Case: M/s. B.P.L. Ltd. &amp; Others Vs. R. Sudhakar &amp; Others

3. In each one of these appeals appellant No.1 is a company and appellant No.2 is one of its shareholders. The BPL Group of Companies Karmikara Sangha (Union) had raised certain disputes on behalf of the workmen of the appellant companies. On failure of conciliation of disputes came to be referred by the Government for adjudication to the Industrial Tribunal, Bangalore (for short the Tribunal). By order dated 26.2.1999 the aforesaid union, not being fully satisfied with the order of reference, filed writ petition No. 7355/99 in the High Court seeking a mandamus to the State Government for referring some more points/ disputes raised by them. A learned single Judge of the High Court on 11.3.1999, at the stage of issuing notice for admission, passed the interim order in the following terms:The operation of the order dated 26.2.1999 bearing No. KAE 117 KA KY VI 99 & No. KAE117, KA KY VI 99 passed by1 (Annexure A and B to the writ petition respectively) be and the same is hereby stayed for a period of two weeks from 11.3.19994. During the course of hearing the learned counsel for the parties submitted that this interim order, having been continued, was in operation till the writ petition was finally disposed of on 12.4.1999. During the pendency of the said writ petition the workmen were dismissed from the service on 31.3.1999 on the ground of serious misconduct. The aggrieved workmen (respondents herein) filed a complaint under Section 33A of the Act before the Tribunal complaining that they have been dismissed from service in contravention of the provisions contained in Section 33(2) of the Act and, therefore, they were entitled to be reinstated. The Management of the appellant companies resisted the complaint raising a preliminary objection to the effect that the orders of dismissal were passed during the period when the order of stay passed by the learned single Judge in the aforesaid writ petition No. 7355/99 was in operation and as such there was no violation of Section 33(2)(6) of the Act. It was urged that when the appellant companies took action in accordance with law no proceedings were pending before the Tribunal as the operation of the very order of reference had been stayed by the High Court. The Tribunal, by its order dated 19.5.2000, rejected the preliminary objection. The appellant companies filed writ petition Nos.8 of 2001 challenging the correctness and validity of the aforementioned order of the Tribunal rejecting the preliminary objection. The learned single Judge of the High Court dismissed the writ petitions upholding the view taken by the Tribunal. Aggrieved by and not satisfied with the order of the learned single Judge of the High Court the appellant companies filed writ appeals before the Division Bench of the High Court. The Division Bench of the High Court, fully concurring with the conclusion arrived at by the learned single Judge, dismissed the writ appeals by the common order under challenge in these appeals.

Court's reasoning:
11. In the present case then were dismissed from service on account of misconduct during the period when operation of the order of reference remained stayed. Compliance of proviso to Section 33(2)(b) would be required if the dispute was pending on the date when the workmen were dismissed from service. The Tribunal held that the dispute was pending before it notwithstanding stay of the operation of the order of reference by the GovernmentWhile admitting the liability to pay the appellant company stated that it was expecting certain sums of money towards developmental loan from the Government of Karnataka and as soon as the same was received it would pay the outstanding amount. Since the amount was not paid respondent issued a notice under Section 434 of the Companies Act and, thereafter, a petition was filed in the High Court under Section 433(e) of the Companies Act for winding up of the appellant company12. We are concerned only with question number one. The proceedings before the Board under Sections 15 and 16 of the SICA had been terminated on 26.4.1990. The appeal filed by the appellant company before the appellate authority had been dismissed on 7.1.1991. As a result of these orders no proceeding under the Act was pending either before the Board or before the appellate authority on 21.2.1991 when the Delhi High Court passed the interim order staying the operation of the order of appellate authority dated 7.1.1991. This Court held that the said stay order could not have the effect of reviving the proceedings, which had been disposed of by the appellate authority by its order dated 7.1.1991 observing that While considering the effect of an interim order staying the operation of the order under challenge, a distinction has to be made between quashing of an order and stay of operation of an order. Quashing of an order results in restoration of the position as it stood on the date of passing of the order which has been quashed. The stay of operation of an order does not, however, lead to such a result. It only means that the order which has been stayed would not be operative from the date of passing of the stay order and it does not mean that the said order has been wiped out from existence. This means that if an order passed by the appellate authority is quashed and the matter is remanded, the result would be that the appeal which had been disposed of by the said order of the appellate authority would be restored and it can be said to be pending before the appellate authority after the quashing of the order of the appellate authority. The same cannot be said with regard to an order staying the operation of the order of the appellate authority because in spite of the said order, the order of the appellate authority continues to exist in law and so long as it exists it cannot be said that the appeal, which has been disposed of by the said order has not been disposed of and is still pending. In that view this Court held that it cannot be said that any proceedings under the Act were pending before the Board or the appellate authority on the date of passing the order dated 14.8.1991 by the learned single Judge of the Karnataka High Court for winding up of the company or on 6.1.1991 when the Division Bench passed the order dismissing OSA No. 16 of 1991 filed by the company and, therefore, there was no impediment in the High Court dealing with the winding up petition filed by the respondents13. In the case on hand the situation is entirely different. The Tribunal gets jurisdiction only on reference made by the Government. When the operation of the very order of reference was stayed the question of dispute pending before the Tribunal did not arise inasmuch as the reference order itself stood suspended. So long as stay order was operating it could not be said that the dispute was pending before the Tribunal. Admittedly, when workmen were dismissed from service stay order was operating. Learned single Judge as well as the Division Bench of the High Court have proceeded on wrong footing relying upon the decision of this Court in Shri Chamundi Mopeds Ltd. (supra), that the order of the reference was not wiped out by virtue of staying of the operation of order of reference. It is not the question as to whether the order of the reference is wiped out but the question is what is the effect of the staying of the operation of order of reference itself. Once the operation of order of reference is stayed there is no question of dispute pending before the Tribunal so long as the said order remains in operation because reference precedes dispute. To put it differently, dispute could come up for adjudication by the Tribunal pursuant to the order of reference only. If in a pending proceeding operation of order is stayed pending disposal of the main matter such as an appeal or revision, obviously the impugned order does not get quashed or wiped out. It only remains suspended. But the position is different in this case, as already stated above. It was not a case where the dispute was pending and only further proceedings were stayed. When the order of reference itself was stayed the Tribunal did not have the jurisdiction to pass any further order. As such the question of either management making an application under the proviso to Section 33(2)(b) or the Tribunal passing an order of such application would not arise. In case any tribunal proceeds to pass an order in spite of stay of the operation of the order of reference by the High Court it may amount to contempt of the order of the High Court. In case of some grave misconduct the management cannot afford to sit idle or simply wait to take action, particularly, when stay of the operation of the order of reference is obtained at the instance of union on behalf of the workmen. The case of Shri Chamundi Mopeds Ltd. is quite distinguishable and it is on the facts of that case. Even in that case it is stated that the order of stay did not amount to revival of appeal or proceedings16. The effect of grant of stay of operation of the order of industrial reference was that the Industrial Tribunal could not take up the reference for adjudication. Consequently, no action based on such reference could be taken by the Tribunal including grant or refusal of approval to the disciplinary action under Section 33(2) of the Act. The employer could not have, therefore, approached the Tribunal for seeking approval to its disciplinary action so long as the order of reference remained stayed by the order of the High Court. The industrial reference stood revived, only when the writ petition against the industrial reference was finally disposed of by the High Court on 12.4.1999. The industrial reference would be said to be pending only from 12.4.1999. The action of dismissal of the services of the workmen was taken on 31.3.1999. On that date, as a result of the order of the stay of the operation of reference by the High Court on 11.3.1999, no reference was pending for adjudication before the Tribunal. The provisions of Section 33 of the Act are attracted only when an industrial dispute is pending for adjudication and not merely when an order of reference is made by the Government. In the present case, proceedings were not pending before the Tribunal because of the stay of the order of reference itself. Bothn (2) of Section 33 employ the language during the pendency of any proceeding which clearly convey that obligation on the part of the employer under the said Section of seeking express permission for the purpose ofn (1) or approval for the purpose ofn (2) arises only when there are proceedings pending on industrial dispute before the Tribunal or other specified statutory adjudicatory authorities under the Act17. In the present case as on date of dismissal of workmen from service the interim order staying the operation of the order of reference was operative. Hence the question of dispute being pending on that day did not arise. As already stated above, in order to make an application under proviso to Section 33(2)(b) of the Act, pendency of the proceeding was essential. In this view the appellant companies did not contravene the provisions of Section 33(2)(b) of the ActNo doubt, the object of Section 33 of the Act is to protect the workman concerned during pendency of the proceedings in a dispute against victimization by the employer for having raised industrial dispute or his continuing the pending proceedings. Further it is to ensure that the proceedings in connection with the industrial disputes already pending should be concluded in a peaceful atmosphere and to say that no employer should, during pendency of the proceedings, take action of any kind mentioned in this said Section, giving rise to fresh disputes leading to straining the relations between the employer and the workman. But, then, the requirements of the said Section are to be satisfied in order to invoke the jurisdiction of the Tribunal under the said provision. For the purpose of the present case pendency of the proceedings before the Tribunal wase condition for making an application under the proviso to Section 33(2)(b) of the Act. Since the proceedings were not pending at the relevant time, i.e. on the date of dismissal of the workmen by virtue of the interim order granted by the High Court, the preliminary objection raised by the appellant Companies as to the very maintainability of complaint under Section 33A is valid and sustainable20. The question set out above in the beginning of this judgment is answered in the negative21. Thus, viewed from any angle in our considered opinion the impugned order cannot be sustained. The preliminary objection raised by the appellant companies is upheld and consequently the complaint made by then is dismissed as not maintainable. We must, however, make it clear that this order does not prejudice or preclude the respondent workmen from questioning the validity and correctness of the order of their dismissal from service by raising appropriate dispute in accordance with law.