Case: The Engineering Mazdoor Sabha Representing Workmen Employ Vs. The Hind Cycles Ltd., Bombay(And Connected Appeal)

2. Civil Appeal No. 204/1962 has been filed by the appellant, theDirect Tea Trading Co, Ltd., against the respondents, its workmen, and by its appeal, the appellant seeks to challenge the validity and the correctness of the award pronounced by Dr. T. V. Sivanandam to whom the dispute between the parties was voluntarily referred under S.10A of theAct. The award was pronounced on the 27th August 1961, and by special leave the appellant has come to this Court. The respondents urge that the appeal is incompetent because the arbitrator is not a Tribunal under Art. 136 of the Constitution.

Reasoning: 3. Article 136 (I) provides that notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India.(2) excludes from the scope of(1) any judgment, determination, sentence or order passed or made by any court or tribunal constituted by or under any law relating to the Armed Forces. It is clear that Art. 136 (1) confers very wide powers on this Court and as such, its provisions have to be liberally construed. The Constitutionmakers thought it necessary to clothe this Court with very wide powers to deal with all orders and adjudications made by Courts and Tribunals in the territory of India in order to ensure fair administration of justice in this country. It is significant that whereas Arts. 133 (1) and 134 (1) provide for appeals to this Court against judgments, decrees or final orders passed by the High Courts, no such limitation is prescribed by Art,. 136 (1). All Courts and all tribunals in the territory of India except those in cl. (2) are subject to the appellate jurisdiction of this Court under Art. 136 (1.). It is also cleat that whereas the appellate jurisdiction of this Court under Arts. 133 (1) and 134 (1) can be invoked only against final orders, no such limitation is imposed by Art. 136 (1). In other words, the appellate jurisdiction o this Court under this latter provision can be exercised even against an interlocutory order or decision. Causes or matters covered by Art. 136(1) are all causes and matters that are brought for adjudication before Courts or Tribunals. The sweep of this provision is thus very wide. It is true that in exercising its powers under this Article, this Court in its discretion refuses to entertain applications for special leave where it appears to the Court that interference with the orders sought to be appealed against may not be necessary in the interest of justice. But the limitations thus introduced, in practice, are the limitations imposed by the Court itself in its discretion. They are not prescribed by Art. 136(1).4. For invoking Art. 136 (1), two conditions must be satisfied. The proposed appeal must be from any judgment, decree, determination, sentence or order, that is to say, it must not be against a purely executive or administrative order. If the determination or order giving rise to the appeal is a judicial ordetermination or order, the first condition is satisfied. The second condition imposed by the Article is that the said determination or order must have been made are passed by any Court or Tribunal in the territory of India. These conditions, therefore, require that the act complained against must have the character of judicial oract and the authority whose act is complained against must be a Court ore Tribunal. Unless both the conditions are satisfied, Art. 136 (1) cannot be invoked.5. The distinction between purely administrative or executive acts and judicial oracts has been considered by this Court on several occasions. In the case of Province of Bombay v. Khushaldas S. Advani, 1950 SCR 621: (AIR 1950 SC 222  ), Mahajan J. observed that the question whether an act is a judicial or aone or a purely executive act depends on the terms of the particular rules and the nature, scope and effect of the particular powers in exercise of which the act may be done and would, therefore, depend on the facts and circumstances of each case. Courts of law established by the State decide cases brought before them judiciary and the decisions thus recorded by them fall obviously under the category of judicial decisions. Administrative or executive bodies, on the other hand, are often called upon to reach decisions in several matters in a purely administrative or executive manner and these decisions fall clearly under the category of administrative or executive orders. Even judges have, in certain matters, to act administratively, while administrative or executive authorities may have to actin dealing with some matters entrusted to their jurisdiction. Where an authority is required to act judicially either by an express provision of the statute under which it acts or by necessary implication of the said statute the decisions of such an authority generally amount todecisions. Where, however, the executive or administrative bodies are not required to act judicially and are competent to deal with issues referred to them administratively, their conclusions cannot be treated asconclusions. No doubt, even while acting administratively, the authorities must act bona fide; but that is different from saying that they must act judicially.Bearing in mind this broad distinction between acts or orders which are judicial oron the one hand, and administrative or executive acts on the other, there is no difficulty in holding that the decisions of the arbitrators to whom industrial disputes are voluntarily referred under S. 10 A of the Act aredecisions and they amount to a determination or order under Art. 136 (1). This position is not seriously disputed before us. What is in dispute between the parties is not the character of the decisions against which the appeals have been filed, but it is the character of the authority which decided thedecision is opposite for our purpose because the question which came to be determined was in regard to the character of the Industrial Tribunals constituted under the Act. The majority decision of this Court was that the functions and duties of the Industrial Tribunal are very much like those of a body discharging judicial functions and so, though the Tribunal is not a Court, it is nevertheless a Tribunal for the purposes of Art. 136. In other words, the majority decision which, in a sense, washeld that the appellate jurisdiction of this Court under Art. 136 can be invoked in proper cases against awards and other orders made by Industrial Tribunals under the Act. In discussing the question as to character of the Industrial Tribunal functioning under the Act, Mahajan J. observed that the condition precedent for bringing a tribunal within the ambit of Art. 136 is that it should be constituted by the State, and he added that a Tribunal would be outside the ambit of Art .136 if it is not invested with any part of the judicial functions of the State but discharges purely administrative or executive duties. In the opinion of the learned Judge, Tribunals which are found invested with certain functions of a Court of justice and have some of its trappings also would fall within the ambit of Art. 136 and would be subject to the appellate control of this Court whenever it is found necessary to exercise that control in the interests of justice. It would thus be noticed that apart from the importance of the trappings of a Court, the basic and essential condition which makes an authority or a body a tribunal under Art. 136, is that it should be constituted by the State and should be invested with the States inherent judicial power. Since this test was satisfied by the Industrial Tribunals under the Act, according to the majority decision, it was held that the awards made by the Industrial Tribunals are subject to the appellate jurisdiction of this Court under Art. 136.On the which do not apply to an arbitration award. Sections 23 and 24 which prohibit strikes andare inapplicable to the proceedings before the arbitrator to whom a reference is made under S. l0A, and that shows that the Act has treated the arbitration award and the prior proceedings in relation to it as standing on a different basis from an award and the prior proceedings before the industrial Tribunals or Labour Courts. Section 20, which deals with the commencement and conclusion of proceeding, provides, inter alia, by(3) that proceedings before an arbitrator under S. 10A shall be deemed to have commenced on the date of the reference of the dispute for arbitration and such proceedings shall be deemed to have concluded on the date on which the award becomes enforceable under S. 17A. It would be noticed that just as in the case of proceedings before the Industrial Tribunal commencement of the proceedings is marked by the reference under S. 10, so the commencement of the proceedings before the arbitrator is marked by the reference made by the parties themselves, and that means the commencement of the proceedings takes place even before the appropriate Government has entered on the scene and has taken any action in pursuance of the provisions of S. 10A.12. Rules have been framed by the Central Government and some of the State Governments under S. 38 (2)(aa), and these rules make provisions for the form of arbitration agreement, the place and time of hearing, the power of the arbitrator to take evidence, the manner in which the summons should be served, the powers of the arbitrator to proceed ex parte, if necessary, and the power to correct mistakes in the award and such other matters. Some of these Rules (as for instance, Central Rr. 7, 8, 13, 15, 16 and 18 to 28) seem to make a distinction between an arbitrator and the other authorities under the Act, whereas the Rules framed by some of the States (for instance the Rules framed by the Madras State 31, 37, 38, 39, 40, 41 and 42) seem to treat the arbitrator on the same basis as the other appropriate authorities under the Act. That, shortly, stated, is the position of the relevant provisions of the Statute and the Rules framed thereunder. It is in the light of these provisions that we must now consider the character of the arbitrator who enters upon arbitration proceedings as a result of the reference made to him under S.may be that the arbitration award is treated as an award for certain purposes under the Act; but the position, in law, still remains that it is an award made by an arbitrator appointed by the parties. Just as an award made by a private arbitrator becomes a decree subject to the provisions of Ss. 15, 16, 17 and 30 of the Arbitration Act, and thus binds the parties, so does an award of the arbitrator under S. 10A become binding on the parties by virtue of the relevant provisions of the Act. Against an award made by a private arbitrator, no writ can issue under Art. 225; much less can an appeal lie under Art 136. The position with regard to the award made by an arbitrator under S 10A is no different. In support of this argument, he has relied on the decision in R. v. Disputes Committee of National Joint Council for the Craft of Dental Technicians (1953) 1 All ER 327. On a motion for an order of certiorari to quash an order made by the Disputes Committee, Lord Goddard C. J. held that the Court has no power to direct the issue of orders of certiorari or of prohibition addressed to an arbitrator directing that a decision by him should be quashed or that he be prohibited from proceeding in an arbitration, unless he is acting under powers conferred by statute. "There is no instance of which I know in the books", observed Lord Goddard, "where certiorari or prohibition has gone to any arbitrator, except a statutory arbitrator, and a statutory arbitrator is a person to whom, by statute, the parties must resort." Thesuggests that though some powers have been conferred on the arbitrator appointed under S. 10A, he cannot be treated as a statutory arbitrator, because the parties are not compelled to go to any person named as such by the statute. The arbitrator is an arbitrator, of the parties choice and so, he cannot be treated as a statutoryit would be appropriate to treat him as a statutory arbitrator and as such, a writ of certiorari would lie against his decision under Art. 226. In support of this argument, Mr. Pai has referred us to the decision of the Court of Appeal in The King v. Electricity Commissioners, Ex parse London Electricity Joint Committee Co. (1920) Ltd., (1924) 1 KB 171. In that case, the scheme framed by the Electricity Commissioners established by S. 1 of the Electricity (Supply) Act, 1919, was challenged and it was held that the impugned scheme was ultra vires, and so, a writ of prohibition was issued prohibiting the Commissioners from proceeding with the further consideration of the Scheme. Dealing with the question as to whether a writ can issue against a body like the Electricity Commissioners constituted under the Act, Lord Atkin referred to the genesis and the history of the writs of prohibition and certiorari and held that the operation of the writs has extended to control the proceedings of bodies which do not claim to be, and would not be recognised as, Courts of Justice. Wherever any body of persons having legal authority to determine questions affecting the rights of subjects, and having the duty to act judicially act in excess of their legal authority they are subject to the controlling jurisdiction of the kings Bench Division exercised in these writs (p.205). Then Lord Atkin referred to a large number of previous decisions in which writs had been issued against different authorities statutorily entrusted with the discharge of different duties. To the same effect is the decision in the case of R. v. Northumber land Compensation Appeal Tribunal, Ex parte Shaw, (1931) 1 All ER 268 Vide also Halsburys Laws of England Vol. 2 p. 62 and Vol. 11 p. 122.15. The argument, therefore is that against an award pronounced by an arbitrator appointed under S. 10A, a writ of certiorari would lie under Art. 226, and so, the arbitrator should be deemed to be a Tribunal even for the purpose of Art. 136. In our opinion, this argument is notArt. 226 under which a writ of certiorari can be issued in an appropriate case, is, in a sense, wider than Art. 136, because the power conferred on the High Courts to issue certain writs is not conditioned or limited by the requirement that the said writs can be issued only against the orders of Courts of Tribunals. Under Art. 226 (1), an appropriate writ can be issued to any person or authority, including in appropriate cases any Government, within the territories prescribed. Therefore even if the arbitrator appointed under S. 10 A is not a Tribunal under Art. 136 in a proper case, a writ may lie against his award under Art. 226. That is why the argument that a writ may lie against an award made by such an arbitrator does not materially assist the appellants case that the arbitrator in question is a tribunal under Art. 136.That takes us to the construction of S. 10A. Section 10A enables the employer and the workmen to refer their dispute to arbitration by a written agreement before such a dispute has been referred to the Labour Court or Tribunal or National Tribunal under S. 10. If an industrial dispute exists or is apprehended, the appropriate Government may refer it for adjudication under S.10; but before such a reference is made, it is open to the parties to agree to refer their dispute to the arbitration of a person of their choice and if they decide to adopt that course, they have to reduce their agreement tothe parties reduce their agreement to writing, the reference shall be to such person as may be specified in the arbitration agreement. The section is not very happily worded; but the essential features of its scheme are not in doubt. If a reference has not been made under S. 10, the parties can agree to refer their dispute to the arbitrator of their choice, the agreement is followed by writing, the writing specifies the arbitrator or arbitrators to whom the reference is to be made and the reference shall be made accordingly to such arbitrator or arbitrators. Mr. Sule contendsand it is no doubt an ingenious argumentthat the last cl. of S. 10A means that after the written agreement is entered into by the parties, the reference shall be made to the person named by the agreement but it shall be made by the appropriate Government. In other words, the argument is that if the parties enter into a written agreement as to the person who should adjudicate upon their disputes, it is the Government that steps in and makes the reference to such named person. The arbitrator or arbitrators are initially named by the parties by consent, but it is when a reference is made to him or them by the appropriate Government that the arbitrator or arbitrators is or are clothed with the authority to adjudicate, and so, it is urged that the act of reference which is the act of the appropriate Government makes the arbitrator an industrial Tribunal and he is thereby invested with the States inherent judicial power.19. We do not think that the section is capable of this construction. The last clause which says that the reference shall be to such person or persons, grammatically must mean that after the written agreement is entered into specifying the person or persons, the reference shall be to such person or persons. We do not think that on the words as they stand, it is possible to introduce the Government at any stage of the operation of S. 10A (1). The said provision deals with what the parties can do and provides that if the parties agree and reduce their agreement to writing, a reference shall be to the person or persons named by such writing. The fact that the parties can agree to refer their dispute to the Labour Court, Tribunal or National Tribunal makes no difference to the construction of the provision.(2) prescribes the form of agreement and this form also supports the same construction. This form requires that the parties should state that they have agreed to refer the subsisting industrial dispute to the arbitration of the persons to be named in the form. Then it is required that the matters in dispute should be specified and several other details indicated. The form ends with the statement that the parties agree that the majority decision of the arbitrators shall be binding on them. This form is to be signed by the respective parties and to be attested by two witnesses. In other words, there is no doubt that the form prescribed by S. 10A(2) is exactly similar to the arbitration agreement, It refers to the dispute, it names the arbitrator and it binds the parties to abide by the majority decision of the arbitrators. Thus, it is clear that what S. 10A contemplates is carried out by prescribing an appropriate form under S. 10A(2).20. After the prescribed form is thus duly signed by the parties and attested, under subsection (3) a copy of it has to be forwarded to the appropriate Government and the conciliation officer and the appropriate Government has, within fourteen days from the date of the receipt of such copy, to publish the same in the official Gazette. The publication of the copy is, in a sense, a ministerial act and the appropriate Government has no discretion in the matter. Sub section (4) provides that the arbitrator shall investigate the dispute and submit his award to the appropriate Government ; and(5) excludes the application of the Arbitration Act to the arbitrations provided for by S. 10A. It is thus clear that when S. 10A (4) provides that the arbitrator shall investigate the dispute, it merely asks the arbitrator to exercise the powers which have been conferred on him by agreement of the parties under S. 10A (1). There is no doubt that the appropriate Government plays some part in these arbitrationpublishes the agreement; it requires the arbitration award to be submitted to it; then it publishes the award; and in that sense, some of the features which characterise the proceedings before the Industrial Tribunal before an award is pronounced and which characterise the subsequent steps to be taken in respect of such an award, are common to the proceedings before the arbitrator and the award that he may make. But the similarity of these features cannot disguise the fact that the initial and the inherent power to adjudicate upon the dispute is derived by the arbitrator from the parties agreement, whereas it is derived by the Industrial Tribunal from the statutory provisions themselves. In this connection, the provisions of S. 10 (2) may be taken into consideration. This clause deals with a case where the parties to an industrial dispute apply in the prescribed manner for a reference of their dispute to an appropriate authority, and it provides that the appropriate Government, if satisfied that the persons applying represent the majority of each party, shall make the reference accordingly. In other words, if the parties agree that a dispute pending between them should be referred for adjudication, they move the appropriate Government, and the appropriate Government is bound to make the reference accordingly. Unlike cases falling under S.10 (1) where in the absence of an agreement between the parties it is in the discretion of the appropriate Government to refer or not to refer any industrial dispute for adjudication, under S. 10 (2) if there is an agreement between the parties the appropriate Government has to refer the dispute for adjudication. But the significant fact is that the reference has to be made by the appropriate Government and not by the parties, whereas under S. 10 A the reference is by the parties, to the arbitrator named by them and it is after the parties have named the arbitrator and entered into a written agreement in that behalf that the appropriate Government steps in to assist the further proceedings before the namedthat case, the Bombay High Court has held that an arbitrator functioning under S. 10A is subject to the judicial superintendence of the High Court under Art. 227 of the Constitution and therefore, the High Court can entertain an application for a writ of certiorari in respect of the orders passed by the arbitrator. It was no doubt urged before the High Court that the arbitrator in question was not amenable to the jurisdiction of the High Court under Art. 227 because he was a private and not a statutory arbitrator; but the Court rejected the said contention and held that the proceedings before the arbitrator appointed under S. 10A had all the essential attributes of a statutory arbitration under S. 10 of the Act. From the judgment, it does not appear that the question about the construction of S. 10A was argued before the High Court or its attention was drawn to the obvious differences between the provisions of S. 10A and S. 10. Besides, the attention of the High was apparently not drawn to the tests laid down by this Court in dealing with the question as to when an adjudicating body or authority can be deemed to be a Tribunal under Art. 136.Like Art. 136, Art. 227 also refers to courts and Tribunals and what we have said about the character of the arbitrator appointed under S. 10A by reference to the requirements of Art. 136 may prima facie apply to the requirements of Art. 227. That, however, is a matter with which we are not directly concerned in the present appeals.In the result, the preliminary objection raised by the respondents in the appeals before us must be upheld and the appeals dismissed on the ground that they are incompetent under Article 136. The appellants to pay the costs of the respondents in C. A.204 of 1962. No order as to costs in C. A. Nos. 182 and 183/1962.