HON’BLE SRI JUSTICE R. SUBHASH REDDY Writ Petition No.23654 of 2004 Date: November 26, 2009 Between: M/s. SH Pharmaceuticals Ltd., 6-3-354/4, Hindi Nagar, Panjagutta, Hyderabad, Rep. by its authorized signatory M. Sudhakar. … Petitioner And Government of Andhra Pradesh, Labour, Employment, Training and Industries Dept., rep. by its Secretary, Secretariat, Hyderabad, and three others. … Respondents Order: In this writ petition, the petitioner, a pharmaceutical company, has questioned the order of reference made by the Government for adjudication of dispute by the Industrial Tribunal-I, Hyderabad, in G.O.Rt.No.1293 dated 07-08-2004. 2. The second respondent-association, which is registered under the Trade Union Act and affiliated to All India Chemical and Pharmaceutical Employees’ Federation, submitted representation on 20-01-2004 to the Deputy Commissioner of Labour, Hyderabad for redressal of grievance of sales promotional employees (medical representatives) of the petitioner-company. As stated in the representation, it was the grievance of the association that the management of the petitioner-company was not releasing the annual increments due to its employees, wage revisions were not done as agreed and some medical representatives were not paid gratuity and provident fund, as agreed. It was the case of the second respondent-association that though wage settlement agreements were entered with the union by the petitioner- company in the years 1989 and 1994, the same were not implemented. On receipt of the said representation and on issue of notice by the Deputy Commissioner of Labour, Hyderabad, the petitioner-company has replied on 06-02-2004 stating that it has got no association with SOL Pharmaceuticals Ltd., and has disputed the allegation that SOL Pharmaceuticals Ltd., was its previous name. In its reply, the petitioner-company has stated that it was incorporated in the year 1995; as such the wage agreements of 1989 and 1994 cannot be enforced against it. When there was failure of conciliation before the Deputy Commissioner of Labour, Hyderabad, the said authority sent a failure report to the first respondent-Government and on receipt of such report, the first respondent-Government, in exercise of powers under Section 10(1)(d) of the Industrial Disputes Act, 1947, by the impugned order, referred the dispute, namely: “Whether the management of SOL Pharmaceuticals Limited (presently S.H. Pharmaceuticals Limited) is justified in not considering the Charter of Demands dt.28-4-1997 submitted by the Federation of Medical and Sales Representatives Association of India? If not, to what relief the workmen are entitled?” 3. It is the case of the petitioner-company that it was initially incorporated on 29-09-1995 in the name of SOL Health Pharmacy Ltd., and subsequently there was a change of name to that of the present and the same was certified by the Registrar of Companies by certificate dated 02-07-2002. Precisely, it is the case of the petitioner-company that as it was never known as SOL Pharmaceuticals Ltd., the wage agreements entered by the second respondent with such company cannot be enforced against it. 4. A counter affidavit is filed on behalf of the second respondent-association. While, generally, denying various allegations of the petitioner-company, it stated therein that SOL Pharmaceuticals Ltd., was incorporated under the Companies Act, 1956 on 29-12-1983 and it has commenced business from 03-02-1984. It is further stated that all the field staff, who are employed now in the petitioner-company were originally employed in SOL Pharmaceuticals Ltd., and while working in the said company all those employees were represented by their union, which had entered into wage settlements. It is further stated that when SOL Health Pharmacy Ltd., was incorporated, all the earlier employees of SOL Pharmaceuticals Ltd., were appointed in SOL Health Pharmacy Ltd., by duly protecting their pay and service conditions. It is further stated that the name of SOL Health Pharmacy Ltd., is changed to S.H. Pharmaceuticals Ltd., with effect from 02-07-2002 and merely because there is change in the name of the company, it is not proper to state that wage agreements entered into by the erstwhile company are not binding on the petitioner-company. 5. Heard Sri V. Srinivas, learned counsel for the petitioner-company, Sri B.G. Ravinder Reddy, learned counsel appearing for the second respondent and learned Government Pleader for Labour appearing for the first respondent. 6. It is submitted by learned counsel for the petitioner that as much as petitioner-S.H. Pharmaceuticals Ltd., is not concerned with the management of SOL Pharmaceuticals Ltd., as such, there is no basis for the second respondent- union to seek enforcement of the wage agreements entered in the years 1989 and 1994 for their demands. It is submitted that the petitioner-company was incorporated under the Companies Act, 1956 on 29-09-1995 in the name of SOL Health Pharmacy Ltd., which is later changed to the present name and the same is certified by the Registrar of Companies by certificate dated 02-07-2002, and therefore there cannot be any demand from the second respondent-union, so as to raise an industrial dispute against the management of the petitioner-company. It is stated that in spite of raising such valid objection, failure report was sent by the conciliation officer to the first respondent-Government, which, in turn, ordered reference without forming any opinion so as to say whether an industrial dispute exists between the second respondent and the management of the petitioner-company. In support of his submissions, learned counsel for the petitioner relied on judgments of the Hon’ble Supreme Court in the cases of Shambu Nath Goyal v. Bank of Baroda[1], Ram Avtar Sharma v. State of Haryana[2], and Sultan Singh v. State of Haryana & Anr.[3]. 7. On the other hand, it is submitted by learned counsel for the second respondent and learned Government Pleader appearing for the first respondent that the power which is being exercised by the Government under Section 10(1)(d) of the Industrial Disputes Act, 1947 is of administrative character and when it has ordered reference, for adjudication of dispute by the Industrial Tribunal, by forming an opinion, it is not open to the petitioner-company to question the same at this reference. It is submitted that while it is open to the petitioner- company to contest the matter before the Industrial Tribunal on merits, but, on the grounds as stated in the writ petition, it cannot seek invalidation of the reference itself. 8. Though it is submitted by learned counsel for the petitioner-company that no opinion is formed by the Government, but, on a perusal of the orders issued by the Government, it is clear that the Government has examined the failure report sent by the conciliation officer and arrived at a conclusion that there exists an industrial dispute between the second respondent-association and the management of the petitioner-company. The impugned order, further, makes it clear that the Government has come to a conclusion to refer such dispute to the Industrial Tribunal for adjudication. In the case of Shambu Nath Goyal (1 supra), while considering the scope of the provision under Section 10(1) of the Industrial Disputes Act, 1947, the Hon’ble Supreme Court, held that the power conferred by section 10(1)(d) on the Government to refer the dispute can be exercised not only where an industrial dispute exists, but when it is also apprehended. It is further held that from the material placed before the Government, Government reaches an administrative decision whether there exists an industrial dispute or an industrial dispute is apprehended and in either event it can exercise its power under Section 10(1) and by making reference under Section 10(1) the Government is doing an administrative act and the fact that it has to form an opinion as to the factual existence of an industrial dispute as a preliminary step to the discharge of its function does not make it any the less administrative in character. In the case of Ram Avtar Sharma (2 supra), the Hon’ble Supreme Court has held that if the administrative decision is based on grounds irrelevant, extraneous or not germane to the exercise of power, it is liable to be questioned in exercise of power of judicial review. In the case of Sultan Singh v. State of Haryana (3 supra), the Hon’ble Supreme Court has held that, on making an application for reference, it would be open to the State Government to form an opinion whether industrial dispute exists or is apprehended and then either to make a reference to the appropriate authorities or refuse to make the reference and the appropriate Government is entitled to go into the question whether an industrial dispute exists or is apprehended and it would be only a subjective satisfaction on the basis of the material on record. It was further held that being an administrative order, no l i s is involved. Further, in the judgment in the case of Secretary, Indian Tea Association v. Ajit Kumar Barat and others[4], the Hon’ble supreme Court has approved the same view and also held that the order of the appropriate Government in making reference under Section 10 of the Industrial Disputes Act, 1947 is an administrative order and not a judicial or quasi- judicial one and the court, therefore, cannot canvass the order of reference closely to see if there was any material before the Government to support its conclusion, as if it was a judicial or quasi-judicial order. In the light of the aforesaid judgments, it is clear that on receipt of conciliation failure report by the Government, while making reference under Section 10(1)(d) of the Industrial Disputes Act, 1947, the Government was discharging its administrative function by forming an opinion with regard to existence of industrial dispute. 9. In the instant case, although it is the case of the petitioner-S.H. Pharmaceuticals Ltd., that it was not associated at any point of time with SOL Pharmaceuticals Ltd., but, from the counter affidavit filed on behalf of the second respondent, it is clear that all the field staff who are employed now in the petitioner-company were originally appointed in SOL Pharmaceuticals Ltd., and on forming SOL Health Pharmacy Ltd., which is the previous name of the petitioner- company, all such employees were appointed by protecting their pay and service conditions. Though it is submitted on behalf of the petitioner-company that the agreements, which are entered into with SOL Pharmaceuticals Ltd., are not binding on the petitioner-company, however, it is a matter, which has to be examined by the Industrial Tribunal. But, on the said ground, the validity of the reference cannot be questioned at this stage. From a perusal of the impugned order, it is clear that on receipt of the report, the Government had come to the conclusion that there exists an industrial dispute between the second respondent-association and the petitioner-management in view of the charter of demands of the second respondent-association. In the impugned order, it is further clearly stated that for resolution of such disputes, the Government has come to a conclusion that the matter is to be referred for adjudication by the competent Tribunal. Such recitals exist in the very reference order itself and therefore the contention of the learned counsel for the petitioner that no opinion is formed by the Government cannot be accepted. It is also to be noted that, in various decisions of the Hon’ble Supreme Court, it is held that while making reference under Section 10(1) of the Industrial Disputes Act, 1947, the Government shall only exercise an administrative function and in absence of discharge of any judicial or quasi-judicial functions by the Government, at the stage of reference, courts cannot go into merits of the matter and enquire in detail about the claim, so as to invalidate the order of reference itself. In view of the opinion of the Government that there exists an industrial dispute and in view of the judgments referred above, I do not find any valid ground to interfere with the impugned order of reference, in exercise of power of judicial review, under Article 226 of the Constitution of India. 10. The writ petition fails and is accordingly dismissed, however, in the circumstances, without any order as to costs. ___________________ R. SUBHASH REDDY, J November 26, 2009 MRR [1] AIR 1978 SC 1088 [2] AIR 1985 SC915 [3] AIR 1996 SC 1007 [4] (2000) 3 SCC 93