Karnataka High Court
The Management Of Bharat Earth Movers … vs The General Secretary on 4 March, 2025
R
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 4TH DAY OF MARCH, 2025
BEFORE
THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE
WRIT PETITION NO.19984 OF 2014 (LB-RES)
BETWEEN:
THE MANAGEMENT OF BHARAT
EARTH MOVERS LTD.,
PRESENTLY KNOWN AS BEML LTD
CORPORATE OFFICE NO.23/1,
SAMPANGIRAMA NAGAR,
BANGALORE - 560 027,
REPRESENTED BY ITS
ASSISTANT GENERAL MANAGER (LEGAL),
SRI M K VIDHYADHARAN.
...PETITIONER
(BY SRI PRADEEP SAWKAR, ADVOCATE)
AND:
1. THE GENERAL SECRETARY,
BHARATH EARTH MOVERS
EMPLOYEES ASSOCIATION,
BANGALORE COMPLEX,
SRI M VISHVESHARAIAH BHAVAN,
DR RAJKUMAR ROAD,
NEW THIPPASANDRA POST,
BANGALORE - 560 075.
2. THE GENERAL SECRETARY,
BHARATH EARTH MOVERS
EMPLOYEES ASSOCIATION,
BEML NAGAR POST, KGF - 563115.
2
3. THE GENERAL SECRETARY,
BHARATH EARTH MOVERS
EMPLOYEES ASSOCIATION,
BELAVADI POST,
MYSORE - 570 018.
4. THE GENERAL SECRETARY,
BHARATH EARTH MOVERS
EMPLOYEES ASSOCIATION,
NO.31, 5TH FLOOR,
UNITY BUILDING, J.C.ROAD,
BANGALORE - 560 002.
...RESPONDENTS
(BY SRI K B NARAYANASWAMY, ADV. FOR R1 TO R3,
SRI V R DATAR, ADV. FOR R4 )
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF
THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE
AWARD DATED 11.09.2013 VIDE ANN-H PASSED BY
INDUSTRIAL TRIBUNAL, BANGALORE IN I.D.NO.69/2007.
THIS PETITION HAVING BEEN HEARD AND RESERVED
FOR JUDGMENT ON 05TH FEBRUARY, 2025 AND COMING ON
FOR PRONOUNCEMENT THIS DAY, THE COURT PRONOUNCED
THE FOLLOWING:
CORAM: HON'BLE MR JUSTICE ANANT RAMANATH HEGDE
CAV ORDER
The petition is filed assailing the award dated
11.09.2013 in I.D. No.69/2007 on the file of Industrial
Tribunal, Bangalore.
3
2. In terms of the said award, the notice dated
21.07.2006 issued under Section 9A of the Industrial Disputes
Act, 1947 (for short the 'Act of 1947') is held to be illegal.
3. The petitioner-Establishment is a Public Sector
Undertaking. Respondent No.1 is the Union of employees of
the petitioner. Rest of the respondents are the office bearers
of respondent No.1.
4. Under 'BEML Encashment of Vacation Leave Rules
And Procedure' that came into effect on 18.03.1978, the
employees of the petitioner-Establishment were entitled to
vacation leave (equivalent to earned leave). The vacation
leave was computed by dividing 30 (days) from the monthly
wage to arrive at the wage per day. Said Rule is marked at
Annexure-E (Ex.M1 before the Tribunal).
5. In addition, to providing the procedure for leave
encashment, paragraph No.5 of the said Rule reads as
under:-
"Management reserves the right to
interpret, modify, amend or withdraw the
above scheme if circumstances so warrant".
4
6. In terms of the order dated 25.05.1982, the
management of the establishment amended Para No.3(vii) of
the Rules referred to above, and the vacation leave was
ordered to be calculated by taking "26" as the divisor instead
of "30". This new Rule came into effect from 27.04.1982.
From 01.09.1982 till 21.07.2006, the workmen had the
benefit of availing the vacation leave as per the formula
provided under the amended Rule taking "26" as the divisor.
7. The petitioner-Establishment issued the notice
dated 21.07.2006, allegedly under Section 9A of the Act of
1947 reverting to divisor "30" instead of "26".
8. This led to an industrial dispute before the
Tribunal. The Tribunal ruled in favour of 1st respondent -
Union. Hence, this petition by the establishment.
9. Sri Pradeep Sawkar, learned counsel appearing for
the petitioner-Establishment raised the following contentions:-
i) The petitioner is a Public Sector Establishment. The
Public Sector Units across India, like the petitioner, have
5
adopted "30" as the divisor for calculating the vacation
leave. This change is made also taking into
consideration the objection raised by the Central
Government based on the report of the Comptroller of
Audit.
ii) The decision of 1982, choosing "26" as a divisor is not
under any binding law, and the same cannot confer any
right in favour of the workmen of the petitioner-
establishment.
iii) There is no contract between the petitioner and
respondent No.1-Union to choose divisor "26" to
calculate the vacation leave. Without any such contract,
the gratuitous or erroneous concession provided by the
management does not confer any right in favour of the
workmen.
iv) Assuming that there was a contract between the
petitioner-Establishment and respondent No.1-Union,
the same can be terminated and the same is terminated
by invoking Section 9A of the Act of 1947.
v) The Industrial Tribunal erroneously placed reliance on
the judgment dated 19.12.2006 of Workmen of Bharat
6
Electronics Limited vs The Bharat Electronics
Limited, in W.P. No.8743/2006 C/w WP. No.8653/2006.
In the said case, this Court remitted the matter to the
Tribunal for fresh consideration and has not given a
finding that "26" is the appropriate divisor to calculate
the vacation leave.
vi) Under the Standing Orders certified by the competent
authority, the management of the employer is
competent to take the decision relating to the
appropriate divisor to determine the vacation leave. The
decision authorised under the Standing Orders taken by
the management need not be approved by the Board as
the Board itself has authorised the management to take
appropriate decisions.
vii) The Rules applicable in Karnataka do not mandate the
issuance of individual notice to each workman under
Section 9A of the Act of 1947 and publication of notice in
the Notice Board, and the service of notice on the
Secretary of the Union through registered post is
sufficient compliance with the provision.
7
viii) The requirements of Section 9A being duly complied
with, the Industrial Tribunal erred in invalidating the
notice and revision of vacation leave.
10. Sri V.R.Datar, learned counsel for respondent No.4
raised the following contentions:-
i) Section 9A of the Act of 1947 mandates issuance of
individual notice to every workman, who is affected by
any change in service conditions.
ii) Rule 35 of the Industrial Disputes (Karnataka) Rules,
1957( for short "Rules, 1957") mandates notice to each
workman and also mandates notice to the registered
Union. Combined reading of Section 9A and Rule 35
referred to above would suggest that individual notice to
both workman and the Union is mandatory.
iii) Admittedly, individual notices are not issued under
Section 9A read with Rule 35 to each of the workman as
such, the procedure adopted in changing the divisor for
calculating the leave encashment is erroneous.
8
iv. To change the methodology adopted to calculate the
leave encashment, there has to be a decision by the
Board. In the year 1982, the Board took the decision to
change the divisor from "30" to "26" and the said
procedure was not followed in the year 2006 and the
divisor is sought to be changed without the Board's
approval.
vi. The petitioner-Establishment is a separate entity
registered under the Companies Act and not under the
control of the Central Government as such, the officer of
the Central Government or the Comptroller of Audit is
not competent to issue direction to the petitioner-
Establishment. Reliance is placed on Suresh Chandra
Singh And Others vs Fertilizer Corporation of India
Ltd. And Others (2004 1 SCC 59).
vii. The definition of "employer" under the Act of 1947 is
different from the definition of "employer" in the
Standing Orders. Section 9A of the Act of 1947 refers to
the term "employer". Thus, the decision to change the
service condition invoking Section 9A has to be by the
9
"employer" as defined in the Act of 1947 and not by the
"employer" in the Standing Orders. The notice under
Section 9A, under scrutiny is not by the employer as
defined in the Act of 1947, thus it is invalid.
11. The learned counsel for respondent No.4 has also
relied on the judgment of the Apex Court in Babu Verghese
and others vs Bar Council of Kerala and others1, to urge
that in case, law requires something to be done in a particular
manner, the same shall be done as prescribed, or else it
should not be done at all.
12. Referring to the judgment of the Constitutional
Bench of the Hon'ble Apex Court in the case of Syed Yakoob
vs K.S. Radha Krishnan 2, Sri V.R.Datar also urged that the
finding of fact arrived at by the Tribunal in paragraph No.25,
cannot be brushed aside as the finding is supported by the
evidence on record.
13. Learned counsel for the petitioner-Establishment
by way of reply would contend that the definition of the word
1
AIR 1999 SC 1281(1)
2
AIR 1964 SC 477
10
"employer" found in Section 2(g) of the Act of 1947 is not
exhaustive. Standing Orders are certified following the
procedure. Standing Orders provide for expansion of the
definition of the word "employer". The Standing Orders of
petitioner-establishment are not called into question and the
Deputy General Manager who is also an employer as per the
definition of the "employer" found in the Standing Orders has
issued the notice to change the divisor.
14. This Court has considered the contentions raised at
the bar and perused the records. The following points arise for
consideration:
(i) Whether Section 9A of the Act of 1947 and Rule 35 of
Rules, 1957 mandate 'individual notice to each
workman' to change the formula to calculate the
vacation leave when the proposed change affects all
workmen in an establishment having registered
Union or Association of workmen?
(ii) Whether the notice under Section 9A, issued to change
the 'formula to calculate the vacation leave' by the
11
officer covered under the definition of the "employer" in
the certified Standing Orders of the petitioner-
Establishment can be termed as notice issued by the
"employer" referred to in Section 9A of the Act of 1947.
15. The Industrial Tribunal has held that the notices
under Section 9A of Act of 1947 is invalid on two grounds:
(a) The officer who issued the notice has
no authority to issue the notice proposing to
change the formula to calculate the vacation
leave. The Industrial Tribunal took a view
that the decision to change the officer can
only be taken by the Board of Directors of
the petitioner-Establishment and not by the
officer who issued notice under Section 9A.
(b) The individual notices under Section 9A
of the Act of 1947 to each workman is not
issued.
16. The Industrial Tribunal relied on the judgment of
the co-ordinate bench of this Court in Writ Petition
No.8743/2006 to arrive at conclusion (a) referred to above.
12
17. Discussion on point No. (i):
There is no dispute that the condition relating to leave
encashment is a service condition which can be changed by
the employer by following the prescribed procedure. To effect
changes in the formula to calculate leave encashment, the
employer has to follow the procedure prescribed under Section
9A of the Act of 1947. In the State of Karnataka, the
procedure is also governed by Section 9A of the Act of 1947
r/w Rule 35 of Rules, 1957.
18. The relevant portion of Section 9A of the Act of
1947 reads as under:
"9A. Notice of change - No, 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, shall effect
such change -
(a) without giving to the workmen likely to be
affected by such change a notice in the prescribed
manner of the nature of the change proposed to be
effected; or
(b) within twenty-one days of giving such notice:
xxx-"
(Emphasis supplied)
13
19. On a reading of Section 9A of the Act of 1947
particularly, the expression "a notice in the prescribed manner
of the nature of the change proposed to be effected", it is
evident that there must be a notice to workmen in the
manner prescribed.
20. Respondents contend that the expression "without
giving to the workmen likely to be affected by such change" in
Section 9A mandates that notice has to be given to all
workmen. What is required to be noticed is Section 9A by
itself does not exhaustively prescribe the mode of service.
The procedure is found only in Rule 35. Section 9A read with
Section 38 (power to make Rules) provides for the procedure
to be framed in the Rules. Thus, manner (not just the
format) of giving notice is to be understood with reference to
Rule 35 and not Section 9A alone. However, Section 9A is also
required to be read along with the relevant Rules.
21. Rule 35 of the Rules, 1957 reads as under:
14
"35. Notice to change - Any employer intending
to effect any change in the conditions of service
applicable to any workman in respect of any matter
specified in the Fourth Schedule to the Act shall
give notice of such intention in Form 'E'. The notice
shall be displayed conspicuously by the employer
on a notice board at the main entrance to the
Establishment and in the Manager's office:
Provided that where any registered trade union of
workmen exists, a copy of the notice shall also be
served by registered post on the Secretary of such
Union."
(Emphasis supplied)
22. Rule 35 prescribes notice in Form E. Rule 35
further provides that notice shall be displayed conspicuously
by the employer on the notice board at the main entrance to
the Establishment and in the Manager's office.
23. The proviso also provides if the registered Trade
Union of the workmen exists, the copy of the notice shall also
be served by registered post on the Secretary of such
Union.
24. Form-E, prescribed in Rule 35 is as under:
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[FORM E]
[See Rule 35]
Notice of change of service conditions proposed by an
employer
Name of the employer
.............................................................................................
Address...................................................................................................
......................
Dated the ................................................. day of
.................................19...............
In accordance with Section 9-A of the Industrial
Disputes Act, 1947, I/We hereby give notice to all concerned
that it is my / our intention to effect the change/changes
specified in the annexure, with effect from ................... on the
conditions of service applicable to workmen in respect of the
matters specified in the Fourth Schedule to the said Act.
Signature
Designation
ANNEXURE
(Here specify the change/changes intended to be
effected)
Copy forwarded to: -
1. The Secretary of registered trade union, if any.
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2. The Conciliation Officer (here enter office address
of the Conciliation Officer in the Local area
concerned),
3. The [Assistant Labour Commissioner/Labour
Officer](here enter office address of the [Assistant
Labour Commissioner/Labour Officer] in the Local
Area concerned).
4. The Labour Commissioner in Karnataka,
Bangalore]
25. Form-E in its format, does not provide for
mentioning the name of the workmen. It refers to Section 9A
of the Act of 1947. It mandates a copy to be forwarded to the
Secretary of Registered Trade Union, Conciliation Officer and
Assistant Labour Commissioner/Labour Officer in the local
area and also a copy to the Labour Commissioner in
Karnataka.
26. Though the learned counsel appearing for the
respondents would urge that the proviso to the Rule also
mandates notice to registered Trade Union (in case exists),
and the word "also" appearing in the proviso leads to the
conclusion that the individual notice to each workman is a
must, the contention cannot be accepted to hold that each
17
individual workman is to be served either by post or service
of similar nature in a situation where the proposed change
affects all workmen and the workmen have a registered Union
or Association. The reasons are not far to seek. The
interpretation canvassed by the Union runs contrary to
requirement of Rule 35 and Form-E.
27. When a main provision of law is required to be
interpreted with corresponding Rule or any other thing
prescribed in the provision or the Rule, (Form-E in this case)
one should interpret them in such a way, that purpose of
both, the main provision, and the Rule, is not defeated.
28. Section 9A as already noticed mandates notice in a
prescribed manner. The mode of service of notice is not
prescribed in Section 9A. However, Rule 35 prescribes the
procedure/mode of service of notice and provides for the
format of the notice. The expression used is "Any employer
intending to effect any change in the conditions of service
applicable to any workman in respect of any matter specified
in the Fourth Schedule to the Act shall give notice of such
intention in Form 'E". The legislature does not use the
18
expression "shall give notice of such change personally/or
through post to workman affected. This Court is not
saying that the Rule should have been only in the same way
illustrated above, to hold that personal notice to workman is a
must. By using some other expression also, it is possible to
legislate that the notice to each workman is a must. However,
this Court is of the view that from the language employed in
Rule 35, one can conclude that a notice to workmen though is
a must, is not required to be sent individually or
personally. Individual notice through registered post is
specifically prescribed to be served on the Secretary of the
Trade Union and not workmen.
29. The conclusion arrived above also appears to be
justified from one more perspective. In terms of notification
dated 12.08.1960, Rule 36 which prescribed the procedure for
service of notice is omitted.
30. Rule 36 as it stood before omission read as under.
"Manner of service of Notice of Change.-
(1) Where there are numerous workmen
affected by a notice of change and the majority
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of such workmen are members of any trade
union or association the service of notice on the
Secretary, or where there is no Secretary, on
the principal officer of the trade union or
association shall be deemed to be service on all
such workmen. The employer shall, at the same
time, arrange to exhibit the notice by affixing it
to a notice board in the manner specified in
sub-rule 92):
Provided that if the Secretary or the principal
officer refuses to receive the notice or that for
any other reason the notice cannot be served
on the Secretary or the Principal Officer, the
exhibition of the notice in the manner in sub-
rule (2) shall be deemed to be service on all
such workmen.
(2) Where there are numerous workmen
affected by a notice of change and the majority
of such workmen are not members of any trade
union or association, the employer shall, where
personal service is not practicable, cause the
service of any such notice to be made by
affixing the same to a notice board at or near
the entrance or entrances of the Establishment
concerned and the notice shall remain so affixed
for a period of twenty-one days. The notice
shall be in English, the regional language and
20
the language understood by the majority of the
workmen in the Establishment concerned.
(3) A copy of the notice shall
simultaneously be forwarded by the employer to
the conciliation Officer concerned and the
Labour Commissioner."
(Emphasis supplied)
31. Rule 36 which is omitted took note of two kinds of
situation. In a situation where change proposed does affect
majority of the workmen who are the members of the Union
and a situation where majority of the workmen who are
affected by the change are not members of the Union. In
later situation, Rule 36 suggests as far as practicable
personal notice to workmen and if it is not practicable then by
affixture to a notice board near the main entrance of the
establishment. The requirement of personal notice to
workmen can be inferred from Rule 36(2) because of the use
of the expression, "the employer shall, where personal service
is not practicable, cause the service of any such notice to be
made by affixing the same to a notice board at or near the
entrance or entrances of the Establishment concerned".
21
32. Rule 36 was omitted on 12.08.1960 and
simultaneously Rule 35 is amended and the provision relating
to display of notice in conspicuous part of the main entrance
of the establishment is introduced in Rule 35. In addition, the
proviso to Rule 35 is introduced, which mandated notice
through registered post to the Secretary of the registered
Union. Rule 36, which indicated personal notice under certain
circumstance is not found in Rule 35 which is amended. Thus,
logical conclusion would be that the legislature wanted to
dispense with the procedure of personal notice to workmen at
least where proposed change affected all workmen in an
establishment having registered Union.
33. In Rule 35 of Rules, 1957, the legislature seems to
have consciously adopted two different modes of service of
notice under Section 9A of Act of 1947. One is the notice to
workmen by way of display in a notice board and another is to
the registered Union through registered post.
34. It is further relevant to note that the format does
not provide for mentioning the name of the individual
22
workman. In other words, individual notice to workman is not
contemplated. Thus, the notice to the workman is presumed
to be served if the notice is displayed conspicuously by the
employer, on the notice board at the main entrance of the
Establishment and in the Manager's office. Thus, the notice if
published on the main entrance of the establishment and at
the manager's office, and if the copy of the notice is also sent
to the Trade Union through registered post, then, such notice
would comply with requirement of Section 9A of the Act of
1947.
35. In the instant case, the respondents have not
raised a contention that the management has not published
the notice on the notice board at the main entrance and the
manager's office. It is not their grievance that the notice is
not sent to the Trade Union. At the same time, it is also
required to be noted that the Trade Union has raised the
dispute on receipt of the notice. Thus, the contention relating
to non-compliance of Section 9A of the Act of 1947 has to be
rejected and accordingly, rejected.
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36. For the reasons recorded, this Court is of the view
that if proposal to change the service conditions affects all
workmen and if the Establishment has the Registered Union
and if the notice is published on the main entrance of the
Establishment, and at the manager's office and if the copy of
the notice is also sent to the Trade Union through registered
post in Form-E, then, such notice would comply with
requirement of Section 9A of the Act of 1947.
37. The further contention based on the decision of the
Apex Court in the case of Babu Verghese supra that when a
law requires something to be done in a particular manner, it
has to be done in the same manner else it should not be done
at all has also no application to the present case as the
decision is taken in the manner prescribed under Section 9A
read with Rule 35.
38. Discussion on point No.(ii):
It is an admitted factual position in this case that there
is no Statute which governs the issue relating to calculation of
vacation leave by reckoning the number of 'working days' in
a month in contrast to number of 'days' in a month.
24
39. However, the objection is on the premise that the
Deputy General Manager has the authority to issue notice
under Section 9A and the notice can be only by an employer
as defined in the Act of 1947. At this juncture, it is necessary
to refer to clause No.2.3 of the certified Standing Orders of
the petitioner which reads as under.
'Employer' means Managing Director of the Company
and includes the General Manager, Deputy General
Manager of the Factory Division or Branch or any
other Officer to whom powers and functions may be
delegated in this behalf. And whenever the expression
'Management' is used it shall mean the 'Employer'.
40. The definition of "employer" in the certified
Standing Orders include many officers including the Deputy
General Manager, if authorised. It is noticed from the
evidence that the authority is issued to the Deputy General
Manager to take the decision.
41. It is further relevant to note that the Standing
Orders which are certified, provide for the exercise of certain
powers of the employer by the officer named in the definition
25
of "employer" in the Standing Orders. The Deputy General
Manager has taken steps under Section 9A of the Act of 1947.
This being the position, the contention that the decision is
taken by the person who has no authority is also not
acceptable.
42. Section 25-J of the Act of 1947 deals with effect of
laws inconsistent with the Chapter-VA of the Act of 1947. The
said provision provides for overriding effect of the provisions
contained in Chapter-VA, over the provisions of any other law
including Industrial Establishments (Standing Orders) Act,
1946, which are inconsistent with the provisions of Chapter-
VA of the Act of 1947. Section 9A of the Act of 1947 is in
Chapter-IIA. The definition of Employer in Section 2(g) is
found in Chapter-I of the Act of 1947. Hence, this Court is of
the view that the definition of "Employer" in Certified
Standing Orders can be read into the definition of "Employer"
in Section 9A of the Act of 1947 in appropriate cases.
43. Respondents contend that there is no decision by
the Board to change the formula to calculate the vacation
leave and such change is suggested by the Comptroller of
26
Audit and the Deputy General Manager was under no
obligation to change the service conditions.
44. It is not in dispute that the employer has the
power to change the service conditions. Only requirement is
the procedure prescribed is to be followed. Merely because
the decision is taken based on the objections raised by the
Comptroller of Audit, it cannot be said that the decision is
erroneous. As long as the power to change the formula
relating to leave encashment is available to the employer, the
Court has to consider whether the procedure prescribed for
effecting such change is followed or not. In such a situation,
the reason for such change, even if it is suggestion by an
outsider, (Comptroller of Audit in this case as urged) does not
matter much, given the fact power to effect changes is with
the employer. The question is whether such change is
impermissible or not.
45. It is also relevant to note that the merit of the
decision to change the divisor to "30" from "26" is not called
into question except by contending that the divisor "26" was
chosen by considering "26" working days in a month which is
27
the yardstick for computing the gratuity. The divisor chosen
to compute the gratuity is based on the expression "working
days" found in the Payment of Gratuity Act, 1972 (for short "
the Act of 1972"). The said Act does not apply to the fact
situation. This is already held so in earlier Judgment. Thus,
essentially, the dispute is on the procedure adopted and the
authority of the officer who decided to change the divisor. The
Act of 1972 is a special enactment which deals with payment
of gratuity and the said Act, itself provides for payment of
gratuity by reckoning the number of working days in a month.
The said analogy cannot be applied to calculate vacation leave
unless the Statute mandates such mode of calculation based
on number of working days.
46. This Court has also considered the order passed in
Writ Petition No.8743/2006 referred to by the Industrial
Tribunal. In the said judgment, the coordinate Bench of this
Court has taken a view that the approval of the Board of
Directors is necessary to change the Leave Encashment Rules.
However, it is to be noticed that in the said case, the
coordinate Bench has proceeded to take such a view on the
28
premise that it is admitted that the Board of Directors have to
take the said decision. In fact in this case, such a proposition
is not admitted by the petitioner. In fact, it is asserted by the
petitioner that the person issued notice under Section 9A is
competent to take such a decision.
47. It is further noticed that there is no reference to
the Certified Standing Orders and the definition of 'Employer'
as found in the Certified Standing Orders. Under these
circumstances, this Court is of the view that the decision
impugned has to be taken by the Board of Directors is not the
correct legal position insofar as the petitioner is concerned.
48. It is also to be noticed that there is nothing on
record to hold that the Board has objected to the said
decision. On the other hand, the Establishment has defended
the decision before the Tribunal and is prosecuting the
petition. Thus such, it can be safely concluded that the Board
has approved the said decision assuming that the Board is
required to give the approval.
29
49. The Tribunal has proceeded to hold that the
decision taken earlier in changing the formula to calculate the
leave encashment was by the Board and later, the decision
was taken without the Board's approval. The finding that the
Board has not given approval is incorrect since the
Establishment has defended the action of the employer
defined in the Standing Orders who has taken the decision.
50. Though learned counsel appearing for the
respondents by referring to the judgment of the Apex Court in
Syed Yakoob supra and Indian Overseas Bank vs I.O.B.
Staff Canteen Workers' Union and Another3 has urged
before this Court that the finding of fact arrived at by the
Industrial Tribunal based on evidence cannot be brushed
aside in exercise of jurisdiction under Article 227 of the
Constitution of India. This Court is of the view that the said
judgment does not support the case of the respondents
however, it does support the case of the petitioner. It is
relevant to note that in the judgment in Syed Yakoob supra,
the Apex Court in terms of paragraph No.7 has held as under:
3
(2000)4 SCC 245
30
"....... An error which is apparent on the
face of the record can be corrected by a writ but
not an error of fact, however grave it may
appear to be......".
51. As already noticed, the requirements of Section 9A
read with Rule 35 referred to above have not been considered
at all by the Industrial Tribunal. The impugned award cannot
be said to be one supported by evidence or law. The award
proceeds on the assumption that the Board alone is competent
to take such a decision and the Board has not taken the
decision. The finding that the Board alone could have changed
the divisor is incorrect from the reading of the Standing Orders
and the Tribunal overlooked the fact the Establishment is
defending the decision which speaks about the Board's
approval even if it is required.
52. The findings of the Board of Directors must give
approval for the decision is also an erroneous finding rendered
without noticing the definition of the employer in the Certified
Standing Orders.
53. Further contention of the learned counsel for the
respondent referring to the judgment of Suresh Chandra
31
Singh supra also does not come to the aid of the respondents.
In the said case, the Apex Court has held that each public
sector enterprise has an independent body/entity and is free
to formulate its own service conditions.
54. In the instant case, the petitioner-Establishment
has taken a decision to change the divisor applicable to
calculation of vacation leave. Though the decision appears to
be prompted by the report of the Comptroller General of Audit,
it cannot be said that the decision is one without jurisdiction.
At the end of the day, it is the petitioner-Establishment which
has taken the decision. It is also relevant to note that when
the divisor was changed from "30" to "26", the petitioner-
Establishment reserved the right to modify the service
conditions in relation to Leave Encashment. The relevant
portion of 'BEML Encashment of Vacation Leave Rules And
Procedure' reads as under:
"Management reserves the right to
interpret, modify, amend or withdraw the
above scheme if circumstances so warrant".
32
The rest of the judgments cited by the learned counsel for the
respondents would be on the requirement of issuance of notice
under Section 9A of the Act of 1947.
55. This Court has not taken a view that there is no
need to issue notice under Section 9A in respect of matters
covered under Section 9A of the Act of 1947 and it is not the
case of the petitioner either. The dispute is relating to mode of
service of notice. The judgments cited by the learned counsel
for the respondents on the requirement of Section 9A are not
the judgments interpreting Section 9A with reference to Rule
35 of the Rules, 1957. Thus, there is no need to elaborately
discuss the said judgments. Suffice it to say that those
judgments do not cover the issue raised in the petition relating
to service of notice under Section 9A.
56. For the reasons recorded above, this Court
concludes as under:
(i) Notice under Section 9A of the Act of 1947 read with
Rule 35 of the Rules, 1957 is not required to be served to
each individual workman through post or other modes of
33
similar nature if the proposed change affects all workmen
and the establishment has a registered Union or Association;
(ii) In the situation referred to above, publication of notice
under Section 9A of the Act of 1947 on the main entrance of
the establishment on a notice board, and the manager's
office amounts to a valid notice to the workmen, and a notice
through registered post to the secretary of the Registered
Union is valid service of notice to all workmen.
(iii) The "employer" named or defined in the certified
Standing Orders of the petitioner-Establishment is competent
to issue notice to change the formula to calculate the
vacation leave of the employees if he is so authorised under
the Standing Orders to issue such notice.
(iv) This Judgment should not be construed as having laid
down a law to the effect that, notice under Section 9A of the
Act of 1947 need not be served to individual workman in any
circumstances. In a situation where the proposed change
does not affect all the workmen of the establishment and
only affects some of them or few of them, whether individual
34
notice to such affected workman is required or not is not
answered as such question did not arise in this petition.
57. Thus, this Court is of the view that the impugned
award is erroneous. Since the Tribunal has held that Notice
under Section 9A of the Act of 1947 is invalid, the impugned
award is to be set aside.
58. Hence, the following:
ORDER
(i) Writ Petition is allowed.
(ii) The impugned award dated 11.09.2013 in
I.D.No.69/2007 on the file of Industrial
Tribunal, Bangalore is set-aside. The notice
dated 21.07.2006 issued under Section 9A of
the Industrial Disputes Act, 1947 held to be
valid.
(iii) The reference is answered in favour of the
petitioner-Establishment.
Sd/-
(ANANT RAMANATH HEGDE)
JUDGE
CHS/BRN
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