judgement:
Appeal No. 1705 of1969.
Appeal by special leave from the order dated February 21, 1959, of the Central Government Labour Court, Delhi in I.C.A. No. 2 of 1968 and Civil Appeal No. 1781 of 1969.
Appeal by special leave from the order dated February 24, 1969 of the Additional Industrial Tribunal, Delhi in I.D. No. 73 of 1968 and Appeal from the judgment and order dated February 21, 1969 of the Patna High Court in Civil Writ Jurisdiction Case No. 730 of 1968.
Niren De, Attorney General and section P. Nayar, for the appellant (in C. A. No. 1705 of 1969).
M. K. Ramamurthi, E. C. Agarwala, R. P. Agarwala and M. V. Goswami, for the respondent (in C. A. No. 1705 of 1969).
H. R. Gokhale, Jitendra Mahajan, for the appellant (in C.A. No. 1781 of 1969).
M. K. Ramamurthi, J. Ramamurthy and Madan Mohan, for the respondents (in C. A. No. 1781 of 1969).
H. R. Gokhale, M. C. Bhandare, for the intervener.
180 A. K. Sen, Ranen Roy and A. K. Nag, for theappellant (in C. A. No. 1777 of, 1969).
D. Goburdhun, for respondent No. 1 (in C. A. No. 1777 of 1969).
P. N. Tiwari and Shiva Pujan Singh, for respondent No. 3 (in C. A. No. 1777 of 1969).
The Judgment of the Court was delivered by Hidayatullah, C.J.
This judgment will dispose of Civil Appeals Nos. 1705 of 1969, 1781 of 1969 and 1777 of 1969.
The first is an appeal by the Management of Safdarjung Hospital, New Delhi.
The second by the Management of Tuber culosis Hospital, New Delhi and the third by the Kurji Holy Family Hospital, Patna.
The first two are filed by special leave and the third by certificate.
They call in question respectively the order of the Central Government Labour Court, Delhi dated 21st February, 1969 on an application under section 33C(2) of the Industrial Disputes Act, 1949, the order of the Presiding Officer, Additional Industrial Tribunal, Delhi dated 24th February, 1969 and the judgment and order dated 21st February, 1969 of the Patna High Court.
They raise a common question of law whether these several hospitals can be regarded as industries within the meaning of the term in the Industrial Disputes Act.
They also raise different questions on merits which will be considered separately.
The facts of the three cases may be noticed briefly before we begin to examine the common question of law mentioned above.
C.A. Nc. 1705 of 1969.
The Management of Safdarjung Hospital, New Delhi was the respondent in a petition under section 33C(2) of the in a petition by the present respondent Kuldip Singh Sethi, a Lower Division Clerk in the Hospital, for computation of the amount of salary etc.
due to him in the pay scale of store keepers.
Kuldip Singh Sethi was appointed as a Store keeper on October 26, 1956 in the pay scale of Rs. 60 5 75.
This scale was revised to Rs. 110 180 on July 1, 1959 in accordance with the ,recommendations of the Second Pay Commission.
Two or three months later the pay was re fixed and the time scale was Rs. 110 131 with usual allowances.
On July 1, 1962 his basic pay was fixed at Rs. 131.
On November 26, 1962 the Government of India in the Ministry of Health re revised the pay scales of Store keepers to Rs. 130 5 160 8 200 EB 8 280 10 300 with the usual allowances.
The order was to lake effect from the date of issue.
Kuldip Singh Sethi complained by his petition that the Management of the Hospital had failed to give him pay in this scale and claimed Rs. 914 for the period November 26, 1,962 to May 31, 1968.
181 In rely to his petition the Management contended that Kuldip p Singh Sethi was not a workman but a Government servant governed by the Conditions of Service for Government Servants and hence he could not invoke the since the Safdarjung Hospital was not an industry.
The Tribunal following the decision of this Court in State of Bombay vs Hospital Mazdoor Sabha(1) has held that the Hospital is an 'industry ', that Kuldip Singh Sethi is a 'workman ' and hence he is entitled to take recourse to section 3 3C (2) of the .
On merits his claim is found sustainable and he is given an award for Rs. 914.
We need not mention at this stage the grounds on which the merits of his claim are resisted.
The point of law that arises in the case is whether the Safdarjung Hospital can be properly described as an 'industry ' as defined in the .
C.A. No. 1781 of 1969.
In this case there is a dispute between the Management of the Tuberculosis Hospital, New Delhi and its workmen represented by the Aspatal Karamchari Panchayat regarding pay scales, and other facilities demanded by the workmen.
The Management has taken the preliminary objection that the does not apply since the Hospital is not an industry and is not run as such.
The Management.
, therefore, questions the reference to the Tribunal under section 10(1) (d) of the .
A preliminary issue is raised : "Is T.B. Hospital an industry or not?" In support of the case that the Hospital is not an industry, the Management emphasises the functions of the Hospital.
It is pointed out that the Hospital is run by the Tuberculosis Association of India as a research institute where training is given to Medical ,,graduates of the Delhi University for the D.T.C.D. and D.C.H. Courses, and postgraduates and undergraduates of the All India Institute of Medical Sciences are also provided training and nurses from the Delhi College of Nursing, Safdarjung, Lady Hardinge, and Holy Family Hospitals receive training.
The Hospital, it is admitted, has paid and unpaid beds but it is submitted that treatment of tuberculosis is a part of research and training and education, and, therefore, the Hospital has affinity to a University and, not to a Hospital proper.
It is, therefore, contended that this ,Hospital is not an industry.
The Tribunal holds that neither the research carried on, nor the training imparted, nor the existence .of the Tuberculosis Association of India with which the Hospital is affiliated makes any difference and the case falls within the ruling of this Court in the Hospital Mazdoor Sabha(1) case.
The (1) ; 182 Tribunal holds the Tuberculosis Hospital, New Delhi to be an industry.
C.A. No. 1777 of 1969.
The appeal arises from a writ petition filed in the High Court of Patna.
The Kurji Holy Family Hospital took disciplinary action against two of its employees and the matter was taken up by the Kurji Holy Family Hospital Employees Association and the State of Bihar made a reference to the Labour Court, Patna under section 10 of the .
Before the Tribunal, the Management of the Hospital took the objection inter alia that a hospital was neither a trade nor a business, nor an industry as defined in the and as such the provisions of the were not applicable and the reference was incompetent.
The High Court holds this point against the Management, following the Hospital Mazdoor Sabha(1) case.
The later case of this Court reported in Secretary, Madras Gymkhana Club Employees Union vs Management of the Gymkhana Club(2) is held not to have weakened the effect of the decision in the case relied upon.
It is thus that the three cases came before us and were heard together.
Counsel in these cases submit that the ruling in the HospitalMazdoor Sabha(1) case has now been considerably shaken by the pronouncement in the Madras Gymkhana Club (2) case where it was I observed that the Hospital Mazdoor Sabha( ') case was one which might be said to be on the verge and that there were reasons to think that it took an extreme view of an industry.
Relying on this observation, counsel in the three appeals asked for a reconsideration of the Hospital Mazdoor Sabha(1) case although they conceded that it was not yet overruled.
We accordingly heard arguments on the general question whether a hospital can be said to be an industry falling within the and under what circumstances.
We also heard arguments on the merits of the appeals to determine whether the decisions rendered therein could be upheld even if the Hospital Mazdoor Sabha(1) case was held applicable.
We shall follow the same course here.
We shall first consider the general proposition whether a hospital can be considered to fall within the concept of industry in the and whether all hospitals of whatever description can be covered by the concept or only some hospitals under special conditions.
We shall then consider the merits of the individual cases in so far as may be necessary.
The was construed in the past on more than one occasion by this Court.
A fairly comprehensive summary of the various cases with the rationes decidendi of those (1) ; (2) [1968] 1 S.C.R. 742.
183 cases is to be found in the Gymkhana Club(1) case.
, The tests applied to find out whether a particular establishment falls within the definition of 'industry ' or not were not found to be uniform and disclosed a pragmatic approach to the problem.
This Court, ,therefore, in Gymkhana Club(1) case fell back upon the statute for guidance pointing out that they were not concerned with a popular phrase but one which the statute, had with 'great particularity defined itself.
Examining the content of the definitions this Court came to certain conclusions and held in their light that a non proprietary members ' club was not an industry.
The reasoning in the Gymkhana Club(1) case formed the basis of an attack on the former ruling in the, Hospital Mazdoor Sabha(2) case by the Managements of the three Hospitals which are appellants here.
The other side relied.
upon the ruling and the amendment of the by which 'Service in hospitals and dispensaries ' has now been added as item No. 9 in the First Schedule, as one of the industries which may be declared to be public utility services under sub cl .
(vi) of cl.
(n) of section 2 of the Act.
It is claimed that this is a legislative determination of the question whether hospital is an industry or not.
It has, therefore, become necessary to cover some of the ground covered,in the Gymkhana Club(1) case.
To begin with we may once again refer to the relevant definitions contained in the Act for they must necessarily control our discussion.
The , as its title and indeed its whole tenor disclose, was passed to make provision for the investigation and settlement of industrial disputes and for certain other purposes appearing in the Act.
The term 'industrial dispute ' is defined by section 2(k) in the following words " 'industrial dispute ' means any dispute or difference between employers and employers or between employers and workmen, or between workmen and workmen, which is connected with the employment or non employment or the terms of employment or with the conditions of labour, of any person.
" The definition discloses that disputes of particular kinds alone are regarded as industrial disputes.
It may be noticed that this definition does not refer to an industry.
But the dispute, on the grammar of the expression itself, means a dispute in an industry and we must, therefore, turn to the definition of 'industry ' in the Act.
The word is defined in cl.
(j) and reads : " 'industry ' means any business, trade, undertaking, manufacture or calling of employers and includes any (1) [1968] 1 S.C.R. 742.
(2) ; 184 calling, services, employment, handicraft, or industrial occupation or avocation of workman.
" This definition is in two parts.
The first part says that it means any business, trade, undertaking, manufacture or calling of ,employers and then goes on to say that it includes any calling, service, employment handicraft or industrial occupation or avocation of workmen.
In dealing with this definition this Court in the Gymkhana ,Club case(1) attempted to keep the two notions concerning employers and employees apart and gave the opinion that the denotation of the term 'industry ' is to be found in the first part relating to ,employers and the full connotation of the term is intended to include the second part relating to workmen.
It was, therefore, concluded: "If the activity can be described as an industry with reference to the occupation of the employers, the ambit of the industry, under the force of the second part, takes in the different kinds of activity of the employees mentioned in the second part, But the second part standing alone cannot define 'industry. .
By the inclusive part of the definition the labour force employed in an industry is made an integral part of the industry for purposes of industrial disputes although industry is ordinarily something which employers create or undertake." These observations need to be somewhat qualified.
It is to be noticed that this definition modifies somewhat the definition, of "industry ' in section 4 of the Commonwealth Conciliation and Arbitration Act 1909 1970) (Acts Nos. 13 of 1904 and 7 of 1910) of Australia where the definition reads " 'industry ' means business, trade, manufacture, undertaking, calling, service or employment, on land or water, in which persons are employed for pay, hire, advantage or reward, excepting only persons engaged in agricultural, viticultural, horticultural, or dairying pursuits.
" Although the two definitions are worded differently the purport of both is the same.
It is not necessary to view our definition in two parts.
The definition read as a whole denotes a collective enterprise in which employers and employees are associated.
It does not exist either by employers alone or by employees alone.
It exists only when there is a relationship between employers and employees, the former engaged in business, trade, undertaking, manufacture or calling of employers and the latter engaged in any calling, service, (1) [1968] 1 S.C.R. 742.
185 employment, handicraft or industrial occupation or avocation.
There must, therefore, be an enterprise in which the employers follow their avocations as detailed in the definition and employ workmen who follow one of 'the avocations detailed for workmen.
The definition no doubt seeks to define 'industry ' with reference to employers ' occupation but includes the employees, for without the two there can be no industry.
An industry is only to be found when there are employers and employees, the former relying upon the services of the latter to fulfil their own occupations.
But every case of employment is not necessarily productive of an industry.
Domestic employment, administrative services of public officials, service in aid of occupations of professional men, also disclose relationship of employers and employees but they cannot be regarded as in the course of industry.
This follows from the definition of 'workman ' in the Act defined in cl.(s) which reads "workman ' means any person (including an ap prentice) employed in any industry to do any skilled or unskilled manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceed ing under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a conse quence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person (i) who is subject to the , or the or the Navy (Discipline) Act, 1934; or (ii) who is employed in the police service, or as an officer or other employee of a prison; or (iii) who is employed mainly in a managerial or administrative capacity; or (iv)who, being employed in a supervisory capacity,draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.
" The word 'industry ' in this definition must take its colour from the definition and discloses that a workman is to be regarded as one employed in an industry if he is following one of the vocations mentioned in conjunction with his employers engaged in the vocations mentioned in relation to the employers.
Cl/70 13 186 Therefore an industry is to be found when the employers are carrying on any business, trade, undertaking, manufacture or calling of employers.
If they are not, there is no industry as such.
What is meant by these expressions was discussed in a large number of cases which have been considered elaborately in the Gymkhana Club(1) case.
The conclusion in that case may be stated : "Primarily, therefore, industrial disputes occur when the operation undertaken rests upon cooperation between employers and employees with a view to production and distribution of material goods, in other words, wealth, but they may arise also in cases where the co operation is to produce material services.
The normal cases are those in which the production or distribution is of material goods or wealth and they will fall within the expressions trade, business and manufacture.
" The words 'trade ', 'business ', 'manufacture ' and 'calling ' were next explained thus : "The word 'trade ' in this context bears the X X meaning which may be taken from Halsbury 's Laws of England, Third Edn.
38 p. 8 (a) exchange of goods for goods or goods for money; (b) any business carried on with a view to profit, whether manual, or mercantile, as distinguished from the liberal arts or learned professions and from agriculture; and business means an enterprise which is an occupation as distinguished from pleasure.
Manufacture is a kind of productive industry in which the making of articles or material (often on a large scale) is by physical labour or mechanical power.
Calling denotes the following of a profession or trade.
" It may be added here that in National Association of Local Government Officers vs Bolton Corporations(2) at page 183 et seq Lord Wright observes that 'trade ' is a term of the widest scope.
This is true.
We speak of the occupation of men in buying and selling, barter or commerce as trade.
We even speak of work, especially of skilled work as, trade, e.g. the trade of goldsmiths.
But the word as used in the statute must be distinguished from professions although even professions have 'trade unions '.
The word 'trade ' includes persons in a line of business in which persons are employed as workmen.
Business too is a word of wide import.
In one sense it includes all occupations and professions.
But in the collocation of the terms.
and their definitions these terms have a definite economic content of a particular type and on the (1) [1968] 1 S.C.R. 742.
(2) , 183.
187 authorities of this Court have been uniformly accepted as excluding professions and are only concerned with the production, distribution and consumption of wealth and the production and availability of material services.
Industry has thus been accepted to mean only trade and business, manufacture, or undertaking analogous to trade or business for the production of material goods or wealth and material services.
Why professions must be held outside the ambit of industry may be explained.
A profession ordinarily is an occupation requiring intellectual skill, often coupled with manual skill.
Thus a teacher uses purely intellectual skill while a painter uses both.
In any event, they are not engaged in an occupation in which employers and employees co operate in the production or sale of commodities or arrangement for their production or sale or distribution and their services cannot be described as material services.
What is meant by 'material services ' needs some explanation too.
Material services are not services which depend wholly or largely upon the contribution of professional knowledge, skill or dexterity for the production of a result.
Such services being given individually and by individuals are services no doubt but not material services.
Even an establishment where many such operate cannot be said to convert their professional services into material services.
Material services involve an activity carried on through co operation between employers and employees to provide the community with the use of something such as electric power, water, transportation, mail delivery, telephones and the like.
In providing these services there may be employment of trained men and even professional men, but the emphasis is not on what these men do but upon the productivity of a service organised as an industry and commercially valuable.
Thus the services of professional men involving benefit to individuals according to their needs, such as doctors, teachers, lawyers, solicitors etc. are easily distinguishable from an activity such as transport service.
The latter is of a commercial character in which something is brought into existence quite apart from the benefit to particular individuals.
It is the production of this something which is described as the production of material services.
Mr. Ramamurti arguing against the Hospitals drew our atten tion to Citrine 's book 'Trade Union Law ' (3rd edn.
p. 609) where the author observes : "However, whilst the words 'trade ' and 'industry ' are separately capable of a wide interpretation, when they occur in conjunction the tendency of the courts is to give them a narrow one.
" 188 He cites the House of Lords case to which we have referred and criticises the tendency of the court to narrow the meaning of the expressions 'industry ' and 'workman '.
He says that this narrow interpretation unnecessarily excludes from workmen 'teachers employed by local authorities, university employees, nurses and others employed under the National Health Service, the domestic staff of the Houses of Parliament and Civil Servants who are not employed in 'trading ' or 'industrial undertaking '.
He includes all these in the definitions because a person doing the same type of work for a commercial undertaking is within the definition.
According to him any person gainfully employed must be within the definition.
On the strength of this definition Mr. Ramamurthi also contends that not the Hospital Mazdoor Sabha(1) case but the earlier cases off this Court such as University of Delhi and Anr.
vs Ramnath(2) and National Union of Commercial Employees vs M. R. Meher(3) must be reconsidered and overruled.
The reason for these cases, as also the Gymkhana Club(4) case lies in the kind of establishment with which we are concerned.
The Gymkhana Club(4) case of this Court (followed and applied in Cricket Club vs Labour Union(5) has held that non profit making members ' clubs are not employed in trade or industry and their employees are not entitled to engage in trade disputes with the clubs.
This view finds support from Hotel and Catering Industry 'Training Board and Automobile Proprietary Ltd (6).
The Solicitors case cited by Mr. Ramamurti was so decided because there the services rendered by the employees were in aid of professional men and not productive of material goods or wealth or material services.
The other case of University was also decided, as it was, for the same reason.
It, therefore, follows that before an industrial dispute can be raised between employers and their employees or between employers and employers or between employees and employees in relation to the employment or non employment or the terms of employment or with the conditions of labour of any person, there must be first established a relationship of employers and employees associating together, the former following a trade, business, manufacture, undertaking or calling of employers in the production of material goods and material services and the latter following any calling, service, employment, handicraft, or industrial occupation or avocation of workmen in aid of the employers ' enterprise.
It is not necessary that there must be a profit motive but the enterprise must be analogous to trade or business in a commercial sense.
(1) ; (2) ; (3) [1962] Supp.
3 S.C.R. 157.
(4) [1968] 1 S.C.R. 742.
(5) A.I.R. (6) H.L. S.C.; and C.A. 189 We do not find it necessary to refer to the earlier cases of this Court from which these propositions have been deduced because they are all considered in the Gymkhana Club case(1).
We accept the conclusion in that case that : ". . before the work engaged in can be described as an industry, it must bear the definite character of 'trade. ' or 'business ' or 'manufacture ' or 'calling ' or must be capable of being described as an undertaking resulting in material goods or material services.
" We may now consider closely the Hospital Mazdoor Sabha(2) case and the reasons for which it was held that the workmen employed in a hospital were entitled to raise an industrial dispute.
We may say at once that if a hospital, nursing home or dispensary is run as a business in a commercial way there may be found elements of an industry there.
Then the hospital is more than a place where persons can get treated for their ailment.
It becomes a business.
In the Hospital Mazdoor Sabha(2) case, hospitals run by Gov ernment and even by a private association, not on commercial lines but on charitable lines or as part of the functions of Government Department of Health were held included in the definition of industry.
The reason given was that the second part of the definition of industry contained an extension of the first part by including other items of industry.
As we have pointed out the first and the second parts of the definition are not to be read in isolation as if they were different industries but only as aspects of the occupation of employers and employees in an industry.
They are two counterparts in one industry.
The case proceeds on the assumption that there need not be an economic activity since employment of capital and profit motive were considered unessential.
It is an erroneous assumption that an economic activity must be related to capital and profit making alone.
An economic activity can exist without the presence of both.
Having rejected the true test applied in other cases before, the test applied was 'can such activity be carried on by private individuals or group of indivi duals '? Holding that a hospital could be run as a business proposition and for profit, it was held that a hospital run by Government without profit must bear the same character.
With respect, we do not consider this to be the right test.
That test was employed to distinguish between the administrative functions of Government and local authorities and their functions analogous to business but it cannot be used in this context.
When it was emphasised in the same case that the activity must be analogous to business and trade and that it must be productive of goods or their distribution or for producing material services to the community at large (1) [1968] 1 S.C.R. 742.
(2) ; 190 or a part of it, there was no room for the other proposition that privately run hospitals may in certain circumstances be regarded as industries.
The expression 'satisfying material human needs ' was evolved which bore a different meaning.
These observations were apparently based on the observations of, Isaacs and Rich JJ.
in Federated Municipal and Shire Council Employees of Australia vs Melbourne Corporation(1), but they were : "Industrial disputes occur when, in relation to operations in which capital and labour are contributed in cooperation for the satisfaction of human wants and desires, those engaged in co operation dispute as to the basis to be observed, by the parties engaged, respecting either a share of the produce or any other terms and conditions of their co operation.
The question of profit making may be important from an income tax point of view, as in many municipal cases in England; but, from an industrial dispute point of view it cannot matter whether the expenditure is met by fares from passengers or from rates.
" The observations in the Australian case only indicate that in those activities in which government takes to industrial ventures, the notion of profit making and the absence of capital in the true sense of the word are irrelevant.
The passage itself shows that industrial disputes occur in operation in which employers and employees associate to provide what people want and desire in other words where there is production of material goods or material services.
In our judgment the Hospital Mazdoor Sabha (2) case took an extreme view of the matter which was not justified.
It is argued that after the amendment of the Industrial Dis putes Act by which 'service in hospitals and dispensaries ' is included in public utility services, there is no scope for saying that hospitals are not industries.
It is said that Parliament has accepted that the definition is suited to include a hospital.
This contention requires close attention in view of the fact that it was noticed in the Hospital Mazdoor Sabha(2) case although that arose before the amendment.
A public utility service is defined in the Act by merely naming certain services.
It will be noticed that these services are (i) any railway service or any transport service for the 'Carriage of passengers or goods by air; (1) ; (2) ; 191 (ii) any section of any industrial establishment on the working of which the safety of the establishment or the workmen employed therein depends; (iii) any postal, telegraph or telephone service; (iv) any industry which supplies power, light or water to the public; (v) any system of public conservancy or sanitation; After namingthese services the definition adds : (vi) any industry specified in the First Schedule which the appropriate Government may, if satisfied that public emergency or public interest so requires, by notification in the official gazette, declare to be a public uti lity service for the purposes of this Act, for such period as may be specified in the notification.
Provided that the period so specified shall not, in the first instance, exceed six months but may, by a like notification, be exceeded from time to time, by any period not exceeding six months, at any one time if in the opinion of the appropriate Government public emergency or public interest requires such extension.
The intention behind this provision is obviously to cassify certain services as public utility services with special protection for the continuance of those services.
The named services in the definition answer the test of an industry run on commercial lines to produce something which the community can use.
These are brought into existence in a commercial way and are analogous to business in which material goods are produced and distributed for consumption.
When Parliament added the sixth clause under which other services could be brought within the protection afforded by the Act to public utility services, it did not intend that the entire concept of industry in the Act, could be ignored and anything brought in.
Therefore it said that an industry could be declared to be a public utility service.
But what could be so declared had to be an industry in the first place.
We are concerned with the addition of item 9 'service in hospitals and dispensaries.
The heading of, the First Schedule speaks again of industries which may be de clared to be public utility services.
The original entries were five and they read: 1.
Transport (other than railways) for the carriage of passengers or goods, by land, water or air (now air is omitted).
Coal 192 3.
Cotton textiles.
Food stuffs 5.
Iron and steel.
It is obvious that general headings are given here.
Coal is not an industry but certain aspects of dealing with coal is an industry and that is what is intended.
That dealing must be in an industry in which there are employers and employees cooperating in the production of material goods or material services.
Similarly, cotton, textiles or food stuffs or iron and steel, as the entries stand, are not industries.
Therefore the heading of the First Schedule and the words of clause (vi) presuppose the existence of an industry which may be notified as a public utility service, for special protection under the Act.
Therefore when the list was expanded in the First Schedule and certain services were mentioned, the intention could not be otherwise.
The list was extended to 10 items by amendment of the Act by Act 36 of 1956 with effect from March 10, 1957.
The new items are (a) Banking, (b) Cement, (c) Defence Establishments, (d) Service in hospitals and dispensaries, and, (e) Fire Brigade Service.
Later by notifications issued under section 40 of the Act nine more items were added.
Section 40 gives to governments the power to add to the Schedule.
They are (a) Indian Government Mints, (b) India Security Press, (c) Copper Mining, (d) Lead Mining, (e) Zinc Mining, (f) Iron ore mining, (g) Service in any oil field, (h) Any service in, or in connection with, the working of any major port or dock and (i) Service in the Uranium Industry.
It is easy to see that most of them are items in which an industry proper involving trade, business, manufacture or something analogous to business can be found.
It is hardly to be thought that notifications can issue in respect of enterprises which are not industries to start with.
It is only industries which may be declared to be public utility services.
Therefore to apply the notification, the condition precedent of the existence of an industry has to be satisfied.
If there is an industry which falls within the items named in the First Schedule, then alone can it be notified to be classed as a public utility service.
The law does not work the other way round that every activity connected with coal becomes an industry and therefore on notification that activity becomes a public utility service.
The same is true of all items including all the services mentioned.
They must first be demonstrated to be industries and then the notification will apply, to them.
To hold otherwise would largely render useless all the definitions in the Act regarding industry, industrial disputes etc., in relation to the scheduled items.
Parliament has not attempted to declare that notwithstanding the definitions of 193 'industry ', 'industrial disputes, 'workman ' and 'employer ', every hospital is to be regarded as an industry.
All that has been provided is that an 'industry ' may be notified as a public utility service.
That is insufficient to convert non industries under the Act to industries.
We now take up the individual cases.
C.A. No. 1705 of 1969.
It is obvious that Safdarjung Hospital is not embarked on an economic activity which can be said to be analogous to trade or business.
There is no evidence that it is more than a place were persons can get treated.
This is a part of the functions of Government and the Hospital is run as a Department of Government.
It cannot, therefore, be said to be an industry.
In this case the petitioner chose to be a Lower Division Clerk.
The amount of security which he had to furnish in the job of a Store keeper was also refunded to him.
He had applied for the post on May 31, 1962.
On July 14, 1962 he again drew attention to his application.
His application was recommended on August 9, 1962.
It was only after November 26, 1962 when the scale of Store keepers was raised to Rs. 130 300 that he changed his views.
On December 12, 1962 he made a representation but in forwarding it the Medical Superintendent said that the incumbents of the posts of Store keepers could not be given the upgraded scale of Rs. 130 300.
In addition there were certain matters pending against him which precluded his appointment in that scale.
On August 11, 1966 the Director General wrote: "With reference to your letter No. 1 20/62 Estt., dated the 4th Jan, 1966 and subsequent reminder of even number dated the 24th May, 1966 on the subject noted above, I am directed to say that a reference was made to the Government of India in the Ministry of Health and Family Planning, New Delhi who have stated that it was not intended that the revised scale of Rs. 110 131 (previous scale of Rs. 60 75) should be further revised to Rs. 130 300 as all incumbents of the posts carrying the pay scale of Rs. 110 131 were promoted from Class IV and did not possess the requisite qualifications prescribed for posts, carrying pay scale of Rs. 130 300.
In view of the position stated above further action in the matter may kindly be taken in the light of the above remarks and storekeepers concerned informed accordingly.
In view of these facts it is hardly necessary to refer to the reports about the work of Kuldip Singh Sethi and other matters which 194 came in his way of promotion.
Both on the question of law decided by us and on the merits of his case, Kuldip Singh Sethi was not entitled to the pay scale of store keepers and the award of Rs. 914/ in his favour was wrong.
The appeal is allowed.
The order is set aside but there will be no order about costs.
C.A. No. 1781 of 1969.
The Tuberculosis Hospital is not an independent institution.
It is a part of the Tuberculosis Association of India.
The hospital is wholly charitable and is a research institute.
The dominant purpose of the Hospital is research and training, but as research and training cannot be given without beds.
in a hospital, the hospital is run.
Treatment is thus a part of research and training.
In these circumstances, the Tuberculosis Hospital cannot be described as an industry.
The order of the Additional Industrial Tribunal, Delhi on the preliminary point must be reversed.
The reference to the Tribunal under section 10(1)(d) of the was incompetent.
The appeal is allowed but we make no order about costs.
No. 1777 of 1969.
The objects of the Kurji Holy Family Hospital are entirely charitable.
It carries on work of training, research and treatment.
Its income is mostly from donations and distribution of surplus as profit is prohibited.
It is, therefore, clear that it is not an industry as laid down in the Act.
The reference made by the State Government, Bihar was thus incompetent.
The appeal will be allowed.
There will be no order about costs, except in the first case (C.A. 1705 of 1967) in which the earlier order of this Court shall be given effect to.
V.P.S. Appeals allowed.

summary:
(1) The definition of industry in section 2(j) of the is in two parts.
But it must be read as a whole.
So read it denotes a collective enterprise in which employers and employees are associated.
It does not exist either by employers alone or by employees, alone.
It exists only when there is a relationship between employers and employees, the former engaged in business, trade, undertaking, manufacture or calling of employers and the latter engaged in any calling, service, employment handicraft or industrial occupation or avocation.
But every case of employment is not necessarily productive of an industry.
A workman is to be regarded as one employed in an industry only if he is following one of the vocations mentioned in conjunction with his employers engaged in the vocations mentioned in relation to the employers, namely, any business, trade, undertaking manufacture or calling of employers.
In the collocation of the terms and their definitions these terms have a definite economic content of a particular type and on the authorities of this Court have been uniformly accepted as excluding professions and are only concerned with the production, distribution and consumption of wealth and the production and availability of material services.
Industry has thus been accepted to mean only trade and business, manufacture, or undertaking analogous to trade or business for the production of material goods or wealth and material services.
Material services involve an activity carried on through co operation between employers and employees to provide the community with the use of something such as electric power, water, transportation, mail delivery, telephones and the like.
In providing these services there may be employment of trained men and even professional men, but the emphasis is not on what they do but upon the productivity of a service organised as an industry and commercially valuable, in which, something is brought into existence quite apart from the benefit to particular individuals; and it is the production of this something which is described as the production of material services.
Thus, the services of professional men involving benefit to individuals according to their needs, such as doctors, teachers, lawyers, solicitors, etc. are easily distinguishable from an activity such as transport service.
They are not engaged in an occu pation in which employers and employees cooperate in the production or sale of commodities or arrangement for the production or sale or distribution and their services cannot be described as material services and are outside the ambit of industry.
It, therefore, follows that before an industrial dispute can be raised between employers and employers or between employers and employees or between employees and employees in relation to the employment or non employment or the terms of employment or with the conditions of labour of any person, there must first 178 be established a relationship of employers and employees associating together, the former following a trade, business, manufacture, undertaking or calling of employers in the production of material goods and material services and the attack following any calling, service, employment, handicraft or industrial occupation or avocation of workmen in aid of the employers enterprise.
It is not necessary that there must be profit motive, but the enterprise must be analogous to trade or business in a commercial sense.
[183 H; 184 G H; 185 C, H; 186 H; 187 A B, E G; 188 F H] (2) The decision in State of Bombay vs Hospital Mazdoor Sabha, ; holding that a Government hospital was an industry took an extreme view of the matter and cannot be justified, because : (a) it was erroneously held that the second part of the definition of 'industry ' was an extension of the first part, whereas, they are only the two aspects of the occupation of employers and employees in an industry; (b) it was assumed that economic activity is always related to capital or profit making and since an enterprise could be an industry without capital or profit making it was held that even economic activity was not necessary; and (c) it was held that since a hospital could be run as a business proposition and for profit by private individuals or groups of individuals a hospital run by Government without profit must also bear the same character.
This test was wrongly evolved from the observations in Federated Municipal and Shire Council Employees of Australia vs Melbourne Corporation, ; , which only indicate that in those activities in which Government take to industrial ventures the motive of profit making and absence of capital are irrelevant.
The observations, on the contrary, show that industrial disputes occur only in operations in which employers and employees associate to provide what people want and desire, that is, in the production of material goods or services, and not the 'satisfaction of material human needs '.
If however a hospital, nursing home or dispensary is run as a business, in a commercial way there may be found elements of an industry there.
Then the hospital is more than a place where persons can get treated for their ailments and it becomes a business.
[189 D H; 190 E F] Hospital Case ; over ruled.
(3) Under section 2(n)(vi) any industry specified in the First Schedule to the Act could be notified by the appropriate Government as a public utility service.
But what could be declared had to be an industry in the first place.
The original entries in the Schedule were five and obviously only general headings were given.
For example 'coal ' is not an industry but certain aspects of dealing with coal would be 'industry ' and that is what is intended.
The dealing must be an industry in which.
there arc employers and employees cooperating in the production of material goods for material services.
Similarly, cotton, textiles or food stuffs or iron and steel, as the entries stand, are not industries.
Therefore, the heading of the First Schedule and the words of cl.
(vi) presuppose the existence of an industry which may be notified as a public utility service, for special protection under the Act.
[191 F H] When the list was expanded in the First Schedule and certain services were mentioned, the intention could not have been otherwise.
It could not have been intended by Parliament that the entire concept of 'industry ' in the Act could be ignored and anything could be brought in as industry.
Most of the new entries are items in which an industry proper involving trade, business.
manufacture or something analogous to business can be found% Therefore, to apply the notification.
the condition precedent of the existence of an industry has to be satisfied.
If there is an industry 179 which falls within the item named in the first Schedule, then alone can it be notified to be classed as a public utility service.
To hold otherwise would largely render useless all the definitions in the Act regarding industry, industrial disputes etc., in relation to the scheduled items.
It is hardly to be thought that notifications can issue in respect of enterprises which are not 'industry ' to start with.
Parliament could not have attempted to declare that notwithstanding the definitions of 'industry ', 'industrial dispute ', workman ' and 'employer ' every hospital is to be regarded as an industry, by including 'service in hospitals and dispensaries ' in the First Schedule.
[192 B C, F H] (4) The activities in the cases of Secretary Madras Gytmkhana Club Employees Union vs Management of the Gymkhana Club [1968] 1 S.C.R. 742, University of Delhi vs Ramnath, ; and National Union of Commercial Employees vs M. R. Meher, [1962] Supp. 3 S.C.R. 157 were rightly held not be industries, because, in the first the management was a non profit making members ' club not employed in trade or industry, and the other two were cases in which the services rendered by the employees were in aid of professional men and not productive of material wealth or services.
[188 C F] Hotel and Catering Industry Training Board and Automobile Proprietary Ltd. H.L.; S.C.; and [1968]3 All.
E.R. 399 C.A., referred to.
Therefore, the Safdarjung Hospital which is run as a department of the Government, the Tuberculosis Hospital which is a charitable and research institute.
and the Kurji Holi Family Hospital which is entirely charitable, are not industries within the meaning of the .
[193 C; 194 B E]


judgement:
Appeal No. 1460 of 1966.
Appeal by special leave from the judgment and decree dated April 30, 1965 of the Madhya High Court, Indore Bench in Second Appeal No. 209 of 1962.
G. L. Sanghi, P. C. Bhartari, for the appellants.
Rameshwar Nath, for respondents Nos. 1 to 4.
The Judgment of the Court was delivered by Hegde, J.
The only question, that falls for decision in this appeal by special leave is as to the application of section 151, Civil Procedure Code to a remand order falling within section 105(2) of that Code.
The facts leading upto the point under consideration may now be stated.
The appellant was the Jagirdar of the suit pro perties.
One Bhagirath was his tenant.
The said Bhagirath died in the year 1947 leaving behind no male issues.
His wife had predeceased him.
He had two daughters who were living at the time of his death.
After his death, defendants Nos. 1 to 5 who are his distant relations took possession of the suit properties and I got the revenue records changed in their names.
Thereafter the appellant brought the suit under appeal seeking the following reliefs (1) to declare that he is the owner of the suit properties; (2) to quash the order of the Tehsildar dated November 8, 1949 transferring the khata relating to the suit properties to the names of Defendants 1 to 5; (3) to grant possession of those properties to him and (4) other usual incidental reliefs.
The defendants resisted the plaintiff 's claim.
They contended inter alia that (1) the civil court had no jurisdiction to entertain ,the suit; (2) the plaintiff had lost right over the suit properties in H view of the Jagir Abolition Act, 1951 which came into force on December 4, 1952 during the pendency of the suit and (3) the 1st defendant being the adopted son of Bhagirath is entitled to 209 the possession of the suit properties.
In the suit several issues. were raised.
it is not necessary to refer to them in view of the limited scope of this appeal.
The trial court dismissed the suit upholding the contention of the defendants on two issues viz. (1) that the civil court had no jurisdiction to entertain the suit and (2) that in view of the Abolition of Jagirs and the vesting of the suit properties in the State, the plaintiff can claim no relief.
The first appellate court reversed the findings of the trial court on those issues.
It came to the conclusion that the civil court had jurisdiction to entertain the suit.
It further held that though in view of the abolition of the jagirs, the suit properties had vested in the State, it was for the State to get itself impleaded if it is interested in this litigation and as the State had not chosen to get itself impleaded, it was open to the plaintiff to press the suit.
In view of those conclusions, the appellate court set aside the decree of the trial court and remanded the suit to the trial court for deciding the other issues left undecided.
After the remand, the trial court negatived every one of the contentions taken by the defendants and decreed the suit as prayed for.
In appeal that decree was confirmed.
In second appeal the High Court of Madhya Pradesh agreed with the trial court and the appellate court on the findings given on all issues excepting the issue relating to the effect of abolition of the jagirs on the suit.
On that issue, it came to the conclusion that in view of the abolition of jagirs under the Jagir Abolition Act, the plaintiff had lost his title to the suit properties and therefore he could not get a decree for possession of the suit properties.
It rejected the contention of the plain tiff that that issue is concluded by the decision of the appellate court made before remand as the same had not been appealed against.
It opined that the court had inherent power to consider the correctness of that order.
It accordingly allowed the appeal and dismissed the suit.
The High Court, in our opinion, erred in holding that the correctness of the remand order was open to review by it.
The order in question was made under rule 23, Order 41, Civil Procedure Code.
That order was appealable under Order 43 of that Code.
As the same was not appealed against, its correctness was no more open to examination in view of section 105 (2) of the Code which lays down that where any party aggrieved by an order of remand from which an appeal lies does not appeal therefrom he shall thereafter be precluded from disputing its correctness.
The High Court has misconceived the scope of its inherent powers.
Under the inherent power of courts recognised by section 151, Civil Procedure Code, a court has no power to do that which is prohibited by the Code.
Inherent jurisdiction of the court must be exercised subject to the rule that if the Code does ' contain specific provi 210 sions which would meet the necessities of the case, such provisions should be followed and inherent jurisdiction should not be invoked.
In other words the court cannot make use of the special provisions of section 151 of the Code where a party had his remedy provided ,elsewhere in the Code and he neglected to avail himself of the, same.
Further the power under section 151 of the Code cannot be exercised as an appellate power.
We are also of the opinion that the High Court is not right in holding that in view of the abolition of the Jagirs, the plaintiff had lost all rights in the suit properties.
It is true that in view of the provisions of the Jagir Abolition Act, the suit properties vested in the State.
But it was conceded at the bar that if the plaintiff is proved to have been the owner of the suit properties on the day the Jagir Abolition Act came into force, he is entitled to the com pensation provided in that Act.
Therefore the plaintiff is interested in establishing that on the date Jagir Abolition Act came into force, he was the full owner of the suit properties.
The facts of this case fall within the rule laid down by this Court in Himatrao vs Jaikishandas and Ors.
On the facts of this case the interests of justice would have been better served if the High Court had ordered the impleading of the State of Madhya Pradesh in the appeal before.
it and determined the rights of all the parties finally.
Hence we set aside the decree of the High Court and remand the case to that Court with a direction that the State of Madhya Pradesh should be impleaded and the rights of all the parties decided in accordance with law.
, In the circumstances of the case we make no order as to costs of this appeal.
Y.P. Case remanded.

dataset_name: IN-Abs

summary:
The tenant of the appellant a Jagirdar, died without leaving any male issues.
His distant relations the respondents, took possession of his properties.
Thereupon the appellant brought a suit claiming possession.
of the properties as he was the owner.
The trial court dismissed the suit holding that the civil court has no jurisdiction to entertain the suit, and that in view of the Jagir Abolition Act, 1951 which was enacted during the pendency of the sit and with the vesting of the suit properties in the State, the appellant was not entitled to claim.
The first appellate court reversed these findings and held that though the suit properties had vested in the State, it was for the State to get itself impleaded, and as the State had not got itself impleaded, it was open to the appellant to press the suit.
In view of these conclusions, the appellate court demanded the suit to decide the other undecided issues.
After the remand, the trial court negatived the respondents defendants contention and decreed the suit.
In appeal that decree was affirmed.
In second appeal, the High Court agreed with the courts below on all issues except that relating to the effect of abolition of Jagirs.
It held that under the Jagir Abolition Act, the appellant lost his title to the suit properties.
In its view that issue was not concluded by the decision of the appellate court made before remand as the same had not been appealed against, since the court had inherent power to consider the correctness of that order.
In appeal, this Court: HELD : The case must be remanded for determination of the right of all the parties after impleading the State as a party.
The correctness of the remand order was not open to review by the High Court.
The order in question was made under rule 23, Order 41, Civil Procedure Code.
That order was appealable under Order 43 of that Code.
As the same was not appealed against, its correctness was no more open to examination in view of section 105 (2) of the Code which lays down that where any party aggrieved by an order of remand from which an appeal lies does not appeal therefrom he shall thereafter be precluded from disputing its correctness.
The High Court has misconceived the scope of its inherent powers.
Under the inherent power of courts recognised by section 151, Civil Procedure Code, a court has no power to do that which is prohibited by the Code.
Inherent jurisdiction of court must be exercised subject to the rule that if the Code does contain specific provisions which would meet the necessities of the case, such provisions should be followed and inherent jurisdiction should not be involved.
In other words the court cannot make use of the special provisions of section 151 of the Code where a party bad his remedy provided elsewhere in the Code and be neglected 208 to avail himself of the same.
Further the power under section 151 of the Code cannot be exercised as an appellate power.
The appellant Jagirdar had not lost all rights in the suit properties.
The suit properties vested in the State in view of the Jagir Abolition Act.
But it was conceded at the bar that if the appellant was proved to have been the owner of the suit properties on the day the Jagir Abolition Act came into force, he was entitled to the compensation provided in that Act.
Therefore the appellant was interested in establishing that on the date Jagir Abolition Act came into force, he was the full owner of the suit properties.
[210 C] Himatrao vs Jaikishandas and Ors. ; followed.


judgement:
iminal Appeal No. 61 of 1953.
Appeal under article 134(1)(c) of the Constitution of India from the Judgment and Order dated the 7th August, 1952, of the High Court of Judicature for the State of Punjab at Simla in Criminal Revision No. 78 of 1952 arising out of the case reported by the District Magistrate, Jullundur, with his No. 301 M.D. Reader dated the 9th January, 1952, for revision of the Order dated the 20th July, 1951, of Magistrate 1st Class.
section M. Sikri, Advocate General for the State Of Punjab (Porus A. Mehta and P. G. Gokhale, with him) for the appellant.
N. section Bindra for the respondent.
October 20.
The Judgment of the Court was delivered by MUKHERJEA J.
This appeal, which has come before us, on a certificate granted by the High Court of the State of Punjab at Simla, under article 134 (1)(c) of the Constitution, raises a short point of law.
On the 3rd of March, 1948, an Ordinance (being Ordinance No. VII of 1948) was promulgated by the Governor of East Punjab, under section 88 of the Government of India Act, 1935, making provisions for the registration of land claims of the East Punjab refugees.
On the 17th March, 1948, the respondent, Mohar Singh, who pur ports to be a refugee from West Pakistan, filed a claim in accordance with the provisions of this Ordinance, stating therein, that he had lands measuring 104 kanals situated within the district of Mianwali in West Punjab.
On the 1st of April, 1948, this Ordinance was repealed and Act XII of 1948 (hereinafter called 'the Act ') was passed by the East Punjab Legislature re enacting all the provisions of the repealed Ordinance.
The claim filed by the respondent was investigated in due course and it was found, after enquiry, that the statement made by him was absolutely false and that as a matter of fact there was no land belonging to him in West Pakistan.
Upon this, a prosecution was started against him on the 13th of May, 1950, under section 7 of the 895 Act, which makes it an offence for any person to submit, with regard to his claim under the Act, any information which is false.
The accused was tried by section Jaspal Singh, Magistrate, First Class, Jullandur, before whom he confessed his guilt and pleaded for mercy.
The trying Magistrate by his order dated the 20th of July, 1951, convicted the respondent under section 7 of the Act and sentenced him to imprisonment till the rising of the Court and a fine of Rs. 120, in default of which he was to suffer rigorous imprison ment for one month.
The District Magistrate of Jullundur considered the sentence to be inadequate and referred the case to the High Court at Simla under section 438 of the Criminal Procedure Code with a recommendation that a deterrent sentence might be imposed upon the accused.
The matter first came up before a single Judge of that Court and a preliminary point was raised on behalf of the respondent that it was not within the competence of the trying Magistrate to convict him at all under the provisions of the Act, as the offence was committed against the Ordinance before the Act came into force and the prosecution was started long after the Ordinance had come to an end.
Having regard to the diversity of judicial opinion on the point, the single Judge referred the case for decision by a Division Bench.
The learned Judges constituting the Division Bench accepted the contention raised on behalf of the respondent, and by their judgment, dated the 7th of August, 1952, set aside the conviction of the respondent and the sentence imposed upon him under section 7 of the Act.
It is against this judgment that the present appeal has been taken to this Court by the State of Punjab.
It is not disputed that the respondent did submit, with regard to the claim filed by him under the provisions of the Ordinance, an information which was false and that such act was punishable as an offence under section 7 of the Ordinance.
The Ordinance however was repealed soon after the filing of the claim and was substituted by the Act which incorporated all the provisions of the Ordinance.
The High Court in deciding the case in favour of the respondent proceeded on the 896 ground that as Act XII of 1948 was not in existence at the date when the claim was filed by the respondent, he could not possibly be convicted of an offence under a law which was not in force at the time of the commission of the offence.
The State Government attempted to meet this argument by invoking the provisions of section 6 of the which is in the same terms as section 4 of the Punjab .
Section 6 of the lays down the effect of the repeal of an enactment.
The section runs thus "6.
Where this Act or any Central Act or regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not (c)affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed ; or (d)affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or (e)affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid.
" On the strength of this provision in the it was contended on behalf of the State that the repeal of the Ordinance could not in any way affect the liability already incurred by the respondent, in respect of an offence, committed against the provisions of the Ordinance and any penalty or punishment consequent thereon.
The learned Judges of the High Court negatived this contention by holding that section 6 of the could be attracted only when an Act or regulation is repealed simpliciter but not when, as in the present case, the repeal is followed by re enactment.
The Repealing Act, it is pointed out, reproduces the provisions of the Ordinance in their entirety, but it 897 nowhere provides that offences committed, when the Ordinance was in force, could be punished after its repeal.
The language of section 11 of the Act, which contains its saving provisions, does not, it is said, indicate that a criminal liability incurred when the Ordinance was in force would continue after it came to an end.
It is the propriety of this view that has been challenged before us in this appeal.
It is not disputed that in the present case the prose caution was started against the respondent under section 7 of the Act and not under the corresponding provision of the Ordinance.
The offence was committed at a time when the Act was not in force and obviously no man could be prosecuted or punished under a law which came into existence subsequent to the commission of the offence.
But this by itself 'Might not raise any serious difficulty, for the Court would have ample authority to alter the conviction of the accused, under the Act, to one under the Ordinance which contained the identical provision, provided he could be prosecuted and punished under the Ordinance after it was repealed, and this is the material point that requires consideration in this case.
Under the law of England, as it stood prior to the Interpretation Act of 1889, the effect of repealing a statute was said to be to obliterate it as completely from the records of Parliament as if it had never been passed, except for the purpose of those actions, which were commenced, prosecuted and concluded while it was an existing law(1).
A repeal therefore without any saving clause would destroy any proceeding whether not yet begun or whether pending at the time of the enactment of the Repealing Act and not already prosecuted to a final judgment so as to create a vested right(1).
To obviate such results a practice came, into existence in England to insert a saving clause in the repealing statute with a view to preserve rights and liabilities already accrued or incurred under the repealed enactment.
Later on, to dispense with the necessity of having to insert a saving clause on each occasion, (1) Vide Craies on Statute Law, 5th edn, page 323.
(2) Vide Crawford on Statutory Construction, page 599 600.
i 898 section 38(2) was inserted in the Interpretation Act of 1889 which provides that a repeal, unless the contrary intention appears, does not affect the previous operation of the repealed enactment or anything duly done or suffered under it and any investigation, legal proceeding or remedy may be instituted, continued or enforced in respect of any right, liability and penalty under the repealed Act as if the Repealing Act had not been passed.
Section 6 of the , as is well known, is on the same lines as section 38(2) of the Interpretation Act of England.
Under section 30 of the , which corresponds to section 27 of the Punjab Act, the provisions of the Act are applicable to Ordinances as well.
Of course, the consequences laid down in section 6 of the Act will apply only when a statute or regulation having the force of a statute is actually repealed.
It has no application when a statute, which is of a temporary nature, automatically expires by efflux of time.
The Ordinance in the present case was undoubtedly a temporary statute but it is admitted that the period during which it was to continue had not expired when the Repealing Act was passed.
The repeal therefore was an effective one which would normally attract the operation of section 6 of the .
The controversy thus narrows down to the short point as to whether the fact of the repeal of the Ordinance being followed by reenactment would make the provision of section 6 of the inapplicable to the present case.
The High Court, in support of the view that it took, placed great reliance upon certain observations of Sulaiman C.J. in Danmal Parshotamdas vs Baburam(1).
The question raised in that case was whether a suit by an unregistered firm against a third party, after coming into force of section 69 of the Partnership Act, would be barred by that section in spite of the saving clause contained in section 74(b) of the Act.
The Chief Justice felt some doubts on the point and was inclined to hold ,that section 74(b) would operate to save the suit although the right sought to be enforced by it had (1) All.
899 accrued prior to the commencement of the Act; but eventually he agreed with his colleague and held that section 69 would bar the suit.
While discussing the provision of section 74(2) of the Partnership Act, in course of his judgment, the learned Chief Justice referred by way of analogy to section 6(e) of the and observed as follows at page 504: It seems that section 6(e) would apply to those cases only where a previous law has been simply repealed and there is no fresh legislation to take its place.
Where an old law has been merely repealed, then the repeal would not affect any previous right acquired nor would it even affect a suit instituted subsequently in respect of a right, previously so acquired.
But where there is a new law which not only repeals the old law, but is substituted in place of the old law, section 6(e) of the is not applicable, and we would have to fall back on the provisions of the new Act itself.
These observations could not undoubtedly rank higher than mere obiter dictum for they were not at all necessary for purposes of the case, though undoubtedly they are entitled to great respect.
In agreement with this dictum of Sulaiman C.J. the High Court of Punjab, in its judgment in the present case, has observed that where there is a simple repeal and the Legislature has either not given its thought to the matter of prosecuting old offenders, or a provision dealing with that question has been inadvertently omitted, section 6 of the will undoubtedly be attracted.
But no such inadvertence can be presumed where there has been a fresh legislation on the subject and if the new Act does not deal with the matter, it may be presumed that the Legislature did not deem it fit to keep alive the liability incurred under the old Act.
In our opinion the approach of the High Court to the question is not quite correct.
Whenever there is a repeal of an enactment, the consequences laid down in section 6 of the will follow unless, as the section itself says, a different intention appears.
In the case of a simple repeal there is scarcely any room for expression of a contrary opinion.
But when the 900 repeal is followed by fresh legislation on the same subject we would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate a different intention.
The line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them.
We cannot therefore subscribe to the broad proposition that section 6 of the is ruled out when there is repeal of an enactment followed by a fresh legislation.
Section 6 would be applicable in such cases also unless the new legislation manifests an intention incompatible with or contrary to the provisions of the section.
Such incompatibility would have to be ascertained from a consideration of all the relevant provisions of the new law and the mere absence of a saving clause is by itself not material.
It is in the light of these principles that we now proceed to examine the facts of the present case.
The offence committed by the respondent consisted in filing a false claim.
The claim was filed in accordance with the provision of section 4 of the Ordinance and under section 7 of the Ordinance, any false information in regard to a claim was a punishable offence.
The High Court is certainly right in holding that section 11 of the Act does not make the claim filed under the Ordinance a claim under the Act so as to attract the operation of section 7.
Section 11 of the Act is in the following terms: " The East Punjab Refugees (Registration of Land Claims) Ordinance No. VII of 1948 is hereby repealed and any rules made, notifications issued, anything done, any action taken in exercise of the powers conferred by or under the said Ordinance shall be deemed to have been made, issued, done or taken in exercise of the powers conferred by, or under this Act as if this Act had come into force on 3rd day of March, 1948.
" We agree with the High Court that the expression "anything done" occurring in the section does not mean or include an act done by a person in contravention of the provisions of the Ordinance.
What the section contemplates and keeps alive are rules, notifications or 901 other official acts done in exercise of the powers conferred by or under the Ordinance and these powers are mentioned in several sections of the Act.
But although the lodging of the claim does not come within the purview of section 11 of the Act, we are of opinion that the proviso to section 4 of the Act clearly shows that a claim filed under the Ordinance would be treated as one filed under the Act with all the consequences attached thereto.
Section 4 of the Act provides for the registration of land claims.
The first subsection lays down how the claim is to be filed.
The proviso attached to it then says that "a refugee who has previously submitted a claim under Ordinance VII of 1948 to any other authority competent to register such claim shall not submit another claim in respect of the same land to the Registering Officer.
" Such claim would be reckoned and registered as a claim under the Act and once it is so treated the incidents and corollaries attached to the filing of a claim, as laid down in the Act, must necessarily follow.
The truth or falsity of the claim has to be investigated in the usual way and if it is found that the, information given by the claimant is false, he can certainly be punished in the manner laid down in sections 7 and 8 of the Act.
If we are to hold that the penal provisions contained in the Act cannot be attracted in case of a claim filed under the Ordinance, the results will be anomalous and even if on the strength of a false claim a refugee has succeeded in getting an allotment in his favour, such allotment could not be cancelled under section 8 of the Act.
We think that the provisions of sections 4,7 and 8 make it apparent that it was not the intention of the Legislature that the rights and liabilities in respect of claims filed under the Ordinance shall be extinguished on the passing of the Act, and this is sufficient for holding that the present case would attract the operation of section 6 of the .
It may be pointed out that section 1 1 of the Act is somewhat clumsily worded and it does not make use of expressions which are generally used in saving clauses appended to repealing statutes; but as has been said above the point for our 902 consideration is whether the Act evinces an intention which is inconsistent with the continuance of rights and liabilities accrued or incurred under the Ordinance and in our opinion this question has, to be answered in the negative.
The Advocate General of Punjab has drawn our attention to certain American authorities which hold that in case of simultaneous repeal and re enactment, the re enactment is to be considered as reaffirmation of the old law and the provisions of the repealed Act which are thus re enacted continue in force uninterruptedly.
It appears that judicial opinion in America on this point is not quite uniform and we do not consider it necessary to express any opinion upon it.
The provisions of section 6 of the will, in our opinion, apply to a case of repeal even if there is simultaneous enactment unless a contrary intention can be gathered from the new enactment.
The result is that the appeal is allowed and the judgment of the High Court set aside.
The Advocate General does not press for enhancement of sentence passed on the respondent.
Consequently it is unnecessary for the High Court to hear the reference made to it by the District Magistrate, Jullundur any further.
The sentence already passed upon the respondent by the trying Magistrate shall stand and if the fine of Rs. 120 has not already been, paid, it shall be paid now.
In default, the respondent shall suffer rigorous imprisonment for one month.
Appeal allowed.

summary:
The provisions of a. 6(c) (d) and (e) of the (same as section 4 of the Punjab General Clauses Act, 1898) relating to the consequences of the repeal of a law are applicable not only when an Act Regulation is repealed simpliciter but also to a case of repeal and simultaneous enactment re enacting all the provisions of the repealed law.
On the repeal of a law the consequences mentioned in a. 6(c)(d) and (e) of the Act follow unless a different or contrary intention appears from the repealing statute.
For ascertaining the above contrary intention one has to look to the provisions of the new enactment in order to see whether the rights and liabilities under the repealed law have been put an end to by the now enactment.
It is an erroneous and incorrect approach to enquire if the new enactment has by its provisions positively kept alive the rights and liabilities under the repealed law.
The absence of a saving clause in the new enactment preserving the rights and liabilities under the repealed law is neither material nor decisive on the question.
Section 6 of the , has no application to a temporary law which automatically expires by efflux of time but the section would apply if the temporary law is repealed before it so expires.
The Punjab Ordinance VII of 1948 was a temporary law and the same having been repealed before it expired by efflux of time a prosecution for an offence committed under section 7 of the Ordinance prior to its repeal could be validly started even after the repeal.
The term "anything done '. ' occurring in section 11 of the Punjab Act XII of 1948 does not mean any act done by a person in contravention of the provisions of the East Punjab Refugees (Registration of Land Claims) Ordinance VII of 1948.
The term "anything clone" refers to official acts done in the exercise of the powers conferred by or under the Ordinance.
Danmal Parshotamdas vs Baburam ((1935) I.L.R. 58 All. 495), distinguished.
114 894


judgement:
Appeal No. 457 of 1970.
Appeals by special leave from the judgment and order dated April 24, 1968 of the Allahabad High Court in Civil Misc.
Writ No).
1401 of 1968.
J. P. Goyal and V. C. Prashar, for the appellant.
C. B. Agarwala and O. P. Rana, for the respondent.
The Judgment of the Court was delivered by Shah, J.
The appellants held a licence under the U.P. Sugar Dealers ' Licensing Order, 1962, to deal in sugar as "wholesale distributors" they also held a licence under the U.P. Food grains Dealers ' Licensing Order, 1964.
By letter dated June 5, 1967 the appellants were called upon to explain certain irregularities detected on inspection of their shop by the Assistant Commissioner of Food and Civil Supplies on April 24, 1967.
On the following day the appellants were directed to hand over all their stocks of sugar and flour to the Bindki Co operative Marketing Society.
Representations against the order directing the appellants to deliver their stocks made to the District Magistrate, Fatehpur, were not even attended to, and the appellants were obliged to surrender their stocks of sugar and flour.
By letter dated June 28, 1967, the appellants were informed that the District Magistrate, Fathpur, had cancelled their licences as dealers in sugar and flour.
The appellants applied for a copy of the order, but it was not supplied.
Against the order of the District Magistrate, the appellants submitted an appeal under cl. 8 of the Sugar Dealers ' Licensing Order, 1962, on July 19, 1967.
By letter dated January 11, 203 1969, the Deputy Secretary to the Government of U.P., Food and Rationing Department, intimated the appellants that their appeal against the cancellation of the licence by the District Magistrate was rejected.
The reasons for the order passed by the State Government were also not communicated to the appellants.
The appellants then moved a petition in the High Court of Allahabad for a writ quashing the orders of the District Magistrate and the State Government in appeal.
The petition was rejected by a Division Bench of the High Court.
With special leave, the appellants have appealed to this Court.
The proceedings of the authorities exercising power under the Sugar Dealers ' Licensing Order, 1962, and the Foodgrain Dealers ' Licensing Order,, 1964, strike at the very root of the rule of law.
The appellants have by a series of official acts which flout the rule of law deprived of even the semblance of protection they may claim in an administration functioning under a democratic Constitution.
A day after the date on which the appellants were called upon to submit their explanation regarding the irregularities alleged to be discovered at the inspection,, they were ordered to part with the stocks of sugar and flour in their possession.
Objections raised by the appellants before the District Magistrate were never attended to.
No attempt is made to disclose the source of the power and the necessity to exercise that power.
By the action of the authorities, the appellants were deprived of their right to carry on business in sugar and flour without even an opportunity to explain the alleged irregularities.
Their protests addressed to the District Magistrate were ignored; the District Magistrate cancelled their licences without disclosing any reasons, and the State Government rejected the statutory appeal also without recording any reasons.
This series of actions and orders passed by the executive authorities require something more than a plea of ignorance of law on the part of the authorities to explain.
The appellants were entitled at least to be told the reasons for cancelling their licences.
The District Magistrate intimated the cancellation of the licences by an official communication, giving no reasons, and the result of the appeal to the State Government was communicated by a letter from the Deputy Secretary to the Government of U.P., without disclosing even the identity of the officer who considered the objections and the, reasons for rejecting the objections.
The case discloses a disturbing state of affiairs.
The authorities have disclosed by their conduct a reckless disregard of the rights of the appellants.
The order passed by the District Magistrate cancelling the licences was a quasi judicial : it could be made only on a consideration of the charges and the explanation 204 given by the appellants.
That necessarily implied that the District Magistrate had to give some reasons why he held the charges proved, and the explanation unacceptable.
When the matter was carried in appeal, the State Government could at least have acted with some awareness that citizens have rights which must be protected against possible arbitrary action by subordinate officials.
The District Magistrate is not made the final authority in cancelling the licence.
The appellants had a right to carry on their business, and they held a licence to carry on their business they could be deprived of their right by an executive order supported by good and adequate reasons.
The relevant rules granted a right of appeal to the State.
Government against that order, and that implied that the aggrieved party must have an Opportunity to convince the State Government that the order passed by the District Magistrate was erroneous.
That right could be effectively exercised if reasons be recorded by the District Magistrate and supplied to the aggrieved party.
If the aggrieved party is not supplied the reasons, the right to appeal is an empty formality.
From the materials on the record it cannot be determined as to who considered the appeal addressed to the State Government, and what was considered by the authority exercising power on behalf of the State Government.
The practice of the executive authority dismissing statutory appeals against orders which prima facie seriously prejudice the rights of the aggrieved party without giving reasons is a negation of the rule of law.
This Court had occasion to protest against this practice in several decisions : see Madhya Pradesh Industries Ltd. vs Union of India & Others(1) (per Subba Rao, J.,); Bhagat Raja vs Union of India and Ors(2); State of Madhya Pradesh and Anr.
vs Seth Narsinghdas Jankidas Mehta(2).
The State of Gujarat vs Patel Raghav Natha and Ors.(4); and Prag Das Umar Vaishya vs The Union of India and Ors.(5).
The power of the District Magistrate was quasi judicial : exercise of the power of the State Government was subject to the supervisory power of the High Court under article 227 of the Constitution and of the appellate power of this Court under article 136 of the Constitution.
The High Court and this Court would be placed under a great disadvantage if no reasons are given, and the appeal is dismissed without recording and communicating any reasons.
Opportunity to a party interested in the dispute to present his case on questions of law as well as fact, ascertainment of facts (1) ; (2) ; (3) C.A. No. 621 of 1966 decided on April 29, 1969.
(4) C.A. No. 723 of 1966 decided on April 21, 1969.
(5) C.A. No. 657 of 1965 decided on Aug. 17, 1967.
205 from materials before the Tribunal after disclosing the materials to the party against whom it is intended to use them, and adjudication by a reasoned judgment upon a finding of the facts in controversy and application of the law to the facts found, are attributes of even a quasi judicial determination.
It must appear not merely that the authority entrusted with quasi judicial authority has reached a conclusion on the problem before him : it must appear that he has reached a conclusion which is according to law and just, and for ensuring that end he must record the ultimate mental process leading from the dispute to its solution.
Satisfactory decision of a disputed claim may be reached only if it be, supported by the most cogent reasons that appeal to the authority.
Recording of reasons in support of a decision on a disputed claim by a quasi judicial authority ensures that the decision is reached according to law and is not the result of caprice, whim or fancy or reached on grounds of policy or expediency.
A party to the dispute is ordinarily entitled to know the grounds on which the authority has rejected his claim.
If the order is subject to appeal, the necessity to record reasons is greater, for without recorded reasons the appellate authority has no material on which it may deter mine whether the facts were properly ascertained, the relevant law was correctly applied and the decision was just.
The High Court in rejecting the petition filed by the appellants has observed that the District Magistrate in considering the explanation of the appellants has "considered all the materials" and also that "the State Government in considering the appeal had considered all the materials".
We have, however, nothing on the record to show what materials, if any, were considered by the District Magistrate and the State Government.
The High Court has also observed that cl. 7 of the Sugar Dealers ' Licensing Order does not require "the State Government to pass a reasoned order.
All that is required is to give an aggrieved person an opportunity of being heard.
" We are of the view that the High Court erred in so holding.
The appellants has a right not only to have an opportunity to make a representation, but they are entitled to have their representation considered by an authority unconcerned with the dispute and to be given information which would show the decision was reached on the merits and not on; considerations of policy or expediency.
This is a clear implication of the nature of the jurisdiction exercised by the appellate authority : it is not required to be expressly mentioned in the statute.
There is nothing on the record which shows that the representations made by the appellants was even considered.
The fact that cl. 7 of the Sugar Dealers ' Licensing Order to which the High Court has referred does not "require the State Government to pass a reasoned order" is wholly irrelevant.
The nature of 206 the proceeding requires that State Government must give adequate reasons which disclose that an attempt was made to reach a conclusion according to law and just.
Counsel appearing on behalf of the State has not attempted to support the reasons given by the High Court.
He merely contended that there are in the files of the Government, orders passed by the District Magistrate and also of the State Government which gave reasons in support of the orders.
The orders have, however, not been communicated to the appellants, and were not even produced before the High Court.
Obviously we cannot consider those orders, if any, at this stage.
The orders passed by the District Magistrate and the State Government cancelling the licences of the appellants are quashed.
The State will pay the costs of the appellants in this Court and in the High Court.
R.K.P.S. Appeal allowed and Orders quashed.

summary:
The appellants, who were holders of a licence under the U.P. Sugar Dealers ' Licensing Order, 1962, to deal in sugar and were also licenced to deal in flour, were called upon by a letter dated June 5,1967 to explain certain irregularities detected on inspection of their shop.
The next day they were directed to hand over their stocks of sugar and flour to a Cooperative Marketing Society.
Their representations against this direction to the District Magistrate were not attended to, and they were therefore obliged to surrender their stocks.
By a letter dated June 28, 1967, the appellants were informed that the District Magistrate had cancelled their licences as dealers in sugar and flour but no reasons were given for this order.
An appeal under clause 8 of the Order of 1962 to the State Government was rejected but no reasons were communicated to the appellants for this rejection.
A writ petition challenging the orders of the District Magistrate and the State Government in appeal was dismissed by the High Court.
On appeal to this Court, HELD : The orders passed by the District Magistrate and the State Government cancelling the licences of the appellants must be quashed.
The authorities had disclosed by their conduct a reckless disregard of the rights of the appellants.
The order passed by the District Magistrate cancelling the licences was quasi judicial; it could be made only on a consideration of the charges and the explanation given by the appellants.
That necessarily implied that the District Magistrate had to give some reasons why he held the charges proved, and the explanation unacceptable.
The appellants had a right to carry on their business and they could be deprived of their right only by an order supported by good and adequate reasons ' Under the rules appellant had a right of appeal to the State Government.
Unless reasons were given in the District Magistrate 's Order the aggrieved party had no opportunity to convince the State Government that the order was erroneous.
, if the aggrieved party was not supplied the reasons the right of appeal was an empty formality.
[203 H 204 D] There was nothing on the record to show that the representations made by the appellants to the State Government were even considered.
The fact that cl. 7 of the Sugar Dealers ' Licensing Order to which the High Court had referred does not "require the State Government to pass a reasoned order" is wholly irrelevant.
The nature of the proceeding requires that the State Government must give adequate reasons which disclose that an attempt was made to reach a conclusion, which was according to law and just.
[205 H] Opportunity to a party interested in the dispute to present his case on questions of law as well as fact, ascertainment of facts from materials L 11 Sup.
C 1 14 20 2 before the Tribunal after disclosing the materials to the party against whom it is intended to use them, and adjudication by a reasoned judgment upon a finding of the facts found, are attributes of even a quasi judicial deter mination.
It must appear not merely that the authority entrusted with quasi judicial authority has reached a conclusion on the problem before him: it must appear that he has reached a conclusion which is according to law and just, and for ensuring that he must record the ultimate mental process leading from the dispute to its solution.
[204 H] Madhya Pradesh Industries Ltd. vs Union of India & Others (per Subba Rao, J.) ; ; Bhagat Raja vs Union of India and Ors. ; ; State of Madhya Pradesh and Anr.
vs Seth Narsinghdas Jankidas Mehta, C.A. No. 621 of 1966 decided on April 29, 1969.
The Slate of Gujrat vs Patel Raghav Natha and Ors., C.A. No. 723 of 1966 decided on April 21,1969 and Prag Das Umar Vaishya vs The Union of India and Ors., C.A. No. 657 of 1965 decided on Aug. 17, 1967; referred to.