BIHAR STATE ELECTRICITY BOARD, PATNA versus THEIR WORKMEN

Citation: [1976] 2 S.C.R. 42 · Decided: 30-09-1975 · Supreme Court of India · Bench: A. ALAGIRISWAMI · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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BIHAR STATE ELECTRICITY BOARD, PATNA 
v. 
THEIR WORKMEN 
September 30, 1975 
[A. ALAGIRISWAJ\U, P. K. GOSWAMI AND N. L. UNTWAL!A, JJ.] 
Industrial Disputes Act-Computation of financial burden before making 
an award : 
Eectridty Supply Act, 1948-S. 59, 64. 65, 66, 67 and 68. 
The Emplo~es Provident Fund Acb applies only t!> establishments which 
are 
fa~tories. The industry 
in question. 
electricity-including 
generation, 
transmission and distribution thereof, is one to which tbe Act applies. But 
only a small proportion of employees connected with_ the generation of electri-
city is establishments which are factories. 
To the rest the 
Act does 
not 
apply. The appellant maintains a contributory provident fund 
for 
those 
employees who are not covered by the Act where the contribution is on the 
basis of basic wage, the appellant and the employees contributing equally. The 
contribution under the Act is 8 per cent whereas under the appellant's scheme 
it is 6.t per cent. 
The workmen respondents claimed before the Industrial Tribunal 
in a 
reference made by the Govt. of Bihar ( 1) that all workmen of the appellant 
should have the ~ame and the similar benefits and that, therefore. there should 
be no distinction between the appellant's contributory provident fund scheme 
and the scheme under the Employees Provident Fund Act. 
(2} The services of the workmen of the appellant are liable; to be trans-
ferred from one esta bli'shment to another both of which may not be covered 
by the same scheme and such! ano_malies can be removed by giving the same 
benefits to all the1 workmen; (3) That the State was the financier of the appel-
lant which now charges interest at the rate of 6t per cent as against previOUSi 
4 per cent; (4) That no scheme run by the Board was running at a loss; (5) 
That a large amount was paid to the Gove_rnment by the appellant in the 
shape of interest towards the Joans received from the Government and that 
such amounts should be taken as dividends to be paid to the Government by 
the appellant 3Jld should not be taken into consideration while deciding the 
matters regarding benefits to be made available to its employees. 
The appellant contended before the Industrial Tribunal that the demand 
of the workmen would impose additional financial liabilities which the appel~ 
!ant would not be able to bear. 
The Tribunal did not consider the validity of the above submissions. It 
merely relied on an earlier award in which it wa~ observed that if the interest 
realised by the Government were excluded from consideration there would 
be surplus in favour of the appellant. The Tribunal held that since the posi-' 
tion of th~ appellant was not worse than what it was at the time of the earlier 
award, the appellant should extend the benefits of the contributory provident 
fund to: all workmen who are not covered by1 the Act and that the Contributions 
should be 6t per cent not on the basic wages bnt on the total wages. 
Allowing the appeal, 
HELD : (1) The Tribunal has treated the whole matter in a very perfunc-
tory manner. . The main question for consideration by the Tribunal was the 
financial capacity of the Board. It has made no effort at all to analyse the 
balance sheet of the appellant to show the actual results of his working. It 
has made no effort to work out the financial implications of its order. 
Tt has 
not made it clear what exactly are the total wages. 
This Court in the case of 
Gramophone Company_ although it was a case of ordinary commercial con-
cern, calculated the actual burden to protect the stability of the industry and 
to see that the imposition of the burden does not result in loss to the employer. 
[45 B~GJ. 
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!llIHAR ELECTRICITY BOARD v. WORKMEN (Alagiriswami, !.) 
43 
( 2) The appellant is not an ,ordinary commercial concern. It is a public 
5ervice institution. lt is not expected to make any profits. lt is expected to 
.extend the supply of electricity to unserved areas without reference to corn;i-
derations of loss that might be incurred as a result of such extension. Section 
59 of the Electricity (Supply) Act, 1948 provides that as far as practicable 
the Board shall carry on its operations so a~ not to incur loss. S. 64 enables 
the State Government to advance lo.ans to the Board. S. 65 authorises the Board 
to borrow. S. 66 authorises the State Government to guarantee loans raised 
.by the Board. 
S. 67 lays down the man

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