Appeal No 497 of 1963
Appeal by special leave from the judgment and order dated September 10 1960 of the Bombay High Court in Appeal No 10 of 1959
Bishan Narain and 1
N Shroff for the appellant
H N Sanyal Solicitor General of India V section Sawhney and R H Dhebar for respondent
No 1
section V Gupte Additional Solicitor General of India J B Dadachanji O C Mathur and Ravinder Narain for respondent No 2
December 19 1963
The Judgment of the Court was delivered by GAJENDRAGADKAR J
The principal point of law which this appeal raises for our decision relates to the construction of section 25Fc of the No 14 of 1947 hereinafter called the Act
The Bombay Union of Journalists which is the Trade Union registered under the  Mrs Aruna Mukherji and Mr M T Thomas are appellants 1 to 3 and the State of Bombay and the Indian National Press Bombay which is a Private Ltd Co are respondents 1 and 2 respectively in the present appeal
Appellant No 2 was appointed on the staff of the second respondent on a salary of Rs 500 pm with effect from 1st January 1955
On the 30th November 1957 she was served with notice of termination of her services with effect from 1st December 1957
The notice recited the fact that the management in Consultation with the Editor had decided to retrench her services
Appellant No 3 Mr Thomas who was employed as a Sub Editor in the Free Press Journal  some time in 25 1953 was similarly served with a notice of retrenchment dated the 30th November 1957 by which his services were terminated as from the 1st December 1957
In both the notices the two appellants respectively were told that their services had been retrenched under section 32 of the Working Journalists Conditions of Service and Miscel laneous Provisions Act 1955 and that in lieu of notice they would be paid their salaries for three months
Both the appellants collected their salaries for the month of November and ceased to work for respondent No 2 as from the 1st December 1957
It appears that appellant No 1 took up their cause on the 3rd December 1957 and wrote to the Director in charge of the second respondent complaining that the action taken by the 2nd respondent smacked of vindictiveness against appellants 2 and 3 and demanded that the notices issued should be withdrawn forthwith and they should be reinstated in their original posts
Respondent No 2 did not concede the said demand thereupon appellant No 1 moved the Labour Commissioner of respondent No 1 for taking further action in the matter
At that stage the Conciliation Officer intervened and called the parties before him
As a result of the discussion held before the Conciliation Officer it was discovered that no settlement was possible and so the Conciliation Officer submitted a failure report under section 124 of the Act on the 15th April 1958
In this report the Conciliation Officer expressed his opinion that in view of the stand taken by the parties there was no possibility of any settlement and so he was compelled to record a failure
After the matter was thus reported to respondent No 1 by its Conciliation Officer both the parties filed their res pective statements before respondent No 1
Respondent No 1 considered the said statements and the report submitted by the Conciliation Officer and came to the conclusion that it was not necessary to refer the dispute to a Tribunal under section 125 of the Act
This decision was communicated to the appellants by the Dy
Secretary Labour and Social Welfare Department of respondent No 1 by his letter dated 1st July 1958
It is necessary to set out the reasons given 26 in this letter for not referring the dispute to the Tribunal
These reasons were set out in the letter in these terms 1 The termination of services of Shrimati Aruna Mukherji and Shri M T Thomas a ppears to be an act of retrenchment on the part of the management for which the management is willing to pay all the legal dues to the retrenched persons and 2 in effecting the said termination the management does not appear to have acted mala fide or vindictively nor practised victimisation for trade union activities
 The appellants then moved the Bombay High Court under article 226 of the Constitution for a writ of mandamus against respondent No 1
It was urged on their behalf that the refusal of respondent No 1 to refer the dispute to the Industrial Tribunal under section 125 of the Act was illegal and so they prayed that the High Court should issue a writ directing respondent No 1 to consider the matter afresh and decide whether a reference should be made or not
This writ petition was heard by a single Judge of the said High Court and was ultimately dismissed
The appellants challenged the correctness of the said decision by a Letters Patent Appeal before a Division Bench of the High Court
The Division Bench agreed with the view taken by the learned single Judge and so the appeal was dismissed
It is against this decision that the appellants have come to this Court by special leave
The first contention which has been raised before us by Mr Bishan Narain on behalf of the appellants is that the reasons given by respondent No 1 in refusing to make a reference show that respondent No 1 considered the merits of the dispute and came to the conclusion that the reference would not be justified and Mr Bishan Narain contends that in dealing with the merits of the dispute while deciding the question as to whether a reference should be made or not under s125 of the Act respondent No 1 has acted illegally and improperly
The relevant scheme of the Act as disclosed by section 12 is clear
When any industrial dispute exists or 27 is apprehended the Conciliation Officer may hold conciliation proceedings in the manner prescribed by section 12
If the Conciliation Officer s efforts to bring out a settlement of the dispute fail then he makes a failure report under section 124 and section 125 provides inter alia that if on a consideration of the report referred to in sub section 4 the appropriate Government is satisfied that there is a case for reference to the Tribunal it may make such reference
It however adds that where the appropriate Government does not make such a reference it shall record and communicate to the parties concerned its reasons therefor
The argument is that section 125 imposes an obligation on respondent No 1 to record reasons for refusing to make a reference and the reasons given by respondent No 1 in the present case indicate that respondent No 1 acted beyond its jurisdiction in proceeding to consider the merits of the dispute while deciding whether the reference should be made or not
This argument must be rejected because when the appropriate Government considers the question as to whether a reference should be made under section 125 it has to act under section 101 of the Act and section 101 confers discretion on the appropriate Government either to refer the dispute or not to refer it for industrial adjudication according as it is of the opinion that it is expedient to do so or not
In other words in dealing with an industrial dispute in respect of which a failure report has been submitted under section 124 the appropriate Government ultimately exercises its power under s 101 subject to this that section 125 imposes an obligation on it to record reasons for not making the reference when the dispute has gone through conciliation and a failure report has been made under section 124
This question has been considered by this Court in the case of the State of Bombay vs K P Krishnan  Others 1
The decision in that case clearly shows that when the appropriate Government considers the question as to whether any industrial dispute should be referred for adjudication or not it may consider prima facie the merits of the dispute and take into account other relevant considerations which would help it to decide whether making a reference would be expedient or not
It is true that if the dispute in question raise questions of law 1 28 the appropriate Government should not purport to reach a final decision on the said questions of law because that would normally lie within the jurisdiction of the Industrial Tribunal
Similarly on disputed questions of fact the ap propriate Government cannot purport to reach final con clusions for that again would be the province of the Indus trial Tribunal
But it would not be possible to accept the plea that the appropriate Government is precluded from considering even prima facie the merits of the dispute when it decides the question as to whether its power to make a reference should be exercised under section 101 read with s125 or not
if the claim made is patently frivolous or is clearly belated the appropriate Government may refuse to make a reference
Likewise if the impact of the claim on the general relations between the employer and the em ploys in the region is likely to be adverse the appropriate Government may take that into account in deciding whether a reference should be made or not
It must therefore be held that a prima facie examination of the merits cannot be said to be foreign to the enquiry which the appropriate Government is entitled to make in dealing with a dispute under section 101 and so the argument that the appropriate Government exceeded its jurisdiction in expressing its prima facie view on the nature of the termination of services of appellants 2 and 3 cannot be accepted
Mr Bishan Narain has then urged that the main point of controversy between the parties was in regard to the failure of respondent No 2 to comply with the provisions of section 25Fc of the Act and that has not been considered by respondent No 1 while refusing to make a reference in the present case
Section 25Fc provides that no workman to which the said provision applies shall be retrenched by the employer until notice in the prescribed manner is served on the appropriate Government
It is common ground that notice had not been served by respondent No 2 on respondent No 1 as required by section 25Fc prior to the termination of services of appellants 2  3 and the argument is that the reasons mentioned by respondent No 1 in its communication to appellant No 1 indicating its refusal to make a reference show that this aspect of the matter has not been 29 considered by respondent No 1 and that it is urged in troduces a serious infirmity in the said reasons and calls for a writ of mandamus requiring respondent No 1 to rectify the said omission
There is no substance in this argument
It appears that the Rules framed by respondent No 1 under the Act indicate that respondent No 1 has construed the provision of section 25Fc as being directory and not as constituting a condition precedent for the validity of retrenchment under section 25F Rule 80 of the said Rules clearly Shows that where the employer has retrenched the employee by offering to pay him the requisite amount of remuneration in lieu of notice prescribed by section 25Fa the employer is required to serve the notice of the aid retrenchment within seven days of the date of retrenchment and that means that in such a case the notice has not to be served on the Government before retrenchment is effected
In other words R 80 it is conceded treats the notice prescribed by section s 25Fc as condition subsequent and not a condition precedent
In view of the Rule framed by itself respondent No 1 must not have thought it necessary to make any reference to the argument urged by the appellants that respondent No 2 s failure to serve a notice on respondent No 1 before retrenchment was effected introduced an infirmity in the order of retrenchment
Rule 80 framed by respondent No 1 was itself an answer to the said plea and so respondent No 1 may well have thought that it was unnecessary to give that reason in its communication to the appellants
Besides in dealing with this contention it is necessary to remember that in entertaining an application for a writ of mandamus against an order made by the appropriate Government under section 101 read with section 125 the Court is not sitting in appeal over the order and is not entitled to consider the propriety or the satisfactory character of the reasons given by the said Government
It would be idle to suggest that in giving reasons to a party for refusing to make a reference under section 125 the appropriate Government has to write an elaborate order indicating exhaustively all the reasons that weighed in its mind in refusing to make a reference
It is no doubt desirable that the party concern ed should be told clearly and precisely the reasons why no reference is made because the object of section 125 appears 30 to be to require the appropriate Government to state its reasons for refusing to make a reference so that the reasons
should stand public scrutiny but that does not mean that a party challenging the validity of the Government s decision not to make a reference can require the Court in writ proceedings to examine the propriety or correctness of the said reasons
If it appears that the reasons given show that the appropriate Government took into account a consideration which was irrelevant or foreign that no doubt may justify the claim for a writ of mandamus
But the argument that of the pleas raised by the appellants two have been considered and not the third would not necessarily entitle the party to claim a writ under article 226
That takes us to the main point which has been strenuously argued before us by Mr Bishan Narain with regard to the construction of section 25Fc
His contention is that just as section 25Fa and b are both mandatory and constitute conditions precedent for valid retrenchment so is section 25Fc mandatory and a condition precedent
The prohibition contained in section 25F is put in the negative form and it is coupled with the condition that no retrenchment can be effected until the three conditions specified by clauses a
b and c are satisfied
The negative form adopted by the provision coupled with the use of the word until which introduces the three conditions indicates that the conditions must be first satisfied before retrenchment can be validly effected
In this connection Mr Bishan Narain has referred to the decision of this Court in the State of Bombay  Others vs The Hospital Mazdoor Sabha  Ors
1 where it has been held that the requirement prescribed by section 25Fb is mandatory and has to be complied with before an industrial employee can be retrenched
Dealing with section 25Fb it was observed in that judgment that clauses a and c of the said section prescribed similar conditions though it was expressly added that the Court was then not concerned to construe them
Mr Bishan Narain has also invited our attention to the fact that in Tea Districts Labour Association Calcutta vs Ex Employees of Tea Districts 1  31 Labour Association and Anr1 it was conceded that the requirement as to notice prescribed by section 25Fc was mandatory and amounted to a condition precedent
Likewise it appears that in the case of The Workmen of Subong Tea Estate vs The Outgoing Management of Subong Tea Estate  Anr
2 recently decided by this Court it has been incidentally stated that the three conditions prescribed by clauses a b and c of section 25F appear prima facie to constitute conditions precedent before an industrial workman can be validly retrenched
In that case no question arose about the construction and effect of the provisions of section 25F and the observations are clearly in the nature of obiter observations and even then they indicate that the Court thought that prima facie the three conditions may be similar
No decision of this Court has been cited before us where this question has been directly considered and de cided
Mr Bishan Narain however urges and with some force that the nomal rule of construction requires that if clauses a and b of section 25F constitute conditions precedent clause c in the context must also receive the same construction
Prima facie this argument is no doubt attractive but a closer examination of the section shows that clausec of section 25F cannot receive the same construction as clauses a and b of section 25F Section 25Fa requires that the workman has to be given one month s notice in writing
indicating the reasons for retrenchment and the period of notice has to expire before the retrenchment takes place
It also provides that the workman can be paid in lieu of such notice wages for the said period
It is the latter provision of clause a which requires careful consideration in dealing with the character of the requirement prescribed by section 25Fc
This latter provision allows the employer to re trench the workman on paying him his wages in lieu of notice for one month prescribed by the earlier part of clause a and that means that if the employer decides to retrench a workman he need not give one month s notice in writing and wait for the expiration of the said period before he 1  2 32 retrenches him he can proceed to retrench him straightaway on paying him his wages in lieu of the said notice
Take a case where retrenchment is effected under this latter provision of clause a how would the requirement of clause c operate in such a case If it is held that the notice in the prescribed manner has to be served by the employer on the appropriate Government before retrenching the employee in such a case it would mean that even in a case where retrenchment is effected on payment of wages in lieu of notice it cannot be valid unless the requisite notice is served on the appropriate Government and that does not appear to be logical or reasonable
Reading the latter part of clause a and clause c together it seems to follow that in cases falling under the latter part of cl
a the notice prescribed by cl
c has to be given not before retrenchment but after retrenchment otherwise the option given to the employer to bring about immediate retrenchment of the workman on paying him wages in lieu of notice would be rendered nugatory
Therefore it seems that clause c cannot be held to be a condition precedent even though it has been included under section 25F along with clauses a and b which prescribe conditions precedent
The argument based on the negative form in which the provision is enacted and the use of the word until no doubt are in favour of the appellant s contention but the context seems to require a different treatment to the provision contained in clause c
Besides the requirement introduced by the use of the word until is complied with even on the view we are inclined to take about the nature of the condition prescribed by clause c because after the retrenchment is effected the employer has to comply with the condition of giving notice about the said retrenchment to the appropriate Government and that is where the provision in clause c that the notice has to be served in he prescribed manner assumes significance
Rules have been framed by the Central Government and the State Governments in respect of this notice and stated broadly it does appear that these Rules do not require a notice to be served in every case before retrenchment is effected
In regard to retrenchment effected on paying the workman his wages in lieu of notice the Rules seem to provide that the notice in 33 that behalf should be served within the specified period prescribed by them that is to say under the Rules notice in such a case has to be served not before the retrenchment but after the retrenchment within the specified period
Mr Bishan Narain no doubt contends that if his construction of section 25Fc is correct the Rules would be invalid and that is true but on the view we are inclined to take the Rules framed by the Government appear to be consistent with the policy underlying the provision prescribed by section 25Fc
We are therefore satisfied that section 25Fc cannot be said to constitute a condition precedent which has to be fulfilled before retrenchment can be validly effected
In this connection there is one more consideration which is relevant
We have already seen the requirement of section 25Fa
There is a proviso to s 25Fa which lays down that no such notice shall be necessary if the retrenchment is under an agreement which specifies a date for the termination of services
Clause a of section 25F therefore affords a safeguard in the interests of the retrenched em ployee it requires the employer either to give him one month s notice or to pay him wages in lieu thereof before he is retrenched
Similarly clause b provides that the workman has to be paid at the time of retrenchment com pensation which shall be equivalent to 15 days  average pay for every completed year of service or any part thereof in excess of six months
It would be noticed that this payment has to be made at the time of retrenchment and this requirement again provides a safeguard in the interests of the workman he must be given one month s notice or wages in lieu thereof and he must get retrenchment compensation as prescribed by clause b
The object which the Legislature had in mind in making these two conditions obligatory and in constituting them into conditions precedent is obvious
These provisions have to be satisfied before a workman can be retrenched
The hardship resulting from retrenchment has been partially redressed by these two clauses and so there is every justification for making them conditions precedent
The same cannot be said about the requirement as to clause c
Clause c is not intended to protect the interests of the workman as such
It is only intended to give intimation to the appropriate Government about the retrenchment and 134 159 SC 3
34 that only helps the Government to keep itself informed about the conditions of employment in the different industries within its region
There does not appear to be present any compelling consideration which would justify the making of the provision prescribed by clause c  a condition precedent as in the case of clauses a  b
Therefore having regard to the object which is intended to be achieved by clauses a  b as distinguished from the object which clause c has in mind it would not be unreasonable to hold that clause c unlike clauses a  b is not a condition precedent
There is one more point which ought to be mentioned before we part with this appeal
Even if we had held that section 25Fc constitutes a condition precedent it would not have been easy to accept Mr Bishan Narain s contention that a writ of mandamus should be issued against respondent No 1
A writ of mandamus could be validly issued in such a case if it was established that it was the duty and the obligation of respondent No 1 to refer for adjudication an industrial dispute where the employee contends that the retrenchment effected by the employer contravenes the provisions of section 25Fc
Can it be said that the appropriate Government is bound to refer an industrial dispute even though one of the points raised in the dispute is in regard to the contravention of a mandatory provision of the Act In our opinion the answer to this question cannot be in the affirmative
Even if the employer retrenches the workman contrary to the provisions of section 25Fc it does not follow that a dispute resulting from such retrenchment must neces sarily be referred for industrialist adjudication
The breach of section 25F is no doubt a serious matter and normally the appropriate Government would refer a dispute of this kind for industrial adjudication but the provision contained in section 101 read with section 125 clearly shows that even where a breach of section 25F is alleged the appropriate Government may have to consider the expediency of making a reference and if after considering all the relevant fact the appropriate Government comes to the conclusion that it would be inexpedient to make the reference it would be competent to it to refuse to make such a reference
We ought to add that when we are discussing this legal position we are necessarily 35 assuming that the appropriate Government acts honestly and bona fide
If the appropriate Government refuses to make a reference for irrelevant considerations or on extraneous grounds or acts mala fide that of course would be another matter in such a case a party would be entitled to move the High Court for a writ of mandamus
The result is the appeal fails and is dismissed
There would be no order as to costs
Appeal dismissed


Summary:
The appellants 2 and 3 were working journalists and they were retrenched on payment of three months salary in lieu of notice
The first appellant took up their case and alleged that the retrenchment was not bona fide and they were in fact victimised
On the failure of conciliation proceedings a report was submitted to the State Government respondent No 1
After hearing the parties concerned the Government passed an order refusing to refer the dispute
The reasons given 23 for the refusal were that the termination of service was retrenchment and the management did not appear to have acted mala fide
Thereupon the appellants filed a petition under article 226 of the Constitution praying for the issue of a writ of mandamus directing the Government to consider the matter afresh
The single Judge who heard the petition dismissed it and after appealing to a Division Bench without success the present appeal was filed by special leave granted by this Court
It was contended on behalf of the appellants that the Government while deciding whether a reference should be made has in fact decided the merits of the case and therefore the order of refusal to refer was illegal
The other contention was that the service of notice as required under section 25Fc of the Act was mandatory and the management not having served such a notice the Government ought to have taken this failure into consideration which the Government has not done
Held When the appropriate Government considers the question as to whether any industrial dispute should be referred for adjudication or not it may consider prima facie the merits of the dispute and take into account other relevant considerations which would help it to decide whether making a reference would be expedient or not
If the dispute in question raises a question of law or disputed questions of fact the Government should not purport to reach final conclusions because these are matters which would normally be within the jurisdiction of the Industrial Tribunal
If the claim made is patently frivolous or is clearly belated or if the impact of the claim on the general relations between the employers and the employees in the region is likely to be adverse the Government may refuse to make a reference
The State of Bombay vs K P Krishnan ii Clause c of section 25F of the Act cannot be said to cons titute a condition precedent which has to be fulfilled before retrenchment can be validly effected even though that clause has been included under section 25F along with cls
a and b which prescribe conditions precedent
The observations in the following cases to the effect that section 25F c is mandatory are clearly in the nature of orbiter dicta
State of Bombay vs The Hospital Mazdoor Sabha   The District Labour Association Calcutta vs Ex Employees of Tea Districts Labour Association and Workmen of Subhong Tea Estate vs The outgoing Management of Subhong Tea Estate 1964 Y LLJ 333 iii Even if section 25Fc was constituted a condition precedent it would not necessarily follow that a writ of mandamus should be issued against the Government
The breach of section 25Fc by the Management is a serious matter and the Government normally would refer such a dispute for adjudication
But the provision of section 101 read with section 125 clearly shows that even where there is a breach of section 25Fc the Government may have to consider the expediency of making a reference
But 24 if the Government refuses to make a reference for irrelevant considerations or on extraneous grounds or acts mala fide a party would be entitled to move the High Court for a writ of mandamus