WEEK 2-4

1. Dena Bank v. Kiritikumar T. Patel

RULE: 17 (B)- Payment of full wages to workmen pending proceedings in higher courts.

FACTS:

● The Respondent (clerk-cum-cashier of the Appellant-Bank) was dismissed on July 1,

1986 after an enquiry into charges relating to misappropriation of funds of the Appellant-
Bank in the charge sheet dated June 18, 1983.
● The matter became an ‘industrial dispute’ and was referred to the Central Industrial
Tribunal.
● The Tribunal held that dismissal of the Respondent was illegal as the charges were not
established and directed reinstatement.
● Subsequently, the Appellant-Bank appealed before the Gujarat High Court challenging
the order of the Tribunal.
● The High Court passed an interim order staying the operation of the award on the
condition that the appellant-Bank would comply with the provisions of Section 17B of
the Act and will pay to the Respondent during pendency of the writ petition wages last
drawn or which would have been drawn if he was not suspended.
● The Respondent sought revision of the wage structure to include Dearness Allowance and
other perquisites.
● High Court passed an order directing that the Respondent shall be paid the wages as
revised by the Appellant-Bank including the increments, D.A., etc. which are granted to
all the employees pursuant to two settlements signed during the pendency of the writ
petition between the banking industry and the All India Trade Unions and that arrears be
paid to him from the date of the award accordingly.

ISSUE: Whether the expression "full wages last drawn" in Section 17B of the Industrial Disputes
Act, 1947 means wages drawn by a workman at the time of termination of his employment or
wages which he would have drawn on the date of the award?

HELD:

● The learned Court here held that Section 17-B has been enacted with a view to give relief
to a workman who have been ordered to be reinstated under the award of a Labour Court
or the Industrial Tribunal during the pendency of proceedings in which the said award is
under challenge before the HC or SC.
● The object underlying the provision is to relieve to a certain extent the hardship that is
caused to the workman due to delay in the implementation of the award.
 ● The payment which is required to be made by the employer to the workman is in the
nature of subsistence allowance which would not be refundable or recoverable from the
workman even if the award is set aside by the higher courts.
● If the court interprets “full wages last drawn” to mean wages which would have been
drawn by the workman if he had continued in service if the order terminating his services
had not passed, since it has been set aside by the award of the Labour Court or the
Industrial Tribunal, it would result in so enlarging the benefit and cast an unreasonable
burden on the employer.
● The High Court’s direction of payment of wages as revised, including the increments,
DA etc. direction cannot be upheld since it amounts to directing payment of wages which
would have been drawn by the respondent if he had been reinstated and not the full wages
last drawn by him.
● The appeal by the Bank was thus allowed.

2. Dena Bank v. Ghanshyam

RULE: 17 (B)- Payment of full wages to workmen pending proceedings in higher courts.

FACTS:

● The Respondent was engaged as a personal driver by the Regional Manager of the Dena
Bank at Lucknow (the Appellant).
● At the end of the tenure of the incumbent Regional Manager, the services of the
Respondent were terminated with effect from August 1990.
● The Respondent claimed to be a workman of the Dena Bank and raised an industrial
dispute under the IDA with regard to his retrenchment.
● The Labour Court passed an award holding that the Respondent was a driver of the
Dena Bank, termination of his service was bad in law and ordered his reinstatement
with back wages.
● A Writ Petition was filed challenging the award before the High Court of Uttar Pradesh;
the High Court directed Dena Bank to pay regular pay-scale to the respondent with
effect from December 6, 1996, within a month from the date of production of a certified
copy of that order failing which the Bank should appear before the court.
● Dena Bank filed this appeal challenging the order of the High Court.

ISSUE: Whether the HC erred in directing payment of regular salary payable on reinstatement
which was higher than the full wages last drawn mandated under S. 17(B)?
ARGUMENTS:

● Appellants (Bank): Under Section 17B of the Act, the Respondent is entitled to the
wages last drawn as interpreted by the Court in Dena Bank vs. Kiritikumar T. Patel. The
pay last drawn by the Respondent before termination of his services was Rs. 900, which
was paid and therefore, the order of the High Court is to be set aside.
● Respondent: Section 17B of the Act ensures that the minimum amount mentioned
therein is paid to the workman during the pendency of the proceedings in the High
Court, but it does not restrict the powers of the High Court to pass appropriate
orders. Respondents also relied on Dena Bank vs. Kiritikumar T. Patel.

HELD:

● Section 17B provides that where the employer prefers any proceedings against an award
directing reinstatement of any workman, the employer shall be liable to pay such
workman, during the period of pendency of such proceeding in the High Court or
Supreme Court, full wages last drawn by him if the workman had not been employed in
any establishment during such period.
● The proviso says that if the High Court or the Supreme Court is satisfied that the
workman had been employed and had been receiving adequate remuneration during such
period or part therefore, the Court shall order that no wages shall be payable under this
section.
● The section was inserted to mitigate the hardship that would be caused due to delay in
implementation of the award if the employer challenged the award and provides for
payment of wages last drawn by the workman concerned from the date of the award till
the dispute between the parties is finally decided in the High Courts or the Supreme
Court.
● In Dena Bank vs. Kiritikumar T. Patel, this Court elucidated the expression "full wages
last drawn" as follows: "The Parliament thought it proper to limit it to the extent of the
wages which were drawn by the workman when he was in service and when his services
were terminated and therefore used the words “full wages last drawn”."
● The case also stated that Section 17B does not preclude the High Court or the
Supreme Court’s powers under Articles 226 and 136 of the Constitution
respectively, from passing appropriate interlocutory orders, having regard to the
facts and circumstances of the case in the interest of justice.
● Therefore, the question whether a workman is entitled to the full wages last drawn or full
salary which he would be entitled to in the event of reinstatement while the award is
under challenge in the High Court or this Court, depends upon the terms of the order
 passed by the Court, which has to be determined on interpretation of the order granting
relief.
● In the present case, the High Court did not grant relief in terms of Section 17B as there is
no reference to that section in the orders of the High Court. Therefore, the question of
payment of "full wages last drawn" to the Respondent does not arise. The Court upheld
the power of the High Court to pass the impugned order and thus, the Respondent is
entitled to his salary in terms of the said order.
● The Court further stated that if the workmen loses the case in the writ petition, any
amount over and above the sum payable under Section 17B can be recovered by the
employer.

3. Hombe Gowda Educational Trust v. State of Karnataka

RULE: Section 11(A)

FACTS:

● Respondent No. 3 (The respondent) was a lecturer at Kuvempu Mahavidyalaya which

was under the management of the Appellants.
● The Institution was governed by the Karnataka Private Educational Institutions
(Discipline and Control) Act, 1975.
● The respondent was subjected to a disciplinary proceeding on the allegation that he had
assaulted the Principal of the Institution with a 'chappal’.
● He was found guilty of the said charge and dismissed from service and therefore,
appealed before the Educational Appellate Tribunal.
● The Tribunal ordered Venkappa's reinstatement with all pecuniary benefits like salary
and allowance retrospectively from the date of dismissal, minus three increments.
● However, the High Court Ruled that Venkappa would reach retirement age before the
Tribunal's decision could be implemented and directed the Institute to pay 60% of back
wages. This appeal arises from petitions filed by the Principal and the Institute in
response to the High Court's decision.

ISSUE:

● Was the punishment of dismissal from service imposed on Venkappa justified and
proportionate?
● Whether or not the fact that there was no disciplinary inquiry against the principal affects
the quantum of punishment given to Venkappa?
● Does the Tribunal have the jurisdiction to interfere with the punishment awarded in
the domestic inquiry? If yes, then what is the scope of such interference.
ANALYSIS:

● Issues 1 & 2- The court throws light on the fact that despite potential provocation,a
teacher is expected to maintain professionalism and not resort to abusive language and
physical assault. Thus Venkappa’sDismissal from service as a punishment was not
considered excessively harsh or disproportionate.

Issue 3 (Main issue)

● The Supreme Court stated that the Tribunal's jurisdictional authority is akin to that under
Section 11-A of the Industrial Disputes Act. Even though it has the power to replaceone
punishment with another, it can only do so with limited discretion.
● The Court stated that the Tribunal can only interfere with the punishment's severity when
it's grossly disproportionate. The Supreme Court further elucidated that it has consistently
ruled that such interference should occur only when it is evident that the punishment is
objectionable disproportionate and that no reasonable person would impose the same and,
that the Tribunal can also step in if the Management fails to consider relevant facts that
directly impact the punishment's appropriateness.
● The Tribunal, being subordinate to the Supreme Court, must adhere to the decisions of
this Court that are relevant to the current case. It cannot disregard or refuse to follow this
Court's established legal precedents.

HELD:

The Supreme Court held that the punishment given to Venkappa by dismissing him from service
was not disproportionate, considering the gravity of the offence committed by him. The fact that
there were no departmental proceedings initiated against the principal was
immaterial,considering the fact that both the Tribunal and the High Court proved the commission
of offence committed by Venkappa. Furthermore, the court reiterated that the Tribunal can
interfere with the punishment given when it's deemed to be grossly disproportionate to the
offence committed and that no reasonable person would impose such a punishment for the
offence in contention. The court also highlighted that the Tribunal can also step in if
themanagement fails to consider relevant facts that directly impact the punishments
appropriateness. Both these factors were not in Venkappa’s favour as the act committed by him
against the principal was grave and serious and thus, the punishment given was not
disproportionate and was given after due consideration of all material facts.

4. Scooters India Limited v. Labour Court

RULE: Section 11-A- Powers of Labour Court Tribunal, and National Tribunal to give
appropriate relief in case of discharge or dismissal of workmen

FACTS:
● Termination of services of workmen on the basis of charges amounting to serious
misconduct.
● Domestic enquiry was held. Charges were proved in the enquiry.
● Tribunal held that although the enquiry proceedings were conducted fairly and not
vitiated, the termination was not justified. Tribunal ordered for reinstatement with 75%
back wages.
● SIL approached the HC. HC dismissed it. SIL approached SC.

ISSUE:
● Whether the Labour Court exercised its power under Section 6(2-A) of the U.P. Industrial
Disputes Act, 1947 in an arbitrary manner?
● Whether the Labour Court is in the capacity to interfere with the order of the termination
of services under Section 11A of the Act?
HELD:

In view of the second contention, the Supreme Court upheld the reasoning provided by the
High Court with regard to the powers conferred upon the Labour Court by virtue of
Section 6(2-A) of the U.P. Industrial Disputes Act, 1947. As per the High Court, Section
6(2-A) of the U.P. Industrial Disputes Act, 1947 is analogous to Section 11A of the Act
and that the Labour Court is conferred upon with wide powers to interfere with the order
of dismissal or discharge by the petitioner company. Hence, the special leave petition
filed by the petitioner company was dismissed.
BASICALLY- Section 11A bestows the Labour Court and tribunals with the power to set
aside the order of dismissal or discharge and may even grant a reinstatement or lesser
punishment, as it thinks to be fit based on the facts and circumstances of the case.
Therefore, the interference of the Labour Court in the matter of order of termination is
within the bounds of the Act and not arbitrary.

5. J.K. Synthetics Ltd. v K.P. Agrawal

RULE: Section 11(A)

FACTS:
 ● The respondent (K.P. Agrawal) was an assistant in the appellant company and was
dismissed (termination) on April 6, 1977 based on enquiry and findings post three
charge-sheets received by him.
● Conciliation proceedings failed, leading to the dispute being referred to the Labour Court
for adjudication.
● The Labour Court, in an award dated March 8, 1983, found that out of the three charge
sheets, one charge was proven, one was not proven, and one was given the benefit of the
doubt.
● The Labour Court’s award hence decreased the gravity of his punishment. Instead of
termination, the punishment would be the stopping of two years' worth of annual
increments.
● K.P. Agrawal filed an application in May 1983 seeking corrections to the award -
requesting reinstatement and full back-wages from April 6, 1977.
● J.K. Synthetics contested the application, arguing that the Labour Court had no
jurisdiction to amend the award and that back-wages were not justified due to proven
misconduct.

SC HELD:
● “In absence of a finding that the punishment was shockingly disproportionate to the
gravity of the charge established, the Labour Court should not interfere with the
punishment. “
● In this case, the labour court interfered with the punishment based on the employee's four
years of service without prior misconduct, and overlooked the gravity of his present
misconduct.
● Therefore, the Labour Court has to not interfere if the punishment of dismissal is
proportionate to the gravity of the charges alleged.
● Gujarat Steel Tubes vs. Gujarat Steel Tubes Mazdoor Sabha - Section 11A & power of
arbitrator
Case: Gujarat Steel Tubes vs. Gujarat Steel Tubes Mazdoor Sabha - Section 11A & power of
arbitrator
Facts:
- The Appellant, Gujarat Steel Tubes Ltd. is manufacturer of steel tubes in which over 800
workers are employed, who are a part of the Respondent Trade Union, Gujarat Steel
Tubes Mazdoor Sabha
- An internal flare-up occurred leading to a strike followed by conciliation, after which a
reference to arbitration was made(‘Dispute 1’) under Section 10 of the Industrial Disputes
Act, 1947.
- Subsequently, another unconnected industrial dispute arose which led to a state of lock-
out and total strikes by the workers in the factory. The Management contested this strike
 to be illegal in context of the Agreement between the two parties dated August 4, 1972
that prohibited the workers from taking any action such as strikes, go-slow or lock-out for
a period of 5 years since the date of the settlement.
- Thereby, the Management issued multiple notices to the Union urging the workers to
return to work and showing its preparedness to solve the matter through arbitration. On
February 15, 1973, the Management issued a warning that “the Company will terminate
services of all workmen who are on strike and thereafter it will run the factory by
employing new workmen.”
- The management thereby hired fresh workmen and reinstated some of the fired workmen.
- This led to the materialisation of a reference to arbitration under Section 10A of the Act,
whereby the question under dispute was the legality of the discharge of the 434 workers
- (remaining out of 853, who had not been re-employed) vide termination order dated
February 21, 1973.
- The arbitrator held the action of the Management warranted while the High Court
reversed the Award and substantially directed reinstatement.
Issue:
Whether the arbitrators appointed u/s 10-A enjoy the powers conferred by S. 11-A i.e. the power
to re-examine the punishment imposed by the management under S 11 A?

Rule:
Section 11A- powers of labour courts, tribunals and national tribunals to give appropriate relief
in case of discharge or dismissal of workmen.
Section 10A- Voluntary reference of disputes to arbitration.
Application:
Before we delve into understanding whether the disputed order is a punitive discharge or a
discharge simpliciter, it's crucial to emphasise why distinguishing between the two is important
for this case. This is because, in the case of a discharge simpliciter, the court should not
intervene, as it falls within the employer's legal rights according to the Standing Orders.
However, in the case of a punitive discharge, if the court determines that such a dismissal is a
colourable exercise of power leading to victimisation or unfair labour practices, it has the
authority to invalidate the order and instruct the reinstatement of the terminated employee.
However, even in the case of a discharge simpliciter, the court shall have the jurisdiction to
inquire into the words and form of the order to decide if the order was a discharge simpliciter or
not. In doing so, the court may look into the reasons provided by the employer to the employee
for such discharge (as mandated by theStanding Orders), and only if it is convinced that the
reasons for dismissal are not punitive in flavour, it may allow such discharge.
Based on the present facts, the court found that an isolated reading of the formal orders for
dismissal of workers prima facie appeared to be free from any undertones of punishment.
However, upon examining the detailed reasons provided by the Management for these
dismissals, which were documented separately and somewhat discreetly, it became clear that the
workers had engaged in serious misconduct, leading to disciplinary action against them. The
court determined a direct causal nexus between the workers' strike and their termination. Even if
the management had no other option but to fire the employees and hire new ones to keep the
factory running, this wouldn’t change the character of their action, which was essentially a form
of punishment for their misconduct. Consequently, the court ruled that the termination orders
were punitive rather than discharge simpliciter. In cases of punitive discharge, there is a
requirement for an inquiry as per the Standing Orders, which was not conducted in this instance.
Therefore, the court found the orders to be legally invalid.
In this regard, the court held that even when there is a voluntary joint submission of an industrial
dispute to arbitrator named by them under Section 10-A of the Act, any such award passed by an
arbitrator is amenable to judicial review under Article 226 Consequently, the Arbitrator can be
subject to judicial review, just like other statutory Tribunals, because they operate within the
framework defined by the law. The Court Held that although the power of the High Court under
Article 226 is limited to holding the judicial or quasi-judicial Tribunals or administrative bodies
exercising the quasi-judicial powers within the leading strings of legality and to see that they do
not exceed their statutory jurisdiction and correctly administer the law laid down by the statute
under which they act, in the present case, the writ jurisdiction of the High Court is larger given
the illegality and injustice at hand.
Although the court is in agreement with the arbitrator’s finding that the strike initiated by the
workers was in fact illegal due to the existence of the ongoing Dispute 1, it did not confer to the
understanding that all the workers are collectively responsible for the wrongdoings of the Union
leadership. It bases this on the fact that there is no concept of communal guilt in our nation, and
that no man shall be punished except for his own guilt. However, the arbitrator while giving its
award did not make any individualised enquiry regarding the active participation of the
dismissed workers, but in fact had taken a generalised approach to decide who was culpable
amidst the two parties–the Union and the Management. The court held that for the arbitrator to
give a such a generalised award against all the workers of the Union, misconduct has to be
provided individually by evidencing the specific reference to charges against every individual
worker who has been discharged.
Therefore, the court could not agree with the Arbitrator's decision that dismissal was an
appropriate punishment for all the workers who only passively participate in the illegal and
unjustified strike by not reporting for duty. The Dismissal of all such workers was therefore held
to be improper and unlawful.
In conclusion:
Yes, arbitrators have the power under Section 11A to examine whether the punishment is
excessive or not. Here, the SC conferred these exceptional powers to the arbitrator to oppose the
decision of the employer regarding his employees.
The court said that the “Tribunal” simpliciter has a sweeping significance and does not exclude
Arbitrator. A tribunal literally means a seat of justice, maybe, a commission, a Court or other
adjudicatory organ created by the State. All these are tribunal and naturally the import of
The word, in Section 2(r) of the Industrial Disputes Act, embraces an arbitration tribunal.
An Arbitrator has all the powers under the terms of reference, to which both sides are parties,
confer. In the instant case, the Arbitrator had the authority to investigate into the propriety
of the discharge and the veracity of the misconduct. Even if section 11A of theIndustrial
Disputes Act is not applicable, an Arbitrator under Section 10A is bound to act in the spirit
of the legislation under which he is to function.

Case: Workmen of Firestone Tyre vs Their Management - S. 11A IDA

Facts:
- The responding company made tyres in Bombay and distributed them from a distribution
centre in Delhi. The company's employees were in conflict with their employer over the
firing of their employees based on the findings of a domestic investigation.
- During the pendency of the Dispute, the Industrial Tribunal Act was amended in 1971,
and Section 11A was added, giving the Industrial Tribunal Appellate Authority over the
Domestic Enquiry judgement.
- The Tribunal ruled in favour of the Employer, refusing to apply Section 11A retroactively
in this case.
- The decision was then taken to the Supreme Court for review. Both parties interpreted
Section 11A in different ways.
Issue:
What is the proper interpretation of Section 11A of the Industrial Disputes Act?
Rule:
S. 11A IDA
Application:
- The right to initiate disciplinary action and determine the severity of punishment is
simply one of the managerial tasks, according to the Court. If a dispute is referred to the
Tribunal, however, the tribunal has the authority to determine whether the employer's
actions are justified.
- When an employer conducts a proper investigation and a finding of misconduct is
suspected, the Tribunal, as an appeal body, has no jurisdiction to review a judgement and
go beyond the employer's decision. Only when the findings of the investigation reveal
that management is guilty of exploitation, unfair labour practices, or malicious intent,
will interference with the employer's decision be justified and imposed.
 - If an employer has not conducted an inquiry or if the inquiry conducted is deficient, the
Tribunal can only be satisfied that the order is legitimate if it allows the employer and
employee to bring evidence before it. It is the employer's responsibility to adduce/present
evidence for the first time explaining his action, and it is the employee's responsibility to
adduce evidence in opposition.”
- The Court further stated that if an employer does not hold an investigation, the Tribunal
will not be required to consider anything other than whether there is a prima facie case.
The Court Will render an opinion on the merits of the contested dismissal order and the
evidence presented before it, determining whether the alleged misbehaviour is proven or
not. In situations like this, the idea of performing managerial functions does not occur
and cannot be contested.
- Introducing evidence for the first time: An employer who wishes to present evidence to
support his actions before the Tribunal for the first time should request it at the
appropriate stage. If asked, the Tribunal has no authority to refuse, because providing an
opportunity to an employer is in the best interests of both the employer and the employee,
as well as the ability to reach a fair conclusion about the alleged misbehaviour.
- Punishment: The bench stated that once the misbehaviour has been shown (either through
the inquiry or through the facts presented), the Tribunal cannot intervene with the
punishment imposed unless it is particularly harsh and exploitative. If a good case is
made out, the Tribunal can evaluate not only whether an employer's finding of
misconduct is accurate, but also if the finding is incorrect.
- The Tribunal can also rule that the discharge or dismissal order was not justified because
the misbehaviour was not proven by evidence. To reach a decision, the Tribunal has the
authority to evaluate and judge the evidence for itself, and it may rule that the misconduct
has not been proven or that the misconduct has been proven but does not warrant
dismissal. This is why Section 11A now gives the Tribunal complete authority to
examine the material and conclude both of these matters.
- Materials on Record: The term "materials on record" as used in the Act, according to the
Court, cannot be limited to the materials accessible at the domestic inquiry. They must be
held to refer to materials on the record before the Tribunal, which include (i) evidence
taken by management at the inquiry/ proceedings of the inquiry, (ii) the above evidence
with any additional evidence before the Tribunal, or (iii) evidence placed before the
Tribunal for the first time in support of an employer's action taken, as well as evidence
given by the workman. (proviso to section 11A restricts this power as it cannot ask for
further or fresh evidence but just additional evidence).
Conclusion:
Evidence can be adduced by the tribunal but they cannot call for fresh evidence. The court in this
case held that the tribunal has the power to reappraise the evidence in domestic enquiry to satisfy
itself whether the alleged misconduct is established or not. Not only to reappraise, but also to
reverse the finding. After reappraising, the tribunal has full power to interfere with the
punishment. Earlier it was not so, the tribunal had to sustain the orders of punishment unless
harsh victimisation was not proved.

Case: Indian Railway Construction vs. Ajay Kumar - S 11A IDA

Facts:
- The respondent in this case was appointed by the Indian Railway Construction Company
Limited, a government-owned company involved in railway construction projects. The
respondent was hired on a probationary basis, which meant that his employment was
temporary, and there was no guarantee of permanent employment after the initial
probationary period.
- On December 7, 1983, he was dismissed from his position based on allegations that he
had assaulted a senior officer and, along with others, ransacked the office. The incident
was reported to the police on the same day. It's important to note that the dismissal order
was issued without conducting a formal enquiry, and the reason provided for this
omission was the impracticality of conducting an enquiry before the dismissal.
- The respondent in the present appeal, argued that the order of dismissal was the outcome
ofvictimization. It is pertinent to note that the present case is an appeal before the Apex
Court. Initially, the Respondent has filed a writ petition before the Delhi High Court
Article 226 of the Indian Constitution, alleging that the management did not encourage
his involvement in union activities. Therefore, an order of dismissal without holding a
proper enquiry was passed against him.
- The Learned Single Judge who first heard the case, ruled that although that an enquiry for
dismissal may be bypassed, the case at hand did not warrant such an exception. The
conduct was held to be violative of Article 311(2) of the Constitution and non-observance
of the procedure vitiated the order of dismissal to be rendered invalid. This was later
challenged.
- It was submitted that there was no scope for judicial review regarding the decision to
forego enquiry. However, the Division Bench quashed the dismissal on the grounds of
the action being mala fide in nature. Although the administrative authority possesses
discretion regarding whether enquiry needs to be conducted, it could not be arbitrary, and
the case warranted judicial review. The Division Bench however in the impugned
judgement held that Article 311(2) was not attracted. However, it upheld the judgement
of the learned Single Judge that based on a limited judicial examination, the order
dispensing with enquiry was not sustainable.
Issue:
- Whether the disciplinary authority can dispense with the inquiry?
- Whether the court can exercise ‘judicial review’ in administrative matters?
Holding:
The Apex Court addressed the ongoing issue regarding the dismissal of an employee without a
formal inquiry. The Court Opined That the power to dismiss an employee without an inquiry
should not be used to circumvent established rules and procedures, and such justifications should
come from the disciplinary authority. When there are conflicting opinions about the feasibility of
conducting an inquiry, the Court should not intervene; instead, it should consider the
circumstances. The Apex Court clarified that the role of the High Court was to assess whether
there was room for judicial review of the decision to skip the inquiry, rather than passing
judgement on the dismissal itself. The notions of "impracticability" and the necessity of an
inquiry should have been the two driving points that should have piqued the interest of the High
Court.

Where two views are possible as to whether holding of an enquiry would have been proper or
not, it would not be within the domain of the Court to substitute its view for that of the
disciplinary authority as if the Court is sitting as an appellate authority over the disciplinary
authority. The circumstances can be duly taken note of in arriving at a decision whether to
dispense with an enquiry or not. What the High Court was required to do was to see whether
there was any scope for judicial review of the disciplinary authority's order dispensing with
enquiry.

Neither learned Single Judge nor the Division Bench has examined the question as to
practicability or otherwise of holding the enquiry in the correct perspective. They have
proceeded on the footing as if the order was mala fide; even when there was no specific
allegation of mala fides and without any specific person against whom mala fides were alleged
being impleaded in the proceedings. Except making a statement regarding alleged victimization
and mala fides no specific details were given. The approach of the High Court, therefore, was not
proper. But at the same time, the reasons which weighed with the disciplinary authority to
dispense with enquiry equally do not appear to be proper. Normally in such cases the proper
course would be to direct authorities to hold an enquiry, if they so desire. But two significant
factors need to be considered. One is long passage of time and the other alleged loss of
confidence. If an act or omission of an employee reflects upon his character, reputation, integrity
or devotion to duty or it an unbecoming act, certainly the employer can take action against him.
Here, the alleged acts have not been disbelieved by the High Court. They are prima facie acts of
misconduct. Therefore, the employer can legitimately raise a plea of losing confidence in the
employee, warranting his non-continuance in the employment. The time gap is another
significant factor.

Case: Sirsilk Ltd. vs. Govt of AP - conflict between section 18 (1), 18 (3) and 17 (1)

Facts:
 - In this case, few disputes arise between the employer and the Workmen. So, on 6 June
1956, an order was made to the Industrial tribunal, Andhra Pradesh for adjudication.
After a year in 1957, the tribunal came up to the conclusion that it will send an award to
the government. Under the Industrial Dispute Act 14 of 1947, it has been mentioned that
the appropriate government has to publish the award and the period for this is within 30
days from the date of its receipt. This has been given under section 17 of the Industrial
dispute act.
- However, before the publishing of the award by the government under section 17, both
the disputed parties on 1st October. 1957 decided to come up with a settlement. So, the
disputed party decided to address this settlement to the government. They wrote a letter
that was signed by both the employer and the employee, and it was stated in the letter that
the government need not publish the award because they have come up with the
settlement.
- However, the government refused to hold back the award publication. The reason for this
is given by the government is that under section 17 of the Industrial Dispute Act 14 of
1947, it is mandatory for the government that the award has to be published by then. And
when it is decided by the government, they cannot hold it back.
- Later on, the appellant decided to find a writ petition to the High Court in virtue of
Article 226 of the Indian Constitution. They stated that since the disputed party has
already settled, the government should not publish the award, which is sent to them by
the Industrial Tribunal.

High Court Decision:

In this case, the High Court held that since it is mandatory for the government under section 17
of the Industrial Dispute Act the government has to publish the award, which is sent to them. It is
not at their discretion that they can hold the award. The High Court stated that when the law is
saying that the award has to be published by the government, then the court cannot order the
government not to publish it. Therefore, the petition was dismissed. The disputed party then
moves to the Supreme Court.
Arguments of the Appellant:
The appellant argued that when the employer and the employee had already settled on section
18(1) of the Industrial Dispute Act, now, the award must not be published by the government.
This settlement between the disputed party must be respected by the government, which indeed
helps in maintaining industrial peace.
Arguments of the Government:
The government of Andhra Pradesh has firmed its decision and argued that they must publish the
award which is forwarded to them by the Industrial Tribunal under section 17 of the Industrial
Dispute Act, which has to be done within 30 days after receiving the award.
Issues Raised:
The issue raised in this case is whether under Section 17 of the Industrial Dispute Act, is it
mandatory for the government or is it at their discretion, to stop the award publication?

Interpretation by the Supreme Court:

1. The Supreme Court first observed section 17 of the Industrial Dispute Act, which states
that “every award shall, within 30 days from the date of its receipt by the appropriate
government, be published in the manner as the appropriate government things fit.
Secondly, it says that the award published under 17(1) shall be final and shall not be
called in question by any court”
2. Here the use of the word shall under section 17(1), is given to make it mandatory for the
government that the award has to be published within the given time.
3. The appellant party relied on section 18(1) of the Industrial Dispute Act, which states that
“a settlement arrived at between the parties, shall be binding on the parties to the
agreement.”
4. It has been mentioned under section 18(3) that, “an award which has become enforceable,
shall be binding on all parties to the dispute.”
5. So, section 17(1) is mandatory under which the government has to publish the award
once received by the International Tribunal. Section 18(1) is also mandatory, as once the
settlement arrives between the disputed party, it is binding upon both parties.
6. But in this case, the parties reach the settlement when the award is already sent to the
government by the Tribunal and under the Industrial Dispute Act, no section deals with
such a situation.
7. So, the Supreme Court comes up with the view that the only way to solve the dispute
arising between section 18(1) and section 18(3) is when the disputed party jointly informs
the government that they have arrived at a settlement which is binding on them through
section 18(1) than the government will not publish the award.

The Decision of the Supreme Court:

It was held by KN Wanchoo J. that even though section 17(1) states that it is mandatory for the
government and the government, is bound to publish the award which is sent to them by the
Industrial Tribunal. But the dispute that arose, in this case, is exceptional. A pacification or
conciliation has to be done between sections 18(1) and 18(3). The conciliation between these 2
sections can only be done by holding the publication of the award when the disputed parties
reached a settlement that is binding upon them.
So, the Supreme Court ordered the government that the award will not be published as the
aggrieved party reached a settlement that is binding on them, according to section 18, one of the
Industrial Dispute Act.

Case: Remington Rand of India Ltd. v. The Workmen, AIR 1968 SC 224 (Award and
Publication S. 17)
Facts:
- This appeal by the Remington Rand of India Ltd. made against their workmen arose out
of an award dated 5thOctober1965made by the Industrial Tribunal. It was received by the
appropriate government on October 14, 1966. But it was published in the Kerala gazette
on November 15, 1966. On these facts the appeal was preferred against the award of the
industrial tribunal.
- The Appellant raised an objection, inter alia , that the award was inoperative and
unenforceable as it was published after the expiry of the period fixed by section 17(1) of
the Industrial Disputes Act, 1947.
Issue:
Is an award published after the expiry of the period specified in S. 17 enforceable? And
connectedly, is S. 17 intended to be mandatory or directory?
Rule:
Section 17 of the IDA
Application:
Speaking for the Court Mr. Justice Mitter observed :
“Section 17(1) makes it obligatory on the Government to publish the award. The limit of time
has been fixed as showing that the publication of the award ought not to be held up. But the
fixation of the period of thirty days mentioned therein does not mean that the publication beyond
that time will render the award invalid. They relied on the cases of State of Uttar Pradesh &
Others v. Babu Ram Upadhya And Erumeli Estate v. Industrial Tribunal And accordingly opined
that the provision as to the time in section 17 (1) need to be seen as a directory and not
mandatory.”
It has given four reasons in support of its conclusions :
(1) It is simple to imagine situations in which it might not be practicable to publish the Award.
Within thirty days. For instance, a press strike or any other valid and adequate reason could have
prevented the publishing from happening within the allotted thirty days. If we were to decide that
the award would be invalidated as a result, we would be giving an excessive amount of weight to
a clause that the legislature did not intend to include.
(2) If the award is found to be invalid after 30 days only due to publication, it may be necessary
to file a new case, which would subject the parties to needless stress.
(3) It frequently takes a very long time for the reference to be finished and the decision to be
taken.
(4) There is no penalty if the award is not published within a 30 day window.
It distinguished its earlier decision in Sirsilk Ltd . v. State of Andhra Pradesh case from the
current case by stating the case merely decided that it was not open to the Government to
withhold publication, but this Court never meant to lay down that the period of time fixed for
publication was mandatory.

Conclusion:
On the basis of the above analysis the court held that they cannot but hold that a provision as to
time in s. 17(1) is merely directory and not mandatory, and hence a mere delay in publishing
cannot be made ground for cancellation of the award.
 WEEK 5-6

Section 10-A

1. Karnal Leather Karamchari Sanghatan (Regd.) v. Liberty Footwear Company (Regd.) AIR
1990 SC 247 (Arbitral Agreement)

Facts:

- Arbitrators gave an award directing the management to reinstate the workmen.

- Management, rather than reinstating, challenged the validity of the award before High Court
under Writ Remedy.
- Claimed that the award was not published as required under Section 10A(3) and therefore
invalid.
- HC upheld the argument and the matter went to SC.

Issue:

Is the requirement to publish arbitral agreement as per Section 10A(3) mandatory?

 Relevant Sections:

- Section 10A

Requirement of publication of award is mandatory and non-compliance with the requirement renders
award invalid and unenforceable.

- Section 17A

An arbitration award shall become enforceable on expiry of 30 days from the date of publication.

- Section 18(2)

Makes an arbitration award which has become enforceable, binding on the parties to the agreement.

Holding:

- The management contended that since the arbitration was voluntary, mere non-publication
wouldn’t render the award invalid.
- However, SC held it was mandatory in light of the mandatory nature of Rule 7, Industrial
Disputes (Central) Rules, 1957.
- Even the absence of any penal provision for non compliance and arbitration having a
voluntary nature wouldn’t lead to an inference that the provision is merely directory.
- Non compliance of publication requirement would be fatal to the arbitral award.

2. Engineering Mazdoor Sabha v. Hind Cycles (1962) 2 LLJ 760 (SC)

Facts:

- Dispute between Engineering Mazdoor Sabha (“Appellants”) and Hind Cycles Limited, Bombay
(“Respondent”) was voluntarily referred to an arbitrator under Section 10A by the parties in their
agreement.
- Arbitrator announced the award however the appellants sought to challenge the validity of the same
and obtained a special leave to appeal to the Supreme Court against the decision of the arbitrator.
- Respondent contended that the arbitrator whose award is challenged was not a tribunal under Article
136 of the Constitution and hence the special leave was not competent.

Issue:

- Whether an appeal would lie to the Supreme Court under Article 136 of the Constitution from an
arbitration award under Section 10 of the IDA

Relevant Law:

The following two conditions must be satisfied in order to invoke Article 136 of the Constitution:

1. Proposed appeal must be from any judgment, decree, determination, sentence or order and it
must not be against a purely executive or administrative order
2. Said order or determination must have been made or passed by any Court or Tribunal in the
territory of India.

Analysis:

Condition I:

- No controversy as the decisions of the arbitrators under Section 10A of the IDA are quasi-judicial and
they amounted to a determination or order under Article 136 of the Constitution.

Condition II:

- Rough and Ready Test:

(Is the Arbitrator under Section 10A a Statutory Arbitrator?)

 - Applied by enquiring whether the said body is clothes with the trappings of a court to
determine the true character of the body in question.
- In this case, the arbitrator is under Section 10A is clothed with certain powers, the procedure
is regulated by certain rules and the award pronounced is given by statutory provisions a
certain validity and binding character for a specified period.
- Therefore, it is possible to describe such an arbitrator in a loose sense as a statutory arbitrator.

However, even a statutory arbitrator does not fulfil the requirement of Tribunal for the purposes of Article
136 of the Constitution.

- Main Test:

- The main test that has to be applied is to check whether the said body has been invested by the State
with its inherent judicial power.
- This test implies that the adjudicating body must be constituted by the state and should be invested
with the State’s judicial power which it is authorised to exercise.
- In the case of an arbitrator, the individual is appointed by the parties and the power to decide the
dispute between the parties is derived from the agreement of the parties and from no other source.
- The fact that the appointment once made by the parties is recognised under Section 10A and after
such an appointment the powers that the arbitrator is clothed with are some of the trappings of the
court does not in itself mean that the power of adjudication which is exercised is derived from the
state.

Decision:

Arbitrator under Section 10A of the IDA is not a Tribunal for the purpose of Article 136 of the
Constitution. Hence, the Court upheld the preliminary objection raised by the respondent and the appeals
where dismissed on the ground of incompetence under Article 136 of the Constitution.

Section 11

3. Gujarat Steel Tubes Ltd. v. GST Mazdoor Sabha (1980) 1 LLJ 137 (SC)
Facts:

- Appellant manufactures steel tubes in the outskirts of Ahmedabad city. Confrontation arose
between workers and Appellant that culminated in a total strike.
- 4th August, 1972 – Settlement was entered into between management and workmen stating
that the workmen were not allowed to resort to a strike till the expiry of a period of five
years; nor could the management declare a lock out till then.
- Any dispute arising between the parties, according to the terms arrived at were to be sorted
out through negotiation or, failing that by recourse to arbitration.
- All employees were terminated followed by fresh recruitment of workmen. There was a de
facto breakdown of the strike and a dispute arose over restoration of the removed workmen.
- The matter was therefore, referred to an arbitrator and the arbitrator by his award held the
action of the management warranted.
- Respondent challenged the decision of the arbitrator under Article 226/227 of the
Constitution and the High Court of Gujarat reversed the award and substantially directed
reinstatement.

Issue:

Is an Arbitrator a ‘Tribunal’ under Section 11A of the IDA?

Relevant Law:

Section 2(r), IDA:

"Tribunal" means an Industrial Tribunal constituted under Section 7A and includes an Industrial Tribunal
constituted before the 10th day of March, 1957, under this Act.

Decision:
 - Prima-facie, an arbitrator is a different category from Arbitrators, but all statutory definitions are
subject to contextual changes. It is open to the Court to give the natural meaning to a word defined in
the Act if the context in which it appears suggests a departure from the definition because then there
is something repugnant in the subject or context.
- Then what is the natural meaning of the expression "Tribunal" ? A "Tribunal” literally means a seat
of justice. May be, justice is dispensed by a quasi-judicial body, an Arbitrator, a commission, a court
or other adjudicatory organ created by the State. All these are Tribunals and naturally the import of
the word embraces an arbitration Tribunal.
- Even if Section 11A is not applicable, an Arbitrator under Section 10A is bound to act in the spirit of
the legislation under which he is to function. A commercial Arbitrator who derives his jurisdiction
from the terms of reference will by necessary implication, be bound to decide according to law and,
when one says, "according to law", it only means existing law and the law laid down by the Supreme
Court being the law of the land, an Arbitrator under Section 10A will have to decide keeping in view
the spirit of Section 11A.
- Once in a while social legislation which requires sharing of social philosophy between the Parliament
and the Judiciary meets with its Waterloo in the higher Courts because the true role of interpretation
shifts from Judge to Judge. We are clearly of the view that statutory construction which fulfils the
mandate of the statute must find favour with the Judges, except where the words and the context rebel
against such flexibility. We would prefer to be liberal rather than lexical when reading the meaning
of industrial legislation which develops from day to day in the growing economy of India The
necessary conclusion from this discussion is that the expression "tribunal" includes in the
statutory setting, an Arbitrator also. Contemporaneous par-legislative material may legitimately be
consulted when a word of wider import and of marginal obscurity needs to be interpreted. So viewed,
we are not in a "sound-proof system" and the I.L,C. recommendation accepted by India and the
objects and reasons of the amending Act leave no doubt about the sense, policy and purpose.
Therefore, Section 11A applies to the Arbitrator in the present case and he has the power to
examine whether the punishment imposed in the instant case is excessive. So has the High
Court, if the award suffers from a fundamental flaw.

Section 10

4. State of Madras v. CP Sarathy (1953) 1 LLJ 174 (SC), AIR 1953 SC 53

Facts:

- An association of employees of 24 cinemas made certain demands against the employers.

- Conciliation officer suggested certain minimum terms.
- Only 6 employees agreed. Conciliation officer filed failure report.
- Government referred the dispute to Tribunal.
- Notices sent by Tribunal to all 24. The 6 who agreed said that they should not be included.
- Tribunal differed and held that dispute was applicable to each and every group.
- Award given, not implemented by one of the groups “Prabhat Talkies”.
- Prosecution initiated against the group.

Issue:

- Whether the government acted within its jurisdiction while referring the matter as there was no
dispute between the management and workers of “Prabhat Talkies”

Decision:

- SC held that there did existed a dispute on the date of reference between management and workmen
of “Prabhat Talkies”.
- Section 10 states that the Government can refer a dispute in writing if the industrial dispute exists or
“is apprehended”. Therefore, the Court concluded:

 The existence of dispute is not necessary.

 If a dispute has not arisen, and the Government is of the opinion that such dispute may be
apprehended, a reference can may be made.

- Government is performing an administrative act and must form an opinion with respect to the factual
existence of a dispute as a preliminary step.

 It is entirely domain of the government.

 It may not always be possible for the government, on the basis of the materials placed on it, to
ascertain whether there exists a dispute or not. Therefore, there can be no obligation laid down
on the government
  It will not be competent for the Court to hold that the reference was bad merely because there
was, in its opinion, no material before the Government on which it could decide on the
existence of an industrial dispute.

- Once the order of reference is made, it cannot therefore be interfered with.

5. Secretary, Indian Tea Association v. Ajit Kumar Barat (2000) 3 SCC 93

Facts:

- Respondent (Joint Secretary) was dismissed from service. Raised an industrial dispute.
- Government looked into his salary structure and nature of work.
- Government held that although he was part of the management, he was not a ‘workman’

Held:
- Appropriate Government must form an opinion as to whether the concerned employee falls
within the purview of the definition of ‘workman’ and thereafter has to consider whether
there exists an industrial dispute or is apprehended.
- However, the Government, in doing so, shouldn’t consider any irrelevant or foreign material.
- In determining whether the employee is a workman or not:

 Depends on the type of duties assigned to or discharged by the employee.

 If assigned a particular duty, and has been discharging the same, then there is no
difficulty.
 However, if there are multifarious duties, the principal duty is to be taken into
consideration.

6. State of Bombay v. K.P. Krishnan AIR 1960 SC 1223

Facts:

- Workmen made four demands.

 - Conciliation was not arrived at. Failure report was filed.
- Government after perusing failure report decided not to make a reference to Tribunal because the
workmen resorted to “go slow” i.e., slow down work during the year in dispute.
- Workmen moved Writ Petition. Appealed to SC.

Held:

- Failure report not the only material on which Government may base its conclusion, the Government
may consider all relevant circumstances.
- Under Sec. 12(5), the question for consideration of Government is whether there is a prima facie case
for reference.
- It would be open for the Government to consider whether there are other relevant or material facts
which would justify refusal to make a reference.
- If the Court is satisfied that the reasons given by the Government for refusing to make a reference are
extraneous or improper then the Court can issue and would be justified in issuing a writ of mandamus
in such cases.

7. The Management, Hotel Imperial, New Delhi vs. Hotel Workers Union (AIR 1969 SC
1341):

Facts:

- Workmen working in the hotel were suspended.

- There were applications pending under S. 33 of the Industrial Disputes Act.
- Tribunal directed that pending disposal usual wages and additional sum of Rs. 25/month to be paid to
the workmen as interim relief.

Issue:

- Management contended that the interim relief was not a point of reference, therefore beyond the
scope of tribunal.

Decision:
 - The issue of granting interim relief was a matter incidental to the main issue.
- Even if not expressly mentioned in the terms and conditions, it can still be given.
- It should not be the whole relief that the workmen are seeking or the workmen would get if they
would succeed.

8. Avon Services vs Industrial Tribunal (1979 AIR 170)

Facts:

- Appellant – Private Limited Company manufacturing Fire Fighters Foam Compound

- Dispute relating to Ballabhgarh factory
- Factory had two sections – manufacturing and packing material which had become separate
undertakings
- Manufacturing section had two divisions - chemical section, i.e. Foam Compound manufacturing
section, and boiler section.
- Packing material section of the factory comprised of two sub-sections, one manufacturing
containers, and the other painting of the containers.
- Respondents 3 and 4 employed in the painting section.
- 1964: Appellant decided to buy containers from the market and closed down its packing material
making section but continued the painting sub-section.
- 1971: Appellant served a notice on Respondents 3 and 4 and one Mr. Ramni stating that the
management has decided to close the painting section due to some unavoidable circumstances and
hence the services of the three workmen would no longer be required and, therefore, they were
retrenched from their work.
- Although notice was sent, the Tribunal found that the notice never reached the workmen.
- They were asked to collect their dues as under Section 25FFF of the ID Act, 1947.
- Avon Employees Union served a notice of demand on 16th July 1971 asking the appellant to reinstate
respondents 3 and 4 and the third workman and also to pay the full back wages.
- Tribunal held that retrenchment of the two employees was unjustified and directed the appellant to
reinstate them with full back wages.
- Petition of Avon Services was dismissed by the High Court.
- Subsequently, Appellant appealed before Supreme Court regarding whether Tribunal was justified in
making its decision.

Issue:

- Whether the present reference is bad in law for the reasons given in para No. 1 of the preliminary
objection in the written statement?(the previous reference was refused by the Government on the
ground that there was no work for painting in the factory where the two workmen were working)
Relevant Law:

10. Reference of disputes to Boards, Courts or Tribunals.-

(1) Where the appropriate Government is of opinion that any industrial dispute exists or is
apprehended, it may at any time, by order in writing…..

Decision:

- Government has the power to refer at any time any industrial dispute which exists or is apprehended
to the authorities mentioned in the section for adjudication.
- The opinion which the Government is required to form before referring the dispute to the appropriate
authority is about the existence of a dispute or even if the dispute has not arisen, it is apprehended as
imminent and requires resolution in the interest of industrial peace and harmony.
- Section confers discretionary powers on the Government. Power is administrative in nature. Only
requirement to take action is that there must be some material before the Government on the basis of
which it forms an opinion that an industrial dispute exists or is apprehended.
- Merely because Government rejects/declines a request for a reference, it cannot be said that the
industrial dispute has ceased to exist, nor could it be said to be a review of any judicial or quasi-
judicial order or determination. (Government might be satisfied at a later stage that a dispute exists)
- "At any time" is Section 10(1) will clearly negative the contention that once the Government declines
to make a reference the power to make a reference under Section 10(1) in respect of the same dispute
 gets exhausted. Such a construction would denude a very vital power conferred on the Government in
the interest of industrial peace and harmony.
- In the light of the nature of the function of the Government and the object for which the power is
conferred on it, it would be difficult to hold that once the Government has refused to refer, it cannot
change its mind on a reconsideration of the matter either because new facts have come to light or
because it had misunderstood the existing facts. When the government declines to make a reference,
the power doesn’t get exhausted. Its only for the time being that the government has refused. There is
no assumption that the dispute has ceased to exist.
- In this case before the Court the Union in its notice of demand complained about illegal termination
of service and demanded reinstatement with back wages, thus forming part of the same subject
matter. Hence, the Government subsequently made a reference about the validity of the retrenchment
and the relief to which the workmen would be entitled. Thus it is beyond doubt that there was a
demand about reinstatement, complaining about the illegality of termination of service and the same
has been referred to the Tribunal.
- The Appeal was dismissed and the retrenchment was held to be invalid and the workman were
entitled to be reinstated with paid full back wages.

Section 33

9. Hotel Imperial vs Hotel Workers’ Union (AIR 1959 SC 1342)

Facts:

- Several disputes were pending between the management and workmen at the Conciliation
stage.
- After holding enquiry, management came to conclusion that 22 workmen were guilty of
misconduct. Management informed them that they had dismissed them subject to obtaining
permission u/s 33.
- Workmen went on strike and notices were issued by the management to report back to work
within 3 hours. Workmen ignored the same.
- A subsequent show-cause notice was issued, and workmen were suspended pending the
permission from authority under S. 33.
- Workmen challenged u/s 33-A.

Relevant Law:

Right to suspend without pay?

- Common law right to suspend the master – servant relationship is subjected to section 33 of ID Act.
- Pending the approval, the master can after holding a proper inquiry temporarily terminate the
relationship of master and servant by suspending his employees.
- Employer has the power to order suspension of the contract of the employment temporarily, so that
there is no obligation on the servant to work.

Section 33 (1) (a) V. Section 33 (1) (b).

- Tribunal may grant interim relief, if it has power to do so under the Act but such relief should not be
the whole relief, which the workmen will get if he finally succeeds.

Decision:

SC laid down various guidelines:

- Under the ordinary rule, an employer can suspend an employee only if he has the power under
contract or in the statute to do so. If the same is not there, the employer is obligated to pay wages.
This has been modified by virtue of S. 33
- However, S. 33 provides for a situation that even where there is no provision for suspension in
standing orders, if the master has held a proper enquiry and has come to a conclusion that the servant
should be dismissed, he has the power to suspend so that there is no obligation to pay during
suspension.
- But this does not bar the industrial tribunal to grant interim relief, but that should not exceed whole
relief.
- Once the tribunal has given permission for dismissal u/s 33, the contract would come to an end and
there would be no further obligation to pay any wages.
10. Fakirbhai Fulabhai Solanki v. Presiding Officer (AIR 1986 SC 1168)

Decision:

- The court reconsidered the Hotel Imperial case and held that where an implied right to suspend can
be considered as an implied right given to the employer, the same way an implied right to be paid
suspension allowance must also be considered as an implicit right given to the workman.
- The workman should be paid some amount by way of subsistence allowance so as to be able to
maintain himself and the family.

11. Ram Lakhan vs The Presiding Officer ((2000) 10 SCC 201)

Facts:

- Appellants in the present case were the employees of the Swatantra Bharat Mills.
- Charge sheets were issued against the appellants in the year 1986 and the management subsequently
suspended them.
- Management filed an application under section 33(1) of the Industrial Dispute Act, 1947 seeking
permission to dismiss employees after completion of enquiry. Management was seeking the
permission since already industrial dispute was pending in the industrial tribunal.
- Appellants opposed the application and argued that were entitled to a subsistence allowance for the
period of their suspension till the time the disciplinary proceedings are underway.
- Tribunal and the High Court ruled in favor of the management.
- High Court while ignoring the ruling given in the Fakirbhai case, relied upon the decision passed by
this court in the case of Hotel Imperial vs. Hotel Workers Union and held that the appellants were not
entitled to any sort of subsistence allowance.
- Matter came up to the Supreme Court.

Issue:
- Whether the appellants are entitled to receive a subsistence allowance or not?

Relevant Law:

Section 33 (1) of the ID Act, 1947

- During the pendency of any conciliation proceeding before a conciliation officer or a Board or of any
proceeding before an arbitrator or a Labour Court or Tribunal or National Tribunal in respect of an
industrial dispute, no employer shall--

(a) In regard to any matter connected with the dispute, alter, to the prejudice of the workmen
concerned in such dispute, the conditions of service applicable to them immediately before the
commencement of such proceeding; or
(b) For any misconduct connected with the dispute, discharge or punish, whether by dismissal or
otherwise, any workmen concerned in such dispute, save with the express permission in writing of the
authority before which the proceeding is pending.

Observations:

- Court took into consideration, Hotel Imperial case and the Fakirbhai case.

- Observed the following:

 Hotel Imperial Case - Right to place an employee under suspension pending disposal of
the application under Section-33 (1) is to be conceded to the management
 Fakirbhai Case - Right of providing subsistence allowance

- Just as the employer has no control over the disposal of the application under Section-33 (1)
of the ID act, the employee has no control over the disposal of the application. Also, while
the management can afford to wait for the disposal of the application it would be impossible
for an employee, who survives only on his salary to wait for the disposal of the application
for an indefinite period.
 Decision:

Court held that the right to receive subsistence allowance for the period of suspension has to be read
along with the right of the management to place the employee under suspension pending disposal of the
application under section-33 (1) of the ID act. Therefore, both these rights are intertwined and both must
survive together.

12. Delhi Cloth and General Mills Ltd. V. Kushal Bhan, AIR 1960 SC 806

Facts:

- Appellant is a company that manufactures textiles and Respondent was a Peon under the employment
of the Appellant.
- Appellant served a charge-sheet on respondent alleging that he had stolen the cycle of the company’s
Head Clerk. A criminal case of theft was pending against him then. He was asked to show cause why
he should not be dismissed for misconduct. Upon submitting his explanation, it was deemed
unsatisfactory, which in turn lead to the appellant company setting a date to hold an official enquiry.
- During enquiry proceedings, although the respondent appeared before the enquiry committee, he did
not participate by choosing to not answer questions put forward to him as he did not want to produce
any defence till the criminal case regarding the same was decided by the Court itself. The company,
however after completing the enquiry directed the dismissal of the respondent on the ground that
misconduct had been proved against him.
- The company thereafter made an application under Section.33(2) of the Industrial Disputes Act to the
Industrial Tribunal for approval of the disciplinary action taken against the respondent. In the
meantime, the respondent was acquitted by the Criminal Court. The judgment of the Criminal Court
was produced before the tribunal which refused to approve the order of dismissal of the respondent.

Issue:

- Should the employer wait for the decision of the Criminal Trial Court before taking disciplinary
action against an employee?

Decision:
- Employers do have the option to stay enquiries pending the decision of the criminal trial courts.
- If the case is of a grave nature and involves complex questions of fact or law, employer should
exercise restraint and wait for the requisite action from the criminal trial court so that the defense of
the employee is not prejudiced during the criminal trial court proceedings. (However, this was only
mentioned in advisory capacity by the Court)
- In present case, Court opined that there was no clear or present case where principles of natural
justice had been affected. If the respondent did not choose to take part in the appellant’s enquiry then
there was no fault in that enquiry.
- The Court was strongly of the opinion that the Tribunal had erred in not granting approval under
Section 33(2) of the Industrial Disputes Act. Therefore, due to all the above-mentioned reasons, the
Court allowed the appeal and set aside the order of the Tribunal and granted approval to the order of
the Appellant.

ROHTAK HISSAR DISTRICT ELECTRICITY SUPPLY CO. LTD. Vs. STATE OF UTTAR
PRADESH AND OTHERS

ACT:
Standing Orders-Scope of-Jurisdiction Of Certifying Authorities, character and extent of-Jurisdiction of
Court to examine reasonableness--Industrial Employment Standing Orders Act,. 1946 (20 of 1946), U.P.,
Industrial Disputes Act, 1947 (28 of 1948)

FACTS
In accordance with the Industrial Employment (Standing Orders) Act, 1946, the appellant (the employer)
drafted standing orders in consultation with its employees and submitted them to the Certifying Officer
for certification. Since the appellant's workers had not formed a union, three employee representatives
were elected to represent them during the certification process. These representatives did not object to the
draft standing orders submitted by the appellant. The Certifying Officer reviewed the draft and made
several changes to it before certifying them. The appellant's appeal to the Appellate Authority was also
rejected.

ISSUES INVOLVED:
1. Whether the certified standing order(s) can be ultra vires the Act or have provisions
which do not fall within the purview of the Act?
2. Whether Industrial Employment (Standing Orders) Act, 1946 is in conflict with the U.P.
Industrial Disputes Act,1947?
3. What is the scope of the “reasonableness” and “fairness” standard under the Industrial
Employment (Standing Orders) Act, 1946?
4. Whether conformity with Model Standing Order is mandatory under the scheme of the
Act?
HELD:
1. In 1956, Section 4 of the Act had been amended to impose upon the Certifying Officer or the
Appellate Authority, the duty to adjudicate upon the fairness or the reasonableness of the provisions in the
Standing Orders. Therefore, the Certifying Officer and the Appellate Authority are duty-bound to ensure
that the terms of the Standing Orders are fair and reasonable, even if both the employer and the employee
are in agreement with the draft Standing Orders.
2. The court held that the Act (Standing Orders Act) intends to secure to industrial employees ‘clear’ and
‘unambiguous’ conditions of employment. Therefore, Setalvad’s argument that there is a conflict between
the Act with the U.P. Act, or the Central Act were rejected.
3. Provision of pension or any retiral benefit can only be extended by the employer or upon agreement
between the parties. Such questions cannot be unilaterally, or sui moto decided by the Certifying
Authority.
4. Under Section 3(2) of the Act the employers have to frame draft Standing Orders and they must
normally cover the items in the Schedule to the Act. If, however, it appears to the appropriate authorities
that having regard to the relevant facts and circumstances, it would not be unfair and unreasonable to
make a provision for a particular item, it would be competent for them to do so. But the employer cannot
insist upon adding a condition to the Standing Order which relates to a matter which is not included in the
Schedule.
5. Section 3(2) of the Act specifically requires that the Standing Orders shall be, as far as practicable,
inconformity with the model. These words indicate that the appropriate authority may permit departure
from the Model Standing Orders if it is satisfied that insistence upon such conformity may be
impracticable. Moreover, this fact also shows that in a given case, the appropriate authority may permit
departure from the Model Standing Orders and may come to the conclusion that one or the other of the
conditions included in the Model Standing Orders may not, for the time being, be included in the
Standing Orders of any particular establishment.
6.Standing orders cannot be dehorse or ultra-vires the Act.

RAJASTHAN STATE ROAD TRANSPORT CORPORATION ANDANOTHER V BAL

MUKUNDBAIRWA (2009)

FACTS:
The Appellant is a corporation constituted under the Road Transport Corporations Act, 1950. In the year
1965, the Corporation framed its Standing Orders known as Rajasthan State Road Transport Workers and
Workshop Employees Standing Orders, 1965, which were certified under the Industrial Employment
(Standing Orders) Act,1946. The said Certified Standing Orders deal with suspension, termination,
dismissal, removal and/or compulsory retirement, etc.
A suit was filed by the respondents claiming that the termination was in violation of the principles of
natural justice.
A reference to this Bench has been made by a Division Bench of the Supreme Court for resolution of a
purported conflict in two three-Judge' Bench judgments of this Court regarding the jurisdictional power of
the civil court to entertain suits challenging orders of termination.

ISSUE:
Whether the civil court has jurisdiction in a case where the alleged violation is of principles of natural
justice, either on common law principles or in terms of the statutory Regulations framed by the appellant?

RULE:
Jurisdiction of the Civil Court
Section 9 of the Code of Civil Procedure: “The Courts shall (subject to the provisions herein contained)
have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either
expressly or impliedly barred.”
Constitution of India-Articles 14 and 12
Code of Civil Procedure, 1908-Section 9
Industrial Disputes Act, 1947-Sections 2 (g) and 2 (s)Industrial Employment (Standing Orders) Act,
1946-Section 3
Road Transport Corporation Act, 1950-Section 45

In the ANALYSIS, the court discusses the jurisdiction of civil courts in relation to disputes arising under
the Industrial Disputes Act, 1947, and its sister enactments. It refers to the principles established in the
case of 'Premier Automobiles Ltd. v. Kamlekar Shantaram Wadke' regarding civil court jurisdiction:
If the dispute is not an industrial dispute and doesn't relate to any right under the Act, it falls within the
jurisdiction of the civil court.
If the dispute is an industrial dispute based on general or common law rights, the civil court's jurisdiction
is alternative, allowing the suitor to choose their remedy.
When an industrial dispute concerns rights or obligations created under the Act, the sole remedy is
adjudication under the Act.
If the right sought to be enforced is created under the Act (e.g., Chapter V-A), remedies include Section
33C or raising an industrial dispute.
The court extends the interpretation of "under the Act" to encompass not only the Industrial Disputes Act
but also sister enactments like the Industrial Employment (Standing Orders) Act if they lack their own
forums for enforcement.
Disputes involving the recognition, observance, or enforcement of rights and obligations under the
Industrial Employment Standing Orders must be treated as industrial disputes under Section 2(k) and/or
Section 2A of the Industrial Disputes Act. These disputes should be adjudicated exclusively in forums
established by the Industrial Disputes Act, barring civil court jurisdiction even if the dispute involves
elements of certified Standing Orders and general contract law.
The court clarifies that the civil court's jurisdiction may not be barred if an employee seeks to enforce
constitutional rights, statutory regulations, or other grounds not solely based on the Industrial Disputes
Act. The jurisdiction of the civil court depends on the specific circumstances of each case.

HELD:
If an employee intends to enforce his constitutional rights or a right under a statutory Regulation, the civil
court will have the necessary jurisdiction to try a suit. If, however, he claims his right and corresponding
obligations only in terms of the provisions of the Industrial Disputes Act or the sister laws so called, the
civil court will have none. In this view of the matter, in our considered opinion, it would not be correct to
contend that only because the employee concerned is also a workman within the meaning of the
provisions of the 1947 Act or the conditions of his service are otherwise governed by the Standing Order
certified under the 1946 Act ipso facto the Civil Court will have no jurisdiction.
If the infringement of Standing Order or other provisions of the Industrial Disputes Act are alleged, the
civil court's jurisdiction may be held to be barred but if the suit is based on the violation of principles of
common law or constitutional provisions or on other grounds, the civil court's jurisdiction may not be
held to be barred.

MANAGEMENT, SHAHDARA (DELHI) SAHARANPUR LIGHT RAILWAY CO.

LTD. V. S.S. RAILWAY WORKERS’ UNION, AIR 1969 SC 513
Facts:
An application for modification under section 10 of the Industrial Employment (Standing
Order) Act 1946 was filed before the Regional Labour Commissioner, some of which were
certified. The management filed an appeal against the said order which was disposed of by
the Chief Labour Commissioner in April 1964. Thereafter the Union made another
application for modification of Standing order. The Regional Labour Commissioner allowed
certain modifications but rejected the rest. The union thereupon appealed against the said
order. After hearing the parties, the Chief Labour Commissioner allowed certain
SHAHDARA–SAHARANPUR LIGHT RAILWAY COMPANY LTD. V SHAHDARA-
SAHARANPUR RAILWAY WORKERS’ UNION (1969) I LLJ 734.
Facts: The appellant company obtained a certified standing order from the regional Labour commissioner
under section 4 of the Act. Further, the appellant-company and the respondent union from time to time
made application for modification of that order.Sometimes thereafter, the chief labour Commissioner
passed an impugned order (challenged in this court by the Company) allowing four such modifications to
the original standing order. Among the all modifications, the appellant company objected to all the
modifications while the respondent-Union’s main concern in those modification was that some time limit
was necessary for the disposal of the appeals since the general managers of the company usually take
months to dispose of such appeal hence delaying the ordinary workman’s effort to seek the relief of
industrial dispute in time. Therefore, one of the modifications passed through the impugned order was a
direction that every such appeal shall be disposed of by the appellate authority within sixty days from the
date of its receipt. Another important modification which was allowed in the impugned order is as follows
that in case the management propose to remove the workman from service they shall serve on the
workman separate show cause notice to that effect. The counsel for the company moved a special leave
petition to the supreme court challenging the impugned order on the grounds of the applicability and
scope of section 10 (2) of the Act.

ISSUE: To what extend the scope of application of section 10 (2) of the Industrial Employment (standing
orders) Act 20 of 1956, which was further amended by Act 36 of 1956 is applicable when determining the
duration and modification of standing orders under the Act.

RULE: On duration and modification of the Standing Orders; Section 10 (2) of the Industrial
Employment (Standing Orders) Act, 1946 states that:
2) Subject to the provisions of sub - section (1), an employer or workman or a trade union or other
representative body of the workmen may apply to the Certifying Officer to have the standing orders
modified, and such application shall be accompanied by five copies of the modifications proposed to be
made , and where such modifications are proposed to be made by agreement between the employer and
the workmen or a trade union or other representative body of the workmen a certified copy of that
agreement shall be filed along with the application

Analysis: The object of the standing order is to make it clear to both the parties on what terms and
conditions the workmen are offering to work and the employer is offering to engage them. Hence, the
Industrial Employment (standing Order) requires the employers to define the condition of service in their
establishment and to reduce them to writing and to get them compulsory certified with a view to avoid
unnecessary industrial dispute. It was held over the conditions for certification of standing order that the
Modification of standing orders, is permissible under section 10 but modification can only be achieved by
adhering to the prescribe manner. The Modification of standing order requiring giving of reason in cases
related to discharge of workmen, the court further found and held to be fair and reasonable. On answering
to the Counsel of the company’s contention over the question of fairness and reasonableness they held
that the question as to fairness and reasonableness of modification has been left by legislature to the
authorities empowered under the act and the supreme court under article 136 of the constitution and it
would not be justified in interfering with conclusions of authorities unless an important principle of law
requiring elucidation is involved

HELD: The standing order relating to the termination of service of a permanent workmen was modified
requiring the employer to give reasons and communicating the same to the workmen in addition to giving
one month’s notice or one month’s pay in lieu of notice.  The modification was held to be fair and
reasonable . But the modification of the standing orders requiring requiring the giving of second show
cause notice at the stage of imposing punishment of removal cannot be considered as fair and reasonable.
 And section 10 does not state that once a standing order is modified and the modification is certified,
no further modification is permissible except upon proof that new circumstances have arisen since the last
modification.

An application for modification would ordinarily be made where (1) a change of circumstances has
occurred. Or (2) where experience of the working of the standing order last certified results in
inconvenience , hardship anomaly etc. (3) where some facts was lost sight of at the time of certification.
Or (4) where the applicant feels that a modification will be more beneficial. It is clear that in categories
other than first one, there will be no change of circumstances, but that does not mean that no modification
can be asked although the standing order has resulted in hardship inconvenience or anomaly etc. but
because there is no change of circumstances.

Section 10 does not lay down any restrictions on the right to apply for modifications except those that are
provided in the section itself.  It was further observed by the supreme court that “the act is a beneficent
piece of legislation and therefore unless compelled by any words in int the court would not be justified in
importing in section 10 through inference only a restriction to the right conferred by it on account of
supposed danger of multiplicity of application.  An important keynote on the judgment over the issue of
duration was that the object of providing a time of 6 months for modification from the date the Standing
Orders of the modification came into operation was in order to allow the standing orders to work for a
sufficiently long time to see whether they work properly or not.

ASSOCIATED CEMENT CO. LTD. VS THE WORKMEN AND ORS [1964] 3 SCR 652
FACTS: This industrial dispute is in regard to the dismissal of 5 workmen employed by the appellant,
(The Associated Cement Companies Ltd.) [ACC] on the behest of various instances of misconduct that
had taken place. These 5 workmen were Mehnga Ram, Janak Raj, Daulat Singh, Malak Ram and Vishwa
Nath Bali. The respondents contended that the dismissal based on their “misconduct” of the said
workmen was unjustified, and thus the said dismissed workmen should be reinstated and their wages for
the period of enforced unemployment should be paid to them. The Government of Punjab referred this
dispute for adjudication to the Industrial Tribunal Punjab, Patiala, under section 10(1)(d) of the Industrial
Disputes Act
Mehnga Ram, Janak Raj and Daualt Singh were involved in 3 instances of misconduct which included
having stopped workmen from getting into the factory and starting their work in time and causing
cessation of work. Mehnga Ram and Janak Raj, on another instance organized a meeting where they
allegedly instigated their co - workers to go on a strike and resort to violence. In the last instance, all 3 of
these workmen, along with Vishwa Nath, against stopped workmen at the factory gate and thus prevented
them from going to their duties. They had also allegedly indulged in hostile slogans.  Malak Ram on the
other hand, has allegedly led the disruption and hooliganism during a cinema show organized by the
management.  All 5 workmen were thus given charge - sheet and enquiry was held against them. As a
result of the findings recorded at the said enquiries, the appellant dismissed all the five workmen
concerned.
ISSUE: Whether the Industrial Tribunal was justified in holding that the enquiries held with respect to the
misconduct of Vishwa Nath and Malak Ram were in accordance to principles of natural justice?

ANALYSIS: Malak Ram's inquiry regarding his alleged misconduct during the cinema show, which was
said to have violated Standing Order No. 16, sub-clause (1), had three flaws that indicate it did not adhere
to the Principles of Natural Justice.
The first issue is that the three inquiry officers (Manager, Assistant Manager, and Chief Engineer)
claimed that they personally witnessed Malak Ram's alleged misconduct:
The appellants argued that being witnesses to the misconduct should not disqualify these officers from
conducting the inquiry.
However, the court believed that domestic inquiries should be conducted with the utmost honesty and in
good faith. Injustice is likely to occur if an officer who has personally witnessed the incident leads the
inquiry.
In this case, such injustice was evident when the Manager rejected Malak Ram's written explanation
simply because it contradicted what the Manager, Assistant Manager, and Chief Engineer had observed.
When determining the truth of Malak Ram's explanation, the inquiry officer should not have relied on
their personal knowledge or that of their colleagues, nor should they have depended on reports from other
independent witnesses.
This manner of rejection demonstrated a clear disregard for the requirements of a proper domestic
inquiry.
The third issue in this inquiry pertained to a letter sent by the manager to Malak Ram regarding the
conclusion of the inquiry. In the letter, the manager stated that Malak Ram's account was inconsistent
with the evidence provided by Assistant Manager Mr. Mohan, one of the inquiry officers, regarding
alleged mistreatment and what the inquiry officers themselves had witnessed.
Similarly, Vishwa Nath's inquiry, concerning his alleged involvement in preventing workers from
entering the factory premises and engaging in disorderly behavior by shouting hostile slogans (alleged
misconduct under Standing Order No. 16, sub-clause (ix)), also suffered from several flaws.

The inquiry officers refused to accept the testimony of witnesses presented by Vishwa Nath for three
reasons, each of which had its own problems:
Reason 1: Some of the witnesses Vishwa Nath cited were absent from duty on the day of the alleged
misconduct. The court found fault with this because the inquiry officers had determined this from the
attendance register without giving Vishwa Nath an opportunity to explain or provide the witnesses,
creating a serious flaw in the proceedings.
Reason 2: One of the witnesses, Bakhtawar Singh, mentioned in cross-examination that he arrived for
duty at a different time than stated in his statement. The court held that disbelieving a witness solely on
this ground without giving them a chance to explain was unfair to Vishwa Nath.
Reason 3: The third reason for disbelieving Vishwa Nath's witnesses was based on evidence recorded in
an inquiry against another worker, Daulat Singh. The court deemed this unfair because separate inquiries
were held for Vishwa Nath and Daulat Singh, and relying on evidence from one inquiry in the other
without Vishwa Nath's opportunity to cross-examine was unjust.
In conclusion, the Industrial Tribunal upheld that both Malak Ram and Vishwa Nath were not treated in
accordance with the principles of natural justice in their respective inquiries. As a result, the tribunal
ordered their reinstatement with continuity of service and full payment of wages from the date of their
dismissal to the date of reinstatement as compensation for wrongful dismissal.

The Industrial Employment (Standing Orders) Act, 1946 & Chapter IV of the IRC 2020 (Criminal
Proceeding v. Disciplinary Proceedings)

8. Depot Manager, Andhra Pradesh State Road Transport Corporation v. Mohd.

Yousuf Miya, (1996) 9 SCALE 65 (Criminal Proceeding v. Disciplinary Proceedings)

Facts  The case involved disciplinary proceedings initiated against the respondent for a road accident in
which a cyclist died while he was driving the Corporation's vehicle. Criminal charges were also filed
against him under Section 304 Part II and Section 338 of the Indian Penal Code (IPC).  The respondent
filed a writ petition in the High Court seeking a stay on the departmental proceedings, which was granted
by a single judge and later confirmed by a Division Bench. The case reached the Supreme Court through
appeals filed by the Corporation.
Issues 1. Whether the High Court was right in directing a stay of the departmental enquiry due to the
ongoing criminal proceedings.
2. Whether the departmental enquiry would prejudice the defence of the respondent in the criminal case.
Held  The Supreme Court held that staying disciplinary proceedings merely because of the concurrent
criminal proceedings should not be a matter of course but a decision based on the facts and circumstances
of each case. The purpose of departmental enquiries and criminal prosecutions are distinct.  The Court
emphasized that unless the charge in the criminal trial is of a grave nature involving complicated
questions of fact and law, there is no bar to proceeding simultaneously with the departmental enquiry and
criminal trial.
 In this case, where the charges in the departmental proceedings were unrelated to the criminal charges
against the respondent, the High Court was not right in staying the proceedings. The appeals were
allowed. (Fair Enquiry, Legal Representation)

9. The Board of Trustees of the Port of Bombay v. Dilipkumar Raghavendranath

Nadkarni (AIR 1983 SC 109)

Facts  A charge-sheet was filed against the first respondent (an employee of the port trust of Bombay)
accusing them of misconduct.  Before the inquiry began, the first respondent requested permission to
have a legal practitioner represent them. The Chairman of the appellant (the entity bringing the charges)
rejected this request and appointed two law officers from the legal section of the Port, that is Legal
Adviser and Junior Assistant Legal Adviser as Presenting-cum-Prosecuting Officers for the inquiry.
 During the course of the inquiry, on May 8, 1976, the Bombay Port Trust Employees Regulations 1976
came into effect, which included Regulation 12(8).
 This regulation allowed employees to seek assistance from a fellow employee or an "Office Bearer"
from their union but generally prohibited the engagement of legal practitioners unless the Presenting-
cum-Prosecuting Officer appointed by the disciplinary authority was a legal practitioner or the
disciplinary authority permitted it.
 Despite the new regulation, neither the Enquiry Officer nor the Chairman of the appellant reconsidered
the earlier decision to disallow the first respondent from having a legal practitioner represent them.
Ultimately, following the conclusion of the inquiry, the first respondent was dismissed from service. 
The first respondent challenged their dismissal in the High Court of Judicature at Bombay through a legal
petition.
 The Single Judge of the High Court ruled in favor of the first respondent, stating that the Chairman's
refusal to allow them legal representation, despite appointing two legally trained Presenting Officers,
violated the principles of natural justice.

Issue 1 Does the limitation imposed by the employer as to disallow the delinquent employee from getting
legal practitioner run counter to the principles of natural justice, when the employer themselves have
appointed a legally trained individual as a Presenting-cum- Prosecuting Office? Held A. Domestic
Inquiry, not merely managerial in nature, can have serious consequences on reputation and livelihood:
 In a domestic inquiry, serious charges can have dire consequences for an accused employee's future.
These inquiries, often viewed as managerial functions, are conducted by individuals within the
organization who take on the roles of both judge and prosecutor.
 The accused employee, typically lacking legal training, may be pitted against legally trained personnel
from the employer's side. If the inquiry rules don't explicitly forbid legal representation for the accused, it
should be at the discretion of the Enquiry Officer to decide whether they should be allowed legal
assistance, considering the nature and complexity of the case.
 The key concern is the imbalance in representation. To ensure fairness, the accused should have the
same access to legal support as the employer.
B. Lack of Fair Play and Action by the Chairman  In this case, the rules governing the inquiry neither
allowed nor prohibited the delinquent employee from being represented by a lawyer. However, the
Chairman of the appellant appointed legal advisers and junior legal advisers from their organization as
Presenting-cum- Prosecuting Officers for the inquiry.
 This implies that the Chairman believed the issues in the inquiry were legally complex and required
legal expertise. Interestingly, while two legal officers were appointed to conduct the inquiry as
prosecutors, the Chairman denied the delinquent employee's request to have legal representation.  This
raises questions about fairness and impartiality. It creates an inherent imbalance, as the employer has two
legally trained representatives, while the employee is left to defend themselves or rely on an untrained
colleague like Nadkarni.
 Thus, not allowing the delinquent employee to appoint a legal professional to defend themselves
violates principles of natural justice, as it does not allow them an opportunity to effectively and
meaningfully represent themselves in a domestic enquiry, which may have dire consequences in their
personal and professional career.

(Right to Representation, Model standing orders & Draft standing orders)

9. Crescent Dyes & Chemicals Ltd. v. Ram Naresh Tripathi [(1992) 3 SCALE 518]
Facts  On November 29, 1980, the employee, Ram Naresh Tripathi, was issued a charge sheet alleging
misconduct. In response, a domestic enquiry was initiated, and an enquiry officer was appointed to
investigate the alleged misconduct of the employee.
 During the enquiry process, the employee, Mr. Tripathi, requested that he be allowed representation by
an individual named Talraja.  However, the enquiry officer declined Mr. Tripathi's request for
representation by Talraja. The reason given was that Talraja was not affiliated with either the recognized
union or the unrecognised union operating within the employer's establishment.
 Consequently, Mr. Tripathi chose not to participate further in the enquiry, leading to the dismissal from
his employment.  The High Court determined that the refusal to allow Talraja to represent the accused
amounted to unfair labour practice as defined in Item 1(f) of Schedule IV to the Act. This was seen as a
violation of the principles of natural justice.
Issue: Does the limitation imposed by the Standing Orders and Section 22(ii) run counter to the principles
of natural justice?

Held  In the particular instance, the delinquent's right to representation was governed by the Standing
Orders, which allowed a clerk or a worker in the same department as him to represent him.  This right
was further expanded by Sections 21 and 22(ii), which stated that in instances where an employee is
facing a domestic or departmental enquiry, officers, office staff members, or members of a recognized or
unrecognised union may act on behalf of the accused, provided they have been duly authorized by the
State Government.  The court held that the right to be represented by counsel or an agent can, be
restricted, controlled, or governed by laws, rules, regulations, or standing orders. Unless the law expressly
provides for such representation, a delinquent has no right to be represented by counsel or an agent.  The
court opined that such restrictions are intended to guarantee that the domestic investigation is concluded
quickly and is not drawn out unnecessarily.  Once the Standing Orders are included in the contract of
employment, both the employer and the employee are bound by those terms, and the employee cannot
argue that he would still prefer to be represented by a third party absent a specific statutory provision to
the contrary.

10. Bharat Petroleum Corpn. Ltd. v. Maharashtra General Kamgar Union [(1999) 1 SCC 626]4
Facts  Bharat Petroleum Corpn. Ltd submitted their Draft Standing Orders for Certification. The
Certification was granted by the Certifying officer on the condition that there would be alterations to the
Draft Standing Orders, including the deletion of the clause relating to the representation of an employee
during disciplinary proceedings.  An appeal was filed and the appellate authority approved the clause
relating to the representation of an employee during disciplinary proceedings and set aside the order by
the Certifying officer.
 This was challenged in the Bombay Hight Court by the respondents herein. Bombay High Court
allowed the writ petition setting aside the order of the appellate authority and maintaining the order
passed by the Certifying Officer.  Therefore, the clause relating to the representation of an employee
during a disciplinary proceeding, as contained in the Model Standing Orders, became applicable to the
appellant’s establishment and not the clause in the Draft Standing Orders.

Issue 1 Whether an employee, against whom disciplinary proceeding have been initiated, can claim to be
represented by a person, who though is a member of a trade union but is not an employee of the
appellant?

Held  This right of representation is only available to the extent provided in the service rules. An
employee does not have an inherent or equitable right to representation in departmental proceedings by
another person or lawyer.
 The court had arrived at this conclusion based on the reasoning that disciplinary proceedings are not
enquiries before a court of law and involved fairly simple questions of fact which a person of fair
intelligence and knowledge of the conditions prevailing in the industry will be able to answer.  The court
also considered that in enquiries before domestic tribunals a person accused of any misconduct usually
presents his own case.
 They noted that Crescent Dyes upheld the statutory restrictions on the delinquent employee’s choice of
representation in a domestic enquiry through an agent.  In Crescent Dyes, the court had observed that the
right of representation by a counsel cannot ordinarily be restricted. However, this right is not an element
of principles of natural justice. Right of representation can be restricted by law, for instance, under
Section 36 of the Industrial Disputes Act 1947 or by certified standing orders.
 The Standing Orders, as finally certified by the appellate authority, did not disturb the provisions related
to the right of representation as contained in the Model Standing Orders as they still provide that an
employee can be represented in disciplinary proceedings through another employee. (Disciplinary
Proceedings, time)
11. Managing Director, ECIL v. B. Karunakar AIR 1994 SC 1074
Facts B. Karunakar was an employee of ECIL, a public company engaged in manufacturing electronic
equipment. He held various positions, including General Manager and Head of the Hyderabad Division.
In 1990, complaints were lodged against Karunakar, accusing him of misconduct, including misusing
official cars and resources. Subsequently, he was suspended, and an inquiry was initiated by the
Managing Director of ECIL. The Managing Director conducted the inquiry himself and dismissed
Karunakar from service based on the findings.

Issues 1. Whether the dismissal of B. Karunakar was justified. 2. Whether the principles of natural justice
were followed in the disciplinary proceedings against Karunakar. 3. Whether the Public Servant
(Inquiries) Act, 1850 applied to the case.

Held 1. Dismissal Justification: The dismissal of Karunakar was not justified because the inquiry
conducted by the Managing Director lacked fairness. While serious charges were leveled against
Karunakar, he was not given a reasonable opportunity to defend himself during the inquiry.
2. Principles of Natural Justice: The court emphasized the importance of natural justice, which requires a
fair and impartial hearing for the accused in disciplinary proceedings. In this case, the Managing Director
conducted the inquiry himself, which was a violation of natural justice. Additionally, Karunakar was not
given a reasonable opportunity to present his defense, further breaching the principles of natural justice.
3. Scope of the Public Servant (Inquiries) Act, 1850: The court did not provide specific information
regarding the application of the Public Servant (Inquiries) Act, 1850, in the case summary provided.

12. Debotosh Pal Choudhary v. Punjab National Bank, AIR 2002 SC 3276
Facts  The Petitioner was an employee of the Respondent Bank, i.e., the Punjab National Bank. He was
dismissed from service by an order made on October 8, 1988 on charges of some malpractices during his
employment based on an enquiry conducted.  Petitioner challenged the order of dismissal and contended
that the enquiry conducted against him was in violation of many rules of law as per the Punjab National
Bank Officer Employees'' (Discipline and Appeal) Regulations, 1977.  The Single Judge Bench of the
High Court ruled in favour of the Petitioner. However, the Division Bench later reversed the order, ruling
in favour of the Bank. The Petitioner has approached the Supreme Court of India for relief.
Issues 1. Did the Petitioner have reasonable opportunity to have the copies or the documents relating to
the inspection? 2. Was the Petitioner afforded an opportunity to adduce oral evidence by examining two
witnesses Shri S.C. Tandon and Shri A.K. Dey? 3. Was there a necessity on behalf of the inquiring officer
to provide 15 days’ time period to the Petitioner to file a written brief?

Held 1. On the first issue, the Supreme Court found out that there was in fact a delay by the inquiring
officer in supplying all the documents listed under section 6(5) of the Punjab National Bank Officer
Employees'' (Discipline and Appeal) Regulations, 1977 to the Petitioner. However, the court also noted
that supplying the said documents to the petitioner was merely a procedural requirement. Non-compliance
of a procedural requirement cannot invalidate the entire inquiry itself. 2. During the investigation stage of
the inquiry, the Court found out that the petitioner was asked to present any oral witnesses, if any. The
Petitioner chose not to present any oral witness. However, the court found that after the oral witness’s
stage was over, the petitioner sought to present his witnesses- namely Shri S.C. Tandon and Shri A.K.
Dey. The Petitioner basically sought to present his witnesses after the entire inquiry stage was over. 3. As
far as issue 3 is concerned, the court ruled that Section 6(18) of the Act states that the officer may permit
them to file written briefs of their respective cases within 15 days of the date of completion of the
production of evidence, “if they so desire.” The court analyzed this section as not a mandatory
requirement, but a mere requirement on the behest of the inquiring officer. Moreover, the court noted that
even if the petitioner had presented a written brief, it would have had no effect on the officer’s final
decision. The Petitioner in the present case was given ample opportunity to present his case before the
inquiring officer by adducing the oral witnesses. However, the petitioner decided to not do so until the
last moment. As far as the delay in supplying inquiry results are concerned, the Court is right in
concluding that mere delay in procedural requirements cannot vitiate the entire inquiry process.

WEEK 9-10

1) Kerala State Electricity Board v. Valsala K., AIR 1999 SC 3502

Issue:

Whether the amendment to Section 4 and 4-A, enhancing compensation and interest rates, would
be retroactively applicable to cases where the accident occurred before the amendment's
enactment.

Analysis:
The court applied the principle that the relevant date for determining the applicability of
amendments affecting compensation is the date of the accident. It considered the implications of
the amendment to Section 4 and 4-A and whether it could be retrospectively applied to accidents
occurring prior to the amendment. The court, relying on its previous judgment in Pratap Narain
Singh, held that the amendment, which increased the compensation payable, would not be
applicable to accidents that took place before its enactment. The court overruled the earlier
judgment in Neelakandan and established that the benefit of such an amendment does not extend
to accidents occurring before its effective date.

2) Roshan Deen v. Preeti Lal, AIR 2002 SC 33 (Contracting out)

Issue:

Whether the Commissioner, under Section 28 of the Act, had the power to recall the compromise
order due to fraudulent execution by the employer?

Rules:

· Workmen’s Compensation Act, 1923:

· Section 4(b): Specifies compensation for permanent total disablement.

· Section 17: Nullifies any agreement relinquishing a worker’s compensation rights.

· Section 28: Requires the registration of agreements; allows rejection for fraud.

· Section 29: Imposes liability if the memorandum of agreement is not sent.

Analysis:

The Supreme Court assessed the legality of the Commissioner's order based on Sections 4, 17,
28, and 29 of the Act. It emphasized the entitlement of Roshan Deen to compensation as per
Section 4(b) due to total disablement. Section 17 prohibits agreements waiving compensation
rights. Section 28 mandates agreement registration, with the power to reject for fraud. Section 29
imposes liability for non-compliance.

The Commissioner's order was declared fraudulent, as the compromise was based on deception.
The High Court's reinstatement was deemed erroneous, overlooking the fraud. The court
emphasized the Commissioner's power to recall orders obtained through fraud, citing precedent.

Conclusion:
The Supreme Court nullified the fraudulent order and directed the Commissioner to expedite
proceedings. It instructed an inquiry into the advocate's alleged fraud. The judgment highlighted
the High Court's duty to correct unjust orders and upheld the Commissioner's authority to recall
orders tainted by fraud. The case emphasizes the need for justice over legal formalities.

Comparative Provision on The Code on Social Security, 2020:

Section 89 mirrors Section 28 of the Workmen’s Compensation Act, emphasizing agreement

registration and the power to reject for fraud. The Code strengthens workers' rights and maintains
provisions against fraud, aligning with the principles established in the analyzed case.

3) Mackinnon Mackenzie and Co. Private Ltd. v. Ibrahim Mahommad Issak, AIR 1970 SC 1906
(Suicide)
4) Rita Devi v. New India Assurance Co. Ltd., AIR 2000 SC 1930 (Murder)
Facts:

- In 1995, Dasarath Singh was a driver of an auto-rickshaw owned by Lalit Singh, which
was registered as a public carrier vehicle for hire and insured by the respondent-Insurance
Company. On March 22, 1995, the auto-rickshaw was reportedly hired by unknown
passengers from a rickshaw stand in Dimapur between 5 to 6 PM. Tragically, the auto-
rickshaw was reported stolen, and Dasarath Singh's lifeless body was found the following
day. However, the auto-rickshaw was never recovered. The respondent-Insurance
Company accepted Lalit Singh's claim for the loss of the auto-rickshaw and settled the
same for a sum of Rs. 47,2207.
- Darshan Singh, claiming to be a Power of Attorney holder for the appellants, filed a
claim petition under Section 163A of the Motor Vehicles Act, 1989, seeking damages for
Dasarath Singh's death during his employment with Lalit Singh, attributing it to an
accident arising from the use of the vehicle. The Motor Accidents Claims Tribunal found
in favor of the claimants, holding Lalit Singh liable to compensate for the death.

Issue:

Whether the meaning of “accident” under the MV Act can be given the meaning ascribed to it
under the WC Act?
Application:

The Court remarked that the common parlance meaning of “accident” does not include murder
when the dominant intention of the act of the felony is to kill. Therefore, the Court concluded
that Dasarath Singh was duty-bound to accept the demands of the unknown passengers and
transport them to their destination. It was in the course of his duty as the rickshaw driver that he
was exposed to the risk of nefarious persons whose primary intention was to steal the auto-
rickshaw. It was only incidentally to the theft of the vehicle that he was murdered, in order for
the passengers to be able to carry out their main objective. Therefore, having been put at the time
and place of the murder due to his employment, and keeping in mind that his death was an
incidental act committed in the process of the theft, the death of the deceased would be held to
have been caused accidentally in the course of his employment.

On the second issue of whether the meaning of “accident” can be ascribed under the MV Act as
it has been done under the WC Act, the Court once again, held in the affirmative. It elucidated
that the relevant object of both the Acts is to provide compensation to the victims of the
accidents. Upon a perusal of the objects, it becomes clear that both legislations are beneficial
enactments for the payment of compensation to victims. Furthermore, the nexus between the
employment and the accident does not need to be direct, as shown by the construction of the
provision. The use of the words “arising out of”, as opposed to “caused by” indicates that a less
immediate, direct or proximate causal relationship needs to be established. Finally, in allowing
for employees to claim compensation under either the MV Act or the WC Act under Section 167
of the MV Act, the legislature has sought to make compensation under the provisions of either
available to employees. In such a situation, both needing to be equally available to workers, the
interpretation of accidents under the WC Act would be equally applicable to the MV Act.

Note - “accidents arising out of use of vehicle” in the MV Act is equated with “accidents arising
out of employment” in the WC Act. In Mackinnon, a narrow interpretation of the causal link
between employment and the accident was given; however the case of Rita Devi increases the
access to compensation by victims in cases of accidents caused in the course of employment.

General manager, B.E.S.T. undertaking, Bombay v. Mrs Agnes

FACTS:
 The Bombay Municipal Corporation, runs a public utility transport service in Greater
Bombay and the said transport service is managed by a Committee known as the Bombay
Electricity Supply and Transport Committee. The said Committee conducts the transport
service in the name of Bombay Electric Supply and Transport Undertaking. The
Undertaking owns a number of buses, and the Corporation employs a staff, including bus
drivers, for conducting the said service. Undertaking permits a specified number of the
traffic outdoor staff in uniform to travel standing in a bus without payment of fares.
  Nanu Raman was a driver employed by the corporation. On July 20, 1957, Nanu Raman
finished his work for the day at about 7.45 p.m. at his designated bus depot. After leaving
the bus in the depot, he boarded another bus to go to his residence. The said bus collided
with a stationary lorry parked at an awkward angle. As a result of the collision, P. Nanu
Raman got thrown out of the bus and died due to injuries he sustained.
 His widowed wife (the respondent to the case) filed an application in the Court of the
Commissioner for Workmen's Compensation, Bombay, claiming a sum of Rs 3500 as
compensation by reason of the death of her husband in an accident alleged to have arisen
“out of and in the course of his employment”. To that application the General Manager of
the B.E.S.T. Undertaking, Bombay, was made the respondent and he contended that the
accident did not arise “out of and in the course of the employment” of the deceased.
 The Commissioner dismissed the application accepting the contention of the General
Manager of the B.E.S.T. Undertaking. On appeal, the High Court of Bombay held that
the said accident arose “out of and in the course of the employment” of the said deceased
and, on that finding, passed a decree, in favour of the widow for a sum of Rs 3500 with
costs. The General Manager of the B.E.S.T. Undertaking preferred the present appeal
against the order of the High Court.

ISSUE: Can Nanu Raman be considered to have sustained fatal injuries on his way home in the
course of his employment?
RULE: S. 3(1) of the Employees’ Compensation Act

ANALYSIS:
 The primary point of consideration for the court was that till what point can a workman
be regarded to remain in the course of employment after he has left the physical premise
of the employer. To answer this question, the court opined that for an injury sustained in
occupational transit to be regarded as an injury sustained in an accident arising out of
and in the course of his employment, there must be a duty on the part of the employee to
utilize the means of commute made available to him by the employer. This means that for
the injury to meet the threshold, the employee must be utilizing the means of transit
provided by the employer as an obligation under the terms of employment at the time he
sustained it.
 Further, the “duty” to commute to work using the means and, in the manner, specified by
the contract may be “implied”. Thus, an employee need not necessarily be under an
express and strict obligation to only use the means of commute provided by the
employee. A mere right to use the said means in the stipulated manner would be
sufficient to regard an employee as being “obliged” to use the means of commute
provided by the employee. This principle becomes especially relevant if the employee
does not have a good commute alternative to the employer’s facility, which happened to
be the case in the matter before the court.
  In the present case, it was apparent from Rule 19 of the Standing Rules of the Bombay
Municipality B.E.S.T. Undertaking that the employer (B.E.S.T) did provide the
employees (bus drivers) a commute facility that the employees could utilize in the
manner specified in the Rule. Furthermore, the terms governing the reporting time of bus
drivers at the bus depot required the drivers to be very punctual, making it more
important for the drivers to use the facility in question.
 The court also accepted a “but for” test that has the same effect as the ‘implied
obligation’ test but has a different form. As per this test, so long as a workman is in a
place in which he would have no right to be but for the work on which he is employed, he
would still be in the course of his employment. Thus, if a workman is utilizing a
commute facility only made available to the employees of an establishment, he can be in
the course of his employment.

CONCLUSION: Since the conduct of the deceased driver, the terms of the employment contract
and the relevant circumstances of the case were in line with the qualifying principles affirmed by
the court, the appeal was dismissed the compensation sought by the respondent was held valid.

Saurashtra Salt Manufacturing Co. v. Bai Valu Raja

FACTS:
 The appellant is the Saurashtra Salt Manufacturing Co., a business that runs a salt mine
near Porbandar, an Indian coastal town in the state of Gujarat. There are both regular and
temporary workers at the company, so the staff is different. One important part of this
case is that the salt works are located near a creek, across from the town of Porbandar.
When workers want to get to the salt works, they can choose between two different ways.
On the first way, you'll be travelling overland, which is a trip of about 6 to 7 miles. For
the second, and more direct, path, you must take a boat across the creek.
 From point A to point B, you have to cross the creek to start this water trip. An area of
soft land at the Porbandar end of the creek is used for this crossing. People who start at
point A and want to cross the creek get off the boat at point B, which is on soft ground.
After going through the beach area from point B, workers can get to the salt works' salt
pier and then the salt works itself.
 Several workers died in a terrible accident while crossing a creek to get to work. The case
was based on that accident.

ISSUE: Whether the appellant and the ferrywalas had an agreement for its workers to be ferried
to and from the salt works, and if so, what were the terms of that agreement? Whether the
agreement should apply to all casual workers like the ones in question, whether they were going
to or coming back from the salt works.

RULE: S. 3 (1) of the Employees’ Compensation Act.

ANALYSIS:
 The court starts by validating the principle of notional extension. According to the Rule
of Notional Extension, an employer is required to provide compensation in situations in
which an employee has an accident while working away from the employer's premises;
however, the amount of compensation that must be paid depends on whether or not the
employee was performing duties related to their employment at the time of the accident.
 This is the idea that the employer's property includes the places that workers walk
through on their way to and from work. The court does add an important caution, though:
hypothetical extension has its limits. Beyond a certain point in the trip, the judgement
makes it clear that an employee is no longer "in the course of employment." This
distinction is necessary to make sure that not every incident related to commuting is
compensable. This protects companies from having to pay too much in compensation.
 It needs strong proof that an agreement was made between the company and ferry
companies so that workers can get to and from work. The court's decision is affected by
the fact that there isn't enough solid proof. This shows how important it is to have strong
evidence when proving compensation responsibility under the Workmen's Compensation
Act. The decision doesn't support a one-size-fits-all method. Instead, it shows how
important it is to look at each case on its own, considering the facts and circumstances.

CONCLUSION: The court decided not to find the employer responsible for the accident since
there was no definitive agreement in place between the boat operators and the employer at the
time of the incident. It emphasises the need for a full review of the individual circumstances in
each instance and stresses the need of an evidence-based approach to establishing culpability.
 Weeks 11 – 12: The Factories Act, 1948

 State of Bombay v Ardeshir Hormosji Bhiwandiwala (1956) II LLJ 26 Bom

Issue:
Whether the Salt Works come within the definition of the word “factory” under S. 2(m) the Act.
Rule:
Sections 2 (k) and (m) of the Factories Act
Analysis:
The court observed: “The word ‘premises’ in the definition is a generic term meaning open land or land
with buildings or buildings alone. Expression ‘premises including precincts’ does not necessarily mean
that the premises must always have precincts. Even buildings need not have any precincts. The word
including is not a term restricting the meaning of the word ‘premises’ but is a term which enlarges its
scope. The use of the expression therefore does not indicate that the word ‘premises’ must be restricted to
mean building and be not taken to cover open land as well. An occupier is to comply with such provisions
of the Act which apply to the factory he is working. Hence such salt works would come within the
meaning of the word 'premises' used in the definition in S. 2(m)”.
The Court further evaluated the factual situation of the salt works in order to find out Whether the salt
works would fall within the ambit of the definition of manufacturing process provided in S. 2(k) of the
Act so that the Court can reach the conclusion that the salt works may be covered within the scope of S.
2(m) of the Act.
Accordingly, the Court observed that the sea water in the sea never becomes salt merely on account of the
play of the sun's rays on it. Laborers are employed for admitting sea water to the reservoirs by working
sluice sales, sometimes at night also, or the pump; it tilling crystallizing beds; it watching the density of
brine in the crystallizing beds; (in seeing that the density does not exceed certain limits and that salts
other than sodium chloride (common salt) are not formed;
 scraping and collecting salt crystals;
 grading the salt crystals by sieving and
 putting salt into gunny bags.
It follows that it is due to human agency, aided by natural forces, that salt is extracted from sea water. The
processes carried out in the Salt Works and described above, come within the definition of manufacturing
process in S. 2(k) inasmuch as salt can be said to have been manufactured from sea water by the process
of treatment and adaptation of sea water into salt. In view of the above discussion, the Court held that Salt
Works do come within the definition of the word “factory”.
Conclusion:
Salt Works do meet the meaning of the word "factory" and fall within this definition. Moreover, salt
was produced from sea water through a treatment process and adaptation, the Hon’ble court
rightly concluded that the method of turning sea water into salt at the appellant's Salt Works falls under
the description of "manufacturing process" in Clause (k) of Section 2 of the Act. Through this procedure,
seawater, a non-commercial product, was changed into salt, a commercial product & it falls under the
ambit of “factory” of Section 2(k) of the Act.

 V.P. Gopala Rao v. Public Prosecutor, Andhra Pradesh, AIR 1970 SC 66

Facts:
M/s Golden Tobacco Co Pvt Ltd was a company which dealt in Tobacco related activities, like selling,
processing etc. Its head office and the main factory were situated in Bombay, and Cigarette
manufacturing was carried out there. The Appellant was essentially the Manager of the Company’s
premises in Eluru, Andhra Pradesh where sun-cured country tobacco leaves were purchased from the
local producers and were further collected, processed, stored and transported to the main factory at
Bombay. It was an established fact that there were easily over 20 workers at the premises in Eluru.
Prosecution contended that it must fall under the definition of Factory.
Issue:
(i) Whether the premises at Eluru was a factory or not as under section 2(k)?
(ii) Whether there were enough workers to attract the said provision of 2(m)?
Rule:
Sections 2 (k) and (m) of the Factories Act
Analysis:
In a company's premises at Eluru, sun-cured tobacco leaves bought from the growers were subjected to
the processes of moistening, stripping and packing. The stalks were stripped from the leaves. The Thukku
(wholly spoilt) and Pagu (partly spoilt) leaves were separated.
The leaves were tied up in bundles and stored in the premises. From time to time, they were packed in
gunny bags and exported to the company's factory at B where they were used for manufacturing
cigarettes. More than 20 persons were working on the premises regularly every day under the supervision
of the management.
The moistening was an adaptation of the tobacco leaves. The stalks were stripped by breaking them up.
The leaves were packed by bundling them up and putting them into gunny bags.
The breaking up, the adaptation and the packing of the tobacco leaves were done with a view to their use
and transport. All these processes are manufacturing processes within S. 2(k)(i).
Conclusion:
The Court held that such treatment of the tobacco leaves constituted a Manufacturing process u/s 2(k)(i)
and the premises constituted to be a Factory u/s 2(m) as there was prima facie evidence showing the
relationship of employment between the Occupier and the Workers as the former admitted to the
employment of more than 20 workers. Therefore, it was held as a Factory.

 Lal Mohammad v. Indian Railway Construction Co. Ltd., AIR 1999 SC 355
Issue:

Rule:
Sections 2 (k) and (l)
Analysis:
While railway lines are being constructed on a given site, no article or substance is being made or
repaired, maintained, finished, etc. Raw materials like railway sleepers, bolts and loose railway rails when
bought by the construction company from the open market and brought on site are articles visible to the
eyes and are movable articles. These articles are adapted for their use. Their use is for ultimately laying
down a railway line. In that process, sleepers, bolts and rails would get used up. If that happens, the
definition of manufacturing process' dealing with adaptations of these articles for use would squarely get
attracted.
It is true that the ultimate product of this exercise or process is the bringing into existence a railway track
which is embedded in the earth, which cannot be sold, transported, delivered or disposed of like a
movable property. However, as the definition is worded, it cannot be said of necessity that any end
product which results after adapting any raw-material, article or substance "with a view to its use" must
necessarily result into a movable final product or a commodity. For the definition of manufacturing
process' under S. 2(k), end product may be goods or otherwise. It is not necessary that the end product
must be marketable. Even accepting that the final product, namely construction of railway line embedded
in earth is not the subject-matter of sale, transfer, delivery or disposal, still the raw-materials which are
adapted for their use with a view to constructing railway line which is the final product could be said to
have fallen within the sweep of the definition of the term manufacturing process as found in S. 2(k) of the
Factories Act.
Conclusion:

 State of Gujrat v. Jethalal Chelabhai Patel, AIR 1964 SC 779

Facts:
While greasing the spur gear wheel of an oil mill, one of the hands of a workman got caught and had to be
amputated. It appeared that at the time of the accident the cover of the spur gear wheel was not there. The
respondent, who is the manager of the mill was prosecuted under s. 92 of the Factories Act for having
failed to comply with s. 21(1)(iv)(c) of the Act. The workman said that the cover had been removed by
the respondent for repairs, while the case of the respondent was that the workman had himself removed it.
The trial Judge was unable to accept either version and he acquitted the respondent observing that he
could not be held liable if the cover was removed by someone, without his consent or knowledge. On
appeal, the High Court affirmed the acquittal.
Issue:
The main issue is whether the respondent, as the manager of the oil mill, can be held liable under Section
21(1)(iv)(c) for failing to comply with the obligation to securely fence the dangerous machine,
particularly when the cover of the spur gear wheel was not in place at the time of the accident.
Rule:
Section 21 of the Act – Fencing of machinery
Analysis:
The trial judge, while acquitting the respondent, emphasized the lack of evidence to determine who
removed the cover and stated that the respondent could not be held liable if the cover was removed
without his consent or knowledge. The High Court introduced two principles based on foreseeability and
the workman's unreasonable act –
(1) Though the obligation to safeguard is absolute under Section 21(1)(iv)(c) of the Indian Act, yet it is
qualified by the test of foreseeability, and
(2) If the safeguard provided by the employer or manager is rendered nugatory by an unreasonable or
perverted act on the part of the workman, there is no liability of the employer or manager.
But the Supreme Court found them irrelevant to the case. The Supreme Court held that the absence of the
guard during machine operation was a clear default, and the obligation to keep it in position rested on the
respondent. The Court thought that the words “shall be securely fenced” suggest that the fencing
should always be there. The statute has however put the matter beyond doubt by expressly stating that
the fencing shall be kept in position while the machine is working. That is the default that has happened
in this case; the fencing was not there when the machine had been made to work and it was an admitted
fact.
Conclusion:
The Supreme Court concluded that the mere fact that someone else removed the safeguard without the
knowledge, consent, or connivance of the occupier or manager does not automatically provide a defense.
The court emphasized that when the statute mandates keeping the guard in position during machine
operation, and it is proven that the manager failed to do so, it is the manager's duty to establish why he
should not be held liable. The Court rejected the notion that providing the necessary guard, but it being
removed at a specific moment, should absolve the manager of liability.

 Parimal Chandra Raha v. Life Insurance Corporation of India, AIR 1995 SC 1666
Facts:
A two-judge bench of the Supreme Court deliberated on whether canteen workers should be considered as
employees of the establishment. The court outlined specific conditions under which canteen workers
would be deemed employees of the management. The case involved an interpretation of the Factories Act
and its provisions related to the obligation of employers to provide and maintain canteen facilities for
employees.
Issue: The main issue was whether canteen workers could be classified as employees of the
establishment, considering the statutory obligations of the employer to provide and maintain a canteen as
per the Factories Act. The court aimed to establish conditions under which canteen workers would be
considered employees of the management.
Issue:
Whether the appellants are or should be deemed to be the regular employees of the respondent-
Corporation, and if the answer is in the affirmative, (ii) what pay-scales and other service conditions
should be made available to them.
Rule: The court established conditions under which canteen workers would be deemed employees of the
management.
Analysis:
The facts on record show in unmistakable terms that canteen services have been provided to the
employees of the Corporation for a long time and it is the Corporation which has been, from time to time,
taking steps to provide the said services. The canteen committees, the co-operative society of the
employees and the contractors have only been acting for and on behalf of the Corporation as its agencies
to provide the said services. The Corporation has been taking active interest even in organizing the
canteen committees.
Further, it is the Corporation which has been appointing the contractors to run the canteens and entering
into agreements with them for the purpose. The terms of the contract show that they are in the nature of
directions to the contractor about the manner in which the canteen should be run and the canteen services
should be rendered to the employees. Both the appointment of the contractor and the tenure of the
contract are as per the stipulations made by the Corporation in the agreement. Even the prices of the items
served, the place where they should be cooked, the hours during which and the place where they should
be served, are dictated by the Corporation. The Corporation has also reserved the right to modify the
terms of the contract unilaterally and the contractor has no say in the matter. Further, the record shows
that almost all the workers of the canteen like the appellants have been working in the canteen
continuously for a long time whatever the machines employed by the Corporation to supervise and
control the working of the canteen. Although the supervising and managing body of the canteen has
changed hands from time to time, the workers have remained constant. This is apart from the fact that the
infrastructure for running the canteen, viz., the premises, furniture, electricity, water etc. is supplied by
the Corporation to the managing agency for running the canteen.
Further, it cannot be disputed that the canteen service is essential for the efficient working of the
employees and of the offices of the Corporation. In fact, by controlling the hours during which the
counter and floor service will be made available to the employees by the canteen, the Corporation has
also tried to avoid the waste of time which would otherwise be the result if the employees have to go
outside the offices in search of such services. The service is available to all the employees in the premises
of the office itself and continuously since the inception of the Corporation. The employees of the
Corporation have all along been making the complaints about the poor or inadequate service rendered by
the canteen to them, only to the Corporation and the Corporation has been taking steps to remedy the
defects in the canteen service.
Further, whenever there was a temporary breakdown in the canteen service, on account of the agitation or
of strike by the canteen workers, it is the Corporation which has been taking active interest in getting the
dispute resolved and the canteen workers have also looked upon the Corporation as their real employer
and joined it as a party to the industrial dispute raised by them. In the circumstances, the Supreme Court
is of the view that the canteen has become a part of the establishment of the Corporation.
The canteen committees, the co-operative society of the employees and the contractors engaged from time
to time are in reality the agencies of the Corporation and are only a veil between the Corporation and the
canteen workers. Therefore, the Court held that the canteen workers are in fact the employees of the
Corporation.
The next question is as to what relief the appellants are entitled. As the appellants are deemed to have
become the employees of the Corporation, they should, therefore, be entitled to the minimum salary and
the other benefits. Taking into consideration the relevant facts and circumstances on record, the Court
held that they should be deemed to have become the regular employees of the Corporation from the date
of the filing of the writ petition before the High Court and should, therefore, be paid the arrears of salary
and other monetary benefits, if any, from the said date after adjusting the salary and monetary benefits
that they may have received.
The year of continuous service put in by them even prior to the aforesaid date as canteen workers should,
however, be taken into account for the purpose of calculating their retiral benefits.
The court established four conditions under which canteen workers would be deemed employees of the
management:

(i) When the Factories Act makes it obligatory for the employer to provide a canteen,
making it part of the establishment.
(ii) When there is an obligation on the employer to provide a canteen, even if not
statutorily required, making it part of the establishment.
(iii) When the obligation to provide a canteen is implicit, inferred from circumstances, and
becomes part of the service conditions of employees.
(iv) Determining whether a service has become implicitly part of service conditions
depends on various factors, such as nature of service, contribution to efficiency,
availability to all employees, duration of availability, and employer's involvement.

Conclusion:
The court evaluated specific facts, such as the longevity of the canteen, continuous employment,
supervision and control exercised by the appellant, and determined that the canteen in question was a
statutory canteen, making the workmen employees of the management and should receive arrears of
salary and monetary benefits.

 Indian Petrochemicals Corporation Ltd. v. Shramik Sena, AIR 1999 SC 2577

Issue:
Whether the respondent-workmen, employed in the canteen of the appellant's factory, are considered
employees of the management for all purposes or only for the purposes of the Factories Act.
Rule:
Section 46 - empowers the State Government to make rules mandating factories with over 250 workers to
provide and maintain a canteen.
Analysis:
In this case, the management provides canteen facilities as required by law, and the respondent-workmen
are working in these facilities. The court acknowledges the precedent that workmen of a statutory canteen
are employees of the establishment only for the purposes of the Factories Act.
However, the court evaluates specific facts of the instant case:
(a) The canteen has existed since the inception of the factory.
(b) Workmen have been employed for an extended period, even with changes in contractors.
(c) The appellant provides premises, furniture, fixture, fuel, electricity, utensils, etc., for the canteen.
(d) The wages of the canteen workers are reimbursed by the appellant.
(e) The supervision and control on the canteen are exercised by the appellant through its authorized
officer, as can be seen from various clauses of the contract between the appellant and the contractor.
(f) The contractor is considered an agent or manager of the appellant, working under its complete
supervision, control, and directions.
(g) The workmen enjoy the protection of continuous employment in the establishment.

Additional Facts:
(h) The canteen facilities were established since the inception of the factory, indicating a longstanding
practice.
(i) Despite changes in contractors, the workmen have maintained their employment in the canteen,
highlighting a consistent employment relationship.
(j) The appellant not only provides physical facilities but also exercises financial control by reimbursing
the wages of the canteen workers.
(k) The appellant's authorized officer, as per the contract, actively supervises and controls the canteen
operations, establishing a direct link between the management and the canteen.

Conclusion:
Considering the above facts, the Supreme Court held that the canteen in the appellant's establishment is a
statutory canteen. Consequently, the workmen are deemed employees of the management for all
purposes, not limited to the Factories Act. This decision deviates from the previous precedent and is
based on the specific circumstances of continuous employment, control, and provision of facilities by the
appellant.

 H.S. Sharma v. M/s Artificial Limbs Manufacturing Corpn. (2002)

Facts:
The case involves the observation of the Supreme Court regarding the employment status of workers in a
canteen set up pursuant to a statutory obligation under Section 46 of the Factories Act. The question
arises whether the employees in the canteen are to be considered employees of the Government of India
undertaking.
Issue:
The main issue is whether, despite the statutory obligation to set up a canteen, employees in the canteen
are deemed employees of the Government of India undertaking.
Rule:
Section 46
Analysis:
The court emphasizes that the mere existence of a canteen due to a statutory mandate does not
automatically make the canteen workers employees of the establishment. It depends on how the
obligation is discharged, whether by the establishment itself or through delegation to an independent
contractor. The mode of setting up a canteen is not specified in Section 46 of the Factories Act, and the
discretion lies with the establishment.
The court scrutinizes the agreement and finds that the Government of India undertaking agreed to provide
the contractor with basic infrastructure, but the responsibility for running the canteen lies solely with the
contractor. The contractor is obligated to comply with various labor laws, including financial
responsibilities. The government has no say in the contractor's employment decisions, and the discretion
to hire or take action against canteen workers lies with the contractor.
Conclusion:
The court concludes that the canteen workers are employees of the contractor, not the Government of
India undertaking. The absence of control by the establishment over recruitment and employment
decisions, coupled with the contractor's responsibilities for legal liabilities and compliance with labor
laws, establishes the independent employment status of the canteen workers. The court emphasizes that
even if the agreement had a condition for retaining old employees, it wouldn't automatically make them
employees of the establishment. Therefore, the workmen are considered employees of the contractor, and
they cannot claim to be workmen of the Government of India undertaking.

 John Douglas Keith Brown v. State of W.B., AIR 1965 SC 1341

Facts:
The issue presented before the Supreme Court revolves around the liability of the occupier of a factory
under Section 92 of the Factories Act for the violation of provisions outlined in Section 52 of the Act. The
appellant, identified as the Managing Director of Jardine Henderson Ltd., Calcutta, acts as the managing
agent for the Howrah Mills Co. Ltd. situated in Ramkristopur, District Howrah. As managing agents, they
are considered "occupiers" of the Mills as per the definition in Section 2(n) of the Act. J. P. Bell, the
Manager of the Mills in June 1957, is implicated alongside the appellant in an offense under Section 92 of
the Act, read in conjunction with Section 52.

Issue:
The central issue pertains to the determination of whether the occupier of a factory, specifically the
appellant as the Managing Director of Jardine Henderson Ltd., is subject to penalties prescribed in
Section 92 of the Factories Act for the contravention of provisions within Section 52.

Rule:
Section 92 – delineates penalties for breaches of statutory provisions
Section 52 – provision violated
Section 2(n) – definition of ‘occupier’

Application:
The appellant, in the capacity of Managing Director, and J. P. Bell, as the Mills Manager, are charged
with an offense under Section 92 of the Act in conjunction with Section 52. The critical analysis involves
the determination of whether the actions of the appellant, acting as the occupier through Jardine
Henderson Ltd., render them liable for penalties under Section 92.

Conclusion:
The court's decision will rest on the interpretation of the applicability of Section 92 penalties to the
appellant, considering their role as the occupier of the factory, as defined in Section 2(n), and the specific
contraventions alleged in Section 52. The resolution of this case will establish precedent regarding the
liability of occupiers, particularly those in managerial positions, for violations of statutory provisions
under the Factories Act.

 In Clothing Factory, National Workers v. Union of India (1990)

Facts: There were certain piece-rate workers of a clothing factory, who worked for 8 hours during a given
week, except on Saturday where they worked for 4 and 3⁄4 hours. In total, they worked for 44 and 3⁄4
working hours in total in every given week. At times, they were sometimes made to work for more than
44 and 3⁄4 hours in total in a week, but never for more than 48 hours in a week. They claimed overtime
wages for the extra hours in a week they had worked for.
Issue: Will the provisions of Section 59 be applicable to this case?
Analysis: The court held that Section 59 strictly applies to cases of overtime work beyond 9 hours a day
or 48 hours a week only; the grant of overtime wages for the period in excess of normal 44 and 3⁄4
working hours in total in a week, and up to 48 hours a week, is either governed by the terms of the
contract of appointment or the relevant Departmental Rules.
Conclusion:
Section 59 would have no applicability, therefore, to the present case.

 S. M. Datta v. State of Gujarat (2001)

Facts:
The Vice-Chairman of a factory, acting as the occupier, faced criminal proceedings under Section 63 of
the Factories Act for alleged violations. The essence of the charges revolved around the maintenance of
the register of adult workers, particularly Form No. 14, as mandated by Section 62.
Issue:
Whether criminal proceedings under Section 63 could be quashed at an initial stage, considering the
alleged non-compliance with the statutory requirements regarding the maintenance of the register of adult
workers.
Rule:
Section 62 of the Factories Act mandates the maintenance of a register of adult workers, and the specific
form and manner of maintenance are authorized by Sub-section 2 of Section 62. The Gujarat Factories
Rules, 1963, provide further details, and Rule 87 prescribes the notice of the period of work for adult
workers in Form No.14.
Analysis:
The Vice-Chairman was charged under Section 63, alleging non-compliance with the maintenance of the
register of adult workers. The court scrutinized the relevant statutory provisions, including Form No.14,
and the allegations of non-compliance.
Conclusion:
The court found that compliance with Form No.28, a part of the register maintenance process, was not in
dispute. However, issues regarding Form No.14 and the requirement to make entries "beforehand" needed
further scrutiny. The court emphasized that criminal complaints should not be summarily quashed at the
initial stages. The statutory intent, especially in Section 61, indicated a requirement for entries to be made
beforehand, and compliance with such provisions needed careful examination. Quashing complaints at
the initial stage would undermine the purpose of beneficial legislation designed for the welfare of
workers. The court asserted that further scrutiny of facts was necessary before determining the validity of
the criminal proceedings.

Weeks 9-10: Employees’ Compensation Act, 1923

 Kerala State Electricity Board v. Valsala K., AIR 1999 SC 3502

Issue:
Whether the amendment to Section 4 and 4-A, enhancing compensation and interest rates, would be
retroactively applicable to cases where the accident occurred before the amendment's enactment.
Analysis:
The court applied the principle that the relevant date for determining the applicability of amendments
affecting compensation is the date of the accident. It considered the implications of the amendment to
Section 4 and 4-A and whether it could be retrospectively applied to accidents occurring prior to the
amendment. The court, relying on its previous judgment in Pratap Narain Singh, held that the amendment,
which increased the compensation payable, would not be applicable to accidents that took place before its
enactment. The court overruled the earlier judgment in Neelakandan and established that the benefit of
such an amendment does not extend to accidents occurring before its effective date.

 Roshan Deen v. Preeti Lal, AIR 2002 SC 33 (Contracting out)

Issue:
Whether the Commissioner, under Section 28 of the Act, had the power to recall the compromise order
due to fraudulent execution by the employer?
Rules:
 Workmen’s Compensation Act, 1923:
 Section 4(b): Specifies compensation for permanent total disablement.
 Section 17: Nullifies any agreement relinquishing a worker’s compensation rights.
 Section 28: Requires the registration of agreements; allows rejection for fraud.
 Section 29: Imposes liability if the memorandum of agreement is not sent.
Analysis:
The Supreme Court assessed the legality of the Commissioner's order based on Sections 4, 17, 28, and 29
of the Act. It emphasized the entitlement of Roshan Deen to compensation as per Section 4(b) due to total
disablement. Section 17 prohibits agreements waiving compensation rights. Section 28 mandates
agreement registration, with the power to reject for fraud. Section 29 imposes liability for non-
compliance.
The Commissioner's order was declared fraudulent, as the compromise was based on deception. The High
Court's reinstatement was deemed erroneous, overlooking the fraud. The court emphasized the
Commissioner's power to recall orders obtained through fraud, citing precedent.
Conclusion:
The Supreme Court nullified the fraudulent order and directed the Commissioner to expedite proceedings.
It instructed an inquiry into the advocate's alleged fraud. The judgment highlighted the High Court's duty
to correct unjust orders and upheld the Commissioner's authority to recall orders tainted by fraud. The
case emphasizes the need for justice over legal formalities.
Comparative Provision on The Code on Social Security, 2020:
Section 89 mirrors Section 28 of the Workmen’s Compensation Act, emphasizing agreement registration
and the power to reject for fraud. The Code strengthens workers' rights and maintains provisions against
fraud, aligning with the principles established in the analyzed case.

WEEK 13

Municipal Corporation of Delhi v. Female Workers (Muster Roll) and another

FACTS:
 The female employees of the Municipal Corporation of Delhi who were on the muster rolls and
not regular employees were denied maternity leave by the MCD.
 The Delhi Municipal Workers Union supported their cause and consequently their case was
referred by the Secretary (labour), Delhi Administration, to the industrial tribunal. The union
made the claim that that the Municipal Corporation of Delhi employed the female workers for
several years, and they performed the same duties as regular employees yet were denied
maternity benefits, highlighting the dismissive attitude of the corporation.
 The MCD filed a written statement opposing these claims and stating the Maternity Benefits Act
would fail to apply to the female workers on muster rolls as they received daily wages.

 The tribunal upon consideration allowed the claim of the female workers and directed MCD to
provide the female workers on muster rolls with maternity benefits in consonance with the Act.
Consequently, the MCD challenged this decision in the Delhi HC, which was dismissed. The
MCD appealed to the Supreme Court.

ISSUE: Whether the female workers on muster rolls can make a claim for maternity benefits under the
Maternity Benefits Act, 1961?
RULE: S. 3 & S. 5 of Maternity Benefit Act, 1961, Article 11 of the Convention on the Elimination of all
Forms of Discrimination against Women.

Analysis:

 Upon an analysis of the facts of the case, the division bench dismissed the petition, holding that
the principals of CEDAW enshrined in Article 11 must be read alongside the contract of service
between the MCD and its female workers on muster rolls.
 Consequently, the female workers would become entitled to maternity benefits under the Act
through Articles 38 to 42 of the constitution, hence the female workers would be entitled to 6
weeks leave.
 We can clearly see an attempt made by the court to remedy the lacuna left under the Maternity
Benefit Act by extending maternity benefit privileges to muster roll workers. Conclusion: To
conclude, the division bench of the Supreme Court demonstrates the fortitude required to
substantively deliver maternity benefits enshrined within the constitution to a class of women
unreasonably distinguished from regular employees.

Conclusion: To conclude, the division bench of the Supreme Court demonstrates the fortitude required to
substantively deliver maternity benefits enshrined within the constitution to a class of women
unreasonably distinguished from regular employees.

B Shah v Presiding Office, Labour Court, Coimbatore & Others

FACTS:

 In the present case, Subbammal (“Respondent 2”) was employed as a woman worker in Mount
Stuart Estate (“Establishment”), which carried on business in the plantation industry.
 In October 1967, the Establishment approved her leave of absence based on the notice submitted,
apprising the concerned officials of her expected delivery date.
 The employers acted in furtherance of the maternity benefit conferred on Respondent 2 post her
delivery and accordingly, paid an amount of money equivalent to her average daily wage for 72
working days failing within 12 weeks of the maternity period.
 However, the Established admittedly excluded 12 Sundays falling within the period of her actual
absence immediately preceding delivery and 6 weeks immediately following date of delivery,
including the day of her delivery.
 Aggrieved by the employer’s calculation of the aforesaid maternity benefit amount, Respondent 2
claimed maternity benefit for the entire period of 12 weeks, which consists of 84 days on the
ground that a week consists of 7 days including Sundays.
 The Establishment did not bother considering the representation made by Respondent 2 and stuck
with their decision.
 Seeking redressal for her grievance, Respondent 2 thereafter approached the Labour Court,
Coimbatore under Section 33-C (2) of the Industrial Disputes Act, 1947. The Labour Court
rejected the Establishment’s argument that a pregnant woman worker is entitled to maternity
benefit only for normal working days in 12 weeks, as wages are not payable for Sunday, a non-
working wage-less holiday.
 Against the order or the Labour Court, the Establishment moved the High Court at Madras, which
allowed the petition stating that the period of 12 weeks under Section 5(3) means 12 weeks of
work and the computation of this benefit must only consider the specific days on which she would
have worked ‘but for her inability.’
  Aggrieved by this decision, Respondent 2 filed an appeal under Clause 15 of the Letters Patent.
The Letters Patent Bench allowed her plea.
 The instant appeal by special leave is directed against the aforesaid judgment of the Letters patent
Bench.

RULE: S. 3(n) & S. 5(1) of the Maternity Benefit Act, 1961.

ISSUE:

a) Whether the computation of the maternity benefit prescribed under Section 5 of the Act for the
pre-natal and post-natal period takes into consideration a “week” signifying a cycle of 7 days
including wage-less holidays or the intermittent period of 6 (six) working days only?
b) Whether the wages payable to the woman was for “time work” or for “piece work”?

ANALYSIS:

 As per section 5 of the Act, a woman worker expecting a child is entitled to claim maternity
benefit for a maximum period of 12 weeks which is divided into a pre-natal and post-natal phase.
It is pertinent to note that the pre-natal phase is limited to the duration of woman’s actual absence
extending up to 6 (weeks immediately preceding and including the day of her delivery. On the
other hand, post-natal compulsory period consists of 6 weeks immediately following the day of
her delivery.
 The explanation under Section 5(1) clearly provides that the conferred maternity benefit is
calculated based on the woman’s average daily wage. The computation of “average daily wage”
takes into consideration the average of the woman’s wages payable to her for the days on which
she has worked during the period of 3 calendar months immediately preceding the date from
which she absents herself on account of maternity, or one rupee a day, whichever is higher. Thus,
the employer must arrive at the average daily wage by dividing the total wages are by the number
of days within the 3 calendar months.
 The court clarified that the term “wages” is not restricted to contractual wages, rather it has a
composite meaning under Section 3(n) of the Act, which includes all remunerations in the nature
of cash allowances, incentive bonus, and monetary value of concessional supply of food grains
and other articles.
 Since the Act does not provide for any definition of the term “week”, the court relied on the
ordinary dictionary and popular meaning of the term to conclude that a week signifies a cycle of 7
days, including Sundays. After scrutinizing the language employed under Section 5, the court
opined that the legislative intent underlining the computation of maternity benefit includes all the
days, which may be wage-less holidays falling within the period of her actual absence.
 The court supplemented this analysis by stating that the legislature would have used the term
“working days falling within the period of her actual absence” under Section 5(1) if its intention
was to restrict the computation of maternity benefit to the intermittent periods of 6 days excluding
Sundays within that period. It was similarly emphasized that the term “period” under Section 5(1)
refers to the continuous running of time and recurrence of the cycle of 7 days.

CONCLUSION: Computation of maternity benefit must include all days of a week including
Sundays and rest days, which may be wage-less holidays comprised in the actual period of absence of
the woman extending up to 6 weeks preceding and including the day of her delivery and all days
failing within the 6 weeks immediately following the day of her delivery. This ensures that woman
workers receive an amount equivalent to 100% of the wages she previously earned as per Section 3(n)
 including the benefit of wages for all the Sundays and rest days failing within the aforesaid two
periods.

Ansu Rani v. State of Uttar Pradesh

FACTS

 The petitioner in the present case, Mrs. Anshu Rani was appointed as an instructor at
Madhyamik Vidyalaya, Uttar Pradesh on 20.07.2013. She was married to Sunil Kumar on
18.02.2018 and got pregnant and in this regard her doctor advised her to take complete bed
rest.
 Therefore, she submitted an application dated 26.09.18 before the Block Education Officer as
well as the District Basic Education Officer, Bijnor to grant her maternity leave from
1.10.2018 to 31.3.2019- For 180 days (6 months).
 Thus, the request made by the Petitioner for grant of maternity leave for 180 days was
completely ignored and instead the Education Officer granted her a leave for 90 days, without
specifying any reason for doing so.
 The petitioner submitted a representation addressed to the District Basic Education officer on
21.12.2018, regarding the grant of maternity leave for a period of only 90 days.
Unfortunately, no order was passed in that regard by the Respondent.
 Therefore, the Petitioner was compelled to file a writ petition in the Allahabad High Court,
with the prayer to issue Mandamus directing the Respondents to grant the Petitioner a
maternity leave with honorarium from 30.12.2018 to 31.3.2019 and further issue a mandamus
directing the Respondents to decide the application submitted by the Petitioner on
21.12.2018.

ISSUE:

 What is the compulsory duration for maternity benefit?

 Whether the Respondent was justified in granting only 90 Days of maternity leave to the
Petitioner instead of 180 days?

RULE: S. 5(3) of the Maternity Benefit Act

ANALYSIS:

 The Court referred to several cases.

 Dr. Shikha Jain v. State of U.P. Through Prin. Secy. Higher Edu. Lko. Service Bench- The
Lucknow bench held that the purpose of the maternity leave does not change with the nature of
employment. It is concerned with human rights of the women.
 Dr. Rachna Chaurasiya v. State of U.P. passed in Civil Misc.- The Division Bench of the
Allahabad High Court directed the State Government to (i) grant maternity leave to all female
with full pay of 180 days, irrespective of nature of employment, i.e., permanent, temporary/ad
hoc or contractual basis. (ii) State-respondent was further directed to grant Child Care Leave of
730 days to all female employees, who are appointed on regular basis, contractual basis, ad hoc or
temporary basis having minor children with the rider that the child should not be more than 18
years of age or older.
 Mini K.T. v. Senior Divisional Manager (Disciplinary Authority), Life Insurance Corporation of
India, Divisional Office - The court held that motherhood is not an excuse in employment, but
 motherhood is a right which demands protection in given circumstances. What employer has to
consider is whether her duty attached to mother prevented her from attending employment or not.

CONCLUSION:

 The Writ Petition was allowed. In accordance with the facts and circumstances of the case, a
mandamus was issued directing the respondent No. 2, the District Basic Education Officer, Bijnor
to provide the petitioner maternity leave with honorarium with effect from 30.12.2018 to
31.3.2019.
 The court held that in view of the facts the petitioner was entitled for maternity leave for period
of six months but wholly illegally leave was granted only for a period of three months.

Union of India v. Asiya Begum

FACTS: Asiya Begum was a Sub-Inspector in the Central Industrial Security Force (CISF), and her
employment was governed by the Central Civil Services (Leave) Rules of 1972 (hereby referred to as
‘Leave Rules’), which stipulated that maternity benefits were applicable for up to two surviving children.
Through her first delivery, Asiya Begum gave birth to twins and subsequently availed her entitlement of
up to 180 days of maternity leave. The pivotal question emerged during her second delivery – whether
maternity benefits could still be availed, given that this childbirth would result in a third child from the
second delivery.

ISSUE: Whether a woman who has already delivered twins during her first childbirth qualifies for
maternity benefits for her second delivery under the Leave Rules?

RULE: The interpretation of Rule 43 of the Leave Rules, which offers maternity benefits to female
government employees with less than two children is integral to resolving this issue.

In this case it is important to remember that the difference in the applicability between the Maternity
Benefit Act, 1961, and the Leave Rules, stems from the specific jurisdiction of these legal provisions. The
Maternity Benefit Act is designed to encompass female employees across of every establishment being a
factory or mine or plantation. In contrast, the Leave Rules specifically regulate the entitlements of
government servants holding positions linked to Union affairs, with certain exceptions outlined within the
same rule.

ANALYSIS:

In this case, the Madras High Court rendered a ruling in favour of the Union of India, effectively
overturning a prior judgment by Single Judge, who considered the intention of the law to be such that it
would be interpreted in a manner that the birth of twins does not count as two deliveries. The essence of
the division bench decision lies in its unwavering commitment to the numerical precision explicitly
outlined in Rule 43 of the Leave Rules. This rule leaves no room for ambiguity as it explicitly specifies
that maternity benefits apply to female government employees with fewer than two children.

CONCLUSION:
Yet, despite this rigid stance in their ratio, the court acknowledged that this interpretation might have
financial consequences for the petitioner but stressed that the rules clearly state benefits are only available
if the claimant has two or fewer children, and then went on to note the possibility of exceptions in special
cases and the authority's power to relax the rules in such situations.

Hema Vijay Menon v. State of Maharashtra

FACTS:

 Petitioner is a qualified lecturer.

 After losing her only son, her husband and her decide to become parents through surrogacy.
 Subsequently, an embryo was successfully implanted in the womb of a surrogate mother to
further the objective. The surrogate mother gave birth to a boy, and the petitioner and her husband
were given custody of the infant right away.
 The petitioner then applied for maternity/ childcare leave to the Principal College, claiming that
the rules of the Maharashtra Civil Services (Leave) Rules, 1981 provided her the right to such
leave.
 The Joint Director of Higher Education in Nagpur, however, stated that there is no provision for
maternity leave to be given to a mother who has a child through surrogacy.

ISSUE: Whether a mother is entitled to avail maternity leave if she begets the child through surrogacy?

RULE: Rule 74, The Maharashtra Civil Services (Leave) Rules, 1961.

ANALYSIS:

 Maternity refers to the period during pregnancy and after childbirth. If maternity is defined as
motherhood, it would not be appropriate to differentiate between a natural and biological mother,
and a mother who has conceived a baby through surrogacy or who has adopted a child.

CONCLUSION: In view of the aforesaid reasoning, the court concluded that a mother with a child born
through surrogacy, an adopted child or with a child born naturally are all equally, mutatis mutandis,
entitled to maternity benefits including maternity leave.

Pooja Jignesh Doshi v. State of Maharashtra

FACTS: The petitioner, in the present case was unable to bear a second child due to certain issues,
consequently she had decided to opt for surrogacy with her husband’s consent. After complying with
various requirements to proceed with surrogacy, they have been blessed with a baby who was born
through a surrogate mother. Prior to the birth of the baby the petitioner sought for a maternity leave to
take care of the child after birth, however, the same had been denied on the ground that the relevant rules
did not allow for a maternity leave for a mother with a surrogate child.

ISSUE: Whether a mother with a surrogate child is entitled to maternity leave?

RULE: Section 5, The Maternity Benefits Act, 1961.

ANALYSIS: The court referred to the case of Hema Vijay Menon v. State of Maharashtra and stated that
maternity leave is meant to uphold the value of motherhood in addition to serving as a protection for the
mother's and child's wellbeing, and the relationship between both.

CONCLUSION: Therefore, in view of the reasoning mentioned above the court stated that a mother with
a child born through surrogacy is equally, mutatis mutandis, entitled to avail maternity benefits including
maternity leave.

Mini K. T. v. LIC

FACTS:

 K. T. Mini was an assistant at LIC. In 2001, she gave birth to her second child, and after two
years she was diagnosed to mild autism. To get her child better treatment she took her to Chennai
in 2007. She applied got a transfer to Chennai on 20.06.2007 and also applied for extra leave
29.06.2007 and was granted such leave, without allowance.
 Meanwhile, her husband got a job in Bahrain. Therefore, during the period of her leave, she
requested to cancel her transfer and also requested for an NOC to go abroad. The NOC was
issued.
 She then requested for a 60 day extension on her leave, to join her husband abroad, which was
denied. She was asked to report back to work. All her requests were denied and her overstay
without any sanction of the leave was found to be in violation of LIC (Staff) Regulations, 1960,
and after enquiry, she was removed.

ISSUE: Can a State or its instrumentality as an employer, discriminate a woman employee based on
compelling family care giving responsibility?

ANALYSIS:

 First, the Court looked at International Human Rights Law, given the lack of protective
legislation for working women facing family responsibility. Examining various human rights
treaties, the Court comes to a conclusion that IHRL demands that the dignity of the individual be
protected. The Court, proceeds to reframe the question as to whether motherhood is an integral
part of a woman’s dignity.
 The Court highlights the cultural significance of motherhood in India sighting versus from the
Vedic period and sacred texts of Islam and Christianity. They stress on the importance of
interpretation in the context of socially, culturally and economically evolving society.
Furthermore, it emphasizes that the State is obligated to honour moral values within society that
align with constitutional provisions, since these values are self-sustaining, nurtured by cultural
practices, and integral to the Indian identity. The Hon’ble Court, thus, taking into consideration
the societal background, concludes that motherhood is an integral aspect of a woman's dignity.
 Considering this analysis, the Hon'ble Court, proceeds to examine the matter through the lens of
Articles 14, 15, 16, and 21 of the Constitution. It is noted that motherhood comprises elements of
status, dignity, and self-respect. The Hon’ble Court affirms that the right to procreation is an
inherent facet of the right to life.
  The Hon’ble Court further moves to right to obtain leave, which in usual circumstances is
subjected to service regulations. It has to be ascertained whether the compelling circumstance was
correlated with absence and that the female employee had no other viable option. However, since
there is no legislation on this matter, the Hon’ble Court can only go into this question by granting
protection under negative conception of liberty, i.e., the State must accord protection by
addressing unwarranted interference.
 Now, for the first charge of remaining absent, the Hon’ble Court noted that the petitioner never
wanted to absent herself from employment but rather, has requested the employer for a transfer so
that she can have better facilities for taking care of the child. This was in terms with the duration
prescribed in Regulation 65, but the employer failed to recognize the petitioner’s fundamental
right. This insensitiveness wasn’t taken into consideration, and it compelled the petitioner to
remain unauthorisedly absent. Similarly, Regulation 31 states that no employee can remain
unauthorizedly absent, however the employer issued a no objection certificate and thus, itself has
no intention of taking this charge forward. This charge, therefore, is legally unsustainable.

CONCLUSION: The petitioner was reinstated in service and provided with all service benefits, except for
back wages since she applied for extraordinary leave without allowance. The Hon’ble Court parted with
the case by reminding State of its obligations in this regard and prescribing a legislation protecting
employees against family responsibility discrimination.

Neera Mathur v. LIC

FACTS:

 The Petitioner (Ms. Neera Mathur), applied for the post of Assistant in the Respondent
Corporation. As part of her recruitment procedure, she was called for giving a written test and an
interview, both of which were successfully passed by her. Further, the Petitioner was asked to file
a declaration form which was submitted by the Petitioner to the Respondent, on 25th May 1989.
On the same day, the Petitioner was also examined by a lady doctor, who was on the panel of the
corporation. The doctor found the Petitioner to be medically fit for the job.
 The Petitioner soon went through a short-term training programme, post which the Petitioner was
provided with a letter of appointment on 25th September 1989. The Petitioner was put on
probation for six months. She was entitled to be confirmed in the service, provided that a
satisfactory work report was generated during the probation period.
 The Petitioner applied for a maternity leave on 27th December 1989, and took a leave from 9th
December 1989 to 8th March 1990. She had also submitted a medical certificate dated 6th
January 1990, for the same. On 11th January 1990, the Petitioner delivered a full-term baby in
and she was discharged from the hospital on 19th January 1990.
 On 13th February 1990, the Petitioner was discharged from her service in the corporation, during
her probation period. The discharge notice did not provide any ground and looked like a
discharge simpliciter (situation when the employer exercises his right under the employment
contract in good faith and terminates the services of the employee).

ISSUE: Whether the Respondent’s order of termination was discharge simpliciter, and whether the
termination of employment during the probation period and during the subsistence of the maternity leave
period, is valid?

RULE: The Life Insurance Corporation Service Rules were the main point of contention in this case,
considering that the recruitment procedure followed by the Petitioner was under the mentioned Rules.
The Respondent had made references to the terms of declaration as filled by the Petitioner on 25th May
1989, which were as follows:

“6. To be filled in by female candidates only in the presence of the Medical examiner:

a) Are you married- Yes.

b) If so, please state :

i) Your Husband's Name in full & occupation: Mr. PRADEEP MATHUR, Law Officer, Central
Pollution Control Board, Nehru Place, New Delhi.

ii) State the number of children, if any, and their present ages: One daughter: 1 year and 6
months.

iii) Have the menstrual periods always been regular and painless, and are they so now? ...Yes.

iv) How many conceptions have taken place? How many have gone full-term? One.

v) State the date of last menstruation: ...29th April, 1989.

vi) Are you pregnant now? ...No.

vii) State the date of last delivery: 14th November, 1987.

viii) Have you had any abortion or miscarriage? ...No.”

Additionally, the Respondent argued under Instruction 16 issued by the Corporation as to the Medical
Examination for recruitment of Class III and Class IV employees, which read as under:

“16. MEDICAL EXAMINATION:

No person shall be appointed to the services of the Corporation unless he/she has been certified to be of
sound Constitution and medically fit for discharging his/her duties. The certificates in the form given in
Annexure IX should be from a doctor, duly authorized for the purpose by the Appointing Authority. If at
the time of medical examination, any lady applicant is found to be pregnant, her appointment to the
Corporation shall be considered three months after the delivery. This would be subject to a further
medical examination at the candidate's cost and subject to the ranking list continuing to be valid.”

ANALYSIS:

 The Petitioner moved the High Court under Article 226 of the Constitution of India, to challenge
the order of the corporation on the ground that it was not a discharge simpliciter, but rather based
on some discrepancy made by her before joining the service. On the counter, the Respondent
highlighted that the work of the Petitioner was not satisfactory, due to which she was discharged
from her service without notice, as per her terms of appointment. The High Court in this case,
refused to interfere with the termination of the Petitioner, and supported the contentions of the
Respondent.
  The Petitioner appealed to the Supreme Court of India. After preliminary hearing, the court
issued notice for final disposal, along with making an order as follows:

“The facts of the case compel us to issue an interim mandamus directing the respondents to put
the petitioner back to service and we accordingly issue a direction to the respondent to reinstate
the petitioner within 15 days from the date of receipt of this order.”

 When the preliminary order reached the corporation, they filed a counter affidavit seeking the
opportunity to justify the termination of Petitioner’s services. The justification was provided on
the following 2 grounds: (i) That the Petitioner had deliberately withheld to mention that she was
in the family way at the time of filling up the declaration form before medical examination for
fitness. The same had been revealed only when she informed the corporation that she had given
birth to a daughter. (ii) Her work during the probation period was not satisfactory. Therefore, it
was an order of discharge simpliciter.
 The hospital where the Petitioner was admitted for delivery certified that the Petitioner had her
Last Menstrual Cycle (LMP) on 3rd April 1989, which had been produced as Annexure in the
counter affidavit. Therefore, it was argued by the Respondent corporation that the Petitioner had
deliberately given the wrong date of menstruation in her declaration, and that the correct date was
provided to the doctor. It was highlighted that if the Petitioner had provided the correct date of
her menstruation in her declaration, her appointment would have been deferred as per rules.
 The Supreme Court, while deciding the matter, took into account the fact that there was nothing
on record to show that the Petitioner’s work during her probation period was not satisfactory.
Rather, the reason for the Petitioner’s termination of employment was the declaration given by
her at the stage of entering into service, considering that she had given a false declaration
regarding her last menstruation period with a view to suppress her pregnancy. The court
highlighted that the Petitioner cannot be blamed in such a case, considering that she had been
medically examined by the Doctor, who was in the panel approved by the Corporation.

CONCLUSION: The Court stated that the particulars under columns (iii) to (viii) are embarrassing and
humiliating, and that the modesty and self-respect of the candidate can perhaps preclude them from
disclosing such personal information.

Therefore, the Respondent corporation was asked to delete the mentioned columns from the declaration.
If the purpose of the declaration was to deny maternity leave and benefits to a lady candidate, who might
be pregnant at the time of entering into service, then it is possible for the corporation to subject the lady
candidate to a medical examination, inclusive of a pregnancy test.

Therefore, the interim/preliminary order made was made absolute. However, the Petitioner was not
allowed to receive any entitled salary from her date of discharge, till the date of her reinstatement.

WEEK 9-10
General manager, B.E.S.T. undertaking, Bombay v. Mrs Agnes

FACTS:

 The Bombay Municipal Corporation, runs a public utility transport service in Greater Bombay
and the said transport service is managed by a Committee known as the Bombay Electricity
Supply and Transport Committee. The said Committee conducts the transport service in the name
 of Bombay Electric Supply and Transport Undertaking. The Undertaking owns a number of
buses, and the Corporation employs a staff, including bus drivers, for conducting the said service.
Undertaking permits a specified number of the traffic outdoor staff in uniform to travel standing
in a bus without payment of fares.
 Nanu Raman was a driver employed by the corporation. On July 20, 1957, Nanu Raman finished
his work for the day at about 7.45 p.m. at his designated bus depot. After leaving the bus in the
depot, he boarded another bus to go to his residence. The said bus collided with a stationary lorry
parked at an awkward angle. As a result of the collision, P. Nanu Raman got thrown out of the
bus and died due to injuries he sustained.
 His widowed wife (the respondent to the case) filed an application in the Court of the
Commissioner for Workmen's Compensation, Bombay, claiming a sum of Rs 3500 as
compensation by reason of the death of her husband in an accident alleged to have arisen “out of
and in the course of his employment”. To that application the General Manager of the B.E.S.T.
Undertaking, Bombay, was made the respondent and he contended that the accident did not arise
“out of and in the course of the employment” of the deceased.
 The Commissioner dismissed the application accepting the contention of the General Manager of
the B.E.S.T. Undertaking. On appeal, the High Court of Bombay held that the said accident arose
“out of and in the course of the employment” of the said deceased and, on that finding, passed a
decree, in favour of the widow for a sum of Rs 3500 with costs. The General Manager of the
B.E.S.T. Undertaking preferred the present appeal against the order of the High Court.

ISSUE: Can Nanu Raman be considered to have sustained fatal injuries on his way home in the course of
his employment?

RULE: S. 3(1) of the Employees’ Compensation Act

ANALYSIS:

 The primary point of consideration for the court was that till what point can a workman be
regarded to remain in the course of employment after he has left the physical premise of the
employer. To answer this question, the court opined that for an injury sustained in occupational
transit to be regarded as an injury sustained in an accident arising out of and in the course of his
employment, there must be a duty on the part of the employee to utilize the means of commute
made available to him by the employer. This means that for the injury to meet the threshold, the
employee must be utilizing the means of transit provided by the employer as an obligation under
the terms of employment at the time he sustained it.
 Further, the “duty” to commute to work using the means and, in the manner, specified by the
contract may be “implied”. Thus, an employee need not necessarily be under an express and strict
obligation to only use the means of commute provided by the employee. A mere right to use the
said means in the stipulated manner would be sufficient to regard an employee as being “obliged”
to use the means of commute provided by the employee. This principle becomes especially
relevant if the employee does not have a good commute alternative to the employer’s facility,
which happened to be the case in the matter before the court.
 In the present case, it was apparent from Rule 19 of the Standing Rules of the Bombay
Municipality B.E.S.T. Undertaking that the employer (B.E.S.T) did provide the employees (bus
drivers) a commute facility that the employees could utilize in the manner specified in the Rule.
Furthermore, the terms governing the reporting time of bus drivers at the bus depot required the
drivers to be very punctual, making it more important for the drivers to use the facility in
question.
  The court also accepted a “but for” test that has the same effect as the ‘implied obligation’ test
but has a different form. As per this test, so long as a workman is in a place in which he would
have no right to be but for the work on which he is employed, he would still be in the course of
his employment. Thus, if a workman is utilizing a commute facility only made available to the
employees of an establishment, he can be in the course of his employment.

CONCLUSION: Since the conduct of the deceased driver, the terms of the employment contract and the
relevant circumstances of the case were in line with the qualifying principles affirmed by the court, the
appeal was dismissed the compensation sought by the respondent was held valid.

Saurashtra Salt Manufacturing Co. v. Bai Valu Raja

FACTS:

 The appellant is the Saurashtra Salt Manufacturing Co., a business that runs a salt mine near
Porbandar, an Indian coastal town in the state of Gujarat. There are both regular and temporary
workers at the company, so the staff is different. One important part of this case is that the salt
works are located near a creek, across from the town of Porbandar. When workers want to get to
the salt works, they can choose between two different ways. On the first way, you'll be travelling
overland, which is a trip of about 6 to 7 miles. For the second, and more direct, path, you must
take a boat across the creek.
 From point A to point B, you have to cross the creek to start this water trip. An area of soft land
at the Porbandar end of the creek is used for this crossing. People who start at point A and want to
cross the creek get off the boat at point B, which is on soft ground. After going through the beach
area from point B, workers can get to the salt works' salt pier and then the salt works itself.
 Several workers died in a terrible accident while crossing a creek to get to work. The case was
based on that accident.

ISSUE: Whether the appellant and the ferrywalas had an agreement for its workers to be ferried to and
from the salt works, and if so, what were the terms of that agreement? Whether the agreement should
apply to all casual workers like the ones in question, whether they were going to or coming back from the
salt works.

RULE: S. 3 (1) of the Employees’ Compensation Act.

ANALYSIS:

 The court starts by validating the principle of notional extension. According to the Rule of
Notional Extension, an employer is required to provide compensation in situations in which an
employee has an accident while working away from the employer's premises; however, the
amount of compensation that must be paid depends on whether or not the employee was
performing duties related to their employment at the time of the accident.
 This is the idea that the employer's property includes the places that workers walk through on
their way to and from work. The court does add an important caution, though: hypothetical
extension has its limits. Beyond a certain point in the trip, the judgement makes it clear that an
employee is no longer "in the course of employment." This distinction is necessary to make sure
that not every incident related to commuting is compensable. This protects companies from
having to pay too much in compensation.
  It needs strong proof that an agreement was made between the company and ferry companies so
that workers can get to and from work. The court's decision is affected by the fact that there isn't
enough solid proof. This shows how important it is to have strong evidence when proving
compensation responsibility under the Workmen's Compensation Act. The decision doesn't
support a one-size-fits-all method. Instead, it shows how important it is to look at each case on its
own, considering the facts and circumstances.

CONCLUSION: The court decided not to find the employer responsible for the accident since there was
no definitive agreement in place between the boat operators and the employer at the time of the incident.
It emphasises the need for a full review of the individual circumstances in each instance and stresses the
need of an evidence-based approach to establishing culpability.

WEEK 14

1) BHEL Workers Association v. Union of India AIR (1985) SC 409 – history of legislation

Facts:

- The petitioners in this case are the BHEL Workers Association in Hardwar and the
Bharat Heavy Electricals Karamchari Sangh in Ranipur, Hardwar, among others. They
assert that within the BHEL factory premises in Hardwar, there are approximately a
thousand workers among a 16,000 odd workers, who are treated as 'contract labour’
within the BHEL Factory premises.
- These workers are under the authority of contractors and are not treated the same way as
those directly employed by BHEL. Despite performing identical tasks as BHEL's regular
employees, they receive lower wages and have different employment conditions.
 - The management pays their salaries to the contractors, who then pay the workers after
deducting a significant commission. The wages these contract workers receive are
significantly lower than what BHEL’s direct employees earn.
- The petitioners claim that these contract workers work within BHEL's premises, in
various departments, under the direct supervision of BHEL's Chargemen, Foremen, and
Engineers. They adhere to BHEL's working hours and operate BHEL's machinery,
essentially being an integral part of BHEL's manufacturing process.
- The petitioners demand recognition as regular employees of BHEL and insist on
receiving the same pay scales as BHEL's permanent workers. They argue that their rights
under Article 141 and Article 19(f) of the Indian Constitution are violated.
- They further contend that whenever they raise their demands, they are unjustly
terminated from their jobs. Their main request from the court is to declare the contract
labour system as unlawful, establish their status as direct employees of BHEL, and grant
them equal wages comparable to those of BHEL's regular workers.

Issue:

To what extent do statutory rights and protections, as well as judicial pronouncements,

adequately address the disparities in rights and benefits between contract labourers and regular
employees, and how do these measures contribute to balancing their bargaining power and
ensuring equitable treatment in the workplace?

In cases involving the employment of contract labour by contractors within Public Sector
Undertakings, where the contract labourers assert that they perform the same tasks as the directly
employed workers but receive lower wages, the question arises whether the court has the
authority to issue a declaration to eliminate the ‘contract labour’ system?

Rule:

Section 10 of The Contract Labour (Regulation and Abolition) Act, 1970 - Prohibition of
Employment of Contract Labour

Application:

- The Contract Labour (Regulation and Abolition) Act, 1970: The Supreme Court
emphasises that while this act does not outright outlaw contract labour, it does allow for
its elimination under certain conditions. It also extends to government agencies and
departments, not just the private sector.
- Equal Treatment: The ruling highlights the need to treat contract labourers equally and
without discrimination. They have the same rights as regular workers who undertake
comparable labour in terms of pay, vacations, working hours, and terms of employment.
 Under industrial and labour regulations, they can pursue remedies for wage disputes and
unfavourable working circumstances.
- Role of Parliament and Government: The judgement makes it clear that, in accordance
with the terms of the Contract Labour Act, Parliament did not abolish contract labour but
rather given the Central Government the authority to choose when and where it is
essential. The court declares that the government should make the decision of whether or
not to outlaw contract labour; this is outside of its purview.
- Dispute Resolution: The judgement mentions that disputes regarding the nature of work,
i.e., whether contract labour does the same work as regular workers, should be resolved
by the Chief Labor Commissioner under specific rules.
- Limitations of the Court: The ruling recognizes that it is not feasible to carry out a
thorough investigation in accordance with Article 32 in this specific instance to ascertain
whether the job performed by the contract labourers is the same as that performed by the
directly employed workers. It implies that alternative forums and procedures set up by
statute exist to deal with such matters.
- Directions to the Government and Commissioner: The Central Government is directed
by the court to investigate whether the Contract Labor Act should forbid the use of
contract labour in particular procedures, activities, or projects involving public
undertakings. Additionally, it instructs the Chief Labor Commissioner to investigate the
differences in the nature of work performed by directly employed employees and contract
labourers.

The ruling essentially emphasises the necessity of treating contract workers equally, the
government's role in determining when to outlaw contract labour, and the appropriate forums for
resolving conflicts involving contract labour in public undertakings. It aims to create a balance
between the needs of public endeavours, government laws, and contract labourers’ interests.

2) Gammon India Ltd. v. Union of India AIR (1974) SC 960 – objective and preamble

Facts:

- The petitioners were contractors engaged in the industry of road and building
construction, among other things.
- In addition to mandating the acquisition of particular licences, the Contract Labour
(Regulation and Abolition) Act, 1970 (The Act) imposes particular obligations and
liabilities on contractors.
- The Petitioners filed the petitions invoking Article 32 of the Constitution in order to
contest the legality and applicability of the Act and the Contract Labour (Regulation and
Abolition) Central Rules and Rules of the States of Rajasthan and Maharashtra.

Issue:
 - Whether the petitioners were contractors?
- The question is whether the implementation of the Act regarding ongoing construction
projects constituted an unjustifiable hindrance to the contractors’ rights as stated in
Article 19(1)(g) and whether the fees specified for registration and licences constituted a
tax levy, thereby exceeding the authority of the Central and State Governments to
establish regulations.
- If Sections 16 and 17 of the Act, along with Central Rules 40 to 56 and Rule 25(2)(vi),
regarding canteens, restrooms, and latrines, could be deemed unconstitutional and
unreasonable due to impracticality and high costs, resulting in unreasonable restrictions
under Article 19(1)(g).
- Whether the provisions outlined in Rule 25(2)(ii) were unreasonable and whether the
absence of an appeal provision against Central Rule 25(2)(v)(b) was justified.
- The constitutionality of the provisions outlined in Section 14 of the Act concerning the
forfeiture of security and Section 34 concerning the authority of the Central Government
to eliminate obstacles to the implementation of the provisions of the Act were
unconstitutional.

Rules:

Section 2 (b), ( c ) , (e), (i)

Section 14

Section 34 - power to remove difficulties

Application:

Issue 1: The Petitioners claimed they were not contractors under the Act for two reasons. First,
they claimed that their labour was not "in connection with the work of the establishment" or the
principal employer's. Second, the petitioners rarely worked in the principal employer's
“establishment”.

The Court rejected the petitioners’ claims on the grounds that construction work done elsewhere
than where the establishment did business would devalue the words “work of any
establishment”. The court stated that the building's construction was "work of the establishment"
because it was its property and that the actual employment or location of business should not be
correlated with “work of the establishment”. As enterprises and industries expand, work sites are
sought for new buildings. The work site of the establishment is where the business would
perform its work after construction, hence the contractor's construction work is also work of the
establishment.

The Court then discusses the act’s aim, which is to abolish contract labour wherever practicable
and regulate it where necessary to prevent exploitation and improve contract labourers'
conditions. According to Section 10, labour at the establishment comprises work incidental or
required to its trade. Before prohibiting contract labour, the government would consider if the
task is recurring and done by regular workers.

While distinguishing and defining terms like “work of an establishment” and “in connection with
the work of an establishment” etc through context and reference to other provisions, the Court
noted that the context and object must be interpreted to make a harmonious meaning of the
statute. Thus, the understanding of contractor, workman, contract labour, and establishment
includes the construction site. The contractor is not required to perform work that is incidental to
the principal employer's obligations; rather, the contractor must perform work that is
advantageous to the principal employer in order to fulfil his duty. Instead of interpreting the
words in isolation, it was found that petitioners were contractors under the Act and that their
contract labour was work of the establishment.

Issue 2: The Court dismissed this argument, noting that the charge of unreasonableness
regarding existing contracts lacked merit due to the fact that the measure in question was
presented in 1967 and subsequently enacted in 1970. The Act in question pertains to contract
labour, rather than the contract itself. Additionally, it is important to note that the Act does not
have retrospective effect, and there is no evidence to suggest that the petitioners would
experience any kind of damage. The petitioners were aware for a reasonable duration,
specifically from 1967 to 1970, of the impending adoption of the Act. Additionally, since the Act
aimed to address the minimum labour welfare concerns of the workers, the Court determined that
there was no element of arbitrariness involved.

With respect to the fees imposed for registration, licensing, or licence renewal, it has been
observed that such fees do not exceed the authority granted by law and do not constitute a form
of taxation. Section 15 of the Act delineates the entitlement to pursue an appeal in the event of
denial, revocation, or suspension of a licence. Furthermore, both the Act and its accompanying
regulations furnish thorough guidance pertaining to the bestowal of licences and the stipulations
governing their terms and conditions. Therefore, there was no excessive delegation of legislative
power.

Issue 3: In this regard, the petitioners exclusively challenged the regulations rather than the Act.
The Court noted that since the measure was intended to benefit the public, the responsibility for
determining suitable and rational working conditions for contract labour rested with the
legislature, not the Court. Given that the legislative branch

operates in accordance with public demands, a logical connection can be established between the
Act and the objective and purpose it aims to accomplish. Consequently, the provision in question
does not exceed its intended purpose, nor does it contravene Article 14, given that the
classification is consistent across all contractors. In reference to the challenged regulations
pertaining to the provision of dining halls, restrooms, and canteens, the petitioners contended that
in a city such as Bombay, it would be difficult to locate suitable space and furnish canteens for
the workers. The Court rejected this argument on the grounds that providing canteens was not
impossible, and possibility is presumed unless impossibility is proven. It was declared that the
inclusion of provisions for canteens, as well as fundamental amenities like drinking water,
restroom facilities, and urinals, could not be deemed unreasonable or impracticable. Therefore,
the contractor would be obligated to provide the essential resources, as their availability was
beyond dispute.

Issue 4: Petitioners complained that Rule 25(2)(v)(b) lacks an appeals process. The Court stated
that the Commissioner of Labour had particular knowledge to question and consider, fact to fact,
if the statute was poor without an appeal provision. Rule 25(2)(v)(b) covers wages, hours, and
working conditions in similar jobs. Appeal provisions are flexible. Leaving out such a provision
would be appropriate as a lengthy procedure could disadvantage workers by extending their
employment. The explanation of the Rule required the Commissioner to consider pay of similar
workers, hence the Court found no injustice.

Rule 25(2)(ii) was also challenged as unreasonable because the licence mentioned the amount of
workers employed, and the petitioner asserted that employing more would violate the licence.
The Court noted the contractor could alter the licence. Sections of the Act evaluate if a licensee
has violated a condition without fair cause. If the amendment was unlawfully denied, the Act
allows appeals.

Issue 5: The petitioners argue that Rule 24’s arbitrary fee of Rs 30 per worker violates Articles
14 and 19(1)(f) and should be nullified. The court ruled that forfeiture without provision for
spending the amount on workers is a departmental penalty and hence Constitutional and that
“Forfeiture means not merely that which is actually taken from a man by reason of some breach
of condition but also that which becomes liable to be so taken as a penalty”.

The court ruled that the fixed charge of Rs 30 per workman does not violate Article 14 because it
applies to all contractors based on the number of workers they hire. The Court also stated that
forfeiture orders are appealable and must give parties a reasonable opportunity to show cause.
So, the Court ruled that the Act does not violate the Constitution and the rules do not clash with
it. The forfeiture serves as an administrative penalty and is intended to ensure proper
performance. The Court noted that Sections 23 to 26 state that violations of these rules are
punishable in criminal court, but as the Licensing officer under Section 14 is not a court, double
jeopardy does not apply. Section 34 of the Act did not suffer from excessive delegation because
it applied to the administrative machinery's internal working and concerns might only arise
during rule execution.

Conclusion:

Consequently, the Court dismissed the petitioner’s petition and arguments. The comprehensive
examination of the concept of ‘work of establishment’ is a significant and essential component of
this ruling. The lack of clarity on the boundaries of the same project impedes contractors from
using the pretext of engaging in ‘unrelated activity’ as a means to retain contract labour.
Contractors utilise contract labour in order to minimise costs and pay lower salaries. This is
achieved by the implementation of unfair practices, which ultimately places contract labourers in
a disadvantaged and vulnerable position. Consequently, the need for legislation, such as the Act,
arises to safeguard the interests of these labourers. The petitioner’s refusal to offer essential
amenities such as urinals, restrooms, and drinking water to contract labourers, citing their
impossibility, while also demanding punctuality in their job, underscores the urgency of
safeguarding the rights of these workers. The petitioners' engagement in the aforementioned
arguments indicates their attempt to identify potential loopholes in the legislation in order to
maintain their advantage in utilising contract labour. The Court has duly acknowledged the
significant deficiencies in the arguments put out by the petitioners and their evident endeavour to
evade legal provisions in order to exploit the labour force.

3) Food Corporation of India Loading and Unloading Workers Union v. Food Corporation of
India (1990) 1 GLR 384, – Valid registration certificate

Facts:

The issue revolved on a writ suit filed by a labour union representing Food Corporation of India
(FCI) employees. The union sought a declaration under Article 226 of the Indian Constitution
that about 1600 workers who engaged in diverse depot activities across eleven FCI depots in
Gujarat were, in fact, employees of FCI.

The union's crucial argument was that these workers had been performing critical jobs such as
loading, unloading, weighing, and storing food grains, all of which were directly related to FCI's
core goal. While these jobs had been performed by labour contractors for almost a decade, the
union claimed that there had been no legal labour contractors involved since March 1, 1985,
despite representations on paper. FCI's defence revolved around its argument that it had secured
proper registration certificates under the Act. They claimed that the contractors also had
legitimate licences, making the contracts legal. They produced registration certificates issued by
Central Government authorities, demonstrating compliance with the Act.

Issue:

- Whether the employees that are working in the depot are contract labourers or employees
of FCI.
- Whether the employees can claim necessary benefits of back wages and all other
consequential benefits

Rule:
Section 2 (1) (b) - contract labour

Section 7 - Registration of Certain Establishments

Section 10 - prohibition of employment of contract labour

Section 12 - Licensing of Contractors

Section 21 - Responsibility of payment of wages

Application:

The petitioner-union maintained that around 1600 individuals engaged in depot activities across
eleven FCI depots in Gujarat and they should be recognised as FCI employees. They contended
that the nature of the labour these people were doing, such as loading, unloading, weighing, and
storing food grains, was essential to FCI's basic goals. The union claimed that labour contractors
had stopped participating in these operations after March 1, 1985, and questioned the integrity of
FCI's registration certificates. They further stated that after January 28, 1986, the labour
contractors listed by FCI did not have valid licences as required by the Contract Labour
(Regulation and Abolition) Act of 1970.

The principal employer, the District Manager, F.C.I., Baroda, acquired the Certificate of
Registration on May 21, 1987, according to undisputed evidence. On June 4, 1987, the District
Manager, F.C.I., Sabarmati, Ahmedabad acquired a similar certificate. Thus, there was no valid
Certificate of Registration from January 28, 1986 to May 21, 1987 (in the case of the Baroda
Division) and till June 4, 1987 (in the case of the Sabarmati, Ahmedabad Division). As a result,
the requirement of obtaining registration under Section 7 of the Act remained unfulfilled. From
the facts given in the case it becomes clear that the contractors through whom these workmen
were engaged further did not possess licence issued as per Section 12 of the Act by the
“appropriate Government” for particular periods. As a result, in relation to this time frame, the
workers might very well allege that the workers were directly hired by the principal employer,
i.e., FCI.

In another case similar to this one established that every worker who works for a principal
employer and is subject to the provisions of the Contract Labour (Regulation & Abolition) Act,
1970 is to be treated as a worker of the principal employer unless two conditions are met: (1) the
establishment has obtained a Certificate of Registration for the relevant period and (2) it has
employed contract labour through a licenced contractor. If either of the prerequisites is not met,
the contract labour hired through the contractor is considered a 'worker' of the employer.

The court’s reasoning was founded on a thorough review of the petitioner-union's arguments, the
appropriate sections of the Contract Labour (Regulation and Abolition) Act of 1970, and well-
established case law. The judgement states that they were in agreement with above decisions
made by the respective courts.

However, according to the judgement, there is little material on record, and what is on record is
not undisputed. On the basis of such evidence, they concluded that it would be impossible to
conclude that all of the petitioner-Union's members were employed during the period in which
the two necessary conditions (or either of them, that is, of obtaining registration by the principal
employer and obtaining licence by the contractor as required by the relevant provisions of the
Act) were not met.

Conclusion:

In this case, it was held that the workmen CAN claim that they were the direct employees of the
principal employer. However, due to unavailability of adequate records, it is difficult to provide
a declaration in respect to which workmen would be considered a direct employee. Therefore, in
order to claim the necessary benefits, the individual workmen would have to make a
representation to the respondent with adequate information, within a period of sixty days from
the date of the judgement.

4) Air India Statutory Corporation v. United Labour Union AIR (1997) I LLJ 1113 SC
(overruled)

Facts:

The Air India case was a decision based on a petition to enforce a notification issued in 1976
prohibiting “employment of contract labour on and from December 9, 1976 for sweeping,
cleaning, dusting and watching of buildings owned or occupied by the establishments in respect
of which the appropriate Government under the said Act is the Central Government”. The
petitioners brought to the notice of the Court the fact that the notification was not enforced till
1992 and asked for directions to enforce the notification and absorb the workers into the
establishment.

Issue:

- Who will be considered ‘appropriate government’ for Air IndiaStatutory Corporation?

- Does contract labour system abolishment ensure that workmen shall have a right to be
regularised?
- Is the principal employer indebted to absorb the employees working as contract labourers
even though there is no express provision in the act?

Rule:
Section 10 (1) and (2) of the Act

Section 2 (1) (a) - appropriate government

Article 226 of the Indian Constitution

Application:

The Act regulates the conditions of labourers employed through the contractor registered under
the act. The work in an industry should not be perennial for contract labourers. The principal
employer is required to submit the number of workmen needed for employment. The contractor
in this equation who is an intermediary essentially plays the role of a supplier. The principal
employer is enjoined to compel the contractor to pay wages. In case of failure the principal
employer should pay and recover the wages from the contractor. This gives the principal
employer pervasive control.

The court looked into other cases that held the following - 1) when all jobs are incidental to or
allied to each other,they will be treated alike. 2) In the event of the nature of the job being
permanent or perennial, direction may be given under section 10(1) and 10(2) of the Act.

The ‘appropriate government’ in this case is the central government.Abolition of contract labour
system ensures right for regularisation of employees based on Article 226 of the Constitution and
court has powers under Article 226 to direct the employers to absorb such workers. According to
the notification under section 10(1) of the Act the principal employer is obliged to absorb the
employees working as contract labourers even though there is no express provision in the Act.
Also, the principle of ‘last come first go’ is to be followed in case of retrenchment due to excess
staff subject to reappointment as and when the vacancy arises.

Note: Last come first go rule: This rule means that the employees who were hired last will be the
first ones to be retrenched in case of any retrenchment process.

Unfortunately, this judgement was overruled by the Steel Authority of India Ltd v. National
Union Waterfront Workers & Ors, a five-judge bench,wherein the court held that even in the
cases where the system of contract labour is abolished, the erstwhile contract labour who might
have put up years of service as contract labour under the same principal employer cannot be
absorbed as a matter of right as there was no such provision in the Act. However, if it was a
sham contract the contract labour could raisean industrial dispute and deserve absorption. Thus
prospectively it became fruitless for the contract workers to approach either court or the
appropriate Government to abolish the system of contract under the section 10 of the Act.

5) Steel Authority of India v. Union of India, AIR 2006 SC 3229 – Absorption of workers after
abolition

Facts:
There were several appointed contractors working for the appellants,Visvesvaraya Iron and Steel
Limited, a unit of SAIL.The allegedly employees of the contractors raised a dispute before the
state government demanding their absorption as permanent employees.

Issue:

Are the contract workers employed in the nature of contract work listed as per annexure working
in the premises of the appellant justified in demanding absorption as regular permanent
employees of them.

Rule:

S. 10 (1) ( c ) IDA

S. 10 CLRA

S. 12 IDA

Application:

- An industrial adjudicator derives his jurisdiction from the reference of the dispute.
- For the purpose of exercising jurisdiction under section 10 of the1970 act, the appropriate
government is required to apply its mind, its order may be an administrative one but the
same would not be beyond the pale of judicial review.
- The state enjoys administrative power, both for abolition of contract labour and also in
making a reference to the industrial adjudicator.
- Neither section 10 of the CLRA act nor any other provisions, provides for automatic
absorption of contract labour on issuing a notification by the appropriate government.
- The question relating to abolition of contract labour cannot be decided by a writ court or
a labour court but by the competent appropriate government under the provisions of
Section 10 of the CLRA Act.
- The industrial adjudicator has the jurisdiction to determine whether the contractor and the
management had a sham contract and whether they were in effect and substance, direct
employees of the management.
- The 1970 Act is a complete code by itself. It not only provides for regulation of contract
labour but also abolition thereof. Relationship of employer and employee is essentially a
question of fact. Determination of the said question would depend upon a large number
of factors. Ordinarily, a writ court would not go into such a question.
- Absorbing the contract labour would amount to opening a new channel of recruitment
and it could not have been the intention of the parliament in enacting CRLA Act to
provide for appointment to the posts in various Government/Non-Government
establishments by circumventing the service rules.
 - The supreme court disagreed with the high court and reiterated thatstate exercises
administrative power in relation to abolition of contract labour and reference of an
industrial adjudication to the labour court, though it also emphasised that their judgement
should not come in the way of the appropriate government in applying its mind for the
purpose of issuance of a notification under section 10 of the 1970 Act, thus the appeal
was allowed.

6) Bharat Heavy Electricals Ltd. v. Mahendra Prasad Jakhmola (2019) 13 SCC 82

Facts:

Bharat Mahindra Heavy Electricals Ltd. entered into agreements with various contractors for the
completion of certain projects. During the course of work undertaken towards the projects, the
employment of some contract labourers were terminated. The contract labourers argued that such
termination amounted to violation of the Uttar Pradesh Industrial Disputes Act, 1947 and
approached the Labour Court seeking reinstatement. The Labour Court, in this regard, passed an
order in favour of the contract labourers by stating that BHEL was responsible for supervision
and administrative control over the contract labourers.

In BHEL’s appeal, the Uttarakhand High Court upheld the Labour Court’s ruling, holding that as
the contract labourers were performing duties identical with BHEL’s regular employees, they
were under the command, control and management of BHEL, and the contract with the
contractor was a “sham”. Thereafter, BHEL appealed to the Supreme Court.

Issue:

In order to determine whether the labourers were employees of BHEL, the Supreme Court relied
on the two-pronged test to find out whether the contract labourers are the direct employees of the
principal employer are:

i. Whether the principal employer pays the salary instead of the contractor; and

ii. Whether the principal employer controls and supervises the work of the employee.

Application:

The court held that in order to fall under the definition of an ‘employee’, as provided for in the
Act, the wages of such contract labourers must be directly paid by the principal employer.
However, this was not the case in the present matter as it was observed that the contractors
directly paid the workmen.

Secondly, it was held that the principal employer was not in direct control and did not supervise
the work of the workmen. The Apex Court opined that merely because the principal employer
directs the workmen of contractors as to ‘what to do’, after entering into such agreement with
contractors, does not imply that said principal employer has direct control and supervision.

The Court further observed that, in order for such workmen to be classified as ‘employees’,
evidence must be led to show that the work undertaken by such contract labour is work which is
ordinarily part of the industry of BHEL. Factors such as authority of appointment and
termination of labour, authority to take disciplinary action, continuity of service, inter-alia, must
be considered while determining a matter of this nature.

the Supreme Court in the present case elaborated on the expression of “exercise of control and
supervision”. The Court held that if the contract is for supply of labour, necessarily, the labour
supplied by the contractor will work under the directions, supervision and control of the principal
employer but that would not make the worker a direct employee of the principal employer, if: (i)
the salary is paid by a contractor; (ii) the right to regulate the employment is with the contractor;
and (iii) the ultimate supervision and control lies with the contractor. The principal employer
only controls and directs the work to be done by a contract labour, when such labour is assigned
to him. However, it is the contractor as employer, who chooses whether the worker is to be
assigned or allotted to the principal employer, or used otherwise. In short, worker being the
employee of the contractor, the ultimate supervision and control lies with the contractor as he
decides where the employee will work and how long he will work and subject to what
conditions. Only when the contractor assigns/sends the worker to work under the principal
employer, the worker works under the supervision and control of the principal employer but that
is secondary control. The primary control rests with the contractor.

Finally, the Supreme Court held that the workers under contract were not direct employees of
BHEL, as BHEL did not have direct control and supervision over the contract laborers, and
further that the necessary tests provided by the Apex Court were not satisfied.

7) State of Punjab and Ors. v. Jagjit Singh and Ors. (2017) 1 SCC 148

Facts:

This case concerned a writ petition by individuals who were employed as daily wage pump
operators, fitters, helpers, drivers, plumbers, chowkidars, ledger clerks, ledger keepers, petrol
men, surveyors, fitter coolies, sewermen, and similar positions. In their writ petition, the
petitioners had requested that they be entitled to the minimum pay scale as well as allowable
allowances (revised periodically) as given to regular employees in similar positions. The amount
of arrears owed to the affected workers could only be accumulated up to three years before the
writ petition was submitted.

Issue:
The question that needs to be addressed is whether temporarily engaged employees—that is,
daily wage workers, ad hoc appointees, casual employees, contractual workers, and the like—
have the right to receive the minimum of the regular pay scale in addition to dearness allowance
(as it is periodically revised) for carrying out the same tasks that are carried out by regularly
engaged employees against approved posts?

Application:

Analysing in length the principles laid down by various courts, the SC observed that the issue at
hand necessitated a bird’s eye view on the underlying ingredients which govern the principle of
‘equal pay for equal work’. The principle has been extensively deliberated in a catena of
decisions. In order to make the determination, the SC examined (i) the situations where the
principle was extended to employees engaged on a permanent basis and thereafter (ii) the
situations in which the principle was extended/declined to different categories of temporary
employees. Accordingly, various principles have been discerned and distinguished by the SC.

Analysing claims by temporary employees under the principle, the SC observed:

1. Not paying the same wages, despite the work being the same, is violative of Article 14 of
the Constitution of India and amounts to exploitation in a welfare state committed to a
socialist pattern of society.
2. The right of equal wages claimed by temporary employees emerges, inter alia, from
Article 39 of the Constitution.
3. The claim for equal wages would be sustainable where an employee is required to
discharge similar duties and responsibilities as permanent employees and the concerned
employee possesses the qualifications prescribed for the particular post.
4. In a claim for equal wages, the duration for which an employee remains or has remained
engaged, the manner of selection/appointment etc. would be inconsequential, insofar as
the applicability of the principle is concerned.
5. Based on the principle flowing from Article 38(2)of the Constitution, the Government
cannot deny a temporary employee at least the minimum wage being paid to an employee
in the corresponding regular cadre, along with dearness allowance and additional
dearness allowance, as well as all other benefits which are being extended to casual
workers.
6. The classification of workers (as unskilled, semi-skilled and skilled), doing the same
work, into different categories, for payment of wages at different rates is not tenable.
Such an act of the employer would amount to exploitation and shall be arbitrary and
discriminatory, and therefore,violative of Articles 14 and 16 of the Constitution.
7. If daily-wage employees can establish that they are performing equal work of equal
quality, and that all the other relevant factors are fulfilled, direction by a court to pay such
employees equal wages (from the date of filing the writ petition), would be justified.
The SC observed that an employee engaged for the same work cannot be paid less than another
who performs the same duties and responsibilities and certainly not in a welfare state. Such an
action besides being demeaning, strikes at the very foundation of human dignity. Anyone who is
compelled to work at a lesser wage does not do so voluntarily-he/she does so to provide foodand
shelter to his/her family, at the cost of his/her self-respect and dignity, at the cost of his/herself-
worth, and at the cost of his/her integrity. Any act of paying less wages as compared to others
similarly situated, constitutes an act of exploitative enslavement, emerging out of a domineering
position. Undoubtedly, the action is oppressive, suppressive and coercive, as it compels
involuntary subjugation. Thus, the principle of ‘equal pay for equal work’ constitutes a clear and
unambiguous right and is vested in every employee, whether engaged on a permanent or
temporary basis.