- Bookmark
- Share
- CaseIQ
United Commercial Bank Ltd. v. Kartar Singh Campbellpuri .
Factual and Procedural Background
This petition was instituted to quash an order of the Central Government Industrial Tribunal (dated 19-5-1951) which directed the petitioner-bank to pay certain costs and travelling/diem expenses incurred by one A. C. Kakkar, an employee of the petitioner, in connection with proceedings before the Tribunal at Dehra Dun. The Tribunal sat at Dehra Dun between 7-5-1951 and 19-5-1951 and made an order on 19-5-1951 directing Union representatives to be paid single second-class fare both ways and a diem allowance of Rs. 5 per day; the petitioner-bank was specifically directed to pay the expenses incurred by Mr. Kakkar.
The petitioner contended that it was not a party to the proceedings at Dehra Dun, that neither it nor its employees were parties to those disputes, and that Mr. Kakkar did not represent the petitioner or its employees in those proceedings. The petitioner sent a representation dated 1-6-1951; the Tribunal heard a representative of the petitioner at Nainital and confirmed its earlier order on 9-6-1951 (communication of confirmation arrived around 9-7-1951). By a letter dated 10-7-1951 the Tribunal called upon the petitioner to pay the ordered expenses. The petitioner applied to this Court by obtaining a Rule Nisi; the petition was heard and the Court ultimately made the Rule absolute, quashing the orders dated 19-5-1951 and 9-6-1951, and awarded costs to the petitioner (hearing fee assessed at three gold mohurs).
Legal Issues Presented
- Whether the petitioner's proper remedy against the Tribunal's order was by way of an appeal to the Appellate Tribunal under the Industrial Disputes (Appellate Tribunal) Act, 1950 (i.e., whether a person who was not a party to the Tribunal proceedings could appeal under the statutory provisions relied upon).
- Whether the petitioner was entitled to relief from this Court under Article 226 of the Constitution to quash the Tribunal's orders directing it to pay costs and expenses incurred by an employee who was not representing the petitioner in those proceedings.
Arguments of the Parties
Opposite Party's Arguments (as recorded)
- Mr. Sitaram Banerjee for the opposite party argued that the petitioner's proper remedy was to appeal the Tribunal's decision under Section 17 of the Industrial Disputes (Appellate Tribunal) Act, 1950, and not by invoking Article 226 of the Constitution.
- He submitted that the question whether a tribunal has power to award costs against a person who is not a party to the proceeding is a substantial question of law and therefore appealable under section 7(1)(a) of the Appellate Tribunal Act.
- He relied on the case Prokash Krishna v. Radha Madan Gopal (50 Cal W.N. 296) to support a proposition that a stranger can in certain circumstances be the subject of appellate proceedings (this reliance was later rejected by the Court as not supporting that proposition).
Petitioner's Arguments (as recorded)
- The petitioner submitted that the banks which were actual parties to the proceedings at Dehra Dun (and on whose behalf Mr. Kakkar acted) should bear the costs and expenses of Mr. Kakkar.
- The petitioner contended it should not be made liable to pay expenses incurred by Mr. Kakkar because the petitioner was not a party to those proceedings and derived no benefit from them.
- The petitioner also made representations to the Tribunal (letter dated 1-6-1951) and, after the Tribunal confirmed its order, invoked the supervisory jurisdiction of this Court by obtaining a Rule Nisi seeking quashing of the Tribunal's orders.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Prokash Krishna v. Radha Madan Gopal, 50 Cal W.N. 296 | Example of situations where a stranger may be made liable for costs (e.g., when a person uses a "man of straw" or uses another's name as a blind — an abuse of process). | The Court observed that the cited case shows circumstances in which a stranger may be made liable, but it rejected the opposite party's reliance on the case to support the proposition that a stranger can appeal. The Court noted the facts of Prokash did not support that proposition. |
| Asuram Sadasuk v. Sub-Collector, Rajahmundry, 53 Mad. 708 | Illustration where a person who executed a security bond was directed to pay costs despite not being a party, because he had made himself liable under the bond. | Used as an example to show that a stranger can be made liable for costs on recognised principles where the person has created a liability (e.g., by a bond). |
| R. v. Northumberland Compensation Appeal Tribunal, Ex Parte Shaw, (1952) 1 ALL E.R. 122 | Principle that a "speaking order" (an order that states reasons) can be quashed by certiorari if the reasons given are bad in law. | The Court cited this authority to support the proposition that speaking orders are susceptible to certiorari where the reasons are legally bad; the Court considered whether the Tribunal's order contained lawful reasons and whether those reasons justified the making of the order against a stranger. |
| Chandra Shekhar v. Manohar Lal, A.I.R. 1942 All. 233 (Full Bench) | Held that before making an order for costs against a stranger, the stranger should be made a party to the litigation and given an opportunity to be heard. | The Court relied on this Full Bench decision to support the view that the petitioner, being a stranger when the order was passed and not afforded an opportunity to be heard, was entitled to relief; the absence of hearing made the order susceptible to certiorari. |
Court's Reasoning and Analysis
The Court proceeded in a series of legal determinations grounded in statutory interpretation and established principles of judicial procedure:
- Rights of appeal: The Court examined Section 12 of the Industrial Disputes (Appellate Tribunal) Act (as reproduced in the opinion) which permits an appeal "by any party which is aggrieved by the award or decision" (and by the appropriate/central Government in specified circumstances). From this the Court concluded that the right of appeal is a creature of statute and is exercisable only by those expressly or impliedly vested with the power — i.e., a person who is not a party to the proceeding (like the petitioner) could not present an appeal. Consequently, the opposite party's contention that the petitioner should have appealed under the Appellate Tribunal Act was rejected.
- Jurisdiction to award costs to a stranger: The Court analyzed Section 11(7) of the Industrial Disputes Act, noting its broad wording (similar to Section 35 of the Civil Procedure Code) and the absence of the word "party" (unlike Section 35-A CPC). The Court interpreted the omission as deliberate, conferring a wide discretion on the Tribunal to determine by whom and to what extent costs are payable — potentially including persons who are not parties.
- Limits on that discretion: Despite acknowledging the Tribunal's wide jurisdiction, the Court emphasized well-recognised limits: orders imposing costs on strangers are permissible only on established principles (for example, where proceedings are an abuse of process, where liability is created by contract or bond, etc.). The Court cited authorities illustrating such principles.
- Speaking orders and certiorari: The Court noted that a "speaking order" (one that sets out reasons) can be quashed by certiorari if those reasons are bad in law (citing R. v. Northumberland Compensation Appeal Tribunal, Ex Parte Shaw).
- Application to the facts: Applying the above, the Court found the Tribunal's exercise of discretion in this case to be improper. The Tribunal had formulated and applied a principle of its own — treating Union representatives as "office bearers" and directing their employers (the banks) to pay fares and diem allowances even where the representatives had acted for other banks and where the employer banks were not parties to the underlying disputes. The Tribunal expressly acknowledged that there was "no provision for this demand in the Act" but purported to follow an "established practice" and so directed payment.
- Violation of natural justice and absence of party status: The Court held that the order of 19-5-1951 was made without affording the petitioner an opportunity to be heard and was therefore in breach of fundamental principles of judicial procedure. The order was, on that account, an order made without jurisdiction and therefore liable to be quashed by certiorari. Although the petitioner was subsequently heard on 9-6-1951 (when the Tribunal confirmed the earlier order), the fact remains that the petitioner had not been made a party to the original proceeding and thereby had been deprived of a right of appeal under the Appellate Tribunal Act.
- Conclusion of analysis: Taking the statutory scheme, the scope of Section 11(7), the limits on making strangers liable, and the requirement of fair hearing together, the Court concluded that the Tribunal's order was a capricious and improper exercise of discretion and contrary to basic judicial procedure.
Holding and Implications
Holding:
The Rule is made absolute. The orders dated 19th May, 1951 and 9th June, 1951 are quashed; the opposite party is directed to forbear from giving effect to these orders.
Direct consequences and orders:
- The Tribunal's orders (19-5-1951 and 9-6-1951) directing the petitioner to pay the expenses of Mr. A. C. Kakkar are quashed.
- The opposite party (the Chairman, Central Government Industrial Tribunal) is directed not to give effect to those orders.
- The petitioner is entitled to costs of the present proceedings; the hearing fee is assessed at three gold mohurs.
Broader implications:
The opinion limits itself to the direct effect on the parties: it quashes the impugned orders and awards costs to the petitioner. The Court does not purport to lay down any new, general rule beyond applying established principles — namely, that although Section 11(7) confers a wide discretion to award costs (potentially even against a stranger), such discretion must be exercised within recognised legal principles and consistent with fundamental rules of natural justice. No broader legislative or constitutional change is declared in the text of the opinion.
1. This is an application under Article 228 of the Constitution for an appropriate Writ for quashing of an order of an Industrial Tribunal dated 19-5-1951 whereby the petitioner has been directed to pay certain costs and expenses incurred by an employee of the petitioner in connection with certain proceedings before the Industrial Tribunal at Dehra-Dun.
2. The petitioner is a company incorporated under the Indian Companies Act having its registered office at Delhi and its head office at 2 Royal Exchange Place, Calcutta. The respondent is the Chairman, Central Government Industrial Tribunal, Calcutta, having his office at 20/1, Gurusaday Dutt Road, Ballygunge, Calcutta, within the jurisdiction of this Court. The case of the petitioner is that one A.C Kakkar is an employee of the petitioner and Mr. Kakkar represented the employees of several other banks in certain proceedings in connection with industrial disputes between those banks and their employees before the respondent, sitting as Chairman of the Central Government Industrial Tribunal at Debra Dun between 7-5-1951 and 19-5-1951. Neither the petitioner Bank nor its employees were parties to any of the disputes or proceedings dealt with by the respondent at the sitting of the Tribunal at Dehra Dun, nor did Mr. Kakkar attend the proceedings in his capacity as representative of the employees of the petitioner Bank. At the conclusion of the proceedings the respondent by an order made on 19-5-1951 directed that the Union representatives should be paid by the respective banks of which they were employees, single second class fare both ways from their place of duty to Dehra Dun and back and diem allowance at the rate of ss. 5 per day for the days they attended at Dehra Dun. The petitioner was directed to pay the expenses incurred by Mr. Kakkar. The order was made without hearing the petitioner bank which was not a party to the proceedings in which the order was made.
3. The petitioner submits that the Banks which were parties to the proceedings at Dehra Dun and the cause of whose employees the said Mr. Kakkar was representing in those proceedings should bear the costs and expenses of Mr. Kakkar and the petitioner Bank which was not a party to any of the proceedings at Dehra Dan should not be made liable to pay the costs and expenses incurred by Mr. Kakkar in connection with the said proceedings at Dehra Dan. After the order was made and communicated to the petitioner, representation was made on behalf of the petitioner to the respondent by a letter dated 1-6-1951. The respondent thereupon heard a representative of the petitioner at a sitting held at Naini Tal but confirmed the order made by him on 19-5-1951. This order of confirmation was made on 9-6-1951 but was communicated to the petitioner on or about 9-7-1951, and subsequently by a letter dated 10-7-1951 the respondent called upon the petitioner to pay to Mr. Kakkar the expenses ordored to be paid by him. The petitioner thereupon moved this Court and obtained a Rule Nisi.
4. Mr. Sitaram Banerjee who appears for the opposite party has contended that the petitioner's proper remedy is to appeal from the decision of the Tribunal under Section 17 of the Industrial Disputes (Appellate Tribunal) Act, 1950 (Act 48 of 1950) and its remedy is not by way of an application under Article 226 of the Constitution. It is submitted that the question of the power of the tribunal to award costs against one not a party to the proceeding is a substantial question of law and hence the decision is appealable under section 7(1)(a) of the Act.
5. It appears to me that this contention cannot be accepted. The right of appeal is a creature of Statute and it can be exercised only by those in whom the power is vested expressly or impliedly by the Statute. The Industrial Disputes Act, 1947 and the Industrial Disputes (Appellate Tribunal) Act have set up Special Tribunals with special jurisdiction to decide industrial disputes. Section 12 of the Industrial Disputes (Appellate Tribunal) Act, is as follows:
12. Presentation of Appeal —An appeal under this Act against any award or decision of an industrial tribunal may be presented to the Appellate Tribunal by
(i) any party which is aggrieved by the award or decision; or
(ii) the appropriate Government or the Central Government, where it is not the appropriate Government, whether or not such Government is a party to the dispute.”
6. Thus sub-s. (1) of this section entitles only a party aggrieved to present an appeal and not a person who is a stranger to the proceeding. The petitioner was not a party to the proceeding in which the decision directing it to pay certain expenses of its employee was made. It was therefore not open to the petitioner to present an appeal to the Appellate Tribunal. Mr. Banerjee referred to the case in Prokash Krishna v. Radha Madan Gopal, 50 Cal W.N 296 in support of his proposition that a stranger can appeal. But the case does not support that proposition. In that case one of the appellants was a defendant and the other was the next friend of the deity till sometime of the suit and then he was removed by an order of Court. This contention of Mr. Banerjee therefore fails.
7. The question that therefore falls for determination, is whether the petitioner is entitled to any relief in this application under Article 226 of the Constitution. I am of the view that the petitioner is so entitled. Section 11(7) of the Industrial Disputes Act, is in the following terms:
“Subject to the rules made under this Act, the costs of and incidental to any proceeding before a Tribunal shall be in the discretion of the Tribunal and the Tribunal shall have full power to determine by and to whom and to what extent and subject to what conditions, if any, such costs are to be paid and to give all necessary directions for the purposes aforesaid and such costs may on application made to it by the person entitled be recovered as arrears of land revenue or as a public demand by the appropriate Government.”
8. The wording of this section is very similar to the wording of Section 35 of the CPC, and the words “by whom” are extremely wide and give the Tribunal a complete discretion in the matter of costs. The fact that the word “party” has not been used as in Section 35-A of the CPC, gives clear indication that the Legislature deliberately omitted the word “party” in Section 11(7) of the Act in order to confer the largest discretion on the Tribunal to make even a stranger to the proceeding liable for the payment of costs in appropriate cases. There can therefore be no doubt that the Tribunal has jurisdiction to direct a person who is not a party, to pay costs of and incidental to a proceeding, to such person as the Tribunal may direct. The expenses directed to be paid in the present case are those incurred for attending and conducting the proceedings at Dehra Dun and so these are costs incidental to the proceedings. The Tribunal had therefore jurisdiction to direct payment of these costs.
9. It has been held however that if the order impugned is a “speaking order” or in other words an order which on the face of it sets out the reasons for making the order, such an order can be quashed by certiorari if the reasons are bad in law. See R. v. Northumberland Compensation Appeal Tribuml, Ex Parte Shaw, (1952) 1 ALL E.R 122.
10. Now a stranger to a proceeding can be made liable to pay the costs only under certain special circumstances. When a proceeding is an abuse of the process of the Court, costs have been directed to be paid by a stranger to the proceeding. Thus, for example, if a person not a party uses the name of a man of straw as plaintiff or uses the name of another as a blind for himself such conduct is an abuse of the process of the Court and that person can be ordered to pay the costs: Prokash v. Radha Madan Gopal, 50 Cal. W.N 296 at p. 304.
11. So also a person executing a Security Bond has been directed to pay the costs payable under a decree although he was not a party to the suit and no decree was passed against him on the ground that he had made himself liable under the Bond for payment of the costs, Asuram Sadasuk v. Sub-Collector, Rajahmundry, 53 Mad. 708.
12. It is only on well-recognised principles that a Court can make an order for costs against a person not a party to a proceeding.
13. The respondent however has formulated a principle of his own and directed the Banks concerned to pay the expenses of their respective employees although such employees incurred the expenses in representing the interest of others in proceedings to which the Employer Banks were not parties at all. This does not appear to be a proper exercise of the discretion. The order made by the respondent was based on a wrong apprehension of the scope of the power vested in him under the provisions of Section 11(7) of the Industrial Disputes Act (Act 14 of 1947). In dealing with the claim of the representatives for diem allowance the respondent states:
“There is no provision for this demand in the Act but it has been recognised by this time by me also, with some modification, that the Union representatives should be paid as office bearers and representatives of Union and I see no good reason to depart from this establishment practice. I would, therefore, according to modified rates adopted by me direct that the Union representatives would be paid by their banks concerned, single second class fare both ways from their place of duty to Dehra Dun and back as well as Diem allowance at the rate of Rs. 5 (five) per day for the days they attended the proceedings of the Tribunal at Dehra Dun.”
14. The names of the representatives are then set out and the respondent later on states in the order that these representatives should be treated as on duty for the days they attended at Dehra Dun.
15. The petitioner has been directed by this order to pay the railway fares and 13 days' allowance.
16. The Union which has been formed for the purpose of collective bargaining is for the benefit of the employees and for promotion of their interest. It is the employees who are the members of the Union. If the employees have decided that they will be represented in the proceedings by certain selected representatives of the employees, I fail to see on what reasonable principle the employer banks can be made liable to pay the expenses incurred by these representatives, employees. In the present case the petitioner bank had no control over the proceedings at Dehra Dun and if the parties to these proceedings at Dehra Dun had with the assistance of the representatives including Mr. Kakkar prosecuted the proceedings, say, for several months, would it be a reasonable order to direct the petitioner to bear the burden of the entire cost incurred by the representative for these several months although the petitioner was not a party to the proceedings and derived no benefit out of these proceedings? Does it make any difference that only few days' expenses have been directed to be borne by the petitioner? The answers must be in the negative. It may be that the principles on which a Civil Court exercises discretion in awarding costs against strangers to the proceedings in ordinary civil litigation may not have scope for their application in proceedings relating to industrial disputes and certain different principles may have to be applied in the matter of awarding costs in respect of such proceedings, but the so-called principle on the basis of which the petitioner has been directed to pay the expenses of Mr. Kakkar in the present case does not commend to me as a sound exercise of the discretion. It is a capricious exercise of the power.
17. Not only there has been no judicial exercise of the discretion but the Order dated 19th May, 1951 appears to have been passed in violation of the fundamental principles of judicial procedure. There cannot be any doubt that the Tribunal was acting judicially or quasi-judicially in determining the liability for costs and yet no opportunity was afforded to the petitioner to put forward its case and to be heard in the matter.
18. In dealing with the question as to the circumstances under which an order for costs can be made against a stranger to a suit a Full Bench of the Allahabad High Court held that before such an order can be passed the stranger should be made a party to the litigation and he must be given an opportunity of being heard. See Chandra Shekhar v. Manohar Lal, A.I.R 1942 ALL. 233 (F.B).
19. The order of 19th May, 1951 which was passed in violation of the principles of natural justice was thus an order passed without jurisdiction and was liable to be quashed by Certiorari. It appears however that subsequently upon representation being made by the petitioner a representative of the petitioner was heard, on 9th June, 1951 at Naim Tal but the respondent confirmed the order that he made on 19th May, 1951 at Dehra Dun. The petitioner has however not been made a party to the proceeding and has thus been deprived of its right of appeal under the Industrial Disputes (Appellate Tribunal) Act. In the circumstances the petitioner has properly invoked the jurisdiction of this Court under Article 226 of the Constitution.
20. In my view this petition should succeed. The Rule is made absolute. The orders dated 19th May, 1951 and 9th June, 1951 are quashed. The opposite party is directed to forbear from giving effect to these orders. The petitioner is entitled to costs of the present proceedings. Hearing fee is assessed at three gold mohurs.
B/G.M.J
21. Rule made absolute.
Alert