Mere allegations of counsel’s negligence do not constitute sufficient cause to set aside an ex parte award.

The respondent-employee had worked as an operator in the petitioner-company’s Spraydyre Department since 1992.

During the pendency of an earlier wage-related industrial dispute, his services were terminated on 10 September 2001 after a departmental inquiry.

He challenged the termination through Reference (LCA) No. 1239 of 2002.

The Labour Court held the departmental inquiry illegal and permitted the employer to lead evidence to prove the charges.

Although the employer’s witness filed an affidavit, the witness did not remain available for cross-examination despite repeated adjournments between 2015 and 2018.

The employer’s advocate retired from the matter on 12 September 2018 after issuing notice, but the employer did not engage another advocate.

The employee’s evidence consequently remained unchallenged, and the Labour Court allowed the reference by judgment and award dated 26 August 2022, directing reinstatement with 50% back wages and continuity of service.

After learning of the award, the employer filed an application under Rule 26-A of the Industrial Disputes (Gujarat) Rules, 1966, seeking restoration and setting aside of the ex parte proceedings.

The Labour Court dismissed that application on 19 April 2024.

The employer challenged the dismissal under Articles 226 and 227 of the Constitution.

1. Whether the employer established sufficient cause under Rule 26-A of the Industrial Disputes (Gujarat) Rules, 1966 for setting aside the ex parte award and restoring the reference proceedings?

2. Whether the Labour Court’s refusal to restore the reference proceedings disclosed any error, illegality, perversity, or denial of natural justice warranting interference under Articles 226 and 227 of the Constitution?

3. Whether the employer’s reliance on alleged negligence or non-communication by its former advocate constituted sufficient cause in the circumstances of the case?

The Court applied Rule 26-A of the Industrial Disputes (Gujarat) Rules, 1966, under which an aggrieved party may apply within thirty days from the date of knowledge of an ex parte award, order, or report, and the Labour Court may set it aside only upon being satisfied that sufficient cause existed for the party’s non-appearance or for setting aside the ex parte decision, subject to appropriate terms.

The Court also applied the supervisory standards governing jurisdiction under Articles 226 and 227 of the Constitution, under which interference is justified where the subordinate court’s order suffers from jurisdictional error, illegality, perversity, or material procedural unfairness.

The governing principle was that the burden lies on the applicant to plead and establish a specific and credible “sufficient cause”; vague assertions of counsel’s negligence, unsupported by the record, do not satisfy Rule 26-A.

The Court held that the employer failed to establish sufficient cause.

The employer did not identify the precise date on which it acquired knowledge of the ex parte award, which was material because Rule 26-A prescribed a thirty-day limitation period from the date of knowledge.

Its explanation that it relied on its advocate to inform the witness about cross-examination was vague and unsupported.

The record showed that the employer had received notice of the advocate’s retirement on 12 September 2018, yet it did not appoint another advocate or take steps to prosecute the matter.

The employer’s witness had remained absent for nearly four years, and the employee’s evidence had gone unchallenged.

The Court further noted that the employer had not issued any notice or taken other action against the former advocate to substantiate the allegation of negligence.

In these circumstances, the employer’s prolonged inaction could not be converted into sufficient cause or a violation of natural justice.

Given that the employee had been litigating since 2002 and had succeeded after approximately two decades, the Court declined to permit further obstruction of enforcement of the award.

It held that no sufficient cause was shown under Rule 26-A and that the Labour Court’s order dated 19 April 2024 rejecting restoration was neither illegal nor perverse.

No ground for interference under Articles 226 or 227 was established.

The Special Civil Application was accordingly dismissed, leaving undisturbed the Labour Court’s award directing the respondent’s reinstatement with 50% back wages and continuity of service.