# THE PATNA ELECTRIC SUPPLY CO., LTD., PATNA v. THE PATNA ELECTRIC SUPPLY vVORKERS' UNION

- **Citation:** [1959] Supp. 2 S.C.R. 761
- **Court:** Supreme Court of India
- **Decided:** 1956-01-31
- **Case number:** Civil Appeal No. 227 of 1958
- **Bench:** B. P. Sinha, P. B. Gajendragadkar, K. N. Wanchoo
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-patna-electric-supply-co-ltd-patna-v-the-patna-electric-supply-vvorkers-1656
- **Pages:** 16

## Headnote

Industrial Dispute-Housing Jacilities for industrial labour--
Award based on Bihar Government Scheme~Validity.
One of the i terns in dispute referred to the Industrial Tribunal for adjudication, which was the subject matter of this appeal,
related to the demand of the Workers' Union that the appellant
company must provide quarters to its employees in terms of the
Bihar Government Scheme and undertake immediate construction for that purpose. The case of the Company was that the
State and not the employer was primarily responsible for providing quarters to the employees and, in any event, it was not
financially possible for the appellant to undertake the task. The
Tribunal upheld the Union's claim and directed the company to
start construction of at least 15 quarters, as specified by the
Government scheme, within a year. The Labour Appellate Tribunal, on appeal, held that the Government scheme was binding
on the company and upheld the award.
The scheme, on which the award was based, was one prepared by the Industrial Housing sub-Committee appointed by the
Government of Bihar and sanctioned by the Government as
recommended by the Bihar Central (Standing) Labour Advisory
Board. It imposed on the employers the responsibility for housing industrial labour and provided for financial assistance to the
employers by the State Government to the extent of 50% of the
capital required, by way of loan repayable in 25 annual instalments, recoverable, on default, from the properties mortgaged
for the loan or the assets of the debtor. The scheme prescribed
the terms on which the quarters were to be let out to the
employees and specified their size.
It was contended on behalf of the appellant that, the
scheme was not obligatory and could not impose a term of employment for the workmen. For the Union it was argued that
the scheme had materially altered the rule, followed by industrial adjudication in such cases, so far as the State of Bihar was
concerned and had imposed a moral obligation on the appellant.
Neither the Industrial Tribunal nor the Labour Appellate Tribunal in appeal, took the financial position of the company into
consideration where they held that the Scheme did impose a
96
I959
April 23.
I959
The Patna
Electric Suj-1ply
Co , Ltd., Patna
v.
The Patna
Electric Supply
JVorkers' Union
762
SUPREME COURT REPORTS [1959] Supp.
moral obligation on the appellant to provide quarters for its
employees, which \Vas enforceable in industrial adjudication.
Held, that the scheme sanctioned by the Bihar Government was
merely of a recommendatory nature and since it had no statutory
force it could not provide a basis for the direction made by the
a\vard.
Its language sho\ved that it was vague and not intended
io be acted upon anJ so it could not have the effect of intro.
ducing a term of employment as between the employer and the
¥.'Or.k1nen.
Although there could be no doubt that, Industrial Tribunals'
had generally the power and jurisdiction, apart from
any
scheme or agreen1ent bet\veen the parties, in appropriate cases,
to impose new obligations on the employers in the interest of
social justice and for securing peace and co-operation between the
employer and the \VOrkmen, the award in appeal could not be
justified on the merits under the prevailing condition of the
industrial evolution in the country.
H
1 estern India Autu!J'iohile Association v. The Industrial Tribunal, Bombay, A.LR. r949 F.C. rrr, The Bharat Bank Ltd., Delhi v.
The Employees of the Bharat Bank Ltd., Delhi, [1950] S.C.R.
459 and Rohtas Jndu.stries Ltd. v. Brijnandan Pandey, [1956]
S.C.R. 800, referred to.
It was the duty of Industrial Tribunals to take into consideration the interests of national economy and progress and they
were entirely right in taking the view, which they had consistently done, that it would be inexpedient in the present financial
condition of the industries in the country to impose the additional burden of providing housing facilities on them which
should

## Text

(2) S.C.R.
SUPREME COUR'l' REPORTS
761
THE PATNA ELECTRIC SUPPLY CO., LTD.,
PATNA
v.
THE PATNA ELECTRIC SUPPLY vVORKERS'
UNION
(B. P. SINHA, P. B. GAJENDRAGADKAR and
K. N. WANCHOO, JJ.)
Industrial Dispute-Housing Jacilities for industrial labour--
Award based on Bihar Government Scheme~Validity.
One of the i terns in dispute referred to the Industrial Tribunal for adjudication, which was the subject matter of this appeal,
related to the demand of the Workers' Union that the appellant
company must provide quarters to its employees in terms of the
Bihar Government Scheme and undertake immediate construction for that purpose. The case of the Company was that the
State and not the employer was primarily responsible for providing quarters to the employees and, in any event, it was not
financially possible for the appellant to undertake the task. The
Tribunal upheld the Union's claim and directed the company to
start construction of at least 15 quarters, as specified by the
Government scheme, within a year. The Labour Appellate Tribunal, on appeal, held that the Government scheme was binding
on the company and upheld the award.
The scheme, on which the award was based, was one prepared by the Industrial Housing sub-Committee appointed by the
Government of Bihar and sanctioned by the Government as
recommended by the Bihar Central (Standing) Labour Advisory
Board. It imposed on the employers the responsibility for housing industrial labour and provided for financial assistance to the
employers by the State Government to the extent of 50% of the
capital required, by way of loan repayable in 25 annual instalments, recoverable, on default, from the properties mortgaged
for the loan or the assets of the debtor. The scheme prescribed
the terms on which the quarters were to be let out to the
employees and specified their size.
It was contended on behalf of the appellant that, the
scheme was not obligatory and could not impose a term of employment for the workmen. For the Union it was argued that
the scheme had materially altered the rule, followed by industrial adjudication in such cases, so far as the State of Bihar was
concerned and had imposed a moral obligation on the appellant.
Neither the Industrial Tribunal nor the Labour Appellate Tribunal in appeal, took the financial position of the company into
consideration where they held that the Scheme did impose a
96
I959
April 23.
I959
The Patna
Electric Suj-1ply
Co , Ltd., Patna
v.
The Patna
Electric Supply
JVorkers' Union
762
SUPREME COURT REPORTS [1959] Supp.
moral obligation on the appellant to provide quarters for its
employees, which \Vas enforceable in industrial adjudication.
Held, that the scheme sanctioned by the Bihar Government was
merely of a recommendatory nature and since it had no statutory
force it could not provide a basis for the direction made by the
a\vard.
Its language sho\ved that it was vague and not intended
io be acted upon anJ so it could not have the effect of intro.
ducing a term of employment as between the employer and the
¥.'Or.k1nen.
Although there could be no doubt that, Industrial Tribunals'
had generally the power and jurisdiction, apart from
any
scheme or agreen1ent bet\veen the parties, in appropriate cases,
to impose new obligations on the employers in the interest of
social justice and for securing peace and co-operation between the
employer and the \VOrkmen, the award in appeal could not be
justified on the merits under the prevailing condition of the
industrial evolution in the country.
H
1 estern India Autu!J'iohile Association v. The Industrial Tribunal, Bombay, A.LR. r949 F.C. rrr, The Bharat Bank Ltd., Delhi v.
The Employees of the Bharat Bank Ltd., Delhi, [1950] S.C.R.
459 and Rohtas Jndu.stries Ltd. v. Brijnandan Pandey, [1956]
S.C.R. 800, referred to.
It was the duty of Industrial Tribunals to take into consideration the interests of national economy and progress and they
were entirely right in taking the view, which they had consistently done, that it would be inexpedient in the present financial
condition of the industries in the country to impose the additional burden of providing housing facilities on them which
should be the primary responsibility of the State.
Eastern Plywood Manufacturing Co., Ltd. v. Their Workers,
[1949] L.L.J. 29r, Mohamad Rai Akbarali Khan v. The Associated
Cement Companies Ltd., [1953] L.A.C. 677, Samastip"r Central
Sugar Co., Ltd. v. Their Workmen, [1955] 2 L.L.J. 727 and M/s.
National Carbon Co. (India) Ltd. v. National Carbon Co. Mazdoor
Union, Calcu.tta, [r956] L.A.C. 660, approved.
CIVIL APPELLATE JURISDICTION:
Civil Appeal No.
227 of 1958.
Appeal by special leave from the judgment and
order dated January 31, 1956, of the Labour Appellate
Tribunal of India, Calcutta, in Appeals Nos. Cal. 36
and 38 of 1953.
M. C. Setalvad, Attorney-General for India and
Na unit Lal, for the appellant.
P. K. Chatterjee, for the respondents.
1959. April 23. The Judgment of the Court was
delivered by
(2) S.C.R. SUPREME COURT REPORTS
763
GAJENDRAGADKAR, J.-This appeal by special leave
r959
arises out of an industrial dispute between the Patna
The Patna
Electric Supply Co., Ltd., (hereafter called the appelElectric supply
]ant) and· its workmen represented by the Patna Elec- c
Ltd
p
o,
.,
at11a
_ tric Supply Workers' Union (hereafter called the
v.
respondent). The appellant is a public company incorThe Patna ·
porated under the Indian Companies Act and has its Electric Supply
d
1
Workers' Union
registered office at Patna. It is an in ustria establish_
ment' engaged solely in public utility service, namely, Gajendragadkar J.
the supply of electricity for the requirements of the
public and is a licensee under the provisions of the
Electric Supply Act, 1948 (54 of 1948). On March 29,
1952, the Government of Bihar, by a notification
issued under s. 7 read with s. 10(1) of the Industrial
Disputes Act, ffi47 (14 of 1947) (hereafter called the
AcL) referred twelve items of dispute for adjudication
to the Industrial Tribunal consisting of Mr. H. K.
Chaudhuri as the sole member. Out of the said items
the present appeal is concerned with only one; and it
relates to "the housing facilities to the workmen and
principle of allotment of quarters to them ". The
respondent had put forward a demand that the appellant should provide houses to its employees and should
undertake the construction of quarters immediately in
that behalf. The respondent's case was that the appellant was bound to provide quarters to its em ployces
and let out the same to them according to the Bihar
Government scheme. The appellant denied its liability
to make any housing provision for its employees and
that gave rise to the industrial dispute.
The appellant urged before the tribunal that the
housing facilities and allotment of quarters to workmen was the primary responsibility of the State and
not of the employer; and it alleged that in any event
it was financially not possible for the appellant to
undertake the task.
The appellant had also contended that it had to function within the limits prescribed
by the Electricity Supply Act, 1948, and that the
relevant provisions of the said Act would not permit
the appellant to undertake any expenditure to meet
the respondent's demand.
On March 9, 1953, the tribunal upheld the respondent's claim and by its award it directed the appellant
764
SUPREME COURT REPORTS
[1959] Supp.
'959
to start construction of at least 15 quarters according
Th P
to the specifications laid down in the Government
Elect;;, ;~":rzy sch~me within one year from the date of the publicaCo.,.Ltd., Patna catIOn of the award.
·
v.
This part of-the award was challenged by the appel- •
The Patna
!ant before the Labour Appellate Tribunal; but the
Electric Supply appellate tribunal was not imp· ressed by the appelWorkers' Union !ant's pleas and so it dismissed the.appeal on January
Gajendrngadkar J. 31, 1956. It agreed with the tribunal in holding that
the scheme sanctioned by the Bihar Government was
binding on the appellant and it saw no substance in
the appellant's contention that expenditure involved
in the construction of the quarters would be inadmissible under the Electricity Act.
The appellant then applied for, and-obtained, special
leave from this Court on September 17, 1956. That is
·bow this appeal has come to this Court, and the only
question which it raises for our decision is whether the
direction issued by the award calling upon. the appellant to start the construction of at least 15 quarters is
justified or not.
· It is true that the appellant bas provided housing
facilities for some members of its staff. It appears that
17 employees out of 183 in the Power Station, 146 out
of 329 in the Mains Department, and I out of 58 in
the General Department have been provided by th!l
appellant with free quarters, whereas one employee in
the Mains Department is granted honse allowance at
12~% in lieu of a house.
But this arrangement is a
matter of the appellant's choice and volition; and it
cannot be made an obligation and thus virtually a
term of employment; that is the appellant's case.
On the other band, the respondent's contention is
that the Bihar Government scheme of industrial
housing has now been finalised and it imposes upon
the appellant an obligation to provide housing facilities
for all its employees. It is not seriously disputed by
the respondent that the industrial adjudication has so
far consistently held that providing housing facilities
for industrial labour is the primary responsibility of
the State; but the argument is that the scheme formulated by the Industrial Housing Sub,Committee in
(2) S.C.l~. 8Ul'l{,EME UOUH,T HEl'OH.TS
765
•
Bihar bas materially altered the position so far as the
1 959
State of Bihar is concerned. It is this argument which
The Patna
has been accepted by the tribunals below. They have Electric supply
held that the scheme sanctioned by the Bihar Govern- co, Ltd., Patna
ment on the recommendation of the Industrial Housing
v.
Sub-Committee, though recommendatory in character,
The Patna
imposes a moral obligation on the employer to provide Electric Supply
Workers' Union
housing for his employees, and in industrial adjudica__
lion this moral obligation can be enforced against it. Gajendragadkar J.
It is this conclusion which must first be examined.
It appears that in March 1938 the Government of
Bihar had set up a Committee known as the Bihar
Labour Enquiry Committee under the Chairmanship
of Dr. Rajendra Prasad for the purpose of enquiring
into the conditions of industrial labour in the State and
for making such recommendations as might appear
practicable with the object of improving the level of
wages and conditions of work of industrial workers.
This Committee submitted its report to Government in
April 1940. It had suggested that housing on an
adequate scale should be made a statutory obligation
of the employer but the extent to which the industry
could be required to fulfil such an obligation should be
determined by the State Government after careful
investigation into its financial condition. No action
was, however, taken on this recommendation by the
State Government.
Subsequently the Bihar Government appointed the
Industrial Housing Sub-Committee cm the recommendation of the Bibar Central (Standing) Labour
Advisory Board and this Sub-Committee submitted its
report on December 16, 1948, recommending the
setting up of an industrial housing board for formulating certain schemes for housing industrial workers.
The matter was then considered by the Bihar Central
(Standing) Labour Advisory Board on :February II,
1950, and the Board asked the Industrial Housing
Sub-Committee to re-examine the question further and
make specific recommendations. Accordingly the Sub.
Committee reconsidered the matter and made its final
recommendations on August 17, 1950.
These recommendations were considered by the Bihar Central
•
•
r959
The l'alna
Electric Supply
Co, Ltd., l)atna
766
SUPREME COURT REPOitTS [1959] Supp.
(Standing) Labour Advisory Board in September 1950
and they were adopted by it with slight modifications.
This scheme was finally sanctioned by the State
Government.
Under this scheme the responsibility for housing inThe Patna
dustrial labour is placed on the shoulders of the emElecl•ic supply 1ilo,-ers.
To begin with the scheme was intended to
Workers' Union
.J
v.
be applicable only to factories registered under FactoGajendragadkar J. ries Act, 1948. lt provides for financial assistance by
State Government to the employer on terms and conditions specified in it. It appears that under para. 4
of the scheme the State Government may give loan to
the employer to the extent of 50% of the capital
required for industrial housing and that the loan
would carry interest at 3% per annum. The remaining 50% of the capital is to be provided for by the
employer. The amount granted as a loan together
with interest thereon bas to be repaid by the employer
in 25 annual instalments of equal amount on the dates
fixed for such repayment. There is also a default
clause which enables the State Government to recover
the amount due from the properties mortgaged to the
State Government for the loan or from other assets of
the borrower. The scheme prescribes the terms on
which the quarters when built should be let out to the
employees. and it lays down the standard size and
other specifications of the quarters. The respondent's
contention is that since this scheme has been sanctioned by the State Government it imposes on the employers in the State of Bihar a moral obligation to
implement it and industrial adjudication can give effect
to the scheme by issuing appropriate directions by
their awards; this contention has been accepted by
the tribunals below.
\Ve do not think that the scheme in question can
justify the direction issued by the award under appeal.
It is clear that though the original Bihar Labour
Enquiry Committee had recommended to the State
Government that housing on an adequate scale should
be made a statutory obligation of the employer, the
State Government has so far taken no action on this
recommendation. It is common ground that the State
(2) S.C.R.
SUPREME COURT REPORTS
767
Legislature has passed no legislation imposing statur959
, tory obligation on the employer to provide for housing
The ratna
_on an adequate scale to his employees. The scheme Electric supply
in question on which the respondent relies has no co., Ltd., Patna
statutory force. It merely approves of the recomv.
mendations made by the Bibar Central (Standing)
The. Patna
Labour Advisory Board and the only liability which Etectnc ,supply
Workers Union
the State Government has purported to undertake by
_
.
sanctioning the scheme is to agree to afford partial Gajendragadkar J.
financial assistance to the employers on the terms and
conditions specified in it. In other words, if any industrial employer wants to provide housing facilities
for his employees he may be able to ask for financial
assistance from the State Government and the State
Government may afford such assistance under the
scheme; but that is a very .different matter. It may
be conceded that in a large majority of cases industrial
labour is very badly in need of housing accommodation, and it would, therefore, be desirable that such
facilities should be afforded to labour either by the
State or if possible by the employer or by both of them
acting together in co-operation; but we do not see how
the present scheme which no doubt is laudable in its
object can afford any valid basis for issuing directions
against the appellant calling upon it to construct
quarters for its workmen as the award purports to do.
It appears that both the tribunals assumed that the
scheme in question had been adopted with the consent
of the appellant and as such the appellant was bo.und
by it.
This assumption is clearly unjustified.
No
partner of the appellant was a member of the Committee and Mr. Chandra, the appellant's Labour
Adviser was not its member in 1950 but became one in
1952.
Mr. Chandra is a Labour Adviser of other companies as well and so it would be difficult to accept the
argument that even after be became a member in 1952
he could represent the appellant in the legal sense so
as to bind it by his consent; but apart from this
aspect of the matter, even Mr. Chandra was not a
member in 1950 when the scheme was adopted. It is
true that some representatives of industrial employers
were nominated by the State Government as members
768
SUPREME COURT REPORTS (1959] Supp.
7 959
of the Committee; but that would not jnstify the
assumption that the scheme adopted by the ComThe Patna
Electric supply mittee and sanctioned by the Government is binding
co., Ltd, Patna on the appellant. It is significant that even the scheme
v.
lays down tha,t providing housing accommodation to
The Patna
the lowest paid workers is mainly the responsibilit.y of
Elec"ic Supply the employers and that the State Government could
Workers' Union
_
only help the employers by giving them aid in the
Gajendragadl<ar J. form of loan and in the matter of acquisition of land.
The scheme is thus merely recommendatory and the
use of the word "mainly" shows that it is vague and
cannot be, and was not expected to be, enforced as it
stands. It is clear that tribunals cannot call upon the
Governm'ent to advance a loan ·to the employers
whenever they pass awards calling upon the employers
to start the construction of quarters for their employees; so that if Government takes time to sanction
the required loan, or, owing to its own difficulties, it is
unable to sanction it, the employer would be exposed
to the risk oft.he penalties arising out of his failure to
comply with the award; and that only serves to emphasise that the problem must be tackled by the
employers and the State in co-operation with each
other and cannot at present at least be treated as a
subject-matter of an award .. We are, therefore, satisfied that the scheme in question which is the sole basis
for the award cannot have the effect of introducing a
term of employment between the appellant and its
workmen in regard to housing facilities.
We may incidentally point out that if the present
award is upheld it would give rise to similar demands
from employees in other allied or similar industries in
Bihar; and if such demands are upheld it would inevitably impose a very large burden on the employers
and that may materially affect the industrial progress
of the State of Bihar. It is necessary to emphasise
that, in considering the claims of workmen sympathetically on the ground of social and economic
justice, industrial adjudication has to bear in mind the
interests of national economy and progress which are
relevant and material. We must, therefore, hold that
the award under appeal cannot be sustained on the
(2) S.O.R.
SUPREME COURT REPORTS
769
basis of· the scheme sanctioned by the Bihar Governz959
ment.
It lias, however, been urged before us on behalf of ElTht •. P5atna 1
d
h
h . d
ec ric . upp y
the respon ent that, apart from t e scheme, t em us- co .. Ltd, Patna
trial tribunal has jurisdiction to make an award
"·
calling upon the appellant to provide housing accomThe Patna
modation for its employees. The argument is that, Electric Supply
unlike commercial arbitration, industrial arbitration Workers' Union
may, and often does, involve the making of a new con- G . nd agadilar 1
tract or the imposition of new obligations on the aJe
r
•
employer in the interests of social justice; and having
regard to the fact that the employees are very badly
in need of housing accommodation it was open to the
tribunal in the present case to have directed the appellant to make a beginning in that direction by providing
housing .accommodation to some of its employees. In
support of this argument the respondent has relied
upon the oft-quoted observation of Ludwig Teller that
"Industrial arbitration may involve the extension qf
an existing agreement or the making of a new one, or,
in general, the creation of new obligations or modification of old ones while commercial arbitration generally
concerns itself with interpretation of existing obligations and disputes relating to existing agreements "(1).
There is no doubt that in appropriate cases industrial
adjudication may impose new obligations on the employer in the interest of social justice and with the
object of securing peace and harmony between the
employer and his workmen and full co-operation
between them. This view about the jurisdiction and
power of the industrial tribunals has been consistently
recognised in this country since the decision of the
Federal Court in Western India Automobile Association
v. The Industrial Tribunal, Bombay (2).
In that case
the employer had chall.<:Jnged the jurisdiction of the
industrial tribunal to direct the reinstatement of his
employees ; and it was urged that such a direction was
contrary to the known principles which govern the
(r) Ludwig Teller's" Labour Disputes & Collective Bargaining", Vol. J,
p. 536.
{z) A.LR. 1949 F.C. III, 120.
97
770
SU:PREME COURT REPORTS [1959] Supp.
I959
relationship between master and servant and was out.
Th' Patna
side the jurisdiction of the tribunal. This contention
El<ctdc supply was negatived by the :Federal Court, and it was
co., Ud., Patna observed that industrial adjudication does not mean
v.
The Patna
Electric Supply
Workers' Union
adjudication according to the strict law of master and
servant. "The award of the tribunal", observed
Mahajan, J., in delivering the judgment of the Court,
" may contain provisions for the settlement of a disGaj,ndragadkar ;. pute which no Court could order if it was bound by
ordinary law, but the tribunal is not fettered in any
way by these limitations". The same view has been
more emphatically expressed by Mukherjea, J., in The
Bharat Bank Ltd., Delhi v. The Employees of the Bharat
Bank Ltd., Delhi (1 ). "In settling the disputes between
the employers and the workmen", observed the learned
Judge, "the function of the tribunal is not confined to
administration of justice in accordance' with law. It
can confer rights and privileges on either party which
it considers reasonable and proper, though they may
not be within the terms of any existing agreement. It
has not merely to interpret or to give effect to the
contractual rights and obligations of the parties. It
can create new rights and obligations between them
which it considers essential for keeping industrial
peace". In Rohtas Industries Ltd. v. Brijnandan
Pandey('), Mr. Justice S. K. Das has expressed the
same conclusion ~en he observed that "a court of
law proceeds on the footing that no power exists in the
courts to make contracts for people; and the parties
must make their own contracts. The courts reach
their limit of power when they enforce contracts which
the parties have made.
An Industrial Tribunal is not
so fettered and may create new obligations or modify
contracts in the interests of industrial peace, to protect
legitimate trade union activities and to prevent unfair
practice or victimisation". Thus there can be no
doubt that an industrial tribunal has jurisdiction to
make a proper and a reasonable order in any industrial dispute; and in that sense the respondent may be
right when it contends that it was within the competence of the tribunals below to entertain its
(I) [1956] S C.R. 459, 513.
(z) [1956] s.c.R. 800, 810.
(2) S.C.R. SUPREME COURT REPORTS
771
grievance about housing accommodation and to give
it appropriate relief in that behalf.
1959
The Patna
Eiectric Supply
Co., Ltd., Patna
v.
But assuming that the tribunal had jurisdiction to
entertain the dispute, the question still remains whether, apart from the agreement on which the tribunals
have based their decision, the award under appeal
The Patna
can be 1·ustified on general grounds. In our opinion,
Electric supply
Workers' Union
under the present conditions the answer to this question has to be in favour of the appellant and against Gajendragadkar ].
the respondent. Industrial tribunals have consistently
taken the view that housing accommodation of industrial labour is the primary responsibility of the State ;
and there has also been no difference of opinion on the
point that in the present economic condition of our
industries it would be inexpedient to impose on the
employers the obligation to provide housing accommodation for their employees. Besides a scheme of wages
properly fixed necessarily takes into account house
rent amongst other relevant facts; and under a proper scheme of dearness allowance adjustments can be
made when necessary from time to time so as to take
into account an appreciable rise in the rents which
industrial labour m~y have to pay. That is why
usually tribunals do not entertain employees' claim
for housing and do not even allow a separate demand
for house allowance as such. This position is not disputed before us by the respondent.
We may, liowever, refer to a few typical decisions
of the Industrial Tribunals on this point. In Eastern
Plywood Manufacturing Co., Ltd., And Their Workers (1)
the Industrial Tribunal rejected the workmen's claim
for housing accommodation or in the alternative for
house rent allowance of Rs. 10 per month on the
ground that the obligation for housing labour in an
urban area is not really on the employer, and that the
tribunal had already considered in the issues on basic
pay and dearness allowance as to how much the company should be directed to pay in emolument~ to its
workmen. The tribunal thought that it woulrl not be
reasonable to saddle the company with any further
financial commitments in the shape of house rent
allowance.
(1) [1949] L.L.J. 291,
772
SUPREME COUR.T REPORTS [1959] Supp. ,
.
x9s9
In Mahomad Rai Akbarali Khan v . . The Associated
The Patna
Cement· Companies Ltd. (1), the Labohr Appellate Tri-
, Elect.ic supply bmial has considered this problem. It was urged by
Co., Lid., Patna the employees before the appellate tribunal that the
v.
employers should either provide quarters or pay house
EI Th•. P5atnpopl
rent allowance, whereas the company contended that
"t"' u
Y
·
t th r
·
f h
·d
Workers' Union rt was no
e unct10n o t e management to prov1 e
accommodation for its employees. The appellate triGajmdragodkar J. bunal, however, took the view that the emplqyers'
contention should be accepted subject to considerable
qualifications in certain cases; and it proceeded to
consider the special features of the problem presented
by the employers' factory at .Sevalia. Sevalia was a
village until the employer went there to start its factory which needed the services of' a large contingent
of workers. "When an industrial concern like this";
observed the appellate tribunal, "bursts upon a rural
area there is a very considerable impact on its economy. The inhabitants nearby join the factory as well
as those living further away; there is also an influx of
persons from outside; in short it means that accommodation becomes scarce and expensive; and if a
workman has to go further afield for his accommodation he is put to considerable physical fatigue and
inconvenience. In such circumstances it has not been
the policy of the tribunals to ignore a claim for house
rent allowance". After making these observations,
the appellate tribunal proceeded to readjust the dearness allowance payable to the employees after taking
into account the increased house rent which they had
to pay for their housing accommodation in Sevalia ;
and having thus readjusted the dearness allowance
the appellate tribunal held that no separate order as
to house rent .allowance was necessary. It appears
that in that,case the industrial tribunal had taken the
view that the problem was not likely to be solved by
granting house rent allowance to the employees and
that the only practical course, therefore, was that the
company should either help the workers in building
their houses or that the company itself should construct quarters. That is why it bad rejected the
(1) [1953] L.A.C. 677.
(2) S.C.R. SUPREME COURT REPORTS
773
employees' demand for house rent allowance but had
r959
recommended to the concern to undertake building
The Patna
operations. The Labour Appellate Tribunal reversed ElectriC supply
this conclusion and took a more practical and a wiser co., Ltd., Patna
course by readjusting the dearness allowance so as to
v.
grant adequate relief to the employees in that behalf.
The Patna
It would thus be seen that even where the employer wElecktric ,
5uup~ly
h d
d ·
f
11
·11
l.k S
i·
or ers
nion
a starte its actory at a sma v1 age i e
eva 1a
_
the appellate tribunal did not accept the employees' Gajendragadkar ].
demand for housing accommodation and did not also
think it proper to ask the employer to pay to its employees any separate special house rent allowance.
In Samastipur Central Sugar Go., Ltd., And Their
Workmen (1)
the Labour Appellate Tribunal had
occasion to consider this question once again. In
dealing with the merits of the problem, it accepted the
decision of the Appellate Tribunal in Mahomad Rai
Akbarali Khan v. The Associated Cement Go. Ltd. {2),
••
and observed that "where the basic wage and dearness allowance are consolidated, house rent at the
normal time and the subsequent rise must be presumed to have been taken into ·account when the total
consolidated amount was fixed".
The same view was taken by the Labour Appellate
Tribunal in 11Iessrs. National Carbon Go. (India) Ltd. v.
National Carbon Go., M azdoor Union, Calcutta (3).
In
that case the tribunal had directed the employer to
pay his workmen house rent allowance because it had
taken the view that in making the said order it was
granting a relief lesser than granting free quarters
which the employees had claimed and that the lesser
was involved in the greater relief and could be granted by it. On the evidence adduced in the said proceedings the Labour Appellate Tribunal did not agree
with this view. It held that "provision for free
quarters by constructing houses cannot permit of
comparison with payment of house rent allowance in
money month after month to determine which is
greater and which is smaller than the relief of providing free quarters".
On this view the Labour
(1) [1955] II L.L.J. 727, 730.
(2) [1953] L.A C. 677.
(8) [1956] L.A.C. 660.
774
SUPREME COURT REPORTS [1959] Supp.
'959
Appellate Tribunal came to the conclusion that the
tribunal had no J
0 Urisdiction to award house rent
The Patna
Ekctdc supply allowance when the dispute referred to it for adjudicaCo., Ltd .. Patna tion was about free quarters.
v.
It is thus clear that industrial tribunals have conn, Patna
sistently refused to entertain a claim for housing
Elect>ic supply accommotlation or for the grant of a special and sepaWorkers' Union
__
rate housing allowance against their employers. That
Gajendrngadka, J. is why in making the award under appeal the tribu,
nals below were at pains to emphasise the fact that
the scheme sanctioned by the Bihar Government
made the position substantially different so far as
Bihar was concerned.
The problem of housing industrial labour has been
the subject-matter of some legislative enactments.
As
regards the workers employed in Plantations, the
Plantations Labour Act, 1951 (69 of 1951), provides
that it shall be the duty of every employer to construct and maintain for every worker and his family
residing in the plantation necessary housing accommodation subject to the other provisions of the Act.
Housing Boards have also been established in different
States to tackle the larger problem of housing in
general.
The Bombay Housing Board Act, 1948
(Born. 69 of 1948), the Mysore Labour Housing Act,
1949 (Mys. 28 of 1949), the Madhya Pradesh Housing
Board Act, 1950 (Madhya Pradesh 43 of 1950), the
Hyderabad Labour Housing Act, 1952 (Hyd. 36 of
1952), the Saurashtra Housing Act, 1954 (Saurashtra
32 of 1954) and the U. P. Industrial Housing Act,
1 1955 (U. P. 32 of 1955), are attempts made by the respective States to nieet their responsibility in the
matter of providing housing accommodation to its
citizens in general and to industrial labour in particular.
This problem appears to have been considered by
the Planning Commission in its report on the Second
Five Year Plan. Chapter 26 of the re.port deals with
the general problem of housing and ch. 27 deals with
labour policy and programmes. The discussion of the
problem in these two chapters shows that housing
shortage can be conquered only by sustained ;:ind well
(2) S.C.R. SUPREME COURT REPORTS
775
planned efforts made by the States and the industry
together. It is a very big problem and involves the
expenditure of a huge amount. Efforts are being
made by the Central Government to invite the co-opeI959
The Patna
Electric Supply
Co, Ltd., Patna
ration of industrial employers to tackle this problem
v.
with the progressively increasing financial and other El~~;icP;~;~ly
assistance offered by the State Governments. But it Wotkers' Union
is obvious that this problem cannot at present be
tackled in isolation by industrial tribunals in dealing Gajend1agadkar J.
with housing demands made by employees in individual cases. In the present economic condition of our
industries it would be inexpedient to impose this additional burden on the employers. Such an imposition
may retard the progress of our industrial development
and production and thereby prejudicially affect the
national economy.
Besides such an imposition on
the employers would ultimately be passed by them to
the consumers and that may result in an increase in
prices which is not desirable from a national point of
view. It is true that the concept of social justice is
not static and may expand with the growth and prosperity of our industries and a rise in our production and
national income; but so far as the present state of our
national economy, and the general financial condition
of our industry are concerned it would be undesirable
to think of introducing such an obligation on the employers today. That is why we think the industrial
tribunals have very wisely refused to entertain pleas
for housing accommodation made by workmen from
time to time against their employers.
In the present case it is clear that the question
about the financial ability of the appellant to meet
the additional burden imposed by the award has not
been considered at all. In fact the Tribunals below
seem to have taken the view that since the appellant
is bound by the scheme it is immaterial, if not irrele-
- vant, to enquire whether the appellant would be able
to meet the expenses involved in the construction of
quarters as directed by the award. It is obvious that
such a view proceeds on purely theoretical considerations wh~ have no relation to existing facts in regard
to the financial position of the industry or the state of
I959
The T'atna
Electric Supfly
Co., Ltd., Patna
v.
The Patna
776
SUPREME COURT REPORTS [1959) Supp.
national economy. In fairness to the Tribunals we
ought to add that if the tribunals had not taken an
erroneous view about the effect of the scheme sanctioned by the Bihar Government they would not have
granted the demand made by the respondent for
housing accommodation. Since we hold that on the
Elecfric supply merits the award cannot be sustained we do not think
Workers' Union it is necessary to consider whether the expenditure
Gajcndragadkar J. involved in the construction of quarters would be
admissible under the relevant provisions of the Electricity Act.
1959
April 23.
The result is the appeal succeeds and the award
under appeal is set aside. , In the circumstances of
this case we think it would be fair that the parties
should bear their own costs.
Appeal allowed.
DIN DAYAL SHARMA
v.
THE STATE OF UTTAR PRADESH
(JAFER !MAM and J. L. KAPUR, JJ.)
Criminal Trial-Bribery and criminal miscond14ct-Accused
committed to Court of Session-Law amended making such cases
triable by Special Judge-Sessions Judge, if has jurisdiction to continue trial·-Investigation by officer below Deputy Superintendent of
Police-Whether trial vi(iated-Prevention of Corruption Act, I947
(II of Ig47), s. 5-A-Criminal Law (Amendment) Act, I952 (46 of
I952), S. IO.
.
The appellant was committed to the Court of Session for trial
of offences under s. 5(2) Prevention of Corruption Act, 1947 and
s. r6r Indian Penal Code. Shortly thereafter, the Criminal Law
(Amendment) Act, 1952 came into force.
An Assistant Sessions
Judge tried the appellant aud convicted him of the offences
charged. The appellant contended that the trial was vitiated as
the investigation had been mad~ by a police officer below the
rank of Deputy Superintendent of Police and that the Assistant
Sessions Judge had no jurisdiction to try the case as it was triable by a Special Judge.
"f<
Held that, the Assistant Sessions Judge had jurisdiction to