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1987 Supreme(Mad) 430
High Court of Judicature at Madras
THE HONOURABLE CHIEF JUSTICE MR. M. N. CHANDURKAR & THE HONOURABLE MR. JUSTICE SRINIVASAN
Messrs Shaw Wallace and Company Limited - Appellant
Versus
State of Tamil Nadu Represented By The Commissioner and Secretary, Labour Dept. and Others - Respondent
Case No : Writ Appeal Nos. 225 etc. of 1987
Decided On : 01 December 1987
Headnote:
The Court held that the appropriate Government has the discretion to decide whether to refer a dispute for adjudication, but this discretion is not absolute and must be exercised in a fair and reasonable manner. The Government cannot refuse to refer a dispute on irrelevant or extraneous grounds, or on the basis of a finding that the domestic enquiry was fair and proper and the punishment awarded was appropriate. The Government should also consider whether the claim is patently frivolous or is opposed to the provisions of the Act or is inconsistent with any agreement between the parties.
Fact of the Case:
In various writ petitions, the petitioners challenged the orders of the State Government refusing to refer disputes for adjudication under Section 10 of the Industrial Disputes Act, 1947. The disputes related to issues such as termination of employment, payment of bonus, and closure of a unit.
Finding of the Court:
The Court held that the Government has the discretion to decide whether to refer a dispute for adjudication, but this discretion is not absolute and must be exercised in a fair and reasonable manner. The Government cannot refuse to refer a dispute on irrelevant or extraneous grounds, or on the basis of a finding that the domestic enquiry was fair and proper and the punishment awarded was appropriate. The Government should also consider whether the claim is patently frivolous or is opposed to the provisions of the Act or is inconsistent with any agreement between the parties.
Issues: 1. Whether the Government has the discretion to refuse to refer a dispute for adjudication under Section 10 of the Industrial Disputes Act, 1947? 2. If so, what are the limits of this discretion? 3. What factors should the Government consider when deciding whether to refer a dispute for adjudication?
Ratio Decidendi: The Court held that the Government has the discretion to decide whether to refer a dispute for adjudication, but this discretion is not absolute and must be exercised in a fair and reasonable manner. The Government cannot refuse to refer a dispute on irrelevant or extraneous grounds, or on the basis of a finding that the domestic enquiry was fair and proper and the punishment awarded was appropriate. The Government should also consider whether the claim is patently frivolous or is opposed to the provisions of the Act or is inconsistent with any agreement between the parties.
Final Decision: The Court allowed some of the writ appeals and dismissed others, depending on the specific facts and circumstances of each case.
Srinivasan, J.
All the above writ appeals arise out of writ petitioner challenging orders of the State Government refusing to pass orders of reference under Section 10 of the Industrial Disputes Act, hereinafter referred to as 'the Act, ' for adjudication. All cases except W.A. 292 of 1987 and 1781 of 1987 fall within the ambit of Section 2-A of the Act arising out of disputes raised by individuals. The common question which requires to be answered is, 'what are the grounds on which the appropriate Government can refuse to refer a dispute for adjudication ?'. Though the matter is not res integre, we are obliged to consider it at some length on account of the contentions raised before us, in particular, that the decisions of the Supreme Court rendered recently run counter to its earlier pronouncements.
2. Excepting in W.A. Nos. 255, 292 and 1781 of 1987, in all other matters the Government refused to make reference on the ground that there was fair and proper enquiry by the concerned management and the punishment meted out to the worker concerned was quite appropriate. In W.A. 255 of 1987, the refusal to make reference was on the ground that the writ petitioner was not a workman as defined by the Act, as he was holding a supervisory post on a salary of Rs. 2232.25 p.m. In W.A. 292 of 1987, the dispute relates to closure of a unit and the Government refused to make reference on the footing that the unit was closed because of loss for past four years and that out of 88 workers, 84 persons had accepted the closure and settled their accounts and the remaining four did not have representative capacity. In W.A. 1781 of 1987 the dispute relates to payment of bonus. The Government refused to make reference on the ground that the management had already decided to pay ex-gratia at 8.33 per cent. and the provisions of the Payment of Bonus Act shall not apply to the establishment.
3. Mr. Sanjay Mohan appearing for the appellants in W.A. 255, 290, 292, 520, 685, 708, 811, 849 and 1781 of 1987 submitted at the outset that cases falling under Section 2-A of the Act would stand on a different footing from cases not covered by the Section. He contended that the Government is entitled and bound to consider all the relevant circumstances of the case which have a bearing on the merits of the case and decide whether a prima facie case has been made out for reference. He referred in detail to the judgments of the Supreme Court in State of Bombay v. K. P. Krishnan (1960-II-LLJ-592) and Bombay Union of Journalists v. State of Bombay (1964-I-LLJ-351) and submitted that in the case of non-employment of an individual worker, the Government has to consider prima facie whether there was a fair enquiry, whether the charges against the worker were made out and whether the punishment awarded was just. According to learned counsel, the order of the Government refusing to make a reference could be interfered with by Courts only if irrelevant matters are taken into account, if relevant matters are not considered or if the order is vitiated by mala fides. Reference was also made to the decision in Hochtief Gammon v. State of Orissa (1975-II-LLJ-418) and Prem Kakar v. State of Haryana 1976 AIR(SC) 1474, 1976 (32) FLR 343, 1976 (49) FJR 51, 1976 LIC 1028, 1976 (1) LLN 494, 1976 (3) SCC 433, 1976 (3) SCR 1010, 1976 UJ 535, 1976 SCC(L&S) 450, 1976 SCC(L&S) 450, 1976 SCC(L&S) 450, 1976 SCC(L&S) 450, 1976 SCC(L&S) 450, 1976 SCC(L&S) 450, 1976 SCC(L&S) 450. Then learned counsel referred to the three recent decisions of the Supreme Court Workmen of Syndicate Bank, Madras v. Government of India (1985-I-LLJ-93) Ram Avtar v. State of Haryana (1985-II-LLJ-187) and v. Veerarajan v. Government of Tamilnadu (1987-I-LLJ-209) and the decisions of the Division Benches of this Court following them and submitted that the recent decisions of the Supreme Court are rendered by Benches consisting of lesser number of Judges than in State of Bombay v. K. P. Krishnan (supra) and B
