1. Even when the permanent set-up of a Municipality is fixed by the rules framed by it which are duly approved by the State Government in accordance with law, can the Labour Court or Industrial Tribunal give direction to treat certain number of workmen, in addition to the number fixed by the rules, as permanent workmen and grant them all the benefits available to permanent workmen? If such direction is given by Labour Court or Industrial Tribunal, would it be binding to State Government? These are some of the questions which have arisen for determination in this petition.

2. Petitioner No. 1 is a Municipality constituted under the provisions of the Gujarat Municipalities Act, 1963 (hereinafter referred to as 'the Municipal Act') and petitioner No. 2 is a School Board constituted under the provisions of the Bombay Primary Education Act, 1947. The petitioners challenge the award dated March 29, 1988 passed by the Industrial Tribunal, Ahmedabad whereby the petitioner-Municipality has been directed to treat respondent Nos. 1 to 13-Water-women as permanent employees of the Municipality from the date of their entry in service. The Tribunal has also declared that they were entitled to claim the pay-scale of Class IV employees from April 1, 1983. As regards the difference in wages for the period commencing from April 1, 1983 to December 31, 1984, the Tribunal directed thatthe said difference will not be payable to the workmen by the Municipality, while the difference in wages and other benefits from January 1, 1985 has been ordered to be paid to all the workmen within a period of three months from the date of the award. The Tribunal further directed that the workmen would be entitled to minimum wages from April 1, 1987 and their pay shall be fixed on that basis and they shall be given the benefits of annual increments and other benefits including that of uniform which were available to other Class IV employees of the Municipality. The Tribunal directed that the said benefits will be given with effect from January 1, 1985 and further clarified that they were entitled to claim all the benefits available to Class IV employees of the Municipality, such as uniform, casual leave, washing allowance, etc. It was further directed that the Municipality will be required to make payment of the aforesaid benefits to the workmen concerned calculating the same from January 1, 1985. The break in service, if any, was not to be treated as break and they were ordered to be treated as continuous in service. The Municipality as well as the School Board have challenged the legality and validity of this award in this petition under Article 227 of the Constitution of India.

3. Respondent Nos. 1 to 13 were working as water-women and they raised industrial dispute claiming that they were entitled to be treated as permanent and they should be paid wages in pay-scales and other benefits like permanent employees. They also claimed deemed date with retrospective effect on the post of water-peon and claimed difference in wages and other monetary benefits. The workmen demanded that the artificial break given in their service should be ignored and they should be considered continuous in service: the practice of giving break should be stopped and it should be declared that the workmen were entitled to claim wages even for the period of break in service. The workmen also demanded three pairs of uniform every year and claimed that they were entitled to be treated as peon and were also entitled to claim all the benefits available to Class IV employees, such as casual leave, public holidays, medical allowance, house rent allowance, fixation of seniority, benefits of gratuity etc

4. The appropriate Government referred the dispute to the Tribunal by order dated November 7, 1985. On behalf of the workmen they filed their statement of claim. It was inter alia submitted that initially they were paid daily wage of Rs. 5/- (Rupees five) per day, while from April, 1983 they have been paid Rs. 12.67 per day; that in fact they were performing the duties of peon and therefore they were entitled to claim time-scale of pay of the post of peon; that since they were performing the duties of Class IV employees they should be given all the benefits available to such Class IV employees and they claimed such benefits with retrospective effect from April 1,1983. They also pleaded that the School Board had passed resolution dated April 4, 1983 supporting their claim.

5. The Municipality resisted the claim put forth by the workmen on facts as well as on law points. It was mainly contended on behalf of the Municipality that the points held by the workmen did not form part of the permanent set-up of the Municipality and for the wages paid to such employees the Government grant was not available and, therefore, the Municipality had to bear the entire burden of payment of such wages. Therefore it was contended that the workmen should not be granted any relief as prayed for.

6. The Tribunal, after recording evidence and after hearing the parties, came to the conclusion that the Municipality was taking service from the workmen not only as water-women but they performed other duties of peon also. These workmen were required to open the school and close the school building. They fetched water and served water to the students and others. They were required to bring posts and distribute the same. They also used to clean the school building. On overall consideration of the facts and circumstances, the Tribunal held that the workmen were performing the duties of peon. The Tribunal negatived the contention of the Municipality that since the posts were not included in the permanent set-up of the Municipality the workmen were not entitled to claim the benefits of regular pay-scale and other benefits of the post of peon. The Tribunal also held that if the Municipality wished to run the primary school it must also discharge its obligation to pay wages at the rates payable to Class IV employees, whether the State Government pays matching grant to the Municipality or not, and it must make proper arrangement for giving benefits to the concerned workmen even by raising revenue or resorting to other economy measures in other spheres of administration.

7. On behalf of the petitioners it is contended that the award passed by the Tribunal is binding to the State Government because it is held by the Tribunal that the work performed by the concerned workmen was of a permanent nature and that the services rendered by them were necessary for running the primary schools. The contention cannot be accepted. The State Government was not a party to the reference before the Industrial Tribunal. The dispute referred to the Industrial Tribunal was between the petitioners, i.e. Kalol Municipality and Kalol Municipal School Board on the one hand and the respondents Nos. 1 to 13-workmen on the other. No question was raised before the Tribunal as to whether the directions that were given by the Tribunal while passing the award would be binding to the State Government or not. Therefore the Tribunal has rightly not considered this question. There is nothing in the award to show that the award is binding to the State Government.

8. It is submitted that in this petition the Director of Municipalities and the State Government have been joined as party-respondents. Therefore this Court should clarify and direct that the award is binding to the State Government. It is difficult to accede to this request made by the learned Counsel for the petitioners. The petition is under Article 227 of the Constitution of India. It would not be possible for this Court to go beyond the scope of the reference. However, even if one were to consider this petition as one under Article 226 of the Constitution of India, then also, having regard to the provisions of the Industrial Disputes Act, 1947 it is difficult to accede to the request made by the learned Counsel for the petitioners.

9. The Industrial Disputes Act, 1947 (hereinafter referred to as 'the I.D. Act') has been enacted with the object to provide the machinery and procedure for the investigation and settlement of industrial disputes. The term 'award' means [Section 2(b)] an interim or a final determination of any Industrial Dispute or any question relating thereto by any Labour Court, Industrial Tribunal or National Industrial Tribunal and includes an arbitration award made under Section 10-A of the I.D. Act. After raising the disputes and after failure to resolve the same through conciliation, if the appropriate Government is approached it may make reference of the disputes to the appropriate forum under Section 10 of the I.D. Act The forum to which the dispute might have been referred is required to conduct the proceedings before it and pass award as provided under Section 17 of the I.D. Act. Once it is published it becomes final subject to the provisions of section 17a of the i.d. act, and it cannot be called in question in any Court in any manner whatsoever. Unless by declaration made under section 17a of the i.d. act the appropriate Government states otherwise it becomes enforceable on the expiry of the period of 30 days from the date of publication of the award. Such award is binding to all the parties to the industrial dispute (See Section 18(3)(a) of the I.D. Act.). It may be binding to all other parties who might have been summoned to appear in the proceedings as party to the dispute. It may be binding to the successor of employer and the workmen who might have been employed subsequent to the date of reference. Thus it is evident from the scheme of the I.D. Act that the award is binding only to the parties to the award or to all the parties summoned to appear in the proceedings as party to the dispute and it is also binding to the successors or assigns in respect of the establishment to which the dispute relates. Learned Counsel for the petitioners has not been able to point out any statutory provision which casts obligation upon the State Government to carry out the direction given in the award to which it is not a party or in respect of which it does not become successor- establishment. Therefore the contention that this Court in exercise of powers under Article 227 of the Constitution of India should hold that the award is binding upon the State Government has no merits and the same cannot be accepted.

10. It is argued that in view of the provisions of Section 144 of the Municipal Act the Government should be considered as bound by the award. Section 144 of the Municipal Act enables the State Government to make provision for grant to the Municipality. The State Government, after considering the recommendations of the Gujarat Municipal Finance Board, may determine whether for augmenting the finances of a Municipality for any of the purposes of the Act it is necessary to make any grant to the Municipality. If the State Government so determines it may also determine the amount of grant. The amount of grant so determined is to be paid to the Municipality every year but it may be refused after a period of every five years having regard to the recommendations of the Gujarat Municipal Board in respect of the revision of grants to Municipalities. Sub-section (3) of Section 144 of the Municipal Act provides that every grant payable under the said Section shall be made after due appropriation made by the State Legislature by law in this behalf. Thus it is evident that after recommendation of the Gujarat Municipal Finance Board and after due appropriation made by the State Legislature by law in this behalf, the State Government may be in a position to make the payment of grant to 'a Municipality for any purpose of the Act'. Therefore unless it is shown that the State Government has, after considering the recommendations of the Gujarat Municipal Finance Board and the State Legislature has passes appropriate law in that behalf, and thereafter the State Government has determined the amount of grant payable to the Municipality, the petitioner Municipality cannot contend that the State Government is bound to make the payment of grant for the wages and other benefits directed to be paid to the respondent workmen. Again it need to be reiterated that Section 144 of the Municipal Act only enables the Government to make payment of grant to a Municipality for any purpose of the Act. It casts no obligation on the Government to make payment of grant whenever an award is passed by which additional financial burden is required to be borne by the Municipality.

11. It is submitted that the Tribunal has found that the work performed by the respondent workmen is of permanent nature and that it was necessary for running the primary schools. Therefore it is contended that it should be held that it is the obligation of the State Government to reimburse the municipality to the extent of the additional amount of expenditure which it may have to incur for compliance of the direction given in the award. This argument also cannot be accepted. While adjudicating the industrial dispute the Tribunal has arrived at the finding that the respondent workmen were performing the duties of permanent nature and that same work was necessary for running the primary schools. This finding arrived at by the Tribunal may enable the Municipality to suitably amend the rules framed by it under the provisions of Section 271(d) of the Municipal Act which inter alia provides that the Municipality shall make rules not inconsistent with the Act and the Rules or orders made by the State Government under the Act, and may from time to time alter or rescind them determining the staff or officers and servants to be employed by the Municipality and their powers and duties. If the Municipality has already framed rules by which the number of posts of peons is determined and in the set-up of the Municipality there is no post on which the respondent workmen can be appointed as permanent workmen, then it will be obligatory for the Municipality to make suitable amendment in the relevant rules. Once the rules are amended and the State Government approves the same it may be possible for the Municipality to make demand before the State Government that even the sanctioned permanent strength of the set-up of the Municipality included 13 respondent workmen and therefore in respect of the wages and other benefits payable to them the Municipality would be entitled to claim matching grant. But simply because the Industrial Tribunal has come to the conclusion that the nature of the work performed by the respondent workmen was permanent and that it was necessary for running the primary school, it cannot be said that the State Government is bound by the direction given in the award and that it is under obligation to make payment of the amount of matching grant.

12. It is contended that the Tribunal ought not to have given direction, implementation of which would require sanction of another authority, namely, the State Government of Gujarat. The argument is based on assumption that the direction given by the Tribunal cannot be implemented without the sanction of the State Government. There is no provision in the Municipal Act to which our attention is drawn by the learned Counsel for the petitioners that the award passed by the Labour Court or Industrial Tribunal cannot be implemented by the Municipality without the sanction of the State Government. However it is contended that if the Municipality wished to change its permanent set-up it would be required to amend the rules framed under Section 271(d) of the Municipal Act. Proviso (a) to Section 271 of the Municipal Act inter alia provides that no rule or alteration or rescission of a rule made under this Section shall have effect unless and until it has been approved by the State Government. Therefore it is contended that unless the rules are altered and the same is approved by the State Government, the Municipality cannot treat the respondent workmen as permanent employees.

13. As indicated hereinabove, the direction that may be given by the Labour Court or the Tribunal while deciding an industrial dispute may enable the Municipality to amend the rules framed by it under Section 271 of the Municipal Act. But if there is no provision in the rules or the permanent set-up fixed by the Municipality is already determined and the same is limited, it cannot be set up as a defence by the Municipal ity that the Labour Court or the Industrial Tribunal cannot give direction which is not in conformity with the rules framed by it. The rules framed by the Municipality are unilaterally framed without involving the workmen employed by it. Even the procedure for framing the rules laid down under the Act, nowhere provides that the employees or representatives of the employees engaged by the Municipality shall be consulted at any stage before the rules are framed and got approved by the State Government. Thus unilateral determination of the number of staff by the Municipality cannot bind the workmen engaged by it. Such unilateral decision about the number of staff cannot truncate the powers of the Labour Court or that of the Industrial Tribunal to adjudicate the dispute referred to it in accordance with the provisions of the Act. In fact in many cases the root of the dispute would be the faulty determination of the number of permanent staff of the Municipality. If the argument is accepted it would amount to saying that unless the Municipality alters or amends its rules and increases the number of permanent staff and gets the approval of the State Government, no workmen can be ordered to be made permanent or can be ordered to be given permanency benefits by the Labour Court or the Industrial Tribunal as the case may be. If the argument is accepted it would lead to unreasonable and absurd consequences. It would amount to saying that no dispute could be raised by workmen engaged by a Municipality in respect of which there is no provision in the rules framed by the Municipality. Moreover, even if such dispute is raised the Labour Court or Industrial Tribunal will have no power to give any direction to a Municipality which is not in conformity with the provisions of the rules framed by the Municipality. In short it would amount to saying that the unilateral decisions that may be taken by the Municipality while framing its rules would determine the scope of powers of the Labour Courts or Industrial Tribunals.

Obviously such intention could never be imputed to the legislature when it enacted the provisions of Section 271 of the Municipal Act and the relevant provisions of the I.D. Act.

14. The question may be examined from another angle. The direction of the Tribunal is not to amend the rules framed by the Municipality under Section 271(d) of the Act. For implementing the direction given in the award if the Municipality so chose it may amend the rules. But even without amend ing the rules it can and it should implement the direction given in the award. On account of the fact that the relevant rules are not amended, the Municipality may not be in a position to claim matching grant from the State Government. But this is altogether a different matter. Because the Municipality cannot receive the amount of matching grant from the State Government it cannot be said that the Tribunal has no jurisdiction to give direction that the workmen concerned be treated as permanent employees and be given all the benefits payable to Class IV employees. As observed earlier, such dispute may have its roots in the determination of the number of permanent staff in lopsided manner. For whatever reason the Municipality might have fixed the minimum number of Class IV employees to be employed by it in its permanent set-up which may be 50 per cent of the required strength. On the other hand it may go on engaging Class IV employees as badli workers or casual workers on temporary basis and continue them as such for years together. In the instant case, as observed by the Industrial Tribunal, the respondent workmen were engaged as daily wage earners and were deprived ofthe minimum wages and other benefits payable to Class IV employees for number of years. They were continuously in service at least from April 1983, if not from earlier date. Since it is within the powers of the Municipality to amend, alter or rescind the rules, the Municipality may not initiate the process of amendment of the rules. On the other hand it may perpetuate the exploitation of the workmen. This would amount to giving licence to different Municipalities to perpetuate unfair labour practice because it does not chose to alter or amend its rules. As provided in Item 10 of the Fifth Schedule to the I.D. Act, to employ workmen as badli, casual or temporary and to continue them as such for years with the object of depriving them of the status and privileges of permanent workmen is unfair labour practice. It may also be noted that not to implement the award is also unfair labour practice as provided in Item 13 of the Fifth Schedule to the I.D. Act. If the provisions in the Municipal Rules are to determine the question as to whether the award is to be implemented or not, and as to whether the Labour Court or Industrial Tribunal would have power to give direction which may not be in consonance with the provisions of the Rules framed by the Municipality, it would amount to saying that the exercise of jurisdiction by the Labour Court or Industrial Tribunal is subject to the provisions made in the Rules that may be framed by the Municipality. Thus, indirectly the Labour Court and the Tribunal would be under the control of the different Municipalities which would always be a party in the reference before the Labour Court or Industrial Tribunal. Moreover, it would amount to granting licence to Municipalities to commit unfair labour practice as indicated hereinabove. It is obvious that acceptance of the argument would lead to absurd results and therefore such argument can never be accepted.

15. Here reference may be made to an un-reported decision of Division Bench (Coram: J.B. Mehta, J. & T.U. Mehta, J. as he then was) of this Court in the case of Savarkundla Municipality in Special Civil Application No. 351 of 1976 decided on April 26, 1976. In that case dispute was raised on behalf of 46 daily rated safai kamdars claiming similar benefits as given to other permanent workmen. The Tribunal found that all the 46 workmen had completed more than 240 days of service, but gave direction the the Municipality to confer benefit of permanency to 30 daily-rated workmen, and also directed the Municipality to revise its set-up of 105 workmen by increasing its strength to 135. This part of the award was challenged before this High Court inter alia contending that the Tribunal had no jurisdiction to pass such award in view of the provisions of Section 271 of the Municipal Act Negativing the contention the Division Bench observed as follows:

"These provisions of the municipal act operate in a totally different field when the Municipality as an employer unilaterally wants to lay down the service conditions of its employees. Those provisions would have no operation where the industrial adjudication arises under a reference made by the Government under the Industrial Disputes Act, 1947 where on such an industrial dispute the Tribunal has jurisdiction to revise the old service conditions, statutory or otherwise, and to make new service contracts for the benefit of the employees in so far as it is just and proper for the industry and it must resolve such an industrial dispute. Therefore, the industrial adjudication always operates in this special field and accordingly, when such service conditions are altered by a legal industrial settlement or award, in those cases the provisions of the municipal act which provide for a voluntary fixation or alteration of the service conditions at the instance of the empioyer would not be applicable."

The Division Bench further observed that on publication of the award in Government Gazette it becomes final and binding to the parties as provided under section 17a of the i.d. act. The Division Bench also observed that the employer could not contend that it has its difficulties under the Municipal law, because the Municipal law would apply when the Municipality on its own without any industrial settlement or adjudication by the Tribunal unilaterally wants to change its service conditions by framing proper rules under that law.

16. In the case of Natvarlal V. Patel v. Municipality of Vadodara, reported in (1965-I-LLJ-608) the question arose as to whether the settlement arrived at between the workmen and the Municipality in conciliation proceedings would be binding upon the Municipality or not. It was contended that unless the settlement was approved by the Commissioner as provided under Section 46(a) of the Bombay District Municipal Act, 1901 it would not be binding to the Municipality, inasmuch as the settlement altered the existing rules [Section 46(a) of the Bombay District Municipal Act, 1901 was analogous to Section 271 of the Municipal Act]. Negativing the contention the Division Bench observed that the Municipal Act does not deal with the sphere of industrial dispute which is occupied by the I.D. Act. Initially when the first contract of employment was made or the initial rules were made, the matter would be governed by the Municipal Act. After the workmen raised industrial dispute for changing their existing conditions of employment, the matter would be entirely governed by the I.D. Act which provides for settlement of industrial disputes by changing, modifying or altering the existing conditions of service, whether under a contract or under a rule. Once the dispute is raised the matter would be governed by the Industrial law. Thereafter the Division Bench has observed as follows: (at p. 610):

"The two fields are thus totally distinct and the two Acts operate in different fields. The Labour Court was, therefore, obviously in error in coming to the conclusion that when an industrial settlement was arrived at, what was sought to be done was an alteration of the Municipal Rules. Whether the settlement was arrived at as required by law will have to be examined only from the provisions of the Act and not by recourse to Section 46 of the Municipal Act which deals with alteration of Municipal Rules and which does not deal with any industrial dispute."

17. Reference may be made to a decision of the Supreme Court in the case of Baroda Borough Municipality v. Its Workmen reported in (1957-I-LLJ-8). [At the relevant time the Baroda Municipality was being governed by the provisions of the Bombay Municipal Boroughs Act, 1925]. The dispute arose as to whether the workmen employed in the power house section in the Municipality could claim bonus or not. It was contended that Section 58 of the Bombay Municipal Boroughs Act, 1925 dealt with the rule-making power of the Municipality and proviso (a) to the Section laid down that no rule or alteration or rescission of a rule made shall have effect unless and until it has been approved by the State Government. It was contended that there was no existing rule with regard to payment of bonus to Municipal employees and therefore direction could not be given by the Labour Court or the Tribunal for payment of bonus. Repelling the contention the Supreme Court in the judgment held as follows (at. p 15):

"We cannot accept this argument as correct. The demand for bonus as an industrial claim is not dealt with by the Municipal Act; it is dealt with by the Industrial Disputes Act, 1947. Therefore, it is not a relevant consideration whether there are provisions in the municipal act with regard to payment of bonus. The provisions of the municipal act are relevant only for the purposes of determining the quality or nature of the Municipal property or fund; those provisions cannot be stretched beyond that limited purpose for defeating a claim of bonus."

18. Thus the view which we are taking is in conformity with the settled legal position as per the decisions of this Court in the case of Savarkundla Municipality (supra) and in the case of Natvarlal V. Patel (supra) and also the decision of the Supreme Court in the case of Buroda Borough Municipality (supra). No other contention is raised. There is no substance in the petition. Hence the petition is liable to be rejected.

19. In the result the petition fails and the same is rejected. Rule discharged with no order as to costs. Interim relief granted earlier by which the Municipality was permitted not to make payment of difference in wages upto the date of the award and which was extended from time to time is hereby vacated. The petitioner-Municipality is directed to make computation of the amount payable to the respondent-workmen and make the payment thereof to the concerned workmen as expeditiously as possible and latest before April 15, 1993. In case the amount is not paid latest by April 15, 1993, it may be treated as wilful disobedience of the orders of the Court and it may be treated as contempt of the Court. We hope and trust that the Municipality will implement the directions given by the Tribunal both in its letter and spirit Subject to the aforesaid observations and directions, the petition is rejected.