Simpson & Co., Ltd.,... v. Joint Commissioner O...

JUDGMENT

1. This writ petition is to quash the order, dated 30 July, 1976, made by the Joint Commissioner of Labour, Madras-5 (respondent 1), in Lay-Off Application No. 2 of 1976.

2. The short facts are as follows: The petitioner is engaged in engineering industry and has among others, a plant called plant No. II at Sembiam, Madras-11.

3. An amendment to the Industrial Disputes Act (hereinafter referred to as the parent Act) was enacted by the Parliament called the Industrial Disputes amendment Act of 1976, Central Act. 32 of 1976) (hereinafter referred to as the amendment Act). One of the sections introduced by the amendment Act was S. 25M. The broad feature of S. 25M was that it required an establishment covered by the new Chap. V(B) within which the establishment should apply for permission to effect lay-off of its workmen when such lay-off was due to shortage of power or natural calamities. By Sub-sec. (2) of S. 25M it was provided that where workman of such establishment has been laid-off before the commencement of the amendment Act, and such lay-off continues on: such commencement, the employer should apply to the authority specified in Sub-sec. (1) within a period of fifteen days from such commencement of the Act, to continue the lay-off. On such an application being made the authority who is constituted under the Act either grants or refuses permission after considering the merits of the case. A deeming provision has also been enacted under Sub-sec. (4) of S. 25M that if such permission or refusal is not communicated within a period of two months from the date on which the application is made, it will be deemed the permission has been granted. Sub-section 5 of S. 25M states that if no application for permission is filed within the specified period the lay-off shall be deemed to be illegal.

4. Due to various operational and economic reasons the petitioner had to effect lay-off in the carriage department and light engineering section of its plant No. II from November 1974 to February 1975. The said lay-off had continued till 5 March, 1976, and the said lay-off had come to an end by 31 July, 1976. The petitioner filed its application with respondent 1 on 19 May, 1976. The same was returned for rectification of certain defects which were accordingly rectified and the application was re-presented once on 26 May, 1976, and again on 2 Jane 1976, Respondent 1 gave a notice of the proposed enquiry into the said application. A personal hearing was given on 26 July, 1976, and again on 28 July, 1976. By the impugned order, dated 30 July, 1976, respondent 1 held that the application for permission to continue the lay-off had not been made within a period of fifteen days from the date of the commencement of the amendment Act and, therefore, it could not be entertained.

5. He further held that the application could be taken as having been made only on 2 June, 1976, since it was only on that date a complete application satisfying the requirement of S. 25M read with rule 60B of the Tamilnadu Industrial Rules was received by him. Hence he rejected the contention of deeming permission under Sub sec. (4) of S. 26M. In the result, the permission was refused.

6. In attacking the order, the following grounds are raised in the affidavit in support of the writ petition:

(i) Respondent 1 has committed an error of law in holding that the application made by the petitioner for permission to continue the lay-off was not made within the time specified in S. 25M(2) of the amendment Act, 1976. Even though the Act came into force on 5 March, 1976, it is common ground that the Authority under Sub sec. (1) himself was constituted only on 22 March, 1976, and the rules laying down the matters to be mentioned in the application were published only on 5 May, 1976. That being so respondent 1 ought to have held that the application made by the petitioner on 19 May, 1976, was made within the time granted by law.

(ii) Respondent 1 erred in holding that the application should have been made within fifteen days from the commencement of the Act, namely, 5 March, 1976. It is common ground that even respondent 1 was specified as the authority to consider the grant of permission only on 22 March, 1976. It is thus clear that no application could have been made by any person before at least that date since the section requires that the application should be made only to a specified authority.

(iii) Respondent 1 ought to have seen that only on 22 March, 1976, the State Government had given notice of the draft amendment to the rules under the Industrial Disputes Act dealing with the particulars and requirements of an application under S. 25M. The rules themselves were officially published only on 5 May, 1976. Therefore, respondent 1 ought to have accepted the contention of the petitioner that the Act itself did not come into force till 5 May, 1976, and his finding that the Act came into force on 5 March, 1976, is vitiated by an error of law apparent on the face of the record.

(iv) Respondent 1 erred in thinking that merely because S. 25M did not say that the application should be made “in a prescribed manner,” the application could have been made in any manner that the employer chose. In the light of the facts which happened the petitioner is justified in making the application only after the constitution of the specified authority by the appropriate Government and after the framing of the necessary rules in that connexion.

(v) Respondent 1 erred in stating that merely because certain returns were made for some alleged defects the application itself was not “made” on 19 May, 1976.

(vi) Respondent 1 ought to have seen that on general principles, even if it is assumed that the defects pointed out were of any substance (which is denied) still once the so called defects were rectified the application should be deemed to have been made on the date on which it was actually filed, namely, 19 May, 1976, there being no question that the petitioner diligently complied with the requisitions made by respondent 1 while returning the application.

(vii) Respondent 1 ought to have held that the application for permission was lawfully made on 19 May, 1976, and the same not having been expressly refused within two months from 19 May, 1976, the permission applied for should be deemed to have been granted on 19 July, 1976.

7. In the counter-affidavit filed on behalf of respondent 1 the facts are admitted to be correct. Concerning the various grounds it is answered as follows:

8. It is not an error to hold that the application should be made within fifteen days of the commencement of the Act, viz., 5 March, 1976, which is the plain meaning of the section and which is a statutory requirement. While no doubt the authority was appointed on 22 March, 1976, the application was not filed even within fifteen days of this date. Even assuming the inability existed on 5 March, 1976, it did not exist after 22 March, 1976, and there was no excuse for not filing the application within fifteen days of 22 March, 1976.

9. The publication of the rules or the date on and from which those rules came into force have absolutely nothing to do with the date on which the provisions of the Act came into force.

10. Section 1, Sub-sec. (2) of the Industrial Disputes (Amendment) Act clearly specifies

“that this Act shall come into force, on such date, as the Central Government may by notification in the official gazette, appoint.”

The Government of India have in their notification published in the gazette of India, dated 5 March, 1976, in Part I at pages 241 to 247, specified that the provisions of the Act shall come into force on 5 March, 1976. That being so, it cannot be held that the Act itself did not come into force till 5 May, 1976, as contended by the petitioner in this writ petition and there is, therefore, no error of law. It is not correct to contend that respondent 1 erred in thinking that because S. 25M did not specify the manner in which the application should be made, it could have been made in any manner the employer chose. It is a question of interpretation and in view of respondent 1, that was the proper interpretation.

11. There is nothing in the section to construe that the application should be made only after the framing of the necessary rules and in any case, such a construction will not be justified, just to overcome the delay. The absence of the words “in the prescribed manner” in this section is sufficiently indicative of the obligatory nature of the employer to prefer an application immediately after the commencement of the Act within a period of fifteen days or at least within a period of fifteen days from the constitution of the authority, regardless of any particular form of filing the application being prescribed or not

12. The rule-making power conferred under S. 38 of the Industrial Disputes Act, under which the draft rules were published on 22 March, 1976, has nothing to do with the mandatory requirement of an employer to make an application under S. 25M(2) of the amendment Act, 1976, for continuing the lay-off on the date of commencement of the Act, viz., 5 March, 1976, within fifteen days of such commencement. The Act no where specifies that the employer should await the publication of the rules, for making an application under S. 25M(2). In any case non-publication of the rules cannot be an excuse for not making an application within the time specified. The petitioner's action was, therefore, not correct nor legal.

13. Section 25M(1) only says that previous permission to lay-off workmen should be granted by such authority as may be specified by the appropriate Government by notification in the official gazette. It does not say that the authority should be appointed on the date on which the Act came into force or the rules should be published on the date on which the Act came into force. In fact S. 18(1) of the Industrial Disputes Act, 1947, only requires that appropriate Government may, subject to the condition of previous publication, make rules for the purposes of giving effect to the provisions of the Act.

14. The allegation that the finding of the Joint Commissioner of Labour that the application which has been made on 19 May, 1976, was made only on 2 June, 1976, on the ground of alleged returns is not correct. The reasons for this finding have been clearly set out while dealing with issue (3) in the order. Although the application was originally made on 19 May, 1976, it was defective and was returned to the petitioner on 22 May, 1976, for the following defects:

(1) The date from which permission is required to continue the lay-off has not been specified in Form Q3.

(2) Sufficient number of copies of application for service on the workmen have not been received.

(3) None of the annexures has been signed.

(4) Under item (6) of the annexure, dc tails of annual production year-wise for the preceding three years and production figures for the preceding twelve months from the date of application have not been furnished.

(5) In respect of L.E.S items (vide annexure D) figures upto January 1975, i.e, for two years and seven months only have been furnished instead of for three years.

Similar information (as in items (4) and (5) above) is required under item (20) also.

15. The application which was re-presented on 27 May, 1976, was also defective since sufficient number of copies for service on workmen were not received and the date from which permission to continue the lay-off was required was not specified. While returning this application on 31 May, 1976, the petitioner was asked to present a fresh application after rectifying the defects and it was presented on 2 June, 1976.

16. When it was re-presented, the date of such re-presentation was taken into account as the date of application. If this was not done, the danger would be that by mere efflux of time, viz., of two months, contemplated in Sub-sec. (4) of S. 25M, the employer would have the indirect benefit of a permission being accorded even without an express order given by the authority after applying his mind on the facts of the case. Moreover, when an application does not conform to the provisions of the rules, it cannot be treated as a proper application made in accordance with the rules and will have to be rejected and that was what was done in this case.

17. The averment that the effective application once rectified should be deemed to have been made on the date on which it was originally filed, viz., 19 May, 1976, is baseless. It cannot stand the test of law, as it will nullify the requirements of S. 25M(4) since the time taken for rectification of defects and re-presentation will make it impossible for the authority to give his decision within the period of two months, as other formalities like service of application on the workmen and making enquiry on the parties will also have to be complied with, within the statutory time limit of two months, which could be impossible, if the above contention were to be accepted.

18. Sri V.K Thiruvenkatachari, the learned counsel for the petitioner, draws my attention to the following provisions of the principal Act, viz., Ss. 1(3), 2(a) and 38, the rule-making section. He also refers to the Amendment Act (Central Act 32 of 1976) which deals with four kinds of applications, viz:

(1) Under S. 25M(1) permission to lay-off;

(2) under S. 25N(2) permission to continue the lay-off;

(3) under S. 25N(2) permission for retrenchment; and

(4) under S. 25-O (1) permission for closure.

For not filing the continuance application penal consequences would be attracted under S. 25M(4) in that the lay-off is held retrospectively legal and full pay will have to be paid to the workers. Prosecution also may be launched under S. 25-O.

19. Having regard to this background, Sri V.K.T Chari argues, in any State the employer could make an application of any one of the above four kinds, only when the State had notified the authority and the State Rules had been promulgated. In the instant case on 22 March, 1976, the Joint Commissioner of Labour was appointed as the Authority under S. 25M(1). The rules had been promulgated on 5 May, 1976. Therefore, the date of commencement for the purposes of the amendment Act in Tamilnadu will be 5 May, 1976. This is because the Act contains no prevision other than these applications mentioned above.

20. Though the application filed on 19 May, 1976, was returned for some technical compliances and ultimately came to be represented on 2 June, 1976, 19 May, 1976, must be held to be the proper date, since the rule has been substantially and fully complied with. The rule as to furnishing copies for service is directory and not mandatory. A similar provision under the Representation of Peoples Act of 1951 was treated to be mandatory in view of the specific wording of S. 85 of the Act which says:

“the Election Commission shall dismiss the petition.”

Further, these provisions could not be questioned by reason of Art. 329 of the Constitution of India. However, in the instant case the provision relating to furnishing copies for service is not in the Act itself. Therefore, in so far as there is no section in the Act making it mandatory it could even be questioned as unconstitutional, but it is not necessary for this purpose. In support of this submission, the learned counsel cites the decision in Ch Subbarao v. Member, Election Tribunal, Hyderabad [A.I.R 1964 S.C 1027].

21. In Writ Petition No. 3686 of 1976, the application was made on 19 May, 1976. The order was passed on 30 July, 1976. Therefore, by deeming provision under Sub-sec. (5) of S. 25N, since no order was made within two months the permission must be deemed to have been granted.

22. It cannot also be said that the writ petitioner (the employer) has been lacking in bona fides. From 1 August, 1976, the workmen are being paid full wages. From 8 September, 1976, they are on actual service. As to lay-off period, i.e, November 1974 to February 1975, when lay-off was made and 31 July, 1976, when lay-off ended (full pay given as from 1 August, 1976) the result of Lay off Application No. 2 of 1976, should have been treated as an application made in time on 19 May, 1976, and permission to continue the lay-off must be deemed to have been given because there is no order prejudicially affecting the workmen. The workmen were free, if so advised, to apply to Government to refer the dispute whether the lay-off between November 1974 to February 1975 and 31 July, 1976, was justified. The question whether the union had previously raised any such dispute as to the lay-off could be one of the relevant matters for Government's consideration in deciding to refer or refusing to refer the dispute, apart from other factors such as delay and the merits of the employer's case. Since this is justiciable issue the proper remedy would be, therefore, to raise an industrial dispute. In support of this submission he relies on the decision in Workmen of Firestone Tyre and Rubber Company of India (Private), Ltd. v. Firestone Tyre and Rubber Company of India (Private), Ltd. [1976 — II L.L.N 176].

23. If the contention of the writ petitioner is accepted in that the application which was filed on 19 May, 1976, was a valid application and within time the employer will be saved from:

(1) the confiscatory or penal consequences flowing from S. 25M(6) stating the lay-off ab initio illegal with liability for back period full wages; and

(2) prosecution under S. 25Q.

24. The authority to make the rules is conferred under S. 38. Sub-section (1) is general while Sub sec (2) is particular and the general power is not controlled by the particularization under Sub-sec. (2) as laid down in the decision in S. Padmanabhan v. Commissioner Of Income-Tax, Madras [I.L.R 1956 Mad. 1272]. In the absence of prescription by rules the intention of the Legislature is not fully effectuated and the power is incomplete and cannot be exercised. For instance under S. 25N(1)(c) notice in the prescribed manner is contemplated for retrenchment. Again in S. 25-O (1) notice in the prescribed manner is required for closure.

25. If those two sections enjoin notice in the prescribed manner the framing of the rules are necessary. Hence the date of commencement should be only 5 May, 1976 when the rules came to be published finally. There cannot be a different date of commencement for various sections. In support of this submission the learned counsel relied on the decisions in Nemi Chand v. Secretary of State for India [I.L.R 34 Cal. 511] and Collector of Customs v. Lala Gopikrishna Gokuldass [A.I.R 1955 Mad. 187].

26. When the amendment Act became law on 16 February, 1976, by the Presidential assent, what exactly is the meaning to be ascribed when it is stated that it shall come into force on a later date to be notified by the Government. In such a case, the relevant question to be asked is, is not a formal notification necessary even for Tamilnadu if the date prescribed by the Central Government, viz., 5 March, 1976, is not applicable. In the submission of the learned counsel the later date is provided exactly for the promulgation of the rules and the appointment of authorities. When the Act and the rules are brought into force together on the same date the rules can be used to interpret the Act as laid down in the decisions in In re: The Delhi Laws Act, 1912, etc. [1951 S.C.R 747]; Rajnarain Singh v. Chairman, Patna Administration Committee, Patna, [(1955) 1 S.C.R 290] at page 298 and State of Bombay v. United Motors (India), Ltd., [1953 S.C.R 1069] at page 1095. The Central Rules show that the form giving the particulars required is important to supplement the provision to apply because it is the form which asks for various data which normally an applicant will not include. Similar intention is manifested under the draft Tamilnadu Rules, dated 23 June, 1976. It is open to question whether a formal notification under S. 1(2) for Tamilnadu, is not necessary. In the instant case it is enough if the date 5 May, 1976 is fixed as the proper date for the commencement of the Act.

27. Sri B.R Dolia, learned counsel appearing for the workmen's union submits that the framing of the rule is not a condition precedent for complying with the provisions of S. 25M. Under S. 25M(2) the authority was specified on 22 March, 1976. Therefore, nothing prevented the management to apply to the Authority specified under the Tamilnadu Rules made on the said date. The section does not say the application must be in the prescribed form unlike S. 25(N)(1)(c) or S. 25M(4). Even in a case where the section requires a prescription under the rules, the rules were held to be regulatory. This is in Gopalakrishna Pillai v. State of Kerala [1976 K.L.T 754]. The instant case is worse because there is no prescription under the section. The same view was taken in the decision in Surajmull v. Incometax Commissioner [A.I.R 1961 Cal. 578].

28. Sections 25N(1)(c) and 25-O speak of future retrenchment and closure. Only for them, the application in the prescribed manner is contemplated while not to a case of continued retrenchment or continued closure. Section 25-0(3) states when a notice has been served for closure and the period mentioned under the notice has not expired on the commencement of the amendment Act such employer shall not close down the undertaking but within the period of fifteen days apply to the Government for permission to close down the undertaking. Under those circumstances can the Government refuse to grant permission stating that the rules had not been framed? Such an interpretation would work great injustice as refusal to accord the permission till the rules are so framed, would cause severe financial strain to the employer. Same is the case of retrenchment as contemplated under S. 25N(4). In such a case if permission to retrench is to await the framing of the rules, the employer may find it impossible to carry on. Sections 25N(7) and 25F do not depend upon the framing of the rules at all. From the date of commencement of the Act, viz., 5 March, 1976, these sections will come into play. Therefore, the contention that the framing of the rules is necessary for giving effect to the provisions of the amending Act, cannot be accepted.

29. In every case of lay-off all that the employer is required to state is the reason for such a lay-off or the justification. The law relating to the same is well-settled as seen from the decision in Workers of Dewan Tea Estate v. Their Management [1964 — I L.L.J 358]. Therefore, there is no basis for the employer to state that he is handicapped by the absence of the rules and the prescribed form.

30. The learned Government Pleader adopts the arguments of Sri B.R Dolia.

31. Having regard to the above arguments the following two questions arise for my determination:

(1) What is the date of commencement of the amendment Act and whether the framing of the rules under S. 38 of the Act by the Government of Tamilnadu is necessary for the purpose of working the amendment Act?

(2) Can the application of the petitioner, dated 19 May, 1976, be considered to be a valid application though it was returned for certain technical compliances and re-presented after complying with those requirements?

32. For answering the above two questions, the following background and the relevant sections and dates require to be noticed:

33. The Industrial Disputes Act (Central Act 14 of 1947) received the President's assent on 17 March, 1947. Section 1(3) of the Act states that it shall come into force on 1 April, 1947. Section 38 confers the rule-making power on the appropriate Government. Section 2 (a) defines the “appropriate Government” as follows:

“‘appropriate Government’ means—

(i) in relation to any industrial dispute concerning any industry carried on by or under the authority of the Central Government or by a railway company (or concerning any such controlled industry as may be specified in this behalf by the Central Government) or in relation to an industrial dispute concerning the Industrial Finance Corporation of India established under S. 3 of the Industrial Finance Corporation Act, 1948 (15 of 1948) or the Employees' State Insurance Corporation established under S. 3 of the Employees' State Insurance Act, 1948 (34 of 1948), or the “Indian Airlines” and “Air India” Corporations Established under S. 3 of the Air Corporations Act,) 1953 (27 of 1953), or the Life Insurance Corporation of India established under S. 3 of the Life Insurance Corporation Act, 1956 (31 of 1956), or the Agricultural Refinance Corporation established under S. 3 of the Agricultural Refinance Corporation Act, 1963 (10 of 1963) or the Deposit Insurance Corporation established under S. 3 of the Deposit Insurance Corporation Act, 1961 (47 of 1961) or (the Unit Trust of India established under S. 3 of the Unit Trust of India Act, 1963 (52 of 1963) or (a banking or an insurance company, a mine, an oil-field) (a Cantonment Board) or a major port, the Central Government; and

(ii) in relation to any other industrial dispute, the State Government.”

The Industrial Disputes Amendment Act (Amendment Act 32 of 1976), received the Presidential assent on 16 February, 1976. Under the rule-making powers, the Central Government framed the draft rules on 20 February, 1976. Ten days' time was given for making representations. Ultimately, the rules came to be finally published in the Government of India Gazette, dated 5 March, 1976. The effect of it would be the Act came into force on 5 March, 1976. The Chief Commissioner of Labour was specified as the authority under Sub-sec. (1) of S. 25M and Sub-secs. (1) and (7) of S. 25N.

34. In so far as it relates to Tamilnadu, by a publication in the Tamilnadu Government Gazette, Extraordinary, Part II, dated 22 March, 1976, the following authorities were appointed:

For the purpose of S. 25N(1) the Joint Commissioner of Labour. For the purpose of S. 25N(1)(c), the Commissioner of Labour. For the purpose of S. 25N(7), the Commissioner of Labour.

On that very date, viz., 22 March, 1976, in the Tamilnadu Government Gazette, Extraordinary, Part II, the draft rules were published. Two weeks' time was granted for representation. The final rules came to be published under the Tamilnadu Government Gazette, Part III, I-A, dated 5 July, 1976. Rule 60B prescribes for an application for permission to lay off under S. 25M.

The said rule reads:

“(1) Application for permission to lay off any workman under Sub-sec. (1), or for permission to continue a lay-off under Sub-sec. (2) of S. 25M shall be made in Form Q3 and delivered to the authority specified under Sub-sec. (1) either personally or by registered post acknowledgment due and where the application is sent by registered post, the date on which the same was delivered to the said authority shall be deemed to be the date on which the application was made, for the purposes of Sub sec. (4) of the said section.

(2) The application for permission shall be made in triplicate and sufficient number of copies of the application for service on the workmen concerned shall also be submitted along with the application.

(3) The employer concerned shall furnish to the authority to whom the application for permission has been made such further information as the authority considers necessary for arriving at a decision on the application, as and when called for by such authority, so as to enable the authority to communicate the permission or refusal to grant permission within the period specified in Sub-sec. (4) of S. 25M.

(4) Where the permission to layoff has been granted by the said authority, the employer concerned shall give the Commissioner of Labour a notice of commencement and termination of such lay off in Forms Q1 and Q2 respectively and where permission to continue a lay-off has been granted by the said authority the employer shall give to the Commissioner of Labour a notice of commencement of such lay-off in Form Q1 in case such a notice has not already been given under sub-rule (1) of the rule 60A and a notice of termination of such lay-off in Form Q2.

(5) The notice of commencement and termination of lay-off referred to in sub-rule (4) shall be given within the period specified in sub-rule (1) of rule 60 A”

Form Q3 is as follows:

(To be submitted in triplicate with additional number of copies for service on the workmen concerned)

Form of application for permission to lay off workmen in industrial establishments to which provisions of Chap V-B of the Industrial Disputes Act, 1947 (Central Act 14 of 1947), apply:

(The authority specified under Sub-sec. (1) of S. 25M of the Act).

Under Sub-sec. (1)/Sub-sec. (2) of S. 25M of Industrial Disputes Act, 1947, (Central Act 14 of 1947), read with sub-rule (1) of rule 60B of the Tamil Nadu Industrial Disputes Rules, 1958, I/we hereby apply for permission to lay off/permission to continue the lay-off of… workmen of a total of…. workmen employed in my/our establishment with effect from… for the reasons set out in the annexure.

Permission is solicited * for the lay-off/to continue the lay-off of the said workmen.

Such of the workmen permitted to be laid-off will be paid such compensation, if any, to which he is entitled under Sub-sec. (6) of S. 25M, read with S. 25C of the Industrial Disputes Act, 1947 (Central Act 14 of 1947).

Yours faithfully,

(Signature)

* (Strike out whatever is inapplicable.)

(Please give replies against each item.)

Annexure.

(Please give replies against each item.)

number.

(1) Name of the undertaking with complete postal address, including telegraphic addresses and telephone number.

(2) Status of undertaking—

(i) Whether Central Public Sector, State Public Sector/Foreign Majority Company/Joint Sector, etc.

(ii) If belongs to large industrial house, please indicate the controlling group, and if a foreign majority company, indicate the extent of foreign holdings.

(iii) Whether the undertaking is licenced/registered and if so, the name of licensing/registration authority and licence/registration certificate numbers.

(3)(a) Names and addresses of the affected workmen proposed to be laid off/names and addresses of the workmen laid off before the commencement of the Industrial Disputes (Amendment) Act, 1976 (Central Act 32 of 1976), and the dates from which each of them have been laid off.

(b) The nature of the duties of the workmen referred to in sub-item (a), the units/section/shops where they are working and the wages drawn by them.

(4) Items of manufacture and scheduled industry/industries under which they fall.

(5) Details relating to installed capacity, licenced capacity and utilized capacity.

(6)(i) Annual production, item-wise for preceding three years.

(ii) Production figures, month-wise for the preceding twelve months.

(7) Work-in-progress, item-wise and value-wise.

(8) Any arrangements regarding off-loading or sub-contracting of products or any components thereof.

(9) Position of the order book, item-wise and value-wise for a period of six months, and one year, next following and for the period after the expiry of the said one year.

(10) Number of working days in a week with the number of shifts per day and the strength of workmen per each shift.

(11) Balancesheets, profit and loss accounts and audit reports for the last three years.

(12) Financial position of the company.

(13) Names of the inter-connected companies or companies under the same management.

(14)(i) The total number of workmen and the number of employees (category-wise) other than workmen as defined under the Industrial Disputes Act, 1947 (Central Act 14 of 1947), employed in the undertaking.

(ii) Percentage of wages of workmen to the total cost of production.

(15) Administrative, general and selling cost in absolute terms for year in the last three years and percentage thereof to the total cost.

(16) Details of lay-offs resorted to in the last three years (other than the lay-off for which permission is sought) including the periods of such lay-offs, the number of workmen involved in each such lay-off and the reasons thereof.

(17) Anticipated savings due to the *proposed lay-off/lay-off for the continuance of which permission is sought.

(18) Any proposal for effecting savings on account of reduction in—

(i) managerial remuneration;

(ii) sales promotion cost; and

(iii) general administration expenses.

(19) Position of stocks on the last day of each month in the preceding twelve months.

(20) Annual sales figures for the last three years and month-wise sales figures for the preceding twelve months, both item-wise and value-wise.

(21) Reasons for the proposed lay-off/lay-off for the continuance of which permission is sought.

(22) Any specific attempts made so far to avoid the *proposed lay-off/lay-off for the continuance of which permission is sought.

(23) Any other relevant factors with details thereof.

* (Strike out whatever is inapplicable.)”

35. Section 25M(1) throws a prohibition on lay-off. Section 25M(2) which is important for our purposes, reads as follows:

“Where the workmen (other than badli workmen or casual workmen) of an industrial establishment referred to in Sub-sec. (1) have been laid off before the commencement of the Industrial Disputes (Amendment) Act, 1976, and such lay-off continues at such commencement, the employer in relation to such establishment shall, within a period of fifteen days from such commencement, apply to the authority specified under Sub-sec. (1) for permission to continue the lay-off.”

In the first case, the lay-off commenced in November 1974, long before the amendment Act. To continue such lay-off the employer will have to apply within a period of fifteen days from the commencement of the amendment Act of 1976, to the authority specified under Sub-sec. (1) for permission to continue the lay-off. The amendment Act having received the Presidential assent on 16 February, 1976, would have normally come into operation on that day vide S. 5 of the General Clauses Act — Central Act 10 of 1897. But Sub-sec. (2) of S. 1 of the amendment Act states that the amendment Act shall come into force on such date as the Central Government may, by notification in the official gazette, appoint. The notification is dated 5 March, 1976. Therefore, the Act had come into force on that day. Nevertheless, the authority for the purpose of S. 25M(2) has not been specified for Tamilnadu till 22 March, 1976, when alone by the gazette publication, the Joint Commissioner of Labour was constituted as the authority for the purpose of S. 25M. Therefore, Sri Dolia contends that once the authority is specified, an obligation was cast on the employer to make an application to the said authority within fifteen days from the date of the specification of the authority. He places strong reliance on the decision in Gopalakrishna Pillai v. State of Kerala [1976 K.L.T 755] (vide supra). That was a case in which S. 85 of the Kerala Municipal Corporation Act, 1961, is stated at page 756 thus:

“85. Special superior appointments. — The council may, subject to such rules as may be prescribed, appoint—

(a)***

(b) engineers, architects or experts in town improvement or towns planning for the purpose of preparing, executing or supervising any scheme or work undertaken by the corporation.”

On the basis of this section, it was urged the power of appointment could be exercised by the Commissioner only after the rules had been framed by the Government as the exercise of the power was subject to rules. Emphasis was placed on the words “subject to such rules as may be prescribed.” This contention was negatived holding:

“The power contained in S. 85 is to be regulated by such rules as are either already made or may be made in future. But they cannot be construed as a condition precedent to the exercise of the power itself. The rules are regulatory of the power but their existence is not a pre-condition for the operation of the power under statute. Therefore, S. 85 cannot be interpreted to mean that the power conferred thereby remains suspended until rules are made and become operative when such rules are current.”

One of the cases relied on in this decision, viz., Surojmull v. Commissioner of Incometax [A.I.R 1961 Cal. 578], is also pressed into service. In that case, the question was whether till rules were framed under the Incometax Act of 1922 under S. 37(2) whether the power to search and seize could be exercised? The question was posed as follows:

“(3) Assuming that the provisions of Sub-sec. (2) of S. 37, are intra vires, the particular authorization issued in this case by the Commissioner, respondent 1, and the action taken thereof, should be struck down because:

(i) The provisions of Sub-sec. (2) of S. 37 are ‘subject to any rules made in this behalf.’ At the relevant time, no rules had been made. Regard being had to the expression used, it must be held that the provisions of this sub-section can only come into operation after rules have been framed.”

The answer is contained in Para. 67 of the judgment at page 595 in the following terms:

“It will be necessary to clear the ground by deciding point (3)(i) first. If Sub-sec. (2) never come into operation until rules were framed in this behalf, then indeed, it is unnecessary to proceed further, because the two authorizations were made and the search and seizure effected, at a point of time, when no rules had been framed and consequently, the entire operation would be contrary to law. It will be observed that the expression used is ‘subject to any rules made in this behalf.’ This should be contrasted with the expression used in S. 10(7) which lays down that the profits and gains of any business of insurance and the tax payable thereunder shall be computed—

‘in accordance with the law contained in the schedule to this Act.’

In S. 58(i)(3) the expression used is—

‘subject to such rules as the Central Board of Revenue may make in this behalf.’

There must be some difference between these expressions. Where the expression used is ‘in accordance with the rules’ there is no difficulty. In such a case, the rules must come first, otherwise, there cannot be anything, ‘in accordance with it. But where the expression is ‘subject to rules,’ I do not see why the rules must necessarily come first. The particular provision may itself lay down the law, which may be supplemented or modified by statutory rules framed in that behalf. Where, of course, it is found that the existing provisions in a statute cannot possibly be given effect to, without the framing of rules, that is a different matter. If, however, it is possible to give effect to the provisions as they stand, then I do not see the justification in holding that the provision does not come into force until rules are framed simply because it has been made ‘subject to any rules made in this behalf.’ In my opinion, it is possible to give effect to the provisions of law contained in Sub-sec. (2) of S. 37, even without rules. Consequently, this argument fails. Our attention has been drawn to S. 41 of the Arbitration Act, 1940, which lays down that

‘subject to the provisions of this Act and of rules made thereunder.’

the provisions of the Code of Civil Procedure should apply to all proceedings before the Court, etc. It has never been argued that the Code did not apply until rules were framed.”

In adopting the same line of arguments, the learned Government Pleader in this connexion relies on the decision in Dargah Committee v. State of Rajasthan [A.I.R 1962 S.C 574]. In Para. 7 at page 578, the validity of a demand without prescribing a form for making a demand was dealt with and answered as follows:

“Sri Chatterjee also attempted to argue that the proceedings under S. 234 taken against the appellant by respondent 2 were incompetent because a demand has not been made by respondent 2 on the appellant in the manner prescribed by rule as required by S. 234. It does not appear that rules have not been framed under the regulation and so no form has been prescribed for making a demand under S. 222(1). Therefore, the argument is that unless the rules are framed and the form of notice is prescribed for making a demand under S. 222(1) no demand can be said to have been made in the manner prescribed by rules and so an application cannot be made under S. 234. There are two obvious answers to this contention. The first answer is that if the revisional application made by the appellant before the High Court was incompetent this question could not have been urged before the High Court because it was part of the merits of the case and so cannot be agitated before us either. As soon as it is held that the magistrate was not an inferior criminal Court the revisional application filed by the appellant before the High Court must be deemed to be incompetent and rejected on that preliminary ground alone. Besides on the merits we see no substance in the argument. If the rules are not prescribed then all that can be said is that there is no form prescribed for issuing a demand notice; that does not mean that the statutory power conferred on the Committee by S. 222(1) to make a demand is unenforceable. As a result of the notice served by respondent 2 against the appellant, respondent 2 was entitled to make the necessary repairs at its cost and make a demand for reimbursement of the said cost. That is the plain effect of the relevant provisions of the regulation; and so, an amount which was claimed by virtue of S. 222(1) does not cease to be claimable just because rules have not been framed prescribing the form for making the said demand. In our opinion, therefore, the contention that the application made under S. 234 was incompetent must be rejected.”

These are all cases in which the powers conferred under the respective enactments do not remain suspended to await the framing of the rules. But the problem arising in the instant case, in my view, should be considered in a different perspective. Can the law work without rules would arise only when “ex hypothese” the law is in force. On the contrary, when the question is, “what is the law in force,” the enquiry should be different. In other words, when the law is not an existing law, but is brought into force by a future notification a different test will have to be applied. It may be asked why has the Parliament provided under Sub-sec. (2) of S. 1 that the amendment Act shall come into force on such date as the Central Government may, by notification in the official gazette, appoint. Is it without any significance?

(Emphasis supplied)

36. The following cases throw a good deal of light on this aspect:

In re: The Delhi Laws Act, 1912, etc. (1951 S.C.R 747] (vide supra), at page 778, it was held:

“Within these limits of subjects and area the local Legislature is supreme and has the same authority as the Imperial Parliament, or the Parliament of the Dominion, would have had under like circumstances to confide to a municipal institution or body of its own creation authority to make bye-laws or resolutions as to subjects specified in the enactment, and with the object of carrying the enactment into operation and effect.

It is obvious that such authority ‘is ancillary to legislation’ and without it an attempt to provide for varying details and machinery to carry them out might become oppressive or absolutely fail…. It was argued at the Bar that the Legislature committing important regulations to agents or delegates effaces itself. That is not so. It retains its power in tact and can whenever it pleases de story the agency it has created and set up another or take the matter directly into its own hands. How far it shall seek the aid of subordinate agencies and how long shall continue them are matters for the Legislature and not for the Courts of law to decide.”

37. In the decision in State of Bombay v. United Motors (India), Ltd., [1953 S.C.R 1069] at page 1095, it was held:

“The Act and the rules having been brought into operation simultaneously, there is no obvious reason why the rules framed in exercise of the power delegated by the Legislature should not be regarded as part of the ‘law’ made by the State. (See observations at page 862 in The Delhi Laws Act case [(1951) 1 S.C.R 747] (vide supra). That position might be different if the rules had come into operation sometime later than the charging sections of the Act, for, in that case, it is arguable that if the legislation, without excluding the two classes of sales or purchases, was beyond the competence of the Legislature at the date when it was passed, the exclusion subsequently effected by the rules cannot validate such legislation. But, as already stated, that is not the position here, and the learned Judges below fell into an error by overlooking this crucial fact when they say,

‘if the Legislature had no competence on the date the law was passed, the rules subsequently framed cannot confer competence on the Legislature.”

38. In the decision in Rajnarain Singh v. Chairman, Patna Administration Committee, Patna, [(1955) 1 S.C.R 290] (vide supra), at page 298, it was held:

“In each case, the Central Legislature had empowered an executive authority under its legislative control to apply, at its discretion, laws to an area which was also under the legislative sway of the centre. The variations occur in the type of laws which the executive authority was authorized to select and in the modifications which it was empowered to make in them. The variations were as follows:

(1) Where the executive authority was permitted, at its discretion, to apply without modification (save incidental changes such as name and place), the whole of any Central Act already in existence in any part of India under the legislative sway of the centre to the new area:

This was upheld by a majority of six to one.

(2) Where the executive authority was allowed to select and apply a provincial Act in similar circumstances:

This was also upheld, but this time by a majority of five to two.”

From the above cases it follows when the Act and the rules brought into force together on the same date the rules can be used to interpret the Act.

39. The object of prescribing a later date as under S. 1(2) of the amendment Act is to postpone the application of the law, to set up a machinery so that there will be regularity. That machinery came to be provided only under the Tamilnadu Rules finally published on 5 May, 1976. Both the learned counsel for the workmen (Sri B.R Dolia) and the learned Government Pleader would cling on to that date, viz., 22 March, 1976, which is the date of constitution of the authority and on the basis of the decisions in Gopalakrishna Pillai v. State of Kerala [1976 K.L.T 755] (vide supra), would contend that is the date of the Act. I am unable to accept this argument for two reasons:

(1) The argument fails to take note of the publication of the draft rules on 22 March, 1976 itself thereby manifesting an intention on the part of the Legislature to supply the details which are necessary for making valid application; and

(2) secondly, the cases relied on do not afford any assistance since they relate to laws which are in force and not to a case where the law is to come into force on a future notified date.

Therefore, the argument of Sri V.K.T Chari in this regard merits acceptance.

40. No doubt, the law relating to retrenchment came to be succinctly laid down in the case in Workers of Dewan Tea Estate v. Their Management [1964 — I L.L.J 358] (vide supra), in that the employer will have to give proper reasons or justifications for lay-off. But in the absence of the form all that he could have done is to merely make a request giving the reason for the lay-off to continue such lay-off. Under those circumstances what is it, the authority can decide? Section 25M(3) requires making of an inquiry. On that mere request for sanction it is hardly possible for the authority to pass a judicial order after making an enquiry. When the draft rules were published on 22 March, 1976, rule 60B required the employer to apply for Form Q3. That form, which I have extracted above, requires the furnishing of very many details which the employer would not have and could not have furnished. Only on such details being furnished, an inquiry as contemplated under S. 25M(3) could be made and the grant or refusal of permission would be a considered order on the materials furnished in Form Q3. It is also relevant to refer to the corresponding Central Rules. They would show that the form giving the particulars required is necessary for the effective application of the provisions because that requires various data which will not be furnished by any applicant, however vigilant or earnest he might be.

41. On publication of the draft rules in the Tamilnadu Government Gazette on 22 March, 1976, certainly it is well open to the employer to entertain the belief that having regard to the proposed rule 60B, he was required to submit in the relevant form That application under sub-rule 2 will have to be made in triplicate. Even after this it is open to the authority to call upon the employer to furnish such information as might be necessary. Besides, the detail as to the manner in submitting the application either personally or by registered post under sub-rule (1) is also stated. In view of all these, I am totally unable to accept the contention raised on behalf of the respondents that mere constitution of authority on 22 March, 1976, would mean, that is the date of commencement for reckoning the fifteen days' period of limitation during which the application to continue the layoff under S. 25M(2) will have to be filed.

42. The next contention urged on behalf of the respondent is S. 25M(2) does not contain the words like S. 25N(1)(c), such as notice “in the prescribed manner” or S. 25-O (1) “a notice in the prescribed manner.” It may be so. Nevertheless, this argument carries no force since it does not take note of the publication of the draft: rule on 22 March, 1976, which is very important for our purposes. More than above these, this interpretation of the respondents would mean certain sections coming into force on 22 March, 1976, while others like S. 25N(1)(c) or S. 25-O (1) would come into force on 5 May, 1976. I am unable to see any warrant for this submission since the Legislature has not manifested any intention either directly or even indirectly to this effect.

43. Merely because S. 25N(1)(c) or S. 25-O speaks of future retrenchment or closure it cannot mean that for the purpose of those two sections the Act must be considered to come into force on 5 May, 1976. The rule of uniformity would require, the commencement of the Act is certain, which in my view is only 5 May, 1966.

44. My attention was also drawn to Ss. 25N(4) and 25-O(3) and on this basis the argument is raised that when such applications are made the Government cannot refuse to give permission since the rules have not been framed. A careful reading of these two sub-sections shows that it is an obligation on the part of the employer to make the application within fifteen days of the commencement of the amendment Act, which would undoubtedly be 5 March, 1976. The language of this sub-section is very clear in its terms. If the employer does not fulfil his obligation he will be exposing himself even to the risk of prosecution. Therefore, these two sections do not help in deciding the issue as to the date of commencement for the purpose of the other sections.

45. I see great force in the argument of Sri V.K.T Chari that if it were held the date of commencement is 5 May, 1976, absolutely no prejudice is caused to the workers. On the contrary, if it is construed the other way, certain penal (civil) consequences would follow and the lay-off is deemed illegal from the date of the lay-off under S. 25M(5). In addition, the prosecution also may be launched under S. 25Q for the illegal lay-off. This is an added reason for holding that the date of commencement is 5 May, 1976. Thus I answer question (1) holding the date of commencement is 5 May, 1976, and the framing of the rules is necessary for the purpose of working the amendment Act.

46. Question (2).— The application was filed on 19 May, 1976. But it was returned for certain technical compliances; for instance furnishing proper number of copies for service. They were complied with and duly re-presented. I am of the view that the rule is merely directory and cannot be construed as mandatory. For instance in the decision in Arunachala v. Muthusadasiva [I.L.R 1950 Mad. 651], a similar rule relating to filing of certified copy of the decree along with the execution petition was held to be not mandatory. Of course in a case which arose under the Representation of Peoples Act in Ch Subbarao v. Member, Election Tribunal, Hyderabad [A.I.R 1964 S.C 1027] (vide supra), a similar provision was held as mandatory having regard to the language of S. 85 of the Representation of Peoples Act of 1951, which is to the following effect:

“85. If the provisions of S. 81 or S. 82 or S. 117 have not been complied with, the Election Commission shall dismiss the petition.”

Section 81(3) requires an election petition to be accompanied by as many copies thereof as there are respondents in the petition. That case, therefore, stands on a different footing. This apart, there has not been any lack of bona fides on the part of the petitioner in that it cannot be said that he purposely delayed the representation to gain some undue advantage. This is because from 1 August, 1976, the workmen are being paid full wages. From 8 September, 1976, they have been on actual service. So much so, there is no unjust or unfair consequence for the workmen if the application is to be treated as an application made on 19 May, 1976. Thus I conclude answering question (2) that the application filed on 19 May, 1976, was a valid application and is within time.

47. Having regard to the above findings it is not necessary for me to consider whether by the operation of the deeming provision, it should be held the petitioner had been granted permission, since there is no refusal within the period of two months under S. 25N(4) of the Act.

48. For all the above reasons, I have little hesitation in quashing the impugned order, which is accordingly quashed and rule nisi is made absolute. The matter will stand remitted to respondent 1 for fresh consideration and disposal on merits in the light of the observations made above, within two months from today (7 January, 1977). He should also go into the question whether the petitioner will be entitled to the benefit of the deeming provision under S. 25N(4) of the Act. However, I make no orders as to costs.

Writ Petitions Nos. 3687, 3546 and 3547 of 1976:

49. In view of my above judgment in Writ Petition No. 3686 of 1976, these writ petitions are also allowed and the matters will stand remitted to respondent 1 for fresh disposal on merits. No costs.

Writ Petitions Nos. 3686 and 3687 of 1976:

50. In these two writ petitions I passed interim orders enabling each of the workmen to be paid a sum of Rs. 300 Now that the matter has been remitted to respondent 1, ultimately if he agrees with the contention of the employer he will also pass orders concerning the mode of recovery of this amount of Rs. 300 from the respective employees.