Tamil Nadu Co-Operat... v. Tamil Nadu Dairy Dev...

The Judgment of the Court was delivered by

Ramanujam, J.:— These two writ appeals are directed against the judgment of Venkataswami, J., in Writ Petition No. 4024 of 1983. The first writ appeal has been filed by the Tamil Nadu Co-operative Milk Producers Federation, Ltd. (hereinafter referred to as the federation), and the second writ appeal has been filed by the State of Tamil Nadu. The circumstances under which the said writ petition came to be filed by the Tamil Nadu Dairy Development Corporation Employees' Union (hereinafter referred to as the union) may briefly be stated. The Dairy Development Department of the State of Tamil Nadu established two dairies one at Madhavaram and the other at Ayanavaram. Later a corporation known as the Tamil Nadu Dairy Development Corporation was formed and the two dairies were transferred to the said corporation. The corporation also established and ran a third dairy at Ambattur. On 1 February 1981, the Tamil Nadu Co-operative Milk Producers Federation was formed. The union issued a notice of token strike in support of various demands and in fact observed a token strike on 19 November 1980 According to the Tamil Nadu Dairy Development Corporation Employees' Union the said strike was legal and justified, and after the token strike on 19 November 1980, the members of the union reported for duty on the next day but they were refused employment by the federation. Thereafter, in view of the said attitude of the federation, the union was compelled to launch an agitation demanding that its members be taken back to work. The agitation was continued and lasted for several months. In spite of several meetings with the Minister in-charge of the Dairy Development and assurance held out at such meetings, nothing took place and, therefore, the agitation continued. After waiting for more than a year, the union served a notice upon the federation on 10 January 1982, intimating that the workers were always ready and willing to resume duty and it was only the federation which had refused to employ them. After the said notice, the members of the union presented themselves physically for duty on 15 February 1982. But the federation did not permit entry. Thereafter, on 16 February 1982, individual letters were sent by each of the members of the union putting the blame on the federation for refusing employment. In reply to the said individual letters, the federation served an order to each of the members of the union stating that the members of the union were absent from duty on 19 November 1980, and they did not report for duty thereafter and that in view of their long absence from duty the federation had come to the conclusion that the members of the union had abandoned their employment with effect from 19 November 1980, and, therefore, they ceased to be in the service of the federation. The said communication also called upon the members of the union to settle their accounts. This dispute between the union and the federation relating to the non-employment of the members of the union by the federation was the subject-matter of conciliation proceedings and the Special Deputy Commissioner of Labour after consideration of the rival contentions put forward by the parties during the conciliation by his report, dated 16 November 1982, gave a report of failure of conciliation to the Government. The union made representations to the Government to refer the dispute for adjudication by a competent Tribunal as it involved the livelihood of a large number of workmen numbering 901. However, the Government passed G.O.Ms No. 371 Labour and Employment, dated 14 February 1983, declining to refer the said dispute for adjudication and the reasons set out in the Government order of declining a reference are four-fold. They are:

(i) The strike from 19 November 1980, was in direct contravention of S. 22(1)(a) of the Industrial Disputes Act in that no notice to the employer as required there under was given and this has rendered the strike illegal;

(ii) the federation is running a public utility service;

(iii) having resorted to an illegal strike and continuing the same, the workers had caused hardship to the society at large in the supply of milk and milk products; and

(iv) in such an essential service, the workmen ought not to have gone on strike without exhausting the legal remedies and without complying with the statutory requirement.

2. Aggrieved by the said order of the Government refusing to refer the dispute, the union filed Writ Petition No. 4024 of 1983. In the said writ petition the union complained that the Government had not applied its mind to the nature of the dispute, that the reasons given by the Government for declining the reference have no relevance whatsoever to the dispute raised, that the reference of a dispute regarding non-employment of workmen may be declined only if prima facie the Government comes to the conclusion that the non-employment was fair and proper and that non-employment was effected after a properly conducted enquiry or under the Standing Orders or under any other provisions of law. It is also the case of the union that the order of the Government declining reference is vitiated by malice in law as well as malice on facts in that the federation acted on the dictates of the State Government and in particular the Minister incharge and as such the Government has not approached the matter in a fair and honest manner but sought to protect the interests of the federation overlooking the interests of the workmen concerned and that the reasons given in the impugned order also bristles with in accuracies of fact in that, according to the workmen, the lightning strike was only for one day on 19 November 1980, and that it was quite legal and the same does not contravene S. 22(1)(a) of the Industrial Disputes Act as has been assumed by the Government.

3. The said writ petition was opposed both by the State of Tamil Nadu and the federation who were respondents 1 and 2 therein. The first respondent filed a counter-affidavit to the following effect:

“The workmen in question, struck work from 19 November 1980 to 20 November 1980, in contravention of the provisions of Ss. 22 and 23 of the Act and that too, during the pendency of conciliatory talks before the Deputy Commissioner of Laobur II, Madras. Having resorted to an illegal strike in public utility services, the workmen continued the strike causing hardship to the community at large in the supply of milk and milk produces. In short the workmen had abandoned their jobs/contracts. Therefore, the contention of the workmen that they were refused employment and were not allowed to join duty or resume work is totally unfounded.”

In G.O.Ms No. 371, Labour and Employment, dated 14 February 1982, the Government have declined to refer the dispute for adjudication for the reasons set out therein which are valid and would amply justify the decision of the Government.

4. Venkataswami, J., after considering the rival contentions, held that the first respondent, Government of Tamil Nadu, has misdirected itself in point of law in wholly omitting to take into account a relevant consideration and, therefore, the impugned order is liable to be set aside. The relevant consideration which, according to the learned Judge had not been taken into account by the Government while considering the question of reference is as regards the validity of the non-employment of the workmen. According to the learned Judge the Government has not considered as to whether the non-employment of the workmen is justified and valid and only if the Government comes to the conclusion that the non-employment of workmen on the facts and circumstances is justified, it can refuse to make a reference and as such, the non-consideration of the question of the validity of non-employment of the workmen will vitiate the order refusing a reference. In that view the learned Judge issued a mandamus directing the Government to consider the matter afresh in the light of the principles laid down in the various decisions referred to in his order. It is against the said order of the learned Judge directing the Government, to reconsider the matter, the above two appeals have been filed one by the federation and the other by the State.

5. According to the Government, it considered the question of expediency and declined to make a reference on the ground that it is not expedient and the order passed by the Government can be justified on the ground of expediency and the learned Judge is in error in holding that there has been a misdirection on the part of the Government on a point of law in not considering the question of the validity or justification for non-employment of the workmen which is a relevant consideration. Therefore, the question is whether the impugned order of the Government declining to make a reference could be justified on the basis of expediency alone without the Government going into the question at least prima facie as to whether the non-employment was valid and proper. It cannot be disputed that in this case, the Government has not gone into the merits of the dispute but only proceeded on the basis of expediency while rejecting the reference. Thus the two main questions that arise in these appeals are:

(i) Whether the impugned order could be justified on the ground of expediency alone or whether the Government is bound to consider at least prima facie the merits of the dispute sought to be referred to; and

(ii) whether the impugned order is vitiated for non-consideration of the relevant material.

The learned Advocate-General appearing for the State Government who is the appellant in Writ Appeal No. 175 of 1984, submitted that the Government has got the power to reject the reference merely on the ground of expediency without going into the merits of the dispute especially when the service in question is an essential service. In support of the said stand, he refers to the decision of the Supreme Court in Bombay Union of Journalists v. State of Bombay [A.I.R 1964 S.C 1617]. In that case, the Supreme Court has observed that if the claim made by the workmen is patently frivolous or is clearly belated, the appropriate Government may refuse to make a reference and likewise if the impact of the claim on the general relations between the employer and the employees in the region is likely to be adverse the appropriate Government may take that into account in deciding whether a reference should be made or not. According to the learned Advocate-General even if a case is made out for a reference on the merits, still the Government can refuse to make a reference on the ground of expediency. We are not, however, in a position to agree with the said contention that the Government can reject a reference only on the basis of the expediency without considering other relevant materials. Take a case where the Government considers prima facie case is made out on the merits. In such a case, the Government cannot refuse to direct a reference merely on the ground of expediency. Even in such a case where the rejection of reference could be resorted to on the basis of inexpediency, the interests of the workers will stand sacrificed on the altar of expediency. Having regard to the objects sought to be achieved by S. 10 of the Industrial Disputes Act, we have to hold that even though expediency is a relevant consideration to be taken into account by the Government while considering the question of reference under the provisions of the Act, a reference cannot be refused merely on the ground that it is not expedient. The affectation of the rights and interests of a vast number of workmen is also a relevant consideration to be taken into account along with the consideration of the question of expediency. It is well established by a series of decisions of the Supreme Court that the Government is not prevented from considering the merits of the dispute raised by the workmen prima facie. It is no doubt true that S. 12(5) does not make it obligatory on the part of the Government to make any reference at all and it has got discretion to refer or not to refer the dispute. Even that discretion is qualified by the requirement that the Government should be satisfied that there is a case for reference to a Board or a Tribunal and where the Government decides to make a reference it is required by S. 12(5) to make a record of the reasons and communicate them to the parties concerned. In this case it is common ground that the dairies in question had been notified as a public utility service. Therefore, S. 22(4) of the Act has to be complied with before the workers proceed on a strike. A strike held in violation of S. 22 is illegal. In this case, one of the reasons given by the Government for refusing to make a reference is that the strike resorted to by the workmen is in violation of S. 22. However, the dispute sought to be referred is not as to whether the strike is legal or illegal but as to whether the non-employment of the workmen after the strike is justified or not. Even assuming that the strike is in contravention of S. 22(1) and as such illegal, that alone cannot be taken to be the basis for the non-employment. As already stated in this case after the workmen resorted to the strike which is said to be illegal, notice of termination has been issued to individual workmen stating that as they have abandoned their work their services will stand terminated. The dispute is whether such termination of employment is justified or not. It has been pointed out by the Supreme Court in Gujarat Steel Tubes, Ltd. v. Gujarat Steel Tubes Mazdoor Sabha [1980-I L.L.N 230], as follows in Para. 109, at page 261:

“The cardinal distinction in our punitive jurisprudence between a Commission of Enquiry and a Court of adjudication, between the cumulative causes of a calamity and the specific guilt of a particular person, is that speaking generally, we have rejected, as a nation, the theory of community guilt and collective punishment and instead that no man shall be punished except for his own guilt. Its reflection in the disciplinary jurisdiction is that no worker shall be dismissed save on proof of his individual delinquency. Blanket attainder on a bulk of citizens on any vicarious theory for the gross sins of some only, is easy to apply but obnoxious in principle….”

Therefore, even if the strike is illegal, there should have been enquiry on the question as to what extent the individual worker is responsible and whether his service could be terminated for that reason. As pointed out in the same case, not reporting for duty does not lead to an irrebuttable presumption of active participation in the strike and more is needed to bring home the mensrea and that burden is on the management. Therefore, whether the strike is illegal is not an issue at this stage when the workmen seek a reference on the question whether their non-employment is justified. The question which arises here is as to whether in the light of the finding rendered by the Government, all the workers should face non-employment or whether individual cases with special reference to their active participation in the strike should be considered. As already stated, all the workmen have been served with individual notices stating that they have abandoned their employment. When the workmen dispute the case of abandonment put forward by the management, that question has to be considered. The question as to whether the non-employment of the workmen was justified on the basis of the alleged abandonment of work has not been considered by the Government. In the case referred to above, the Supreme Court had to consider a somewhat similar situation where on the plea that there has been an illegal strike, there has been non-employment of all the workmen. That was challenged. The Court stressed the need for individual chargesheet being delivered to individual workman so that the degree of misconduct of each workman and the quantum of punishment of each may be separately considered and that though all the workmen may be equally guilty of participation in the illegal stake, all the workmen may not be liable for the same kind of punishment as the punishment has to depend on the extent of participation or involvement of the concerned workmen. Again as pointed out by the Supreme Court in the said case, there may be actual participation and passive participation on the part of the workmen. It may be that those workmen who have actually participated in the illegal strike may deserve a more serious punishment. The person who are guilty of passive participation, that is, at the risk of facing the militant workmen who are actually participating in the illegal strike stopped away from work cannot be punished to the same extent as in the case of active participants or the militant workmen. On the basis that the strike resorted to by the workmen is illegal, it may be that the management could take disciplinary action against the workmen under the Standing Orders and dismiss them but that was not what was done in this case. In this case, the non-employment has been resorted to on the basis that the workmen abandoned their employment. Whether the Standing Orders applicable to the workmen provide for the non-employment on the ground of abandonment of work is a matter to be considered while determining the question whether the non-employment is justified. Even if the Standing Orders provide for abandonment of employment and that is taken as the basis for disciplinary action, the workmen have to be asked for an explanation and formalities will have to be gone into before terminating the services of the workmen. This is clear from the decision of the Bombay High Court in Rambhuwal Thakur Prasad v. Phoenix Mills [1977-I L.L.N 593]. In Hochtief Gammon v. State of Orissa [1975-II L.L.N 327], Alagiriswami, J., speaking for the Bench deduced the following principles from the earlier decisions of the Supreme Court, in Para. 13, at pages 336 and 337:

“The executive have to reach their decisions by taking into account relevant considerations. They should not refuse to consider relevant matter nor should take into account wholly irrelevant or extraneous consideration. They should not misdirect themselves on a point of law. Only such a decision will be lawful. The Courts have power to see that the executive acts lawfully. It is no answer to the exercise of that power to say that the executive acted bona fide or that they have bestowed painstaking consideration. They cannot avoid scrutiny by Courts by failing to give reasons. If they give reasons and they are not good reasons, the Court can direct them to reconsider the matter in the light of relevant matters, though the propriety, adequacy or satisfactory character of those reasons may not be open to judicial scrutiny. Even if the executive considers it inexpedient to exercise their powers they should state their reasons and there must be material to show that they have considered all the relevant facts.”

As pointed out by the Supreme Court in Bombay Union of Journalists v. State of Bombay [A.I.R 1964 S.C 1617], this Court cannot sit in appeal over the orders of the Government refusing to make a reference and is not entitled to consider the propriety or the satisfactory character of the reasons given by the Government. But, if the reasons given show that the appropriate Government had not taken into account a relevant consideration or has taken into account an irrelevant consideration, then the Court may consider the case on a writ of mandamus.

6. The learned Advocate-General and Sri N.G.R Prasad, appearing for the appellants, referred to the decision in Industries, Labour and Co-operation Department, Madras v. Workmen of South India Saiva Siddhanta Works Publishing Society Tirunelveli, Ltd., Madras [A.I.R 1964 Mad. 468], Ramachandra Aboji v. State of Bombay [A.I.R 1952 Bom. 293] and Degaram Tuloute v. State of Bihar [A.I.R 1950 Pat. 387], in support of their submissions that it is not obligatory on the part of the Government to refer the dispute, that the Government is justified in refusing to refer the dispute when it finds that it is not expedient to make the reference and that, therefore, this Court cannot interfere with the order of the Government. But it is significant to note that all the above decisions were rendered before the introduction of S. 11-A of the Industrial Disputes Act. The introduction of the said section has brought in a vital change and the jurisdiction of the Labour Court or the Industrial Tribunal has considerably been widened. Under that section, the Labour Court or the Tribunal can go into the question of the punishment even if the management justified the imposition of punishment. The impact of S. 11-A of the Act has been examined by the Supreme Court in Workmen of Firestone Tyre and Rubber Company of India (Private), Ltd. v. Firestone Tyre and Rubber Company of India (Private), Ltd. [1973-I L.L.N 278], and the Supreme Court has pointed out that S. 11-A now gives full power to the Tribunal or the Labour Court to go into the evidence and satisfy itself on both the points as to whether misconduct is proved or not and if proved whether it would warrant the punishment of dismissal or discharge. In that case, the Supreme Court has observed as follows:

“What lies in the ambit of the Government's jurisdiction for not making a reference is to consider whether a prima facie case for reference existed or not and whether on certain grounds as pointed out by their Lordships, it was not expedient to make a reference, as for example, when the claim was patently frivolous, clearly belated or due to its adverse impact on the industrial relations in the State. Therefore, it is on these mandatory guidelines that this statutory discretion has to be exercised by taking into consideration only those relevant guidelines.”

7. Thus, on a due consideration of the matter, we are of the view that the Government has not taken into account the following relevant considerations while rejecting the reference. They are:

(i) Whether the illegal strike can alone form the basis of non-employment; and

(ii) whether the abandonment of the employment pleaded by the federation has prima facie been established and in any event whether the non-employment was justified on the facts of this case.

As we have already stated, while considering the question of reference the Government's failure to take into consideration the relevant circumstances will vitiate the decision of the Government. In this view of the matter, we are inclined to agree with the view taken by the learned Single Judge. The writ appeals are, therefore, dismissed. There will, however, be no order as to costs. Since the time granted by Venkataswami, J., for reconsideration had already expired, the time for consideration is extended by two months from the date of receipt of this order.