IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 19.03.2010 CORAM: THE HON’BLE MR.JUSTICE K.CHANDRU W.P.No.5048 of 2010 and M.P.Nos.1 and 2 of 2010 J.J.Leather Enterprises Limited, Represented by its Director A.P.S.Narag ... Petitioner Vs 1.The Government of Tamilnadu Represented by its Secretary, Labour and Employment Department, Fort St.George, Chennai – 600 009. 2.The Assistant Commissioner of Labour (Conciliation -I) Kuralagam Buildings, Broadway, Chennai – 600 108. 3.The Assistant Commissioner of Labour (Headquarters) O/o:The Commissioner of Labour D.M.S.Compound, Teynampet, Chennai. 4.The Hon'ble Presiding Officer, Industrial Tribunal, City Civil Court Buildings, High Court Campus, Chennai – 600 104. 5.Tamilnadu Jananayaga Thozhilalar Sangam, Represented by its General Secretary, 1/5, Perumal Koil Street, Nellikuppam Post Kancheepuram District, Pin: 603 108. ...Respondents Prayer :Petition under Article 226 of the Constitution of India praying for a Writ of Certiorarified mandamus, to call for the records pertaining to the ex-parte award dated 18.11.2008 passed in I.D.No.31 of 2006 on the file of the Industrial Tribunal, Chennai and quash the same and consequently direct the Industrial Tribunal https://hcservices.ecourts.gov.in/hcservices/ to admit the petitioner's application in M.P.SR.No.286/2009 in I.D.No.31 of 2006 and dispose of the same on merits. For Petitioner : Mr.M.S.Ramesh For Respondents: Mr.N.Senthilkumar,A.G.P. For R1 to R3 (Takes notice) Mr.Solomon for R5 O R D E R The petitioner is the Management. They have come forward to file the present writ petition seeking to challenge the order of the fourth respondent – Industrial Tribunal made in I.D.No.31 of 2006 dated 18.11.2008 and after setting aside the same seeking for a direction to the Industrial Tribunal to admit the petitioner's application in M.P.SR.No.286/2009 in I.D.No.31 of 2006 and dispose of the same on merits. 2. When the matter came up on 12.03.2010, this Court directed the petitioner to give notice to the learned counsel appearing for the fifth respondent before the Industrial Tribunal. Accordingly, notice was given. When the matter came up on 15.03.2010, the learned Additional Government Pleader took notice for the first respondent and Mr.P.Solomon, learned counsel took notice for the fifth respondent. The matter was directed to be posted for orders on 19.03.2010. 3. It is seen from the records that the State Government-the first respondent by its order in G.O.(D)No.738 Labour and Employment (A2) Department dated 30.10.2006 referred the issue of i)"Whether the demand of the Union that without any discrimination annual increment should be given for all the workers was justified? and ii)"Whether the action of the Management in describing the persons who were under the direct supervision of the Management as contract workers was fair and proper? If not, the appropriate relief to be given. 4. The said reference was taken on file by the fourth respondent – Industrial Tribunal as I.D.No.31 of 2006. Notice was ordered to the petitioner/Management and the fifth respondent/Trade Union. 5. While the 5th respondent Union filed a claim statement dated 12.02.2007, the Management did not file any counter statement. Subsequently, when the matter came up on 10.11.2008, the Tribunal examined one worker as W.W.1 and 11 documents were marked as Exs.W1 to W11. The Tribunal held that the claim of the workmen was proved and the Award was passed in terms of the claim statement of the workers. https://hcservices.ecourts.gov.in/hcservices/ 6. The Management on coming to know about the passing of the impugned Award had filed an application under Rule 41 of the Tamil Nadu Industrial Disputes Rules r/w Section 11 and prayed for setting aside the ex-parte Award dated 18.11.2008. However, the Tribunal did not entertain the application and returned the application with an endorsement stating that since the Industrial Dispute was disposed of on 18.11.2008, the Tribunal has become functus officio and the application cannot be entertained. Since there was a delay of 170 days in representing the papers, an application to condone the delay was also filed. 7. In the meanwhile, the workmen had sent a representation to the Management stating that they should give effect to the terms of the Award. It is under these circumstances, the petitioner/Management has come forward with the present writ petition. 8. Mr.P.Solomon, learned counsel appearing for the fifth respondent contended that the Tribunal had become functus officio and it was correct for the Tribunal to have returned the application. It was also contended that the Management had failed in either filing a counter statement or getting on to the case. Therefore, at their instance, the writ petition should not be entertained. 9. It has to be noted that while passing the ex- parte Award, the Tribunal had to kept in mind Rule 48 of the Tamil Nadu Industrial Disputes Rules. For the sake of convenience, the entire rule may be reproduced as under: 48.Ex-parte proceedings.-(1)If, without showing sufficient cause any party to proceedings before a Board, Court, Labour Court, Tribunal or Arbitrator fails to attend or to be represented, the Board, Court, Labour Court, Tribunal or the Arbitrator may proceed as if the party had duly attended or had been represented. (2)The Board, Court, Labour Court, or Tribunal or an Arbitrator may, for sufficient cause, set aside, after notice to the opposite party, the ex-parte decision either wholly or in part, on an application made within 15 days of the ex-parte decision ; Provided that an application may be admitted after the said period of 15 days, if the applicant satisfies the Board, Court, Labour Court or Tribunal or Arbitrator, as the case may be, that he had sufficient cause for not preferring the application within that period. (3)An application under sub-rule (2) shall be supported by an affidavit." 10. Even while passing an ex-parte Award, the Tribunal will have to decide as if the other party is present. In the present case, except by stating that W.W.1 was examined and Exs.W1 to W11 https://hcservices.ecourts.gov.in/hcservices/ was marked, there was no discussion about the availability of materials in the ex parte Award. Such an Award came to frowned up by a Division Bench of this Court in Tamil Nadu Housing Board v. Rathna Kumar reported in 1997-1-L.L.J.923. 11. The question whether the Tribunal has become functus officio and therefore, it cannot entertain an application either condoning the delay or for setting aside the ex parte Award came to be considered by the Supreme Court. 12. The Supreme court in Grindlays Bank Ltd. v. Central Govt. Industrial Tribunal reported in 1980 Supp SCC 420, the Supreme Court dealt with a similar issue arose out of Industrial Disputes (Central) Rules, 1957. Rule 22 of the Industrial Disputes (Central) Rules, 1957 reads as follows: “22. If without sufficient cause being shown, any party to proceedings before a Board, Court, Labour Court, Tribunal, National Tribunal or Arbitrator fails to attend or to be represented, the Board, Court, Labour Court, Tribunal, National Tribunal or Arbitrator may proceed, as if the party had duly attended or had been represented.” Rule 24(b) provides that the Tribunal or other body shall have the power of a civil court under the Code of Civil Procedure, 1908 in the matter of grant of adjournments. It runs thus : “24. In addition to the powers conferred by the Act, Boards, Courts, Labour Courts, Tribunals and National Tribunals shall have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, when trying a suit, in respect of the following matters, namely— (a) (omitted) (b) granting adjournment.” 13. The Supreme Court in the same judgment in paragraphs 10 to 12 observed as follows: "10. When sub-section (1) of Section 11 expressly and in clear terms confers power upon the Tribunal to regulate its own procedure, it must necessarily be endowed with all powers which bring about an adjudication of an existing industrial dispute, after affording all the parties an opportunity of a hearing. We are inclined to the view that where a party is prevented from appearing at the hearing due to a sufficient cause, and is faced with an ex parte award, it is as if the party is visited with an award without a notice of the proceedings. It is needless to stress that where the Tribunal https://hcservices.ecourts.gov.in/hcservices/ proceeds to make an award without notice to a party, the award is nothing but a nullity. In such circumstances, the Tribunal has not only the power but also the duty to set aside the ex parte award and to direct the matter to be heard afresh. 11. The language of Rule 22 unequivocally makes the jurisdiction of the Tribunal to render an ex parte award conditional upon the fulfilment of its requirements. If there is no sufficient cause for the absence of a party, the Tribunal undoubtedly has jurisdiction to proceed ex parte. But if there was sufficient cause shown which prevented a party from appearing, then under the terms of Rule 22, the Tribunal will have had no jurisdiction to proceed and consequently, it must necessarily have power to set aside the ex parte award. In other words, there is power to proceed ex parte, but such power is subject to the fulfilment of the condition laid down in Rule 22. The power to proceed ex parte under Rule 22 carries with it the power to enquire whether or not there was sufficient cause for the absence of a party at the hearing. 12. Under Rule 24(b) a Tribunal or other body has the powers of a civil court under Order 17 of the Code of Civil Procedure, relating to the grant of adjournments. Under Order 17, Rule 1, a civil court has the discretion to grant or refuse an adjournment. Where it refuses to adjourn the hearing of a suit, it may proceed either under Order 17, Rule 2 or Rule 3. When it decides to proceed under Order 17, Rule 2, it may proceed to dispose of the suit in one of the modes directed in that behalf by Order 9, or to make such other order as it thinks fit. As a necessary corollary, when the Tribunal or other body refuses to adjourn the hearing, it may proceed ex parte. In a case in which the Tribunal or other body makes an ex parte award, the provisions of Order 9, Rule 13 of the Code are clearly attracted. It logically follows that the Tribunal was competent to entertain an application to set aside an ex parte award." 14.On the question of the Labour Court becoming functus officio, the Supreme Court in paragraph 14 observed as follows: "14.....It was, however, urged that on April 12, 1977 the date on which the impugned order was passed, the Tribunal had in any event become functus officio. We cannot accede to this argument. The jurisdiction of the Tribunal had to be seen on the date of the application made to it https://hcservices.ecourts.gov.in/hcservices/ and not the date on which it passed the impugned order. There is no finality attached to an ex parte award because it is always subject to its being set aside on sufficient cause being shown. The Tribunal had the power to deal with an application properly made before it for setting aside the ex parte award and pass suitable orders." 15.The Supreme Court vide its judgment in Anil Sood Vs. Presiding Officer, Labour Court II reported in 2001 (10) SCC 534, after analysing the Grindlays Bank's case (cited supra), in paragraphs 6 to 8 observed as follows: "6. The aspect that the party against whom award is to be made due opportunity to defend has to be given is a matter of procedure and not that of power in the sense in which the language is adopted in Section 11. When matters are referred to the tribunal or court they have to be decided objectively and the tribunals/courts have to exercise their discretion in a judicial manner without arbitrariness by following the general principles of law and rules of natural justice. 7. The power to proceed ex parte is available under Rule 22 of the Central Rules which also includes the power to inquire whether or not there was sufficient cause for the absence of a party at the hearing, and if there is sufficient cause shown which prevented a party from appearing, then if the party is visited with an award without a notice which is a nullity and therefore the Tribunal will have no jurisdiction to proceed and consequently, it must necessarily have power to set aside the ex parte award. 8. If this be the position in law, both the High Court and the Tribunal (sic Labour Court) fell into an error in stating that the Labour Court had become functus officio after making the award though ex parte. We set aside the order made and the award passed by the Labour Court and affirmed by the High Court in this regard, in view of the fact that the learned counsel for the respondent conceded that application filed by the appellant be allowed, set aside the ex parte award and restore the reference. To decide the matter afresh, the parties shall appear before the Labour Court on 11-12-2000 to take further directions as regards the proceedings. As the matter is very old, it would be appropriate for the Labour Court to dispose of this reference as expeditiously as possible but not later than six months from today." https://hcservices.ecourts.gov.in/hcservices/ 16. Once again, the Supreme Court considered the same issue in respect of the Industrial Disputes (Bombay) Rules in Radhakrishna Mani Tripathi v. L.H. Patel reported in (2009) 2 SCC 81. Rule 26 of the Bombay Rules reads as follows: “26. Board, Court, Labour Court, Tribunal or Arbitrator may proceed ex parte.—(1) If without sufficient cause being shown, any party to a proceeding before a Board, Court, Labour Court, Tribunal or an arbitrator fails to attend or to be represented, the Board, Court, Labour Court, Tribunal or arbitrator may proceed ex parte. (2) Where any award, order or decision is made ex parte under sub-rule (1), the aggrieved party, may within thirty days of the receipt of a copy thereof, make an application to the Board, Court, Labour Court, Tribunal or an arbitrator, as the case may be, to set aside such award, order or decision. If the Board, Court, Labour Court, Tribunal or arbitrator is satisfied that there was sufficient cause for non-appearance of the aggrieved party, it or he may set aside the award, order or decision so made and shall appoint a date for proceeding with the matter: Provided that, no award, order or decision shall be set aside on any application as aforesaid unless notice thereof has been served on the opposite party.” Note: [It may be stated here that originally Rule 26 was limited to what now comprises sub-rule (1); sub-rule (2) was added by Government Notification dated 20-8-1970 and the original and the added provisions were numbered as sub-rules (1) and (2) respectively.] 17.In Radhakrishna Mani Tripathi's case, the Supreme Court considered the scope of earlier judgments of Grindlays Bank and Anil Sood's case (cited supra). In paragraphs 6 and 7, the Supreme Court dealt with the scope of rule making power by the appropriate Government, which is as follows: "6. At this stage it will be useful to take note of certain provisions of the Industrial Disputes Act, 1947 (hereinafter referred to as “the Act”) and the Rules framed thereunder. Section 11 of the Act permits the Industrial Tribunal, the Labour Court (and the other authorities under the Act) to follow, “subject to any rules that may be made in this regard” such procedure as they may think fit. 7. Section 38 of the Act gives the power to the “appropriate Government” to make rules for the purpose of giving effect to the provisions of the Act. Under Section 38 of the Act the Central https://hcservices.ecourts.gov.in/hcservices/ Government and many State Governments have framed rules. The case in hand coming from Maharashtra is governed by the provisions of the Industrial Disputes (Bombay) Rules (hereinafter referred to as “the Bombay Rules”). Rule 26 of the Bombay Rules lays down the circumstances in which an Industrial Court may proceed ex parte as also the conditions on which it may set aside an ex parte award...." 18.On the power of the Court to set aside the Award, the Supreme Court after dealing with the Central Rules, in paragraphs 13 and 14 held as follows: "13. Further, Rule 24 of the Central Rules gives to the Industrial Tribunal, Labour Court (and the other authorities under the Act) certain powers under the Civil Procedure Code as vested in a civil court when trying a suit. The powers enumerated under the Rule include the power of granting adjournments. 14. In Grindlays Bank1 this Court held that Rules 22 and 24(b) were sufficiently the source of power for the Industrial Courts to recall an ex parte award. It was pointed out that in terms of Rule 22 the Industrial Courts could proceed ex parte in the matter only in case a party to the proceeding failed to attend or be represented without showing sufficient cause. The Court held that power to proceed ex parte under Rule 22 carried with it the power to inquire whether or not there was sufficient cause for the absence of the party at the hearing and in case the party was able to show sufficient cause for its non-appearance on the date the court had proceeded ex parte against it, to recall the award. (Vide para 11 of the decision1.)" 19.On the question of the Labour Court becoming functus officio, the Supreme Court in paragraphs 15 to 18 had observed as follows: "15.Similarly, the Court pointed out in Grindlays Bank1, the provision of Rule 24(b) empowered the Industrial Courts to refuse to adjourn the hearing and to proceed ex parte. Hence, in a case in which the Industrial Court makes an ex parte award the provisions of Order 9 Rule 13 CPC would be clearly attracted. It logically follows that the Tribunal is competent to entertain an application to set aside an ex parte award. (Vide para 12 of the decision1.) The Court thus founded the Industrial Court’s jurisdiction and power to recall an ex parte award on Rules 22 and 24(b) of the Central Rules. It is thus to be seen that in https://hcservices.ecourts.gov.in/hcservices/ Grindlays Bank1 what this Court held to be implicit in Rule 22 of the Central Rules is made explicit and clear in the Bombay Rules in the form of sub-rule (2) of Rule 26. 16. In Grindlays Bank1 this Court did not say that the Industrial Courts would have no jurisdiction to entertain an application for setting aside an award made after thirty days of its publication..... 17. We are unable to accept. The position is made clear in the later decision in Anil Sood v. Labour Court2. 18. In light of the decision in Anil Sood2 we find no substance in the appellant’s submission based on Section 17-A of the Act. There being no substance in the first limb of the submission there is no question of any conflict between Rule 26(2) of the Bombay Rules and Section 17-A of the Act. 20. The Tamil Nadu Rule is much wider than the Bombay Rules and Central Rules. In Tamil Nadu Rules, not only an application can be filed within 15 days and if it is filed beyond 15 days, it only requires sufficient cause to be shown. 21.Yet, another rule with reference to the power of the Labour Court must also to be noted. Rule 43(1) of the Tamil Nadu Industrial Disputes Rules, 1958, which reads as follows: "43.Power of Courts, Boards, Labour Courts and Tribunals.- (1)In addition to the powers conferred by sub-sec.(3) of Sec.11, the provisions of Order IX in the First Schedule to the Code of Civil Procedure, 1908 (Central Act V of 1908), in so far as they relate to the appearance of plaintiffs and defendants in suits, shall apply to the appearance of parties in the proceedings before a Court, Board, Labour Court or Tribunal." In fact only on account of such a provision under the Central Rules being found, the Supreme Court gave relief in the Grindlays Bank's case. The Tamil Nadu Rules framed under the Industrial Disputes Act is not only parameteria with the Central Rules and the Bombay Rules, but in effect, it is more wider than those two rules referred to and considered by the Supreme Court in the three decisions referred to earlier. 22. In order to reject the contention of theory of functus officio, the Supreme Court in all the three judgments emphasised the power of the Labour Court as it was akin to a civil court and found that specific power has been conferred on the Labour Court similar to that of Order IX C.P.C. The State Government in addition to the power conferred under Section 11 has also conferred specific https://hcservices.ecourts.gov.in/hcservices/ power under Order IX CPC relating to appearance of parties. Therefore, the apprehension expressed by the petitioner's counsel that they cannot move the Labour Court in view of the Award being published under Section 17-A of the I.D. Act and therefore, the Labour Court had become functus officio does not stand to reason and legal scrutiny." 23.In the light of the above, the writ petition is liable to be allowed. Accordingly, the writ petition stands allowed; the impugned Award in I.D.No.31 of 2006 stands set aside. The Tribunal is directed to number the M.P.S.R.No.286 of 2009 in I.D.No.31 of 2006 and to proceed in accordance with law and pass appropriate orders after due notice to parties. 24. Even though the petitioner/Management has succeeded in the writ petition, since they have put the workmen to hardship, it is just and proper that the petitioner/Management should pay a sum of Rs.5,000/- (Rupees Five thousand only) as costs to the learned Counsel appearing for the fifth respondent. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. svki To 1.The Secretary, The Government of Tamilnadu Labour and Employment Department, Fort St.George, Chennai – 600 009. 2.The Assistant Commissioner of Labour (Conciliation -I) Kuralagam Buildings, Broadway, Chennai – 600 108. 3.The Assistant Commissioner of Labour (Headquarters) O/o:The Commissioner of Labour D.M.S.Compound, Teynampet, Chennai. 4.The Presiding Officer, Industrial Tribunal, City Civil Court Buildings, High Court Campus, Chennai – 600 104. + 1 CC TO Mr.M.S.Ramesh, Advocate Sr 19010 + 1 cc to The Govt., Pleader Sr 18687 W.P.No.5048 of 2010 JRG (CO) RH (8.4.10) https://hcservices.ecourts.gov.in/hcservices/