1

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 :- 20

th 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 1

st, 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 13

th

, 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 13

th, 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 4

th

pay commission recommended an increase of

working hours to 44 hours per week in the mints offices. Accordingly

on 16

th

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 9

th, 1994, the 5

th 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 5

th 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 18

th

, 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 15

th

, 1998, where

the following were discussed and agreed to-

a) The mint workers will work for 44 hours per week as

recommended by the 5

th pay commission;

b) The mint authority will extend all the benefits/salary

increments as per the 5

th 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 5

th, 1998, the parties herein

confirmed the minutes of discussion recorded in the meeting held at

New Delhi on April 15

th, 1998 before the Regional Conciliation Officer.

The Notice of Strike was withdrawn by the workmen.

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14. By order dated May 13

th, 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 16

th January, 1988, as

already stated hereinabove. The minutes of the meeting dated 15

th

April 1998 and conciliation report dated 5

th 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 8

th

, 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 15

th, 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 6

th

, 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 6

th, 2005 passed by the Ministry of Labour,

Government of India, made a reference to the National Industrial

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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 30

th

, 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 15

th, 1998 and

conciliation Report dated May 5

th, 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 5

th 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 20

th

, 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 20

th

, 2025 impugned in this appeal was pronounced. The

said writ petition was withdrawn with a leave to approach this Court. By

order dated January 6

th

, 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

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23. Learned Senior Counsel for the mint workers/appellant has argued

that the minutes of the meeting dated April 15

th

, 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 5

th

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

10

conditions, 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

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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

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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 15

th

, 1998, and

thereafter placed before the conciliation officer on May 5

th, 1998 for

its final confirmation.

b) Positive Conduct amounts to acceptance.

32. On May 5

th, 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 5

th

,

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

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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 4

th 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

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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 4

th and 5

th 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 5

th

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 4

th

and 5

th

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 4

th and 5

th 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

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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

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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

19

in 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

20

with 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 5

th

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 15

th, 1998 and

thereafter the said minutes of meeting were confirmed in conciliation

proceedings on May 5

th, 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 5

th 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-à-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)