Full Judgment Text
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PETITIONER:
CHHOTOBHAI JETHABHAI PATEL & CO.
Vs.
RESPONDENT:
THE INDUSTRIAL COURT, MAHARASHTRA NAGPUR BENCH, NAGPUR &
DATE OF JUDGMENT09/03/1972
BENCH:
MITTER, G.K.
BENCH:
MITTER, G.K.
VAIDYIALINGAM, C.A.
DUA, I.D.
CITATION:
1972 AIR 1268 1972 SCR (3) 731
1972 SCC (2) 46
CITATOR INFO :
R 1973 SC 883 (16)
ACT:
Bombay Industrial Relations Act, 1948--ss. 78(1) D,
42(4)--Compliance with s. 42(4) if condition precedent for
invoking jurisdiction of Labour Court under s. 78(1) D.
HEADNOTE:
Against the order of the appellant company dismissing him,
an employer filed an application before the Labour Court
under section 78 of the Bombay Industrial Relations Act,
1946. The Labour Court set aside the order. The Industrial
Court and the High Court confirmed the order of the Labour
Court rejecting the appellant’s contention that the order of
the Labour Court was liable to be set aside on the ground
that the employee did not make an application under s. 42(4)
in Chapter VIII of the Act’ which was a condition precedent
to approaching the Labour Court. On the question whether
the Labour Court could exercise jurisdiction under s. 78(1)
D of the Act in a case where the employee of an industry
governed by the Act had not complied with the provisions of
sub-section (4) of s. 42 of the Act read with the proviso to
the sub-section,
HELD:Allowing the appeal.
(i) The scheme of Chapter VIII of the Act is that in regard
to any "Change" in an industrial matter there must be
compliance with the provisions of that chapter. There is
nothing in the Act which warrants the conclusion that the
legislature by inserting paragraph D in s. 78(i) intended to
chalk out a wholly different course of action to that
prescribed in Chapter VIII dealing with changes. The
,scheme of s. 78 (1) is that Labour Court is to have power
to decide all the disputes covered by paragraph A. In other
words, efforts must first be made by the employer intending
to effect any change in respect of matters covered by s.
42(1), or an employee desiring a change in respect of any
order passed by the employer under standing order which
would of necessity include an order of dismissal, to see
whether it was possible to come to any agreement and an
application to the Labour Court could only be resorted to
after efforts had been made to settle the dispute and no
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agreement had been arrived at. [739C-G]
(ii) A person who is dismissed would, be an employee within
the meaning of s. 3(13) of the Act and there is no valid
reason for differentiating the case of a dismissed employee
from one who complains of some other change. [739H]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 12 of 1968.
732
Appeal from the judgment and order dated April 12, 1967 of
the Bombay High Court, Nagpur Bench in Special Civil
Application No. 812 of 1966.
M. N. Phadke and Mohinder Narain, for the appellant.
The Judgment of the Court was delivered by
Mitter, J. In this appeal by certificate the question
involved is, whether the Labour Court at Nagpur could
exercise jurisdiction under s. 78(1)D of the Bombay
Industrial Relations Act in a case where the employee of an
industry governed by the Act had not complied with the
provisions of s. 42(4) of the said statute read with the
proviso to the said sub-section. The Bombay High Court has
held that it was not necessary for an employee first to
approach the employer or to follow the procedure laid down
in s. 42(4) including the proviso before he could apply to
the Labour Court for relief under S. 7 8 (1) D.
The facts are as follows. One Nathu, respondent No. 3
herein, was employed as a munshi in the appellant’s Bidi
factor at Bhandara. The appellant had framed a charge sheet
against him in respect of certain acts of misconduct, gross
negligence of duty, insubordination etc. on May 13, 1965.
An enquiry in respect thereof was held on May 15th after
receipt of written statement from Nathu. Holding that the
charges leveled against him were proved, the employer
dismissed the third respondent with effect from August 1,
1965. The said respondent filed an application challenging
the order of dismissal before the Labour Court under s. 78
of the Bombay Industrial Relations Act, 1946, hereinafter
referred to as the ’Act’, on the 5th August. His complaint
was that the charge sheet was not proper, that the Head
Office of the appellant had no authority to deal with his
case tinder the Standing Orders, that no evidence was
allowed or filed on behalf of the employer and that the
finding was based only on his statement and in particular
his cross-examination. He had been forced to append his
signature to a certain paper without the same having been
read over to him. The Labour Court after holding an enquiry
took the view that the findings of the enquiry officer were
perverse, that the order of dismissal was passed by a person
not authorised to exercise the power and consequently the
Labour Court directed the reinstatement of the third
respondent with all back wages. The appellant preferred an
appeal to the State Industrial Court contending, inter alia,
that the third respondent had failed to comply with the
provisions of law in that he did not make an application
under S. 42(4) of the Act which was a condition precedent to
approaching the Labour Court and prayed that the order of
the Labour Court should be set aside on that ground alone.
The Industrial Court confirmed the order of the Labour
Court. The appellant then filed a peti-
733
tion under Art. 227 of the Constitution before the Bombay
High Court. The High Court field against the appellant.
Unfortunately, there is no appearance for the respondent
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before us.
In order to appreciate the scope of the Labour Court’s
jurisdiction under the Act and in particular the
attractability of s. 78(1)D it is necessary to examine the
scheme of the Act as a whole including the provisions
relevant for this appeal. The Act when first passed in 1946
known as the Bombay Industrial Relations Act was applicable
to a limited area within the State. In the Vidarbha region
of the State, there was another similar Act in operation.
The Act suffered numerous amendments from time to time until
1965 when Maharashtra Act 22 of 1965 was passed The new, Act
was described as an Act "to extend the Bombay Industrial
Relations Act, 1946 throughout the State of Maharashtra and
for that and for certain other purposes further lo amend
that Act, and to repeal corresponding laws in force in any
part of the State". Under s. 2 of that Act the Bombay
Industrial Relations Act of 1946 as in force immediately
before the commencement of the 1965 Act in the Bombay area
of the State of Maharashtra was extended to the rest of the
State. The C.P. and Berar Act was repealed. As a result,
the Act now extends to the whole of the State. Chapter I
contains only three sections : s. 2 deals with the extent,
commencement and application of the Act and s. 3 is the
definition section. Chapter 11 sets out the authorities to
be constituted or appointed under the Act. S. 9 provides
for the constitution of Labour Courts and S. 10 of Indus-
trial Courts. Chapter III containing ss. 11 to 22 deals
with registration of Unions and Chapter IV with approved
Unions. Chapter V deals with representatives of employers
and employees and appearance in proceedings on their behalf.
Chapter VI deals with Powers and duties of labour officer
and Chapter VIII deals with standing, Orders. Chapter VIII
containing ss. 42 to 47 deals with "changes". Chapter IX
deals with Joint Committees, Chapter X with Conciliation
Proceedings, Chapter XI with Arbitration and Chapter XII
with Labour Courts, their territorial jurisdiction, heir
powers, commencement of proceedings before the Labour etc.
It is not necessary to take note of other Chapters excepting
S. 123 in Chapter XIII which deals with the rule making
power. ’the relevant definitive clauses in s. 3 are
"(8) "change" means an alteration in an
industrial matter;
(13) "employee" means any person employed to
do any skilled or unskilled work for hire or
reward in any industry, and includes-
(a) a person employed by a contractor to do
any ,work for him in the execution of a
contract with an
734
employer within the meaning of sub-clause (e)
of clause (14)
(b) a person who has been dismissed,
discharged or retrenched or Whose services
have been terminated from employment on
account of any dispute relating to change in
respect of which a notice is given or an
application made, under section 42 whether
before or after his dismissal. discharge,
retrenchment or, as the case may be,
termination from employment;
but does not include-
(i) a per.-,on employed primarily in a
managerial administrative, supervisory or
technical capacity drawing basic pay
(excluding allowances) exceeding five hundred
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and fifty rupees per month;
(ii) any other person or class of persons
employed in the same capacity as those
specified in clause (i) above irrespective of
the amount of the pay drawn by such person
which the State Government may, by noti-
fication in the Official Gazette, specify in
this behalf.
(17) "Industrial dispute" means any dispute or
difference between an employer and employee or
between employers and employees or between
employees and employees and which is connected
with any industrial matter;
(18) "industrial matter’ means any matter
relating to employment, work, wages, hours of
work, privileges, rights or duties of
employers or employees. or the mode.. terms
and conditions of employment, and includes-
(a) all matters pertaining to the relationship
between, employers and employees, or to, the
dismissal or non-employment of any person;
(b) all matters pertaining to the demarcation
of functions of any employees or class of
employees; .
(c) all matters pertaining to any right or
claim under or in respect of or concerning a
registered agreement or a submission,
settlement or award made under this Act;
(d) all questions of what is fair and right in
relation to any industrial matter having
regard to the person immediately concerned and
of the community as a whole;"
735
Under s. 3 1 (1) every employer must submit for approval to
the Commissioner, of Labour in the prescribed manner
standing Orders regulating the relations between him and his
employees. with regard to the industrial matters mentioned
in Schedule within six weeks from the date of the
application of the Act to the industry. Under sub-s. (5) of
the section :
"Until standing orders in respect of an
undertaking come into operation under the
provisions of sub-section (4), model standing
orders, if any, notified in the Official
Gazette by the State Government in respect of
the industry shall apply to such undertaking."
Schedule 1 to the Act contains among other matters items 10
and 11 relating to termination of employment including
notice to be given by the employer and employee and
punishment including warning, censure, fine, suspension or
dismissal for misconduct, suspension pending enquiry into
alleged misconduct and the acts or omissions which
constitute misconduct.
Normally, therefore, standing orders must deal with miscon-
duct which can lead to dismissal or other punishment.
Under s. 41 the provisions of the Industrial Employment
(Standing Orders) Act, 1946 are not to apply to any industry
to which the provisions of Chapter VII of the Act apply.
As ’industrial matter’ as defined in s. 3(18) includes all
matters pertaining to the dismissal or non-employment of any
person, an industrial dispute within the meaning of s. 3(17)
must necessarily arise when there is any difference between
an employer and an employee about such dismissal.
The solution to the question before us turns on the
interpretation of the relevant provisions in Chapter VIII
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headed "changes". ’Change’ as already noticed means any
alteration in an industrial matter. Under s. 42(1) any
employer intending to effect any change in respect of an
industrial matter specified in Schedule 11 of which item 3
reads
"Dismissal of any employee except as provided
for in the standing orders applicable under
this Act".
must give notice of such intention in the prescribed form to
the representative of the employees. He must also send a
copy of such notice to the , Chief Conciliator, the
Conciliator for the industry concerned for the local area,
the Registrar, the Labour Officer and such other person as
may be prescribed. He has also to affix a copy of such
notice at a conspicuous place of the premises where the
employees affected by the change are employed. Under sub-s.
(2) of s. 42 an employee desiring a change in respect of an
indus-
736
trial matter not specified in Schedule I or Schedule III has
to give notice in the, prescribed form to the employer with
similar intimation to others. Under sub-s. (4) any employee
desiring a chance in respect inter alia, of any industrial
matter specified in Schedule III of which item 6 reads
"Employment including-
(i) reinstatement and recruitment" must make
an application to the Labour Court. ’This
subsection has a proviso which runs :
"Provided that no such application shall lie
unless the employee or a representative union
has in the prescribed manner approached, the
employer with a request for the change and no
agreement has been arrived at in respect of
the change within the prescribed period."
S. 44 envisages an agreement between the parties regarding
"change" and registration of the memorandum thereof by the
Registrar. Under s. 44-A a memorandum of agreement arrived
at is to be forwarded by either party to the Registrar by
registered post and an agreement which is registered under
s. 44 is to come into operation as laid down in s. 45.
The territorial jurisdiction of Labour Courts extends to
local areas for which they are constituted under s. 77 in
Part XII. S. 78 runs as follows :
"78. (1) A Labour Court shall have power to-A.
decide-
(a) disputes regarding-
(i) the propriety or legality of an. order
passed by an employer acting or purporting to
act under the standing orders;
(ii)the application and interpretation of
standing order;
(iii) any change made by an employer or
desired by an employee in respect of an
industrial matter specified in Schedule III
except item (5) thereof and matters arising
out of such change;
(b) industrial disputes-
(i) referred to it under section 71 or 72;
(ii) in respect of which it is appointed as
an arbitrator by a submission;
737
.lm15
(c)whether a strike, lock-out, closure, stoppage or any
change is illegal under this Act;
B. try offenses punishable under this Act where the payment
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of compensation on conviction for an offence is provided
for, determine the compensation and order it,-; payment;
C. require any employer to-
(a) withdraw any change which is held by it to be illegal,
or withdraw temporarily any change the legality of which is
a matter of issue in any proceeding pending final decision,
or
(b) carry out any change provided such change is a matter
in issue in any proceeding before it under this Act.D.require
an employer, where it finds that the order of dismissal,
discharge, removal, retrenchment, termination of service, or
suspension of an employee made; by the employer,-
(i) was for fault or misconduct committed by the employee
which came to the notice of the employer more than six
months prior to the date of such order;, or
(ii) was in contravention of any of the provisions of’ any
law, or of any standing order in force applicable to such
employee, or
(iii) was otherwise improper or illegal,
(a) reinstate the employee forthwith or by a date specified
by it in this behalf and pay him wages for the period
beginning can the date of such order of dismissal,
discharge, removal, retrenchment, termination of’ service or
suspension, as the case may be, and ending on the date on
which the Labour Court orders his reinstatement or on the
date of his reinstatement, whichever is later, or
(b) to pay to the employee in addition to wages (being wages
for the period commencing on the date of his dismissal,
discharge, removal, retrenchment or termination of service
and ending on the date on which the Labour Court orders such
payment), such sum not exceeding four thousand rupees by way
of compensation, regard being had to-loss of employment and
possibility of getting suitable employment thereafter.
738
(2) Every offence punishable under this Act
shall he tried by the Labour Court within the
local limits of whose jurisdiction
it was
committed.
Explanations dispute falling under clause (a)
of paragraph A of sub-section (1) shall be
deemed to have arisen if within the period
prescribed under the proviso to sub-section
(4) of section 42, no agreement is arrived at
in respect of an order, matter or change
referred to in the said proviso."
Clause D of s. 78(1) was introduced in the Act of
Maharashtra Act 22 of 1965. S. 31 of the Act of 1965 not
only introduced cl. D but also made changes in paragraphs A
and C thereof. The forerunner of Act 22 of 1965 i.e. Bill
No. LXVI of 1964, the object of which was to make numerous
changes in the Act shows in its Statement of Objects and
Reasons that clause 31 of the Bill was meant to "enlarge the
powers of the Labour Court under s.78". According to this
clause
"The Labour Court is empowered (by paragraph
D) to direct temporary withdrawal of any
change the legality of which is a matter of
issue in any proceedings before it, pending
its final decision."
The Labour Court was also thereby further empowered "to
require an employer to reinstate an employee with full back
wages or pay him wages and compensation not exceeding Rs.
2,500/.... if the employee Was dismissed, discharged" etc.
The Statement of Objects and Reasons amply demonstrates that
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by introducing paragraph D in S. 78(1) the legislature was
’Only seeking to arm the Labour Court with further and more
effective powers to grant relief.
Under s. 79(1) proceedings before a Labour Court in respect
of disputes falling under clause (a) of paragraph A of sub-
s. (1) of s. 78 must be commenced on an application made by
any of the parties to the dispute etc. and under sub-s. (2)
every application under sub-s.(1) has to be made in the
prescribed from and manner. Under S. 84 an appeal lies to
the Industrial Court against the decision of a Labour Court
in respect _ of a matter falling under clause (a) or cl. (c)
of paragraph A of sub-s. (1) ,of s. 78 except in the case of
lock-out etc. or a decision of such .court under paragraph C
of sub-s. (1) of the said section.
Reading s. 78 as a whole, there is no doubt left in our
minds ’that the legislature wanted the provision to be a
comprehensive one. It contains all the powers of the Labour
Court in the matter of all disputes mentioned and gives it
jurisdiction to punish
739
certain offenses under the Act. It does not lay down the
procedure for the attraction of such jurisdiction. So far
as disputes are concerned, the procedure is as laid down in
s. 79.
It will be noted that no mention is made in s. 84 of
paragraph D of S. 78(1) but inasmuch as orders of dismissal,
discharge, removal ,retrenchment, termination of service or
suspension of an employee would come under s. 78(1)
paragraph A, the legislature felt it unnecessary to make any
mention of an order under paragraph D in s. 84. Paragraph
D, so far as we can see, is not referred to anywhere, else
in the Act.
The question therefore narrows down to this i.e. whether the
legislature by inserting paragraph D in s. 78(1) intended to
chalk out a wholly different course of action to that
prescribed in Chapter VIII dealing with changes. In our
view, there is nothing in the Act which warrants such a
conclusion. The scheme of Chapter VIII seems to be that in
regard to any "change" in an matter there must be compliance
with the provisions of that Chapter. In other words, effort
must first be made by the employer intending to effect any
change in respect of matters covered by s. 42(1) or an
employee desiring a change in respect of any order passed by
the employer under standing orders which would of necessity
include an order of dismissal, to see whether it was
possible to come to any agreement and an application to the
labour court could only be resorted to after efforts had
been made to settle the dispute and no agreement had been
arrived at.
The scheme of S. 7 8 (1) seems to be that a Labour Court is
to have power to decide, all the disputes covered by
paragraph A. Paragraph B thereof gives the Labour Court the
power to try offenses punishable under the Act and
cognizance of such offenses .;an only be taken under s. 82.
Paragraphs C and D set out what relief the Labour Courts
are empowered to give including directions as may be found
necessary in that behalf. As already noted, the Statement
of Objects and Reasons (A clause 31 of the Bill which later
resulted in Act 22 of 1965, shows that the underlying dea
was to enlarge the powers of the Labour Court. The
Legislature nowhere intended to make a complete departure
from the procedure to be adopted when powers under s. 78(1)D
were to be exercised.
Rule 5 5 of the Bombay Industrial Relations Rules, 1947
shows how an application is to be made and the period within
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which it is to be made.
It must be held that a person who is dismissed would be an
employee within the meaning of s. 3(13) of the Act and we
can
740
see no valid reason for differentiating the case of a
dismissed employee from one who complains of some other
change. As the scheme of the Act is that disputes should be
settled as far as possible and primarily through
conciliation and agreement, it does not stand to reason that
an employee should be able to side-step all this by a direct
reference to the Labour Court. A Labour Court is a creature
of the statute and it can only exercise such jurisdiction as
the statute confers on it : if there are certain pre-
conditions to the exercise of its-jurisdiction, it must
refuse to entertain any such application unless such pre-
conditions are first complied with.
In the result we set aside the order of the High Court,
allow the appeal and quash the orders of the Labour Court
and the Industrial Court but do not make any order for
consequential relief, in view of the solemn assurance given
to this Court by Mr. Phadke, learned counsel for the
appellant that his client does not desire to give effect to
the order of termination of service passed on the third
respondent. In the circumstances of the case, we make no
order as to costs.
K.B.N.
Appeal allowed
L1031 Sup. Cl/72-2500-25-8-73--GIPF.
741