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citation codes

Case Number

Civil Misc. Writ No. 1254 of 1961 connected with Civil Misc. Writ No. 1346 of 1961 and Civil Misc. Writ No. 1347 of 1961

Judges

V.G Oak, J.

Acts

Section 3 of the Uttar Pradesh Industrial Disputes Act, 1947 (hereafter referred to as the Act).
sub-clause (f) and (g) of clause (1) of Article 19 of the Constitution. Clause (b) of Section 3
matter.11. Section 3 of the U.P Industrial Disputes Act, 1947
Section 3 of the U.P Industrial Disputes Act13.
section 120 of the Local Government Act, 1888,

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Smart Summary

Structured Summary of the Court's Opinion (V.G. Oak, J.)

Factual and Procedural Background

These are three connected writ petitions challenging the same Government Notification issued under Section 3 of the Uttar Pradesh Industrial Disputes Act, 1947. The petitions raise identical questions of fact and law and were heard together; the facts are set out with reference to Writ No. 1254 of 1961 (Messrs. J.K. Jute Mills Company Limited, Kanpur).

Key factual and procedural points in the opinion:

On 25-8-1960 the Government of India constituted a Central Wage Board for the jute industry (Annexure A).
The Central Wage Board recommended interim relief by way of additional wages for 1960 and 1961; the Central Government accepted that recommendation (resolution dated 25-1-1961, annexure D).
The State Government of Uttar Pradesh issued a notification under Section 3 of the U.P. Industrial Disputes Act on 25-4-1961 directing the petitioners to grant interim relief to their workmen with effect from 1-10-1960 (annexure H).
The petitioners objected and filed the writ petitions challenging the State Government notification. Counter-affidavits were filed on behalf of respondent No. 1 (Sri Har Swarup Sharma, Up Sachiv, U.P. Government, Labour Department) and respondent No. 2 (president of the J.K. Jute Mill Mazdoor Union, Kanpur).
The Central Wage Board was not impleaded as a party to these petitions; the Court noted that it functions at Calcutta and observed it had no jurisdiction to quash the Board's recommendations.
All three petitions were dismissed by the Court and ordered to be dismissed with costs (one set of costs in favour of respondent No. 1 and another in favour of respondent No. 2).

Legal Issues Presented

Whether the State Government, in issuing the notification under Section 3 of the U.P. Industrial Disputes Act, 1947, lawfully exercised the discretion conferred upon it or failed to apply its mind to the statutory criteria.
Whether clause (b) of Section 3 of the Act (authorising the State Government to require employers or workmen to observe specified terms and conditions of employment) is invalid as an unreasonable restriction on rights under Article 19(1)(f) and (g) of the Constitution.
Whether the State Government's order (dated 25-4-1961) directing payment of extra wages effective from 1-10-1960 impermissibly gives retrospective effect to clause (b) of Section 3 of the Act.
Whether any challenge to the composition or membership of the Central Wage Board (as reflected in the nomination of certain employer representatives) undermines the validity of the recommendation or the subsequent State notification.

Arguments of the Parties

Petitioners' Arguments

The petitioners objected to the membership of the Central Wage Board, asserting that specific nominated employer members (Mr. Pilkington and Mr. Goenka) did not represent the three petitioners.
They contended the Wage Board ignored basic principles for fixation of wages, relying on authorities cited as Express Newspaper (Private) Limited v. Union of India and Lipton Ltd. v. Their Employees.
They argued that the State Government failed to exercise the discretion vested in it under Section 3, relying on a passage in paragraph 13 of the counter-affidavit by Sri Sharma which stated the State Government felt unable to differ from the Wage Board's conclusions.
They contended that clause (b) of Section 3 is invalid as a subjective grant of power and offends Article 19(1)(f) and (g) of the Constitution.
They argued that the State Government's order was retrospective because it required payment of extra wages with effect from 1-10-1960, although the order was dated 25-4-1961.

Respondents' Arguments

Respondents pointed out that the Central Government had constituted the Wage Board and accepted its recommendations; the State Government acted on those recommendations.
Respondents emphasised that the Wage Board is not a statutory body and the State Government was not bound to accept its recommendations; nonetheless it treated the recommendations as fit to enforce under Section 3.
Regarding retrospectivity, respondents relied on the authority of State of Uttar Pradesh v. Basti Sugar Mills Co. Ltd., arguing that directing payment for prior work does not necessarily amount to giving retrospective effect to clause (b) of Section 3.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Express Newspaper (Private) Limited v. Union of India	Cited by petitioners as authority for "basic principles for fixation of wages."	The Court noted the citation but observed that neither party filed the report of the Central Wage Board; therefore the Court could not determine whether the Board considered relevant factors and did not further rely on this precedent in its decision.
Lipton Ltd. v. Their Employees	Cited by petitioners as another authority for principles of wage fixation.	The Court recorded the citation but, for the same reason as above (absence of the Board's report), did not make detailed application of this precedent and declined to base its decision on it.
Rex v. Stepney Corporation	Illustrates that a public or administrative body must exercise discretion (and may be compelled to do so) rather than follow a rigid external practice; mandamus can require consideration of relevant facts.	The Court used the case as an example of the principle that discretion must be exercised; it then examined annexure H and Section 3 to determine whether the State Government had applied its mind and concluded the State Government did consider matters mentioned in Section 3's opening paragraph.
State of Uttar Pradesh v. Basti Sugar Mills Co. Ltd.	Two key points: (1) Clause (b) of Section 3 cannot be given retrospective effect; (2) Ordering payment of bonus for work done in previous years does not amount to giving retrospective effect to clause (b) because such payment can be attached as a condition of future employment.	The Court relied on this decision to hold that although the impugned order directs payment for months in 1960, such payment can be regarded as a condition of employment for 1961 and therefore need not be treated as retrospective application of clause (b). The Court applied the principle to distinguish bonus and additional wages but found the distinction immaterial for the purpose of determining retrospectivity.

Court's Reasoning and Analysis

The Court's reasoning proceeded in a structured sequence, applying statutory text, evidentiary record, and precedent as follows:

Constitution and role of the Central Wage Board:
- The Court observed the petitioners did not challenge the Government resolution constituting the Central Wage Board but criticised particular nominated employer members. The Court found no specific allegation of bias and therefore declined to give further consideration to the Board's constitution.
- The Court noted that neither party produced the Wage Board's report; hence it could not determine whether the Board had considered relevant factors in fixing wages.
- The Wage Board was not impleaded as a party; the Court observed it had no jurisdiction to quash recommendations of a body functioning at Calcutta, reinforcing a practical limit on what these writ petitions could achieve regarding the Board's recommendations.
Whether the State Government exercised statutory discretion under Section 3:
- The Court set out the text of Section 3 of the U.P. Industrial Disputes Act and examined annexure H (the impugned notification).
- Annexure H's opening paragraphs mirrored the conditions listed in Section 3 and explicitly stated that, in the opinion of the State Government, it was expedient to enforce the Wage Board's recommendations "for securing public convenience and maintenance of public order and supplies essential to the life of the community and for maintaining employment."
- On that basis the Court concluded the State Government had considered matters mentioned in Section 3 and thus had applied its mind. The Court held that the omission to decide the merits of the Wage Board's recommendation was not a serious defect in the State Government's order.
Validity of clause (b) of Section 3 vis-à-vis Article 19(1)(f) and (g):
- Petitioners argued clause (b) was invalid as an unreasonable, subjective discretion affecting rights under Article 19(1)(f) and (g).
- The Court reasoned that the opening paragraph of Section 3 conditions the exercise of the power (requiring the State Government to be of the opinion that the order is necessary or expedient for specified public purposes). This safeguard meant clause (b) constituted a reasonable restriction on Article 19 rights and therefore was valid.
Retrospectivity of the State Government's order:
- The Court addressed the contention that directing payment from 1-10-1960 (even though the order was dated 25-4-1961) amounted to retrospective legislation/administration.
- The Court relied upon the Supreme Court decision in State of U.P. v. Basti Sugar Mills Co. Ltd., which held clause (b) cannot be given retrospective effect but that ordering payment for prior years may merely attach a condition to future employment rather than operate retrospectively.
- The Court found the distinction between bonus (in Basti Sugar Mills) and additional wages (in the present case) to be of little practical importance for the legal question of retrospectivity. It concluded that the payment of extra wages for months in 1960 could reasonably be treated as a condition of service for the year 1961, and therefore the impugned order did not amount to giving retrospective effect to clause (b) of Section 3.
Overall assessment and conclusion:
- Because the Court found the State Government had considered the statutory criteria, that clause (b) of Section 3 was a valid restriction on Article 19 rights, and that the order did not operate retrospectively in the impermissible sense, the Court rejected all contentions advanced on behalf of the petitioners.

Holding and Implications

Holding: Each of the three connected writ petitions is DISMISSED with costs. The Court ordered one set of costs in favour of respondent No. 1 and another set of costs in favour of respondent No. 2.

Implications and direct effects:

The impugned State Government notification dated 25-4-1961, issued under Section 3 of the U.P. Industrial Disputes Act, 1947, stands and the petitioners are required to comply with its directions (including payment of the interim relief specified, effective as directed by the notification).
The Court upheld the constitutional validity of clause (b) of Section 3 (subject to the statutory safeguards inherent in the opening paragraph of Section 3) and accepted the legal reasoning in State of U.P. v. Basti Sugar Mills Co. Ltd. on the question of retrospectivity as applicable in this case.
This opinion did not purport to quash or directly review the recommendations of the Central Wage Board (which was not impleaded and whose report was not before the Court); the judgment focused on the lawfulness of the State Government's exercise of power under Section 3.
No broader legal principle beyond the Court's application of existing authority was newly stated by the Court in this opinion; the decision applies established principles (as discussed above) to dismiss the petitions and impose costs.

Note: This summary is based exclusively on the content of the provided opinion and does not add information beyond that text.

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J.K Jute Mills Co. Ltd., Kanpur v. State Of U.P And Others

V.G Oak, J.:— These are three connected writ petitions directed against the same Government Notification issued under Section 3 of the Uttar Pradesh Industrial Disputes Act, 1947 (hereafter referred to as the Act). Since the three petitions raise, the same questions of fact and law, it will be convenient to dispose of the three petitions by a common judgment. I shall refer to the facts in one case. Messrs. J.K Jute Mills Company Limited, Kanpur are the petitioner in Writ No. 1254 of 1961.

2. According to the affidavit filed on behalf of the petitioner, the petitioner is a public limited company. It carries on business of manufacture of jute goods at Kanpur. On 25-8-1960 the Government of India set up a Central Wage Board for jute industry. The Wage Board recommended that certain interim relief should be given to workmen in the jute industry. The interim relief was by way of additional wages for 1960 and 1961. The recommendation of the Wage Board was accepted by the Central Government. The State Government thereupon proceeded to act on the recommendation of the Wage Board. The petitioner was advised to implement the recommendation of the Wage Board. But the petitioner was not agreeable. It was pointed out to the State Government that conditions in Uttar Pradesh were different from those obtaining in Bengal. It was not, therefore, practicable to implement the recommendation of the Wage Board by the three petitioners. But the State Government did not accept the protest lodged on behalf of the petitioners. On 25-4-1961 the State Government issued an order under Section 3 of the Act directing the three petitioners to grant interim relief to their workmen with effect from the 1st of October, 1960. These writ petitions are directed against the Government Notification dated 25-4-1961. The president of the J.K Jute Mill Mazdoor Union, Kanpur has filed one counter-affidavit on behalf of respondent No. 2. Sri Har Swarup Sharma, who is Up Sachiv to U.P Government in the Labour Department, has filed another counter-affidavit on behalf of respondent No. 1.

3. Annexure ‘A’ to the affidavit is the resolution of Government of India, dated 25-8-1960 constituting a Central Wage Board for jute industry. Annexure ‘D’ to the affidavit is the resolution of Government of India, dated 25-1-1961 accepting the recommendation of the Central Wage Board. Annexure ‘H’ to the affidavit is the notification of U.P Government dated 25-4-1961 under Section 3 of the Act.

4. Mr. R.S Pathak appearing for the petitioners did not challenge the Government resolution annexure ‘A’ for the constitution of a Central Wage Board. But he criticised the membership of the Wage Board. Mr. Pilkington and Mr. Goenka were nominated as members representing employers on the Wage Board. It is said that those two members do not represent the three petitioners. There are more than 100 jute mills in India. Selecting representatives of employers was a matter of some difficulty. There is no definite ground taken in the writ petitions that those two members are biased against the three petitioners. We need not, therefore, give further consideration to the constitution of the Wage Board.

5. Mr. Pathak contended that the Wage Board ignored the basic principles for fixation of wages. It is said that those basic principles for fixing wages are to be found in Express Newspaper (Private) Limited v. Union of India(1) and in Lipton Ltd. v. Their Employees(2).

6. Neither party has filed a copy of the report of the Central Wage Board recommending the interim relief in dispute. In the absence of that report, it is difficult to say whether the Board considered the relevant factors for fixation of wages for workmen in jute industry.

7. It may further be pointed out that, the Wage Board has not been impleaded as respondent in these writ petitions. I am informed that the Wage Board functions at Calcutta. That may be the reason why the Wage Board has not been impleaded in these writ petitions. The petitioners must be aware that this Court has no jurisdiction to quash recommendation of a body functioning at Calcutta. Mr. Pathak stated that the petitioners' purpose will be served, if the Notification issued by U.P Government is quashed by this Court.

8. Mr. Pathak contended that the State Government failed to exercise the discretion conferred upon it by Section 3 of the Act. For this contention, Mr. Pathak relied upon the following passage in paragraph 13 of the counter-affidavit by Sri Sharma:—

“At the tripartite conference also it was pointed out to the employers' representatives that since the Wage Board had already considered the points raised on their behalf it was no more possible for the State Government to take any decision in regard to the exemption of the Mills in Uttar Pradesh from the applicability of the recommendations made by the Wage Board.”

9. Learned counsel for the parties agreed before me that, the Wage Board is not a statutory body. The State Government was not, therefore, bound to accept the recommendation of the Wage Board. It is not, therefore, clear why the State Government thought that, it had no power to differ from the view taken by the Wage Board.

10. In Rex v. Stepney Corporation(3) the facts were these. By section 120 of the Local Government Act, 1888, it was provided that regard shall be had to the nature of office, duration of service etc., and the compensation shall not exceed the amount which under the Acts and Rules is paid to a person on abolition of office. The council of a metropolitan borough resolved to abolish a certain office. They considered that they were bound by a practice of the Treasury to make deduction of one-fourth of the amount of compensation. The court issued a writ of mandamus to compel the council to take the facts of the case into consideration, and to exercise a discretion in the matter.

11. Section 3 of the U.P Industrial Disputes Act, 1947 runs thus:—

“If, in the opinion of the State Government it is necessary or expedient so to do for securing the public safety or convenience or the maintenance of public order of supplies and services essential to the life of the community, or for maintaining employment, it may, by general or special order, make provision—

(a) ……………………

(b) for requiring employers, work men or both to observe for such period, as may be specified in the order, such terms and conditions of employment as may be determined in accordance with the order……………….”

12. The first six paragraphs of annexure ‘H’ are introductory. Thereafter annexure ‘H’ runs as follows:—

“AND WHEREAS, in the opinion of the State Government it is expedient to enforce the said recommendations of the Wage Board for securing public convenience and maintenance of public order and supplies essential to the life of the community and for maintaining employment:

NOW, THEREFORE, in exercise of the powers conferred by Section 3 of the U.P Industrial Disputes Act…………………”

13. Annexure ‘H’ indicates that before passing the impugned order, the State Government did consider the matters which are mentioned in the opening paragraph of Section 3 of the Act. It is not, therefore, correct to say that the State Government passed the order without applying its mind to the problem. It may be that the State Government did not decide for itself whether the recommendation of the Wage Board was sound on merits or not. But that omission would not be a serious defect in the order issued by the State Government under Section 3 of the Act.

14. Mr. Pathak contended that, clause (b) of Section 3 of the Act is invalid, because the impugned order purports to have been passed in the subjective discretion of Government. It has been contended that the provision offends against Article 19(1)(f) and (g) of the Constitution. The opening paragraph of Section 3 of the Act shows that orders of this kind are to be passed only if the State Government considers it necessary or expedient to do so for securing public safety or convenience or for maintaining public order or supplies etc. Considering the safeguard contained in the opening paragraph of Section 3 of the Act, it must be held that clause (b) of Section 3 constitutes a reasonable restriction on the right conferred on citizens by sub-clause (f) and (g) of clause (1) of Article 19 of the Constitution. Clause (b) of Section 3 is valid.

15. Lastly, Mr. Pathak contended that, an order by the State Government under clause (b) of Section 3 could not be given retrospective effect. He pointed out that although the impugned order is dated 25-4-1961, it contains a direction to the petitioners to pay extra wages to their workmen with effect from 1-10-1960. It was urged for the respondents that, a direction of this kind does not amount to giving retrospective effect to the order issued under Section. 3 of the Act.

16. Both the parties relied upon State of Uttar Pradesh v. Basti Sugar Mills Co. Ltd.(4). In that case the State Government issued a notification under Section 3(b) of the Act on 5-7-1950 directing Basti Sugar Mills to pay bonus to their workmen for the years 1947-48. and 1948-49. The Government notification was challenged before this Court by filing a writ petition. The writ petition was allowed by a Full Bench of this Court. The State Government took up the matter in appeal before the Supreme Court. The appeal was allowed by their Lordships.

17. Their Lordships observed on page 424 thus:—

“We entirely agree with the learned Judges of the Allahabad High Court that clause (b) of Section 3 cannot be given a retrospective effect. But we are unable to agree with them that the State Government in making a direction to the employers to pay bonus for the years in question purported to give a retrospective operation to the provisions of that clause. The order made by the State Government in regard to bonus is to the effect that it shall be paid for the year 1947-48 to those persons who worked during that year and for the year 1948-49 to those persons who worked during that year. This) payment was directed to be made within six weeks of the making of the order. By giving this direction the State Govt. did no more than attach a condition to the employment of workmen in the year 1950-51 in sugar factories affected by the order. That is all that it has done………………Since the law enables the State Government to impose a term it is apparent that the legislature which enacted that law did not import into that word a consensual sense. We cannot, therefore, accept the argument that under clause (b) it was not open to the State Government to make the payment of bonus to workmen a condition of their employment in future and thus augment their past wages.”

18. That decision lays down two points. Firstly, clause (b) of Section 3 of the Act cannot be given retrospective effect. Secondly, allowing bonus to workmen for work done in previous years does not amount to giving retrospective effect to clause (b) of Section 3 of the Act. Mr. Pathak pointed out that, the Basti Sugar Mills case involved payment of bonus; while the present case involves additional wages for the past. That distinction is no doubt there. But I do not think that that distinction is of any practical * importance in applying the principle whether clause (b) of Section 3 of the Act could be said to have been given retrospective effect merely because past work of a workman is taken into consideration. If bonus for 1947-48 could be considered as a condition of employment for 1950-51, there should be little difficulty in treating extra wages for 1960 as a condition of service for the year 1961. So, although the State Government passed the impugned order in 1961, payment of extra wages for certain months in 1960 could be treated by the State Government as a condition of service of the workmen for the year 1961. On that view, it is not necessary to suppose that the State Government has given retrospective effect to clause (b) of Section 3 of the Act.

19. Thus all the contentions advanced on behalf of the petitioners fail. Each of the three connected writ petitions is dismissed with costs (one set of costs in favour of respondent No. 1, and another set of costs in favour of respondent No. 2).

J.K Jute Mills Co. Ltd., Kanpur v. State Of U.P And Others

Structured Summary of the Court's Opinion (V.G. Oak, J.)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Petitioners' Arguments

Respondents' Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

J.K Jute Mills Co. Ltd., Kanpur v. State Of U.P And Others

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