(1.)THE following Judgment of the court was delivered by :
(2.)THIS appeal by special leave is directed against the award passed by the Industrial court, Bombay, by which a scheme for gratuity has been framed in favour of the workmen represented by the respondent, Textile Labour Association, Ahmedabad, who are employed by the textile mills in Ahmedabad including the twenty appellant mills before us. In order to appreciate the points of law raised by the appellants in the present appeal we ought to state at the outset the material facts leading to the present dispute in which the impugned scheme for gratuity has been framed. On 13/06/1950, the respondent gave notice under s. 42(2) of the Bombay Industrial Relations Act, 1946 (Bom. XI of 1947) (hereinafter called the Act), intimating to the Mill Owners' Association at Ahmedabad (hereinafter called the Association) that it desired a change as specified in the annexure to the communication. The Annx. showed that the respondent wanted a change in that a scheme for gratuity should be framed wherever services of an employee are terminated by the mills on grounds of old-age, invalidity, 'incapacity or natural death. It was further claimed that the payment of gratuity in the said cases should be at the rate of one month's wages (including dearness allowance) per every year of service. Some incidental demands were also specified in the annexure. The demand thus made was not accepted by the Association, and so it was referred to the Industrial court. Pending the reference the Employees' Provident Funds Act, 1952 19 of 1952), came into operation on 4/03/1952, and it was urged before the Industrial court on behalf of the Association that since the statutory scheme of provident fund would soon become compulsory it would not be advisable to adjudicate upon the respondent's claim for the specified items of gratuity at that stage. THIS argument was accepted by the Industrial court; it held that when the scheme envisaged by the new Act is introduced it would be possible to see from what date it would be operative, and that, if after the introduction of the said scheme it be found that a sufficient margin is left, it would then be open to the respondent and the Association to make a fresh application for the institution of a gratuity fund either for all the employees or for the benefit of such of them as will have to retire within the next few years. It was on this ground that the demand made by the respondent was rejected on 18/04/1952.
It appears that the prescribed scheme under the Provident Funds Act came into operation on 1/10/1952. In June 1955, a fresh notice of change was given by the respondent to all the mills in respect of the demand for gratuity and the said demand became the subject-matter of certain references to the Industrial court at Bombay under s. 73A of the Act. At that time the association and the respondent had entered into an agreement to refer all their disputes to arbitration, and in accordance with the spirit of the said agreement the references pending before the Industrial court in respect of gratuity were withdrawn and referred to the Board of Arbitrators. Before the Board it was, however, urged by the Association that, so long as the award passed by the Industrial court on the earlier reference was subsisting and in operation, a claim for gratuity which was the subject-matter of the said reference and award could not be properly or validly considered by the Board. This objection was upheld by the Board, and so it made no provision for gratuity. The decision of the Board of Arbitrators in the said proceedings was published on 25/07/1957.
After the said decision was made and before it was published the respondent made the present application for modification of the earlier award under s. 116A of the Act on 6/07/1957. In this application the respondent alleged that there was sufficient justification for modifying the previous award and for introducing a scheme of gratuity as claimed by it. In this application a demand for gratuity was made on the following lines:-
It appears that in the application thus made a typing mistake had crept in which failed to type properly the third category of cases. The respondent applied on August 21, 1657, for amendment of the said typing mistake and the said amendment was naturally allowed. It is the demand made by this application that is the subject-matter of the present proceedings under s. 116A of the Act.
In the present proceedings the Association did not file a written statement and in fact withdrew leaving it open to each mill to file a separate written statement of its own. It appears that there was a difference of opinion amongst the constituents of the Association. Accordingly written statements were filed on behalf of the 65 constituent mills and the large majority of the said written statements raised some preliminary objections against the competence of the present proceedings and disputed the respondent's claim for gratuity also on the merits. The industrial court has overruled all the preliminary objections and on the merits it has framed a scheme for gratuity on industry-cum-region basis. The award framing the said scheme was pronounced on September 16, 1957. It is against this award that 21 out of the 65 mills have come to this court by special leave. One of the appellant mills has subsequently withdrawn from the appeal with the result that out of 65 mills 45 mills do not feel aggrieved by the award but 20 mills do; and the contentions raised by them fall to be considered in the present appeal.
Before dealing with the merits of the points raised by the appellants it would be relevant to refer very briefly to the relevant provisions of the Act. The Act has been passed by the Bombay Legislature because it thought that ' it was expedient to provide for. the regulation of the relations of employers and employees in certain matters, to consolidate and amend the law relating to the settlement of industrial disputes and to provide for certain other purposes '. With this object the Act has made elaborate provisions for the regulation of industrial relationships and for the speedy disposal of industrial disputes. An ' industrial dispute ' under s. 3, sub-s. (17), means 'any dispute or difference between an employer and employer, or between employers and employees, or between employees and employees and which is connected with any industrial matter '. The expression ' industrial matter has been inclusively defined in a very wide sense. Approved Union ' in s. 3(2) means ' a union on the approved list' ' primary union ' under s. 3(28) means 'a union for the time being registered as a primary union under the Act registered union ' under s. 3(30) means ' a union registered under the Act ', while ' representative union 'under s. 3(33) means ' a union for the time being registered as a representative union under the Act.'. Section 3(39) defines ' wages ' as meaning ' remuneration of all kinds capable of being expressed in terms of money and payable to an employee in respect of his employment or work done in such employment, and includes, inter alia, any gratuity payable on discharge '. Section 42, sub-s. (2), provides that an employee desiring a change in respect of an industrial matter not specified in Schedule I or II shall give notice in the prescribed form to the employer through the representative of employees but shall forward a copy of the same to the Chief Conciliator, the Conciliator of the industry concerned for the local area, the Registrar, the Labour Officer, and such other person as may be prescribed. Section 66(1) provides, inter alia, that if an employer and a representative union or aNy other registered union which is the representative of the employees by a written agreement agree to submit any present or future industrial dispute or class of such disputes to the arbitration of any person, whether such arbitrator is named in such agreement or not, such agreement shall be called submission. We have already noticed that the Association and the respondent had entered into a submission in respect of several disputes which were referred to the Board of Arbitrators. Section 73A is important for our purpose; it deals with reference to arbitration by unions, and provides that ' notwithstanding anything contained in this Act, a registered union which is a representative of employees, and which is also an approved union, may refer any industrial dispute for arbitration to the industrial court subject to the proviso prescribed under it.' It is under s. 73A that the reference was made on the earlier occasion to adjudicate upon the respondent's claim for a gratuity as specified in its notice of change.
(3.)THAT takes us to ss. 116 and 116A. Section 116 provides, inter alia, for the period during which an award would be binding Section 116(1) lays down in regard to an award that it shall cease to have effect on the date specified therein, and if no such date is specified, on the expiry of the period of two months from the date on which notice in writing to terminate such an award is given in the prescribed manner by any of the parties thereto to the other party, provided that no such notice shall be given till the expiry of three months after the award comes into operation; in other words, the award cannot be terminated at least for three months after it has come into operation; thereafter it may be terminated as prescribed by s. 116(1). With the rest of the provisions of s. 116 we are not concerned in the present appeal. SeCtion 116A(1) prescribes, inter alia, that any party who under the provisions of s. 116 is entitled to give notice of termination of an award may, instead of giving such notice, apply after the expiry of the period specified in sub-s. (2) to the industrial court making the award for its modification. It is unnecessary to set out the other provisions of s. 116A. The award under appeal has been made by the industrial court on the application made by the respondent under s. 116A.
The first contention raised before us by the learned Attorney-General on behalf of the appellant is that the application for modification made by the respondent under s. 116A is incompetent, because what the respondent seeks is not any modification of the earlier award which is permissible under s. 116A, but a reversal and a revision of the said award which is not permissible under the said section. The expression ' modification of the award ' may include alteration in the details of the award or any other subsidiary incidental matters. In this connection it must be borne in mind that there is a radical difference between the meaning of the word ' change ' as distinguished from the meaning of the word ' modification '. Section 116(2) allows for a change or modification of the registered agreement, settlement or award in terms of the agreement, and that clearly brings out the difference between the two concepts of ' change ' and ' modification '. In cases falling under s. 116(2) the agreements or settlements can be wholly revoked and fresh ones substituted in their place by consent, or by consent they may be modified in subsidiary or incidental details. Where the Legislature wanted to provide for change it has expressly done so in s. 116(2) by using both the words ' changed ' or ' modified Section 116A, however, is confined only to modification of the award and not its change.
The same argument is placed in another form. It is contended that it was not the intention of the Legislature to permit the proceedings under s. 116A for change of policy underlying the Award or its essential framework. Such a result can be achieved only by terminating the award under s. 116(1) and raising an industrial dispute as provided by the Act. In support of this contention reliance has been placed on the observations made by Mukherjea, J., as he then was, in the case of Be: Delhi Laws Act, 1912(1) where the learned judge stated that ' the word 'modification' occurring in s. 7 of the Delhi Laws Act did not mean or involve any change of policy but was confined to alteration of such a character which keeps the policy of the Act intact and introduces such changes as are appropriate to local conditions of which the executive government is made the judge '. In the same case Bose, J. observed that 'the power to restrict and modify does not import the power to make essential changes '.