North Eastern Electric Power vs . North Eastern Electric Power
2022 Latest Caselaw 703 Meg

 Serial No. 01
 Supplementary List
                      HIGH COURT OF MEGHALAYA
                            AT SHILLONG

WP(C) No. 367 of 2021
                                         Date of Decision: 01.12.2022

North Eastern Electric Power Vs.        North Eastern Electric Power
Corporation Ltd. (NEEPCO)               Corporation Ltd. & Ors.
Workers Union & Ors.

Coram:
              Hon'ble Mr. Justice H. S. Thangkhiew, Judge


Appearance:
For the Petitioner(s)       : Mr. H.L. Shangreiso, Sr. Adv. with
                              Ms. A. Kharshiing, Adv.

For the Respondent(s)       : Mr. V.K. Jindal, Sr. Adv. with

Mr. S. Jindal, Adv.

Mr. V. Kumar, Adv.

i)    Whether approved for reporting in                   Yes/No
      Law journals etc:

ii)   Whether approved for publication                    Yes/No
      in press:


                        JUDGMENT AND ORDER

1. The brief facts of the case are that the respondent

Corporation NEEPCO by an office order dated 22.04.2021 in the

Conduct Discipline and Appeal Rules, 1980 governing all employees,

had inserted Sub-Rule (iii) in Rule 8 of the said Rules which stipulated

that no employees to whom the said Rules apply shall seek membership

of any registered trade union or indulge in trade union activities.

The petitioners 1, 2 and 3 being the Employees Workers

Union in the NEEPCO and its office bearers petitioners 4, 5 and 6,

being aggrieved by the said amendment have assailed the same on the

core ground that Rule 8 (iii) suppresses the fundamental rights of the

petitioners guaranteed under the Constitution of India, and as such have

prayed for setting aside and quashing the impugned Sub-Rule.

2. It has been argued on behalf of the petitioners by the

learned Senior counsel Mr. H.L. Shangreiso that the Trade Unions Act,

1926, being a special law has inbuilt provisions regulating the purpose

for formation, registration, membership, dis-membership of trade

unions, not only for the workmen but for other employees in their

positions as Executives or Supervisors engaged in an establishment or

industry. He submits that it also encompasses non-employee and

outsiders with some exceptions. The learned Senior counsel contends

that those categories as provided under Section 22 (3) of the Trade

Unions Act, 1926 can become members of trade union and also office

bearers, and as such in NEEPCO, neither the Conduct Discipline and

Appeal Rules (CDA), Industrial Employment (Standing Orders), Act,

1946, or NEEPCO Standing Orders 1980, can prevent or take away the

fundamental and legal rights of the petitioners. It is also submitted that

the writ petitioners' association since their formation have been

functioning well in coordination with the respondent NEEPCO and that

it is not the case of the respondent, that the objectives or activities of

the writ petitioners' association have now become contrary to law, to

warrant the insertion of the impugned Sub-Rule. It is also contended

that the Industrial Disputes Act, the Trade Unions Act and Standing

Orders or for that matter any other statute, have any legal bar

prohibiting non-workmen such as Supervisors, from being involved in

trade union activities.

3. The learned Senior counsel then submits that the

respondent NEEPCO, cannot seek to maintain that the impugned Sub-

Rule is a reasonable classification, or restriction under Article 14 or

Article 19 (4) of the Constitution, inasmuch as, the field is already

covered by the Trade Unions Act, 1926 read with the Industrial

Disputes Act, 1947. He further submits that the power vested in

NEEPCO, is only to regulate their normal service conditions under the

CDA Rules. It is also submitted that the NEEPCO through the

impugned Sub-Rule, is incompetent to take away the membership, or

impede the formation of trade unions, which is guaranteed under

Article 19 (1) (c) of the Constitution. He submits that the impugned

Sub-Rule which confers sweeping unregulated and unrestricted powers

upon the employees is arbitrary and unreasonable and against

democratic values. In support of these arguments, the learned Senior

counsel has relied upon the following judgments: -

i) O.K. Ghosh vs. E.X. Joseph reported in AIR 1963 SC 812 -

(Para 10 to 12)

ii) Smti Damyanti Naranga vs. Union of India (5B) reported in (1971) 1 SCC 678 - (Para 10)

iii) State of U.P. vs C.O.D Chheoki Employees Corporative Society Ltd. reported in (1997) 3 SCC 681 - (Para 6 and 16)

iv) Andhra Pradesh Dairy Development Corporation Federation vs. B Narasimha Reddy (2B) reported in (2011) 9 SCC 286 - (Para 21, 26 and 29)

v) Board of Control of Cricket vs. Cricket Association of Bihar reported in (2016) 9 SCC 286 - (Para 57 to 59)

vi) Bikajan Cement Corporation Employees Union vs. Cement Corporation of India Ltd. reported in (2004) 1 SCC 142 - (Para 13 to 17)

vii) SBI Staff Association vs. SBI (2B) reported in AIR 1996 SC 1685 - (Para-8)

viii) Tirumala Tirupiti Tivasthanam vs. Commission of Labour reported in (1995) Supp. 3 SCC 653 - (Para 3 and 4)

ix) Judgment and Order dated 28th Sept. 2001 passed by Karnataka High Court in the case of Government Tool Room and Training vs. Assistant Labour Commissioner - (Para- 2,6, 8 to 10)

x) Gulf Goans Hotels Company Ltd. vs. Union of India reported in (2014) 10 SCC 673 - (Para 25)

4. The learned Senior counsel submits that as the question of

maintainability of the writ petition has also been raised, he contends

that the instant writ petition has been filed by 3 trade unions along with

3 individual citizens who are employees of NEEPCO and office bearers

and as such, there are is no bar to seeking remedy under Article 226. In

this context, reference has also been made to the following decisions in

support of his arguments:-

(i) State Trading Corporation of India Ltd. Vs. Commercial Tax Officer (5B) reported in AIR 1963 SC 1811- (Para 23)

(ii) Tata Engineering and Locomotive Company Ltd. Vs. State of Bihar (5B) reported in AIR 1965 SC 40 - (Para 26)

(iii) Rustom Gavasjee Copper vs. Union of India (9B) reported in (1970) 2 SCC 788 - (Para 10, 11, 12 & 15)

(iv) Bennet Coleman and Company vs. Union of India (5B) reported in (1972) 2 SCC 788- (Para 11-22 and 88 to 90)

(v) State of Gujarat vs. Ambica Mills Limited (5B) reported in (1974) 4 SCC 565- (Para 24 and 27)

(vi) Excel Wears vs. Union of India (5B) reported in (1978) 4 SCC 224- (Para 35)

(vii) Delhi Cloth and General Mills Company Ltd. Vs. Union of India (3B) reported in (1983) 4 SCC 166 - (Para 12) reported in (2016) 8 SCC 535 - (Para 57 to 59)

The learned Senior counsel concludes his submissions by

praying that the impugned Sub-Rule be set aside and quashed for the

ends of justice and equity.

5. The learned Senior counsel for the respondent Corporation,

Mr. V.K. Jindal, has opened his submissions by submitting that though

the respondent Corporation is a State within the meaning of 'other

authorities' however it is not a statutory body, but a company registered

under the Companies Act, 1956. The power to make bye laws he

submits, is prescribed in Bye Law No. 96 of the Memorandum and

Articles of Association of the company, which confers power upon the

Board to make bye laws with regard to the conduct of business of the

company, and as such the corporation can vary and amend such bye

laws. Learned Senior counsel then submits that the position with regard

to the status of the impugned provision, is no longer in dispute as both

the parties herein, as submitted before the Division Bench of this Court,

agree that these are not statutory rules. It is submitted that in exercise

of this power, the Board of Directors formulated the NEEPCO CDA

Rules, 1980 and under such vested powers had also incorporated Rule

8(iii). Mention is also made that the writ petitioners 1, 2 and 3 are trade

unions and the petitioners No. 4, 5 and 6 in their individual capacity

not being workmen, there is no violation of the petitioner's rights under

Article 19 (1) (c) or Article 14 of the Constitution of India. Learned

Senior counsel further submits that the protection of Article 19 (1) (c)

is not available to the petitioners' unions or to the petitioners No. 4, 5

and 6 as unions are not citizens, and though petitioners No. 4, 5, 6 may

be citizens, however in this case Article 19 (1) (c) will not be

applicable. Learned Senior counsel relies upon the judgment in the case

of Board of Control for Cricket vs. Cricket Association of Bihar &

Ors. reported in (2016) 8 SCC 535, wherein it has been held that Article

19 is available only to citizens and that once a union is formed, the right

guaranteed under Article 19 (1) (c) comes to an end and there is no

concomitant right to carry forward the aims and objectives of the union.

Reference has also been made to a 5 Judge Bench judgment of the

Hon'ble Supreme Court in the case of Tata Engineering and

Locomotive Company Ltd. vs. State of Bihar reported in AIR 1965 SC

40 on the same point.

6. It was then argued by the learned Senior counsel, that there

is a difference, of a right to form a trade union and a right to be member

of a trade union and that these rights, are governed by statutory

provisions such as under the Trade Unions Act, and only on fulfilling

the necessary conditions can one become a member. He submits that

the employees of the Corporation are categorized into two broad

categories, workmen who are governed by Standing orders and non-

workmen who are governed by Bye Laws formulated by the respondent

Corporation. It is also submitted that the impugned Rule 8 (iii), does

not prohibit any of the non-workmen to form their own association or

union, and get it registered under the Trade Unions Act. To substantiate

these arguments, learned Senior counsel has illustrated the history of

the workers' union in the NEEPCO and submits that initially the union

consisted of only workmen, but by promotion and career growth, some

workmen were promoted to the post of Supervisors and Executives,

such as the petitioners No. 4, 5 and 6, but who however, continued to

be members of the workers union. It is submitted that with the passage

of time in 2017, the Federation of NEEPCO Employees Union which

comprised of Workmen, Supervisors and few Executives was formed,

but that besides this Union, other associations of non-workmen existed

which were also registered under the Trade Unions Act. It is submitted

that the membership of the said associations of non-workmen are

governed by the NEEPCO CDA Rules, 1980 which is not applicable to

workmen as defined under Section 2(s) of the Industrial Disputes Act,

1947. He therefore contends that since the CDA Rules, 1980 does not

apply to workmen and the incorporation of Rule 8 (iii) also therefore

does not apply to them, the petitioners' trade union of workmen have

no right to assail the validity of the Rule 8 (iii) of the CDA Rule.

7. Having heard learned counsel for the parties, the question

that arises for consideration is whether Supervisory Officers and

Managerial Staff, who are governed by the NEEPCO CDA Rules can

no longer be part of trade unions in the Corporation or indulge in trade

union activities. The writ petitioners 6 in all, consisting of 3

associations and 3 office bearers have assailed the insertion of Rule 8

(iii) in the said CDA Rules, which reads as follows: -

"Rule 8 (iii) Joining of Trade Union by Employees. No employees to whom this rule apply shall seek membership of any registered trade union or indulge in trade union activities"

8. Before coming to the main issue, the question of

maintainability, has also been raised by the respondent Corporation on

the main ground that the petitioners' union are not citizens, and though

the petitioners No. 4, 5 and 6 are citizens, the protection of Article 19

(1) (c) is not available to them. This ground has been made on the basis

that Article 19 (1) (c) guarantees the right to citizens to form

associations and unions; and comes to end as soon as such union has

formed. Though this contention is perhaps the correct position, as for

as this aspect is concerned, however, the bigger picture in the instant

case concerns the restrictions that had been imposed on the supervisory

staff who are governed by the CDA Rules, who by the insertion of Rule

8 (iii) are being divested of the membership which they have enjoyed

hereinbefore.

9. The Trade Unions Act, 1926 is a Special Act and which

provides for the registration of trade unions and a trade union regulates

the relations between workmen or between employers. Who is a

workman, has been defined in Section 2 (s) of the Industrial Disputes

Act, and under the said definition, it includes all persons employed in

trade or industry. Section 2 (s) (1) (2) (4), however, list the exceptions

of persons in industry who are not considered workmen. Workmen in

the respondent Corporation are not governed by the CDA Rules, but

are governed by the approved Standing Orders formulated by the

Corporation, under the provisions of the Industrial Employment

(Standing Orders) Act, 1946, whereas non-workmen are governed by

the CDA Rules. Therefore, as urged and shown by the respondent

Corporation, it is clear that the petitioners No. 4, 5 and 6, though

members of the petitioners 1, 2 and 3 trade unions, are governed by

different Rules/Orders i.e. the CDA Rules. Though, there are no

restrictions in forming trade unions or being a member thereof, in the

present case in the considered view of this Court, the inclusion of Rule

8 (iii) is to be examined from the point of view as to whether it is a

reasonable restriction.

10. It is noted that within the Corporation itself, there exists

other associations of non-workmen, such as Diploma Engineers

Association, Association of Engineers, which are also registered under

the Trade Unions Act, and the members of the said associations of non-

workmen are governed by the NEEPCO CDA Rules. There being a

classification as to the nature of services rendered and duties

discharged, the basis on which respective Rules/Orders are applicable

as observed earlier, this Court cannot ignore the fact that there is a clear

distinction between the workmen and Supervisory staff. Rule 8 (iii)

however, on a plain reading thereof, has given a blanket stipulation that

no employee to whom this rule applies, shall seek membership of any

registered trade union or indulge in trade union activity. Couched in

these terms, by the application of this Rule, the participation of the

Supervisory staff who are governed by the CDA Rules therefore, will

be circumscribed and governed by this rule which will severely limit

any union activity. On this aspect, this Rule by totally extinguishing

the rights of the Supervisory staff is therefore unsustainable. The

Hon'ble Supreme Court in the case of Tirumala Tirupati

Devasthanam vs. Commissioner of Laboour & Ors. reported in

(1995) 3SCC 653 at Para-4 has held as follows :-

"4. It would be apparent from this definition that any group of employees which comes together primarily for the purpose of regulating the relations between them and their employer or between them and other workmen may be registered as a trade union under the Act. It cannot be disputed that the relationship between the appellant and the workmen in question is that of employer and employee. The registration of the association of the said workmen as a trade union under the Act has nothing to do with whether the said wings of the appellant are an industry or not. We are, therefore, of the view that the High Court went into the said issue, although the same had not arisen before it. Since the findings recorded by the High Court on the said issue, are not germane to the question that falls for consideration before us, we express no opinion on the same and leave the question."

This judgment has therefore laid down that any group of

employees may be registered as trade union under the Act for the

purposes of regulating the relations between them and their employer.

11. What follows from this discussion therefore is that no

authority can dis-allow or limit the right of any group of employees to

form and be registered as a trade union under the Act, if all legal

requirements are met. To this extent therefore, the impugned Rule 8

(iii), cannot pass judicial scrutiny. However, on the other hand, as put

forth by the respondent Corporation, the insertion of the Rule was with

the object of putting a reasonable restriction on the activities of only

the employees who are governed by the CDA Rules. This Court on this

aspect of the matter accepts the contentions, in view of the fact that the

workmen are governed by the Standing Orders and the Supervisory

staff by the CDA Rules, and due to this distinction, the relations with

the respondent Corporation i.e. of the workmen and Supervisory staff

stand on a different footing. The object of the Rule to come within the

meaning of a reasonable restriction is therefore met, but the language

of Rule 8 (iii) however, conveys otherwise, as there can be no

restriction to being part of a trade union as this would be against the

very object of the Trade Unions Act.

12. In this view of the matter therefore, as both the aforesaid

categories of employees are governed by a different set of Rules and

the problems, demands of workmen are different from the problems

and demands of non-workmen, it stands to reason that a restriction was

sought to be put in, to ensure that workmen and non-workmen be

represented by the respective unions, as this would be in the interest of

the rights of the workers in the respondent Corporation. In the

considered view of the Court, the respondent Corporation is well within

its rights to classify its employees into two categories i.e. workmen and

non-workmen with the objective to apply the provision of various

Industrial laws to the workmen and confer benefit upon them. This

should not mean however, that the management cadre employees

cannot form unions of their own and engage in trade unions activities

for the benefit of its members.

13. The CDA Rules are not statutory rules, and this position is

undisputed as the power to make bye laws is conferred by the

Memorandum and Articles of Associations of the Company upon the

Board. However, it cannot be said that the protection of Article 19 (1)

(c) will not be available to the Supervisory staff, who though may be

restricted from joining the workers union however, cannot be deprived

of the right of forming and becoming members of their own trade

union. The object of the classification and restriction though finding

approval by this Court, however the text of Rule 8 (iii) which conveys

otherwise is found to offend Article 19 (1) (c) and as such it is struck

down.

14. In view of the observations and discussions made hereinabove,

this Court will not further allude to the authorities placed by the

respective parties and this writ petition stands allowed to the extent

indicated above and is accordingly disposed of.

15. No order as to costs.

JUDGE

Meghalaya 01.12.2022 "V. Lyndem-PS"