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Leather And Leather ... v. First Additional Reg...
Structured Summary of the Court Opinion
Factual and Procedural Background
The petitioner challenged an order cancelling its registration under the Trade Unions Act, 1926, on the ground of non-submission of the annual return required by S. 28 of the Act and regulation 18 of the Regulations under the Act. The annual return for the year 1990 was required to be filed on or before 30 April 1991. The petitioner did not file the return with the Additional Registrar of Trade Unions I (the respondent) by that date, and did not reply to a show-cause notice issued on 10 March 1991. Consequently, the respondent cancelled the union's registration by the impugned order, which the petitioner brought before the Court.
In its affidavit the petitioner stated that it handed over the relevant papers for the 1990 annual return to its auditor, who normally filed returns. The auditor allegedly filed the return before the Additional Registrar of Trade Unions II (a different officer), by mistake, and later informed both Additional Registrars and requested correction. The Additional Registrar II reportedly stated that he had passed the papers to the Additional Registrar I. The petitioner contended there was no wilful omission and that the non-filing before the respondent was accidental. The Court issued notice of motion on 20 December 1991. The respondent, through the Government Advocate, maintained that the return was not filed in time and that no reply to the show-cause notice was given, arguing that the cancellation order was lawful.
Legal Issues Presented
- Whether the cancellation of the petitioner's registration for non-submission of the annual return (required under S. 28 and regulation 18) was lawful.
- Whether cancellation of registration under Section 10(b) of the Trade Unions Act can be validly exercised absent an element of wilfulness on the part of the trade union.
- Whether the facts (submission of the papers to the Additional Registrar of Trade Unions II by the auditor and subsequent transfer to the respondent) show wilful non-compliance by the petitioner.
Arguments of the Parties
Petitioner's Arguments
- The petitioner handed the relevant annual-return papers to its auditor for filing; the auditor customarily filed returns and therefore the petitioner believed the return would be filed in time.
- The auditor mistakenly filed the return with the Additional Registrar of Trade Unions II instead of the respondent (Additional Registrar I); the offices are located on the same floor, making the mistake understandable.
- The auditor informed both Additional Registrars by letter dated 13 November 1991 and requested correction; the Additional Registrar II, by letter dated 16 December 1991, informed the petitioner that he had handed the annual return to the respondent.
- Because the return was in fact filed (albeit at the wrong office) and transferred, the petitioner’s omission was not wilful, and the union should not be penalised for an auditor's mistake.
Respondent's Arguments (as presented by the Government Advocate)
- The petitioner did not file the annual return with the respondent in time and did not reply to the show-cause notice, thereby contravening provisions of the Trade Unions Act.
- Records do not show that the return was received by the respondent from the Additional Registrar II; transfers of records are normally made only on proper acknowledgment.
- There is no infirmity in the impugned cancellation order; the cancellation was justified under S. 28 and regulation 18 and S. 10(b) of the Act.
- If blame is to be allocated, the petitioner (i.e., the union) is responsible for failing to comply with statutory filing requirements.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Court examined the statutory provisions relied upon by the parties. It set out the requirements of S. 28 of the Trade Unions Act, 1926, which prescribes the annual submission of an audited general statement of receipts and expenditure, assets and liabilities, and related particulars (to be sent on or before a prescribed date). The Court also noted regulation 18 of the Trade Unions Regulations, which prescribed that the annual return under S. 28 be submitted in duplicate in form 'G' on or before 30 April each year. The Court further referred to S. 9 (power to issue certificate of registration) and S. 10 of the Act, noting S. 10(b) empowers the Registrar to cancel registration in specified circumstances.
Turning to the power of cancellation under S. 10(b), the Court stated that to exercise the power to cancel registration "there should be an element of wilfulness." The Court defined "wilful" in the opinion as requiring an intention that is "intentional, deliberate, calculated and consciousness with full knowledge of legal consciousness." The Court analysed the factual record in the light of that legal standard.
On the facts, the Court found that the petitioner-union had given the relevant papers to its auditor, who filed them before the Additional Registrar of Trade Unions II (the wrong officer). The Additional Registrar II admitted passing the papers to the respondent and informed the petitioner accordingly. The Court noted the proximity of the offices (on the same floor) and observed that although the Additional Registrar II had not obtained formal acknowledgment from the Additional Registrar I, the letter indicating transfer was evidence that the papers had been passed on. Applying the wilfulness standard, the Court concluded that the non-filing before the respondent before the prescribed date was not wilful: it was an erroneous filing by the auditor rather than an intentional or deliberate contravention by the petitioner itself.
Although the Court observed that the petitioner should perhaps have replied to the form 'D' show-cause notice (and did not do so), it held that this omission did not convert the underlying filing mistake into a wilful contravention sufficient to justify cancellation under S. 10(b). Consequently, the impugned cancellation order could not be sustained on the facts.
Accordingly, the Court set aside the cancellation order and directed the Additional Registrar of Trade Unions I (the respondent) to take a copy of the annual return of the petitioner-union through their auditors for the purpose of compliance with the Trade Unions Act.
Holding and Implications
Holding: The Court allowed the writ petition and set aside the impugned order cancelling the petitioner's registration. The Court directed the Additional Registrar of Trade Unions I to take a copy of the petitioner's annual return from the auditors for compliance with the Act. The petition was allowed with no costs.
Implications for the parties:
- The immediate practical effect is that the cancellation of the petitioner's registration is vacated, and the respondent is required to accept the annual return from the petitioner's auditors for statutory compliance.
- The Court applied and articulated a requirement that cancellation under S. 10(b) involves an element of wilfulness (described in the opinion as intentional, deliberate and with legal consciousness). On the facts before the Court, the non-filing was treated as an auditor's mistake rather than a wilful contravention by the union.
- The opinion does not record a broader pronouncement of binding precedent beyond the legal standard applied to the present facts; the decision's direct effect is limited to setting aside the impugned cancellation and ordering acceptance of the return.
JUDGMENT
1. The petitioner challenges an order by which the registration under the Trade Unions Act, 1926, has been cancelled for non-submission of annual return under S. 28 of the Trade Unions Act, 1926, and also under regulation 18 of the Regulations under the Trade Unions Act.
2. The facts are not in dispute. The annual return of the petitioner-union for the year 1990 should be filed before the Additional Registrar of Trade Unions on or before 30 April 1991, and that the same was not received by the concerned officer. In view of that, a notice was issued by the Additional Registrar of Trade Unions I, Madras. The petitioner-union did not send any reply to the same. As the petitioner did not file the annual return in form “E” on or before 30 April 1991, and also they have not responded to the show-cause notice, dated 10 March 1991, the registration of the union has been cancelled by the impugned order. This order is challenged before this Court.
3. The petitioner alleges in the affidavit that for the year 1990, they had handed over all the relevant papers regarding annual return to the auditor who prepared the statements for filing a return under form ‘X’. It is also alleged in the affidavit that since the auditor has been handing over the returns usually, the petitioner did not give second thought about filing of the annual return. At this stage, a show-cause notice was issued by the respondent herein on 10 May 1991, in form ‘D’ and they were asked to show cause why the registration should not be cancelled for the period 1 January 1990, to 31 December 1990, before 30 April 1991, as per S. 28 of the Trade Unions Act, 1926, and regulation 18 of the Tamilnadu Trade Unions Regulations, 1927. It is also alleged in the affidavit that they have misplaced the notice and that they were assured by the auditor that the annual return was handed over to the respondent in time, no reply was given to the notice issued under form ‘D’. It is also alleged in the affidavit that only when the impugned order is issued, the petitioner-union came to know that the annual report was filed before the Additional Registrar of Trade Unions II by the auditors before the prescribed date and as such there is no wilful or deliberate act of omission or commission on the part of petitioner-union contravening any of the provisions of the Trade Unions Act and that they have complied with S. 28 of the Trade Unions Act and regulation 18 of the regulations framed under the Trade Unions Act. It is also stated that the chartered accountant came to know that his office people have filed the annual return of the petitioner union for the year 1990 containing two copies of ‘E’ forms, office bearers' list of fully paid members and union's bye-laws before the Additional Registrar of Trade Unions II and that the offices of the Additional Registrar of Trade Unions I and II are situate in the same floor and as such a mistake has been committed. It is also stated that the auditor by letter, dated 13 November 1991, addressed to both the Additional Registrars informing them about the filing of returns in the wrong place and also requested them to correct the mistake. It is pointed out in the affidavit that the Additional Registrar of Trade Unions II by letter, dated 16 December 1991, informed the petitioner that he handed over the annual return received from the petitioner-union to the respondent herein, stating that no acknowledgment has been obtained since both offices are situate in the same place. With these allegations, the petitioner-union has come up before this Court.
4. Notice of motion has been ordered by this Court on 20 December 1991.
5. Learned Government Advocate appeared with instructions. The respondent herein, the I Additional Registrar of Trade Unions I (Deputy Commissioner of Labour, I) takes a stand that the petitioner has not filed the annual return in time nor submitted a reply to the show-cause notice and as such there is a violation of the provisions of Trade Unions Act, 1926. Learned Government Advocate also states that there is no infirmity in the order passed by the respondent. It is also pointed out by the learned Government Advocate that records do not show that the return was received by the respondent from the office of the Additional Registrar of Trade Unions II and that usually transfer of records are made only on proper acknowledgment. As such, it is stated that the impugned order is in accordance with law.
6. Sri S. Kumaraswamy, the learned counsel for the petitioner, is not able to deny the factual position that the return was submitted to the Additional Registrar of Trade Unions II and that no reply was given to the show-cause notice issued by the respondent. Learned counsel for the petitioner, however, contends that the action of the petitioner cannot be said to be wilful since the return has been filed before the Additional Registrar of Trade Unions II and that the Additional Registrar of Trade Unions II has also informed that he has transferred the return to the Additional Registrar of Trade Unions I. Learned counsel for the petitioner states that it is a mistake committed by the auditors and that the petitioner-union should not be penalised for the mistake especialy when both the offices are situate in the very same building.
7. Learned Government Advocate reiterates the averments made in the instructions and contends that this is a case where there is a clear violation of S. 28 of the Trade Unions Act, 1926, and also the regulation 18 of the regulations framed under the Act and as such the impugned order cannot be said to be contrary to law. Learned Government Advocate, on instructions, contends that if at all anybody is to be blamed it is only the petitioner-union and that the impugned order cannot be said to be illegal.
8. I have considered the arguments of the learned counsel for the petitioner and of the learned Government Advocate. Section 28 of the Trade Unions Act, 1926, provides for filing of returns which is to the following offect:
“(1) There shall be sent annually to the Registrar, on or before such date as may be prescribed, a general statement, audited in the prescribed manner, of all receipts and expenditure of every registered trade union during the year ending on the 31st day of December next preceding such prescribed date, and of the assets and liabilities of the trade union existing on such 31st day of December. The statement shall be prepared in such form and shall comprise such particulars as may be prescribed.
(2) Together with the general statement there shall be sent to the Registrar a statement showing all changes of office-bearers made by the trade union during the year to which the general statement refers, together also with a copy of the rules of the trade union corrected upto the date of the despatch thereof to the Registrar.
(3) A copy of every alteration made in the rules of a registered trade union shall be sent to the Registrar within fifteen days of the making of the alteration.
(4) For the purpose of examining the documents referred to in Sub-secs. (1), (2) and (3), the Registrar, or any officer authorised by him, by general or special order, may at all reasonable times inspect the certificate of registration, account books, registers, and other documents, relating to a trade union, at its registered office or may require their production at such place as he may specify in this behalf, but no such place shall be at a distance of more than ten miles from the registered office of trade union …”
Regulation 18 of the regulations framed under the Trade Unions Act speaks that the annual return to be furnished under S. 28 shall be submitted to the Registrar on or before 30th day of April, every year and it is to the following effect:
“The annual return to be furnished under S. 28, shall be submitted to the Registrar in duplicate in form ‘G’ on or before the 30th day of April in each year. Every trade union shall also submit such other particulars or information that may be required by the Registrar in connection with the annual return and relating to matters affecting the by-laws…”
Section 9 of the Trade Unions Act, 1926, empowers the Registrar to issue a certificate of registration in the prescribed form. Section 10 of the Act empowers the Registrar to cancel or withdraw the registration and Sub-cl. (b) of S. 10 reads as follows:
“… Cancellation of registration: A certificate of registration of a trade union may be withdrawn or cancelled by the Registrar.
(b) if the Registrar is satisfied that the certificate has been obtained by fraud or mistake or that the trade union has ceased to exist or has wilfully and after notice from the Registrar contravened any provision of this Act or allowed any rule to continue in force which is inconsistent with any such provision, or has rescinded any rule providing for any matter provision for which is required by S. 6 …”
So to exercise the power to cancel the registration, in my view, there should be an element of wilfulness. In order to be wilful, it must be intentional, deliberate, calculated and consciousness with full knowledge of legal consciousness. On the facts of this case, it is seen that the petitioner-union has submitted the relevant papers to the auditor who filed the papers before a wrong place, i.e, before the Additional Registrar of Trade Unions II. This fact has not been denied by the Additional Registrar of Trade Unions II also and he informed the petitioner that he had passed the entire papers to the respondent herein. So the fact remains that the annual return of the petitioner-union had been filed before a wrong officer and that officer had passed on all the papers to the officer concerned, i.e, the respondent herein. It is also to be seen that the offices are situate on the same floor. It is true that the Additional Registrar of Trade Unions II has not obtained any acknowledgment from the Additional Registrar of Trade Unions I. But so far as the authority, constituted under the Trade Unions Act, 1926, addressed a letter to the petitioner herein stating that he had transferred the annual return of the petitioner-union to the concerned officer, I do not see such an action of the petitioner-union can be taken to be wilful. It cannot be said to be deliberate one. It may be true that the petitioner-union should have answered the form ‘D’ notice. The petitioner did not choose to do so. At any rate, since I take the view that the non-filing of the return before the respondent herein before the end of April 1991 is not wilful, the impugned order has got to be set aside and accordingly it is set aside. The Additional Registrar of Trade Unions I (Deputy Commissioner of Labour I) Madras, the respondent herein, is directed to take a copy of the annual return of the petitioner-union through their auditors for the purpose of compliance of the provisions of the Trade Unions Act, 1926. With this direction, this writ petition is allowed. No costs.
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