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CochIn Shipyard Limited Represented by Its Deputy General Manger Vs. the Government of Kerala Represented by Secretary to Government Department and Others - Court Judgment

LegalCrystal Citation
CourtKerala High Court
Decided On
Case NumberO.P.No.28234 of 2002 (J)
Judge
Reported in2011(3)ILR(Ker)904; 2011(4)KLJ276; 2011(4)KLT796; 2011(3)KHC716
AppellantCochIn Shipyard Limited Represented by Its Deputy General Manger
RespondentThe Government of Kerala Represented by Secretary to Government Department and Others
Excerpt:
1. validity of rule 5 of the kerala factories (welfare officers) rules 1957 (hereinafter referred to as the rules) is under challenge. contention is that the same is beyond the rule making power of the state and hence ‘ultra vires’. the petitioner also seeks to set aside the incidental steps taken alleging violation of the relevant rules with regard to the appointment of welfare officers in the petitioner company and the steps proposed to have prosecution proceedings. 2. the petitioner is a government company owned by the central government, coming within the purview of sec.617 of the indian companies act, 1956. it is a ‘factory’ as well, as defined under the factories act employing nearly 2300 workers. by virtue of the mandate under section 49 of the factories.....
Judgment:

1. Validity of Rule 5 of the Kerala Factories (Welfare Officers) Rules 1957 (hereinafter referred to as the Rules) is under challenge. Contention is that the same is beyond the rule making power of the State and hence ‘ultra vires’. The petitioner also seeks to set aside the incidental steps taken alleging violation of the relevant rules with regard to the appointment of Welfare Officers in the petitioner Company and the steps proposed to have prosecution proceedings.

2. The petitioner is a Government Company owned by the Central Government, coming within the purview of Sec.617 of the Indian Companies Act, 1956. It is a ‘Factory’ as well, as defined under the Factories Act employing nearly 2300 workers. By virtue of the mandate under Section 49 of the Factories Act, every Factory wherein five hundred or more workers are ordinarily employed, the Occupier shall employ in the Factory such number of Welfare Officers as may be prescribed. Sub-section(2) of Section 49 says that the State Government may prescribe the Duties, Qualifications and Conditions of service of the officers employed under sub-section (1).

3. By virtue of the powers conferred on the State, under Sections 49, 50 and 112 of the Factories Act, the Government of Kerala has formulated the Kerala Factories (Welfare Officers) Rules, 1957, prescribing the number of Welfare Officers to be appointed as given under Rule 3. Rules 4, 6 and 7 deal with Qualifications for appointment, Conditions of service and Duties; while Rule pertains to the Recruitment of Welfare Officers. As per Rule 5, the post of a Welfare Officer shall be advertised in any two prominent News Papers of the State and the selection shall be made from among the candidates applying for the post, by a Committee appointed by the occupier of the Factory, followed by appointments to be notified by the occupier to the chief Inspector of Factories giving full details of the qualification, age, pay, previous experience and other relevant particulars of the officer appointed and the terms and conditions of his service.

4. The case of the petitioner Company is that the petitioner has already appointed two persons as Welfare Officers, who are stated as duly qualified, after advertising in ‘three dailies’ such as Indian Express, Hindu and Malayala Manorama, inviting applications for initial appointment as ‘Executive Trainees’. The fact that the persons concerned were originally appointed as ‘Executive Trainees’ stands conceded. In response to the said advertisement, several applications were received and selection was made pursuant to the Written test, Group discussion and Interview. The concerned two persons, who were having all the requisite qualifications as prescribe under Rule 4 of the Rules were selected and appointed initially as ‘Executive Trainees’ and later, as Welfare Officer and Asst. Welfare Officer respectively. The said persons by name M.D. Varghese and A.K. Subhash (as revealed from ExtP3 letter/reply of the petitioner dated 25.03.1999 addressed to the first respondent) however, are not before this Court.

5. The issue popped up for the first time, when the third respondent conducted an inspection in the premises of the petitioner on 12.03.1998, followed by Ext. P1 proceedings, referring to violation of the relevant rules with regard to appointment of Welfare Officers in the petitioner Factory, asking to comply with the provisions and to report within seven days. It is stated that the petitioner furnished the details of appointment stating that the same was effected in conformity with the statutory prescriptions and that there was no violation at all. However, the first respondent issued Ext.P2 proceedings dated 09.03.1999, based on the inspection report submitted by the third respondent, observing that the two posts of Welfare Officers were lying vacant in the petitioner Factory and directed to effect recruitment of qualified persons as stipulated in the relevant rules.

6. On receipt of Ext.P2, the petitioner submitted Ext. P3 reply dated 25.03.1999, wherein particulars of the persons appointment as Welfare Officers were clearly shown and sought to drop all further proceedings. Similar particulars were furnished to the third respondent as well, in response to the proceedings issued in the regard. However, the third respondent issued Ext. P5 dated 05.10.2000, pointing out that the concerned officers by name M.D. Varghese and A.K. Subhash were appointed not in accordance with the Rules by advertising in two leading Newspapers and hence the posts of Welfare Officers were to be re-notified; simultaneously making it clear that the above persons were also eligible to apply. In response to Ext. P3 preferred by the petitioner, the first respondent issued Ext.P6 dated 16.10.2000, pointing out that, though the qualifications, status and service conditions of the Welfare Officers by name M.D. Varghese and A.K. Subhash appointed by the petitioner were as per the relevant provisions, Rule 5(1) of the Kerala Factories (Welfare Officers) Rules 1957, specifically stipulated that the post of Welfare Officer was to be advertised in two prominent Newspapers of the State, which aspect was not compiled with by the petitioner and that the appointments were not liable to be treated as valid appointments. The petitioner was, in turn, directed to take immediate steps to effect proper appointments in accordance with the Rules, after advertising the posts in two leading Dailies. Eventhough the petitioner submitted an application for ‘exemption’, (based on the power conferred on the Government to relax the norms as per Rule 8 of the Rules), it was turned down by the first respondent as per Ext. P7 proceedings dated 22.07.2002, which made the petitioner to approach this Court challenging the impugned proceedings and also questioning the validity of the ‘Rule 5’ of the Rules.

7. The first respondent has filed a counter affidavit referring to the relevant provisions of the Factories Act/Rules and as to the scheme of the Statute. Issuance of the relevant proceedings by the concerned respondents has been sought to be justified, referring to the admission of the petitioner that the officers stated as holding the posts of Welfare Officers were initially appointed as ‘Executive Trainees’, which notification cannot be treated as an advertisement for appointment of the “Welfare Officers” as per the Rules. It is also stated that the post of Welfare Officer in the factory is a statutory post and there is no provision in the Rules for “Transfer appointment” from internal candidates. With regard to the challenge against the ‘rule making power’ of the State, it is stated that the power is vested with the Sated as given under Sections 49 and 50 of the Factories Act enabling the State to make Rules regarding Duties, Qualifications and Conditions of service, etc of the Welfare Officers in the Factories, and for granting Exemption besides the ‘General power’ under Section 112 to make Rules providing for any matter, under any of the provisions of the Factories Act. It was in exercise of the above powers, that the Kerala Factories (Welfare Officers) Rules were formulated by the Government and as such, Rule 5 of the Rules is very much within the ‘rule making power’ of the State and that the challenge has to fail.

8. Mr.M. Pathrose Mathai, the learned Sr. Counsel for the petitioner Company/Factory submits that there is not much factual dispute with regard to the sequence of events. It is admitted that appointment to the post of Welfare Officer has to be effected in tune with the mandate under Section 49 of the Factories Act and in accordance with rules 4,6 and 7 governing the Qualifications, Conditions of service and Duties, to be performed by such Welfare Officers. The learned Counsel submits that the petitioner is engaging nearly 2300 workers and hence two Welfare Officers are to be there, as prescribed under Rule 3 of the Rules, which stipulation stands satisfied. It is also stated that there is no case for the respondents that the persons appointed as Welfare Officers do not have the requisite qualification to hold the post. There is also no dispute that they came to be appointed in the petitioner Company through some other means than by way of advertisement and selection. It is asserted that the concerned incumbents were initially appointed as ‘Executive Trainees’ after notifying the same through wide advertisements given in three dailies, viz, Hindu, Indian Express and Malayala Manorama. Pursuant to this, a number of candidates participated in the process of selection, involving Written test, Group discussion and Interview. It was after ascertaining the merit and mettle of each person, that the concerned persons were selected to be appointed as ‘Executive Trainees’ and later, by virtue of their qualification as prescribed under Rule 4, designating them as Welfare Officer/Assistant Welfare Officer, which hence is stated as not liable to be interfered.

9. With regard to the challenge on the question of law, particularly validity of Rule 5, the learned Counsel submits that the power vested with the Government under sub section (2) of Section 49 of the Act to formulate the Rules is only in respect of the “Duties, Qualifications and Conditions of service” and nothing more. This being the position, there is absolutely no power to have prescribed anything with regard to the ‘Recruitment’ as stipulated in Rule 5, which is stated as beyond the ‘rule making power’ and hence to be set aside as ultra vires to the Act. Reliance is also sought to be placed on the decision rendered by the Apex Court in KeralaSamsthana Chethu Thozhilali Union vs. State of Kerala [(2006) 4 SCC 327], which however is sought to be distinguished by the learned Government Pleader, who asserts that, as discernible from the 1957 Rules, they have been brought out by virtue of the power vested under Sections 49, 50, 112 of the Factories Act.

10. Sections 49, 50 and 112 as mentioned above read as follows:

“49. Welfare officers:- (1) In every factory wherein five hundred or more workers are ordinarily employed the occupier shall employ in the factory such number of welfare officers as may be prescribed.

(2) The State Government may prescribe the duties, qualifications and conditions of service of officers employed under sub-section (1).

50. Power to make rules to supplement this Chapter:- the State Government may make rules—

(a) exempting subject to compliance with such alternative arrangements for the welfare of workers as may be prescribed, any factory or class or description of factories from compliance with any of the provisions of this Chapter.

(b) requiring in any factory or class or description of factories that representatives of the workers employed in the factory shall be associated with the management of the welfare arrangements of the workers,”.

“112. General power to make rules:- The State Government may make rules providing for any matter which, under any of the provisions of this Act, is to be or may be prescribed or which may be considered expedient in order to give effect to the purpose of this Act.

11. With regard to the Qualifications, Conditions of service and Duties of Welfare Officers, as stipulated under Rules 4, 6 and 7, there is no dispute at all. Coming to Rule 5, pertaining to ‘Recruitment’ of Welfare Officers. it reads as follows:

“5. Recruitment of Welfare Officers:- (1) The post of a Welfare Officer shall be advertised in any two prominent news papers of the State.

(2) The selection shall be made from among the candidates applying for the post by a Committee appointed by the occupier of the factory.

(3) The appointment when made shall be notified by the occupier to the Chief Inspector of Factories giving full detail of the qualification, age, pay, previous experience and other relevant particulars of the officer appointed and the terms and conditions of his service.’’

It is no doubt, settled that the source of power to formulate the Rules should be traceable to relevant provisions of Act/Constitution enabling such exercise, but for which, it is liable to be declared as ultra vires as held by the Apex Court in [(2006) 4 SCC 327] (cited supra). It is true, while framing the Rules, for the purposes of the Act, the legislative policy cannot be abridged. So also, a Rules is not only required to be made in conformity with the provisions of the Act whereunder it is made, but the same must also be in conformity with the provisions of any other Act, as a subordinate legislation cannot be violative of any plenary legislation made by the parliament or the State Legislature. But, here the question is different. In so far as the source of power is stated as traceable to Sections 50 and 112 of the Factories Act as well, besides the scope and power as provided under sub section (2) of Section 49, whether the method of recruitment as stipulated under ‘Rule 5’ is referable to anything in connection with the Conditions of service of the officers employed under sub section (2) of Section 49 is the point.

12. It is very much relevant to note that the post of Welfare Officer in a Factory covered under the Factories act holds a key position. The scheme of the statute is such that the Welfare Officer is never to act/function as a Manager of the Establishment/Factory; but a person, who is entrusted with the specific task of the welfare of the work force. Chapter V of the Factories Act deals with the welfare measures; such as washing facilities (as provided under Section 42); Facilities of storing and drying clothing (under Section 43); Facilities for sitting (under section 44), First aid appliances(under section 45); Canteens (under Section 46); Shelters, Rest rooms and Lunch rooms (under Section 47) and Creshes (under Section 48). It is to give effect to the said provisions in the most effective and desired manner, that appointment of Welfare Officer is stipulated under Section 49, vesting the authority on the State Government to prescribe the Duties, Qualifications and Conditions of service of the said officers. It is with this object in mind, that the State of Kerala has enunciated ‘Rule 7A’ of the Kerala Factories (Welfare Officers) Rules, 1957 providing that No Welfare Officer shall deal with any disciplinary case against a worker or appear before a Conciliation Officer, Arbitrator or in a Court or Tribunal on behalf of the factory management against a worker or workers (Rule 7A was inserted by Notification dated 15.11.1965 published in Kerala Gazette dated 30.11.1965). The ‘general rule making power’ under section 112 of the Act, enables the State to make rules providing for any matter, which, under any of the provisions of this Act is to be or may be prescribed, or which may be considered expedient in order to give effect to the purpose of this Act. This being the position, it is always for the State, as to how the service of Welfare Officers is to be made available, besides providing for Qualifications, duties and Conditions of service and terms of employment. It is accordingly, that the post is insisted to be advertised in any two prominent Newspapers in the State; that selection shall be made by a Committee appointed by the Occupier of the Factory and that such appointment, when made, shall be notified by the Occupier to the Chief Inspector of Factory, giving full details of the incumbents’ age, pay, previous experience and other relevant particulars of the officer appointed and the terms and conditions of service. This shows the intent as to the object to be achieved in appointing ‘Welfare Officers’, as provided in the Act.

13. The scope of ‘rule making power’ of the State under Section 49(2) had come up for consideration before a Constitution Bench of the Supreme Court in Associated Cement Companies Ltd. vs. Sharma(P.N.) and another, reported in 1965(1) LLJ 433. One of the issues involved was, whether Rule 5(3) and the ‘second proviso’ thereto, of the Punjab welfare Officers (Recruitment and Conditions of Service) Rules, requiring the management to have the concurrence of the Commissioner of Labour, before imposing any punishment (other than censure) on its Welfare Officer, was valid and within the rule making power of the State under Section 49(2) of the Act. After discussing the scope and extent of the relevant provisions, it was held by the Apex Court that the words “conditions of service” used in Section 49(2) of the Factories Act are wide enough to cover the ‘second proviso’ to Rule 5(3) of the Punjab Welfare Officers (Recruitment and Conditions of Service) Rules, 1952. It was observed as follows:

“Under what conditions an employee’s service can be terminated and subject to what conditions of service, could well be the subject matter of a contract of employment, because conditions of service would take in the termination of services and incidentally the conditions subject to which such termination could be brought about. The object of conferring on the State Government the power to frame rules in this behalf obviously is to afford special protection to welfare officers appointed under Sec.49(1) of the Act”.

The Apex Court further held that, if the State Government was of the opinion that the best way to secure security of tenure to such officers was to require that they should not be dismissed or otherwise punished without obtaining the consent of the Labour Commissioner as required by the ‘second proviso’ to aforesaid Rules, it would be difficult to hold that the Rule made by the State Government in that behalf is not justified by the power conferred on it by Section 49(2).

14. The above observations are applicable with equal force to the case on hand, as well. While prescribing the Qualifications, Conditions of service and Duties of Welfare Officers under Rules 4, 6 and 7 respectively, the State of Kerala, as a prudent Legislator, also wanted to see that the provisions are duly given effect to by the concerned Management/Factories, which is the intention behind the stipulation to have the post advertised in any two prominent Newspapers of the State and to carry out selection through a Committee; casting further obligations on the occupier of the Factory to communicate the appointment, as and when effected, to the Chief Inspector of Factories giving full details of the qualification, age, pay, previous experience and other relevant particulars of the Officer appointed and the terms and conditions of his service. This being the position, this Court finds that the stipulation under Rule 5 of the Rules is of course within the rule making power of the State, in view of the source of power as traceable to Sections 49, 50 and 112 of the Factories Act. The challenge raised against the validity of the rule fails and it is rejected accordingly.

15. With regard to the residual issue, it remains an admitted fact that the appointment of Mr.M.D. Varghese and Mr.A.K. Subhash, who are stated as holding the posts of the two ‘Welfare Officers’ in the petitioner’s establishment, was by way of initial appointment as ’Executive Trainees’ after notification in three different dailies. It is stated that such appointment of Executive Trainees in the Public Sector Undertakings is effected in tune with directives issued by the Central Government (the petitioner Company being a Central Government Company). In other words, it is an undisputed fact that the post of ‘Welfare Officer’, as such, was not advertised before conducting the selection and appointment. When the Rule says, the manner of appointment, it has to be effected in that particular manner and it is not open for the petitioner/Management to contend that it can promote or fill up the vacancy by transfer of the duly qualified candidates; though the latter group can also take part in the contest. This is for the plain reason that mere possession of qualification is not enough and since the authority of Rule 5 has been upheld, it has necessarily to be in turn with the method of recruitment as well. As such, this Court finds that the course pursued by the petitioner is not correct or proper.

16. However, there is no case for the respondents that the present incumbents holding the post of Welfare Officers are not qualified to hold the posts. The credentials of the said persons stand admitted, as conveyed by the first respondent vice Ext. P6 as well and the dispute is only with regard to the non-advertisement of the posts in the Newspapers as prescribed. But, since the concerned officers are holding the posts of Welfare Officer/Assistant Welfare Officer from the year 1991/1999 onwards and further since they are not parties to the present original petition, this Court does not find it necessary to tilt the balance at this distance of time; more so, when the first respondent/State is very much conferred with the power to give ‘Exemption’ as provided under Rule 8 of the Rules. Though the ‘Exemption’ sought for by the petitioner was rejected as per Ext.P6, this Court finds it as a fit case, where the petitioner could be given exemption as a ‘one time measure’ in so far as the present incumbents are concerned, however, making it clear that, it will never be treated as a precedent.

17. In the above facts and circumstances, interference is declined and the Original Petition is dismissed with regard to the challenge raised against Rule 5 of the Rules; however, making it clear that the present incumbents, who are holding the posts in question, being qualified and appointed from 1991/1999 respectively, can continue as per the terms of appointment and in accordance with law. Future vacancies of ‘Welfare Officers’ shall be filled up by the petitioner, strictly in accordance with Rule 5 and other statutory prescriptions.


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