General Manager, Bhilai Steel Project,... vs Steel Workers' Union, Bhopal And Ors.

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

Court: supreme-court

Case Number: Not extracted

Decision Date: 8 November, 1963

Coram: K.C. Das Gupta, K.N. Wanchoo, P.B. Gajendragadkar

General Manager, Bhilai Steel Project, … vs Steel Workers’ Union, Bhopal and Others, decided on 8 November 1963, Supreme Court of India. Bench: K C Das Gupta, K N Wanchoo, P B Gajendragadkar.

Das Gupta, J. The three appeals before this Court arise from an order of the Industrial Court of Madhya Pradesh. The order of the Industrial Court was itself a reversal of a certification order issued by Mr I B Sanyal, who acted as the Certifying Officer under the Industrial Employment (Standing Orders) Act, 1946, hereinafter referred to as the Central Standing Orders Act. On 6 August 1962 Mr Sanyal issued an order certifying the draft standing orders that had been submitted by the General Manager of the Bhilai Steel Project, Madhya Pradesh. The various trade unions, including the three unions that appear as respondents before this Court, objected to the certification on the ground that the Madhya Pradesh Industrial Workmen (Standing Orders) Act, 1959 governed the industry and therefore Mr Sanyal lacked jurisdiction to certify the orders. Mr Sanyal rejected the objection and proceeded to certify the draft standing orders on 6 August 1962. The Industrial Court of Madhya Pradesh, hearing the unions’ appeal against the certification, held that Mr Sanyal did not have jurisdiction and that the Labour Commissioner of Madhya Pradesh alone was competent to certify the standing orders. Consequently the Industrial Court allowed the unions’ appeals, set aside Mr Sanyal’s certification and declared it void for lack of jurisdiction. The present appeals arise against that decision of the Industrial Court and have been filed after the appellants obtained special leave to appeal to this Court.

It is now undisputed before this Court that when the draft standing orders were originally submitted on 9 June 1960 to the Certifying Officer under the Central Standing Orders Act, the officer did not possess jurisdiction, and that the Labour Commissioner of Madhya Pradesh was the proper authority to certify them. Nevertheless, the appellants have submitted that, long before Mr Sanyal’s certification order, the Central Standing Orders Act had become applicable to the Bhilai Steel industry to the exclusion of the Madhya Pradesh Industrial Employment (Standing Orders) Act, and that therefore the certification could not be said to be without jurisdiction. The Court notes that, if the Certifying Officer under the Central Standing Orders Act had acquired jurisdiction prior to the actual date of certification, the certification could not be treated as void merely because the officer lacked jurisdiction at the time the application was first made. This principle is illustrated in the decision of Municipal Board, Pushkar v State Transport Authority, Rajasthan & Others [[1963] Supp. 2 S.C.R. 373]. The legal position is that an application for certification, though initially invalid because the officer lacked jurisdiction, becomes valid when the officer subsequently acquires jurisdiction. In effect, the application is deemed to have been renewed at the moment jurisdiction is obtained, and because that jurisdiction continued up to the date of certification, the certification itself is then deemed to have been made within jurisdiction and therefore binding.

The Court explained that, to view the situation differently, the application for certification should be treated as having been refreshed at the moment the officer obtained jurisdiction over the matter. Because that jurisdiction persisted until the certification was issued, the certification itself would also be exercised under proper jurisdiction and therefore would be binding. Consequently, the Court identified the issue that needed to be examined: whether, before the certification date of 6 August 1962, the Certifying Officer appointed under the Central Standing Orders Act had acquired the competence to certify the standing orders of the Bhilai Steel Project. The answer to this issue depended on determining which statutory scheme was applicable to the Bhilai Steel Industry on that specific date, that is, whether the Central Standing Orders Act or the Madhya Pradesh Industrial Employment Standing Orders Act governed the industry on 6 August 1962. The Court noted that the Central Act, formally known as the Industrial Employment Standing Orders Act, 1946, had come into force on 23 April 1946. Shortly thereafter, the C.P. & Berar Industrial Disputes & Settlement Act, 1947, was enacted and extended its reach to the entire territory of Madhya Pradesh. Sections 2 to 61 of that Act were brought into operation in all Madhya Pradesh industries, except for those industries specifically excluded by a notification dated 20 November 1947. A subsequent notification dated 22 July 1958 amended the earlier notification, resulting in sections 2 to 61 becoming applicable to the steel industry at Bhilai with effect from 1 August 1958. In the year 1959, the Madhya Pradesh Legislature enacted a separate statute, Act No. XIX of 1959, which dealt with standing‑order matters for industrial workmen. This new Act repealed section 30 of the C.P. & Berar Industrial Disputes & Settlement Act, 1947. Accordingly, from the date the 1959 Act took effect—31 December 1960—section 30 of the earlier Act ceased to operate in Madhya Pradesh. The Court then observed that the certification provisions of Act XIX of 1959 could not be applied to Bhilai because section 1, sub‑section 3 of that Act stipulated that it would apply to any industrial establishment employing twenty or more workmen, or to any class of establishments the State Government might specify, but only subject to a proviso. The proviso expressly stated that the Act would not apply without the consent of the Central Government to an industrial establishment that was under the control of the Central Government, a railway administration, mines, or oil fields. The Court acknowledged that such consent from the Central Government had not been granted for the application of the Madhya Pradesh Act XIX of 1959 to Bhilai. Nevertheless, the Court held that it was not in dispute that the steel industry at Bhilai was an industrial establishment under Central Government control. The Court also noted a faint attempt by counsel appearing before it to argue otherwise, but rejected that suggestion as not having been raised before the Certifying Officer or the Industrial Court.

The Court observed that the respondents, through their counsel, attempted to argue that the Steel Industry at Bhilai was not under the control of the Central Government. The Court noted that this contention had never been raised before Mr. Sanyal or before the Industrial Court. Consequently, the Court declined to allow the respondents to introduce this new argument for the first time at this stage. The Court further pointed out that the notification issued by the Madhya Pradesh Government on 22 July 1958 explicitly stated that the Steel Industry at Bhilai was carried on under the authority of the Central Government. For the purposes of the appeals, the Court considered it reasonable to accept the Madhya Pradesh Government’s statement as correct. Accordingly, the Court concluded that the Bhilai Steel Industry qualified as an industrial establishment under the control of the Central Government within the meaning of the proviso to section 1, sub‑section 3 of Act XIX of 1959. Because the Central Government had not given its consent, the Court held that the 1959 Act could not be applied to the Bhilai Steel Industry. Hence, from 31 December 1960 onward, neither section 30 of the 1947 Act nor Act XIX of 1959 applied to that industry. The Court therefore found that, as of that date, the Bhilai Steel Industry was governed, with respect to standing orders, by the Central Standing Orders Act of 1946. The Court added that this situation continued until 25 November 1961, when Act XIX of 1959 was repealed and replaced by the Madhya Pradesh Act XXVI of 1961, titled the Madhya Pradesh Industrial Establishment Standing Orders Act, 1961. The Court observed that the 1961 Act appeared applicable to the Bhilai Steel Industry because it did not contain a provision analogous to the one in section 1, sub‑section 3 of the 1959 Act. However, the Madhya Pradesh Act XXVI of 1961 was amended in 1962 by the Madhya Pradesh Act 5 of 1962. This amending legislation inserted a proviso into sub‑section 1 of section 2 of the 1961 Act, stipulating that the Act would not apply to an undertaking carried on by or under the authority of the Central Government, a railway administration, a mine, or an oil field. The Court explained that, as a result of this amendment, the 1961 Act, which had been applicable to the Bhilai Steel Industry from 25 November 1961, ceased to apply to that industry from 29 April 1962, the date on which the President gave assent to the amending Act. After that date, the Court held that the legal position reverted to what it had been immediately before the Madhya Pradesh Act XXVI of 1961 came into force; namely, none of the Madhya Pradesh statutes relating to standing orders applied to the Bhilai Steel Industry. Consequently, the Court concluded that the field was open for the Central Standing Orders Act to operate with respect to the Bhilai Steel Industry from the date when the Madhya Pradesh Act V of 1962 came into force.

Madhya Pradesh Act V of 1962 had come into operation. The Court therefore concluded that at some time before the certification order dated 6 August 1962, the Certifying Officer appointed under the Central Government Standing Orders Act had acquired the authority to certify the standing orders applicable to the Bhilai Steel Industry. The Industrial Court had observed that, with respect to the standing orders, the 1947 Act had been repealed by the 1959 Act effective 31 December 1960. The Industrial Court further expressed the view that, because the 1959 Act contained no specific saving provision concerning the notification dated 22 July 1958, the 1947 Act continued to apply to the Bhilai Steel Industry. It held that, in the absence of any later notification superseding the 1958 notice, the earlier notification remained effective for the Bhilai Steel Industry by virtue of section 25 of the Madhya Pradesh General Clauses Act. Relying on that interpretation of section 25, the Industrial Court concluded that the State legislation continued to govern the Bhilai Steel Industry.

The Court is of the opinion that section 25 of the Madhya Pradesh General Clauses Act could not preserve the 1958 notification after the repeal of the 1947 Act. Section 25 provides that when an enactment is repealed and re‑enacted by a Madhya Pradesh Act, any appointment, notification, order, scheme, rule, regulation, form or bye‑law made under the repealed enactment shall, so far as it is not inconsistent with the re‑enacted provisions, continue in force and be deemed to have been made under the new provisions, unless it is superseded by a later instrument. The Court finds it clear that the proviso to section 1, sub‑section 3 of Act XIX of 1959, which re‑enacted the legislation, did not extend to Bhilai, and that the earlier notification was inconsistent with the new law. Consequently, section 25 could not rescue that notification. For the reasons set out, the Court concludes that although on 9 June 1960, when the draft standing orders were presented to the Certifying Officer under the Central Standing Orders Act, the Officer lacked jurisdiction, the Officer had obtained jurisdiction before the certification order of 6 August 1962. Accordingly, the Court sets aside the Industrial Court’s order, directs that the pending appeals raised by the Unions be heard and finally disposed of by the Industrial Court, and remands the matter for consideration of the remaining objections.

The Court applied the applicable law to the matters before it and, after a thorough examination of each objection that had been raised, decided those objections on the basis of their substantive merits rather than on procedural technicalities. Having made that determination, the Court concluded that the relief sought in the appealed applications was justified and consequently ordered that the appeals be allowed. The Court further observed that the circumstances surrounding the dispute were unusual and warranted a distinct approach to costs. In view of those special circumstances, the Court directed that each party should bear its own costs incurred in these proceedings before the Court, and therefore no party was required to pay the costs of the other. Accordingly, the parties were each left to meet their individual legal expenses. In summary, the Court permitted the appeals and, because of the special circumstances, left the costs to be borne individually by the parties. The final order thus affirmed the allowance of the appeals and prescribed that the parties bear their own costs.