Holding

The Madhya Pradesh Industrial Employment (Standing Orders) Act, being a special law with presidential assent, prevails over the general regulations under the Electricity (Supply) Act, and the Board’s notification reducing retirement age to 58 years is valid, leading to dismissal of the appeal.

Summary

The case concerned a dispute over the retirement age of employees of the Madhya Pradesh Electricity Board. The Board, under Section 79(c) of the Electricity (Supply) Act, 1948, reduced the retirement age to 58 years by a notification dated 26‑December‑2000, overturning an earlier agreement (dated 10‑June‑1996) that had aligned the retirement age with the Central Government’s recommendation of 60 years. The appellant union argued that the standing order issued under the Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961 – a special law with presidential assent – should prevail over the Board’s general regulations, and that the agreement, though expired, continued to bind the Board. The Supreme Court held that the State’s special law prevails over the general parliamentary regulation, but since no notification under Section 2(2) of the 1961 Act excluded the Board’s regulations, the Board’s notification was valid. Consequently, the appeal was dismissed.

Issues considered

Whether regulations made under Section 79(c) of the Electricity (Supply) Act, 1948 prevail over the standing order framed under the Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961.
Whether the Board’s notification reducing the retirement age is invalid for lack of a State Government notification under Section 2(2) of the 1961 Act.
Whether the Board acted ultra vires in issuing the 26‑December‑2000 notification after the expiry of the 1996 agreement.

Legislation cited

Electricity (Supply) Act, 1948s. 79(c)
Industrial Disputes Act, 1947s. 19
Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961s. 2(2)
Madhya Pradesh Industrial Relations Act, 1960s. 33, s. 99

Subjects

Electricity (Supply) ActIndustrial Employment (Standing Orders) ActRetirement ageLabour lawConcurrent legislationArticle 254Special vs general lawPresidential assentAgreement expiryRegulation vs standing order

Judgment

M.P. VIDYUT KARAMCHARI SANGH A
v.
M.P. ELECTRICITY BOARD

MARCH I 8, 2004

(V.N. KHARE, CJ., S.B. SINHA AND S.H. KAPADIA, JJ.] B

Constitution of India-Schedule VII Entries 22,23,24 and 38-
Electricit)~Legislation relating to employees of Electricity Board-Competence
of State Legislature-Held, Presence of "electricity" in Entry 38 would not C
debar the State Legislature from enacting laws to regulate the conditions of
service of electricity Board's employees.

Constitution of India-Article 254(2)-Parliamentary Law and State
Law-Conflict between-Effect of-Regulations framed under Parliamentary
Law-Standing Order issued under State Law-Regulation providing age of D
retirement at 58 years-Standing Order permitting agreement enhancing age
of retirement beyond 58 years-State Law receiving assent of the President-
Held, State Law would prevail over Relations framed under Parliamentary
Law-Electricity (Supply) Act, 1948-s. 79(c).

Interpretation of Statute-General law and special /aw-Effect of- E
Regulations framed under Electricity (Suppl.) Act providing age of retirement
at 58 years-State Legislature enacting Madhya Pradesh Industrial Employment
(Standing Orders) Act· dealing with service conditions of employees-Act
permitting its own exclusion if notification applying other rules and regulations
issued by the State Government-No such notification Issued-Standing Order F
issued under the State Act-Standing Order permitting agreement enhancing
age of retirement beyond 58 years-Held, State Act is a special Act and would
prevail over the provisions of the Regulations framed under the general law
unless it is excluded by notification-Electricity (supply) Act, 1948-Section
79(c)-Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961-
&~w 2 m. G
Maxims and Phrases-Generalia specialibus non derogant-Applicability
of

Labour Law-Retirement-Age of-Agreement-Expiry of-Effect of-
105 H
106 SUPREME COURT REPORTS [2004] 3 S.C.R.

A Agreement between parties enhancing age of retirement to 60 years-
Regulations providing for retirement age of 58 Years-Agreement expiring on
a particular date-Notification issued after expiry of agreement making the
age of retirement as 58 years-Held, notification cannot be faulted with-
Agreement is not law-Electricity (Supply) Act, 1948-Section 79(c)-Madhya
B Pradesh Industrial Employment (Standing Orders) Rules, 1963-Standing
Order 14A-Nature of

labour law-Age ofretirement-Alteration in-Permissibility of-Held,
alteration of retirement age is a matter of executive policy-Permissible for
sufficient and cogent reasons.
c In 1963, the respondent Board adopted Fundamental and
Supplementary Rules and other service conditions as in force in Civil
Services (Classification, Control and Appeal) Rules. In 1976, by a
notification issued under Section 79(c) of the Electricity (Supply) Act, the
respondent Board adopted Madhya Pradesh Shasakiya Sevak
D (Adhivarshiki Ayu) Sanshodhan Adhiniyam relating to the retirement age
of Government employee under Fundamental Rule 56(3) prescribing 58
years as the age of superannuation.

The State Legislature had enacted the Madhya Pradesh Industrial
Employment (Standing Orders) Act, 1961 for providing for matters
E relating to the conditions of employment. It received the assent of the
President in terms of Article 254(2) of the Constitution of India. Madhya
Pradesh Industrial Employment (Standing Orders) Rules, 1963 were
framed under the provisions of the said Act. Standing Order 14A appended
to the said Rules provided that an employee would retire from service on
F the date he attained the age of 58 years. However, proviso to the said
standing Order stated that nothing therein would adversely affect the
operation of terms of any contract, agreement, settlement or award on
the said subject. Section 2(2) of the Madhya Pradesh Industrial
Employment (Standing Orders) Act, 1961 provided that the provisions of
the Act would not be applicable to an undertaking in respect of which
G Fundamental and Supplementary Rules, Civil Services (Classification,
Control and Appeal) Rules or any other rules or regulations that may be
notified by the State Government in the official Gazette apply. No
notification was issued by State Government under Section 2(2) of the
Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961.

H On 10.6.1996, the appellant and the respondent Electricity Board
M.P. VIDYUT KARAMCHARI SANGH 1• M P ELECTRICITY BOARD ] 07

entered into an agreement whereby it was agreed that, amongst other A
benefits, the age of superannuation of the employees of the Board was to
be regulated as per the report of the Fifth Pay Commission after its
adoption by the Central Government. The said agreement was to expire
on 31.3.1999. The agreement was registered under the provisions of Section
33 of the Madhya Pradesh Industrial Act, 1960. Section 99 of the Madhya B
Pradesh Industrial Relations Act, however, provided that the agreement
would cease to have effect, inter alia, on the date specified in the agreement.

The Central Government adopted the report of the Fifth Pay
Commission and raised the retirement age of the Government servant to
60 years. Subsequently, the respondent Board also enhanced the age of C
retirement of its employees to 60 years with effect from 13.5.1998 by a
notification dated 22.5.1998.

Subsequently, however, by another notification dated 26.12.2000
issued in exercise of power under Section 79(c) of the Electricity (Supply)
Act, the Board reduced the age of superannuation of its employees to 58 D
years.

The appellant challenged the said notification dated 26.12.2000 by
way of a writ petition before the High Court. The High Court dismissed
the writ petition. Letters Patent Appeal was filed by the appellant, which
was dismissed by the Division Bench. E
The appellant filed appeal before the Court. The appellant
contended, inter alia, that the regulations made under the Electricity
(Supply) Act being a general law and the terms and conditions laid down
under the Standing Order being a special law, the latter should prevail F
over the former. It was further contended that having received assent from
the President, the Standing Order issued under Madhya Pradesh Industrial
Employment (Standing Orders) Rules, 1963 (law made by the State
Legislature) would prevail over the Regulations framed under the
Electricity (Supply) Act (law made by the Parliament) in view of provisions
of Article 254 (2) of the Constitution of India. G
Dismissing the appeal, the Court

HELD: 1.1. It is no doubt true that the entire field relating to
'electricity' is covered under Entry 38 of List Ill of the Seventh Schedule
to the Constitution .of India pursuant whereto the Indian Electricity Act, H
108 SUPREME COURT REPORTS 12004] 3 S.C.R.

A 1948 and Electricity (Supply) Act, 1948 were enacted but thereby the
State's legislative competence to exercise its legislative power under Entries
22, 23 and 24 of List Ill of the Seventh Schedule to the Constitution of
India was not taken away. Section 79(c) of the Electricity (Supply) Act
provides for an incidental power upon the respondent Board. The same
B would, therefore, not prevail over the specific legislative competence
granted to the State Legislature to regulate the conditions of service
between an industrial undertaking and its employees nor thereby the State
would be denuded of its legislative power relating to regulation of the
industrial relations. [120-B-D[

C 1.2. Furthermore, both the Parliament and the State Legislature,
within their own respective legislative competence, may make legislations
covering more than one entries in the three Lists contained in the Seventh
Schedule of the Constitution of India. Article 254 of the Constitution of
India would be attracted only when legislations covering the same ground
both by Centre and by the Province operate in the field; both of them being
C competent to enact. [120-D-E[

Deep Chand v. State of Uttar Pradesh and Ors., AIR (1959) SC 648;
M. Karunanidhi v. Union of India, AIR (1979) SC 898 and The State of West
Bengal v. Kesoram Industries Ltd and Ors., (2004) 1 SCALE 425, referred
to.
E
1.3. Once it is held that the law made by the Parliament and the State
Legislature occupy the same field, the subsequent legislation made by the
State which had received the assent of the President of India indisputably
would prevail over Parliamentary Act when there exists direct conflict
F betwee11 two enactments. Both the laws would ordinarily be allowed to
have their play in their own respective fields. However, in the event, there
does not exist any conflict, the Parliamentary Act or the State Act shall
prevail over the other depending upon the facts as to whether the assent
of the President has been obtained therefor or not. [120-G-H; 121-A)

G Bharat Hydro Power Corp. Ltd and Ors. v. State of Assam and Anr.,
(2004) I SCALE 211, referred to.

1.4. Since the State Government has the exclusive power to enact a
law regulating industrial relating and resolution of labour disputes, the
same shall prevail over the regulations framed by the respondent Board
H in exercise of its power under Section 79( c) of the Electricity (Supply) Act,
MP VIDYUT KARAMCHARI SANGH 1·. M I' ELECTRICITY BOARD 109
1948. 1121-A-BI A
Christian Medical College Hospital Employees' Union and Anr. v.
Christian Medical College Ve/lore Association and Ors., 119871 4 SCC 691
referred to.

2.1. As the respondent Board was in existence in 1961, the provisions B
of the Madhya Pradesh Industrial Employment (Standing Orders) Act,
1961 shall apply to the undertakings of the respondent Board. For
excluding the operation of the Madhya Pradesh Industrial Employment
(Standing Orders) Act, 1961 it. is imperative that an appropriate
notification in terms of Section 2 (2) of the said Act is issued. 1121-D-E)
c
2.2. The respondent Board adopted Fundamental and Supplementary
Rules which per se were not applicable to the employees of their
undertaking. The provisions of Fundamental and Supplementary Rules
. to the extent it was made applicable, having regard to the provisions
contained in Section 79(c) of the Electricity (Supply) Act would, thus, be D
deemed to be the regulations governing the terms and conditions of the
employees of the respondent Board. The requisite notification under
I- Section 2(2) of the Madhya Pradesh Industrial Employment (Standing
Orders) Act, 1961 was, thus, required to be issued by the State
Government. It is not in dispute that the State Government has not issued
any notification in terms of Sections 2 (2) of the Madhya Pradesh E
Industrial Employment (Standing Orders) Act, 1961 and in that view of
the matter the provision of the Madhya Pradesh Industrial Employment
(Standing Orders) Act, 1961 ,shall apply to the employees of the State.
1121-F-H)

2.3. The Madhya Pradesh Industrial Employment (Standing Orders) F
Act, 1961 is a special law whereas the regulation framed by the Board
under Section 79(c) of the Electricity (Supply) Act are general provisions.
The Maxim 'generalia specialibus non derogant' would, thus, be applicable
in the case.
G
D.R. Yadav and Anr. v. R.K. Singh and Anr., [2003) 7 SCC 110, Indian
Handicrafts Emporium and Ors. v. Union of India and Ors., [2003] 7 SCC
589; The U.P. Electricity Board and Anr. v. Hari Shankar Jain and Ors.,
~ 11978) 4 SCC 16 and U.P. State Electricity Board and Anr. v. Labour Court
(/) U.P. Kanpur and Anr., )1984] l SCC 147, referred to.
H
{
\
110 SUPREME COURT REPORTS 12004] 3 S.C.R.

A 3. I. The agreement dated I 0.6.1996, keeping in view the proviso
)!"
appended to Standing Order 14 A and having been registered under
Section 33 of the Madhya Pradesh Industrial Relations Act, 1960 will
operate in the field of age of superannuation of the employees of the
respondent Board. 1122-G-H; 123-AI

B 3.2. The proviso appended to Standing Order 14 A of the 1963 Rules
would operate provided there exists a valid agreement. It is, however, not
in dispute that the agreement dated I0.6.1996 expired on 31.3.1999 By
reason of Section 99 of the Madhya Pradesh Industrial Relations Act, 1960,
therefore, the settlement comes to an end automatically on the date

c specified therefor. 1124-D-E; 123-E-F;H; 124-AI

South Indian Bank Ltd. v. A.R. Chacko, 119641 5 SCR 625, life
Insurance Corpora/ion and Ors. v. D.J. Bahadur, (19811 I SCC 315 and
Karna/aka S!ale Road Transport Corpora/ion v. KSRTC Slaff and Workers'
Federation and Anr., 11999] 2 SCC 687, distinguished.
D
3.3. The respondent Electricity Board had issued the notification
dated 22.5.1998 whereby and whereunder it had given a seal of approval
to the agreement dated 10.6.1996, which was to continue to operate in view -\:
of the agreement, until the same is replaced by another valid notification.
The Electricity Board has issued such a notification on 26.12.2000 in ·
E exercise of its statutory power under Section 79 (c) of the Electricity
(Supply) Act. It is not in dispute that the impugned notification dated
26.12.2000 has been issued by the Electricity Board in exercise of its power
under Section 79(c) of Electricity (Supply) Act. Section 79 (c) of the
Electricity (Supply) Act empowers the Electricity Board to make
regulations, inter a/ia, as regards the duties of officers and other employees
F
of the Electricity Board, and their salaries, allowances and other conditions
of service. The respondent Board, therefore, was empowered to make .l_
regulations which are not inconsistent with the provisions of the Act and
the Rules providing for the duties of the officers, their salaries, allowances
and other conditions of service. The power of the Electricity Board,
G therefore, to lay down the conditions of service of its employees either in
terms of regulation or otherwise would by subject only to any valid law
to the contrary operating in the field. The terms and conditions laid down
in the Standing Order may have the force of law but they by themselves
do not constitute statutory provisions. Agreement within the meaning of
provisio appended to Standing Order 14 A is not a law and, thus, the
H
M P VIDYUT KARA MC HAR I SANGH v. M P ELECTRICITY BOARD [SINHA, J] 111

regulation made by the respondent Board shall prevail thereover. A
1124-G-H; 125-A-El

Rajasthan State Road Transport Co1poration and Anr. v. Krishna Kant
and Ors., !19951 5 SCC 75, referred to.

4. Alterations in the age of retirement by the employer is a matter B
of executive policy and for sufficient and cogent reasons, the same is
permiss_ible. The High Court has rightly dismissed the writ petition filed
by the appellant. [l25-F-GI

K Nagaraj and Ors. v. State of Andhra Pradesh and Anr., J198511 SCC
523; Osmania University v. VS Muthurangam and Ors., 11997110 SCC 741; C
N Lakshmana Rao and Ors. v. State of Karnataka and Ors., 11976] 2 SCC
502 and Chandra Singh v. State of Rajasthan, 120031 6 SCC 545, referred
to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2510 of2002. D
From the Judgment and Order dated 11.9.200 I of the Madhya Pradesh
High Court in L. P.A. No. 34 of 200 I.

Dr. Rajeev Dhawan, Rohit Arya and Prakash Shrivastava, for P.P. Singh
for the Appellant.
E
P.P. Rao, S.K. Agnihotri, Anil K. Pandey and Ms. Mahalakshmi for the
Respondent.

The Judgment of the Court was delivered by

S.B. SINHA, J. Introduction :
F
Whether an agreement despite expiry would prevail over a regulation
made under Section 79(c) of the Electricity (Supply) Act, 1948 (for short 'the
Act') as regard the age of superannuation of an employee of the Respondent-
Board is the primal question involved in this appeal which arises out of a
judgment and order dated 11.9.2001 passed by the High Court of Judicature G
of Madhya Pradesh at Jabalpur in L.P.A. No. 34 of 200 I.

FACTUAL BACKGROUND:

The appellant is a registered Union of the employees of the Madhya
Pradesh State Electricity. Board (for short 'the Board'). The erstwhile H
Electricity Board framed regulations in the year 1952 under Section 79( c) of
112 SUPREME COURT REPORTS [2004] 3 S.C.R.

A the Act known as General Service Conditions of Board Servants. In the year
1957, the respondent-Board came into existence on re-organisation of the
State.

The State of Madhya Pradesh enacted the Madhya Pradesh Industrial
Relations Act, 1960 (for short 'the 1960 Act') with a view to regulate the
B relations of employers and employees in certain matters, to make provisions
for settlement of industrial disputes and to provide for matters connected
therewith. In the year 1961, the State of Madhya Pradesh also enacted
Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961 (for
short 'the 1961 Act') to provide for rules defining with sufficient precision -
C of certain matters relating to the conditions of employment of employees in
the State of Madhya Pradesh. The Schedule appended to the 1961 Act provided
for the standard standing orders and item No. XV thereof relates to 'age of
retirement'.

On or about 19.10.1963, the Board purported to have adopted
D fundamental rules, supplementary rules and other service conditions as in
force in Madhya Pradesh Civil Services (Temporary Service) Rules, Civil
Services (Classification, Control and Appeal) Rules. The said rules, however,
had no application as regard work-charged employees. On or about 16.9.1976
by a notification issued under Section 79(c} of the Act, the Board adopted .\
Madhya Pradesh Shasakiya Sevak (Adhivarshiki Ayu) Sanshodhan Adhiniyam,
E 1972 relating to the retirement age of government employees under FR 56(3)
prescribing 58 years as the age of superannuation. It is not in dispute that
the parties hereto entered into an agreement on or about 10.6.1996 whereby
and whereunder the age of superannuation of the employees was made at par
with the employees of the Central Government as other fringe benefits were
F to be the same as might be accepted by the Central Government while
enforcing the Report of the Fifth Pay Commission. The Central Government
while accepting the recommendations of the Fifth Pay Commission fixed 60
years as the age of superannuation of its employees. In the said agreement, .
. it was stipulated :

G "(S) It has been further agreed that the following fringe benefits
shall be regulated as per Vth Pay Commission Report after its
adoption by Central Government.

***
9. Age of retirement."
H
MP VIDYUT KARAMCHARI SANGH v. M.P. ELECTRICITY BOARD [SINHA, l.J J J3

The said agreement was registered in terms of Section 33 of the 1960 A
Act. The Board Thereafter issued a notification dated 22.5. 1998 adopting the
notification issued by the Central Government dated 13.5.1998 as a result
whereof the age of retirement of the officers and employees of the respondent
Board was enhanced to .60 years. The said order came into force with effect
from 13.5.1998. By reason of the impugned notification dated 26.12.2000, B
the Board reduced the age of superannuation of its employees, except class
IV employees, to 58 years. Questioning the said notification, the appellant

- herein filed a writ petition before the High Court of Judicature of Madhya
Pradesh at Jabalpur which was marked as Writ Petition No. 7255 of 2000.
The said writ petition was dismissed by a learned Single Judge of the High
Court where against the appellant herein preferred a Letters Patent Appeal C
marked as Letters Patent Appeal No. 34 of2001. By reason of the impugned
judgment dated 11.9.2001, the Division Bench dismissed the said appeal.

HIGH COURT JUDGMENT:

The Division Bench of the High Coutt in its judgment held: D
(i) As notification was not published under Section 2(2) of the 1961
'/ Act by the State Government in the official gazette, the Act
would apply to the parties to the /is. However, as the said
notification has been published on 26.12.2000, it became a part
of the Board's regulations and as such the conditions of service E
of the employees of the Board would be governed thereby.

(ii) Standing Order 14-A was brought into animation i'n the year
1973 but the amendment was brought into existence after a period
of 8 years i.e. in the year 1981. The intention is writ large that
proviso carves out an exception to enable the employer granting F
freedom, independence and liberty to enter into an agreement/
settlement to confer more benefit to an employee which is in
tune with the Industrial Law.

(iii) As the Board is empowered to make regulation in exercise of
its power under Section 79( c) of the Act, it is also entitled to G
issue administrative instructions in absence of the regulation
holding the field. As after 1984 the Board could not have passed
any administrative order without amending the regulation and
having regard to the fact that the relevant notifications were not
published in the official gazettee, they would be non est in law.
As by reason of the notification dated 14.7.2000, the Board had H
114 SUPREME COURT REPORTS [2004] 3 S.C.R.

A adopted the regulations made in the year 1963, subsequent
amendments which had taken place in the regulations and
supplementary rules increasing the age of superannuation to 60
years will have no effect. The submissions of the appellant to
the effect that the settlement/ agreement should be construed
with reference to a letter dated 22.10.1999 issued by the Secretary
B of the Board to the Federation being unpragmatic cannot be
accepkd.
SUBMISSIONS:

Dr. Rajeev Dhawan, learned senior counsel appearing on behalf of the
C appellant would submit that the High Court went wrong in passing the
impugned judgment insofar as it failed to take into consideration that the
regulations made under the Electricity (Supply) Act being a general law and
the terms and conditions laid down under the Certified Standing Order being
a special law, the latter shall prevail over the former. Strong reliance in this
D behalf has been placed on The UP. State Electricity Board and Anr. v. Hari
Shankar Jain and Ors., [ 1978] 4 SCC 16.

The learned counsel would contend that a manifest error has been
committed by the Division Bench of the High Court insofar as it despite
having held that a notification issued by the State of Madhya Pradesh was
E necessary to exclude the application of the Standing Order in terms of Section
2(2) of the 1961 Act, relying on or on the basis of the notification issued by
the respondent Board although the same was issued by the Board only and
not by the State Government under Section 2(2) of the 1961 Act.

Dr. Dhawan would submit that the regulations framed by the Board in
F the year 1976 applying the fundamental and supplementary rules could not
have excluded the application of the Standing Order as the same had been
published in the official Gazette by the Board in the year 2000 only and that
too by the Board and not by the State Government.

Section 79(c) of the Act, Dr. Dhawan would contend, is merely
G implemental in nature and do not have the character of substantive law and
in that view of the matter the settlement arrived at by the parties in terms of
Sections 31 and 33 of the Industrial Relations Act would prevail thereover.
Despite expiry of the said settlement, Dr. Dhawan would urge, the agreement
would continue to operate unless the same is terminated by a notice and in
that view of the matter no notification altering the terms and conditions of
H service could be validly issued in derogation of the terms of the said agreement
~··
MP VlDYUT KARAMCHARI SANGH v. MP ELECTRICITY BOARD [SINHA, J] 115

having regard to the provisions contained in Standing Order l 4A of the A
Rules.

Mr. 'P.P. Rao, learned senior counsel appearing on behalf of the
respondent, on the other hand, would subl)lit that the decision of this Court
in Hari Shankar Jain (supra) cannot be said to have laid down good law
inasmuch as therein it had not been considered that the Electricity (Supply) B
Act, 1948 is a law relatable to Entry 38 of List III of Constitution of India;
and the 1960 Act and the 1961 Act having been made in terms of Entries 22,
23 and 24 of List Ill, Article 254 (2) of the Constitution of India would not
have any application and in that view of the matter the agreement dated
I 0.6.1960 cannot override the statutory power conferred upon the Board C
under Section 79 (c) of the Act in terms whereof the Board can make
regulations laying down duties of its officers and other employees and fixing
their salaries, allowances and other conditions of service.

For enforcing the 1963 Regulations, Mr. Rao would urge, there was no
statutory requirement to notify the same in the gazette as prior to 15.3.1984, D
there did not exist any such statutory requirement. It was urged that as the
Board by a notification dated 19.10.1963 adopted fundamental rules for its
employees except those in work-charged establishments and further adopted
M.P. Act No.9 of 1976 by a notification dated 16.9.1976, in terms whereof
the age of retirement was prescribed at 58 years for all classes of employees
except Class IV employees in terms of FR 56 and 60 years for Class IV E
employees. In any event, Mr. Rao would submit, as the agreement/ settlement
expired on 31.3.1999, the impugned notification dated 26.12.2000 cannot be
faulted as the agreement by itself did not specify any age of retirement and,
thus, the employer had a right to reduce the age of retirement which became
necessary due to financial conditions of the Board.
F
Mr. Rao would argue that the decisions of this Court interpreting Section
19(2) of the Industrial Disputes Act, 1947 cannot be applied to the industrial
settlements governed by the 1960 Act inasmuch in terms of Section 99 thereof
an agreement shall cease to have effect on the date specified therein and the
said act does not contain any provisions like Section 19(2) of the Industrial G
Disputes Act, 1947 in terms whereof an agreement is to continue to be
binding on the parties until the expiry of two months from the date of service
of notice terminating the said agreement.

ST ATUTORY PROVISIONS:

The relevant entries of List lil of Seventh Schedule of the Constitution H
116 SUPREME COURT REPORTS [2004] 3 S.CR.

A of India read thus:
"22. Trade unions; industrial and labour disputes.

23. Social security and social insurance; employment and
unemployment.

B 24. Welfare of labour including conditions of work, provident funds,
employers' liability, workmen's compensation, invalidity and old age
pensions and maternity benefits.

38. Electricity."

c Sections 33 and 99 of the 1960 Act are as under:

"33. Agreements (!) If in regard to a change proposed under
sub-section (1) or (2) of section 31, an agreement is arrived at,
a memorandum of such agreement shall be forwarded to the
Registrar.
D (2) On receipt of the memorandum of agreement signed by the
parties under sub-section (1 ), the Registrar shall register the
agreement if it is arrived at -
(a) within seven days from the service of a notice under sub-
section ( 1) or sub-section (2) of section 31, or with such
E further period as may he agreed upon by the parties; or

(b) ***
(c) within two months from the completion of conciliation
proceedings:
F Provided that the Registrar shall not register an agreement
which on enquiry he is satisfied is in contravention of the
provisions of this Act or was the resul: of mistake,
misrepresentation, fraud, undue influence, coercion or threat.
(3) An appeal shall lie to the Industrial Court against an order of the
G Registrar refusing to register an agreement under sub-section
(2). The provisions of section 22 shall apply to such appeal.
(4) An agreement registered under this section shall come into
operation on the date specified therein or if no date is so specified L
on its being recorded by the Registrar."
H
)-
M.P. VIDYUT KARAMCHARI SANGH v. M.P. ELECTRICITY BOARD [SINHA, J.] ] J7

"99. Agreements etc., when to case to have effect:- A
(I) A registered agreement or a settlement or award shall cease
to have effect on the date specified therein or if no such date is
specified therein on the expiry of the period of two months from
the date on which notice in writing to terminate such agreement,
settlement or award, as the case may be, is g;ven in the prescribed B
manner by any of the parties thereto to the other parties:

Provided that no such notice shall bi: given till the expiry
~-
of six months after the agreement, settlement or award comes
into operation.

(2) Nothing in this section shall prevent the terms of a registered c
agreement or a settlement or an award in terms of an agreement
being changed or modified by mutual consent of the parties
affected thereby and the registered agreement, settlement or award
shall be deemed to be changed or modified accordingly.

(3) *** D
(4) The party giving notice under sub-section [!] shall send a
..., copy of it to the Register and the Labour Officer of the local area
concerned.
(5) If a registered agreement or a settlement or an award is
E
terminated under sub-section [I] or if the terms of a registered
agreement or a settlement or an award are changed or modified
by mutual consent, notice of such termination, change or
modification shall be given by the parties concerned to the
Registrar and the Labour Officer. The Registrar shall enter the
notice of such termination, change or modification in a register F
kept for the purpose."
).
Section 79 (c) of the Electricity (Supply) Act, 1948 reads as under:

"79. Power to make regulations-The Board may by notification
in the Official Gazette, make regulations not inconsistent with
G
this Act and the rules made thereunder to provide for all or any
of the following matters:-
(c) the duties of officers and other employees of the Board, and
their salaries, allowances and other conditions of service;"
Sub-Section (2) of Section 2 of the 1961 Act reads thus: H
118 SUPREME COURT REPORTS [2004] 3 S.C.R.

A "2(2) Nothing in this Act shall apply to the employees in an
undertaking to whom the Fundamental and Supplementary Rules,
Civil Services (Classification, Control and Appeal) Rules, Civil
Services (Temporary Service) Rules, Revised Leave Rules, Civil ·'
Service Regulations or any other rules or regulations that may be
notified in this behalf by the State Government in the official
B Gazette apply."

The relevant part of Standing Order I4A of the 1963 Rules reads as
under:

"14-A: Retirement: (I) An employee shall retire from the service
C of the employer on the date he attains the age of 58 years. He may,
however, be retained in service by the employer after the date of
attaining the age of 58 years if his services are necessary in the
interest of the undertaking but he shall not be retained in service after
the age of 60 years:

D Provided that nothing in this clause shall adversely affect the
operation of the terms of any contract, agreement, settlement, or award
on this subject, if the age of retirement is not less than 58 years."

Issues :

(i) Whether the regulations made under Section 79 (c) of the Act
E
would prevail over the Standing Order framed under the 1961
Act.

(ii) Whether regulation dated 19.10.1963 issued by the Board adopting
fundamental and supplementary rules for its employees except
those in work-charged establishment and published in gazette on
F 26.12.2000 the application of the 1961 Act by reason of Section
2(2) thereof stand excluded.

(iii) Whether the respondent Board acted illegally and without
jurisdiction in issuing the noti.fication dated 26.12.2000 reducing
the age of Class Ill employees to 58 years.
G
FINDINGS:

It is trite that India being a Union of State both the Parliament and the
State Legislature can frame laws having regard to their respective legislative
competence enumerated in the three Lists contained in the Seventh Schedule
H of the Constitution of India.
... MP VIDYUT KARAMCHARI SANGH v. MP ELECTRICITY BOARD [SINHA, Jl 119

Before analyzing the relevant provisions of the State Acts vis-a-vis 'the /.
Act', we may have an overview of the constitutional scheme. Articles 245
and 246 of the Constitution of India read with the Seventh Schedule and
Legislative Lists contained therein prescribe the extent of legislative
competence of Parliament and State Legislatures. Parliament has exclusive
power to make laws with respect of any of the matters enumerated in List I
in the Seventh Schedule. Similarly, State Legislatures have exclusive power B
to make laws in respect of any of the matters enumerated in List IL Parliament
and State Legislatures both have legislative power to make laws with respect
to any matter enumerated in List Ill, the Concurrent List.

The various entries in the three Lists are fields of legislation. They are C
designed to define and delimit the respective areas of legislative competence
of the Union and State Legislatures. Since legislative subjects cannot always
be divided into water tight compartments; some overlappings between List I,
II and III of the Seventh Schedule is inevitable.

Notwithstanding the fact that great care with which the various entries D
in the three lists have been framed; on some rare occasions it may be found
that one or the other field is not covered by these entries. The makers of our
Constitution have, in such a case, taken care by conferring power to legislate
on such residuary subjects upon the Union Parliament including taxation by
reason of A11icle 248 of the Constitution.
E
Doctrine of pith and substance, however, is taken recourse to when
examining the constitutionality of an Act with respect to competing legislative
competence of the Parliament and the State Legislature qua the subject matter.
Incidental entrenchment however is permissible:

As in a federal Constitution.division of legislative powers between the F
Central and Provincial Legislatures exists, controversies arise as regards
).
encroachment of one legislative power by the other particularly in cases
where both the Union as well as the State Legislation have the competence
to enact laws. Article 254 provides that if any provision of a law made by
the Legislature of a State is repugnant to any provision made by the Parliament
which Parliament is competent to enact, or to any provision of an existing G
law with respect to one of the matters enumerated in the Concurrent List then
subject to provisions of clause (2), the law made by the Parliament shall
prevail to the extent of the repugnancy required.

In terms of clause 2 of Article 254 of the Constitution of India where
a law made by the legislature of a State with respect to one of the matters H
120 SUPREME COURT REPORTS [2004] 3 S.C.R. ...
A enumerated in the Concurrent List contains any provisions repugnant to the ,>(
provisions of an earlier law made by the Parliament or an existing law with
respect to the matters, then the law so made by the Legislature of such State
shall, if it has been reserved for consideration of the President and has received
its assent, prevail in that State. It is not in dispute that the 1961 Act has
B received the assent of the President of India and, thus, would prevail over any
parliamentary law governing the same field.

It is no doubt true that the entire field relating to 'Electricity' is covered
under Entry 38 of List III pursuant whereto the Indian Electricity Act and
Electricity (Supply) Act, 1948 were enacted but thereby the State's legislative
C competence to exercise its legislative power under Entries 22, 23 and 24 was
not taken away. Section 79 (c) of the Electricity (Supply) Act provides for
an incidental power upon the Board. The same would, therefore, not prevail
over the specific legislative competence granted to the State to regulate the
conditions of service between an industrial undertaking and its employees
nor thereby the State Government would be denuded of its legislative power
I) relating to regulation of the industrial re.lations.

Furthermore, both the Parliament and the State within their own
respective legislative competence may make legislations covering more than
one entries in the three Lists contained in the Seventh Schedule of the
Constitution of India. Article 254 of the Constitution of India would be
E attracted only when legislations covering the same ground both by Centre
and by the Province operate in the field; both of them being competent to
enact.

See Deep Chand v. State of Uttar Pradesh and Ors., AIR (1959) SC
648; M Karunanidhi v. Union of India, AIR (1979) SC 898 and The State
F of West Bengal v. Kesoram Industries Ltd and Ors., (2004) I SCALE 425.

Recourse to the said principles, however, would be resorted to only
when there exists direct conflict between two provisions and not otherwise.
Once it is held that the law made by the Parliament and the State Legislature
occupy the same field, the subsequent legislation made by th.e State which
G had received the assent of the President of India indisputably would prevail
over the Parliamentary Act when there exists direct conflict between two
enactments. Both the laws would ordinarily be allowed to have their play in
their own respective fields. However, in the event, there does not exist any
conflict, the Parliamentary Act or the State Act shall prevail over the other
H depending upon the fact as to whether the assent of the President has been
M P VIDYUT KARAMCHARI SANGH v. M P ELECTRICITY BOARD [SINHA, l) J2 J

obtained therefor or not. (See. Bharat Hydro Power Corp. Ltd. and Ors. v. A
~· State of Assam and Anr., (2004) 1 SCALE 211.

Keeping in view of the fact that the State Government has the exclusive
power to enact a law regulating industrial relations and resolution of labour
disputes, as has been held by this Court in Christian Medical College Hospital
Employees' Union and Anr. v. Christian Medical College Ve/lore Association B
and Ors., [1987] 4 SCC 691, the same shall prevail over the regulations
framed by· the Board in exercise of its power under Section 79 (c).

This brings us to the. question as regard the effect of the 1961 Act. In
tenns of Section 2, the 1961 Act, applies to every undertaking wherein the
number of employees on any day during the twelve months preceding or on C
the day the said Act came into force or any day thereafter was or is more than
twenty and such other class or classes of undertakings as the State Government
may, from !L>ne to time, by notification, specify in this.behalf. The undertaking
of the Board indisputably was in existence in 1961. Per se, therefore, the
provisions of the 1961 Act shall apply to the undertakings of the Board. Sub- D
Section (2) of Section 2 of the 1961 Act makes an exception to the applicability
of the Act stating that nothing therein shall apply to the employees of an
undertaking to whom the Fundamental and Supplementary Rules, Civil
Services (Classification, Control and Appeal) Rules, Civil Services (Tempo
Service) Rules, Revised Leave Rules, Civil Service Regulations or any other
rules or regulations that may be notified in this behalf the State Government E
in the official gazette apply. For excluding the operation of the 1961 Act,
it is imperative that an appropriate notification in tenns of Section 2(2) of the
1961 Act is issued.

The Board adopted Fundamental and Supplementary Rules which per
se were not applicable to the employees of their undertaking. They were F
adopted by the Boan~. The provisions of Fundamental and Supplementary
Rules to the extent it was made applicable, having regard to the provisions
contained in Section 79 ( c) would, thus, be deemed to be the regulations
governing the tenns and conditions of the employees of the Board. The
requisite notification under Section 2(2) of the 1961 Act was, thus, required G
to be issued by the State Government.

It is not in dispute that the State Government has not issued any
notification in tenns of Section 2(2) of the 1961 Act and in that view of the
matter the provisions thereof shall apply to the employees of the State. The
1961 Act is a special law whereas the regulations framed by the Board under H
122 SUPREME COURT REPORTS (2004] 3 S.C.R.

A Section 79 (c) are general provisions. The maxim 'generalia specialibus non
derogant' would, thus, be applicable in this case. [See D.R. Yadav and Anr.
v. R.K. Singh and Anr., [2003] 7 SCC 110 and Indian Handicrafts Emporium
and Ors. v. Union of India and Ors., [2003] 7 SCC 589.
·'
The question need not detain us long in view of a 3-Judge Bench
B decision of this Court in Hari Shankar Jain (supra). This Court therein in
no uncertain terms held that the provisions of the Standing Order Act are
special laws in regard to the matters enumerated in the Schedule and, thus,
the regulations made by the Electricity Board with respect to any of those
matters are of no effect unless the regulations are either notified by the
C Government or certified by the certifying officer, holding :

"18 .... ln regard to matters in respect of which regulations made
by the Board have not been notified by the Governor or in respect
of which no regulations have been made by the Board, the
Industrial Employment (Standing Orders) Act shall continue to
apply. In the present case the regulation made by the Board with
D
regard to age of superannuation having been duly notified by the
Government, the regulation shall have effect notwithstanding the
fact that it is a matter which could be the subject matter of
Standing Orders under the Industrial Employment (Standing
Orders) Act..."
E See also U. P. State Electricity Board and Anr. v. Labour Court (I),
U.P., Kanpur and Anr., [1984] l SCC 147. We do n<it find any infirmity in
the said decisions of this Court and respectfully agree with the ratio laid
down therein.

This leads us to the question as to the applicability of the Standing
F
Order l 4A vis-a-vis the agreement/settlement entered into by and between
the parties dated I 0.6.1996. In terms of Standing Order I 4A of the 1963
Rules the age of superannuation was fixed at 58 years. The proviso appended
to Standing Order l 4A of the 1963 Rules, however, postulates that nothing
therein shall adversely affect the operation of the term of any agreement on
G the subject ifthe age of retirement is not less than 58 years. We have noticed
that Clause (S) (9) of the settlement refers to the age of retirement which was
registered in terms of Section 33 of the 1960 Act. The said agreement,
keeping in view of the proviso appended to Standing Order l 4A and having
been issued in compliance of the requirements of the Act will operate in the
H field. In terms of the said agreement the age of retirement was to be the same
MP VIDYUT KARAMCHARI SANGH v. M.P. ELECTRICITY BOARD [SINHA, J.] J23

as that of the employees of the Central Government on acceptance of the A
recommendations of the Fifth Pay Commission. The Central Government in
exercise of its power conferred by the proviso to Article 309 of the Constitution
and Clause (5) of Article 148 made rules known as Fundamental (Amendment)
Rules, 1998 in terms whereof Clause (a) was amended in the following
terms:
B
"(a) Except as otherwise provided in this rule, every Government
servant shall retire from service on the afternoon of the last day of the
month in which he attains the age of sixty years:

Provided that a Government servant whose date of birth is the
first of a month shall retire from service on the afternoon of the last C
day of preceding month on attaining the age of sixty years."

Having regard to the said agreement, indisputably the Board also
enhanced the age of retirement of its emp.loyees by a notification dated
22.5.1998 which reads thus:
D
"Sub: Enhancement in age of retirement.

In exercise of the powers conferred under clause (c) of section 79
of the Electricity (Supply) Act, 1948, the M.P. Electricity Board is
pleased to adopt the orders as contained in Government of India,
Ministry of Personnel, Public Grievances & Pensions (Department of E
Personnel & Training), notification No. 25012/2/97-Estt.(A) dated
13.8. 1998 (copy enclosed) for application to the Board' officers/
employee with effect from 13.5.1998."

It is, however, not in dispute that the agreement dated I 0.6.1996 expired
on 31.3.1999 as would appear from the following: F
"(W) The wage structure and fringe benefits shall be effective for a
period of 5 years upto 31.3.99 and no demand whatsoever shall be
made or considered in respect of the items already agreed to."

Section 99 of the 1960 Act, as referred to hereinbefore, postulates that
a registered agreement or a settlement or award shall cease to have effect on G
the date specified therein and only in the event no date is specified on the
expiry of two months from the date on which notice in writing to terminate
such agreement, settlement or award, as the case may be, is given in the
prescribed manner by any of the parties thereof to the other parties. By
reason of the said provision, therefore, the settlement comes to end H
124 SUPREME COURT REPORTS [2004] 3 S.C.R.

A automatically on the date specified therefor and only in the event no date of
expiry thereof is specified, a notice contemplated thereby is required to be
issued. The provisions of the 1960 Act shall apply to the undertakings of the
electricity, generation and distribution in terms of notification 31.12.1960
issued by the State.

B Section 19 of the Industrial Disputes Act, 1947, however, has been
couched in a different language in tenns whereof a settlement will be binding
as is agreed upon by the parties and shall continue to be binding despite
expiry thereof until the expiry of two months from the date on which a notice
in writing of an intention to terminate the settlement is given by one of the
C parties to the other party or parties to the settlement.

The decisions of this Court in South Indian Bank Ltd. v. A.R. Chacko,
[1964] 5 SCR 625, Life Insurance Corporation and Ors. v. D.J Bahadur,
[1981] 1 SCC 315 and Karnataka State Road Transport Corporation v.
KSRTC Staff and Workers' Federation and Anr., [1999 2 SCC 687, which
D have been rendered having regard to the phraseology used in Sub-Section (2)
of Section 2 of the 1961 Act will thus have no application to the fact of the
present case.

The proviso appended to Standing Order l 4A of the 1963 Rules would,
thus, operate provided there exists a valid agreement. Furthermore, the
E terms and conditions laid down in the certified order may have the force of
law but they by themselves do not constitute statutory provisions. See
Rajasthan State Road Transport Corporation and Anr. v. Krishna Kant and
Ors., [1995] 5 SCC 75.

Standing Order I 4A of the 1963 Rules prescribes the age of
F superannuation to 58 years. It can be enhanced upto the age of 60 years if
the services of the person are necessary in the interest of the undertaking but
he shall not be retained in service after the age of 60 years unless in tenns
of the proviso, there exists any agreement/settlement or award to the contrary.
The enhanced age of superannuation of members of the appellant Association
was, therefore, subject to any law that may operate in the field. The respondent
G Board, as noticed hereinbefore, issued the notification dated 22.5.1998 whereby
and whereunder it had given a seal of approval to the aforementioned
agreement, which was to continue to operate in view of the agreement, until
the same is replaced by another valid notification. The Board bas issued such
a notification on 26.12.2000 in exercise of its statutory power under Section
H 79(c) of 'the Act'.

-
M.P. VIDYUT KARAMCHARI SANGH 1·. M.P. ELECTRICITY BOARD [SINHA, J.] J 25

It is one thing to say that when there exists a conflict between a regulation A
made under Section 79(c) of the Act and a certified standing order or a rule
made under the 1961 Act, the latter shall prevail; but it is another thing to
say that in absence of any statutory provision governing the age of retirement,
the statutory regulations framed by the respondent Board shall ·have no
application. It is not in dispute that the impugned notification dated 26.12.2000 B
had been issued by the Board in exercise of its power under Section 79(c) of
Electricity Supply Act. Section 15 of the Act empowers the Board to appoint
a Secretary and such other officers as may be required to enable the Board
to carry out its functions. Section 79( c) empowers the Board to make
regulations inter alia as regar<l the duties of officers and other employees of
the Board, and their salaries, allowances and other conditions of service. The C
Board, therefore, was empowered to make regulations which are not
inconsistent with the provisions of the Act and the Rules providing for the
duties of officers, their salaries, allowances and other conditions of service.

The power of the Board, therefore, to lay down the conditions of service
of its employees either in terms of regulation or otherwise would be subject D
only to any valid law to the contrary operating in the field. Agreement
within the meaning of proviso appended to Standing Order 14A is not a law
and, thus, the regulations made by the Board shall prevail thereover.

The Board has power to make regulations which having regard to the
provisions of General Clauses Act would mean that they can make such E
regulations from time to time.

Alterations in the age of retirement by the employer is a matter of
executive policy and for sufficient and cogent reasons, the same is permissible.
See K. Nagaraj and Ors. v. State of Andhra Pradesh and Anr., [1985] 1 SCC
523, Osmania University v. Muthurangam and Ors., [1997] 10 SCC 741, N. F
Lakshm.ana Rao and Ors. v. State of Karnataka and Ors., [1976] 2 SCC 502
j. and Chandra Singh v. State of Rajasthan, [2003] 6 SCC 545.

We, therefore, are of the opinion that the High Court has rightly
dismissed the writ petition filed by the appellant.
G
For the reasons aforementioned, we are of the opinion that there is no
merit in this appeal, which is accordingly dismissed. No. costs.

B.K.M. Appeal dismissed.