IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 08.01.2007 CORAM THE HON’BLE MR. A.P.SHAH, CHIEF JUSTICE and THE HON’BLE MR. JUSTICE K.CHANDRU W.A.Nos.1372 to 1375 of 2006 --------- W.A.No.1372 of 2006 V.Elayaperumal ..Appellant. Vs. 1. State Bank of India, Asaveerankudikadu Branch, R.S.Mathur (via) Ariyalur Taluk, Tiruchirapalli District. 2. State Bank of India, rep. by the Deputy General Manager, Personnel Section, Zonal Office, Tiruchirapalli. 3. The Inspector of Labour, Tiruchirapalli. ..Respondents. W.A.No.1373 of 2006 C.Rathinasamy ..Appellant. Vs. 1. State Bank of India, Varadarajanpatti, Tiruchirapalli District. 2. State Bank of India, rep. by the Deputy General Manager, Personnel Section, Zonal Office, Tiruchirapalli. 3. The Inspector of Labour, Tiruchirapalli. ..Respondents. https://hcservices.ecourts.gov.in/hcservices/ W.A.No.1374 of 2006 M.Selvam ..Appellant. Vs. 1. State Bank of India, Ariyalur Branch, Tiruchirapalli District. 2. State Bank of India, rep. by the Deputy General Manager, Personnel Section, Zonal Office, Tiruchirapalli. 3. The Inspector of Labour, Tiruchirapalli. ..Respondents. W.A.No.1375 of 2006 B.Rengaraj ..Appellant. Vs. 1. State Bank of India, Pudukottai Branch, Kizha Raja Veethi, Pudukottai District 2. State Bank of India, rep. by the Deputy General Manager, Personnel Section, Zonal Office, Tiruchirapalli. 3. The Inspector of Labour, Tiruchirapalli. ..Respondents. PRAYER: Writ Appeals filed under Clause 15 of the Letters Patent, against the common order passed by the learned single Judge dated 07.09.2006 made in W.P.Nos.17573 to 17576 of 1997. Petition filed under Article 226 of the Constitution of India praying for issuance of writ of certiorari calling for the records from the file of the Inspectors of Labour Tiruchirappali the 1st Respondent herein and quash this order dated 31.01.1997 made in RC NO, 20382/1995. ------------ https://hcservices.ecourts.gov.in/hcservices/ For Appellants in All the Appeals :: Mr.N.G.R.Prasad For M/s.Row and Reddy For Respondents 1&2 in all the Appeals :: Mr.S.Jayaraman For 3rd Respondent in all the Appeals :: Mr.Raja Kalifulla, Govt. Pleader ------------ COMMON JUDGMENT (Judgment of the Court was delivered by The Hon’ble The Chief Justice) Admit. Heard learned counsel appearing for the parties. By consent, writ appeals are taken up for hearing. 2. Respondents 1and 2 are the State Bank of India and its officials. Respondent – 3 is the Inspector of Labour, Tiruchirapalli. It appears that during the period from 01.07.1975 to 31.12.1987, the respondent Bank had engaged temporary employees in the subordinate cadres in its various branches due to exigencies of circumstances and on account of urgent needs. The appellants were engaged as temporary sub-staff by the respondent Bank in various branches of the respondent Bank in Tiruchirapalli zone during that period. The Federation of the Bank Employees espoused the cause of the temporary employees resulting in five separate settlements. As per the said settlements, the eligible temporary employees have to be selected and wait listed as per number of days of service put in by them in the respective zone (module) wise; as and when vacancies arise, it would be filled up from the wait list; all the vacancies to be identified upto 31.12.1994 were to be filled up from the wait list; the wait list was to remain in operation till 31.03.1997 i.e., three years from the date of its preparation and the wait list would lapse on 31.03.1997. It appears that the appellants applied for absorption as per the settlements but they were not absorbed. According to the respondent Bank, as per the settlements, a list of temporary employees was prepared and the workmen who were on temporary employment have been included in the list and as and when vacancies arose, candidates from the wait list were absorbed permanently in accordance with the seniority in the wait list and since all the vacancies arising on 31.12.1994 are to be filled up from the wait list as per the seniority the claim of the appellants could not have been considered. 3. Being aggrieved, the appellants approached the 3rd respondent by filing applications under Section 3 of the Tamil Nadu Industrial Establishment (Conferment of Permanent Status to Workmen) Act, 1981 (hereinafter for brevity’s sake referred to as “the Permanent Status Act”). The appellants inter alia contended that they had been working in the respondent Bank’s https://hcservices.ecourts.gov.in/hcservices/ branches for more than 480 days in a period of 24 calendar months and thus, the appellants are entitled to permanency under the said Act on and from the date they had completed 480 days in a period of 24 calendar months with consequential benefits. In contesting the claim of the appellants, the respondent Bank submitted that the Bank is an establishment under the Central Government and therefore, it is exempted from the provisions of the Tamil Nadu Shops and Establishments Act (hereinafter referred to “the Shops Act”) and consequently, the provisions of the Permanent Status Act would also not applicable to the respondent Bank. It was contended that there is no necessity to seek exemption under Section 9 of the Permanent Status Act in view of the fact that there were existing settlements which relate to absorption of temporary employees as permanent employees. 4. By order dated 31.01.1997 the 3rd respondent rejected the contentions of the respondent Bank and held that though the respondent Bank is an establishment under the Central Government it does not cease to be an establishment for the purpose of the definition of the term “industrial establishment” under the Permanent Status Act. In this connection he placed reliance on the decision of the learned single Judge of this Court reported in Andhra Bank, Salem Vs. Inspector of Labour and Another (1994 (1) LLN 501). He further held that in the absence of records produced by the respondent Bank, the case of the workmen that they have put in more than 480 days of service has to be accepted and taken as true, and consequently, the appellants are entitled to permanent status on and from 01.01.1993. 5. Against the order of the 3rd respondent the respondent Bank preferred writ petitions which were heard and allowed by the learned single Judge, relying upon the decision of the Supreme Court in C.V.Raman Vs. Bank of India, (1998 (2) LLJ 423). The learned single Judge held that in view of Section 4(1)(c) of the Shops Act the Nationalized Banks are exempted from the operation of that Act and therefore, the provisions of the Permanent Status Act would also not apply to the Nationalised Banks, and therefore, the workmen are not entitled to any relief. The learned single Judge noted that the decision of the Supreme Court in C.V.Raman’s Case (supra) was not brought to the notice of the learned single Judge of this Court. Moreover, as against the decision of the learned single Judge in Andhra Bank’s Case (supra), writ appeal was preferred and a Division Bench of this Court has set aside the finding of the learned single Judge though the issue of applicability of the Permanent Status Act was expressly left open. 6. The short question that falls for our consideration is as to whether the Inspector of Labour had requisite jurisdiction under the Permanent Status Act to entertain the claim petitions of the workmen. In order to answer this question, it is necessary to take into consideration the relevant provisions of the Permanent Status Act as well as the Shops Act. https://hcservices.ecourts.gov.in/hcservices/ 7. Sub-section (1) of Section 3 of the Permanent Status Act deals with conferment of permanent status of workmen and confers permanency to every workman, who is in continuous service for a period of 480 days in a period of 24 calendar months in an industrial establishment. The permanent status to such a workman has been conferred, notwithstanding anything contained in any other law for the time being in force. From this, it is clear that two pre-requisites are to be fulfilled for conferment of permanent status to the workmen viz., (1) he must be in continuous service for a period of 480 days in a period of 24 calendar months and (2) such period of service must have been rendered in an industrial establishment. 8. Sub-section (3) of Section 2 of the Permanent Status Act defines “industrial establishment” which reads as follows: “2. Definitions – in this Act, unless the context otherwise requires – (3) “industrial establishment” means – (e) an establishment as defined in Cl.6 of Section 2 of the Tamil Nadu Shops and Establishments Act, 1947 (Tamil Nadu Act XXXVI of 1947……….” 9. From a mere perusal of the said clause, it is clear that the word “establishment” though not defined in it, has been defined by borrowing from the Shops Act. Therefore, one must refer to the relevant provisions of the Shops Act to find out the meaning of “establishment” for the purpose of the Permanent Status Act. 10. Sub-section (6) of Section 2 of the Shops Act defines “establishment” which reads as follows:- “2.Definitions:- In this Act, unless there is anything repugnant in the subject or context – (6) “establishment” means a shop, commercial, establishment, restaurant, eating house, residential hotel, theatre or any place of public amusement or entertainment and includes such establishment as the State Government may by notification declare to be an establishment for the purpose of this Act.” 11. The definition, as extracted above, means “commercial establishment” besides other establishments, specifically referred to therein. “Commercial establishment” is again, in turn, defined in Sub-section (3) of Section 2 of the Shops Act and it runs as under:- “(3) ‘commercial establishment’ means an establishment which is not a shop but which carries on the business of advertising, commission, forwarding or commercial agency or which is a clerical department of a factory or industrial undertaking or which is an insurance company, joint stock company, bank, broker’s office or exchange and includes such other establishment as the State Government may by notification declare to be commercial establishment for the purpose of this Act.” https://hcservices.ecourts.gov.in/hcservices/ 12. From a conjoint reading of Section 2(6) with 2(3) of the Shops Act it is seen that the Bank comes within the field of ‘commercial establishment’ included in ‘the establishment’ falling under Clause (e) of Sub-section (3) of Section 2 of the Permanent Status Act. For the purpose of Permanent Status Act, the definition of an ‘establishment’ as defined in the Shops Act had alone been borrowed and not the other provisions of the Shops Act. In such a situation, once an ‘establishment’ falls within the definition of ‘establishment’ under Clause (e) of Sub-section (3) of Section 3 of the Permanent Status Act, the inevitable conclusion is that the provisions of the said Act are applicable in construing the conferment of permanent status to any workman, who fulfills the criteria as laid down under Sub-section (1) of Section 3 thereof, notwithstanding anything contained in any other law for the time being in force, unless and until the Government, invoking its power under Section 9 of the Permanent Status Act exempts conditionally or unconditionally any employer or class of employers or any industrial establishments from the provisions thereof. Therefore, once the establishment is defined in the Permanent Status Act by incorporating the definition of establishment in the Shops Act the definition so incorporated in Permanent Status Act become part and parcel of the later Act. 13. The law on the subject is well settled. When an earlier Act or certain of its provisions are incorporated become part and parcel of the later Act as if they had been bodily transposed into it. The incorporation of an earlier Act into a later Act is a legislative device adopted for the sake of convenience in order to avoid verbatim reproduction of the provisions of the earlier Act into the later. But this must be distinguished from a referential legislation which merely contains a reference or the citation of the provisions of an earlier statute. In a case where a statute is incorporated, by reference, into a second statute, the repeal of the first statute by a third does not affect the second. The later Act along with the incorporated provisions of the earlier Act constitute an independent legislation which is not modified or repealed by a modification or repeal of the earlier Act. However, where in later Act there is a mere reference to an earlier Act, the modification, repeal or amendment of the statute that is referred, will also have an effect on the statute in which it is referred. It is equally well settled that the question whether a former statute is merely referred to or cited in a later statute, or whether it is wholly or partially incorporated therein, is a question of construction. 14. In Re: Wood’s Estate, Ex parte, Works and Buildings Commrs. (1986) 31 Ch D 607 at page 615 Lord Esher, M.R. observed: “If a subsequent Act brings into itself by reference some of the clauses of a former Act, the legal effect of that, as has often been held, is to write those sections into the new Act as if they had been actually written in it with the pen, or printed in it.” https://hcservices.ecourts.gov.in/hcservices/ 15. In U.P. Avas Evam Vikas Parishad Vs. Jainul Islam (AIR 1998 SC 1028) the Supreme Court has observed as follows:- “A subsequent legislation often marks a reference to the earlier legislation so as to make the provisions of the earlier legislation applicable to matters covered by the later legislation. Such a legislation may either be (i) a referential legislation which merely contains a reference to or the citation of the provisions of the earlier statute; or (ii) a legislation by incorporation whereunder the provisions of the earlier legislation to which reference is made are incorporated into the later legislation by reference. If it is a referential legislation the provisions of the earlier legislation to which reference is made in the subsequent legislation would be applicable as it stands on the date of application of such earlier legislation to matters referred to in the subsequent legislation. In other words, any amendment made in the earlier legislation after the date of enactment of the subsequent legislation would also be applicable. But if it is a legislation by incorporation the rule of construction is that repeal of the earlier stature which is incorporated does not affect operation of the subsequent statute in which it has been incorporated. So also any amendment in the statute which has been so incorporated that is made after the date of incorporation of such statute does not affect the subsequent statute in which it is incorporated and the provisions of the statute which have been incorporated would remain the same as they were at the time of incorporation and the subsequent amendments are not be read in the subsequent legislation.” 16. This is a reiteration of the principle as laid down by earlier judgments of the Supreme Court in a catena of decisions including Mary Roy Vs. State of Kerala (1986 (2) SCC 209); Ramsarup Vs. Munshi (AIR 1963 SC 553: Ram Kripal Bhagat Vs. State of Bihar (AIR 1970 SC 951); Bolant Ores Ltd. Vs. State of Orissa (AIR 1975 SC 17); Mahindra and Mahindra Ltd. Vs. Union of India (AIR 1979 SC 798). 17. In the instant case, the definition of establishment is virtually lifted from the Shops Act and has been incorporated in the Permanent Status Act. Therefore, the provisions of Clause (c) of Sub-Section (1) of Section 4 of the Shops Act which exempt the establishments under the Central Government is of no consequence and the Permanent Status Act would continue to apply for such establishments unless and until exemption has been obtained from the State Government under Section 9 of the Permanent Status Act. In C.V.Raman’s Case which was referred to by the learned single Judge, the Court was concerned with the question as to whether the provisions of Shops Act would be applicable to the Nationalised Bank in view of exemption granted under Section 4(1) (c). Therefore, the above decision has no relevance for the https://hcservices.ecourts.gov.in/hcservices/ determination of the issue involved in the present case. Consequently, we hold that the provisions of the Permanent Status Act will apply to the Banks including Nationalised Banks. 18. In the light of foregoing discussion, the order of the learned single Judge is set aside. The matter is remitted back to the learned single Judge for deciding the issue of permanency in accordance with law. In the circumstances of the case, the learned single Judge is requested to decide the case as expeditiously as possible, preferably within a period of three months from today. Accordingly, all the writ appeals are allowed. No costs. vbs/sm Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar Copy to:- 1. The Manager State Bank of India, Asaveerankudikadu Branch, R.S.Mathur (via) Ariyalur Taluk, Tiruchirapalli District. 2. The Deputy General Manager,State Bank of India, Personnel Section, Zonal Office, Tiruchirapalli. 3. The Inspector of Labour, Tiruchirapalli. 4. The Manager State Bank of India, Varadarajanpatti, Tiruchirapalli District. https://hcservices.ecourts.gov.in/hcservices/ 5. The Manager State Bank of India, Ariyalur Branch, Tiruchirapalli District. 6. The Manager State Bank of India, Pudukottai Branch, Kizha Raja Veethi, Pudukottai District 7. The Section Officer, Appeal Filing Section, High Court, Madras 8. The Section Officer, Writ Section, High Court Madras + one cc to M/s. Row and Reddy Advocate sr no. 1536 + one cc to Mr. S. Jayaraman, advocate sr no. 1999 + one cc to the Government Pleader sr no. 1558 PV(cO) NM(12.03.07) W.A.Nos.1372 to 1375 of 2006. https://hcservices.ecourts.gov.in/hcservices/