Full Judgment Text
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PETITIONER:
V. VEERARAJAN & ORS.
Vs.
RESPONDENT:
GOVERNMENT OF TAMIL NADU & ORS.
DATE OF JUDGMENT14/01/1987
BENCH:
MISRA RANGNATH
BENCH:
MISRA RANGNATH
DUTT, M.M. (J)
CITATION:
1987 AIR 695 1987 SCR (1) 997
1987 SCC (1) 479 JT 1987 (1) 141
1987 SCALE (1)42
ACT:
Industrial Disputes Act, 1947--Ss. 10 & 12(5)--State
Government-Reference of dispute for adjudication--Fit case
where reference should be made--What is.
HEADNOTE:
A large number of workmen of the respondent-company were
proceeded against by the management on certain charges.
Later most of them were taken back to employment. On failure
of conciliation in regard to 7 of the dismissed workmen,
disputes were raised under s. 11-A of the Industrial Dis-
putes Act, 1947. The Government declined to make a reference
to the Labour Court for adjudication. A Single Judge as well
as the Division Bench rejected the Writ Petition of the
workmen.
On appeal, this Court on 9th July, 1985 set aside the
judgments passed by the Single Judge and the Division Bench
and directed the State Government to reconsider the matter
without taking into account the ground that the domestic
inquiry had been conducted by the employer according to the
principles of natural justice and the punishment imposed was
not disproportionate to the gravity of the offence committed
by the dismissed workmen and come to decision within 30 days
whether it would make a reference of the industrial dispute
to the Labour Court.
The Government again declined to make a reference stat-
ing: (1) that the company manufactures and supplies certain
items to the Defence Department; (2) that there was indus-
trial unrest followed by violence and stoppage of work in
the establishment due to inter-union rivalry; (3) that the
management charge-sheeted the workmen under specific provi-
sions of the standing order; (4) that the workmen themselves
had admitted the charges against them; (5) that in view of
the proven charges and the need to preserve industrial peace
in the establishment it was not a fit case for adjudication
both on expediency and on merits.
When the appeal came up for further hearing, on behalf
of the appellants-workmen it was contended that the grounds
given in support
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of the order are totally irrelevant, immaterial and do not
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justify the refusal to refer the dispute.
On behalf of the respondents it was contended: (1 ) that
the statute authorises the State to take a prima facie view
of the matter for ascertaining whether it was a fit case
wherein exercise of jurisdiction under Section 10(1) read
with 12(5) was called for and a reference was warranted; (2)
that the State Government in declining to make a reference
has kept itself within the limit set by law; (3) that the
grounds advanced in support of refusal to make a reference
were clearly tenable and indicated that a broad and overall
view of the matter was taken by the State Government; (4)
that since the jurisdiction of this Court is not appellate
and order of the State Government is administrative in
character, no interference was warranted; and (5) that if
the grounds advanced by the State Government were neither
germane nor relevant, the matter should go back to the State
Government for fresh disposal as it is not for this Court to
direct a reference to be made.
Allowing the Appeal,
HELD: I. 1 It is open to the State Government to take
the broad features into consideration while exercising
jurisdiction under s. 10(1) of the Industrial Disputes Act,
1947. If the dispute in question raises a question of law
the appropriate Government should not purport to reach a
final conclusion on the said question of law because that
would normally lie within the jurisdiction of the Industrial
Tribunal. Similarly, on disputed questions of fact, the
appropriate Government cannot purport to reach final conclu-
sions for that again would be the province of the Industrial
Tribunal. [1003H; 1004A-B]
1.2 S. 10 permits appropriate Government to determine
whether dispute ’exists or is apprehended’ and then refer it
for adjudication on merits. The demarcated functions are (1)
reference, (2) adjudication. [1004F-G]
1.3 There may be exceptional cases in which the State
Government may, on a proper examination of the demand, come
to a conclusion that the demands are either perverse or
frivolous and do not merit a reference. Government should be
very slow to attempt an examination of the demand with a
view to decline reference and Courts will always he vigilant
whenever the Government attempts to usurp the powers of the
Tribunal for adjudication of valid disputes. To allow the
Government to do so would he to render s. 10 and s. 12(5) of
the Industrial Disputes Act nugatory. [1005A-C]
999
Bombay Union of Journalists v. State of Bombay,’ [1964]
6 SCR 22 = AIR 1964 S.C. 1617 M.P. Irrigation Karamchari
Sangh v. State of M.P., [1985] 2 SCC 103 & Ram Awtar Sharma
JUDGMENT:
upon.
2. This is a fit case where a reference should be made.
In the order of this Court on July 9, 1985 it had been
clearly stated that a direction to make a reference would
have been given but for the submission advanced on behalf of
the counsel for the respondents that the matter should go
back and the State Government should be given an opportunity
of giving other valid reasons, if any, in support of its
order. [1005G; 1006A]
Nirmal Singh v. State of Punjab & Ors., [1984] Lab IC
1312 & Sankari Cement Alai Thozhilalar Munnetra Sangam &
Anr. v. Management of India Cements Ltd., [1983] 1 L.L.J.
460, referred to.
3. The matter should go back to the State Government for
fresh disposal and the State Government should make its
order of reference within one month and the Labour Court to
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which the dispute may be referred shall dispose of the
reference within four months from the date of the receipt of
the reference. [1006C-D]
&
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3 144 of
1985.
From the Judgment and Order dated 20.11. 1984 of the
Madras High Court in Writ Appeal No. 178 of 1982
M.K. Ramamurthy, Ambrish Kumar and Rajaraman for the
Appellants.
K. Parasaran, Attorney General, G.L. Sanghi, Dr. Y.S.
Chitale, A.V. Rangam, T.V. Ratnam and A.T.M. Samanth for the
Respondents.
The Judgment of the Court was delivered by
RANGANATH MISRA, J-154 workmen were proceeded against
by the management of Lucas-T.V.S. Limited, Madras, for
wilful disobedience of lawful orders of superiors, acts
subversive of good and proper behaviour within the estab-
lishment after authorised hours of work without permission
and shouting of slogans within the establishment amounting
to misconduct under Standing Orders. Later
1000
134of them were taken back to employment. In regard to 7 of
the dismissed workmen conciliation was undertaken and upon
its failure, disputes raised under section 11-A of the
Industrial Disputes Act were asked to be referred to the
Labour Court for adjudication. When Government declined to
make a reference, the High Court was moved. The learned
Single Judge rejected the writ petition and the Division
Bench upheld such rejection. This appeal by special leave is
against the order of the Division Bench of the High Court.
This Court on July 9, 1985 after hearing counsel for
parties came to the conclusion.
"Now it is clear from the order made by the
State Government on 11th October, 1979 which
order has been reaffirmed by the State Govt.
by its order dated 3rd May. 1981, that the
only ground on which the State Government
refused to make a reference, of the dispute to
the labour court was that, in its opinion the
domestic inquiry had been conducted by the 3rd
respondent (employer) according to the princi-
ples of natural justice and the punishment
imposed by the 3rd respondent on the appel-
lants was not disproportionate to the gravity
of the offence committed by them. This is also
borne out from paragraph 6 of the counter-
affidavit filed on behalf of the 1st respond-
ent ........ where it has been clearly stated
that the Labour Department of the Government
of Tamil Nadu opined that the management had
conducted a fair and proper inquiry and also
taken in consideration the gravity of the
offence before dismissing the appellants and
the punishment imposed on the appellants was
not disproportionate having regard to the
nature of the charges proved against them.
This ground on which the State Government has
acted in refusing to refer the dispute to the
labour court is clearly an irrelevant ground.
It is now settled law as a result of the
decisions of this Court in Workmen of Syndi
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cate Bank, Madras v. Government of India & Anr., [1985] 1
L.L.J. 93 and Ramawatar Sharma and Ors., v. State of Haryana
& Anr., [1985] 1 Scale 713 that the appropriate Government
cannot decline to make reference of an industrial dispute
arising out of the termination of the service of a workman
on the ground that the domestic inquiry resulting in the
termination of the services of the workman was in the opin-
ion of the State Government in conformity with the
1001
principles of natural justice and that the punishment im-
posed on the workman was not disproportionate to the offence
with which he was charged ...... "
"We would therefore have ordinarily allowed the
appeal and set aside the judgments of the learned Single
Judge and the Division Bench of the High Court and directed
the State Government to make a reference of the industrial
dispute between the appellants and the 3rd respondent. But
Dr. Chitale appearing on behalf of the 3rd respondent urged
that there might be some other relevant grounds which may
still be required to be considered by the State Government
before deciding whether to make a reference or not and the
case should therefore go back to the State Government to
reconsider the question in the. same manner in which this
Court directed the State Government to reconsider in the
Workmen of Syndicate Bank case (supra). But this is a case
in which more than 7 years have elapsed since the appellants
were dismissed from service and they are still nowhere near
a reference. We would therefore set aside the judgments
passed by the learned Single Judge and the Division Bench
and direct the State government to reconsider the matter
without taking into account the aforesaid irrelevant ground
and come to a decision within a period of 30 days from the
date of receipt of the copy of this order whether it would
make a reference of the industrial dispute to the Labour
Court. We would keep the appeal pending before us and as
soon as the decision is reached by the State Government,
which of course should be within a period of 30 days from
the date of receipt of the copy of this order by the State
Government, intimation of such decision shall be given to
the Court so that the Court can then consider whether the
decision reached by the State Government is legally justi-
fied or not. We are informed that V. Kondiah the 2nd appel-
lant has already settled the dispute with the 3rd respondent
and therefore the question of making a reference of the
dispute will have to be considered by the State Government
only in regard to the remaining 6 appellants."
After the matter went back the State Government has made
the following order:
1002
"Accordingly the Government have re-examined the conCilia-
tion report first read above and all other connected rele-
vant records and consider that it is not necessary to refer
the cases of Thiruvalargal K. Arinathan, A.C. Kabaleswaran,
V. Srinivasan, V. Veerarajan, P. Subramanian and H. Indira-
rajan for adjudication both on merits and on expediency for
the following reasons:
(1) Lucas-T.V.S. Limited are suppliers of some
items to the Defence.
(2) There was industrial unrest followed by vio-
lence and stoppage of work in this establishment in 1977 due
to inter union rivalry.
Again there was industrial unrest due to inter
union rivalry in this establishment in 1978 employing 2400
workmen. To avoid recurrence of such incidence and stoppage
of work again in 1978 the Management took disciplinary
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action against 154 workmen. The Management took back 134
workmen out of 154. The seven workmen are among those who
were dismissed considering the gravity of the offence.
(3) The Management charge-sheeted these seven
workmen under the specific provisions of the standing orders
for misconduct such as wilful disobedience of lawful orders
of the superiors, acts of subversive of good and proper
behaviour within the establishment, being within the estab-
lishment after authorised hours of work without permission
shouting slogans within the establishment etc.-
(4) All the workmen admitted the charges framed
against them during the enquiries and hence the Managment
dismissed them from service based on these enquiries and
taking into account their past services.
(5) Since the workmen themselves have admitted the
charges against them. The Government consider that the
charges have been proved.
(6) The Government also considered the nature of
proven charges and the quantum of punishment imposed
1003
on them with a view to decide the question whether the
reference should be made or not.
(7) Considering the proven charges and the need to
preserve industrial peace in the establishment the Govern-
ment consider that this is not a fit case for adjudication
both on expediency and on merits.
No action is considered necessary in respect of the
case of Thiru A. Kondaiah who has settled his accounts
finally with Management."
With reference to the order made by the State Government
the appeal has been further heard. Mr. Ramamurthi for the
appellants, learned Attorney General for the Government of
Tamil Nadu and Dr. Chitale for the Management have advanced
their respective contentions.
The seven grounds given in support of the order refusing
to make a reference have been challenged by Mr. Ramamurthi
as irrelevant. The facts that the Company manufactures and
supplies certain items to the Defence Department of the
Union of India and there was industrial unrest followed by
violence and stoppage of work, according to learned counsel,
are not germane and relevant for the purpose of deciding as
to whether the dispute raised by the six workmen should be
referred to industrial adjudication. So far as the third
ground is concerned, according to Mr. Ramamurthi, it is in
effect repetition of the earlier grounds which this Court
found to be irrelevant. The language has been changed and
the grounds have been made descriptive and detailed. Coming
to the 4th ground it is contended that all the 154 delin-
quent workmen had accepted their guilt when negotiation for
a settlement was undertaken. There was no justification for
the employer to discriminate between 134 workmen who were
restored to service and the remaining 20 including the six
appellants to whom re-employment was not given. Mr. Rama-
murthi states that ground No. 5 is totally irrelevant.
Similarly, grounds nos. 6 and 7 are not at all material and
do not justify the refusal to refer the dispute. In support
of the appeal the learned counsel has further contended that
in a series of decisions beginning with the case of Bombay
Union of Journalists v. State of Bombay, [1964] 6 SCR 22=AIR
1964 SC 1617 this Court has clearly laid down that it is
open to the State Government to take the broad features into
consideration while exercising jurisdiction under section
10(1) of the Act. If the dispute in question raises a ques-
tion of
1004
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law the appropriate Government should not purport to reach a
final conclusion on the said question of law because that
would normally lie within the jurisdiction of the Industrial
Tribunal. Similarly, on disputed questions of fact, the
appropriate Government cannot purport to reach final conclu-
sions for that again would be the province of the Industrial
Tribunal. Gajendragadkar, J. as he then was speaking in that
case indicated:
" .... it would not be possible to accept the plea that
the appropriate Government is precluded from considering
even prima facie the merits of the dispute when it decides
the question as to whether its power to make a reference
should be exercised under section 10(1) read with the sec-
tion 12(5), or not. If the claim made is patently frivolous,
or is clearly belated, the appropriate Government may refuse
to make a reference. Likewise, if the impact of the claim on
the general relations between the employer and the employees
in the region is likely to be adverse, the appropriate
Government may take that into account in deciding whether a
reference should be made or not. It must, therefore, be held
that a prima facie examination of the merits cannot be said
to be foreign to the enquiry which the appropriate Govern-
ment is entitled to make in dealing with a dispute under
section 10(1) ......
Mr. Ramamurthi also placed reliance on the decision in the
case of M.P. Irrigation Karamchari Sangh v. State of M.P.,
[1985] 2 SCC 103 where it has been said:
"There, while conceding a very limited jurisdiction to the
State Government to examine patent frivolousness of the
demands, it is to be understood as a rule, that adjudication
of demands made by workmen should be left to the Tribunal
to decide. Section 10 permits appropriate Government to
determine whether dispute ’exists or is apprehended’ and
then refer it for adjudication on merits. The demarcated
functions are (1) reference, (2) adjudication. When a refer-
ence is rejected on the specious plea that the Government
cannot bear the additional burden, it constitutes adjudica-
tion and thereby usurpation of the power of a quasi-judicial
Tribunal by an administrative authority namely the appropri-
ate Government ..... What the State Government has done in
this case is not a prima
1005
facie examination of the merits of the question involved."
"There may be exceptional cases in which the State
Government may, on a proper examination of the demand, come
to a conclusion that the demands are either perverse or
frivolous and do not merit a reference. Government should be
very slow to attempt an examination of the demand with a
view to decline reference and courts will always be vigilant
whenever the Government attempts to usurp the powers of the
Tribunal for adjudication of valid disputes. To allow the
Government to do so would be to render Section 10 and Sec-
tion 12(5) of the Industrial Disputes Act nugatory."
In the case of Ram Awtar Sharma & Ors. v. State of
Haryana & Anr., [1985] 3 SCC 189 the ratio in the Bombay
Union of Journalists’ case has been reiterated.
Learned Attorney General for the State of Tamil Nadu
submitted that the statute authorises the State to take a
prima facie view of the matter for the purpose of ascertain-
ing whether it was a fit case wherein exercise of jurisdic-
tion under section 10(1) read with section 12(5) of the Act
was called for and a reference was warranted. The State
Government in declining to make a reference in the present
case has kept itself within the limit set by law as deline-
ated by this Court.
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Dr. Chitale contended that the grounds advanced in
support or refusal to make a reference were clearly tenable
and indicated that a broad and overall view of the matter
was taken by the State Government. Since the jurisdiction of
this Court is not appellate and the order of the State
Government is administrative in character, no interference
was warranted. Dr. Chitale further added that if we took
view that the grounds advanced by the State Government were
neither germane nor relevant, the matter should go back to
the State Government for afresh disposal as it is not for
this Court to direct a reference to be made.
Having heard learned counsel for the parties we are of
the view that this is a fit case where a reference should be
made. In the order of this Court in the present case on July
9, 1985 it has been clearly stated that a direction to make
a reference would have been given but for the submission
advanced by Dr. Chitale that the matter should go back and
the State Government should be given an opportunity of
giving
1006
other valid reasons, if any, in support of its order. In the
case of Nirmal Singh v. State of Punjab & Ors., [1984] Lab
IC 13 12 this Court gave a direction that reference be made
forthwith. Similarly, in the case of Sankari Cement Alai
Thozhilalar Munnetra Sangam & Anr. v. Management of India
Cements Ltd., [1983] 1 L.L.J. 460 this court gave a direc-
tion for making of a reference.
The criticism advanced by Mr. Ramamurthi in regard to
the reasons given by the State Government seem to be well-
founded and we are of the opinion that the respondent-State
Government should have a direction to refer the dispute for
adjudication by the labour court. The State Government’s
order should be made within one month from to-day and the
Labour Court to which the dispute may be referred shall have
a direction to dispose of the reference within four months
hence from the date of receipt of the reference. The appel-
lants shall be entitled to costs. Hearing fee is assessed at
Rs. 3,000 and is recoverable from Respondent No. 1.
A.P.J. Appeal al-
lowed.
1007