Steel Works Construction Ltd. and Anr Vs. Hindustan Steel Works Construction
Ltd. Employees Union  Insc 409 (11 August 2005)
Pasayat & H.K. Sema Arijit Pasayat, J.
Steel Works Construction Limited (hereinafter referred to as the 'employer')
calls in question legality of the judgment rendered by Division Bench of the
Andhra Pradesh High Court affirming the order passed by the learned Single
Judge holding that withdrawal of construction allowance which was being earlier
allowed to the employees working at the Vishakhapatnam was in violation of
Section 9-A of the Industrial Disputes Act, 1947 (in short the 'Act').
According to the employees as urged in the writ petition it was done without
following the mandatory provisions of Section 9-A and was in violation of
principles of natural justice.
aspects need to be noted in brief are as follows:
started construction work of Vizag Steel Plant in 1979 and employees stationed
there were paid Project/construction allowance. The employer discontinued
payment of construction allowance and had paid City Compensatory allowance. The
withdrawal continued w.e.f. 7.4.1992. On 22.8.1974 a circular was issued by the
employer notifying revision of pay scales w.e.f. 1.1.1974. On 17.1.1975 the
Ministry of Finance, Government of India issued Office Memorandum with regard
to construction projects and grant of project allowance. It was indicated
therein that the allowance was intended primarily to compensate the staff for
lack of amenities such as housing, schools, markets, dispensaries etc. Since
November 1979 the employees were paid project/construction allowance. In 1986 a
High Power Committee was appointed by this Court to go into the questions
relating to the implementation of the recommendations of the Fourth Pay
Commission. The final report was submitted on 2.11.1988. The issue relating to
project/construction allowance was set out in Chapter 12 of the report. By
order dated 3.5.1990 this Court directed implementation of the recommendations
of the High Power Committee. According to the appellants there was no
restriction on withdrawal of the allowance under the changed circumstances. The
allowance was specific and particular in the sense that it was payable under
legality of the withdrawal writ petition was filed before the Andhra Pradesh
High Court, which was allowed by the learned Single Judge. The primary
challenge was that there was clear violation of the mandatory requirements of
Section 9-A and, therefore, order was not sustainable. The employer questioned
maintainability of the writ petition contending that efficacious alternative
and statutory remedy is available under the Act and writ petition was not
maintainable, particularly, when factual controversy is involved. The question
whether there was violation of the requirements of Section 9-A is essentially
one of facts.
High Court was of the prima facie view that withdrawal of the construction
allowance amounted to variation of the terms and conditions of service and,
therefore, there was violation of the requirements of Section 9-A of the Act.
It was observed that since no factual controversy has been adjudicated, the
writ petition was maintainable. Questioning correctness of the view expressed
by learned Single Judge writ appeal was filed before the Division Bench which
dismissed the appeal holding that the learned Single Judge was correct in his
support of the appeal, learned counsel for the appellants submitted that both
the learned Single Judge and the Division Bench did not consider the specific
plea that statutory remedy is available to the employees and for that matter
the union could not have questioned the legality of the order of withdrawal of
construction allowance by filing writ petition. It was further submitted that
whether Section 9-A had any application to the facts of the case essentially
involves questions of fact and reasoning of learned Single Judge and the
Division Bench are not supportable.
response, learned counsel for the respondent-union submitted that both the
learned Single Judge and the Division Bench have noted that on the facts of the
case that Section 9-A had clear application and, therefore, there is no
infirmity in the judgments to warrant interference.
catena of decisions it has been held that writ petition under Article 226 of
the Constitution of India, 1950 (in short 'the Constitution') should not be
entertained when the statutory remedy is available under the Act, unless
exceptional circumstances are made out.
U.P. State Bridge Corporation Ltd. and Ors. v. U.P. Rajya Setu Nigam S. Karamchari
Sangh (2004 (4) SCC 268), it was held that when the dispute relates to
enforcement of a right or obligation under the statute and specific remedy is,
therefore, provided under the statute, the High Court should not deviate from
the general view and interfere under Article 226 except when a very strong case
is made out for making a departure. The person who insists upon such remedy can
avail of the process as provided under the statute. To same effect are the
decisions in Premier Automobiles Ltd. v. Kamlekar Shantarum Wadke (1976 (1) SCC
496), Rajasthan SRTC v. Krishna Kant (1995 (5) SCC 75), Chandrakant Tukaram Nikam
v. Muncipal Corporation of Ahmedabad and Anr. (2002) (2) SCC 542) and in
Scooters India and Ors. v. Vijai V. Eldred (1998
(6) SCC 549).
Premier Automobiles Ltd. case (Supra) it was observed as follows:
speedy, inexpensive and effective forum for resolution of disputes arising between
workmen and their employers. The idea has been to ensure that the workmen do
not get caught in the labyrinth of civil courts with their layers upon layers
of appeals and revisions and the elaborate procedural laws, which the workmen
can ill afford. The procedure followed by civil courts, it was thought, would
not facilitate a prompt and effective disposal of these disputes. As against
this, the courts and tribunals created by the Industrial Disputes Act are not
shackled by these procedural laws nor is their award subject to any appeals or
revisions. Because of their informality, the workmen and their representatives
can themselves prosecute or defend their cases.
forums are empowered to grant such relief as they think just and appropriate.
can even substitute the punishment in many cases. They can make and re-make the
contracts, settlement, wage structures and what not. Their awards are no doubt
amenable to jurisdiction of the High Court under Article 226 as also to the
jurisdiction of this Court under Article 32, but they are extraordinary
remedies subject to several self-imposed constraints. It is, therefore, always
in the interest of the workmen that disputes concerning them are adjudicated in
the forums created by the Act and not in a civil court. That is the entire
policy underlying the vast array of enactments concerning workmen. This
legislative policy and intendment should necessarily weigh with the courts in
interpreting these enactments and the disputes arising under them".
9-A of the Act reads as follows:
Notice of Change - No employer, who proposes to effect any change in the
conditions of service applicable to any workman in respect of any matter
specified in the Fourth Schedule, shall effect such change, -
giving to the workman likely to be affected by such change a notice in the
prescribed manner of the nature of the change proposed to be effected; or
twenty-one days of giving such notice :
that no notice shall be required for effecting any such change –
the change is effected in pursuance of any (settlement or award); or
where the workman likely to be affected by the change are persons to whom the
Fundamental and Supplementary Rules, Civil Services (Classification, Control
and Appeal) Rules, Civil Service (Temporary Service) Rules, Revised Leave
Rules, Civil Services Regulations, Civilians in Defence Services
(Classification, Control and Appeal) Rules or the Indian Railway Establishment
Code or any other rules or regulations that may be notified in this behalf by
the appropriate Government in the Official Gazette, apply." In Hindustan
Lever Ltd. v. Ram Mohan Ray and Ors. (1973 (4) SCC 141), it was observed, inter
alia, as follows:- "It is hardly necessary to refer to the various
decisions which were cited before us as to what would constitute conditions of
service the change of which would require notice under Section 9-A of the Act.
In Dharangadhara Chemical Works Ltd. v. Kanju Kalu and Others ((1955) 1 LLJ 316
(LAT.)), the Labour Appellate Tribunal of India held that the increase in the
weight of bags to be carried from 1 cwt. to 1 1/2 cwt. was a change in the
workload and the company was bound to pay wages as the workmen were willing to
work but did not work on account of the unreasonable attitude adopted by the
management. In Chandramalai Estate v. Its Workmen ((1960) 2 LLJ 243), the
payment of Cumbly allowance was held to have become a condition of service. In
Graham Trading Co. (India) Ltd. v. Its Workmen ((1960) 1 SCR 107) it was held that
the workmen were not entitled to Puja bonus as an implied term of employment.
In Workmen of Hindustan Shipyard Ltd. v. I.L.T. ((1961) 2 LLJ 526), in the
matter of withdrawal of concession of coming late by half an hour (than the
usual hour), it was held that the finding of the Industrial Tribunal that
Section 9-A did not apply to the case did not call for interference.
the decision proceeded on the basis that the court will not interfere in its
jurisdiction unless there was any manifest injustice. In Mcleod & Co. v. Its Workmen (1965) 5 SCR 568),the provision for tiffin
was held to be an amenity to which the employees were entitled, and the
provision of cash allowance in lieu of free tiffin directed to be made by the
industrial tribunal could not be considered to be erroneous in law. In Indian
Overseas Bank v. Their Workmen ((1967-68) 33 FJR 457), "key
allowance" was treated as a term and condition of service. In Indian
Oxygen Limited v. Udaynath Singh ((1970) 2 LLJ 413 : (1970) 2 FLR 350),
withdrawal by the management of the supply of one empty drum at a time at
reasonable intervals was held not to contravene Sections 9-A and 33. In Oil
& Natural Gas Commission v. Their Workmen ((1972) 42 FJR 551), where there
was nothing to show that it was a condition of service that a workman should
work for 6 1/2 hours only, no notice of change was held to be required under
Section 9-A for fixing the hours of work at eight. In Tata Iron & Steel Co.
v. Workmen ((1972) 2 SCC 383), change in weekly days of rest from Sunday to
some other day was held to require notice. A close scrutiny of the various
decisions would show that whether any particular practice or allowance or
concession had become a condition of service would always depend upon the facts
and circumstances of each case and no rule applicable to all cases could be
culled out from these decisions." (Underlined for emphasis) In Basant
Kumar Sarkar and Ors. v. Eagle Rolling Mills Ltd. and Ors. (1964 (6) SCR 913)
the Constitution Bench of this Court observed as follows:
is true that the powers conferred on the High Courts under Art. 226 are very
wide, but it is not suggested by Mr. Chatterjee that even these powers can take
in within their sweep industrial disputes of the kind which this contention
seeks to raise. Therefore, without expressing any opinion on the merits of the
contention, we would confirm the finding of the High Court that the proper
remedy which is available to the appellants to ventilate their grievances in
respect of the said notices and circulars is to take recourse to s. 10 of the
Industrial Disputes Act, or seek relief, if possible, under sections 74 and 75
of the Act." We find that the learned Single Judge observed that he was
not entering into the factual controversy, overlooking the fact that the
question relating to applicability of Section 9-A is essentially question of
fact. The Division Bench did not discuss the basic issues about the
applicability of Section 9-A and whether on the facts of the case Section 9-A
has really any application. It was disposed of with the following observations:
employees concerned are workmen within the meaning of that term as defined
under Section 2(s) of the Act and withdrawal of construction allowance from
them tantamounts to a change in the conditions of service. In that view of the
matter, the management of the appellant company ought not to have withdrawn the
construction allowance presently paid to the employees without issuing notice
envisaged under Section 9-A of the Act." The inevitable conclusion,
therefore, is that both learned Single Judge and the Division Bench have failed
to consider the basic issues. In the normal course we would have left it to the
respondent to avail appropriate remedy under the Act.
because of the long passage of time (the writ petition was filed in 1997), the
attendant circumstances of the case in the background noted above and in view
of the agreement that this is a matter which requires to be referred to the
Tribunal, we direct that the appropriate Government shall refer the following
question for adjudication by the appropriate Tribunal:
Whether there was violation of Section 9-A of the Industrial Disputes Act, 1947
as claimed by the employees?
Whether the withdrawal of the construction allowance amounted to the change in
the conditions of service?
parties shall jointly move the appropriate Government with a copy of our
it is for the State Government to take a decision in the matter of reference
when a dispute is raised, the direction as noted above has been given in the
circumstances indicated above.
some cases, this Court after noticing that refusal by appropriate Government to
refer the matter for adjudication was prima facie not proper, directed
reference instead of directing reconsideration. (See Nirmal Singh v. State of
Punjab AIR 1984 SC 1619, Sankari Cement Alai Thozhilalar Munnetra Sangam v.
Management of India Cement Ltd. (1983) 1 Lab.L.J. 460, V. Veerarajan and others
v. Government of Tamil Nadu and Ors. (AIR 1987 SC 695), Sharad Kumar v. Govt.
of N.C.T. of Delhi (AIR 2002 SC 1724).
parties shall be permitted to place materials in support of their respective
stands. We make it clear that we have not expressed any opinion on the merits
of the case.
appeal is allowed to the aforesaid extent with no order as to costs.