Writ Petition No.2057 of 1995

7th March, 1998

Petitioner Counsel: Shri N.V. WALAWALKAR i/b. Smt.A.H. CHHEDA & Mr. M.R.KULKARNI
Respondent Counsel: Shri M.M. VARMA with Shri P.N.SHASTRI

Cases Cited:
1992 I CLR 327 [Para 18]
1984 LIC 1290 [Para 18]
AIR 1979 SC 65 [Para 18]

JUDGMENT

JUDGMENT :- Both these Writ Petitions can be disposed of by this common Judgment as they raise the same issues.

2. These Writ Petitions filed under Articles 226 and 227 of the Constitution of India involve the question whether the Industrial Court, Mumbai, was right in holding that the Petitioner - Municipal Corporation - was guilty of committing unfair labour practices under item Nos. 6 and 9 of Schedule IV of the Maharashtra Recognition of Trade Unions and prevention of Unfair Labour Practices Act, 1971 (hereafter referred to as the MRTU & PULP Act for short) and directing the petitioners to give promotional post of Octroi Inspectors or the Ward Inspectors.

3. These petitions arise in the following facts :-

In both these petitions, 126 Respondents are involved. They are all permanent Clerks in the Assessment Department. The Assessment Department is having Octroi Department as its sub-department. Temporary Election Department was also created under Assessment Department. This was created as Municipal Elections were to take place. Nearly 192 clerks working in the Assessment Department came to be promoted by order dated 31.7.1989 and 29.9.1989 as temporary Election Inspectors. As the elections were postponed initially, by order dated 3.3.1990, they came to be transferred as temporary Inspectors in the Assessment/Octroi Department. All the 126 respondents came to be reverted to the post of clerks by orders dated 3.3.90 and 31.3.90. Again as the elections were declared, by order dated 17.5.90, 191 clerks (which include 126 respondents) came to be promoted as temporary Election Inspectors. Again after the elections, 148 respondents came to be transferred as temporary Inspectors in Assessment/Octroi Department on 1.11.90. But they came to be re-transferred as Election Inspectors on 18.12.90. Again on 5.3.91, 149 temporary Election Inspectors came to be transferred as temporary inspectors in Assessment/Octroi Department. As the elections were over there was move to revert them to the post of clerks. When they got the wind of this in September 1991, the complaint alleging commission of unfair labour practices under items Nos. 5,6 and 9 of Schedule IV of the Schedule read with Section 28 of the MRTU & PULP Act, 1971 came to be filed. Interim order of status quo was obtained on 20.9.91. By order dated 29.11.91 83 Temporary Assessment/Octroi Inspectors came to be transferred as Temporary Election Inspectors. Interim order of status quo came to be vacated by the Industrial Court, Bombay, on 29th May, 1992 and on 30.5.92, 122 clerks came to be reverted to the post of clerks.

3A. The Petitioner-Corporation issued a circular under the authority of the Municipal Commissioner on 27th July, 1989 introducing written and oral tests for promotion. It came to be modified on 26.5.90 in view of the directions given by Industrial Court, Mumbai and female candidates were also permitted thereby to appear for tests.

4. The learned Member of the Industrial Court, Bombay, negatived the contention of the respondents that the petitioners were guilty of committing unfair labour practice under item No.5 of Schedule IV. He took the view that whether there was any change in the conditions of service of the respondents in view of Section 9A of the Industrial Disputes Act, 1947 by introducing written and oral tests for promotion cannot be decided by him in this complaint. Further it cannot be said that the petitioners have shown any favoritism or partiality to one set of employees against the other by introducing oral and written tests for promotion. However, he held that (the Corporation has framed its rules and regulations as contemplated by Section 81 of the Bombay Municipal Corporation Act 1888 and hence) Model Standing Orders framed under the Industrial Employment (Standing Orders) Act, 1946 and the rules framed thereunder by the State Government i.e. the Bombay Industrial Employment (Standing Orders) Rules, 1959 are applicable. In view of clause 4B of Schedule I(B) of the Bombay Industrial Employment (Standing Orders) Rules, 1959 as the respondents have completed 240 days in the promoted post of Ward Inspectors/Octroi Inspectors in the preceding one year, they are entitled to continue in those posts and their reversion was bad. Hence item No.9 of Schedule IV is attracted. It was held that as they have been continued for long as temporary inspectors depriving them of the status and privileges of permanent employees, the petitioners are guilty of item No.6. Hence, it was held that petitioners are guilty of committing unfair labour practice under items Nos.6 and 9 of Schedule IV.

5. The learned Counsel for the petitioners first submitted that none entered the witness box on behalf of the respondents while petitioners examined two witnesses to disprove the case of the respondents. Respondents have failed to prove that item 6 of Schedule IV is attracted. Hence, it was an error to hold the petitioners guilty under item No.6. He submitted that it was necessary to prove by leading evidence that respondents were appointed temporarily and continued for years with the object to deprive them the status and privileges of permanent employees. He submitted that the Election Department was created as a temporary measure because of declaration of Municipal elections. The elections were postponed and hence they were reverted. When again elections were announced, they came to be promoted. As the work was not available in the Election Department, they were temporarily posted as inspectors in Octroi/Assessment Department and came to be reverted in view of completion of elections. He submitted that merely because they worked for about 2 years as temporary promoted posts, the petitioners cannot be held guilty under item No.6 of schedule IV.

As against this, the learned Counsel for the respondents contended that it was not necessary for the respondents to lead oral evidence. The documentary evidence produced is more than sufficient to establish item No.6 of Schedule IV. He submitted the evidence clearly showed that the respondents were working for nearly 2 years as Octroi Inspectors/Ward Inspectors and they were kept temporary clearly with the object of depriving them of status and privileges of permanent employees.

6. The item No.6 of Schedule IV reads as under :-

"6. To employ employees as "badlis", casuals or temporaries and to continue them as such for years, with the object of depriving them of the status and privileges of permanent employees."

This requires that employees should be employed as temporary and continued as such for years with the object of depriving them of the status and privileges of permanent employees. If the abovementioned facts are taken into consideration and the fact that the Election Department itself was a temporary measure created under the Assessment Department in which the respondents were working as Clerks, and further fact that they worked hardly for 2 years, it cannot be said that they were continued as temporary for years and with the object of depriving them the status and privileges of permanent employees. Their promotion in the Election Department was fortuitous since the said temporary Department was created under the Assessment Department. Because of the postponement and re-declaration of elections, they were promoted in that department and continued in the assessment/Octroi Department when there was no election work. Considering these facts, it cannot be said that there was any motive or object on the part of the petitioners to deprive them of the status and privileges as permanent employees.

7. The learned Counsel for the petitioners next submitted that Rule 4B of Schedule I(B) of the Bombay Industrial Employment (Standing Orders) Rules, 1959 (hereafter referred to as Rules of 1959 for short) is not attracted as it is not the case of fresh appointment, but a case of promotion. There is no question involved of making these employees as permanent in the establishment. They were already permanent clerks. He, therefore, submitted that the provisions of the Industrial Employment (Standing Orders) Act, 1946 and the Rules of 1959 are not attracted in the present case and it cannot be said that the petitioners are guilty under item No.9 of Schedule IV of MRTU & PULP Act, 1971.

8. As against this, the learned Counsel for the respondents submitted that clause 4-B of Schedule I(B) of the Rules of 1959 is not only attracted in case of first appointment but also in case of promotions. He submitted that under clause 3 of Schedule IB, the workmen are classified and 3(c) mentions temporary workmen. Keeping the respondents as temporary in the promoted post for more than 240 days attracts item 9 of Schedule IV. He submitted that promotion is nothing but appointment to that post.

9. Schedule IB(1) of the Bombay Industrial Employment (Standing Orders) Rules, 1959 provides that the orders shall apply to all permanent employees in the establishment doing clerical or supervisory work. Clause 4-B thereof is as under :-

"4-B. A temporary workman, who has put in 190 days' uninterrupted service in the aggregate in any establishment of a seasonal nature or 240 days, uninterrupted service in the aggregate in any other establishment during a period of preceding twelve calendar months, shall be made Manager, or any person authorised in that behalf by the Manager, irrespective of whether or not his name is on the muster roll of the establishment throughout the period of the said twelve calendar months.

Explanation - For purpose of this clause any period of interrupted service, caused by cessation of work which is not due to any fault of the workman concerned, shall not be counted for the purpose of computing 190 days or 240 days or as the case may be, for making a badli or temporary workman permanent."

In my opinion, it clearly provides that a temporary workman who has put in 190 days' uninterrupted service in the aggregate in any establishment of a seasonal nature or 240 days in any other establishment during a period of preceding 12 calendar months shall be made permanent in that establishment. (underlining is mine). This is clearly meant for protecting the employees initially employed on a temporary basis. In the present case, as the respondents were already permanent employees of the establishment, Clause 4-B is not attracted. Clause 4-B is therefore not attracted in case of those who are already permanent in the establishment. This is provided to protect helpless temporary employees against the sweet will of the employer.

Hence, the petitioner cannot be said to be guilty of item No.9 of Schedule IV of the MRTU & PULP Act, 1971.

10. The learned Counsel for the petitioners next submitted that the petitioner No.1 cannot be called as Industrial Establishment and hence the Rules of 1959 are not attracted. He relied upon the definition contained in Section 2(e)(i) and (ii) of Industrial Employment (Standing Orders) Act 1946 (hereafter referred to as the Act of 1946 for short). These clauses import the definition of industrial establishment contained in Section 2(ii) of Payment of Wages Act, 1936 and Section 2(m) of the Factories Act, 1948. He submitted that the relevant part of the definition contained in Section 2 clause (ii)(g) of the Payment of Wages Act, 1936 means an "establishment in which any work relating to the construction, development or maintenance of buildings, roads, bridges or canals, or relating to operations connected with navigation, irrigation or to the supply of water, or relating to the generation, transmission and distribution of electricity or any other form of power is being carried on."

He submitted that no such work is carried on by petitioner No.1. He further pointed out that the definition of industrial establishment contained in clause 2(m) of the Factories Act contemplates manufacturing activity which is also not carried on by the petitioner No.1. Therefore, the provisions of the Industrial Employment (Standing Orders) Act, 1946 are not attracted and hence the Model Standing Orders framed under the Rules of 1959.

11. As against this, the learned Counsel for the respondents invited my attention to the definition of Industrial Establishment contained in the Industrial Disputes Act, 1947. Section 2(ka) defines "Industrial establishment or undertaking" to mean an establishment or undertaking in which any industry is carried on. The "industry" is defined in Section 2(j) as follows :-

"2(j) "industry" means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen;"

He submitted that in view of Section 3(2) of the MRTU & PULP Act, 1971, these provisions are attracted. Prima facie, I am of the view that the learned Counsel for the respondents is right in this respect. However, I am not dealing with this point and leaving it open as it is not necessary to deal with it in view of other findings recorded by me.

12. The learned Counsel for the petitioners next submitted that the Commissioner has exercised the powers under Section 64 of the B.M.C. Act and introduced written and oral tests by circular dated 27th July 1989 and modified by circular dated 26th May, 1990. There is no dispute that some of the respondents appeared for these tests, but failed. He submitted that it is part of promotional rules and hence the respondents cannot claim promotion merely because they completed 240 days of service in the promoted post. He pointed out that the circular laid down requirements for promotion and unless the respondents satisfy them, they cannot be promoted on regular basis.

13. Learned Counsel for the respondents submitted that the Commissioner could not have issued such a circular introducing written and oral tests and it was without jurisdiction. He also submitted that the said circular is not attracted in the present case as the respondents were already working on promoted posts. He further submitted that even assuming that Municipal Commissioner is having power to issue such a circular under the Bombay Municipal Corporation Act, it cannot override the provisions of the Industrial Employment (Standing Orders) Act, 1946. The said Respondents have completed 240 days of working in the promoted post. They were entitled to be made permanent. He also submitted that the circular changes the conditions of service and as notice of change as contemplated under Sec.9A of the Industrial Disputes Act, 1947 was not given, it was invalid.

14. I am also not in agreement with the submission of the learned Counsel for Respondents that the introduction of written and oral tests amounted to change in service conditions attracting Section 9A of Industrial Disputes Act, 1947. The learned Counsel for the respondents relied upon the judgment of the Supreme Court reported in AIR 1985 SC 670 (The Workmen of the Food Corporation of India vs. M/s.Food Corporation of India). In the said case, the Food Corporation of India was having contract system for handling foodgrains. Food Corporation of India introduced direct payment system and they came to be employed by the Corporation and accordingly became its workmen. However, the said direct payment system was cancelled and contractor system was reintroduced. In those circumstances it was held that the provisions of Section 9A were attracted and as notice of change was not given, the change would be illegal. The Apex Court observed as follows :-

"19. It is at this stage necessary to examine the implication of S.9A of the I.D.Act,1947. As hereinabove pointed out, S.9A makes it obligatory upon an employer who proposes to effect any change in the conditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule to give a notice of desired or intended change. It cannot do so without giving to the workmen likely to be affected by the change, a notice in the prescribed manner of the nature of the change proposed to be effected and within 21 days of giving such notice."

This has no application in the present case. The tests were introduced for the first time so that there should be no arbitrariness in promotion and to have uniformity. They were applicable to all. The method introduced by an employer for judging the suitability of an employee for promotion cannot be faulted on this ground.

15. The learned Counsel for the respondents is not factually right in contending that merely because the respondents were working on the promoted posts, the said circular is not attracted. The said circular was issued on 27th July, 1989 itself and even the first promotion order was issued on 31.7.1989. The circumstances in which they were continuing in the promoted posts and their reversion and again promotion is already mentioned above. Therefore, the said circular was squarely applicable to the respondents.

16. The learned Counsel for the respondents submitted that the respondents were given the Grade and Pay or Scale of the higher post. They were not merely paid some allowance of the higher post. He pointed out that even they were asked to exercise the option and accordingly the option was exercised. In this connection, he relied upon clauses 39 and 40 of the Bombay Municipal Corporation (Service) Regulations, 1989 and the conditions mentioned in clause 32 dealing with pay to be drawn while officiating in a post. Condition No.(3) under clause 32 reads as under :-

"(3) The benefit of option will not be available in case of Corporation employees who are promoted to higher post on adhoc basis. However, if this appointment is continued further on a regular basis without break, the employee so appointed shall be eligible to exercise an 'option', within a period of one month from the date of issue of orders of regular appointment."

In my opinion, condition No.3 cannot confer regular promotion upon the respondents. Merely because it says that the benefit of option will not be available in case of employees promoted on adhoc basis and if they are confirmed on regular basis, they shall be eligible to exercise option. This is only enabling provision. It enables them to exercise option within a particular time for the post of regular appointment. But exercise of such option does not give them right to promoted post ipso facto. Clause 39 deals with temporary post which means a post sanctioned for a limited time carrying a definite rate of pay. Clause 40 deals with 'time scale' pay to mean pay which is subject to any conditions prescribed in these regulations rises by periodical increments from minimum to maximum. Merely because the respondents were given the time scale pay and also periodical increments, their temporary promotions cannot get converted into promotions in the permanent or regular basis.

17. The Division Bench of this Court in the judgment reported in 73 Bombay Law Reporter 738 (Municipal Corporation of Greater Bombay vs. Miss S.R. Dethe) was concerned with the exercise of powers by the Municipal Commissioner under Sections 80A, 80B and 64(3) of the B.M.C. Act. The Court was dealing with power of compulsory retirement. The question arose whether the circular dated June 15,1967 issued by the Deputy Municipal Commissioner on the authority of the Municipal Commissioner was within the competence of the Commissioner or not. It was held that the circular issued on the authority of the Municipal Commissioner, furnishing guidelines to the Heads of Departments for retiring Municipal employees compulsorily between the ages of 55 and 58, is within the powers of the Commissioner and has, therefore, a binding force and authority. It was held that by virtue of these provisions, the Commissioner would be entitled to issue instructions to the Municipal officers and servants and those instructions would bind them.

Similarly, in 75 Bombay Law Reporter 538 (Damodar Shantaram Nadkarni vs. S.E.Sukhtankar), the Division Bench of this Court considering the provisions of Sections 80A, 81 and 64 of the Bombay Municipal Corporation Act observed-

"...... The effect of theses provisions is that the entire residuary executive power for carrying out the provisions of the Act is vested in the Commissioner save and except where it is otherwise provided. He is clothed with a power to prescribe duties and exercise supervision and control over all municipal officers and servants and subject to the regulations for the time being in force under S.81 to dispose of all questions relating to the service of the said officers and servants."

Considering the above, in my opinion, the Municipal Commissioner was having such power to issue circular introducing the written and oral tests for the purpose of promotion. It was quite a reasonable measure introduced and quite common for service jurisprudence. In fact, it is admitted that some of respondents have actually appeared for the tests but failed. Thus, the respondents cannot turn around and now condemn the said tests.

18. The learned Counsel for the respondents relied upon the judgment of the learned Single Judge reported in 1992 I CLR 327 (Pyarelal vs. The Municipal Council, Ramtek & Anr). In the said case, petitioner was given the post of Safai Jamadar in 1984. The appointment was for a period of 3 months on an experiment basis. It was mentioned that since his services were found satisfactory, he would be deemed to be fit for the post of Safai Jamadar and he would be paid salary of Safai Jamadar. He continued beyond the period of 3 months and was working for more than 240 days. In those facts, it was held that he was entitled to the promotional post on regular basis. It was observed "As I have already found above the petitioner was appointed on three months' probation and he would be deemed to have been made permanent by the end of that period particularly when there was no complaint against him and when he was not reverted immediately after the expiry of the period of three months." The benefit of the provisions of Model Standing Order No.3 as framed by the State Government in the exercise of its powers conferred by Sec.15 of the Industrial Employment (Standing Orders) Act, 1946 and the Rules of 1959 was held to confer the benefit upon the said petitioner. The learned Judge also quoted a paragraph from the Judgment in 1984 L.I.C. pg.1290 (S.Baginathan & Ors. vs. Secretary to Govt. of Tamil Nadu, Rural Development and Local Administration Dept.,Madras & Ors.). The said paragraph refers to the judgment delivered by the Supreme Court in U.P. State Electricity Board vs. Hari Shankar Jain, AIR 1979 SC 65. Referring to that judgment, it was observed that the provisions of the Standing Orders Act, if applicable to a Municipal undertaking as an industrial establishment defined in the Standing Orders Act, being in the nature of a special enactment will prevail over the provisions of the District Municipalities Act, and the rules thereunder and to this extent, the decision of the Division Bench in the Coimbatore Municipality v. Thiruvenkataswami ILR 19783 (Sic -ed) (1) Mad.405 is not correct. However, in the present case, I have already held that the provisions of the Industrial Employment (Standing Orders) Act, 1946 and the Rules of 1959 are not applicable. Further, the promotion orders which were issued here were not only temporary but specifically contained a clause which reads as under :-

"1. These appointments are purely temporary and on adhoc basis and by virtue of these appointments the persons appointed will not be entitled to claim seniority in the category of Inspectors."

"2. By virtue of these appointments the persons appointed as temporary Inspectors in Election Department and desiring to enter into the category of Inspector will not be entitled to claim preferential treatment in the process of interview and selection."

Accordingly, temporary promotions were accepted by the respondents. It was not the case that they were appointed on probation or on experimental basis for a particular period. Therefore, there is no question of their confirmation in those posts after a particular period. They have to pass the written and oral tests as per the circular issued by the Municipal Commissioner for claiming promotions on regular basis.

(Both the learned Counsel for the parties agree that the Court below has wrongly quoted clause 4-C of Schedule I. It should be clause 4-B of Schedule IB of Rules of 1959).

19. In view of this, I pass the following order :-

The impugned judgments and orders dated 22nd March, 1995 passed by the Industrial Court, Bombay in Complaint (ULP) No.1265 of 1991 and Complaint No. (ULP) No.1496 of 1991 are set aside. The Complaints filed by the respondents are dismissed. Rule in each of the Petitions made absolute accordingly. However, in the facts and circumstances of the case, there shall be no order as to costs.