power, the U.P. Government has added several
items to the list contained in the Schedule; they are SA-issue of
service certificate; 9A---censure and warning notice; llA-issue
of wage slips; 1 lB-introduction of welfare schemes such as provident fund, gratuity etc.; and 11 C-age of superannuation or G
retirement, rate of pension or any other facility which the employers may like to extend or may be agreed upon between the parties.
We will have occasion to deal with item llC later.
The position,
therefore, is that in the State of U.P. Standing Orders have to
cover the items originally included in the Schedule as well as the
items which have been subsequently added thereto.
Mr. Setalvad's argument is that in determining the scope of
the Standing Orders and the character and extent of the jurisdic·
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IIlSSAR ELECTY. co. v. u. P. STATE (Gajendragadkar, C.J.) 869
A tion conferred on the certifying authorities under the Act, we
should not overlook the fact that when the Act was passed, the
Central Act and the U.P. Act had not come into operation; and as
it was originally passed, the Act required certification of Standing
Orders which were in conformity with the Model Standing Orders
without examining their reasonableness or fairness.
The position
B under the original Act, according to Mr. Setalvad, therefore was
that the conditions of employment which had to be included in the
Standing Orders were no better than, or different from, similar
conditions which would otherwise have been included in contracts
of service between the employers and their employees. After the
Central Act and the U .P. Act were passed, a different situation
C has arisen.
The U.P. Act, following the pattern of the Central
Act, has provided for the settlement of industrial disputes and
other incidental matters in accordance with its own scheme. Sections 4(A) and 4(B) of the U.P. Act deal with the establishment
of Labour Courts and Industrial Tribunals, and s. 4K gives power
to the State Government to refer disputes for adjudication to
L D Labour Courts or Industrial Tribunals. The First Schedule to the
U.P. Act sets out 6 items of industrial disputes which can be referred to the Labour Courts, whereas the Second Schedule refers
to 11 items of industrial disputes which can be referred for adjudication to the Industrial Tribunals.
Thus, an elaborate machiE nery has now been established by the U.P. Act for the purpose of
dealing with industrial disputes concerning the matters specified
in the First and the Second Schedules to the U.P. Act.
That is
why any attempt which the certifying authorities may purport to
make in devising elaborate provisions in respect of matters covered
by the First or the Second Schedule of the U.P. Act, would trespass
F upon the provisions of the said Act, and in that sense, would be
invalid.
Let the operation of the Act be confined to its original
form and no further; that, in substance, is the general point raised
by Mr. Setalvad before us.
We are not inclined to accept this contention. In substance,
the argument proceeds on the assumption that there is a conflict
G between the Act and the U.P. Act.
Since we are not satisfied
that there is any such conflict, it is not necessary for us to consider what would have been the result if we had taken the view
that there was any such conflict between the said two Acts.
The
schemes of the two Acts are in essence different in character. The
Act purports to secure to industrial employees clear and unambiH
guous conditions of their employment. The obvious object of the
Act is to avoid any confusion in the minds of the employers or the
employees in respect of their rights and obligations concerning the
870
SUPREME
COURT REPORTS
[1966] 2 S.C.R.
terms and conditions of employment and thereby avoid unnecessary industrial disputes.
The result of the Standing Orders which
are certified under the Act is to make it clear to both the parties
on what terms and conditions the workmen are offering to work
and the employer is offering to engage them. The scheme of the
U.P. Act, on the other hand, is to deal with the problem posed
by industrial disputes which.have actually arisen or are apprehended, and naturally the nature of the industrial disputes which may
arise or which may be apprehended, relates to items larger in
number than the items covered by the Act. It is true that some of
A
B
the items are common to both the Acts, but as we have just indicated, the scopes of the provisions of the two respective Acts and
the fields covered by them from that point of view are not the
C
same.
After the Act was amended in 1956, the Legislature has provided a speedy and cheap remedy available to individual employees
to have their conditions of employment determined in the manner
prescribed by the Act.
If employees or employers desire any
D
modification in the said Standing Orders, that remedy is also provided.
The decision of the Certifying Officer is made subject to
an appeal, and so, after its amendment in 1956, the Act provides
for a self-contained Code for the fixation of conditions of employment in establishments to which the Act applies. It is true that
the original scope of the Act was rather narrow and limited; but
even after the scope of the Act has been made wider, we cannot
see how it can be said to conflict with the provisions of the U .P.
Act or the Central Act. Therefore, we are not impressed by the
argument that the procedure adopted by the certifying authorities
E
in the present case in dealing with the question of the fairness or
reasonableness of the draft Standing Orders submitted for certificaF
tion is invalid, and for that reason alone, some of the draft
Standing Orders certified by them should be set aside.
The next contention which Mr. Setalvad has raised is that the
appropriate authorities under the Act were in error in insisting
upon conformity with the Model Standing Orders under s. 3 ( 4).
G
His argument is that in certifying the Standing Orders the appropriate authorities may, no doubt, compare them with the Model
Standing Orders, but they need not insist upon strict compliance
with them. He also suggested that it would be open to the employers to include matters in the Standing Orders which may not
strictly be included in the Schedule. In this
connection, he
relied on the fact that the draft Standing Orders which the appellant had submitted for certification, had been assented to by the
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HISSAR ELECTY. co. v. u. P. STATE (Gajendragadkar, C.J.) 871
A employees. In our opinion, this contention is misconceived and
must be rejected.
The consent of the employees is, no doubt,
a relevant factor which the certifying authorities may bear in
mind in dealing with the ·question as to the fairness or reasonableness of the said Orders. If both the parties agree that certain
Standing Orders submitted for certification are fair and reasonable,
B that, no doubt, is a consideration which the appropriate authority
must take into account; but clearly, the appropriate authority cannot be denied the jurisdiction to deal with the matter according
to its own judgment. It is for the appropriate authority to decide
whether a particular Standing Order is fair or reasonable, or not.
Sometimes, the employees may not be organised enough to resist
C
the pressure of the employer or may not be articulate; and where
the employees are not organised or strong enough to put forward
their point of view vigorously, the fact that the employer has persuaded :his employees to agree to the draft Standing Orders, will
not preclude the appropriate authority from discharging its obligaD tion by considering the fairness or reasonableness of the draft. The
present case itself is an illustration in point.
When the Standing
Orders were drafted by the appellant and submitted for certification, it was found that the employees of the appellant had no Union
of their own; and so, three representatives were elected by the
employees at the instance of the Labour Department.
The fact
E that the employees' representatives have not appeared before this
Court also shows that they are either not organised enough, or
have p.ot the financial capacity to take steps to engage lawyers to
appear before this Court.
Therefore, we do not think that the consent of the employees can have a decisive significance in certification proceedings.
F
Then in regard to the matters which may be covered by the
Standing Orders, it is not possible to accept the argument that the
draft Standing Orders can relate to matters outside the Schedule.
Take, for instance, the case of some of the draft Standing Orders
which the appellant wanted to introduce; these had reference to the
G liability of the employees for transfer from one branch to another
and from one job to another at the discretion of the management.
These two Standing Orders were included in the draft of the appellant as Nos. 10 and 11.
These two provisions do not appear to
fall under any of the items in the Schedule; and so, the certifying
authorities were quite justified in not including them in the certified
H
Standing Orders.
'
. In this connection, we may incidentally add that if the appro•
pnate Government adds to the list of items in the Schedule, it may,
LSSup.CI/66-9
872
SUPREME COURT REPORTS
[1966] 2 S.C.R.
in some cases, be permissible to the certifying authorities to say · A
that having regard to the relevant factors, no provision nee.d be
made for some of the items thus added. The U.P. Government
has, by adding clause llB to the Schedule, referred to items of
welfare schemes such as provident fund, gratuities, etc.
It would,
we think, be unreasonable to hold that the Standing Order must
necessarily refer both to. provident fund and gratuities, and other
B
welfare schemes.
It is well known that the introduction of these
amenities in industrial establishments involves financial liabilities
for the employers, and the decision as to whether these amenities
should be introduced or not, depends upon a consideration of
several relevant factors; and so, if the additional items are included
C
in the Schedule, and they appear to overlap or cover the same or
similar ground, the appropriate authorities may, for good reasons,
take the view that the provision need not be made for each one
of those items.· This position has not been seriously disputed
before us by Mr. Agarwal for respondent No. 1.
He has fairly ·
. conceded that it is not obligatory on the employer to have a scheme
D
for provident fund as well as gratuity in every c'!se. Thus, the
true position appears to be that under s. 3(2) of the Act the employers have to frame draft Standing Orders and they must normally cover the items in. the Schedule to the Act.
If, however, it
appears to the appropriate authorities that having regard to the
relevant facts and circumstances, it would be unfair and unreasonE
able to make a provision for a particular item, it would be competent for them to do so; but the employer cannot insist upon
adding a condition to the Standing Order which relates to a matter
which is not included in the Schedule.
Then in regard to the conformity with the Model Standing
F
Orders, the position is clear.
Section 3 (2) of the Act specifically
requires that the Standing Orders shall be, as far as practicable,
in conformity with the model.
These words indicate that the
appropriate authority may permit departure from the Model Standing Orders if it is satisfied that insistence upon such conformity
G
may be impracticable.
This fact also shows that in a given case,
the appropriate awthority may permit departure from the Model
!ltanding Orders and may come to the conclusion that one or the
other of the conditions included in the Model Standing Orders may
not, for the time being, be included in the Standing Orders of any
particular establishment vide Associated Cement Company Ud.
v. P. D. Vyas and Others(').
(I) [1960] 2 S.C.R. 974. [1960] 1 L.L.J. 563.
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HISSAR ELECTY. co. v. u. P. STATE (Gajendragadkar, C.J.) 87J.
A
The next point raised by Mr. Setalvad is in relation to the
addition of two items to the Schedule by respondent No. 1. We
have already mentioned these items.
Mr. Setalvad objects to the
addition of item llB which has reference to welfare schemes, such
as provident fund, gratuities, etc., as well as item llC which has
reference to the age of superannuation or retirement, rate of penB sion or any other facility which the employers may like to extend
or may be agreed upon between the parties.
We do not think that
this argument is well-founded.
We have already emphasised the
fact that the Act, even in its original form, was intended to require
the employers to define with sufficient precision the conditions of
employment under them. In pursuance of the said object, the
C Schedule enumerated I 0 items in respect of which Standing Orders
had to be drafted by the employers and submitted for certification.
Item 11 in the Schedule refers to any other matter which may be
prescribed. When the appropriate' Government adds any item to
the Schedule, the releva!lt question to ask would be whether it
D refers to the conditions of employment or not. If it does, it would
be within the competence of the appropriate Government to add
s11ch an item.
Section 15 (I) confers wide powers on the appropriate Government to make rules to carry out the purposes of the
Act; ands. 15(2) specifies some of the matters enumerated by
E
F'
clauses (a) to (e), in respect of which rules may be framed.
It
is well-settled that the enumeration of the particular matters by
sub-s. ( 2) will not control or limit the width of the power conferred
on the appropriate Government by sub-s. (1) of s. 15; and so, if
it appears that the item added by the appropriate Government has
relation to conditions of employment, its addition cannot be challenged as being invalid in law.
Whether or not such addition
should be made, is a matter for the appropriate Government to
decide in its discretion.
The reasonableness of such a"ddition cannot be questioned, because the power to decide which additions
should be made has been left by the Legislature to the appropriate .
Government. Having regard to the development of industrial law
in this country during recent years, it cannot be said that gratuity
G or provident fund is not a term of conditions of employment in
industrial establishments. Similarly, it would be difficult to sustain
the argument that the age of supernnuation or retirement is not
a matter relating to the conditions of employment. Therefore, we
are satisfied that the contention raised by Mr. Setalvad that the
addition of items l!B and 11 C to the Schedule is invalid, must
H fail.
That takes us to the points raised by Mr. Setalvad on the
merits of the Standing Orders.
Let us begin with the Standing
874
SUPREME COURT REPORTS
[1966] 2 S.C.R.
Order in relation to the age of superannuation. The appellant had
A
made a provision about the age of superannuation in its draft Standing Orders and it was numbered as 59. The Certifying Officer had
dropped this draft Standing Order, because the appellant
did not agree to provide . for
any
retirement
benefits.
On appeal, however, the appellate authority has made substantial alterations in the said draft provisions and has
B
numbered it as Standing Order 54.
Under Standing Order
No. 54 as certified, it is provided that "a workman shall retire
from service after attaining the age of 'SS years, or after putting
in 30 years' service whichever is earlier. If he has put in more
than seven years' service, he shall get a pension at the rate specified by the said Standing Order." Mr. Setalvad contends that C
even if the addition of item 11 C is valid, the relevant certified
Standing Order is not justified by item 11 C. In our opinion, this
argument is sound and must be' upheld. We have already noticed
that item 11 C provides for the fixation of. the age of superannuation or retirement, and in that connection, it incidentally refers to D
the rate of pension or any other facility which the employer may
like to extend or may be agreed upon between the parties. This
item consists of two parts; the first relates to the age of superannuation or retirement; and the second refers to the rate of pension
or any other facility.
In regard to· this latter part of item llC,
the important provision is that this rate of pension or any other
E
facility should be such as the employer may like to extend, or
as may be agreed upon between the parties. It is plain that the
provision for pension which the certified Standing Order 54 purports to make was neither extended by the employer, nor agreed
upon between the parties.
On this narrow ground alone, the said
provision in certifying S.O. No. 54 must be regarded as invalid.
F
That raises the question as to whether it would be fair or
reasonable to retain the other part of certified S.O. 54 without
the provision as to payment of pension. It appears to us that it
would not be fair or reasonable to introduce a term of retirement
in the conditions of service without making any provision for a
~uitable retiral benefit; but such a provision cannot be made suo
G
moto by the appropriate authority under item 1 lC; it has to be
made either at the initiative of the employer, or by consent of
parties.
Mr. Setalvad did not dispute the position that it would
be equitable to make some suitable provision for retiral benefit
to the employees, particularly the existing employeys, if an ag!) of
superannuation or retirement is going to be fixed for the first time H
in this establishment. He was, therefore, prepared that the whole
of certified S.O. No. 54 should be deleted and the matter of retire-
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lilSSAR ELECTY. co. v. u. P. STATE (Gajendragadkar, C.J.) 875
A ment of the employees should be left to be determined under the
existing practice.
It is common ground that under the existing
practice, there is no age of superannuation or retirement.
B
c
D
The next certified Standing Orders which are challenged by
Mr. Setalvad 'are in regard to the payment of compensation for
"lay-off"; they are Nos. 29 and 30.
Clause (a) of the certified
S.O. 29 reads thus:-
"The employer may at any time or times,
in the
event of a fire, catastrophe, break-down of machinery or
stoppage of power supply, epidemic,
civil commotion
or other causes, whether of a like nature or not, beyond
the control of the employer, stop any machine or machines of department or departments, wholly or partly for
any period or periods, by giving two days' notice, if
possible. If two days' notice of closure has not been
given, the employer shall pay wages in lieu of such
notice, I.e., two days' wages.
Provided that no compensation in lieu of notice in
excess of wages for the actual period of closure shall be
payable when the period of closure is less
than two
days".
E Mr. SetalVad argues that it is wholly unreasonable to expect that
where work is stopped for any of the reasons mentioned in this
clause, it would be possible for the employer to give two days'
notice before such stoppage of work.
All the causes mentioned
iri this clause are causes over which the employer has no control
and which would overtake the ·establishment suddenly and unF
expectedly.
We have no difficulty in accepting this argument.
We would, therefore, modify the last sentence in the first paragraph of certified S.O. No. 29(a) by providing that if in cases
where it would have been possible to give two days' notice of
closure, but the employer has not given such a notice, he shall pay
wages in lieu of such notice, i.e., two days' wages. Plainly stated,
G having regard to the nature of the causes mentioned in this clause,
such a case can rarely arise.
Then as regards Standing Order No. 30, Mr. Setalvad's contention is that this Standing Order conflicts with s. 6K of the
U.P. Act.
This section deals with the right of workmen laid-off
for compensation. It is not necessary to refer in detail to the
H
provisions of this section for the purpose of dealing with Mr.
Setalvad's argument. It would be enough to state that this section
refers to cases in which workmen laid off are entitled to compen-
876
SUPREME COURT REPORTS
[1966] 2 S.C.R.
sation, and it provides for the s·cales at which such compensation
should be computed.
Mr. Setalvad suggests that the matter of
payment o'. compensation for lay-off having thus been covered
by s. 6K, 1t would n~t. be !egitimate for the Standing Orders to
~ake a separate prov1s10n m that behalf. · The field in questio.n
is c~vered by a specific provision of the U.P. Act and matters
relat~n.g to that field must be dealt with by s. 6K and no other
prov1s1on.
·
A
B
In this connection, Mr. Setalvad referred us to s. 6K of the
U.P. Act.
Section 6-R(l) provides that the provisions from
section 6-J to 6-Q shall have effect notwithstanding anything
inconsistent therewith contained in any other
law
(including c
Standing Orders) made under the Industrial Employment (Standing Orders) Act, 1946. There is a proviso to this sub-section
·which is also relevant. It says that nothing contained in this Act
shall have effect to derogate from any right which a workmen has
under the Minimum Wages Act, 1948, or any notification or order
issued thereunder or any award for the time being in operation
D
or any contract with the employer. It is clear that the proviso
cannot cover the cases of Standing Orders which are expressly
included in s. 6-R(l). It is true that the Standing Orders, when .
certified, in substance embody statutory conditions of employment,
but they cannot be· treated as a contract within the meaning of
the proviso.
The context obviously' negatives such a construction;
E
and so, if the point raised by Mr. Setalvad had to be decided
solely by reference. to the provisions of s. 6-K and 6-R,
there
would have been considerable force in his argument.
But the
difficulty in accepting Mr. Setalvad's argument is created by the
provisions of s. 25-J of the Central Act.
Section 25-J corresponds to s. 6-R of the U.P. Act, except this that the proviso to
F
s. 25-J(l) and sub-s. (2) of s. 25-J which have been recently
added by Act 36 of 1964, make a substantial departure from the
pre-existing position of the law even under the Central Act.
Section
25-J ( 2)
is more important for our purpose.
It read&
thus:-
"For the removal of doubts, it is hereby declared that
nothing contained in this Chapter shall be deemed to
affect the provisions of any other law for the time being
in force in any State in so far as that law provides for
the settlement of . industrial disputes, but the rights and
liabilities of employers and workmen in so far as they
relate to lay-off and retrenchment shall be determined in
accordance with the provisions of this Chapter".
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HISSAR ELECTY. co. v. u. P. STATE (Gajendragadkar, C.J.) 877
A It is thus clear that the last part of s.