PUBLIC UTILITY SERVICES

PUBLIC UTILITY SERVICES

FINAL DRAFT OF LABOUR LAW

SUBMITTED TO: Dr. Vijay Kumar Vimal

SUBMITTED BY:
Saumya Kumar Singh
ROLL NO.—1561
SEMESTER- 4TH
B.A. L.L.B. (Hons.)
SESSION: 2016-2021

CHANAKYA NATIONAL LAW UNIVERSITY, PATNA

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PUBLIC UTILITY SERVICES

TABLE OF CONTENTS

ACKNOWLEDGEMENT………………………………………………………………..3

INTRODUCTION………………………………………………………………………..4

PUBLIC UTILITY SERVICES………………………………………………………….8

PUBLIC UTILITY SERVICES UNDER IDA, 1947……………………………………16

CONCLUSION…………………………………………………………………………..22

BIBLIOGRAPHY………………………………………………………………………..23

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ACKNOWLEDGEMENT

I would like to thank my faculty, Dr. Vijay Kumar Vimal, whose assignment of such a relevant
and interesting topic made me work towards knowing the subject with a greater interest and
enthusiasm and moreover he guided me throughout the project.

I owe the present accomplishment of my project to my friends, who helped me immensely with
sources of research materials throughout the project and without whom I couldn’t have completed
it in the present way.

I would also like to thank the library staff for working long hours to facilitate us with required
material going a long way in quenching our thirst for education.

I would also like to extend my gratitude to my parents and all those unseen hands that helped me
out at every stage of my project.

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CHAPTER-1
INTRODUCTION

Industrial Disputes Act, 1947-

The Industrial Disputes Act, 1947 extends to the whole of India and regulates Indian labour
law so far as that concerns trade unions as well as Individual workman employed in any Industry
within the territory of Indian mainland. It came into force April 1, 1947.

The objective of the Industrial Disputes Act is to secure industrial peace and harmony by providing
machinery and procedure for the investigation and settlement of industrial disputes by conciliation,
arbitration and adjudication machinery which is provided under the statute. The main and ultimate
objective of this act is "Maintenance of Peaceful work culture in the Industry in India" which is
clearly provided under the Statement of Objects & Reasons of the statute.1

The laws apply only to the organized sector. Chapter V talks about the most important and often
in news topic of 'Strikes and Lockouts'. It talks about the Regulation of strikes and lockouts and
the proper procedure which is to be followed to make it a Legal instrument of 'Economic Coercion'
either by the Employer or by the Workmen. Chapter V-B, introduced by an amendment in 1976,
requires firms employing 300 or more workers to obtain government permission for layoffs,
retrenchments and closures. A further amendment in 1982 (which took effect in 1984) expanded
its ambit by reducing the threshold to 100 workers.2

The Act also lays down:

The provision for payment of compensation to the workman on account of closure or lay off or
retrenchment. The procedure for prior permission of appropriate Government for laying off or

1
labour.kar.nic.in

2
P. K. Padhi, LABOUR AND INDUSTRIAL LAWS.

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retrenching the workers or closing down industrial establishments. Unfair labour practices on part
of an employer or a trade union or workers.

The Industrial Disputes Act extends to whole of India and applies to every Industry and its various
industrial establishment carrying on any business, trade, manufacture or distribution of goods and
services irrespective of the number of workmen employed therein.3

Every person employed in an establishment for hire or reward including contract labour,
apprentices and part-time employees to do any manual, clerical, skilled, unskilled, technical,
operational or supervisory work, is covered by the Act.

This Act though does not apply to persons mainly in managerial or administrative capacity, persons
engaged in a supervisory capacity and drawing > 10,000 p.m or executing managerial functions
and persons subject to Army Act, Air Force and Navy Act or those in police service or officer or
employee of a prison.4

Public Utility-

A public utility (usually just utility) is an organization that maintains the infrastructure for a public
service (often also providing a service using that infrastructure). Public utilities are subject to forms
of public control and regulation ranging from local community-based groups to statewide
government monopolies.

The term utilities can also refer to the set of services provided by these organizations consumed
by the public: electricity, natural gas, water, sewage, telephone, and transportation. Broadband
internet services (both fixed-line and mobile) are increasingly being included within the
definition.5

3
labour.kar.nic.in

4
P. K. Padhi, LABOUR AND INDUSTRIAL LAWS.
5
labour.gov.in

5
PUBLIC UTILITY SERVICES

United States-
In the United States, public utilities are often natural monopolies because the infrastructure
required to produce and deliver a product such as electricity or water is very expensive to build
and maintain.

As a result, they are often government monopolies, or if privately owned, the sectors are specially
regulated by a public utilities commission. The first public utility in the United States was a grist
mill on Mother Brook in Dedham, Massachusetts.

Developments in technology have eroded some of the natural monopoly aspects of traditional
public utilities. For instance, electricity generation, electricity retailing, telecommunication, some
types of public transit and postal services have become competitive in some countries and the trend
towards liberalization, deregulation and privatization of public utilities is growing. However, the
infrastructure used to distribute most utility products and services has remained largely
monopolistic.6

Public utilities can be privately owned or publicly owned. Publicly owned utilities include
cooperative and municipal utilities. Municipal utilities may actually include territories outside of
city limits or may not even serve the entire city. Cooperative utilities are owned by the customers
they serve. They are usually found in rural areas. Publicly owned utilities are non-profit. Private
utilities, also called investor-owned utilities, are owned by investors, and operate for profit, often
referred to as a rate of return.

Public utilities provide services at the consumer level, be it residential, commercial, or industrial
consumer. In turn, utilities and very large consumers buy and sell electricity at the wholesale level
through a network of RTOs and ISOs within one of three grids, the eastern grid, Texas, which is a
single ISO, and the western grid.7

6
www.labour.gov.in
7
www.legalserviceindia.com

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United Kingdom and Ireland-

In the United Kingdom and Ireland, the state, private firms, and charities ran the traditional public
utilities. For instance, the Sanitary Districts were established in England and Wales in 1875 and in
Ireland in 1878.

The term can refer to the set of services provided by various organizations that are used in everyday
life by the public, such as: electricity generation, electricity retailing, electricity supplies, natural
gas supplies, water supplies, Sewage works, sewage systems and broadband internet services.
They are regulated by Ofgem, Ofwat and Ofcom. Disabled community transport services may
occasionally be included within the definition. They were mostly privatised in the UK during the
1980s.8

8
www.reference.findlaw.com

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CHAPTER-2

PUBLIC UTILITY SERVICES

Even before independence some of the important public utility services were owned, managed and
administered by the state. Posts, Telegraphs, Telephones, Railroads are well known examples.
After independence one of the foremost questions to be resolved by the policy-makers was with
regard to economic policies to be followed by the state. In pursuance of the avowed objective of
ushering in a socialist pattern of society, it was a foregone conclusion that the state would in a big
way assume direct responsibility for production, distribution and management of goods and
services. The Industrial Policy Resolution of 1948 had in no uncertain terms laid stress on the role
of state enterprise in industrial development.9

It was, however, the revised Resolution of 1956 which has now for a long time been the basis and
justification for conferment of commercial responsibilities on the state. It stated: "The adoption of
the socialist pattern of society as well as the need for planned and rapid development requires that
all industries of basic and strategic importance or in the nature of public utility services should be
in the public sector." The Preamble of the Constitution was also amended to include the word
"Socialist" as an essential attribute of the Republic. In accordance with this directional emphasis
there has been a phenomenal rise in the number of public undertakings. Most public utility services
have since been nationalized. These include air services, gas, electricity, insurance and banking.10

A service which takes care of some basic need of the people is affected with public interest and it
is bound to acquire the characteristic of a public utility service in the course of time.11

Since the service is essential and almost indispensable, an obligation is imposed on the provider
of this service to make it available to the general public in a fair and non-discriminatory manner.

Two basic factors make it necessary to give exclusive or near-monopolistic rights to the operators
of the public utility service. First, from a social point of view the nature of the service is such that
it must be made available to all sections of the society at a fair and reasonable price. To enable the

9
Gillian Morris and Simon F. Deakin, Labour Law.
10
P. K. Padhi, LABOUR AND INDUSTRIAL LAWS.
11
Munn v. Illinois, 94 U.S. 113 (1877) the court made the significant observation: "When, therefore, one devotes his
property to a use in which public has an interest, he, in effect grants to the public an interest in that use, and must
submit to be controlled by the public for the common good, to the extent of the interest created."

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provider of service to do so it becomes necessary to curtail competition and place the enterprise in
some privileged position so that it meets social demands in an impartial and effective manner.
Second, in view of the vast demand and utility of the service, the provider of service must raise
huge capital for economical operation of the enterprise. For this purpose, it may often be necessary
to vest in it the powers to borrow money and of eminent domain. It is only in such conditions of
capital and monopolistic privileges that public utility services are owned and operated by the
private enterprise.12

To ensure that it does not abuse these privileges, it has been found necessary to regulate public
utilities. In Davies Warehouse Co. v. Brown, it was observed by Chief Judge Vinson:

The justification for the regulation of utility rates being the absence of competition, regulation
should aim to produce the same results as competition would do if competition were economically
desirable and feasible neither more nor less.13

Airtransport-

Air services were nationalised as early as 1953 with the enactment of the Air Corporations Act,
1953. To catch up with the latest technology and to provide an efficient, safe and economical
service, massive investment has been made by the state. India is striving to meet its demands in
respect of air travel through Air India International, Indian Airlines, Vayudoot and Helicopter
Corporation, all state-owned undertakings. While Air India is an international airline catering to
international passengers, the other undertakings grapple with problems in the domestic sector.
There has been an enormous rise in the number of passengers travelling by air. In 1987-88 more
than 11 million passengers travelled by Indian Airlines which has a fleet of 11 Airbuses, 27
Boeings, and a Turbo Fleet of seven HS-748.12 As against other public sector undertakings, Indian
Airlines has been consistently showing a profit. Recent aircrashes have, however, enabled
consumers to look more closely into the affairs of this important nationalised service. There has
been vehement criticism of an outworn fleet, inadequate landing facilities and overworked staff
posing grave threat to the safety of passengers.14 There have been frayed tempers due to delays

12
www.advcatekhoj.com
13
Gillian Morris and Simon F. Deakin, Labour Law.
14
Gillian Morris and Simon F. Deakin, Labour Law.

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and mismanagement. The evils of monopoly have surfaced, and the relationship between
consumers and the management is increasingly marked by antagonism and distrust.15

Regulation of civil aviation-

Under the Aircraft Act, 1934 and the rules framed thereunder the Director General of Civil
Aviation is the Regulatory Authority for ensuring safety in the air. It issues licenses of various
kinds to pilots after holding examinations and other tests. Its duty includes surprise checks of
aircraft to determine airworthiness and compliance with essential requirements laid down in the
law. It has come to light that this organization does not have qualified personnel on its staff, but
that it depends upon the experts of the carrier and airport authorities in the discharge of its duties.
The criticism that it relies heavily on experts who are part and parcel of the organization or
authority to be regulated, therefore, is largely correct. Malpractices in Indian Airlines which have
a bearing on safety have come to light in reports of Courts of Inquiry. There are mandatory checks
to ensure that an aircraft is in a proper condition, or that the pilot is physically fit to undertake the
flight. There have been complaints that most of the time these do not take place, but the
maintenance staff is made to certify compliance with these requirements. Two blank certificates
duly signed by responsible officers of Indian Airlines have been published in the newspapers, one
regarding check "B" Inspection Schedule and another of the state of fitness of the pilot.
Consequently it has been suggested that in its quest for profit, Indian Airlines has adopted an
indifferent attitude to safety. The contention that excessive fleet utilisation by introducing several
scheduled services under political pressure prevents the airlines from spending sufficient time to
conduct the mandatory inspection and checks is substantially true. It is well known that snags in
items in the Minimum Equipment List are carried forward beyond the prescribed limit and aircrafts
operated without attending to repetitive snags. In the Court of Inquiry investigating the causes of
accident of Boeing 737 at Ahmedabad, it was revealed that the ill-fated aircraft had developed 640
defects during six months preceding the crash which was recorded in the pilot's defect reports.
Some of the strictures passed by the Court of Inquiry against Indian Airlines in this connection are
instructive. The 75th Report of the Estimates Committee of the Lok Sabha has made the following

15
The Committee on Public Undertakings in its 34th Report had suggested that Indian Airlines (IA) should improve
technical reliability of its fleet. Though the government had pleaded that maintenance facilities of LA were adequate
and of high standard, the Committee was not inclined to accept this contention. It had noted that the "Committee
cannot but deplore the callous attitude of the Indian Airlines towards the safety and convenience of the passengers."
Report of the Action Token Sub-Committee of the Committee on Public Undertakings (1988-89) 3 (1989).

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observations: The committee are averse to the system of flying the aircraft with defects which are
of repetitive nature. The fact that flights are being authorized with such defects reflects
inadequacies in the system of repair and maintenance of aircraft. The Committee would like the
DGCA to devise ways and means to ensure that the airlines have adequate and proper arrangements
for maintenance of aircraft at the Base as well as enroute and that the flights are not authorized
until the defects, at least those of repetitive nature arc removed.16

Accident investigation-

It is generally accepted that an agency responsible for investigation of accidents must be distinct
from the agency responsible for safety regulation. For if the latter agency were to take upon itself
the function of investigating accidents, it becomes a judge of its own cause. In order to cover its
own lapses, it may be tempted to suppress faults or errors in safety regulation. It is for this very
good reason of ensuring the independence of accident investigation that in the United States, the
Federal Aviation Administration is responsible for safety regulation while the National
Transportation Safety Board is responsible for investigating accidents.22 In the United Kingdom
the Civil Aviation Authority is responsible for safety regulation while the Accident Investigation
Branch of the Department of Transport investigates accidents. In India, several Parliamentary and
Expert Committees have pressed for setting up an independent accident investigating agency. In
the 29th Report of the Estimates Committee (Third Lok Sabha), the Committee suggested the
setting up of an independent Accident Investigating Agency. The Estimates Committee of the
Fourth Lok Sabha repeated this recommendation in 1967 and again in 1968. The Committee on
Public Undertakings in their 42nd Report (1981-82) also recommended an independent Air Safety
Cell in government. The Ministry rejected this suggestion, claiming there would be duplication of
functions. However, in their Report on Action Taken, the committee reiterated that the present
arrangements, in which the Directorate of Air Safety functions under DGCA, which is responsible
for airport facilities at all the domestic airports could not be considered as satisfactory.17

In the 75th report of the Estimates Committee in 1983/84, the setting up of an accident
investigation agency was again mooted.
National Airports Authority In 1985 the enactment of National Airports Authority Act effected an

16
www.labour.gov.in
17
Gillian Morris and Simon F. Deakin, Labour Law.

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important change in the Directorate General of Civil Aviation. The Director General has been
completely relieved of the responsibility of providing airport facilities including landing and
navigational facilities. From the available information it appears that most of the airports in India
are grossly deficient in landing and communication facilities.24 A large number of airports are
operated in violation of the standards and recommendations framed by International Civil Aviation
Organisation (ICAO) in respect of runway strength, navigational facilities, fire-fighting
equipments and landing facilities.18

Thus out of 62 airports surveyed, in 48 the strength of the runway was less than the prescribed
minimum, i.e. LCN 68 for Airbus A 300 B2 and LCN 59 for Boeing 737-200. On the basis of
information supplied by Government of India,25 Consumer Education and Research Centre
(CERC), an Ahmedabad based consumer organisation has concluded that most of the airports are
deficient in fire-fighting equipment. Only a few airports have been provided with equipment
prescribed for the category of airports to which they belong. Investigations made by expert groups
and admissions made before the Court of Inquiry investigating into causes of accident of Boeing
737 at Ahmedabad on 19 October, 1988, reveal that standards and recommendations of ICAO in
respect of fire-fighting equipments and handling of emergencies are obeyed in their breach by the
National Airport Authority. It was found that an important airport was not provided with an
emergency plan for aircraft emergencies. It had no grid map which would have enabled the fire
services to move rapidly. It had no RIV or a corresponding vehicle of similar capacity. No
emergency drills had been conducted ever which would have given some knowledge of the terrain
and facilities existing at several places in the neighbourhood for fire-fighting purposes and tuned
the personnel to the exigencies of an emergency. Many human lives could have been saved and
suffering alleviated had ATC Ahmedabad and its fire-fighting unit performed its functions
according to set procedures and with proper equipment which was non-existent.19

18
www.labour.gov.in
19
Gillian Morris and Simon F. Deakin, Labour Law.

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PUBLIC UTILITY SERVICES

 M/S Jagdambay Rice General Mills & Ors. vs. Chairman, Permanent Lok-20

The Permanent Lok Adalat (Public Utility Services), Shaheed Bhagat Singh Nagar, in the exercise
of powers under section 22-c of the legal services authority act, 1987, has decided a misc.
application of the petitioner holding that it has got jurisdiction to entertain and try the controversy
while dismissing the application for staying its hand away from the controversy. The short question
which has arisen before this Court is the competence of the Permanent Lok Adalat (Public Utility
Services), under the Legal Services Authority Act, 1987 to adjudicate upon the controversy
regarding a direction to release money. Counsel for respondent No.2 has informed this Court that
a suit for recovery has already been filed by respondent No.2 in the civil Court and respondent
No.2 will avail the remedy under the civil law as the jurisdiction of civil Court under section 9 of
the code of civil procedure, is neither expressly nor impliedly barred.

The Court has considered the facts and circumstances of the case. In view of respondent No.2
having already availed the appropriate remedy, this petition has rendered infructuous. In case
respondent No.2 opts not to proceed before the Permanent Lok Adalat (Public Utility Services),
Shaheed Bhagat Singh Nagar, there will be no legal obstacle in continuation of the civil suit and
for adjudication of the rights of respondent No.2. The withdrawal of proceedings from the
Permanent Lok Adalat (Public Utility Services), Shaheed Bhagat Singh Nagar, will neither
prejudice the legal rights of respondent No.2 nor the principles of Order 2 Rule 2 CPC or res
judicata/ constructive res judicata will be applicable.

 S.N. Pandey vs. UOI & Anr.-21

The challenge is to the validity of the Legal Services Authorities (Amendment) Act, 2002 (in short
“the Act”) whereby a new Chapter VI-A has been inserted relating to prelitigation conciliation and
settlement. It is quite apparent that this Chapter has been enacted as being complementary to
Section 89 of the Code of Civil Procedure, 1908 (in short “the Code”) which is a new provision
enacted and implemented with effect from 1-7-2002.

20
(2003)111 ILJ 887.
21
(2012) 8 SCC 261.

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PUBLIC UTILITY SERVICES

We have gone through the provisions of the said Chapter which contemplate the setting up of
Permanent Lok Adalats for deciding disputes in which public utility services is one of the matters
involved. It is quite obvious that the effort of the legislature is to decrease the workload in the
courts by resorting to alternative dispute resolution. Lok Adalat is a mode of dispute resolution
which has been in vogue since over two decades. Hundreds of thousands of cases have been settled
through this mechanism and is undisputedly a fast means of dispensation of justice. The litigation
is brought to a quick end with no further appeals or anguish to the litigants. The constitution of the
Permanent Lok Adalat mechanism contemplates the judicial officer or a retired judicial officer
being there along with other persons having adequate experience in the public utility services.

We do not find any constitutional infirmity in the said legislation. The Act ensures that justice will
be available to the litigant speedily and impartially. We do emphasise that the persons who are
appointed on the Permanent Lok Adalats should be persons of integrity and adequate experience.
Appropriate rules, inter alia in this regard, no doubt will have to be framed, if not already in place.

We uphold the validity of the said Act and hope that the Permanent Lok Adalats will be set up at
an early date. The Lok Adalats are enacted to primarily bring about settlement amongst the parties.
The parties are normally required to be present in person and since the impugned provisions are in
the interest of the litigating public, the Lok Adalats shall perform their duties and will function,
even if members of the Bar choose not to appear.

The petition is disposed of in the aforesaid terms.

 Management of Safdar Jung Hospital, Delhi vs Kuldip Singh-22

The declaration of any service as Public Utility Service by the appropriate Government as per
Schedule I presupposes the existence of Industry. Hence, service in Hospitals and dispensaries
contemplated by item 9 of Schedule I can be declared to be a public utility service only if they
satisfy the test of Industry.

22
AIR 1970 SC 1407.

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 Saxby & Farmer vs. Workmen-23

The appellant Company was a unit of Engineering Industry engaged in production of equipments
for the railways. It was declared a public utility service. The management curtailed unpaid festival
holidays as the system of unpaid holidays was no longer followed in any majority industry of any
region. It was held that there should be more concentration on increase of production and efficiency
than enjoying the holidays if the country is to march ahead on the road to prosperity. As such there
was no reason or justification for unpaid holidays not being curtailed.

23
AIR 1975 SC 534.

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CHAPTER-3

PUBLIC UTILITY SERVICES UNDER IDA, 1947.

The subject of Labour is placed in the Concurrent List of the Constitution of India, which
empowers both Central and State Governments to make laws on various labour matters. With
globalization and Liberalization there had been many changes in the socio - economic conditions
throughout the World. The open trade policy warranted the Labour laws to be updated to match
with the changing needs. All the Labour enactments are of immense value to the nation as they
have a direct bearing with the common man because Indian industries till date are manpower
intensive and Workers are the most important asset/backbone of the Country whose interest cannot
be compromised at any cost.24 The Central Labour Laws administered by the IR Division are as
under:-
1. Industrial Disputes Act, 1947
2. The Trade Unions Act, 1926
3. The Plantations Labour Act, 1951
4. The Industrial Employment (Standing Orders) Act, 1946
5. The Weekly Holidays Act, 1942

Besides handling the above mentioned Central Acts, the following State Acts are also examined
in the Ministry to ensure whether the amendments proposed by the states are Constitutionally
valid; whether there is any conflict with any existing Central Law, and, if so, whether the conflict
may be consciously permitted; and whether the proposed State enactments involve any deviation
from existing national or Central policy to its detriment, or would be hindrance to enactment of
uniform laws for the country.25
1. The Shops & Establishments Act.
2. The National & Festival Holidays Act.26

24
www.advocatekhoj.com
25
Gillian Morris and Simon F. Deakin, Labour Law.
26
www.advocatetanmoy.com

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PUBLIC UTILITY SERVICES

As per Section 2(n) (vi) of the Industrial Disputes Act, 1947, the ‘appropriate Government’ may
declare any industry specified in the first Schedule of the Industrial Disputes Act, 1947 to be a
public utility service for a period of six months by issuing a Notification in the Official Gazette
which may extend from time to time for any period not exceeding six months if in the opinion of
the appropriate Government public emergency or public interest requires extension.27
IR(PL) Section examines requests received from the concerned administrative Ministry for
declaration of Public Utility Services to Industries specified in the first Schedule and otherwise
and wherever the Ministry feels that the same needs to be granted, Notifications are issued. 28

Section 2(n) of Industrial Disputes Act- Defines Public Utility Service:

(i) any railway service [or any transport service for the carriage of passengers or goods by air];

[(ia) any service in, or in connection with the working of , any major port or dock;]

(ii) any section of an industrial establishment, on the working of which the safety of the
establishment or the workmen employed therein depends;

(iii) any postal, telegraph or telephone service;

(iv) any industry which supplies power, light or water to the public;

(v) any system of public conservancy or sanitation;

(vi) any industry specified in the [First Schedule] which the appropriate government may,
if satisfied that public emergency or public interest so requires, by notification in the
Official Gazette, declare to be a public utility service for the purposes of this Act, for such
period as may be specified in the notification.

27
P. K. Padhi, LABOUR AND INDUSTRIAL LAWS.
28
www.legalserviceindia.com

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Section 22 of Industrial Disputes Act- Prohibition of Strikes and Lock-outs:29

(1) No person employed in a public utility service shall go on strike in breach of contract--

(a) without giving to the employer notice of strike, as herein- after provided, within six weeks
before striking; or

(b) within fourteen days of giving such notice; or

(c) before the expiry of the date of strike specified in any such notice as aforesaid; or

(d) during the pendency of any conciliation proceedings before a conciliation officer and seven
days after the conclusion of such proceedings.

(2) No employer carrying on any public utility service shall lock- out any of his workmen--

(a) without giving them notice of lock- out as hereinafter provided, within six weeks before locking
out; or

(b) within fourteen days of giving such notice; or

(c) before the expiry of the date of lock- out specified in any such notice as aforesaid; or

(d) during the pendency of any conciliation proceedings before a conciliation officer and seven
days after the conclusion of such proceedings.

(3) The notice of lock- out or strike under this section shall not be necessary where there is already
in existence a strike or, as the case may be, lock- out in the public utility service, but the employer
shall send intimation of such lock- out or strike on the day on which it is declared, to such authority
as may be specified by the appropriate Government either generally or for a particular area or for
a particular class of public utility services.

(4) The notice of strike referred to in sub- section (1) shall be given by such number of persons to
such person or persons and in such manner as may be prescribed.

29
The Industrial Disputes Act, 1947.

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PUBLIC UTILITY SERVICES

(5) The notice of lock- out referred to in sub- section (2) shall be given in such manner as may be
prescribed.30

(6) If on any day an employer receives from any persons employed by him any such notices as are
referred to in sub- section (1) or gives to any persons employed by him any such notices as are
referred to in sub- section (2), he shall within five days thereof report to the appropriate
Government or to such authority as that Government may prescribe the number of such notices
received or given on that day.

In a move that will decongest the civil courts of petty disputes relating to public utility services,
the Maharashtra government has decided to set up four Permanent Lok Adalats to hear such cases.

For example, a consumer of Maharashtra State Electricity Board who feels that he has been
overbilled can approach such Lok Adalats. The Adalat will first work towards an amicable
settlement between the two parties but if that is not acceptable, it go for a final settlement which
will be deemed to be a decree of the civil court. To appeal against the final settlement, the litigant
will have to approach the high court.

The four Permanent Lok Adalats, which will hear cases involing sums under Rs 10 lakhs, will be
set up at Mumbai, Pune, Nagpur and Aurangabad. They will be headed by retired district judges
who will be entitled to a fee equivalent to their last drawn salary.31

 All India Bank Employees Association v. I. T.-32

The Supreme Court held, "The right to strike or right to declare lock out may be controlled or
restricted by appropriate industrial legislation and the validity of such legislation would have to be
tested not with reference to the criteria laid down in clause (4) of article 19 but by totally different
considerations."

30
www.advocatekhoj.com

31
www.timesofindia.indiatimes.com

32
(1962), SC. 171. A.P.

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 Mineral Miner Union vs. Kudremukh Iron Ore Co. Ltd.- 33

It was held that the provisions of section 22 are mandatory and the date on which the workmen
proposed to go on strike should be specified in the notice. If meanwhile the date of strike specified
in the notice of strike expires, workmen have to give fresh notice. It may be noted that if a lock
out is already in existence and employees want to resort to strike, it is not necessary to give notice
as is otherwise required.

 Sadual textile Mills v. Their workmen-34

Certain workmen struck work as a protest against the lay-off and the transfer of some workmen
from one shift to another without giving four days notice as required by standing order 23. On
these grounds a question arose whether the strike was justified. The industrial tribunal answered
in affirmative. Against this a writ petition was preferred in the High Court of Rajasthan.

 Ballarpur Collieries Co. v. H. Merchant-35

It was held that where in a pending reference neither the employer nor the workmen were taking
any part, it was held that section 23 has no application to the strike declared during the pendency
of such reference.

 M/S Burn & Co. Ltd. V. Their Workmen-36

It was laid down that mere participation in the strike would not justify suspension or dismissal of
workmen. Where the strike was illegal the Supreme Court held that in case of illegal strike the
only question of practical importance would be the quantum or kind of punishment. To decide the
quantum of punishment a clear distinction has to be made between violent strikers and peaceful
strikers.

 Punjab National Bank v. Their Employees-37

It was held that in the case of strike, the employer might bar the entry of the strikers within the
premises by adopting effective and legitimate method in that behalf. He may call upon employees

33
AIR 2006 SC 447.
34
1961 SCR (3) 204
35
AIR 1950 Cal 116
36
1956] 30 I.T.R. 388 424
37
[1958] S.C.R. 667.

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to vacate, and, on their refusal to do so, take due steps to suspend them from employment, proceed
to hold proper inquires according to the standing order and pass proper orders against them subject
to the relevant provisions of the Act.

 Cropton Greaves Ltd. v. Workmen-38

It was held that in order to entitle the workmen to wages for the period of strike, the strike should
be legal and justified. A strike is legal if it does not violate any provision of the statute. It cannot
be said to be unjustified unless the reasons for it are entirely perverse or unreasonable. Whether
particular strike is justified or not is a question of fact, which has to be judged in the light of the
fact and circumstances of each case. The use of force, coercion, violence or acts of sabotage
resorted to by the workmen during the strike period which was legal and justified would disentitle
them to wages for strike period.

 Syndicate Bank v. K. Umesh Nayak-39

The Supreme Court held that a strike may be illegal if it contravenes the provision of section 22,
23 or 24 of the Act or of any other law or the terms of employment depending upon the facts of
each case. Similarly, a strike may be justified or unjustified depending upon several factors such
as the service conditions of the workmen, the nature of demands of the workmen, the cause led to
strike, the urgency of the cause or demands of the workmen, the reasons for not resorting to the
dispute resolving machinery provided by the Act or the contract of employment or the service rules
provided for a machinery to resolve the dispute, resort to strike or lock-out as a direct is prima
facie unjustified. This is, particularly so when the provisions of the law or the contract or the
service rules in that behalf are breached. For then, the action is also illegal.

 Rothas Industries v. Its Union-40

The Supreme Court held that the remedy for illegal strike has to be sought exclusively in section
26 of the Act. The award granting compensation to employer for loss of business though illegal
strike is illegal because such compensation is not a dispute within the meaning of section 2(k) of
the Act.

38
AIR 1978 SC 1489.
39
1995 AIR 319.
40
AIR 1971 Bom 52.

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CONCLUSION

Utilities typically create a good or service at one location, and then distribute it over a ‘network’
where it is delivered to numerous customers for end use. The use of a network structure creates
special issues for utilities. The network often exhibits economies of scale and involves substantial
sunk costs, so the issue of natural monopoly has played an important role in utility literature. The
network may require the use of public streets or other rights of way, so government involvement
is of particular concern. Since several firms often utilize the network, there are ‘network
externalities’ or congestion if its use is not properly priced. The activities of utilities can be broken
down into three components: production, transmission, and distribution. While the production
component has, in the US, been almost exclusively privately owned, the transmission and
distribution stages have been either private or government-owned.

The right to strike is not fundamental and absolute right in India in any special and common law,
whether any undertaking is industry or not. This is a conditional right only available after certain
pre-condition are fulfilled. If the constitution maker had intended to confer on the citizen as a
fundamental right the right to go on strike, they should have expressly said so. On the basis of the
assumption that the right to go on strike has not expressly been conferred under the Article 19(1)
(c) of the Constitution. Further his Lordship also referred to the observation in Corpus Juris
Secundum that the right to strike is a relative right which can be exercised with due regard to the
rights of others. Neither the common law nor the fourteenth Amendment to the federal constitution
confers an absolute right to strike. It was held in the case that the strike as a weapon has to be used
sparingly for redressal of urgent and pressing grievances when no means are available or when
available means have failed to resolve it. It has to be resorted to, to compel the other party to the
dispute to see the justness of the demand. It is not to be utilized to work hardship to the society at
large so as to strengthen the bargaining power. Every dispute between an employer and employee
has to take into consideration the third dimension, viz. the interest of the society as whole.

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BIBLIOGRAPHY

BOOKS-

P. K. Padhi, LABOUR AND INDUSTRIAL LAWS, 2007.

H.L. Kumar, Compliances Under Labour Laws, 2010.

Gillian Morris and Simon F. Deakin, Labour Law, 1995.

WEBSITES-

www.reference.findlaw.com

www.casemine.com

www.advocatekhoj.com

www.smartlearningway.blogspot.in

www.timesofindia.indiatimes.com

www.legalserviceindia.com

www.labour.gov.in
www.indiankanoon.org

www.labour.kar.nic.in

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