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PETITIONER: INDIAN OXYGEN LTD.

       Vs.

RESPONDENT: STATE OF BIHAR & ORS.

DATE OF JUDGMENT16/02/1990

BENCH: SHETTY, K.J. (J) BENCH: SHETTY, K.J. (J) KULDIP SINGH (J)

CITATION:  1990 AIR 1006            1990 SCR  (1)  57  1990 SCC  (2) 254        JT 1990 (1)   212  1990 SCALE  (1)196

ACT:     Bihar  Industrial Establishments (National and  Festival Holidays and Casual Leave) Act, 1977/Bihar Industrial Estab- lishments  and  Festival Holidays and  Casual  Leave  Rules, 1979:  Section 3 and 13/Rule 3--National and Festival  holi- days--Whether International Labour Day (1st May) should be a paid  holiday in addition to holidays allowed under  settle- ment between employees and management.

HEADNOTE:     The  appellant--a Public Limited Company had two  estab- lishments  in the State of Bihar. The holidays available  to the employees of the appellant-company were provided by  the settlement  dated 14th March, 1971. The settlement  provided for  a total number of 18 holidays for office staff  and  14 holidays for the factory staff.     There  was  a  dispute between the  management  and  the employees  as to whether the International Labour  Day  (1st May)  which  was declared as a mandatory holiday  under  the Bihar  Industrial  Establishments  (National  and   Festival Holidays and Casual Leave) Act, 1977 should be a paid  holi- day in addition to the existing holidays. While the  manage- ment  wanted to declare 1st May as holiday by adjusting  the holidays  allowed in the settlement, employees wanted it  to be  given  as  an additional  holiday.  Negotiations  having failed  and the conciliation officer being unable  to  bring about  settlement,  the statutory authorities  directed  the company  to  declare 1st May as holiday in addition  to  the holidays  provided  for in the  settlement.  The  appellant- company  filed a writ Petition before the High Court,  chal- lenging  the  direction of the authorities.  Dismissing  the Writ  Petition, the High Court held that the holiday on  1st May  prescribed  under the Act being compulsory  in  nature, must be in addition to the privileges already granted to the workmen under the agreement. Hence the appeal by the  Compa- ny. Allowing the appeal, by special leave, this Court.     HELD: Section 3 of the  Bihar Industrial  Establishments (National and Festival Holidays and Casual Leave) Act,  1977 provides  for  three National  holidays,  one  International Labour Day and four

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403 festival  holidays.  It thus statutorily  fixes  eight  paid holidays;  for  out of them are left to the  choice  of  the management and employees for festival occasions. These eight holidays, however, are not in addition to the holidays  that are  mutually  agreed upon in the settlement. They  are  the minimum holidays which the employees are entitled to. If the employees are entitled to more than eight holidays under any contract  or usage applicable to the said establishment,  or under  any  other  law for the time being  in  force,  those rights  and privileges are saved by Section 13. This is  the requirement of the statute. [407B-D]     In the present case, the festival holidays have not been identified  or specified in the Settlement. They have to  be selected  and declared as holidays with notice to  employees every  year.  It is only three National holidays  that  have been  specified therein in addition to Vishwakarma Puja  day for  ’the factory staff and factory general staff. Now,  the statute prescribes the same three National holidays, besides International  Labour  Day and four festival  holidays.  But these 8 holidays are not to the exclusion of or in  addition to  the total number of holidays agreed upon under the  set- tlement.  The total number of 14 holidays under the  settle- ment as against 8 holidays under the statute remains  undis- turbed by section 13 of the Act since it is more  favourable to the employees than the rights and privileges conferred by the  Act. That being the position, the management  would  be entitled  to adjust the International Labour Day as  a  paid holiday  within the fourteen days allowed under the  settle- ment.  The  demand  of the employees that it  should  be  in addition  to fourteen days has no support either  under  the settlement  or by the terminology of the  statute.  [468E-H; 469A]     Tata Oil Mills Co. v. K.V. Gopalan & Ors., [1966] 3  SCR 760, referred to.

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 1130  of 1990.     From the Judgment and Order dated 19.6.1989 of the Patna High Court in L.P.A. No. 51 of 1987. G.B. Pai, S.K. Patri and J.R. Das for the Appellant.     Dr.  S.K. Ghose, Mrs. M. Qammaruddin and M.  Qammaruddin (NP) for the Respondents. The Judgment of the Court was delivered by 404 K. JAGANNATHA SHETTY, J. Special Leave granted.     Whether  International  Labour Day (1st May)  should  be paid  holiday in addition to the existing holidays  for  the employees of the appellant Company is the sole question  for determination  in  this appeal. The appellant  is  a  public limited  company  having  manufacturing  units  and  selling outlets in the different parts of the country. In the  State of  Bihar  the company has an establishment  at  Mona  Road, Burma Mines, Jamshedpur manufacturing Industrial and Medical Cases  and there is another establishment located at  Ranchi manufacturing liquid Oxygen Explosives.     The holidays available to the employees of the company’s establishment are provided by the settlement dated 14  March 1971.  The  settlement  provides for a total  number  of  13 holidays  for office staff and 14 holidays for  the  factory staff. The relevant portion of the settlement reads: "Provision of Settlement dated 14.3. 1971

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ARTICLE: Leave and Holidays (c)  The number of National/Festival Holidays to  which  the factory staff and factory general staff are entitled will be enhanced from the present number of 10 to 14 days  including 3  National  Holidays viz. Republic Day,  Independence  Day, Mahatma Gandhi’s birthday and Viswakarma Puja. (d) The number of National/Festival holidays for office  and office general staff will be enhanced from 17 to 18 days per calendar  year including 3 National Holidays  viz.  Republic Day, Independence Day and Mahatma Gandhi’s birthday."      In   1977, the State of Bihar enacted the Bihar  Indus- trial  Establishments  (National and Festival  Holidays  and Casual Leave) Act, 1971 (Act No. 17 of 1977) (called shortly as the ’Act’) making provisions for National/Festival  holi- days  and  casual leave for workers. We are  concerned  with Sections 3 and 13 of the Act which must be set out in full: "Section 3 405 National and Festival Holidays: (1) Every employee shall be granted following in each calen- dar year in such manner and on such terms and conditions  as may be prescribed: (a) Three National Holidays on the 26th January, 15th August and 2nd October. (b) Four other holidays on any festival out of the festivals mentioned in the schedule. (c) International Labour Day on 1st May. (2) The Government may add to or exclude a festival from the Schedule  by a notification in the official Gazette  and  on publication  of  such notification, the  Schedule  shall  be deemed to be amended accordingly." Section 13 of the Act . "Right and privileges Under any other law not to be  affect- ed:--Where  any employee of an industrial  establishment  is entitled  to such rights and privileges under any other  law for the time being in force or under any contract or  custom or usage applying to the said establishment, which are  more favourable  to him, than any right and privileges  conferred by this Act, nothing contained in this Act shall affect such rights or privileges."     It  will  be convenient if at this stage, we  also  read sub-rule 3 of the Rule 3(2) of the Bihar Rules framed  under Section 14 of the Act: "Rule 3. National Festival Holidays: (1) xxx                    xxx                    xxx (2)  Each employer of an industrial establishment  shall  at the  beginning of each calendar year or within 60 days  from the  date of commencement of work in the case of new  indus- trial establishments, display a notice asking his  employees to  indicate their choice in respect of 4 festival  holidays out of the list of festival holidays mentioned in the 406 schedule under sub-section (1)(b) of Section 3 of the Act."     Section 3 makes it mandatory to declare holidays on -6th January,  15th  August, 1st May and 2nd October,  besides  4 other  holidays on festivals out of the festivals  mentioned in  the schedule. Subrule (2) of rule 3  provides  procedure for  fixing the four festival holidays at the  beginning  of each  calendar  year. The employer shall  display  a  notice asking his employees to indicate their choice in respect  ot 4  festival  holidays out of the list of  festival  holidays mentioned in the schedule to section 3(1)(b).     Section  13 provides that the rights and  privileges  of the  workmen  under any other law or under any  contract  or

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custom  or usage applicable to the establishment  which  are more  favourable to the workmen than that conferred  by  the Act shall not be affected. Since the employees of the compa- ny’s  establishment at Jamshedpur were allowed more  favour- able  holidays every year i.e. 18 (for office staff) and  14 (for factory staff) against the total of 3 holidays provided for in the Act, the company wanted to declare the first  May as holiday by adjusting the holidays allowed in the  settle- ment.  ’The workmen, however took the stand that  the  first May should not be adjusted within the total number of  holi- days  provided in the settlement but should be given  as  an additional holiday.     Negotiations  followed but neither side was  willing  to give up its claim. The conciliation officer could not  bring about settlement. Upon failure of conciliation, the statuto- ry  authorities directed the company to declare 1st  May  as holiday  in  addition to the holidays provided  for  in  the settlement.  The company moved the High Court under  Article 226  of  the Constitution challenging the direction  of  the authorities.  The  High Court dismissed  the  writ  petition observing thus: "Under  the existing arrangement, the employees  are  having 14/18  paid holidays in an year and that cannot be  defeated by  Section 3 of the Act. But section 13 expressly  provides that  if the rights and privileges in respect of paid  holi- days  enjoyed by the employees are more favourable than  are prescribed  by section 3, their existing rights  and  privi- leges as to the total number of holidays will not be  preju- diced  by section 3. It is clear that section 3 is  not  in- tended  to  prescribe a minimum number of paid  holidays  in addition  to the existing ones. The holiday on the  1st  May prescribed under the Act being compulsory in nature, 407 therefore,  must  be in addition to the  privileges  already granted to the workmen under the agreement."     We are afraid we cannot agree with this line of  reason- ing  adopted by the High Court. In fact, the conclusion  and the  reasoning  seem  to be inconsistent  with  each  other. Section 3 provides for three National holidays, one Interna- tional  Labour  Day,  and four festival  holidays.  It  thus statutorily fixes.eight paid holidays, four out of them  are left  to  the  choice of the management  and  employees  for festival occasions. These eight holidays however, are not in addition  to the holidays that are mutually agreed  upon  in the  settlement.  They are the minimum  holidays  which  the employees  are entitled to. If there is existing  settlement by  which  the  employees are entitled to  more  than  eight holidays the management could not take away that rights  and privileges.  To  protect  the employees in  such  cases  the Statute  intervenes  by  Section 13. If  the  employees  are entitled to more than eight holidays’ under any contract  or usage  applicable  to the said establishment, or  under  any other law for the time being in force that rights and privi- leges are saved by section 13. This seems to be the require- ment of the statute.     The  case with not a dissimilar problem was in Tata  Oil Mills  Co. v. K.V. Gopalan & Ors., [1966] 3 SCR  760.  There this Court considered the scheme and scope of sections 3 and 11  of  the Kerala Industrial  Establishment  (National  and Festival  Holidays,  1958) Act, 1958 which  are  similar  in terms  with sections 3 and 13 of the Act with which  we  are concerned. Section 3 of the Kerala Act provides: "Grant of National and Festival holidays: "Every  employee  shall be allowed in each calendar  year  a

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holiday of one full day on the 26th January, 15th August and the  1st May and four other holidays each of one  whole  day for  such  festivals as the Inspector may,  in  consultation with  the employer and the employees specify in  respect  of any industrial establishment." Section 11 of the Kerala Act reads:  ’Rights and privileges under other laws, etc. are not 408 affected--Nothing  contained  in this  Act  shall  adversely affect any rights or privileges which any employee is  enti- tled  to with respect to national and festival  holidays  on the date on which this Act comes into force under any  other law, contract, custom or usage, if such right or  privileges are  more favourable to him that those to which he would  be entitled under this Act."     Considering the rights of workmen under those provisions Gajendragadkar,  CJ., speaking for this Court  observed  (at 764): "If  under the existing arrangement the employees are  enti- tled to have more than 7 paid holidays, that right will  not be  defeated by s. 3, because s. 11 expressly provides  that if  the  rights or privileges in respect  of  paid  holidays enjoyed  by the employees are more favourable than are  pre- scribed by s. 3, their existing rights and privileges as  to the total number of holidays will not be prejudiced by s. 3. The  scheme  of s. 11 thus clearly shows that s.  3  is  not intended  to prescribe a minimum number of paid holidays  in addition  to  the  existing ones, so  that  the  respondents should be entitled to claim the seven holidays prescribed by s. 3 plus the six holidays to which they are entitled  under the existing arrangement."     In the present case it may be relevant to note that  the festival  holidays have not been identified or specified  in the  settlement.  They have to be selected and  declared  as holidays  with  notice to employees every year. It  is  only three National holidays that have been specified therein  in addition  to Vishwakarma Puja day for the factory staff  and factory general staff. Now, the statute prescribes the  same three  National holidays, besides International  Labour  Day and four festival holidays. But these 3 holidays are not  to the  exclusion  of  or in addition to the  total  number  of holidays agreed upon under the settlement. Indeed, it  could not be so, since three National holidays are common both  in the settlement and statute. The total number of 14  holidays under the settlement as against 3 holidays under the statute remains  undisturbed  by section 13 of the Act since  it  is more favourable to the employees than the rights and  privi- leges  conferred by the Act. When thus being  the  position, the management would be entitled to adjust the International Labour  Day as a paid holiday within the fourteen  days  al- lowed  under.the  settlement. The ’demand of  the  employees that 409 it  should  be in addition to fourteen days has  no  support either  under  the settlement or by the terminology  of  the statute.     In the result the appeal is allowed. The judgment of the High Court is set aside. There will be, however, no order as to costs. N.P.V.                                     Appeal allowed. 410