AGRA ELECTRIC SUPPLY CO. LTD. versus SRI ALLADIN & ORS.

AGRA ELECTRIC SUPPLY CO. LTD. v. SRI ALLADIN & ORS. A 11g11sr J 2, 1969 [J. M. SHELAT A!'D C. A. VAIDIALl:\GAM, JJ.]

J11du11rial E111ploy111e.111 (Stn11ding Orders) Act (20 of 1946)-Stand ing Ordtr.r certified under Acr-Whe1Jrer applicable to H'Orkmen employ- ed bej('re such cer1ificatio11.

Termination of service d11ri11g probation-Real basis 1nisconducr Order worded as si1nple tern1i11a1ion-Power of Labour Court to go be hind and asc~rtain real basis.

Prior to 1951 there were no rules or conditions of service prescribing In 1951, its Stand- the age o! supc(annuation in the appellant-Company. ing Ordtrs were ccrtilied under the Industrial EmployQ!Cnt (Standing Orders) Act, 1946, and were brought into force. Standing Order 32 pro vided 5~ years as !he age of supcran1ioation. 'fhe first three respondents were workmen employed in the Company in 1929, 1935 and 1937. Re lying on Standing Order 32 the Company served notices on these 3 \\'Ork ruen who had :tttained the <iges of 58. 64 and 59 on the dates of the f(.-s pcctive notices, and rc-lircd them. ·1ne Labour Court, to which the dispute arising from such rc1ircn1ent \Vas referred, held that the Standing Orders having he.en certified long after these \\'Orkmen \Vere employed and the condition, or their employment not having provided any age of retiretnent, the Company could not apply Standing Order 32 to them, that the orders of retirement on the ground or superannuation were h;1d and gave con.<>e· quential directions.

·rhe Company appointed the 4th respnndcnt in I>ccember 1965 as a cleaner. The lctt~r Clf appointment staled that he v.·as to be a probationer for 6 months v.:ith discretion to the concerned officer to c~tend the period. The letter also stated that during the probationary period his servicf" ":as liable to termination \Vilhout any notiee and without as..c;igning any H:aions 1966. Before the therefor. His service \\'as tern1inatcd Labour Court evidence \\'ac; led on bchalr df the Management that the work.man's service v.•as terminated becauc;c his v.·ork as probationer was unsatisfactory. The L1hour Court found on the evidence heforc it that the real reason for pas<jing: the impugned order of termination wa-; not the alleged unsatisfnctory work but his having unauthorisedly used a motor· cycle belonging to an engineer of the Con1pany and caused <lamag.: to it. to Jn that viev.•, the Labour Court held that terminate vt'as not bnnn fide and consequently set aside that order also.

the exercise of the power

in February

Jn appeal to thi<; (',.ourl,

HELD: (1) (a) The Act provides that every employer o'{ an indus trial e&tablishmen: must have his Standing Orders certified, that the Stand· ing Order' should be submitted t0 the certifying authority along wi1h particulars of all the W(lrkmen then employed as also the name of 1h:- 11nion if any. to \\·hich they belong, that the certifying authority should f!ive notice to the union, and in ilc; absence, to the workmen to make their ohjection5 and an op1l0rtunity to the employer and the rcpre<;cntatives of 1hc workntcn for heing heard. that the authority c;hould thereafter adjudi· <:ate upon the rairncc;s and rcasonahlencs,.; of the Standing Orders submit-

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AGRA ELECT. SUPPLY CO. v. ALLAD!N

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ted, that the authority should certifY the-Standing Orders wjth. modilica tioni or additions if any, that any person aggrieved, by such certification· may appeal to the appellate authority, that the Standing Orders as fi.na1ly certified come into operation on a particular day, that the ..... employer should publish them on notice boards in such a manner that they become ,Casily known to the workmen, and that, after the_ expiry Of 6 months• froin, the_ date on which the Standing· Orders or the last modification. came into operation, either the employer or any of the workmen could apply for a mOdification. These provisions that once the Standing Qrders ~S, certified come into operation, they become binding._ on the empJoyer· as well as all the woi-kmen presently enzployed_ and those employed- there- aftei in the, establishment, as 4 uiliform conditions of.._ service. If. th~ Stan~~!· in:· OrdeIS were to bind only those who are subsequently employ.ed, ,tn~· . r«;,ult ·would be that there would be ,different.,copditions Of employmen\ " for different classes of workmen, depending on whethe;r the workmen .; we_rc employed before or cifter the certification of the standing~,Orders or·: .• a inodifi.catiqn of" such Standing Orders, and would render ·'th~. principle ~- 'r of.i;:Ollective bargaining ineffective. Such·-a result WoWd·renQCf the' con-<"" ditions df servlce of workmen as indefinite ,and div~rsified 'as befo!e the'" enacJment qf the 'statute though it was to do away with iuc6: diverSity tllat tile Act was passed. [812 D-H; 813 A-D; 814 A-El

show

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Salem Erod~ Electficity Distribution Co. Ltd. v. Sale1n Eroae Electri ·s.C.R. 498,

city Distribution Co. Ltd. Employees Union; [1966] 2 followed."

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Guest, Keen, Williams Pvt. Ltd. v. P. l .. Sterling, [1960] 1 S.C:R. 348,

explained.

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(b) J'he decision of the same Labour Court in Ref. No. 91 of 1964 between the appeilant-Company and. its workmen, wherein it was held that the very same Standing Orders did not apply to v.·orkrnen employed prior to their coming into force, did not prevent the Company from re agitating the same question, because; [816 F]

(i) The rule that an award binds all the workmen employed in an establishment and even future entrants is not based on the principle of res judicata but is founded on the condition for raising an industrial dis pu\o. [817 A-BJ

The NeWspapers Ltd. v . . The State Industri9l Tribunal, U,.P.

[1957] S.C.R. 754, 761, Workinen v., Balmer Lawrie d"c Co. [1964] 5 S.C.R. 344 Saharanpur Light Rly. Co. Ltd. v. Shahdizra and Slwhdara Saharanpur Railway Workers· Uniqn [1969] 1 L.L.J. 734, r~'ferred to.

(Del/Ji)

(ii) The award in Ref. 91 of 1964 was based on the .supposition that the Guest, Keen, Williams" case. decided that Stinding Orders were .not binding on those who were employed prior to the certifi.Cation and their coming into force. But·the Salem Erode Electricity Di9trihution Co.• Ltd. 'case has explained th.it case and shown that \hat such a supposition was not correct. Since the verY basis of the aWard in Ref. 91 was wrong the di!itinction made therein between tho"Se who were previOusly appointed ana those appointed subsequently ~ also wrong. [817 E-H]

(iii} Further, the consequence of holding that ihe Company was bar red· by p(inciples analcgous to reS judicata would be tha.t thCre would be two ~_ets of con~itions ,o'f §ervice, ~pne for those previously ·employed ahd the other for tl!ose employed after the Standing OrdCrs \Vere certified, a .conSequence wholly incompatible "Xilh the object and policy _of the Act. [817 D-EJ

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(2). It is a wcll-sett1e<l principle of industrial adjudication that even if an impugned order is v.·orded in the language of a simple termination of service, industrial lribunals can look into !he facts and circumstances o'i the case to ascertain if it was passed in colourable exercise of the power of the n1anagcmcnt to terminate the service of an employee and find out \4'hether it \1.:as in fact passed with a view 10 punish him. In the present ::asc, the letter of appointment states that the workn1an was appointed as a probationer for a period of 6 months with power to extend the period of probation. Standing Order 2(c) also provides that the normal period of probation shall be 6 months with discretion to extend the period, the maximum period of probation being 12 months. That means that at tile end of the period of probation the Company would have to de<:ide whedler to confirm him or terminate his service and that the probationer's service cannot be terminated during the probation period except for some mi5· conduct. The statement in the letter that workman·~ service was liable to termination even during the probationary period only meant that the appointment "''as subject to the Maaagemcnt's power of termination as provided in the Standing Orders. Such a power is provided in Standing \\:as not for any of the Order 14, but the termination of the workman grounds $Ct out therein. Therefore, the termination during probation \l.'as not in conformity with the pov.:cr to the S.anding Orders. [819 A-Fl

terminate under

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Further, the

finding of the Labour

ic; one of fact and meant that it rejected 1hc evidence led hy the ~lanagemcnt that the work of the \\.'Orkman v.·as found unsatisfactory. Since the finding is not perverse and is based on cvider.ce, it means the tcrminalion v.·as punitive in nature. Such an order could be pa<;sed only after a proper inquiry. Therefore, order d( the I .a hour Court setting aside the tennination v.·as right. [819 G-Hj

('..curt

CIVIL APPELi.ATE JURISDICTION: Civil Appeal No. 2483 of

1968.

Appeal by special leave from the Award dated July 24, 1968

of the Labour Court, Meerut in Case No. 92 of 1966.

S. V. Gupte, D. N. Mukherjee and M. L. Car, for the appel

lant.

Mohan Kwnaramangalam, M. K. Ramamurthi, Vineet Kumar,

Shyamala Pappu and J. Ramamurth,v, for the respondents.

The Judgment of the Court was delivered by

Shelat, J_

In this appeal, by special leave, two questions arise : ( 1) whether standing orders govern the employees appoi.nlc-0 be fore they are certified under the Industrial Employment (Standing Orders) Act, 20 of 1946, and (2) whether the appellant-company was entitled to terminate the service of a workman appointed as a probationer before the expiry of the period of probation except Qn the ground of misconduct.

The first question relates to 3 workmen, Alladin, Ram Prasad and Noorul Zaman, who were employed in 1929, 1935 and 1937 respectively, long before the company's standing orders were certi fied and brought into force i.n 1951 and who were superannuated

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AGRA ELECT. SVPPLY co. v. ALLADIN (She/at, J.)

811

under standing order 32 of the said standing orders. Prior to 19 51 there wen~. no rules or conditions of service prescribing the age of superannuation. Standing order 32 for the first time laid down 55 years as the age of supera,nnuation. Relying on standing order 32 the company served on the three workmen notices dated Decen1ber 19, 196-41 November 20, 1963 and January 27, 1964, who had by the)l attained the age of 58, 64 and 59 years, by which the company retired them with effect from Ja_nuary 1, 1965, December 29, 19Ji3 and March 1, 1964 respectively. The Labqur Court, to which the <lispute arising from the compulsory retirement was referred, held th;it the company's standi,ng orders having been certified long after -these workmen were employed and the condi tions of their employment not having provided any age of retire ment, the company could not apply standing order 32 to them, and therefore, the orders of supera.ninuation were bad, and directed their reinstatement.and payment to them of their wages from the date of retirement till the date when they would be reinstated.

Thus, the question involved in this appeal is whether the com pany could retire by applying standing order 32 these three work men, who admittedly had long passed the age of superannuation provided thereunder. Counsel for the company argued that once the standing orders are certified and come into operation, they would, subject to their modification as provided under the Act, bind all workmen, jrrespective of whether they were employed before or after they came into force, and that therefore, the Labour Court was in error• in holding to the contrary and ordering their reinstatement. Mr. Kumaramangalam, on the other hand, argued ( 1) that the company's action amounted to applying standing order 32 retrospectivdy, that that was not warranted, for, if the standing orders were intend~d to be so applied, they would have so expressly provided, a.ild (2) that in a previous reference, being Ref: 91 of 1964, between the appellant-company and its workmen, this very Labour Court had, decided that these standing orders did not apply to workmen previously employed, that an appeal was sought to be filed in this · Coutt against that order but no special leave was granted, and therefore, that order became final. Consequently, the company was not entitled to reagitate the same question, as it was precluded from doing so by principles analogous the principle of res fudicata.

to

The question as to whether standing orders were retrospective in their application can obviously arise only if they do not in Jaw bind workmen_ previously employed. Such a question can hardly arise if the provisions of the Act show, as contended by counsel for the compa.tt)';that once they are certified and come into force, the workmen presently they bind both the employer and all employed.

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[1970] l S.C. R

As observed in Shahdara (Delhi)-Saharanpur Light Railway Company Ltd. v. Shahdara-Saharanpur Railway Workers' Union(') the Act is a beneficient piece of legislation, its object being to require, as its preamble and its long title lay down, employers ii!l industrial establishments to define with sufficient precision the conditions of employment of workmen employed under them and to make them known to such workmen. Before the passing of the Act, there was nothing in law to prevent an employer having different contracts of employment with workmen employed by him with different and varying conditioins of service. Such a state of affairs led to confusion and made possible discriminatory treatment between employees and employees though all of them were appointed in the same premises and for the same or similar work. Such a position is clearly incompatible with the principles of col lective 'bargaining and renders their effectiveness difficult, il not impossible. To do away with such diversity and bargaining with each individual workman, the legislature provided by s. 3 of the Act that every employer of an industrial establishment must, withm 6 months from the date of the Act becoming applicable to his industrial establishment, submit to the certifying authority under tb.e Act draft standing orders prepared by him for adoption in his industrial establishment providing therein for all matters set out in the Schedule to the Act, and where model standing orders are prescribed to have such draft standing orders in conformity with them. The draft standing orders are to be accompanied by parti culars o.f workmen employed in the establishment as also the name of the union, if any, to which they belong. requirement clearly means particulars of the workmen in employment at the date of the submission of the draft standing orders for certification and not those only who would be employed in future after certifi cation. Under s. 4, such draft orders are certifiable if they provide for all matters set out in the Schedule, are otherwise in conformity with the Act and are adjudicated as fair and reasonable by the certifying officer or the appellate authority. Section 5 requires the certifying officer to forward a copy of the draft standing orders to the union or in its absence to workmen in the prescribed malliller with a notice requiring objection, if any from the workmen. After giving the employer and the union or th~ workmen's representatives an opportunity of being heard, the certifying officer has to decide whether or not any modification or addition to the draft submitted by the employer is necessary and then certify the draft standing orders and send copies thereof and of his order in that behaLf to the employer, the union or the representatives of the workmen. Section 6 confers the right of appeal to any person aggrieved by such order to the appellate authority, who, by his order, can either confirm or amend the standing orders. Under s. 7, such standing

This

(I) [1969] I L.L.J. 734.

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AGRA ELECT. SUPPLY co. v. ALLADIN (She/at, !J

813

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A orders are to come into operation on the expiry of 30 days from ~ .tl\e date on which their authenticated copies are sent by the certifying officer to the parties where no appeal against these orders is filed or where such appeal is filed on expiry of 7 days from the date on which copies of the appellate authority's order are sent as required by s. T5 (2). Section 9 req]lires the employer to post the standing orders as finally certified 0n-troards maintained for that purpose at or near the entrance through which the majority of workmen e,nter the industrial establishment and in all departments thereof. Section 10 confers the right to an employer or any of the workm\'n to apply for modification after expiry of 6 months from the date on which they ot the last modificatiQi!; theteo,f came into operation. The Schedule \O' the Act sets out matters which the standing orders must provide for. These m~tters are classification of workmen, shiit working, periods aind ·hours of work, holidays, pay days, wage rates, conditions and proc.edure Jot. applying .for grant of leave, closing aniLreopening of sections of the"i!Jdusfyial establishment, temporary .stoppage of. Wbrk, Jiabilities:and rights of the employer and the ·wprknlen arisi;ng ·therefrom,. termination of employment, disciplinary action,. penalties et«.

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't.o haye, standing orders .. certified,. the duty of :the certifying. autlfodfy tt>. a.dju\licate up?n their ~ai:ness and ,reason.abJe;ness, ,the: notice- tff l;>e ~\'en to the umon and m its absence tc5 the representatives of tl!e:workmen, .the· right conferred on them to raise~objections, t!)e cipportnnjty give,n to them of being heard before they are certified, :the·right of appeal and the right to apply for modifiC;ttions, given .to w9rkmen indivi dually, the. obligation on the eniplbyer to have them published in such a manner that they become.easily known to the workm"'ll, all these provisions .abundantly show that·once the.standing orders are-' certified and come into operation, they become bincling employer and all the workmein presently employed as also :those· .. eniployed thereafter in 'the establishment conducted by that. em ployer. I\ cannot p0ssibly be that sttcli standing orders would bind· only those who' are empluyed.after they. come into force and n'ot those who were employed pr,eviously but are still in employ ment when they come into force. · The right of bei;ng heard. give.n. to the union or, where thete is no union, to the representl\tives of the workmen, the right Of appeal and the right to apply for modifi cation given to workmen individually clearly indicate that they were provided for because the standi1ng'orders. '1s they emerge after certification. are intended to .be bindinir on all workmen in the employment of the establishmenJ at the date when they come into force and those employed thereaft.er. Surely, the union or, in its absence,. the representatives of workmen, who are given the right to raise objections either to the draft standing order~ proposed by' the employet or to the fairness and reasonableness of their ~rovi-

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SUPREME COURT REPORTS

( 1970) I S.C.R.

sions, could not have been intended to speak for workmen to be employed thereafter and not those whom they presently represent. Besides, if the sta.nding orders were to bind only those who arc subsequently employed, the result would be that there would be different conditions of employment for different classes of work men, one set of conditions for those who are previously employed and another for those employed subsequently, and where they arc modified, even several sets of conditions of service depending upon whether a workman was employed before the standing orders are certified or after, whether he was employed before or af1er a modi fication is made to any one of them and would bind only a few who arc recruited after and not the bulk of them, who though in employment were recruited previously. Such a result could never have been intended by the legislature, for, that would render the conditions of service of workmen as indclinu~ and di\crnncd, as '•before the enactment of the Act. Why docs s. 3(3) of the Act require the employer to ~ive particulars of the workmen employed by him at the date of his submission of the draft standing orders unless the object of making him furnish the particulars wa~ to have uniformity of conditians of service and to make the standing orders binding on all those ipresently employed. That is why the Act also insists among other things that after thcv arc certified they must be made known to all workmen by posting them at or near the entrance through which they pass and i.n the language known to the majority of them.

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In that view the Court fixed 60 years as the .age F

In Guest, Keen, Williams- Pvt. Ltd. v. P. J. Sterling(') a view apparently contrary to the o·ne above stated was said to have been taken since it was held there that it was unfair in that particular case to fix the age of superannuation of previous employees by a subsequent standing order, which should apply in that matter to future entrants. of retirement for such previous employees although the standing In order had provided 55 years as the age of superannuation. Salem Erode Electricity Distribution Company [.td. v. Salem Erode ,£/ectricity Distrib111ion Co. Ud. Employees Union(') this Court, however, took the: same view which we have stated above that and held that the provisi<fns of the Act clearly matters specified in the S~hedulc to the Act should be covered by G uniform standing order< applicable to all workmen employed in an industrial establishment and not merely to entrants employed after their certification. The question arose out of an applicalic>n mad~ by the employer for modification o: the existing standing orders by providing different rules relating to holidays and leave for emplo- yees appointed before a certain date and those appointed after that H date. Negativing such a modification. the Court, after examining

indicated

(I) (1960) I S.CR. 348.

(2) (1966) 2 SC.R. 49R.

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AGRA ELECT. SUPPLY co. v. ALLADIN (She/at, !.)

815

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. the relevant provisions of the Act, stated at page~ 504 and 505 as foU'ows:

"One has• merely to examine these clauses one by one to be satisfied that there is no scope for having two separate Stao,ding Orders in respect to any one of them. Take the case of classification of workmen. It is incon- ceivable that there can be two separate Standing Orders in· respect of this matter. What we have said about classification is equally true about each one of the other said clauses; and so, the conclusion appears to be irre sistible that the object of the Act is to certify Standing Orders in respect of the matters covered by the Sche- dule; and having regard to these matters, Standing Orders so certified would be uniform ajJld woul<! apply to all workmen alike who are employed in any industrial establishment.

On principle, it seems expedient and desirable that matters specified in the Schedule to the Act should be covered by uniform Standing Orders applicable to all workmen employed in an industrial establishment. It is not difficult to iinagine how the application of two sets of Stan<ling Orders in respect of the said matters is bound to lea~ to confusion in the working of the estab iishment and cause dissatisfaction amQllgst the emplo yees. If Mr. Setalvad is right in contending that the Standing Orders in relation to these matters can be changed from time to time, it may lead to the anomalous result that in course of 10 or 15 years there may come into existence 3 or 4 different sets of Standing Orders applicablti to the employees in the same industrial estab lishment/the application of the Standing Orders depend ing upon the date of employment of the respective emplp yees. T4at, we think, is not intended by the provisions of the Act."

At page 509 to sio the Court referred to the case of Guest, Keen. Williams Private Ltd.('), relied on by the employers' counsel, and explained why l:he Court had fixed 60 years as the age of superan nuation for the employees appointed before the standing orders were certified aJthough the standing orders had fixed 55 years as the age of superatumation stating that :

"that course was adopted under the special and un usual circumstances expressly stated in the course of the judgment."

(I) [1960] 1 S.C.R. 348.

LlSSupCJ/69-8

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This decision thus confirms the view taken by us that the object of A the Act is to have uniform standing orders providing for the matters enumerated in the Schedule to the Act, that it was not intended that there should be different conditions of service for those who are employed before and those employed after the standing orders come into force, and finally, that once the standing orders come into force, they bind all those presently in the employment of the B concerned establishm®t as well those who are appointed there after.

Counsel for the work.men, however, drew our attention to the award in Ref. 91 of 1964 under s. 4{k) of the U.P. Industrial Disputes Act, 194 7. That reference, no doubt, was between the appellant-company and its workmen and the yucstion decided there was whether the company was right in compulsorily retirinJl the six . workmen there concerned under these very standing orders although they were employed before they were certified and came into force. The Labour Court, relying on Workmen of Kettlewell Bullen & Co. Ltd. v. Ket1lewell Bullen & Co. Ltd.(') which in tum had relied on Guest, Keen, Williams' case('), held that Stwling Order .32 of these Standing Orders could not be applied to those pre viously appointed and that, therefore. the company's action in retiring those workmen was not justified.

We may mention that the case of Kettlewell Bullen & Co.(') was not one concerned with Standing Orders but with rules made by the company and this Court, relying on the decision in Guest, Keen, Williams Private Ltd.(') held that where the rules of retire ment are framed by the company they would have no application to its prior employees unless such employees have accepted the new rules. It is clear that neither the case of Kettlewell Bullen & Co. (1 ) nor the case of Guest, Keen, Williams Private Ltd.(') in the light of the explanation given in the case of Salem Erode Elec tricity Distribution Co. Ltd. (8 ), was applicable and the Labour Court was, therefore, clearly in error in basing it~ award on the decision in the case of Kettlewell Bullen & Co.(').

The argument, however, was that even if that award was erro noous, the company did not appeal against it. consequently it be came final and the issue there decided being the same and between to the principle of res the same parties, principles analogous judicata would apply and therefore no relief should be granted in It is true, as stated in The the present case to the company. Newspapers Ltd. v. The State Industrial Tribunal, U.P. (') that an award binds not only the individuals present or represented but all workmen employed in the establishment and even future entrants. But that principle is founded on the essential condition for the

(I) (1964J 2 L.L.J. 146. (3) tt966J 2 S.C.R. 98.

(2) (1960J I S.C.R. 348. (4) (19S7] S.C.R. 7S4, 761.

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AGRA ELECTI SUPPLY' co. v. ALLADIN (She/at, !.)

817

raising of an indu$trial dispute itself. If an industrial dispute can be raised only by a group of workmen acting on their own or through their union, ,the conclusion must be that all those who sponsor~ the dispute are concerned in it and therefore bound by the decision on such dispute. (see M/ s. New India Motors (P) Ltd. v. K. T. MQrris)('). Such a consideration, however, is not the same as the principle of res judicata or prin<:iples analogous to res judicata. Jn Workmen v. Balmer Lawrie & Co.( 2 ) 'no doubt, a ca,se of revi$ion of wage scales, this Court cautioned against applying t~hnical considerations of res judicata thereby hampering the discretion of industrial adjudicatirin. (see also Sh4hdara (Delhi)·Saharanpur Light Railway Co. Lid. v. Shahdara Saharanpur Railway Workers' Union(•). How iJJ.expedient it is to apply such a principle is evident from the fact that the 'award in Ref. 91 of 1964 was based on the decision in K,ett/ewell Bullen & ca: Ltd.(') which in tum had followed the case'of Guest, Keen., Williams Private Ltd.( 0 ) on the supposition (which, as aforesaid, was not correct) ' that standing orders are not binding on those who are employed ppor to their certification and tJ:ieir coming into force. The compajly, presumably, did not challenge the correct· ness of that awarpJ1ecause it was perhaps thelli thought that that was the law laid ,down in Guest, Keen, Williams Private Ltd. ( 0 ). The consequence.-Of holding that the company 1s barred by prin ciples analogous to res judicata would be that there would be two sets of conditions ohervice; one for those previously employed and the other for those employed after the standing orders were certi· fied, a consequea;i.teiwholly incompatible with the object and policy of the Act. Tile very basis of the award in Ref. 91 of 1964, namely, the wrong understanding of the decision in Guest, Keen, Williams Private Ltd.("), having goine, it becomes all the more difficult and undesirable to perpetuate the distinction made therein between those who were previously appointed and those appointed subsequently and t(); refuse on such an untenable distinction relief to the company. The award in Re.f. 91 of 1964 was made on Ma'y 24, 1965. when it was believed that the decision in Guest, Keen, Williams Ca. Ltd, ( 0) laid down the principle that standing orders would not bl!!d workmen previously employed. That that was' not so was tlalified in the case of Salem Erode Electricity Dis tribution Co. Lrl:l.(8 ), the decision in which was pronounced on November 3, 1965 removing thereby any possible misapprehen· sion. The present reference was made 011 June 23, 1966, long aftevthe decision in Salem Erode Electricity Pistribution Co, Ltd.(") ,and the !.11.bour Court gave the award Impugned in this appeal on July ,24.: 1968. Thus, both the Reference and the award were'c. ma~ in circumstances diflerent from those which

(!) [1960]·S.C.R. (3) [1969] I L,t,J; . 4. (5) [1960] I S.C.R. 348.

p, 357.

(2) [1964] 5 S.~.R. 344. (4) [1964] 2 L;L.J. 146. (6) (1966] 2 s:c.R. 498.

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[1970] l S.C.R.

prevailed when Ref. 91 of 1964 was made and disposed of, a factor making it doubtful the application "' ,, principle such as res ;udicata.

The second question relates ro the workman, Shameem Khan. The company appointed him under a letter of appoinrment dated December 2, 1965 to the post of a cleaner as a probationer for 6 month; with discretion to the resident engineer to extend that period. The letter also stated that during his probationary period his service would be liable to termination without any .notice and without assigning any reason therefor and that he would not be deemed to have been confirmed automatically in the post on the expiry of the probation period unless so advised in writing. The workman worked as such probationer till February 28, 1966 when he was served with a memorandum that his service was terminated as from the close of that day.

The workman's case was that the company had no right to ter minate his service before the expiry of the 6 months period of probation which is the period prescribed by standing order 2(c), that the stipulation in the letter of appointment that his service was liable to termination during the probation period was contrary to that standing orJer, and that therefore, that stipulation was not valid, and lastly, that the said order, though apparently one of ter mination simpliciter, was not a bona fidt! order, was in truth puni tive in nature, and therefore, could not be passed without an oppor tunity of being heard having been given to him in a properly held enquiry. The fact is that no such enquiry was he!<.. and no oppor tunity was given to the workman t<) ~xplain any misconduct for which he could be removed or dismissed.

The evidence before the Labour Court was that the concerned workman had unauthorisedly used the motor-cycle belonging to one Sidhana, a shift engineer in the company and that that motor cycle met with an acci<lent while the workman was using it causing damage to it. Three days after that accident a report alleging that his work as a probationer was unsatisfactory was made by his superior officer. On this evidence the Tribunal came to the con clusion that the impugned order was not an order of termination simpliciter, that though couched in that language it was passed as a punishment or the workman having used that vehicle without the consent of its owner and was, therefore, an order of dismissal. The Tribunal was also of the opinion that the said report alleging unsatisfactory work by the workman was co!ourable and made at the instance of the shift engineer or at any rate was inspired by the In this view the Labour Court held that the exer said incident. cise of power to terminate the service of the workman was not bona fide and conscquenty it set aside that order and directed his reinstatement.

A

B

c

D

E

F

G

H

A

B

c

D

E

F

G

H

AGRA ELECT. SUPPLY co. v .. . IU.LADIN (She/at, J.)

819

Now, it is a well settled principle of industrial adjudication that even if an impugned order is worded in the language of a simple termination of service; industria.l tribunals can look into the facts and circumstances of the case to ascertain if if was passed in colourable exercise of the power of the manageme;nt to terminate the service of an employee and find out whether it was in fact passed with a view to punish him. The letter of appointment clearly states that the workman, Shameem Khan, was appointed as a probationer for a 17eri<?d of 6 months with power to the resident engineer to extend the period of probation. Ordinarily, that would mean that at the end of the probation period the company would have to decide whether to confirm him to a permanent post or, if that is not possible, to terminate his service. Standing order 2(c) provides that a probationer i~ ·an employee who is provisionally employed to fill a permanent vacancy in a post and who has not It also lays down completed the period of probation thereunder. that the normal period of probation shall ~e 6 months but the resident engineer has the discretion to extend that period, the maximum period of probation being 12 months in all. Ordinarily, this would mean. that a probationer's service cannot be terminated except for some misconduct until the expiry of the probation period. The letter of appointment, no doubt, contained a provi sion that the service ·of the worlanan was liable to termination even during the probationary period. That provision, however, the must be read to meainl that the appointment was subject management's power of termination a> provided in the standing orders. Standing order 14 provides for such a power and lays down that the service of "any employee" (which expression includes a probationer as is clear from the classification of employees in stalllding order 2) can be tenninated on grounds (a) to (f) therein set cut. It is quite clear that the termination of service of .the concerned workman cannot be attributed to •ny one of these grounds. Therefore, that order cannot be s? · ', to have been passed in conformity with the power to terminate nis service under the stalllding orders.

to

But apart from this consideration, the Labour Court came to a finding on the evidence before it that the real reason for passing the impugned order was not the alleged unsatisfactory work on the part of the workr!lan but his having unauthorisedly used the motor cycle and cansinJ! damage to it, that the order was punitive and not a simple tenrunation of service and was therefore in colourable exercise of the power of tennination. This finding is clearly one of fact and meant that the Labour Court rejected the evidence led by the management that the work of the cOil'cerned workman was found unsatisfactory. It is impossible to say from the evid ence before the Labo1J'r Court that that finding was perverse or In that view, it is such as could not be reasonably arrived at.

820

SUPREME COURT REPORTS

[1970] 1 s.c. t

impossible to interfere with the order of the Labour Court relating to workman, Shameem Khan.

In the result, the appeal is partly allowed. The order of the Labour Court in connection with the 3 workmen whom the com pany retired, Is set aside but its order to workman, the 0rder, Shameem Khan, is confinned. passed by this Court on January 24, 1969, while granting stay to the appellant-company, the company will pay to the workman, Shamccm Khan, interest at 6% per annum on the amount of the arrears of wages still due to him under the order of the Labour Court. As the appeal is partly allowed and partly dismissed, there will be no order as to costs.

In accordance with

relating

A

B

V.P.S.

Appeal partl,v a/lowed.