ivil Appeal No 1929 of 1990
619 From the Judgment and Order dated 2971988 of the Central Administrative Tribunal Madras in Transferred Appli cation No 244 of 1987
Ambrish Kumar for the Appellant
Anil Dev Singh RB Misra and Ms Sushma Suri for the Respondents
J Special leave granted
The workmen of the Ordinance Clothing Factory Avadi Madras are represented by the petitionerappellant Union
The workers of the factory are divided into two categories namely i day workers and ii piece rated workers
The day workers are paid wages in the time scale of Rs260 400 on the basis of their actual attendance whereas the piece rated workers are paid on actual out put or production calculated on the basis of time required for making the item by multiplying the same by the hourly rate worked out by dividing the mean of the time scale by monthly working hours eg Rs330  195 hours  Rs169 Rs330 being the mean of the time scale of Rs260 400 and 195 hours being the total monthly hours
The appellant Union contends that the daily normal working hours of the workmen are 8 during the week except on Saturdays when the working hours are 4 34 only
Thus the total working hours during the week comes to 44 34 hours
If the piece rated workers are required to work beyond the aforesaid normal working hours they are entitled to overtime wages under section 59 of the 
That section in so far as is relevant reads as under Section 591  Where a worker works in a factory for more than nine hours in any day or for more than fortyeight hours in any week he shall in respect of overtime work be entitled to wages at the rate of twice his ordinary rate of wages
 This sub section postulates payment of extra wages at twice the ordinary rate of wages for those workers of the factory who are required to work for more than 9 hours in a day or for more than 48 hours in a week
The appellant union filed a Writ Petition No 2356 of 1985 in the 620 High Court of Madras praying for an appropriate writ or direction to the respondents to pay the piece rated workers extra or overtime wages at the rate prescribed by section 591 if the total working hours of any workman exceeded 44 34 hours in a week
The appellant union contended that the piece rate system was introduced sometime in 1963 and since then the piece rate workers were paid overtime wages accordingly for work done beyond the normal working hours but the same was abruptly discontinued from 1983 so much so that they were even denied the wage at the normal rate for work done beyond 44 34 hours and upto 48 hours ie 3 14 hours
It is however admitted that if the workmen are required to work beyond 48 hours in a week they are paid extra wages in accordance with section 591 of the Facto ries Act
Thus the controversy is in respect of the rate at which piece rate workers should be paid wages for the work put in between 44 34 and 48 hours in a week
The workers claim they are entitled to extra wages for these 3 V4 hours at double the normal rate in accordance with section 591 of the 
In support reliance is placed on the Ministry of Defence letter No F 8556DCiv
II dated 1st September 1959 which inter alia provides that in all cases where overtime pay is admissible to civilian person nel both under the provisions of the and Departmental Rules the overtime pay should be calculated as under i For work in excess of normal working hours and upto 9 hours on any day or 48 hours in a week overtime will be paid at the rate prescribed in the departmental rules
For calculation of overtime pay under this item only basic pay and Dearness allowance shall be taken into account
2 For work in excess of 9 hours on any day or 48 hours in a week overtime will be paid at the rates prescribed in the 
For calculating overtime pay under this item total pay including all allowances will be taken into account
By a subsequently communication dated 13th February 1963 the Ministry clarified that having regard to the revision of piece work rates effected in the Ordinance Factories co relating them to the monthly scales of pay sanctioned by the Ministry s letter dated 16th January 1954 the distinction between High Paid and Low Paid piece workers stood abolished and keeping in mind the Ministry s letter dated 1st Septem ber 1959 the President was pleased to sanction the follow ing methods of calculation and payment of overtime to piece rate workers 621 i Piece workers under P  A Regulations Part I 1923
a No overtime will be admissible for working overtime in the day shift
But for the purposes of distribution of PW profits the time wages element in respect of overtime upto 9 hours per day or 48 hours a week will be determined at the rate of P200 per hours where P  represents the monthly basic pay and dearness pay where admissible
b An extra 12 hour pay calculated at the hourly rate of 1200 of the monthly basic pay or the monthly basic pay and dearness pay where admissible for every hour of systematic overtime worked on the night shifts in addition to their piece work earnings
ii Piece workers under the For each hour of overtime in excess of 9 hours on any day or 48 hours in a week a piece worker will be 1200 of the monthly basic pay plus 25 of basic pay plus twice all allowances
In other words if P  represents the monthly basic pay and D  stands for all allowances such as dearness allowance house rent allowance compensatory city allow ance overtime for each hour will be P200  14P200 2D200
This order was directed to take effect from 1st March 1954
Thereafter by a corrigendum issued on 21st October 1965 sub paragraph 1 of the Ministry s letter of 1st September 1959 was directed to be substituted wef
2nd July 1965 by the following 1
For work in excess of normal working hours and upto 9 hours on any day or 48 hours in a week overtime will be paid at the rate prescribed in the departmental rules
For calculating overtime pay under this item basic pay dear ness allowance special pay personal pay pension to the extent taken into account for the fixation of pay in the case of re employed pensioner and city compensatory allow ance shall be taken into account
House Rent Allowance conveyance allowance traveling and daily allowances permanent travelling allowance clothing allowance uniform allowance washing allowance and children education allow ance shall not be included
 622 But by a Circular No 1823LB dated 2nd February 1983 it was stated that orders had since been received from the Ordinance Factory Board to stop payment of Departmental Overtime when piece workers work beyond normal working hours and upto 9 hours a day or 48 hours a week 
It was further clarified that they would be entitled to piece work earnings only for the period they work extra hours
Thus the payment of departmental overtime for January 1983 in February 1983 was stopped
However with regard to workmen of the Ordi nance Factories and other industrial establishments under the Defence Ministry governed by the  it was laid down by the communication dated 11th September 1987 that such workmen shall be entitled to overtime allowance at time rate for work done in excess of prescribed hours and upto 48 hours a week in accordance with Ministry s OM dated 25th June 1983 but it was clarified that the time rate of wages will be calculated with reference to pay in the revised scale wef
the date the worker has been brought on the revised scale introduced from 1st January 1986
In the light of the above the appellant union con tends that as the prescribed hours of work were 44 34 hours per week the workmen were entitled to overtime wage or allowance for work done beyond 44 34 hours and upto 48 hours a week at double the ordinary rates which has been wrongly and illegally discontinued
The case set up by the respondents is that the workers of the petitionerappellant union are mostly doing tailoring work stitching uniforms tents parachutes covers etc
 in the Ordinance Clothing Factory a Govt
of India Undertak ing and are paid wages on piece rate basis
It is submitted that while fixing the piece work rate the labour involved in the production of each article is analysed in detail and the basic time is determined to which 25 incentive is added and the wage is paid on the basis of time so calculated by taking the arithmatic mean of the scale to which the worker belongs and dividing the same by the figure 195 representing the number of standard hours for a month
Thus if a piece worker completes his job allotted to him he would earn his basic time wage plus an extra 25 as incentive
It is fur ther stated that the payment of overtime wages for the work done beyond the normal working hours of 44 34 and upto 48 hours in a week is regulated by the Departmental Rules and for the period exceeding 48 hours in a week or 9 hours on a single day is regulated as per the requirements of the 
According to the respondents the Defence Ministry letter of 1st September 1959 as amended by the corrigendum of 21st October 1965 does not apply to piece workers but their case in regard to the grant of overtime payment is governed by 623 the Defence Ministry letter dated 13th February 1983 as amended by the Corrigendum of 18th January 1970
In fact the former letters apply to day workers who are paid wages on the basis of attendance
Thus according to the respondents piece workers are not entitled to overtime wages at double the rate for work done in excess of 44 34 hours upto 48 hours in a week because they are entitled to piece work profit in the form of earning which is included in their wage structure itself to compensate them for the extra working hours upto 48 hours in a week
Yet on account of a mistake such payment was made till December 1982 but when it came to light the same was discontinued by the Circular letter dated 2nd February 1983
This discontinuance was challenged in Writ Petition No 1009583 in the Madras High Court which was repelled by Mohan J by his order dated 6th December 1983
The appeal filed against the decision of Mohan J was still pending in the High Court when the proceedings giving rise to this appeal were initiated by this Union
Lastly it is pointed out that according to the terms of section 59 of the  the question of payment of overtime at double the rate can arise any if the piece worker has worked for more than 9 hours per day or 48 hours per week and not to cases of the present type
The respondents therefore pray that the present appeal is not maintainable and deserves to be dismissed
In the rejoinder filed on behalf of the appellant union it is contended that the 25 incentive is not to compensate for overtime work beyond 44 34 hours and upto 48 hours in a week but is a measure to provide for rest intervals minor mechanical breakdowns tools sharpening or grinding or hold ups for want of raw materials etc to arrive at the operational time for production of an item
The appellant therefore contends that the contention that the letters dated 1st September 1959 and 12th October 1969 applied only to the monthly rated day workers is misconceived
This is apparent from the subsequent letter dated 13th February 1963 as amended by the corrigendum of 18th January 1970
Therefore according to the appellants the contention that piece work profit is incorporated in the wage structure applicable to piece rated workers is not correct and clearly manifests that the discontinuance of overtime is based on a wrong understanding of the relevant orders
In support strong reliance is placed on this Court s decision in Union of India vs
GH Kokil Lastly it is contended that the respondents were not justified in abrupt ly discontinuing the grant of overtime wages on the pretext of a so called mistake  and their action in so doing is clearly high handed amounting to unfair labour practice not expected from a governmental 624 undertaking
It is also contended that the circular letter of 2nd February 1983 is a document of doubtful origin and can not in any case override the prior orders contained in the letters of the Ministry of Defence earlier referred to
The appellants therefore contend that the impugned deci sion needs to be set aside and the overtime payments which have been unilaterally and arbitrarily discontinued re stored
From the above resume it is clear that the controversy is limited to the question of non payment of overtime wages for work done beyond the normal hours of 44 34 hours and upto 48 hours in a week ie for 3 14 hours in a week
There is no dispute that the workers are paid overtime wages for work done in excess of 9 hours on any day or 48 hours in any week in accordance with section 59 of the 
This section does not provide for overtime wages for work done in excess of the normal working hours and upto 48 hours
In Kokil s case supra the point for consideration was whether the employees working in the factory of the Indian Security Press Nasik were entitled to overtime wages under section 59 of the read with sec tion 70 of the Bombay Shops  Establishments Act 1948 for the work done beyond the normal working hours
According to them their normal working hours were 44 per week they were required to work in excess thereof but they were paid over time wages for the extra hours of work at the basic rates though they were entitled to overtime wages at double the normal rate
In that case three contentions were raised viz i since none of the respondents was a worker  under section 21 of the  their case was not gov erned by section 59 of the said Act read with section 70 of the Bombay Shops  Establishments Act ii assuming the respondents were entitled to claim the benefit of section 59 read with section 70 as aforesaid even though none of them was a worker section 59 became inapplicable by virtue of Rule 100 made under section 64 of the  and iii since none of the respondents was a workman  under section 2s of the  the application under section 33C2 thereof was not maintain able
This Court on a true interpretation of section 70 of the Bombay Shops  Establishments Act came to the conclu sion that the non obstante clause found therein made it clear that section 59 would apply and the same non obstante caluse kept out the application of section 64 read with Rule 100
On the third question this Court confirmed the Labour Court s finding that the respondents were workmen under the 
In this view of the matter this Court held that the employees were entitled to overtime wages under section 59 of the  625 Now under the Presidential order of 1st September 1959 overtime wage was payable for work in excess of normal working hours and upto 9 hours on any day or 48 hours in a week  at the rate prescribed in the departmental rules
By the subsequent Presidential order of 13th February 1963 the method of calculation and payment of overtime wage to piece workers was outlined
Under these orders the day workers are allowed overtime wages for working beyond the normal working hours whereas piece workers are allowed piece work profits as may be earned by them for working beyond normal working hours and upto 48 hours in a week
This is clear from clause i of the letter dated 13th February 1963
Even the Manual of Cost Accounting 1986 meant for Ordinance and Ordinance Equipment Factories indicates that in the case of piece workers no separate payment for overtime is permissible under the departmental rules for day shift workers but they are entitled to piece work earnings only
That is why in the earlier Writ Petition No 10095 of 1983 filed in the Madras High Court a contention was based on Article 14 of the Constitution that the management was guilty of discrimina tion inasmuch as day workers of day shifts were entitled to overtime wages whereas piece workers were denied the same
The contention was turned down by Mohan J whose decision was challenged in appeal before the High Court which appeal has since been dismissed for default
It is indeed surpris ing why another Writ Petition No 2356 of 1985 was filed in the same High Court notwithstanding the pendency of the said appeal which writ petition on transfer to the Central Administrative Tribunal came to be disposed of by the im pugned judgment and order
In fact it is doubtful if this second Writ Petition would have been entertained in view of the earlier decision of Mohan J rendered several years back soon after the discontinuance of grant of overtime by the circular letter of 2nd February 1983 merely because a different union was espousing the cause since the cause was identical
The decision of this Court in Kokil s case is clearly distinguishable on facts
1n that case there was no dispute that if section 59 of the applied the workers were entitled to overtime wages for work done beyond the normal hours and upto 48 hours
That would naturally depend on the relevant service rules since section 59 stric to sensu applies to cases of overtime work done beyond 9 hours a day or 48 hours a week
In the present case the grant of overtime wages for the period in excess of the normal working hours of 44 34 per week and upto 48 hours is governed by the relevant departmental rules and section 591 of the comes into play only if a piece worker has worked beyond 9 hours in a day or 48 hours in a week and not otherwise
Further piece workers are denied overtime wage for these 3 14 hours of work in a week 626 because this factor is taken care of in the calculation of the piece rate
We are therefore of the opinion that the ratio of Kokil s case has no application to the facts of the present case
For the above reasons we see no merit in this appeal
The appeal therefore fails and is dismissed
No order as to costs
Y Lal Appeal dis missed


Summary:
In a claim for compensation the Motor Accident Claims Tribunal held that the insurer was not liable to meet the award of compensation against the owner of the vehicle as the policy had been taken after the accident
On appeal the High Court held that the insurance policy obtained on the date of accident became operative from the commencement of the date of insurance ie from the previous mid night and since the accident took place on the date of the policy the insurer became liable
Dismissing the appeals by the insurer this Court
HELD When a policy is taken on a particular date its effectiveness is from the commencement of the date
In the instant case the insurance was taken from 28th September 1984 which is the date of the accident
The High Court was therefore right in holding that the insurer was liable in terms of the Act to meet the liability of the owner under the award
571F G Jaddoo Singh  Anr
vs Smt
Malti Devi  Anr AIR 1983 All 87 approved
In re
FB Warren  referred to
Stroud s Judicial Dictionary referred to