Full Judgment Text
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PETITIONER:
HOCHTIEF GAMMON
Vs.
RESPONDENT:
INDUSTRIAL TRIBUNAL, BHUBANESHWAR, ORISSA AND ORS.
DATE OF JUDGMENT:
01/04/1964
BENCH:
GAJENDRAGADKAR, P.B. (CJ)
BENCH:
GAJENDRAGADKAR, P.B. (CJ)
WANCHOO, K.N.
GUPTA, K.C. DAS
CITATION:
1964 AIR 1746 1964 SCR (7) 596
CITATOR INFO :
RF 1972 SC1216 (4)
RF 1975 SC2226 (1,7)
ACT:
Industrial Dispute--Addition and Summoning of
Parties--Reference-Powers of Industrial Tribunal-Test and
Limitation-Whose liability to pay Workmen’s claim-Who is
Employer-Disputes, whether different and substantial-Indus-
trial Disputes Act, 1947 (14 of 1947), Ss., 10, 18.
HEADNOTE:
On reference of an industrial Dispute between the appellants
and the respondents, its workmen, the office of the Indus-
trial Tribunal issued notice not only to the appellant and
;its workmen, the respondents but also to Hindustan Steel
Ltd. This was done apparently because a copy of the
notification of the Government containing the order of
reference had been served on the said Hindustan Steel Ltd.
The Hindustan Steel Ltd. appeared and urged that it was not
concerned or interested in the dispute and should not be
added a party to the reference. The appellant contended,
inter alia, that the interests of Hindustan Steel Ltd. and
the appellant were common in the pending proceedings, and
the material documents which may have to be proved were with
the said concern. The Tribunal considered the question and
held that it would decide the matter later; meanwhile it
directed Hindustan Steel to be present during the hearing of
the reference on merits. The appellant, who was
dissatisfied with this order as it wanted a specific
direction to add Hindustan Steel as a party to the
reference, moved the High Court under Art. 226 of the
Constitution. This writ petition failed as the High Court
held that the petition was premature as the Tribunal had not
yet passed a final order under Leave:
Held: (i) S. 18(b) as it originally stood postulates
that the Tribunal had an implied power to summon parties,
other than parties to the industrial dispute to appear in
the proceedings before it.
(ii) Where certain points of dispute have been referred to
the Industrial Tribunal for adjudication, it may while
dealing with the said points deal with matters incidental
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thereto, and than parties to the industrial dispute to
appear in the proceed the Tribunal feels that some persons
who are not joined to the reference should be brought before
it, it may be able to make an order in that behalf under s.
18 (3)(b) as it now stands.
(iii) Section 10(5) has now conferred power on the
appropriate Government to add to the reference other
establishments, groups or classes of establishments of a
similar nature, if it is satisfied that establishments are
likely to be interested in, or affected by such dispute.
The appropriate Government may add them to the said
reference either at the time when the reference is initially
made or during the pendency of the said reference
proceedings; but in every case, such additions can be made
before the award is submitted. Now, if such
597
persons are added to the reference, the Industrial Tribunal
may in exercise of its powers under s. 18 (3)(b) summon them
to appear before it.
(iv) The material words in s. 18 (3)(b) are the same as they
were originally included in s. 18(b), and so, the implied
power which could be exercised by the Industrial Tribunal
under s. 18(b) can now be exercised by it under s. 18(3)(b).
If the Tribunal thinks that the parties who were summoned to
appear before it were so summoned without proper cause, it
may record its ,opinion to that effect and then the award
which it pronounces would not be binding on them.
(v) What the Tribunal can consider in addition to the dis-
putes specified in the order of reference, are only matters
incidental to the said disputes and that naturally suggests
certain obvious limitations on the implied power of the
Tribunal to add parties to the reference before it,
purporting to exercise its implied power under s. 18(3)(b).
If it appears to the Industrial Tribunal that a party named
in the order of reference does not completely or adequately
represent the interest either of the employer or of the
employee, it may direct the joining of other persons
necessary to represent such interest. Similarly if the
union specified in the reference does not represent all the
employees it may be open to the Tribunal to add such other
unions as it may deem necessary. The test always must be,
is the addition of the party necessary to make the
adjudication itself effective and enforceable? It is in the
light of this test that the implied power of the Tribunal to
add parties must be held to be limited.
P. G. Brooks, Receiver appointed by the Trustees for the
mortgagee debenture holders of the Madras Electric Tramways
(1904) Ltd. v. Industrial Tribunal, Madras, A.I.R. 1954 Mad.
369, Radhakrishna Mills Ltd., Peelamadu, Coimbatore Ltd. v.
Special Industrial Tribunal, Madras, A.I.R. 1954 Mad. 606
and Anil Kumar Upadhaya v. P. K. Sarkar, A.I.R., 1961 Cal.
60, referred to
(vi) The question on whom would rest the liability to Pay
the respondents’ claim as a result of contract between the
appellant and Hindustan Steel raises an entirely different
dispute and such dispute would be wholly foreign to the
industrial dispute which has been referred to the Tribunal
for adjudication.
(vii) The question as to who is the employer as between
the appellant and Hindustan Steel is a substantial dispute
between them and cannot be regarded as incidental in any
sense. Where the appropriate Government desires that the
question as to who the employer is should be determined, it
generally makes a reference in wide enough terms and
includes as parties to the reference different persons who
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are alleged to be the employers.
JUDGMENT:
CIVIL APPELLATE JURISDICTION,:Civil Appeal No. 611 of 1963.
Appeal by special leave from the judgment and order dated
January 10, 1962, of the Orissa High Court in O J.C. No. 128
of 1961.
598
N. C. Chatterjee, G. Narayanaswamy, J. B. Dadachanji, O. C.
Mathur and Ravinder Narain, for the appellant.
Janardhan Sharma, for respondent No. 2
S. V. Gupte, Additional Solicitor-General, G. B. Pai and
R. H. Dehbar, for respondent No. 3.
April 1. 1964. The judgment of the Court was delivered by
GAJENDRAGADKAR, C. J.-The short question which this, appeal
by special leave raises for our decision is in relation to
the construction of s. 18 (3)(b) of the Industrial Disputes
Act, 1947 (No. 14 of 1947) (hereinafter called ’the Act’).
This question arises in this way. An industrial dispute in
regard to the payment of bonus arose between the appellant
Hochtief Gammon and the respondents, its workmen,
represented by the Rourkela Workers Union, Rourkela. This
dispute was referred for adjudication to the Industrial
Tribunal, Orissa by the Government of Orissa on the 14th
November, 1960. After the reference was received by the
Tribunal, it passed an order on the 17th November, 1960 that
notice of the reference should be issued to the parties
concerned. Purporting to give effect to this order, the
office of the Tribunal issued notices not only to the
appellant and the respondents, but also to the Deputy
General Manager of M/s Hindustan Steel Ltd. This was so
done apparently because a copy of the notification of the
Government of Orissa containing the order of references had
been served on the said Dy. General Manager. After the
notice issued by the Tribunal was received by the Dy.
General Manager of the Hindustan Steel Ltd. he appeared
before the Tribunal and urged that the Hindustan Steel Ltd.
was not concerned or interested in the dispute and should
not be added as a party to the reference.
Meanwhile, the appellant made an application to the Tribunal
on the 21st March, 1961 and contended that the interests of
M/s Hindustan Steel Ltd. and the appellant were common in
the proceedings pending before the Tribunal, and so, M/s
Hindustan Steel Ltd. should be joined as a party. In this
application, the appellant alleged that M/s Hindustan Steel
Ltd. was a necessary party, because the material documents
which may have to be proved in the proceedings were with the
said concern and, in fact, the enquiry in question would not
be complete without the said concern being joined as a
party. The Tribunal then considered the question of joining
M/s Hindustan Steel Ltd. as a party and held that it would
decide the matter later. Meanwhile, the Tribunal directed
that M/s Hindustan Steel Ltd. which had appeared in response
to the notice issued to it should remain present during the
hearing of the reference on the merits.
599
This order did not satisfy the appellant, because it wanted
a specific direction from the Tribunal to add M/s Hindustan
Steel Ltd. as a party to the reference. That is why the
appellant moved the Orissa High Court under Art. 226 of the
Constitution and prayed that the order passed by the
Tribunal refusing to deal with the matter should be set
aside and M/s Hindustan Steel Ltd. should be joined as a
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party to the reference before it. This writ petition,
however, failed, because the High Court took the view that
it was premature. The High Court observed that the
Industrial Tribunal had not yet passed a final order under
s. 18(3)(b) of the Act, and so, without expressing any
opinion on the merits of the controversy between the
parties, the High Court treated the application as
incompetent because it was premature. Against this
decision, the appellant has come to this Court by special
leave; and on its behalf, Mr. Chatterjee has contended that
the Industrial Tribunal has jurisdiction to add a party to
the proceedings before it and that on the merits, M/s
Hindustan Steel Ltd. should be added as a necessary party.
That is how the main question which arises for our decision
is to determine the scope and effect of the provisons of s.
18(3)(b) of the Act.
In dealing with this question, it is necessary to consider
the provisions of s. 18(b) in the Act as it was first
enacted, and then consider the provisions of s. 18(3)(b) as
they now stand. Under the original Act, section 18
consisted of four clauses (a), (b), (c) and (d). We are
concerned in the present appeal with clause (a) and (b).
Section 18(a) and (b) read thus: -
"A settlement arrived at in the course of
conciliation proceedings under this Act, or an
award which is declared by the appropriate
Government to be binding under sub-section (2)
of section 15 shall be binding on:
(a) all parties to the industrial dispute
(b) all other parties summoned to appear in
the proceedings as parties to the dispute,
unless the Board of Tribunal, as the case may
be, records the opinion that they were so sum-
moned without proper cause".
The first question which we have to consider is, did s.
18(b), as it then stood, postulate an implied power in the
Tribunal to add persons as parties to the proceedings who
are other than those who were parties to the industrial dis-
pute? It will be noticed that clause (a) refers to all
parties to the industrial dispute, whereas clause (b) refers
to all other parties summoned to appear. The word "other"
seems to suggest that the parties summoned to appear to whom
clause
600
(b) refers are not identical with the parties to the
industrial dispute specified by clause (a) Section 2(k) of
the Act defines an ’industrial dispute’, inter alia, as
meaning any dispute or difference between employers and
workmen; so that parties to the industrial dispute under
clause (a) would mean persons between whom the dispute has
arisen as prescribed by s. 2(k), and so, clause (b)
contemplates persons other than those who are actually and
directly involved in the dispute which is the subject-matter
of reference under section 10. Thus, s. 18(b) seems to
contemplate that persons other than parties to the
industrial dispute may be summoned before the Tribunal.
That takes us to the question as to who can summon these
parties’? Section 11(3) of the Act prescribes, inter alia,
that the Tribunal shall have the same powers as are vested
in a Civil Court under the Code of Civil Procedure, when
trying a suit in respect of the matters specified in clauses
(a) to (d); clause (a) refers to enforcing the attendance of
any person and examining him on oath; cl. (b) has reference
to the power to compel the production of documents and
material objects; cl. (c) is in respect of issuing
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commissions for the examination of witnesses; and clause (d)
is in respect of such other matters as may be prescribed.
It is thus clear ’chat the power to add a party to the
proceedings pending before a Tribunal which may be exercised
under the Code of Civil Procedure under 0.1 r. 10 is not
included in s. 11(3), and there is no other section which
confers such a power on the Tribunal Therefore, if s. 18(b)
contemplates that persons other than parties to the
industrial dispute can be summoned, there is no specific
provision conferring power on the Tribunal to summon them,
and that inevitably suggests that the power must be read as
being implicit in s. 18(b) itself.
In this connection, it is necessary to refer to s. 10 as it
then stood. Section 10(1) then consisted of three clauses
which read thus: -
"If any industrial dispute exists or is apprehended, the
appropriate Government may, by order in writings:-
(a) refer the dispute to a Board for
promoting a settlement thereof; or
(b) refer any matter appearing to be
connected with or relevant to the dispute to a
Court for inquiry; or
(c) refer the dispute to Tribunal for
adjudication".
It is significant that so far as the reference to the Tribu-
nal is concerned, s. 10(1)(c) empowered the appropriate Gov-
ernment to refer the dispute to the Tribunal, and unlike
clause (b), this clause did not take within its sweep any
matter
601
appearing to be connected with or relevant to the dispute;
so that in regard to the power to refer an industrial
dispute to the Government Tribunal for its adjudication, the
appropriate Government could make a reference of the dispute
itself and was not expressly clothed with the power to refer
any matter appearing to be connected with, or relevant to,
such a dispute. The result of these relevant provisions
clearly seems to be that if the Industrial Tribunal, while
dealing with an industrial dispute, came to the conclusion
that persons other than those mentioned as parties to the
industrial dispute were necessary for a valid determination
of the said dispute, it had the power to summon them; and if
such persons were summoned to appear in the proceedings, the
award that the Industrial Tribunal may ultimately pronounce
would be binding on them. Since in cases where persons were
added as parties to an industrial dispute were likely to
raise the question as to whether the joinder of the parties
was justified or not, s. ’18(b) required that the Tribunal
should record its opinion as to whether these persons had
been summoned without proper cause. Thus, we are inclined
to take the view that Mr. Chatterjee is right in contending
that s. 18(b) as it ,originally stood, postulates that the
Tribunal had an implied power to summon parties, other than
parties to the industrial dispute, to appear in the
proceedings before it. That naturally raises the question
about the extent of this power.
In dealing with this question, it is necessary to bear in
mind one essential fact, and that is that the Industrial
Tribunal is a Tribunal of limited jurisdiction. Its
jurisdiction is to try an industrial dispute referred to it
for its adjudication by the appropriate Government by an
order of reference passed under s. 10. It is not open to
the Tribunal to travel materially beyond the terms of
reference, for it is well-settled that the terms of
reference determine the scope of its power and jurisdiction
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from case to case. Section 10 itself has been subsequently
amended from time to time. Act 18 of 1952 made substantial
amendments in s. 10. One of these amendments was that s.
10(1)(d) now empowers the appropriate Government to refer
the dispute or any matter appearing to be connected with, or
relevant to, the dispute, whether it relates to any matter
specified in the Second Schedule, or the Third Schedule, to
a Tribunal for adjudication. In other words. under s.
10(1)(d), the appropriate Government can refer to the
Industrial Tribunal not only a specific industrial dispute,
but can also refer along with it matters appearing to be
connected with, or relevant to, the said dispute. In that
sense. the power of the appropriate Government has been
enlarged in regard to the reference of industrial disputes
to the Tribunal.
602
Section 10(4) which was also added by the same amending Act
provides, inter alia, that the jurisdiction of the Indus-
trial Tribunal would be confined to the points of dispute
specified by the order of reference, and adds that the said
jurisdiction may take within its sweep matters incidental to
the said points. In other words, where certain points of
dispute have been referred to the Industrial Tribunal for
adjudication, it may, while dealing with the said points,
deal with natters incidental thereto, and that means that
if, while dealing with such incidental matters, the Tribunal
feels that some persons who are not joined to the reference
should be brought before it, it may be able to make an order
in that behalf under s. 18(3)(b) as it now stands.
Section 10(5) has now conferred power on the appropriate
Government to add to, the reference other establishments,
groups or classes of establishments of a similar nature, if
it is satisfied that these establishments are likely to be
interested in, or affected by, such dispute. In other
words, if industrial dispute is referred to a Tribunal for
adjudication, and in area within the territorial jurisdicton
of the appropriate Government there are other establishments
which would be affected by, or interested in, such a
dispute, the appropriate Government may add them to the said
reference either at the time when the reference is initially
made, or during the pendency of the said reference
proceedings; but in every case, such additions can be made
before the award is submitted. Now, if such persons are
added to the reference, the industrial Tribunal may in
exercise of its powers under s. 18(3)(b) summon them to
appear before it.
Section 18(b) with which we began, has also been amended by
Act 36 of 1956, and it has now been renumbered. As a
result. s. 18(b) is now included in s. 18(3)(b). Section
18(3) provides, inter- alia, that an award passed by an
Industrial Tribunal which has become enforceable shall be
binding on:
(a) all parties to the industrial disputes;
(b) all other parties summoned to appear in
the proceedings as parties to the dispute,
unless the, Tribunal records the opinion that
they were so called without proper cause.
The material words in s. 18(3)(b) are the same as they were
originally included in s.18(b), and so, the implied power
which could be exercised by the Industrial Tribunal under s.
18(b) can now be exercised by it under s. 18(3)(b). If the,
Tribunal thinks that the parties who were summoned to appear
before it were so summoned without proper cause, it may
record its opinion to that effect and then the award which
it’. pronounces would not be binding on them.
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603
Reverting then to the question as to the effect of the power
which is implied in s. 18(3)(b), it is clear that this power
cannot be exercised by the Tribunal so as to enlarge
materially the scope of the reference itself, because
basically the jurisdiction of the Tribunal to deal with an
industrial dispute is -derived solely from the order of
reference passed by the appropriate Government under s.
10(1). What the Tribunal can consider in addition to the
disputes specified in the order of reference, are only
matters, incidental to the said disputes; and that naturally
suggests certain obvious limitations on the implied power of
the Tribunal to add parties to the reference before it,
purporting to exercise its implied power under s. 18(3)(b).
If it appears to the Tribunal that a party to the industrial
dispute named in the order of reference does not completely
or adequately represent the interest either on the side of
the employer, or on the side of the employee, it may direct
that other persons should be joined who would be necessary
to represent such interest. If the employer named in a
reference does not fully represent the interests of the
employer as such, other persons who are interested in the
undertaking of the employer may be joined. Similarly, if
the unions specified in the reference do not represent all
the employees of the undertaking, it may be open to the
Tribunal to add such other unions as it may deem necessary.
The test always must be, is the addition of the party
necessary to make the adjudication itself effective and
enforceable? In other words, the test well be, would the
non-joinder of the party make the arbitration proceedings
ineffective and unenforceable? It is in the light of this
test that the implied power of the Tribunal to add parties
must be held to be limited.
This question has been considered by the Madras High Court
in two reported decisions. In P. G. Brooks, Receiver
appointed by the Trustees for the mortgage debenture holders
of the Madras Electric Tramways (1904) Ltd. v. The Indus-
trial Tribunal, Madras & Ors.,(1) the Division Bench of the
said High Court has held that s. 18(b) by necessary implica-
tion gives power to the Tribunal to add parties. It can add
necessary or proper party. He need not be the employer or
the employee. In that particular case, the party added was
the Receiver and it was found that unless the Receiver was
added as a party to the reference proceedings, the adjudica-
tion itself would become ineffective. In the words used by
the judgement, the party added was not a rank outsider or a
disinterested spectator, but was a Receiver who was vitally
concerned with the proceedings before the Tribunal and whose
presence was necessary to make the ultimate award effective,
valid and enforceable.
(1) A.I.R. 1954 Mad. 369.
604
In Radhakrishna Mills Ltd. Peelamedu, Coimbatore Dt. v. The
Special Industrial Tribunal, Madras & Ors.(1) a single Judge
of the Madras High Court followed the earlier decision,
though in this case, a party that was summoned by the Tribu-
nal had been added to the reference by the State Government
under s. 10(5) of the Act.
In Anil Kumar Upadhaya v. V. P. K. Sarkar & Ors.(2),
learned single Judge of the Calcutta High Court has accepted
the same view. In that case, the Trustee of the Provident
Fund in question who had not been impleaded originally to
the reference were summoned by the Tribunal and the Court
held that in the absence of the Trustees, the award would
have become nugatory. It would be noticed that in all these
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decisions, the implied power of the Tribunal to summon ad-
ditional parties in the reference proceedings is confined
only to cases where such addition appeared to be necessary
for making the reference complete and the award effective
and enforceable. Such a power cannot be exercised to extend
the scope of the reference and to bring in matters which are
not the subject-matter of the reference and which are not
incidental to the dispute which has been referred.
That takes us to the question as to whether the appellant is
justified in contending that M/s Hindustan Steel Ltd. is a
necessary party to the present proceedings before the in-
dustrial Tribunal, and should, therefore, be added as such.
Mr. Chatterji has raised two contentions in support of his
plea that M/s Hindustan Steel Ltd. is a necessary party.
The first contention is that if it is ultimately found that
the respondent’s claim for bonus for the relevant year is
well foundecd as a result of the contract between the
appellant and M/s Hindustan Steel Ltd the liability to pay
the said bonus would rest, with the said concern and not
with the appellant. The appellant, according to
Mr.Chatterjee, is a firm constituted only for a single
venture for undertaking the execution of the work of
construction and foundation and civil engineering works at
Rourkela: it has been engaged by the said concern of M/s
Hindustan Steel Ltd. as its agent and in that behalf an
agreement has been executed between the parties. Mr.
Chatterjee referred us to some of the relevant clauses of
this agreement in support of his plea that the liability for
bonus, if established by the respondents against the
appellant, would be not the appellant’s but of M/s Hindustan
Steel Ltd. We do not propose to examine the merits of this
contention, because we are satisfied that even if Mr.
Chatterjee’s contention is well-founded by reference to the
relevant clauses of the agreement between the parties, that
cannot make M/s Hindustan Steel Ltd. a necessary party
within the meaning of s. 18(3)(b).
(1) A.I.R. 1954 Mad. 606.
(2) A.I.R. 1961 Cal. 60.
605
This contention raises an entirely different dispute between
the appellant and its alleged principal and such a dispute
would be wholly foreign to the industrial dispute which has
In been referred to the Tribunal for its adjudication.
The next contention raised by Mr. Chatterjee is that M/s
Hindustan Steel Ltd. is a necessary party because it is the,
said concern which is the employer of the respondents and
not the appellant. In either words, this contention is that
though in form the appellant engaged the workmen whom the
respondent union represents, the appellant was actingas the
agent of its principal and for adjudicating upon the
industrial dispute referred to the Tribunal by the State of
Orissa, it is necessary that the principal, viz., M/s
Hindustan Steel Ltd. ought to be added as a party. In
dealing with this argument, it is necessary to bear in mind
the fact that the appellant does not dispute the respondent
Union’s case that the workmen were employed by the
appellant. It would have been open to the State Government
to ask the Tribunal to consider who was the employer of
these workmen and in that case, the terms of reference might
have been suitably framed. Where the appropriate Government
desires that the question as to who the employer is should
be determined, it generally makes a reference in wide enough
terms and includes as parties to the reference different
persons who are alleged to be the employers. Such a course
has not been adopted in the present proceedings, and so, it
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would not be possible to hold that the question as to who is
the employer as between the appellant and M/s Hindustan
Steel Ltd. is a, question incidental to the industrial
dispute which has been referred under s. 10(1)(d) This
dispute is a substantial dispute between the appellant and
M/s Hindustan Steel Ltd. and cannot be regarded as
incidental in any sense, and so, we think that even this
ground is not sufficient to justify the contention that M/s
Hindustan Steel Ltd. is a, necessary party which can be
added and summoned under the implied powers of the Tribunal
under s. 18(3)(b).
The result is, though we accept Mr. Chatterjee’s argument
that s. 18(3)(b) postulates the existence of an implied
power in the Tribunal to add parties and summon them, in the
present case that power cannot be exercised, because having
regard to the limited nature of the implied power, M/s
Hindustan Steel Ltd. cannot be regarded as a necessary party
under the provisions of s. 18(3)(b). The appeal accordingly
fails and is dismissed with costs.
Appeal dismissal.
606