The Atlas Cycle Industries Ltd. vs Their Workmen

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

Court: supreme-court

Case Number: Civil Appeal No. 188 of 1961

Decision Date: 08/02/1962

Coram: Bhuvneshwar P. Sinha, N. Rajagopala Ayyangar, J.R. Mudholkar, T.L. Venkatram, K. Subbarao

In this case the matter was styled The Atlas Cycle Industries, Ltd. versus Their Workmen and was decided on 8 February 1962 by the Supreme Court of India. The judgment was authored by a bench comprising Bhuvneshwar P. Sinha, N. Rajagopala Ayyangar and J. R. Mudholkar. The petitioner was identified as The Atlas Cycle Industries, Ltd., Sonepat and the respondent as Their Workmen. The date of the judgment was recorded as 08/02/1962 and the bench was listed as Ayyar, T. L. Venkatarama, with the same names reiterated in the heading. The Chief Justice on the bench was Sinha, Bhuvneshwar P., and the other judges were Subbarao, K., Ayyangar, N. Rajagopala, and Mudholkar, J. R. The citation for this decision was recorded as 1962 AIR 1100 and 1962 SCR Supl. (3) 89, with citator information noted as R 1992 SC1277 (37, 91). The issues involved the Industrial Dispute‑Constitution of Tribunal, the qualifications of members – specifically the meaning of “qualified for appointment as a Judge of a High Court” – the validity of a reference, and the Industrial Disputes (Punjab Amendment) Act, 1957 (Punjab 8 of 1957), section 3, together with the Industrial Disputes Act, 1947 (14 of 1947), section 7(3)(c), and Articles 14, 165 and 217 of the Constitution of India. The headnote stated that on 14 February 1953 the Government of Punjab referred certain disputes between the appellant company and its workmen to an Industrial Tribunal that had been constituted on 29 August 1953 by a notification issued under section 7 of the Industrial Disputes Act, 1947, whereby a person identified only as G, an advocate, was appointed as the Industrial Tribunal for Punjab. While the reference was pending, the Act was amended; the amendment repealed section 7 of the principal Act and replaced it with sections 7A, 7B and 7C, and introduced section 30 as a saving clause for proceedings pending before the Tribunal created under the original Act. On 19 April 1957 the Punjab Government issued a notification under section 7 of the Act and section 30 of the Amendment Act extending the life of the Tribunal that had been created under the repealed section 7 and also extending G’s term as a member. On the same day another notification was issued under section 7A of the Act constituting a new Tribunal and appointing G as the Presiding Officer of that Tribunal until 3 June 1957. Section 70(b) fixed the retirement age for Tribunal members at sixty‑five, meaning that G would have been required to retire by 3 June 1957. The Punjab Government subsequently enacted the Industrial Disputes (Punjab Amendment) Act, 1957, which raised the retirement age for members to sixty‑seven years. After G retired on 3 June 1959, the Punjab Government issued a further notification appointing another individual as the Presiding Officer of the Industrial Tribunal. The appellant challenged the legality of the reference on two principal grounds: first, that G was not qualified to be appointed to the Tribunal under section 7(3)(c) of the Act because he was over sixty years of age, rendering the reference dated 14 February 1955 incompetent; and second, that the Industrial Disputes (Punjab Amendment) Act, 1937, was enacted to benefit a single individual, G, and therefore violated Article 14 of the Constitution of India. The Court held that section 7(3)(c) of the Industrial Disputes Act, 1947, did not impose any age qualification for appointment, and consequently G’s appointment on 29 August 1953 was valid under that provision.

The Court held that the Industrial Disputes Act of 1947 did not impose any age‑based qualification for a person to be appointed under section 7. Accordingly, the appointment of the individual referred to as G on 29 August 1953 complied with the requirements of that provision. In interpreting article 217 of the Constitution, the Court explained that the age limit mentioned in that article is a condition attached to the length of the office, not a qualification for the initial appointment. The Court supported this view by referring to the decisions in G D Karkare v. T L Shevde, I L R [1952] Nag 409 and Prabhudayal v. State of Punjab, A I R 1959 Punjab 460, which were approved as authority for the principle.

The Court further ruled that the Industrial Disputes (Punjab Amendment) Act of 1957 did not infringe article 14 of the Constitution. Although the motive for enacting the amendment might have been to benefit a particular individual, the statute was of general application and therefore could not be characterized as discriminatory. The earlier case of Ameerunissa v. Mehboob, [1953] S C R 404, was distinguished because it did not involve a law of general operation. The judgment that follows relates to Civil Appeal No. 188 of 1961, filed by special leave against the order dated 11 September 1959 of the Industrial Tribunal, Punjab, Patiala, in Reference No. 30 of 1957. Counsel for the appellants were named, and counsel for the respondents were also identified. The judgment was delivered on 8 February 1962 by Justice Venkitarama Aiyar.

This appeal challenged the Tribunal’s order that had dismissed certain preliminary objections to the Tribunal’s jurisdiction. The factual background is that on 14 February 1955 the Government of Punjab, invoking section 10(1)(c) of the Industrial Disputes Act, 1947 (hereinafter “the Act”), referred a set of disputes between the appellant and the respondents to the Industrial Tribunal, Punjab, Jullundur, for determination. The reference was recorded as Reference No. 3 of 1955. The Tribunal in question had been constituted on 29 August 1953 by a notification issued by the Punjab Government, which read in part: “In exercise of the powers conferred under section 7 of the Industrial Disputes Act, 1947 (Act XIV of 1947), the Governor of Punjab, in consultation with the Punjab High Court, is pleased to appoint Shri Avtar Narain Gujral, Advocate, as Industrial Tribunal for Punjab.” The principal contention raised by the appellant was that Shri A N Gujral was not qualified under section 7(3)(c) of the Act because he was sixty years old on the date of appointment, having been born on 4 June 1892. The appellant argued that, because of this alleged lack of qualification, the Tribunal had never been validly constituted and consequently the reference made on 14 February 1955 to that body was null and void. While Reference No. 3 of 1955 was pending before the Tribunal, the Industrial Disputes Act, 1947, was amended by the Industrial Dispute (Amendment and Miscellaneous Provisions) Act, 1956 (Act No. 36 of 1956), which came into force on 10 March 1957, thereby repealing section 7 of the principal Act and replacing it with sections 7A, 7B, and 7C.

The Amendment Act, which became operative on 10 March 1957, repealed section 7 of the Industrial Disputes Act, 1947 and substituted the newly created sections 7A, 7B and 7C. Section 30 of the Amendment Act contained a saving provision that preserved any proceedings relating to an industrial dispute that were pending before a tribunal that had been constituted under the original Act. In reliance upon that saving clause, the Government of Punjab issued a notification on 19 April 1957, numbered 4194‑0‑Lab‑57/652‑RA, which read in full: “In continuation of Punjab Government Memorandum No. 3078‑C‑Lab‑57/4224, dated 1 March 1957, and in exercise of the powers conferred by section 7 of the Industrial Disputes Act, 1947, as in force before the commencement of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956, read with Section 30 of the latter Act and all other powers enabling him in this behalf, the Governor of Punjab is pleased to extend (a) the period for which the Industrial Tribunal, Punjab, Jullundur, is constituted, and (b) the term of appointment of the Role Member thereof, up to the last day of October 1957, or such date as the proceedings in relation to industrial disputes pending in the said Tribunal immediately before the 10th March 1957 are disposed of, whichever is earlier.” In effect, this notification prolonged the existence of the tribunal that had been created under the now‑repealed section 7 and also continued the appointment of Shri A. N. Gujral as a member of that tribunal for the period specified. The appellant argued that section 30 of Act 36 of 1956 does not empower the continuation of a member’s appointment to a tribunal constituted under the previous section 7, and therefore the portion of the notification that extended Shri Gujral’s term beyond the expiry of his original appointment on 10 March 1957 was unauthorised and void. On the same day, 19 April 1957, the Punjab Government issued another notification, this time under the newly inserted section 7A, numbered 4194‑C‑Lab‑57/66t‑RA. That notification stated: “In exercise of the powers conferred by Section 7A of the Industrial Disputes Act, 1917, as inserted by section 4 of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956, (No. 36 of 1956), and all other powers enabling him in this behalf, the Governor of Punjab is pleased to constitute an Industrial Tribunal with Headquarters at Jullundur and to appoint Shri Avtar Narain Gujral, B.A., LL.B., as its Presiding Officer with effect from the date of the publication of this notification in the Official Gazette up to 3 June 1957.” This second notification both created a new Industrial Tribunal at Jullundur and appointed Shri A. N. Gujral as its presiding officer until 3 June 1957. The date of 3 June 1957 was significant because, under section 7C(b) introduced by the 1956 Amendment Act, the retirement age for tribunal members was fixed at sixty‑five years, which meant that Shri Gujral would be required to retire on that date.

The retirement age for a member of the Industrial Tribunal had been fixed at sixty‑five years, which meant that Shri A. N. Gujral was required to retire on 3 June 1957. At that point the Punjab Legislature enacted two statutes that are central to the present dispute. The first was the Industrial Disputes (Punjab Amendment) Act 8 of 1957. Section 3 of that Act altered section 7C(b) of the principal legislation by replacing the words “he has attained the age of sixty‑five years” with the words “he has attained the age of sixty‑seven years”. Consequently, the statutory retirement age was raised to sixty‑seven years. By operation of this amendment Shri Gujral’s tenure could be extended from 3 June 1957 to 3 June 1959, and the extension was in fact effected through a series of notifications issued thereafter. The appellant argues that this amendment was drafted to benefit a single individual, Shri Gujral, and therefore violates Article 14 of the Constitution. According to the appellant, the effect of the amendment is that after 3 June 1957 no person was validly holding the office of Member of the Industrial Tribunal.

The second statute enacted by the Punjab Government was the Industrial Disputes (Amendment and Miscellaneous Provisions) (Punjab Amendment) Act 9 of 1957. That Act introduced a new subsection (2) to section 30 of the 1956 Amendment Act, granting the State Government power to re‑constitute any Industrial Tribunal established under the Industrial Disputes Act, 1947, where such tribunals had ceased to exist but still had pending matters. Returning to the tribunal that had been created under the repealed section 7 of the Act, a notification dated 19 April 1957, issued under section 30 of the 1956 Amendment Act, had kept that tribunal operative until the pending matters were disposed of or until 31 October 1957, whichever occurred first. The anticipated completion of those proceedings by the stipulated date did not occur. Accordingly, invoking section 33B(1) of the principal Act and the amended section 30 of the 1956 Amendment Act, the Punjab Government issued a notification on 31 October 1957 transferring the matters pending before the old tribunal (constituted under section 7) to the new tribunal that had been constituted on 19 April 1957 under section 7A. Under that notification Reference No. 3 of 1955 was transferred to the new tribunal and renumbered as Reference 30 of 1957. The appellant contests this transfer on two grounds: first, that the tribunal to which the matters were transferred was not validly constituted and therefore lacked legal existence; and second, that the provision introduced by the Punjab Act 9 of 1957 does not operate retrospectively, so that the pending proceedings as of 10 March 1957 could not lawfully be transferred to the new tribunal.

In this case the reference numbered 30 of 1957 remained pending until 3 June 1959, when the then presiding officer, Shri A.N. Gujral, retired. Following his retirement the Government of Punjab issued a notification appointing Sri Kesho Ram Passey, a retired judge of the Punjab High Court, as the new presiding officer of the Industrial Tribunal in Jullundur. The appellant filed an application on 4 September 1959 in which several preliminary objections to the hearing of the reference were raised. The Tribunal, by an order dated 11 September 1959, rejected those objections and scheduled the matter for a substantive hearing on its merits. The correctness of that order is the subject of the present appeal. Although many objections were raised concerning the jurisdiction of the Tribunal to entertain the reference, the appellant advanced three principal contentions. First, the appellant alleged that Shri A.N. Gujral was not qualified for appointment to the Tribunal under section 7(3)(c) of the Industrial Disputes Act and therefore the reference dated 14 February 1955 was invalid. Second, the appellant contended that the Punjab Government’s notification of 19 April 1957 appointing Shri Gujral as a member of the Industrial Tribunal in Jullundur, together with subsequent notifications extending his tenure, were unauthorized and therefore ineffective. Third, the appellant argued that the Punjab Government’s notification of 31 October 1957, which transferred the proceedings pending before the old Tribunal to the new Tribunal, was inoperative because the Punjab Act 8 of 1957 was void as it contravened article 14 of the Constitution and because the appointment of Shri Gujral under that Act was likewise void; additionally, the appellant claimed that section 30(2) of the Punjab Act 9 of 1957, which purported to permit such a transfer, did not authorize the transfer of proceedings that were pending on or before 10 March 1957.

The Court first addressed the contention that Shri A.N. Gujral was not eligible for appointment to the Tribunal on 29 August 1953 on the ground that he was over sixty years of age. The issue required interpreting the language of section 7(3)(c) of the Act. Section 7, as relevant, provides that the appropriate Government may constitute one or more Industrial Tribunals for adjudicating industrial disputes. It further states that a Tribunal shall consist of a number of independent members as the Government deems fit, and where the Tribunal has two or more members, one shall be appointed as Chairman. Where the Tribunal consists of a single member, that member, or where it consists of two or more members, the Chairman, must be a person who (a) is or has been a Judge of a High Court; or (b) is or has been a District Judge; or (c) is qualified for appointment as a Judge of a High Court, subject to the condition that no appointment under this subsection shall be made of any person qualified under clause (a) or (b) except with the approval of the High Court of the State in which the Tribunal has or is intended to have its usual seat. The appellant relied on the fact that Shri Gujral was appointed under subsection (c) in his capacity as an Advocate and questioned whether he satisfied the qualification of being eligible for appointment as a Judge of a High Court. The relevant constitutional provision governing such qualification is article 217, which provides that every Judge of a High Court shall be appointed by the President after consultation with the Chief Justice of India, the Governor of the State, and, in the case of appointment of a Judge other than the Chief Justice, the Chief Justice of the High Court. The Court examined these provisions to determine whether the appellant’s arguments regarding Shri Gujral’s qualification and the validity of the appointments could succeed.

The provision further provides that no appointment may be made to a Tribunal under this subsection of any person who does not satisfy either clause (a) or clause (b), and that even when a person does satisfy one of those clauses, such an appointment may be effected only after obtaining the approval of the High Court of the State in which the Tribunal is presently situated or is intended to have its regular seat. In the present matter Shri A. N. Gujral was appointed to a Tribunal pursuant to section 7(3)(c) on the basis that he was an Advocate. The essential question that arose for consideration was whether, at the time of his appointment, Shri Gujral was in fact qualified for appointment as a Judge of a High Court under the definition contained in clause (c). The constitutional provision relevant to this issue is Article 217, which, for the purposes of this case, is reproduced as follows: “217. (1) Every Judge of a High Court shall be appointed by the President by warrant under his hand and seal after consultation with the Chief Justice of India, the Governor of the State, and, in the case of appointment of a Judge other than the Chief Justice, the Chief Justice of the High Court, and shall hold office … until he attains the age of sixty years; Provided that … (2) A person shall not be qualified for appointment as a Judge of a High Court unless he is a citizen of India and—(a) has for at least ten years held a judicial office in the territory of India, or (b) has for at least ten years been an advocate of a High Court or of two or more such Courts in succession. Explanation …” While clause (2) of Article 217 enumerates the substantive qualifications required for appointment as a Judge, clause (1) sets the maximum age at which a Judge may continue to hold office, namely sixty years. The entire controversy before the Court concerned the relationship between these two sub‑clauses. Counsel for the appellant, Mr Pathak, argued that although clause (1) expressly refers to the termination of a Judge’s office, it in substance imposes an additional qualification for appointment, because appointing a person who is already over sixty would be inconsistent with the requirement of clause (1) even if the individual satisfied all the conditions of clause (2). Accordingly, Mr Pathak maintained that an implicit qualification existed whereby a person must not have reached the age of sixty at the time of appointment. The Court agreed that Article 217(1) contains an implicit prohibition against appointing a person who has already attained the age of sixty. However, the Court held that this prohibition should be understood as a condition governing the tenure of the office rather than as a qualification pertaining to the personal attributes of a prospective appointee. In other words, the age limit is a restriction on the continuance of the appointment, distinct from the substantive qualifications of experience and ability laid down in clause (2). Thus, the Court concluded that the age provision operates as a condition attached to the duration of service, not as an eligibility criterion for appointment.

In this case the Court observed that Article 217 clause 1 deals with the termination of a judicial office and, by its very form, speaks only of the ending of the tenure. Accordingly it can be read only as creating, by implication, a limitation on the making of an appointment, not as setting a qualification for the person to be appointed. By contrast Article 217 clause 2 expressly enumerates the qualifications required of a person who may be appointed, such as having previously held a judicial post or having practiced as an advocate for at least ten years. The Court therefore held that, when the provision is properly construed, the rule concerning age functions as a condition attached to the length of the office rather than as a qualification for appointment. Counsel for the petitioner, Mr Pathak, also relied on Articles 224 and 376 in support of the contention that age should be treated as an implied qualification under Article 217. The Court examined Article 224, which governs the appointment of additional and acting judges. Sub‑clauses (1) and (2) of that article require that a person appointed as an additional or acting judge by the President be a duly qualified person, but they contain no reference to the age of the appointee. Only sub‑clause (3) of Article 224 states that no person appointed as an additional or acting judge of a High Court shall continue in office after attaining the age of sixty years. The Court noted that this provision is framed on the same lines as Article 217 and does not advance the argument that age is a qualification. The Court further examined Article 376, which deals with persons who were judges of the High Courts of the States listed in Part I of the First Schedule at the commencement of the Constitution. That article provides that such persons shall become judges of the High Courts under the Constitution and contains a special clause stating that, notwithstanding anything in clauses (1) and (2) of Article 217 but subject to the proviso to clause (1) of that article, they may continue to hold office until the expiration of a period to be fixed by the President. The Court found no language in Article 376 that would support the view that age is a qualification. The Court then turned to the more pertinent provision, Article 165(1), which provides that the Governor of each State shall appoint a person who is qualified to be appointed as a judge of a High Court to be the Advocate‑General for the State. The question arose whether, under this article, a person who has reached the age of sixty could be appointed as Advocate‑General. If age were to be regarded as a qualification, such an appointment would be impossible. This issue had previously been decided in G D Karkare v T L Shevde, where a judge who had retired upon attaining the age of sixty was appointed as Advocate‑General, and the Court was called upon to consider the validity of that appointment.

In the proceeding, the appointment was contested on the basis that the individual was disqualified solely because of his age. The learned judges of the Nagpur High Court examined clause (1) of Article 217 of the Constitution and concluded that the provision merely fixed the length of a High Court judge’s tenure and could not be interpreted as setting a qualification for appointment, a view supported by the citation (1) I. L.R. [1952] Nas. 409. The appellant argued that the appointment of an Advocate‑General under Article 165 might be governed by a different principle than the appointment of a judge under Article 217, pointing to the specific language of Article 165(3) which states that the Advocate‑General holds office at the pleasure of the appointing authority, whereas a judge holds office during good behaviour. The court observed that this distinction concerned only the power to terminate the appointment and did not affect the qualifications required for the person to be appointed. Accordingly, the court affirmed the interpretation given to Article 217 in G. D. Karkare’s case (1). While the meaning of Article 217 featured prominently in the arguments, the court emphasized that the principal issue in the appeal was the interpretation of section 7(3)(c) of the Act, which must be understood in its own context. Section 7(3)(a) authorises the appointment of a sitting or retired High Court judge as a member of the Tribunal, and the provision makes no reference to age as a qualification, the statutory retirement age for a High Court judge being sixty. Similarly, sub‑clause (b) permits the appointment of a district judge, whether serving or retired, as a member, and a retired district judge older than sixty would nevertheless be eligible under this sub‑clause. Consequently, age does not constitute a qualification under sub‑clauses (a) and (b). It would therefore be proper to interpret sub‑clause (c) as not imposing any age‑based qualification. The appellant contended, however, that sub‑clauses (a) and (b) constitute a distinct group referring to judicial officers, whereas clause (c) pertains exclusively to advocates, a separate class, and therefore the age considerations applicable to (a) and (b) should not extend to (c). The court acknowledged the existence of a distinction between the two groups, as noted in (1) I. L.R. [1952] Nag. 409, but questioned whether that distinction justifiably related to the age issue. The court reasoned that if a retired judge of sixty years of age can suitably serve as a member of the Tribunal under section 7, then an advocate of the same age should likewise be capable of performing the same function. In the court’s view, there was no basis for implying an age qualification in section 7(3)(c) that does not exist in sections 7(3)(a) and (b). This question formed the crux of the court’s analysis.

In this case, the Court noted that the question had previously been examined by a Bench of the Punjab High Court in Prabhudayal v. State of Punjab (1). In that proceeding, the validity of the appointment of Shri A. N. Gujral under the notification dated 29 August 1953 – the very point now under dispute – was challenged on the ground that, because he was over sixty years old on that date, he could not be appointed under section 7(3)(c). The Punjab High Court, relying on the decision in G. D. Karkare’s case (2), held that the age prescription in Article 217(1) was not a qualification for the office of a Judge under Article 217(2), and consequently a person who had attained an age of more than sixty years remained qualified for appointment under section 7(3)(c). The appellant placed reliance on the terms of section 7C, which had been substituted for section 7 by Amendment Act 36 of 1956, arguing that this provision supported the contention that age was a qualification for appointment under section 7(3)(c). Section 7C reads as follows: “No person shall be appointed to, or continue in, the office of the presiding officer of a Labour Court, Tribunal or National Tribunal, if – (a) he is not an independent pet‑son or (1) A. 1. R (1959) Pun. 460. (2) 1. 1 R. [1952] Nag. 409. (b) he has attained the age of sixty‑five years.” The marginal note to that section, also relied upon, states: “Disqualifications for the presiding officers of Labour Courts, Tribunals and National Tribunals.” The appellant argued that by prescribing age as a qualification in section 7C, the Legislature was merely making explicit what was already implicit in section 7(3)(c), and therefore the age qualification should also be read into section 7(3)(c). The Court rejected this inference, observing that the insertion of an age qualification in section 7C was more consistent with a legislative intention to add, in view of the operation of the repealed section 7, a new provision specifying a retirement age for Members. Accordingly, the Court agreed with the Punjab High Court’s decision in Prabhudayal’s case (1) and held that section 7(3)(c) does not import any age‑based qualification for the person to be appointed, and that the appointment of Shri A. N. Gujral on 29 August 1953 was valid under section 7(3)(c). The appellant’s next contention was that the notification dated 19 April 1957, which appointed Shri A. N. Gujral as a Member of the Tribunal pursuant to section 30 of Amendment Act 36 of 1956, was not authorised by the terms of that section and therefore no validly constituted Tribunal existed from that date. Section 30 provides: “Savings as to proceedings pending before Tribunals: If immediately before the commencement of this Act there is pending any proceeding in relation to an industrial dispute before a”

In this case the Court observed that the Tribunal had been constituted under the Industrial Disputes Act, 1947, as recorded in A.I.R. [1959] Punj 460, and that, although the Act had subsequently been passed, the dispute could continue to be adjudicated and the proceeding could be disposed of by that Tribunal as if the new Act had never been enacted. The first contention raised before the Court was that section 7, under which Shri A.N. Gujral had been appointed to the Tribunal, was repealed on 10 March 1957 and that consequently the notification dated 19 April 1957 appointing him as a Member of the Tribunal was void. The Court found no merit in this contention. It noted that section 30 expressly provides for the life of the Tribunal to be extended for the period specified therein, and that clause necessarily confers a power to continue Shri Gujral’s appointment. Moreover, in view of the Court’s earlier decision on point 3, the objection was deemed to be of no practical significance.

The Court then addressed the third contention, namely that the transfer of the proceedings pending before the old Tribunal to the new Tribunal by the notification dated 31 October 1957 was invalid and inoperative. Two grounds were advanced in support of this contention. The first ground alleged that Shri Gujral attained the age of sixty‑five on 4 June 1957, which would have caused his term to expire under section 7C, and that the Punjab Legislature subsequently enacted Act 8 of 1957, raising the retirement age under section 70(b) from sixty‑five to sixty‑seven for the purpose of retaining Shri Gujral in office. The legislation came into force on 3 June 1957, and the petitioners contended that it violated article 14 because it was intended to benefit a particular individual, citing the decision in Ameeroonissa v. Mehboob. The Court rejected this submission, observing that the cited decision concerned legislation affecting a specific estate and was struck down for singling out individuals, whereas Act 8 of 1957 applied generally to all persons holding the office under the relevant section. Even if the amendment was prompted by Shri Gujral’s impending retirement, such motive does not render the law discriminatory or inconsistent with article 14. The second ground challenged the competency of the transfer order under section 30(2) of the Amendment Act 36 of 1956, as further amended by Punjab Act 9 of 1957. Section 30(2) provides: “If immediately …”. The Court noted that this provision was intended to enable the continuation of pending disputes before a reconstituted Tribunal, and therefore the transfer was within the statutory authority.

In this appeal the Court considered the wording of section 30(2) of the amendment legislation, which provides that “If immediately before the commencement of this Act there was pending any proceeding in relation to an industrial dispute before a Tribunal constituted under the Industrial Disputes Act, 1947, as in force before such commencement and such proceeding could riot be disposed of by that Tribunal due to the Tribunal having come to an end on the expiry of the period for which it was constituted, the State Government may reconstitute that Tribunal for adjudicating that dispute and disposing of that proceeding after such commencement as if this Act had not bee n passed, and the proceeding may be continued by that Tribunal from the, stage at which it was left.” The petitioners put forward the contention that this provision did not operate retrospectively and therefore any dispute that was still pending before the old Tribunal on 10 March 1957 could not be transferred to the newly constituted Tribunal under the terms of the section. The Court examined that contention and held it to be clearly untenable. It observed that the whole object of section 30(2) was to provide for the hearing of disputes that were already pending before the old Tribunal, and that the language of the provision expressly contemplated that the new Tribunal could take over those cases as if the amendment had never been enacted. Consequently, the Court concluded that the provision must be given a retrospective effect. On that basis the Court rejected the petitioners’ argument, affirmed that the repeal of the earlier scheme could not succeed, and dismissed the appeal with costs. The appeal was therefore dismissed and the costs were awarded to the State.