2004 Supreme(SC) 292

2004(5) Supreme 202
Supreme Court of India
(From Bombay High Court)
Y.K. Sabharwal & Dr. AR. Lakshmanan, JJ.
Mukand Ltd. -Appellant
versus
Mukand Staff & Officers’ Association -Respondent
Civil Appeal No. 5601 of 2001
With
Civil Appeal Nos. 7340-7341 of 2001
Decided on 10-3-2004
Counsel for the Parties :
For the Appellant : Ashok H. Desai, P.K. Rele, Sr. Advocates, Hitesh Buch, Ms. Anima Kapadia, K.P.K. Nair, Ms. Indu Malhotra, Ms. Ruchi Khurana, Ms. Shilpi Srivastava, Ms. V. Deepa Advocates.
For the Respondent : K.K. Singhvi, Sr. Advocate, Sanjay Singhvi, B.N. Singhvi and Vinay Kumar Garg, Advocates.

Important point
The determination by an Industrial Tribunal on service conditions of employees who are not ‘workmen’ within the meaning of the Industrial Disputes Act, a question other than the one which statute directs it to decide, would be a decision not under the provisions of the Act, therefore liable to be set aside.

Headnote:Industrial Disputes Act, 1947-Sections 2(s), 12(3) and 18(3)-Industrial Disputes (Bombay) Rules, 1957-Rule 62-Jurisdiction of Industrial Tribunal to adjudicate upon service conditions of employees, who are not ‘workmen’-Order granting revision of service conditions of employees of a Company-Sustainability-Appellant Company concluded a settlement with respondent Association covering service conditions of all staff and officers-Subsequently, respondent Association served a Charter of Demands on the Company-Failure report submitted by Conciliation Officer-Government of Maharashtra referred the dispute for adjudication to Industrial Tribunal-Award of Tribunal-Challenged on ground of jurisdictional error in granting revision of service conditions of employees who are not ‘workmen’ under the Act-Reference being limited to the dispute between appellant Company and the ‘workmen’ employed by them-Whether Tribunal can adjudicate matters not within the purview of the dispute actually referred to it by the order of Reference-(No).

       Held : The dispute referred to by the order of Reference is only in respect of workmen employed by the appellant-Company. It is, therefore, clear that the Tribunal, being a creature of the Reference, cannot adjudicate matters not within the purview of the dispute actually referred to it by the order of Reference. In the facts and circumstance of the present case, the Tribunal could not have adjudicated the issues of the salaries of the employees who are not workmen under the Act nor could it have covered such employees by its award. Even assuming, without admitting, that the Reference covered the non-workmen, the Tribunal, acting within its jurisdiction under the Act, could not have adjudicated the dispute insofar as it related to the ‘non-workmen’. (Para 23)

       In the present case, the non-workmen are not necessary parties. The reference is complete, covering as it does “Mukund Ltd. and the workmen employed by them.” The award, in our opinion, can be made effective and enforceable in respect of the workmen after its infirmities are cured. It was submitted that in fact settlement of 1989, for instance, did not cover the employees in Grades 01 and 00 and yet, the same was implemen­ted by the parties thereto. The finding of the High Court that the `workmen’ and the `non-workmen’ belong to the same class, in our view, is erroneous. The question of class to which the employees belong is to be decided not on the basis of the Grades in which they are placed but on the basis of their duties, responsibilities and powers as laid down in Section 2(s) of the Act. (Para 32)

       The material that was placed before the Tribunal was not considered or discussed and that there was, as such, no adjudication by the Tribunal. The whole award of the Tribunal, in our view, is liable to be set aside on the ground of non-application of mind by the Tribunal to the material on record. In the first place, the Tribunal has no jurisdiction to entertain and decide a dispute which covered within its fold “persons who are not workmen”. That the material on record before the Tribunal as regards the comparable concerns was admittedly “sketchy” and incomplete as observed by the learned single Judge of the High Court and that the award based on such material could not have been sustained. In the instant case, the employer and the employees by their conduct in concluding settlements in the past could not create for, or confer upon, an adjudicating authority jurisdiction, where none existed, in respect of employees to whom the provisions of the Act are not applicable. This apart, the employer had not waived his right to raise the issue of the status of the employees under the Act in any of these settlements. The employer cannot held to have waived his rights regarding the issue of the status of the employees under the Act in the absence of any of the settlements concluded by them with their employees. The High Court has come to the conclusion that there are grave and fundamental errors, including the errors in assessing financial capacity, burden etc. in the award of the Tribunal. In the instant case, the Tribunal did not have the jurisdiction to adjudicate the present dispute inasmuch as it pertains to the conditions of service of non-workmen. The Division Bench has erred in holding that there is a community of interest between the workmen and the non-workmen and holding further that the workmen can raise a dispute regarding the service conditions of non-workmen. This reasoning, in the absence of any pleading regarding the community of interest, is fallacious. (Paras 49 and 50)

       The Tribunal, in this case, has exceeded its jurisdiction. It has embarked upon an enquiry against non-workmen and, therefore, the decision of the Tribunal is a non-compliance with the provisions of the Act. Therefore, the determination by a Tribunal on a question other than the one which Statute directs it to decide, would be a decision not under the provisions of the Act and, therefore, in exercise of its jurisdiction is liable to be set aside. (Para 51)

       The appellant-Management has a prima facie case on merits and the balance of convenience is entirely in their favour. We also hold that the employer and the employees by their conduct in concluding settlements in the past cannot create or confer upon an adjudicating authority jurisdiction where none existed in respect of employees to whom the provisions of the Act are not applicable. In the instant case, the employer had admittedly not waived their right to issue the status of the employees under the Act in any of the said settlements. The High Court, both the learned single Judge and of the Division Bench had stepped into the shoes of the adjudicating authority and virtually modified/altered the award in vital respects like basic linked variable D.A., D.A. fixed in forms of percentages of basic pay, service increments, gratuity and effective dates for increase in emoluments. (Para 95)

       During the pendency of the proceedings in this Court, supplementary affidavit was filed by the Vice President, Finance of the appellant-Company bringing to this Court’s notice certain crucial events that have occurred subsequent to the admission of the appeal, which have a vital bearing on the case. It is stated therein that the appellant-Company is in dire financial straits. (Para 100)

       In the circumstances of the case, we are of the opinion it is proper to remit the matter back to the Industrial Tribunal for adjudication according to law since there are grave and fundamental errors including errors in assessing financial capacity burden etc. in the award of the Tribunal. (Para 103)