The Labour Court has the power to entertain applications to set aside ex parte awards even after they become enforceable, in the interest of natural justice.

ORDER

1. An industrial dispute pertaining to the termination of the services of the respondent was referred for adjudication to the Labour Court. In the statement of the claim filed before the Labour Court, the respondent has submitted that he was appointed in the year 1984 and worked continuously till 1994 without any break. His services were terminated on 27th November, 1994 in violation of Section 25(f) of the Industrial Disputes Act ('the Act'). As the appellant did not appear before the Labour Court, an exparte Award was passed directing reinstatement of the respondent with continuity of services and full back wages from the date of termination till reinstatement. An application was filed by the appellant for setting aside the exparte Award dated 16th July, 1996 on the ground that he had no knowledge about the matter as notice was not served. Accepting the submission made by the appellant, the exparte Award was set aside by the Labour Court by an Order dated 16th September, 2003. The Respondent challenged the said order before the High Court, mainly on the ground that the Labour Court became functus officio after the expiry of 30 days from the date of publication of the Award. The respondent contended before the High Court that the Labour Court lacked jurisdiction to set aside the exparte Award by placing reliance on a judgment of this court in Grindlays Bank Ltd. versus Central Government Industrial Tribunal , (1980) Supp1 SCC 420. The High Court allowed the writ petition filed by the respondent by holding that the Labour Court committed an error in setting aside the exparte Award. The said order of the High Court is in challenge before us in the present appeal.

2. In view of the divergence of opinion regarding the jurisdiction of the Labour Court in setting aside the exparte Award after 30 days of publication of Award under Section 17A of the Act, matters were referred to a larger Bench. Resolving the dispute, this Court by a judgment in Haryana Suraj Malting Limited versus Phool Chand , (2018) 16 SCC 567 held as follows:

"Merely because an award has become enforceable, does not necessarily mean that it has become binding. For an award to become binding, it should be passed in compliance with the principles of natural justice. An award passed denying an opportunity of hearing when there was a sufficient cause for non-appearance can be challenged on the ground of it being nullity. An award which is a nullity cannot be and shall not be a binding award. In case a party is able to show sufficient cause within a reasonable time for its non-appearance in the Labour Court/Tribunal when it was set ex parte, the Labour Court/Tribunal is bound to consider such an application and the application cannot be rejected on the ground that it was filed after the award had become enforceable. The Labour Court/Tribunal is not functus officio after the award has become enforceable as far as setting aside an ex parte award is concerned. It is within its powers to entertain an application as per the scheme of the Act and in terms of the rules of natural justice. It needs to be restated that the Industrial Disputes Act, 1947 is a welfare legislation intended to maintain industrial peace. In that view of the matter, certain powers to do justice have to be conceded to the Labour Court/Tribunal, whether we call it ancillary, incidental or inherent."

3. Now that the dispute pertaining to the jurisdiction of the Labour Court is resolved by this court, we remand the matter to the Labour Court to adjudicate the case on its own merits. As the matter has been pending for a long time, we request the Labour Court to finalise the adjudication expeditiously, preferably within a period of six months from today.

4. The Civil Appeal is disposed of accordingly.