SCA/24161/2007 1/37 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 24161 of 2007 With SPECIAL CIVIL APPLICATION No. 24162 of 2007 To SPECIAL CIVIL APPLICATION No. 24213 of 2007 With SPECIAL CIVIL APPLICATION No. 24219 of 2007 To SPECIAL CIVIL APPLICATION No. 24222 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE H.K.RATHOD Sd/- ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? YES 2 To be referred to the Reporter or not ? YES 3 Whether their Lordships wish to see the fair copy of the judgment ? YES 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? NO 5 Whether it is to be circulated to the civil judge ? NO ========================================================= DHABJI MEGHJI MAHESHWARI & 55 - Petitioner(s) Versus HINDUSTAN LEVER LIMITED & 3 - Respondent(s) ========================================================= Appearance : MS SANGITA C ATHAVLE for Petitioner(s) : 1 - 56. MRS SANGEETA PAHWA FOR M/S THAKKAR ASSOC. for Respondent(s) : 1 – 2. MR SUNIT SHAH, GP WITH MS VAIJAYANTI PATHAK – AGP, MR UMANG OZA – AGP AND MR KJ DWIVEDI – AGP for Respondent(s) : 3 - 4. ========================================================= CORAM : HONOURABLE MR.JUSTICE H.K.RATHOD Date : 29/10/2007 SCA/24161/2007 2/37 JUDGMENT ORAL JUDGMENT 1. Heard the learned advocates appearing on behalf of respective parties. 2. RULE. Learned advocate Mrs. Sangeeta Pahwa for M/s. Thakkar Associates waives the service of notice of rule on behalf of respondent Nos.1 and 2 and learned GP Mr. Sunit Shah waives the service of notice of rule on behalf of respondent Nos.3 and 4 – State Authorities. 3. Today, all the learned advocates appearing on behalf of respective parties requested this Court to take up this group of matters for hearing and final disposal. Therefore, this Court has taken up this group of matters for hearing and final disposal today with the consent of all the learned advocates. 4. The petitioners challenged the award passed by Labour Court, Gandhidham (Kachchh) in Reference (LCG) No.4 of 2005 to 48 of 2005 with No.62 of 2005 to 94 of 2005 with No.100 of 2005 to 102 of 2005 dated 30th September 2006, wherein, Labour Court, Gandhidham has rejected all the References on the ground that Assistant Labour Commissioner, Gandhidham has no jurisdiction, being an appropriate Government, to refer the industrial disputes raised by present petitioners for adjudication under Section 10(1) of the Industrial Disputes Act, 1947. SCA/24161/2007 3/37 JUDGMENT 5. The services of the petitioners were terminated in the year 2004, therefore, they raised industrial disputes under Section 2(A) of the Industrial Disputes Act, 1947, which gives a legal right in favour of concerned workmen that in case, if, any employer discharge/dismiss/retrench or otherwise terminate the services of individual workman any dispute by differences between that workman and his employer connected with or arising out of such discharge/dismissal/retrenchment or termination shall be deemed to be an industrial dispute notwithstanding that no other workman nor any Union of workmen is a party to the dispute. The definition of Section 2(k) of Industrial Disputes Act, where, in Gujarat amendment, in Section 2(k), at the end, insert the words and letters “but does not include the termination of the service of a workman in accordance with the provisions of Chapter VD”. This amendment comes into force vide Gujarat Act 12 of 2004, Section 2(1) w.e.f. 10th February 2004. The Chapter VD is added by State Amendment in Industrial Disputes Act, 1947 for applying the aforesaid Chapter 2(N) industrial disputes set up in the special economic zone declared as such by Government of India. Chapter VA and Chapter VB shall not apply for an industrial dispute establishment, to which, Chapter VD applied. 6. In affidavit-in-reply, the Assistant Commissioner of Labour has incorporated the aforesaid amendment, but, according to my opinion, for examining this matter or award in question, this SCA/24161/2007 4/37 JUDGMENT amendment is not related or any way connected to the challenge of the award in question. Therefore, this Court has not taken into account the Chapter VD and amending Section 2(k) by Gujarat Amendment Act, 10th February 2004 and also not expressing any opinion. 7. Before the Labour Court, the respondent appeared on being reference made to the Labour Court, Gandhidham. The industrial disputes raised by the petitioner referred for adjudication by Assistant Commissioner of Labour, Gandhidham. Before the Labour Court, respondent Nos.1 and 2 submitted the reply and raised preliminary point or contention that this order of reference is made by or referred by Assistant Commissioner of Labour, Gandhidham, but, powers are with Development Commissioner which has not been delegated to Labour Commissioner or Assistant Commissioner of Labour, therefore, order of reference is itself bad. This aspect has been examined by the Labour Court while considering Section 17 of Gujarat Ordinance No.I of 2004 which is applied to Special Economic Zone to the State of Gujarat and to constitute an Authority and for matters connected therewith or incidental thereto. Section 17(1) and Section 17(2) of Chapter VII which are quoted as under : “Chapter VII, Sec.17 : Delegation of powers of Labour Commissioner to Development Commissioner :(1) Notwithstanding anything contained in the Acts specified in Schedule SCA/24161/2007 5/37 JUDGMENT I, the powers, duties and functions conferred on Commissioner of Labour of any officer under those Acts shall be exercised by the Development Commissioner or any officer authorised by him in this behalf. Section-2 : The State Government may, as and when considered necessary, by notification in the Official Gazette, amend Schedule I and thereupon Schedule I shall be deemed to have been amended accordingly.“ 8. In view of aforesaid provisions made in Section 17, the delegation of powers of Labour Commissioner in respect to duties and functions conferred on Commissioner of Labour of any officer under those Acts shall be exercised by the Development Commissioner or any officer authorised by him in this behalf and State Government has power to amend Schedule I, meaning thereby that, all the powers of Labour Commissioner are now enjoyed by Development Commissioner in respect to Schedule I specified by amended Act. 9. Learned advocate Mrs. Pahwa for respondent Nos.1 and 2 submitted that Section 11 and Section 12 of Special Economic Zones Act, where, powers of Development Commissioner is specified which are quoted as under : “Section 11 – Development Commissioner SCA/24161/2007 6/37 JUDGMENT (1) The Central Government may appoint any of its officers not below the rank of Deputy Secretary to the Government of India as the Development Commissioner of one or more Special Economic Zones. (2) The Central Government may appoint such officers and other employees as it considers necessary to assist the Development Commissioner in the performance of his functions in the Special Economic Zones established by a Developer (other than Central Government) under this Act on such terms and conditions as it deems fit. (3) Every Development Commissioner, officers and other employee shall be entitled to such salary and allowances and subject to such terms and conditions of service in respect of leave, pension, provident fund and other matters as may, from time to time, be specified by the Central Government. Section 12 – Functions of Development Commissioner : (1) Every Development Commissioner shall take all steps in order to discharge his functions under this Act to ensure speedy development of the Special Economic Zone and promotion of exports therefrom. SCA/24161/2007 7/37 JUDGMENT (2) Without prejudice to the generality of the foregoing provisions, the Development Commissioner shall - (a) guide the entrepreneurs for setting up of Units in the Special Economic Zone; (b) ensure and take suitable steps for effective promotion of exports from the Special Economic Zone; (c) ensure proper co-ordination with the Central Government or State Government Departments concerned or agencies with respect to, or for the purposes, of clauses (a) and (b); (d) monitor the performance of the Developer and the Units in a special Economic Zone; (e) discharge such other functions as may be assigned to him by the Central Government under this Act or any other law for the time being in force; and (f) discharge such other functions as may be delegated to him by the Board. (3) Every Development Commissioner shall be overall in charge of the Special Economic Zone and shall exercise administrative control and supervision over the officers and employees appointed under sub-section (2) of SCA/24161/2007 8/37 JUDGMENT section 11 (including the officials deputed to such Special Economic Zone) to discharge any of the functions under this Act. (4) Without prejudice to the provisions of sub-sections (1) to (3), every Development Commissioner shall discharge such functions and exercise such powers as may be delegated to him by a general or special order by the Central Government or the State Government concerned, as the case may be. (5) Every Development Commissioner may call for such information from a Developer or Unit from time to time as may be necessary to monitor the performance of the Developer or the Unit, as the case may be. (6) The Development Commissioner, may, delegate any or all of his powers or functions to any of the officers employed under him.” 10. Relying upon the aforesaid two Sections, learned advocate Mrs. Pahwa submitted that Development Commissioner has not delegated the powers to the officers who has been employed under him. The Assistant Commissioner of Labour working under the State Government is not an officer employed under him. SCA/24161/2007 9/37 JUDGMENT 11. Learned advocate Mrs. Pahwa also submitted that the powers of the Labour Commissioner is given to Development Commissioner under Section 17, and then, again, by sub-delegation of powers, Development Commissioner is given back to the Labour Commissioner and to Assistant Commissioner of Labour, then, whole purpose is frustrated. Therefore, she submitted that Labour Court has rightly examined the issue and rejected the reference because Assistant Commissioner of Labour has no jurisdiction to refer the dispute for adjudication to the Labour Court, Gandhidham. 12. Learned advocate Mrs. Pahwa relied upon the Order passed by Deputy Development Commissioner, Kandla Special Economic Zone - Page 26, which is quoted as under : “In connection to this Office Order of even number dated 31/03/2005 the Development Commissioner, Kandla Special Economic Zone (KASEZ), Gandhidham hereby authorizes the Asstt. Labour Commissioner, Government Labour Office, Gandhidham and the Asstt. Director, Industrial Safety and Health, Adipur and Boiler Inspector, Rajkot, to discharge till 31/03/2006, or till as may be otherwise specified, all the duties and functions related to the respective Acts, in so far as they relate to the labour and industrial operations of Kandla Special Economic Zone. SCA/24161/2007 10/37 JUDGMENT All statutory intimations, reports, appeals, etc., on these matters shall lie with the Development Commissioner as per the power delegation Scheme under the Gujarat State Special Economic Zone Act, 2004. This issues with the approval of the Development Commissioner, Kandla Special Economic Zone.“ 13. From relying upon the aforesaid order, she pointed out that Assistant Commissioner of Labour, Government Labour Office, Gandhidham authorised by Deputy Development Commissioner all the duties and functions related to the respective Acts, in so far as they relate to the labour and industrial operations of Kandla Special Economic Zone. All statutory intimations, reports, appeals, etc., on these matters shall lie with the Development Commissioner as per the power delegation Scheme under the Gujarat State Special Economic Zone Act, 2004. Therefore, according to her submission, this legal functions are with the Development Commissioner and same was not delegated to the Assistant Commissioner of Labour. Except that, learned advocate Mrs. Pahwa has not made any other submission and not cited any authority of law in support of her submission. 14. The affidavit-in-reply is filed by Ms. Shruti Pragnesh Modi, Assistant Commissioner of Labour, Gujarat State, Gandhinagar – respondent No.4 SCA/24161/2007 11/37 JUDGMENT herein, where, the specific averments are made in Para 5, 6, 7, 8 and 10 which are quoted as under : “5. I say that the Development Commissioner is the Authority and he is enjoying the powers of Labour Commissioner in the SEZ. The Development Commissioner has delegated powers to the Assistant Labour Commissioner for all the duties and functions related to the respective Acts and on that ground the Assistant Labour Commissioner, Gandhidham Kutch is carrying out all the activities even in SEZ. 6. I say that the petitioner approached the Hon'ble High Court (Coram : Mr. Justice H.K. Rathod) passed the order. The Hon'ble Court directed whether the Assistant Labour Commissioner, Gandhidham Kutch has jurisdiction to refer for adjudication or not and if the Assistant Labour Commissioner, Gandhidham Kutch has jurisdiction then on what basis any notification is issued by the State Government or Development Commissioner. 7. I say that the delegation of powers of Labour Commissioner to the Development Commissioner under Section 17(1) of the SEZ Act “Notwithstanding anything contained in the Acts specified in Schedule I, the powers duties and functions conferred on Commissioner of Labour or any officer under those Acts shall be exercised by the Development Commissioner or any officer SCA/24161/2007 12/37 JUDGMENT authorized by him in this behalf. 8. I say that the Development Commissioner by his order dated 15.10.04 under Section 17(1) of the SEZ Act confers the Assistant Labour Commissioner the powers, duties and functions of Labour Commissioner which is renewed time by time. 10. I say that as per Section 2A of the Industrial Disputes Act, dismissal etc., of any individual workman to be deemed to be an industrial dispute and when there is any dispute the appropriate Government can refer it to the Board, Court or Tribunal under Section 10(1) of the Industrial Disputes Act.“ 15. I have considered the submissions made by all the learned advocates and I have also perused the award passed by the Labour Court, Gandhidham and considering the provisions which has been relied upon at Page 19 – Chapter V, Section 17, which is pertaining to delegation of power to Labour Commissioner to Development Commissioner, Special Economic Zone, 2004 is implemented w.e.f. 31st March 2004 by notification Gujarat Special Economic Zone Act, 2004. The powers in respect to Labour Law is given to Development Commissioner in respect to fix/establishment covered by Special Economic Zone. The pending dispute and other pending questions ('Tumar') shall have to be given to Development SCA/24161/2007 13/37 JUDGMENT Commissioner as ordered by State Government. Therefore, as per the aforesaid notification, Assistant Commissioner of Labour, Gandhidham (Kachchh) in respect to the factories those who are situated in the area of Free Trade Zone if any dispute w.e.f. 1st April 2004 covered by Special Economic Zone/Development Officers having the jurisdiction w.e.f. 30th March 2004 and Assistant Commissioner of Labour has no jurisdiction to refer the dispute in Gandhidham Are, where, Special Economic Zone is applicable. 16. The Labour Court has relied upon the aforesaid provisions of Section 17 and rejected the entire references, but, Labour Court has not inquired from Assistant Commissioner of Labour as to whether on what basis, this dispute has been referred by him. The Labour Judge being a Judge who should know that how the reference is made by Assistant Commissioner of Labour when the question is raised by respondent – employer. It is necessary to note that whether respondents are entitled to raise this contention before the Labour Court or not, even, that has not been taken care by Labour Court to consider it, because, against termination, when dispute is raised by concerned employee by filing a separate independent complaint, notice must have to be issued to the employer by Assistant Commissioner of Labour. The employer must have to be remained present before the Assistant Commissioner of Labour, Gandhidham in response to the notice issued by the Assistant SCA/24161/2007 14/37 JUDGMENT Commissioner of Labour. On that occasion, respondent Nos.1 and 2 have not raised this contention which they have to raise before the Authority who has to take the decision either to refer or not to refer the industrial disputes for adjudication. Not raising the contentions before the Assistant Commissioner of Labour by the respondent employer and allowed to Assistant Commissioner of Labour, Gandhidham to refer the dispute without any objection and which has been referred for adjudication and then to challenge the jurisdiction of the Assistant Commissioner of Labour, normally, Labour Court should not have to allow such challenge by employer, unless the order of reference is to be challenged by employer before the higher forum on the ground that Assistant Commissioner of Labour has no jurisdiction to refer such dispute to the Labour Court, but, Labour Court has not taken care and simply allowed the contentions raised by employer without application of mind, without any responsibility as a Judge, without any further inquiry as a responsible Judge to the effect that before passing such orders which relates to the future of more than 100 workmen, he should have to inquire from the Authority who has referred it that on what basis, the reference is made, then, in such circumstances, authority must have to answer him that on the basis of this, dispute is referred for adjudication. The approach of the Labour Court is totally careless and lethargic, which ultimately the concerned petitioners are really sufferer because from the date of termination till 2007, which comes SCA/24161/2007 15/37 JUDGMENT to end, a more than three years period is over without any adjudication without any progress which ultimately sufferer is a poor employees on the basis of raising legal and technical contentions by the employer, normally, Labour Court should have to take sufficient care and to have the control against such so-called contentions by the employer, normally, Labour Court should have to take sufficient care and to have the control against such type of preliminary contentions raised by employer, otherwise, it is very difficult to get the justice by the employees against all legal contentions which are available to the employer if it is to be permitted and to be decided by the Labour Court. In this case, Labour Court ought not have to entertain such application only on the ground that this contention was not raised before the concerned authority who has referred it and it is not the case of respondent employer on the preliminary application that this contention was raised by the employer before the Assistant Commissioner of Labour even though he referred the dispute for adjudication. The respondent employer has not challenged the order of reference referred by Assistant Commissioner of Labour to the higher forum, then, whether Labour Court has jurisdiction to decide the legality and validity of reference which has been referred for adjudication by the appropriate Government. The Labour Court cannot decide the legality and validity of the reference if it is referred by appropriate Government for adjudication, otherwise, it amounts to an appeal or higher authority being a Labour Court SCA/24161/2007 16/37 JUDGMENT against the order of Assistant Commissioner of Labour. Such powers are not with the Labour Court, but, such powers are with this Court to examine the legality and validity of order of reference passed by Assistant Commissioner of Labour, Gandhidham. 17. Therefore, according to my opinion, the sufficient care which is to be taken by Labour Court, Gandhidham in respect to the new Act, amended Act and new provisions not taken by Labour Court, he should have to be little careful before dealing with such contentions and he has authorised that he can call the Development Commissioner, he can call the Assistant Commissioner of Labour and from both the Authorities, he can inquire with what is the legal position and what is the correct situation and what is the correct position, but, no efforts have been made by him, simply relying upon the contentions raised by the employer. The lawyer of the workmen have not properly assisted to the Labour Court and ultimately, sufferer are such employees concerned. The lawyer of employer has raised such contentions without inquiring correct position and it also not properly assisted to Labour Court and failing in discharging their duties as Court's officer. The advocate is being Court's officer must properly assist the Court in legal proceedings pending with the Court. Lawyers are appeared on whose behalf or representing which party to the proceeding is not relevant but duties caste under Advocates Act and Bar Council read with professional ethics is very SCA/24161/2007 17/37 JUDGMENT important and now-a-days much relevant. Recently, one Article published in (2007) 5 MLJ 72 written by Hon'ble Dr. Justice A.R. Laxmanan, Former Judge, Supreme Court of India in topic ”Advice to Newly Enrolled Advocates”, where, certain observations are made by Apex Court and Justice Krishna Iyer and Dr. Justice A.R. Laxmanan which are relevant, therefore, the same are quoted as under : “The legal profession is one of the most ancient, the most noble and honourable profession. There is unprecedented erosion of human values taking place in almost all fields of activities of mankind. All human activities and institutions are affected very badly by those catastrophic phenomenon. As well informed youths expected to be equipped to practice law in the 21st century, one must be knowing that legal profession and for that matter judiciary is also not totally an exception to it. However, I must hasten to add that it is heartening to note that the condition of the judiciary, meaning thereby, the Bench and the Bar is not that bad when compared to the other institutions. If one wants to hear a shocking description of the degrading standard in the legal profession one may hear the following observations of the Supreme Court in Bar Council, Maharashtra v. M.V. Dabholkar, AIR 1976 SC 242 : (1976) 2 SCC 291 : (1970) 2 SCR 48 : SCA/24161/2007 18/37 JUDGMENT “Briefly expressed, these practitioners, according to testimony recorded by the State Disciplinary Tribunal, positional themselves at the entrance to the Magistrates' Courts, watchful of the arrival of potential litigants. At sight, they rushed towards the clients in an ugly screniurage to snatch the briefs, to lay claim to the engagements even by physical fight, to undercut fees and by this unedifying exhibition, sometimes carried even into the Bar Library, solicited and secured work for themselves. If these charges were true, any member of the Bar with elementary ethics in his bosom would be outrages at his brethren's conduct.” If, you do not want to be unduly perturbed, you may take it that Bar Council, Maharashtra v. M.V. Dabholkar, case was only an occasional aberration and not a general condition. But, nobody can even for a moment, doubt the severity of the moral crisis. No individual and no society can ignore except at its own peril, the challenge posed by moral crisis taking place all over the world. The crisis has got a very serious impact on the legal profession and the system of administration of law also. Therefore, as new entrants in the legal profession, who are SCA/24161/2007 19/37 JUDGMENT bound to, take the role of the leaders of the contemporary society, one must have to act as leaders of a renaissance movement with the object of averting the moral crisis and restoring the moral standards of the community and thereby, restore the past glory, honour and nobility of the profession which has at least to some extent, suffered degradation in the near past. This is the foremost thought for consideration, because I feel that it may be difficult for the present generation to redeem itself from the present plight easily. The new entrants in this field are the hopes of tomorrow. It may be easy for them to be men of character and conduct of a high standard since they are not already affected substantially by the global phenomenon of moral crisis. Prevention is always better than cure. The present generation is thus pinning their hopes on, the new entrants, who must take a vow that come what may, they will not allow themselves to be affected by the moral crisis which has