Appeal No 1065 of 1965
Appeal by special leave from the judgment and order dated February 27 1963 of the Mysore High Court in Writ Petition No 1096 of 1961
M K Ramamurthi for the appellants
O P Malhotra P C Bhathari and O C Mathur for respondent No 1
The Judgment of the Court was delivered by Sikri J
This appeal by special leave is directed against the judgment of the Mysore High Court in Writ Petition No 1096 of 1961 by which the High Court allowed the Writ Petition and quashed the impugned award dated June 30 1961 made by the Labour Court Bangalore in Reference No 51 of 1960
In order to appreciate the points raised before us it is necessary to give the relevant facts
The second appellant before us R Mahalingam was engaged as a Foreman in the workshop of Sri Rangavilas Motors P Ltd the first respondent hereinafter referred to as the Company in the month of April 1956
By an order dated January 21 1960 Mahalingam was transferred from Bangalore to Krishnagiri where the head office of the Company is situated
Mahalingam entered into correspondence with the Company alleging that according to the conditions of his employment he could not be transferred from Bangalore to Krishnagiri
Ultimately the Company framed charges against Mahalingam and removed him from service by an order dated April 7 1960
On April 8 1960 Mahalingam complained in writing to the Assistant Commissioner of Labour who was functioning as the Conciliation Officer at Bangalore
Later on one Selvaraj took part in the conciliation proceedings on the authority of the resolution dated July 21 1960 passed at the General Body 530 meeting of Krishnagiri Motor Workers  Union among whose members 112 out of 170 were employees of the Company
Selvaraj filed a statement of claims before the Conciliation Officer on September 1 1960
The Conciliation Officer reported to the Government that the conciliation proceedings had failed and thereupon the State Government by its order dated November 1 1960 made in exercise of the powers conferred by cl
c of sub section
1 of section 10 of the XIV of 1947 hereinafter referred to as the Act referred for adjudication by the Labour Court Bangalore the following points in dispute   1
Whether the order of the management of Sri Rangavilas Motor Private Ltd in transferring the workman Sri It
Mahalingam Foreman from their branch at Fort Bangalore to Krishnagiri is illegal or unjustified
If so is the workman entitled to reinstatement in Bangalore Branch with benefits of back wages or to any other relief  2
Is Sri R Mahalingam Foreman entitled to arrears of increments and overtime wages if so what is the amount he is entitled to  Selvaraj inter alia prayed in his statement of claims filed on behalf of Mahalingam as follows  it is prayed that the Hon ble Court may be pleased to direct the second party the Company to cause the payment of overtime wages due increments due as mentioned in the annexure to this statement as also the arrears of wages from 1 2 60 to 15 3 1960 and order payment of back wages with effect from the date of termination of service by setting aside the said order of termination and to reinstate the workman with continuity of service
 The Company in reply contended that the reference was limited only to the question of transfer and hence no question of reinstatement or back wages could be adjudicated upon
Further the Company contended that the reference was bad because it did not fall under any of the items enumerated in the Second Schedule to the Act
It was also contended that the dispute was an individual dispute
One further objection was raised to the effect that the reference should have been made to the National Tribunal and not to the Labour Court The Labour Court overruled all the objections regarding jurisdiction raised by the Company and made the award holding that both the transfer as well as the removal from service of Mahalingam were illegal and that he Was entitled to overtime wages as well as 531 increments
The Labour Court made the following further direction The workman Sri Mahalingam should be reinstated in ore branch with full back wages in continuity of the past service and with same emoluments
The second party should also pay the arrears of Rs 462927 towards the overtime wages and as well as the increments due
sic As stated above the Company filed writ petition challenging the award
The High Court formulated the points which arose out of the arguments addressed before it thus 1
Whether the dispute referred by the State Government to the Labour Court is an industrial dispute  2
If it is such a dispute a Whether the State Government of Mysore was not the appropriate Government to make the reference  and b Whether the reference should have been made by the Central Government to a National Tribunal 3
Whether any dispute relating to the termination of the service of the fourth respondent is included in the order of reference  4
Whether the points of dispute actually referred fall within the scope of the items enumerated in the second Schedule of the and are therefore within the competence of the Labour Court  5
Whether on the question of transfer there was any dispute at all for adjudication On the first point the High Court agreeing with the Labour Court held that on the facts what was originally an individual grievance of Mahalingam did assume at the time the reference was made by the Government the character of an industrial dispute
On the first part of the second point the High Court held that the State Government of Mysore was the appropriate Government to make the reference
On the second par  it held that it was for the Central Government to decide to refer or not to refer the dispute but the State Government which is the appropriate Government in relation to the dispute does not lose its power of making a reference
On the third point the High Court held that the question of legality or otherwise of the Company s action in removing Mahalingam from service was not the subject matter of reference to the M2 Sup
CI67 5 532 Labour Court and its award to the extent it dealt with that topic was without jurisdiction
On the fourth point the High Court held that the first proviso to cl d to section 10 1 of the Act did not apply and that the dispute relating to increments and overtime wages was beyond the jurisdiction of the Labour Court and could not have been validly referred to it
It also held that the dispute regarding transfer was included in the expression rules of discipline enumerated as item 8 of the Third Schedule and was therefore pot within the competence of the Labour Court to adjudicate upon in view of these findings the Award was quashed
Regarding point No 5 formulated by it the High Court observed that it was
unnecessary to examine that point but as the matter had been argued at some length the High Court stated its opinion thereon
In its opinion there was no scope far making the order of transfer the subject matter of any dispute
The same points that were formulated by the High Court were  argued before us
Mr Ramamurti appearing on behalf of the appellants urged regarding point No 3 that on its true interpretation the order of reference was quite clear and that the question of termination of services of Mahalingam was included in the order of reference
We have already reproduced the order of reference and in our opinion there is force in what Mr Ramamurti urges It seems to us that the order of reference is quite clear if regard is had to the words reinstatement in Bangalore branch with benefits of back wages
 If the words with benefits of back wages consideredand with respectthe High Court did not consider them the High Court s conclusion might possibly be justified
It seems to us that by the time the reference tame to be made everybody knew that Mahalingam had been removed from service
The words with benefits of back wages coup led with the word reinstatement are appropriate only to a case of removal and not to a case of transfer
On the facts of this case it is quite clear that the contention of Mahalingam was that the transfer was illegal and if the transfer as illegal his removal from service would fall automatically with the finding that the transfer was illegal and one of the appropriate reliefs that would be given would be reinstatement in the Bangalore Branch with benefits of back wales
In our view it is because of the above considerations that the word removal was not expressly mentioned
In this connection the High Court relied on the provisions of section 104 of the Act which reads as under 104 Where in an order referring an industrial dispute to a Labour Court Tribunal or National Tribunal under this section or in a subsequent order the appropriate Government has specified the points of dispute for adjudication the Labour Court or the Tribunal or the National 533 Tribunal as the case may be shall confine its adjudication to those points and matters inidental thereto
 We are unable to appreciate how this sub section has any re levance to the question of construction of the order of reference made by the Government
It is true that he points in dispute must be specified but the point with which we are concerned is whether as a matter of construction the point in dispute has been specified or not and according to us the dispute regarding removal has been specified
Regarding the fourth point with respect the High Court misinterpreted the first proviso to cl
d to s101
This proviso reads as follows Provided that where the dispute relates to any matter specified in the Third Schedule and is not likely to affect more than one hundred workmen the appropriate Government may if it so thinks fit make the reference to a Labour Court under clause c The High Court negative the plea of Mahalingam on two grounds First that there is nothing either in the order of reference
or in any other material placed before it to indicate that the Government have applied their mind to the applicability of the proviso to the facts of this case or have actually acted pursuant to the proviso in making the references to the Labour Court and secondly that there can be no doubt that more than one hundred
per sons are interested in and are therefore likely to be affected by the dispute in question
In our view it is not necessary that the order of reference should expressly state that it is because of the proviso that a reference is being made to the Labour Court and if the reference can be justified on the facts there is nothing in the Act which makes such a reference invalid
The second reason given by the High Court with respect is erroneous because it seems to have equated the words interested  and affected
It would be noticed that section 101A uses both the words interested or affected
Section 105 also uses both the words interested or affected
It seems to us that there is a difference in the import of the words  interested or affected
The Union which sponsors the cause of an individual workman is interested in the dispute but the workmen who are the members of the Union are not necessarily affected by the dispute
The dispute in this case was regarding the validity of the transfer and consequent removal of the appellant
The other workmen would naturally be interested in the dispute but they are not affected by this dispute
In our opinion the High Court erred in holding that the first proviso to section 101d did not apply to the facts of this case
In view of our decision on this point it is not necessary to go into the question whether the points in dispute fell within the second or the third Schedule to the Act
534 Therefore the appeal must succeed unless the Company can satisfy us that the points decided against it should have been decided in its favour
This takes us to the other points
Mr O P Malhotra strongly urges that the State Government of Mysore was not the appropriate Government to make the reference
He says that although the dispute started at Bangalore the resolution sponsoring this dispute was passed in Krishnagiri and that the proper test to be applied in the case of individual disputes is where the dispute has been sponsored
It seems to us that on the facts of this case it is clear that there was a separate establishment at Bangalore and Mahalingam was working there
There were a number of other workmen working in this place
The order of transfer it is true was made in Krishnagiri at the head office but the order was to operate on a workman working in Bangalore
In our view the High Court was right in holding that the proper question to raise is  Where did the dispute arise  Ordinarily if there is a separate establishment and the workman is working in that establishment the dispute would arise at that place
As the High Court observed there should clearly be some nexus between the dispute and the territory of the State and not necessarily between the territory of the State and the industry concerning which the dispute arose
This Court in Indian Cable Co Ltd vs Its Workmen1 held as follows The Act contained no provisions bearing on this question which must consequently be decided on the principles governing the jurisdiction of Courts to entertain actions or proceedings
Dealing with a similar question under the provisions of the Bombay Industrial Relations Act 1946 Chagla C J observed in Lalbhai Tricumlal Mills Ltd vs Vin and Others  558 But What we are concerned with to decide is where did the dispute substantially arise  Now the Act does not deal with the cause of action nor does it indicate what factors will confer jurisdiction upon the labour court
But applying the well known tests of jurisdiction a Court or Tribunal would have jurisdiction if the parties reside within jurisdiction or if the subject matter of the dispute substantially arises within jurisdiction  In our opinion those principles are applicable for deciding which of the States has jurisdiction to make a reference under section 10 of the Act
Applying the above principles to the facts of this case it is quite
clear that the subject matter of the dispute in this case substantially arose within the jurisdiction of the Mysore Government
1 1962 Supp 3 SCR 589  535 Mr Malhotra further urges that the High Court erred in holding that it was an industrial dispute
We see no force in this contention
The High Court rightly observed that once the findings of fact recorded by the Labour Court are accepted there is no doubt in law that in the circumstances of this case what was originally an individual grievance of Mahalingam did assume at the time the reference was made by the Government the character of an industrial dispute
Mr Malhotra urges that the finding of the Labour Court that the transfer was illegal was perverse
It is not necessary to go into this question because once it is held that there is an agreement between the Company and Mahalingam that he could not be transferred from Bangalore the transfer would be bad
The Labour Court had observed that one of the terms of agreement was that the Company had agreed not to transfer Mahalingam to any place out of Bangalore for a period of ten years the Company had transferred Mahalingam from Bangalore to the head office at Krishnagiri and this action of the Company was in contravention of the terms of the agreement
Then Mr Malhotra tried to urge the fifth point formulated by the High Court
This point was not taken before the Labour Court and we did not allow him to raise this point  In the result the appeal is allowed judgment of the High Court set aside and the Award of the Labour Court restored
The appellant will have his costs here and in the High Court


Summary:
The second appellant was a workman in the workshop of the first respondent dent company any in its Bangalore branch in the Mysore State
The headoffice of the Company at Krishnagiri in the Madras State transferred him to Krishnagiri contrary to the agreement that he would not be transferred from
Bangalore for ten years
On the workman raising objections the Company removed him from service
The Krishnagiri Motor Workers  Union a majority of whose members numbering more than one hundred were employees of the Company took up the workman s grievance and the Government of Mysore referred the industrial dispute to the Labour Court under section 101 c of the 
One of the questions referred was  whether the order of transfer was illegal and if so Whether the workman was entitled to reinstatement in the Bangalore branch with benefits of back wages
The Labour Court ordered the reinstatement of the workman in the Bangalore branch
The Company challenged the award by a writ petition in the High Court
The High Court while holding that the Mysore Government was the appropriate Government to make the reference quashed the award on the grounds  1 that the legality of the removal of the workman was not the subject matter of reference and 2 that the reference to the Labour Court could not be justified under section 101c because the dispute fell within the Third and not the Second Schedule to the Act nor under the first proviso to section 101d because the Government did not act under that proviso and because more than one hundred persons were interested in and therefore likely to be affected by the dispute
In appeal to this Court the Company sought to support the judgment of the High Court also on the ground that the Mysore Government was not the appropriate Government to make the reference
HELD  1 The legality of the termination of the service of the workman wag included in the order of reference
532 D E The words with benefit of back wages coupled with the word reinstatement are appropriate only to a case of removal
On the facts of the case the transfer of the workman was illegal and so his removal from service should be set aside and be should be reinstated with benefits of back wages
532 F G 2 The reference to the Labour Court was valid under the first proviso to section 101 d
533 H a High Court misinterpreted the proviso by equating the two words interested and affected
The members of the Union which sponsored the cause of the workman were interested in the dispute but they would not necessarily be affected by the dispute
533 F G 529 b It is not necessary that the order of reference should expressly state that it was because of the proviso that the reference was being made to the Labour Court
If it could be justified on the facts there is nothing in the Act which makes such a reference invalid
533 E F 3 The Mysore Government was the appropriate Government to make the reference because the subject matter of the dispute substantially arose within the jurisdiction of the Mysore Government
534 H The proper question to raise is  where did the dispute arise and not where was the dispute sponsored  that is whether there is a nexus between the dispute and the territory of the State making the reference
Ordinarily if there is a separate establishment and the workman is working in that establishment the dispute would arise at that place
534 A E Indian Cable Co Ltd vs Its Workmen 1962 Supp
3 SCR 589followed