C.W.P. No.166 of 1989 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH **** C.W.P. No.166 of 1989 Date of Decision:18.12.2008 BST Manufacturing Ltd. .....Petitioner Vs. State of Haryana and others .....Respondents CORAM:- HON'BLE MR. JUSTICE HARBANS LAL Present:- Mr. Arun Nehra, Advocate for the petitioner. Mr. Tarunveer Vashisth, Addl. AG, Haryana. Ms. Abha Rathore, Advocate for respondent No.3. **** JUDGMENT HARBANS LAL, J. This petition has been moved by BST manufacturing Limited, a Company having its Registered Office at Allahabad Bank Building, 17, Sansad Marg, New Delhi against State of Haryana and others including Bharat Steel Tubes Karamchari Union Ganaur (hereinafter to be referred as the Union) under Article 226 of the Constitution of India for quashing the Order Nos.ID/Sone/284-88/59050-55 dated 30.12.88 Annexure P.9 and No.SOV/ID/284-88/59044-49 dated 30.12.88 Annexure P.10. The brief facts giving rise to this petition are that on 27.10.1988, the Union submitted a letter to the Management of the petitioner demanding payment of bonus for the years 1986-87 and 1987-88 at the rate of 20% threatening that if the said demand was not conceded, the C.W.P. No.166 of 1989 -2- workmen would resort to a 24-hour token strike with effect from 6:00 a.m. on 29.10.1988. The petitioner had declared payment of bonus at the rate of 8.33% for the year 1986-1987 and no bonus could have been computed, much less declared/ paid for the year 1987-88 as the accounting year of the petitioner was to come to an end on 31.3.1989 as per the provisions of the amended Income Tax Act, 1961. Vide order dated 24.8.1988, the Government of Haryana had made a reference in respect of the demand raised by the workman for payment of 20% bonus for the year 1986-1987, which is pending before the Labour Court, Rohtak for adjudication. Thus, the subject matter of the demand raised by the Union by its letter dated 27.10.1988 was already the subject matter of the aforesaid pending reference. The petitioner in response to the aforesaid letter dated 27.10.1988 addressed communication dated 28.10.1988 to the said Union inter-alia informing that the matter regarding payment of bonus for the year 1986-87 is already pending before the Industrial Tribunal and any strike resorted to by the workmen would be illegal. In addition to the issuance of this letter, the petitioner had also put up a notice on the Notice Board of its factory reiterating what it has stated in the letter dated 28.10.1988 and calling upon the workmen not to resort to any unfair means and to ensure uninterrupted and smooth working of the establishment. The workmen who were being instigated and incited by the office bearers of the Union did not see reason and by their letter dated 29.10.1988 informed the petitioner that if their unjustified and illegal demands for payment of 20% bonus for the aforesaid years were not met, they would resort to an indefinite strike with effect from 6:00 a.m. on 30.10.1988. The purported notice of strike dated 29.10.1988 was/is not only unjustified, but also illegal and in contravention C.W.P. No.166 of 1989 -3- of the Industrial Disputes Act, 1947 (for brevity, `the Act'). Vide its letter dated 31.10.1988, the petitioner called upon the workmen to refrain from resorting to an illegal indefinite strike. The workman started their illegal stay in strike with effect from 29.10.1988. Such strike was toto and the production activities at the petitioner's factory came to a stand still. This strike continued despite numerous notices put up by the Management of the petitioner as well as Management's request to the labour authorities to intervene the matter. The Labour Commissioner- respondent did not take steps whatsoever to intervene and failed to prevail upon the workmen to call off their illegal strike or declare such strike illegal. In fact, despite repeated requests of the petitioner- Company to call a meeting of the Management and the Union, neither the State Government nor the Labour Commissioner or the subordinate labour authorities called any meeting of the parties concerned, much-less, taking any steps for declaring the strike illegal. Ultimately, the entire situation took an ugly turn and the workmen and the office bearers of the Union started resorting to intimidation of the work- force and members of their families and stage marches and processions in the housing colony of the factory threatening the workmen and their families with serious and dire consequences including physical injuries, if any of the workman started work. On 3rd and 4th November, 1988, the workmen of the factory at the instigation and incitement of the Union, forcibly and violently stopped the unloading of a wagon of raw materials at the railway siding, which was being attempted to be done by the managerial and supervisory staff. Again on 6.11.1988, the workman violently obstructed such staff from loading the finished goods into a railway wagon. The petitioner- Management was compelled to make a complaint to the C.W.P. No.166 of 1989 -4- local police as well as the General Secretary of the Union in this behalf. Neither the police authorities came to the rescue of the Management, nor the Union took any steps to instruct the workmen not to resort to violent and forceful means. On the contrary, the Union directed its members to resort to any means to obstruct even those functions, which were being performed by the non-workmen category of employees. In the course of above stated incidents, security officers and managers of the petitioner were manhandled and injured and it became virtually impossible for the Managers to stay within the factory and discharge their functions. The Management had hired the services of a photographer for taking photographs of the loading/ unloading of the wagon/ trucks, who was also manhandled, beaten and chased away by about 200 workmen, who were armed with stones, pipe- pieces and bricks. The workmen even started resorting to cause damage to valuable properties of the Company. The safety and security of the Company's employees was in perpetual danger and threats of bodily harm and injury were being held out freely to all employees, who were willing to start work. The workmen forcibly stopped the essential services like generation of electricity for supply to the housing colony, water supply etc. In view of the aforesaid situation, where not only the properties of the Company were being damaged, but there was a consistent threat to the lives and safety of Personnel and on finding, no assistance whatsoever from the labour authorities, the petitioner, to protect its properties and the lives of its Personnel was compelled to declare a lock-out with effect from 11.11.1988. This lock-out was/ is valid and legal inasmuch as, the same was declared pursuant to an illegal strike resorted by the workmen. It was only after the declaration of such lock-out that the labour authorities woke C.W.P. No.166 of 1989 -5- up and started their intervention and meetings were held by the Conciliation Officer, Sonepat on 11th and 12th November, 1988 and, thereafter, by the Joint Labour Commissioner, Haryana on 14.11.1988. In the course of such meetings, the petitioner made it abundantly clear that the strike resorted to by the workmen was illegal and if the workmen gave an assurance of performing their work and to give the requisite production, it would reopen the factory. However, the Union insisted on the acceptance of its illegal demands for payment of 20% bonus for the years 1986-87, 1987-88 as a pre-condition to their starting work. This was an unreasonable stand of the Union. The Government and its Labour Department were under statutory obligation to declare the strike illegal. Instead of doing so, the State Government by its impugned order dated 30.12.1988 directed the petitioner to discontinue its lock-out, which is unlawful and illegal. In order to give a colour and justifiability to its action of passing the prohibitory order and to illegally and unlawfully invoke the powers vested in it under Section 10(3) of the Act, the State Government also passed an order on the same date, i.e., 30.12.1988 referring three purported industrial disputes for adjudication to Industrial Tribunal, Rohtak. This order is illegal and unlawful for the reasons as embodied in this petition. In their joint written statement, respondents No.1 and 2 have inter-alia pleaded that since the petitioner failed to lift the lockout, the answering respondents had no option other than referring the matter in dispute for adjudication and at the same time prohibiting the continuance of lock-out under Section 10(3) ibid. As a matter of fact, the answering respondents had called two conciliation meetings on 14.11.1988 and 9.12.1988 and even prior thereto in the month of August, 1988, a meeting C.W.P. No.166 of 1989 -6- was called to resolve the dispute, but due to adamant attitude of the petitioner (Management) and the workers, the dispute could not be settled. The labour authorities had intervened in the matter in the month of October, 1988. Therefore, it is wrong to say that the conciliation machinery of the answering respondents intervened only in the month of November, 1988. The mater could not be resolved even during the conciliation meetings held at Chandigarh on 14.11.1988 and 9.12.1988 due to the adamant attitude of the petitioner- Management. In case the petitioner is aggrieved in any manner by the reference of the dispute, it can take the necessary plea before the Industrial Tribunal, which is the appropriate forum to decide the disputed question of facts and law relating to this matter. The petitioner is not entitled to invoke the extra-ordinary jurisdiction of this Court and should act in the manner referred to above. The petitioner is at liberty to prove the legality or otherwise of the lock-out declared by them before the learned Industrial Tribunal. The provisions made in Section 10(3) of the Act are quite constitutional and by no stretch of imagination can be termed to be in violation of Article 14 or 19(1))(g) of the Constitution of India. Since the matter regarding period of strike/ lock-out is an ancillary issue, the Tribunal is competent to decide upon it on the pleadings of the parties. Lastly, it has been prayed that this petition be dismissed with costs. In the written statement filed by the Union, it has been inter- alia pleaded that the petitioner and the answering respondent entered into a settlement in the year 1987 but, in that settlement, the issue relating to payment of bonus was not covered. The petitioner and answering respondent always entered into a separate settlement with regards to payment of bonus. According to those settlements, the Management had C.W.P. No.166 of 1989 -7- agreed to pay the bonus to the employees on the festival of Diwali. The Company has been paying the bonus to its employees on the said festival for the last 20 years. As revealed by Annexure R.1, the settlement for bonus is for the year 1985-86. As far as the bonus for the year 1986-87 is concerned, the same has not been paid for which the matter is pending for adjudication before Industrial Tribunal. Regarding bonus for the year 1987-1988, the same was due on the festival of Diwali as per the previous tradition and customs. When the Management refused to negotiate with the answering respondent about the settlement for the year 1987-1988, the latter was compelled to give a demand notice and called for a token strike. The petitioner- Company did not intimate/ inform the answering respondent about the change of their accounting year, nor any notice in this regard was given to them. Previously, also the accounting year of the petitioner- Company was from March to March and in spite of that it paid the bonus to the employees on the festival of Diwali. Since the Management refused to arrive at a settlement for the payment of bonus for the year 1987-1988, in spite of their token strike notice, the answering respondent was compelled to go on indefinite strike of which notice was given by the answering respondent. The labour authority had called various meetings in which the petitioner- Company had taken a very hard stand that they will not pay more than statutory bonus and the same will be paid after completion of their accounting year. The strike of the workmen was peaceful and that is why, the police has not registered any case against them. The petitioner- Company made various false complaints against the workers to the police for making ground to declare lock- out. The petitioner- Company did not give any notice to the answering respondent before declaring the lockout on C.W.P. No.166 of 1989 -8- 11.11.1988 which is a contravention of the provisions of the Act. In the letter dated 3.12.1988 written by the petitioner to the answering respondent, the former had put several conditions/ demands for lifting the lockout. Lastly, it has been prayed that this petition be dismissed with costs. I have heard the learned counsel for the parties, besides perusing the record with due care and circumspection. Mr. Arun Nehra, Advocate appearing on behalf of the petitioner urged with a good deal of force that the exercise of power under Section 10 (3) ibid by the State Government is illegal and unlawful as the reference dated 30.12.1988 is itself illegal and the same has been made without application of mind. It was conveyed by the petitioner to all the respondents that there can be no question of there being any dispute with regard to bonus for the accounting year 1987-1988 as the accounting year had itself not come to an end and the same was to come to an end only on 31.3.1999 in consonance with the amended Income Tax Act, 1961. Therefore, there could have been no reference of any purported dispute much less a dispute as to whether the workman would be entitled to payment of 8.33% bonus or more for an accounting year, which had not even come to an end. The lock-out was not declared pursuant to the disputes relating to the alleged dispute pertaining the payment of wages to the workmen for strike/ lock-out period and a deduction of eight days wages by the Management for the strike period. The purported dispute could not have been referred unless the Government came to a definite conclusion as to whether there was a strike or lockout. The power under Section 10(3) ibid has been exercised by the State Government with a view to illegally pressurize the Management of the petitioner- Company to give up its lawful C.W.P. No.166 of 1989 -9- right of declaring a lockout. The impugned prohibitory order dated 30.12.1988 is malafide inasmuch as, the condition precedent of existence of reference as per the provisions of Section 10(3) ibid was artificially created as the same did not exist. There could not have been any dispute warranting a reference in respect of payment of bonus at any rate for the accounting year 1987-1988, which had not yet come to an end. The lock-out was declared pursuant to an illegal strike. The same is specifically recognised as a legal lockout by the provisions of Section 24(3) of the Act. That despite persistent requests of the petitioner- Company, respondents No.1 and 2 did not hold a single conciliation meeting. The exercise of the discretionary power by the State Government- respondent in this situation was wholly unwarranted and is actuated by extraneous considerations and motives. That it is a legal right of the petitioner to declare a lockout, the legality and justifiability of which can be adjudicated upon by a Court or Tribunal of competent jurisdiction. The impugned prohibitory order is illegal as the same has been passed in violation of natural justice without affording any opportunity to the petitioner to justify its action and the impugned order constitutes an unwarranted impairment of legal right vested in the petitioner- Company. He has sought to place abundant reliance upon the observations rendered in re: A.K. Kallappa Chettiar & Sons, Ernakulam, v. State of Kerala, 1970 ILLJ 97, wherein it has been held that an order under Section 10(3) of the Act cannot be passed without giving a reasonable opportunity to all those who would be affected by the same to state and establish their case. Further relying upon Malayalam Plantations (India) Ltd., and another v. Workmen of Kaliyar Estate and others, 1984 ILLJ 247, he C.W.P. No.166 of 1989 -10- maintained that in these premises, Annexure P.9 as well as P.10 are liable to be quashed. Mr. Nehra stressing his every nerve further agitated at the bar that Mr. M.L.Jain r/o Jain Street, Ganaur Mandi, District Sonepat, son of S.R.Jain has solemnly affirmed in his affidavit dated 9.12.2008 that in the meantime, matter before Hon'ble the Delhi High Court was pending, wherein fact of permission to close the unit by BIFR was considered and during the winding up proceedings, it was ordered by Hon'ble Delhi High Court on the basis of a compromise arrived at between the parties that Management will pay 25 days' wages per year for the period from 1988 till date of winding up order and the orders were passed by the aforesaid Court on 7.12.2004 confirming the above said facts and thus in a way, the matter was resolved by the order of Hon'ble Delhi High Court and the workmen other than who have taken their full and final dues have moved an application before Hon'ble Delhi High Court for reconsideration of the matter, but their application has not been decided so far and that the bonus was declared and paid at the rate of 8.33% to all 506 workmen for the year 1986-1987 and 1987-1988 and the remaining 206 workmen are agitating their claim before the Industrial Tribunal, Panipat, where the matter is now fixed for arguments on 6.1.2009 and in view of this affidavit, the hearing of this petition may be postponed. To tide over these submissions, Ms. Abha Rathore, Advocate representing the Union- respondent urged with great eloquence that the rights of the workmen can only be crystalized, if the industrial adjudication arising out of the lock-out and illegal termination of the workmen is adjudicated and taken to its logical conclusion and once their rights are C.W.P. No.166 of 1989 -11- crystalized, it would be easier to press their claims before the Company Court in Hon'ble Delhi High Court. I have given a deep and thoughtful consideration to the respective submission. As is borne out from the record, the operation of Annexure P.9 was stayed way-back in the year 1989. In view of this stark fact coupled with the submission made by Ms. Abha Rathore, it would not be in the fitness of things to postpone the hearing of this matter. Primarily, it is to be adjudicated as to whether the doctrine of `Audi Alteram Partem comes into play in the exercise of the power vested in the State Government under Section 10(3) ibid. To my mind, its answer must be in the negative insofar as the facts of the instant case are concerned. As alleged by the petitioner, there was a constant threat to the lives and safety of Personnel and on finding no assistance whatsoever from the labour authorities, the petitioner to protect its properties and lives of its personnel was compelled to declare a lock-out and so much so, the matter was also reported to the police authorities which in turn, did not galvanize. This plea in the absence of any cogent evidence is very difficult to be swallowed. The Union has put forth that it was a peaceful strike. All the three respondents in their respective written statements have taken up an identical stand that due to the adamant attitude of the Management, the conciliation meetings fizzled out. If the workmen had gone to the extent to cause damage to the petitioner's properties or the Union had held out threats to the workmen that they as well as the members of their family will face the dire consequences, if they resumed work, in that eventuality, by all probabilities the police authorities would have certainly registered the cases against the erring Union or the workmen. If the Police Officer at the lowest rung had turned a C.W.P. No.166 of 1989 -12- deaf ear to the requests of the Management, in that latter would have definitely approached the higher authorities of the Police hierarchy. There being no evidence, it is very difficult to say that the workmen or Union had gone to the stated extent. The Union has come up with a specific plea that indeed to justify the declaration of lockout, such versions have been coined up. The dispute was merely on the payment of bonus on the eve of Diwali festival. The Union has also egged that this festival allowance is being paid for the last 20 years. In the present case, if the State Government had not issued the order prohibiting the lockout, there could be every possibility of the situation taking an ugly turn. To obviate a chaos or an unruly situation, the Government herein had to take immediate action. The law does not envisage that the Government before passing a prohibitory order in such a situation is obligated to issue a show cause notice to the authorities. Thus, the doctrine that no-one should be condemned unheard was not required to be followed by the State Government in the instant case. For my this view, I also derive support from the following observations rendered in re: Mysore City Powerloom and General Workers' Association, Mysore v. State of Karnataka and another, 1984 Labour and Industrial Cases 1735:- “I am of the opinion that having regard to the nature and purpose of the power conferred under sub-section (3) of Section 10 of the Act, by necessary implication the application of rules of natural justice stands excluded. The power conferred under the sub-section is such as would call for an immediate action, on the part of the Government in order to ensure industrial peace, of prohibiting a lockout or strike, as the C.W.P. No.166 of 1989 -13- case may be, when the dispute, in connection with which the lockout or strike was resorted to, had been referred by the appropriate Government for industrial adjudication. To insist on compliance with the Rule of audi alteram partem before passing an order under sub-section (3) of Section 10 is plainly contrary to the common sense of the situation and would make the provision lifeless and would defeat the purpose of the provision.” Further in re: Eenadu Press Workers Union and another v. Government of Andhra Prpadesh and another, 1979 ILLJ 391, it has been held as under:- “It is not necessary that the Government should issue a show- cause notice to the parties before passing an order under S.10 (3) prohibiting strikes and lock-outs. It is true that the right to strike is a valuable right in the hands of the employees but at the same time it is well-settled it is not fundamental right. Requirements of principles of natural justice depended upon the circumstances of each case and no hard and fast rule can be laid down. In re: Harish Bijaykumar Khaitan and another v. State of Maharashtra and others, 1987 Labour Industrial Cases 836, it has been held as under:- “One of the salient provisions of the Industrial Disputes Act is to prevent illegal strikes and lockouts. With a view to prevent illegal strikes or lockouts in order to maintain industrial peace whenever the Government acts, it acts administratively and it C.W.P. No.166 of 1989 -14- would not be reasonable and prudent in such situations to issue show cause notice and hear the concerned parties. It is difficult to appreciate that just because Government passes prohibitory order under S.10(3) that civil consequences may follow. Therefore, it is not necessary for the Government to hear the parties before passing such an order. No principles of natural justice can be said to be violated in such matters. Thus, where in a reference under S.10(3) the State Govt. passed an order prohibiting lockout which