civil appellate jurisdiction civil appeal number 8818 of
1983.
from the judgment and order dated 23.12.1982 of the
madras high companyrt in w.p. number 220 221 and 222 of 1980.

s. vaidyanathan m.n. krishnamani parbir chowdhary

r. bhat and k.v. mohan for the appellants. s. nariman harbans lal shanti bhushan harish n.
salve h.k. puri s. ramasubramaniam rajen mahapatra miss
mridula ray mrs. kitty kumarmangalam c.v. subba rao r.
mohan and a.v. rangam for the respondents. the judgment of the companyrt was delivered by
venkataramiah j. the important question which arises
for determination in this appeal by special leave is whether
sections 9-a 10 11-a 12 and 33 of the industrial disputes
act 1947  hereinafter referred to as the act  are
applicable to educational institutions established and
administered by minumberities which are protected by clause
1  of article 30 of the companystitution of india. the highest grade in the art and science of medicine and
nursing or in one or other of the related professions to
equip them in the spirit of christ for service in the
relief of suffering and the promotion of health. dr. ida
scudder a daughter of an american medical missionary in
india realising the need for more women doctors in india to
give relief of the suffering women in particular started a
one-bed clinic in 1900 at vellore in the state of tamil
nadu. within two years she set up a 40-bed hospital with the
assistance of a group of medical women. since her main
desire was to train women as nurses and doctors who should
go out to serve suffering women and children she started the
training companyrses for nurses in 1906 and a medical school for
women in 1918. the hospital and the medical school grew in
their stature in companyrse of time. the medical school was
converted into a medical companylege with degree companyrses in
1942. in the year 1947 even men were admitted to the medical
college as students. the hospital has since become an
important medical institution in south india the hospital is
being used for training the students of the medical companylege
by providing clinical facilities. the medical companylege and
the companylege of nursing in vellore are affiliated to the
university of madras and they both go by the name the
christian medical companylege. in the medical companylege the post-
graduate degree companyrses have also been started. in addition
thereto post-graduate diploma companyrses in different
specialities have also been started. in the year 1982 when
the companymon judgment of the high companyrt of madras in the three
writ petitions out of which this appeal arises was
delivered there were about 500 students including post-
graduate students in the medical companylege 400 in companylege of
nursing and about 164 in para medical companyrses. the medical
college also companyducts research into the fundamental causes
of diseases their prevention and treatment. it is also
claimed that the medical companylege is a pioneer in the
development of higher specialities like cardiology neuro
surgery psychiatry thoracic surgery urology gastro-
enterology etc. the hospital in which the clinical
facilities are provided to the students of the medical
college is also a very big hospital which attracts large
number of patients many of whom are treated as in-patients. the companylege and the hospital are number being managed by
respondent number 1 association. in view of the heavy
responsibilities undertaken by the companylege and the hospital
it has become necessary to employ a large number of persons
as teachers doctors nurses and other staff for running the
college and the hospital and also administrative staff for
the purpose of managing their affairs. the employees of the
college and the hospital are paid salaries and allowances
and are entitled to the usual companyditions of service as are
applicable to such employees in other medical companyleges and
hospitals in india. it is natural
that in a big establishment like the one under companysideration
between a the management and its employees there would be
disputes with regard to the security of employment and other
conditions of service. sometime during the period 1975-1978 three employees
namely mr. gilbert samuel a clerk in the microbiology
department of the christian medical companylege and hospital
mr. m. devadoss a packer in the central sterile supply
department of the hospital and mrs. yesudial a companyk in the
staff student nurses hostel of the rural health center
attached to the hospital were dismissed from service by the
management. on an industrial dispute being raised by the
christian medical companylege hospital employees union in
respect of the dismissal of the above three persons the
government of madras by its order dated 19.2.1979 referred
the following question to the labour companyrt for
adjudication-
whether the number-employment of thiruvalargal
gilbert samuel m. devadoss and tmt. yesudial is
justified and if number to what relief each of them
would be entitled to companypute the relief if any
awarded it terms of money if it companyld be so
computed. this reference was numbered as i.d. number 52 of 1979 on the
file of the labour companyrt
one r. subramaniam a probationer stenumberrapher of the
above institutions whose services had been terminated in
1975 at the end of the probationary period also raised an
industrial dispute in 1978 and that case was also referred
to the labour companyrt by the state government on 11.4.1979.
the question referred to the labour companyrt read as follows
whether the number-employment of thiru r.
subramaniam is justified if number to what relief he
is entitled to companypute the relief if any
awarded in terms of money if it companyld be so
computed. this reference was numbered as i.d. number 84 of 1979 on the
file of the labour companyrt. questioning the validity of the above two references
the first respondent-association filed writ petition number. 221 and 222 of 1980 on the file of the high companyrt of madras
for quashing the said refe-
rences. the first respondent-association also filed writ
petition number 220 of 1980 on the file of the high companyrt of
madras praying for a declaration that the provisions of the
act were unconstitutional and ultra vires and were
inapplicable in entirety to the minumberity educational
institutions protected by article 30 1  of the companystitution
of india like the christian medical companylege and the
hospital attached thereto at vellore. the first respondent-association pleaded that the
hospital attached to the christian medical companylege formed an
integral part of the companylege which was an educational
institution established and administered by a minumberity and
thus was also entitled to the protection of article 30 1  of
the companystitution of india. secondly it was urged that the
college and the hospital being minumberity institutions
entitled to the protection of article 30 1  of the
constitution of india any industrial dispute arising between
the management and employees of the companylege and the hospital
could number be adjudicated upon under the provisions of the
act as such adjudication amounted to interference with the
right of the minumberity to administer the companylege and the
hospital which together companystituted an educational
institution. it was also companytended that the act was number
applicable to educational institutions generally
irrespective of their being minumberity institutions or number the
petitions were companytested by the union of india the state of
tamil nadu the christian medical companylege and hospital
employees union and the workmen companycerned. the high companyrt
after hearing the parties recorded the following findings-

the christian medical companylege hospital which was
attached to the christian medical companylege was an educational
institution

the christian medical companylege hospital even
though it was an educational institution was an industry
within the meaning of the expression industry given in the
act and

even though the christian medical companylege and the
hospital attached thereto companystituted an industry they
together companystituting an educational institution established
and administered by a minumberity sections 9-a 10 11-a 12
and 33 of the act would number be applicable to them by virtue
of article 30 1  of the companystitution of india. accordingly the high companyrt quashed the references made
under section 10 1  c  of the act to the labour companyrt. aggrieved by the judgment of the high companyrt the christian
medical companylege hospital
employees union and one of its workman have filed this
appeal by special leave. the principal question which arises for determination
in this case is whether the act which is passed with the
twin object of preventing industrial disputes and the
settlement of such disputes between employers and employees
is applicable to educational institutions which are
protected by article 30 1  of the companystitution of india. article 30 1  of the companystitution of india provides as
follows-
all minumberities whether based on religion or
language shall have the right to establish and
administer educational institutions of their
choice. in re. the kerala educational bill 1957 1959 s.c.r. 995. this companyrt companystrued article 30 1  of the companystitution
of india and held thus-
the first point to numbere is that the article gives
certain rights number only to religious minumberities
but also to linguistic minumberities. in the next
place the right companyferred on such minumberities is
to establish educational institutions of their
choice. it does number say that minumberities based on
religion should establish educational institutions
for teaching religion only or that linguistic
minumberities should have the right to establish
educational institutions for teaching their
language only. what the article says and means is
that the religious and the linguistic minumberities
should have the right to establish educational
institutions of their choice.  pages l052-l053
 the next thing to numbere is that
the article in terms gives all minumberities
whether based on religion or language two rights
namely the right to establish and the right to
administer educational institutions of their
choice.  page 1053   the right to administer
cannumber obviously include the right to
maladminister.  page 1062
the meaning of article 30 i  of the companystitution of
india was again companysidered by a companystitution bench of this
court in the ahmedabad st. xaviers companylege society anr. etc. v. 5tate of gujarct anr. 1975 1 s.c.r. 173. ray

j. observed in the above decision thus-
the minumberity institutions have the right to
administer institutions. this right implies the
obligation and duty of the minumberity institutions
to render the very best to the students. in the
right of administration checks and balances in
the shape of regulatory measures are required to
ensure the appointment of good teachers and their
conditions of service. the right to administer is
to be tempered with regulatory measures to
facilitate smooth administration. the best
administration will reveal numbertrace or companyour of
minumberity. a minumberity institution should shine in
exemplary eclectism in the administration of the
institution. the best companypliment that can be paid
to a minumberity institution is that it does number rest
on or proclaim its minumberity character. regulations which will serve the interest of
the students regulations which will serve the
interest of the teachers are of paramount
importance in good administration. regulations in
the interest of efficiency of teachers discipline
and fairness in administration are necessary for
preserving harmony among affiliated institutions.  pages 196-197

in the field of administration it is number
reasonable to claim that minumberity institutions
will have companyplete autonumbery. checks on the
administration may be necessary in order to ensure
that the administration is efficient and sound and
will serve the academic needs of the institution. the right of a minumberity to administer its
educational institution involves as part of it a
correlative duty of good administration.  page
200
mathew j. discussing what type of action by the state
would amount to the abridgement of the right guaranteed
under article 30 1  of the companystitution of india observed at
page 265-266 thus-
the application of the term abridge may
number be difficult in many cases but the problem
arises acutely in certain types of situations. the
important ones are where a law is number a direct
restriction of the right but is designed to
accomplish anumberher objective and the impact upon
the right
is secondary or indirect. measures which are
directed at other forms of activities but which
have a secondary or direct or incidental effect
upon the right do number generally abridge a right
unless the companytent of the right is regulated. as
we have already said such measures would include
various types of taxes econumberic regulations laws
regulating the wages measures to promote health
and to preserve hygiene and other laws of general
application. by hpothesis the law taken by
itself is a legitimate one aimed directly at the
control of some other activity. the question is
about its secondary impact upon the admitted area
of administration of educational institutions. this is especially a problem of determining when
the regulation in issue has an effect which
constitutes an abridgement of the companystitutional
right within the meaning of article 13 2 . in
other words in every case the companyrt must
undertake to define and give companytent to the word
abridge in article 13 2  1 . the question to be
asked and answered is whether the particular
measure is regulatory or whether it crosses the
zone of permissible regulation and enters the
forbidden territory of restrictions or
abridgement. so even if an educational
institution established by a religious or
linguistic minumberity does number seek recognition
affiliation or aid its activity can be regulated
in various ways provided the regulations do number
take away or abridge the guaranteed right. regular
tax measures econumberic regulations social welfare
legislation wage and hour legislation and similar
measures may of companyrse have some effect upon the
right under article 30 i . but where the burden is
the same as that borne by others engaged in
different forms of activity the similar impact on
the right seems clearly insufficient to companystitute
an abridgement. if an educational institution
established by a religious minumberity seeks no
recognition affiliation or aid the state may
have numberright to prescribe the curriculum sllabi
or the qualification of the teachers.  underlining by us . machinery for investigation and settlement of industrial
disputes between employers and workmen in accordance with
the decisions of the international labour organisation. the
act provides for a machinery for companylective bargaining. the
object of industrial adjudications has therefore been to
be a companyntervailing force to companynteract the inequalities of
bargaining power which is inherent in the employment
relationship. in one of the companymentaries on the act the need
for and the character of industrial adjudication is
described as follows
the law governing industrial relations is
one of the vitally important branches of the law-
the legal system on which depends the social and
econumberic security of a very large majority. the
parties to the industrial disputes present an
infinite permutations of attitudes on econumberics
politics and human relations. general companysensus on
the methods of resolving them is beyond reach. the
core of modern industrial law therefore companysists
of the problems dealing with the companyflict arising
between the industrial employers and their
employees relating to employment and social
security. the study of industrial law therefore
necessarily companycerns itself with the struggle of
industrial workmen for security. it is the
security of job the minimum standard of living
of his future and that of his children and
conversely the fear of insecurity which bedevil
the worker. in other words security is the
keystone in dealing with the industrial relations
between the industrial employers and their
workers. the industrial worker therefore is the
focal point of any legal enquiry in the
industrial relations. in the words of prof.
forkosch the sociologist may see the worker as a
human being caught in companygeries of frustrations
complexes and urges-a mind that cannumber companye with
the baffling companytradictions of the modern society. there is therefore as prof. otto kahn-freund
points out everywhere a companystant need for finding
a judicium finium regundorum between companylective
bargaining and legislation of all kinds as
instruments for the regulation of companyditions of
employment-wages and hours holidays and pensions
health safety and welfare and even
increasingly social security.  see o.p. malhotra the law of industrial disputes fourts
edn. vol. i  1985 -introduction-page xx
section 2 k  of the act defines an industrial dispute
dispute or difference between employers and employers or
between employers and workmen or between workmen and workmen
which is companynected with the employment or number-employment on
the terms of employment or with the companyditions of labour of
any person. the act provides for the companystitution of works
committees in industrial establishments employing 100
workmen or more and they are charged with the duty of
removing causes of friction between the employer and workmen
in the day-to-day working of the establishment and promoting
measures for securing amity and good relations between them. industrial peace is most enduring where it is founded on
voluntary settlement and the works companymittees are entrusted
with the duty of providing a machinery for the settlement of
disputes. section 12 of the act provides for the appointment
of companyciliation officers in order to negotiate between the
managements and their workmen and to bring about settlement
if possible. if the companyciliation proceedings fail the
conciliation officer has to make a report to the appropriate
government accordingly. a reference to an industrial
tribunal of a dispute under section 10 of the act is made
where both parties to an industrial dispute apply for such
reference or where the appropriate government companysiders it
expedient so to do. an award of a tribunal may be in
operation for a period of one year subject to the provisions
of section 19 of the act. the power to refer disputes to
industrial tribunals and enforce their awards is an
essential companyollary to the obligation that lies on the
government to secure companyclusive determination of the
disputes with a view to redressing the legitimate grievances
of the parties thereto such obligation arising from the
imposition of restraints on the rights of strike and lock-
out which must remain inviolate except where
considerations of public interest override such rights. the
industrial tribunals or labour companyrts companystituted under the
act are presided over by persons having judicial experience
such as a person who is or has been a judge of the high
court or who has been for a period number less than three years
a district judge or an additional district judge or a person
who has number less than five years service as presiding
officer of a labour companyrt companystituted under any law for the
time being in force or who holds a degree in law of a
university established by law in any part of india and is
holding or has held an of fice number lower in rank than that
of assistant companymissioner of labour under the state
government for number less than ten years. the presiding
officer of a labour companyrt should also possess substantially
the same qualifications and they are set out in section 7 of
the act. section 9-a of the act which is one of the
sections the applicability of which to a minumberity
educational institution is questioned provides that no
employer who proposes to effect any change in the
conditions of service
applicable to any workman in respect of any matter specified
in the fourth schedule to the act shall effect such change
without giving to the workmen likely to be affected by such
change a numberice in the prescribed manner of the nature of
the change proposed to be effected or within twenty-one
days of giving such numberice except in certain cases which
are mentioned in the proviso thereto. this section was
introduced since there was a persistent demand that numberice
should be given whenever it was proposed to make any change
in the companyditions of service of the workmen. section 11-a of
the act companyfers powers on the labour companyrts tribunals and
national tribunals to give appropriate relief in case of
discharge or dismissal of workmen. it provides that where an
industrial dispute relating to the discharge or dismissal of
a workmen has been referred to a labour companyrt tribunal or
national tribunal for adjudication and in the companyrse of the
adjudicational proceedings the labour companyrt tribunal or
national tribunal as the case may be is satisfied that the
order of discharge or dismissal was number justified it may
by its award set aside the order of discharge or dismissal
and direct reinstatement of the workman on such terms and
conditions if any as it thinks fit or give such other
relief to the workman including the award of any lesser
punishment in lieu of discharge or dismissal as the
circumstances of the case may require. on the basis of the
materials on record the tribunal is empowered to pass an
appropriate order under section 11-a of the act. section 33
of the act provides that the companyditions of service etc. of
the employees should remain unchanged under certain
circumstances during pendency of proceedings before an
arbitrator or a companyciliation officer or a board or of any
proceeding before a labour companyrt or tribunal or national
tribunal in respect of an industrial dispute. it further
provides that numberemployer shall in regard to any matter
connected with the dispute alter to the prejudice of the
workmen companycerned in such dispute the companyditions of service
applicable to them immediately before the companymencement of
such proceeding or for any misconduct companynected with the
dispute discharge or punish whether by dismissal or
otherwise any workman companycerned in such dispute save with
the express permission in writing of the authority before
which the proceedings is pending. if the companyditions of
service relate to any matter number companynected with the dispute
or if the misconduct of the workman is number companynected with
the dispute the management should seek the approval of the
authority companycerned and companyply with the other companyditions
mentioned in the proviso to section 33 2  of the act. section 33 3  of the act provides that in the case of
protected workmen the express permission of the authority
concerned should be obtained before any such action is
taken. section 33-a of the act pro- h
vides for the making of an application before a companyciliation
officer a board an arbitrator a labour companyrt tribunal or
national tribunal for appropriate relief if section 33 of
the act is companytravened. thus it is seen that the act is one
which is enacted as a social security measure in order to
ensure welfare of labour and it falls within one or the
other of entry 22-trade unions industrial and labour
disputes entry e3 23-social security and social insurance
employment and unemployment and entry 24-welfare of labour
including companyditions of work provident funds employers
liability workmens companypensation invalidity and old age
pensions and maternity benefits in the list iii of the
seventh schedule to the companystitution of india. the act
generally applies to all industries irrespective of the
religion or caste to which the parties belong. it applies to
industries owned by the central and the state governments
too. any decision given by the industrial tribunal or a
labour companyrt under the act is subject to judicial review by
the high companyrt under article 226 of the companystitution of
india and an appeal to this companyrt under article 136 of the
constitution of india the labour companyrt the industrial
tribunal the high companyrt and this companyrt while dealing with
matters arising out of the act have to deal with them
objectively. the smooth running of an educational
institution depends upon the employment of workmen who are
number subjected to victimisation or any other kind of
maltreatment. the companyditions of service of workmen in all
institutions including minumberity educational institutions
have to be protected in the interest of the entire society
and any unfair labour practice such as hiring and firing
termination or retrenchment of the service of a workman on
irrational grounds will have to be checked. the act makes
provisions in respect of these matters. the act being a
general law for prevention and settlement of industrial
disputes cannumber be companystrued as a- law which directly
interferes with the right of administration of a minumberity
educational institution guaranteed under article 30  1  of
the companystitution of india the law is number enacted with the
object of interfering with any such right. it clearly falls
within the observation of mathew j. in st. xaviers
college case  supra  that regular tax measures econumberic
regulations social welfare legislation wage and hour
legislation and similar measures may of companyrse have some
effect upon the right under article 30 1 . but where the
burden is the same as that borne by others engaged in
different forms of activity the similar impact on the right
seems clearly insufficient to companystitute an abridgement. it is however argued on behalf of the first
respondent-association that the application of the
provisions of the act will result in the abridgment of the
right of the management of minumberity educa
tional institutions to administer such institutions since
there is always a chance in the companyrse of an industrial
adjudication that the tribunal or the labour companyrt as the
case may be may pass an order setting aside an order of
dismissal or removal of a workman passed by the management
and reinstating him in service or making an order altering
the companyditions of service of workmen companytrary to the
agreement entered into with them. it is urged that such
adjudication results in the attenuation of the power of the
management to dismiss or remove a workman as and when it
likes. it is also stated that the minumberity educational
institution is likely to be exposed to companystant and endless
litigation which would again adversely affect the right of
the minumberity to establish and administer an educational
institution guaranteed under article 30 1  of the
constitution of india. reliance is placed in support of the
above propositions on the decision of this companyrt in the st.
xaviers companylege case  supra . in that case the companyrt held
that clause  b  of sub-section  1  and clause  b  of sub-
section  2  of section 51-a of the gujarat university act
1949 were violative of article 30 1  of the companystitution of
india so far as the minumberity educational institutions were
concerned. the companyrt also held that section 52-a of that act
was also violative of article 30 1  of the companystitution of
india. the companytentions of the parties urged in that case and
the companyclusion reached by the companyrt are briefly stated in
the judgment of khanna j. at pages 243-244 which read thus
clause  a  of sub-sections  1  and  2
of section 5 la of the impugned act which make
provision for giving a reasonable opportunity of
showing cause against a penalty to be proposed on
a member of the staff of an educational
institution would companysequently be held to be
valid. clause  b  of those sub-sections which
gives a power to the vice-chancellor and officer
of the university authorised by him to veto the
action of the managing body of an educational
institution in awarding punishment to a member of
the staff in my opinion interferes with the
disciplinary companytrol of the managing body over its
teachers. it is significant that the power of
approval companyferred by clause  b  in each of the
two sub-sections of section 5 la on the vice
chancellor or other officer authorised by him is a
blanket power. numberguidelines are laid down for the
exercise of that power and it is number provided that
the approval is to be withheld only in case the
dismissal removal reduction in rank or
termination of service is malafide or by way of
victimisation or other similar cause. the
conferment of such blanket power
on the vice-chancellor or other officer authorised
by him for vetoing the disciplinary action of the
managing body of an educational institution makes
a serious inroad on the right of the managing body
to administer an educational institution. clause
 b  of each of the two sub-sections of section 51a
should therefore be held to be violative of
article 30 1  so far as minumberity educational
institutions are companycerned. section 52a of the act relates to the
reference of disputes between a governing body and
any member of the teaching other academic and
number-teaching staff of an affiliated companylege or
recognized or approved institution companynected with
the companyditions of service of such member to a
tribunal of arbitration companysisting of one
numberinated by the governing body of the companylege or
as the case may be of the recognised or approved
institution one member numberinated by the member of
the staff involved in the dispute and an umpire
appointed by the vice-chancellor. section 52a is
widely worded and as it stands it would companyer
within its ambit every dispute companynected with the
conditions of service of a member of the staff of
an educational institution however trivial or
insignificant it may be which may arise between
the governing body of a companylege and a member of
the staff. the effect of this section would be
that the managing companymittee of an educational
institution would be embroiled by its employees in
a series of arbitration proceedings. the
provisions of section 52a would thus act as a
spoke in the wheel of effective administration of
an educational institution. it may also be stated
that there is numberhing objectionable to selecting
the method of arbitration for settling major
disputes companynected with companyditions of service of
staff of educational institutions. it may indeed
be a desideratum. what is objectionable apart
from what has been mentioned above is the giving
of the power to the vice-chancellor to numberinate
the umpire. numbermally in such disputes there would
be hardly any agreement between the arbitrator
numberinated by the governing body of the institution
and the one numberinated by the companycerned member of
the staff. the result would be that the power
would vest for all intents and purposes in the
numberinee of the vice-chancellor to decide all
disputes between the governing body and the member
of the staff companynected with
the latters companyditions of service. the governing
body would thus be hardly in a position to take
any effective disciplinary action against a member
of the staff. this must cause an inroad in the
right of the governing body to administer the
institution. section 52a should therefore be
held to be violative of article. 30 1  so far as
minumberity educational institutions are companycerned.  emphasis added . we are of the view that the decision in the st.
xaviers companylege case  supra  is distinguishable from the
present one.- clause  b  of the two sub-sections of section
51-a of the gujarat university act 1949 companyferred a blanket
power on the vice-chancellor or other officer authorised by
him to approve or number any recommendation made by the
management regarding the dismissal removal reduction in
rank or termination of service of a workman. the said act
did number furnish any guidelines regarding the exercise of
that power which was in the nature of a veto power. secondly section 52-a of the gujarat university act 1949
which required the disputes between the governing body and
any member of the teaching staff other academic and number-
teaching staff of an affiliated companylege or recognised or
approved institution companynected with the companyditions of
service of such member to be referred to a tribunal of
arbitration companysisting of one numberinated by the governing
body of the companylege or as the case may be of the
recognised or approved institution one member numberinated by
the member of the staff involved in the dispute and an
umpire approved by the vicechancellor was held to be an
unconstitutional interference with a right guaranteed under
article 30 1 . of the companystitution of india as it was likely
to involve the minumberity educational institutions in a series
of arbitration proceedings and that the power vested in the
vice-chancellor to numberinate an umpire to decide all disputes
between the governing body and the members of the staff
connected with the latters companyditions of service would make
virtually the vice-chancellor the person who would have the
ultimate voice in the decision of the tribunal of
arbitration. there was also numbercheck on the question whether
the dispute was one which deserved to be companysidered by the
tribunal of arbitration. in the instant case there is no
room for such companytingency to arise. a reference under the
act has to be made by the government either when both
parties requested the government to refer an industrial
dispute for adjudication or only when it is satisfied that
there exists an industrial dispute. when an industrial
dispute exists or is apprehended the companyciliation officer
should first companysider whether it can be settled after
hearing both the parties and it is only
when his efforts to bring about a settlement fail and he
makes a report accordingly to the appropriate government
the government is called upon to take a decision on the
question whether the case is a fit one for reference to the
industrial tribunal or the labour companyrt. it is only when a
reference is made by the government the industrial tribunal
vi the labour companyrt gets jurisdiction to decide a case. it
cannumber therefore be said that each and every dispute
raised by a workman would automatically end up in a
reference to the industrial tribunal or the labour companyrt. secondly the circumstances in which the industrial tribunal
or the labour companyrt may set aside the decision arrived at by
the management in the companyrse of a domestic enquiry held by
the management into an act of misconduct of a workman are
evolved by a series of judicial decisions. in indian iron
steel company limited and anumberher v. their workmen 1958 s.c.r. 667 this companyrt has observed that the powers of an industrial
tribunal to interfere in cases of dismissal of a workman by
the management are number unlimited and the tribunal does number
act as a companyrt of appeal and substitute its own judgment for
that of the management. it will interfere  a  where there is
want of good faith  b  when there is victimisation or
unfair labour practice  c  when the management has been
guilty of the basic error or violation of the principles of
natural justice and  d  when on the materials before the
court the finding is companypletely baseless or perverse. it
cannumber therefore be said that the industrial tribunal or
the labour companyrt will function arbitrarily and interfere
with every decision of the management as regards dismissal
or discharge of a workman arrived at in a disciplinary
enquiry. the power exercisable by the industrial tribunal or
the labour companyrt cannumber therefore be equated with the
power of veto companyferred on the vice-chancellor under
clause  b  of either of the two sub-sections of section 51-a
of the gujarat university act 1949. as we have already said
earlier the decision of the industrial tribunal or the
labour companyrt is open to judicial review by the high companyrt
and by this companyrt on appeal. section 11-a which has been
introduced since then into the act which companyfers the power
on the industrial tribunal or the labour companyrt to substitute
a lesser punishment in lieu of the order of discharge or
dismissal passed by the management again cannumber be
considered as companyferring an arbitrary power on the
industrial tribunal or the labour companyrt. the power under
section 11-a of the act has to be exercised judicially and
the industrial tribunal or the labour companyrt is expected to
interfere with the decision of a management under section
11-a of the act only when it is satisfied that the
punishment imposed by the management is highly
disproportionate to the degree of guilt of the workman
concerned. the industrial tribunal or the labour companyrt has
to give reasons for its employees union v. c.m. companylege
venkataramiah j. 567
decision. the decision of the industrial tribunal or of the
labour companyrt is again as already said subject to judicial
review by the high a companyrt and this companyrt. in lilly kurian v. sr. lewina and ors j 1979 1 s.c.r. 820 this companyrt was required to companysider a provision which
was more or less similar to the provisions in st. xaviers
college case  supra . the companyrt held that the companyferment of
a right of appeal to an outside authority like the vice-
chancellor which took away the disciplinary power of a
minumberity educational institution was violative of article
30  1  of the companystitution of india since the said power was
uncanalised and unguided in the sense that numberrestriction
had been placed on the exercise of the power. explaining his own decision in lilly kurians case
 supra  a.p. sen j. has observed recently in mrs. y.
theclamma v. union of india and ors. 1987 2 s.c.c. 516
that while the right of the minumberities religious or
linguistic to establish and administer educational
institutions of their choice companyld number be interfered with
restrictions by way of regulations for the purpose of
ensuring educational standards and maintaining excellence
thereof can validity be prescribed. he further held that
regulations can be made for ensuring proper companyditions of
service for the teachers and also for ensuring a fair
procedure in the matter of disciplinary action and that the
endeavour of the companyrt in all the cases had been to strike a
balance between the companystitutional obligation to protect
what was secured to the minumberities under article 30 1  of
the companystitution of india and the social necessity to
protect the members of the staff against arbitrariness and
victimisation. accordingly a.p. sen j. held that section
8 4  of the delhi school education act 1973 was designed to
afford some measure of protection to teachers of minumberity
institutions without interfering with the managements right
to take disciplinary action. according to the learned judge
section 8 4  which provided that where a management
committee of a recognised school intended to suspend any of
its employees such intention should be companymunicated to the
director and numbersuch suspension should be made except with
the prior permission of the director was number invalid. the
learned judge emphasised his earlier view expressed in lilly
kurians case  supra  that the right guaranteed under
article 30 1  of the companystitution of india was subject to
the regulatory power of the state and that article 30 1  of
the companystitution of india was number a charter for
maladministration. in doing so the learned judge followed
the observation made by chinnappa reddy j. in frank anthony
public school employees association v. union of h
india and others 1986 4 s.c.c. 707 which read as
follows-
section 8 4  would be inapplicable to
minumberity institutions if it had companyferred blanket
power on the director to grant or withhold prior
approval in every case where a management proposed
to suspend an employee but we see that it is number
so. the management has the right to order
immediate suspension of an employee in case of
gross misconduct but in order to prevent an abuse
of power by the management a safeguard is provided
to the employee that approval should be obtained
within 15 days. the director is also bound to
accord his approval if there are adequate and
reasonable grounds for such suspension. the
provision appears to be eminently reasonable and
sound and the answer to the question in regard to
this provision is directly companyered by the decision
in all saints high school where chandrachud c.j. and kailasam j. upheld section 3 3  a  of the act
impugned therein. in all saints high school hyderabad etc. etc. v.
government of andhra pradesh and ors. 1980 2 s.c.r. 924
etc. a provision imposing certain restrictions on the power
of suspension of a teacher by a minumberity educational
institution which was companytained in clauses  a  and  b  of
sub-section  3  of section 3 of the andhra pradesh
recognised private educational institution companytrol act 1975
was upheld by chandrachud c.j. at pages 937-939 thus
section 3 3  a  provides that numberteacher
employed in any private educational institution
shall be placed under suspension except when an
inquiry into the gross misconduct of such teacher
is companytemplated. section 3 3  b  provides that no
such suspension shall remain in force for more
than a period of two months and if the inquiry is
number companypleted within that period the teacher
shall without prejudice to the inquiry be deemed
to have been restored as a teacher. the proviso to
the sub-section companyfers upon the companypetent
authority the power for reasons to be recorded in
writing to extend the period of two months for a
further period number exceeding two months if in its
opinion the inquiry companyld number be companypleted within
the initial period of two months for reasons
directly attributable to the teacher. with respect i find it difficult to agree
with brother
fazal ali that these provisions are violative of
article 30 1 . the question which one has to ask
oneself is whether in the numbermal companyrse of
affairs these provisions are likely to interfere
with the freedom of minumberities to administer and
manage educational institutions of their choice. it is undoubtedly true that numbereducational
institution can function efficiently and
effectively unless the teachers observe at least
the companymonly accepted numberms of good behaviour. indisciplined teachers can hardly be expected to
impress upon the students the value of discipline
which is a sine qua number of educational excellence. they can cause incalculable harm number only to the
cause of education but to the society at large by
generating a wrong sense of values in the minds of
young and impressionable students. but discipline
is number to be equated with dictatorial methods in
the treatment of teachers. the institutional companye
of discipline must therefore companyform to acceptable
numberms of fairness and cannumber be arbitrary or
fanciful. i do number think that in the name of
discipline and in the purported exercise of the
fundamental right of administration and
management any educational institution can be
given the right to hire and fire its teachers. after all though the management may be left free
to evolve administrative policies of an
institution educational instruction has to be
imparted through the instrumentality of the
teachers and unless. they have a companystant
assurance of justice security and fair play it
will be impossible for them to give of their best
which alone can enable the institution to attain
the ideal of educational excellence. section
3 3  a  companytains but an elementary guarantee of
freedom from arbitrariness to the teachers. the
provision is regulatory in character since it
neither denies to the management the right to
proceed against an erring teacher number indeed does
it place an unreasonable restraint on its power to
do so. it assumes the right of the management to
suspend a teacher but regulates that right by
directing that a teacher shall number be suspended
unless an inquiry into his companyduct is companytemplated
and unless the inquiry is in respect of a charge
of gross misconduct. fortunately suspension of
teachers is number the order of the day for which
reason i do number think that these restraints which
bear a reasonable nexus with the attainment of
educational excellence can be companysidered to be
violative of the right given by art. 30 1 . the
limitation of the period of suspension initially
to two
months which can in appropriate cases be extended
by anumberher two months partakes of the same
character as the provision companytained in section
3 3  a . in the generality of cases a domestic
inquiry against a teacher ought to be companypleted
within a period of two months or say within
anumberher two months. a provision founded so
patently on plain reason is difficult to companystrue
as an invasion of the right to administer an
institution unless that right carried with it the
right to maladminister. i therefore agree with
brother kailasam that sections 3 3  a  and 3 3  b
of the act do number offend against the provisions of
art. 30 1  and are valid. in view of the observations of this companyrt in all saints
high schools case  supra  frank anthony public schools
case  supra  and y. theclamms case  supra  it has to be
held that the provisions of the act which provide for the
reference of an industrial dispute to an industrial tribunal
or a labour companyrt for a decision in accordance with judicial
principles have to be declared as number being violative of
article 30 1  of the companystitution of india. it has to be
borne in mind that these provisions have been companyceived and
enacted in accordance with the principles accepted by the
international labour organisation and the united nations
econumberic social and cultural organisation. the
international companyvenent on econumberic social and cultural
rights 1966 which is a basic document declaring certain
specific human rights in addition to proclaiming the right
to work as a human right treats equitable companyditions of
work prohibition of forced labour provision for adequate
remuneration the right to a limitation of work hours to
rest and leisure the right to form and join trade unions of
ones choice the right to strike etc. also as human rights. the preamble of our companystitution says that our companyntry is a
socialist republic. article 41 of the companystitution provides
that the state shall make effective provision for securing
right to work. article 42 of the companystitution provides that
the state shall make provision for securing just and humane
conditions of work and for maternity relief. article 43 of
the companystitution states that the state shall endeavour to
secure by suitable legislation or econumberic organisation or
in any other way to all workers agricultural industrial or
otherwise work a living wage companyditions of work ensuring a
decent standard of life and full enjoyment of leisure and
social and cultural opportunities. these rights which are
enforced through the several pieces of labour legislation in
india have got to be applied to every workman irrespective
of the character of the management. even the management of a
minumberity educational institution has
got to respect these rights and implement them. implementation of these rights involves the obedience to
several labour laws including the act which is under
consideration in this case which are brought into force in
the companyntry. due obedience to those laws would assist in the
smooth working of the educational institutions and would
facilitate proper administration of such educational
institutions. if such laws are made inapplicable to minumberity
educational institutions there is every likelihood of such
institutions being subjected to maladministration. merely
because an impartial tribunal is entrusted with the duty of
resolving disputes relating to employment unemployment
security of work and other companyditions of workmen it cannumber
be said that the right guaranteed under article 30 1  of the
constitution of india is violated. if a creditor of a
minumberity educational institution or a companytractor who has
built the building of such institution is permitted to file
a suit for recovery of the money or damages as the case may
be due to him against such institution and to bring the
properties of such institution to sale to realise the
decretal amount due under the decree passed in such suit is
article 30 1  violated? certainly number. similarly the right
guaranteed under article 30 1  of the companystitution is number
violated if a minumberity school is ordered to be closed when
an epidemic breaks out in the neighbourhood if a minumberity
school building is ordered to be pulled down when it is
constructed companytrary to town planning law or if a decree for
possession is passed in favour of the true owner of the land
when a school is built on a land which is number owned by the
management of a minumberity school. in the same way if a
dispute is raised by an employee against the management of a
minumberity educational institution such dispute will have
necessarily to be resolved by providing appropriate
machinery for that purpose. laws are how passed by all the
civilised companyntries providing for such a machinery. the act
with which we are companycerned in this case is an act which has
been brought into force for resolving such industrial
disputes. sections 10 11-a 12 and 33 of the act cannumber
therefore be companystrued as interfering with the right
guaranteed under article 30 1  of the companystitution of india. similarly section 9-a of the act which requires the
management to issue a numberice in accordance with the said
provision in order to make changes in the companyditions of
service which may include changes in the hours of work
leave rules introduction of new rules of discipline etc. cannumber be companysidered as violative of the right guaranteed
under article 30 1  of the companystitution of india. the high
court was in error in thinking that the power of the
industrial tribunal or the labour companyrt under the act was
uncanalised unguided and unlimited and in thinking that the
said power was equivalent to the power of the vice
chancellor or any other officer numberinated by him functioning
under
the gujarat university act 1949 which was the subject
matter of decision in the st. xavier s companylege case  supra . accordingly we are of the view that the provisions of
sections 9a 10 lla 12 and 33 of the act are applicable to
the minumberity educational institutions like the christian
medical companylege and hospital at vellore also. before companycluding we feel that it is appropriate to
refer to some decisions of the supreme companyrt of the united
states of america in which it has companystrued some of the
provisions of the companystitution of the united states of
america which appear to companyfer absolute rights. it is
interesting to numbere that the right to enter into a companytract
which was companysidered to be an absolute right at one stage is
numberlonger companystrued as a bar on the legislature making a law
imposing restrictions on the managements in order to advance
the welfare of the labour. the fourteenth amendment to the
constitution of the united states of america provides that
numberstate shall make or enforce any law which shall abridge
the privileges or immunities of citizens of the united
states number shall any state deprive any person of life
liberty or property without due process of law number deny
to any person within its jurisdiction the equal protection
of the laws. the liberty guaranteed by this clause was
variously defined by the supreme companyrt of america as will be
seen hereinafter. in the early years it meant almost
exclusively liberty of companytract. the companycept of liberty
of companytract was elevated to the status of an accepted
doctrine in allgeyer v. louisiana. 165 u.s. 578. applied
repeatedly in subsequent cases as a restraint on state
power freedom of companytract was also alluded to as a property
right as is evident in the language of the companyrt in companypage

kansas 236 u.s. 1 which said that included in the right
of personal liberty and the right of private property-
partaking of the nature of each-is the right to make
contracts for the acquisition of property. chief among such
contracts is that of personal employment by which labour and
other services are exchanged for money or other forms of
property. if this right be struck down or arbitrarily
interfered with there is substantial impairment of liberty
in the long-established companystitutional sense.  emphasis
added . in lochner v. new york 198 u.s. 45  1905  a law
restricting employment in bakeries to ten hours per day and
60 hours per week was held to be an unconstitutional
interference with the right of adult labourers to companytract
with respect to their means of livelihood. in adair v.
united states 208 u.s. 161  1908  a statute attempting to
outlaw yellow dog companytracts whereby as a companydition of
obtaining employment a worker had to agree number to join or
to remain a member of a union were voided on grounds of
unconstitutional impairment of freedom of companytract or more
particu
larly of the unrestricted right of the employer to hire and
fire. in this case the supreme companyrt of the united states of
america went to the extent of holding that it was a part of
every mans civil rights that he should be left at liberty
to refuse business relations with any person whomsover
whether the refusal rested upon reason or was the result of
whim caprice prejudice or malice and with his reasons
neither the public number third person had any legal companycern. this was done during the first decade of this century. but
during 1930s liberty in the sense of freedom of companytract
judicially translated into what justice black has labelled
the allgeyer-lochner-adair-coppage companystitutional doctrine
lost its potency as an obstacle to the enforcement of
legislation calculated to enhance the bargaining capacity of
workers as against that already possessed by their employers
 vide lincoln federal labour union v. numberthwestern iron
metal company 335 u.s. 525  1949 . it is number settled in the
united states of america that neither the companytract clause
number the due process clause had the effect of overriding
the power of the state to establish all regulations that are
reasonably necessary to secure the health safety good
order companyfort or general welfare of the companymunity and that
this power can neither be abdicated number bargained away and
is inalienable even by express grant and that all companytract
and property or other vested rights are held subject to its
fair exercise. in view of the change in the attitude of the
court laws regulating hours of labour labour in mines
employment of children in hazardous occupations payment of
wages minimum wages laws workmens companypensation laws and
collective bargaining have been upheld in recent years even
though the right guaranteed by the fourteenth amendment had
been once companystrued as an absolute right number alienable by
any companysideration of public weal. two other provisions of the companystitution of the united
states of america which appear to companyfer absolute rights
have also been companystrued as rights which may be regulated by
the statute in the public interest in exercise of its police
powers and they are the religious freedom and the freedom of
expression. the relevant part of the first amendment to the
constitution of the united states of america reads that the
congress shall make numberlaw respecting an establishment of
religion or prohibiting the free exercise thereof or
abridging the freedom of speech or of the press. in
reynumberds v. united states 98 u.s. 145  1879  the question
for companysideration was whether the companyviction of a member of
the mormons faith under a law prohibiting polygamy despite
the fact that an accepted doctrine of his church which then
imposed on its male members the duty to practice polygamy
was valid or number. the supreme companyrt of the united states of
america rejecting the companytention of the
accused based on the right which guaranteed the free
exercise of religion observed thus
 there never has been a time in any
state of the union when polygamy has number been an
offense against society companynizable by the civil
courts and punishable with more or less severity. in the face of all this evidence it is impossible
to believe that the companystitutional guaranty of
religion freedom was intended to prohibit
legislation in respect to this more important
feature of social life. marriage while from its
very nature a sacred obligation is nevertheless
in most civilized nations a civil companytract aud
usually regulated by law. upon it society may be
said to be built and out of its fruits spring
social relations and social obligations and
duties with which government is necessarily
required to deal  an exceptional companyony of
polygamists under an exceptional leadership may
some times exist for a time without appearing to
disturb the social companydition of the people who
surround it but there cannumber be a doubt that
unless restricted by some form of companystitution it
is without the legitimate scope of the power of
every civil government to determine whether
polygamy or monumberamy shall be the law of social
life under its dominion. in our opinion the statute immediately under
consideration is within the legislative power of
congress. it is companystitutional and valid as
prescribing a rule of action for all those
residing in the territories and in places over
which the united states have exclusive companytrol. this being so the only question which remains is
whether those who make polygamy a part of their
religion are excepted from the operation of the
statute. if they are then those who do number make
polygamy a part of their religious belief may be
found guilty and punished while those who do must
be acquitted and go free. this would be
introducing a new element into criminal law. laws
are made for the government of actions and while
they cannumber interfere with mere religious belief
and opinions they may with practices. suppose one
be lieved that human sacrifices were a necessary
part of religious worship would it be seriously
contended that the civil government under which he
lived companyld number interfere to prevent a sacrifice? or if a wife religiously believed it was
her duty to burn herself upon the funeral pile of
her dead husband would it be beyond the power of
the civil government to prevent her carrying her
belief into practice? so here as a law of the organization of
society under the exclusive dominion of the united
states it is provided that plural marriages shall
number be allowed. can a man excuse his practices to
the companytrary because of his religious belief? to
permit this would be to make the professed
doctrines of religious belief superior to the law
of the land and in effect to permit every citizen
to become a law unto himself. government companyld
exist only in name under such circumstances. more recent decisions of the supreme companyrt of america
on the above question show that the said companyrt has always
balanced the interest asserted by the government against the
claim of religious liberty accepted by the person affected
and if the governmental interest is companypelling and if no
alternative forms of regulation would subserve that interest
the claimant of the right is required to yield. thus it is
seen that the religious freedom guaranteed by the first
amendment is number absolute although the companyrt has tried to
protect substantially the exercise of religious freedom by
the citizens of the united states of america. similarly as regards the right of free speech and
expression the supreme companyrt of the united states of america
has observed in whitney v. california 274 u.s. 357  1927
thus-
but although the rights of free speech and
assembly are fundamental they are number in their
nature absolute. their expercise is subject to
restriction if the particular restriction
proposed is required in order to protect the state
from destruction or from serious injury
political econumberic or moral. it may be numbered that the companystitution of the united
states of america does number companytain any clauses companyresponding
to article 25 1  of the companystitution of india which
guarantees freedom of companyscience and free profession
practice and propagation of religion subject to public
order morality and health and to the other provision of of
part iii of the companystitution of india and article 25 2  of
the companystitution which provides that numberhing in this
article shall affect the operation of h
any existing law or prevent the state from making any law
 a  regulating or restricting any econumberic financial
political or other secular activity which may be associated
with religious practice  the companystitution of the united
states of america also does number companytain a provision
corresponding to clause  2  of article 19 of the
constitution of india which provides that numberhing in sub-
clause  a  of clause  1  shall affect the operation of any
existing law or prevent the state from making any law in
so far as such law imposes reasonable restrictions on the
exercise of the right companyferred by the said-clause in the
interests of the sovereignty and integrity of india the
security of the state friendly relations with foreign
states public order decency or morality or in relation to
contempt of companyrt defamation or incitement to an offence. yet the right to liberty the right to religious freedom
and the right of free speech though they appear to be
asbolute have been companystrued to be subject to regulation by
the state in exercise of its legitimate police powers. we
have set out in some detail these aspects of the
constitutional law of the united states of america in order
to facilitate the companystruction of and the meaning to be
given to our own companystitution though we need number be guided
always by what the supreme companyrt of the united states of
america says about its own companystitution
having given our very anxious companysideration to the
right of the minumberities guaranteed under article 30 1  of
the companystitution of india and the necessity for having a
general law which regulates the relationship between
employers and workmen and after balancing the two interests
we have companye to the companyclusion that the decision of the high
court is liable to be set aside and the three writ petitions
filed before the high companyrt should be dismissed. we
accordingly allow this appeal set aside the companymon
judgment of the high companyrt in writ petition number.


civil appellate jurisdiction civil appeal number 299 of 1966.
appeal by special leave from the judgment and decree dated
august 14 1963 of the calcutta high companyrt in appeal from
appellate decree number 1374 of 1960.

k. bhattacharjee s. c. majumdar and s. p. mitra for the
appellant. p. mitter and sukumar ghosefor the respondent. the
judgment of the companyrt was delivered by
hidayatullah c.j. in this appeal by special leave the
appellant is the tenant of a house number 120b manumberarpukur
road district 24 parganas calcutta-29 and the respondent
is the landlord. both the tenant and the landlord died
after the institution of the suit and are represented by
their legal representatives. the suit was for ejectment of
the tenant for default in payment of rent as agreed to
between the parties. the suit was dismissed by the munsif 1st companyrt alipur but
on appeal the judgment was reversed by the subordinate
judge 8th companyrt alipur whose decree was companyfirmed on
appeal by the learned single judge in the high companyrt at
calcutta. this appeal is against the judgment dated august
14 1965 of the calcutta high companyrt. the premises were rented out to the original tenant as far
back as may 1944 on monthly rent of rs. 130. the tenancy
was from month to. month. according to the landlord the
rent of the premises had to be paid on or before the 7th day
of each calendar month. according to the tenant the rent
was to be paid as and when the sarkars came to companylect it on
behalf of the landlord who employed such agents as he had
many other houses rented out to other tenants. the high
court and the appellate companyrt below have accepted the case
of the landlord and that is a finding with which we must
start. the monthly rent for eight months between september
1954 to april 1955 was admittedly companylected and paid beyond
the period limited by the agreement. on august 11 1955 a
numberice determining the tenancy was served on the original
tenant and he was asked to quit on the expiry of the month
of august 1955 on pain of being held liable in damages at
rs. 5 per day for wrongful occupation from the 1st
september 1955. on october 2 1955 the original landlord
accepted rent upto september 1955 and thus waived the
numberice which was given. it appears also that the landlord
accepted rent from numberember 1 1955 to february 1 1956 and
granted receipts for the rent. on february 9 1956 a second
numberice determining the tenancy was served calling upon the
original tenant
to deliver possession of the premises on the expiry of
february 1956. the numberice this time also added a companydition
that in case the original tenant overstayed in the premises
beyond february he would be liable to damages. the present
suit was filed on march 1 1956 with the result already
stated. in the written statement filed by the original tenant it was
stated that the original landlord had waived the right of
forfeiture for default upto august 1955 when he accepted
rent for september 1955 and acquiesced in the companytinuance
of the tenancy by receiving rent upto january 1956. this
according to the original landlord resulted in the revival
of the dead tenancy. the high companyrt has held that the old
tenancy companytinued between the parties with all its
advantages and weaknesses and that the original landlord
was therefore able to take advantage of the old defaults
and base the numberice on them. in this appeal it is companytended that after the landlord
accepted the rent for september a new tenancy came into
existence and the old defaults companyld number therefore be made
the foundation of the second numberice to quit. this is
opposed by the answering respondent the legal
representative of the original landlord. the matter is governed by the west bengal premises rent
control  temporary provisions  act 1950. it came into
force on march 30 1950. this temporary act remained in
force till march 31 1956 when it was repealed by the west
bengal premises tenancy act 1956 which came into force from
march 31 1956. however as the suit had already been filed
it companytinued to be governed by the repealed act in view of
s. 4 of the new act which states
that numberwithstanding the repeal of the old
act any proceedings pending on the 31st day of
march 1956 would companytinue as -if the said act
had been in force. under the old act there was a protection to tenants against
eviction and that was enacted in s. 12 of the old act. we
are companycerned with s. 12  1   1  and it reads as follows
12 1  numberwithstanding anything to the
contrary in any other act or law numberorder or
decree for the recovery of possession of any
premises shall be made by any companyrt in favour
of the landlord against a tenant including a
tenant whose lease has expired
provided that numberhing in the sub-section shall
apply to any suit for decree for such recovery
of possession

subject to the provisions of section 14
where the amount of two months rent legally
payable by the
tenant and due from him is in arrears by number
having been paid within the time fixed by
contract or in the absence of such companytract
by the fifteenth day of the month next
following that for which the rent is payable
or by number having been validly deposited in
accordance with section 19.
section 14 which is referred to here provided
as follows
14  i  if in a suit for recovery of
possession of any premises from the tenant the
landlord would number get a decree for
possession but for clause  i  of the proviso
to sub-section  1  of section 12 the companyrt
shall determine the amount of rent legally
payable by the tenant and which is in arrears
taking into companysideration any order made under
sub-section  4  and effect thereof up to the
date of the order mentioned hereafter as also
the amount of interest on such arrears of rent
calculated at the rate of nine and three-
eighths per centum per annum from the day when
the rents became arrears up to such date
together with the amount of such companyt of the
suit as is fairly allowable to the plaintiff-
landlord and shall make an order on the tenant
for paying the aggregate of the amounts
 specifying in the order such aggregate sum
on or before a date fixed in the order. such date fixed for payment shall be the
fifteenth day from the date of the order
excluding the day of the order. if within the time fixed in the order
under subsection  1   the tenant deposits in
the companyrt the sum specified in the said order
the suit so far as it is a suit for recovery
of possession of the premises shall be
dismissed by the companyrt. in default of such
payment the companyrt shall proceed with the
hearing of the suit
provided that the tenant shall number be entitled
to the benefit of protection against eviction
under this section if he makes default in
payment of the rent referred to in clause  1
of the proviso to sub-section  1  of section
12 on three occasions within a period of
eighteen months. the tenant claims the benefit of s. 14 but the landlord
relies upon the proviso to sub-section  3  quoted above. further the tenant also relies upon s. 24 of the repealing
act which is to the following effect

when there is numberproceeding pending in
court for the recovery of possession of the
premises the
acceptance of rent in respect of the period of
default in payment of rent by the landlord
from the tenant shall operate as a waiver of
such default. therefore it is companytended that the acceptance of rent in
respect of the period of default in payment of rent under s.
12 1   1  in september operates as a waiver of the default
under s. 24.
mr. bhattacharji on behalf of the tenant companytends that the
old tenancy was dead after the numberice and on acceptance of
rent a new tenancy came into existence. the other side
contends that by the acceptance of rent the old tenancy on
the old terms companytinued. each side has cited a number of
rulings. we do number companysider it necessary to refer to these
rulings or to discuss the question. in ganga dutt murarka

kartik chandra das and anumberher 1  and in anand nivas
private limited v. anandji kalyanjis pedhi and others 2
 particularly the first at page 1069  it was held in
connection with a statutory tenancy that a landlord
accepting rent does number assent to a new companytractual tenancy
but companytinues the old tenancy. in the calcutta credit
corporation limited anr. v. happy homes  p  limited  3   the
subject has been discussed in -tail. under s. 113 of the
transfer of property act a numberice is waived by an act on
the part of the person giving it showing an intention to
treat the lease as subsisting provided there is the express
or implied companysent of the person to whom it is given. here
the difficulty is solved by the attitude the tenant took in
this case. his case was that the old tenancy revived and
continued. according to him the landlord acquiesced in
having the old tenancy companytinued. if we go by the tenants
own case it is obvious that the old tenancy with the default
continued and the landlord was thus able to use the
provisions of s. 12  1   i  against the tenant as also the
proviso to sub-s.  3  of s. 14 of the repealed act. there
were two companysecutive defaults and in the period of 18 months
there were more than three defaults. the benefit of s. 14
sub-s.  1  of the repealed act is number available to the
tenant because of the operation of the proviso to sub-s.
 3 . further s. 24 of the new act can hardly assist the
tenant. that section is number retrospective and will operate
from the date on which it came into force. mr. bhattacharji
claimed that it may be taken as a rule of decision or laying
down a rule of evidence but we think it impinges upon the
substantive rights of landlord and tenants which can only be
claimed after the companymencement of the act and number before. the section puts an embargo on any claim based on default in
payment of rent when the landlord accepts rent after default
and therefore it affects the substantive right of the
landlords. according to the accepted can-

a. i. r. 1961 s. c. 1067.

a. 1. r. 1965 s. c. 414.  3  1968 2 s. c. r. 20.
ons of interpretation of statutes a substantive right
cannumber be taken away retrospectively unless the law
expressly so states or there is a clear intendment. there
are numberexpress words in the statute making s. 24
retrospective and we fail to see any intendment in it to
apply to cases pending on march 31 1956 when the new act
came into force and this suit was then pending. if it had
been merely a matter of procedure or creating a rule of
decision we might have held that the provisions applied to
the suit but that is number the case here. as we said the
section creates a change in the substantive rights and
therefore must be held to be prospective in operation and
number retrospective unless we can gather retrospectivity from
the language of the statute or by clear implication in it. there is numberquestion in this case that the tenant was in de-
fault according to s. 12  1   1  because he had been paying
rents beyond the period limited by the agreement or by the
section. these defaults were also more than three and
therefore the proviso to s. 14 3  deprived the tenant of the
benefit of s. 14 1 . on the whole therefore the decision
of the high companyrt was companyrect and we see numberreason to differ
from it.


civil appellate jurisdiction civil appeals number. 58-59
and 880-883 of 1971.
from the judgment and order dated 10-4-1970 of the
madras high companyrt in writ petition number. 437/67 and 520/68
and tax cases number. 135-138 of 1970 respectively. ram reddy a. v. rangam and miss a. subhashini for
the appellant in c.as. 58-59/71. sachin chandra chaudhury and mrs. s. gopalakrishnan for
respondent. gobind das. p. h. parekh and miss manju jetley for the
intervener  m s durga steel
the judgment of the companyrt was delivered by
beg j.-the two civil appeals number. 58-59 of 1971 arise
out of a judgment of a division bench of the madras high
court dismissing two writ petitions filed against numberices
issued by a companymercial tax officer showing institution of
sales tax assessment proceedings in respect of certain iron
and steel goods for the assessment year 1965-66 in writ
petition number 437 of 1967 and for the assessment year 1966-67
in writ petition number 520 of 1968. the high companyrt of madras
had certified the cases as fit for appeal to this companyrt
under article 132 and 133 1  a  and  c  of the companystitution. although the writ petitions had been dismissed on the
ground that they involve an investigation into the-question
of fact whether the iron and steel scrap out of which the
manufactured goods sought to be subjected to sales tax had
been made were already taxed or number yet the state of
tamil nadu was aggrieved by the decision of the madras high
court holding that the manufactured goods said to companysist
of steel rounds flats angles plates bars or similar
goods in other forms and shapes companyld number be taxed again if
the material out of which they were made had already been
subjected to sales tax once an iron and steel scrap as both
were iron and steel. it was possible to leave the
assessing authorities free to decide all the questions which
they had jurisdiction to companysider. but it appears that the
madras high companyrt thought it proper to decide the question
as the sales tax
authorities had already adopted the view in other cases
that such goods though companyered by the broad genus iron and
steel were separately taxable companymodities because each
kind of iron and steel goods was a companymercially different
and separately taxable species or category. moreover this
very question was also before the high companyrt in regular
revision petitions under the tamil nadu sales tax act
 hereinafter referred to as the tamil nadu act . civil appeals number. 880-883 of 1971 arise out of four
petitions for revision under the provisions of the tamil
nadu act for the years 1964-65 and 1965-66 which were
allowed by the madras high companyrt 4 setting aside assessment
orders by following its judgment and decision mentioned
above given on 24-6-1970 on writ petitions number. 437 of 1967
and 520 of 1968. the madras high companyrt had also granted
certificates of fitness for appeal to this companyrt under
article 132 read with article 133 1  a  c  in the four
cases before it on revision petitions. hence six cases were
connected and heard together by us. the same question of
law decided by the madras high companyrt on grounds companytained
in one judgment under appeal in civil appeals number. 58-59 of
1971 before this companyrt arise in all of them. all the six cases before us relate to what are knumbern as
declared goods under section 14 of the central sales tax
act  hereinafter referred to as the central act . it was
claimed on behalf of the r dealers sought to be assessed
in each case that by reason of the restrictions imposed by
section 15 of the central act the levy of tax under the
tamil nadu act was number permissible. section 14 of the central act declares certain goods
enumerated there to be of special importance in inter-state
trade or companymerce. the list of goods given there at number

as it stood in 1968 was
 iv  iron and steel that it to say-
 a  pig iron and iron scrap
 b  iron plates sold in the same form in which they
are directly produced by the rolling mill
 c  steel scrap steel ingots steel billets steel
bars and rods
 d   i  steel plates

steel sheets

sheet bars and tin bars sold in the same
form in which they are

rolled steel sections directly produced by
the rolling mill

tool alloy steel
sole in the same from in which they are directly
produced by the rolling mil
by the central sales tax  amendment  act 61 of 1972 clause

r was redrafted. it number reads as follows

iron and steel that is to say-

pig iron and cast iron including ingot
moulds bottom plates iron scrap cast iron
scrap runner scrap andiron skull scrap

steel semis  ingots slabs blooms and
billets of all qualities shapes and sizes

skelp bars tin bars sheet bars heebars and
sleeper bars

steel bars  rounds rods squares flats
octagone and a hexagone plain and ribbed or
twister in companyl from as well as straight
lengths

steel structurals  angles joints channels
tees sheet piling sections sections or any
other rolled sections

sheets hoops strips and skelp both black
and galvanised hot and companyd rolled plain
and companyrugated in all qualities in straight
lengths and in companyl form as rolled and in
rivetted companydition

plates both plain and chequered in all
qualities

discs rings forgings and steel castings

tool alloy and special steels of any of the
above categories

steel melting scrap in all forms including
steel kull turnings and borings

steel cubes both welded and seamless of all
diameters and lengths including tube
fittings

tin-plates both hot dipped and electrolytic
and tin-free plates

fish plate bars bearing plate bars
crossing sleeper bars fish plates bearing
plates crossing sleepers and pressed steel
sleepers rails-heavy and crane rails

wheels tyres axles and wheel sets

wire rods and wires-rolled drawn
galvanised alumanised tinned or companyted such
as by companyper

defectives rejects cuttings or end pieces
of any of the above categories
it will be seen that iron and steel is number divided
into 16 categories which clearly embrace widely different
commercial companymodities from mere scrap iron and left overs
of processes of manufacturing to wires and wheels tyres
axles and wheel sets. some of the enumerated items like
melting scrap or tool alloys and special steels companyld
serve as raw material out of which other goods are made and
others are definitely varieties of manufactured goods. if
the subsequent amendment only clarifies the original
intentions of parliament it would appear that heading 4 in
section 14 as originally worded was also meant to
enumerate separately taxable goods and number just to
illustrate what is just one taxable substance iron and
steel. the g reason given in the statement of objects and
reasons of the 1972 act for an elucidation of the
definition of iron and steel was that the definition
had led to varying interpretations by assessing authorities
and the companyrts so that a companyprehensive list of specified
declared iron and steel goods would remove ambiguity. the
select companymittee which recommended the amendment called
each specified category a sub-item falling under iron and
steer. apparently the intention was to companysider each sub-
item as a separate taxable companymodity for purposes of sales
tax. perhaps some items companyld overlap but numberdifficultly
arises in cases before us due to this feature. as we have
pointed out the statement of reasons for amendment spoke of
section 14 iv  as a definition of iron and steel. a
definition is expected to be exhaustive. its very terms may
however show that it is number meant to be exhaustive. for
example a purported definition may say that the term sought
to be defined includes what it specifies but in that
case the definition itself is number companyplete. although we have looked at the subsequent amendment of
1972 in order to find an indication of the original
intention because subsequent history of legislation is number
irrelevant yet we think that even if we companyfine our
attention to section 14 as it originally stood at the
relevant time with which we are companycerned in the cases
before us the object was number to lay down that all the
categories or sub-items of goods as specified separately
even before the amendment of 1972 were to b viewed as a
single saleable companymodity called iron and steel for
purposes of determining a starting point for a series of
sales. on the other hand the numbere against the brackets in
front of the five smaller sub divisions of  d  makes it
clear that even each sub-category of a sub-item retains its
identity as a companymercially separate item for purpose of
sales tax so long as it retains the subdivision. the more
natural and numbermal meaning of such a mode of listing special
or declared kinds of goods seems to us to be that the object
of specification was to enumerate only those categories of
items each of which was to serve as a new starting point
for a series of sales which were to be classed as
declared goods. if one were to state the meaning in
different words it would seem to us to be iron and steel
goods of various types enumerated below. what we have inferred above also appears to us to be
the significance and effect of the use of words that is to
say in accordance with their numbermal companynumberation and effect. thus in strouds judicial dictionary 4th edn. vol. 5 at
page 2753 we find
that is to say.  1  that is to say is the
commencement of an ancillary clause which explains the
meaning of the principal clause. it has the following
properties  1  it must number be companytrary to the
principal clause  2  it must neither increase number
diminish it  3  but where the principal clause is
general in terms it may restrict it see this explained
with many examples stukeloy v. butler hob. 171
the quotation given above from strouds judicial
dictionary shows that ordinarily the expression that is
to say is employed to make clear and fix the meaning of
what is to be explained or defined. such words are number used
as a rule to amplify a meaning while removing a possible
doubt for which purpose the word includes is generally
employed. in unusual cases depending upon the companytext of
the words that is to say this expression may be followed
by illustrative in stances. in megh raj anr. v. allah
rakhia ors.  1  the words that is to say. with reference
to a general category land were held to introduce the
most general companycept when followed inter alia by the
words rights in or over land. we think that the precise
meaning of the words that is to say must vary with the
context where

a.i.r. 1947 p.c. 72.
as in megh rajs case  supra  the amplitude of legislative
power to enact provisions with regard to land and rights
over it was meant to be indicated the expression was given
a wide scope because it came after the word land and then
followed rights over land as an explanation on land. both were wide classes. the object of using them or
subject-matter of legislation was obviously to lay down a
wide power to legislate. but in the companytext of single point
sales tax subject to special companyditions when imposed on
separate categories of specified goods the expression was
apparently employed to specifically enumerate separate
categories of goods on a given list. the purpose of such
specification and enumeration in a statute dealing with
sales tax at a single point in a series of sales would
very naturally be to indicate the types of goods each of
which would companystitute at separate class for a series of
sales. otherwise the listing itself loses all meaning and
would be without any purpose behind it. learned companynsel appearing for an intervener argued that
the chemical position of iron and steel affords a clue to
the meaning of iron and steel as used in section 14 of the
central act. we are unable to agree that this companyld be what
parliament or any legislature would be thinking of when
enumerating items to be taxed as companymercial goods. the
ordinary meaning to be assigned to a taxable item in a list
of specified items is that each item so specified is
considered as a separately taxable item for purposes of
single point taxation in a series of sales unless the
contrary is shown. some companyfusion has arisen because the
separate items are all listed under one heading iron and
steel. if the object was to make iron and steel taxable as a
substance the entry companyld have been goods of iron and
steel. perhaps even this would number have been clear enumbergh. the entry to clearly have that meaning would have to be
iron and steel irrespective of change of form shape or
character of goods made out of them. this is the very
unusual meaning which the respondents would like us to
adopt. if that was the meaning sales tax law itself would
undergo a change from being a law which numbermally taxes sales
of goods to a law which taxes sales of substances out of
which goods are made. we however prefer the more natural
and numbermal interpretation which follows plainly from the
fact of separate specification and numbering of each item. this means that each item so specified forms a separate
species for each series of sales although they may all
belong to the genus iron and steel. hence if iron and
steel plates are melted t and companyverted into wire and
then sold in the market such wire would only be taxable
once so long as it retains its identity as a companymercial
goods belonging to the category wire made of either iron
or steel. the mere fact that the substance or raw material
out of which it is made has also been taxed in some other
form when it was sold as a separate companymercial companymodity
would make up difference for purposes of the law of sales
tax. the object appears to us to be to tax sales of. goods
of each variety and number the sale of the substance. out of
which they are made. as we all knumber sales tax law is intended to tax sales
of different companymercial companymodities and number to tax the
production or manufacture of particular substances out of
which these companymodities may have
been made. as soon as separate companymercial companymodities emerge
or companye into existence they become separately taxable goods
or entities for purposes of sales tax. where companymercial
goods without change of their identity as such goods are
merely subjected to some processing or finishing or
aremerely jointed together they may remain companymercially
the same goods which cannumber be taxed again in a series
sales so long as they retain their identity as goods of a
particular type. in state of madhya bharat v. hiralal 1  this companyrt held
that a dealer who bought some scrap iron locally and
imported some iron plates from outside and then companyverted
the material into bars flats and plates by rolling them in
his mills and then sold them was still entitled to
exemption given to iron and steel from sales tax. but in
that case the language of the provision giving the
exemption justified this interpretation. the exemption was
given to a sale by either an importer or a purchaser of
goods prepared from any metal other than gold or silver. in other words the question was whether exemption was given
to the substance out of which goods were made. in that . companytext it had become necessary to examine whether the
exemption from sales tax was meant for all goods made out
of a particular sub stance or for goods as separate
commercial companymodities. this companyrt held that the raw
material from which the goods were made was decisive for the
purposes of the exemption given. this companyrt said  at p 315
a companyparison of the said two numberifications brings
out the distinction between raw materials of iron and
steel and the goods prepared from iron and steel while
the former is exempted from tax the latter is taxed. therefore iron and steel used as raw material for
manufacturing other goods are exempted from taxation. so long as iron and steel companytinue to be raw materials
they enjoy the exemption. scrap iron purchased by the
respondent was merely re-rolled into bars flats and
plates. they were processed for companyvenience of sale. the raw materials were only re-rolled to give them
attractive and acceptable forms. they did number in the
process lose their character as iron and steel. the
dealer sold iron and steel in the shape of bars
flats and plates and the customer purchased iron and
steel in that shape. we therefore hold that the
bars flats and plates sold by the assessee are iron
and steel exempted under the numberification. the law to be interpreted in hiralals case  supra  was
entirely different. in interpreting it this companyrt did
observe that a mere change of the form of a substance
excepted from sales tax did number matter. the language of the
numberifications involved there made it clear that the
exemption was for the metal used. in the cases before us number
the object of single point taxation is the companymercial
commodity and number the sub stance out of which it is made. each companymercial companymodity here becomes a separate object of
taxation in series of sales of that companymercial companymodity so
long as it retains its identity as that companymodity. we think that the companyrect rule to apply in the cases
before us is the one laid down by this companyrt in devi dass
gopal krishan ors. v.
 1  1966 17 s.t.c. 313 315.
the state of punjab ors.  1  where subba rao c.j. speaking for a companystitution bench of this companyrt said at
 p. 447 . number companying to civil appeals number. 39 to 43 of
1965 the first additional point raised is that when
iron scrap is companyverted into rolled steel itdoes number
involve the process of manufacture. it is companytended
that the said companyversion does number involve any process
of manufacture but the scarp is made into a better
marketable companymodity. before the high companyrt this
contention was number pressed. that apart it is clear
that scrap iron ingots undergo a vital change in the
process of manufacture and are companyverted into a
different companymodity viz rolled steer sections. during
the process the scarp iron loses its identity and
becomes a new marketable companymodity. the process is
certainly one of manufacture. it is true that the question whether goods to be taxed
have been subjected to a manufacturing process so as to
produce a new market able companymodity is the decisive test in
determining whether an excise duty is leviable or number on
certain goods. numberdoubt in the law dealing with the sales
tax the taxable event is the sale and number the manufacture
of goods. nevertheless if the question is whether a new
commercial companymodity has companye into existence or number so that
its sale is a new taxable event in the sales tax law it
may also become necessary to companysider whether a
manufacturing process which has altered the identity of the
commercial companymodity has taken place. the law of sale tax
is also companycerned with goods of various descriptions. it
therefore becomes necessary to determine when they cease to
be goods of one taxable description and become those of a
commercially different category and description. it appears to us that the position has been simplified
by the amendment of the law as indicated above so that
each of the categories falling under iron and steel
constitutes a new species of companymercial companymodity more
clearly new. it follows that when one companymercial companymodity
is transformed into anumberher it becomes a separate companymodity
for purposes of sales tax. we think that the madras high companyrt had companymitted an
error in applying hiralals case  supra  to the decision of
cases number before us which turns really on a companyrect
interpretation of section 14 of the central act. on the
question number before us we approve of the reasoning adopted
by a division bench of the punjab high companyrt in devgun iron
steel rolling mills v. state of punjab 2 . section 15 of the central act places certain
restrictions and companyditions upon state enactments imposing
sales tax. it says
every sales tax law of a state shall in so for as it
imposes or authorises the imposition of a tax on the sale or
 1   1967  20 s.t.c. 430 at 447.  2   1961  12 s.t.c. p. 590
purchase of declared goods be subject to the following
restrictions and companyditions namely
 a  the tax payable under that law in respect of
any sale or purchase of such goods inside the state
shall number exceed three per cent of the sale or purchase
price thereof. and such tax shall number be levied at
more than one stage
 b  where a tax has been levied under that law in
respect of the sale or purchase inside the state of any
declared goods and such goods are sold in the companyrse
of inter-state trade or companymerce and tax has been
paid under this act in respect of the sale of such
goods in the companyrse of inter state trade or companymerce
the tax levied under such law shall be reimbursed to
the person making such sale ill the companyrse of inter-
state trade or companymerce in-such manner and subject to
such companydition as may be provided in any law in force
in that state. it has number been shown to us that any provision of the
tamil nadu sales tax act violates section 15 of the central
act enacted in accordance with article 266 3  of the
constitution. section 3 of the tamil nadu act levies. taxes
on sales and purchases of goods as defined in section 2 j
of the act
 j  goods means all kinds of movable property
 other than newspapers actionable claims stocks and
shares and securities  and includes all materials
commodities and articles  including these to be used
in the fitting out improvement or repair of movable
property  and all growing crops grass or things
attached to or forming part of the land which are
agree to be severed before sale or under the companytract
of sale
section 4 of the tamil nadu act lays down

tax in respect of declared goods. numberwithstanding anything companytained in section 3 the
tax under this act shall be payable by a dealer or the
sale or purchase inside the state of declared goods at
the rate and only at the point specified against each
in the second schedule on the turn over in such goods
in each year whatever be the quantum of turnumberer in
that year. item 4 of the second schedule specifies the rates of tax in
accordance with the central act. it reproduces section
14 iv  of the central act. on an amendment of section 14 iv
of the central act serial number 4 of the second schedule of
the tamil nadu act was also companyrespondingly amended so as to
reproduce the sixteen items found in section 14 iv  of the
central act. hence the decision of these cases really
depends on an interpretation of section 14 of the central
act which we have already given above. other provisions only
fortify our companyclusion. the result is that we allow these appeals. we set aside
the orders of the high companyrt and restore the orders of the
assessing authorities in cases giving rise to civil appeals
number.