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Management Of Socklatinga Tea Estate v. N.J Korean And Another

Gauhati High Court
Feb 2, 1968
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Structured Summary of the Opinion: Interpretation of Section 33-C(2) of the Industrial Disputes Act

Factual and Procedural Background

This matter reached the Full Bench of the High Court on an order of reference made by a Division Bench (extract of the reference is reproduced in the opinion). The dispute arises from an application under Section 33-C(2) of the Industrial Disputes Act, 1947, concerning the computation/recovery of benefits payable to a workman.

Parties identified in the opinion:

  • The petitioner: the Management of Socklatinga Tea Estate (represented by Mr. Bhattacharjee).
  • Respondent No. 1: a workman identified as Shri N.J. Korean (represented by Mr. Choudhuri).

Procedural history as stated in the opinion:

  • A Division Bench referred the question of interpretation of Section 33-C(2) to a Full Bench for authoritative determination.
  • The Full Bench was scheduled to be heard by the Chief Justice, Justice Sen and Justice Pathak on 1 February 1968 (per the reference order quoted in the opinion).
  • The Full Bench made a ruling (the petition was allowed and the rule made absolute); the Court directed that each party bear their own costs.

Legal Issues Presented

  1. Whether an application under Section 33-C(2) of the Industrial Disputes Act to determine a benefit capable of being computed in money can be made to a Labour Court which has not been specifically specified by the State Government for that purpose.
  2. Whether the workman may refer a dispute under Section 33-C(2) directly to the Labour Court, or whether the workman must instead apply to the State Government (in accordance with any rules framed by the State) for a reference to the Labour Court.

Arguments of the Parties

Appellant / Petitioner (Management of Socklatinga Tea Estate) — Mr. Bhattacharjee

  • Contended that Section 33-C(2) requires the Labour Court to be specifically specified by the State Government in order for that Labour Court to acquire jurisdiction to determine the computation of benefits; without such specification the Labour Court would not have jurisdiction.
  • Asserted that in the present case the particular Labour Court was not specified by the Government, nor was the matter referred to that Court by the Government under Section 33-C(2).
  • Challenged the binding nature of observations in the earlier Division Bench decision (Sudhindra Kumar Deb v. State of Assam, AIR 1959 Assam 1), arguing that some observations there are obiter and need not govern the present decision.

Respondent No. 1 (Workman) — Mr. Choudhuri

  • Argued that where there is only one Labour Court in the State, there is no need for the State Government to specify that particular Court for the purposes of Section 33-C(2); that single Court should be taken to have jurisdiction to entertain the matter.
  • Relied on a Division Bench decision (Sudhindra Kumar Deb v. State of Assam, AIR 1959 Assam 1) to support the contention that specification is unnecessary where there is only one Labour Court.
  • Also argued (in the context of jurisdictional challenge) that since the petitioner had submitted to the jurisdiction of the Labour Court, the petitioner could not subsequently question the Labour Court's jurisdiction. For this proposition he relied on two single-Bench decisions of the Madras High Court.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Sudhindra Kumar Deb v. State of Assam, AIR 1959 Assam 1 The Division Bench suggested that where there is only one Labour Court in the State, specification of that Court by Government may be unnecessary and that the sole Labour Court would have jurisdiction. The Full Bench regarded the specific observations supporting that proposition as obiter in that earlier decision and expressly disagreed with those observations, holding they do not state the correct law on the subject.
Indian Iron and Steel Co. Ltd. v. Treogi Nath, AIR 1964 Cal 102 That High Court held that Labour Courts' powers are dormant until there is a specific reference by Government; the Government can assign functions and make rules under the Act; a Labour Court cannot exercise jurisdiction absent such assignment/reference. The Full Bench stated its full agreement with these observations and relied on them to support the conclusion that the Labour Court's jurisdiction is not inherent but depends on a specific reference/assignment by the Government (and on compliance with rules framed by the Government).
K. Kanakarathamma v. State of Andhra Pradesh, AIR 1965 SC 304 Supreme Court held that where a court lacks inherent jurisdiction from the inception, the objection to jurisdiction may be taken at any stage of the proceedings. The Full Bench applied this principle to hold that lack of jurisdiction of the Labour Court (because no reference was made under S.33-C(2)) could be raised at any stage and that the Labour Court here had no jurisdiction to dispose of the matter.
Central Bank of India Ltd. v. P.S. Rajagopalan, AIR 1964 SC 743 Case under rules framed by the Central Government where the rules apparently contemplated direct application to the Court (i.e., direct approach to tribunal was competent under the particular rules). The Full Bench distinguished this Supreme Court decision on the ground that the Assam State rules (Assam Industrial Disputes Rules, 1958) are different and require applications to be made to the State Government; therefore Central Bank decision was not applicable to the facts of the present case.
Mannarghat Union Motor Services Ltd. v. Regional Transport Authority, AIR 1953 Mad 59 Single-Bench Madras decisions cited for the proposition that submission to jurisdiction may preclude later objection to jurisdiction. The Full Bench treated these authorities as inapposite in the face of the Supreme Court principle (K. Kanakarathamma) that where there is a lack of inherent jurisdiction the objection can be raised at any stage.
Surya Rao v. Board of Revenue (Settlement of Estates), Madras, AIR 1953 Mad 472 Another single-Bench Madras decision cited for the same submission-to-jurisdiction proposition. Similarly, the Full Bench considered this authority insufficient to defeat the principle that want of inherent jurisdiction is open to be raised at any stage; accordingly it did not prevent the Court from holding the Labour Court lacked jurisdiction.

Court's Reasoning and Analysis

The Court's analysis proceeded in ordered steps grounded on textual interpretation of Section 33-C(2), relevant statutory provisions and the State rules:

  1. Textual interpretation of Section 33-C(2): the sub-section uses the phrase "such Labour Court as may be specified in this behalf by the appropriate Government." The Court read these words strictly to require that the Labour Court must be specifically designated by the State Government for the purpose of determining the monetary value of the benefit in question and that the specific subject-matter should also be indicated ("in this behalf"). From this language the Court concluded that specification by the Government is a precondition to the Labour Court's jurisdiction under S.33-C(2).
  2. Application to the facts: The Court found no material showing that the State Government had specifically earmarked the duties under S.33-C(2) to the single Labour Court functioning in Assam. Therefore, the Court concluded that that Labour Court had not acquired jurisdiction to decide the matter on an application filed directly by the workman.
  3. Role of State rules (Rule 65, Assam Industrial Disputes Rules, 1958): Rule 65 prescribes that an application under Section 33-C must be delivered or sent in triplicate to the Secretary to the Government of Assam, Labour Department, Shillong. Section 33-C(2) is expressly made subject to any rules that may be made under the Act. The Court held that the qualifying phrase "subject to any rules" must be read to mean that the entire procedure under S.33-C(2) is governed by rules framed by the appropriate Government. Because the Assam rule requires application to the State Government, the Court held that a direct application by the workman to the Labour Court is excluded by the rule.
  4. Character of Labour Courts: By reference to earlier authorities (notably the Calcutta High Court in Indian Iron and Steel Co. Ltd. v. Treogi Nath), the Court noted that Labour Courts have limited, essentially ad hoc, jurisdiction tethered to specific references or assignments by the Government; they are not courts of general or residuary jurisdiction. Their powers remain dormant until the Government makes a reference or assigns the function under the Act and rules.
  5. Treatment of conflicting earlier observations: The Court considered the Division Bench observations in Sudhindra Kumar Deb and regarded the particular passages suggesting that specification is unnecessary where there is only one Labour Court as obiter; the Full Bench expressly disagreed with those observations and declined to follow them as laying down the correct law.
  6. Jurisdictional objection timing: Applying the Supreme Court decision in K. Kanakarathamma, the Court held that an objection of lack of inherent jurisdiction could be taken at any stage; therefore the petitioner could challenge the Labour Court's jurisdiction notwithstanding prior conduct that might otherwise suggest submission to jurisdiction.
  7. Distinguishing other Supreme Court authority: The Court distinguished Central Bank of India Ltd. v. P.S. Rajagopalan on its facts because the central rules in that case contemplated direct application to the tribunal — a feature not mirrored in the Assam rules; thus that authority did not control the present case.

Holding and Implications

Holding:

The rule is made absolute and the petition is allowed.

The Court specifically held that:

  • Section 33-C(2) requires that a Labour Court must be specifically specified by the appropriate State Government to determine the monetary computation of a benefit; specification (and reference of the particular matter) is a precondition to the Labour Court's jurisdiction under that provision.
  • Under the Assam Industrial Disputes Rules, 1958 (Rule 65), an application under Section 33-C must be made to the Secretary to the Government (Labour Department). Because the statute makes the sub-section subject to rules, and Rule 65 prescribes submission to the State Government, a workman cannot make a direct application to the Labour Court under Section 33-C(2); the application has to be made to the State Government for a reference.
  • Accordingly, the Labour Court in this case had no jurisdiction to dispose of the matter, because no reference specifying that Labour Court under S.33-C(2) had been made by the State Government.

Implications:

  • Direct practical consequence: The decision resulted in allowance of the petition (the Court set aside or refused to recognize the Labour Court's exercise of jurisdiction in the absence of a Government specification and reference), and the Court directed that each party bear their own costs.
  • On precedent: The Full Bench refused to adopt earlier Division Bench observations (in AIR 1959 Assam 1) that specification is unnecessary where there is only one Labour Court; instead the Full Bench endorsed the view that jurisdiction depends on specific governmental assignment and compliance with rules.
  • No new broader jurisprudential principle beyond the interpretation and application of S.33-C(2) and Rule 65 is asserted; the Court confined its ruling to the statutory text, the state rules and the authorities it deemed applicable or distinguishable. The decision emphasizes the limited/ad hoc nature of labour courts' jurisdiction and the primacy of statutory rule-making by the appropriate Government in conferring jurisdiction under S.33-C(2).

Disposition recorded in the opinion: "Petition allowed." The Court also directed that each party shall bear their own costs.

Show all summary ...

Nayudu, C.J:— This petition comes before us on an order of reference made by a Division Bench of this Court which is extracted below.

2. 27-11-1967 in this case the interpretation of Section 33-C(2) of the Industrial Disputes Act arises for consideration. The contention of Mr. Bhattacharjee is that unless the Labom Court is specified by the State Government under this sub-section, the Labom Court in question would not get jurisdiction to decide the matter whereas Mr. Choudhuri contended that as there is only one Labour Court in the whole State, there is no need to specify the particular Court and that the Labour Court has jurisdiction to entertain the matter in support of this argument he places reliance on a Division Bench decision of this Court in the case of Sudhindra Kumar Deb v. State of Assam, AIR 1959 Assam 1. It is contended by Mr. Bhattacharjee that the observations made in that case are more or less obiter and need not be considered for the decision of this case. However, the pronouncement is fairly specific and clear in that decision. We would, therefore, like the whole matter to be settled once for all by referring the matter to a Full Bench. He matter Page: 16will be heard by the C.J, Justice Sen and Justice Pathak on 1st February, 1968.

(Sd.) C. Sanjeeva bow Nayudu, Chief Justice.

(Sd.) M.C Pathak, Judge.”

3. Two points arise for consideration in this reference: (1) Whether an application for computation of a workman is entitlement under Section 33-C(2) of the Industrial Disputes Act, 1947 (hereinafter called ‘the Act’) could be made to a Labour Court without the same having been specified by the State Government in regard to the dispute that is to be referred to under S. 33-C(2), and (2) whether the workman could refer the dispute under S. 33-C (2) directly to the Labour Court and not by an application to the State Government. Before we consider these points, it would be useful to extract the relevant provisions of the Act. The relevant provisions of Section 7 of the Act, which deals with Labour Courts, is as follows:

“7. (1) The appropriate Government may, by notification in the official Gazette constitute one or more Labour Courts for adjudication of industrial disputes relating to any matters specified in the Second Schedule and for performing such other functions as may be assigned to them under this Act.

4. The Second Schedule to the Act contains the list of matters, which fall within the jurisdiction of the Labour Courts Section 33-C runs as follows:—

“33-C. Recovery of money due from an employer.— (1) Where any money is due to a workman from an employer under a settlement or an award or under the provisions of Chap. V-A, the workman may, without prejudice to any other mode of recovery, make an application to the appropriate Government for the recovery of the money due to him, and if the appropriate Government is satisfied that any money is so due, it shall issue a certificate for that amount to the Collector who shall proceed to recover the same in the same manner as an arrear of land revenue.

(2) Where any workman is entitled to receive from the employer any benefit which is capable of being computed in terms of money, the amount at which such benefit should be computed may, subject to any rules that may be made under this Act, br determined by such Labour Court as may be specified in this behalf by the appropriate Government, and the amount so determined may be recovered as provided for in sub-section (1).

(3) For the purposes of computing the money value of a benefit, the Labour Court may, if it so thinks fit appoint a Commissioner who shall, after taking such evidence as may be necessary submit a report to the Labour Court and the Labour Court shall determine the amount after considering the report of the Commissioner and other circumstances of the case.”

5. It may be seen from the language of S. 33-C(2) that the amount which the workman is entitled to receive is to be determined by the Labour Court, which is specified by the State Government in this behalf in other words, the Labour Court has got to be specifically mentioned and it should also be mentioned by the State Government that a particular matter which is referred to under Section 33-C(2) is to be determined by the Labour Court. Mr. Bhattacharjee, the learned counsel for the petitioner, the Management of Socklatinga Tea Estate contends that the particular Labour Court was not specified, nor was the matter in regard to the dispute in this case mentioned by the Government in a reference to the Labour Court under sub-section (2) of Section 33-C. To this Mr. Choudhuri, the learned counsel for the workman respondent No. 1 Shri N.J Korean, stated that as there has been only one Labour Court for the whole State of Assam, no particular specification is necessary and that all duties that could be performed by the Labour Court under the Act could be performed by that Labour Court, as that is the only Labour Court for the State. It may be that there has been only one Labour Court for the whole State. But that Labour Court, according to the sub-section, has got to be specified for performing this particular duty and no material has been placed before us to show that any such specific earmarking of this duty has been made by the Government in regard to the one Labour Court, which was functioning in the State. In view of the fact that the sub-section uses the word ‘specified’ and also the words ‘in this behalf’, there can be no doubt that the insistence is on the specification as well as with reference to the particular subject-matter of dispute. In the instant case, as it is not specified by the State Government in a reference that the Labour Court, which is the only Labour Court in the State of Assam, is entrusted with the duty of determining the amount payable to the workman respondent No. 1, we feel that the Labour Court had acquired no jurisdiction to dispose of the matter under sub-section (2) of Section 33-C, simply on an application filed before it by the respondent No. 1 It is possible that there may be only one Labour Court and yet the State Government may not entrust certain matters to that Labour Court. The whole object of the sub-section is to reserve the right to the State Government to specify the duty in the particular circumstances of the case, so that these conditions must be complied with before jurisdiction of the Labour Court under Section 33-C(2) could be invoked.

6. In this connection reliance has been placed by Mr. Choudhuri the learned counsel for the respondent No. 1 on a Division Bench decision of this Court in the case of AIR 1959 Assam 1. That was no doubt a case under Section 33-C(2) of the Act. But the facts are materially different, because in that case the application was made to the Labour Court functioning in the State by the State Government, so that the condition required by the sub-section is fulfilled in that case and the only question that arose for determination was whether the cancellation or revocation of the notification to that case was valid or not in that context certain observations appear to have been made Page: 17which we consider are obiter and were not necessary for the determination of that case. The observations are to be found at page 3 of the report:—

“Mr. Choudhury has further contended that even the first notification in that case was unnecessary because in Assam there is only one Labour Court and if that Labour Court could deal with the matter, no specification of the Labour Court was necessary. Of course, sub-sec. (2) speaks of Government specifying the Labour Court to deal with the matter; nevertheless, the statute confers jurisdiction on the Labour Court to act under sub-sec. (2) of S. 33-C and no other Tribunal. It is admitted here that there is only one Labour Court and thus there is substance in the argument that where there is only one Labour Court, apparently that Court alone will have jurisdiction to deal with the matter irrespective of any notification by Government

It is only where there are a number of Labour Courts functioning in a State that specification of the particular Labour Court to take up the matter on the authorisation of Government may be necessary to avoid any conflict of jurisdiction between them; but where there is only one Court, no such conflict arises and that Court will have, on the terms of the statute itself, jurisdiction to determine the dispute between the parties and act under the section aforesaid.”

7. We consider, as already observed, that these observations are mere obiter and if they are to be regarded as making a statement of law on the subject, we respectfully disagree with these observations and hold that they do not lay down the correct law on the subject.

8. The next question to be considered is whether the application in this case could be made directly by the workman respondent No. 1 to the Labour Court, or whether an application should have been made by the workman to the State Government for the purpose of making a reference. In considering this question it will be necessary to refer to Rule 65 of the Assam Industrial Disputes Rules, 1958, which runs as follows:—

“An application under S. 33-C shall be delivered personally or forwarded by registered post in triplicate to the Secretary to the Government of Assam. Labour Department. Shillong.”

9. It is clear from this rule that any application under Section 33-C(1) or Section 33-C(2), as both these sub-sections are covered by S. 33-C, must be made to the Secretary to the State Government of Assam, Labour Department Shillong. The importance of these rules and the necessity for complying with the same are clear from sub-section (2) of Section 33-C. which says that the procedure under the sub-section is subject to any rules that have been made under this Act and these rules are the Assam Industrial Disputes Rules, 1958 framed by the State Government. It is contended by Mr. Choudhuri that the qualifying clause subject to any piles that may be made under this Act should only be read in connection with the computation of the benefit and he accordingly contended that in computing the benefit the rules framed by the State Government would have to be followed. But this interpretation does not follow from the language of the rule. To our mind it would appear that whatever is done under that sub-section should be subject to any rules that may be made under the Act by the State Government, and as the operation of the sub-section in question is subject to the rules and as the rules framed provide that the application should be made to the State Government, it follows that a direct application to the Labour Court by the workman is excluded. This interpretation is accepted by a Bench of the Calcutta High Court in the case of ‘Indian Iron and Steel Co. Ltd. v. Treogi Nath, AIR 1964 Cal 102, where their Lordships observed as follows:—

“The jurisdiction of the Labour Courts is limited by the items specified in the second schedule and even with regard to these their powers are dormant so long as there is no reference to them under Sec. 10(1)(b) or (c) of that Act. The only instance when they can exercise any power without specific reference by the Government seems to be under Sec. 33(3), and Section 33(3) of the Act where it is open to a Labour Court to give permission in writing to an employer to take the steps mentioned in Cls. (a) and (b) of the said sub-sections.

In my view. Section 7(1) only enables the appropriate Government to assign certain functions to Labour Courts within the limits specified by the Act. It seems reasonable to hold that Government can make use of the rule-making powers under Section 38 of the Act for the purpose but nothing appears to have been done in that respect. The expression ‘as may be assigned to them under this Act’ in S. 7(1) does not mean ‘as they are competent to discharge under the Act’. Before a function can be discharged there must be assignation under the Act”

10. We are fully in agreement with these observations. We further hold that the Labour Court is not like a Civil Court or a Court of general or residuary jurisdiction but a Court of specified jurisdiction enumerated by the terms of the order of reference. It may be regarded as an ad hoc Court with an ad hoc jurisdiction to determine specified industrial disputes of matters connected therewith. It is certainly unlike an ordinary Court to which aggrieved parties may resort whenever they think it necessary to do so.

11. We are, therefore, clearly of opinion that an application under Section 33-C(2) cannot be made directly by the workman but the application has to be made to the State Government. It is contended by Mr. Choudhtiry that as the petitioner had submitted himself to the jurisdiction of the Labour Court, it would not be open to the petitioner to question the jurisdiction of the Labour Court in support of this contention he placed reliance on two single Bench decisions of the Madras High Court: (1) Mannarghat Union Motor Services Ltd. v. Regional Transport Authority, AIR 1953 Mad 59 and (2) Surya Rao v. Board of Revenue (Settlement of Estates), Madras, AIR 1953 Mad 472. But the answer is supplied by the decision of the Supreme Court in the case of K. Kanakarathamma v. State of Andhra Pradesh, AIR 1965 SC 304, where their Lordships of the Supreme Court held that whenever there is lack of inherent jurisdiction, the objection could be taken at any stage. At page 306 of the report their Lordships observed as follows:—

“The proviso to sub-sec. (2) prescribes the time within which an application under sub-sec. (1) is to be made. Section 19 provides for the making of a reference by the Collector rind specifies the matters which are to be comprised in that reference. Thus, the matter goes to the Court only upon a reference made by the Collector. It is only after such a reference is made that the Court is empowered to determine the objections made by a claimant to the award. Section 21 restricts the scope of the proceedings before the Court to consideration of the contention of the persons affected by the objection. These provisions thus leave no doubt that the jurisdiction of the Court arises solely on the as is of a reference made to it. No doubt, the Land Acquisition Officer has made a reference under Section 30 of the Land Acquisition Act but that reference was only in regard to the apportionment of the compensation amongst the various claimants. Such a reference would certainly not invest the Court with the jurisdiction to consider a matter not directly connected with it. In that context their Lordships observed that as the jurisdiction is lacking from the inception, the objection could be entertained at any stage. Applying the reasoning of this decision to the facts of the instant case, we hold that as no reference has been made to the Labour Court under Section 33-C(2), the Labour Court had no jurisdiction to dispose of the matter in question. In the circumstances we do not see any force in the contention raised by Mr. Choudhuri that the question of jurisdiction could not be raised before us by the petitioner.

12. Mr. Choudhuri also placed reliance on a decision of the Supreme Court in the case of Central Bank of India Ltd. v. P.S Rajagopalan, AIR 1964 SC 743 : 1963-2 Lab LJ 89. But that was a case arising under the rules framed by the Central Government, which apparently contemplated a direct application to be made to the about Court and as the section itself is subject to the rules framed by the appropriate Govern men and the rules provided for such contingency, it was held that the application was competent. As the rules framed by the State Government of Assam are quite different on the subject, this ruling cannot be held to apply to the facts of this case.

13. In the light of the foregoing discussion the rule is made absolute and the petition is allowed. In the circumstances, however, we direct that each party shall bear their own costs.

HGP/DVC

14. Petition allowed.