judgement:
o. 305 of 1964.
Appeal by Special Leave from the order dated the 9th April, 1963 of the Labour Court, Coimbatore, in C.S.O. Appeal No. 1 of 1962.
M. C. Setalvad, and Naunit Lai, for the appellant.
M. K. Ramamurthi, R. K. Garg, D. P. Singh and section C. Agar wala, for the respondents.
The Judgment of the Court was delivered by Gajendragadkar, C.J.
The appellant, Salem Erode Electricity Distribution Co., Ltd., is a licensee under the , and its business consists in buying electrical energy in bulk from the State Electricity Board of Madras and selling it to consumers in Salem and Erode and certain rural districts in the State of Madras.
For the purpose of carrying on this business, the appellant has an industrial establishment at Salem.
In or about 1940, when the number of the appellant 's con sumers was about 3,000, and that of its workmen 'about 45, the appellant framed certain terms and conditions of its workmen 's employment.
Amongst these were included terms about leave and holidays.
Later, when the (No. 20 of 1946) (hereinafter called 'the Act ') came into force, the provisions as to leave and holidays which had been introduced by the appellant in the terms and conditions of the employment of its workmen, were embodied in the appellant 's Standing Orders which were certified under the relevant provisions of the Act in or about 1947.
The said terms read thus : "Standing Order 5(b) The number of holidays to be granted to the workmen and the days which shall be observed as holidays by the Establishment shall be regulated in accordance with the or other relevant law for time being in force and the custom or usage of the Establishment, viz., holidays under the and festival holidays peculiar to this locality which are being given.
5 0 0 Standing Order 10(a) : Leave will be given in accordance with the law and existing practice provided the leave facilities now available to the workers are not curtailed in any manner".
The proceedings which have, given rise to the present appeal by special leave between the appellant and the respondents, its employees, began with the application made by the appellant on the 6th October, 1960, before the Certifying Officer, Madras, for the amendment of the certified Standing Orders to which we have just referred.
By its application, the management of the appellant wanted the said Orders to read thus "Standing Order 5(b) : For all workmen who have joined service prior to . holidays under the , and festival holidays of one day per year which day may be chosen by the workmen shall be given.
For all workmen who have joined on and after holidays under the Madras Industrial Establishments (National and Festival holidays) Act, 1958 shall be given." "Standing Order 10(a) Leave will be given to all employees who are appointed on and after . iii accordance with the provisions of the Madras Shops and Establishment Act, 1947 or any statutory modification thereof (irrespective of whether this Act applies or not to any category of employee or employees).
Provided, however, that for all employees who have been confirmed prior to the above said date, viz the leave facilities now available are not curtailed in any manner".
It is relevant to mention the background of the present application.
The appellant believed that the urgent need for increased production and for increased supply of electrical energy could be met if the existing rules embodied in Standing Orders 5(b) and 10(a) were suitably modified; and so, the appellant wanted to make the change in the said two Standing Orders on the lines indicated by it in its application to the Certifying Officer.
It appears that these Rules were introduced by the appellant on the 1st October, 1960, and were embodied in the contracts of service of new entrants who joined the appellant 's employment as from that date.
In fact, they were agreed to by such new entrants.
501 In order to regularise the steps taken by the appellant by revising the relevant Rules in respect of the new entrants to its employment, the appellant made the present application.
The change proposed to be made by the appellant in the two Standing Orders in question was resisted by the respondents ' Union.
It was urged by the respondents that the proposed change was unfair and unreasonable, and it was also argued that it would introduce discrimination between one set of employees and another working under the same employer, and that would naturally cause industrial unrest and disharmony.
The Certifying Officer upheld the pleas raised by the respondents and he accordingly directed that the proposed amendments should be negatived.
The appellant then preferred an appeal against the said order before the appellate authority.
Both the parties urged similar contentions before the appellate authority and the said authority agreed with the view taken by the Certifying Officer and dismissed the appeal preferred by the appellant.
It is against this order that the appellant has come to this Court by special leave.
On behalf of the appellant, Mr. Setalvad has urged that the change which the appellant wants to make in the two relevant orders is, on the merits, fair and reasonable; and he adds that the appellant wanted to prove its bona fides by making the changed Standing Orders applicable to the future entrants and not extending them to its employees who were already in its employment and who are governed by the existing Standing Orders.
According to Mr. Setalvad, the Certifying Officer and the appellate authority have erred in law in not certifying the changed Standing Orders as proposed by the appellant.
In dealing with this point, it is necessary to examine the broad features of the Act and consider its main purpose and object.
The Act was passed in 1946 and its main object was to require the employers in industrial establishments to which the Act applied, to define formally the terms and conditions of employment in their respective establishments.
In imposing this obligation on the employers, the Act intended that the terms and conditions of industrial employment should be well defined and should be known to the employees before they accepted the employment.
As we will presently point out, one of the objects of the Act was to introduce uniformity of terms and conditions of employment in respect of workmen belonging to the same category and discharging the same or similar work under an industrial establishment.
Before the Act was passed, employees in many industrial establishments were governed by oral terms and conditions of service which CI/66 2 502 were not uniform and which had been entered into on an ad hoc basis.
The Act now requires that terms and conditions of employment in relation to matters specified in the Schedule must be included in the Standing Orders and they must be certified.
It would at once be clear that by the operation of the Act, all industrial establishments will have to frame terms and conditions of service in regard to all the matters specified in the Schedule, and that naturally would introduce an element of uniformity inasmuch as industrial employment in all establishments to which the Act applied would, after the Act was passed, be governed by terms and conditions of service in respect of matters which are common to all of them.
That, in brief, is the object which the Act intends to achieve.
Let us now see the scheme of the Act. "Standing Orders" are defined by section 2(g) as meaning rules relating to matters set out in the Schedule; these matters are 11 in number, and the last one of them refers to any other matter which may be prescribed "Prescribed" according to section 2(f) means prescribed by rules made by the appropriate Government under this Act; and so, Standing Orders mean rules made in relation to the matters enumerated in clauses 1 to 10 in the Schedule as well as any other matter which may in future be added by means of rules to be made by the appropriate Government.
This gives a general idea about the matters which are intended to be covered by the Standing Orders.
Section 3 of the Act requires the submission of draft Stand ing Orders by the employer within six months from the date on which the Act becomes applicable to an industrial establishment.
A statutory obligation has been imposed upon the employer to take necessary action as required by section 3(1).
Section 4 requires that the Standing Orders must deal with every matter set out in the Schedule which is applicable to the industrial establishment, and must be in conformity with the provisions of the Act.
Section 5 deals with the proceedings for certification of the standing orders by the Certifying Officer.
Section 6 provides for appeals against the orders passed by the Certifying Officer Section 7 prescribes the date on which the certified standing orders will come into operation.
Section 10(2) provides for the modification of the standing orders.
Section 13A provides for the machinery to deal with questions in relation to the application or interpretation of the standing orders certified under the Act; and section 15 confers powers on the appropriate Government to make rules to carry out the purposes of the Act.
5 0 3 When the Act was originally passed, the powers of the Certi fying Officer as well as those of the appellate authority were limited to consider the question as to whether the standing orders submitted for certification were in accordance with the Act or not.
By an amendment made in 1956, jurisdiction has been conferred on the Certifying Officer as well as the appellate authority to adjudicate upon the fairness or reasonableness of the provisions of the Standing Orders submitted for certification.
That means the jurisdiction of the appropriate authorities functioning under the Act has now been widened and they are required to consider whether the Standing Orders submitted to them for their approval are fair or reasonable.
Parties can make their contentions in respect of the fairness or reasonableness of the proposed Standing Orders, and the appropriate authorities will adjudicate upon the said contentions.
That is one change made in 1956.
The other change made in the original provisions of the Act which is relevant for our purpose is in regard to the provisions contained in section 10(2).
Under the original provision of section 10(2), it was only the employer who was authorised to make an application to the Certifying Officer to have the Standing Orders modified.
By the amendment made in 1956, even workmen are now entitled to apply for the modification of the Standing Orders.
The result of this amendment is that if workmen are dissatisfied with the operation of the existing Standing Orders, they can move for their modification by applying to the Certifying Officer in that behalf.
Before this amendment was made, the only course open to the workmen to adopt for securing any modification in the existing Standing Orders was to raise an industrial dispute and move the appropriate government to refer the said dispute to the adjudication of the appropriate Industrial Tribunal.
Both these amendments have been introduced by Act No. 36 of 1956.
Now, the question which we have to decide is : is it permis ible for an industrial establishment to have two sets of Standing Orders to govern the relevant terms and conditions of its employees ? Mr. Setalvad argues that if the change is intended to be made in the existing Standing Orders, it should be permissible and indeed legitimate for an employer to seek for the change on .he ground that the said change would be reasonable and fair,, provided the existing rights of employees already employed are ,lot affected by such change.
Prima facie, this argument appears to be attractive; but if we examine the scheme of the relevant Provisions of the Act in the light of the matters specified in the schedule in respect of which Standing Orders are required to be 504 made, it appears that two sets of Standing Orders cannot be made under the Act.
Let us first examine the matters specified in the Schedule.
They are specified under cls.
( 1 ) to ( 11 ).
The first is in regard to classification of workmen.
The second is in relation to the manner of intimating to workmen periods and hours of work, holidays, pay days and wage rates.
The third has reference to shift working; the fourth to attendance and late coming.
Clause (5) relates to conditions of, procedure in applying for, and the authority which may grant, leave and holidays.
Clause (6) deals with the requirement to enter premises by certain gates, and liability to search.
Clause (7) is concerned with the closing and reopening of sections of the industrial establishment, and temporary stoppages of work and the rights and liabilities of the employer and workmen arising therefrom.
Clause (8) deals with the termination of employment, and the notice thereof to be given by employer and workmen.
Clause (9) covers the subject of suspension or dismissal for misconduct, and acts or omissions which constitute misconduct.
Clause (10) relates to means of redress for workmen against unfair treatment or wrongful exactions by the employer or his agents or servants.
Clause (11) is the residuary clause which refers to any other matter which may be prescribed.
One has merely to examine these clauses one by one to be satisfied that there is no scope for having two separate Standing Orders in respect to any one of them.
Take the case of classification of workmen.
It is inconceivable that there can be two separate Standing Orders in respect of this matter.
What we have said about classification is equally true about each one of the other said clauses; and so, the conclusion appears to be irresistible that the object of the Act is to certify Standing Orders in respect of the matters covered by the Schedule; and having regard to these matters, Standing Orders so certified would be uniform and would apply to all workmen alike who are employed in any industrial establishment.
Prior to the enactment of the Act, industrial establishments used to employ workmen on different terms and conditions of service and they used to enter into separate agreements with employees on an ad hoc basis.
It was precisely with the object of avoiding this anomalous position that the Act has been passed, and an obligation has been imposed upon the industrial establishments to have their Standing Orders certified by the appropriate authorities.
Therefore, we do not think Mr. Setalvad is right in 505 contending that it is open to an industrial establishment to have two sets of Standing Orders certified in relation to leave and holidays provided that the modified Standing Orders apply to future entrants and the existing Standing Orders apply to entrants who are already in the employment of the establishment.
On principle, it seems expedient and desirable that matters specified in the Schedule to the Act should be covered by uniform Standing Orders applicable to all workmen employed in an industrial establishment.
It is not difficult to imagine how the application of two sets of Standing Orders in respect of the said matters is bound to lead to confusion in the working of the establishment and cause dissatisfaction amongst the employees.
If Mr. Setalvad is right in contending that the Standing Orders in relation to these matters can be changed from time to time, it may lead to the anomalous result that in course of 10 or 15 years there may come into existence 3 or 4 different sets of Standing Orders applicable to the employees in the same industrial establishment, the application of the Standing Orders depending upon the date of employment of the respective employees.
That, we think, is not intended by the provisions of the Act.
Once the Standing Orders are made, it is not unlikely that disputes may arise between the employer and the employees in regard to their application or their interpretation, and the Act has specifically made a provision for dealing with problems of this kind.
As we have already indicated, section 13A provides that if any question arises as to the application or interpretation of a Standing Order certified under the Act, an employer or a workman may refer the question to any one of the Labour Courts indicated by the section, and the said Labour Court shall, after giving the parties an opportunity of being heard, decide the question and such decision be final and binding on the parties.
The result, therefore, appears to be that in regard to the certification of the Standing Orders, the Act provides for a self contained Code.
The Certifying Officer is given the power to consider questions of fairness and reasonableness as well as the other questions indicated by section 4(a) and (b).
An appeal is provided against the decision of the Certifying Officer and in case a dispute arises as to the interpretation or the application of the Standing Order, a remedy is provided by section 13A.
Besides, as we have already pointed out, a right is given both to the employer and the workmen to move the appropriate authorities for modification of the existing Standing Orders.
That is why we do not think that Mr. Setalvad is right in contending that the Certifying 506 Officer as well as the appellate authority erred in law in refusing to certify the modified Standing Orders submitted by the appellant for certification.
It may be that even in regard to matters covered by certified Standing Orders, industrial disputes may arise between the.
employer and his employees, and a question may then fall to be considered whether such disputes can be referred to the Industrial Tribunal for its adjudication under section 10(1) of the Industrial Disputes Act.
In other words, where an industrial dispute arises in respect of such matters, it may become necessary to consider whether, notwithstanding the self contained provisions of the Act, it would not still be open to the appropriate Government to refer such a dispute for adjudication.
We wish to make it clear that our decision in the present appeal has no relation to that question.
In the present appeal, the only point which we are deciding is whether under the scheme of the Act, it is permissible to the em ployer to require the appropriate authorities under the Act to certify two different sets of Standing Orders in regard to any of the matters covered by the Schedule.
It now remains to consider the three decisions to which Mr. Setalvad has invited our attention.
In Rai Bahadur Diwan Badri Das vs The Industrial Tribunal, Punjab(1), this Court had to consider the question as to whether the Tribunal against whose award an appeal had been brought to this Court by the appellant Rai Bahadur Diwan Badri Das was in error in refusing to allow the appellant 's prayer that he should be permitted to introduce a new rule in respect of leave with wages applicable to the entrants in his employment after the 1st of July, 1956.
It appears that on the said date, the appellant made a rule that every workman employed on or before that date would be entitled to 30 days leave with wages after working for 11 months and workmen employed after that date would be entitled to earned leave in accordance with the provisions of section 79 of the Indian .
This rule led to an industrial dispute which was referred to the Industrial Tribunal, and the Tribunal held that all the workmen were entitled to 30 days earned leave as under the existing rule and that the rule made by the appellant on the 1st of July, 1956 cannot be enforced.
It was this award which was challenged by the appellant before this Court, and the challenge was based on the broad and general ground that the employer had full freedom of contract to make a rule for the employment of his employees and that the Industrial Tribunal is not entitled to (1) 507 interfere with his freedom of contract.
It appears that the change which the employer sought to make by the new rule did not involve any appreciable financial burden, and it was not the case of the appellant that the existing rule caused any hardship to him.
The appellant, however, wanted to urge before this Court the theoretical ground that in a matter of employment, an industrial employer is entitled to make his own conditions with his employees and that industrial adjudication should not interfere with his freedom of contract in that behalf.
Indeed, as the majority judgment shows, the appellant was a good employer and was treating his employees in a very liberal manner.
He, however, brought the dispute before this Court in order to assert the general principle which was raised for the decision of this Court.
That is the background of the majority decision in Rai Bahadur Diwan Badri Das 's(1).
Dealing with the broad point raised by the learned Solicitor General on behalf of the appellant in that case, this Court held that several decisions pronounced by industrial adjudication had now established the principle that the doctrine of absolute freedom of contract had to yield to the higher claims for social justice.
Even so, this Court took the precaution of making it clear that the general question about the employer 's right to manage his own affairs in the best way he chooses, cannot be answered in the abstract without reference to the facts and circumstances in regard to which the question is raised, and it was pointed out that in industrial matters of this kind, there are no absolutes and no formula can be evolved which would invariably give an answer to different problems which may be posed in different cases on different facts.
Having thus dealt with the general point raised by the learned Solicitor General in Rai Bahadur Diwan Badri Das 's(1) case, the majority decision considered the facts in that particular case and held that the Tribunal was not shown to have been in error when it held that in the matter of earned leave there should be uniformity of conditions of service governing all the employees in the service of the appellant.
It was in that connection that reference was made to the fact that in regard to all the other terms and conditions of service, there was uniformity in the appellant 's establishment itself; and so, it was thought that the Tribunal might have been justified in discouraging a departure from the said uniformity in respect of one item, viz., earned leave.
It would thus be clear that this decision does not lay down any general (1) 508 principle at all.
In fact, this decision emphatically brings out the point that in dealing with industrial disputes, industrial adjudication should always resist the temptation of laying down any broad, general or unqualified propositions.
Therefore, we do not think that the decision of this Court in the case of R. B. Diwan Badri Das(1) is of much assistance.
In that case, the Court was dealing with an award pronounced by an Industrial Tribunal in an industrial dispute; and the narrow question which the Court decided was that the Industrial Tribunal was not in error in not upholding the rule made by the employer on the 1st July, 1956.
In the present case, we are dealing with proceedings arising under the Act and that means that considerations which govern the present proceedings are not necessarily the same as those which would govern the decision of an industrial dispute brought before the Industrial Tribunal for its adjudication under the Industrial Disputes Act.
The next decision to which Mr. Setalvad has referred was pronounced by this Court in the case of Associated Cement Staff Union and Another vs Associated Cement Company and Others(1).
During the course of the hearing of this appeal, some arguments were urged before us on the question about the relation between terms and conditions of service governing working hours, leave, and the like, and the wages paid to the employees.
Mr. Ramamurti who appeared for the respondents conceded that the terms and conditions in regard to leave or working hours can be changed; but he contended that the increase in the working hours or the reduction of earned leave should not be permitted to be introduced without taking into account the question about the consequent increase in the wage structure itself; and it was with a view to combat this contention that Mr. Setalvad referred us to the decision in the Associated Cement Co.(1).
In that case, the question of holidays, working hours and wages were all referred to the Industrial Tribunal for its decision.
The matter which arose for the decision of this Court in the appeals which were brought to this Court in that case, was, inter alia, in regard to holidays.
The Tribunal had allowed 21 holidays, whereas this Court reduced the number to 16.
Dealing with the question about the normal working hours, this Court observed that "once a conclusion about the normal working hours is reached after considering the optimum working hours on a consideration of all the relevant factors, industrial adjudication cannot hesitate to give effect to its conclusion merely because the workmen would have been entitled (1) (2) 509 to more wages at overtime rates if the hours of work had been fixed at less".
Mr. Setalvad relies upon this observation.
But we think it would be unreasonable to read this observation in isolation, because in the very next sentence, this Court has added that it is true that in fixing the proper wage scale, the question of workload and the matter of working hours cannot be left wholly out of consideration, though it further observed that many other factors including the need of the workmen, the financial resources of the employer, the rates of wages prevailing in other industries in the region, have all to be considered in deciding the wage scale.
It appears that in that case, the Tribunal itself had held that 21 holidays erred on the side of excessive liberality, and yet it did not reduce that number.
That is why this Court reduced the number of holidays from 21 to 16.
This decision, in our opinion, does show that where industrial adjudication has to deal with an industrial dispute in relation to wage structure, working hours, and holidays, it must consider the problem comprehen sively and in prescribing the working hours, and making provision for holidays and leave with or without pay, amongst other relevant factors, the wages paid to the 'employees have no doubt to be taken into account.
But these considerations do not arise in the present proceedings, because what the appropriate authorities under the Act had to consider was whether two sets of Standing Orders should be permitted under the same establishment or not.
The last case to which reference must be made is Guest, Keen, William Private Ltd. vs P. J. Sterling and Others(1).
In that case, the Standing Order had been certified under the Act prior to its amendment.
The relevant Standing Order had relation to the age of retirement of the employees under the establishment in question.
When the Standing Order was certified, its fairness and reasonableness could not have been examined by the Certifying Authority.
After it was certified, the employer sought to give effect to the age of retirement in regard to employees who were already in its employment; and that gave rise to an industrial dispute.
The employees who were already in the employment of the employer, contended that prior to the certification of the Standing Order, there was no, age of retirement in the concern and they urged that the certified Standing Order could not affect their right to continue in the employment so long as they were fit to discharge their duties.
It was in the contending this dispute that the question arose as to whether the certified Standing Order applied to the previously existing employees.
The Labour Appel (1) ; 510 late Tribunal against whose decision the appeal was brought to this Court by the appellant Guest, Keen, Williams Private Ltd., had held that the certified Standing Order could not apply to the ,employees who were already in the employment of the appellant.
This Court affirmed the view expressed by the Labour Appellate Tribunal that the certified Standing Order could not affect the rights of the previous employees; nevertheless, it was held that the question of prescribing an age of retirement for them could be considered in the proceedings before the Court and under the special circumstances to which reference has been made in the judgment, it was thought that the age of superannuation for prior employees could be reasonably and fairly fixed at 60 years.
This decision again is not of any assistance, because the matter came to this Court from an industrial dispute which was the subject,matter of industrial adjudication before the Industrial Tribunal and the Labour Appellate Tribunal; and all that this Court did was to fix an age of superannuation or workmen who had been employed prior to the date of the certification of the relevant Standing Order, at 60, and that course was adopted under the special and unusual circumstances expressly stated in the course of the judgment.
As we have already pointed out, the question as to whether two sets of Standing Orders can be certified under the provisions of the Act, did not fall to be considered in that case.
Therefore, we are satisfied that the Certifying Officer as well as the appellate authority committed no error of law in refusing to certify the modified Standing Orders submitted by the appellant in the present proceedings.
The result is, the appeal fails and is dismissed with costs.
Appeal dismissed.

summary:
The appellant company, which carried on the business of buying bulk electrical energy and distributing it to consumers, made an application under the , to the Certifying Officer, Madras, for an amendment of two of its certified Standing Orders relating to holidays and leave.
It was claimed by the appellant that the urgent need for increased production and for increased supply of electrical energy could be met if the existing rules embodied in the two standing orders were suitably amended; the amendments pro posed sought to introduce different rules relating to holidays and leave for employees who were appointed before a specified date and those who joined service after that date.
The proposed amendments were resisted by the respondents ' union on the ground, inter alia, that they would introduce discrimination between one se of employees and another resulting in industrial unrest and disharmony.
The Certifying Officer upheld the respondents I plea and nega tived the amendments.
An appeal to the appellate authority against this decision was dismissed.
it was contended on behalf of the appellant that the proposed amendments were fair and reasonable and that the Certifying Officer and, the appellate authority had erred in law in not certifying the Standing Orders as proposed to be amended.
HELD : (i) The Certifying Officer and the appellate authority committed no error of law in refusing to certify the modified Standing Orders.
[510 E] The Act provides a self contained code and the Certifying Officer is given the power to consider questions of fairness and reasonableness as well as other questions indicated by section 4(a) and (b).
An appeal is provided against the decision of the Certifying Officer and in case a dispute arises as to the interpretation or the application of the Standing Order, a remedy is provided In section 13A.
A Tight is given both to the employer and the workman to move the appropriate authorities for modification of the existing Standing Orders.
[505 G H] (ii) It is clear from the provisions of the Act requiring industrial establishments to have their Standing Orders certified that matters specified in the Schedule to the Act should be covered by uniform Standing Orders applicable to all workmen employed in an industrial establishment.
[505 B] 499 Rai Bahadur Diwan Badri Das V. The Industrial Tribunal, Punjab;[1963] 3 S.C.R. 930; Associated Cement Staff Union vs Associated Cement Co.,& Ors. ; Guest Keen Williams Private Ltd. vs F. I. Sterling and others: ; ; referred to.


judgement:
Appeal No. 274 of 1964.
494 Appeal by special leave from the award dated May 31, 1963 of the Industrial Tribunal, Maharashtra in Reference (I.T.) No. 59 of 1963.
section B. Naik and K. R. Chaudhury, for the appellants.
section V. Gupte, Solicitor General, G. B. Pal, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for respondent No. 1.
A. section R. Chari, K. Raiendra Chaudhury, M. section K. Aiyangar and M. R. K. Pillai, for respondent No. 2.
A. section R. Chari, M. K. Ramamurthi, for interveners.
The Judgment of the Court was delivered by Wanchoo, J.
The only question raised in this appeal by spe cial leave is the propriety of a service condition in the respondent concern by which unmarried women in a particular department have to resign on their getting married.
A dispute was raised about this condition by the appellant union on behalf of the workmen and was referred to the Industrial Tribunal, Maharashtra, in the following terms "The existing bar on ladies that on their getting married they have to leave the service of the company should be removed.
" The respondent is a pharmaceutical concern.
It appears that there is a rule in force in the respondent concrn according to which if a lady workman gets married, her services are treated as automatically terminated.
It appears that such a rule is in force in other pharmaceutical concerns in that region and the matter came up on two occasions before industrial tribunals for adjudication with reference to other pharmaceutical concerns, and on both occasions the challenge by the workmen to such a rule failed.
On the first occasion the dispute was between the Boots Pure Drug Co. (India) Limited vs Their Workmen(1) and a similar rule was upheld in 1956.
On the second occasion the dispute was between Sandoz (India,) Limited vs Workmen employed under it(2).
There was agitation in the respondent concern in connection with this rule and the present reference was eventually made in February 1963.
The tribunal followed its earlier decision in Sandoz Limited case(2 ) and rejected the contention that the rule be abrogated.
The appellant obtained special leave to appeal from this Court; and that is how the matter has come up before us.
(1) B.G.G. Part I L, dated Jan. 26,1966.
(2) (1962) Industrial Court Reporter 22.
495 Ordinarily we see no reason for such a rule requiring un married women to give up service on marriage, particularly when it is not disputed that no such rule exists in other industries.
It is also not in dispute that no such rule exists in other departments of the respondent concern itself and it is only in one department that the rule is in force.
It can only be upheld if the respondent shows that there are good and convincing reasons why in this particular department of the pharmaceutical industry it is necessary to have such a rule.
The only reason given for enforcement of this rule in this department of the respondent concern is that the workmen have to work in teams in this department and that requires that they should be regular and that this cannot be expected from married women for obvious reasons, and that there is greater absenteeism among married women than among unmarried women or widows against whom there is no bar of this kind.
We are not impressed by these reasons for retaining a rule of this kind.
The work in this department is not arduous for the department is concerned with packing, labelling, putting in phials and other work of this kind which has to be done after the pharmaceutical product has been manufactured.
Nor do we think that because the work has to be done as a team it cannot be done by married women.
We also feel that there is nothing to show that married women would necessarily be more likely to be absent than unmarried women or widows.
If it is the presence of children which may be said to account for greater absenteeism among married women, that would be so more or less in the case of widows with children also.
The fact that the work has got to be done as a team and presence of all those workmen is neces sary, is in our opinion no disqualification so far as married women are concerned.
It cannot be disputed that even unmarried women or widows are entitled to such leave as the respondent 's rules provide and they would be availing themselves of these leave facilities.
The only difference in the matter of absenteeism that we can see between married women on the one hand and unmarried women and widows on the other is in the matter of maternity leave which is an extra facility available to married women.
To this extent only, married women are more likely to be absent than unmarried women and widows.
But such absence can in our opinion be easily provided for by having a few extra women as leave reserve and can thus hardly be a ground for such a drastic rule as the present which requires an unmarried woman to resign as soon as she marries.
We have been unable to understand how it can be said that it is necessary in the interest of efficient ope 496 ration and in the company 's economic interest not to employ married women.
So far as efficient operation is concerned, it can hardly be said that married women would be less efficient than unmarried women or widows so far as pure efficiency in work is concerned, apart of course from the question of maternity leave.
As to the economic interest of the concern, we fail to see what difference the employment of married women will make in that ,connection for the emoluments whether of an unmarried woman ,or of a married woman are the same.
The only difference between the two as we have already said is the burden on account ,of maternity leave.
But as to that the respondent contends that the reason for having this rule is not the respondent 's desire to avoid the small burden to be placed on it on account of maternity leave.
If that is so, we fail to see any justification for a rule ,of this kind which requires an unmarried woman to give up service immediately she marries.
We are therefore of opinion that there is no good and convincing reason why such a rule should continue in one department of the pharmaceutical industry.
The fact that such a rule exists in other such concerns is no justification, if the rule cannot be justified on its own merits.
Then it is urged that the employer was free to impose any condition in the matter of employment when he employs a now workman and that industrial adjudication should not interfere with this right of the employer.
AR that need be said in this connection is that it is too late in the day now to stress the absolute freedom of an employer to impose any condition which he likes on labour.
It is always open to industrial adjudication to consider the conditions of employment of labour and to vary them if it is found necessary, unless the employer ran justify an ,extraordinary condition like this by reasons which carry conviction.
In the present case the reasons which the respondent has advanced and which were the basis of the two decisions referred to earlier do not commend themselves to us as sufficient for such a rule.
We are therefore of opinion that such a rule should be abrogated in the interest of social justice.
Lastly it is urged that a similar rule exists in certain government services and in this connection our attention is drawn in particular to r. 5(3) of the 1954 Indian Administrative Service (Recruitment) Rules.
That rule reads as follows : "No married woman shall be entitled as of right to be appointed to the Service, and where a woman appointed to the Service subsequently marries, the Central Government may, if the maintenance of the 497 efficiency of the Service so requires, call upon her to resign.
" It will be seen that this rule for the Indian Administrative Service is not unqualified like the rule in force in the respondent 's concern.
It only lays down that where an unmarried woman marries subsequently, the Central Government may, if the maintenance of the efficiency of the Service so requires call upon her to resign.
Therefore this rule does not compel unmarried women to resign on marriage as a matter of course as is the case in the respondent concern.
It is only when the Central Government considers that marriage has impaired the efficiency of the woman concerned that the Central Government may call upon her to resign.
The rule which is in force in the respondent concern however assumes that merely by marriage the efficiency of the woman employee is impaired and such an assumption in our opinion is not justified.
At any rate this rule for the Indian Administrative Service which has been brought to our notice only for purposes.
of comparison does not justify the drastic rule that we have in the present case where an unmarried woman is compelled to resign immediately she marries without regard to her continued efficiency.
On a careful consideration of the reasons advanced on behalf of the respondent in support of the existing rule we are of opinion that the reasons do not justify such a drastic rule.
We therefore allow the appeal and direct that the rule in question in the form in which it exists at present be abrogated.
The abrogation shall take effect from the date of this judgment.
The appellants will get their costs from the respondent company.
Appeal allowed.

dataset_name: IN-Abs

summary:
The respondent concern had a rule in its packing and labelling department that if a woman employee got married her service would stand automatically terminated.
The appellant union raised an industrial dispute on this question and it was referred to the Industrial Tribunal, Maharashtra.
The Tribunal held that the rule was justified whereupon, the appellant came to this Court by special leave.
The justification given on behalf of the respondent for the said rule was that in the particular department where the rule operated team work was required for which regular attendance was necessary, and married women, for obvious reasons, could not be expected to be regular in attendance.
It was also contended for the respondent that industrial adjudication should not interfere with the employer 's right to impose any condition in the matter of employment when he employs new workmen.
Rule 5(3) of the Indian Administrative Service (Recruitment) Rules, 1964, was referred to as carrying a similar condition.
HELD: (i) There was nothing to show that married women would by the more likely to be absent than unmarried women or widows.
The only difference was that married women would ask for maternity leave.
This could be provided for by having a few extra women as leave reserve.
So far as efficiency was concerned it could hardly be said that married women would be less efficient than unmarried ones or widows.
The economic interest of the concern was also not affected in any material way.
There was thus no good and convincing reason why such a rule should continue in one department of the pharmaceutical industry.
The fact that such a rule existed in other concerns also was no justification, if the rule could not be justified on its own merits.
The rule, therefore, had to be abrogated.
[495E, G H; 496A B, D] (ii) It is too late in the day to stress the absolute freedom of an employer to impose any condition which he likes on labour.
It is always open to industrial adjudication to consider the conditions of employment of labour and to vary them if it is found necessary.
[496 E F] (iii) Rule 5(3) of the Indian Administrative Service (Recruitment) an unmarried woman marries subself the maintenance of the efficiency her to resign.
This rule does on marriage as a matter of course as the case of the respondent concern.
[497 B C]


judgement:
Appeals Nos. 246 and 287 of 1965.
Appeals by special leave from the Award dated March 5 1964 of the Seventh Industrial Tribunal West Bengal in Case No. VIII 60 of 1963.
M. C. Setalvad, and D. N. MukherJee, for the appellant in (C. A. No. 246/65) and respondent in (C.A. No. 287/65).
A.S. R. Chari and B. P. Maheshivari, for respondent in (C.A. No. 246/65) and appellant in (C.A. No. 287/65).
Two matters in dispute between the management and the workmen Were referred to the tribunal relating to (i) the age of retirement of the workmen at the head office and the factory of the company and (ii) the introduction of : gratuity scheme for workmen employed at the head office and the factory.
The tribunal fixed the age of retirement for clerical an( ,subordinate staff at 58 years and for workmen in the factory a 55 years.
The tribunal also introduced a gratuity scheme after 5 2 5.
considering the objections raised to the draft scheme proposed by the company.
of the two appeals one is by the company relating to the gratuity scheme and the other by the workmen relating to the age of retirement as well as to the gratuity scheme.
We shall first consider the question of age of retirement.
It may be mentioned that there was no retirement age in force in this company and so the position when the reference was made was that the workmen could continue to work so long as they were physically or mentally fit.
The workmen contended that the age of retirement both for the head office and factory workmen should be fixed at 60 years.
The company however proposed that the age of retirement should be 55 years for all workmen.
The tribunal as already indicated has fixed the age of retirement at 58 years for clerical and subordinate staff and 55 years for factory workmen and has apparently relied on the decision of this Court in Workmen of Jessop & Co. Limited vs Jessop and Company Limited(1).
Now this is a case where there was no age of retirement before the reference was made and the workmen whether at the head office or at the factory were all entitled to work so long as they were physically or mentally fit.
So far as the existing workmen are concerned, we think that the tribunal should have fixed the age of retirement at 60 years both for the factory workmen as well as head office workmen.
It is enough in this connection to refer tothe decision of this Court in Guest, Keen,Williams (Private) Limited vs Sterling(P.J.) (2) where in a similar situation this Court fixed the ageof retirement at 60 years in the case of existing workmen.
Then there is the question as to future workmen and whether their age of retirement should also be fixed at the same level as in the case of existing workmen.
We are of opinion that generally speaking there should not be any difference in the age of retirement of existing workmen and others to be employed in future in a case like the present unless there are special circumstances justifying such difference.
In this connection our attention is drawn to the case of Guest, Keen, Williams (P) Limited(2) where the age of retirement of future workmen was 55 years.
In that case however the age of retirement of future workmen was fixed at 55 years by the Standing Order and the question whether that age of retirement should be changed was not before this Court for consideration.
All that this Court had to consider in that case was whether the age of retirement of existing employees, before the Standing Order fixing the age of retirement at 55 years was intro (1) (2) ; : :526 educed, should be 60 years or not.
In the present company so far there is no age of retirement and unless there are valid and cogent reasons for making a diference in the age of retirement of existing workmen and those employed in future, the future workmen .should also have the benefit of the same, age of superannuation.
Considering that there has been a general improvement in the standard of health in this country and also considering that longevity has increased, fixation of age of retirement at 60 years appears to us to be quite reasonable in the present circumstances.
Age of retirement at 55 years was fixed in the last century in government service and had become the pattern for fixing the age of retirement everywhere.
But time in our opinion has now come considering the improvement in the standard of health and increase in longevity in this country during the last fifty years that the age of retirement should be fixed at a higher level, and we consider that generally speaking in the present circumstances fixing the age ,of retirement at 60 years would be fair and proper, unless there are special circumstances justifying fixation of a lower age of retirement.
Now so far as the clerical and subordinate staff are concerned, we are of opinion that there is no reason for any difference in the age of retirement as between the existing staff and the future staff.
Their work is exactly the same, and in the circumstances there ;should be the same age of retirement.
As to the factory workmen, it is urged that their age of retirement should be fixed at a lower level as work in the factory is more arduous than the work of clerical and subordinate staff, and in this connection reliance is placed on the decision of this Court in Jessop and Company(1) where one age was fixed for clerical and .subordinate staff and a slightly lower age was fixed for the factory workmen.
Here again we are of opinion that generally speaking, there is no reason for making a difference in the age of retirement as between clerical and subordinate staff on the one hand and 'factory workmen on the other, unless such difference can be justified on cogent and valid grounds.
It is only where work in the factory is of a particularly arduous nature that there may be reason for fixing a lower age of retirement for factory workmen as compared to clerical and sub ordinate staff.
This appears to have been no in the case of jessop and Company(1) for that was a heavy engineering concern, where presumably work in the factory was much more arduous as com (1)[1964] 527 pared to the work of clerical and subordinate staff.
There might therefore have been then some justification for fixing a lower age, of retirement for factory workmen in the case of those factories where the work is of a particularly arduous nature.
But the present company is a paints manufacturing company and there is in our opinion no reason to suppose that the work in the factory in the present case is particularly arduous as compared to the work of clerical and subordinate staff.
We therefore think that even in the case of future factory workmen in the present concern there is no special reason why the age of retirement should be fixed at a lower level.
It is of course always possible for an employer to terminature the services of a workman if he becomes physically or mentally incapable of working before the, age of retirement.
This power being there, there is no reason to suppose that there will be inefficiency in work on account of fixing the age of retirement at 60 years; on the other hand with the age of retirement at 60 years there *HI be added advantage that more experienced workmen will be available to the management and that would be a cause for greater efficiency.
On the whole therefore we are of opinion that the age, of retirement in the case of factory workmen also in the present company should be fixed at the age of 60 years.
We therefore modify the award of the tribunal and fix the age of retirement for the clerical and subordinate staff as well as for the factory workmen, whether existing or future, at the age of 60 yews.
We now turn to the gratuity scheme.
Two points have been urged on behalf of the company in this connection.
The tribunal has fixed five years minimum service in order to enable a workman to earn gratuity.
This has been provided in the event of (a) death of an employee while in service of the company, (b) discharge or voluntary retirement of an employee on grounds of medical unfitness, (c) voluntary retirement or resignation before reaching the age of superannuation, (d) retirement on reaching the age of superannuation, or (e) termination of service by the company for reasons other than misconduct resulting in loss to the company in money and property.
The management objects to the minimum period being five years in the case of voluntary retirement or resignation before reaching the age of superannuation.
It is contended that gratuity schemes usually provide for a longer minimum of service in the case of voluntary retirement or resignation before reaching the age of superannuation.
We think that there is substance in this contention.
The reason for providing a longer minimum period for earning gratuity in the case of 528 voluntary retirement or resignation is to see that workmen do not leave one concern after another after putting the short Minimum service qualifying for gratuity.
A longer minimum in the case of voluntary retirement or resignation makes it more probable that the workmen would stick to the company where they are working.
That is why gratuity schemes usually provide for a longer minimum in the case of voluntary retirement or resignation.
We may in this connection refer to the Express Newspapers (Private) Limited vs the Union of India(1) where a short minimum for voluntary retirement or resignation was struck down.
Again in The Garment Cleaning Works vs Its Workmen(2), 10 years minimum was prescribed to enable an employee, to claim gratuity if he resigned.
In the Management of Wenger and Company vs Their workmen(3), a distinction was made between termination of service by the employer and termination resulting from resignation given by an employee.
In the first case the minimum was fixed at 5 years; in the second the minimum period was fixed at 10 years by this Court.
We therefore modify the gratuity scheme in this regard and order that in the case of voluntary retirement or resignation by an employee before reaching the age of superannuation, the minimum period of qualifying service for gratuity should be ten years, and not five years as prescribed by the tribunal.
The next point that has been urged on behalf of the manage ment in this connection is that the tribunal has while fixing 21 days ' basic wage or salary as the quantum for gratuity for each completed year of service included dearness allowance in the words "basic wage or salary".
It is urged that the usual pattern of gratuity scheme provides for gratuity on basic wages, and dearness allowance generally speaking is not included in basic wages for fixing the quantum of gratuity.
It is further urged that by including dearness allowance within the definition of "basic wages or salary" as given in the scheme in this case, the tribunal has really more or less doubled the quantum of gratuity for each completed year of service.
There is in our opinion force in this contention also.
In May and Baker (India) Limited vs Their workmen(4), the workmen claimed in this Court that gratuity should be fixed on gross salary.
In that case the tribunal had fixed the quantum on basic salary i.e. it had not included (1)[1955] S.C.R.12, at p. 158.
(3)A.I.R. (2)[1962] 1 S.C,R. 711, 714.
(4) [1961] 11 L.L.J. 529 dearness allowance for this purpose and the reason given by the tribunal for fixing the quantum of gratuity on basic salary was that the workmen in that case were getting double retiring benefit, namely both gratuity and provident fund.
That view of the tribunal was upheld by this Court.
On the other hand, it has been urged that in some cases quantum of gratuity has been fixed on gross salary i.e. basic wages plus dearness allowance and in this connection reference was made to British India Corporation vs The Workmen(1).
In that case this Court upheld the award of the tribunal fixing gratuity on the basis of consolidated wages.
This Court pointed out that the usual pattern was to fix quantum of gratuity on the basis of basic wages but refused to interfere in that case because the practice in the concern in that case already existing was to fix gratuity on consolidated wages.
In the present case also there is a provident fund scheme in force.
So with the introduction of the gratuity scheme, the employees will be getting double retiring benefit.
In such circumstances we are of opinion that the tribunal should not have defined basic wages so as to include dearness allowance.
Besides as the gratuity scheme is being introduced for the first time in this concern, it would be proper to follow the usual pattern of fixing the quantum of gratuity on basic wages (excluding dearness allowance), especially when there is another retiring benefit in the shape of provident fund already existing in this concern.
We therefore modify the award of the tribunal in this respect and order that gratuity should be paid at the rate of 21 days ' basic wages or salary for each completed year of service, and this basic wage will not include dearness allowance or any other allowance.
Subject to these modifications, the scheme framed by the tribunal will stand.
The workmen have also assailed the gratuity scheme and their case is that they should have been granted 30 days wages as prayed for by them instead of 21 days ' basic wages fixed by the tribunal.
We do not think there is any case for increasing the quantum of gratuity fixed by the tribunal at 21 days ' basic wages as modified by us for each completed year of service, for there is a provident fund scheme also in force in this concern and the workmen are thus getting two retiring benefits.
No other point has been pressed before us.
(1) (1965) Vol.
10 Factory Law Reports 244.
5 30 We therefore partly allow the appeal of the company and make the two modifications in the gratuity scheme as indicated above.
We also partly allow the appeal of the workmen and fix the retirement age for all workmen existing or future clerical, subordinate and factory workmen at 60 years.
In the circumstances we make no order as to costs in both the appeals.
Appeals allowed in part.

summary:
Two matters in dispute between the management of a paints manufacturing company and their workmen, namely: (1) the are of retirement of the workmen and (ii) the introduction of a gratuity scheme for them, were referred to the Industrial Tribunal.
Before the reference was made the workmen were entitled to work so long as they were physically and mentally fit.
The Tribunal fixed the age of retirement for clerical and subordinate staff at 58 years and for the factory workmen at 55 )rears.
The Tribunal also introduced a gratuity scheme.
It fixed 5 years minimum service in order to enable a workman to earn gratuity and while fixing 21 days ' basic wage or salary as the quantum for gratuity for each completed year of service, included dearness allowance in the words "basic wage or salary.
" Both the management and workmen appealed to this Court.
The workmen contended that : (i) the age of retirement both for the staff of the head office and the factory workmen should be fixed at 60 years, and (ii) 30 days ' wages instead of 21 days should have been fixed as the quantum for gratuity.
The management objected to the minimum period of five years to enable a workman to earn gratuity even in the case of voluntary retirement or resignation and contended for a longer minimum of service.
The management also urged that dearness allowance should not be included in the basic wages for fixing the quantum of gratuity.
HELD:(i) The award of the Tribunal should be modified, fixing :he age of retirement, for the clerical and subordinate staff as well as for the factory workmen, whether existing or future,at the age of 60 years.
[527 E] Age of retirement of 55 years was fixed in the last century in government service and had become the pattern for fixing the age of retirement everywhere.
But considering the improvement in the standard of health and increase in longevity, the age of retirement should be fixed ordinarily it the higher level of 60 years.
Since the work in the factory in the present case was not particularly arduous as compared to that of the clerical and subordinate staff, even in the case of factory workmen there s no reason why the age of retirement should be fixed at a lower level, specially when the management could always terminate the services of a workman if he becomes physically or mentally incapable of working, before the age of retirement.
With the age of retirement at 60 years here will be the added advantage that more experienced workmen will be available to the management and that would be a cause for greater efficiency.
As there are no valid and cogent reasons for making a difference in the age of retirement of existing workmen and those employed in future, the future workmen, both clerical and subordinate staff as 524 well as factory workmen, should also have the benefit of the same age of superannuation.
[526 B D; 527 B D] (ii)No case for increasing the quantum of gratuity from 21 days basic wage to 30 days ' basic wage had been made out by the workmen, especially when there was a provident fund scheme also in force in the concern and the workmen, were thus getting two retiring benefits.
[529 H] (iii)In the case of voluntary retirement or resignation by an employee before reaching the age of superannuation, the minimum period of qualifying service for gratuity should be 10 years, and not 5 years as prescribed by the Tribunal.
[528 E] The reason for pro tiding a longer minimum period of earning gratuity in the case of voluntary retirement or resignation is to see that workmen do no ' leave one concern after another, after putting in the short minimum service qualifying for gratuity; and gratuity schemes usually provide for a longer minimum in the case of voluntary retirement or resignation.
[527 A B] (iv)Gratuity should be paid at the rate of 21 days ' basic wage or Wary for each completed year of service, but such basic wage would not include dearness or any other allowance.
[529 F] As the gratuity scheme was being introduced for the first time in the concern, it would be proper to follow the usual pattern of fixing the quantum of gratuity on basic wages, excluding dearness allowance, especially when there was another retiring benefit in the shape of provident fund already existing in the concern.
[529 E] Case law reviewed.


judgement:
Appeal No. 541 of 1963.
Appeal by special leave from the order dated August 23, 1961 of the Punjab High Court in Civil Misc.
No. 120 of 1961.
Bhagwani Lal, E. C. Agarwala and P. C. Agarwalla, for the appellant.
Deepak Dutt Chaudhry and B. R. G. K. Achar, for respondents Nos. 1 to 3.
Janardhan Sharma, for respondent No. 4.
The Judgment of SUBBA RAO and BACHAWAT, JJ. was delivered by BACHAWAT, J., MUDHOLKAR, J. delivered a separate but con curring Judgment.
Bachawat, J.
The appellant is a displaced person to whom 105 ordinary acres of land equivalent to 42 standard acres 11 units in village Jamalpur, Tehsil Hansi, District Hissar, were allotted by the Custodian on October 5, 1949 under the conditions published in the Notification of the East Punjab Government No. 4892/S dated July 8, 1949.
The Punjab Security of Land Tenures Act, 1953 (Punjab Act No. 10 of 1953), hereinafter 513 ,referred to as the Act, came into force on April 5, 1953.
On that date, the aforesaid land was equivalent to 42 standard acres II units, and having regard to proviso (ii) (b) to section 2 (3) of the Act, was permissible area in relation to the appellant, and as the appellant did not own any other land in the State of Punjab, he was a shall landowner within the meaning of section 2(2) of the Act.
On October 22, 1955, as a result of consolidation proceedings, the appellant was granted 101.4/5 ordinary acres of land in exchange for the land originally allotted to him in 1949.
Respondent No. 4 is a tenant of the appellant in respect of a portion of this land.
On February 20, 1958, the appellant filed an application before the Assistant Collector, 1st Grade, Hissar for ejectment of respondent No. 4 under section 9 (1) (i) of the Act on the ground that he is a tenant of the appellant who is a small landowner.
On that date, the aforesaid 101.4/5 acres of land owned by the appellant was equivalent to more than 50 standard acres.
On February 17, 1960, the Assistant Collector dismissed the application.
He held that the appellant was a big landowner, because on the date of the application the land owned by him was equivalent to more than 50 standard acres.
On appeal, on May 2, 1960, the Collector of Hissar set aside the aforesaid order, and allowed the application for ejectment.
He held that the appellant was a small landowner as he was a displaced person and an allotted of less than 50 standard acres.
On August 30, 1960, the Commissioner, Ambala Division, dismissed a second appeal, and on January 2, 1961, the Financial Commissioner dismissed a revision petition filed by respondent No. 4.
Following his previous ruling in Pat Ram vs Milawa Ram(1) and Har Chand Singh vs The Punjab State(2), the Financial Commissioner held that the status of the appellant must be determined on the date of the commencement of the Act and subsequent accretions to his holding arising out of consolidation of holdings and improvements due to good husbandry or advent of irrigation should be ignored.
On August 22, 1961, the Punjab High Court allowed a petition preferred by respondent No. 4 under article 227 of the Constitution of India and set aside the orders of the Collector, the Commissioner and the Financial Commissioner.
The High Court held that the status of the appellant must be determined by evaluating his land in terms of standard acres on the date of the application for ejectment.
The appellant now appeals to this Court by special leave.
(1) (1961) 40 Lahore Law Times, P. 28.
(2) (1961) 40 Lahore Law Times, p. 9. 5 14 The question is whether the appellant is asmall landowner within the meaning of section 9 (1) (i) of the Act.
On a combined reading of sections 2, 3, 4, 5, 5A, 5B, 5C, 10A,19A and 19D, the scheme of the Act appears to be as follows : The entire land held by the landowner in the State of Punjab on the date of the commencement of the Act must be evaluated as on that date and the status of the landowner and his surplus area, if any, must be then ascertained.
If he is then found to be a small landowner, he continues to be so for the purpose of the Act, until he acquires more land, and on taking into account the value of the land in terms of standard acres on the date of the acquisition, he is found to be a big landowner.
The landowner is required to make the necessary reservations or selections and to give the necessary declarations so that his status and the surplus area, if any, held by him may be so determined.
If he is a small landowner at the commencement of the Act, his status is not altered by reason of improvements in the value of his land or re allotment of land on compulsory consolidation of holdings.
In an unreported decision in Surja vs Financial Commissioner of Punjab and others(1), the Punjab High Court held that the status of the landowner for the purposes of an application under section 14A of the Act should be determined by evaluating his land on the date of the application.
On the basis of this ruling, the improvements in the land subsequent to the commencement of the Act could not be ignored; but the legislature considered that this decision had the effect of defeating the purpose of the Act.
It is well known that with a view to get rid of this decision, the legislature inserted section 19 F(b) in the Act by the Punjab Security of Land Tenures (Amendment and Validation) Act, 1962 (Punjab Act No. 14 of 1962).
The object of this amendment will appear from the following passage in the statements of Objects and Reasons published in the Punjab Gazette (Extr.) dated April 27, 1962 : "Some of the recent judicial pronouncements have the effect of defeating the objectives with which the Punjab Security of Land Tenures Act, 1953 was enacted and amended from time to time.
Under the scheme of the parent Act a specific period was allowed for filing of reservations by the landowners the object of which was to find out whether a person was a small landowner or not.
Once that was found the intention was that such a person should continue to be treated as (1) Civil Writ No. 486 or 1961.
515 such for the purposes of the Act so long as he did not acquire more lands.
In other words, his status was not to be altered on account of improvements made on the land or reallotment of land during consolidation.
However, the High Court took a different view in Civil Writ No. 486 of 1961 (Surja versus Financial Com missioner, Punjab and others. ).
Accordingly clauses 3, 6 and 7 of the Bill seek to neutralise the effect of the aforesaid decisions.
" Clause 7 of the Bill related to sections 19 E and 19 F. The amending Act of 1962 was passed on July 4, 1962 during the pendency of the appeal in this Court.
Section 19 F is retrospective in operation and is deemed to have come into force on April 15, 1953.
Section 19 F(b) reads : "19 F.
For the removal of doubts it is hereby declared, (b)that for evaluating the land of any person at any time under this Act, the land owned by him immediately before the commencement of this Act, or the land acquired by him after such commencement by inheritance or by bequest or gift from a person to whom he is an heir, shall always be evaluated for converting into standard acres as if the evaluation was being made on the date of such commencement, and that the land acquired by him after such commencement in any manner shall always be evaluated for converting into standard acres as if the evaluation was being made on the date of such acquisition.
" On a reading of section 19 F(b), it would appear that for the purpose of determining the status of the landowner and evaluating his land at any time under the Act, the land owned by him immediately before the commencement of the Act must always be evaluated in terms of standard acres as if the evaluation was being made on the date of such commencement.
It is not disputed that if the land held by the appellant immediately before the commencement of the Act is so evaluated, the appellant would be a small landowner.
There is no scope for evaluating the subsequent improvements in the land due to consolidation operations or otherwise.
The appellant did not acquire any land after the commencement of the Act.
His status as a small landowner was not altered by reason of subsequent improvements or 516 re allotments of land on compulsory consolidation of holdings.
On the date of the application for eviction, he, therefore, continued to be a small landowner.
The High Court was in error in holding that the status of the appellant should be determined by evaluating his land in terms of standard acres on the date of the application for eviction.
In the result, the appeal is allowed.
We set aside the order of the High Court and restore that of the Financial Commissioner upholding the orders of the Commissioner and the Collector.
We direct that costs throughout will be borne by the parties as incurred.
Mudholkar, J. This is an appeal by special leave from a judgment of the High Court of Punjab allowing a writ petition under article 227 of the Constitution and setting aside orders of the Collector, the Commissioner and the Financial Commissioner made under certain provisions of the Punjab Security of Land Tenures Act, 1953 (hereafter referred to as the Act).
The relevant facts are briefly these : The appellant Bhagwandas is a displaced person from West Pakistan.
He owned 74 standard acres 133 4 units of agricultural land in certain villages in West Pakistan.
On October 5, 1949 he was allotted 42 standard acres and 11 units of land in the village Jamalpur, Tehsil Hansi, District Hissar.
Subsequently proceedings for consolidation of holdings were taken under the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 (Act 50 of 1948).
After those proceedings were finalised the appellant was granted an equivalent area of land in the same village as described in a sanad granted by the President on October 22, 1955 in exchange for the land earlier granted to him.
Under the sanad the appellant was granted proprietary rights in the land.
On February 20, 1958 the appellant, claiming to be a small holder made an application under section 14 A(i) of the Punjab Security of Land Tenures Act, 1953 before the Assistant Collector, I Grade, Hissar, for the ejectment of respondent No. 4 who was a tenant of the land.
In his application the appellant alleged that as 'he held less than 50 standard acres of land he was a "small land owner" and as such had the right to evict the tenant and instead cultivate the land himself.
The application was rejected by the Assistant Collector.
Unfortunately neither party has placed the order of the Assistant Collector on the record of this appeal.
It is, however, common ground that the reason for rejecting the application was that the Assistant Collector found that because of certain improvements the income from the lands 5 17 had risen considerably and that consequently the standard acreage of this land had risen from 42 standard acres to a standard acreage above 50 standard acres and that the appellant 's application was, therefore., untenable under section 14 A.
In an appeal preferred by the appellant the Collector, Hissar held by his order dated May 2, 1960 that since the appellant was allotted only 42 standard acres and 11 units he is entitled to be treated as a small owner of the land and since the tenant had more than 5 standard acres under his cultivation in addition to the appellants land he was liable to be ejected from the land belonging to the appellant which was in his possession.
The Collectors order was upheld by the Commissioner, Ambala Division by his order dated August 30, 1960.
The tenant moved the Financial Commissioner, Punjab in revision against the order of the Commissioner but without success.
He then preferred a writ petition before the High Court which, as already stated, was granted.
According to the High Court the status of a landlord had to be ascertained as existing on the date of the application under section 14 A of the Act and not on the date of the allotment.
Further, according to the High Court, what is "permissible area" available to a landlord under the Act has allow to be determined as obtaining on the date of the application for eviction made by the landlord.
In coming to the conclusion the High Court followed a judgment of section B. Capoor J., in a similar matter.
In order to appreciate the contentions urged before us on behalf of the par ties, it is necessary to refer to certain provisions of the Act.
At the outset I must point out that the object of the Act was to provide to the tenants a security against ejectment by the landlords except for a just cause.
The Act has, however, drawn a distinction between "small land owner" and a "large land owner".
Sub section (2) of section 2 of the Act defines small land.
owner to mean one whose entire land in the State of Punjab does not exceed the permissible area.
Now, sub section
(3) of section 2 defines permissible area.
This definition draws a distinction between a land owner who is not a displaced person and one who, is a displaced person.
In so far as the former is concerned the permissible area is 30 standard acres.
In so far as the latter is concerned the second proviso to sub section
(3) enacts "Provided that (ii) for a displaced person (a) who has allotted land in excess of fifty standard acres, the permissible area shall be fifty standard ip.
Cl/66 3 518 acres or one hundred ordinary acres, as the case may be.
(b) who has been allotted land in excess of thirty standard acres, but less than fifty standard acres, the permissible area shall be equal to his allotted area.
(c) who has been allotted land less than thirty standard acres, the permissible area shall be thirty standard acres, including any other land or part thereof, if any, that he owns in addition.
Explanation : For the purposes of determining the permissible area of a displaced person, the provisions of proviso (ii) shall not apply to the heirs and successors of the displaced person to whom land is allotted.
" The expression 'standard acre ' is defined thus in sub section
(5) of section 2 "Standard acre" means a measure of area convertible into ordinary acres of any class of land according to the prescribed scale with reference to the quantity of yield and quality of soil.
" If a land owner is in possession of land in excess of the permissible area he is required to follow a certain procedure for indicating which particular land he wants to be treated as "reserved area".
Land in excess of that area is treated surplus area.
The former expression means the area lawfully reserved under the Punjab Tenants (Security of Tenures) Act, 1950 while the latter expression is defined in sub section
(5 A) of the Act.
It is not necessary to set out this definition for the purpose of the discussion of the question before us.
Under section 27 of the Act rules have been framed for carrying out the purpose of the Act.
There are two sets of rules, one is the Security of Land Tenures Rules, 1953 and the other is Punjab Security of Land Tenures Rules, 1956.
The latter are supplementary to the rules of 1953.
Rule 2 of the Rules of 1953, which is the relevant rule, is as follows : "Conversion of ordinary acres into standard acres.
The equivalent, in standard acres, of one ordinary acre of any class of land in any assessment circle, shall be determined by dividing by 16, the valuation shown in Annexure 'A ' to these rules for such class of land in the said assessment circle 519 Provided that the valuation shall be (a) in the case of Banjar Qadim land, one half of the value of the class previously described in the records and in the absence of any specific class being stated, one half of the value of the lowest barani land; (b) in the case of Banjar Jadid land, seventh eighth of the value of the revelant class of land as previously entered in the records, or in the absence of specified class in the records, of the lowest barani land; and (c) in the case of cultivated that land subject to waterlogging, one eighth of the value of the class of land shown in the records or in the absence of any class, of the lowest barani land".
In the table, Annexure A, land is classified under four heads which are: "Irrigated (nehri)", "Irrigated Chahi" "Irrigated" and "Sailab".
Irrigated nehri is further classified as "perennial" and "non perennial".
In Col. 3 is given the valuation for irrigated nehri land.
For Hansi tehsil valuation of the land which is perennially irrigated by canals is given as 16 which means 16 annasing the rupee per acre and of non perennial as 10 annas in the rupee per acre.
The valuation for irrigated chahi land in the entire tehsil is 10 annas in the rupee per acre and of un irrigated land as 5 annas in the rupee per acre.
There is no valuation for sailab land which apparently means there is no land of this category in the tehsil.
From Table, A it would appear that land which falls under one classification at the time of allotment or at the time of coming into force of the Act may well fall under some other head later on because the quantity of yield is liable to vary.
For instance, if irrigation facilities come to be provided in land which is unirrigated at the time of coming into force of the Act or making the allotment the land may receive the benefit of irrigation later either perennially or non perennially and its yield therefrom may accordingly increase.
Provisions relating to the valuation of lands under the Act are to be found in section 19F thereof which reads thus : "For the removal of doubts it is hereby declared, (a) that the State Government or any officer empowered in this behalf shall be competent and 520 shall be deemed always to have been competent, to determine in the prescribed manner the sur plus area referred to in section 10 A of a landowner out of the lands owned by such land owner immediately before the commencement of this Act; and (b) that for evaluating the land of any person at any time under this Act, the land owned by him immediately before the commencement of this Act, or the land acquired by him after such commencement by inheritance or by bequest or gift from a person to whom he is an heir, shall always be evaluated for converting into standard acres as if the evaluation was being made on the date of such commencement and that the land acquired by him after such commencement in any other manner shall always be evaluated for converting into standard acres as if the evaluation was being made on the date of such acquisition.
" Now, surplus area would fall to be determined only where the land owner is in possession of land in excess of the permissible area.
I have already given the definition of permissible area.
Where, as here, the landlord is a displaced person and the land allotted to him is less than 50 acres the permissible area so far as he is concerned would be the area actually allotted to him.
In the case of the appellant it would thus be 42 standard acres and II units.
Out of this he alleges that he has sold 18 standard acres.
As, however, no argument was advanced before us on this basis I leave this circumstance out of account and proceed on the footing that the appellant is in possession not of an area less than the permissible.
area but of an area equal to the permissible area.
Surplus area means an area other than the reserved area and, where no area is reserved, the area in excess of the permissible area.
Where there is no reserved area or where the area hold by a person is not in excess of the permissible area the provisions of section 4 which deal with, the reservation of area or those of sections 5 A to 5C which deal with selection of permissible area or those of section 10 A which deal with the utilization of surplus area are not attracted.
Therefore, the provisions of section 19F(a) which are attracted to a case falling under section 10 A will a so not apply.
Moreover the provisions of section 10 A have no bearing on 521 a case like the one before us.
For, they contemplate the ascertainment of surplus area held immediately before the commencement of the Act.
Obviously, therefore, the determination must refer to the classification of the land at that time.
Apart from that, the appellant does not possess any surplus area since what is in his possession is merely the permissible area.
The question of utilization of any surplus area cannot thus arise in his case.
That being so, no question can arise of evaluating his lands afresh.
Indeed, fresh evaluation at any time is permissible only under section 19 F(b), but that provision deals with only special types of cases.
It may be mentioned that sections 5 A to 5 C which deal with the selection of permissible area do not contemplate a case where the classification of land held by the landlord has undergone a change because of rise in the yield therefrom and the standard acreage of the land in his possession could be said to have increased.
Section 19 A of the Act specifically prohibits the future acquisition by the landlord of land by transfer, exchange, lease., agreement or settlement any land which with or without the land already held by him exceeds the permissible area.
Similarly the Act has made specific provisions to deal with a case of augmen tation to the land held by the landlord subsequent to the commencement of the Act by inheritance, bequest or gift.
These are to be found in section 19 B.
What is to be done in a case of that type is provided for by section 19 F(b).
The power to evaluate land conferred by this provision is exerciseable at 'any time ' but obviously that power is exerciseable only in the context of the circumstances set out therein, that is to say where the landlord obtains land after the commencement of the Act by inheritance, bequestor gift and in no other circumstance.
It would, therefore, seem that where the provisions of section 19F are not attracted the Revenue Assistant before whom an application under section 14 A for ejectment of a tenant is made by a landlord, is not entitled to evaluate the land of the landlord afresh for ascertaining whether he is in possession of land in excess of the permissible area.
Elaborate rules have been framed under the Act and elaborate provisions are also contained in the Act with a view to extend its protection as far as possible to tenants cultivating land.
The omission, therefore, to make any provision as to what has to be done, if as a result of improvements made by the landlord or by reason of the rise in the yield of the land through other causes would point only to one conclusion and that is that this circumstance is not to be taken into account for evaluating the land afresh and re calculating the standard acreage.
If that is so, then it would follow that the High Court and the Assistant Commissioner were in error whereas 522 the Collector, Commissioner and the Financial Commissioner were right in deciding this case.
For these reasons I set aside the order of the High Court and restore that of the Financial Commissioner upholding the orders of the Commissioner and the Collector.
In the particular circumstances of the case 1, however, direct that costs throughout will be borne by the parties as incurred.
Appeal allowed.

summary:
The appellant was a displaced person from West Pakistan.
In 1949 he was allotted 42 standard acres and 11 units of land which were later consolidated.
In 1958 claiming to be a small holder he made an application under section 14 A(1) of the Punjab Security of Land Tenures Act 1953 before the Assistant Collector for the ejectment of respondent No. 4 who was a tenant of the land.
The Assistant Collector rejected application on the ground that because of improvements the income from the lands had risen considerably and consequently the land had become equivalent to more than 50 standard acres, and therefore the applica tion was untenable under section 14 A.
In appeal the Collector held that since the appellant was allotted only 42 standard acres and 11 units he was entitled to be treated as a small land holder.
The Collector 's order was upheld by the Commissioner and by the Financial Commissioner.
The tenant thereupon filed a writ petition before the High Court.
According to the High Court the status of a landlord had to be ascertained as existing on the date of the application under section 14 A of the Act and not on the date of the allotment.
Farther according to the High Court what is 'permissible area ' available to a landlord under the Act had also to be determined as obtaining on the date of the application for eviction made by the landlord.
On this view the High Court allowed the tenant 's writ petition.
In appeal by special leave to this Court, HELD: Under the provisions of the Act the entire land held by the landowner in the State of Punjab on the date of the commencement of the Act must be evaluated as on that date and the status of the landowner and his surplus area must then be ascertained.
If he is then found to be 'a small landowner, he continues to be so for the purpose of the Act, until he acquires more land and on taking into account the value of the land in terms of standard acres on the date of the acquisition, he is found to be a big landowner.
The landowner is required to make the necessary reservations or selections and to give the necessary declarations so that his status and the surplus area, if any, held by him may be so determined.
If he is a small landowner at the commencement of the Act, his status is not altered by reason of improvements in the value of his land or re allotment of land on compulsory consolidation of holdings.
section 19 F(b) which was introduced into the Act during the pendency of the appeal clarified the position to the same effect.
[514 B D; 515 F] The appellant did not acquire any land after the commencement of the Act.
His status as a small landowner was not altered by reason of subsequent improvements or re allotments of land on compulsory consolidation of holdings.
On the date of the application, he therefore continued to be a small landowner.
The High Court was in error in holding that the status of the appellant should be determined by evaluating his 5 12 land in terms of standard acres on the dates of the application for eviction.
[515 H; 516 A B] Per Mudholkar J : Provisions relating to the valuation of lands under the Act are to be found in section 19 F(a) and 19F(b).
The former did not apply to the present case as it applies only to the ascertainment of ,surplus area ' held by a landowner at the commencement of the Act; the appellant held only 'permissible area ' and no 'surplus are at all.
Under section 19 F(b) fresh evaluation of land can take place "at any time" but the power under that section is exercisable only in the context of special circumstances, that is to say, where the landlord owns land after the commencement of the Act by inheritance, bequest or gift.
These special circumstances did not exist in the present case.
[519 H; 520 H; 521 B, D] When the provisions of section 19F are thus not attracted, the Revenue Assistant before whom an application under section 14 A for ejectment of a tenant is made by a landlord, is not entitled to evaluate the land of the landlord afresh for ascertaining whether he is in possession of land in excess of the permissible area.
[521 F] Elaborate rules have been framed under the Act and elaborate provisions are also contained in the Act with a view to extend its protection as far as possible to tenants cultivating land.
The omission, therefore, to make any provision as to what has to be done, if as a result of improvements made by the landlord or by reason of the rise in the yield of the land through other causes would point only to one conclusion and that is that this circumstance is not to be taken into account for evaluating the land afresh and recalculating the standard acreage.
[521 G H] It would follow that the High Court was in error and its order must be set aside.