MAHABIR PROSAD CHOUDHARY vs. M/S OCTAVIUS TEA AND INDUSTRIES LTD. AND ANR.

1 REPORTABLE    THE IN     SUPREME     COURT     OF    INDIA   CIVIL   APPELLATE     JURISDICTION   CIVIL   APPEAL     NO. 8320     Of    2011  SRI MAHABIR PROSAD CHOUDHARY    ...APPELLANT(S)  VERSUS M/S. OCTAVIUS TEA AND  INDUSTRIES LTD. AND ANR.    ...RESPONDENT(S)   J  U  D  G  M  E  N  T   ASHOK   BHUSHAN,J. This   appeal   has   been   filed   against   the   Division   Bench judgment dated 23.12.2009 of Calcutta High Court in F.M.A. No. 1187 of 2009 by which the appeal filed by appellant has been dismissed.   2. The issue involved  in this  appeal lies  in a very  narrow compass.  The necessary facts of the case to be noticed for deciding the issue are:­ Signature Not Verified Digitally signed by ASHWANI KUMAR Date: 2019.02.28 12:50:06 IST Reason: 2.1 The   appellant   was   working   as   Accountant   in   the respondent   company   since   1986.     There   had   been change   of   management   in   the   year   2004   in   the 2 company.     The   appellant   was   not   allowed   to   work w.e.f.   02.05.2005.     The   State   of   West   Bengal referred the industrial dispute between the company and the appellant to the Fifth Industrial Tribunal. The Tribunal framed the issue as to whether refusal of   employment   to   Shri   Mahabir   Prosad   Choudhary   by the management w.e.f. 02.05.2005 is justified? 2.2 After   receiving   the   reference,   the   Industrial Tribunal   on   27.08.2007   issued   summons   upon   the parties   concerned   directing   them   to   appear   on 19.09.2007.   The workman appeared on 19.09.2007 but no one appeared from the company, since the summons were   received   back   with   the   remarks   “left”. 11.10.2007   was   again   fixed   by   the   Tribunal.     On 11.10.2007, Tribunal noted that summons sent through Process Server has been served upon the company. The advocate for the workman appeared and filed W/S. The W/S was filed without serving the copy of W/S to the company.     On   05.11.2007,   none   of   the   parties   had appeared   and   27.11.2007   was   fixed   for   W/S   by   the company.   On 29.11.2007, no one appeared on behalf of   the   company,   the   Tribunal   fixed   for   ex­parte hearing.  26.12.2007 was fixed for documents of the workman.  On 26.12.2007, documents were filed, which 3 were   kept   on   record   and   29.01.2008   was   fixed   for ex­parte hearing.  The Tribunal again on the request of  the  workman  deferred the case,  which was fixed for ex­parte hearing for 26.02.2008.  On 26.02.2008, none appeared for the company, workman was heard and the   award   was   pronounced.     The   Hon’ble   Tribunal disposed of the award ex­parte by allowing the claim of  reinstatement  with  full  back wages.    The award was also published on 27.03.2008.   2.3 The   company   filed   an   application   on   02.05.2008   to recall  the  ex­parte award.    The company stated  in its   application   that   as   per   the   agreement   dated 10.06.2004   with   its   erstwhile   management,   the   new management   has   no   responsibility   in   respect   of senior   executives   and   managerial   staff   of   the   old management   including   the   appellant.     The   company states   that   ex­parte   award   was   received   on 22.04.2008   and   thereafter   an   application   has   been filed   for   recall   of   the   ex­parte   award   dated 26.02.2008.   The Tribunal heard the parties on the application   filed   by   the   company.     The   tribunal although   returned   the   finding   that   the   award   was passed in violation of principles of natural justice 4 and no notice under Rule 20B(5) and Rule 21 of the West   Bengal   Industrial   Disputes   Rules,   1958 (hereinafter   referred   to   as   “1958   Rules”)   were served on the company.  The Tribunal, however, took the view that application being filed by the company after   30   days   of   publication   of   the   award,   the Tribunal   has   become   functus   officio,   hence   the application is rejected.   2.4 After rejection of application, the company filed a writ petition in the Calcutta High Court.   Learned Single   Judge   vide   its   judgment   and   order   dated 11.02.2009  allowed  the  writ petition  setting  aside the   award   and   the   order   dated   30.09.2008   of   the Industrial Tribunal and the Tribunal was directed to reconsider   the   issue   between   the   parties   as expeditiously   as   possible   in   accordance   with   law upon   affording   them   opportunity   of   being   heard. Against   the   judgment   of   learned   Single   Judge,   the appellant filed an appeal before the Division Bench, which has been dismissed by the impugned judgment of the Calcutta High Court.               5 3. Shri Manoj Swarup, learned counsel for the appellant in support   of   the   appeal   contends   that   notice   issued   by   the Industrial   Tribunal   in   Form   D2   was   served   on   the   company, which has also been recorded by the Industrial Tribunal, there was   no   cause   for   non­appearance   of   the   company   before   the Tribunal.   The   Tribunal   rightly   proceeded   ex­parte   due   to non­appearance   of   the   company.     He   submits   that   the application for recall of the ex­parte award was filed after 30 days from publication of award, the Tribunal having become functus officio,  the Tribunal has rightly taken the view that application   for   recall   cannot   be   entertained.     He   further submits   that   the   view   of   the   High   Court   that   there   was violation   of   Rule   20B(5)   and   Rule   21   of   1958   Rules   is erroneous.     He submits that Rule 20B(5) contemplates that Tribunal, in event, if the W/S had been filed, the same shall be made available to the party concerned or its authorised representative   in   the   office   of   Industrial   Tribunal/Labour Court.  He submits that Rule 20B(5) does not contemplate that any notice has to be issued to the other party for receiving the W/S.  He submits that there is no non­compliance of Rule 20B(5).  He submits that High Court committed error in taking the view that notice was required to be served under Rule 21 to the company before hearing the case ex­parte.  No one has 6 appeared on behalf of the respondent. 4. We have considered the submissions of the learned counsel for the appellant and have perused the records. 5. Before   the   Division   Bench   of   the   Calcutta   High   Court, main submission, which was pressed by the appellant was that application filed by the company for recall of the ex­parte order was after 30 days of publication, hence, could not have been entertained.   The Division Bench of the High court has elaborately   dealt   with   the   said   issue   and   repelled   the contention.  There is no dispute regarding dates and events, which took place in the present case.   The date of ex­parte award is 26.02.2008, the publication of the award was made on 27.03.2008 and the case of the company was that it came to know   about   the   award   on   22.04.2008.   The   date   of   filing   of application for recall of ex­parte award is 02.05.2008, the application was clearly beyond 30 days from publication of the award. 6. Before we proceed to consider the submissions raised by learned counsel for the appellant, it is relevant to notice certain Rules of 1958 Rules.  Rule 20B deals with Statement of case or written statement.  Rule 20B is as follows:­

7

(3)   Every   statement   of   case   and   every   written statement shall be signed and verified in the manner prescribed by rule 69 or rule 70, as the case may be.

8 7. Rule 21, which empowers the Tribunal to proceed ex­parte is as follows:­ “ 21.   Board,   Court,   Labour   Court,   Tribunal,   or Arbitrator   may   proceed   ex­parte.  ­   If   without sufficient   cause   being   shown,   any   party   to   a proceeding   before   a   Board,   Court,   Labour   Court, Tribunal   or   Arbitrator   fails   to   attend   or   to   be represented, the Board, Court, Labour Court, Tribunal or Arbitrator may proceed as if such party had duly attended or had been represented. 8. Rule 27 deals with the correction of errors and review of an award, which is to the following effect:­

9 the case may be.

9. This Court in  Grindlays Bank Ltd. Vs. Central Government Industrial   Tribunal   and   Others,   (1980)   Supp.   SCC   420 ,   had occasion to consider Rule 22 of Industrial Disputes (Central) Rules,   1957   as   well   as   Industrial   Disputes   (Bombay)   Rules, 1957.  Rule 22 of Industrial Disputes (Bombay) Rules, are pari materia with Rule 21 of the West Bengal Industrial Disputes Rules, 1958.   This Court in the case of  Grindlays Bank Ltd. has held that Rule 22 and Rule 24B were sufficiently (supra)  the source of power for the Industrial Courts to recall the ex­parte award.  Following was laid down in Paragraph 11:­  “  The language of Rule 22 unequivocally makes the 11. jurisdiction of the Tribunal to render an ex parte award   conditional   upon   the   fulfilment   of   its requirements. If there is no sufficient cause for the absence   of   a   party,   the   Tribunal   undoubtedly   has jurisdiction to proceed ex parte. But if there was sufficient cause shown which prevented a party from appearing,   then   under   the   terms   of   Rule   22,   the Tribunal will have had no jurisdiction to proceed and consequently, it must necessarily have power to set aside the ex parte award. In other words, there is power to proceed ex parte, but such power is subject to the fulfilment of the condition laid down in Rule 22.   The   power   to   proceed   ex   parte   under   Rule   22 carries with it the power to enquire whether or not there was sufficient cause for the absence of a party at the hearing.”             10. The submission which was pressed before the High Court in 10 the present case that application having been filed to recall after expiry of 30 days from publication of the award as per the judgment of this Court in  Grindlays Bank Ltd. (supra) , the Tribunal   has   become   functus   officio   and   could   not   have entertained   the   application.   This   Court   had   occasion   to consider this very aspect in   Radhakrishna Mani Tripathi Vs. L.H. Patel and Another, (2009) 2 SCC 81.    This Court noticed the observation made by this Court in the case of   Grindlays Bank Ltd. (supra)   in Paragraph No.14 as well as judgment of this Court in   Anil Sood Vs. Presiding Officer, Labour Court II, (2001) 10 SCC 534   in Paragraph Nos. 16, 17 and 18, this Court laid down following:­  In  Grindlays Bank  this Court held that Rules 22 “14. and 24( b ) were sufficiently the source of power for the Industrial Courts to recall an ex parte award. It was   pointed   out   that   in   terms   of   Rule   22   the Industrial   Courts   could   proceed   ex   parte   in   the matter only in case a party to the proceeding failed to   attend   or   be   represented   without   showing sufficient   cause.   The   Court   held   that   power   to proceed ex parte under Rule 22 carried with it the power to inquire whether or not there was sufficient cause for the absence of the party at the hearing and in case the party was able to show sufficient cause for   its   non­appearance   on   the   date   the   court   had proceeded ex parte against it, to recall the award. ( Vide  para 11 of the decision.) 16.   Coming   now   to   the   submission   based   on   Section 17­A of the Act the Court in para 14 of the decision held and observed as follows: ( Grindlays Bank case , SCC pp. 425­26) “ 14 .   The   contention   that   the   Tribunal   had 11 become  functus officio  and, therefore, had no jurisdiction to set aside the ex parte award and   that   the   Central   Government   alone   could set   it   aside,   does   not   commend   to   us. Sub­section   (3)   of   Section   20   of   the   Act provides   that   the   proceedings   before   the Tribunal would be deemed to continue till the date  on  which  the  award  becomes  enforceable under Section 17­A. Under Section 17­A of the Act,   an   award   becomes   enforceable   on   the expiry   of   30   days   from   the   date   of   its publication under Section 17. The proceedings with regard to a reference under Section 10 of the Act are, therefore, not deemed to be concluded   until   the   expiry   of   30   days   from the publication of the award. Till then the Tribunal   retains   jurisdiction   over   the dispute  referred   to  it  for   adjudication  and up to that date it has the power to entertain an   application   in   connection   with   such dispute. That stage is not reached till the award becomes enforceable under Section 17­A . In the instant case, the Tribunal made the ex parte   award   on   9­12­1976.   That   award   was published   by   the   Central   Government   in   the Gazette   of   India   dated   25­12­1976.   The application   for   setting   aside   the   ex   parte award   was   filed   by   Respondent   3,   acting   on behalf   of   Respondents   5   to   17   on   19­1­1977 i.e.   before   the   expiry   of   30   days   of   its publication   and   was,   therefore,   rightly entertained   by   the   Tribunal.   It   had jurisdiction to entertain it and decide it on merits.” (emphasis added) From   the   above   quotation   it   would   appear   that   in Grindlays   Bank   the   recall   application   was   filed within thirty days from the date of publication of the   award   and   hence,   the   objection   raised   on   the basis of Section 17­A did not arise in this case. In Grindlays   Bank   this   Court   did   not   say   that   the Industrial   Courts   would   have   no   jurisdiction   to entertain an application for setting aside an award made   after   thirty   days   of   its   publication. 12 Nevertheless, on the basis of the passage marked in italics   in   the   above   quotation   Ms   Issar   strongly contended   that   that   is   the   true   import   of   the judgment. 17.   We  are  unable  to accept. The position  is made clear in the later decision in   Anil Sood   v.   Labour Court . In   Anil  Sood   interestingly  the Labour Court had rejected the recall application on the very same ground that after making the award it became  functus officio  in the matter. The order of the Labour Court was   challenged   before   the   High   Court   but   the   High Court also took the same view. In appeal this Court noted that the award was made on 11­9­1995 and the application for its recall  was filed on 6­11­1995. The   Court   referred   to   the   earlier   decision   in Grindlays Bank  and the provisions of sub­sections (1) and (3) of Section 11 of the Act and in paras 6, 7 and 8 of the decision observed and held as follows: ( Anil Sood case , SCC p. 536) “ 6 .   The   aspect   that   the   party   against   whom award is to be made due opportunity to defend has to be given is a matter of procedure and not that of power in the sense in which the language   is   adopted   in   Section   11.   When matters are referred to the tribunal or court they have to be decided objectively and the tribunals/courts   have   to   exercise   their discretion   in   a   judicial   manner   without arbitrariness   by   following   the   general principles   of   law   and   rules   of   natural justice. 7 . The power to proceed ex parte is available under Rule 22 of the Central Rules which also includes the power to inquire whether or not there was sufficient cause for the absence of a   party   at   the   hearing,   and   if   there   is sufficient cause shown which prevented a party from appearing, then if the party is visited with   an   award   without   a   notice   which   is   a nullity and therefore the Tribunal will have no jurisdiction to proceed and consequently, it must necessarily have power to set aside 13 the ex parte award. 8 . If this be the position in law, both the High Court and the Tribunal (sic Labour Court) fell into an error in stating that the Labour Court had become  functus officio  after making the award though ex parte. We set aside the order made and the award passed by the Labour Court and affirmed by the High Court in this regard, in view of the fact that the learned counsel   for   the   respondent   conceded   that application filed by the appellant be allowed, set aside the ex parte award and restore the reference.” 18.  In light of the decision in  Anil Sood  we find no substance   in   the   appellant’s   submission   based   on Section 17­A of the Act. There being no substance in the first limb of the submission there is no question of   any   conflict   between   Rule   26(2)   of   the   Bombay Rules and Section 17­A of the Act.”      11. This Court in   Radhakrishna Mani Tripathi ’s case   (supra) has clearly held that the case of  Grindlays Bank Ltd. (supra) did   not   say   that   the   Industrial   Courts   would   have   no jurisdiction to entertain an application for setting aside an award made after thirty days of its publication.  This Court’s judgment   in   Radhakrishna   Mani   Tripathi   (supra)   is   clearly applicable in the present case.  Furthermore, in the present case,   the   Tribunal,   which   rejected   the   application   of   the company to recall the ex­parte award had itself returned the finding   that   there   was   violation   of   principles   of   natural justice since a copy of W/S was not sent to the company.  The 14 High Court after considering the submission of the parties had made following observations:­ “On  a perusal of  the  order  dated  30.09.2008  it  is difficult   for   this   Court   to   accept   the   contention raised on behalf of the workman.  It appears from the said   order   that   the   Tribunal   had   accepted   the position that notice under Rule 21 of the said Rules had not been served upon the company before placing the case for ex­parte hearing.  It has also accepted that Written Statement filed the workman had not been served   upon   them   in   accordance   with   provisions contained in Rules 20B(5) of the said Rules.  On the face of such finding recorded by the Tribunal, it is absolutely   clear   that   proceedings   were   conducted before it, leading to the impugned award, in clear violation   of   principles   of   natural   as   well   as mandatory   provisions   of   law.     The   award   passed   on 26.2.2008   is   liable   to   be   set   aside   only   on   this ground.”  12. Shri Manoj Swarup, learned counsel for the appellant has strenuously contended that present is not a case of any breach of Rule 20B(5) as held by the High Court.  The relevant order of the Industrial Tribunal has been brought on the record by the appellant, i.e., of 11.10.2007, where workman had appeared and filed Written Statement.  It has been noted in the order that copy of the W/S cannot be served upon the another party as none appeared on behalf of the company.   Sub­rule (5) of Rule 20B, which is relevant for present case is reproduced for ready reference:­

XXXXXXXXXXXXXXXXXXXXXXXX 15 (5) A copy of the statement of case or the written statement shall be served on the first party or the second party, as the case may be, by the Industrial Tribunal/Labour Court within seven days from the date on   which   copies   of   the   statement   of   case   or   the written statement, as the case may be, are filed by making   it   over   to   the   party   concerned   or   to   its authorised   representative   in   the   Office   of   the Industrial Tribunal/Labour Court on a date and time fixed   for   the   purpose   and   intimated   to   the   party concerned   by   the   Industrial   Tribunal/Labour   Court. 13. A perusal of sub­rule(5) of Rule 20B indicates that the copy of the statement of the case or the W/S is to be served on the first party or the second party, as the case may be,  by the Industrial Tribunal/Labour Court within seven days from the   date   on   which   copies   of   the   statement   of   case   or   the written statement, as the case may be, are filed, by making it over   to   the   party   concerned   or   to   its   authorised representative in the Office of the Industrial Tribunal/Labour Court on a date and time fixed for the purpose and intimated to   the   party   concerned   by   the   Industrial   Tribunal/Labour Court.  The duty, thus, has been cast on the Tribunal to serve a copy of W/S or statement of case on either side.  The use of word “shall be served” in sub­clause (5) of Rule 20B has to be given some meaning and purpose. The provision obviously cast a duty   on   Industrial   Tribunal   and   the   Court   to   ensure   that service should be completed within seven days. Another aspect, which is decipherable from the Rule is that Tribunal has to 16

making it available to the party concerned or its authorised representative in the office of the Industrial Tribunal/Labour

of the sub­rule (5) used the expression “on a date and time fixed for the purpose and intimated to the party concerned by the Industrial Tribunal/Labour Court”.   The above expression contains   two   requirements,   firstly,   the   Industrial Tribunal/Labour   Court   has   to   fix   a   date   for   service   of statement of case of W/S within 7 days, specially, fixed date for the purpose and secondly date and time fixed for purpose has   to   be   intimated   to   the   party   concerned.     Although sub­rule(5)   does   not   contemplate   issuing   any   second   notice after receipt of the statement of a case or a W/S, i.e. date and time is required to be fixed for the purpose of statement of case and a date and time, which is also required to be intimated   to   the   party   concerned   for   the   purpose.     In   the facts of present case, it has to be held that the Tribunal was required   to   intimate   date   and   time   for   receiving   of   the written statement by the company.  Neither the order sheet of Tribunal indicate that any date was fixed for such service of W/S nor any intimation was sent to the company.  Thus, there was a clear breach of sub­rule(5) of Rule 20B, no error has 17 been   committed   by   High   Court   in   taking   the   view   that   Rule 20B(5) has been violated, resulting in violation of principles of natural justice.  

proceed   when   any   party   to   a   proceeding   fails   to   attend. Learned counsel for the appellant is right in his submission that the plain language of Rule 21 does not indicate that it is   necessary   for   Tribunal   to   issue   any   notice   to   a   party before proceeding ex­parte.   However, the expression used in Rule 21 is “may proceed”.  Thus, on non­appearance on one day does   not   oblige   the   Tribunal   to   proceed   ex­parte.     The Tribunal   or   arbitrator   can   exercise   his   discretion   and   may decide to send a notice before proceeding ex­parte in facts of each   case,   which   may   be   required   in   facts   of   a   particular case.   But   even   otherwise   accepting,   the   submission   of   the learned   counsel   for   the   appellant   that   no   mandatory   notice under Rule 21 was required to be issued by the Tribunal to the company, there being violation of Rule 20B(5), the High Court committed   no   error   in   setting   aside   the   order   of   the Tribunal’s ex­parte award by directing the Tribunal to proceed afresh.

18 appellant has already attained the age of superannuation in July, 2018.

error in the judgment of the High Court.   The appeal being devoid of any merit is dismissed.   Parties shall bear their own costs.  ..........................J.          ( ASHOK BHUSHAN ) ..........................J.       ( INDU MALHOTRA) NEW DELHI, December 04, 2018.