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Banaras Electric Light and Power Co. Ltd. Vs. Government of Uttar Pradesh and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtAllahabad High Court
Decided On
Judge
Reported in(1962)ILLJ14All
AppellantBanaras Electric Light and Power Co. Ltd.
RespondentGovernment of Uttar Pradesh and ors.
Excerpt:
- - 1, it was observed toy their lordships of the supreme court that, the old principle of absolute freedom of contract and the doctrine of laissez faire have yielded place to new principle of social welfare and common good. but i see no good reason for departing from the view taken by me previously in j......between the parties.6. sri k.p. agrawal appearing for s.p. srivastava, however, relied upon standing orders of this concern. clause (20) of the standing orders runs thus:the company has at all times a general right to discharge an employee from service not only for proved misconduct but also when the employer has lost confidence in the employee. provided that an employee before being discharged, under the standing order shall be given a charge-sheet and an opportunity to explain the charges made against him.7. no charge-sheet was drawn up against s.p. srivastava before his service was terminated in november 1958. sri agrawal, therefore contended that the discharge from service was in contravention of clause (20) of the standing orders.8. it will be noticed that, the agreement.....
Judgment:

V.G. Oak, J.

1. This writ petition is directed against an award of the labour court, Gorakhpur.

2. Banaraa Electric Light and Power Company, Limited, Bhelupura, Varanasi, is the petitioner. It is a public limited company. S.P. Srivastava, who is opposite party 4 in the writ petition, was an employee of the company. He was employed under a written agreement, dated 11 July 1956. Under that written agreement, each party was entitled to terminate the contract of service by giving one month's notice to the other party. In December 1956, a sum of Rs. 200 and odd was wrongly paid. The company made over the case to the police. The police made Investigation, and gave a report casting suspicion upon Srivastava. On 27 November 1958, the management passed an order terminating Srivastava's services with effect from 1 December 1958.

3. The workmen' of the company took up Srivastava's cause, and raised an industrial dispute complaining that Srivastava's discharge from service was wrongful and unjustified. The State Government referred this question to the labour court, Gorakhpur, for decision. The labour court concluded that S.P. Srivastava's discharge from service was wrongful and unjustified. The labour court, therefore, decided that S.P. Srivastava should be reinstated in service, and should be paid full wages from the date of discharge up to the date of reinstatement. This writ petition by the company is directed against the labour court's award, dated 8 October 1959.

4. It was urged for the company that, S.P. Srivastava was not a workman under the Uttar Pradesh Industrial Disputes Act, 1947; so the matter in controversy could not be treated as an industrial dispute. 'Workman' has been defined in Clause (z) of Section 2 of the Uttar Pradesh Industrial Disputes Act, 1947. According to that definition an employee is a workman, unless his case falls under certain exceptions. Exception (iii) is that the employee must not be employed mainly in a managerial or administrative capacity. The fourth exception is that, the employee's salary must not exceed Rs. 500 per mensem. The labour court considered the nature of duties of S.P. Srivastava. It was found that his duties were not mainly in a managerial or administrative capacity. Under the agreement, dated 11 July 1956, the salary was Rs. 310 per mensem only. So the case was not covered by either exception (iii) or by exception (iv) of Clause (z) of Section 2 of the Act. It may be that S.P. Srivastava was not initially a workman as defined by the Act. But the definition of workman was subsequently amended. According to the definition as it stood on 27 November 1958, S.P. Srivastava was a workman as defined by the Act.

5. The main contention of Sri R.S. Pathak appearing for the petitioner was that the labour court was wrong in not giving full effect to the agreement between the parties. Clause (7) of the agreement, dated 11 July 1956 provided for termination of service. Clause (7) has been quoted in Para. 4 of the affidavit. The material portion of Clause (7) of the agreement ran thus:

At any time during the currency of this agreement, the company shall be entitled to terminate the assistant's engagement (without assigning any reason) by giving one month's notice or in lieu thereof by making payment of one month's salary to the assistant.

Annexure B to the petition is a copy of the order, dated 27 November 1958, terminating S.P. Srivastava's services. That order ran thus:

We hereby terminate your engagement under the provisions of Clause 7 of your service agreement with effect... and advise that you thereafter cease to be in the employment of this company.

You are entitled to one month's salary in lieu of notice, and we are, therefore, enclosing a cheque for Rs. 429.60 nP in full settlement of all your dues including one month's salary..

It will be seen that this order terminating S.P. Srivastava's service was in conformity with the agreement between the parties.

6. Sri K.P. Agrawal appearing for S.P. Srivastava, however, relied upon standing orders of this concern. Clause (20) of the standing orders runs thus:

The company has at all times a general right to discharge an employee from service not only for proved misconduct but also when the employer has lost confidence in the employee. Provided that an employee before being discharged, under the standing order shall be given a charge-sheet and an opportunity to explain the charges made against him.

7. No charge-sheet was drawn up against S.P. Srivastava before his service was terminated in November 1958. Sri Agrawal, therefore contended that the discharge from service was in contravention of Clause (20) of the standing orders.

8. It will be noticed that, the agreement between the parties and the standing orders make different provisions as regards termination of service. The question arises which of these provisions ought to have been applied in the instant case?

9. In N.J. Chavan v. P.D. Sawarkar 1958-I L.L.J. 36, it was observed on p. 40 that

It is the duty of an industrial court or tribunal to modify the contractual rights and obligations if it becomes necessary to do so in the light of industrial legislation and legal decisions relating thereto.

10. In Crown Aluminium Works v. Their workmen 1958--I L.L.J. 1, it was observed toy their lordships of the Supreme Court that, the old principle of absolute freedom of contract and the doctrine of laissez faire have yielded place to new principle of social welfare and common good.

11. These decisions merely lay down the principle that, in a proper case, a labour court may grant relief to a party to an industrial dispute, notwithstanding a contract between the parties. These decisions do not lay down a proposition that labour courts should ignore such private contracts between parties altogether.

12. In Rashtriya Mill Mazdoor Sangh v. Apollo Mills, Ltd. 1960--II L.L.J. 263, it was observed on p. 271 that

social justice is not based on contractual relations and is not to be enforced on the principle of contract of service. It is something outside this principle, and is invoked to do justice without a contract to back it.

13. In Assam Oil Co. v. Its workmen 1960--I L.L.J. 587, it was held that, the jurisdiction of industrial tribunals to direct reinstatement of a discharged or dismissed employee is no longer in doubt. That being the nature and extent of the jurisdiction of the industrial tribunal, it is too late now to contend that the contractual power of the employer to discharge his employee under the terms of the contract cannot be questioned in any case. If the contract gives the employer the power to terminate the services of his employee after a month's notice or subject to some other condition, it would be open to him to take recourse to the said term or condition and terminate the services of his employee. But when the validity of such termination is challenged in an industrial adjudication, it would be competent to the industrial tribunal to inquire whether the impugned discharge has been effected in the bona fide exercise of the power conferred by the contract.

14. In the present case the labour court did not interfere with the order of discharge on the ground of mala fides. The labour court thought that, in view of the standing orders, the special contract between the parties could not be enforced.

15. In Behar Journals, Ltd. v. Ali Hassan 1959--II L.L.J. 536, it was held that certified standing orders of a concern have statutory force. Under such standing orders there is a statutory contract between the employer and the workman of the concern. It is not, therefore, possible in law for the parties to enter into a contract overriding the statutory contract as embodied in the certified standing orders, and any contract contrary to the said orders must be ignored. In face of the standing orders, the employer cannot appoint the workman on conditions of service different from those defined in the standing orders without a modification of the standing orders themselves.

16. It will be noticed that in the present case we are dealing with conflicting provisions in the standing orders and special contract between the parties. The same question came up for consideration before ma in J.K. Cotton Manufacturers v. J.N. Tewari : AIR1959All639 , in that case I observed on p. 642 thus:

It is true that standing orders lay down the conditions of employment. But it does not follow that conditions of employment cannot be laid down in any other manner..I do not find any provision prohibiting written agreements. So, in spite of Act XX of 1946 and standing orders framed under the Act, it is open to an employer and an employee to enter into a special contract. Standing orders lay down general conditions of employment. A certain agreement may contain special terms of service. In the case of a conflict between the general conditions of employment contained in standing orders and the special terms contained in the written contract, the terms of special contract will prevail.

17. It may be conceded that, it is not open to parties to enter into an agreement in contravention of the provisions of a statute. It is true that standing orders are framed under Act XX of 1946. But it would be difficult to hold that standing orders by themselves have the same force as a statute. Standing orders differ from Industry to industry. They may be modified from time to time as provided in Act XX of 1946. So standing orders framed under Act XX of 1946 are nothing tout terms of conditions of service in the business concerned. Such standing orders lay down the general conditions of service. It would be open to an individual employee to enter into a special contract with the employer. Such special contracts have not been prohibited by Act XX of 1946.

18. The question of conflict between special contract and standing orders is not free from difficulty. But I see no good reason for departing from the view taken by me previously in J.K. Cotton . case : AIR1959All639 (supra). I therefore, hold that, as between the special agreement between the parties, dated 11 July 1956 and Clause (20) of the standing orders, the former should prevail.

19. As already pointed out, the labour court did not interfere on the ground of lack of bona fides. The labour court interfered simply on the ground that, in view of the standing orders, the special agreement could not be enforced. The question how far industrial authorities can interfere with private contracts was discussed by their lordships of the Supreme Court in Rohtas Industries, Ltd. v. Brijnandan Pande and Ors. 1956--II L.L.J. 444, their lordships observed on p. 449:

The courts reach their limit of power when they enforce contracts which the parties have made. An industrial tribunal is not so fettered and may create new obligation or modify contracts in the interests of industrial peace, to protect the legitimate trade union activities and to prevent unfair practice or victimization.

In the present case there was no question of protecting legitimate trade union activities. Nor was this a case of unfair practice or victimization. The labour court, Meerut, had, therefore, no Jurisdiction to interfere with the order of the petitioner terminating the services of opposite party 4.

20. Sri K.P. Agrawal contended that, if the order terminating service was based on the short ground of lack of confidence, it was a case of retrenchment. It was contended that the order of retrenchment was not passed, as laid down in Section 6N of Uttar Pradesh Industrial Disputes Act, 1947.

21. The term 'retrenchment' has been defined in Clause (s) of Section 2 of Uttar Pradesh Act XXVIII of 1947. Retrenchment means the termination by the employer of the service of a workman for any reason whatsoever otherwise than as a punishment inflicted by way of disciplinary action. At first sight it would appear that the order, dated 27 November 1958, was an order of retrenchment as defined by Clause (s) of Section 2 of Act XXVIII of 1947. But the true meaning of retrenchment was explained by their lordships of the Supreme Court in Hari Prasad v. A.D. Divelkar 1957-I L.L.J. 243:

Retrenchment as defined in Section 2(oo) and as used in Section 25F of the Central Act XIV of 1947, has no wider meaning than the ordinary accepted connotation of the word. It means the discharge of surplus labour or staff by the employer for any reason whatsoever otherwise than as a punishment inflicted by way of disciplinary action, and it has no application where the services of all workmen have been terminated by the employer on a real and bona fide closure of business or where the services of all workmen have been terminated by the employer on the business or undertaking being taken over by another employer.

22. It is true that in Hari Prasad case 1957--I L.L.J. 243 (supra), the Supreme Court was dealing with the question whether a case of total closure of business is a case of retrenchment. That is not the position in the present case. But in Hari Prasad case 1957--I L.L.J. 243 (supra), their lordships explained the significance of the term 'retrenchment.' The term 'retrenchment' necessarily implies discharge of surplus labour or staff. It is true that the term 'retrenchment' as defined in Central Act XIV of 1947 was being discussed in Hari Prasad case 1957--I L.L.J. 243 (supra). But Central Act XIV of 1947 and Uttar Pradesh Act XXVIII of 1947 contain similar definitions of the term 'retrenchment.' So the discussion in Hari Prasad case 1957--I L.L.J. 243 (supra) will also govern the interpretation of the term 'retrenchment' as defined by Uttar Pradesh Act XXVIII of 1947.

23. The affidavits filed by the parties make it clear that S.P. Srivastava was not discharged by the petitioner on the ground that his post became superfluous. His services were terminated on the ground that the management entertained suspicion about his conduct, and had no confidence in him. This was not, therefore, a case of retrenchment at all. In the first place, the question of retrenchment was not raised before the labour court, Gorakhpur. Secondly, as explained above, S.P. Srivastava's discharge did not involve any retrenchment. So the question of granting any relief under Section 6N of the Act did not arise.

24. S.P. Srivastava's services were terminated in accordance with the agreement between the parties. This was not a case of victimization or lack of bona fides. The labour court had, therefore, no jurisdiction to interfere with the order terminating the services of opposite party 4. Since the labour court acted without jurisdiction, the award is liable to be quashed by issuing a writ of certiorari.

25. The petition is allowed. The award of the labour court, Gorakhpur, dated 8 October 1959, is quashed. The petitioner will get his costs from opposite party 4.


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