M/S. Hindustan Lever Ltd. vs Presiding Officer And Others
2015 Latest Caselaw 2019 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

AFR
 
Chief Justice's Court
 

 
WRIT - C No 13031 of 2004
 

 
M/S Hindustan Lever Ltd
 
Vs
 
Presiding Officer, Industrial Tribunal, Kanpur & Ors
 

 
Appearance:
 

 
     For the petitioner:    Shri  Sudhir Chandra,  Senior Advocate, assisted by
 
			        Shri Rahul Mishra, Advocate, and
 
			        Shri Sandeep Prabhakar, Advocate
 

 
     For the respondents: Shri C B Yadav, Addl Advocate General
 
			        Shri Shashank Shekhar Singh, Addl CSC and
 
			        Dr Y K Srivastava, Standing Counsel 
 

 

 
Hon'ble Dr Dhananjaya Yeshwant Chandrachud, Chief Justice
 
Hon'ble Dilip Gupta, J
 
Hon'ble Yashwant Varma, J
 

 
	(Per Dr D Y Chandrachud, CJ)
 
	This reference to the Full Bench has been occasioned by a referring  order dated 25 January 2005 of a learned Single Judge. 
 
Facts

The petitioner manufactured, at the material time, detergent bars in a factory at Orai. The three workmen to whom the proceedings relate were suspended on 5 December 1998 pending a disciplinary enquiry on the allegation that they had committed acts of misconduct within the premises of the factory on 5 December 1998. By the order of suspension they were directed, during the period of suspension to mark their attendance on all working days at 11.00 am in a register maintained for that purpose at the security office at the main gate of the factory. Charge sheets were issued on 11 December 1998. The workmen did not mark their attendance as directed by the employer in the order of suspension. The employer paid to the workmen subsistence allowance only for the days on which they had marked their attendance in the register kept at the factory gate. On 27 April 2000, the State Government suo motu referred an industrial dispute under Section 4 (k) of the Uttar Pradesh Industrial Disputes Act, 1947 to the Industrial Tribunal-III at Kanpur1. The issue which was referred for adjudication was whether the refusal to pay subsistence allowance to the workmen from 6 December 1998, save and except for those days on which they had marked their attendance, was illegal and contrary to law. The Industrial Tribunal by its award dated 13 March 2003 held that the direction to the suspended employees to mark their attendance at the factory gate during the period of suspension was unjustified and illegal. The employer was directed to pay subsistence allowance to the workmen for the whole of the period of suspension including the days on which attendance was not marked by them. This award was challenged in writ proceedings under Article 226 of the Constitution.

The issues raised

In pursuance of the provisions of the Industrial Employment (Standing Orders) Act, 19462, Standing Orders in relation to the establishment of the employer were certified by the Certifying Officer on 1 July 1991. Provisions have been made for disciplinary proceedings and punishment for misconduct in Standing Order 27. Certified Standing Order 27 (6) contemplates the suspension of a workman where disciplinary proceedings are pending or contemplated or where criminal proceedings against him in respect of an offence are under investigation or trial and the management is satisfied that it is necessary or desirable to place the workman under suspension. Certified Standing Order 28 provides for the payment of subsistence allowance in the following terms:

"28. SUBSISTENCE ALLOWANCE

1. A workman who is placed under suspension shall during the period of such suspension be paid a subsistence allowance at the following rates:

a) An amount equal to 50% of the wages which he was drawing immediately before suspension for the first ninety days reckoned from the date of such suspension.

b) If the period of suspension exceeds ninety days but does not exceed one year, the workman will be entitled to receive 75% of his wages drawn by him immediately before his suspension."

The following provision is made in the last paragraph of Certified Standing Order 28:

"The payment of subsistence allowance under this standing order shall be subject to the workman concerned not taking up any employment during the period of suspension." (emphasis supplied)

In pursuance of the provisions contained in Section 15 of the Act, the Uttar Pradesh Industrial Employment Model Standing Orders, 19913 were notified on 24 July 1992. The Model Standing Orders, as notified, contain provisions of suspension pending an enquiry into an alleged major misconduct in Model Standing Order 24. Clauses (4) and (5) of Model Standing Order 24 are in the following terms:

"(4) No attendance of the suspended employee shall be required to be recorded during suspension period. But the suspended employee will indicate the place of domicile during suspension, which shall not be altered without previous permission of the employer.

(5) The subsistence allowance shall, for the first thirty days be equal to one half of the basic wages, dearness allowance and other compensatory allowances to which the workman would have been entitled if he had been on leave with wages. If the enquiry gets prolonged and the workman continues to be under suspension for a period exceeding thirty days, the subsistence allowance shall, for such period, be equal to three fourths of such basic wages, dearness allowance and other compensatory allowances.

Provided that where such enquiry is prolonged beyond a period of thirty days for reasons directly attributable to the workman, the subsistence allowance shall, for the period exceeding thirty days, continue to be paid at the rate of fifty per cent of the basic wages, dearness allowance and other compensatory allowances." (emphasis supplied)

When the writ petition came up before the learned Single Judge, it was sought to be urged on behalf of the employer that a provision for the payment of subsistence allowance was made in Clause 28 of Certified Standing Orders. Consequently, it was urged that unless and until the amended clause of the Model Standing Orders was adopted or incorporated in the certified standing orders, the amended provisions of the Model Standing Orders would not apply automatically. It was urged that under Section 12-A of the Act, Model Standing Orders are applicable during the period when the Act becomes applicable to an industrial establishment until the standing orders are duly certified. Once the standing orders have been certified, it is submitted that any amendment to the Model Standing Orders would not stand attracted ipso facto and a subsequent amendment of the Model Standing Orders would have to be specifically incorporated by way of an amendment to the certified standing orders under Section 10 but until then the certified standing orders would continue to apply. In support of this contention, reliance was placed on a judgment of a Division Bench of the Karnataka High Court in M C Raju Vs Executive Director4. The learned Single Judge also adverted to two judgments of the Bombay High Court in May & Baker Ltd Vs Kishore Jaikishandas Icchaporia5 and of a learned Single Judge in Voltas Limited Vs K D Kochargaonkar6 which took the same view. Every amendment to the Model Standing Orders, it was submitted, is not per se applicable to an industrial establishment which has certified standing orders. Having adverted to these judgments, the learned Single Judge referred to the view taken by a Division Bench of this Court in Artificial Limbs Manufacturers Corporation of India Vs Som Pal Singh7 which was at variance with the judgment of the Karnataka High Court in M C Raju (supra). The learned Single Judge observed that there was another judgment of a Division Bench of this Court in Shitla Prasad Vs State of U P8. In the view of the learned Single Judge, the statement of law propounded in the judgment of the Division Bench of the Karnataka High Court was in conformity with the law laid down by the Division Bench in Shitla Prasad's case that the workmen of an industrial establishment, upon the certification of standing orders, would continue to be governed by the certified standing orders and the model standing orders or an amendment to them would not ipso facto apply. On the other hand, the learned Single Judge noted that the judgment of the Division Bench of this Court in Artificial Limb (supra) took the view that the model standing orders automatically apply even after standing orders have been certified.

In view of this conflicting legal position, the following questions have been referred for adjudication by the Full Bench:

"1. Whether amendments made in Model Standing Orders become automatically applicable to Certified Standing Orders without any amendment to the Standing Orders of the establishment finally certified under Section 10 of the Industrial Employment (Standing Orders) Act, 1946.

2. Whether model orders framed by Central Government and amendments therein supersede the Model Standing Orders framed by State of U.P."

Industrial Employment (Standing Orders) Act, 1946

In order to appreciate the issue which has been referred to the Full Bench, a reference would be necessary to the provisions of the Industrial Employment (Standing Orders) Act, 1946. The Act has been enacted 'to require employers in industrial establishments formally to define conditions of employment under them.' The Preamble to the Act notes that 'it is expedient to require employers in industrial establishments to define with sufficient precision the conditions of employment under them and to make those conditions known to workmen'. Section 1(3) provides that the Act shall apply to every establishment where hundred or more workmen are employed, or were employed on any day of the preceding twelve months. The proviso to Section 1(3) empowers the Central Government, by a notification, to apply the Act to any industrial establishment employing such number of persons less than a hundred as may be specified in the notification. The expression 'industrial establishment' is defined in Section 2(e) and governs, among other establishments, a factory as defined in Section 2(m) of the Factories Act, 1948 or an establishment of a person who, for the purpose of fulfilling a contract with the owner of any industrial establishment, employs workmen.

Section 3 provides for the submission of Draft Standing Orders. Section 3 provides as follows:

"3. Submission of draft standing orders.-(1) Within six months from the date on which this Act becomes applicable to an industrial establishment, the employer shall submit to the Certifying Officer five copies of the draft standing orders proposed by him for adoption in this industrial establishment.

(2) Provision shall be made in such draft for every matter set out in the Schedule which may be applicable to the industrial establishment, and where model standing orders have been prescribed, shall be, so far as is practicable, in conformity with such model.

(3) The draft standing orders submitting under this section shall be accompanied by a statement giving prescribed particulars of the workmen employed in the industrial establishment including the name of the trade union, if any, to which they belong.

(4) Subject to such conditions as may be prescribed, a group of employers in similar industrial establishments may submit a joint draft of standing orders under this section."

Under sub-section (1) of Section 3, an employer has to submit to the Certifying Officer copies of the draft standing orders proposed for adoption in the industrial establishment within six months from the date on which the Act becomes applicable to the establishment. Sub-section (2) of Section 3 contains a mandate that a provision must be made in the draft standing orders for every matter set out in the Schedule which may be applicable to the industrial establishment. Moreover, where Model Standing Orders have been prescribed, the draft standing orders shall be in conformity with such model insofar as is practicable. Section 3(2) is indicative of the position that the draft standing orders which are proposed by the employer must, insofar as is practicable, be in conformity with the Model Standing Orders. The use of the expression 'practicable' is indicative of the fact that Parliament has conceived of situations in which draft standing orders which are proposed may not necessarily be on the exact terms of the Model Standing Orders or in conformity with each and every provision thereof. What Section 3(2), however, mandates is that a provision has to be made in the draft standing orders for every matter which is set out in the Schedule. So long as the draft standing orders cover every matter which is set out in the Schedule, the Act requires that to the extent practicable, the draft standing orders should be in conformity with the Model Standing Orders. Where that is not practicable, the Act does not impose a requirement of exact conformity between the draft standing orders and the Model Standing Orders for the purpose of certification. The absence of strict conformity is, in fact, contemplated by the use of the expression 'that the draft standing orders shall so far as is practicable be in conformity with the Model Standing Orders'.

Section 4 provides for the conditions of certification of standing orders and is in the following terms:

"4. Conditions for certification of standing orders.- Standing orders shall be certifiable under this Act if -

(a) provision is made therein for every matter set out in the Schedule which is applicable to the industrial establishment, and

(b) the standing orders are otherwise in conformity with the provisions of this Act,

and it shall be the function of the Certifying Officer or appellate authority to adjudicate upon the fairness or reasonableness of the provisions of any standing orders."

Section 4, as its plain terms indicate, provides for mandatory conditions on the fulfillment of which standing orders shall be certifiable. This is evident from the use of the expression 'if' to indicate that standing orders shall be certifiable only if the provisions of clauses (a) and (b) are complied with. Clause (a) requires that a provision should be made in the standing orders for every matter set out in the Schedule which is applicable to the industrial establishment. Clause (b) requires that the standing orders should otherwise be in conformity with the provisions of the Act. Under Section 4, the Certifying Officer and the appellate authority are entrusted with the function of adjudicating upon the fairness or reasonableness of the provisions of the standing orders. Under Section 5, the procedure which is to be followed by the Certifying Officer is stipulated, under which the Certifying Officer has to notify the union or, as the case may be, the workmen and to then determine, upon furnishing an opportunity of being heard, whether or not a modification of or addition to the draft submitted by the employer is necessary to render the draft standing orders certifiable under the Act. Thereupon, the Certifying Officer is required to certify the draft standing orders under sub-section (3) of Section 5. Section 7 provides for the date of operation of the standing orders. Except where an appeal is preferred under Section 6, the standing orders shall come into operation on the expiry of thirty days from the date on which authenticated copies of the certified standing orders are sent by the Certifying Officer to the employer and to the union or, as the case may be, the representatives of the workmen. In a case where an appeal has been filed, the standing orders come into force on the expiry of seven days of the date on which copies of the appellate order are sent. Section 8 provides sanctity to the certified standing orders by requiring that a copy of all the standing orders as finally certified have to be filed by the Certifying Officer in a register in a prescribed format maintained for the purpose.

Section 10 provides for the duration and modification of standing orders and is in the following terms:

"10. Duration and modification of Standing Orders.- (1) Standing orders finally certified under this Act shall not, except on agreement between the employer and the workmen or a trade union or other representative body of the workmen be liable to modification until the expiry of six months from the date on which the standing orders or the last modifications thereof came into operation.

(2) Subject to the provisions of sub-section (1), an employer or workman or a trade union or other representative body of the workmen may apply to the Certifying Officer to have the standing orders modified, and such application shall be accompanied by five copies of the modifications proposed to be made, and where such modifications are proposed to be made by agreement between the employer and the workmen or a trade union or other representative body of the workmen, a certified copy of that agreement shall be filed along with the application.

(3) The foregoing provisions of this Act shall apply in respect of an application under sub-section (2) as they apply to the certification of the first standing orders.

(4) Nothing contained in sub-section (2) shall apply to an industrial establishment in respect of which the appropriate Government is the Government of the State of Gujarat or the Government of the State of Maharashtra."

Section 10 provides several principles. Firstly, once standing orders have been finally certified, a modification to the certified standing orders cannot be made until a period of six months has elapsed from the date on which the standing orders or the last modification came into operation. Secondly, this period can be curtailed on an agreement between the employer and the workmen or a trade union or a representative body. Thirdly, subject to the provisions of sub-section (1) which stipulate the period within which a modification cannot be made, a procedure has been prescribed for modification of certified standing orders. An application for modification is contemplated at the behest of the employer or a workman, trade union, or representative body of workmen. Thereupon, the provisions of the Act would apply to an application for modification of the certified standing orders.

Section 10-A provides for the payment of subsistence allowance pending an investigation or enquiry into complaints or charges of misconduct against a workman. A dispute in regard to the subsistence allowance payable to a workman is referable to the Labour Court under sub-section (2) of Section 10-A.

Section 12-A provides for temporary application of Model Standing Orders to an establishment. Section 12-A is as follows:

"12-A. Temporary application of Model Standing Orders.-(1) Notwithstanding anything contained in Sections 3 to 12, for the period commencing on the date on which this Act becomes applicable to an industrial establishment and ending with the date on which the standing orders as finally certified under this Act come into operation under Section 7 in that establishment, the prescribed model standing orders shall be deemed to be adopted in that establishment, and the provisions of Section 9, sub-section (2) of Section 13 and Section 13-A shall apply to such model standing orders as they apply to the standing orders so certified.

(2) Nothing contained in sub-section (1) shall apply to an industrial establishment in respect of which the appropriate Government is the Government of the State of Gujarat or the Government of the State of Maharashtra."

Section 12-A, as its plain terms indicate, provides for the applicability of the model standing orders and contains a deeming fiction that the model standing orders would be treated to have been adopted in the industrial establishment during a specified period. The period commences from the date on which the Act becomes applicable to an industrial establishment. The period ends with the date on which the standing orders as finally certified under the Act have come into operation under Section 7 for that establishment. The object and purpose of Section 12-A is to ensure that once the Act has become applicable to an industrial establishment, there should be no vacuum in the specification of the conditions of employment of the workmen engaged in the establishment until the standing orders are finally certified. During the period between the applicability of the Act to an industrial establishment and until the standing orders are finally certified, the Model Standing Orders are deemed to be adopted for that establishment. This deeming provision, however, ceases to apply or remain in force once the standing orders are finally certified and come into operation under Section 7. The Model Standing Orders are framed under the provisions of Section 15(2)(b) which confers a rule making power on the appropriate government, while carrying out the purposes of the Act, to set out Model Standing Orders. The Schedule to the Act which is to be read in the context of Section 2(g) and Section 3(2) provides for the matters in relation to which provisions are required to be contained in the standing orders under the Act. In the State of Uttar Pradesh, Item 9 of the Schedule contains a reference to suspension or dismissal for misconduct and acts or omissions which constitute misconduct.

Precedent

The position and status of the Model Standing Orders was explained in a judgment of a Constitution Bench of the Supreme Court delivered in 1966 in Rohtak and Hissar Districts Electric Supply Company Ltd Vs State of Uttar Pradesh9. The Supreme Court held that Section 3(2) is indicative of the fact that the standing orders have to be in conformity with the model standing orders insofar as is practicable and as a result, a departure from the model standing orders would be permissible if insistence upon conformity would be impracticable. The Supreme Court observed as follows :

"Then, in regard to the conformity with the model standing orders, the position is clear. Section 3 (2) of the Act specifically requires that the standing orders shall be, as far as practicable, in conformity with the model. These words indicate that the appropriate authority may permit departure from the model standing orders if it is satisfied that insistence upon such conformity may be impracticable. This fact also shows that in a given case, the appropriate authority may permit departure from the model standing orders and may come to the conclusion that one or the other of the conditions included in the model standing orders may not, for the time being, be included in the standing orders of any particular establishment - vide Associated Cement Companies Ltd v. P.D. Vyas and others [1960-I L.L.J. 563."

The same principle was emphasized in an earlier judgment of three learned Judges of the Supreme Court in Bagalkot Cement Co Ltd Vs R K Pathan10, where it was held that if a standing order was found by experience to be unreasonable or inconvenient, either by the employer or the employees, an application could be made for the modification of the standing orders after the expiration of six months from the date on which they had come into operation. The Supreme Court observed that as a result of this provision, what an industrial tribunal could have done on a reference of an industrial dispute is now intended to be achieved by the standing orders themselves in respect of an industrial establishment to which the Act applies. The Certifying Officer as well as the appellate authority were, in substance, held to be industrial authorities to whom powers are entrusted under the Act.

In Bharat Petroleum Corporation Limited Vs Maharashtra General Kamgar Union11, a Bench of two learned Judges of the Supreme Court observed that prior to 1956, the jurisdiction of the Certifying Officer and the appellate authority was limited and their only function was to inquire whether the standing orders made by the establishment were in conformity with the model standing orders. In 1956, radical changes were introduced in the Act by Parliament. As a result, the scope of the Act was widened and the Certifying Officer as well as the appellate authority were vested with the jurisdiction to determine the fairness or reasonableness of the standing orders. In the case at hand, the Model Standing Orders framed by the Central Government for industrial establishments provided that the workman would be entitled to appear in person or to be represented by office bearers of a trade union of which he is a member in departmental proceedings. The draft submitted by the employer, as certified by the appellate authority, contained a vital difference with the model standing orders. Under the model standing orders, a workman could be represented in departmental proceedings by an office bearer of a trade union of which he is a member. However, under the draft standing orders, as certified by the appellate authority, the right of the workman was restricted to a fellow workman of his choice from among the employees of the Corporation. The order of the appellate authority was challenged by the union in the High Court. The High Court held that the draft Standing Order, as certified, insofar as the clause pertaining to the representation of an employee was concerned, was liable to be set aside. The Supreme Court held that though the model standing orders did contemplate that a delinquent employee could be represented in disciplinary proceedings through another employee who may not be an employee of the parent establishment to which the charge sheeted workman belongs and may be employed elsewhere, the certified standing orders had imposed an embargo that the representative should be an employee of the parent establishment. The Supreme Court held that the basic features of the model standing orders were  retained and the right of representation in disciplinary proceedings was not abrogated. The standing order, as certified, had conformed to the standards of reasonableness and fairness and hence the decision of the appellate authority was upheld.

Analysis

The issue which is posed in these proceedings is as to whether a modification or amendment to the Model Standing Orders would ipso facto apply where the standing orders have been certified in the case of an industrial establishment.

Now, at the outset, it must be noted that Section 12-A of the Act refers to a situation where standing orders in respect of an industrial establishment have not been certified. So long as the Act has been made applicable to an industrial establishment and until the standing orders are finally certified, Section 12-A mandates that the model standing orders shall be deemed to have been adopted in the establishment. However, once the standing orders have been duly certified in accordance with the provisions which are contained in Sections 3, 4 and 5, the standing orders, as certified, come into operation by virtue of the provisions of Section 7 on the expiry of a period of thirty days from the date on which an authenticated copy is sent by the Certifying Officer under sub-section (3) of Section 5. These certified standing orders are maintained in a register under Section 8 and are required to be posted by the employer in the industrial establishment under Section 9. Once the standing orders have been certified, they cannot be modified for a period of six months from the date on which the standing orders have come into operation, except on an agreement between the employer and the workman. Any modification of the standing orders can be made in accordance with the provisions of sub-section (2) of Section 10. These provisions are indicative of the legal position that upon a certification of the standing orders, it is the certified standing orders which govern the conditions of employment of the workmen of the industrial establishment. There is no provision in the Act, upon the certification of the standing orders being completed, to the effect that any modification of the Model Standing Orders would ipso facto govern the certified standing orders or override them. If the Model Standing Orders are amended by a notification of the appropriate government in exercise of the rule making power under section 15(2)(b), the procedure for an amendment of the certified standing orders must be followed and it is only thereafter in the exercise of the powers conferred by Section 10 (2) of the Act that the certified standing orders can be duly modified in accordance with law.

The judgment of the Division Bench of the Karnataka High Court in M C Raju (supra) dealt with a situation where a workman, whose services had been extended for a period of six months after attaining the age of superannuation, sought a further extension of service until the age of 58 years, on the ground that the model standing orders prescribed under the Karnataka Industrial Employment (Standing Orders) Rules, 1961 had been amended with effect from 11 March 1982 by the insertion of a provision under which the age of retirement was fixed at 58 years. As a matter of fact, with effect from 11 March 1982, the Schedule to the Act was also amended by specifying the age of retirement as one of the matters to be provided in the standing orders under the Act. By the same amendment, model standing orders were also amended with effect from 11 March 1982. Prior thereto, the standing orders of the industrial establishment had come into operation after certification from 2 February 1978. The submission before the Division Bench of the Karnataka High Court was that upon the modification of the model standing orders, the modified model standing orders would apply to the industrial establishment until the certified standing orders were duly amended to make a provision in regard to the age of superannuation. This submission was rejected by the Division Bench in the following observations :-

"What is expressly provided in S.12-A of the Act is that the prescribed Model Standing Orders shall be deemed to be adopted by the establishment commencing from the date on which the Act becomes applicable to the Industrial Establishment and ending with the date on which the Standing Orders as finally certified under the Act come into operation under S.7. The transitory period during which the Model Standing Orders shall be deemed to be applicable to the establishment has been provided with precision. That period is the one between the date on which the Act becomes applicable to the establishment and the date on which the Standing Orders as finally certified under the Act come into operation under S.7. The expression 'commencing from the date on which the Act becomes applicable' is significant. It does not speak of the date on which any amendment to the Act or Rules comes into force. If the contention of Sri Krishnaiah is accepted S. 12-A will get attracted on every occasion when the Act is amended. But what is provided by S.12-A is a fixed date for commencement of the transitory period during which the Model Standing Orders shall be deemed to be applicable, which is the date on which the principal Act came into force. The other termini of the transitory period is the date on which the Standing Orders as finally certified under the Act come into operation under S.7. Here again, the reference is to the final Standing Orders and not to the amendment to the Standing Orders already in operation in the establishment. The contention urged by Sri Krishnaiah, in our opinion, leads to absurd results if the Model Standing Orders become applicable with effect from the date of commencement of the Act as it would be giving retrospective effect to the amended Model Standing Orders when the amendment to the Act itself making provision in that behalf did not provide for giving any retrospective operation. The language of S.12-A makes it clear that the Model Standing Orders shall be deemed to be applicable until the Standing Orders are made as contemplated by the Act. The reference to the Standing Orders, as finally certified under the Act in S.12-A, is obviously to the first Standing Orders made for the establishment after the Act came into force. It therefore follows that if the Model Standing Orders are amended subsequent to the coming into operation of the first Standing Orders in respect of the particular establishment, the same do not automatically become applicable to the establishment concerned. Steps have to be taken to amend the existing Standing Orders in accordance with S.10 of the Act. Until such steps are taken to amend the existing Standing Orders to bring them in conformity with the amended Model Standing Orders, the amended Model Standing Orders will not be applicable to the establishment."

Apart from these reasons which were founded on the language of Section 12-A, the Division Bench also held that under sub-section (1) of Section 10, the certified standing orders could not be modified to bring them in conformity with the subsequently amended model standing orders for a period of six months from the date on which the certified standing orders had come into operation. This was an additional reason why the legislature did not contemplate that the amendment to the model standing orders should come into operation as soon as the amendment had taken effect.

The view which was taken by the Division Bench of the Karnataka High Court was also followed in a judgment of a Division Bench of the Bombay High Court in May & Baker (supra) where it was held as follows :

"7. It is, in our view, clear from the provisions of the Act as aforementioned that the Model Standing Orders are applicable only until such time as amendments thereto have been proposed and certified. Once the amendments have been certified, the Certified Standing Orders operate. An amendment to the Model Standing Orders cannot, therefore, have effect until and unless modification of the Certified Standing Orders to bring them into line with the amended Model Standing Orders is proposed and certified."

A learned Single Judge of the Bombay High Court adopted the same view in Voltas Ltd (supra) following the judgment of the Division Bench of the Karnataka High Court in M C Raju and of the Division Bench of the Bombay High Court in May & Baker.

Now, it is in this background that it is necessary to advert to the two judgments of the Division Benches of this Court.

In Shitla Prasad (supra), a disciplinary inquiry had been held against a conductor of the Uttar Pradesh State Road Transport Corporation12 on a charge of misconduct. The misconduct was held to be proved in the enquiry and the workman was removed from service. In the writ proceedings which he filed to challenge the order of removal, the workman relied upon the provisions of Clause 14(c) of the Model Standing Orders for urging the submission that after he had been found to be guilty of the charges in the disciplinary enquiry, he ought to have been allowed an opportunity of making a representation against the penalty proposed to be imposed on him. On the contrary, the submission of the employer was that under Section 45(2)(c) of the Uttar Pradesh State Road Transport Corporation Act, 1950, service regulations have been framed and Regulation 64 which dealt with the procedure for awarding a penalty did not provide for a second opportunity to show cause against a proposed punishment upon a finding of misconduct. The Division Bench noted that it was an admitted position that the regulations framed by the Corporation had not been notified under section 13-B of the Industrial Employment (Standing Orders) Act, 1946. Section 13-B provides that the Act shall not apply to certain industrial establishments including, among them, those where rules or regulations are notified by the appropriate government in the official gazette. The Corporation did not have certified standing orders nor were the service regulations notified under Section 13-B of the Act of 1946. The Division Bench held that had the service regulations been notified under Section 13-B of the Act, the industrial standing orders would not have applied to the Corporation. However, since the service regulations were not notified under section 13-B, the Model Standing Orders were held to be applicable and the removal from service was held to be invalid in the absence of a second opportunity to show cause as required by the Model Standing Orders.

The decision in Shitla Prasad (supra), dealt with a situation in which the industrial establishment was governed by the Act. Secondly, the industrial establishment did not have certified standing orders which were applicable to the establishment. Thirdly, in consequence, the Model Standing Orders framed under the Act applied to the industrial establishment. Fourthly, the service regulations of the employer were not notified under Section 13-B as a result of which the Model Standing Orders continued to apply. Had the service regulations been notified under Section 13-B, the Model Standing Orders would not have applied. Similarly, if the industrial establishment had certified standing orders, it would have been those certified standing orders which would have been applied and not the Model Standing Orders. Shitala Prasad (supra) is, therefore, not an authority for the proposition or principle that an amendment to the Model Standing Orders would ipso facto apply where the industrial establishments has certified standing orders, without an amendment being made to the certified standing orders in accordance with the provisions of Section 10 (2). The situation in that case was entirely different as we have explained above. The true position must, therefore, be that where an industrial establishment has certified standing orders in place, the conditions of employment would stand governed by the certified standing orders. Any amendment to the Model Standing Orders would not, of its own force, apply by overriding the provisions of the certified standing orders.

The decision of the Division Bench of this Court in Artificial Limbs (supra), dealt with a situation where a workman had been transferred by the employer. The industrial establishment of the employer had certified standing orders in place. The Act was amended after the certification of the standing orders of the industrial establishment by the inclusion of an additional matter in the Schedule. The Schedule to the Act was amended in 1983 as a result of which Model Standing Orders were incorporated on the subject. The Division Bench of this Court declined to follow the judgment in M C Raju (supra) on the ground that a specific and mandatory requirement is contained in sub-section (2) of Section 3 that a provision must be made in the draft standing orders for every matter set out in the Schedule and that Section 4 requires that standing orders shall be certifiable only if a provision is made for all the matters set out in the Schedule to the Act. The Division Bench held that this mandate can be complied with only if a matter which was newly added to the Schedule would also become applicable to the industrial establishment, irrespective of whether the industrial establishment concerned has or does not have certified standing orders. The Division Bench held as follows:

"13. The view expressed by the learned Single Judge as also in M.C. Raju's case (supra) cannot, with respect, be accepted as being in consonance with the clear legislative intent, as it emerges from a plain reading of the provisions of the Act. The manifest legislative objective that stands out, being that all industrial establishments must have applicable to them, one or the other standing orders i.e. either the model standing orders or the certified standing orders. As pointed out earlier that there is the specific and mandatory requirement, as laid down in sub-section 2 of Section 3, that provision must be made in the draft standing orders for every matter set out in the schedule and Section 4 fortifies this, by saying that the standing orders shall be certifiable only if provision is made therein for all matters set out in the schedule to the Act. This mandate can obviously be complied with only if the matters newly added to the schedule, too are applicable to industrial establishments, irrespective of the industrial establishment concerned having or not having certified standing orders.

15. Harmonious construction of the provisions of the Act clearly implies that until and unless a matter included in the model standing orders by their amendment, after certification of standing orders of an industrial establishment, is included by modification in the certified standing orders, the model standing orders as amended shall be applicable to it."

We find ourselves unable to subscribe to the view expressed in the judgment of the Division Bench in Artificial Limbs. The principle which has found acceptance in the judgment of the Division Bench would, in our view, run contrary to the plain meaning and intendment of Section 12-A of the Act. Section 12-A provides for the date on which the Model Standing Orders would become applicable to an industrial establishment and the date on which they would cease to apply. Section 12-A provides a deeming fiction as to when the model standing orders would be treated to be adopted in the industrial establishment. Where the legislature has provided a deeming fiction, the duty of the Court is to give effect to the deeming fiction to its fullest extent. Equally, it is a settled principle of law that a deeming fiction cannot be extended beyond what has been contemplated by the enacting legislature. In enacting Section 12-A13, Parliament has expressly legislated that notwithstanding anything that is contained in Sections 3 to 12, the Model Standing Orders prescribed shall be deemed to be adopted in the establishment commencing from the date on which the Act becomes applicable to the industrial establishment. The Model Standing Orders would, however, cease to be deemed to have been adopted in the establishment with effect from the date on which the standing orders as finally certified under the Act have come into operation under Section 7 for that establishment. Once the standing orders, upon final certification, have come into operation under Section 7 in respect of an industrial establishment, the Model Standing Orders can have no application. Any subsequent amendment to the Model Standing Orders would not override the certified standing orders or make the amended Model Standing Orders applicable. Once the standing orders are duly certified, they come into operation by force of law. The certified standing orders do not stand overridden by a subsequent amendment to the Model Standing Orders in the absence of a legislative provision to that effect. To hold that the certified standing orders would be overridden by Model Standing Orders merely by virtue of an amendment to the latter would be to rewrite the legislative provision and to introduce a new legislative prescription. In a situation where an additional matter has been included in the Schedule to the Act and Model Standing Orders have been framed in pursuance thereto, the Model Standing Orders or the newly included matter would apply to the industrial establishment if the standing orders have not been certified for the establishment. The Division Bench which decided Artificial Limbs has placed emphasis on the provisions contained in Section 3 (2) to the effect that the draft standing orders must make a provision for every matter set out in the Schedule which can be applicable to the industrial establishment and on the provisions contained in Section 4 to the effect that standing orders would be certifiable if a provision is made for every matter set out in the Schedule. Neither Section 3 nor Section 4 provides for the application of Model Standing Orders to the industrial establishment by operation of law. Section 3 mandates that the draft standing orders which are to be sent for certification must contain a provision for every matter in the Schedule. Section 4 provides for when the draft standing orders would be certifiable. What the Division Bench however, with respect, has overlooked is that once the standing orders have been certified and have come into operation by virtue of the provisions of Section 7, any modification of those standing orders thereafter has to be in accordance with the provisions of Section 10 (2). Two situations can conceivably arise. The first may be where the Model Standing Orders are subsequently amended with reference to a matter which was already contained in the Schedule. For instance, in the case at hand, Item 9 of the Schedule dealt with suspension or dismissal for misconduct and the Model Standing Orders as notified on 24 July 1992 made a provision to the effect that it would not be necessary for the workman to mark his attendance during the period of suspension. This provision which was made in the Model Standing Orders was in respect of a matter on which the Schedule already contained a provision namely Item 9. The Model Standing Orders would not ipso facto apply to the industrial establishment nor would an amendment to them have the effect of adding to, supplanting or altering the certified standing orders. Any modification of the certified standing orders would necessarily have to be in accordance with the procedure which is prescribed by Section 10 (2) of the Act. The second situation is where an additional matter is introduced into the Schedule to the Act and a Model Standing Order in terms thereof is introduced. An industrial establishment which has its own certified standing orders would have to follow the procedure which is prescribed in Section 10 (2) by amending its certified standing orders. Under Section 3(2) and Section 4, provision has to be made in the draft standing orders for every matter contained in the Schedule. Once the standing orders have been certified, any alteration or modification has to be brought about under Section 10(2). A remedy is available to apply for a modification of the certified standing orders. Once an industrial establishment to which the Act applies has framed certified standing orders which have come into operation, the applicability of the Model Standing Orders under Section 12-A comes to an end. When Section 12-A had ceased to apply upon the final certification of the standing orders, any amendment thereafter to the Schedule to the Act or the framing of a Model Standing Order in terms of the newly introduced matter will not revive the application of Section 12-A. This could be only if a provision to that effect was contained in Section 12-A, which Parliament has not made. The Model Standing Orders cease to apply once the standing orders are finally certified. Any subsequent amendment to the Model Standing Orders, in order to apply to the industrial establishment, can only be in the form of a modification to the certified standing orders in accordance with law. The same principle must apply to both the situations.

While analysing the issue which has been referred to the Full Bench, we must note the absence, in the State of Uttar Pradesh, of a provision analogous to Section 2-A which was inserted into the Industrial Employment (Standing Orders) Act, 1946 by Bombay Act 21 of 1958. Section 2-A, as it stands in its application to the State of Maharashtra, provides as follows:

"2A. Application of model standing orders to every industrial establishment.- (1) Where this Act applies to an industrial establishment, the model standing orders for every matter set out in the Schedule applicable to such establishment shall apply to such establishments from such date as the State Government may by notification in the official Gazette appoint in this behalf;

Provided that nothing in this section shall be deemed to affect any Standing Orders which are finally certified under this Act and have come into operation under this Act in respect of any industrial establishment before the date of the coming into force of the Industrial Employment (Standing Orders) (Bombay Amendment) Act, 1957;

(2) Notwithstanding anything contained in the proviso to Sub-section (1) model standing orders made in respect of additional matters included in the Schedule after the coming into force of the Act referred to in that proviso (being additional matters relating to probationers or badlis or temporary or casual workmen) shall unless such model standing orders are in the opinion of Certifying Officer less advantageous to them than to corresponding standing orders applicable to them under the said proviso also apply in relation to such workmen in the establishments referred to in the said proviso from such date as the State Government may, by notification in the Official Gazette, appoint in this behalf."

The effect of Section 2-A is that Model Standing Orders apply to an industrial establishment once a notification is issued by the State Government. However, where there are finally certified orders which have come into operation before the enforcement of the Industrial Employment (Standing Orders) (Bombay Amendment) Act, 1957, such certified standing orders are saved. However, if the Model Standing Orders have been made after the enforcement of the Amending Act of 1957 relating to probationers, badlis, temporary or casual workers, they would also apply unless they are found by the Certifying Officer to be less advantageous than the certified standing orders which were certified before the Amending Act. This position was explained in a judgment of a Full Bench of the Bombay High Court in Gangadhar Balgopal Nair Vs Voltas Limited14 delivered on 15 December 2006. It was in view of the provisions of Section 2-A that the Full Bench of the Bombay High Court found itself unable to agree with the "broad statement of law" which was laid down by the Division Bench in May & Baker that an amendment to the Model Standing Orders cannot have effect until and unless a modification of the certified standing orders to bring them into line with the amended Model Standing Orders is proposed and certified. The Full Bench held as follows:

"In view of the conclusion we have reached earlier, we find ourselves unable to agree with the broad statement of law that "an amendment to the model standing orders cannot, therefore, have effect until and unless modification of the certified standing orders to bring them into line with the amended model standing orders is proposed and certified". As we have observed, an amendment to the model standing orders would not apply only where the industrial establishment has standing orders which are finally certified before 15.1.1959 i.e. before coming into force of the Industrial Employment (Standing Orders) (Bombay Amendment) Act, 1957 in accordance with Section 2A. Where the standing orders are subsequent to 15.1.1959, the model standing orders would apply automatically without any amendment to the certified standing orders."

It was in the context of the provisions of Section 2-A as applicable to the State of Maharashtra that the Bombay High Court in its Full Bench decision preferred the view of this Court in Artificial Limbs to that of the Karnataka High Court in M C Raju. The judgment of the Full Bench of the Bombay High Court must be understood in the context of the provisions of Section 2-A as applicable to the State of Maharashtra which came up for consideration in relation to the State of of Maharashtra. Section 2-A makes a special provision by which Model Standing Orders apply to an industrial establishment when made, unless there are certified standing orders prior to the enforcement of the Bombay Amendment of 1957. It is necessary to distinguish this position as it obtains in Maharashtra, which was the subject matter of the judgment of the Full Bench, from the position in Uttar Pradesh where there is no analogous state amendment similar to Section 2-A noted above.

Conclusion

We, accordingly, answer the reference to the Full Bench by holding that amendments made in the Model Standing Orders do not automatically apply to the standing orders of the establishment which have been finally certified under Section 10 of the Industrial Employment (Standing Orders) Act, 1946. Any modification of the certified standing orders can be made in accordance with the procedure which is prescribed in Section 10 (2) of the Act.

The second question which has been formulated for the reference is not answered since it is common ground between the learned Senior Counsel appearing on behalf of the petitioner and the learned Additional Advocate General that on the facts of the case, the second question does not arise for consideration.

The reference to the Full Bench is accordingly answered. The proceedings shall now be placed before the regular Bench for disposal in the light of the question so answered.

Order Date :- 28.8.2015

AHA

(Dr D Y Chandrachud, CJ)

(Dilip Gupta, J)

(Yashwant Varma, J)

Hon'ble Dr D Y Chandrachud, CJ

Hon'ble Dilip Gupta, J

Hon'ble Yashwant Varma, J

Reference answered.

For orders, see order of date passed on separate sheets.

Order Date :- 28.8.2015

AHA

(Dr D Y Chandrachud, CJ)

(Dilip Gupta, J)

(Yashwant Varma, J)