1. Dispute over which government (Central or State) is 'appropriate government' under Industrial Disputes Act for multi-state co-operative bank. (Para 2 , 3 , 4 )
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2007 Supreme(SC) 398
SUPREME COURT OF INDIA
K.G. BALAKRISHNAN, CJI., LOKESHWAR SINGH PANTA & D.K. JAIN, JJ.
BHARAT CO-OPERATIVE BANK (MUMBAI) LTD.PETITIONER:
versus
CO-OPERATIVE BANK EMPLOYEES UNIONRESPONDENT:
Appeal (civil) 1542 of 2007
[Arising out of S.L.P. (Civil) No.8377 of 2005)
Decided on 22/03/2007
The reference to the Banking Regulation Act in the Industrial Disputes Act is 'incorporation by reference.' Thus, subsequent amendments to the parent Act do not apply, and multi-state co-operative banks remain under the jurisdiction of the State Government as the 'appropriate government.'
Headnote:(A) Industrial Disputes Act, 1946 - Sections 2(a) and 2(bb) - Banking Regulation Act, 1949 - Section 5 - Appropriate Government - Definition of “Banking Company” - Whether a multi-state co-operative bank falls under the jurisdiction of the Central Government or State Government - The expression “Banking Company” in Section 2(bb) of the Industrial Disputes Act is a case of legislation by incorporation and not legislation by reference (Paras 2, 13, 21) - Subsequent amendments to the parent Act do not automatically apply to the incorporating Act (Para 14) - When a definition uses the word “means,” it is intended to be exhaustive (Para 22).
(B) Statutory Interpretation - Incorporation by reference vs. Mere reference - Legislation by incorporation is a device to adopt provisions from an existing statute; once incorporated, the provision becomes an integral part of the new statute, and subsequent amendments to the original statute have no effect on the incorporating statute (Paras 14, 19).
Facts of the case:
A multi-state co-operative bank was challenged before a state industrial court regarding the transfer of employees. The bank contended that since it is a banking company operating in multiple states, the Central Government is the “appropriate government” under the Industrial Disputes Act, and thus the state-level labour act was inapplicable. The lower courts held that the state government remained the appropriate government because the bank was not a "company" as per the original definitions.
Findings of Court:
The court found that the definition of “Banking Company” in Section 2(bb) of the Industrial Disputes Act was an instance of incorporation by reference. Consequently, the 1965 amendment to the Banking Regulation Act, which expanded the scope to include co-operative banks, does not apply to the Industrial Disputes Act.
Issues: Whether the definition of “Banking Company” in Section 2(bb) of the Industrial Disputes Act, 1946, constitutes legislation by incorporation or mere reference, and whether subsequent amendments to the Banking Regulation Act, 1949, regarding co-operative banks, would change the “appropriate government” to the Central Government.
Ratio Decidendi: The court reasoned that the use of the phrase “means... and includes” in Section 2(bb) of the Industrial Disputes Act indicates an exhaustive definition. Because this is legislation by incorporation, the definition of “Banking Company” must be read as it existed on the date of insertion. A co-operative bank does not meet the original 1949 definition of a “company” transacting banking business. Therefore, the State Government is the appropriate government for such institutions.
Result: Appeal fails and is dismissed accordingly.
Legal Category Hierarchy
- administrative law
- practice and procedure
Table of Contents
2. Bank argued Central Government is appropriate; respondent argued State Government based on interpretation of 'Banking Company' definition. (Para 8 , 9 , 4 , 5 )
3. The reference to Banking Regulation Act in Section 2(bb) of ID Act is legislation by incorporation, not by reference. (Para 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 )
4. Definition of 'Banking Company' in ID Act is exhaustive; subsequent amendments to BR Act do not apply to ID Act. (Para 21 , 22 , 23 , 24 , 25 , 26 , 27 )
5. Appeal dismissed; State Government held to be appropriate government for multi-state co-operative bank under ID Act. (Para 29 , 30 )
6. What is the effect of a statutory definition using both 'means' and 'includes'?
The definition is exhaustive and hard-and-fast; only meanings explicitly stated are included, with no scope for expansion. (Para 22 )
7. What is the distinction between legislation by incorporation and legislation by mere reference?
Incorporation brings the referred provision as a fixed part of the new statute, unaffected by later amendments; mere reference adopts the provision as amended from time to time. (Para 14 , 15 , 16 , 17 , 18 , 19 , 20 )
8. Can subsequent amendments to a parent statute affect a later statute that incorporated its provisions?
No. Once a provision is incorporated by reference, later amendments or repeal of the parent statute do not affect the incorporating statute. (Para 14 , 15 , 16 , 17 )
9. In relation to a multi-state co-operative bank, is the Central Government the 'appropriate government' under the Industrial Disputes Act?
No. The State Government is the appropriate government because such banks are not 'Banking Companies' under Section 2(bb) of the ID Act. (Para 24 , 27 , 29 )
10. What are the exceptions to the rule that incorporated provisions are not affected by later amendments?
Exceptions apply when the statutes are supplemental, in pari materia, the amendment is necessary to make the later act workable, or the amendment expressly applies to the later act. (Para 25 , 26 )
JUDGMENT:
D.K. JAIN, J.:
Leave granted.
2. In relation to a Multi-State Co-operative Bank carrying on business in more than one State, which government Central or State, is the "appropriate government" for the purposes of the Industrial Disputes Act, 1946 (for short "the ID Act"), is the short question for consideration in this appeal?
3. The Appellant-Bank (hereinafter referred to as "the Bank") was originally registered under the Maharashtra State Co-operative Societies Act, 1960. As the Bank had a number of branches outside Maharashtra, subsequently, it got registered under the Multi-State Co-operative Societies Act, 1984. It is in the banking business and is governed by the provisions of the Banking Regulation Act, 1949 (for short "the BR Act"). The respondent is a trade union and represents workmen employed in the Bank.
4. Mainly aggrieved by transfer of eleven employees from one place to another, alleging it as an act of victimisation, the respondent filed a complaint against the Bank under Section 28 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (for short "the MRTU & PULP Act"), along with an application for interim relief, before the Industrial Court at Mumbai. While resisting the complaint, the Bank raised certain preliminary issues of jurisdiction and maintainability of the complaint under the MRTU & PULP Act. The plea of the Bank was that as it was engaged in the business of banking and is a Banking Company as defined in Clause (c) of
Section 5 of the BR Act, the appropriate government would be the Central Government and therefore, the provisions of the MRTU & PULP Act, a State Act, were not applicable. The Industrial Court upheld the objection and ordered that the complaint may be returned to the respondent for seeking relief before an appropriate forum.
5. The respondent questioned the validity of the said order by preferring a writ petition in the High Court.
Allowing the writ petition, the learned single Judge came to the conclusion that for the "appropriate Government" to be the Central Government it was necessary that the Bank
must be a Company incorporated under the Companies Act, 1956, which requirement was missing in the present case. He observed, that even though the respondent may be carrying on banking business, yet it is not a Company as defined under Section 5 (d) of the BR Act. Inter-alia, holding that the definition of Banking Company would not include
a Co-operative Bank, which would be regulated under the provisions of the Maharashtra State Co-operative Societies Act, the learned Judge set aside the order of the Industrial Court and remanded the matter back to that Court for decision on merits.
6. Being aggrieved, the Bank filed a Letters Patent Appeal before the Division Bench. Inter-alia, observing that Section 2(bb) of the ID Act is an instance of legislation by incorporation and not legislation by reference and, therefore, the amendments made in the BR Act after 1949 cannot be read into the ID Act, Division Bench came to the conclusion that the appropriate Government in the present case would be the State Government. In other words, the Division Bench held that for the purpose of deciding which is the "appropriate government" the expression "Banking Company" will have to be read, as it existed in BR Act of 1949 and that the subsequent amendments made vide Banking Regulation Act, 1965 had to be ignored. Being aggrieved, the Bank is before us by special leave.
7. We have heard Mr. Jamshed Cama, learned senior counsel appearing on behalf of the Bank and Mr. Chander Uday Singh, learned senior counsel on behalf of the respondent.
8. On behalf of the appellant it was contended that Section 2(bb) of the ID Act creates its own corporate entity, i.e., multi-State Banking Company and reference to the BR Act is for the limited purpose of identifying one kind of banking institution it brings in. Thus, there is no question of such multi-State Banking C
