The Government must consider all relevant circumstances, not just the absence of mala fides, when deciding whether to refer a dispute for adjudication under Section 12(5) of the Industrial Disputes Act, 1947.

1. The petitioner in this case is a registered trade union representing the workmen (staff members) employed in the factory of Messrs. J & P. Coats (India) Private Limited, Koratty. Two members of the clerical staff of the Company by name N. M. Abraham and K. Gopinath were dismissed from service by an order dated 4 51973 passed by the management. That order was passed as the outcome of a domestic enquiry conducted against those two clerks on serious charges of misconduct involving fraud and dishonesty in relation to the disposal of property belonging to the Company. The petitioner-Union took up the cause of those two employees and raised an industrial dispute. Conciliation proceedings held by the District Labour Officer, Trichur having failed to bring about a settlement, the Conciliation Officer forwarded to the Government his report under S.12 (4) of the Industrial Disputes Act, 1947 (hereinafter referred to as the Act). After considering the said report the Government ultimately passed the order Ext. P1 dated 15 31974 informing the petitioner-Union and also the management of the Company about the decision arrived at by the Government not to refer the matter for adjudication. Ext. P1 is in the following terms:

"I am directed to inform you that Government do not find anything prima facie malafide on the part of the Management in having dismissed the two workmen. Government therefore do not propose to refer the matter for adjudication."

The petitioner seeks to quash Ext. P1 on the ground that the Government have not applied their mind to all the relevant aspects before taking a decision under subsection (5) of S.12 of the Act as to whether there existed a case for reference of the dispute to the Industrial Tribunal or Labour Court for adjudication.

2. Counsel for the petitioner relied strongly on the decision of our learned brother Poti, J. in Workmen of Cochin Chamber of Commerce v. State of Kerala, 1976-II LLJ. 108, and also another unreported decision of the same learned judge in O. P. No. 2782 of 1973. In the first case aforementioned the sole ground on which the Government had refused to make a reference was "as the management has taken action in accordance with the canons of natural justice, prima facie the action of the management is not mala fide". Pointing out that even if the dismissal of an employee was not mala fide it may nevertheless be bad for several other reasons the learned judge held that the Government had committed an illegality in assuming that the absence of mala fides was the only question that was relevant in deciding whether or not to make a reference. After adverting in detail to the decisions of the Supreme Court in State of Bombay and another v. Krishnan (K. P.) and others, 1960-II LLJ. 592, and Bombay Union of journalists and others v. State of Bombay and another, 1964-1 LLJ. 351, regarding the scope of S.12 (5) of the Act, the nature of the duty imposed upon the Government by the said sub-section and the scope of interference by the court with such an order passed by the Government the learned judge held that interference by the court with an order passed by the Government under S.12(5) of the Act will be justified on the grounds inter alia that the Government had not applied its mind to relevant factors, or that the satisfaction or conclusion reached by it is found to be based on an application of a wrong test or on the misconstruction of a statute Accordingly the order impugned in that case was quashed by the learned judge on the ground that in assuming that the only question to be considered was whether the dismissal of the employee was mala fide the Government had made an irrational approach and applied a wrong test and had also omitted to consider other matters which were relevant.

3. In the unreported decision in O. P. No. 2782 of 1973 the order impugned was one passed by the Government of India declining to refer a dispute for adjudication on the ground that "the services of the wor