Pratap Chandra Sen vs Commissioner Of Labour, Bihar

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

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 1 May, 1957

Coram: Jagannadhadas, J.

In this case the appeal was filed by special leave after an application to the Patna High Court under Article 226 of the Constitution had been dismissed summarily. The application had been presented against the Commissioner of Labour of Bihar, and it sought to have the Commissioner’s order set aside on the ground that he had either failed or refused to exercise a statutory jurisdiction that was vested in him and that entitled the petitioner to certain relief. The petitioner further contended that the Commissioner had acted on a plainly erroneous view of the law applicable to his case.

The petitioner, who also served as the appellant before the Supreme Court, had been employed by Tata Iron and Steel Co., Jamshedpur. On 23 September 1947 he had been appointed as a “Personnel” Officer in the company’s Personnel Department and was attached to the Steel Welding Shop (Factory) No. 2 from September 1947 until December 1950. After that period his duties were reassigned and he was attached to the Ores, Mines and Quarries Department at Jamshedpur. Effective 29 April 1953 he was transferred to the company’s mines at Garumahishani, located in the district of Mayurbhanj in Orissa State. While stationed at Garumahishani the company issued a letter dated 27 November 1954 terminating his services with effect from 1 December 1954 on the allegation of unsatisfactory work, but without conducting any formal enquiry. The petitioner appears to have received some prior indication that his discharge was being considered. Consequently, he sent an express telegram on 14 November 1954 to the Labour Commissioner of Bihar requesting immediate intervention and protection, and he followed this with a letter dated 17 November 1954, ten days before the termination date, alleging that the decision to dismiss him had already been taken by the company’s management and was arbitrary, unjust and amounted to victimisation. He argued that, throughout his employment, he had functioned as a Welfare Officer within the meaning of the Factories Act 1948 and was therefore entitled to statutory protection against arbitrary dismissal under certain rules made under that Act. The Labour Commissioner rejected his request for protection, reasoning that although the appellant had originally been employed in the Personnel Department at Jamshedpur, his subsequent transfer to an establishment in a different State meant that the jurisdiction of the Bihar State Government and of the Labour Commissioner ceased automatically. The appellant challenged this order before the Patna High Court through an application under Article 226, which, as noted, was dismissed summarily. The present appeal by special leave was filed against that summary dismissal.

In the proceedings before the Supreme Court, the General Manager of the company was not joined as a party to the petition filed under Article 226 of the Constitution in the High Court. However, for the purpose of the special leave application before this Court, the General Manager was designated as respondent number two, while the Commissioner of Labour of Bihar was designated as respondent number one. When the appeal was listed before the Court, it was heard for a considerable period. After hearing the submissions, the Court allowed the appellant to file an affidavit in order to clarify certain points that the Court considered necessary for a proper disposal of the case in view of the contentions that had been raised. The Court then directed respondent number two to be given a reasonable opportunity to respond to the affidavit. Accordingly, respondent two filed a reply, and the appellant subsequently filed a rejoinder to that reply. Both the reply and the rejoinder have now been placed on record, and the appeal was subsequently reheard.

For a thorough assessment of the issues raised by the parties, the Court found it essential to refer to several provisions of the Factories Act, 1948, as well as to the rules made under that Act. The Factories Act, cited as Central Act No. LXIII of 1948, received the assent of the President on 23 September 1948 and, under Section 1(3), became operative on 1 April 1949. The Act defines a “factory” as any premises where ten or more workers are employed and in any part of which a manufacturing process is being carried on with the aid of power, expressly excluding a mine that is governed by the Mines Act. The term “occupier” is defined as the person who has ultimate control over the affairs of the factory; when those affairs are entrusted to a managing agent, that agent is deemed to be the occupier.

Section 49 of the Act contains two sub-sections that are pertinent to the present dispute. Sub-section (1) mandates that in every factory in which five hundred or more workers are originally employed, the occupier must employ such number of Welfare Officers as may be prescribed. Sub-section (2) empowers the State Government to prescribe the duties, qualifications and conditions of service of the officers appointed under sub-section (1). Section 50 authorises the State Government to make rules that may exempt any factory from compliance with the provisions of Chapter V of the Act, provided that alternative arrangements for the welfare of the workers are prescribed. Section 112 further empowers the State Government to make rules for giving effect to the purposes of the Act.

Exercising the rule-making authority conferred by Section 112, the Governor of Bihar promulgated the Bihar Factories Welfare Officers Rules, 1952 on 5 August 1952. These Rules, hereinafter referred to as “the Rules,” were brought into force by a notification dated 14 February 1953, published in the Bihar Gazette of 25 February 1953, which fixed 1 March 1953 as the commencement date. Rule 1 of the Rules provides that they shall come into force on a date appointed by the State Government through a notification in the Official Gazette. Under Rule 2, every factory in which five hundred or more workers are ordinarily employed per day is required to appoint a Welfare Officer, and factories employing two thousand or more workers per day must also appoint an Additional Welfare Officer, who is designated as an Assistant Welfare Officer.

In the regulations it is stated that when a factory ordinarily employs five hundred or more workers each day, the occupier must appoint a Welfare Officer, and when a factory ordinarily employs two thousand or more workers each day, the occupier must also appoint an Additional Welfare Officer who will be designated as an Assistant Welfare Officer. The Welfare Officer’s duties are enumerated in Rule 3; they are extensive and varied, and they impose on the Welfare Officer, among other responsibilities, the duty of fostering harmony in employer-labour relations and the duty of improving the welfare and amenities of the workers. Rule 4 sets out the qualifications required of Welfare Officers, and those qualifications are comparatively high. The rule further provides that any Labour Welfare Officer already serving in factories registered under the Factories Act of 1948 may be eligible to apply for appointment, provided that he satisfies the prescribed qualifications. The State Government, however, retains the power to exempt, for any person who had been employed as a Welfare Officer on 1 April 1949 for at least one year in any factory, the requirement to possess all or any of the prescribed qualifications. Rule 5 deals with the conditions of service of Welfare Officers and is therefore significant. Sub-rule (1) of Rule 5 requires that Welfare Officers be recruited through advertisement. Sub-rule (2) provides that all appointments of Welfare Officers shall be on a permanent basis, but the appointed individuals will initially be placed on a probationary period of one year. Sub-rule (3) states that if a Welfare Officer’s work is found to be unsatisfactory during the probationary period, the occupier may discharge him after giving one month’s notice, provided that the Labour Commissioner approves the discharge. Sub-rule (4) further provides that no Welfare Officer shall be discharged, dismissed, or otherwise punished except with the prior approval of the Labour Commissioner of Bihar, which must be obtained through a proceeding drawn up against the officer. The rule also mandates that no punishment of any kind may be inflicted unless the officer has first been informed in writing of the grounds on which the action is proposed and has been given a reasonable opportunity to defend himself. A further provision linked to Sub-rule (4) of Rule 5 allows a Welfare Officer who is subjected to punishment under that sub-rule to lodge an appeal with the Labour Commissioner against the punishment order within thirty days of receiving the order. The permanence of tenure and the safeguards against arbitrary punishment embodied in these rules are intended to protect the Welfare Officer from victimisation by the employer, given the nature of his duties, which may sometimes incur the displeasure of the employer. The appellant contends that he qualifies as a Welfare Officer within the meaning of the Act and the aforesaid Rules, and that, therefore, he is entitled to the procedural protection provided by Rule 5 in relation to the order of his discharge. It is on the basis of this contention that the matter was brought before the Court.

The Labour Commissioner had held that because the appellant’s duties were at that moment attached to the Company’s mines located at Garumahishani in Orissa, the Bihar Rules could not be made applicable to him and consequently the Commissioner lacked any jurisdiction to grant relief. This position was vigorously challenged on behalf of the appellant, who argued that the Commissioner’s view was plainly erroneous. The appellant maintained that he had been taken on as a Welfare Officer in 1947 and had remained in that capacity continuously, even though, beginning in 1950, he was first posted to a mine at Jamshedpur and later to a mine of the Company at Garumahishani in Orissa. He asserted that the rule governing Welfare Officers conferred a permanent tenure on him, that such permanence was not disturbed by his transfer to a mine outside Bihar, and that the disciplinary control exercised over him was actually effected from Jamshedpur, which lay in Bihar. Accordingly, the appellant contended that any question concerning the legality of that disciplinary control fell squarely within the competence of the State Government of Bihar and its State Labour Commissioner. Because of this contention and because additional factual clarification was necessary to determine the factual foundation of the dispute, the Court allowed the appellant to lodge a fresh affidavit and also gave the second respondent an opportunity to file a responding affidavit.

On the basis of the material presently before the Court, the facts can be summarised as follows. It is acknowledged, and was previously stated, that the appellant was initially recruited as a Personnel Officer in the Steel Melting Shop (Factory No. 2) of the Tata Iron and Steel Company at Jamshedpur, and he served in that role until 1950. In that year his assignment was transferred to certain Company mines at Jamshedpur, and from 1953 onward the assignment was again shifted to Garumahishani in Orissa. The appellant claims that his original appointment as Personnel Officer was, in substance, an appointment as a Welfare Officer from the beginning, and that he continued to function as a Welfare Officer despite the subsequent transfers to mining posts after 1950. The second respondent counters this claim by stating that while Welfare Officers belong to the Personnel Department and therefore every Welfare Officer is also a Personnel Officer, the converse does not hold; not all Personnel Officers are Welfare Officers. The respondent therefore asserts that the appellant was merely a Personnel Officer and never a Welfare Officer. However, irrespective of this general classification, the appellant submitted that there exists substantial documentary evidence, specifically correspondence between the Company and the Labour Commissioner concerning his status, which was placed before the Court. That correspondence suggests that the appellant was consistently regarded as a Welfare Officer, presumably because he performed the duties of a Welfare Officer or remained within that cadre. The Court, after reviewing the material, indicated that it was not required to adjudicate on the correctness of this characterization. The documents referred to by the Court include, inter alia, a circular letter from the Bihar Labour Commissioner dated 19 September 1952 and a reply from the Company’s General Manager dated 2 December 1952.

The Court examined a circular letter issued by the Labour Commissioner of Bihar, Patna, on 19 September 1952 and the accompanying reply from the General Manager of the Company dated 2 December 1952. It noted that, although the Bihar Factories Welfare Officers Rules of 1952 had been promulgated by those dates, they had not yet entered into operation; the Rules only became effective on 1 March 1953. In the General Manager’s December 2 1952 letter, the Company disclosed that it had applied to the Government of Bihar for an exemption from the provisions of Section 49 of the Factories Act, and the Court observed that this exemption request remained pending until October 1953.

The Court then identified two material facts that worked against the appellant’s claim. First, the Court found that after the Factories Act and its Rules became effective, the Company never issued a specific order appointing the appellant as a Welfare Officer under those statutory provisions. The mere fact that the Labour Commissioner had exempted the appellant from the required qualifications, as noted by the Court, did not by itself demonstrate that the Company had taken advantage of that exemption to appoint or recognise him as a Welfare Officer. Second, even assuming, for the sake of argument, that the appellant’s original appointment as a Personnel Officer in 1947 amounted to an appointment as a Welfare Officer under the law then applicable, the Court observed that no service conditions were attached to that appointment at the relevant time. Consequently, there was no basis for claiming permanency of tenure or protection against arbitrary dismissal, a point that the appellant openly admitted before the Court.

The Court further emphasized that, by the time the Rules came into force, the appellant was no longer assigned to a factory but was instead attached to a mine. In this context, the Court found it difficult to accept the appellant’s counsel’s contention that an appointment as a Personnel Officer in 1947 automatically continued as a Welfare Officer appointment under the Act and the Rules, thereby conferring protection against arbitrary discharge. Accordingly, the Court declined to interfere with the order of the Labour Commissioner. Moreover, the Court held that it was unnecessary to decide whether the Labour Commissioner was correct in assuming that, because the Rules were Bihar Rules, he lacked jurisdiction to grant relief for the alleged arbitrary disciplinary action taken by an employer operating in Jamshedpur, Bihar, against a person working in Orissa. Accordingly, the appeal was dismissed.

Regarding the allocation of costs in this matter, the Court observed that with respect to the Government, which is the first respondent, the Court had not yet adjudicated the legal issue that had been raised in connection with the Labour Commissioner’s Order. The Government’s interest was confined solely to that point of law. Concerning the second respondent, the Chamber Judge had previously permitted him to remain a party to the proceedings on the condition that any costs he might incur would be borne at his own risk. At the most recent hearing before this Court, the question of costs arising after the earlier hearing was brought to the Court’s attention, and the Court issued an order stating that, notwithstanding the Chamber Judge’s earlier order, the matter of costs would now be examined by this Court. The Court has now given its consideration to that question. After reviewing all the circumstances of the case, the Court concluded that it would be inappropriate to require the appellant to pay the costs of either the first respondent or the second respondent. Accordingly, the Court directed that each party shall bear its own costs.