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CASE NO.: Appeal (civil)  3006 of 2003

PETITIONER: Hindustan Steel Works Construction Ltd. and Anr.                                                      

RESPONDENT: Hindustan Steel Works Construction Ltd. Employees Union

DATE OF JUDGMENT: 11/08/2005

BENCH: ARIJIT PASAYAT & H.K. SEMA

JUDGMENT: J U D G M E N T

ARIJIT PASAYAT, J.  

       Hindustan 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.   

       Factual aspects need to be noted in brief are as  follows:

       Employer 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 certain circumstances.

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       Questioning 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.

       The 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 view.   

       In 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.   

       In 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.   

       In a 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.

       In 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).

       In Premier Automobiles Ltd. case (Supra) it was

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observed as follows:  

"A 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.   These forums are empowered to grant such  relief as they think just and appropriate.   They 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".

       Section 9-A of the Act reads as follows: "9-A 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, -  (a) without 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  (b) within twenty-one days of giving such  notice :  Provided that no notice shall be required for  effecting any such change -  (a) where the change is effected in pursuance  of any (settlement or award); or  (b) 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

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(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. But 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

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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:

"It 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:

"The 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.

       However, because of the long passage of time (the writ  petition was filed in 1997), the attendant circumstances of

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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:   

(1) Whether there was violation of Section 9-A of the  Industrial Disputes Act, 1947 as claimed by the  employees? (2)     Whether the withdrawal of the construction allowance  amounted to the change in the conditions of service?

       The parties shall jointly move the appropriate  Government with a copy of our judgment.

       Normally, 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.  

       In 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).    

       The 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.

       The appeal is allowed to the aforesaid extent with no  order as to costs.