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Delhi High CourtIndian Cases

Indian Airlines vs Union Of India (UoI) And Ors. on 25 August 2005

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Delhi High Court
Indian Airlines vs Union Of India (Uoi) And Ors. on 25 August, 2005
Equivalent citations: 2006(3)SLJ461(DELHI)
Author: Sanjiv Khanna
Bench: Mukundakam Sharma, Sanjiv Khanna

JUDGMENT

Sanjiv Khanna, J.

1. The petitioner-Indian Airlines was initially incorporated as a corporation under the Air Corporations Act, 1953 (hereinafter referred to as the Air Act, for short).

2. Under Section 45 of the Air Act, the petitioner had framed regulations relating to terms and conditions of service of its officers and its employees.

3. As per the writ petition in and around 1978, the Regional Labour Commissioner (Central) wrote to the petitioner about its intention to proceed with certification proceedings under the Industrial Employees (Standing Orders) Act, 1946 (hereinafter referred to as the Standing Orders Act, for short) in respect of the service regulations made by the petitioner. This was objected to by the petitioner on the ground that the Standing Orders Act was not applicable to it. The Regional Labour Commissioner (Central) as certifying authority under the Standing Orders Act overruled this and other objections in its order dated 24th June, 1980 and held that the petitioner was required to get the service regulations certified under the Standing Orders Act and on failure to do so, the petitioner would render itself liable for penal action. This order dated 24th June, 1980 was amended by a subsequent Order dated 4th July, 1980 and the certifying authority gave its findings on various Clauses on the service regulations made by the petitioner.

4. Being aggrieved by the aforesaid orders passed by the Certifying Authority, the petitioner filed an appeal under Section 6 of the Standing Orders Act, before the Chief Labour Commissioner again raising the contention that the service regulations framed by the petitioner under Section 45 of the Air Act with prior approval of the Central Government were not amenable to certification/modification/amendment by the Certifying Officer. It was submitted that the service regulations framed under Section 45(2)(b) of the Air Act have a statutory force.

5. The Chief Labour Commissioner vide the impugned order dated 31st May, 1983 rejected the objection raised by the petitioner and, inter alia, held that the petitioner was an “industrial establishment” as defined in Section 2(e) of the Standing Orders Act and therefore the said Act was applicable.

6. Aggrieved by the Orders passed by the Certifying Officer and the Appellate Authority under the Standing Orders Act, the petitioner has filed the present writ petition.

7. The short issue argued by the learned Counsel for the petitioner, Mr. Lalit Bhasin in the present writ petition is whether the Standing Orders Act was/is applicable to petitioner corporation. Contention of the learned Counsel for the petitioner is that the provisions of the Standing Orders Act do not apply as service regulations have been framed under a special statute i.e. Air Act and in view of Section 45 of the said Act the service regulations do not require certification.

8. Learned Counsel for the petitioner has brought to our notice, a Division Bench judgment of this Court passed in the case of Air India v. Union of India and Ors. , wherein an identical controversy had arisen. It may be relevant to state here that Air India was also incorporated under the provisions of the Air Act. It was submitted on behalf of Air India that service regulations have been framed by it under Section 45 of the Air Act and the Standing Orders Act would not apply. However, a Division Bench of this Court held that the Standing Orders Act is a special Act and the Air Act is a general Act and therefore the provisions of the Standing Orders Act would apply. While holding so, the Bench relied upon a judgment of the Supreme Court in the case of U.P. State Electricity Board and Anr. v. Hari Shankar Jain and Ors. AIR 1979 SC 65. The Division Bench has further held that Section 45 of the Air Act did not oust the applicability of the Standing Orders Act because it deals with a specific provision, namely, service regulations with regard to employees of Air India. The Division Bench also examined Section 13B of the Standing Orders Act and held that the service regulation of Air India were not exempt because the requirement of issue of notification by appropriate Government, i, e. the Central Government, was not satisfied.

9. The decision of this Court in the case of Air India (supra) was taken in appeal before the Supreme Court and has been decided in a judgment titled as Air India v. Union of India and Ors. The Supreme Court noticed the controversy in issue and made reference to the Air Corporations (Transfer of Undertakings and Repeal) Act, 1994 (hereinafter referred to as Repeal Act, 1994, for short), which came into force on 29th January, 1994 and, inter alia, held that the provisions of the Standing Orders Act are applicable. It may be stated here that the Repeal Act, 1994 repealed the Air Act and the Supreme Court held that upon repeal of the parent statute with the enactment of the Repeal Act, 1994, the subordinate legislation i.e. the service regulations framed under Section 45 of the Air Act did not survive after 29th January, 1994 and therefore the very foundation of Air India’s case had ceased to exit. It was further held that Section 8 of the Repeal Act, 1994 does not save or protect the regulations made under the Air Act.

10. In view of the decision of the Division Bench of the Delhi High Court and the decision of the Supreme Court, there is no doubt in our mind that the present writ petition is liable to be dismissed. The provisions of the Standing Orders Act are clearly applicable to the petitioner.

11. However, learned Counsel for the petitioner has argued that certain aspects and grounds were not raised, argued and decided either before this Court or the Supreme Court and these aspects have been considered and examined by the Gujarat High Court decision in the case of Valsad Jilla Sahakari Bank Limited v. D.K. Patel, Certifying Officer and Ors. 1991 Lab.I.C. 655 and in an unreported decision of the Bombay High Court in the case of Aruna Aware and Anr. v. Air India W.P. (C) 2620/1998.

12. Relying upon these decisions it is contended that the Standing Orders Act is not applicable to the airline industry as the said Act applies to “industrial establishments” as defined in Section 2(ii) of the Payment of Wages Act, 1936 at the time of enactment of the Standing Order Act on 23rd April, 1946. It is further contended that the expression “industrial establishment” as defined in Section 2(ii) of the Payment of Wages Act, 1936 at that time (23rd April, 1946) did not include air transport service. It is only in the year 1965 that Section 2(ii) of the Payment of Wages Act, 1936 was amended to include “air transport services” and the said amendment made in 1965 is not applicable to the Standing Orders Act and the original unamended definition of “industrial establishment” will continue to apply as far as the Standing Orders Act is concerned. It is submitted that the Bombay High Court has accepted the said contention holding that the subsequent amendment made in 1965 in the Payment of Wages Act, 1936 has to be ignored for the purpose of the expression “industrial establishment” as defined in the Standing Orders Act.

13. We did not have the benefit of hearing any Counsel on behalf of the Union of India or the Air Corporations’ employees union or the other unions. However, we have examined the counter affidavit filed on behalf of the Union of India and the other unions. The Union of India in its counter affidavit has taken a categorical stand that the Standing Orders Act would apply to the petitioner as it is by way of a special legislation and the regulations made by the petitioner-Corporation governing its employees have been made under a general law. The unions have further submitted that the service regulations framed by the petitioner are neither certified under Section 5 of the Standing Orders Act nor notified under Section 13B of the said Act and, therefore, the petitioner is bound to comply by the Standing Orders Act. Reliance is also placed upon Section 7 of the Air Act, 1953, which reads as under:

Section 7. Functions of the Corporation-

(3) nothing contained in this section shall be construed as (a) authorising Corporation to disregard any law for the time being in force, or….

14. The Standing Orders Act is applicable only to “industrial establishments” but the said Act does not itself define the expression “industrial establishment”. Section 2(e)(i) of the Standing Orders Act states that the expression “industrial establishment” will mean industrial establishment as defined in Section 2(ii) of the Payment of Wages Act, 1936. Payment of Wages Act, 1936 came into force on 28th March, 1937. The Standing Orders Act came into force on 23rd April, 1946. In 1946, the expression “industrial establishment” as defined in Section 2(ii) of the Payment of Wages Act, 1936 did not include civil aviation industry.

15. Thereafter, by Payment of Wages (Amendment) Act, 1964 which came into force on 1st February. 1965, Section 2(ii) of the Payment of Wages Act, 1936 was amended by insertion of Clause (aa), which is as under:

(aa) air transport service other than such service belonging to, or exclusively employed in the military, naval or air forces of the Union or the Civil Aviation Department of the Government of India.

16. The submission of the petitioner is that this extended definition of the expression “industrial establishment” in the Payment of Wages Act, 1936 as amended in 1965 will not apply to the Standing Orders Act. It is submitted that when Section 2(e) of the Standing Orders Act refers to the definition or expression “industrial establishment” as defined in Section 2(ii) of the Payment of Wages Act, 1936, it refers to the definition existing in the Payment of Wages Act, 1936 on the date Standing Orders Act was enacted, i.e. 23rd April, 1946 and any subsequent amendment in Section 2(ii) of the Payment of Wages Act, 1936 do not get incorporated in the Standing Orders Act.

17. The answer to the question will depends on whether Section 2(ii) of the Payment of Wages Act, 1936 was incorporated into Section 2(e) of the Standing Orders Act so as to become part and parcel of the Standing Orders Act on its enactment or is it a case of “legislation by reference”. If it is a case of “legislation by incorporation” subsequent amendments in Section 2(ii) of the Payment of Wages Act, 1936 on their own force cannot be read into Section 2(e) of the Standing Orders Act. This is because in cases of legislation by incorporation, only the existing provision on the day of enactment of the subsequent statute stands incorporated and not the future repeals, amendments or modifications made in the earlier law. However, in cases of “legislation by reference”, future modification or amendments in the earlier law are also applicable and read into the subsequent legislation. In cases of “legislation by reference”, repeal or amendment of the first statute has effect on the second/subsequent statute. In this regard it may be appropriate to refer to the judgment of the Supreme Court in the case of Nagpur Improvement Trust v. Vasantrao and Ors. , the relevant portion (at page 678 onwards) is reproduced below:

31. We shall now proceed to consider whether the provisions of the Land Acquisition Act, 1894 as modified by the State Acts stand incorporated in the State Acts or whether there is a mere reference or citation of the Land Acquisition Act in the State Acts. The law on the subject is well settled. When an earlier Act or certain of its provisions are incorporated by reference into a later Act, the provisions so incorporated become part and parcel of the later Act as if they had been bodily transposed into it. The incorporation of an earlier Act into a later Act is a legislative device adopted for the sake of convenience in order to avoid verbatim reproduction of the provisions of the earlier Act into the later. But this must be distinguished from a referential legislation which merely contains a reference or the citation of the provisions of an earlier statute. In a case where a statute is incorporated, by reference, into a second statute, the repeal of the first statute by a third does not affect the second. The later Act along with the incorporated provisions of the earlier Act constitutes an independent legislation which is not modified or repealed by a modification or repeal of the earlier Act. However, where in a later Act there is a mere reference to an earlier Act, the modification, repeal or amendment of the statute that is referred, will also have an effect on the statute in which it is referred. It is equally well settled that the question whether a former statute is merely referred to or cited in a later statute, or whether it is wholly or partially incorporated therein, is a question of construction.

32. In Secy. of State v. Hindustan Coop. Insurance Society Ltd. Privy Council observed: (AIR p. 152) In this country it is accepted that where a statute is incorporated by reference into a second statute, the repeal of the first statute does not affect the second: see the cases collected in ‘Craies on Statute Law’, Edn. 3, pp. 349-50. This doctrine finds expression in a common form section which regularly appears in the amending and repealing Acts which are passed from time-to-time in India. The section runs:

The repeal by this Act of any enactment shall not affect any Act…in which such enactment has been applied, incorporated or referred to.

The independent existence of the two Acts is therefore recognized; despite the death of the parent Act, its offspring survives in the incorporating Act. Though no such saving Clause appears in the General Clauses Act, their Lordships think that the principle involved is as applicable in India as it is in this country.

It seems to be no less logical to hold that where certain provisions from an existing Act have been incorporated into a subsequent Act, no addition to the former Act, which is not expressly made applicable to the subsequent Act, can be deemed to be incorporated in it, at all events if it is possible for the subsequent Act to function effectually without the addition.

33. In Wood’s Estate, Exp., Works and Buildings Commrs. Re. (1886) 31 ChD 607, Ch D at p. 615 Lord. Esher, M.R. observed:

If a subsequent Act brings into itself by reference some of the clauses of a former Act, the legal effect of that, as has often been held, is to write those sections into the new Act as if they had been actually written in it with the pen, or printed in it.

34. In U.P. Avas Evam Vikas Parishad v. Jainul Islam (1998) 2 SCC 467 this Court observed : (SCC p. 480, Para 17)

17. A subsequent legislation often makes a reference to the earlier legislation so as to make the provisions of the earlier legislation applicable to matters covered by the later legislation. Such a legislation may either be (i) a referential legislation which merely contains a reference to or the citation of the provisions of the earlier statute; or (ii) a legislation by incorporation whereunder the provisions of the earlier legislation to which reference is made are incorporated into the later legislation by reference. If it is a referential legislation the provisions of the earlier legislation to which reference is made in the subsequent legislation would be applicable as it stands on the date of application of such earlier legislation to matters referred to in the subsequent legislation. In other words, any amendment made in the earlier legislation after the date of enactment of the subsequent legislation would also be applicable. But if it is a legislation by incorporation the rule of construction is that repeal of the earlier statute which is incorporated does not affect operation of the subsequent statute in which it has been incorporated. So also any amendment in the statute which has been so incorporated that is made after the date of incorporation of such statute does not affect the subsequent statute in which it is incorporated and the provisions of the statute which have been incorporated would remain the same as they were at the time of incorporation and the subsequent amendments are not to be read in the subsequent legislation.

35. This is a reiteration of the principle as laid down by earlier judgments of this Court in a catena of decisions including Mary Roy v. State of Kerala ; Ram Sarup v. Munshi ; Ram Kirpal Bhagat v. State of Bihar ; Bolani Ores Ltd. v. State of Orissa and Mahindra and Mahindra Ltd. v. Union of India AIR 1979 SC 798.

18. In the same judgment, Supreme Court has also referred to the test or the principles to be applied to determine whether it is a case of legislation by reference or incorporation. The relevant portion is as under:

36. It is also well settled that the question as to whether a particular legislation falls in the category of referential legislation or legislation by incorporation depends upon the language used in the statute in which reference is made to the earlier decision and other relevant circumstances.

Thus, to decide whether it is a case of incorporation or reference, one has to examine and probe the legislative intent and take an insight into the working of the enactment.

19. To our mind the present case is one of “legislation by reference” and not “incorporation”. Section 2(e)(i) of the Standing Orders Act states that the expression “industrial establishment” means industrial establishment as defined in the Payment of Wages Act, 1936. The Standing Orders Act was enacted for defining conditions of recruitment, discharge, disciplinary action, holidays, leaves, etc., to minimize friction and disputes between management and workers. Keeping in view the object and purpose behind the enactment of the Standing Orders Act it is legitimate to hold that it is a case of legislation by reference and not in corporation. Industrial peace and reasonable and equitable service conditions balancing interest of both workers and management ensures growth and progress of any industry. The Standing Order Act is also welfare and a beneficial legislation. With this background it will be correct to state that the legislative intent was to refer to Section 2(ii) of the Payment of Wages Act, 1936 rather than incorporating similar provision in full. In 1946 India was industrially backward and most of the industries including “air transport services” was still in infinitesimal stage. It was natural that with growth, progress and development of industry the expression “industrial enterprise” shall undergo expansion and more and more industries would be included. Therefore, it will be appropriate to hold that Section 2(ii) of the Payment of Wages Act, 1936 has been frictionally made part of the Standing Order Act and not bodily transposed and written into as part and parcel of the latter Act. Thus, subsequent amendments and changes in Section 2(ii) of the Payment of Wages Act, 1936 after enactment of the Standing Order Act would apply and cannot be ignored.

20. There have been instances when Supreme Court has held that re-enacted definition clauses apply. In the case of State of Uttar Pradesh v. M.P. Singh and Ors. amended definition of the term “commercial establishment” in the Factories Act, 1934 was held to be applicable to United Provinces Shops and Commercial Establishment Act, 1947. Similarly in the case of State of Bihar v. S.K. Roy , the expression “employer” used in Coal Mines Provident Fund and Bonus Schemes Act, 1948 was construed with reference to the amended definition in the Indian Mines Act, 1923. In the case of STO v. Union of India 1995 Supp. (1) SCC 410, the Supreme Court has held that the expression “Railways” defined in U.P. Sales Tax Act, 1948 with reference to Indian Railways Act, 1890 has to be construed with reference to re-enacted Railways Act, 1989.

21. In the three judgments mentioned above, the Supreme Court has relied upon and referred to Section 8 of the General Clauses Act, 1897 which reads as follows:

Section 8-(1) Where this Act or any Central Act or Regulation made after the commencement of this Act, repeals and re-enacts with or without modification, any provision of a former enactment, then references in any other enactment or in any instrument to the provision so repealed shall, unless a different intention appears, be construed as references to the provision so re-enacted.

(2) Where before the fifteenth day of August, 1947, any Act of Parliament of the United Kingdom repealed and re-enacted with or without modification, any provision of a former enactment, then references in any Central Act or in any Regulation or instrument to the provision so repealed shall, unless a different intention appears, be construed as references to the provision so re-enacted.

22. We need not dwell more on this aspect as there are also well carved out exceptions to the principle of “legislation by incorporation”. Broad principles in this regard were laid down by the Supreme Court in the case of State of M.P. v. M.V. Narsimhan , as under:

Where a subsequent Act incorporates provisions of a previous Act then the borrowed provisions become an integral and independent part of the subsequent Act and are totally unaffected by any repeal or amendment in the previous Act. This principle, however, will not apply in the following cases:

(a) Where the subsequent Act and the previous Act are supplemental to each other;

(b) Where the two Acts are in pan materia;

(c) Where the amendment in the previous Act, if not imported into the subsequent Act also, would render the subsequent Act wholly unworkable and ineffectual; and

(d) Where the amendment of the previous Act, either expressly or by necessary inlendment, applies the said provisions to the subsequent Act.

23. In said case Prevention of Corruption Act, 1947 was held to be supplementary legislation to the Penal Code, amendments made in 1958 and 1964 in the Penal Code enlarging the definition of “public servant” were read into the latter statute. Concept of Supplementary statutes as an exception to “legislation by incorporation” has also been applied in cases of Western Coalfields Ltd. v. Special Area Development Authority ; Ujagar Prints (ii) v. Union of India (1999) 3 SCC 488 and State of Kerala v. Attessee Agro Industrial Trading Corporation 1989 Supp. (1) SCC 733. M. Ranganathan Rap, J. has also examined this aspect in the case of Mariyappa v. State of Karnataka .

24. We are of the opinion that the Payment of Wages Act, 1936 and the Standing Orders Act are supplemental to each other. Both the Acts have been framed with the object and purpose of providing protection and benefit to workers. The Payment of Wages Act, 1936 ensures that wages are paid to the workers and the Standing Orders Act ensures that the terms and conditions of service of workers is just and equitable. Payment of wages and terms and conditions of service are inter-connected and inter-linked. Payment of wages is part of terms and conditions of service. Both of them are part of “bread and butter legislations” and ensure industrial peace and development. Thus the present case is covered by Exception (a) as carved out in Narasimhan’s case (supra).

25. We also feel that to deny benefit of the amended definition of “industrial establishment” is contrary to principle that welfare and beneficial legislations should be interpreted broadly and liberally and benefit should not be denied unless the statute clearly denies any claim. It will be appropriate in this regard to refer to the judgment of Supreme Court in the case of Workmen v. American Express International Banking Corporation :

4. The principles of statutory construction are well settled. Words occurring in statutes of liberal import such as social welfare legislation and human rights’ legislation are not to be put in Procrustean beds or shrunk to Lilliputian dimensions. In construing these legislations the imposture of literal construction must be avoided and the prodigality of its misapplication must be recognised and reduced. Judges ought to be more concerned with the “colour”, the “content” and the “context” of such statutes [we have borrowed the words from Lord Wilberforce’ s opinion in Prenn v. Simmonds (1971) 2 ALL ER 237. In the same opinion Lord Wilberforce pointed out that law is not to be left behind in some island of literal interpretation but is to enquire beyond the language, un-isolated from the matrix of facts in which they arc set; the law is not to be interpreted purely on internal linguistic considerations. In one of the cases cited before us, that is, Surendra Kumar v. Central Government Industrial Tribunal-cum-Labour Court (1981) 4 SCC 443, we had occasion to say.

“Semantic luxuries are misplaced in the interpretation of ‘bread and butter’ statutes. Welfare statutes must, of necessity, receive a broad interpretation. Where legislation is designed to give relief against certain kinds of mischief, the Court is not to make inroads by making etymological excursions.

26. The legislature instead of separately defining “industrial establishment” in the Standing Orders Act has for the sake of convenience adopted the definition of “industrial establishment” as given in the Payment of Wages Act, 1936. We feel the present case is one of legislation by reference and therefore amendment made in the Payment of Wages Act, 1936 defining the term “industrial establishment” will also be incorporated in the Standing Orders Act. Further, both the legislations, that is the Payment of Wages Act, 1936 and the Standing Orders Act, are welfare and beneficial legislations with the same underlying object and purpose to protect workmen by having just and equitable service conditions and ensuring industrial peace. Any amendment and changes in the definition of the expression “industrial establishment” in the Payment of Wages Act, 1936, should therefore also be applicable to the Standing Orders Act.

27. There is another reason also why the contention raised by the learned Counsel for the petitioner cannot be accepted. The issue, whether Standing Orders and/or the Standing Orders Act will apply to “air transport services”, has already been decided by a Division Bench of this Court as well as the Supreme Court. A decision of the Supreme Court is binding under Article 141 of the Constitution of India. In view of the binding nature of the judgments of the Supreme Court we cannot hold and declare the law laid down by the Supreme Court asperincuriam or take a contrary view on the ground that the Supreme Court has failed to deal with certain aspects or some relevant provisions of law were not brought to its notice or some argument was not raised/examined. Merely because certain aspects of a matter were never examined or considered by the Supreme Court, does not entitle a High Court to refuse or follow the said decision. Decisions of the Supreme Court are binding under Article 141 of the Constitution of India and cannot be assailed before the High Court on the ground that certain aspects were not brought to the notice of the Supreme Court or considered by it. High Courts are duty bound to follow the judgment of the Supreme Court and it is only for the Supreme Court to re-examine and reconsider its earlier judgments. The Supreme Court in the case of Director of Settlement A.P. and Ors. v. M.R. Apparao has examined Article 141 of the Constitution of India and has unequivocally held that the law laid down by the Supreme Court is binding on all Courts in India and it cannot be assailed on the ground that certain aspects were not considered or relevant provisions were not brought to the notice of the Supreme Court. When an issue is decided by the Supreme Court it is the duty of the High Court or the subordinate Court to follow the said decision. Similarly, the Supreme Court in the case of Suganthi Suresh Kumar v. Jagdeeshan has held as under:

It is impermissible for the High Court to overrule the decision of the Apex Court on the ground that the Supreme Court laid down the legal position without considering any other point. It is not only a matter of discipline for the High Courts in India, it is the mandate of the Constitution as provided in Article 141 that the law declared by the Supreme Court shall be binding on all Courts within the territory of India. It was pointed out by this Court in Anil Kumar Neotia v. Union of India that the High Court cannot question the correctness of the decision of the Supreme Court even though the point sought before the High Court was not considered by the Supreme Court.

28. A decision rendered by the Supreme Court concludes the controversy. It is not permissible for any Court or Tribunal to reopen the same issue and record a contrary finding. The principle of per incuriam and sub-silentio has limited or no application in matters already concluded by the Supreme Court.

29. In view of the above we do not find any merit in this writ petition and the same is dismissed, without any order as to costs.