Delhi High Court

The Manager, Khadi Gramodyog ... vs The General Secretary, Khadi ... on 9 July, 2015

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+      W.P.(C) 1443/2007

                                   Judgment reserved on: 25.05.2015
%                                  Judgment pronounced on: 09.07.2015
       THE MANAGER, KHADI GRAMODYOG BHAWAN
                                                  ..... Petitioner
                  Through: Mr.Satyapal Singh, Advocate

                          versus

       THE GENERAL SECRETARY, KHADI GRAMODYOG
       BHAWAN KAMGAR MANCH
                                              ..... Respondent
                   Through: Mr.Yashraj Singh, Mr.Amit Gupta
                            and Ms.Sumati Jumrani, Advocates

       CORAM:
       HON'BLE MS. JUSTICE DEEPA SHARMA

JUDGMENT

1. Vide the present writ petition, the petitioner has challenged the award

dated 10.10.2006 whereby the learned presiding officer of the Labour Court

had held that the respondent-workmen of the petitioner were entitled to get

payment of overtime at rate of double the normal wages.

2. In the present case, the petitioner had been giving their workmen the

overtime wages at the double rate pursuant to Section 8 of the Delhi Shop

and Establishment Act, 1954 (hereinafter referred to as 'the Act') which

mandates payment of overtime wages at twice the rate of normal wages.

These wages were fixed by the petitioner vide Office Order No. 1060 dated

05.02.1977 and continued to follow the said Office Order even after the 4th

Pay Commission. Thereafter the petitioner had issued an Office Order

No.1879 of 13.11.2000 whereby the rate of overtime wages was reduced and

lesser wages were paid than the wages the respondents were entitled to

pursuant to Section 8 of the Act. The issue before the Labour Court was

whether the action of the management pursuant to its Office Order No.1879

dated 13.11.2000 was legal and justified. After considering the provisions of

Section 8 of the Act and other provisions of the law including the fact that

the management is covered under the Act and thus bound to pay the

overtime as per Section 8 of the Act and in the garb of the Office Order

cannot take away statutory rights of the respondents. The award was passed

in favour of workers of the petitioner.

3. The petitioner has challenged the said order on the grounds that the

petitioner i.e. Khadi Gramodyog Bhawan is a trading unit of Khadi &

Village Industries constituted by an Act of Parliament viz. Khadi & Village

Industries Commission Act, 1956 (hereinafter referred to as 'the KVIC

Act'). It is contended that under the KVIC Act, the commission has the

power and authority to regulate its budget and with the previous sanction of

the Central Government by notification in the Official Gazette, make

regulations relating to the terms and conditions of appointment and service

and the scales of pay of officers and servants of the Commission and

therefore, the Office order dated 13.11.2000 is a valid order and binding on

the employees of the Khadi and Village Industries. It is submitted that most

of the Khadi Udyog Bhawans are running at a loss which in totality is the

loss of the Khadi and Village Industries. It is submitted that in order to

streamline the payment of wages and allowance to its employees, the central

government had appointed 5th Pay Commission and the 5th Pay Commission

in its reports recommended discontinuance of overtime allowance except for

staff car driver, operational staff and industrial employees and in order to

bring uniformity in the payment of overtime benefits to all its employees,

the Office Order no. 1879 dated 13.11.2000 was issued which provides

payment of the overtime at uniform basis i.e. normal rates of the wages

payable during the normal working hours.

4. It is contended that while enacting KVIC Act in 1956, the Parliament

was conscious of the provisions of the Delhi Shop and Establishment Act,

1954 and KVIC Act is a special law whereas the Delhi Shop and

Establishment Act, 1954 is general law and therefore provisions of KVIC

Act has override provisions on the Delhi Shop and Establishment Act, 1954.

It is further contended that the provisions of the Delhi Shop and

Establishment Act, 1954 are inapplicable to the petitioner who are governed

by the rules and regulations made by the Central Government and also under

Section 26 of the KVIC Act. It is prayed that the Award dated 10.10.2006 be

quashed.

5. The petition is contested by the respondents. It is submitted that the

Delhi Shop and Establishment Act, 1954 is applicable on Khadi Gramodyog

Bhawan as is clear by the fact that its name is mentioned in the Schedule of

the Act and therefore, the Khadi Gramodyog Bhawan is bound to follow the

statutory obligations under Section 8 of the Act. It is submitted that the

petitioner is covered under definition of 'Establishment' provided under

Section 2 (9) of the Act and also under the definition of 'Shop' given under

Section 2 (27) of the Act. It is also a 'Commercial Establishment' within the

meaning of Section 2 (5) of the Act. It is submitted that the learned Labour

Court does not suffer with any illegality and the petition is frivolous and

liable to be dismissed.

6. I have heard the arguments and given careful consideration to the

rival contentions of the parties.

7. The Office Order 1060 dated 05.02.1977 which was passed by the

Chief Executive Officer of the petitioner reads as under:

              "No.Adm-II/280/Trad.                          5-2-1977

                           OFFICE ORDER NO.1060

                      The Managers of the Khadi Gramodyog Bhavans

are hereby authorized to make payment of overtime allowances to the staff of the Bhavans under control as admissible under the provisions of the Shops and Establishments Act applicable to the respective Units. The payment of overtime allowance shall be regulated strictly according to the provisions of the Shops and Establishment Act subject to the amounts provided in the approved annual budgets of the respective Unit. Suitable provisions for grant of overtime allowance may therefore have to be made by the Managers of the respective Bhavans in their budget proposals and submitted to the Director, Marketing for taking further action.

In order to enable the Directors, Marketing to review the position about disbursement on account of overtime wages/hours of work, a quarterly report should be submitted by the Managers of the respective Bhavans to the Director Marketing by 5th of the month following the quarter to which the review relates. The said report for the quarter ending 31.03.1977 should accordingly be submitted by 01.04.1977.

Sd/-

J.N.Tiwari For Chief Executive Officer"

8. The aforesaid Officer Order makes it abundantly clear that the

management is conscious of the fact that the provisions of the Delhi Shop

and Establishment Act, 1954 are applicable on its employees. Accordingly,

the petitioner had been making the payment of the overtime wages to its

employees at double the rate of the wages as provided under Section 8 of the

Act. This Office Order also clearly shows that the payment of overtime

allowances shall be regulated strictly according to the provision of the Delhi

Shop and Establishment Act, 1954 subject to the amounts provided in the

approved annual budgets of the respective Unit. This office order is in

consonance of Section 8 of the Act.

9. The sole question for consideration is if the statutory right accrued to

the respondents under the Act can be taken away by an Office Order

no.1879 dated 13.11.2000. It is interesting to note down para 2 of this office

order, which reads as under:

"2. With a view to ensure that a uniform policy for payment of Overtime Allowance is followed by all Departmental Sales Outlets/Trading Units under the Commission, it is brought to the notice of In-charge of all Departmental Sales Outlets/Trading Units, all Zonal Heads, State/Regional Directors of KVIC that pending receipt of orders for Overtime Allowance as per 5th Pay Commission's recommendation, the existing OTA orders as applicable in the 4th Pay Commission shall continue to be followed."

10. This paragraph shows that vide this office order all the Departmental

Sales Outlets/Trading Units under the Commission had been directed to

continue to pay the existing OTA as applicable in the 4 th pay Commission,

till pending receipts of the orders for overtime allowance as per 5 th Pay

Commission's recommendation. The petitioners have not placed on record

any orders of payment of overtime allowance as per 5 th Pay Commission's

recommendation. Even vide this order the commission had recommended

the payment of existing OTA as applicable in 4th Pay Commission. There is

no dispute that pursuant to 4th Pay Commission and even earlier pursuant to

Office Order No.1060 dated 05.02.1977 according to the provisions of the

Act, the petitions were paying the overtime at double the rate as provided

under Section 8 of the Act. It is also apparent from Clause 27 of the KVIC