PARADEEP PHOSPHATES LIMITEDversusSTATE OF ORISSA & ORS.

                        [2018] 3 S.C.R. 507                             507


              PARADEEP PHOSPHATES LIMITED                               A
                                 v.
                   STATE OF ORISSA & ORS.
                (Civil Appeal Nos. 3997-3998 of 2018)
                          APRIL 19, 2018                                B
  [R. K. AGRAWAL AND ABHAY MANOHAR SAPRE, JJ.]
       Industrial Disputes Act, 1947: s.9A – Change in conditions
of service – In 1998, due to financial crunch, Government decided
to enhance retirement age from 58 to 60 – Appellant-company
                                                                        C
implemented the said decision of government – However, since the
financial position of appellant-company did not improve, government
rolled back retirement age – Appellant-company restored the age of
retirement to 58 years – Industrial dispute – Industrial Tribunal
invalidated the action of appellant-company of rolling back the
age of retirement from 60 years to 58 years due to contravention of     D
r.9A which says prior notice must be given to employees by employer
which the employer intentionally omitted to give in the instant case
– High Court upheld the order of Industrial Tribunal – On appeal,
Held: s.9A is a provision in consonance with the Constitutional
mandate which assures the protection of principles of natural justice
                                                                        E
i.e., no one shall be condemned unless heard – s.9A provides that
before changing either of the things as envisaged in the Fourth
Schedule, prior notice must be given to the employee – Eighth clause
of the Fourth Schedule says “withdrawal of any customary
concession, privilege or change in usage” – The order of
enhancement of superannuation of the employees though temporary         F
in nature amounted to privilege to employees since it is a special
right granted to them – Therefore, any unilateral withdrawal of
such privilege amounts to contravention of s.9A of the Act and such
act of the employer is bad in the eyes of law – Right to work is a
vital right of every employee and it shall not be taken away without
                                                                        G
giving reasonable opportunity of being heard otherwise it would
be an act of violation of the constitutional mandate – There is no
error in the order of High Court – Service law.
      Industrial Disputes Act, 1947: Fourth Schedule, eighth
clause – Eighth clause of the Fourth Schedule says “withdrawal of
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                                507
508            SUPREME COURT REPORTS                       [2018] 3 S.C.R.


A     any customary concession or privilege or change in usage” – Terms
      “privilege” – Interpretation of – Held: The word “privilege” as
      such is not defined in the Act – The Dictionary meaning of the word
      “privilege” means a “special right, advantage or immunity granted
      or available only to a particular person or ground” – In other words,
      a particular and peculiar benefit or advantage enjoyed by a person,
B
      company, or class, beyond the common advantages of others – Order
      of enhancement of superannuation of the employees would amount
      to privilege to employees since it is a special right granted to them.
             Service law: Change in conditions of service – Enhancement
      of retirement age – Held: Age of superannuation is an integral part
C     of the service condition of the employee – Also, enhancement of
      superannuation age would impliedly amount to a privilege since it
      was provided particularly for the central public sector employees.
            Interpretation of statutes: Beneficent law – Liberal
      construction – Held: Beneficial laws should be construed liberally
D     – The Industrial Dispute Act, 1947 is one of the welfare legislations
      which intends to provide and protect the benefits of the employees
      – Therefore, it should be interpreted in a liberal and broad manner
      so that maximum benefits could reach to the employees – Industrial
      Dispute Act, 1947.
E           Words and phrases: Privilege – Meaning of.
            Dismissing the appeals, the Court
            HELD: 1. The Industrial Dispute Act, 1947 is one of the
      welfare legislations which intends to provide and protect the
F     benefits of the employees. Hence, it shall be interpreted in a
      liberal and broad manner so that maximum benefits could reach
      to the employees. Any attempt to do strict interpretation would
      undermine the intention of the legislature. [Para 11] [514-F]
            2. The grievance of the appellant-Company before this Court
      is that the increase in the superannuation age of the employees
G
      was temporary in nature in order to combat the losses and in no
      circumstances, it can be said that withdrawal of it amounts to
      withdrawal of customary concession or privilege or change in
      usage. Eighth clause of the Fourth Schedule says “withdrawal of
      any customary concession or privilege or change in usage”. The
H     whole dispute revolves around the interpretation of the terms
  PARADEEP PHOSPHATES LIMITED v. STATE OF ORISSA                       509
                    & ORS.

customary concession, privilege or change in usage. The word           A
“privilege” as such is not defined in the Act. In the absence of
statutory definition, recourse is taken of the dictionary or general
meaning of the term “privilege”. The Dictionary meaning of the
word privilege means a “special right, advantage or immunity
granted or available only to a particular person or ground”. In
                                                                       B
other words, a particular and peculiar benefit or advantage enjoyed
by a person, company, or class, beyond the common advantages
of others. [Para 12] [514-G-H; 515-A-B]
     3. Though the decision of enhancement of age of retirement
was implemented without the amendment in the Standing Orders
and Rules, yet impliedly it got the force as a service condition       C
since it directly relates with the service condition of the
employees. Age of superannuation is an integral part of the
service condition of the employee. Also, enhancement of
superannuation age would impliedly amount to a privilege since
it was provided particularly for the central public sector             D
employees. [Para 13] [515-D]
       4. No doubt, the enhancement of the superannuation age
was temporary in nature in order to achieve certain objectives
and also it is not deniable that yet employees would be governed
by the Service Rules and the Certified Standing Orders which           E
were not amended. However, if the plea of the appellant-Company
is allowed then it would defeat the object of legislature because
legislature could never have intended that employees would be
condemned without giving them right of reasonable hearing.
Naturally, every employee is under the expectation that before
reducing his superannuation age, he would be given a proper            F
chance to be heard. Right to work is a vital right of every employee
and it shall not be taken away without giving reasonable
opportunity of being heard otherwise it would be an act of violation
of the Constitutional mandate. The contention of the appellant-
Company that the object of enhancement of superannuation age           G
was just to save the industries from huge losses, however, it does
not give the license to the appellant-Company to act in
contravention of law since it is a cannon of law that everyone is
expected to act as per the mandate of law. [Paras 14-15] [515-H;
516-A-B]
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510            SUPREME COURT REPORTS                          [2018] 3 S.C.R.


A           CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3997-
      3998 of 2018.
            From the Judgment and Order dated 30.08.2016 and 06.10.2016
      by the Division Bench of the High Court of Orissa at Cuttack in W.P.
      (C) No. 9180 of 2010 and RVWPET No. 236 of 2016 respectively.
B           Dhruv Mehta, Sr. Adv., Snehal Kakrania, Ms. Anushka Sharda,
      Sanjeev Kumar (For M/s. Khaitan & Co.), Advs. for the Appellant.
            Sanjay R. Hegde, Mahabir Singh, Sr. Advs., S. S. Pratap, Sachin
      Das, Azim H. Laskar, Chandra Bhushan Prasad, R. Santhnan Krishnan,
      D. Mahesh Babu, Aditya Kr. Archiya, C. S. N. Mohan Rao, Som Raj
C     Choudhury, Advs. for the Respondents.
            The Judgment of the Court was delivered by
            R. K. AGRAWAL, J. 1. Leave granted.
            2. The above appeals have been preferred against the impugned
D     common judgments and orders dated 30.08.2016 and 06.10.2016 passed
      by the High Court of Orissa in WPC No. 9180 of 2010 and RVWPET
      No. 236 of 2016 respectively whereby the Division Bench of the High
      Court dismissed the appeal and the review petition filed by the appellant
      herein while upholding the decision dated 17.04.2010 passed by the
      Industrial Tribunal, Bhubaneswar in I.D. Case No. 16 of 2003.
E
            3. Brief facts:-
             (a) In the year 1981, the appellant-Company was incorporated as
      a joint venture between the Government of India and Republic of Nauru
      with an objective to manufacture Di-Ammonium Phosphates.
F            (b) Later on, in the year 1993, the Republic of Nauru disinvested
      its entire equity stake to the Government of India and the appellant-
      company became a wholly owned Public Sector Undertaking of the
      Government of India having its corporate and registered office at
      Bhubaneswar.
G            (c) Due to deteriorating financial position of certain Public Sector
      units, the Government of India on 19.05.1998 decided to temporarily
      enhance the age of retirement of all Central Public Sector Employees
      from 58 years to 60 years with a view that the same may help industries
      to cut down their losses. Pursuant to the said order dated 19.05.1998,
H
   PARADEEP PHOSPHATES LIMITED v. STATE OF ORISSA                             511
              & ORS. [R. K. AGRAWAL, J.]

the appellant-Company implemented the said order vide order dated             A
19.11.1998 in Company with retrospective effect from 27.05.1998.
        (d) Inspite of the enhancement of retirement age, the financial
performance of the appellant-Company still not improved. As a result,
the Government of India issued an Office Memorandum dated 22.08.2001
to all Central Public Undertakings including the appellant intimating its     B
decision to roll back the age of retirement of all the employees of Public
Sector Undertaking from 60 years to 58 years. Before this Memorandum,
the Government of India, on 08.06.2000, had advised the appellant-
Company to review the decision on enhancement of age of retirement.
However, the appellant-Company did not take any decision on the said
advisory.                                                                     C

       (e) In the meanwhile, the Government of India, on 28.02.2002,
divested its 74% shareholding in the appellant company in favour of one
M/s Zuari Maroc Phosphates Ltd. (“Zuari”), thereby, keeping only 26%
shareholding in its favour. As per the share holding agreements, under
Clause 7.2 (j) it was provided that all the decisions taken by the Board of   D
Directors of the appellant-Company, prior to the date of the disinvestment,
shall be binding on all concerned.
       (f) On 17.07.2002, the appellant-Company, by office order,
withdrew the earlier office order dated 19.11.1998 and restored the age
of retirement to 58 years in respect of all the employees in terms of         E
Certified Standing Orders and Services Rules of the appellant-Company.
       (g) Being aggrieved, the Trade Union raised dispute with regard
to the above and as a consequence of the same, the Government of
Orissa, Labour and Employment Department made Reference under
Section 12 read with Section 10 of the Industrial Disputes Act, 1947 (in      F
short “the Act”) to the Industrial Tribunal, Bhubaneswar. The Industrial
Tribunal, vide order dated 17.04.2010, disposed off the Reference and
invalidated the action of the appellant-Company of rolling back the age
of retirement from 60 years to 58 years due to contravention of Section
9A of the Act which says prior notice must be given to the employees by       G
the employer which the employer intentionally omitted to give in the
present case.
      (h) Being dissatisfied, the appellant-Company challenged the
decision of the Industrial Tribunal by way of filing writ petition in the
High Court of Orissa. The Division Bench of the High Court, vide order
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512            SUPREME COURT REPORTS                          [2018] 3 S.C.R.


A     dated 30.08.2016, dismissed the writ petition and held, inter alia, that
      there was no error apparent in the decision of the Industrial Tribunal.
      Thereafter, the appellant-Company also preferred a review petition but
      the same again got dismissed vide order dated 06.10.2016.
             (i) Consequently, the appellant-Company has filed these appeals
B     by way of special leave before this Court.
             4. We have given our solicitous consideration to the submissions
      of learned senior counsel for the parties and perused the relevant material
      placed before us.
            Point(s) for consideration:-
C            5. Whether in the light of present facts and circumstances of the
      case, any intervention of this Court is required in the impugned decision
      of the High Court?
            Rival contentions:-
             6. At the outset, leaned senior counsel for the appellant-Company
D
      contended that the High Court failed to appreciate that the age of
      retirement laid down in the appointment letters, the Service Rules and
      the Certified Standing Orders framed under the Industrial Employment
      (Standing Orders) Act, 1946 are binding upon all workmen governed by
      the same and, therefore, a temporary concession of allowing persons to
E     continue to serve until the age of 60 years pursuant to a government
      circular issued as a temporary measure to combat losses in Central Public
      Sector Undertakings cannot amount to a change in the settled service
      conditions.
             7. In other words, contention of the appellant-Company is that
F     even if the benefit of enhancement of age of superannuation from 58
      years to 60 years has been extended in favour of the workmen, they
      have got no right to retain the same for the reason that the Service Rules
      and the Certified Standing Orders applicable to the workmen stipulates
      a condition of superannuation on attaining the age of 58 years and since
      the same has not been amended in accordance with law, hence, the
G     provisions of Service Rules and the Certified Standing Orders are binding
      upon the workmen and merely because the benefit has been given to
      superannuate on attaining the age of 60 years instead of the age of 58
      years for a period of four years i.e., 1998 to 2002, it will not ipso facto
      replace the age of superannuation as has been provided in the Service
H     Rules or the Certified Standing Orders. Hence, no question of applicability
   PARADEEP PHOSPHATES LIMITED v. STATE OF ORISSA                                513
              & ORS. [R. K. AGRAWAL, J.]

of Section 9A of the Act arises in any case. Therefore, the impugned             A
decision of the High Court is liable to be set aside.
       8. Per contra, learned senior counsel for the respondent submitted
that the present appeals have been filed against the well reasoned
impugned judgments dated 30.08.2016 and 06.10.2016 which were rightly
passed by the Division Bench of the High Court. Further, it was also             B
submitted that the action of the appellant-Company amounts to
contravention of Section 9A of the Act read with Fourth Schedule which
postulates the necessity of prior notice to the workers if employer
proposes to effect any change in the conditions of service. Hence, this
appeal is devoid of merits and deserves to be dismissed.
                                                                                 C
       Discussion:-
        9. The relationship of the employer and employee is of utmost
faith and, as a result, it falls under the ambit of fiduciary relationship. In
order to regulate such relationship, legislature came up with legislation
i.e., the Industrial Disputes Act, 1947. The purpose of the Act is to protect    D
the interest of employees as they are the weaker sections since time
immemorial. In order to safeguard the rights of the employees, certain
amendments have been made subsequently in the Statute. In 1956,
legislature inserted Section 9A of the Act which makes it obligatory on
the part of the employer that he is bound to give advance notice to the
employee if he intends to change certain things as envisaged under               E
Section 9A of the Act read with Fourth Schedule. For the sake of
convenience, it is apt to re-produce Section 9A of the Act which is as
under:-
       “9A. Notice of change-No, employer, who proposes to effect
       any change in the conditions of service applicable to any workman         F
       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                                        G
       (b) within twenty-one days of giving such notice:
       Provided that no notice shall be required for effecting any change-
       (a) where the change is effected in pursuance of any settlement
       or award: or                                                              H
514             SUPREME COURT REPORTS                          [2018] 3 S.C.R.


A           (b) where the workmen likely to be affected by the change are
            persons 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, Civilians in Defence Services (Classification, Control
            and Appeal) Rules or the Indian Railway Establishment Code or
B
            any other rules or regulations that may be notified in this behalf by
            the appropriate Government in the official Gazette, apply.”
             10. At the first sight of the provision, prima facie, it appears that
      the employer is bound to give minimum 21 days’ notice to the employee
      if employer intends to change any material terms of service. Section 9A
C     of the Act is a provision in consonance with the Constitutional mandate
      which assures the protection of principles of natural justice i.e., no one
      shall be condemned unless heard. For the guidance, legislature prescribed
      the Fourth Schedule and it is clearly mentioned in Section 9A of the Act
      that before changing either of the things as envisaged in the Fourth
D     Schedule, prior notice must be given to the employee. In the instant
      case, the grievance of the Trade Union before the Tribunal was that
      withdrawal of the age of superannuation i.e., restoration of the age from
      60 years to 58 years, amounts to contravention of Clause 8 of the Fourth
      Schedule, hence, employer was bound to give prior notice which employer
      cannot escape. Therefore, the action of the employer is bad in law and
E     liable to be set aside which was eventually upheld by the Tribunal and
      the High Court.
             11. Undoubtedly, it is a cardinal principle of law that beneficial
      laws should be construed liberally. The Industrial Dispute Act, 1947 is
      one of the welfare legislations which intends to provide and protect the
F     benefits of the employees. Hence, it shall be interpreted in a liberal and
      broad manner so that maximum benefits could reach to the employees.
      Any attempt to do strict interpretation would undermine the intention of
      the legislature. In a catena of cases, this Court has held that the welfare
      legislation shall be interpreted in a liberal way.
G            12. The grievance of the appellant-Company before this Court is
      that the increase in the superannuation age of the employees was
      temporary in nature in order to combat the losses and in no circumstances,
      it can be said that withdrawal of it amounts to withdrawal of customary
      concession or privilege or change in usage. Eighth clause of the Fourth
H     Schedule says “withdrawal of any customary concession or privilege
   PARADEEP PHOSPHATES LIMITED v. STATE OF ORISSA                               515
              & ORS. [R. K. AGRAWAL, J.]

or change in usage”. The whole dispute revolves around the                      A
interpretation of the terms customary concession, privilege or change in
usage. In the instant case, we are mainly concerned with the term
‘privilege’. The word “privilege” as such is not defined in the Act. In the
absence of statutory definition, we have to take recourse of the dictionary
or general meaning of the term “privilege”. The Dictionary meaning of
                                                                                B
the word privilege means a “special right, advantage or immunity
granted or available only to a particular person or ground”. In
other words, a particular and peculiar benefit or advantage enjoyed by a
person, company, or class, beyond the common advantages of others.
      13. It is admitted position that the Board of Directors took the
decision of enhancement of age of retirement and it came into force             C
with retrospective effect from 27.05.1998 as mentioned in the order
dated 19.11.1998. Though, this decision implemented without the
amendment in the Standing Orders and Rules, yet impliedly it got the
force as a service condition since it directly relates with the service
condition of the employees. Age of superannuation is an integral part of        D
the service condition of the employee. Also, enhancement of
superannuation age would impliedly amount to a privilege since it was
provided particularly for the central public sector employees. At this
juncture, the Division Bench of the High Court held as under:
      “However the facts of this case is little bit different because the       E
      necessary modification has not been incorporated either in the
      Service Rules or in the Certified Standing Order enhancing the
      age of superannuation from 58 years to 60 years, but the Central
      Government being the competent authority has directed the Board
      of Directors to enhance the age of superannuation and accordingly
      it has been enhanced in the year 1998 and thereafter it has been          F
      reduced vide order dtd 17.7.2002 by the same process, hence we
      are of the considered view that by passing the order dtd 17.7.2002
      the privilege has been granted to the workmen has been recalled
      by altering the same by reducing the age of superannuation from
      60 years to 58 years is alteration which is detrimental to the interest   G
      of the workmen.”
      14. No doubt, the enhancement of the superannuation age was
temporary in nature in order to achieve certain objectives and also it is
not deniable that yet employees would be governed by the Service Rules
and the Certified Standing Orders which were not amended. However,              H
516              SUPREME COURT REPORTS                         [2018] 3 S.C.R.


A     if we allow the plea of the appellant-Company then it would defeat the
      object of legislature because legislature could never have intended that
      employees would be condemned without giving them right of reasonable
      hearing. Naturally, every employee is under the expectation that before
      reducing his superannuation age, he would be given a proper chance to
      be heard. Right to work is a vital right of every employee and in our
B
      view, it shall not be taken away without giving reasonable opportunity of
      being heard otherwise it would be an act of violation of the Constitutional
      mandate.
             15. Moreover, the contention of the appellant-Company that the
      object of enhancement of superannuation age was just to save the
C     industries from huge losses, therefore, it does not violate any statutory
      right of the employees, cannot be sustained in the eyes of law and also it
      does not give the license to the appellant-Company to act in contravention
      of law since it is a cannon of law that everyone is expected to act as per
      the mandate of law.
D            16. To sum up, we are of the view that at the very moment when
      the order of enhancement of superannuation of the employees came
      into force though temporary in nature, it would amount to privilege to
      employees since it is a special right granted to them. Hence, any unilateral
      withdrawal of such privilege amounts to contravention of Section 9A of
E     the Act and such act of the employer is bad in the eyes of law.
            17. In view of above detailed discussion, we are of the considered
      view that there is no error in the impugned judgment of the High Court,
      hence, we are not inclined to interfere in it. Accordingly, these appeals
      are hereby dismissed leaving parties to bear their own cost.
F
      Devika Gujral                                               Appeals dismissed.




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