vil Appeal Nos 150 and 160 of 1964
Appeals by special leave from the award dated September 20 1962 of the Industrial Tribunal Ernakulam in Industrial Dispute Nos 11 and 10 of 1962 respectively
761 GB Pai JB Dadachanji OC Mathur and Ravinder Narain for the appellant
MRK Pillai for the respondents
The Judgment of the Court was delivered by Gajendragadkar CJ
The short question of law which these two appeals raise for our decision relates to the construction of sections 3 and 11 of the Kerala Industrial Establishments National and Festival Holidays Act 1958 No 47 of 1958 hereinafter called the Act
That question arises in this way
Two complaints were filed against the appellant the Tam Oil Mills Company Ltd by the two groups of respondents its workmen respectively under section 33A of the 
These applications alleged that the management of the appellant had contravened the provisions of section 33 of the said Act inasmuch as it had denied its employees leave with wages on Founder s Day and Good Friday in 1962
According to the respondents they were entitled to have holidays with pay on the said two days under the terms and cOnditions of service and so they claimed that the Tribunal should direct the appellant to give its employees holidays under the said existing arrangement and should pass other appropriate order s for the payment of wages for the two holidays in question
The appellant disputed the correctness of the respondents  contention
The Tribunal has rejected the appellant s plea and has declared that the respondents are entitled to the privilege of paid holidays on Founder s Day and Good Friday in 1962
It has also ordered that the appellant should pay the wages to the respondents for those two days and the proportionate salary of the staff members as soon as the award comes into force
It is against these orders passed by the Tribunal on the two complaints preferred before it by the respective respondents that the appellant has come to this Court by special leave and on its behalf Mr Pai has contended that in making the award  the Tribunal has misconstrued the effect of sections 3 and 11 of the Act
Standing Order 30 of the Standing Orders of the appellant company makes provision for leave of all categories
SO 30 vi provides for holidays
It lays down that the factory will be closed on the following days which will be considered as Company Holidays with pay and will not be counted against the casual or privilege leave of an employee 1
New Year Day 1st January
Founder s Day Saturday nearest to 3rd March 3
Good 3 Friday 4
Onam 5
Christmas Day 25th December There is a note appended to thisproVision which makes it clear that in the event of the Company being compelled to observe a holiday or holidays for reasons of State such day or days shall not be counted as against the privilege or casual leave of the employees but shall 762 be treated as a Company holiday or holidays
Thus it is clear that under the relevant Standing Order the respondents are entitled to 5 paid holidays every year
After the Standing Orders were framed and certified there was an agreement between the appellant and the respondents  Union as a result of which the appellant agreed to grant a further holiday and  this agreement raised the number of total paid holidays in a year to 6
The additional holiday which the appellant thus agreed to give to the respondents was to be given on the day when the respondents  Union would celebrate its Union Day
Apparently this holiday was analogous to the Founder s Day the idea underlying the agreement being that just as the appellant gave a paid holiday on the Founder s Day the respondents should be given a paid holiday on the Union Day
It appears that even after this agreement was reached the respondents began to claim additional holidays but the appellant was not prepared to make any addition to the list of holidays
It was prepared to leave the choice of the agreed holidays to the employees provided they submitted to the Company an agreed list of such holidays
In 1958 the Act was passed and it came into force on the 29th December 1958
Section 3 of the Act provides Grant of National and Festival Holidays Every employee shall be allowed in each calendar year a holiday of one whole day on the 26th January the 15th August and the 1st May and four other holidays each of one whole day for such festivals as the Inspector may in consultation with the employer and the employees specify in respect of any industrial establishment
The result of this provision was that every employer to whom the Act applied had to declare holidays on the 26th January the 15th August and the 1st May and had to give four other holidays according to the decision of the Inspector the requirement of the section being that the Inspector had to consult the employer and the employees before fixing such other holidays
In other words section 3 statutorily fixed the number of paid holidays at 7 fixed three out of them and left the decision of the remaining four to the Inspector who had to consult the employer and the employees
In pursuance of this provision the Inspector declared certain holidays for the year 1959
Not satisfied with the decision of the Inspector one of the appellant s employees Mr Baskara Menon filed a writ petition in the Kerala High Court under article 226 of the Constitution challenging the validity of the Inspector s decision
In that writ petition the question about the construction of section 3 of the 763 Act was agitated
In the result the High Court held that the complaint made by the petitioner against the validity of the decision of the Inspector was not well founded and so the writ petition was dismissed
In 1962 the appellant followed the same procedure and got a decision as to the festival holidays from the Inspector and declared that the said holidays would be observed as paid holidays in the year
At this time certain industrial disputes were pending between the appellant and its employees belonging both to monthly and daily rated categories before the Industrial Tribunal at Ernakulam
The respondents felt that the declaration of the holidays made by the appellant for the year 1962 amounted to a contravention of section 33 of the  and so they filed the two present complaints before the Industrial Tribunal under 33A of the said Act
That in brief is the genesis of the present complaints
We have already noticed the provisions of section 3 of the Act
The contention raised by the respondents before the Tribunal was that the statutory provision as to 7 paid holidays prescribes the minimum number of holidays which the employer has to give to his employees
This provision according to the respondents does not over ride or abrogate the existing arrangement as to paid holidays
In regard to paid holidays which are common to section 3 and the present arrangement they would of course have to be treated as paid holidays but the four other festival holidays which the Inspector decides from year to year would be in addition to the holidays which the appellant is bound to give to the respondents under the existing arrangement and since the appellant has limited the number of paid holidays to 7 for the year 1962 it has acted contrary to the terms of employment evidenced by the existing arrangement as to paid holidays and that constitutes the violation of section 33 of the 
This contention has been upheld by the Tribunal and Mr Pai argues that the view taken by the Tribunal is plainly inconsistent with the true scope and effect of section 3 read with section 11 of the Act
That takes us to section 11 of the Act because this section has to be read along with section 3 in determining the validity of the conclusion recorded by the Tribunal on the main point of dispute between the parties
section 11 reads thus Rights and privileges under other laws etc not affected Nothing contained in this Act shall adversely affect any rights or privileges which any employee is entitled to with respect to national and
festival holidays on the date on which this Act comes into force under any other law contract custom or usage if such rights or privileges are more favourable to him than those to which he would be entitled under this Act
D5 SCI 10 764 This section gives an option to the employees they can choose to have the paid  holidays either as prescribed by section 3 or as are available to them under any other law contract custom or usage exercising this choice it must however be borne in mind by the employees that the 26th January the 15th August and the 1st May have to be taken as three holidays
That is the direction of section 3
In regard to the remaining 4
the Inspector decides which days should be paid holidays
In other words the
statutory requirement is 7 paid holidays
If under the existing arrangement the employees are entitled to have more than7 paid holidays that right will not be defeated by section 3 because section 11 expressly provides that if the rights or privileges in respect of paid holidays enjoyed by the employees are more favourable than are prescribed by section 3 their existing rights and privileges as to the total number of holidays will not be prejudiced by section 3
The scheme of section 11 thus clearly shows that section 3 is not intended to prescribe a minimum number of paid holidays in addition to the existing ones so that the respondents should be entitled to claim the seven holidays prescribed by section 3 plus the six holidays to which they are entitled under the existing arrangement
If in addition to the three holidays which are compulsory under section 3 the employees are getting say 3  other paid holidays then section 3 would step in and would require the employer to give his employees one more paid holiday so as to make the number of paid holidays 7
In our opinion if sections 3 and 11 are read together there can be no doubt that the respondents  claim that they should have 7 holidays as prescribed by section 3 plus 6 holidays as are available to them under the present arrangement is cleary untenable
In the present case the respondents were having six paid holidayS The statute has fixed the minimum number at 7 paid holidays and so since the existing arrangement was less favourable to the employees the statutory provision will come to their help and they will be entitled to claim 7 paid holidays in a year and that means that section 3 will be operative
If that be so the procedure followed by the employer in consulting the Inspector and in fixing the list of 4 paid holidays for 1962 in addition to the three holidays fixed by the statute is perfectly consistent with the provisions of section 3 of the Act
The Tribunal was therefore in error in holding that the appellant had contravened section 33 of the 
In the result the appeals must be allowed the orders passed by the Tribunal in the two respective complaints set aside and the two complaints dismissed
There would be no order as to costs
Appeals allowed


Summary:
Under the Standing Orders of the appellant company its employees were entitled to five holidays with pay on specified dates during each year
Furthermore by an agreement with the respondents  union the company had agreed to grant an additional day s holiday with pay thus raising the total number of paid annual holidays to six
In 1958 the Kerala Industrial Establishments National and Festival Holidays Act 1958 was passed and section 3 of the Act required every employer to declare holidays on every 26th January 15th August and 1st May and to grant four additional festival holidays each year on dates to be fixed by the Inspector after consulting the employer and the employees
The number of paid holidays was thus statutorily fixed at 7
In 1962 the company obtained the Inspector s decision on the four festival holidays and declared the dates on which such holidays would be given
At that time while an industrial dispute between the company and its employees was pending
the respondents filed applications under section 33A of the  before the Tribunal
It was contended in these applications that the statutory provision in section 3 for 7 paid holidays did not override or abrogate the existing arrangement as to paid holidays and that the holidays to be given under section 3 would be in addition to the holidays which the appellant was bound to give the respondents under existing arrangements and that the appellant s attempt to limit the nUmber of paid holidays to 7 during 1962 was contrary to the terms of employment evidenced by the existing arrangement and therefore violative of section 33
This contention was upheld by the Tribunal
In appeal to this Court HELD Under section 3 the statutory requirement is 7 paid holidays each year
If under an existing arrangement the employees were entitled to more than 7 paid holidays such more favourable right was protected by section 11
The scheme of section 11 clearly shows that section 3 is not intended to prescribe a minimum number of paid holidays in addition to the existing ones and in the present case would operate only to raise the total number of holidays from 6 under the existing arrangements to 7 paid holidays in accordance with section 3
764 B E