Case: State Of Assam &amp; Anr Vs. Bharat Kala Bhandar Ltd. &amp; Ors

elaborate procedure provided for resolution of industrial disputes by industrial tribunals may not be desirable. Even so in the absence of express words in sub-r. (4) to show that the power thereunder depends for its exercise entirely on the subjective satisfaction of Government we would not be prepared to hold that that is what sub-r. (4) indicates. We have already said that the effect of sub-r. (4) is to disturb settled industrial relations whether based on contracts or on industrial awards, and it seems to us that before Government exercises the power under sub-r. (4) it should even in a real emergency consult the interests concerned before taking action thereunder. 28. It is not for us to indicate in detail what should be the procedure adopted by Government in a real emergency to consult the interests concerned, as that is a matter for Government to evolve for itself. But we may indicate that some kind of public notice to the particular interests should be given indicating what the Government intends to do and inviting representations from those interests and if necessary calling for data from them and also giving an oral hearing to the representatives of the interests concerned. This does not mean that notice should he given to individual employers or employees. Nor do we mean to say that this consultation should be of the same amplitude as adjudication by a quasi-judicial tribunal. It is not necessary that oral evidence should be taken and witnesses should be called, examined and cross-examined and documents produced or called for and arguments heard as if the matter was being tried by a quasi-judicial tribunal. But some kind of collection of data with the help of the interests concerned and some kind of hearing or conference with the interests concerned seems to us to be the barest minimum necessary to enable Government to exercise the power conferred under sub-r. (4) for we have no doubt that this sub-rule does not intend that Government should have power of the far-reaching nature conferred thereunder purely on its subjective satisfaction. Further if such consultation is necessary under sub-r. (4) and it seems to us that it is necessary-before an order can be passed thereunder, it would in our opinion be more convenient to hold consultation employment by employment, for it may be that needs of every employment may not be the same. After such consultation and consideration of data collected by Government itself as well as supplied by the interests concerned, it would be open to Government to pass an order under sub-r. (4) indicating that it has considered the data and consulted the interests concerned. We have indicated this procedure merely to illustrate what we say; but it is for Government to evolve such procedure as it considers will meet the needs of sub-r. (4). Once it is clear, as we have no doubt that it is so, that the order under sub-r. (4) is not to be passed merely on the subjective satisfaction of Government, it seems to us that even in a real emergency this consultative procedure should not take long and should be over within a few weeks. 29. It has been urged on behalf of the appellant that though the appellants contention has been that the power under sub-r. (4) can be exercised purely on the subjective satisfaction of Government, in effect the Government had consulted the interests concerned before issuing the two notifications under sub-r. (4) and therefore the two notifications should be upheld. In this connection, an affidavit was filed on behalf of the appellant in this Court and the contention that there was consultation is based on that affidavit. The facts stated in that affidavit are these. Soon after the Chinese invasion in 1962, the Labour Minister, Assam called an emergent meeting at Gauhati of the representatives of employees and workmen. 49 persons including about 17 representatives of employers attended the meeting. Unanimous resolutions were passed exhorting the employers and workmen to keep industrial peace and it was resolved to set up a Sub-Committee for the purpose of working out details of a machinery to be set up for adjustment of D. A. to neutralise any rise in the cost of living. A Sub-Committee consisting of three officials, three representatives of employers and three of workmen was set up. This Sub-Committee submitted its report in July 1964 and evolved a formula to neutralise any rise in working class cost of living of workers getting a salary of Rs. 400 or less. Complaints were received from Industrial Workers Unions of Tinsukia and Kamrup Districts in 1963 and 1964 about rise in prices of essential commodities and requests were made to Government to grant substantial emergency allowance. Consequently after consultation with the Director of Statistics on the rise in the cost of living the Government on a consideration of all this material and the report of the Sub-Committee decided to issue the notifications in questions ordering payment of Ad Hoc cost of living allowance of Rs. 10 per mensem to all workers driving upto Rs. 400 per mensem whether monthly rated or daily rated. This affidavit has been challenged on behalf of the respondents: but accepting it as correct, it still in our opinion falls short of the consultation necessary under sub-r. (4). As we have said already, the consultation must be with the interests concerned including employers and employees and should be employment by employment for needs of every employment may not be the same. All that we may accept after considering the affidavit filed on behalf of the appellant is that the notifications in question were not issued entirely arbitrarily but we do not think that the consultation to which reference was made in the affidavit of the appellant was enough for the purpose of sub-r. (4). We are therefore of opinion that the two notifications should be struck down and we do so, but for reasons different from those which commended themselves to the High Court. 30.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]13. This analysis of R. 126-AA shows that it is a provision for maintenance of essential services during an emergency, and it is with that object that various powers are conferred on the Central Government or the State Government including the pointer of regulating wages and other conditions of service of persons engaged in essential services indicated in sub-r. (1) or declared to be such thereunder. It is with this back-ground of emergency that we have to construe the provisions contained in sub-r. (1) and also sub-r. (4) with which we are particularly concerned in the present appeals14. Turning first to sub-r. (1), we have already indicated that this sub-rule by its own force declares all employments under the Central Government or the State Government to be essential services for its purposes. Besides these two classes of employments, the Central Government or the State Government has been given the power to declare other employments also to be essentia1 for the purpose of sub-r. (1) and to be covered thereby. This the Central Government or the State Government can do by notification, if it is of opinion that such employment or class of employments is essential for securing any of the purposes mentioned in the sub-rule. It was under this power that the Governor of Assam issued the notification dated September 26, 1964 under sub-r. (1) The notification refers to a large number of employments and states that the Governor of Assam was of opinion that the employments specified therein were essential for securing public safety and for maintaining supplies and services necessary to the life of the community. The notification has been issued under the authentication of the Joint Secretary to the Government of Assam Labour Department. As it stands the notification is clearly in compliance with the provisions contained in sub-r. (1) of R. 126-A A.It is true that the notification has included a large number of employments in it; but we do not see why one notification may not he issued with respect to any number of employments, though there can be no objection to the Government issuing one notification with respect to one employment only. The mere fact that a notification includes within it a large number of employments is no ground for holding, as the High Court seems to have held that the Governor did not apply his mind to the conditions precedent to the issue of the notification. Nor do we think that the fact that the notification in question gave two purposes for its issue, namely, for securing public safety and for maintaining supplies and services necessary to the life of the community shows that the Governor did not apply his mind to the conditions precedent to the issue of the notification. Further when the Governor says in the notification that the employments included therein were essential for securing the public safety and for maintaining supplies and services necessary to the life of the community, he obviously holds the opinion that these employments were essential for both purposes. It was not, therefore, necessary for the Governor to specify which of the employments were essential for the purpose of maintaining supplies and services necessary to the life of the community and which were essential for the purpose of securing public safety. The notification, as it reads, indicates that in the opinion of the Governor these employments were essential for both purposes. We do not think, therefore, that the High Court was right in holding that as the notification does not show which employment was essential for which purpose, the Governor had not applied his mind and the notification was, therefore, colourable and mala fide in lawIt appears that in some of the writ petitions "defence" was introduced by the petitioners as a ground for the issue of the notification of sub-r. (1); so in the reply of the State the same ground was mechanically repeated in the counter-affidavit without carefully looking into the notification which had been issued under sub-r. (1).It is because of this mechanical introduction of defence by the State in the counter-affidavit that the High Court has held that it showed that the authority had equated public safety with defence and that the Government misconceived its powers and had no clear conception of the scope and ambit thereof. There is no doubt that the word "defence" came in the counter-affidavit mechanically in reply to the introduction of the word "defence" in many of the writ petitions. What the Court has to see is whether the conditions precedent were complied with at the time of the issue of the notification. It is unfortunate that in the counter-affidavit the word "defence" was introduced mechanically in reply to what was said in the writ petitions. But that in our opinion should not have led the High Court to the conclusion at which it has arrived, namely, that the Government misconceived its powers and had no clear conception of the scope and ambit thereof. In the circumstances we are inclined to attach no importance to the introduction of the word "defence" in the counter-affidavit filed on behalf of the State as it seems that that word came in mechanically in reply to the introduction of the word "defence" in some of the writ petitions16. It is clear that a notification under sub-r. (1) is conditioned on the subjective satisfaction of the Central Government or the State Government as to the various purposes mentioned in sub-r. (1)We are of opinion that both these grounds for holding that the conditions precedent to the issue of the notification under sub-r. (1) have not been fulfilled cannot be sustained. As the notification reads, it shows that the employments mentioned therein were essential for both purposes and this must be held to be the opinion of the Governor. That opinion cannot in our view be challenged in Court unless it is shown to be mala fide or it is shows that no reasonable man can come to that conclusion in the context of the employments specified in the notification. We cannot agree with the High Court that simply because a large number of employments were mentioned in one notification that can by itself show that the Governor had not applied his mind. Nor can we agree with the High Court that because two purposes were mentioned as the basis of the notification and as there was nothing to show which employment referred to which purpose, there is no formation of opinion. As we read the notification it must be held that the Governors opinion was formed with respect to the employments specified in he notification on the basis of both the purposes mentioned in the notification. The only thing that the High Court could see was whether considering the nature of the employments it was impossible for any reasonable man to come to the opinion that those employments were essential for securing public safety and for maintaining supplies and services necessary to the life of the community, and this has to be judged in the context of an emergency. It seems to us that where certain employments are "essential for the maintenance of supplies and services necessary to the life of the community the Governor may very well come to the conclusion that those employments are also necessary for securing public safety, for if supplies and services necessary to the life of community are not maintained, there may be danger to public safety. In these circumstances we cannot agree with tire High Court that the two purposes mentioned in the notification have no nexus with the employments specified therein, except in one case. We cannot also agree with the High Court that no reasonable man could come to the conclusion that the employments mentioned in the notification were essential for the two purposes which were the basis of the notification except again in the case of one employment. We have looked through all the employments which are included in the notification and it is enough to say that except in one case it cannot be said that no reasonable man could come to the conclusion that those employments were essential for securing public safety and for maintaining supplies and services necessary to the life of the community18. The only exception we find is veneer mills. Veneering, we understand, is a process by which thin flat plates or slips of fine wood or other suitable material are applied to other inferior wood in cabinet work or similar other furnitureWe fail to see how veneer mills which carry on this process of laying finer wood on inferior wood for purposes of beautifying furniture. etc., can be said by any reasonable man to be essential for the maintenance of supplies and services necessary to the life of the community and for securing public safety. It is open to us to strike down the notification under sub-r. (1) with respect to veneer mills alone, for the present notification including a large number of employments can be read to amount to so many single notifications, relating to each employment, rolled into one. Therefore, as we see the notification under sub-r. (1) we see no reason to hold that the Governor had not applied his mind to the conditions precedent before he issued the notification in question. We are also satisfied except in the case of veneer mills that it cannot be raid that no reasonable man could have come to the conclusion that the employments included in the notification were not essential for securing public safety and for maintaining supplies and services necessary to the life of the community. In this view of the matter we cannot see how the notification under sub-r. (1) can be said to be for any extraneous purpose unconnected with the purposes mentioned in the sub-rule; nor is there any reason to hold that the employments mentioned in the notification (except one) were not essential for securing public safety in addition to maintenance of supplies and services necessary to the life of the community. Nor do we see any reason to hold that the notification under sub-r (1)was mala fide.We have already mentioned that there are no mala fides in fact and we do not think there can be any question of any mala fide in law in view of what we have said above. We, therefore, uphold the notification under sub-r. (1), dated September 26, 1964 except in the case of veneer mills. We strike down the notification only with respect to the veneer mills mentioned at Item 5 of the employments included therein19. We now come to the two notifications under sub-r.(4). Incidentally we may mention that though the second notification is, dated November 4, 1964, the letter written by the Department of Labour, Government of Assam, to the Charduar Cotton Mills says that the cost of living allowance for persons engaged on daliy wages provided in the notification of November 4, 1964 should be paid from September 26, 1964. Now there is nothing in the notification of November 4, 1964 to show that it was retrospective, and we cannot understand how the Department of Labour advised the Mills in question to pay cost of living allowance to persons engaged on daily wages from September 26, 1964, which was the date of the notification under sub-r. (1). Nor do we think that there is anything in sub-r. (4) which authorises the Government to make an order thereunder with retrospective effectWe cannot agree with the High Court that it was necessary to recite in the notifications under sub-r. (4) that action was being taken thereunder for the purpose of securing public safety and for maintaining supplies and services necessary to the life of the community. Nor do we think that sub-r. (4) requires that notifications should show that the two purposes would in fact be achieved by the provision made thereunder. Further it is clear that the power under sub-r. (4) is not for fixation of minimum wages. It is power to regulate wages and this power is analogous to the power of industrial tribunals and, therefore the fact that there is provision in the Minimum Wages Act for fixation of minimum wages is no ground for holding that the power exercised by sub-r. (4) must be colourable. The two reasons given by the High Court for striking down the two notifications and holding them mala fide do not, appear to us to be correct. But this in our opinion is not the end of the matterThe notifications seem to proceed on the view that powers exercised thereunder are entirely within the subjective satisfaction of Government and it is that view which we must examine now22. We have already indicated that the power conferred by sub-r. (4) is consequential to the issue of a notification under sub-r. (1), in case of employment other than those under the Central Government or the State Government. Once the notification under sub-r. (1) is issued, the Central Government or the State Government has the power to regulate the wages and other conditions of service of persons or any class of persons engaged in any employment or class of employment included in the notification. Of course, the wages and other conditions of service of Central Government and State Government employees are also liable to be regulated under sub-r. (4). But it is unnecessary to refer to that aspect of the matter and what we say hereafter may be taken to apply only to those employments which are brought under R. 126-AA. by issue of a notification under sub-r. (1) thereofThe present case, however which deals with regulation of wages and other conditions of service and has a far-reaching effect on industrial relations based on contracts or even on industrial awards stands on a different footing altogether and cannot be governed by the ratio of that case25. We do not think it necessary in the present appeals to consider the various other rules to which reference has been made. Nor would it be desirable to do so for those rules do not arise for interpretation in the present appeals. We propose therefore to confine ourselves to sub-r. (4) with which alone we are concerned in these cases27. We have already set out sub-r. (4) and a perusal of its language will show that there is nothing in the words themselves which plainly and unambiguously indicates that the power exercised thereunder depends purely on the subjective satisfaction of Government. It is true that sub-r. (4) so far as it applies to employments other than those of Government is consequential on a notification under sub -r. (l). But that does not mean in the absence of express words in sub-r (4) that the power exercised thereunder depends purely on the subjective satisfaction of Government. We have already indicated that the power under sub-r. (4) is analogous to the power of industrial tribunals to decide disputes between employers and employees. The result of the exercise of the power under sub-r. (4) is to vary the contractual relations between employers and employees concerned in employments with respect to which a notification under sub-r. (1) has been issued. The effect of the exercise of such power is to unsettle settled relations between employers and employees which may be existing for a long time and which may be the outcome either of contractual relations or even of industrial awards. Sub-rule (4) not only deals with wages but also with other conditions of service and thus in a real emergency may practically supersede all industrial adjudication. The power conferred is thus of a far-reaching nature in the field of industrial relations and may have the effect of disturbing all such relations for the duration of a real emergency. The question therefore arises whether in the absence of express words in sub-r. (4) to indicate that the power is to be exercised purely on the subjective satisfaction of Government we should hold that an order under sub-r. (4) can be passed purely on such subjective satisfaction. When the effect of orders passed under sub-r. (4) can be so far-reaching and so wide in its impact we would be loath to hold that such wide and far-reaching powers were conferred on Government to be exercised purely on its subjective satisfaction without even consulting the interests concerned specially when the language is not plain and unambiguous and there is no indication in the sub-rule itself that the power can be exercised purely on the subjective satisfaction of Government. We are not unmindful of the fact that the power under sub-r. (4) has to be exercised in a real emergency. But the ambit of the power therein is analogous to the power of industrial courts. The power under sub-r. (4) may be exercised instead of referring industrial disputes relating to wages and other conditions of service to industrial tribunals. We are also not unmindful of the fact that in a real emergency, decisions may have to be taken quickly and delay inevitable in the elaborate procedure provided for resolution of industrial disputes by industrial tribunals may not be desirable. Even so in the absence of express words in sub-r. (4) to show that the power thereunder depends for its exercise entirely on the subjective satisfaction of Government we would not be prepared to hold that that is what sub-r. (4) indicates. We have already said that the effect of sub-r. (4) is to disturb settled industrial relations whether based on contracts or on industrial awards, and it seems to us that before Government exercises the power under sub-r. (4) it should even in a real emergency consult the interests concerned before taking action thereunder28. It is not for us to indicate in detail what should be the procedure adopted by Government in a real emergency to consult the interests concerned, as that is a matter for Government to evolve for itself. But we may indicate that some kind of public notice to the particular interests should be given indicating what the Government intends to do and inviting representations from those interests and if necessary calling for data from them and also giving an oral hearing to the representatives of the interests concerned. This does not mean that notice should he given to individual employers or employees. Nor do we mean to say that this consultation should be of the same amplitude as adjudication by a quasi-judicial tribunal. It is not necessary that oral evidence should be taken and witnesses should be called, examined and cross-examined and documents produced or called for and arguments heard as if the matter was being tried by a quasi-judicial tribunal. But some kind of collection of data with the help of the interests concerned and some kind of hearing or conference with the interests concerned seems to us to be the barest minimum necessary to enable Government to exercise the power conferred under sub-r. (4) for we have no doubt that this sub-rule does not intend that Government should have power of the far-reaching nature conferred thereunder purely on its subjective satisfaction. Further if such consultation is necessary under sub-r. (4) and it seems to us that it is necessary-before an order can be passed thereunder, it would in our opinion be more convenient to hold consultation employment by employment, for it may be that needs of every employment may not be the same. After such consultation and consideration of data collected by Government itself as well as supplied by the interests concerned, it would be open to Government to pass an order under sub-r. (4) indicating that it has considered the data and consulted the interests concerned. We have indicated this procedure merely to illustrate what we say; but it is for Government to evolve such procedure as it considers will meet the needs of sub-r. (4). Once it is clear, as we have no doubt that it is so, that the order under sub-r. (4) is not to be passed merely on the subjective satisfaction of Government, it seems to us that even in a real emergency this consultative procedure should not take long and should be over within a few weeksThis affidavit has been challenged on behalf of the respondents: but accepting it as correct, it still in our opinion falls short of the consultation necessary under sub-r. (4). As we have said already, the consultation must be with the interests concerned including employers and employees and should be employment by employment for needs of every employment may not be the same. All that we may accept after considering the affidavit filed on behalf of the appellant is that the notifications in question were not issued entirely arbitrarily but we do not think that the consultation to which reference was made in the affidavit of the appellant was enough for the purpose of sub-r. (4). We are therefore of opinion that the two notifications should be struck down and we do so, but for reasons different from those which commended themselves to the High Court.