Appeal No 790 of 1957
Appeal from the judgment and decree dated February 10 1954 of the Allahabad High Court in Civil Misc
Writ No 280 of 1950
C B Aggarwala G C Mathur and C P Lal for the appellants
G section Pathak and D N Mukherjee for the respondent No 1 1960
November 11
The Judgment of the Court was delivered by MUDHOLKAR J
This is an appeal by the State of Uttar Pradesh against the decision of the Full Bench of the Allahabad High Court in a writ petition
In the writ petition the respondents challenged certain orders made by the Government of Uttar Pradesh under section 3 cl
b of the United Provinces  XXVIII of 1947 requiring the respondents to pay bonus at certain rates for the years 1947 48 and 1948 49 to their workers and also payment of retaining allowances to the skilled seasonal workmen and clerical staff
The circumstances under which the orders were made are briefly these 333 The Indian National Sugar Mills Workers  Federation Lucknow served notices on various sugar factories in Uttar Pradesh on December 15 1949 in which they made six demands
We need however mention only one of them as that alone is in controversy in this appeal
That demand related to the bonus for the year 1948 49 and to the restoration of the reduction which had been made in the previous year s bonus
By that notice the Federation threatened a strike in the industry with effect from January 16 1960 if the demands were not met by the sugar factories
Since this situation brought into existence an industrial dispute the Government of Uttar Pradesh in exercise of the power conferred by sections 6 and 10 of the  XIV of 1947 appointed a Court of Inquiry and referred the dispute to it
The notification also stated the points which were referred to the Court of Inquiry
That notification was twice amended but nothing turns on those amendments
A full enquiry was held by the Court of Inquiry at which the representatives of both the employers as well as the employees were represented and material was placed before the Court of Inquiry by both the sides
The Court of Inquiry submitted its report to the Government on April 15 1950
On receipt of this report the Government of Uttar Pradesh published the report in the Uttar Pradesh gazette on May 8 1950 as provided for in section 17 of the 
On July 5 1950 the Government of Uttar Pradesh in exercise of the powers conferred by section 3b of the Uttar Pradesh  issued a notification directing the various sugar factories to pay bonus to their workmen for the year 1948 49 as well as to pay certain amounts as bonus for the year 1947 48
A further direction was made in the notification for payment of retaining allowance to the skilled seasonal workmen and clerical staff with effect from the off season in the year 1950
Thereupon the Indian Sugar Millers Association which is an Association of sugar factories in India and is registered under the Trade Union Act made a petition before the High Court at Allahabad under 334 article 226 of the Constitution for the issue of a writ against the Government of Uttar Pradesh prohibiting the Government from enforcing the notification
The writ petition was dismissed by the High Court on September 14 1950 on the ground that the Association had no legal interest in the matter
Thereupon various sugar mills preferred separate writ petitions before the High Court the respondents before us being one of them
As many as fourteen grounds were taken on their behalf in their writ petition
We are however concerned with only three of them to which Mr G section Pathak who appears for the respondents confined his arguments
Before we refer to those grounds we would complete the narration of facts
The High Court of Allahabad allowed the writ petitions in so far as the question of payment of bonus was concerned though Sapru J one of the judges constituting the Full Bench expressed a doubt as to the correctness of the view that the order of the State Government as regards the payment of bonus was invalid
After the decision of the High Court the State of Uttar Pradesh applied for a certificate under article 1331b and article 1331c of the Constitution
The High Court having granted the certificate the present appeal has been brought to this Court
In order to appreciate the points raised by Mr G section Pathak it is necessary to set out the provisions of section 3 of the Uttar Pradesh 
They are as follows  If in the opinion of the State Government it is necessary or expedient so to do for securing the public safety or convenience or the maintenance of public order or supplies and services essential to the life of the community or for maintaining employment it may by general or special order make provision a for prohibiting subject to the provisions of the order strikes or look outs generally or a strike or lock out in connection with any industrial dispute b for requiring employers workmen or both to observe for such period as may be specified in the order such terms and conditions of employment as may be determined in accordance with the order 335 c for appointing industrial courts cc for appointing committees representative both of the employer and workmen for securing amity and good relations between the employer and workmen and for settling industrial disputes by conciliation for consultation and advice on matters relating to production organization welfare and efficiency d for referring any industrial dispute for conciliation or adjudication in the manner provided in the order  e for requiring any public utility service or any subsidiary undertaking not to close or remain closed and to work or continue to work on such conditions as may be specified in the order f for exercising control over any public utility service or any subsidiary undertaking by authorising any person hereinafter referred to as an authorised controller to exercise with respect to such service undertaking or part thereof such functions of control as may be specified in the order and on the making of such order the service undertaking or part thereof such functions of control as may be specified in the order and on the making of such order the service undertaking or part as the case may be shall so long as the order continues to be carried on in accordance with any directions given by the authorised controller in accordance with the provisions of the order and every person having any functions of management of such service undertaking or part thereof shall comply with such directions g for any incidental or supplementary matters which appear to the State Government necessary or expedient for the purposes of the order Provided that no order made under clause b i shall require an employer to observe terms and conditions of employment less favourable to the workmen than those which were applicable to them at any time within three months preceding the date of the order ii shall if an industrial dispute is referred for adjudication under clause d be enforced after the decision of the adjudicating authority is announced be or with the consent of the State Government
 336 The view taken by the High Court was that clause b of section 3 of the Uttar Pradesh  is prospective in operation in that thereunder it is open to the State Government to ask an employer or an employee to observe a term or a condition of employment in future and that consequently it is not competent thereunder to require an employer to pay bonus to workmen in respect of a period of employment which is already past
The view of the High Court was challenged before us on behalf of the State
According to the State the provisions of the aforesaid clause are wide enough to permit the making of such a direction to the employer because by doing so the State Government would only be imposing a condition of employment in future
In answer to this contention Mr Pathak has as already stated raised three points and they are as follows 1 Clause b of section 3 does not operate retrospectively and must be construed as having a prospective operation only
2 This clause does not apply at all where an industrial dispute has arisen and that the appropriate provision under which the State Government can take action where an industrial dispute has arisen is cl
3 If cl
b is susceptible of the interpretation that it is applicable even when an industrial dispute has arisen then it is ultra vires in as much as it would enable the State Government to discriminate between an industry and an industry or an industrial unit and another industrial unit or between a workman and a workman by referring some cases for adjudication to an industrial court under cl
d and passing executive order itself in respect of others
The provisions of cl
b according to him are violative of article 14 of the Constitution
Further according to him they are also violative of the provisions of article 191g of the Constitution in as much as they confer an arbitrary power on the State Government to require an employer to pay whatever it thinks fit to an employee and thus place an unreasonable restriction on the rights of the employer to carry on his business
337 We entirely agree with the learned judges of the Allahabad High Court that cl
b of section 3 cannot be given a retrospective effect
But we are unable to agree with them that the State Government in making a direction to the employers to pay bonus for the years in question purported to give a retrospective operation to the provisions of that clause
The order made by the State Government in regard to bonus is to the effect that it shall be paid for the year 1947 48 to those persons who worked during that year and for the year 1948 49 to those persons who worked in that year
This payment was directed to be made within six weeks of the making of the order
By giving this direction the State Government did no more than attach a condition to the employment of workmen in the year 1950 51 in sugar factories affected by the order
That is all that it has done
Mr Pathak contended that bonus has certain attributes of a wage and wage being a matter of contract can only be a term of employment agreed to between the employer and the employee but could not be a condition of employment which could be imposed by a statute or which could be imposed by a Government acting under a statute
We agree that normally wage is a term of contract but it would be futile to say that it cannot be made a condition of employment
The Minimum Wages Act provides for the fixation of a statutory minimum wage payable to a worker in respect of certain types of employments and is an instance of wage being made a condition of employment
That apart whether wage or bonus is a term of a contract or a condition of employment it is clear that section 3 empowers the State Government to require the employers and workmen or both to observe any term or condition of employment for a specified period
Since the law enables the State Government to impose a term it is apparent that the legislature which enacted that law did not import into that word a con
sensual sense
We cannot therefore accept the argument that under cl
b it was not open to the State Government to make the payment of bonus to 338 workmen a condition of their employment in future and thus augment their past wages
Mr Pathak then referred to the following observations in the judgment of Bhargava J s  Obviously there can be no question of requiring any one to observe for a future period terms and conditions of employment which have already remained effective and have already been carried out by those persons 
According to Mr Pathak the effect of the order of the Government is to add a new term or a condition with regard to employment for a period which is already over
We would again point out that this is not the effect of the order of the Government
The effect of that order is merely to require the employer to pay an additional sum of money to his employees as a term and condition of work in future
Mr Pathak however said that this would involve payment of bonus even to new employees that is those who had not participated in earning the profits in the past and that this would be contrary to the very conception of bonus
The answer to that is that under the order of the Government such bonus is payable only to those workers who had worked during the years in question and not to new employees
It is further to be borne in mind that in the dispute in question the employees were bargaining in their collective capacity and therefore the question whether the personnel forming the employees of the factories in July 1950 when the order was made by the Government and in the years 1947 48 and 1948 49 to which the dispute relates was the same is quite immaterial
As has been rightly pointed out by Sapru J  The employees might well have taken in the industrial dispute the line that the payment of bonus in respect of the years 1947 48 and 1948 49 to the workmen employed in those years was regarded by those who were employed in future as a preliminary and essential condition for not only the settlement of the industrial dispute in progress but also for carrying on their future work in sugar factories 
We also concur with the observations of the learned judge that by coming 339 conceded the State Government was not passing an order which will have retrospective effect but was passing an order which was to ensure that the work
men to be employed in the year 1950 would work in a contented manner
It must not be forgotten that the dispute was in the present that is it existed when the impugned order was made though its origin was in the past
What the order did was to resolve that dispute and this it could only do by removing its cause
Mr Pathak then relied upon the following observations of Bhargava J in L D Sugar Mills vs U P Government 1  The expression 1 to observe for such period as may be specified such terms and conditions of employment as may be determined  gives an indication that clause b of section 3 of the U P  is meant for the purpose of passing orders by which the Government gives directions about what the terms and conditions of employment should be and not how a particular term and condition of employment already in existence should be acted upon
 Bhargava J s decision was however reversed in Ram Nath Koeri and Another vs Lakshmi Devi Sugar Mills and Ors
2 by a division bench of the Allahabad High Court in Letters Patent Appeal brought against Bhargava J s decision
We agree with the view taken by the Appellate Bench
In our opinion therefore there is nothing in cl
b of section 3 of the Act which prohibited the State Government from making a direction to the sugar factories with regard to the payment of bonus for the years 1947 48 and 1948 49 in their order of July 7 1950 and that by making such a direction the State Government was not giving a retrospective effect to the provisions of that clause
In this connection it is relevant to remember that any direction as to payment of bonus must inevitably be based on the available surplus and such surplus can be determined only at the end of a given year
Therefore what the impugned 1 AIR 1954 All 705 714
2 1956 II L L J 11
340 order purports to do is to require the employers to pay specified amounts in future though the said amounts are fixed by reference to the profits made in the two preceding years
If a direction as to payment of bonus can be issued under section 3b it cannot therefore be said to be retrospective
The next argument of Mr Pathak appears at first sight to be more formidable
He points out that undoubtedly an industrial dispute had arisen and indeed it is upon that basis that the State Government proceeded to appoint a Court of Inquiry
Therefore according to Mr Pathak resort could be taken by the State Government only to the special provisions of cl
d and not to the more general provisions of cl
b of section 3
In other words where there is an industrial dispute the appropriate thing for the Government to do is to refer it for conciliation or adjudication under the provisions of cl
d and not to deal with the matter by an executive order as it has done in this case
Mr Pathak then refers to a further passage from the judgment of Bhargava J just cited which is as follows  It appears from the language that this provision was not meant for the purpose of dealing with individual disputes arising out of the application of a term or condition of employment and no power was granted to the State Government under this provision of law to sit as an adjudicator to decide a dispute that might have arisen relating to the working and actual application of terms and conditions of employment already in force
The provision was for the purpose of enabling the State Government to vary the agreed terms and conditions of employment for purposes specified in a 3 of U P  under the pressing necessities or expediency justifying such course of action
 We entirely agree with Mr Pathak that the normal way of dealing with an industrial dispute under the Act would be to have it dealt with judicially either by conciliation or by adjudication and that judicial process cannot be circumvented by resort to executive action
The proceeding before a conciliator or an 341 adjudicator is in a sense a judicial proceeding because therein both the parties to the dispute would have the opportunity of being heard and of placing the relevant material before the conciliator or adjudicator
But there may be an emergency and the Government may have to act promptly  for securing the public safety or convenience or the
maintenance of public order or supplies and services essential to the life of the community or maintaining employment
 It was therefore necessary to arm it with additional powers for dealing with such an emergency
Clause b of section 3 was apparently enacted for this purpose
An order made thereunder would be in the nature of a tempor ary or interim order as would be clear from the words  for such period as may be specified  appearing therein and from the second proviso to section 3
Under this proviso where an industrial dispute is referred for adjudication under cl
d an order made under cl
b cannot be enforced after the decision of the adjudicating authority is announced by or with the consent of the State Government
It would therefore follow from this that where the Government has made an executive order as it did in this case under cl
b of section 3 it is open to the aggrieved party to move the Government to refer the industrial dispute for conciliation or adjudication under cl
d of section 3
Mr Pathak however stated that under this section the Government has a discretion whether or not to refer a dispute for conciliation or adjudication under cl
But in our opinion where once the Government has acted under cl
b on the ground that it was in the public interest to do so it would not be open to the Government to refuse to refer the dispute under cl
d for conciliation or adjudication
Mr C B Agarwal who appeared for the State of Uttar Pradesh conceded and we think rightly that this would be so and added that in case the State Government was recalcitrant it could be forced to do its duty by the issue of a writ of mandamus by the High Court under article 226 of the Constitution
There is a further argument of Mr Pathak which must be noticed and that argument is that there is 342 nothing in cl
b which limits its operation to an emergency and that it is therefore not open to us to place a construction thereon of the kind we are placing
The opening words of section 3 themselves indicate that the provisions thereof are to be availed of in an emergency
It is true that even a reference to an arbitrator or a conciliator could be made only if there is an emergency
But then an emergency may be acute
Such an emergency may necessitate the exercise of powers under cl
b and a mere resort to those under cl
d may be inadequate to meet this situation
Whether to resort to one provision or other must depend upon the subjective satisfaction of the State Government upon which powers to act under section 3 have been conferred by the legislature
No doubt this result is arrived at by placing a particular construction on the provisions of that section but we think we are justified in doing so
As Mr Pathak himself suggested in the course of his arguments we must try and construe a statute in such a way where it is possible to so construe it as to obviate a conflict between its various provisions and also so as to render the statute or any of its provisions constitutional
By limiting the operation of the provisions of cl
b to an emergency we do not think that we are doing violence to the language used by the legislature
Further assuming that the width of the language could not be limited by construction it can be said that after the coming into force of the Constitution the provisions can by virtue of article 13 have only a limited effect as stated above and to the extent that they are inconsistent with the Constitution they have been rendered void
In our view therefore the provisions of cl
b of section 3 are not in any sense alternative to those of cl
d and that the former could be availed of by the State Government only in an emergency and as a temporary measure
The right of the employer or the employee to require the dispute to be referred for conciliation or adjudication would still be there and could be exercised by them by taking appropriate steps
Upon the construction we place on the 343 provisions of cl
b of section 3 it is clear that no question of discrimination at all arises
Similarly the fact that action was taken by the Government in an emergency in the public interest would be a complete answer to the argument that that action is violative of the pro visions of article 191g
The restriction placed upon the employer by such an order is only a temporary one and having been placed in the public interest would fall under cl
6 of article 19 of the Constitution
Upon this view we hold that the High Court was in error in issuing a writ against the State Government quashing their order in so far as it related to payment of bonus
The appeal is allowed and order of the High Court is set aside
Costs of this appeal will be paid by the respondents
Appeal allowed


Summary:
Held per MAHAJAN MUKHERJEA DAs and CHANDRASEKHARA AIYAR JJ
PATANJALI SASTRI CJ dissenting
Section 12 of the Bombay Public Safety Measures Act 1947 in so far at any rate as it authorises the Government to direct particular cases to be tried by a Special Judge appointed under the Act does not purport to proceed on any classifica tion and therefore contravenes article 14 of the Constitution and is void under article 13 on the principles laid down in the cases of State of West Bengal vs Anwar Ali Sarkar 1952 SCR 284 and Kathi Raning Rawat vs Tht State of Saurash tra 1952 SCR 435
The appellants who were accused of having committed murder and other serious offences were directed by the Government of Bombay by an order made on the 6th August 1949 to be tried under the Bombay Public Safety Measures Act by a Special Judge appointed under the Act charges were framed against them on the 13th January 1950 and they were convicted in March 1950
On appeal it was contended before the High Court that the trial and conviction were illegal as the Bombay Public Safety Measures Act was void under article 13 read with article 14of the Constitution which came into force on the 26th January 1950 but the High Court held that as the proceedings against the accused had commenced before the Constitution the provisions of articles 13 and 14 did not apply and the conviction was not illegal
Heldby a majority that although substantive rights and liabilities acquired or accrued before the date of the Constitution remain enforceable it cannot be held that after that date those rights or liabilities must be en forced under the particular procedure that was in force before that date although it has since that date been repealed or come into conflict with the fundamental right to equal protection of the laws guaranteed by the 711 Constitution as there is no vested right in procedure
The fact of reference of cases to the Special Judge before the Constitution came into force has no reasonable relation to the objects sought to be achieved by the Act the discrimi nation therefore continued after the Constitution came into force and such continuation of the application of the dis criminatory procedure to the cases of the appellants after the date of the Constitution constituted a breach of the fundamental right guaranteed by article 14 and the appellants were therefore entitled to be tried under the ordinary procedure after the date of the Constitution
PATANJALI SASTRI CJ contra
Granting that section 12 of the Bombay Act must in view of the decision in Anwar Ali Sarkar s case be held to be discriminatory and void in so far as it empowers the State Government to refer individual cases to a Special Judge for trial the trial of the appel lants which had validly started before the Special Judge who had been empowered to try the case cannot be vitiated by the Constitution subsequently coming into force
The provisions of the Constitution relating to fundamental rights have no retrospective operation and do not affect a criminal prose cution commenced before the Constitution came into force
The jurisdiction of the Special Judges validly created and exercised before the Constitution and their competence to try the cases referred to them cannot be affected by the special procedure becoming discriminatory
The correct view is that article 14 does not affect pending trials even in matters of procedure
Moreover the appellants against whom proceedings had been commenced before the Special Judge were not in the same situation as others and there was nothing discriminatory in a law which permits them to be tried under the special procedure which was applicable to them when the proceedings were started against them