Holding

An award under the Industrial Disputes Act that is inconsistent with a statutory provision governing service conditions is illegal and cannot be enforced.

Summary

N.S. Giri, an Assistant Health Officer of Mangalore City Municipality, was governed by Rule 48 of the Karnataka Municipalities (Conditions of Service) Rules, 1972 which fixed the superannuation age at 55 years. An industrial dispute concerning whether the retirement age should be raised to 58 years was referred to arbitration under Section 10-A of the Industrial Disputes Act, 1947, and the arbitrator awarded a retirement age of 58 years. The Municipal Corporation later ordered Giri to retire at 55, prompting a writ petition that was initially allowed but subsequently set aside by the Karnataka High Court on the ground that the award conflicted with the statutory service rules. Giri appealed to the Supreme Court, raising the question of whether an award under the Industrial Disputes Act can be enforced when it is inconsistent with a legislative provision governing service conditions. The Court held that an award that contradicts a statutory provision is illegal and cannot be enforced, relying on earlier precedents that an industrial award must not override legislative mandates. Consequently, the appeal was dismissed, confirming that Giri must retire at the age prescribed by the service rules.

Issues considered

Can an award made under Section 10-A of the Industrial Disputes Act, 1947 be given effect when it is inconsistent with statutory service rules prescribing the age of superannuation?

Legislation cited

Constitution of Indias. 141
Industrial Disputes Act, 1947s. 10-A

Subjects

arbitration awardsuperannuation ageIndustrial Disputes Actstatutory service rulesinconsistencyenforceabilityKarnataka Municipalities RulesprecedentConstitution Bench

Judgment

N.S. GIRI A
v.
CORPORATION OF CITY OF MAN GALORE & ORS.

MAY 14, 1999

[SUJATA V. MANOHAR, D.P. MOHAPATRA B
AND R.C. LAHOTI, JJ.]
Labour Law:

Industrial Disputes Act, 1947 : Section 10-A.

Arbitration award-Dispute-Regarding-Age of superannuation-
c
Referred to arbitration-Statutory service rules prescribed 55 years as age
of superannuation-However, arbitrator gave award enhancing age of
superannuation to 58 years-Validity of-Held, Arbitration award inconsistent
with the statutory provision or law laid down by the Legislature or by the
Supreme Court is illegal and cannot be enforced-Karnataka Municipalities D
(Conditions of Service of Officers and Servants) Rules, 1972, R. 48-Madras
District Municipalities Act, 1920 (renamed as the Tamil Nadu District
Municipalities Act, 1920)-Karnataka Municipal Corporation Act, 1976,
SS. 3 and 503(3)(k).

Constitution of India, 1950 : Article 141. E

-· Precedents-Binding effect of-Held, A decision by the Constitution
Bench and a ·decision by a Bench of more strength cannot be overlooked to
treat a latter decision by a Bench of lesser strength as of a binding authority;
more so, when attention of the Judges deciding the latter case was not F
invited· to earlier decisions available.

The appellant was an Assistant health Officer with the respondent-
Corporation. An industrial dispute regarding the age of superannuation of
the workmen of the respondent-Corporation was referred to arbitration under
Section 10-A of the Industrial Disputes Act, 1947. The age of superannuation G
was prescribed as 55 years under Rule 48 of the Karnataka Municipalities
(Conditions of Service of Officers and Servants) Rules, 1972. The appellant
was governed by this Rule. However, the arbitrator gave an award enhancing
the age of superannuation to 58 years.

The respondent-Corporation ordered the appellant to retire in view of H
771
·x
772 SUPREME COURT REPORTS [1999] 3 S.C.R.

A his having attained the age of 55 years. The appellan&iled a writ petition
challenging the aforesaid order, which was allowed by a Single Judge on the
ground that the award, was binding between the parties. But the Division
Bench dismissed the appeal on the ground that the award could not be given
effect to as it was inconsistent with the statutory provisions governing the
service conditions of the appellant, including the age of superannuation.
B Hence its appeal.

Dismissing the appeal, this Court

HELD : 1. Rule 48 of the karnataka Municipalities (Conditions of
C Service of Officers and Servants) Act, 1972, which governed the employees
such as the appellant, prescribed 55 years as the age of superannuation.
Therefore, an award under the Industrial Disputes Act cannot be inconsistent
with the statutory provisions or the law laid down by the Legislature or by
this Court and if it does so, it is illegal and cannot be enforced.
[774-D-E; 775-F]
,D
New Maneck Chowk spinning and Weaving Co. Ltd. v. Textile Labour
Association, [1961) 3 SCR 1; Hindustan Times Ltd. v. Workmen, AIR (1963)
SC 1332 and State Bank of India v. Workmen, followed.

Marina Hotel v. Workmen, [1962) 3 SCR 1; Dalmia Cement (Bharat)
E Ltd v. Workmen, AIR (1960) SC 413; Dalmia Cement (Bhar(;zt) Ltd v. Workmen
AIR, (1967) SC 209 and Workmen v. Hercules Insurance Co. Ltd., (1961) LLJ
249, relied on.

LIC of India v. D.J. Bhadur, AIR (1980) SC 2181, held inapplicable.

F LIC of India v. SunilKumar Mukherjee, [1964) 5 SCR and Sukhdev
Singh v. Bhagat Ram, [1975) 3 SCR, cited.

2. A decision by the Constitution Bench arid a decision by a Bench of
more strength cannot be overlooked to treat a latter decision by a Bench of
lesser strength as of binding authority; more so, when the attention of the
G Judges deciding the latter case was not invited to the earlier decisions
available. [776-D)

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 771of1993.

From the Judgment and Order dated 11.1.90 of the Kamataka High Court
H in W.A. No. 1872of1989.
N.S. GJRJ v. CORPN. OF THE CITY OF MANGALORE [R.C. LAHOTI, J.] 773
S.R. Bhat for the Appellant. A
R.S. Hegde, K.R. Nagaraja, Kh. Nobin Singh and M.Veerappa for the
Respondents.

Th~ Judgment of the Court was delivered by
B
R.C. LAHOTI, J. The facts relevant for the purpose of deciding this
appeal are undisputed and are briefly set out hereafter. N.S. Giri, the appellant
joined the services of erstwhile Mangalore Municipality as a Heal!h Assistant
in the year 1950. He was promoted as Sanitary Illspector in the year 1962 and
..,.. as a Selection Grade Sanitary_Inspector with effect from 1.6.1967. The post has
been re-designated as Assistant Health Officer. The Mangalore City C
Municipality was constituted under the then Madras District Municipalities
Act, 1920 (renamed in the year 1969 as The Tamil Nadu District Municipalities
Act, 1920).

. In the year 1968, an industrial dispute ~etween the workmen and the
management of Marigalore City Municipality was referred to a sole arbitrator D
under Sedion I OA of Industrial Disputes Act, 1947. The dispute referred to
was : whether the age of superannuation of 55 years of the employees of
Mangalore City Municipality including those whose services were extended
· or of those who were re-employed after the age of 50 years should be fixed
at 58 years. The arbitrator gave an award on 11.1.1969 (published in the E
Mysore Gazette dated 13.2.1969) enhancing the age of retirement of the
workmen belonging to the 'superior service' from 55 years to completion of
58 years of age including those whose services were extended or who were
re- employed aftet the age of 55 years. The admitted case of both the parties
as noted in the award itself has been that the workmen (including the appellant)
· whose dispute was before the arbitrator were classified as superior servants F
and under the statutory service rtiles as then applicable the age of
superannuation was 55 years. However, the arbitrator had thought it fair to
fix the age of superannuation· at 58 years. Consistently with such opinion
formed by the arbitrator the award was given.

On 31.12.1980 the appellant received a communication from the Karnataka
G

-- Municipal Corporation, informing the appellant that he was to retire with
effect from 31.12.1980 (afternoon) in view of his having attained the age of
superannuation, i.e., 55 years. On 17.1.1981, the appellant filed a writ petition
which was allowed by the learned Single Judge quashing the order of retirement
forming an opinion that the award was binding between the parties. The H
774 SUPREME COURT REPORTS [1999] 3 S.C.R.

A Municipal Corporation preferred an appeal before the Division Bench of
Kamataka High Court which has been allowed reversing the judgment of the
learned Single Judge. The Division Bench has formed an opinion that the
award to the extent to which it was inconsistent with the statutory provisions
governing the service conditions of the appellant, including the age of
B retirement could not be given effect to. The aggrieved appellant has filed this
appeal by special leave.

As noted by the Division Bench in its judgment it has been the admitted

-
case of the parties also before 'the High Court that Mangalore City Municipality
was constituted under the provisions of the then Madras District Municipalities
C Act under which rules were framed which provided for the retirement of
persons in superior service such as the appellant, at the age of 55 years. The
Kamataka Municipality Act, 1964 came into force w.e.f. 1st April, 1965. The
Mangalore City Municipality was deemed to have been constituted under the
Karnataka Act. Then came into force the Karnataka Municipal Corporation
Act, 1976. In exercise of powers conferred by Section 3 thereof, Mangalore
D City was declared a Corporation and all the employees of the erstwhile
Municipality were deemed to be in service of the Municipal Corporation. Rule
48 of the Karnataka Municipalities (Conditions of Service of Officers and
Servants) Rules, 1972 which governed the employees such as the appellant,
also prescribed for the age of superannuation being 55 years. In spite of the
E fonnation of the Corporation, by virtue of clause (k) of sub-section (3) of
Section 503 of the Kamataka Municipal Corporation Act, 1976 the employees
of Karnataka. Municipality continued to be governed by the same service
rules by which they were being governed before and thus their service
conditions remained the same.

F The short question arising for decision in this appeal is whether an
award made under Section lOA of the Industrial Disputes Act~ 1947 can be
given effect to if it be inconsistent with the statutory provisions governing
the service conditions of the employees.

In The New Maneck Chowk Spinning and Weaving Co. Ltd.,
G Ahmedabad & Ors. v. The Textile Labour Association, Ahmedabad, [1961] 3
SCR 1, the Constitution Bench has held :-

"It is open to an industrial court in an appropriate case to impose new
obligations on the parties before it or modify contracts in the interest
of industrial peace or give awards which may have the effect of
H extending Agreement or making new one, but this power is conditioned
N.S. GIRi v. CORPN. OF THE CITY OF MANGALORE [R.C. LAHOTI, J.] 775
by the subject matter with which it is dealing and also by the existing A
industrial law and it would not be open to it while dealing with a
particular matter before it to overlook the industrial law relating to that
matter as laid down by the legislature or by the Supreme Court."

In The Management of Marina Hotel v. The Workmen, [ 1962] 3 SCR 1,
the award of the Industrial Tribunal holding entitlement to 15 day.; casual- B
cum-sickness leave *was held to be illegal being contrary to the provisions
of Section 22 of Delhi Shops and Establishments Act; 1954 which contained
a peremptory direction of the Legislature for leave not exceeding 12'tlays onG
being allowed. The decision in Mis Dalmia Cement (Bharat) Ltd. v. Their
Workers represented by the Dalmia Cement Workers Union, Dalmiapuram, C
AIR (1960) SC 413, which is to the same effect, was followed. So the view
taken by this Court in Mis Dalmia Cement (Bharat) Ltd., New Delhi v. Their
Workmen and Anr., AIR (1967) SC 209. ·
.
In Hindustan Times ltd., New Delhi v. Their Workmen, AIR (1963) SC
1332 also the Industrial Tribunal fixing the period of sick leave at 15 days and D
permitting accumulation contrary. to the provisions of the Delhi Shops and
Establishments Act, 1954 was heJd to have acted illegally.

The Cons.titution Bench in State Bank of India & Ors. v. Their Workmen,
(1959) (II) LLJ 205 and three-Judges Bench in Workmen of Hercules Insurance
Co. Ltd. v. Hercules Insurance Co. Ltd., Calcutta, (1961) (I) LLJ 249 have held E
that any reference by way of industrial dispute seeking award o.f bonus
beyond the limits prescribed by law was incompetent

It is thus clear that an award under the Industrial Disputes Act cannot
be inconsistent with the law laid down by the Legislature or by the Supreme F
Court and if it does so, it is illegal and cannot be enforced.

The learned counsel for the appellant heavily relied on the three-Judges
Bench decision in The Life Insurance Corporation of India v. D.J. Bahadur
and Ors., AIR(I980) SC 2181. Vide para 80, the majority view has been set
out as under :- G
"In my opinion, it is difficult to resist the conclusion that the Industrial
Disputes Act is a special law and must prevail over the Corporation
Act a general law, for the purpose of protecting the sanctity of
transactions concluded under the former enactment. It is true that as
laid down in Life Insurance Corporation of India v. Sunil Kumar H
776 SUPREME COURT REPORTS [1999] 3 S.C.R.

A Mukherjee, [1964] 5 SCR 528: AIR (1964) SC 847) and reiterated in
Sukhdev Singh v. Bhagat Ram, [1975] 3 SCR 619: AIR (1975) SC 1331,
the Regulations framed under the Corporation Act have the force of
law. But that is of little moment if no reference is permissible to the
=---·
Regulations when considering· the validity and operation of the
"settlement" contract. Accordingly; Regulation 58, a product of ~e
B Corporation Act, cannot supersede the contract respecting bonus
between the parties resulting from the settlement of 1974."

The above said decision does support the proposition canvassed by
the learned counsel for the appellant that an industrial settlement would
C operate even by overriding a statutory provision to the contrary. However,
suffice it to observe that the Constitution Bench decision in The New Maneck
Chowk Spinning and Weaving Co. Ltd., Ahmedabad & Ors. (supra) and also
the decision of this Court in Hindustan Times Ltd. (supra) which is four
Judges' Bench decision, were not placed before the learned Judges deciding
the LIC of India's case. A decision by the Constitution Bench and a· decision
D by a Bench of more strength cannot be overlooked to treat a later decision
by a Bench of lesser strength as of binding authority; more so, when the
attention of the Judges deciding the latter case was not invited to the earlier
decisions available. Respectfully following the earlier two decisions referred
to hereinabove, we are of the opinion that the award dated 11.1.1969 under
E Section lOA of the ID Act appointing the age of retirement at 58, contrary
to the provisions of the statutory rules appointing the age of retirement at
55, cannot be upheld and given effect to by issuing a writ for its implementation.
In any case, the award stood superseded by the subsequent statutory rules
of 1974 which too appointed the age of retirement at 55 and there is nothing
wrong in the appellant having been asked to superannuate at ·the age of 55
F consistently with the service rules as applicable on that day.

For the foregoing reasons, the appeal is held devoid of any merit. It is
dismissed accordingly though without any order as to costs.

V.S.S, Appeal dismissed.