Parry and Co. Ltd vs Commercial Employees' Association, Madras

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 154 of 1951

Decision Date: 10/04/1952

Coram: B.K. Mukherjea, Saiyid Fazal Ali, Saiyid Das, Sudhi Ranjan

Parry and Co. Ltd filed a petition against the Commercial Employees’ Association, Madras, and the matter was decided by the Supreme Court of India on the tenth day of April, 1952. The judgment was authored by Justice B. K. Mukherjea, who also sat on the bench together with Justice Saiyid Fazal Ali. The record identifies the petitioner as Parry and Co. Ltd and the respondent as the Commercial Employees’ Association of Madras. The citation of the decision appears in the All India Reporter at page 179 of the 1952 volume and in the Supreme Court Reporter at page 519 of the same year. Subsequent citations record the case as appearing in the 1955 Supreme Court Reports at page 233, the 1958 Reports at page 398, and the 1965 Reports at page 111, referring respectively to the twenty-first, nineteenth and the fourteenth and fifteenth paragraphs of those reports. The operative statutory provision discussed is section 51 of the Madras Shops and Establishments Act, 1947, which concerns the power of the Labour Commissioner to decide matters referred to him, and the principle that a writ of certiorari cannot be issued where the only ground is alleged error in the Commissioner’s exercise of jurisdiction. The headnote of the judgment states that the High Court is without power to grant a writ of certiorari to overturn a decision that was made within the jurisdiction of the Labour Commissioner under the said Act, because the Commissioner’s decision is final and not subject to challenge in a court of law.

The matter before the Supreme Court arose from Civil Appeal No. 154 of 1951, which challenged a judgment and order dated the first of April, 1949, issued by the Madras High Court. The High Court decision, rendered by Chief Justice Rajamannar and Justice Balakrishna Aiyar, had been given in the context of Civil Miscellaneous Petition No. 1317 of 1949 and concerned an order dated the twenty-ninth of January, 1949, issued by the Commissioner of Labour, Madras. Counsel for the appellant, appearing as S. N. Mukherjee, represented the petitioner, while the respondent was unrepresented. The Supreme Court, through Justice Mukherjea, noted that the appeal contested a certiorari order issued by a division bench of the Madras High Court, which had directed the issuance of a writ to set aside a portion of an order made by the Labour Commissioner in an enquiry conducted under section 51 of the Madras Shops and Establishments Act. To understand the point of law, the Court first referred to relevant provisions of the 1947 Act, whose purpose, as expressed in its preamble, was to regulate conditions of work in shops and other establishments. Section 14(1) of the Act imposes a statutory limit on working hours, providing that, subject to other provisions, no employee shall be required or permitted to work more than eight hours in any day and forty-eight hours in any week. The Court also explained that the Act contains a proviso allowing employment beyond these limits provided overtime wages are paid, and that overtime work may not exceed ten hours in a day or a total of fifty-four hours in a week. Section 31 of the Act obliges the employer to pay wages at twice the ordinary rate for any overtime performed. Further, section 50 preserves any existing rights or privileges of employees that are more favourable than those created by the Act, ensuring that such rights continue to apply if they were in force on the date the Act commenced. The Court’s discussion set the stage for its determination that the Labour Commissioner’s decision, made under section 51, was the sole competent authority to resolve the issues presented, and that such a decision was final and not subject to judicial review by way of a writ of certiorari.

In the provisions of the Madras Shops and Establishments Act the proviso attached to section 14(1) permits a person to be employed for a period that exceeds the statutory limit of eight hours per day and forty-eight hours per week, provided that any overtime work does not cause the total daily working time to exceed ten hours and the total weekly working time to exceed fifty-four hours, and that the employee receives overtime wages. Section 31 declares that any employee who is required to work overtime shall be entitled to wages at twice the ordinary rate of wages for such overtime work. Section 50 safeguards any existing rights or privileges that an employee enjoys under any other law, contract, custom or usage at the date the Act came into operation, if those rights are more favorable than those created by the Act. The text of section 50 states that nothing in the Act shall affect any such rights or privileges that are more favorable to the employee than those provided under the Act. The remaining relevant provision is section 51, which provides that when a question arises whether any part of the Act applies to an establishment or to a person employed therein, or whether section 50 applies to a particular case, the question shall be decided by the Commissioner of Labour, whose decision shall be final and not subject to judicial review. The appellant in this matter is a limited company carrying on business in Madras, while the respondent is an association of clerical employees, including those who are employed by the appellant. On 10 November 1948 the respondent filed an application before the Labour Commissioner of Madras under section 51 of the Act, seeking a decision on certain questions raised in the petition concerning the rights and privileges of the appellant’s employees. The Commissioner issued a notice requiring the appellant to appear and answer the contentions raised on behalf of the employees. The parties appeared before the Commissioner on 26 November 1948 and again on 16 December 1948, each time being represented by counsel. After hearing the parties and considering the evidence they presented, the Labour Commissioner rendered his decision on 29 January 1949. In his decision the Commissioner classified the questions raised by the employees into six separate issues. Two of those issues are material for the present appeal. Issue No. 5 was framed as follows: “Whether there has been an increase in working hours from 6 to 6 ½ on weekdays from 12 October 1948, and whether the increase is permissible?” Issue No. 6 was framed as follows: “Whether overtime wages at twice the ordinary rates should not be paid for work done by the employees after the normal working hours?” These two issues formed the basis of the further discussion and consideration by the Court.

The Labour Commissioner recorded that, before the Statutes came into operation on the first of April 1948, the company’s ordinary business hours had been six and a half hours per day, and that those hours continued to be in force at the time of his decision. He acknowledged that a circular had been issued to become effective from the twelfth of October 1948 which reduced the lunch break by half an hour; the same circular also stipulated that the office would close to the public at five o’clock in the evening rather than at five-thirty, thereby fixing the public-facing business hours on every working day. Turning to the second question, the Commissioner observed that it is a common practice in many establishments to prescribe particular hours during which business is conducted with the external public, but he stressed that such specified periods do not necessarily coincide with the actual hours during which employees are engaged in work. He pointed out that workers in the present case performed duties beyond the designated public-facing hours, yet they received no additional remuneration for that extra work, and that the total daily working time never exceeded the statutory maximum of eight hours. The Commissioner further explained that, had the normal working hours been formally fixed and strictly observed, the employees might have acquired a right to work only within those fixed hours and could have invoked the protection afforded by section fifty of the Act against any extension of hours without a corresponding increase in pay. He added that, in circumstances where work exceeds the normal hours but remains below the statutory limit, it would be sufficient to pay compensatory wages at the ordinary rate calculated in accordance with rule ten of the Madras Shops and Establishments Rules. However, for work that goes beyond eight hours in a day or forty-eight hours in a week, the Commissioner noted that the law requires payment at twice the ordinary rate, as mandated by the proviso to section fourteen (1) and by section thirty-one of the Act. Concluding his analysis, the Commissioner declared that the employees of Messrs Parry and Company fell within the first category and therefore would be entitled to overtime wages only to the extent that the statutory hours were exceeded. This order was issued on the twenty-ninth of January 1949. Shortly thereafter, on the sixteenth of February, the employees’ association filed a petition before the Madras High Court seeking a writ of certiorari to set aside the Commissioner’s decision. The petition was heard by a bench of two judges, and in a judgment dated the first of April 1949 the judges allowed the petition in part, overturning the portion of the Commissioner’s order that held the employees would receive overtime wages only when the statutory hours were exceeded. The propriety of that High Court decision is the matter now under consideration on appeal.

In this appeal the respondent did not appear before the Court, so the hearing was conducted ex parte. Counsel for the appellant, Mr. Isaacs, provided all assistance that could be offered and presented the complete factual background together with the relevant statutory provisions. After giving the matter thorough consideration, the Court concluded that the order of the High Court could not be upheld and that the appeal should be allowed. The High Court’s decision appeared to rest on the view that the Labour Commissioner had failed to answer the association’s question about whether the company could require its employees to work more than six and a half hours a day. The learned Judge of the High Court held that the Commissioner was not correct in ruling that even if the working day was fixed at six and a half hours, overtime wages would be payable only when the statutory hours were exceeded.

The Court noted that the Labour Commissioner had already decided that, where normal hours of work were previously fixed and strictly observed, the employees could invoke the protection of Section 50 of the Act against the imposition of longer hours without a corresponding increase in their remuneration. The Commissioner further explained that any increase in such cases should be made on the scale of compensatory wages provided for under rule 10 of the Madras Shops and Establishments Rules. Moreover, if the increase exceeded the statutory period, the employees would be entitled to wages at double the rate under Section 31 of the Act. Whether that decision was correct or not, the Court observed, it could not be said that the Commissioner acted without jurisdiction or beyond his powers. Section 51 of the Madras Shops and Establishments Act expressly designates the Labour Commissioner as the sole competent authority to determine the questions referred to him, and it provides that the Commissioner’s decision is final and not subject to challenge in any court of law.

The Court observed that it was the respondent who had approached the Labour Commissioner in the present case and had invited his decision on the questions raised in the petition. The Commissioner was therefore obligated to decide those questions, which he did. Even if the Commissioner’s conclusion was erroneous, it concerned a matter that lay entirely within his jurisdiction and did not touch upon any collateral issue that might affect his authority. The Court found no apparent error on the face of the proceedings nor any procedural irregularity by the Commissioner that would contravene the principles of natural justice. Consequently, there was no basis for a higher court to issue a writ of certiorari to set aside an order of an inferior tribunal that had exercised its judicial or quasi-judicial functions within its jurisdiction.

The Court observed that the record did not reveal any breach of the principles of natural justice, and therefore no basis existed for a higher court to issue a writ of certiorari to set aside an order or proceeding of a subordinate tribunal that possessed judicial or quasi-judicial authority. It noted that the High Court had, in effect, acted as an appellate body by attempting to correct what it perceived as an error in the Labour Commissioner’s decision, a function the Court held the High Court was not empowered to perform. The Court explained that a different result would have arisen only if the Labour Commissioner had failed to decide a question that he was legally required to address; in such circumstances a writ of mandamus could legitimately be issued to compel the authority to render a decision on the pending issue. However, the Court stressed that certiorari could not be employed merely to annul a decision that was rendered within the jurisdiction of the inferior tribunal on the ground that the decision was erroneous. Consequently, the Court described the High Court’s judgment as manifestly untenable.

In the view adopted by the Court, it was unnecessary to decide whether the remedy of certiorari had been eliminated under the Constitution, because Section 51 of the Madras Shops and Establishments Act expressly declared the Labour Commissioner’s decision to be final and not subject to challenge in any court of law. The Court recorded that, although statutory provisions barred ordinary attacks on the Commissioner’s order, a superior court retained a limited power to issue a writ only when there was a clear defect of jurisdiction in the tribunal that rendered the order or when the order was obtained by manifest fraud, as conceded by counsel. Accordingly, the Court held that the appeal succeeded, set aside the High Court’s judgment, and affirmed the Labour Commissioner’s order. As the respondent was not present, the Court deemed it inappropriate to award costs in the circumstances of the case. Agent for the appellant was identified as P. K. Mukherjee. (1) Vide Board of Education v. Rice and others, [1911] A.C. 179. (2) Vide Colonial Bank of Australasia v. Robert Willan, 5 P.C. A.P. appeals 417.