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Pune Municipal Corporation v. Keshav Ganpat Bhise & Another
Structured Summary of the Opinion (Kotwal, J.)
Factual and Procedural Background
The respondent was employed by the petitioner-Corporation on 14 April 1969 as a Mixer Driver in the Roads Division. On account of allegations of misconduct (details of which are not elaborated in this opinion) the respondent was suspended from service as from 16 January 1978 pending departmental enquiry. An Enquiry Officer was appointed on 14 July 1978; a show-cause notice was issued on 31 January 1979. The enquiry concluded with the respondent being exonerated of all charges. He was directed on 7 March 1979 to resume duties (stigma wiped out) and actually resumed on 13 March 1979. For the suspension period (17 January 1978 to 13 March 1979) the Corporation paid the respondent 50% of wages as subsistence allowance in accordance with rule 58.
On 24 June 1980 the respondent filed an application under section 33-C of the Industrial Disputes Act in the First Labour Court, Pune (No. 222 of 1980) claiming full wages, D.A. etc. for the suspension period. He contended that the Industrial Employment (Standing Orders) Act, 1946 (the "Act") and the Model Standing Orders applied, making him entitled to an additional sum (the difference), calculated at Rs. 2,230.16, after accounting for the 50% already paid.
The Corporation resisted, contending that its employees were governed by the Corporation's own Model Standing Orders (or Rules and Regulations) and that the payment already made was proper. The Labour Court (Presiding Officer) upheld the respondent's claim by order dated 17 July 1982. The Corporation challenged that order by petition under Article 227 of the Constitution.
Legal Issues Presented
- Whether the Model Standing Orders under the Industrial Employment (Standing Orders) Act, 1946 apply to the respondent's employment in the Roads Division of the Corporation.
- If applicable, whether the subsistence allowance slabs in the Model Standing Orders (Order 5A: 50% for first 90 days; 3/4 for next 90 days; full after 180 days) entitle the respondent to additional payment beyond the 50% already paid.
- Whether the Corporation's own rules, standing orders or regulations (as enacted by the Corporation) prevail over the Model Standing Orders under the Act, including the effect of section 13-B.
- Whether, alternatively, the respondent's exoneration in the departmental enquiry independently entitles him to full wages for the suspension period.
Arguments of the Parties
Petitioner-Corporation (Appellant) — Shri C. J. Sawant
- The Corporation argued that its employees are governed by the Corporation's own Standing Orders, Rules and Regulations; consequently, the Model Standing Orders under the 1946 Act should not apply.
- It was contended that individual divisions of the Corporation (such as the Roads Division) cannot be treated as separate "industrial establishments" having an independent existence so as to attract the Act.
- Reliance was placed on section 13-B of the Act to suggest that where an employer has made rules or regulations (the Corporation's own standing orders), those rules should govern, and the Act's Model Standing Orders would not apply — subject to any required notification procedure.
- Under the Corporation's Standing Orders, subsistence allowance is capped at 50% for the suspension period (and may decrease with time), so no further payment is due.
Respondent — Shri Dharap
- The respondent contended that the Model Standing Orders under the Industrial Employment (Standing Orders) Act apply, entitling him to the graduated slabs of subsistence allowance (50% for first 90 days; 3/4 for the next 90 days; full after 180 days).
- He claimed the differential amount (stated as Rs. 2,230.16) representing the sum due after deducting the 50% already paid by the Corporation.
- As an alternate case, counsel submitted that since the respondent was exonerated in the departmental enquiry, he is entitled to full wages for the suspension period irrespective of the standing orders issue.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| U.P. State Electricity Board v. Hari Shankar Jain, (1978) 4 SCC 16 : A.I.R. 1979 S.C. 65 | Principle that special provisions (statutory provisions under the Act) override general rules or regulations of an employer. | The court relied on this authority to hold that the Model Standing Orders under the Industrial Employment (Standing Orders) Act prevail over the general Standing Orders or Rules of the Corporation which were not made and notified in the manner required by the Act; accordingly the Labour Court's application of the Model Standing Orders was upheld. |
Court's Reasoning and Analysis
The court's reasoning proceeded incrementally and is summarized in the sequence adopted by the judgment:
- Identification of the relevant statutory framework:
- The Model Standing Orders are enacted under the Industrial Employment (Standing Orders) Act, 1946.
- Order 5A of the Model Standing Orders prescribes a graduated scale of subsistence allowance during suspension: (1) first 90 days — one half of basic pay, D.A. and other allowances; (2) next 90 days — three-fourths; (3) after 180 days — full basic pay and allowances.
- Application conditions under section 1(3):
- Section 1(3) makes the Act applicable to every industrial establishment wherein 100 or more workers are employed on any day of the preceding 12 months, with a power to the Government to extend applicability to establishments with fewer workers by prescribed procedure.
- The Roads Division in which the respondent worked had a strength of more than 100 workers; the Corporation did not contest this factual point. Therefore, the numerical requirement of section 1(3) was satisfied.
- Definition of "industrial establishment":
- Section 2(e) of the Act is to be read with the definition in sub-clause (2) of section 2 of the Payment of Wages Act (reference in the opinion). Under sub-clause (g) of section 2(ii) of the Payment of Wages Act, establishments engaged in work relating to construction, development and maintenance of buildings and roads are embraced by the definition.
- Because the respondent worked in a division concerned with construction, development and maintenance of buildings and roads, the Court held the division qualified as an "industrial establishment" under the Act.
- On the question whether the Corporation's own Standing Orders displace the Model Standing Orders:
- Section 2-A (and related provisions) contemplates applicability of Model Standing Orders to matters set out in the schedule unless an employer's Standing Orders have been duly made and served after following the procedure prescribed by the Act.
- The Corporation had not followed the prescribed procedure (notification/serving) to make its Standing Orders displace the Model Standing Orders. Therefore, the Model Standing Orders govern.
- Submission under section 13-B:
- The Corporation relied on section 13-B to argue that its rules/regulations should govern. The Court rejected this contention, observing that section 13-B requires that such rules or regulations be notified in the prescribed manner to have the effect of displacing the Model Standing Orders; mere making of rules by the Corporation without notification and following the statutory procedure is not sufficient.
- Conclusion on entitlement:
- Because the Model Standing Orders apply, the graduated slabs in Order 5A apply: respondent is entitled to 50% for the first 90 days (already paid), 3/4 pay for the next 90 days, and full wages after 180 days. The Labour Court's calculation of the difference (as claimed by the respondent) was accepted as uncontested.
- Additionally, the Court accepted the alternate argument that the respondent's exoneration in the enquiry independently supports entitlement to full wages; thus the respondent succeeds on this alternate basis as well.
- Reliance on precedent:
- The Court invoked the Supreme Court's decision in U.P. State Electricity Board v. Hari Shankar Jain for the proposition that special statutory provisions override general employer rules, using that ratio to reinforce the applicability of the Model Standing Orders over the Corporation's un-notified rules.
Holding and Implications
Holding:
The petition is dismissed and the impugned order of the Labour Court is upheld; the rule is discharged with no order as to costs.
Direct implications for the parties:
- The respondent is entitled to the difference between the subsistence allowance already paid (50% for the suspension period) and the amount payable under the Model Standing Orders: specifically, 50% for the first 90 days (already paid), three-fourths for the next 90 days, and full wages and allowances for any period after 180 days. The Labour Court's grant of the respondent's claim (including the claimed sum of Rs. 2,230.16 as the calculated difference) is sustained.
- The Corporation's internal Standing Orders, Rules or Regulations (which capped subsistence at 50% irrespective of duration) do not displace the Model Standing Orders because the Corporation did not follow the notification/serving procedure required by the Act.
- The Court also accepted an alternative ground: the respondent's exoneration in the departmental enquiry supports entitlement to full wages for the suspension period.
Broader legal implication: The opinion applies and reiterates the established principle (cited Supreme Court authority) that statutory/special provisions (Model Standing Orders under the Industrial Employment (Standing Orders) Act) override an employer's general rules when the employer has not duly followed the statutory procedure to make those rules prevailing. The judgment does not purport to create a new precedent beyond affirming application of that principle to the facts before it.
Kotwal, J.:— After facing a departmental enquiry and getting himself exonerated, further proceeding has been initiated by the respondent herein for the recovery of certain amount pertaining to the period of suspension. The respondent was employed by the petitioner-Corporation on April 14, 1969 in the capacity as a Mixer Driver in Roads Division. On account of certain allegations about the misconduct on his part with which we are not much concerned in this proceeding, he was suspended as and from January 16, 1978 in pursuance of the directions to hold departmental enquiry. The Enquiry Officer was appointed as late as on 14th July 1978. Show-cause notice was issued on 31st January 1979. The enquiry was concluded in due course when the respondent, the alleged delinquent was exonerated of all the charges. In pursuance of this order he was directed on 7th March 1979 to resume duties as the stigma was wiped out. He actually resumed the duty as and from 13th March 1979. He was paid 50% of the wages as the subsistence allowance in accordance with rule 58 for the suspension period between 17th January 1978 and 13th March 1979.
2. However, being dissatisfied with the said conduct the respondent filed an application on 24th June 1980 under section 33-C of the Industrial Disputes Act in the First Labour Court, Pune being No. 222 of 1980 contending that he was entitled to full amount of wages,. D.A etc., for the Said period of suspension as according to him, the provisions contained in the Industrial Employment (Standing Orders) Act, 1946 squarely apply under which he was entitled to the said amount, which according to him, tuned to Rs. 2230.16, which was the difference after deducting 50% amount which was already paid.
3. This application was resisted on behalf of the Corporation mainly on the ground that the provisions of the said Act did not apply whereas the respondent was governed by the Model Standing Orders and as such he has been property paid for the period of suspension”.
4. The learned Presiding Officer upheld the contention of the respondent and held that the parties are governed by the Standing Orders under the said Act and as such the respondent was entitled to the said amount. This order recorded on July 17, 1982 is placed under challenge in this petition under Article 227 of the, Constitution of India.
5. Shri C.J Sawant, the learned Counsel for petitioner-Corporation, mainly assails the impugned order on the ground that the parties would be governed by the Model Standing Orders and not by the Standing Orders under the said Act in which event the amount paid is proper. It is also submitted that only a few divisions under the Corporation cannot get the label as Industrial Establisment since they have no independent existence or entity. Shri Dharap, learned Counsel for the respondent, counters these contentions on the same lines, as recorded by the Labour Court.
6. Inspite of the controversy, the point falls in a very narrow field. Admittedly the respondent was employed as a Mixer Driver in Roads Division of the petitioner-Corporation and as such he was associated with a division under the Corporation which related to the construction, development or maintenance of buildings, roads etc. I have already indicated the course of events from the date of suspension till his resuming, the duty. The Corporation has already paid the subsistence allowance as contemplated by the Model Standing Orders.
7. These Model Standing Orders are enacted under the said Act and if all other conditions are satisfied then those would be applicable to the case of the respondent. Order 5 A makes a split up of the period during the pendency of enquiry after suspension for which different slabs of subsistence allowance are to be paid. Thus, under that first clause, for the period of first 90 days the said allowance payable per month should be equal to one half of basic pay; D.A and other allowances. If the enquiry is prolonged the allowance for the further period of 90 days would be equal to 3/4th of such basic wages and allowances, and the last category in sub-clause (3) stipulates that if it prolongs even after 180 days then the subsistence allowance should be equal to basic wages and allowances in full.
8. Shri Sawant, the learned Counsel, however, submits that these Model Standing Orders would not be applicable to the instant case as according to him, the Corporation has framed its own Rules and Regulations and under its competence it has framed Standing Orders and, therefore, the Corporation employees would be governed by those standing orders and not by one under the Act. Under the said Standing Orders of the Corporation irrespective of any suspension period, the subsistence allowance at the maximum for a certain period only would be at 50% of the wages and allowances whereas it may be further decreased as the duration increases.
9. The Standing Orders under the said Act were enacted in the year 1946. Sub-section (3) of section 1 pertaining to its applicability prescribes that it would be so applicable to every industrial establishment wherein 100 or more workers are employed on any day of the preceding 12 months. An authority vests in the Government to make it applicable even to such industrial establishment where the number of employees is less than the prescribed one, for which purpose certain procedure is prescribed. In the instant case the said division in which the respondent was employed by the Corporation had a strength of more than 100 workers and this is not controverted by the Corporation. Therefore, one part of that provision is satisfied. The only other recuirement pertains to the question as to whether the establishment in question can be styled as industrial establishment under the said Act. Section 2 sub-clause (e) defines Industrial establishment under the said Act, and it splits up into different clauses. Clause (1) however, is more relevant under which an industrial establishment as defined in sub-clause (2) of section 2 of Payment of Wages Act is embraced by the concept and definition of Industrial Establishment under the Act. This, therefore, makes it necessary to read the said provision of Payment of Wages Act and under sub-clause (g) of section 2(ii) an establishment in which any work relating, to construction, development and maintenance of building roads, bridges etc are carried out. It is embraced by the definition of Industrial Establishment. Transplanting this phrase in section 2(e) sub-clause (i) as contemplated under that provision itself, it would be clear that the respondent who has been working in the establishment is concerned with the construction, development of buildings and roads etc., could be squarely covered (sic). The net result would be that the division or establishment in which the respondent was working is an industrial establishment as defined under the said Act and it has a strength of more than 100 workers and, therefore, both the requirements of section 1, sub-section (3) are satisfied.
10. Section 2-A refers to the applicability of the Model Standing Orders for every matter set out in the schedule applicable to such category. It also provices that it may not effect any other Standing Order provided those have been duly and properly served after following certain procedure as contemplated under section 2-A and further provisions thereafter. This has not been done by the Corporation and, therefore, the Model Standing Orders under the Act would be the governing factor. Under item 9 of the schedule the suspension or dismissal for misconduct etc. are attracted by the said Model Standing Orders under the Act. I have already reproduced the said Standing Orders under the Act, which prescribe different slabs starting from the first slab of 90 days wherein allowance would be 50%; for the next slab of 90 days it would be 3/4th and after a period of 180 days it shall be full. Under the Rules, the Corporation prescribes certain Standing Orders under which for the entire duration of the suspension the delinquent is entitled to only 50% which is irrespective of the duration how so long it may be. This is in contrast with the Model Standing Orders under the Act where the three slabs are made. It is on that basis that the difference is claimed, though the respondent would be entitled to get 50% only for the period of first 90 days and after a period of 180 days he will be entitled to get full wages. There is no dispute about the calculation as figured under the claim pertaining to the difference.
11. Shri Sawant the learned Counsel, also relied on the provisions contained in section 13-B of the Act to suggest that the provisions under the Act would not be applicable to the respondent since the Corporation have themselves made Rules and Regulations, and, therefore, those Standing Orders or Rules would govern the parties. For obvious reasons this contention cannot be upheld inasmuch as the dominating requirement of the said provision is that such rules or regulations are required to be notified in this behalf meaning thereby that a general prescription or enactment, of the rules is not enough and those must be so notified, so as not to make them applicable to certain industrial establishments as contemplated by section 13-B. That contention, therefore, also is of no substance.
12. The net result, therefore, would be that the Model Standing Orders under the Act would be applicable, under which the respondent would be entitled to full wages with allowances for a period after 180 days, whereas the Corporation has granted even for this period only 50% wages. This would also be in addition to his claim that he would be entitled to 3/4th of wages and allowances for the slab between 90 and 180 days. In effect, therefore, the respondent would be entitled to the difference calculated on this basis.
13. The connotation to the provisions of section 13-B assigned earlier and the provisions of this Act being special provisions would override the general rules or regulations or other Standing Orders of the Corporation as has been enunciated by the Supreme Court in the ratio of 1(U.P State Electricity Board v. Hari Shankar Jain), (1978) 4 SCC 16 : A.I.R 1979 S.C 65. Both the points are, therefore, squarely governed by that ???
14. In this view of the matter the Labour Court is fully justified in granting the claim of the respondent in its entirety and as such there is no reason to interfere with the impugned order. Shri Dharap, the learned Counsel, also, submits with justification that even de hors of all these provisions, once it is established that his client is exonerated of all the charges on that premise also he is entitled to lull wages. This alternate plank is, quite formidable and on that count also the respondent would be entitled to the said claim. Thus the respondent is entitled to succeed on both the counts.
15. In the result, rule is discharged with no order as to costs.
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