The Patna Electric Supply Co., Ltd. vs The Patna Electric Supply Workers' Union

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 227 of 1958

Decision Date: 23 April 1959

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

The case was titled The Patna Electric Supply Co., Ltd., Patna versus The Patna Electric Supply Workers’ Union and was decided by the Supreme Court of India on 23 April 1959. The judgment was authored by Justice P.B. Gajendragadkar, and the bench comprised Justices P.B. Gajendragadkar, Bhuvneshwar P. Sinha and K.N. Wanchoo. The decision was reported in 1959 AIR 1035 and 1959 SCR Supl. (2) 761. The dispute concerned an industrial labour issue involving the provision of housing facilities for workers and the validity of an award that was based on a scheme prepared by the Government of Bihar.

The workers’ union claimed that, under the Bihar Government Scheme, the employer was required to provide residential quarters for its employees and to commence immediate construction of such quarters. The company countered that the primary responsibility for providing housing lay with the State and, moreover, that it lacked the financial capacity to undertake the construction. The Industrial Tribunal, however, upheld the union’s claim and directed the company to begin construction of at least fifteen quarters, as specified by the scheme, within a period of one year. On appeal, the Labour Appellate Tribunal affirmed that the Government scheme was binding upon the company and affirmed the award.

The scheme in question had been prepared by an Industrial Housing Sub‑Committee appointed by the Government of Bihar and subsequently sanctioned by that Government on the recommendation of the Bihar Central (Standing) Labour Advisory Board. The scheme imposed upon employers the duty to provide housing for industrial labour and offered financial assistance from the State Government amounting to fifty percent of the capital required, in the form of a loan repayable in twenty‑five annual instalments and recoverable on default from the mortgaged property or other assets of the debtor. The scheme also prescribed the terms on which the quarters were to be let to employees and stipulated their size. The company argued that the scheme was not obligatory and could not create an additional term of employment for the workmen. The union contended that the scheme materially altered the rule followed by industrial adjudication in Bihar and imposed a moral obligation on the employer. Neither the Industrial Tribunal nor the Labour Appellate Tribunal gave consideration to the company’s financial position, and both held that the scheme did impose a moral obligation on the appellant to provide quarters for its employees, an obligation that was enforceable in industrial adjudication. The Court held, that the scheme sanctioned by the

The Court observed that the Bihar Government’s scheme was merely recommendatory and possessed no statutory force; consequently, it could not serve as a legal foundation for the direction issued in the award. The wording of the scheme, the Court noted, was vague and not intended to be binding, and therefore it could not create a contractual term of employment between the employer and the workmen. While acknowledging that Industrial Tribunals generally enjoy the power and jurisdiction, independent of any private scheme or agreement, to impose new obligations on employers in cases where such imposition serves the cause of social justice or promotes peace and cooperation between employer and employee, the Court held that the award under challenge could not be justified on its merits given the prevailing stage of industrial development in the country. In support of this conclusion, the Court referred to the authorities Western India Automobile Association v. The Industrial Tribunal, Bombay, A.I.R. 1949 F.C. III; The Bharat Bank Ltd., Delhi v. The Employees of the Bharat Bank Ltd., Delhi, [1950] S.C.R. 459; and Rohtas Industries Ltd. v. Brij Nandan Pandey, [1956] S.C.R. 800. The Court further explained that it is the duty of Industrial Tribunals to consider the interests of the national economy and overall progress, and it affirmed that the Tribunals had consistently taken the view that, in view of the existing financial condition of industry in the country, it would be imprudent to impose the additional burden of providing housing facilities on employers, a responsibility that should rest primarily with the State. The Court endorsed the earlier decisions Eastern Plywood Manufacturing Co., Ltd. v. Their Workers, [1949] L.L.J. 291; Mohammad Rai Akbarali Khan v. The Associated Cement Companies Ltd., [1953] L.A.C. 677; Samastipur Central Sugar Co., Ltd. v. Their Workmen, [1955] 2 L.L.J. 727; and M/s National Carbon Co. (India) Ltd. v. National Carbon Co. Mazdoor Union, Calcutta, [1956] L.A.C. 660. The judgment then proceeded to set out the civil appellate jurisdiction, noting that the appeal, numbered Civil Appeal No. 227 of 1958, was filed by special leave against the judgment and order dated 31 January 1956 of the Labour Appellate Tribunal of India, Calcutta, in Appeals Nos. Cal. 36 and 38 of 1953. The parties were represented by counsel, with the Attorney‑General for India appearing for the appellant and counsel for the respondents. The judgment, delivered on 23 April 1959 by Justice Gajendragadkar, concerned an industrial dispute between Patna Electric Supply Co., Ltd., the appellant, and its workmen, represented by the Patna Electric Supply Workers’ Union, the respondent. The appellant, a public company incorporated under the Indian Companies Act and headquartered in Patna, operated solely as a public utility engaged in supplying electricity and was licensed under the Electric Supply Act, 1948. The dispute originated when, on 29 March 1952, the Government of Bihar issued a notification under sections 7 and 10(1) of the Industrial Disputes Act, 1947, referring twelve items of dispute to the Industrial Tribunal, of which the present appeal concerns the item relating to housing facilities and the principle of allotting quarters to the workmen.

The Government of Bihar, by notification under sections 7 and 10(1) of the Industrial Disputes Act, 1947, referred twelve items of dispute to an Industrial Tribunal whose sole member was Mr. H. K. Chaudhuri. The present appeal concerns only one of those items, namely the question of housing facilities for the workmen and the principle governing the allotment of quarters to them. The employees’ union demanded that the company provide houses for its workers and that construction of quarters be undertaken immediately in accordance with that demand. The union argued that the company was contractually bound to provide quarters and to let them out to workers pursuant to the Bihar Government’s housing scheme. The company denied any liability to make housing provision, contending that such responsibility rested primarily on the State and that it lacked the financial capacity to undertake the task. Additionally, the company maintained that its operations were governed by the Electricity Supply Act, 1948, and that the relevant provisions of that Act prohibited the expenditure required for constructing the quarters. On 9 March 1953 the Industrial Tribunal ruled in favour of the union, directing the company to commence construction of at least fifteen quarters in accordance with the specifications laid down in the Government scheme, to be completed within one year from the date of publication of the award. The company appealed this part of the award to the Labour Appellate Tribunal, but the appellate tribunal rejected the appeal on 31 January 1956. The appellate tribunal affirmed that the Bihar Government’s scheme was binding on the company and found no merit in the company’s argument that the required expenditure was inadmissible under the Electricity Supply Act. Subsequently, the company obtained special leave to appeal to this Court on 17 September 1956, thereby bringing the present appeal before this Court. The sole issue for determination is whether the directive in the award, requiring the company to commence construction of at least fifteen quarters, is legally justified. It is acknowledged that the company has already provided housing for a limited number of its employees, namely seventeen of one hundred eighty‑three staff in the Power Station. In addition, one hundred forty‑six of three hundred twenty‑nine employees in the Mains Department and one of fifty‑eight employees in the General Department have been given free quarters. Furthermore, one employee in the Mains Department receives a house allowance equal to twelve and a half percent of his salary in lieu of a house. The company submits that this arrangement reflects its own discretionary choice and cannot be transformed into a contractual obligation or a term of employment.

In the present dispute the appellant argued that the provision of housing could not be treated as a compulsory term of employment and therefore could not be imposed as an obligation on the employer. The respondent, on the contrary, maintained that the housing scheme introduced by the Government of Bihar created a duty for the appellant to supply housing facilities to every one of its workers. While it was not seriously contested by the respondent that the industrial adjudication process had consistently held that the primary responsibility for providing housing to industrial labour rested with the State, the respondent asserted that the scheme prepared by the Industrial Housing Sub‑Committee in Bihar had fundamentally changed the situation as it applied to the State of Bihar. This view had been adopted by the tribunals below, which held that although the scheme was only recommendatory in nature, it nevertheless imposed a moral obligation on the employer to furnish housing for his employees, and that such a moral obligation could be enforced in industrial adjudication. The Court first needed to examine this conclusion.

Historical background shows that in March 1938 the Government of Bihar constituted the Bihar Labour Enquiry Committee, chaired by Dr Rajendra Prasad, with the purpose of investigating the condition of industrial labour in the State and making practicable recommendations aimed at improving wages and working conditions. The Committee presented its report to the Government in April 1940. In that report it suggested that provision of housing on a sufficient scale should become a statutory duty of the employer, but it also recommended that the extent of any such duty should be determined by the State Government after a careful inquiry into the employer’s financial condition. No action was taken by the State on this recommendation.

Subsequently, acting on the advice of the Bihar Central (Standing) Labour Advisory Board, the Bihar Government established an Industrial Housing Sub‑Committee. This Sub‑Committee submitted a report on 16 December 1948 recommending the creation of an industrial housing board to devise schemes for housing industrial workers. The matter was then taken up by the Bihar Central (Standing) Labour Advisory Board on 11 February 1950, which asked the Sub‑Committee to re‑examine the issue and to make specific recommendations. The Sub‑Committee reconsidered the problem and issued its final recommendations on 17 August 1950. These recommendations were reviewed by the Bihar Central (Standing) Labour Advisory Board in September 1950 and were adopted, with minor modifications, by the Board. The State Government thereafter gave its final sanction to the scheme. Under the sanctioned scheme the responsibility for providing housing to industrial labour was placed upon the employers. Initially the scheme was intended to apply only to factories that were registered under the Factories Act, 1948, and it provided for financial assistance by the State Government to the employer on terms and conditions specified in the scheme.

The scheme stipulated that the State Government was authorized to advance a loan to an employer for up to fifty percent of the capital required to construct industrial housing, and that such loan would bear interest at a rate of three per cent per annum. The balance of the required capital, namely the remaining fifty percent, was to be contributed by the employer themselves. The loan amount together with the accrued interest was required to be repaid by the employer in twenty‑five equal annual instalments on dates fixed by the Government for repayment. In addition, the scheme incorporated a default provision that empowered the State Government to recover any outstanding amount by attaching the properties that had been mortgaged to the Government as security for the loan, or by seizing any other assets owned by the borrower. The scheme also set out the conditions under which the completed quarters were to be let to employees, and it specified the standard size and other technical specifications that the quarters should meet. The respondent contended that, because the scheme had been sanctioned by the State Government, it imposed a moral obligation upon employers in the State of Bihar to implement the housing programme, and that an industrial tribunal could give effect to that obligation by issuing appropriate directions in its award. The tribunals below accepted this contention and held that the award could compel the employer to comply with the scheme.

The Court observed that, although the original Bihar Labour Enquiry Committee had recommended that the State Government make provision of adequate housing a statutory duty of the employer, the State Government had never enacted such a statutory requirement. It was undisputed that the State Legislature had not passed any law imposing a legal obligation on employers to provide housing for their workers on an adequate scale. Consequently, the scheme relied upon by the respondent possessed no statutory force; it merely affirmed the recommendations of the Bihar Central (Standing) Labour Advisory Board and limited the State Government’s liability to the partial financial assistance described in its terms. In other words, an industrial employer who wished to provide housing could apply for financial assistance under the scheme, and the State could grant that assistance, but the scheme did not create any enforceable duty compelling the employer to construct housing. While the Court acknowledged that a large proportion of industrial labour in Bihar was in dire need of decent accommodation and that it would be desirable for the State, the employer, or both to cooperate in providing such facilities, it concluded that the scheme, however laudable in its objective, could not constitute a valid basis for an award to direct the appellant to build quarters for its workmen.

In this case the tribunals had taken the view that the housing scheme previously prepared by the State Government was adopted with the consent of the appellant and therefore bound the appellant to construct quarters for its workmen as the award required. The Court observed that this view was unsupported by the facts. None of the partners of the appellant sat on the Committee that prepared the scheme, and the appellant’s Labour Adviser, Mr Chandra, was not a member of that Committee in 1950 when the scheme was originally adopted. He only became a member in 1952, and even then he also acted as Labour Adviser for other companies. Consequently, the Court found it difficult to accept the argument that Mr Chandra could, after his 1952 appointment, represent the appellant in a legal sense that would bind the company by his personal consent. Moreover, because Mr Chandra was not a Committee member at the time the scheme was first adopted, his later membership could not retrospectively give effect to the appellant’s alleged consent. The Court also noted that although the State Government had nominated some representatives of industrial employers to the Committee, this fact did not convert the scheme, which was approved by the Committee and thereafter sanctioned by the Government, into a binding obligation upon the appellant. The presence of employer representatives on the Committee therefore could not justify the assumption that the appellant was automatically bound by the scheme’s provisions.

The Court further explained that the scheme itself made it clear that the chief responsibility for providing housing accommodation to the lowest‑paid workers rested with the employers, while the State Government’s role was limited to offering assistance in the form of loans and help with land acquisition. By using the word “mainly,” the scheme was expressly characterised as recommendatory rather than mandatory, indicating that it was vague and not intended to be enforced as a legal requirement. The tribunals, therefore, could not lawfully require the Government to advance a loan each time they issued an award directing an employer to begin construction of workers’ quarters. If the Government delayed or was unable to sanction the required loan, the employer would face the risk of penalties for failing to comply with the award, a situation that would be unfair to the employer. This analysis highlighted that the problem of providing housing had to be resolved through co‑operation between the employers and the State, and could not at present be treated as a matter that could be imposed by an award. Accordingly, the Court was satisfied that the scheme, being the sole basis for the award, could not create a contractual term of employment obliging the appellant to provide housing facilities to its workmen. The Court also warned that upholding the present award could encourage similar demands from employees in other related industries in Bihar, which would impose a substantial burden on employers and could materially impede the industrial progress of the State. It was therefore necessary to stress that, while the claims of the workmen deserved sympathetic consideration on grounds of social and economic justice, the broader interests of the national economy and industrial development had to be borne in mind.

The Court observed that although workmen may be treated sympathetically on the ground of social and economic justice, industrial adjudication must also keep in view the interests of the national economy and progress, which are relevant and material. Consequently, the Court held that the award under appeal could not be sustained on the basis of the scheme sanctioned by the Bihar Government. The respondent, however, argued before the Court that apart from the scheme, the industrial tribunal possessed jurisdiction to make an award requiring the appellant to provide housing accommodation for its employees. The respondent contended that, unlike commercial arbitration, industrial arbitration may, and often does, involve the creation of a new contract or the imposition of new obligations on the employer in the interests of social justice, and that, given the dire need of the employees for housing accommodation, the tribunal was free to direct the appellant to commence provision of housing for some of its employees. To support this argument, the respondent relied upon the frequently quoted observation of Ludwig Teller that “Industrial arbitration may involve the extension of an existing agreement or the making of a new one, or, in general, the creation of new obligations or modification of old ones while commercial arbitration generally concerns itself with interpretation of existing obligations and disputes relating to existing agreements” (1). The Court acknowledged that, in appropriate cases, industrial adjudication may impose new obligations on the employer in the interest of social justice and with the aim of securing peace and harmony between the employer and his workmen and fostering cooperation between them. This view of the jurisdiction and power of industrial tribunals has been consistently recognised in this country since the decision of the Federal Court in Western India Automobile Association v. The Industrial Tribunal, Bombay (2). In that case the employer had challenged the jurisdiction of the industrial tribunal to direct the reinstatement of his employees, arguing that such a direction was contrary to the established principles governing the master‑servant relationship and beyond the tribunal’s jurisdiction. The Federal Court rejected that contention and observed that industrial adjudication does not conform strictly to the law of master and servant. Justice Mahajan, delivering the judgment of the Court, remarked that “the award of the tribunal may contain provisions for the settlement of a dispute which no Court could order if it were bound by ordinary law, but the tribunal is not fettered in any way by these limitations.” The same principle was later expressed more emphatically by Justice Mukherjea in The Bharat Bank Ltd., Delhi v. The Employees of the Bharat Bank Ltd., Delhi (1), wherein he stated that in settling disputes between employers and workmen the tribunal’s function is not confined to the administration of justice according to law. Rather, the tribunal may confer rights and privileges it deems reasonable and proper, even if they are not covered by any existing agreement, and it may create new rights and obligations essential for maintaining industrial peace.

The learned judge observed that when a tribunal deals with disputes between employers and workmen, its role is not limited to merely administering justice according to existing law. The tribunal may grant rights and privileges to either side that it deems reasonable and proper, even when such rights are not found in any current agreement. It is therefore not confined to interpreting or enforcing contractual obligations; it can also create new rights and obligations that it considers essential for maintaining industrial peace. In the case of Rohtas Industries Ltd. v. Brijnandan Pandey, Justice S K Das expressed a similar view, noting that while a regular court can only enforce contracts that the parties have themselves made, an industrial tribunal is not bound by that limitation. The tribunal may therefore fashion new obligations or amend existing contracts in order to safeguard legitimate trade‑union activities, prevent unfair practices, and promote industrial harmony.

The court held that an industrial tribunal unquestionably possesses the authority to issue a proper and reasonable order in any industrial dispute, and therefore the respondent’s claim that the tribunals below were competent to consider its grievance concerning housing accommodation was not without merit. However, assuming that the tribunal indeed had jurisdiction to hear the matter, the court examined whether the award under appeal could be justified on general principles apart from the specific agreement on which the tribunals based their decision. The court concluded that, under the prevailing circumstances, the answer must be in favor of the appellant and against the respondent. Industrial tribunals have consistently ruled that the provision of housing for industrial labour is primarily a State responsibility, and there is unanimous agreement that, given the current economic conditions, it would be imprudent to impose on employers the duty to supply housing. A wage scheme that is properly fixed already incorporates house‑rent considerations along with other relevant factors, and a suitable dearness‑allowance scheme allows for periodic adjustments to reflect any substantial increase in rents payable by industrial workers. Consequently, tribunals ordinarily do not entertain separate claims for housing or house‑rent allowances, a position that the respondent does not dispute. The court referred to several representative decisions of industrial tribunals on this issue, including Eastern Plywood Manufacturing Co., Ltd., and others, to illustrate the prevailing judicial approach.

The Tribunal in the case of Eastern Plywood Manufacturing Co., Ltd., Their Workers rejected the claim of the workmen for housing accommodation and, alternatively, for a house‑rent allowance of ten rupees per month. The Tribunal reasoned that the duty to provide housing for labour in an urban area did not rest on the employer. It observed that the issues of basic pay and dearness allowance had already been examined, and that the appropriate amount of emoluments to be paid to the workmen had been determined. Consequently, the Tribunal held that it would be unreasonable to impose an additional financial burden on the company in the form of a separate house‑rent allowance. The decision was reported in the 1949 volume of the Law Journal, page 291. In the later case of Mahomad Rai Akbarali Khan v. The Associated Cement Companies Ltd., the Labour Appellate Tribunal faced a similar problem. The employees before the Appellate Tribunal argued that the employer should either furnish quarters or pay a house‑rent allowance, while the company contended that it was not the management’s function to provide accommodation. The Tribunal, after considering the matter, accepted the employer’s contention only with considerable qualifications in certain circumstances, and turned its attention to the particular features of the factory located at Sevalia. The Tribunal noted that Sevalia had been a village until the employer established a factory there, which required a large workforce. It observed that when an industrial concern of this nature emerges in a rural area, it has a substantial impact on the local economy: nearby residents join the factory, people from farther away are attracted, and consequently housing becomes scarce and expensive. The Tribunal further observed that if a workman must travel a greater distance to obtain accommodation, he suffers considerable physical fatigue and inconvenience. In such conditions, the Tribunal stated that it has not been the policy of tribunals to disregard a claim for house‑rent allowance. The Tribunal then readjusted the dearness allowance payable to the employees, taking into account the increased rent they were forced to pay for housing in Sevalia. After this adjustment, the Tribunal held that a separate order for a house‑rent allowance was unnecessary. It appeared that the industrial tribunal believed that granting a distinct house‑rent allowance would not resolve the problem, and that the practical solution was either to assist the workers in building their own houses or for the company to construct quarters. Accordingly, the Tribunal rejected the employees’ demand for a house‑rent allowance but recommended that the employer undertake building operations. The Labour Appellate Tribunal subsequently reversed this conclusion, adopting a more practical approach by readjusting the dearness allowance so as to provide adequate relief to the employees.

In that context the Court observed that the appellate tribunal had provided adequate relief to the employees. It noted that even when an employer established a factory in a small village such as Sevalia, the appellate tribunal neither accepted the employees’ demand for housing accommodation nor considered it appropriate to require the employer to pay a separate special house‑rent allowance. The tribunal later revisited the same issue in the case of Samastipur Central Sugar Co., Ltd. and Their Workmen (1). While addressing the merits, the Labour Appellate Tribunal accepted the earlier decision of the Appellate Tribunal in Mahomad Rai Akbarali Khan v. The Associated Cement Co. Ltd. and observed that “where the basic wage and dearness allowance are consolidated, house rent at the normal time and the subsequent rise must be presumed to have been taken into account when the total consolidated amount was fixed.” The same principle was applied by the Labour Appellate Tribunal in Messrs. National Carbon Co. (India) Ltd. v. National Carbon Co., Mazdoor Union, Calcutta (3). In that proceeding the tribunal initially directed the employer to pay house‑rent allowance, reasoning that the allowance represented a lesser relief than the free quarters claimed by the employees and that the lesser relief could be granted. However, on examining the evidence, the Labour Appellate Tribunal rejected this view, holding that “provision for free quarters by constructing houses cannot permit of comparison with payment of house rent allowance in money month after month to determine which is greater and which is smaller than the relief of free quarters.” Accordingly, the tribunal concluded that it had no jurisdiction to award house‑rent allowance when the dispute concerned free quarters. This sequence of decisions demonstrates that industrial tribunals have consistently refused to entertain claims for separate housing accommodation or a distinct housing allowance against employers.

The Court further explained that because of this consistent refusal, the tribunals below emphasized that the scheme sanctioned by the Bihar Government created a substantially different situation for Bihar. The issue of housing for industrial labour has also been addressed through various legislative enactments. For workers employed on plantations, the Plantations Labour Act, 1951 (69 of 1951) imposes a duty on every employer to construct and maintain necessary housing for each worker and his family residing on the plantation, subject to the other provisions of the Act. In addition, several states have established Housing Boards to address the broader problem of housing, reflecting a legislative effort to meet the housing needs of industrial labourers.

In its discussion of housing policy, the Court noted that several state statutes were enacted to address the provision of housing for the general public and, in particular, for industrial workers. Those statutes included the Bombay Housing Board Act of 1948 (Bom. 69 of 1948), the Mysore Labour Housing Act of 1949 (Mys. 28 of 1949), the Madhya Pradesh Housing Board Act of 1950 (Madhya Pradesh 43 of 1950), the Hyderabad Labour Housing Act of 1952 (Hyd. 36 of 1952), the Saurashtra Housing Act of 1954 (Saurashtra 32 of 1954) and the Uttar Pradesh Industrial Housing Act of 1955 (U. P. 32 of 1955). The Court explained that each of these enactments represented an effort by the respective State governments to fulfil their responsibility to provide housing accommodation to citizens generally and to industrial labour specifically. The Court further observed that the Planning Commission had examined this housing problem in its report on the Second Five‑Year Plan. Chapter 26 of that report dealt with the general problem of housing, while Chapter 27 dealt with labour policy and programmes. The discussion in those two chapters, the Court said, demonstrated that the shortage of housing could be overcome only through sustained and well‑planned cooperation between the States and industry. The Court recognised that the problem was large and would require a huge expenditure. It noted that the Central Government was seeking the cooperation of industrial employers, offering progressively increasing financial and other assistance through the State governments, in order to meet this challenge. Nevertheless, the Court held that it was evident that industrial tribunals could not at present address the housing demands of individual employees in isolation. In the prevailing economic condition of the nation’s industry, the Court found it imprudent to place an additional burden on employers. Such a burden, the Court warned, might retard industrial development and production and could adversely affect the national economy. Moreover, the Court warned that any increased cost to employers would likely be passed on to consumers, resulting in higher prices, which was undesirable from a national standpoint. The Court acknowledged that the concept of social justice could evolve with rising industrial prosperity and national income, but, given the present state of the national economy and the general financial condition of industry, it was undesirable to impose such an obligation on employers at this time. Accordingly, the Court praised the industrial tribunals for wisely refusing to entertain claims for housing accommodation made by workmen against their employers. In the case before it, the Court observed that the tribunals had not examined the appellant’s financial capacity to meet the additional burden imposed by the award. The tribunals, the Court noted, appeared to have taken the view that because the appellant was bound by the scheme, it was immaterial, if not irrelevant, to inquire whether the appellant could afford the expenses of constructing quarters as directed by the award. The Court found that such a view proceeded

The Court observed that the reasoning of the tribunals was founded on purely theoretical considerations that bore no connection to the actual facts concerning the financial position of the industry or the condition of the national economy. In order to be fair to the tribunals, the Court added that, had the tribunals not adopted an erroneous view regarding the effect of the scheme sanctioned by the Bihar Government, they would not have granted the demand made by the respondent for housing accommodation. The Court further held that, on the merits, the award could not be sustained and therefore it was unnecessary to examine whether the expenditure involved in constructing the quarters would be permissible under the relevant provisions of the Electricity Act. Consequently, the Court concluded that the appeal succeeded and that the award under appeal was set aside. In the circumstances of the case, the Court thought it equitable that each party should bear its own costs. Accordingly, the appeal was allowed.