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2018 DIGILAW 349 (ORI)

Management of Steel Authority Of India Ltd. v. Presiding Officer, Industrial Tribunal, Odisha, Bhubaneswar

2018-04-03

K.R.MOHAPATRA, SANJU PANDA

body2018
JUDGMENT K.R.MOHAPATRA, J. - The petitioner-Management in this writ petition seeks to assail the award dated 22.12.1994 (Annexure-1) passed by learned Presiding Officer, Industrial Tribunal, Bhubaneswar (for short ‘the Tribunal) in I.D. Case No.27 of 1985. 2. The term of reference for adjudication before learned Tribunal was as follows : “Whether the enhancement of electric charges for domestic consumption of the Workmen employed by the SAIL, Rourkela Steel Plant, Rourkela on and from 1.4.1982 is legal and/or justified ? If not, to what relief, the Workmen are entitled to ?” 3. Learned Tribunal upon consideration of the materials on record answered the reference in favour of second party-Workmen holding that the issue of circulars and realization of the energy charges at a higher rate and not providing subsidy is a change in condition of service and when the Management has not complied with the provisions under Section 9-A of the Industrial Disputes Act, 1947 (for short ‘the I.D. Act) before enhancing the electricity charges, the aforesaid action of the Management is neither legal nor justified. Learned Tribunal further held that the circulars vide Ext.1/T and subsequent circulars in the same line are neither valid nor enforceable and the energy charges are to be realized at the rate which was being realized from the workers/occupiers of the quarters prior to issue of the impugned circulars. It may be stated here that the date mentioned in the schedule of reference should be ’01.04.1981’ in place of ’01.04.1982’, as the impugned circular was issued on 31.03.1981 and the enhanced rate of electricity charges was made applicable with effect from 01.04.1981. 4. Although by efflux of time as well as the charge in policy of the Management in the interregnum, the issue involved in this case has lost its importance, but in view of the submission of learned Counsel for the opposite party No.3-Union that some beneficiaries of the impugned award are still in service and are entitled to the benefit of the impugned award, we feel it necessary to delve into the issue and test the legality and propriety of the impugned award under Annexure-1. 5. Briefly stated, on 12.9.1960, the Hindustan Steel Ltd. (for short ‘HSL’) entered into an agreement (Annexure-3) with the State Government in respect of supply of electricity for operation of the Steel Plant at Rourkela. 5. Briefly stated, on 12.9.1960, the Hindustan Steel Ltd. (for short ‘HSL’) entered into an agreement (Annexure-3) with the State Government in respect of supply of electricity for operation of the Steel Plant at Rourkela. The said agreement was for a period of 10 years with a deeming provision of renewal for a further period of 10 years at a time. The price of supply of electricity was fixed at 2np (Naya Paise) per K.Wt. along with other terms and conditions. On 2.12.1960, the HSL issued a circular to all its employees occupying quarters provided by HSL that electricity supply to all the residential accommodation shall be done at the rate of 7np per unit with effect from 1.1.1961 (Annexure-4). On 29.6.1961, permission under Section 28 of the Indian Electricity Act, 1910 was granted to HSL for distribution of its power from its own Captive Power Plant to the quarters of employees. As such, supply of electricity to the residential accommodation of the employees was made at a price of 7np per unit. In the offer of appointment (sample copy at Annexure-8), it has been provided in Clause -6 that : “You may be allotted a quarter for your residence in your due turn in accordance with the House Allotment Rules of the Company as applicable from time to time. In the event of a quarter having been allotted to you, you will be liable to pay rent, electricity charges, conservancy charges and other charges or damages in respect of the quarter according to the Rules of the Company in force from time to time. Your acceptance of this Offer of Appointment would be treated as your authorization for deduction of the above rents, charges and damages.” (emphasis supplied). 6. In the year, 1964, i.e. on 25.5.1964, the State Government issued a letter for levy of duty under the Orissa Electricity Duty Act, 1961, wherein it has been provided that such duty shall be recovered basing upon the price charged by HSL to its consumers and accordingly the HSL charged its employees in occupation of quarters at the rate of Rs.8.05 paise per unit, which included 7 paise towards electricity charges and 15% thereof, i.e.Rs.1.05 paise, as duty levied (Annexure-11) 7. It is the case of the petitioner-Management that the Workmen of SAIL/HSL in occupation of the quarters were always paying energy charges higher than that being paid by SAIL to OSEB (the supplier) till 1979. On 17.10.1979, the State Government by virtue of the gazette notification vide Exts. P and N enhanced the energy supply charges to 75 paise for its own domestic consumers and also enhanced the rate for supply of energy to RSP up to 25.5 paise inclusive of duty. Accordingly, the HSL/SAIL vide circular dated 30/31.3.1981 (Annexure-16) (Ext.1/T) enhanced the energy charges for its employees occupying Company’s quarters. The opposite party No.4-Union protested the same under Annexure-17 (Ext.2). On failure of conciliation, the matter was referred to learned Tribunal and the impugned award under Annexure-1 has been passed. 8. Learned Counsel for the petitioner argued that payment of electricity charges is not a condition of service and accordingly, enhancement of charges and change in mode of calculation of charges levied upon the occupants of the quarters does not attract rigours of Section 9-A of the I.D. Act. In an identical matter, i.e. in respect of Management of Barsuan Iron Ore Mines, which was also under the administrative control of said RSP, Rourkela, the very same circular dated 31.3.1981 (Ext.1/T) was in question and the learned Tribunal in its award dated 30.03.1993 held that payment of electricity charges is not a condition of service. Such award remained un-assailed and reached its finality. Allotment of quarter to an employee does not come within the purview of conditions of service of a Workman. The allottee (Workman) is a licensee vis-a-vis such allotment and governed under the House Allotment Rules of the Company. The quarter is allotted to an employee subject to its availability and turn of the employee/workman for allotment. Allotment of quarter and the conditions thereof are governed under the provisions of House Allotment Rules of RSP. As such, it can never said to be a condition of service of a workman. When the electricity charges are revised basing upon the enhancement of charges by the supplier, the same cannot be termed as an adverse change in condition of employment, inasmuch as on and from the very first day of allotment of the quarters, no subsidy was allowed to any workman. The quarter allotment rules does not provide for any subsidy in energy charges to the employees. The quarter allotment rules does not provide for any subsidy in energy charges to the employees. Further, the electricity charges on a licensee (Workman allotted with a quarter) cannot be said to form a part of the “Wages” defined under Section 2 (rr) of the I.D. Act and any revision on the same cannot be called as wage revision adversely affecting the employee. When all the employees of Rourkela Steel Plant have not been allotted with quarters, neither allotment of quarter nor the electricity charges meant for the said quarter can be treated to be a service condition or wages under the provisions of the I.D. Act. Accordingly, learned Counsel for the petitioner-Management submitted that learned Tribunal although passed an exhaustive award, has misconstrued the provisions of Section 9-A as well as Section 2 (rr) of the I.D. Act, which renders the impugned award under Annexure-1, not sustainable in law. Hence, he prays for setting aside the impugned award under Annexure-1. 9. Learned Counsel for the opposite party No.3, on the other hand, submits that learned Tribunal on the basis of the evidence adduced and the materials available on record as well as the submissions made by the parties to the reference passed the impugned award, which is not open to be challenged in exercise of power under Article 227 of the Constitution of India. There is neither any error apparent on the face of the record nor there is any material irregularity or patent illegality in the impugned award. As such, this writ petition is liable to be dismissed. The workmen occupying the Company’s quarters were being charged at a concessional rate of 8.05 paise per unit towards electricity charges for long 20 years, commencing from 1961 to 1981, when the Company purchased the electricity from OSEB at a much higher rate. All on a sudden, the petitioner-Management vide circular dated 31.03.1981 enhanced the electricity charges unilaterally from 8.05 paise to 32 paise per unit without complying with the provisions of Section 9-A of the I.D. Act. The electricity charges was further enhanced vide another circular dated 1.4.1983. The electricity charges were being deducted from the wages of the workmen. Thus, deduction of electricity charges at a higher rate amounts to reduction in the wages of the Workmen, which affects the workmen adversely. The electricity charges was further enhanced vide another circular dated 1.4.1983. The electricity charges were being deducted from the wages of the workmen. Thus, deduction of electricity charges at a higher rate amounts to reduction in the wages of the Workmen, which affects the workmen adversely. It is a privilege/subsidy, which was being granted for more than two decades and was withdrawn without complying with the provisions of Section 9-A of the I.D.Act, which renders the issuance of circular under Annexure-16 (Ext.1/T) illegal and unjustified. It is further contended that the award passed in the case of Barsuan Iron Ore Mines in I.D .Case No.2/82 (C) was on a different consideration and that relates to the issue regarding change of electricity charges from point basis to unit basis. Thus, the award passed in the case of Barsuan Iron Ore Mines has no application to the present case. 10. Learned Counsel for the opposite party No.3-Union also referring to the cross-examination of M.W.1 submits that the said witness, who was none other than the Superintendent of Power Distribution Department in Rourkela Steel Plant has categorically deposed in his evidence that though tariff rate of OSEB from 1961 to 1981 had gradually gone up, but the petitioner-Management till the end of March, 1981, was charging at a rate of 8.05 np from its employee. The OSEB was collecting 50.23 paise from the Management of Rourkela Steel Plant till the end of March, 1981. Thus, he submitted that in view of their own admission (of the Management) through their witness that the employees of RSP were required to pay electricity charges at a concessional rate, the contention of the petitioner cannot be accepted. Hence, he contended that learned Tribunal has committed no error either on fact or law holding that the circular for enhancement of the electricity charges as per Ext.1/T is not legal or justified and prayed for dismissal of the writ petition. 11. Heard Mr. J. Pattnaik, learned Senior Advocate along with D.P. Nanda, learned Counsel appearing for the petitioner and Mr. Nayak, learned Counsel for the opposite party No.3-Rourkela Mazdoor Sabha representing Workmen of Rourkela Steel Plant and perused the materials on record including the pleadings of the parties. 12. The statement of M.W. 1 as relied upon by the opposite party No.3-Union, is neither based on any pleadings nor material available on record. Nayak, learned Counsel for the opposite party No.3-Rourkela Mazdoor Sabha representing Workmen of Rourkela Steel Plant and perused the materials on record including the pleadings of the parties. 12. The statement of M.W. 1 as relied upon by the opposite party No.3-Union, is neither based on any pleadings nor material available on record. Hence, the same cannot be accepted to be an admission by the petitioner-Management. 13. The sole issue that requires for consideration by this Court is whether payment made by the Workmen towards electricity charges in respect of Company’s quarters under their occupation can be held to be a customary concession or privilege or charge in usage and if so, whether the petitioner-Management is required to give prior notice under Section 9-A of the I.D. Act to the workman likely to be affected by such withdrawal of customary concession or privilege or usage. Section 9-A of the I.D. Act reads as follows : “9-A. Notice of change – No employer, who proposes to effect any change in the conditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule, shall effect such change. (a) without giving to the workmen likely to be affected by such change a notice in the prescribed manner of the nature of the change proposed to be effected, or (b) within twenty-one days of giving such notice: Provided that no notice shall be required for effecting any such change – (a) where the change is effected in pursuance of any settlement of award ; or (b) where the workmen likely to be affected by the change are persons to whom the Fundamental and Supplementary Rules, Civil Services (Classification, Control and Appeal) Rules, Civil Services (Temporary Service) Rules, Revised Leave Rules, Civil Service Regulations, Civilians in Defence Services (Classification, Control and Appeal) Rules or the Indian Railway Establishment Code or any other rules or regulations that may be notified in this behalf by the appropriate Government in the Official Gazette, apply.” “Conditions of service’ has not been defined under I.D. Act. However, Fourth Schedule of the I.D. Act, provides the instances of conditions of service, change of which requires a prior notice under Section 9-A of the I.D.Act. Relevant portion of Fourth Schedule reads as follows : FOURTH SCHEDULE (See Section 9-A) CONDITIONS OF SERVICE FOR CHANGE OF WHICH NOTICE IS TO BE GIVEN. 1. However, Fourth Schedule of the I.D. Act, provides the instances of conditions of service, change of which requires a prior notice under Section 9-A of the I.D.Act. Relevant portion of Fourth Schedule reads as follows : FOURTH SCHEDULE (See Section 9-A) CONDITIONS OF SERVICE FOR CHANGE OF WHICH NOTICE IS TO BE GIVEN. 1. Wages, including the period and mode of payment; 2 to 7. Xxx xxx xxx 8. Withdrawal of any customary concession or privilege or change in usage.; 9 to 11 xxx xxx xxx Fourth Schedule of the I.D. Act provides for a notice under Section 9-A of the I.D. Act before effecting any change in wages or withdrawal of customary concessions, privilege or change in usage. The terms and conditions of service are described in the appointment order itself. Violation of any service condition entails disciplinary action against a Workman. Allotment of quarter cannot be said to be a service condition inasmuch as it is not provided to all the employees of the Management. Allotment of quarter is governed by a set of Rules of the Management. It primarily depends upon availability as well as entitlement of the Workman as per the established procedure under the Rules for such allotment. Thus, charges on the heads of allotment and use of the quarter, like rent, electricity, water or conservancy charges etc. cannot be said to be a service condition of a Workman/employee. Non-compliance of the conditions of allotment order of a quarter by an employee does not entail any disciplinary proceeding against him. It is optional for the Workman to occupy a quarter, if allotted by the Management. 14. Learned Counsel for the opposite party No.3 referring to Clause (1) of fourth Schedule of I.D. Act submitted that enhancement of electricity charges amounts to reduction of wages as the electricity charges in respect of the quarters in occupation of a workman, is deducted from his wages at the end of the month. Thus, notice under Section 9-A of the I.D. Act was inevitable before such change in the wages was given effect to. The “wages” as defined under Section 2 (rr) is as follows : “2(rr). Thus, notice under Section 9-A of the I.D. Act was inevitable before such change in the wages was given effect to. The “wages” as defined under Section 2 (rr) is as follows : “2(rr). “wages” means all remuneration capable of being expressed in terms of money, which would, if the terms of employment, expressed or implied, were fulfilled, be payable to a workman in respect of his employment or of work done in such employment, and includes – (i) such allowances (including dearness allowance) as the workman is for the time being entitled to; (ii) the value of any house accommodation, or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of food-grains or other articles.....” (emphasis supplied) 15. As discussed earlier, allotment of quarter is always subject to availability and entitlement of a Workman. The charges for such occupation including the electricity charges are governed under the House Allotment Rules of the Management. Allotment of a quarter by the Management is neither expressly or impliedly provided in the terms and conditions of appointment. Thus, house rent, electricity charges etc. cannot form a part of wages. It has also been made clear in the letter of appointment that in the event of a quarter having been allotted to the Workman, he would be liable to pay rent and electricity charges etc. in respect of the quarter according to the Rules of the company in force from time to time. As opted for, the electricity charges are being deducted from the wages of a Workman in terms of the order of allotment of the quarter, who can only assume the status of a licensee to occupy the quarter. The Workman allotted with a quarter being a licensee cannot claim such charges to be part of wages even if, house rent and electricity charges deducted from his wages. 16. On perusal of the oral as well as documentary evidence on record, it is clear that the Workmen of RSP were required to pay electricity charges at a higher rate than the rate of supply of electricity by OSEB. It is only for two years, i.e. in between 1979 to 1981, the charges for supply of electricity become equal or higher than the rate of electricity charges imposed upon the workmen of RSP. It is only for two years, i.e. in between 1979 to 1981, the charges for supply of electricity become equal or higher than the rate of electricity charges imposed upon the workmen of RSP. Further, the petitioner-Management in its written statement has clearly provided that details of the electricity duty being paid by the Management to OSEB. Documentary evidence in support of the same has also been filed, which reveals a clear picture that the Workmen were never supplied electricity at a concessional rate. This vital aspect has been completely brushed aside by learned Tribunal. The Workmen although claimed that the electricity to their quarters was being supplied at a concessional rate, no document/material in support of the same has been filed by the Workmen. Thus, by no stretch of imagination, the electricity charges can ever be said to be customary concession or privilege or usage. Consequently, the provisions of Section 9-A of the I.D. Act is not attracted in the present case. 17. In that view of the matter, learned Tribunal has committed an error of law in holding that enhancement of electricity charges adversely affects the service condition and/or wages of the Workmen. 18. In the result, this writ petition succeeds. The impugned award under Annexure-1 is set aside. S. PANDA, J. I agree. Petition succeeds.