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United Provinmces Sugar Co. Ltd. v. State Of U.P. And Other - WRIT - C No. 22890 of 1987  RD-AH 9721 (21 May 2007)
Writ Petition No.22890 of 1987
United Provinces Sugar Company Ltd. .....................Petitioner
State of U.P. and others. ................................Respondents.
Hon'ble Tarun Agarwala, J.
The petitioner is a sugar factory engaged in the manufacture and sale of sugar by vacuum pan process and is aggrieved by the notification dated 15.7.1982 issued by the State government under Section 3(b) of the U.P. Industrial Disputes Act as well as by the reference order issued by the State Government under Section 4-K of the U.P. Industrial Disputes Act. It transpires that the State Government issued a notification dated 15.7.1982 under Section 3(b) of the U.P. Industrial Disputes Act directing the employers not to retrench any worker and instead create a 'surplus pool' of workman and to fill up the vacancies from the 'surplus pool'. The order further contemplated that if, there was no person available in the surplus pool, the vacant post would be offered to the heirs of a retired workman or the heirs of a deceased workman. Based on the aforesaid notification which was valid till 31.12.1983, the Union raised a dispute before the Conciliation Officer praying for a settlement of the dispute contending that the heirs of the deceased workman or retired workman should be offered employment in terms of the State Government notification dated 15.7.1982. Upon failure of the conciliation, the State Government referred the dispute for adjudication by issuing a reference under Section 4-K dated 6.4.1987 for adjudication. The terms of the reference was whether the employers were justified in not giving employment to the heirs of the deceased or to heirs of the retired workers.
The petitioner, being aggrieved by the aforesaid notification, and the adjudication of the dispute before the labour court has filed the present writ petition.
Inspite of issuance of notice, the Union of the workers has not appeared nor has filed any counter affidavit. The State Government has also not filed any counter affidavit controverting the allegations made in the writ petition.
Section 3 of the U.P. Industrial Disputes Act confers power on the State Government to issue a general or special order requiring employers, workmen, or both to observe for such period as may be specified, such terms and conditions of employment as prescribed in the order. This power is required to be exercised by the State Government provided it forms an opinion that it was necessary or expedient to do so for securing public safety or convenience or the maintenance of public order or supplies in services essential to the life of the community or for maintaining employment. For facility, the provisions of Section 3(b) of the U.P. State Industrial Disputes Act is quoted hereunder:
"3. Power to prevent strikes, lock-outs, etc.- If, in the opinion of the [State Government] it is 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 employment, it may, by general or special order, make provision-
(b) for requiring employers, workmen or both to observe for such period, as may be specified in the order, such terms and conditions of employment as may be determined in accordance with the order;"
From the aforesaid, it is clear that the State Government is vested with extraordinary powers under Section 3(b) of the Act. The opening words clearly indicates that the provisions contained therein is to be exercised only in the case of emergency which may be acute and in that situation a mere resort to power under Section 4-K of the Act would be inadequate to meet the situation which may be prevailing in the industry. The provision is to enable the State to act promptly in case of emergency in order to secure public safety, convenience or maintenance of public order or services essential to the life of the community or for maintaining employment.
In the State of U.P. vs. Basti Sugar Mills, AIR 1961 SC 420, the Supreme Court observed that the powers under Section 3(b) of the Act could only be exercised in case of emergency to meet the situation prevailing in the industry at that time and a mere resort to power under Section 4-K of the Act would be inadequate.
A division bench of this court, in State of U.P. vs. Prem Spinning & Weaving Mills Co., 1973 A.L.J. 65 held that the State Government could exercise the power conferred on it under Section 3(b) of the Act only as a temporary measure and in case of acute emergency and, a mere resort to refer the dispute for adjudication would be inadequate to meet the situation. The court further held that if the two conditions were not specified, the order issued under Section 3(b) of the Act would be void.
Similar view was held again by another bench of this Court in the case of M/s Mohan Goldwater Breweries Ltd., Daliganj, Lucknow vs. The State of U.P. through the Secretary, Labour Department, Lucknow and others, 1978(36) FLR 182.
In the light of the aforesaid judgments, it has to be seen whether there existed any emergency in issuing a notification under Section 3(b) of the Act and whether the two conditions contemplated under Section 3(b) of the Act was specified or not. For facility, the impugned notification dated 15.7.1982 is quoted hereunder:
" UTTAR PRADESH SHASAN
LABOUR SECTION 2
The Governor is pleased to order the publication of the following English Translation of Notification No.3158(HI)/36- 2-101(ii)(HI)/79 dated July 15, 1982.
No. 3158 (HI)/ 36-2-101(ii) (HI)/79
Lucknow dated July 15, 1982.
Whereas in view of the sick and uneconomic condition of the Sugar Industry, the Bipartite Committee constituted for evaluation of the present situation of the Industry and suggesting ways and means for its amelioration, discussed, inter- alia, in its meeting held on February 12, 1982 and May 4, 1982 in the Uttar Pradesh Sachivalaya, Lucknow the question of workman employed in the said industry or for any other reason;
and whereas in the opinion of the State Government it is necessary to enforce the unanimous decision taken by the said Bipartite Committee for securing public safety and convenience and 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 is pleased to make the following order and to direct with reference to section 19 of
the said Act that notice of this order shall be given by publication in the Gazette.
1.The workmen rendered surplus, as a result of modernization or rationalization shall not be retrenched; but instead a surplus pool of workmen so rendered surplus and who do not tender resignation of their own accord, shall be created.
2.If a post in the mill is vacant or falls vacant, the same shall first of all, be filled in from the 'surplus pool' as mentioned above or by promotion. In case the post is filled in by promotion the resultant vacancy shall again be filled in from the 'surplus pool' or by promotion. In case it is not possible to fill in the vacant post from the 'surplus pool' the result vacancy shall be filled in by the 'heir' of the workmen in case he is suitable for appointment to such a post.
3.If an unskilled workman retires from service and no unskilled workman is available in the surplus pool, such vacant post shall be offered to the ' heir' of the retired workman, provided he is fit for the post.
4.A workman employed in any sugar factory in the Cooperative Sector, can be transferred to any other sugar factory in the same section provided the consent of the workmen is obtained prior to his transfer.
5.' Heir of a workman' shall mean' son of the workman' including an adopted son, provided the deed of adoption has been registered in the Registration Office 10 years before the date of retirement of the workman. In case the post falls vacant due to the death of a workman during service, his widow shall be treated as an 'heir' of the workman provided, in the opinion of the employers she is suitable for appointment to the vacant post, otherwise his son shall be treated as an heir. In case the workman has no son, his widow, unless she is remarried, shall have the right to nominate an 'heir'.
6.This order shall apply to all workman covered by the Wage Board for the sugar industry and shall remain in force till December 31, 1983."
A perusal of the aforesaid notification shows that the State Government was of an opinion that it was necessary for securing public safety and convenience and maintenance of public order and supplies and services essential to the life of the community and for maintaining employment, and therefore, exercised the powers under clause (b) of Section 3 of the U.P. I.D. Act. The said order was directed to remain in force till 31.12.1983.
The aforesaid notification indicates that it did not contain any statement indicating that there was any emergency much less any acute emergency necessitating immediate action by the State Government under Section 3(b) of the Act.
The petitioner in the writ petition has specifically contended that there was no emergency or acute emergency and that there was no necessity for the issuance of the impugned notification as there was no industrial unrest existing nor was it apprehended. Consequently, no acute emergency existed to warrant the exercise of the extra ordinary power under Section 3(b) of the Act. Further, I find that nothing has been indicated as to why a resort to an adjudication of an industrial dispute could not be sufficient to meet the particular situation. Consequently, the ingredients of Section 3(b) of the Act is missing, and therefore, in the opinion of the court the powers under Section 3(b) of the Act could not be exercised by the State Government. The allegations made by the petitioner in the writ petition has not been controverted by the State Government since no counter affidavit has been filed nor the record has been produced. Consequently, this court is of the opinion that even though the life of the notification dated 15.7.1982 had come to an end on 31.12.1983, nonetheless, the said notification was issued illegally, the same could not be sustained.
It has come on record that based on the notification under Section 3(b) of the Act, the Union raised a dispute claiming employment of the heirs of the deceased workers or retired workers and upon the failure of the conciliation proceedings, the State Government referred the dispute for adjudication under Section 4-K of the Act.
An order under Section 3(b) of the Act could be issued as a temporary measure for a limited period of time, and that, this power cannot be used to prescribe conditions of service.
In the present case, from a perusal of the notification under Section 3(b) of the Act, it is clear that the State Government has directed that the heirs of a retired workman or a deceased workman would be given an employment. This clearly prescribes a condition of service, which power cannot be exercised under Section 3(b) of the Act. Based on this notification, the reference under Section 4-K of the
Act was issued. The heirs of the retired workers or of the deceased workers were claiming employment.
In my opinion, such adjudication, being based on the notification issued under Section 3(b), could not be adjudicated since the same was clearly malafide.
From the perusal of the notification, it is clear that a sugar factory was required to fill up the vacancies from the 'surplus pool' and in the event of non availability of a worker from surplus pool, from an heir of a workman, thereby restricting the field of eligibility and creating a monopoly in favour of the workman, who was already in appointment. The provision for providing employment to the heirs of a retired workman or to a deceased workman is clearly violative of Article 14 and 16 of the Constitution of India. An opportunity to be given employment should be made available to all the citizens equally and should not be confined to any extent to the descendants or relatives of a person already in service or who have retired from the service. The impugned notification is clearly discriminatory, inasmuch as, it also gives a right to a widow of a workman to nominate an heir. Such unfettered right is clearly arbitrary.
In any case, a reference under Section 4-K of the U.P. Industrial Disputes Act could only be issued for adjudication by the State Government provided there is an industrial dispute. Section 2(l) of the U.P. State Industrial Disputes Act reads as under:-
"2(l) 'Industrial Dispute' means any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the term of employment or with the conditions of labour, or any person; but does not include an industrial dispute concerning-
(i)any industry carried on by or under the authority of the Central Government or by a Railway Company, or
(ii)such controlled industry as may be specified in this behalf by Central Government, or
(iii)baking and insurance companies as defined in the Industrial Disputes Act, 1947, or
(iv)a mine or an oil-field;"
In Workmen of Nilgiri Coop. Mkt. Society Ltd. Vs. State of T.N. and others, 2004(3) SCC 514, the Supreme Court held-
"65. Employment and non-employment indisputably is a matter which is specified in the Second and Third Schedules of the Industrial Disputes Act. The concept of employment involves
three ingredients, which are; (i) employer--one who employs i.e. engages the services of other persons; (ii) employee-- one who works for another for hire; and (iii) contract of employment - the contract of service between the employer and the employee whereunder the employees agrees to serve the employer subject to his control and supervision. On the other hand, non-employment being negative of the expression "employment" would ordinarily mean a dispute when the workman is out of service. When non-employment is referable to an employment which at one point of time was existing would be a matter required to be dealt with differently than a situation where non-employment would mean a contemplated employment.
66. The question of non-employment in the latter category would arise only when the employer refuses to give work to a person who pleads and proves to the satisfaction of the management that he was entitled thereto. However, the dispute regarding the refusal to employ the person who were promised to be employed is not connected with employment or non-employment within the meaning of Section 2(k) of the Act (See workers of Sagar Talkies vs. Odeon Cinema)"
The Supreme Court held that the refusal by the employers for employment to the persons who were promised to be employed was not connected with the employment or non-employment.
In the present case, the Union has raised a dispute with regard to employment or non-employment of the heirs of the retired workers or deceased workers which is clearly not an industrial dispute contemplated under Section 2(l) of the U.P. Industrial Disputes Act. Consequently, no industrial dispute could be referred for adjudication.
For the reasons stated aforesaid, the writ petition is allowed. The impugned notification dated 15.7.1982 as well as the reference order dated 6.4.1987 issued by the State Government under Section 4-K of the U.P. Industrial Disputes Act are quashed.
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