1997 (7) TMI 526 - HC - Companies Law

Summary

Issues:
Challenge to change in working hours for executives without proper approval and consultation.

Analysis:
The case involved a challenge to an order passed by the Chief Engineer of a company, affecting the working hours of executives at a specific site office. The petitioners, an association of executives and individual executives, contended that the change in working hours was made arbitrarily and unilaterally, without providing additional remuneration for the increased hours. They argued that the change violated the provisions of the Public Sector Iron & Steel (Restructuring) Companies and Miscellaneous Provisions Act, 1978, which required proper approval before amending service conditions. The company, on the other hand, argued that the change in working hours fell within the authority of the chairman-cum-managing director and was done in the interest of the company. The company also pointed out that working hours varied across different site offices of the company.

The learned single Judge found that there was no evidence presented to show whether the order had the approval of the board of directors. The company later filed an appeal, submitting the original order of the chairman-cum-managing director and minutes of the board meeting, which ratified the change in working hours. The appellate court noted that the decision was taken by the chairman-cum-managing director between board meetings and was subsequently approved by the board of directors. The court emphasized that there were no specific service rules governing working hours, and therefore, the determination of working hours did not constitute a change in service conditions. Citing a Supreme Court case, the court reiterated that an increase in working hours did not amount to a change in service conditions.

Based on the evidence presented, the appellate court concluded that the decision to increase working hours was within the authority of the chairman-cum-managing director and subsequently ratified by the board of directors. The court held that the view taken by the learned single Judge was not well-founded and allowed the appeal, setting aside the earlier order and dismissing the petition. No costs were awarded in the matter.