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The Railway Employees' ...

vs The Joint Commissioner Of Labour on 13 November, 2013

Madras High Court


The Railway Employees' ... vs The Joint Commissioner Of Labour on 13 November, 2013

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED:- 13-11-2013

CORAM:

THE HONOURABLE MR.JUSTICE N.PAUL VASANTHAKUMAR


AND
THE HONOURABLE MR.JUSTICE K.RAVICHANDRABAABU

W.A.No. 314 of 2010 and M.P.No. 1 of 2010

1. The Railway Employees' Co-operative


Credit Society Limited (Reg. No.52/1907)
Old Zoo Road,
Ashok Vihar Complex
Chennai 3
rep. By its Secretary ... Appellant

Versus

1. The Joint Commissioner of Labour


Labour Welfare Board Buildings
6th Floor, DMS Compound
Chennai 6.

2. All India Multi Societies Employees Association


No.26, Thiyagaraya Pillai Street,
Seven Wells
Chennai 1.

3. The Railway Employees Co-operative


Bank Staff Union
rep. By its General Secretary
No.5/5 V.O.C.Nagar Main Road
Anna Nagar East,
Chennai 102.

4. Railway Employees Co-operative Society


Staff Union (RECSSU)

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The Railway Employees' ... vs The Joint Commissioner Of Labour on 13 November, 2013

(Regd. No. 3432/CNI)


Rep. By its General Secretary
R.C. Cyril Thiyagaraj
No.2/30, Lettangs Road,
Vepery,
Chennai 7. ... Respondents

(R2 impleaded as per the order of the Court dated 26.2.2010. R3 impleaded as party respondent

Prayer:- Writ Appeal filed under Clause 15 of the Letters Patent against the order of
For Appellants :- Mr. R.Muthukumarasamay,
Senior Counsel for
Mr.A.Jenasenan

For Respondents :- Mr.R.Thiagarajan


Senior Counsel
for Mr.V.Perumal (R3)
Ms. D.Nagasaila (R4)
Mr.R.Ravichandran ,
Addl. Govt. Pleader (R1)

JUDGMENT

K.RAVICHANDRABAABU,J.

This writ appeal is directed against the order of the learned single Judge made in W.P.No. 15406 of
2000 dated 21.1.2010.

2. The appellant is the writ petitioner. The appellant challenged the order of the first respondent
herein dated 24.8.2000 in the writ petition. Through the said communication, the first respondent
informed the appellant that their Society registered under the Multi State Co-operative Societies Act
1984 comes under the control of the State Government and that there is no over riding provisions
stating that the Industrial Employment Standing Orders Act 1946 will not apply to the
establishments registered under the Multi State Co-operative Societies Act, 1984. Therefore, the first
respondent requested the petitioner/appellant to follow the provisions laid down under the
Industrial Employment Standing Orders Act,1946. The learned single Judge dismissed the writ
petition by rejecting the contention of the appellant with cost of Rs. 5,000/-

3. The case of the appellant as the writ petitioner before the learned single Judge is as follows:-

Appellant Society is a Multi State Co-operative Society established in the year 1907. The Society
comprises the Railwaymen working in the States of Tamil Nadu, Andhra Pradesh, Karnataka,
Maharashtra and Goa as its members. It is deemed to be a registered society under the Multi State
Co-operative Societies Act, 1984. The All India Multi Society Employees Association addressed a
letter to the petitioner during August 1996, requesting them to frame and submit draft Standing
Orders under Section 3 of the Industrial Standing Orders Act, 1946 providing for the service
conditions of its employees. The petitioner replied by stating that their employees are governed by

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The Railway Employees' ... vs The Joint Commissioner Of Labour on 13 November, 2013

the regulations framed under the Multi State Co-operative Societies Act and therefore the question
of applying the Industrial Standing Orders Act would not arise. Hence the said Association sent a
petition to the first respondent and based on which an enquiry was conducted wherein the
petitioner submitted a detailed submissions. Again, a notice was issued on 28.2.2000 requiring the
petitioner to forward certain communications received from the Department of Agriculture, Govt of
India. The petitioner submitted a detailed letter on 6.3.2000 reiterating their earlier contentions.
They also enclosed a letter dated 28.1.1997 issued by the Department of Agriculture, Government of
India under which the Government of India has stated that the employees of the petitioner Society
would be governed by the regulations framed under Section 42(2)(e) of the Act and that the said
Regulations need not be certified under the Industrial Employment Standing Orders Act, 1946.
While that being the position, the impugned communication was issued by the first respondent
requiring the petitioner to follow the provisions laid down under the Industrial Employment
Standing Orders Act, 1946. Thus, aggrieved against the said communication, the above writ petition
came to be filed.

4. The first respondent resisted the said writ petition by filing a counter affidavit wherein it is stated
as follows:-

By virtue of Section 42(2)(e) of the Multi State Co-operative Societies Act, 1984, the Board cannot
frame all the service conditions and the matters set out under the Industrial Employment (Standing
Orders) Act, 1946, since the said provisions are only illustrative and not exhaustive. The Industrial
Employment (Standing Orders) Act, 1946 is a special Act, which will prevail over the Multi State
Co-operative Societies Act, 1984. The object of the Industrial Employment (Standing Orders) Act,
1946 is to require the employers to make the conditions of employment precise and definite and
therefore the same is applicable to the writ petitioner's establishment.

5. The learned single Judge, after hearing both sides, has found that the petitioner society is a
commercial establishment within the meaning of the Tamil Nadu Shops and Establishments Act,
1947 and once it is held that the petitioner is an "industrial establishment" under the Payment of
Wages Act, then automatically Section 3 (e) (1) of the Standing Orders Act, 1946, will get attracted.
The learned Judge further observed that insofar as having Certified Standing Orders are concerned,
the provisions of the Standing Orders Act will prevail as it is a special law. The learned Judge also
observed that the bye-laws/ regulations framed by the Board under Section 42(2)(e) of the Multi
State Co-operative Societies Act 1984 or under the subsequent enactment cannot have an overriding
effect. Thus, the learned Judge dismissed the writ petition also by imposing a cost of Rs. 5,000/- on
the petitioner.

6. Mr.R.Muthukumarasamy, learned Senior Counsel appearing for the appellant submitted as


follows:-

The definition of "industrial establishment" as defined under the Payment of Wages Act, 1936 has to
be confined only in respect of sub-clause (a) to (f) alone therein and cannot be extended to
sub-clause (h) which came to be introduced later by way of amendment. Insofar as the appellant's
case is concerned the appellant Society will not fall within the meaning of commercial

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establishments. Appropriate Government is only the central Government, since Multi State
Co-operative Society is controlled by Central Government . The appellant is a self financing society.

7. The learned Senior Counsel invited our attention to various provisions of law under the Multi
State Co-operative Societies Act, 2002, The Industrial Employment (Standing Orders) Act, 1946 and
the Payment of Wages Act, 1936 to contend that the appellant is not a commercial establishment nor
an industrial establishment within the meaning and definition of Section 2(a) to (f) of the Payment
of Wages Act, 1936, so as to attract the provisions under the Industrial Employment (Standing
Orders) Act, 1946. He also submitted that the first respondent being the authority under the State
Government has no power to issue the impugned communication. The decisions relied on by the
learned single Judge are in respect of Industrial Disputes Act, 1947 and therefore the same cannot
be applied to the facts and circumstances of the present case. The Industrial Employment (Standing
Orders) Act, 1946 is not supplemental to the Payment of Wages Act, 1936. In support of his
submissions, the learned Senior Counsel relied on the following decisions:-

1) 1995 (3) LLJ Suppl. 665 ( Valsad Jilla Sahakari Bank Ltd., Vs. D.K.Pat
2) 2007 (4) SCC 685 (Bharat Co-operative Bank (Mumbai) Ltd., Vs. Co-oper
3) 2011 (3) SCC 1 ( Girnar Traders (3) Vs. State of Maharashtra and

8. Per contra, Mrs. Nagasaila appearing for the 4th respondent submitted as follow

The Multi State Co-operative Societies Act 2002 is a general Act and the Industrial Employment
(Standing Orders) Act, 1946 is a special Act as far as the conditions of the employment is concerned.
The interpretation sought to be given by the appellant that the definition clause in the Standing
Orders Act being legislation by incorporation and so the subsequent amendment in the Payment of
Wages Act does not affect the definition in the Standing Orders Act is untenable because such an
interpretation would defeat the object of all the labour welfare legislations. Therefore, such
legislation is to be held as legislation by reference rather than legislation by incorporation. The
appellant is a commercial establishment as defined under Section 2(3) of the Tamil Nadu Shops and
Establishments Act, 1947. The Standing Orders Act applies to every industrial establishment
wherein one hundred or more workmen are employed or were employed. Merely because the
appellant is registered under the Multi State Co-operative Societies Act, it dose not make it an
industrial establishment under the control of the Central Government. In support of her
submissions, the learned counsel relied on the following decisions:-

1) 1981 (1) LLJ 1 ( Life Insurance Corporation of India Vs. D.J.Bahadur and others )

2) 1991 (1) LLJ 260 ( Tamil Nadu Water Supply and Drainage Board and another Vs.M.D.Vijay
Kumar and others )

3) AIR 1975 SC 1835 ( State of Madhya Pradesh Vs. M.V.Narasimhan)

4) AIR 1982 SC 697 ( Western Coalfields Ltd., Vs. Special Area Development Authority, Korba and
Another)

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5) 2006 (3) SLJ 461 Delhi (Indian Airelines Vs. Union of India and others)

6) 2010 Writ L.W. 199 (George Town Co-operative Vs. Deputy Commissioner of Labour)

7) 2010 (8) SCC 480 (Tata Memorial Workers Union Vs. Tata Memorial Centre and another)

8) 2007 (4) SCC 685 ( Bharat Co-operative Bank (Mumbai) Ltd., Vs. Co-operative Bank Employees
Union)

9. Heard the learned counsel on either side and perused the materials as well as the case laws cited
by the respective parties.

10. The appellant is the Co-operative Credit Society registered under the Multi State Co-operative
Societies Act, 1984 (Central Act 51 of 1984). The appellant is aggrieved against the communication
sent by the first respondent whereby the appellant Society was called upon to follow the provisions
laid down under the Industrial Employment (Standing Orders) Act, 1946 . By the impugned
communication, the first respondent also found that the appellant Society comes under the control
of the State Government. This communication is challenged by the appellant by contending

(i) that the provisions of the Standing Orders Act will not apply to the appellant as it is a multi-State
Co-operative Society registered under the Central Act 51/1984;

(ii) that the appropriate Government in respect of the appellant society is only the Central
Government and therefore the first respondent herein has no jurisdiction to send the impugned
communication;

(iii) that the appellant is not an industrial establishment as defined under Section 2(e)(i) of the
Standing Orders Act and

(iv) that the appellant Society is governed by the Multi State Co-operative Societies Act, 1984 (since
replaced by the Multi State Co-operative Societies Act, 2002), which is a special Act and not
governed by the Standing Orders Act, 1946.

11. By raising the above contentions the appellant filed the writ petition and the same was dismissed
by the learned single Judge by holding that the appropriate Government in respect of a multi-state
Co-operative Society is only the State Government. For arriving at such a conclusion, the learned
single Judge relied on the decision of the Apex Court reported in 2007 (4) SCC 685 (Bharat
Co-operative Bank (Mumbai ) Ltd., Vs. Co-operative Bank Employees Union). In the above said
decision, the Apex Court at paragraph No.30 has observed that the definition of "banking company"
will have to be read as it existed on the date of insertion of Section 2(bb) of the I.D.Act and so read,
the "appropriate Government" in relation to a multi-State Co-operative bank carrying on business in
more than one State, would be the State Government.

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12. The learned Senior Counsel appearing for the appellant submitted that the above decision made
by the Apex Court in respect of Industrial Disputes Act cannot be applied to the case on hand which
is in respect of a society registered under the Multi-State Co-operative Societies Act, 1984. The
learned Senior Counsel further contended that only the Central Government is the appropriate
Government.

13. We are unable to appreciate such a contention of the learned Senior Counsel, in view of the
categorical observation of the Apex Court in Bharat Co-operative Bank (Mumbai ) Ltd., case cited
supra, that a multi-State Co-operative Bank carrying on business in more than one State is governed
by only the State Government being the appropriate Government.

14. No doubt the said decision was rendered in respect of I.D. Act, 1947. But at the same time, the
very similar multi-State Co-operative Bank was under consideration in the above said case and the
Apex Court has found that the appropriate Government in respect of such multi-State Co-operative
Bank was only a State Government. At this juncture, it should be noted that the object of carrying on
the business by such multi-State Co-operative Bank may be at different States of this country. But
that itself does not confer the jurisdiction of the Central Government on such Multi State
Co-operative Bank. More over the appellant's own conduct would falsify their stand as rightly
pointed out by the learned counsel appearing for the fourth respondent. In a writ petition in
W.P.No. 19136 of 2011 filed by the very same appellant against the RTI proceedings, the appellant
herein in its affidavit filed therein in support of the said writ petition, contended that the Society is
governed by its bye-laws in terms of which the Society is a body corporate and its management vests
in the Board of Directors comprising of its own members elected by the General Body. It is
specifically contended that neither the Central Government nor the State Government has any role
in the governance and administration of the petitioner society.

15. The learned counsel for the fourth respondent also relied on the decision of the Apex Court
reported in 2010 (8) SCC 480 (Tata Memorial Hospital Workers Union Vs. Tata Memorial Centre)
wherein the Apex Court while considering the issue as to which is the appropriate Government in
respect of one Tata Memorial Centre, has observed that State Government is the appropriate
Government for the said Tata Memorial Centre for the purposes of the I.D. Act and Mahrashtra
Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (in short MRTU
Act). The Apex Court has observed therein that the the Governing Council of the Society therein
manages the day to day affairs, property funds, employment of its staff and their conditions of
service. Thus by observing so, the Apex Court has ultimately come to the conclusion that only the
State Government is the appropriate Government.

16. The short facts of the above said case would show that the trustees of a public charitable trust
known as Sir Dorabji Tata Trust established the hospital in Mumbai viz., Tata Memorial Hospital for
the treatment and cure of cancer and allied Diseases. The Hospital was being maintained out of the
funds of the Trust and also from the grant made available from time to time by the Central
Government. The trustees of the said Trust subsequently decided to dedicate the Hospital to the
nation with all its assets and thus they requested the Government of India to take over its control
and management. Accordingly, an agreement was entered into between the trustees and the Central

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Government wherein under clause (2), the management of the Hospital was to rest in the hands of
Governing Board. Subsequently, another agreement was entered into whereby the Tata Memorial
Hospital and Indian Cancer Research Centre were amalgamated into an institution thereafter
known as Tata Memorial Centre. Therefore, the question that arose for consideration before the
Apex Court based on those facts was as to whether the Central Government or the State Government
is the appropriate Government for Tata Memorial Centre. With these factual background, the Apex
Court found that only the State Government is the appropriate Government. Thus, considering the
above decisions of the Apex Court reported in 2007 (4) SCC 685 (Bharat Co-operative Bank
(Mumbai ) Ltd., Vs. Co-operative Bank Employees Union) and 2010 (8) SCC 480 (Tata Memorial
Hospital Workers Union Vs. Tata Memorial Centre) we are of the view that the learned Judge has
rightly come to the conclusion that the appropriate Government is only the State Government in the
appellant's case as well.

17. The next point that arises for consideration is as to whether the appellant Society is an industrial
establishment coming within the meaning of Section 2(e) of the Standing Orders Act. The learned
Judge has found that in pursuant to the introduction of sub-section (h) of Section 2 under the
Payment of Wages Act, 1936, the appellant society is an industrial establishment within the meaning
and definition of Section 2(e) of the Standing Orders Act, 1946. It is the contention of the learned
Senior Counsel for the appellant that the amendment introduced in 1982 cannot be applied to the
definition of 'industrial establishment' as found under the Industrial Employment (Standing Orders
) Act 1946 since it is a legislation by incorporation and not a legislation by reference. In support of
his submission, the learned Senior Counsel relied on a Division Bench decision of the Gujarat High
Court reported in 1995 (3) LLJ Suppl. 665 ( Valsad Jilla Sahakari Bank Ltd., Vs. D.K.Patel and
Others) wherein the Division Bench has observed at paragraphs 7 and 8 as follows:-

"7. Relying on the principle of incorporation, looking to the aforesaid two decisions, it has to be held
that if the meaning of a term is incorporated from an Act which has been subsequently repealed or
has been subsequently amended, the position available as on the date of passing of the statute
wherein the definition has been incorporated from another statute, will prevail and will continue to
hold the field and any subsequent changes in the incorporated statute will not affect the position
vis-a-vis the statute in which the definition is incorporated.

8. The position, therefore, to be found in the case before us is that when the said Act came to be
enacted the meaning of the terms 'industrial establishment' was to be understood in accordance
with the position available at that time, under the Payment of Wages Act, 1936. That clearly
excluded the petitioner Bank and establishment of that type and as such the order of certifying
authority is clearly without jurisdiction."

18. He further relied on the decision of the Apex Court reported in 2011 (3) SCC 1 ( Girnar Traders
(3) Vs. State of Maharashtra and Others) to contend that the disputed legislation is only a legislation
by incorporation and not a legislation by a reference. At paragraphs Nos. 87,88, 89 the Apex Court
has held as follows:-

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"87. However, since this aspect was argued by the learned counsel appearing for the parties at great
length, we will proceed to discuss the merit or otherwise of this contention without prejudice to the
above findings and as an alternative plea. These principles have been applied by the courts for a
considerable period now. When there is general reference in the Act in question to some earlier Act
but there is no specific mention of the provisions of the former Act, then it is clearly considered as
legislation by reference. In the case of legislation by reference, the amending laws of the former Act
would normally become applicable to the later Act; but, when the provisions of an Act are
specifically referred and incorporated in the later statute, then those provisions alone are applicable
and the amending provisions of the former Act would not become part of the later Act. This
principle is generally called legislation by incorporation. General reference, ordinarily, will imply
exclusion of specific reference and this is precisely the fine line of distinction between these two
doctrines. Both are referential legislations, one merely by way of reference and the other by
incorporation. It, normally, will depend on the language used in the later law and other relevant
considerations. While the principle of legislation by incorporation has well defined exceptions, the
law enunciated as of now provides for no exceptions to the principle of legislation by reference.
Furthermore, despite strict application of doctrine of incorporation, it may still not operate in
certain legislations and such legislation may fall within one of the stated exceptions.

88. In this regard, the judgment of this Court in the case of M.V. Narasimhan (1975 (2) SCC 377) can
be usefully noticed where the Court after analyzing various judgments, summed up the exceptions to
this rule as follows : (SCC p.385. para 15) "(a) where the subsequent Act and the previous Act are
supplemental to each other;

(b) where the two Acts are in pari materia;

(c) where the amendment in the previous


Act, if not imported into the subsequent
Act also, would render the subsequent
Act wholly unworkable and ineffectual;
and

(d) where the amendment of the previous


Act, either expressly or by necessary
intendment, applies the said provisions
to the subsequent Act."

89. With the development of law, the legislature has adopted the common practice of referring to
the provisions of the existing statute while enacting new laws. Reference to an earlier law in the later
law could be a simple reference of provisions of earlier statute or a specific reference where the
earlier law is made an integral part of the new law, i.e., by incorporation. In the case of legislation by
reference, it is fictionally made a part of the later law. We have already noticed that all amendments
to the former law, though made subsequent to the enactment of the later law, would ipso facto apply
and one finds mention of this particular aspect in Section 8 of the General Clauses Act, 1897. In
contrast to such simple reference, legal incidents of legislation by incorporation is that it becomes
part of the existing law which implies bodily lifting provisions of one enactment and making them
part of another and in such cases subsequent amendments in the incorporated Act could not be

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treated as part of the incorporating Act."

19. He further relied on the decision of the Supreme Court reported in 2007 (4) SCC 685 (Bharat
Co-operative Bank (Mumbai ) Ltd., Vs. Co-operative Bank Employees Union) wherein the Apex
Court at paragraph No.15 has held as follows:-

"15. Before adverting to the said core issue, we may briefly notice the distinction between the two
afore-mentioned concepts of statutory interpretation, viz., a mere reference or citation of one statute
in another and incorporation by reference. Legislation by incorporation is a common legislative
device where the legislature, for the sake of convenience of drafting incorporates provisions from an
existing statute by reference to that statute instead of verbatim reproducing the provisions, which it
desires to adopt in another statute. Once incorporation is made, the provision incorporated becomes
an integral part of the statute in which it is transposed and thereafter there is no need to refer to the
statute from which the incorporation is made and any subsequent amendment made in it has no
effect on the incorporating statute. On the contrary, in the case of a mere reference or citation, a
modification, repeal or re-enactment of the statute, that is referred will also have effect on the
statute in which it is referred. The effect of "incorporation by reference" was aptly stated by Lord
Esher, M.R. in Wood's Estate, Ex parte Works and Buildings Commrs., In re (55 LJ Ch 488(CA) in
the following words at page 615:"

" If a subsequent Act brings into itself by reference some of the clauses of a former Act, the legal
effect of that, as has often been held, is to write those sections into the new Act just as if they had
been actually written in it with the pen, or printed in it, and, the moment you have those clauses in
the later Act, you have no occasion to refer to the former Act at all."

20. In the very same decision, the Apex Court at paragraph No.21 also observed that the distinction
between incorporation by reference and adoption of provisions by mere reference or citation is not
too easy to highlight and that it is matter of probe into legislative intention and/or taking an insight
into the working of the enactment if one or the other view is adopted. Paragraph 21 is extracted
hereunder:-

"21. However, the distinction between incorporation by reference and adoption of provisions by
mere reference or citation is not too easy to highlight. The distinction is one of difference in degree
and is often blurred. The fact that no clear-cut guidelines or distinguishing features have been spelt
out to ascertain whether it belongs to one or the other category makes the task of identification
difficult. The semantics associated with interpretation play their role to a limited extent. Ultimately,
it is a matter of probe into legislative intention and/or taking an insight into the working of the
enactment if one or the other view is adopted. Therefore, the kind of language used in the provision,
the scheme and purpose of the Act assume significance in finding answer to the question. (See:
Collector of Customs vs. Nathella Sampathu Chetty & Anr. ) (AIR 1962 SC 316). The doctrinaire
approach to ascertain whether the legislation is by incorporation or reference is, on ultimate
analysis, directed towards that end. (See: Maharashtra State Road Transport Corporation vs. State
of Maharashtra & Ors. (2003 (4) SCC 200). Thus, the question for determination is to which
category the present case belongs."

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21. In fact, the above decision of the Bharat Co-op. Bank (Mumbai ) Limited was relied on by the
learned single Judge in this case to hold that the State Government is the appropriate Government.
Thus, by considering the observation of the Apex Court in Bharat Co-op. Bank (Mumbai) Ltd., case,
it is seen that the question whether a legislation is a mere reference or incorporation is certainly a
matter of probe into legislative intention. When we consider the legislative intention in this case, it
could be seen that the Standing Orders Act, 1946 though does not directly define an "industrial
establishment", however, derived cross reference from the definition of an 'industrial establishment'
as defined in clause (ii) of Section 2 of the Payment of the Wages Act, 1936 .

22. At this juncture, it is useful to refer to the relevant provision of Section 2(e) of the Industrial
Employment (Standing Orders) Act, 1946 and the same is extracted hereunder:-

Section 2. Interpretation .... ..... ......

(e) "industrial establishment" means

(i) an industrial establishment as defined in clause (ii) of Section 2 of the Payment of Wages Act,
1936 (4 of 1936) Thus, what is defined in clause (2) of Section 2 of the Payment of Wages Act, 1936
is to be taken as the meaning for the term "industrial establishment " as the definition under the
Industrial Employment (Standing Orders), Act, 1946. In other words, it is to be construed that the
legislative intention for defining the term "industrial establishment" under the Payment of Wages
Act, 1936 and the legislative intention for defining the same term under the Industrial Employment
(Standing Orders) Act, 1946 was one and the same. If there was different intention, it would have
been spelt out in the provisions itself.

23. Thus, when we see the definition of "industrial establishment" under the Payment of Wages Act,
1936, it has a sub-clause (h) under Section 2 which contemplates any other establishment or class of
establishments which the Central Government or a State Government may specify by notifications.
Thus, the contention of the learned Senior Counsel for the appellant is that the introduction of
sub-section (h) in the year 1982 cannot be made applicable and to include to the definition of
'industrial establishment' as required under Standing Orders Act merits no consideration.

24. The learned single Judge has found that the appellant Society is a commercial establishment
within the meaning of Section 2(3) of the Tamil Nadu Shops and Establishments Act 1947 and once
the appellant is an industrial establishment under the Payment of Wages Act, then automatically
Section 2(e)(1) of the Standing Orders Act will get attracted.

25. An identical issue was raised before the Delhi High Court in a decision rendered in the case of
Indian Airlines Vs. Union of India and others (2006 (3) SLJ 461 Delhi). The Division Bench of the
Delhi High Court has observed at paragraphs 16, 17 and 19 as follows:-

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The Railway Employees' ... vs The Joint Commissioner Of Labour on 13 November, 2013

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16. The submission of the petitioner is that this extended definition of the expression "industrial
establishment" in the Payment of Wages Act, 1936 as amended in 1965 will not apply to the
Standing Orders Act. It is submitted that when Section 2(e) of the Standing Orders Act refers to the
definition or expression "industrial establishment" as defined in Section 2(ii) of the Payment of
Wages Act, 1936, it refers to the definition existing in the Payment of Wages Act, 1936 on the date
Standing Orders Act was enacted, i.e. 23rd April, 1946 and any subsequent amendment in Section
2(ii) of the Payment of Wages Act, 1936 do not get incorporated in the Standing Orders Act.

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17. The answer to the question will depends on whether Section 2(ii) of the Payment of Wages Act,
1936 was incorporated into Section 2(e) of the Standing Orders Act so as to become part and parcel
of the Standing Orders Act on its enactment or is it a case of "legislation by reference". If it is a case
of "legislation by incorporation" subsequent amendments in Section 2(ii) of the Payment of Wages
Act, 1936 on their own force cannot be read into Section 2(e) of the Standing Orders Act. This is
because in cases of legislation by incorporation, only the existing provision on the day of enactment
of the subsequent statute stands incorporated and not the future repeals, amendments or
modifications made in the earlier law. However, in cases of "legislation by reference", future
modification or amendments in the earlier law are also applicable and read into the subsequent
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The Railway Employees' ... vs The Joint Commissioner Of Labour on 13 November, 2013

legislation. In cases of "legislation by reference", repeal or amendment of the first statute has effect
on the second/subsequent statute. In this regard it may be appropriate to refer to the judgment of
the Supreme Court in the case of Nagpur Improvement Trust v. Vasantrao and Ors. ... "

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19. To our mind the present case is one of "legislation by reference" and not "incorporation". Section
2(e)(i) of the Standing Orders Act states that the expression "industrial establishment" means
industrial establishment as defined in the Payment of Wages Act, 1936. The Standing Orders Act
was enacted for defining conditions of recruitment, discharge, disciplinary action, holidays, leaves,
etc., to minimize friction and disputes between management and workers. Keeping in view the
object and purpose behind the enactment of the Standing Orders Act it is legitimate to hold that it is
a case of legislation by reference and not in corporation. Industrial peace and reasonable and
equitable service conditions balancing interest of both workers and management ensures growth
and progress of any industry. The Standing Order Act is also welfare and a beneficial legislation.
With this background it will be correct to state that the legislative intent was to refer to Section 2(ii)
of the Payment of Wages Act, 1936 rather than incorporating similar provision in full. In 1946 India
was industrially backward and most of the industries including "air transport services" was still in
infinitesimal stage. It was natural that with growth, progress and development of industry the
expression "industrial enterprise" shall undergo expansion and more and more industries would be
included. Therefore, it will be appropriate to hold that Section 2(ii) of the Payment of Wages Act,
1936 has been frictionally made part of the Standing Order Act and not bodily transposed and
written into as part and parcel of the latter Act. Thus, subsequent amendments and changes in
Section 2(ii) of the Payment of Wages Act, 1936 after enactment of the Standing Order Act would
apply and cannot be ignored."

26. The Delhi High Court has considered the issue in detail by relying on various decisions of the
Apex Court and came to the conclusion that subsequent amendments and changes in Section 2 (ii)
of the Payment of Wages Act, 1936 after enactment of the Standing Orders Act would apply and
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The Railway Employees' ... vs The Joint Commissioner Of Labour on 13 November, 2013

cannot be ignored.

27. The Delhi High Court has observed that it is only a legislation by reference and not
incorporation. We are in full agreement with the decision of the Division Bench of the Delhi High
Court. The decision of the Gujarat High Court relied on by the learned Senior Counsel reported in
1995 (3) LLJ Suppl. 665 ( Valsad Jilla Sahakari Bank Ltd., Vs. D.K.Patel and Others) came to be
made by applying the principles of incorporation. Since we would like to follow the decision of the
Delhi High Court to hold that it is a legislation by reference, we are unable to follow the decision of
the Gujarat High Court, with due respect to the learned Judges.

28. The learned Judge also found that the provisions of the Standing Orders Act will prevail as it is a
special law and therefore the appellant is not justified in contending that there is no necessity to
frame any certified standing orders for the establishment . The learned Judge further observed that
if the Standing Orders Act apply to an establishment and if an employee do not get a certified
standing order, then by virtue of Section 12-A of the Standing Orders Act, the model standing orders
framed by the State Government will apply to the employees of the appellant society.

29. After observing so, the learned Judge also considered the purpose of framing Standing Orders
and by relying on the decision of the Apex Court reported in 1973 (2) LLJ 403 (Western India Match
Company Ltd., Vs.Workmen), the learned Judge found that the workman can have a say and the
Certifying Officer under Act is mandated to see its reasonableness before granting the certification.
The learned Judge also relied on another decision of the Apex Court reported in 1969 (2) LLJ 698 (
Co.operative Central Bank Limited Vs. Additional Industrial Tribunal) wherein the Apex Court has
held that the bye-laws framed by a society is only in the nature of contract and that cannot curtail
the adjudicating authorities to modify those terms. The above findings of the learned Judge based
on the various decisions of the Apex Court, in our considered view, do not warrant any interference
in this writ appeal.

30. The learned counsel appearing for the fourth respondent relied on the decision of the Division
Bench of this Court reported in 1991 (1) LLJ 260 (The Tamil Nadu Water Supply and Drainage
Board and Another Vs.M.D.Vijay Kumar and others) wherein it is held that the Standing Orders will
prevail over the regulations framed under the Tamil Nadu Water Supply and Drainage Board Act. It
is also noted by the learned single Judge in this case that the above decision of the Division Bench of
this Court was upheld by the Apex Court.

31. Another decision reported in 1981 (1) LLJ 1 ( Life Insurance Corporation of India Vs.
D.J.Bahadur and others ) of the Apex Court was cited for the purpose that an Act may be general
and for certain other purposes it may be special and while determining whether a statute is a general
or special one, the focus must be on the principle subject matter.

32. The decision of the Supreme Court reported in AIR 1975 SC 1835 ( State of Madhya Pradesh Vs.
M.V.Narasimhan) was cited for the purpose that to contend that where two enactments are
supplemental to each other or where the amendment if not imported would render the subsequent
Act unworkable or ineffectual, then the subsequent amendments to the former legislation will have

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The Railway Employees' ... vs The Joint Commissioner Of Labour on 13 November, 2013

to be imported into the latter legislation.

33. For the very same purpose, AIR 1982 SC 697 ( Western Coalfields Ltd., Vs. Special Area
Development Authority, Korba and Another ) was also cited. The Division Bench decision of this
Court reported in 2010 Writ L.R. 199 ( George Town Co-operative Vs. Deputy Commissioner of
Labour) was cited to contend that the employees Co-operative Societies are covered under the Tamil
Nadu Shops and Establishments .

34. Considering all these facts and circumstances, we are of the view that no ground is made to
interfere with the order of the learned single Judge. Accordingly, the writ appeal is dismissed.
Consequently, the connected M.P. is closed. No costs.

(N.P.V.,J) (K.R.C.B,.J)
13.11.2013
Index:Yes/No
Internet:Yes/No

krr/

To

The Joint Commissioner of Labour


Labour Welfare Board Buildings
6th Floor, DMS Compound
Chennai 6.
N.PAUL VASANTHAKUMAR,J.
AND
K.RAVICHANDRABAABU,J.

krr/

Pre-Delivery Judgment in
W.A.No. 314 of 2010

Indian Kanoon - http://indiankanoon.org/doc/76675158/ 14


The Railway Employees' ... vs The Joint Commissioner Of Labour on 13 November, 2013

Dated:- 13.11.2013

Indian Kanoon - http://indiankanoon.org/doc/76675158/ 15