Guest, Keen, Williams Private Ltd vs P. J. Sterling And Others

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

Court: supreme-court

Case Number: Civil Appeal No. 403 of 1957

Decision Date: 15 May 1959

Coram: P.B. Gajendragadkar, Bhuvneshwar P. Sinha, K.N. Wanchoo

In this matter, the Supreme Court of India delivered its judgment on the fifteenth day of May, 1959. The case was titled Guest, Keen, Williams Private Limited versus P. J. Sterling and others. The judgment was authored by Justice P. B. Gajendragadkar, who sat on the bench together with Justices Bhuvneshwar P. Sinha and K. N. Wanchoo. The official citation of the decision is reported as 1959 AIR 1279 and 1960 SCR (1) 348. The dispute arose under the Industrial Dispute framework, specifically concerning the fixation of the age of superannuation of employees, the applicability of a standing order to existing workers, the principle of acquiescence and estoppel, and the relevant statutory provisions of the Industrial Disputes (Appellate Tribunal) Act, 1950, section 7(1)(a), and the Industrial Employment (Standing Orders) Act, 1946, section 7.

The appellant company had issued a standing order, framed pursuant to the Industrial Employment (Standing Orders) Act, 1946, that mandated compulsory retirement of its workmen at the age of fifty-five. The respondents, who were the affected workmen, did not file an appeal against this standing order. Consequently, the appellant retired forty-seven workmen under the stated age limit. The workmen challenged the validity of this forced retirement, raising three specific questions for adjudication before the Labour Appellate Tribunal. First, they asked whether the forced retirement at fifty-five was justified. Second, they inquired what relief they were entitled to upon retirement. Third, assuming the forced retirement was justified, they sought to know the nature of the relief to which they would be entitled. The respondents argued that the standing order’s superannuation age should apply only to new entrants; for those already employed, the retirement age should be sixty, with an option to continue employment thereafter. The Labour Appellate Tribunal, on appeal, reversed the earlier findings of the Industrial Tribunal. It held that the standing order could not preclude adjudication on the propriety of the forced retirement scheme, noted that no fixed retirement age had existed in the appellant’s establishment prior to the standing order, and therefore concluded that the order could not be enforced against workers recruited before its issuance. Accordingly, the Tribunal directed that the compulsorily retired workmen be reinstated and that the appellant refund the gratuity and Provident Fund amounts paid to them.

The appellant raised two preliminary objections. It contended that the appeal to the Labour Appellate Tribunal was incompetent because it did not involve a substantial question of law, and it argued that the reference to adjudication itself was flawed, asserting that the delay in raising the present dispute demonstrated the respondents’ acquiescence to the standing order. The Supreme Court rejected both objections. It held that the question of the appropriate age of superannuation for industrial workers was of general importance, affected a large number of employees, and involved issues of industrial policy and principle; therefore, it constituted a substantial question of law under section 7(1)(a) of the Industrial Disputes Act. Consequently, the Court affirmed that the objections must fail.

A standing order was binding under section seven of the Industrial Employment (Standing Orders) Act, 1946. However, before the 1956 amendment, the Industrial Tribunals Act, 1950 allowed such a standing order to be modified when workmen raised an industrial dispute for that purpose. Therefore the present reference, which questions the propriety and validity of the forced-retirement system introduced by the appellant, must be decided on its merits. The Court referred to Mettur Industries Ltd. v. Varma and Others (1958) 11 L.L.J. 326 and Bharat Starch and Chemicals Ltd. v. The Industrial Tribunal, Punjab (1958) 11 L.L.J. 243. The Court observed that the delay inherent in raising an industrial dispute cannot be taken as evidence that the respondent acquiesced in the standing order. In industrial disputes, legal technicalities should be avoided where reasonably possible, and tribunals should be cautious in applying the principles of acquiescence and estoppel. The Court further held that it was unfair to set the retirement age for previously employed workers by a later standing order that should apply only to future hires. Since the earlier employees had agreed that their retirement age would be sixty with an option to continue thereafter, the retirement age for them should be fixed at sixty. However, removing the option was deemed wholly unreasonable and inconsistent with the basic idea of a retirement age. The Court referred to Jamadoba Colliery of Messrs. Tata Iron and Steel Co. Ltd. v. Shri Nasiban, 1955 L.A.C. 582. It also distinguished the case Guest, Keen, Williams Private Ltd. v. Its Workmen reported in The Calcutta Gazette, Part 1, dated 24-9-53, page 3261. Further distinctions were drawn from M/s. Calcutta Exchange Gazette & Daily Advertiser v. Shri Uma Prasanna Bhattacharjee, reported in The Calcutta Gazette, Part 1, dated 16-9-1954, page 3111. The Court also distinguished Bengal Chamber of Commerce v. Its Employees, Government of West Bengal, Labour Department, “Award made by the Tribunals” for the quarter ending March 1949, page 116. In fixing the retirement age, the Court instructed that industrial tribunals should consider factors such as the nature of work, wage structure, retirement benefits, and other amenities. The tribunals should also take into account the local climate, retirement ages in comparable industries, and the past practice prevailing in the industry. The judgment concerned a civil appeal numbered 403 of 1957, taken by special leave from a judgment and order dated 2 August 1956 of the Labour Appellate Tribunal of India, Calcutta. That order was in Appeal number C 52 of 1956 and arose out of an award dated 7 January 1956 of the Court of the Fifth Industrial Tribunal, West Bengal. Counsel for the appellant included the Attorney-General for India and another counsel. Counsel for the respondents included the Solicitor-General of India and two additional counsels. The judgment was delivered on 15 May 1959.

In this case, the Court noted that the judgment was delivered by Gajendragadar J. The appeal by special leave arose from an industrial dispute between Guest, Keen, Williams Private Ltd., hereinafter called the appellant, and its workmen represented by the Guest, Keen, Williams Staff Association, hereinafter called the respondent, and the dispute had been referred for adjudication to the Fifth Industrial Tribunal, West Bengal, Calcutta, by the Government of West Bengal on 29 December 1954. The reference contained three specific questions: first, whether the system of forced retirement of workmen at the age of 55 introduced by management in May 1954 was justified; second, what relief the workmen were entitled to upon retirement; and third, whether the forced retirement of the workmen listed in the attached schedule was justified and, if so, what relief including reinstatement or compensation they might claim. The tribunal answered these questions substantially in favour of the appellant, but on appeal by the respondent the Labour Appellate Tribunal reversed the tribunal’s findings and answered the questions substantially in favour of the respondent, a decision now challenged by the appellant through the present appeal. The appellant was a company incorporated with limited liability under the Indian Companies Act, carrying on engineering and manufacturing business from its premises at 41 Chowringhee Road, Calcutta, and operating a factory at Howrah employing about five thousand workmen. After the Industrial Employment (Standing Orders) Act, 1946 (Act 20 of 1946) came into force on 23 April 1946, the appellant submitted its draft standing orders for certification. The certifying officer, after giving the trade unions of the appellant’s workmen an opportunity to be heard and after considering their objections, certified the orders on 19 December 1953. No appeal was filed by the respondent, so the certified standing orders became final and operative as the conditions of service between the parties. The standing order relating to retirement provided that workmen shall retire on attaining the age of fifty-five years, but that the company could, at its sole discretion, offer an extension of service beyond that age to any individual. In accordance with this order, the appellant examined the service records of fifty-six employees who appeared, on the basis of those records, to have reached the age of superannuation. Two workmen objected to the correctness of the ages shown in their records; their objections were examined, upheld, and the records were corrected on the basis of certificates issued by the Civil Surgeon, Howrah. Seven of the employees were granted an extension of service until 31 March 1955, while the remaining forty-seven employees who were over fifty-five were retired effective 31 May 1954 after receiving notice of retirement on 11 May 1954. These forty-seven workmen were listed in the schedule attached to the reference, and it was on their retirement that question 3 of the reference was directed to the tribunal.

The list attached to the reference identified the forty-seven workmen who were the subject of Question 3, and it was on their behalf that the question was referred to the industrial tribunal. The tribunal recorded that each of those forty-seven workmen had received all the wages and benefits that were due to them, including the amounts contributed by the appellant and by the workmen themselves to the Provident Fund. In addition, the tribunal noted that the appellant had paid each of them a gratuity calculated at fifteen days’ wages for every year of service that they had completed before becoming members of the Provident Fund. The tribunal further observed that the appellant had presented valuable gifts to the workmen in recognition of their service, and that, in many instances, the appellant had offered employment to the sons or other relatives of the retired workmen. Despite these gestures, the respondent contested the compulsory retirement of the forty-seven workmen and even challenged the validity of the standing order on which the retirement was based. The dispute was therefore referred to the tribunal for determination, and it was after that referral that the present proceedings were initiated.

The tribunal concluded that the system of forced retirement introduced by the appellant under the relevant standing order was fully justified. It found that the respondent had failed to provide any persuasive reason for why the retirement age should be fixed at sixty years instead of fifty-five years, as the respondent had asserted. The tribunal cited that, in a separate dispute between the appellant and its head-office staff, the retirement age of fifty-five years had been fixed by mutual consent in proceedings before the Second Industrial Tribunal on 24 September 1953. It also referred to an award published in the Calcutta Exchange Gazette and Daily Advertiser, as well as to a case involving one of the appellant’s employees, where the age of superannuation had likewise been fixed at fifty-five years. The tribunal was further impressed by the appellant’s argument that the respondent had not filed an appeal against the standing order, even though an appeal was available under the Act. After holding that the compulsory retirement at fifty-five years prescribed by the standing order was justified, the tribunal went on to consider the two remaining questions and issued directions concerning the compensation to be paid to the forty-seven workmen; the present appeal does not concern those directions.

Nevertheless, the tribunal also addressed the specific issue raised in Question 3 regarding the respondent’s contention that the superannuation age fixed by the standing order should apply only to newly recruited workers and not to those already in service. The tribunal rejected that contention, holding that it had no merit. It observed that unemployment among young people was “certainly more reprehensible and unfortunate than unemployment among old men,” and it warned that accepting the respondent’s argument would impair the efficiency of the industry—a matter on which the tribunal could not act as a party. Accordingly, the tribunal found that there was no breach of faith or understanding with respect to the forty-seven workmen who had been compulsorily retired.

The Court observed that the tribunal’s discussion concerning the forty-seven workmen who had been compulsorily retired was important for understanding the broader question of issue 1. The tribunal’s earlier dismissal of arguments in issue 3 turned out to be more pertinent to the general issue 1, which concerned the entire workforce. The Labour Appellate Tribunal therefore adopted a different approach to the principal question raised in issue 1. It held that even though the forced-retirement system derived its authority from the applicable standing order, this fact did not automatically preclude the Court from examining whether the system was just and proper. The appellate tribunal noted that the appellant had conceded that, before the certification of the standing orders, there was no fixed retirement age in the concern, and that in several instances the appellant had continued to employ individuals who had already passed the customary age of superannuation. Consequently, the tribunal concluded that it was reasonable to infer that all workmen who entered the appellant’s service prior to the formulation of the standing orders had a legitimate expectation that they would remain in service as long as they were physically fit. Accordingly, the tribunal ruled that the new retirement scheme could not be fairly imposed on those employees who had been recruited before the standing orders came into force. In its adjudication of issue 1, the appellate tribunal determined that the compulsory retirement age should be set at fifty-five years for persons employed after the standing orders were certified, but that no retirement age should apply to employees who had joined the appellant before those orders. Consistent with this finding, the tribunal directed that the forty-seven workmen who had been retired under the compulsory scheme be reinstated, subject to the condition that they return any gratuity or provident-fund sums they had received from the appellant. This decision gave rise to the present appeal. The learned Attorney-General, appearing for the appellant, argued that the respondent’s appeal to the Labour Appellate Tribunal was incompetent and should not have been entertained. Section 7(1)(a) of the Industrial Disputes (Appellate Tribunal) Act, 1950, provides that an appeal lies to the appellate tribunal from any award or decision of an industrial tribunal where the appeal involves a substantial question of law. The appellant contended that the respondent’s appeal did not meet this requirement and that the appellate tribunal therefore exceeded its jurisdiction. The Court was not persuaded by this submission. It noted that issue 1, as referred to the tribunal, was a general issue affecting more than five thousand employees of the appellant, and that the determination of that issue inevitably raised questions of industrial policy and principle.

In the matter before the tribunal, the fundamental issue concerned the legal principle of whether the appellant possessed the authority to introduce a specified age of superannuation, and, if such authority existed, whether the implementation of that system would impinge upon the rights of individuals who had entered the appellant’s service with a legitimate expectation that they would not be subjected to any such rule. The tribunal was also called upon to determine what age of superannuation would be appropriate for an enterprise of the appellant’s size and nature. The Court regarded these matters as questions of law because they inevitably arose while resolving issue number one, and because they impacted a substantial number of the appellant’s employees. Consequently, the Court concluded that the respondent’s appeal to the Labour Appellate Tribunal certainly involved a substantial question of law, and that the preliminary challenge to the validity of the Labour Appellate Tribunal’s decision on that basis must therefore fail. The appellant further argued that the present reference was defective, relying on section seven of the governing Act, which renders standing orders binding upon both employer and employees. The Court affirmed that, under section seven, once standing orders become effective they bind every employee without distinction. The Attorney-General submitted that the forty-seven employees who had been retired for exceeding the stipulated superannuation age were bound by the standing order fixing the retirement age at fifty-five, and that, until such standing order is lawfully altered, those employees could not contest the legality of their compulsory retirement. To support this position, the Attorney-General cited the Madras High Court decision in Mettur Industries Ltd. v. Varma & Ors., where Justice Balakrishna Aiyer held that when an industrial dispute concerns a particular individual, the issue must be decided within the framework of the existing agreement and rules, and that standing orders remain controlling until they are amended. A comparable opinion was referenced from Justice Bishan Narain of the Punjab High Court in Bharat Starch and Chemicals Ltd., And The Industrial Tribunal, Punjab. The argument presupposed that the reference was made primarily, if not solely, on the basis of the forty-seven workers who had been compulsorily retired by the appellant. The Court found this assumption to be unfounded, observing that the reference demonstrated that the principal question before the industrial tribunal concerned a general issue affecting a large number of the appellant’s employees who had joined before the relevant standing orders were framed.

The tribunal was called upon to decide a general question that affected a large number of the appellant’s employees who had accepted service before the standing orders were framed. In substance this question encompassed all of the appellant’s employees and therefore required a full consideration. To resolve it, the tribunal would have to examine the matter on its merits and consider whether the existing standing order was valid or required modification. The second question also related to workmen other than those who had been compulsorily retired, and the answer to that question would naturally depend on the tribunal’s finding on the first issue. Only the third question mentioned the forty-seven workmen who had been compulsorily retired, and it was framed on the hypothesis that the tribunal would uphold the forced-retirement scheme introduced by the standing order. Assuming that hypothesis, the third question required the tribunal to decide whether those forty-seven workmen were entitled to any compensation or to reinstatement. Consequently it was clear that the reference primarily concerned the main industrial dispute raised by the respondent regarding the propriety and validity of the forced-retirement system introduced by the appellant. The dispute therefore had to be decided on the merits. In fact, as the judgment of Balakrishna Iyer noted in the case of Mettur Industries Ltd, employees are entitled to raise a dispute and to ask that the standing orders be amended. That is precisely what the respondent seeks to achieve by raising the present dispute as disclosed in Issue No 1. Accordingly the Court held that the argument claiming the reference to be invalid was unsound, and therefore it could not be dismissed.

It was then necessary to examine the scheme and effect of the relevant provisions of the Industrial Disputes Act. The Act had come into force on April 23, 1946, and its purpose was to require employers in industrial establishments to define with sufficient precision the conditions of employment and to make those conditions known to the workmen they employed. The matters that had to be set out in standing orders were enumerated in eleven items in the Schedule to the Act, and the term “standing orders” as used in the Act meant rules relating to those matters. When an employer submitted draft standing orders to the certifying officer, the officer was required to be satisfied that the draft provided for every matter listed in the Schedule and that it was otherwise consistent with the provisions of the Act. It was significant that, originally under section 4, neither the certifying officer nor the appellate authority had the competence to adjudicate on the fairness or reasonableness of any provision of the standing orders. That limitation was later removed by the amendment effected through Act 36 of 1956, and consequently the certifying officer and appellate authority were given the power to examine the fairness and reasonableness of the standing-order provisions.

The amendment altered the role of the certifying officer and the appellate authority by granting them the power to assess whether the provisions of standing orders are fair or reasonable. Before this amendment, the certifying officer’s only duty before granting certification was to verify that every item listed in the Schedule was covered and that the orders did not conflict with any other provision of the Act. Section 7 provides that once standing orders are certified they become operative, subject to the remaining provisions of the Act. Section 10 stipulates that certified standing orders may not be altered, except by mutual agreement of the employer and the workmen, until six months have elapsed from the date the orders—or any subsequent modifications—came into operation. Prior to the 1956 amendment, sub-section (2) of section 10 authorized only the employer to apply for such modification; the amendment subsequently extended that right to the workmen as well. Consequently, under the original enactment the scope of inquiry available to the certifying officer and the appellate authority was extremely narrow, and employees did not possess a statutory right to seek modification of the standing orders before the amendment of section 10(2). Nevertheless, once certified, the standing orders were binding on the employer and all his employees. There is no doubt that, before the 1956 amendment, an employee who wished to contest the fairness or reasonableness of a standing order had to do so by raising an industrial dispute on the particular matter. The two amendments cited above have substantially altered that position; however, the present appeal is concerned with the legal position as it existed prior to those amendments. Accordingly, it cannot be denied that, at that time, employees could seek modification of an unreasonable or unfair standing order only by raising an industrial dispute. After the amendment, employees may bring the same dispute before the certifying officer or the appellate tribunal and, where appropriate, apply for modification under section 10(2). Thus, although the standing order concerning the age of superannuation became operative under section 7 and bound both employer and employees, the respondent’s right to challenge the validity or propriety of that order and to seek a suitable modification remains undisputed. Certified standing orders inevitably become part of the terms of employment by operation of section 7; however, if an industrial dispute arises concerning those orders and it

When a matter is referred to the industrial tribunal by the appropriate government, the tribunal possesses jurisdiction to consider the dispute on its merits, and this authority cannot be contested. Nevertheless, it was argued that the respondent’s delay in raising the present dispute signified acquiescence to the standing orders and, in effect, was pleaded as a bar to the validity of the reference. The Court did not accept this contention. In the context of industrial disputes, the Court emphasized that technical legal doctrines should be avoided wherever reasonably possible. The argument of acquiescence, which in ordinary civil litigation might support a plea of estoppel, was examined in this industrial setting. An industrial dispute must first be raised by the workers’ union before it can be referred; it is possible that the union may decline to raise a dispute even when the grievance of an individual workman or a group appears well-founded. Moreover, even if the union does raise a dispute, the State Government retains discretion under section 10 of the Industrial Disputes Act to refer the matter to the tribunal, and that discretion is described as very wide. Consequently, workers affected by standing orders are not assured of a reference to the tribunal in every instance. Accordingly, tribunals are advised to proceed cautiously and to refrain from applying strict technical principles of acquiescence and estoppel when adjudicating industrial disputes. While a tribunal will inevitably consider an unexplained, considerable delay in raising a dispute when evaluating the merits, it should not, absent clear justification, dismiss the reference on preliminary technical grounds such as those raised by the appellant in the present case.

The Court noted that the relevant standing-order was certified in December 1953 and came into operation in January 1954. The dispute was consequently raised by the respondent as soon as the appellant sought to enforce the order in May 1954, making it difficult to sustain the argument that the respondent had exhibited latches or acquiescence. Accordingly, the Court held that the respondent was entitled to bring the industrial dispute and that the reference was free from any defect. The learned Attorney-General then contended that the Labour Appellate Tribunal had entirely misconstrued the scope of enquiry under issue No. 1. According to that contention, issue No. 1 required the tribunal, in the abstract, merely to ascertain the propriety of fixing the superannuation age at 55, without any need to examine the rule’s impact on the appellant’s employees, to determine whether any superannuation age should be fixed, or, if so, what that age should be. The Court found this submission to be misguided, emphasizing that the tribunal’s task involved not only assessing the rule’s propriety, reasonableness and fairness but also deciding whether the rule could and should apply to employees already in service without a prior retirement-age limitation.

In this matter the tribunal was asked to resolve only two questions: what limit, if any, should be placed on the age of superannuation and whether that limit applied to employees already in service. The learned Attorney-General argued that the tribunal’s task on issue No 1 was simply to answer “yes” or “no” to the proposition that a standing order fixing the retirement age was appropriate. The Court found that view to be mistaken. It held that the tribunal could not limit its inquiry to a binary answer, because it was required to examine not merely the propriety, reasonableness and fairness of the rule but also whether the rule could and should be extended to workers who had been employed by the appellant before any retirement age had been prescribed.

The Court observed that industrial tribunals, when fixing a superannuation age, have repeatedly considered this two-fold problem, and that the same dual aspect was intended when issue No 1 was framed. Both the industrial and appellate tribunals, although their judgments contain some confused and intermixed discussion, nevertheless addressed the two-part question. Moreover, the respondent’s specific grievance—that the rule was being applied to employees who had been hired before any retirement age was fixed—was expressly raised before those tribunals. Turning to the merits, the appellant did not deny that, prior to the certification of the present standing orders, it had employed its work-men without any statutory age of superannuation.

In the respondent’s statement to the tribunal it was clearly asserted that there was no fixed retirement age or required period of service, and that the implied condition of service was that a work-man would remain employed for life unless rendered incapable by ill health. The respondent further alleged that, for the first time in the company’s history, the appellant had suddenly decided to enforce the new standing orders by compulsorily retiring the forty-seven work-men concerned. The respondent also proposed a remedial measure, suggesting that the age of sixty should be fixed as the retirement age for those already employed, while allowing continued employment subject to physical fitness. To support this proposal, the respondent relied upon a statement filed by the appellant which listed details of the forty-seven retired employees; that statement demonstrated that some of those employees had been hired after reaching the age of fifty-five and that a large majority had passed fifty-five well before their actual retirement.

It was significant that, although the respondent made these precise allegations, the appellant never asserted that any retirement age had been in force before the standing orders were framed. The appellant’s submissions, while acknowledging that it now followed the general practice of fixing retirement at fifty-five, did not claim that such a practice had applied to its own employees before the introduction of the standing orders.

The appellant entered its answer with a blanket denial of every allegation contained in the respondent’s statement, but the Court noted that such a general denial carried little weight. In paragraph 5 of the appellant’s statement it asserted that fixing the retirement age at fifty-five years is the usual practice in both public and private industry and that this practice conforms to the Employees’ Provident Fund Act. The Court observed, however, that while the appellant referred to the general practice of setting the superannuation age in the broader sectors, it did not claim that the same practice applied to its own employees. Moreover, in its case-in-point before the Court the appellant acknowledged that no fixed retirement age existed before the standing orders were framed, yet it added that, ordinarily, workmen were retired at fifty-five. This latter claim was presented as a factual allegation for the first time before the Court, and no documentary evidence or other material on record was offered to support it. Consequently, the Labour Appellate Tribunal was correctly justified in deciding the dispute on the basis that the many workers who had been employed by the appellant prior to the issuance of the standing orders were not bound by any superannuation rule.

The appellant further argued that both tribunals had agreed that fixing the superannuation age at fifty-five was reasonable, and therefore it considered itself entitled to raise that point. Nevertheless, the Labour Appellate Tribunal held that the fifty-five-year age could not be applied retrospectively to affect employees hired before the standing orders, and the Court identified this retrospective application as the sole issue requiring its determination. The respondent did not dispute that the standing order fixing the superannuation age at fifty-five would bind future entrants into the appellant’s service. The learned Solicitor-General, however, maintained that applying the rule to workmen already employed would be unreasonable and unfair. The appellant submitted that the existing workmen themselves had requested that a superannuation age be fixed, and it further argued that the respondent’s suggestion of fixing the age at sixty would be inconsistent with paragraph 69 of the Employees’ Provident Fund Scheme, 1952, made under section 5 of the Employees’ Provident Fund Act, 1952 (Act 19 of 1952). The Court noted that the claim that the workers wanted a fixed superannuation age overlooked the fact that their demand was coupled with a request that the age be set at sixty and that an option to continue service thereafter be provided.

Consequently, the appellant cannot rely on the purported admission of the workmen to justify fixing the retirement age at fifty-five years. The Court found the contention that paragraph 69 of the Employees’ Provident Fund Scheme, 1952, mandates a retirement age of fifty-five to be entirely untenable. Paragraph 69 itself does not impose any obligation on an employer to determine a fixed retirement age for its employees. Explanation 11 to that paragraph merely states that a member shall be deemed to have attained the age of superannuation upon completing fifty-five years of age. However, this deeming provision does not compel an employee to retire at the moment the age of fifty-five is reached in every circumstance. Paragraph 69(1) permits a member to withdraw the entire amount in the fund after attaining the age of superannuation, provided he has actually retired. Thus, two separate conditions must be satisfied before a withdrawal is permissible: the member must have reached the deemed superannuation age and must have ceased employment. The learned Attorney-General acknowledged this interpretation during his oral submissions, effectively conceding the Court’s position on the statutory construction. Conversely, the learned Solicitor-General argued that applying the superannuation rule to employees who were already in service would be manifestly unfair and unreasonable. The Solicitor-General invoked section 2(oo) of the Industrial Disputes Act, which defines retrenchment, and argued that compelling prior employees to retire upon reaching fifty-five would amount to retrenchment. He further contended that such retrenchment would entitle the workers to benefits under section 25(F) and would prejudice the earlier employees. He nevertheless conceded that the precedent set by the Court in Hariprasad Shivshankar Shukla v. A.D. Divikar would defeat the claim of prejudice. Given that concession, the Court indicated that it would not examine that particular line of argument in detail. The remaining issue for determination was whether fixing the superannuation age at fifty-five for the prior employees could be deemed reasonable and fair, considering that no such limitation existed when they entered service. The Labour Appellate Tribunal had previously held that imposing such a condition on those workers would be both unreasonable and unfair. That finding received support from the decision of the Labour Appellate Tribunal in the case of Jamadoba Colliery of Messrs. Tata Iron and Steel Co., Ltd. v. Shri Nasiban. In that matter, the respondent Nasiban had been employed before the superannuation rules were introduced, and the employer’s attempt to retire her under the new rules was contested before the industrial tribunal. Both the tribunal and the Labour Appellate Tribunal concluded that the employer could not impose the new retirement condition on a worker who had not elected to be governed by the rules.

Both the Labour Appellate Tribunal and the Industrial Tribunal held that a worker who entered service before the new superannuation rules were enacted could not be disadvantaged by those rules unless the worker voluntarily chose to be governed by them. In other words, the tribunals said that employees who were already in service when the new orders were introduced must be given a clear option to accept the new regulations. Only if an employee exercised that option could the new superannuation provisions be made applicable to that employee. This principle was applied to protect the rights of prior employees from retrospective imposition of the new retirement age.

The learned Attorney-General then referred the Court to several other awards in which the superannuation age had been fixed at fifty-five years. The first award cited concerned a dispute between the present appellant and its employees at the head office in Calcutta. The Court found that this award did not aid the appellant because the retirement age in that award was fixed solely on the basis of a mutual agreement between the parties. When the employees themselves consent to a particular superannuation age, the validity of that agreement is not in doubt, and therefore the award cannot support the appellant’s present argument. The second award mentioned related to an industrial dispute involving the Bengal Chamber of Commerce and its employees. Although that award also fixed the retirement age at fifty-five, the award did not make clear whether the age limit was being introduced for the first time. Consequently, the award did not address the key question of whether a superannuation rule could be set for the first time and applied to both existing and future employees. The third award cited involved a dispute between M/s. Calcutta Exchange Gazette & Daily Advertiser and Shri Uma Prasanna Bhattacharjee. That case concerned the termination of Shri Bhattacharjee and was decided in the employee’s favour. The tribunal, in making its award, referred to the Omnibus Press Tribunal Award, which had fixed the superannuation age at fifty-five, but the Omnibus Press Award itself was not produced before the Court. Thus, none of the three awards relied upon by the appellant examined the principle of fixing the superannuation age for the first time in a manner that would affect the legitimate expectations of employees who had been hired before any such rule existed.

In discussing the employees who had been engaged in previous service and who had not been subject to any superannuation rule, the Court observed that the question had already been examined by the Labour Appellate Tribunal in the Jamadoba Colliery case. The view expressed in that earlier decision had been adopted by the present Labour Appellate Tribunal. The Court stated that, on the basis of the material placed before it and considering the circumstances of the present matter, it would not be appropriate to set aside the decision of the Labour Appellate Tribunal. However, the Court noted that one additional issue required consideration. If the Labour Appellate Tribunal’s conclusion that it would be unfair and unreasonable to impose a superannuation age of fifty-five on the prior employees were accepted, the Court asked whether this acceptance meant that no superannuation rule should apply at all to those employees. The Court observed that the Tribunal had entirely failed to address this point, an omission it found regrettable because the respondent had expressly suggested that a retirement age of sixty years would be reasonable for the prior employees, while also claiming that those employees could be allowed to continue in service after crossing the sixty-year limit, subject only to physical fitness.

The learned Solicitor-General informed the Court that, in view of the position taken by the respondent, the Court was free to consider whether sixty should be prescribed as the retirement age for those who were employed by the appellant before the certification of the present standing orders, as reported in the 1955 L.A.C. case. He did not dispute that the tribunals could have made an appropriate order on that question and acknowledged that the Court itself could issue a suitable direction if it deemed it reasonable. After considering these submissions, the Court formed the opinion that it was necessary to fix a superannuation age even for the prior employees. It held that directing those employees to retire upon attaining the age of sixty would not be unfair or unreasonable. The Court further rejected the respondent’s suggestion that the employees could be allowed to remain in service beyond that age, describing such a proposition as wholly unreasonable and inconsistent with the very concept of fixing a superannuation age. While the Court recognized that, once a superannuation age is fixed, an employer might, for special reasons, retain a workman who has passed that age, it found it inconceivable that the option to continue in service should lie with the employee once the superannuation age had been established. Consequently, the Court concluded that, in the facts of this case, the appropriate retirement rule for the employees who had been in service before the new standing orders should be set at sixty years, whereas the rule of fifty-five years should apply to all employees who joined the appellant’s service after the standing orders came into force.

The Court observed that the relevant standing orders had become effective and that fixing the superannuation age for the prior employees at sixty years essentially gave effect to the plea advanced by the respondent before the tribunal. However, the Court stressed that this determination was not intended to settle the broader issue of how the superannuation age should be fixed for industrial workers in general. In doing so, the Court explained that an industrial tribunal, when asked to fix a retirement age, must consider a variety of material factors. These factors include the nature of the work performed by the employees, the structure of wages paid, the retirement benefits and other amenities available, the climatic conditions of the workplace, the superannuation ages fixed in comparable industries within the same region, and the historical practice of retirement in the relevant industry. The Court emphasized that each of these considerations, together with any other pertinent facts, must be weighed by the tribunal in every case involving an industrial dispute over retirement age.

In the case presently before the Court, it was noted that both tribunals had fixed the retirement age at fifty-five years for future entrants, a decision that was largely based on the standing order already examined. Regarding the employees who were already in service, the Court found that there was no serious dispute that the retirement age could be set at sixty years. Accordingly, the Court concluded that the superannuation age for those prior employees should be fixed at sixty years.

The Court then turned to the list of forty-seven workmen attached to the reference, noting that each of those individuals had already exceeded the applicable retirement age. Annexure B, filed by the appellant, contained the year of birth of each workman and showed in the relevant column that none of them could now claim reinstatement as a result of this judgment. Apart from that technical point, the Court observed that all of those workmen had accepted the retirement order without protest, had voluntarily received their provident-fund gratuities, and had accepted the gifts presented to them by the appellant. Moreover, the appellant had already appointed relatives of many of the retired men to other positions.

On the basis of these findings, the Court directed that none of the forty-seven former workmen was entitled to reinstatement. The Court therefore confirmed the decision of the Labour Appellate Tribunal, subject to the modifications stated above. Because each party had achieved partial success and partial failure, the Court ordered that each party bear its own costs. The appeal was allowed in part.