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Case Number

Writ Petition No. 1637 of 2003

Advocates

Sri K.K Singhvi and Sri Susheel Mahadeshwar.
1.— Sri C.U Singh and Sri J. Saluja instructed by M.V Kini and Co.
3 and 4.— Sri Suresh Kumar and Sri D.A Dube.

Judges

Sri F.I Rebello
Sri S.R Sathe, JJ.

Acts

S. 12(3) read with S. 18(3) of the Industrial Disputes Act
Ss. 12(3) and 18(3) of the Industrial Disputes Act, 1947.
S. 12(5) of the Industrial Disputes Act, 1947.8A.

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Smart Summary

Structured Summary of the Legal Opinion (Rebello, J.)

Factual and Procedural Background

The petitioner-union sought to represent workers employed in the canteen known as the Dining Facilities Centre (DFC) at the Air India Building, Nariman Point, and challenged the Central Government's order dated 5 June 2003 which rejected their claim for a reference under the charter of demands served on respondent No. 1 (Air India).

Relevant prior steps and events recorded in the opinion:

Workmen previously represented by Bharatiya Kamgar Sena filed Writ Petition No. 96 of 1992 seeking (a) a direction treating the workmen as Air India employees and (b) wages equivalent to the lowest category of Air India employees. That petition was dismissed by a Division Bench on 11 February 1992.
Subsequently Bharatiya Kamgar Sena entered into a settlement with respondent No. 2 signed under S.12(3) read with S.18(3) of the Industrial Disputes Act. That settlement ran from 16 November 1992 to 15 November 1997 and revised pay-scales and benefits.
A later charter of demands included demand No.13 (proposal for absorption of DFC employees into Air India). A new settlement under Ss.12(3) and 18(3) was reached effective 11 November 1997 up to 31 December 2001 and to remain in force thereafter until terminated; in respect of demand No.13 the union agreed that other demands not covered by the settlement were withdrawn. The opinion states that the settlement continues in force.
Individual workmen filed Writ Petition No. 2733 of 2001 seeking referral of the dispute by the appropriate Government to an Industrial Tribunal (including the question whether the workers were direct and permanent employees of Air India). That petition was dismissed as withdrawn on 11 June 2002.
The petitioner-union raised a demand on respondent No.1 by letter dated 20 June 2002 and approached the Commissioner for Labour (Central) on 26 June 2002. A statement of justification was filed on 18 July 2002 describing the DFC and the workers' employment circumstances.
Respondent No.1's replies (including one dated 20 September 2002) emphasized that workers were appointed and governed by respondent No.2 / H.C.I, with recruitment, confirmations, wages and service conditions managed by H.C.I; it was also stated the DFC provided facilities through the Hotel Corporation of India to Air India and Indian Airlines employees.
The Conciliation Officer submitted a failure report dated 20 November 2002. Following that, the appropriate Government by order dated 5 June 2003 declined to make a reference, recording (in a Hindi order with a loose English translation annexed) that no dispute existed. That order is challenged in the present petition.

Legal Issues Presented

Whether this Court should interfere with the appropriate Government's order refusing to make a reference under S.12(5) of the Industrial Disputes Act, 1947 (i.e., whether judicial review is warranted of the administrative refusal to refer).
Whether, prima facie, an industrial dispute existed as to who was the employer of the DFC workers (specifically, whether the workers were direct/permanent employees of Air India) and the wages and benefits to which they were entitled.

Arguments of the Parties

Petitioner-Union's Arguments

The appropriate Government, having before it material indicating existence of an industrial dispute, could not have rejected the demand for reference; the matter should have been referred for adjudication.
There was sufficient documentary material on record to establish prima facie the relationship between the workers and respondent No.1 (Air India), and that the issue of employment ought to be decided on evidence by the Industrial Tribunal rather than being foreclosed by the appropriate Government.
Exhibits annexed to the petition showed respondent No.1 had issued various orders in respect of running the canteen and concerning employees, supporting the claim of a relationship with respondent No.1.
The appropriate Government purported in its order to hold that Hotel Corporation of India owns the DFC, which the petitioners submit was incorrect and not open to the appropriate Government to decide at the reference stage.

Respondent No.1's Arguments

The decision whether to make an order of reference is an administrative act based on the subjective satisfaction of the appropriate Government; the High Court in exercise of Articles 226/227 cannot ordinarily examine the reasons for refusal closely.
At most the Court could examine whether the Government ignored material or took irrelevant considerations into account, but not rehear the dispute as if it were judicial or quasi-judicial.
The demand concerning absorption into Air India had previously been raised by Bharatiya Kamgar Sena and was given up when the settlement was signed, so the present petitioner-union cannot revive that demand.
The settlement between respondent No.2 and its workmen remains in force; while a settlement remains in force, the subject-matter covered by it cannot constitute an industrial dispute for the purposes of a reference.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Secretary, Indian Tea Association v. Ajit Kumar Bar [2000 (2) L.L.N 25]	The opinion reproduces a concise summary: (1) the appropriate Government must satisfy itself that an industrial dispute exists before making a reference; (2) an order of reference is administrative (not judicial/quasi-judicial) and not subject to close canvassing by courts; (3) such orders are based on the subjective satisfaction of the Government; (4) courts may intervene where irrelevant or foreign materials were taken into account; and (5) a party may show that what was referred was not an industrial dispute.	The Court relied on these propositions to frame the scope of judicial review here: the appropriate Government had to be prima facie satisfied that an industrial dispute existed, but its subjective satisfaction in concluding there was no industrial dispute could not be readily interfered with absent evidence of consideration of irrelevant material or non-consideration of material.
Nedungadi Bank Ltd. v. K.P. Madhavankutty [2000 (2) L.L.N 21]	Observations about delay and the limited scope of judicial interference with administrative orders; administrative orders that do not consider statutory requirements or that travel outside them are subject to limited judicial review; High Court can consider questions of jurisdiction of a Labour Court.	The Court noted the respondent relied on this judgment to argue that delay may disentitle the petitioner to a reference; the Court accepted that the scope of interference is limited and that administrative orders can be judicially reviewable where they fail statutory requirements, but the petitioner sought to distinguish the case on facts.
National Engineering Industries Ltd. v. State of Rajasthan [1999 (4) L.L.N 1185]	The appropriate Government exercises power to refer disputes only if an industrial dispute exists or is apprehended; absence of an industrial dispute deprives the Government of power to make a reference.	The Court cited this principle to reinforce that the Government must be satisfied of the existence of an industrial dispute before making a reference and that, conversely, a finding of no industrial dispute can justify refusal to refer.

Court's Reasoning and Analysis

The Court structured its analysis around the settled law governing the appropriate Government's power to refer disputes. It accepted and reproduced the summary from the Apex Court in Indian Tea Association v. Ajit Kumar Bar, emphasizing:

The fundamental requirement that the appropriate Government must first satisfy itself, prima facie, that an industrial dispute exists or is apprehended before making a reference.
The order to refer or not to refer is an administrative order based on the Government's subjective satisfaction; courts are therefore restricted in their scrutiny and cannot treat such orders as judicial or quasi-judicial determinations.
Judicial intervention is permissible where the Government took into account irrelevant considerations or failed to consider material statutory requirements; otherwise review is limited.

Applying these principles to the facts, the Court examined the materials placed before the appropriate Government: prior litigation history (including Writ Petition No.96 of 1992 and the Division Bench's observations), the settlements arrived at between respondent No.2 and the workmen (one signed in 1992 and another effective from 11 November 1997 which remains in force), the abandonment of demand No.13 for absorption in Air India at the time of settlement, and the replies filed by respondent No.1 asserting that the workers' service conditions were governed by respondent No.2 / H.C.I.

The Court noted the Division Bench in the earlier writ had expressly declined to probe the materials but recorded that some materials gave counter-indication to the petitioners' assertions. The present Court did not reproduce any new factual findings contrary to the parties' material, but observed that the material before the appropriate Government justified a conclusion that there was no industrial dispute warranting a reference: settlements with respondent No.2, the fact that demand for absorption was given up, and other documentary material supported the subjective satisfaction of the Government that no industrial dispute existed.

In light of the limited scope of judicial review on an administrative refusal to refer, and given the material on record which the Government could properly consider, the Court concluded it was not open to interfere with the Government's subjective satisfaction that no industrial dispute existed.

Holding and Implications

Holding:

Petition dismissed.

The Court discharged the rule and ordered that there shall be no order as to costs. The direct effect of the decision is that the Central Government's order of 5 June 2003 declining to make a reference under the Industrial Disputes Act is upheld and will not be interfered with by this Court.

The opinion does not purport to lay down any novel legal precedent; it applies established principles on the limited scope of judicial interference with administrative orders refusing references and decides the matter on the basis of the material that was before the appropriate Government.

Rule discharged. There shall be no order as to costs. Petition dismissed.

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United Labour Union v. All India, Ltd., And Others

Rebello, J.:— Rule. Heard forthwith.

2. The petitioner-union, seeking to represent, the workers working in the canteen known as dining facilities center at Air India Building, nariman point, have challenged the order of the appropriate Government, i.e, Central Government, dated 5 June, 2003, rejecting their claim for reference in terms of the charter of demands served by them on respondent No. 1 management.

3. A few facts may be set out as they will be essential for the purpose of deciding the controversy. The workmen earlier represented by Bhartiya Kamgar Sena had filed a writ petition before this Court Bearing No. 96 of 1992 wherein they had sought the following reliefs:

(1) Direction to Air India to treat the workmen employed in the Dining Facilities center as their own workmen;

(2) Direction to pay the workmen the wages paid to the lowest category of employees in Air India.

When the petition came up for hearing a learned Division Bench of this Court by order, dated 11 February, 1992, was pleased to dismiss the petition. Subsequent to that judgment the Bharatiya Kamgar Sena on behalf of the workmen now represented by the petitioner-union entered into a settlement with respondent No. 2 which was signed under S. 12(3) read with S. 18(3) of the Industrial Disputes Act to be effective for a period of 5 years commencing from 16 November, 1992 and expiring on 15 November, 1997. By the said settlement the pay-scale was revised and some other benefits were granted to the workmen.

In the subsequent charter of demands served by the Bharatiya Kamgar Sena on the management of respondent No. 2, one of the demands as raised was demand No. 13 which read as under:

“Absorption of D.F.C Employees in Air India:

The D.F.C unit is fully subsidised by Air India and D.F.C is not treated by H.C.I, as separate unit. It also operates on ‘NO LOSS NO PROFIT’ BASIS. It is therefore demanded that the management should initiate dialogue with the Air India and explore the possibility of D.F.C employees getting absorbed in Air India.”

The charter of demand resulted in settlement under Ss. 12(3) and 18(3) of the Industrial Disputes Act, 1947. The settlement was for the period from 11 November, 1997 up to 31 December, 2001 and to remain in force thereafter until such time the same is terminated by either of the parties. In so far as demand No. 13 is concerned, the union agreed that other demands mentioned in the charter of demand other than those covered by the settlement are withdrawn and dropped.

The said settlements continues till date and has not been terminated.

4. The individual workmen then filed a petition being Writ Petition No. 2733 of 2001. By that petition the petitioners prayed, that the appropriate Government be directed to refer the industrial dispute as raised by them to the Industrial Tribunal. The dispute as raised by them included the following demands:

(1) Whether the workers are the direct and permanent employees of Air India.

(2) What are the wages and other benefits to which the workers are entitled to.

That petition was dismissed as withdrawn by order of 11 June, 2002.

5. The petitioner-union thereafter raised a demand on respondent No. 1 by letter of 20 June, 2002. The matter was thereafter taken up with the Commissioner for Labour (Central) by letter of 26 June, 2002. A statement of justification was filed on 18 July, 2002. In Para. 2 thereto, the petitioners set out that the workers are employed in the canteen maintained by the Air India for its employees at its head office at Air India Building, Nariman Point, Mumbai. The said canteen is known as the dining facilities center. The respondent No. 1 management filed their reply, setting out partly what is set out in the earlier part of this judgment and further setting out that the workers were all appointed by respondent No. 2 and were issued written appointment orders by H.C.I and were thereafter confirmed in writing on different dates by H.C.I It was also pointed out that the service conditions of the petitioners were at all times governed and regulated by H.C.I, alone. Recruitment, selection and appointments were made by H.C.I The wages/salary levels were fixed by H.C.I, in negotiations with the trade unions representing H.C.I's workmen. Leave applications were made to and granted by the H.C.I Employee loans' and advances were taken from the H.C.I Supervision and control was entirely exercised by the Managers of the H.C.I, and every other aspect of service and employment was governed by the H.C.I, in accordance with their Rules, Regulations and Standing Orders as applicable. In the additional reply filed on 20 September, 2002 it was set out that dining facility center at Air India Building, Nariman Point is extending dining facility provided by the Hotel Corporation of India to the employees of Air-India as well as Indian Airlines.

6. The Conciliation Officer by letter of November 20, 2002 submitted a failure report. In the failure report the Conciliation Officer has recorded that the respondent No. 1 had submitted that the respondent No. 2 is a subsidiary company of Air India. Consequent upon the submission of the failure report the appropriate Government by order of 5 June, 2003 declined to make reference. A loose English translation of the order which is in Hindi has been annexed. Apart from setting out some other things it is set out that there is no dispute in existence. It is this order which is the subject-matter of the present petition.

7. At the hearing of the petition on behalf of the petitioner it is contended that the appropriate Government considering that there was industrial dispute could not have rejected the demand for reference as made by the petitioners herein. It is further submitted that there was sufficient documentary evidence on record to establish the relationship between the workers represented by the petitioner union and respondent No. 1. The issue whether the workmen of the petitioner are the employees of the respondent No. 1 cannot be decided based on the earlier proceedings before this Court as that is an issue which can be decided on evidence by the Industrial Court and could not have been foreclosed by the appropriate Government. Learned counsel has taken us to the exhibits which are annexed to the petition which show that the respondent No. 1 had issued various orders in respect of running of the canteen as also in respect of the employees. It is also pointed out by the learned counsel for the petitioner that in the order itself, the appropriate Government has purported to hold that it is the Hotel Corporation of India which owns the dining facilities centre in Air India Building. It is pointed out that it is clearly incorrect, as it was not open to the appropriate Government to so hold.

On the other hand on behalf of the respondent No. 1 their learned counsel contends that the order of reference is an administrative order based on the subjective satisfaction of the appropriate Government. It is not open to this Court in exercise of its jurisdiction under Arts. 226 and 227 to go into the reasons for refusal. At the highest what could be examined was non-consideration of material. It was always open to the appropriate Government to consider prima facie whether there was an industrial dispute. It is then contended that the very issue was the subject-matter of a demand raised by the Bharatiya Kamgar Sena, the union representing the employees. At the time of signing of the settlement the demand was given up and as such it is not open to the petitioner-union to now raise the demand. Finally, it is contended that the settlement is in force and during the pendency of the settlement there can be no industrial dispute in respect of a subject-matter which is already covered by the settlement.

8. After having heard the learned counsel the question is whether this Court ought to interfere with the order of the appropriate Government made under S. 12(5) of the Industrial Disputes Act, 1947.

8A. The law in the matter of reference by the appropriate Government in our opinion is well settled and we may gainfully reproduce what has been set out by the Apex Court in the case of (Secretary, Indian Tea Association v. Ajit Kumar Bar), [2000 (2) L.L.N 25], in Para. 6, at page 28:

“This law on the point may briefly be summarized as follows:

(1) The appropriate Government would not be justified in making a reference under S. 10 of the Act without satisfying itself on the facts and circumstances brought to its notice that an industrial dispute exists or apprehended and if such a reference is made it is desirable wherever possible, for the Government to indicate the nature of dispute in the order of reference;

(2) The order of the appropriate Government making a reference under S. 10 of the Act is an administrative order and not a judicial or quasi-judicial one and the Court, therefore, cannot canvass the order of the reference closely to see if there was any material before the Government to support its conclusion, as if it was a judicial or quasi-judicial order;

(3) An order made by the appropriate Government under S. 10 of the Act being an administrative order no lis is involved, as such an order is made on the subjective satisfaction of the Government;

(4) If it appears from the reasons given that the appropriate Government took into account any consideration irrelevant or foreign material, the Court may in a given case consider the case for a writ of mandamus and;

(5) It would, however, be open to party to show that what was referred by the Government was not an industrial dispute within the meaning of the Act.”

Relying on the judgment of (Nedungadi Bank, Ltd. v. K.P Madhavankutty), [2000 (2) L.L.N 21], it is sought to be pointed out that long delay in making the demand by itself should disentitle the petitioner to any reference. Learned counsel for the petitioner sought to distinguish the said judgment. The reference in that case had been made after considerable delay. That was challenged. The Apex Court while examining the matter and the nature of interference by the Court has observed as under:

“An administrative order which does not take into consideration statutory requirements or travels outside that it is certainly subject to judicial review limited though it might be. High Court can exercise its powers under Art. 226 of the Constitution to consider the question of very jurisdiction of the Labour Court.”

It will be clear from the said observations that the nature and scope of the enquiry and the challenge to a reference is limited. We may now gainfully refer the judgment in the case of (National Engineering Industries Ltd. v. State of Rajasthan), [1999 (4) L.L.N 1185]. There also a reference made by the State of Rajasthan was challenged. While again considering the issue of interference in such a reference the Apex Court noted what the appropriate Government had to consider while making a reference. The Court observing as underpin Para. 26, at page 1199:

“…It is the existence of the industrial dispute which would clothe the appropriate Government with power to make the reference and the Industrial Tribunal to adjudicate it. If there is no industrial dispute in existence or apprehended appropriate Government lacks power to make any reference…

From the law as declared by the Apex Court, the question would be whether this Court should interfere with the order refusing to make a reference.

9. As pointed out earlier for the appropriate Government to make a reference there must prima facie be an industrial dispute in existence. In the instant case the dispute as raised by the workmen is as to who is their employer. We have earlier set out the material relied upon by the parties not only before the Conciliation Officer but also in the earlier proceedings before this Court as also the settlements. In fact while disposing of the Writ Petition No. 96 of 1992 the Division Bench of this Court had noted as under:

“Whether such materials are available to form a conclusion of that nature is to be examined by other appropriate authorities. In that view of the matter, we do not propose to probe into the materials which have now been produced before us. We may observe that some of them clearly give a counter indication to the statement and argument put forward by the counsel for the petitioner. For example, in the course of negotiations on behalf of the workmen, a parity has been claimed for the workers with those who have been employed by the first respondent Air India. This assumes that their employment is in an establishment other than one run by the Air India. Needless to add, it is not necessary to give a final verdict on the question, having regard to the contents and form of the declaration sought for in this writ petition.”

We have reproduced this not for the purpose of arriving at any conclusion, but to point out that it was the stand of the respondent No. 1 at the threshold that there was no relationship of employer and workmen between the petitioner and the respondent No. 1. The relation of employer and workmen de facto is between the workmen represented by petitioner and respondent No. 2. Settlements have been arrived at on behalf of these workmen with respondent No. 2, one of which is still in force.

Even a demand was made for absorption of these workmen in Air India. That demand which is reflected at serial No. 13 of the settlement was given up. It is no doubt true that there are a catena of judgments of the Apex Court which have taken the view that the appropriate Government cannot decide, if issues do arise, whether the dispute partakes of an industrial dispute. But considering the first proposition in the case of Ajit Kumar Barat, [2000 (2) L.L.N 25] (vide supra), that the appropriate Government must firstly satisfy itself that there is an industrial dispute. There was material placed before the appropriate Government to arrive at a decision whether there was an industrial dispute. Considering the fact that there are settlements between respondent No. 2 and its workmen now represented by the petitioner-union and as the last settlement is still in force, when the workmen gave up the demand for absorption with respondent No. 1 and the other material on record it will not be possible to interfere with the order of the appropriate Government. The subjective satisfaction based on which the respondent No. 3 held that there was no industrial dispute and consequently not a case for interference, cannot be interfered with.

10. In the light of that we do not find any merit in this petition. Rule discharged. There shall be no order as to costs.

Petition dismissed.

United Labour Union v. All India, Ltd., And Others

Structured Summary of the Legal Opinion (Rebello, J.)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Petitioner-Union's Arguments

Respondent No.1's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

United Labour Union v. All India, Ltd., And Others

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