1 IN THE HIGH COURT OF JUDICATURE OF BOMBAY IN THE HIGH COURT OF JUDICATURE OF BOMBAY IN THE HIGH COURT OF JUDICATURE OF BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1791 OF 2007 UTI Asset Management Company Private Ltd. ..Petitioner. V/s. All India Unit Trust Employees’ Association. ..Respondent. Mr.S.K.Talsania, Sr.Counsel, Nandini Menon i/b. S. Udeshi & Co. for Petitioner. Mr.N.M.Ganguli for respondent. CORAM: A.M.KHANWILKAR,J CORAM: A.M.KHANWILKAR,J CORAM: A.M.KHANWILKAR,J DATE : MARCH 17, 2008. DATE : MARCH 17, 2008. DATE : MARCH 17, 2008. JUDGMENT : JUDGMENT : JUDGMENT : 1. This Petition takes exception to the Award passed by the Central Government Industrial Tribunal No.1, Mumbai dated February 27, 2007 in Reference No.CGIT-20 of 2004. The term of reference was as under: "Whether the action of the Management of Unit Trust of India in changing the service conditions without issuing a notice of change under Section 9(A) of Industrial Disputes Act, 1947 to the proposed changes relating to grant of housing Loan, Provident Fund, Contribution and reimbursement of course fees etc. is legal and justified ? If not, what relief is the workmen Union entitled to ?" 2 2. In view of the subsequent development, however, the only issue that remained to be considered was in relation to the appropriateness of discontinuance of "leave encashment" facility to the workmen. For, the other issues raised by the Union in relation to which the Reference was made stood settled between the parties. 3. In so far as the question as to whether discontinuance of leave encashment to the workmen was legal and justified, the Tribunal was of the opinion that the facility of leave encashment had become a service condition; and its withdrawal resulted in change of service conditions. The Tribunal then opined that the said facility of leave encashment was covered by sub-clause 5, which refers to leave with wages and holidays; and sub-clause 8, which refers to withdrawal of any customary concessions or privilege, as specified in Schedule IV. On that finding, the Tribunal proceeded to hold that the Management could not have withdrawn the facility of leave encashment without issuance of notice under section 9(A), which mandatory compliance was not adhered to by the Management in the present case. The Tribunal further noted that in earlier conciliation proceedings between the Management and 3 the Union, the Management had conceded that leave encashment facility will remain unaffected (as noted by the Assistant Labour Commissioner in his Minutes)- as was informed to the Ministry of Labour, Government of India, vide letter dated 18th November, 2003, in the following words: "Finally, Management stated that leave encashment facility will be continued and workmen will be paid leave encashment. Union agreed with the statement of the Management." Referring thereto, the Tribunal proceeded to hold that it was not open to the Management to contend to the contrary. The Tribunal also noted that the stand taken by the Management about incorrect recording of that factual position by the Conciliation Officer was devoid of substance. 4. Consistent with the above view, the Tribunal answered the Reference in favour of the workmen union and held that withdrawal of leave encashment was illegal and unjustified, being violative of section 9(A) of the Act. This decision is the subject matter of challenge by the Management. 5. According to the Petitioner Management, the Tribunal has misdirected itself in construing the legal provisions, and that the view of the Tribunal 4 was in the teeth of the decisions relied by the Management. Reliance was placed on the exposition in the case of Hindustan Lever Ltd. V/s. Ram Mohan Roy Hindustan Lever Ltd. V/s. Ram Mohan Roy Hindustan Lever Ltd. V/s. Ram Mohan Roy & Ors.[AIR 1973 SC 1156], and Harmohinder Singh V/s. & Ors.[AIR 1973 SC 1156], and Harmohinder Singh V/s. & Ors.[AIR 1973 SC 1156], and Harmohinder Singh V/s. Kharga Canteen, Ambala Cantt. [(2001) 5 SCC 540) Kharga Canteen, Ambala Cantt. [(2001) 5 SCC 540) Kharga Canteen, Ambala Cantt. [(2001) 5 SCC 540)] to contend that the precondition to attract the provisions of Section 9(A) of the Act are that: (i) the Employer is contemplating change in the service conditions of the workmen; (ii) the change must be in relation to any of the 11 items mentioned in the Schedule IV of the said Act; (iii) such change must be adverse to the workmen. 6. It was argued that each of these preconditions are required to be pleaded and proved by the Union to successfully challenge the action of the Management being violative of section 9(A) of the Act. It was argued that there was absolutely no pleading that the case in hand was covered by Item 8 of Schedule IV, whereas the Tribunal proceeded to invoke the said Item to answer the reference in 5 favour of the Union. Reliance was placed on the exposition in the case of Hindustan Steel Works Hindustan Steel Works Hindustan Steel Works Construction(supra) Construction(supra) Construction(supra) to contend that whether a particular practice or allowance or concession had become condition of service, would always depend on the facts and circumstances of each case. 7. It was then contended that the Union was required to plead as well as prove that the facility of leave concession had become condition of service as such. In absence of pleading in that behalf, any amount of evidence adduced by the union before the Tribunal could not be looked into. To buttress the above proposition, reliance was placed on the decision in the case of Regional Manager(Operations), Regional Manager(Operations), Regional Manager(Operations), SBI V/s. Rakesh Kumar Tewari[(2006) 1 SCC 530]. SBI V/s. Rakesh Kumar Tewari[(2006) 1 SCC 530]. SBI V/s. Rakesh Kumar Tewari[(2006) 1 SCC 530]. 8. On the above basis, the Petitioner would contend that, the conclusion reached by the Tribunal on the issue on hand covered by Item 8 of the Schedule IV, is untenable both on facts and in law. In so far as reliance placed by the Tribunal on Item 5 of the Schedule IV, which pertains to leave with wages and holidays, it was argued that the same would not cover the facility of encashment of ordinary leave so as to be a condition of service. According 6 to the Petitioner, the said Item No.5 deals with leave with wages as well as holidays, which remained unaffected inspite of the decision of the Petitioner management to withdraw the facility of encashment of ordinary leave. Inasmuch as, the workmen would be eligible for the same number of leave and wages and holidays; and in fact the employees are now required to enjoy their leave period. It was also argued that there was absolutely no pleading or evidence to the effect that the impugned change was adverse to the workmen or that the workmen were affected by such change in any manner. In absence thereof, the precondition for attracting section 9(A) was lacking, for which reason also the conclusion reached by the Tribunal cannot be sustained. 9. It was also argued that the Tribunal has not recorded any reason to support its conclusion, on which count also the conclusion reached by the Tribunal was perverse and unsustainable. The Petitioner also criticized the observations made by the Tribunal in paragraph-13 of its Judgment with reference to the statement of fact recorded in the Minutes of the Conciliation Officer, which would suggest that the Management had stated that the leave encashment facility will be continued and workmen 7 were to be paid leave encashment. According to the Petitioner, the said statement recorded by the Conciliation Officer has been distorted and the background in which the same was made has been glossed over. In substance, the Petitioner submits that the Judgment of the Tribunal cannot be sustained on facts or in law. 10. On the other hand, the Counsel for the Respondent Union, has supported the view taken by the Tribunal and would submit that no interference in exercise of Writ jurisdiction was warranted in the fact situation of the present case. The Respondents would rely on the background, in which the facility of encashment of leave was introduced and was operating since 1979. According to the Respondents, the terms, on which the said facility was extended to the workmen, on the day when the Unit trust of India (Transfer of undertaking and repeal) Act, 2002 came into force, the same will have to be protected in all respects, having regard to the mandate of section 6(1) of the Act of 2002. In substance, it is argued that on account of the said statutory provision, and also because the scheme of encashment of ordinary leave was prevalent since 1979, it became condition of service of the workmen in the employment of the 8 Petitioner, which could not be altered unilaterally, as it could be changed only by settlement or award under the Industrial Disputes Act. According to the Respondent, Item 5 of the Schedule IV is wide enough to include the facility of encashment of leave and the said facility would be integral part of the words "leave with wages and holidays". 11. According to the Respondents, it is admitted position that the said facility was in place since 1979 though modified in some respects from time to time. Having regard to this admitted position, contends the learned Counsel for the Respondent, the view taken by the Tribunal that unilateral withdrawal of such facility would attract Item 8 of the IV schedule of the I.D. Act is justified. According to the Respondents, the Tribunal has rightly concluded that the impugned action of the Petitioner Management was in breach of section 9(A) r/w. Item Nos. 5 and 8 of the IV Schedule of the I.D.Act. 12. Counsel for the Respondent has placed reliance on the observations in the decisions in the case of Workmen of Food Corporation of India v/s. Workmen of Food Corporation of India v/s. Workmen of Food Corporation of India v/s. Food Corporation of India(1985 II LLJ 4); Dalmia Food Corporation of India(1985 II LLJ 4); Dalmia Food Corporation of India(1985 II LLJ 4); Dalmia Cement (Bharat) Ltd. V/s. Their workmen (1961 II Cement (Bharat) Ltd. V/s. Their workmen (1961 II Cement (Bharat) Ltd. V/s. Their workmen (1961 II 9 LLJ 130); The Management of Indian Corporation Ltd. LLJ 130); The Management of Indian Corporation Ltd. LLJ 130); The Management of Indian Corporation Ltd. V/s. Its workmen[(1976) I SCC page 63]; Cooperative V/s. Its workmen[(1976) I SCC page 63]; Cooperative V/s. Its workmen[(1976) I SCC page 63]; Cooperative Bank Employees Union V/s.Yeshwant Sahakari Bank Ltd. Bank Employees Union V/s.Yeshwant Sahakari Bank Ltd. Bank Employees Union V/s.Yeshwant Sahakari Bank Ltd. & Ors.[(1993) III LLJ supp. page 32]; Voltas & Ors.[(1993) III LLJ supp. page 32]; Voltas & Ors.[(1993) III LLJ supp. page 32]; Voltas Employees Union V/s. Voltas Ltd. & Ors.[(2007) I Employees Union V/s. Voltas Ltd. & Ors.[(2007) I Employees Union V/s. Voltas Ltd. & Ors.[(2007) I LLJ 854]; Tata Iron and Steel Company Ltd. V/s. LLJ 854]; Tata Iron and Steel Company Ltd. V/s. LLJ 854]; Tata Iron and Steel Company Ltd. V/s. The workmen and others [(1972) II LLJ 259); Tata Tea workmen and others [(1972) II LLJ 259); Tata Tea workmen and others [(1972) II LLJ 259); Tata Tea Ltd. (Bombay) Employees Union V/s.Tata Tea Ltd. & Ltd. (Bombay) Employees Union V/s.Tata Tea Ltd. & Ltd. (Bombay) Employees Union V/s.Tata Tea Ltd. & Anr.[2007 III CLR 724]; Hindustan Steel Workers Anr.[2007 III CLR 724]; Hindustan Steel Workers Anr.[2007 III CLR 724]; Hindustan Steel Workers Construction Ltd. and Anr. V/s Hindustan Steel Construction Ltd. and Anr. V/s Hindustan Steel Construction Ltd. and Anr. V/s Hindustan Steel Works Construction Ltd. Employees Union [2006 Lab. Works Construction Ltd. Employees Union [2006 Lab. Works Construction Ltd. Employees Union [2006 Lab. Industrial Cases 3956(S.C.); Punjab Land Dev. & Industrial Cases 3956(S.C.); Punjab Land Dev. & Industrial Cases 3956(S.C.); Punjab Land Dev. & Reclamation Corporation Ltd.,Chandigarh & Ors. V.s. Reclamation Corporation Ltd.,Chandigarh & Ors. V.s. Reclamation Corporation Ltd.,Chandigarh & Ors. V.s. The Presiding Officer, Labour Court Chandigarh and The Presiding Officer, Labour Court Chandigarh and The Presiding Officer, Labour Court Chandigarh and ors. [1990 Vol.II Current Labour Reports page 1]; ors. [1990 Vol.II Current Labour Reports page 1]; ors. [1990 Vol.II Current Labour Reports page 1]; and lastly Life Insurance Corporation of India V/s. Life Insurance Corporation of India V/s. Life Insurance Corporation of India V/s. D.J.Bahadur[AIR 1980 SC 2181]. D.J.Bahadur[AIR 1980 SC 2181]. D.J.Bahadur[AIR 1980 SC 2181]. 13. Before I proceed to consider the rival submissions, I would think it apposite to straightaway refer to the relevant provisions of the I.D.Act. Section 9A of the Act reads thus: "9A.Notice of change 9A.Notice of change 9A.Notice of change. - No employer, who proposes to effect any change in the conditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule, shall effect such change,- 10 (a) without giving to the workmen likely to be affected by such change a notice in the prescribed manner of the nature of the change proposed to be effected; or (b) within twenty-one days of giving such notice; Provided that no notice shall be required for effecting any such change- (a) where the change is effected in pursuance of any [settlement or award]; or (b) where the workmen likely to be affected by the change are persons to whom the Fundamental and Supplementary Rules, Civil Service(Classification, Control and Appeal) Rules, Civil Services(Temporary Service) Rules, Revised Leave Rules, Civil Service Regulations, Civilians in Defence Services(Classification, Control and Appeal) Rules or the Indian Railway Establishment Code or any other rules or regulations that may be notified in this behalf by the appropriate government in the Official Gazette, apply." For considering the points in issue, it will be useful to advert to Items 5 and 8 in the IV Schedule, which read thus: Conditions of service for change of which Conditions of service for change of which Conditions of service for change of which Notice is to be given. Notice is to be given. Notice is to be given. (1)..... (2)..... (3)..... 11 (4)..... (5) Leave with wages and holidays; (6)..... (7)..... (8) Withdrawal of any customary concession or privilege or change in ussage; (9)..... (10).... (11).... 14. There is no difficulty in straightaway accepting the stand of the Respondent that it is imperative to adopt contextual interpretation of the abovesaid provisions. To buttress this proposition, reliance was rightly placed on the exposition in paragraph-80 of the Constitution Bench decision of the Apex Court in the case of Punjab Land Dev & Punjab Land Dev & Punjab Land Dev & Reclamation Corporation Ltd. (Supra). Reclamation Corporation Ltd. (Supra). Reclamation Corporation Ltd. (Supra). Reference can also be usefully made to the observations in the case of Life Insurance Corporation of India(supra) Life Insurance Corporation of India(supra) Life Insurance Corporation of India(supra), where the Apex Court had occasion to consider the efficacy of provisions of Industrial Disputes Act. In paragraph-5, the Apex Court has emphasised about the role of Judges in the process of interpretation of statute, such as the provisions of the Industrial Disputes Act. In paragraph-8, Justice Krishna Iyer 12 observed that three key circumstances will have to be stressed, which colour the vision of social justice: (a) the factum of payment of bonus, without break, since 1959 by the Corporation to its employees, (b) the consciousness that the Management in this case is no asocial, purely profit-oriented private enterprise but a model employer, a statutory corporation, created by nationalisation legislation inspired by socialistic objectives; and (c) the importance of industrial peace for securing which a special legislation viz. the Industrial Disputes Act, 1947 has been in operation for 33 years. As can be discerned from the said decision, there is similarity in the circumstance considered in the said decision and in the case on hand. Even in the present case, the facility of encashment of leave without break is prevalent since 1979(almost about 25 years), albeit with slight modifications effected from time to time. Those modifications, however, did not impact the substance of the facility extended by the Management to its employees for all this period. 15. In paragraph-18 of the same decision, Justice Krishna Iyer observed that if law allows administrative negation of bonus, Judges are not to reason why; but whether law does allow nullification 13 of an industrial settlement is for judges to decide, not for the Administration to say, why not ? Having said this, the Court went on to consider the object of enacting legislation such as I.D.Act. In paragraph-22 of the Judgment, the Court observed that the ID Act is a benign measure which seeks to pre-empt industrial tensions, provide the mechanics of dispute resolutions and set up the necessary infrastructure so that the energies of partners in production may not be dissipated in counter productive battles and assurance of industrial justice may create a climate of goodwill. Their Lordship then observed that industrial peace is a national need and, absent law, order in any field will be absent. The Court then observed that to sum up, the personality of the whole statute(I.D.Act), be it remembered, has a welfare basis, it being a beneficial legislation which protects labour, promotes their contentment and regulates situations of crisis and tension where production may be imperiled by untenable strikes and blackmail lock-outs. The mechanism of the Act is geared to conferment of regulated benefits to workmen and resolution, according to a sympathetic rule of law, of the conflicts, actual or potential, between managements and workmen. Its goal is amelioration of 14 the conditions of workers, tempered by a practical sense of peaceful co-existence, to the benefit of both-not a neutral position, but restraints on laissez faire and concern for the welfare of the weaker lot. Their Lordships have noted that empathy with the statute is necessary to understand not its spirit, but also its sense. 16. Keeping the above dictum in mind, we shall proceed to consider the efficacy of Section 9A r/w Item Nos. 5 and 8 of IV Schedule. In the past, the Apex Court had occasion to consider the requirement of Section 9A and IV Schedule on more than one occasion. In the case of Hindustan Lever Hindustan Lever Hindustan Lever (Supra), Supra), Supra), in paragraph-8, the Apex Court has considered Item 11 of the IV Schedule. The Apex Court has observed that, though to bring the matter under this item the workmen are not required to show that there is increase in the workload, it must be remembered that the 4th Schedule relates to conditions of service for change of which notice is to be given and section 9A requires the employer to give notice under that section to the workmen likely to be affected of such change. It then observed that the word "affected" in the circumstances could only refer to the workers being adversely affected and unless it could be shown 15 that the abolition of one department has adversely affected the workers it cannot be brought under item 11. It further observed that the same consideration applies to the question of change in usage under item 8. In paragraph-11, after adverting to various decisions cited before it, the Apex Court proceeded to expound that a close scrutiny of the various decisions would show that whether any particular practice or allowance or concession had become a condition of service would always depend upon the facts and circumstances of each case and no rule applicable to all cases could be culled out from these decisions. 17. Reference can also be made to the decision of the Apex Court in the Harmohinder Singh(Supra) Harmohinder Singh(Supra) Harmohinder Singh(Supra). In paragraphs 12 and 13, the Court observed thus: "12. Section 9-A of the Act relied upon by the appellant only provides that an employer proposing to effect any change in the conditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule to the Act cannot affect such change without giving to the workmen notice in the prescribed manner. The provisions of the section are no doubt mandatory. But the preconditions to their applicability are: (i) There must be a change in the conditions of service; 16 (ii) the change must be such that it adversely affects the workmen; see Hindustan Lever Ltd. V. Ram Mohan Ray; and (iii) the change must be in respect of any matter provided in the Fourth Schedule to the Act. 13. In other words, not all changes are required to be notified. The Fourth Schedule provides for eleven conditions of service for change of which notice is to be given. Apart from the express conditions, there may be conditions which by a process of interpretation can be included within one or other of the eleven listed." (emphasis supplied) The highlighted observation in paragraph-13 of this decision, as reproduced hereinabove, will have to be kept in mind while considering the sweep of Item 5 and in particular Item 8 of the 4th Schedule, to the effect that apart from the express conditions, there may be conditions which by a process of interpretation can be included within one or other of the eleven listed. This will answer the argument of the Petitioner that the facility of encashment of leave is not covered by item 5 of the 4th Schedule as it merely refers to leave with wages and holidays. I shall deal with this aspect a little latter. 18. Reference can also be usefully made to the decision of the Apex Court in the case of Workmen of Workmen of Workmen of Food Corporation of India (Supra). Food Corporation of India (Supra). Food Corporation of India (Supra). The issue in that 17 case was arising out of introduction of change in respect of direct payment system agreed between the parties. That grievance of the workmen was examined in the context of Item 1 of 4th Schedule which refers to "wages, including the period and mode of payment". The Apex Court proceeded to observe that by cancelling the direct payment system and introducing the contractor, both the wages and the mode of payment are being altered to the disadvantage of the workmen, which would attract the rigours of section 9A of the Act. Going by the plain language of the Item, the change brought about by introducing contractor per se would not be covered by that item. However, by interpretative process, the Court took the view that cancelling direct payment system, which was the product of agreement between the parties and unilaterally introducing the contractor, that would affect the workers in relation to the wages and the mode of payment thereof. 19. It will be useful to refer to the decision in the case of Tata Iron and Steel Co. Ltd.(supra) Tata Iron and Steel Co. Ltd.(supra) Tata Iron and Steel Co. Ltd.(supra). In that case, the Court was called upon to consider the efficacy of Items 4 and 5 of the 4th Schedule. In paragraph-12 of the said decision, the Apex Court went on to observe that the entries dealing with 18 "hours of work and rest intervals" and "leave with wages and holidays" are wide enough to cover the case of illegal strikes and rest days. It then proceeded to observe that entry No.8 dealing with "withdrawal of customary concession or privilege or change in usage" is also wide enough to take within its fold the change of weekly holidays from Sunday to some other day of the week, because fixation of Sundays as weekly rest days is founded on usage and/or is treated as customary privilege and any change in such weekly holidays would fall within the expressions "change in usage" or "customary privilege." 20. With reference to this decision, Counsel for the Petitioner invited my attention to the observation of the single Judge of our High Court in the case of M/s. Mistry Lallubhoy and