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1994 Supreme(Pat) 359
PATNA HIGH COURT
K.Venkataswami and Asok Kumar Ganguly JJ.
State Bank Of India
Versus
State Of Bihar
Letter Patent Appeal No. 117 of 1987 ;
Decided On : NOVEMBER 10, 1994
An amendment to a statute and a subsequent notification exempting certain establishments from the purview of the statute, with a deeming provision for immediate effect, will affect pending proceedings before an authority established under the statute, resulting in the loss of jurisdiction of the authority to adjudicate those proceedings.
Headnote:
BIHAR SHOPS AND ESTABLISHMENTS ACT - SECTION 4(2) - NOTIFICATION - JURISDICTION OF AUTHORITY - EFFECT ON PENDING PROCEEDINGS - AMENDMENT OF SCHEDULE - DEEMING PROVISION - INTERPRETATION - LEGAL FICTION - CONSEQUENCES - CHANGE OF LAW DURING PENDENCY OF PROCEEDING - EFFECT ON RIGHTS OF PARTIES.
Fact of the Case:
A complaint was filed under Section 26(2) of the Bihar Shops and Establishments Act, 1953 (the Act) by an employee of the State Bank of India (the Bank) alleging wrongful dismissal. The complaint was filed after the amendment of Section 4(2) of the Act and the issuance of a notification exempting branches of Public Sector Banks from the purview of the Act. The Authority under the Act entertained the complaint and ordered the reinstatement of the employee. The Bank challenged the order before the High Court.
Finding of the Court:
The High Court held that the amendment of Section 4(2) of the Act and the subsequent notification resulted in the immediate amendment of the Schedule to the Act, thereby excluding branches of Public Sector Banks from the purview of the Act. Consequently, the Authority lost its jurisdiction to adjudicate the complaint, which related to an employee of a Public Sector Bank.
Issues: 1. Whether the amendment of Section 4(2) of the Act and the issuance of the notification had retrospective effect, affecting pending proceedings before the Authority. 2. Whether the Authority retained jurisdiction to adjudicate the complaint despite the amendment and notification.
Ratio Decidendi: 1. The Court interpreted the amended Section 4(2) of the Act and the deeming provision in the notification to mean that the amendment came into operation immediately upon publication of the notification. 2. The Court held that the purpose of the amendment was to grant exemption to certain establishments from the operation of the Act, and the deeming provision was intended to give immediate effect to the notification. 3. The Court applied the principle of legal fiction, stating that if a certain state of affairs is deemed to be real, then the inevitable consequences of that state of affairs must also be imagined as real. 4. The Court relied on precedents from the Supreme Court holding that a change in the law during the pendency of a proceeding must be taken into account and will govern the rights of the parties.
Final Decision: The High Court allowed the Bank's appeal, set aside the judgment of the Single Judge, and quashed the order of the Authority reinstating the employee. However, the Court clarified that payments made to the employee under the previous order of the Court during the pendency of the appeal could not be recovered by the Bank.
A.K.Ganguly, J.
1. This Letters Patent Appeal was filed against the judgment dated October 23, 1987 passed by a learned Single Judge in CWJC No. 5433 of 1986.
2. The main point of controversy in the impugned judgment is about the effect of the notification dated August 13, 1985 issued in exercise of power under Section 4(2) of the Bihar Shops and Establishments Act, 1953 (hereinafter referred to as the said Act) on the proceeding pending before the Presiding Officer, Labour Court, Muzaffarpur who is an authority under the said Act.
3. In order to understand the nature of controversy between the parties, it is necessary to note only a few facts.
4. The respondent No. 3 in this appeal joined the services of the State Bank of India (hereinafter referred to as the said Bank) at Balasore sometime in February, 1986. Thereafter on transfer he had come to Muzaffarpur. While respondent No. 3 was working as the then Agent of Muzaffarpur Branch, the management of the said Bank asked respondent No. 3 to explain his conduct relating to detention of some cheques for an unduly long period. As the explanation of respondent No. 3 was not found satisfactory, he was placed under suspension and thereafter charge sheeted. A departmental enquiry followed in which an order of dismissal was passed against him. The appeal against the said order of dismissal was also dismissed. Thereafter respondent No. 3 filed a complaint under Sec. 26(2) of the said Act on or about June 26, 1978 along with a petition for condonation of delay. The said complaint was entertained by the Presiding Officer, Labour Court, Muzaffarpur, an authority under the said Act, and by an order dated October 31, 1986 the said Authority was pleased to hold that the said complaint is maintainable and is not barred by limitation. As such the said Authority passed an order reinstating the respondent No. 3 in the particular post from which he was dismissed and further directed the said Bank to make payment of back wages and benefits including yearly increment which would have been admissible to him, if he would not have been dismissed from service.
5. It is common ground before us that before the said Authority a point was raised about the jurisdiction of the said Authority to pronounce upon the said complaint in view of the notification dated August 13, 1985 whereby the branches of all Public Sector Banks situated in the State of Bihar including the said Bank were exempted from the purview of the said Act. The said notification having been issued on August 13, 1985, the contention of the appellant Bank is that the said Authority ceases to have any jurisdiction to pass the order on October 31, 1986. However, the Authority negatived the said contention and passed the said order of reinstatement of respondent No. 3 in this appeal. Hence the appellant Bank filed a writ petition before this Court challenging, inter alia, the order of the Authority under the said Act, The said writ petition was heard by a learned single Judge and by the impugned judgment dated October 23, 1987 the writ petition was dismissed. In dismissing the writ petition, the learned single Judge, held, inter alia, that the notification in question is not retrospective in character and as such despite the said amendment the Authority retained its jurisdiction to adjudicate the complaint under Sec. 26 of the said Act. The learned single Judge was also pleased to hold that the Authority had power to condone the delay under Sec. 26(4) of the said Act and in doing so discretion has been exercised on correct principles by the said Authority and the same cannot be interfered with in writ jurisdiction.
6. In this appeal before us, the principal question which emerges is whether or not the Authority retains its jurisdiction in view of the amendment in law and the consequential notification in question.
7. In the course of hearing this appeal, we made it clear to the learned counsel for the appellant that in the event we find
