Case: United Provinces Electric Supply Co. Ltd. Allahabad Vs. T. N. Chatterjee

The appellant, which is a limited liability company and which later on went into voluntary liquidation, was carrying on the business or undertaking of generation, distribution and supply of electricity. One of such undertakings was the Electric Supply Undertaking at Allahabad in the State of Uttar Pradesh. Its affairs and business were being looked after and managed by Martin Burn and Co. Ltd., Calcutta. Some of the appellants workmen in Allahabad and its surrounding area were members of Bijli Mazdoor Sangh - a trade union registered under the Indian Trade Union Act, 1926. The U. P. State Electricity Board compulsorily acquired and took over the assets of the appellants aforesaid undertaking or business with effect from 16/17th September 1964.3. In accordance with the provisions of the Industrial Employment (Standing Orders) Act 1946, hereinafter called the Act and the U. P. Industrial Employment (Standing Orders) Rules 1946 the appellant submitted draft Standing Orders defining the conditions of employment of its employees. On July 14, 1951 these orders were certified by the Certifying Officer. Clause 32 of the Standing Orders was in the followingRETIREMENT- An employee who has served 30 years or who has reached the age of 55 will be retired, but exemption to this may be granted by the Company in specialworkmen through the Bijli Mazdoor Sangh preferred an appeal under S. 6 of the Act from the order of the Certifying Officer to the State Industrial Tribunal which was the appellate authority under the Act. That appeal, however, was dismissed. The Agra Electric Supply Co. Ltd. Agra and Benaras Electric Light and Power Co. Ltd. Varanasi, which is the appellant in the connected appeal (C. A. 164/68) also got certified Standing Orders in similar terms. These electric undertakings were also under the management of Martin Burn and Co. Ltd. On July 16, 1959 notices were served on seven workmen with effect from September 1, 1959 on the ground that they had attained the age of superannuation or completed 30 years of service and they were retired by reason of their having attained the age of superannuation. Out of these workmen one of them Haider Ali died during the pendency of proceedings. The other six employees have been impleaded as respondents Nos. 1 to 6 in the present appeal.4. According to the appellant these respondents accepted all the accumulations due to them in respect of Provident Fund contributions made by the appellant in respect of them and by themselves and were also paid gratuities credited to them in their respective Provident Fund accounts for their services prior to their becoming members of the Provident Fund.5. By an order dated February 22, 1960 made under Section 4-K of the U. P. Industrial Disputes Act 1947 the Government of U. P. referred to the Industrial Tribunal (I) at Allahabad for adjudication of an industrial dispute alleged to exist between the appellant and its workmen on the followingthe employers have wrongfully and/or unjustifiably retired their workmen, mentioned in the Annexure, with effect from 1st August, 1959? If so, to what relief are the workmen1 to 6 and Haider Ali (since deceased) were the workmen mentioned in the Annexure. The case of the workmen before the Industrial Tribunal was that they had entered service of the appellant prior to the certification of the Standing Orders. At the time of their appointment there was no condition that they would be liable to retirement after attaining any prescribed age or after putting in any fixed period of service. A practice was in vogue that the workmen would continue in service till he was physically fit. Accordingly Clause 32 of the certified Standing Orders was neither binding nor enforceable. The Industrial Tribunal made an award on May 2, 1960 finding, inter alia, (a) the employers were within their rights in retiring the workmen concerned. (b) the act of the employers in compulsorily retiring the concerned workmen from service could not be characterised as wrongful, illegal or unjustified and (c) the workmen were entitled to no relief.6. On June 14, 1960 the Bijli Mazdoor Sangh moved an application under Section 10 (2) of the Act for amendment and modification of Clause 32 claiming fixation of retirement age at 60 years. On September 20, 1960 the Union also filed a writ petition in the Allahabad High Court for quashing the award. On April 22, 1961 the Certifying Officer modified Clause 32 and fixed the age of retirement at 58 years. On September 10, 1961 the appellate authority refixed the age of retirement at 55 years. Similarly appeals were filed by the Agra Electric Co. and the Benaras Electric Light and Power Co. Ltd. in which similar orders were made. On July 12, 1966 the High Court recorded an order quashing the award. It was held that Standing Order 32 was not applicable to the employees who had entered service before the certification of the Standing Orders. The Industrial Tribunal was directed to rehear the case and after giving an opportunity to the parties of being heard give an award in accordance with law. Finally the award against which the appeal has been brought was given on May 19, 1967. It was held in the award that all the seven workmen had been wrongfully and unjustifiably retired and that they should be deemed to have continued in service till September 16, 1964 from which date they would be taken to have been retrenched. The appellant having been taken over by the U. P. State Electricity Board, it was directed that the employers should pay full wages from the period August 1, 1959 to September 16, 1964 and retrenchment compensation within Section 25-Fread with Section 25-FF and Section 25-J of the Industrial Disputes Act, 1947.

Court's reasoning:
In our opinion the principle applied in the latter case is fully supported by the scheme of the Act and was rightly extended and applied in Agra Electric Supply Co. Ltd. (1970) 1 SCR 808   = (AIR 1970 SC 512  ).We concur with the view expressed therein that it was not intended by the legislature that different sets of conditions should apply to employees depending on whether a workman was employed before the Standing Orders were certified or after, which would defeat the very object of the legislation. In the preamble it is stated in categorical terms "whereas it is expedient to require employers in industrial establishments to define with sufficient precision the conditions of employment under them and to make the said conditions known to workmen employed by them". Not only the object but the scheme of the Act is such that the employers must define precisely the conditions of employment of all the employers must define precisely the conditions of employment of all the employees and have the same certified by the Certifying Officer against whose orders an appeal lies to the appellate authority. The right given to workmen to express their view and to raise objections is of great significance. They can even ask for modification of the Standing Orders in accordance with Section 10 of the Act. Every possible safeguard has been provided for keeping the workmen informed about their conditions of service so that they can take whatever steps they desire or are advised to take in their interest before the Certifying Officer or the appellate authority. It is also very difficult to conceive taking each individual item in the schedule how there can be different conditions for different employees depending upon the point of time when they came to be employed; for instance Item 3 relates to shift working. Is it possible to suggest that for the same kind of work employees who were in employment before the Standing Orders were certified would have different hours of shift from the other employees who were employed subsequently? In the very nature of things a great deal of irritation and annoyance between employees inter se would result if any such discrimination is made in any of the items in the Schedule. It has been rightly pointed out in Agra Electric Supply Co. Ltd. that this would only lead to industrial unrest and not industrial peace, the latter being the principal object of legislation.In our judgment much assistance or help cannot be derived from Para 16 of the Model Standing Orders as contained in Schedule 1 to the Industrial Employment (Standing Orders) Central Rules 1946. Retirement which is mentioned there may be under the terms of contract of employment entered into between the employer and the employees. Section 2 (oo) of the Industrial Disputes Act 1947, throws a certain amount of light on thepresent case is clearly distinguishable inasmuch as the order made by the High Court was not final and a remand had been directed presumably under Art. 227 of the Constitution. That order in fact did not finally terminate any proceedings at all. The proceedings were terminated only by the award against which the present appeal has been brought by special leave. We are unable to see how the decision in the aforesaid case can afford any assistance to the respondents before us. Indeed the case which is more apposite is Satyadhyan Ghosal v. Smt. Deorajin Debi, (1960) 3 SCR 590   = (AIR 1960 SC 941  ). There an order of remand had been made by the High Court while exercising powers under S. 115 of theCode of Civil Procedure. It was observed after referring to the various decisions of the Privy Council, that the order of remand was interlocutory and did not purport to dispose of the case. A party is not bound to appeal against every interlocutory order which is a step in the procedure that leads up to a final decision or award. The following observations from this case may be reproduced withjudgments which have the force of a decree must be distinguished from other interlocutory judgments which are a step towards the decision of the dispute between parties by way of a decree or a finalare unable, therefore, to accede to the contention that the rule of res judicata could be invoked by the respondent in the present case.