W. P. No. 2144 of 1988

13th February, 1995

Petitioner Counsel: Sanjay Singhvi, Ms. Sanober Keshwaar
Respondent Counsel: V. P. Malvankar, J. P. Cama, M/s Crawford Bayley and Co.

JUDGMENT

JUDGMENT :- This Writ Petition arises under Articles 226 and 227 of the Constitution of India and is directed against an Award of the Second Labour Court, Thane, dated 9th July, 1987 made in reference (IDA) No. 167 of 1982 under the provisions of section 10(1)(c) read with section 12(5) of the Industrial Disputes Act, 1947 (hereinafter referred to as "the Act").

2. The petitioner is a registered trade union acting on behalf of 25 workmen of the Second Respondent Company, which was engaged in thebusiness of manufacture of synthetic fibres at Thane. At the material time, the Second Respondent employed about 600 workmen in its factory. There were disputes between the parties, which culminated in dismissal of 25 workmen employed by the Second Respondent. The workmen were dismissed on different dates between 29th November, 1981 to 31st January, 1982. The petitioner demanded reinstatement of the 25 workmen dismissed from service, by sending demand letters during the period 2nd December, 1981 to 1st March, 1982. These demands for reinstatement of the dismissed workmen did not produce any result. Consequently, by a letter dated 15th March, 1982 addressed to the Assistant Commissioner of Labour, the Union called upon the First Respondent-Appropriate Government to process the demand under the provisions of the Act, so that relief could be obtained by them. Conciliation proceedings took place and ended in failure. By an Order of Reference dated 8th October, 1982, the Appropriate Government referred to the Labour Court the demand for reinstatement of the 25 concerned workmen. The details of the demand are described in the Schedule to the Order of Reference. Since a material controversy has arisen as to the exact nature of the dispute before the Labour Court, it would be worthwhile reproducing the material portion of the order of reference :-

"INDUSTRIAL DISPUTES ACT, 1947.

No. DY.CL/THN/AJD/2K/W-113(82). Whereas the Government of Maharashtra in the Industries, Energy and Labour Department by its Notification No. IDA/1379(ii)/Lab-9, dated 20th April, 1979 and in supersession of Government Notification, Industries, Energy and Labour Department No. IDA/1379/12752/Lab-2, dated 30th March 1976 has directed in exercise of the powers conferred on it by section 39 of the Industrial Disputes Act, 1947 (XIV of 1947) that the powers exercisable by it under sub-section (1) of section 10 and sub-section (5) of section 12 of the said Act shall in relation to industrial disputes relating to the matter specified in item 3 of the Second Schedule and the matter so far as it concerns retrenchment in item 10 of the Third Schedule to the said Act, provided the matter concerns retrenchment of 10 or less than 10 workmen, be exercisable also by the Deputy Commissioner of Labour, Thane;

And Whereas, the Deputy Commissioner of Labour, Thane has considered the report submitted by the Conciliation Officer, under sub-section (4) of section 12 of the Industrial Disputes Act, 1947 (XIV of 1947) in respect of the dispute between M/s Wellman (Hindustan) Pvt. Ltd., Kolshet Road, Thane and the workmen employed under them/it, over the demand mentioned in the Schedule appended hereto;

And Whereas the Deputy Commissioner of Labour, Thane after considering the aforesaid report is satisfied that there is a case for reference of the dispute to a Labour Court;

Now, therefore, in exercise of the powers conferred by clause (c) of sub-section (1) of section 10 read with sub-section (5) of section 12 of the Industrial Disputes Act, 1947, as delegated in the manner aforesaid, the Deputy Commissioner of Labour, Thane, is pleased to refer the said dispute for adjudication to the Labour Court at Thane consisting of Shri S. V. R. Naida constituted under Government Notification, Industries, Energy and Labour Department No. IDA-1181/6196/Lab-9, dated 12-4-1982."

(The Schedule to the Order of Reference is not reproduced.)

3. Before the Labour Court, the Second Respondent employer raised two preliminary objections as to tenability of reference and requested the Labour Court to try the preliminary objections in the first instance. By an Order dated 19th March, 1987, the Labour Court overruled the prayer made by the Petitioner that all issues arising in the Reference be tried together. The Labour Court also directed the petitioner to cross-examine the witnesses of the employer and thereafter to examine any witness on their behalf for rebuttal on the preliminary issue. The two preliminary objections as to the maintainability of the Reference have been reproduced by the Labour Court in paragraph 2 of its Award (page 94 of the Petition). While the employer examined one witness in support of the factual aspects of the preliminary objections, the Petitioner did not lead any oral evidence. The Labour Court heard the parties and, accepting both the preliminary objections, came to the conclusion by the impugned order that the Reference was bad in law and deserved to he rejected on the technical grounds urged by the Second Respondent. Hence, this Writ Petition.

4. In the first place, it appears to me that the Labour Court erred in not acceding to the prayer of the petitioner that all issues be tried and decided by a common Award. Time and again, judgments of High Courts and the Supreme Court have cautioned against deciding matters only on legal objection as to maintainability, without application of mind to the merits of the demand referred for adjudication. It appears that the oft-repeated caveat fell on deaf ears, as far as the learned Judge of the Labour Court was concerned.

5. The objections raised, though couched in somewhat obtuse language, really are :

(a) The petitioner has no locus standi to raise the industrial dispute on behalf of all the workmen employed in the Respondent-Company, because the workmen had resigned from the Petitioner-Union and entered into settlements on other issues. Thus, the Petitioner-Union did not represent any workman employed in the establishment of the Second Respondent and, therefore, was incompetent to espouse the case of the 25 dismissed workmen. Consequently, the demand made by the Petitioner on behalf of the 25 dismissed workmen did not amount to an 'industrial dispute' within the meaning of section 2(k) of the Act.

(b) Even if the Union had a representative character to represent the workmen of the Second Respondent establishment when the demand was made, since the demand was not supported by a resolution of the workmen employed in the establishment, the demand did not partake the characteristics of an 'industrial dispute' and, therefore, the Reference was not maintainable.

These, in substance, are the legal contentions raised in paragraphs 2 and 3 of the Written Statement of the Second Respondent, which have been reproduced in paragraph 2 of the impugned order.

6. In my view, both the objections were thoroughly misconceived as shall be seen later. It is somewhat surprising that the learned Judge failed to take notice of the drastic change brought about in the legal position as a result of the insertion of section 2A in the Act by Act XXXV of 1965.

7. The objection which could be raised against a reference of an industrial dispute is that what is referred for adjudication to an industrial adjudicator is not, in fact, an "industrial dispute", within the meaning of the definition in section 2(k) of the Act. Section 2(k) of the Act defines the expression "industrial dispute" as :

"2(k) "industrial dispute" means any dispute or difference between employer and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person;"

This section has been the subject-matter of interpretation in a catena of decisions of the Supreme Court and the crystallised legal position was that, unless a substantial section of the workmen of an industrial establishment espoused or supported the cause made out by one or a few individual workmen of an industrial establishment, the dispute would continue to retain its character as an individual dispute and would not amount to an "industrial dispute" within the meaning of section 2(k) of the Act. In other words, a workman, who claimed relief for himself, or a few workmen, who individually claimed relief for themselves, had no remedy under the Act, unless their cause was espoused by a substantial section of other workmen of the same industrial establishment. There were two known methods of such espousal - one, by a collective demand made by a substantial section of the workmen and the other was espousal of the individual causes by a trade union representing a substantial section of the workmen of the industrial establishment. In the absence of either, Courts had uniformly taken the view that the dispute was an individual dispute and did not attain the character of an 'industrial dispute' so as to give jurisdiction to the appropriate Government to make a reference for adjudication. [See in this connection the Locus Classicus of the Supreme Court in Bombay Union of Journalists and others vs. The "Hindu", Bombay and another, 1961 II LLJ 436.]

8. The above position in law resulted in severe hardship to workmen, who, for a variety of reasons, found themselves unable to persuade a union in their industrial establishment to espouse their causes. Taking notice of such hardship, Parliament stepped in with Amending Act XXXV of 1965, by which section 2A was specifically inserted on the statute book. Section 2A in terms was intended to get over the difficulty and hardship to workmen caused by the rigid stratification of law resulting from the consistent interpretation of section 2(k) of the Act defining the expression "industrial dispute". Consistent with this intention, Parliament provided a narrow exception to the general definition of "industrial dispute" in section 2(k) of the Act. With regard to discharge, dismissal, retrenchment or termination of service of an individual workman, whenever a dispute or difference arises between the said workman and his employer in connection with such discharge, dismissal, retrenchment or termination of service, section 2A, by a fiction of law, provides that such a dispute shall be deemed to be an industrial dispute, notwithstanding that no other workmen nor any union of workmen is a party to the said dispute. As a result of the legal fiction introduced by section 2A, any dispute raised by or on behalf of an individual workman amounts to an industrial dispute only if it pertains to his discharge, dismissal, retrenchment or otherwise removal from service, even if it is not espoused by other workmen employed in the industrial establishment, collectively or through a trade union.

9. Section 10(1)(c) of the Act empowers the appropriate Government, if it is of opinion that any industrial dispute exists or is apprehended, to refer, by an order in writing, the dispute, inter alia, to the Labour Court for adjudication, if the dispute relates to any matter specified in the Second Schedule. The exercise of power of reference is not made conditional upon anything other than the opinion of the appropriate Government as to the 'existence' or 'apprehension' of an "industrial dispute". If, by whatever means, whatsoever, the Appropriate Government learns that there is a dispute or difference between a workman or a few workmen and the employer on the issue of dismissal, discharge, retrenchment or termination of service of such workman or workmen, and, if the Government forms an opinion that such a dispute exists or is apprehended, then the Government has power under section 10(1)(c) to refer such an industrial dispute for adjudication to the Labour Court. This is the position in law after introduction of section 2A in the Act with effect from 1st December, 1965.

10. In my view, the Labour Court entirely lost sight of this legal perspective and misdirected itself into accepting the two preliminary objections to the maintainability of the reference. The reference was made on 8th October, 1982, on which date, the provisions of section 2A of the Act were very much on the statute book and, in answering the issue of maintainability, the Labour Court was bound to consider the drastic charge in the concept of "industrial dispute", brought about by the insertion of section 2A in the Act. In my view, the Labour Court wholly ignored the change brought about by the Legislature and blindly followed the law which existed prior to the insertion of section 2A in the Act.

11. The learned counsel for the Second Respondent very strenuously sought to support the impugned Award. In the first place, he contends that, notwithstanding the introduction of section 2A of the Act, the law laid down by the Supreme Court in Bombay Union of Journalists (supra) still holds the field. It is not possible to accept this contention. In fact, three judgments of Division Benches of three High Courts, including this Court, have specifically considered this view and negatived it. In Alguram vs. State of Punjab and others, 1977 II LLJ 207, Justice Chinnappa Reddy (as he then was), speaking for the Division Bench of the Punjab and Haryana High Court, succinctly explains the law (in paragraph 6) thus :-

"Before the Industrial Disputes Act was amended by the introduction of section 2A by Act XXXV of 1965 the Courts had taken the view that a dispute between an individual workman and the management would not be an industrial dispute unless it was espoused by the other workmen. Since it was not an industrial dispute, it was held that it could not be referred to an Industrial Tribunal for adjudication. To overcome this difficulty, at least to the extent of termination of the services of an individual workman, the Industrial Disputes Act was amended in 1965 by introduction of section 2A which runs as follows :" (Emphasis supplied)

In the said case, a learned Single Judge of the Punjab and Haryana High Court had been persuaded to the view that a dispute, which had been espoused by the union, would not amount to an industrial dispute within the purview of section 2A of the Act. Overruling the said view, the Division Bench observed :

"... The view of the learned Single Judge was that the dispute did not fall within section 2A as it had been espoused by the union. The language of section 2A does not appear to support the conclusion of the learned Single Judge. The employer had terminated the services of an individual workman. There was a dispute between the workman and the employer in connection with the termination of services, though a notice of demand was issued not by the workman himself, but by the union, apparently on his behalf. The espousal by the union of the dispute between the workman and the employer would not take it out of section 2A merely on that account. The espousal by the other workmen may also make it a collective dispute, but it does not on that account cease to be a dispute between the individual workman and the management. What section 2A really means is that a dispute between an individual workman and the management in regard to the termination of the services of the workman shall be deemed to be an industrial dispute, whether or not other workmen join the dispute. It does not mean that so soon as other workmen join the dispute it goes out of the purview of section 2A." (Emphasis supplied.)

It was also held in this case that, merely because a dispute was not raised in express terms before the management of the employer, it could not be held that there was no dispute or that the reference was non est.

12. In The Management of Katkona Colliery Western Coalfields Ltd. vs. The Presiding Officer, Central Government Industrial Tribunal cum Labour Court, Jabalpur and others, 1978 LIC 1531, a Division Bench of the Madhya Pradesh High Court also had occasion to consider the question whether a dispute confined to an individual could become an industrial dispute, even if it was not espoused by sufficient number of workmen of an industrial establishment. A subsidiary objection, which was also raised was that there was no formal demand of the management with regard to reinstatement of the concerned workmen and, therefore, the reference was invalid. After a survey of the legislative change brought about as a result of the introduction of section 2A by Act XXXV of 1965, the Division Bench pointed out that section 2A was introduced into the statute precisely to get over the difficulties of a workman whose services were dismissed, discharged or retrenched or otherwise terminated, whose case was not espoused by sufficient number of workmen of an industrial establishment and had no remedy in law earlier. The effect of the introduction of section 2A is explained by the Division Bench of Madhya Pradesh High Court in its judgment (in paragraph 3) as under :

"The effect of section 2A is that an individual workman who was discharged, dismissed or retrenched or whose services were otherwise terminated can be given relief without its being necessary for the relationship between the employer and the whole body of employees being attracted to that dispute and the dispute becoming a generalised one between labour on the one hand and the employer on the other : See Chemicals and Fibres of India vs. D. G. Bhoir, AIR 1975 SC 1660 at p. 1662 = 1975 LIC 1199 at p. 1201 and Ruston and Hornsby (I) Ltd. vs. T. B. Kadam, AIR 1975 SC 2025 at p. 2029 = 1975 LIC 1455 at p. 1459. An individual dispute relating to discharge, dismissal, retrenchment or termination of a workman arises immediately the workman is discharged, dismissed, retrenched or terminated without his consent or in face of his opposition. This individual dispute because of the legislative fiat contained in section 2A becomes an industrial dispute. It is not necessary in such cases to make a demand on the Management for making the dispute an industrial dispute. Nor it is now necessary that such a dispute should be sponsored by the trade union or a substantial number of the trade unions or a substantial number of workmen." (Emphasis supplied)

The Division Bench of the Madhya Pradesh High Court, therefore, had no difficulty in rejecting both the preliminary objections as to tenability of the reference.

13. Finally, there is also the judgment of a Division Bench of our High Court in National Asphalt Products Constructions Co. vs. N. M. Kothari and others, 1977 Mh.L.J. 241 = 1977 II LLJ 377. This is also a case, in which a union representing 5 out of 31 workmen of the industrial establishment had espoused the demand for reinstatement of three dismissed employees. The Labour Court overruled the preliminary objection of the employer as to tenability of the reference and held that, in view of the amendment made in the Act by introduction of section 2A, the dispute would become an industrial dispute and, hence, the reference was tenable. The Court pointed out that, even if the union represented 5 out of the 31 employees in the industrial establishment, that would be a sufficiently substantial number to give a collective character to the dispute even on the footing that the dispute was not supported by any of the other workmen. The Court took the view that, in any event, the dispute would be an industrial dispute within the meaning of section 2A of the Act and, therefore, the reference was tenable. The Court emphasised that the definition of "industrial dispute", under section 2(k) as it stood earlier, resulted in hardship to workmen whose cases were not espoused by other workmen in the establishment, and, therefore, in cases of disputes of individual workmen arising out of termination of their services, Parliament had thought it necessary to make provision for raising of industrial dispute by individual workmen, even if they were not supported by other workmen, by introduction of section 2A. It was also pointed out by the Division Bench that section 2A operated within the narrow sphere of a dispute pertaining to termination of service and its effect was to widen the scope of the definition "industrial dispute" given in section 2(k) of the Act only in connection with a dispute or difference arising from the termination of service of an individual workman. The Division Bench of our High Court concluded by observing :

"Therefore, whether the dispute referred to in the order of reference is an industrial dispute within the meaning of clause (k) of section 2 or section 2A of the said Act, is of no consequence so far as the power of the Labour Court to adjudicate the same in service of workmen is concerned. In one case it will be the workmen of an employer collectively who will be a party to the dispute and in the other case, it will be the individual workman or workmen concerned. So long as the dispute is one arising out of the termination of service of an employee in one of the various manners, it will constitute an industrial dispute capable of being referred to adjudication under section 10 of the said Act." (Emphasis supplied)

In view of these authoritative clear pronouncements of law, including those of our own Division Bench, I have no hesitation in rejecting the contention of Mr. Cama that what was referred was not an industrial dispute.

14. Mr. Cama, then, very ingeniously shifted his line of attack and contended that the dispute, which had been raised by the petitioner-union on behalf of the dismissed workmen concerned in the reference was invalid, because it had not been supported by a resolution of the Executive Committee of the petitioner-union. Obviously, this is a mixed question of fact and law and, in my view, since such a question was not so raised before the Labour Court, it cannot be permitted to be raised for the first time in this Writ Petition. Mr. Cama contends that the objection raised in paragraph 3 of the Written Statement means what he is attempting to contend before me now. I am unable to agree. The contention in paragraph 3 (which has been quoted in paragraph 2 of the impugned award) merely means that even if the union was assumed to have had a representative character when the demand was made, since the demand was not supported by a resolution of the workmen employed in the establishment of the Second Respondent, it must be held to he bad. In my reading of the objection, the objection was not that the demand was invalid, because of failure of the Petitioner-Union to comply with its own constitution, bye-laws or other rules of internal management. The objection was that there was no resolution of the workmen employed in the establishment of the Second Respondent supporting such a demand. In any event, the discussion of this objection by the Labour Court in its impugned award also suggests that this was the only manner in which the objection was understood by it. For a moment, if we were to construe the latter part of the objection raised in paragraph 3 of the Written Statement as an objection regarding the failure of the Petitioner-union to get a resolution of its Executive Committee passed for making a demand for reinstatement on behalf of the workmen in question. I am of the view that it was a question of internal management of the Union and it was not permissible for the employer to question the same, particularly in view of the fact that, throughout the conciliation proceedings, during the proceedings before the Labour Court and in this Court also, the Union has admittedly acted for and on behalf of the workmen in the factory. The conduct of the union in pursuing the demand from beginning to the end does not suggest that the union was not interested in pursuing the demand. In any event, since the appropriate Government had been apprised of the fact that dispute had arisen between the Second Respondent-employer and 25 of the dismissed workmen in connection with the termination of their services, that itself would give jurisdiction to the appropriate Government to make the reference under section 10(1)(c) of the Act with nothing more. I am, therefore, of the view that the objection, obviously a hypertechnical one, was intended to delay trial of the merits of the case. It is unfortunate that despite repeated caveats by the High Courts and the Supreme Court that industrial adjudicators should be slow to dispose of references on preliminary objections, the Labour Court has fallen into the error of doing what it was advised against, by the impugned award.

15. Mr. Cama sought to derive support for his argument from the judgment of the Supreme Court in Workmen of Indian Express Newspaper Pvt. Ltd. vs. The Management of Indian Express Newspaper Pvt. Ltd., AIR 1970 SC 737 and the locus classicus on the subject, Bombay Union of Journalists and others vs. The "Hindu", Bombay and another (supra). In my view, neither of these judgments helps in supporting the contention advanced on behalf of the Second Respondent, as both judgments dealt with situations prior to the introduction of section 2A on the statute book and can only be read as laying down the position of law as it stood prior to the introduction of section 2A of the Act. It has already been noticed that section 2A of the Act was introduced with the express intention of making a departure from the law as it stood and that the position in law has drastically changed after the introduction of section 2A. The authorities, therefore, are of no avail to Mr. Cama.

16. In the result, the Writ Petition is allowed. The impugned order of the Labour Court is quashed and set aside. Reference (IDA) No. 167 of 1982 is remanded to the Second Labour Court, Thane. Since the workmen have not been given an opportunity of having the merits of their case tried from the year 1981, it is expected that the Labour Court shall hear and dispose of the reference with the expediency it demands and also be slow to entertain any fresh round of preliminary objections to the tenability of the reference or to short-circuit the reference without simultaneously trying the merits of the case. The Second Respondent shall pay the costs of this Writ Petition fixed at Rs 500/-.

17. Rule made absolute accordingly.

Petition allowed.