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Associated Electrical Industries (India) Private Limited, Calcutta v. Workmen
Factual and Procedural Background
The dispute concerns a claim for bonus for the accounting year 1953-54 made by the workmen of Associated Electrical Industries (India) Private Ltd. The company had already paid a bonus equivalent to two months’ basic wages; the workmen sought four months’ basic wages. The Fourth Industrial Tribunal ultimately directed the employer to pay an additional 15 days’ basic wages. The employer obtained special leave to appeal to the Supreme Court, the leave being expressly restricted to the question of the tribunals’ jurisdiction.
Procedurally, the State Government: (i) referred the dispute to the Fifth Industrial Tribunal on 21 September 1956; (ii) withdrew it and transferred it to the Second Industrial Tribunal on 9 March 1957; and (iii) again withdrew it and transferred it to the Fourth Industrial Tribunal on 10 June 1957. Each transfer order cited Section 33-B of the Industrial Disputes Act, 1947.
Legal Issues Presented
- Whether the State Government’s transfer orders complied with Section 33-B(1) of the Industrial Disputes Act, 1947, which requires the Government to state its reasons in writing when withdrawing and transferring industrial disputes between tribunals.
- Whether the first transfer made on 9 March 1957—before the statutory amendment that broadened the definition of “tribunal” on 10 March 1957—was itself without jurisdiction and thereby tainted subsequent proceedings.
Arguments of the Parties
Appellant's Arguments
- The Government’s transfer orders merely recited that it was “expedient” to transfer the case and therefore failed to state “reasons” as mandated by Section 33-B(1); the consequent proceedings before the Fourth Industrial Tribunal were void for want of jurisdiction.
- The initial transfer dated 9 March 1957 was issued before the statutory amendment that expanded the meaning of “tribunal.” Hence, even if later transfers might be covered by the amendment, the first transfer suffered from an additional jurisdictional defect.
No specific arguments from the respondents are recorded in the opinion.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Bengal Chemical & Pharmaceutical Works Ltd. v. Employees, AIR 1959 SC 633 | Government’s power to transfer proceedings under Section 33-B and the effect of the post-10 March 1957 amendment to “tribunal.” | The Court distinguished the precedent, holding that it offered no assistance to the respondents because the impugned transfer orders lacked stated reasons. |
| State of Bihar v. D.N. Ganguly, (1959) SCR 1191 | Invalidity of transfer orders made before the 10 March 1957 amendment when reasons are not recorded. | Relied upon to conclude that the first transfer on 9 March 1957—and therefore the subsequent proceedings—were invalid. |
Court's Reasoning and Analysis
The Court emphasized that Section 33-B(1) obliges the appropriate Government to record its reasons when withdrawing and transferring industrial disputes. A mere statement that the transfer is “expedient” does not satisfy either the letter or spirit of this statutory requirement. Because none of the three transfer notifications supplied any substantive reasons, they violated Section 33-B(1).
Additionally, the first transfer occurred on 9 March 1957, a day before the statutory amendment expanding the definition of “tribunal” came into force (10 March 1957). Guided by the ruling in State of Bihar v. D.N. Ganguly, the Court held that a transfer made prior to the amendment could not be validated retroactively. Consequently, the entire chain of subsequent proceedings before the Second and Fourth Industrial Tribunals was void.
Holding and Implications
The Supreme Court set aside the award of the Fourth Industrial Tribunal. The original reference made to the Fifth Industrial Tribunal on 21 September 1956 is revived, and the matter is remitted to that Tribunal for disposal in accordance with law. No order was made as to costs.
Implications are confined to the parties: the workmen’s claim will be reheard by the Fifth Industrial Tribunal, and the Fourth Tribunal’s award has no legal effect. The judgment turns on statutory compliance and does not establish a new substantive principle of industrial law beyond reinforcing the mandatory nature of Section 33-B(1).
The Judgment of the Court was delivered by
P.B Gajendragadkar, J.— This appeal by special leave arises from an industrial dispute between the appellant, Associated Electrical Industries (India) Private Ltd., and the respondents, who are its workmen. The dispute was in regard to a claim for bonus made by the respondents for the year 1953-54. The respondents claimed that they should be awarded bonus for the relevant year in the sum equivalent to four months' basic wages. It appears that the appellant had already paid two months' basic wages as bonus to the respondents. As a result of the award the appellant has been directed to pay an additional bonus in the sum of 15 days' basic wages. It is this award which is the subject-matter of the present appeal.
2. Mr Sanyal, who appears for the appellant, has drawn our attention to the fact that special leave has been limited to the question of jurisdiction, and it is that question of jurisdiction which he has raised for our decision. This question arises in this way. The present dispute was first referred for adjudication to the Fifth Industrial Tribunal on September 21, 1956. Thereafter the reference in question was withdrawn from the Fifth Industrial Tribunal and the dispute was referred to the Second Industrial Tribunal on March 9, 1957. That was not the end of this matter. It appears that on June 10, 1957, the dispute was withdrawn from the Second Industrial Tribunal and was referred to the Fourth Industrial Tribunal which ultimately dealt with the dispute.
3. The orders of transfer have been made under Section 33-B of the Industrial Disputes Act, 1947. This section has been enacted in 1956 and it provides inter alia that the appropriate government may by order in writing and for reasons to be stated therein withdraw any proceedings under this Act, pending before an Industrial Tribunal and transfer it for disposal to another Industrial Tribunal. The argument is that though the appropriate government was competent to transfer the proceedings it could exercise its power only after complying with the requirements of Section 33-B, and one of the requirements of the said section is that before making the order of transfer the appropriate government must record reasons for the same. When we turn to the orders by which the reference was withdrawn from one Industrial Tribunal and transferred to another, we find that there is no reason mentioned in any of them. All that the orders purport to say is that it is expedient to withdraw the reference from one tribunal and transfer it to another. In our opinion, the said bare statement made in the orders by which the proceedings are withdrawn from one tribunal and transferred to another does not amount to a statement of reasons as required by Section 33-B(1). It is quite clear that the requirement about the statement of the reason must be complied with both in substance and in letter. To say that it is expedient to withdraw a case from one tribunal and transfer it to another repeatedly on three occasions in respect of the same proceedings is not to give any reason as required by the section. Normally, when an industrial dispute is referred to an industrial court or tribunal, it should be tried before the said court or tribunal, and so the power of transfer can be exercised only for sufficient reasons, in the circumstances of this case we are not prepared to hold that any reasons have been stated as required by the section, and so the orders of transfer cannot be held to be justified under Section 33-B(1). In view of this infirmity in the orders it is conceded that the decision of this Court in Bengal Chemical & Pharmaceutical Works Ltd. v. Employees AIR 1959 SC 633 would not assist the respondents.
4. There is another objection to the validity of the present proceedings before the Fourth Industrial Tribunal. Mr Sanyal has fairly conceded that since the definition of the word “tribunal” prescribed by Section 2(r) of the Act was amended so as to include an Industrial Tribunal constituted before March 10, 1957, it may be assumed that the orders passed by the Government subsequent to March 10, 1957, could attract the provisions of Section 33-B; but he argued that when the first order was passed by which the proceedings pending before the Fifth Industrial Tribunal were withdrawn on March 9, 1957, the position would be different. On that date the definition of the word “tribunal” had not been amended, and so it would be an additional infirmity in the present proceedings before the Fourth Industrial Tribunal. The effect of the amendment in the definition of the Tribunal considered in the light of the provisions of Section 33-B has been discussed by this Court in the case of the Bengal Chemical & Pharmaceutical Works Ltd. AIR 1959 SC 633 where it has been observed that in respect of proceedings pending in a tribunal constituted before March 10, 1957, the Government has the power to transfer them from that date (10-3-1957) to any other tribunal. The impugned transfer in the present case took place on March 9, 1957, and so would not be protected by the definition in question. In that case the withdrawal of the proceedings and their transfer would become invalid as has been held by this Court in state of Bihar v. D.N Ganguly (1959) SCR 1191.
5. In the result the objection raised by the appellant as to the validity of the present proceedings must be affirmed and the award passed by the Fourth Industrial Tribunal must be set aside. As a result of this order the dispute which was originally referred to the Fifth Industrial Tribunal by the notification issued on September 21, 1956, would be revived and the present matter would be sent to the said tribunal for disposal in accordance with law. There will be no order as to costs.
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