1. There are three petitions workers' union of Spencer and Company, Limited, Express Newspapers Limited and the Swadesamitran Limited against the State of Madras under Article 226 of the Constitution of India for issue of a Writ of Mandamus directing the State of Madras to refer the dispute between the workers and the managements to a Tribunal under Section 10(1)(c) or 10(2) of the Industrial Disputes Act and prohibit under S. 10(3) the lock out of the employees effected by the management. The point for determination in all the writs is the same and it is not necessary to recount in detail the facts relating to each of these petitions. It is sufficient if some of the relevant facts are referred to with reference to one of these cases, since the outstanding features in each case are practically common. I would therefore deal with the petition which was argued first that is writ petition No. 41 of 1951, filed by the Spencer Workers' Union.

2. Regarding certain grievances of the workers mainly relating to wages, dearness allowance and bonus, the Union convened a meeting of the workers on 22nd September 1950 and formulated their demands to the company. On the 27 September 1950 they addressed a letter to the Secretary of the Spencer and Company, Limited, formulating their demands and intimating to the company that the office-bearers of the Union were authorised to conduct negotiations with the company with a view to arrive at an amicable settlement, a copy of which communication was sent to the Labour Officer, Madras. The company refused to concede any of the demands. On 16th January 1951 the Labour Officer issued a notice under Section 10(1) of the Industrial Disputes Act informing the Union that as an industrial dispute existed between the workers and the management of the company, the presence of the Union representative was necessary for effecting a speedy and amicable settlement of the same. The Labour Officer submitted his report on 25th January 1951 to the Secretary to Government development department, of the result of the Conciliation proceedings. The report discloses that agreement was reached on all the points except on three points, namely, wages, dearness allowance and leave facilities and that no decision was reached on the question of bonus. With reference to wages and scales of pay, the union offered to accept a minimum wage of Rs. 1-4-0 to all unskilled labourers, the maximum wages of the various categories being proportionately worked out by the management. But the management was not agreeable to concede this and the Labour Officer suggested whether the management would pay a minimum wage of Re 1-0-0 per day, which has been accepted as the living wage of the day; but the management could not consider any more enhancement. Similarly there was no agreement as regards dearness allowance and bonus. On 22nd February 1951, the Union made an application to the Government that the disputes may be referred for adjudication by a Tribunal under S. 10(2) of the Industrial Disputes Act. On the same day, the Union informed the company of the resolutions of the Union inviting the company for making a reference jointly with the Union to the Government to which the company replied by their letter of the 6th March 1951 stating that they are unable to make a joint application in respect of the matters, which, according to them, have been settled during the conciliation proceedings, and that as regards the three outstanding items, they will consider making a joint reference after a dissension with the representatives of the Union. The Commissioner of Labour intimated the Union by his letter dated 10th April 1951 that the company have offered to increase the dearness allowance of the workers at Rs. 30 per month and of the Clerical Staff at Rs. 35 per month, and that he would advise the Union to be satisfied with the enhanced dearness allowances and to drop the other demands. Apparently, the Union did not agree and gave Notice of strike on 9th May 1951. The company by its letter of the 6th June 1951 intimated that no increase can be granted in respect of the basic wages, dearness allowance and bonus and all workers who were absent without leave since 30th May 1951 were asked to show cause why an order of dismissal should not be passed against them. There is a further application by the Union to the Government dated 8th June 1951 asking for reference of the disputes to a tribunal under S. 10(2) of the Act. On 11th June 1951 the President of the Labour Union wrote to the company that at a meeting of the members of the Union, the advice of the Honourable the Chief Minister that the workers should return to work was accepted, since they were assured that the Government will ensure that there will be no victimisation of the employees and that they will take immediate steps to resolve the disputes between the workers and the management of the company and that the workers who are on strike will return for work on 12th June 1951. But the company put up a notice regretting its inability to re-engage all persons for duty on 12th June 1951 and stating that the workers should confirm that the strike was withdrawn unconditionally and the company will then put up a notice as to the names of the persons who would be re-engaged. With reference to the alleged assurance given by the Hon'ble the Chief Minister to the Government of Madras it is stated on behalf of the Government that the allegation regarding the assurances given by the Hon'ble Chief Minister is not correct, but that Hon'ble Chief Minister only advised the workers to call off the strike and informed them that if they wanted it, the matter would be looked into by the Labour Commissioner, and that so far as the question of victimisation is concerned, the Hon'ble the Chief Minister assured them that he would see that justice is done. The present petition was filed on 12th June 1951 and an order directing notice was made on the same day. On 13th June 1951 the Government informed the President of the Union that, under Section 10(2) of the Industrial Disputes Act, 1947, both the parties to the dispute will have to apply either jointly or separately for a reference of the dispute for adjudication and the Government cannot therefore take any action on the application made only by the Union.

3. The facts relating to the other two petitions are similar, though the formulation of the demands was made later than September 1950. In regard to the Express Newspapers Limited, the company was informed by the Commissioner of Labour by his communication dated 2nd June 1951 that the Government have asked him to see that the management of the Indian Express takes steps to increase the basic wages to Rs. 26 per mensem from July 1951 and in particular to see that the wages of 3 or 4 occupations, which are lower than those in other presses, are brought to the general salary level; and time was given till 15th July 1951 to inform him of the steps the company took to implement the recommendations. As regards the Swadesamitran Limited, the Government appear to have sent a similar communication with reference to the increase in wages.

4. The answer of the Government to these applications is mainly that the Government were not obliged to take any action on the application made by the petitioners unions, since there has been no application jointly or separately from both the parties, and that the petitions are also otherwise not maintainable. In regard to the petition by the workers of the Express Newspapers Limited and the Swadesamitran Limited, the Government, in their counter-affidavits, stated that there was no case to refer the disputes to adjudication at that stage, referring to the state of affairs in April 1951, when the Commissioner of Labour was asked to inform these two managements that steps must be taken for increase of the wages.

5. It is argued on behalf of the Government that there is no legal duty cast on them to refer an industrial dispute, if one exists or is apprehended under S. 10(1), but it is a power given to the Government, which it is open to them to exercise or not to exercise and the exercise or non-exercise of the power cannot be questioned in any Court. S. 10(1) states that if any industrial dispute exists or is apprehended, the appropriate Government may, by order in writing, refer the dispute to a Board for promoting settlement, or to a Court for inquiry, or to a Tribunal for adjudication; provided that where a dispute relates to a public utility service and a notice of strike under S. 22 has been given, the appropriate Government shall, unless it considers that the notice has been frivolously or vexatiously given or that it would be inexpedient so to do, make reference under this Sub-section notwithstanding that any other proceedings under this Act in respect of the dispute may have commenced.

6. It was sought to be contended on behalf of the petitioners that the disputes in these cases relate to public utility services; but I am not satisfied that the services concerned in these establishments come within the scope of the definition of “public utility service” under the Act.

7. The difference in the use of the words “may” in Clause (1) and “shall” in the proviso, is relied upon in support of the contention on behalf of the Government that whereas there is a duty cast upon the Government, if the dispute relates to a public utility services, to make a reference under S. 10(1) unless they consider that the notice of strike has been frivolously or vexatiously given or that it would be inexpedient so to do, in cases where there is an apprehension of “industrial dispute” or where an industrial dispute exists, the Government are not obliged to take notice of every such dispute or apprehension of such disputes and bound to make a reference. It is therefore for consideration whether in all cases where the existence of an industrial dispute is brought to the notice of the Government it is open to the Govt. to keep silent and not to take any action as to whether they would refer the dispute or not. It therefore becomes necessary to consider the scope of the power or duty of the Government conferred under S. 10(1), since the issue of a writ of mandamus would depend upon whether the Government under the Act are under an obligation to make a reference, when an industrial dispute exists, or whether it is only a power vested in the Government to refer or not at their will and pleasure.

8. To arrive at a satisfactory conclusion as to the position of the Government in the matter of making references under the Act, it is necessary to consider the scope and purpose of the Act. It will be seen that the Act was brought into existence, as the preamble makes it clear for the purpose of investigation and settlement of industrial disputes, and it cannot, therefore, be suggested that when an industrial dispute exists, no duty is cast upon the Government to investigate and effect a settlement of that dispute. The object of the Act, that is to investigate and settle disputes, is sought to be achieved by different means, by referring the dispute to a Board of Conciliation for promoting a settlement, by referring the matter relating to the dispute to a Court for inquiry, or placing the dispute before a tribunal for its adjudication. There are four authorities that are constituted under the Act, which are to be entrusted with the investigation and settlement of these disputes, they being conciliation officers, Boards of Conciliation, Courts of inquiry and tribunals. S. 12(1) provides for the intervention of the conciliation officers, the conciliation officer here being the Commissioner of Labour. When any industrial dispute exists or is apprehended, the conciliation officer may hold conciliation proceedings in the prescribed manner. He has to investigate the dispute without delay and if a settlement is arrived at he has to send a report to the appropriate Government together with a memorandum of settlement signed by the parties to the dispute. Under S. 12(4) if no such settlement is arrived at, the conciliation officer shall, as soon as practicable after the close of the investigation send to the Government a full report setting forth the steps taken by him for ascertaining the facts and circumstances relating to the dispute and for bringing about a settlement thereof, together with a full statement of such facts and circumstances, and the reasons on account of which, in his opinion, a settlement could not be arrived at. Under S. 12(5) if, on a consideration of the report referred to in sub-section (4) where the conciliation officer has failed to effect a settlement, the Government is satisfied that there is a case for reference to a Board of Tribunal, it may make such reference. Where the appropriate Government does not make such a reference it shall record and communicate to the parties concerned its reasons therefor. A period of 14 days is also provided for submission of the report by the conciliation officer. S. 13 deals with references to a Board of Conciliation. Under that provision, if a dispute had been referred to a Board, it shall proceed with the investigation, and settlement just like a conciliation officer, and if no such settlement is arrived at, the Board also has to submit a report together with reasons on account of which a settlement could not be arrived at. It is provided under S. 13(4) that, if on the receipt of such a report in respect of a dispute relating to public utility service, the Government does not make a reference to a tribunal under S. 10, it shall record and communicate to the parties concerned its reasons therefor.

9. It will be seen from an examination of Ss. 12 and 13 that when it comes to the notice of the Government that an industrial dispute exists, after a certain stage, during which efforts at conciliation are provided and gone through, there is a point of time at which the Government have to act by exercising the power or authority vested in them under S. 10(1) as to making a reference of the Industrial dispute. On the report of the conciliation officer of the failure of the conciliation proceedings, under S. 12(5), the Government, if satisfied that there is a case for reference, have to make such reference. If they are not so satisfied, a duty is cast on the Government to record and communicate to the parties concerned their reasons for not making the reference. Similarly under S. 13(4) with reference to a public utility service, on the receipt of a report from the Board of Conciliation that conciliation has failed, the Government have to record and communicate to the parties the reasons for not referring to adjudication by a tribunal under S. 10.

10. Taking the scheme of the Act and the policy behind it, the object of the Act being to investigate and settle disputes, initially conciliation proceedings are tried either by the conciliation officer himself taking notice of an industrial dispute or on apprehension of it, or the Government referring the dispute to a Board of conciliation, and it is only after attempts at conciliation have proved abortive, that further steps as to the resolution of the differences have to be considered, such steps being referring to a Court for enquiry, or referring the dispute for adjudication by a tribunal. It is at that stage that Government should exercise the authority or power, by whatever term it may be called, which is vested in them under S. 10(1). The very circumstance that the Government, in case they do not make a reference should record and communicate their reasons, as provided for in Ss. 12 and 13, is inconsistent with any idea of absolute direction or power vested in the Government to either make a reference or not but on the other hand, implies an obligation to exercise the power. But the Government in exercising the power have a discretion to either refer or refuse to refer, when in the latter case reasons must be recorded and given. If the argument of the learned Advocate-General is to be accepted that the Government are the absolute arbiters as to whether an industrial dispute, if one exists, has to be referred or not, the Government would not be called upon to give any reasons for not making a reference, which the Government are bound to do under the circumstances stated in Ss. 12 and 13. I therefore consider that, though the use of the word “may” in S. 10(1), would lend support to the argument on behalf of the Government, that a power is given to the Government, the other provisions of the Act, in particular Ss. 12 and 13, rule out the contention that the Government are under no legal obligation under any circumstances to make a reference if an industrial dispute exists. S. 10(1) confers a general power on the Government to act ‘suo motu’, but it does not exclude the obligation of the Government to act under certain circumstances. If an industrial dispute exists and is brought to the notice of the Government by either of the parties or by any other persons interested, there is a duty under the Act on Government not to ignore but to adopt the procedure laid down under the Act, primarily to explore possibilities of settlement through conciliation officers and Boards and then decide as to the course to be adopted as to whether a reference should be made to a Tribunal for adjudication and if the Government are satisfied that there is no case for reference, they should record the reasons for not making a reference and intimate to the parties about the same.

11. Reliance is placed on behalf of the respondents on the decision of the House of Lords in ‘Julius v. Lord Bishop of Oxford’, 1880-5 AC 214, and it is argued that under S. 10(1) the power that is conferred is permissive and enabling and no legal duty is imposed on the Government to make a reference. This decision considered the 3rd section of the Church Discipline Act (3 and 4 Vict. Ch 86) which provided that in every case of any clerk in holy orders who may be charged with any offence against the Laws Ecclesiastical, or concerning whom there may exist scandal or evil report as having offended against the said laws, it shall be lawful for the bishop of the diocese within which the offence is alleged or reported to have been committed, on the application of any party complaining thereof, or if he shall think fit, of his own mere motion, to issue a commission under his hand and seal to certain persons for the purpose of maxing inquiry as to the grounds of such charge or report, and it was held that this section gave the ??? complete discretion to issue or decline to issue such commission. The words which were considered in that case were “it snail be lawful” and Earl Cairns, L.C, in considering those words observes as follows:

“The words ‘it shall be lawful’ are not equivocal. They are plain and unambiguous. They are words merely making that legal and possible which there would otherwise be no right or authority to do. They confer a faculty or power, and they do not of themselves do more than confer a faculty or power. But there may be something in the nature of the thing empowered to be done, something in the object for which it is to be done, something in the conditions under which it is to be done, something in the title of the person or persons for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person in whom the power is reposed to exercise that power when called upon to do so.”

12. The cases bearing on the subject are referred to and in dealing with the decision in ‘Rwg v. Tithe Commissioners’, (1848-1849) 14 QB 459, the opinion of the Court given by Coleridge, J., is extracted and it is as follows:

“The words undoubtedly are only empowering, but it has been so often decided as to have become an axiom; that in public statutes words only directory, permissory, or enabling, may have a compulsory force where the thing to be done is for the public benefit or in advancement of public justice”.

13. It may therefore be that even though the words, as in this case “may” may be enabling or discretionary, under certain circumstances, might have a compulsory force.

14. Lord Penzance in his judgment says as follows:

“The words ‘it shall be lawful’ are distinctly words of permission only — they are enabling and empowering words. They confer a legislative right and power on the individual named to do a particular thing, and the true question is not whether they mean something different, but whether regard being had to the person so enabled to the subject matter, to the general objects of the statute, and to the person or class of persons for whose benefit the power may be intended to have been conferred they do, or do not, create a duty in the person on whom it is conferred, to exercise it”.

15. Lord Penzance cites with approval the meaning to be attached to the words “it shall be lawful” given by Lord Chief Justice Jervis in ‘Reg v. York and North Midland Railway’, (1853) 1 E1 and B1. 858 at p. 861,

“that such words as ‘it shall be lawful’ were to be understood as permissive only, unless some ‘absurdity or injustice’ would follow from giving them that, their natural meaning”.

16. Lord Penzance, after referring the decisions on the subject, observes as follows at page 231:

“In all these instances the Courts decided that the power conferred was one which was intended by the legislature to be exercised; and that although the statute in terms had only conferred a power, the circumstances were such as to create a duty. In other words, the conclusion arrived at by the Courts in these cases was this — that regard being had to the subject-matter — to the position and character of the person empowered — to the general objects of the statute — and above all, to the position and rights of the person, or class of persons for whose benefit the power was conferred, the exercise of any discretion by the person empowered could not have been intended.”

17. Having regard to these principles, It has to be considered whether by the use or the word “may” in S. 10(1), the Government were given only an ??? and permissive power and not couped with a duty to exercise it. The object of the Act is to resolve industrial disputes. It is intended for the benefit of the persons, who are parties to the dispute, either the workers or the management to have their grievances redressed and differences resolved in order that there may be smooth and successful working of the particular industry in which they are engaged with profit both to the employer and employees. The class of persons that are to be benefited by the statute are the worisers and the management, and indirectly it may also be said that the public will be benefited by the smooth relations that should exist in any industry between, labour and capital, which will tend to increase the economic prosperity of the country, in that way it may be said that the public will also be benefited by a proper, timely and effective settlement of an industrial dispute. It cannot therefore be contended that this power is conferred for the sole and exclusive benefit of the Government.

18. Reliance was placed on the Full Bench decision of the Patna High Court in ‘Bagaram Tulpule v. State Of Bihar*’, AIR (37) 1950 Pat 387, where with reference to a decision of the Government not to refer a dispute to a Board or Tribunal in respect of a public utility service as the Government considered it was inexpedient to do so, it was held that a writ of mandamus would not lie. Unlike in the present case, the conciliation officer having attempted at a settlement and failed, he intimated the failure to the Government and the Government informed the union that they had decided not to refer to a Board or Tribunal as they considered it inexpedient to do so. It was only necessary in that case to confine attention to the proviso to S. 10(1), where in respect of public utility companies, unless the Government consider it among others inexpedient to refer, they will be obliged to make a reference, and it was held that where the Government have been given a discretion and have exercised that discretion, it is not open to the Court to interfere.

19. The result is taking the general scheme and the substantial object of the Act, the persons in whose interests and for whose benefits it was promulgated, though the Government has been conferred this power, the circumstances are such that they create a duty in the Government, the duty consisting in either making a reference under certain circumstances, or declining to make a reference, in which case, they are obliged to give reasons for such refusal. The use of the word “may” and not “shall” in such matters is in no way conclusive, as observed by McCardie J. in ‘Rex v. Marshland Smeeth and Pen District Commrs.’, 1920-1 K.B 155.

20. The question of reference by Government may be in discretion of the Government; but there; is an imperative obligation on the Government to(exercise that discretion and not to refuge to exercise it, and a refusal to refer could only be for cogent and justifiable reasons, reasons which would, stand the scrutiny of any reasonable mind, reasons; which are not fanciful, unjust or frivolous, or based on extraneous considerations, and such discretion means, as pointed out by Lord Halsbury L.C in ‘Sharpe v. Wakefield’, (1891) AC 173 at p. 179:

“When it is said that something is to be done within the discretion of the authorities that something is to be done according to rules of reason and justice, not according to private opinion; according to law, and not humour. It is to be no arbitrary, vague and fanciful, but legal and regular. And it must be exercised within the limit to which an honest man competent to the discharge of his office ought to confine himself”.

21. There is nothing in this imposition of the imperative obligation to exercise the discretion suggestive of any injustice or hardship or prejudice to the State, since they are not required to do anything except to refer to a Tribunal for its decision the industrial dispute and not called upon to decide it themselves in any particular manner. It is therefore not possible to concede to the arguments on behalf of the State and the respondents that what is conferred on the Government is a power and not even a discretion, and according to Mr. T.M Krishnaswami Iyer, learned counsel for the company, a permissive power, not even a discretionary power and that in any view, no duty is cast on the State and the exercise or non-exercise of that power could not be the subject for directions by any judicial authority. In view of what I have already stated, I consider the contentions of the respondents to be untenable.

22. In these cases, after the conciliation officer has made his report under S. 12(4) that a settlement could not be arrived at, the Government have not acted under Cl. (5) by making a reference to a Board or tribunal; nor have they recorded their reasons and communicated the same for not referring. It is therefore a case where the Government which are invested with the duty to either refer, or record and give reasons for not referring, have failed to discharge that duty. It cannot be accepted that the Labour Commissioner's intimation to the Express Newspapers Ltd. and the Swadesamitran Ltd. that they may consider the increase of wages would be a compliance with the statutory requirement of S. 12(5). There is inaction on the part of the Government after the conciliation officer has submitted his report, when there is a duty cast on them to act. Apart from the reasons already stated as to the duty of the Government generally under the provisions of the Act, in any event, on the facts and circumstances of these cases, there can be no doubt that a duty has arisen in the Government after the report of the conciliation officer, to proceed under S. 12(5) and they have failed to exercise their discretion. In such circumstances, the petitioners had no other course but to apply for issue of a writ, which they have now asked for. The Government have not acted and their action amounts to a declining of jurisdiction, in which case a writ of mandamus will issue. As the Government have not exercised that discretion and refused to refer, the question whether such an exercise of discretion was exercised bona fide and not arbitrarily, or illegally and with reference to extraneous considerations will not arise. It is suggested on behalf of the petitioners that the Government have not given any reasons as there could be no valid reasons for not referring and there is force in this contention. The existence of an industrial dispute has been admitted and the fact of conciliation having failed is accepted. The petitioners are entitled to a writ.

23. In the view which I have taken of the position of the Government under the Act, it will not however be necessary to decide the other point raised by the petitioners that under S. 10(2) of the Act, an application to the Government to refer the dispute to a tribunal would be sufficient, if made by one of the parties to the dispute and it need not be by both parties as is contended by the Government. But on the language of S. 10(1), (2), (2-A) it appears to me that the parties in S. 10(2) must refer to both or all parties and could not be any party, since the sub-section requires an application, from the parties jointly or separately and also that the persons applying represent the majority of each party. The use of the words “jointly or separately” and “each” could only be appropriate if an application from all the parties was intended. This conclusion is further strengthened by S. 10(2 A) introduced by the Amending Act XII of 1949, which states that

“where a Tribunal has been constituted under this Act for the adjudication of disputes in any specified industry or industries and a dispute exists or is apprehended in any such industry, the employer or a majority of the workmen concerned may refer the dispute to that Triounai.”

24. If an industrial tribunal had been constituted then, it will be open to either of the parties to apply and call upon the Government to refer the dispute to a Board, Court or tribunal. Under S. 10(2) the Government must have an application from all the parties to the dispute. It is only then the Government is bound to make a reference under S. 10(2).

25. Mr. Nambiar, learned counsel for the petitioners referred me to the proviso of S. 3 of Act VII of 1929 which is repealed by the Industrial Disputes Act (XIV of 1947) and which is as follows:

“Provided that, where both parties to the dispute apply, whether separately or conjointly, for a reference to a Court, or where both parties, apply, whether separately or conjointly, for a reference to a Board, and the authority having the power to appoint is satisfied that the persons applying, represent the majority of each party, a Court or a Board, as the case may be, snail be appointed accordingly”.

26. It was strenuously argued that where under the repealed enactment, the word “both” was there and was omitted in the repealing Act, it must be understood that the later enactment intended that the reference need not be by both. If that was the intention, it did not prevent the introduction of the words “any party” instead of “parties”. The plausible explanation is that to an industrial dispute, there may be more than two parties and hence the word “both” was deleted. A perusal of the debates of the Assembly on the Industrial Disputes Bill will show that on an amendment moved for restricting, the power of the Government to make a reference even under S. 10(1)(c) only on the joint application of the parties to an industrial dispute, it was pointed out that the method of application laid down in sub-clause (2) is joint or separate application and that the Government was not bound to refer to a Tribunal, if one party applied. That is accepted to be the correct position by the Hon'ble Minister in charge (vide page 565, Legislative Assembly Debates, Vols. 1 and 2, 1947). I have no doubt in holding that under sub-cl. (2), it is only on the application of all the parties to the dispute that the Government is bound to refer the dispute. I consider that S. 10(2) does not entitle anyone of the parties to an industrial dispute to compel the Government to make a reference.

27. There will be an order directing the issue of a writ of mandamus against the State of Madras, the 1st respondent in those petitions, directing them to refer the disputes between the petitioners and the 2nd respondent for adjudication to an Industrial Tribunal. As regards the other prayer, the continuance of any strike or lockout, has to be prohibited by the appropriate Government only when an industrial dispute has been referred to a Board or Tribunal, and I therefore consider that the petitioners are not entitled to a relief under S. 10(3) at this stage. There will be no order as to costs.

C.R.K/K.S

28. Order accordingly.