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PETITIONER: BASTI SUGAR MILLS co. LTD.

       Vs.

RESPONDENT: STATE OF U.P. & ANR.

DATE OF JUDGMENT11/09/1978

BENCH: KRISHNAIYER, V.R. BENCH: KRISHNAIYER, V.R. DESAI, D.A.

CITATION:  1979 AIR  262            1979 SCR  (1) 590  1979 SCC  (2)  88

ACT:        Payment  of Bonus  Act 1965-Sec.  34-U.P.  Industrial Disputes Act,  -1947 s.  3(b) 3(c) Trade Unions Act 1926 (S. 2h) Whether  bonus can be paid under order passed under s. 3 of  U.P.  I.D.  Act-Whether  appointment.  of  a  Tripartite Committee amounts  to agreement  within meaning  of s. 31 of Bonus Act-Whether  an  association  of  employers  can  bind individual employer.

HEADNOTE:      The appellant runs two Sugar Factories at two different places. There  are about  71  such  factories  in  U.P.  The economy of  U.P. in  large measure  , depends  on the  sugar industry. Moreover,  sugar is  an essential commodity. Thus, these factories  and the  army of  workers employed  therein fall within  the strategic  sector  of  the  State  economy. Section 3 of the U.P. Industrial Disputes Act, 1947 provides that if  in the  opinion of the State Govt., it Iq necessary or expedient  so to  do for  securing the  public safety  or convenience or  the maintenance  of public order or supplies and services  essential to  the life of the community or for maintaining employnnent  it may  by general or special order make provision  for prohibiting  strikes lock-outs  and  for appointing committees  representative both  of employers and workmen for  securing amity  and good  relations between the employer  and   the  workmen  and  for  settling  industrial disputes by  conciliation. The  Payment of  Bonus Act,  1965 lays down  what bonus  is payable  to the workmen. Using the power under  S. 3(c)  of the  1947  Act  and  based  on  the suggestion of the State Labour Conference (Sugar), the State Govt. appointed  a  tripartite  committee  in  October  1968 consisting  of   3  nominees   of  the  Indian  Sugar  Mills Association and their. u representatives of the workmen, the Labour Commissioner  being Chairman  of the  Committee.  The notification under  s. 3  (b) who  issued we  have  view  to consider and  make  recommendations  to  Government  on  The question of  grant of  bonus for  1967-68 by  the Vacuum Pan Sugar Factories of the State  on the basis of the Payment of Bonus Act  1965, subject  to such  modifications as  may  be mutually agreed  upon. The  Association  is  a  Trade  Union registered under  the Trade  Unions Act, 1926. Its functions are indicated  in the definition of ’trade union’ in Section

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2(h) of  that  Act,  and  include  regulation  of  relations between the workmen and employers. Thus, the Association was within its  competence to  nominate three representatives to sit on  the Committee  to regulate the relations between the Member-employees and the  workmen employed. The appellant is a Member of the said Association.       The Committee held several sitting and at some stages, the appellant or his representative did participate directly or   indirectly   in   the   deliberations.   The   workers’ representatives actually accepted the formula put forward by the President of the Management’s Association. On receipt of the recommendation  under Section  3(c) the  Govt. issued an order under  s.  3(b)  implementing  Those  recommendations. Although section  3(b) does  not depend for Coming into play upon any  report under  5. 3(c),  the Govt.  constituted the Committee under  s. 3  (c) before taking any step under 5. 3 (b) as  a measure  to ensure  the fairness  to the concerned parties. The appellant filed a writ petition in 591 the High  Court. The learned single Judge dismissed the writ petition taking a view that an agreement which is recognised by s.  34 of  the Bonus  Act,  existed  in  this  case  and, therefore, the  order  which  merely  gave  effect  to  that agreement was  not bad  in law.  On appeal the two Judges of the Bench  disagreed and  the case  went  before  the  third learned Judge  of the High Court who upheld the order of the learned single  Judge  on  the  ground  that  there  was  an agreement under s. 34 of the Bonus Act.      The appellant contended:-        1.  The State  Govt. cannot  act in the area of bonus without breach  of the  embargo in  s. 34  of the Bonus Act, and, therefore, the impugned notification must fail for want of power.        2.  Since the  Bonus Act  is a complete Code covering profit sharing  bonus, no  other law  can  be  pressed  into service to force payment of Bonus by the Management.        3. Section 3(b) of the U.P. Act is independent of any agreement between  the affected parties and the notification there under  operates  on  its  own  and  not  by  force  of consensus  or   contract  between   the  workmen   and   the management. It  was, therefore,  wrong for the High Court to have salvaged  the notification  under s.  3(b) as embodying the agreement to pay bonus.       4. As a matter of fact, there was no agreement between the appellant  and the workmen within the meaning of section 34 since the representatives or the Association had no power to bind  its members  by any  agreement on bonus having been appointed  solely   to  make  certain  recommendations.  The appellant had  specifically informed the Association that it did not  agree to  any variation  from the approved balance- sheet of the Company. E      Dismissing the appeal the Court. ^      HELD: The effect of s. 34 is that anything inconsistent with the  Bonus Act  in any  other law  will bow.  and  bend before it.  If concluded  agreement could  be read  into the recommendations of tripartite committee relating to bonus it would  be   valid  despite   s.  34.  The  two  Courts  have accordingly found that there was an agreement. This Court is rarely   disposed   to   reverse   a   factual   affirmation concurrently reached by the High Court at two tiers. [601 A, B, D]        The  contention that  the authority of the tripartite committee  was  limited to  making  recommendations  on  the grant of  bonus subject  to such  modifications as  mutually

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agreed upon  is formally correct but why could the committee which had  representatives of both the wings of the industry not mutually agree upon bonus formula ? There was nothing in the notification prohibiting it. There was everything in the notification promoting  it. The  whole process was geared to mutually  agreed  solutions.  Once  the  representatives  of management and labour reached an agreement, substantially on the basis  of the Bonus Act, they would proceed to recommend to  Govt.  the  acceptance  of  that  agreement.  The  first notification did  not shut  out, but,  on  the  other  hand, welcomed mutual  agreement. As  between the  two  wings,  an agreement  materialised.   Then   it   became   Government’s responsibility effectively to resolve the crisis and behoved it to  rut teeth  into the  agreement by making it a binding order under  s. 3(b).  The Association  is a Trade Union. It can bind its members. The notifi-  4-549SCI/78 592 cation  under   s.  3(c)  itself  authorised  the  Committee consider the  grant of  bonus on terms mutually agreed upon. The authority  to reach agreement on behalf of the appellant is implicit under the notification under s. 3(b). Throughout the several  meetings and  investigations of  the tripartite Committee, the  appellant supplied all the facts and details sought concerning  the formulation and the data for arriving at an  acceptable solution. The formula of the Committee was based  largely   on  the  Bonus  Act.  What  the  employees’ representatives did was merely to accept the proposal of the President of  the Association  of  employers.  There  was  a written  agreement   dt.  5th   June,  1969   to  which  the representatives of  both sides  were signatories. To dismiss the whole  consensual adventure  and the culminating written agreement as  nothing but  an exercise  in recommendatory or advisory futility  is to  bid  farewell  to  raw  realities. Social  justice   is  made   of  rugged   stuff.  Industrial jurisprudence does  not brook  nice nuances  and torturesome technicalities to stand in the way of just solutions reached in a rough and ready manner. Broad consensus between the two parties does  exist here,  as is  emphatically underlined by the circumstances  that, all  the  mill  owners  except  the appellant have  stood by it and all the workers. There is no substance in  the submission of the appellant that there was no agreement  for payment  of bonus within the meaning of s. 34. [601 E-H, 602 F, G, 603 A-C, F]       Section 3 of the U.P. Act is not inconsistent with the Bonus Act.  The Bonus  Act is a long range remedy to produce peace. The  U.P. Act provides a distress solution to produce truce. The Bonus Act adjudicates rights of parties, The U.P. provision meets  an emergency situation on an administrative basis. [604 B-C]      These social projections and operational limitations of the two statutory  provisions must be grasped to resolve the legal conundrum.  A broad national  policy on bonus, however admirable, needs  negotiation, consultation, inter-state co- ordination and  diplomacy and  causes delay. Hungry families of restive  workman in militant moods urgently ask for bonus for onam  in Kerala,  Puja in  Bengal, Dewali in Gujarat, or other festivals  elsewhere for  a short  spell of cheer in a long span  of sombre  life. The  State Govt.  with  economic justice and  welfare of  workers brooding  order its head is hard pressed  for public  order and maintenance of essential supplies. [604 D-607 G, H]

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JUDGMENT:      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2148 of 1977.        Appeal  by Special  Leave from the Judgment and order dated 19-10-76 of the Allahabad High Court in Special Appeal No. 412 of 1971. .        Y.  S. Chitale,  S. Swarup  and Sri  Narain  for  the Appellants.        G.  N. Dikshit,  M. V.  Goswami and  o. P.  Rana  for Respondent No.       Yogeshwar Prasad, Miss Meera Bali and Rani Chhabra for Respondent No. 2.      The Judgment of the Court was delivered by       KRISHNA IYER, J. Undaunted by a direction of the State Government under  the Uttar Pradesh Industrial Disputes Act, 1947 (the U.P. 593 Act, for  short), unsuccessfully  attacked before  a learned Single  Judge   and  in  appeal    from  his  judgment,  the appellant-owner of  two sugar factories in Uttar Pradesh-has secured special  leave to  reach this Court and press before us  few   jurisdictional  points   which,  it’   valid,  are deprivatory us a few  impugned notification under s. 3(b) of the Act.  Before we  open the  discussion, and,  indeed,  as paving the  way for  it, we  may remind ourselves of a jural fundamental articulated  elegantly ill  a different  context by Mr. Justice Cardozo(1):        "More and more we lawyers are awaking to a perception of the  truth that  what divides  and distracts  us  in  the solution of a Legal problem is not so much uncertainty about the law  as uncertainty  About  the  facts-the  facts  which generate the  law. Let  the facts  be known as they are, and the law  will sprout  from the  need and  turn its  branches toward the light."          Social  realities  mould  social  justice  and  the compulsions of  social justice,  in  the  context  of  given societal conditions"  constitute the  basic facts from which blossom law which produces order.        The  search for  the social  facts behind s. 3 of the U.K.. Act  takes us  to the  Objects and Reasons Act set out therein:        "Following  the lapse  of Rule 81-A of the Defence of India Rules,  the Government of India enacted the Industrial Disputes Act, 1947 but this Act was found inadequate to deal with the spate of strikes, lock-outs and industrial disputes occurring  in  the  province.  Government  were,  therefore, compelled to  promulgate  the  United  Provinces  Industrial Disputes ordinance,  1947, as an emergency measure till more comprehensive Legislation on the subject was enacted.        Although  more than  two years  have passed since the termination of the war, normal life is still far from sight. There is  a shortage  of foodgrains  and all other essential commodities and  necessities of  life. Maximum production is required to  relieve the  common  want  and  misery.  Prices continue to be rising and life has become very difficult for the common  man. The  loss of every working hour adds to the suffering of  the community.  In these  circumstances, it is essential that Government should have powers for maintaining industrial peace  and production  and  for  the  speedy  and amicable settlement  of industrial disputes. The bill, which is similar  to the  ordinance already in force, provides for such powers."                                             (emphasis added)      (1)  Benjamin Nathan  Cardozo "what Medicine can do for      Law" address  before the  New York Academy of Medicine,

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    Nov. 1. 1928-Readings in law and Psychiatry. 594      The immediate concern of the court in this case is with s. 3  which, in  its opening  part, luminously  projects the State control  obligated by community well-being. Even here, we may read the relevant part of s. 3.        3.  Power to prevent strikes, lock-outs, etc.-If, ill the opinion  of the  State Government  it  is  necessary  or expedient  so  to  do  for  securing  the  public  other  or convenience or  the maintenance  of public order or supplies and services  essential to the life of the community, or for maintaining employment, it may, by general or special order, make provision-                                            (emphasis. added)           (a)  for prohibiting, subject to the provisions of                the order, strikes or lock-outs generally, or                a strike  or lock-out  in connection with any                industrial dispute;           (b)  for requiring  employers, workman  or both to                observe  for such period, as may be specified                in the order, I) such terms and conditions of                employment as may he determined in accordance                with the order;           (c)  for  appointing   committees,  representative                both  of   the.  employer   and  workmen  for                securing amity and good relations between the                employer  and   workmen  and   for   settling                industrial  disputes   by  conciliation;  for                consultation and  advice on  matters relating                to  production,   organisation,  welfare  and                efficiency:           (d)  for   constitution    and   functioning    of                Conciliation   Board    for   settlement   of                industrial disputes  in the  manner specified                in the order;                Provided that no order made under clause (b)-                (i)  shall require  an  employer  to  observe                     terms and  conditions of employment less                     favourable to  the  workmen  than  those                     which were  applicable to  them  at  any                     time within  three months  preceding the                     date of the order;        The testimony from these texts, which are part of the legislative  package,  is  the  critical  factor  underlying governmental order  in our constitutional system. An insight into it  is worth while  as a tool of interpretation of s. 3 of the U.P. Act and its harmonisation with s. 34 595 of the  Payment of  Bonus Act,  1965  (the  Bonus  Act,  for brief). A  A synthesis  of these  two statutes is the key to the problems  posed by  Shri Chitale  before us, arguing the case for the appellant.        When  crisis conditions  grip the community the first imperative of  good government,  ’order’, takes  precedence; and the  Executive transfixed  between ’govern’ or ’get out’ and guided  by  value  judgments  resorts  to  firm  action. Exigent solution of problems affecting the well-being of the have-nots,  in   a  social   justice  setting,   desiderates provisional directives  to the  haves to  disgorge payments, not as  final pronouncements  on  rights  but  as  immediate palliatives to  preserve the  peace, This is police power at its sensitive finest when State and society are con- fronted by  the   dilemma  of   ’do  or  die’.  And,  in  a  broader perspective, Governments  of the  Third World  must hear the voice  which   moved  the   objective  Resolution   in   the

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Constituent Assembly,  while seeking  light to  keep  loving peace:              ‘’The service of India means the service of the      millions  who  suffer. It  means the  ending of poverty      and   ignorance   and   disease   and   inequality   of      opportunity. The  ambition of  the greatest  man of our      generation has  been to wipe every tear from every eye.      That may  be beyond  us, but as long as there are tears      and sufferings, so long our work will not be over.(l) E        The  problems of  law are,  at bottom, projections of life.               "Law  is a  form of  order and  good law  must      necessarily mean good order."(2) We touch these chords because the roots of jurisprudence lie ill the  soil of  society’s urges,  and  its  bloom  in  the nourishment  from   the  humanity   it  serves.  To  petrify statutory construction by pedantic impediments and to forget the law  of all  laws, viz.  the welfare of the people is to bid farewell to the grammar of our constitutional order. Its practical application  arises in  the present  case.  Before going further  we sketch  the facts  of the present case and then on  to the larger principles, an understanding of which will unlock the crucial questions arising in the case.        The  appellant, as  stated earlier,  runs  two  sugar factories .  It two  different places.  There are  around 71 such factories  in   Uttar Pradesh  whose economy,  in large measure, depends on the sugar industry.      (1)  The Indian Constitution-Cornerstone of a Nation by      Granville Austin,      (2) Politica. Book VII  Chapter 4 Section 5. 596       Moreover, sugar is an essential commodity. Thus, these factories and  the any  of  workers  employed  therein  fall within the  strategic sector of the State economy. It is but natural that  Governments is  highly sensitive in the matter of maintenance  of sugar  supplies and the smooth working of the sugar  factories., Any  explosive situation in the shape of an  industrial dispute and any disruptive factor throwing out of  gear the  employment in  factories is  sure to throw into disarray public safety, public order, public production and distribution  system and  public employment, using these expressions in  their  social  connotation.  Roscoe  Pounds’ words are jurisprudentially apt : (1)               "Law  is; more than a set of abstract norms or      legal order.  It is  a process of balancing conflicting      interests and  securing the satisfaction of the maximum      wants with tile minimum friction."        And,  Paton has  set the  tone for  Part  IV  of  our Constitution to  be used  as background music, if we may say so:               "the  law itself cannot be impartial...for its      very raison  d’etre is to prefer one social interest of      another."(2)        As  was the  wont, presumably, there was apparently a clamour  in   1968  for  workers’  bonus  which  hotted  up, threatening community  tranquillity,  smooth supplies essential to the life of the community and maintenance of employment and public safety.        Every  industrial dispute  has a  potential for large scale breach  of the  peace when  the factories  and workmen affected are  numerous. But  the general  unrest induced  by industrial  demands   and  resistance   may,   on   critical occasions, blow  up unless  quia timet action to de-fuse are taken.  This   measure  has   necessarily  to   be  at   the administrative level, since the judicial process is prone to

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suffer  from   slow  motion.   The  U.P.  Legislature,  with comprehensive vision,  provided for  long-range adjudicative resolution of  industrial disputes  and short-run  executive remedies to pre-empt and contain outbreaks which may get out of control  once ignited,  and may  even cost human lives in the. ’firefighting’ police actions:               "A government ought to contain in itself every      power requisite  to  the  full  accomplishment  of  the      objects committed  to its  care, and  to  the  complete      execution of the trusts for      (1)  Interpretation of Legal History, p. 165, quoted in           "Criminal law  - Principles  of Liability by T. S.           Batra, p. 612‘.      (2)  A Text  Book of  Jurisprudence p.31,  quoted in  ’           Criminal Law  Principles of  Liability  by  T.  S.           Batra, p. 612. 597           which it  is responsible,  free from  every  other      control but  a regard  to the  public good  and to  the      sense of the people.(’) From this  angle, s.  3 has  been designed  as an  emergency provision to  be exercised in an excited phase of industrial collision.        Using the power under s. 3(c) of the Act and based on the suggestion  of the  state Labour  Conference (Sugar) the state  Government    appointed  a  tripartite  committee  in October, 1968  consisting of  three nominees  of the  Indian Sugar Mills  Association and  three representatives  of  the workmen, the  Labour Commissioner  being the Chairman of the Committee. The  notification under s. 3(c) Was issued with a view to-               "consider  and  make  its  recommendations  to      Government on  the question of grant of bonus for 1967-      68 to workmen by the Vacuum pall Sugar factories of the      State on  the basis  of the  Payment of Bonus Act 1965,      subject to such modifications as may be mutually agreed      upon."(2)       No one, at any stage, has assailed the presence of the statutory preconditions of social urgency. We proceed on the footing that  a flare-up  was in  the offing  and the  state acted to pre-empt a break-down.      It is pertinent to note that the Association is a trade union registered  under the  Trade  Unions  Act,  1926.  Its functions are  indicated in  the definition of "trade union" in s.  2(h) of that Act and include regulating The relations "between workmen  and employers".  Thus, the Association was functionally  within   its  competence   to  nominate  three representatives to  sit on  the Committee  to  regulate  the relations  between  the  member-employers  and  the  workmen employed. The appellant is a member of the said Association.      It is significant to remember that the State Government constituted the  tripartite committee  under s,  3(c) as  an emergency   measure before taking steps under s. 3(b) of the Act so  that it  may inform  itself  in  a  responsible  way through the  recommendations made  by  the  Committee  which represents  both the wings of the industry. Although s. 3(b) does not depend, for coming into play, upon any report under s. 3(c)  this was  a  measure  to  ensure  fairness  to  the concerned elements. The Committee held several sittings and, at some  stages, the  appellant or  his  representative  did participate directly  or indirectly  in  the  deliberations. Equally relevant  is  the  circumstance  that  the  worker’s representatives      (1)  The Administration  of  Justice-Melvin  P.  Sikes,      Chapter 7, Pawns of Politics and of power, P. 120

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    (2)  Notification dated  17.10. 1968  of the U.P. Govt.      Labour (C) Dept. 598 actually accepted  the formula  put forward by the President of  the   Managements’   Association.   We   mention   these circumstances to  indicate that  the scales, if at all, were tilted in  favour of  the mill  owners  and  Government,  on receipt of  the recommendations  and anxious  to freeze  the situation, issued  an order  under s. 3(b) incorporating and implementing those  recommendations. That notification which was impugned  before the High Court and is challenged before us reads:               "WHEREAS  on the  recommendations of the state      Labour Tripartite  Conference (Sugar)  held on June 16,      1968, a  Committee was  constituted  under  Labour  (C)      Department, notification  No.  7548(HI)XXXVI-C-109(HI)/      68, dated October 17, 1968, to consider the question of      grant of  bonus for the season 1967-68 to their workmen      by the  vacuum pan  sugar factories of the state on the      basis of the Payment of Bonus Act, 1965 subject to such      modifications as  may be  mutually agreed  upon and  to      make its recommendations.               AND WHEREAS, the said Committee has considered      this question  in various  meetings  the  last  meeting      having been held on June 5? 1969, and has submitted its      recommendations to the state Government:               AND  WHEREAS, the said Committee has succeeded      in bringing about an agreement in regard to the payment      of  bonus   for  the   season   1967-68   between   the      representatives of employers and employees on the basis      of  Payment   of  Bonus   Act,   1965,   with   certain      modifications   and    adjustments   and    has    made      recommendations on  the subject  accordingly which have      been accepted by the state Government:               AND  WHEREAS, in  the  opinion  of  the  state      Government   it    is   necessary    to   enforce   the      recommendation of  the said  Committee for securing the      public convenience  and the maintenance of public order      and supplies  and services essential to the life of the      community and for maintaining employment;              NOW, THEREFORE, in exercise of the powers under      clause (b) of section 3 of the U.P. Industrial Disputes      Act, 1947  (U.P. Act  No. XXVIII of 1947), the Governor      of Uttar Pradesh is pleased to make the following order      and to  direct with reference to section 19 of the said      Act that  the notice of this be given by publication in      the office Gazette; 599                            ORDER      xx             xx                     xx               2.  (a) All  the Vacuum Pan Sugar Factories in      the state  whose  names  have  been  mentioned  in  the      Annexure  ’A’   except  the  Kisan  Co-operative  Sugar      Factory, Majhola  (Pilibhit), shall  pay bonus  for the      year 1967-68 to all their employees, permanent seasonal      or temporary  including contract labour who have worked      for not  less than  30 working  days in  the accounting      year 1967-68;      xx xx xx The  High  Court  repelled  the  challenge  and  upheld  the notification,  taking   the  view   that  an   agreement  as recognised in  S. 34  of the  Bonus Act existed in this case and so  the order which merely gave effect to that agreement was not bad in law.        The main ground of attack before us is that the state

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Government cannot act in the area of bonus without breach of the embargo  in s.  34 of  the Bonus Act and so the impugned notification must  fail for  want of power. Although this is the thrust of the submission, Shri Chitale has trichotomised it, as  it were.  First, the Bonus Act being a complete Code covering profit-sharing  bonus, no  other law can be pressed into service  to force  payment of bonus by the managements. Secondly, s.3(b)  of the  U.P. Act  is  independent  of  any agreement between  the affected parties and the notification thereunder operates on its own and not by force of consensus or contract between the workmen and the managements. In this view, it  was wrong  for the High Court to have salvaged the notification under  s. 3(b? as embodying an agreement to pay bonus. The  third submission  of counsel  was that ac a fact there was no agreement between the appellant and his workmen within the  scope of  s. 34  of  the  Bonus  Act  since  the representatives of  the Association had no power to bind its members by  any agreement  on bonus,  having been  appointed solely  to   make  certain  recommendations.  Moreover,  the appellant had  specifically informed  the representatives of the Association  that it did not agree to any variation from the approved  balance-sheet of the company and had withdrawn its consent  to the  formula which  found  favour  with  the Committee, Finally,  though feebly, it was argued that if an agreement could  be spelt  out under  s. 34 of the Bonus Act enforcement should  be left  to s. 21 of that Act and not to the punitive recovery provisions of the U.P. Act. 600        The Single Judge of the High Court dismissed the writ petition  reading   an  agreement   into   the   Committee’s recommendations and  the eventual order under s. 3(b) of the Act. This  agreement was  valid under  s. 3(b)  of the Bonus Act. On  appeal, the  Two Judges  on the Bench disagreed and the case  went before  a third  Judge, who  in an  elaborate judgment, agreed  with the  learned Single  Judge and upheld the order  of the  Government as an agreement under s. 34 of the Bonus  ACT. We  now proceed  to discuss  the  merits  of counsel’s contentions.        We focus our attention on two principal facets of the question. They  are (a) whether s. 3(b) is inconsistent with the Bonus  Act; and  (b) whether  an  agreement  within  the meaning of  S. 34(1)  (as the law then stood) could be spelt out of the facts of the present case.        There  is no challenge to the competence of the state Legislature to  enact s. 3 of the Act. Indeed, more than one item in  Lists II  and III  will embrace  legislation of the pattern of  s. 3.  Even so the short point sharply raised by Shri Chitale  is that  Parliaments having  enacted the Bonus Act in 1965, occupied that part of industrial law, and s. 34 in terms contains a non-obstante clause. That section reads:        Effect  of laws  and agreements inconsistent with the Act.               34.  (1) Save  as otherwise  provided in  this      section, the  provisions of  this Act shall have effect      notwithstanding   anything    inconsistent    therewith      contained in  any other law for the time being in force      or in  the terms of any award, agreement, settlement or      contract of service made before the 29th May, 1965.              34. (2)........................................       ......................................................       ......................................................       ......................................................               34.  ( 3 ) Nothing contained in this Act shall      be constructed  to preclude  employees employed  in any      establishment or  class of establishments from entering

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    into agreement with their employer for granting them an      amount of bonus under a formula which is different from      that under this Act:       Provided that any such agreement whereby the employees relinquish their right to receive the minimum bonus 601      under section  10 shall  be null and void ill so far as      it purports to deprive them of such right."      The  effect   of  this   provision  is   that  anything inconsistent with  the Bonus  Act contained in any other law will bow and bend before it. Secondly, agreements made after 29th May  1965 will be valid regarding bonus even if they be inconsistent with the formulae in the bonus Act.      Shri Chitale  did not dispute the proposition that if a concluded agreement  could be  read into the recommendations of the  tripartite Committee  relating to Bonus, it would be valid despites.  34; but  he urged  before us  that  it  was impossible to weave out of mere recommendations the web of a concluded  contract   on  bonus.  He  canvassed  before  us, further, that  if an  agreement  on  bonus  was  necessarily inferable from  the proceedings of the tripartite committee, the enforcement  thereof could  be only  under s.  21 of the Bonus Act  and not by reliance on the more drastic processes of the U.P. Act.      A torrent  of objective  circumstances has  emerged  in this case  to wash  out these  submissions.  This  Court  is rarely   disposed   to   reverse   a   factual   affirmation concurrently reached  by the  High Court  at two tiers. Even so, we  may rush  past the  more potent  circumstances which have a  compulsive  force  in  arriving  at  the  conclusion aforesaid.      Shri Chitale  stressed that  the Committee itself had a functional limitation writ on the face of the order under s. 3(c) .  Its authority  was limited to making recommendations on the  grant of bonus for 1967-68 on the basis of the Bonus Act, subject  to such modifications as mutually agreed upon. Formally, this is correct. But why could the Committee which had representative  of both  the wings  of the  industry not mutually agree  upon a  bonus formula ? There was nothing in the notification prohibiting it. There was everything in the notification promoting  it. The  whole process was geared to mutually   agreed    solutions.   Of    course,   once   the representatives  of   managements  and   labour  reached  an agreement, substantially on the basis of the Bonus Act, they would proceed  to recommend  to Government the acceptance of that agreement.  The notification under s. 3(c) contemplated mutual   agreement upon  bonus as  the first  step  and  the recommendation of the formula so reached as the second step. The  good  offices  of  the  Labour  Commissioner  was  also available. In  short, the  first notification  did not  shut out, but,  on the  other hand, welcomed mutual agreement. As between the  two wings,  an agreement  materialised. Then it became Government’s  responsibility effectively  to  resolve the crisis and behoved it to put teeth into the agreement by making it a binding order under s. 3(b). Thereafter, the arm of the law, as provided in the U.P. Act. 602 went into  action if  there was violation. The object of the Government  being   to  keep  the  peace  and  to  interdict disruption it  did not rest content with an agreement within the meaning  of s.  34 and resort to the leisurely processes of s.  21. Exigent situations demand urgent enforcement; and therefore government  went a step further than the agreement and  embodied   it  in   an  order   under  s.   3(b).  This incorporation in a notification under s. 3(b) did not negate

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the anterior  agreement between  the parties.  The order  of Government under  s. 3(b)  makes the  dual stages  perfectly plain.  For  instance,  there  is  the  following  tell-tale recital  "Whereas   the  said  Committee  has  succeeded  in bringing about  an agreement  in regard  to the  payment  of bonus for  the season 1967-68 between the representatives of the employers and employees on the basis of Payment of Bonus Act, 1965,  with certain  modifications and adjustments". In unmincing  language,   the  notification   states  that   an agreement on  the payment  of bonus  has  been  successfully brought about  substantially on  the lines of the Bonus Act. In the  same notification, Government proceeds to state that the said  agreement has been forwarded to it in the shape of recommendations which  have been  accepted and  enforced  in exercise of  the powers  conferred by  clause (b) of s. 3 of the Act.  The anatomy  of the order under s. 3(b) being what we have  explained above,  the inference  is inevitable that there is a clear agreement in regard to the payment of bonus for the  relevant season between the employers and employees and ingenious argument cannot erode that effect.      The next  limb of  the argument of Shri Chitale is that in fact there is no evidence of his. client having authorise the representatives  of the Association to act on its behalf in agreeing  to the  bonus formula.  On the contrary, he had withdrawn the  authority  originally  conferred.  We  cannot agree with  this specious,  though plausible, submission. lt admits of  no doubt  that the  Association is  a trade union registered under  the Trade  Unions Act  and the  functional competence  of  a  trade  union  definitionally  extends  to regulating the  relations between  workmen and employers. S. 2(h) to  negotiate an  agreement on. payment of bonus surely falls within  the  scope  of  regulation  of  the  relations between  the   workmen  and  the  employers.  Secondly,  the notification under  s. 3(c)  itself authorises the Committee to consider  the grant  of bonus  on terms  mutually  agreed upon.  Authority   to  reach  agreement  on  behalf  of  the managements is  thus implicit  in the  notification under s. 3(c). Moreover,  the Association,  having  the  capacity  to represent all  the members within the area of its authority, sat on  the committee  though its representatives and became effective proxies  of  the  appellant  was  present  in  the tripartite Conference  at Naini  Tal on June 16, 1968 and it was at that Conference the decision to set up 603 the Committee  was made  and a  resolution  to  that  effect passed, leading  to the  notification of  October 17,  1968. Moreover, throughout the several meetings and investigations of the  tripartite Committee. the appellant supplied all the facts and  details sought concerning the formulation and the data for  arriving at an acceptable solution. The formula of the Committee was based largely on the Bonus Act itself with some variation regarding the valuation of the closing stock. Importantly, what  the employees‘  representatives  did  was merely to  accept the  proposal  of  the  President  of  the Association of  employers. There  was  a  written  agreement dated June 5, 1969 to which the representative of both sides were signatories.  To dismiss the whole consensual adventure and the  culminating written  agreement as  nothing  but  an exercise in  recommendatory or  advisory futility  is to bid farewell to raw realities. Industrial jurisprudence does not brook nice  nuances and  torturesome technicalities to stand in the  way of  just solutions  reached in a rough and ready manner. Grim  and grimy life situations have no time for the finer manners  of elegant  jurisprudence. Social  justice is made of  rugged  stuff.  Broad  consensus  between  the  two

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parties does  exist here,  as is  emphatically underline  by circumstance that  ’all the mill owners except the appellant have stood  by it-and all the workers’. Where social justice is the  touch- stone,  where industrial  peace is  the goal, where the  weak and  the strong  negotiate to reach workable formulae unruffled  by the  rigidities and formalisms of the law of contracts, it is impermissible to Frown down the fair bonus agreement reached by the representatives of both camps and accepted  by the  employees in  entirety and  the  whole block  of   employers  minus  the  appellant,  on  a  narrow construction of  the notification under s. 3 (b) of the U.P. Industrial Disputes Act, 1947 or s. 34’. Of the Bonus Act or s. 2(c)  of the  Contract Act.  Labour law is rough hewn and social justice  sings a  different tune.  We reject, without hesitation, the  appellant’s submission  that there  was  no agreement for  payment of  bonus within the meaning of s. 34 of the  Bonus Act  and affirm  the concurrent finding of the High Court on that issue.      The second  seminal problem  of power  that  falls  for consideration here  has deeper  jurisprudential  import  and wider  political   constitutional  portent,   so   much   so decisional elucidation  becomes necessitous.  We have stated earlier that  s. 34  of the  Bonus Act  has  a  monopolistic tendency of  excluding other  laws vis-a-vis  profit-sharing bonus. The  basic condition  for nullification  of s.3(b) of the U.P.  Act is  that. when it enters the area of bonus, it is inconsistent   with  the provisions  of  the  Bonus  Act. "Inconsistent", according to black’s Legal Dictionary, means ’mutually repugnant  or contradictory;  contrary, the one to the other  so that  both cannot stand, but the acceptance or establish 604 ment of the one implies the abrogation or abandonment of the other’. So  we  have  to  see  whether  mutual  co-existence between s.  34 of  the Bonus Act and s. 3(b) of the U.P. Act is impossible. If they relate to the same subject-matter, to the same  situation, and  both substantially overlap and are co-extensive and  at the same time so contrary and repugnant in their terms and impact that one must perish wholly if the other were  to prevail  at all-then,  only  then,  are  they inconsistent. In  this sense,  we have  to examine  the  two provisions. Our  conclusion, based on the reasoning which we will presently indicate, is that ’inconsistency’ between the two provisions  is the  produce of ingenuity and consistency between the  two laws  flows from imaginative under standing informed by administrative realism. The Bonus Act is a long- range remedy  to produce  peace; the  U.P.  Act  provides  a distress solution to produce truce. The Bonus Act adjudicate rights of  parties; The  U.P. provision  meets on  emergency situation  on   an  administrative   basis.   These   social projections and operational limitations of the two statutory provisions must  be grasped  to resolve the legal conundrum. When ’the  sequestered vale of life’ is in imminent peril of disruption immediate tranquillisers are the desideratum. The escalating danger  to law  and order,  to public  safety, to maintenance  of  supplies  essential  to  the  life  of  the community, the break-down of production and employment-these anti-social consequence  of ’the  madding  crowds’  ’ignoble strife’ are  sought to  be controlled by a quick shot in the arm by use of s. 3(2). It is a balm for the time, not a cure which endures. Indeed, it is an administrative action, not a quasi-Judicial determination.  We may easily visualise other explosive occasions  which traumatise society and so attract s. 3(b).      The specific  fact-situation which confronted the State

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must be seen in perspective. Labour and capital are partners in production.  When one of the partners numerous but needy, demands a  share in the profits, beyond wages, to better its lot, industrial  legislation chalks  out rights  and limits, prescribes formulae,  creates adjudicatory machinery, awards are made,  reviewed and  enforced and  parties  seek  social justice through  the judicial  process. The  Bonus Act, read with the  Industrial Disputes  Act, codifies  this branch of rights and  remedies. But it is a notorious infirmity of the noble judicative methodology that adherence to certain basic processual norms makes procrastinatory delay a besetting sin and an  inevitable evil.  The end  product is  good were  it delivered  promptly   but  the   operation  tantalises   and sometimes self-defeats.      The  working   class  though   a  weaker   class,  when organised, is  militant. Their  privations are too desperate to stand delay Policy formu- 605 lation by  Government  takes  time,  involves  consultation; adjudication involves long hearing and appeal upon appeal.      The discussion  of legal  prophylaxis as  part  of  the dynamics of  Jurisprudence becomes  relevant at  this stage. Necessity is the mother of tension; tension frays temper and maddened men  turn violent.  When both  sides are psyched up into  frenzy,   public  safety,   maintenance  of  essential supplies, people’s  employment and  societal order  become.. casualties.  A  wise  administration  anticipates  and  acts before the  flams spread. Once the industrial war is sparked off, the  use of  force become  unobviale. And  police force pitted against mob fury may mean blood and tears. And Indian lives in  Free India,  even  though  of  workers,  are  more precious  than   the  profits   of  the   corporate  sector, Confronted by  escalating disorder,  the wise  ruler  cannot afford wait  for lethargic  legal  justice  to  deliver  its verdict but  armed with crisis pouters and anxious to arrest a blow-up,  adopts administrative  nostrums which give quick relief but  do not  frustrate ultimate  justice. Prophylatic processes   are    not   the   enemy   of   normative   law. Sociallyoriented prompt  action tranquillises  where- drift, vacillation and  inaction may  traumatize. Section  3 serves this   limited    purpose   of   legalising   administrative intervention  to   prevent  disorder  without  prejudice  to judicial justice  which will  eventually be  allowed to take its course.  An order  under Sec.  3(b) is administrative; a proceeding under  the Bonus  Act  is  judicial.  The  former manages a  crisis, the latter determines rights. Even when a direction under. the exigency power involve payments towards bonus or  other claim  it never  can possess finality and is subject  to   judicial  decision-except,  of  course,  where parties agree to settle their claims, and then the agreement gives it vitality.      The jural  scheme of  Sec. 3 is duel, each operating in its own  stage and  without contradicting  the power  of the other. The  first say,  in crisis management, belongs to the administrator; the  last word  in settlement  of substantive rights belongs  to the  tribunal. The pragmatic dichotomy of the law  is flexible  enough not to put all its peacekeeping eggs in  the  judicial  basket.  Government  acts  when  the trouble brews  and when  the storm  has blown over, judicial technology    takes     over.    There    are    no    rigid compartmentalisations.  Sometimes,   the  judicial   process itself has  quick-acting procedures. Likewise, sometimes the executive prefers to consult before going into action. Under our constitutional order, guidelines are given by the status to ensure  reasonableness in administrative orders. And in a

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Government with  social  justice  as  the  watchword,  value judgments are  essential to  exclude arbitrariness. So it is that the executive power under Sec. 3 606 has the  leading strings  writ right  at the  top. The power shall be  used only for ’public safety or convenience or the maintenance  of  public  order  or  supplies  and  services’ essential to  the life  of the  community or for maintaining employment. It  prevails for the nonce, produces (hopefully) tentative truce,  and  then  the  judicial  process  decides decisively. It  is like  an executive  magistrate passing  a prohibitory order  regarding disputed  possession or  unruly assembly to prevent breach of the peace and making over to a judicial magistrate  to hear  and decide  who is  in  actual possession or whether the restriction on movement was right. Or, maybe,  it is  like a  magistrate quickly passing orders regarding a possessory dispute leaving it to the civil court to  adjudicate  on  valid  title.  No  one  can  argue  that preventive magisterial  power, admittedly  provisionally and reasonably.  is   inconsistent  with   the  civil   judicial machinery which speaks finally.      Dealing with  the identical  provisions in an identical situation where dn appeal reached this Court and the parties were identical,  Mudholker,  J.,  speaking  for  the  Court, explained the  scheme or the same Section(1) 3 and its scope which fits  into the  pattern we have explained. The learned judge observed(2):-           "The opening  words of  s. 3  themselves  indicate      that the  provisions thereof are to be availed of in an      emergency.  It  is  true  that  even  reference  to  an      arbitrator or a conciliator could he made only if there      is an  emergency. But  then an  emergency may be acute.      Such an  emergency  may  necessitate  the  exercise  of      powers under  cl. (b)  and a mere resort to those under      cl. (d)  may be  inadequate  to  meet  this  situation.      Whether to resort to one provision or other must depend      upon  the   subjective  satisfaction   of   the   State      Government upon  which powers  to act  under s.  3 have      been conferred  by the  legislature. Dealing  with  the      canons of  statutory  construction  the  learned  judge      observed: No doubt this result is arrived at by placing      a particular  construction on  the provisions  of  that      section but  we think  where justified  in doing so. As      Mr. Pathak  himself suggested  in  the  course  of  his      arguments, we must try and construe a statue ill such a      way, where  it is  possible to  so construe  it, as  to      obviate a  conflict between  its various provisions and      also so  as  to  render  the  statute  or  any  of  its      provisions constitutional. By limiting the operation of      the provisions of cl. (b) to an      (1) An amendment to Sec 3 (e) has since been made.      (2)  [1961] 2  SCR 330 at 342-343, State of U.P. & Ors.           v. Basti Sugar Mills Co. Ltd. 607      emergency we  do not  think that  we are doing violence      assuming that  the width  of the  language could not be      limited by  construction it  can be said that after the      coming into  force of  the Constitution  the provisions      can, by  virtue of  Art. 13, have only a limited effect      as stated  above  and  to  the  extent  that  they  are      inconsistent with  the  Constitution,  they  have  been      rendered void.           In the strain, the court rebuffed the unreasonable      argument based  on ’reasonableness’  in Art.  19(6): In      our view,  therefore, the provisions of cl. (b) of s. 3

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    are not  in any  sense alternative  to those of cl. (d)      and that  the former  could be  availed of by the State      Government only  in an  emergency and  as  a  temporary      measure. The  right of  the employer or the employee to      require the  dispute to be referred for conciliation or      adjudication  would   still  be   there  and  could  be      exercised by them by taking appropriate steps. Upon the      construction we  place on  the provisions of cl. (b) of      S. 3  it is clear that no question of discrimination at      all arises. Similarly the fact that action was taken by      the Government  in all emergency in the public interest      would be  a complete answer to the argument that action      is violative  of the  provisions of Art. 19(1) (g). The      restriction placed  upon the  employer by such an order      is only  a temporary  one and having been placed in the      public interest  would fall under cl. (6) of Art. 19 of      the Constitution".                                             (emphasis added)      In a  practical sense,  this dichotomous reconciliation has humanistic value in administration. Let us take the case of  bonus.   A  broad  national  policy  on  bonus,  however admirable, needs  negotiation, consultation  inter-state co- ordination,  diplomacy   and  causes   delay.  Likewise,  an industrial adjudication  on bonus, with all the trappings of natural  justice,  appeal  and  writ  proceedings,  consumes considerable time.  Hungry families  of restive  workers  in militant moods  urgently ask  for bonus  for Onam in Kerala, Pooja  in  Bengal,  Dewali  in  Gujarat  or  other  festival elsewhere, for  a short  spell of  cheer in  a long  span of sombre life. The State Government, with economic justice and welfare of  workers brooding  over its head, is here-pressed for public  order and  maintenance  of  essential  supplies. Immediate action  may take  trigger-happy policing, shape or emergency direction to make ad hoc payments, worked out in 5-549SCI/78 608 administrative fairness.  This latter  course may  often  be favoured, given  the correct orientation. But even here some governments may prefer to confer, persuade parties to concur and make  binding order.  This requires legislative backing. So Sec.  3. But such an improvised solution may leave one or the other  or even both dissatisfied with regard to ultimate rights. While  enforcing the  ad interim  directive  by  the authority of  law, the  door is left ajar for judicial take- over of  the industrial  dispute. If  workers have got more, the excess  will have  to be adjusted; if less the employers will pay  over. This  will be  taken care of by Section 3(e) (before amendment)  and by  the Bonus  Act now.  A crisis is best solved  by this  procedure at the State level on a fair administrative basis.  But lasting policy solutions are best produced at  the Central level and final rights crystallised at the  tribunal level. The lengthy judicial process may, as here,  be  obviated  if,  by  a  tripartite  arrangement  an agreement within  the scope  of s.  34 of  the Bonus  Act is reached.      The ruling  of this  court in  State of  U.P. & Anr. v. Basti Sugar Mills Co. Ltd. (Supra) supports the synthesis we have evolved.  The only  difference is  that there is now Mo reference of a bonus dispute under S. 3 (e) of the U.P. Act. Instead,  the   same  dispute  will-where  no  agreement  or settlement  stands   in  the   way,  as   it  does   here-on application, be  referred for  adjudication under  the Bonus Act read with the Industrial Disputes Act, 1947.      The analysis  shows the  absence of basic inconsistency and presence  f intelligent  method  in  the  U.P.  and  the

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Central provisions.      We hold.  after this long tour, that the goal of social justice and  public peace,  essential to  good Government is best reached  by reading  together and  not apart.  The High Court’s order is upheld and the appeal dismissed, of course, with costs. P.H.P.                                     Appeal dismissed. 609