The Handloom Export Promotion CouncilEmployees' Union v. Government of Tamil Nadu

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 31..01..2008CORAM:THE HONOURABLE MR. JUSTICE K. CHANDRUW.P. Nos. 17963, 18603 and 22138 of 2007andM.P.Nos. 1 of 2007 in respective W.Ps.The Handloom Export Promotion CouncilEmployees' Union Rep. by its President INTUC Office45 Royapettah High RoadChennai .. Petitioner in W.P. No. 17963 of 2007R. Ellappan .. Petitioner in W.P. No. 18603 of 2007Lalitha Devi .. Petitioner in W.P. No. 22138 of 2007Vs.1.Government of Tamil NaduRep. By its SecretaryLabour and Employment DepartmentFort St. GeorgeChennai – 9.. R1 in W.P. No. 17963 of 20072.The Deputy Commissioner of Labour (Conciliation) -1DMS CompoundTeynampetChennai – 6.. R2 in WP.Nos.17963, R1 in WP.18603 and 22138 of 20073.The Management of Handloom ExportPromotion Councilrep. By its Executive DirectorNo. 34 Cathedral Garden RoadNungambakkamChennai.. Respondent No.3 in W.P.No.17963 of 2007 R2 in WP.No.18603 & 22138/07 https://hcservices.ecourts.gov.in/hcservices/ W.P. No. 17963 of 2007 filed under Article 226 of the Constitutionof India for the issuance of writ of Mandamus directing the firstrespondent to refer the Industrial Dispute relating to age of retirementof the employees of the third respondent for adjudication by IndustrialTribunal / Labour Court and consequently to forbear the third respondentuntil the dispute is adjudicated from retiring its employees at 58 yearswithout express permission under Section 33(1)(a) of the I.D. Act fromthe competent authority.W.P. No. 18603 of 2007 filed under Article 226 of the Constitutionof India for the issuance of writ of Certiorarified Mandamus aftercalling for the records pertaining to the order in Hepc/VI/Admn/Extn.of service/07 dated 30.4.2007 of the second respondent, quash the sameand consequently direct the second respondent to continue the petitionerin service up to 60 years.W.P. Nos. 22138 of 2007 filed under Article 226 of the Constitutionof India for the issuance of writ of Declaration declaring Rule 39 ofthe Service Rules of the Handloom Export Promotion Council insofar asgiving option to the second respondent for extension of service beyond58 years upto 60 years to the employees even if employees are foundmedically fit as illegal, arbitrary and violative of Articles 14 and 21of the Constitution of India and consequently to direct the secondrespondent to continue the petitioner upto 60 years.For Petitioners : Mr. D. Hari Paranthamanin all WPs.For R1 in : Mrs. Bhavani Subbaroyan, AGP17963 of 2007For R1 in : Mr. Sadullah Syed W.P. No. 18603 of 2007For Management : Mr. A.L. Somayaji, SC for Mr. M.R. RaghavanC O M M O N O R D E RHeard Mr. D. Hari Paranthaman, learned counsel appearing for thepetitioners in all the writ petitions, Mrs. Bhavani Subbaroyan, learnedAdditional Government Pleader, representing the State of Tamil Nadu, Mr.Sadullah Syed, learned counsel appearing for the first respondent inW.P. No. 18603 of 2007 and Mr. A.L. Somayaji, learned Senior Counselleading Mr. M.R. Raghavan, learned counsel appearing for the Managementand have perused the records. https://hcservices.ecourts.gov.in/hcservices/

2.The petitioner in W.P. No. 17963 of 2007 is a registered TradeUnion affiliated to Indian National Trade Union Congress [for short,'INTUC']. The prayer in the said writ petition is for a direction tothe first respondent to refer the industrial dispute relating to age ofretirement of the employees in the third respondent Handloom ExportPromotion Council [for short, 'HEPC'] for adjudication by an appropriateadjudicating machinery and for a consequential direction to prevent theHEPC from retiring any of its employees at the age of 58 years withoutgetting express permission from the adjudicator under Section 33(1)(a)of the Industrial Disputes Act, 1947 [for short, 'I.D. Act'] pendingadjudication. The writ petition was admitted on 15.5.2007 and pendingthe writ petition, in M.P. No. 1 of 2007, interim injunction was grantedrestraining the HEPC from giving effect to the amended Rule 39. 3.In W.P. No. 18603 of 2007, the petitioner R. Ellappan wasworking as a Junior Accountant and he had challenged the order dated30.4.2007 in refusing to grant extension of service in the HEPC. Thesaid writ petition was admitted on 30.5.2007 and pending the writpetition, no interim order was granted.4.In W.P. No. 22138 of 2007, the writ petitioner (Lalitha Devi)was working as a Superintendent in the HEPC and she had sought for awrit of declaration to declare that the refusal to grant the petitionerextention of service till 60 years as illegal and consequentially tocontinue her in service from 01.7.2007 to 30.6.2008, i.e., the date ofwhich till she completes the age of 60 years. Pending notice on thewrit petition, an interim injunction was granted on 29.6.2007 and thesame is continuing till date.5.It is claimed that the HEPC was registered under the CompaniesAct and it is governed by its Memorandum of Association and Articles ofAssociation. The said Company is under the control of the Governmentof India, Ministry of Textiles. It is also claimed that the said HEPC,though a registered Company, is having deep and pervasive control by theGovernment of India and it is an instrumentality of the Government and a"State" within the meaning of Article 12 of the Constitution of Indiaand hence, also amenable to the writ jurisdiction. A typed set ofpapers have been filed by the petitioner Trade Union to show the natureof control held by the Government of India. 6.However, it is contended by the HEPC that it is not the "State"within the meaning of Article 12 of the Constitution of India and it isnot amenable to writ jurisdiction of this Court. Reliance was placedon two judgments of the Supreme Court relating to State Council ofEducation, Research and Training (SCERT) as well as State Institute ofEngineering and Rural Technology (IERT). The Supreme Court vide its https://hcservices.ecourts.gov.in/hcservices/ decision reported in 2007 (10) Scale 41 [Lt. Governor of Delhi v.V.K. Sodhi] held that SCERT is not a State or authority within themeaning of Article 12 of the Constitution of India and normally, it isnot amenable to writ jurisdiction of the High Court under Article 226 ofthe Constitution of India. In the same way, in the case relating toMohammad Sadiq v. State of U.P. [2007 (11) Scale 361], the SupremeCourt held that IERT is not an instrumentality of the State and hence, awrit petition is not maintainable against its actions.7.Per contra, Mr. D. Hari Paranthaman, learned counsel appearingfor the petitioners, relied upon the judgment of the Constitution Benchof the Supreme Court reported in 2002 (5) SCC 111 [Pradeep Kumar Biswasv. Indian Institute of Chemical Biology and others] to state that HEPCis a State within the meaning of Article 12 of the Constitution of Indiaand, therefore, it is amenable to the writ jurisdiction of this Court.Since the writ petitions can be disposed of on other grounds, it isunnecessary to render any finding about the status of HEPC in thepresent writ petitions. 8.In the present case, the HEPC had framed the Service Rules forits employees and Rule 39 relating to retirement is as follows:"Every employee shall normally retire on attaining the ageof 58 years. The Committee may, however, extend theperiod of service of an employee beyond the age of 58years at a time upto the age of 60, provided he continuesto remain medically fit."[Emphasis added]9.Subsequently, the petitioner Union placed a Charter of Demandson the HEPC by a letter dated 16.8.2004 stating that consequent upon theincrease in the age of retirement for Central Government servants and inother Export Promotion Councils, the age of retirement should beincreased from 58 to 60 years uniformly to all employees. Therefore,the respondent HEPC was directed to notify an uniform retirement age of60 years with effect from 01.9.2004. Subsequently, this demand wasput up in the Executive Committee meeting of the HEPC held on 27.02.2006as item No. 9. But the said agenda was adjourned to the next meetingproposing to take legal advice. In the meeting held on 16.4.2007 (initem No. 3), the Council, on the basis of the existing Rules, did notrecommend the extention of service of Mr. R. Ellappan (petitioner inW.P. No. 18603 of 2007). This prompted the Union in raising a disputebefore the Deputy Commissioner of Labour – I, Chennai. Discussionswere held before the said Officer and conciliation notice was alsoissued to the HEPC by a notice dated 24.4.2007. In the meanwhile, inthe Executive Committee meeting held on 16.4.2007, it was proposed toamend Rule 39 and it was accordingly amended and the power to grant https://hcservices.ecourts.gov.in/hcservices/ extention of service from 58 to 60 was deleted thereby making theuniform age of retirement as 58 years thereby HEPC cannot grantextension to any employee. Aggrieved by the said action of the HEPC,the first writ petition was filed with the prayer extracted above.10.Mr. D Hari Paranthaman, learned counsel appearing for thepetitioners submitted that the members of the petitioner Union areentitled to have 60 years as their age of retirement on par with theCentral Government employees as well as employees of the other ExportPromotion Councils and the Rule before amendment, inasmuch as it granteda discretion to the Executive Committee to grant extention of one yearat a time subject to a maximum of two years, is arbitrary as it islikely to be applied on a pick and choose method. In any event,since conciliation proceedings have been notified by the secondrespondent by a communication dated 24.4.2007, the respondent HEPCcannot give effect to the amendment made and in any case, if they wantto make any change pending the conciliation, it requires an expresspermission from the Conciliation Officer in terms of Section 33(1)(a) ofthe I.D. Act and any contravention of the said action will be void abinitio. Therefore, a direction was sought in terms of the DivisionBench judgment of this Court reported in 2006 (3) L.L.J. 245 [ArasuViraivu Pokkuvarathu Oozhiyar Sangam v. State Express TransportCorporation Ltd.]11.The learned counsel also submitted that this Court in theexercise of its extraordinary power vested on it under Article 226 ofthe Constitution of India can grant a declaratory relief. Once therespondents are precluded from amending Rule 39, then as per the un-amended Rule 39, employees are entitled to continue up to 60 years atthe discretion of the Executive Committee of the HEPC and such adiscretion cannot be permitted in the light of the judgment of theSupreme Court reported in 1981 (4) SCC 335 [Air India v. NergeshMeerza]. The learned counsel referred to paragraph 120 of thejudgment, which reads as follows:Para 120:"For these reasons, therefore, we have no alternative butto strike down as invalid that part of Regulation 47 whichgives option to the Managing Director to extend theservice of an AH. The effect of striking down thisprovision would be that an AH, unless the provision issuitably amended to bring it in conformity with theprovisions of Article 14 would continue to retire at theage of 45 years and the Managing Director would be boundto grant yearly extensions as a matter of course for aperiod of ten years if the AH is found to be medicallyfit. This will prevent the Managing Director fromdiscriminating between one AH and another." https://hcservices.ecourts.gov.in/hcservices/

12.With reference to the last contention, this Court is unable togo into the said issue because of two reasons. Firstly, that is not anissue raised in W.P. No. 17963 of 2007 and only a prayer foradjudication regarding retirement age is sought for and secondly, inW.P. No. 18603 of 2007, the prayer is only to set aside the refusal togrant extention and in the prayer in W.P. No. 22138 of 2007 was for adeclaration that the refusal to grant extention to the petitioner up to60 years was illegal.13.It is an admitted fact that the respondent HEPC has removed thediscretion in granting extention from 58 to 60 years and fixed a uniformage of retirement as 58 years for all employees vide its resolutiondated 16.4.2007. Therefore, the question whether the employees underHEPC are entitled to have 60 years as the age of retirement will be thesubject matter of the pending industrial dispute and the same is yet tobe referred and adjudicated by a competent adjudicating machinery.Unless the petitioners succeed, the question of any interim reliefcannot be granted. Either before the amendment or after the amendment,the retirement age is only 58 years. It was contended that there is novested right on the employees to demand, as a matter of right, extentionup to 60 years. 14.In fact, there is no arbitrariness in the grant of extentionand in this context, the judgment of the Supreme Court reported in 1961(2) L.L.J. 639 [Kailash Chandra v. Union of India] was relied upon.Reliance was placed upon the following passages found at page 642 of thesaid judgment and the same may be usefully reproduced below:"This intention is made even more clear and beyonddoubt by the use of the word "ordinarily". "Ordinarily"means "in the large majority of cases but not invariably".This itself emphasizes the fact that the appropriateauthority is not bound to retain the servant after heattains the age of 55 even if he continues to beefficient. The intention of the second clause thereforeclearly is that while under the first clause theappropriate authority has the right to retire the servantwho falls within C1 (a) as soon as he attains the age 55,it will, at that stage, consider whether or not to retainhim further. This option to retain for the furtherperiod of five years can only be exercised if the servantcontinues to be efficient; but in deciding whether or notto exercise this option, the authority has to considercircumstances other than the question of efficiency also;in the absence of special circumstances he "should" retainthe servant; but what are special circumstances is left https://hcservices.ecourts.gov.in/hcservices/ entirely to the authority's decision. Thus, after theage of 55 is reached by the servant the authority has toexercise its discretion whether or not to retain theservant; and there is no right in the servant to beretained, even if he continues to be efficient.Reliance was placed by the learned counsel on anobservation of Mukherjea, J. (as he then was), in Jai Ramv. Union of India [AIR 1954 SC 584] when speaking for theCourt as regards this rule, his lordship said:"We think it is a possible view to take upon thelanguage of this rule that a ministerial servantcoming within the purview has normally the right tobe retained in service till he reaches the age ofsixty. This is conditional undoubtedly upon hiscontinuing to be efficient. We may assume, therefore,for purposes of this case that the plaintiff had theright to continue in service till sixty and could notbe retired before that except on the ground ofinefficiency." It would wholly unreasonable however to consider this as adecision on the question of what this rule means.Dealing with an argument that as the plaintiff under thisrule has the right to continue in service till sixty andcould not be retired before that except on the ground ofinefficiency certain results follow, the Court assumed forthe sake of argument that this interpretation was possibleand proceeded to deal with the learned counsel's argumenton that basis. It was not intended to say that this wasthe correct interpretation that should be put on the wordsof the rule.The correct interpretation of rule 2046(2)(a) of theCode, in our opinion, is that a railway ministerialservant falling within this clause may be compulsorilyretired on attaining the age of 55 but when the servant isbetween the age of fifty-five and sixty,the appropriateauthority has the option to continue him in service,subject to the condition that the servant continues to beefficient but the authority is not bound to retain himeven if a servant continues to be efficient.It may be mentioned that this interpretation of therule has been adopted by several High Courts in India.Besant Kumar Pal v. Chief Electrical Engineer [1956-II-L.L.J. 160], Kishan Dayal v. General Manager, https://hcservices.ecourts.gov.in/hcservices/ Northern Railway [A.I.R. 1954 Pun. 245] and RaghunathNarain Mathur v. Union of India [A.I.R. 1953 All. 352 =1953 A.L.J. 76].We therefore hold that the High Court was right inholding that this rule gave the plaintiff no right tocontinue in service beyond the age of 55."15.Mr. A.L. Somayaji, learned Senior Counsel appearing for therespondent Management HEPC submitted that the infraction of Section 33(1)(a) of the I.D. Act does not arise in this case because no servicecondition of the employees is altered. Even as per the contention ofthe Trade Union, the power vested on the Executive Committee to extendthe service up to 60 years each time with one year at a time by thediscretion of the Executive Committee, is likely to result inarbitrariness and, therefore, what is now sought to be achieved by theCommittee is to denude itself even the power of discretion.Therefore, the Trade Union must be happy that the discretion has beenremoved. If for any reason, the Trade Union seeks enhancement ofretirement age on par the with other employees in other services, then,that can be done only through an adjudication where necessary materialswill have to be placed by both parties about the efficacy of increasingthe retirement age. Therefore, it is strongly contended that pendingdirection to the State Government for referring the dispute, no interimorder should be granted by this Court. 16.Insofar as the first portion of the prayer is concerned, thereis no difficulty in giving a direction to the respondents 1 and 2 torefer the issue for adjudication by an appropriate Industrial Tribunal /Labour Court. But in the present case, since the conciliation had notended in failure and unless report is sent by the second respondent, nodirection can be given by this Court for referring the dispute foradjudication under Section 10(1) of the I.D. Act. Therefore, atpresent, this Court can only direct the second respondent to submit hisFailure Report to the State Government in terms of Section 12(4) of theI.D. Act within a period of three weeks from the date of receipt of acopy of this order. If such a report under Section 12(4) of the I.D.Act is received, the first respondent is hereby directed to refer thedispute for adjudication by a Labour Court / Industrial Tribunal withina period of four weeks from the date of receipt of a copy of the FailureReport to decide the issue regarding the revision of age of retirementas demanded by the petitioner Union.17.With reference to the second portion of the prayer, this Courtis not inclined to grant any such order. The question of infractionof Section 33(1)(a) of the I.D. Act will arise only if there is anyalteration of service condition. In the present case, the age ofretirement was only 58 years and it is liable to be extended up to 60 https://hcservices.ecourts.gov.in/hcservices/ years by granting one year extention at a time at the discretion of theExecutive Committee. Therefore, when the petitioner Union demandedthe removal of the discretion by the Executive Committee, they, ineffect, wanted 60 years as the age of retirement. During the pendency ofthe conciliation proceedings, the third respondent HEPC had removed thediscretion and retained the retirement age as 58 years uniformly to allworkmen. Therefore, there is no alteration of any service conditionof the employees in the matter of their retirement age. 18.The reliance placed by the learned counsel for the petitioneron the Air India case (cited supra) has no relevance because in thepresent case, there is no discretion vested with the third respondentHEPC to grant extention of service to any person after the amendmentwhereas in the Air India case, Regulation 47, which gave power to theManaging Director to extend the service of the Air Hostesses, wasconsidered to be arbitrary and the power of the Managing Director togrant such extention was held to be discriminatory from one Air Hostessto another. If the existing service condition is not to have 60 yearsas age of retirement, then, by the amendment to the service rule, therespondent HEPC had not altered any service condition as projected bythe learned counsel for the petitioners. It is not as if when thepetitioner Union is seeking for enhancement of age of retirement, as acounter blast, the Management had reduced the age of retirement.Therefore, the request made by the learned counsel for the petitionerswith reference to the second prayer is misconceived. Pendingadjudication regarding the age of retirement, the petitioners in W.P.Nos. 18603 of 2007 and 22138 of 2007 cannot be continued in service onthe basis of the interim orders passed by this Court. 19.In fact, in the case of the petitioner in W.P. No. 18603 of2007, there was a specific rejection by the Executive Committee fromcontinuing his service. In the case of petitioner in W.P. No. 22138of 2007, her entire case was based upon the interim order obtained inW.P. No. 17963 of 2007. 20.In view of the above discussion, in W.P. No. 17963 of 2007,there will be a direction to the second respondent to send his FailureReport to the first respondent State Government within a period of threeweeks from the date of receipt of a copy of this order, under Section 12(4) of the I.D. Act and on receipt of such a report, a further directionis issued to the first respondent to refer the dispute relating toenhancement of retirement age for adjudication by appropriate IndustrialTribunal / Labour Court within a period of four weeks thereafter. https://hcservices.ecourts.gov.in/hcservices/

21.In the light of the above, W.P. Nos. 18603 and 22138 of 2007must fail and will stand dismissed. Interim orders already granted bythis Court will stand vacated. However, the parties are allowed tobear their own costs in all these petitions. Connected MiscellaneousPetitions stand closed.Sd/Asst.Registrar/true copy/Sub Asst.RegistrargriTo1.SecretaryGovernment of Tamil NaduLabour and Employment DepartmentFort St. GeorgeChennai – 92.The Deputy Commissioner of Labour (Conciliation) -1DMS CompoundTeynampet, Chennai – 61 cc To Mr.R.Raghavan, Advocate, SR.4487.3 cc To Mr.D.Hariparanthaman, Advocate, SR.4516, 4515, 4517.1 cc To The Government Pleader, SR.4787.W.P. Nos. 17963, 18603 &22138 of 2007ASM(CO)RVL 04.02.2008