judgement:
Appeals Nos.
429 439, 591, 592, 597, 689, 694, 724, 725 and 727 of 1962 and 15, 139, 140, 159, 267 to 269, 331, 334, 337, 340, 342, 343, 347, 352, 389, 746 and 748 of 1963.
Appeals from the judg ments and order dated December 19, 1958, March 7, 1959, March 11, 1959, April 22, 1959, April 24, 1959 in Writ Appeals Nos. 135, 122 of 1957 etc.
T. V. R. Tatachari, for the appellants (in C.A. Nos.
429 to 434 and 694 of 1962 and C.A. No. 269/63).
M. C. Setalvad, P. Kodandaramayya, E. V. Bhagarathi Rao and T. V. R. Tatachari, for the appellants (in C.A. Nos. 438 and 439/62).
M. C. Setalvad, and R. Ganapathi Iyer, for the appellants (in C. A. Nos. 436, 437, 724, 725 and 727/62).
458 K. Srinivasamurthy and Naunit Lal, for the appellants (in C. As.
Nos. 591, 582, 597, and 689/62 and 140, 267 and 268/63).
K. Jayaram and R. Thiagarajan, for the appellants (in C.A. Nos.
139, 159, 330, 334, 337, 340, 342, 343, 347 and 352/63).
K. R. Chaudhuri, for the appellants (in C.A. Nos. 15 and 389 of 63).
A. Vedavalli and A. V. Rangam, for the appellant (in C. As.
746, and 748 of 63).
D. Narsaraju, T. Anantha Babu, M. V. Goswami and B. R. G. K. Achar, for the respondents (in C. As.
435437, 724, 725 and 727/62).
D. Narsaraju, T. Anantha Babu, Yogeshwar Prasad and B. R. G. K. Achar, for the respondents (in C. As.
Nos. 429434, 438, 439 and 694/62 and 269 of 63).
D. Narsaraju, T. Anantha Babu, M. section K. Sastri and B. R. G. K. Achar, for the respondents (in C.A. Nos. 591, 597 and 689/62 and 140, 267 and 268/63) and respondent No. 1 (in C.A. No. 592/62).
J.V.K. Sharma and T.Satyanarayana, for respondent No. 2 (in C.A. No. 592/62).
D. Narsaraju, T. Anantha Babu, R. Gopalakrishnan and BR.
G. K. Achar, for the respondents (in C. As.
Nos. 15, 139, 331, 334, 337, 340, 342, 343, 347, 352, 159, 389 and 746 748 /63).
March 25, 1964.
The judgment of the Court was delivered by GAJENDRAGADKAR, C. J.
The principal question of law which arises in this group of 37 civil appeals relates to the construction of section 3 of the Madras Essential Articles Control and Requisitioning (Temporary Powers) Act, 1949 (No. 29 of 1949) (hereinafter called 'the Act ').
The dispute which has given rise to these appeals centres round the validity of two notified orders issued by the respondent, State of Andhra Pradesh on the 28th January, 1955, and 30th January, 1955 respectively, and it is the contention of the appellants that the said notified orders are outside the purview of section 3.
The appellants in all these appeals are supplied electricity by the respondent for many years past, and several individual agreements have been passed between them and the respondent during the period 1946 to 1952 prescribing the terms and conditions on which the said supply would be made to them.
One of these terms stipulated the rate at which the supply of electricity had to be charged 459 against the consumers.
The impugned orders have purported to increase this rate, and the appellants contend that the respondent had no authority to change this important term of the contract to their prejudice by taking recourse to section 3(1) and issuing notified orders in that behalf.
That, in substance, is the nature of the controversy between the parties before us.
It appears that the Government of Madras, and subsequently, its successor, the respondent, had a single power grid system for the whole State comprising Tungabhadra and Machkund Hydro Electric System and the Thermal System of Nellore.
The entire energy was integrated into one power system.
The Government of Madras entered into agreements with several consumers in the State, including the appellants, for the supply of energy in bulk at the specified rates which were called tariffs, for the years 1951 and 1952.
These agreements were to be in operation for ten years.
It is common ground that these agreements did not contain any provision authorising the Government to increase the rates during their operation.
The charges fixed were calculated at graded regressive rates according to increasing slabs of consumption units, and the overall unit rates including the demand charge were not to exceed 66 annas without prejudice to the monthly minimum payment and the guaranteed consumption.
The Government of Andhra then issued the two impugned orders relating to Machkund and Nellore, and Tungabhadra and Chittoore District areas respectively, enhancing the agreed rates.
These enhanced rates were specified in Schedules A and B attached to the said orders.
According to these orders, these increased tariffs were to take effect from the date on which meter readings were to be taken in the month of February, 1955 and were to operate for the future.
The increase in the rates effected by these orders was thus to operate not retrospectively, but prospectively.
The impugned orders indicate that the main reason which inspired the said orders was the knowledge that the existing electricity tariffs which were formulated nearly 15 years before, had become completely uneconomic; the charges of labour and the price level of all material had enormously increased; and that in evitably meant continuously growing loss to the Government.
The Accountant General made queries in respect of this recurring loss and drew pointed attention of the State Government to the deficits in the working of the Power System.
Accordingly, the question of revision of tariffs was considered in the State of Madras, but was not decided because reorganisation of the States was then in contemplation.
After the respondent State wits born, its Chief Engineer sumbitted proposals for 460 revisions of tariffs in all the areas covered by the relevant schemes.
That is how the impugned notified orders came to be issued by the respondent.
The appellants were naturally aggrieved by these orders, because they added to their liability to pay the rates for the supply of electricity by the respondent to them.
Accordingly, a large number of consumers moved the Andhra Pradesh High Court under article 226 of the Constitution, and challenged the validity of the two impugned orders.
The learned single Judge who heard these writ petitions upheld the appellants ' plea and came to the conclusion that the impugned orders were not justified by the authority conferred on the respondent by section 3 of the Act, and were unauthorised, illegal and inoperative.
In the result, the writ petition filed by some of the appellants before us were allowed and an appropriate order was issued against the respondent restraining it from enforcing the revised tariff rates.
These decisions were challenged by the respondent by preferring several Letters Patent Appeals.
The Division Bench which heard these Letters Patent Appeals took a different view; it held that on its fair and reasonable con struction, section 3 did confer authority on the respondent to issue the impugned orders, and so, the challenge made to the validity of the said orders could not be sustained.
That is why the Letters Patent Appeals preferred by the respondent were allowed and the writ petitions filed by the appellants were dismissed.
It is against these orders that the appel lants have come to this Court with a certificate issued by the said High Court.
After the Division Bench had pronounced its decision on this point, several other writ petitions were filed by other consumers, and naturally the single Judge who heard them followed the decision of the Division Bench and dismissed the said writ petitions.
The consumers who were aggrieved by the decision of the learned single Judge were then allow ed to come to this Court directly by special leave, because the points which they wanted to raise were exactly the same as were raised by the other consumers who had come to this Court against the principal decision of the Division Bench.
The present group of appeals thus consists of matters which have been decided by a Division Bench of the Andhra Pradesh High Court, as well as those which have been decided by a learned single Judge, and they all raise the same common question about the construction of section 3 of the Act, and the validity of the impugned notified orders.
Before addressing ourselves to the question of construing section 3, it is necessary to recapitulate the legislative history of the Act.
It will be recalled that during the Second World 461 War, the Government of India passed the Defence of India Act (No. 35 of 1939) on the 29th of September, 1939.
By virtue of the powers conferred on the Central Government by section 2 of the said Act, several Rules came to be framed by Central Government known as the Defence of India Rules.
Amongst these Rules was Rule 81(2) which clothed the Central Government with power to issue orders which may appear to the Central Government to be necessary or expedient for securing "the defence of British India, or the efficient prosecution of the war, or for maintaining supplies and services essential to the life of the community".
These Rules were in operation during the continuance of the war.
After the war came to an end, it was realised that the eco nomic situation in the country continued to be serious, and for the proper regulation of economic affairs, it was thought necessary to continue the orders issued under the Defence of India Rule 81(2), because shortage of supply of essential articles was very much in evidence then.
The purpose of continuing the orders was to ensure the supply of essential articles to the community at large at reasonable prices and to secure their equitable distribution.
In due course, the Defence of India Act came to an end in 1946, but the Central Legislature thought it necessary to pass another Act to take its place and that was the Essential Supplies (Temporary Powers) Act, 1946 (No. 24 of 1946).
On the same lines, the Madras Legislature passed an Act in 1946 (No. 14 of 1946).
Later, it was replaced by Act No. 29 of 1949 with which we are concerned in the present appeals.
After the respondent State was created under the Scheme of Reorganisation of States, it passed Act No. 1 of 1955 and this Act received the assent of the President on the 21st of January, 1955.
By this Act, the Legislature of the respondent State virtually adopted the Madras Act.
As a result, the impugned orders are, in substance, referable to section 3 of the Madras Act.
Before we part with this topic, it may be mentioned that when the Madras Act was passed, its Schedule gave a list of the essential articles as defined by section 2(a) and these articles were 12 in number.
When the Andhra Legislature passed Act No. 1 of 1955 and adopted the Schedule of essen tial articles for its purpose, the number of these articles was reduced to two; they are charcoal and electrical energy.
The Andhra Act was originally intended to be in operation until the 25th January, 1956, but it was later continued from time to time.
It is common ground that when the impugned orders were passed, section 3 of be Act was in operation and the present appeals have been argued on the basis that the said section is constitutionally valid, so that the main point which calls for our decision is the construction of the said section.
462 Mr. Setalvad for the appellants contends that in construing section 3, we ought not to concentrate on the words used in section 3 in isolation, but must look at the said section along with the other provisions of the Act.
The rule of harmonious construction, he urges, requires that we must so construe all the provisions of the Act as to avoid any conflict or repugnancy between them.
So construed, section 3, according to him, cannot be said to confer power on the respondent to enhance the tariff rate chargeable against the appellants in respect of the supply of energy made by the respondent to them.
The whole scheme of the Act indicates clearly that the power to regulate the supply of an essential article which has been conferred on the State Government has to be applied in regard to transaction between citizens and citizens and cannot be applied to an essential article: which the State itself supplies.
It would be odd, he suggests, if the State Government is given the power to issue a notified order regulating the rates at which it should supply energy which it itself produces.
Therefore, the dealings by the State Government in the matter of supply of energy to the consumers should be deemed to be outside the provisions of section 3, and that would make the impugned orders invalid.
The question as to whether the State Government would be bound by the provisions of legislative enactments passed by the State Legislature has sometimes led to difference in judicial opinion; but the decision of this Court in the Director of Rationing and Distribution vs The Corporation of Calcutta and Ors.(1) must be taken to have settled this question.
The effect of the majority decision rendered in that case is to recognise the validity of the rule of interpretation of statutes enunciated by the Privy Council in Province of Bombay vs Municipal Corporation of the City of Bombay (2) and that rule is that the State is not bound by a statute unless it is so provided in express terms or by necessary implication.
In applying this rule, it is obviously necessary that the Court must attempt to ascertain the intention of the Legislature by considernig all the relevant provisions of the statute together and not concentrating its attention on a particular provision which may be in dispute between the parties.
If, after reading all the relevant provisions of the statute, the Court is satisfied that by necessary implication the obligation imposed by the statute should be enforced against the State, that conclusion must be adopted.
If there are express terms to that effect, there is, of course, no difficulty.
In dealing with this vexed question, sometimes it is necessary also to enquire whether the conclusion that the State is not bound by the specific provision of a given statute, (1) ; (2)73 I.A. 271.
463 would hamper the working of the statute, or would lead to the anomalous position that the statute may lose its effi cacy, and if the answer to either of these two questions indicates that the obligation imposed by the statute should be enforced against the State, the Court would be inclined to infer by necessary implication that the State, in fact, is bound by the statute.
Where, however, the question is not so much as to whether the State is bound by the statute, but whether it can claim the benefit of the provision of a statute, the same rule of construction may have to be applied.
Where the statute may be for the public good, and by claiming the benefit conferred on it by its provisions the State may allege that it is serving the public good, it would still be necessary to ascertain whether the intention of the legislature was to make the relevant provisions applicable to the State.
This position is also established by the decision of the Privy Council in Province of Bomboy(1) and it still continues to be a law in this Country.
Incidentally, we may add that where the Crown seeks to take advantage of a statute and urges that though it is not bound by the statute, it is at liberty to take advantage of it, English Law does not easily entertain such a plea, though there are observations made in some judicial pronouncements to the contrary.
As Halsbury points out, "it has been said that, unless it is expressly or impliedly prohibited from doing so, the Crown may take advantage of a statute not withstanding that it is not bound thereby.
" Having made this statement, Halsbury has added a note of caution by ,,saying that "there is only slender authority for this rule, and since both the rule and such authority as does exist have also been doubted, the rule cannot, perhaps, be regarded as settled law(2)".
To the same effect is the comment made by Maxwell when be quotes with approval the view expressed by Sir John Simon that the decisions which recognise the right of the Crown to take advantage of a statutory provision "start with a passage in an unsuccessful argument of a law officer which was not even relevant to the case before the court, but which has been taken out by a text writer and repeated for centuries until it was believed that it must have some foundation(3)".
Therefore, in construing section 3 of the Act, we cannot permit the respondent to rely upon the artificial rule that since (1) 73 T.A. 271.
(2)", Halsbury 's Laws of England, Vol. 36, p. 432, para 654.
(3) Maxwell on Interpretation of Statutes, 11th Ed.
p. 136 464 the respondent claims a benefit under section 3, that construc tion should be adopted which supports such a claim.
Thus, the position is that when we construe section 3, we must adopt the usual rule of construction; we must not read section 3 in isolation, but must consider it in its proper setting and must have due regard for the other provisions of the Act, and its general scheme and purpose.
Reverting then to Mr. Setalvad 's main argument, it may be conceded that when the Act was passed in 1949, mainly and primarily the power conferred by section 3 on the State Government must have been intended to regulate the supply of essential articles made by one citizen to another.
The State had not then entered commercial activities on a large scale and when section 3(1) contemplated notified orders issued for the purpose of securing equitable distribution and availability at fair prices of essential articles, the legislature could not have in its mind supply of essential articles made by the State itself.
That is one point in favour of Mr. Setalvad 's construction.
If we examine the scheme of the Act, it may also have to be conceded that some of the provisions may not be applicable to the State.
Take, for instance, the provision of section 4 which relate to the powers of requisitioning and acquisition of properties, and the subsequent two sections that deal with payment of compensation and release from requisition respectively; these provisions may not be applicable to the State.
Take, again, the control of agriculture which is contemplated by section 7; it would not be applicable to the State.
Section 12 which deals with penalties may also be inapplicable to the State, and so, would section 13 be inapplicable, because it deals with abetment and assistance of contravention of the provisions of the Act.
Therefore, the general scheme of the Act and some of its provisions seem to suggest that the State may not have been within the contemplation of the Act.
But it is obvious that the rule of harmonious construction on which Mr. Setalvad has solely rested his case, can be invoked successfully by him only if the words used in section 3 are capable of the construction which he suggests.
If the said words are capable of two constructions one of which supports the appellants ' case and the other that of the res pondent, it would be legitimate to adopt the first construc tion, because it has the merit of harmonising the provisions of section 3 with the general scheme and purpose of the Act.
On the other hand, if the words used in section 3(1) are not reason ably capable of the construction for which the appellants contend, then it would be unreasonable and illegitimate for the Court to limit the scope of those words arbitrarily solely for the purpose of establishing harmony between the 465 assumed object and the scheme of the Act.
Therefore, it is necessary to examine the words used in section 3 very carefully.
Let us first read section 3(1): "The State Government so far as it appears to them to be necessary or expedient for maintaining, increasing or securing supplies of essential articles or for arranging for their equitable distribution and availability at fair prices may, by notified order, provide for regulating or prohibiting the supply, distribution and transport of essential articles and trade and commerce therein".
Sub section (2) provides that without prejudice to the gene rality of the powers conferred by sub section (1), an order made thereunder may provide for objects specified in clauses (a) to (k).
The majority of these objects may not be appli cable to the State, while, conceivably, some may be appli cable to it.
Section 3(1) is obviously intended to secure supplies of essential articles and to arrange for their equitable distribution and availability at fair prices.
If electrical energy is one of the essential articles mentioned in the Schedule, there can be no difficulty in holding that a notified order can be issued under section 3(1) for regulating the supply of the said energy and making it available at a fair price.
Indeed, it is not disputed and cannot be disputed that if electrical energy is produced by a private licensee and is then supplied to the consumers, such a supply would fall within the mischief of section 3(1), and the terms on which it can and should be made to the consumers can be regulated by a notified order.
There can also be no serious dispute that the terms of a contract entered into between a private supplier of electrical energy and the consumer could be modified by a notified order.
Section 3(1) undoubtedly confers power on the State Government to vary and modify contractual terms in respect of the supply or distribution of essential articles.
If that be so, on a plain reading of section 3(1) it seems very difficult to accept the argument that the supply of electrical energy which is included in section 3(1) if it is made, by a private producer should go outside the said section as soon as it is produced by the State Government.
The emphasis is not on who pro duces and supplies, but on the continuance of the equitable distribution and supply of essential articles at fair prices.
If the object which section 3(1) has in mind is such equitable distribuiton and availability at fair prices of essential articles, then that object would still continue to attract the provisions of section 3(1) even though the essential article may be produced by the State and may be supplied by it to the consumers.
466 The words used in section 3(1) are so clear, unambiguous and wide that it would be unreasonable to limit their scope arti ficially on the ground that by giving effect to the wide language of the section, we might reach a result which is not completely harmonious or consistent with the assumed object and purpose of the Act.
Indeed, as we have just indicated, if the purpose of the Act is to secure the supply of essential articles at fair prices, it would be irrelevant as to who makes the supply; what is relevant is to regulate the supply at a fair price.
Therefore, we are not prepared to accede to Mr. Setalvad 's argument that section 3(1) does not confer on the respondent the power to modify the terms of agreements between it and the appellants.
Mr. Setalvad, no doubt, contended that in construing section 3(1), we may have regard to the fact that most of the clauses under section 3(2) would be inapplicable to the respondent State, and so, he virtually suggests that even though the words in section 3(1) may be wide, their width should be controlled by the limited scope of the clauses prescribed by subsection (2).
We are not prepared to accept this argument.
After the decision of the Privy Council in King Emperor vs Sibnath Banerjee(1), it is well settled that the function of a clause like clause (2) of section 3 merely illustrative (vide also Santosh Kumar Jain vs The State(3)).
In other words, the proper approach to adopt in construing clauses (1) and (2) of section 3 is to assume that whatever is included in clause (2) is also included in clause (1).
That is not to say that if the words of clause (1) are wide enough to include cases not included in clause (2), they must, for that reason, receive a narrower construction.
Therefore, we must ultimately go back to clause (1) to decide whether the supply of electrical energy made by the respondent to the appellants can be regulated by a notified order issued under it or not, and the answer to that question must, in our opinion, be in the affirmative.
In this connection, it may be pertinent to refer to section 3(2)(b) which provides for controlling the prices at which any essential article may be bought or sold.
It is not easy to see why this clause cannot take in articles which may be purchased or sold by the State.
The clause is so worded that the transactions of sale and purchase of all essential articles would be included in it.
It is true that where the State wants to sell its essential articles, it may be able to regulate the prices and control them by means of an executive order; but that is not relevant and material in construing the effect (1) 72 I.A. 241 at p. 248.
(2) ; 467 of the words; if the words take within their sweep essential articles sold by the State, there is no reason why it should not be competent to the State to issue a notified order con trolling the prices in that behalf.
In regard to the purchase of essential articles by the State, the position is still clearer.
If the State wants to purchase essential articles, power to regulate the prices of such, articles would seem to be clearly included in section 3(2)(b).
In ' deed, during the course of his arguments, Mr. Setalvad did not seriously dispute this position.
Therefore, when the State wants to purchase essential articles, it can regulate the price in that behalf by means of a notified order issued under section 3(1) and that shows that in the cases of both sale and purchase of essential articles by the State, section 3(2)(b) read with section 3(1) would clothe the State with the power to issue the relevant notified order.
Then, it was faintly argued by Mr. Setalvad that the power to regulate conferred on the respondent by section 3(1) cannot include the power to increase the tariff rate; it would include the power to reduce the rates.
This argument is en tirely misconceived.
The word "regulate" is wide enough to confer power on the respondent to regulate either by in creasing the rate, or decreasing the rate, the test being what is it that is necessary or expedient to be done to maintain, increase, or secure supply of the essential articles in question and to arrange for its equitable distribution and its availability at fair prices.
The concept of fair prices to which section 3(1) expressly refers does not mean that the price once fixed must either remain stationary, or must be reduced in order to attract the power to regulate.
The power to regulate can be exercised for ensuring the payment of a fair price, and the fixation of a fair price would inevitably depend upon a consideration of all relevant and economic factors which contribute to the determination of such a fair price.
If the fair price indicated on a dispassionate consideration of all relevant factors turns out to be higher than the price fixed and prevailing, then the power to regulate the price must necessarily include the power to increase the price so as to make it fair.
That is why we do not think Mr. Setalvad is right in contending that even though the respondent may have the power to regulate the prices at which electrical energy should be supplied by it to the appellants, it had no power to enhance the said price.
We must, therefore, hold that the challenge to the validity of the impugned notified orders on the ground that they are outside the purview of section 3(1) cannot be sustained.
That takes us to the next question as to whether the im pugned notified orders are invalid, because they contravene 468 the provisions of article 19(1)(f) and (g) of the Constitution.
The impugned orders have been notified by virtue of the fore, be treated as law for the purpose of article 19.
We may also assume in favour of the appellants that the right to receive the supply of electricity at the rates specified in the agreements is a right which falls within article 19(1)(f) or (g).
Even so, can it be said that the impugned notified orders are not reasonable and in the interests of the general public '? That is the question which calls for an answer in dealing with the present contention.
It is true that by issuing the impugned notified orders, the respondent has successfully altered the rates agreed between the parties for their respective contracts and that, prima facie, does appear to be unreasonable.
But, on the other hand, the evidence shows that the tariff which was fixed several years ago had become completely out of date and he reports made by the Accountant General from time to time clearly indicate that the respondent was supplying electricity to the appellants at the agreed rates even though it was incurring loss from year to year.
Therefore, it cannot be said that the impugned notified orders were not justified on the merits.
The prices of all commodities and labour charges having very much increased meanwhile, a case had.
certainly been made out for increasing the tariff for the supply of electrical energy.
But it could not be possible to hold that the restriction imposed on the appellants ' right by the increase made in the rates is reasonable and in the interests of the general public solely because the impugned orders have saved the recurring loss incurred by the respondent under the contracts.
If such a broad and general.
argument were accepted, it may lead to unreasonable and even anomalous consequences in some cases.
This question, however, has to be considered from the point of view of the community at large; and thus considered, the point which appears to support the validity of the impugned orders is that these orders were passed solely for the pur pose of assuring the supply of electrical energy and that would clearly be for the good of the community at large.
Unless prices were increased, there was risk that the supply of electrical energy may itself have come to an end.
If the respondent thought that the agreements made with the appel lants were resulting in a heavy loss to the public treasury from year to year, it may have had to consider whether the supply should not be cut down or completely stopped.
It may well be that the respondent recognised its obligation to the public at large and thought that supplying electrical energy to the consumers who were using it for profit making purposes, at a loss to the public exchequer would not be reasonable and legitimate, and it apprehended that the legislature may well question the propriety or wisdom of such 469 a course; and so, instead of terminating the contracts, de cided to assure the supply of electrical energy at a fair price and that is why the impugned notified orders were issued.
We ought to make it clear that there has been no suggestion before us that the prices fixed by the impugned notified orders are, in any sense, unreasonable or excessive, and it is significant that even the revised tariff has to come into operation prospectively and not retrospectively.
Therefore,( having regard to all the circumstances in this case, we are disposed to hold that the change made in the tariff by the notified orders must be held to be reasonable and in the interests of the general public.
Mr. Setalvad also attempted to challenge the validity of the impugned orders on the ground that they contravene article 14 of the Constitution.
In support of this contention, he invited our attention to the allegation made in Writ Petition No. 923 of 1956.
In that writ petition, one of the petitioners stated that the rate prescribed under the agree ments had not changed and had remained stationary as far as consumers under the State Government 's licensees were concerned.
The affidavit appears to concede that certain ,other licensees had increased their rates, but that increase, it is claimed, was negligible or nominal; and so, the argument was that the rates which are widely divergent between consumer and consumer constitute a contravention of article 14.
Mr. Setalvad fairly conceded that these allegations are vague and indefinite and no other material has been pro duced either by the petitioner who has made this affidavit, or by any of the other petitioners who moved the High Court for challenging the validity of the impugned orders.
In fact, we do not know what the rates charged by other licensees are and have been, and how they compare with the rates prescribed by the original contracts as well as the rates enhanced by the impugned notified orders.
We ought to add that the Division Bench of the High Court appears to be in error when it assumed that the respondent was the sole supplier of electrical energy in the State of Andhra.
It is true that the bulk of the energy is supplied by the respon dent; but there are some other private licensees which are licensed to supply electrical energy to the consumers and in that sense, at the relevant time the respondent was not a monopolist in the matter of supply of electricity.
This Court has repeatedly pointed out that when a citizen wants to challenge the validity of any statute on the ground that it contravenes article 14, specific, clear and unambiguous alle gations must be made in that behalf and it must be shown that the impugned statute is based on discrimination and that such discrimination is not referable to any classification 470 which is rational and which has nexus with the object in tended to be achieved by the said statute.
Judged from that point of view, there is absolulety no material on the record of any of the appeals forming the present group on which a plea under article 14 can even be raised.
Therefore, we do not think it is necessary to pursue this point any further.
The result is the appeals fail and are dismissed with costs.
One set of hearing fees.
Appeals dismissed.

summary/full:
Electricity was supplied to the appellants by the respon dent state for many years past, and several individual agreements were passed between them prescribing the terms and conditions for the supply.
One of these terms stipulated the rate at which the supply had to be charged.
These agreements did not contain any provision authorising the State to increase the rates during their operation.
The respondent state issued two notified orders enhancing the agreed rates.
The orders indicated that the main reason which inspired the increase was that the existing electricity tariffs which were formulated several years before, had become completely uneconomic and meant continuously growing loss to the State.
A large number of consumers challenged the validity of the two orders in the High Court under article 226.
The writ petitions were allowed and the respondent was restrained from enforcing the revised rates.
These decisions were challenged by the respondent by appeals in the High Court, which took a different view and dismissed the writ petitions.
On appeals to this Court, it was contended, inter alia that the respondent had no authority to increase the rate changing this important term of the contract by taking recourse to section 3(1) of the Madras Essential Articles Control and Requisitioning (Temporary) Powers Act, that the power to regulate the supply of essential articles had to be applied in regard to transactions between citizens and citizens and could not be applied to an essential article which the State itself supplied; that the power to regulate conferred on the respondent by section 3(1) could not include the power to increase the tariff rate, that the notified orders were invalid as they contravened the provisions of article 19(1)(f) and (g) and that of article 14 of the Constitution.
Held: (i) The challenge to the validity of the notified orders on the ground that they were outside the purview of section 3(1) of the Act could not be sustained.
The State is not bound by a statute unless it is so provided in express terms or by necessary implication.
In applying this rule, the court must attempt to ascertain the intention of the Legislature by considering all the relevant provisions of the statute together and not concentrating its attention on a particular provision which may be in dispute.
Where the question is not so much as to whether the State is bound by the statute, but whether it can claim the benefit of the provision of a statute, the same rule of construction 457 may have to be applied ' Where the statute may be for the public good and by claiming the benefit conferred on it by its provisions the State may allege that it is serving the public good, it would still be necessary to ascertain whether the intention of the legislature Was to make the relevant provisions applicable.
Director of Rationing and Distribution vs Corporation of Calcutta, ; and Province of Bombay vs Municipal Corporation of the City of Bombay, [1945 46] L.R. 73 I.A. 271, applied.
(ii) In construing section 3 of the Act of the usual rule of con struction must be adopted, section 3 must not be read in isolation, but must be considered in its proper setting and due regard must be had for the other provisions of the Act and its general scheme and purpose.
(iii) The purpose of the Act is to secure the supply of essential articles at fair prices, it would be irrelevant as to who makes the supply; what is relevant is to regulate the supply at a fair price.
(iv) It is well settled that the function of a clause like cl.
(2) of section 3 is merely illustrative.
In other words the proper approach to adopt in construing cls.
(1), and (2) of section 3 is to assume that whatever is included in cl.
(2) is also included in cl.
King Emperor vs Sibnath Banerjee, 72 I.A. 241 and Santosh Kumar Jain vs State, ; , applied.
(v) The word 'regulate ' is wide enough to confer power on the State to regulate either by increasing the rate or de creasing the rate, the test being what is it that is necessary or expedient to be done to maintain, increase or secure supply of the essential articles in question and to arrange for its equitable distribution and its availability at fair prices.
(vi) Having regard to all the circumstances in this case, the change made in the tariff were reasonable and in the in terests of the general public.
(vii) There was absolute no material on the record of the appeals on which a plea under article 14 of the Constitution could even be raised.


judgement:
Appeal No. 529 of 1963.
Appeal by special leave from the judgment and order dated September 24, 1958, of the Madhya Pradesh High Court in Misc.
Petition No. 82 of 1958.
I. N. Shroff, for the appellant.
M. C. Setalvad B. Narayanaswamy, J. B. Dadachanji, Ravinder Narain and O. C. Mathur, for respondent No. 1.
M.S.K. Sastri and M. section Narasimhan, for respondent No. 2.
March 25, 1964.
The judgment of the Court was delivered by DAS GUPTA, J.
Two main questions arise in this appeal.
The first is whether section 42(1)(g) of the Central Provinces and Berar Industrial Disputes and Settlement Act, 1947 prohibits an employer from taking action against a workman for participation in an illegal strike before it is so declared under section 41 of the Act.
The second question is whether in an application made under section 16(3) of the Act the Labour Commissioner has jurisdiction to decide the legality or illegality of the strike.
On September 21, 1956 the first respondent in this appeal, the Burhanpur Tapti Mills Ltd., served a charge sheet on one of the employees Sulemankhan Mullaji, who is the second res pondent in the appeal alleging that he had instigated workers of the Weaving Department to go on an illegal strike earlier that day.
After holding an enquiry into the matter the Manager came to the conclusion that the charge had been established being of opinion that this constituted misconduct under cl.
25(b) of the Standing Orders.
Thereafter, the Manager ordered Sulemankhan to be summarily dismissed without notice and without compensation in lieu of notice.
Sulemankhan made an application against this order to the Labour Commissioner, Madhya Pradesh under section 16 of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947.
The Labour Commissioner was of opinion that the authority to decide the legality of a strike had been entrusted by section 41 of the Act by the legislature to the State Industrial Court or the District Industrial Court.
He also held that before a strike had been held by either of these authorities to be illegal the employer had no right to take any action against his workmen on his own view that a strike was illegal.
The Labour Commissioner further held that there was no legal evidence to prove the allegations against Sulemankhan and that in inflicting the punishment of dismissal the Manager had not paid due regard to sub cl. 4 of cl. 26 of the Standing Orders.
Accordingly, he ordered 486 the reinstatement of Sulemankhan with full wages from the date of dismissal to the date of reinstatement.
The revision application by the first respondent proved un successful.
The State Industrial Court, which is the revisional authority, disagreed with the Labour Court 's view that the employer could not take action before a decision from the State Industrial Court or the District Industrial Court declaring the strike to be illegal had been obtained.
Being however of opinion that the enquiry had not been held in accordance with the Standing Order in cl.
26(2) and also that in awarding the punishment the Manager had not taken into consideration the matters mentioned in the Standing Orders in cl.
26(4), the Industrial Court concluded that the Labour Commissioner was justified in examining the evidence for itself.
It further held that the finding of fact given by the Labour Commissioner could not be challenged in revision.
The final conclusion of the State Industrial Court, as already indicated, was that the order of reinstatement made by the Labour Commissioner was fully justified.
Against this order the employer (the first respondent) moved the High Court of Madhya Pradesh under article 226 of the Constitution.
The High Court indicated its view that though the Labour Commissioner may not have the jurisdication to decide the question of illegality of a strike, it may decide the question incidentally for the purposes mentioned in section 16 of the Act if in an enquiry under section 16 a question is raised that the dismissal was wrongful as there was no incitement of an illegal strike under cl.
25(b) of the Standing Orders.
After expressing this view the High Court, however, added the words: "That aspect of the matter need not be considered because the strike instigated here was not held to be a legal strike.
" The High Court was of opinion that the Industrial Court had fallen into an error in thinking that the charge sheet served on the workmen was defective.
It also held that neither the Labour Commissioner nor the State Industrial Court had any jurisdiction to examine the findings of the domestic tribunal as an appellate authority and to come to a contrary conclusion on the same evidence.
Accordingly, the High Court quashed the orders of the Labour Commissioner and the State Industrial Court.
The present appeal has been preferred by the Labour Commissioner, Madhya Pradesh, No appeal has been preferred by the workman himself.
It is therefore unnecessary for us to consider in this appeal the correctness or otherwise of the High Court 's decision on the merits of the case.
What we have to decide, as already indicated is whether sec.
42 of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947 487 stood in the way of the employer taking action against a workman for participation in an illegal strike before it had been declared to be so under section 41; and secondly, whether when there has been no such decision the Labour Commissioner has jurisdiction to decide the question of legality or illegality of the strike in an application made to him under section 16 of the Act.
The relevant provisions of section 42 which require consideration for a decision of the first question are that: "No employer shall dismiss, discharge, suspend or reduce any employee or punish him in any other manner solely by reason of the cir cumstance that the employee has participated in a strike which is not "rendered illegal" under any provision of this Act.
" The provisions of the Act rendering a strike illegal are set out in section 40.
Prima facie it appears that it is only where the strike in which an employee has participated does not come within any of the provisions of section 40 that the employer is prohibited from taking action against him.
The prohibition operates only when a strike is not "rendered illegal" under any provisions of the Act.
That, it is urged by the respondent employer, is the same thing as saying that the prohibition operates only where the strike is not illegal within the meaning of the provisions of section 40 of the Act.
The argument on behalf of the appellant is that the words "rendered illegal" in section 42 (1)(g) should properly be construed as "held illegal".
It has to be noticed in this connection that section 41 of the Act provides a machinery under which not only the State Government but any employer or employee can approach the State Industrial Court or a District Industrial Court for a decision whether a strike or a lockout of which notice has been given or which has taken place is illegal.
According to the appellant, it is only after on such an application the State Industrial Court or a District Industrial Court has decided that a strike is illegal, that the employer can take action.
We are unable to see any justification for such a construction.
It is clear to us that the phrase "rendered illegal" in section 42(1)(g) has been deliberately used in contradistinction to the words "held illegal" used in sections 43, 44 and 45.
Section 43 provides penalty on an employer who " declares a lockout which is held by the State Industrial Court or the District Industrial Court to be illegal".
Section 44 provides penalty against an employee "who goes on a strike or who joins a strike which is held by the State Industrial Court or the District Industrial Court to be illegal".
Section 45 provides penalty for instigation or incitement to or participation or acting in furtherance of a strike or lockout "which is held to be illegal by the State Industrial Court or the District Industrial Court".
When the legislature used the words "held illegal" by the State Industrial Court or the District Industrial Court in sections 43, 44 and 45 but used different phraseology, 488 viz., "rendered illegal" in section 42(1`)(g) the conclusion is irresistible that this was done deliberately.
The reason for this is not far to seek.
However, quickly the State Industrial Court or the District Industrial Court may act on an application under section 41 the decision on the legality or otherwise of a strike is bound to take a considerable time.
It would be an impossible position for industrial management if after notice has been given of a strike or a strike has started which the employer considers to be illegal within the meaning of section 40 he should be compelled to stay his hand and wait till a State Industrial Court or a District Industrial Court has given a declaration on the question.
It also appears clear that these authorities are not bound to give a decision on an application by the employer.
The Section runs thus: Court shall, on a reference made by the State Government, and may, on an application by any employer or employee concerned or by a representative of the employees concerned or by the Labour Officer, decide whether any strike or lockout or any change of which notice has been given or which has taken place is illegal.
" it has to be noticed that while on a reference by the State Government the State Industrial Court or a District Industrial Court "shall" decide the question of legality of the strike or lockout, it "may" decide the question on an application by the employer or employee or any other person mentioned in the section.
The use of the word "shall" in connection with the action to be taken on a reference by the State Government and "may" in connection with the action on an application by others in the same section compels the conclusion that on an application by anybody other than the State Government, the State Industrial Court or a District Industrial Court may also refuse to take action.
The suggested construction of the words "rendered illegal" as "held illegal" might therefore have the curious result that even though the strike is in fact illegal within the meaning of section 40 of the Act no action can at any time be taken against an employee for participation in it.
We have accordingly come to the conclusion that the words "rendered illegal" does not mean "held illegal" and the employer is free to take action against the employee as soon as he thinks that the strike in which he has participated comes within the provisions of section 40 of the Act.
When the employer takes such action against the employee by dismissing, discharging, removing or suspending him, it will be open to the employee to apply to the Labour Commissioner for reinstatement and payment of compensation for loss of 489 wages.
This is provided in section 16(2) of the Act.
Section 16(3) provides that if on receipt of such application the Labour Commissioner after such enquiry as may be prescribed finds that the dismissal, discharge, removal or suspension was in contravention of any of the provisions of this Act or in contravention of a Standing Order made or sanctioned under this Act or was for a fault or misconduct committed by the employee more than six months prior to the date of such dismissal, discharge, removal or suspension, he may direct reinstatement of the employee or other relief.
The question has been raised whether when the order of dismissal, discharge, removal or suspension purports to have been made for participation in or instigation to an illegal strike it is open to the Labour Commissioner to decide the question of illegality of a strike.
On behalf of the appellant it has been suggested that exclusive jurisdiction to decide the question of legality or illegality of a strike has been given by the Act to the two authorities, viz., the State Industrial Court or a District Industrial Court, as mentioned in section 41.
There is no doubt that section 41 which has been set out above empowers the State Industrial Court or a District Industrial Court to decide the question of legality of a strike on a reference by the Government, or application by employer or employee or others mentioned in the section.
Mr. Shroff argues that it could not have been the intention of the legislature to have two parallel bodies the Labour Commissioner as well as the State Industrial Court or a District Industrial Court having jurisdiction to decide such a matter.
For, as he points out, it may well be that while on an application under section 16(3) the Labour Commissioner holds that the strike was not illegal the contrary view may be taken by the State Industrial Court or the District Industrial Court on an application under section 41 or vice versa.
This argument is plausible at first sight.
There is, however, one great difficulty in accepting it.
That consists in the fact, already pointed out, that the State Industrial Court or a District Industrial Court is not bound to give any decision at all on application by any party other than the State Government.
There being thus cases where the authorities mentioned in section 41 may refuse to decide the question of legality or illegality of a strike, it is not possible to say that exclusive jurisdiction is given by section 41 to these authorities to decide the question of legality or illegality of a strike.
It is reasonable to held therefore that for performing its functions under section 16(3) of the Act the Labour Commissioner has jurisdiction to decide the question of legality or illegality of a strike when that question is raised before it.
The appeal is accordingly dismissed.
No order as to costs.
Appeal dismissed.

dataset_name: IN-Abs

summary/full:
An employee was summarily dismissed by the respondent employer after holding an enquiry on the allegation that he had instigated workers to go on an illegal strike.
The employee applied under section 16 of Central Provinces and Berar Industrial Disputes Settlement Act to the Labour Commissioner, who held that authority to decide the legality of a strike had been entrusted by section 41 of the Act to the State Industrial Court or the District Industrial Court and that before a strike had been held by either of these authorities to be illegal the employer had no right to take any action against his workmen on his own view that a strike was illegal and ordered the reinstatement of the employee with full wages.
The revision application by the respondent employer to the State Industrial Court proved unsuccessful through it disagreed with the Labour Court 's view that the employer could not take action before a decision from the State Industrial Court or the District Industrial Court declaring the strike to be illegal had been obtained.
Thereafter, the employer moved the High Court under article 226.
The High Court was of the view that though the Labour Commissioner may not have the jurisdiction to decide the question of illegality of a strike, it may decide the question incidentally for the purposes mentioned in section 16 if in an enquiry such a question is raised, and quashed the orders of the Labour Commissioner and the State Industrial Court.
On appeal preferred by the Labour Commissioner in this Court.
Held: (i) The employer is free to take action against the employee as soon as he thinks that the strike in which he has participated comes within the provisions of section 40 of the Act.
The phrase "rendered illegal" in section 42(1)(g) has been deliberately used in contradistinction to the words "held illegal" used in sections 43, 44 and 45.
It would be an impossible position for industrial management if after notice has been given of a strike or a strike ha,,, started which the employer considers to be illegal within the meaning of section 4o he should be compelled to stay his hands and wait till a State Industrial Court or a District Industrial Court has given a declaration on the question.
The use of the word "shall" in section 41 in connection with the action to be taken on a reference by the State Government and "may" in connection with the action on an application by others in the same section compels the conclusion that on an application by anybody other than the State Government, the State Industrial Court or a District Industrial Court may also refuse to take action.
485 (ii) For performing its functions under section 16(3) of the Act the Labour Commissioner has jurisdiction to decide the question of legality or illegality of a strike when that question is raised before it.


judgement:
Appeal No. 583 ,of 1963.
Appeal by special leave from the Award dated June 18, 1962 of the Industrial Tribunal, Ernakulam, in Industrial Dispute No. 38 of 1960.
478 G. B. Pai, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellant.
Janardan Sharma, for the respondents.
March 25, 1964.
The judgement of the Court was delivered by WANCHOO, J.
This is an appeal by special leave from the award of the Industrial Tribunal, Ernakulam.
A dispute arose between the appellant and its workmen as to payment of bonus for the years 1957 58 and 1958 59, and was referred for adjudication to the tribunal.
The respondents claimed bonus on two grounds: (i) on the basis of profits earned by the appellant, and (ii) on the basis that payment of some bonus at Christmas had become an implied condition of ser vice between the appellant and its workmen.
It may be men tioned that the claim was for four months ' wages for each year on the basis of profit bonus.
The alternative claim was for 1 1/2 months ' wages for each year on the basis of an implied term of service.
We may also mention that the appellant had paid two months ' basic salary as bonus for the year 1957 58, and one month 's basic pay as bonus for the year 1958 59.
The appellant contended that there was no surplus available on the basis of the Full Bench formula applied in such cases and therefore no profit bonus could be paid.
It also contended that no bonus was payable as an implied term of service.
The tribunal found on an application of the Full Bench formula that there was no available surplus in either of the two years and therefore no bonus was payable as profit bonus.
It then went into the question whether any bonus was payable as an implied condition of service and relying on the decision of this Court in Messrs. Ispahani Ltd. vs Ispahani Employees ' Union(1) held that payment of bonus at the rate of 1 1/21 months ' salary as an implied condition of service had been established.
It therefore ordered the appellant to pay that amount after taking into account one month 's salary already paid by it.
It is this award of the tribunal which has been brought before us by special leave.
The main contention on behalf of the appellant are two fold: (1) It is urged that the tribunal erred in holding that payment of bonus as an implied condition of service need not be attached to any festival; (2) On the undisputed facts of this case, the tribunal was not right in holding that a case had been made out for (1) [1960] 1 S.C.R. 24.
479 payment of some bonus as an implied condition of service, and in any case, even if a case had been made out for pay ment of some bonus, it could not be at the rate of 1 1/2 months ' salary.
Turning to the first contention raised on behalf of the appellant, we are of opinion that the tribunal was not right in holding that there could be an implied condition of service as to payment of bonus unconnected with any festi val.
In Ispahani 's case(1) the question raised was whether there was an implied condition of service for payment of some bonus at the time of puja festival in Bengal.
In that connection this Court laid down the tests for holding when it could be said that there was an implied condition of ser vice for payment of some bonus in connection with some festival.
This Court also pointed out that it was not necessary in order to establish an implied condition of service as to payment of some bonus at the time of a festival like puja in Bengal that the amount paid in connection with the festival should be uniform, and that in the absence of a uniform rate an implied agreement to pay something could be inferred.
Now where the payment is connected with a festival it is possible to infer that there is an implied condition to pay something at the time of the festival, even though the evidence discloses that in previous years payment has not been made at a uniform rate.
But it is difficult to see how the principle which applies to a case of payment at the time of a festival can be extended to infer an implied term of payment where the payment has been made entirely unconnected with any festival and at rates which have varied from year to year.
We are therefore of opinion that when this Court laid down that there was an implied condition of service to pay something about the time of puja festival in Ispahani 's case(2), it was clear that such implied condition of service could be inferred where the rate of payment was not uniform only when such payment was obviously connected with some festival.
In the present case also, the payment has not been uniform over the years and therefore before an implied term of service to pay bonus can be inferred it must be shown that the payment was connected with some festival.
It would in our opinion be impossible to infer an implied condition of service where payment has not been uniform in the past, unless such payment can be connected with some festival.
We are therefore of opinion that the tribunal was wrong in holding that an inference could be, drawn for payment of bonus as an implied condition of service in the circumstances of the present case when the payment was not uniform in the past even though it was not connected with any festival.
(1) [1960] 1 S.C.R. 24.
480 But that in our opinion does not dispose of the matter.
The evidence shows that payment of some bonus began to be made from the year 1945 46 in which year bonus varying from one month to 3 1/2 months ' salary was paid in this branch.
It may be added that the appellant has a number of other branches in other parts of the country.
What we are saying in this case is only concerned with the Cochin branch and may not necessarily be applicable to other branches of the appellant, the facts of which are not before us.
From 1946 47 to 1949 50, it appears that some lumpsum was paid, though the amount is not exactly known.
It is also not clear whether during the years 1945 46 to 1949 50 payment was made about Christmas time, as there is no evidence either way.
In 1950 51 it appears that 1 1/2 months ' salary was paid as bonus.
No payment appears to have been made in that year about Christmas time, though it is said that 1 1/2 months ' salary was paid as bonus sometime afterwards.
From 1951 52 right upto 1958 59, payment was made at the rate of one month 's salary to two months ' salary about Christmas time.
It is clear therefore that at any rate since 1951 52 payment is connected with Christmas festival, though there is no clear evidence as to the earlier payments being connected with Christmas.
At the same time there is no clear evidence that those payments were not connected with Christmas even though payment for the year 1950 54 might have been made sometime after Christmas.
On the whole therefore it seems to us that it is possible to infer that the payments which began from 1945 46 and have been made throughout upto 1958 59 were in all probability connected with Christmas festival.
This inference in our opinion is strengthened by the fact that from 1951 52 undoubtedly payments were connected with Christmas and were always made about Christmas time, even though there was adjustment on some occasions later on by payment of more amount or by reduction of the amount already paid by deducting some part of it from later salary.
We are therefore of opinion that we can infer from the evidence on the record that the payment in the present case is connected with Christmas festival.
Therefore even though the tribunal was wrong in holding that the payment need not be connected with any festival in a case like the present where the rate has not been uniform, the respondents have made out a case of payment of some bonus as an implied condition of service connected with a festival subject to what we say on the second contention raised on behalf of the appellant.
The appellant however contends that it has not been proved that the, payment of bonus was in connection with the Christmas festival on the undisputed evidence in this 481 case.
Now the evidence is that something used to be invari ably paid at least from 1951 52 about Christmas time.
Later on something mote was paid in some years.
In one year nothing more was paid and in three years the appellant took back part of the payment which had been made.
The appel lant 's contention is that the payment before Christmas which has been established in this case was only an advance in connection with the festival which was later adjustable from the salary of the workmen.
It is true that when the payment was made it was designated as an advance.
For example, when payment was made in December 1953, it was designated as an advance and it was stated in the notice that it would be treated as advance against any bonus and in the event of no bonus as advance against salary.
Even so, the evidence shows that the so called advance was never recovered in full.
Sometimes more was paid in addition to what had been paid in December.
Once nothing more was paid but the amount already paid in December was not recovered.
Three times something was recovered from what was paid in December; even so a minimum of one month 's salary out of the so called advance in December was always left with the workmen.
So though the amount paid in December was originally called an advance, at least one month 's salary out of the so called advance always remained with the workmen and was treated as bonus connected with Christmas festival.
The fact that the payment was originally called advance would not detract from the conclusion that some amount was really paid as bonus in connection with Christmas festival.
There is no evidence to show that this amount was paid ex gratia.
In this connection our attention is drawn to what happened in April 1954.
Then a notice was given about pay ment of additional bonus which was called ex gratia.
The evidence however shows that in 1953 54 one month 's salary was paid in December and in addition half a month 's salary was paid later on and it was this additional half month 's salary which was designated as ex gratia payment.
There is nothing to show that the payment made in December was ever designated as ex gratia payment.
It could hardly be so designated for it was usually called an advance which was claimed as recoverable though the whole of it was never recovered.
In spite of the payment made in December being called an advance, we are of opinion that on the evidence in this case it is clear that part of the advance was made as a bonus in connection with Christmas festival.
It is there fore established on the evidence that there was an implied condition of service between the appellant and its workmen that something would be paid every year about Christmas time as festival bonus.
L/P(D)ISCI 16 482 The next question to which we turn is the minimum amount which has to be paid as an implied condition of service.
Here again the evidence shows that the minimum that has been paid, at any rate since 1951 52, is one month 's salary.
Sometimes more has been paid, but one month 's salary seems to have been paid in connection with Christmas for an unbroken period of time, which is long enough to permit an inference that there is an implied condition of service for payment of one month 's salary as festival bonus.
connected with Christmas in this branch of the appellant.
We cannot agree with the tribunal that the evidence shows a minimum payment of 1 1/2 months ' salary at the time of Christmas.
It is true that if we take into account what was.
paid later also over the entire period from 1950 51, the minimum is 1 1/2 months ' salary , but in a case of payment which is not at a uniform rate we have to connect the payment with a festival (in this case Christmas).
We can therefore only look at the payment made in December to decide what is the minimum which may be treated as a condition of service.
Once it is proved that there was an implied condition of service, some amount has to be paid under the said implied term; what the minimum would be in that behalf must be decided as a question of fact.
On the evidence in this case it is clear that the minimum is only one month 's salary payable about Christmas time and this was actuallypaid in 1951 52 and 1953 54, though in other years more was paid which was later liable to adjustment.
We therefore hold that there is an implied condition of service between the appellant and its workmen that one month 's salary as the minimum would be paid as Christmas bonus to the workmen about Christmas time.
The decision of the tribunal therefore allowing 1 1/2 months ' salary as the minimum must be modified and We hold that payment of one month 's salary as Christmas bonus is proved as an implied condition of service between the appellant and its workmen on the admitted facts of the case.
The minimum of one month 's, basic salary has to be paid even if there is loss in any given year.
We may add that though this is the minimum, it would be open to the appellant to pay more if its profit position justifies the payment of more.
But we cannot agree with thetribunal that in the year 1958 59, the profit position of the appellant justifies payment of more than the minimum.
It has been found that in that year there was actually a small loss of Rs. 8,000/ suffered by the appellant.
Therefore even though the tribunal may be justified in awarding a reasonable amount as festival bonus once it is proved that something has to be paid as an implied condition of service towards such bonus, it cannot be said in this case that the tribunal was justified in giving anything beyond the minimum for 483 this was a year of loss.
We are therefore of opinion that the amount awarded as festival bonus for the year 1958 59 should be reduced to one month 's salary and order accord ingly.
Before we part with this appeal we should like to add that there was no stay order by this Court in this case.
The extra amount of 15 days ' salary awarded by the tribunal has already been paid to the workmen.
Mr. Pai has assured us that he would advise his client that the additional amount so paid may not be recovered back in the circumstances.
We therefore partly allow the appeal in the manner indi cated above.
In the circumstances we pass no order as to costs.
Appeal partly allowed.

summary/full:
An industrial dispute arose between the appellant and its workmen as to payment of bonus for the years 1957 58 and 1958 59.
The dispute was referred for adjudication to the tribunal.
The respondents claimed bonus on the basis that payment of some bonus at Christmas had become an implied condition of service between the appellant and its workmen.
The workmen claimed 1 1/2 months wages for each year on the basis of an implied term of service.
On these facts the tribunal held on the basis of the decision of this Court in M/s. Ispahani Ltd. vs Ispahani Employees Union that payment of bouns at the rate of 1 1/2 months ' salary as an implied condition of service had been established.
It is this award of the tribunal which ha, , been challenged before this Court.
Held: (i) Where the payment of bonus is connected with a festival it is possible to infer that there is an implied condition to pay something at the time of the festival, even though the payment has not been made at a uniform rate in previous years.
In the present case, the payment has not been uniform over the years and before an implied term of service to pay bonus can be inferred it must be shown that the payment was connected with some festival.
Therefore the tribunal was not right in holding that there could be an implied condition of service as to payment of bonus unconnected with any festival.
In the present case, though the amount paid in December was originally called an advance, at least one month 's salary out of the so called advance always remained with the work men and was treated as bonus connected with Christmas festival.
On the facts of this case it was held that there was an implied condition of service between the appellant and its workmen that something would be paid every year about Christmas time as festival bonus.
M/s. Ispahani Ltd. vs Ispahani Employees ' Union, [1960] 1 S.C.R. 24, relied on.
(ii) In a case of payment which is made at different term and is not at a uniform rate the duty of the court is to connect the payment with a festival (in this case Christmas).
On the evidence in this case it is clear that the minimum is only one month 's salary payable about Christmas time and this was actually paid in 1951 52 and 1953 54.
Therefore the payment of one month 's salary as Christmas bonus is proved as an implied condition of service between the appellant and its workmen on the admitted facts of this case.