Calcutta High Court (Appellete Side)
Nihar Ranjan Kanjilal & Ors vs National Industrial Tribunal on 20 July, 2026
Author: Rajasekhar Mantha
Bench: Rajasekhar Mantha
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IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
Present : Hon'ble Justice Rajasekhar Mantha
And
Hon'ble Justice Rai Chattopadhyay
F.M.A. 766 of 2025
With
CAN 1 of 2025
And
CAN 2 of 2025
And
CAN 3 of 2026
Nihar Ranjan Kanjilal & Ors.
Versus
National Industrial Tribunal, Kolkata & Ors.
For the appellants- Mr. Sardar Amjad Ali, Sr. Advocate
Mr. Samir Kumar Ghosh
For the added Appellant/Bombay Mint- Mr. Kallol Basu
Mr. Suvodeep Bhattacharyya
Mr. Nilanjan Pal
Mr. Atreya Chakraborty
For the Union of India- Mr. Arup Nath Bhattacharyya
Ms. Sreetama Biswas
Mr. Arya Bhattacharyya
Hearing concluded:- 15 th July 2026
Judgment pronounced on :- 20th July, 2026
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RAJASEKHAR MANTHA, J.
1. This intra-court appeal is directed against the judgment and order
dated May 20, 2025, passed by a learned Single Judge of this Court,
whereby the award of the National Industrial Tribunal, Kolkata, dated
July 30, 2020, in Reference Case No NT-03 of 205 was upheld. By the
impugned award, the learned Tribunal rejected the appellants’ claim for
a 19% salary hike, a demand asserted by the mint workers as a
purportedly agreed condition precedent, for increasing their weekly
working hours from 37.5 hours to 44 hours.
2. The mint workers claim that the general manager of the three mint
offices at Calcutta, Bombay, and Andhra Pradesh has promised them
that their claim for a salary hike of 19% will be ‘favourably considered’
by the Department of Expenditure, Finance Ministry, Government of
India. The latter, therefore, is bound to grant the said salary hike.
3. The question that falls for our consideration is whether the General
Managers of the respective mints possessed the requisite authority or
jurisdiction to bind the Department of Expenditure, Finance Ministry,
Govt. of India to a definite 19% salary hike for the workmen of the
aforesaid three mints.
FACTS
4. India has four mint factories/units i.e. in Calcutta, Bombay, Andhra
Pradesh, and at NOIDA in Uttar Pradesh. They are managed and
supervised by Security Printing & Minting Corporation of India Ltd. The
said Corporation is wholly controlled and managed by the Department
of Economic Affairs, Ministry of Finance.
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5. On 1st, October, 1951, the mint workers at the Calcutta mint office
found that their muster roll/wage register for the first time prescribed
the working hours is 40 hours, per week as opposed to the hitherto
existing 37 hours and 30 minutes per week, since its establishment
in 1757. No corresponding increase in salary was, however,
announced. The mint workers, therefore, continued to work for 37
hours and 30 minutes per week in the month of October, 1951.
6. Consequently, the workers started to receive a reduced salary for the
month of October, 1951. They filed PWA Case No. 353 of 1951, before
the Payment of Wages Authority, Calcutta, claiming illegal deduction
of salary. By order dated August 13th, 1952,the first Authority under
the Payment of Wages Act, 1936, directed for refund of the deducted
sum to the mint workers because ‘the mint authority increased the
working hours without proposing a corresponding salary increase’.
7. At this stage, the workers point out that the first authority in the order
dated August 13th, 1952, has held that the Calcutta mint office and
workers has an implied contract i.e. the latter will work for 37 hours
and 30 minutes in a week. This order was affirmed in the appeal,
preferred by the mint authority.
8. Meanwhile, the 4th pay commission recommended an increase of
working hours to 44 hours per week in the mints offices. Accordingly
on 16th January, 1988,the Calcutta Mint issued a notice under Section
9A of the Industrial Disputes Act, 1947, for increasing the working
hours from 37 hours, 30 minutes to 44 hours per week.
9. The Calcutta mint workers filed W.P. No. 9523 of 1990 challenging the
said notice under Section 9A (supra), which was dismissed, for
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availability of an alternative remedy before the Industrial Tribunal. In
an intra court appeal preferred there against, the said notice was
stayed. The said appeal was subsequently withdrawn. The stay thus
stood vacated.
10. On April 9th, 1994, the 5th Pay Commission was constituted.
Discussions were held with all stake holders in connection with the
increase in the working hours of the mints offices. The discussions are
recorded in paragraphs 66.26, 66.27, 66.28, 66.29, 66.30, 66.31,
66.32, 66.33, and 66.34 of its report. The summary of the discussions
is as follows:-
a) The mint workers are pursuing court cases challenging the
increase in their work hours. In first spell of the litigation, the
Court stayed the increase of working hours since there was no
corresponding increase in salary.
b) The infrastructure for manufacturing coins, currency notes
and other products and the working conditions in the mint
offices have improved over the decades and centuries. The
mint workers, therefore, should receive a higher pay scale for
working 44 hours per week.
c) The mint workers should now work for 44 hours per week. The
work schedule of 37 hours and 30 minutes per week was fixed
at a time when the mint offices did not have cutting edge
technology and machines or improved working conditions.
d) The working hours at the four mint offices should also be
rationalized.
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11. The percentage of salary increment, recommended by the 5th pay
commission, is lesser than the claim for a 19% salary hike.
Accordingly, a Joint Action Committee comprising mint workers
from Calcutta, Bombay and Andhra Pradesh was constituted to
canvass the need for 19% salary hike. The mint workers’ Union in
Calcutta, Bombay, and Andhra Pradesh called for a strike at the
mint offices, by notice dated February 18th, 1998.
12. Consequently, the General Managers and representatives of
Calcutta, Bombay, and Andhra Pradesh mint offices met with the
said Joint Action Committee at New Delhi on April 15th, 1998, where
the following were discussed and agreed to-
a) The mint workers will work for 44 hours per week as
recommended by the 5th pay commission;
b) The mint authority will extend all the benefits/salary
increments as per the 5th pay commission;
c) The said pay scale will be enforced as and when the mint
workers start working for 44 hours per week.
d) The demand of the workmen for salary hike of 19% will be
taken up with the Department of Expenditure, Finance
Ministry, for favourable consideration.
13. Point no. 7 of the said meeting directed the concerned General
Manger of the respective mints to implement the aforesaid terms of
discussion. Pursuant thereto, on May 5th, 1998, the parties herein
confirmed the minutes of discussion recorded in the meeting held at
New Delhi on April 15th, 1998 before the Regional Conciliation Officer.
The Notice of Strike was withdrawn by the workmen.
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14. By order dated May 13th, 1998, the workers of the Calcutta mint
office were allowed to withdraw FMA no. 466 of 1992, which was filed
challenging the notice under Section 9A dated 16th January, 1988, as
already stated hereinabove. The minutes of the meeting dated 15th
April 1998 and conciliation report dated 5th May, 1998, were placed
on record in support of the said withdrawal.
15. Since the Department of Expenditure of the Ministry of finance was
yet to decide upon the demand of the workmen for increase in salary
hike of 19%, the Mint Union of Kolkata moved the Central
Administrative Tribunal at Kolkata. By order dated Feb 8th, 2001
passed in I. A. 74 of 2001 and O.A. 115 of 2001,theCentral
Administrative Tribunal, Calcutta, directed the mint office at Calcutta
to take steps for before the Department of Expenditure, Finance
Ministry, Govt. of India to decide the workmen’s claim for a salary
hike of 19%.
16. Accordingly, on 15th, May 2001, the Department of Expenditure,
Govt. of India, considered and rejected the claim of the additional
salary increment of 19%. The said department held that any
additional increment to the salary of mint workers would result in
discriminating other similarly situated Central Govt. Employees.
17. The said rejection was referred to conciliation. On June 6th, 2005,
the Conciliation Officers across India reported failure of conciliation
and that no settlement could be arrived at between the mint workers
and mint authority.
18. By Order dated June 6th, 2005 passed by the Ministry of Labour,
Government of India, made a reference to the National Industrial
7
Tribunal to decide whether the refusal to grant a 19% salary hike for
working 44 hours per week is illegal.
FINDINGS OF THE NATIONAL TRIBUNAL, CALCUTTA:-
19. By the award dated July 30th, 2020, the National Industrial
Tribunal, inter alia, held the following:
a) The decision of the First and appellate Authority at Calcutta
under the Payment of Wages Act, 1936, does not operate as
res judicata. It merely decided that increase of working hours
without corresponding salary hike is unsustainable. The
claim for a 19% salary hike was not before the said
authority.
b) The general manager of the respective mint offices could not
have not promised for 19% salary hike. It was at best agreed
to be placed before the Department of Expenditure, Finance
Ministry, Govt. of India for ‘favourable consideration’. The
said expression did not confer and legal right to receive a
salary hike of 19%. There was no promissory estoppel
enforceable against the Mint management.
c) The minutes of meeting dated April 15th, 1998 and
conciliation Report dated May 5th, 1998, constitutes an
agreement between the workers and three mint offices,
whereby the workers were to work 44 hours per week and
receive a higher salary as per the 5th pay commission.
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d) Hence, a fresh issuance of a notice under section 9A of the
ID Act, 1947 announcing the increase of working hours, was
not called for in view of the proviso to the section 9A.
e) Under the Factories Act, 1948, the mint offices can increase
the working hours to 44 hours per week since the said
statute has fixed 48 hours of work per week as the maximum
limit.
20. The single Bench has affirmed the aforesaid findings of the Ld.
Tribunal in the impugned judgement dated May 20th, 2025
ANALYSIS OF THIS COURT:-
21. We have heard Mr. Sardar Amjad Ali, Ld. Sr. Counsel, appearing for
the appellant nos. 1 and 2, Mr. Kallol Basu, Ld. Counsel, appearing for
the added appellant no. 3, the Bombay Mint Employees’ Federation, and
Mr. Arup Nath Bhattacharyya, Ld. Counsel, appearing for the Mint
management.
22. The appellant no. 3 laid a challenge to the impugned award of the
Ld. Tribunal before Bombay High Court. However, during the pendency
of the writ petition before the said High Court, the judgement and order
dated May 20th, 2025 impugned in this appeal was pronounced. The
said writ petition was withdrawn with a leave to approach this Court. By
order dated January 6th, 2026, a coordinate Bench allowed the
application for impleadment being CAN 2 of 2025 and directed Bombay
Mint Employees’ Federation to be added as appellant no. 3 to this
appeal.
a) Settlement arrived in a conciliation proceedings wields greater
sanctity
9
23. Learned Senior Counsel for the mint workers/appellant has argued
that the minutes of the meeting dated April 15th, 1998, could not have
formed part of the conciliation report dated May 5, 1998. The minutes of
the meeting are not an agreement between the parties. Therefore, the
consent of the workers given during the said meeting dated April 15,
1998, to work for 44 hours and receive the salary increment as
recommended by the 5th Pay Commission is not a legal consent, if at all
any such consent is given.
24. Section 2(p) of the Industrial Disputes Act, 1947, provides for two
kinds of settlement- a) the settlement arrived at during the course of
conciliation proceedings, and b) the settlement arrived at by written
agreement between the parties. Sec. 2(p) is set out below
Sec.2(p) “settlement” means a settlement arrived at in the
course of conciliation proceeding and includes a written
agreement between the employer and workmen arrived at
otherwise than in the course of conciliation proceeding where
such agreement has been signed by the parties thereto
in such manner as may be prescribed and a copy thereof
has been sent to 5 [an officer authorised in this behalf by]
the appropriate Government and the conciliation officer;]
Emphasis applied
25. In the case of Jhagrakhan Collieries (P) Ltd. v. G.C. Agrawal,
Presiding Officer, reported in (1975) 3 SCC 613, the difference
between a settlement arrived at by and under a written agreement
and one that arrived at during conciliation proceedings was pointed
out as follows:-
11. An analysis of the above definition would show that it
contemplates only two kinds of settlements: (i) A settlement
arrived at in the course of conciliation proceedings under the Act
and (ii) a written agreement between the employer and the
workmen arrived at otherwise than in the course of conciliation
proceedings. But a written agreement of the latter kind in
order to fall within the definition must satisfy two more
10conditions, namely: (a) it must have been signed by the
parties thereto in the prescribed manner, and (b) a copy
thereof must have been sent to the authorities indicated in
Section 2(p)
Emphasis Applied
26. An agreement arrived in a private sitting between an employer and
employee has to pass a strict test before it is recognised as a
settlement binding between the parties. The law, therefore, insists for
a signature of the rival parties.
27. Whereas, an agreement arrived at between the employee and
employer in presence of a conciliation officer during the course of
conciliation proceedings wields a higher degree of legal sanctity since
a public officer presides over the said meeting. The said officer
ensures that the employer and employee are equally informed and
have equal bargaining power.
28. The duties of the conciliation officer are specified in Section 12 of
the Industrial Disputes Act, 1947, which is set out below:-
Sec. 12. Duties of conciliation officers.–
(2) The conciliation officer shall, for the purpose of bringing
about a settlement of the dispute, without delay, investigate
the dispute and all matters affecting the merits and the
right settlement thereof and may do all such things as he
thinks fit for the purpose of inducing the parties to come
to a fair and amicable settlement of the dispute.
(3) If a settlement of the dispute or of any of the matters in
dispute is arrived at in the course of the conciliation
proceedings the conciliation officer shall send a report
thereof to the appropriate Government [or an officer
authorised in this behalf by the appropriate Government]
together with a memorandum of the settlement signed by the
parties to the dispute.
Emphasis applied
29. The conciliation officer, therefore, is duty-bound to induce the
parties to arrive at a fair settlement. He is to send the conciliation
11
report to the appropriate government. What is most significant is
that the effect of a settlement arrived at during the course of
conciliation proceedings is not confined to the employer and
employee present and who have participated in the said conciliation
proceedings. It would even be binding on the next generation of
workers who will join the organization. A settlement arrived at in
conciliation proceedings thus carries serious present and future
ramifications. In this regard, section 18 of the Industrial Disputes
Act, 1947 is set out below:-
18. Persons on whom settlements and awards are binding.–
[(3)] A settlement arrived at in the course of conciliation proceedings
under this Act [or an arbitration award in a case where a notification
has been issued under sub-section (3A) of section 10A] or [an award
[of a Labour Court, Tribunal or National Tribunal] which has become
enforceable] shall be binding on–
(a) all parties to the industrial dispute;
(b) all other parties summoned to appear in the
proceedings as parties to the dispute, unless the
Board, [arbitrator,] [Labour Court, Tribunal or
National Tribunal], as the case may be, records the
opinion that they were so summoned without proper
cause;
(c) where a party referred to in clause (a) or clause (b)
is an employer, his heirs, successors or assigns in
respect of the establishment to which the dispute
relates;
(d) where a party referred to in clause (a) or clause (b)
is composed of workmen, all persons who were
employed in the establishment or part of the
establishment, as the case may be, to which the
dispute relates on the date of the dispute and all
persons who subsequently become employed in
that establishment or part.
Emphasis applied
12
30. In Jhagrakhan Collieries (Supra),it was held that a settlement
arrived at in the course of conciliation proceedings is an insignia of
collective bargaining between the parties. Para no. 13 of the said
decision is set out below:-
13. It is clear from a perusal of Section 18, that a settlement
arrived at in the course of conciliation proceedings is binding
not only on the actual parties to the industrial dispute but
also on the heirs, successors or assigns of the employer on
the one hand, and all the workmen in the establishment,
present or future, on the other. In extending the operation of
such a settlement beyond the parties thereto, sub-section (3)
of the section departs from the ordinary law of contract
and gives effect to the principle of collective bargaining.
Emphasis applied.
31. Subsection 2 of Section 19 of Industrial Disputes Act, 1947,
provides for the termination of a settlement. In the present case, the
mint workers have not issued a letter of termination against the
settlement, which was first arrived at on April 15th, 1998, and
thereafter placed before the conciliation officer on May 5th, 1998 for
its final confirmation.
b) Positive Conduct amounts to acceptance.
32. On May 5th, 1998, the conciliation officer, upon perusal of the
minutes of the meeting and after further deliberations with the mint
workers and the General Manager of the three respective mills, sent a
report to the government, inter alia, stating that the workers would
work for 44 hours. The government shall extend all benefits to them
as per the Fifth Pay Commission. Therefore, the settlement arrived at
between the parties reflected in the conciliation report dated May 5th,
1998 cannot and should not be casually brushed aside. It attained
finality since it was never terminated.
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33. The appellants cannot be permitted to approbate and reprobate in
the same breath. They seek to place reliance on the minutes of the
meeting dated April 15, 1998, and the subsequent conciliation report
dated May 5, 1998, to enforce a 19% salary increment, but deny that
the former was a settlement.
34. They seek to repudiate the reciprocal obligation contained therein
requiring them to work 44 hours per in lieu of the benefit of the 5 th
Pay Commission recommendation. It is a settled principle of equity
and industrial law that a party cannot selectively enforce beneficial
clauses of a settlement while discarding the corresponding
obligations.
35. The learned Industrial Tribunal has correctly held that the workers
cannot reject the portion of the settlement which appears to them as
non-beneficial, and in the same breath, accept and seek enforcement
of the portion which is beneficial to them.
c) Notice under Section 9A revived after withdrawal of the intra-court
appeal
36. It is next argued by Counsel for the appellants that after the
withdrawal of the intra-court appeal FMA no. 466 of 1992, the notice
under Section 9A of the Industrial Disputes Act, 1947, increasing the
working hours from 37 hours and 30 minutes per week to 44 hours
per week has not stood revived. There could be no change of hours of
work without proceedings under Section 9A.The argument is
preposterous.
37. The conduct of the workers in constituting the Joint Action
Committee, and thereafter deliberating with the general managers of
14
the mints of Calcutta, Bombay, and Andhra Pradesh at New Delhi,
followed by their participation in the conciliation proceedings, clearly
establishes that they were very much aware that they had to work for
44 hours per week. In fact, the said mint workers went on a strike
after issuance of the said notice under Sec. 9A. The strike was
immediately withdrawn after the said meeting in New Delhi. There
was therefore a settlement within the meaning of the proviso of
Section 9A of the Act of 1947.
38. Therefore, the workers were not taken by surprise when they were
called upon to work for 44 hours, pursuant to the said meeting. They
became aggrieved when the Department of Expenditure refused to
grant them salary hike of 19%. The notice under Section 9A had
become infructuous and abandoned by the workmen.
d) The Pay Commission can recommend increase in working hours.
39. Learned Sr. Counselfor the mint workers/appellantshas argued
that the mint authority cannot increase working hours of the mint
workers based on the recommendation of the Pay Commission. It is
argued that in the present case, the mint authority has increased the
working hours based on recommendation of the 4th pay commission.
40. Pay commissions are constituted by issuing executive orders in
exercise of Article 73 of the Constitution of India. The scope of
jurisdiction of such pay commissions, therefore, is specified by the
concerned executive order.
41. The aforesaid argument against the increase of working hours
based on the recommendation of the pay commission is incorrect
15
since fixation of salary first calls for an assessment of the nature,
volume, and hours of work put in by an employee. The Pay
Commission is, therefore, entitled to examine and recommend the
number of working hours to justify its recommendation for an
increase in salary.
42. The terms of reference of 4th and 5th Central Pay Commission are
set out below:-
Terms of reference of the 4th Pay Commission
2. The terms of reference of the Commission will be as follows:-
To examine the present structure of emoluments and
conditions of service, taking into account the total packet of
benefits, including death-cum-retirement benefits, available to
the following categories of Government employees and to suggest
changes which may be desirable and feasible :-
(i) Central Government employees-industrial and non-
industrial
(ii) Personnel belonging to the All India Services.
(iii) Employees of the Union Territories.
Terms of reference of the 5th pay commission
2. The terms of reference of the Commission will be as follows:-
(a) To evolve the principles which should govern the
structure of emoluments and those conditions of service
of Central Government employees which have a financial
bearing.
(b) To examine the present structure of emoluments and
conditions of service of the following categories of
Government employees, taking into account the total packet
of benefits available to them and suggest changes therein
which may be desirable and feasible
i) Central Government employees industrial and non-
industrial;
(d) To examine the work methods and work environment as
also the variety of allowances and benefits in kind that are
presently available to the aforementioned categories in addition to
pay and to suggest rationalisation and simplification thereof with
a view to promoting efficiency in administration, reducing
16
redundant paper-work and optimising the size of the Government
machinery.
Emphasis applied
43. The terms of reference of 4th and 5th pay commission called upon the
commission to examine the service conditions, work methods, and work
environment under which the central government employees worked.
Therefore, the 4th and 5th pay commission have rightly examined the
working hours of the mint authority.
44. Section 9A of the Industrial Disputes Act, 1947, employs the
expression ‘conditions of service’ to enable the employer to effect any
change thereof. Item no. 4 of the Fourth schedule to the Industrial
Disputes Act, 1947, itemizes ‘hours of work’ and ‘interval of rest’ under
the head ‘conditions of service’.
45. Therefore, it follows that when the pay commission deliberates upon
the conditions of service of an employment sector, it can propose the
working hours for the workers of an industry. The Pay Commission
recommendations are beyond the scope and jurisdiction of the Act of
1947. They are implemented across the whole spectrum of workmen in
all industries under the control of the Central Government and
autonomous bodies under it.
46. The acceptance by the workmen of such recommendations could
itself also be interpreted as a deemed settlement under Section 9A of
the Act of 1947. Refusal to apply this principle would also attract the
mischief of approbation and reprobation.
e) Res judicata is not strictly applicable to industrial adjudication
17
47. Learned Senior Counsel for the mint workers/appellants has next
argued that the decision of the first authority under the Payment of
Wages Act, 1936 on the working hours was binding on the industrial
tribunal, as well as the single Judge. The said decision was
unsuccessfully challenged in an appeal filed by the mint management.
48. The said first authority under the Payment of Wages Act, 1936, held
that an increase in working hours should be reciprocated by an
increment in salary. In 1951, Calcutta Mint authority did not increase
the salary. The increase in working hours was thus declared illegal.
Therefore, the said decision would not be binding when the working
hours are increased with a corresponding increase in the salary of the
mint workers.
49. This Court is of the view that the principle of ‘res judicata’ does not
strictly apply to the industrial adjudication. The number of working
hours needs to be changed with the change in the economic structure
of the Country. In Associated Cement Staff Union v. Associated
Cement Co. Ltd., reported in 1963 SCC OnLine SC 126 & AIR
1964 SC 914 on similar set of facts, it was held as follows :_
5. It was next urged that the existing working hours having been found
reasonable by the Industrial Tribunal in 1950 there was no sufficient
justification for changing them in the present reference. There is, in
our opinion, no substance in this argument. It is true that too frequent
alterations of conditions of service by industrial adjudication have been
generally deprecated by this Court for the reason that it is likely to disturb
industrial peace and equilibrium. At the same time the Court has more
than once pointed out the importance of remembering the dynamic
nature of industrial relations. That is why the Court has, specially in
the more recent decisions, refused to apply to industrial
adjudications principles of res judicata that are meant and suited for
ordinary civil litigations. Even where conditions of service have been
changed only a few years before industrial adjudication has allowed
fresh changes if convinced of the necessity and justification of these
18
by the existing conditions and circumstances…..It is important to
remember in this connection that working hours remained unchanged
for many years in this concern and during these years, considerable
changes have taken place in the country’s economic position and
expectations. With the growing realisation of need for better
distribution of national wealth has also come an understanding of
the need for increase in production as an essential pre-requisite of
which greater efforts on the part of the labour force are necessary.
That itself is sufficient reason against accepting the argument against any
change in working hours if found justified on relevant considerations that
have been indicated above. We are satisfied that in arriving at the figure of
36 working hours in a week the Tribunal has given proper weight to all
relevant considerations.
Emphasis Applied
f) Increase of Working hours near to or at 48 hours is in public interest.
50. The next question that arises for consideration is whether the
employer is entitled to increase the existing working hours with a
corresponding increase in the salary of the workers, provided the said
increase is within statutory limit of maximum working hours?.
51. The aforesaid question calls for a perusal of Section 51, 54, read with
Section 65 the Factories Act, 1948. The said sections, inter alia,
specify the maximum working hours to be 48 hours per week and 9
hours per day, and further set out the circumstances under which the
said maximum working hours can be increased.
52. The object and purpose of the Factories Act, 1948, was alluded to in
S M Datta vs. State of Gujarat, reported in (2001) 7 SCC 659.
Paragraph no. 14 of S M Datta (supra) is set out below:-
14. …the establishment of cotton mills in Bombay in 1851 and
the jute mill at Rishra in Bengal marked the beginning of factory
system in India and it is only thereafter that the factories grew
steadily both in Bombay and in Bengal but the conditions
prevailing in these factories were inhuman, both as regards
working hours, welfare measures and wages. ……the first
Factories Bill, 1880 was introduced in the legislature,
subsequently however, the Bill was adopted as an Act. No
sooner however, the Act was passed, agitation started afresh
19in Bombay and other places and on the basis of the report of
a Committee, the Indian Factories (Amendment) Act of 1891
was passed. The provisions of the amended Act were also
inadequate and a somewhat revised Bill was subsequently
introduced in 1909 and the same was passed as a statute in
1911. Though the Factories Act, 1911 was amended from
time to time but it could not meet the required growing
activities in the country, especially after the Second World
War by reason whereof,the Factories Act, 1948 was
engrafted in the statute-book where emphasis had been on
the welfare of the workers. Factory Inspectors have been
placed with very heavy responsibility on them and
provisions have been made in the statute empowering the
State Governments to make and frame rules for the
purposes of meeting the local exigencies of situation.”
Emphasis applied
53. In Gujarat Mazdoor Sabha v. State of Gujarat, reported in (2020)
10 SCC 459, the Court examined the validity of a notification that
exempted certain classes of factories from complying with the mandate
of maximum working hours in a week and day. The said exemption
notification termed the Covid 19 pandemic a public emergency and
accordingly, enabled the owners of certain factories to force the workers
to labour beyond 48 hours and 9 hours in a week and day respectively.
The Court tested its validity in light of the object and purpose (supra)
alluded to in S M Datta (supra). In the said factual backdrop, the
Court held as follows:-
32. The Factories Act, as it currently stands, was enacted to
guarantee occupational health and safety. It ensures the
material and physical well-being of workers by fastening
responsibilities and liabilities on ‘occupiers’ of factories. As a
legislative recognition of the inequality in the material
bargaining power between workers and their employers, the Act
is meant to serve as a bulwark against harsh and
oppressive working conditions.
33. The notifications in question, besides specifically exempting
all factories from the applicability of Sections 51, 54, 55 and 56,
effectively override Section 59 of the Factories Act. The above
provisions form a part of Chapter VI which prescribes the
‘Working Hours of Adults’. The Chapter, broadly concerned
20with worker productivity and fair remuneration, prescribes
working hours, mandatory days of rest, intervals between
stretches of work and adequate compensation for overtime. The
notifications, putatively, are a response to the COVID-19
pandemic and exempt all factories from the provisions of
Sections 51, 54, 55 and 56
35. The notifications make significant departures from the
mandate of the Factories Act.They (i) increase the daily
limit of working hours from 9 hours to 12 hours; (ii) increase
the weekly work limit from 48 hours to 72 hours, which
translates into 12 hour work-days on 6 days of the week; (iii)
negate the spread over of time at work including rest hours,
which is typically fixed at 10.5 hours; (iv) enable an interval of
rest every 6 hours, as opposed to 5 hours; and (iv) mandate the
payment of overtime wages at a rate proportionate to the
ordinary rate of wages, instead of overtime wages at the rate of
double the ordinary rate of wages as provided under Section 59.
36. While enacting the Factories Act, Parliament was
cognizant of the occasional surge of the demand for, or
requirement of, the manufacture of certain goods which
would demand accelerated production. The law – makers
were aware of the exigencies of the war effort of the colonial
regime in World War II, with its attendant shortages, bottlenecks
and, in India, famine as well. Section 64(2) of the Factories Act
envisages exemption from certain provisions relating to working
hours in Chapter VI, for instances such as urgent repairs,
supplying articles of prime necessity or technical work, which
necessarily must be carried on continuously. Section 65(2)
enables classes of factories to be exempt from similar provisions
in order to enable them to cope with an exceptional pressure of
work. However, these exemptions are circumscribed by Section
64(4) and 65(3) respectively, at limits that are significantly less
onerous than those prescribed by the notifications in question.
Despite these concessions, these provisions do not enable
an exemption of Section 59 which prescribes mandatory
payment of overtime wages to the workers at double the
ordinary rate of their wages
Emphasis Applied
54. The following principles of law flow from the above decisions
regarding maximum working hours under the Factories Act, 1948:-
I) Before our Country gained independence, working hours
were unjustifiably long and wages abysmally low.
Therefore, the workers were wronged.
21
II) The Factories Act of 1948, a post-independence
legislation, thus fixed 48-hour workweek and 9 hours per
day as the maximum working hours.
III) It further entitles the worker to mandatory
intervals/break during work and holidays between
working days.
IV) The said statute has also been simultaneously alive to the
needs of the hour. Therefore, an exception to the total
maximum weekly working hours and daily working hours
was provided. The employer has been enabled to increase
the maximum statutory working hours during public
emergencies.
V) A balance between the demand for production of goods
and need for humane conditions of works is struck at by
the said statute.
55. Appling the aforesaid principles to the present facts of case, the
mint authority, Government of India, has increased the working hours
from 37 hours 30 minutes per week to 44 hours per week. Therefore,
the workers working at the mints in Calcutta, Andhra, and Mumbai
are not entitled to argue for the restoration of the previous working
hours of 37 hours 30 minutes per week given that the codified
maximum working hours is 48 hours per week.
g) Convention of past working hours is a contingent contract which is
subject to change
22
56. Learned Sr. counsel for the mint workers/appellants has argued
that these mint workers were working for 37 hours 30 minutes per
week from time immemorial. Thus, the working hours of 37 hours 30
minutes per week has emerged as a convention. No departure
therefrom can easily be made.
57. Hehas further argued that the decision of the first authority, and
thereafter that of the appellate authority under the Payment of Wages
Act, 1936 has found an implied contract between the mint authority
and workers. It was that the latter shall work 37 hours 30 minutes in a
week, and no further.
58. The workers cannot persist with the said implied contract unless
they can show that similarly situated employees of the Central
Government working in the same field, performing the same functions
and responsibilities, are working below 44 hours per week. The
workers cannot fall back on the ancient convention of working 37 hours
30 minutes in a week since the mint authority has not transgressed 48
hours/per week mandate.
59. With the emergence of cutting age technology, as noted by the 5th
pay commission, the workers at the Calcutta, Bombay and Andhra
Pradesh mints can be called upon to put in 44 hours of work per week.
The working conditions in the mint has exponentially improved and
rationalized with the advent of technology.
60. The employer would be called upon to furnish an explanation and
materials for the increase of working hours when the mandate of the
maximum working hours of 48 hours per week is departed from. Till
the time the employer has kept the working hours below 48 hours, or
23
at 48 hours, the workers do not and cannot have any objection
regarding the working hours. In May and Baker (India) Ltd. v.
Workmen, reported in 1961 SCC OnLine SC 146 & AIR 1967 SC
678, it was held as follows :-
5. The company next attacks the provision as to working
hours. Its main contention is that fixation of working hours is
peculiarly a management function and there was no reason for
the tribunal to interfere with the hours of work fixed by the
company, particularly when they were well within the hours
allowed under the Delhi Shops and Establishments Act. ….In
the circumstances the existing working hours which are well
within the hours of work prescribed under the Delhi Shops
and Establishments Act will continue and the tribunal’s
modification of them is set aside.
Emphasis Applied
61. The objection that the workers may have is the non-increase of
salary with the increase in working hours. In fact, the first and
appellate authority under the Payment of Wages Act, 1936, at Calcutta
has held in favour of the workers since the mint authority at Calcutta
increased the working hours to 40 hours per week without a
corresponding increase in salary.
62. The Fourth Pay Commission, followed by the Fifth, Sixth, and
Seventh Pay Commissions, has examined the issue of the increase in
working hours and recommended for the corresponding increase in
salary. With the increase in working hours, the workers were assured
that there shall be a corresponding increase in salary. Therefore, the
Union of India has compensated the increase in working hours by
providing an increase in salary.
h) Right to a specific increase in salary is not a legitimate expectation
63. The convention of working for 37 hours and 30 minutes per week
must also be examined in light of the principle of legitimate
24
expectation. The principle of ‘legitimate expectation’ provides for
procedural as well as substantive rights.
64. Under the ‘procedural legitimate expectation’, the State is bound
to provide an opportunity of hearing to an affected party before
altering a long-held policy. Under the ‘substantive legitimate
expectation’, the State must justify and offer valid reasons for
changing a public policy. Change of policy in public interest will
override a claim for enforcement of a substantive legitimate
expectation. In Sivanandan C T and Others v. High Court of
Kerala and Others, reported in 2023 INSC 709, it was held as
follows:-
26. In Hindustan Development Corporation (supra), this Court
cautioned against the use of the doctrine of legitimate
expectation to safeguard a substantive right. Yet, in a series of
subsequent decisions, this Court accepted that the doctrine
of legitimate expectations has become a source of both
procedural and substantive rights. In Punjab
Communication Ltd v. Union of India, this Court explained the
difference between procedural and substantive legitimate
expectation in the following terms:
“The procedural part of it relates to a representation
that a hearing or other appropriate procedure will be
afforded before the decision is made. The substantive
part of the principle is that if a representation is made that
a benefit of a substantive nature will be granted or if the
person is already in receipt of the benefit that it will be
continued and not be substantially varied, then the same
could be enforced.”
Emphasis applied
65. The promise announced to the citizens by the State must first be
established. Finally, the legitimacy of the expectation arising from the
said promise must appeal to the conscience of the Court. The principle
of legitimate expectation calls upon the State to be predictable,
25
consistent, and rational while framing new policies. In Sivanandan
decision (supra), it was held as follows:-
31. While dealing with the doctrine of legitimate expectation,
another important aspect that the courts have had to grapple
with is determining the “legitimacy” of the expectation. The
court can infer the legitimacy of an expectation only if it is
founded on the sanction of law……………The legitimacy of
expectation is a question of fact and has to be determined after
weighing the claimant’s expectation against the larger public
interest
39. Another significant development in the jurisprudence
pertaining to the doctrine of legitimate expectation is the emphasis
on predictability and consistency in decision-making as a facet of
non-arbitrariness. In Ram Pravesh Singh (supra), it was held
that the doctrine of legitimate expectation applies to a
regular, consistent, predictable, and certain conduct…..
Emphasis applied
66. Applying the principle of procedural legitimate expectation to the facts
of this case, the workers were duly heard by the Mint Authority,
Government of India on the increase of working hours to 44 hours per
week and increase of salary at New Delhi on April 15th, 1998 and
thereafter the said minutes of meeting were confirmed in conciliation
proceedings on May 5th, 1998.
67. During the said meeting, the parties agreed to an increase in working
hours. The Government reciprocated with that the mint workers would
be paid the revised pay scales. A corresponding salary increase was
thus promised, and in fact enforced.
68. Therefore, the workers were duly heard before the working hours were
increased from 37 hours and 30 minutes to 44 hours. Hence, no
violation of procedural legitimate expectation is made out.
69. One may argue that when workers were required to work 37 hours
and 30 minutes per week over a long period, an expectation may arise
26
that they will continue with this work schedule for the rest of their
working lives. Such an expectation is not legitimate because fixation of
working hours calls for flexibility. It depends on market forces namely
demand and supply. This expectation is against public interest of
production should be increased with a rise in demand.
70. The 5th Pay commission has discussed that working hours of 37 hours
and 30 minutes per week was adequate before the independence of the
Country. With the economic surge and call for more coins, the said past
working hours is no longer adequate.
71. Sec. 9A of the Industrial Disputes Act, 1947, therefore, enables the
employer to change the service condition after furnishing prior notice.
The first proviso to the Sec. 9A(supra) states that when the parties have
agreed to the change of service conditions by and under an agreement,
a notice under Sec. 9A is not mandatory. The meetings between the
parties herein and minutes thereof constitute an agreement that the
workers agreed to increase in working hours with the increase in salary
as per the recommendations of the Pay commission.
72. Admittedly,the mint workers were working beyond 37 hours and 30
minutes per week and were compensated with an overtime allowance.
Thus, working beyond 37 hours and 30 minutes per week in the mint
factory is not inhumane.
73. The workers, having failed to establish the legitimacy of the
expectation, and further having failed to demonstrate that the State has
violated the principle of procedural legitimate expectation, cannot put
forward the case for application of the substantive legitimate
expectation.
27
74. The doctrine of substantive legitimate expectation does not furnish a
cause of action in favour of the workers to prevent the mint authorities
from prescribing a higher period of working hours. Thus, any increase
in working hours below the statutory limit shall be deemed to serve the
public interest. The percentage of salary increase is at the discretion of
the executive, provided the discretion is used rationally. In
Sivanandan decision (supra), it was held as follows:-
36. The doctrine of legitimate expectation does not impede or
hinder the power of the public authorities to lay down a policy
or withdraw it. The public authority has the discretion to
exercise the full range of choices available within its
executive power.The public authority often has to take into
consideration diverse factors, concerns, and interests before
arriving at a particular policy decision. The courts are
generally cautious in interfering with a bona fide decision of
public authorities which denies a legitimate expectation
provided such a decision is taken in the larger public interest.
Thus, public interest serves as a limitation on the application of
the doctrine of legitimate expectation. Courts have to determine
whether the public interest is compelling and sufficient to
outweigh the legitimate expectation of the claimant. While
performing a balancing exercise, courts have to often grapple with
the issues of burden and standard of proof required to dislodge
the claim of legitimate expectation.
Emphasis Applied
75. In such meetings between the parties herein, the mint workers,
however, persisted with their demand of 19% increase in salary. This
quantum was more than the quantum of salary recommended by the
pay companion.
76. Let us examine whether the general managers of the mints at
Calcutta, Bombay, and Andhra promised a 19% salary increase for the
mint workers. The minutes of the meeting clearly record that the issue
of the 19% compensatory salary increase would be referred to the
Department of Expenditure, Finance Ministry, Government of India for
favourable consideration.
28
77. The increase of salary may be recommended by an employer. The
increase is however subject to the public exchequer permitting. The
said general managers thus did not have the authority to make an
announcement to the workers that they will receive a salary hike of
19%.
78. The expression ‘favourable consideration’ does not guarantee a
favourable outcome. In administrative law, an undertaking to
‘favourably consider’ a representation is a duty to examine the request
in good faith, objective reality, and without bias. To interpret it as a
mandatory obligation to grant the demand, irrespective of fiscal policy
and wider administrative parity, would introduce an element of
arbitrariness and favouritism. This would offend Article 14 of the
Constitution. In Akhil Bhartiya Upbhokta Congress vs. State of
Madhya Pradesh and Ors, reported in (2011) 5 SCC 29, it was held
as follows:-
65. What needs to be emphasised is that the State and/or its
agencies/instrumentalities cannot give largesse to any person
according to the sweet will and whims of the political entities
and/or officers of the State. Every action/decision of the State
and/or its agencies/instrumentalities to give largesse or confer
benefit must be founded on a sound, transparent, discernible and
well-defined policy, which shall be made known to the public by
publication in the Official Gazette and other recognised modes of
publicity and such policy must be implemented/executed by
adopting a non-discriminatory and non-arbitrary method
irrespective of the class or category of persons proposed to be
benefited by the policy. The distribution of largesse like allotment
of land, grant of quota, permit licence, etc. by the State and its
agencies/instrumentalities should always be done in a fair and
equitable manner and the element of favouritism or nepotism
shall not influence the exercise of discretion, if any, conferred
upon the particular functionary or officer of the State
Emphasis Applied
79. Pursuant to that meeting, the Department of Expenditure held that
an additional 19% salary increase is not called for given that the mint
29
workers are receiving the salary increment as per the Seventh Pay
Commission. Thus, the limited application of the principle of legitimate
expectation required the State to consider the plea for a 19% salary
increase. It did not obligate the Government to implement it.
i) Scope of judicial review on recommendations of the Pay Commission
is limited
80. The scope of judicial review is limited on the recommendations of an
expert body. Therefore, the propriety of the 19% salary hike vis-Ã -vis
the percentage of salary hike proposed by successive Pay Commissions
would be subject to a limited judicial review. In Rajasthan Agricultural
University, Bikaner, Through Its Registrar v. Dr.Zabar Singh
Solanki And Ors , reported in 2024 INSC 581, it was held as follows:-
20……..Whenever a Scheme/Policy is brought into force, ceteris
paribus, the Court could not and would not import something
which is not present therein and which may not be proper to be
interfered with, especially when it relates to financial matters
where primacy is required to be granted to the pay-master as
to what scale was to be granted to the category of staff
concerned. By its very nature, such exercise would fall under
the realm of policy-formulation…….
Emphasis applied
81. Pay Commissions serve as specialised bodies to determine salary
structures and service conditions. Its recommendations attain binding
status upon formal acceptance by the State. Therefore, the Courts
would not readily reject the percentage of salary hike proposed by the
Pay Commission, an expert body, and accept the proposal of the mint
workers on the salary hike, a non-expert body. In Union of India &Ors.
v. D.G.O.F. Employees Association and Anr., reported in 2023 INSC
995, it was held as follows:-
30
10. A cumulative perusal of the opinion expressed by this Court
would indicate that though the Courts would not undertake the
exercise of determining the pay scale keeping in view the
nature of the work by comparing employees who are not
similarly placed in cases where the exercise of determining
such complex issues would arise, at the same time, relief cannot
be denied to the employees when the entitlement is denied due to
irrational consideration without application of mind to the facts
involved in the case by the employer, thereby denying the benefits to
the employees….
Emphasis applied
j) Rate of Salary increase is not bound to be at the rate of overtime
allowance
82. Learned Senior Counsel for the mint workers has contended that the
percentage and quantum of overtime allowance paid to the mint
workers for putting in hours of work exceeding the previous threshold
of 37 hours 30 minutes per week outweighs the percentage of salary
increase recommended by the Pay Commission. On this basis, the
worker argues that since they previously benefited from higher overtime
rates, their baseline salary for a 44-hour week should align with the
said overtime rates. This justifies a 19% salary increase.
83. This argument proceeds on a fundamental misconception of the law
governing overtime allowances. Overtime allowance is paid at double
the rate of salary to compensate a worker for the labouring beyond
prescribed standard hours. When the working hours are increased by
an employer with a corresponding increase in the salary, the increase
in salary pay scale takes care of the labour put in for the increased
duration of work.
84. An increase in working hours does not automatically trigger a right to
double pay rates. The extended hours now constitute regular,
31
prescribed service, compensated by a salary hike. The extended hours
of work are no longer supplemental overtime.
85. Learned senior counsel for the mint workers argue that the
enhancement of regular working hours was a colourable exercise
designed to evade overtime liabilities and extract identical productivity
at a reduced cost.
86. This argument seeks to equalise overtime allowance with the salary
increase. The claim that over time allowance should be translated into
a salary hike for the new normal working hours is an attempt to
prevent the employer from increasing the working hours.
87. It also seeks to extract more money from the employer when the latter
calls upon the employee to work for hours below the maximum
statutory limit. An employer retains the administrative prerogative to
rationalise working hours in accordance with operational demands,
provided the working hours comply with the statutory limits. In
Associated Cement Staff Union decision ( supra) on similar set of
facts , it was held as follows:-
3….. It is argued that this increase in the working hours without
an increase in the wage rates amounts really to a gift of a
considerable sum of money to the Company, as but for this
increase the workmen would have been entitled to overtime
payment for the additional hours they will have to work under
the present award. This argument seems to us to be misconceived.
It is not the function of industrial adjudication to fix the working
hours with an eye to enabling the workmen to earn overtime
wages. Hours of work have to be fixed in consideration of many
factors, including the question of fatigue on the health of the
workmen, the effect on their efficiency, the physical discomfort that
may result from long and continuous strain, the need of leisure in the
workmen’s lives, the hours of work prevailing for similar activities in
the same region and also in similar concerns and other relevant
factors. But once a conclusion about the normal working hours is
reached after considering the optimum working hours on a
32
consideration of all the relevant factors, industrial adjudication
cannot hesitate to give effect to its conclusion merely because
the workmen would have been entitled to more wages at
overtime rates if the hours of work had been fixed at less. While
it is true that in fixing the proper wage scale the question of work
load and so the matter of working hours cannot be left wholly out of
consideration, many other factors including the need of the
workmen, the financial resources of the employer, the rates of
wages prevailing in other industries in the region have all to be
considered in deciding the wage scale. It would be against the
interests of workmen, the employers and the country as a whole to
bring into force wage rates moving on a sliding scale according to the
hours of work. The proper solution of the difficulty lies in fixing
wage scales after consideration of all the relevant factors
including the working hours and again to fix working hours on a
consideration of all relevant factors but without an eye to the
effect on the overtime payment of workmen…………………..
Emphasis Applied
88. The mint workers seek to be unjustly enriched. They cannot, on the
one hand, take advantage of the salary increase proposed by the
successive pay commissions and, on the other hand, seek to insist
upon an additional 19% salary hike. The workers are prevented from
claiming a salary hike of 19% on being paid the pay scale as per the
successive pay commissions. In M/S Patanjali Foods Limited
(Formerly Known As M/S Ruchi Soya Industries Ltd.) Versus Union
Of India &Ors., reported in 2025 INSC 733, it was held as follows:-
24. v. The doctrine of unjust enrichment is a just and salutary
doctrine. It is based on the principle that no person can
seek to collect duty from both ends. Power of the court is
not meant to be exercised for unjustly enriching a person.
This doctrine is, however, inapplicable to the State as the
State represents the people and no one can speak of the
people being unjustly enriched.
Emphasis applied
89. An employee has a right to propose a salary hike and the
corresponding right to get the hike considered by the concerned finance
33
authorities. When a counter salary hike is proposed by the State, and
the employee accepts it, the employee is estoppel to pursue with their
proposed salary hike since they have accepted the counter salary hike.
CONCLUSIONS
90. From the aforesaid discussions, it follows:-
a) The Pay Commissions are expert bodies. They decide and
deliberate upon the service conditions. They, therefore, can
recommend the working hours and an increase in salary.
b) The decision of the first authority and the appellate authority
under the Payment of Wages Act, 1936, in the year 1951, has not
decided the question as to whether the working hours of 37
hours 30 minutes per week can be increased to 44 hours with a
corresponding salary increase. It therefore does not operate as a
res judicata to the said question raised in the lis and this appeal.
c) The mint workers cannot question the prerogative of the
employer when the latter increases the working hours from 37
hours 30 minutes to 44 hours per week, when the said working
hours are within the statutory maximum limit of 48 hours.
d) The principle of legitimate expectation does not come to the aid of
the mint workers because the Government of India never made a
promise to increase their salary to the tune of 19%. The
Government of India, instead, offered to extend the salary
increments and the benefits arising from the recommendations of
the Pay Commissions.
34
e) The mint workers cannot claim the rate of overtime allowance as
their salary increment for the duration of their extended working
hours.
91. With the aforesaid discussions, FMA 766 of 2025 is dismissed.
Consequently all pending connected applications, if any, shall stand
dismissed. There shall however be no order as to costs.
(Rajasekhar Mantha J)
I agree,
(Rai Chattopadhyay)
