Judgement

GAJENDRAGADKAR, C.J.I. : The appellant, Salem Erode Electricity Distribution Co. Ltd., is a licencee under the Indian Electricity Act, 1910, and its business consists in buying electrical energy in bulk from the State Electricity Board of Madras and selling it to consumers in Salem and Erode and certain rural districts in the State of Madras. For the purpose of carrying on this business, the appellant has an industrial establishment at Salem.

2. In or about 1940, when the number of the appellant s consumers was about 3,000, and that cf its workmen about 45, the appellant framed certain terms and conditions of its workmen s employment. Amongst these were included terms about leave and holidays. Later, when the Industrial Employment (Standing Orders) Act, 1946 (No. 20 of 1946) (hereinafter called the Act ) came into fore, the provisions as to leave and holidays which had been introduced by the appellant in the terms and conditions of the employment of its workmen, were embodied in the appellant s Standing Orders which were certified under the relevant provisions of the Act in or about 1947. The said terms read thus :-

"Standing Order 5 (b) - The number of holidays to be granted to the workmen and the days which shall be observed as holidays by the Establishment shall be regulated in accordance with the Factories Act, 1948 or other relevant law for time being in force and the custom or usage of the Establishment, viz., holidays under the Negotiable Instruments Act. 1881 and festival holidays peculiar to this locality which are being given.

Standing Order 10 (a) - Leave will be given in accordance with the law and existing practice provided the leave facilities now available to the worker are not curtailed in any manner."

3. The proceedings which have give rise to the present appeal by special leave between the appellant and the respondents, its employees, began with the application made by the appellant on the 6th October, 1960, before the Certifying Officer, Madras, for the amendment of the certified Standing Orders to which we have just referred. By its application, the management of the appellant wanted the said Orders to read thus:-

"Standing Order 5 (b) - For all workmen who have joined service prior to ........ holidays under the Negotiable Instruments Act, 1881, and festival holiday of one day per year which day may be chosen by the workmen shall be given. For all workmen who have joined on and after ....... holidays under the Madras Industrial Establishments (National and Festival holidays) Act, 1958, shall be given."

"Standing Order 10 (a) - Leave will be given to all employees who are appointed on and after ...... in accordance with the provisions of the Madras Shops and Establishments Act, 1947 or any statutory modification thereof (irrespective of whether this Act applies or not to any category of employees or employees). Provided, however, that for all employees who have been confirmed prior to the above said date, viz ....... The leave facilities now available are not curtailed in any manner."

4. It is relevant to mention the background of the present application. The appellant believed that the urgent need for increased production and for increased supply of electrical energy could be met if the existing rules embodied in Standing Orders 5 (b) and 10 (a) were suitably modified; and so, the appellant wanted to make the change in the said two Standing Orders on the lines indicated by it in its application to the Certifying Officer. It appears that these Rules were introduced by the appellant on the 1st October, 1960, and were embodied in the contracts of services of new entrants who joined the appellant s employment as from that date. In fact, they were agreed to by such new entrants. In order to regularise the steps taken by the appellant by revising the relevant Rules in respect of the new entrants to its employment, the appellant made the present application.

5. The change proposed to be made by the appellant i