Case: The State Of Bihar Vs. D. N. Ganguly &amp; Others

The question arises in this way: On, the Government of Bihar referred an industrial dispute between the management of the Bata Shoe Co. Ltd., Dighaghat (Patna) and their 31 workmen, mentioned in annexure A, in exercise of the powers conferred on the said government by S. 7 read with S. 10(1) of the Act. The dispute was whether the dismissal of the workmen in question was justified; if not, whether they were entitled to reinstatement or any other relief. For the adjudication of this dispute, an industrial tribunal with Mr. Ali Hassan as the sole member was constituted. This was reference No. 10 of 1954. Then, on5 L 696, a similar industrial dispute between the same Bata Company and its 29 other workmen was referred by the Government of Bihar to the same tribunal. This was reference No. 1 of 1955. While the proceedings in respect of the two references, which had been consolidated by the tribunal, were pending before it and had made some progress, the Government of Bihar issued a third Notification No., by which it purported to supersede the two earlier notifications, to combine the said to disputes into one dispute, to implead the two sets of workmen involved in the two said disputes together, to add the Bata Mazdoor Union to the dispute, and to refer it to the adjudication of the industrial tribunal of Mr. Ali Hassan as the sole member. The dispute thus referred to the tribunal was, Whether the dismissal of the 60 workmen, mentioned in annexure B, was justified or unjustified; and to what relief, if any, those workmen are entitled? On receipt of this notification, the tribunal passed an order on, cancelling the hearing of the two prior references which had been fixed for, and directing that the files of the said references should be closed2. The Bata Company and its workmen then filed two separate applications before the High Court of Judicature at Patna under Arts. 226 and 227 of the Constitution and prayed that the last notification should be quashed as being illegal and ultra vires. These two applications were numbered as M. J. C., Nos. 546 and 590 of 1955 respectively. On, the High Court held that the Government of Bihar had no power or authority to supersede the earlier notifications, allowed both the applications and issued a writ in the nature of certiorari quashing the impugned notification of, and also a writ in the nature of mandamus requiring the industrial tribunal to proceed expeditiously withs Nos. 10 of 1954 and 1 of 1955 and to bring them to a conclusion in accordance with law. Against the order the Government of Bihar applied for and obtained leave from this court on. That is how the two present appeals have come for disposal before us4. In order to appreciate the background of the impugned notification, it would be relevant to mention some material facts. It appears that the workmen of the companys factory at Digha formed a union at the close of the last World War. The president of the said union was Mr. John and its general secretary was Mr. Fateh Narain Singh. On, the company entered into a collective agreement with the said union and by mutual consent the Standing Orders and Rules, certified under the Industrial Employment (Standing Orders) Act of 1946, were settled. The union was recognised as the sole and exclusive collective bargaining agency for the workmen of the company. Towards the end of 1954, two groups of the union were formed and rivalry grew between them. One group was led by Mr. Fateh Narain Singh and other by Mr. Bari. On, the union through its general Secretary Mr. Fateh Narain Singh served on the company a a slow down notice with effect from, Mr. Bari purporting to act as the president of the union asked his followers to go on strike as from. The demands made by Mr. Fateh Narain Singh gave rise to conciliation proceedings under the Act and ended in the settlement which was duly recorded on. In spite of the said settlement some workmen, including the sixty workmen in question who supported Mr. Bari, went on an illegal strike on, although as members of the union they were bound by the settlement. The majority of the workmen were opposed to the strike and in fact on, a letter singed by 500 workmen who disassociated themselves from the strike, was received by the company. The company was requested to make suitable arrangements to enable these workmen to attend their duties. The strike succeeded only partially because out of 854 workmen employed in the companys factory at Digha nearly 500 workmen attended the factory in spite of the threats of the strikers. The strike was declared illegal by the appellant under Sec. 23 (c) of the Act. Subsequently, the company served the strikers with charge sheets and in the end, 274 workmen, including the sixty workmen in question, were dismissed from service by the company. Thereafter the union entered into negotiations with the company, as a result of which it was agreed that 110 strikers would be employed by the company in the same manner in which 76 strikers had already been employed by it. It was further agreed that 30 strikers were to remain dismissed and not considered eligible for employment or for any benefits. In regard to the remaining 30 strikers, the company agreed to consider their cases later on for reemployment. During these negotiations, these sixty workmen in question did not make any demand to the management foreither individually or collectively, nor was their case raised by any other organisation or body of workmen. In the result, so far as the union was concerned the dispute regarding the whole body of strikers who had been dismissed by the company came to an end by virtue of the agreement between the company and the union5. Notwithstanding this agreement, Mr. Sinha, the conciliation officer, wrote to the company on, that he desired to hold conciliation proceedings in respect of some of the dismissed workmen. The dispute raised by the sixty workmen was not sponsored by any organisation or body of workmen. In fact the secretary of the union wrote to the Commissioner of Labour on, that he strongly objected to the alleged dispute of sixty workmen being referred to adjudication. It was under these circumstances that the appellant issued the first two notifications on, the union made an application before the tribunal alleging that the majority of the workmen were opposed to theof the sixty workmen in question and consequently it had interest in the proceedings before the tribunal. Two applications were made before the tribunal by other workmen to be joined to the proceedings on the ground that they were opposed to theof the workmen whose cases were pending before the tribunal. All these applications were rejected by the tribunal7. It would appear that Mr. Fateh Narain Singh then moved the Department of Labour, Government of Bihar, and it was apparently pursuant to the representation made by him that the third notification was issued by the appellant superseding the first two notifications and referring the whole dispute afresh to the industrial tribunal with the union of Mr. Fateh Narain Singh added as a party to the proceedings. That in brief is the genesis of the impugned notification in the present case.

Court's reasoning:
8. Dr. Bannerjee for the appellant has urged before us that in dealing with the question about the powers of the appropriate government under Sec. 10 (1) of the Act, it would be necessary to bear in mind the facts which led to the cancellation of the first two notifications and the issue of the third impugned notification. He contends that in issuing the third notification the appellant has actede and solely in the interests ofy and justice; it came to the conclusion that it was necessary that the union should be heard before the disputes in question are adjudicated upon by the Industrial Tribunal and that it would be more convenient and in the interest of industrial peace and harmony that the dispute should be referred to the tribunal in a more comprehensive and consolidated form bringing before the tribunal all the parties interested inIn our opinion, the bona fides of the appellant on which reliance is placed by Dr. Bannerjee are really not relevant for determining the appellants powers under S. 10(1) of the Act. If the appellant has authority to cancel the notification issued under S. 10(1), and if the validity of the cancelling notification is challenged on the ground of mala fides it may be relevant and material to inquire into the motives of the appellant.But, if the appellant has no authority to cancel or revoke a notification issued under S. 10 (1), the bona fides of the appellant can hardly validate the impugned cancellation.That is why, we think, the appellant cannot base its arguments on the alleged bona fides of its conduct11. The power claimed by the appellant to cancel a reference made under section 10 (1) seems also to be inconsistent with some other provisions of the Act. The proviso to Sec. 10 lays down that the appropriate government shall refer a dispute relating to the public utility service when a notice under Sec. 22 has been given, unless in considers that the notice has been frivolously or V exatiously given, or that it would be inexpedient to refer the dispute. This proviso indicates that in regard to a dispute relating to public utility concerns normally the government is expected to refer it for adjudication. In such a case if the government makes the reference it is difficult to appreciate that it would be open to the government pending the proceedings of the said reference before the Industrial Tribunal to cancel the reference and supersede its original order in that behalf. Section 10,. (2) deals with the case where the parties to an industrial disputes apply to the appropriate government in the prescribed manner, either jointly or separately, for a reference of the dispute to the appropriate authority; and it provides that in such a case if the appropriate government is satisfied that the persons applying represent the majority of each party it shall make the reference accordingly. In such a case all that the government has to satisfy itself about is the fact that the demand for reference is made by the majority of each party, and once this condition is satisfied, the government is under obligation to refer the dispute for industrial adjudication. It is inconceivable that in such a case the government can claim power to cancel a reference made under Sec. 10 (2).Indeed in the course of his arguments. Dr. Bannerjee fairly conceded that it would be difficult to sustain a claim for an implied power of cancellation in respect of a reference made under S. 10 (2).12. There is another consideration which is relevant is dealing with this question. Section 12 which deals with the duties of the conciliation officer provides inthe conciliation officer should try his best to bring about settlement between the parties. If no settlement is arrived at, the conciliation officer has to make a report to the appropriate government, as provided in. (4) of Sec. 12. This report must contain a full statement of the relevant facts and circumstances and the reasons on account of which in the opinion of the officer the settlement could not be arrived atn (5) the lays down that if, on a consideration of the report, the appropriate government is satisfied that there is a case for reference to a board, labour court, tribunal or national tribunal, it may make such a reference. Where the appropriate government does not make such a reference it shall record and communicate to the parties concerned its reasons therefor. This provision imposes on the appropriate government an obligation to record its reasons, for not making a reference after receiving a report from the conciliation officer and to communicate the said reasons to the parties concerned. It would show that when the efforts of the conciliation officer fail to settle a dispute, on receipt of the conciliation officers report by the appropriate government, the government would normally refer the dispute for adjudication; but if the government is not satisfied that a reference should be made, it is required to communicate its reasons for its decision to the parties concerned. If the appellants argument is accepted, it would mean that even after the order is made by the appropriate government under Sec. 10 (1), the said government can cancel the said order without giving any reasons. This position is clearly inconsistent with the policy underlying the provisions of Sec. 12 (5) of the Act. In our opinion, if the legislature had intended to confer on the appropriate government the power to cancel an order made under Sec. 10 (1), the legislature would have made a specific provision in that behalf and would have prescribed appropriate limitations on the exercise of the said power13. It is, however, urged that if a dispute referred to the industrial tribunal under Sec. 10 (1) is settled between the parties, the only remedy for giving effect to such a compromise would be to cancel the reference and to take the proceedings out of the jurisdiction of the industrial tribunal. This argument is based on the assumption that the industrial tribunal would have to ignore the settlement by the parties of their dispute pending before it and would have to make an award on the merits in spite of the saidWe are not satisfied that this argument is. It is true that the Act does not contain any provision specifically authorising the industrial tribunal to record a compromise and pass an award in its terms corresponding to the provisions of O. XXIII, R. 3 of the Code of Civil Procedure. But it would be very unreasonable to assume that the industrial tribunal would insist upon dealing with the dispute on the merits even after it is informed that the dispute has been amicably settled between the parties. We have already indicated that amicable settlements of industrial disputes which generally lead to industrial peace and harmony are the primary objects of this Act. Settlements reached before the conciliation officers or boards are specifically dealt with by Ss. 12 (2) and 13 (3) and the same are made binding under Sec. 18. There can, therefore, be no doubt that if an industrial dispute before a tribunal is amicably settled, the tribunal would immediately agree to make an award in terms of the settlement between the parties. It was stated before us at the bar that innumerable awards had been made by industrial tribunals in terms of the settlements between the parties. In this connection we may incidentally refer to the provisions of Sec. 7 (2) (b) of the Industrial Disputes (Appellate Tribunal) Act, 1950, (XLVIII of 1950), which expressly refer to an award or decision of an industrial tribunal made with the consent of the parties. It is true that this Act is no longer in force; but when it was in force, in providing for appeals to the Appellate Tribunal set up under the said Act, the legislature had recognised the making of awards by the industrial tribunals with the consent of the parties. Therefore, we cannot accept the argument that cancellation of reference would be necessary in order to give effect to the amicable settlement of the dispute reached by the parties pending proceedings before the industrial tribunalThe discretion given to the appropriate government under S. 10(1) in the matter of referring industrial disputes to industrial tribunals is very wide; but it seems the power to cancel which is claimed is wider still; andit is claimed by implication on the strength of S. 21 of the General Clauses Act. We have no hesitation in holding that the rule of construction enunciated by S. 21 of the General Clauses Act in so far as it refers to the power of rescinding or cancelling the original order cannot be invoked in respect of the provisions of S. 10(1) of the Industrial Disputes Act17. The decision of this court in Strawboard Manufacturing Co. Ltd., v. Gutta Mills Workers Union. 1953 SCR 439  : (AIR 1953SC 95) (B), is then cited in support of the proposition that the appellant has implied power to cancel its order made under S. 10(1). In this case, the government of the State of Uttar Pradesh had referred an industrial dispute to the Labour Commissioner on, and had directed the Commissioner to make his award not later than. While the proceedings were pending before the Commissioner, two additional issues were referred to him. Ultimately, the award was made on April 13, and it was sought to be validated by the issue of a notification by the Governor of Uttar Pradesh on April 26, by which the time for making the award was retrospectively extended up to. This court held that the notification retrospectively extending the period to make the award was invalid. Since the award had been made beyond the period prescribed by the original notification, it was voidIt is, however, argued that in dealing with the question of the validity of the award it was observed by Das, J., (as he then was), In the circumstances, if the State Government took the view that the addition of those two issues would render the time specified in the original order inadequate for the purpose it should have cancelled the previous notification and issued a fresh notification referring all the issues to the adjudicator and specifying a fresh period of time within which he was to make his award. The State Government did not adopt that. As we read the judgment, we are not inclined the accept the appellants assumption that the passage just cited expresses the view accepted by this courtAs we have already indicated, the scheme of the Act plainly appears to be to leave the conduct and final decision of the industrial dispute to the industrial tribunal once an order of reference is made under S. 10(1) by the appropriate government. We must accordingly hold that Bishan Narain, J., was in error in taking the view that the appropriate government has power to cancel its own order made under S. 10(1) of the ActThis decision would not assist the appellant because in the present case we are not considering the power of the government to amend, or add to, a reference made under S. 10(1).22. We must therefore confirm the finding made by the learned judges of the High Court at Patna, that the notification issued by the appellant cancelling the first two notifications is invalid and ultra vires23. That takes us to the question as to the form in which the final order should be passed in the present appeals. The High Court has purported to issue a writ of certiorari against the State government quashing the impugned notification.It has however, the impugned notification. It has however, been held by this court in State of Madras v. C. P. Sarathy, 1953 SCR 334: (AIR 1953 SC 53  )(G) that in making a reference under S. 10(1) the appropriate agreement 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 its administrative in character. That being so, we think it would be more appropriate to issue a writ of mandamus against the appellant in respect of the impugned notification.We would also like to add that since the first two industrial disputes referred by the appellant under the first two notifications have remained pending before the tribunal for a fairly long time, it is desirable that the tribunal should take up these references on its file and dispose of them as expeditiously as possible.