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Case Number

Writ Appeal No. 185 of 1962, against judgment of Veeraswami, J., reported in AIR 1963 Mad 142

Attorney(S)

For the Appellant: V.G. Row, Reddy, Advocates.

Judges

S. Ramachandra Iyer, C.J
Ramakrishnan, J.

Acts

Section 12(5) read with Section 10(1) of the Industrial Disputes Act.6.
Section 12(5) of the Industrial Disputes Act.
Section 10(1) of the Industrial Disputes Act,
SECTION 33 A INDUSTRIAL DISPUTES ACT

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Smart Summary

Judgment Summary — S. Ramachandra Iyer, C.J.

Factual and Procedural Background

Muthiah Pillai, an employee of the South India Saiva Sidhanta Works Publishing Society at Tirunelveli, was dismissed on 10-12-1959 on the ground that he was responsible for an article published in "Indunesan" dated 24-10-1958 which alleged malpractices by the society's directors. The management held no enquiry prior to dismissal, and the employee had no opportunity to rebut the charge.

The Madras Press Labour Union, of which Muthiah Pillai was a member, raised his case and initiated conciliation proceedings. Conciliation failed. The Labour Officer reported failure and stated that the management neither wished to reinstate the employee nor to terminate service by giving one month's notice on the footing that the prior dismissal was invalid.

The Government, after considering the conciliator's report, by order dated 14-9-1959 found that the termination was justified and advised the Union to recommend acceptance of Rs. 1034-47 offered by the management; it stated "There is no case for adjudication."

The Labour Union initially applied for certiorari but converted the relief sought to a writ of mandamus directing the Government to refer the dispute for adjudication by the labour court. Veeraswami J. held that the Government's order was bad because (1) it amounted to an adjudication on the merits (beyond the Government's jurisdiction), and (2) it gave no reasons, thereby contravening Section 12(5) of the Industrial Disputes Act. A writ of mandamus was issued directing the Government to reconsider whether a reference to the appropriate authority under the Act was called for. The State Government appealed against that judgment.

Legal Issues Presented

Whether a writ of mandamus could properly be issued against the Government directing it to refer an industrial dispute for adjudication when the employer (management) had not been made a party to the proceedings before the High Court.
Whether the Government's order refusing to refer the dispute amounted to an unlawful adjudication on the merits beyond the Government's jurisdiction.
Whether failure by the Government to record and communicate reasons for not making a reference contravened Section 12(5) of the Industrial Disputes Act and justified interference by the High Court under Article 226.
To what extent the Government may consider the merits (prima facie) of a dispute and other relevant circumstances under Sections 10(1) and 12(5) before deciding whether to refer an industrial dispute for adjudication.
Whether the Government is required to hear parties (i.e., conduct a quasi-judicial inquiry) before deciding not to refer a dispute for adjudication.

Arguments of the Parties

Advocate General / State (Appellant) — Principal Objection

The Advocate General objected to the propriety of issuing a writ of mandamus when the employer (the management) had not been made a party to the proceedings before the High Court. The contention was that the Court should not have issued a mandamus without giving the employer an opportunity to show cause.
The State (by implication) challenged the view that the Government's order had been an adjudication on the merits and also contended that the Government in appropriate cases must consider relevant matters (including facts) before deciding propriety of a reference under S. 10(1) or S. 12(5).

Union / Respondent (as represented in submissions)

V.G. Row on behalf of the Union argued that ordinarily the Government would be bound to refer a dispute for adjudication unless there was specific reason not to; he urged that the Government should generally refer disputes brought before it.
The Union relied on the absence of any enquiry by the management before dismissal to argue that this case fell plainly within the class of matters the Government should refer to the tribunal.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Workmen of South India Saiva Sidhanta Works Publishing Society v. Government of Madras (judgment below)	The High Court (Veeraswami J.) held the Government's order bad for amounting to adjudication and for failing to give reasons under S.12(5); issued mandamus to reconsider.	The present appeal challenges that decision; the Court of Chief Justice affirms the High Court's conclusion in this case.
State of Bombay v. K.P. Krishnan, AIR 1960 SC 1223	Where Government does not record/communicate reasons for not making a reference under S.12(5), aggrieved party may seek mandamus under Article 226; Government action is administrative (not judicial) and therefore not bound to hear parties.	Authoritatively relied upon by the Court to support: (a) availability of mandamus where reasons are not recorded; and (b) that the Government's act is administrative, not quasi-judicial.
Beetham v. Trinidad Cement Ltd., 1960-1 All ER 274	Governor's inquiry under the Ordinance is administrative; no obligation to conduct judicial or quasi-judicial inquiry or to give a formal hearing to both parties before acting.	Used to support the proposition that Government has no two-party quasi-judicial role when deciding to refer or not; no hearing requirement arises from that administrative function.
Local Government Board v. Arlidge, 1915 A.C. 120	Familiar passages cited as authority for requirements of hearing in judicial/quasi-judicial contexts.	The Court noted authorities like this were cited in Beetham but the Privy Council there rejected the need for judicial-style inquiry by the Governor in that context.
Salem Dist. Textile Workers Union v. State of Madras, AIR 1963 Mad 392	Reiterated the view that Government cannot determine disputed questions of fact and on that basis refuse a reference.	Cited as a subsequent decision reaffirming the High Court's approach that a decision on merits to refuse reference is impermissible in relevant circumstances.
State of Madras v. C.P. Sarathi, AIR 1953 SC 53 (1953 SCR 334)	A reference under S.10(1) is an administrative act; courts should not scrutinise the material before Government as if it were a judicial determination.	Invoked to show that Government's function in making a reference is administrative even though it forms an opinion on facts; nevertheless some enquiry into facts for prima facie assessment is permissible.
Bird v. O'Neal, 1960-3 All ER 254	Lawful dismissal of a workman may form subject-matter of a trade dispute; Government concerned with whether a collective dispute exists, not with lawfulness of the impugned action.	Applied to emphasize that the Government's task is to decide existence/apprehension of a collective dispute and expediency of reference, rather than to determine lawfulness of management's act.
Gajendragadkar J. in AIR 1960 SC 1223 (K.P. Krishnan)	Government must consider whether a prima facie case for reference exists; may also consider other relevant facts to justify refusal; discretion must be bona fide and based on relevant considerations.	Quoted at length and adopted as the guiding formulation of how the Government should approach S.12(5) and S.10(1) decisions.
Atherton West & Co. Ltd. v. Suti Mill Mazdoor Union, AIR 1953 SC 241 (1953 SCR 780)	Permission under a provision similar to S.33 merely removes a ban on employer action; such prima facie consideration is not an adjudication validating disciplinary action per se.	Used to illustrate that a prima facie inquiry by an authority does not amount to adjudication on merits.
Automobile Products of India Ltd. v. Rukmaji Bala, AIR 1955 SC 258 (1955-1 SCR 1241)	Power under provisions like S.33 is not adjudicatory but to decide whether permission should be given; the tribunal examines prima facie case only.	Cited to support the distinction between prima facie consideration and full adjudication.
Lakshmi Devi Sugar Mills Ltd. v. Ramsarup, AIR 1957 SC 82 (1956 SCR 916)	If the management held a fair enquiry and bona fide concluded misconduct, a prima facie case exists and tribunal should permit punishment under S.33-like provisions.	Relied upon for the proposition that a fair enquiry by management satisfies prima facie threshold and limits tribunal's reappreciation.
Punjab National Bank Ltd. v. Workmen, AIR 1960 SC 160	Where there had been no enquiry by management, the tribunal can take evidence and decide merits for itself.	Applied to the present facts to show that absence of management enquiry leaves the merits open to tribunal adjudication and warrants referral.
Indian Iron & Steel Co. Ltd. v. Their Workmen, AIR 1958 SC 130 (1958 SCR 667)	Industrial Tribunal is not an appellate body substituting its judgment for management in disciplinary matters except on limited grounds (bad faith, victimisation, violation of natural justice, perverse findings).	Used to define limits of tribunal review where a proper enquiry by management existed; contrasted with cases where no enquiry took place.
G. McKenzie & Co. Ltd. v. Its Workmen, AIR 1959 SC 389	Reaffirmation of principles limiting tribunal's role in disciplinary matters.	Cited alongside other Supreme Court authorities to show consistent approach to tribunal powers.
Management of Balipara Tea Estate v. Workmen, AIR 1960 SC 191	Where misconduct was preceded by an enquiry, tribunal need not re-prove misconduct to sustain management's order; tribunal's scope is limited.	Cited as further confirmation of the limits on tribunal reappreciation when fair enquiry exists.
Doom Dooma Tea Co. Ltd. v. Assam Chah Karmachari Sangha, 1960-2 Lab LJ 56 (SC)	Reiterated the limited scope of powers of the Industrial Tribunal regarding disputed management action.	Referenced to underline the restricted role of tribunal where management has conducted proper enquiry.
R. v. Industrial Dispute Tribunal, 1957-2 All ER 776	Union-sponsored individual disputes may become collective disputes if a question of general principle or concern to other workmen is involved.	Relied on to explain when an individual dispute can properly be treated as a collective industrial dispute warranting reference.

Court's Reasoning and Analysis

The Court proceeded in two stages: first addressing the procedural objection about non-joinder of the employer; and second examining the substantive question whether the Government could lawfully reach a conclusion on the merits prior to deciding whether to refer the dispute for adjudication.

On the procedural point, the Court observed that the writ issued by the High Court required the Government to perform a public/quasi-public duty; a writ of mandamus can therefore be issued against the Government even in respect of administrative acts where a duty exists. The Court relied on established authority (notably State of Bombay v. K.P. Krishnan) to hold that mandamus lies where the Government refuses to refer an industrial dispute under Section 10(1) if such refusal is not bona fide or is based on wholly irrelevant considerations. The Court also accepted the reasoning in Beetham v. Trinidad Cement that the Government's inquiry in this context is administrative and not a judicial or quasi-judicial inquiry; accordingly, there are not "two parties" before the Government in the sense that would require the Government to conduct a hearing or that would mandate impleading the employer as a condition precedent to issuing mandamus. On that basis the Court rejected the Advocate General's contention that the learned Judge lacked jurisdiction to issue the writ because the employer was not before the High Court.

On the merits, the Court first accepted that the absence of recorded reasons for the Government's refusal to make a reference under S.12(5) was sufficient to support the writ issued by the High Court. The Court nevertheless took up the larger legal question whether the Government may consider the merits of the dispute before deciding to refer it.

The Court analysed Sections 10(1) and 12(5) of the Industrial Disputes Act and concluded:

The Government's function in making or refusing a reference is administrative in character and not a judicial adjudication of the rights of parties.
Subject to that character, the Government must form a subjective opinion whether "any industrial dispute exists or is apprehended" (S.10(1)) and must decide whether it is expedient to refer the dispute (S.12(5)).
For these purposes the Government is entitled and, indeed, obliged to consider the merits to the extent of determining whether a prime facie case for reference exists; this may require going into the factual aspects to some extent (a prima facie inquiry), though such an inquiry is not the same as adjudication on the merits.
If, after such prima facie consideration, the Government concludes there is a prima facie case, then it still retains discretion to consider other relevant facts and may refuse referral on bona fide, relevant grounds (staleness, inconsistency with statute or agreements, frivolity, etc.). Conversely, references made after failed conciliation proceed under S.10(1), and in such situations the Government must record reasons for refusing to refer (per S.12(5)), and those reasons are reviewable by the superior court to ensure due exercise of power.
Whether a dispute is "industrial" for these purposes depends on whether it is a difference between employer and employees connected with employment/conditions of labour; an individual dispute that has become collective (e.g., because the union has taken it up on a matter of general principle, or because it affects other workers' interests) qualifies as an industrial dispute; otherwise, a sponsored individual dispute requires closer scrutiny before referral.

Applying these principles to the facts, the Court emphasised that where the management has not held any enquiry before dismissing a workman, the matter falls within the class of disputes in which the Government should normally refer the case: absence of enquiry leaves the merits open to the tribunal and, in such circumstances, the Government is bound to refer. The Court found that the learned Judge's conclusion that the Government's order was bad (for failing to give reasons and for improper adjudication on merits) could not be assailed in this case.

Holding and Implications

Holding: The appeal is dismissed. The Court affirmed the High Court's writ of mandamus directing the Government to reconsider whether a reference of the dispute to the appropriate authority under the Industrial Disputes Act is called for; the appeal fails and is dismissed with costs.

Implications:

Direct effect on the parties: The State Government's appeal was dismissed and the High Court's direction (to consider afresh whether a reference is called for) stands. On the facts of this case—where the management conducted no enquiry before dismissal—the Court held that the Government will be bound to refer the dispute for adjudication.
Procedural principle reaffirmed: A writ of mandamus lies against the Government under Article 226 to compel performance of its duty under S.10(1)/S.12(5) where the refusal to refer is not bona fide, is based on irrelevant considerations, or where reasons are not recorded as required after failed conciliation.
Scope of Government inquiry clarified: The Government's decision to refer or not is administrative; it may make a prima facie enquiry into facts and consider expediency, but it must not usurp the tribunal's adjudicative role by finally determining disputed facts where referral is appropriate. Where conciliation has failed and S.12(5) applies, the Government must record reasons for refusal, and those reasons are reviewable by the superior courts.
Precedential effect: The Court applied and reiterated existing authorities (including State of Bombay v. K.P. Krishnan and other Supreme Court and Privy Council authorities) to clarify the permissible extent of the Government's factual inquiry and the availability of mandamus; the decision operates as an application of those established principles to the facts at hand rather than creating a novel legal doctrine.

(Summary prepared from the judgment of S. Ramachandra Iyer, C.J., as provided.)

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Government Of Madras v. Workmen Of South India, Saiva Siddhanta Works Publishing Society, By Madras Press Labour Union

The Judgment of the Court was delivered by

S. Ramachandra Iyer, C.J:— Muthiah Pillai who was employed by the South India Saiva Sidhhanta Works Publishing Society at Tirunelveli, was dismissed from service on 10-12-1959 on the ground that he was responsible for an article that appeared in an issue of “Indunesan” dated 24-10-1958 making certain allegations of malpractices committed by the directors of the society. No enquiry was held by the management to find out whether the employee was guilty of the conduct attributed to him and consequently there was no opportunity for the latter to show that the charge or suspicion against him was ill-founded. The Madras Press Labour Union, of which Muthiah Pillai was a member, took up his cause and it raised an industrial dispute.

2. Conciliation proceedings which were initiated in consequence thereof, proved ineffective. The Labour Officer, who was entrusted with the conciliation work, while reporting his failure, intimated to the Government that the management was neither willing to reinstate the employee nor terminate his services by giving one month's notice, on the footing that the previous dismissal was invalid. The Government, on a consideration of the report, found that a reference of the dispute to the labour court was not called for. By its order dated 14-9-1959 the Government stated:

“On a careful examination of the case the Government find that the termination of services of K.P Muthiah Pillai is justified. The Union may, therefore, advise the worker to accept the Sum of Rs. 1034-47 offered by the management towards notice pay and compensation. There is no case for adjudication.”

3. The Labour Union at first applied to this court for the issue of a writ of certiorari, evidently on a misapprehension as to the nature of the order of the Government. But, later, it converted the application into one for the issue of a writ of mandamus to the Government directing it to refer the dispute regarding the dismissal of Muthiah Pillai for adjudication by the labour court. Thus, the dispute, though it originated in the grievance of a, single workman had, by reason of the espousal of his cause by the Union, gained support from the other employees of the same establishment who were members of that Union. Veeraswami J. before whom the application for the issue of writ came up for hearing, held that the order of the Government was bad in two respects, namely,

1. That it amounted to an adjudication of the dispute on its merits, which the Government had no jurisdiction to do; and

2. that as no reasons had been given by the Government for its conclusion, its order contravened Section 12(5) of the Industrial Disputes Act. Conformably to the view thus expressed, a writ of mandamus was issued directing the Government to consider afresh whether a reference of the dispute to the appropriate authority under the. Act is called for. The judgment in the case is reported as Workmen of South India Saiva Sidhanta Works Publishing Society v. Government of Madras*. The State Government have now appealed against the judgment.

4. Before taking up the substantial question raised in the appeal, we shall have first to deal with an objection raised by the learned Advocate General appearing for the Government — an objection which does not appear to have been taken before the learned Judge — regarding the propriety of issuing a writ of mandamus when the employer has not been made a party to the proceedings before this court. There is a misapprehension underlying the objection. The direction issued by the learned Judge is one that requires the Government to do its duty, as the purported order of the Government in his view is non-est in law. It is now well-settled that a writ of mandamus can issue even with respect to administrative acts, the only requirement being that there should exist a duty, public or quasi-public, in the body to whom the writ is addressed to perform that duty. It cannot be disputed that a writ of mandamus will lie against the Government, if it refused to refer an industrial dispute for adjudication under Section 10(1) of the Industrial Disputes Act, if such refusal is found to be either not bona fide or based on considerations of wholly irrelevant facts and circumstances.

5. Again, where the Government does not record and communicate to the parties its reasons, for not making a reference under S. 12(5), it will be open to the aggrieved party to apply to this court under Article 226 of the Constitution for the issue of a writ of mandamus to direct the Government to perform its duty. This has been authoritatively laid down in the decision of the Supreme Court in State of Bombay v. K.P Krishnan, AIR 1960 SC 1223. The act which the Government will, in such a case, be directed to do is neither judicial nor quasi-judicial. It would, therefore, follow that in such cases the Government would not be bound to hear the parties before making a reference under Section 12(5) read with Section 10(1) of the Industrial Disputes Act.

6. The nature and scope of the Government's power in similar cases arose for consideration before the Privy Council recently in Beetham v. Trinidad Cement Ltd., 1960-1 All ER 274, where Lord Denning observed—

“It was said that the Governor was, under the Ordinance, under a duty to inquire info the causes and circumstances of the dispute’ before he appointed the board of inquiry; and that he had not enquired as he ought to have done. He ought, it was said, to have given a fair opportunity to both parties to make representations before he acted and the familiar passages in Local Govt. Board v. Arlidge, 1915 A.C 120 were cited. Their Lordships reject this contention. True it is that the Governor had to inquire and, no doubt, he did — in his administrative capacity j— but he had not to conduct anything in the nature of a judicial or quasi-judicial inquiry.”

7. It would follow from the principle implicit in the observations extracted above, that there are no two parties before the Government when it makes its mind either to refer or not to refer for adjudication an industrial dispute by the appropriate tribunal and there can be no question of affecting the right of any party by such an administrative decision on the part of the Government.

8. Therefore, it will be unnecessary for any aggrieved person moving this court for the issue of a writ of mandamus to direct the appropriate Government to refer an industrial dispute under S. 10(1) of the Act, to implead as a party there to the other party to the dispute, e.g, the management. The question before the superior Court in such a case will be, whether to issue a writ or not, and on that question the only person interested will be the Government. We cannot, therefore, accept the contention urged on behalf of the Government that the learned Judge had no jurisdiction to issue the writ of mandamus without giving an opportunity to the employer to show cause against its issue.

9. On the merits of the case, the fact that the Government had not recorded reasons for its refusal to make a reference of the industrial dispute, will be sufficient to support the writ issued by the learned Judge. But, out of deference to the arguments of the learned counsel on either side, we feel bound to deal with the larger question as to whether it would be competent for the Government to come to a conclusion on the merits of the dispute before making up its mind either to refer to or not to refer an industrial dispute for adjudication.

10. The view taken by Veeraswami J. in the judgment under appeal has been reiterated by the learned Judge in a subsequent decision in Salem Dist. Textile Workers Union v. State of Madras, AIR 1963 Mad 392 where it was held that it would not be competent to the Government to determine a disputed question of fact and on that basis come to a conclusion that there was no case for adjudication by the tribunal functioning under the Act.

11. The opinion thus expressed has been challenged by the learned Advocate General as erroneous, the reason being that it will be necessary for the Government in certain cases to consider the relevant matters before deciding the propriety of making a reference under S. 10(1) or 12(5) of the Act.

12. For a due consideration of the question raised, it is necessary to refer to the relevant provisions of the Act, namely, Ss. 10(1) and 12(5); the former enables the appropriate Government to refer an industrial dispute for adjudication by the Tribunal appointed under the Act.

13. But before we refer to them we would like to point out that the duty performed by the Government in making a reference or in refusing to make a reference, of an industrial dispute for an adjudication, can in no way be regarded as a “decision” if that word is taken to import an idea of judicial adjudication. What the Government does in such cases, and this we have pointed out earlier, is purely an administrative duty not involving a determination of the rights of parties to the dispute. S. 10(1), which enables the Government to refer a dispute for adjudication by the tribunal referred to in the section, speaks of the Government being of opinion that “any industrial dispute exists or is apprehended”. That implies that the Government has to arrive at a conclusion, subjectively as it has been held as to whether an industrial dispute exists or is apprehended. Even if that condition were satisfied, the Government will still have to consider whether it is expedient to refer the dispute for adjudication, S. 12(5), which occurs in the chapter dealing with the procedure, powers and duties of the authorities functioning under the Act, deals with a case where efforts at conciliation of an industrial dispute have proved futile and a report of the attempts made by the conciliator is before the Government. In such a case, the Government will have to consider the report, and if it is satisfied that there is a case for reference, it should make such a reference.

14. Although the language of S. 12(5) refers to the satisfaction of the Government on the basis of the report, and, as we shall show presently, after taking other relevant matters into consideration, the power vested in the Government of referring the dispute, for adjudication has to be exercised only under S. 10(1) of the Act. In AIR 1960 SC 1223 the Supreme Court has held that S. 12(5) does not by itself, and independently of S. 10(1), confer a power on the appropriate Government to make a reference. If, therefore, a reference has got to be made under S. 10(1), it will be the duty of the Government first to satisfy itself, on the facts and circumstances brought to its notice, that an industrial dispute exists or is apprehended, in relation to an industry.

15. In State of Madras v. C.P Sarathi, 1953 SCR 334 : (AIR 1953 SC 53), Patanjali Sastri C.J observed:

“But it must be remembered that in making a reference under S. 10(1) the Government is doing an administrative act and the fact that it has of form an opinion as to the factual existence of an industrial dispute as a preliminary step to the discharge of its function does not make it any these less administrative in character. The court cannot, therefore, canvass the order of 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 determination. No doubt, it will be open to a party seeking to impugn the resulting award to show that what was referred by the Government was not an industrial dispute within the meaning of the Act, and that, therefore, the tribunal had no jurisdiction to make the award. But, if the dispute was an industrial dispute as defined in the Act, its factual existence and that expediency of making a reference in the circumstances of a particular case are matters entirely for the Government to decide upon, and it will not be competent for the court to hold the reference bad and quash the proceedings for want of jurisdiction merely because there was, in its opinion, no material before the Government on which it could have come to an affirmative conclusion on those matters.”

16. From this, it will be evident that an enquiry into the facts by the Government, so long as it is an enquiry made for the purpose of finding out whether an industrial dispute exists or whether there is a reasonable apprehension thereof, and also for the purpose of deciding as to the expediency of making a reference, is not shut out.

17. Now, an industrial dispute, according to the Act, (so far as it is relevant for the present case) will be one between employers 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. An individual dispute will, if it becomes a collective dispute between the workers on the one hand and the management on the other, be also an industrial dispute. Per contra, an individual dispute which has not become a collective dispute, cannot be regarded in any sense, as an industrial dispute. Again, from the definition of the term “industrial dispute” and from the provisions of S. 10(1) it will be clear that it is not necessary for the existence of an industrial dispute that the claim on behalf of the labour should necessarily be a lawful one. The essential requirement is that such claims should be on behalf of the workmen generally.

18. In Bird v. O'Neal, 1960-3 All ER 254, the Privy Council held that the lawful dismissal of a workman can properly form the subject-matter of a trade dispute. What the Government, therefore, will be concerned with, before making up its mind to refer an industrial dispute for adjudication by the tribunal, will be whether a collective dispute between the labour and the management exists or is apprehended, and secondly, whether it is expedient to refer such a dispute for adjudication, and not whether the impugned action taken by the management, which gave rise to the dispute, is lawful or unlawful.

19. The considerations that should weigh with the Government before it decides to make a reference or refuse one, have been referred in the leading case of AIR 1960 SC 1223, Gajendragadkar J. observed:

“The problem which the Government has to consider while acting under S. 12(5)(a) is whether there is a case for reference. This expression means that Government must first consider whether a prima facie case for reference has been made on the merits. If the Government comes to the conclusion that a prima facie case for reference has been made, then it would be open to the Government also to consider whether there are any other relevant or material facts' which would justify its refusal to make a reference. The question as to whether a case for reference has been made out can be answered in the light of all the relevant circumstances which would have a bearing on the) merits of a case as well as on the incidental question as to whether a reference should nevertheless be made or not. A discretion to consider all relevant facts which is conferred on the Government by S. 10(1) could be exercised by the Government even in dealing with cases under S. 12(5) provided of course the said discretion is exercised bona fide, its final decision is based on a consideration of relevant facts and circumstances and the second part of S. 12(5) is complied with”. (Italics are (here in ‘’) ours).

20. Again

“Though considerations of expediency cannot; be excluded when the Government considers whether or not it should exercise its power, to make a reference, it would not be open to the Government to introduce and rely upon wholly irrelevant and extraneous considerations under the guise of expediency. It may, for instance, be open to the Government in considering the question of expediency to enquire whether the dispute raises a claim which is very stale, or which is opposed to the provisions of the Act, or is inconsistent with any agreement between the parties, and if the Government come to the conclusion that the dispute suffers from infirmities of this character, it may refuse to make the reference.”

21. It will be clear from the foregoing passages that the Government cannot avoid considering the merits of the case and other relevant circumstances adverted to above, for the limited purpose of making up its mind either to refer the case for adjudication or not.

22. In the case just now cited it was observed:

“It would be open to the Government to consider other relevant facts which may come to its knowledge or which may be brought to its notice and it) is in the light of all these facts it has to come to its decision whether a reference should be made or not.”

23. The question whether there is a prima facie case for reference, which it will be the duty of the Government to consider in a case coming either under S. 10(1) or 12(5) of the Act, will necessarily involve going to some extent at least into the merits of the case.

24. It will be useful to refer, in this context to a few cases arising under Section 33 of the Industrial Disputes Act where, while the industrial dispute is pending adjudication, the management can, with, the express permission in writing from the Tribunal, alter the conditions of service or punish a workman protected under the provisions of that section. In these cases, the Tribunal which is to give the permission is required to consider whether the change against the delinquent workman is prima facie proved or not. It has been held that such prima facie consideration of the merits of the case is not tantamount to an adjudication on the merits of the case. Therefore, an authority which for the purpose of discharging its duty goes into the matter prima facie cannot be held to have decided the matter itself.

25. In Atherton West and Co., Ltd. v. Suti Mill Mazdoor Union, 1953 SCR 780 : (AIR 1953 SC 241) it has been held that permission given under a provision similar to that in S. 33 referred to above, would have the effect of merely removing the ban on the right of the employer to dismiss the workman and cannot by itself validate a disciplinary action, if otherwise, it is, invalid. Again the power conferred under S. 33 has been held in the Automobile Products of India Ltd. v. Rukmaji Bala, 1955-1 SCR 1241 : ((S) AIR 1955 SC 258) as not amounting to the same thing as the power to adjudicate upon the dispute, but it is as only to decide as to whether permission should be given or not. Under the provision, the, only thing that the tribunal has to consider is, whether a prima facie case has been made out by the employer for lifting the ban imposed by the section. If, therefore, on the materials before it, the tribunal is satisfied that there has been a fair enquiry in the circumstances of the case and that the management has bona fide come to the conclusion that the worker was guilty of misconduct with which he had been charged, a prima facie case should be held to have been made out, and the tribunal would be bound to permit the employer to punish the workman — Vide Lakshmi Devi Sugar Mills Ltd. v. Ramsarup, 1956 SCR 916 : ((S) AIR 1957 SC 82).

26. It will follow that, on the principle of the decisions referred to above, in considering whether there is a prima facie case or not, the Government will have to go into the question of the merits of a case to some extent. But that does not, and indeed cannot, go to the extent of an adjudication on the merits of the case. Once the Government comes to the conclusion that there is a prima facie case, it will be its duty to refer the dispute, unless it considers that it is inexpedient to do so. For example, even though an industrial dispute exists or is apprehended, it may be that the Government considers that the claim is a state or a frivolous one; then it will be entitled, in the exercise of its discretion, to decline to refer the matter for adjudication. But where the case arises after the failure of the conciliation proceedings, the position will also be the same as reference even in such cases will have to be under S. 10(1) only. There will, however, be this difference, namely, that the Government will be bound to give reasons for its conclusion. These reasons can always be looked into by the superior Court for the purpose of satisfying itself whether the Government acted in the due exercise of its powers. In either case, it will be the duty of the Government both in the interests of the industry as a whole and also in the due performance of its duties under the statute, to consider prima facie whether there is a case for reference to the industrial tribunal.

27. Sri V.G Row on behalf of the Union his contended that, normally speaking, the Government would be bound to refer any dispute brought before it, in respect of which such a reference is sought, unless there be some specific reason for not so referring. We are of opinion that the contention so stated is too broad to be accepted. It may be that where an industrial dispute arises in a public utility service concern, different considerations might arise and the Government might, while in referring such disputes for adjudication, adopt that rule. But whether it be public utility industry or otherwise, the Government will have to consider the conflicting principles of securing an industrial peace and also helping the industrial economy and development. The mere fact that a dispute has been raised by all the workmen cannot mean that the Government should necessarily refer the dispute; under S. 10 it has got to exercise a discretion before it decides to do so.

28. The problem may not present much difficulty when the industrial dispute relates to the workers or a section of workers generally. There, unless the dispute is either stale or frivolous, the Government should ordinarily leave it to the tribunal to adjudicate upon it. But even there, cases may arise where industrial disputes are raised not perhaps with the object of bettering the conditions; of the labour but on account of the rivalries between various unions who claim, membership in an, industrial establishment.

29. Where, however, the industrial dispute is the outcome of an individual dispute, the case will require greater scrutiny by the Government. In such a case, the fact that a union sponsors an individual dispute cannot mean that the Government should, as a matter of course, refer such a dispute under S. 10(1). To hold otherwise would be to render futile the discretion vested in the Government under that provision. Let us make clear what we mean by an illustration. Suppose, a dispute arises as a result of the dismissal of a workman in an industrial establishment by reason of disciplinary action having been taken against firm for misconduct. If there had been a proper enquiry, in that matter by the management, or if for example, the workman had been convicted by the ordinary Courts of the land for the misconduct alleged, the Government will be justified in such a case to come to the conclusion that there is no prima facie case for reference. It cannot be said) in such a case that the Government cannot look into the merits of the case. Again, it is well settled, that an Industrial Court cannot and does not, as a Court of appeal capable of substituting (sic) its judgment for that of the management in such, disciplinary matters except where there is want of good faith on the part of the management, when there is victimisation or unfair labour practice of the management has been guilty of a basic error or violation of a principle of natural justice, or on the materials the finding is completely baseless of perverse.

30. These principles have been laid down in Indian Iron and Steel Co. Ltd. v. Their Workmen, 1958 SCR 667 : (AIR 1958 SC 130) and have been reaffirmed later in G. McKenzie and Co. Ltd. v. Its Workmen, AIR 1959 SC 389 and again in Management, Management Of Balipara Tea Estate v. Workmen, AIR 1960 SC 191. In the last mentioned case it was held that the misconduct for which the workman, was dismissed if it had been done after the enquiry need not be proved to the satisfaction of the tribunal before whom the matter comes up on reference in order to sustain the order. But the rule laid in the above cases will apply only when there had been a proper enquiry by the management; is however, there had been no enquiry by the management, the issue about the merits of the impugned order of dismissal would be at large before the Tribunal and it would be competent to take evidence and decide for itself, whether the misconduct alleged has been proved and the punishment can be sustained; vide Punjab National Bank, Ltd. v. Workmen., AIR 1960 SC 160 : Except in the cases referred to above, it will not be competent for the tribunal, to which reference has been made, to re-appreciate the evidence; see Doom Dooma Tea Co. Ltd. v. Assam Chah Karmachari Sangha, 1960-2 Lab LJ 56 (SC). In those cases, the scope of the; powers of the Industrial Tribunal in respect of a a, disputed action taken by the management against its employees being limited, it will be for the Government to see whether the order of the management is prima facie bad or one that could be assailed for one or more reasons pointed out above.

31. An industrial dispute may originate due to a variety of reasons. But its essential characteristic I will always be a difference between the employer; and the employees in an industry in relation to a claim generally on behalf of the latter, or of a section of the workers, or even of one person. In R. v. Industrial Dispute Tribunal, 1957-2 All ER 776 Devlin, J. observed:

“There are all sorts of industrial disputes which arise out of a difference between the employer and the employees in factory in relation to a claim made merely by one man, cases for example, where one man is unfairly victimised, or is unfairly victimised in the estimation of his fellow employees, and his fellow employees may made themselves parties to the dispute because they may say Unless this man is treated in the way in which we think that he ought to be treated, there is going to be trouble. Or there may be other reasons which cause men to be interested and to wish to make them serve parties to a dispute which concerns only the claim of one man. Without being materially affected, other people may feel that their prospects of promotion are injured generally. They may be interested in the principle of the thing. They may say ‘If a person of the length of service of Mr. Carreck is not promoted, what is going to happen to us when we get to that stage’ Or there may be, on the facts which I have recounted, some general principle involved in the dispute on which this particular claim happens to be founded which is selected as a test action, the general principle here being whether it is right, or wrong for the applicants to adopt the attitude that-they will not discuss individual claims with the trade union but will discuss them only with the individuals concerned.” (Italics here into ‘’) are ours)

32. What have been stated above are undoubtedly matters which the Government can legitimately take into account while coming to a conclusion as to the expediency of referring an industrial dispute. It can therefore be broadly stated that it is not every individual dispute which has been sponsored by a trade union or by an appreciable body of workers that should be referred for adjudication; the matter has to be looked into and if the Government finds that a question of principle is involved, in the matter of the grievance of the individual worker, then all the other workers who sponsored his case may be regarded as parties to the dispute, though they might not be directly affected by the particular action taken by the management in such a case. That case will undoubtedly be a proper one for adjudication by a tribunal. It has been observed by Delvin, J. in the case to which we have made reference earlier:

“If the union chooses to make the matter a union issue, if it chooses to take up the cudgels on behalf of its member and thereby to become belligerent in the matter, it is a dispute to which’ more than one workman is a party. No doubt, the union will not do it unless there is a matter of some general principle involved; but if the union chooses to make it a general issue, it becomes a dispute to which the whole body of workmen or group are made parties.”

33. Where, therefore, the union of workers takes up an individual dispute, no principle being involved therein, it will be for the Government to consider the merits of the case and decide whether it should refer the matter for adjudication under S. 10(1) or 12(5). If, on the other hand, a question of principle is involved, like victimisation, unfair labour practice or the..punishment of a worker without even an enquiry, it will be the duty of the Government to act under those provisions. Such decisions as the Government arrives at in these cases are not decisions in the dispute but only a decision as to whether the machinery created by the statute should be put into action with a view to solve the dispute. In the present case, there has been no enquiry by the management before terminating the services of Muthiah Filial. That case would fall within the principle to which we have made reference and the Government will be bound to refer. Although the view taken by the learned Judge in the case now under appeal as well as in AIR 1963 Mad 392 has been rather broadly expressed, we are of opinion, that the conclusion reached by the learned Judge in the present case cannot be assailed. The appeal fails and will be dismissed with costs.

FH/MKS/D.V.C

34. Appeal dismissed.

Government Of Madras v. Workmen Of South Ind...