Guest, Keen, Williams Private Ltd. Vs.
P. J. Sterling & Ors  INSC 87 (15 May 1959)
SINHA, BHUVNESHWAR P.
CITATION: 1959 AIR 1279 1960 SCR (1) 348
Industrial Dispute-Fixation of age of
superannuation of employees-If a question of law-Standing order, if open to
modification-Principle of acquiescence and estoppel- Applicability-Industrial
Disputes (Appellate Tribunal) Act, 1950 (48 Of 1950), S. 7(1)(a)-Industrial
Employment (Standing Orders) Act, 1946 (XX Of 1946), s. 7.
The appellant company in enforcement of a
standing order, framed under the Industrial Employment (Standing Orders) Act,
1946 (XX of 1946), against which the respondent had preferred no appeal, compulsorily
retired 47 of its workmen at the age Of 55. A dispute was raised by the workmen
as to the validity of such retirement and the three questions referred to the
Tribunal for adjudication were, (1) whether forced retirement of workmen at 55
was justified, (2) what relief were the workmen entitled to on retirement and
(3) supposing the forced retirement of the workmen in question was justified,
to what relief would they be entitled. It was urged on behalf of the
respondents that the age of superannuation fixed by the standing order should
apply only to new entrants and in the case of old ones the age should be sixty
with option to them to continue even thereafter.
The Labour Appellate Tribunal on appeal, in
reversal of the findings of the Industrial Tribunal, held that the Standing
Order in question could not bar adjudication as to the propriety of the system
of forced retirement, that in view of the admitted fact that there was no fixed
age of retirement in the appellant's concern before the Standing Order, it
could not be enforced against workmen recruited prior to it and by its award
directed that the workmen who had been compulsorily retired should be
reinstated on refunding :what they had received in the shape of gratuity and
Provident Fund dues. It was urged by way of preliminary objections on behalf of
the appellant that (1) the 349 appeal to the Labour Appellate Tribunal was
incompetent as no substantial question of law was involved in it, and (2) that
the reference to adjudication was itself bad and the delay in raising the
present dispute showed that the respondent had acquiesced in the relevant
Held, that the objections must fail.
The question as to what should be the proper
age of super- annuation for industrial workers was one of general importance as
it affected a large number of employees and involved questions of industrial
policy and principle, so it was a substantial question of law under s. 7(1)(a)
of the Industrial Disputes (Appellate Tribunal) Act, 1950.
A standing order, even though binding as
between the employer and the employees under s. 7 of the Industrial Employment
(Standing Orders) Act, 1946, was open to modification even under the Act as it
stood prior to its amendment in 1956, in an industrial dispute raised by the
workmen for that purpose and as such the present reference, questioning the
propriety and validity of the system of forced retirement as introduced by the
appellant must be decided on merits.
Mettur Industries Ltd. v. Varma and Others
(1958) 11 L.L.J.
326 and Bharat Starch and Chemicals Ltd. v.
The Industrial Tribunal, Punjab, (1958) 11 L.L.J. 243, referred to.
The delay, inevitable in raising an
industrial dispute, could be no ground in the instant case for an inference
that the respondent had acquiesced in the relevant standing order. In
industrial disputes legal technicalities should be avoided as far as it was
reasonably possible to do so and industrial tribunals should be cautious in
applying the principle of acquiescence and estoppel in the adjudication of such
Held, further, that it was evident in the
instant case that it was unfair to fix the age of superannuation of previous
employees by a subsequent standing order which should apply in that matter only
to future entrants. In view of the fact However, that the previous employees
had agreed that such age for them should be sixty, with option to continue
thereafter, the age of superannuation for them should be fixed at sixty, but
without the option, which must be held to be wholly unreasonable and
inconsistent with the basic idea of a retirement age.
jamadoba Colliery of Messrs. Tata Iron and
Steel Co. Ltd.
v. Shri Nasiban, 1955 L.A.C. 582, referred
Guest, Keen, Williams Private Ltd. v. Its
Workmen, The Calcutta Gazette, Pt. 1, dt. 24-9-53, P. 3261; M/s.
Calcutta Exchange Gazette & Daily
Advertiser v. Shri Uma Prasanna Bhattacharjee, The Calcutta Gazette, Pt. 1, dt.
16-9-1954, P. 3111 and Bengal Chamber of Commerce v. Its Employees, Govt. of
West Bengal, Labour Deptt., "Award made by the Tribunals " for
quarter ending March 1949, P- 116, distinguished.
350 In fixing the age of superannuation,
however, industrial tribunals should take into consideration various relevant
factors, such as the nature of the work, the wage-structure, retirement
benefits and other amenities available, the climate of the locality, age of
superannuation in comparable industries and the past practice prevailing in the
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 403 of 1957.
Appeal by special leave from the judgment and
order dated August 2, 1956, of the Labour Appellate Tribunal of India,
Calcutta, in Appeal No. C 52 of 1956, arising out of the Award dated January 7,
1956, of the Court of Judge, Fifth Industrial Tribunal, West Bengal.
M. C. Setalvad, Attorney-General for India
and A. N. Kripal, for the appellant.
C.K. Daphtary, Solicitor-General of India, D.
L. Sen Gupta and Dipak Datta Choudhri, for respondentsNos. 1-48.
1959. May 15. The Judgment of the Court was
delivered by GAJENDRAGADAR J.-This appeal by special leave arises from an
industrial dispute between Guest, Keen, Williams Private Ltd., (hereafter
called the appellant) and its workmen represented by Guest, Keen, Williams
Staff Association (hereafter called the respondent) which was referred for
adjudication to the Fifth Industrial Tribunal, West Bengal, Calcutta, by the
Government of West Bengal on December 29, 1954. Three questions were the
subject-matter of the reference : " (1) If the system of forced retirement
of workmen at the age of 55 as introduced by the management in May 1954 is
justified ? (2) To What relief the workmen are entitled on retirement ? and (3)
If the forced retirement of the workmen named in the attached list is justified
?-To what relief including reinstatement and/or compensation are they entitled
?" These three questions were answered substantially in favour of the
appellant by the tribunal ;
but on appeal by the respondent, the Labour
Appellate Tribunal has reversed the findings of the tribunal and has
substantially 351 answered the questions in favour of the respondent. The
correctness of this decision is challenged by the appellant by its present
The appellant is a company incorporated with
limited liability under the Indian Companies Act. It carries on business at 41,
Chowringhee Road, Calcutta. Its business is engineering and manufacturing of
engineering products. It has a factory at Howrah where about 5000 workmen are
After the Industrial Employment (Standing
Orders) Act, 1946 (Act 20 of 1946) (hereafter called the Act) came into force
on April 23, 1946, the appellant submitted its draft standing orders for
certification to the certifying officer.
On December 19, 1953, the certifying officer
duly certified the said orders after giving the trade unions of the appellant's
workmen an opportunity to be heard and after considering their objections.
Against the said orders no appeal was preferred by the respondent, and so they
became final and operative as conditions of service between the parties.
The standing order in regard to retirement of
the appellant's employees provides that " workmen shall retire from the
service of the company on reaching the age of 55 years but the company may at
its sole discretion offer an extension of service beyond this age to
anybody." In pursuance of this standing order the appellant examined the
cases of 56 of its employees who according to their service records appeared to
have attained the age of superannuation.
The objection, raised by two workmen about
the correctness of the age shown in their service records was examined and
ultimately upheld; their records were accordingly corrected on the strength of
the certificates granted to them by the Civil Surgeon, Howrah. Seven were
allowed extention of service up to March 31, 1955, while the remaining 47 who
were over the age of 55 were retired with effect from May 31, 1954, after
giving each one of them a notice in that behalf on May 11, 1954. These 47
workmen are shown in the list attached to the reference and it is in respect of
them that question No. 3 has been referred to the tribunal, 352 The said 47
workmen were paid all the emoluments due to them in respect of Provident Fund
contributions made by the appellant in respect of them and by themselves; they
were also paid gratuities at the rate of 15 days' pay for each year of their
service prior to their becoming the members of the Provident Fund. Besides they
were given valuable presents by the appellant in appreciation of their
and in a large number of cases the appellant
offered employ- ment to the sons or other relatives of the said work- men.
Even so the respondent raised a dispute about
the compulsory retirement of the said workmen and in fact challenged the
validity of the relevant standing order itself. It is after this dispute was
referred to the tribunal for adjudication that the present proceedings
The tribunal held that the system of forced
retirement introduced by the appellant under its relevant standing order was
perfectly justified. It observed that the respondent had given no convincing
reason why the age limit of retirement should by fixed not at 55 but at 60
years as alleged by it; and it referred to the fact that in the case of a
dispute between 'the appellant and its head-office staff the retirement age had
been fixed at 55 years by consent in proceedings before the Second Industrial
Tribunal on September 24, 1953. Reference was also made to the award in the
Calcutta Exchange Gazette and Daily Advertiser And One of their employees (1)
where the age of superannuation had been similarly fixed at 55. Incidentally
the tribunal was impressed by the appellant's argument that the respondent had
not preferred an appeal against the relevant standing order though an appeal
was competent under the Act.
Having held that the compulsory retirement at
the age of 55 fixed by the standing order was justified the tribunal proceeded
to consider the two other questions and issued some directions as to the
compensation to be given to the 47 workmen. With these directions we are not
concerned in this appeal. It is, however, necessary to (1) The Calcutta
Gazette, Pt. 1. dt. 16-9-1954, P. 3111.
353 refer to the fact that in dealing with
issue No. 3 the tribunal examined the argument of the respondent that the age
of superannuation fixed by the standing order should be made applicable to new
entrants and not to the old; but it held that there was no substance in the
said contention. " Unemployment among youths ", observed the
tribunal, " is certainly more reprehensible and unfortunate than
unemployment among old men "; and it thought that to accept the
respondent's contention would mean the impairment of the efficiency of the
industry to which, as a tribunal, it can never be a party. According to it,
there was no question of any breach of faith or understanding qua the 47
workmen who had been compulsorily retired. It appears from the judgment of the
tribunal that these contentions which it has rejected in dealing with issue No.
3 were in fact more relevant to issue No. 1 which is a general issue.
The Labour Appellate Tribunal has taken a
contrary view on the main question of principle covered by issue No. 1.,
According to the appellate tribunal the fact that the system of forced
retirement was based on the relevant standing order does not ipso facto bar
adjudication on the question of justness and propriety of the system itself. It
held that the appellant had admitted that there was no fixed age of retirement
obtaining in its concern before the standing orders were certified, and that in
fact in some cases the appellant had employed persons who had passed the age of
superannuation. That is why the appellate tribunal came to the conclusion that
it would not be unreasonable to assume that all workmen who joined the
appellant's service prior to the framing of the standing orders had naturally
and legitimately expected that they would be allowed to continue in service as
long as they remain physically fit; and so it held that the new scheme cannot
be justly enforced against the workmen who had been recruited by the appellant
before the introduction of the said orders. In the result the appellate
tribunal answered the first issue by holding that the age of compulsory
retirement should be 55 in regard to persons employed by the 45 354 appellant
subsequent to the certification of the standing orders; but that there should
be no age of retirement in regard to the prior employees of the appellant
Consistently with this finding the appellate tribunal has directed that the 47
workmen who had been compulsorily retired by the appellant should be reinstated
on condition that they refund whatever money they might have received from the
appellant in the shape of gratuity or Provident Fund dues. It is this decision
which has given rise to the present appeal.
The first point which has been urged before
us by the learned Attorney-General on behalf of the appellant is that the
appeal preferred by the respondent before the Labour Appellate Tribunal was
incompetent and should not have been entertained by it. Under s. 7(1)(a) of the
Industrial Disputes (Appellate Tribunal) Act, 1950 (48 of 1950), an appeal lies
to the appellate tribunal from any award or decision of an industrial tribunal
inter alia if the appeal involves any substantial question of law. The argument
is that the respondent's appeal did not satisfy this requirement, and so the
appellate tribunal has exceeded its jurisdiction in entertaining it. We are not
impressed by this argument. It is clear that issue No. 1 which was referred to
the tribunal is a general issue affecting more than 5,000 employees of the
appellant; and it is an issue the decision of which would necessarily raise
questions of industrial policy and principle; whether or not the appellant was
entitled to introduce an age of superannuation, and if it was entitled so to
do, would the introduction of the system affect the rights of persons who had
joined the appellant's service in the legitimate expectation that they would
not be subject to any such rule? What would be the proper age of superannuation
in a concern like the appellant's? In our opinion, questions like these which
necessarily arose in deciding issue No. 1 are questions of law and since they
affect a large number of the appellant's employees it cannot be said that the
respondent's appeal before the Labour Appellate Tribunal did not involve a substantial
question of law. The challenge to the validity of the decision of 355 the
Labour Appellate Tribunal on this preliminary ground must, therefore, fail.
It is then urged that the present reference
itself is bad;
and this contention is based on the provisions
of s. 7 of the Act which makes the standing orders binding between the employer
and his employees. There is no doubt that under s.
7 standing orders would bind all the
employees of the employer without any distinction. As soon as the standing orders
become operative they bind both the employer and all the employees then in his
service. The learned Attorney- General contends that the 47 employees who have
been retired on the ground that they had exceeded the age of superannuation
were bound by the relevant standing order which fixed the age of superannuation
at the age of 55; and until the said standing order is modified according to
law it would not be open to them to question the validity of their compulsory
retirement. In support of this argument he has relied on the decision of the
Madras High Court in Mettur Industries Ltd. v. Varma & Ors. (')In that case
Bala- krishna Aiyer, J., has held that " where an industrial dispute
relates to a particular individual and the question is whether he has been
improperly dealt with, then that question must be determined within the
framework of the existing agreement and the existing rules. Employees can raise
a dispute and ask that the standing orders be amended but till the standing
orders are amended they hold the field and any dispute that may arise in an
undecided case must be disposed of in accordance with the standing orders as
they happen to be at the relevant time " A similar view has been expressed
by Bishan Narain, J., of the Punjab High Court in Bharat Starch and Chemicals
Ltd., And The Industrial Tribunal, Punjab (2).
This argument assumes that the present
reference has been made primarily if not solely by reference to the cases of
the 47 workmen who have been compulsorily retired by the appellant. In our
opinion such an assumption is clearly not well founded. The reference shows
that the main question which the industrial (1) ~(1958) II L.L.J.326.
(2) (1958) II L.L.J. 24-3.
356 tribunal has been called upon to decide
is the general question affecting the large number of the appellant's employees
who had accepted its service before the relevant standing orders were framed.
In terms it covers all the employees of the appellant and for deciding it the
tribunal would have to examine the matter on the merits and consider whether
the relevant standing order as it stands is valid or whether it needs any
modification. The second question also has reference to workmen other than
those who have been compulsorily retired; and the answer to this question would
naturally depend upon the conclusion which the tribunal may reach on the merits
of the first issue. It is only the third question which has reference to the 47
workmen who have been compulsorily retired; and this question is framed on the
hypothesis that the forced retirement of the appellant's employees under the
system introduced by the relevant standing order is upheld by the tribunal. On
that hypothesis the third question requires the tribunal to decide whether the
47 workmen are entitled to any compensation and/or reinstatment. It is thus
clear that the reference is primarily concerned with the main industrial
dispute raised by the respondent about the propriety and the validity of the
system of forced retirement introduced by the appellant and this question had
to be decided by the tribunal on the merits. Indeed, as the judgment of
Balakrishna lyer,points out in the case of Mettur Industries Ltd.it is open to
the employees to raise a disputeand ask that the standing orders be amended.
Thatis precisely what the respondent seeks to
do by raising the present dispute as disclosed in issue No. 1. We must
therefore, hold that the argument about the invalidity of the reference is
It is relevant at this stage to consider the
scheme and effect of the relevant provisions of the Act. The Act came into
force on April 23, 1946, and it was intended to require employers in industrial
establishments to define with sufficient precision the conditions of employment
under them and to make the said (1)(1958) II L.L.J. 326.
357 conditions known to the workmen employed
by them. The matters which had to be provided in standing orders are enumerated
under I 1 items in the Schedule to the Act. The expression " Standing
Orders " as used in the Act means rules relating to matters set out in the
Schedule. When the draft standing orders are submitted to the certifying
officer, the said officer has to satisfy himself that they make provision for
every matter set out in the schedule and that they are otherwise in conformity
with the provisions of the Act. It is significant that originally under s. 4 it
was not competent to the certifying officer to adjudicate upon the fairness or
reasonableness of the provisions of any standing orders. The same disability
was imposed I on the appellate authority. This section has, however, been
subsequently amended by Act 36 of 1956, and the effect of the amendment is that
it has now been made the function of the certifying officer or the appellate
authority to adjudicate upon the fairness or the reasonableness of the
provisions of the standing orders. Prior to this amendment, however, all that
the certifying officer had to do before certifying the said standing orders was
to see that all the matters in the schedule are covered and that they are not
otherwise inconsistent with the provisions of the Act.
Under s. 7 standing orders when certified
come into operation subject to its other provisions. S. 10 lays down that
standing orders finally certified shall not, except on agreement between the employer
and the workmen, be liable to modification until the expiry of six months from
the date on which the standing orders or the last modifications thereof came
into operation. Sub-s. (2) of s. 10 prior to its amendment in 1956 authorised
only the employer to apply for the modification of the standing orders.
Subsequent to the said amendment workmen also have been given the rights to
apply for such modification. It is thus clear that the scope for the enquire
before the certifying officer and the appellate authority under the original
Act was extremely limited, and the right to claim a modification of the
standing orders was not given to the employees prior to the amendment of s.
10(2). Nevertheless the standing 358 orders when they were certified became operative
and bound the employer and all his employees.
There can be no doubt that before the
amendment of 1956 if the employees wanted to challenge the reasonableness or
fairness of any of the standing orders the only course open to them was to
raise an industrial dispute in that matter.
This position has been substantially altered
by the two amendments to which we have just referred; but we are concerned in
the present appeal with the state of the law as it prevailed prior to the said
amendments, and so it cannot be denied that the employees had a right to claim
a modification of the standing orders on the ground that they were unreasonable
or unfair by raising an industrial dispute in that behalf. Subsequent to the
amendment of the Act the employees can raise the same dispute before the
certifying officer or before the appellate tribunal and may in a proper case
apply for its modification under s. 10(2) of the Act.
The position then is that though the relevant
standing order about the age of superannuation came into operation under s.
7 and was binding thereafter upon the
employer and all his employees the right of the respondent to challenge the
validity or propriety 'of the standing order and to claim a suitable
modification in it cannot be disputed. The standing orders certified under the
Act no doubt become part of the terms of employment by operation of s. 7 ; but
if an industrial dispute arises in respect of such orders and it is referred to
the tribunal by the appropriate government, the tribunal has jurisdiction to
deal with it on the merits.
This position is not, and cannot be,
It is, however, contended that the delay made
by the respondent in raising the present dispute shows that the respondent had
acquiesced in the relevant standing orders and that in substance is pleaded as
a bar to the validity of the present reference. We do not think that this
contention can be upheld. In dealing with industrial disputes the application
of technical legal principles should as far as is reasonably possible be
avoided. Take the present argument of acquiescence which in ordinary civil
litigation may 359 justify a plea of estoppel. An industrial dispute has to be
raised by the union before it can be referred; and it is not unlikely that the
union may not be presuaded to raise a dispute though the grievance of a
particular workman or a number of workmen may otherwise be well-founded; then
again, even if the union takes up a dispute the State Government may or may not
refer it to the industrial tribunal. The discretion of the State Government
under s. 10 of the Industrial Disputes Act is very wide. Thus, workmen affected
by standing orders may not always and in every case succeed in obtaining a
reference to the industrial tribunal on the relevant points. That is why the
tribunals should be slow and circumspect in applying the technical principles
of acquiescence’s and estoppel in the adjudication of industrial disputes. If a
dispute is raised after a considerable delay which is not reasonably explained
the tribunal would undoubtedly take that fact into account in dealing with the
merits of the dispute. But unless the relevant facts clearly justify such a
course it would be inexpedient to throw out the reference on preliminary
technical objections of the kind raised by the appellant under the present
contention. In the present case the relevant rule was certified in December
1953, and came into operation in January 1954. The present dispute was raised
by the respondent as soon as the appellant sought to enforce it in May 1954.
That is why it is difficult to accept the argument that the respondent has been
guilty of latches or acquiescence. We would, therefore, hold that the
respondent was entitled to raise the present industrial dispute and that the
present reference does not suffer from any infirmity.
The learned Attorney-General has then argued
that the Labour Appellate Tribunal has completely misunderstood the scope of
the enquiry contemplated by issue No. 1. His case is that under issue No.No. 1
all that the tribunal was called upon to decide in the abstract was the
propriety of the standing order fixing the age of superannuation at 55. The
tribunal was not required and was not expected to consider the impact of this
rule on the workmen employed by the appellant, Should any 360 age of
superannuation be fixed, and if yes, what should be the limit in that behalf ?
These are the only questions which called for the decision of the tribunal on
issue No. 1. In fact the learned Attorney-General suggested that in deciding
issue No.. 1 the tribunal has merely to say yes or no. That is the substance of
his contention. We are satisfied that this contention is misconceived. There is
no doubt that in dealing with issue No. 1 the tribunal had to consider not only
the propriety, reasonableness and fairness of the rule, but it had also to deal
with the question as to whether the said rule could and should be made
applicable to employees who had already been employed by the appellant in
service without any limitation as to the age of retirement.
In fixing the age of superannuation
industrial tribunals have often enough considered this dual aspect of the
question and it is the sam dual aspect that was intended to be examined when
issue No. 1 was framed. Indeed both the industrial, and the appellate,
tribunals have considered this twofold aspect of the matter, though it may be
conceded that the discussion in both the judgments is somewhat confused and
mixed up. There. is, however, no doubt that the respondent's grievance about the
application of the rule to the previous employees of the appellant was
specifically urged before the tribunals.
That takes us to the merits of the dispute.
It is not denied by the appellant that before the present standing orders were
certified the appellant had not introduced any age of superannuation while
employing its workmen. In its statement before the tribunal the respondent had
specifically averred that there was no fixed age or period of service for
retirement and that the implied condition of service was that the workman would
continue in service so long as he lived, if not invalidated earlier for reasons
of health; and it was also alleged by it that for the first time in its history
the appellant suddenly thought of giving effect to the relevant standing orders
by compulsorily retiring the 47 workmen in question. It may, however, be added
that amongst remedies suggested by the respondent in its written statement it
had expressly 361 stated that 60 should be fixed as the age of retirement for persons
already in the employment of the appellant with option to further continue
subject to physical fitness. In support of this plea the respondent had relied
upon the statement filed by the appellant giving details of the 47 retired
workmen; this statement showed that some workmen had been employed for the
first time even after they had passed the age of 55 and that a large majority
of them had passed the age of 55 much before their actual retirement.
It is significant that though the respondent
had made these specific allegations the appellant did not suggest that there
was any age of retirement in force before the framing of the standing orders.
It is true that the appellant put in a general denial of all the allegations
made by the respondent in its statement but such a general denial cannot have
much value. In paragraph 5 of its statement the appellant has referred to the
fact that it is the usual practice to fix the age of retirement at 55 in the
public and private sectors of industry and that it is in line with the
provisions of the Employees' Provident Fund Act. It is obvious that, though the
appellant referred to the usual practice of fixing the age of superannuation in
the private and public sectors, it made no such averment in regard to any such
practice prevailing in the case of its own employees. Even in the statement of
its case before this court the appellant has said that there was no fixed age
of retirement before the standing orders were introduced but it sought to add
that ordinarily workmen were made to retire at the age of 55. This latter
statement is an allegation of fact made for the first time before this Court.
There is nothing on the record which would justify or substantiate it. Thus the
Labour Appellate Tribunal was perfectly right in dealing with the merits of the
dispute on the basis that the large number of employees who had been engaged by
the appellant prior to the making of the standing orders were not subject to
any rule of superannuation.
It is, however, contended on behalf of the
appellant that both the tribunals have agreed that 'it is 46 362 reasonable to
fix the age of superannuation at 55; and in a sense the appellant is justified
in raising this contention.
The Labour Appellate Tribunal, however has
held that this age cannot be applied retrospectively so as to affect the prior
employees of the appellant and it is only this aspect of the matter which calls
for a decision from us. The respondent does not deny that the relevant standing
order fixing the age of superannuation at 55 will and should bind the future
entrants into the service of the appellant. The learned Solicitor-General,
however, contends that it would be unreasonable and unfair to apply this rule
to the workmen who were already in the employment of the appellant.
In regard to the workmen already in the
employment of the appellant it has been brought to our notice by the appellant
that the workmen themselves wanted that the age of superannuation should be
fixed; and it is also urged that fixing the age of superannuation at 60 as
suggested by the respondent would be inconsistent with paragraph 69 of the
Employees' Provident Fund Scheme, 1952, notified under s. 5 of the Employees'
Provident Fund Act, 1952 (Act 19 of 1952).
The argument that the workmen themselves
wanted the age of superannuation to be fixed ignores the fact that this demand
was coupled with the claim that the age should be fixed at 60 and option should
be given to the employees to continue thereafter. Therefore the alleged
admission of the workmen cannot be pressed into service by the appellant in
support of the fixation of -the age of retirement at 55. The argument based on
paragraph 69 is, in our opinion, wholly invalid because the said paragraph does
not make it obligatory on the employer to fix the age of retirement of the
employees at 55. Explanation 11 to the said paragraph provides that a member
shall be deemed to have attained the age of superannuation on completing the
age of 55 years; but this deeming clause does not mean that in every case the
employee must retire at the age of 55. Paragraph 69 (1) specifically authorises
the member to withdraw the full amount 363 standing to his credit in the fund
on retirement from service in the industry at any time after the attainment of
the age of superannuation. In other words, two conditions have to be satisfied
before the member can withdraw the fund; he must have attained the age of
superannuation and he must have actually retired from service. This position
was fairly conceded by the learned Attorney-General during the course of his
On the other hand the learned
Solicitor-General contends that making the rule of superannuation applicable to
the prior employees would be obviously unfair and unreasonable.
He no doubt sought to invoke the assistance
of s. 2 (oo) of the Industrial Disputes Act which defines retrenchment. His
argument was that the wrongful retirement of the prior employees on the ground
that they had attained the age of 55 would amount to retrenchment within the
meaning of the said provision, and that would entitle them to make a claim for
retrenchment benefit under s. 25(F) of the said Act. This, according to him,
would constitute prejudice to the prior employees. However, he fairly conceded
that this argument of prejudice would not be valid in view of the decision of
this Court in Hariprasad Shivshankar Shukla v. A.D. Divikar(1). That is why we
do not propose to deal with this argument.
That takes us to the question as to whether
the fixing of the age of superannuation at 55 in regard to the prior employees
can be said to be reasonable and fair having regard to the fact that when they
entered service there was no such limitation. The Labour Appellate Tribunal has
held that it would both be unreasonable and unfair to introduce this condition
in respect of these workmen. This view is supported by the decision 'of the
Labour Appellate Tribunal in Jamadoba Colliery of Messrs. Tata Iron and Steel
Co., Ltd. v. Shri Nasiban (2). In that case the respondent.
Nasiban had joined the services of the
colliery before the rules of superannuation were introduced; and when she was
sought to be retired on the strength of the said rules the action of the
employer was challenged (1) [19571 S.C.R. 121.
(2) 1955 L.A.C. 582.
364 before the industrial tribunal. The
tribunal and the Labour Appellate Tribunal both held that the respondent having
entered the service of the colliery before the new rules came into force could
not be prejudicially affected by the conditions made there under when she did
not exercise her option to be governed by the said rules. In other words, the
view taken by the tribunals was that in the case of prior employees an option
should be given to them to be governed by the new orders or rules; and it is
only if they exercise the said option that the new orders or rules should be
made applicable to them.
In this connection the learned
Attorney-General has referred us to some other awards where the age of
superannuation has been fixed generally by reference to all the employees. The
first award on which he has relied was passed in the dispute between the
present appellant and its employees at the head- office at Calcutta('). This
award is of no assistance to the appellant because it is clear that the age of
superannuation was fixed by the award solely on the basis of the agreement
between the parties. If the employees agree that a particular age of
superannuation should be fixed in regard to all of them there can be no
difficulty in upholding the validity of the agreement. An award by agreement
cannot therefore assist the appellant in its present contention. The other
award to which our attention has been drawn was in respect of an industrial
dispute between the Bengal Chamber of commerce And Its Employees (2). This
award did fix the age of retirement at 55; but it is not clear from the award
that this age came to be fixed for the first time. The question as to whether
the rule as to the age of superannuation can be fixed for the first time in
regard to both the past and future employees of the concern has not been
considered in this award. The third award which was cited before ,us was passed
in an industrial dispute between M/s. Calcutta Exchange Gazette & Daily
Advertiser and Shri Uma Prasanna Bhattacharjee (3). The dispute in (1) The
Calcutta Gazette, Pt. 1, dt. 24-9-53 P.3261.
(2) Govt. of West Bengal, Labour Deptt.,
"Awards made by the Tribunals " for quarter ending March 1949, P. 116
(3) The Calcutta Gazette, Pt. 1, dt.
16-9-1954, P. 3111.
365 that case was in regard to the
termination of Shri Uma Prasanna Bhattacharjee and this dispute was settled in
favour of the employee. It appears that in making the award the tribunal has
referred to the Omnibus Press Tribunal Award in which the age of superannuation
has been fixed at
55. This latter award has not been produced
before us. It is clear that in none of the awards on which the appellant has
relied has the question of principle been considered whether the age of
superannuation can be fixed for the first time so as to affect the legitimate
expectations of the persons in previous employment who were not subjected to
any such rule. As we have alaeady pointed out this question has been considered
by the Labour Appellate Tribunal in the case of the Jamadoba Colliery (1) and
the view expressed therein has been followed by the present Labour Appellate
We do not think that on the record as it
stands, and in the circumstances of this case, we would be justified in
reversing the decision of the Labour Appellate Tribunal.
That, however, leaves one more point to be
considered. If the view taken by the Labour Appellate Tribunaj that it would be
unfair and unreasonable to impose the rule of 55 against,, the previous
employees is accepted, does it follow that there should be no rule of
superannuation in regard to them ? Unfortunately, this aspect of the matter has
not been considered by the Labour Appellate Tribunal at all. Its omission to
consider' this point is all the more to be regretted because in the statement
of the respondent it had been expressly suggested that the age of 60 years
would be reasonable in regard to the previous employees though of course the
statement had claimed an option for the said employees to continue in service
after crossing. the age bar of 60 subject to physical fitness. The learned
Solicitor- General has expressly stated before us that having regard to the
stand taken by the respondent in the present proceedings it would be open to us
to consider whether the age of 60 should not be prescribed as the retirement
age for the employees who were in the service of the appellant before the
certification of (1)1955 L.A.C. 582.
366 the present standing orders. He did not
dispute the fact that the tribunals could have made an appropriate order in that
behalf and he fairly conceded that we could ourselves give an appropriate
direction if we thought it reasonable to do so. In our opinion it is necessary
to fix the age of superannuation even with regard to the prior employees, and
we feel no difficulty in holding that it would not be unfair or unreasonable to
direct that these employees should retire on attaining the age of 60. An option
to continue in service even thereafter which the respondent claimed is wholly
unreasonable and is entirely inconsistent with the notion of fixing the age of
superannuation itself. Once the age of superannuation is fixed it may be open
to the employer for special reasons to continue in its employment a workman who
has passed that age; but it is inconceivable that when the age, of
superannuation is fixed it should be in the option of the employee to continue
in service thereafter. We would accordingly hold that in the circumstances of
this case the rule of retirement for the previous employees in the concern
should be 60 instead of 55 and that the rule of 55 should apply to all
employees who enter the service of the appellant after the relevant standing
orders came into force. In fixing the age of superannuation of I the prior
employees at 60 years we are in substance giving effect to the plea made by the
respondent before us.
We would, however, like to add that this
conclusion should not be taken as a decision on the general question of fixing
the age of superannuation in the case of industrial employees. In fixing the
age of superannuation industrial tribunals have to take into account several
relevant factors.. What is the nature of the work assigned to the employees in
the course of their employment? What, is the nature of the wage structure paid
to them? What are the retirement benefits and other amenities available to
them? What is the character of the climate where the employees work and what is
the age of superannuation fixed in comparable industries in the same region?
What is generally the practice prevailing in the industry in the past in the
matter of retiring its employees ? These 367 and other relevant facts have to
be weighed by the tribunal in every case when it is called upon to fix an age
of superannuation in an industrial dispute. In the present case, as we have
already observed, the age of 55 has been fixed by both the tribunals for future
entrants; and this- is substantially based on the standing order which we have
already considered. In regard to the prior employees it is not seriously
disputed that the retirement age can and may be fixed at 60. It is under these
circumstances that we have come to the conclusion that the age of
superannuation for prior employees should be fixed at 60.
In regard to the 47 workmen shown in the list
attached to the reference it appears that all of them have already passed the
age of superannuation. Annexure B giving the details about these workmen which
has been filed by the appellant shows the year of birth of each one of them and
the entries in the relevant column indicate that none of them would be entitled
to claim reinstatement now as a. result of this judgment. But quite apart from
this consideration as we have already pointed out they have accepted the order
of retirement without protest and have voluntarily and willingly received their
provident fund gratuity as well as presents given to them by the appellant.
the appellant has also appointed the
relatives of many of these retired men. We would therefore; direct that none of
them is entitled to reinstatement.
With these modifications the decision of the
Labour Appellate Tribunal is confirmed. Since both the parties have partly
succeeded and failed before us we direct that each party should bear its own
Appeal allowed in part.