Special Rules like Standing Orders override general CCA Rules, 1965: Supreme Court reiterates

Supreme Court: In twin appeals filed by the Union of India challenging the order passed by the Division Bench of Andhra Pradesh High Court allowing writ petition to set aside order passed by the Central Administrative Tribunal (‘CAT’) which had upheld initiation of disciplinary proceedings by the Nuclear Fuel Complex (‘NFC’) against the respondent under Central Civil Services (Classification, Control and Appeal) Rules, 1965 (‘CCA Rules 1965’), the Bench of Sanjay Kishan Kaul, C.T. Ravikumar and Sudhanshu Dhulia, JJ. dismissed the appeal to settle that Standing Orders were special Rules as against the General Rules — the CCA Rules 1965.

The Court as well as the High Court considered the question of whether the disciplinary proceedings against the respondent, admittedly a workman, could be initiated under the CCA Rules 1965, or it could be done only under the Standing Orders certified for NFC on 27-08-1973 under the Industrial Employment (Standing Orders) Act, 1946.

Factual Matrix

NFC was setup in 1970s as a constituent unit of the Department of Atomic Energy, Government of India wherein, the respondent was appointed as a helper (class IV post) w.e.f. 5-05-2001. On dispute regarding submission of fake document, and initiation of disciplinary proceedings, the respondent claimed to be governed by Standing Orders, while NFC claimed that disciplinary proceeidngs would follow CCA Rules 1965 since the same was mentioned in his appointment order.

The respondent filed an OA before CAT praying for setting aside the said proceedings against him on the grounds that the disciplinary proceedings against him could only be initiated under the Standing Orders and not under CCA Rules. The same was dismissed by CAT vide order dated 18-03-2008 placing reliance on his appointment order and the circular dated 12-05-2005 issued by the Department clarifying that their employees were governed by CCA Rules and not the Standing Orders. The said CAT order was challenged before the High Court through a writ petition which was allowed while setting aside the CAT order and quashing the disciplinary proceedings against him.

Court’s Analysis on Applicability of Standing Orders

The Court perused the appointment order specifying CCA Rules as the governing provisions since the Rules applicable to Central Government employees are the CCA Rules 1965. The Court commented that the Standing Orders under the Industrial Establishment (Standing Orders) Act, 1946 were Rules specific to workmen in an industrial establishment. The Court cited a catena of cases to explain that “Industrial Employment (Standing Orders) Act 1946, Industrial Disputes Act, 1947 and a number of other legislations of this period, are worker friendly legislations, which were enacted with a purpose i.e., to regulate the working conditions of workmen. Standing Orders grant a protection to a workman, inter alia, when he faces a disciplinary proceeding initiated by the employer. The employer is undoubtedly on a much powerful position than a workman and has much stronger bargaining power and consequently the statute has been made to create a balance.”

The Court was of the view that the protection under 1946 Act cannot be denied to a workman just because the employer extended other service benefits such as pension, gratuity, etc. under CCA Rules. The Court referred to Sudhir Chandra Sarkar v. Tata Iron and Steel Co. Ltd., (1984) 3 SCC 369 for the purpose behind the worker-friendly legislation. Regarding the submission that since the appointment order specified CCA Rules, there was no room for doubt regarding applicability of Rules in disciplinary proceedings, the Court clarified that such thought process may not always be correct and said that “An appointment order cannot lay down terms of service which are against what is provided in the Standing Orders, as they are binding on the employer.” The Court cited Western India Match Co. Ltd. v. Workmen, (1974) 3 SCC 330 wherein, reinstatement of an illegally terminated worker during his probation period was directed since the said probation period was wrongly extended beyond what was permissible in Standing Orders. The Court further cited Sudhir Chandra Sarkar (supra) wherein the terms of statutory contract of service were ultimately held as illegal for denying gratuity to employee as against the Standing Orders which were legally binding on the employer.

The Court perused the definition of Standing Order under Section 2(g) of 1946 Act and the list of topics related to workmen under the Schedule. The Court explained that under Section 3, the 1946 Act mandates the employer to submit before the certifying officer, draft standing orders proposed by him, for adoption in his industrial establishment, and such draft standing orders finally certified under Section 5 after scrutiny under Section 4 of the 1946 Act. Such standing orders are notified under Section 7 to become effective. The Court highlighted that before notification under Section 7, it may undergo a quasi-judicial process since a party aggrieved by any provisions of the standing orders enjoys the right to appeal under Section 6 of 1946 Act before the Appellate Authority. The standing orders ultimately notified are prominently posted by the employer in English and a language understood by majority of workmen. Section 10 restricts modification in standing orders except by agreement between parties within 6 months of certification or last modification of standing orders.

The Court pointed out that the standing orders claimed by the respondent in the instant matter have undergone the aforementioned process and that there was no order modification applicable under Section 10. It stressed on the fact that a standing order is not an ordinary order and has a statutory mandate for all owners of industrial establishments employing 100 or more workmen to prepare standing orders to cover all matters relating to employment of a workman as given in the schedule of 1946 Act and certified by the authority. The Court expressed that “The objective and purpose of the 1946 Act was to have a certainty in service conditions of workmen and a responsibility was placed upon the employer to formulate fair conditions of industrial employment, including in its disciplinary proceedings against a workman. Standing orders are a set of Rules which have to be strictly followed and cannot be ignored, modified or changed, except in accordance with law.”

The Court went on to expound that CCA Rules 1965 were framed under proviso to Article 309 of Constitution of India as applicable to Central Government employees, and that the said rules were not specific to workmen for being general service rules applicable to all employees working under the Central Government. It clarified that those are not workman specific Rules unlike the standing orders, which cover a whole range of activities of work related to a workman in an industrial establishment and totally focus upon the activities, nature of work and treatment that a workman deserves vis-a-vis the employer and the duties towards his employer. All such is not comprehensively covered under the CCA Rules 1965. The Court cited U.P. SEB v. Hari Shankar Jain, (1978) 4 SCC 16 to bring in the purpose and scope of the 1946 Act, holding it to be a special Act under which the standing orders were laid down containing specific conditions of a workman in an ‘industrial establishment’ and that the hard won rights of workmen cannot be taken away by a general enactment like CCA Rules 1965.

Coming back to the instant facts, the Court highlighted that the NFC having duly certified and notified standing orders were applicable to all industrial employees of NFC Hyderabad who were workmen under the 1946 Act. The Court also pointed towards the OM dated 29-07-1977 issued by the Ministry of Labour, Government of India clarifying wherever Section 13B of the 1946 Act was applicable for the establishments, the standing orders need not be certified, and if certified, they would become invalid. The same was pointed out by the Andhra Pradesh High Court that for Madras Atomic Power Project (similarly constituted as NFC), there was an exclusionary clause in terms of Section 13B of the 1946 Act in its Standing Orders, but for NFC Hyderabad, there was no mention of Section 13B of 1946 Act.

Considering whether a separate notification was required to oust the 1946 Act in the instant matter, the Court cited Hari Shankar Jain (supra) for settling special rules overriding general rules. The Court concluded that “CCA Rules, 1965 are the general Rules whereas Standing Orders are the Special Rules, and therefore the Standing Orders would override the CCA Rules, 1965.” It also clarified that Standing Orders cover wider activities of workmen and were workmen specific, yet, in view of Section 13B of 1946 Act, a specific notification can be made applying CCA Rules 1965 to that specific aspect, but a notification was necessary.

The Court noted that the NFC was established much after the 1946 Act, CCA Rules came into force in 1965, NFC drafted Standing Orders and there was nothing on record to show any subsequent modification after the same were certified in 1973, or any notification under Section 13B of 1946 Act to depict application of CCA Rules 1965 and not the standing orders. Thus, the Court upheld the High Court’s decision, dismissed the instant appeal, and settled that the service conditions of respondents were to be governed by the standing orders being the special Rules to override any other general Rule including CCA Rules 1965.

[Union of India v. K. Suri Babu, 2023 SCC OnLine SC 1591, decided on 29-11-2023]

Judgment authored by: Justice Sudhanshu Dhulia

Know Thy Judge | The Remarkable Odyssey of Justice Sudhanshu Dhulia – from bar to bench

Advocates who appeared in this case :

For Appellants: Solicitor General Tushar Mehta, Additional Solicitor General K. M. Nataraj, Advocate Rajat Nair, Advocate on Record Gurmeet Singh Makker

For Respondents: Advocate Anand Padmanabhan R., Advocate V. Sridhar Reddy, Advocate on Record V. N. Raghupathy

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