AMITY UNIVERSITY KOLKATA

PROJECT ON LABOUR LAW

INDIAN AIRLINES VS UNION OF INDIA (UOI) AND ORS. ON

NAME- POOJA MUKHERJEE

SEM- VI, STREAM- B.COM LL.B.(H)

ENROLL NO.- A90821615013

1. The petitioner-Indian Airlines was initially incorporated as a corporation under the Air
Corporations Act, 1953 (hereinafter referred to as the Air Act, for short).

2. Under Section 45 of the Air Act, the petitioner had framed regulations relating to terms and
conditions of service of its officers and its employees.

3. As per the writ petition in and around 1978, the Regional Labour Commissioner (Central)
wrote to the petitioner about its intention to proceed with certification proceedings under
the Industrial Employees (Standing Orders) Act, 1946 (hereinafter referred to as the Standing
Orders Act, for short) in respect of the service regulations made by the petitioner. This was
objected to by the petitioner on the ground that the Standing Orders Act was not applicable to it.
The Regional Labour Commissioner (Central) as certifying authority under the Standing Orders
Act overruled this and other objections in its order dated 24th June, 1980 and held that the
petitioner was required to get the service regulations certified under the Standing Orders Act and
on failure to do so, the petitioner would render itself liable for penal action. This order dated 24th
June, 1980 was amended by a subsequent Order dated 4th July, 1980 and the certifying authority
gave its findings on various Clauses on the service regulations made by the petitioner.

4. Being aggrieved by the aforesaid orders passed by the Certifying Authority, the petitioner filed
an appeal under Section 6 of the Standing Orders Act, before the Chief Labour Commissioner
again raising the contention that the service regulations framed by the petitioner under Section
45 of the Air Act with prior approval of the Central Government were not amenable to
certification/modification/amendment by the Certifying Officer. It was submitted that the service
regulations framed under Section 45(2)(b) of the Air Act have a statutory force.

5. The Chief Labour Commissioner vide the impugned order dated 31st May, 1983 rejected the
objection raised by the petitioner and, inter alia, held that the petitioner was an "industrial
establishment" as defined in Section 2(e) of the Standing Orders Act and therefore the said Act
was applicable.
6. Aggrieved by the Orders passed by the Certifying Officer and the Appellate Authority under
the Standing Orders Act, the petitioner has filed the present writ petition.

ISSUES

1. Whether the Standing Orders Act was/is applicable to petitioner corporation ?

2. Whether the writ filed by the petitioner is maintainable?

3. Whether the particular legislation falls in the category of referential legislation or legislation
by incorporation ?
ARGUMENTS

 ISSUE 1

The issue argued by the learned Counsel for the petitioner, Mr. Lalit Bhasin in the present writ
petition is whether the Standing Orders Act was/is applicable to petitioner corporation.
Contention of the learned Counsel for the petitioner is that the provisions of the Standing Orders
Act do not apply as service regulations have been framed under a special statute i.e. Air Act and
in view of Section 45 of the said Act the service regulations do not require certification.

Learned Counsel for the petitioner has brought to our notice, a Division Bench judgment of this
Court passed in the case of Air India v. Union of India and Ors.1 ,wherein an identical
controversy had arisen. It may be relevant to state here that Air India was also incorporated
under the provisions of the Air Act. It was submitted on behalf of Air India that service
regulations have been framed by it under Section 45 of the Air Act and the Standing Orders
Act would not apply. However, a Division Bench of this Court held that the Standing Orders
Act is a special Act and the Air Act is a general Act and therefore the provisions of the Standing
Orders Act would apply.

the Bench relied upon a judgment of the Supreme Court in the case of U.P. State Electricity
Board and Anr. v. Hari Shankar Jain and Ors.2. The Division Bench has further held that Section
45 of the Air Act did not oust the applicability of the Standing Orders Act because it deals with a
specific provision, namely, service regulations with regard to employees of Air India. The
Division Bench also examined Section 13B of the Standing Orders Act and held that the service
regulation of Air India were not exempt because the requirement of issue of notification by
appropriate Government, i, e. the Central Government, was not satisfied.

1
43(1991)DLT 17
2
AIR 1979 SC 65
  ISSUE 2

It is contended by the learned Counsel for the petitioner that the Standing Orders Act is not
applicable to the airline industry as the said Act applies to "industrial establishments" as defined
in Section 2(ii) of the Payment of Wages Act, 1936 at the time of enactment of the Standing
Order Act on 23rd April, 1946. It is further contended that the expression "industrial
establishment" as defined in Section 2(ii) of the Payment of Wages Act, 1936 at that time (23rd
April, 1946) did not include air transport service. It is only in the year 1965 that Section 2(ii) of
the Payment of Wages Act, 1936 was amended to include "air transport services" and the said
amendment made in 1965 is not applicable to the Standing Orders Act and the original
unamended definition of "industrial establishment" will continue to apply as far as the Standing
Orders Act is concerned. It is submitted that the Bombay High Court has accepted the said
contention holding that the subsequent amendment made in 1965 in the Payment of Wages Act,
1936 has to be ignored for the purpose of the expression "industrial establishment" as defined in
the Standing Orders Act.

The Union of India in its counter affidavit has taken a categorical stand that the Standing Orders
Act would apply to the petitioner as it is by way of a special legislation and the regulations made
by the petitioner-Corporation governing its employees have been made under a general law. The
unions have further submitted that the service regulations framed by the petitioner are neither
certified under Section 5 of the Standing Orders Act nor notified under Section 13B of the said
Act and, therefore, the petitioner is bound to comply by the Standing Orders Act. Reliance is also
placed upon Section 7 of the Air Act, 1953, which reads as under:

Section 7. Functions of the Corporation-

(3) nothing contained in this section shall be construed as (a) authorising Corporation to
disregard any law for the time being in force, or....

The Standing Orders Act is applicable only to "industrial establishments" but the said Act does
not itself define the expression "industrial establishment". Section 2(e)(i) of the Standing Orders
Act states that the expression "industrial establishment" will mean industrial establishment as
defined in Section 2(ii) of the Payment of Wages Act, 1936. Payment of Wages Act, 1936 came
into force on 28th March, 1937. The Standing Orders Act came into force on 23rd April, 1946.
In 1946, the expression "industrial establishment" as defined in Section 2(ii) of the Payment of
Wages Act, 1936 did not include civil aviation industry.

The submission of the petitioner is that this extended definition of the expression "industrial
establishment" in the Payment of Wages Act, 1936 as amended in 1965 will not apply to
the Standing Orders Act. It is submitted that when Section 2(e) of the Standing Orders Act refers
to the definition or expression "industrial establishment" as defined in Section 2(ii) of the
Payment of Wages Act, 1936, it refers to the definition existing in the Payment of Wages Act,
1936 on the date Standing Orders Actwas enacted, i.e. 23rd April, 1946 and any subsequent
amendment in Section 2(ii) of the Payment of Wages Act, 1936 do not get incorporated in
the Standing Orders Act.

 ISSUE 3

The law on the subject is well settled. When an earlier Act or certain of its provisions are
incorporated by reference into a later Act, the provisions so incorporated become part and parcel
of the later Act as if they had been bodily transposed into it. The incorporation of an earlier Act
into a later Act is a legislative device adopted for the sake of convenience in order to avoid
verbatim reproduction of the provisions of the earlier Act into the later. But this must be
distinguished from a referential legislation which merely contains a reference or the citation of
the provisions of an earlier statute. In a case where a statute is incorporated, by reference, into a
second statute, the repeal of the first statute by a third does not affect the second. The later Act
along with the incorporated provisions of the earlier Act constitutes an independent legislation
which is not modified or repealed by a modification or repeal of the earlier Act. However, where
in a later Act there is a mere reference to an earlier Act, the modification, repeal or amendment
of the statute that is referred, will also have an effect on the statute in which it is referred. It is
equally well settled that the question whether a former statute is merely referred to or cited in a
later statute, or whether it is wholly or partially incorporated therein, is a question of
construction.
PRECEDENT

 Air India v. Union of India and Ors3

Supreme Court noticed the controversy in issue and made reference to the Air Corporations
(Transfer of Undertakings and Repeal) Act, 1994 (hereinafter referred to as Repeal Act, 1994,
for short), which came into force on 29th January, 1994 and, inter alia, held that the provisions of
the Standing Orders Act are applicable. It may be stated here that the Repeal Act, 1994 repealed
the Air Act and the Supreme Court held that upon repeal of the parent statute with the enactment
of the Repeal Act, 1994, the subordinate legislation i.e. the service regulations framed
under Section 45 of the Air Act did not survive after 29th January, 1994 and therefore the very
foundation of Air India's case had ceased to exit. It was further held that Section 8 of the Repeal
Act, 1994 does not save or protect the regulations made under the Air Act.

 Secy. of State v. Hindustan Coop. Insurance Society Ltd. Privy Council 4

In this country it is accepted that where a statute is incorporated by reference into a second
statute, the repeal of the first statute does not affect the second: see the cases collected in 'Craies
on Statute Law', Edn. 3, pp. 349-50. This doctrine finds expression in a common form section
which regularly appears in the amending and repealing Acts which are passed from time-to-time
in India.

 Mahindra and Mahindra Ltd. v. Union of India5

In the same judgment, Supreme Court has also referred to the test or the principles to be applied
to determine whether it is a case of legislation by reference or incorporation. The relevant portion
is as under:

It is also well settled that the question as to whether a particular legislation falls in the category
of referential legislation or legislation by incorporation depends upon the language used in the
statute in which reference is made to the earlier decision and other relevant circumstances.

3
43(1991)DLT 17
4
AIR 1932Cal 171
5
AIR 1979 SC 798
Thus, to decide whether it is a case of incorporation or reference, one has to examine and probe
the legislative intent and take an insight into the working of the enactment.

 Surendra Kumar v. Central Government Industrial Tribunal-cum-Labour6

The legislature instead of separately defining "industrial establishment" in the Standing Orders
Acthas for the sake of convenience adopted the definition of "industrial establishment" as given
in the Payment of Wages Act, 1936. We feel the present case is one of legislation by reference
and therefore amendment made in the Payment of Wages Act, 1936 defining the term "industrial
establishment" will also be incorporated in the Standing Orders Act. Further, both the
legislations, that is the Payment of Wages Act, 1936 and the Standing Orders Act, are welfare
and beneficial legislations with the same underlying object and purpose to protect workmen by
having just and equitable service conditions and ensuring industrial peace. Any amendment and
changes in the definition of the expression "industrial establishment" in the Payment of Wages
Act, 1936, should therefore also be applicable to the Standing Orders Act.

6
(1981)4 SCC 443
JUDGEMENT

In view of the decision of the Division Bench of the Delhi High Court and the decision of the
Supreme Court, there is no doubt in our mind that the present writ petition is liable to be
dismissed. The provisions of the Standing Orders Act are clearly applicable to the petitioner.

The judges' Bench also said that the Payment of Wages Act, 1936 and the Standing Orders
Act are supplemental to each other. Both the Acts have been framed with the object and purpose
of providing protection and benefit to workers. The Payment of Wages Act, 1936 ensures that
wages are paid to the workers and the Standing Orders Act ensures that the terms and conditions
of service of workers is just and equitable. Payment of wages and terms and conditions of service
are inter-connected and inter-linked. Payment of wages is part of terms and conditions of service.
Both of them are part of "bread and butter legislations" and ensure industrial peace and
development. Thus the present case is covered by Exception (a) as carved out in Narasimhan's
case (supra).

To deny benefit of the amended definition of "industrial establishment" is contrary to principle

In view of the above the learned Court do not find any merit in this writ petition
and the same is dismissed, without any order as to costs.
CRITICAL ANALYSIS

A subsequent legislation often makes a reference to the earlier legislation so as to make the
provisions of the earlier legislation applicable to matters covered by the later legislation. Such a
legislation may either be (i) a referential legislation which merely contains a reference to or the
citation of the provisions of the earlier statute; or (ii) a legislation by incorporation whereunder
the provisions of the earlier legislation to which reference is made are incorporated into the later
legislation by reference. If it is a referential legislation the provisions of the earlier legislation to
which reference is made in the subsequent legislation would be applicable as it stands on the date
of application of such earlier legislation to matters referred to in the subsequent legislation. In
other words, any amendment made in the earlier legislation after the date of enactment of the
subsequent legislation would also be applicable. But if it is a legislation by incorporation the rule
of construction is that repeal of the earlier statute which is incorporated does not affect operation
of the subsequent statute in which it has been incorporated. So also any amendment in the statute
which has been so incorporated that is made after the date of incorporation of such statute does
not affect the subsequent statute in which it is incorporated and the provisions of the statute
which have been incorporated would remain the same as they were at the time of incorporation
and the subsequent amendments are not to be read in the subsequent legislation.

There is another reason also why the contention raised by the learned Counsel for the petitioner
cannot be accepted. The issue, whether Standing Orders and/or the Standing Orders Act will
apply to "air transport services", has already been decided by a Division Bench of this Court as
well as the Supreme Court. A decision of the Supreme Court is binding under Article 141 of the
Constitution of India. In view of the binding nature of the judgments of the Supreme Court we
cannot hold and declare the law laid down by the Supreme Court asperincuriam or take a
contrary view on the ground that the Supreme Court has failed to deal with certain aspects or
some relevant provisions of law were not brought to its notice or some argument was not
raised/examined. Merely because certain aspects of a matter were never examined or considered
by the Supreme Court, does not entitle a High Court to refuse or follow the said decision.
Decisions of the Supreme Court are binding under Article 141 of the Constitution of India and
cannot be assailed before the High Court on the ground that certain aspects were not brought to
the notice of the Supreme Court or considered by it. High Courts are duty bound to follow the
judgment of the Supreme Court and it is only for the Supreme Court to re-examine and
reconsider its earlier judgments.Hence there is no doubt in our mind that the present writ petition
is liable to be dismissed. The provisions of the Standing Orders Act are clearly applicable to the
petitioner.