General Manager, Bhilai Steelproject, Bhilai vs. Steelworkers' Union, Bhopal and 0 Rs

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

Court: Supreme Court of India

Case Number: Civil Appeals Nos. 764 to 766 of 1963

Decision Date: 08/11/1963

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

In this matter the Court recorded that the petition was filed by the General Manager of the Bhilai Steel Project, Bhilai, who sought certification of draft standing orders. The respondents were the Steelworkers’ Union, Bhopal, and a monetary sum of zero rupees. The judgment was delivered on 8 November 1963 by a Bench consisting of Justice K.C. Das Gupta, Justice P.B. Gajendragadkar and Justice K.N. Wanchoo. The case was cited as 1964 AIR 1333 and 1964 SCR (5) 354. The statutory provisions relevant to the dispute included the Industrial Employment (Standing Orders) Act, 1946; the Madhya Pradesh Industrial Workmen (Standing Orders) Acts of 1959, 1961, 1962 and the Madhya Pradesh General Clauses Act, 1958, section 25; as well as the Central Provinces and Berar Industrial Disputes and Settlement Act, 1947. The petitioners submitted the draft standing orders to the Certifying Officer on 9 June 1960 under the Central Standing Orders Act. The respondents objected, asserting that the Certifying Officer lacked jurisdiction because the Madhya Pradesh Industrial Workmen (Standing Orders) Act, 1959 governed the industry. Despite the objection, the Certifying Officer certified the draft standing orders on 6 August 1962. The respondents appealed this certification to the Industrial Court of Madhya Pradesh, which upheld the objection and declared the certification void for lack of jurisdiction. The petitioners then obtained special leave to appeal to the Supreme Court. The Court noted that although the Certifying Officer did not have jurisdiction at the time of the original submission on 9 June 1960, jurisdiction was acquired before the certification order was passed on 6 August 1962. Consequently, the Court held that the certification could not be declared void merely because jurisdiction was absent at the time of filing, and that the application should be treated as renewed once jurisdiction was obtained, rendering the certification valid and binding. The Court relied on the precedent set in Municipal Board, Pushkar v. State Transport Authority, Rajasthan, [1963] Supp. 2 SCR 373.

The Court further identified the parties appearing before it. Counsel for the appellants included senior counsel representing the General Manager and additional counsel for the appellants. Counsel for respondent No. 3 was also listed, as were counsel for respondent No. 1. The appeal numbers were 764 to 766 of 1963, filed as special leave appeals from the order dated 16 November 1962 of the Industrial Court of Madhya Pradesh at Indore, corresponding to appeals numbered 2/E.S.O./1962, 3/E.S.O./1962 and 4/E.S.O./1962 respectively. The judgment concluded that the certification order was within jurisdiction and therefore remained effective, overturning the Industrial Court’s declaration of voidness.

The Court noted that the three appeals before it challenged an order issued by the Industrial Court of Madhya Pradesh, which itself had reviewed a certification order dated 6 August 1962 made by Mr I B Sanyal in his capacity as Certifying Officer under the Industrial Employment (Standing Orders) Act, 1946, a statute the Court referred to as the Central Standing Orders Act. The certification order of 6 August 1962 recorded that Mr Sanyal had formally certified the draft standing orders that had been submitted by the General Manager of the Bhilai Steel Project, Madhya Pradesh. The unions involved, including the three respondents presently before the Court, raised an objection contending that Mr Sanyal lacked the authority to certify the standing orders because the Madhya Pradesh Industrial Workmen (Standing Orders) Act, 1959 governed the industry and therefore the Central Standing Orders Act was inapplicable. Despite this objection, Mr Sanyal rejected the challenge and proceeded to certify the draft standing orders on the stated date. The Industrial Court of Madhya Pradesh, hearing the unions’ appeal against the certification, concluded that Mr Sanyal was without jurisdiction and held that the competent authority for certification was the Labour Commissioner of Madhya Pradesh. Acting on that conclusion, the Industrial Court allowed the unions’ appeals, declared the certification order void for want of jurisdiction, and set aside the Certifying Officer’s order. The present appeals arise against that decision, having been filed after the parties obtained special leave from this Court. The Court observed that it was no longer contested that when the draft standing orders were initially presented to the Certifying Officer on 9 June 1960, the Officer did not possess jurisdiction under the Central Standing Orders Act and that the Labour Commissioner of Madhya Pradesh was the proper certifying authority at that time. Nevertheless, the parties argued before this Court that prior to Mr Sanyal’s certification on 6 August 1962, the Central Standing Orders Act had become the sole governing legislation for the industry, rendering the Madhya Pradesh Industrial Employment (Standing Orders) Act inapplicable and consequently bestowing jurisdiction upon Mr Sanyal. The Court affirmed that if the Certifying Officer had acquired jurisdiction under the Central Standing Orders Act before the date of certification, the certification could not be deemed void merely because the officer lacked jurisdiction at the time the application was originally filed. The Court cited Municipal Board, Pushkar v State Transport Authority, Rajasthan & Others, noting that the law holds that an application for certification, though initially invalid due to lack of jurisdiction, becomes valid once the officer obtains the requisite jurisdiction. In other words, the application is treated as renewed at the moment jurisdiction is acquired, and if such jurisdiction continues through the date of certification, the certification itself is exercised with proper authority and is binding. The question, therefore, turned on whether the Certifying Officer had become competent under the Central Standing Orders Act before the certification date of 6 August 1962.

The matter that required examination was 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 Court explained that answering this issue depended on determining which statutory scheme was applicable to the Bhilai Steel Industry on that specific date, namely whether the Central Standing Orders Act or the Madhya Pradesh Industrial Employment Standing Orders Act governed the enterprise at that time. The Central legislation, identified as the Industrial Employment Standing Orders Act of 1946, had originally become operative on 23 April 1946. Shortly thereafter, the Central Provinces and Berar Industrial Disputes and Settlement Act of 1947 was enacted and extended its operation throughout Madhya Pradesh. Under that Act, sections 2 to 61 were brought into force for all industries in Madhya Pradesh, except for those industries that were expressly excluded by a notification dated 20 November 1947. A subsequent notification issued on 22 July 1958 amended the earlier notification, thereby making sections 2 to 61 applicable to the Bhilai Steel Industry with effect from 1 August 1958. In the year 1959, the Madhya Pradesh Legislature enacted a distinct statute, designated as Act XIX of 1959, which dealt with matters concerning standing orders for industrial workmen. That Act expressly repealed section 30 of the Central Provinces and Berar Industrial Disputes and Settlement Act of 1947. Consequently, from the date when Act XIX of 1959 came into force—31 December 1960—section 30 of the 1947 Act ceased to have any force in Madhya Pradesh. Moreover, the certification provisions contained in Act XIX of 1959 were held not to apply to Bhilai because section 1, sub‑section 3 of that Act stipulated that it would apply to every industrial establishment employing twenty or more workmen, or to any other class of establishments as specified by the State Government, but only subject to a proviso stating: “Provided that it shall not apply except with the consent of the Central Government to an industrial establishment under the control of the Central Government or a Railway Administration or mines or oil‑fields.” The Court observed that such consent from the Central Government had not been granted for the application of Act XIX of 1959 to Bhilai. At the same time, the Court noted that there was no dispute before it that the Bhilai Steel Industry was an industrial establishment under the control of the Central Government. The respondents’ counsel had made a weak attempt to argue that the Bhilai Steel Industry was not under Central Government control, but that argument had not been raised before either the Certifying Officer, Mr Sanyal, or the Industrial Court. Accordingly, the Court declined to allow the respondents to introduce that point for the first time in these proceedings.

It may be noted that the notification issued by the Government of Madhya Pradesh on 22 July 1958 expressly declared that the steel industry at Bhilai was being carried on under the authority of the Central Government. For the purposes of the present appeals, the Court considered it reasonable to assume that the statement made in that notification was correct. Consequently, 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 provisions of that Act could not be applied to the Bhilai steel industry. Accordingly, with effect from 31 December 1960, neither section 30 of the 1947 Act nor Act XIX of 1959 applied to the Bhilai steel industry.

The Court then observed that, from that date onward, the matters relating to standing orders for the Bhilai steel industry were governed by the Central Standing Orders Act of 1946. This legal position remained in force until 25 November 1961, when Act XIX of 1959 was repealed and replaced by the Madhya Pradesh Act XXVI of 1961, known as the Madhya Pradesh Industrial Establishment Standing Orders Act, 1961. The Court found that the 1961 Act was applicable to the Bhilai steel industry because it contained no provision resembling the one in section 1, sub‑section 3 of the 1959 Act that would have excluded establishments under Central Government control.

Subsequently, the Madhya Pradesh Act XXVI of 1961 was amended in 1962 by the Madhya Pradesh Act 5 of 1962. The amendment inserted a new clause into sub‑section 1 of section 2 of the 1961 Act, stating: “Provided that it shall not apply to an undertaking carried on by or under the authority of the Central Government or a railway administration or a mine or an oil field.” The effect of this amendment was that the 1961 Act, which had become applicable to the Bhilai steel industry on 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 29 April 1962, the legal situation 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 concerning standing orders applied to the Bhilai steel industry. Consequently, the field was open for the Central Standing Orders Act to operate with respect to the Bhilai steel industry from the date on which the Madhya Pradesh Act V of 1962 came into force. The Court therefore concluded that, at some time before 6 August 1962, when the order of certification was issued, the Certifying Officer appointed under the Central Government Standing Orders Act had acquired the competence to certify the standing orders of the Bhilai steel industry.

In this case the Court observed that the legislation governing standing orders had been altered when the 1947 Act was repealed by the 1959 Act with effect from 31 December 1960. The Court noted that the 1959 Act contained no specific saving provision concerning the notification issued on 22 July 1958. Consequently, the Court held that, in the absence of a superseding notification, the 1947 Act continued to apply to the Bhilai Steel Industry and that the earlier notification remained effective under section 25 of the Madhya Pradesh General Clauses Act. Relying on that interpretation of section 25, the Court initially concluded that the State Act continued to be applicable to the Bhilai Steel Industry.

Upon further consideration, the Court determined 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 any enactment is repealed and reenacted by a Madhya Pradesh Act, any appointment, notification, order, scheme, rule, regulation, form or bye‑law made under the repealed enactment shall, unless inconsistent with the re‑enacted provisions, continue in force and be deemed to have been made under the new provisions, until it is superseded by a subsequent instrument made under the re‑enacted provisions. The Court found that the proviso to section 1, sub‑section 3 of Act XIX of 1959—by which the new enactment was deemed to be re‑enacted legislation—did not apply to Bhilai, and that the 1958 notification was expressly inconsistent with the new legislation. Accordingly, the Court held that section 25 offered no protection for the notification, and it could not be saved.

Based on that reasoning, the Court concluded that when the draft standing orders were submitted to the Certifying Officer under the Central Standing Orders Act on 9 June 1960, the Officer lacked jurisdiction to certify them. However, the Court found that the Officer had acquired jurisdiction before 6 August 1962, the date on which he issued the order certifying the standing orders. The Court therefore set aside the order of the Industrial Court, Madhya Pradesh. Since that Court had not addressed the remaining objections raised by the unions in their appeals against the certification of the standing orders, the Court directed that those appeals be heard by the Industrial Court and disposed of in accordance with law after the objections are decided on their merits. The appeals were allowed, and, in view of the special circumstances of the case, each party was ordered to bear its own costs in this Court. The appeals were accordingly allowed.