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Tata Textile Mills (U.C) And Others v. Munnilal Nanhoo Yadav And Others
Structured Summary of the Opinion (Desai, J.)
Factual and Procedural Background
The petition arises from a dispute over the interpretation and application of standing order 20-A (Handbook of Service Conditions of Operatives and Clerks in the Bombay Cotton Textile Industry, October 1980) in relation to superannuation and extended service for male operatives.
The petitioners are a silk-cotton textile undertaking taken over by the Government of India in 1983 and placed under the management and control of National Textile Corporation (South Maharashtra) Ltd. Respondent 1 was employed as a "doffer-jobber" in the petitioners' spinning department and had earlier been employed by Tata Mills Ltd. from 1 November 1950. At the time of original employment he gave his year of birth as 1929; in 1986 he sought to alter it to 1932 but failed to produce sufficient material or a convincing explanation, and the proposed change was not accepted by the petitioners.
The petitioners contended that the workman attained the age of 60 years on 1 January 1989 and served notice on 15 December 1988 that he would stand superannuated with effect from 1 January 1989. The workman (respondent 1) filed a complaint of unfair labour practice under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (Complaint (ULP) No. 1520 of 1988) before the Industrial Court at Bombay, asserting that under standing order 20-A he had a right to continue in employment until age 63 if he retained efficiency.
An application for interim relief filed by the workman (exhibit B to the writ petition) led the learned Member of the Industrial Court (respondent 2) to pass an order on 31 March 1989 (exhibit F), confirming an ad interim order dated 28 December 1988 (exhibit D). That Industrial Court order was challenged by the petitioners by way of the present writ petition.
Procedurally, by consent of advocates the matter was placed on the Board for hearing; the advocate for respondent 1 waived service. Directions had previously been given by the Court in appeals from interim orders; necessary orders were obtained from the Chief Justice and the writ petition was referred to a Division Bench. The Court observed that disposing of the writ petition would also dispose of the related appeal (Appeal No. 1282 of 1989).
Legal Issues Presented
- What is the correct interpretation and application of standing order 20-A, specifically whether the provision that "a male operative shall be retained in service, if he continues to be efficient, up to the age of 63 years" creates a right in the operative to continued employment up to 63 (subject to efficiency) or whether it confers a discretion on the employer.
- Whether the employer's notice of superannuation effective 1 January 1989 (when respondent 1 allegedly attained age 60) was legally valid in view of standing order 20-A.
- Whether precedents relied upon by the petitioners (notably Kailash Chandra v. Union of India and State Bank of Bikaner and Jaipur v. Jag Mohan Lal) require a different interpretation of standing order 20-A.
Arguments of the Parties
Respondent / Workman (as presented in the opinion)
- The workman contended that standing order 20-A conferred a right to continue in employment until age 63 if he retained efficiency; therefore his purported superannuation at 60 violated the standing order and constituted an unfair labour practice falling under item (9) of Schedule IV to the Maharashtra Act, 1971.
- The workman obtained interim relief from the Industrial Court which was confirmed and which forms the basis of the writ petition challenge by the employer.
Petitioners / Employer (as presented in the opinion)
- Sri Shrikrishna (for the petitioners) submitted that both the learned Member of the Industrial Court and the learned Single Judge erred in not following the Supreme Court decision in Kailash Chandra v. Union of India, which, on the petitioners' reading, recognized an employer's discretion in similar provisions.
- The petitioners also relied on State Bank of Bikaner and Jaipur v. Jag Mohan Lal as supporting the proposition that the relevant rules confer discretion on the employer or competent authority to extend service.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Maharashtra State Textile Corporation, Ltd. v. Vasudev Vinayak Joshi (Writ Petition No. 5844 of 1988; Single Judge Smt. Sujata V. Manohar, J.; reported 1990-I L.L.N 191) | Upheld the Industrial Court's approach that the workman's contentions regarding standing order 20-A were to be accepted (i.e., supportive of the view that the standing order required retention of an efficient male operative up to 63). | The Court treated this decision as directly supportive and stated agreement with the approach and conclusion of the Single Judge, relying on it to uphold the Industrial Court's interpretation of standing order 20-A. |
| Kailash Chandra v. Union of India [A.I.R. 1961 S.C. 1346] | Construction of rule 2046(2) of the Railway Establishment Code — the Supreme Court read the rule as giving an option or discretion to the employer (not a right to the employee), particularly because of the use of the word "ordinarily" and phrasing that allowed retirement at an earlier age. | The Court distinguished Kailash Chandra on the ground of different phraseology: the Railway rule used discretionary language ("may be required", "ordinarily") whereas standing order 20-A uses mandatory language ("shall" regarding retention to the extended age) and thus Kailash Chandra was not applicable to change the interpretation of standing order 20-A. |
| State Bank of Bikaner and Jaipur v. Jag Mohan Lal [1989-I L.L.N 793] | The decision construed a rule/proviso that explicitly used the word "discretion" and spoke of extensions "if deemed desirable in the interests of the bank", indicating employer/authority discretion for extension. | The Court held this precedent inapposite to standing order 20-A because the language there explicitly conferred discretion on the employer; standing order 20-A, by contrast, did not use such discretionary phrasing and instead imposed an obligation to retain if the operative "continues to be efficient." |
Court's Reasoning and Analysis
The Court focused on textual construction of standing order 20-A and its historical genesis. The standing order reads:
"20-A. An operative shall retire from service on attaining the age of 60 years, but a male operative shall be retained in service, if he continues to be efficient, up to the age of 63 years, provided that when retrenchment becomes necessary a person who has completed the age of 60 may be retired in preference to younger men."
The Court noted that the Millowners' Association had originally proposed a rule using "may" and discretionary language allowing extensions at management's discretion, but that the Industrial Court, after representations by the representative union, adopted modified phrasing using "shall" for the extended age provision. The Court concluded that this difference in phraseology is decisive.
Key steps in the Court's analysis:
- Distinction between the proposed (Millowners') language and the adopted standing order: the proposal conferred a management discretion to grant extensions; the adopted standing order, by use of "shall", imposes an obligation to retain an efficient male operative up to age 63.
- Interpretation of standing order 20-A: it sets an obligatory superannuation at age 60, but provides an obligatory extension to age 63 for male operatives who "continue to be efficient". Thus, the extension is a right of the employee (subject to the conditions of sex and continued efficiency) and an obligation on the employer to retain the employee if those conditions are met.
- On the meaning of "continues to be efficient", the Court reserved a complete definition for future appropriate proceedings, but clarified that the operative must remain efficient during the extended period; efficiency is not determined once and for all at the age-60 threshold.
- The Court examined relevant Supreme Court authorities relied upon by the petitioners (Kailash Chandra and State Bank of Bikaner & Jaipur) and distinguished them on linguistic and contextual grounds, holding that those authorities addressed differently worded rules that conferred discretion on the employer, whereas standing order 20-A does not employ such discretionary phrasing.
- The Court accepted the approach and conclusion of the Industrial Court member and the Single Judge (Smt. Sujata V. Manohar) that standing order 20-A required retention up to age 63 for a male operative who continues to be efficient, and therefore upheld the Industrial Court's interim order and discharged the rule in the writ petition.
The Court additionally made obiter observations that periodic evaluation (for example, annually) of continued efficiency would be an appropriate mechanism rather than continuous monitoring, and emphasized that any decision on continued efficiency must be taken honestly and properly; however, it expressly reserved detailed definition of "efficient" for future proceedings if necessary.
Applying these principles to the facts before it, the Court recorded that the employer did not assert any fall in the workman's efficiency; therefore the employer's insistence that the employee retired by superannuation on 1 January 1989 was incorrect on the standing order interpretation adopted.
Holding and Implications
Core Ruling: The writ petition is disposed of and the rule is discharged in favour of the interpretation that standing order 20-A requires retention of a male operative up to age 63 if he "continues to be efficient." The Court upheld the Industrial Court's order and the reasoning of the Single Judge.
Direct implications for the parties (as stated in the opinion):
- The employer's insistence that respondent 1 retired by superannuation on 1 January 1989 is held to be incorrect in the absence of any case of fall in efficiency pleaded or established by the employer.
- The Industrial Court's interim order (confirming the ad interim order) stands; the writ petition is disposed and the related appeal (Appeal No. 1282 of 1989) will not survive and can be disposed of appropriately.
- The Court suggested (obiter) that the employer may review the workman's case after one year by way of periodic evaluation, but the Court did not decide the precise meaning of "continues to be efficient" and left that to appropriate future proceedings if disputes arise.
- Costs: parties to bear their own costs of the writ petition.
The Court distinguished earlier Supreme Court authorities relied upon by the petitioners on the basis of differing phraseology and therefore did not apply those authorities to alter the interpretation of standing order 20-A. The Court's detailed definition of "efficient" was expressly left open.
Desai, J.:— By consent of advocates, the matter is taken on Board for hearing. The advocate for respondent 1 waives service.
2. In this matter we had given certain directions in the appeals from interim orders and in pursuance of those directions, necessary order has been obtained from Hon'ble the Chief Justice and then writ petition referred to a Division Bench. It is now taken up for hearing since in our opinion if we give judgment in the writ petition, that will serve the requirements of the parties as also dispose of the appeals automatically. Once the writ petition is disposed of, the appeal, (viz., Appeal No. 1282 of 1989), will not survive and the same can be disposed of by an appropriate order to that effect.
3. It is unnecessary to set out the facts in detail in the writ petition and it is sufficient to deal with the law point which arises. However, the law point arises in the following background.
4. The petitioners before us are a silk cotton textile undertaking taken over by the Government of India in 1983 and thereafter placed under the management and control of the National Textile Corporation (South Maharashtra), Ltd. Respondent 1 to the writ petition was an employee working as a “doffer-jobber” in the spinning department of the petitioners. The petition raises the question of interpretation and application of standing order 20-A of the standing orders for operatives which standing order is to be found in Chap. XIV, at page 172 of the Handbook of Service Conditions of Operatives and Clerks in the Bombay Cotton Textile Industry issued by the Millowners' Association, Bombay, in October 1980. The first respondent workman was employed by Tata Mills, Ltd., from 1 November 1950, and at the time of employment had given his year of birth to be 1929. In 1986, he sought to alter the same to 1932 but was not able to tender sufficient material or convincing explanation in support of the change sought and hence the puported change of the year of birth was not accepted by the petitioners who are the present employers. According to the petitioners the workman accordingly attained the age of 60 years on 1 January 1989. On 15 December 1988, he had been served with a notice intimating that he would stand superannuated with effect from 1 January 1989.
5. After receipt of the said notice, dated 15 December 1988, the workman, i.e, respondent 1 challenged the same under the provisions of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, by filing a complaint of unfair labour practice before the Industrial Court at Bombay. It was the contention of the workman that under the relevant standing order, viz., standing order 20-A, he had a right to continue in employment till the age of 63 if he retained efficient and, therefore, the purported superannuation was in violation of the said standing order. Hence, according to the workman, an unfair labour practice had been perpet-rated which was covered under item (9) of Sch. IV to the aforesaid Act. The complaint was numbered as Complaint (ULP) No. 1520 of 1988. In the said complaint an application for interim relief was thereafter filed by the workman, which is exhibit B to the writ petition. On the said application the learned Member of the Industrial Court, viz., respondent 2 herein, passed an order on 31 March 1989, which is at exhibit F to the writ petition, upholding the contention of the workman for the interim relief sought. Accordingly he confirmed the ad interim order, dated 28 December 1988, which is at exhibit D to the writ petition. It is this order on 31 March 1989, that was challenged in the writ petition.
6. As stated earlier, the challenge turns on the proper interpretation and application of standing order 20-A and we shall immediately, therefore, advert to the same. The said standing order reads as under:
“20-A. An operative shall retire from service on attaining the age of 60 years, but a male operative shall be retained in service, if he continues to be efficient, up to the age of 63 years, provided that when retrenchment becomes necessary a person who has completed the age of 60 may be retired in preference to younger men.”
7. Our attention was also drawn in this connection to the decision of a learned Single Judge of this Court given in Writ Petition No. 5844 of 1988, Maharashtra State Textile Corporation, Ltd. v. Vasudev Vinayak Joshi given on 13 September 1989, in which the learned Singe Judge Smt. Sujata V. Manohar, J., upheld the decision of the Industrial Court (given by the very same Member as before us, viz., respondent 2) which is to the very effect as given in the present matter, viz., that the workman's contentions were required to be upheld. This decision has been reported in 1990-I L.L.N 191 (current issue).
8. Both the learned Member of the Industrial Court (viz., respondent 2 herein), as well as the learned Single Judge of this Court (viz., Smt. Sujata V. Manohar, J.), have considered the historical genesis of the standing order. It may be mentioned that the standing order was formulated by the Industrial Court nearly fifty years ago, but before the same was framed, suggestions had been invited from the Millowners' Association, Bombay. On an application made under S. 38(2) of the Bombay Industrial Relations Act, 1946, the Millowners' Association, Bombay, had proposed adoption of the following standing orders:
“For clerks: Every employee shall retire from service on completion of 55 years of age. The management may, if the employee is found medically fit, at their discretion grant an extension of not more than one year at a time, provided that the total extension shall not exceed two years.
For operatives: Every male operative shall retire from service on completion of 55 years of age and every female operative on completion of 50 years of age. The management may,’ if the operative is found medically fit, at their discretion grant an extension of not more than one year at a time, provided that the total period of extension shall not exceed two years.”
9. That was opposed by the Rashtriya Mill Mazdoor Sangh, the representative union, and ultimately the modification introduced by the Industrial Court is as per the present standing order which has been earlier in Para. 6 of the judgment. The difference in phraseology is so apparent and the effect, therefore, has to be accepted and must be accepted as interpreted by the Member of the Industrial Court (viz., respondent 2 herein) and by the learned Single Judge (viz., Smt. Sujata V. Manohar, J.), in Writ Petition No. 5844 of 1988.
10. What the Millowners' Association, Bombay, had proposed conferred a discretion on the management to extend the service of a particular operative on a simple consideration which was to be weighed by the employer. Of course, the evaluation had to be fair and honest. On reading the proposed standing order (as suggested by the Millowners' Association, Bombay), it could not be reasonably urged by the operatives, whether clerks or other workmen, that they had a right to be continued in service till the extended limit. The phraseology of the standing order as ultimately adopted is quite clear, since the word “shall” has been used as far as the extended age is concerned.
11. Let us now paraphrase the standing order as adopted by the Industrial Court. In the first place, it provides for an obligatory age of superannuation for an operative, which is fixed at 60 years. This is done by providing that an operative shall retire from service on attaining the age of 60 years. However, for a limited class of operatives an extension is provided which, as the phraseology clearly suggests, is an obligatory extension, but provided two conditions are satisfied.
12. These conditions are that this extension is only available for a male operative and further only if such male operative has continued to be efficient. In other words, the extension up to the age of 63 years, i.e, beyond the age of 60 years, depends, in the first place, on the sex of the operative, and in the second place, his continued efficiency. Now the phrase “continues to be efficient” will also require interpretation, but we reserve it for a later paragraph. We are in the present case concerned with what is the position when a male operative attains the age of 60 years, as respondent 1 employee is alleged to have attained on 1 January 1989.
13. A bare reading of the standing order, in our opinion, clearly suggests that unless in the opinion of the employer, honestly and properly arrived at, the male operative has lost efficiency, he would have to be continued in service and if he retains efficiency, he will have to be continued to the outer extended limit, viz., the age of 63 years. This is an obligation on the employer and a right of the employee, provided he continues to remain efficient until he reaches the outer limit.
14. These are the very aspects of the matter which have been noted by the learned Member of the Industrial Court (respondent 2 before us) in the order assailed in the writ petition as also brought out and emphasised in the judgment of the learned Single Judge (Smt. Sujata V. Manohar, J.), in Writ Petition No. 5844 of 1988 reported in 1990-I L.L.N 191 (current issue) to which we have adverted earlier. We are in full agreement with the approach as well as the conclusion of the Single Judge.
15. Sri Shrikrishna on behalf of the petitioners had submitted that the learned Member of the Industrial Court (viz., respondent 2 before us) as well as the learned Single Judge (viz., Smt. Sujata V. Manohar, J.), were in error is not following the decision of the Supreme Court in Kailash Chandra v. Union of India [A.I.R 1961 S.C 1346]. The portion of the rulings in the above case on which reliance is placed is set out in Para. 5 of this decision and may be extracted:
“(5) Clause (a) (of rule 2046(2) of the Railway Establishment Code) deals with Railway ministerial servants other than those who entered Government service on or after 1 April 1938, or those in Government service on 31 March 1938, who did not hold a lien or a suspended lien on a permanent post on that date. The exact words of the rule are:
‘A ministerial servant who is not governed by Sub-cl. (b) may be required to retire at the age of 55 years but should ordinarily be retained in service if he continues to be efficient up to the age of 60 years. He must not be retained after that age except in very special circumstances which must be recorded in writing and with the sanction of the competent authority.’”
16. The Bench which decided the matter was of the opinion that the use of the word “ordinarily” made no difference to the correct interpretation of the rule and set out the rule excluding the word “ordinarily.” This recast rule is to be found on the very same page but is the right hand column and according to the Supreme Court, leaving out the word “ordinarily,” the rule would read thus:
“A ministerial servant who is not governed by Sub-cl. (b) (of rule 2046(2) of the Railway Establishment Code) may be required to retire at the age of 55 years but should be retained in service if he continues to be efficient up to the age of 60 years.”
17. The rule was read by the Supreme Court not as one giving any right to the employee but giving an option to the employer, and in the opinion of the Court the proper interpretation was made clear and put beyond doubt by the use of the word “ordinarily,” since “ordinarily” meant in a large majority of cases but not in all.
18. The phraseology employed in the said clause which dealt with Railway servants and which was being construed by the Supreme Court is totally different from standing order 20-A. In the first place, in the said clause, even the provision for retirement at the age of 55 years is cast not in obligatory language but in the much milder tone indicated by the use of the words “may be required to retire at the age of 55 years.” The use of the words “may be” would suggest some sort of discretion and not an obligation. If, at all, the discretion intended is of the employer and this is put beyond doubt by the subsequent paragraph of the rule which clearly indicates that the discretion is that of the employer who should ordinarily retain the Railway servant in service if he continues to be efficient up to the age of 60 years. In the standing order that we have before us ‘we have no such indication of an option or discretion being conferred on the employer. An operative is to be superannuated at the age of 60 years. This is the normal rule admitting of no discretion on either side. However, if the operative is a male operative and is efficient when he crosses the said age, he would be continued in service as long as he continues to be efficient and if he continues to be efficient, he must be continued in service up to the age of 63 (sixty-three) years. The Supreme Court decision in Kailash Chandra case [A.I.R 1961 S.C 1346] (vide supra), deals with the phraseology of the rule which was being considered by the Supreme Court in that matter. The said rule is in totally different language as compared with the language of the standing order being considered by us.
19. Reliance was also sought to be placed on the decision of the Supreme Court in State Bank of Bikaner and Jaipur v. Jag Mohan Lal [1989-I L.L.N 793]. The rule being construed by the Court has been set out by Jaganatha Shetty, J., speaking for the Bench, in Para. 2 of the decision. It need not be reproduced here. The language of the proviso (to the note) under the said rule is quite clear and indicates unequivocally that the discretion was that of the competent authority, i.e, the employer. The word “discretion” indeed has been used in the proviso and the element of discretion reiterated by the words “should extension be deemed desirable in the interests of the bank.” This indicates clearly the purpose behind the extension. This case is also of no assistance to Sri Shrikrishna.
20. In the result, as far as the interim order is concerned, and in the present matter even as the final orders to be passed on the complaint, we will have to uphold the interpretation put by the learned Member of Industrial Court (respondent 2 before us) on standing order 20-A and discharge the rule.
21. We may add, although it may not be strictly germane to the decision to be given, by way of an obiter, that we would read the standing order as providing for the operative remaining or continued being efficient. It would not be possible for the operative to contend that once he was efficient when he crossed the initial hurdle, viz., the ordinary age of superannuation, i.e, 60 years, he would automatically go to the extended age of superannuation, viz., 63 years, irrespective of his efficiency. During this period he has to continue to remain efficient.
22. However, a fair reading of the requirement, as we have explained it, would suggest that there should be only periodical evaluation and not a continued monitoring by the employer. Such evaluation can take place at the end of each chronological year, at which point of time the operative would have to be continued in service if he had continued to remain efficient, but the employer would be in a position to superannuate him if there is a marked fall in the efficiency of the operative.
23. We must further emphasise that the decisions having a bearing on the extended age of superannuation, viz., 63 years, on the ground of efficiency or the subsequent retention of efficiency have to be taken honestly and properly. We are not called upon in this decision to indicate what is encompassed is the phrase “efficient or continues to be efficient.” That will have to be interpreted in an appropriate proceeding if any dispute arises hereafter. This disposes of the writ petition. We may record that it is not the case of the employer in case of this employee that there was any fall in the efficiency of the workman, viz. Respondent 1, and, therefore, the insistence of the employer that he retired by superannuation on 1 January 1989, would have to be held to be incorrect. The employer may have a right to review the case of this workman as we have suggested at the end of one year. However, as we have made clear, these observations are obiter, since they go beyond the requirement of the writ petition.
24. The rule, therefore, will stand discharged. Parties to bear their own costs of the writ petition.
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