1986 Supreme(Mad) 49

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE NAINAR SUNDARAM & THE HONOURABLE MR. JUSTICE NATARAJAN
Special Officer of The Management of T.U.C.S. Limited Madras-5 - Appellant
Versus
S. Loganathan - Respondent
Case No : Writ Appeal No. 352 and 353/84
Decided On : 28 January 1986

An agreement to refer an industrial dispute to arbitration outside S. 10-A of the Industrial Disputes Act, 1947 is not permissible and non-compliance with the provisions of S. 10-A would vitiate the arbitration and the award.

Headnote:

INDUSTRIAL DISPUTES - SETTLEMENT - ARBITRATION - INFORMAL ARBITRATION - AGREEMENT TO REFER DISPUTE TO ARBITRATION - SCOPE OF SECTION 10-A OF THE INDUSTRIAL DISPUTES ACT, 1947 - VALIDITY OF ARBITRATION AWARD - WRIT JURISDICTION - INDIVIDUAL WORKMEN'S RIGHT TO CHALLENGE AWARD.

Fact of the Case:

An industrial dispute between the T.U.C.S. Employees' Union and the first-respondent relating to wage increase, wastage, driage and spillage allowance and non-employment of certain workmen was conciliated before the Deputy Commissioner of Labour-I, Madras. A settlement was reached on 2nd July, 1977 under S. 12(3) of the Industrial Disputes Act, 1947, leaving the issue of non-employment of the concerned workmen to the decision of the Commissioner of Labour, Madras, as an informal arbitrator. The Commissioner upheld the non-employment of eleven workmen including the two petitioners. The petitioners challenged the decision in a writ petition, contending that the proceedings before the Commissioner were an arbitration under S. 10-A of the Act and that the award was vitiated for non-compliance with S. 10-A(3).

Finding of the Court:

The court held that the agreement in the settlement to refer the dispute to informal arbitration was an agreement to refer the dispute to arbitration under S. 10-A of the Act, as it did not settle the dispute but merely referred it to be decided by the Commissioner. The court further held that the agreement fell within the scope of the Act and that non-compliance with the provisions of S. 10-A would vitiate the arbitration and the award. The court also held that the petitioners, as persons affected by the award, had the right to challenge it before the court.

Issues: 1. Whether the agreement in the settlement to refer the dispute to informal arbitration was an agreement to refer the dispute to arbitration under S. 10-A of the Act? 2. Whether the agreement fell within the scope of the Act and whether non-compliance with the provisions of S. 10-A would vitiate the arbitration and the award? 3. Whether the petitioners, as persons affected by the award, had the right to challenge it before the court?

Ratio Decidendi: 1. The court held that the agreement in the settlement to refer the dispute to informal arbitration was an agreement to refer the dispute to arbitration under S. 10-A of the Act, as it did not settle the dispute but merely referred it to be decided by the Commissioner. The court relied on the Full Bench decision in R. K. Steels v. Their Workmen, which held that an agreement to refer an industrial dispute to an arbitrator cannot amount to a settlement under the Act, as the dispute subsists even after such an agreement and is not given a quietus. 2. The court held that the agreement fell within the scope of the Act and that non-compliance with the provisions of S. 10-A would vitiate the arbitration and the award. The court relied on the Full Bench decision in R. K. Steels v. Their Workmen, which held that an agreement to refer an industrial dispute to arbitration outside S. 10-A would be very doubtful whether private agreement in respect of industrial disputes contracting out of the statutory provisions of S. 10-A would be permissible at all in law. 3. The court held that the petitioners, as persons affected by the award, had the right to challenge it before the court. The court stated that the petitioners were "the persons affected" and that it could not deny them the right to invoke the writ jurisdiction of the court if there was a warrant for it, impeaching the award of the Commissioner.

Final Decision: The court dismissed the writ appeals and upheld the decision of the single judge, which had remitted the matter back to the Commissioner for him to dispose of the matter afresh and in accordance with law.