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1994 Supreme(Mad) 851
High Court of Judicature at Madras
THE HONOURABLE CHIEF JUSTICE MR. K.A. SWAMI & THE HONOURABLE MR. JUSTICE SOMASUNDARAM
Messrs Metal Box India Limited and Another - Appellant
Versus
State of Tamil Nadu and Others - Respondents
W.P. No. 226/1993 & 7656/1994
Decided On : 21 October 1994
Headnote:
INDUSTRIAL DISPUTES ACT - SECTION 10(3) - SCOPE - POWER OF GOVERNMENT TO PROHIBIT CONTINUANCE OF LOCK-OUT - CONDITIONS - REFERENCE OF DISPUTE TO INDUSTRIAL TRIBUNAL - REQUIREMENT - SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985 - OVERRIDING EFFECT - APPLICABILITY TO INDUSTRIAL DISPUTES.
Fact of the Case:
The management of a company declared a lock-out in response to various issues, including financial constraints, low production, strike by workers, and unfair labour practices. The Government referred the issue of deferment of wages beyond March 31, 1992, to the Industrial Tribunal for adjudication and passed an order prohibiting the continuance of the lock-out under Section 10(3) of the Industrial Disputes Act, 1947 (the Act). The company challenged the Government's order, arguing that the lock-out was not connected to the dispute referred to the Tribunal, that the Government could not refer only one issue for adjudication while ignoring other issues related to the lock-out, and that the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) prevailed over the Act.
Finding of the Court:
The Court held that the Government's order prohibiting the continuance of the lock-out was invalid and liable to be quashed. The Court found that the deferment of wages was only one of several reasons for the lock-out and that the Government could not refer only one issue for adjudication while ignoring the other issues connected to the lock-out. The Court also held that the provisions of SICA did not override the Act in relation to industrial disputes between employers and employees, and that the Industrial Disputes Act was a special law prevailing over SICA, a general law.
Issues: 1. Whether the lock-out declared by the management was connected to the dispute referred to the Industrial Tribunal for adjudication. 2. Whether the Government could refer only one issue for adjudication while ignoring other issues related to the lock-out. 3. Whether the provisions of SICA prevailed over the Act in relation to industrial disputes between employers and employees.
Ratio Decidendi: 1. The power of the Government to prohibit the continuance of a lock-out under Section 10(3) of the Act is subject to the condition that the lock-out must be connected to the dispute referred to the Industrial Tribunal for adjudication. 2. The Government cannot refer only one issue for adjudication while ignoring other issues connected to the lock-out. All the issues connected to the lock-out must be referred to the Tribunal for adjudication before the Government can pass an order prohibiting the continuance of the lock-out. 3. The provisions of SICA do not override the Act in relation to industrial disputes between employers and employees. The Industrial Disputes Act is a special law prevailing over SICA, a general law.
Final Decision: The Court allowed the company's petition and quashed the Government's order prohibiting the continuance of the lock-out.
SOMASUNDARAM, J.
The 1st petitioner is a company incorporated under the Companies Act and having its registered office at Calcutta. It has manufacturing units in several places including Tamil Nadu. They are engaged in the manufacture of metal containers, collapsible tubes, paper packages, plastic moulded goods etc. It is the case of the petitioners that they are incurring heavy losses for several years. They have therefore, applied for the relief under the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as S.I.C.A.) on May 27, 1988 the company has been declared as a sick industry. Further proceedings relating to the framing of a scheme is pending with the Board for Industrial and Financial Reconstruction. With effect from December 20, 1987 the Madras Factory suspended its operation in view of the cumulative loss reaching the figure of Rs. 90.20 Crores till March 31, 1987. On the assurance given by the workers and on the advice of the Commissioner of Labour, the Unit was restarted in April, 1989. The primary conditions on which the unit was restarted were, (1) there will be a 20% cut in wages and in salaries including D.A. of the workers and the staff; (2) 50% of the emoluments so deducted shall be paid after three years from 1992-93 and the balance of fifty per cent on a subsequent date; (3) that the workers and the staff will co-operate in maintaining the production level as per the advice of the Commissioner of Labour dated April 22, 1989 and the agreement dated January 12, 1991 before the Special Deputy Commissioner of Labour. There is controversy as to which of the parties did not comply with the assurances leading to a confrontation which led to the eventual suspension of the operation of the factory by the management from October 11, 1992 onwards. The Board for Industrial and Financial Reconstruction (hereinafter referred to as B.I.F.R.) held its meeting on November 23, 1992 and the Board had called for various proposals and adjourned the hearing. Both the State Government as well as the representatives of the workmen were heard by the Board. On December 18, 1992 the conciliation talks before the labour authorities failed and the Government passed two Government Orders, viz., G.O. (D) No. 1274 and G.O. (D) No. 1275, Labour and Employment Department, dated December 18, 1992. By G.O. (D) No. 1274 the dispute between the management and workmen was referred for adjudication before the Industrial Tribunal Madras. The dispute referred to the Industrial Tribunal for adjudication under Section 10(1)(d) of the Industrial Disputes Act, 1947 (hereinafter referred to as the Act) is as follows :
"Whether the action of the management in continuing the deferment of wages beyond March 31, 1992 is justified ? If not, to give appropriate directions."*
By G.O. (D) No. 1275, the Government passed an order under Section 10(B) read with Section 10(3) of the Act prohibiting the continuance of lock-out by the management. The said G.O. (D) No. 1275 dated December 18, 1992 reads as follows :
"Whereas the Government by Government Order first read above, have referred the issue relating to deferment of wages to the workers beyond March 31, 1992 raised by the workers by the management of Metal Box India Limited, Madras 81, for adjudication by the Industrial Tribunal, Madras.
And whereas the Government are of the opinion that for the purpose of maintaining employment and industrial peace in the aforesaid management and pending adjudication of the reference by the Industrial Tribunal, it is necessary to make an order.
Now, therefore, in exercise of the powers conferred by Section 10-B read with Section 10(3) of the Industrial Disputes Act, 1947 the Governor of Tamil Nadu hereby makes the following.
Order Pending adjudication of the industrial disputes by the Industrial Tribunal, Madras, the Government prohibit the continuance of suspension of operation of the factory by the Management and they are directed to
