Case: Ahmedabad Millowners' Association &amp; Anr Vs. I.G. Thakore, President &amp; Ors

1. The appellants in this appeal are the Ahmedabad Mill-owners Association, of which all the cotton mills in Ahmedabad local area are members, including the second appellant, the Nagri Mills Ltd.The third respondent, the Textile Labour Association, Bhadra, Ahmedabad, (hereinafter referred to as "the Union") represents the workman employed in various mills which are members of the first appellant Association. Under Standing Orders settled underthe Bombay Industrial Relations Act, 1946 (Bombay Act XI of 1947) (hereinafter referred to as "the Act"), conditions of service, including those relating to leave, were prescribed in view of Clause 6 of Scheduled I of the Act. These Standing Orders were settled at a time when this clause 6 of the First Schedule to the Act read asProcedures and Authority to grant leave".Subsequently, Schedule I was amended so as to read as:"Procedure and Authority to grant leave" , and simultaneously, clause 11 was added in Schedule II which read as:"All matters pertaining to leave and holidays other than those specified in items 6 and 7 in Scheduleto this amendment in the Schedules, matters pertaining to leave could, thereafter, no longer be prescribed by Standing Orders, which were confined to matters contained in Schedule I only.2. By a letter dated 21st April, 1961, the Union gave notice to the first appellant, desiring that changes be made as specified in the Annexure to this letter. These changes sought in the Annexure related to grant of privilege leave, sick leave, casual leave, and pay in lieu of privilege leave to all workers employed in the local textile industry in the same manner in which, under the earlier Standing Orders, the clerical and some other staff were granted these benefits. This notice was given by the Union under S. 42 (2) of the Act. The dispute was not amicably settled, and consequently, the matter was referred for conciliation. The conciliation proceedings also failed, and, thereupon, the Conciliator, on 23 rd June, 1961, issued a certificate that he had come to the conclusion from the discussions which the parties had before him that the dispute was not capable of being settled by conciliation. Thereupon, by the letter dated 29th July, 1961, the Union referred the dispute to the Industrial Court under S. 73-A of the Act. Before the Industrial Court, various pleas were taken on behalf of the appellants and some of these pleas were the subject-matter of preliminary issues which were decided before the Industrial Court could proceed to give the final Award. Though a number of such preliminary issues were decided by Industrial Court, we are only concerned with two such issues, as they were the only two matters pressed before us on behalf of the appellants in this appeal. One issue raised was that S. 73A of the Act was ultra vires Article 14 of the Constitution as it granted a right to the Union to make a reference to the Industrial Court, while no such right was granted to the employers. The second point urged was that the Act did not apply to the cotton Mills which were members of the first appellant Association, because it had not been made applicable to them under S.2(4) of the Act, while it could not become applicable to them under S. 2(3) of the Act, because the Bombay Industrial Disputes Act, 1938, was not in force in these industries immediately before the commencement of the Act. Both these points were decided by the Industrial Court against the appellants. Consequently, the appellants moved a petition under Articles 226 and 227 of the Constitution in the High Court of Gujarat. The High Court rejected these preliminary pleas raised on behalf of the appellants and upheld the view of the Industrial Court that the reference was competent. The appellants have now come up to this Court under certificate granted by the High Court against this order of the High Court.

Court's reasoning:
In respect of matters covered by Schedules I and III, provision is made in subsection (4) of S. 42 which lays down that such disputes are to be decided by making au applications to the Labour Court, and. as we have indicated earlier. S. 73A does not apply to disputes which are required to be referred to a Labour Court. The result of all these provisions is that S. 73A of the Act comes into play only in cases when the dispute relates to matters not contained in Schedules I and III, the dispute is not resolved by private agreement or by conciliation, and there is no submission of the dispute to arbitration under S. 66 of thedo not think that the provision contained in S. 66 of the Act places the employer under any such, handicap. Under sub-section (2) of S. 66, the employer can straightaway offer that the dispute be referred to the arbitration of the Industrial Court, and thereupon, the Union would be debarred from refusing to agree to that submission. In any case, even if the Union were to refuse to agree to it, the State Government will determine under Section 71 of the Act whether the dispute should be referred to the arbitration of the Labour Court or the Industrial Court and refer it to that body. The mere fact that the Union may not agree to the offer of the employer to submit the dispute for arbitration to the Industrial Court whereupon the State Government can direct that the arbitration be made by a Labour Court or the Industrial Court does not in our opinion, place the employer in any disadvantageous position, and we do not think, therefore, that there was any requirement that the employer should also be given a right corresponding to the right of the Union under S. 73A of the Act.We consider that this submission is based on a misapprehension of the scope of S. 92 of the Act. The rules and regulations made by the Industrial Court under S. 92 are to govern the procedure of the Industrial Court in all proceedings before it irrespective of the fact whether those proceedings come up before it by a reference made by the State Government under S. 72 or S. 73 of the Act, or by A reference made by the Union under S. 73A of the Act, or by a joint submission made by the parties under S. 66(2) of the Act. Section 68 of the Act is in very general terms, and lays down that proceedings in arbitration under the whole of the Chapter XI are to be in accordance with the provisions ofthe Arbitration Act, 1940, in so far as they may be applicable. The provisions of the Arbitration Act have, therefore, been made applicable not only to arbitrations by submission under Section 66 of the Act, but also to arbitrations on references made by the State Government under Section 72 or Section 73 or a reference made by a Union under S. 73-A of the Act. If the submission or the reference happens to be to the Industrial Court, that Court must follow the rules and regulations made under S. 92, and the provisions of the Arbitration Act will only apply insofar as they may be applicable in view of those rules and regulations. Consequently, whether a dispute is referred for arbitration to the Industrial Court by submission under Section 66(2) of the Act, or by, a reference under Section 73-A of the Act, that Court has to proceed in the same identical manner and the parties seeking the reference obtain the award in both cases under identical circumstances.9. In this connection, the regulations made by the Industrial Court, known as the Industrial Court Regulations 1947, were brought to our notice. A perusal of these regulations shows that, in the matter of procedure of the Industrial Court for dealing with arbitrations made by submissions under Section 66, or by references under other sections, there is uniformity and no distinction is made between references under these different sections. The Industrial Court is required to proceed in the same manner in all cases and to give its decision under S. 87 of the Act. It is significant that Section 87, defining the duties of the Industrial Court uses identical language in respect of all arbitrations by the Industrial Court under Clause (v) the duty of the Industrial Court is laid down to be to decide industrial disputes referred to it in accordance with submissions registered under S. 66 which provide for such reference to the Industrial Court, and under Clause (vi), the duty of the Industrial Court is similarly defined to be to decide industrial disputes referred to it under Sections 71, 72, 73 or 73-A. The Industrial Court, in all cases, is required to give a decision on the dispute, and hence, in all these proceedings, the parties have identical rights in the matter of procedure of the Industrial Court of hearing and of obtaining a decision from it. This makes it clear that Section 73-A of the Act was required only to fill up a gap which would have existed, leaving no remedy to a Union to obtain arbitration of a dispute if the employers did not agree to that arbitration, and that no similar right was required to be conferred on the employers who, under the other provisions of the Act, could always obtain a reference of the dispute to arbitration by making a submission under Section 66 which the Union was bound to agree to. The first point raised on behalf of the appellants has therefore, no force and Section 73-A of the Act cannot be held to be invalid.10. On the second question, it has rightly been urged on behalf of the appellants that the Act was not applied by the State Government to the industries run by the appellants whether generally or by specifying any local area by issue of a notification under Sub-section (4) of Section 2 of the Act.11. Admittedly, the Bombay Act of 1938 was made applicable to the entire cotton industry throughout the Province of Bombay by various notifications issued in the year 1939 under that Act by the then Provincial Government. Ahmedabad, where the industries of the appellants are situated, was then a part of the Province of Bombay. The Bombay Act of 1938 was never entirely repealed. However, the Central Government enacted the Industrial Disputes Act No. 14 of 1947 which received the assent of the Governor General on 17th March 1947, and was brought into force from April 1, 1947. This Act did not, in terms, repeal the Bombay Act of 1938, but the contention on behalf of the appellants is that the Bombay Act of 1938 and the Central Industrial Disputes Act, 1947 both covered the same field of Industrial disputes, and consequently, it should be held that the Bombay Act of 1938 became void on the ground of repugnancy withthe Industrial Disputes Act, 1947 under Subsection (1) of Section 107 ofthe Government of India Act, 1935. It was urged that the Bombay Act of 1938 as well asthe Industrial Disputes Act, 1947 were both enacted under the power conferred on the Bombay Legislature and the Central Legislature under item 29 of Part II of the Concurrent List III of the Seventh Schedule tothe Government of India Act, 1935. The principle relied upon by the appellants is that, if two pieces of legislation cover the same field and each one of them contains a complete code making detailed provision for all aspects of the subject-Matter of the legislation, repugnancy must be held to arise; even though one Act may not, in terms, repeal the other and may not correspond section by section with the other.has, however, been rightly pointed out by the High Court in the judgment under appeal that the Bombay Act of 1938 did not confine itself entirely to the subject of settlement of industrial disputes. Chapter V of that Act containing Sections 26 to 33 clears with a matter which is not covered bythe Industrial Disputes Act, 1947 at all. These sections of the Bombay Act of 1938 lay down the procedure for prescribing Standing Orders regulating the relations between an employer and his employees, and for making changes therein. The prescribing of the Standing Orders and making of changes in them may not involve any industrial dispute at all. In fact at the first stage, when Standing Orders are prescribed, no question would arise of any industrial dispute requiring settlement. The Industrial Disputes Act, 1947, did not contain any provisions at all dealing with this subject of prescribing Standing Orders and making changes therein. Consequently, even if the submission made on behalf of the appellants be accepted thatthe Industrial Disputes Act, 1947, is an exhaustive code dealing with the question of settlement of industrial disputes, only those provisions of the Bombay Act of 1938 can be held to be repugnant and void on account of the repugnancy which also dealt with the same subject-matter of settlement of industrial disputes. The provisions contained in Chapter V of that Act, which had nothing to do with settlement of industrial disputes could not, therefore, be affected by the enactment ofthe Industrial Disputes Act, 1947, and hence, the enforcement ofthe Industrial Disputes Act, 1947 did not in any way affect the applicability of the provisions of Chapter V of the Bombay Act of 1938 to the industry run by the appellants. To the extent that Bombay Act of 1938 contained these provisions in Chapter V, that Act, therefore, continued in force and also continued to apply to the industries now inIt is not necessary to examine this further question in view of our decision that at least the provisions of Chapter V of the Bombay Act of 1938 continued in force. That Act did not stand repealed as a whole; at best, only a part of that Act can be held to have ceased to be effective because of the repugnancy withthe Industrial Disputes Act, 1947. But, while another part of that Act continued to be in force, the Bombay Act of 1938 also continued to be applicable to the cotton industry in Ahmedabad with which we are concerned. When the Bombay Industrial Relation Act, 1946 came into force on 29th September, 1947, therefore, the Bombay Act of 1938 was applicable to these industries, and consequently, under Sub-section (3) of Section 2 of the Act, the Act became applicable to the industry of the appellants and did not require a notification under Sub-section (4) of Section 2 to make it applicable. This point was also, therefore, rightly decided against the appellants, and the judgment of the High Court must be upheld.4. To appreciate this submission made on behalf of the respondents, certain features of the Act have to be examined and their implication taken into account. Section 73A grants a right of making a reference of an industrial dispute for arbitration to the Industrial Court only to "a registered union which is a representative of employees and which is also an approved union." Further, under the proviso to that section, the reference cannot be made if the employer offers in writing before the Conciliaton to submit the dispute to arbitration under the Act and the dispute to arbitration under the Act and the Union refuses to agree to it. Two other conditions attached are that the dispute must first be submitted to the Conciliator and can be referred for arbitration to the Industrial Court only when the Conciliator certifies that the dispute is not capable of being settled by conciliation, and that no such dispute is to be referred if, under any provisions of the Act, it is required to be referred to the Labour Court for its decision. It is the effect of all these detailed provisions, laying down limitations for reference under S. 73A, that requires examination.It is in this light that the provision which has to be made by the Union in its rules under Section 23 (1) (v) assumes importance. Whenever a dispute is raised either by an employer or by a Union which can ultimately take advantages of S.73A of the Act, theUnion must invariably offer that the dispute be submitted to arbitration, and, in the alternative if the employer offers to submit the dispute to arbitration, the Union must not refuse it. The result is that in respect of any such dispute, the Union has no option but to offer or agree to arbitration of the dispute under Section 66 of the Act. On the other hand, there is no such limitation placed on the employer. There is no provision in the making it compulsory for the employer either to submit the dispute to arbitration or to agree to the submission of the dispute to arbitration when offered by the Union. Consequently, whenever any industrial dispute arises, the employer can always ensure arbitration of that dispute by making an offer to the Union under Section 66 of the Act, whereupon the Union is compelled to agree to submission of the dispute to arbitration. Clearly, therefore, there was no need to make any provision empowering the employer to make a reference of the dispute for arbitration to the Industrial Court. On the other hand, if a Union wants a dispute to be settled and even offers that the dispute be submitted to arbitration under Section 66 of the Act, the employer can refuse, whereupon the Union would be left without any remedy. It is obvious that Sectionwas enacted to fill this gap and place the Union on parity with the employer so as to enable the Union to have any dispute settled by arbitration even when the employer does not agree to arbitration. These provisions granting the rights to the employers and the Union are, of course, in addition to, and without prejudice to, the provisions contained in sections 72 and 73 of the Act, under which the State Government is given the power to refer any industrial dispute between employees and employees and employers and employees to the arbitration of a Labour Court or the Industrial Court on the basis of a report made by the Labour Officer, or even otherwise. These provisions in Ss. 72 and 73 leave the discretion with the State Govt. to make a reference in appropriate cases, so that neither the employers nor the employees can, as of right, obtain a reference under these sections from the State Government. So far as they are concerned, the provisions contained in the act require that the disputes between hem must first go before a conciliator for conciliation, and subsequently, either part a can exercise its option of offering the submission of the dispute to arbitration when such an enquiry is made from them b the Conciliator under S. 58 (5) of the Act. Thereafter if the offer is by an employer, the Union, under its rules, is bound to accept the submission, so that whenever an employer desires that a dispute be decided by arbitration, the Union is compelled to agree to it. In the reverse case, when a Union wants submission of the dispute to arbitration, the Union is compelled to agree to it. In the reverse case, when a Union wants submission of the dispute to arbitration, the employer has discretion not to agree, and then only can the Union resort to S. 73A and refer the dispute to the Industrial Court. This section, in these circumstance did not at all require that the right granted to the Union should also be granted to the employer.7. In this connection, two other points were urged by learned counsel for the appellant before us. One was that, under S. 66 of the Act, the offer to submit the dispute for arbitration can be to any private individual also, and this did not give the right to the employer to have it decided by an Industrial Court so as to be equated with the right of the Union to have it decided by the Industrial Court wedo not think that the provision contained in S. 66 of the Act places the employer under any such, handicap. Under(2) of S. 66, the employer can straightaway offer that the dispute be referred to the arbitration of the Industrial Court, and thereupon, the Union would be debarred from refusing to agree to that submission. In any case, even if the Union were to refuse to agree to it, the State Government will determine under Section 71 of the Act whether the dispute should be referred to the arbitration of the Labour Court or the Industrial Court and refer it to that body. The mere fact that the Union may not agree to the offer of the employer to submit the dispute for arbitration to the Industrial Court whereupon the State Government can direct that the arbitration be made by a Labour Court or the Industrial Court does not in our opinion, place the employer in any disadvantageous position, and we do not think, therefore, that there was any requirement that the employer should also be given a right corresponding to the right of the Union under S. 73A of the Act.