The provisions of the Arbitration Act, 1940, including those related to setting aside an award, are applicable to arbitrations under Chapter XI of the Bombay Industrial Relations Act, 1946, through Section 68, and the Labour Court or Industrial Court has jurisdiction to consider and adjudicate upon the validity of an award under Section 68.

Headnote:
ARBITRATION - BOMBAY INDUSTRIAL RELATIONS ACT, 1946 - SECTION 68 - APPLICABILITY OF ARBITRATION ACT, 1940 - SETTING ASIDE OF AWARD - JURISDICTION OF LABOUR COURT OR INDUSTRIAL COURT - APPEAL FROM DECISION OF LABOUR COURT - INDUSTRIAL DISPUTES (APPELLATE TRIBUNAL) ACT, 1950 - SECTION 2(C) - INDUSTRIAL TRIBUNAL - JURISDICTION OF LABOUR APPELLATE TRIBUNAL.
Fact of the Case:

A dispute arose between textile workers and millowners in Ahmedabad, leading to a submission to arbitration on July 31, 1952. On September 9, 1953, one of the companies gave notice to close down the second shift from October 10, 1953. The Textile Labour Association objected, claiming the action was covered by the general submission to arbitration. The company proceeded with the closure, prompting a complaint to the Labour Appellate Tribunal under Section 23 of the Industrial Disputes (Appellate Tribunal) Act, 1950, alleging dismissal of employees without permission. The dispute was referred to arbitration on December 18, 1953, and an award was made on September 16, 1954. The company applied to the Labour Court to set aside the award on grounds of legal misconduct by the arbitrator. The Labour Court dismissed the application, but the Labour Appellate Tribunal set aside the order and remanded the matter back to the Labour Court.
Finding of the Court:

The court held that the provisions of the Arbitration Act, 1940, including those related to setting aside an award, are applicable to arbitrations under Chapter XI of the Bombay Industrial Relations Act, 1946, through Section 68. The Labour Court and Industrial Court have the powers exercisable by a Civil Court under the Arbitration Act. The court rejected the argument that an aggrieved party should seek a remedy outside the Arbitration Act, emphasizing the need for a summary and expeditious remedy in labor disputes. The court also held that the Labour Appellate Tribunal had jurisdiction to hear the appeal from the decision of the Labour Court, as the Labour Court was exercising its powers under Section 68 of the Bombay Industrial Relations Act, which falls within the definition of an Industrial Tribunal under Section 2(c) of the Industrial Disputes (Appellate Tribunal) Act, 1950.
Issues: 1. Whether the provisions of the Arbitration Act, 1940, including those related to setting aside an award, are applicable to arbitrations under Chapter XI of the Bombay Industrial Relations Act, 1946? 2. Whether the Labour Court or Industrial Court has jurisdiction to consider and adjudicate upon the validity of an award under Section 68 of the Bombay Industrial Relations Act? 3. Whether an appeal lies from a decision of the Labour Court exercising its powers under Section 68 of the Bombay Industrial Relations Act, and if so, to which Court? 4. Whether the Labour Appellate Tribunal had jurisdiction to entertain the appeal from the decision of the Labour Court in the present case?
Ratio Decidendi: 1. The court interpreted Section 68 of the Bombay Industrial Relations Act, 1946, to incorporate the provisions of the Arbitration Act, 1940, into the Act, making them applicable to arbitrations under Chapter XI. The court reasoned that the Legislature intended to incorporate the Arbitration Act's provisions to provide a comprehensive framework for arbitration proceedings, including the setting aside of awards. 2. The court held that the Labour Court and Industrial Court have the powers exercisable by a Civil Court under the Arbitration Act, as provided by Section 68 of the Bombay Industrial Relations Act. This includes the power to consider and adjudicate upon the validity of an award. 3. The court found that there is no provision in the Bombay Industrial Relations Act for an appeal from a decision of the Labour Court exercising its powers under Section 68. However, the court relied on the definition of 'Industrial Tribunal' in Section 2(c) of the Industrial Disputes (Appellate Tribunal) Act, 1950, which includes the Labour Court, to establish the jurisdiction of the Labour Appellate Tribunal to hear appeals in such cases. 4. The court concluded that the Labour Appellate Tribunal had jurisdiction to entertain the appeal from the decision of the Labour Court in the present case, as the Labour Court was exercising its powers under Section 68 of the Bombay Industrial Relations Act, which falls within the definition of an Industrial Tribunal under the Industrial Disputes (Appellate Tribunal) Act.
Final Decision: The petition challenging the decision of the Labour Appellate Tribunal was dismissed, and the award of the arbitrator was upheld.

JUDGMENT

1. There was a dispute between the Textile workers in Ahmedabad and the Millowners Association and in regard to those disputes and future disputes there was a submission in arbitration on 31-7-1952. On 9-9-1953 respondent 2 company gave a notice to its workers to close down the second shift from 10-10-1953.

On 2-10-1953 the petitioners, who are the Textile Labour Association, wrote to respondent 2 company pointing out that the action that they sought to take was covered by the general submission made on 31-7-1952 and before closing down this shift they should have the matter adjudicated upon by the arbitrators. Respondent 2 company did not accept this contention of the petitioners and the second shift was closed down from 10-10-1953.

At that time an industrial dispute was pending before the Labour Appellate Tribunal and the petitioners made a complaint under Section 23, Industrial Disputes (Appellate Tribunal) Act, 1950, that respondent 2 company had dismissed its employees without the necessary permission of the Labour Appellate Tribunal under Section 22.

This dispute between the petitioners and respondent 2 company was referred to arbitration on 18-12-1953 and the submission paper signed by the General Secretary of the Textile Labour Association and the Manager of respondent 2 company stated that the parties shall refer within a week the dispute involved in the present application to he arbitration of Sheth Shri Sakarlal Balabhai and Shri S.R. Vasavda under the terms of the arbitration agreement between the Millowners Association and the Textile Labour Association of Ahmedabad, and this was the reference to the general submission made on 31-7-1952.

The submission to arbitration was registered under Section 66, Bombay Industrial Relations Act, 1946, on 17-1-1954 and the dispute which was referred is the dispute regarding the closure of the second and third shifts to the arbitration of Vasadva and Sakarlal Balabhai. The arbitrators differed and the matter was referred to Mr. Divatia who acted as the Umpire, and Mr. Divatia gave his award on 16-9-1954. Respondent 2 company then applied to the Labour Court to set aside the award on the ground of legal misconduct on the part of Mr. Divatia.

The Labour Court held that the application was not maintainable and dismissed the application. Respondent 2 company appealed to the Labour Appellate Tribunal. The Labour Appellate Tribunal took the view that the application was Well founded, set aside the order of the Labour Court and remanded the matter to the Labour to dispose of the application of respondent 2 company on merits. The petitioners have now come before us on this petition.

2. The contention of Mr. Buch is that In arbitration under the Bombay Industrial Relations Act, 1946, the provision contained in the Arbitration Act for setting aside an award on the ground of misconduct of an arbitrator does not apply. Chapter XI of the Bombay Industrial Relations Act deals with arbitration and Section 66 provides for submission to arbitration of any Industrial dispute by an employer and a representative Union or any other registered union and the submission may be to a private or to a labour Court or the Industrial Court. Section 68 provides:

"The proceedings in arbitration under this Chapter shall be in accordance with the provisions of the Arbitration Act, 1940, in so far as they arc applicable and the powers which are exercisable by a Civil Court under the said provisions, shall be exercisable by the Labour Court and the Industrial Court."

Section 72 confers upon the State Government the power to refer any matter to arbitration of a Labour Court or the Industrial Court, and Section 73 also confers upon the State Government the power to refer to the arbitration of the Industrial Court certain cases mentioned in that section. Section 73A confers powers upon unions to refer matters to arbitration.

Section 74(1) provides that the arbitrator, if he is a private arbitrator, or the Labour Cour

Click Here to Read the rest of this document