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Anil Sood v. Presiding Officer, Labour Court Ii .
Factual and Procedural Background
An industrial dispute between the present parties was referred to the Labour Court under the Industrial Disputes Act. The Labour Court passed an ex parte award on 11-09-1995. On 06-11-1995 the appellant applied to the Labour Court asserting that he had received no notice of the reference proceedings and sought to have the award set aside. The Labour Court dismissed that application on the ground that, having already pronounced its award, it was functus officio. A writ petition challenging that view was also dismissed by the High Court. The appellant therefore approached the Supreme Court in these civil appeals. A second appeal (CA No. 7091 of 2000) involved identical questions and was heard and decided along with CA No. 7092 of 2000.
Legal Issues Presented
- Whether, after issuing an ex parte award, a Labour Court becomes functus officio and therefore lacks jurisdiction to entertain an application to set aside that award.
- Whether the record of service of notice on the appellant justified the refusal to reopen the proceedings.
Arguments of the Parties
Appellant's Arguments
- Invoked the ruling in Grindlays Bank Ltd. v. Central Govt. Industrial Tribunal, 1980 Supp SCC 420, to contend that Section 11 of the Industrial Disputes Act confers “ample powers” on a Labour Court to set aside an ex parte award on sufficient cause being shown.
Respondents' Arguments
- Pointed out that the Labour Court’s award itself records that notice had been served on the appellant, who nevertheless failed to appear. Hence the rejection of the appellant’s application was proper and required no interference.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Grindlays Bank Ltd. v. Central Govt. Industrial Tribunal, 1980 Supp SCC 420 | Section 11 of the Industrial Disputes Act empowers Labour Courts/Tribunals to devise their own procedure, including setting aside an ex parte award if sufficient cause is shown; Rule 22 of the Central Rules embodies the power to inquire into absence and restore proceedings. | The Supreme Court followed this authority to conclude that a Labour Court retains jurisdiction, even after pronouncing an ex parte award, to consider an application to set it aside; consequently, the contrary view of the Labour Court and High Court was erroneous. |
Court's Reasoning and Analysis
The Court closely examined the statutory scheme as interpreted in Grindlays Bank. It reiterated that:
- Section 11 distinguishes between the procedure a tribunal may frame for itself and the specific powers vested in it; procedural matters such as granting an opportunity to be heard remain within the tribunal’s control even after an award is passed.
- Rule 22 expressly authorises a tribunal to proceed ex parte and, correlatively, to determine whether sufficient cause existed for a party’s absence and, if so, to set aside the ex parte award.
- An award made without giving the affected party a real opportunity of defence is a nullity; therefore, the power to recall such an award is inherent in the tribunal’s procedural jurisdiction.
Applying these principles, the Court held that both the Labour Court and the High Court erred in viewing the Labour Court as functus officio. In light of the respondents’ concession that the appellant’s application could be allowed, the Supreme Court set aside the ex parte award and restored the reference for fresh adjudication.
Holding and Implications
Appeal Allowed; Ex Parte Award Set Aside; Reference Restored.
The Labour Court is directed to reconvene on 11-12-2000 and to conclude the adjudication within six months. The decision reaffirms that industrial adjudicatory bodies retain jurisdiction to recall ex parte awards where procedural fairness was compromised, but it sets no new precedent beyond applying the principle already articulated in Grindlays Bank.
Order
CA No. 7092 of 2000 @ SLP (C) No. 12759 of 1997
1. Leave granted.
2. A reference was made under the Industrial Disputes Act to the Labour Court in respect of a dispute between the parties to this proceeding. An award was made on 11-9-1995. An application was filed by the appellant on 6-11-1995 averring that he had no notice of the proceedings in the reference. That application came to be dismissed on the ground that the Labour Court has become functus officio having passed an award. Thereupon a writ petition was filed before the High Court which also did not end in their favour. Hence this appeal.
3. Learned counsel for the appellant submitted that there are ample powers with the Labour Court to set aside the award made ex parte if sufficient cause is shown as enunciated by this Court in Grindlays Bank Ltd. v. Central Govt. Industrial Tribunal 1980 Supp SCC 420.
4. Learned counsel for the respondents submitted that in fact a finding had been recorded by the Labour Court in the award that the appellant had been served with notice and in spite of which he did not appear. Therefore in the proceedings he had been set ex parte. He submitted that material is sufficient to hold that there was service of notice upon the appellant and hence there is no cause for the appellant to come before this Court against rejection of the application made by the Labour Court which has been affirmed by the High Court in the writ proceedings.
5. This Court in Grindlays Bank Ltd. case 1980 Supp SCC 420 examined the scheme of the provisions under the Industrial Disputes Act and enunciated that Section 11 of the Industrial Disputes Act conferred ample powers upon the Tribunal to devise its own procedure in the interest of justice which includes powers which bring out the adjudication of an existing industrial dispute. Sub-sections (1) and (3) of Section 11 of the Act thereby indicate the difference between procedure and powers of the Tribunal under the Act, while the procedure is left to be devised by the Tribunal to suit carrying out its functions under the Act, the extent of powers of the civil court are clearly set out.
6. The aspect that the party against whom award is to be made due opportunity to defend has to be given is a matter of procedure and not that of power in the sense in which the language is adopted in Section 11. When matters are referred to the tribunal or court they have to be decided objectively and the tribunals/courts have to exercise their discretion in a judicial manner without arbitrariness by following the general principles of law and rules of natural justice.
7. The power to proceed ex parte is available under Rule 22 of the Central Rules which also includes the power to inquire whether or not there was sufficient cause for the absence of a party at the hearing, and if there is sufficient cause shown which prevented a party from appearing, then if the party is visited with an award without a notice which is a nullity and therefore the Tribunal will have no jurisdiction to proceed and consequently, it must necessarily have power to set aside the ex parte award.
8. If this be the position in law, both the High Court and the Tribunal (sic Labour Court) fell into an error in stating that the Labour Court had become functus officio after making the award though ex parte. We set aside the order made and the award passed by the Labour Court and affirmed by the High Court in this regard, in view of the fact that the learned counsel for the respondent conceded that application filed by the appellant be allowed, set aside the ex parte award and restore the reference. To decide the matter afresh, the parties shall appear before the Labour Court on 11-12-2000 to take further directions as regards the proceedings. As the matter is very old, it would be appropriate for the Labour Court to dispose of this reference as expeditiously as possible but not later than six months from today.
9. Appeal is allowed accordingly.
CA No. 7091 of 2000 @ SLP (C) No. 12758 of 1997
10. Leave granted.
11. The questions that arise in this appeal are identical to those considered by us in CA No. 7092 of 2000 [arising out of SLP (C) No. 12759 of 1997]. In view of the decision in the said appeal and for the reasons stated therein, this appeal is allowed in the same terms as set forth therein. The parties shall appear before the Labour Court on 11-12-2000 to take further directions as regards the proceedings. As the matter is very old, it would be appropriate for the Labour Court to dispose of this reference as expeditiously as possible but not later than six months from today. The appeal is allowed.
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