TMI Blog2020 (10) TMI 1293X X X X Extracts X X X X X X X X Extracts X X X X ..... emergency declared in June 1975 purportedly on account of internal disturbances . The effect of the explanation is to circumscribe the ambit of what constitutes a public emergency. The explanation constricts the expression in two ways: first, by confining it to specific causes; and second, by requiring that a consequence must have emanated from those causes before the power can be exercised. Under Section 5 a situation can qualify as a 'public emergency', only if the following elements are satisfied: (i) there must exist a grave emergency ; (ii) the security of India or of any part of its territory must be threatened by such an emergency; and (iii) the cause of the threat must be war, external aggression or internal disturbance. The existence of the situation must be demonstrated as an objective fact. The co-relationship between the cause and effect must exist. Implicitly therefore, the statutory provision incorporates the principle of proportionality. Precedent on 'public emergency' and 'security of the state' - HELD THAT:- The powers Under Article 352 have been invoked thrice by the President to declare an emergency. An emergency was declared for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orking 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. The impugned notifications do not serve any purpose, apart from reducing the overhead costs of all factories in the State, without regard to the nature of their manufactured products. It would be fathomable, and within the realm of reasonable possibility during a pandemic, if the factories producing medical equipment such as life-saving drugs, personal protective equipment or sanitisers, would be exempted by way of Section 65(2), while justly compensating the workers for supplying their valuable labour in a time of urgent need. However, a blanket notification of exemption to all factories, irrespective of the manufactured product, while denying overtime to the workers, is indic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the economy. Section 5 of the Factories Act could not have been invoked to issue a blanket notification that exempted all factories from complying with humane working conditions and adequate compensation for overtime, as a response to a pandemic that did not result in an 'internal disturbance' of a nature that posed a 'grave emergency' whereby the security of India is threatened. In any event, no factory/classes of factories could have been exempted from compliance with provisions of the Factories Act, unless an 'internal disturbance' causes a grave emergency that threatens the security of the state, so as to constitute a 'public emergency' within the meaning of Section 5 of the Factories Act. Notification No. GHR/2020/56/FAC/142020/346/M3 dated 17 April 2020 and Notification No. GHR/2020/92/FAC/142020/346/M3 dated 20 July 2020 issued by the Labour and Employment Department of the Respondent State, are quashed - petition allowed. - Writ Petition (Civil) No. 708 of 2020 - - - Dated:- 1-10-2020 - Dr. D.Y. Chandrachud, Indu Malhotra And K.M. Joseph, JJ. JUDGMENT Dr. D.Y. Chandrachud, J. A The Notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Factories Act, 1948 shall be exempted from various provisions relating to weekly hours, daily hours, intervals for rest etc. of adult workers Under Section 51, Section 54, Section 55 and Section 56 with the following conditions from 20th April till 19th July 2020,- (1) No adult worker shall be allowed or required to work in a factory for more than twelve hours in any day and Seventy Two hours in any week. (2) The Periods of work of adult workers in a factory each day shall be so fixed that no period shall exceed six hours and that no worker shall work for more than six hours before he has had an interval of rest of at least half an hour. (3) No Female workers shall be allowed or required to work in a factory between 7:00 PM to 6:00 AM. (4) Wages shall be in a proportion of the existing wages (e.g. If wages for eight hours are 80 Rupees, then proportionate wages for twelve hours will be 120 Rupees). On its lapse by the efflux of time, the State government issued another notification on 20 July 2020 [Both the notifications dated 17 April 2020 and 20 July 2020 were issued by the Labour and Employment Department of the State of Gujarat] . Similar in conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct enables suspension of Sections 51, 52, 54 and 56 to a class of factories owing to 'exceptional pressure of work'; (viii) Even if Section 65(2) were to apply to account for the exceptional pressure of work, a host of conditions Under Section 65(3) are attracted in order to ensure labour welfare including a limit on weekly overtime and intervals between work which the notifications fail to adopt; (ix) The notifications do not specifically exempt the application of Section 59 of the Factories Act which mandates payment of double the wages for overtime. Yet they make overtime wages proportionate to the existing wages, which also violates the spirit of the Minimum Wages Act, 1948 and amounts to forced labour violating the workers' fundamental rights Under Article 23, 21 and 14; and (x) Three industrial accidents are reported to have occurred on 7 May 2020 at Visakhapatnam, Chhattisgarh and Neyveli in hazardous industries which reopened after the lockdown with a skeletal workforce. The notifications in question will lead to similar disasters. 5. Opposing these submissions, Ms. Deepanwita Priyanka, learned Counsel appearing on behalf of the State of Gujarat, has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the economy continue to operate; (viii) Under the notifications, workers are only allowed to work for three additional hours than the normal work day. Factories have also been directed to compensate the workers proportionately for the extra working hours. There is no exploitation of labour and factories are also able to sustain themselves; and (ix) The notifications are not in violation of Articles 14, 21 and 23 of the Constitution. C The power Under Section 5 of the Factories Act, 1962 6. The issue for analysis is whether the notifications fall within the ambit of the power conferred by Section 5 of the Factories Act. The validity of the notifications depends on whether the COVID-19 pandemic and the nationwide lockdown qualify as a 'public emergency' as defined in Section 5. The statute provides both the language and the dictionary to interpret it. 7. Section 5 of the Factories Act provides that in a public emergency, the State Government can exempt any factory or class or description of factories from all or any of the provisions of the Act, except Section 67. Section 5 is extracted below: 5. Power to exempt during public emergency.--In any case of pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alify as a 'public emergency', only if the following elements are satisfied: (i) there must exist a grave emergency ; (ii) the security of India or of any part of its territory must be threatened by such an emergency; and (iii) the cause of the threat must be war, external aggression or internal disturbance. The existence of the situation must be demonstrated as an objective fact. The co-relationship between the cause and effect must exist. Implicitly therefore, the statutory provision incorporates the principle of proportionality. 9. The principle of proportionality has been recognized in a slew of cases by this Court, most notably in the seven-judge bench decision in K.S. Puttaswamy v. Union of India (2017) 10 SCC 1, para 325 The principle of proportionality envisages an analysis of the following conditions in order to determine the validity of state action that could impinge on fundamental rights: (i) A law interfering with fundamental rights must be in pursuance of a legitimate state aim; (ii) The justification for rights-infringing measures that interfere with or limit the exercise of fundamental rights and liberties must be based on the existence of a rati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abuse. Pursuant to this amendment, the expression internal disturbance was replaced with armed rebellion . Thus, a proclamation of emergency now cannot be issued on a mere internal disturbance and must reach the threshold of an armed rebellion threatening the security of India. The Parliamentary amendments to Article 352 are the product of experience: experiences gained from the excesses of the emergency, experiences about the violation of human rights and above all, experiential learning that the amalgam of uncontrolled power and unbridled discretion provide fertile conditions for the destruction of liberty. The sobering lessons learnt from our not-too-distant history should warn us against endowing a statute with similar terms of a content which is susceptible of grave misuse. 12. The expression 'internal disturbance' finds place in Article 355 of the Constitution, as well. Article 355 of the Constitution provides: 355. Duty of the Union to protect States against external aggression and internal disturbance: It shall be the duty of the Union to protect every State against external aggression and internal disturbance and to ensure that the Government of every Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the provisions of the Constitution, Article 356 refers only to one situation, viz., the third one. As against this, Article 352. which provides for Proclamation of emergency speaks of only one situation, viz., where the security of India or any part of the territory thereof, is threatened either by war or external aggression or armed rebellion. The expression internal disturbance is certainly of larger connotation than armed rebellion and includes situations arising out of armed rebellion as well. In other words, while a Proclamation of emergency can be made for internal disturbance only if it is created by armed rebellion, neither such Proclamation can be made for internal disturbance caused by any other situation nor a Proclamation can be issued Under Article 356 unless the internal disturbance gives rise to a situation in which the Government of the State cannot be carried on in accordance with the provisions of the Constitution. A mere internal disturbance short of armed rebellion cannot justify a Proclamation of emergency Under Article 352 nor such disturbance can justify issuance of Proclamation Under Article 356, unless it disables or prevents carrying on o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Constitution which has in-built checks and balances. (emphasis supplied) 16. The expression 'internal disturbance' must be interpreted in the context in which it is used. Under Article 352, an internal disturbance must be of the order of an armed rebellion threatening the security of India to proclaim an emergency. Similarly, in order to sustain a valid exercise of power Under Article 356 on the ground of an internal disturbance, it must be of such a nature as to disrupt the functioning of the constitutional order of the State; in other words, it must be of such a nature that the government of a state cannot be carried on in accordance with the Constitution. 17. On the definition of 'internal disturbance' in the context of Article 355 of the Constitution, the Report of the Sarkaria Commission on Centre-State Relations (January 1988) noted that: 6.3.04 It is difficult to define precisely the concept of 'internal disturbance'. Similar provisions, however, occur in the Constitutions of other countries. Article 16 of the Federal Constitution of Switzerland uses the expression internal disorder . The Constitutions of the United States of America and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g or unable to exercise its governmental power to relieve it. [...] 6.5.01 [...] Some examples are given below of situations in which it may be improper, if not illegal, to invoke the provisions of Article 356: [...] (ix) This power cannot be legitimately exercised on the sole ground of stringent financial exigencies of the State. (emphasis supplied) The Sarkaria Commission recognized that a range of situations may qualify to be internal disturbances. The instances of 'internal disturbance' given by the Sarkaria Commission were in the context of Article 355 and Article 356, where the breakdown of the constitutional machinery of the State is in question. In any event, the Sarkaria Commission clarified that mere financial exigencies of a State do not qualify as an internal disturbance. 18. In Anuradha Bhasin v. Union of India (2020) 3 SCC 637, ( Anuradha Bhasin ) a three judge Bench of this Court considered the definition of the expression 'public emergency' in Section 5(2) of the Telegraph Act, 1885. [Power for Government to take possession of licensed telegraphs and to order interception of messages.-- (1) * * * (2) On the occurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aggression or an internal disturbance. The expression 'internal disturbance' cannot be divorced from its context, or be read in a manner divorced from the other two expressions which precede it. They are indicative of the gravity of the cause which threatens the security of India or a part of its territory. An internal disturbance must be of a similar gravity. Further, it is necessary to evaluate whether a situation of internal disturbance threatens the security of India, or a part of its territory to qualify as a 'public emergency'. In the absence of any one or more of the constituent elements, the conditions requisite for the exercise of statutory power will not exist. 20. What is meant by the phrase security of India ? In Romesh Thapar v. State of Madras [(1950) 1 SCR 594 [The first amendment to the Constitution in 1951 expanded the area of permissible Regulation of the fundamental right Under Article 19(1) a, by amending Article 19(2)]] , a Bench, comprising six judges of this Court observed that the concept of 'security of State' is narrower than that of 'public order'. Justice Patanjali Sastry, speaking for the court held that: 7. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... freedom of speech and expression, while the right of peaceable assembly Sub-clause (b) and the right of association Sub-clause (c) may be restricted Under Clauses (3) and (4) of Article 19 in the interests of public order , which in those clauses includes the security of the State. The differentiation is also noticeable in Entry 3 of List III (Concurrent List) of the Seventh Schedule, which refers to the security of a State and maintenance of public order as distinct subjects of legislation. The Constitution thus requires a line to be drawn in the field of public order or tranquillity marking off, may be, roughly, the boundary between those serious and aggravated forms of public disorder which are calculated to endanger the security of the State and the relatively minor breaches of the peace of a purely local significance, treating for this purpose differences in degree as if they were differences in kind. (emphasis supplied) 21. The difference between law and order, public order and security of the State was demarcated by this Court in Ram Manohar Lohia v. State of Bihar AIR 1966 SC 740. In a celebrated passage, Justice M. Hidayatullah observed: 55. [...] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as in search of the bare necessities to sustain life. There has been a loss of incomes and livelihood. The brunt of the pandemic and of the lockdown has been borne by the working class and by the poorest of the poor. Bereft of social security, they have no fall back options. The Respondent has in exercise of its powers Under Section 5 of the Factories Act issued the impugned notifications purportedly to provide a fillip to industrial and commercial activities. 25. Before this Court, the Petitioners have submitted that the present situation does not threaten the security of India or a part of its territory. According to them the Respondent has failed to demonstrate the existence of such a threat. The exercise of powers Under Section 5 of the Factories Act is challenged as ultra vires the Factories Act. 26. In response, the Respondent, on one occasion in their written submissions, has argued that the COVID-19 pandemic was leading to financial chaos and the situation was on the brink of internal disturbance . In other places, the Respondent has urged that the economic slowdown caused by the pandemic constitutes a public emergency, warranting the need to issue the impugned notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the Central Government. Unless the threshold of an economic hardship is so extreme that it leads to disruption of public order and threatens the security of India or of a part of its territory, recourse cannot be taken to such emergency powers which are to be used sparingly under the law. Recourse can be taken to them only when the conditions requisite for a valid exercise of statutory power exist Under Section 5. That is absent in the present case. F Scheme and Objects of the Factories Act, 1962 29. The Respondent's purpose in invoking the emergency powers under the Factories Act is to counter the effects of the economic slowdown caused by the lockdown. In analyzing the scope and intent of Section 5 of the Factories Act and the specific exemptions of Section 51, 54, 55 and 56 envisaged by the impugned notifications, it is necessary to examine the purpose of the Factories Act, in the backdrop of the constitutional scheme of the Indian welfare State. The Factories Act was enacted almost contemporaneous with the framing of the Constitution. The Factories Act is a product of history; of a long struggle of worker unions to secure the right to human dignity in workplac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lwark against harsh and oppressive working conditions. The Act, primarily applies to establishments employing more than 10 persons. It has been purposively and expansively applied to workers, who may not strictly fall within the purview of the definition, and yet embody similar roles within the establishments. These permissible interpretations have been aligned with the intention of the legislature which has a vital concern in preventing exploitation of labour. 31. 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 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 which are extracted below: 51. Weekly hours -- No adult worker shall be required or al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 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. 34. 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 excep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t concerned to impose any duties upon the employer. It is however now recognised that the State has a vital concern in preventing exploitation of labour and in insisting upon proper safeguards for the health and safety of the workers. The Factories Act undoubtedly imposes numerous restrictions upon the employers to secure to the workers adequate safeguards for their health and physical well-being. But imposition of such restrictions is not and cannot be regarded in the context of the modern outlook on industrial relations, as unreasonable. Extension of the benefits of the Factories Act to premises and workers not falling strictly within the purview of the Act, is intended to serve the same purpose. By authorising imposition of restrictions for the benefit of workers who in the view of the State stand in need of some or all the protections afforded by the Factories Act, but who are not governed by the Act, the legislature is merely seeking to effectuate the object of the Act i.e. it authorises extension of the benefit of the Act to persons to whom the Act, to fully effectuate the object, should have been, but has on account of administrative or other difficulties not been extended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titution measure was the offspring of that movement. Under our present Constitution the State is now expressly directed to endeavour to secure to all workers (whether agricultural, industrial or otherwise) not only bare physical subsistence but a living wage and conditions of work ensuring a decent standard of life and full enjoyment of leisure. This Directive Principle of State Policy being conducive to the general interest of the public and, therefore, to the healthy progress of the nation as a whole, merely lays down the foundation for appropriate social structure in which the labour will find its place of dignity, legitimately due to it in lieu of its contribution to the progress of national economic prosperity. [...]. We are, therefore, clearly of the view that Rule 25 contemplates for overtime work double the rate of wages which the worker actually receives, including the casual requisites and other advantages mentioned in the explanation. This rate, in our opinion, is intended to be the minimum rate for wages for overtime work. The extra strain on the health of the worker for doing overtime work may well have weighed with the rule-making authority to assure to the work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he employers and in these days of high prices the workers are not able to make their both ends meet. In a civilized society, every person is entitled to the basic needs of life such as lodging, boarding and clothing to keep his body and soul together. It is in this background that the expression 'basic wages' is to be interpreted as defined in the Act. The last settlement itself shows that two types of remuneration are fixed for work being done during the additional hours and overtime hours. While remuneration for additional hours, i.e. beyond the normal hours, is fixed at one and a half times, the remuneration for overtime, i.e. beyond the statutory hours is fixed at double the normal hour rate. It clearly shows that remuneration for additional hours is not considered as an overtime allowance and two rates of payment are fixed, one for the additional hours which come within the normal statutory working hours and the other for the overtime hours which are beyond the normal statutory working hours. (emphasis supplied) 41. The principle of paying for overtime work at double the rate of wage is a bulwark against the severe inequity that may otherwise pervade a rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licy, were the driving force in the Constituent Assembly's goal to achieve economic equality and independence [Granville Austin, The Indian Constitution: Cornerstone of a Nation (Oxford University Press, 1966) at pages 74-77] . Although the Directive Principles were not intended to be capable of being independently enforced before the courts to invalidate a legislation, they inform state policies; act as a guidepost for legislation and provide sign posts for travelers engaged on the path of understanding the complexities which the Constitution unravels. Eminent legal scholar Upendra Baxi, while reviewing Granville Austin's work on the Indian Constitution had analysed the dichotomy of justiciability and non-justiciability of Fundamental Rights and Directive Principles. He had noted- ..In no other area of constitutional scholarship, the need to ascend from the planet of platitudes to an analytic paradise is more compelling than in the study of directive principles [Upendra Baxi, The Little Done, The Vast Undone - Some Reflections on Reading Granville Austin's The Indian Constitution , Journal of the Indian Law Institute (1967) Vol. 9 No. 3, at page 360] ...The fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egislation or economic organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life standard of life and full enjoyment of leisure and social and cultural opportunities and, in particular, the State shall endeavour to promote cottage industries on an individual or co-operative basis in rural areas. ] of the Constitution. It does so by attempting to neutralize the excesses in the skewed power dynamics between the managements of factories and their workmen by ensuring decent working conditions, dignity at work and a living wage. Ideas of 'freedom' and 'liberty' in the Fundamental Rights recognized by the Constitution are but hollow aspirations if the aspiration for a dignified life can be thwarted by the immensity of economic coercion. 43. The expression 'worker' as defined in the Factories Act, is broad enough to include persons who are indirectly employed as contract labour and contribute to the manufacturing process at the establishment. [ National Thermal Power Co-operation v. Karri Pothuraju, (2003) 7 SCC 384; Barat Fritz Werner Ltd. v. State o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omic democracy. Now, having regard to the fact that there are various ways by which economic democracy may be brought about, we have deliberately introduced in the language that we have used, in the directive principles, something which is not fixed or rigid. We have left enough room for people of different ways of thinking, with regard to the reaching of the ideal of economic democracy, to strive in their own way, to persuade the electorate that it is the best way of reaching economic democracy, the fullest opportunity to act in the way in which they want to act. However, flexibility for succeeding generations to develop their models of economic democracy would not in the vision of the Framers allow a disregard of socio-economic welfare. Dr Ambedkar, in defending the retention of the word 'strive' in Article 38 of the Directive Principles emphatically noted: The word 'strive' which occurs in the Draft Constitution, in judgment, is very important. We have used it because our intention is even when there are circumstances which prevent the Government, or which stand in the way of the Government giving effect to these Directive Principles, they shall, even under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onditions and adequate compensation for overtime, as a response to a pandemic that did not result in an 'internal disturbance' of a nature that posed a 'grave emergency' whereby the security of India is threatened. In any event, no factory/classes of factories could have been exempted from compliance with provisions of the Factories Act, unless an 'internal disturbance' causes a grave emergency that threatens the security of the state, so as to constitute a 'public emergency' within the meaning of Section 5 of the Factories Act. We accordingly allow the writ petition and quash Notification No. GHR/2020/56/FAC/142020/346/M3 dated 17 April 2020 and Notification No. GHR/2020/92/FAC/142020/346/M3 dated 20 July 2020 issued by the Labour and Employment Department of the Respondent State. 46. As a consequence of this judgment, and in the interest of doing complete justice Under Article 142 of the Constitution, we direct that overtime wages shall be paid, in accordance with the provisions of Section 59 of the Factories Act to all eligible workers who have been working since the issuance of the notifications. 47. Pending application(s), if any, are disp ..... 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