judgement:
Appeal No. 2134 of 1970.
Appeal by special leave from the judgment and order dated March 5, 1970 of the Madhya Pradesh High Court in (Indore Bench) in Second Appeal No. 618 of 1964.
K. Rajendra Chowdhry, for the appellant.
P. C. Bhartari, D. N. Mishra and J.
B. Dadachanji, for, respondent No. 1. 302 The Judgment of the Court was delivered by BEG, J. This is a Defendant 's appeal by Special Leave against the judgment and decree of the High Court of Madhya Pradesh allowing a second appeal in a partition suit between members of a family governed by Muslim law.
The Defendant Appellant and the Plaintiff Respondent are both sons of Kadir Ali Bohra who died on 5 4 1952 leaving behind five sons, a daughter and his widow as his heirs.
It appears that Kadir Ali had incurred debts so heavily that all his property would have been swallowed up to liquidate these.
Three of his sons, namely, Ghulam Abbas, Defendant No. 1, Abdullah, Defendant No. 2, and Imdad, Defendant No. 3, who had prospered, came to his rescue so that the property may be saved.
But, apparently, they paid up the debts only in order to get the properties for themselves to the exclusion of the other two sons, namely, Kayyumali, Plaintiff Respondent, and Nazarali, Defendant No. 4, who executed, on 10 10 1942, deeds acknowledging receipt of some cash and moveable properties as consideration for not claiming any rights in future in the properties mentioned in the deeds in which they gave up their possible rights in future.
The executant of each deed said : "I have accordingly taken the ' things mentioned above as the equivalent of my share and I have out of free will written this.
I have no claim in the properties hereafter and if I put up a claim in future to any of the properties I shall be proved false by this document.
I shall have no objection to my father giving any of the properties to my other brothers. .".
During the father 's life time, when all chance or expectation of inheritance by either Kayyumali or Nazarali could be destroyed by disposition of property, neither of these two raised his little finger to object.
The only question before us now is whether the Plaintiff and Defendant No. 4 are estopped by their declarations and conduct and silence from claiming their shares in the properties covered by these deeds.
The first Appellate Court, the final court on questions of fact, recorded the following findings, after examining the, whole set of facts before it, to conclude that the plaintiff and defendant No. 4 were estopped from claiming their shares in the inheritance "In the instant case, it is evident that the release deeds exhibit
D/2 and exhibit
D/3 were executed by the plaintiff and defendant No. 4, Nazarali, when the defendants NO. 1, 2 and 3 had with their labour and money straightened the status of his father Kadar Ali and had cleared up the debts which would have devoured the, 303 whole property of Kadar Ali and the plaintiff was doing nothing and was in a way a burden to his father.
In such state of things when the plaintiff and defendant No. 4 executed the release deeds in question, it can be said that it was a family settlement to prevent the future disputes that may arise and to secure the peace and happiness in the family of the parties and thereby induced the defendants No. 1, 2 and 3 to believe that the plaintiff would not claim a share in the suit properties and led them to discharge the debts due to Kadar All and to be in affluent circumstances themselves as they are at present and the plaintiff now seeks benefit of it against his own past undertakings".
The High Court reproduced the passage, quoted above, from the judgment of the First Appellate Court, without any dissent from any of the findings of fact contained there.
It specifically held that the Court below was correct in finding that consideration had passed the Plaintiff and Defendant No. 4 for the relinquishment of their future possible rights of inheritance.
It proceeded on the assumption that, it the law had not prohibited the transfer of his right of inheritance by a Muslim heir, an estoppel would have operated against the Plaintiff and Defendant No. 4 on the findings given.
It held that the rule.
of Muslim Personal law on the subject has the same effect as Section 6(a) of the Transfer of Property Act which lays down: "The chance of an heir apparent succeeding to an" estate, the chance of a relation obtaining a legacy on the death of a kinsman, or any other mere possibility of a like nature, cannot be transferred.
It pointed out that, although, Section 2 of the Transfer of Property Act provided that nothing in the second Chapter of the, Act will be deemed to affect any rule of Mahomedan Law, so that section 6(a) contained in Chapter 2 could not really be applied, yet, the effect of Mahomedan Law itself was that the chance of a Mahomedan heir apparent succeeding to an estate cannot be the subject of a valid transfer or lease" (See : Mulla 's Principles of Mahomedan Law 17th Edn.
ss 54, page 45).
After equating the effect of the.
rule of Mahomed an Law with that of Section 6(a) of the Transfer of Property Act, the High Court applied the principle that no estoppel can arise against statute to what it considered to be an estoppel put forward against a rule of Mahomedan law.
The High Court had relied on a decision of the Madras High ' Court in Abdul Kafoor vs Abdul Razack(l), which had been (1) A.I.R. 1959 Mad.
p. 131.
304 followed by the Kerala High Court without giving fresh reason in Valanhivil Kunchi vs Kengayil Pattikavil Kunbi Avulla(1) in preference to the view adopted by the Allahabad High Court in Latafat Hussain vs Hidayat Hussain(2) followed by the, Travancore Cochin High Court in Kochunni Kachu Muhammed vs Kunj Pillai Muhammed(3) The principal question for decision before us is whether the Madras or the Allahabad High Court view is correct.
The Madras High Court, in Abdul Kapoor 's case (supra) had specifically dissented from the Allahabad view in Latafat Hussain ' case (supra) on the ground that, if an estoppel was allowed to pleaded as a defence, on the strength of relinquishment of a spes successionis for consideration, the effect could be to permit the pro visions of Mahomedan Law to be defeated.
Hence, it held that such an attempt would be struck by section 23 of the Indian Con tract Act.
The object however, of the rule of Mahomedan law which does not recognise a purported transfer of a spes succession is as a legally valid transfer at all, is not to prohibit anything but only to make it clear what is and what is not a transferable right or interest in property just as this is what section 6(a) of Transfer of Property Act is meant to do.
Its purpose could not be to protect those who receive consideration for what they do not immediately have so as to be able to transfer it at all.
It could, if protection of any party to a transaction could possibly underlie such a rule, be more the protection of possible transfers so that they may know what is and what is not a legally enforceable transfer.
With due respect, we are unable to concur with the view of the Madras High Court that renunciation of an expectancy, as a purported but legally ineffective transfer, is struck by Section 23 of the Indian Contract Act.
As it would be void as a transfer at all there was no need to rely on Section 23 Contract Act, If there was no "transfer".
of property at all, which was the correct position but a simple contract, which could only operate in future, it was certainly, not intended to bring about an immediate transfer which was all that the rule of Muslim law invalidated.
The real question was whether quite apart from any transfer or contract, the declarations in the deeds of purported relinquishment and receipt of valuable consideration could not be parts of a course of conduct over a number of years which, taken as a whole, created a, bar against a successful assertion of a right to property when that Tight actually came ' into being.
An equitable estoppel operates, if its elements are established, as a rule of evidence preventing the assertion of rights which may otherwise exist.
(1) A.F.R. 1964 Kerala P. 200 (2) A I R. 1936 All. 573.
(3) A.I.R. 1956 Travancore 217.
305 High Court in Asa Beevi vs Karuppan(1) where Macnaghten 's "Principles and Precedents of Moohumudan Law", Sir Roland Wilson 's Digest of Anglo Mohhamadan Law" P. 260, and Ameer Ali 's "Mohommedan Law" (Vol.
II, third edition, p. 50 51), and Tyabji 's "Muslim Law" have been referred to in support of the conclusion that ",here is a large preponderance of authority in favour of the view that a transfer or renuniciation of the right of inheritance before that right vests is prohibited under the Mahomedan Law".
The whole discussion of the principle in the body of the judgment, however brings out that the real reason is not a prohibition but that there cannot be a renunciation of a right which is incohate or incomplete so long as it remains in that state.
In fact, it is not correct to speak of any right of inheritance before it arises by the death of the predecessor who could have, during his life time, deprived the prospective heir of his expectation entirely by dispositions inter vivos.
Sir Roland Wilson, in his "Anglo Mohhamadan Law" (P 260, paragraph 208) states the position thus : "For the sake of those, readers Who are familiar with the joint ownership of father and son according to the most widely prevalent school of Hindu Law, it is perhaps desirable to state explicitly that in Muhammadan, as in Roman and English Law, nemo est heres viventis a living person has, no heir.
An heir apparent or presumptive has no such reversionary interest as would enable him to object to any sale or gift made by the owner in possession; see Abdul Wahid, L.R. 12 I.A., 91, and All., 456 (1885) which was followed in Hasan Ali, 1 1 All. 456 (1889).
The converse is also true : a renunciation by an expectant heir in the lifetime of his ancestor is not valid, or enforceable against him after the vesting of the inheritance".
This is a correct statement, so far as it goes, of the law, because a bare renunciation of an expectation to inherit not bind the expectant heir 's conduct in future.
But if the expectant heir goes further and receives consideration and so conducts himself as to mislead an owner into not making dispositions of his property inter vivos the expectant heir could be debarred from setting up his right when it does unquestionably vest in him other words, the principle, of estoppel remains untouched by this statement.
As the Madras Full Bench pointed out, the subject was dis cussed more fully, in Ameer Ali 's "Mohammedan Law" (Vol. 11), than elsewhere.
There we find the reason for or the object underlying the rule.
It is that there is nothing to renounce in such a case because an expectancy remains at most before it has mate (1) [1918] (41 Madras) I.L.R. 365.
306 rialized only an "incohate right".
It is in this light that the following observations in Hurmoot Ool Nisa Begum vs Allehdia Khan,(`) is explained by Ameer Ali : "According to the Mahomedan Law the right of inheritance may be renounced and such renunciation need not be express but may be implied from the ceasing or desisting from prosecuting a claim maintainable against another.
" Ameer Ali explained, citing an opinion of the law officers, given in Khanum Jan vs Jan Bibi; (2 .lm15 "Renunciation implies the yielding up of a right already vested, or the ceasing or desisting from prosecuting a claim maintainable against another.
It is evident that, during the life time of the mother the daughters have no right of inheritance and their claim on that account is not maintainable against any person during her life time.
It follows, therefore, that this renunciation during the mother 's life time of the daughters ' shares is null and void it being in point of fact giving up that which had no existence.
" In view of the clear exposition of the reason for the rule contained in the authorities relied upon by the Full Bench of the Madras High Court in Asa Beevi 's case (supra), we think that it described, by oversight, a rule based on the disability of a person to transfer what he has not got as a rule of prohibition enjoined by Mohamedan Law.
The use of the word "prohibited" by the Full Bench does not really bring out the object or character of the rule as explained above.
It may be mentioned here that Muslim Jurisprudence, where theology and moral concepts are found sometimes mingled with secular utilitarian legal principles, contains a very elaborate theory of acts which are good (because they proceed from 'hasna '), those which are bad (because, they exhibit "qubuh"), and those which are neutral per se.
It classifies them according to 'varying degrees of approval or disapproval attached to them (see Abdur Rahim 's "Muhammadan Jurisprudence" P. 105).
The renunciation of a supposed right, based upon an expectancy, could not, by any test found there, be considered "prohibited".
The binding force in 'future of such a renunciation would, even according to strict Muslim Jurisprudence, depend upon the attendant circumstances and the whole course of conduct of which it forms a part.
I In other words, the principle of an equitable estoppel, far from being opposed to any principle of Muslim law will be found, on investigation, to be completely in consonance with it.
(1) [1871] 17 W.R.P.C. 108 (2) [1827] 4 S.D.A. Rep. 210.
307 As already indicated, while the Madras view is based upon the erroneous assumption that a renunciation of a claim to inherit in future is in itself illegal or prohibited by Muslim law, the view of the Allahabad High Court, expressed by Suleman, C.J., in Latafat Hussain 's case (supra) while fully recognising that "under the Mahomedan law relinquishment by an heir who has no interest in the life time of his ancestor is invalid and void", correctly lays down that such an abandonment may, nevertheless, be part of a course of conduct which may create an estoppel against claiming the right at a time when the right of inheritance has accrued.
After considering several decisions, including the Full Bench of, the Madras High Court in Asa Beevi 's case (supra) Suleman, C.J., observed at page 575 : "The question of estoppel is really a question arising, under the Contract Act and the Evidence Act, and is not a question strictly arising under the Mahomedan Law.
" He pointed out (at page 575 576) "It has been held in this Court that contingent reversioners can enter into a contract for consideration which may be held binding on them in case they actually succeed to the, estate : See , and It was pointed out in , at PP.
876 7, that although a reversionary right cannot be the subject of a transfer, for such a transfer is prohibited by section 6, T.P. Act, there was.
nothing to prevent a re versioner from so acting as to estop himself by his own ,conduct from subsequently claiming a property to which he may succeed.
Among other cases reliance was placed on the pronouncement of their Lordships of the Privy Council in 40 All 487, where a reversioner was held bound by a compromise to which he was a party.
" Incidentally, we may observe that, in Mohammad Ali.
Khan vs Bisar Ali Khan,(1) the Oudh Chief Court has relied upon Hurmoot Ool Nisa Begum 'section case (supra) to hold that "according to Mahomedan Law there may be renunciation of the right to inheritance and such renunciation need not be express but may be implied from the ceasing or desisting from prosecuting a ,claim maintainable against another".
As we are clearly of opinion that there is nothing in law to bar the application of the principle of estoppel, contained in Section 115 of the Evidence Act, against the plaintiff and (1) A.I.R. 1928 Oudh 67.
308 Defendant No. 4, upon the totality of facts found by the final Court of facts, which were apparently accepted by the High Court,, it is not necessary for us to deal at length with the question whether the facts found could give rise to the inference of a "family settlement" in a technical sense.
It is true that in Latafat Hussain 's case (supra) Suleman, C.J., had observed that the conclusion of the Subordinate Court, that there had been an arrangement between a husband and a wife "in the nature of a family settlement which is binding on the plaintiff", was correct.
This was held upon circumstances which indicated that a husband would not have executed a deed of Wakf if the wife had not relinquished her claim, to inheritance.
In other words, an arrangement which may avoid future disputes in the family, even though it may not technically be a settlement or definition of actually disputed claims, was referred to broadly as a "family arrangement".
It was in this wide sense that in the case before us also, the first Appellate Court had considered the whole set of facts and circumstances examined by it to be sufficient to raise the inference of what it described as a "family settlement".
As our law relating to family arrangements is based on English law, we may refer here to a definition of a family arrangement in Halsbury 's Laws of England, (1) where we find: A family arrangement is an agreement between members of the same family intended to be generally and reasonably for the benefit of the family either by compromising doubtful or disputed rights or by preserving the family property or the peace and security of the family by avoiding litigation or by saving its honour.
We also find there : The agreement may be implied from a long course of ,dealing, 'but it is more usual to embody or to effectuate the against in a deed no which the term 'family arrangement ' is :applied.
" It is ,pointed out there : "Matters which would be fatal to the validity of similar transactions between strangers are not objections to the binding effect of family arrangements.
" As we have already indicated, it is enough for the decision of this case that the plaintiff and defendant No. 4 were estopped by their conduct, on an application of Section 115 Evidence Act, from claiming any Tight to inheritance which accrued to them, on their father 's death, covered by the deeds of relinquishment for consideration, irrespective of the question whether the, deeds could operate as legally valid and effective surrenders of their spes successionis.
Upon the facts and circumstances in (1) Halsbury 's Laws of England, 3rd.
17, p. 215,216.
309 the case found by the courts ,below we hold that the plaintiff and defendant No. 4 could not, when rights of inheritance vested in them at the time of their father 's death, claim, these as such a claim would be barred by estoppel.
The result is that we allow this appeal, set aside the judg ment and the decree of the High Court, and restore that of the first Appellate Court.
In the circumstances of this case, we order that the parties will bear their own costs.
K.B.N. Appeal allowed.

summary/full:
Muslim jurisprudence, where theology and moral concepts are found sometimes mingled with secular utilitarian legal principles, contains a very elaborate theory of acts which are good (because they proceed from haana), those which are bad (because they exhibit 'qubuh '), and those which are neutral per se.
It classifies them according to varying degrees of approval or disapproval attached to them.
The renunciation of a supposed right, based upon an expectancy, could not, by any test found there, be considered "prohibited".
The binding, force in future of such a ren uticiation would, even according to strict Muslim jurisprudence, depend upon the attendant circumstances and the whole course of conduct of which it forms a part.
In other words, the principle of equitable estoppel, far from being opposed to any principle of Muslim Law will he found, on investigation, to be completely in consonance with it.
[306 F] Abdul Rahim, Muhammedan Jurisprudence, P. 106, referred to.
K, a Muslim, had incurred debts so heavily that all his property would have been swallowed up to liquidate the debts.
The appellant and two of his brothers, with their labour and money, rescued the estate of their father and paid up the debts.
Two other sons of K who could not con tribute anything towards the clearing up of the debts of their father executed deeds acknowledging receipt of cash and moveable properties as consideration for not claiming any eights in future in the properties mentioned in the deeds.
On K 's death the two sons who had executed the deeds instituted a suit for partition of the properties mentioned in the deeds.
The first appellate court ,held that the deeds in question evidenced family settlements and that the sons were estopped from claiming their share in the inheritance.
The High Court in second appeal, decreed the suit.
It proceeded on the assumption that, if law had not prohibited the transfer of his right of inheritance by a muslim heir, an estoppel would have operated against the respondent on the findings given and held that the rule of Muslim Personal law on the subject had the same effect as Section 6 (a).
of the Transfer of Property Act and the chance of a Mahomedan heir apparent succeeding to an estate could not be the subject of a valid transfer of lease.
In coming to this conclusion, the High Court relied on the decision of the Madras High Court in Abdul Kafoor vs Abdul Razack (A.I.R. in preference to the view adopted by the Allahabad High Court in Latafat Hussain vs Bidayat Hussain (A.I.R. 1936 All.
573.) Allowing the appeal and setting aside the judgment and decree of the High Court, HELD: Upon the facts and circumstance in the case found by the courts below, the two sons could not, when rights of inheritance vested 301 in them at the time of, their father 's death, claim these rights as such a claim would be barred by estoppel.
The object of the rule of Mahomedan law which does not recognise a purported transfer, of a spes successionis as a legally valid transfer at all, is not to prohibit anything but only to make it clear what is and what is not a transferable right or interest in property just as this is what Section 6(a) of the Transfer of Property Act is meant to do.
Its purpose could not be to protect those who, receive consideration for what they do not immediately have so as to be able to transfer it at all.
It is not possible to concur with the view of the Madras High Court in Abdul Kafoor 's case that a renunciation of an expectancy, as a purported but legally ineffective transfer, is struck by section 23 of the Indian Contract Act.
As it would be void as a transfer at all there was no need to rely on section 23 of the Contract Act, If there was no "transfer" of property at all, which was the correct position, but a simple contract which could only operate in future, it was certainly not intended to bring about an immediate transfer which was all that the rule of muslim law invalidated.
The real question is whether, quite apart from any transfer or contract, the declarations in the deeds of purported relinquishment and receipt of valuable consideration could not be parts of a course of conduct over a number of years which, taken as a whole, created a bar against a successful assertion of a right to property when that right actually, came into being.
An equitable estoppel operates, if its elements are established as a rule of evidence preventing the assertions of rights which may otherwise exist.
[304 D] While the Madras view is based upon the erroneous assumption that a renunciation of a claim to inherit in future is in itself, illegal or prohibited by Muslim law, the View of the Allahabad High Court in Latafat Hussain 's case, while fully recognising that "under the Mohammedan law relinquishment by an heir who has no interest in the life time of his ancestor is invalid and void", correctly lays down that such an aban donment may nevertheless, be part of a course of conduct which may create an estoppel against claiming the right at a time when the right of inheritance has accrued.
Latafat Hussain vs Bidayat Hussain, A.I.R. 1936 All. 573, approved.
View contra in Abdul Kafoor vs Abdul Ratack, A.I.R. 1959 Mad.131 and Asa Beevi vs Karuppan, (1918) 41 Madras I.L.R. 365, disapproved.
Ameer Ali 's Mahomedan Law, Vol.
11, Hurmoot Ool Nisa Begum vs Allahdis Khan, (1871) 17 W.R.P.C. 108 and Mohammad Ali Khan vs Nisar Ali Khan, A.I.R. 1928 Oudh 67, referred to.
(Since the Court was of opinion, that there was nothing in law to bar the application of the principle of estoppel contained in section 115 of the Evidence Act upon the totality of facts found by the final court of facts, it was found unnecessary to deal with at length with the question whether the facts found could give rise to an inference of a "family settlement" in a technical sense.)


judgement:
Appeal No. 1734 of 1967.
Appeal by Special Leave from the Award dated the May 19, 1967 of the Industrial Tribunal (1) at Allahabad in Adjudication Case No. 15 of 1960.
section V. Gupte, D. N. Mukherjee and Gautam Banerjee, for the appellant.
G. C. Bhattacharyaand M. V. Goswami, for respondents Nos. 1 and 3 to 8.
O. P. Rana, for respondent No. 9.
The Judgment of the Court was delivered by Grover, J.
This is an appeal by special leave from an award of the Industrial Tribunal, Allahabad, dated May 19, 1967.
757 The material facts May be stated, The appellant, which is a limited liability company and which later on went into voluntary liquidation, was carrying on the business or undertaking of generation, distribution and supply of electricity.
One of such undertakings was the Electric Supply Undertaking at Allahabad in the State of Uttar Pradesh.
Its affairs and business were being% looked after and managed by Martin Bum & Co. I Ad., Calcutta.
Some of the appellant 's workmen in Allahabad and its surrounding area were members of Bijli Mazdoor Sangh a trade union registered under the Indian Trade Union Act, 1926.
The U.P. State Electricity Board compulsorily acquired and took over the assets of the appellant 's aforesaid undertaking or business with effect from 16/17th September 1964.
In accordance with the provisions of the , hereinafter called the 'Act and the U.P. Industrial Employment (Standing Orders) Rules 1946 the appellant submitted draft Standing Orders defining the conditions of employment of its employees.
On July 14, 1951 these Orders 'were certified by the Certifying Officer.
Clause 32 of the Standing Orders was in the following terms : "32.
RETIREMENT An employee who has served 30 years or who has reached the age of 55 will be retired, but exemption to this may be granted by the Company in special cases".
The workmen through the Bijli Mazdoor Sangh preferred an appeal under section 6 of the Act from the order of (the Certifying Officer to the State Industrial Tribunal which was the.
appellate authority under the Act.
That appeal, however,, was dismissed.
The Agra Electric Supply Co. Ltd., Agra and Benaras Electric Light & Power Co. Ltd., Varanasi, which is the appellant in the connected appeal (C.A. 164/68) also got certified Standing Orders in similar terms.
These electric undertakings, were also under the management of Martin Burn & Co. Ltd. On July 16, 1959 notices were served on seven worlen with effect from September 1, 1959 on the ground that they had attained the age of superannuation or completed 30 years of service and they were retired by reason of their having attained the age of superannuation.
Out of these workmen one of them Haider Ali died during the pendency of proceedings.
The other six employees have been impleaded as respondents Nos. 1 to 6 in the present appeal.
According to the appellant these, respondents accepted all the accumulations due to them in respect of Provident Fund contributions made by the appellant in respect of them and by themselves and were also paid gratuities credited to them in their res 758 pective Provident Fund accounts for their services prior to their becoming members of the Provident Fund.
By an order dated February 22, 1960 made under section 4 K of the U.P. Industrial Disputes Act 1946 the Government of U.P. referred to the Industrial Tribunal (1) at Allahabad for adjudication an industrial dispute alleged to exist between the appellant and its workmen on the following issues : "Whether the employers have wrongfully arid/or unjustifiably retired their workmen, mentioned in the Annexure, with effect from 1st August, 1959 ? If so, to what relief are the workmen entitled ?" Respondents 1 to 6 and Haidcr Ali (since deceased) were the workmen mentioned in the Annexute.
The case of the workmen before the Industrial Tribunal was that they had entered service of the appellant prior to the certification of the Standing Orders.
At the time of their appointment there was no condition that they would be liable to retirement after attaining any prescribed age or after putting in any fixed period of service.
A practice was in vogue that the workmen would continue in service till he was physically fit.
Accordingly clause 32 of the certified Standing Orders was neither binding nor enforceable.
The Industrial Tribunal made an award on May 2, 1960 finding, interalia, (a) the employers were within their rights in retiring, the workmen concerned.
(b) The act of the employers in compulsorily retiring the concerned workmen, from service could not be characterised as wrongful, illegal or unjustified and (c) the workmen were entitled to no relief.
On June 14, 1960 the Bijli Mazdoor Sangh moved an appli cation under section 10(2) of the Act for amendment and modifica tion of clause 32 claiming fixation of retirement age at 60 years.
On September 20, 1960 the Union also filed a writ petition in the Allahabad High Court for quashing the award.
On April 22, 1961 the Certifying Officer modified clause 32 and fixed the ago, of retirement at 58 years.
On September 10, 1961 the appellate authority refixed the age of retirement at 55 years.
Similarly appeals were filed by the Agra Electric Co. and the Banaras Electric Light and Power Co. Ltd. in which similar orders were made.
On July 12, 1966 the, High Court recorded an order quashing the award.
It was held that Standing Order 32 was not applicable to the employees Who had entered service before the certification of the Standing Orders.
The Industrial Tribunal was directed to reheat the case and after giving an opportunity to the parties of being heard give an award in accordance with law.
Finally the award against which the appeal has been brought 759 was given on May 19, 1967.
It was held in the award that all the seven workmen had been wrongfully and unjustifiably retired and that they should be deemed to have continued in service till September 16, 1964 from which date they would be taken to Wave been retrenched.
The appellant having been taken over by the U.P. State Electricity Board, it was directed that the employers should pay full wages from the period August 1, 1959 to September 16, 1964 and retrenchment compensation within section 25 F read with section 25 FF and section 25 J of the .
While deciding the writ petition the High Court relied on three decisions of this Court for holding that where there is no age of superannuation prescribed for the employees of a concern a provision in the Standing Orders certified subsequent to the date of employment regarding compulsory retirement will not be applicable to them.
The first decision is in Guest Keen, Williams Private Ltd. vs P. J. Sterling & Others(1).
In that case after the enforcement of the Act the industrial concern submitted its draft Standing Orders for certification to the Certifying Officer.
That Officer certified the Standing Orders after giving the trade union of workmen an opportunity to be heard and after considering their objections.
The Standing Orders relating to retirement provided that the workmen shall retire from the service of the company on reaching the age of 55 years.
The company gave notice to forty seven of its workmen who were over the age of 55 years retiring them and a dispute was raised about their retirement which was referred to the Tribunal for adjudication It was ultimately held, by the Labour Appellate Tribunal that those workmen who were in employment prior to the date of certification of the Standing Orders would not be governed by it and their retirement was illegal.
This Court examined the scheme of the Act including the relevant provisions.
Notice wag taken, in particular, of the fact that when the standing Orders were submitted to the Certifving Officer all that he could do was to satisfy himself that they made provision for other matters set out in the schedule to the Act and that they were otherwise in conformity With its provisions.
Under section 4, as it was orignally enacted the Certifying Officer could not adjudicate upon the fairness or reasonableness of the provisions of the Standing Orders.
This section was subsequently amended in 1956 and the effect of the amendment was that the Certifying Officer was enabled to adjudicate upon the fairness or reasonableness of the provisions of the Standing Orders.
It was pointed out by the court that the scope for enquiry before the Certifying Officer prior to the amendment of section 4 was extremely limited.
The only way in which the employees could claim modification of the standing Orders prior to the amendment of section 4 was by raising an industrial dispute in that (1) ; 760 behalf.
Subsequent to the amendment the employees could raise the same dispute before the Certifying Officer and in a proper case they could apply for its modification under section 10(2) of the Act.
It was observed that the Standing Orders certified under the Act became part of the terms of the employment by operation of section 7 but if an industrial dispute arose in respect of such Orders and it was referred to the Tribunal by the appropriate Government the Tribunal had the jurisdiction to deal with it on the merits.
It was, therefore, held that the Tribunal had to consider not only the propriety, reasonableness and fairness of the rule but it had also to deal with the question as to whether the said rule could and should be made applicable to employees who had already been employed without any limit as to age of retirement.
The decision in this case was followed in Workmen of Kettlewell Bullen & Co. Ltd. vs Kettlewell Bullen & Co. Ltd.(1).
The next case in which a similar question arose in Salem Erode Electricity Distribution Co. Ltd. vs Salem Erode Electricity Distribution Co. Ltd. Employees Union(2).
It was claimed by the company which was the employer there that the urgent need for increased production and supply of electrical energy could be met if the existing rules embodied in two of its certified Standing Orders relating to holidays and leave were suitably amended.
The amendments proposed 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.
Both the Certifying Officer and the appellate authority disallowed the amendments.
The company appealed, to this Court and the scheme of the Act was examined once again.
It was emphasised that after the amendment of section 4 of the Act made in 1956 jurisdiction had been conferred on the Certifying Officer as well as the appellate authority to adjudicate upon the fairness or easonableness of the provisions of the Standing Orders.
Thus the jurisdiction had been widened.
Moreover under section 10(2) as originally enacted it was only the employer who could make an application to the Certifying Officer to I have the Standing Orders modified.
By the amendment made in 1956 even workmen were enabled to exercise that right.
Addressing itself to the question whether it was permissible for an industrial establishment to have two sets of Standing Orders to govern the relevant terms and conditions of its employees it was laid down after an examination of the scheme of the relevant provisions of the Act in the light of the matters specified in the Schedule that there was no scope for having separate Standing Orders in respect of any one of them, It was said ". . the conclusion appears to be irresistible that the object of the Act is to certify Standing Orders in (1) (2) ; 761 respect of all 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".
It was considered that Guest Keen Williams Pvt.
Ltd.(1) could afford no asistance because that matter came to this Court from an industrial dispute which was the subject matter of industrial adjudication and all that this Court did was to fixed the age of superannuation for workmen who had been employed prior to the date of the certification of the relevant Standing Orders.
That course was adopted in the special and unusual circumstances of that case.
In the next decision Agra Electric Supply Co. Ltd. vs Sri Alladin & Ors.(2) one of the main questions was whether three workmen who had been employed long before 1951 when the cornpany 's Standing Orders were certified could be retired under Standing Orderwhich prescribed the age of superannuation as 55 years.
ThisCourt took a view which seemingly runs counter to Guest KeenWilliams Pvt.
Ltd.(1).
It was held that the Standing Orders when certified would be binding on the employers as well as all the workmen who were in employment at the time the Standing Orders came into force and those employed thereafter as uniform conditions of service.
The process of reasoning which prevailed was (1) the Act is a beneficient piece of legislation, its object being to require employers in industrial establishments to define with sufficient precision the condtions of employment of workmen employed therein and to make them known to such workman.
(2) Before the passing, of the Act there was nothing in law to prevent an employer having different con tracts of employment with workmen which led to confusion and made possible discriminatory treatment.
This was also clearly incompatible with the principles of collective bargaining.
(3) Section 3 of the Act was enacted to do away with such diversity and bargaining with each individual workman.
(4) Section 4 indicates that particulars of workmen in the employment on the date of the submission of the draft Standing Orders or certification and not of those only who could be employed in future after certification were to be given.
(5) Sections 4 and 5 show that draft orders are certifiable if they provide for all matters set out in the schedule and are otherwise in conformity with the Act and if they are adjudicated as fair and reasonable by the Certifying Officer or the appellate authority.
The Certifying Officer has also to forward a copy of the draft Standing Orders to the Union (1) ; (2) ; 762 or to the workmen in the prescribed manner and has to decide whether or not any modification or addition should be made after hearing the, Union or the, workmen concerned.
Sections 6, 7, 9 and 10 contain provisions for appeal by aggrieved persons as also for sending of authenticated copies by the Certifying Officer to the parties where no appeal is filed and further the employer has to post the Standing Orders as finally certified in the manner prescribed.
The employer or the workmen can even apply for modification after expiry of six months from the date on which the Standing Orders or the last modification thereof comes into operation.
(7) The schedule, sets out the matters which the Standing Orders must provide for.
For the reasons given above this Court held that the Act was meant to enable Standing Orders to be made to bind not only those who were employed subsequent to their certification but also those who were already in employment.
If any other result were to follow there would be different conditions of employment for different classes of workmen which would render the conditions of their service as indefinite and diversified as befoe the ,enactment of the Act.
Support was derived from the decision in Salem Erode Electricity Distribution case(1) in which departure was made from the view previously taken in the case of Guest Keen William,s Pvt.
Ltd.(2) It has been urged before us on behalf of the respondents that the decision in Guest Keen Williams Pvt.
Ltd. (2) still holds the field and the point which was decided there and which arises in the present case did not come up for consideration in Salem Erode Electricity Distribution Co. Ltd.(1).
In our opinion the principle applied in the latter case is fully supported by the scheme of the Act and was rightly extended and applied 'in Agra Electric Supply Co. Ltd. (3).
We concur with the view expressed therein that it was not intended by the legislature that different sets of conditions should apply to employees depending on whether a workman was employed before the Standing Orders were certified or after, which would defeat the very object of the legislation.
In the preamble it is stated in categorical terms "whereas it is expedient to require employers in industrial establishments to define with sufficient precision the conditions of employment under them and to make the said conditions known to workmen employed by them".
Not only the object but the scheme of the Act is such that the employers must define precisely the ponditions of employment of all the employees and have the same certified by the Certifying Officer against whose orders an appeal lies to the appellate authority.
The, right given to workmen to express their (1) ; (3) ; (2) ; 763 view and to raise objections is of great significance.
They can even ask for modification of the Standing Orders in accordance with section 10 of the Act.
Every possible safeguard has been provided for keeping the workmen informed about their conditions of service so that they can take whatever steps they desire or are advised to take in their interest before the Certifying Officer or the appellate authority.
It is also very difficult to conceive, taking each individual item in the schedule how there can be different conditions for different employees depending upon the point of time when they came to be employed; for instance item 3 relates to shift working.
It is possible to suggest that for the same kind of work employees who were in employment before the Standing Orders were certified would have different hours of shift from the other employees who were employed subsequently.
In the very nature of things a great deal of irritation and annoyance between employees inter se would result if any such discrimination is made in any of the items in the schedule.
It has been rightly pointed out in Agra Electric Supply Co. Ltd. that this would only lead to industrial unrest and not industrial peace, the latter being the principal object of legislation.
It must be remembered that in Guest Keen Williams Pvt.
Ltd. the Certifying Officer could not go into the reasonableness or fairness of the Standing Orders according to section 4 of the Act as it stood at the material time.
The law was changed only in 1956.
Perhaps that was one of the main reasons which prompted the court in taking the view it did.
But after the amendment of the law in 1956 the Certifying Officer and the appellate authority are duty bound to examine the question of fairness of the Standing Orders and there can be no justification now not to give, effect to the principle of uniformity of conditions of service which is clearly conte mplated by the provisions of the, Act.
The next question for determination is whether clause 32 of the Standing Orders relating to age of retirement could be certifled in July 1951.
On behalf of the respondents it has been pointed out that there is no item in the schedule which covers the case of retirement or superannuation.
Items 8 and 9 are in these terms "8.
Termination of employment and the notice thereof to be given by employer and workmen, 9.
Suspension or dismissal for misconduct, and acts or omissions which constitute misconduct.
" The model Standing Orders framed by the Central Government and by the Government of the State of Uttar Pradesh did not contain any clause relating to retirement or superannuation.
It was for the first time that on November 17,1959 item 11 C 764 relating to superannuation and retirement was introduced by the State of U.P. in exercise of the rule making powers conferred by section 15 of the Act.
In other States the item relating to age of retirement or superannuation was introduced either by legislation or by the exercise of rule making power.
In the State of Bombay section 19 of the Industrial Employment (Standing Orders) (Bombay Amendment) Act 1957 provided for insertion of item 10 A in the Schdule which was "age for retirement or superannuation".
According to counsel for the respondents there was no item until the introduction of item 11 C in November 1959 in the schedule under which any Standing Orders could be framed and got certified relating to the age of retirement and superannuation.
It has been maintained that items 8 and 9 cannot possibly include retirement and superannuation and therefore till item 11 C was added in the schedule so far as the State of U.P. was concerned in November 1959 no Standing Orders could be legally or validly framed and certified providing for age of retirement and superannuation.
In Saroj Kumar Ghosh vs Orissa State Electricity Board(1) the Orissa High Court considered this question a some length and expressed the view that where a Standing Order has been certified by the Certifying Officer containing a clause relating to superannuation not covered by the schedule of the Act norr by the model Standing Orders such certification cannot be valid under section 4 of the Act.
The clause 'termination of employment ' in item 8 of the schedule cannot be equated with the word "superannuation".
According to the Orissa High Court, superannuation is an event which comes more or less in an automatic process.
An age is fixed on the reaching of which the holder of office has no option but to go out of office.
There is no volition involved in that act.
The employer and the employee have notice of the matter long before the event is to occur and the event is such that it cannot be arrested by either one of them if the rule is to be followed.
On the other hand termination is a positive act by which one party even against the desire of the other can bring about the end of employment.
The judgment of the learned single.
judge in Management of the "HINDU", Madras vs Secretary Hindu Office & National Press Employees Union and another(2) was dissented from.
In that case the expression "termination of employment" in item 8 was considered to be wide enough to include retirement of an employee at the age of superannuation.
The learned Madras Judge sought support from para 16 of the model Standing Orders which is as follows "Every permanent workman shall be entitled to a service certificate at the time of his dismissal discharge ' or retirement from service".
, (1) A.I.R. 1970 Orissa 126.
(2) 765 In the model Standing Orders there was no clause providing for superannuation or retirement on attaining a certain age.
In our judgment much assistance or help cannot be derived from para 16 of the model Standing Orders as contained in schedule 1 to the Industrial Employment (Standing Orders) Central Rules 1946.
Retirement which is mentioned there may be under the terms of contract of employment entered into between the employer and the employees.
Section 2(oo) of (the throws a certain amount of light on the matter.
It is reproduced below :, "Retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include (a) voluntary retirement of the workman; or (b) retirement of the workman on reaching the age of, superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf;" It shows, firstly, that termination 'of service of a workman is distinct from retirement on reaching the age of superannuation; secondly, retirement can take place on resch & the age of superannuation under the terms of the contract of employment entered into between the employer and the workman.
Therefore, the word "retirement" in para 16 cannot be regarded as conclusive of the question whether termination of: employment includes retirement and superannuation.
In the schedule to the Act item 8 covers termination of employment and the notice to be given either by the employer or the workman and item 9 relates to sus pension or dismissal for misconduct etc.
Item 8 by virtue of the language employed does not appear to cover the case of superannution which does not depend on any notice and which covers an event which is automatic and which must be given effect to without any volition on the part of the employer or the workmen as pointed out in the Orissa judgment.
If termination is to be read in a wide sense as meaning employment coming to an end there was a necessity to have item 9 because dismissal would then be covered by termination.
In the context in which the word ",termination" is used in item 8 it cannot mean each and every form of termination or cessation of employment.
From para 13 of the Model Slanding Orders contained in schedule 1 to the Industrial Emtployment (Standing Orders) Central Rules 1946, it is apparent that item 8 is confined to termination of employment by notice in writing and does not contain any mention L1061 Sup.
CI/72 766 of superannuation or retirement.
It was perhaps this difficulty which prompted the state or U.P. to introduce item 11 C in exercise of the rule making powers conferred by section 15 of the Act and the bombay legislature to make similar amendment by legislation.
it would follow that unless an employer can include a clause relating to the age of retirement and superannuation and the Certifying Officer can certify it even though no such item appears in the schedule to ,the Act clause 32 as certified in 1951, in the present case, could not be regarded to be valid.
The Madras High Court in the case of Management of the 'Hindu ', Madras(1) made some observations to the effect that there was no bar to the Standing Orders making a provision for matters other than those specifically mentioned in the schedule so long as ,the Certifying Officer certifies them on he ground that they are fair and reasonable.
The Orissa High Court, however, in Sarojkumar Ghosh 's(2) case did not subscribe to this view.
Learned counsel for the appellant, apart from relying on the Madras decision, has not addressed any arguments on the larger and wider question as to whether even in the absence of any item in the schedule Standing Orders can be framed on certain matters which may be regarded as fair and reasonable and which may be so certified by the Certifying Officer.
it is, however, unnecessary to decide this point in the present case because clause 32 of the Standing Orders on which the appellant has relied was certified in July 1951 when according to the express language of section 4 of the Act the Certifying Officer or the appellate authority was debareed from adjudicating upon the fairness or, reasonableness of the provisions of any Standing Orders.
It is difficult to understand how the Certifying Officer at that point of time and before the amendment of section 4 in 1956 could have possibly certified ;my Standing Order which did not relate to any item in the schedule on the ground that it was fair or reasonable Indeed the function of the Certifying Officer, before the amendment of 1956, was very limited as is clear from section 3 (2) of the Act which says : "Provision shall be made in such draft for every matter set out in this schedule which may be applicable to the industrial establishment and were model Standing Orders have been prescribed, shall be, so far is practicable, in conformity with such model".
We must, therefore, hold that, clause 32 of the Standing Orders as certified in July 1951 was not valid and cannot be binding on the respondents.
However, after item 11 C was introduced in the schedule so far as the State of U.P. was concerned an item was added providing for the age of retirement and superannuation.
The Certifying Officer, when lie modified clause 32 and (1) (2) AIR 1970 Orrissa 126.
767 fixed the,:retiring age at 58 on April 22, 1961 could have validly certified such clause as modified by him.
The necessary consequence will be that the respondents could not have been relied 'on the ground of superannuation in July 1959 and they could be validly retired only on or after April 22, 1961 in accordance ,with clause 32 as modified by the Certifying Officer.
In other words, those out of the present respondent who had attained the age of 58 years on April 22, 1961, could be regarded as having been validly retired having reached the age of superannuation on that date under that clause.
In view of the previous decisions of this Court and in particulaw that of Guest Keen Williams Pvt.
Ltd.(1) it has not been disputed that in the industrial dispute which was referred it was open ' 'to the Industrial Tribunal or the Labour Court to determine the age of retirement or superannuation notwithstanding that clause 32 of the Standing Orders as certified in 1961 had been legally ,And validly certified indeed in Guest keen Williams Pvt.
Ltd.(1) It was not disputed that even this.
Court could give an appropriate direction which might 'be considered reasonable with regard to 'the age of superannuartion as stated before according to clause 32 of 'the Standing Orders, as certified in April 1961, the age of superannuation was fixed at 58.
The appellant 'filed an appears that in the cage of Agra Electric Supply Co.(2) also a appears that in the case of Agra Electric supply Co.(4) also a similar Standing order had been certified and on appeal the age of retirement was reduced from 58 to 55 years by the appellate 'authority.
This Court in that case held the Standing Order fixing the age at 55 years applicable not only to those employees who were employed subsequently but also to all workmen who were in employment at the time when the 'Standing Orders became legally applicable.
It does not appear in that case that any such argument was raised that the matter should be remitted either to the Industrial Tribunal or the Labour Court to fix the age of superannuation or that this Court itself might do so as was the course followed in the case of Guest keen Williams Pvt.
Ltd.(1) in which the age was fixed at 60 years with regard to those employees who had raised the dispute on the ground that the Sanding Orders could not govern them as they had been employed before the Standing Orders became applicable.
After considering the entire material and keeping in mind the fact that according to the appellate authority even the age of retirement at 55 was fair and reasonable we are of the view that the age of superannuation of the respondents, in the present case, should be 58 years.
In other words.
it will be the same as was fixed by the Certifying Officer by modifying clause 32 on April 22, 1961.
(1) ; (2) ; 768 Lastly we must deal with the contention raised on behalf of the respondents that the order of the Allahabad High Court made on July 12, 1966 quashing the award after following the decision of this Court in Guest Keen Williams Pvt.
Ltd.(1) should be deemed to be final and should debar any fresh consideration or decision of that point by virtue of the rule or principle of res judicata.
It is noteworthy that the order of the Allahabad High Court was not final against which the matter could have, been taken in appeal either to a division bench of the High Court or to this Court.
Reliance has been placed on a decision of this Court in Management of Northern Railway Cooperative Society Ltd. vs Industrial Tribunal Rajasthan, Jaipur and Another(2), where reference had been made by the State Government to the Industrial Tribunal on the Railway Workers ' Union having raised an industrial dispute against the Management of the Northern Railway Cooperative Society Ltd. The society filed a writ petition on the ground that the dispute having been raised by the Railway Workers ' Union and not by the Society 's own employees the reference to the Tribunal was not competent.
The High Court dismissed the petition.
thereafter the Tribunal heard the matter and gave its deci sion in favour of the workman concerned.
The society appealed to this Court by special leave.
It was held that the order of the High Court was not interlocutory but was a final order in regard to the proceedings under article 226.
The appropriate remedy for the appellant in that case was to appeal against the High Court 's order and that not having been done the appellant 's plea relating to the competency of the reference was barred by res judicata as the same had been raised before the High Court and had been rejected.
The present case is clearly distinguishable inasmuch as the order made by the High Court was not final and a remand had been directed presumably under article 227 of the Constitution.
That order in fact did not finally terminate any proceedings at all.
The proceedings were terminated only by the award against which the present appeal has been brought by special leave.
We are unable to see how the decision in the aforesaid case can afford any assistance to the respondents before us.
Indeed the case which is more apposite in Satyadhyan Ghosal & Ors.
vs Smt.
Deorajin Debi & Another ( 3 ) .
There an order of remand had been made by the High Court while exercising powers under section 115 of the Code of Civil Procedure.
It was observed, after referring to the various decisions of the Privy Council, that the order of remand was interlocutory and did not pumort to dispose of the case.
A party is not bound to appeal against every interlocutory order which is a step in the procedure that leads up to a final decision or award.
(1) ; (3) ; (2) ; 769 The following observations from this case may be reproduced with advantage "Interlocutory judgments which have the force of a decree must be distinguished from other interlocutory judgments which are a step towards the decision of the dispute between parties by way of a decree or a final order".
We are unable, therefore, to accede to the contention that the rule of res judicata could be invoked by the, respondent in the present case.
In the result the appeal is allowed and the order of the Industrial Tribunal is hereby set aside.
According to our decision the workmen concerned could not have been retired on the ground of superannuation in accordance with clause 32 of the Standing Orders till it was certified after necessary modification on April 22, 1961.
Even otherwise it has been held by us that the proper age of retirement in ,he case of those employees who joined service prior to April 22, 1961 should be 58 years.
The award, therefore, will be that the concerned workmen should be deemed to have continued in service of the appellant till they had at attained the age of 58 years.
It is declared that they shall be entitled to be paid full wages and all other dues to which they are entitled under ,the terms of their employment till they attained the age of 58 years.
As regards any payments received by the workmen pursuant to the award or after the notice of termination those shall also be adjusted accordingly and the appellant undertakes not to claim_refund of any amounts which have already between received by them in excess of the amounts due.
No order as to costs.
V.P.S. Appeal allowed.

dataset_name: IN-Abs

summary/full:
In accordance with the provisions of the , and the U.P. Industrial Employment (Standing Orders) Rules, 1946, the appellant substituted draft standing defining the conditions of employment of its employees and they were certified bythe Certifying Officer in 1951.
Clause 32 of the Standing Orders provided that an employee who has served 30 years or who has reached the age of 55 years will be retired, but, exemption from this may be granted by the company in special case.
In 1959, notices were served on the respondent workmen that they were retired by reason of their having attained the age of superannuation as per cl. 32.
The workmen contended that the clause was not binding or enforceable as far as they were concerned, because, they had entered the service of the appellant prior to the certification of the Standing Orders and there was no condition that they would be liable to retirement after attaining any prescribed age or any fixed period of service, and that they were entitled to continue in service as long as they were physically.
The industrial dispute was referred to the Industrial Tribunal and the Tribunal held in favour of the appellant.
The respondents filed a writ petition in the High Court They also applied in 1960, under s ' 10(2) of the , for amendment and motification of cl. 32 claiming fixation of retirement age at 60.
The Certifying Officer modified the clause and fixed the age of retirement at 58, but the appellate authority refixed it at 55.
The High Court, in the writ petition, on the basis of the decision or this Court in Guest Keen Williams Pvt. Ltd.; , her that Cl.
32 was not applicable to the employees and directed the Tribunal to rehear the case.
The Tribunal thereafter held that the respondent.
workmen were wrongfully and unjustifiably retired.
In appeal to this Court, HELD : (1) It was not intended by the Legislature that different sets of conditions should apply to employees depending on whether workman was employed before the Standing Orders were certified by after, as that would defeat the object of the legislation.
The objection and 755 scheme of the Act is that the employers must define precisely the conditions of employment of all the employees and have them certified by the Certifying Officer.
The right given to be workmen to express their views, to raise objections, to appeal to the appellate authority and to ask for modification of the Standing Orders under section 10 of the Act, show that every possible safeguard has provided in the interests of the workmen.
Moreover, the individual items in the Schedule to the Act show that there cannot be different conditions for different employees depending upon the point of time when they came to be employed, for that would result in a great deal of heart burning between the employees inter se.
[762 F H; 763 A D] Salem Erode Electricity Distribution Co. Ltd. vs Its Workers; ; , and Agra Electric Supply Co. Ltd., vs Sri Alladin & Ors. ; , followed.
(2) The decision in Guest Keen Williams Pvt.
Ltd. that the Industrial Tribunal had to consider not only the propriety, reasonableness and fairness of a Standing Order but that it had also to deal with the question as to whether a particular Standing Order could be made applicable to employees who had already been employed without any limit as to age of retirement was delivered under the unamended section 4 of the Act, under which the Certifying Officer or the appellate authority could not go into the reasonableness or fairness of the Standing Orders.
But after the amendment of the section in 1956, the Certifying Officer and the appellate authority are bound to examine the question of fairness of the standing orders, and therefore, there can be no justification now for not giving effect to the principle of uniformity of conditions of service which is clearly contemplated by the provisions of the Act.
[763 D F] (3) But cl. 32 of the Standing Orders as certified in 1951 was not valid and could not be binding on the respondents, because, there was then 'no item in the Schedule to the Act covering cases of superannuation or retiretirement, with respect to which Standing Orders could be made.
[766 E F, G H] Item 8 and 9 of the Schedule deal with the termination of employment and notice thereof, and suspension or dismissal for misconduct.
The language of item 8 shows that it does not cover the case of superannuation, which does not depend on )any notice and which covers an event which is automatic and which must be given effect to without any volition on the Part of the employer or workmen.
If termination is to be read in a wide sense as meaning 'employment coming to an end ' there was no necessity to have item 3, because, dismissal would then be covered by termination.
From the paragraph 13 of the Model Standing Orders contained in the Schedule to Rules it is apparent that item 8 is confined to termination of employment by notice in writing and 'does not refer to superannuation or retirement.
It was only in 959 that item 11(C) was introduced in the Schedule enabling the framing of Standing Orders in relation to the age of retirement and superannuation.
[765 F H; 766 A C] Saroj Kumar vs Orissa State Electricity Board, A.I.R. 1970 Orissa, 126, approved.
Management of the Windu ' vs Secretary Hindu Office & National Press Employees Union, , disapproved.
(4) No assistance can be derived by the use of the word 'retirement ' in para, 16 of the Model Standing Orders, because, it may well refer to 756 retirement under the terms of the contract of employment entered into between the employer and the employees.
[765 A B, E] (5) Since before the amendment of section 4 the Certifying Officer and the appellate auhority were debarred from adjudicating upon, the fairness or reasonableness of the Standing Orders, the Certifying Officer at that time, could not certify any Standing Order on the ground that it was reasonable or fair.
Therefore, in 1951, when the Standing Orders were certified, cl. 32 could not have been framed because there was no item in the Schedule relating to superannuation and the Certifying Officer could not certify it on the ground it was fair and reasonable because he bad no power to do so.
[766 D F] (6) The Certifying Officer, however, when be modified cl. 32 and fixed the retirement age at 58 (after section 4 was amended) could have validly certified such clause as modified by him.
This Court could also give an appropriate direction with regard to fixing the age of superan , nuation.
In the circumstances of this case the age of superannuation should be 58 years.
Therefore, the concerned workman should be deemed to have continued in service of the appellant till they had attained the age of 58 years.
[767 A C, G H] (7) The order of the High Court in the writ petition did not finally termingte the proceedings at all.
The proceedings were terminated only by the award of the Industrial Tribunal after remand.
Therefore, the order of the High Court following Guest Keen William 's case did not debar a fresh consideration of the question by virtue of the rule or principle of res judicata.
[768 A B, E F] Satyadhyan Ghosal vs Smt.
Deorajan Devi, [1960] 3 S.C.R. 590, followed.
Management, of N. Railway Co operative Society vs Industrial Tribunal, ; , explained.


judgement:
Appeal No. 2016 of 1969.
Appeal by Special Leave from the judgment and order dated April 27, 1967 of the Madras High Court in Tax Case No. 75 of 1963.
section C. Manchanda, B. D. Sharma and R. N. Sachthey, for the appellant.
M. C. Chagla, Janendra Lal and B. R. Agarwala, for the respondent.
The Judgment of the Court was delivered by Hegde, J.
This appeal by special leave arises from a decision of the Madras High Court in a reference under section 66 (1) of the Indian Income Tax, 1922 (to be hereinafter referred to as the Act).
As demanded by the assessee the Tribunal submitted the statement of the case to the High Court seeking its opinion on the question "whether on the facts and in the circumstances of the case, the loss of Rs. 1,93.750/ was an allowable deduction under section 10 of the Income tax Act?" 461 Material facts are these The assessee respondent was a member of a Hindu undivided family which carried on money lending business in India and abroad.
In the course of such money lending business, properties were taken over in settlement of debts as and when occasion arose.
The family was disrupted on March 28, 1939.
The assessee received some shares in some companies, properties and gardens and certain other items in Malaya.
Even after the partition the assesses continued the money lending business in Malaya.
During the war, in general with others, the assessee suffered damages to these properties on account of Japanese bombing.
This loss occurred on account of bombing in December, 1941, a date falling within the accounting period ending on April 12, 1942, relevant for the assessment year 1942 43.
This loss was claimed as a business loss.
The Income Tax Officer rejected that claim.
The Appellate Assistant Commissioner affirmed the order of the Income Tax Officer .
The assessee did not succeed before the Tribunal as well.
The Tribunal rejected the claim of the assessee on the sole ground that bombing, which caused the loss, was not incidental to the business of the assessee.
The Tribunal held that the loss in question was a loss of stock in trade.
That finding of the Tribunal has not been challenged.
Hence we have to proceed on the basis that the loss caused to the assessee was a loss of stock in trade.
It was contended on behalf of the department that the loss in question cannot be given deduction to, as a business loss, in computing the net income of the assessee under section 10(1).
According to the department that was not a loss incidental to the business carried on by the assessee.
We are unable to appreciate the contention of the department.
It is established that the assessee was carrying on business in Malaya when the war was going on.
Malaya was within the war zone and, therefore, there was every possibility of that area being bombed.
If the assessee had earned any profits out of his business during the war, the department undoubtedly would have considered those profits as assessable income.
It is strange that when loss had occurred in such a situation the department should contend that the loss in question was not a business loss.
In our opinion, taking into consideration the facts and circumstances of the case, the loss occurred must be held to be a loss incidental to the business carried in by the assessee in Malaya during the war.
We are fortified in our conclusion by the decision of the Bombay High Court in Pohoomal Bros. vs Commissioner of Income Tax, Bombay City(1).
The facts of that case are some (1) 462 what similar to the facts before us.
The assessee therein, which had its head office in Bombay and branches in various parts of the world, claimed deduction of the losses resulting from the destruction of its stock in trade in three foreign branches, at Manila, Saigon and Kuala Lumpur, by enemy invasion, in computing its profits and gains for the purpose of income tax.
The department resisted that claim but the High Court held that the losses in question were trading losses.
This decision of the High Court was cited with approval by this Court in Commissioner of Income Tax, U.P. vs Nainital Bank Ltd. (1), In this connection we may also refer to two English decisions.
The first case is Green vs J. Gliksten(2).
The facts of that case were as follows : A fire occurred on the company 's premises in August, 1921, and destroyed timber the written down value of which in the company 's books was pound 160,824; the company 's valuation of its stock based on cost or market value whichever was the lower, had been accepted for purposes of taxation.
The timber had 'been insured for many years and the company had been allowed to deduct the insurance premises in computing its assessable profits.
In due course the company received from the insurers a sum of pound 477,838 representing the replacement value of the destroyed timber, but only a small part of this timber was in fact replaced because the current demand was for timber of a different character.
The company accordingly credited in its profit and loss account as a trading receipt only pound 160,824 of the insurance payment; the balance did not appear in the profit and loss account but was entered as a reserve in the balance sheet.
The Special Commissioners held that no part of the sum of pound 477,838 recovered from the insurers was a trading receipt.
But the House of Lords held that the whole sum recovered was trading receipt to be taken into account in computing the profits assessable to Income Tax under case 1 of Schedule D and to Corporation Profits Tax.
This court in Nainital Bank 's case (supra) quoting that decision with approval observed.
"If receipt from an insurance company towards loss of stock was a trading receipt, conversely to the extent of the loss not so recouped it should be trading loss.
" Next we shall refer to the decision of the Court of Appeal in London Investment and Mortgage Co., Ltd. vs Inland Revenue Commissioners.(3) The facts of that case were as follows : The assessee were paying compulsory war damage contributions during the war in respect of the properties in which they were dealing.
They received payments under the War Damage Act, 1943, in respect of the properties damaged by enemy action.
(1) (2) 14 Tax Cases 364.
(3) [1957] 1 All England Reports 377.
463 They disposed of some of the properties but retained others as part of their stock in trade and either were having them rebuilt or would have them rebuilt.
Under the War Damage Act, 1943, contributions made and indemnities given under Part I were to be treated for all purposes as outgoings of a capital nature and expenditure on making good war damage was not deductible in computing profits for income tax purposes.
On the question whether the value payments should be included in the receipts of the taxpayers ' trade for the purpose of their assessments to income under Case 1 of Schedule D and to profit tax, the Court of Appeal held that the value payments should properly be treated as part of the taxpayers ' trading receipts, since they were money into which their stock in trade had been converted.
This decision is an authority for the proposition that the compensation received in lieu of loss, of stock in trade as a result of enemy action is a trading receipt conversely a loss of stock in trade occasioned by enemy action must be considered, as a trading loss.
For the reasons mentioned above we agree with the conclu sions reached by the High Court and see no merit in this appeal.
It is accordingly dismissed with costs.
K.B.N. Appeal dismissed.

summary/full:
The assessee, who was carrying on business in Malaya which was within the war zone, suffered damages to property during the war on account of bombing.
The loss in question was loss of stock in trade.
On the question whether the loss could be given deduction to as a business loss in computing the net income of assessee under section 10 (1) of the Income tax Act, 1922.
HELD : On the facts and circumstance of the case the loss occurred must be taken to be a loss incidental to the business carried on by the assessee during the war.
If the assessee had earned any profits cut of his business during the war the department undoubtedly have to consider those profits as assessable income.
When loss had occurred in such situation the department cannot contend that the loss in question must not be a business loss.
A loss of stock in trade occasioned by enemy action must be considered as a trade loss.
[461 F] Bombay High Court in Pohoomal Bros. vs Commissioner of Income tax, Bombay City, , Commissioner of Income tax, U.P. vs Nainital Bank Ltd., , Green vs J. Glikstan, 14 Tax Cases 364 and London Investment and Mortgage Co. Ltd, vs Inland Revenue Commissioners [1957] 1 All England Reports.
377, referred to.