Safiya Malik

The High Court of Judicature at Bombay, Single Bench of Justice Amit Borkar, dismissed a writ petition filed by a municipal corporation challenging an interim order that stayed the corporation's circular discontinuing additional wage increments for employees who acquired certain local government diplomas. The Court held that when a discretionary benefit is extended repeatedly over decades through formal administrative approvals and published circulars, it may crystallise into a customary concession, and its withdrawal — even prospectively — constitutes a change in service conditions attracting the mandatory notice requirement under the Industrial Disputes Act, 1947. The Court upheld the Industrial Court's interim direction to maintain the prior practice pending final adjudication of the unfair labour practice complaint filed by the employees' union.

The petitioners, a municipal corporation and its senior administrative officers, challenged an interim order passed by the Industrial Court in a complaint alleging unfair labour practice. The Industrial Court had stayed a circular dated 05 September 2025 which discontinued the long-standing practice of granting one or two additional wage increments to employees acquiring LSGD and LGS diplomas, and directed continuation of the prevailing practice pending adjudication.

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The record showed that the corporation had, from 1967 onwards, resolved through successive resolutions and circulars to grant additional increments to clerical staff acquiring specified diplomas. The policy was modified in 1968, 1975 and 1984, and later in 2009. In August 2025, a proposal was placed to discontinue the benefit. The Administrator approved the discontinuation, and a circular was issued on 05 September 2025.

The respondent union filed a complaint contending that the withdrawal amounted to alteration of service conditions without notice under Section 9-A of the Industrial Disputes Act, 1947, read with Items 5, 8 and 9 of the Fourth Schedule. The petitioners contended that the benefit was discretionary and that no reduction of wages already granted occurred.

The Court examined the statutory framework and recorded that “Section 9-A of the Industrial Disputes Act restrains an employer from effecting any change in the conditions of service applicable to workmen in respect of matters enumerated in the Fourth Schedule unless a notice of change is first issued in the prescribed manner.” It further stated that “The provision introduces a waiting period of twenty one days after issuance of such notice, during which the proposed change cannot be implemented.”

On the scope of Item 8, the Court observed that “The expression ‘customary concession’ is not confined to statutory rights or contractual stipulations alone.” It added that “A benefit extended consistently over a period of time, acted upon, and accepted as part of the service may acquire the character of a customary concession.” The Court recorded that “Once such a character is established, its withdrawal falls within the purview Section 9-A.”

Regarding the history of the increments, the Court noted that “When a concession is repeatedly sanctioned by formal resolutions, implemented uniformly, and continued without interruption for a long duration, it acquires sanctity within the establishment.” It further recorded that “The record supports the inference that the grant of additional increments for LSGD and LGS diplomas had attained that character.”

On the effect of the impugned circular, the Court stated that “The circular dated 5 September 2025 effects a prospective discontinuance of the benefit.” It clarified that “The fact that the change operates prospectively does not dilute its character as a change.” The Court observed that “By withdrawing the concession for the future, the Corporation has altered the framework within which employees may seek advancement in pay upon acquisition of qualifications.” It concluded at the prima facie stage that “the prospective withdrawal of a long standing concession constitutes a change attracting the mandate of Section 9-A.”

On interim relief, the Court recorded that “The Industrial Court has not conclusively pronounced upon the legality of the circular. It has not declared the circular invalid. It has only kept it in abeyance until final adjudication.” It further observed that “The present order is temporary in nature. It operates only to prevent possible prejudice during the pendency of the complaint.”

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The Court recorded, “The writ petition is dismissed. The interim order of the Industrial Court dated 11 December 2025 is upheld. At the request of learned Advocate for the petitioner, ad-interim relief granted earlier shall continue to operate for a period of four weeks from today. No order as to costs.”

Advocates Representing the Parties:

For the Petitioners: Mr. N.V. Bandiwadekar, Senior Advocate with Mr. Santosh Parad
For the Respondents: Mr. Prakash Devdas with Ms. Vidula Patil; Mr. Satyanarayan Hegde i/by Mr. V. Khemka

Case Title: Brihanmumbai Municipal Corporation & Ors. v. Mumbai Mahanagarpalika Karyalayeen Karmachari Sanghatana & Anr.
Neutral Citation: 2026: BHC-AS:7255
Case Number: Writ Petition No. 12 of 2026 with Writ Petition (ST.) No. 41402 of 2025
Bench: Justice Amit Borkar