M/S. DIVGI METAL WARES LTD. versus M/S. DIVGI METAL WARES EMPLOYEES ASSOCIATION & ANR.

Citation: [2024] 3 S.C.R. 959 · Decided: 21-03-2024 · Supreme Court of India · Bench: BHUSHAN RAMKRISHNA GAVAI · Disposal: Disposed off

Judgment (excerpt)

* Author
[2024] 3 S.C.R. 959 : 2024 INSC 237
M/s. Divgi Metal Wares Ltd. 
v.  
M/s. Divgi Metal Wares Employees Association & Anr.
(Civil Appeal No(s). 2032/2011)
21 March 2024
[B.R. Gavai* and Sandeep Mehta, JJ.]
Issue for Consideration
Whether the Standing Orders read in conjunction with the terms 
of the appointment order restrain the transferability of employees.
Headnotes
Industrial Employment (Standing Orders) Act, 1946 – Validity of 
transfers of employees – Terms contained in standing orders 
as opposed to terms of appointment – Reconcilable – Transfer 
of employees were valid under the Standing Orders and the 
terms of appointment. [Para 12-15]
Industrial Employment (Standing Orders) Act, 1946 – 
Interpretation of terms of appointment and standing orders – 
Both read in conjunction permitted transfers to any department 
or establishment of the company – Nothing contained in the 
standing orders can operate in derogation or to the prejudice 
of the provisions as provided in the contract of service – No 
conflict between the terms of appointment and standing 
orders – Principles established in Cipla Ltd. v. Jayakumar R. 
and Another, (1999) 1 SCC 300 examined – Squarely applicable 
to the instant case. [Paras 11, 14]
Industrial Employment (Standing Orders) Act, 1946 – Larger 
issue regarding the power of modification of the standing 
order not considered in the instant appeal – To be adjudicated 
in an appropriate proceeding – High Court erred by deciding 
the petitions without discussing the reasoning adopted by the 
Tribunal – Impugned order not sustainable – quashed and set 
aside. [Paras 16, 24]
Held: The Supreme Court reiterated the principle that standing 
orders should be read in conjunction with the employment contracts/
appointment orders to determine the scope of transferability of 
employees – The Supreme Court also observed that the law laid 
down in Cipla Ltd. vs Jayakumar R. and Another (1999) 1 SCC 
960
[2024] 3 S.C.R.
Digital Supreme Court Reports
300 was squarely applicable to the present case – Transfers of 
employees were held to be lawful – The appeals were accordingly 
disposed of. [Paras 12-25]
Case Law Cited
Cipla Ltd. v. Jayakumar R. and Another, (1999) 1 SCC 
300 – relied on.
List of Acts
Industrial Employment (Standing Orders) Act, 1946
List of Keywords
Transfer of employees/workmen; Standing orders; Conflict with the 
standing orders; Appointment order read with the Standing Order; 
Amendment to the standing order.
Case Arising From
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2032 of 2011
From the Judgment and Order dated 02.02.2009 of the High Court of 
Karnataka Bench at Dharwad in WA No.877 of 2006 (L)
With
Civil Appeal Nos.2035 and 2033 of 2011
Appearances for Parties
C. U. Singh, Sr. Adv., Nitin S. Tambwekar, Prasant B Bhat, Seshatalpa 
Sai Bandaru, K. Rajeev, Advs. for the Appellant.
S. G. Hasnen, Sr. Adv., Varinder Kumar Sharma, Shantanu Sharma, 
Ms. Deeksha Gaur, Advs. for the Respondents.
Judgment / Order of the Supreme Court
Judgment
B.R. Gavai, J.
1.	
These appeals challenge the judgment and order passed by the 
Division Bench of the High Court of Karnataka, Circuit Bench at 
Dharwad dated 02.02.2009, vide which the appeal filed by the M/s. 
Divgi Metal Wares Employees Association, which is respondent No.1 
herein, came to be allowed. Similarly, by the said order, the Writ 
[2024] 3 S.C.R. 
961
M/s. Divgi Metal Wares Ltd. v. 
M/s. Divgi Metal Wares Employees Association & Anr.
Petition No.31808/2003 filed by Respondent No.1 was also allowed 
and the Writ Petition No.7993/2006 filed by M/s Divgi Metal Wares 
Ltd., the appellant herein, came to be dismissed.
2.	
The facts leading to the filing of the present appeals are as under:-
2.1	 The appellant is a company which manufactures automobile 
gears at two factories, one in Pune, Maharashtra and the other 
at Sirsi, Karnataka. The Respondent No.1 is a Trade Union 
registered under the provisions of the Indian Trade Unions Act, 
1926. The relations between the appellant and the respondents 
are governed by the Industrial Employment (Standing Orders) 
Act, 1946 (for short, ‘the said Act’). It is also not in dispute 
that, it was at the instance of the employer that the Deputy 
Labour Commissioner and Certifying Officer passed an order 
on 03.07.1989 thereby certifying the Standing Order. Clause 
20 of the Standing Orders reads thus:-
“20. Transfers: An employee shall be liable to be 
transferred at any time from the unit/

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