Appeal No 20 of 62
Appeal by special leave from the award dated September 29 1960 of the Industrial Tribunal Punjab Patiala in reference No 13 of 1960
CK Daphtary Solicitor General of India Bhagirath Das and B P Maheshewari for the appellants
M K Ramamurthi B K Gary D P Singh and section C Aggarwal for the respondent No 2i
September 7
The Judgment of Gajendragadkar and Das Gupta JJ was delivered by Gajendragadkar J Mudholkar J delivered a dissenting judgment
GAJENDRAGADKAR J
This appeal by special leave arises out of an industrial dispute in relation to a comparatively minor demand made against the appellants by the respondents their employees but in challenging the validity of the award passed by the Industrial Tribunal in favour of the 933 respondents on that demand the learned Solicitor General has raised a general question before us
He contends that in granting the demand made by the respondents the award has illegitimately and unjustifiably trespassed on the appellants  freedom of contract
The appellants as employers are entitled tofix the terms of employment on which they would be willing to employ workmen and it is open to the workmen either to accept those terms or not industrial adjudication should not interfere in such a matter
That is the nature of the general contention which has been raised before us in the present appeal
The facts leading to the dispute are few and they lie within a very narrow compass
The appellants are the Trustees of the Tribune Press and paper and the Trust is being worked in accordance with the terms of the will executed by Dyal Singh Majithia on June 15 1895
In carrying out the policy of the Trust the five appellants have executed a power of Attorney in favour of Mr R R Sharma and the Press is managed and the paper is conducted to carry out the policy laid down by the will
It appears that before July 1 1956 for the purposes of leave the appellants had divided their employees into two categories 1 the Linooperators and 2 the rest of the workmen in the Press Section and Rule 57 made provision for leave on the basis of the said classification
The effect of the said rule was that no Press worker other than the lino operator was entitled to any kind of paid leave although he was given the right to claim 30 days  wages plus dearness allowance payable in January every year if he had worked for 11 Months
In addition the said press worker was entitled to Quarantine leave on the terms mentioned in Rule 53
934 This position was substantially altered on the July 12 1956 when the appellants framed a new Rule in respect of earned leave
This rule abolished the two categories of workers on which the earlier rule 57 was based and divided the workers into two categories i workers who were employed on or before 171956 and ii those who were employed after 17 1956
In respect of the former category of workmen the new Rule made the following provision Subject to the provisions of the Indian  every workman in the service of the Tribune on the 1st July 1956 will be entitled to 30 days  leave with wages after having worked for a period of 11 months
This leave shall cease to be earned when it amounts to 60 days In regard to the workmen falling under the latter category earned leave was to be governed by the provisions of section 79 of the Indian 
It is common ground that the provision for earned leave made by the said section is a provision for minimum earned leave which the employer is bound to give whether or not additional leave should be granted by way of earned leave is a matter within the discretion of the employer
As a result of the new rule the position was that the employees who had joined the service of the appellants on or before July 1 1956 were entitled to 30 days  earned leave with wages whereas those who joined after the said date became entitled to the statutory minimum of 21 days of earned leave
At the time when this rule came into force there were 94 old employees to whom the rule applied and 27 new employees to them by virtue of the new Rule section 79 of the was made 935 applicable
Gradually new hands have also been employed and to all such new employees section 79 is applicable
It appears that by its resolution passed on January 8 1960 the Tribune employees union sent to the Management a charter embodying about 20 demands
Attempts at conciliation were made but they failed and so on April 4 1960 eight of the said demands were referred by the Punjab Government to the Industrial Tribunal for its adjudication under section 10 of the Industrial Disputes Act
One of these demands was in rela tion to earned leave
The demand was that the employees in the Press Section should be allowed 30 days  earned leave with full wages for every months  service without any discrimination
The Tribunal has allowed this demand and it bad held that all workmen of the Press are entitled to 30 days  earned leave without making any distinction a between workmen who joined before July 1 1956 and those who joined subsequently
It is the validity of this award which is questioned before us by the appellants
The broad and general question raised by the learned Solicitor General on the basis of the employer s freedom of contract has been frequently raised in industrial adjudication and it has consistently been held that the said right is now subject to certain principles which have been evolved by industrial adjudication in advancing the cause of social justice
It will be recalled that as early as 1949 it was urged before the Federal Court in Western India Automobile Association vs The Industrial Tribunal Bombay1 that the industrial Tribunal had no jurisdiction to direct an employer to reinstate his dismissed employees and the plea made was that such a direction was contrary to the known principles which govern the relationship between master and servant
This contention was negatived by the Federal Court
1 120
936 Speaking for the Court Mahajan J as he then was observed that the award of the Tribunal may contain provisions for the settlement of a dispute 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 plea was again raised before this Court in The Bharat Bank Ltd Delhi
vs The
Employees of The Bharat Bank Ltd Delhi 1 and Mukherjea J as he then was emphatically rejected it
Insettling 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
 This view has been consistently accepted by industrial adjudication since 1949
The doctrine of the absolute freedom of contract has thus to yield to the higher claims for social justice
Take for instance the case where an employer wants to exercise his right to employ industrial labour on any wages he likes
It is not unlikely that in an economically under developed country where unemployment looms very large
for Industrial work employees may be found willing to take employment on terms which do not amount to a minimum basic wage
Industrial adjudication does not recognise the employer s right to employ labour on terms below the terms of minimum basic wage
This no doubt is an interference with the employer s 1   513
937 right to hire labour but social justice requires that the right should be controlled
Similarly the right to dismiss an employee is also controlled subject to well reorganised limits in order to guarantee security of tenure to industrial employees
In the matter of earned leave s79 of the prescribes a minimum in regard to establishments to which the Act applies
In the matter of bonus which is not regarded as an item of deferred wages industrial adjudication has evolved a formula by the working of which employees are entitled to claim bonus We have referred to these illustration to show bow under the impact of the demand of social justice the doctrine of absolute freedom of contract has been regulated
It is however necessary to add that the general question about the employer s right to manage his own affairs in the best way he chooses cannot be answered in the abstract without reference to the facts and circumstances in regard to which the question is raised
If a general question is posed and an answer must be given to it the answer would be both yes and No The right would be recognised and industrial adjudication would not be permitted or would be reluctant to trespass on that right or on the field of management functions unless compelled by over riding consi derations of social justice
The right would not be recognised and would be controlled if social justice and industrial peace require such regulation
That is why we think industrial adjudication always attempts not to answer questions in the abstract in order to evolve any general or inflexible principles
The eat course to adopt in dealing with industrial disputes is to consider the facts of the case the nature of the demand made by employees the nature of the defence raised by 938 the employer and decide the dispute without unduly enlarging the scope of the enquiry
If in the decision of the dispute some principles have to be followed or evolved that must be done but care must be taken not to evolve larger principles which would tend to prejudge issues not directly raised in the case before the Industrial Tribunal
That is why we think we would not be justified in giving any general answer to the broad contention raised by the learned Solicitor General before us in the present appeal
The development and growth of industrial law during the last decade presents a close analogy to the development and growth of constitutional law during the same period
In some respects itis well know that article 19 of the Constitutionhag guaranteed fundamental rights to individualcitizens and at the same time has provided forthe regulation of the said fundamental rights subject to the provisions of cls
2 to 6 of the said Article
Where a conflict arises between the citizen s fundamental right to hold property and a restriction sought to be imposed upon that right in the interest of the general public courts take the precaution of confining their decision to the points raised before them and not to lay down unduly broad and generaI propositions
As in the decision of constitutional questions of this kind so in industrial adjudication it is always a matter of making a reasonable adjustment between two competing claims
The fundamental right of the individual citizen is guaranteed and its reasonable restriction is permissible in the interest of the general public so the claims of the interest of the general public have to be weighed and balanced against the claims of the individual citizen in regard to his fundamental right
So too in the case of industrial adjudication 939 the claims of the employer based on the freedom of contract have to be adjusted with the claims of industrial employees for social justice
The process of making a reasonable adjustment is not always easy and so in reaching conclusions in such a matter it is essential not to decide more than  is necessary
If industrial adjudication pur ports to lay down broad general principles it is likely to make its approach in future case inflexible and that must always be avoided
In order that industrial adjudication should be completely free from the tyranny of dogmas or the sub conscious pressure of pro conceived notion it is of utmost importance that the temptation to lay down broad principles should be avoided
In these matters there are no absolutes and no formula can be evolved which would invariably give an answer to different problems which may be posed in different cases on different facts
Let us therefore revert to the facts of this case and decide whether the appellant s attack against the validity of the propriety of the award can be sustained
In dealing with the narrow dispute presented by this appeal it is necessary to remember that all the employees of the appellants are governed by the same terms and conditions of service except in regard to earned leave
It is only in respect of this term and condition of service that a distinction is made between workmen employed on or before 17
56 and those employed after that date
Generally in the matter of providing leave rules industrial adjudication prefers to have similar conditions of service in the same industry situated in the same region
There is no evidence adduced in this case in regard to the condition of earned leave prevailing in the comparable industry in this region
But we cannot ignore the fact that this 940 very concern provides for better facilities of earned leave to a section of its employees when other terms and conditions of service are the same in respect of both the categories of employees
It is not difficult to imagine that the continuance of these two different provisions in the same concern is likely to lead to dissatisfaction and frustration amongst the new employees
It cannot be denied that the existence of industrial peace and harmony and the continuance of the said peace and harmony are relevant factors but their importance should not be unduly exaggerated
If a frivolous demand is made by the employees and it is accompanied by a threat that non compliance with the demand would lead to industrial disharmony or absence of peace it would be unreasonable to treat the thrust as relevant in deciding the merits of the demand
In this connection it is necessary to remember that the continuance of harmonious relations between the employer and his employees is treated as relevant by industrial adjudication because it leads to more production and thereby has a healthy impact on national economy and so it is necessary that in dealing with several industrial disputes industrial adjudication has to bear in mind the effect of its decisions on national economy
In their zest to fight for their respective claims the parties may choose to ignore the demand of national economy but industrial adjudication cannot
If the demand is plainly frivolous it has to be rejected whatever the consequences may be
In the present case the argument that the continuance of two different provisions would lead to disharmony cannot however be treated as frivolous
It is difficult to understand on what principle the discrimination is based
The only argument urged in support of the discrimination is the employer s right to provide for new terms of service to the new entrants in service
In our 941 opinion the validity of this argument cannot be accepted in the circumstances of this case
Take the case of the wages or dearness allowance which the Appellants paid to their employees
Would the appellants be justified in assertion of their right of freedom of contract to offer less favourable terms of wages or dearness allowance to employees who would be employed after a certain date  If the general point raised by the learned Solicitor General is upheld without any qualifications then it would be open to the employer to fix different wages for different sets of workmen who are doing the same kind of work in his concern
We have rarely come across A case where such a claim has either been made or has been upheld
It is well known that both industrial legislation and industrial adjudication seek to attain similarity or uniformity of terms of service in the same industry existing in the same region as far as it may be practicable or possible without doing injustice or farm to any particular employer or a group of employers That being so we do not think the Tribunal was in error in holding that in the matter of earned leave there should be uniformity of conditions of service governing all the employees in the service of the appellants
There is another aspect of this question to which reference must be made
This is not a case in which the financial liability imposed on the employer by the award when it directed the employer to grant the earned leave of 30 days to all the employees is very heavy and so having regard to the fact that the appellants have been conducting their business in a profitable way and their financial position is distinctly good no attempt has been made before us and rightly to suggest that the burden imposed by the award is beyond their means
it is not disputed that the total annual liability which 942 may accrue as a result of the award may not exceed Rs 1000  and it is also common ground that the appellants are a flourishing concern and their not profits which were in the neighbourhood of a lac of rupees in 1949 have shown an upward tendency and have reached almost rupees eight lacs in 1959
That is another factor which has to be borne in mind in dealing with the present dispute
It is not suggested by the appellants that the provision made by them for earned leave in respect of old employees is unduly generous of extravagant and so it has become necessary to invoke the provisions of section 79 of the in respect of new employees
On the other hand earned leave provided by section 79 is the minimum statutory leave to which employees are entitled and if the appellants thought it necessary to provide for additional earned leave to their old employees there is no reason why they should not make a similar provision in respect of the new employeesas well
We ought to add to that on the record it does appear that the appellants are good employees and they are treating their employees in a liberal manner
It however appears that they have brought the present dispute to this Court more for asserting the general principle of the employer s right to fix conditions of service with his new employees than for vindicating any real or substantial grievance against the award which would prejudicially affect their interest
In our opinion having regard to the nature of the dispute raised in the present appeal and the other relevant facts and circumstances it cannot be said that the Industrial Tribunal erred in law in directing the appellants to provide for the same uniform rule as to earned leave for all their employees
We are satisfied that the award under appeal cannot be set aside only on the academic or abstract point of law raised by the appellants
943 The result is the appeal fails and is dismissed with costs
MUDHOLKAR J This is an appeal by special leave from the award of the Industrial Tribunal Punjab
The appellants before us are the trustees of The Tribune  Ambala Cantt
and the opposite party to the appeal consists of the workmen of the Tribune through their two unions one the Tribune Employees  Union and the other the Tribune Workers  Union
The Trust was founded in Lahore by the late Sardar Dayal Singh Majithia on February 1 1881
It publishes the newspaper Tribune
By the will of the founder dated June 15 1895 the Management of the Tribune was vested in a public trust in September 1898
After the partition of India the offices of the newspaper had to be shifted from Lahore and they are now located at Ambala
The Trust naturally had to leave the entire machinery and other equipment of the Tribune Trust along with its immovable property in Lahore
The value of that property is stated by the appellants to be Rs 25 lakhs or so
The Trust was however able to transfer its bank accounts and Government securities to India a few days before the partition
With the help of these assets it reestablished the Tribune Press and office at Ambala and established new machinery at a cost of Rs 15 lakhs or so
Gradually the Trust has been able to rehabilitate its fortunes
It is not disputed before us that despite the heavy loss entailed by the Trust by reason of being uprooted from Pakistan the employees quite a number of whom are old employees who were able to migrate to India have been treated with a great deal of consideration
After the Tribune started making profits the employees are being given bonus every year
Moreover even before the Employees Provident Fund scheme applicable to newspaper 944 industry and even before the scheme of gratuity for all categories of employees were enforced by statute be Tribune had provided for both provident fund and gratuity to its employees
In addition to this it has provided free housing accommodation to its workmen in two colonies one built in 1955 with the help of subsidy from the Government of India and the other in the year 1958 at a cost of Rs 6 lakhs
The quarters in the two colonies are provided with modern sanitation Besides that there are extensive recreation grounds lawns etc in these colonies
Even electricity is supplied free to the employees
Several other amenities are also provided by the Trust
It would thus appear that the welfare of the employees has been kept prominently in mind by the trustees
Even so some disputes arose between the management and the employees
Ultimately eight demands made by the employees were referred by the Government of Punjab for adjudication under section 101 of the industrial Disputes Act 1947 14 of 1947 to the Industrial Tribunal Punjab Patiala constituted under s7A of the Act
Four demands were rejected by the Tribunal as having been withdrawn one was settled amicably and on the remaining three the Tribunal has made its award
One of those three demands is  Whether the employees in the Press Section should be allowed 30 days  earned leave with full wages for every 11 months  service without discrimination  The Tribunal hold in favour of the workmen and it is only against this part of the award of the Tribunal that the trustees have come up in appeal before us
Certain facts have to be stated in connection with this demand
The Trust had framed certain rules governing the conditions of service of 945 its employees
Rule 57 of those rules deals with leave and reads thus  The Lino Operators shall be entitled to 30 days  leave of all description luring the course of a calendar year which will be with pay plus all allowances
Press employees other than the Lino operators may be granted leave by the competent authority from time to time as the authority may determine
Such leave shall be without pay or allowance
They shall however be entitled to in the month of January every year to receive a sum amounting to the leave pay plus ordinary dearness allowance for the preceding month of December for the period of II months  service or to a proportionate amount for a lesser period
In addition Press workers will be entitled to quarantine leave on the terms mentioned in Rule 53
On July 1 1956 a new rule was framed which reads as follows  1 Subject to the provisions of the Indian  every workman in the service of the Tribune on the 1st July 1956 will be entitled to 31 days  leave with wages after having worked for a period of II months
This leave shall cease to be earned when it amounts to 60 days
2 A workman joining the service of the Tribune after the 1st July 1956 will be entitled to leave in accordance with the provisions of section 79 of the Indian 
 Under the old rule the Lino Operators in the press section were allowed 30 days  leave on full wages 946 including dearness allowance
The other workers in the press section were however allowed not leave with pay but 30 days  wages in the month of January calculated on the basis of the full wages drawn in the preceding month provided that an employee had served for a period of II months till the beginning of the month of January
If he had served for a lesser period he was to be paid propor tionately less amount
Bearing in mind the fact that in industries leave vacation and holidays with pay are regarded as supplemental pay practices see Collective Bargaining principles and Cases by John T Dunlop and James J Healy revised edn p 433 in substance even the employees in the press section other than lino operators got the same money equivalent of the leave allowed to lino operators
It may be mentioned that these other press section employees were also entitled to take leave but the rule provided that they will Dot be paid any pay and allowances for such leave
That was perfectly reasonable because they got pay in lieu of paid leave for an additional period in the month of January
However even this slight distinction in the mode of conferring benefits on the two categories of employees was abolished by the new rule which came into force on July 1 1956 and all employees in the press section upto that date were made eligible for the grant of 30 days  leave with wages after having worked for a period of 11 months
It May be mentioned here that the of 1948 provided in a 79 that every worker who has worked for a period of 240 days or more in a calendar year shall be given at least one days  leave for every 20 days of service
No doubt this was the minimum provided by the Act but since the press section is governed by the it was open to the Trust to modify its rules with regard to all employees of this section and grant leave according to the provisions of this 947 section
There is no prohibition in law against doing so but still it did not wish to revise unfavourably its rules regarding the quantum of leave to its existing employees
It however felt that in view of the statutory provision there was no obligation upon it to provide for a longer leave than that laid down in section 79 of the 
It was for this reason that it provided that all employees engaged on or after July 1 1956 will be granted leave according to the provisions of section 79 of the  the idea being that eventually all employees should be governed by the rules
Apparantly to forestall this consequence the employees contend that the new rule has introduced discrimination
That is why they raised a dispute relating to this matter and it was referred to the Tribunal along with the other disputes they had raised
The Tribunal dealing with this matter has observed as follows  It may be of some importance to note that till 1st July 1956 the workmen who had entered service before that date and those who had been employed thereafter were in the matter of leave compensation treated alike
It was on 1st July 1956 for the first time that the workmen who had been in service before that date were given 30 days  paid leave but for now entrants the number of days of that leave was reduced to that permitted by section 79 of the 
The Union s contention is that to allow 3 days  earned leave with full wages in an year to a certain group of workmen in Press Section and to deny that benefit to the rest of the workmen of that section simply on the score of their having entered service after 1st July 1956 is to acknowledge the prominent element of discrimination which has been res 948 ponsible for the heart burning resentment and dissatisfaction of the workmen
It is further urged with emphasis that all workers for the Press Section should in the matter of earned leave be treated equally
For the long space of seven years even after the had come into force the management had continued to treat all workmen of the Press Section alike irrespective of the date of their employment
There is no reason why a distinction of a discriminatory nature and effect be made between the two artificially created sets of workmen belonging to the same section
 It seems to me that the Tribunal s ultimate finding is vitiated by a misconception entertained by it
The first sentence in the above quotation would show that the Tribunal thought that those persons who were employed after July 1 1956 were treated in the matter of leave on par with those employed before July 1 1956 till July 1 1956 but were sought to be discriminated against only thereafter
It is difficult to understand how persons who were employed after July 1 1956 could possibly be treated before July 1 1956 equally with employees who were in service on that day
Apparently it is this confusion in the mind of the Tribunal which has influenced its ultimate conclusion
That apart it is quite clear that what the Trust has done is to put in one category persons who enjoyed in substance the same kind of benefit uptil July 1 1956 and permit them to enjoy the benefit they bad hitherto enjoyed
Then it put in a separate category those persons who could never possibly lay any claim to have enjoyed a similar benefit because they were not its employees till July 1 1956 and decided that they will get leave only as provided in section 79 of the 
All persons in each category are intended to be alike and therefore the 949 question of discrimination does not in fact arise
It was in my opinion open to the management to offer to the new entrants now terms
When the new entrants entered service accepting the new terms and knowing fully well that one of those terms i e the one relating to annual leave was different and less beneficial from the one which obtained in the case of the old employees it is not reasonable for them now to say that they are being discriminated against
The Tribunal however thinks otherwise
It has held that the Trust by treating the now entrants less favourably in the matter of leave than its old employees has practiced discrimination and that this discrimination has caused heart burning
Presumably therefore the Tribunal felt impelled to interfere and direct that the new entrants should be treated  in the matter of leave on par with the old employees in  order to avoid industrial unrest which may result from  heart burning amongst the new entrants
What we must first consider is whether the existing of heart burning has at all been established in this case
It is said that the continuance of different provisions in the same concern has caused heart burning dissatisfaction and frustration among the new employees and this would lead to unrest in the industry
For one thing there is no evidence before us to show that the new employees are making a very serious grievance of the fact that they would get a few days less of leave than the old employees
All that Mr Ramamurti could point out to us was the statement in the evidence of Som Nath A W 7
that he should also be given 30 days privilege leave in a year
Merely saying that he should be given privilege leave does not mean that he is harbouring bitterness in his mind
Apart from that it would be extremely unreasonable to take notice of bitterness if any in the minds of 950 these new employees in regard to this matter because
as already stated they voluntarily took up employment knowing that they would got less leave than the old employees
Som Nath s statement is no evidence of the fact that there is any heart burning
To say that the very fact that two sets of people are governed by different rules will necessarily lead to heartburning without establishing anything more such as inadequacy of the benefit enjoyed by one set will be to ignore that such differences are a matter of common occurrence and no reasonable person is expected to magnify their consequences
It seems to me further that the workers as a body did not think much of the distinction between the extent of leave enjoyed by old and new employees because during all the four years while the rule has been in force they raised no protests
No doubt they did ultimately make a protest in the year 1960 when the dispute was referred to the Tribunal
But then this was not the sole dispute but was one of eight disputes at least four of which were withdrawn by the Unions apparently after realising that there was no substance in them
The mere fact that they did not withdraw this dispute would not of itself indicate that they regarded it as of great importance
It may well be that they did not withdraw it in an erroneous belief that anything which is characterised as discrimination will at once earn the sympathy of Industrial Tribunals and the Courts
Even assuming that is creating heartburning amongst the employees the question arises whether they have a real grievance
They say that the Trust has discriminated against the new entrants and this is their grievance
In this connection it may be observed that the more refusal or failure of an employer to treat equally all its employees doing a particular kind of work would not necessarily amount to discrimination
The subject of is d 951 crimination has come up for consideration before this Court in a largo number of cases in which a complaint has been made that the equality clause of the Constitution article 14 has been violated
This Court has held that It is open to the State to make reasonable classification both as regards persons and as regards things see in particular Budhan vs State of Bihar1  Khandige Sham Bhatt vs Agricultural Income tax Officer 2 This Court has laid down that a classification made by the State will be reasonable provided that 1 it is founded on an intelligible differentia which distinguishes persons or things that are grouped together from other left out of the group and 2 that the differentia has a rational relation to the object sought to be achieved by the statute
In the State of Madhya Pradesh vs Gwalior Sugar Co Ltd 4 it has been held that it is permissible to make classification on historical grounds by putting in one class one set of persons or things and in other all those left out from the first class Court
In Ramjilal vs Income tax Officer Mohindargarh5 this Court has held that a taxing law may provide that a law imposing a new rate shall not apply to pending proceedings
In other words this Court has upheld the law where one rate of income tax shall be applicable to persons whose cases were pending for assessment and another rate to persons whose cases were not so pending
Thus this Court has hold as reasonable classification made by reference to difference in time
In Sardar Inder Singh vs The State of Rajasthan 6 this Court has held that it is open to the legislature to decide the date from which a law should be given operation and that the law made by it cannot be challenged as discriminatory because it 1  2  3 C A Nos 98  98 of 1959 decided on November 30 1960
4  5  952 does not apply to prior transactions
Thus in this case also classification made on the basis of difference in time has been upheld
Finally in Hathising Mfg Co vs Union of India 1 this Court has held that there is no discrimination if the law applies generally to all persons who come within its ambit as from the date on which it is made operative
This case likewise accepts that it will not amount to discrimination if one set of persons is treated differently from another by reference to a point of time
It would follow from these decisions that if the State as an employer provided that persons entering its service after a certain date will be governed by a set of condition which will be different and may be less favourable than those governing the existing entrants that law will not be open to attack under article 14 of the Constitution on the ground that it discriminates between one set of employees and another
In my judgment the principle laid down by this Court that reasonable classification does not amount to discrimination is of general application
Therefore when an employer s action is challenged before an Industrial Tribunal as discriminatory the Tribunal will also have to bear it in mind
For if an action cannot be regarded as discriminatory and violative of article 14 of the Constitution because it is based on a reasonable classification an identical action of a private employer affecting his employees can also not be regarded as discriminatory
The content and meaning of discrimination  wherever the term is used must necessarily be the same and we cannot adopt one standard for judging whether an action when it emanates from the State is discriminatory or not and another standard for judging an identical action when it emanates from a private citizen
Looked at this way I have no doubt that the Trust has not practised what can in law be regarded as discrimination against its now entrants 1 AIR 1960 SC 931 953 by allowing them lesser leave than it has allowed to its old entrants
I may point out that it is not an unusual thing even in Government service to find new entrants being treated differently in the matter of leave emoluments etc from the old entrants
It is a well know fact that in most of the provinces of India in the year 1932 or 1933 pay scales in various categories of Government service were revised and new scales less favourable than the old ones were introduced
Therefore a largo body of men were performing the same duties as other large body of men but were getting lesser pay than the latter
That happens often is happening today in several of the recently reorganised States and may happen hereafter also
But merely because new terms of service are less favourable than the old ones would it be correct to say that there is discrimination between the new entrants and the old entrants As already pointed out it is open to the employer to offer different and even less favourable terms to new entrants and if the new entrants entered service with their eyes wide open they cannot reasonably complain of being discriminated against
Mr Ramamurthi who appears for the employees however contends that it is open to an employee to take up employment on the existing conditions of service and immediately start clamouring for improving his conditions of service
It is sufficient to say that without establishing that there was a change in circumstances subsequent to the time when a workman accepted service a demand for improvement in the conditions of service cannot with justice be entertained unless of course the original conditions of service were plainly unfair
Mr Ramamurthi does not say that the term regarding leave in the rule applicable to the new entrants is unfair in the sense that the 954 leave allowed is inadequate
But Mr Ramamurthi said that where a service condition causes heartburning amongst two sections of employees discontent and unrest would be its natural outcome and so it is open to the Tribunal to revise the condition and thus eliminate that discontent
I am unable to accept the argument
No doubt the provisions of the Industrial Disputes Act are wide enough like those of other legislative enactments placed on the statute book for promoting the welfare of the employees to permit an Industrial Tribunal to override the contract between an employer and his employees governing conditions of service of the employees
But it does not follow from this that no sooner a reference of a dispute is made to a Tribunal for adjudication than the contract of service ceases to have any force
The power to interfere with a contract of service can only be resorted to in certain limited circumstances
As has been pointed out by this Court in State of Madras vs C P Sarathy1 the adjudication by a Tribunal is only an alternative form of settlement of disputes on a fair and just basis having regard to the prevailing conditions of the industry
Bearing in mind this principle it would follow that it is only for securing a fair and just settlement of an industrial dispute that the Tribunal can over ride the contract between the parties
For deciding what is fair and just it is not enough for the Tribunal to say that a particular demand be granted for doing social justice
What it must ascertain is whether the grievance is a real one and whether it is of a type of which the employees can justly complain
In Muir Mills Co Ltd vs Suti Mills Mazdoor Union Kanpur 2 it has been pointed out social justice is a very vague and indeterminate expression and no clear cut definition can be laid down which will cover all the situations and that the fancy of an 1 2  955 individual adjudicator is not social justice
But of course
 that does not mean that social justice has no place in the settlement of industrial disputes
It is indeed a relevant consideration but it is well to bear in mind that doing social justice in an industrial dispute is not merely doing justice between the employer and the employee
The question of doing anything in the interest of social justice comes in when the State has a social interest in a situation or in an activity because of its repercussions on the community at large
Therefore when the social interest of the community is involved in a situation or an activity the interests of all parties who are affected by it have to be borne in mind the parties being not merely the employers and the employees but also the community at large which includes also the consumers
So where a direction in an award is sought to be sustained on the ground that it was made with the intention of promoting social justice it must be shown that the adjudicator had borne in mind also the interests of the community
This aspect of the matter has not been borne in mind by the Tribunal and therefore the relevant direction in its award cannot be sustained on the ground that it is actuated by the need of promoting social justice
The ground given by the Tribunal as already stated is that there is discrimination and the existence of the discrimination will be a perpetual source of unrest
Granting again that there is discrimination it is difficult to appreciate now it can be a perpetual source of bitterness for
with the efflux of time the old employees will gradually be fading out till at last there will be left only that category of workers to which the provisions of is
79 of the apply
956 Nor again
do I think the fact that a dispute a comparatively of minor character and that the financial burden entailed on the employer is inconsiderable a matter which would entitle the Tribunal to alter a contract between an employer and his employees
In fact these factors are not relevant for consideration
If the leave terms offered to new employees were on their face unfair the mere fact that the employer did not have the capacity to pay would not have been allowed to influence the determination of the issue
I would go further and say that since the Trust has provided for its new entrants such leave facilities as are recognised by the itself as fair it was not open to the Tribunal to revise the relevant term of the contract
For all these reasons I am of opinion that the appeal must succeed and the award of the Tribunal should beset aside in so far as it refers to the demand made by the employees for grant of the same leave to new entrants as is being granted to old employees
By COURT
In accordance with the opinion of the majority the appeal fails and is dismissed with costs


Summary:
On July 1 1956 the appellants made a rule that every workman employed on or before that date would be entitled to 30 days leave with wages after working for II months and workmen employed after that date would be entitled to earned leave in accordance with the provisions of s79 of the Indian 
The State Government referred for adjudication to the Industrial Tribunal the question whether all the employees should be allowed 30 days earned leave with full wages for every II months  service without discrimination
The Tribunal held that ail the workmen were entitled to 30 days earned leave without making any distinc tion between workmen who joined before July 1 1956 and those who joined subsequently
The appellants contended that they were entitled to fix the terms of employment on which they would employ the workmen and it was open to the workmen to accept those terms or not and the tribunal was not justified in interfering in such a matter
Held per Gajendragadkar and Das Gupta JJ that the Tribunal was justified in directing the appellants to provide for the same uniform rule as to earned leave for all their employees
The doctrine of absolute freedom of contract had to yield to the higher claims for social justice and had to be regulated
In industrial adjudication no attempt should be made to answer questions in the abstract for evolving any general or inflexible principles
Each dispute has to be decided on its own facts without enlarging the scope of the enquiry
If some principles have to be followed or evolved care has to be taken not to evolve larger 931 principles
In order that industrial adjudication should be free from the tyranny of dogmas or the sub conscious pressure of preconceived notions it is important that the temptation to lay down broad principles should be avoided
Accordingly it is not necessary to decide the broad contention whether industrial adjudication can interfere with the contract between the employers and the employees
In the present case all the workmen were governed b the same terms and conditions of service except in regard to earned leave
The discrimination was not based upon any principle and was bound to lead to disaffection amongst the new employees
The financial burden imposed by the award on the employers was slight
The provisions for earned leave in respect of old employees were not unduly generous or extravagant
Earned leave provided for by s79 was the minimum statutory leave
If the appellants thought it necessary to provide for additional earned leave for their old employees there was no reason why they should not make a similar provision in respect of new employees as well
Western Indian Automobile Association vs Industrial Tribunal Bombay and Bharat Bank Ltd vs The Employees of Bharat Bank Ltd  referred to
Per Mudholkar J The Tribunal was not justified in interfering with the rule made by the appellants
It was open to the appellants to grant leave according to s79  to all the employees but still they did not wish to reduce the leave of 30 days which they were already giving to the old employees
The appellants have put into one category persons who enjoyed the same kind of benefits until July 1 1956 and have put in another category persons who did not enjoy such benefits
All persons in each category were treated alike and the question of dis crimination did not in fact arise
If the State had pro vided that persons entering its service after a certain date would be governed by a set of conditions which were different and less favorable than those governing the existing servants its action would not be open to an attack under article 14 of the Constitution
An identical action of a private employer could also not be regarded as discriminatory
An award made with the intention of promoting social justice must take into consideration the interests of the community
Even if there was discrimination it could not be a perpetual source of bitterness as gradually the old employees would fade out 932 till only one category of workers would remain
The facts that the dispute was comparatively of a minor character and that the financial burden imposed on the appellants was small did not entitle the tribunal to alter the contract between the employer and employees
Since the appellant had provided for its new entrants such leave facilities as were recognised by the itself as fair it was not open to the Tribunal to revise the relevant term of the contract
Budhan vs State of Bihar AIR 1956 section C 191 Khandige Sham Bhat vs Agricultural Income Tax Officer 1963 3 SCR 809 State of MP vs Gwalior Sugar Co Ltd CA Nos 98  99 of 1959 dated 301 160 Ramjilal vs Income tax Officer Mohindargarh   Sardar Inder Singh vs The State of Rajasthan  and Hathisingh Mfg
Co vs Union of India A1 R 1960S C 931 referred to