Civil Appeal No 8454 NL Of 1983
From the Judgment and order dated the 8th August 1980 of the Madhya Pradesh High Court Bench at Gwalior in Civil Miscellaneous Petition No 127 of 1972
HK Puri for the Appellant
AK Sanghi for the Respondent
J This is an appeal by special leave against the Judgment dated 8th August 1980 by the High Court of Madhya Pradesh at Jabalpur in Civil Miscellaneous Petition No 127 of l972
The appellant is a trade union registered under the Trade Union Act
It represents employees in the Chambal Hydel Irrigation Scheme under the Department of Chambal Project of Government of Madhya Pradesh in Gwalior Division
The union raised three demands and served notices of these demands on the Deputy Chief Engineer Major Project Chambal Bhopal
The demands were 1 Chambal allowance 2 Dearness allowance equal to that of the Central Government employees and 3 Wages for the 1022 period of strike lasting 20 days in the year 1966
Copies of these notices were sent to the Assistant Labour Commissioner Indore and the Secretary Government of Madhya Pradesh
The Deputy Chief Engineer did not respond to the demands
There upon the Assistant Labour Commissioner Gwalior at the instance of the union tried for a settlement but did not succeed
He sent a report under Section 124 of the Industrial Disputes Act
The State Government the first respondent in the appeal refused to refer the matter to the concerned Tribunal by its order dated 1531969
The appellant took the matter before the High Court by filing Miscellaneous petition No 2969 for a mandamus to the State Government to refer the dispute for adjudication
The High Court allowed the writ petition
quashed the order of the State Government dated 15th March 1969 and directed it to consider the question whether a reference was necessary or not
When the matter went back to the Government the Government took the stand that the provisions of the Industrial Disputes Act were not applicable to the workmen in the Chambal Hydel Irrigation Scheme since the Scheme was not an Industry and hence again refused to refer the dispute to the Tribunal
The appellant pursued the matter further by filing miscellaneous petition No 45 of 1970 before the High Court
The High Court allowed the petition and directed the Government to take suitable action under Section 125 of the Act
The Government challenged this decision before this Court by filing SLPNo
933 of 1972 without success
The matter therefore went back to the Government again By its order dated 1311972 the State Government referred only one question to the Tribunal and that related to the wages for the strike period but declined to refer the other two questions
The reason given for this was 1 that the Government was not in a position to bear the additional burden and 2 that grant of the special allowance claimed would invite similar demands by other employees which would affect the entire administration
Miscellaneous Petition No 127 of 1972 was therefore filed for a direction to the State to refer the other two demands also
In the meanwhile this Court as per its decision dated July 20 1978 bad confirmed the decision of the High Court that Chambal Project was an Industry within the meaning of the Industrial Disputes Act
After this decision was rendered by this Court the Government reviewed the matter and passed an order on 351979 giving additional reasons for refusing to refer the dispute for adjudication
The reasons stated were as under 1023 1 That the State Government was not in a position A to pay dearness allowance equal to that of Central Government employees
In the present situation the State Government would not pay dearness allowance equal to that of Central Government employees to any particular department
the question of such payment to the petitioners therefore does not arise
B 2 The work charged employees were already given a consolidated pay
Therefore there was no justification for paying such employees the Chambal allowance
The rules regulating the service conditions of the work charged employees of the Chambal division do not provide for payment of Chambal allowance to them   3
Before the High Court it was contended by the appellant that the State Government had by refusing to refer the dispute to the Tribunal giving the above reasons taken upon itself the power to decide the dispute and had usurped the powers of the Tribunal
It was further contended that the question raised related to the conditions of service of the employees and was therefore a matter primarily to be decided by the Tribunal The High Court repelled the contention and held as follows It is now 12 years that the matter has been pending
But it would appear from the history of the case that the delay has been mostly due to the fact that the case was pending before various Courts
The Government has not materially changed its stand
As regards Chambal allowance they were from the very inception taking the stand P that the work charged employees of the Project were given a consolidated salary and the service conditions did not warrant payment of extra allowance
Now the rules regulating service conditions of the work charged employees of the project did not contain the provision for payment of Chambal allowance to them
The Government was of the opinion that prima facie no case arises particularly when the extra benefit was already being granted to them
The Government undoubtedly could no decide the matter finally but they could certainly consider whether a prima facie case for reference has been made out on merits
If no case is made out it would be open to the Government to refuse 1024 to refer such a question and it could not be said that the Government was usurping the functions of the Tribunal and deciding the case finally
In our opinion the State Government s order could not be said to be punitive and it takes into account the entitlement of the Chambal employees for the Chambal allowance
As regards the other question the State Government are on a firmer ground
Since the Government is not paying dearness allowance equal to that of the Central Government employees to the employees in any other department in the State there is no reason to discriminate and pay the same to the Chambal employees
This is what the State Government have stated and we think that if the allowance at the rate payable to the Central Government employees is not paid to any one in the State the Government was justified in holding that no prima facie case has been made out by the petitioner for referring this dispute to the Tribunal
The State Government have also considered the question of expediency that by payment of such allowance to the Chambal employees alone there would be dissatisfaction amongst the other employees of the State
Both these reasons are germane and relevant
The Government here was not deciding the case finally
It has to decide question of expediency and whether a prima facie case has been made out  In support of this conclusion the High Court relied upon the observations made by this Court in Bombay 
Union of Journalists P vs State of Bombayl and held that the Government was not precluded from making a prima facie examination of the merits of the dispute while considering whether a reference was necessary or not
It was further held that the two reasons given by the State Government fulfilled necessary test laid down by the orders of this Court earlier and the various Supreme Court decisions cited by the petitioners
In the appeal before us it was contended that the approach made by the High Court was erroneous and that the High Court had failed to properly delineate the jurisdiction of the Government under Section 10 read with Section 125 of the Industrial Disputes 1  1025 Act
It was contended before us that the question raised by the appellant had to be decided by the Tribunal on evidence to be adduced before it and it could not be decided by the Government on a prima facie examination of the facts of the case
This submission was met with the plea that the Government had in appropriate cases at least a limited jurisdiction to consider on a prima facie examination of the merits of the demands whether they merited a reference or not
We have considered the rival contentions raised before us The High Court apparently has relied upon the following passage in Bombay Union of Journalists vs State of Bombay Supra C  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 Section 125 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 employees 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   We find that the approach made by the High Court was wrong and the reliance on the above passage on the facts of this case is misplaced and unsupportable
This Court had made it clear in the same Judgment in the sentence preceding the passage quoted above that it was the province of the Industrial Tribunal to decide the disputed questions of fact 
Similarly on disputed questions of fact the appropriate Government cannot purport to reach final conclusions for that again would be the province of the Industrial Tribunal  Therefore while conceding a very limited jurisdiction to the State Government to examine patent frivolousness of the demands it is to be understood as a rule that adjudication of demands made 1026 by workmen should be left to the Tribunal to decide
Section 10 permits appropriate Government to determine whether dispute exists or is apprehended  and then refer it for adjudication on merits
The demarcated functions are 1 reference 2 adjudication when a reference is rejected on the specious plea that the Government cannot bear the additional burden it constitutes adjudication and thereby usurpation of the power of a quasi judicial Tribunal by an administrative authority namely the Appropriate Government
In our opinion the reasons given by the State Government to decline reference are beyond the powers of the Government under the relevant sections of the Industrial Disputes Act
What the State Government has done in this case is not a prima facie examination of the merits of the question involved
To say that granting of dearness allowance equal to that of the employees of the Central Government would cost additional financial burden on the Government is to make a unilateral decision without necessary evidence and without giving an opportunity to the workmen to rebut this conclusion
This virtually amounts to a final adjudication of the demand itself
The demand can never be characterised as either preverse or frivolous
The conclusion so arrived at robs the employees of an opportunity to place evidence before the Tribunal and to substantiate the reasonableness of the demand
Same is the case with the conclusion arrived at by the High Court accepting the stand of the State Government that the employees were not entitled to the Chambal allowance as the same was included in the consolidated pay
This question in fact relates to the conditions of service of the employees
What exactly are the conditions of service of the employees and in what manner their conditions of service could be improved are matters which are the special preserve of the appropriate Tribunals to be decided in adjudicatory processes and are not ones to be decided by the Government on a prima facie examination of the demand
This demand again can never be said to be either perverse or frivolous
There may be exceptional cases in which the State Government may on a proper examination of the demand come to a conclusion that the demands are either perverse or frivolous and do not merit a reference
Government should be very slow to attempt an examination of the demand with a view to decline reference and Courts will always be vigilant whenever the Government attempts to usurp the powers of the Tribunal for adjudication of valid dis 1027 putes
To allow the Government to do so would be to render A Section 10 and Section 125 of the Industrial Disputes Act nugatory
We have no hesitation to hold that in this case the Government had exceeded its jurisdiction in refusing to refer the dispute to the Tribunal by making its own assessment unilaterally of the reasonableness of the demands on merits
The High Court erred in accepting the plea of the Government that refusal to refer the demands in this case was justified
The demands raised in this case have necessarily to be decided by the appropriate Tribunal on merits
In the result we set aside the Judgment of the High Court allow this appeal and direct the State Government to refer all the questions raised by the appellant to the appropriate Tribunal
The appeal is allowed with costs to the appellant quantified at Rs2500 n SR Appeal allowed


Summary:
The appellant is a trade union registered under the Trade Unions Act
It represents employees in the Chambal Project of Government of Madhya Pradesh in Gwalior Division
The union raised three demands namely 1 Chambal allowance 2 Dearness allowance equal to that of the Central Government employees and 3 Wages for the period of strike lasting 20 days in the year 1966 and served notices of these demands on the Deputy Chief Engineer Major Project Chambal Since the attempts for settlement by the canciliation officer failed a full report of the dispute under section 12 4 of the Act was sent to the State Government which by its order dated 15
3 1969 refused to refer the matter to the concerned Tribunal
The appellant took the matter before the High Court by filing Miscellaneous Petition No 29169 for a mandamus to the State Government to refer the matter for adjudication
The High Court allowed the writ petition and directed the State Government to consider the question whether a reference was necessary or not
The Government again refused to refer the dispute to the Tribunal taking the stand that the provisions of the Industrial Disputes Act were not applicable to the workmen in the Chambal Scheme as it was not Industry 
The appellant approached the High Court for the second time by filing Miscellaneous Petition No 45 of 1970 and challenged the said orders
The High Court allowed the petition and directed the Government to take suitable action under section 12 5 of the Act
The Government challenged the said decision before the Supreme Court by filing SLP No 933 of 1972 without success
Later by its order dated 13
1 72 the State Government referred to the Tribunal only the third question of payment of wages for the strike period and declined to refer the other two questions for the reasons that a the Government was not in a position to bear the additional burden and b the grant of the special allowance claimed would invite similar demands by other employees which would affect the entire administration
The appellant was perforced 1020 to approach the High Court for the third time by way of a miscellaneous Petition No 127 of 1972 for a direction to the State to refer the other two demands also
In the meanwhile the Supreme Court by its decision dated July 20 1978 confirmed the High Court s order that Chambal Project was a industry  within the meaning of the Act
whereupon the Government reviewed the matter and passed an order on 3 79 giving additional reasons for declining to refer the dispute for adjudication namely a the State Government was not in a position and therefore cannot pay Central DA to any of its employees in any department and b the work charged employees who get a consolidated salary are not entitled to Chambal allowance under the rules
The High Court by its decision dated 8th August 1980 dismissed the petition holding that the reasons given by the Court are germane and relevant
Hence the appeal by special leave
Allowing the appeal the Court  HELD 11 The reasons given by the State Government to decline reference are beyond the powers of the Government under the relevant sections of the Industrial Disputes Act
1026C 12 While conceding a very limited jurisdiction to the State Government to examine patent frivolousness of the demands it is to be understood as a rule that adjudication of demands made by workmen should be left to the Tribunal to decide
Section 10 permits appropriate Government to determine whether dispute exists or is apprehended and then refer it for adjudication on merits
The demarcated functions are 1 reference 2 adjudication
1025H 1026A 13 When a reference is rejected on the specious plea that the Government cannot bear the additional burden it constitutes adjudication and thereby usurpation of the power of a quasi judicial Tribunal by an administrative authority namely the Appropriate Government
What the State Government had done in this case is not a prima facie examination of the merits of the question involved
To say that granting of dearness allowance equal to that of the employees of the Central Government would cost additional financial burden on the government is to make a unilateral decision without necessary evidence and without giving an opportunity to the workmen to rebut this conclusion
This virtually amounts to a final adjudication of the demand itself
The demand can never be characterized as other perverse or frivolous
The conclusion so arrived at robs the  employees of an opportunity to place evidence before the Tribunal and to substantiate the reasonableness of the demand
1026B E 14 What exactly are the conditions of service of the employees and in what manner their conditions of service could be improved are matters which are the special preserve of the appropriate Tribunals to be decided in adjudicatory processes and are not once to be decided by the Government on a prima facie examination of the demand
The question whether the emp 1021 loyees werewere not entitled to the Chambal allowance as they are in A receipt of a consolidated pay relates to the conditions of service of the employees Further this demand also cannot be said to be either perverse or frivolous
1026F G 15 However there may be exceptional cases in which the State Government may on a proper examination of the demand come to a conclusion that the demands are either perverse or frivolous and do not merit a reference
Government should be very slow to attempt an examination of the demand with a view to decline reference and Courts will always be vigilant whenever the Government attempts to usurp the powers of the Tribunal for adjudication of valid disputes
To allow the Government to do so would be to render section 10 and section 12 5 of the Industrial Disputes Act nugatory
1026G H 1027A C Bombay Union of Journalists vs State of Bombay   explained and followed