British India Corporation Ltd. v. State Of U. P. — 1976 DIGILAW 299 (ALL)

JUDGMENT K.N. SINGH, J. 1. THIS is a petition under Article 226 of the Constitution challenging validity of the order of the State Government dated February 13, 1974, issued under Section 3(b) of the U.P. Industrial Disputes Act, 1947, requiring the petitioner-company to pay wages and dear food allowance to its workmen in accordance with the directions contained therein. British India Corporation is a Company which manages a number of Cotton and Woollen Mills in the country. The Cawnpore Woollen Mills is one of them. This Mill manufactures woollen and worsted goods. The workmen of the Mill as well as those of other Textile Mills of Kanpur have been agitating for higher wages and dear food allowance on account of increase in price index. A number of Unions of the workmen of the textile Mills at Kanpur served notice on the management of all the textile Mills of Kanpur pressing for increase in wages and dear food allowance. A similar notice dated January 24, 1973 was served on the employers of the Cawnpore Textile Mills raising a number of demands with a threat that in case the workmen's demands were not fulfilled they would go on token strike. Eight different unions of the workmen of textile Mills of Kanpur served notice on the employers for the revision of wages and linking of dear food allowance to Simla series failing which they threatened to go on strike. The employers failed to meet the demands. The workmen of textile mills including those of the Cawnpore Woollen Mills went on token strike on January 15, 1974. Another strike notice was served by the workmen on the Cawnpore Woollen Mills on January 16, 1974. Similar notices were served by the workmen of all other cotton textile mills of Kanpur threatening to go on strike unless their grievance with regard to wages and dear food allowance was removed. Another strike notice was served by the workmen on the Cawnpore Woollen Mills on January 16, 1974. Similar notices were served by the workmen of all other cotton textile mills of Kanpur threatening to go on strike unless their grievance with regard to wages and dear food allowance was removed. The Labour Minister of the State Government convened a Tripartite Conference on January 28, 1974, which was attended by the Officers of the Labour Department of the Government, representatives of the workmen and employers of the textile mills of Kanpur including the Chairman of the British India Corporation Ltd. The Conference was presided over by the Labour Minister, Sri Raj Mangal Pandey, Discussions were held on January 21, 1974, and February 11, 1974, thereafter the State Government issued notification No." 1085(H.I.) XXVI-3-40(SM) 13 dated February 11, 1974, under Section 3(b) of the U.P. Industrial Disputes Act, 1947, revising the wages and dear food allowance of the workmen engaged in the textile industry at Kanpur and directing them to pay the same to the workmen in accordance with the directions contained therein. The order expressly stated that it would apply to the Cawnpore woollen Mills also, aggrieved, the British India Corporation Ltd. has challenged the validity of the Government Order by means of this petition. 2. SRI S.C. Khare, learned counsel for the petitioner urged that there was no emergency, rather any acute emergency to warrant the exercise of power by the State Government under Sec. 3 (b) of the U.P. Industrial Disputes Act. Government order dated January 19, 1973, issued under Section 3 of the U.P. Industrial Disputes Act revising wages of the workmen of the petitioner-company was already in force which contemplated constitution of a Tripartite Committee consisting of the representatives of workmen, employers and the State Government to settle and decide the question of revision of wages. Since the order was binding on the workmen as well as the employers there existed no acute emergency rather any emergency for the exercise of powers under Section 3 (b) to increase wages and dear food allowance. Section 3 (b) is in the following terms: "3. Power to prevent strikes, lock out etc. Since the order was binding on the workmen as well as the employers there existed no acute emergency rather any emergency for the exercise of powers under Section 3 (b) to increase wages and dear food allowance. Section 3 (b) is in the following terms: "3. Power to prevent strikes, lock out etc. If in the opinion of the State Government it is necessary or expedient so to do for securing the public safety or convenience or the maintenance of public order or supplies and service essential to the life of the community or for maintaining employment, it may be general or special order, make provision (b) for requiring the employers, workmen or both to observe for such period as may be specified in the order, such terms and conditions of employment as may be determined in accordance with the order." The above provision confers power on the State Government to issue orders requiring employers and workmen or both to observe such terms and conditions of employment as it may determine in that order for a specified period. This power can be exercised only on the existence of the conditions precedent specified in the enacting clause, viz., the power can be exercised only if the State Government forms opinion that it is necessary to issue order for the purpose of securing public safety or convenience or maintenance of public order and supply and service essential to the life of the community or for maintaining employment. The nature of the power and its scope was considered in State of U. P. v. Basti Sugar Mills Co. Ltd.1961(2) F.L.R. 101=A.I.R. 1961 S.C. 420. The Supreme Court observed that there may be an emergency and the Government may have to act promptly for securing public safety or convenience or the maintenance of public order or supply and services essential to the life of the community or for maintaining employment. Repelling the argument that the purpose which is sought to be achieved by the said provision could be achieved by reference of a dispute to adjudication by an Industrial Tribunal. Labour Court, or Arbitrator, the Supreme Court observed: "The opening words of Section 3 themselves indicate that the provisions thereof are to be availed of in emergency. It is true that even a reference to an Arbitrator of a Conciliator could be made only if there is emergency. Labour Court, or Arbitrator, the Supreme Court observed: "The opening words of Section 3 themselves indicate that the provisions thereof are to be availed of in emergency. It is true that even a reference to an Arbitrator of a Conciliator could be made only if there is emergency. But then an emergency may be acute. Such an emergency may necessitate the exercise of powers under clause (b) and a mere resort to those under clause (d) may be inadequate to meet this situation. Whether to resort to one provision or other must depend upon the subjective satisfaction of the State Government upon which powers to act under Section 3 have been conferred by the legislature." The above observations leave no manner of doubt that the State Government is empowered to exercise its power under Section 3 (b) in an emergency. The emergency need not always be acute, although in some cases it may be acute but the existence of emergency is a condition precedent for the exercise of power. On a perusal of the affidavits filed on behalf of the State Government and the respondent-workmen it is clear that on January 15, 1974, the workmen employed in the Textile Mills at Kanpur including the workmen of the Cawnpore Woollen Mills went on strike on January 15, 1974. Eight different Unions of the workmen of Textile Mills of Kanpur served notice on the employers for the revision of wages and linked of dear food allowance to Simla series failing which they threatened to go on strike. There is no dispute that the employers failed to meet the demands of the workmen. The textile industry was thus faced with a situation where the employees were bent upon going on strike. If that was permitted, the entire textile industry at Kanpur would have been paralysed. After discussing the problem with the representatives of the workmen and employers the State Government was satisfied that an acute emergency existed which necessitated the exercise of power under Section 3 (b) of the Act to maintain essential services for the life of the community and for the purpose of maintaining employment in the textile industry at Kanpur. This is clear from the averments contained in paragraphs 42 to 44 of the affidavit of B.N. Chaturvedi, Deputy Secretary to the Government of U.P. in the Labour Department. This is clear from the averments contained in paragraphs 42 to 44 of the affidavit of B.N. Chaturvedi, Deputy Secretary to the Government of U.P. in the Labour Department. Proceedings of the Tripartite Conference held on January 28, 1974, show that during the discussion the representative of the workmen stated that the textile mills of the country were not revising the wage structure of its workmen, consequently strike was going on in the textile industry at Bombay and if the wages and dear food allowance of the textile mills at Kanpur were not revised the workmen would go on indefinite strike. The consensus at the Conference was to find out some way to solve the question of neutralization of the increase in the living index and to revise the wages. In the background of these facts and circumstances the State Government bona fide formed opinion that there was emergency necessitating the exercise of power under Section 3 (b) of the Act. Service of strike notices and threat of agitation by the workmen was held sufficient to justify the formation of opinion or the existence of acute emergency and exercise of power under Section 3 (b) of the Act in Hindustan Industries and Machine Manufacturing Co. Ltd. v. State of U. P. 1971 L. and I. Case's 1154 and M/s. Laxmi Trading Co. v. State of U. P.,1973(26) F.L.R. 289. Moreover, the impugned order expressly recites, 'and whereas in the opinion of the State Government it is necessary to enforce the said decision for securing public convenience and for maintaining public order and supply essential to the life the community and for maintaining employment." 3. THE recital in the order shows that the conditions precedent were complied with and the State Government bona fide formed opinion that circumstances existed for the exercise of power under Section 3 (b) of the Act. Therefore, the burden to show that the condition precedent did not exist or the necessary opinion was not formed and that there has been no compliance with the conditions precedent of Section 3(b) clearly falls on the petitioner as was held in Swadeshi Cotton Mills v. State Industrial Tribunal 1961(13) F.L.R. 527=A.I.R. 1961 S.C. 1381. Therefore, the burden to show that the condition precedent did not exist or the necessary opinion was not formed and that there has been no compliance with the conditions precedent of Section 3(b) clearly falls on the petitioner as was held in Swadeshi Cotton Mills v. State Industrial Tribunal 1961(13) F.L.R. 527=A.I.R. 1961 S.C. 1381. The petitioner company has failed to place any material before the Court to show that the recital contained in the impugned order was non-existent or the conditions precedent were not complied with by the State Government in issuing the order. 4. THE second contention of the learned counsel was that the State Government had no statistics or relevant material before it nor it considered any material in determining the wages and dear food allowance. The State Government did not collect any data or statistics to assess the paying capacity of the petitioner company or the necessity of quantum of increase, instead it issued the order arbitrarily without considering the interest of the employers. It was further urged that even if Section 3(b) conferred power on the State Government to exercise power on its subjective satisfaction, but since the effect of the exercise of power is of far reaching nature, the same could not be exercised purely on its subjective satisfaction without considering the employers interest and its paying capacity and other relevant materials. Reliance was placed on the rule laid down. In State of Assam v. Bharat Kala Bhandar 1968(16) F.L.R. 96=A.I.R. 1967 S.C. 1766., the Supreme Court considered the validity of notification issued under rule 126-AA of the defence of India Rules. 1962. The rule conferred power on the State Government to issue general or special order directing employers to pay wages or allowance to the workmen on the rates specified in the order for the period mentioned therein. This power could be exercised in emergency for securing public safety, maintenance of supplies necessary for the life of community and for maintenance of employment. The nature of the rower conferred on the State Government by Rule 126-AA was similar to that conferred by Section 3(b) of the U.P. Industrial Disputes Act. The Supreme Court observed that the power of the State Government under Rule 126-AA did not depend purely on the subjective satisfaction of the State Government. The nature of the rower conferred on the State Government by Rule 126-AA was similar to that conferred by Section 3(b) of the U.P. Industrial Disputes Act. The Supreme Court observed that the power of the State Government under Rule 126-AA did not depend purely on the subjective satisfaction of the State Government. Since the result of the exercise of the power was to vary contractual relations between the employers and employees concerned in the employment with respect to which the order could be issued, the effect of the exercise of power was to settle the relations between the employers and employees, as such the power conferred was of far-reaching nature. The State Government before exercise of power was required to consult the interest of concerned parties before taking action under the rule. But while considering the interest of the employers it was not necessary to serve notice on each individual employer nor any evidence oral or documentary was required to be taken. The requirement of law would be fulfilled if the State Government collected some kind of date with the help of interest concerned and held conference with the interest concerned to enable it to exercise its power under Rule 126-AA. The Supreme Court observed that this was the barest minimum necessity for the exercise of power under the rule. The petitioner cannot derive any assistance from the observations of the Supreme Court in Bharat Kala Bhandar's case (supra), because in the instant case necessary consultation with the interest concerned was held and the relevant data was considered at the Tripartite Conference before the issue of the impugned order. As already noted representatives of the employers including the Chairman of the petitioner company were present and took part in the discussion held on January 8 and February 11, 1974. The proceedings of the Tripartite Conference held on January 28, 1974, show that various figures, documents and materials relating to wages and dear food allowance were considered. Revision of the wage structure and dear food allowance was the main question discussed at the Conference. The representative of the workman asserted that the basis of calculation for fixing the wages to neutralise the cost of living index was wrong and whatever was being given to them by way of neutralization was wholly insufficient. Revision of the wage structure and dear food allowance was the main question discussed at the Conference. The representative of the workman asserted that the basis of calculation for fixing the wages to neutralise the cost of living index was wrong and whatever was being given to them by way of neutralization was wholly insufficient. On the other hand the representative of the employers asserted that the employers were neutralising the cost of living index to the extent of 80%. The workmen claimed 100 per cent neutralization whereas the employers were ready to pay to the extent of 80%. The discussion held at the meeting was confined to the question as to what should be the percentage of neutralization. The representatives of the employers and the workmen both referred to various figures, documents and awards in support of their view points. In these circumstances the petitioner's contention that there was no material or data before the State Government or that the employers representatives were not consulted is misconceived. The procedure that was followed met the requirement of law laid down by the Supreme Court. 5. IT was then urged that on the implementation of the impugned order, the petitioner company would go bankrupt and the Cawnpore Woollen Mills may be closed as the petitioner company was not in a position to bear the extra financial burden forced upon it. The State Government should have taken into account the paying capacity of the petitioner company. In my opinion the State Government was not required to adjudicate upon the claims of the rival parties or to hold a detailed enquiry about the paying capacity of the petitioner company. As already discussed, the State Government was required only to consider the employers' interest and the relevant data before forming the requisite opinion necessary for the issue of the order, and that was done in the instant case. IT is not necessary to consult each individual employer or to hold enquiry above the paying capacity of each individual employer. The view consistent with the law laid down by the Supreme Court in Bharat Kala Bhandar's case. If the petitioner company is aggrieved by the order and if it finds itself unable to bear the addition costs of wages it is free to raise industrial dispute and request the Government to refer the dispute for adjudication to an Industrial or Labour Court. If the petitioner company is aggrieved by the order and if it finds itself unable to bear the addition costs of wages it is free to raise industrial dispute and request the Government to refer the dispute for adjudication to an Industrial or Labour Court. If the petitioner adopts this course and if the dispute is referred, the question of revision of wages may be investigated to detail by the Labour Court or Industrial Tribunal and the grievance of the petitioner if genuine may be removed. The impugned order is however not vitiated on the ground that the petitioner company finds it difficult to meet the financial burden. 6. LEARNED counsel then urged that any settlement arrived at the Tripartite Conference should have been registered in accordance with Section 6-B of the Act read with Rule 5 of the U.P. Industrial Disputes Rules, 1957. The procedure prescribed therein was not followed and no agreement was registered, as such the agreement, if any, was not binding on the employers and the State Government had no jurisdiction to enforce the same by means of an order issued under Section 3(b) of the Act. I find no substance in the contention. The impugned order does not seek to enforce any settlement or agreement between the employers and the workmen. The Tripartite Conference was held to ascertain the view point of the employers and the workmen. During the course of discussion the representatives who attended the Conference agreed that the question of percentage of neutralization should be decided by the Labour Minister. After discussions the Labour Minister consulted the officers of the labour Department and announced his decision on the question of dear food allowance and the extent to which raise in price index was to be neutralised and also the rate of conversion of the cost of living index number. The recitals contained in the impugned order do not show that the State Government sought to enforce any agreement arrived at between the employers and the workmen, instead the recitals contained therein show that the order contains the decisions which were taken after holding discussion with the interested parties and after considering the relevant matters. It was then urged that the impugned order is illegal as it seeks to enforce the wage structure with retrospective effect. It was then urged that the impugned order is illegal as it seeks to enforce the wage structure with retrospective effect. Section 3 (b) cannot be given retrospective effect and the State Government has no power to issue any order under the said provision enforcing the same with retrospective effect as was held by the Supreme Court in State of U. P. v. Basti Sugar Mills (supra). The order in question, however, does not operate with retrospective effect. The order no doubt contains a direction that the dear food allowance would be payable from January 1, 1974, at the rate prescribed by the order but this does not mean that the order operates with retrospective effect. Clause 3 of the notification no doubt lays down that the minimum wage for unskilled workmen should be paid at the rate prescribed in the order with effect from January 4, 1974. Similarly clause 7 of the order directs payment of arrears for the period from August 15, 1972 to August 31, 1973, on the basis of Simila series. Clause 7 contains direction for payment of arrears with effect from March 1974 in three equal monthly instalments. Similarly clause 5 contains direction for payment of dear food allowance for the month of February, 1974, in March, 1974. The direction for payment of dear food allowance and arrears of wages does not make the order effective with retrospective effect. In Basti Sugar Mills case, the order under challenge issued under Section 3 (b) of the Act contained a direction for payment of bonus for the past period. A Full Bench of our Court in Basti Sugar Mills Co. v. State of U. P. A.I.R. 1954 Alld. 538. held that the said direction purported to give retrospective operation to the provisions of clause (b) of Section 3. The Supreme Court repelled the contention that the order was given retrospective effect in the following words: "The order made by the State Government in regard to bonus is to the effect that it shall be paid for the year 1947-48 to those persons who worked in that year and for the year 1948-49 to those persons who worked in that year. This payment was directed to be made within six weeks of the making of the order. This payment was directed to be made within six weeks of the making of the order. By giving this direction the State Government did no more than attach a condition to the employment of the workmen in the year 1950-51 in Sugar factories affected by the order. That is all that it has done........ We cannot therefore accept the argument that under clause (b) it was not open to the State Government to make payment of bonus to the workmen a condition of their employment in future and thus augment their past wages." 7. IN Hindustan Industries case (supra) validity of the Government order dated July 13, 1970, containing directions for the payment of arrears of wages with effect from January, 1970, was considered. The Bench repelled a similar contention and held that the order did not operate with retrospective effect as the terms and conditions of wages laid down in the order did not require the employers to make payment of wages to its past employees also, instead it required the employers to pay wages in accordance with the directions contained therein to the existing workmen. In the instant case also the impugned order does not contain any direction requiring the employers to make payment to the past workmen, instead it requires the employers to pay arrears to the workmen who may still be continuing in its employment. I, therefore, hold that the directions contained in the order for payment of arrears of wages and dear food allowance to the employees do not make the order retrospective. 8. IT was then urged that there are two orders in force, both issued under Section 3 (b) of the Act requiring the petitioner to pay wages in accordance with the directions contained therein. The State Government issued order on January 19, 1973, fixing wages, while that order was in force the impugned order was issued even though the earner order was not cancelled or revoked. Admittedly, on January 19, 1973, the State Government issued an order in exercise of the power conferred under Section 3(b) of the Act directing the petitioners to pay dear food allowance and increased wages to the workmen of the Cawnpore Woollen Mills at the rates fixed therein. Clause (b) of that order stipulated Constitution of a Tripartite Committee to settle and decide the wages. Clause (b) of that order stipulated Constitution of a Tripartite Committee to settle and decide the wages. The Committee was required to submit its report with in three months of its constitution. The order was to remain in force for a period of five years. IT is true that on February 13, 1974, when the impugned order was issued the order dated January 19, 1973, was in force but that does not affect the validity of the impugned order. There is no dispute that the two orders operate in the same field as the directions contained therein relate to the terms of employment of the workmen of the Kanpur Woollen Mills. These two orders are administrative in nature issued by the same authority governing the same subject matter, in this situation the order later in time would prevail and anything contrary to that contained in the earlier order dated January 19, 1973, ceased to remain in operation. If the intention was to keep the order dated January 19, 1973, in operation the impugned order would have contained direction to that effect. In clause 10 of the impugned order there is a direction that the Government order dated January 19, 1973, issued under Section 3(b) of the Act shall continue to apply except to the extent as modified by the order. This means that the order dated January 19, 1973, would continue in force to a limited extent. In the absence of any similar direction for the continuance of the order dated January 19, 1973, the Government's intention is clear that the impugned order dated February 13, 1974, should prevail in supersessions of the order dated January 19, 1973. Since the two orders cannot stand together it must be held that the earlier order stood superseded by the impugned order. The contention that there was no necessity for the issue of the impugned order as the order dated January 19, 1973, was already in force is untenable. As already noted, the workmen of the Cawnpore Woollen Mills were highly agitated and they were not satisfied with the revision of wages and dear food allowance as laid down in the order dated January 19, 1973. They resorted to strike and again threatened to go on indefinite strike, a situation had arisen where the entire industry was likely to be paralysed. The situation which prevailed justified the issue of the impugned order. They resorted to strike and again threatened to go on indefinite strike, a situation had arisen where the entire industry was likely to be paralysed. The situation which prevailed justified the issue of the impugned order. Learned counsel urged that the Tripartite Conference was held to discuss the problems of the cotton textile mills, the Conference was never convened for the purpose of discussing the question of revision of wages structure or dear food allowance of the workmen employed in Woollen Industry. The management of the Cawnpore Woollen Mills was not consulted before the issue of the impugned order and its view point was never taken into account. I find no merit in the contention. There is no dispute that Sri P.N. Mothur, who is Chairman of the petitioner company was not only present but he actively participated in the discussion held at the Tripartite Conference. The proceedings of the Conference show that the question that the revision of wages and dear food allowance should be made applicable to the workmen of Cawnpore Woollen Mills was also raised. The Management of the Cawnpore Woollen Mills was represented by the Chairman of the petitioner company at the Tripartite conference. But assuming that the management was not consulted the impugned order would not be rendered invalid. Interest of the employers is no doubt required to be consulted before the issue of the order as discussed above but each individual employer need not be consulted. The requirement of law would be fully satisfied if the representatives of the industry are consulted and their interest is taken into account. There is no law or principle which requires the State to consult each and every employer. 9. IT was then contended that the considerations necessary to be taken into account in revising wages and dear food allowance for the workmen employed in the Cotton Textile Mills are quite different than those applicable to the workmen employed in the Woollen industry. The State Government committed patent error in treating them similar. The contention is untenable. The textile industry in general includes woollen as well as cotton industry. 'Textile' as defined Encyclopaedia Britanica means: Cotton, silken and woollen products.' The expression textile industry' includes cotton as well as woollen industries. The legislature while enacting laws never maintained any distinction between cotton or woollen industries, instead it treated woollen industry as an integral part of the textile industry. 'Textile' as defined Encyclopaedia Britanica means: Cotton, silken and woollen products.' The expression textile industry' includes cotton as well as woollen industries. The legislature while enacting laws never maintained any distinction between cotton or woollen industries, instead it treated woollen industry as an integral part of the textile industry. Section 2(g) of the Textile Committee Act, 1963 defines the expression 'textiles' which means any fabric, or cloth or yarn made wholly or in part of cotton or wool or silk or artificial silk or other fibre. Schedule I to the Employees Provident Fund Act, 1952, also defines textile in the same manner. IT is thus clear that the concept of 'textile industry' covers cotton as well as woollen industry. 10. IN practice also whenever there was revision of wages or dear food allowance, the workmen employed in the woollen as well as cotton mills were treated alike, this is clear from paragraph 3 of the Government order dated January 19, 1973. In earlier years also whenever dearness allowance or wage structure was revised, the workmen of woollen mills were treated at par with the cotton textile industry. The details mentioned in paragraph 8 of the affidavit of Sri Vimal Mehrotra, filed on behalf of the respondent workmen, show that during the last 30 years whenever wages of cotton textile workmen were revised or increased there was similar increase in wages of woollen textile workers. In Workmen v. British India Corporation 1965(10) F.L.R. 247= (1950-67) 4 S.C.L.J. 2322= (1966) 2 L.L.J. 433. Supreme Court held that the considerations which applied for the increase in wages for the operatives of spinning and weaving section of cotton textile industry were applicable for revision of wages of similar class of workmen employed in the woollen mills functioning in the area. The Supreme Court upheld the demand of increase of wages of workmen of Cawnpore Woollen Mills Branch on the basis of the recommendations of the Central Wage Board made in respect of the workmen of Cotton Textile Industry. Thus the considerations relating to revision of wages and dear food allowance applicable to the cotton textile industry at Kanpur are not different than those applicable to Cawnpore Woollen Mills. This is well established by the legislative practice as well as by judicial pronouncements. Thus the considerations relating to revision of wages and dear food allowance applicable to the cotton textile industry at Kanpur are not different than those applicable to Cawnpore Woollen Mills. This is well established by the legislative practice as well as by judicial pronouncements. Lastly, it was urged that the power under Section 3(b) could be exercised for a temporary period but the order in question is to remain in force for a period of two years, as such it is outside the scope of Section 3(b) of the Act. The Act does not prescribe any period for which an order issued under Section 3 (b) may remain in force, but considering the nature and scope of the power conferred by Section 3 (b) the exercise of power is for a temporary period requiring immediate action by the State Government to maintain public order and supplies and service essential to the life of the community of for maintaining employment etc. Two years period cannot by any reasonable approach be said to be a period of permanent nature. In view of the above discussion, I find no illegality in the impugned order dated February 13, 1974. The petition fails and is accordingly dismissed with costs.