Table of Contents

CHAPTER I-PRELIMINARY

CHAPTER II-AUTHORITIES UNDER THE ACT

CHAPTER IIA-NOTICE OF CHANGE

CHAPTER IIB-GRIEVANCE REDRESSAL MACHINERY

CHAPTER III-REFERENCE OF DISPUTES TO BOARDS, COURTS OR TRIBUNALS

CHAPTER IV-PROCEDURE, POWERS AND DUTIES OF AUTHORITIES

CHAPTER V-STRIKES AND LOCKOUTS

CHAPTER VA-LAY-OFF AND RETRENCHMENT

CHAPTER VB-SPECIAL PROVISIONS RELATING TO LAY-OFF, RETRENCHMENT AND CLOSURE IN

CERTAIN ESTABLISHMENTS

CHAPTER VC-UNFAIR LABOUR PRACTICES

CHAPTER VI-PENALTIES

ANNEXURE I-THE INDUSTRIAL DISPUTES (CENTRAL) RULES, 1957

ANNEXURE II-THE INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1946

ANNEXURE III-THE INDUSTRIAL EMPLOYMENT (STANDING ORDERS) CENTRAL RULES, 1946

ANNEXURE IV-THE TRADE UNIONS ACT, 1926

ANNEXURE V-THE CENTRAL TRADE UNION REGULATIONS, 1938

ANNEXURE VI - REPORT OF THE NATIONAL COMMISSION ON LABOUR, 1969

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER I Preliminary

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER I Preliminary

S. 1. Short title, extent and commencement.—

(1) This Act may be called the Industrial Disputes Act 1947.
1[(2)It extends to the whole of India:

2[* * *]]

(3) It shall come into force on the first day of April, 1947.

1 Subs by Act 36 of 1956, s 2, for the former sub-section (wef 29-8-1956).

2 Proviso omitted by Act 51 of 1970, s 2 and Sch (wef 1-9-1971).

End of Document
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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER I Preliminary

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER I Preliminary

S. 2. Definitions.—
In this Act, unless there is anything repugnant in the subject or context-

(a) ‘appropriate government’ means-

(i) in relation to any industrial dispute concerning 3[* * *] any industry carried on by or under the authority of
the Central Government 4[* * *] or by a railway company 5[or concerning any such controlled industry as
may be specified in this behalf by the Central Government] 6[* * *] or in relation to an industrial dispute
concerning 7[a Dock Labour Board established under section 5A of the Dock Workers (Regulation of
Employment) Act, 1948 (9 of 1948), or8[the Industrial Finance Corporation of India Limited formed and
registered under the Companies Act, 1956 (1 of 1956)], or the Employees’ State Insurance Corporation
established under section 3 of the Employees’ State Insurance Act, 1948 (34 of 1948), or the Board of
Trustees constituted under section 3A of the Coal Mines Provident Fund and Miscellaneous Provisions Act,
1948 (46 of 1948), or the Central Board of Trustees and the State Boards of Trustees constituted under
section 5A and section 5B, respectively, of the Employees’ Provident Fund and Miscellaneous Provisions
Act, 1952 (19 of 1952), 9[* * *] or the Life Insurance Corporation of India established under section 3 of the
Life Insurance Corporation Act, 1956 (31 of 1956), or 10[the Oil and Natural Gas Corporation Limited
registered under the Companies Act, 1956 (1 of 1956)], or the Deposit Insurance and Credit Guarantee
Corporation established under section 3 of the Deposit Insurance and Credit Guarantee Corporation Act,
1961 (47 of 1961), or the Central Warehousing Corporation established under section 3 of the Warehousing
Corporations Act, 1962 (58 of 1962), or the Unit Trust of India established under section 3 of the Unit Trust
of India Act, 1963 (52 of 1963), or the Food Corporation of India established under section 3, or a Board of
Management established for two or more contiguous States under section 16, of the Food Corporations Act,
1964 (37 of 1964), or 11[the Airports Authority of India constituted under section 3 of the Airports Authority
of India Act, 1994 (55 of 1994)], or a Regional Rural Bank established under section 3 of the Regional Rural
Banks Act, 1976 (21 of 1976), or the Export Credit and Guarantee Corporation Limited or the Industrial
Reconstruction Bank of India Limited], 12[the National Housing Bank established under section 3 of the
National Housing Bank Act, 1987 (53 of 1987) or] 13[14[an air transport service, or a banking or an insurance
company,] a mine, an oil-field,] 15[a Cantonment Board,] or a 16[major port, any company in which not less
than fifty-one per cent. of the paid-up share capital is held by the Central Government, or any corporation,
not being a corporation referred to in this clause, established by or under any law made by Parliament, or the
Central public sector undertaking, subsidiary companies set up by the principal undertaking and autonomous
bodies owned or controlled by the Central Government, the Central Government and]
17[(ii) in relation to any other industrial dispute, including the State public sector undertaking, subsidiary
companies set up by the principal undertaking and autonomous bodies owned or controlled by the State
Government, the State Government:

Provided that in case of a dispute between a contractor and the contract labour employed through the
contractor in any industrial establishment where such dispute first arose, the appropriate Government
shall be the Central Government or the State Government, as the case may be, which has control over
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such industrial establishment.]

18 [(aa) “arbitrator” includes an umpire;]

19[20[(aaa) “average pay” means the average of the wages payable to a workman—
(i) in the case of monthly paid workman, in the three complete calendar months,
(ii) in the case of weekly paid workman, in the four complete weeks,
(iii) in the case of daily-paid workman, in the twelve full working days,

preceding the date on which the average pay becomes payable if the workman had worked for three
complete calendar months or four complete weeks or twelve full working days, as the case may be, and
where such calculation cannot be made, the average pay shall be calculated as the average of the wages
payable to a workman during the period he actually worked;]

21[(b) “award” means an interim or a final determination of any industrial dispute or of any question relating thereto
by any Labour Court, Industrial Tribunal or National Industrial Tribunal and includes an arbitration award made
under Section 10-A;]
22[(bb) “Banking Company” means a banking company as defined in Section 5 of the Banking Companies Act, 1949
(10 of 1949)23, having branches or other establishments in more than one State, and includes 24[the Export-Import
Bank of India] 25[the Industrial Reconstruction Bank of India,] 26[* * *] 27[the Small Industries Development
Bank of India established under section 3 of the Small Industries Development Bank of India Act, 1989 (39 of
1989),] the Reserve Bank of India, the State Bank of India, 28[a corresponding new bank constituted under section
3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), 29[a
corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1980 (40 of 1980), and any subsidiary bank]], as defined in the State Bank of India
(Subsidiary Banks) Act, 1959 (38 of 1959);]
(c) “Board” means a Board of Conciliation constituted under this Act;
30[(cc) “closure” means the permanent closing down of a place of employment or part thereof;]
(d) “conciliation officer” means a conciliation officer appointed under this Act;
(e) “conciliation proceeding” means any proceeding held by a conciliation officer or Board under this Act;
31[(ee) “controlled industry” means any industry the control of which by the Union has been declared by any Central
Act to be expedient in the public interest;]

32[***]

(f) “Court” means a Court of Inquiry constituted under this Act;

(g) “employer” means—
(i) in relation to an industry carried on by or under the authority of any department of 33[the Central
Government or a State Government,] the authority prescribed in this behalf, or where no authority is
prescribed, the head of the department;
(ii) in relation to an industry carried on by or on behalf of a local authority, the chief executive officer of that
authority;
34[(gg) “executive” in relation to a trade union, means the body, by whatever name called, to which the management
of the affairs of the trade union is entrusted].
35[(h) “Federal Railway” * * *]
(i) a person shall be deemed to be “independent” for the purpose of his appointment as the Chairman or other
member of a Board, Court or Tribunal, if he is unconnected with the industrial dispute referred to such Board,
Court or Tribunal or with any industry directly affected by such dispute:

36[Provided that no person shall cease to be independent by reason only of the fact that he is a shareholder of

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an incorporated company which is connected with, or likely to be affected by, such industrial dispute; but in
such a case, he shall disclose to the appropriate Government the nature and extent of the shares held by him
in such company;]

37[(j) “industry” means any business, trade, undertaking, manufacture or calling of employers and includes any
calling, service, employment, handicraft, or industrial occupation or avocation of workmen;]
(k) “industrial dispute” means any dispute or difference between employers and employers, or between employers
and workmen, or between workmen and workmen, which is connected with the employment or non-employment
or the terms of employment or with the conditions of labour, of any person;
38[(ka) “Industrial establishment or undertaking” means an establishment or undertaking in which any industry is
carried on:

Provided that where several activities are carried on in an establishment or undertaking and only one or some
of such activities is or are an industry or industries, then,—

(a) if any unit of such establishment of undertaking carrying on any activity, being an industry, is severable from
the other unit or units of such establishment or undertaking, such unit shall be deemed to be a separate
industrial establishment or undertaking;
(b) if the predominant activity or each of the predominant activities carried on in such establishment or
undertaking or any unit thereof is an industry and the other activity or each of the other activities carried on
in such establishment or undertaking or unit thereof is not severable from and is, for the purpose of carrying
on, or aiding the carrying on of, such predominant activity or activities, the entire establishment or
undertaking or, as the case may be, unit thereof shall be deemed to be an industrial establishment or
undertaking;]
39[(kk) “insurance company” means an insurance company as defined in section 2 of the Insurance Act, 1938 (4 of
1938), having branches or other establishments in more than one State;]
40[(kka) “khadi” has the meaning assigned to it in clause (d) of section 2 of the Khadi and Village Industries
Commission Act, 1956 (61 of 1956);]
41[[(kkb)] “Labour Court” means a Labour Court constituted under section 7 ;]
42[(kkk) “lay-off” (with its grammatical variations and cognate expressions) means the failure, refusal or
inability of an employer on account of shortage of coal, power or raw materials or the accumulation of stocks or
the breakdown of machinery 43[or natural calamity or for any other connected reason] to give employment to a
workman whose name is borne on the muster rolls of his industrial establishment and who has not been
retrenched.

Explanation.—Every workman whose name is borne on the muster rolls of the industrial establishment and
who presents himself for work at the establishment at the time appointed for the purpose during normal
working hours on any day and is not given employment by the employer within two hours of his so
presenting himself shall be deemed to have been laid-off for that day within the meaning of this clause:

Provided that if the workman, instead of being given employment at the commencement of any shift for any
day is asked to present himself for the purpose during the second half of the shift for the day and is given
employment then, he shall be deemed to have been laid-off only for one-half of that day:

Provided further that if he is not given any such employment even after so presenting himself, he shall not be
deemed to have been laid-off for the second half of the shift for the day and shall be entitled to full basic
wages and dearness allowance for that part of the day];

(l) “lock-out” means the 44[temporary closing of a place of employment], or the suspension of work, or the refusal
by an employer to continue to employ any number of persons employed by him;
45[(la) “major port” means a major port as defined in clause (8) of section 3 of the Indian Ports Act, 1908 (15 of
1908);

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(lb) “mine” means a mine as defined in clause (j) of sub-section (1) of section 2 of the Mines Act, 1952 (35 of 1952);]
46[(ll) “National Tribunal” means a National Industrial Tribunal constituted under section 7B ;]
47[(lll) “office bearer”, in relation to a trade union, includes any member of the executive thereof, but does not
include an auditor;]
(m) “prescribed” means prescribed by rules made under this Act;
(n) “public utility service” means—
(i) any railway service 48[or any transport service for the carriage of passenger or goods by air;]
49[(ia) any service in, or in connection with the working of, any major port or dock;]
(ii) any section of an industrial establishment, on the working of which the safety of the establishment or the
workmen employed therein depends;
(iii) any postal, telegraph or telephone service;
(iv) any industry which supplies power, light or water to the public;
(v) any system of public conservancy or sanitation;
(vi) any industry specified in the 50[First Schedule] which the appropriate Government may, if satisfied that
public emergency or public interest so requires, by notification in the Official Gazette, declared to be a
public utility service for the purposes of this Act, for such period as may be specified in the notification:

Provided that the period so specified shall not, in the first instance, exceed six months but may, by a like
notification, be extended from time to time, by any period not exceeding six months, at anyone time if in
the opinion of the appropriate Government public emergency or public interest requires such extension;

(o) “railway company” means a railway company as defined in section 3 of the Indian Railways Act, 1890 (9 of
1890);51
52[(oo)] “retrenchment” means the termination by the employer of the service of a workman for any reason
whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include—
(a) voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age of superannuating if the contract of employment between the
employer and the workman concerned contains a stipulation in that behalf; or
53[(bb) termination of the service of the workman as a result of the non-removal of the contract of
employment between the employer and the workman concerned on its expiry or of such contract being
terminated under a stipulation in that behalf contained therein; or]
(c) termination of the service of a workman on the ground of continued ill-health;
54[(p) “settlement” means a settlement arrived at in the course of conciliation proceeding and includes a written
agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceeding
where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy
thereof has been sent to 55[an officer authorised in this behalf by] the appropriate Government and the
conciliation officer;]
(q) “strike” means a cessation of work by a body of persons employed in any industry acting in combination, or a
concerted refusal, or a refusal under a common understanding, of any number of persons who are or have been so
employed to continue to work or to accept employment;
56[(qq) “trade union” means a trade union registered under the Trade Unions Act, 1926 (16 of 1926);]
57[(r) “Tribunal” means an Industrial Tribunal constituted under section 7A and includes an industrial Tribunal
constituted before the 10th day of March, 1957, under this Act;]
58[(ra) “unfair labour practice” means any of the practices specified in the Fifth Schedule;]
59[(rb) “village industries” has the meaning assigned to it in clause (h) of section 2 of the Khadi and Village
Industries Commission Act, 1956 (61 of 1956);]

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60[(rr) “wages” means all remuneration capable of being expressed in terms of money, which would, if the terms of
employment, express or implied, were fulfilled, be payable to a workman in respect of his employment or of
work done in such employment, and includes—
(i) such allowance (including dearness allowance) as the workman is for the time being entitled to;
(ii) the value of any house accommodation, or of supply of light, water, medical attendance or other amenity or
of any service or of any concessional supply of foodgrains or other articles;
(iii) any travelling concession;
61[(iv) any commission payable on the promotion of sales or business or both;]

but does not include—

(a) any bonus;

(b) any contribution paid or payable by the employer to any pension fund or provident fund or for the
benefit of the workman under any law for the time being in force;
(c) any gratuity payable on the termination of his service;]
62[(s) “workman” means any person (including an apprentice) employed in any industry to do any manual,
unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of
employment be express or implied, and for the purposes of any proceeding under this Act in relation to an
industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection
with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute,
but does not include any such person—
(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act,
1957 (62 of 1957); or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding 63[ten thousand rupees] per mensem
or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him,
functions mainly of a managerial nature].

CONSTRUCTION

Unless there is anything repugnant in the subject or context

The definition of a word or phrase in the definition section of a statute does not necessarily apply to every context in which
the word or the phrase may appear. If the word or phrase is used in a context in which the definition will not fit in, then the
word or phrase has to be interpreted according to its ordinary meaning. When a statute does not contain the qualifying
words ‘unless there is anything repugnant in the subject or context’, those qualifying words are always understood. Words
must take their colour from the context and need not have the same meaning in every section.64The definition section is a
dictionary for the purpose of the Act but the expressions which are defined may be used in different senses and with a
meaning of a limited character.65Where an Act, like the General Clauses Act, is enacted in order to shorten the language
used in parliamentary legislations and to avoid a repetition of the same words in the course of the same piece of legislation,
it is not meant to give a hide-bound meaning to terms and phrases generally occurring in the legislation. This is the reason
why the definition sections contain words like ‘unless there is anything repugnant in the subject or context’. Words and
phrases have either a very narrow or a very wide significance, according to the requirements of the context and subject of
the legislation, which would decide whether the one or the other meaning is to be attached to such words or phrases. The
statute book contains many illustrations showing that the same words have been used in different senses in different
contexts.66 In Bennett Coleman, in view of the words ‘unless the context otherwise requires’, preambling the definition
section of the Working Journalists and other Newspaper Employees’ (Conditions of Service) and Miscellaneous Provisions
Act 1955, construing the words ‘who is employed’ in the definition of the ‘Working Journalist’, the Supreme Court held
that even an ex-employee could resort to the protection of the Act with respect to the claims which accrued to him while he
was in employment, even after ceasing to be in employment.67

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Means

When a statute says that a word or phrase shall ‘mean’ not merely ‘include’—certain things or acts, the definition is a hard
and fast definition, and no other meaning can be assigned to the expression than, that which is put down in the definition.68
In other words, the legislature intends to exhaust the significance of the term defined.69

Includes

‘Shall include’ is a phrase of extension and does not restrict the definition; it is not equivalent to ‘shall mean’.70 ‘Include’
is generally used in interpretation clauses, in order to enlarge the meaning of words or phrases occurring in the body of the
statute; and when it is so used, these words or phrases must be construed as comprehending, not only such things as they
signify according to their natural import, but also those things which the interpretation clause declares that they shall
include. When the word ‘includes’ is used in a definition, the legislature intends the definition to be enumerative, but not
exhaustive. That is to say, the term defined will retain its ordinary meaning, but its scope would be extended to bring
within it matters, which its ordinary meaning mayor may not comprise.71But ‘include’ is susceptible of another
construction, which may become imperative if the context of the Act is sufficient to show that it was not merely employed
for the purpose of adding to the natural significance of the words or expressions defined. It may be equivalent to ‘mean and
include’, and in that case, it may afford an exhaustive explanation of the meaning, which, for the purposes of the Act, must
invariably be attached to those words.

Need for Common Definitions

Stressing the need for simplicity and uniformity in the definitions of terms constantly used in the labour laws, the NCL-II
observed:

One of the most important steps that one needs to take in rationalising and simplifying the existing labour laws is in the area of
simple common definitions of terms that are in constant use; such terms include ‘worker’, ‘wages’ and ‘establishment’. By making
the law applicable to establishments employing 20 or more Workers, irrespective of the nature of the activity in which the
establishment is engaged, we have avoided the need to define ‘industry’. After examining all aspects of the question, we have
come to the conclusion that the persons engaged in domestic service are better covered under the proposed type of umbrella
legislation, particularly in regard to wages, hours of work, working conditions, safety and social security.72

Clause (a): APPROPRIATE GOVERNMENT

Evolution

The term ‘appropriate government’ was not defined in the Trade Disputes Act 1929 (7 of 1929). The term was defined by s
2(a) of the Industrial Disputes Act 1947. Before it reached its present form, the definition had undergone a number of
amendments, which have been indicated in the footnotes to the text of the section. The definition is exhaustive. It is not
discriminatory or unconstitutional and does not contravene the principle of equality under Art. 14 of the Constitution.73

Sub-Clause (i): Central Government

In relation to any industrial dispute concerning an industrial undertaking or establishment enumerated in this clause, the
Central Government is the appropriate government. In a union territory like Delhi, the central and the state governments
merge and it is immaterial whether an order of reference is made by the one or the other.74 The word ‘concerning’,
according to Webster’s Third New International Dictionary, means ‘relating to, regarding, respecting, about-an affair that
concerns one:..’. The word ‘concerning’ must be construed in a reasonable manner, and as referring to such ‘industrial
disputes’ as have got a proximate, intimate and real connection with the establishments or authority mentioned in the
definition, and it must not be taken to refer to a connection which is farfetched, remote and hypothetical. It would,
therefore, be a question of fact, in each case, to be decided with reference to the facts of that case, as to whether an
‘industrial dispute’ concerns any of the corporations or authorities mentioned in the definition or not.75

Any industry carried on by or under the authority of the Central Government

Before discussing the judicial gloss on this highly controversial definition with special reference to the phrase “by or under
the authority of the Central Government”, it is pertinent to bring to the notice of the readers that s 2(a) has been amended
by the Parliament by ID Amendment Act 2010, whereby the following phrases were inserted in sub-cl (i) and sub-cl (ii) of
cl (a) of s 2, ie, ‘appropriate Government’ after the words ‘major port’:

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76[any company in which not less than fifty-one percent of the paid-up share capital is held by the Central Government, or any
corporation, not being a corporation referred to in this clause, established by or under any law made by the Parliament, or the
Central public sector undertaking, subsidiary companies set up by the principal undertaking and autonomous bodies owned or
controlled by the Central Government,] the Central Government, and

(ii) 77[in relation to any other industrial dispute, including the State public sector undertaking, subsidiary companies set up by the
principal undertaking and autonomous bodies owned or controlled by the State Government, the State Government;

Provided that in case of a dispute between a contractor and the contract labour employed through the contractor in any industrial
establishment where such dispute first arose, the appropriate Government shall be the Central Government or the State
Government, as the case may be, which has control over such industrial establishment.]

In view of the said amendment of major significance, most of the law laid down by High Courts and the Supreme Court in
the pre-amendment phase will have no application to cases arising in the post-amendment phase, in so far as the Central
Public Sector undertakings and Statutory Corporations falling within the above parameters are concerned. Viewed thus, a
large majority of the decisions discussed below, which were rendered in the pre-amendment phase - on the question which
is the appropriate government in respect of a central public sector undertaking: is it the central government or the state
government in whose territorial jurisdiction the unit is located? - stand reduced to mere academic discussion and research
work, with no practical application to disputes arising after 2010. With these introductory remarks, let us take a look at the
welter of confusing judicial trends that ruled the industrial relations firmament for over six decades.

In construing the phrase ‘carried on by or under the authority of the Central Government,’ in the definition of ‘appropriate
government’ in s 2(a) of the Act, there being nothing to the contrary in that provision, the word ‘authority’ must be
construed according to its ordinary meaning and, therefore, must mean a legal power given by one person to another to do
an Act. In other words, a person is said to be authorised or to have authority when he is in such a position that he can Act
in a certain manner without incurring liability, to which he would be exposed but for the authority, or, so as to produce the
same effect as if the person granting the authority had for himself, done the Act. The words ‘under the authority of, mean
pursuant to the authority, such as where an agent or servant acts under such authority of his principal.78 These words mean
much the same as ‘on behalf of’.79 This phrase must, therefore, mean and is intended to apply to industries carried on
directly under the authority of the Central Government.80 For an industry to be carried on under the authority of the Central
Government, it must be an industry belonging to the Central Government, that is to say, its undertaking.81 The expression
‘carried on by or under the authority of the Central Government’ involves a direct nexus with the industry, through
servants or agents of the Central Government.82 In order to come within the purview of this expression, an industry must
be acting pursuant to the authority of the Central Government, as if it were an agent or servant of the Central Government
with the latter as its principal.83 Thus, an industry carried on by or under the authority of the Central Government is a
Central Government industry, which may be carried on directly by the Central Government or by some body or person
nominated by the government for that purpose. The definition of the employer in s 2(g) of the Act, which also uses the
same words, viz, ‘carried on by or under the authority of the government, means either an industry carried on directly by a
department of the government, such as posts and telegraphs or the railways, or one carried on by such department, through
the instrumentality of an agent.84

Under s 80 of the Punjab Reorganisation Act 1966, from the appointed date, ie, 1 November 1966, the Beas Dam Project
was to be ‘carried on’ by the Central Government, although the Central Government was to Act on behalf of the successor
states and the State of Rajasthan. It was held that in relation to an industrial dispute between the project and its workmen,
subsequent to the appointed day, the appropriate government to make a reference was the Central Government, and not the
State of Punjab.85Likewise, Central Electro Chemical Research Institute, which is one of the national laboratories
established by the Council of Scientific and Industrial Research, has been held to be controlled by and ‘carried on or under
the authority of the Central Government, for the purpose of the Act.’ Accordingly, the appropriate government is the
Central Government, and not the state government.86 No business owned or carried on by a private person or a limited
company can be a business carried on by or under the authority of the government.87 Likewise, industries which are carried
on by incorporated commercial corporations, which are governed by their own constitutions, for their own purposes,
cannot be described as carried on by or under the authority of the Central Government as these corporations are
independent legal entities and run the industries for their own purposes. Even if the Central Government owns the entire
share capital and controls such corporations, the industries carried on by them are still worked under the authority of their
own constitutions or charters. 88

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In Heavy Engineering Mazdoor Union, the State of Bihar referred an industrial dispute between the heavy engineering
corporation, a company incorporated under the Companies Act 1956, and its workmen, for adjudication, to the industrial
tribunal. The reference was challenged in a writ petition by the mazdoor union before the High Court of Patna, contending
that the ‘appropriate government’ to refer the dispute was the Central Government and not the state government. The High
Court rejected the contention and upheld the validity of the order of reference.89 In appeal, by special leave against the
holding of the High Court, a two judge Bench of the Supreme Court affirmed the holding of the High Court as it held that
the words ‘under authority of’ mean ‘pursuant to the authority’, like an agent or servant acting under or pursuant to the
authority of its principal or master. Since the corporation could not be said to be carrying on its business pursuant to the
authority of the Central Government, it was not acting under the authority of the Central Government.

Relying on common law interpretation, the Bench took the view that the company derives its powers and functions from its
memorandum and articles of association. The fact that the entire share capital was contributed by the Central Government
and all the shares were held by the President and officers of the Central Government, who were incharge of the
management of the corporation, was not relevant, as the shareholders and the corporation were distinct entities. And the
fact that the President of India and certain officers of the Central Government held all its shares did not make the company
an agent either of the President or of the Central Government. The power to decide as to how the company should
function, how the directors should be appointed and how the wages and salaries payable by the company to its employees
should be determined, were all derived from the memorandum and articles of association of the corporation and not by
reason of the company being an agent of the Central Government. Therefore, on the basis of the incorporation of the
company and in view of the law of principal and agent as regards a company registered under the Companies Act, the court
came to the conclusion that the State of Bihar was the appropriate government, and not the Central Government. This
holding was followed by a three judge Bench of the court in Hindustan Aeronautics, in which the dispute related to the
workmen employed in the Barrackpore branch of Hindustan Aeronautics, whose Head Office is located in Bangalore. The
Supreme Court rejected the contention that the appropriate government was the Central Government or, in the alternative,
Karnataka Government, and held that West Bengal was the appropriate government.90

In Rashtriya Mill Mazdoor Sangh, another three judge Bench considered the purport of the expression ‘under the authority
of any department of the Central Government’ for the purpose of payment of bonus, while interpreting s 32(4) of the
Payment of Bonus Act. The court held that the industrial undertaking had its own personality and status despite the power
exercised by the Central Government, which directed the management and subjected it to regulatory control.91 These two
decisions were followed by a two judge Bench decision of the court in Food Corporation.92 In Air India Statutory Corpn,
K Ramaswamy J held that the corporations and companies held and controlled by the central and state governments will be
the instruments of centre and states respectively within the meaning of Art. 12 of the Constitution.93 Therefore, after this
decision, the law laid down by the court in the earlier dicta,94 stands overturned. So also do the holdings of the Karnataka,1
Delhi,2 Kerala,3 Bombay,4 Patna,5 Madras6 and Bombay,7 High Courts.

In Bharat Glass Works, the question, before Calcutta High Court was whether an undertaking, the management and control
of which was taken over by the Central Government, could be said to be an industry ‘carried on by or under the authority
of the Central Government.’ Subsequent to the said takeover, the State of West Bengal referred an industrial dispute
between the company and its workmen, to an industrial tribunal, for adjudication. The order of reference was challenged
before the Calcutta High Court on the ground that an industry which is ‘controlled’ in the manner laid down under that
Act, must be held to be ‘carried on under the authority of the Central Government’. A single judge of the High Court
negatived the contention, holding that a business which is carried on by or under the authority of the Central Government
must be a Central Government business. In other words, an industry, to be ‘carried on by or under the authority of the
Central Government’, must be an industry ‘belonging to the Central Government, that is to say, its own undertaking’.8

In DP Kelkar, the Bombay High Court held that under the provisions of Ch IIIA, the management and control of the
establishment is completely taken away from the directors and substantially from the shareholders, and the effective
management and control of the Central Government, through the authorized controller, is substituted. In the circumstances,
it is impossible not to hold that the industrial undertaking is being ‘carried on under the authority of the Central
Government’.9

In National Textile Corpn, dissenting from DP Kelkar, the Allahabad High Court declined to accept the temporary external
control of the management of the mills as tantamounting to an abrogation of the proprietary rights and ownership of the
mills, which continued with the company only, and held that the industry in respect of the mills, on account of their
management being taken over in accordance with the provisions of the Industries (Development and Regulation) Act 1951,
could not be said to be carried on by or under the authority of the Central Government.10 This point may not be covered by
the ratio of the holding of the Supreme Court in Air India Statutory Corporation (supra), because such a company cannot
be said to be an instrument of the state. But as long as its control and management vests with the Central Government,
under the Industries (Development & Regulation) Act, it cannot be gainsaid that factually, it is ‘carried on under the

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authority of the Central Government’, by virtue of the provisions of that Act. Hence, the ‘appropriate government’ to refer
a dispute to, between such company and its workmen, would be the Central Government. The view expressed by
Ramaswamy J in Air India Statutory Corporation, does not seem to have found favour with several High Courts.

In Cotton Corporation, the Karnataka High Court held that merely because the government of India was holding a
majority of the shares in the Cotton Corporation of India, and was exercising control over corporation, it could not be said
that the Central Government was the appropriate government within the meaning of s 2(a)(i). On this view of the matter,
the court held that the state government, within whose territorial jurisdiction the dispute arose, would be the appropriate
government.11 In respect of Castrol (India) Ltd, which deals in lubricants, the Central Government is the appropriate
government, as it falls within the category of industries engaged in the manufacture or production of mineral oil, motor and
aviation spirit, diesel oil, kerosene oil, etc, which have been declared as controlled industries within the meaning of s
2(a)(i), by a notification issued on 6 May 1994.12 Where a reference was made by the state government regarding a dispute
relating to Hindustan Aeronautics Ltd, it was challenged on the basis of the ratio of Air India Statutory Corpn. A single
judge of the Bombay High Court repelled the contention and held that the said decision in Air India Statutory Corpn was
rendered in connection with the Contract Labour (Regulation and Abolition) Act 1970, and hence, it had no application to
a case falling under the Industrial Disputes Act and that, being a decision by a Bench of three-judges, it could not be said
to overrule the earlier decision given by a co-ordinate Bench in Hindustan Aeronautics,13to the effect that the state
government was the appropriate government for the purpose of Industrial Disputes Act.14

In Saudi Arabian Airlines, a single judge of the Bombay High Court held that where a reference for adjudication was made
by the state government, being the appropriate government under s 2(a) as on the date of reference, a subsequent
amendment to s 2(a), by which Central Government was made the appropriate government in respect of the said industry,
can have only a prospective operation and it would not put an end to the adjudication proceedings already commenced on
the reference made by the state government in the pre-amended period. The proceedings commenced upon the said
reference must be carried to their logical conclusion, even after the amendment comes into force. The award passed by the
labour court and published by the state government in that case was, therefore, held perfectly valid and justified.15 In
Meenakshi Patel v EEPC , a single judge of the Bombay High Court held that the Engineering Export Promotion Council,
though not a ‘controlled industry’, was certainly an industry carried on ‘under the authority of the Central Government’
and, therefore, the Central Government would be the appropriate government.16 In respect of Indian Council of
Agricultural Research (ICAR), the Central Government is the appropriate government as it exercises sufficient authority
and control in the actual functioning of ICAR.17

Any Industry Carried on by a Railway Company

With respect to a railway company, the ‘appropriate government’ is the Central Government. But a business carried on by
a private limited company, though under the licence and control of the East India Railway Administration, is not an
industry carried on by a railway company.18 However, the Central Government and not the state government, will be the
appropriate government for making the reference of a dispute, for adjudication, on the matter of a termination of the
service of a coolie working under a railway contractor.19

Any controlled industry as may be specified in this behalf by the Central Government

In order that the Central Government may be the ‘appropriate government’ in relation to a controlled industry, two
requirements must be satisfied, viz,

(a) the industry should be a ‘controlled industry’; and

(b) it should have been ‘specified in this behalf ie, it should have been specified as such for the purpose of this
provision.20

These two requirements are to be satisfied cumulatively.21 As pointed out by the Supreme Court in Bijay Cotton Mills, that
in order to attract the provisions of this clause, it is not enough that the industry in question is a ‘controlled industry’, but it
should also have been specified by the Central Government as a ‘controlled industry’ for the purposes of s 2(a)(i).22 In
relation to the employees employed in a canteen, run by a contractor in the premises of the Hindustan Petroleum
Corporation, a single judge of the Bombay High Court held that the Central Government would be the appropriate
government, in view of the fact that the Central Government had notified that the appropriate government with respect to
the corporation will be the Central Government.23

Specified Corporations

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With respect to disputes relating to the following corporations and bodies, the Central Government has specifically been
made the ‘appropriate government’:

(a) A Dock Labour Board;

(b) The Industrial Corporation of India Limited, formed and registered under the Companies Act 1956;

(c) The Employees State Insurance Corporation;

(d) A Board of Trustees;

(e) The Central Board of Trustees and the State Board of Trustees;
(f) The Indian Airlines Corporation and the Air India Corporation;

(g) The Life Insurance Corporation of India;

(h) The Oil and Natural Gas Commission;

(i) The Deposit Insurance and Credit Guarantee Corporation;

(j) The Central Warehousing Corporation;

(k) The Unit Trust of India;

(l) The Food Corporation of India;

(m) The International Air Port Authority of India;

(n) A Regional Rural Bank;

(o) The Export Credit and Guarantee Corporation Ltd;

(p) The Industrial Reconstruction Corporation of India Ltd; and;

(q) The Banking Services Commission.

A Banking Company

A banking company has been defined in cl (bb) of s 2. It is only with respect to the banking companies falling within the
definition of a banking company in the Act, that the Central Government is the appropriate government. With respect to
the other banking companies, only the State Government in which the bank is situated, would be the appropriate
government, [See, notes under cl (bb)].

An Insurance Company

An insurance company has been defined in cl (kk) of s 2. It is only in relation to the insurance companies falling within the
definition, that the Central Government is the appropriate government; with respect to the other companies, it is the state
government. [See, notes under cl (kk)].

A Mine

The words, ‘in relation to an industrial dispute concerning ... a mine,’ in this clause, have to be construed without reference
to the broad definition of an industry in s 2(j) of the Act.24 It is quite clear that the employees who are employed in any
mining operation, for the purpose of searching and obtaining minerals by extraction, including all borings, bore-holes and
oil-wells and other modes of working, as enumerated in the definition of a ‘mine’, can be stated to be employed in a mine.
Likewise, employees engaged in loading ore in a mine, are employed in a mine.25 But, unless a person is so employed, he
cannot be said to be engaged in any kind of work incidental to or connected with mining operations.26 An illustration of
this point is Serajuddin & Co,27 where the Supreme Court held that an ‘industrial dispute’ between the workmen employed
in the head office of a company at Calcutta, engaged in a mining business, having its mines in the State of Orissa, was not
an industrial dispute concerning a ‘mine’, as the head office was not connected with the mining operations. The Patna High
Court, in Khas Jeenagora Coal Co, took the view that the Central Government was not the ‘appropriate government’ in
connection with a dispute connected with the non-employment of a person working as a watchman or as a peon, in the
bungalow of a director of the company, situated at the mine site.28 Likewise, regarding a dispute about the clerks working
in the accounts section of certain collieries, who were not doing any job directly connected with the mining operations, the

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appropriate government was the state government and not the Central Government.29 The Gauhati High Court held that an
oil refinery cannot be treated as a mine within the meaning of s 2(j)(viii) of the Mines Act.30

The expression ‘concerning a mine’ in s 2(a)(i) of the Act—a welfare statute—has to be liberally construed. There is no
indication in the Act that the word ‘mine’ should be given a narrow meaning such as to exclude stone-quarries.31 It is a
well-settled position of law that a quarry is included in ‘mine’.32 Loading and unloading of ore is an activity connected
with mining.33 But a cement factory using lime stone from mines miles away from the factory and working independently
of such mines, cannot be called a workshop of the mines, even if the mine and the factory are owned by the same
management.34 An industrial dispute between the Neyveli Lignite Corporation Ltd and the employees engaged in its
security force was not an industrial dispute concerning a ‘mine’, because the category of Watch and Ward-the security
force-was not included in the definition of ‘a person employed in the mine’ in s 2(1)(h) of the Mines Act, prior to its
amendment by Act 42 of 1983.35

An Oil-field

The appropriate government in relation to an industrial dispute concerning an oil-field is the Central Government.

A Cantonment Board

The Punjab High Court held that the ‘appropriate government’, with respect to a cantonment board created and regulated
by the provisions of the Cantonment Act 1924 while managing the affairs of the cantonment board under the provisions of
Ch III of the Act and acting under the supervision and control of the Central Government, was the Central Government.36
However, the legislature specifically included ‘Cantonment Board’ in s 2(a)(i) by the Amending Act No 36 of 1964,
thereby putting an end to any confusion in this regard.

A Major Port

The expression ‘in relation to any industrial dispute concerning a major port’ was considered by the judicial commissioner,
Kutch, with respect to a dispute in PK Pillai.37 The company had an office in the Kandla Port, which was carrying on its
business in the port. It was observed that these words would have applied if there were a dispute ‘between the port
authorities and their workmen or between people doing the port work and their workmen’. But the company was neither a
port authority, nor doing port work; hence the ‘appropriate government’ was the state government, and not the Central
Government. But in the under-noted case,38 the Bombay High Court held that the activities of a firm, carrying on its
business of clearing, shipping and managing a godown department in a port, were concerning a ‘major port’, hence the
Central Government was the appropriate government. In connection with a dispute relating to the Port of Mormugoa, a
major port by virtue of r 2(f) of the Industrial Disputes (Central) Rules 1957, the reference of such dispute by the
administrator appointed by the President, was held to be a reference by the Central Government, which was the
‘appropriate government’.39 The Central Government is the ‘appropriate government’ in respect of a dispute arising in the
Union Territory of Goa, Daman and Diu.40 In Hindustan Aeronautics, a reference made by the Government of UP under s
4K of the UP Industrial Disputes Act 1947 was challenged by the petitioner company. Quashing the reference, Shishir
Kumar J, of the Allahabad High Court held that a reference by the state government under the said section of the State Act
was itself not maintainable in view of the fact that the Central Government, which exercises control and authority over
Hindustan Aeronautics, is the appropriate government; and, by the same token, any subsequent application made by the
state government under s 6(6) of the said Act for correcting any clerical or arithmetical error in the relevant award was also
not maintainable.41

Sub-clause (ii): State Government

In relation to any industrial dispute other than those specified in sub-cl (i), the appropriate government would be the State
Government. In other words, all industrial disputes which are outside the purview of sub-cl (i) are the concerns of the state
government, under sub-cl (ii). Thus, the general rule is that an industrial dispute arising between an employer and his
employee would be referred for adjudication by the state government, except in the cases falling under s 2(a)(i) of the
Act.42The Act has not defined the meaning to be assigned to the word ‘state government’. But for the purposes of this
clause, the ‘Union Territory of Delhi’, administered by the lieutenant governor, has been held to be a ‘state government’ by
a Full Bench of the Delhi High Court.43Consequently, where a function is to be discharged in relation to ‘industrial
disputes’ or the exercise of any other power under the Act and the ‘appropriate government’ is the ‘State Government’, it
can be validly discharged by the lieutenant governor of Delhi. This is the plain reading of the provisions of s 2(a)(ii) of the
Act, read with s 3(8)(b)(iii) and s 3(60) of the General Clauses Act 1897.44

Concerns having establishments in more than one State

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It has been seen that in relation to ‘industrial disputes’ concerning the bodies envisaged in sub-cl (i) of cl (a) of s 2, the
Central Government, and in relation to other industrial disputes, the state government is the ‘appropriate government’. In
cases where the entire business of an establishment is confined to the territories of a state, obviously, the government of
that state is the ‘appropriate government’. But difficulties arise in cases where an employer has establishments in more
than one state. The Act does not contain any provisions in this connection. Nor does it contemplate a joint reference by
more than one state.45 In certain cases, the courts have relied upon the principles governing the jurisdiction of civil courts
to entertain actions or proceedings. The principle of ‘cause of action’ has been pressed into service, though this test is
neither comprehensive, nor satisfactory. The Act does not deal with ‘the cause of action’, nor does it indicate as to what
factors will confer jurisdiction on the ‘appropriate government’ for making a reference in the case of an employer having
establishments in more than one state. No exhaustive definition of a ‘cause of action’ is possible. A Full Bench of the
Patna High Court, in Paritosh Kumar Pal, observed that, generally, a cause of action ‘constitutes all that bundle of facts
which, entitles the plaintiff to claim the legal reliefs sought for, and broadly speaking, those very considerations would be
attracted in the case of an ‘industrial dispute’ also, which would encompass all that bundle of facts on the basis of which a
workman would invoke the provisions of the Industrial Disputes Act.46

The decision of the Bombay High Court, in Lalbhai Tricumlal, has erroneously been taken to be the foundation up on
which the edifice of the subsequent case law has been built. In this case, the head office of the employer company was in
Ahmedabad and it had a branch office in Bombay. The services of a workman, who was employed in the Bombay branch,
were terminated. The workman filed an application before the labour court at Bombay under the Bombay Industrial
Relations Act 1946, for reinstatement. The employer raised the objection that the labour court at Bombay had no
jurisdiction to deal with the application, as the only court that was competent to deal with the matter was the labour court
at Ahmedabad. The Bombay labour court, therefore, made a reference to the industrial court, under s 81 of that Act, and
the industrial court held that the Bombay labour court had jurisdiction. In a writ petition against the said order, Chagla CJ
observed that, applying the well-known tests of jurisdiction, a court or tribunal would have jurisdiction if the parties reside
within its jurisdiction or if the subject-matter of the dispute substantially arises within jurisdiction. And, therefore, the
correct approach to this question is to ask ourselves - where did this dispute substantially arise? Since the workman had
been dismissed from service in Bombay, it was held that the dispute had substantially arisen in Bombay and the labour
court at Bombay had jurisdiction.47However, the court refrained from expressing an opinion on the question of whether the
Ahmedabad Court would have jurisdiction as well or not. It is obvious that this case was neither under the Industrial
Disputes Act nor was it concerned with the question as to which government was the ‘appropriate government’ in relation
to the dispute. It is also significant to note that the High Court was only dealing with the question as to whether the
Bombay labour court, under the BIRA, had jurisdiction to deal with the application. The said observations of Chagla CJ
were blindly followed by various courts in subsequent decisions, and no court appears to have paused to look into the
anatomy of this case.

In Lipton, the facts were: the Delhi office of the employer company exercised control over the salesmen and other
employees of the company posted in Punjab, Rajasthan and Utter Pradesh states, apart from those working in Delhi
territory. An industrial dispute relating to fixation of grades and scales and the bonus was referred to an industrial tribunal
for adjudication by the Delhi Administration, which, apart from the workmen employed in the Delhi office, also included
the employees working in the other states, under the control of the Delhi office. The employer company raised a
preliminary objection before the tribunal that it had no jurisdiction to make an award in respect of the employees who were
employed outside the State of Delhi. The industrial tribunal as well as the labour appellate tribunal, rejected this objection
as all the workmen working under the control of the Delhi office, whether they worked in Delhi or not, received their
salaries from the Delhi office and they were controlled from the Delhi office in matters of leave, transfer, supervision etc.
In these circumstances, it was held that the Delhi state was the ‘appropriate government’, not only with respect to the
workmen employed in the Delhi office, but in respect of those working in other offices as well which were controlled by
the Delhi office. Though in appeal against the award, this point was raised before the Supreme Court, it was not seriously
pressed at the time of hearing. The Supreme Court, therefore, did not discuss this question and contented itself with a
perfunctory observation, viz, ‘we are of the view that the industrial tribunal, Delhi had jurisdiction to adjudicate on the
dispute between Lipton Ltd and its workmen of the Delhi office’.48

In Indian Cable Co, the company had closed its branch in Ambala in the State of Punjab and had, consequently, terminated
the services of all its employees working in that branch. After the closure, the State of Punjab referred the dispute relating
to the justifiability of the retrenchment of the workmen, for adjudication. The employer company, inter alia, raised a
preliminary objection before the tribunal, that the Punjab government was not the ‘appropriate government’ to make the
reference, because at the relevant time, the company had no office in that state. In appeal against the order of the tribunal,
upholding the validity of the reference, in view of its decision on another point, the Supreme Court did not consider it
necessary to express any opinion on this question.49 But echoing the voice of Chagla CJ, in Lalbhai Tricumlal Mills, the
court made an obiter observation that: ‘the Act contains no provisions bearing on this question, which must consequently

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be decided on the principles governing the jurisdiction of courts to entertain actions or proceedings,’ though it did not spell
out the principles governing the jurisdiction of the courts, to entertain actions or proceedings in the context of the Industrial
Disputes Act and again contented itself by extracting a passage from Lalbhai Tricumlal Mills and saying that ‘these
principles are applicable for deciding which of the states has jurisdiction to make a reference under s 10 of the Act’.

Lalbhai Tricumlal Mills and Indian Cable Co were mechanically followed by the court in Sri Ranga Vilas Motors, in
which the head office of the company was situated in Krishnagiri, in the State of Madras, and it had a branch at Bangalore,
in the State of Mysore, where the concerned workman was employed. The service of the workman was terminated at
Bangalore, but the dispute was sponsored by the workmen at Krishnagiri, which gave it the character of an ‘industrial
dispute’. The court observed that since there was a separate establishment at Bangalore, where the concerned workman
was working and the impugned order had to operate on the workman at Bangalore, the Mysore government was the
‘appropriate government’. The court adumbrated the test:

Where did the dispute arise? Ordinarily, if there is a separate establishment and the workman is working in that establishment, the
dispute would arise at that place... there would clearly be some nexus between the dispute and the territory of the state and not
necessarily between the territory of the state and the industry concerning which the dispute arose.50

The ratio of this case is that the place where the impugned order operates on the service of a workman, is the place
where/the ‘cause of action’ arises and the state in which that place is situated, will be the appropriate government for
making the reference of an industrial dispute arising out of the impugned order. The implication of this decision and the
relevant observations clearly indicate that since the government of Mysore was the appropriate government, by necessary
implication the State of Madras could not be the appropriate government. In Paritosh Kumar Pal, the facts briefly were:
the employer company had its registered office as well as its head office, at Calcutta, while it had no establishment in
Bihar. The business in the State of Bihar was controlled from Calcutta. A workman working as a medical-cum-sales
representative at Patna was dismissed by an order issued from Calcutta. A Full Bench of Patna High Court held that the
situs of the employment of workman would determine the territorial jurisdiction of the tribunal in a dispute arising from
the termination of such employment.51 This holding of the High Court is not correct law, even if we apply the test of Sri
Rangavilas Motors, where the company had establishments at two places, namely, in Karnataka as well as in Madras.
Admittedly, in Paritosh Kumar (supra), there was no establishment in the State of Bihar, which could have been the
appropriate government with respect to the dispute.

In Spencer & Co, a single judge of the Delhi High Court made an unreasoned obiter that ‘there may be more than one
appropriate government.52 Likewise, a single judge of the Kerala High Court, in Emerald Valley Estates, in his obiter,
observed: ‘There may be cases where part of the cause of action arose in two or more states. In such cases, two or more
states may have a concurrent jurisdiction.53 So also, the Gujarat High Court, in Vinod Rao, made obiter observations that
two governments may have simultaneous jurisdictions to refer a dispute for adjudication to the tribunals appointed by
them.54

In Gestetner Duplicator, another single judge of the Delhi High Court, specifically took this view. In this case, the
concerned workman was employed by the administrative office of the company at Delhi. But at the relevant time, when his
service was terminated, he was working at Hubli, in the State of Karnataka. The reference with respect to the termination
of the service of the workman was made by the Delhi administration. Faced with the question of whether Karnataka was
the appropriate government to make the order of reference, as the order of termination had operated on the service of the
workman at Hubli, the court relied upon the obiter observations of the single judge in Spencer (supra) in holding that there
can be more than one appropriate government to refer the same dispute for adjudication to the tribunals appointed by it.55
In support of this view, the court also relied upon the provisions of s 10(1)(a) and s 33B of the Act, but without working
out their scope and implications. These provisions do not apply to such situation at all.

A single judge of the Karnataka High Court, has taken the view that if a cause of action could arise where the contract was
concluded, the dispute could arise where the contract of employment was terminated.56 In other words, there can be two
‘appropriate governments’ to deal with the same industrial dispute. On the other hand, in J&J Dechane, the Kerala High
Court quashed the order of reference made by the State of Kerala, relating to the termination of the service of a medical
representative employed for canvassing orders for the sale of its products, in the States of Kerala and Mysore, by a
company having its registered office at Hyderabad, in the State of Andhra Pradesh. The court took the view that the
employer company was not carrying on any business in the State of Kerala, as it had no establishment in that state, and the
workman was only a roving representative of the company, for promoting the sales of its products. Therefore, the State of
Andhra Pradesh, and not the State of Kerala, was the ‘appropriate government’. Gopalan Nambiyar J, observed that:

It seems reasonable, and fairly clear, that there can be only one government which can be regarded as the ‘appropriate government’

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for the purpose of making a reference under s 10(1)(c). The consequences of holding that more than one government can refer the
same industrial dispute for adjudication, appear to us to be startling.57

Similarly, the Madhya Pradesh High Court, in Medical Representatives, quashed, the order of reference made by the State
of Madhya Pradesh, with respect to the termination of the service of an employee employed by a company, which had its
head office at Bombay, to canvass for the sales of its products in the State of Madhya Pradesh. In this case, the fact that the
State of Maharashtra was the appropriate government was not disputed, but it was contended that the State of Madhya
Pradesh was also concurrently the appropriate government to make the reference, since, inasmuch as the service of the
workman was terminated in the State of Madhya Pradesh, the cause of action arose there. In view of the fact that the
company was not carrying on its business anywhere in the State of Madhya Pradesh as on the date of the reference, the
State of Madhya Pradesh could not be the appropriate government. Furthermore, since the dispute between the company
and the workman arose at Bombay, where the order of the dismissal was passed, only the State of Maharashtra could be
the appropriate government. The court observed that keeping in view the very significance and meaning of the adjective
‘appropriate’, qualifying the word ‘government’, only one government can be called as the appropriate government for
making the reference.58

Another Division Bench of Bombay High Court, in General Superintendence Co, took the view that two governments
cannot be the ‘appropriate governments’, operating in the same field, in respect of the same subject-matter. If two
governments are to operate, ‘there will be t wo authorities operating in the same field, at the same level, which is not
envisaged under the Industrial Disputes Act’. The court then noticed indications available under the Act, to show that if
one government is acting, another government cannot Act in the same field, in respect of the same subject-matter.59 The
law as stated in J&J Dechane (Kerala), Medical Representatives (MP), and General Superintendence Co (Bombay), is
correct, whereas the decisions rendered in Gestetner and Spencer (Delhi), Emerald Valley (Kerala) and Vinod Rao
(Gujarat) are wrong. The wording of the provision so conspicuous in so far as the word ‘appropriate’ qualifies the singular
expression ‘government’ that there cannot be more than one appropriate government exercising the power of reference in
respect of the same dispute involving the same parties at the same time. The consequences of the holding that there can be
more than one appropriate governments to refer the same dispute for adjudication to the tribunals appointed by them, will
be startling and result in an unending and tangled multiplicity of industrial litigation, which would be devastating for
industrial peace. Some of the latter class of cases have been analysed in the following paragraphs.

In Godrej Soaps, it was held that, in respect of a workman appointed as a sales supervisor for a part of the territory of
Karnataka but at all times stationed at Bombay, and whose termination order was served in Bombay coupled with the
further fact being that the employer had no branch or administrative office in Karnataka, the appropriate government was
the State of Maharashtra, and not Karnataka.60 It is submitted that this case was rightly decided consistent with the spirit of
the letter of the definition and the spirit of the Act. In BG Sampat, the facts disclosed that the appointment letter was issued
from the head office of the company, located in Bombay, but the workman was employed in Calcutta. A single judge of
the Calcutta High Court held that the government of West Bengal was the appropriate government to refer a dispute
relating to the termination of the said workman.61

In New Delhi GM Union, the Delhi High Court upheld the refusal by the government of Delhi to refer a dispute relating to
the Management Development Institute, on the ground that the said institute was situated in the State of Haryana, and
therefore, the matter could not be referred for adjudication for want of jurisdiction.62 Where the situs of the employment of
a workman was found to be Gurgaon, and the termination letter was also issued at Gurgaon, the appropriate government
could not be held to be the Government of the NCT of Delhi just because the head office of the company was located in
Delhi. It is axiomatic that the territory within which the services of an employee are wrongfully terminated, would be the
territory where the cause of action substantially arises partly, if not wholly. The reference made by the government of the
NCT of Delhi was quashed as not being competent. The jurisdiction would be with the competent courts of Gurgaon and it
would be for the concerned government to consider whether a reference is to be made.63 In a case where a workman, who
was initially appointed at the head office of the company at Madras, but was later transferred to Kanpur, was dismissed
while he was working at Kanpur, it was held that the conciliation officer of Madras, had the territorial jurisdiction to admit
the dispute for conciliation.64

What is relevant while sustaining a dispute under s 2A, before a labour court, is the place where the cause of action arose
substantially, namely, the place where the employee was working at the time when the order of termination was issued,
and not the place of the initial appointment, even if he was transferred to other places. In view of the categorical finding
that the workman was last employed, at the time of his termination, at Jamshedpur, he could not maintain the claim before
the labour court at Madras.65 In Udaipur Distillery, the petitioner-workman filed a complaint before the industrial court,
Mumbai against his transfer from Mumbai to Delhi. Rejecting the contention that Mumbai industrial court had jurisdiction
to try the case, Khandeparkar J, held that ID Act does not deal with jurisdictional issues and that s 20 of CPC applied to the

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case. In view of the fact that the decision of transfer was taken at Udaipur by the respondent-company, the said dispute
substantially arose at Udaipur.66

In Mining & Allied Machinery Corpn, the facts disclosed that the Central Government, being the appropriate government,
had delegated the powers to the West Bengal Government under s 39 of the Act. The State Government referred the
dispute relating to closure, to the Industrial Tribunal. While the reference was pending adjudication, the Central
Government issued a notice convening a meeting for hearing on the application, but closed the factory down. Rejecting the
contention of the employees’ union, Seth J, of the Calcutta High Court held that by delegating the power to make reference
to the State Government, the Central Government merely created a parallel authority and hence the order of the State
Government was not liable to be quashed. Similarly, such delegation could not be said to have taken away the jurisdiction
of the Central Government to issue a notice convening a meeting.67In respect of the closure of undertakings engaging less
than 300 workmen and located in Lucknow and Kanpur, which are governed by the UP Industrial Disputes Act 1947, the
Deputy Commissioner of Labour, Government of UP, has no jurisdiction to issue a prosecution notice under s 25R of the
Central Act, as it has no application to the undertakings located in the State of UP.68 In respect of a dispute relating to a
workman engaged in the office of the Kerala State EDC, which is located in Mumbai, the appropriate government is the
State Government in terms of s 2(a)(i) of the ID Act.69

The decisions rendered, and the observations made, in Vinod Rao, Gestetner, Spencer, as also the latest decision of Seth J.,
in Mining and Allied Machinery Corporation call for some analysis. In the face of clear and unambiguous language used in
s 2(a) as to which one - the Central or the State Government - is the appropriate government in respect of such and such
establishments/undertakings, to hold that “there could be more than one appropriate government” is a judicial perversion
of grave dimensions. The learned judges of Gujarat, Delhi, Kerala and Calcutta have grossly misdirected themselves and
handed down irresponsible and reckless decisions with no application of judicial mind. Let us imagine the consequences of
a situation in which two governments make a reference of an identical dispute relating to the same
undertaking/establishment to two different tribunals, which pass divergent and/or diametrically opposite awards involving
workmen of the same employer working in different states! Even from a common sense point of view - not to speak of a
legal or judicial sense - is it possible to envisage multiple authorities exercising power in respect of the same subject-
matter involving the same parties at the same time?

Reverting to Mining and Allied Machinery Corporation, what is meant by the observation that “in delegating the power to
the State Government, the Central Government had merely created a parallel authority”? The facts of the case disclose that
it was a case covered by s 25-O of IDA, which requires prior permission before closing down the undertaking, and the
State Government referred the application made by the employer for adjudication. Is it possible to visualise an odious
situation in which the State Government refers the dispute relating to closure for adjudication, and, while the said reference
is pending before the tribunal, the Central Government issues a notice convening a meeting for hearing the self-same
application and, still worse, at the same time, closes down the factory even before the reference is disposed of by the
adjudicator, thus reducing the entire law relating to the closure of undertakings to a mockery? The views expressed by the
learned judges in the above cases - result not in industrial peace and harmony - but plunge the industrial community in
chaos and anarchy, thereby setting the scheme and objects of Industrial Relations Law at naught! This kind of judicial
callousness and indifference, which has become more rampant in the recent past deserves to be denounced in the strongest
language and terms. The decisions rendered in J&J Dechane, Medical Representatives, and General Superintendence, are
consistent with the spirit of s 2(a) and are right, whereas the above four decisions rendered, and the observations made, in
Vinod Rao, Gestetner, Spencer and Mining and Allied Machinery Corpn are absolutely misconceived, wholly perverse and
completely wrong.

In Tata Memorial Hospital, the facts briefly were: there were two unions operating in the Tata Memorial Centre, Mumbai -
The Tata Memorial Hospital Workers Union, which was the recognised union, and The Tata Memorial Hospital Kamgar
Sanghatana. The second mentioned union filed two applications before the industrial court under ss 15 & 16 respectively
seeking cancellation of the recognition of Workers Union and granting recognition to itself. Before the industrial court, the
management raised objection as to the maintainability of the said applications on the ground that in respect of the
undertaking, the Central Government was the appropriate government. The industrial court held that the state government
was the appropriate government, which was upheld by a single judge, but reversed by a Division Bench of the Bombay
High Court, which held that the Central Government was the appropriate government in view of the fact that that the
Governing Council of the Centre was managing the institution as a delegate of the Central Government; that on this view
of matter and also on the basis of the Supreme Court decision rendered in Steel Authority of India, the Division Bench held
that the Central Government was the appropriate government. The issue before the Supreme Court was which of the two -
the State or the Centre - was the ‘appropriate government’. Setting aside the order of the Division Bench, Gokhale J (for
self, Kabir and Joseph JJ), held that mere allocation of business under any department would not in any manner decide the
issue as raised in the present case as to whether a particular industry is under the control of the Central Government. The
business rules cannot be conclusive to show that any institution or organization listed under the allocation of business,

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would be part of any department of the Government of India,70 but in so far as Tata Memorial Centre was concerned, the
State Government was the appropriate government.71 It is submitted that this case was rightly decided. The NCL-II
observed:

There is no need for different definitions of the term ‘appropriate government’. There must be a single definition of the term,
applicable to all labour laws. The Central Government should be the ‘appropriate government’ in respect of Central Government
establishments, railways, posts, telecommunications, major ports, lighthouses, Food corporation of India, Central Warehousing
Corporation, banks (other than cooperative banks), insurance, financial institutions, mines, stock exchanges, shipping, mints,
security printing presses, air transport industry, petroleum industry, atomic energy, space, broadcasting and television, defence
establishments, cantonment boards, central social security institutions and institutions such as those belonging to the CSIR, ICAR,
ICMR, NCERT and in respect of industrial disputes between the contractor and the contract labour engaged in these enterprises or
establishments. In respect of all others, the concerned state government or union territory administrations should be the appropriate
governments. In case of a dispute, the matter will be determined by the National Labour Relations Commission, that we want to be
set up.72

Clause (aa): ARBITRATOR

Arbitrator

Clause(aa) has been inserted by s 2 of the Act 36 of 1964 and it has to be read with s 10(A)(1A). In the case of a reference
which is being made to an even number of arbitrators, it becomes necessary to bring in an umpire so as to have a majority
award. A provision, therefore, has been made to include an ‘umpire’ in the definition of an ‘arbitrator’.

Clause (aaa): AVERAGE PAY

Average pay

This clause lays down the manner of calculating the ‘average pay’ of monthly, weekly or daily-rated workmen, for certain
purposes of this Act.73 There are three categories set forth, and then, there is a residual category. The first is the case of a
‘monthly paid’ workman; the second, of a ‘weekly paid’ workman and the third, of a ‘daily paid workman’. The residual
category is that of those persons, whose ‘average pay’ cannot be calculated upon any of these three bases. In such cases,
the pay is to be calculated as the average of the wages payable to the workman during the period that he had actually
worked. The period of three months, four weeks or 12 days, as specified for the first three categories of workmen, must
precede the day on which the pay becomes payable. In case a workman has not worked for the period specified, the
average pay shall be calculated as the average wages payable to him for the period he had actually worked. In Indian Hume
Pipe, the Madras High Court held that where a workman was being paid fixed wages for every working day, but such
wages were paid to him fortnightly, he was to be treated as a daily-rated workman and not one falling under the residual
part of the clause, for computing his ‘average pay’. It was observed that the residual part of this clause is applicable to
piece-rated Workers and the like, whose wages depend upon the quantum of work turned out and which are liable to vary
from day to day, and it might also apply to cases where the workman has not worked during the entire period of three
calendar months, four weeks or twelve days, as the case might be, preceding the relevant date.74

Clause (b): AWARD

Award

An ‘award’ must be:75

(i) an interim or final determination, (ii) of an industrial dispute or any question relating thereto, and (iii) by any:
(a) labour court;
(b) industrial tribunal;
(c) national tribunal; or
(d) an arbitrator, under s 10A.

Interim or Final Determination

The definition of an award is analogous to that of a ‘decree’ as defined in s 2(2) of the Code of Civil Procedure.76 It plainly

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requires an ‘industrial dispute’ or ‘any question relating thereto’, to be determined by the adjudicator. The object of the
decision in the ‘award’ is to resolve the differences between the disputants. The expression ‘determination of any dispute’
means an adjudication of the dispute between the parties.77 The definition of an ‘award’ has two parts. The first part covers
an interim or final determination of any industrial dispute. The second part takes in an interim or final determination of any
question relating to that dispute but the basic postulate common to both the parts of the definition is the existence of an
industrial dispute, actual or apprehended. The ‘determination’ contemplated by the definition is not a termination of the
proceedings before the tribunal, by one method or the other. There is a ‘determination’ only when there is an adjudication
of the industrial dispute or of a question relating thereto, on merits.78 The word ‘determination’ implies an adjudication
upon the relevant materials, by the tribunal.79 It is implicit in the word ‘determination’ that it should be judicial, implying
that the tribunal should exercise its own judgment.80 The words’ interim’ or ‘final determination’ of any industrial dispute
or of any question, necessarily involve an application of the mind of the tribunal, to the problem before it. The
determination may be final or interim, because there is scope for such determination even in the interim stage, whilst the
inquiry into the dispute is in progress. In any case, there should be a determination of the dispute in the sense that it should
not be left incomplete and unresolved, because the expression ‘determination’ implies that the adjudicator has to adjudicate
upon the whole dispute, as referred to him. Hence, he cannot leave a part of the dispute to be resolved by the parties.

In Birla Cotton, the court remanded the award to the tribunal, who had left a part of the dispute relating to the
standardization in the wage-structure unresolved, to be resolved by the parties, with the direction that a joint committee
should be formed to go into and investigate the anomalies in the categories to be found in the company. The Supreme
Court directed the tribunal to itself decide the question, and if necessary, with the help of assessors. Thus a partial
adjudication of a dispute is not a determination as contemplated by the definition of an ‘award’.81 If, however, a number of
demands are referred to the tribunal for adjudication and the tribunal decides only one or some of such issues, and gives its
‘award’ with respect to those issues, which is published under s 17, it will be the final adjudication in so far as those
demands are concerned, because each of the demands is an industrial dispute by itself.82 Orders of the authorities under s
33(1) or s 33(2) are not awards as contemplated by this clause, because there is no final or interim determination of an
‘industrial dispute’ in such cases.83 The definition contemplates that it should be a ‘determination’ of an ‘industrial
dispute’, by a labour court, an industrial tribunal, a national tribunal or an arbitrator under s 10A. Hence, a determination
of the dispute by any other authority, such as one by a High Court, in its writ jurisdiction under Art. 226 of the
Constitution, will not be an award.84 An order passed under s 33C(2) is not an ‘award’ within the meaning of s 2(b) of the
IDA. Proceedings under s 33C are in the nature of execution proceedings. When the quantum of amount due to a workman
is determined by a labour court, it is a ‘decision’ and not an ‘award’, and hence, need not be published under s 17.85

Interim Award and Interim Relief

An ‘interim award’ is like a ‘preliminary decree’ within the meaning of s 2(2) of the Code of Civil Procedure.86 The word
‘interim’, inter alia, has been defined in the Oxford Dictionary as ‘a temporary or provisional arrangement, adopted in the
meanwhile’. In the context of the definition of the term ‘award’, the word ‘interim’ qualifies the ‘determination of any
industrial dispute’ as well as ‘any question relating thereto’. Hence, any interim determination of an ‘industrial dispute’
itself or of ‘any question relating thereto’, will fall within the definition of an ‘award’. An interim award in this context
means only a provisional arrangement, made in a matter of urgency and subject to a final adjustment or complete
determination of the dispute; for example, a payment on an account, pending the final settlement of the amount.87

In Hotel Imperial, the Supreme Court held that the adjudicator may give an award about the entire dispute at the end of the
proceedings, which will be the final determination of the industrial dispute referred to it. It is also open to the adjudicator
to make an award in respect of some of the matters referred to it, whilst some others remain to be decided. This would be
the determination of the matters decided and would be an interim award. Whether the award is interim or final, it will have
to be published as required by s 17 of the Act. An interim relief, on the other hand, is granted by an order, given under the
power conferred on the adjudicator under s 10(4), with respect to matters incidental to the points of dispute referred for
adjudication. During the pendency of the adjudication of an industrial dispute, the adjudicator can give an interim relief
where it is admissible as being incidental to the main question referred to it. The tribunal has the power to make an interim
award on a point of dispute referred to it for adjudication, or on a matter incidental to the main question.88 The Patna,89
Punjab,90 Delhi91 and Calcutta92 High Courts have taken the view that an order granting an interim relief must take the
form of an interim award, and therefore, must be published under s 17, so as to be enforceable under s 17 A. On the other
hand, a single judge of the Karnataka High Court has expressly dissented from the view of the Patna High Court and held
that:

Interim relief, eg, a direction to pay a subsistence allowance to a dismissed workman during the pendency of a dispute concerning
the validity of his dismissal, or any other interim relief which the tribunal has the power to grant, need not and should not be made
in the form of an award. Such an order should only be in the nature of an interim order ... 93

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The holding of the Karnataka High Court is the correct law, while the view of the other High Courts is clearly wrong. Once
it is conceded that there is no interim or final determination of a dispute or difference, it follows that there is no award
within the meaning of s 2(b) and, by the same token, s 17, which mandates the publication of ‘Awards’, is not attracted. An
order granting an interim relief is not the determination of the dispute, inasmuch as it does not decide any question or
dispute between the parties, even as an interim measure. It is like any other order made in the course of adjudication,
before making the award by determining the dispute. An order of an interim relief, not being an interim award, will not
require publication. Nor will its disobedience be punishable under s 29 of the Act. But the relief granted by such an order
can be realised through the machinery of s 33C of the Act. Under s 10(4), an adjudicator has the power to adjudicate on
matters ‘incidental’ to the points of dispute referred for adjudication. A priori, while adjudicating on the points referred for
adjudication, the tribunal can grant interim relief. In the case of a dismissal, the tribunal can grant an interim relief after
finding that the inquiry on the basis of which the Workers were dismissed, was not fair and proper. But the interim relief
can be granted only from the date of application for such relief, and not from the date of the dismissal of the workman.1

Though an industrial tribunal can give an interim relief, ‘ordinarily, interim relief should not be the whole relief that the
workmen would get, if they succeeded finally’.2 In a case of discharge or dismissal, it is not open to the tribunal to order a
reinstatement as an interim relief, for that would be giving the workman the very relief that he could get on a trial of the
complaint, if the employer fails to justify the order of dismissal.3 Interim relief granted by the industrial tribunal, directing
the employer not to transfer the workmen to another station, pending the adjudication of the dispute under reference, is the
whole relief that the workmen would get in case they succeed in the adjudication. In Darshak Limited, the Karnataka High
Court has upheld the validity of such relief.4 It is submitted that this decision is misconceived and is repugnant to the very
concept of interim relief. As a matter of principle and law, no interim relief of whatsoever nature could be granted to a
workman whose service has been terminated or who has been dismissed, until the dispute is finally adjudicated, for the
simple reason that the moment the termination or dismissal order is served on the employee, it starts producing its legal
consequences in so far as that very moment, he ceases to be the employee of the organisation. Until the action of employer
is overturned in a proper proceeding directed to that end, such an ex-employee cannot claim any compensation from the
employer in the form of ‘interim relief’. The learned judge of Karnataka High Court had clearly transgressed his legitimate
confines in upholding the misplaced award passed by the labour court.

Where, in an industrial dispute relating to the date of birth of a workman, the tribunal directed the employer not to retire
the workman till the final decision of the reference was made, the High Court quashed the interim award of the tribunal
and held that it was not open to the tribunal to give such interim relief which was the whole relief the workman could get
finally, that if ultimately the workman loses in the reference, even then he would get the service benefits, whereas the
employer could not be compensated for the consequential loss and that, in such cases, the balance of convenience would
always lie in favour of the employer.5 In granting interim relief, the tribunal must determine that there is a good prima
facie case in favour of the workmen in the final adjudication and that on the facts of the particular case, an interim relief by
way of the interim award is necessary.6 In other words, while exercising the discretion to grant interim relief in an
appropriate case, the tribunal has to consider prima facie, the balance of convenience and the necessity of its interference
for protecting the parties from irreparable injury.7The insertion of s 10-B in the Industrial Disputes Act 1947, by the Tamil
Nadu Amendment Act 1982, (Act 36 of 1982), has not taken away the right of the tribunal to award interim relief because
the power of the government under s 10B is to be exercised immediately after the reference has been made under s 10(1).
Furthermore, a quasi-judicial power vested in the tribunal, under s 10(4) of the Act, cannot be taken away by conferring an
administrative power on the government.8

Howsoever wide the powers of the tribunal may be, it cannot award its own brand of interim reliefs, pending the
adjudication. An interim relief must be a relief carved out of the main relief claimed by the workmen. In Radio
Foundation, the High Court of Patna quashed a direction given by the industrial tribunal, to the employer, to deposit two
months’ wages, to be paid to the workmen if they succeeded in the case, which was in the nature of asking the
management to give a security in cash in order to enable the workmen to get the money if they ultimately succeeded on
their demand for a bonus. The High Court held that the tribunal had no power to give an interim relief of this kind.9
Likewise, an order of the labour court, directing an employer to deposit a certain amount in the court, with the stipulation
that if the amount was not deposited, steps would be taken to recover the same as arrears of land revenue, was quashed by
the Allahabad High Court, which held that it was beyond the jurisdiction of a labour court to direct a party to deposit any
amount in the court or recover the same as arrears of land revenue.10 In awarding an ‘interim relief’, it is not sufficient to
say that the workman concerned was undergoing great hardship, as merely that fact cannot be a ground for the grant of an
interim relief. It is incumbent upon the tribunal to discuss the relevant facts of the case and find out in what way the stand
of the employer is unjustified, if at all so, and whether the demand for the relief is justified. It is only after such findings
are recorded that the interim relief can be granted, and not otherwise.11 An interim order for an interim relief is not an
award and is not enforceable under s 17 and the violation of such order is not punishable under s 29. However, the tribunal
has inherent power to enforce its interim order by making compliance with such order a condition precedent for employer

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to participate in the adjudication proceedings.12

The Decision on Preliminary Issues

The labour appellate tribunal took the view that the findings of a tribunal on preliminary issues are in no sense ‘interim
award’ because such findings order no relief in favour of any party and the position in respect to the findings on
preliminary issues is similar to that of the interlocutory orders passed by a civil court under the Code of Civil Procedure, as
regards jurisdiction or limitation, for the suit to proceed on merits. An ‘award’ to be ‘interim’ or ‘final’, must grant or
refuse to grant all or any of the reliefs which have been asked for in the inquiry and this cannot include orders which are
interlocutory.13 A similar view has been taken by a single judge of the Punjab and Haryana High Court in holding that an
interim order deciding a preliminary objection whether the tribunal has jurisdiction to adjudicate upon the dispute referred
to it or not, cannot be said to be an ‘award’ because it does not ‘determine’ any part of the dispute or any of other question
relating thereto.14 The Calcutta High Court held that a ‘no-dispute award’ made by the tribunal, where none of the parties
appeared before it, would not be an ‘award’ and its publication would not convert it into an award. On the construction of
the expression ‘or of any question relating thereto’, the court observed that it means any matter incidental to the dispute
and ‘to constitute an award, the main dispute might be decided first and thereafter any such matter or question relating to
the main dispute might be decided or adjudicated upon’.15 On the other hand, a single judge of the Allahabad High Court
held that the decision of the labour court that the matter referred to it for adjudication was not an ‘industrial dispute’ is
itself a determination of a ‘question relating thereto’ and would fall within the definition of ‘award’.16

In Cox & Kings, the Supreme Court has disagreed with the view of the Allahabad High Court. In this case, an order of
reference relating to the termination of services of certain workmen had been held to be invalid by the labour court for the
reason that no demand of the workmen in this connection had been made on the employer, as such no ‘industrial dispute’
had come into existence. This order of the labour court was published in the gazette of the government as an ‘award’ under
s 17(1) of the Act. Subsequently, upon a demand notice having been served by the workman on the management bringing
into existence the ‘industrial dispute’, the dispute again had been referred to the labour court for adjudication. The question
for consideration before the court, therefore, was whether the previous order of the labour court holding that the dispute
under reference was not an ‘industrial dispute’, was an ‘award’ within the meaning of s 2(b) which required termination
under s 19(6) of the Act, before the second reference could be made. The court laid down a two-fold test for a decision of a
tribunal to fall within the definition of an ‘award’, viz:

(i) it must be an adjudication of a question or point relating to the industrial dispute which has been specified in the order of
reference, or is incidental thereto, and
(ii) such an adjudication must be one on merits. The decision of the labour court did not satisfy either of these criteria.
Therefore, the court held that it did not possess the essential attributes of an ‘award’. The determination of the question
that the dispute under reference was not an ‘industrial dispute’ would not make such determination an ‘award’. Nor the
publication of such a decision under s 17(1) would confer the status of an award on it. In support of this conclusion, the
court further observed that since the order ‘by its very nature did not impose any continuing obligation on the parties
bound by it’, it was an additional reason for holding that the second reference was not barred. 17

The effect of the aforesaid decision is that the decision of a tribunal on a preliminary issue will not be an ‘award’ and,
therefore, it need not be published under s 17(1). If it is not published, it will not become enforceable under s 17A or
binding under s 18, nor will it be operative under s 19, so as to require termination thereunder. The attention of the court
does not appear to have been drawn to the provisions of s 20(3), which fixes the points of time on which the proceedings
before the adjudicatory authorities are deemed to have commenced and concluded. The adjudicatory proceedings on a
reference are deemed to have commenced on the date of the reference of the dispute for adjudication and are deemed to
have concluded on the date on which the award becomes enforceable under s 17A. Therefore, in a case where the tribunal
decides that the dispute under reference is not an ‘industrial dispute’, it will not be able to proceed any further with the
adjudication, such that decision puts an end to its jurisdiction. If such a decision is not an ‘award’, it will not become
enforceable under s 17A, and the proceedings before the tribunal shall, therefore, never be deemed to have concluded.
Thus, in such cases, there will be a perpetual ‘pendency’ before the tribunal for the purposes of ss 10, 23, 33 & 33A. This
will lead to a manifest absurdity and repugnancy. In such cases, in order to avoid uncertainty, inconvenience and
confusion, a liberal construction of the statute is permissible.18

The words ‘any question relating thereto’, in the definition of an ‘award’ in s 2(b), and the words ‘matters incidental
thereto’ in s 10(4), are wide enough to take in their fold preliminary questions such as whether the dispute under reference
is an ‘industrial dispute’ or not. This construction would avoid repugnancy, confusion and absurdity. This was the rationale
of the decision of the Allahabad High Court in the Swadesi Cotton Mills case. But, instead of reverting to this rationale, the
Supreme Court disposed it off with a perfunctory statement that, ‘in our opinion, this is not a correct statement of law on

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the point’. It appears that the court thought that only a decision on merits would satisfy the requirements of the definition
of an ‘award’, without spelling out the implications of the expression ‘any question relating thereto’ appearing in the
definition of ‘award’ in s 2(b), or of the words ‘matters incidental thereto’ occurring in s 10(4). The decision on this point,
therefore, requires a reconsideration. In Hindustan Motors, it was held that the construction placed on the expression ‘or
any question relating thereto’ by the Calcutta High Court in BR Herrman (supra) could lead to absurdity and
inconvenience. In the case of a ‘no-dispute’ award, the dispute still subsists and awaits adjudication, as there has been no
award. Therefore, a second reference of the same dispute cannot be held to be bad.19 In Gurbhej Singh, the facts were: the
labour court dismissed the reference for non-prosecution, whereupon the government made a second reference of the same
dispute. The issue was whether such a reference is barred by res judicata. Negating the contention, it was held that such
dismissal of first reference could not bar a second reference as there was no adjudication on merits.20

Compromise Award

The Act does not contain any provision specifically authorising an industrial adjudicator to record a compromise and pass
an award in its terms corresponding to the provisions of O 23, r 3 of the Code of Civil Procedure. But this does not mean
that the tribunal is precluded from taking note of a compromise entered into between the Workers and management. In DN
Ganguli, the Supreme Court made an obiter observation to the effect:

it would be very unreasonable to assume that the industrial tribunal would insist upon dealing with the dispute on merits even after
it is informed that the dispute has been amicably settled between the parties... There can, therefore, be no doubt that if an industrial
dispute before the tribunal is amicably settled, the tribunal would immediately agree to make an award in terms of the settlement
between the parties. 21

The Bombay High Court in Maharana Mill, while dealing with a case of withdrawal of a dispute by the parties from
adjudication also made an obiter observation that the position might have been different, if the dispute had been settled on
merits by private agreement and the tribunal had been asked to make an award in terms of the agreement.22 The Madras,23
Madhya Pradesh,24 Andhra,25 and Patna,26 High Courts have taken the view that even if the parties to a dispute come to a
settlement by mutual discussion outside the field of industrial adjudication, still the tribunal cannot abdicate its duties to
find out the process by which the settlement has been arrived at and weigh the pros and cons of the same, apply
independently its mind to it and thereafter determine the dispute or question in the light of such settlement. The tribunal
can adopt the compromise entered into by the parties as the foundation of its award after satisfying itself that the settlement
is fair and just. In Hindustan HFE Union, the Delhi High Court observed that it would be difficult to subscribe to the
proposition that the consent award cannot be regarded as an award unless it bears on its face an expression of the tribunal’s
opinion that it is fair, just and equitable. The court emphatically held that a consent award is as good as an award made by
the tribunal after contest and is to be treated as an award so long as the compromise embodied in the award resolves the
disputes between the parties which had been referred to the tribunal for adjudication and is not tainted with fraud,
collusion, coercion or undue influence. Such consent award is binding on the parties unless it is terminated in the manner
provided by sub-s (6) of s 19 of the Act.27 This view does not appear to be the correct view of Law as it seems to suggest
that it is not necessary for the tribunal to bring its own judicial mind to bear upon the compromise to give it the character
of ‘determination’. In Government Silk Weaving Factory, the Supreme Court upheld the validity of a settlement which was
adopted by the tribunal after applying its mind judicially to it.28

The Gujarat High Court in Gandhidham Nagarpalika, observed that if the parties do not adduce evidence on the issue
whether or not settlement was just and fair, they impliedly meant that they accept the averments made in their respective
pleadings and they do away with the requirement of any proof thereof. Subsequently, neither party can make the grievance
that the other party did not lead any evidence before the tribunal.29

Where, during the pendency of an industrial dispute before the tribunal, the management and the workman arrived at a
compromise settlement and filed the same before the tribunal, the rejection of the said settlement by the tribunal on the
ground that the workman was not present was perverse. In such a case, the tribunal was bound to accept the compromise.30
In Indian Bank, the facts disclosed that the Bank, having entered into an agreement with the canteen staff, challenged the
consent award passed by the tribunal. Seth J, of Calcutta High Court rejected the contention of the Bank that it was not an
award within the meaning of s 2(b).31 But, where the workman, after accepting the offer made by the management for a
compromise on certain terms, withdrew the said acceptance at the next hearing before the labour court, the passing of an
award by the labour court on the alleged compromise was erroneous and hence not sustainable.32

Withdrawal of the Dispute

There has been some conflict of judicial opinion on the question whether the order of a tribunal permitting withdrawal of

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an ‘industrial dispute’ from adjudication for private settlement by subsequent negotiation or by arbitration by private
arbitrators, even if published under s 17 of the Act, would be an ‘award’ under s 2(b). A single judge of the Kerala High
Court,33 observed that the expression ‘determination’ in the definition of award in the Act indicates only a coming to an
end, may be in any way whatever, though it may require examination and choice. But another single judge of the same
High Court dissented from these observations and said that, to satisfy the definition of an award there should be an interim
or final determination of the dispute and there is none where the tribunal merely dismissed the reference for non-
prosecution, and held that an order of the tribunal permitting withdrawal of the dispute for subsequent settlement or
arbitration cannot amount to an award.34 Likewise, the Bombay High Court, held that there must be ‘determination’ of an
industrial dispute or a question relating thereto and if the dispute remains unresolved as before and is to be determined in
future either by private arbitration or negotiation, there is no determination of the dispute by the Tribunal. It was, therefore,
held that even though the order made by the Tribunal was described as ‘award’, and also published as such in the official
gazette, it would not be an ‘award’ within the meaning of the definition.35 This view of the Bombay High Court was
followed by the Madhya Pradesh High Court.36 The Mysore High Court has also held that there was determination only
when there was an adjudication on the merits.37 This is the correct view of the law. Occasionally, in the course of
adjudication proceedings, the workmen give up or do not press some of the demands before the tribunal. Consequently, no
evidence is led on such demands. It is impossible for any tribunal to adjudicate upon any demand without evidence on
record. In the absence of any allegation that such demands were unfairly given up, the tribunal is to content itself by
recording that the demands were given up or were not pressed. Such holding will constitute an award.38

Ex parte Award

Section 15 of the Act makes it the duty of the tribunal to make an award and submit it to the ‘appropriate Government’.
Rule 10B of the Industrial Disputes (Central) Rules 1957 prescribed the procedure to be adopted by the tribunal when a
reference is made to it and the scheme of the rules makes it clear that the tribunal must make a pronouncement on the
validity of the claim made by one party and repudiated by the other. Although r 22 empowers the tribunal to proceed ex
parte, when one of the parties to the proceedings before it fails to appear, the adjudicator is not absolved of his duty to
make the determination of the dispute which he is called upon to decide. The scheme of the Act and the rules make it
obvious that even though a party is placed ex parte, the tribunal must pronounce on the dispute and record its findings with
respect to that matter. In other words, the tribunal has no power to reject the reference.39 The Andhra, Allahabad, Kerala,
Madhya Pradesh and Mysore High Courts have held that a reference dismissed by the tribunal for default of appearance of
workmen, even though published in the official gazette, does not attain the sanctity to get itself exalted into an ‘award’ as
defined in s 2(b) of the Act, because such an order does not involve any adjudication whatsoever of the dispute referred to
it and in no manner sets at rest the differences between the opposing parties.40 To satisfy the definition of ‘award’, there
should be an interim or a final determination of the dispute and there is none where the tribunal merely dismissed the
reference for non-prosecution.41

Section 17(2) gives finality to the ‘award’ published under s 17(1). But if there is no ‘determination’ of the industrial
dispute or any question relating thereto as contemplated by s 2(b), the order of the tribunal dismissing the reference merely
on the ground of non-prosecution would not be an ‘award’ in the eye of law. Hence, the publication of such an order
purporting to be an ‘award’ would not make it final under s 17(2). In view of the provisions of r 22 of the Central Rules,
the adjudicator may proceed ex parte where any party fails to attend or be represented or after having attended or being
represented fails to file the pleadings or participate in the proceedings, as if that party ‘had duly attended or had been
represented’. In such situations, if after applying its mind fully to the statements and documents placed before it by the
party appearing before it, the tribunal makes the award, such an award is not assailable.42 Furthermore, after an ex parte
award becomes enforceable on the expiry of 30 days as contemplated by s 17 A, an application to assail such an award will
not be maintainable.43 But if an aggrieved party can successfully show to the reviewing court that its absence from taking
part in the adjudication proceedings was unavoidable and was not due to any lack of bona fides, it may be a case for
quashing an ex parte order.44

In RB Girap,45 the labour court dismissed the reference because on the date for filing the claim statement of the workman,
neither the workman nor his advocate were present. But when the workman became aware of the order of the labour court,
his advocate advised him that the application for setting aside the order need not be filed till the award is published in the
government gazette. After publication of the award, the workman filed the application for restoration, which was rejected
by the labour court as time-barred. The award was quashed by Bombay High Court, restoring the matter to the labour
court. The delay in making the application for restoration was condoned for the reason that the poor employee drawing
negligible wages should not be denied the opportunity of being heard on merits by the labour court, and he should not be
punished for the erroneous advice given to him by his lawyer. If the tribunal is clothed with the authority to pass an ex
parte award, then necessarily by implication it follows that it can set aside the same. If the tribunal in seisin of the
controversy is not relegated to the position of functus officio, then, there is no question and/or doubt about the tribunal’s
competence to entertain the application for setting it aside.46 Till the award is published under s 17A and thirty days expire

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from the publication thereof, the tribunal has all control. It may become functus officio only thereafter, and not at any
interim stage or prior to the said stage. The tribunal can reopen its order till the award becomes final.47 The labour court
cannot set aside an ex parte award after the expiry of 30 days from the date of publication of award, as it becomes functus
officio after the said period.48 However, in Anil Sood, the Supreme Court held that the labour court/industrial tribunal
would not become functus officio and has jurisdiction to deal with the application for setting aside the ex parte award. The
court observed:

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 s 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. 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, when 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.49

The above decision deserves to be assailed in so far as it propounds that the tribunal has the power to set aside an award
even after the expiry of 30 days after its publication by the Government. It is one thing to say that the tribunal does not
become functus officio on the submission of the award to the government and hence it can set aside an ex parte award if it
could be shown that a party had sufficient cause in not appearing before the tribunal or that he was prevented from so
appearing before the tribunal, and quite another to suggest that the tribunal continues to enjoy the power to set aside an ex
parte order even after the award had come into operation. Such an interpretation of law is positively disastrous to the very
concept of ‘dispute settlement’ and is unwarranted. Once the award came into force on the expiry of thirty days after its
publication, the decision of the tribunal is made public. Further, it implies that the dispute has been conclusively
adjudicated by a competent authority after adhering to the procedure prescribed thereof. What remains thereafter is nothing
more than implementation of the terms of the award, even if it were found that the award was, or had to be, passed ex
parte. Thereafter, it cannot be permitted to be set aside by the same tribunal on the ground that there was justification for
setting it aside because a party to the dispute had shown sufficient cause for not showing up at the appropriate time. If, it
was found the labour court or tribunal had not served the notice to one of the parties, and proceeded to adjudicate the
dispute arbitrarily, then the right course for the aggrieved party is to approach the High Court and get it quashed, instead of
permitting the trial court to meddle with the award, even after it came into force, and set it aside. If, on the other hand, it
was found that the party did not choose to appear even after putting it on notice and even after granting sufficient number
of adjournments, then the defaulting party should not be permitted to gain an undue advantage out of his own wrong. At
any rate, it doesn’t appeal to common sense to invest the same tribunal/labour court with the power to set aside its own
award, that too, after it takes effect under s 17A. It is submitted that Anil Sood was wrongly decided and requires review by
a larger Bench.

In LML, the facts were that the labour court had not served notice on the management which was a party to the dispute
raised by the workman, and the submitted the ex parte award to the government. The application filed before the labour
court for setting aside the said ex parte award having been rejected on the ground that thirty days had expired and hence
the labour court became functus officio, the employer moved the High Court. Following the decision of Supreme Court in
Anil Sood, the Delhi High Court directed the labour court to dispose of the application of the defaulting party in terms of
the said ratio.50 In Surajgarh KVS Samiti, the High Court of Rajasthan dismissed the writ petition filed by the management
against the rejection of its application for setting aside the ex parte award, as it was found that the tribunal rejected the said
application on the ground that the management did not appear in the adjudication proceedings despite service of notice and
that the application was without merit.51 In Ajit Singh, a single Judge of Punjab and Haryana High Court held that the
labour court would become functus officio after the expiry of 30 days of the publication of the award, and hence the order
passed by it setting aside the ex parte award after that period would be invalid.52 It is submitted that the decision of Punjab
High Court in Ajit Singh lays down the correct law as compared to that of Supreme Court in Anil Sood (supra).

Relief

After determination of the issues referred to it, the tribunal has to award relief. If the claim is not sustainable, the tribunal
may not award any relief. But if the claim is made out, it may award in full or part, the relief claimed by the aggrieved
party, depending upon the circumstances of each case.53

1. Form of the Award

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For detailed discussion of the form of the award, see notes and comments under s 16.

2. Publication of Award

See notes and comments under s 17.

3. Commencement of Award

See notes and comments under s 17A.

4. Period of Operation of the Award

See notes and comments under s 19.

5. Retrospective Effect of Award

6. Binding Effect of Award

See notes and comments under s 18(3).

7. Enforcement of Award

A party in whose favour an award is made may enforce it in any of the following manners:

(i) By moving the ‘appropriate Government’ to prosecute the defaulting party under s 29.
(ii) Where any money or benefit which is capable of being computed in terms of money under an ‘award’ to a
workman from his employer, such workman may make an application under s 33C to the appropriate government
or the layout court, for the recovery of the money or computation of such benefit in terms of money due to him
under the award.
(iii) The breach of an award may itself be raised as an ‘industrial dispute’ to lead to another reference to an industrial
tribunal.54
(iv) Institute a civil suit for obtaining a decree in satisfaction of the dues under the award, and such a decree will be
enforceable by execution proceedings under O 21 of the Code of Civil Procedure.55

The point No (i) is only a criminal provision for breach of an award, the point No (iii) will lead to absurdity and point No
(iv) will lead to protracted and prolix litigation. The only proper mode of recovery of money or benefit under an award is
the point No (ii). But an award of Industrial Tribunal is the decision of an industrial dispute by a statutory Tribunal and can
have no more statutory force than the decree of the civil court. Either it may be executed or otherwise implemented in the
manner laid down in the relevant law, but cannot be enforced by a prerogative writ of mandamus as an instrument having
the force of Law itself.56

Clause (bb): BANKING COMPANY

Banking Company

The term ‘Banking Company’ was inserted in the Act by the Industrial Disputes (Banking and Insurance Companies)
Ordinance 1949, which was promulgated on 30 April 1949 and then enacted into law by s 3 of the Industrial Disputes
(Banking and Insurance Companies) Act 1949 (54 of 1949). This definition was amended by s 3 of the Act 36 of 1956
which again was substituted by the present definition by the State Bank of India (Subsidiary Banks) Act 1959 (38 of 1959),
s 64 and Sch 3, Pt 2. The definition was again amended by s 38 and Sch 2, Pt 2 of Act 18 of 1964, where ‘the Industrial
Development Bank of India’ was also included in the definition. Now, by the Banking Companies (Acquisition and
Transfer of Undertakings) Act 1970 (Act 5 of 1970) ‘a corresponding new Bank constituted under s 3 ’ of that Act has
been further included in the definition. The definition is not violative of Art. 14 of the Constitution as discriminatory.57 To
fall within the meaning of this definition, a Banking Company has to satisfy two requirements, viz:

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(i) It should be a ‘Banking Company’ as defined in s 5 of the Banking Companies Act 1949 (10 of 1949).
(ii) It should have branches or other establishment in more than one State. The following Banks have specifically been
included in the definition:
(a) The Industrial Development Bank of India;

(b) The Reserve Bank of India;

(c) The State Bank of India; and

(d) Any subsidiary Bank as defined in the State Bank of India (Subsidiary Banks) Act 1959.

A ‘Banking Company’ does not cease to be a ‘Banking Company’ by merely changing its name and transferring some of
its assets and liabilities to some other company. For a Banking Company to cease to be Banking Company within the
meaning of s 2(bb) of the Industrial Disputes Act, it is necessary that the licence granted to it by the Reserve Bank of India
under s 22 of the Banking Companies Act must be cancelled.58 It is necessary that the Banking Company must, at the time
in question be able to accept deposits of money from the public repayable on demand or on such terms on which the
money might have been deposited. It is sufficient that Banking is the primary business of the company even if by reason of
certain supervening cause, it is not able for the time-being to carry on the work of receiving deposits and of making
payment.59

Clause (c): BOARD

Board

This clause is the reproduction of s 2(a) of the repealed Trade Disputes Act 1929. It has not since been amended. A ‘board’
is constituted under s 5 of the Act, by a notification in the official gazette. It is constituted for the purpose of promoting
settlements of industrial disputes. Its powers are wider than those of a conciliation officer. Under s 10(1)(a), existing or
apprehended disputes are referable to a board for promoting their settlement. Section 11 deals with the powers of boards,
while s 13 deals with their duties. Section 20 specifies the points of time when the proceedings before a board are deemed
to have commenced and concluded.

Clause (cc): CLOSURE

Closure

The expression ‘closure’ had not been defined in the Act hitherto. But, in view of a lot of litigation being centered around
the closure of industrial undertakings, subsequent legislation has accentuated the need for defining a ‘closure’. Section
25(FFA) and s 25(O) impose certain conditions on indiscreet closures. Therefore, with a view to effectively deal with the
subject, this definition has been inserted. Certain judicial dicta have held that even a temporary closure in certain
circumstances, could be deemed to be a closure. But, under the present definition, it is only ‘the permanent closing down’
of a place of employment that can be taken to be a closure. However, a closure may be partial. In other words, it is not
necessary that the whole establishment is closed, for the purposes of the definition. In Glass Workers, a dispute raised by
the union that the closure of the industrial establishment effected in 1982 was not bona fide closure, but was in fact a lock-
out, was referred for adjudication to the industrial tribunal. The tribunal passed an award holding that the closure was real
and bona fide. Justice Tiwari of Allahabad High Court upheld the order of the tribunal to the effect that no relief could be
granted to the workmen in a dead industry.60 For a detailed discussion, see the notes and comments under s 25FFF.

Clause (d): CONCILIATION OFFICER

Conciliation Officer

A conciliation officer is appointed under s 4 of the Act. His appointment may be for a limited period or it may be
permanent. Conciliation officers are charged with the duty of mediating in and promoting the settlement of industrial
disputes. Section 11 deals with the procedure and powers of conciliation officers, while s 12 deals with their duties.
Section 20 specifies the points of time at which the conciliation proceedings shall be deemed to have commenced and
concluded.

Clause (e): CONCILIATION PROCEEDING

Conciliation Proceeding

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The term ‘conciliation proceeding’, means any proceeding before a conciliation officer or a board. Where a dispute relates
to a ‘public utility service’ and a notice under s 22 has been given, the conciliation officer is bound to initiate the
conciliation proceedings. But regarding other establishments, discretion is given to the conciliation officer to initiate or not
to initiate the conciliation proceedings. However, a board can initiate the proceedings only after a reference has been made
to it under s 10 of the Act and the scope of the ‘conciliation proceedings’ before the board is limited by the terms of the
reference made to it. Before the amendment of the definition of ‘settlement’ in s 2(p), by the Amending Act of 1956, any
settlement arrived at in the absence of the conciliation officer, was held not to be binding under the Act.61 But after the
amendment, a written agreement between the parties, arrived at otherwise than in the course of ‘conciliation proceedings’,
has been included in the definition and would be a binding ‘settlement’, provided that the requirements of that provision
are complied with.

Clause (ee): CONTROLLED INDUSTRY

Controlled Industry

The industries, the control of which the Union Government, by a Central Act, may declare to be expedient in the public
interest, will fall within the purview of this definition. Schedule 1 to the Industrial (Development & Regulation) Act 1951
gives the list of such controlled industries. [See also Notes and Comments under s 2(a) —‘appropriate government’, under
the caption ‘any controlled industry as may be specified in this behalf by the Central Government’.]

Clause (f): COURT

Court

Section 2(b) of the repealed Trade Disputes Act 1929 (Act 7 of 1929) was identical to this clause, which was originally
enacted in the IDA 1947. There has been no amendment of this clause so far. The appropriate government may appoint a
court of inquiry under s 6, for inquiring into any matter appearing to be connected with or relevant to an industrial dispute.
The procedure to be followed by the court and its powers have been laid down in s 11. Section 14 prescribes the duties of
the court of inquiring into the matters referred to it and reporting thereon to the appropriate government, ordinarily, within
a period of six months from the commencement of its inquiry. The reference to a court of inquiry is to be made under s
10(1)(b).

Clause (g): EMPLOYER

Employer

The repealed Trade Disputes Act 1929, contained a somewhat similar, though not identical, provision in s 2(c). The present
clause was originally enacted in the IDA. The definition is neither exhaustive nor inclusive.62 The word ‘employer’ is not
specifically defined, but the clause merely indicates who is to be considered an employer for the purposes of an industry,
carried on by or under the authority of a department of government and by or on behalf of a local authority.

The definition of an ‘employer’ has been made exclusive and it is probably for the benefit of the employees. For example,
if a departmental head has taken an action, a complaint can be taken against such action as being the action of the
employer. To that extent, the agent or the person for the time being in authority, is clothed with the personality of the
employer, so that he may be answerable.63 An employer under s 2(g) means, in relation to an industry carried on by or
under the authority of any department of the Central Government or a state government, the authority prescribed in that
behalf, or where no such authority is prescribed, the head of the department.64On a combined reading of s 2(g), 2(j) and
2(s), it is apparent that if the state carries on any undertaking or business, it is an employer within the meaning of the Act
and persons working in such undertakings, are its workmen.65 The definition of the term ‘employer’ is, therefore, intended
to operate only in relation to an activity properly describable as an industry.66

Rule 2(g) of the Industrial Disputes (Central) Rules 1957, prescribes that, with reference to cl (g) of s 2, in relation to an
industry carried on by or under the authority of a department of the Central Government or state government, the officer-
in-charge of the industrial establishment shall be the ‘employer’ in respect of that establishment, and in relation to an
industry concerning the railways, carried on by or under the authority of a department of the Central Government, anyone
of the officers mentioned in sub-cll (a), (b) and (c) of r 2(g)(ii), shall be the ‘employers’. The definition of the term
‘employer’ in this clause, is neither exhaustive nor inclusive. The meaning given to the term ‘employer’ by this definition
is only illustrative. The term ‘employer’, therefore, must be given its ordinary grammatical meaning.67

Central Government

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The expression ‘Central Government’ has been defined in s 3(8) of the General Clauses Act 1897.

State Government

The expression ‘state government’ has been defined in s 3(60) of the General Clauses Act 1897. In Sarju Prasad, it was
held that, with respect to a workman working in the irrigation department of the State of Bihar, the State of Bihar was the
real employer.68

Local Authority

A ‘Local Authority’ has been defined by s 3(31) of the General Clauses Act 1897, as

A municipal committee, district board, body of port commissioners or other authority legally entitled to, or entrusted by the
government with, the control or management of a municipal or local fund.

The definition of an ‘employer’ clearly shows that a local authority may become an employer if it carries on an industry.69

‘In relation to an industry carried on by’

The words ‘in relation to an industry carried on by’ used in the definition, have to be read with the word ‘means’ in both
the sub-clauses. So read, the words ‘in relation’ make the intention of the legislature quite clear, ie, that they indicate that it
was in relation to those particular industries only, that the expression ‘employer’ was defined. Thus interpreted, the
expression ‘employer’ means the Central Government, the state government or the local authority ‘in relation to’ the
industries carried on by them.70

‘Carried on by or under the Authority of’

For the scope and meaning of this expression, see the notes and comments under the caption ‘Carried on by or under the
authority of’ in the definition of ‘appropriate government’ in s 2(a).

Other Employers

The term ‘employer’ is not defined in the Act, except where the term is used in relation to an industry carried on by a
department of the Central or state government or by some local authority.71 The meaning given to an ‘employer’ by the
definition, is only illustrative, not exhaustive.72 But the manner in which the definition is drafted shows that the
‘employers’ include, within the ambit of the Act, governments as well as private persons, as it is clear that its elaborate
machinery was devised not only for the industries run by the government and local authorities, but also for the industries
run by private persons.73 In other words, the term ‘employer’ must be given its ordinary grammatical meaning, namely a
person who employs someone to work or to do something for him.74This construction is also consistent with the
phraseology employed by the legislature in different sections of the Act and, any other construction of the expression
‘employer’ would create incongruity and repugnancy between the different sections.75 Hence, in relation to a proprietary
concern, the word ‘employer’ will mean the owner of the concern; in relation to a firm, it will mean the partners of that
firm and in relation to a joint stock company, it will mean the corporate body.76 Thus, in a case where an employee was
employed by the branch office of a newspaper office establishment, while formal confirmation was made by the head
office, for the purposes of the definition, the branch office was held to be the ‘employer’.77But the Visakhapatnam Dock
Labour Board, constituted under the Dock Workers (Regulation of Employment) Act 1948, in view of its functions under
the relevant provisions of the Act and the Dock Workers (Regulation of Employment) Scheme 1959 framed thereunder,
was held not to be the ‘employer’ of the Dock Labour workmen, as there was no employer-employee relationship between
the board and such workmen. Since the functions of the board did not come within the definition of an ‘industry’ within
the meaning of s 2(j) of the Act, it could not fall within the meaning of an ‘employer’ as defined in this clause.78 The
president of a municipality has been held to be an ‘employer’.79 But a member of a club, which is registered as a society
under the Societies Registration Act, is not an employer as contemplated by the definition in this provision.80

Change of Ownership: Successor-in-interest

An ‘employer’ in industrial law, means not only a person who engages another to work for him, but also his successors and
legal representatives.81 Industrial law regards the rights and obligations of the old concern as continuing and capable of
being enforced as against the new management and is not affected by the substitution of a new management for the old. In
other words, the transfer of a business ipso facto, does not terminate the services of the workmen employed in such

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business and a purchaser of such a concern as a going concern, with all its assets and liabilities, is bound to continue the
old employees on the same emoluments and with a continuity of service.82 Therefore, when there is a transfer of business
from one (owner) management to another, the rights and obligations which existed between the old management and their
Workers continue to exist vis-a-vis the new management, even after the date of transfer,83 provided, however, that there is
a continuity of service and identity of business.84 Thus, a person who, on such transfer, becomes the owner of a concern,
becomes the employer of the employees of the establishment and hence, becomes liable for the past services of its
workmen.85This principle of industrial law finds recognition in statutory provisions like s 18(3)(c) of the Act and ss 114
and 115 of the Bombay Industrial Relations Act.

As long as there is identity of the business itself, a mere change of name would not affect the rights of the Workers. For
instance, where a banking company transferred some of its assets and liabilities to another concern and changed its name,
it was held that it did not cease to be an employer.86 Likewise, where a transfer is effected in favour of a benamidar, with a
view to victimize the workmen, such a benamidar would not become the employer and the original employer would not
cease to be the employer.87 But where the business is not taken over as a going concern, or it does not retain its identity, the
new management, though dealing in the same line, cannot be considered to be a successor or assignee of the old business.88
In Anakapalle CAIS, the Supreme Court summed up the factors to be taken into consideration while determining the
question as to whether a purchaser of an industrial concern can be held to be a successor-in-interest of the vendor.

Illustrations

Where the purchaser purchased only the machinery and plant of a concern and did not purchase the concern as a going
concern, or its goodwill, such purchaser could not be considered as a successor-in-interest and no liability could be cast on
him.89 Likewise, where the running business is not taken over, even though the purchaser was dealing in the same line of
business, he could not be considered to be a successor or assignee of the old business and the old workmen, who were
employed by the purchaser, could not claim a continuity of service against the new management.90 On the other hand,
where there is merely a change in the management or the establishment, the new management is the successor of the
previous management.91 A change of partnership by an inclusion or retirement of a partner, although it legally changes the
constitution of the firm, will not bring about change of business or employer.92 Where the proprietorship business was
taken over and continued by a private limited company, in which the former proprietor, his wife and his manager became
directors and the new company was formed to carry on and continue the former business in the same style, though a
different entity; under a different name, the new company was held to be the successor-in-interest of the old proprietorship
business and was bound to continue to employ the former workmen.93 Where a company sold its machineries and business
to a co-operative society; but the co-operative society did not purchase the good-will of the company; nor did it purchase
the outstandings and the liabilities of the company; but the society continued the same business in the same place, without
any appreciable break and took in its employment, a number of employees of the company, the society was held to be a
successor-in-interest of the company.94

In Industrial Paper ALE Union, the facts, which require a somewhat detailed narration, were: the union represented its
members employed by AIDC in its Extensible Sack Kraft Paper Project (‘ESKPP’) under Industrial Paper (Assam) Ltd,
(‘IPAL’), raised a dispute for non-payment of salaries of its members by AIDA after October, 1998 on the plea that the
members of the appellant were not the employees of Assam Industrial Development Corporation (‘AIDC’) but of the
IPAL. Accordingly the appropriate Govt vide notification dated 20-2-1999 referred the following issues to the Labour
Court for adjudication:

1. Whether the management of Assam Industrial Development Corporation (AIDC) is justified to deny as owner of the Sack
Craft Paper Project of M/s Industrial Papers (Assam) Ltd (IPAL), though they have signed an agreement with a
contractor as ‘owner’ of the Sack Kraft Paper Project, Dhing, District Nagaon, Assam.
2. Whether the AIDC is justified to deny to take the responsibility of the Industrial Papers (Assam) Ltd employees, though
the employees were appointed by the AIDC through the advertisement published in the newspaper.
3. Whether the management of AIDC is justified by not absorbing or engaging the employees of the IPAL, in their other
Promoted industries or give them salary regularly though they have failed to install or run the proposed Paper Mill in
Dhing, Nagaon.
4. If not, then the said affected employees are entitled for either regular monthly salary from the management or absorption
in the other Industrial Units promoted by the Assam Industrial Development Corporation, Guwahati.
5. And the AIDC should not recruit or appoint new employees to say other their Promoted Industries until and unless the
employees of the Industrial Paper are engaged or absorbed by the Management.

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AIDC raised preliminary objection against the issues figured in the government order, inter alia, questioning the very
maintainability of the reference on the ground that the purported dispute was not an industrial dispute; that the notification
issued by the Government could not constitute an industrial dispute because AIDC was not a proper or necessary party;
and that the members of the union, being employees of a separate company ie IPAL, could not claim to be the employees
of AIDC, which was merely a Promoter Company. The Labour Court in its Award held as follows:

1. There was no material on record to show that AIDC had transferred Sack Kraft Paper Project, Dhing, to IPAL at any
point of time. It was observed that though both parties have approved the appointment of candidates at IPAL and AIDC
none of them came within the categories of those post advertised.

2. The Issue is redundant as members of the Union do not come within the categories of posts advertised.

3. It was not incumbent of AIDC to absorb members of the appellant-Union to any other AIDC industry.
4. IPAL could not be run, it was incumbent for AIDC to terminate the services of the members of the appellant-Union
giving them terminal benefits according to relevant industrial and labour laws.
5. Until that was done AIDC was obliged to give the members of the appellant-Union regular salaries.

The writ petition and writ appeal filed by the union were dismissed at both the tiers of the High Court on the ground that
AIDC was not the owner of ESKPP of IPAL, and hence no liability could be fastened to AIDC for the
absorption/engagement of the employees of IPAL in any other industry promoted by AIDC or to pay them salaries
regularly after the closure of the project. Aggrieved by the decision, the union approached the Supreme Court. Dismissing
the appeal, Pasayat J (for self and Kapadia J) held:

In the written statement before the Labour Court, AIDC has taken specific stand in the following manner:

“That when the employees were paid regular salary by IPAL Project from its own fund/account at that time no such demand was
raised by the employees of IPAL. When they found that the Project is virtually closed and they are not getting salary from their
own Project, they demanded that they belong to AIDC for the sake of getting salary from AIDC without doing any job for AIDC.
In such situation the employees of IPAL cannot be treated as employees of AIDC. These employees were appointed/recruited
against the Project as per the job specification and as per requirement and sanctioned strength of IPAL while seeking requisition
from Employment Exchange the requisition was signed by General Manager, Sack Kraft Paper Project as the employer. All the
employees have been appointed on behalf of the IPAL Project. They are employees of IPAL governed by all rules and regulations
of Industrial Papers Assam Ltd. Under these circumstances stated above the management of AIDC cannot take any responsibility
for the employees of IPAL.”

Above being the position, the judgment of the Division Bench affirming that of learned single Judge cannot be faulted and the
appeal stands dismissed. Subject to what is stated above, dismissal of the appeal shall not stand in the way of the concerned
employees or recognized Unions making claim for arrears of salaries or claims to be due from IPAL.95 (paras 14 & 15)

Contract Labour

The definition of ‘employer’ in s 3(14) of the Bombay Industrial Relations Act 1946, is wider than the definition in s 2(g)
of the IDA and is capable of being applied in a wide and generic sense to any employee engaged at any time, in the
industry concerned and to any employer in the same industry. In the under-noted cases,96 the owners of certain
undertakings have been held to be the employers qua the workmen employed by the contractors. The Bombay Dock
Labour Board constituted under the Dock Workers’ Regulation of Employment (Scheme) 1951, has been held to be the
employer of the workmen working under the stevedores, though the wages of such workmen were paid by the stevedores.97
On the other hand, a colliery manager was held not be the ‘employer’ of a workman working under a contractor in the
colliery, merely by reason of the fact that he had suspended such workman in the exercise of the statutory duty cast on him
under the Mines Act.98

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3 Words and figures “the Agricultural Refinance Corporation established under s 3 of the Agricultural Refinance Corporation Act,
1963, (10 of 1963)” which were inserted by Act 10 of 1963, s 47 and Sch II, were omitted by Act 36 of 1964, s 2 (wef 19-12-1964).
4 The words “by the Federal Railway Authority” omitted by AO 1948.
5 Ins by Act 65 of 1951, s 32 (wef 8-5-1952).
6 The words “operating a Federal Railway” omitted by AO 1950.
7 Subs by Act No 46 of 1982, s 2 (wef 21-8-1984).
8 Subs by Act 24 of 1996, s 2, for the words “the Industrial Finance Corporation of India established under s 3 of the Industrial
Finance Corporation Act, 1948” (wef 11-10-1995).
9 The words and figures “or the Indian Airlines’ and “Air India’ Act, 1953 (27 of 1953)” omitted by Act 24 of 1996, s 2 (wef 11-10-
1995). Earlier these words were inserted by Act 35 of 1965.
10 Subs by Act 24 of 1996, s 2, for “the Oil and Natural Gas Commission, established under s 3 of the Oil and Natural Gas
Commission Act, 1959 (43 of 1959)” (wef 11-10-1995).
11 Subs by Act 24 of 1996, s 2, for the words “the International Airports Authority of India constituted under s 3 of the International
Airports Authority Act, 1971 (43 of 1971)” (wef 11-10-1995).
12 Ins by Act 53 of 1987, s 56 and Second Sch, Part III (wef 9-7-1988).
13 Subs by Act 54 of 1949, s 3, for “a mine, oil-field”.
14 Subs by Act 24 of 1996, s 2, for “a banking or an insurance company” (wef 11-10-1995).
15 Ins by Act 36 of 1964, s 2 (wef 19-12-1964).
16 Subs by Act 24 of 2010, s 2 (wef 15-9-2010 vide SO 2278 (E), dated 15-9-2010), for the words “major ports, the Central
Government, and”.
17 Subs by Act 24 of 2010, s 2 (wef 15-9-2010 vide SO 2278 (E), dated 15-9-2010). Before substitution, sub-clause (ii) stood as under:

“(ii) in relation to any other industrial dispute, the State Government;”.

18 Ins by Act 36 of 1964, s 2 (wef 19-12-1964).

19 Ins by Act 43 of 1953, s 2 (wef 24-10-1953).
20 Clause (aa) was relettered as “(aaa)” by Act 36 of 1964, s 2 (ii) and clause (aa) was inserted.
21 Subs by Act 36 of 1956, s 3 (wef 10-3-1957).
22 Subs by Act 38 of 1959, s 64 and Sch III, Pt II, for cl (bb) which was inserted by Act 54 of 1949, s 3.
23 Now, see the Banking Regulation Act, 1949 (10 of 1949).
24 Ins by Act 28 of 1981, s 40 and Sch II, Pt II (wef 1-1-1982).
25 Ins by Act 62 of 1984, s 71 and Sch III, Pt II (wef 20-3-1985).
26 The words “the Industrial Development Bank of India” omitted by Act 53 of 2003, s 12 and Sch, Pt III (wef 2-7-2004).
27 Ins by Act 39 of 1989, s 53 and Sch II, Pt II.
28 Subs by Act 5 of 1970, s 20 for “and any subsidiary Bank” (wef 19-7-1969).
29 Subs by Act 40 of 1980, s 20, for “and any subsidiary bank” (wef 15-4-1980).
30 Ins by Act 46 of 1982, s 2 (wef 21-8-1984).
31 Ins by Act 65 of 1951, s 32 (wef 8-5-1952).
32 Clause (eee) omitted by Act 36 of 1964, s 2 (wef 19-12-1964). Earlier cl (eee) was inserted by Act 43 of 1953, s 2 (wef 24-10-
1953).
33 Subs by the AO 1948 for the words “a Government in British India”.
34 Ins by Act 45 of 1971, s 2 (wef 15-2-1971).
35 Clause (h) omitted by the AO 1950.
36 Ins by Act 18 of 1952, s 2 (wef 4-3-1952).
37 On the enforcement of cl (c) of s 2 of Act 46 of 1982, cl (j) of s 2 shall stand substituted as follows:—

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 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

“(j) “industry” means any systematic activity carried on by co-operation between an employer and his workmen (whether
such workmen are employed by such employer directly or by or through any agency, including a contractor) for the
production, supply or distribution of goods or services with a view to satisfy human wants or wishes (not being wants or
wishes which are merely spiritual or religious in nature), whether or not,—
(i) any capital has been invested for the purpose of carrying on such activity; or

(ii) such activity is carried on with a motive to make any gain or profit, and includes—

(a) any activity of the Dock Labour Board established under section 5A of the Dock Workers (Regulation of
Employment) Act, 1948 (9 of 1948);
(b) any activity relating to the promotion of sales or business or both carried on by an establishment, but does not
include—
(1) any agricultural operation except where such agricultural operation is carried on in an integrated manner with
any other activity (being any such activity as is referred to in the foregoing provisions of this clause) and such
other activity is the predominant one.
Explanation.—For the purposes of this sub-clause, “agricultural operation” does not include any activity
carried on in a plantation as defined in clause (f) of section 2 of the Plantations Labour Act, 1951; or

(2) hospitals or dispensaries; or

(3) educational, scientific, research or training institutions; or

(4) institutions owned or managed by organisations wholly or substantially engaged in any charitable, social or
philanthropic service; or
(5) khadi or village industries; or

(6) any activity of the Government relatable to the sovereign functions of the Government including all the
activities carried on by the departments of the Central Government dealing with defence research, atomic
energy and space; or
(7) any domestic service; or

(8) any activity, being a profession practised by an individual or body of individuals, if the number of persons
employed by the individual or body of individuals in relation to such profession is less than ten; or
(9) any activity, being an activity carried on by a co-operative society or a club or any other like body of
individuals, if the number of persons employed by the co-operative society, club or other like body of
individuals in relation to such activity is less than ten;”

38 Ins by Act 46 of 1982, s 2 (wef 21-8-1984).

39 Ins by Act 54 of 1949, s 3 (wef 14-12-1949).
40 Ins by Act 46 of 1982, s 2 (wef 21-8-1984).
41 Clause (kka) re-lettered as cl (kkb) by Act 46 of 1982, s 2 (wef 21-8-1984), earlier cl (kka) was ins by Act 36 of 1956, s 3 (wef 10-
3-1957).
42 Ins by Act 43 of 1953, s 2 (wef 24-10-1953).
43 Subs by Act 46 of 1982, s 2, for “or for any other reason” (wef 21-8-1984).
44 Subs by Act 46 of 1982, s 2, for “closing of a place of a employment” (wef 21-8-1984).
45 Clauses (la) & (lb) ins by Act 36 of 1964, s 2 (wef 15-12-1964).
46 Ins by Act 36 of 1956, s 3 (wef 10-3-1957).
47 Ins by Act 45 of 1971, s 2 (wef 15-12-1971).
48 Ins by Act 36 of 1964, s 2 (wef 19-12-1964).
49 Ins by Act 45 of 1971, s 2 (wef 15-12-1971).
50 Subs by Act 36 of 1964, s 2 for “Schedule” (wef 19-12-1964).

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51 Now the Railways Act, 1989 (24 of 1989).

52 Ins by Act 43 of 1953, s 2 (wef 24-10-1953).
53 Ins by Act 49 of 1984, s 2 (wef 18-8-1984).
54 Subs by Act 36 of 1956, s 3, for clause (p) (wef 7-10-1956).
55 Ins by Act 35 of 1965, s 2 (wef 1-12-1965).
56 Ins by Act 46 of 1982, s 2 (wef 21-8-1984).
57 Subs by Act 18 of 1957, s 2, for clause (r) (w.e.f. 10-3-1957), earlier cl (r) was amended by Act 36 of 1956, s 3 (wef 10-3-1957).
58 Ins by Act 46 of 1982, s 2 (wef 21-8-1984).
59 Ins by Act 46 of 1982, s 2 (wef 21-8-1984).
60 Ins by Act 43 of 1953, s 2 (wef 24-10-1953).
61 Ins by Act 46 of 1982, s 2 (wef 21-8-1984).
62 Subs by Act 46 of 1982, s 2, for cl (s) (wef 21-8-1984), earlier, subs by Act 36 of 1956, s 3 (wef 29-8-1956).
63 Subs by Act 24 of 2010, s 2 (wef 15-9-2010 vide S.O. 2278 (E), dated 15-9-2010), for the words “one thousand six hundred
rupees”.
64 Kartick Chandra Malik v Rani Harsha Mukhi Dasi AIR 1943 Cal 345 (FB).
65 Rai Jogendra CG Bahadur v Bhawani Charan Law AIR 1945 Cal 425 (DB), per Mittel J.
66 N Subramania Iyer v Official Receiver AIR 1958 SC 1 [LNIND 1957 SC 72], 10, per Sinha J.
67 Bennett Coleman & Co Pvt Ltd v Punya Priya Das Gupta (1969) 2 LLJ 554 [LNIND 1969 SC 150] (SC), per Shelat J.
68 Gough v Gough [1891] QB 665 , per Esher MR.
69 Hyderabad Asbestos Cement Products Ltd v EIC 1976 Lab IC 868 [LNIND 1975 AP 238], 874 (AP) FB), per Krishna Rao J.
70 Savoy Hotel Co v London County Council [1900] 1 QB 665.
71 Hyderabad Asbestos Cement Products Ltd v EIC 1976 Lab IC 868 [LNIND 1975 AP 238], 874 (AP) (FB), per Krishna Rao J.
72 Government of India (2002), Report of NCL-II, Chap 13, p 39, para 6.38.
73 Firebricks & Potteries Ltd v Firebricks & Potteries Ltd Workers’ Union (1956) 1 LLJ 571, 573 (Mys), per Venkataramayya CJ.
74 National Buildings Construction Corpn Ltd v MK Jain 1981 Lab IC 62, 67 (Del), per Anand J.
75 Continental Construction Pvt Ltd v Goi 1977 Lab IC 1199, 1200-01 (AP) (DB), per Jeevan Reddy J.
76 Ins by Amendment Act 24 of 2010 (wef 15-9-2010).
77 Subs. Ibid. prior to substitution, the sub-cl (ii) read as under:

“(ii) in relation to any other industrial dispute, the State Government.”

78 Heavy Engineering Mazdoor Union v State of Bihar (1969) 2 LLJ 549 [LNIND 1969 SC 121], 552 (SC), per Shelat J.
79 Carlsbad Mineral Water Mfg Co Ltd v PK Sarkar (1952) 1 LLJ 488 [LNIND 1951 CAL 116] (Cal), per Harries CJ.
80 Abdul Rehman Abdul Gafor v E Paul (1962) 2 LLJ 693 [LNIND 1961 BOM 50] (Bom), per Desai J.
81 Bharat Glass Works Pvt Ltd v State of West Bengal (1958) 1 LLJ 467 [LNIND 1957 CAL 30], 470 (Cal), per Sinha J.
82 Indian Naval Canteen Control Board v IT (1965) 2 LLJ 366, 367 (Ker) (DB), per Menon CJ.
83 Mgmt of Bihar Khadi Gramodyog Sangh v State of Bihar 1977 Lab IC 466 [LNIND 1984 SC 252], 481 (Pat) (DB), per SK Jha J.
84 Heavy Engineering Mazdoor Union v State of Bihar (1969) 2 LLJ 549 [LNIND 1969 SC 121], 553 (SC), per Shelat J.
85 Union of India v LC (1970) 1 LLJ 184, 186 (P&H), per Tuli J.
86 Administrative Officer, Electro Chemical Research Institute v State of TN 1990 Lab IC 1815, 1818 (Mad) (DB), per Venkataswami
J.
87 Carlsbad Mineral Water Mfg Co Ltd v PK Sarkar (1952) 1 LLJ 488 [LNIND 1951 CAL 116] (Cal), per Harries CJ.
88 Abdul Rehaman Abdul Gafor v E Paul (1962) 2 LLJ 693 [LNIND 1961 BOM 50], 697 (Bom) : AIR 1963 Bom 267 [LNIND 1961
BOM 50]: (1963) 65 Bom LR 20, per Desai J.

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89 Heavy Engineering Mazdoor Union v State of Bihar (1969) 2 LLJ 549 [LNIND 1969 SC 121], 553 (SC) : AIR 1970 SC 82
[LNIND 1969 SC 121]: (1969) SCC 765, per Shelat J.
90 Hindustan Aeronautics Ltd v Workmen (1975) 2 LLJ 336 [LNIND 1975 SC 249], 338-39 (SC), per Untwalia J.
91 Rashtriya Mill Mazdoor Sangh v Model Mills (1984) 2 LLJ 507 [LNIND 1984 SC 252], 514 (SC), per Desai J.
92 Food Corpn of India Workers Union v Food Corpn of India 1985 Lab IC 732, 73 & -37 (SC), per Khalid J.
93 Air India Statutory Corpn v United Labour Union (1997) 1 LLJ 1113 [LNIND 1996 SC 2076], 1128 (SC), per K Ramaswamy J.
94 Heavy Engineering Mazdoor Union v State of Bihar (1969) 2 LLJ 549 [LNIND 1969 SC 121] (SC), per Shelat J.
1 Workmen Karnataka PF Employees Union v Addl IT (1983) Lab IC 1523, 1531-32 (Kant), per Malimath J.
2 Central Warehouse Corn v Delhi Admn (1983) 63 FJR 125 (Del), per Avadh Behari Rohatgi J.
3 Indian Naval CC Board v IT (1965) 2 LLJ 366, 368 (Ker) (DB), per Menon CJ.
4 Abdul Rehman Abdul Gafor v E Paul (1962) 2 LLJ 693 [LNIND 1961 BOM 50], 697 (Bom), per Desai J.
5 Mgmt of Bihar Khadi Gramodyog Sangh v State of Bihar 1977 Lab IC 466 [LNIND 1984 SC 252], 473 (Pat) (DB), per SK Jha J.
6 Swadeshi Cotton Mills Thozhilali Shemalana Padukappu Union v National Textile Corpn Ltd (1984) 1 LLJ 140 [LNIND 1983
MAD 83] (Mad) (DB), per Nainar Sundaram J.
7 National Building Construction Ltd v Ram Pal Singh 1997 Lab IC 2667, 2672 (Bom), per Lodha J.
8 Bharat Glass Works Private Ltd v State of West Bengal (1958) 1 LLJ 467 [LNIND 1957 CAL 30] (Cal), per Sinha J.
9 DP Kelkar v Ambadas Keshav Bajaj, AIR 1971 Bom 124 [LNIND 1970 BOM 33], 143 DB, per Kotwal CJ.
10 National Textile Corpn v IT 1979 Lab IC 1024, 1027 (All) (DB), per Ojha J.
11 Cotton Corporation of India Ltd v GC Odusmath (1999) 1 LLN 382 : (1999) 1 LJ 19 : (1998) 6 Kar LJ 181 [LNIND 1998 KANT
158], (Kant) (DB).
12 Mgmt of Castrol (l) Ltd v P Ganesan (2001) 2 LLN 1107 (Mad), per Padmanabhan J.
13 Hindustan Aeronautics Ltd v Workmen (1975) 2 LLN 235 (SC).
14 Hindustan Aeronautics Ltd v NW Union (2001) 4 LLN 269 (Bom), per Rebello J.
15 Saudi Arabian Airlines v Shehnaz Mudbhatkal (1999) 1 LLN 708, 715, 720 (Bom) : (1999) 2 LJ 109, per Srikrishna J.
16 Meenakshi Patel v EEPC (2001) 4 LLN 1276 (Bom), per Mhatre J.
17 Indian Council of Agricultural Research v Duryodhan H Ingole (2010) 4 LLJ 410 (Bom), per Bobde J.
18 Carlsbad Mineral Water Manufacturing Co Ltd v PK Sarkar (1952) 1 LLJ 488 [LNIND 1951 CAL 116] (Cal), per Harries CJ.
19 JR Jugele, Railway Contractor v Sitabaiatamaram 1990 Lab IC 1018, 1019 (Bom) (DB), per Ghodeswar J.
20 Bhowra Coke Plant v Bhowra Coke Plant Workers’ Union (1956) 1 LLJ 195 (LAT).
21 Firebricks and Potteries Ltd v FPL Workers’ Union (1956) 1 LLJ 571 (Mys), per Venkataramayya CJ.
22 Bijay Cotton Mills Ltd v Workmen (1960) 1 LLJ 262 [LNIND 1960 SC 40] (SC) : AIR 1960 SC 692 [LNIND 1960 SC 40], per
Gajendragadkar J.
23 General Employees Assn v Union of India (1992) 1 LLJ 242, 244 (Bom) : (1991) 61 FLR 382, per Kantharia J.
24 Serajuddin & Co v Workmen (1962) 1 LLJ 450 [LNIND 1962 SC 122], 453 (SC), per Gajendragadkar J.
25 Ambika Prasad v State of Orissa (1974) 1 LLJ 65, 67 (Ori) (DB), per RN Misra J.
26 Assam Rly Trading Co v CGIT 1970 Lab IC 488, 491, per Banerjee J.
27 Serajuddin & Co v Workmen (1962) 1 LLJ 450 [LNIND 1962 SC 122], 453 (SC), per Gajendragadkar J.
28 Khas Jeenagora Coal Co Pvt Ltd v Salim M Merchant (1965) 2 LLJ 302 (Pat) (DB).
29 Mgmt of Jamadoba Colliery v PO, CGIT-cum-LC 1989 Lab IC (NOC) 113 (Pat), per SB Sinha J.
30 Mgmt of Indian Oil Corpn v State of Assam 1990 Lab IC (NOC) 137 (Gau) (DB).
31 Bisra Limestone Co Ltd v Central Labour Inspector (1969) 2 LLJ 112 [LNIND 1968 ORI 117], 115 (Ori) (DB), per Barman CJ.
32 State of Maharashtra v Mohanlal Devichand Shah (1965) 2 LLJ 157 [LNIND 1965 SC 98], 160-61 (SC), per Sikri J.
33 Ambika Prasad v State of Orissa 1974 Lab IC 805,807 (Ori) (DB), per Misra J.
34 Cement Works Karmachari Sangh v IT 1971 Lab IC 143, 14 & 47 (Raj), per Tyagi J.

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35 Neyveli Lignite Corpn Ltd v Subbarayan 1984 Lab IC 1880 (Mad), per Pandian J.
36 Cantonment Board, Ambala v State of Punjab (1961) 1 LLJ 734 (Punj) (DB), per Falshaw J.
37 PK Pillai v Burma Shell OS & D Co of India Ltd AIR 1956 Kutch 9, per Dave CJ.
38 Tulsidas Khimji v Jeejeebhoy (1961) 1 LLJ 42 [LNIND 1960 BOM 39] (Bom) (DB), per Desai J.
39 Goa DL Union v Govt of UT of Goa, Daman & Diu (1968) 2 LLJ 536 (G, D & D), per Jetley JC.
40 Goa Sampling Employees Assn v General Superintendence Co of India (Pvt) Ltd 1985 Lab IC 666 [LNIND 1984 SC 338] (SC) :
AIR 1985 SC 357 [LNIND 1984 SC 338]: (1985) 1 SCC 266, per Desai J.
41 Hindustan Aeronautics Ltd v State of UP, (2012) 2 LLJ 11 (All), per Shishir Kumar J.
42 Serajuddin & Co Ltd v Workmen (1962) 1 LLJ 450 [LNIND 1962 SC 122], 452 (SC), per Gajendragdkar J.
43 Mgmt of Patiala Iron Works v Union of India 1975 LIC 1265 (Del) (FB), per Avadh Behari J.
44 India Tourism Dev Corpn v Delhi Administration 1982 Lab IC 1309, 1319 (Del) (FB), per Chadha J.
45 Paritosh Kumar Pal v State of Bihar 1984 Lab IC 1254, 1260 (Pat) (FB), per Sandhawalia CJ.
46 Paritosh Kumar Pal v State of Bihar 1984 Lab IC 1254, 1260 (Pat) (FB), per Sandhawalia CJ.
47 Lalbhai Tricumlal Mills Ltd v DM Vin (1956) 1 LLJ 557 [LNIND 1955 BOM 36], 558 (Bom) (DB), per Chagla CJ.
48 Lipton Ltd v Employees (1959) 1 LLJ 431 [LNIND 1959 SC 14], 436 (SC), per SK Das J.
49 Indian Cable Co Ltd v Workmen (1962) 1 LLJ 409 [LNIND 1962 SC 100], 413 (SC), per Venkatarama Ayyar J.
50 Workmen of Sri Ranga Vilas Motors Pvt Ltd v Shri Rangavilas Motors (P) Ltd. (1967) 2 LLJ 12 [LNIND 1967 SC 26], 17 (SC) :
AIR 1967 SC 1040 [LNIND 1967 SC 26], per Sikri J.
51 Paritosh Kumar Pal v State of Bihar 1984 Lab IC 1254, 1260 (Pat) (FB), per Sandhawalia CJ.
52 Spencer & Co Ltd v Delhi Administration 1975 FLR 76, per Dalip Kapur J.
53 Emerald Valley Estates Ltd v Secy, Estates Staffs Union of South India 1979 Lab IC 86 (Ker), per Bhaskaran J.
54 Vinod Rao v PO, LC, 1980 Lab IC 1191, 1193-94 (Guj) (DB), per Sheth J.
55 Associated Traders & Engineers Pvt Ltd v Addl IT (1976) 49 FJR 187 (Del), per HL Anand J.
56 Juggat Pharma Pvt Ltd v Deputy Commissioner of Labour (1982) 2 LLJ 71, 72 (Kant), per Bopanna J.
57 J&J Dechane Distributors v State of Kerala (1974) 2 LLJ 9, 13-14 (Ker) (DB), 1973 KLJ 784, per Gopalan Nambiyar J.
58 Assn of Medical Representatives v IT (1966) 1 LLJ 614 [LNIND 1966 MP 107], 618-19 : AIR 1967 MP 114 [LNIND 1966 MP
107]: 1966 MPLJ 769 (MP) (DB).
59 Genl Superintendence Co of India Ltd v Goa Dock Labour Union, (1984) 1 LLJ 56 [LNIND 1982 BOM 219], 57 : (1984) 86 Bom
R 30(Bom) (DB), per Jahagirdar J.
60 Godrej Soaps Ltd v State of Karnataka (1998) 3 LLN 709 (Kant), per Goud J.
61 BG Sampat v State of West Bengal, (1999) 3 LLN 160 (Cal), per Kundu J.
62 New Delhi General Mazdoor Union v Govt of Delhi (2000) II LLJ 1191(Del), per Sikri J.
63 DLF Universal Ltd v Government of NCT (2002) 2 LLN 596 (Del), per Kaul J.
64 S Ramesh v Tamil Nadu PP Ltd (2001) 1 LLN 557 [LNIND 2000 MAD 247] (Mad) (DB), per Jayasimha Babu J.
65 Mgmt of Best & Crompton Engg Ltd v PO, LC (2002) 2 LLN 306 (Mad), per Murugesan J.
66 Mohan R Matre v Udaipur Distillary Co Ltd (2003) 4 LLJ 1004.
67 Mining and AMC Employees Union. v Union of India (2003) 4 LLJ 872 (Cal), per Seth J.
68 IOL Limited, Kanpur v State of UP (2004) 4 LLJ 369 (All), per Ambwani J.
69 Kerala State EDC Ltd v Jayashree NK (2003) 4 LLJ 1067 (Bom), per Khandeparkar J.
70 Steel Authority of India Ltd v National Union of Waterfront Workers AIR 2001 SC 3527 [LNIND 2001 SC 1870]: (2001) 7 SCC 1
[LNIND 2001 SC 1870] : (2001) 5 SCALE 626 [LNIND 2001 SC 1870], per Qadri J.
71 Tata Memorial Hospital Workers’ Union v Tata Memorial Centre AIR 2010 SC 2943 [LNIND 2010 SC 725]: (2010) 8 SCC 480
[LNIND 2010 SC 725] : (2010) 4 LLJ 830 [LNIND 2010 SC 725], per Gokhale J.
72 Government of India (2002), Report of NCL-II, Chap 13, pp 37-38, para 6.24.
73 Chapter VA, in particular ss 25F, 25FF and 25FFF, Industrial Dispute Act 1947.

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74 Indian Hume Pipe Co Ltd v K Palaniswami (1968) 1 LLJ 90 (Mad) (DB) : AIR 1968 Mad 52 [LNIND 1966 MAD 206], per
Anantanarayanan CJ.
75 Maharana Mill Kamdar Union v NL Vyas (1959) 2 LLJ 172, 175 (Bom) (DB), per Chainani CJ.
76 See, notes and comments under s 2(92), Mulla’s Code of Civil Procedure, 1989, 14th ed, Vol 1, pp 13-25.
77 Andhra Handloom Weavers Co-operative Society v State of AP (1963) 2 LLJ 488, 490 (AP) : AIR 1964 AP 363 [LNIND 1963 AP
118], per Gopalakrishnan Nair J.
78 Cox & Kings (Agents) Ltd v Workmen (1977) 1 LLJ 471 [LNIND 1977 SC 142], 476 (SC) : AIR 1977 SC 1666 [LNIND 1977 SC
142]: (1977) 2 SCC 705 [LNIND 1977 SC 142], per Sarkaria J.
79 Sital v CGIT (1969) 2 LLJ 275 (MP) (DB), per Pandey J.
80 Coimbatore DMW Union v Dhanalakshmi Mills Ltd (1960) 2 LLJ 556 (Mad), per Ramachandra Ayyar J.
81 Birla Cotton Spg & Weaving Mills Ltd v Workmen (1962) 1 LLJ 648 [LNIND 1962 SC 206] (SC) : AIR 1966 SC 1158 [LNIND
1962 SC 206]: (1963) 2 SCR 716 [LNIND 1965 SC 347], per Wanchoo J.
82 Asbestos Cement Ltd v PD Sawarkar (1970) 2 LLJ 129 [LNIND 1970 SC 65] (SC), per Shelat J.
83 Pallavan Transport Corpn Ltd v M Muthuchezian 1986 Lab IC 1541 -42 (Mad), per Sathiadev J.
84 Krishnarajendra Mills Workers’ Union v ALC (1968) 1 LLJ 504, 509 (Mys) (DB), per Tukol J.
85 Divisional Forest Officer v Dy Commr of Labour (1999) 2 LLJ 282 (AP), per Sudershan Reddy J.
86 Notes under the caption ‘Preliminary decree’, Mulla’s Code of Civil Procedure, 14th ed, pp 13-25.
87 Thakur Yugal Kishore Sinha v State of Bihar (1950) 1 LLJ 539 (Pat) (DB), per Meredith CJ.
88 Hotel Imperial v Hotel Workers Union (1959) 2 LLJ 544 [LNIND 1959 SC 136], 552 (SC), per Wanchoo J.
89 Mgmt of Bihar State Electricity Board v Workmen (1971) 1 LLJ 389, 393 (Pat) (DB).
90 Punjab National Bank Ltd v AN Sen Alr 1952 Punj 143(DB), per Harnam Singh J.
91 Mehar Singh v Delhi Administration (1973) ILR 1 (Del) 732, 737-38, per RN Agarwal J.
92 Jeewan Lal (1929) Ltd v State of WB 1975 Lab IC 1161 (Cal), per Sabyasachi Mukharjee J.
93 Darshak Ltd v IT (1986) 1 LLJ 253, 257 (Kant) : ILR 1987 Karnataka 50, per Rama Jois J.
1 Manager, Jaipur Syntex Ltd v PO Industrial Tribunal (1990) 1 LLJ 323, 325 (Raj) : (1989) 59 FLR 99, per MB Sharma J.
2 Hotel Imperial v Hotel Workers Union (1959) 2 LLJ 544 [LNIND 1959 SC 136], 552 (SC), per Wanchoo J.
3 Delhi Cloth & General Mills Ltd v R Dayal, Addl IT (1960) 2 LLJ 712 [LNIND 1960 SC 283],715 (SC), per Wanchoo J.
4 Darshak Ltd v Industrial Tribunal (1986) 1 LLJ 253, 259 (Kant) : ILR 1987 Karnataka 50, per Rama Jois J.
5 Rajasthan SEB v IT (2002) 1 LLN 1251 (Raj), per Keshore J.
6 Mgmt of Bihar State Electricity Board, Patna v Workmen (1971) 1 LLJ 389, 393 (DB).
7 National Textile Corpn v State of Rajasthan (1989) 1 LLN 778 (Raj) (DB), per PC Jain J.
8 EID Parry (India) Ltd v IT, Madras (1993) 2 LLJ 1 [LNIND 1992 MAD 89] (Mad) per Bakthavatsalam J.
9 Mgmt of Radio Foundation Engg Ltd v State of Bihar 1970 Lab IC 1119, 1121-1122 (Pat) (DB), per Untwalia J.
10 Jaswant Sugar Mills Co Ltd v Labour Court (1975) 2 LLJ 16 (All), per Gulati J.
11 Mgmt of Bihar State Electricity Board, Patna v Workmen (1971) 1 LLJ 389, 393 (Pat) (DB).
12 Debarata Sen v State of West Bengal, 1998 (4) LLN 941 (Cal).
13 Certain Tanneries in Dindigul v Workmen (1955) 2 LLJ 171 (LAT).
14 Mgmt of Ambala Cantantonment Electric Supply Corpn Ltd v Workmen 1971 Lab IC 854, 860 (P&H), per Tuli J.
15 BR Herman & Mohatta (I) Pvt Ltd v Seventh IT 1977 Lab IC (NOC) 13 (Cal) (DB).
16 Workmen of Swadeshi Cotton Mills Ltd v Mgmt 42 FLR 255, 262.
17 Cox & Kings (Agents) Ltd v Workmen (1977) 1 LLJ 471 [LNIND 1977 SC 142] (SC) : AIR 1977 SC 1966 : (1977) 2 SCC 705, per
Sarkaria J.
18 Maxwell on Interpretation of Statutes, 1969, 12th ed, pp 43-44.
19 Hindustan Motors Ltd v Janardan Singh (2001) 4 LLN 1066 (Cal) (DB), per Hrishikesh Banerji J.

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20 Gurbhej Singh v State of Punjab (2004) 1 LLJ 16 : (2003) 135 PLR 188 (P&H) (DB).
21 State of Bihar v DN Ganguli (1958) 2 LLJ 634 [LNIND 1958 SC 92], 641 (SC) : AIR 1958 SC 1018 [LNIND 1958 SC 92]: [1959]
SCR 1191, per Gajendragadkar J.
22 Maharana Mill Kamdar Union v NL Vyas (1959) 2 LLJ 172, 176 (Bom) (DB), per Chainani CJ.
23 Coimbatore DMW Union v Dhanalaxmi Mills Ltd (1960) 2 LLJ 556 (Mad), per Ramachandra Ayyar J.
24 Sital v Central Government IT (1969) 2 LLJ 275, 280 (MP) (DB), per Pandey J.
25 Andhra Handloom weavers’ Co-operative Society v State of AP (1963) 2 LLJ 488 (AP), per Gopalakrishnan Nair J.
26 Workmen of Indian Cable Co Ltd v ICC Ltd 1973 Lab IC 208, 210 (Pat) (DB), per Anwar Ahmad J.
27 Hindustan Housing Factory Employess Union v Mgmt (1971) 2 LLJ 222 (Del) (DB), per Hardy J.
28 Workmen of Government Silk Weaving Factory, Mysore v PO Industrial Tribunal (1973) 2 LLJ 144 [LNIND 1973 SC 143], 146
(SC) : AIR 1973 SC 423 : (1973) 2 SCC 134, per Vaidialingam J.
29 Gandhidham Nagarpalika Adipur v RC Israni (1993) 1 LLJ 432, 439 (Guj) (DB) : (1992) GLH 423, per Divecha J.
30 Bargarh Coop Sugar Mills Ltd v PO , IT 2002 (4) LLN 934 (Ori) (DB).
31 Indian Bank v Central Government Industrial Tribunal (2003) 1 LLJ 331 : (2002) 95 FLR 83 (Cal), per Seth J.
32 Guman Singh v PO, LC, (2003) 4 LLJ 736 (P&H), per Mittal J.
33 Krishnankutty Nair v IT (1957) 2 LLJ 45, 48 (Ker), per Varadaraja Iyengar J.
34 Workmen of TR Ltd v Travancore Rayons Ltd (1967) 1 LLJ 518, 520 (Ker), per Gopalan Nambiyar J.
35 Maharana Mill Kamdar Union v NL Vyas (1959) 2 LLJ 172, 176 : (1961-62) 2 FJR 155 (Bom) (DB).
36 Sital v CCIT (1969) 2 LLJ 275, 279-80 (MP) (DB), per Pandey J.
37 Pandavapura SS Karkhane Ltd v State of Mysore 1969 Lab IC 729 (Mys) (DB), per Somnath Iyer J.
38 Glaxo Laboratories (India) Ltd v PO, LC 1977 Lab IC 1523,1533-34 (AP) (DB), per Sheth J.
39 Pandavapura SS Karkhane Ltd v State of Mysore 1969 Lab IC 729 (Mys) (DB), per Somnath Iyer J.
40 Andhra HWC Society v State of AP (1963) 2 LLJ 488 (AP), per Gopalakrishnan Nair J.
41 Workmen of Travancore Rayons Ltd v Mgmt (1967) 1 LLJ 518, 520 (Ker), per Nambiyar J.
42 KV Kumaran v LC, 1982 Lab IC 1241, 1243 (Ker), per Sukumaran J.
43 Nagar Palika Haldwani v Municipal Employees Union 1983 Lab IC (NOC) 13 (All), per SC Mathur J.
44 Ramjas College, v LC IV, Delhi 1987 Lab IC 1556 (Del), per Kirpal J.
45 RB Girap v Borivali GCH Society Ltd (1990) 2 LLJ 558, 559 (Bom), per Pendse J.
46 Ranigunj Chemicals Works v Fourth IT, 1998 (1) LLN 880 (884) (Cal), per Mitra, J.
47 Mukundbhai G Bhatt v Exeell Industries, (1998) 2 LLN 675 (Guj), per Keshote, J.
48 P Viyapuri v PO (1998) 3 LLN 349 (Mad), per Sathasivam J.
49 Anil Sood v PO Labour Court (2001) 2 LLN 611 (612) (SC) : (2001) 10 SCC 534 : (2001) 1 LLJ 1113.
50 LML Ltd v PO, Labour Court 2002 (2) LLN 585 [LNIND 2002 DEL 52] (Del) (DB).
51 Surajgarh KVS Samiti v Labour Court 2002 (2) LLN 698 (Raj), per Madan, J.
52 Ajit Singh v PO, LC200! (4) LLN 1165 (P&H), per Sudhalkar, J.
53 See, notes and comments under s 10(4), Caption: Jurisdiction to give relief.
54 India Paper Pulp Co Ltd v India Paper Pulp Workers, Union AIR 1949 FC 148 .
55 Bilash Chandra Mitra v Balmer Lawrie & Co Ltd (1953) 1 LLJ 337 [LNIND 1952 CAL 141] (Cal), per HK Bose J.
56 KM Mukherjee v Secretary, State Bank of India 1968 Lab IC 127 (Cal), per Basu J.
57 All India Bank Employees’ Assn v National IT (1961) 2 LLJ 385 [LNIND 1961 SC 283], 401-02 SC, per Rajagopala Ayyangar J.
58 Bharat Nidhi Ltd v Ex-employees (1953) LAC 53.
59 Jwala Bank Ltd v Shitla Prashad Singh AIR 1950 All 309 [LNIND 1949 ALL 212], 311 (DB), per Malik CJ.
60 Glass Workers Mazdoor Sangh v PO, IT (2005) 4 LLJ 395 (All), per Tiwari J.

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61 Nagarcoil Electric Supply Corpn v IT (1953) 1 LLJ 208 (TC), per Subramanya Iyer J.
62 Western India Automobile Assn v IT (1949) 1 LLJ 245, 246 (FC), per Mahajan J.
63 Maharashtra SRTC v Madhukar Narayanrao 1970 Lab IC 225, 235 (Bom) (DB), per Abhyankar J.
64 Heavy Engineering Mazdoor Union v State of Bihar (1969) 2 LLJ 549 [LNIND 1969 SC 121], 553 (SC), per Shelat J.
65 Somu Kumar Chatterjee v Dist Signal TC Engineer (1970) 2 LLJ 179, 185 (Pat) (DB), per Jha J.
66 Madras GCE Union v Gymkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292] (SC), per Hidayatullah J.
67 Workmen of Swatantra Bharat Mills Canteen v Mgmt 1984 Lab IC 1235 (Del), per GC Jain J.
68 Sarju Prasad v State of Bihar 1984 Lab IC 1264, 1266 (Pat) (DB).
69 Madras GCE Union v Gymkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292] (SC), per Hidayatulah J.
70 Somu Kumar Chatterjee v District Signal TC Engineer (1970) 2 LLJ 179 (Pat) (DB), per Jha J.
71 Western India Automobile Assn v IT (1949) 1 LLJ 245 -46 (FC), per Mahajan J.
72 Dahingeapara Tea Estate v Workmen (1956) 1 LLJ 187, 189 (LAT).
73 Western India Automobile Assn v IT (1949) 1 LLJ 245 -46 (FC), per Mahajan J.
74 Budge Budge Municipality v PR Mukherjee (1950-51) 2 FJR 80, 84 (Cal) (DB), per Harries CJ.
75 Western India Automobile Assn v IT (1949) 1 LLJ 245 -46 (FC), per Mahajan J.
76 Birla Bros Ltd v Modak (1948) ILR 2 Cal 209.
77 Narayana Pillai v IT (1959) 2 LLJ 182 -83 (Ker), per Vardaraja Ayyangar J.
78 Visakhapatnam Dock Labour Board v Stevedores’Assn (1970) 1 LLJ 46 [LNIND 1969 SC 324], 56 (SC) : AIR 1970 SC 1926
[LNIND 1969 SC 326]: (1969) 2 SCC 801 [LNIND 1969 SC 324], per Vaidialingarn J.
79 Natwarlal Vithaldas Patel v Municipality of Vadnagar (1965) 1 LLJ 608, 610 (Guj) (DB), per Mehta J.
80 Mgmtof Madras Gymkhana Club v PO, Addl LC (1986) 2 LLJ 415 -16 (Mad), per Sathiadev J.
81 Dahingeapara Tea Estate v Workmen (1956) 1 LLJ 187, 189 (LAT).
82 Ramjilal Nathulal v Himabhai Mills Co Ltd (1956) 2 LLJ 244 (LAT).
83 Odeon Cinema v Workers of Sagar Talkies (1954) 2 LLJ 314 [LNIND 1954 MAD 134] (Mad), per Rajagopala Ayyangar J.
84 Kays Construction Co Pvt Ltd v Workmen (1958) 2 LLJ 660 [LNIND 1958 SC 124] (SC), per Gajendragadkar J.
85 Bombay Garage Ltd v IT (1953) 1 LLJ 14 (Bom), per Tendolkar J.
86 Bharat Bank Ltd v Employees (1952) 2 LLJ 420 (LAT).
87 VV Nakhte v SP Shinde [1953] LAC 67.
88 Bhanuvilas Theatre v Workmen (1956) 2 LLJ 176, 178.
89 Antony D’Souza v Sri Motichand Silk Mills (1954) 1 LLJ 793 (LAT).
90 Bhanuvilas Theatre v Workmen (1956) 2 LLJ 176, 178 (LAT).
91 Palace Theatre, Salem v LAT (1954) 1 LLJ 635 (Mad), per Rajagopala Ayyanagar J.
92 Alex A Apcar Or) & Co v MN Gan AIR 1960 Cal 14 [LNIND 1959 CAL 89], per PB Mukharji J.
93 Kays Comtruction Co (Pvt) Ltd v Workmen (1958) 2 LLJ 660 [LNIND 1958 SC 124] (SC), per Gajendragadkhar J.
94 Anakapalle CA&IS v Workmen (1962) 2 LLJ 621 [LNIND 1962 SC 345] (SC), per Gajendragadkar J.
95 Industrial Paper (A) LE Union v Mgmt, Assam Industrial Dev. Corpn. Ltd, AIR 2007 SC 985 [LNIND 2007 SC 33]: AIR 2007 SC
985 [LNIND 2007 SC 33]: (2007) 3 SCC 73 [LNIND 2007 SC 33], per Pasayat J.
96 Maharashtra Sugar Mills Ltd v State of Bombay (1951) 2 LLJ 299 [LNIND 1951 SC 38] (SC), per Mahajan J.
97 Bombay Dock Labour Board v Stevedores Workers (1954) 1 LLJ 200 (LAT).
98 Chhota Nagpur Coalfields Workers Union v Kargali Colliery (1952) 2 LLJ 32.

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER I Preliminary

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER I Preliminary

20[S.
2A. Dismissal, etc., of an individual workman to be deemed to be an industrial
dispute—

21[(1)] Where any employer discharges, dismisses, retrenches or otherwise terminates the services of an individual
workman, any dispute or difference between that workman and his employer connected with, or arising out of,
such discharge, dismissal, retrenchment or termination shall be deemed to be an industrial dispute
notwithstanding that no other workman nor any union of workmen is a party to the dispute.]
22[(2) Notwithstanding anything contained in section 10, any such workman as is specified in sub-section (1) may,
make an application direct to the Labour Court or Tribunal for adjudication of the dispute referred to therein after
the expiry of forty-five days from the date he has made the application to the Conciliation Officer of the
appropriate Government for conciliation of the dispute, and in receipt of such application the Labour Court or
Tribunal shall have powers and jurisdiction to adjudicate upon the dispute, as if it were a dispute referred to it by
the appropriate Government in accordance with the provisions of this Act and all the provisions of this Act shall
apply in relation to such adjudication as they apply in relation to an industrial dispute referred to it by the
appropriate Government.
(3) The application referred to in sub-section (2) shall be made to the Labour Court or Tribunal before the expiry of
three years from the date of discharge, dismissal, retrenchment or otherwise termination of service as specified in
sub-section (1).]

Analysis

Extension of the Definition of Industrial Dispute

This section has been engrafted in the Act by the Amendment Act of 1965 and it has to be read as an extension of the
definition of ‘industrial dispute’ in s 2(k). A long line of decisions had established that an individual dispute could not per
se be an industrial dispute, but could become one if it was taken up by a trade union or a substantial number of workmen of
the establishment.23 This position of law created hardship for individual workmen who were discharged, dismissed,
retrenched or whose services were otherwise terminated when they could not find support by a union or any appreciable
number of workmen to espouse their cause. This provision does away with the requirement of espousal of an individual
dispute for converting it into an industrial dispute in cases where the dispute arises out of: (i) discharge, (ii) dismissal, (iii)
retrenchment, or (iv) otherwise termination of services of an individual workman. By introducing the legal fiction that the
dispute of an individual workman connected with or arising out of his discharge, dismissal, retrenchment or otherwise
termination of his services by his employer will constitute an industrial dispute not with standing that no other workman
nor any union of workmen is a party to the dispute, this provision enlarges the definition of industrial dispute. In enacting
this provision, the intendment of the legislature is that a workman whose service has been terminated unlawfully by the
employer, should be given relief without it being necessary for the relationship berween the employer and the whole body
of employees being involved in that dispute and the dispute becoming generalised one between labour on the one hand and
the employer on the other.24 Any other type of dispute regarding an individual workman is not contemplated by s 2A25 and
will be governed by the principles of law laid down by the Supreme Court in connection with the conversion of an
individual dispute into ‘industrial dispute’ by espousal. In BK Sharma, a single judge of the Allahabad High Court held
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

that where the service of an employee automatically comes to an end on the expiry of a fixed period for which he was
employed, it would not amount to discharge, dismissal, retrenchment or termination by the employer.26

The Amending Act 46 of 1982,27 has inserted sub-cl (bb) in the definition of retrenchment under s 2(oo) which excludes
the ‘non-renewal of contract of employment between the employer and the workmen concerned on its expiry’ and the
contract of employment being ‘terminated under a stipulation in that behalf contained therein, from the purview of the
definition of retrenchment’. The Orissa High Court has held that a dispute relating to superannuation of a workman
according to the rules is not one relating to ‘termination’ or ‘retrenchment’ of the service of a workman.28 The retirement
of a workman has also been excluded from the definition of retrenchment by sub-cl (b) of s 2(oo). In a case where the
workman himself terminates the contract of employment either by resigning or abandoning the job, the termination of
service would not fall within the definition of retrenchment which postulates the termination of contract of employment
‘by the employer’. As a measure of abundant caution, ‘voluntary retirement of the workman’ from the service has been
specifically excluded by sub-cl (a) from the ambit of the definition of’retrenchment’. Though, the termination of service of
a workman in cases excepted from the definition of ‘retrenchment’ in s 2(oo) may not be ‘retrenchment’, the question
arises whether it will not be covered by the expression ‘where the employer...otherwise terminates the services of an
individual workman’, in s 2A. The test is whether the contract of employment had been terminated by the employer or the
workman himself. If the service is terminated by the employer in any manner, that case will clearly be covered by this
section. In cases where the service has not been terminated by the employer, the case will not fall within the purview of
this section. However, if the employer secures resignation of a workman by force or coercion against his will, in substance,
it would amount to the termination of the services of the workman by the employer. Therefore, if a workman complains
that he has not tendered the resignation voluntarily, but his resignation was secured under threat or coercion and by that
process, termination of his service brought about, such a dispute between the individual workman and the employer would
be squarely covered by the words ‘where any employer...otherwise terminates the services of an individual workman’ used
in the definition. The question, whether in a given case the resignation was tendered voluntarily or secured under duress
etc, is a question of fact.29 But such a fact is a jurisdictional fact which should be decided first before the tribunal proceeds
adjudicate the merits. Therefore, it must be decided as a preliminary issue whether the workman, in fact, resigned his job.
If the workman succeeds to prove that the resignation was procured from him under pressure, coercion or threats, etc, it
will no longer be a case of voluntary termination of his service by the workman himself. It will be a case of termination of
the service of the workman by the employer, which will attract the provisions of s 2A. The same principles will apply to
abandonment of job. If, in fact, the workman has not abandoned the job but the employer purports to treat the termination
of the service on account of such abandonment, the provisions of this section will be attracted. The Patna High Court in
North Bihar Sugar Mills, took the view that removing a workman from permanent service and allowing him to continue as
a seasonal worker will tantamount to his removal from his permanent service.30

The cases where the contract of service lapses on the expiry of the term of employment or in terms of stipulation contained
in the contract of employment, presents some difficulty because in such a case the service is neither terminated by the
employer nor the workman himself. It is terminated by the mutual contract of the parties. Now by virtue of sub-cl (bb)
inserted in the definition of retrenchment by the Amending Act 46 of 1982, termination of service has been taken out of the
purview of ‘retrenchment’. It cannot also be said that such termination is by the employer. Such termination will not fall
within the purview of s 2A. This section entitles an individual workman himself, to raise an industrial dispute regarding
discharge, dismissal, retrenchment or termination of his services and it will be competent for the adjudicatory authorities
under the Act to deal with such dispute as an ‘industrial dispute’ even though there is no espousal by his fellow workmen
or any union comprised of them.31Though this provision brings an individual dispute within the scope of the Act, it does
not make any difference with respect to the raising of the dispute. For raising an industrial dispute with respect to the
termination of his service, etc, the individual workman must raise the dispute with the employer by making a demand,32
but the Madhya Pradesh High Court took the view that an individual dispute relating to discharge, dismissal, retrenchment
or termination of service of the workman arises immediately after the workman is discharged, dismissed, retrenched or his
service is otherwise terminated without his consent or in the face of opposition. Such an individual dispute becomes an
industrial dispute and it is not necessary, to make a demand on the management for making the dispute, an industrial
dispute.33 This view is not consistent with the decision of the Supreme Court in Sindhu Resettlement Corpn.34

In Ram Prasad Vishwakarama, the Supreme Court held that where an individual dispute becomes an ‘industrial dispute’
being sponsored by a trade union or a considerable number of co-workers of the workman, the individual workman is at no
stage a party to the industrial dispute independently of the union or the workmen. After the enactment of s 2A, it is not
necessary that a dispute relating to the discharge, dismissal, retrenchment or otherwise termination of service of a
workman must be sponsored by a trade union or a substantial number of workmen.35 In other words, even if it is not
sponsored by a trade union or a substantial number of workmen, such a dispute will be deemed to be an industrial dispute.
From the use of the words ‘notwithstanding that no other workman nor any union of workmen is a party to the dispute’, it
appears that the trade union or co-workmen are not precluded from sponsoring an individual dispute for the purpose of
converting it into an industrial dispute. Thus, such a dispute can either ipso facto be deemed to be an industrial dispute on a

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demand made by the workman himself or by espousal of the dispute by a trade union or a body of workmen. In the former
case, the dispute becomes an industrial dispute as soon as the demand is made by the workman that the termination of his
service should be recalled and he should be reinstated while in the latter case, it becomes an industrial dispute when the
dispute is sponsored by a trade union or a substantial number of workmen and such a demand is made. There is a pertinent
distinction between these two types of disputes. In the former case, the dispute is between the workman concerned and the
employer while in the latter, the dispute is between the workmen as a body and their employer. In other words, the first is
an individual dispute deemed to be an industrial dispute by a fiat of s 2A, while the latter dispute is a collective dispute.

The Madhya Pradesh High Court in Mgmt of Katkona Colliery, held that a dispute relating to the discharge, dismissal,
retrenchment or otherwise termination of the service of a workman not sponsored by a trade union or a body of workmen
will be industrial dispute falling within the purview of s 2A without making a demand on the employer for reinstatement
because such a dispute becomes an industrial dispute immediately after the workman is discharged, dismissed, retrenched
or his service is terminated without his consent on the face of his opposition. It is, therefore, not necessary in such cases to
make a demand on the management for making the dispute an industrial dispute.36 Likewise, in Ramakrishna Mills, the
dispute relating to the dismissal of three workmen was not raised by the workmen concerned themselves with the employer
but was, in fact, raised and espoused by the union of the workmen. The Madras High Court held that the demand was only
that of the concerned workmen though it got projected through their union and that was how it was raised. Hence, the
reference could be sustained as relating only to an individual workman.37 In Best & Crompton, expressing a similar view,
another Division Bench of Madras High Court upheld the common reference made by the government of 75 dismissals.
The Bench further pointed out that reference to a wrong provision is no bar to uphold the validity of the reference in
applying the correct provision of law. No litigant should be denied his legitimate rights by hyper technicalities or by the
wrong quotation of the provisions of law.38

A single judge of the Delhi High Court in Dunlop, held that even if a dispute of an individual workman is referred to
adjudication as a collective dispute having been espoused by a union or workmen, a workman can conduct the dispute
before the tribunal to the exclusion of the union.39 The learned single judge also justified the holding on the facts of the
case. On the other hand, in Enfield India, the order of reference expressly stated that ‘an industrial dispute had arisen
between the workman, Thiru Mohan and the management of Enfield India Ltd. But in view of the fact that the union had
been representing the workman before the management and the conciliation authorities, a single judge of the Madras High
Court took the view that the dispute, in fact, was not between the workman and the management but it was between the
workmen of the company as represented by the union and the management of the company. There was no finding that the
dispute, in fact, had been sponsored by a substantial number of workmen or the union. Unless there was a valid espousal,
the dispute was not of a collective character. Furthermore, an adjudicator has not the power to change or to add to the
parties set out in the order of reference.40 These decisions of the High Courts are neither warranted by the statute nor by
precedent being in conflict with Ram Prasad Vishwakarma.

A single judge of the Allahabad High Court held that the definition of the industrial dispute in s 2(2) of the UP Industrial
Disputes Act 1947, was repugnant to s 2A of the Central Act. Therefore, s 2A of the Central Act will prevail over the
definition of ‘industrial dispute’ as contained in the State Act.41But a Division Bench of the same High Court took the view
that the effect of amending the Central Act, introducing s 2A in it, is to amend the definition of expression ‘industrial
dispute’ in that Act and it does not follow that the definition of the expression ‘industrial dispute’ in the UP Act stands
automatically amended and the extended definition in the Central Act should be confined to that statute only.42 Another
single judge of that court in Hari Fertilizers, held that a dispute relating to the termination of the service of a workman
referred to adjudication under s 2A cannot be settled by the union by entering into settlement with the management
pending such adjudication without the consent of the concerned workman.43

‘Any Dispute...Connected with or Arising out of Such Dispute Etc’

From the language of the section, it is clear that only disputes relating to ‘discharge’, ‘dismissal’ ‘retrenchment’, or
otherwise ‘termination of services’ of an individual workman will fall within its purview while other disputes are not
comprehended in it. Thus, where a workmen is sought to be retired at a particular date on the ground of his attaining age of
superannuation which is disputed by the employee claiming that according to his real date of birth, he has not attained the
age of superannuation, the dispute will fall within the purview of the definition of ‘industrial dispute’ in this section.44 On
the other hand, claims for wages, dearness allowance, gratuity or bonus, will not fall within the ambit of this section.45 A
single judge of the Delhi High Court46 has taken the view that the question whether the workman concerned is also to get
wages as compensation or as a condition for terminating the contract of service, is a matter which arises directly whenever
his services are terminated. Furthermore, when the services of a workman are terminated, it would be expected that he
would be paid wages and other charges due to him for the period he worked. Accordingly, the bonus, travelling allowance,
dearness allowance due to the workman for the period he worked are also connected with the question of termination of his

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service because ‘when the contract of service is terminated, the workman is certainly entitled to get all remunerations due
to him’.

The dispute relating to the transfer of an employee from one department to another or one place to another will not fall
within purview of this section. Likewise, the disputes relating to the reduction in rank, demotion or promotion of a
workman too will not fall in its purview. In all such cases, the remedy of such individual workman will only be in a civil
court.47The machinery provided in the Industrial Disputes Act for resolution of disputes will not apply to such disputes,
unless they are sponsored by a union or other workmen. In HS Rangaramu v Karnataka SRTC , Jain CJ., speaking for a
three-judge Bench of Karnataka High Court, held that an industrial dispute arises the moment the order of dismissal or
termination is passed, and that merely because the workman has a remedy against such order by way of appeal or revision,
it could not be said that the said order of discharge or dismissal would not be effective until such remedy was exhausted.
There is nothing like the said dispute maturing into an industrial dispute only after the aggrieved workman has exhausted
the remedy of appeal and revision.48A Bench of the Supreme Court comprising Rajendra Babu and Shivraj Patil JJ, held
that the steps taken by the governments of Karnataka and Andhra Pradesh to make a provision in the Act, enabling an
individual workman to approach labour court or industrial tribunal directly without the requirement of reference by the
government in a case covered by s 2A, would not be inappropriate.49 Where the workman disputes the date of his
superannuation as fixed by employer and the dispute relates to forcible termination of service before date of
superannuation, such dispute of termination falls within the ambit of s 2A.50 Dispute raised by the contract labour under s
2A(2) - as amended by the State of Andhra Pradesh - on the expiry of the labour contract is not maintainable before
tribunal as there was no relationship of master and servant between contract labour and principal employer.51 Where the
dispute raised by a dismissed workman under s 2A was dismissed by the labour court for default on the part of the
workman, a single judge of the AP High Court held that the subsequent raising of the dispute by the workman was not
barred by res judicata, as the dismissal of the dispute in the first instance was for default and not on merits.52 In yet another
case relating to beedi workers, the learned judge held that s 31(2) of the Beedi and Cigar Workers (Conditions of
Employment) Act 1966 does not operate as a bar to a dismissed workman, falling within the ambit of that Act, from raising
a dispute under s 2A(2) of the ID Act.53

Application to Cases of Prior Discharge, etc

section 2A came into effect from 1 December 1965. Though the courts on the plain language of the statute are agreed that
this section is not retrospective, there is conflict of opinion among different High Courts on the question: as to whether an
individual dispute of a workman which arose before the day on which this provision came into force and was not
sponsored “by his fellow workmen or any union up to that date, could become an industrial dispute after the section came
into force? The conflict was set at rest by Supreme Court in Ruston and Hornsby, wherein it was held that it would be an
industrial dispute with the meaning of s 2A and could be validl reffered for adjudication by approving the view of the
Delhi and other High Courts as against that of Mysore High Court.54

Constitutional Validity

The constitutional validity of this section was challenged before a Full Bench of the Delhi High Court55on the ground that
the Parliament had no power to change the meaning and concept of the expression ‘industrial dispute’ which had acquired
a fixed meaning at the time when the Constitution was drafted and further that the amendment was repugnant to the basic
scheme of the Act. The court held that the entry 22 in the list 3 of the Seventh Schedule of the Constitution includes the
dispute of an individual workman and the amendment is not repugnant to the scheme of the Act. In view of this holding,
the court did not express any opinion with respect to the point made out on behalf of the workmen that in any case, entry
97 of the list 1 of the Seventh Schedule of the Constitution of India would cover the amendment. A similar view has been
taken by a single judge of the Punjab and Haryana High Court.56 Likewise, a single judge of the Madras High Court held
that the amendment engrafting s 2A is within the legislative competence of the Parliament under entry 22 of the list 3 of
the Seventh Schedule of the Constitution.57The Mysore High Court also held that s 2A is not inconsistent with the object of
the Act and under entry 22 the Parliament was competent to legislate upon a dispute relating to discharge, dismissal or
retrenchment of an individual workman. It was also held that the section does not offend the guarantee of Art. 14 of the
Constitution.58 The Patna High Court held that s 2A is neither ultra vires nor does it suffer from the vice of untrammeled
power of the government to make a reference nor is it discriminatory in its application.59

In the state of UP, there is a parallel Act known as the UP Industrial Disputes Act 1947. Both these Acts simultaneously
operate in relation to industrial disputes covered by both the Acts. But the UP Act has no provision like s 2A of the Central
Act. Section 12 of the UP Act preserves the power of the state government to refer any industrial dispute or matters
connected therewith under the Central Act or to deal with any report or settlement in accordance with the provisions of that
Act. For the removal of doubts, s 12A declares that nothing in the State Act shall be deemed to preclude the Central
Government from constituting a national tribunal under the Central Act for the time being in force or any such tribunal
from exercising any powers conferred upon it under that Act. In Har Narain, the state government in exercise of its powers

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under the State Act referred an industrial dispute for adjudication under the Central Act invoking the provisions of s 2A.
The High Court had to consider the question; whether s 2A of the Central Act could be invoked by the state government
when it has its own enactment simultaneously operating in relation to industrial disputes? The High Court held that the
provision is saved by the proviso to Art. 254 of the Constitution to operate in the State of UP, where the Central Act also is
in force. By virtue of s 12 of the State Act, the state is competent to make the reference under the Central Act and to such
references s 2A of the Central Act would apply.60As an obiter, the Bench also expressed the view that since s 2A had been
added by Parliament in the Central Act which relates to a subject in the Concurrent List, it would operate on the UP Act as
well. Later, a Full Bench of the High Court in Vishnu Dass,61while considering the question; whether s 2A of the Central
Act would automatically be deemed to have been inserted in the UP Act also, so as to modify the definition of ‘industrial
dispute’ contained in s 2(1) of the Act, dissented with the obiter of the Division Bench and observed that the operation of s
2A must be confined to matters governed by the Central Act and this section does not modify the definition of ‘industrial
dispute’ in the state Act.

A Full Bench of the Andhra Pradesh High Court held that s 2A of this Act is pro tanto repugnant with the provisions of the
Andhra Pradesh Shops and Establishment Act of 1966 because the dispute of an individual workman, in regard to
termination of services, squarely falls within the field covered by ss 40 and 41 of the Andhra Act, and in view of the fact
that the State Act has been assented to by the President, the provisions of that Act, relating to the termination of services of
an employee of a shop establishment will prevail upon s 2A and other provisions of this Act insofar as they are attracted by
reason of s 2A. But the court refrained from expressing any opinion on the legal position that would arise if the individual
dispute of a workman is supported either by the union to which he belongs or in the absence of a union by a substantial
number of workmen and such a matter is sought to be referred for adjudication under s 10 of this Act.62 This question was
considered by another Full Bench of the same High Court in Brindavan Hotels, in which a large number of workmen had
been discharged from their service by the employer and their case was espoused by a union. The question was whether
such a dispute was governed by the Industrial Disputes Act or by the Shops and Establishments Act? Answering the
question, the High Court observed that there was no conflict between the relevant provisions of the Industrial Disputes Act
and the relevant provisions of the Shops and Establishments Act. They do not operate in the same area. In other words,
there are no two competing statutes in the field. It was, therefore, held that the workmen’s union or a number of workmen
can espouse a dispute of an individual workman only under the Industrial Disputes Act and they cannot espouse it under
the Shops and Establishments Act. From these two full Bench decisions, on a comparative analysis of the relevant
provisions of the two enactments, the following position emerges:

(1) if an individual workman governed by both these Acts wants to raise an individual dispute, he can do so only under the
Shops and Establishments Act;
(2) if a workmen’s union wants to espouse the dispute of an individual employee, it can do so only under the Industrial
Disputes Act; and
(3) in the absence of a workmen’s union if a number of workmen want to espouse a dispute of an individual workman, they
can do so only under the Industrial Disputes Act.63

These two Full Bench decisions were reviewed by a five judge Bench of the court in APSWIC Society.64 In this case, the
controversy centered around the question of competence of the state government to refer and the jurisdiction of the labour
court to adjudicate the dispute arising out of the termination of individual employees, not backed by the union or a group
of workmen. In this situation, what actually was under examination was the correctness of the holding in Visakhapatnam
Dim Marketing Cooperative Society case, and the holding in Sri Brindavan Hotel case relating to the legal position
regarding the dispute arising out of the termination of service of workmen espoused by a union was not strictly relevant.
The larger Full Bench held that there was an error in the holding of the Full Bench in Vishakhapatnam Dist Marketing
Cooperative Society case where it held that there was a repugnancy between the State and the Central statutes as there was
overlapping between ss 40 and 41 of the State Act on the one hand and s 2A of the Central Act on the other and that
because the President’s assent to the State Act was sought and obtained, the State Act prevailed over the Central Act under
Art. 254(2) of the Constitution. The larger Bench held that the question of repugnany arises only when both the legislatures
are competent to legislate in the same field with respect to one of the matters enumerated in the concurrent list in the
Seventh Schedule to the Constitution; and, therefore, Art. 254(1) cannot apply unless both the union and the state laws
relate to a subject specified in the concurrent list, and they occupy the same field. The scope and ambit of the proceedings
available to an individual employee by virtue of s 2A of the Central Act are not identical to those available to him under ss
40 and 41 of the State Act, The object behind the provision made in ss 40 and 41 of the State Act was not to deprive the
shop employee of a right or remedy available to him, but only to provide the additional forum for seeking speedy solution
to the problem arising out of the termination of his service. The option is left with the workman who is aggrieved by the
termination of his service. He may at his choice and convenience either pursue the remedy under s 2A of the Central Act or
approach the appellate court (in case of necessity, the labour court and also in second appeal).

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In Shambhu Nath Mukherjee, the Supreme Court discountenanced the attack on s 2A, on the ground that it is ultra vires the
powers of the legislature under entry 22 in list II of the Seventh Schedule of the Constitution and that it was violative of
the guarantee under Art. 14 of the Constitution, as order of reference did not ex facie show that it was a reference of an
individual dispute under s 2A.65 In N Shivashankarachari, a single judge of the Karnataka High Court held that, where the
industrial dispute raised by the workman under s 2A alleging that his services were terminated on the basis of a fabricated
document is pending before the labour on a reference made under s 10, a writ petition seeking an inquiry into the alleged
fradulent document is not maintainable, as it is a question of fact which has to be gone into by the labour court.66 Where
the labour court recorded a finding that there were many contradictions in the statement of the workman regarding his
employment on perusal of oral and documentary evidence, that he failed to establish the relationship of employer and
employee with the management, and rejected the reference on that ground, the Bombay High Court held that the award of
labour court did not warrant interference.67 The NCL-II recommended that all matters pertaining to individual workers, be
it termination of employment or transfer or any other matter, be determined by recourse to the grievance redressal
committee, conciliation and arbitration/adjudication by the labour court. The commission further recommended that s 2A
be amended by allowing individual disputes being taken up by the affected workers themselves or by TUS and collective
disputes by the negotiating agent or an authorised representative of the negotiating college for resolution.68

Death of the Workman

In V Bhaskaran, a single judge of the Kerala High Court has taken the view that if after having raised the dispute, the
workman dies, his legal representatives can further agitate and prosecute the dispute before the industrial authorities
because, in law, a legal representative is not a different person from the deceased, but only continues the persona of the
deceased. Though, in view of the death of the workman, the adjudicator may not be able to award reinstatement on holding
that his dismissal was á illegal and invalid, he can award back wages and other benefits to which the workman would have
been entitled if his service had not been illegally terminated. Such benefits can, therefore, be claimed by the legal
representatives of the deceased workman in industrial adjudication.69 But the Madras High Court in F Veeramani,
dissented from this view and held that in the field of industrial adjudication governed by specific statutory provisions, there
is no scope for the adjudication of a claim by the heirs or legal representatives of a deceased workman against the
employer. Therefore, where the dispute referred affects an individual, the doctrine of actio personalis moritor cum persona
is applicable.70 This conflict was resolved by the legislature by inserting sub-s (8) in s 10 by the Amending Act 46 of
1982.71 No proceedings pending before any adjudicatory authority in relation to an industrial dispute shall not lapse merely
by reason of the death of any of the parties to the dispute being a workman and the adjudicator is enjoined to complete
such proceedings and submit his award to the appropriate government. In other words, even after the death of a workman,
the proceedings before a tribunal will continue and an order on merits of the rival contentions shall have to be
pronounced.72

20 Ins by Act 35 of 1965, s 3 (wef 1-12-1965).

21 section 2A re-numbered as sub-s (1) thereof by Act 24 of 2010, s 3 (wef 15-9-2010 vide S.O. 2278 (E), dated 15-9-2010).
22 Ins by Act 24 of 2010, s 3 (wef 15-9-2010 vide S.O. 2278 (E), dated 15-9-2010).
23 Central Provinces Transport Services Ltd v RG Patwardhan (1957) 1 LLJ 27 [LNIND 1956 SC 91] (SC), per Venkatarama Ayyar
J.
24 Chemicals & Fibres India Ltd v DG Bhoir (l975) 2 LLJ 168, 170 (SC), per Alagiriswami J.
25 Mgmt of Samyuktha Karnataka v ML Satyanarayana Rao 1986 Lab IC 626 -27 (Kant), per Rama Jois J.
26 BK Sharma v State of Uttar Pradesh 1976 Lab IC 1092 (All), per KN Singh J.
27 Brought into force wef 21 August 1984.
28 Gouri Charan Kanungo v PO, IT 1977 Lab IC 1154, 1157 (Ori) (DB), per Acharya J.
29 Southern Roadways Ltd, Bangalore v K Padmabhan 1979 Lab IC 234, 236 (Kant), per Rama Jois J.
30 North Bihar Sugar Mills Ltd v State of Bihar 1980 Lab IC 669 (Pat) (DB), per BP Jha J.
31 Mgmt of Gauhati Transport Assn v LC 1969 Lab IC 1568, 1573 (Ass & Nag), per Goswami J.
32 Deepak Industries Ltd v State of WB (1975) 1 LLJ 293 [LNIND 1974 CAL 264] (Cal) (DB), per Salil K Roy Chowdhury J.

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33 Mgmt of Katkona Colliery v PO, CGIT 1978 Lab IC 1531 (MP) (DB), per GP Singh J.
34 Sindhu Resettlement Corpn v IT (1968) 1 LLJ 834 [LNIND 1967 SC 268] (SC), per Bhargava J.
35 Ram Prasad Vishwakarama v Industrial Tribunal (1961) 1 LLJ 504 [LNIND 1960 SC 333], 507 (SC) : AIR 1961 SC 857 [LNIND
1960 SC 333]:, per Das Gupta J.
36 Mgmt of Katkona Colliery, WCF Ltd v PO, CGIT 1978 Lab IC 1531 (MP) (DB), per GP Singh J.
37 Ramakrishna Mills Ltd v Govt of TN (1984) 2 LLJ 259 [LNIND 1984 MAD 23], 266 (Mad) (DB), per Nainar Sundaram J.
38 Workmen of Best & Crompton Ltd v Mgmt. (1985) 1 LLJ 492, 494-95 (Mad) (DB), per Shanmukham J.
39 Dunlop India Ltd v BD Gupta 1975 Lab IC 702 (Del), per Rajinder Sachar J.
40 Mgmt of Enfield India Ltd v Second Addl LC (1981) 2 LLJ 287 (Mad), per Padmanadhan J.
41 Vishin Das v State of Uttar Pradesh 1971 Lab IC 769, 771 (All), per Srivastava J.
42 Cawnpore Sugar Works Ltd v Dr BP Mohindra (1971) 2 LLJ 169 (All) (DB), per Oak CJ.
43 Hari Fertilizers v State of Uttar Pradesh 1992 Lab IC 1877, 1880 (All), per Katju J.
44 Titagarh Jute Co Ltd v Sriram Tiwari 1979 Lab IC 513 (Cal), per Chakravorti J.
45 Mathur Aviation v Lieutenant Governor, Delhi (1977) 2 LLJ 255, 260 (Del), per Dalip Kapoor J.
46 Mathur Aviation v Lieutenant Governor, Delhi (1977) 2 LLJ 255, 259-60 (Del), per Dalip Kapur J.
47 Rajasthan SRTC v Krishna Kant 1995 Lab IC 2241, 2247 (SC), per Jeevan Reddy J.
48 HS Rangaramu v Kerala SRTC (2002) LLN 860 (Kant), per Jain CJ.
49 Hospital Employees Union v Union of India (2003) I LLJ 1127(SC) : (2002) 10 SCC 224.
50 Binda Prasad Singh v PO, LC (2003) 3 LLJ 544 (Gau) : 2004 (Suppl.) GLT 564, per Ansari J.
51 Oil and Natural Gas Corpn Ltd v N Satyanarayana (2003) 3 LLJ 289 (AP) : (2003) 3 ALD 711 [LNIND 2003 AP 107], per
Narasimha Reddy J.
52 Venkataiah G v IT-cum-LC (2009) 2 LLJ 289 (AP), per Narasimha Reddy.
53 Mohd Jani Basha v Mitra Tobacco Products (2008) 3 LLJ 1022 (AP) : 2008 (4) ALD 519 : 2008 (4) ALT 9, per Narasimha Reddy
J.
54 Rustom and Hornsby (I) Ltd v TB Kadam (1975) 2 LLJ 352 [LNIND 1975 SC 231], 356 (SC), per Alagiriswami J.
55 Toshniwal Bros Pvt Ltd v PO, LC [1969] 19 FLR 352 (Del) (FB), per Dua CJ.
56 Atlas Cycle Industries Ltd v PN Thukral 1971 Lab IC 203, 205 (P&H), per Bal Raj Tulli J.
57 TV Sundaram Iyengar & Sons Pvt Ltd v State of Madras 1970 Lab IC 203 [LNIND 1968 MAD 149]-05 (Mad), per Kailasam J.
58 P Janardhana Shetty v Union of India (1970) 2 LLJ 738 (Mys) (DB), per Chandrasekhar J.
59 Tata Iron & Steel Co v L C 1978 Lab IC 1067 (Pat) (DB).
60 Har Narain Ashok Kumar v State of UP 1974 Lab IC 318 (All) (DB), per Satish Chandra J.
61 Vishnu Dass v State of Uttar Pradesh 1974 Lab IC 1287 (All) (FB), per Jagmohan Lal J.
62 Visakhapatnam Dist Mktg CS Ltd v Govt of AP 1977 Lab IC 959 [LNIND 1976 AP 249], 964 (AP) (FB), per Vimadalal J.
63 Brindavan Hotels v Conciliation Officer 1977 Lab IC 1572 [LNIND 1977 AP 132], 1578 (AP) (FB), per Sheth J.
64 Andhra Pradesh SWICS Ltd v LC, 1987 Lab IC 642 (AP) (FB), per Bhaskaran CJ.
65 Delhi Cloth & Gen Mills Ltd v Shambhu Nath Mukherjee 1977 Lab IC 1695 [LNIND 1977 SC 280] (SC), per Goswami J.
66 N Shivashankarachari v BMT Corpn (2001) 4 LLN 580 (Kant), per Gururajan J.
67 Gulab Narayan Tilekar v DV Industries (2002) 3 LLN 707 (Bom) (DB), per Lodha J.
68 Government of India 2002, Report of NCL-II, Chap 13, p 46, para 6.96.
69 V Bhaskaran v Union of India (1982) 1 LLJ 485, 486 (Ker), per Vadakkel J.
70 F Veeramani v Mgmt of MDCSM Society Ltd 1983 Lab IC 687, 694 (Mad) (DB), per Ratnam J.
71 Brought into force wef 21 August 1984.
72 Ambabai Manjunath Amin v PL Majumdar, PO, LC (1987) 1 LLJ 36, 39 (Bom) (DB), per SK Desai J.

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER I Preliminary

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER I Preliminary

S. 2. Definitions.—

Clause (gg): EXECUTIVE

Executive

The body to which the management of the affairs of a trade union is entrusted is the ‘executive’ in relation to that trade
union, whether it is called as an ‘executive’ or by any other name. This definition is relevant in the context of s 36(1) of the
Act, for the purpose of representation of the workmen.

Clause (h): FEDERAL RAILWAY

Federal Railway

Clause (h), which defined ‘federal railway’, was deleted by the Adaptation of Laws Orders 1950.

Clause (i): INDEPENDENT

This clause is based on s 2(d) of the repealed Trade Disputes Act 1929. The proviso was added by s 2 of the Industrial
Disputes (Amendment) Act 1952. ‘For the purpose of his appointment’ as the chairman or a member of a board, court or
tribunal, a person must be unconnected with:

(i) The industrial dispute referred to it; or

(ii) Any industry directly affected by such dispute.

This clause was clumsily drafted. The words ‘for the purpose of his appointment’ indicate that the chairman or other
member of a board, court or tribunal, should be unconnected with ‘the industrial dispute’ referred to such board, court or
tribunal or with ‘any industry to be affected by such dispute’, at the time of his appointment. The qualification of being an
‘independent person’ is prescribed by s 7C, for being appointed to, or to continue in the office of the presiding officer of a
labour court tribunal or national tribunal. The real intention of the legislature seems to be that a person who is connected
with an ‘industrial dispute’ or with any industry directly affected by such dispute, should not deal with or adjudicate upon
such a dispute as chairman, a member or a presiding officer of a board, court of inquiry, labour court, tribunal or national
tribunal, to whom such a dispute is referred. This intention has hardly been brought out by the language of this clause. To
be appointed to or to continue in an office is one thing and to investigate, inquire into or adjudicate upon a particular
dispute is altogether a different one. Then the definition in this clause does not refer to a labour court and the national
tribunal. Further, this clause as well as s 7C do not refer to conciliation officers, who also need be independent persons, in
as much as the chairman or a member of a board is required to be an ‘independent person’. This definition as well as s 7C
require recasting, clearly bringing out the intention of the legislature.

Proviso
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

This proviso is in the nature of an explanation, whereby it is clarified that merely on account of the fact that a person is a
share-holder in an incorporated company, which is connected with, or is likely to be affected by, such an industrial dispute,
he shall not cease to be ‘independent’. He is, however, required to disclose to the ‘appropriate government’, the nature and
extent of the shares held by him in the incorporated company as soon as he receives the order of reference of the industrial
dispute, which is connected with or likely to affect such company.

Clause (j): INDUSTRY

Legislation

There was no definition of ‘industry’ in the Trade Disputes Act 1929. The present definition continues to be as originally
enacted in the IDA. Though this definition has not undergone any amendment, it has undergone variegated judicial
interpretations.

This definition is based on s 4 of the Commonwealth Conciliation and Arbitration Act 1904-25 of Australia, which reads
thus:

(i) Any business, trade, manufacture, undertaking or calling of employers on land or water;

(ii) any calling, service, employment, handicraft or industrial occupation or avocation of employees on land or water; and

(iii) a branch of an industry and a group of industries.

Hence, in construing the definition and opinion-making, the courts have been influenced by the Australian decisions,1
which have been sub rosa all the time. Difficulty, however, in using Australian cases with a text book approach is perhaps
not noticed, as in a great body of those cases, the problem presented in its many facets and the approach was pragmatic.2
The Amending Act 46 of 1982, which also amended the definition of ‘industry’, has been substantially brought into force
wef 21 August 1984. But the definition of ‘industry’ has not been brought into force so far. In Des Raj, speaking for the
court, RN Mishra J, lamented:

Though almost six years have elapsed since the amendment came on the statute book, it has not been enforced yet. Bare Acts and
commentaries on the Industrial Disputes Act have, however, brought in the new definition by deleting the old one, with a note that
the new provision has yet to come into force. This situation has further added to the confusion. In the language of Krishna Iyer J, a
definition ‘is ordinarily, the crystallization of a legal concept, promoting precision and rounding off blurred edges but, alas, the
definition in s 2(j), viewed in retrospect, has achieved the opposite.3

Industry

The definition of ‘industry’ in this clause is both exhaustive and inclusive and is ambivalently comprehensive in scope. It
is in two parts. The first part says that it means any business, trade, undertaking, manufacture or calling of employees’ and
then goes on to say that it includes any calling, service, employment handicraft or industrial occupation or avocation of
workmen.4 Thus, one part defines it from the standpoint of the employer; the other from the standpoint of the employees.
The first part of the definition gives the statutory meaning of industry, whereas the second part deliberately refers to
several other items of industry and brings them in the definition in an inclusive way.5 The first part of the definition
determines an industry by reference to the occupation of the employers in respect of certain activities. The activities are
specified by five words, namely, ‘business’, ‘trade’, ‘undertaking’, ‘manufacture’ or ‘calling’. These words determine the
scope of the word ‘industry’ and they describe what the cognate expression ‘industrial’ is intended to convey. This is the
significance or denotation of the term.6

‘Business’ is a word of wide import.7 This expression is wider than the term ‘trade’ and is not synonymous with it, and it
means practically ‘anything which is not an occupation, as distinguished from pleasure’.8 ‘Trade’ is not only in the
etymological or dictionary sense, but in legal usage as well, a term of a wide scope; it may mean the occupation of a
smaller shopkeeper just as well as that of a commercial magnate, while it may also mean a skilled craft.9 The word ‘trade’
in its primary meaning is an ‘exchange of goods for goods or goods for money’ and in its secondary meaning, it is ‘any
business carried on with a view to profiting, whether manual or mercantile, as distinguished from the liberal arts or learned
professions or from agriculture’.10 The occupation of men in buying and selling, barter or commerce, is generally
considered as ‘trade’. Occasionally, some work, especially skilled work, is also considered a ‘trade’, eg, the trade of a
goldsmith. But in another sense, a ‘trade’ would include only persons in a particular line of business, in which persons are

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employed as workmen. But the word as used in the statute must be distinguished from professions, although even
professions have trade unions.11 Though ‘trade’ is often used in contrast with ‘profession’, ‘a professional worker would
not ordinarily be called a tradesman, but the word ‘trade’ is used in the widest application to the appellation ‘trade
unions’.12 But an activity, whether it is a ‘trade’ or a ‘business’, will be an ‘industry’, because both have been included in
the definition of an industry.13

The word ‘undertaking’ is the most elastic of all the words used in the definition.14 According to the Webster’s dictionary,
an ‘undertaking’ means ‘anything undertaken or any business, work or project which one engages in or attempts as an
enterprise’. The word ‘undertaking’ in the context of the definition, has been understood to mean ‘any business or any
work or project which one engages in or attempts as an enterprise, analogous to business or trade.15 Krishna Iyer J held:

To be analogous is to resemble in functions relevant to the subject, as between like features of two apparently different things. So,
some kinship through resemblance to ‘trade’ or ‘business’ is the key to the problem...Partial similarity postulates selectivity of
characteristics for comparability.16

‘Manufacture’ is a kind of a productive activity, in which the making of articles or materials, often on a large scale, is by
physical labour or mechanical power.17 The word ‘calling’ is again a very wide word and it means one’s usual occupation,
avocation, business or trade.18 In certain cases, the word has been given very wide signification meaning ‘the way in which
a man passes his life’.19 According to Krishna Iyer J:

An industry is a continuity, an organised activity, a purposeful pursuit-not any isolated adventure, desultory excursion or casual,
fleeting engagement, motivelessly undertaken. Such is the common feature of a ‘trade’, ‘business’, ‘calling’, ‘manufacture’-
mechanical or handicraft-based ‘service’, ‘employment’, industrial occupation or avocation’. The expression ‘undertaking’ cannot
be torn off from the words whose company it keeps. If birds of a feather flock together and noscitur a sociis is a commonsense
guide to the construction the definition of an industry, ‘undertaking’ must be read down to conform to the restrictive characteristics
shared by the society of words before and after it. A wide meaning must fall in line and discordance must be excluded from a
sound system’.20

In an Australian case, Isaacs J, speaking for the High Court of Appeal, picturesquely illustrated the terms used in the
definition of ‘industry’ as:

a ‘business’ (as a merchant), a ‘trade’ (as a cutler), a ‘manufacturer’ (as a flour miller), an ‘undertaking’ (as a gas company), a
‘calling’, (as an engineer) or a ‘service’ (as a carrier) or an ‘employment’ (a general term like ‘calling’—embracing some of the
others, and intended to extend to vocations which might not be comprised in any of the rest), all of these expressions so far
indicating the occupation in which the principal...is engaged, whether on land or water...if the occupation so described is one in
which persons are employed for pay, hire, advantage, or reward, ie, as employees, then, with the exceptions stated, it is an
‘industry’ within the meaning of the Act.21

The second part views the matter from the angle of the employees and is designed to include something more than what
the term primarily denotes. By this part of the definition, any ‘calling’, ‘employment’, ‘handicraft’, ‘industrial occupation’
or ‘avocation’ of workmen, is included in the concept of an ‘industry’. This part gives an extended connotation to the
word. The word ‘calling’ finds place in both the parts of the definition. In the first part, it refers to the employers and in the
second part, to the workmen. The word ‘service’ in the second part is again of a very wide import. The word ‘employment’
brings in the contract of service between the employer and the employee.22 The word ‘handicraft’ means any manual
labour exercised by way of trade or for purposes of gain in or incidental to the making of any article or a part of an
article.23 The word ‘avocation’ is a word of wide signification, meaning the way in which a man passes his life or spends
his time.24 According to Fowler’s Modern English usage, a person’s avocations are the things he devotes his time to, his
pursuits or engagements, in general, the affairs that he has to see. The word ‘occupation’ is a word of a still wider
signification. In other words, what does not amount to a vocation, may amount to an occupation. The phrase ‘occupation or
avocation’ is, however, qualified by the word ‘industrial’, which indicates that the ‘occupation or avocation’ in which the
workmen are employed should be of an ‘industrial character’. It is thus clear that the first part defines an industry in
relation to the activities of the undertaking ie, the employer, while the second defines it in relation to the work done by the
employees, thus giving an extended connotation though this part standing alone, cannot define what an is ‘industry’ is.
Discussing the two parts of the definition of an ‘industry’ in Gymkhana Club, the Supreme Court attempted to keep the
two notions concerning the employers and the employees apart and expressed the opinion that the denotation of the term

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‘industry’ is to be found in the first part, relating to the employers and the connotation of the term is intended to include the
second part relating to the workmen and concluded:

If the activity can be described as an industry with reference to the occupation of the employer, the ambit of the industry, under the
force of the second part, takes in the different kinds of activity of the employees mentioned in the second part. Bur the second part
standing alone cannot define ‘industry’...By the inclusive part of the definition, the labour force employed in an industry is made
an integral part of the industry for purposes of industrial disputes, although an industry is ordinarily something which employers
create or undertake. 25

But later on, the court realised the necessity of qualifying these observations and in Safdarjung Hospital, in fact, it did
qualify them in the following words:

It is not necessary to view our definition in two parts. The definition read as a whole, denotes a collective enterprise in which
employers and employees are associated. It does not exist either by employers alone or by employees alone. It exists only when
there is a relationship between employers and employees, the former engaged in a business, trade, undertaking, manufacture or
calling of employers and the latter engaged in any calling, service, employment, handicraft or industrial occupation or avocation.
There must, therefore, be an enterprise in which the employers follow their avocation as detailed in the definition and employ
workmen who follow one of the avocations detailed for workmen. The definition no doubt, seeks to define an ‘industry’ with
reference to employers’ occupation but includes the employees, for without the two, there can be no industry. An industry is only
to be found when there are employers and employees, the former relying upon the services of the latter to fulfill their own
occupations.26

In other words, the first and the second part of the definition are not to be read in isolation, as if there were different
industries, but they are aspects of the occupation of both the employers and the employees in an industry. They are two
counterparts of the same industry. They are the obverse and reverse of the same coin. In either case, the activity, whether
of the employer or of the employees of an undertaking, has, therefore, to be determined in relation to its being a business,
trade, undertaking, manufacture or calling of the employer. The words, ‘calling’, ‘service’, ‘employment’, ‘industrial
occupation’ or ‘avocation’ of workmen, used in the second part of the definition, read with the word ‘undertaking’ in the
first part, obviously mean much more than what is ordinarily understood by the words ‘trade’ or ‘business’.27 Howsoever
wide the sweep of the word ‘service’ may be, it cannot be taken to a mean ‘service howsoever rendered, in whatsoever
capacity and for whatsoever reasons’.28 Likewise, if all the words used in the second part ‘are given their widest meaning,
all services and all callings would come within the purview of the definition; even services rendered by a servant, purely in
a personal or domestic matter, or even in a ‘casual’ way, would fall within the definition’.29Such a wide construction
would over-reach the objects for which the Act was passed.30 Hence, the second part, standing alone, cannot define an
industry. In other words, an ‘industry’ is not to be found in every case of employment or service.31 In the words of
Hidayatullah CJI:

The definition of industry, read as a whole, denotes a collective enterprise in which employers and employees are associated. It
does not exist either by employers alone or by employees alone. It exists only when there is a relationship between employers and
employees, the former engaged in a business, trade, undertaking, manufacture or calling of the employers and the latter engaged in
a any calling, service, employment, handicraft or industrial occupation or avocation. There must, therefore, be an enterprise in
which the employers follow their avocations as detailed in the definition and employ workmen, who follow one of the avocations
detailed for workmen. The definition no doubt seeks to define ‘industry’ with reference to employers’ occupation, but includes the
employees, for without the two, there can be no industry. An industry, is only to be found when there are employers and
employees, the former relying upon the services of the latter to fulfil their own occupation.32

The history of industrial disputes and its legislation recognise the basic concept that the activity should be organised and
not one which pertains to private or personal employment.33 In interpreting the wide words of the definition, therefore, the
necessity of employing certain limitations as to exclude some callings, services or undertakings from their scope, was felt.
For this purpose, the Supreme Court evolved certain tests. A graph of the cases decided by the Supreme Court, if plotted
on the background of the expressions used in the two parts of the definition of an ‘industry’, would represent a rather zig-
zag curve. Krishna Iyer J, said:

The rather zig-zag course of the landmark cases and the tangled web of judicial thoughts’, ‘have perplexed one branch of the
industrial law, resulting from the obfuscation of the basic concept of an ‘industry’ under the Industrial Disputes Act 1947.34

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The question as to what is an ‘industry’, has continuously baffled and perplexed the courts. According to Bhagwati J:

There have been various judicial ventures in this rather volatile area of the law. The Act gives a definition of an ‘industry’ in s 2(j)
but this definition is not very vocal and it has defied analysis, so that judicial effort has been ultimately reduced merely to evolving
tests by reference to characteristics regarded as essential for constituting an activity as an ‘industry’. The decided cases show that
these tests have not been uniform; they have been guided more by empirical rather than a strictly analytical approach. Sometimes,
these tests have been liberally conceived, sometimes narrowly.35

Most of the decisions have centered on the expression ‘undertaking’ as used in the definition. The earliest case decided by
the Supreme Court, on the construction of the definition, was Banerji v Mukherjee , which dealt with the question as to
whether the activities of a municipal corporation would fall within the ambit of the definition. In this case, the court held
that though municipal activity could not be truly regarded as a ‘business or trade’, it would fall within the scope of the
expression ‘undertaking’. Hence, the non-profit undertakings of the municipality were included in the concept of an
industry, even if there was no private enterprise.36 In the second case, viz, Baroda Borough Municipality,37 the court held
that branches of work that can be regarded as analogous to carrying on of a trade or business, would fall within the
meaning of an industry, as given in s 2(j) of the Act. The ratio of these two decisions is that for an activity to be an
industry, it is not necessary that it must be carried on by private enterprise or must be commercial and result in profit. It is
sufficient that the activity is an ‘undertaking’ analogous to the carrying on of a trade or business and involves co-operation
between the employers and the employees. This result was reached at by extending the meaning of the expression
‘undertaking’ to cover adventures not strictly trades or businesses, but ‘objects very similar’.38 But it is not easy to answer
the questions viz: when can an undertaking be said to be analogous to a trade or business and what are the attributes or
characteristics which it must possess in common with trade or business, in order to be regarded as analogous to trade or
business? The prescient words are: ‘branches of work that can be said to be analogous to the carrying out of a trade or
business’. Accordingly, in this perspective, the comprehensive reach of ‘analogous’ activities must be measured. The
similarity stressed relates to ‘branches of work’, and moreover, the analogy with trade or business is to be in the ‘carrying
out’ of the economic adventure.39 As a working principle, it has been suggested that, in order to be recognised as an
undertaking analogous to trade or business, the activity must be an economic activity, in the sense that it must be
productive of material goods or material services.40 The third case pertaining to the activities of a municipal corporation
was Corporation of Nagpur, in which the court held that a municipal corporation would be an ‘industry’ within the
meaning of s 2(14) of the CP & Berar Industrial Disputes and Settlement Act 1947.41

Unlike the definition of industry in the IDA, the word ‘undertaking’, in this definition, is qualified by the words
‘manufacturing or mining’. Therefore, the court could not press the expression ‘undertaking’ into service. But the
municipal activity was brought within the ambit of the words ‘business’ or ‘trade’ and a distinction was drawn between the
legal and municipal functions of the municipal bodies. In coming to the conclusion that the latter were analogous to
business or trade, because the court observed that they were not legal, the activity was organised and a service was
rendered. In discerning the import of the words ‘analogous to the carrying out of a trade or business’, the court emphasised
the analogy in the nature of the organised activities implicit in a trade or business, rather than on equating the other
activities with trade or business.42 Thus, on the one hand, the court said that the non-legal municipal activities would fall
within the expression ‘business’ or ‘trade’, as used in s 2(14) of the CP & Berar Act, while on the other hand, it said that
such activities were analogous to ‘business’ or ‘trade’. This exposition blurs the picture. In the subsequent cases, it viewed
the matter a little differently and formulated further tests. The first test evolved was that an activity, business or trade is
ordinarily organised. This test taken with the earlier test, that an ‘undertaking’ must be analogous to a ‘business’, ‘trade’ or
‘calling’, does not appear to widen the meaning of the term ‘undertaking’, but tends to narrow it down. The second test
was that the activity need not necessarily be preceded by a procurement of capital in the business sense, and profit need not
be a motive. Accordingly, so long as a relationship of an employer and his workmen is established with a view to the
production of material goods or material services, the activity must be regarded as an undertaking analogous to trade or
business.43

In Hospital Mazdoor Sabha, the court noted that the first part of the definition contains the statutory meaning and the
second part means ‘an enlargement of it by including other items of industry’. As a matter of fact, the expressions used in
the second part are not items of industry, but are aspects of the occupation of the employees, which are intended to be an
integral part of an industry, for the purposes of industrial disputes. The test that an ‘industry’ is ‘an economic activity’
involving an investment of capital and is systematically carried on for profit, for the production or sale of goods, by the
employment of labour, was also discarded because a profit motive and an investment of capital were considered
unessential. In the case of undertakings run by the government, a further inquiry was suggested, viz: ‘Can such activity be
carried on by a private individual or a group of individuals’? In view of the affirmative answer to this query in the case of
hospitals, it was held that a hospital is an ‘industry’, even if it is run by the government without a profit motive and with

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public funds. While determining the question as to whether a particular activity is an ‘industry’ or not, the questions as to
who conducts the activity or whether it is for profit were considered irrelevant. However, it was emphasised that for an
‘undertaking’, to be an ‘industry’, it must be analogous to trade or business. But the court recognised that a line must be
drawn to exclude some ‘callings’, ‘services’, and ‘undertakings’ from the gambit of the definition of industry. Hence,
domestic, personal or casual services were excluded from the definition and examples were given of such services. In this
case, though the court rejected the application of the principle of noscitur a sociis while interpreting the words of wide
amplitude, used in the definition of an ‘industry’, in reality, it applied this principle to constitute the rationale for the
exceptions carried out by it.44

Distinguishing the exceptions, the court laid down that an activity, systematically or habitually undertaken for the
production or distribution of goods or for rendering material services to the community at large or a part of such
community, with the help of employees, is an undertaking. In this way, the connection between a trade and business on the
one hand and an undertaking on the other, was established, which seems to indicate that the expression ‘undertaking’ must
take its colour from the other expressions. An industry was thus said to involve co-operation between the employer and the
employees, for the object of satisfying material human needs, though not for oneself or for pleasure, nor necessarily for
profit. As a matter of fact, there has been a continuous consensus on the point that a lack of business and profit motive or
of a capital investment, would not take an activity out of the sweep of ‘industry’, if other conditions are satisfied.45 It is the
activity in question which attracts the definition and the absence of the investment of any capital or the fact that the activity
is or is not conducted for a profit motive, would not make any material difference. Conversely, the mere existence of a
profit motive will not necessarily convert the activity into an ‘industry’, if the other tests are not satisfied.46 Likewise, the
doctrine of quid pro quo can have no application for determining the question as to whether an activity is an industry or
not. In other words, a consideration for money while providing the services is not an essential characteristic of an
‘industry’ in a modern state.47

In the next case, Ahmedabad Textile Research Assn, the court held that the activity of the association was an ‘industry’
because it was an providing material services to a part of the community, was carried on with the help of employees, was
organised in a manner similar to that in a trade or business and there was co-operation between the employers and the
employees. For the first time, a fresh test was added: that the partnership should only be an association between the
employers and the employees, and the employees should have no rights in the results of their labour or in the nature of the
business or trade.48 In the next case, ie, National Union of Commercial Employees, where the case satisfied the tests so far
enumerated, a new test was added: that the association of capital and labour must be direct and essential. The services of a
solicitor were regarded as those of an individual, depending upon his personal qualifications and ability, to which the
employees did not contribute. The contribution of the employees in the case of a solicitor’s firm, it was held, had no direct
or essential nexus with the advice or services rendered by the solicitor. In this way, the liberal professions were excluded
from the gambit of the definition. The reasons given by the court for excluding the liberal professions from the ambit of the
wide words used in the definition of an industry were: the doctrine of direct co-operation and the special features of liberal
professions.49 At this point, the court started realising the difficulty of laying down tests from case to case. In the next case,
ie, Harinagar Cane Farm, where a cane farm was purchased by a sugar factory and worked as a department for the
agricultural operations of that firm, it was held to be an industry on the facts of the case. However, it was held that
agriculture, under all circumstances, could not be called an industry.50 Thus, it would appear that the court reversed its
method of looking for tests from other cases and referred to them only after it had reached its conclusion on the facts of the
case, observing that the court must refrain from laying down unduly broad or categorical propositions.

In University of Delhi, the question that came before the court was: whether the bus drivers employed by the Delhi
University were workmen, and this question, in its turn, depended upon the jurisdictional question viz: whether the
educational activity of the Delhi University would be an industry or not. Narrowing down the concept of ‘service’, the
court held that educational institutions would not fall within the meaning of ‘industry’, because their aim was education
and the teachers’ profession was not to be equated to that of industrial Workers.51 The court, however, reiterated that this
must not be understood to be a general proposition laid down by it. Thus, though the words used in the definition of an
industry, should have been given some definite meaning, they were made subservient to the tests laid down in the earlier
dicta, which disclose a procrustean approach to the problem. Since the social norms are not static, the legal norms are not
static either. Hence, in the exigencies in which the earlier tests were found unsatisfactory in covering the new situations,
the court created new tests. For instance, the emphasis resulting from the extension of the definition in its latter part, to
include the services of employees, received little recognition in the later cases. Too much insistence upon a partnership
between employers and employees is evident in the case of National Union of Commercial Employees (supra), and too
little in that of Ahmedabad Textile Research Association (supra).

As innovations of new tests in new fact-situations started blurring the picture, a fresh look at the matter became necessary.
Hence, in Gymkhana Cub, the court reviewed all the earlier cases and made its own comments on them. The main question
in the case was: whether the activities of the Club which was a members’ club, fell within the definition of an ‘industry’?

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The claim was based on the contentions that the club was organised as an industry, as it was organised on a vast scale, with
multifarious activities; that facilities of accommodation, catering, sale of alcoholic and non-alcoholic beverages, games,
etc. were provided; that the club was running parties at which guests were frequently entertained; and that the club had
established reciprocal arrangements with other clubs, for its members. Dealing with the above question, the court
proceeded to notice the definitions of an ‘employer’ as given in s 2(g) and ‘industrial disputes’, in s 2(k) and also analysed
and ascribed meanings to the constituent terms used in the definition of an ‘industry’ in s 2(k). Speaking for the court,
Hidayatullah J summed up the principles, settled by the earlier dicta, in the following words:

The principles so far settled, come to this: Every human activity in which enters the relationship of employers and employees, is
not necessarily creative of an industry. Personal services rendered by domestic and other servants, administrative services of public
officials, services in aid of occupations of professional men, such as doctors and lawyers, etc, employment of teachers and so on,
may result in relationships in which there are employers on the one side and the employees on the other, but they must be excluded
because they do not come within the denotation of the term ‘industry. ... Where the activity is to be considered as an industry, it
must not be casual, but must be distinctly systematic. The work for which labour of workmen is required, must be productive and
the workmen must be following an employment, calling or industry avocation. The salient fact in the context is that the workmen
are not their own masters, but render service at the behest of the masters. This follows from the second part of the definition of
industry. Then again, when private individuals are the employers, the industry is run with capital and with a view to profits. These
two circumstances may not exist when government or a local authority enters upon business, trade, manufacture or an undertaking,
analogous to trade. … Industry is the nexus between employers and employees and it is the nexus which brings two distinct bodies
together to produce a result. We do not think that the test that the workmen must not share in the product of their labours, adopted
in one case, can be regarded as universal. There may be occasions when the workmen may receive a share of the produce, either as
part of their wages or as bonus or as a benefit.52

Thus, having laid down the principles for determining as to what an industry is, the court proceeded to discuss the question
of whether the club viz, the Madras Gymkhana Club, which was a member’s club, was an ‘industry’. It was held that
though the activity of the club may be falling under the second part of the definition in as much as the work of the club is
conducted with the aid of the employees, who follow a ‘calling’ or an ‘avocation’, it cannot be described as a ‘trade’,
‘business’, ‘manufacture’ or ‘calling’ of the members of the managing committees of the club. It was also held that the
activity of the club was not an ‘undertaking’ which was analogous to trade or business, which element does not exist in a
members’ club. The members’ club, therefore, was held not to be an industry. The tests laid down in this case were
followed by the court in Cricket Club of India, without any further gloss. In this case, the club was incorporated as a
company, but in view of the fact that it was not like an ordinary company, constituted for the purpose of carrying on some
business, the court said that the club in fact, was a members’ club and all services provided in the club for the members
had to be treated as the activities of a self-serving institution.53 A Bench of six judges of the Supreme Court, in Safdarjung
Hospital, observed that in such cases, particularly in Gymkhana Club, it is the kind of establishment which the organisation
has, with which the court is concerned. However, as all the earlier cases had been considered in Gymkhana Club, the court
did not find it necessary to refer to those cases and observed that:

... there must be first established a relationship of employers and employees associating together, the former following a trade,
business, manufacture, undertaking or calling of employers, in the production of material goods and material services and the latter
following any calling, service, employment, handicraft, or industrial occupation or avocation of workmen, in aid of the employers’
enterprise. 54

In Bombay Pinjrapol, the facts disclosed that: (a) the value of the milk supplied to the sick and infirm cattle was
infinitesimal compared to that sold in the market; (b) the expenses incurred in connection with the treatment of the sick and
infirm animals were also negligible compared to the total expenses of the institution; and (c) the number of men employed
for such treatment was very small, at all times. The mere fact, therefore, that the Pinjrapol had never purchased milch cows
or stud bulls, except for one, made no difference to the determination of the question as to whether their activity of
maintaining the cows and bulls could be considered only as an investment. On these facts, it was held that the activities
carried on by the Pinjrapol constituted an ‘industry’.55 The objects of the trust from which the Pinjrapol was created were
not considered relevant while determining the question whether the activities of the Pinjrapol constituted an industry or
not. In Indian Chambers of Commerce & Industry, in view of the principles crystallised in the earlier cases, the court
observed that there was no warrant to allow any other element to be added to the criteria already laid down for determining
what an ‘industry’ is, and accentuated on the test of systematic activity and co-operation between the employers and the
employees, resulting in production and material services.56 The apparent divergence in judicial dicta became pronounced in
the majority judgment in Indian Standards Institution, in which the court was confronted with the question as to whether
the activities of the Indian Standards Institution, which was registered as a society under the Societies Registration Act and

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was established for fixing the Indian Standards, would fall within the ambit of the definition of an ‘industry’.57 In view of
the law stated by the court in Madras Gymkhana, the tribunal held that the institution was not an ‘industry’ and hence, the
reference was not competent. In appeal, Alagiriswami J, in his dissenting opinion, contented himself by adhering to the
rationale of Madras Gymkhana and Safdarjung. But Bhagwati J, who delivered the majority opinion, preferred to have a
second look on Hospital Mazdoor Sabha, Madras Gymkhana and Safdarjung and summarised the law in the following
words:

To summarise, an activity can be regarded as an ‘industry’ within the meaning of s 2(j), only if there is a relationship of an
employer and employees and the former is engaged in a ‘business’, ‘trade’, ‘undertaking’, ‘manufacture’ or ‘calling of employers’
and the latter, ‘in any calling, service, employment, handicraft or industrial occupation or avocation’. Though ‘undertaking’ is a
word of large import and it means anything undertaken or any project or enterprise, in the context in which it occurs, it must be
read as meaning an undertaking analogous to trade or business. In order that an activity may be regarded as an undertaking
analogous to trade or business, it must be organised or arranged in a manner in which trade or business is generally organised or
arranged. It must not be casual, nor must it be for oneself or for pleasure. And it must rest on co-operation between the employer
and employees, who associate together with a view to produce, sell or distribute material goods or material services. It is entirely
irrelevant whether or not there is a profit motive or an investment of capital in such activity. Even without these two features, an
activity can be an undertaking analogous to trade or business. It is also immaterial whether ‘its objects are charitable or that it does
not make profits or even where profits are made, they are not distributed amongst the members, or that its activity is subsidised by
the government.’ Again, it is not necessary that ‘the employer must always be a private individual ...The Act, in terms,
contemplates cases of industrial disputes where the government or a local authority or a public utility service may be the employer.
… It also makes no difference that the material services rendered by the undertaking are in public interest or not. The concept of
public interest in a modern welfare state, where new social values are fast emerging and the old are dying out, is indeed to be so
wide and so broad and comprehensive in its spectrum and range, that many activities which admittedly fall within the category of
‘industry’, are clearly designed to subserve public interest. In fact, whenever any industry is carried on by the government, it would
be in public interest, for the government can act only in public interest. Whether an activity is carried on in public interest or not
can, therefore, never be a criterion for determining its character as an industry.58

This deviation from the dicta of Madras Gymkhana and Safdarjung Hospital provided the background for referring the
question of the interpretation of the definition of ‘industry’, to a seven-judge Bench in Bangalore Water Supply.59 In this
case, in an application under s 33C(2), the management of the Board, took a preliminary objection that the board being a
statutory body, discharging the regal functions of the state, was not an ‘industry’ in view of the ratio of the Madras
Gymkhana and Safdarjung Hospital cases. The labour court rejected the objection and the aggrieved management appealed
to the Supreme Court, by special leave. The three-judge Bench which initially commenced the hearing, felt it necessary to
place the matter before the chief justice, for consideration by a larger Bench. Accordingly, the appeal was heard by a
seven-judge Bench. The leading judgment was delivered by Krishna Iyer J for himself, Bhagwati and Desai JJ on 21
February 1978, while Beg CJI, in a separate concurring judgment, endorsed the majority decision in giving the widest
possible amplitude to the words used in the definition and rejecting the rules of noscitur a sociis as well as ejusdem generis
in interpreting the definition of ‘industry’. But on that day, Chandrachud J (as he then was), pronounced an order on behalf
of himself, Jaswant Singh and Tulzapurkar JJ, agreeing that the appeal should be dismissed. However, he further observed
that the area of concurrence or divergence with the rest of the judgment will, if necessary, be indicated later. On 7 April
1978, Jaswant Singh J, delivered the opinion for himself and Tulzapurkar J, agreeing that the appeal should be dismissed,
but indicating the area of their divergence. The learned judges expressed their sense of dismay on the earlier dicta,
observing thus:

we have struggled to find out its true scope and ambit in the light of the plethora of decisions of this court, which have been laying
down fresh tests from time to time, making our task an uphill one.

They applied the principle of noscitur a sociis to the definition and observed:

Expressed differently, it means that the meaning of a doubtful word may be ascertained by reference to the meaning of words
associated with it, we are of the view that, despite the width of the definition, it could not be the intention of the legislature that
categories 2 and 3 of the charities alluded to by our learned brother Krishna Iyer in his judgment, hospitals run on charitable basis
or as a part of the functions of the government or local bodies, like municipalities and educational and research institutions,
whether run by private entities or by government, and liberal and learned professions like that of doctors, lawyers and teachers, the
pursuit of which is dependent upon an individual’s own education, intellectual attainments and special expertise, should fall within
the pale of the definition. We are inclined to think that the definition is limited to those activities systematically or habitually
undertaken on commercial lines, by private entrepreneurs, with the co-operation of employees, for the production or distribution of

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goods or for the rendering of material services to the community at large or a part of such community. It is needless to emphasise
that in the case of liberal professions, the contribution of the usual type of employees employed by the professionals, to the value
of the end product (viz, the advice and services rendered to the client) is so marginal that the end product cannot be regarded as the
fruit of the co-operation between the professional and his employees.60

But on that day, Chandrachud CJI (as he had by then become) also delivered his opinion, expressing his disagreement with
the area of divergence delineated in the judgment of Jaswant Singh J. The chief justice not only endorsed the opinion of
Krishna Iyer J, but seems to have gone a step further by discarding the principle of noscitur a sociis in interpreting the
words used in the definition of ‘industry’. He expressed dissent with certain activities being treated as falling outside the
definition in the Hospital Mazdoor Sabha case. He went to the extent of saying that even the state’s regal activity will not
fall outside the definition of an ‘industry’, But in view of the problem of the application of the definition being too policy-
oriented to be satisfactorily settled by judicial decisions, the Chief Justice recommended that the Parliament must step in
and legislate in a manner which will leave no doubt as to its intention, as ‘that alone can afford a satisfactory solution to
the question which has agitated and perplexed the judiciary at all levels’.61 In his leading judgment, Krishna Iyer J, had in
theory accepted the application of the principle of noscitur a sociis, while interpreting the words used in the definition of
an ‘industry’ in observing:

If birds of a feather flock together and noscitur a sociis is a common sense guide to construction, ‘undertaking’ must be read down
to conform to the restrictive characteristic shared by the society of words before and after. Nobody will torture ‘undertaking’ in
Section 2(j) to mean meditation or musheira, which are spiritual and aesthetic undertakings. Wide meanings must fall in line and
discordance must be excluded from a sound system.62

But in application, he excepted very few categories from the ambit of the definition and discarded the tests laid down in the
earlier dicta. It is not possible to understand as to how the principle of noscitur a sociis can be partially applied. If the
principle is not applied, then there is no logical justification for the categories excepted by Krishna Iyer J in his judgment.
Unless the principle is applied, even the services of domestic servants cannot be excluded from the definition of ‘industry’.
He appears to be conscious of the incongruity in the earlier dicta and the consequences of giving full meaning to the words
used in the definition. That is why he indicated his frustration with the present definition and recommended legislative
reform. He observed:

So, the parity is in the modus operandi in the working-not in the purpose of the project, nor in the disposal of the proceeds, but in
the organization of the venture, including the relations between the two limbs, viz, labour and management. If the mutual relations,
the method of employment and the process of cooperation in carrying out of the work bear close resemblance to the organization,
method, remuneration, relationship of employer and employee and the like, then it is an industry, otherwise not.63

In the leading judgment, Krishna Iyer J has, with a crusader’s zeal and vehemence, reviewed the earlier dicta on the
interpretation of the wide words encompassed in the definition, ‘hopefully to abolish blurred edges, illumine penumbral
areas’ and overrule what the court regards as wrong. Then, he proceeded to formulate positively and negatively, decisive
principles for identifying an ‘industry’ under the Act, which would be authoritative until overruled by a larger Bench or
superseded by the legislative branch, which may best be set out in his own words:

I. ‘Industry’, as defined in section 2(j) and explained in Banerji case,64 has a wide import.

(a) Where there is a (i) systematic activity, (ii) organised by co-operation between employer and employee (the direct
and substantial element is chimerical) (iii) for the production and/or distribution of goods and services calculated to
satisfy human wants and wishes (not spiritual or religious but inclusive of material things or services geared to
celestial bliss, ie, making, on a large scale, prasad or food) prima facie, there is an ‘industry’ in that enterprise.
(b) Absence of profit motive or gainful objective is irrelevant, be the venture in public, joint, private or other sector.

(c) The true focus is functional and the decisive test is the nature of the activity, with special emphasis on the
employer-employee relations.
(d) If the organisation is a trade or business, it does not cease to be one because philanthropy animating the
undertaking.
II. Although section 2(j) uses words of the widest amplitude in its two limbs, the re-meaning cannot be magnified to
overreach itself

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(a) ‘Undertaking’ must suffer a contextual and associational shrinkage, as explained in Banerji and in this judgment; so
also the words, service, calling and the like. This yields the inference that all organised activity, possessing the
triple elements in I (supra), although not a trade or business, may still be an ‘industry’ provided the nature of the
activity, viz, the employer-employee basis, bears resemblance to what we find in a trade or business. This takes into
the fold, ‘industry’ undertakings, callings and services, adventures ‘analogous to the carrying on of trade or
business’. All features, other than the methodology of carrying on the activity, viz, in organising the co-operation
between employer and employee, may be dissimilar. It does not matter if on the employment terms, there is
analogy.
III. Application of these guidelines should not stop short of their logical reach by the invocation of creeds, cults or inner
sense of incongruity or outer sense of motivation, for or resultant of the economic operations. The ideology of the Act
being industrial peace, regulation and resolution of industrial disputes between employer and workmen, the range of this
statutory ideology must inform the reach of the statutory definition. Nothing less, nothing more.
(a) The consequences are: (i) professions, (ii) clubs, (iii) education institutions, (iv) co-operatives, (v) research
institutes, (vi) charitable projects and (vii) other kindred adventures, if they fulfil the triple tests listed in I (supra),
cannot be exempted from the scope of section 2(j).
(b) A restricted category of professions, clubs, co-operatives and even gurukuls and little research labs, may qualify for
exemption if they are simple ventures; substantially, and going by the dominant nature criterion, substantively, no
employees are entertained but in minimal matters; and marginal employees are hired without destroying the non-
employee character of the unit. If, in a pious or altruistic mission, many employ themselves, free or for small
honoraria or like return, mainly drawn by sharing in the purpose or cause, such as lawyers volunteering to run a free
legal services clinic or doctors serving in their spare hours, in a free medical center or ashramites working at the
bidding of the holiness, divinity or like central personality, and the services are supplied free or at nominal cost and
those who serve are not engaged for remuneration or on the basis of master and servant relationship, then, the
institution is not an industry even if stray servants, manual or technical, are hired. Such eleemosynary or like
undertakings alone are exempt-not any other generosity, compassion, developmental passion or project.
IV. The dominant nature test:

(a) Where a complex of activities, some of which qualify for exemption, others do not, involves employees in the total
undertaking, some of whom are not ‘workmen’, as in the University of Delhi case65 or some departments are not
productive of goods and services if isolated, even then, the predominant nature of the services and the integrated
nature of the departments, as explained in the Corpn of Nagpur,66 will be the true test. The whole undertaking will
be an ‘industry’, although those who are not ‘workmen’ by definition, may not benefit by the status.
(b) Notwithstanding the previous clauses, sovereign functions, strictly understood, (alone) qualify for exemption, not
the welfare activities or economic adventures undertaken by government or statutory bodies.
(c) Even in departments discharging sovereign functions, if there are units which are industries and they are
substantially severable, then they can be considered to come within section 2(j).
(d) Constitutional and competently enacted legislative provisions may remove from the scope of the Act categories
which otherwise may be covered thereby.
V. We overrule the Safdarjung Hospital case,67 the Solicitors’ case,68 the Gymkhana case,69 the Delhi University case,70 the
Dhanrajgiryi Hospital case,71 and other rulings whose ratio runs counter to the principles enunciated above, and the
Hospital Mazdoor Sabha case,72 is hereby rehabilitated.

In the light of the fact that several of the earlier decisions of the Supreme Court, which held that: (i) Hospitals run by
Government - as in the case of Safdarjung Hospital, 73 (ii) Solicitors firms - as National Union of Commercial
Employees,74 (iii) Clubs - as in the case of Madras Gymkhana Club,75Cricket Club of India,76 etc., (iv) Educational
Institutions - as that of University of Delhi,77 are not industries, were overruled comprehensively in Bangalore Water
Supply, by a seven-Judge Bench, which was the largest Bench ever sat to decide the question, the said cases are not being
discussed here, as the law laid down therein is no longer good law post-Bangalore Water Supply. Any reference made to
them in the following paragraphs is for the limited purpose of analysis and, in passing, according as the context warranted.

It is obvious that even after the Bangalore Water Supply decision, the judges themselves have not been satisfied with the
interpretation of the definition. The need for legislative reform, has been accentuated by all the judges. In Chief
Conservator of Forests,78 a suggestion was made to the court to reconsider the holding in the Bangalore Water Supply and

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Sewerage Board case before a three judge Bench, which was discountenanced without much ado.

Material Services

In FICCI, holding that the several activities of the Federation of Indian Chambers of Commerce and Industry were in the
nature of material services to the business community, which were rendered with the co-operation of its workmen and as
such, these activities fell within the ambit of the definition of ‘industry’.79 In Bangalore Water Supply (supra), the court
held that since the professions cannot be excluded from industry, the services rendered for the professional persons must
be ‘material services’. However, so far, there is a consensus of dicta on the point that the services rendered by domestic
and other servants are not ‘material services’. The activities of the National Remote Sensing Agency, a research institution,
mainly rendering consultancy services or survey facilities, viz, the carrying out of surveys by using remote sensing
technology, for locating various natural resources, for agriculture, hydrology, meteorology, fisheries, minerals, oil, soils,
environmental monitoring, forestry, ocean resources, topography, land sources and crop diseases, and other services, like
surveillance and distribution of material to institutions and persons, have been held to be ‘material services’.80 In
Umashankar Jaswal, a single judge of Bombay High Court held that a small up-marketing business activity, carried on by
a petty businessman, could not be termed as a systematic activity, organised by the cooperation between the employer and
the employee, for the distribution of goods, and hence, it would not fall within the definition of an ‘industry’.81

Various Activities

Regal and Sovereign Functions of the State

After the decision of the Supreme Court in Bangalore WSSB (supra), the question to be asked is not what is an industry,
but what is not an industry. Despite their efforts to find a working formula for determining as to what activity is an
industry and what is not, practically all judges have cried in frustration for legislative guidance. The Act in terms,
contemplates cases of ‘industrial disputes’ where the government or a local authority or a public utility service may be the
employers. The expansion of the governmental or municipal activity, in fields of productive industry, is a feature of the
developing welfare states. This is considered necessary because it leads to welfare, without exploitation of workmen and
makes the production of goods and material services cheaper by eliminating profit. Government and local authorities Act
as individuals do and the policy of the Act is to put the government and local bodies at par with private individuals. But the
operations of the government which are of administrative or governmental character, cannot be regarded as an industry.
Likewise, the local authorities also cannot be regarded as an industry, unless they produce goods or render material
services and do not share by delegation, in governmental functions or functions incidental thereto.82

The regal power of the State has acquired a definite connotation. Lord Watson, in Richard Coomber, described such
functions as the ‘administration of justice, maintenance of order and repression of crime, as among the primary and
inalienable functions of a constitutional government.83 Isaacs J of the HCA of Australia, in his dissenting judgment in the
School Teachers’ Assn, concisely stated that regal functions are inescapable and inalienable. Such are the legislative
powers, the administration of the laws, the exercise of the judicial power. This statement of law clearly marks out the
ambit of regal functions, as distinguished from the other powers of the state.84 Relying on this statement, in Corpn of
Nagpur (supra), the Supreme Court observed that it could not have been in the contemplation of the legislature, to bring in
the regal functions of the state within the definition of ‘industry’ and thus confer jurisdiction on the industrial tribunal to
decide disputes in respect thereof the activities of the government, which can be properly described as regal or sovereign
activities, are therefore, outside the scope of industry. In Hospital Mazdoor Sabha (supra) the court adumbrated a new test
which required the court to determine whether such activity could be carried on by a private individual or a group of
individuals. If a business or activity could not be carried on by a private individual or a group of individuals, it would not
be an industry, while if it could be, it might fall within the scope of an ‘industry’. Since a hospital run by the government,
can also be run by a private party, it is an ‘industry’, even if there is no profit motive in the case of a government run
hospital. This test of regal and non-regal functions of the state was reiterated by Subba Rao J in Corpn of City of Nagpur.
But this test was rejected by Hidayatullah J in Gymkhana Club, with the observation:

...but it is not enlightening, because there is hardly any activity which private enterprise cannot carry on ...Even the infrastructure
of Adam Smith can be provided by private enterprise. The East India Company did both.85

A priori, in Safdarjung (supra), the learned judge held that the Safdarjung Hospital was not an ‘industry’ because it was
run by the government. The obvious consequence of this holding was that any activity carried on by the government,
whether regal or non-regal, would be de hors the definition of ‘industry’, but a majority of the three judge Bench, in Indian
Standards Institution (supra), relied more on Hospital Mazdoor Sabha than on Safdarjung, while holding that the Indian
Standards Institution which was ‘run by the Government of India, is an industry’. In Bangalore Water Supply (supra), the

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court was not directly concerned with the categories of employees who came under departments charged with the
responsibility for ‘essential constitutional functions of the government’, while formulating the principles for determining
whether it was an industry. In this connection the court observed:

...sovereign functions, strictly understood, (alone) qualify for exemption, not the welfare activities or economic adventures
undertaken by government or statutory bodies’. Even in departments discharging sovereign functions, if there are units, which are
‘industry’ and they are substantially severable, then they can be considered to come within s 2(j). (at p. 488)

As to which function could be, and should be, taken as a regal or sovereign function, in Chief Conservator (supra), the
Supreme Court observed that the dichotomy of the labels such as ‘sovereign’ and ‘non sovereign’ or ‘regal’ or ‘non-regal’,
‘state functions’ or ‘governmental functions’, really does not exist. Therefore, extending the concept of ‘sovereign
functions’, so to include all welfare activities, will erode the ratio of Bangalore Water Supply. Hence, except the strictly
understood sovereign functions, other activities of the state, such as welfare activities, would fall within the purview of the
definition of ‘industry’; ‘and not only this, even within the wider circle of sovereign functions, there may be an inner circle
encompassing some units which could be considered as ‘industry’, if substantially severable’. Thus, these decisions have
not only brought the non-regal functions of the state back into the fold of ‘industry’, but have also applied the doctrine of
severability to the departments of the state discharging regal functions. In All India Radio, the Supreme Court held that the
functions carried on by the All India Radio and Doordarshan could not be said to be confined to sovereign functions, as
they carry on commercial activity for profit, by getting commercial advertisements telecast or broadcast through various
kendras and stations for a fee.86 Consequently, All India Radio and Doordarshan would fall under the definition of
‘industry’. A Full Bench of the Punjab and Haryana High Court, in Kuldip Singh, categorized the functions of the state into
four categories viz:

(i) the sovereign or the regal functions of the state, which are the primary and inalienable rights of a constitutional
government;
(ii) economic adventures clearly partaking the nature of trade and business, undertaken by it as part of its welfare activities;

(iii) organised activity not stamped with the total indicia of business, yet bearing a resemblance to or being analogous to trade
and business; and
(iv) the residuary organised governmental activity which may not come within the ambit of the aforesaid three categories.87

Of these categories, the Full Bench held that the first and the last categories will not fall within the four corners of the
definition of ‘industry’, while the second and the third would. In this case, the court was concerned with the question as to
whether the activity of the state, with reference to construction, establishment and maintenance of the national and state
highways can be brought within the definition of ‘industry’. The court held that the activity is essentially a governmental
function and is in no way even remotely analogous to trade or business. Hence, it cannot possibly come within the ambit of
an ‘industry’. In Sub-Divisional Inspector of Post, a two-judge Bench of the Supreme Court held that the functions of the
postal department are a part of the sovereign functions of the state and the postal department is, therefore, not an ‘industry’
within the definition of s 2(j) of the Act.88 However, in Bombay Telephone Canteen Employees Assn, dealing with the
question as to whether the telecommunication department of the Government of India is an ‘industry’ within the meaning
of s 2(j), another two judge Bench presided over by the same learned judge, deviated from ‘the dominant nature test’ with
the observation that ‘the consequence is catastrophic and would give a carte blanche power with laissez faire legitimacy,
which was buried fathoms deep under the lethal blow of Art. 14 of the Constitution, which assures to every person, a just,
fair and reasonable procedure before terminating the services of an employee’.89 Both the above decisions rendered in Sub-
Divisional Inspector, and Bombay Telephone Canteen Employees, were overruled by a three-judge Bench in Srinivasan
Rao, in which the court observed that, since the amended definition of an ‘industry’, was not brought into force, the law
stated by it in the Bangalore Water Supply, still held the field. Applying the ‘dominant nature test’, the court observed that,
as a matter of judicial discipline, it was not permissible for it to take a view contrary to that of Bangalore Water Supply. It
is significant to note that consequent to the decision in Bangalore Water Supply, the Parliament did amend the definition of
‘industry’ in 1982. The amended definition however, was sacrificed at the altar of political expediency.90 In HR Thakur, a
single judge of the Bombay High Court held that the telecom factory established by the Government of India, would fall
within the definition of ‘industry’.91

On the question as to whether the irrigation department of a state government is an industry, a two-judge Bench of the
Supreme Court, in Des Raj (supra), by applying ‘the dominant nature test’, held that on the facts found in the case, the
irrigation department clearly came within the ambit of industry. Contrary to this, in K Somasetty, another two-judge Bench

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of the court held that the irrigation department, being a regal function, is not an industry.92 The law laid down by the court
in Des Raj is correct and it is also sustainable on the rationale of the decision in Srinivasa Rao.

Thus in so far as the legal status of ‘irrigation’ department is concerned, we are saddled with two diametrically opposite
decisions given by two coordinate Benches of Supreme Court in Des Raj and Somasetty (supra). A single judge of Bombay
High Court held that that the project of the irrigation department of Maharashtra is an industry.93 The following two cases
decided by Gujarat High Court richly demonstrate the confusion and inconsistency infused by the Supreme Court on the
legal status of ‘irrigation’ department. On the question whether ‘irrigation’ department of Gujarat State is an ‘industry’,
two Benches of Gujarat High Court - one single judge and the other Division Bench - expressed two diametrically opposite
views. In Maniben Viraji, a single judge held that ‘irrigation’ department of the State was an industry,94 while Shethna J
(for self and Dave, J.), held in Deenanji Bidhaji Thakore, that ‘irrigation’ department was not an industry.95Strangely, both
these decisions were delivered by the same High Court on the same day, ie, 9th April 2003. In the latter case, counsel for
respondent-workman drew the attention of the Bench to the apparent conflict between the two decisions rendered by the
Supreme Court in Des Raj and Somasetty (supra). The Division Bench held that irrigation department was not an industry.
A single judge of Rajasthan High Court held that the ‘Women and Child Development’ department - Neem ka Thana - of
the State Government is an industry.1 This is a gross misconception on the part of the learned single judge. Is it possible to
hold that the development of women and children is an economic adventure? Is it possible that a learned judge at the level
of the High Court is so ignorant of the fact that the Constitution declares India as a ‘Welfare State’? By what legal
principles could it be said that social welfare, women and child welfare, fall outside the sovereign functions of the State? A
single judge of AP High Court held that the ‘census’ department of the Government is not an ‘industry’ within the meaning
of s 2(j), and that a temporary employee engaged on census work on a consolidated salary could not seek relief under s 25F
of the Act.2 In Bangalore Turf Club, a Bench of the Supreme Court comprising Katju and Dattu JJ, while holding that the
earlier decision of the Court in Hyderabad Race Club,3 need review by a larger Bench, observed:

The definition of ‘industry’ in the Industrial Disputes Act is very wide as interpreted in the aforesaid decision. We cannot apply the
judgment given under a different Act to a case which is covered by the ESI Act. Under various labour laws different definitions
have been given to the words ‘industry’ or ‘factory’ etc. and we cannot apply the definition in one Act to that in another Act
(unless the statute specifically says so). It is only where the language used in the definition is in pari materia that this may be
possible. ... Hence, we are of the opinion that the decision of this Court in the case of Hyderabad Race Club (supra) should be
reconsidered by a larger Bench. In the meantime, the respondents shall not raise any demand against the appellant-clubs.4

The Agricultural Produce Market Committee, set up under the Karnataka Agricultural Produce Marketing (Regulation)
Act, 1966, is not performing any sovereign functions and hence, is an ‘industry’ under s 2(j). The mere fact that the
employees of the committee are government servants is not crucial, as the true test is the dominant object for which the
functionaries are working.5 While implementing the national malarial eradication programme, the directorate of health
services of the state government cannot be said to be performing sovereign functions, and it satisfies the tests laid down in
Bangalore Water Supply, and hence, it is an ‘industry’ within the meaning of s 2(j).6 The activity carried on by the
Tungabhadra board, Tungabhadra dam, is not a sovereign function. It is a commercial venture like any other corporation or
industry, and falls within the meaning of s 2(j).7 The Uttar Pradesh Jal Nigam is an ‘industry’.8 Public works department of
state government is an ‘industry’.9 Projects undertaken by the irrigation department of the State of Maharashtra fall within
the definition of ‘industry’, for the purpose of s 2(j).10 In MP Kolharkar, the Supreme Court held that the Central Public
Works Department is an industry within the meaning of s 2(j).11

The functions of the public service commission, being unalienable regal functions of the state, which by their nature,
cannot be assigned to private bodies,12 will not fall within the ambit of the definition of industry. Likewise, the functions of
the judicial department of the government, being obviously in the nature of sovereign functions of the state, would not be
an ‘industry’.13 Similarly, relief work undertakings, carried on by the state government, to provide sustenance to persons
affected by natural calamities, being regal functions of the state, will not fall within the ambit of an ‘industry’, mainly
because: (i) it is the primary and inalienable function of the state, to provide livelihood to the persons who are affected by
natural calamities, such as famine, earthquake, epidemic, flood, scarcity, etc; and, (ii) admittedly, the relief work is not a
‘business’ or ‘trade’ and with regard to the undertaking, the activity is not analogous to trade or business, or that it is not a
systematic activity, but is carried out casually, at different places, depending on the calamities in a particular area.14 The
activities of the department of industries, mines and power in the government secretariat, again being a regal function of
the state, would not be an industry.15The activities of the Bombay, Iron and Steel Board, constituted under s 6(1) of the
Maharashtra Mathadi, Hamal & Others, Manual Workers (Regulation of employment and Welfare) Act 1969, has also
been held to be, regal function of the state.16

On the other hand, the activities of the Tamil Nadu Housing Board,17 and those of the public health department of the
government,18 have been held to be non-regal business functions of the state, and therefore, they are industries. The

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activities of the social welfare department of a government,19 or those tourist department of a state,20 are also non-regal and
therefore, are ‘industries’. However, the nature of the actual function and of the pattern of organised activity is decisive.
Therefore, it is for the employer to show by relevant evidence, that the activities in question are not analogous to trade or
business, such as to take such activities out of the purview of industry. Likewise, in Chief Conservator of Forests, it was
held that the activities of the forest department of the state, were not of a sovereign nature and therefore, would fall within
the definition of an industry.21 In Rajendrasinhji Institute, a single judge of Bombay High Court held that the activities of
the Institute involve the co-operation between the managing committee and the employees appointed by it and its activities
are calculated to supply pleasurable utilities to members and others. It could not therefore be said to be performing
sovereign functions, and hence is an industry.22

In striking contrast, in PN Parmar, a Bench of the Supreme Court, comprising Pattanaik and Agrawal JJ, held that the
forest department of a state government would not fall within the ambit of an ‘industry’ under s 2(j) and hence, the non-
compliance with the provisions of s 25F of the IDA would not vitiate the termination of the services of the employees.23
This decision is in direct conflict with the ratio of Chief Conservator of Forests case, wherein the Supreme Court had held
that the work undertaken by the forest department was not a part and parcel of the sovereign functions of the state and as
such, a termination of service, without complying with the provisions of s 25F was illegal. It, therefore, calls for some
analysis. The facts of the case in PN Parmar were identical to those of Chief Conservator of Forests. In both the cases, the
fundamental issue was, whether the work undertaken by the forest department of a state government could be regarded as a
part of the sovereign functions of the state, on which the question of the applicability or otherwise, of the provisions of s
25F rested. In the Chief Conservation of Forests case, the issue was answered in the negative. Once it is ruled that the
functions of the forest department cannot be regarded as a part of the sovereign functions, the conclusion that the activity
falls within the ambit of the definition of an ‘industry’ in s 2(j), is inescapable, as it satisfies the triple-test laid down in
Bangalore Water Supply. As a necessary corollary thereto, the provisions of the IDA apply in full flow to the employees of
the forest department, who answer to the definition of a ‘workman’ in s 2(s) of the Act. Viewed in this perspective, the
decision rendered in the case of Chief Conservator of Forests was right, even though it is possible to question the very
premise on which the apex court proceeded, ie, whether the conservation of forests is or is not a part of the sovereign
functions of the State. Adverting to the case of PN Parmar, the court strangely, observed as follows:

Ordinarily, a department of the government cannot be held to be an industry and rather, it is a part of the sovereign function ...we
find that there has not been an iota of assertion to that effect though; no doubt, it has been contended that the order of dismissal is
vitiated for non-compliance with s 25F of the Act. The state, in its counter-affidavit, on the other hand, refuted the assertion of the
respondent in the writ petition and took the positive stand that the forest department cannot be held to be an industry, so that the
provisions of s 25F of the Act cannot have any application.24

The above observations are stale and, at any rate, are not expected of the highest court of the land. Merely because the state
averred in its counter-affidavit and took a positive stand, would it mean that the court should accept it at its face value,
when the facts disclose something contrary to its submissions? What about the contention of the respondent according to
which, going by the ratio evolved by the very same court, in Chief Conservator of Forests, there was a manifest violation
of s 25(F) on the part of the state government? Once it was found that the facts of both the cases were identical in every
sense of the term, it is baffling that the court adopted a dynamic disposition and applied a different yardstick to the case,
contrary to what was decided just four years earlier. Why should the respondent be required to separately assert the nature
of duty or the job of the establishment, which was an admitted fact falling squarely within the four walls of its earlier
decision in Chief Conservator of Forests, more so, when counsel for the respondents placed his reliance on the said ruling?
As a matter of fact, the single judge and the Division Bench, themselves relied on the ratio of Chief Conservator of
Forests, while coming to the conclusion that the forest department of a state was not a part of its sovereign functions, and
that there was a violation of s 25F, which led to the appeal before the Supreme Court. Could it be said that all these
incidents and admitted facts were inadequate for the learned judges to arrive at a fair and reasonable conclusion, consistent
with the ratio evolved by a co-ordinate Bench of the same court? With great respect, the decision in PN Parmar is wholly
perverse and is violative of the norms of judicial discipline. If the court were of the opinion that Chief Conservator of
Forests was not rightly decided, it should have placed the papers before the Chief Justice, for constituting a larger Bench to
review and lay down the correct law, instead of advancing untenable arguments in support of its own misconceptions. The
dysfunctional effect of this decision can be stated thus: if any judge of a labour court or High Court is confronted with the
dilemma of choosing between Chief Conservator of Forests and PN Parmar, he would be absolutely free to choose either
this or that, as dictated by the tenor of the time, notwithstanding the fact that these decisions represent two extremes on the
same issue, and thereby, dilute the whole judicial process. To illustrate, the Bombay High Court, in Haribhau, held that the
State Forest Department was not an industry under s 2(j).25

Educational Institutions

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The question that whether the activity of running an educational institution would fall within the definition of an
‘industry’, was touched upon, but left undecided by the Supreme Court, in the under-noted cases,26 because it was not
called upon to decide. But, in Corpn of City of Nagpur (supra),27 decided by the same Bench on the same day, ie, 29
January 1960, the court included the education department of the corporation, in the departments held to be falling within
the definition of an ‘industry’. As already stated in the preceding paragraphs, the case of University of Delhi (supra), is not
being discussed as it was conclusively overruled in Bangalore Water Supply. A single judge of the Kerala High Court,28
has observed that the matter has to be considered in the light of the evidence, as to what type of work a teacher does. The
duties which a teacher, in such a school, discharges, has to be proved by adducing the relevant evidence. The Punjab and
Haryana High Court, in Sumer Chand, held that the section of the university in which a carpenter was employed is an
industry.29 The Kerala High Court, in Karthiam, held that despite the excessive commercialisation in the field of education,
the statutory definition of an industry does not permit education to fall in its ambit.30 But a single judge of Allahabad High
Court, in Jagdish Prasad Sinha, held that the essential duty of a teacher in a school, is to impart education to students, and
in view of the ratio of Bangalore Water Supply, there is no justification for taking the view that a teacher is not a
‘workman’, particularly when a school is owned by a company engaged in the sugar and oil manufacturing business.31
Likewise, a single judge of the Madhya Pradesh High Court held that in the context of the law, as laid down by the
Supreme Court, an educational institution will fall within the definition of an ‘industry’ and a clerk employed therein,
would be a workman.32 The Kerala State Science and Technology Museum which provided a service to the community by
stimulating and encouraging scientific literacy among the masses, through its activities, is an industry.33 The Madhya
Pradesh High Court held that the activities of the Jiwaji University will fall within the definition of industry.34

But in these cases, the attention of the court does not appear to have had been drawn to the latest holding of the Supreme
Court in Sundrambal, viz, that even if an educational institution is ‘industry’ as per the ratio of Bangalore Water Supply,
the nature of the work of the teachers teaching in an educational institution, will not fall within the categories of work
enumerated in s 2(s). Taking note of the nature of work done by a teacher, it was held that a ‘teacher’ is not a ‘workman’.35
In Ruth Soren, the Supreme Court held that an ‘establishment’, running an educational institution imparting education, as
defined in the Bihar Shops and Establishment Act 1953, does not carry on a business, trade or profession. Such an activity,
though might be an industry as defined in s 2(j), would not be a profession, trade or business for the purposes of Art.
19(1)(g) of the Constitution, and would not be one falling within the scope of an ‘establishment’, under the Bihar Shops
Act. Therefore, the labour court could have no jurisdiction under s 26(2) of the said Act to interfere with the order
terminating the service of an employee of the establishment.36 A technical teachers training institute, providing technical
training to the candidates admitted to the institute, is an industry.37

In Kamyani Vidya Mandir, one of the two issues was “whether an educational institute for mentally challenged children,
funded by business houses” fell within the definition of industry. Ms Mhatre J, of Bombay High Court surveyed the
decision rendered in Bangalore Water Supply (supra) and observed that: (i) the dominant purpose of hiring employees by
said institute was only to train mentally challenged children and to look after them; (ii) while so imparting training, goods
are manufactured and sold, not with the object of making profit; (iii) that no regular employees were hired by the petitioner
to produce the articles, such as, greeting cards, envelopes, candles, etc; (iv) that the articles which were sold in the stalls set
up by the petitioner during the festive seasons were those made in the process of training the mentally challenged children;
(v) that the articles were made by the children together with the teachers; (vi) there was no evidence to show that the
mentally challenged persons, who were being trained, were paid any money for the products manufactured by them during
the course of training; and (vii) that in these circumstances, it could not be said that there was any employer-employee
relationship between them and the petitioner nor could it be said that there was any systematic activity for the production
of the goods. On this view of the matter, the learned judge had set the order of the labour court aside.38 These divergent
views only go to establish that the seven-Judge Bench decision in Bangalore Water Supply had, far from giving finality to
or clearing the cob-webs that shrouded the definition of ‘industry’ in s 2(j), made the issue even murkier and foggy as can
be seen from the highly divergent views as to the legal status of (a) ‘irrigation’ departments of state governments, (b)
‘forest’ departments, (c) ‘Agricultural’ and ‘Farm’ Corporations, (d) Educational institutions, (e) ‘Telecom’ departments
of the government, and several other activities and undertakings, resulting in judicial chaos and mess of grave magnitude.

Research Institutions

In Ahmedabad Textile IR Assn, the association was established to carry on research with respect to the textile industry,
jointly, for the benefit of its members, by discovery of processes of manufacture, with a view to secure greater efficiency,
rationalisation and reduction of cost. The activity, therefore, was held to be an ‘industry’.39 In Physical Research
Laboratory, the court held that Physical Research Laboratory was not ‘industry’ because it is not engaged in an activity
which can be called a business, trade or manufacture, nor is it an undertaking, analogous to business or trade. It is not
rendering any services to others. It is engaged in pure research in space science.40 A single judge of the Jharkhand High
Court took a different view in Central Rainfed URR Institute, and held that the institute was not engaged in a commercial

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or industrial activity, nor was there anything on record to suggest any economic venture on the part of the workmen. It had
no object to produce and distribute any service to satisfy the needs of the consumer community. Thus, the institute would
not fall within the ambit of an ‘industry’, as defined in s 2(j), as it lacked all the elements that could to bring it within the
purview of the definition.41 This decision runs counter to the ratio of Bangalore Water Supply.

Municipal Corporations

A municipal corporation is a public corporation and primarily, a non-trading one, since it has mostly governmental
functions to perform, within a specified territory. It is indeed a state in miniature.42 The state may assume ‘non-regal’
functions by means of its legislative power and when such functions are assumed by the state, it acts simply as a huge
corporation, with its legislation as the charter and its actions under the legislation, so far as they are not regal executions of
the law, are merely analogous to that of a private company, similarly authorised.43 Municipal corporations and local bodies
too, therefore, have dual functions, ie, regal and non-regal. If such bodies indulge in trading or business or have to assume
the calling of employers, they will be employers whether they carry on their business commercially, for the purpose of
gain or profit, or not. The Act, therefore, contemplates cases of industrial disputes where the government or a local body or
a public utility service, may be the employer. In other words, where the government and local authorities act as individuals
do, the policy of the Act is to put the government and the local authorities at par with private individuals. But local
authorities cannot be regarded as industries unless they produce material goods or render material services and do not share
by delegation, in governmental function or functions incidental thereto.44 In such a non-regal character, a municipal
corporation is a mere entity or a juristic person and it stands for the community, in the administration of its local affairs,
wholly beyond the sphere of the public purposes for which governmental powers are conferred upon it.45The definition of
an ‘employer’ in s 2(g) of the Act, also indicates that a local authority may become an employer if it carries on an
‘industry’. This means that a municipality, if it indulges in an activity which may properly, be described as an ‘industry’,
may be involved in an ‘industrial dispute’. It would, therefore, be incongruous and self-contradictory to exempt wholly, the
activities undertaken by the government and municipal corporations, in the interest of the socio-economic progress of the
country, as beneficial measures, from the operation of the Act, which itself is, in substance, a very important, beneficial
measure.46

In Banerji, the court observed that though municipal activity per se cannot be regarded as a ‘business’ or ‘trade’, it would
nevertheless fall within the expression ‘undertaking’ appearing in the definition. 47 This decision was next followed in
Baroda Municipality.48 The ratio of these two decisions is that it is not necessary that the activity must be carried on by
private enterprise, or must be commercial, or must result in profit. It is sufficient if it is analogous to the carrying on of a
trade or ‘business’ and it involves co-operation between the employers and the employees. This result was reached by
extending the meaning of the word ‘undertaking’ to cover adventures not strictly ‘trades’ or ‘businesses’, but objects very
similar. Later, in Corpn of Nagpur, the court had to consider whether a municipal corporation would be an ‘industry’
within the meaning of s 2(14) of the CP and Berar Industrial Disputes Settlement Act 1947. Justice Subba Rao analysed
the activities undertaken by a municipal corporation in greater detail, and evolved the following cardinal principles:

(i) The regal functions described as primary and inalienable functions of the State, though statutorily delegated to a
corporation, are necessarily excluded from the purview of the definition. Such regal functions shall be confined to
legislative power, administration of law and judicial power.
(ii) If a service rendered by an individual or a private person would be an industry, it would equally be so in the hands of a
corporation.
(iii) If a service rendered by a corporation is an industry, the employees in the departments connected with the service,
whether financial, administrative or executive, would be entitled to the benefits of the Act.
(iv) If a department of a municipality discharges many functions, some pertaining to an industry as defined in the Act, and
other, non-industrial activities, the predominant functions of the department shall be the criterion for the purposes of the
Act. 49

The question as to whether the octroi department (assessment and levying of octroi) is an ‘industry’ or not, was left
undecided in the absence of any appeal against that part of the award of the tribunal.50 The Punjab and Haryana High
Court,51 took the view that the fire brigade service, maintained by a municipal committee, is an industry, while the Bombay
High Court, held that the fire brigade service, maintained by a municipal corporation is not an industry.52 The running of a
dispensary, sanitary and conservancy activities and that of administrative departments, looking after and connected with
other departments, was also held to fall within the definition of an industry.53 The corporation’s activity of storing and
distributing water, to satisfy human wants, is a systematic activity, falling within the definition of industry.54 The High
Court of Patna held that ‘Town Development Authority’ is an ‘industry’.55

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Hospitals

In Hospital Mazdoor Sabha the Supreme Court adopted the reasoning and the tests laid down by Bombay High Court and
held that the activity of running hospitals was not a regal activity of the State, and hence, it would fall within the definition
of an industry inasmuch as the activity would be an industry, if it were run by private citizens. The character of the activity
was taken as the determinative test. The question as to who conducts the activity, was considered irrelevant. Likewise, the
capital investment and the profit motive were also considered unessential.56 Commenting on the observations of
Hidayatullah CJI in Safdarjung, Iyer J, in Bangalore Water Supply, held that he could not possibly agree that running a
hospital, which is a welfare activity and not a sovereign function, could not be an industry. Hospital facilities, research
products and training services are ‘services’, and hence, ‘industries’ and an absence of profit or the performance of
functions of training and research, would not take the institution out of the scope of industry.57 Accordingly, the learned
judge held that Safdarjung was wrong, and that Hospital Mazdoor Sabha was right. In Indraprastha Medical Corpn, the
Delhi High Court held that a hospital, being an ‘industry’ within the meaning of s 2(j), could not be excluded from the
purview of the Industrial Employment (Standing Orders) Act 1948 and hence, it was required to adopt the model Standing
Orders or submit its own Standing Orders for certification.58

Charitable and Humanitarian Institutions

The question, whether the institutions engaged in charitable or humanitarian activities, would fall within the definition of
an industry has also engaged the attention of the courts. In Bangalore Water Supply, the Supreme Court posed the
question: ‘Can charity be an industry?’, and answered it by stating:

This paradox can be unlocked only by examining the nature of the activity of charity, for there are charities and charities ...
Bedrocked on the ground norms, we must analyse the elements that are charitable economic enterprises, established and
maintained for satisfying the human wants.59

In Madras Pinjrapole, the Madras High Court took into notice the amened objects of the society, which include receiving
cows from owners for a fee; the starting a dairy farm was meant for supporting infirm cows, bullocks and horses;
acquisition of stud-bulls for cattle breeding and sale of milk, etc. In the circumstances, it was held that the activity of the
Pinjrapole did fall within the definition of an industry.60 Likewise, in Bombay Pinjrapole, in view of the immovable
properties held, the collection and sale of milk, the activities of the Pinjrapole were held to fall within the definition of an
industry.61 The UP Scheduled Caste FDC, set up for organising and working in various ways for the upliftment of the
downtrodden, and to help them financially, for various purposes, including for starting industries, and organising and
helping them in getting technical training, is an industry, since the activities are systematic and carried on with the
cooperation of the employees.62 In Bangalore Water Supply Iyer J, agreed with the decision that Bombay Pinjrapole was
an industry. Iyer J stated three categories of charitable institutions. The first is where the enterprise, like any other, yields
profits, but they are siphoned off for altruistic objects. The second is one where the institution makes no profit, but hires
the services of employees as in other like businesses, but the goods and services, which are the output of that activity, are
made available at low or no costs, to the indigent needy who are priced out of the market. The third is, where the
establishment is orientated on a humane mission, which is fulfilled by men who work, not because they are paid wages, but
because they share the passion for the cause and derive job-satisfaction from their contribution. He said that the first two
categories would fall within the definition of an industry, while the third would not. The manner in which the activity in
question is organised or arranged, the condition of the co-operation between the employer and the employee necessary for
its success and objects, to render the material service to the community, is the pivotal test to identify whether the activity is
an industry or not. The classification of charitable institutions, undertaken by Iyer J and the manner of distinguishing the
institutions inter se, for the purpose of inclusion and exclusion from the coverage offered by the definition of s 2(j),
deserves some analysis. Iyer J held that stray wage earning employees do not shape the soul of an institution into an
industry and hence, the third category is not an industry.

This ruling raises the following questions: Applying the test of predominant activity, and not of numerical strength, what
was the justification for excluding the third category? Does the definition of, ‘workman’ exclude stray wage earners from
its purview? Is it one of the objects of the Act to price them out of its protective cover? How does this ruling align itself
with the safeguards provided under ss 2(A) & 11 (A) of the IDA? And, finally, what kind of rationale underlies this
judgment? Iyer J equated charity with trade and business, which is prima facie, a grave misconception on his part. The
core attribute of any trade and business is the exchange of goods and services, for goods and services or for money, which
necessarily presupposes a give-and-take, in which both the transacting parties give to, and at the same time take from, the
other, something tangible. On the contrary, the concept of charity rests on the principle that the donor does not expect
anything in return from the recipient and there can be nothing of the sort of a ‘barter’ or ‘exchange’ in the case of charity.
The essence of the former is a two-way relationship of vendor-vendee or supplier-customer, whereas the latter is a one-way

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relationship of donor-recipient, with nothing flowing back from the recipient in the form of ‘consideration’, not even
gratitude. If a charitable institution organises its activities on professional lines, it could be with a view to ensure a proper
distribution of the benefits and to make the functionaries accountable for their actions. Does the mere fact that a charitable
institution streamlines its administration, transform it into an activity analogous to trade or business? It is disappointing
that, despite a clear mandate, the Bench took it upon itself to lay down the correct law. The entire line of reasoning of the
majority judges proceeded on emotive lines, extending the iron-clad triple-test to charitable institutions in a straight-
jacketed fashion, without appreciating the fines, yet substantial aspects that distinguish various activities.

Going by the maxim nemo dat quid non habet (no one can give, who does not possess), charity does not simply flow from
orientation or passion as averred by Iyer J. In order that a positive orientation translates itself into a tangible help to the
indigent needy, it requires something more concrete, whether that ‘something’ comes out of the surplus generated by an
enterprise or the contributions of a handful of people. Does the sole fact, that a charitable institution is funded by an
external agency, render the activity any less charitable? What role could the source of finance possibly play in determining
the nature and the end-product of the activity, ie, taking care of the material needs of the sick, infirm and disabled, who
cannot help themselves? The same logic applies to Pinjrapoles, which were also brought into the category of industries by
reasoning of Iyer J. Even applying the rule of noscitur a sociis, which Iyer J so vehemently pressed into service, by holding
that the word ‘undertaking’ must be read down to conform to the restrictive characteristic shared by the society of words
before and after (at p 362), the ‘undertaking’ of a charity clearly falls outside the definition, for the simple reason that it
does not share any of the characteristics of the words preceding or succeeding it, ie, ‘trade’, ‘business’, and
‘manufacturing’. Regrettably, the judicial contradictions disclosed in the Bangalore Water Supply case cast their shadow
on various High Courts, as could be seen from the decision rendered by a single judge of Bombay High Court in Shri
Devadeveshwar, where it was held, that a charitable trust, registered under the Bombay Public Trusts Act 1950, which was
maintaining four temples, getting donations from well wishers, providing low cost houses for poor, maintaining them and
employing about 40 workmen, was an industry within the meaning of s 2(j).63 There can be no doubt that the Bangalore
Water Supply case was wrongly decided inter alia, insofar as it related to charitable institutions.

Religious and Spiritual Institutions

In many foundations, centers, monasteries, holy orders and ashrams, in the east and in the west, spiritual fascination pulls
men and women into the precincts and they work tirelessly in the pursuit of their spiritual aspirations. Such people are not
‘workmen’ and such institutions are not ‘industries’, despite some menials and some professionals being hired in a vast
complex. The test of the predominant character of the institution and the nature of the relations, resulting in the production
of goods and services, are to be looked at. In such cases, stray wage-earning employees would not change the soul of an
institution into an industry. The production and distribution of goods and services, calculated to satisfy human wants and
wishes (not spiritual or religious, but inclusive of material things or services geared to celestial bliss, like making on a
large scale, prasad or food), prima facie, would be an industry.64 The Orissa High Court, held that the duties performed by
the employees of the Harihar Bahinipati Temple, such as maintenance of peace and order and discipline amongst the
pilgrims inside the Sri Jagannath Temple and to prepare sweets for offering to the deities in the temple, were not secular in
nature, but were connected with the seva-pooja of the temple, and as such being of a spiritual nature, they did not fall
within the ambit of an industry.65

Similarly, the Gujarat High Court, in Panchasara Jain Derasar, held that offerings of certain articles to the deity, is not a
sale of such articles. If, assuming that certain articles are sold to persons who come for ‘darshan’, there is no material to
show that they are sold for profit, in view of the nature of the activities carried on in the temple, it cannot be held that the
temple is an industry.66 After the decision in Bangalore Water Supply, this decision does not hold good. A single judge of
the Bombay High Court held that the activities of the Shri Cutchi Visa Oswal Derawasi Jain Mahajan Trust, being of a
commercial nature, despite the aims and objects of the trust, fell within the ambit of the expression ‘undertaking’, as used
in the definition of an ‘industry’.67 Likewise, in Baikuntha Nath Debasthan, on the facts and circumstances of the case, a
single judge of the Calcutta High Court held that the activities of the temple trust fell within the definition of an industry.68
The Himachal Pradesh High Court held that the Baba Balak Nath Temple Trust is an industry in view of the nature of its
work and on applying the dominant on nature test.69 The Madras High Court held that the Arulmigu Subramaniasamy
Devasthanam is not an industry within the purview of s 2(j) of theID Act.70 The Shiromani GP Committee performs purely
religious functions, and hence is not an industry.71

Private and Domestic Activities

In Bangalore Water Supply, though the two judges, out of the seven, categorically discarded the principle of noscitur a
sociis and ejusdem generis while interpreting the expressions used in the definition of an industry, in the leading judgment,
while holding that domestic employment cannot fall within the scope of an industry, Krishna Iyer J admitted that the
meaning of the words of the widest amplitude, used in the two limbs of the definition ‘cannot be magnified to over-reach
itself and emphasized:

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The literal latitude of the words in the definition cannot be allowed a grotesquely inflationary play, but must be read down to
accord with the broad industrial sense of the nation’s economic community, of which labour is an integral part. To bend beyond
credible limits is to break with the facts, unless language leaves no option.

In this view of law, the learned judge stated the law relating to domestic and private employment, in the following words:

The image of an industry or even a quasi-industry, is one of a plurality of workmen, not an isolated or single little assistant or
attendant. The latter category is more or less like a personal avocation for livelihood, taking some paid or part-time assistance from
another. The whole purpose of the Industrial Disputes Act is to focus on the resolution of industrial disputes and the regulation of
industrial relations and not to meddle with every little carpenter in a village or blacksmith in a town, who sits with his son or
assistant to work for the customers who trek in. The ordinary spectacle of a cobbler and his assistant or a cycle repairer with a
helper we come across in the pavements of cities and towns, repels the idea of ‘industry’ and industrial dispute. For this reason,
which applies along the line to small professions, petty handicraftsmen, domestic servants and the like, the solicitor or doctor or
rural engineer, even like the butcher, the baker and the candle-stick maker, with an assistant or without, they do not fall within the
definition of industry. 72

The history of industrial disputes and its legislation recognises the basic concept that the activity should be an organised
one and not that which pertains to private or personal employment.73 The activity should, therefore, be predominantly
carried on by the employment of an organised labour force, for the production or distribution of goods, or for rendering
material services to the community at large or a part of such community.74 Such activity should involve the co-operation
between the employer and the employees, for the object of satisfying material human needs, and not for oneself or for
pleasure.75 In other words, where the services are meant for the employers themselves, for their own pleasure, and the
material goods are for their own consumption, the activity cannot be an industry.76 Hence, an activity pertaining to, or in
relation to private and personal employment, has to be excluded from the definition of an industry.77

Domestic employment cannot be regarded as being in the course of an industry,78because the employment of a domestic
servant has no resemblance to a trade, business or industry. Domestic servants have a calling or an occupation, but it
cannot be said that their employment is an industry. Nor are the private householders, employers who carry on an
‘industry’ as contemplated by the Act. Further, there is no co-operation between capital and labour, which is necessary to
constitute an industry. The domestic servant renders services purely of a personal nature.79 A building let out on rent by a
Palace Administration Board (a body corporate), which administers and manages the estate of a royal family, for the
benefit of the junior members of the family, the building being constructed out of the surplus income, was held not to be an
‘undertaking’ within the meaning of s 2(j) of the Act.80 But the question, whether the work of an employee is of a domestic
nature or of an industrial nature, will depend upon the facts of each case.81 or instance, in Hanshree Apartment
Owners’Assn, the Calcutta High Court held that the services rendered by the employees of an apartment owners’
association, who were engaged for the purposes of maintaining and keeping the common areas of the entire
conglomeration of apartments, would fall within the definition of an industry, as in such a situation, the concept of
domesticity of such employee vanishes.82 In Som Vihar Apartment Owners, the issue before the Supreme Court was:
whether the persons engaged by the society, which was formed mainly to maintain cleanliness in the apartments and to
render certain other services personally to the apartment owners themselves could be characterized as workmen and
whether the activity itself could be held to be an ‘industry’? Negating the contentions, a Bench comprising Rajendra Babu
and Phukan JJ Observed:

Indeed this Court in Rajappa’s case (supra) noticed the distinction between such classes of workmen as domestic servants who
render personal service to their masters from those covered by the definition 2(J) of the Industrial Disputes Act. It is made clear if
literally interpreted these words are of very wide amplitude and it cannot be suggested that in its sweep it is intended to include
service however rendered in whatsoever capacity and for whatsoever reason.In that context it was said that it should not be
understood that all services and callings would come within the purview of the definition; service rendered by a domestic servant
purely in a personal or domestic matter or even in a casual way would fall outside the definition. That is how this Court dealt with
this aspect of the matter. The whole purpose of the Industrial Disputes Act is to focus on resolution of industrial disputes and the
regulation will not meddle with every little carpenter or a blacksmith, a cobbler or a cycle repairer who come outside the idea of
industry and Industrial dispute. This rationale which applies all along the line to small professions like that of domestic servants
would apply to those who are engaged by a group of flat owners for rendering personal services even if that group is not
amorphous but crystallised into an Association or a society. The decision in Rajappa’s case if correctly understood is not an
authority for the proposition that domestic servants are also to be treated to be workmen even when they carry on work in respect
of one or many masters. It is clear when personal services are rendered to the members of a society and that society is constituted

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only for the purposes of those members to engage the services of such employees, we do not think its activity should be treated as
an industry nor the workmen. In this view of the matter so far as the appellant is concerned it must be held not to be “industry”.
Therefore, the award made by the Tribunal cannot be sustained. The same shall stand set aside.83

Following the above ruling, another Bench of Supreme Court comprising Patil and Dharmadhikari, JJ, held that the
respondent-Housing Society was not an ‘industry’ nor could it be said that the appellants employed therein were
‘workmen’.84

Professions

The word ‘professional’ has not been defined in the Act. But the sense of the word can best be understood in the words of
Scrutton LJ, in Commr of Inland Revenue.

...It seems to me as at present advised, that a ‘profession’ in the present use of language, involves the idea of an occupation
requiring either a purely intellectual skill, or of a manual skill controlled, as in painting and sculpture, or surgery, by the
intellectual skill of the operator, as distinguished from an occupation which is substantially the production or sale or arrangements
for the production or sale of commodities. The line of demarcation may vary from time to time. The word ‘profession’ used to be
confined to the three learned professions, the Church, Medicine and Law. It has now, I think, a wider meaning. 85

The three learned professions, viz, the Church, Medicine and Law, cannot be the only professions for all times. Times
change. The sphere of human activity and endeavour is constantly expanding, giving rise to problems which require
specialisation and expertise. In the course of the last two centuries, trade, commerce and industry have vastly developed,
bringing in its wake, problems which have to be tackled by experts. The old crystallised learned profession, viz, the
Church, medicine and law were, by the very nature of their training, unable to solve the problems of the new developments
in trade, commerce and industry. The new developments in trade, commerce and industry, therefore, inter alia, threw up a
team of experts in the shape of consultant engineers, architects, chartered accountants and journalists, etc, having
specialised knowledge in their field.86 In other words, the essential idea of a ‘learned profession’, which cannot, in the
modern context, be merely limited to the original categories, is that it is the pursuit of an avocation or occupation,
substantially involving intellect. There is a complementary feature to this, that the services rendered by a ‘learned
profession’ are primarily characterised by an equipment of learning, skill or judgment, acquired through intellectual means.
So long as these criteria are fulfilled, such a profession is a ‘learned profession’. In other words, in these liberal
professions, the individual activity is characterised by personal skill and intelligence and is dependent upon personal study,
character and integrity. These qualities, displayed by the practitioners of these liberal professions, inspire confidence in
persons approaching them for advice or guidance. But in each case, the person who approaches a professional person,
chooses him according to his conception of the skill, intelligence and integrity of the person. Since such a person
approaches in entire confidence, the professional person has a corresponding obligation not to betray the confidence, and
advise his client as best as he can.87 ‘A profession ordinarily, is an occupation requiring intellectual skill, often coupled
with manual skill. Thus, a teacher uses, purely intellectual skill, while a painter uses both’.88 In Federated Municipal and
Shire Council Employees’ Union, Isaacs and Rich JJ, speaking for the Australian High Court of Appeal, observed:

industrial disputes occur when, in relation to operations in which capital and labour are contributed, in co-operation, for the
satisfaction of human wants or desires, those engaged in the co-operation dispute as to the basis to be observed, by the parties
engaged, respecting either a share of the product or any other terms and conditions of their co-operation. It excludes,...the legal and
the medical professions, because they are not carried on in any intelligible sense, by the co-operation of capital and labour and do
not come within the sphere of industrialism.89

In Bangalore Water Supply, Krishna Iyer J pointed out that:

the halo conjured up in the Solicitor’s case, ..., hardly serves to ‘de-industrialise’ the professions. After all, it is not infra dig for
lawyers, doctors, engineers, architects, auditors, company secretaries or other professionals, to regard themselves as Workers in
their own sphere or employers or suppliers of specialised services to society. 90

In view of the infrastructures of the offices or the clinics of the professional persons, the court observed that:

the conclusion is inevitable that contribution to the success of the institution—every professional unit has an institutional good-will

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and reputation—comes not merely from the professional or the specialist, but from all those whose excellence in their respective
arts, makes for the total proficiency. We have, therefore, no doubt that the claim for exclusion on the score of ‘liberal profession’ is
unwarranted from a functional or definitional angle.

He further observed that if the professions flow out of the scope of industry, flood-gates of exemption from the obligations
under the Act will be opened. The court therefore, over-ruled the decision in Solicitors’ case. But it hastened to add that a
small category, perhaps large in numbers, in the Muffusil, may not squarely fall within the definition of an industry. A
single lawyer, a rural medical practitioner or an urban doctor with a little assistant and/or a menial servant, may ply a
profession, but may not be said to be running an industry. That is not because the employee does not make a contribution,
nor because the profession is too high to be classified as a trade or an industry with its commercial connotations, but
because there is nothing like an organised labour in such employment. In his separate judgment, Chandrachud CJI also
observed that he found it difficult to infer from the language of the definition that ‘the legislature could not have intended
to bring a ‘liberal profession’ like that of an attorney, within the ambit of the definition of an industry’. And referring to
National Union of Commercial Employees, he pointed out that the refinements of Law therein, exempting the liberal
professions from the scope of industry, are not warranted by the words of the definition, apart from the consideration that
in practice, they make the application of the definition to concrete cases dependent upon a factual assessment so highly
subjective, as to lead to confusion and uncertainty in the understanding of the true legal position. He, however, observed
that:

The unhappy state of affairs in which the law is marooned, will continue to baffle the skilled professional and his employees alike,
as also the judge, who has to perform the unenviable task of sitting in judgment over the directness of the cooperation between the
employer and the employees, until such time as the legislature decides to manifest its intention by the use of clear and indubitable
language.

He suggested that the Legislature might find a plausible case for exempting the learned and liberal professions of Lawyers,
solicitors, doctors, engineers, chartered accountants and the like, from the operation of industrial laws. But until that
happens, he considered that in the present state of law, it is difficult by judicial interpretation, to create exemptions in
favour of any particular class.91 A sports club run by a company, with the object of organising, promoting and affording
facilities for indoor and outdoor games, athletics, recreation, social meetings, etc, satisfies the tests laid down in Bangalore
Water Supply and hence, is an industry.92 Some of the liberal professions are dealt with under the following topics:

Medical

Though in the light of the decision in Federated Municipal and Shire Council Employees Union, and the decision of the
Supreme Court in National Union of Commercial Employees, medical profession would not fall within the definition of an
industry. The question was not free from doubt though, since there was no direct case dealing with the medical profession.
In Safdarjung, with a view to decide the cases under consideration on their own merits, Hidayatullah CJI observed that:

... if a hospital, nursing home or dispensary is run as a business, in a commercial way, there may be found elements of industry
there. Then, the hospital is more than a place where persons can get treated for their ailment. It becomes a business. 93

In Bangalore Water Supply, over-ruling its decision in National Union of Commercial Employees, the court has now
unequivocally said that liberal professions, including the medical profession, do not qualify for exemption from the ambit
of industry.94

Legal

In National Union of Commercial Employees, the Supreme Court held that a firm of solicitors is not an industry. It also
repelled the further contention that an organisation of professional services, in an institutionalised manner, rendering
organised services, depending upon the co-operation of the employers and the employees, engaged by a firm doing
different categories of work, would also not make it an industry in view of the nature of the services rendered by the work
of the employers.95 This case, having been over-ruled by the court in Bangalore Water Supply, the offices of the
practitioners of the legal profession, like those of solicitors or advocates, would fall within the definition of an industry if
they fulfil the triple test of: (a) systematic activity; (b) being organised by co-operation between the employers and the
employees; and (c) producing or distributing goods and services calculated to satisfy human wants and wishes. The only
exception indicated is where a single lawyer may be plying his profession with a little assistant or a menial servant,

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because in such an employment, there would be nothing like an organised labour.

Chartered Accountants

In Rabindra Nath Sen, a single judge of that High Court held that a chartered accountant, doing audit work, unassisted by
stenographers, personal clerks or menial servants, that is to say, doing the entire auditing work, from the examination of
the accounts to the making of the report, all by himself, with only such subsidiary and incidental help as may be rendered
by his stenographers, typists, personal clerks and servants, may not be carrying on an ‘industry’, but, if a chartered
accountant carries on some auditing work in a magnified scale, with more clients than he can manage himself, and he is
perforce compelled to have a division of labour, his clerks doing the examination of the accounts and he himself drawing
up the audit reports, on the result of such examination, it might not be said that this type of co-operation is not an industry,
as it could cannot be said that such a report was his individualistic production, having no connection with the labour put in
by his employees. It was also observed that the work of a chartered accountant was different from that of a solicitor, and
therefore, the ratio of National Union of Commercial Employees was not applicable to the case of a chartered accountant.96
But another single judge of same High Court in Ramakrishna Ayyar, followed the holding in National Union of
Commercial Employees and on an analogy of the work of a solicitors firm, held that the aid or services which a chartered
accountant might obtain from an audit clerk, or any clerk was by no means essential or indispensable to the practice of his
profession. It is quite possible for a chartered accountant to practise his profession, unaided by the services of an audit
clerk or any other clerk. That being the position, the test of an essential co-operation between the employer and the
employee is entirely absent in the case of an undertaking of a chartered accountant. Applying the other test, namely, that of
a co-operation between the capital and labour, to the facts of the case, the court further held that there was no such
cooperation, as the only capital of the chartered accountant is his professional qualification, skill, training and reputation
and there was, therefore, no co-operation between capital and labour.1

However, the court did not deal with the second part of the Raijndra Nath Sen’s case, as it distinguished that case on facts.
In this case, the evidence showed that the chartered accountants’ firm was carrying on its business without the help or co-
operation of any audit clerk at all and therefore, the co-operation between a chartered accountant and his audit clerks and
other clerks, was by no means of an essential and indispensable character, whereas, in Rabindra Nath Sen’s case, there was
a clear evidence of co-operation between the audit clerks and their employers, namely, the chartered accountants, and it
was for that reason, that it was held that the business carried on by the firm was an industry. The second part of the
decision of the single judge, in Rabindra Nath Sen’s case, was inconsistent with the ratio of the decisions in National
Union of Commercial Employees and Madras Gymkhana cases. This view was also dissented from by the Kerala, Madras
and Bombay High Courts. In TK Menon and Co, the Kerala High Court held that if the work of an individual chartered
accountant, in case the entire work is done by him, is not an industry, the fact that in view of the volume of the work he has
secured, he would have to maintain an employee, cannot make it an industry.2 This view of the Kerala High Court was
followed by the Madras High Court, in Fraser & Ross.3 And a similar view has been taken by the Bombay High Court in
NE Merchant.4 But now, the decision in National Union of Commercial Employees having itself been over-ruled by the
Supreme Court, the offices and activities of chartered accountants would fall within the definition of industry, unless
excepted by the legislature. In Bangalore Water Supply, Iyer J rejected the test of ‘direct and essential nexus’ laid down in
the Solicitors’ case (supra), and held:

...a solicitor’s firm or a lawyer’s firm becomes successful not merely by the talent of a single lawyer, but by the co-operative
operations of several specialists, juniors and seniors. Likewise, the ancillary services of competent stenographers, para-legal
supportive services are equally important. The same test applies to other professions...We have, therefore, no doubt that the claim
for exclusion on the score of liberal professions is unwarranted, from a functional or definitional angle. The floodgates of
exemption from the obligation under the Act will be opened if professions flow out of its scope. The result of this discussion is that
the Solicitors’ case is wrongly decided and must, therefore, be overruled.5

The above reasoning of Iyer J is unassailable. But, having been eloquent about the employment relationship and the co-
operation needed between the parties, Iyer J proceeded to draw a further distinction between solicitors employing a
substantial number of employees and those operating with a skeleton staff. He went on to observe:

A single lawyer, a rural medical practitioner or an urban doctor, with a little assistant and/or a menial servant, may ply a profession
but may not be said to run an industry...The image of an industry or even a quasi-industry is one of a plurality of workmen, not an
isolated or single little assistant or attendant.6

The above observation raises some interesting points of analysis in view of the earlier judgment of Iyer J. The phraseology
of s 2(j), which includes business and trade, leaves no option than to take the single shop into its fold, regardless of the

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number of Workers employed therein. Secondly, once it is conceded that it is the nature of the activity that determines
whether it is an industry or not, within the meaning of the Act, then the number of employees engaged therein becomes
irrelevant in the light of the fact that s 2(j), as it stood then and as it stands now, does not prescribe the minimum number
of workmen as one of the criteria in determining whether a particular activity is industry or not. Thirdly, is it possible to
reconcile the above line of reasoning with the critical comments he made against the decisions in Solicitors and
Safdarjung? Strangely, Iyer J seems to have adopted the concept of ‘arbitrary differentiation’-not on the basis of the nature
of activity-but on the numerical strength of the persons employed. This distinction drawn by him, between solicitors’ firms
or medical units, engaging one or two Workers and others engaging a higher number of Workers, seems to transcend the
scope of the definition of industry.

In this connection, it is pertinent to note that he overruled Solicitors on the sole ground that the employer-employee
cooperation need not be ‘direct and essential’ in order to make it an ‘industry’. Once the element of ‘direct and essential
nexus’ stands eliminated from the scene as being irrelevant, what remains for inquiry is whether the profession conforms
to the triple-test or not, and nothing more. If the answer is in the affirmative, then the activity has to fall within the range of
the definition. There is no question of any further classification on the basis of numerical strength. Is it not a hitherto
unknown test? Where exactly should it be placed in the triple-test matrix devised by the learned judge? If the same logic is
extended to, say, shops and commercial establishments, then those units engaging ‘one single little assistant’ can rightfully
claim exemption from the terms ‘business’ and ‘trade’, appearing in the definition. This part of the ruling of Iyer J requires
more analysis due to the contradictions that seem to arise therefrom.

Architects

The decision of the Supreme Court in Bangalore Water Supply has left no doubt that the offices and activities of architects,
if they answer the triple tests laid down therein, would fall within the ambit of industry.

Agriculture

‘Agriculture’ or ‘land’ are the exclusive fields of the state legislature.7 The Parliament, therefore, has no power to legislate
with respect to ‘agriculture’ or ‘land’ but the Parliament has the concurrent power with the state to legislate with respect to
‘industrial and labour disputes’,8 as well as the ‘welfare of labour’.9The Parliament is, therefore, competent to legislate
with respect to labour disputes, even if such legislation affects the labour employed in ‘agriculture’ or ‘agricultural
operations’. In the Australian Act, ‘agriculture’ has specifically been excluded from the definition of industry in s 4, on
which our definition is based. On the other hand, in the Bombay Industrial Relations Act 1946, ‘agriculture’ and
‘agricultural operations’ have been specifically included in s 3(9) in the definition of ‘industry’. But in the Industrial
Disputes Act 1947, ‘agriculture’ has neither been included nor excluded. The Madras High Court, however, held that the
State Farm Corporation of India, which is engaged in agricultural operations, is an industry in view of the fact that s 2(j),
as amended in 1982 by which ‘agriculture’ was sought to be excluded from the definition, has not been given effect to.10 A
single judge of Delhi High Court held that Agricultural Marketing Board is an industry.11 In striking contrast, the Delhi
High Court in Baljeet Singh, held that State Farm Corporation was ‘industry’, as it was engaged in the production of high
quality seeds. It was decided in an earlier case in which the petitioner was a party, though ex parte, that it was not an
industry as the predominant purpose of the corporation was ‘agricultural’ in nature. Sikri J, held that being so, he was
barred by the principle of res judicata to plead that the said corporation was an industry.12 It is important to note, though
with dismay, that these two decisions of two High Courts manifest the two diametrically opposite views on the same issue.

In Harinagar Cane Farm, the court left the question, whether all agriculture and operations connected with it are included
within the definition of industry or not, undecided. But on the facts of the case, the activities of the two companies
registered under the Indian Companies Act, who were engaged in ‘agricultural operations’, ie, in one case, the production
of sugarcane, wheat, paddy and other articles for sale in the market, to the consumers or to wholesale dealers; and in the
other case, of producing sugarcane for use in its sugar factories, were held to be falling within the definition of industry,
because the companies had invested capital for carrying on their ‘agricultural operations’, for the purpose of making profits
and the workmen employed by them in their respective operations, contributed to the production of agricultural
commodities, which brought in profit to the companies and the ‘agricultural operations’ in question were carried on by the
companies like any other ‘trade’ or ‘business’. However, the court made it clear that agriculture cannot be called an
industry under all circumstances.13 The Orissa High Court held that ‘unless agriculture is adopted as a business or calling,
the operation ... cannot partake the character of industry’.14 Now, after the decision of the Supreme Court in Bangalore
Water Supply, any activity connected with ‘agriculture’ or ‘agricultural operations’, affecting ‘industrial and labour
disputes’ or ‘welfare of labour’, might fall within the ambit of industry, if it satisfies the triple test laid down therein.

Clubs

The Calcutta High Court,15 took the view that incorporated companies, running clubs for profit and business, would fall

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within the definition of industry. He further made obiter observations that even a proprietary members’ club would be an
industry. The decision of Supreme Court in Madras Gymkhana Club, to the effect that it was not an industry on the ground
that the activity of the club did not fall within the expressions ‘trade’, ‘business’, ‘manufacture’ or ‘calling’ of the
members or its managing committee, was rejected and overruled in Bangalore Water Supply, hence the said decision is no
longer a good law.16 The same is the case with Cricket Club of India,17 In Bangalore Water Supply, while over-ruling
Madras Gymkhana, etc., Iyer J, proceeded to observe:

if a club or other like collectivity, has a basic and dominant self-service mechanism, a modicum of employees at the periphery will
not metamorphose it into a conventional club, whose verve and virtue are taken care of by paid staff, and the members’ role is to
enjoy.

For instance, the small man’s Nehru Club, Gandhi Granthasala, Anna Manram, Netaji Youth Centre, Brother Music Club,
Muslim Sports Club and like organs, often named after national or provincial heroes and manned by members themselves,
as contrasted with the upper bracket’s Gymkhana Club, Cosmopolitan Club, Cricket Club of India, National Sports Club of
India, whose badge is pleasure paid for and provided through skilled or semi-skilled catering staff, might not fall within the
definition. In Cricket Club of India, it was further urged that since the club was an incorporated body, the doctrine of ‘self-
service’ would not apply. But in view of the constitution of the membership of the club, the court took the view that the
activities of the club were still of a self-serving nature. Thus, instead of confining itself to the corporate personality of the
club, the court pierced the corporate veil and looked into the membership of the club, without assigning any reason for
doing so. By this device, the activities of the Cricket Cub of India were brought within the ratio of the Madras Gymkhana
Club case. But this is not correct. With a view to further buttress this point, in Safdarjung,18 the court found support from
certain observations of Lord Denning MR, in Hotel & CIT Board, to the effect that a member of a club, when he goes to
his club to have a meal and pays for it, ‘is not engaging in a transaction of sale or purchase, the members are just
distributing their own property amongst themselves’ and the incorporation of the club is only machinery. 19 In taking this
view, Lord Denning MR, relied on certain observations of Warrington LJ, in an income-tax case.20 But in income-tax
cases, lifting of the corporate veil is permissible for seeing the economic realities behind the legal facade.21 In piercing the
corporate veil in industrial cases, Lord Denning MR deviated from the established principles relating to the doctrine of
lifting the corporate veil.22 Trade disputes or industrial disputes do not fall within the cases in which lifting of the corporate
veil is permissible. The law, in India, on this subject, is laid dow by the Supreme Court in Tata Engineering and
Locomotive Co, holding that the corporate veil can be lifted where fraud is intended to be prevented or trading with an
enemy is sought to be defeated.23 But in Cricket Club of India, neither any fraud was intended to be prevented, nor any
trading with an enemy was sought to be defeated. Nor was this a case under a taxing statute. The question of lifting the
corporate veil, even without considering the question of whether the corporate veil should he lifted or not, was not
justified. If the corporate veil could not be lifted, the club would not fall within the doctrine of a ‘self-serving institution’.

Co-operative Societies and Credit Unions

In Bangalore Water Supply, relying on the decision of the Australian High Court, in Queen v Marshall .24 Iyer J held that
co-operative societies, ordinarily, could not fall outside the scope of the definition of industry, because a society is the
employer and the members or others are the employees and the activity partakes the nature of a ‘trade’. Merely because co-
operative enterprises deserve State encouragement, they do not qualify for an exemption. Even if a co-operative society is
worked by the members only, the entity (save where the members are few and self-serving) is an industry because the
member-Workers are paid wages and there can be disputes about rates and the different scales of wages among the
categories ie, Workers and Workers or between Workers and employer. Likewise, credit unions would also fall within the
ambit of the definition of ‘industry’. For example, the Rajasthan Co-operative Credit Institutions Cadre Authority is an
industry.25However, a single judge of the Punjab and Haryana High Court held that the Chandigarh State Co-operative
Bank is neither an ‘industry’ nor an ‘industrial establishment’ as envisaged in the ID Act.26

Miscellaneous Activities

The following activities have been held to fall within the definition of industry: A pharmacy attached to a hospital and a
college selling its products to the hospital as well as in the market;27 the activities carried on by the Employees’ State
Insurance Corporation (constituted under the Employees’ State Insurance Corporation Act 1948), which includes
provisions for medical facilities for insured persons and their families;28 a labour indentor, carrying the business of
recruiting labourers,29 a co-operative milk society,30 a hair cutting saloon,31 the Marmat section of the Travancore
Devaswom Board, engaged in the construction of buildings for dairy farms, schools, hostels, cottage industries and
workshops and building and shops,32 the activities of the Grain Dealers’ Association, whose principal activity is to
transport goods from the government godowns to the respective ration shops of its members,33 a milk supply scheme, a
government undertaking supplying milk to the city of Jaipur, under the animal husbandry department,34 the activities of the

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Khadi Gramodyog Sangh,35 the activities of the survey and investigation division of the irrigation department of the
government,36 the Chambal Hydel Irrigation Project,37 the Salandi Irrigation Project,38 the Railways,39 the activities of the
lining division of the irrigation department of the government,40 the tea board constituted under the Tea Act 1953,41 the
Bihar Relief Committee, which undertook minor irrigation schemes in the State of Bihar, with all ancillary systematic
operations,42a shop governed by the provisions of the Uttar Pradesh Shops and Establishments Act,43 the construction work
of the Tenughat dam, carried on by the Government of Bihar,44 the Balemala Dam project, which has the ultimate
objective of generating electrical power to run different businesses and industries,45 the telephone,46 and telegraph
services,47 Hindustan Dwakhana,48 Security Paper Mills,49 and the activities of the irrigation department of the Public
Works department.50 The Bombay High Court held that in the absence of any provision of law, it is ‘conceivable that a
trade union may, in certain circumstances, be an industry.51 Likewise, the Madhya Pradesh High Court held that the
activities of a society promoting family planning programmes of the state government, in the circumstances of a case,
could be an industry.52

The Central Institute of Yoga is an industry in view of the fact that it is carrying out a systematic activity.53 The activities
carried on by the Rajasthan State Text Book Board bring it within the purview of the definition of industry.54 The wool and
shawl making factory managed by Kumaon Regimental Centre is an industry.55 Forest department’s work of
manufacturing polythene bags is an industry.56 The activities of the Police Housing Corporation fall within the definition
of industry in s 2(j), and hence the Corporation is an ‘industry’.57 The activities of the Uttar Pradesh Scheduled Caste
Finance and Development Corporation, such as organising work in various ways, for the upliftment of the down-trodden,
helping them in getting technical training etc, have been held to fall within the definition of industry.58 The activities of a
company owning a number of flats in an estate, in rendering services like supply of water, electricity, lifts, sanitation to the
tenants etc, has been held to be an industry.59 The activity of papad making, carried on by a cooperative society, has all the
trappings of trade and business, viz, women Workers being engaged in the preparation of papad, under the supervision and
control of the society and being paid wages by it. The mere fact that such Workers were styled as ‘members’ would not
exclude the relationship of employee and employer.60 In Visakhapatnam DLB, the Supreme Court held that the Dock
Labour Board, constituted under the Dock Workers Regulations and Employment Act 1948, was not an industry.61 This
decision was followed by the court in Calcutta DLB.62 But, by the principles laid down by the Supreme Court in Bangalore
Water Supply, the Visakhpatnam DLB case was overruled by implication, while Madras Gymkhana was specifically
overruled by a larger Bench. Therefore, in Management of Dock Labour Board, Visakhapatnam,63 on a precise and
illuminating analysis of the ratio of these dicta, a single judge of the Andhra Pradesh High Court held that the activities of
the Dock Labour Board would fall within the purview of the definition of industry.

The following activities were held not to be industries within the meaning of s 2(j). A retail cloth shop run by two partners,
with the assistance of one salesman,64 a firm of trade marks agents,65 a building let out on rent by a palace administration
board, managing the estate of a royal family, for the benefit of the junior members of the family,66 the activities of the
Farashkhana and Baggikhana, including kapatdwara, the horse breeding and riding section of the city palace of the Jaipur
Maharaja, maintaining the motor garage, museum, gardens, nursery and dairy farms belonging to the Maharaja,67 a canteen
run by a bar association,68 canteens an hostels run by an educational institution, exclusively meant for its students,69 the
locust warning organisation of the Government of India,70 the constructional work of a cement factory,71a village
panchayat, constituted under the Bombay Village Panchayat Act,72 the Visakhapatnam Dock Labour Board, constituted
under the Dock Workers (Regulation Employment) Act 1948—a trust consisting of the shareholders of a property for
managing the same on a no profit no loss basis,73 the National Highways Project, controlled and managed by the public
Works department of the government,74 the activities of the public Works department of a government, relating to the
construction of government buildings, such as hospitals, colleges, schools and court buildings,75 a defence laboratory,
engaged in the research for the benefit of the defence organisation of the country,76 the activities of a Gurukul (residential
school), where the students do most of the work and employees are hired only for doing heavy work; and that too only in
minimal matters, so as not to destroy the non-employee character of the institution,77 and a blacksmith in a town, working
with the help of his son or assistant.78 The activities of the Central Institute of Fisheries, Nautical and Engineering
Training, which is not engaged in research, but engaged only in imparting training to personnel, in deep sea fishing and
allied operations, hiring marginal employees to attend to certain minimal matters in the institute, were held not to be an
industry.79 The relief work undertaken by a state, to provide relief to drought affected people,80 or the activities of a
circulating library, run on the premises of the central railway, employing two persons, are not industries.81 Khadi and
village industries,82 and a District Red Cross Society are industries within the meaning of s 2(j).83 The plea, that the Posts
and Telegraphs Department is not an industrial establishment, cannot be raised for the first time in appeal to the Supreme
Court, in view of the fact that it did not raise the point before the industrial tribunal and no such point was argued before it,
nor did it raise the plea before the High Court.84

‘Industry’ to be replaced by ‘Establishment’ - NCL-II

The NCL-II has recommended that the proposed Labour Management Relations Act should be made applicable to all

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establishments employing 20 or more Workers, irrespective of the nature of the activity in which the establishment is
engaged. The commission felt that, in view of this recommendation, there was no need to define the term ‘industry’.85 The
commission recommended that the term ‘establishment’ may be defined as ‘a place or places where some activity is
carried on with the help and co-operation of Workers.’86 A registered society used as a home for children with government
aid and donations is an ‘industry’.87 An auditorium, which is a recreation centre, is an ‘industry’ notwithstanding the fact
that it is run by Army.88

Clause (k): INDUSTRIAL DISPUTE

Evolution

The definition of the term ‘industrial dispute’ is, it is no exaggeration to say, a key concept of literally, central importance
in the law relating to industrial disputes. The term ‘industrial dispute’ in s 2(k) was defined in the Industrial Disputes Act
1947, and has remained unamended since. This definition is a modification of the definition of ‘trade disputes’ in s 2(j) of
the repealed Trade Disputes Act 1929, which in its turn, was a reproduction of s 8 of the Industrial Courts Act 1919, of the
United Kingdom, which defined a ‘trade dispute’ as meaning:

Any dispute or difference between employers and workmen or between workmen and workmen, connected with the employment
or non-employment or the terms of employment, or with the conditions of Labour of any person.

The definition also adds to the list of disputes, the one between ‘the employers and employers’. It is rather difficult to
comprehend why the Indian Parliament chose to insert the phrase ‘between employers and employers’ in the definition.
The definition of ‘trade dispute’ (UK) underwent radical changes during the past three decades. Presently, it stands defined
in s 218 of the Trade Union and Labour Relations (Consolidation) Act 1992, as under:

A dispute between Workers and their employer, which relates wholly or mainly, to one or more of the following:
(1) terms and conditions of employment or the physical conditions which any Workers are required to work in;

(2) engagement or non-engagement, or termination or suspension of employment or the duties of employment, of one or
more Workers;
(3) allocation of work or the duties of employment as between Workers or groups of Workers;

(4) matters of discipline;

(5) the membership or non-membership of a trade union, on the part of Workers;

(6) facilities for officials of trade unions;

(7) machinery for negotiation or consultation, and other procedures, relating to any of the foregoing matters, including the
recognition by employers or employers’ associations, of the right of a trade union to represent Workers in any such
negotiation or consultation or in the carrying out of such procedures.

The 1992 Act of the UK replaced the phrase ‘employers and workmen’ by ‘workers and their employer’, and deleted the
phrase ‘between workmen and workmen’. These two changes, together with the sharp enumeration of the subjects, limit
the range of disputes that can be raised or settled. It goes to the credit of the British Parliament that it has been prompt and
responsive to the changing demands of the British economy. In striking contrast, the Indian Parliament left the definition of
‘industrial dispute’ in the same state in which it was enacted more than five decades ago. The trend in the UK is clearly in
favour of a continuous monitoring and a progressive shift towards the simplification and consolidation of Labour laws,
whereas, industrial law in India is left to languish for ages, with no salvation in sight, tall claims notwithstanding.89 The
definition has been the subject-matter of numerous decisions of the courts and one feature common to all the decisions is
that, in the words of Desai J:

the expression has been so widely defined as not to leave anything out of its comprehension and purview, involving the areas of
conflict that may develop between the employer and the workmen and in respect of which a compulsory adjudication may not be
available.90

This definition stated broadly, contains two limitations. Firstly, the adjective ‘industrial’ relates the disputes to an
‘industry’, as defined in s 2(j) of the Act; secondly, the definition expressly states that not disputes and differences of all

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sorts, but only those which bear upon the relationship of employers and workmen and the terms of employment and
conditions of labour, are contemplated.91 In other words, the definition discloses that disputes of a particular kind alone are
regarded as industrial disputes. Though the definition does not refer to an industry, on the grammar of the expression
‘industrial dispute’ itself, the dispute means a dispute in an ‘industry.92If such an empirical statute as the IDA can be said
to be influenced by a theory of labour relations and industrial conflict, that theory is to be found in the definition of an
‘industrial dispute’. The Act contemplates the resolution of industrial disputes through several modes, which include: (i)
collective bargaining; (ii) conciliation or mediation; (iii) arbitration by a single or team of arbitrators chosen by the parties;
and (iv) adjudication by judicial /quasi-judicial authorities. Collective bargaining is, of course, far superior to all other
modes of dispute resolution in view of the fact that the parties negotiate and reach a settlement voluntarily in a spirit of
give and take without any intervention from a third party. Viewed thus, community of interest is the essence of collective
bargaining. This policy of the legislature is also implicit in the definition of ‘industrial dispute’, A collective bargaining
agreement has been broadly defined by Ludwig Teller as an agreement between a single employer or an association of
employers on the one hand and a labour union upon the other, which regulates the terms and conditions of employment. He
further points out:

The term ‘collective’, as applied to ‘collective bargaining agreement’, will be seen to reflect the plurality not of the employers,
who may be parties thereto, but of the employees involved therein. Again, the term ‘collective bargaining’ is reserved to mean
bargaining between an employer or a group of employers and a bona fide labour union.

In the language of Ludwig Teller again:

The collective bargaining agreement bears in its many provisions, the imprints of decades of activity, contending for labour
equality through recognition of the notions underlying collective negotiation.1

Indeed, in the collective bargaining agreement is to be found a culminating purpose of labour activity.2 It is well-known
how, before the days of ‘collective bargaining’, labour was at a great disadvantage in obtaining reasonable terms for its
contract of service from its employer. As trade unions developed in the country and collective bargaining became the rule,
the employers found it necessary and convenient to deal with the representatives of the workmen, instead of the individual
workmen, not only for the making or modification of the contracts, but also in the matter of taking disciplinary action
against one or more workmen and as regards all other disputes3 Hence, having regard to the modern conditions of the
society, where capital and labour have organised themselves into groups for the purpose of fighting their disputes and
settling them on the basis of the theory that ‘union is strength’, collective bargaining has come to stay.4 Collective
bargaining being the order of the day in a democratic social welfare state, legitimate trade union activities, which must
shun all kinds of physical threats, coercion or violence, must march with a spirit of tolerance, understanding and grace in
its dealings with the employer. Such activities can flow in a healthy channel only with mutual co-operation between the
employer and the employees and cannot be considered as irksome by the management, in the best interests of its business.
Dialogues with the representatives of a union help in striking a delicate balance in the adjustment and settlement of various
contentious claims and issues.5 The policy behind this Act is to protect the workmen as a class, against unfair labour
practices. What imparts to the dispute of a workman, the character of an ‘industrial dispute’, is that it affects the rights of
the workmen as a class.6 Griffith C J said:

The word ‘industrial’ ... as used to the nature of quality of the disputes, ... denotes two qualities which distinguish them from
ordinary private disputes between individuals, namely: (i) that the dispute relates to industrial matters, and; (ii) that on one side at
least of the dispute, the disputant are a body of men acting collectively and not individually.7

In other words, ‘an element of collective bargaining, which is the essential feature of the modern trade union movement, is
necessarily involved in industrial adjudication’.8

Components of Definition

The definition of ‘industrial dispute’ in s 2(k), can be divided into four parts for the purpose of discussion in this section as
detailed below:

(a) Factum of dispute

(b) Parties to dispute;

(1) employer and employers; or

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(2) employers and workmen; or

(3) workmen and workmen;

(4) individual dispute versus industrial dispute;

(5) number of workmen required for espousal of a dispute;

(6) espousal by trade unions;

(7) time of espousal;

(8) effect of subsequent support or withdrawal of support to the dispute;

(9) burden of proof.

(c) Subject-matter of dispute:

(1) employment or non-employment;

(2) contract of employment;

(3) determination of contract of employment;

(4) terms of employment, or the conditions of labour;

(5) of any person.

(d) Industry and Industrial dispute:

The dispute should relate to an ‘industry’. It is not possible to conceive an industrial dispute within the
meaning of the Act, unless and until all the four conditions stand satisfied.9

Factum of Dispute

The key words of the definition are ‘dispute’ or ‘difference’.10 In Beetham v Trinidad Cement Ltd , Lord Denning,
speaking for the privy council, observed:

By definition, a ‘trade dispute’ exists, wherever a ‘difference’ exists and a ‘difference’ can exist long before the parties become
locked in a combat. It is not necessary that they should have come to blows. It is sufficient that they should be sparring for an
opening. 11

The ‘dispute’ or ‘difference’, however, must be something fairly definite and of real substance and not a mere personal
quarrel,12 a grumbling or an agitation.13 ‘The term ‘industrial dispute’ connotes a real and substantial difference, having
some element of persistency, and likely, if not adjusted, to endanger the industrial peace of the community’.14 The
expression ‘dispute or difference’, as used in the definition, therefore, means a controversy, fairly definite and of real
substance, connected with the employment or non-employment, with the terms of employment or with the conditions of
Labour of any person, and is one in which the contesting parties are directly interested in maintaining the respective
contentions. In other words, only those controversies would fall within the definition ‘in which the contestants are seeking
to raise definite disputes of substance, in which both the parties are themselves directly and substantially interested’.
Further, it must also be a grievance felt by the workmen, which the employer is in a position to remedy. Both the
conditions must be present: it must be a grievance of the workmen themselves and it must be a grievance which the
employer as an employer, is in a position to remedy or set right.15

Since such a dispute may arise between different parties, the definition equally contemplates disputes between ‘employers
and employers’, or between ‘employers and workmen’ or between ‘workmen and workmen’. The definition further shows
that certain types of disputes can never fall within its ambit. For example, disputes between a government and an industrial
establishment or between workmen and non-workmen, are not the kinds of disputes of which the definition takes notice.16
As a dispute raised by the workmen by making certain demands on the employer, which he declines, becomes an industrial
dispute, so also a dispute arising out of demands made by the employer and rejected by the workmen becomes an industrial
dispute.17 An ‘industrial dispute’ comes into existence when the employer and the workmen are at variance and the
‘dispute or difference’ is connected with the employment or non-employment, the terms of employment or with the

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conditions of labour. In other words, a dispute or difference arises when a demand is made by the workmen on the
employer and it is rejected by him and vice versa.18 In Sindhu Resettlement Corpn, the Supreme Court held that a mere
demand, asking the appropriate government to refer the dispute for adjudication, without a dispute being raised by the
workmen with their employer, regarding such demand, cannot become an ‘industrial dispute’. Hence, an ‘industrial
dispute’ cannot be said to ‘exist’ until and unless a demand is made by the workman or workmen on the employer and it
has been rejected by him.19 The Delhi High Court, in Fedders Lloyd, went a step further and held:

“...a demand by the workmen must be raised first on the management and rejected by it, before an ‘industrial’ dispute can be said
to arise and ‘exist’ and that the making of such a demand to the conciliation officer and its communication by him to the
management, who rejected the demand, is not sufficient to constitute an industrial dispute.”20

In other words, if the workmen do not make a demand on the employer, no ‘industrial dispute’ will come into existence.
Rejection of the claim of the workmen by the employer, in the conciliation proceedings before a conciliation officer, will
not give rise to an ‘industrial dispute’. This decision has been followed by the Orissa High Court21 and the majority of a
Full Bench of the Himachal Pradesh High Court.22 But other High Courts have not subscribed to this view.23 The view of
the Delhi High Court, that an industrial dispute does not come into existence when the claim of the workmen made for the
first time, in conciliation proceedings before a conciliation officer, is rejected by the employer, is not the correct view of
the law. This decision overlooks the law laid down by the Supreme Court in Bombay Union of Journalists, that an
industrial dispute must be in existence or apprehended on the date of the reference. If, therefore, a demand has been made
by the workmen and it has been rejected by the employer before the date of the reference, whether directly or through the
conciliation officer, it would constitute an industrial dispute.24 For making a valid reference, it is sufficient that the dispute
partakes the character of an ‘industrial dispute’, before the date of reference25

In Shambhu Nath Goyal, though the workman had not made a formal demand for his reinstatement, he had contested his
dismissal before the inquiry officer and claimed reinstatement. Against the findings of the inquiry officer, he preferred an
appeal to the appellate authority, claiming reinstatement on the ground that his dismissal was bad in law. Then again, he
claimed reinstatement before the conciliation officer in the course of the conciliation proceedings, which was contested by
the employer. From these facts, the court inferred that there was unimpeachable evidence that the workman had
persistently demanded reinstatement, the rejection of which brought the ‘industrial dispute’ into existence.26 From this
holding, it would appear that the Supreme Court has, by implication, overruled the view of the Delhi High Court. After
Shambhu Nath Goyals case, another single judge of the Delhi High Court noted that Shambhu Nath Goyal had not
overruled Sindhu Resettlement, but had distinguished it on facts.27 As a matter of fact, in Shambhu Nath Goyal, the demand
had actually been made on the management. The court also pointed out that the decision of the three-judge Bench in
Sindhu Resettlement, could not have been overruled by a two judge Bench in Shambhu Nath Goyal. Therefore, the holding
in Sindhu Resettlement, in case of any conflict between the two decisions, must prevail. In this view of law, the court held
that the making of the demand by the workman on the management, was a sine qua non for giving rise to an industrial
dispute. In this case, even before the conciliation officer, it was not pleaded that the termination of the service of the
workman was unjustified. But the Guwahati High Court, in Animesh CD Roy, swung to the other extreme and held:

since the employer controverted the validity of the reliefs claimed by the workman, firstly, before the chief labour officer and
thereafter, before the labour court and since he is persisting in that stand right upto this date, it looks quite evident that there was a
dispute between the parties of the nature referred by the lieutenant governor to the labour court.28

From these observations, it would appear that even if the workmen had raised no demand, either directly or before the
conciliation officer, an industrial dispute will come into existence when the employer controverts the claim of the
workmen before the labour court or industrial tribunal. In a dismissal case in Needle Industries, the Madras High Court
held that a dispute or difference, between the management and the workman, automatically arises, when the workman is
dismissed from service. The court further observed that ‘it is nowhere stipulated in the Act, particularly in s 2(k), that the
existence of the dispute as such, is not enough, but then there should be a demand by the workman on the management, to
give rise to an industrial dispute.29 The Calcutta High Court, in Andrew Yule, held that the contest of an application filed by
the employer, under s 33(2)(b), for the approval of the action of dismissal, would itself give rise to an ‘industrial dispute’
with the management. No doubt, for the existence of an industrial dispute, there should be a demand by the workmen and a
refusal to grant it by the management.30 In Ramakrishna Mills, it was observed:

How the demand should be raised cannot be a legal notion of fixity and rigidity. The grievance of the workmen and the demand for
its redressal must be communicated to the management. The means and mechanism of the communication adopted are not matters
of much significance, so long as the demand is that of the workmen and it reaches the management.31

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Nowhere does the Act contemplate that an industrial dispute can come into existence in any particular, specific or
prescribed manner. Nor is there any particular or prescribed manner in which the refusal should be communicated. For an
‘industrial dispute’ to come into existence, a written claim is not a sine qua non; except, in the case of public utility
service, because s 22 forbids going on a strike without giving a strike notice. To read into the definition, the requirement of
a written demand, for bringing an ‘industrial dispute’ into existence, would tantamount to re-writing the section. In other
words, an oral demand and its rejection will as much bring into existence an industrial dispute as a written one. If the facts
and circumstances of the case show that the workmen had been making the demand, which the management had been
refusing to grant, it can be said that there was an ‘industrial dispute’ between the parties.32 Merely because the dispute
referred was not included by the workmen in their charter of demands, it could not be concluded that there was no dispute
subsisting on the basis of which a reference could be made.33

An ‘industrial dispute’ need not be a ‘conflict of interest’ or an economic dispute; it may also be a ‘conflict of rights’ or a
‘legal’ dispute. This is to say, while an ‘industrial dispute’ is most usually thought of as a dispute concerned with what the
terms of employment ought to be, ie, with the negotiation of New terms of employment (conflict of interest,) a dispute is
equally ‘connected with’ the terms of employment if it is concerned with the interpretation of the existing terms or with
their enforcement (conflict of rights). However, the expression ‘dispute or difference’ is not intended to include mere
metaphysical, theoretical or philosophical controversies between employers and employees or between workmen and
workmen; it will also not include mere ideological contests or differences.34 Thus, ‘a workman may have ideological
differences with the employers, a workman may feel sympathetic for an employee in his own industry or in another
industry; a workman may feel seriously agitated about the conditions of Labour outside our own country; but it is absurd to
suggest that any of these factors would entitle a workman to raise an ‘industrial dispute’ within the meaning of s 2(k) of the
Act.35 A dispute about whether a particular union alone, is competent to represent them, is obviously not an industrial
dispute.36 If the dispute is indefinite or vague, it might disqualify itself as an ‘industrial dispute’, ‘by reason of its own
extravagance’.37

In England also, from the interpretation of the expression ‘trade dispute’ as used in Trade Disputes Act 1906, in Conway v
Wade ,38 and Huntley v Thornton ,39 it appears that a dispute falling literally within the four corners of the statutory
definition, but having racial, religious or national discrimination as its true predominant purpose, will not be a ‘trade
dispute’. This, of course, is deduction; no case is directly on the point.40 Occasionally, it may be difficult to divorce
political activities from industrial activities. However, this difficulty is partly overcome by interpreting the term ‘industrial
dispute’ by distinguishing between a political and an ‘industrial dispute’, as the disputes with a predominantly political
purpose cannot be given the protection of the Act. However, it must he emphasised that in complex situations, found near
the borderline between industrial and political disputes, the decisive legal factor is the nature of the available evidence, of
the predominant purpose of either or both the disputants. In the words of Prof Grunfield:

It need clearly be said how profoundly difficult the elucidation of a motive may be, especially when the dispute is at the heart of an
economic or social crisis. It is as well that such elucidation has not yet proved necessary.41

A dispute not covered by anyone of the items enumerated in the Second Schedule or the Third Schedule, by itself, would
not mean that it is not an ‘industrial dispute’. An industrial dispute not covered by any of the items in these schedules shall
be covered by the residuary item No 6, in the Second Schedule.42 The question, whether a particular dispute is an
‘industrial dispute’ or not, is a question of fact.43 The further question, whether the demand had, in fact, been made by the
workmen on the employer, at the appropriate time, or the dispute was properly espoused by an adequate number of
workmen etc, are also questions of fact. Such points cannot, for the first time, be raised in judicial review, but should be
raised before the tribunal so that the opposite party has an opportunity to meet them and the tribunal may record a finding
on the determination of facts.44 However, such facts are jurisdictional facts, and the jurisdiction of the tribunal will depend
upon their correct determination. It is well settled that a tribunal cannot give itself jurisdiction by erroneously deciding
such a question of fact45 and the determination of such facts is always open to judicial review.

In ANZ Grindlays Bank, the facts were: A long-term settlement was entered into between the Bank and All India Grindlays
Bank Employees Association, which was a majority union having a membership of 66% of the employees, admittedly
under s 18(1). The minority union, ie, All India Grindlays Bank Employees Federation (second respondent) did participate
in the negotiations, but backed out in the last minute and refused to sign the settlement, with the result the management
signed the settlement on 18-8-1996 with the majority union, ie, the Employees Association. On 6 December 1997
Grindlays Bank Employees Union, Calcutta, a constituent of the Employees Federation representing 13% of the workmen
of the Bank accepted the terms of the settlement dated 18 August 1996 by signing a separate settlement on 6 December
1997. The Bank offered to extend the benefits of the said bi-partite settlement to the employees, who were not members of
the Association, subject to the condition that they accept the terms of settlement in writing. The Federation thereafter

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informed the conciliation officer on 19 August 1996 that it had not signed the settlement and that the signing of the
settlement by the Bank with the Association (third respondent) amounted to unfair labour practice The Government
referred the dispute raised by the Federation for adjudication in December 1998 in terms: “Whether the terms of bipartite
settlement dated 18-8-1996, between the management of ANZ Grindlays Bank Limited, and All Indian Grindlays Bank
Employees Association which bound withholding of benefits of settlement to workmen who are not members of All India
Grindlays Bank Employees Association until the individual gives acceptance of the settlement in the given format is legal
and justified? If not, what relief are the workmen entitled to?” The writ petition filed by the Bank challenging the said
reference was dismissed at both the tiers of the Bombay High Court. The contention of the Bank before the Supreme Court
centred round, inter alia, the question was whether there was any dispute or difference at all between the parties as defined
in s 2(k), which calls for a reference and adjudication?

It is considered expedient to discuss this case in some detail, if for nothing else, to expose the gross abuse of power by the
government, while functioning under s 10(1) in vital matters which affect the lives of workmen and the industrial
community, not to speak of industrial peace and harmony. The case disclosed a complex set of facts, such as: (i) multiple
unions in the Bank; (ii) negotiations between the Bank and the unions and the consequent settlement arrived at under s
18(1) with the majority union, ie, the Employees Association; (iii) the minority union, ie, the Employees Federation,
backing out in the last minute and refusing to sign the settlement; (iv) management’s offer to extend the increases agreed to
in the settlement even to the employees who are not members of any union, subject to their giving individual letters
(receipts) to the effect that they accept the terms of settlement as binding on them; (v) contrary to the stand taken by the
Employees Federation, one of its constituents, ie, Employees Union, representing 13% of employees, accepting the terms
of settlement by signing a separate settlement with the Bank in December 1997; (vi) a substantial number of employees,
who were not members of either union, also accepting the terms of settlement by granting individual receipts to the Bank;
(vii) in all, some 99% of the Award staff accepting the settlement and/or granting the receipt and receiving the benefits
accruing therefrom; and (viii) a small minority of 29 employees, out of the total complement of the Bank, refusing to sign
the settlement and raising objections thereto. Adverting to the issues raised in the case: the Bank expressed its willingness
to extend the benefits agreed to under the settlement to even the workers not belonging to any union including the
members of the Federation. In order to facilitate the extension of said benefits, the Bank prepared a draft undertaking,
which ran thus:

To

The Manager

ANZ Grindlays Bank Limited.

Sir,

The terms and conditions of the settlement dated August 18, 1996 between the Management of ANZ Grindlays Bank and their
workmen represented by All India Grindlays Bank Employees’ Association in respect of the various demands have been perused
by me. I accept the settlement and the same will be binding on me. I undertake to receive the benefits in terms of the conditions set
out in the settlement. I, therefore, request you to release the benefits accruing to me under the same.

This may be construed as my receipt towards payment/receipt of grant under the subject settlement.

Sd/-

SIGNATURE

This draft undertaking proposed by the management, though perfectly reasonable, was contested by the Employees
Federation, which informed the conciliation officer that, in signing a settlement with the Employees Association (which
was the majority union), the Bank committed an unfair labour practice. On the failure of the conciliation, the Central
Government made a reference of the so-called dispute in a mechanical fashion with absolutely no application of mind and

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without assessing whether, in the first place, any industrial dispute existed at all between the parties. What dispute could
be there in a situation where a settlement was signed between the management and the majority union and some 99% of
the employees accepted the terms of the settlement? Is it possible that the Government of India was so blind to this glaring
fact that it should proceed to make a reference of the so-called dispute, which never existed in substantial terms, given the
fact that collective bargaining is one of the modes through which disputes are resolved between the employer and his
employees in a spirit of give-and-take? Is it what s 18(1) of the Industrial Disputes Act stands for? While quashing the
flawed reference made by the Central Government, which reference struck at the root of collective bargaining and
bipartism, Mathur J (for self and Sema J), observed:

... learned counsel for the Federation (second respondent), has submitted that under the settlement such employees of the bank,
who were not members of the Association (third respondent), were required to give a receipt in writing in order to avail of the
benefits of the settlement and this was clearly illegal. We are unable to accept the submission made. As already stated, the
settlement was arrived at between the Bank and the Association (third respondent) and by virtue of sub-section (1) of Section 18 of
the Act it bound only the members of the Association (third respondent). However, the Bank also extended the benefit of
settlement to such other employees, who were not members of the Association. In order to avail of the benefit they had to give a
receipt that they were accepting the settlement and the same shall be binding upon them and the format of the receipt, which has
been reproduced earlier, does not contain any such term, which may be of detriment to them. To protect its interest the Bank was
perfectly justified in asking for a receipt from those employees, who were not members of the Association (third respondent), but
wanted to avail of the benefit of the settlement. Therefore, we do not find anything wrong in the Bank asking for a receipt from the
aforesaid category of employees. ... A plain reading of the reference made by the Central Government would show that it does not
refer to any dispute or apprehended dispute between the Bank and the Federation (second respondent). It does not refer to any
demand or claim made by the Federation or alleged refusal thereof by the Bank. In such circumstances, it is not possible to hold
that on account of the settlement dated 18-8-1996 arrived at between the Bank and the Association (third respondent), any dispute
or apprehended dispute has come into existence between the Bank and the Federation (second respondent). The action of the Bank
in asking for a receipt from those employees, who are not members of the Association (third respondent) but wanted to avail of the
benefit of the settlement, again does not give rise to any kind of dispute between the Bank and the Federation (second respondent).
Thus, the reference made by the Central Government by the order dated 29-12-1997 for adjudication by the Industrial Tribunal is
wholly redundant and uncalled for.46 (Paras 9 & 11) (Italics supplied).

The above observations are self-explanatory and do not call for separate analysis. It goes to the credit of Mathur J, that he
categorically rejected the executive perversions of alarming proportions that manifested in the said reference, which were
more frivolous and vexatious than the dispute raised by the Employees Federation. This case was rightly decided and
Mathur J, deserves full compliment from the industrial community for upholding the cause of collective bargaining as well
as the sanctity of a fair settlement reached in the course thereof. Yet another illustration of arbitrary and callous exercise of
power by the government is furnished by Sindhu Resettlement Corporation (supra) - in which the government enlarged the
scope of the dispute unilaterally by making a reference in terms “whether the retrenchment effected by the management
was justified and if not to what relief the workman is entitled”, whereas the dispute raised by the workman was merely
confined to the payment of retrenchment compensation and not to the legality or justifiability of retrenchment. This case
has already been discussed above. ANZ Grindlays Bank is the second case of abuse of Executive power and is worse than
Sindhu Resettlement Corporation, in so far as the government referred a non-existent dispute for adjudication!

Parties to the Dispute

Employers and Employees

The words ‘employers and employers’ have presumably been enacted with a view to widen the scope of the definition of
‘industrial dispute’, to take into its scope and ambit, the eventualities in certain types of disputes connected with the
employment or non-employment, the terms, employment or the conditions of labour of any person, in which there may be
some interest; for instance wage war-fare in an area where labour is scarce and disputes of like character.47 These words
appear to have been added ex abundanti cautela. In the analogous definitions of ‘trade dispute’ in the English statutes and
‘industrial dispute’ in the Australian statutes, these words do not find place. These words did not even occur in the repealed
Trade Disputes Act 1929. There is, so far, no decided case on the construction of these words.

1 Federated Municipal and Shire Council Employees’ Union of Australia v Melbourne Corpn 26 CLR 508.

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2 Madras GCE Union v Gymbkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292] (SC), per Hidayatullah J.
3 Des Raj v State of Punjab (1988) 2 LLJ 149 [LNIND 1988 SC 240], 162 (SC) : AIR 1988 SC 1182 [LNIND 1988 SC 680]: (1988)
2 SCC 537 [LNIND 1988 SC 680], per Ranganath Misra J.
4 Mgmt of FICCI v RK Mittal (1971) 2 LLJ 630 [LNIND 1971 SC 573], 635 (SC), per Jaganmohan Reddy J.
5 State of Bombay v Hospital Mazdoor Sabha (1960) 1 LLJ 251 [LNIND 1960 SC 19], 257 (SC), per Gajendragadkhar J.
6 Mgmt of Safdarjung Hospital v Kuldip S Sethi (1970) 2 LLJ 266 [LNIND 1970 SC 180], 271 (SC), per Hidayatullah CJI.
7 Mgmt of FICCI v RK Mittal (1971) 2 LLJ 630 [LNIND 1971 SC 573], 635 (SC), per Jaganmohan Reddy J.
8 Mazagon Dock Ltd v CIT (1958) 34 ITR 367 -68 (SC), per Venkataramaayyar J.
9 National Assn of Local Governmmt Officers v Balton Corpn [1943] AC 166, 184 (HL), per Lord Wright J.
10 Halsbury’s Laws of England, 1962, 3rd ed, Vol 38, p 9.
11 Mgmt of Safdarjung Hospital v Kuldip S Sethi (1970) 2 LLJ 266 [LNIND 1970 SC 180] (SC), per Hidayatullah CJI.
12 Bangalore Water Supply and Sewerage Board v A Rajappa 1978 Lab IC 467 [LNIND 1963 SC 89], 486 (SC), per Krishna Iyer J.
13 Mgmt of Bihar KG Udyog Sangh v State of Bihar (1971) Lab IC 466, 478 (Pat) (DB), per SK Jha J.
14 Madras GCE Union v Mgmt (1967) 2 LLJ 720 [LNIND 1967 SC 292], 730 (SC), per Hidayatullah J.
15 DN Banerji v PR Mukherjee (1953) 1 LLJ 195 [LNIND 1952 SC 85], 199 (SC), per Chandrasekhara Aiyar J.
16 Bangalore Water Supply and Sewerage Board v A Rajappa 1978 Lab IC 467 [LNIND 1963 SC 89], 486 (SC), per Krishna Iyer J.
17 Madras GCE Union v Gymkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292] (SC), per Hidayatullah J.
18 State of Bombay v Hospital Mazdoor Sabha (1960) 1 LLJ 251 [LNIND 1960 SC 19], 256 (SC), per Gajendragadkar J.
19 Partidge v Mallandaine (1886) 18 QBD 276; Krishna Menon v CIT (1959) 35 ITR 48 [LNIND 1958 SC 122] (SC), per Sarkar J.
20 Bangalore WSSSB v A Rajappa (1978) Lab IC 467 [LNIND 1963 SC 89], 477 (SC), per Krishna Iyer J.
21 Jumbunna Coal Mine, No Liability v Victorian Coal Miners’ Assn 6 CLR 309, 370 (HCA), per Isaacs J.
22 Shankar Balaji Waje v State of Maharashtra (1962) 1 LLJ 119 [LNIND 1961 SC 342] (SC), per Raghubar Dayal J.
23 Ingham v Hie Lee 15 CLR 267, per Griffith CJ.
24 Partridge v Mallandaine [1886] 18 QBD 276.
25 Madras Gymkhana Club Employees Union v Gymkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292], 729 (SC) : AIR 1968 SC
554 [LNIND 1967 SC 291]: [1968] 1 SCR 742 [LNIND 1967 SC 291], per Hidayatullah J.
26 Mgmt of Safdarjung Hospital v Kuldip Singh Sethi (1970) 2 LLJ 266 [LNIND 1970 SC 180], 272 (SC) : AIR 1970 SC 1407
[LNIND 1970 SC 180]: (1970) 1 SCC 735 [LNIND 1970 SC 180], per Hidayatullah CJI.
27 DN Banerji v PR Mukherjee (1953) 1 LLJ 195 [LNIND 1952 SC 85], 199 (SC), per Chandrasekhara Aiyar J.
28 State of Bombay v Hospital Mazdoorsabha (1960) 1 LLJ 251 [LNIND 1960 SC 19], 257 (SC), per Gajendragadkar J.
29 Ahmedabad TI Research Assn v State of Bombay (1960) 2 LLJ 720 [LNIND 1960 SC 273], 722 (SC), per Wanchoo J.
30 Corpn of City of Nagpur v Employees (1960) 1 LLJ 523 [LNIND 1960 SC 32], 531 (SC), per Subba Rao J.
31 Madras GCE Union v Gymkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292] (SC), per Hidayatullah J.
32 Mgmt of Safdarjung Hospital v Kuldip S Sethi (1970) 2 LLJ 266 [LNIND 1970 SC 180], 272 (SC), per Hidayatullah CJI.
33 Corpn of City of Nagpur v Employees (1960) 1 LLJ 523 [LNIND 1960 SC 32], 535 (SC), per Subba Rao J.
34 Bangalore Water Supply and Sewerage Board v A Rajappa 1978 Lab IC 467 [LNIND 1963 SC 89],475 (SC), per Krishna Iyer J.
35 Workmen of Indian Standards Institution v Mgmt (1976) 1 LLJ 33 [LNIND 1975 SC 389], 39 (SC), per Bhagwati J.
36 DN Banerjee v PR Mukherjee (1953) 1 LLJ 195 [LNIND 1952 SC 85] (SC), per Chandrasekhara Aiyar J.
37 Baroda Borough Municipality v Workmen (1957) 1 LLJ 8 [LNIND 1956 SC 94] (SC), per Das J.
38 Madras GCE Union v Gymkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292], 725 (SC), per Hidayatullah J.
39 Bangalore WSS Board v A Rajappa 1978 Lab IC 467 [LNIND 1963 SC 89], 484 (SC), per Krishna Iyer J.
40 Workmen of Indian Standards Institution v Mgmt of Indian Standards Institution (1976) 1 LLJ 33 [LNIND 1975 SC 389], 46 (SC) :
AIR 1976 SC 145 [LNIND 1975 SC 389], per Bhagwati J.

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41 Corpn of City of Nagpur v Its Employees (1960) 1 LLJ 523 [LNIND 1960 SC 32] (SC) : AIR 1960 SC 675 [LNIND 1960 SC 32],
per Subba Rao J.
42 Bangalore Water Supply and Sewerage Board v A Rajappa 1978 Lab IC 467 [LNIND 1963 SC 89], 488 (SC), per Krishna Iyer J.
43 Madras GCE Union v Mgmt (1967) 2 LLJ 720 [LNIND 1967 SC 292], 726 (SC), per Hidayatullah J.
44 State of Bombay v Hospital Mazdoor Sabha (1960) 1 LLJ 251 [LNIND 1960 SC 19] (SC) : AIR 1960 SC 610 [LNIND 1960 SC
19], per Gajendragadkar J.
45 Western India Automobile Assn v IT (1949) 1 LLJ 245 (FC), per Mahajan J.
46 National Union of Commercial Employees v Meher (1962) 1 LLJ 241 [LNIND 1962 SC 66], 247 (SC), per Gajendragadkar J.
47 Corpn of City of Nagpur v Employees (1960) 1 LLJ 523 [LNIND 1960 SC 32], 534 (SC), per Subba Rao J.
48 Ahmedabad Textile Industry’s Research Assn v State of Bombay (1960) 2 LLJ 720 [LNIND 1960 SC 273] (SC) : AIR 1961 SC 484
[LNIND 1960 SC 273], per Wanchoo J.
49 National Union of Commercial Employees v MR Meher (1962) 1 LLJ 241 [LNIND 1962 SC 66] (SC) : AIR 1962 SC 1080
[LNIND 1962 SC 66], per Gajendragadkar J.
50 Harinagar Cane Farm v State of Bihar (1963) 1 LLJ 692 [LNIND 1963 SC 71] (SC) : AIR 1964 SC 903 [LNIND 1963 SC 71],
per Gajendragadkar J.
51 University of Delhi v Ramnath (1963) 2 LLJ 335 [LNIND 1963 SC 89] (SC) : AIR 1963 SC 1873 [LNIND 1963 SC 89], per
Gajendragadkar J.
52 Madras Gymkhana Club Employees Union v Gymkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292] (727-32) (SC) : AIR 1968
SC 554 [LNIND 1967 SC 291], per Hidayatullah J.
53 Cricket Club of India v Bombay Labour Union (1969) 2 LLJ 775 (SC), per Shelat J.
54 Mgmt of Safdarjung Hospital v Kuldip Singh Sethi (1970) 2 LLJ 266 [LNIND 1970 SC 180], 274 (SC) : AIR 1970 SC 1407
[LNIND 1970 SC 180]: (1970) 1 SCC 735 [LNIND 1970 SC 180], per Hidayatullah CJI.
55 Bombay Pinjrapol v Workmen (1971) 2 LLJ 393 [LNIND 1971 SC 382] (SC), per Mitter J.
56 Mgmt of the ICCI v RK Mittal (1971) 2 LLJ 630 [LNIND 1971 SC 573], 645 (SC) : AIR 1972 SC 763 [LNIND 1971 SC 573], per
Jaganrnohan Reddy J.
57 Workmen of Indian Standards Institution v Management of Indian Standards Institution, (1976) 1 LLJ 33 [LNIND 1975 SC 389],
39 (SC) : AIR 1976 SC 145 [LNIND 1975 SC 389]: (1975) 2 SCC 847 [LNIND 1975 SC 389], per Bhagwati J.
58 Workmen of Indian Standards Institution v Management of Indian Standards Institution (1976) 1 LLJ 33 [LNIND 1975 SC 389], 46
(SC) : AIR 1976 SC 145 [LNIND 1975 SC 389].
59 Bangalore Water Supply and Sewerage Board v A Rajappa 1978 Lab IC 467 [LNIND 1963 SC 89] (SC), per Krishna Iyer J.
60 Ibid. 1978 Lab IC 778 (SC), per Jaswant Singh J.
61 Ibid. 780-81 (SC), per Chandrachud CJI.
62 Ibid, 477-78.
63 Ibid, 484.
64 DN Banerji v PR Mukherjee AIR 1953 SC 58 [LNIND 1952 SC 85]: [1953] 4 SCR 302 [LNIND 1952 SC 85].
65 AIR 1963 SC 1873 [LNIND 1963 SC 89].
66 AIR 1960 SC 675 [LNIND 1960 SC 32].
67 AIR 1970 SC 1407 [LNIND 1970 SC 180].
68 AIR 1962 SC 1080 [LNIND 1962 SC 66].
69 AIR 1968 SC 554 [LNIND 1967 SC 291].
70 AIR 1963 SC 1873 [LNIND 1963 SC 89].
71 AIR 1975 SC 2032 [LNIND 1975 SC 280].
72 AIR 1960 SC 610 [LNIND 1960 SC 19].
73 Mgmt of Safdarjung Hospital v Kuldip Singh Sethi (1970) 2 LLJ 266 [LNIND 1970 SC 180], 273 (SC) : AIR 1970 SC 1407
[LNIND 1970 SC 180]: (1970) 1 SCC 735 [LNIND 1970 SC 180], per Hidayatullah CJI.
74 National Union of Comml. Employees v M.R. Meher (1962) 1 LLJ 241 [LNIND 1962 SC 66], 246 (SC) : AIR 1962 SC 1080
[LNIND 1962 SC 66], per Gajendergadkar J.

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75 Madras GC Employees Union v Madras Gymkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292]-21 (SC), per Hidayatullah J.
76 Cricket Club of India v Bombay Labour Union, (1969) 1 LLJ 775 [LNIND 1968 SC 198] (SC) : AIR 1969 SC 276 [LNIND 1968
SC 198], per Bhargava J.
77 University of Delhi v Ram Nath AIR 1963 SC 1873 [LNIND 1963 SC 89]: (1963) 2 LJ 335 (SC).
78 Chief Conservator of Forests v JM Kondhare (1996) 1 LLJ 1223 [LNIND 1995 SC 1252]-25 (SC), per Hansaria J.
79 Mgmt of FICCI v RK Mittal (1971) 2 LLJ 630 [LNIND 1971 SC 573], 645 (SC) : AIR 1972 SC 763 [LNIND 1971 SC 573], per
Jaganmohan Reddy J.
80 R Sreenavasa Rao v LC, Hyderabad 1990 Lab IC 174, 179 (AP), per Jagannadha Rao J.
81 Umashankar Jaswal v Royalauto Centre (1998) 2 LLN 755 (Bom), per Lodha J.
82 Madras Gymkhana Club Employees’ Union v Gymkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292], 731, per Hidayatullah J.
83 Richard Coomber v Justices of the County of Berks (1883-84) 9 AC 61, 74.
84 Federated State School Teachers’ Assn v State of Victoria 41 CLR 569, 585, per lsaacs J.
85 Madras GCE Union v Gymkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292], 726 (SC), per Hidayatullah J.
86 All India Radio v Shri Santosh Kumar (1998) 1 LLJ 817 (SC).
87 State of Punjab v Kuldip Singh (1983) 1 LLJ 309, 314 (P&H) (FB) : (1982) ILR 2 P& H 544, per Sandhawalia CJ.
88 Sub-Divisional Inspector of Post, v Theyyam joseph (1996) 2 LLJ 230 [LNIND 1996 SC 256] (SC) : (1996) 8 SCC 489 [LNIND
1996 SC 256] : AIR 1996 SC 1271 [LNIND 1996 SC 256].
89 Bombay Telephone Canteen Employees Assn v Union of India (1997) 2 LLJ 647 [LNIND 1997 SC 904] (SC) : AIR 1997 SC 2817
[LNIND 1997 SC 904]: (1997) 6 SCC 723 [LNIND 1997 SC 904].
90 General Manager, Telecom v Srinivasan Rao AIR 1998 SC 656 [LNIND 1997 SC 1448]: (1997) 8 SCC SCC 767, per Verma CJI.
91 GM Telecom Factory v HR Thakur (1998) 3 LLN 154 (Bom), per Srikrishna J.
92 Executive Engineer v K Somasetty (1997) 2 LLJ 698 [LNIND 1997 SC 778]-99 (SC) : AIR 1997 SC 2663 [LNIND 1997 SC 778]:
(1997) 5 SCC 434 [LNIND 1997 SC 778].
93 Dhyaneshwar B Ganwat v Karyakari AGP Vibhag (2010) 4 LLJ 403 (Bom), per Ms Mhatre J.
94 State of Gujarat v Maniben Viraji (2003) 4 LLJ 936 (Guj) per Rathod J.
95 State of Gujarat v Deenani Bidhaji Thakore (2003) 3 LLJ 630 (Guj) (DB), per Shethna J.
1 State of Rajasthan v Judge, LC, (2003) 4 LLJ 897 (Raj), per Sharma J.
2 Mohd Rajmohammad v IT-cum-LC, (2003) 2 LLJ 1149 (AP), per Ramulu J.
3 Employees’ State Insurance Corpn v Hyderabad Race Club, (2004) 6 SCC 191 : AIR 2004 SC 3972 : (2004) 3 LJ 547.
4 Bangalore Turf Club v Regional Director, ESIC, AIR 2009 SC 2965 [LNIND 2009 SC 1021]: (2009) 15 SCC 33 [LNIND 2009
SC 1021] : (2009) 3 LJ 570.
5 Agricultural Produce Market Committee v Ashok Harakuni (2000) 2 LLJ 1382 [LNIND 2000 SC 1293] (SC), per Misra J.
6 CA Ribeiro v Directorate of Health Services, Govt of Goa (1999) 3 LLN 517 (Bom) (DB), per Batta J.
7 Tungabhadra Board v Easu (1999) 4 LLN 1051 [LNIND 1999 KANT 132] (Kant) (DB), per Ashok Bhan J.
8 ZCE, UP fal Nigam v PO, LC (2001) 4 LLN 1190 (All), per Anjani Kumar J.
9 Centre of Indian Trade Unions v State of Madhya Pradesh (2002) 2 LLN 256 (MP), per Mishra J.
10 Exec Engineer, YMP Division v Anant (1999) 1 LLN 155 (Bom), per Rebello J.
11 Exec Engineer, CPWD v MP Kolharkar (2000) 2 LLJ 1410 (SC).
12 Najeema Beevi v Public Service Commission (1983) 1 LLJ 433, 435 (Ker), per Subramanian Poti Ag CJ.
13 Umayammal v State of Kerala (1982) KLT 829 [LNIND 1982 KER 202] (Ker) (FB).
14 HK Makwana v State of Gujarat (1995) 1 LLT 801, 816 (Guj) (FB), per MB Shah J.
15 Vinodrai N Ratnotar v State of Gujarat (1995) 1 LLJ 388, 392 (Guj) (DB), per P Bhat J.
16 Hussen M Mhasvadkar v Bombay Iron and Steel Labour Board 1991 Lab IC 1385 (Bom), per Dhanuka J.
17 Rathinam v Tamilnadu State Housing Board (1996) 1 LLJ 155, 159 (Mad), per PS Mishra CJ.
18 Baljit Singh v State of Haryana (1996) 1 LLJ 246 (P&H), per GS Singhvi J.

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19 Kanhaiya Lal v State of Rajasthan (1994) 2 LLJ 474, 477 (Raj), per GS Singhvi J.
20 Mohanan v State of Kerala (1994) 2 LLJ 1041 -42 (Ker), per Thulasidas J.
21 Chief Conservator of Forest v Jagannath Maruti Khondhari (1996) 1 LLJ 1223 [LNIND 1995 SC 1252] (SC).
22 Rajendrasinhji Institute v Maharashtra Labour Union (2003) 4 LLJ 379 (Bom), per Mhatre J.
23 State of Gujarat v PN Parmar (2001) 2 LLN 41 (SC).
24 Ibid, 43.
25 Haribhau v State of Maharashtra (2002) 2 LLN 689 (Bom) (DB), per Lodha J.
26 State of Bombay v Hospital Mazdoor Sabha (1960) 1 LLJ 251 [LNIND 1960 SC 19], 261 (SC), per Gajendragadkar J.
27 (1960) 1 LLJ 523 [LNIND 1960 SC 32]-40 (SC), per Subba Rao J.
28 Muthayyan v Manager, Kuilur Estate (1982) 1 LLJ 23, 27 (Ker), per Khalid J.
29 Sumer Chand v LC, 1990 Lab IC 85 [LNIND 1989 PNH 391] (NOC) (P& H) (DB).
30 Karthiam v Union of India (1984) 1 LLJ 259, 271 (Ker) (DB) : ILR 1984 (1) LJ 259, per Sivaraman Nair J.
31 Jagdish Prasad Sinha v PO, LC (1992) 2 LLJ 33 -35 (All) : (1991) 62 FLR 562, per Sahay J.
32 Ramkishan v Samrat Ashok Technical Institute (1995) 1 LLJ 944 [LNIND 1994 MP 92], 947 (MP), per Dwivedi J.
33 T Rajan v State of Kerala (1994) 2 LLJ 236, 238; 1994 Lab IC 1321 (Ker), per Guttal J.
34 Suresh Chandra Mathe v Jiwaji University, Gwalior (1994) 2 LLJ 462 (MP) (DB), per Chawla J.
35 Miss A Sundrambal v Government of Goa, Daman & Diu (1988) 1 LLJ 61 -62 (SC), per Venkatarariah J.
36 Ruth Soren v Managing Committee, East ISSDA (2001) 1 LLN 918 (SC), per Rajendra Babu J.
37 Technical Teachers Trg Institute v HN Ghatt (1998) 2 LLN 891 (MP), per Dharmadhikari J.
38 Kamyani Vidya Mandir v Sangeeta E Sanghpal (2008) 1 LLJ 712 [LNIND 2007 BOM 1145] (Bom .): (2007) 6 Bom CR 500
[LNIND 2007 BOM 1145], per Ms Mhatre J.
39 Ahmedabad Textile IR Assn v State of Bombay (1960) 2 LLJ 720 [LNIND 1960 SC 273] (SC) : AIR 1961 SC 484 [LNIND 1960
SC 273], per Wanchoo J.
40 Physical Research Laboratory v KG Sharma (1997) 2 LLJ 625 [LNIND 1997 SC 648] : AIR 1997 SC 1855 [LNIND 1997 SC
648]: (1997) 4 SCC 257 [LNIND 1997 SC 648].
41 Central Rainfed URR Institute v Union of India (2002) 2 LLN 655 (Jhar), per Mukhopadhyaya J.
42 Workmen of Fire Brigade Section of Municipal Committee v KL Gosain 1970 Lab IC 863 -64 (P&H), per Sodhi J.
43 Corpn of City of Nagpur v Employees (1960) 1 LLJ 523 [LNIND 1960 SC 32], 531 (SC), per Subba Rao J.
44 Madras GCE Union v Gymkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292], 725 (SC), per Hidayatullah J.
45 Federated Municipal and Shire Council Employees Union of Australia v Melbourne Corpn 26 CLR 508, 530.
46 State of Bombay v Hospital Mazdoor Sabha (1960) 1 LLJ 251 [LNIND 1960 SC 19], 258 (SC), per Gajendragadkar J.
47 DN Banerji v PR Mukherjee (1953) 1 LLJ 195 [LNIND 1952 SC 85] (SC), per Chandrasekhara Aiyar J.
48 Baroda Borough Municipality v Workmen (1957) 1 LLJ 8 [LNIND 1956 SC 94] (SC) : AIR 1957 SC 110 [LNIND 1956 SC 94]:
(1957) 1 SCR 33 [LNIND 1956 SC 94], per SK Das J.
49 (1960) 1 LLJ 523 [LNIND 1960 SC 32], 531 (SC), per Subba Rao J.
50 Municipal Committee, Raikotv Ram Laljain (1965) 1 LLJ 652 (Punj) (DB), per Grover J.
51 Municipal Committee, Bhiwani v Padam Singh 1973 Lab IC 1512 (P&H) (DB), per Pandit J.
52 Administrator of the City of Nagpur v LC 1967 Lab IC 107 (Bom) (DB), per Deshmukh J.
53 Sirur Municipality v Workmen (1960) 2 LLJ 657 [LNIND 1960 BOM 38] (Bom) (DB), per Desai J.
54 Rajendarnagar Municipality v BV Perraju 1995 Lab IC 2102, 2106 (AP), per BK Somasekhara J.
55 Muzaffarpur Regional Dev Authority v Jagannath Jha (2009) 1 LLJ 783 (Pat) (DB) : (2008) 2 PJR 120.
56 State of Bombay v Hospital Mazdoor Sabha (1960) 1 LLJ 251 [LNIND 1960 SC 19] (SC) : AIR 1960 SC 610 [LNIND 1960 SC
19]: [1960] 2 SCR 866 [LNIND 1960 SC 19], per Gajendragadkar J.
57 1978 Lab IC 467 [LNIND 1963 SC 89], 510-11 (SC), per Krishna Iyer J.

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58 Indraprastha Medical Corpn v Govt of NCT, Delhi (2001) 3 LLN 562 (Del), per Sen J.
59 Bangalore WSSB v A Rajappa 1978 Lab IC 778, 782 (SC) per Chandrachud CJI.
60 Madras Pinjrapole v Workmen (1967) 2 LLJ 399 (Mad), per Kailasarn J.
61 Bombay Pinjrapole v Workmen (1971) 2 LLJ 393 [LNIND 1971 SC 382] (SC), per Mitter J.
62 Nathaniel Masih v UP Scheduled Caste Finance and Development Corpn Ltd (1991) 2 LIJ 347(All) (DB), per UC Srivastava J.
63 Shri Devadeveshwar Sansthan v SR Kadu (2002) 3 LLN 945 (Bom), per Mhatre J.
64 Ibid, 505, 513.
65 Harihar Bahinipati v State of Orissa (1965) 1 LLJ 501 (Ori) (DB), per Barman J.
66 Mgr, SP Jain Derasar v MG Balock (1993) 1 LLJ 523, 525 (Cuj) (DB), per Nanavati J.
67 Shri Cutchi Visa Oswal Derawasi Jain Mahajan Trust v BD Borude, IT (1987) 1 LLJ 81 [LNIND 1986 BOM 231], 84 (Bom), per
Pendse J.
68 Workmen of Baikuntha Nath Debasthan Trust v State of WB 1990 Lab IC 1586 (Cal).
69 Jagbir Singh v State of Himachal Pradesh (1999) 2 LLJ 304 (HP) (DB), per Sharma J.
70 Tiruchendur ASKOP Sangam v EO, AS Devasthanam (2003) 4 LLJ 390 (Mad .) per Kanakaraj J.
71 Shiromani GP Committee v PO, LC (2003) 4 LLJ 1060 (P & H), per MS Gill J.
72 Bangalore Water Supply and Sewerage Board v A Rajappa 1978 Lab IC 467 [LNIND 1963 SC 89], 486 (SC) : AIR 1987 SC 358 :
1986 Supp SCC 698, per Krishna Iyer J.
73 Corpn of City of Nagpur v Employees (1960) 1 LLJ 523 [LNIND 1960 SC 32], 535 (SC), per Subba Rao J.
74 PMM Mudaliar, Rathina Mudaliar and Sons v Raju Mudaliar (1965) 1 LLJ 489, 500 (Mys) (DB), per Govinda Bhatt J.
75 State of Bombay v Hospital Mazdoor Sabha (1960) 1 LLJ 251 [LNIND 1960 SC 19], 258-59 (SC), per Gajendragadkar J.
76 Madras Gymkhana Club Employees’ Union v Gymkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292] (SC), per Hidayatullah J.
77 Firm Tulsiram Sadanand Sarda v ACL (1961) 1 LLJ 711 (Bom) (DB), per Badkas J.
78 Mgmt of Safdarjung Hospital v Kuldip S Sethi (1910) 2 LLJ 266 (SC), per Hidayatullah CJI.
79 Rangaswamy v Registrar of Union (1961) 1 LLJ 599 (Mad), per Ramachandra Ayyar J.
80 Palace Administration Board v State of Kerala (1960) 1 LLJ 178 (Ker), per TK Joseph J.
81 Bhowra Colliery v Workmen (1962) 1 LLJ 378 [LNIND 1962 SC 38] (SC), per Sarkar J. .
82 Hanshree Apartment Owners’Assn v Hanshree Apartment Owner’s Employees’ Union (1992) 2 LLJ 423 [LNIND 1991 CAL 68],
425 (Cal), per Ganguli J.
83 Mgmt of Som Vihar Apartment Owners v Workmen (2002) 9 SCC 652 : AIR 2002 SC 2530 .
84 Md Manjur v Shyam Kunj Occupants Society AIR 2005 SC 1501 [LNIND 2004 SC 1340].
85 Commr of Inland Revenue v Maxse (1919) 1 KB 647, 657, per Scrutton LJ.
86 NE Merchant v Bombay Municipal Corpn (1968) 1 LLL 187, 190 (Bom), per Palekar J.
87 Fraser & Ross v Sambasiva Ayyar (1968) 1 LLJ 682 [LNIND 1968 MAD 1], 689 (Mad) (DB) : AIR 1968 Mad 134, per
Ananthanarayanan CJ.
88 Mgmt of Safdarjung Hospital v Kuldip S Sethi (1970) 2 LLJ 266 [LNIND 1970 SC 180], 273 (SC), per Hidayatullah CJI.
89 Federated Municipal...Employees’ Union v Melbourne Corpn 26 CLR 508, 554, per Isaacs and Rich JJ.
90 Ibid, 497-99, per Chandrachud CJI.
91 Bangalore Water Supply and Sewerage Board v A Rdjappa 1978 Lab IC 778, 783 (SC), per Chandrachud CJI.
92 Ratilal B Ravji v Tata Sports Club (1998) 1 LLJ 485, 492 (Bom), per Lodha J.
93 Manat of Safdarjung Hospital v Kuldip Singh Sethi (1970) 2 LLJ 266 [LNIND 1970 SC 180], 275 (SC) : AIR 1970 SC 1407
[LNIND 1970 SC 180]: (1970) 1 SCC 735 [LNIND 1970 SC 180], per Hidayatullah CJI.
94 Bangalore Water Supply v A Rajappa 1978 Lab IC 467 [LNIND 1963 SC 89] (SC) : AIR 1978 SC 548 [LNIND 1978 SC 70]:
(1978) 2 SCC 213 [LNIND 1978 SC 70], per Krishna Iyer J.
95 National Union of Commercial Employees v MR Meher (1962) 1 LLJ 241 [LNIND 1962 SC 66] (SC) : AIR 1962 SC 1080
[LNIND 1962 SC 66], per Gajendragadkar J.

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96 Rabindra Nath Sen v First IT of WB (1963) 1 LLJ 567 [LNIND 1962 CAL 172], 579 (Cal), per BN Banerjee J.
1 Ramakrishna Ayyar Vaidyanathan v Fifth Industrial Tribunal of WB (1968) 2 LLJ 597 [LNIND 1967 CAL 98] (Cal) : AIR 1968
SC 159, per DC Misra J.
2 TK Menon and Co v District Labour Officer (1966) 2 LLJ 613 (Ker) (DB) : AIR 1967 Ker 31, per Krishnamurthi Ayyar J.
3 Fraser & Ross v Sambasiva Ayyar (1968) 1 LLJ 682 [LNIND 1968 MAD 1], 693 (DB), per Ananthanarayanan CJ.
4 NE Merchant v Bombay Municipal Corpn (1968) 1 LLJ 187 (Bom) (DB), per Palekar J.
5 Bangalore WSSB v A Rajappa 1978 Lab IC 387 -88 (SC), per Krishna Iyer J.
6 Ibid, 388.
7 Entries 14 and 18 of the list 2 of the seventh schedule of the Constitution of India.
8 Entry 22 of list 3 of the seventh schedule of the Constitution of India.
9 Entry 24, Ibid.
10 Rajamanickam M v Mgmt of State Farm (2010) 1 LLJ 54 [LNIND 2009 MAD 2388] (Mad), per S J Mukhopadhyaya J.
11 Delhi Agricultural Mktg Board v Satya Pal Singh Dabas (2003) 4 LLJ 1039 (Del), per Mudgal J.
12 Baljeet Singh v Mgmt of State Farms Mgmt of India Ltd (2009) 1 LLJ 63 [LNIND 2008 DEL 1286] (Del) : (2010) 1 SLR 349, per
Sikri J.
13 Harinagar Cane Farm v State of Bihar (1963) 1 LLJ 692 [LNIND 1963 SC 71] (SC) : AIR 1964 SC 903 [LNIND 1963 SC 71]:
[1964] 2 SCR 458 [LNIND 1963 SC 71], per Gajendragadkar J.
14 Maheshwar Rao v State of Orissa (1974) 2 LLJ 127, 129 (Ori) (DB), per RN Misra J.
15 Royal Calcutta Golf Club Mazdoor Union v State of West Bengal (1957) 1 LLJ 218 [LNIND 1956 CAL 118], 222 (Cal), per Sinha
J.
16 (1967) 2 LLJ 720 [LNIND 1967 SC 292] (SC), per Hidayatullah J.
17 (1969) 1 LLJ 775 [LNIND 1968 SC 198] (SC), per Bhargawa J.
18 (1970) 2 LLJ 266 [LNIND 1970 SC 180] (SC), per Hidayatullah CJI.
19 Hotel & CIT Board v Automobile Proprietary Ltd, (1968) 3 All ER 399 (CA), per Lord Denning MR.
20 Inland Revenue Commr v Eccentric Club Ltd [1924] 1 KB 390, 42l.
21 Juggilal Kamlapat v Commr of Income-Tax AIR 1969 SC 932, per Ramaswami J.
22 LCB Gower, Gower’s Principles of Modem Company Law, 4th ed, 1979, p 112 et seq.
23 Tata Engg and Loco Co Ltd v State of Bihar AIR 1965 SC 40, 47 : [1964] 6 SCR 885 [LNIND 1964 SC 49], per Gajendragakdar
CJI.
24 Queen v Marshall and Exp Federated Clerks Union of Australia (1975) 132 CLR 595.
25 Rajasthan RSS Vyavasthapak Union v IT 1985 Lab IC 1023 (Raj) (DB), per Kasliwal J.
26 Abhimanu v Union Territory of Chandigarh (2002) 4 LLJ 1204, per MS Gill J.
27 Lalit Hari AC Pharmacy v Lalit Hari ACP Workers’ Union (1960) 2 LLJ 250 (SC), per Gajendragadkar J.
28 Registrar of Trade Unions v Mihir Kumar Gooha (1963) 1 LLJ 100 [LNIND 1962 CAL 145] (Cal) (DB), per Sinha J.
29 KC Das v State of West Bengal (1960) 2 LLJ 505 [LNIND 1959 CAL 145] (Cal), per PB Mukharji J.
30 Co-operative Milk Societies’ Union Ltd v State of WB (1958) 2 LLJ 61 [LNIND 1958 CAL 65] Cal), per PB Mukharji J.
31 Central Hair Cutting Saloon v Hrishikesh Pramanik (1956) 1 LLJ 596 (LAT).
32 Travancore Devaswom Board v State of Kerala (1963) 2 LLJ 218 (Ker), per Vaidialingam J.
33 VA Chedda v Bambai Mazdoor Union 1973 Lab IC 697 (Bom), per Vaidaya J.
34 Jaipur Milk Supply Scheme v LC 1976 Lab IC 863, 866 (Raj), per Lodha J.
35 Mgmt of Bihar KG Udyogsangh v State of Bihar 1977 Lab IC 466 [LNIND 1984 SC 252], 473 (Pat) (DB), per SK Jha J.
36 State of Rajasthan v IT (1970) Raj LW 137 (Raj).
37 Madhya Pradesh IK Sangh v State of MP (1972) 1 LLJ 374 (MP) (DB), per SMN Raina J.
38 Chief Engineer, Irrigation, Orissa v Harihar Patra 1977 Lab IC 1033 (Ori) (DB), per RN Misra J.

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39 Somu Kumar Chatterjee v District STC Engineer (1970) 2 LLJ 179, 187 (Pat) (DB), per Jha J.
40 Executive Engineer, CLA Division v Surjit Raj, Store Chowkidar (1995) 1 LLJ 41, 42, per Bala J.
41 Tea Board v First IT, West Bengal 1978 Lab IC (NOC) 179 (Cal) (DB).
42 Bihar Relief Committee v State of Bihar 1979 Lab IC 445 (Pat) (DB), per BS Sinha J.
43 JN Singh & Co Pvt Ltd v SN Saxena 1976 Lab IC 840 (All), per Hari Swarup J.
44 Mgmt of RFE Ltd v State of Bihar 1970 Lab I C 1119, 1123 (Pat) (DB), per Untwalia J.
45 Ananda Chandra Swain v State of Orissa (1973) 1 LLJ 508, 510 (Ori) (DB), per Panda J.
46 Tapan Kumar Jana v General Manager, Calcutta Telephones 1981 Lab IC (NOC) 68 (Cal) (DB).
47 Kunjan Bhaskaran v SDO, Telegraphs Changanassery 1983 Lab IC 135, 141 (Ker), per MP Menon J.
48 Shops & Commercial Workers’ Union v Mgmt of AUTC Board 1980 Lab IC 892 (Del), per Sachar J.
49 Security Paper Mill v Hari Shankar Namdeo (1980) 2 LLJ 61, 63 (MP) (DB), per GP Singh CJ.
50 PWD Employees Union v State of Gujarat 1987 Lab IC 89, 96 (Guj) (DB), per Mehta JJ.
51 Vasudeo Ambre v State of Maharashtra (1988) 1 LLJ 464 [LNIND 1987 BOM 469], 465 (Bom) (DB), per Bharucha J.
52 Mahila Samiti, Tikamgarh v State of Madhya Pradesh 1989 Lab IC 891 (MP) (DB), per BC Verma J.
53 Suresh Kumar v Union of India (1989) 2 LLJ 110 [LNIND 1989 DEL 18], 112 (Del), per Kirpal J.
54 Satyendra Singh Rathore v Rajasthan RPP Mandal (1989) 2 LLJ 289, 292 (Raj) (DB), per Byas J.
55 Union of India v Rajendra Kumar (2005) 4 LLJ 808 (Utt), per Tandon J.
56 State of Gujarat v Ramesh M Rathod (2004) 2 LLJ 434 (Guj .) (DB).
57 MP Police Housing Corporation v Sher Singh (2012) 4 LLJ 146 (MP) (DB) : (2013) 1 SCT 78.
58 Nathaniel Masih v UP Scheduled Caste FDC td 1989 Lab IC 2276, 2278 (All) (DB), per Srivastava J.
59 Karnani Properties Ltd v State of WB 1990 Lab IC 1677 [LNIND 1990 SC 449], 1682 (SC), per SC Agarwal J.
60 Mahila Griha Udyog v Ratantmala D Koken 1996 Lab IC 644 (Bom), per Lodha J.
61 Visakhapatnam Dock Labour Board v Stevedor’s Assn (1970) 1 LLJ 46 [LNIND 1969 SC 324], 57 (SC) : AIR 1970 SC 1625 :
(1969) 2 SCC 801, per Vaidialingam J.
62 Workmen of Calcutta Dock Labour Board v Employers (1973) 2 LLJ 254 [LNIND 1973 SC 177], 258 (SC), per Grover J.
63 Mgmtof DLB, Visakhapatnam v IT (1996) 1 LLJ 5 -6 (AP), per Rama Krishnan Raju J.
64 PM Murugappa Mudaliar, RM & Sons v P Raju Mudaliar (1965) 1 LLJ 489, 500 (Mys) (DB), per Govinda Bhatt J.
65 William Frederic De Penning v Third Industrial Tribual AIR 1959 Cal 749, per Sinha J.
66 Palace Administraton Board v State of Kerala (1960) 1 LLJ 178 (Ker), per TK Joseph J.
67 Bhawani Singh v judge, IT 1976 Lab IC 76 (Raj), per Lodha J.
68 Bar Assn Canteen v Chief Commr, Delhi (1967) 2 LLJ 226 (Punj), per SK Kapur J.
69 Brahma Samaj Education Society v WBC Employees’ Assn (1964) 1 LLJ 326 [LNIND 1963 CAL 120] (Cal), per BN Banerjee J.
70 Bhopal Singh v Union of India 1977 Lab IC 494 (Raj), per Rajinder Sachar J.
71 Jamul Cement Works v State Industrial Court (1968) 1 LLJ 131 (MP) (DB).
72 Gram Panchayat, Sawargaon v Jamnaprasad R Prasad (1968) 1 LLJ 222 (Bom) (DB), per Abyankar J.
73 Atma Ram v IT 1968 Lab IC 1546 (Del), per Shankar J.
74 Suptdg Engineer, National Highway Project v Baidar Lenka 1973 Lab IC 553, 554 (Ori) (DB), per GK Misra CJ.
75 D Padmanabhan v State of Tamil Nadu (1976) 2 LLJ 83, 89-90 (Mad), per V Ramaswami J.
76 Kishana Ram v Union of India 1973 Lab IC 1577 (Raj), per Shinghal J.
77 Raj Ratna Seth v Ashok Bhasin 1982 Lab IC 338 (Guj) (DB), per Divan CJ.
78 Mohd Akil v RK Baweja 1983 Lab IC 69 (NOC) (Del), per ML Jain J.
79 P Jose v Director, Central Imtitute of Fisheries 1986 Lab IC 1564, 1566 (Ker), per Radhakrishna Menon J.
80 JJ Shrimali v District Development Officer, Jilla Panchayat 1989 Lab IC 689, 697 (Guj) (DB), per Ahmadi J.

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81 Subhas Bhaskar Cadre v Second LC (1993) 1 LLJ 1001 [LNIND 1993 BOM 98] (Bom) (DB), per Pendse J.
82 A Pichal Nadar v PO, LC (2002) 3 LLN 1107 (Mad), per Murugesan J.
83 District Red Cross Society v PO, LC (2001) 2 LLN 554 (P&H) (DB), per Sudhalkar J.
84 Senior Supdt Telegraph (Traffic) v Santosh Kumar Seal AIR 2010 SC 2140 [LNIND 2010 SC 397]: (2010) 3 LJ 600 : (2010) 6
SCC 773 [LNIND 2010 SC 397], per RM Lodha J.
85 Government of India (2002), Report of NCL-II, Chap 13, para 6.38, p 39.
86 Ibid, para 6. 39, p 39.
87 Thangavati S. v Presiding Officer, Labour Court (2010) 1 LLJ 101 [LNIND 2009 MAD 1464] (Mad) : (2009) 4 MLJ 893 [LNIND
2009 MAD 1464], per Ms Aruna Jagadeesan J.
88 Field Marshal Manekshaw Auditorium v Presiding Officer, Labour Court, (2010) 2 LLJ 220 (P&H) : (2009) 156 PLR 291, per
Kannan J.
89 EM Rao, Globalisation and Dispute Settlement Process, Indian Journal of Labour Economics 2001, Vol 44, No 3, p 459.
90 Workmen of Hindustan Lever Ltd v Hindustan Lever Ltd 1984 Lab IC 1573, 1575 (SC), per Desai J.
91 Madras GCE Union v Gymkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292], 728 (SC), per Hidayattulah J.
92 Mgmt of Safdarjung Hospital v Kuldip S Sethi (1970) 2 LLJ 266 [LNIND 1970 SC 180], 271 (SC), per Hidayatullah CJI.
1 Ludwig Teller, The Law Governing Labor Disputes and Collective bargaining, 1940, Vol 1, p 476, s 154.
2 Titagarh Jute Co Ltd v Sriram Tiwari 1979 Lab IC 513 (Cal), per Chakravorty J.
3 Ram Prasad Viswakarma v Chairman, Industrial Tribunal (1961) 1 LLJ 504 [LNIND 1960 SC 333], 507 (SC) : AIR 1961 SC 857
[LNIND 1960 SC 333], per Das Gupta J.
4 DN Banerji v PR Mukherjee (1953) I LLJ 195, 199, per Chandrasekhara Aiyar J.
5 Bharat Iron Works v Bhagubhai Balubhai Patel 1976 Lab IC 4 [LNIND 1975 SC 406] (SC), per Goswami J.
6 Indian Cable Co Ltd v Workmen (1962) 1 LLJ 409 [LNIND 1962 SC 100], 414 (SC) : (1962) Supp (3) SCR 589, per Venkatarama
Ayyar J.
7 Federated Saw Mill TYGWWE Assn v James Moore & Sons Proprietary Ltd 8 CLR 465, per Griffith CJ.
8 Associated Cement Companies Ltd v Workmen (1960) I LLJ 491, 494-95 (SC) : AIR 1960 SC 777 [LNIND 1960 SC 60], per
Gajendragadkar J.
9 State Banks Staff Union v State Bank of India (1991) 2 LLJ 163, 169 (Mad) (DB), per Nainar Sundaram J.
10 Shambhu Nath Goyal v Bank of Baroda, Jullundur (1978) 1 LLJ 484 [LNIND 1978 SC 35] (SC), per Desai J.
11 (1960) 1 All ER 274, 279 (PC), per Lord Denning.
12 Huntley v Thornton (1957) 1 All ER 234.
13 Conway v Wade (1909) AC 506, 509 (HL).
14 Federated Saw Mill, Timber Yard and General Wood Workers Employees’ Assn v james Moore & Sons Proprietary Ltd 8 CLR
465, 488, per Grifith CJ.
15 NK Sen v Labour Appellate Tribunal (1953) 1 LLJ 6, 12 (Bom) (DB), per Chagla CJ.
16 Madras GCE Union v Gymkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292], 728 (SC), per Hidyatullah J.
17 Burmah Shell Oil Storage & Distributing Co of India Ltd v Government of Tamil Nadu (1978) 2 LLJ 230, 235 (Mad), per G
Ramanujan J.
18 Shambhu Nath Goyal v Bank of Baroda, Jullundur (1978) 1 LLJ 484 [LNIND 1978 SC 35], 486 (SC) : AIR 1978 SC 1088
[LNIND 1978 SC 35]: (1978) 2 SCC 353 [LNIND 1978 SC 35], per Desai J.
19 Sindhu Resettlement Corpn Ltd v Industrial Tribunal of Gujarat (1968) 1 LLJ 834 [LNIND 1967 SC 268] (SC) : AIR 1968 SC 529
[LNIND 1967 SC 267], per Bhargava J.
20 Fedders Lloyd Corpn Pvt Ltd v Lt Governor 1970 Lab IC 421 [LNIND 1969 DEL 112], 427 (Del) (DB), per Deshpande J.
21 Orissa Industries Pvt Ltd v PO, IT 1976 Lab IC 285, 289 (Ori) (DB), per GK Misra CJ. J.
22 Village Papers Pvt Ltd v State of HP 1993 Lab IC 99, 117-28 (HP) (FB), per Divinder Gupta J.
23 Mgmt of Radio Foundlltion Engineering Ltd v State of Bihar 1970 Lab IC 1119, 1125 (Pat) (DB), per Untwalia J.
24 Bombay Union of Journalists v The Hindu, Bombay (1961) 2 LLJ 436 [LNIND 1961 SC 316], 439 (SC), per Shah J.

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25 C Manuel v Mgmt of Needle Industries (India) Ltd (1981) 2 LLJ 102, 115 (Mad), per Sundaram J.
26 Shambhu Nath Goyal v Bank of Baroda (1978) 1 LLJ 484 [LNIND 1978 SC 35] (SC) : AIR 1978 SC 1088 [LNIND 1978 SC 35]:
(1978) 2 SCC 353 [LNIND 1978 SC 35], per Desai J.
27 New Delhi Tailoring Mazdoor Union v SC Sharma & Co Pvt Ltd [1979] 39 FLR 195.
28 Animesh Chandra Dutta Roy v Labour Court, Tripura 1975 Lab IC 1065 (Gau) (DB), per Bindra J.
29 Mgmt of Needle Industries v PO, Labour Court (1986) 1 LLJ 405, 407 (Mad) (DB), per Shanmukam J.
30 Andrew Yule and Co Ltd v Fifth IT 1979 Lab IC 204 (Cal) (DB), per Pyne J.
31 Ramakrishna Mills (C) Ltd v Govt of TN (1984) 2 LLJ 259 [LNIND 1984 MAD 23], 265 (Mad) (DB), per Naimar Sundram J.
32 Shambhu Nath Goyal v Bank of Baroda, Jullundur (1978) 1 LLJ 484 [LNIND 1978 SC 35] (SC) : AIR 1978 SC 1088 [LNIND
1978 SC 35]: (1978) 2 SCC 353 [LNIND 1978 SC 35], per Desai J.
33 Chairman, Bank of Cochin v All Kerala BE Federation 1978 Lab IC 262 -63 (Ker) (DB), per Gopalan Nambiyar CJ.
34 NK Sen v Labour Appellate, Tribunal (1953) 1 LLJ 6 (Bom) (DB), per Chagla CJ.
35 Ibid, 9 per Chagla CJ.
36 TK Padmanabha Menon v PV Kora 1968 Lab IC 1134 (Ker), per Isaac J.
37 JT Stratford & Son Ltd v Lindley [1965) 3 All ER 102 (HL).
38 (1909) AC 506, 510; White v Riley [1921) 1 Ch 15, 19.
39 [1957) 1 All ER 234, 254.
40 British Broadcasting Corpn v Hearn [1978) 1 All ER 111, 117, 120, 122 (CA).
41 Cyrile Grunfield, Modern Trade Union Law, p 364.
42 Gen Secy, National & Grindlays BE Union v I Kannan 1978 Lab IC 648, 651 (Mad), per NS Ramaswami J.
43 Conway v Wide [1909) AC 506, 509, 513, 516, 519 (HL).
44 Khanna Talkies v IT, Delhi 1974 Lab IC 831, 833 (Delhi), per PN Khanna J.
45 PMM Mudaliar, Rathina Mudaliar & Sons v Raju Mudaliar (1965) 1 LLJ 489, 496 (Mys), per Hegde J.
46 ANZ Grindlays Bank Ltd v Union of India 2005 AIR SCW 5785, per Mathur J.
47 Madras GCE Union v Gymkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292], 731 (SC), per Hidayatullah J.

End of Document

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER I Preliminary

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER I Preliminary

S. 2. Definitions.—

Employers and workmen

The definition of ‘industrial dispute’ expressly states that not disputes and differences of all sorts, but only those which
bear upon the relationship of employer and workmen, are contemplated. Except in the last case, ie, a dispute ‘between the
workmen and workmen’, one of the parties to an ‘industrial dispute’ must be an ‘employer’ or a ‘class of employers’. The
first point, therefore, to be noticed, which is perhaps self-evident, is that in the phrase ‘employer and workmen’, the plural
may include the singular, on either side or any permutation of singular or plural, the masculine including the feminine. The
expression, employer, has to be understood to mean any industrial employer. The definition of ‘industrial dispute’ is
worded in very wide terms and unless they are narrowed by the meaning given to the word ‘workmen’, it would seem to
include all ‘employers’, all ‘employment’ and all ‘workmen’, whatever the nature or scope of the employment may be.48
The words of the definition may be paraphrased thus: ‘any dispute which has connection with the workmen being in, or out
of service or employment’.49In order, therefore, to determine whether a controversy, difference or a dispute is an ‘industrial
dispute’ or not, it must first be determined whether the workman concerned or workmen sponsoring the cause, satisfy the
conditions of s 2(s) of the Act. workmen have been given the right of collective bargaining with regard to various matters
in which they are interested; their terms of service, the security of their service, their pay, their wages, their bonus, etc,
which places limitations upon the rights of the employer but the limitation placed upon the employer is not with regard to
all his employees. The limitations are confined to a limited class, constituted by the expression ‘workmen’ as used in the
Act, and outside the class of ‘workmen’, the Act imposes no liability on the employer.50 In the absence of an employer-
employee relationship, between the contract workers and the principal employer, a dispute regarding the regularisation of
the service of contract Workers, cannot be brought within the definition of ‘industrial dispute’ in s 2(k) of the IDA.51

In Rajaji Nagar Co-op Bank, Bhoruka J of the Karnataka High Court held that a dispute between the employees of a
cooperative society and the management of the society, relating to their employment, is clearly excluded from the purview
of the definition of ‘industrial dispute’, within the meaning of s 2(k). Under the ID Act, the reference for the resolution of
the said dispute has to be made either to the industrial tribunal or to the labour court, whereas, under the co-operative law,
it has to be made to the registrar of co-operative societies.52 The learned judge distinguished the decision rendered in Co-
operative Central Bank, in which the Supreme Court had held that, on a close examination of the provisions of the Andhra
Pradesh Co-operative Societies Act, it would appear that the registrar could not have granted any relief in respect of the
service conditions of the employees and therefore, a reference under the ID Act was maintainable.53 It is the community of
interest of the class as a whole-class of employers or class of workmen who furnish the real nexus between the dispute, and
the parties to the dispute.54 In the words of Isaac J:

The very nature of an ‘industrial dispute’, as distinguished from an individual dispute, is to obtain new industrial conditions, not
merely for the specific individuals then working from the specific individuals then employing them, and not for the moment only,
but for the class of employees from the class of employers ... It is a battle by the claimants, not for themselves alone.55

Notwithstanding the fact that the language of s 2(k) is wide enough to cover a dispute between an employer and a single
employee, the scheme of the Act appears to contemplate that the machinery provided therein should be set in motion to
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settle only such disputes as involve the right of workmen as a class and that a dispute touching the individual rights of a
workman, was not intended to be the subject of an adjudication under the Act.56 The term ‘industrial dispute’ conveys the
meaning that the dispute must be such as would affect large groups of workmen and employers, ranged on opposite sides.
Even a single employee’s dispute may develop into an industrial dispute, when it is taken up by a union or a number of
workers, who make a concerted demand for redress.57The applicability of the Act to an individual dispute, as distinguished
from a dispute involving a group of workmen, is excluded, unless the workmen, as a body or a considerable section of
them, make common cause with the individual workman.58 But, as Shelat J observed:

The community of interest does not depend on whether the concerned workman was a member of the union or not, at the date
when the cause occurred, for, even without his being a member, the dispute may be such that other workmen, by having a common
interest therein, would be justified in taking up the dispute as their own and espousing it.59

Workmen and Workmen

Here also, like ‘employers and workmen’, the plural may include the singular on either side, or any permutation of singular
or plural, the masculine including the feminine. But it may happen, though rarely, that the dispute is between two sets of
workmen in the same establishment; such a dispute has been brought within the ambit of the industrial dispute.60 The
dispute must be between the workmen as such, for whom trade unions may, of course, act in a representative capacity, but
a dispute between trade unions as such, is a pure inter-union dispute and cannot be an industrial dispute.61 From the
decision of the judicial committee of the privy council in Beetham,62 and the decision of the court of appeal in R v National
Arbitration ,63 it would appear that the union may take the initiative, provided its workmen subsequently, adopt or ratify its
conduct. Lord Sterndale MR, observed:

A dispute between ‘workmen and workmen’, in connection with the employment of a person, namely, the plaintiff, the dispute
being that the men in the shop insisted that no skilled man should be employed unless he belonged to the currier’s union, was a
‘trade dispute’ within the definition. 64

The House of Lords held that a controversy between two unions, which was not connected with the employment or non-
employment or with the terms of employment or with the conditions of labour of any person, did not fall within the
meaning of trade dispute, as defined in s 5(3) of the Trade Disputes Act 1906,65 but a dispute springing out of the rivalry of
one union with another, has been held to be a trade dispute by the court of appeal. In India, so far, there is no decision of
any High Court or the Supreme Court, dealing with a dispute between ‘workmen and workmen’. The words have been
used for providing for contingencies of such disputes arising when the trade union movement in the country gets properly
organised, on the lines of that in England, USA and Australia.

Individual Dispute v Industrial Dispute

The concept of ‘trade dispute’ in England, did not have any uniform or well-settled connotation. It depended upon its
definition in each of the statutory enactments, in the light of the scheme of the particular statute. ‘Trade disputes’ were not
the subject-matter of the Common Law of England. The earliest definition of a ‘trade dispute’ is to be found in the
Conspiracy and Protection of Property Act 1875. With minor changes in the punctuation, this definition was adopted in the
Trade Disputes Act 1906 and then, in the Industrial Courts Act 1919. In the subsequent legislation, viz, the National
Arbitration Order 1940 and the Industrial Disputes Order 1951, the same definition was retained. The definition in these
orders was considered in Rex v National Arbitration Tribunal , where the dispute between a town clerk and the municipal
corporation was referred to the national arbitration tribunal, under the Order of 1940. But, under the Industrial Disputes
Order 1951, the national arbitration tribunal was superseded by the industrial disputes tribunal, which proceeded with the
adjudication of the reference. The municipal corporation applied to the King’s Bench Division for an order prohibiting the
tribunal from proceeding with the adjudication, on the plea that as the dispute in question was between a single workman
and the employer, it was de hors the scope of the expression ‘trade dispute’, as defined in the orders of 1940 and of 1951,
hence, the tribunal had no jurisdiction to adjudicate upon the matter. Construing the provisions of the order of 1940, Lord
Goddard held that the definition of the term ‘trade dispute’ had to be read in the light of s 1(1) of the Interpretation Act of
1889 and so, an ‘individual dispute’ would be included in the purview of the expression ‘trade dispute’. Hence, the dispute
between one employer and one workman was a ‘trade dispute’ within the meaning of the order of 1940. But while
construing the various provisions of the order of 1951, it was held that an ‘individual dispute’ was not a ‘trade dispute’
within the meaning of that order, because the whole tenor of the order of 1951 and the fact that throughout that order, the
word ‘employer’ in the singular is used in conjunction with the word ‘workers’ in the plural, indicates the intention that
these words should be interpreted literally and in consequence, s 1(1) of the Interpretation Act 1889 should not apply. In
Australia, sub-s 35 of s 51 gave legislative power with respect to ‘conciliation’ and ‘arbitration’, for the prevention and

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settlement of ‘industrial disputes’ extending beyond the limits of any one state. The expression ‘industrial dispute’ in the
context of this entry, was construed to be confined to collective disputes only.66 In other words, the term ‘industrial
dispute’ was construed in its broad sense, in the context of the constitutional provisions.

In India, the expression ‘industrial dispute’, contained in this Act, has been construed by the Supreme Court so as to
exclude individual disputes because of the scheme of the Act. The view taken by Supreme Court in Central Provinces
Transport Services, was affirmed in Newspapers Ltd.67 In Dimakuchi Tea Estate, the court held that the liberal
construction of the expression ‘any person’, used in the definition of ‘industrial dispute’, was impermissible, despite the
wide amplitude of these words, and evolved the test of community of interest of the workmen of the establishment, with
the concerned workman.68 In Dharam Pal Prem Chand, the court said that notwithstanding the width of the words used in
s 2(k), a dispute raised by a single workman cannot become an industrial dispute, unless it is supported either by his union
or in the absence of a union, by a substantial number of the workmen.69 This principle was reiterated in Indian Express.70
In WIMCO, the court said that after the Dimakuchi case, there is no doubt that a dispute relating to ‘any person’ becomes a
dispute where the person in respect of whom it is raised, is one in whose employment, non-employment, terms of
employment or conditions of labour, the parties to the dispute have a direct or substantial interest.71

A dispute relating to the house rent allowance and revision of the pay-scale of the employees in a particular establishment,
is a dispute of a particular category of workmen borne on a staffing pattern. The union which collectively represents the
cause of the employees, has an interest in their conditions of service. This interest does not depend upon the association or
disassociation of some of the employees who may be affected by such dispute. For being an industrial dispute, the consent
or interest of the holder of a particular post is irrelevant. Therefore, the refusal of an individual employee to participate in
the industrial dispute, does not affect the validity of the dispute.72Section 2A introduces a fiction to the effect that an
individual dispute connected with a ‘discharge, dismissal, retrenchment or termination’, is deemed to be an ‘industrial
dispute’ notwithstanding that no other workman, nor any union of workmen, espouses such a dispute. Hence, a workman
who has been discharged, dismissed or retrenched, or whose services have been otherwise terminated, can himself raise a
dispute with respect to such dismissal etc but that does not mean that such a dispute can be raised by such workman alone
and not by the workmen of the establishment collectively. The workmen of the establishment can always raise an
‘industrial dispute’ with respect to the discharge or dismissal etc of a workman, if they have a community of interest in his
employment or non-employment. However, the distinction that in the former case, the dispute is between the individual
workman and the employer and in the latter case, it is between the workmen of the establishment as a class, and the
employer is to be borne in mind. In the former case, the concerned workman himself is a party to the dispute and not the
workmen collectively, while in the latter case, the workmen collectively, are the party and not the concerned workman,
individually. A dispute relating to the termination of service, discharge or dismissal of a workman, referred to adjudication
under s 2A, cannot be settled by the union with the management, by entering into a settlement, pending such adjudication,
without the consent of the worker.73

However, except the disputes relating to the ‘discharge, dismissal, retrenchment or otherwise termination of service’, all
other disputes relating to the terms of employment or conditions of labour of an individual workman, such as transfer,
wages, bonus, increments or promotion etc, will require espousal, by a substantial number of fellow workmen, in order to
partake the character of an industrial dispute.74 Similarly, a dispute which does not relate to the action of the employer
discharging, dismissing, retrenching or otherwise terminating the service of a workman, but involves the question, whether
there was a relationship of employment between the employer and the workman, cannot be the subject-matter of s 2A, and
would require a valid espousal.75 All other disputes, enumerated in Schs 2 and 3, are of, a collective nature and as such,
would not call for the espousal of a substantial number of workmen or the union. For instance, a dispute about the
necessity to frame a gratuity scheme for the workers of a concern, is from its very nature and from the very outset, a
collective ‘industrial dispute’ and there is no question of the necessity of sponsoring such a dispute, either by the majority
of the workmen or by a substantial number of them, before a reference can be made.76

Number of workmen required for espousal of a dispute

There is nothing in the Act requiring that the dispute or difference should be raised by all the workmen of the industry, or
by everyone of them, or even by a majority of them. It is enough if the controversy is between the employer on the one
side and the workmen on the other. So also, there is nothing in the Act to require that the workmen raising the controversy,
should form a majority of the employees. If the controversy affects, or will affect the interests of workmen as a class, the
law envisages that, in the interests of the industrial peace, it should be examined and decided in one of the modes provided
by it. An individual dispute cannot, however, be said to be an industrial dispute, unless the other workmen associate
themselves with it. No hard and fast rule can possibly be laid down in such circumstances, to decide when and by how
many workmen, an ‘industrial dispute’ can be raised within the meaning of the Act, or whether a minority union or even an
unrecognised union, can raise an industrial dispute. It is enough if there is a potential cause of disharmony, which is likely
to endanger industrial peace and a substantial number of workmen raise a dispute about it, for then, it is permissible to take

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the view that it is an ‘industrial dispute,77 In order that an individual dispute may become an industrial dispute, it has to be
established that it had been taken up by the union of employees or by an appropriate number of employees of the
establishment.78

A collective dispute, however, does not mean that all the workmen or a majority of them, from the establishment
concerned, should sponsor and support the dispute. All that is necessary is that the dispute, in order to become an industrial
dispute, should have the support of a substantial section of the workmen concerned in the establishment.79 But for this
purpose, the employees, who have already been dismissed and whose cause is not in question, cannot be taken into account
while constituting an appreciable section of the employer’s establishment, as they are not members of the employer’s
establishment at all and cannot be considered as such for the purpose of deciding whether there is an industrial dispute or
not.80 Even a minority group of workmen of an establishment, can make a demand and thereby, raise an industrial dispute
which, in a proper case, may be referred for adjudication.81 However, no hard and fast rule can be laid down as to the
number of workmen whose association will convert an individual dispute into an industrial dispute. It must depend upon
the facts of each case and the nature of the dispute. The number of workmen must, however, be such as to lead to an
inference that the dispute is one which affects the workmen as a class.82 In Indian Express (supra), the Supreme Court held
that about 25 per cent of the workmen of the establishment, would constitute the requisite number for a valid espousal of
the dispute. But in a case of espousal by a union, it is not sufficient that the union had in its membership, a substantial
number of workmen from the establishment in which the concerned workman was employed. It must further be shown that
a substantial number of such workmen participated in or acted together and arrived at an understanding by a resolution or
by other means, and collectively supported the dispute. The tribunal has, therefore, to consider the question as to how
many of the fellow workmen actually espoused the cause of the concerned workman, by participating in the particular
resolution of the union. In the absence of such determination by the tribunal, it cannot be said that the individual dispute
has acquired the character of an industrial dispute. The tribunal will not acquire jurisdiction to adjudicate upon such
dispute.83

Espousal by Trade Unions

The unions are generally of two types, the first type consists of the unions of workmen of a particular establishment, and
the second type consists of general unions of which the workmen of a particular establishment become members. As far as
a union of the workmen of the establishment itself is concerned, the problem of espousal by them generally presents little
difficulty, as the workmen who are members of such unions generally, have the community of interest with an individual
employee who is one of their fellow workmen. However, the difficulties arise when the cause of a workman, in a particular
establishment, is sponsored by a union which is not of the workmen of that establishment, but is one of which membership
is open to workmen of other establishments as well, in that industry. In such a case, a union which has only a microscopic
number of workmen as its members, cannot sponsor any dispute arising between the workmen and the management.84 In
The Hindu, the facts disclosed that the management of the ‘Hindu’ had inter alia three working journalists. Two of the
three working journalists, ie, Salivateswaran and Venkateswaran, had become members of the Bombay Union of
Journalists. The third working journalist, ie, Tiwari, had not become a member of that union. An ‘industrial dispute’, with
respect to the dismissal of Salivateswaran, was espoused by the union. The Supreme Court observed thus:

Firstly, the Act excluded its application to an ‘individual dispute’, as distinguished from a dispute involving a group of workmen,
unless such a dispute is made a common cause by a body from a considerable section of workmen, (ii) the members of a union who
are not workmen of the employers against whom the dispute is sought to be raised, cannot, by their support, convert an ‘individual
dispute’ into an ‘industrial dispute’.

The court further observed that, in each case while ascertaining whether an individual dispute has acquired the character of
an ‘industrial dispute’, the test is whether on the date of the reference the dispute was taken up as supported by the union of
the workmen or by an appreciable number of workmen. In order, therefore, to convert an ‘individual dispute’ into an
‘industrial dispute’, it has to be established that it had been taken up by the union of the employees of the establishment or
by an appreciable number of employees of the establishment. The dispute in question being an individual dispute, could
only be converted into an industrial dispute by espousal by a union of the employees or by an appreciable number of the
employees of the ‘Hindu’, as the Bombay Union of Journalists was a union of the employees in the industry of journalism
in Bombay, it was not a union of employees of the ‘Hindu’, Bombay. On this view of the matter, the court held that the
support of Bombay Union of Journalists could not convert the ‘individual dispute’ into an ‘industrial dispute’. The
members of such a union could not be said to be the persons substantially and directly interested in the dispute between the
workman concerned and his employer.85 In Dharampal Premchand, however, Gajendragadkar CJI observed that the
‘Hindu’ case should not be read as laying down any hard and fast rule:

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(i) Notwithstanding the width of the words used in section 2(k) of the Act, a dispute raised by an individual workman cannot
become an ‘industrial dispute’ unless it is supported either by his union or in the absence of a union, by a substantial
number of workmen;
(ii) a union may validly raise a dispute though it may be a minority union of the workmen in an establishment;

(iii) if there is no union of workmen in an establishment, a group of employees can raise the dispute, which becomes an
industrial dispute even though it is a dispute relating to an individual workman; and
(iv) where the workmen of an establishment have no union of their own and some or all of them have joined a union of
another establishment, belonging to the same industry, if such a union takes up the cause of the workmen working in the
establishment, the dispute can become an ‘industrial dispute’, if such a union can claim a representative character in a
way that its support would make the dispute an industrial dispute.86

The learned Chief Justice held that a dispute of 18 workmen, could validly be espoused by the union in which only these
18 workmen of the employer were members, as these workmen could raise a dispute by themselves in a formal manner,
because 18 out of 45 is a substantial number. The rationale of this holding is that, if a large number of workmen of a
particular establishment become members of a union which is not strictly speaking, a union of that establishment, such
union can espouse the cause of an individual workman who is its member, provided that a substantial number of his co-
workers have espoused his cause through that union. It is thus clear that the sponsoring of an individual dispute by any
union is not enough to convert it into an ‘industrial dispute’. In Nellai Cotton Mills, the Madras High Court held that the
mere fact that a substantial number of the workmen of the establishment in which the concerned workman was employed,
were also members of the union, would not constitute an espousal. It must be shown that they participated in or acted
together and arrived at an understanding by a resolution or by other means and collectively supported the dispute. The
tribunal has, therefore, to consider the question as to how many of the fellow workmen actually espoused the cause of the
concerned workman by participating in the particular resolution of the union. In the absence of such determination by the
tribunal, it cannot be said that the individual dispute acquired the character of an industrial dispute, and the tribunal will
not acquire jurisdiction to adjudicate upon the dispute.87 What a substantial or considerable number of workmen would be,
in a given case, would depend on the particular facts of the case. The fact that an ‘industrial dispute’ is supported by other
workmen will have to be established either in the form of a resolution of the union of which the workman may be a
member, or of the workmen themselves, who support the dispute or in any other manner. From the mere fact that a general
union, at whose instance an ‘industrial dispute’ concerning an individual workman is referred for adjudication, has on its
rolls, a few of the workmen of the establishment as its members, it cannot be inferred that the individual dispute has been
converted into an ‘industrial dispute’.88 Nevertheless, in order to make the dispute an ‘industrial dispute’, it is not
necessary that there should always be a resolution of a substantial or an appreciable number of workmen. What is
necessary is that there should be some expression of collective will of a substantial or an appreciable number, of workmen,
treating the cause of the individual workman as their own cause.89 A retired workman cannot raise an industrial dispute
against his former employer, it would however be open to the trade union to raise a dispute, and the workmen could
espouse the cause of a person, who at one point of time had been workman and only ceased to be so on retirement.90

The decision of Supreme Court in Forbes Gokak, is a standing illustration of the misconceptions that creep so frequently
into the judicial decision-making process. Before analysing the decision, it is necessary to state the facts in brief: the
workman, who was employed in the company, claimed promotion as a clerk. When this was not granted, the appellant
raised an industrial dispute, which was referred for adjudication. In their written statement before the tribunal, the
management denied the workman’s claim for promotion on merits, apart from contending that the individual dispute raised
by the appellant was not an industrial dispute within the meaning of s 2(k), as the workman was neither supported by a
substantial number of workmen nor by a majority union. On the other hand, the workman claimed that his cause was
espoused by the Gokak Mills Staff Union. Before the tribunal, apart from examining himself, the General Secretary of the
Union was examined as a witness in support of the workman’s claim. The General Secretary affirmed that the appellant
was a member of the union, duly supported by documentary evidence. The tribunal came to the conclusion that in view of
the evidence given by the General Secretary and the documents produced, it was clear that the appellant’s cause had been
espoused by the union which was one of the unions of the company. It also noted that no record had been produced by the
respondent to show that the management had taken into account the workman’s production records, efficiency, attendance
or behaviour while denying him promotion. The tribunal concluded that the act of the respondent in denying promotion to
the appellant amounted to unfair labour practice. An award was passed in favour of the appellant and the respondent was
directed to promote the appellant as a clerk from the date his juniors were promoted and to give him all consequential
benefits. A single judge of Karnataka High Court dismissed the writ petition by the employer, which was reversed by a
Division Bench in appeal. The Division Bench came to the conclusion that an individual dispute is not an industrial dispute
unless it directly and substantially affects the interest of other workmen. Secondly, it was held that an individual dispute
should be taken up by a Union which had representative character or by a substantial number of employees before it would

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be converted into an industrial dispute neither of which had happened. The Division Bench held that there was nothing on
record to show that the workman was a member of the union or that the dispute has been espoused by the union by passing
any resolution in that regard. In appeal by the workman, Ms Ruma Pal J (for self and Thakker J) observed thus:

In the present case, it was not questioned that the appellant was a member of the Gokak Mills Staff Union. Nor was any issue
raised that the Union was not of the respondent establishment. The objection as noted in the issues framed by the Industrial
Tribunal was that the Union was not the majority Union. Given the decision in Dharam Pal’s case, the objection was rightly
rejected by the Tribunal and wrongly accepted by the High Court (para 6) ... As far as espousal is concerned there is no particular
form prescribed to effect such espousal. Doubtless, the Union must normally express itself in the form of a resolution which should
be proved if it is in issue. However proof of support by the Union may also be available aliunde. It would depend upon the facts of
each case. The Tribunal had addressed its mind to the question, appreciated the evidence both oral and documentary and found that
the Union had espoused the appellant’s cause. (para 7) ... The Division Bench misapplied the principles of judicial review under
Article 226 in interfering with the decision. It was not a question of there being no evidence of espousal before the Industrial
Tribunal. There was evidence which was considered by the Tribunal in coming to the conclusion that the appellant’s cause had
been espoused by the Union. The High Court should not have upset this finding without holding that the conclusion was irrational
or perverse. The conclusion reached by the High Court is therefore unsustainable. (para 8). ... For all these reasons the decision of
the High Court cannot stand and must be set aside.91 (para 9).

The above decision merits some analysis. In the first place, the reliance placed on the decision in Dharampal Premchand,92
itself is misplaced for the reason that the said case was about the dismissal of some 18 workmen. Secondly, at the time of
deciding that case, s 2A was not there in the ID Act, with the result an individual workman could not get any relief even in
the case of dismissal and discharge, if the dispute raised by him was not espoused by a union or a group of workmen.
Thirdly, the said section was inserted in 1965 with a view to rectify a major lacuna surfaced in Central Provinces
Transport Services,93 in which a dismissed workman was denied relief on the ground afore-stated, in the face of the plural
orientation of s 2(k). Fourthly, the language of s 2A is clear in so far as it covers a case of discharge, dismissal,
retrenchment or termination, and does not take into its fold other industrial actions such as promotions, transfers, etc.
Fifthly, even while acting under s 11A, a labour court has no jurisdiction to adjudicate a dispute, other than discharge or
dismissal, and grant relief. Sixthly, the facts of the case disclose that it is a case of individual promotion to a higher grade
position, which calls for an evaluation of the relative skill, competency and merit of the candidates vis-à-vis the demands
of the higher grade job carrying higher responsibilities. Seventhly, it is a well settled law, as laid down in several cases
including Brooke Bond, in which Gajendragadkar J held:

There can be no doubt that promotions to which industrial employees are entitled normally would be treated as the function of the
management…in the absence of mala fides, normally it must be left to the discretion of the management to select which of the
employees should be promoted at a given time subject of course to the formula to which we have just referred…interference by
Industrial Tribunal with the order of management in regard to such promotion must be held to be unjustified… In dealing with
these disputes, however anxious industrial adjudication may and must be to protect the legitimate rights of the employees, regard
must always be had to the fact that in matters of promotion, discretion has primarily to be left to the employer.94

The above principles have been followed in several decisions by courts in India in respect of transfers and promotions,
which are essentially managerial functions, except in cases where there was material in the possession of a workman to
show that the management was actuated by mala fide considerations or there was victimization on its part. Eighthly,
barring a bald and nude allegation that it was a case of unfair labour practice, no evidence was let in by the workman
before the tribunal. Ninthly, given that the workman alleged unfair labour practice against the management, the burden of
proof was on him, which he did not discharge. Tenthly, the tribunal misdirected itself in drawing the conclusion that there
was ‘unfair labour practice’ de hors any evidence led before it to that effect. Eleventhly, mere putting in a given number of
years in a grade and position is no indication of ‘promotability’ and, by the same token, seniority plays little role in
promotion to higher grade positions. Twelfthly, the question, ‘who is having potential to discharge higher order functions
should be left to the decision of the employer, who alone has the opportunity of observing his employees from close
quarters and is capable of assessing their overall abilities. At any rate, such decisions should not be wrongfully - repeat,
wrongfully - interfered with by tribunals, High Courts and the Supreme Court by relying on misplaced notions and
irrelevant considerations. Thirteenthly, the issue in the instant case was not so much ‘whether the union had passed a
resolution or not’ in favour of espousing the cause as ‘whether the company, having invested a few Crores, had the
legitimate right to manage its affairs in a competitive business environment or should that function be delegated to labour
courts and tribunals, which are neither qualified nor competent to discharge that function’. Here is yet another decision of
late 1950s on the issue from SS Dhavan J of Allahabad High Court, which, it is hoped, would be an eye-opener to the
Higher Judiciary:

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Promotion generally necessitates a consideration of comparative suitability of the eligible workmen and such a selective process
would require a consideration not only of the best performance of those eligible, but necessitates the making of a comparative
estimate of their skill, sometimes of a technical nature, their personality, capacity to discharge heavier responsibilities and similar
other factors... If the choice of the management is not malafide and no element of victimisation has entered into it, there would be
no scope in such cases for interference... If those not suited to discharge the function of higher posts are promoted by industrial
adjudicators who do not possess the requisite background qualifying them to undertake the task of making selections, industrial
progress is bound to be jeopardised to the detriment of national economy.95

The above decision is not only a masterpiece of judge-made law, but also a proposition which brings to bear a high degree
of professionalism upon industrial relations management. Whatever may be the compulsions of ‘social justice’ and ‘state
regulation’, industrial jurisprudence cannot be stretched to a point where the power to promote and transfer is delegated to
labour courts and tribunals which are, in the context of an industrial undertaking, pre-eminently incompetent to perform
the task. And lastly, could it be canvassed, even from a common sense point of view, that the union or a group of workmen
can have a direct and substantial interest in the promotion or the non-promotion of an individual workman? This point can
be illustrated by a specific example: take, for instance, there is a dispute between an individual workman and the
management on (i) whether House Rent Allowance is payable only on his basic pay or on the dearness allowance also; or
(ii) on the rate at which production incentive has to be calculated in the event of down-time due to machinery breakdown
or power-cuts, resulting in a fall in output. A dispute of this kind, though essentially ‘individual’ at its start, assumes the
character of an ‘industrial’ dispute in view of the fact that all workmen, who are placed in the same grade and scale or are
working in the same production operation, will be affected by the outcome. In such an event, it is not necessary that there
should be a trade union in existence for transforming the ‘individual’ dispute into an ‘industrial’ dispute. Those few co-
workmen of the same grade and scale or, as the case may be, those working in the same production shop, can come
together and raise an industrial dispute for the reason that they have a direct and substantial interest in the issue relating to
the percentage of HRA or the rate at which the production incentive has to be calculated. And that verily is the acid test for
the espousal of an individual dispute. The only exception is that of dismissal, discharge, etc., which have been provided for
in s 2A, as an exception to the general rule. Applying this test to the facts of the case, the answer is too obvious to need
elaborate elucidation. On this point, the Division Bench very rightly held that the union or a group of workmen could not
be said to have a direct or substantial interest in the individual promotion in the instant case. The decision of Division
Bench is consistent with the letter and spirit the law relating to s 2(k). Is it possible to conceive a situation in which the
Supreme Court digresses from the core criteria of the issue and deals with peripheral aspects in an attempt to justify an
otherwise unjust and mediocre decision? With great respect, the learned judge did not apply her judicial mind to the
weighty questions which have a significant bearing on organizational efficiency and comparative advantage of business
organisations. The Division Bench of Karnataka High Court was right, whereas the tribunal, the learned single judge of the
High Court and the Supreme Court were patently wrong. This decision needs to be reviewed by a larger bench and
overruled.

It is not necessary that the sponsoring union is a registered trade union or a recognised trade union. Once it is shown that a
body of a substantial number of workmen, either acting through a union or otherwise, had sponsored the workman’s cause,
it would be sufficient to convert it into an industrial dispute.1 The definition of an industrial dispute is not restricted to a
dispute between an employer and a recognised majority union, but it takes within its wide sweep, any ‘dispute or
difference’ between the employer and the workmen, including a minority union of workmen which is connected with the
employment or the terms of employment or the conditions of labour of the workmen.2 In Pradip Lamp Works,3 the
complaints regarding the dismissal of 10 workmen were filed before the conciliation officer by the individual workmen
themselves. But their cause was subsequently taken up by a new union formed by a large number of the co-workmen, if
not a majority of them. Since this union was not registered or recognised, the workmen elected five representatives to
prosecute the cases of the 10 dismissed workmen. Thus, the cases of the dismissed workmen were espoused by the new
union, as yet unregistered and unrecognised. The Supreme Court held that the fact that these disputes were not taken up by
a registered or recognised union, does not mean that they were not ‘industrial disputes’. The mere fact that some workmen
had not paid the subscription would not bar them from sponsoring the dispute, in the absence of proof that they had ceased
to be members of the union for the non-payment of the subscription dues.4

A single judge of the Allahabad High Court, in Imperial Electric, took the view that a general union of which all the
workmen of the company were members, could not raise an ‘industrial dispute’ with respect to the payment of ‘bonus’,
because the nature of the trade of the company was different from the trade which the union represented.5 This holding is
inconsistent with the decision of the Supreme Court in Dharampal Premchand. On the other hand, in Miss Kotval, the
Calcutta High Court took the view that the dispute of an individual employee became an ‘industrial dispute’ on being
espoused by a union representing the employees engaged in the industry of air transport, even though no other employee of
the company was a member of the union. In taking this view, the court interpreted the word ‘industry’ occurring in the

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definition of ‘workman’ in s 2(s) of the Act, to mean the entire air transport industry, in contrast to the particular
establishment of the employer company.6 This construction is far-fetched and is not warranted by the language of the
statute, as it loses sight of the word ‘employed’ used in that definition. Furthermore, this view is inconsistent with
Dharampal Premchand and the Indian Express, and is diametrically opposed to the decision rendered in The Hindu, which
was not overruled in Dharampal Premchand, but was only distinguished on its facts. Another Bench of that court, in
Reckitt & Coleman, took the view that a dispute relating to the service conditions of 12 car drivers of a company
employing about 1000 workers, was validly raised by a union in which no other workman than the 18 drivers employed by
the company was a member.7

It is not necessary that the same union should remain in charge of that dispute till adjudication. In this connection, the
distinction between espousal and representation is to be borne in mind. The dispute may be espoused by the workmen of
an establishment through a particular union, for making such a dispute an industrial dispute, while the workmen may be
represented before the tribunal, for the purpose of s 36, by a member of the executive or office-bearer of an altogether
different union. The crux of the matter is that the dispute should be a dispute between the employer and his workmen. It is
not necessary that the dispute must be espoused or conducted only by a registered trade union. Even if a trade union ceases
to be a registered trade union during the continuance of the adjudication proceedings, that would not affect the
maintainability of the order of reference.8 A new trade union, by amalgamation or otherwise, may come into existence
which, from that date, may represent the workmen of the industry and in such a case, if the new union takes over the
dispute, then the dispute does not cease, to be an ‘industrial dispute’.9 It may happen in some cases, that a number of
workmen of an establishment, may take up the dispute of an individual workman and thus, make it an ‘industrial dispute’.
A trade union may be organised representing the workmen of that establishment, and may take up the dispute further
before its settlement. The dispute would not thereupon, become a new ‘industrial dispute’. The whole point is, whether the
employer is fighting a dispute with a large number of his workmen or not, but until this test is passed, an individual dispute
cannot be transformed into an industrial dispute.10

In Paarthy Ratnam, the AP High Court held that a dispute simpliciter, between an employer and a workman, might
develop into an industrial dispute, if the cause is espoused by a union of which the latter is a member and that the
membership of the union which would give it the jurisdiction to espouse his cause, must be anterior to the date of dismissal
and not subsequent to it.11 A similar view was taken by the High Court of Kerala in Shamsuddin,12 and by the Punjab High
Court in Khadi Gram Udyog.13 In Muller and Phipps, the dispute related to the retrenchment of a workman and the failure
of the employer to re-employ him, in spite of its having re-employed two other employees out of their turn, as against the
turn of the concerned workman. The High Court rejected the employer’s contention, that the espousal of the union was not
valid as it was made after the retrenched workman had ceased, on his being retrenched, to be a member of the union, on the
ground that if that contention were to be upheld, it would mean that no union could ever espouse the cause of a retrenched
workman.14 A similar view was also taken by the Patna High Court, in Jamadoba Colliery, in which the union which
espoused the cause of the workman, came into existence after his dismissal. The workman naturally became its member
after his dismissal. The High Court disagreed with the tribunal, which had rejected the reference, and held that even if on
the date of the dismissal of the workman, the dispute was an individual dispute, but may, under some circumstances,
become an industrial dispute on the date of the reference; that the validity of the reference was to be judged on the facts as
they stood on the date of the reference and not on the date of the workman’s dismissal. Therefore, even if there was no
union on the date of the workman’s dismissal, to espouse his cause, if such a union comes into existence before the
reference and the dismissed workman becomes its member and the union then espouses his cause, that would be sufficient.
It was also held that there was no principal in support of the view that the union must be in existence at the time of the
dismissal.15

Time of espousal

In The Hindu, the Supreme Court observed:

In each case, on ascertaining whether an individual dispute has acquired the character of an industrial dispute, the test is whether
on the date of the reference, the dispute was taken up as supported by the union of the workmen of the employer against whom the
dispute is raised by the individual workman, or by an appreciable number of workmen.16

In other words, the validity of the reference of an industrial dispute must be judged on the facts as they stood on the date of
the reference. This is because a reference can validly be made only if an industrial dispute exists or is apprehended and an
‘individual dispute’ becomes an ‘industrial dispute’ only when it is supported by a union, or a considerable number of
workmen. That support must necessarily precede the reference and act as a foundation for it.17 In other words, the
existence of the interest of the workmen as a community, evidenced by the espousal of the cause, must be on the date when
the reference is made and not necessarily on the date when the cause occurs, otherwise, in some cases, a dispute which was

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originally an individual one may never be able to become an industrial dispute.18

Effect of Subsequent Support or Withdrawal of Support to Dispute

In Working Journalists of the ‘Hindu’, the Madras High Court observed that:

...having regard to the statutory provisions, as interpreted by us, the jurisdiction of the labour court, to proceed with and adjudicate
upon an ‘industrial dispute’, stems from and is sustained, until it makes an award and the same becomes enforceable, by the
reference itself which has been made on the basis of an ‘industrial dispute’ existing or ‘apprehended’ on the date of the reference
and that the jurisdiction of the labour court to proceed in the matter is not in any way affected by the fact that subsequent to the
date of the reference, the workers or a substantial section of them, who had originally sponsored the cause, had resiled and
withdrawn from it. 19

These observations were cited with approval by the Supreme Court in The Hindu, as correctly setting out the effect of a
subsequent withdrawal of support by the workmen, to a cause previously espoused by them. For determining the question
as to whether an individual dispute has acquired the character of an ‘industrial dispute’, in this case, the court laid down
the crucial test that on the date of reference, the espousal and support of the dispute by the union of workmen or by an
appreciable number of them, must be present. A corollary to this was that a subsequent withdrawal of support will not take
away the jurisdiction of the industrial tribunal. Conversely, on the same reasoning, subsequent support too, will not convert
what was an individual dispute at the time of the reference, into an industrial dispute. In the words of Veeraswami J,

... it will be subversive of industrial justice, labour relations and fair-play, if the jurisdiction of the labour court to proceed with the
matter referred to it for adjudication, is to depend on the shifting convictions, exigencies and strength of the rival parties, to the
industrial dispute.20

Besides, it will also not be in consonance with the object and policy of the Act, namely, to conserve and promote industrial
peace and welfare. A request by the worker to reconsider or withdraw the dispute also, will have no relevance, because the
dispute being raised by the union, the mere fact that subsequently, the workers request for a withdrawal or reconsideration,
will not make the dispute any less than industrial dispute.21 The principle is that when an industrial dispute is raised by
union or a group of workmen, in respect of the grievance of an individual workman, and a reference is made by the
Government, the dispute is not between the management and the individual workman concerned. The legal position is that
when an individual Worker is a part to an industrial dispute, he is a party not independently of the union which has
espoused his cause and the main parties to the industrial dispute before the labour court are, therefore, the employer and
the union or the workmen, as a class, who took up the cause of the individual workman.22 Hence, the individual workman
is at no stage, a party to the individual dispute, independently of the union. The union or those workmen who have, by their
sponsoring, turned the individual dispute into an industrial dispute, can, therefore, claim to have a say in the conduct of the
proceeding before the tribunal.23

Burden of Proof

There is some conflict of judicial opinion on the question of whether it is for the workman to prove that the dispute in
question is sufficiently and properly sponsored, so as to convert it into an industrial dispute, or it is for the employer to
show that the dispute is not properly or sufficiently sponsored and as such, is not an industrial dispute at all. The Madras,24
Andhra Pradesh25 and Mysore26 High Courts have taken the view that when the validity of a reference relating to a single
workman is challenged on the ground that what is referred is only an individual dispute and not an industrial dispute, it is
for the workman to show that the cause has been sponsored by his union or by a number of workmen of his class, before
the order of reference. In other words, it is for the party who contends that the dispute is an industrial dispute, to establish
that fact, upon which the jurisdiction of a tribunal rests. On the other hand, the Labour Appellate Tribunal,27 the Punjab,28
Calcutta,29 and Allahabad,30 High Courts have taken the view that there must be a presumption that when the union takes
an action, it is as a representative of, and with the support of, its members, and that it is for the employer to prove that the
facts are otherwise and the members of the union are not behind it in its action. Thus, the onus to prove, according to this
view, that the dispute raised is not an ‘industrial dispute’, is on the employer. There is no case of the Supreme Court
directly on the point, so far, though there are some obiter dicta, which also appear to be conflicting. In Newspapers Ltd,
Kapur J, observed that:

In spite of the fact that the making of a reference by the Government under the Industrial Disputes Act, is the exercise of its
administrative powers, that is not destructive of the rights of an aggrieved party to show that what was referred was not an

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‘industrial dispute’ at all ...31

On the other hand, in The Hindu, Shah J, observed that:

The dispute, in the present case, being prima facie, an individual dispute, in order that it may become an industrial dispute, it had to
be established that it had been taken up by the union of employees...or by an appreciable number of employees...32

In Rohtak General Transport, Gajendragadkar J, observed that:

Before this point is decided in favour of the respondent (employer), it would be obviously necessary to give the appellants
(workmen) a chance to prove that their cause had been espoused by the five workmen before the date of reference. 33

In Hindustan Lever, the labour court, dealing with the preliminary issue whether there was a proper espousal of the
dispute, found that no evidence was adduced by the employer to that effect and, hence, decided the issue against the
employer.34 The Calcutta High Court held that when the authority of a union was challenged by the employer, it must be
shown by production of material evidence, before the tribunal to which such a dispute has been referred, to prove that the
union was duly authorised, either by a resolution of its members or otherwise, and that it had the authority to represent the
workmen whose cause it was espousing.35 From these observations, it is obvious that the burden of proof to establish the
valid espousal is on the workman. This is the correct view of the law. After the insertion of s 2A, a dispute relating to the
‘discharge’, ‘dismissal’, ‘retrenchment’ or otherwise ‘termination’ of the service of an individual workman, is to be
deemed to be an ‘industrial dispute’ and such dispute will not require espousal by the other workmen or any union. But this
statement of law will still hold good in respect of other disputes, such as the disputes relating to promotion, increment,
grading, leave hours of work, transfer, etc, of individual workmen, still which would require a valid espousal.

Subject-matter of Dispute

It is only that ‘dispute or difference’ between ‘employers and employers’ or between ‘employers and workmen’ or between
‘workmen and workmen’ which is connected with the employment or non-employment, or the terms of employment, or
with the conditions of labour, of any person, which would fall within the ambit of the definition of ‘industrial dispute’. In
other words, a dispute or difference must relate to either the employment or non-employment or the terms of employment
or the conditions of labour, of any person. Unless a dispute is connected with these matters, it will not satisfy the
requirements of law and will not fall within the ambit of industrial dispute,36 but the phrase, ‘any dispute ...which is
connected with the employment or non-employment ...of any person’, used in the Act, is of unqualified width. The use of
the present tense in the expression ‘which is connected’, in the definition, is significant and indicates the continuing
character of an industrial dispute. It follows that a dispute which, in the past, was an industrial dispute, cannot be a dispute
which is connected with ... so as to fall within the ambit of an industrial dispute, as defined in the Act.37 Where a
discharged workman, having settled his claim under an agreement with the company, made after he had obtained a
favourable judgment ex parte in a writ application, contested the validity of the said agreement in a subsequent writ
petition, the Calcutta High Court held that the question as to the legality of the said agreement could be determined by an
industrial dispute, as it would come within the purview of s 2(k) of the Act.38

Employment

Various matters which may give rise to an ‘industrial dispute’, have been enumerated in the second and the Third
Schedules to the Act. ‘Employment or non-employment’ constitutes the subject-matter of one class of industrial disputes,
the other two classes of disputes being those connected with the ‘terms of employment’ and the ‘conditions of labour’. The
words ‘employment or non-employment’ are of the widest amplitude and have been put in juxtaposition, to make the
definition of ‘industrial dispute’ thoroughly comprehensive. The mere fact that the two terms ‘employment’ and ‘non-
employment’ are connected by ‘or’ does not imply that they mean or refer to the same process. The rights and liabilities
are different in the matter of raising an industrial dispute and the limitations imposed on the workmen. Hence it is
proposed to discuss these two expressions under separate Heads. The concept of ‘employment’ involves three ingredients.

(1) Employer—one who employs, ie, engages the services of other persons;

(2) Employee—one who works for another for hire; and

(3) Contract of employment—the contract of service between the employer and the employee, where under the employee
agrees to serve the employer, subject to his control and supervision. 39

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In Western India Automobile Assn, the federal court discussed the import of these words and paraphrased the definition of
an ‘industrial dispute’ as any dispute which has connection with the workmen being in, or out of service or employment.
Mahajan J observed:

Non-employment’ is the negative of ‘employment’ and would mean that the disputes of workmen out of service, with their
employers, are within the ambit of the definition. It is the positive or the negative act of an employer, that leads to employment or
to non-employment or it may relate to an existing fact of non-employment. It may relate to the existing employment or to a
contemplated employment, or it may relate to an existing fact of non-employment or a contemplated non-employment.40

The learned judge further elucidated the point by giving the following four illustrations:

(1) An employer has already employed a person and a trade union says: ‘please don’t employ him’. Such a dispute is a
dispute as to employment or in connection with ‘employment’.
(2) An employer gives notice to a union, that he wishes to employ two particular persons. The union says: ‘No’—This is a
dispute as to ‘employment’. It arises out of the desire of the employer to employ certain persons.
(3) An employer may dismiss a man or decline to employ him. This matter raises a dispute as to ‘non-employment’.

(4) An employer contemplates turning out employees who are already in his employment. It is a dispute as to a contemplated
‘non-employment’.

Employment vs The Doctrine of Legitimate Expectation

In Sukhnandan Thakur, Ramaswamy J of Patna High Court (as he then was) observed that ‘employment’ refers to a
condition in which a man is kept occupied in executing any work and it means not only an appointment to any office for
the first time, but also the continuity of the appointment.41 The need for continuity of employment or job security is a basic
need of every employed person. The Bombay Textile Labour Enquiry Committee observed:

There is no fear which haunts an industrial worker more constantly than the fear of losing his job as there is nothing which he
prizes more than economic security. The fear of being summarily dismissed for even a slight breach of rules of discipline or for
interesting himself in the trade union activity disturbs his peace of mind. It is a notorious fact that dismissals of workers have been
the originating causes of not a few industrial disputes and strikes. The provision of effective safeguards against unjust and wrong
dismissals is, therefore, in the interest as much of the industry as of the workers.42 (Italics supplied)

Adverting to the definition in s 2(k), a dispute about ‘employment’, which is the first of the four subject-matters stipulated
in the definition in s 2(k), cannot normally be raised by an unemployed stranger against an employer. In order for a claim
to be treated as an industrial dispute relating to ‘employment’, it should, in the first place, be shown that the person was
employed in some capacity by the same employer at some point of time in the past or in the present. The desire for a
permanent relationship with the employer and uninterrupted income in the form of wage/salary form the foundation of
such a claim. To illustrate, persons engaged on daily wages and/or on casual basis intermittently and are continued as such
for a few years stake their claim for permanency of their tenure so that they can get the status and benefits available to
permanent employees without interruption. This general presumption is, however, subject to one exception. It is not
uncommon that the dependents of employees, who died in harness or who suffered permanent total disablement, also
prefer a claim for employment in the organisation on compassionate grounds, even though they have never been employed
in the past in any capacity. Quite a few organisations - both in public and private sector - have some sort of regulations
which provide for employment of the dependents on compassionate grounds in certain circumstances.

In addition, the Government announces from time to time short-term employment schemes to help the rural and urban
poor, such as, Jawahar Rozgar Yojana (JRY) and the like, with a view to provide succour to the unemployed poor. It is
also a fact that the normal rules of recruitment and selection are not followed, in view of the fact that the schemes are
purely temporary in nature lasting a few months at the most and the work itself is of casual nature. During the past few
decades, several disputes were raised by the persons so employed on daily wages and/or casual basis by different
departments of the Government, claiming regularization of their services. In most of these cases, the doctrine of ‘legitimate
expectation’ was invoked in support of their claim for regular appointment. The expression “legitimate expectation” was
first used by Lord Denning in 1969. In the course of time, it has developed into a significant doctrine all over the world.

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The Supreme Court employed this doctrine to check the arbitrary exercise of power by the administrative authorities. Thus
the doctrine of legitimate expectation belongs to the realm of Administrative Law. In proceedings of judicial review, it
applies the ethics of fairness and reasonableness to the situation where a person has an expectation or interest in a public
body retaining a long-standing practice or keeping a promise. As per this doctrine, the public authority can be made
accountable on the ground of an expectation which is legitimate. For example, if the Government evolves a scheme for
providing electric poles in the villages of a certain area but later on changed it so as to exclude some villages from the
purview of the scheme then in such a case what is violated is the legitimate expectations of the people living in the villages
excluded from the scheme and the Government can be held responsible if such exclusion is not fair and reasonable. Thus
this doctrine becomes a part of the principles of natural justice enshrining the right to hearing to a person to be affected by
an arbitrary exercise of power by the public and no one can deprive a person of his legitimate expectations without
following the principles of natural justice.43 It is important to note that the courts have repeatedly emphasized that
‘legitimate expectation’ is not a legally enforceable right. Even so, non-consideration of a plea for legitimate expectation of
a person, who has been adversely affected by a decision, may invalidate the decision on the ground of arbitrariness or
irrationality. The plea of legitimate expectation relates to procedural fairness in decision-making and forms part of rule of
non-arbitrariness.

In Uma Devi, counsel for respondent employees, who were engaged as temporary and/or contractual and/or casual basis,
pressed inter alia the doctrine of legitimate expectation into service in support of the plea for their regularisation in
Government service. Rejecting the contention, Balasubramanian, J (for self, Sabharwal, CJI, Arun Kumar, Mathur and
Thakker, JJ), observed that the doctrine can be invoked if the decisions of the Administrative Authority affect the person
by depriving him of some benefit or advantage which either (i) he had in the past been permitted by the decision-maker to
enjoy and which he can legitimately expect to be permitted to continue to do until there have been communicated to him
some rational grounds for withdrawing it on which he has been given an opportunity to comment; or (ii) he has received
assurance from the decision-maker that they will not be withdrawn without giving him first an opportunity of advancing
reasons for contending that they should not be withdrawn. The learned judge further held:

There is no case that any assurance was given by the Government or the concerned department while making the appointment on
daily wages that the status conferred on him will not be withdrawn until some rational reason comes into existence for withdrawing
it. The very engagement was against the constitutional scheme. … When a person enters a temporary employment or gets
engagement as a contractual or casual worker and the engagement is not based on a proper selection as recognized by the relevant
rules or procedure, he is aware of the consequences of the appointment being temporary, casual or contractual in nature. Such a
person cannot invoke the theory of legitimate expectation for being confirmed in the post when an appointment to the post could be
made only by following a proper procedure for selection and in concerned cases, in consultation with the Public Service
Commission. Therefore, the theory of legitimate expectation cannot be successfully advanced by temporary, contractual or casual
employees. It cannot also be held that the State has held out any promise while engaging these persons either to continue them
where they are or to make them permanent. The State cannot constitutionally make such a promise. It is also obvious that the
theory cannot be invoked to seek a positive relief of being made permanent in the post.44 (Paras 37 & 38)

It is submitted that the learned judge had summed up the principle, which constitutes the perfect essence of the doctrine of
‘legitimate expectation’, brilliantly and candidly, while deciding the above case against the respondents. During the recent
past, several such instances of ‘back-door’ entry in the name and form of ‘casual’, ‘work-charged’, ‘contractual’ and
‘temporary’ employees had come to the notice of the apex court with the further claim for regularisation in the permanent
service of Government and other public bodies on the only ground that they had been working for a given number of years,
in derogation of the rules and regulations governing public employment. In almost all these cases, the plea of ‘legitimate
expectation’, where there was none either express or implied, was pushed into the forefront by the employees in support of
their contention for absorption in the permanent service. The Supreme Court rightly unearthed the mischief played by the
political establishment and the executive, and came down heavily against such malpractices.

Compassionate Appointments

In Delhi Municipal Workers Union,45 Cyriac Joseph J of the Delhi High Court held that a dispute relating to a
compassionate appointment, raised by the son of a deceased employee, was an ‘industrial dispute’ within the meaning of s
2(k). The learned judge relied on the decision rendered in Kays’ Construction Co, in which it was held that in order to be
an industrial dispute, it need not be a dispute directly between the employer and his workmen and that the definition of an
‘industrial dispute’ was wide enough to cover a dispute raised by the employer’s workmen, in regard to the non-
employment of others who may not be his workmen at the material time.46 This is a complete contradiction of the decision
rendered in Kays’ Construction. Joseph J, distinguished ‘non-employment’ from ‘unemployment’. The definition in s 2(k)
includes the former and not the latter. There was no policy in the corporation for the appointment of the dependents of
workmen who died in harness. The industrial tribunal rightly dismissed the claim for compassionate appointment on the

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grounds that: (1) the said person was never in the employment of the corporation, (2) he was not a workman as defined in s
2(s) of the Act, and (3) there could be no industrial dispute between him and the corporation. Another ground, which
seems to have been appreciated by Joseph J, was the slender fact that the union raised the dispute, and hence, it was an
industrial dispute within the meaning of the Act, notwithstanding the fact that the subject matter of the dispute was outside
the scope of s 2(k) and the person who preferred the demand, had no nexus, whatsoever, with the corporation. This ruling
is not consistent with the spirit of the Act and, hence, requires review and reversal.

In Delhi Development Authority, Khanna J, held that the dispute relating to the compassionate appointment of the son of a
deceased workman is an industrial dispute.47 This decision too, like the one given by Joseph J of the same High Court
(supra), is inconsistent with the ratio laid down in Kay’s Construction (supra) and other cases. The learned judge observed
that the definition in s 2(k) was wide enough ‘to cover non-employment of others who might not be employed as workmen
at the relevant time’ (para 8). This very observation exposes the hollowness of his reasoning as well as his conclusion, for
the reason that it implies that the said ‘others’ might have been employed as workmen by the employer at some point of
time in the past. Applying the said argument to the case at hand, could it be said that the ‘son’ of the deceased workman
was employed as a workman in DDA at any time in the past? And could it further be argued that, having been so employed
in the past, he has been deprived of his right to continue in employment by an act of the employer, which had given rise to
the dispute? At a more basic level, does the definition refer to ‘non-employment’ or ‘unemployment’? Do these two
expressions refer to the same thing or different things?

His further observation (para 12) that the tribunal had the power, in the interest of industrial peace, to direct appointment
of a candidate on compassionate grounds is no less whimsical and capricious. In what manner could ‘industrial peace’ be a
relevant factor to a case like this? Can a judge bring into play a consideration, which is so trite on the face of it in order to
justify an otherwise tenuous argument founded on a wild interpretation placed on the words ‘any person’ to the point of
taking into their fold any person and every person of whatsoever standing and legal status under the ID Act? Both Joseph J,
and Khanna J, had misdirected themselves and decided the cases in a reckless manner by patently transgressing their
legitimate confines, as if they were messiahs sent to solve the problems of the multitude. These two decisions reflect
nothing but a patent abuse of judicial power on their part. Both the decisions deserve to be rejected as being baseless, apart
from being repugnant to the letter and spirit of s 2(k).

In striking contrast, Mukul Mudgal J, of the same High Court, in Municipal Employees’ Union,48 peremptorily held that ‘a
person in respect of whom employer-employee relationship never existed cannot be the subject-matter of industrial
dispute’. The facts of the case were identical to those of Delhi Development Authority, ie, compassionate appointment to
the son of a deceased workman, whose cause was espoused by the petitioner-union. The Government declined to refer the
dispute the reason being that the person concerned was not a ‘workman’. The union challenged the order in this petition.
Mudgal J, while dismissing the petition, observed that ‘any person’ in s 2(k) could not be read without limitation and a
person in respect of whom the employer-workman relationship never existed and could never possibly exist, could not be
the subject matter of dispute between employers and workmen. It goes to the credit of the learned judge that he rightly
interpreted the essence and personality of the definition ‘industrial dispute’ in s 2(k).

In IDPL, the union took up the case of appointment of the dependents of the employees who died in harness. The
management agreed to consider the request of the union sympathetically, and to start with engage them as contractors for
maintenance of records, cleaning, etc. After a few months of carrying on with the arrangement, the management dispensed
with the said system. On a reference, the labour court held that they were the workmen of the company and accordingly
directed their reinstatement. The writ petitions filed by the company were dismissed by the High Court on the ground that
the minutes of the meeting recorded on 12 August 1988 amounted to settlement and in view thereof, the said workers
ceased to be contractors and became the workers of the company. Quashing the order of the courts below, Pasayat J (for
self and Chatterjee J) held:

No production is going on in the company since 1994. These are factors which have been completely lost sight of by the Labour
Court and the High Court. ... On bare reading of the minutes of the meeting it is clear that there was in fact no settlement. The
relevant portion reads as follows:

The Union demanded that the widows/dependants of deceased employees should be given employment in the plant as was done
earlier. They have written several letters in this regard but no fruitful result has come out. The widows/dependants are waiting for
employment for the last 2 years and are at the verge of starvation. Till such time, the decision for their employment is received
from the corporation office, the management should employ them as contract labour so that they may earn their bread and avoid
starvation. Further, the management should ensure payment of minimum wages. The number of such needy widows/dependants of
deceased employees is about thirteen. The management agreed to consider the Union suggestion sympathetically. On the request of

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Union the Management informed that this will be done in a week’s time. (para 15) ...

To provide sustenance to the family members of the deceased workmen certain job works were given. The agreements have been
placed on record. The cost of the contract, the nature of the work and the time allowed have been clearly indicated in each of the
contracts. It also clearly indicates the number of persons who are to be engaged for carrying out the job contract work. There was
no material before the Labour Court to conclude that the contract was not a job contract and in fact employment had been given.
There is no foundation for such a conclusion. (para 16) ... Above being the position, the Labour Court and the High Court were not
justified in holding that the respondent in each case was a workman and/or that there was retrenchment involved. The award of the
Labour Court and the judgment of the High Court are therefore set aside.49 (para 17)

Non-employment

The words ‘employment’ or ‘non-employment’ have not been defined in the Act but ‘employment’ refers to a condition in
which a man is kept occupied in executing any work and it means not only an appointment to any office for the first time,
but also the continuity of the appointment.50 In other words, the concept of employment brings in the contract of service
between the employer and the employee.51 The real test for deciding whether the contract is of employment or not, is to
find out whether the agreement was for the personal labour of the person engaged and if that be so, the questions as to
whether the contract was one of employment and whether the work was ‘time work’ or ‘piecework’, or whether he
obtained the assistance of other persons also for the work, are immaterial.52 A dispute relating to the non-employment of a
workman, raised by a union of which he is a member and relating to his employment by other union is an industrial
dispute. The failure to employ or the refusal to employ, are actions on the part of the employer, which would be covered by
the terms ‘employment or non-employment’.53Though ‘refusal to employ’ is not specified in the second or the Third
Schedules to the Act, it would be covered by the residuary item in the Second Schedule, viz, item no 6—‘all matters other
than those specified in the Third Schedule’. Hence, a tribunal will have jurisdiction to adjudicate on an ‘industrial dispute’
arising out of the ‘refusal’ of an employer to employ a workman.54

In Crompton Engineering, Ismail J of Madras High Court held that the question of ‘non-employment’ will arise only when
the employer refuses to give work to a person who is entitled to work. For instance, where certain workmen are appointed
only for a specific period or for a particular work, their employment will automatically come to an end as soon as the
period is over or the work is over.55

The first part of the observation of Ismail J does not appear to be correct. Employment and non-employment are mutually
exclusive and are, in a sense, the opposite of each other. Non-employment in the context of s 2(k) presupposes involuntary
unemployment caused by an overt act on the part of the employer as, for instance, discharge, dismissal, retrenchment, etc.
In other words, it implies a condition of complete severance of employer-employee relationship by an action attributable to
the employer, whereas no such involuntary unemployment is predicated in a dispute relating to ‘employment’. That
precisely is the basic difference between the two expressions ‘employment’ and ‘non-employment’. That takes us to the
question, what is meant by the expression ‘employment’ appearing in s 2(k) ? It simply means that a group of workmen (or
the trade union on their behalf) can, even while being in active employment with the employer as casual workers or on
daily wages or even as temporary workmen, raise an industrial dispute seeking regularisation in the permanent service of
the establishment. Thus, in a dispute relating to employment, ‘termination of service’ by a positive act on the part of
employer is not a condition precedent for raising an industrial dispute for regularization. In striking contrast, ‘non-
employment’, as the very expression connotes, implies that the factual termination of employment and the consequent
severance of relationship are the essential pre-requisites for raising a dispute. The second important difference lies in the
fact that, whereas an individual workman can raise a dispute in the event of discharge, dismissal, retrenchment or
termination under s 2A which will be deemed to be an industrial dispute, there is no such provision in the Act which
confers a right on an individual workman to raise an industrial dispute for his own regularization, during the currency of
his employment. Such a dispute relating to ‘employment’ has to be necessarily espoused either by a trade union or a group
of workmen who have a direct and substantial interest in the dispute.

A dispute relating to a termination of service, by discharge,56 or retrenchment,57 of workmen and their reinstatement,58 are
disputes connected with their employment or non-employment. Suspension also amounts to a non-employment of a
workman.59 Likewise, a dispute regarding the demand of workmen, that the contract system of labour should be abolished,
is also a dispute connected with employment or non-employment60 but the demand for an equal representation on the
Board of Provident Fund Trustees—a statutory body—is not in any way, connected even remotely, with the employment
or non-employment of a workman.61 The dispute regarding the refusal to employ the persons who were promised to be
employed, is not connected with the employment or non-employment of any person, within the meaning of s 2(k) of the
Act.62 The refusal of an employer to put pressure on his employees to join a particular union, is not a dispute connected

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with the employment or non-employment.63 Similarly, a dispute between a union and an employer, where the employer
induced his employees by legal means, to leave the union, is not a dispute connected with the employment or non-
employment of the workmen.64

There is nothing, either in the statutory definition of an ‘industrial dispute’, or in the phrase: ‘any dispute or difference ...
which is connected with the employment or non-employment ... of any person’, to suggest that the word ‘dispute’ excludes
a dispute about the discharge simpliciter of a workman. It is one thing to give words in a statute, a restricted meaning; it is
another thing to give them a meaning they do not bear. In the context of Indian labour relations, there is no good reason of
policy, to gloss the definition so as to protect the preconceived notion of the employer’s right to hire and fire. This view is
supported by the decision of the judicial committee of the privy council in Bird v O’Neal , a case coming from the
Leeward Island. The relevant facts were, that a woman clerk, employed in the employer’s drug stores, was lawfully
dismissed with a week’s wages in lieu of a notice. In determining the legality of the picketing that supervened, one of the
questions that arose was whether there existed a ‘trade dispute’, in furtherance of which, the pickets had acted? It was
pointed out that there can be no ‘trade dispute’ between a dismissed employee and a dismissing employer, if the dismissal
was lawful, ie, if the period of notice required by law is given or payment in lieu thereof, made. The trial judge rejected
this contention, but it was upheld by the West Indian Court of Appeal. In their turn, however, the judicial committee of the
Privy Council held:

their Lordships ... agreed with the trial judge’s rejection of the submission that the lawful dismissal of a workman cannot be the
subject-matter of a trade dispute.65

No specific reasons were given, as in view of the unqualified width of the wording of the definition, none was really
required; in this respect, the Act may be allowed to speak for itself. A dispute about the parties to the process of bargaining
for the terms and conditions of employment, or for determining the employment or non-employment of any person, will
occur when an employer, though allowing the employees to join a trade union, refuses to negotiate with the union, ie, it
refuses to recognise the union as a bargaining agent of its employees. Such a dispute has been described by Lord Denning
as a ‘recognition dispute’. Can such a dispute be an ‘industrial dispute’? This question has been considered by the judicial
committee in Trinidad Cement, which dealt with the definition of a ‘trade dispute’, as defined in the Trade Disputes
(Arbitration and Inquiry) Ordinance 1950 of Trinidad and Tobago. The judicial committee did not directly answer the
question of whether the dispute was connected with the employment or non-employment of any person. It simply held that
the recognition dispute was a ‘trade dispute’.66 The acceptance of the principle by the judicial committee in Trinidad
Cement, that a recognition dispute is a ‘trade dispute’, was subsequently approved obiter, both by the court of appeal and
by the House of Lords in Stanford.67 This rule has again been followed by the court of appeal in Torquay Hotel, in which
Lord Denning MR said:

The defendant union claimed that it should be recognised as having authority to negotiate on their behalf. The Torquay hotel
refused to recognise them. Such a recognition dispute is, I think, clearly a ‘trade dispute’ ... and nonetheless so, because, it springs
out of the rivalry of one union with another union.68

A single judge of the Kerala High Court, in TCC Ltd, held that a ‘recognition dispute’ is an industrial dispute.69

Contract of Employment

The contract of employment is the ‘corner-stone of the edifice of industrial law.70 The general principles of the contract
law apply to the creation of the contract of industrial employment, and an agreement of service is equally enforceable,
whether it be expressed in writing, in a deed, by word of mouth or by conduct. The ordinary principles of contract law,
therefore, apply, so that a right to claim remuneration for services rendered, does not arise in law, unless in fact, there is an
agreement, express or implied, to pay for them. Hence, no contract can arise until the minds of the parties are brought
together in agreement, which is evidenced by the making of an offer by one party (the offerer) and the acceptance of that
offer by the other party (the offeree). Unless the process is completed, there can be no binding obligation between the
parties. Cooper and Wood observe:

The law regards the contract of employment as a personal matter between the two parties. It follows, that agreements arising from
collective bargaining, between employers and trade unions, do not ipso facto become part of the individual contracts of
employment. The terms agreed, however, will be acted upon by the two sides and will then, by implication, be incorporated as
terms in each appropriate contract of employment. Only in an indirect sense, does the system of collective negotiation have a legal
effect and the lawyer’s interest is strictly confined to the agreement between employer and workman.71

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The contract of service in industrial employment, therefore, can be entered into by the parties having capacity to do so and
for a consideration. A contract of service with an infant will be void ab initio. A contract not supported by consideration,
will also have no force of law. Likewise, a contract, the object of which is illegal, will also be void. But a contract entered
into under mistake, by misrepresentation, duress and undue influence will be voidable depending upon the circumstances
of the case. In construing a contract of industrial employment, like any other contract of service, the court will, if
necessary, supply an implied condition as to reasonableness, where duties are not fully defined. If, on the facts, this cannot
properly be done, the contract is not binding.72One of the recurring problems in industrial law is, how far the relationship
between an industrial employer and his employees is explicable in terms of contract. The relation is partly contractual, in
that mutual obligations may be created by an agreement made between the employer and the workman. For instance, the
agreement may create an obligation on the part of the employer to pay a certain wage and a corresponding obligation on
the workman, to render services. The relation of industrial employment is also partly non-contractual, in that the state, by
means of legislation or through industrial adjudication, may prescribe many of the obligations that an employer may owe
to his employees. Instances of legislations, prescribing statutory terms and conditions of employment are: the Industrial
Employment (Standing Orders) Act 1946; the Minimum Wages Act 1948; the Payment of Bonus Act 1965 and the
Payment of Gratuity Act 1972, etc. The payment of dearness allowance, enhanced wages and the employee’s right to
reinstatement in cases of illegal and wrongful discharge and dismissal, are instances of the obligations created by industrial
adjudication, through the machinery of the Industrial Disputes Act 1947 or analogous state statutes. Industrial adjudication
‘may involve extension of an existing agreement, or the making of a new one, or in general, the creation of new obligations
or modifications of old ones ...73 but apart from the statutory obligations or the obligations created by industrial
adjudication, there is another sense in which the relation of employer and employee is non-contractual, viz, the terms
agreed upon in a collective agreement. According to Gayler:

‘The substitution of the collective bargaining for the individual contract, has long since modified the traditional relation of
employer and employee. A contract of employment today is, in most cases, a standardised contract’. ... The terms of agreement are
adhered to, not only by the member of employers’ associations and trade unions-pressure of ten ensures that non-members of
associations also conform to the agreement ... even in cases where collective bargaining does not lay down particular terms of
employment in an industry, trade usage may be so strong that an individual employer will find it difficult in practice, to deviate
some terms universally recognised by other employers in the industry.74

Indeed, it is sometimes contended that:

the contract of employment ... has long since become irrelevant and unworkable ... Only by an open admission of a status of
employment, can the law hope to keep pace with the practicability of the industrial scene.75

In general, a contract of employment does not require any particular form. It may be made by deed, or in writing, or orally,
according to the desire of the parties. In practice, most large-scale establishments have standard terms of employment, for
at least their lower grade of workers. The intending workmen will be presented with a form containing the stipulations as
to the pay, general conditions, and notice, and will be asked to affix his signatures to the form. If the workman refuses his
signatures, the employer will not employ him, as there will be no deviation from the terms contained in the document. On
the other hand, if the applicant for a job, appends his signatures to the form, even without reading it, then he will be bound
by its terms, except in cases where the agreement has been brought about by a mistake, fraud, duress or undue influence, in
which case the contract will be voidable.

Contract of employment v Standing Orders

The contract of industrial employment is quite often constituted by the so-called ‘letter of appointment’, which, besides
being one-sided, rarely states anything beyond the date of employment, probationary period, period of notice of
termination of service and the wages. In many industrial establishments, the conditions of service are not uniform and
sometimes, are not even reduced to writing. Previously, employees were free to contract different terms and conditions of
service, with their employees. As Shelat J pointed out:

Such a state of affairs led to confusion and made possible, discriminatory treatment between employees and employees, though all
of them were appointed in the same premises and for the same or similar work. Such a position is clearly incompatible with the
principles of collective bargaining and renders their effectiveness difficult, if not, impossible.76

In the words of Desai J:

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In the days of laissez-faire, when industrial relation was governed by the harsh weighed law of hire and fire, the management was
the supreme master, the relationship being referable to a contract between unequals and the action of the management treated
almost sacrosanct. The developing notions of social justice and the expanding horizon of socio-economic justice, necessitated
statutory protection to the unequal partners in the industry, namely, those who invest blood and flesh, against those who bring in
capital.77

This led to conflicts, resulting in unnecessary industrial disputes. For achieving industrial harmony and peace, the
Industrial Employment (Standing Orders) Act 1946 was enacted by the Parliament, requiring employers in industrial
establishments, to define formally, the conditions of employment under them with sufficient precision and to make them
known to the workers. The Act applies to every industrial establishment wherein 100 or more workers are employed or
were employed on any day of the preceding 12 months. In Salem-Erode, Gajendragadkar CJI observed that the object
underlying this Act is to introduce a uniformity of terms and conditions of employment, in respect of workmen belonging
to the same category and discharging the same or similar work, under an industrial establishment and to make the said
terms and conditions known to the employees before they accept the employment.78 In Glaxo Laboratories, Desai J
observed that moving from the days when the whim of the employer was supreme lex, the Act took a modest step to
compel the employer to prescribe the minimum conditions of service, subject to which the employment is given’.79

The Act is a beneficent piece of legislation, its object is to require, as its preamble and its long title lay down, the
employers in industrial establishments, to define with sufficient precision, the conditions of employment of workmen
employed under them and to make them known to such workmen.80The movement was from status to contract, the contract
not being left to be negotiated by two unequal persons, but statutorily imposed. The Act makes it compulsory for the
establishments to which it applies, to reduce in writing, the conditions of employment and get them certified. Section 2
defines various terms, particularly ‘certifying officer’, ‘employer’, ‘industrial establishment’ and ‘Standing Orders’, while
the expression ‘workman’ carries the same meaning as is assigned to it in the Industrial Disputes Act. Section 3 makes it
obligatory upon every industrial establishment to frame Standing Orders in respect of matters set out in the schedule to the
Act and submit the same to the ‘certifying officer’, who shall, after making the necessary inquiry, certify the same, on
being satisfied that they have been framed in accordance with the Act. Upon such certification, the Standing Orders
become binding upon both the employer and the employees. They are required to be published in the manner prescribed by
the Act. Model Standing Orders have been framed, which are to be effective till the certified Standing Orders are made and
published under the Act. A failure to submit or frame Standing Orders by the employer, is made punishable by s 13, while
s 13A prescribes the forum for the determination of questions arising with respect to the application or interpretation of the
certified Standing Orders. The schedule to the Act specifies the matters which have to be provided for in the Standing
Orders. Rules have been made that are called Industrial Employment Standing Orders (Central) Rules 1946. The matters in
respect of which, conditions of employment are to be certified, have been specified in the schedule appended to the Act.
The schedule contains 11 matters in respect of which Standing Orders have to be made.

Originally, the jurisdiction of the certifying officer and the appellate authority was very limited; they were called upon to
consider whether the Standing Orders submitted for certification conform to the model Standing Orders or not. Thus, the
original jurisdiction of the certifying authorities was limited to examining the draft Standing Orders submitted for
certification and compare them with the model Standing Orders.81 In 1956, the Parliament affected radical changes in the
Act, widening its scope and altering its very complexion. Now s 4 casts a duty on the certifying officer or the appellate
authority, to adjudicate upon the fairness or reasonableness of the provisions of any Standing Orders. Thus, after the
amendment, the jurisdiction of the certifying authorities has become much wider and the scope of the inquiry also, has
become correspondingly wider. The inquiry, when such Standing Orders are submitted for certification, is now two-fold:

(1) Whether the Standing Orders are in consonance with the model Standing Orders? and;

(2) Whether they are fair or reasonable?

The workmen, therefore, can raise an objection as to the ‘reasonableness of fairness’ of the draft Standing Orders
submitted for certification. Section 10(2) gives the right, both to the workmen and the employer, to apply for modifications
and by reason of the change made in s 4, a modification has also to be tested by the yard-stick of ‘fairness and
reasonableness’. The Act provides a speedy and cheap remedy to the individual workman, to have the conditions of his
service determined and modified. The Parliament has not only broadened the scope of the Act, but has also given a clear
expression to the change in its legislative policy.82It has also conferred the right on an individual workman, by amending ss
4 and 10, to contest the draft Standing Orders submitted by the employer for certification, on the ground that they are
either not fair or not reasonable. And more important still is the right to apply for their modification, despite the finality of

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the order of the appellate authority under s 6. The Parliament thus, deliberately gave a dual remedy to the workmen, both
under the Industrial Employment (Standing Orders) Act 1946 as well as under the Industrial Disputes Act 1947.83

One of the issues debated extensively was the status of CSOS—are they merely contractual terms governing the day-to-
day employer-employee relations or should they be considered as having ‘statutory force’. The evolution of judge-made
law on this question was by no means scientific or rational. Out of the several decisions, a few important decisions which
have a bearing on the question have been identified for discussion here. In Bagalkot Cement, Gajendragadkar J, held that
IESOA has made relevant provisions for making standing orders which, after they are certified, constitute the statutory
terms of employment between the industrial establishments in question and their employees. That is the principal object of
the Act.84 It is important to note that the learned judge clothed the standing orders with ‘statutory force’. In Buckingham
and Carnatic Mills, the learned judge, however, toned down the said view and held that the CSOS represent the relevant
terms and conditions of service in a statutory form and they are binding on the parties at least as much, if not more, as
private contracts embodying similar terms and conditions of service.85 In Dewan Tea, rejecting the contention that
Standing Order 8(a)(i) of the company, which were certified before inserting the definition of ‘layoff’ in IDA, should be
construed in the light of the said definition, the learned judge observed:

... Section 10(1) of the Standing Orders Act provides that the Standing Orders finally certified under this Act shall not, except on
agreement between the employer and the workmen, be liable to modification until the expiry of six months from the date on which
the Standing Orders or the last modification thereof came into operation. If the Standing Orders thus become the part of the
statutory terms and conditions of service, they will govern the relations between the parties unless, of course, it can be shown that
any provision of the Act is inconsistent with the said Standing Orders.86 (italics supplied)

In a later case involving Buckingham and Carnatic Mills, the Labour Court took the view that the certified standing orders,
though binding on the employer and workers, had no statutory force and that they were merely directive and not
mandatory. Quashing the said order, Vaidialingam J, held that CSOS become part of the statutory terms and conditions of
service between the employer and his employees.87 In DK Yadav, Ramaswamy J, held that CSOS have statutory force and
do not expressly exclude the application of the principles of natural justice.88 In RSRTC, the question raised was: ‘whether
the CSOS could be elevated to the status of a statutory provision or do they have statutory force so as to be amenable to a
decree by a civil court in the event of their violation by the employer’. Justice Jeevan Reddy (for self, Sen and Nanavati JJ)
summed up the legal position thus:

The Act does not say that on such certification, the Standing Orders acquire statutory effect or become part of the statute. It can
certainly not be suggested that by virtue of certification, they get metamorphosed into delegated/subordinate legislation. ... The
consensus of these decisions is: the certified Standing Orders constitute statutory terms and conditions of service. Though we have
some reservations as to the basis of the above dicta as pointed out supra, we respectfully accept it both on the ground of stare
decisis as well as judicial discipline. Even so, we are unable to say that they constitute “statutory provisions” within the meaning of
the dicta in Sukhdev Singh,89...if it is held that certified Standing Orders constitute statutory provisions or have statutory force, a
writ petition would also lie for their enforcement just as in the case of violation of the Rules made under the proviso to Article 309
of the Constitution. Neither a suit would be necessary nor a reference under Industrial Disputes Act. We do not think the certified
Standing Orders can be elevated to that status. It is one thing to say that they are statutorily imposed conditions of service and an
altogether different thing to say that they constitute statutory provisions themselves.90

The above decisions, when read together present a foggy and even clumsy picture, conveying all things to all people, and
for that very reason merit some analysis. As discussed in the preceding paragraphs, standing orders are merely a set of
‘express’ and ‘general’ terms governing employment relationship in the industrial realm. They imply nothing more than an
extended individual contract of employment, the only difference being that they apply across-the-board to all ‘workmen’
employed in the establishment, whereas the former may, and often do, contain special terms as negotiated and contracted
between the employer and the individual workmen. The second important difference lies in the fact that while the contract
of employment is a negotiated instrument between the employer and an individual workman, the CSOS are certified by an
independent officer representing the Government under the provisions of the IESOA.

The decision of Gajendragadkar J, in Bagalkot that certified standing orders constitute statutory terms of employment
seems to be an extreme view as the expression ‘statutory’ has its own heavy-weight connotation in contra-distinction to
‘contractual’. The mere fact that the standing orders are certified by the certifying officer cannot transform the otherwise
‘contractual’ terms into those having ‘statutory force’, any more than the signing of a ‘settlement’ by the conciliation
officer u/s 12(3) of the IDA can transform it into an ‘award’. With great reverence to the eminent judge, it is submitted that
this ruling is misconceived and is wrong. His observation in Buckingham and Carnatic Mills is, though milder than that of
Bagalkot Cement, still not free from ‘statutory’ overtones. What is meant by the expression ‘statutory form’, if not

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something having the force of a statute? Is it possible to differentiate, qualitatively, the expression ‘statutory form’ from
‘statutory force’, which are inseparable like ‘word and meaning’ or ‘fire and heat’? The subsequent decisions of
Vaidialingam J, and Ramaswamy J, had only aggravated the uncertainty. Between the two, Vaidialingam J, was more
moderate in his observation that the CSOS become part of ‘statutory terms and conditions of service’, whereas
Ramaswamy J., went thus far as to hold that they have ‘statutory force’. With great respect for the learned judges, all these
expressions are nebulous and obscure.

It was Jeevan Reddy J, who rightly observed that, though the Bench had some reservations as to the basis of the above
dicta, it was respectfully accepting them on the ground of stare decisis as well as judicial discipline. The learned judge
further held that it is one thing to say that certified standing orders are ‘statutorily imposed conditions of service’ and quite
another to suggest that they constitute ‘statutory provisions’ themselves. The correctness of the view of Jeevan Reddy J,
can be testified from another angle also. Since the issue related to a State Road Transport Corporation, which is a public
sector undertaking amenable to writ jurisdiction, let us take the illustration of public sector undertakings for the purpose of
analysis. Let us assume that there are two public sector undertakings ‘A’ and ‘B’ located side-by-side with ‘A’ having less
than 100 workmen and ‘B’ employing more than 100. As required by the Act, ‘B’ has to frame the standing orders and get
them certified, whereas in respect of ‘A’ there is no such requirement, which means there are no standing orders at all. Let
us also assume that the two units dismissed a few workmen for certain acts of misconduct. If the court were to rely on
Sukhdev Singh as contended by counsel for respondent, it would produce an anomalous situation inter se in so far as the
workmen of unit ‘B’ could get relief of reinstatement by knocking at the doors of civil court or by directly approaching the
High Court under Art. 226, whereas the workmen of unit ‘A’ will be left with no relief, as there were no standing orders
with the so-called ‘statutory force’. Justice Jeevan Reddy had in fact highlighted this absurdity. It is not out of place to
mention that the majority decision in Sukhdev Singh itself was wrong, which is plagued by a battery of misconceptions and
perverse reasoning. It is not within the scope of this book to analyse the perplexing observations made by Ray CJI in that
case, hence it is left at that. It is submitted that the CSOS constitute merely general terms and conditions of service
formulated under IESOA and certified or, more appropriately, ‘sanctified’ by the certifying officer; nothing more and
nothing less. It is also necessary to note that the CSOS are neither exclusive nor exhaustive, and that they operate
coextensively with the special terms and conditions between the employer and the individual workmen, some of which
may involve a deviation from, or exception to, the CSOS. Viewed thus, the decision of Jeevan Reddy J in RSRTC is right
in so far as the legal status of the CSOS is concerned, and those of the earlier judges are clearly wrong.91 However, the
other part of the decision of Jeevan Reddy J, which touches upon the concurrent jurisdiction of civil courts in respect of
industrial disputes, is clearly out of step with the spirit of industrial relations law and is inconsistent with Premier
Automobiles,92 which is an authority for the proposition that the jurisdiction of civil courts stands ousted by necessary
implication. Thus, the decision of the learned judge in so far as it related to the so-called concurrent jurisdiction of civil
courts is wholly repugnant to the scheme and objects of the ID Act.

The terms of the certified Standing Orders will prevail over the terms of a contract which conflict with the Standing
Orders.93The Act being a socially beneficent Act and enacted for ameliorating the conditions of the weaker partner, the
conditions of service prescribed thereunder must receive such interpretation as to advance the intention underlying the Act
and to defeat the mischief.94 In Hindustan Steel,95 Desai J observed that a Standing Order which confers arbitrary,
uncanalised and drastic powers to dismiss an employee, by merely stating that it is inexpedient or against the interest of
security, to continue to employ the workman, is violative of the basic requirements of the principles of natural justice,
inasmuch as that the employer cannot impose a penalty of such a drastic nature as to affect the livelihood and put a stigma
on the character of a workman, without recording the reasons as to why the disciplinary inquiry was dispensed with and
what the misconduct alleged against him was. Though in this case, the court did not consider it necessary to go into the
vires of the relevant Standing Order, because the order of dismissal in terms of the Standing Order itself was found to be
unsustainable, it exhorted the management, which was a public sector undertaking, to bring the Standing Order in tune
with the philosophy of the Constitution, failing which the vires of the Standing Order may be examined in a proper
proceeding. In Tulsiram Patel, a Constitution Bench upheld the validity of a similar provision under Art. 311 of the
Constitution.1 In Hari Pada Khan, the Supreme Court upheld the validity of a Standing Order of the Indian Oil
Corporation, which permitted the removal or dismissal from service, without following the procedure of inquiry etc. The
Standing Order provided that where a workman had been convicted of a criminal offence or where the general manager
was satisfied for reasons to be recorded in writing, that it was not expedient or in the interest of security to continue the
workman, the workman may be removed or dismissed from service, without following the prescribed procedure. The court
observed that:

The doctrine of principle of natural justice has no application when the authority concerned is of the opinion that it would be
inexpedient to hold an enquiry and that it would be against the interest of security of the Corporation to continue in employment
the offender workman when serious acts are likely to affect the foundation of the institution. In Tulsi Ram Patel v Union of India
.... a Constitution Bench of this Court upheld the validity of the similar provisions under Article 311 of the Constitution. Recently,
in SLP [C] No.11659/92 ... where the validity of pari materia provision was questioned. This Court upheld the validity stating that

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the above clause will operate prospectively. ... A contention has been raised by Mr. Krishnamani that in Tulsi Ram Patel’s case
[supra] this Court had upheld the validity of the Rule subject to the principle of natural justice. It is needless to mention that the
principle of natural justice requires to be modulated consistent with the scheme of the Rules. It is settled law that the principle of
natural justice cannot supplant but can supplement the law. In that view of the matter, the Rule having been made to meet specified
contingency the principle of natural justice by implication, stands excluded. We do not think that the Rule is ultra vires of Articles
14 and 21 as stated earlier.2

Determination of the Contract of employment

There is a variety of modes in accordance with which, the contract of employment gets determined. An employer may
terminate the contract of employment according to the terms of the contract itself or he may terminate the contract as a
measure of punishment, inflicted by way of a disciplinary action, for an act of misconduct. Apart from the death of one of
the parties,3 the contract of employment may be determined by impossibility,4 frustration or voluntary retirement. The
contract may also be determined on a transfer or closure of the undertaking. The employee, may, on the other hand,
terminate the contract of employment by voluntarily retiring, ie, resigning or abandoning the job. The contract may also be
determined on reaching the age of superannuation or by the continuous ill health of the employee. In cases where the
contract is determined by the volition of the employee, it is not a termination of the contract by the employer. In such
cases, the employer is merely acceding to the employees’ request or action.5 The determination of a contract is the major
cause of industrial disputes and has produced a good bit of judicial grist. These topics, therefore, are being discussed in
detail:

By the Employee

The employee may determine the contract of employment by voluntarily retiring from service, viz, by resigning his job or
abandoning the job. Voluntary retirement means the determination of the contract of employment by the volition of the
employee himself, in contradistinction to an act on the part of the employer, to terminate the service. ‘Termination of
service’ and ‘voluntary retirement’ are two different concepts. A mere submission of the employee to the termination of
his service by the employer, is not a ‘voluntary’ act on the part of the former. By and large, an employee is said to have
determined the contract of employment voluntarily, when he resigns his job or abandons the same. The expression
‘voluntary retirement’ has been used in the exclusionary sub-cl (a) of the definition of retrenchment in cl (oo) of s 2 of the
Act. This expression comprehends both the topics, viz, ‘resignation’ and ‘abandonment of the job’.

(i) Resignation:

It is the common law right of an employee to determine the contract of service by resigning his job. In the language of
Madon J:

By entering upon a contract of employment, a person does not sign a bond of slavery and a permanent employee cannot be
deprived of his right to resign. A resignation by an employee would, however, normally, require to be accepted by the employer in
order to be effective.6

If on the other hand, the resignation is not accepted, then in the absence of any other terms to the contrary, the law implies
that the contract of service could be terminated by a reasonable notice and unless the employer complies with this implied
term of law, it cannot be said that the contract of service has been put to an end to and consequently, the resignation will
not be effective, but before a resignation could be effective, it must terminate the contract of service in a legally defined
mode. If the resignation is accepted, then the contract of employment will be discharged by the consent of the parties. The
view that the moment an employee tenders his resignation, it becomes effective and the bond of service is completely
snapped, is likely to introduce chaos in the sector of employment.7 In JK Cotton, Ahmadi J observed that the resignation is
not complete until it is accepted by the appropriate authority. In other words, ‘before such acceptance, an employee can
change his mind and withdraw his resignation, but once the resignation is accepted, the contract comes to an end and the
relationship of master and servant stands snapped. The learned judge further observed:

If an employee makes his intention to resign his job known to the employer and the latter accepts the resignation, the contract of
employment comes to an end and with it stands severed, the employer-employee relationship.8

The general rule regarding resignations is that when an employee has invited by his letter of resignation, the determination
of his employment, his services normally stand terminated from the date on which the letter of resignation is accepted by

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the appropriate authority or from any other date in the letter of resignation. In the absence of any law or rule governing the
conditions of service to the contrary, it will not be open to the employee to withdraw his resignation after it has been
accepted by the appropriate authority or after the date indicated in the letter of resignation. Till the resignation is accepted
by the appropriate authority, in accordance with the rules governing the acceptance or on the expiry of the date indicated in
the letter of resignation, the employee has locus poenitentiae, but not thereafter.9 Any undue delay in intimating the
acceptance of the resignation, may justify an inference that the resignation has not been accepted.10 However, in the case of
a resignation which remains unaccepted, the employee cannot be deemed to be in service for months or years together.
After the lapse of a reasonable period of notice, the contract would be deemed to have come to an end, whether the
resignation is accepted or not.11 A resignation by an employee can be validly withdrawn before its acceptance by the
employer is communicated12 but he cannot be permitted to withdraw the resignation after it has been accepted by the
employer, because after the acceptance, the contract of employment gets determined and the employee thereafter, is no
longer in service.13The legal position is that the resigner has a right to resign, but the resignation can be effective only after
its acceptance as it is a bilateral act. In other words, the resignation is by the employee, while the acceptance is by the
employer. Unless the two acts are completed, the transaction remains in an inchoate form. Thus, a resignation sent by the
employee is no resignation in the eye of the law until accepted by the employer and so long as it is not an effective
resignation, there is no bar on withdrawing the same.14

In Sudha Nagaraj, the employer tendered his resignation due to domestic reasons but the acceptance was not
communicated to him till he applied for a withdrawal of the resignation. A single judge of the Andhra High Court held that
a mere oral information regarding the acceptance of the resignation, was not sufficient and valid. Hence, he was entitled to
withdraw his resignation.15 In JK Cotton, the Supreme Court held that the determination of the contract of employment by
the resignation of the employee himself, was not retrenchment, because it was not brought about by the employer. The
court discountenanced the holding of the High Court that by accepting the resignation of the employee, the employer had
brought about the termination of his service. The principle will squarely apply to the cases of abandonment of job as well,
as both resignation and abandonment of job are species of the same genesis, viz, voluntary retirement.16

If the employee resigns in praesenti, the resignation terminates his office tenure forthwith, on an acceptance by the
employer and cannot be withdrawn or revoked after acceptance but if the employee chooses to resign from a future date,
the act of resignation is not complete, because it does not terminate the tenure of his service forthwith on acceptance and
the employee can, before the arrival of the prospective date on which it was intended to be effective, withdraw the
resignation. In other words, in the absence of a legal, contractual or constitutional bar, a ‘prospective’ resignation can be
withdrawn at any time before it becomes effective and it becomes effective when it operates to terminate the office tenure
of the resigner.17 In a case where the resignation is withdrawn before being accepted and the withdrawal is effective, the
result would be that the resignation shall be deemed to have been not in force at any time and the employee shall be
deemed to have been in service throughout the period. The consequential order that he is entitled to the arrears of salary,
need not be specifically mentioned in the order. It is a claim which flows from the relief of a deemed declaration that the
employee has been in service throughout and, therefore, he shall be entitled to the wages and all the other benefits for that
period.18

In JN Srivastava, the Supreme Court held that even if a voluntary retirement notice is moved by an employee and it gets
accepted by the authority within the time fixed, then, before the date of retirement is reached, the employee has locus
penetentiae to withdraw the proposal for voluntary retirement.19 The Supreme Court reiterated the same view in Nand
Keshwar Prasad.20 In Shambhu Murari Sinha, the facts were: the employee gave a letter exercising his option of voluntary
retirement, on 18 October 1995, which was accepted by the management vide their letter dated 30 July 1997 but the
employee was not relieved from service and was allowed to continue in service till 26 September 1997. In the meantime,
the employee withdrew his letter opting for voluntary retirement vide his letter dated 7 August 1997, which was refused by
the management. Allowing the appeal, the Supreme Court held that for all practical purposes, 26 September 1997 was the
effective date on which he was supposed to be relieved, and that the employee could withdraw the option exercised by him
before the effective date.21 In State of Haryana, the Supreme Court, referring to rr 2.2 and 5.32(B) of the Punjab Civil
Service Rules, held that if a permission to retire was not refused within the period specified in sub-cl (1) of r 5.32(B), the
retirement would become effective from the date of expiry of the period and that there was no provision in the rules to
withhold the permission in certain contingencies and the voluntary retirement would take effect automatically, on the
expiry of the period specified in the notice. The court further held that there was no need to communicate the acceptance of
the notice to the employee, nor could it be said that non-communication of the acceptance should be treated as amounting
to a withholding of the permission.22

In KSRTC, the facts were: the employee submitted his resignation of 5 February 1994. The same was accepted by the
management on 8 February, but the employee withdrew the resignation on 9 February, ie, before the acceptance was
communicated to him and before it became effective. The management, however, relieved him on 11 February, by
communicating the order of acceptance. The Karnataka High Court held that the resignation could become effective only

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on communication and from the date on which the communication was received, and hence, the relieving of the employee
by the management was illegal.23 The resignation, if tendered voluntarily, can be withdrawn by the employee before it is
accepted.24 Where the employee gave the letter of resignation voluntarily, which was accepted immediately and the same
was communicated to him orally, on the same day, and the employee also understood it that his resignation was accepted
and, therefore, he did not return to duty from that date onwards, the argument that the contract cannot be brought into
existence or terminated except in writing, could not be accepted. Once the offer of resignation has been accepted, the
termination of service is complete.25 Where the employee submits his resignation letter, to be effective on a future date, the
employer would not be entitled to relieve the employee before the date fixed by him, that the request, for resignation
remains inchoate till the date fixed by the employee and that he has the right to withdraw the resignation at any time before
the effective date.26

The above rulings warrant an examination. Where an employee offers to resign from a future date, and if the employer is
willing to pay the employee the wages for the remainder of the notice period and relieve him immediately, there is no
justification for the court to permit such employee to continue. The courts have yet to realise the fact that an employee,
who has decided to leave the services of a company for whatever personal or official reasons or other frustrations, could
cause irreparable damage to the company’s interests, as for instance, by passing on classified information or trade secrets
or formulae to a competitor or to his prospective employer, or tampering with the records and other sensitive documents,
or canvassing among his colleagues, against the company and so forth. The employer has the inherent right to accept the
resignation and relieve him forthwith, without having to wait for the period of notice to expire, however, he should pay the
employee the wages or salary for the unserved portion of the notice period. The proposition, that the employer should
necessarily retain an employee till the expiry of the period of notice, revolts against common sense and borders on tyranny,
apart from seriously imperiling the security of the employer’s business in the context of a highly competitive environment.

In Haryana SCD Federation (supra), the High Court applied the ratio evolved by the apex court in Gopal Chandra
Misra,27 and Balram Gupta,28 both of which were wrongly decided. The learned judges of the Supreme Court grossly
failed to appreciate the highly sensitive issues touching upon the interest and security of the employer and his business, and
proceeded to decide the cases in a casual manner. All the above decisions require to be reviewed and correct legal position
laid down consistent with the settled law governing the determination of the contract of employment. In Jayakodi Jacob,
the Madras High Court held that once the option in favour of voluntary retirement has been exercised and the benefits have
been received by the employee, nothing remains to be done by the employer, in view of the fact that the employee has
accepted the compensation without any protest, reservation or demur.29

In the absence of any Standing Orders, bye-laws or rules governing the resignation of employees in a company, it has to be
judged with reference to the ordinary law of the land, that is the law of contract. A resignation submitted by an employee is
in the form of an offer. It is open to the management to accept the offer or reject it but it is not open to the management to
accept the resignation with effect from a date different from the one indicated in the letter of resignation. Such an
acceptance would not really be the acceptance of the offer, but would amount to a counter-offer, which must again be
accepted by the employee. If the employer accepts the resignation from the date indicated in the letter of resignation, it
would not amount to a termination of service by the employer. However, if the resignation is accepted from a date different
than the one indicated in the resignation letter; the termination of the service from such date would be deemed to be an
independent action, which would amount to a termination of the service by the employer.30 The termination of the service
of an employee, by accepting his resignation, cannot tantamount to a discharge as a punishment,31 but, if before accepting
the resignation, the employer starts disciplinary proceedings against the employee and dismisses him, the resignation will
have no effect in the event of the dismissal being held wrongful, as the contract of service would not have been
discharged.32 By voluntarily resigning his job, an employee himself determines the contract of employment. Hence, he
cannot validly raise an industrial dispute with respect to a termination of his service and reinstatement33 but cases do arise
where employees allege that the resignation had been obtained under coercion, duress, misrepresentation or fraud or is a
forged one. In such cases, what is normally in issue is the genuineness of the resignation. If the resignation has been
procured by such methods or threats or intimidation, the consequential termination of service will be invalid, because such
a resignation is no resignation in the eye of law.

In JK Cotton, the employee had determined the contract of his employment by a resignation but subsequently, he raised an
‘industrial dispute’ with respect to the termination of his employment, which was referred to the labour court for
adjudication. The labour court held that the resignation of the employee was not voluntary and, therefore, the termination
of his service was illegal. Consequently, the labour court awarded a reinstatement. In a writ petition though, the High
Court came to the conclusion that the resignation tendered by the employee was voluntary and without any threat or
coercion. On a construction of the definition of ‘retrenchment’, it was held that the termination of the employment
amounted to retrenchment, as the service was terminated by the employer, by accepting the resignation of the employee.
Setting aside the orders of the courts below, the Supreme Court held that it was a case of ‘voluntary retirement’ on the part

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of the employee and not a case of termination of his service by the employer.34

(ii) Abandonment of Job:

The contract of service comes to an end where the workman abandons his job but ‘abandonment of service’ has not been
defined in the Act. Etymologically, the word ‘abandonment’ has been explained to mean ‘to leave completely and finally’;
forsake utterly; to relinquish, to renounce, to give up all concern in something;35 relinquishment of an interest or claim;36
abandonment when used in relation to an office means ‘voluntary relinquishment’.37 In order to constitute an
‘abandonment’, therefore, there must be a total or complete giving up of the duties, so as to indicate an intention not to
resume the same. Abandonment must be total and under circumstances which clearly indicate an absolute relinquishment.
A failure to perform the duties pertaining to an office, must be with an actual or imputed, intention on the part of the
officer to abandon and relinquish the office. In Buckingham & Carnatic, Gajendragadkar CJI held that abandonment or
relinquishment of service is always a question of intention and, normally, such an intention cannot be attributed to an
employee without adequate evidence in that behalf. A temporary absence is not, ordinarily, sufficient to constitute an
‘abandonment of an office’. Under common law, an inference that an employee has abandoned or relinquished service, is
not easily drawn, unless from the length of absence and from the other surrounding circumstances, an inference to that
effect can be legitimately drawn and it can be assumed that the employee intended to abandon his service. However, where
the parties agree upon the terms and conditions of service or they are included in the certified Standing Orders, the doctrine
of common law or considerations of equity would not be relevant. It is then, a matter of construing the relevant term
itself.38 However, the ‘intention may be inferred from the acts and conduct of the party’. The question as to whether the
job, in fact has been abandoned or not, is a question of fact which is to be determined in the light of the surrounding
circumstances of each case.39 A mere absence of a workman from duty, cannot be treated as an ‘abandonment’ of service.
The word ‘absent’, according to the dictionary meaning, means ‘not present’ or ‘not being in a particular place at a
particular time’. ‘Absence’ therefore, would mean to be ‘absent from a specified position and not physically present’. The
meaning of the word ‘abandoned’ depends upon the context in which it is intended to be used.40

The presumption of the employee having abandoned the job on his own accord, on account of an absence from duty, for a
period exceeding a certain number of consecutive days, without leave or permission, may be made rebuttable by a
Standing Order or a rule. In such a situation, it would be open to the workman to contend, in the first instance, that in fact,
he was not absent for the prescribed number of days. It is further open to him to satisfactorily explain the reasons for his
absence from work.41 When an employee loses his lien on the job upon the happening of a contingency, ie, absenting
without leave for a certain number of days, under the Standing Orders, that would bring an automatic termination of the
contract of service. On a construction of the relevant Standing Order, which provided that a workman who does not report
for duty within eight days of the expiry of the sanctioned leave, will lose his lien on the appointment, the Wanchoo CJI
held that the service of the concerned workman stood automatically terminated when he did not appear for eight days after
the expiry of his leave.42 In Indian Iron and Steel Co, the concerned workmen were taken in police custody and they
applied for leave from the custody, which was refused by the employer. On the construction of the relevant Standing
Order, which provided that any workman who was absent for 14 consecutive days without permission, will be
automatically discharged from service, the Supreme Court held that on the facts and in the circumstances of the case, the
automatic discharge of the workmen was unassailable. The court pointed out that:

... if the workmen are arrested at the instance of the company, for the purpose of victimisation and in order to get rid of them on the
ostensible pretext of continued absence, the position will be different. It will then be a colorable or mala fide exercise of power
under the relevant Standing Order...43

In Binny,44 the workman was held to have himself left the service, terminating his contract under the relevant Standing
Order, for ‘absenting himself without leave for eight consecutive working days’ but a single judge of the Delhi High Court,
in Delhi Cloth Mills, held that where the absence of the workman from work, was due to any reason beyond his control and
it was possible for the employer to grant leave without pay, it would be unreasonable and mala fide for the employer to
decline to grant leave to the ‘extent necessary’.45 In this case, the workman had been detained under the Defence of India
Rules and the employer refused to grant leave without pay, for an indefinite period of about six months or so. In the
circumstances of the case, the court held that the refusal of the employer to grant leave without pay was unreasonable and
amounted to an act of victimisation or unfair labour practice.

The Gujarat High Court, in Bata India, where the workman, suffering from a protracted illness due to a fracture of a leg, in
a foreign country, could not join duty as required by the Standing Order, before the expiry of the granted leave, because
after a further check up, he was advised further rest and the certificate of such advice was received by the employer after
the order of termination, held that since the workman was prevented from joining duty for a sufficient cause, the
termination of service on the basis of the Standing Order was not sustainable.46 In Dabur, the workman had applied for an

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extension of his sanctioned leave but the employer neither granted nor refused to grant the leave. In this situation, the
Calcutta High Court held that it was a case of an automatic termination of service under the relevant Standing Order.47 In
Shambhu Nath Mukherjee, the relevant Standing Order provided that where a workman absents himself for ‘more than
eight consecutive days’, his name will be automatically struck off the rolls of the company. The workman first attended the
work on 14 August 1965 and 15 August 1965 was a holiday. His name was struck off the rolls of the company on 24
August 1965. In the circumstances, the court observed that the Standing Order was not attracted, because the workman was
not absent for more than eight consecutive days.48.

On the other hand, in Shambhoo Singh, in the circumstances of the case, the Madhya Pradesh High Court held that the
workman concerned, had lost his lien on his appointment due to an over-stay of the granted leave, in terms of the relevant
Standing Order.49 Similarly in Freewheels India, where the workman remained absent for eight consecutive days, without
offering any explanation for his absence and only submitted a certificate of fitness, he was deemed to have left the service
of the employer, in terms of the relevant Standing Order. The court observed that the certificate of fitness, without
anything more, could not be said to amount to an explanation or an absence without leave as envisaged in the relevant
Standing Order, particularly when the provision therein was that such explanation had to be to the satisfaction of the
departmental head.50 The Bombay High Court, in Baba Saheb Devgonda Patil, held that striking off the name of a
workman from the rolls, who had remained absent for about three years without any justification, would not constitute
retrenchment. The court observed that though striking the name of a workman off the roll, without anything more, would
constitute retrenchment, every striking off of a name from the rolls would not constitute retrenchment. The intention to
abandon the job is normally not to be attributed to an employee. It would ultimately depend on the established facts and
circumstances of each case. It is not possible to lay down a universal proposition, that a long and continuous absence for
years together, without any reasons or justification whatever and without anything more, cannot give rise to an inference of
abandonment.51 In WB Board of Secondary Education, the employee absented himself without notice and did not resume
duties in spite of requests. Consequently, he was discharged from service. Another employee was appointed in his place.
After a lapse of seven years, he filed an appeal under the relevant regulations. The appellate committee rejected the prayer
for a reinstatement and the consequential reliefs. The committee, however, directed the employer to pay gratuity to the
employee, calculated at the rate of one month’s salary, for each year of the completed service; this direction was upheld by
the Calcutta High Court.52

In cases where an employer company seeks to terminate the service of a workman, in terms of a Standing Order or a
regulation, it has to give effect to the whole of the Standing Order or the regulation and cannot close its eyes to the
restrictions prescribed in such Standing Order or regulation. For instance, where, in addition to providing that a workman
who remains absent for a certain number of days without leave, shall be deemed to have abandoned the service without
notice, thereby terminating his contract of service, the Standing Order further provides that if the workman gives a
satisfactory explanation of his absence, his absence shall be converted into leave, the whole of the Standing Order has to be
given effect to.53 Occasionally, there are alternative provisions in the Standing Orders, dealing with the absence of a
workman beyond a certain specified period of time. In Travancore Rayons, one of the Standing Orders of the company
provided that a workman who is absent without permission, for more than 20 days in aggregate in a year, and for eight
days continuously, will be deemed to have voluntarily left the company’s service, even though he has applied for leave and
his leave had not been sanctioned while, another Standing Order provided that an absence without leave, for more than
eight consecutive days, was also a misconduct in respect of which a penalty could be imposed by the management. The
Kerala High Court held that the correct way to understand the scheme of the Standing Order was that in case where an
employee is found to have been absent from duty without leave, for eight consecutive days, the management has the option
to enforce the provisions of the former Standing Order and treat the employee as having voluntarily left the services, or
treat him as still continuing in the service of the company and to impose a penalty on him regarding his absence, treating it
only as a misconduct.54

In Hamdard Dawakhana, a single judge of the Delhi High Court held that if a workman overstays his leave by the period
prescribed by the Standing Orders, he loses his lien on the appointment and his services stand automatically terminated and
if there is any other clause for treating his absence as a misconduct, the management is entitled to proceed against the
workman under either of the clauses. In other words, it is open to the management to take recourse to one or the other
provision, according to its discretion. If there is a provision for rejoining, the workman can rejoin duty within the period
prescribed, after the expiry of his leave, if he offers an explanation that satisfies of the management, as required by the
Standing Order.55 The absence of workmen from work, when they go on a strike, with the specific object of enforcing the
acceptance of their demand, cannot lead to the conclusion that they have abandoned their employment, as a strike, in law,
does not bring the contract of industrial employment to an end.56There is no such thing as a lien on service. A lien is
always on a post. Lien is the right of an employee to resume or return to duty, a substantive or acting appointment, from
which he was relieved. But once a workman has terminated the contract of employment by abandoning his job, the
question of lien would not arise.57

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The abandonment of job by an employee is also comprehended in the expression ‘voluntary retirement’, used in the
definition of retrenchment in s 2(oo). The words ‘voluntary retirement’ in the context, is accentuated. In other words, in
such cases, the determination of the contract of employment must have been brought about by a voluntary abandonment of
the job. In common law, an inference that an employee has abandoned or relinquished his job, is not easily drawn, unless
from the length of his absence and from other surrounding circumstances, an inference to that effect can be legitimately
drawn and it can be assumed that the employee intends to abandon his service.58 The measure of the length of the time
required before making such inference, may vary in accordance with the facts and circumstances of each case. In order to
obviate uncertainties, provisions are made in the service rules or the Standing Orders of the commercial and industrial
establishments, to the effect that an absence of the employee, for a certain number of days, will be deemed as an
abandonment of the employment, unless otherwise explained by him. The certified Standing Orders of an industrial
establishment would have the force of statutorily imposed conditions of service. In such cases, the doctrine of common law
or the consideration of equity would be relevant. It would be a matter of construction of the relevant terms of the Standing
Orders themselves, that would matter.

In Robert D’Souza, the management struck the name of an employee, off its rolls, stating that ‘you have absented yourself
from 18 September 1974 and hence, your services are deemed to have been terminated from the day you have absented
yourself’. From the language of this order, the court inferred that the service was terminated by the employer and as such
the act came under retrenchment.59 In Ram Samujh Maurya, the employee remained absent for more than two years
without leave and despite a number of letters sent to him, he neither cared to join, nor contacted the employer. From such
long absence, without any rhyme or reason, the court inferred that the workman had abandoned his job. As such, his
services stood terminated automatically, which termination was brought about by the workman himself and not by the
employer and, hence, it would not fall within the definition of retrenchment. The learned single judge of the Allahabad
High Court, observed:

In cases where services stand terminated automatically, principles of retrenchment cannot be applied. Abandonment of job is one
such instance. If the workman himself willingly abandoned his job, it cannot be said that he has been retrenched and the question
of paying compensation in these circumstances, does not arise.60

In DK Yadav, the relevant clause of the certified Standing Orders of the employer company provided that if a workman
remained absent without sanctioned leave or beyond a period of leave granted or subsequently extended, ‘he shall lose his
lien on the appointment, unless he returns’ ‘within 8 calendar days of the commencement of the absence, or the expiry of
the leave originally granted or subsequently extended’ and he ‘explains to the satisfaction of the manager or the
management, the reasons of his absence or his inability to return on the expiry of the leave’. In the absence of a compliance
with these requirements, the workman shall be deemed to have ‘automatically abandoned the service and lost his lien on
his appointment. Thereafter, his name will be struck off from the muster rolls’. In this case, the employer, by its letter
dated 12 December 1980, which was received by the workman on 19 December 1980, intimated to him that he had
wilfully absented from duty continuously, for more than eight days, from 3 December 1980, without leave or prior
information or intimation or previous permission from the management and therefore, he was ‘deemed to have left the
service of the company’ on his account and lost lien on his appointment with effect from 3 December 1980, in terms of cl
13(2)(iv) of the certified Standing Order of the company. On the other hand, the workman averred that despite his
reporting on duty on 3 December 1980 and every day continuously, thereafter, he was prevented from entering through the
gate and he was not allowed to sign the attendance register, without assigning any reason. In these peculiar circumstances,
a three judge Bench of the Supreme Court held that the procedure adopted by the employer was not just, fair and
reasonable, inasmuch as no opportunity was given to him and no inquiry was held. The court further observed that the
principles of natural justice must be read into the relevant Standing Orders, otherwise, they would be arbitrary, unjust and
unfair. Hence, the impugned order was liable to be struck down. In the peculiar circumstances of the case, the court
ordered reinstatement, with only fifty per cent back wages.61 On the other hand, on the facts and in the circumstances of
Amgauda Sidram Hakke, a single judge of the Bombay High Court held that the inference of a voluntary abandonment of
service was justified and even assuming that the termination was for an act of misconduct, without having held an inquiry,
it was not a fit case for a judicial review, because the petitioner’s case of sickness was not true.62 In Gouranga Acharjee, a
single judge of the Calcutta High Court held that the right guaranteed to the management, to terminate the services of a
workman, in this case a probationer, for a continuous, unauthorised absence or overstaying of leave, was not absolute and
the principles of natural justice, which have to be read into the offending clause, must be complied with, and that past
absence should not be a ground for invoking the relevant rule of the Standing Orders, for terminating the services of a
workman.63 In Syndicate Bank, the Supreme Court had to interpret a provision of Sastri Award. The said provision
stipulates: “in the event of an unauthorised absence from duty for 90 or more days beyond the sanctioned leave, the
management may at any time thereafter give a notice to the employee to report for duty within 30 days of the notice; that,
if, the employee does not report for duty or offer a satisfactory explanation within 30 days, he should be deemed to have

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voluntarily retired.” The Supreme Court held that it does not amount to a punishment for misconduct, but is only a
recognition of the realities of the situation and does not result in the violation of the principles of natural justice, and that
the termination order passed by the management was valid.64

In striking contrast, Venkatarama Reddi J, in National Aluminium, held that there could be nothing like an ‘automatic
termination’ of service in law (in the instant case, for unauthorised absence), without inquiry or even a show-cause notice.
Where the employee remains absent with impunity, without prior sanction or approval, for days and months together, it is
rather for the court to hold that the employer should patiently wait till the employee reports for duty, at his own
convenience.65 Where did the learned judge get the material from in order to sustain his observation, ‘there can be nothing
like an automatic termination’? Was it from the Act or any legal treatise or a judicial precedent or from his own fertile
imagination? If such misplaced benevolence was to be extended to a situation in which a substantial number of employees
handling vital operations remain absent for days together without authorisation, the employer would be left with no
alternative than to shut down the operations and close down the undertaking till such time the absconding workers resume
duties at their sweet will! That would be the terrible consequence of this decision. Secondly, the aforesaid observation is
repugnant to the standing orders, in so far as the Model Standing Orders (appended to the Standing Orders Act) and the
Certified Standing Orders (certified under the provisions of the said Act) both of which stipulate in terms: ‘unauthorised
absence or overstay of leave without permission, for more than 8 consecutive days, amounts to a loss of lien on
appointment and the workman shall be deemed to have left the services on his own accord, and his name shall stand struck
off from the muster rolls of the establishment.’ If Model Standing Orders, which are an inseparable part of the Act, were
not to be regarded as law or as rules having the force of law, what else could they be? To say the least, the decision
rendered in National Aluminium is wholly perverse, capable of producing great public mischief, and deserves to be
rejected without a second look. It is well-settled in a host of decisions that the principles of natural justice could have
operation only in unoccupied interstices of law and not in a case where the provisions clearly spell out the rights, duties
and obligations of the parties and also the consequences of their actions or omissions. It is disquieting that the apex court
should have applied two diametrically opposite standards, while dealing with cases involving an identical set of facts, as is
disclosed in Syndicate Bank and National Aluminium Co. If the principles of natural justice had no application to a case of
a continued unauthorised absence, as held in the former case, by what standard of logic or law, could they be applied to the
latter? In Balbir Singh, the facts were: the workman applied for leave for a period of six months, for being treated for a
stomach ailment and also tendered his resignation in the alternative, stating that the same was conditional. The employer
did not communicate any decision on the leave application and the workman went on applying for leave. A single judge of
the Punjab and Haryana High Court held that the events indicated that the resignation tendered in the first instance stood
withdrawn, the employer could not thereafter, inform the workman that his resignation was accepted, and the workman
was deemed to be in service.66

(iii) Retirement on Superannuation:

Meaning of—The word ‘retire’ has been defined in the Concise Oxford Dictionary as ‘cease from or give up office or
profession or employment’. The meaning of the word, therefore, postulates a voluntary act on the part of the employee.
Generally, the age of retirement is fixed, either in the standing orders applicable to the establishment or the service rules of
the employer. It is open to the employer and the workmen, to raise an industrial dispute with respect to the fixing of the
age of retirement and the tribunals have jurisdiction to fix the age of retirement, after taking into consideration the relevant
factors. But where, in an establishment, the age of retirement is not fixed at the time of employing a workman, he cannot
successfully contend that a subsequent fixation of the age of retirement will not apply to him. It is not open to a workman
to continue to serve the employer at his own sweet-will, till whatever age he likes.67 In Guest Keen Williams, the Supreme
Court has laid down the following important factors that industrial adjudication has to take into consideration, for fixing
the age of superannuation:

i. nature of the work assigned to the employees in the course of their employment;

ii. nature of the wage structure paid to them;

iii. the retirement benefits and other amenities available to them;

iv. the character of the climate where the employees work;

v. the age of superannuation fixed in comparable industries, in the same region; and

vi. the practice prevailing in the industry in the past, in the matter of retiring its employees.68

All these and all other relevant factors have to be weighed by the adjudicator in every case, while fixing the age of
superannuation in an industrial dispute but as to what factor should be given more weight and importance, would depend
upon the facts of each case. No hard and fast rule can be laid down for fixing the age of retirement. The decision on the

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question would always depend on a proper assessment of the relevant factors, which may conceivably vary from case to
case. Some of the considerations which may be relevant while fixing the age of retirement of factory workers, may not
necessarily apply in fixing the age of retirement for the clerical and subordinate staff.69 It is generally recognized, in
industrial adjudication, that where an employer adopts a fair and reasonable pension scheme, that would play an important
part in fixing the age of retirement at a comparatively younger age. If a retired employee can legitimately look forward to
the prospects of earning a pension, then the hardship resulting from an early compulsory retirement is considerably
mitigated; that is why, cases where there is a fair and reasonable scheme of pension in vogue, would not be comparable or
even relevant in dealing with the age of retirement in concerns where there is no such pension scheme.70 However, in
British Paints, the Supreme Court observed that:

...generally speaking, there is no reason for making a difference in the age of retirement as between clerical and subordinate staff
on the one hand and factory workmen on the other, unless such differences can be justified on cogent and valid grounds. It is only
where the work in the factory is one of a particularly arduous nature, that there may be reason for fixing a lower age of retirement
for factory workmen, as compared to clerical and subordinate staff.71

In view of the fact that the work in the paint factory was not considered to be arduous, as compared to the work of the
clerical and subordinate staff, the retirement age at sixty was considered fair and proper, both for the clerical and the
subordinate staff, as well as for the factory workmen (existing as well as future). This rule was reiterated in Jeewanlal,
where the court observed that:

... the present day tendency is to fix the age of superannuation generally, at 60, unless the tribunal feels that the work of the
operatives is particularly arduous or hazardous, where workmen may lose efficiency earlier.72

However, in the absence of materials on record, the court could not assess the actual nature of the work of the operatives,
to find out whether it was really arduous or hazardous, so as to lead to the conclusion that the proper age of superannuation
should be left at 58 years. Hence, the case was remanded for inspecting the conditions in the factory, for deciding the
question as to whether the age of superannuation should be left at 58 years or whether it should be raised to 60 years.

(iv) Region-cum-Industry Basis:

In Guest Keen Williams, the Supreme Court laid down, inter alia, the regional practice as one of the factors for fixing the
age of superannuation. This formula was applied in Dunlop,73 while fixing the age of retirement for the clerical staff at 60
years consistent with the trend prevailing in the Bombay region. In Imperial Chemical Industries (supra), the court again
emphasised that region-cum-industry formula is one of the important material considerations while fixing the retirement
age. In GM Talang, it was observed that in the delicate task of adjusting the needs of the employees, to the interests of the
employers, and, what is even more important, to the general interest of the country at large, industrial adjudication has to
pay special attention to the prevailing practice in the industrial region concerned. In this case, the Supreme Court, while
raising the age of superannuation fixed by the tribunal from 58 to 60 years, held:

If in any particular region, employees have been successful in their claim for fixing the age of retirement at 60, this very success is
bound to raise in others in the region, similar expectations. Refusal of similar relief to them is likely to create discontentment. It is
the endeavour of industrial adjudication to prevent this. That is why, on questions of age of retirement and hours of work and to
other similar matters, industrial tribunals attach much weight to what has been done in the industrial concerns in the
neighbourhood, in recent times—whether by agreement or by adjudication.74

In Balmer Lawrie, the court observed:

We feel that the time has now come for increasing the age of retirement in the case of clerical staff and the subordinate staff
generally, from 55 to 58. 75

In British Paints, the facts were: the tribunal fixed the age of retirement for the clerical and subordinate staff at 58 years
and for the workmen in the factory, at 55 years. The Supreme Court, modified the award fixing the age of retirement for
the clerical, subordinate staff and factory workmen at 60 years. Wanchoo J observed:

Considering that there has been a general improvement in the standard of health in this country and also considering that longevity
has increased, fixation of the age of retirement at 60 years, appears to us to be quite reasonable in the present circumstances. Age

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of retirement at 55 years was fixed in the last century, in Government service, and had become the pattern for fixing the age of
retirement everywhere. But time, in our opinion, has now come, considering the improvement in the standard of health and the
increase in longevity in this country during the last fifty years, that the age of retirement should be fixed at a higher level, and we
consider that, generally speaking, in the present circumstances, fixing the age of retirement at 60 years, would be fair and proper,
unless there are special circumstances justifying a fixation of a lower age of retirement. 76

However, in Bengal Chemicals, relying on the holding of the court in Jessop & Co’s case, the court declined to increase
the retirement age of the workmen in the West Bengal region, from 58 to 60 years.77 In Hindustan Times, the Supreme
Court fixed the age of retirement at 58 years for the employees working in the Delhi region.78 In Burmah-Shell, the court
reviewed the earlier dicta with reference to the trend obtaining in the Delhi area where there were as many as 22 concerns
in which the age of superannuation of workmen had been fixed at 60 years, either by settlements or by industrial awards.
Accordingly, the court raised the age of superannuation to 60 years. Hegde J observed:

In fixing the age of superannuation, the most important factor that has to be taken into consideration is the trend in a particular area
... in the matter of fixing the age of superannuation, the trend in a particular area was the most important factor, though in the
matter of determining the other conditions of service of workmen, the principle of region-cum-industry is by and large, the
determinative factor ... The needs of a workman are likely to be greater between the age of 50 to 60 years, as during that period, he
has to educate his children, marry his daughters, in addition to maintaining his family. If one looks at the world trend, it is obvious
that the age of superannuation is gradually being pushed up ...79

In Bharat Petroleum, the court, by a majority, reiterated the same principle while fixing the retirement age of clerical staff
in its refinery division situated in Bombay at 60. Apart from noticing the factors in favour of raising the retiral age to 60
years, the court clearly noticed the countervailing factors as well. One of such factors is the effect on the employment of
the younger generation. The court posed the question: Can the nation afford to have an army of unemployed young men,
necessarily leading to bitterness and frustration? Can the nation afford to allow them to fritter away their energies in
unhealthy pursuits, to which they may be tempted? Then, the court observed that these questions require deep
investigation, research and study, which could not be undertaken in the absence of the relevant evidence on these points.80
In Tejinder Singh, the management staff of BPCL moved the Supreme Court under Art. 32 challenging the fixation of their
retirement age at 58 years as against 60 years for clerical staff. Repelling the contention, it was held that the clerical staff
and the officers of the management staff belonged to separate classifications; that the classification made on the basis of
reasonable differential was not reviewable; that, while exercising writ jurisdiction, it did not have the adjudicatory
jurisdiction. The court finally held that the differential age of superannuation fixed for workmen and officers did not
amount to discrimination.81

(v) Superannuation under the Standing Orders

In Guest Keen Williams (supra), one of the issues was: if the system of forced retirement of workmen at the age of 55 as
introduced by the management in May 1954 is justified? The company was an ongoing company and the draft standing
orders were certified in December 1953 in terms of which the retirement age was fixed at 55 years. In terms of the said
standing order, the company retired some 47 workers in May 1954. The labour court upheld the action of the management,
which was reversed by the LAT. The Supreme Court observed that the tribunal had to consider not only the propriety,
reasonableness and fairness of the rule, but it had also to deal with the question as to whether the said rule could and
should be made applicable to the employees, who had already been employed without any limit as to the age of retirement.
Hence, the court, while affirming the age of superannuation as fixed at 55 years, for the future entrants, itself fixed a
superannuation age of 60 years for the employees who had joined service before the relevant Standing Orders came into
force.

In Kettlewell Bullen, the court reiterated that the age of superannuation, as fixed by the rules framed by the company,
would have no application to its employees who had joined service prior to the promulgation of the rules.82 The age of
superannuation fixed by the Standing Orders or rules if accepted or acquiesced in by the previously employed workmen,
would be perfectly valid.83 In Salem-Erode, the court observed that the matters covered by the certified Standing Orders,
including the age of superannuation, would be uniform and would apply to all the workmen who were employed in an
industrial establishment.84 However, in Agra Electric Supply, Shelat J candidly said that the view in Guest Keen, Williams,
that the certified Standing Orders would not bind the workman previously employed, ‘was not a correct view of law, as
clarified in Salem-Erode, removing any possible misapprehension’. He further observed that the Act was meant for making
the Standing Orders binding not only on those who were employed subsequent to their certification, but also on those who
were already in employment, and if any other result were to follow, there would be different conditions of employment for
different classes of workmen, which would render the conditions of their service as indefinite and diversified, just as

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before the Act.85 Accordingly, in Dunlop, the court held that the workman concerned, who had entered the service of the
company before the Standing Orders of the company were framed and certified, will be bound by the Standing Orders.86 In
UP Electric Supply, the court reiterated that the view in Guest Keen Williams was no longer good law. Grover J said that it
was not the intention of the Legislature, that different sets of conditions should apply to the employees, depending on
whether a workman was employed before the Standing Orders were certified or after, which would defeat the very object
of the legislation and ‘in the very nature of thing, a great deal of irritation and annoyance between the employees inter se,
could result, if any such discrimination is made in any of the items of the schedule.87 The principles laid down in these
cases were again followed in Avery (India).88

In British Paints, the age of superannuation was fixed by the industrial tribunal. Prior to that, there was no retirement age
in the company and the workmen were entitled to work as long as they were physically and mentally fit. In appeal, dealing
with the question as to whether the retirement of future workmen should also be fixed at the same level as of that existing
workmen, the Supreme Court observed that, generally speaking, there should be no difference in the age of retirement for
the existing workmen and that for the others, to be employed in the future, unless there are special circumstances justifying
such difference and in the absence of any valid and cogent reasons for having different ages of retirement for the existing
and future workmen, it was held that the future workmen should also have the benefit of the same superannuation
age.89Neither the schedule to the Industrial Employment (Standing Orders) Act 1946, nor the model Standing Orders,
contain any provision regarding superannuation or retirement on attaining a certain age. The question as to whether, in the
absence of any provision in the schedule or the model Standing Orders, relating to superannuation, the certifying officer
could certify a provision relating to superannuation, in the Standing Orders of an industrial establishment, has given rise to
a divergence of judicial opinions. A single judge of the Madras High Court, in The Hindu, took the view that the
expression, ‘termination of employment’, in item No 8 of the schedule, is wide enough to include retirement of any
employee at the age of superannuation. In support of this, reliance was placed on para 16 of the model Standing Orders,
which stated that, ‘every permanent workman shall be entitled to a service certificate at the time of his dismissal, discharge
or retirement from service’.90

On the other hand, in Saroj Kumar Ghosh, the Orissa High Court held that, in the absence of a provision relating to the age
of superannuation in the schedule to the Act or in the model Standing Orders, the certifying officer could not validly
certify a Standing Order relating to superannuation under s 4 of the Act. The court observed that the expression
‘termination of employment’, in item No 8 of the schedule, cannot be equated with the word ‘superannuation’, because
‘superannuation’ is an event which comes more or less, by an automatic process, as on reaching the fixed age, the holder of
the office has no option but to go out of the office and there is no volition involved in that act. It was further observed that
the employer and the employee have notice of the matter long before the event is to occur and the event is such that it
cannot be arrested by either one of them, if the rule is to be followed, while a termination of employment, on the other
hand, is a positive act by which one party, even against the desire of the other, can bring the employment to an end.91 The
question came for consideration before the Supreme Court in UP Electric Supply Co (supra), the court observed that after
the insertion of the item in the schedule, which made a provision for the age of retirement and superannuation, the
certifying officer had validly certified the clause relating to retirement and superannuation, and fixed the retirement age at
58. Consequently, the workmen concerned, though they could not have been retired on the ground of superannuation in
1959, could be validly retired on or after April 1961, in accordance with the modified Standing Orders. Therefore, those
out of the workmen, who had attained the age of 58 years in April 1961, were regarded as having been validly retired,
having reached the age of superannuation on that date, under the clause.

In SP Dubey, the age of superannuation of the employees, in the service of the Central Provinces Transport Services Ltd,
was 60 years. The company was taken over by the state Government by a notification, stating that the service conditions of
the employees would not be adversely affected. But, after the take-over of the company, the corporation framed certain
regulations and by regulation 59, it purported to fix the retirement age of all the employees, including those who were
employed in the former company, at 58. In accordance with this regulation, the corporation sought to retire the appellant
on completion of the age of 58. But in view of the assurance given to the employees of the company, that their conditions
of service would not be adversely affected, which was incorporated in the directions issued by the Government under s 34
of the Road Transport Corporations Act 1950, the Supreme Court held that the corporation could not frame regulations
which were contrary to the directions issued by the state Government. Therefore, regulation 59, framed by the corporation,
was not applicable to the appellant and he was entitled to continue in service upto the age of 60 years.92

(vi) Proof of Age:

When the age of retirement and superannuation are fixed by the Standing Orders, rules of the establishment or by industrial
adjudication, it is incumbent on the workman to furnish adequate proof of his age, as it is a matter within his knowledge.
But the employer has the right to rebut this proof. In IGN Rly, a workman had subscribed to an agreement containing a
declaration about the day and date of his birth, for the purpose of provident fund accounts. The employer treated such date

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as conclusive and on the strength of the same, retired the workman. Before the industrial tribunal, the workman neither
pleaded that the day and date of birth declared by him was the result of some inadvertence or mistake, nor did he go into
the witness box to explain the admission made by him in the declaration. The correctness of the exact age was also not
properly proved before the tribunal, from an examination of the school register produced on behalf of the workman. But,
completely ignoring these aspects of the matter, the tribunal accepted the contention of the workman and held that such
date and day must have been given by the workman from memory only and ordered his reinstatement. The award of the
tribunal was set aside by the Supreme Court.93

In UP State Sugar Corpn, the relevant Standing Order provided that the ‘entry of the date of birth, in records pertaining to
the provident fund scheme, was presumed to be correct’. The Allahabad High Court held that the authority concerned,
called upon to adjudicate upon the age of the workman, would have jurisdiction to consider the date of birth on any other
relevant material or materials.94 If a person is retired on a wrong date, he would be entitled to reinstatement and to all the
service benefits which were wrongfully denied to him and the adjudicator may even award interest on such benefits.95 In
Punjab and Sind Bank, the Delhi High Court held that the date of birth entered in a cut list, was valid evidence and the
mere fact that the surname of the employee was not mentioned in the matriculation certificate produced by him, was no
ground to doubt his identity.96 In Ahmed Hussain, the date of birth of the employee was shown as being in the year 1929,
in the record. Giving a benefit of doubt to the weaker side, a single judge of the Allahabad High Court presumed that the
last day of the year, ie, 31 December 1929, could be taken as the date of birth of the employee, because even if he is
continued for sometime more, no harm would be caused. The court accepted the certificate issued under the signature of
the deputy inspector of schools, as the correct date of birth.97 Normally, when an industrial award increases the age of
retirement, the benefit of such increase takes effect prospectively, from the date when the award becomes operative.
Hence, in a case where certain workmen had already retired and had received all their retirement benefits, before the date
on which the award became operative, they were not held to be entitled to the benefit of the increase in the age of
retirement.1

48 National Assn of Local Govt Office v Bolton Corpn [1943] AC 166, 185 (HL), per Lord Porter.
49 Western India Automobile Assn v IT (1949) LLJ 245, 248 (FC), per Mahajan J.
50 NK Sen v Labour Appellate Tribunal (1953) 1 LLJ 6, 7 (Bom) (DB), per Chagla CJ.
51 Indian Oil Corpn Ltd PO, IT (1999) 2 LLJ 904 (Gau) (DB)), per Biswas J.
52 Rajaji Nagar Co-op Bank Ltd v PO, Labour Court (2001) 4 LLN 1214 (Kant) (DB), per Bhoruka CJ.
53 Cooperative Central Bank Ltd v Addl Industrial Tribunal AIR 1970 SC 245 [LNIND 1969 SC 152]: (1969) 2 LLJ 698 [LNIND
1969 SC 152] : (1969) 2 SCC 43 [LNIND 1969 SC 152].
54 Workmen of Dimakuchi Tea Estate v Dimakuchi Tea Estate (1958) 1 LLJ 500 [LNIND 1958 SC 1], 510 (SC), per SK Das J.
55 George Hudson Ltd v Australian Timber Workers Union 32 CLR 413, 441, per Isaac J.
56 Central Provinces Transport Services Ltd v Raghunath Gopal Patwardhan (1957) 1 LLJ 27 [LNIND 1956 SC 91] (SC), per
Venkatarama Ayyar J.
57 DN Banerji v PR Mukherjee (1953) 1 LLJ 195 [LNIND 1952 SC 85], 199, per Chandrasekhara Aiyar J.
58 Bombay Union of Journalists v ‘Hindu’ (1961) 2 LLJ 436, 439 (SC), per Shah J.
59 Western India Match Co Ltd v Western India Match Co Workers’ Union (1970) 2 LLJ 256 [LNIND 1970 SC 4], 261 (SC), per
Shelat J.
60 Y Mohanakumaran Nair v Hindustan Latex Ltd 1987 Lab IC 950,952 (Ker), per KT Thomas J.
61 Statford v Lindley (1965) AC 269, 326, 330, 341-42; Conway v Wade (1909) AC 506, 517.
62 Beetham v Trinidad Cement Ltd (1921) 1 All ER 274 (PC), per Lord Denning.
63 R v National Arbitration, ex p, Keable Press Ltd (1943) 2 All ER 633 -34,636 (CA).
64 White v Riley (1921) 1 Ch D 1.
65 JT Stratford & Son Ltd v Lindley (1964) 3 All ER 102 (HL).
66 Jumbunna Coal Mines v Victorian Coal Miners’ Assn 6 CLR 209, 375, per Isaac J.

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67 Newspapers Ltd v State Industrial Tribunal (1957) 2 LLJ 1 [LNIND 1957 SC 28] (SC) : AIR 1957 SC 532 [LNIND 1957 SC 28],
per Kapoor J.
68 Workmen of Dimakuchi Tea Estate v Mgmt of Dimakuchi Tea Estate (1958) 1 LLJ 500 [LNIND 1958 SC 1]-01 (SC) : AIR 1958
SC 353 [LNIND 1958 SC 1], per SK Das J.
69 Workmen v Dharam Pal Prem Chand (1965) 1 LLJ 668 [LNIND 1965 SC 83], 670 (SC) : AIR 1966 SC 182 [LNIND 1965 SC
83], per Gajendragadkar CJI.
70 Workmen of Indian Express Newspaper Pvt Ltd v Management (1970) 2 LLJ 132 (SC) : AIR 1970 SC 737 [LNIND 1968 SC 355]:
(1969) 1 SCC 228, per Shelat J.
71 Western India Match Co v WIMCO Workers’ Union (1970) 2 LLJ 256 [LNIND 1970 SC 4], 260-61 (SC) : AIR 1970 SC 1205
[LNIND 1970 SC 4]: (1970) 1 SCC 225 [LNIND 1970 SC 4], per Shelat J.
72 Branch Manager, Lipton India Ltd v State of Maharashtra 1992 Lab IC 1090 (Bom), per AS Desai J.
73 Hari Fertilizers v State of Uttar Pradesh 1992 Lab IC 1877, 1880 (All), per Katju J.
74 Praga Tools Ltd v Govt of Andhra Pradesh 1976 Lab IC 190, 192 (AP), per V Shastri J.
75 Swapan Das Gupta v First LC 1976 Lab IC 202, 206 (Cal), per Sabyasachi Mukharji J.
76 Southern India Tannery v IT (1969) 2 LLJ 157 (Mad), per Ramakrishnan J.
77 Indian Oxygen Ltd v Workmen 1979 Lab IC 585 [LNIND 1979 SC 4], 588-89 (SC), per Singhal J.
78 Bombay Union of Journalists v ‘Hindu’ (1961) 2 LLJ 436, 439 (SC), per Shah J.
79 Working Journalists of the ‘Hindu’ v ‘Hindu’ (1961) 1 LLJ 288, 294 (Mad) (DB), per Veeraswami J.
80 Gondhara Transport Co Pvt Ltd v State of Punjab AIR 1966 Punj 354, 362, per Narula J.
81 Associated Cement Companies Ltd v Workmen (1960) 1 LLJ 491 [LNIND 1960 SC 60], 496 (SC), per Gajendragadkar J.
82 Indian Cable Co Ltd v Workmen (1962) 1 LLJ 409 [LNIND 1962 SC 100], 415 (SC) : (1962) Supp (3) SCR 589, per Venkatarama
Ayyar J.
83 Nellai Cotton Mills v LC (1965) 1 LLJ 95 (Mad), per Ramakrishnan J.
84 Wingswear Pvt Ltd v Workmen 1988 Lab IC (NOC) 50 (Del), per Balui J.
85 Bombay Union of Journalists v ‘Hindu’ (1961) 2 LLJ 436 [LNIND 1961 SC 316], 443 (SC) : AIR 1963 SC 318 [LNIND 1961 SC
316], per Shah J.
86 Workmen of Dharampal Premchand v Dharampal Premchand (1965) 1 LLJ 668 [LNIND 1965 SC 83], 672-3 (SC) : AIR 1965 SC
182, per Gajendragadkar CJI.
87 Nellai Cotton Mills v LC (1965) 1 LLJ 95 (Mad), per Ramakrishnan J.
88 Tirupathi Cotton Mills Ltd v LC (1968) 2 LLJ 723, 727 (AP), per Kumarayya J.
89 P Somasundaram v LC (1970) 1 LLJ 558 (AP), per Chinnappa Reddy J.
90 Eastern Coalfields Ltd v Niranjan Chatterjee (2008) 3 LLJ 438 (Cal).
91 JH Jadhav v Forbes Gokak Ltd AIR 2005 SC 998 [LNIND 2005 SC 133]: (2005) 3 SCC 202 [LNIND 2005 SC 133] : (2005) 1
LLJ (1089), per Ms Ruma Pal J.
92 Workmen of Dharampal Premchand v Dharampal Premchand AIR 1966 SC 182 [LNIND 1965 SC 83]: (1965) 1 LLJ 668
[LNIND 1965 SC 83] (SC), per Gajendragadkar CJI.
93 Central Provinces Transport Services Ltd v RG Patwardhan AIR 1957 SC 104 [LNIND 1956 SC 91]: (1957) I LLJ 27, per
Venkatarama Ayyar J.
94 Brooke Bond (India) (Private) Ltd v Workmen (1963) I LLJ 256(SC), per Gajendragadkar J.
95 LH Sugar Factories & Oil Mills Ltd v State of Uttar Pradesh (1961) I LLJ 686 (All) : AIR 1962 All 70 [LNIND 1961 ALL 21],
per SS Dhavan J.
1 Newspaper Ltd v State IT (1960) 2 LLJ 37, 38 (SC), per Gajendragadkar J.
2 Tata Chemicals Ltd v Workmen 1978 Lab IC 637 [LNIND 1978 SC 113],642 (SC) per Jaswant Singh J.
3 Pradip Lamp Works v Workmen (1970) 1 LLJ 507 [LNIND 1969 SC 299] (SC), per Shelat J.
4 National Asphalt Products & Construction Co v NM Kothari 1977 Lab IC 1300, 1302 (Bom) (DB), per Sawant J.
5 Imperial Electric Trading Co v IT 1969 Lab IC 531 (All), per Gulati J.
6 Air France v Miss Kotval (1970) 2 LLJ 68 (Cal) (DB) : 74 CWN 304 : (1971) ILR (1) Cal 295, per D Basu J.

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7 Reckitt & Coleman of India Ltd v Fifth IT 1980 Lab IC 92, 94-95 (Cal) (DB), per M Dutt J.
8 Mgmt of Gammon (India) Ltd v State of Orissa (1974) 2 LLJ 34 -36 (Ori) (DB), per RN Misra J.
9 Ram Lal Guramal Textile Mills v State of Punjab (1958) 2 LLJ 245 (Punj), per Bishan Narain J.
10 Express Newspapers Pvt Ltd v First Labour Court (1959) 1 LLJ 600 [LNIND 1958 CAL 239], 603 (Cal) : AIR 1959 Cal 265
[LNIND 1958 CAL 239]: 64 CWN 37, per Sinha J.
11 Paarthy Ratnam & Co v Industrial Tribunal (1958) 2 LLJ 290 (AP) : (1958) 2 Anwr 421 : 1958 ALT 776, per Satyanarayana Raju
J.
12 Shamsuddin v State of Kerala (1961) 1 LLJ 77 (Ker) (DB), per Ansari CJ.
13 Khadi Gram Udyog Bharan Workers Union v E Krishnamurthy (1966) 2 LLJ 261 (Punj) : AIR 1966 P&H 173, per SK Kapur J.
14 Muller and Phipps (India) (P) Ltd v Employees (1967) 2 LLJ 222 (Punj) : (1966) 1 LR (2) P& H 918, per SB Kapoor J.
15 Workmen of Jamadoba Colliery v Jamadoba Colliery (1967) 2 LLJ 663 (Pat) (DB), per Narasimham CJ.
16 Bombay Union of Journalists v The Hindu (1961) 2 LLJ 436 [LNIND 1961 SC 316], 442-43 (SC) : AIR 1963 SC 318 [LNIND
1961 SC 316], per Shah J.
17 Indian Cable Co Ltd v Workmen (1962) 1 LLJ 409 [LNIND 1962 SC 100], 415 (SC), per Venkatarama Ayyar J.
18 Western India Match Co Ltd v WIMCO Workers’ Union (1970) 2 LLJ 256 [LNIND 1970 SC 4] (SC), per Shelat J.
19 Working Journalists of the ‘Hindu’ v ‘Hindu’ (1961) 1 LLJ 288 [LNIND 1960 MAD 138], 296 (Mad) (DB) : AIR 1961 Mad 370
[LNIND 1960 MAD 138]: (1961) 1 MLJ 260 [LNIND 1960 MAD 138], per Veeraswami J.
20 Working Journalists of ‘Hindu’ v ‘Hindu’ (1961) 1 LLJ 288 [LNIND 1960 MAD 138], 296 (Mad) (DB) : AIR 1961 Mad 370
[LNIND 1960 MAD 138]: (1961) 1 MLJ 260 [LNIND 1960 MAD 138], per Veeraswami J.
21 Workmen of Dalmia Cement (Bharat) Ltd v State of Madras (1969) 1 LLJ 499 (Mad), per Kailasam J.
22 Eastern Manganese and Mineral Ltd v Industrial Tribunal (1968) 2 LLJ 817 (Pat) (DB) : (1968) 1 PLJR 416, per BN Jha J.
23 Ram Prasad Vishwakarama v IT (1961) 1 LLJ 504 [LNIND 1960 SC 333], 507 (SC), per Das Gupta J.
24 Sri Ram Vilas Service Ltd v State of Madras (1956) 1 LLJ 498, 507 (Mad), per Rajagopalan J.
25 Sri Kripa Printing Press v LC (1960) 1 LLJ 53 -54 (AP), per Bhimsankaram J.
26 PMM Mudaliar, Rathina Mudaliar & Sons v Raju Mudaliar (1965) 1 LLJ 489, 496 (Mys) (DB), per Hegde J.
27 Lipton Ltd v Workmen (1956) I LLJ 319(LAT).
28 Hindustan Times Ltd v Chief Commr Delhi (1957) 2 LLJ 466, 470 (Punj), per Falshaw J.
29 Reckitt & Colman of India Ltd v Fifth IT 1980 Lab IC 92, 95 (DB), per MM Dutt J.
30 Uttar Pradesh State Electricity Board, Lucknow v LC 1984 Lab IC (NOC) 120 (All), per Dhaon J.
31 Newspapers Ltd v State Industrial Tribunal (1957) 2 LLJ 1 [LNIND 1957 SC 28], 8 (SC) : AIR 1957 SC 532 [LNIND 1957 SC
28], per Kapur J.
32 Bombay Union of Journalists v The Hindu (1961) 2 LLJ 436 [LNIND 1961 SC 316], 439 (SC), per Shah J.
33 Workmen of Rohtak Genl Transport Co v Mgmt (1962) 1 LLJ 634 [LNIND 1962 SC 90], 636 (SC) : AIR 1963 SC 318 [LNIND
1961 SC 316], per Gajendragadkar J.
34 Hindustan Lever Ltd v Workmen AIR 1974 SC 769 [LNIND 1973 SC 307]: 1974 Lab IC 465 : (1974) 3 SCC 514 [LNIND 1973
SC 307], per Dwivedi J.
35 Deepak Industries Ltd v State of WB 1975 Lab IC 1153, 1157 (Cal) (DB), per SK Roy Chowdhury J.
36 State Banks Staff Union v SBI (1991) 1 LLJ 163 [LNIND 1990 MAD 579] (Mad) (DB), per Nainar Sundaram J.
37 Bihar Working Journalists’ Union v HK Chaudhuri 1968 Lab IC 515, 518 (Pat) (DB), per GN Prasad J.
38 Indian Iron and Steel Co Ltd v Tarak Nath Sen Gupta (1999) 2 LLJ 291 [LNIND 1999 CAL 98] (Cal) (DB), per Sinha J.
39 Chinataman Rao v State of Madhya Pradesh (1958) 2 LLJ 252 [LNIND 1958 SC 11], 256 (SC) : AIR 1958 SC 388 [LNIND 1958
SC 11], per Subba Rao J.
40 Western India Automobile Assn v Industrial Tribunal (1949) LLJ 245, 249 (FC), per Mahajan J.
41 Sukhnandan Thakur v State of Bihar AIR 1957 Pat 617 (DB), per Ramaswamy J.
42 Government of India (1940), ‘Report of the BTLEC’, cited in the Report of the LIC, 1946, p 115.
43 Clerk, In Pursuit of Fair Justice, (1995) 11.

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44 State of Karnataka v Uma Devi (2006) 4 SCC 1 : AIR 2006 SC 1806 : (2006) 2 LLJ 722, per Balasubramanian J.
45 Delhi Municipal Workers Union v Municipal Corpn of Delhi (1999) 3 LLN 609 (Del), per Joseph J.
46 Kays Construction Co (P) Ltd v Workmen (1958) 2 LLJ 660 [LNIND 1958 SC 124] (SC) : AIR 1959 SC 208 [LNIND 1958 SC
124], per Gajendragadkar J.
47 Delhi Development Authority v Sudesh Kumar (2009) 2 LLJ 641 (Del) : (2009) 2 LJ 641 : (2009) 121 FLR 366, per Khanna J.
48 Municipal Employees’ Union v Secretary (Labour), GNCTD (2003) 4 LLJ 1038 (Del) : (2003) 106 DLT 47 [LNIND 2003 DEL
378], per Mudgal J.
49 Indian Drugs and Pharmaceuticals Ltd v Devki Devi AIR 2006 SC 2691 [LNIND 2006 SC 470]: (2006) 5 SCC 523 [LNIND 2006
SC 470] : (2006) 3 LLJ 783 [LNIND 2006 SC 470], per Pasayat J.
50 Sukhnandan Thakur v State of Bihar AIR 1957 Pat 617 (DB).
51 Shankar Balaji Waje v State of Maharashtra (1962) 1 LLJ 119 [LNIND 1961 SC 342] (SC), per Raghubar Dayal J.
52 Dhrangadhara Chemical Works Ltd v State of Saurashtra (1957) 1 LLJ 447 (SC), per Bhagwati J.
53 S Palani Chamy v National Textile Corpn (TN&P) Ltd 1993 Lab IC 1101, 1105, per Srinivasan J.
54 Naihati Electric Supply Co v State of WB (1974) 2 LLJ 179, 181 (Cal), per Debiprasad Pal J.
55 Crompton Engineering (M) Pvt Ltd v Addl Labour Court (1975) 1 LLJ 207 [LNIND 1974 MAD 180], 209 (Mad), per Ismail J.
56 Indian Paper Pulp Co Ltd v Indian Paper Pulp Workers Union 1949 LLJ 258 (FC), per Kania CJI.
57 Cownpore Tannery Ltd v S Guha (1961) 2 LLJ 110 [LNIND 1960 SC 266] (SC), per Gajendragadkar J.
58 Western India Automobile Assn v IT (1949) LLJ 245, 249 (FC), per Mahajan J.
59 B Kalyanasundaram v LC (1966) 2 LLJ 430 [LNIND 1965 MAD 89],432 (Mad), per Srinivasan J.
60 Standard Vaccum Refining Co v Workmen (1960) 2 LLJ 233 [LNIND 1960 SC 109] (SC), per Wanchoo J.
61 Muzaffarpur Electric Supply Workers Union v Muzaffarpur Electric Supply Co Ltd (1957) 2 LLJ 542 (LAT).
62 Workers of Sagar Talkies v Odeon Cinema (1957) 1 LLJ 639 (Mad) (DB), per Rajamannar CJ.
63 Ryan v Cooke & Quinn (1930) IR 512.
64 Sheriff v Mcmulten (1952) IR 236.
65 Bird v O’Neal (1960) 3 All ER 254.
66 Beetham v Trinidad Cement Ltd (1960) 1 All ER 274, per Lord Denning.
67 Stanford v Lindley (1965) AC 269, 334 (HL).
68 Torquay Hotel Co Ltd v Cousins (1969) 1 All ER 522, 528 (CA), per Lord Denning, MR.
69 TCC Thozhilali Union v TCC Ltd (1982) 1 LLJ 425, 427-29 (Ker), per Vedakkel J.
70 O Kahn-Freund, The System of Industrial Relations in Great Britain, 1954, p 54.
71 Mansfield Cooper and John C Wood, Outlines of industrial Law, 1962, 4th ed, p 18.
72 Francis Raleigh Batt, The Law of Master and Servant, 1967, 5th ed, p 52.
73 Ludwig Teller, Labour Disputes and Collective Bargaining, 1940, Vol 1, p 536.
74 Gayler, Industrial Law, 1955, p 20.
75 Rideout, Current Legal Problems, 1967, p 127.
76 Agra Electric Supply Co Ltd v Alladin (1969) 2 LLJ 540 [LNIND 1969 SC 261], 544 (SC), per Shelat J.
77 Glaxo Laboratories (I) Ltd v PO, LC 1983 Lab IC 1909, 1914 (SC), per Desai J.
78 Salem-Erode Electricity Distribution Co Pvt Ltd v Workmen (1966) 1 LLJ 443 [LNIND 1965 SC 293], 446 (SC), per
Gajendragadkar CJI.
79 Glaxo Laboratories (1) Ltd v PO, LC 1983 Lab IC 1909, 1914 (SC), per Desai J.
80 Shahdara Saharanpur Light Rly Co Ltd v Shahdara-Saharanpur Rly Workers’ Union (1969) 1 LL J734 (SC), per Shelat J.
81 Rohtak & Hissar District Electric Supply Co v State of UP (1966) 2 LLJ 330 [LNIND 1965 SC 350], 334-35 (SC), per
Gajendragadkar CJI.
82 Shahdara Saharanpur Light Rly Co Ltd v Shahdara-Saharanpur Rly Workers’ Union (1969) 1 LLJ 734 [LNIND 1968 SC 281],
(SC), per Shelat J.

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83 Bangalore Woollen, Cotton and Silk Co Ltd v Workmen (1968) 1 LLJ 555 [LNIND 1967 SC 274] (SC), per Vaidialingam J.
84 Bagalkot Cement Co Ltd v RK Patha, AIR 1963 SC 439 [LNIND 1962 SC 22]: (1962) 2 LLJ 203 : 1962 Supp (2) SCR 697, per
Gajendragadkar J.
85 Buckingham and Carnatic Co Ltd v Venkataiah AIR 1964 SC 1272 [LNIND 1963 SC 177]: (1963) 2 LLJ 638 [LNIND 1963 SC
177] : [1964] 4 SCR 265 [LNIND 1963 SC 177], per Gajendragadkar J.
86 Workmen of Dewan Tea Estate v Mgmt AIR 1964 SC 1458 [LNIND 1963 SC 264]: (1964) 1 LLJ 358 [LNIND 1963 SC 264] :
[1964] 5 SCR 548 [LNIND 1963 SC 264], per Gajendragadkar J.
87 Workmen of Buckingham & Carnatic Mills v Mgmt (1972) I LLJ 26(SC), per Vadialingam J.
88 DK Yadav v JMA Industries Ltd 1993 AIR SCW 1995, per Ramasway J.
89 Sukhdev Singh v Bhagat Ram AIR 1975 SC 1331 [LNIND 1975 SC 79]: 1975 Lab IC 881 : (1975) 1 SCC 421 [LNIND 1975 SC
79], per Ray CJI.
90 Rajasthan SRTC v Krishna Kant AIR 1995 SC 1715 [LNIND 1995 SC 618]: (1995) 5 SCC 75 [LNIND 1995 SC 618] : (1995) 2
LLJ 728 [LNIND 1995 SC 618], per Jeevan Reddy J.
91 EM Rao, Industrial Jurisprudence: A Critical Commentary, 2015, 2nd ed, pp 103-5.
92 Premier Automobiles Ltd v KS Wadke (1975) 2 LLJ 445 [LNIND 1975 SC 299] (SC) : AIR 1975 SC 2238 [LNIND 1975 SC 299]:
(1976) 1 SCC 496 [LNIND 1975 SC 299], per Untwalia J.
93 SP Srivastava v Banaras Electric Light and Power Co Ltd (1968) 2 LLJ 483 [LNIND 1968 ALL 12] (All) (FB), per Beg J.
94 Glaxo Laboratories (I) Ltd v PO, LC 1983 Lab IC 1909, 1914 (SC), per Desai J.
95 Workmen of Hindustan Steel Ltd v Hindustan Steel Ltd 1985 Lab IC 534 (SC), per Desai J.
1 Union of India v Tulsiram Patel (1985) 2 LLJ 206 [LNIND 1985 SC 219], 236-37 : AIR 1985 SC 1416 [LNIND 1985 SC 219]:
(1985) 3 SCC 398 [LNIND 1985 SC 219], per DP Madon J.
2 Hari Pada Khan v Union of India (1996) 1 LLJ 1044 -45 (SC) : AIR 1996 SC 1065 [LNIND 1995 SC 1234]: (1996) 1 SCC 536
[LNIND 1995 SC 1234].
3 Grayes v Cohen (1929 J 46 TLR 121.
4 Morgan v Manswer (1948) 1 KB 148 , 191, per Streatfield J.
5 JK Cotton Spg & Wvg Mills Co Ltd v State of UP 1990 Lab IC 1511, 1515 (SC), per Ahmadi J.
6 Central Inland WTC Ltd v Brojo Nath Ganguly 1986 Lab IC 1312, 1360-61 (SC), per Madon J.
7 Savabhai Kanjibhai v DM Vin (1964) 2 LLJ 201 (Guj), per Shah J.
8 JK Cotton Spg & Wvg Mills Co Ltd v State of Uttar Pradesh 1990 Lab IC 1511, 1515 (SC), per Ahmadi J.
9 Raj Kumar v Union of India (1970) 1 LLJ 13, 15 (SC), per Shah J.
10 Chotelal v State of Uttar Pradesh (1956) 1 LLJ 543 [LNIND 1955 ALL 221] (All), per Mehrotra J.
11 Cochin Port Shipping Clearing Staff Assn v Harrisons & Crossfield Ltd 1962 Lab IC 902 (Ker), per MP Menon J.
12 K Sudha Nagarj v CM, Andhra Bank 1996 Lab IC 1228, 1231 (AP), per Bikshapathy J.
13 Jai Ram v Union of India AIR 1954 SC 584 [LNIND 1954 SC 293].
14 Union of India v Gopal Chandra Misra 1978 Lab IC 660 (SC), per Fazal Ali J.
15 K Sudha Nagaraj v CM, Andhra Bank 1996 Lab IC 1228, 1231 (AP), per Bikshapathy J.
16 JK Cotton Spg & Wvg Mills Co Ltd v State of UP 1990 Lab IC 1511, 1517 (SC), per Ahmadi J.
17 Union of India v Gopal Chandra Misra 1978 Lab IC 660, 670 (SC), per Sarkaria J.
18 Anil Kumar v Food Corpn of India 1988 Lab IC 1121, 1123 (P&H) (DB).
19 JN Srivastava v Union of India (1998) 9 SCC 559 [LNIND 1997 SC 1243] : AIR 1999 SC 1571 [LNIND 1997 SC 1243].
20 Nand Keshwar Prasad v IFFCO Ltd (1999) 1 LLN 618 (SC) : AIR 1999 SC 558 : (1998) 5 SCC 461.
21 Shambu Murari Sinha v PDI (2000) 3 LLN 513 (SC) : AIR 2000 SC 2473 [LNIND 2000 SC 658]: (2000) 4 SCC 621.
22 State of Haryana v SK Singhal (1999) 2 LLN 660 (SC) : AIR 1999 SC 1829 [LNIND 1999 SC 430]: (1999) 4 SCC 293 [LNIND
1999 SC 430].
23 Mgmt of KSRTC v MB Ramakrishna (2001) 3 LLN 608 (Kant) (DB), per Mohan Kumar J.
24 Ramesh Kumar v State of Uttar Pradesh (2002) 2 LLN 38 (All), per Pradeep Kant J.

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25 T Ravindran v PO, LC (2002) 2 LLN 313 (Mad), per Rajan J.

26 Haryana SCD Federation Ltd v Rajbir Singh (1999) 1 LLJ 975 (P&H) (DB), per Gupta J.
27 Union of India v Gopal Chandra Misra (1978) 1 LLJ 492 [LNIND 1978 SC 54] (SC) : AIR 1978 SC 694 [LNIND 1978 SC 54]:
(1978) 2 SCC 301 [LNIND 1978 SC 54].
28 Balram Gupta v Union of India (1987) 2 LLJ 541 [LNIND 1987 SC 619] (SC) : AIR 1987 SC 2354 [LNIND 1987 SC 622]: 1987
Supp SCC 228.
29 Jayakodi Jacob D v Presiding Officer, Labour Court (1999) 1 LLJ 1025 [LNIND 1998 MAD 765] (Mad) (DB).
30 Coromandal Fertilizers Ltd v P Venugopal (1986) 1 LLJ 417 [LNIND 1985 AP 132], 426 (AP) (DB), per Jeevan Reddy J.
31 Thiruangadam v Indian Institute of Science (1957) 1 LLJ 285 (Mys) (DB), per Vasudevamurthi J.
32 Chotelal v State of Uttar Pradesh (1956) 1 LLJ 543 [LNIND 1955 ALL 221] (All), per Mehrotra J.
33 Chatge & Patil Concerns’ Employees Union v Management (1968) 1 LLJ 566 [LNIND 1967 SC 239] (SC), per Hidayatullah J.
34 JK Cotton Spg & Wvg Mills Co Ltd v State of UP 1990 Lab IC 1511, 1517 (SC), per Ahmadi J.
35 Random House Dictionary.
36 Earl Jowitt, English Law Dictionary, 1959.
37 Black’s Law Dictionary.
38 Buckingham & Carnatic Co Ltd v Venkatayya (1963) 2 LLJ 638 [LNIND 1963 SC 177], 642 (SC), per Gajendragadkar J.
39 GT Lad v Chemicals and Fibres of India 1979 Lab IC 290 [LNIND 1978 SC 582], 292 (SC), per Jaswant Singh J.
40 Sita Ram v LC 1995 Lab IC 2446 -47 (P&H) (DB), per RP Sethi J.
41 Kamlesh Sharma v Union of India 1988 Lab IC 1543 (Del) (DB), per YK Sabharwal J.
42 National Engineering Industries Ltd v Hanuman (1967) 2 LLJ 883 [LNIND 1967 SC 213] (SC), per Wanchoo CJI.
43 Indian Iron and Steel Co Ltd v Workmen (1958) 1 LLJ 260 [LNIND 1957 SC 105], 268 (SC), per SK Das J.
44 Binny Ltd v Workmen 1973 Lab IC 1119 -20, per Grover J.
45 Delhi Cloth & General Mills Ltd v Piara Lal 1976 Lab IC 21, 25 (Del), per Rangarajan J.
46 Bata India Ltd v BH Nathani 1978 Lab IC 386, 388 (Guj) (DB), per Obul Reddi CJ.
47 Dabur (Dr SK Burman) v State of WB 1978 Lab IC 1581, 1587 (Cal) (DB), per Anil K Sen J.
48 Delhi Cloth & Gen Mills Ltd v Shambhu Nath Mukherjee 1977 Lab IC 1695 [LNIND 1977 SC 280] (SC), per Goswami J.
49 Shambhoo Singh v CIT-cum-Labour Court (1981) 2 LLJ 376, 379 (MP) (DB), per GP Singh CJ.
50 Freewheels India Ltd v State of Haryana 1984 Lab IC (NOC) 82 (P&H), per SS Sodhi J.
51 Baba Saheb Devgonda Patil v MD, SPSSK Ltd (1988) 2 LLJ 413 [LNIND 1987 BOM 491] (Bom) (DB) : (1988) 2 Bom CR 235
[LNIND 1987 BOM 491] : (1988) 90 Bom LR 131.
52 Secy, WBB of Secondary Education v NC Bhattacharjee 1991 Lab IC 819, 824 (Cal), per SK Sen J.
53 Management of Spencer & Co Ltd v Addl LC (1980) 2 LLJ 469 -70 (Mad), per Mohan J.
54 Travancore Rayons Ltd v Travancore RE Union (1978) 1 LLJ 84, 87 (Ker), per Eradi J.
55 Hamdani Dawakhana (wakf), Delhi v LC (1985) 1 LLJ 57 (Del), per Sultan Singh J.
56 Express Newspapers Pvt Ltd v Michael Mark (1962) 2 LLJ 220 [LNIND 1962 SC 242], 223 (SC), per Mudholkar J.
57 K Ananthan Pillai v State of Kerala 1968 Lab IC 1059, 1063 (Ker) (FB), per Raman Nayar J.
58 Buckingham & Carnatic Co Ltd v Venkatayya (1963) 2 LLJ 638 [LNIND 1963 SC 177], 642 (SC), per Gajendragadkar J.
59 L Robert D’Souza v Executive Engineer, Southern Rly (1982) 1 LLJ 330 [LNIND 1982 SC 47], 333-34 (SC) : AIR 1982 SC 854
[LNIND 1982 SC 47]: (1982) 1 SCC 645 [LNIND 1982 SC 47], per Desai J.
60 Kshetriya Sri Gandhi Ashram v Ram Samujh Maurya 1990 Lab IC 1406, 1408 (All), per Sharma J.
61 DK Yadav v JMA Industries Ltd (1993) 2 LLJ 696 [LNIND 1993 SC 443] : (1993) 3 SCC 259 [LNIND 1993 SC 443] : (1993) 3
SCALE 39, per K Ramaswamy J.
62 Amgauda Sidram Hakke v Maharashtra SSIDC Ltd 1995 Lab IC 498 : (1995) 2 Bom CR 595 [LNIND 1994 BOM 698] : (1995) 2
LLJ 948 (Bom), per Sri Krishna J.
63 Gouranga Acharjee v Third Industrial Tribunal (2001) 3 LLN 160 (Cal), per Bhattacharya J.

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64 Syndicate Bank v General Secretary, Syndicate Bank Staff Association (2000) 2 LLN 942 (SC) : (2000) 5 SCC 65 [LNIND 2000
SC 715] : (2000) 1 LLJ 1630 [LNIND 2000 SC 715].
65 National Aluminium Co Ltd v DK Panda (2002) 3 LLN 759 (SC) : 2002 LLR 928, per Venkatarama Reddi J.
66 (2001) 4 LLN 628 (P&H), per Sudhalkar J.
67 Mange Ram v National and Grindlays Bank Ltd 1987 Lab IC 1560, 1563 (Del) (DB), per Kapur.
68 Guest, Keen, Williams Pvt Ltd v PJ Sterling (1959) 2 LLJ 405 [LNIND 1959 SC 127], 415 (SC) : AIR 1959 SC 1279 [LNIND
1959 SC 127], per Gagendragadkar J.
69 Imperial Chemical Industries (India) Pvt Ltd v Workmen (1960) 2 LLJ 716 [LNIND 1960 SC 268] (SC) : AIR 1961 SC 1175
[LNIND 1960 SC 268], per Gajendragadkar J.
70 Workmen of Kettlewell Bullen & Co Ltd v Mgmt CA No 845 of 1966 (12-21969) (SC), per Shelat J.
71 British Paints (India) Ltd v Workmen (1966) 1 LLJ 407 [LNIND 1965 SC 296], 409 (SC) : AIR 1966 SC 732 [LNIND 1965 SC
296], per Wanchoo J.
72 Jeewanlal (1929) Ltd v The Workmen (1972) 1 LLJ 472 [LNIND 1972 SC 113] (SC) : AIR 1972 SC 1210 [LNIND 1972 SC 113],
per Mitter J.
73 Dunlop Rubber Co (India) Ltd v Workmen (1959) 2 LLJ 826 [LNIND 1959 SC 186], 828 (SC), per Wanchoo J.
74 GM Talang v Shaw Wallance & Co Ltd (1964) 2 LLJ 664 [LNIND 1964 SC 96] (SC) : AIR 1964 SC 1886 [LNIND 1964 SC 96]:
[1964] 7 SCR 424 [LNIND 1964 SC 96], per Das Gupta J.
75 Workmen of Balmer Lawrie & Co Ltd v Mgmt (1964) 1 LLJ 380 [LNIND 1963 SC 248] (SC) : AIR 1964 SC 728 [LNIND 1963
SC 248]: [1964] 5 SCR 344 [LNIND 1963 SC 248], per Gajendragadkar J.
76 British Paints Pvt Ltd v Workmen (1966) 1 LLJ 407 [LNIND 1965 SC 296], 409-10 (SC) : AIR 1966 SC 732 [LNIND 1965 SC
296]: [1966] 2 SCR 523 [LNIND 1965 SC 296], per Wanchoo J.
77 Bengal Chemical & Pharmaceutical Works Ltd v Workmen (1969) 1 LLJ 751 [LNIND 1968 SC 279] (SC) : AIR 1969 SC 360
[LNIND 1968 SC 279], per Vaidialingarn J.
78 Hindustan Times Ltd v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431], 119 (SC) : AIR 1963 SC 1332 [LNIND 1962 SC 451],
per Das Gupta J.
79 Burmah-Shell OSD Co of India Ltd v Workmen (1970) 1 LLJ 363 (SC), per Hegde J.
80 Workmen of Bharat Petroleum Corpn Ltd v BPCL (1984) 1 LLJ 35 [LNIND 1983 SC 290] (SC) : AIR 1984 SC 356 [LNIND 1983
SC 290]: (1983) 4 SCC 470 [LNIND 1983 SC 290], per Chinnappa Reddy J.
81 Tejinder Singh v Bharat Petroleum Corpn Ltd 1987 Lab IC 19 -20 (SC), per Ranganath Misra J.
82 Workmen of Kettlewell Bullen & Co Ltd v Mgmt (1964) 2 LLJ 146 [LNIND 1964 SC 126], 148 (SC), per Das Gupta J.
83 Workmen of Kankanee Colliery v Employers (1967) 1 LLJ 714 [LNIND 1967 SC 19] (SC), per Bhargava J.
84 Salem-Erode ED Co Pvt Ltd v Workmen (1966) 1 LLJ 443 [LNIND 1965 SC 293] (SC) : AIR 1966 SC 808 [LNIND 1965 SC
293], per Gajendragadkar CJI.
85 Agra Electric Supply Co Ltd v Alladin (1969) 2 LLJ 540 [LNIND 1969 SC 261] (SC) : AIR 1970 SC 512 [LNIND 1969 SC 261]:
(1969) 2 SCC 598 [LNIND 1969 SC 261], per Shelat J.
86 Dunlop India Ltd v Workmen (1972) 2 LLJ 1 [LNIND 1972 SC 151] (SC) : AIR 1972 SC 2326 [LNIND 1972 SC 151]: (1972) 3
SC 616, per Vaidialingam J.
87 UP Electric Supply Co Ltd v Their Workmen (1972) 2 LLJ 9 [LNIND 1972 SC 154], 14 (SC) : (1972) 2 SCC 54 [LNIND 1972 SC
154] : 1972 Lab IC 644 [LNIND 1972 SC 154], per Grover J.
88 Avery (India) Ltd v Second Industrial Tribunal (1972) 2 LLJ 255 [LNIND 1972 SC 303] (SC) : AIR 1972 SC 1626 [LNIND 1972
SC 303]: (1972) 3 SCC 585 [LNIND 1972 SC 303], per Mathew J.
89 British Paints Ltd v Workmen (1966) 1 LLJ 407 [LNIND 1965 SC 296] (SC) : AIR 1966 SC 732 [LNIND 1965 SC 296], per
Wanchoo J.
90 The ‘Hindu’ v The ‘Hindu’ Officers’ & NPE’ Union (1960) 1 LLJ 187 [LNIND 1959 MAD 86] (Mad), per Balakrishna Ayyar J.
91 Saroj Kumar Ghosh v Chairman, Orissa SEB 1970 Lab IC 1000 (Ori) (DB), per RN Misra J.
92 SP Dubey v Madhya Pradesh SRTC 1991 Lab IC 1373 [LNIND 1990 SC 611], 1375 (SC), per Kuldip Singh J.
93 Indian Genl Navigation & Rly Co Ltd v Workmen, (1965) 2 LLJ 437 [LNIND 1964 SC 298] (SC) : (1965) 10 FLR 250, per
Gajendragadkar CJI.
94 UP State Sugar Corpn Ltd. v DCL 1991 Lab IC 750, 754 (All), per Dhaon J.

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95 Kanpur Electric Supply Administration v LC 1988 Lab IC 667 -68 (All), per RS Dhavan J.
96 CMD, Punjab & Sind Bank v JS Dhillon 1991 Lab IC 2457, 2463 (Del) (DB), per MC Jain CJ.
97 Ahmed Hussain v MD, UPSRTC 1991 Lab IC 2078, 2080 (All), per Trivedi J.
1 Associated Power Co Ltd v Workmen (1964) 1 LLJ 743 [LNIND 1963 SC 253], 746 (SC), per Gajendragadkar J.

End of Document

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER I Preliminary

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER I Preliminary

S. 2. Definitions.—

(vii) Continuing in Service after Superannuation:

In Guest Keen Williams, the demand of the workmen, for an option to continue in service, even after the age of
superannuation, was held by the Supreme Court to be wholly unreasonable and entirely inconsistent with the notion of
fixing the age of superannuation itself. Gajendragadkar J observed:

Once the age of superannuation is fixed, it may be open to the employer, for special reasons, to continue in its employment, a
workman who has passed that age; but it is inconceivable that when the age of superannuation is fixed, it should be in the option of
the employee to continue in service thereafter.2

In Hindustan Antibiotics, while raising the age of superannuation, the tribunal gave discretion to the employer, to continue
the employee in service or not, even after the age of superannuation. But the court did not think it proper to give discretion
to the employer, to raise the age of retirement or not, because vesting him with such uncontrolled power might have led to
manipulation or victimisation.3 The effect of Guest Keen Williams and Hindustan Antibiotics is that after the age of
superannuation, neither the employer can have the discretion to retain the employees in service, nor can the employees
have the option to continue in service.

By the Employer

It is to be borne in mind that the service of an employee cannot be terminated either in terms of the contract or as a
measure of punishment, merely because the other employees do not like him to be in the employment. In other words, even
if the other employees boycott an employee, this will not provide a justifiable ground to the employer, to terminate the
service of such an employee. In Atlas Copco, the Bombay High Court observed that if the services of an employee are not
satisfactory, the employer can get rid of him in accordance-with the law. Likewise, if he is guilty of any misconduct, the
employer will be entitled to take the appropriate disciplinary proceedings and dismiss him from service. But the fact that
the other employees or the union do not pull on with him, can be no reason to justify the termination of the service of the
employees.4 Some of the modes of determining the contract of employment by the employer, have been discussed in the
following heads:

(i) Discharge under Contract-Discharge Simpliciter:

The expression discharge simpliciter, as understood in industrial law, is used in contra-distinction to a punitive discharge
or a discharge by way of punishment. In common law, in the absence of any contract to the contrary, subject to certain
exceptions, either of the parties to the contract of employment, is ordinarily, entitled to terminate the contract at any time,
by giving notice to the other. In theory, this principle governs industrial employment as well and the guarantees provided
by various labour laws and the safeguards evolved by industrial adjudication, do not abrogate the right of an industrial
employer to terminate the employment of his workmen. Such safeguards are meant for regulating that power, so that it is
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

not abused.5 The contract of industrial employment, therefore, can also be ordinarily terminated, in accordance with the
terms of the contract of service. In the words of Gajendragadkar J:

If the contract gives the employer, the power to terminate the services of his employee, after a month’s notice or subject to some
other conditions, it would be open to him to take recourse to the said term or condition and terminate the services of the employee.6

A contract may be indefinite as to the time during which it is to endure, and yet stipulate the length of notice to be served.
Such stipulation must be observed and a deviation from its terms will constitute a breach of the contract. Where, however,
there is no stipulation as to notice, the contract is terminable by a reasonable notice.7 It is, however, necessary to note that a
termination of employment, whether of a permanent or of a temporary nature, cannot be effected with retrospective effect.8
Discharge under the contract may be effected for various reasons and under various circumstances, as may be provided for
in the contract of service, Standing Orders, or a statute or rules thereunder, governing such service.

An employer has two distinct and independent powers. One is the power to punish an employee for an act of misconduct,
while the other is the power to terminate simpliciter, the service of an employee in accordance with the contract, without
any adverse consequences. As far as possible, neither should be construed so as to emasculate the other or to render it
ineffective. In other words, a discharge simpliciter is not punitive in character. Conversely, if the termination is punitive in
character, for an act of misconduct, it is not a discharge simpliciter. The termination simpliciter must be for relevant and
valid reasons. This power should not be exercised arbitrarily, capriciously or for any irrelevant or extraneous reasons. The
mere fact that the employer is required to give reasons for terminating the service of an employee, under the contract, does
not necessarily, in every case, make the order of termination punitive in character, ushering in the requirement of holding a
domestic inquiry etc. Otherwise, the power of termination of the service of an employee, under the contract, would be
rendered meaningless and futile, for in no case would it be possible to exercise it. Of course, if a misconduct of the
employee constitutes the foundation for the termination of his service, then, even if the order of termination is purported to
be discharged simpliciter, it may be liable to be regarded as punitive in character.9 The test to find out whether the
impugned termination is innocuous or punitive is to inquire as to whether the vitiating cause was the foundation for the
action or was it merely a motive for action. If it was the foundation for the action, the order is mala fide and punitive; if it
was only a motive for the action, it is not.10 If two factors co-exist, an inference of punishment is reasonable, though not
inevitable. In the words of Krishna Iyer J:

If the severance of service is effected, the first condition is fulfilled and if the foundation or causa causans of s uch severance is the
servant’s misconduct, the second is fulfilled ... If the basis or foundation for the order of termination is dearly not turpitudinous or
stigmatic or rooted in misconduct or visited with evil pecuniary effects, then the inference of dismissal stands negated and vice
versa.11

Where the termination of service puts a stigma on the competence of the employee, the order is by way of punishment. On
the other hand, if the employer proceeds against the employee in a direct way, without casting any aspersion on his honesty
or competence, his discharge would not have the effect of removal by way of punishment.12 The consequence of a
discharge simpliciter is, that though the employee loses his present employment, apart from the protection of his terminal
benefits, his future prospects of employment are not affected.13 In the absence of a lawful order terminating the services of
an employee under the contract, there can be no automatic termination of the services of an employee, unless the procedure
recognised under the law for termination of employment is resorted to and the workman will be entitled to continue in
service.14 Once the service of a workman has been terminated by an order, no second order of termination of service can be
passed, unless the former order of termination is withdrawn by the employer, or that order of termination has been set aside
by an adjudicator and the workman is reinstated.15 Though the right of the employer, to manage his own affairs in the best
way he chooses, has been recognised and it has not been considered proper to trespass on that right or in the field of
management functions, unless compelled by overriding considerations of social justice, this right has been subjected to
control by industrial adjudication, when social justice and industrial peace require such regulation,16 to see whether the
employer has acted bona fide. The right of an employer to discharge an employee is, therefore, no longer absolute and it is
subject to severe restrictions. In cases of wrongful termination of service, purporting to be under the contract, industrial
adjudication is competent to grant relief, on the ground that the exercise of Power was mala fide or colourable. Krishna
Iyer J pointed out:

It is not unknown that an employer resorts to camouflage, by garbing or cloaking a punitive discharge in the innocuous words of a
discharge a simpliciter ... In such situations, courts have to interpose in order to ascertain whether the discharge is simpliciter or a
punitive discharge, and in doing so, the veil of language is lifted and the realities perceived. 17

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In such cases, industrial adjudication can award, by way of relief to the concerned employee, either reinstatement or
compensation.18 ‘All this obviously, is aimed at ensuring that protection and the security of service afforded to the
employee, under the industrial legislation, is not subverted by making a pretence of the discharge being innocent’.19 The
doctrine of absolute freedom of contract, has thus, to yield to the higher claims of social justice; the right to discharge an
employee has, therefore, been controlled, subject to the well-recognised limits, in order to guarantee security of tenure to
industrial employees.20 Industrial adjudication tries to protect the security of service of industrial workman by regulating
the claim of the employer ‘to hire and fire’ an employee, as he pleases.21 In Assam Oil Co, Gajendragadkar J held that
industrial adjudication has, therefore, made the bona fides of the employer, a sine qua non for regulating the exercise of the
power under the contract, if his action in terminating the service of an industrial employee is to be unassailable. The
learned judge observed:

just as the employer’s right to exercise his option in terms of the contract has to be recognised, so also the employee’s right to
exercise his option in terms of the contract has to be recognised; so also the employee’s right to expect security of tenure has to be
taken into account.22

The continuity of service of an industrial employee, cannot be made dependent upon the contingency of the happening of
some stringent conditions of service, stipulated in the contract of service and ‘it is too late in the day to stress absolute
freedom of an employer, to impose any condition which he likes.’ It is, therefore, open to industrial adjudication to
consider the conditions of employment of labour and to vary them if it is found necessary, unless the employer can justify
the extraordinary condition.23Thus, the right of the employer, to terminate the service of an industrial employee under the
contract of employment, has been subjected, by industrial adjudication, to the requirements of job security, social justice
and industrial peace. On the construction of the words ‘for any reason whatsoever’, in the definition of ‘retrenchment’ in s
2(oo) of the Act, some smaller benches of the Supreme Court deviated from the law laid down by a Constitution Bench in
Barsi Light Rly,24 and have held that every termination of service, except the case excepted by the definition of
‘retrenchment’, will fall within the ambit of ‘retrenchment’. The consequence of this holding is that even for terminating
the service of a single employee, under the terms of the contract or the Standing Orders, an employer will have to comply
with the requirements of s 25F or s 25N, and s 25G. The requirements of r 76A and forms PA and PB makes it well-nigh
impossible to terminate the service of an individual workman, either under the contract or in terms of a Standing Order.
For toning down the hardship caused by these dicta, the Legislature stepped in by inserting cl (bb) in the definition of
‘retrenchment’, excluding the termination of the service in the terms of contract from the purview of retrenchment’. But
this statutory provision has been castrated by the ratio of the under noted dicta of the Supreme Court,25holding that a clause
providing for a termination of service by giving notice for a specified period of time, will be void as being arbitrary and as
such, violative of the guarantees of Arts. 14 and 16 of the Constitution and also repugnant of s 23 of the Indian Contract
Act 1872, being opposed to the public policy. Though the termination of service of a workman due to his absence from
duty for a certain number of days, in terms of a Standing Order, on account of his arrest by the police under s 120B, read
with s 489(a) and (b) of the Indian Penal Code, would not amount to retrenchment, such termination will not be justified
because the workman would be absent for circumstances beyond his control and the situation was not of his creation.26
Apart from a termination of the service of an employee in terms of the stipulation provided in the contract, the contract of
employment can also be determined by frustration of the contract or impossibility to perform the contract. In the language
of Lord Radcliffe:

Frustration occurs whenever the law recognizes that without default of either party, a contractual obligation had become incapable
of being performed because the circumstances in which the performance is called for, would render it a thing radically different
from that which was undertaken by the contract.27

Frustration operates automatically. The most usual circumstance that produces a frustration of the contract of employment
is that of illness. Anand Bihari, provides a rich illustration of frustration of contract on account of illness. The facts of the
case were: the services of some bus drivers were terminated by the Rajasthan SRTC, on the ground that they had
developed eye sight below the standard required to drive the buses. The Supreme Court held that the termination of the
service of such drivers was on account of ‘continued ill-health’, as contemplated by sub-cl (c) of s 2(oo) of the Act and
was, therefore, not ‘retrenchment’. The court, however, held that the termination was not justified as it was discriminatory
vis-a-vis other employees. In view of the fact that the workmen had put in long years of service and most of them were
above 40 years of age, the court proposed a scheme of compensatory relief for such workmen, suitable to the peculiar loss
that they had suffered on account of premature retirement, necessitated by their unfitness to work as drivers.28 In a similar
case, where the labour court ordered the reinstatement of a driver, whose services were terminated on the basis of a
medical report to the effect that his vision was defective as a result of cataract, a single judge of Bombay High Court
upheld the order of the labour court, and held that, subsequent to his termination, the driver had his cataract removed by
surgery and judicial notice could be taken of the fact that cataract can be removed and the eye-sight can be restored.29

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The genesis of the law relating to adjudication of discharge simpliciter is to be found in the decision of the labour appellate
tribunal in Buckingham & Carnatic, where it had the occasion to consider the right of an industrial employer, to discharge
his workman by notice or in lieu thereof, by payment of wages for a certain period, without assigning any reason. Though
the labour appellate tribunal recognized the right of an employer to discharge an employee from his service in accordance
with the contract of service, it accentuated the requirements of acting bona fide. If the termination of service is a colourable
exercise of the power or is a result of victimisation or an unfair labour practice, the industrial tribunal would have the
jurisdiction to intervene and set aside such a termination. Further, it was held that where the termination of service is
capricious, arbitrary or unnecessarily harsh on the part of the employer, as judged by the normal standard of a ‘reasonable
man’, that may be cogent evidence of victimisation or unfair labour practice.30 If the order of termination is, in fact,
punitive or vindictive or arbitrary in character, such a termination, though appears to be discharge simpliciter under the
contract of employment,31 or under the standing orders,32 would amount to a colourable exercise of power. In such cases,
the order of discharge is not conclusive and the industrial adjudicator can examine the substance of the matter and
determine for himself, the real nature of the discharge, despite the veil of innocence of a discharge simpliciter, covering the
face of the order, and may discard such an order, if it is a colourable exercise of the power under the contract. The form of
the order would not be conclusive and the adjudicator will have jurisdiction to go behind the order, to find out the actual
reason which led to the order and then consider whether the termination of service was a colourable exercise of the power,
resulting in victimisation or an unfair labour practice.33 In Gujarat Steel Tubes, Iyer J observed:

The court will find out from other proceedings or documents connected with the formal order of termination, what the true ground
for the termination is. If, thus scrutinized, the order has a punitive flavour in course or consequence, it is dismissal. If it falls short
of this test, it cannot be called a punishment. To put it slightly differently, a termination effected because the master is satisfied of
the misconduct and of the consequent desirability of terminating the service of the delinquent servant, it is a dismissal, even if he
had the right in law, to terminate with an innocent order, under the Standing Order or otherwise. Whether, in such a case, the
grounds are recorded in a different proceeding from the formal order, does not detract from its nature. Nor the fact that, after being
satisfied of the guilt, the master abandons the inquiry and proceeds to terminate. Given an alleged misconduct and a live nexus
between it and the termination of service, the conclusion is dismissal, even if full benefits as on simple termination, are given and
non-injurious terminology is used. On the contrary, even if there is a suspicion of some misconduct, the master may say that he
does not wish to bother about it and may not go into his guilt, but may feel like not keeping a man he is not happy with. He may
not like to investigate, or take the risk of continuing a dubious servant. Then, it is not dismissal, but a termination simpliciter, if no
injurious record of reasons or punitive pecuniary cut-back on his full terminal benefits, is found. For, in fact, the misconduct is not
then the moving factor in the discharge. We need not chase other hypothetical situations here. What is decisive is the plain reason
for the discharge, not the strategy of a non-inquiry or clever avoidance of stigmatizing epithets. If the basis is not misconduct, the
order is saved.34

In Ravindra Kumar Misra, Ranganath Misra J noted:

In several authoritative pronouncements of this court, the concepts of ‘motive’ and ‘foundation’ have been brought in for finding
out the effect of the order of termination. If the delinquency of the officer in temporary service, is taken as the operating motive in
terminating the service, the order is not considered as punitive, while, if the order of termination is founded upon it, the termination
is considered to be a punitive action. This is so on account of the fact that it is necessary for every employer to assess the service of
the temporary incumbent, in order to find out as to whether he should be confirmed in his appointment or his services should be
terminated. It may also be necessary to find out whether the officer should be tried for some more time, on temporary basis. Since,
both in regard to a temporary employee or an officiating employee in a higher post, such an assessment would be necessary merely
because the appropriate authority proceeds to make an assessment and leaves a record of its views, the same would not be available
to be utilised to make the order of termination following such assessment, punitive in character. 35

The principles so stated, appear to be quite simple, but their application by the courts, particularly the Supreme Court,
leaves one in a maze of bewildering perplexity. Hardly one case can be said to be a precedent for a subsequent case, even
in similar fact-situations. It may, therefore, be apposite to analyse some of the leading cases and discuss their ratio
decidendi. In Assam Oil Co,36 the question was: whether the industrial adjudicator has no jurisdiction to deal with the
validity, propriety or legality of the order terminating the service of an employee, purporting to be under the contract of
service? The facts were: the employer found that the work of the concerned employee was thoroughly unsatisfactory, as
there was a long series of instances of bad work and failure to carry out orders of insolence, untruthfulness and
disobedience. It was also thought that the employee, being in a confidential position in the office, should not have become
a member of the union. In the circumstances, the services of the employee were terminated in terms of the contract of
service, which provided that the employment may be terminated on one month’s notice, on either side. In the order of

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termination, it was also stated that the employee had not matched up to the standard of work required by the job, by
correcting the faults that the employer had pointed out. In view of the fact that the services of the employee were
terminated in terms of the contract, no domestic inquiry was held. The Supreme Court, on the basis of the evidence of the
manager of the employer company, came to two conclusions, firstly, that the employer was thoroughly dissatisfied with the
work of the employee, and secondly, the employer did not approve of the employee’s conduct in joining the union. In this
situation, the court was inclined to the view that the order of discharge, passed against the employee, proceeded on the
basis of a misconduct, hence the discharge was of a punitive nature, as it amounted to punishment for the alleged
misconduct. The employer, therefore, was not justified in discharging the employee without holding a proper inquiry.
Furthermore, since the circumstance that the employee had joined the union, had at least, partially weighed in the mind of
the employer in terminating the services of the employee, the termination was not justified, as it would not be open to the
employer to dismiss any employee solely or principally, for that reason. The plea of the employer, that whenever the
employer purports to terminate the services of his employee, by virtue of the power conferred on him by the terms of
contract, the industrial adjudicators cannot question its validity, propriety or legality, was specifically rejected. In
Chartered Bank, Wanchoo J observed:

There is no doubt that an employer cannot dispense with the services of a permanent employee by a mere notice and claim that the
industrial tribunal has no jurisdiction to inquire into the circumstances in which such termination of service simpliciter took
place...and approved the rule that in order to judge this, the tribunal will have to go into all the circumstances which led to the
termination simpliciter and the employer cannot say that it is not bound to disclose the circumstances before the tribunal. The form
of the order of termination is not conclusive of the true nature of that order, for it is possible that the form may be merely a
camouflage for an order of dismissal for misconduct. It is therefore, always open to the tribunal to go behind the form and look at
the substance; and if it comes to the conclusion, for example, that though in form, the order amounts to a termination simpliciter, it
in reality, cloaks a dismissal for misconduct, it will be open to it to set it aside as a colourable exercise of the power.37

In this case, the cash department of the bank was headed by the chief cashier, under whom a number of assistant cashiers
were working. The chief cashier alone, gave security for the safe working of the cash department. Hence, no individual
guarantees or fidelity bonds were taken from the assistant cashiers working in the cash department. The assistant cashiers
were entertained in service only on the recommendation of the chief cashier. There was a long-standing practice followed
in the cash department, that all the assistant cashiers on duty, should remain present at the end of the day, when the cash
was checked and locked up under the supervision of the chief cashier, so that any shortage in cash could be easily checked.
There was a department circular issued to the above effect also. The chief cashier reported to the management that the
concerned employee was leaving the bank without his permission for some time past, before the cash was checked and
locked up, in spite of the circular, hence, he was unable to continue to guarantee him and unless his services were
dispensed with, his conduct would affect the security of the cash department. Two courses were open to the bank, it could
have taken disciplinary action, as provided in para 521 of the bank award, or it could have resorted to the power vested in
it by para 522(1) of the award. But with a view to avoid going into the wrongs and rights of the dispute between the chief
cashier and the assistant cashier, the bank terminated the services of the assistant cashier, purporting it to be within terms
of para 522(1) of the award. In the course of the adjudication proceedings on the dispute relating to the discharge of the
concerned assistant cashier, before the tribunal, no allegations of victimisation or unfair labour practice were made out
against the bank, though it was alleged that the bank exercised the power under para 522(1) of the award, mala fide. The
order of discharge was set aside by the tribunal on the ground that when there were allegations which might amount to
misconduct, against the employee of the bank, the procedure of disciplinary action under para 521 of the award ought to
have been followed and the procedure under para 522 (1) could not have been resorted to. But, in appeal, the Supreme
Court held that, the order of discharge, in the circumstances of the case, was unassailable and it could not be contended
that there was a colourable exercise of power by the employer, as the termination of the services of the concerned
employee was not on account of any misconduct on his part, and the order of termination could not be considered to be
merely a cloak to avoid holding a proper inquiry under para 571 of the award. It was, therefore, held that the bank had no
option but to terminate the service of the assistant cashier, under para 522(1) of the award, as it was faced with the report
from the chief cashier, otherwise, its system in the cash department, would have required a change, which was not
possible. The court declined to infer mala fides of the employer from the squabbles between the cashier and the concerned
workman or from the fact that the bank had not provided an alternative employment to the concerned employee.38

In UB Dutt & Co, the facts were: the workman concerned came drunk to the mill and abused the engineer, the secretary
and others and threatened them with physical violence. He was caught hold of by other workmen and taken outside. But
shortly afterwards, he came back again and abused the same officials of the company. Thereupon, the company served a
charge-sheet on him, setting out the above facts and asked him to show cause why his service should not be terminated on
account of the grave indiscipline and misconduct. As the workman denied these allegations, he was informed that a
departmental inquiry would be held and he was placed under suspension, pending the inquiry. But later on, instead of
holding the inquiry, the company terminated his services under the relevant Standing Order. The Supreme Court held that

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it was too late in the day for an employer to raise a claim to terminate the services of his employee at any time, by just
giving a notice or paying wages in lieu of such notice, for it would amount to a claim ‘to hire and fire’ the employee, as the
employer pleases, and thus completely negate security of service, which, has been secured to the industrial employees,
through industrial adjudication, for a long period of time. The explanation of the employer, namely, that the proposed
inquiry, if it had been conducted, would have led to further friction and deterioration in the rank and file of the employees
in general, and that maintenance of discipline in the undertaking would have been prejudiced if the workman had been
retained in service, was discountenanced by the court. Wanchoo J, observed:

If the employer wanted to take action for misconduct and then suddenly, dropped the departmental proceedings, which were
intended to be held, and decided to discharge the employee under r 18(a) of the Standing Orders, it was clearly a colourable
exercise of the power under the rule, inasmuch as that rule was used to get rid of an employee, instead of following the course of
holding an inquiry for misconduct, notice for which had been given to the employee and for which a departmental inquiry was
intended to be held.39

In Jabalpur Electric Supply, the facts were: the workman was charge-sheeted for substituting certain quantities of coil and
cable in the stores of the company and even the inquiry into the misconduct had been held. Then the company discharged
the workman from service, on the ground that it did not find it possible to retain him in service. This order was challenged
by the workman inter alia on the ground that the order of ‘discharge’ was really an order of dismissal and as such, was bad
in law. In the circumstances the, Supreme Court drew a distinction, in fact and in law, between an order of discharge under
the contract and an order of dismissal or suspension as punishment and observed that though, from the inquiry, the
employer might have been satisfied that the act of misconduct for which the employee was liable to be dismissed had been
proved, he took a merciful view of his conduct in view of the previous clean record of the employee and accordingly,
proceeded to ‘discharge’ him from service under the relevant Standing Order instead of dismissing him and in so doing,
the employer had, in fact, acted fairly and even generously.40 Thus, in Jabalpur Electric Supply, the Supreme Court resiled
and took a softer view as compared to its hard-nosed decision rendered in UB Dutt.

It is impossible to reconcile these two decisions. In the former case, the employer had dropped the intended disciplinary
proceedings after serving the notice of misconduct on the workman, while in the latter case, though the inquiry had been
held and the finding that the act of misconduct had been proved, had, in fact, not been recorded by the inquiry officer, as
imagined by the Supreme Court. It is also therefore, probable, that the act of misconduct might not have been proved,
which prompted, the employer to resort to the power of a discharge simpliciter, under the relevant Standing Order. If the
‘merciful view’ of the employer, in preferring the discharge simpliciter to the disciplinary dismissal, could prevail in this
case, perhaps with more justification, it could have prevailed in UB Dutt. However, given that the earlier harder stand had
yielded place to a softer view in a later case discloses the fact that the judicial view was becoming more alive to the ground
realities and this change can be seen as part of the gradual evolution in the judicial decision-making process.

Then in Murugan Mills, where the services of the concerned employee were terminated under the relevant Standing Order
without assigning any reason, the Supreme Court held that since the services of the workman, in fact, had been terminated
for dereliction of duty and an attitude of go-slow in his work, which clearly amounted to a punishment for misconduct, the
order of discharge simpliciter, under the relevant Standing Order, in such circumstances, was clearly a colourable exercise
of the powers to terminate the services of workmen, under the provisions of the relevant Standing Order and the tribunal,
therefore, was justified in going behind the order and deciding for itself, whether the termination of the workman’s
services could be sustained.41 In Utkal Machinery, a Bench of five judges of the Supreme Court, again emphasised that the
termination of the service of a workman under contract, by an industrial employer, must be in bona fide exercise of the
contractual rights and then reiterated that in case the power is exercised mala fide or as a measure of victimisation or unfair
labour practice or it is so capricious or unreasonable as to lead to an inference of motive or a lack of bona fide, it would be
open to an industrial adjudicator to interfere with such a termination. In the case, the termination of the service, purporting
to be in terms of the contract of employment, was found to be of a punitive character and was therefore, held to be mala
fide and a colourable exercise of power.42

In Tata Oil Mills, the court again accentuated the bona fide aspect of the employer’s action. In this case, the services of an
employee were terminated after informing him that the company had lost confidence in him. The labour court came to the
conclusion that the workman’s plea about the mala fides of the company, was not proved and that the termination of
service could not be said to amount to an act of victimisation or unfair labour practice. In spite of these findings, the labour
court held that the discharge was not justified and directed the company to reinstate the workman. In appeal, the court
recapitulated the principles enunciated in the earlier dicta, and in view of the definite finding of the labour court, in favour
of the company, that the action in terminating the services of the workman was not mala fide and did not amount to
victimisation, it was held that the employer company was justified in discharging the workman from service, in accordance

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with the power vested in it by the relevant rule of service and the holding of the labour court was not sustainable. Speaking
for the court, Gajendragadkar J observed:

The test always has to be, whether the act of the employer is bona fide or not. If the act is mala fide, or appears to be a colourable
exercise of the powers conferred on the employer, either by the terms of contract or by the Standing Orders, then, notwithstanding
the form of the order, industrial adjudication would examine the substance and would direct reinstatement.43

In Agra Electric Supply, the termination of the service of the concerned workman, under the contract of service, without
any notice and without assigning any reason, was set aside. It was held that the termination was of a punitive character, for
an act of misconduct, viz; having used the vehicle of the superior officer without his consent. It was further held that the
termination was not bona fide, but was a colourable exercise of power, inasmuch as the report of unsatisfactory work of the
employee was made at the instance of the superior officer and at any rate, was inspired by the fact that the workman had
used the vehicle of that officer without his consent and got it damaged. The court observed that in view of the facts and
circumstances of the case, the form and language of the order were of no consequence and it was open to the tribunal to
find out whether the order was, in fact, passed with a view to punish the workman.44 Likewise, in Jagdish Prasad, the
services of the employee were terminated for the reason that he, at the time of his employment, had concealed the fact that
his service had been terminated by his previous employer for his involvement in a corruption case. The Supreme Court
held that this order casts a stigma on the character of the employee and since no opportunity to defend himself was given
by holding a domestic inquiry, the termination of his service was vitiated and illegal.45

In Brooke Bond, the workman was charge-sheeted, alleging that he had abused the position of trust and responsibility as
the company’s employee and had brought down, thereby, its reputation, by committing certain acts. After holding a
domestic inquiry into the charges, the workman was dismissed from the service of the company, for the misconduct
‘committed and proved’ against him. It is thus obvious that the ‘discharge’ being for an act of ‘misconduct’, was of a
punitive nature. The workman filed a complaint before the labour court, under s 26 of the Bihar Shops and Establishment
Act 1953. The labour court took the evidence of the domestic inquiry on to its record and also, itself, recorded certain other
evidence, led by the parties. From this evidence, the labour court recorded certain findings on the basis of which it allowed
the workman’s claim and set aside the order of ‘discharge’ passed by the management and directed the reinstatement of the
workman. In appeal, against the order of the labour court, the employer took the plea before the Supreme Court, that the
termination of the service of the workman, was a discharge simpliciter and not by way of punishment, and since the
workman had abused his position in the company, it was not possible to continue to repose trust and confidence in him and
to continue him in service. But the court noticed that the charge-sheet contained allegations of acts of ‘misconduct’ against
the workman and the findings of the inquiry officer were that the acts of misconduct charged against him, were proved and
that the order of discharge consequent upon those findings, in clear terms, stated that it was passed as a punishment and
further, that even in the written statement filed by the management before the labour court, it had averred that the workman
was found guilty of the charges of misconduct levelled against him and the company preferred to punish him by
‘discharging’ him from service, instead of dismissing him. In the face of all these facts, the plea of the company, that the
order terminating the service of the workman, was of a discharge simpliciter, and not by way of punishment, was held to
be inconsistent with the record, and therefore, manifestly untenable. The order of ‘discharge’, in fact, was by way of
punishment and not discharge simpliciter.46

On the other hand, in Tata Engg, the discharge simpliciter was held to be proper. An officer of the company had been
grievously assaulted. The police charge-sheeted the delinquent workman and the committal order passed by the magistrate,
recited that the relations between the workman and the assaulted officer were strained before the incident of assault. From
this, the management inferred that the workman had, in one way or the other, a hand in the assault, and decided that it was
not in the interest of the company to retain him in service, particularly in view of the fact that he was a terror in the
division where he was employed. In these circumstances, the management discharged the workman from service, in
exercise of the contractual power vested in it, under the provisions of the relevant Standing Order. The Supreme Court held
that it was manifestly wrong to say that the company had acted mala fide, to victimise the workman, because he was a
leading member of the union and observed that to hold so, would tantamount to saying that even if the employer was
satisfied that it was prejudicial to the interests of his concern, to continue the workman in his service, the order of
discharge must be deemed to be mala fide or passed to victimise him, merely because he was an active union worker.
Furthermore, from the mere fact that certain other workmen concerned with some other acts, had been reinstated, it would
not follow that the management had the intention to victimise the concerned workman, or that the order of discharge was a
colourable exercise of power, to discharge under the Standing Orders. In the circumstances of the case, a grievous assault
of the officer by those working under him, could be seriously viewed by the company, as against the acts committed by
other employees. If the management, therefore, preferred to discharge the workman under the relevant Standing Order,
instead of holding an inquiry into the alleged act of misconduct, parallel to criminal proceedings, it would not be
reasonable to say, as the tribunal held, that the company could have charged the workman with misconduct and held an

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inquiry. The fact that it did not hold an inquiry, but exercised its power under the relevant Standing Order, could not render
the order mala fide or one passed in colourable exercise of the power to discharge the workman from service. Relying on
Jabalpur Electric Supply Co, in the circumstances of the case, the court held that the company had properly and justifiably
exercised its power to terminate the service of the workman and there was no warrant for the tribunal to come to the
conclusion, that it had acted mala fide or so as to victimise the workman.47

Likewise, in Gujarat MDC, the validity of a discharge simpliciter was upheld. The services of the concerned workman
were terminated, as the management considered him to be arrogant, careless, negligent and having scant respect for the
management, in view of certain events that had happened. The Supreme Court set aside the award of the labour court,
which had held that the discharge was in pursuance of the threatened disciplinary action, for acts of misconduct and did not
amount to a discharge simpliciter and, in fact, the real nature of the action taken against him was for the misconduct and
was punitive. Since the requirement of holding a domestic inquiry was not complied with, the action of discharge was
violative of the rules of natural justice. While quashing the findings of the labour court as perverse, the supreme court
observed:

If the corporation has been merciful in terminating his services by discharging him simpliciter, that is not a fault to be laid at their
door, nor can it be a ground for imposing on them, the services of the respondent, who was indisciplined and arrogant—a conduct
subversive of the smooth functioning of any commercial or industrial undertaking.48

In Municipal Corpn of Greater Bombay, the facts were: under the relevant Standing Orders, the employer corporation had
a two-fold power; one, to impose punishment for misconduct after a disciplinary inquiry, under Standing Orders 21 and 23;
and the other, to terminate the service of an employee by one month’s written notice or pay in lieu thereof under Standing
Order 26. The proviso to Standing Order 26 required the employer to give reasons for termination of the employment, in
writing to the employee. The services of the concerned employee were terminated on the ground that her ‘record of service
was not satisfactory’, though in the communication, it was stated that she would be paid ‘one month’s wages in lieu of
notice and would also be eligible for all the benefits as may be admissible under the Standing Orders and service
regulations of the undertaking’. While upholding the validity of the termination, the Supreme Court observed that merely
because the reasons for terminating the service of the employee were required to be given and the reasons must not be
arbitrary, capricious or irrelevant—it would not necessarily make the order of termination punitive in character, so as to
require the compliance of the disciplinary procedure under Standing Orders 21 and 23; otherwise, the power of termination
of service of an employee under Standing Order 26 would be rendered meaningless and futile, for, in no case, would it be
possible to exercise it. It was further pointed out that:

If the misconduct of the employee constitutes the foundation for terminating his service, then, even if the order of the termination
is purported to be made under Standing Order 26, it may be liable to be regarded as punitive in character and hence, attracting the
procedure of clause (2) of Standing Order 21, read with Standing Order 23, though, even in such a case, it may be argued that the
management has not punished the employee, but has merely terminated his service under Standing Order 26.49

In a similar fact-situation, in Gujarat Steel Tubes, a majority of a three judge Bench took a diametrically opposite view. In
this case, the workmen had gone on an illegal strike and they continued to be on strike despite all efforts of the
management, in the face of the threat of the mill being taken over by the Government, having been declared a sick unit. In
these circumstances, the management discharged 853 workmen and recruited some freshers to take their place, to keep the
wheels of production moving. The management in this case, also had a two-fold power with respect to a workman guilty of
misconduct, under the model Standing Order No 25(1), viz, to discharge a workman under sub-cl (l)(f) of cl 4 of model
Standing Order 23, by giving him one month’s notice or by payment of one month’s wages in lieu thereof, while cl 4(A) of
model Standing Order No 23 required the employer to record and communicate the reasons to the workman, for the
termination of his service; and, to dismiss the workman by following the procedure of charge-sheet and inquiry etc. The
management preferred the former course in the prevailing circumstances. Krishna Iyer J, who delivered the majority
opinion, took the view that it was a case of dismissal, rather than of a discharge simpliciter, because the background of the
illegal strike was the real foundation for the termination of the service of the workmen and the resort to the discharge
simpliciter was a colourable exercise of the relevant model Standing Order.50 But Koshal J, took the view that it was a
clear case of a discharge simpliciter, as made out by the order and could not be a case of dismissal. Instead of focussing its
attention on the relevant Standing Order, the majority pursued a rather prolix process of reasoning. The model Standing
Order 25(1) gave the employer an option under cl (f), to ‘discharge under Standing Order 23,’ by giving the workman one
month’s notice or wages in lieu thereof, or under cl (g), to ‘dismiss without notice’, by complying with the disciplinary
procedure under Standing Order 25(4). In case he adopts the former option, he is required to indicate his reasons for the
termination of the service of the workman by cl 4(A) of model Standing Order 23. In case the reasoning of the majority is
correct, the first option of discharge simpliciter gets emasculated and ineffective. The employer had exercised its option by

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giving valid reasons, the arbitrator had on facts, found that the order was not founded on the misconduct of strike, but on
the intransigence of the workmen in not returning to work, which led the management to discharge the workmen en bloc.
So also, on the basis of the evidence led by the management, the arbitrator came to the conclusion that it was a case of
discharge simpliciter. The High Court, therefore, was wrong in interfering with the arbitral award. A priori, the majority
opinion was absolutely perverse and clearly wrong, while the dissenting view of Koshal J was right.

In MK Ravi, the services of the employee were terminated in terms of the contract of employment without assigning any
reason. Before the labour court, the employer justified the termination of service as a discharge simpliciter and also
alternatively, took the plea that the termination, though apparently a discharge simpliciter, in fact, was a punishment for
misconduct. The labour court held that if it was a case of a termination simpliciter, the termination, being in the nature of
retrenchment, was not valid for non-compliance with the requirements of s 25F of the Act. But dealing with the alternative
plea, the labour court permitted the management to adduce independent evidence to justify the order and also allowed the
workman to lead evidence to rebut the case of the employer. On the basis of such evidence, the labour court held that the
dismissal of the workman was justified. A single judge of the High Court upheld the validity of the award and held that the
workman, having acquiesced to the hearing of the alternate case and also let in evidence to demolish the same, raised the
plea against the labour court considering the alternate case of the management on after the verdict went against him.51

In Ruby General Insurance, the order of discharge simpliciter, under the contract, was set aside by the tribunal, as it took
the view that the order punishing the workman, amounted to a dismissal. In coming to this conclusion, the tribunal was
impressed by two allegations made by the workmen; firstly, that the management felt resentful against him for his having
complained to the authorities against their failure to issue the letter of appointment, and secondly, that they were annoyed
with him for his having demanded extra payment in respect of the work he was made to do in relation to certain concerns,
in which the company was interested. Since the order of termination was passed without holding any inquiry, the tribunal
held it to be invalid and directed the reinstatement of the workman. The award of the tribunal was affirmed in appeal by the
Supreme Court, because the point was not pressed.52 Likewise, in Hindustan Steel, the tribunal held that though the order
of the termination of the service of the workmen was, in form, one of termination of service in terms of the contract, it was,
in fact, punitive in nature and it was a case of victimisation. It was not in a bona fide exercise of the employer’s right to do
so, as it was based on the adverse report of the police. Consequently, the tribunal held the order to be illegal and unjustified
and directed the reinstatement of the workmen, with full back wages. In writ proceedings, the High Court affirmed the
holding of the tribunal, that the termination of the service of the workman was not in a bona fide exercise of the power of
the employer to terminate the employee’s service and that it was punitive in character. The High Court also held that the
relief of reinstatement was the appropriate relief, as the case did not fall in one of the exceptions to the normal rule of
reinstatement. In appeal, the Supreme Court did not consider it proper to interfere with the holding that the order
terminating the service was not in a bona fide exercise of the power of the employer and was punitive in character and it
limited the appeal only to the question, whether the tribunal should have granted the relief of reinstatement or
compensation.53

In Bihar SRTC, the facts of the case were: the workman concerned was discharged from service in accordance with the
terms of the contract to the effect that ‘the appointment was purely temporary and was terminable without notice and
without assigning any reason’. The labour court relied on a letter addressed by the management to the conciliation officer
in which it stated that the service of the workman was terminated as it was found that he had committed various
irregularities in the discharge of his duties. Accordingly, the labour court held that the said termination was illegal as no
enquiry was conducted into the irregularities alleged, and accordingly ordered reinstatement. The Supreme Court upheld
the award of the labour court.54 It is pertinent to note that both Bihar SRTC and Tata Engineering, were decided by the
same judge. From the juxtaposition of these cases, it would appear that diametrically opposite stands were taken in the two
cases, having similar fact-situations.

In Sudder Office, the workman concerned was charged with removing some used pulleys from the company’s godown and
loading them in the godown lorry and for instructing the driver to drop them at the godown of some one else.
Subsequently, some sort of investigation was made by the management, which was loosely called an inquiry. Then an
order was passed, stating that the charges had been satisfactorily proved against the workman and the management had lost
confidence in him, as it was unsafe to retain him in the post of trust and responsibility occupied by him, in the interest of
the company, and it was decided to terminate his service under the contract, as provided in the relevant Standing Order.
The labour court held that the enquiry conducted by the management was not valid, because no evidence was adduced
before it by the management, to prove the charges against the workman, and held that the said termination was a
camouflaged dismissal. On this view of the matter, it ordered reinstatement of the workman with full back wages and
continuity of service. The High Court held that the order terminating the service of the workman was an order of discharge
simpliciter and not one of dismissal and the award of the labour court, therefore, was erroneous. The Supreme Court
upheld the order and observed that the High Court had acted within its jurisdiction, in setting aside the order of the labour
court, especially so, when no finding of victimisation, unfair labour practice or mala fide, was recorded against the

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management. The court, therefore, upheld the order terminating the service of the workman, for loss of confidence, who
was at the relevant time, holding a very responsible post, where integrity and honesty were quite essential.55 In Motipur
Sugar Factory, in cases of dismissal, ‘no inquiry’ or ‘defective inquiry’ situations stand on the same footing. It is further
stated that even in cases where no inquiry has been held, it is open for an employer to satisfy the tribunal, by adducing
evidence about the validity of the order of discharge or dismissal. In other words, even in cases of a discharge simpliciter,
it is open to an employer to satisfy the tribunal that the services of the employee were terminated in a bona fide exercise of
the powers under the contract or for a loss of confidence in him.56.

Where an employer terminates the service of a workman who shows a consistent indifference to work and discipline and
gets annoyed when he is asked to give an explanation, an inference of mala fides cannot be justified. The fact that the
workman happens to be an office-bearer of a union will make no difference. There is no ambiguity in law on this highly
sensitive question of ‘discharge’. The employer may have a right to discharge his employee under the contract or rules. But
the existence of a good reason, based on objective facts, is indispensable for a discharge. There can be a myriad of reasons
for discharging including an act or omission, amounting to a misconduct. The employer is not bound to hold an inquiry and
visit the employee with penal action, even if such reason happens to be a misconduct of the employee. It is only the
absence of such reason, and not a mere failure to hold an inquiry, that would render such discharge mala fide or an act in
colourable exercise of power, raising an inference of victimisation. Not the law, but its application to the facts of each case,
presents the real difficulty. The possibilities for an employer seeking to eliminate the thorn of an active trade union worker,
or for an employee, seeking to cover his misconduct under his trade union activity, always exist. The assessment of
evidence becomes difficult when a guilty employee happens also to be an active trade union worker and the employer takes
recourse to a discharge simpliciter, rather than to a long winding, and dilatory course of inquiry and punitive action. The
dividing line between the motive for and the basis of the order, becomes very thin in such cases. The law is also liable to
be misapplied, when a few observations in a judgment intended to emphasise some peculiar features of any particular case,
are misread or misunderstood, by tearing them from their context.57

In Sadasivan, Raju J for a Division Bench of the Madras High Court, held that a termination of service in terms of a clause
in an agreement, providing that the ‘management can terminate the service of an employee, without giving reasons, by
giving one month’s notice or salary in lieu of notice’, was void and unenforceable, being ultra vires of Art. 14 of the
Constitution, apart from being opposed to public policy and violative of s 23 of the Indian Contract Act 1872.58 This
decision calls for some analysis. In the first place, according to the admitted facts, it was not a case of termination of
service of a public servant and hence, the observation of Raju J that such a clause would offend Art. 14 of the Constitution,
is without any merit whatsoever. Secondly, the right of an employer, to terminate the service by invoking a term of the
contract of employment and by giving one month’s notice or paying wages in lieu thereof, is coextensive with the right of
an employee to resign and leave the service by giving one month’s notice or paying wages in lieu thereof. In terms of such
a contract, neither the employee, nor the employer was required to give reasons for the resignation or the termination,
respectively. Thirdly, given the fact that the certified Standing Orders, as well as the contract of employment, provided for
the determination of the contract by giving the prescribed notice or wages, could it be said that such a contract fell within
one of those forbidden contracts enumerated in s 23 of the Indian Contract Act 1872? Could it, by any stretch of
imagination, be canvassed that an employment contract of this nature is opposed to public policy or that it defeats the
provision of any law or that it causes injury to any person or his property or is immoral or fraudulent?Would it be wrong if
one draws an adverse inference to the effect that the learned judge was absolutely ignorant of the fact that there is nothing
in industrial law, or in any branch of law, like a ‘compulsive life-time employment’, bordering on slavery and serfdom,
with neither party having the right to terminate a contract once made? It is only when the termination of service is found
to be punitive and a colourable exercise of powers on the part of the employer, that the issue acquires a different
complexion, giving a right to the courts to lift the veil and set the order aside, if it is found that it was not a case of a
termination simpliciter, but one of a camouflaged dismissal. This much is the settled law, as laid down in a catena of
decisions by the Supreme Court, for instance, Assam Oil Co,59Municipal Corporation of Greater Bombay,60Shamsher
Singh Gujarat Steel Tubes,61 and others. For that matter, even in a case involving a public servant, who is governed by the
provisions of Art. 311 of the Constitution, Sinha CJI, speaking for a Constitution Bench of the Supreme Court, held that if
the Government proceeds against the employee, in the direct way, without casting any aspersions on his honesty or
competence, his discharge would not, in law, have the effect of a removal from service by way of punishment and the
employee could have no grievance to ventilate in any court.62 Viewed thus, the decision rendered by Raju J in Sadasivan is
wholly misconceived, perverse, clumsy and is wrong. In Chandra Prakash Gautam, the Supreme Court reiterated the
earlier judicial dicta on the subject and held that if a person is appointed on a temporary basis and the order of termination
is not casting any stigma, then such order would be an order of termination simpliciter and the same cannot be challenged
on the ground that no opportunity to show cause was given.63 In Dainik Navbharat, a single judge of the MP High Court
held that the termination of a workman, who was appointed on the specific understanding that his appointment was for the
Bhopal office only, on the ground that he refused to report at the Jabalpur office, would not amount to defiance of any
lawful order on his part and the termination of his service on that count, was illegal.64

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(ii) Loss of Confidence:

In VA Rebellow, the court upheld the validity of the termination of the service of an employee of the Air India Corporation,
in terms of the relevant regulation framed under the Air Corporations Act 1953, by paying his salary for thirty days in lieu
of the notice. The relevant regulation did not lay down any pre-requisite for invoking its application. Action under this
regulation could be validly taken by the employer corporation at its sweet-will, without assigning any reason and it was not
bound to disclose why it did not want to continue in service, the employee concerned. The order of termination of the
service of the workman, did not, therefore, refer to any act of misconduct on the part of the workman. But the written
statement filed by the corporation before the labour court, disclosed the fact that the corporation had lost confidence in the
workman, due to a grave suspicion regarding his private conduct and behaviour with the air hostesses employed by the
corporation. The labour court, therefore, held that the discharge of the workman was not a discharge simpliciter, but was of
a punitive nature. In appeal, Dua J observed:

It may be conceded that an employer must always have some reason for terminating the services of his employee. Such reason,
apart from misconduct, may, inter alia, be a want of full satisfaction with his overall suitability in the job assigned to the employee
concerned. The fact that the employer is not fully satisfied with the overall result of the performance of his duties by his employee,
does not necessarily imply a misconduct on his part. The only thing that remains to be seen is, if in this case, the impugned order is
mala fide. ... Once bona fide loss of confidence is affirmed, the impugned order must be considered to be immune from challenge.
The opinion formed by his employer, about the suitability of the employee for the job assigned to him, even though erroneous, if
bona fide, is in our opinion, final and not subject to review by industrial adjudication. Such opinion may legitimately induce the
employer to terminate the employees’ services; but such termination can, on no rational grounds, be considered to be for
misconduct and must, therefore, be held to be permissible and immune from challenge.65

It was, therefore, held that the labour court was not right in holding that the termination of the service of the workman, for
an act of misconduct, was not a discharge simpliciter. From this decision, it appears that the court assumed the bona fides
of the employer corporation in the discharge simpliciter of the workman, under the relevant regulation, by accepting its
plea of loss of confidence in the workman. The court did not address itself to the specific contention of the workman, that
the discharge, though purported to be under the relevant regulations, in fact, was for the misconduct of his alleged
misbehaviour towards the air hostesses. This yardstick has not been adopted and applied in many other cases already
discussed. In Binny Ltd, the plea of loss of confidence by the employer was again given more credibility than the plea of
the workman that the discharge was of a punitive character.66 The concerned workman took leave for eight days for going
to his native place to settle a land dispute. But in fact, he did not go to his village. During the period of such leave, he, as a
matter of fact, participated in a hunger strike before the Government secretariat. The management, therefore, cancelled his
leave and directed him to join duty forthwith. The workman, however, did not comply with this direction. Consequently,
the management terminated his services, under the relevant Standing Order, for being absent from duty for more than eight
consecutive days. Though the labour court found that the workman took leave on a false pretext and the management had
not acted mala fide, with the object of victimisation or as an unfair labour practice in discharging the workman, still, it
ordered his reinstatement with Rs 5,000 by way of back wages, as it took the view that the management had no right or
power to revoke the leave once granted to the workman. In appeal, the Supreme Court set aside the award of the labour
court and held that the management could not possibly have any confidence in the workman for the future, because he had
taken leave on a false pretext and observed, that in view of the well-settled law, neither reinstatement, nor backwages
could have been ordered.

In Johnson Pumps, the facts were: the services of the concerned workman were terminated by a notice in terms of the
contract of service. This order was challenged by the workman in industrial adjudication, as mala fide, and calculated to
victimise him for his trade union activities. His case was that although he was efficient and the management had given him
merit increments, his services were terminated because he took active part in the formation of an employees’ union, of
which he became a treasurer. Furthermore, the termination of service was wrongful and illegal, because the workman had
not been given an opportunity to defend himself. The counter case of the management was that since the workman had not
been dismissed from service for any act of misconduct, it was a case of discharge simpliciter, which required no inquiry. In
other words, the action being a simple termination without a stigma, the process and consequence of a disciplinary action
were not attracted. Hence, there was no illegality invalidating the order. Furthermore, the allegations of the workman, that
the termination of his services was on account of his trade union activities, was a concoction in self-defence, made more
‘to create ground for the workman’s claim and levelled as a matter of habit and routine’, and the management did not even
have the knowledge of the formation of the union. The management’s further plea was that it had lost confidence in the
workman, because he had misused his position by passing on ‘very important and secret information about the affairs of
the company, to certain outsiders’ and also made attempts to ‘elicit information from the section, with a view to pass it on
to the outsiders’. The order terminating the services of the workman was, therefore, sought to be sustained as bona fide, on
the ground of unreliability of the workman. In view of the suspicion, that the workman was passing information regarding

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certain tenders to some outsiders, lurking in the mind of the employer, which motivated the termination of the service, the
labour court accepted the plea of loss of confidence advanced by the employer and upheld the validity of the order of
discharge. In appeal, against the order of the labour court, the Supreme Court posed to itself the questions: Whether the
order of termination in this case, was innocuous and bona fide or an oblique circumvention of the processual protection the
law provides, to a workman before he is dismissed for misconduct and whether the ipse dixit of the employer, that he had
lost confidence in the employee, was sufficient justification to jettison the latter, without leveling and proving the
objectionable conduct which had undermined his confidence, so that the tribunal may be satisfied about the bona fides of
the ‘firing’, as contrasted with the colourable exercise of power, hiding a not so innocuous purpose. From the fact that the
employer had not informed the worker or the union about the loss of confidence, nor had it taken this plea before the
conciliation officer, the court drew the inference of a lack of bona fides. It also went into the evidence and held that the
increments given to the workman in the relevant period, militated against the plea of loss of confidence, apart from taking
the view that the evidence on record, was not sufficient to establish the bona fides of the plea of loss of confidence.
Consequently, the discharge simpliciter on the basis of loss of confidence, was held to be mala fide.67

The decision in Johnson Pumps is diametrically opposed to the approach of the court in Jabalpur Electric Supply Co, Tata
Engineering, Hindustan Steel, VA Rebellow, Gujarat MDC and Municipal Corpn of Greater Bombay. No effort was made
to reconcile the conflicting dicta. Rather curiously enough, the court ‘discerned’ ‘harmony’ and ‘consistency’ in the case
law from the Chartered Bank case to the Air India Corpn case. But this ‘discernment’ of harmony is not borne out by any
analytical scrutiny of those dicta. Instead of noticing the glaringly irreconcilable inconsistencies in its approach in the
various cases, the court contented itself by referring to three cases and with the observation that ‘the plethora of precedents
need not be covered in extenso, as the law laid down is the same, except that judicial response to each case situation leads
to emphasis on different facets of the principle’. The law in this vexed area requires restatement, with precision and clarity.
The Bombay High Court, in Siddhanath Kadam, observed that Johnson Pumps only registered a warning against accepting
a plea of loss of confidence, when it is unsupported by any material and proves to be a mere pretence for getting rid of an
unwarranted employee. The attack was directed not against the doctrine of ‘loss of confidence’ itself, but against the
indiscriminate use thereof, without investigation to whether the same is a cover for a capricious, arbitrary and fanciful ‘hire
and fire’ strategy and without regard to whether it is a colourable exercise of the power.68The High Court held that the plea
of a loss of confidence is not liable to be rejected when it is based on good grounds and dependable material, as found by
the tribunal. It is not open to an employer in despair, as a last resort, to raise the plea of loss of confidence, when he finds
that the finding of guilt entered in the domestic inquiry, on the basis of which the order of dismissal was passed by the
management, was bound to be set aside by the tribunal. In other words, the action initiated on grounds other than a loss of
confidence, cannot to converted into or developed into a case of loss of confidence, to suit the convenience of the
employer, so as to sustain the act of termination, which the tribunal, on the facts established, found to be illegal.
Furthermore, the success or failure of the plea of loss of confidence, essentially depends upon the assessment of the facts
and circumstances, considering the nature of the duty of the workman, the trust reposed by the management on the
workmen, and the fiduciary relationship, if any, involved between the management and the workmen, in the day-to-day
work of the workmen.69 The plea of a ‘loss of confidence’ need not necessarily be confined only to the employees holding
confidential posts and not to others. Every contract of employment implies trust and confidence as its ingredients. Some
posts, no doubt, happen to be of a highly confidential nature. But that does not mean that confidence in an employee is a
dispensable element in the other posts.

In Rable v Green , it was held that an employee is expected to promote the employer’s interests, in connection with which
he has been employed and a necessary implication which must be engrafted on such a contract is, that the servant
undertook to serve his master with good faith and fidelity.70 In Tata Engineering, the workman was not holding ‘any such’
position of confidence and still, his discharge was held justified on the ground of loss of confidence. It is not possible to
underestimate the element of such confidence in the harmonious, smooth and effective working of any undertaking. The
court has, however, to ensure that any such claim of ‘loss of confidence’ is genuine and is based on objective facts, lest the
protection afforded to the workman becomes illusory. However, well-founded suspicions against employees holding posts
of a high confidential nature, may be considered enough for a loss of confidence, while in other cases, proof that the
workman has done some act or omission, should be required for the employer’s loss of confidence in him. The questions as
to in what respect the employee was found by the employer, to be unreliable and how his business was liable to be affected
adversely, or how any loss was caused to him, are matters of rational inference and prudent calculations, from the facts
discovered, for the employers and cannot be matters of pleadings and evidence. On a review of some of the above cases, a
single judge of the Gauhati High Court,71 has stated the following principles of adjudication:

(i) A loss of confidence is still a valid ground of termination, though not applicable to all categories of workmen.

(ii) the plea of a loss of confidence cannot, however, be used as a cloak, but must be bona fide.

(iii) An order of termination would not cease to be so, if reasons for the same, even casting aspersions, are given in those
cases where it is required by the Standing Orders.

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(iv) Where reasons are not required to be given by the Standing Orders, it is, to put it mildly, doubtful that the termination
order would be regarded as one of discharge, if it casts a stigma.
(v) If the order be due to victimisation or an unfair labour practice, it would be bad in the eye of law.

(vi) The form of order is never decisive in such cases.

(vii)An order founded on misconduct would be punitive in nature and not a termination simpliciter.

(viii) The management could lead evidence to prove the misconduct, even if it had not held any inquiry into the misconduct,
as required by the relevant Standing Orders.

In Chandulal, the Supreme Court disagreed with the findings of the labour court, that when a service is terminated on the
basis of a ‘loss of confidence’, the order does not amount to one with stigma and does not warrant a proceeding as
contemplated by law, preceding the termination. Speaking for the court, Ranganath Misra J said:

Want of confidence in an employee does point to an adverse facet in his character, as the true meaning of the allegation is that the
employee has failed to behave up to the expected standard of conduct, which has given rise to a situation involving a loss of
confidence. In any view of the matter, it amounts to a dereliction on the part of the workman and therefore, the stand taken by the
management, that a termination for loss of confidence does not amount to a stigma, has to be repelled. 72

In this case, the court deviated from the trodden path, that the service of an employee could be terminated in terms of the
contract for a loss of confidence. In other words, the plea of ‘loss of confidence’ in the employee, casts a stigma on the
character of the workman. In the absence of a statutory definition of the word ‘stigma’, in Kamal Kishore Lakshman, the
same judge, referring to the etymological meaning of the word, held that a stigma is:

something that detracts from the character or reputation of a person, mark, sign etc, indicating that something is not considered
normal or standard ... blemish, defect, disgrace, disrepute, imputation, mark or disgrace of shame ... a mark, a label, indicating a
deviation from a norm ... a matter for moral reproach.73

In these cases, the court has given a penal hue to the termination of service for a ‘loss of confidence’. Consequently, when
an employer terminates the service of a workman, for loss of confidence in him, such termination is not innocent in terms
of the contract. It casts a stigma on the character of the workman. Therefore, the requirement of having disciplinary
proceedings before dispensing with the service of the employee, is attracted. These requirements have been elaborated in
an illuminating opinion by the Delhi High Court, in Amarjeet Singh, in which Anand J, observed:

It is well-settled that in determining the challenge to the validity of an order, which purports to be an order simpliciter, the
language is not determinative and the court has the power, as indeed, the obligation, to go behind the order and examine the
circumstances antecedent and subsequent to the impugned order ... If the impugned order is, therefore, stigmatic, either on the face
of it or in any event, in the context of the circumstances antecedent and subsequent to it, it would be liable to be void on the simple
ground that such an order could not have been made without giving the petitioner a reasonable opportunity of being heard, on the
principle of audi alteram partem.74

In D Seeralan, of the Madras High Court held, that the termination of the service of the employee for ‘loss of confidence’,
being of a punitive character, was invalid for ‘non-compliance’ with the relevant Standing Orders, prescribing the
procedure for inflicting the disciplinary punishment. However, in view of the fact that the termination of service was not
mala fide, the court awarded compensation in lieu of reinstatement.75 In Jagatpal Dhuria, where the labour court, despite
holding that the order of termination, passed against the workman, without conducting an inquiry, was illegal, noted the
fact that there was a shortage of stock when the workman was in charge of the cash collections, and ordered a payment of
compensation in lieu of reinstatement. A single judge of the Bombay High Court accepted the management’s plea, that it
had lost confidence in the workman and approved the award passed by the labour court.76

(iii) Discharge of Probationers:

The purpose of placing a person on probation is to try him during the period of probation and to assess his suitability for
the job concerned. It is settled that an order of discharge is not an order of punishment and, therefore, there is no question
of giving a hearing before a termination of his service.77 If an employee who is on probation or holding an appointment on

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a temporary basis, is removed from the service with stigma, because of some specific charge, then the plea that his service
was temporary or his appointment was on probation, is not sustainable. In such a case, it is necessary to hold an inquiry,
affording him an opportunity to show that the charge levelled against him is either not proved or is without any basis. But
when the service of an employee is terminated during the period of probation or while his appointment is on a temporary
basis, by an order of termination simpliciter, after some preliminary inquiry, it cannot be said that some inquiry had been
made against him before the issuance of the order of termination. It really amounted to his removal from service on a
charge and as such, the termination was penal in nature.78 The principle of law relating to discharge under the contract of
discharge simpliciter, was extended to the discharge of probationers as well, by the Supreme Court in Express Newspapers.
The probationer in this case, was appointed as a journalist on a probation for six months and had to be confirmed if he was
found suitable for the job during this period. But before the expiry of the probationary period, the employer terminated his
service on the ground that his work was unsatisfactory. The discharge was challenged by the workman as mala fide and a
measure of unfair labour practice. The plea of the management was that the journalist, having been appointed only as a
probationer, the termination of his service for unsatisfactory work, was well within the rights of the management. Speaking
for the Supreme Court, Das Gupta J stated the law in the following words:

There can, in our opinion, be no doubt about the position in law, that an employee appointed on probation for six months,
continues as a probationer even after the period of six months, if at the end of the period, his services had either not been
terminated or he is confirmed. It appears clear to us that without anything more, an appointment on probation for six months, gives
the employer no right to terminate the service of an employee before the six months have expired, except on the ground of
misconduct or other sufficient reasons, in the which case, even the services of a permanent employee could be terminated. At the
end of the six months’ period, the employer can either confirm him or terminate his services, because his service is found
unsatisfactory. If no action is taken by the employer, either by way of confirmation or by way of termination, the employee
continues to be in service as a probationer. 79

From these observations, it appears that the court maintained the distinction between the cases of termination of
employment of a probationer, before the period of probation have expired and the cases where the employer exercises his
inherent right, either to confirm or to terminate the employment of the probationer, at the end of the period of probation.80
The employer’s right to terminate the service of a probationer, at the end of the probationary period, without anything
more, was recognised. It is also clear that when the first appointment is on probation for a specific period and the employee
is allowed to continue in the post after the expiry of that period, without any specific order of confirmation, he continues in
his post as a probationer only and acquires no substantive right to hold the post in the absence of any indication to the
contrary, in the original order of appointment or promotion or the service rules. When, therefore, after the period of
probation, an appointee is allowed to continue in the post, without an order of confirmation, the only possible view to take
is that by implication, the period of probation has been extended. The fact that an appointee is allowed to continue after the
end of the period of probation, cannot lead to the conclusion that he should be deemed to have been confirmed. An express
order of confirmation is necessary to give the employee a substantive right to the post, and from the mere fact that he is
allowed to continue in the post after the expiry of the specified period of probation, it is not possible to hold that he should
be deemed to have been confirmed. The reason for this is that where, on the completion of the specified period of
probation, the employee is allowed to continue in the post without any order of confirmation, the only possible view to
take, in the absence of anything to the contrary in the original order, appointment, promotion or the service rules, is that the
initial period of probation has been extended, by necessary implication. Where the service rules fixed a definite time
beyond which the probationary period cannot be extended and the employee appointed or promoted to a post on probation
was allowed to continue in that post after the completion of the minimum period of probation, without an express order of
confirmation, he cannot be deemed to continue in that post as a probationer by implication. In such a case, the implication
is negatived by the service rules, forbidding the extension of the probationary period beyond the maximum period fixed by
it and it is permissible to draw an inference that the employee allowed to continue in the post on completion of the
maximum period of probation, has been confirmed in the post, by implication.81

The only difference between a probationer whose term of probation has not expired and the one who is continuing in the
service after the expiry of the stipulated period of probation, without any order of confirmation having been passed, is, that
the former has the guaranteed period of trial, namely, the probationary period during which he is not liable to be
discharged on the ground of unsuitability, whereas the latter is liable to be discharged any time. It will be totally
meaningless to refer to a person’s employment on probation, if the management has a right to terminate his services only
on the ground of proved misconduct. It is of the very essence of the concept of probation, that the person is on trial,
regarding his suitability for a regular appointment and is liable to be discharged on being found to be unsuitable for
permanent absorption, on the expiry of the probationary period.82 In Utkal Machinery, where the terms of employment of
the probationer provided that the employer could terminate the services of the employee during the probationary period,
without notice and without assigning any reason, the Supreme Court said that when the validity of such termination is
challenged in industrial adjudication, it would be competent for the industrial tribunal to find out whether the order of

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termination was a bona fide exercise of the power conferred by the contract. In such a case, like the case of a permanent
employee, it would be open to the tribunal to consider whether the order of termination is mala fide or whether it amounts
to victimisation or an unfair labour practice or is so capricious or unreasonable as would lead to the inference that it had
been passed with an ulterior motive and not in a bona fide exercise of the power arising out of the contract, and to afford a
proper relief to the probationer employee.83 In Brooke Bond, the facts were: the workman was appointed in the first
instance, for a probationary period of six months, extendable for a further period of three months or more. The letter of
appointment further provided that the company had the right to terminate the services of the probationer, ‘during the period
of probation or the extended period of probation or before confirmation in writing, without notice and without assigning
any reasons whatsoever’. The industrial tribunal held that the employer was not justified in discharging the probationer
workman from service, without holding a proper inquiry. Jaganmohan Reddy J, observed:

While there may be some justification on the terms of appointment in the case, for the court to observe that the employer had no
right to terminate the service before the expiry of the six months, it makes no difference to the principle that the employer cannot
terminate the services, even of a probationer, on any grounds which have not been recognised as a justification for such
termination. 84

Applying the rule laid down in Utkal Machinery, the court held that the order terminating the services of the probationer,
was capricious and unreasonable and the termination was not justified. Affirming the direction of the tribunal, the court
observed that on the reinstatement of the workman, the employer will have an opportunity of watching his work and ‘will
have the right and freedom to make up its mind as to whether the services of the respondent should be retained or
dispensed with, on justifiable grounds’. The effect of the Utkal Machinery and the Brooke Bond, is that despite a provision
in the contract of employment, to the effect that during the period of probation, an employer has the right to terminate the
services of the probationer without any notice and without assigning any reason, it would be open to the industrial
adjudicator to consider whether the order of termination is mala fide or whether it amounts to victimisation or an unfair
labour practice. From the observations of the court in the Brooke Bond case, extracted above, one is left with an impression
that even on the expiry of the probationary period, the employer can dispense with the services of the probationer only ‘on
justifiable grounds’ but this observation has to be understood to be confined to the particular facts of that case alone. This
cannot be understood to lay down a general proposition of law, because it would cut at the very root of the concept of
probation. In Gujarat MDC, where the validity of the termination of the service of a temporary employee was upheld,
which employee was discharged from service in view of the misconduct of ‘malingering’ and ‘other acts subversive of
discipline’. It is a well-settled law that at the end of the probationary period, it is open to the employer to continue the
employee in his service or not, as per his discretion, otherwise, the distinction between a probationary employment and a
permanent one will be wiped out.85 Even if on the expiry of the probationary period, the work of the employees has been
satisfactory, it does not confer any right on them to be confirmed. Furthermore, the extension of any facilities to such
employees, during the period of their probation or extension thereof, or their being treated as confirmed, will not ipso facto
make them confirmed, which can only be done by a valid order of confirmation.86 The law on the termination of the
services of probationers has been elaborately stated by a Constitutional Bench of the Supreme Court in Shamsher
Singh.87The same principles will apply to probationers in industrial employment as well. The only difference is that in the
case of Government employees, the requirement of Art. 311 of the Constitution have to be complied with, whereas, in the
case of industrial employees, the rules of natural justice have to be complied with, when the termination of service is for an
act of misconduct. The principles discernible from Shamsher Singh are:

i. The termination of the service of a probationer in the Government will not, ordinarily and by itself, be a punishment,
because the Government servant so appointed, has no right to continue to hold such a post any more than a servant
employed on probation by a private employer, is entitled to do so.

ii. Such a termination does not operate as a forfeiture of any right of a servant to hold the post, if he has no such right,
because such a termination cannot be described as a dismissal, removal or reduction in rank by way of a punishment.
iii However, if the right exists, under a contract of service, rules to terminate the service, and the motive operating on the
mind of the Government, are wholly irrelevant. The reason is that it inheres in the state of mind, which is not
discernible.
iv. On the other hand, if the termination of service is sought to be founded on misconduct, negligence, inefficiency or any
other disqualification, then it is a punishment. In such a case, the motive becomes relevant, since the termination is
founded on misconduct, it is objective and manifest.
v. But no abstract proposition can be laid down, that where the services of a probationer are terminated without saying
anything more, in the order of termination, than that the services are being terminated, it can never amount to
punishment.

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vi If a probationer is discharged on the ground of misconduct or inefficiency or for similar reasons, without a proper inquiry
and without him getting a reasonable opportunity of showing cause against his discharge, it may in a given case, amount
to a removal from service.
vii Before a probationer is confirmed, the authority concerned is under an obligation to consider whether the work of the
probationer is satisfactory or whether he is suitable for the post. In the absence of any rules governing a probationer in
this respect, the authority may come to the conclusion that on account of his inadequacy for the job or for any
temperamental or other object, not involving moral turpitude, the probationer is unsuitable for the job and hence, must
be discharged. No punishment is involved in this.
viii The authority may, in some cases, be of the view that the conduct of the probationer may result in a dismissal or a
removal, on an inquiry. But in such cases, the authority may not hold an inquiry and may simply discharge the
probationer, with a view to giving him a chance to make good in his walk of life, without a stigma at the time of the
termination of his service. Thus, if the Government proceeds against the probationer, in a direct way, without casting
any aspersions on his honesty or competence, his discharge would not have the effect of punishment.
ix. If, on the other hand, the probationer is faced with an inquiry, on charges of misconduct or inefficiency or corruption, and
if his services are terminated without following the provisions of Article 311 (2), then he can claim protection. Even the
fact of having held an inquiry is not always conclusive. What is decisive is whether the order is really by way of
punishment.
x. If there is an inquiry, the facts and circumstances of the case will have to be looked into, in order to find out whether the
order is of dismissal, in substance. The probationer whose terms of services provided that it could be terminated without
any notice and without any cause being shown, cannot claim the protection of Article 311.
xi. A preliminary inquiry to satisfy that there was reason to dispense with the service of the probationer, would not
tantamount to an inquiry into the acts of misconduct, alleged against the employee. On the other hand, a statement in the
order of termination of a probationer, that he is undesirable, would impart an element of punishment. If, therefore, the
facts and circumstances of the case indicate that the substance of the order is that the termination is by way of
punishment, then the probationer is entitled to the protection of Article 311 of the Constitution.
xii. In other words, the substance of the order, and not the form, would be decisive. The order terminating the services of a
probationer under the rules of employment and without anything more, will not attract Article 311.
xiii. Where a departmental inquiry is contemplated and if an inquiry is not in facts proceeded with, Article 311 will not be
attracted, unless it can be shown that the order, though unexceptionable in form, is made following a report based on a
misconduct.

In Prakash Mishra, the Madhya Pradesh High Court held that though a probationer can be weeded out without an inter-
party inquiry, his service cannot be terminated without inquiry, if the termination is by way of punishment for an act of
misconduct. The termination of the service of a probationer in a public sector undertaking, though appearing to be
innocuous, was made in the background of an act of misconduct. The impugned order was, therefore, quashed.88 The
principle will apply to industrial adjudication as well. In K Veerasha, the Kerala High Court held that an order of dismissal
of an employee for misconduct, is entirely different in nature from an order terminating the probation of such an
employee.89 An order of termination in innocuous terms, which does not cast any stigma on the employee, nor does it visit
him with any evil consequences and is also not founded on any act of misconduct, is not, open to challenge.90 Likewise, in
the absence of the rules which equate a termination of service during or at the end of the probation, with removal, no
proceeding is necessary to terminate the service of a probationer.91 If the contract of service provides that the probation can
be terminated if the work of the employee is found to be unsatisfactory, the probation can be terminated after calling for an
explanation from such an employee and after giving him a reasonable opportunity of being heard, and to explain himself.
In such a case, the discharge would be based on the contractual terms and would not be an order of dismissal.92 But the
Patna High Court, in Indian Oil Corpn,93 had taken the view that if a probationer has not been taken in service
substantively or his service has been terminated in terms of the contract, the principles of natural justice are not
automatically attracted, because an appointment on probation is meant to assess the capacity of the probationer and if he is
not continued in the service, it would inferentially indicate that his work was not found satisfactory. An assessment of
satisfactory work is inherent in the probationer’s employment.

The period of probation, however, in excess of the period provided in the Standing Orders, would not be valid in law, as
the Standing Orders have statutory force.94 In Agra Electric Supply Co Ltd v Alladin , the employee was taken on probation
for a period of six months. However, in the letter of his appointment, it was provided that even during the period of
probation, his services could be terminated without notice and without assigning any reason. The Supreme Court held that

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the provisions in the letter of appointment, with respect to the termination of the service of a probationer, must be read to
mean that the appointment was subject to the management’s power of termination, as provided in the Standing Orders.95 In
Western India Match Co, the facts were, the workman was appointed as a watchman and in his letter of appointment, a
period of six months was stipulated as the probationary period, while the certified Standing Orders defined a ‘probationer’
as a workman who was ‘provisionally employed to fill a permanent vacancy and has not completed two months service’.
After the expiry of the period of probation of six months, the probationary period of the employee was extended by two
months retrospectively, and, during this extended period, his services were terminated. The labour court found that the
discharge was neither mala fide, nor an act of victimisation for trade union activities. Nevertheless, it set aside the order of
discharge, holding that the term regarding the six months probation, in the letter of appointment, was inconsistent with the
definition of a ‘probationer’ in the Standing Orders, and therefore, was invalid. After the completion of the probationary
period of two months, as provided in the relevant Standing Orders, the workman had become a permanent employee.
Affirming the holding of the labour court, in appeal, the Supreme Court observed that ‘the terms of employment specified
in the Standing Orders would prevail over the corresponding terms in the contract of service in existence, on the
enforcement of the Standing Orders’. On a parity of reasoning, it was observed:

If a prior agreement, inconsistent with the Standing Orders, will not survive, an agreement posterior to and inconsistent with the
Standing Orders, will also not prevail ... and ‘the employer cannot enforce two sets of Standing Orders governing the classification
of workmen, it is also not open to him to enforce simultaneously, the Standing Orders regulating the classification of workmen and
the special agreement between him and an individual workman, setting his categorisation. (infra)

In this case, another fundamental point was submitted to the court. It was suggested that the Standing Orders, certified
under the Industrial Employment (Standing Orders) Act 1946, cannot be said to have statutory force, because they can be
modified by an industrial adjudicator, on a reference in this regard being made to him under s 10 of the IDA. The argument
was that a statutory provision cannot be modified by industrial adjudication on the theory that the courts or tribunals can
only interpret the law and not legislate; furthermore, if the terms or conditions of employment, covered by the Standing
Orders, could be modified by an adjudicatorunder the Industrial Disputes Act, they could equally well be modified by a
private agreement between the parties. It was, therefore, urged that if the subject-matter of the Standing Orders could be
amended or modified by industrial adjudication or private agreement, it cannot have statutory force; hence, the contract
between the parties, overriding the provisions of such Standing Order, was not invalid. The court does not appear to have
grasped or grappled with the import of this argument, and it seems to have contented itself by observing:

It is true that the labour court may determine the terms and conditions of employment, which may be inconsistent with the
Standing Orders. But in the present case, the reference did not give jurisdiction to the labour court, to determine the terms and
conditions of the employment of Prem Singh. The reference directed the labour court to decide whether the discharge of Prem
Singh from service, was legal or justifiable.96

This obviously is no answer to the argument, as there is neither law nor logic to sustain it. What is worse is that the court
has not even set out the argument, adumbrated on behalf of the employer, in the judgment.97 In order to sustain the validity
of an order terminating the services of a probationer, before an industrial adjudicator, in terms of the contract, the employer
has to specifically plead that his work during the probationary period was found to be unsatisfactory. For instance, in
WIMCO, on behalf of the employer company, it was contended that even if the order of termination of the services of the
probationer, was held to be invalid, in any event, the labour court should not have made an order of reinstatement of the
probationer. But in view of the fact that no plea was taken by the employer company, before the labour court, or even in
the special leave petition, that the work of the employee was unsatisfactory during the probationary period, nor did it lead
any evidence in proof of his unsatisfactory work, the court discountenanced the contention. In Life Insurance Corporation,
a two-judge Bench of the Supreme Court reviewed the law relating to probationers and held that the services of a
probationer could not be equated with that of a permanent employee and no regular departmental inquiry was required
before his services were terminated.98

In Dipti Prakash Banerji, another Bench of the Supreme Court observed that, where the order of termination disclosed a
stigma, it could not be ignored, because it would have an effect on the future of the employee. In this case, it was observed
that the termination order referred to three other letters issued earlier, one of which explicitly referred to an act of
misconduct on the part of the employee and also referred to an inquiry committee’s report, which found that the employee
was guilty of misconduct. On these facts, the court observed, that the stigma need not be contained in the termination order
itself, but could also be contained in an order or proceeding referred to in the termination order or in an annexure thereto
and further observed that it would vitiate the termination order, and accordingly, set aside the order.1 In VP Ahuja, the
Supreme Court reversed the earlier view expressed in LIC and held that a probationer or a temporary servant would also be
entitled to certain protection against an arbitrary termination or a punitive termination, without complying with the

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principles of natural justice. On this view of the matter, the court held that a termination order, founded on the ground that
the ‘probationer failed in the performance of his duties, administratively and technically’ was ex facie, stigmatic; that such
an order could not have been passed without holding a regular inquiry and giving an opportunity of hearing to the
employee; and that the plea that the probationer had no right to the post, as his services could be terminated at any time
during the period of probation, without notice, as set out in the appointment, was not acceptable.2

This particular decision of the Supreme Court deserves some critical analysis, in view of the fact that the perplexing range
of arguments advanced by the court are capable of inducing grave misconceptions about ‘probation’ and the rights of a
‘probationer’. ‘Probation’ means ‘trial’ and a probationer is an employee who has been provisionally employed to fill a
permanent vacancy and whose probation, ie, fitness for the post, has not been confirmed or declared. The concept of
‘fitness for the post’ includes three main ingredients, viz, performance or productivity, discipline or conduct and
attendance. Whether a particular probationer has measured up to the required standards, in terms of performance, discipline
and attendance, is a matter which has to be judged by the employer, who has to put up with him for 35-38 years after
confirmation, ie, until he attains the age of superannuation. Under no circumstances can this responsibility be delegated to
a judge of any court or tribunal, whatever may be his intellectual credentials, for the simple reason that he is neither
familiar with, nor has the occasion to closely monitor, the way a particular probationer is progressing and performing
during the period, nor is he competent to superimpose his own private notions of good and bad, fairness and unfairness,
upon an employer who has much higher stakes in the confirmation or termination of a probationer, than the judge himself.
To hold that ‘an order to the effect that the probationer failed in the performance of his duties is stigmatic’, is a judicial
pronouncement without a parallel. What stigma does an intimation of a ‘failure in the performance of one’s duties’
presumably cast to such an extent, as to affect the future of the probationer? It is understandable that where a probationer
was to be terminated for an act of misconduct, such termination would cast a stigma and adversely affect his employment
prospects, and hence, he should be given an opportunity to explain and defend himself, before his services are dispensed
with. But why should an opportunity be given in case a probationer is not able to measure up to the required job standards?
What does the Supreme Court propose to achieve by directing the employer to go through with such a ‘useless,
bureaucratic formality’? Assuming that an opportunity has been given, would it help the probationer to unshackle himself
from the so-called ‘stigma’? As a matter of fact, what the Supreme Court proposed was in the nature of converting an
otherwise invisible simple termination, into a prolonged inquiry commencing with a show cause notice, followed by a
domestic inquiry and finally, by a termination order, all of which together, will give a wide publicity, thereby condemning
the probationer forever and adversely affecting his employment prospects.

This defective decision was followed by a single judge of the Karnataka High Court, in Parimala, where the facts
disclosed that the workman was appointed as a typist on probation, in a bank. While on probation, she was placed in
judicial custody in connection with a complaint filed against her, in her earlier employment. She was charged with
misconduct and disciplinary proceedings were initiated against her. Subsequently, her services were terminated on ground
of unsatisfactory performance, and the disciplinary proceedings were dropped. Shetty J, held that the said termination was
punitive in nature and cast a stigma on the petitioner.3 This is a wholly misconceived decision on the part of Shetty J. What
stigma could presumably have been cast on the probationer, in the face of the fact that the disciplinary proceedings were
dropped by the employer, and the termination order did not contain even a whisper about her past record of discipline,
except mentioning that her services were being terminated on ground of ‘unsatisfactory performance’? If the termination of
a probationer, for ‘unsatisfactory performance’ were to be prohibited on the flimsy ground of it casting a stigma, what
other ground is available, which falls outside the range of the so-called ‘doctrine of stigma’ and which does not require an
opportunity being given to the probationer before dispensing with his services? The law on probation was laid down
clearly and firmly by a catena of decisions of the Supreme Court, during the 1960s itself, and there is no reason for the
judges of the Supreme Court, to display their judicial heroics or dispense uncalled for charity, and produce judicial chaos
in respect of a matter that had been settled conclusively. In JF Awardai, another single judge of the same High Court, held
that the termination of a probationer-conductor, on the ground of unsuitability, was illegal, and directed the management to
reinstate him.4 In Bharat Fritz Werner, the same judge upheld a patently disturbing direction of the labour court, granting
‘last drawn wages’ as interim relief to a probationer, on the ground that the dispute relating to his termination was pending
for over three years.5 The granting of last drawn wages as interim relief, while the adjudication proceeding was still
pending, amounted to granting the whole relief, which the labour court, or even the High Court cannot admittedly order, in
the face of settled law on the subject. Is it possible that a High Court judge was operating from a position of abject
ignorance of the rudimentary legal principles? It is all the more disquieting that this ruling comes from the learned judge,
despite the specific plea raised by the counsel for the petitioner-employer, that the labour court had granted the whole relief
in the guise of an interim relief, against all canons of law. Gururajan J was blissfully silent on this vital aspect and gave a
decision, which reflects anything but law or justice. The decisions rendered in VP Ahuja, Parimala, JF Awardai and
Bharat Fritz Werner are products of self-misdirection on the part of the learned judges, and cannot be supported on any
principle known to law. These decisions need a review by a larger bench. In Pavanendra N Verma v SGPGIM Sciences ,
Ms Ruma Pal J posed the question: ‘what language in a termination order would amount to a stigma’, and answered it
thus:

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Generally speaking, when a probationer’s appointment is terminated, it means that the probationer is unfit for the job, whether by
reason of misconduct or ineptitude, whatever the language used in the termination order may be. Although, strictly speaking, the
stigma is implicit in the termination, a simple termination is not stigmatic. A termination order, which explicitly states what is
implicit in every order of termination of a probationer’s appointment, is also not stigmatic … In order to amount to a stigma, the
order must be in a language which imputes something over and above a mere unsuitability for the job. 6

The learned judge held that, in this view of the matter, the language used in the termination order, ie, the employee’s ‘work
and conduct has not been found to be satisfactory’, was almost exactly the same as that in Dipti Prakash Banerji, and thus,
clearly fell within the class of non-stigmatic orders of termination, and thus, the impugned order was not ex facie,
stigmatic. Though this decision is right, the attempt made by Ruma Pal J, to draw it parallel with Dipti Prakash Banerji, is
not free from fallacy. For instance, an order of termination which runs in the terms ‘your work and conduct has not been
found to be satisfactory’ falls as much within the class of the so-called ‘stigmatic’ orders, as held in VP Ahuja, as in the
class of, non-stigmatic’ orders, as held in Dipti Prakash Banerji, by two different benches of the same court and, still
worse, within an interval of an year or so. In other words, Ruma Pal J, appears to have preferred Dipti Prakash Banerji,
while rejecting, though succinctly and rightly so, the ratio of VP Ahuja. In ABT Parcel, a single judge of the Madras High
Court held that in the case of an employee, who was appointed as a probationer for six months, which was extended by
another six months, no hearing was necessary before terminating his probation, as there was no reference to any
misconduct in the termination order and hence, no stigma could be said to be attached to such termination.7

In Davender Arora, another single judge of the Delhi High Court, took a similar view and held that the order terminating
the service of a probationer, on the ground that his performance was not up to the expectation, was not ex facie stigmatic.8
In CR Kuppalli, the Karnataka High Court held that the termination of a probationer, on the ground of unsuitability, was
perfectly within the right of the corporation and there was no need to conduct an inquiry before terminating his services.
The Bench further observed that courts should shy away from insisting on proof of the unsuitability of the workman to do
a particular job, when the employer, having had the opportunity to weigh his performance individually and in comparison
with others of the same ilk, had formed an opinion in that regard.9 The above cases, ie, ABT Parcel, Devender Arora and
CR Kuppalli, have been rightly decided, being consistent with the law relating to the termination of probationers. Even so,
in the face of such a bewildering range and variety of rulings, touching upon the same issue, how the apex court expects
the employers to mould their own processes and procedures while dealing with probationers is an altogether perplexing
question. At a more basic level, the noisily for the Supreme Court to import notions of benevolence into employment
relationships is equally baffling. For that matter, the law laid down in Raghavendra S Kulkarni expounded the correct law,
free from half tones, wavering and wandering.

In Kusum Products, the facts were: a workman was appointed as a probationer for six months, which, according to the
certified Standing Orders’ could be extended by another 9 months, before being terminated. The probation of the workman
was terminated at the end of one year from the date of appointment, on the ground that his performance was not
satisfactory. The tribunal ordered a reinstatement, holding that in terms of the model Standing Orders, he was deemed to
have been confirmed, as he had worked for 240 days. Allowing the writ petition, a single judge of the Calcutta High Court
quashed the order of the tribunal and held that the workman was governed, not by the model Standing Orders, but by the
terms of the appointment and the certified Standing Orders, which did not contemplate such a deemed confirmation; and
that, in view of the fact that no order of confirmation was issued, it should be presumed that the period of probation stood
extended. It is submitted that this case was rightly decided.10 In a case where the termination of the service of a workman
purporting to be discharged simpliciter is held to be improper or invalid, the workman will be entitled to reinstatement and
backwages, with continuity of service.11 In adjudicating these reliefs, the same principles will govern as in cases of
wrongful punishment of dismissal, which aspect has been covered under s 11A.

(iv) Retrenchment:

Although, every termination of service of an industrial ‘workman’ may not be ‘retrenchment’, as defined in s 2(oo), every
‘retrenchment’, as is obvious from the language of the definition, is a termination of service of a ‘workman’, by the
employer. For validly terminating the service of a ‘workman’, as a measure of retrenchment, therefore, the employer must
comply with the requirements of s 25F, or s 25N and s 25G of the Act. The question, whether the termination of service of
a particular workman amounts of ‘retrenchment’ or not, must be determined on the facts and circumstances of each case.12

(v) Discharge on Transfer of the Undertaking:

An establishment or undertaking may be transferred from one owner to another, either by the operation of law or by any
agreement between the parties. A contract of service being incapable of transfer, the relationship of employment between a

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quondam employer and his employees in such establishment or undertaking, comes to an end upon the transfer of the
establishment or undertaking. Section 25FF, therefore, provides compensation to the workman whose services are
terminated upon such transfer of the establishment or undertaking. However, the transfer of service from the quondam
employer to the new employer of the workman working in the establishment, may be effected by a tripartite agreement
between the quondam employer, the workmen and the new employer, the effect of which would be to terminate the
original contract of service by mutual contract and to make a new contract between the employees and the new employer.13
The proviso to s 25FF, therefore, provides that where, by a tripartite agreement, the services of the employee of the
establishment or undertaking, are transferred from one owner to another, on the conditions prescribed therein, the
provisions of that section will not apply and the quondam employer will not be liable to pay compensation.

(vi) Discharge on Closure of the Undertaking:

The closure of the establishment or undertaking brings about the end of the contract of service between the employer and
the employee, as it becomes impossible to perform the contract or nothing remains to be performed. The incidents of
closure have been discussed under s 25FFF, which provides for the payment of compensation to the workmen, on the
termination of their services as a result of closure.

(vii) Discharge or Dismissal as Punishment for Misconduct:

This topic has been discussed under s 11A post.

Terms of employment or the Conditions of Labour

The ‘terms of employment’ of any person refer to all the matters covered by the contract of employment, either express or
implied.14 In the language of Lord Denning MR:

Terms and conditions of employment may include not only the contractual terms and conditions, but those terms also, which are
understood and applied by the parties in practice, or habitually, or by common consent, without ever being incorporated in the
contract.15

Basically, ‘terms of employment’ include such straightforward industrial issues as bonus, wage rates (in all forms,
including dearness allowance and other allowances), hours of works, overtime, holidays with pay, sickness benefits,
superannuation benefit, grading and promotion, dismissal and retrenchment procedures. But ‘terms of employment’ is a
wide-ranging phrase, which also extends to aspects of labour relations that are less obvious than these. The juxtaposition of
the expressions ‘terms of employment’ and ‘conditions of labour’, however, indicates the kinds of conflicts that could arise
between those engaged in the industry, on opposite, but cooperating sides. The line of demarcation between the
expressions ‘terms of employment’ and ‘conditions of labour’ is very thin in so far as there is a great deal of overlap
between the two. While terms of employment include all the terms and conditions of service, such as probation, promotion,
transfer, wage/salary, allowances, leave, holidays, bonus, termination of employment, etc., the expression ‘conditions of
labour’ generally refers to the physical conditions of work, which include hours of work, spreadover, interval for rest,
overtime, hazardous operations, safety, health, welfare, social security, non-monetary benefits and facilities, etc. In this
section, however, both the sets have been discussed together. In Madras Gymkhana Club, it was held that these words take
in disputes as to the share in which the receipts in a commercial venture shall be divided and generally cover hours of work
and rest, recognition of representative bodies of workmen, payment for piece-work, wages ordinary and overtime, benefits,
holidays, etc.16 The word ‘terms’ pre-supposes the existence of a contract of employment. The expression ‘terms of
employment’ has reference to the proposition of premises, in the contract of employment, which, when assented to or
accepted, settle the contract between the parties. Where a contract of employment is in existence, all that can form the
subject-matter of the contract are the terms of employment.17

The Assam and Nagaland High Court, in Borokai Tea Estate, took the view that the right of the workers to fish in the tank
adjoining the manager’s bungalow, to the exclusion of the manager, was a ‘term of employment’ and as such, formed the
subject-matter of an ‘industrial dispute’. The correctness of this holding is not free from doubt. The dispute was: ‘whether
the workers of the Borokai tea estate were justified in claiming that they had traditionally, enjoyed exclusive fishing rights
in the tank adjoining the manager’s bungalow and that the manager had no right to fish therein.’ The labour court held that
the particular right was an amenity, coming under the definition of ‘wages’ under s 2(rr). The award of the labour court
was challenged before the High Court by a writ petition, on the ground that the dispute regarding the exclusive fishing
right in the tank in question, centered around a civil right, which might be agitated in a civil court, but could not be taken
to an industrial forum and the conclusion of the labour court, that the workers were justified in their claim, could not be
arrived at in an industrial adjudication. But it does not appear to have been pointed out to the labour court, or to the High
Court, that if the said amenity fell within the definition of ‘wages’ in s 2(rr), the labour court will have no jurisdiction to

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adjudicate upon the same, as ‘wages’ is item No 1 in the Third Schedule of the Act which is a subject-matter under the
jurisdiction of the tribunal, rather than that of the labour court. But the High Court, in the writ proceedings, observed, that
the dispute would appropriately come under item 4 of the Second Schedule, as the management was resisting the claim of
the workmen and asserting its right to the exclusion of the workers’ right to fish in the tank. It was, therefore, held that the
dispute in question was an ‘industrial dispute’. In coming to this conclusion, the High Court appears to have overlooked
the language of s 2(k).18

Before a dispute can be an ‘industrial dispute’, it must be connected with ‘the terms of employment or the conditions of
labour’ of any person; it is only then that the question would arise as to under what item of the Second Schedule or the
Third Schedule, such a dispute would fall. If a dispute is not connected with the ‘terms of employment or conditions of
labour’ of the workmen, the mere fact that the claim falls under a particular item in the second or the Third Schedules, will
not convert it into an ‘industrial dispute’. In other words, the connection of the dispute with the ‘terms of employment or
conditions of labour’ of the workers, is a condition precedent. If the dispute is so connected and it falls in any item in the
second or the Third Schedule, then alone can it partake the character of an ‘industrial dispute’. The mere fact that an item
is enumerated in the Second or the Third Schedule, will not be sufficient to make it an industrial dispute.19 The law does
not work the other way around—that every item enumerated in the second and Third Schedule, whether connected or not,
with the ‘terms of employment or conditions of labour’ of the workmen, will ipso facto, become an ‘industrial dispute’.
The High Court did not consider the question as to whether the right to fish in the pond was in any way connected with the
‘terms of employment’ or ‘conditions of labour’ of the workmen.

The meaning of the phrase ‘conditions of labour’, has never been litigated. The word ‘conditions’ is a word of a wide
import and it means ‘that which must exist as the occasion or concomitant of something else; that which is requisite in
order that something else should take effect: an essential stipulation; terms specified. The word ‘condition’ includes the
idea conveyed by the word ‘term’, but goes beyond it and is not confined to what is included in the latter. The expression
‘conditions of labour’ is, therefore, much wider in its scope as compared to the expression ‘terms of employment’ and it
has reference to the amenities to be provided to the workmen and the conditions under which they will be required to work
Clearly, ‘conditions of labour’, or to use the modern expression, ‘conditions of employment’ mean something different
from the ‘terms of employment’.20 In an Irish case, viz, Brendan Dunnae, ‘conditions of employment’ were described
obiter, as ‘the physical conditions under which a workman works, such as those that appertain to matters of safety and
physical comfort’. This interpretation appears to be comprehensive enough to include ‘safety’, ‘health’, and ‘physical
comfort’ and to include all forms of welfare, like sports clubs, dramatic societies and colour schemes, as well as lockers,
seats, showers and canteens, crèches, lighting, heating, air-conditioning, ventilation, overcrowding, rest periods, etc.
‘Conditions of labour’ would clearly include, too, an off-beat situation like that of dancing instructresses, who refused to
obey their employer’s order to drink a pint of milk a day, to offset the undue wear and tear due to their employment.21 The
phrase might as well include, the general psychological environment of work, as in the case of the psychological
discomfort of the coloured musicians in Scala Ballroom, who might have been required to play in a hall from which
coloured dancers had been barred by the management. In other words, the ‘conditions of labour’ of any person, may be
said to refer to the safety, health or welfare of any employee, and probably, the psychological environment of the job too,
at least where it is within the control of the management and relevant to the efficiency or enjoyment of the employee’s
work.22 The combined effect of these two expressions, viz, ‘terms of employment’ and ‘conditions of labour’, is to bring a
very large number of subject-matters of dispute between the employers and employers, between employers and their
workmen and between workmen and workmen, within the perimeter of the definition of an ‘industrial dispute’. Thus, the
disputes and differences regarding bonus, wages, dearness allowance, various other allowances, gratuity, provident fund,
residential accommodation, leave holidays, medical facilities, working hours, employment of seasonal labour, uniformity
in conditions of service, hygienic and comfortable working conditions, various fringe benefits etc, have been brought
within the scope of ‘industrial dispute’. Some of these terms of employments or conditions of labour are discussed under
the following heads:

Continuity of Service:

In NJ Chavan, Tendolkar J of Bombay High Court held that the right of an industrial workman to continue in his
employment, has been jealously protected and safeguarded by industrial adjudication. It is one of the most vital and
important terms or conditions of industrial employment. Even on the transfer of an undertaking, from one owner to
another, its employees will continue to be entitled to all the rights and privileges acquired by them, by reason of their past
service, if (a) there is a continuity of service, and (b) there is an identity of business. The learned judge observed:

By continuity of service, it is not meant necessarily a legal continuity, but only a continuity in fact, ie, the employees must continue
to serve the business, without a substantial break in their service. Thus, if the transferor gives notice of termination of service and
the transferee makes a fresh appointment, this, by itself, although it may in law, amount to a break in continuity, will not affect the
continuity of service for the purpose of determining the industrial relation. Nor does it constitute a break in service, if a short time

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elapses between such termination of service by the transferor and the appointment by the transferee (which are legal forms resorted
to by the employers, in an attempt to deprive the employees of the rights and privileges they have acquired by reason of past
service), so long as the employees continue to serve the business even after the termination, and before re-employment. ...
Regarding the identity of business, what is required is that the same business, which was carried on by the transferor, must be
carried on by the transferee. It is not sufficient that the business is similar or of the same nature, if the business carried on by the
transferee is a new one. ... Where the object of the lease was to enable the lessee to continue the same cinema business, which the
lessor was carrying on, in the same premises, with the same machinery and equipment, with the same licenses and with the same
business, the identity of the business was held to be the same and in the circumstances, the workmen were held to be entitled to a
continuity of service, qua the lessee.23

A partnership business was taken over and continued by a private limited company. In the new company, three directors
out of five were the old partners, ie, proprietor, his wife and the former manager. It was found that the business was
continued in the same style, though under the name of a private limited company and the company was not a different
entity in fact. The company, however, refused to continue the workmen employed by the partnership, in service. It was
held that the company was not justified in refusing to continue the workmen in service.24 In Shankar Textiles, the factory
was initially taken on lease and was eventually purchased by the lessee. The facts disclosed that the workmen employed by
the lessor were re-employed by the lessee, though at the time of the purchase, the factory was lying closed. The labour
court believed the evidence of the workmen that they had worked in the factory without any break in service. The Supreme
Court upheld the conclusion of the labour court, that the continuity of service of the workmen was not disturbed.25 The
business of the company, including its goodwill, trade rights, properties, assets and stock in trade, was taken over by a new
company. The services of the workmen under the old company, were treated as having been terminated and their accounts
with the old company, including the provident fund etc and the arrears of salaries, were finally settled. The new company
entertained such workmen in service, without giving any express or implied undertaking regarding the continuity of their
service. The workmen joined the provident fund scheme of the new company afresh. In the circumstances, it was held that
the workmen were not entitled to claim a continuity of service.26

Permanency of Tenure:

An industrial workman is entitled to job security. Permanency of tenure, therefore, is an implicit condition of industrial
employment, unless the employment has expressly been stated to be of a ‘temporary’, ‘casual’ or ‘seasonal’ nature. Where
the employment is of a ‘temporary’ nature, it is normally in the desecration of the employer, as to who should be made
permanent and who should not be.27 In Jaswant Sugar Mills v Badri Prasad ,28 reading the definitions of ‘permanent
workmen’, ‘seasonal workmen’ and ‘temporary workmen’, in the Standing Orders, together, the Supreme Court observed
that whilst a ‘seasonal workman’ is one who is engaged in a job which lasts during the particular season only, a temporary
workman may be engaged either for work of a temporary or casual nature or temporarily, for work of a permanent nature;
but a permanent workman is one who is engaged in work of a permanent nature only.

The distinction between a permanent workman engaged in a work of a permanent nature and a temporary workman,
engaged in a work of a permanent nature is, in fact, that a temporary workman is engaged to fill in a temporary need of
extra hands for permanent jobs. Thus, when a workman is engaged on a work of a permanent nature, which lasts
throughout the year, it is expected that he would continue there permanently, unless he has been engaged to fill in a
temporary need. In other words, a workman is entitled to expect permanency of his service. In a later case, ie, Sone
Valley,29 the court upheld the industrial award directing the employer to place half of the temporary workmen on a
permanent basis, where such temporary workmen were employed on a work of a permanent nature, which went on forever.
Likewise, in Hindustan Lever, on the facts of the case, the court affirmed the award of the labour court, directing the
employer to make the temporary workman as permanent, with the relevant grade and dearness allowance.30 But a
temporary workman would not acquire permanency of tenure merely because he is employed in a permanent department or
is given some benefit ordinarily enjoyed by permanent workmen.31 Permanency of tenure can be claimed only by such
employees, as have to work for all the working hours on all the working days, and it cannot be claimed by such workmen
as are employed only for a part-time work. For instance, the musicians working in a gramophone company, who were
required only when there was a recording of songs, were not held to be permanent workmen.32 In Hindustan Aeronautics,
the workmen sought some casual workmen employed in the canteen to be made permanent and the tribunal directed that
from a particular date, they should be treated as probationers and appointed in permanent vacancies, without going into the
question as to whether more permanent workmen were necessary to be appointed in the canteen, over and above the
existing, permanent strength, to justify the making of the casual workmen, permanent, in the canteen where they were
working. Neither was there any permanent vacancy in existence nor did the tribunal give any direction for the creation of
new posts. In appeal, the Supreme Court held that the tribunal was not justified in making these directions. The workmen
could be made permanent only against permanent vacancies, not otherwise.33

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Transfer

It is now well settled that transfer orders being a managerial prerogative, ought not to be, in the normal circumstances,
interfered with by the tribunals or courts.34 No employee can insist that he must continue at a particular place, except when
the transfer is mala fide.35 The right to transfer an employee from one department to another or from one part of the
establishment to another or from one branch to another, is incidental to the managerial functions. It is an inherent power of
the management of an organisation which has several branches and where there is no indication in the contract of
employment that the employee would not be subject to transfer.36 Transfer of an employee is an implied condition of the
contract of industrial employment. Even if transferability from one place to another, in which employment has been
secured, is not an express condition of the service, it can be read into the contract as an implied term, if having regard to
the very nature of the employment, there is some compulsion to read it into a contract of service by implication. Not
otherwise. One must be able to say: what is obvious need not be explicitly stated and may be taken to have been
understood by both the sides.37 Transfers are not to be made on the basis of the seniority of the employees or on the basis
of some serial order, to be arranged according to the length of service at a particular place. It is a matter of adjustment and
accommodation, to be made by the administrative authority concerned, and is solely within the powers of the executive
and it is not to be normally, interfered with by the courts.38 A transfer of an employee from one department to another or
from one place to another is, therefore, in the discretion of the management, provided the terms and conditions of his
service are not adversely affected.39 But once the mode and manner of transfer is provided in the contract of employment,
that would be binding on the employer as well as the employee. Any deviation from that will invalidate the transfer. In L
Raghupathy, the transfer of the employee, in violation of the service rules formulated pursuant to the powers under the
articles of association of the company, was held to be invalid. The fact that the workman had accepted the relieving order
and had drawn the travelling allowance after the order of transfer, did not amount to acquiescence to the transfer. Speaking
for the Madras High Court, Nainar Sundaram J said:

Acquiescence denotes conduct, which is evidence of an intention of a party to abandon a right legitimately due to him. It may also
denote a conduct from which the opposite party is justified in inferring such an intention. Acquiescence is only a form of estoppel,
and it is of the essence of acquiescence that the party acquiescing should be aware of his rights; and by words or his conduct,
should represent that he assents to what is a violation of his rights and that the person to whom such representation is made, should
be ignorant of the other party’s right, and should have been deluded by the representation into thinking that his wrongful action
was assented to by the other party. The question of estoppel or acquiescence is essentially a question of fact, which is to be decided
on proper materials placed before the court. Once the facts are established, acquiescence is a matter of legal inference by the court.
It is fundamental that the plea of acquiescence should have been specifically expressed by the party, who wants to build a case on
it, and there should be an issue on the point at the appropriate stage, so that the opposite party, who is asked to face the plea of
acquiescence, could meet it effectively. Acquiescence cannot be a matter of bare presumption and assumption. It is a question of
fact, which has got to be pleaded and further, has got to be proved. The burden of proof of the ingredients of acquiescence is on the
party who relies on the same. If there was no plea of acquiescence and if there had been no opportunity for the opposite party to
counter plead and place counter evidence on this question, it would not be proper for the court to permit the party, who wants to
rely on the theory of acquiescence, to press forth the same, at any stage he likes.40

The employer is in the best position to judge how to distribute his employees between different jobs, departments or
branches. He is entitled to decide on a consideration of the necessities or exigencies of his business, whether the transfer of
an employee should be made from one particular job, department or branch to another. It is for the administration to take
the proper decision and such decisions shall stand unless they are vitiated either by mala fides or by extraneous
considerations, without any factual background or foundation. It is not possible for industrial tribunals or courts to have
before them, all the materials which are relevant for this purpose and even if this can be made available, the tribunals and
the courts should be very careful before they interfere with the orders of the employers, made in discharge of their
managerial functions.41 The question of such transfers depend on the internal arrangement of the management.42 In
SSKourav, the Supreme Court pointed out that courts or tribunals are not appellate forums to decide on administrative
grounds and they are not expected to interdict the working of the administrative system, by transferring the officers to
proper places.43 It is not for the industrial tribunal to sit in appeal over the exigencies of business and find out whether they
demanded the transfer or not. The issues relating to how best to secure efficiency of service and whether it would be
desirable, in the interests of administrative convenience, to effect transfers - are all matters which the management alone
can decide.44

The orders of transfer and posting are not usually to be examined by the industrial adjudicators or courts in judicial review,
unless manifest injustice, gross illegality, absolute arbitrariness etc, are apparent in the proceedings. It is not the subjective
assessment of the importance of the posting held by the employee that is determinative in such matters. The far more
important consideration is the tangible benefit attached to each of the posts.45 A transfer is an incident of service. The
management has every right to transfer an employee from one place to another, under the same management, on the same

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pay scale, etc. The employer is the best judge to decide upon the utilisation and distribution of its manpower.
Inconvenience to the transferred employee cannot be a ground for refusing to go on a transfer. The decision of the
employer in such cases, is conclusive and, except in the rarest of rare cases, courts should not interfere with transfer
orders.46 In the context of employment under the state, a single judge of the Gujarat High Court, in JK Dave, pointed out
that the courts would be the least appropriate authority to decide upon the question of transfer or non-transfer of
employees. In matters of transfer, other employees are also likely to be affected and the stay of an order of transfer is likely
to have a chain reaction. Therefore, the maximum possible restraint is called for, to avoid common damage to public
administration, while attempting to redress certain supposed or blown-up hardships of an individual employee. Even if
there is some difficulty or irregularity or a lapse in passing certain orders of transfer, it has to be ignored. Unless an order
of transfer is ex facie, shown to be passed as a measure of penalty or by way of victimisation, the tribunal or the court
should not interfere in their adjudicatory or reviewing powers. If a sufficient leeway is not granted to the employer in the
matter of the transfer of employees, the administrative machinery may collapse or work of the same, may come to a
grinding halt.47

Restrictions on the Right of the Employer to Transfer

It would, ordinarily, be proper for industrial adjudication to accept as correct, the submission of the employer that an
impugned transfer has been made only because it was found unavoidable. Transfers being a part of the managerial
function, it is ordinarily, for the management to determine the time and place of a transfer, having regard to the exigencies
of business and where the workmen is transferred in a bona fide exercise of such function, such transfer is not open to
challenge in industrial adjudication.48 The right of the employer to transfer an employee from one place to another, may
also be governed by a contract or settlement. Any transfer in violation of the terms of the contract or settlement, would be
illegal. It is, however, equally well-settled, that the right of the management to transfer a workman in terms of contract, is
not untrammeled, though this is one of the areas of industrial relations where there has been minimal judicial interference.
However, the tribunals or the courts will be failing in their duty, if they do not interfere when the transfer orders are
malicious or mala fide. In cases where a transfer is found to be tainted by ulterior motives or is otherwise arbitrary, it is
open to judicial scrutiny, in proceedings based on a challenge to its validity or to the validity of the termination of service,
based on a refusal to comply with such an order of transfer. Malice, in ordinary common parlance, means ill-will against a
person, and in legal sense, a wrongful act done intentionally, without just cause or reason.49 Industrial adjudication will be
justified in scrutinizing the validity of a transfer, where there is reason to believe that the management resorted to the
transfer as mala fide, by way of victimisation, unfair labour practice or for some other ulterior motive, not connected with
the business interests of the employer.50 Nothing can be more mala fide than a transfer order being made by the head of a
department, at the behest of another authority, without applying his own mind to it at all. Such transfers cannot be
sustained as they are arbitrary and vitiated by malice, in law.51 An order of transfer made mala fide, or for some ulterior
purpose, like for punishing an employee for his trade union activities, would be vitiated, because of a mala fide exercise of
power.52

The charge of mala fides, whether by way of victimisation or otherwise, has necessarily to be examined by the tribunal for
the purpose of finding out whether the transfer is properly made or not.53Prima facie, therefore, an order of transfer is
valid, unless it is shown that it was mala fide or was a measure of victimisation or an unfair labour practice. A mere
allegation of mala fide or discrimination, will not make it either discriminatory or mala fide. To make out a case for an
interference in matters of transfer, there should be concrete materials, which should be unimpeachable in character.54 The
burden of proof lies on the workman to show that the order of transfer was mala fide or was a measure of victimisation or
an unfair labour practice.55 In the absence of a specific contract to the contrary, it is not incumbent upon the employer to
consult the union before transferring an employee from one place to another. In Shankar Ambedkar, a settlement provided
that the transfer of a workman was in the sole discretion of the employer, depending upon the exigencies of the work and it
was further provided that ‘in the event of any difficulty, the matter shall be sorted out in consultation with the association.’
In this case, no such difficulty was expressed by the workman, at any stage. The Bombay High Court held that the transfer
was not invalid.56

A finding of mala fide has to be reached by the industrial tribunal, only after sufficient reliable evidence is led in support
of it. Such a finding should not be made light-heartedly, in a casual manner, on flimsy grounds or capriciously.57 The
deployment of labour after an assessment of the aptitudes of each of the employees, involves quite a large amount of
managerial discretion. In the very nature of things, it is not possible to prescribe inflexible standards in this regard. If,
therefore, an employer feels that a particular employee will be better suited as an executive on one particular job, than on
the other, or his performance in the latter was not satisfactory, the consequent posting cannot be treated as punitive. Nor
can such measure be treated as victimisation or mala fide. An order of transfer and posting from one post to another or
from one place to another, can be said to be a ‘reduction in rank’ when the employee concerned loses emoluments,
seniority, chances of promotion and other such discernible advantages attached to a post. In a case where a person is
shifted from one post to another, in the same organisation and both posts carry the same emoluments, it would not be

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proper to assume that the transfer is punitive in character or tantamounts to a ‘reduction in rank’. However, the scale of a
salary attached to the post, may not be finally determinative of the question of whether the transfer was mala fide or not. A
reduction in the status and a change in the duties attached to the post, may also be relevant.58 The finding of victimisation
or mala fides, based on no evidence, must be held to be perverse and vitiated in law.59 But where the tribunal, on sufficient
and reliable evidence being led before it, comes to the conclusion that the transfer was mala fide, an act of unfair labour
practice or victimisation for some ulterior purpose, like punishing an employee for trade union activities, the conclusion
would be inescapable, that the transfer was not made for the exigencies of the business. Where such mala fides are
established, it would be reasonable to hold that if proper business interests of the employer had been considered, the
transfer would not have been necessary and could have been avoided. In such a case, the order of transfer would be liable
to be set aside.60

On the other hand, if the tribunal does not find that the transfer was made with any mala fide intention, the order of transfer
cannot be assailed. The finding of mala fides, unfair labour practice or victimisation or otherwise, is a finding of fact and
cannot be interfered with by the High Court in its jurisdiction under Arts. 226 and 227, or by the Supreme Court, under
Art. 136 of the Constitution, unless of course, the finding is perverse or is in violation of the rules of natural justice.61 The
mere fact that the workman is an office-bearer of a trade union or a trade union activist, cannot lead to the inference of
mala fides. If however, the transfer is made solely to prevent him from participating in trade union activities, the transfer
will be liable to be interfered with, as being a case of victimisation and a mala fide exercise of power. But such trade union
activities must be legitimate and in the interest of the trade union. Under the guise of trade union activities, an employee
cannot black-mail or coerce the employer to act according to his dictates and threaten to do physical harm to the officers or
co-employees and still claim special privileges regarding the transfer, because such activities are not legitimate trade union
activities. The order of transfer in such situations, would not be reviewable, either by industrial adjudication or by the
reviewing courts. Each order has to be judged on its own particular facts and circumstances, bearing in mind the general
principles.62

Once the tribunal finds an order of transfer to be legal and valid, it will have no jurisdiction to issue any further direction
regarding the payment of arrears of salary or release orders.63 Even an order of transfer appearing to be innocuous, can be
treated as an order of punishment, provided that the allegations or the conduct of the employee is the foundation for the
transfer and not a mere motive. The allegations would be the foundation for the order, if the record of the case reveals that,
before issuing the order of transfer, the employer came to the conclusion about the truth of the allegations against him and
then issued the order of transfer. However, if the employer merely noted the allegations and did not want to go into the
truth of the allegations and thought that it would be better if the officer is transferred, it cannot be said that the allegations
were the foundation for the order of transfer. In such a case, the allegations were a mere motive for the transfer. In Kundan
Sugar Mills, the Supreme Court said that an employer has no inherent right to transfer a workman from one place of
business to another, if he starts a new business subsequent to the date of employment of the workman, unless it was an
express or implied condition of service at the time of the employment.64 In the field of industrial jurisprudence, the right to
transfer a workman from one factory to another, cannot be treated as implicit in the contract of employment and ‘there is, it
will appear, no recognition given to such right as an abstract proposition, divorced from the facts and circumstances of
each case’.65

In the absence of any statutory or contractual right, a transfer of the workmen en masse, without their consent, would be
unjustified. Furthermore, there may be circumstances where industrial adjudication may be called upon to consider
whether in the peculiar conspectus of events facing a particular fact-situation, the transfer is justified and warranted. In
other words, the exercise of the prerogative of the employer to transfer his servants from one station to another, is not an
inexorable rule. Where a lowly paid employee is sought to be transferred from one station to another, where the transfer
would have disastrous consequences on his economic and family life, the transfer cannot be said to be a justifiable exercise
of the right of the employer.66 However, the mere fact that the workman would have difficulties in securing
accommodation in a far off place or that he may have to look after his family and that the transfer would add to his plight
or that he will not be able to make both ends meet, may not, in all cases, be a ground for holding that the order of transfer
was actuated by mala fides, because every case of transfer involves a certain amount of dislocation and hardship.67
Likewise, where a workman is asked to discharge duties which do not pertain to his employment, his dismissal for the
disobedience of such order cannot be justified.68 If an unjustified and unwarranted order of transfer results in a termination
of the service of a workman, then industrial adjudication is not helpless and it can extend its arm of justice to meet a
particular circumstance or situation.69 However, if the conditions of service provide that the employee can be transferred,
from one place to another or from one company to another, under the same management, such order of transfer cannot be
questioned, unless it is mala fide.70 For instance, in KSR Datta, the employee was transferred from the post of principal of
a college to the department doing editing of sanskrit works. It was held that there was no loss of prestige and no
humiliation in the transfer and on the other hand, it was a recognition of his merit. In this situation, the transfer was held to
be valid.71 The Calcutta High Court has laid down the following principles regarding transfer of workmen:

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(a) A transfer of a workman from one department to another or from any job to another, cannot be made if his service
conditions or terms of service contract expressly negate the right of such transfer or if the Standing Orders of the
employer prohibit such transfer;
(b) a transfer must not operate to the prejudice or detriment of a workman, unless expressly authorised, in other words, the
transfer must not occasion to a workman, economic loss in wages, bonus or other monetary benefits;
(c) a transfer must not be made by way of a punishment, that is to say there must not be a colourable exercise of a power of
transfer of a workman, so as to victimise him;
(d) a transfer of an employee to an inferior position and the imposition of an unaccustomed and onerous duty, must not be
allowed to be made, particularly, where there is an unexplained co-incidence in the employee’s involvement in trade
union activities; and
(e) it is never an implied condition of service of a workman, that the employer has the right to transfer him to a new concern,
started by the employer subsequent to the date of the employment of the workman.72

Where a transfer of employees is found to be tainted, the tribunal has the jurisdiction to grant the interim relief of a stay of
the transfer.73 The employer cannot transfer an employee from one place to another, in the absence of a provision to that
effect, either in the Standing Orders or in the contract of employment.74

Transfer to Another Employer

Though an employer has the right to make internal transfers of his employees, no workman or employee can, however, be
transferred from one employer to another, because an employee has always the right to choose his employer and no one
can be compelled to serve a master whom he does not like.75 The general rule, in respect of the relationship of master and
servant, is that a subsisting contract of service with one master, is a bar to service with another master, unless the contract
otherwise provides or the master consents. A contract of employment involving a personal service, is incapable of transfer.
A contract of service being thus incapable of transfer unilaterally, the transfer of service of an employee from one
employer to another can only have effect by a tripartite agreement between the employer, the employee and the third party,
the effect of which would be to terminate the original contract of service, by mutual consent, and to make a new contract
between the employee and the third party. Therefore, so long as the contract of service is not terminated, a new contract
cannot be made and the employee continues to be in the employment of the original employer, even if the employer orders
the employee to do certain work for another person. The employee still continues to be in his employment. The only thing
that happens in such cases is that the employee carries out the order of the master; hence, he has a right to claim his wages
from the employer and not from the third party to whom his services are lent or hired from. It may be that such third party
may pay his wages during the time he was hired for his services, but that is because of his agreement with his real
employer. However, that does not have the effect of transferring the service of the employee, to the other employer. The
hirer may exercise control and direction in the doing of the thing for which he has hired the employee, or even the manner
in which it is to be done. But if the employee fails to carry out his direction, he cannot dismiss him and can only complain
to the actual employer. The right of dismissal vests in the employer.76

Adjudication

In adjudicating a case of transfer, it is necessary for the tribunal to consider each case on its own merits. While doing so, it
has to consider whether the employee had accepted the employment, knowing that his services are liable to be transferred
or whether the agreement between the employer and the employee contained any specific terms regarding transfers, and if
so, whether corresponding benefits are given to the employee. No doubt, the adjudicator has the jurisdiction to modify an
agreement relating to transfers, but he cannot disregard or omit to take such an agreement into consideration, as a relevant
factor in the process of reasoning, to come to his conclusion. The adjudicator, therefore, has to allow the parties to lead
evidence on the question of transfer and then only, after considering all the relevant factors on the point, he has to decide
that question and make an award accordingly, having stated his reasons.77

Hours of Work

A long standing traditional goal of trade unions has been to reduce the existing hours in the standard working day and
working week, without loss of wages. Elaborate provisions regarding rest periods, spread over the total number of hours
per week, over-time and the manner of intimation of these hours and holidays have been made by various statutes, such as
the Factories Act, the Indian Mines Act, various Shops and Establishments Acts, etc. Normally, weekly hours under the
existing labour enactments, do not exceed 48 hours. In practice, hours of work in establishments working three shifts daily,
amount to 45 per week, as each shift is generally of eight hours’ duration, including the half hour rest interval. The trade

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unions have been striving to seek and suggest a 40-hour week, a five-day week with eight hours a day. For commercial
offices, still shorter hours are demanded. An interesting question, for the near future, is: whether there will be a strong
demand for a shorter work week, without reduction in the weekly wage? The recent relatively high unemployment rates
have stimulated interest in increasing employment by this device. There is nothing in these statutes which enjoins that
these working hours could be changed only by mutual agreement. It is the function of the management of an establishment
to adjust or vary their hours of work, within the limits prescribed by law.78

It is not the policy of the legislation to leave to mutual agreement, the determination of such vital matters as daily and
weekly working hours and holidays and over-time, for in a factory or establishment, where labour is not so well-organised,
it is possible to obtain agreements to adverse working conditions, due to pressures of economic necessity. This would be
contrary to public policy. But within the prescribed limits, the management has the right to alter the period of work,
provided it gives the necessary intimation of the change, as required by the Standing Orders and other provisions of law
applicable to it.79 In May & Baker, the working hours of the company were from 9 am to 5 pm, with three rest intervals-
one hour for lunch, 15 minutes for the morning tea, and 15 minutes for the afternoon tea. The tribunal changed these hours
to 9.30 am to 5 pm with one hour’s interval for lunch. Theoretically, there did not appear any reduction in the working
hours, but practically, there was one because the tribunal directed that instead of two intervals of 15 minutes each for tea,
which was supplied by the company to its workmen, it should see that tea is supplied to the workmen at their tables. The
Supreme Court, in appeal, noticed that the tribunal had, in fact, reduced the working hours by half an hour each day, as
obviously the workmen will take their time for tea, because they cannot do both-work and take tea, at the same time. In the
circumstances of the case, the reduction in the working hours was held to be unjustified.80

In BOAC, the company, which was an airlines concern, had, for the purpose of weekly hours of work, divided the
employees into two categories, viz, (i) office staff, with 36 working hours a week; and (ii) operational staff, with a working
week of 39-42 hours. Adjudicating upon the dispute relating to wages for overtime, in view of the special nature of the
work at the airport, the tribunal directed that the company was entitled to fix 48 hours per week, as normal duty ‘hours and
the payment for overtime work should be made to the workmen on the basis of work done beyond the normal duty hours of
48 hours in a week. In appeal, in view of the peculiar incidents of the airline industry, the problem of regulating the hours
of work, which are quite different from those obtaining in any other establishment, the Supreme Court held that the
direction of the tribunal, taking 48 hours as the basis for payment for overtime work to the office staff, was not justified
and modified it to the effect that the office staff should be paid overtime work at the rates calculated on the basis of 36
hours a week. But the direction of the tribunal with respect to the operational staff, whose work was directly connected
with the arrival and departure of the aircraft of the company, was held to be reasonable.81

In Karamchand Thapar, the direction of the tribunal, that the subordinate staff should attend office half an hour before the
normal time, to be regulated by a system of rotation, subject to over-time wages being paid at the rate fixed by the award,
was affirmed by the Supreme Court holding that for a proper working of the office, it was necessary that sweepers and
peons should start their work sometime before the other employees come and should stay on for sometime after the other
employees depart, as having regard to the duties of the peons and sweepers, it was not practical to observe the same hours
for them as for the other employees.82 In Remington Rand, the working hours of the employees of Trivandrum and
Ernakulam, as prevalent, were from 9 am to 1 pm and from 2 pm to 5.30 pm on week days and from 9 am to 1 pm on
Saturdays. At Madras, the company’s workers worked only for five days in a week, from 9 am to 1 pm and from 1.45 pm
to 5.30 pm. The total working hours at Madras were, therefore, somewhat less than those at Trivandrum and Ernakulam.
The company had, by a circular, fixed the working hours from 9.30 am for clerks and 9 am for mechanics and peons. But,
in fact, the circular was not given effect to and the company was extracting half an hour’s work per day extra. The
direction of the tribunal to the company, to give effect to the circular and to have the clerical staff work from 9.30 am to 1
pm and from 2 pm to 5.30 pm on working days and from 9.30 am to 1 pm on Saturday, was affirmed by the Supreme
Court.83

In ONGC, the facts were: ONGC had a central workshop at Baroda. When the workshop was under construction and there
was insufficient accommodation at the site of the workshop, the office and administrative staff used to work in a shed, at a
distance of about two kilometers from the workshop. The working hours of the administrative staff, at that time, were from
10 am to 5 pm, with an interval of half an hour. These working hours lasted from December 1964 to June 1965, when, on
the completion of the construction at the site of the workshop, the administrative staff shifted there. Consequently, the
working hours of the administrative staff were fixed from 8 am to 5 pm, with an interval of an hour. The workmen claimed
that the working hours of the administrative staff should continue to be six-and-a-half hours per day and complained that
the fixation of eight hours per day, with effect from June 1965, was violative of s 9A of the Industrial Disputes Act. It was
further claimed that the fixation of eight hours per day, was not justified from the point of view of convenience and was
also at variance with the practice uniformly prevailing in other administrative offices of the workshops of the ONGC.
Though the tribunal took the view that s 9A was inapplicable, on the second contention, it held that the change in the hours
of work was not justified from the point of view of convenience and the hours should not have been changed from 6½

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hours, including the half an hour’s rest interval, to nine hours, including the rest interval of one hour. But, in appeal, the
Supreme Court held that the tribunal was not justified in interfering with the employers’ decision in fixing the hours of
work as the view of the tribunal, that reduction in the hours of work from 8 to 6½ hours, would not adversely affect the
work of the office, was not only not supported by any evidence on record, but was contrary to it.84

Work Load

Work load is a matter which relates to the ‘terms of employment’ or ‘conditions of labour’ of the workmen. Disputes quite
often arise out of the adjustment of work-loads. A detailed consideration of this subject would be out of place here, as it
involves industrial and economic problems, rather than legal questions. The legal questions with respect to work-loads
arise when the interpretation of some statutory provision is involved or the principles laid in some cases have to be applied.
In Remington Rand (supra), in connection with the dispute relating to work-loads, the employees alleged that the method
of calculation of work-load was arbitrary and the work-load fixed by agreement between the company and its employees in
Delhi and Lucknow, was seven mechanics per day or 150 mechanics per month, while the work-load at Trivandrum was
ten mechanics per day. The case of the management was that ten mechanics per day was not too much. The award of the
tribunal on the basis of the negotiations between the parties, directing the company to reduce the work-load to seven
mechanics per day or 150 mechanics per month, with a rider that ‘all the mechanics attended to, whether new or old,
whether under the service contract, or not, will be counted for the sake of work-load’, was affirmed by the Supreme Court.

Shifts

In Pfizer, the Standing Orders enabled the employer to introduce more shifts than one. The Supreme Court found that the
evidence on record clearly showed that the pattern of work in similar concerns in the area (Bombay, Poona and Baroda),
not confining only to the area in Greater Bombay, where the factory was situated, justified the introduction of a third shift.
Besides, the expert evidence adduced on behalf of the company also showed that the manufacture of a particular drug
involved a continuous process and the company was incurring loss and was not in a position to cope with the demand for
their products in the absence of the third shift. The evidence further showed that the quality and quantity of the particular
drug had suffered for want of the third shift. In view of this evidence, it was held that the company had made a clear case
for the introduction of three shifts. The plea of social disutility of night work was also rejected as being a theoretical
controversy in the context of the emergency in the country. Gajendragadkar J, observed:

In dealing with industrial adjudication, it would be undesirable to reach conclusions purely on doctrinaire or theoretical
consideration ... such a theoretical or doctrinaire approach has, in the context of today, lost some of its validity.

Referring to the question of the additional work-load being imposed on the employees by additional shifts, the court
observed that it may constitute a change in the conditions of service. It would, therefore, be open to the industrial tribunal
to examine the reasonableness of the change proposed to be made. Both the extreme contentions of the employer and of
the employees, ie, on the one hand, that the employer’s right under the Standing Orders to adopt more than one shift made
it a matter of entire and absolute discretion of the management and on the other hand, that the introduction of three shifts
would make a departure from the pattern prevailing in a particular industry, hence, the change could not be permitted, were
rejected. The learned judge held:

After all, the question must be considered in the light of the relevant facts adduced before the court, and in doing so, the
importance and the necessity of more production must be borne in mind.85

Promotion

Right to Promotion:

In England, the claim for promotion has been held to be connected with the terms of employment of the employee.86 But in
India, the judicial opinion is that promotion, in the course of industrial employment, is the prerogative of the
management.87 In Brooke Bond, a Constitutional Bench of the Supreme Court held that it is a matter of discretion of the
management, to select persons for promotion. In the words of Gajendragadkar J:

It may be recognised that there may be occasions when a tribunal may have to interfere with a promotion made by the
management, where it is felt that persons superseded have been so superseded on account of mala fides or victimisation.88

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But in Hindustan Lever, a three-judge Bench of the court, pointed out that the expression ‘terms of employment and
conditions of labour’, used in s 2(k), would ordinarily include not only the contractual terms and conditions, but also those
terms which are understood and applied by the parties in practice or habitually or by common consent, without ever being
incorporated in the contract. Accordingly, the court suggested that it was time to reconsider this archaic view of the laissez
faire days, that promotion is a management function, because the whole gamut of labour legislation is ‘to check, control
and circumscribe any uncontrolled managerial exercise of power, with a view to eschew the inherent arbitrariness in the
exercise of such functions.89 Whether a particular employee should be promoted from one grade to the higher grade,
depends not only on the length of his service, but also on his efficiency and other qualifications for the post, to which he
seeks to be promoted. And in the matter of promotion, the intimate knowledge of the higher authority, empowered to
promote, has a greater value. If a higher post is created in any department and a new man is to be appointed to it, even the
senior most workman working in such department, has got no right to claim promotion to it. Seniority only plays a small
part in the matter of promotion.90 In the absence of any mala fides, unfair labour practice or victimisation, the discretion of
the management cannot be questioned.91 Therefore, without recording a finding of mala fide, victimisation or unfair labour
practice, the adjudicator cannot arrogate to himself, the promotional function of the management.92 On the other hand, the
workers also want that the claim of the employees who are eligible for promotion, should be duly considered. If at a given
time, more than one person is eligible for promotion, seniority should be taken into account and should prevail, unless the
eligible persons are not equal in merit.93 Even though promotion or up-gradation is a managerial function, it must not be on
the subjective satisfaction of the management, but must be on some objective criteria. If there is no scope for any
promotion or upgradation or increase in salary, in a private undertaking, it may be conceivable to think that promotion is
not a condition of service. But if, under the Standing Orders, rules or conventions prevailing in an undertaking, there are
grades and scopes of upgradation or promotion and there are different scales of pay for different grades and, in fact,
promotion is given or upgradation is made, there should be no arbitrary or unjustified and unreasonable upgradation or
promotion of persons, superseding the claims of persons who may be equally or even more suitable.94 There should be no
arbitrary or unjust and unreasonable upgrading of some persons, superseding the claims of persons who may be equally or
even more suitable. The expression ‘victimisation’ must be given its normal meaning, of someone being the victim of an
unfair and arbitrary action.95

Automatic Promotion

A promotion generally necessitates a consideration of the comparative suitabilities of the eligible workmen and such a
selective process would require a consideration not only of the best performance of those eligible, but necessitates the
making of a comparative estimate of their skill, which could be of a technical nature, their personality, their capacity to
discharge heavier responsibilities and similar other factors. Promotion to higher grades, in a large majority of cases, results
not only in better wage-scales for the promoted workmen, but usually, if not invariably, necessitates a process of selection
from out of those eligible, because the higher post would carry a greater responsibility and would call for keener
capabilities. The labour court and industrial tribunals are hardly fit or equipped technically or otherwise, to take upon
themselves, the task of making such selections. The entrepreneur, on the other hand, is best equipped to discharge this
function. If the choice of the management is not mala fide and no element of victimisation has entered into it, there would
be no scope in such cases, for any interference, merely because those not selected are dissatisfied and discontented. If those
not suited to discharge the function of the higher posts, are promoted by industrial adjudicators, who do not possess the
requisite background, qualifying them to undertake the task of making the selections, industrial progress is bound to be
jeopardised, to the detriment of the national economy. In cases of this type, the management has no discretion and there is
no element of choice involved. Promotions in such cases cannot be characterised as a managerial function.96

The decision of the Supreme Court in River Navigation, illustrates the adjudication of a dispute relating to automatic
promotion. The industrial tribunal revised the B grade as Rs 90-6-138-7-194 (16 years) and recast the A grade as Rs 110-8-
174-10-244 (15 years). It then directed that clerks reaching the maximum of grade B, would automatically be promoted to
grade A. In an appeal against the award of the tribunal, the employer contended before the Supreme Court, that the A grade
consisted of head-clerks, a class doing comparatively more work than the class in the B grade, and that an automatic
promotion from B grade to A grade would be destructive of the efficient working of the department. But the court
observed that a perusal of the revised scales showed that a person takes 16 years to reach the maximum of the B grade.
Hence, a clerk who has worked in the C grade and after a number of years of service therein, passed to the B grade, after
16 years of service therein, could hope to pass into the A grade and after 15 were years therein, he could be promoted to
the two special grades. If, therefore, service in the A grade was of a similar nature as that of the B grade, the principle of
promotion by selection might work hardships for many experienced workers. The court further observed that the tribunal,
presumably on that basis, accepted the principle of automatic promotion from the B grade to the A grade. Further, from the
award, it was clear that only senior clerks were to be placed in the A grade and their work would consist mainly of
assisting the junior members, with their advice and instructions. In view of this position of the personnel in the A grade,
the court held that the tribunal was right in applying the principle of automatic promotion, instead of the principle of
promotion by selection. However, it was pointed out that ‘which principle will be applicable to a particular situation,

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depends upon the facts and circumstances of each case.97 In other words, it is a matter of discretion to be exercised by an
industrial adjudicator, whether to apply the principle of automatic promotion or that of promotion by selection, on the basis
of the facts of a particular case. In Hindustan LM Sabha, a Division Bench of the Bombay High Court has precisely stated
the law, in this connection, in the following words:

Promotions are normally granted on the basis of performance. Automatic promotion would, therefore, undermine the very raison
d’etre of promotions. There will be hardly any incentive left to put in good performance, if the promotions are taken for granted,
whatever the nature of the performance. Instead, what was in the circumstances necessary, was a monetary compensation in the
nature of increments, which the learned judge has rightly granted ... It is, therefore, both in the interest of the welfare of the
workmen, as well as in the larger interest of the company, that some additional incentive, in the form of a stagnation increment, is
granted to the workmen.98

In Hindustan Lever, the Supreme Court held that the demand of the workman, for his confirmation in the promoted post,
after the lapse of certain time, would be a dispute connected with the terms of employment of the workman. It would not
be a dispute relating to promotion.99

Adjudication of Promotions

Therefore, the question, whether a person has been superseded or not, or whether he is entitled to the promotion or not,
would constitute an ‘industrial dispute’, as the ‘difference’ or ‘dispute’, on this question, would be comprehended in the
words ‘employment or non-employment’. Hence, it would be within the jurisdiction of the adjudicator to consider the
respective merits of the workmen promoted by the employer.1 However, the promotion, primarily, being a management
function, cannot normally be interfered with by industrial adjudication but if it is shown that the management was actuated
by malicious considerations in promoting one employee in preference to another or in failing to promote an eligible
person, it would amount to an unfair labour practice. Thus, the industrial adjudication can interfere with this exclusive
function of the employer only if the promotion given to one and withheld from another, is mala fide or an act of unfair
labour practice or victimisation.2 In the absence of a clear proof of mala fides or discrimination on extraneous grounds, on
the part of the employer, it would be wholly inappropriate for any outside authority to attempt to weigh the relevant merits
of the individual who might be holding higher posts and those who are aspiring for the same. It would be laying down a
dangerous principle, if an outside authority were to substitute the internal authority, in matters of promotion. Any such
attempt on the part of the outside authority, is likely to foster a spirit of distrust, among the employees, in the capacity and
authority of the employer to administer fairly and effectively the affairs of his establishment and to maintain discipline. In
the absence of a finding of mala fide or victimisation of a workman, for trade union activities, or an unfair labour practice,
the industrial tribunals, therefore, cannot arrogate to themselves, the promotional function of the management.3 Therefore,
when mala fide, unfair labour practice or victimisation is alleged by the workmen, the adjudicator will have to inquire into
the allegation.4 If he finds that the promotions in question, have been made so that they are unjustified on anyone of the
above-mentioned grounds, the proper course for him is to set aside the promotions and ask the employer to consider the
cases of the superseded employees and decide for himself, whom to promote, after considering the records of all the
employees worth consideration, except of course, the person whose promotion has been set aside. In other words, where
the tribunal finds that some workers are being superseded on account of mala fides or victimisation, it may have to cancel
the promotions made by the employer.5 But even after a finding of mala fides or victimisation, it is not the function of a
tribunal to consider the merits of the various employees itself and then to decide whom to promote.6 An award interfering
with the promotion of a workman, without giving notice to him, would be invalid inasmuch as it would be violative of the
rules of natural Justice.7

In case, as a result of the award of the tribunal, the promotion of one person affects the status of another person, that other
person must be impleaded as a party to the proceedings and should be given an opportunity of being heard before an
award, adverse to him, is made.8 It is established law that a pendency of disciplinary proceedings against a workman, does
not create a bar to his being considered for promotion. In such a situation, the proceedings for promotion in connection
with the delinquent workman, are to be kept in a sealed cover, to be opened after the disciplinary proceedings are over and
the recommendations of the promoting authority are to be worked out, depending upon the outcome of the disciplinary
proceedings. Once an employee is promoted with effect from a retrospective date, on being completely exonerated, he
cannot be deprived of the pay and the other benefits, to which he would have been entitled, had he, in fact, been promoted
to the said post on the date from which, retrospectively, he had been subsequently promoted. Any condition imposed to the
effect, that the employee would not be entitled to the pay and allowances arising from the promotion, would be illegal and
unsustainable.9 Where a workman, having been promoted to a higher grade post and placed on probation, is not confirmed
in the promotion position, on the ground of unsatisfactory performance, no inquiry will be required for refusing the
confirmation in the promotion post.10

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The payment of backwages or arrears of salary of the employee, in a case of retrospective promotion, where the case of the
employee has been considered after the completion of a disciplinary proceeding, is at the discretion of the disciplinary
authority, depending upon the ultimate result of the disciplinary proceeding. If the employee has been completely
exonerated and there is no blemish whatsoever, and he is not visited with any penalty, even that of censure, he has to be
given the benefit of the salary, from the date on which he would have been normally promoted, but for the disciplinary
proceedings. In other cases, where the promotion is given with retrospective effect, after the conclusion of a departmental
inquiry, but where there are other factors, such as dragging of the proceedings by the delinquent, exoneration because of
technical defects or non-proving of charges due to peculiar circumstances, the question of whether backwages are to be
paid, has to be determined by the competent authority, in the light of the facts and circumstances of the case. The grant of
backwages is not intrinsically inherent in a retrospective promotion. However, when no punishment is visited and there is
no other factor concomitant, the employee is entitled to full backwages. Where a promotion is denied illegally and later on
a notional promotion is given, with retrospective effect, without financial benefits, it would be arbitrary, because ‘no one
can be penalised for no fault of his and the employer cannot take advantage of an illegal action, on his part. However, the
claim of a workman of being considered for the next higher post, from the date his junior was considered for the
promotion, was held to be not tenable, as the latter had become junior to him in 1985. But the plea of the workman that his
case for the promotion should be considered if promotees of 1985, or thereafter, had been considered for the promotion,
was accepted by the court. In such a case, the workman should also have been considered from the date his juniors were
considered. In Mcleod & Co, the facts disclosed that the company was having a practice of re-employing senior, retired
clerks, at reduced salaries. Adjudicating the dispute raised by workmen against the practice, on the ground that such re-
employment hampered the prospects of junior employees, the tribunal directed the employer to stop re-employment of
retired clerks, in the categories of clerks above ‘C’ grade. This award was affirmed by the Supreme Court, in appeal.11

Burden of Proof

In case workmen allege mala fides, unfair labour practice or victimisation, they have to prove the allegations by adducing
satisfactory evidence, before the tribunal. It would not be sufficient barely to make these allegations or aver that the
relations between the employer and the employees have been strained on account of the employees being the members of a
trade union. The evidence led by the parties on the question of mala fides, etc, has to be considered by the tribunal before
recording its conclusions. If the tribunal records its findings without considering the relevant evidence or its conclusions
are based on extraneous or irrelevant considerations or on no evidence, such conclusions will be perverse and the resulting
award will be liable to be quashed.12

2 Guest Keen Williams Ltd v PJ Sterling (1959) 2 LLJ 405 [LNIND 1959 SC 127], 415 (SC) : AIR 1959 SC 1279 [LNIND 1959 SC
127]: [1960] 1 SCR 348 [LNIND 1959 SC 127], per Gajendragadkar J.
3 Hindustan Antibiotics Ltd v Workmen (1967) 1 LLJ 114 [LNIND 1966 SC 319], 131 (SC) : AIR 1967 SC 948 [LNIND 1966 SC
319], per Subba Rao CJI.
4 AG Kher v Atlas Copco (India) Ltd (1992) 1 LLJ 423, 428 (Bom), per S Manohar J.
5 Gokulananda Tripathy v Mgmt of Sundardas D Hans Raj (1975) 1 LLJ 133, 135 (Ori) (DB), per RN Misra J.
6 Assam Oil Co Ltd v Workmen (1960) 1 LLJ 587 [LNIND 1960 SC 108], 590 (SC), per Gajendragadkar J.
7 Re African Assn Ltd and Alien (1910) 1 KB 396.
8 Sri Assaram Raibhah Dhage v Executive Engineer (1990) 1 LLJ 48 -49 (Bom) (DB), per Lentin J.
9 Municipal Corpn of Gr Bombay v PS Malvenkar (1978) 2 LLJ 168 [LNIND 1978 SC 157], 172 (SC) : AIR 1978 SC 1380 [LNIND
1978 SC 157]: (1978) 3 SCC 78 [LNIND 1978 SC 157], per Jaswant Singh J.
10 Divl Supdt, Southern Rly v Sasidharan 1978 Lab IC 1042, 1044 (Ker) (DB), per Gopalan Nambiyar CJ.
11 Gujarat Steel Tubes Ltd v GST Mazdoor Sabha (1980) 1 LLJ 137 [LNIND 1979 SC 464], 149-50 (SC) : AIR 1980 SC 1896
[LNIND 1979 SC 464]: (1980) 2 SCC 593 [LNIND 1979 SC 464], per Krishna Iyer J.
12 State of Bihar v Gopi Kishore Prasad AIR 1960 SC 689 [LNIND 1959 SC 209], 692, per Sinha CJI.
13 Maharashtra SRTC v Madhukar Narayanarao (1969) 2 LLJ 619, 629 (Bom) (DB), per Abyankar J.
14 Naihati Electric Supply Co v State of West Bengal (1974) 2 LLJ 179, 183 (Cal), per Debiprasad Pal J.

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15 Sehkari Upbhokta Wholesale Bhandar Ltd v Pannalal Bordia (1988) 2 LLJ 123, 126 (Raj), per Lodha J.
16 RB Diwan Badri Das v IT (1962) 2 LLJ 366 [LNIND 1962 SC 293], 371 (SC), per Gajendragadkar J.
17 Gujarat Steel Tubes Ltd v GST Mazdoor Sabha (1980) 1 LLJ 137 [LNIND 1979 SC 464], 154 (SC), per Krishna Iyer J.
18 Hindustan Steel Ltd v AK Roy (1970) 1 LLJ 228 [LNIND 1969 SC 497], 232 (SC), per Shelat J.
19 Siddhanath K Kadam v DD & Co Pvt Ltd 1977 Lab IC 602, 604 (Bom) (DB), per Deshmpande J.
20 RB Diwan Badri Das v IT (1962) 2 LLJ 366 [LNIND 1962 SC 293], 370 (SC), per Gajendrajadkar J.
21 UB Dull & Co Pvt Ltd v Workmen (1962) 1 LLJ 374 [LNIND 1962 SC 33], 376 (SC), per Wanchoo J.
22 Assam Oil Co Ltd v Workmen (1960) 1 LLJ 587 [LNIND 1960 SC 108], 591 (SC), per Gajendragadkar J.
23 Bombay Labour Union v Intnl Franchises Pvt Ltd (1966) 1 LL J 417, 419 (SC), per Wanchoo J.
24 Barsi Light Rly Co Ltd v KN Joglekar (1957) 1 LLJ 243 [LNIND 1956 SC 104], 247 (SC), per SK Das J.
25 West Bengal SEB v Shri Desh Bendhu Ghosh (1985) 1 LLJ 373 [LNIND 1985 SC 64], 375, per Chinnappa Reddy J.
26 Binny Ltd v PO, LC (1986) 1 LLJ 237 (Kant), per Rama Jois J.
27 Davis Contractors Ltd v Fareham UDC (1956) AC 696, per Radcliffe.
28 Anand Bihari v Rajasthan SRTC 1991 Lab IC 494 (SC) : AIR 1991 SC 1003 : (1991) 1 SCC 731, per Sawant J.
29 Divisional Controller MSRTC v PC Kamble (2002) 3 LLN 193 (Bom), per Kochar J.
30 Buckingham & Carnatic Co Ltd v Workmen (1951) 2 LLJ 314 (LAT).
31 Assam Oil Co Ltd v Workmen (1960) 1 LLJ 587 [LNIND 1960 SC 108], 590 (SC) : AIR 1960 SC 1264 [LNIND 1960 SC 108], per
Gajendragadkar J.
32 UB Dutt & Co Pvt Ltd v Workmen (1962) 1 LLJ 374 [LNIND 1962 SC 33] (SC) : AIR 1963 SC 411 [LNIND 1962 SC 33], per
Wanchoo J.
33 Gujarat MDC v PH Brahmbhat (1974) 1 LLJ 97 [LNIND 1973 SC 318], 102-03 (SC) : AIR 1974 SC 136 [LNIND 1973 SC 318],
per Jaganmohan Reddy J.
34 Gujarat Steel Tubes Ltd v GST Mazdoor Sabha (1980) 1 LLJ 137 [LNIND 1979 SC 464], 150-51 (SC) : AIR 1980 SC 1896
[LNIND 1979 SC 464]: (1980) 2 SCC 593 [LNIND 1979 SC 464], per Krishna Iyer J.
35 Ravindra Kumar Misra v UP State Handloom Corpn Ltd 1988 Lab IC 56, 61 (SC), per Ranganath Misra J.
36 Assam Oil Co Ltd v Workmen (1960) 1 LLJ 587 [LNIND 1960 SC 108] (SC), per Gajendragadkar J.
37 Chartered Bank v CB Employees Union (1960) 2 LLJ 222 [LNIND 1960 SC 106], 226 (SC), per Wanchoo J.
38 Siddhanath K Kadam v Dadajee Dhackjee and Co Pvt Ltd 1977 Lab IC 602, 604 (Bom) (DB), per Deshpande J.
39 UB Dutt & Co Pvt Ltd v Workmen (1962) 1 LLJ 374 [LNIND 1962 SC 33] (SC) : AIR 163 SC 411 : 1962 Supp (2) SCR 822, per
Wanchoo J.
40 Jabalpur Electric Supply Co Ltd v SP Srivastava (1962) 2 LLJ 216 [LNIND 1962 SC 246] (SC) : AIR 1966 SC 1288 [LNIND
1962 SC 246], per Das Gupta J.
41 Murugan Mills Ltd v IT (1965) 1 LLJ 422 [LNIND 1964 SC 320] (SC) : AIR 1966 SC 1051 [LNIND 1965 SC 433], per Wanchoo
J.
42 Utkal Machinery Ltd v Shanti Patnaik (1966) 1 LLJ 398 [LNIND 1965 SC 277], 400 (SC), per Ramaswami J.
43 Tata Oil Mills Co Ltd v Workmen (1966) 2 LLJ 602 [LNIND 1965 JNK 9] (SC) : AIR 1966 SC 1672 [LNIND 1963 SC 46], per
Gajendragadkar J.
44 Agra Electric Supply Co Ltd v Alladin (1969) 2 LLJ 540 [LNIND 1969 SC 261], 548 (SC) : AIR 1970 SC 512 [LNIND 1969 SC
261]: (1969) 2 SCC 598 [LNIND 1969 SC 261], per Shelat J.
45 Jagdish Prasad v Sachiv Zila Ganna Committee 1986 Lab IC 1377 (SC), per BC Ray J.
46 Brooke Bond (India) Pvt Ltd v Chandranath Choudhary (1969) 2 LLJ 387 [LNIND 1968 SC 255] (SC), per Shelat J.
47 Tata Engg & Loco Co Ltd v SC Prasad (1969) 2 LLJ 799 [LNIND 1969 SC 114], 806-08 (SC) : (1969) 3 SCC 372 [LNIND 1969
SC 114], per Shelat J.
48 Gujarat MDC v PH Brahmbhatt (1974) 1 LLJ 97 [LNIND 1973 SC 318], 102-03 (SC) : AIR 1974 SC 136 [LNIND 1973 SC 318]:
(1974) 3 SCC 601 [LNIND 1973 SC 318], per Jaganmohan Reddy J.
49 Municipal Corpn of Gtr Bombay v PS Malvenkar (1978) 2 LLJ 168 [LNIND 1978 SC 157] (SC) : AIR 1978 SC 1380 [LNIND
1978 SC 157]: (1978) 3 SCC 78 [LNIND 1978 SC 157], per Jaswant Singh J.

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50 Gujarat Steel Tubes Ltd v Gujarat Steel Tubes Mazdoor Sabha (1980) 1 LLJ 137 [LNIND 1979 SC 464] (SC) : AIR 1980 SC 1896
[LNIND 1979 SC 464]: (1980) 2 SCC 593 [LNIND 1979 SC 464], per Krishna Iyer J.
51 MK Ravi v MD, Kerala State Bamboo Corpn 1987 Lab IC 355, 357 (Ker), per Menon J.
52 Ruby General Insurance Co Ltd v PP Chopra (1970) 1 LLJ 63 [LNIND 1969 SC 333] (SC) : (1969) 3 SCC 653 [LNIND 1969 SC
334], per Shelat J.
53 Hindustan Steel Ltd v AK Roy (1970) 1 LLJ 228 [LNIND 1969 SC 497], 232 (SC) : AIR 1970 SC 1401 [LNIND 1969 SC 497]:
(1969) 3 SCC 513 [LNIND 1969 SC 497], per Shelat J.
54 Bihar SRTC v State of Bihar (1970) 2 LLJ 138 [LNIND 1970 SC 53] (SC) : AIR 1970 SC 1217 [LNIND 1970 SC 53]: (1970) 1
SCC 490 [LNIND 1970 SC 53], per Shelat J.
55 Workmen of Sudder Office Cinnamara v Mgmt of Sudder Officer (1971) 2 LLJ 620 [LNIND 1971 SC 493] (SC) : (1972) 4 SCC
746 [LNIND 1971 SC 493], per Vaidialingam J.
56 Workmen of Motipur Sugar Factory v Motipur Sugar Factory (1965) 2 LLJ 162 [LNIND 1965 SC 109] (SC) : AIR 1965 SC 1803
[LNIND 1965 SC 109]: (1965) 3 SCR 588 [LNIND 1965 SC 109], per Wanchoo J.
57 Tata Engineering and Locomotive Co Ltd v SC Prasad (1969) 2 LLJ 799 [LNIND 1969 SC 114]-808 (SC) : (1969) 3 SCC 372
[LNIND 1969 SC 114], per Shelat J.
58 V Sadasivan v Binny Ltd (1998) 1 LLN 235 (Mad) (DB), per Raju J.
59 (1960) 1 LLJ 587 [LNIND 1960 SC 108] (SC), per Gajendragadkar J.
60 (1978) 2 LLJ 168 [LNIND 1978 SC 157] (SC), per Jaswam Singh J.
61 (1980) 2 LLJ 137 (SC), per Krishna Iyer J.
62 State of Bihar v Gopi Kishore Prasad AIR 1960 SC 689 [LNIND 1959 SC 209], per Sinha CJI.
63 Chandra Prakash v State of Uttar Pradesh (2001) 1 LLN 50 (SC).
64 Dainik ‘Navbharat’ v AP Gupta (1999) 3 LLN 255 (MP), per Kulshreshtha J.
65 Air India Corpn v VA Rebellow (1972) 1 LLJ 501 [LNIND 1972 SC 128] (SC) : AIR 1972 SC 1343 [LNIND 1972 SC 128]:
(1972) 1 SCC 814 [LNIND 1972 SC 128], per Dua J.
66 Binny Ltd v Workmen 1973 Lab IC 1119 (SC), per Grover J.
67 L Michael v Johnson Pumps Ltd (1975) 1 LLJ 262 [LNIND 1975 SC 55], 266 (SC) : AIR 1975 SC 661 [LNIND 1975 SC 55]:
(1975) 1 SCC 574 [LNIND 1975 SC 55], per Krishna Iyer J.
68 Siddhanath K Kadam v Dadajee Dhackjee & Co Pvt Ltd 1977 Lab IC 602, 605-6 (Bom) (DB), per Deshpande J.
69 Mgmt of the Arya Vaidya Pharmacy (Coimbatore) Ltd v Secretary, Arya Vaidya Pharmacy Employees’ Union 1982 Lab IC 261 -62
(Ker), per Bhaskaran J.
70 Rable v Green (1985) 2 QB 315.
71 Assam Chah Karamachari Sangha v PO, LC 1981 Lab IC 1026, 1031 (Gau), per Hansaria J.
72 Chandulal v Mgmt of Pan American World Airways Inc (1985) 2 LLJ 181 [LNIND 1985 SC 138]-82 (SC) : AIR 1985 SC 1128
[LNIND 1985 SC 138]: (1985) 2 SCC 727 [LNIND 1985 SC 138], per Ranganath Misra J.
73 Kamal K Lakshman v Mgmt of Pan American World Airways Inc (1987) 1 LLJ 107 [LNIND 1986 SC 491], 109 (SC) : AIR 1987
SC 229 [LNIND 1986 SC 491]: (1987) 1 SCC 146 [LNIND 1986 SC 491], per Ranganath Misra J.
74 Amarjeet Singh v Punjab National Bank (1986) 2 LLJ 354, 371-72 (Del) (DB) : (1987) 54 FLR 261, per HL Anand J.
75 D Seeralan v Mgmt of Facit Asia Ltd 1991 Lab IC 362, 366 (Mad) (DB), per Nainar Sundram J.
76 Jagatpal Dhuria v Madhav Corpn (2001) 3 LLN 165 (Bom), per Dr Chandrachud J.
77 Unit Trust of India v T Bijaya Kumar (1993) 1 LLJ 240 [LNIND 1992 SC 508], 242 (SC) : (1992) 3 SCALE 100.
78 Governing Council of KMIO v Dr Pandurang Gadwalkar (1993) 1 LLJ 308 [LNIND 1992 SC 765], 310 (SC), per NP Singh J.
79 Express Newspapers Ltd v LC (1964) 1 LLJ 9 [LNIND 1963 SC 303], 11 (SC), per Das Gupta J.
80 Stanley Mendex v Giovanola Binny Ltd (1968) 2 LLJ 470, 472 (Ker), per Balakrishna Eradi J.
81 State of Punjab v Dharam Singh AlR 1968 SC 1210, 1212, per Bachawat J.
82 Giovanola Binny Ltd v IT (1970) 1 LLJ 450, 452 (Ker), per Balakrishna Eradi J.
83 Utkal Machinery Ltd v Santi Patnaik (1966) 1 LLJ 398 [LNIND 1965 SC 277] (SC) : AIR 1966 SC 1051 [LNIND 1965 SC 433],
per Ramaswami J.

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84 Mgmt of Brooke Bond India Pvt Ltd v YK Gautam (1973) 2 LLJ 454 [LNIND 1973 SC 244] (457) (SC) : AIR 1973 SC 2634
[LNIND 1973 SC 244]: (1974) 3 SCC 451 [LNIND 1973 SC 244], per Jaganmohan Reddy J.
85 Gujarat MDC v PH Brahmbhatt (1974) 1 LLJ 97 [LNIND 1973 SC 318], 102-03 (SC) : AIR 1974 SC 136 [LNIND 1973 SC 318]:
(1974) 3 SCC 601 [LNIND 1973 SC 318], per Jaganmohan Reddy J.
86 Sunilkumar SP Sinha v Indian Oil Corpn Ltd 1983 Lab IC 1139 [LNIND 1982 GUJ 114], 1145, per Nanavati J.
87 Shamsher Singh v State of Punjab (1974) 2 LLJ 465 [LNIND 1974 SC 246], 479 (SC), per Ray CJI.
88 Prakash Mishra v Sports Authority of India (1990) 2 LLJ 416, 423 (MP) (DB) : 1989 MPJR 34, per TN Singh J.
89 K Veerasha v Executive Officer, Feroke Panchayat (1964) 1 LLJ 573 (Ker) (DB), per Madhavan Nair J.
90 Ravindra Kumar Misra v UP State Handloom Corpn Ltd 1988 Lab IC 56, 62 (SC), per Ranganath Misra J.
91 State of Gujarat v Sharadchandra Manohar Neve (1988) 2 LLJ 97 -98 (SC), per Ranganath Misra J.
92 V Durairaj v Neyvelli Lignite Corpn Ltd (1964) 2 LLJ 158, 159 (Mad), per Veeraswami J.
93 Workmen of Indian Oil Corpn Ltd v Mgmt 1982 Lab IC 155, 157 (Pat) (DB), per LM Sharma J.
94 Behar Journals Ltd v Ali Hasan (1959) 2 LLJ 536 (Pat) (DB), per Choudhary J.
95 Agra Electric Suply Co. Ltd. v Sri Alladdin (1969) 2 LLJ 540 [LNIND 1969 SC 261] (SC) : AIR 1970 SC 512 [LNIND 1969 SC
261]: (1969) 2 SCC 598 [LNIND 1969 SC 261], per Shelat J.
96 Western India Match Co Ltd v Workmen (1973) 2 LLJ 403 [LNIND 1973 SC 241], 407, per Dwivedi J.
97 This comment is based on the author’s personal knowledge, as he was present in the court throughout the hearing of this appeal and
he was not holding any brief for either side.
98 Life Insurance Corporation of India v Raghavendra S Kulkarni (1998) 1 LLN 56 (SC) : AIR 1998 SC 327 : (1997) 8 SCC 461 :
(1998) 2 LLJ 1161.
1 Dipti Prakash Banerji v SNBNC for Basic Sciences (1999) 2 LLN 44 (SC) : AIR 199 SC 983 : (1999) 3 SCC 60 [LNIND 1999 SC
131] : (1999) 1 LLJ 1054 [LNIND 1999 SC 131].
2 VP Ahuja v State of Punjab (2000) 2 LLN 47 (SC) : AIR 2000 SC 1080 [LNIND 2000 SC 2073]: (2000) 3 SCC 239 [LNIND 2000
SC 2073] : (2000) 1 LLJ 1099 [LNIND 2000 SC 430].
3 Parimala v Banking Service Rectt Board (2001) 4 LLN 589 (Kant), per Shetty J.
4 North-West Karnataka RTC v JF Awardai (2002) 2 LLN 207 (Kant), per Gururajan J.
5 Bharat Fritz Werner Ltd v CG Patil (2002) 2 LLN 209 (Kant), per Gururajan J.
6 Pavanendra N Verma v SGPGIM Sciences (2002) 1 LLN 45, 51 (para 28) (SC) : (2002) 1 SCC 520 [LNIND 2001 SC 2509], per
Ruma Pal J.
7 ABT Parcel Service v PO, I Addl LC (2002) 3 LLN 580 (Mad), per Rajan J.
8 Davender Arora v Mgmt of Albert and David Ltd (2002) 3 LLN 660 (Del), per Sarin J.
9 Divisional Controller, Karnatka SRTC v CR Kuppalli (2002) 4 LLN 820 (Kant) (DB), per Srinivasa Reddy J.
10 Kusum Products v State of West Bengal (2002) 4 LLN 131 (Cal), per Kundu J.
11 Navinchandra S Shah v Ahemdabad Coop Deptt Stores (1979) 1 LLJ 60 [LNIND 1977 GUJ 35] (Guj) (DB), per DA Desai J.
12 Hindustan Steel Ltd v State of Orissa (1977) 1 LLJ 1 [LNIND 1976 SC 330], 3-4 (SC) : (1976) 4 SCC 222 [LNIND 1976 SC 330],
per Gupta J.
13 Pyarchand KP Bidi Factory v Onkar Laxman Thenge AIR 1970 SC 823 [LNIND 1968 SC 299], 827, per Shelat J.
14 Bredan Dunne Ltd v Fitzpatrick 1958 IR 29, 37.
15 British Broadcasting Corpn v Hearn (1978) 1 All ER 116, 118 (CA).
16 Madras Gymkhana Club Employees Union v Gymkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292] (SC), per Hidayatullah J.
17 Ram Nath Koeri v Lakshmi Devi Sugar Mills (1956) 2 LLJ 11, 18 (All) (DB), per Mootham CJ.
18 Mgmt of Borokai Tea Estate v Workmen 1971 Lab IC 1217 (Ass & Nag) (DB), per Goswami CJ.
19 Mgmt of Safdarjung Hospital v Kuldip Singh Sethi (1970) 2 LLJ 266 [LNIND 1970 SC 180], 276-77 (SC), per Hidayatullah CJI.
20 Ram Nath Koeri v Lakshmi Devi Sugar Mills (1956) 2 LLJ 11, 18 (All) (DB), per Mootham CJ.
21 Brendan Dunnae Ltd v Fitzpatriek (1958) IR 29, 37.
22 Scala Ballroom (Wolver Hampton) Ltd v Ratcliffe (1958) 1 WLR 1057.

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23 NJ Chavan v PD Sawarkar (1958) 1 LLJ 36, 40 (Bom) (DB), per Tendolkar J.

24 Kays Construction Co Pvt Ltd v Workmen (1958) 2 LLJ 660 [LNIND 1958 SC 124] (SC), per Gajendragadkar J.
25 Shankar Textile Mills v Workmen (1963) 2 LLJ 68 [LNIND 1962 SC 344] (SC), per Gajendragadkar J.
26 Ispahani Ltd, Calcutta v Ispahani Employees Union (1959) 2 LLJ (SC), per Wanchoo J.
27 Hindustan Lever v Workmen (1974) 1 LLJ 94 [LNIND 1973 SC 307] (SC), per Dwivedi J.
28 (1961) 1 LLJ 649 [LNIND 1960 SC 343]-51 (SC), per Gajendragadkar J.
29 Sone Valley Portland Cement Co Ltd v Workmen (1962) 1 LLJ 218 [LNIND 1962 SC 31], 229 (SC), per Wanchoo J.
30 Hindustan Lever Ltd v Workmen (1974) 1 LLJ 94 [LNIND 1973 SC 307] (SC) : AIR 1974 SC 17 [LNIND 1973 SC 307]: (1974) 3
SCC 510 [LNIND 1973 SC 307], per Dwivedi J.
31 Rohtas Industries Ltd v Brijnandan Pandey (1956) 2 LLJ 444 [LNIND 1956 SC 77] (SC), per SK Das J.
32 Gramophone Co Ltd v Workmen (1964) 2 LLJ 131 [LNIND 1964 SC 114] (SC), per Wanchoo J.
33 Hindustan Aeronautics Ltd v The Workmen (1975) 2 LLJ 336 [LNIND 1975 SC 249] (SC) : AIR 1975 SC 1737 [LNIND 1975 SC
573]: (1975) 4 SCC 679 [LNIND 1975 SC 573], per Untwalia J.
34 Nikhil Chandra Dey v Steel Authority of India Ltd (1988) 2 LLJ 419 -20 (Cal), per UC Banerjee J.
35 State Bank of India Staff Registered Congress v Union of India 1992 Lab IC 1062 [LNIND 1991 PNH 235], 1067 (P&H), per
Mongia J.
36 A Bouzourou v Ottaman Bank AIR 1930 PC 118, per Thankerton J.
37 Automotive Manufactures Ltd v Nanalal P Vakharia 1977 Lab IC 1188 [LNIND 1976 GUJ 27] (Guj) (DB), per Thakkar CJ.
38 JK Dave v State of Gujarat (1990) 1 LLJ 95 -96 (Guj), per Ravani J.
39 Hindustan Lever Ltd v Workmen (1974) 1 LLJ 94 [LNIND 1973 SC 307] (SC), per Dwivedi J.
40 L Raghupathy v Addl CWC (1991) 1 LLJ 364 [LNIND 1990 MAD 34], 367 (Mad) (DB) : AIR 1995 SC 1056 [LNIND 1995 SC
122]: (1995) 3 SCC 270 [LNIND 1995 SC 122] : (1995) 2 LLJ 849 [LNIND 1995 SC 122], per Nainar Sundaram J.
41 Syndicate Bank Ltd v Workmen (1966) 1 LLJ 440 [LNIND 1965 SC 298] (SC), per Ramaswami J.
42 Bareilly Electricity Supply Co Ltd v Sirajuddin (1960) 1 LLJ 556 [LNIND 1960 SC 83]-57 (SC), per Gajendragadkar J.
43 State of Madhya Pradesh v SS Kourav 1995 Lab IC 1574 (SC).
44 Carvan Goods Carriers Pvt Ltd v LC (1977) 2 LLJ 199, 210 (Mad), per Mohan J.
45 PN Bahulayan v Plantation Corpn of Kerala 1986 Lab IC 1707, 1710 (Ker), per Sivaraman Nair J.
46 Damodar Prasad v Rajasthan SRTC (2001) 4 LLN 440 (Raj) (DB), per Dr Lakshmanan CJ.
47 JK Dave v State of Gujarat (1990) 1 LLJ 95, 96 (Guj), per Ravani J.
48 National Buildings Construction Corpn Ltd v MK Jain 1981 Lab IC 62, 67 (Del), per Anand J.
49 Nikhil Chandra Dey v Steel Authority of India (1988) 2 LLJ 419 -20 (Cal).
50 Canara Banking Corpn Ltd v U Vittal (1963) 2 LLJ 354 [LNIND 1963 SC 125] (SC), per Das Gupta J.
51 Om Parkash Sharma v State of Rajasthan (1992) 1 LLJ 422 -23 (Raj), per NC Sharma J.
52 Syndicate Bank Ltd v Workmen (1966) 1 LLJ 440 [LNIND 1965 SC 298] (SC), per Ramaswami J.
53 Canara Banking Corpn Ltd v U Sridhar Rao CA No of 1962, decided on 22 April 1963 (unreported).
54 JK Dave v State of Gujarat (1990) 1 LLJ 95, 97 (Guj), per Ravani J.
55 Hindustan Lever Ltd v Workmen (1974) 1 LLJ 94 [LNIND 1973 SC 307] (SC), per Dwivedi J.
56 Shankar S Ambedkar v Shakti Insulated Wires Pvt Ltd (1988) 2 LLJ 416 (Bom) (DB), per Vaze J.
57 Syndicate Bank Ltd v Workmen (1966) 1 LLJ 440 [LNIND 1965 SC 298] (SC), per Ramaswami J.
58 PN Bhulayan v Plantation Corpn of Kerala 1966 Lab IC 1707, 1709-10 (Ker), per Sivaraman Nair J.
59 Madhuband Colliery v Workmen (1966) 1 LL J738, 741 (SC), per Ramaswami J.
60 Canara Banking Corpn Ltd v U Sridhar Rao CA No 756 of 1962 (22-4-1963).
61 National Radio Corpn v Workmen (1963) 1 LLJ 282 [LNIND 1963 SC 1], 285 (SC), per Gajendragadkar J.
62 VSN Raju v Non-Conventional EDC Ltd (1990) 1 LLJ 163, 166 (AP), per Jagannadha Rao J.

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63 Union of India v HN Kirtania (1989) 2 LLJ 585 [LNIND 1989 SC 337] (SC).
64 Kundan Sugar Mills v Ziya Uddin (1960) 1 LLJ 266 [LNIND 1960 SC 31] (SC), per Subba Rao J.
65 Obeetee Pvt Ltd, Mirzapur v State of UP 1986 Lab IC 829, 832-33 (All), per BD Agarwal J.
66 Automotive Manufactures Ltd v Nandlal P Vakharia 1977 Lab IC 1188 [LNIND 1976 GUJ 27] (Guj) (DB), per Thakkar J.
67 Caravan Goods Carriers Pvt Ltd v LC (1977) 2 LLJ 199, 201 (Mad), per Mohan J.
68 Boots Pure Drug Co (I) Ltd v KC Bastian (1977) 2 LLJ 113, 115 (Ker) (DB), per Govindan Nair CJ.
69 Mgmt of Central Fisheries Ltd v LC 1975 Lab IC 634 -35 (Mad) (DB), per Ramaprasada Rao J.
70 Madhuband Colliery Ltd v Workmen (1966) 1 LLJ 738 [LNIND 1965 SC 303] (SC), per Ramaswami J.
71 Dr KSR Datta v TTD 1989 Lab IC 648 (AP), per MN Rao J.
72 New India Flour Mills v Sixth Industrial Tribunal (1963) 1 LLJ 745, 750 (Cal), per Banerjee J.
73 First Flight Couriers Ltd v KCCGE Union (2001) 4 LLN 1221 (Kant), per Chinnappa J.
74 BDK Process Controls (P) Ltd v BM Sangha (2002) 1 LLN 288 (Kant), per Chandrasekharaiah J
75 New India Flour Mills v Sixth IT (1963) 1 LLJ 745, 750 (Cal), per Banerjee J.
76 Pyarchand Kesarimal Porwal Bidi Factory v Onkar L Thenge AIR 1970 SC 823 [LNIND 1968 SC 299], 825, per Shelat J.
77 Transport Corpn of India Ltd v State of Maharashtra 1993 Lab IC 507, 510 (Bom), per M Cazi J.
78 Workmen of Hindustan Shipyard Pvt Ltd v IT (1961) 2 LLJ 526, 531 (AP), per Jaganmohan Reddy J.
79 Section 9A. Infra.
80 May & Baker (India) Ltd v Workmen (1961) 2 LLJ 94 [LNIND 1961 SC 18], 96 (SC) : AIR 1967 SC 678 [LNIND 1961 SC 18]:
(1961) 2 FLR 594, per Wanchoo J.
81 Workmen of BOAC v British Overseas Airways Corpn (1962) 1 LLJ 257 [LNIND 1962 SC 51] (SC), per Gajendragadkar J.
82 Karamchand Thapar & Bros Ltd v Workmen (1964) 1 LLJ 429 [LNIND 1963 SC 178] (SC), per Das Gupta J.
83 Remington Rand of India Ltd v Workmen (1967) 2 LLJ 866 [LNIND 1967 SC 226] (SC) : AIR 1968 SC 224 [LNIND 1967 SC
425]: [1968] 1 SCR 168, per Mitter J.
84 Oil & Natural Gas Commission v The Workmen (1973) 1 LLJ 18 [LNIND 1972 SC 470] (SC) : AIR 1973 SC 968 [LNIND 1972
SC 470]: (1973) 3 SCC 535 [LNIND 1972 SC 470] : 1973 IC 233, per Dua J.
85 Pfizer Pvt Ltd, Bombay v Workmen (1963) 1 LLJ 543 [LNIND 1962 SC 400], 551-52 (SC) : AIR 1963 SC 1103 [LNIND 1962 SC
400]: [1963] Supp (2) SCR 627, per Gajendragadkar J.
86 R v ID Tribunal, exp QM College, University of London (1957) 2 All ER 776, per Lord Delvin.
87 Hindustan Lever Ltd v Workmen (1974) 1 LLJ 94 [LNIND 1973 SC 307] (SC), per Dwivedi J.
88 Brooke Bond (India) Pvt Ltd v Workmen (1963) 1 LLJ 256 [LNIND 1962 SC 251] (SC), per Gajendragadkar J.
89 Workmen of Hindustan Lever Ltd v Mgmt of Hindustan Lever Ltd 1984 Lab IC 1573, 1577 (SC) : (1984) 4 SCC 392 [LNIND 1984
SC 235] : [1985] 1 SCR 641 [LNIND 1984 SC 235], per Desai J.
90 All India RB Employees’ Assn v RBI (1965) 2 LLJ 175 [LNIND 1965 SC 146], 196 (SC), per Hidayatullah J.
91 Brooke Bond (India) Pvt Ltd v Workmen (1966) 1 LLJ 402 [LNIND 1965 SC 287] (SC), per Wanchoo J.
92 Hindustan Lever Ltd v Workmen (1974) 1 LLJ 94 [LNIND 1973 SC 307] (SC), per Dwivedi J.
93 Brooke Bond (India) Pvt Ltd v Workmen (1963) 1 LLJ 256 [LNIND 1962 SC 251]-57 (SC), per Gajendragadkar J.
94 Workmen of Williamson Magor & Co Ltd v Mgmt (1982) 1 LLJ 33 [LNIND 1981 SC 452], 38 (SC), per Baharul Islam J.
95 Ajudhiya SMM Sabha v Ajudhiya Sugar Mills 1983 Lab IC (NOC) 47 (All), per TS Misra J.
96 Anand S Misra v Indian Turpentine & Rosin Co 1977 Lab IC 584, 587 (All) (DB), per Yashoda Nandan J.
97 River Navigation Co Ltd v Workmen CA No 691 &692 (1967) (SC), per Subba Rao CJI.
98 Hindustan LM Sabha v Hindustan Lever Ltd 1990 Lab IC 950, 978 (Bom) (DB), per Sawant J.
99 Workmen employed by Hindustan Lever Ltd v Mgmt 1984 Lab IC 1573, 1575 (SC), per Desai J.
1 Upper Doab Sugar Mills Ltd v State of Uttar Pradesh (1962) 1 LLJ 1 (All), per Jagdish Sahai J.
2 Brooke Bond (India) Ltd v Workmen (1963) 1 LLJ 256 [LNIND 1962 SC 251]-57 (SC), per Gajendragadkar J.

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3 Hindustan Lever Ltd v Workmen (1974) 1 LLJ 94 [LNIND 1973 SC 307] (SC) : AIR 1974 SC 17 [LNIND 1973 SC 307]: (1974) 3
SCC 510 [LNIND 1973 SC 307], per Dwivedi J.
4 LH Sugar Factories & Oil Mills Pvt Ltd v State of UP (1961) 1 LLJ 686 (All), per SS Dhavan J.
5 Workmen of Williamson Magor & Co Ltd v Mgmt (1982) 1 LLJ 33 [LNIND 1981 SC 452], 38 (SC), per Baharul Islam J.
6 Brooke Bond (India) Pvt Ltd v Workmen (1966) 1 LLJ 402 [LNIND 1965 SC 287] (SC), per Wanchoo J.
7 Shyam Lalli Bir Singh 1973 Lab IC 957, 959 (Del), per Dalip Kapur J.
8 Jamwant Singh v State of Uttar Pradesh 1987 Lab IC 663, 659 (All), per VK Mehrotra J.
9 Amarendra Kumar Das v Orissa Forest Development Corpn Ltd 1996 Lab IC 1503, 1505-8 (Ori) (DB), per Dipak Misra J.
10 Secretary, ESU of South India v PO, LC (2001) 1 LLN 497 (Mad), per Dinakaran J.
11 Mcleod & Co Ltd v Workmen (1964) 1 LLJ 386 [LNIND 1963 SC 272], 388 (SC) : AIR 1964 SC 1449 [LNIND 1963 SC 272]:
[1964] 5 SCR 568 [LNIND 1963 SC 272], per Gajendragadkar J.
12 Brooke Bond (India) Pvt Ltd v Workmen (1966) 1 LLJ 402 [LNIND 1965 SC 287] (SC), per Wanchoo J.

End of Document

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER I Preliminary

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER I Preliminary

S. 2. Definitions.—

Increments

A periodical increment in wages, being a normal incident of industrial employment, is a term of employment. Terms or
conditions relating to increments may be implied or expressed in the contract of employment, or provided for in the rules
of service or the Standing Orders of the establishment, or they may be provided for in a ‘settlement’ or an industrial award.
A dispute relating to an increment in wages, will fall within the ambit of item No 1 in the Third Schedule to the Act.
Where the dispute relating to the introduction of a scheme of increments is referred to an industrial tribunal for
adjudication, the tribunal has to apply the same principles as it would apply for a construction or revision of wages. In
other words, the principles of the financial capacity of the employer and the region-cum-industry basis, will have to be
borne in mind while awarding any incremental scales in the wages. Increments in wages cannot, therefore, be awarded
unless the financial capacity of the employer is properly ascertained and before the result of the impact of such increments
in the future, is judged.13 But once it is found that the employer has the necessary financial capacity to sustain the burden
of increments, the award of an annual increment is held to be a normal rule. The scales of increments fixed by the
employer, by a settlement or by an award, cannot be stopped, unless it is proved that the employer is incapable of bearing
the financial burden of such increments.14 The increments, however, are subject to the efficiency bar in the incremental
scales.15

The employer has the right to withhold the increments of a workman as a measure of punishment or for proved
inefficiency or any act of misconduct.16 But such punishment can be inflicted on a compliance with the procedural rules of
natural justice and in a bona fide exercise of the disciplinary power of the employer. However, the increment that can be
stopped, can only be the one which has fallen due since the workman has been found guilty, in a proper departmental
inquiry. The increment which had already accrued to the workman, before his being found guilty, cannot be withheld
retrospectively.17 A stoppage of increments, in contravention of s 33(1) of the Act, shall also be illegal.18 Generally, annual
increments in the wages of piece-rated workers, are not provided, as these workers are paid by the work which they do,
though rates fixed for such payment might legitimately be increased in proper cases. In Praga Industries, in view of the
peculiar circumstances of the case, the award of the labour court, granting four per cent interim increase in the wage-rates
of the piece rated workers, with the annual increments at the same rate, till the wage rate reached a particular level, was
held justified with the modification that the future annual increments at four per cent should not be granted to the piece-
rated workers, until all the concerned workmen were classified and their scales introduced.19

Fringe Benefits

Traditionally, the obligation of an employer to the workmen, was considered complete with the payment of the basic wage-
viz-the wage for each unit of time spent on the job or each unit of work completed. With increasing industrialisation, rising
prices, rising incomes and other historical vicissitudes, the interests of the workmen in compensation have considerably
widened, so as to include more than the basic wage payment, and consequently, the employer’s liability to provide
supplemental items of compensation, has increased. Such supplemental items of compensation have generally come to be
known as ‘fringe benefits’. It is a term embracing a variety of employees’ benefits, paid by the employers and
supplementing the workers’ basic wage or salary’. There is no universally accepted group of practices embraced by the
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

term ‘fringe benefits’. Broadly speaking, a ‘fringe benefit’ has to meet a twofold test, viz, it must provide a specific benefit
to an employee and it must represent a cost to the employer.20 Various types of allowances, benefits and amenities are
comprehended in the concept of ‘fringe benefits’. Some such benefits are directly financed by the employer, while some
are paid to the workmen, indirectly. The benefit of group insurance falls in the former category, while certain types of
allowances fall in the latter. In India, there are various types of ‘fringe benefits’, given by various employers or industries,
in various regions and it is impossible to deal with them all. Some typical types of such benefits are being discussed as
illustrative cases, under the following heads:

Leave and Holidays

There is a fundamental distinction between leave and holidays. Holidays are off-days, granted by the employer to the
workmen, either voluntarily or compulsorily, under the force of law. On a holiday, the entire business is closed and no one
works, while leave facilities deal with leave for individual workers, while the business as a whole is running. In other
words, on leave, a workman is entitled to absent himself from duty only with the leave of his employer, for such period of
time as the employer may allow or as the rules and conditions of the employment may permit.21 Holidays are always with
pay, while leave may be with or without pay. Section 52 of the Factories Act 1948 requires that every week, workmen
should have at least one day as a holiday, either on Sunday or on any other day. Therefore, salary paid to a workman by
week or month, includes the salary paid by way of holiday pay, in respect of Sundays and other declared
holidays.22Further, from item 4 in Sch 3 to the Act, it is clear that holidays stand on a different footing altogether from
leave with wages.23 Thus, ‘leave facilities’ would neither include ‘holidays’, nor would ‘holidays’ be incidental to a
dispute regarding leave. Hence, a reference with respect to ‘leave facilities’, cannot be construed to mean or include
‘holidays’.

Leave

Leave with wages, with reduced wages and without wages in certain contingencies, is one of the terms of employment or
conditions of labour of the industrial workmen, which occasionally gives rise to industrial disputes. The development of
paid leave practices, consisting largely of paid leave and paid holidays, reflects what might be called ‘a quest for leisure’.24
Various enactments have made provisions for leave with wages, for the commercial as well as industrial workmen. For
instance, s 79 of the Factories Act, makes provisions for an annual leave with wages. The earned leave provided for in s 79
of the Factories Act, or in other analogous provisions, is the minimum statutory leave to which employees are entitled. The
employer or industrial adjudication may provide for additional earned leave to the workmen.

The ultimate object of industrial adjudication is to help the growth and progress of the national economy and it is with that
ultimate object in view, that industrial disputes are settled by industrial adjudication, on principles of fair-play and justice.
On the basis of these principles, industrial adjudication has made reasonable provisions for leave in respect of workmen,
who may not strictly fall within the purview of the Factories Act or the Shops and Commercial Establishment Acts or any
other analogous Act.25 In the words of Das Gupta J, emphasis in the country should be more on increased production, the
absence from work should not be unduly encouraged.26 In Alembic Chemical Works, the industrial tribunal fixed the
quantum of privilege and sick leave for the clerical staff of a manufacturing concern, on a scale more liberal than the one in
force for the operators of the same concern and also made directions regarding the accumulation of such leave. The
quantum of leave so fixed by the award, was larger than the quantum of leave prescribed by the provisions of s 79 of the
Factories Act. In appeal, Gajendragadkar J held that the practice prevailing in the comparable concerns and the trend of
industrial awards, both seemed to show that a distinction is generally made between two categories of employees, viz, the
clerical staff and the operators. Since such distinction was perfectly justifiable, no question of discrimination could arise. It
was further observed that in appropriate cases, the tribunal can fix the quantum of leave on a scale more liberal than the
one provided by s 79 of the Factories Act. These are matters primarily for the industrial tribunal to consider and decide, as
it is more familiar with the trends prevailing in comparable concerns and in deciding what would be a reasonable provision
for the privilege leave or sick leave. The tribunal has to take into account all the relevant factors and unless it is shown that
the leave rules fixed by an award cannot be sustained on the above considerations or on any reasonable grounds, or they
make a violent departure from the prevailing practice or trend, the award cannot be interfered with. The learned judge
further observed that, in matters of leave, either in the form of a privilege leave or a sick leave, tribunals should not ignore
the consideration that unduly generous or liberal leave provisions would affect production and obviously, the production of
essential commodities is in the interests not only of the employers and the employees, but also of the general community.27

In Rai Bahadur Dewan Badri Das, the workmen in the press section of the tribune, other than the line-operators, were not
entitled to any leave, but were only entitled to claim 30 days wages, plus dearness allowance, if they worked for 11
months. Later, the employer modified the leave rule under which the workmen in service on 1 July 1956, were given the
benefit of a 30 days’ leave and the workmen joining the service after that date, were given leave in accordance with the
provisions of s 79 of the Factories Act 1948. The workmen of the press section, therefore, demanded leave facilities,
irrespective of the date of their joining the service. The tribunal directed that all the workmen in the press section should be

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given the same quantum of leave, viz, 30 days leave with wages, irrespective of the question as to whether they took up
employment after 1 July 1956 or before that date. In view of the fact that the different provisions with respect to leave in
the same concern, when other terms and conditions of service were the same, in respect of both the categories of
employees, would lead to dissatisfaction and frustration amongst the new employees, the Supreme Court held that it was
not right that there should be such discrimination and affirmed the award.28

In Mohammed & Sons, the tribunal provided for a ten days’ paid casual leave per year, while there was none previously.
The Supreme Court affirmed the award, because, the increased burden on the employer by the institution of the ten days’
paid casual leave, along with eight festival holidays, resulted in the increase of wages to the extent of 20 per cent, hence,
this factor was taken into consideration in fixing the wage-structure for the employees.29 In Indian Oxygen, the tribunal
directed that the union representatives should be allowed special leave to attend law courts for matters connected with the
workers and the management, to attend to annual conventions of their federation, to attend executive committee meetings
of the union federation, and conventions of the central organisation, ie, the INTUC. According to the tribunal, such
facilities to conduct the administration of the union, would be in the interest of a proper growth of the trade union
movement and the promotion of harmony in industrial relations, as there would be a lesser possibility of outside elements
establishing their hold on their union. In appeal, the Supreme Court noticed that the company had been allowing union
representatives to attend conciliation and adjudication proceedings with full pay and observed that this was fair. On facts,
the court held that it the leave granted by the company with full pay was fair and even liberal. The court held that the
tribunal had not taken into account the adverse effect on production, if further absenteeism was allowed. It was, therefore,
held that the tribunal was not justified in directing the company to grant the special leave demanded by the union. Shelat J
said:

Industrial adjudication ... cannot and should not ignore the claims of social justice, a concept based on socio-economic equality and
which endeavors to resolve the conflicting claims of the employers and the employees, by finding not a one-sided, but a fair and
just solution. A demand for special leave has, however, nothing to do with any disparities or inequalities, social or economic. On
the other hand, too much of absenteeism harms both the employers and the employees, inasmuch as it saps industrial economy.30

In UP Electric Supply, the court set aside the award of the industrial tribunal, directing the employer company to pay
wages for 30 days for the earned leave not enjoyed by the workmen before the closure of its undertaking, as no such
compensation was statutorily payable. So long as the company was carrying on the business, it was obliged to give the
facility of the earned leave to its workmen. However, after the closure of its business, the company could obviously, not
give any earned leave to those workmen, nor could the workmen claim any compensation for not availing themselves of
the leave. In the absence of any provision in the statute, governing the right to compensation for earned leave not availed of
by the workmen before a closure or transfer of an undertaking, no compensation was payable.31

In Otis Elevators, the workmen of the Delhi establishment of the company, claimed that all its employees should be
entitled to a 30 days’ paid privilege leave for every completed year of service, with a right to accumulate the same up to 90
days and further claimed that the leave should be given in at least, three instalments, if desired by the employees and may
be prefixed or suffixed to Sundays and holidays. The tribunal dealt with the claims of the staff and of the hourly rated
employees, under two different heads. So far as the staff employed in the company was concerned, the tribunal, upon
reference to the provisions of the Delhi Shops and Establishment Act and other material on record, directed that the
privilege leave allowable to the staff working in the Delhi office will be the same as that obtaining in Bombay, to its office
staff. Regarding the hourly rated workmen at Delhi, the tribunal took into account the practice obtaining at the Bombay
office of the company, regarding such workmen and applied the same to the hourly rated workmen at Delhi, on the ground
that it was reasonable. These directions were impugned by the workmen in Delhi, in appeal before the Supreme Court, on
the ground that they made a distinction in the quantum of leave granted to the two sets of workmen employed in the same
establishment, namely, one method of leave applied to the staff and another, to the hourly rated workmen, which was
contrary to the uniform practice that had been adopted by the company itself, at Delhi, to all its employees, as was clear
from the evidence on record. But, in the circumstances of the case, the court observed that if the practice now in force in
the Bombay office, is applied, the quantum of the annual leave to the daily-rated workmen in the Delhi office, will have to
be worked out on a basis slightly different from the one adopted by the tribunal. Consequently, the court modified the
directions of the tribunal, with respect to the hourly rated workmen in Delhi, entitling them to an annual leave with wages,
in a calendar year, in the same manner as was available to the hourly rated workmen in the field, in the Bombay office, in
accordance with the prevailing settlement.32

Region-cum-Industry basis for Fixing Leave and Holidays

It is well-known that both legislation and industrial adjudication, seek to attain similarity or uniformity in the terms of
service in the same industry, existing in the same region, as far as it may be practicable or possible, without doing injustice

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or harm to any particular employer or a group of employers. Generally, in the matter of providing leave rules, industrial
adjudication prefers to have the same conditions of service in the same industry, situated in the same region.33 In
Gramophone Co, the company’s rules provided for casual leave for 15 days and privilege leave for 21 days in the year. In
addition to the privilege leave, the company also used to grant sick leave for one month, on full pay and for two months, on
half pay, per year, which could be accumulated up to 42 days, in accordance with the provisions of the Bombay Shops and
Establishments Act 1948. Casual leave, however could not be accumulated. The tribunal increased the privilege leave to 30
days per year, subject to an accumulation of up to 42 days. In appeal, the Supreme Court, on a comparison of the total
casual leave and privilege leave allowed in the various comparable concerns in the region, found that the total of privilege
leave and casual leave as provided by the award of the tribunal, was higher than in the other concerns, though in some
other concerns, the accumulation allowed of the privilege leave, was higher than that of the company. For instance, in
some concerns, an accumulation of privilege leave was allowed for more than 42 days, in some concerns it was 56 days
and in others 63 days. In some other concerns, an privilege leave was allowed for 28 days per year. In view of the varying
patterns prevalent in the comparable concerns, regarding privilege leave, casual leave, and sick leave, the court did not feel
inclined to interfere with the award of the tribunal.34 In Indian Oxygen, the industrial tribunal directed that the workmen
should get 15 days leave with full pay and 30 days leave with half pay, as medical leave during the year and accumulation
should be allowed to the extent of 45 days with full pay or 90 days on half pay. It further directed that the monthly-rated
staff of the company, working in the office of the factory, should get 30 days in a year, which could be accumulated to the
extent of 90 days in the case of both the categories. Comparing this award with the pattern in the comparable concerns in
the same area (Jamshedpur city), the Supreme Court set aside the award in respect of the annual leave and directed that the
existing leave, ie, 21 days, should continue and it could be accumulated for 63 days, ie, for three leave periods. However,
the direction with respect to medical leave was affirmed, as it was in consonance with other comparable concerns in the
region.35

In Buckingham & Carnatic, in allowing the claim of the workmen regarding annual leave and casual leave, the tribunal
compared the establishment of the employer company, which was in the city of Madras, with various textile mills in
Bangalore, Bombay and Hyderabad, while accepting the position that Madura Mills was a unit comparable with the
Madras establishment of the company. The Supreme Court affirmed the direction that the workmen should be entitled to
get wages and dearness allowance when they availed themselves of the specified casual leave. But dealing with the casual
leave and the annual leave, the court said that though normally, it does not interfere with the directions given by the
industrial adjudicators in such matters, nor meticulously calculates as to what would be the proper number of days that
could be granted as leave, in view of the fact that in Madura Mills, the workmen who had put in over five years of service,
were entitled to avail themselves of only a period of 33 days as casual leave and privilege leave, it held that after granting
15 days as casual leave to the workmen, they would be eligible only for 18 days as privilege leave with pay and dearness
allowance. In the absence of any valid reasons given by the tribunal, it was held that the quantum of leave that could be
reasonably claimed by the workmen as annual or privilege leave, could only be 18 days, as against 25 days as fixed by the
tribunal and in such a case, the workmen will be getting a total number of 33 days as privilege leave and casual leave, as
was available in Madura Mills.36 In Dalmia Cement, dealing with casual leave provided by s 22(1)(b) of the Delhi Shops
and Establishments Act 1954 the Supreme Court observed that the pre-emptory direction of the legislature, fixing a
maximum of 12 days of total leave for sickness or casual leave, could not be disregarded by the tribunal and held that the
award of the tribunal, fixing casual and sick leave at more than the statutory requirement, was illegal.37

In May and Baker, again dealing with the same provision, the court observed that it is not open to the tribunal to allow
accumulation of leave up to 12 weeks, as against the statutory maximum fixed at 30 days. The award was, therefore,
accordingly modified and the accumulation of privilege leave was allowed for up to 30 days, as provided by the statute.38
In Cinema Theatres, while following the decision in Dalmia Cement, the court went a step further and said that leave
cannot be fixed in excess of the maximum fixed by the statute, even on the concession of the employer.39 In Alembic
Chemical Works, interpreting s 79 of the Factories Act 1948, the court held that, on the construction of the language of the
section, the said provision provided for the minimum, rather than for the maximum leave which may be awarded to the
workmen. On this construction, the court upheld the award of the tribunal, fixing the quantum of leave at a higher number
than the one prescribed under that section.40 In Calcutta Insurance, the tribunal awarded leave to the employees, in excess
of the limits prescribed by s 11 of the West Bengal Shops and Establishments Act, which was more akin to s 79 of the
Factories Act than to s 22 of the Delhi Shops Establishments Act 1954. In appeal, the Supreme Court repelled the
contention on behalf of the employer, that the tribunal could not direct that the employees should have leave in excess of
the limit specified in the West Bengal Shops and Establishments Act 1963.41 Similarly, in Remington Rand, on a
construction of ss 14 and 15 of the Mysore Shops and Establishments Act, the Supreme Court affirmed the award of the
tribunal, fixing leave in excess of the limits prescribed by the statute.42

Sick Leave

Sickness is a serious misfortune to a workman, for it not only prevents him from earning his normal wages, but is a drain

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on his meager financial resources by way of additional expenditure on food, nursing and visits to the medical center etc. In
awarding sickness leave, the adjudicator has to take into account the relevant factors. The ‘region-cum-industry basis’ is
suitable in the adjudication of sick leave cases.43 In Karam Chand Thapar, the Supreme Court set aside the direction of the
industrial tribunal to the effect that, in case of a protracted illness, an employee who had served the company for less than
five years, should be allowed leave without pay, for upto six months, as it recognised the difficulty of the employer, that
even though such leave would be without pay, for a period of six months, the employer would not be able to engage new
men on a permanent basis, in place of such employees.44 In Hindustan Times, the court held that the sick leave and casual
leave permissible under the provisions of the Delhi Shops and Establishments Act 1954, should be awarded to all the
workmen, as it would not be right to have two separate leave rules for the two classes of workmen, one to whom the Delhi
Shops and Establishment Act 1954 applies and the other to whom it does not.45

In Associated Cement Companies, the industrial tribunal had directed that the employer shall not insist on the production
of a medical certificate for obtaining sick leave, when the illness of a workman was of the duration of a day and expressed
the hope that the workman would not abuse this concession and that it would be open to the employer to take disciplinary
action against the workman, when there was satisfactory proof that the concession had been abused. This direction of the
tribunal was challenged by the employer company, before the Supreme Court, on the ground that if, for an illness of the
duration of a day, no medical certificate was insisted upon, it will be open to a workman to avail of all the 15 days’ sick
leave, without producing any medical certificate, by taking sick leave for a day, at intervals. It was also pointed out that
there was a provision for a 15 days’ casual leave in the employer company and if a workman was indisposed and could not
attend to work for that reason, it was open to him to take a casual leave, though sick leave with full pay could be availed of
only in case of real sickness and that there was nothing wrong in the company insisting upon a medical certificate for
obtaining a sick leave, even if it be for a day and that to dispense with the requirement of a medical certificate would lead
to grave abuses. But the court did not accept this contention, just as the tribunal, on a consideration of all the materials
placed before it, having regard to the overall picture, had arrived at its conclusion. Speaking for the court, Mathew J, who
delivered the opinion of the court, observed:

Generally speaking, no workman will get himself treated by a doctor on the very first day of an illness. For minor ailments, no
workman would go to a doctor for treatment and it would be a great hardship to the workman if a medical certificate from a
qualified doctor is insisted upon for sick leave, for a day’s illness. From a practical point of view, we do not think that it would be
expedient to insist that a workman should produce a medical certificate from a qualified doctor, to avail himself of sick leave for a
day, on the ground of illness. We do not say that the apprehension entertained by the appellant, that the workmen would abuse the
provision for sick leave with full pay, in some cases at least, if no medical certificate is insisted upon for the leave, even if the
duration of the illness is for a day, is unfounded. But, at the same time, one has to consider the practical inconvenience and the
hardship to the workmen if a medical certificate is insisted upon for availing of sick leave for illness of the duration of a day.46

The court does not appear to have appreciated the difference between the purpose of casual leave and sick leave. Casual
leave is meant to cover sudden and emergent situations, which essentially, should include sudden illnesses. In cases of
sudden illness, therefore, a workman may take casual leave and then if the illness prolongs, he may take sick leave, on
being medically certified to be sick. The purpose of sick leave is to allow a sick workman, time for rest and treatment. It
would, therefore, be proper that before availing himself of this type of leave, the workman should be medically certified
sick. In such a situation, the possibility of the abuse of sick leave, as apprehended by the employer, would be obviated. But
the risk of an abuse of this type of leave is inherent in the view taken by the court. In Hindustan Times, the issue related to
the absence of any provision for sick leave in the ESI Act 1948 was dealt with. section 46 merely provides for a periodical
treatment of an insured person, in case of his sickness, if certified by a duly appointed medical practitioner. Sections 47, 48
and 49 deal with the eligibility of workmen for sickness benefits and the extent of the benefit that may be granted. Section
56 of the Act provides for medical benefits to the insured workmen and in certain cases, to the members of their families.
Das Gupta J held that the provisions of this Act do not bar a demand for sick leave by the workmen, as the first proviso to s
49 of the Act states that a person qualified to claim a sickness benefit, shall not be entitled to the benefit of an initial
waiting period of two days, except in the case of a spell of sickness, following, at an interval of not more than 15 days, the
spell of sickness for which benefit was last paid. It is, therefore, apparent, that the Act does not cover all the contingencies
of sickness.47Hence, the adjudication of a dispute relating to sickness leave is permissible under the Industrial Disputes
Act.48 In Alembic Glass, Singhal J observed that from the scheme of the Act, it appears that the benefits admissible under
the Act, cannot be said to cover a workman’s demand for sick leave. In other words, the provisions for the benefits to an
insured worker, in case of sickness (sickness benefit), of medical treatment, of attendance to him or the members of his
family, do not constitute a substitute for the workman’s right to get leave on full pay on the ground of sickness.49

A provision for the grant of leave is generally made in the Standing Orders or the service rules of industrial establishments.
Normally, when leave has accrued to an employee, it is his right to get it. But from what time leave should be sanctioned,
has to be determined according to the exigencies of the business of the employer. Unless a leave has been sanctioned, the

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employee cannot absent himself from work. Leave cannot be sanctioned as and when it accrues or is applied for,
irrespective of any consideration of the business necessities and exigencies. It is apt to dislocate and even paralyse the
work of the employer, if, for instance, on a particular day, all the workmen to whom privilege leave has accrued, apply for
such leave. Unless leave is applied for, the question of its sanction would not arise. If a workman remains absent from
work, without leave having been sanctioned to him, or overstays the sanctioned leave, he exposes himself to disciplinary
action. If a workman knows that he has been granted leave up to a particular date and remains absent beyond that date, his
absence beyond that date will not be covered by the leave.50 Judicial dicta have gone to the extent to say that even if a
workman could not apply for leave on account of his having been arrested by the police, it may be unfortunate for him, but
it would be unjust to hold in such a case, that the employer must always give leave when an application for a leave is
made, because if a large number of workmen are arrested by the authorities in charge of the law and order, by reason of
their questionable activities in connection with a labour dispute, or otherwise, the work of the employer will be paralysed,
if he is forced to give leave to all of the workmen, for a more or less indefinite period. Such a principle will not be just, nor
will it facilitate harmony between labour and capital, or ensure a normal flow of production. It is immaterial whether the
charges on which the workmen were arrested by the police, were ultimately proved or not, in a court of law; the employer
has to carry on his work and in certain cases, may find it difficult to carry on his business if a large number of workmen are
absent. It is a matter of the discretion of the employer, to grant leave or not. If, however, the workmen are arrested at the
instance of the employer, for the purpose of victimisation and in order to get rid of them on the ostensible pretext of a
continued absence, the position will be different, as it will then be a colourable or mala fide exercise of power under the
relevant Standing Order.51

But a single judge of the Delhi High Court has gone to the extent to say that if the absence of a workman from work is due
to any cause beyond his control, it would not be reasonable for the management to decline leave to him, to the ‘extent
necessary’. The refusal to grant leave in such circumstances would be unreasonable and mala fide, justifying interference
with the order of termination of the service of the workman on the ground of absenting without leave. But this cannot be
treated as a general proposition of the law.52 A corollary to the proposition that leave must always be sanctioned before it
can be availed of, is, whether the leave once granted can be cancelled. It is a managerial function to grant leave at a
particular time. Likewise, if the exigencies of the business of the employer require it, the leave can also be cancelled. But
in case the cancellation of the leave is contested by the workmen, the employer has to make out a strong case to justify the
action, based on the non-compliance by the workmen, with the direction cancelling the leave. For instance, obtaining leave
on a false pretext, would be a valid justification to cancel the leave, on finding out the true state of affairs. This point is
illustrated in Binny, in which the workman obtained leave from the employer on the false pretext that he wanted to go to
his native place, to settle a land dispute. But, in fact, he participated in a hunger strike called by a trade union, before the
Government secretariat. On coming to know of this, the employer company cancelled the leave and directed the workman
to resume his duty forthwith. On his failure to comply with the direction, the company took the stand that the workman had
left the service, terminating his contract under the relevant Standing Order applicable to the establishment, by absenting
himself without leave, for eight consecutive working days. The tribunal held that the employer had no right to cancel the
leave once granted and, on this view of the matter, ordered reinstatement of the workman with back wages. The Supreme
Court quashed the order of the tribunal and restored the action taken by the employer.53 The Bombay High Court held that
if the service conditions or the Standing Orders of an industrial establishment provide that at the time of his retirement, a
workman shall be entitled to the balance of the leave to his credit, he can claim money compensation in terms of the salary,
for the leave to his credit, after his retirement.54 But where an establishment has been closed or transferred, the claim for
compensation for the unavailed earned leave, cannot survive, as such a claim is not warranted by any statute. The facility
of enjoying leave can be given to the workman, by an employer, only so long as he is carrying on his business.55 The
question as to whether an encashment of leave was allowed from a particular year and in a particular manner, is a question
of fact, which cannot be interfered with, in a judicial review.56

Holidays

Various states have fixed the number of holidays under the Negotiable Instruments Act 1881. Some of such holidays are
national holidays, some are sectional holidays. The holidays declared under the Negotiable Instruments Act 1881 are
usually applicable to Government institutions only and they have a certain financial statutory implication, envisaged by the
Act itself. Commercial establishments and industrial undertakings do not usually adopt these holidays.57 Employers
generally fix the number of holidays in their Standing Orders or the service conditions. In Associated Cement Staff Union,
the Supreme Court held that the number of holidays to be given, has to be fixed so as to be consistent with the change in
the concept of the country’s economic position and the need for more production. On this view of the matter, the number
of holidays fixed by the tribunal at 21 was reduced by Supreme Court, to 16, as 21 holidays were held to be too many.58
Apart from the national holidays and festival holidays, there are weekly holidays. Some employers do not grant paid
weekly holidays to their employees. But paid holidays should be the goal of industrial adjudication, bearing in mind,
however, the financial burden upon the employer caused due to such paid holidays.59 The Supreme Court accepted the
recommendation made by NCL-I to the effect that every employee shall be allowed in a calendar year three paid national

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holidays; viz, 26th January (Republic Day), 15th August (Independence Day) and 2nd October (Mahatma Gandhi’s Birth
Day) and five paid festival holidays, as may be fixed by the appropriate Government in consultation with the
representatives of employers and employees.60

A reduction in the number of holidays would be a step in the direction of increasing the continuous productivity.61 In
Pfizer, the tribunal reduced the number of public holidays from 28 (as under the Negotiable Instruments Act 1881) to 16,
and this was upheld by the Supreme Court.62 In National Tobacco, the claim of the workmen was only in respect of the
Visvakarama Puja day, which, according to the demand, should be a paid holiday for the daily-rated and weekly-rated
workmen. The existing arrangement was that if such workmen wanted to enjoy this holiday, they were allowed to do so,
but without wages. However, the Vishvakarma Puja day was not a holiday for workmen who were paid at the monthly
rate. The tribunal rejected the claim on the ground that there was no justification for making an exception in the case of
daily-rated and weekly-rated workmen, in respect of the holiday. Nor was it proved before the tribunal that other industrial
concerns in the region were allowing Vishvakarma Puja day as a paid holiday for the daily-rated and weekly-rated
workmen. The direction of the tribunal was affirmed by the Supreme Court.63 In Bhiwani Textile, the industrial dispute was
as to whether the workmen could be called upon to work on Sundays, in batches, and if so, would they be entitled to any
extra remuneration for such work. From the evidence before the tribunal, it appeared that in other textile mills in the same
region, Sunday was a working day and the workmen were not paid any extra remuneration for such work on Sundays.
Though the tribunal held that the workmen could be called upon to work on Sundays, it directed the management to pay a
20 per cent extra remuneration, over and above the consolidated wages, for such work on Sundays. In appeal, the Supreme
Court set aside the direction and observed that the tribunal erred in not taking into consideration, two relevant factors, viz,
the financial capacity of the employer to bear the extra burden and the practice prevailing in the industry in the region, and
the factors taken into account by it, in awarding the extra payment to the workmen, were of much less importance.64

In Federation of S&ME Industries, it was held that the tribunal, in the circumstances of the case, was not justified in
granting two additional days as festival holidays, departing from the original number of festival holidays granted by the
industries.65 In Bijli Cotton Mills, the Supreme Court emphasised the need for increasing production, particularly, in the
matter of utility concerns and concerns that produce goods for essential services. In this context, it has been observed that
there are too many public holidays in this country and, that when the need for industrial production is urgent and
paramount, it may be advisable to reduce the number of such holidays in industrial concerns. In this case, the tribunal
directed the employers to pay wages to each one of their daily-rated and piece-rated workmen, for seventeen festival
holidays, besides the three national holidays. If the employers substituted festival holidays on a rest day, for that day, they
shall pay double the wages. In appeal, the Supreme Court set aside the award and remanded the matter to the tribunal for
fresh adjudication; as it had not taken into consideration the fact that the award of seventeen festival holidays would
impose a very heavy additional burden on the establishment. Speaking for the court, Dua J, observed:

Custom, practice and uniformity in the industry, without prejudicially affecting efficiency and increased production, are some of
the relevant factors which have to be taken into account in determining the number of paid festival holidays per year. The question
affects national economy and the present instance may well be cited in future, in deciding similar questions in other allied concerns
in the region. The effect of such instances, therefore, does not remain confined only to the estab1 ishment concerned, but has its
impact on other concerns as well. 66

In Hindustan Steel, the demand of the workmen was that the ten holidays sanctioned by the certified Standing Orders of
the company, should be increased to eleven, by the addition of May day as a compulsory national holiday. The relevant
issue framed by the tribunal, in this connection, read:

Whether the workmen had acquired the right through custom, usage, etc, to enjoy the May day 1970, as a national holiday, as
defined in the certified Standing Orders of the company or as an additional paid holiday in excess of the number of paid holidays
prescribed by the said Standing Orders. 67

The tribunal held that the workmen had acquired a customary right to enjoy May day as a compulsory holiday and also as
an additional paid holiday. In appeal, the Supreme Court held that the evidence on record did not show any custom in the
matter of recognising May day as a compulsory holiday and set aside the award. In Saxby and Farmer,68 at the instance of
the employer company, the appropriate Government referred for adjudication the industrial dispute relating to a
‘curtailment of unpaid festival holidays’ on the ground that the company allowed nine festival unpaid holidays and the
continuance of these holidays would not only entail a loss of wages to the workmen, but also a loss of production, which
would prejudicially affect the country’s economy. It was also asserted that the system of granting unpaid holidays was no
longer being followed in the engineering industry. Moreover, other holidays enjoyed by the workmen of the establishment,
along with the workmen of other similar units, were far in excess of what prevailed in other countries. This was contested

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by the workmen, who took the position that the curtailment of the holidays would be in disregard of the principle and
practice followed so far, in the matter of giving benefits to the industrial workmen. The main ground taken by the
workmen was that, in the interests of industrial peace, production and better relations between the workmen and the
management, the workmen should be kept contented and any attempt to curtail the existing benefits, according to the time
honoured practice, would provoke discontent and labour unrest. The tribunal was impressed by the contention of the
workmen, that they had enjoyed the facility of unpaid holidays for a long time and held that there was no good ground to
cut down the number of festival holidays by curtailing the unpaid holidays, simply because the overall number of holidays
was large. Setting aside the award of the tribunal, the Supreme Court discontinued the system of unpaid holidays and
observed that there was no reason or justification for unpaid holidays not being curtailed in this case, particularly when the
employer was carrying on a kind of work which required efficiency and increased production and the prosperity of the
country depended more upon increased production and efficiency, than on enjoying holidays.

Wage Incentives or Production Bonus

The incentives given to the labour by their employers, for achieving higher productivity, are generally known as incentive
bonus or production bonus. In other words, the incentive for increased production is generally known as ‘production
bonus’. Broadly, the basis of remuneration for work in an industry, is based on two fundamental arrangements, viz, (i)
payment by time, and (ii) payment by output. In the former case, a worker is paid a predetermined amount for a specified
unit of time, which may be an hour, a day, a week, or a month. Under this arrangement, there is no direct control on the
amount of work done by the workers, except perhaps, to a certain extent, through supervision, so long as they are engaged
on tasks specified by the employer. In the latter arrangement, the worker is remunerated according to his output or the
output of the group to which he belongs. It may assume complex forms, such as ‘differential piece work, wherein rates of
remuneration per unit of output, may be either progressive or regressive. According to NCL-I:

There are also other types of remuneration that are not directly dependent on production, like bonuses for regular attendance,
length of service, quality of production and elimination of waste, all constituting an area of wage incentives.69

There are advantages in incentive payments. They serve a double purpose, viz, (i) to increase the earnings of workers, and
(ii) to improve the efficiency of the unit, thus lowering costs and if properly executed, they may have an effect on prices in
a manner which will benefit the community. But on the other hand, the use of a system of payment by results, accentuates
the differences between the management and the unions. Such incentives provide additional remuneration for workers, as
production proceeds from day to day. There is a wide variety of incentive systems in force in different parts of the world
and various countries, for this purpose, have evolved various wage plans, worked out on various bases.70 The main feature
of all such production incentives or production bonuses is that its payment depends upon production and is in addition to
the guarantee of the minimum wage. In effect, it is an incentive to higher production and is in the nature of an incentive
wage. The name ‘incentive bonus’ or ‘production bonus’ indicates that it is given as a cash incentive, for a greater effort on
the part of the labour,71 for more production.

The first and second five year plans recommended the introduction of incentives to promote more efficient work in
industries, with due safeguards to protect the interests of workers, through the guarantee of the minimum (fall-back) wage
and protection against fatigue and undue speed up. The second plan further recommended that earnings beyond the
minimum wage should be necessarily related to results and workers should be consulted before a system of payment by
results was introduced in such an establishment. The third plan accentuated the need for higher productivity and reduction
in the unit cost of production and put the responsibility on the management, to provide the most efficient equipment,
correct conditions and methods of work, as well as adequate training and suitable psychological and material incentives for
the workers. These recommendations do not appear to have been implemented, though certain individual employers or
group of employers, have endeavoured to do their bit in this connection.72 There is a base of standard, above which, extra
payment is made for extra production, in addition to the basic wage. Such a plan typically guarantees time-wage up to the
time represented by standard performance and gives workers a share in the savings represented by a superior performance.
But whatever may be the nature of the plan, the payment in effect, is extra emoluments for extra effort put in by the
workmen, over and above the standard that may be fixed. Therefore, all these plans are known as incentive wage plans
and, generally speaking, have little to do with profits. This type of bonus was recognised by the Supreme Court in Titaghur
Paper Mills, in which Wanchoo J observed:

The extra payment depends not on extra profits, but on extra production. The extra payment calculated on the basis of extra
production, is in a case like the present, where the payment is made after the annual production is known, in the nature of
emoluments paid at the end of the year. Therefore, generally speaking, payment of production bonus is nothing more nor less than
a payment of further emoluments, depending upon the production, as an incentive to the workmen to put in more than the standard

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performance.73

In this case, referring to Smith’s Labour Law where various plans prevalent in other countries, known as incentive wage
plans, have been worked out on various bases, the court observed:

The simplest of such plans is the straight piece-rate plan, where payment is made according to each piece produced, subject, in
some cases, to a guaranteed minimum wage for so many hours’ work. But the straight piece-rate system cannot work where the
finished product is the result of the co-operative effort of a large number of workers, each doing a small part which contributes to
the result. In such cases, production bonus by tonnage produced, as in this case, is given. There is a base or standard above which,
extra payment is made for extra production, in addition to the basic wage ... But whatever may be the nature of the plan, the
payment in effect, is extra emoluments for extra effort put in by workmen, over the standard that may be fixed ... The extra
payment depends not on extra profits, but on extra production ... Therefore, generally speaking, payment of production bonus is
nothing more or less than a payment of further emoluments, depending upon production, as an incentive to the workmen to put in
more than the standard performance. Production bonus in this case also, is of this nature and is nothing more than additional
emoluments paid as an incentive for higher production.74

In connection with the question as to whether there should be increased production in a particular concern, the court further
observed that it is ‘a matter to be determined entirely, by the employer and depends upon a consideration of so many
complex factors, namely, the state of the market, the demand for the product, the range of prices, and so on. As to the
question of whether a scheme for an incentive bonus should be introduced or not, is, therefore, entirely for the employer to
decide. But the further question, as to whether the industrial adjudicators have jurisdiction to introduce a production bonus
at all, was left undecided by the court. However, it was held that where there was a scheme of production bonus in
existence, the tribunal would have jurisdiction, under the Industrial Disputes Act, to deal with it and to make suitable
amendments or modifications to it, where necessary. From the point of view of economics, the employees in non-
production departments, like the clerical and subordinate staff in an industry, are deemed to contribute towards the
production and on this hypothesis, the scheme of incentive and production bonus should be extended to cover them.75

In a case where the management has introduced a scheme for incentive bonus, it is open to the tribunal to vary the terms of
the scheme, if the circumstances of the case justify its doing so and the refix the rates of the incentive bonus, if it finds that
the targets are too high or the rates are wholly incommensurate to the additional performance put in by the workman.
Where necessary, the tribunal may, for the determination of technical matters, take assistance from persons who are
familiar with the subject, by appointing them as accessories.76 The payment of an incentive wage is a payment of further
emoluments to the workmen, depending not upon extra profit, but on extra production, as an encouragement to put in more
labour than normal incentive bonus or wage cannot be linked with the earning of profits, because profits depend upon
many economic factors ruling at the time, for instance, there may be a slump in the market or a fall in the demand of
finished goods or non-availability of raw materials and these and such other prevailing factors may affect the earning of
profits, with which the workman who increased the output, is not concerned. Likewise, the vehicle drivers of an industrial
establishment, partly on this principle and partly on the finding that they put in more than their standard performance, have
been held to be entitled to the benefit of the incentive bonus scheme.77 In this connection, in Sone Valley (supra), the court
observed:

It would of course, always be open to the legislature, to introduce any kind of bonus, not so far recognised by industrial law,
evolved either by the tribunal or by this court. But that must rest on a solid foundation and express words must be used to that
effect. Although it is not necessary to express any final view on the subject, we are inclined to think that apart from a legislation on
incentive bonus for increase of production, irrespective of the question as to whether the industry was making profit or not, is one
that must be introduced by the particular unit of industry. It would be for the management to fix that incentives should be given to
different departments, to step up production. An industrial tribunal would not be justified in holding that merely because there had
been an augmentation in the production, the labour would be entitled to make a claim to a bonus, because of such increase. Labour
would undoubtedly be entitled to a revision of its wage scales, dearness allowance and other terms and conditions of service, as
also profit bonus; but in the absence of any legislation or a scheme for incentive production, industrial tribunals would not be
justified in laying down a scheme themselves.78

In this case, the workmen demanded a share in the incentive payment allowed by the Government, to the cement
producers, claiming it to be an incentive bonus. The tribunal, on an examination of the special circumstances of the case,
awarded that the demand of the workmen was justified. In appeal by special leave, the Supreme Court observed that, even
if the central control order offered some inducement to the producers to step up their production, the terms thereof did not

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entitle the tribunal to treat it as and by way of an incentive bonus, in which the workmen could claim a share. The Court
observed that an industrial tribunal could only award that which the law allows. In the absence of any legislation on the
subject and in the absence of a scheme for incentive payment, introduced by the management, in the particular facts and
circumstances of the case, the court negatived the claim of the workmen. The NCL-I has suggested the following
guidelines for the introduction of incentive schemes, which found general acceptance in the industry and labour:

(a) Employers and workers should formulate a simple incentive system at the unit level and implement it on some agreed
basis, through collective bargaining. In every case, the introduction of the incentive schemes should be preceded by an
agreement with the trade unions.

(b) In evolving wage incentive schemes, it should be ensured that these do not lead to rate-cutting. The worker’s normal
wages should be protected, where it is not possible for him, for circumstances beyond his control, to earn an incentive.
(c) Individual or group incentives can be framed to cover both direct and indirect groups of workers.

(d) An incentive scheme cannot be evolved without undertaking a work-study, with the co-operation of the workers.
Nevertheless, it should always be open to the employers and the workers to evolve a scheme by agreement, or on any
other acceptable basis.
(e) Efforts should be made to reduce time-rated categories to the minimum. This will ensure that all employees have an equal
chance to increase their earnings, with the increase in productivity.
(f) Wage incentives should generally provide extra earnings only after a mutually agreed level of efficiency has been
achieved.
(g) To ensure quality of production, incentive payments should be generally allowed only if the output has been approved on
inspection by the management. Relevant norms in this connection should be laid down and made known to the workers.
(h) Incentive earnings should not fluctuate too much. This requires a certain degree of planning, so that material delays,
machine-breakdowns, etc, are controlled.
(i) The scheme should itself safeguard adequately, the interest of the worker, if he is forced to remain idle due to
circumstances entirely beyond his control, such as non-supply of raw materials, and machine-breakdown.
(j) Apart from financial incentives, non-financial incentives, like better security of employment, job satisfaction, and job
status, have also a place in increasing productivity.79

In Raza Buland Sugar, the company had withdrawn its scheme for payment of incentive bonus, known as premium in the
sugar industry, and in adjudicating on the dispute arising out of that, the tribunal effected certain modifications in the
scheme. It held that the wage board had not recommended the payment of any particular kind of incentive in sugar the
industry, hence, the standardisation by the wage board had nothing to do with the payment of an premium as an incentive
for higher production. In appeal by special leave, in the circumstances of the case, the Supreme Court affirmed the award
of the tribunal.80 In Unichem, the tribunal suggested certain modifications to the originally existing scheme of incentive
bonus, while not accepting most of the recommendations of the assessor appointed on the joint application of both the
parties. But, since the tribunal did not have the necessary material for that purpose, before it, it was not possible to devise a
scheme, calculated to afford protection to the incentive earned by a workman, at the raised base performance index. In the
circumstance, the tribunal directed that a scheme should be worked out, if possible, by the consent of the parties, for the
purpose of protecting the interests of the workmen, at the increased base performance index. In appeal, the Supreme Court
observed that, though it would have been desirable for the tribunal to have actually evolved a scheme, in the circumstances
of the case, the court could not do anything in the matter and the directions of the tribunal were affirmed.81

Puja Bonus and Customary Bonus

Puja bonus or customary bonus is quite distinct from the profit sharing bonus, which has now been codified in the Payment
of Bonus Act 1965. Section 17(a) of the Act entitled an employer to deduct ‘any puja bonus or other customary bonus’
paid by him to an employee, in a particular accounting year, from the ‘profit sharing’ bonus payable to him, under that Act
in the year but the Payment of Bonus Act provides no machinery for the qualification of Puja bonus or customary bonus,
for the adjudication of which, different considerations arise. The puja bonus or other customary bonus is, therefore, to be
adjudicated upon by the tribunal on a reference being made to it under s 10(1), read with item 5 of the Third Schedule of
this Act. This has been made specifically clear by the Supreme Court in Mumbai Kamgar Sabha.82 It may, however, not be
irrelevant to point out that though the holding of the court in this case is correct, the process of its reasoning is rather
arduous and prolix and sounds like an exercise in the rhetoric. Instead of adverting to the clear language of s 17 of the

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Payment of Bonus Act, the court unnecessarily got ensnared into the cobwebs of empty phrases and ‘the gravitational pull
on judicial construction of pt 4 of the Constitution’.

Industrial adjudication has broadly treated puja bonus or customary bonus under two heads: (i) An implied contract
between the employers and the employees, creating a term of employment, for the payment of bonus; or (ii) A customary
and traditional payment, even though no implied agreement can be inferred. These two heads, on the face, appear to be
distinct, but in practice, they overlap to a certain extent. Puja Bonus as an Implied Term of Contract: In the year 1949,
there was a dispute between the Bengal Chambers of Commerce, Calcutta and its employees. The industrial tribunal which
adjudicated upon the dispute, observed that Durga Puja was a national festival and it was customary to make presents to
near and dear ones and to relatives at that time. As it was difficult for poorly paid employees to make savings out of this
monthly incomes for this purpose, it had become traditional and customary in Bengal, for employers to make a monetary
grant at the time of the Puja. The Bengal Chambers of Commerce had appreciated this position and had been granting a
bonus equivalent to one month’s pay, and the tribunal had been assured that there was no intention to discontinue it. In
Mahalaxmi Cotton Mills, the labour appellate tribunal stated the following tests for determining that there was an implied
term of employment, for the payment of bonus at the time of the annual Durga Puja:

1. The payment must have been unbroken;

2. It must have continued for a sufficiently long period;

3. The length of the period would depend upon the circumstances of each case and what may be a short period, not
justifying an inference of an implied term of employment in one case, may be long enough in another; and
4. The circumstance in which the payment was made should be such as to exclude the ground that it was paid out of
bounty.83

These tests were approved and applied by the Supreme Court in Ispahani.84 In this case, a company, since its inception in
1934, had been paying one month’s wages as Puja bonus every year, irrespective of its trading results. A new company
was incorporated in 1947, which took over the trading rights and goodwill of the old company and also purchased its
properties, assets and stock-in-trade. The new company carried on its business in the same manner, in the same premises,
with the same set of workers, on the same remuneration and also continued the payment of one month’s wages as Puja
bonus, till the year 1952. As no bonus was paid in 1953, a dispute arose between the new company and its workmen,
which was referred for adjudication, along with other matters. Since it was not established that the Puja bonus had been
paid at a uniform rate of one month’s wages, for a sufficiently long time of unbroken period, the industrial tribunal rejected
the claim for a Puja bonus for 1953. But the labour appellate tribunal, in appeal, took the view that it had been proved that
the Puja bonus had become a term of employment and the workmen were, therefore, entitled to a bonus at the rate of one
month’s wages, for the year 1953. In appeal, against the award of the labour appellate tribunal, the Supreme Court said that
such a condition can be implied if it has existed over an unbroken and sufficiently long period, even in years of loss and
not paid as a bounty, and it is not essential that it should have been paid at a uniform rate. In the circumstances of the case,
it was held that there was an implied term of employment for the payment of the Puja bonus, at the rate of one month’s
wages in a year. The condition of payment at a uniform rate, discarded in this case, was adopted by the court in Grahams
Trading, and it was further held that there can be a customary bonus, unconnected with a festival.85 In Ispahani Ltd,
Wanchoo J held that the question as to whether there exists an implied term of employment, is a mixed question of a fact
and law and it is not a pure question of fact. The tribunal would, therefore, have jurisdiction to consider whether on the
facts proved before it, it could draw an inference in law, that an implied term of employment for the grant of a Puja bonus
has been established. If, on the facts proved before it, the tribunal commits an error of law, apparent on the face of the
record, in drawing an inference that an implied term of employment for the grant of a Puja bonus has been established,
such an error of law will be reviewable. With regard to the claim for puja bonus, the learned judge observed thus:

The claim for a Puja bonus in Bengal, is based on either of two grounds. It may either be a matter of a implied agreement between
the employers and the employees, creating a term of employment for the payment of the Puja bonus, or secondly, even though no
implied agreement could be inferred, it may be payable as a customary bonus.86

Explaining Isphani, the court held that once it is proved that there was an implied condition of service to pay a bonus on a
festival, some amount has to be paid under the said implied term. What the minimum would be in that behalf, must be
decided as a question of fact.87 The expression ‘customary bonus’ has not been defined in law. The dictionary meaning of
the word ‘customary’, as in the Oxford English Dictionary, is ‘usual, habitual, accustomed’, etc, as also a ‘commonly used
practise’. However, what is customary, can become contractual as well. Therefore, the two expressions are not absolutely
exclusive. Cases regarding customary bonus have often been treated as regarding festival bonus and such bonus has a

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reference to a special occasion, like a festival, for example, the Durga Puja or Kali Puja in Bengal and ‘Diwali’ in Western
India—occasions which are generally utilised by employers, to reward the service of their employees.88 Thus festival
bonus or Puja bonus is not exactly synonymous with customary bonus. In Grahams Trading Co, the Supreme Court
observed that when a question of customary and traditional bonus arises for adjudication, the considerations may be
somewhat different from those applicable to a payment of Puja bonus as an implied term of employment. In this case, the
court stated the following tests for determining the liability of the employer to pay customary or traditional bonus:

1. Whether the payment has been made over an unbroken series of years;

2. whether it has been for a sufficiently long period, though the length of the period might depend on the circumstances of
each case; even so, the period may normally, have to be longer to justify an inference of a traditional and customary
Puja bonus than may be the case for a Puja bonus based on an implied term of employment;
3. the circumstance that the payment depended upon the earning of profits, would have to be excluded and therefore, it must
be shown that payment was made in the years of loss also;
4. in dealing with the question of custom, the fact that the payment was called ex-gratia by the employer, when it was made,
would make no difference in this regard, because the proof of custom depends upon the effect of the relevant factors and
it would not be materially affected by unilateral declarations of one party, when the said declarations are inconsistent
with the course of conduct adopted by it; and
5. the payment must have been at a uniform rate throughout, to justify an inference that the payment at such and such rate
had become customary and traditional in the particular concern.89

The court also pointed out that these tests were more stringent than those in the case of Puja bonus as an implied term,
which need not be uniform, as pointed out in Isphani’s case. But in BN Elias, the court pointed out that it would be
difficult to introduce a customary payment of bonus between an employer and his employees, where the terms of service
are governed by contract, express or implied, except where the bonus may be connected with a festival, whether a Puja in
Bengal or some equally important festival in any other part of the country.90 In Jardine Henderson, it was reiterated that
customary bonus must always be connected with some festival.91 Later, in Tulsidas Khimji (supra), a majority of the court
clarified that the four so-called conditions laid down in Grahams Trading Co, are not really in the nature of conditions
precedent, but are mere circumstances which have to be taken into account for coming to the conclusion as to whether or
not a claim to the customary or traditional bonus has been made out. Hence, ‘loss’, substantial or otherwise, is not a sine
qua non for the grant of a Puja bonus, as there is no rational ground for holding that ‘payment even when there were loses’
is a condition precedent, because a company or a firm may have an unbroken record of profits, ever since it started
working. It was held that a claim for a customary bonus may be negatived on the proof that the payment was made ex-
gratia and accepted as such, or that it was unconnected with any such occasion as a festival.92

In Tocklai Experimental Station, the court again reiterated the tests laid down in Grahams Trading Co, that the amount by
way of a Puja bonus, must be shown to have been consistently paid by the employer, to his employees, from year to year,
at the same rate and it should have been paid even in the years of loss and further, that it should have had no relation to the
profits made by the employer during the current year.93 The period of payment might normally be longer to justify the
inference of a traditional customary payment of bonus, than in a case of bonus based on the implied terms of employment.
It is also necessary to prove that the payments were not dependent on the earning of profits by the management. The fact
that the payments were made even in the years of loss, is an important consideration for coming to the conclusion that the
payments were not made out of bounty.94

In Tulsidas Khimji (supra) the court candidly suggested that a claim for bonus may be negatived only on proof that a the
payment was made ex-gratia and accepted as such. In this case, the union of workmen claimed a share, at the rate of six
months’ wages, and a traditional or customary bonus, at a rate which was not clear, but which could be said to be either
three months’ or one month’s wages, plus dearness allowance, on the occasion of the Diwali festival. According to the
tribunal, the workmen had proved that such bonus had been paid at a uniform rate of one month’s basic wages plus
dearness allowance, on the occasion of the Diwali festival, for 15 years commencing from 1940-41 to 1956-57. Referring
to the arguments advanced on behalf of the employer company, that the four circumstances mentioned in the Grahams
Trading Co’s case, had not been established, the court remarked:

...what is more important to negative a plea for a customary bonus would be proof that it was made ex-gratia, and accepted as such,
or that it was unconnected with any such occasion like a festival, as laid down by this court in the case of BN Elias.95

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What is relevant for the present discussion is the consistency and predictability of the decisions rendered on the same issue
by five successive Benches presided over by the same judge of Supreme Court, ie, BP Sinha CJI. For example, in Tulsidas
Khimji, the issue related to the nature and scope of ‘customary’ or ‘puja’ bonus and the conditions governing the payment
thereof. Counsel relied on the following four conditions laid down in Grahams Trading Co: (i) that the payment has been
made over an unbroken series of years; (ii) that it has been so made for a sufficiently long period; (iii) that it has been paid
even in years of loss, and did not depend upon the earning of profits; and (iv) lastly, that the payment has been made at a
uniform rate throughout. Chief Justice Sinha (for self, Subba Rao, Mudholkar and Venkatarama Ayyar JJ, Rajagopala
Ayyangar J, dissenting) held that the said four conditions, and particularly condition (iii), were not conditions precedent,
but only circumstances which should be taken into account by the court. The observation of the learned Chief Justice ran
thus:

...it has been contended that according to the judgments of this Court, in order to establish the claim for a bonus of this kinds four
conditions must be fulfilled, namely, (1) that the payment has been made over an unbroken series of years; (2) that it has been so
made for a sufficiently long period; (3) that the payment has been made at a uniform rate throughout, and (4) lastly, that it has been
paid even in years of loss, and did not depend upon the earning of profits. It has been found by the Tribunal that the first three
conditions, if they can be so called, have been fulfilled, but that the last one has not been established and could not be established
because the firm was singularly fortunate in having an unbroken record of profits, year after year. ...Firstly, the four so-called
conditions are not really in the nature of conditions precedent but are circumstances which have been taken into account by this
Court in ...That those are circumstances, and not conditions precedent, is shown by the fact that this Court has pointed out that the
length of the period will depend upon the circumstances of each case.96 (italics supplied)

Justice Ayyangar J, dissenting, cited Ispahani, Elias, Grahams and Tocklai and observed:

The extracts...from the judgment of this Court in the Graham Trading Co. ...where it is referred to as the third condition and the
specific reference to loss in the three other decisions, particularly bearing in mind the fact that the same members of the Court had
taken part in these several decisions, and Gajendragadkar, J, took part in all the four, I feel unable to hold that the learned Judge did
not intend this to be an essential condition. In the Graham case ..., the reason for the insistence of this condition is stated, viz, that it
is only a payment during a year when there is loss that would negative the payment being a bounty. In these circumstances I do not
consider it possible to construe these judgments as laying down that payment during a year of loss, was merely a relevant
circumstance and not a necessary condition. If ... what the Court is now called on to do is only to construe these decisions, and not
consider the question afresh, I feel compelled to hold that in these several decisions this Court did lay down that this was a sine qua
non for making good the claim.97

The majority judgment delivered by Sinha CJI, in Tulsidas Khimji requires detailed analysis vis-à-vis the dissenting view
of Ayyangar J. For a better appreciation of the law, it is necessary to look at all the landmark cases. It is not in doubt that
the law relating to puja or customary bonus had evolved over a long time finally culminating in the quadruple test laid
down in Grahams Trading Co. In fact, Sinha J, as he then was, presided over the three-judge Benches that decided
Ispahani and Grahams Trading. Viewed in this background, the observation of Sinha CJI, in Tulsidas Khimji that ‘the
above four conditions prescribed in Grahams Trading were not really in the nature of conditions precedent, but were only
circumstances to be taken into account by the court’ not only sounds strange, but also runs counter to the very principles
enunciated in the earlier decisions. The further fact that the quadruple test was applied in the subsequent cases in BNElias
and Tocklai Experimental Station bears ample testimony to the proposition that all the four conditions were ‘conditions
precedent’, and not merely ‘relevant circumstances’. The dissenting view of Ayyangar J, was consistent with the settled
legal principles and was right, while that of Sinha CJI, was not only misconceived but also repugnant to the very principles
evolved by him. With great respect for the eminent Chief Justice, the seeds of inconsistency and unpredictability were
sown, though unwittingly, by him in the early 1960s itself, which acquired alarming proportions during the 1970s at the
hands of Iyer J, and others.1

In Vegetable Products, the facts were: the case of the workmen was that ‘puja bonus’ had become either an implied term
of employment between them and their employer and, hence it was customary to pay such bonus. On the basis of the
evidence, the court found that the payment for the year 1959 was ex-gratia and accepted as such by the workmen. For the
year 1960-61, the evidence further showed that the payment had been made at the rate of 30 days wages, the workmen had
given a receipt stating that the payment was a made as advance, to be adjusted against the profit bonus for the previous
year. In these circumstances, the court found itself unable to hold that there had been any payment for an unbroken number
of years, before the dispute was referred to the tribunal, for the payment of the customary or traditional bonus, on the
occasion of the Puja festival. In this case, the court reiterated the tests laid down in Grahams case, for determining as to
what exactly is a customary or festival bonus.2 In Upendra Chakraborty, the court held that the workmen had not

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succeeded in persuading it that the bonus they had received, had the characteristics of a customary bonus, as known to law
and that therefore, they were entitled to the quantification of that amount on the basis of the existence of a legal right in
them. Payment for a few years past, would not give rise to a continuing obligation to make such payment, particularly
when, from the pleadings of the parties, no custom could be spelled out. As a matter of fact, a collection backed by
intimidation and threat is most obnoxious in its nature.3 A third party, who is not the employer of the workers, represented
by the union, cannot be liable for continuing the obligation.4

In Churakulam, there was, at first, an agreement in the year 1946, relating to a bonus for the years 1947, 1948 and 1949.
The agreement was extended for the years 1950 and 1951 and there were subsequent agreements as well. But there was no
controversy in that the company had paid the bonus for nine years and that it was not at a uniform rate. So far as the year
1952 was concerned, the company’s case was that it had not paid any bonus as such, but on the other hand, it had been an
ex-gratia payment of Rs 3 to each workman. But the tribunal did not accept this plea and held that the said payment must
be treated as one having been made towards the bonus. The Supreme Court, in appeal by special leave, came to the
conclusion that the tribunal was wrong in holding that an inference could be drawn that the payment of bonus had become
an implied condition of service, in the circumstances of the case, when the payment admittedly, was not uniform and was
not connected with any festival. The court also negatived the plea of the workmen, to treat the bonus as a customary or
traditional bonus, because, apart from the fact that it was not connected with any festival, one of the essential ingredients,
viz, that the payment should have been at a uniform rate throughout, was admittedly, lacking in the case.5

In Jabalpur BK Punchayat, the workmen claimed a festival bonus at the rate of 10 per cent of their earnings, which was
claimed as an implied term of the contract of employment and as an established practice, it having been paid to them,
irrespective of profit or loss, before Diwali, every year, continuously, from 1940-41, without any break. The tribunal found
itself unable to allow this claim. In appeal by special leave, from the evidence on record, the Supreme Court found that it
was amply clear that although the employees had been receiving at least 10 per cent of their total earnings by way of
bonus, for the years 1940-41 to 1959-60, there had been no consistency in the claim to bonus throughout this period, nor
had been there any uniformity, either in the amounts paid or the grounds under which the several awards of bonus came to
be made. The only award, which indicated that the bonus was to be regarded as a Diwali bonus, was that of Bhat J, for the
period 1957-58 to 1959-60. For the period 1940-41 to 1956-57, the company never paid the bonus as a festival bonus, on
the occasion of Diwali. The amount was mostly paid under awards, but in between the awards, there was a period when it
was paid by an express agreement between the parties. Nevertheless, it was argued on behalf of the workmen that, since a
bonus payment of 10 per cent was made for a long period from the years 1940-41 to 1959-60, it had become an implied
term of contract of employment and it was to be regarded as a festival bonus. But the Supreme Court negatived the
contention in view of the law laid down in its earlier dicta. The claim of the workmen that they should be paid 10 per cent,
either as a festival bonus or under any implied term of employment, therefore, could not be accepted. Thus, for negativing
the claim of the workmen to a customary bonus, the following five factors have to be proved by the employer:

(1) The payment was made ex-gratia, by the employer;

(2) the payment was accepted by the workman as such, ie, ex-graita;

(3) the payment was not connected with the Puja or any other festival;

(4) the payment was not strictly made from year to year, at the same rate; and

(5) the payment was not made in the years of loss, it had relation to the profits made by the employer.6

The fourth circumstance mentioned in Grahams Trading is that the payment should have been made at a uniform rate,
throughout. It does not mean that uniformity should be established from the beginning to the end. For instance, take a case
where for the first few years, payment at some different, but uniform rate, had been made. However, after those first few
years, the payment was made at a new rate, which has been strictly followed till the current year. In such circumstances,
the tribunal may very well come to the conclusion that the payment was at a uniform rate, ignoring the first few years.
Where, however, it appears, for example, that the payment for a few years was at one rate, say X, for the next few years, at
the rate of X minus Y, for another few years at the rate of Y, and for the last years, at the rate of X plus Y and then a
dispute arises, it may be said, in those circumstances, that the payment had not been made at a uniform rate.7 Hence, where
an implied condition of service for the payment of a festival bonus is established, but the amounts so paid in the past years
are not the same from year to year, the tribunal has to determine the minimum amount which has always been paid, for an
unbroken period of time.8 Once it is proved that there was such an implied condition of service, some amount has to be
paid under the said implied term, and what the minimum amount would be in that behalf, must be decided as a question of
fact, on the evidence produced by the parties. The amount of the minimum bonus so payable as a condition of service, has
to be paid to the workmen, even if there has been a loss in any given year. Likewise, since the payment of such bonus does
not have any of the incidents of a profit bonus, even when the profit position of the employer, in any year in the future, is

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such as to enable him to pay more, he cannot be compelled to pay anything more, by way of the festival bonus, than the
minimum which has been determined.9

In New Maneckchowk, the Supreme Court was considering the terms of an agreement, the latter providing for the
calculation of the bonus for each of the member units of the textile industry, in a manner fundamentally different in some
respects, from the manner evolved by the Full Bench Formula. The agreement had expired by afflux of time, but was
extended by the Bombay Industrial Court for another period of one year, between the same parties, on the ground that it
had worked out satisfactorily and fairly for both the parties. The question, therefore, arose: whether the payment of such
goodwill bonus could be imposed by industrial adjudication, on an unwilling employer, on the ground of industrial peace?
Wanchoo J, speaking for the majority of the court, observed:

In particular, by extending the agreement, the tribunal has made it possible for the payment of a minimum bonus, even when there
was either insufficient available surplus to pay bonus or no available surplus at all or even an actual loss; the tribunal was thus,
definitely going against the industrial law relating to bonus, as laid down by the court.10

It was, however, urged on behalf of the union, that there is a fifth kind of bonus, namely, a goodwill bonus and that the
agreement, when it provides for a minimum bonus, irrespective of the availability of profits, provides for such bonus in the
interests of industrial peace. But the court said that it is enough to say that so far as what is called the goodwill bonus is
concerned, it pre supposes that it is given by the employer out of his own free will, without any compulsion by an
industrial court. As its very name implies, it is a bonus which is given by the employer out of his free consent, in order that
there may be goodwill between him and his workmen; but there can be no question of imposing a good will bonus by
industrial courts, as imposition of such a bonus would be a contradiction of its very concept. But Subba Rao J, dissented
and said:

An industrial tribunal can extend an existing agreement or make a new one, if, for good reasons, it comes to the conclusion that
such extension promotes industrial peace, if as I have held, the impugned pact was lawful and did not contravene the law as laid
down by this court. The industrial court, in the present case, was certainly within its rights, to extend that pact for another year, for
the very good reasons given by it for doing so. 11

Thus, according to Subba Rao J, the tribunal had the jurisdiction to extend the agreement (providing for goodwill bonus)
for another year, whereas, according to the majority, the tribunal did not have the jurisdiction. Profit Sharing Bonus: a
profit sharing bonus is one of the main fringe benefits. Starting as a gratuitous payment, it has now become a statutory
term of employment of a workman. The Payment of Bonus Act 1965, covers the subject-matter of payments and
computation of the profit sharing bonus. Any dispute between the employer and his employees, regarding the payment of
bonus under the Payment of Bonus Act, with respect to the application of that Act to an establishment in the public sector,
is, by virtue of s 20 of that Act, to be deemed to be an industrial dispute within the meaning of s 2(k) of the IDA. For
instance, an industrial dispute regarding ‘payment of different amounts of bonus, in cash, to employees of the same
company, in its different units’ would be deemed to be an industrial dispute.12

The dissenting judgement of subba Rao J calls for some analysis. As rightly pointed out by Wanchoo J, the formula for
calculating the available surplus was substantially different from the Full Bench Formula (‘FBF’), and was devised and
incorporated in an agreement reached by the parties much before the FBF became the law of the land. The said agreement
was to be in operation for a period of five years. In the appeal, the power of tribunal extending the said agreement was
challenged. Justice Subba Rao proceeded to deal with the issue on the sole ground that the tribunal had the power to extend
an existing agreement and/or create new obligations, which was not disputed by the majority decision delivered by
Wanchoo J. What was materially at issue was not so much the power of tribunal to extend an existing agreement as the
very formula to be applied for arriving at the ‘available surplus’. The said agreement between the parties differed from the
FBF in three vital aspects, ie: (a) rehabilitation; (b) payment of bonus even when there is no available surplus and even
when a mill had incurred loss; and (c) treating each year as a self-sufficient unit with no provision for set-on and set-off.
That being the factual position, the Tribunal had no locus standi to extend the agreement for one more year, as it would
prejudicially affect the interests of employers, given the fundamental fact that, for the purpose of computing ‘profit-sharing
bonus’, it is only the accounting year which constitutes the unit, and not the performance of the company in the previous
years. That apart, such extension of the agreement would run counter to the FBF to the detriment of the employer. This
position is further buttressed by the fact that during the period, there was no provision for set on and set off of allocable
surplus, and the courts accepted the principle of calculating bonus on the basis of gross profits and available surplus of
each accounting year independent of any other factor.

The concern voiced by Subba Rao, J, for maintaining industrial peace was not a relevant factor and, at any rate, not at the

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cost and annihilation of one party in favour of the other. Once the FBF was approved by the Supreme Court its totality,
which also prescribed the mode of computing gross profits and available surplus, any other formula that was in vogue and
was repugnant to it should yield place to the one laid down by the Supreme Court in the larger interests of maintaining
uniformity. The very fact that a staggering 58 Special Leave Petitions were filed against the tribunal’s award shows the
volatile character of ‘bonus’ and the magnitude of the issue involved. With great respect for the eminent judge, it is
submitted that Subba Rao J, based his dissent on the narrow view of the ‘power to extend existing agreements’ and
‘maintaining industrial peace’, to the exclusion of other issues of vital significance, which alone had a bearing on the
question of ‘profit-sharing bonus’. His further observation at (4) above to the effect that ‘the impugned five-year pact is not
contrary to industrial law as laid down by this Court; indeed, it expressly followed the principles laid down in the Full
Bench Formula which was subsequently affirmed by this Court’ is equally misplaced and factually incorrect in the face of
a glaring departure on three counts, as discussed above. The majority decision is right and that of Subba Rao J, wrong.

General Amenities

The provision for various welfare amenities to be made available to the working class, is enshrined in the Directive
Principles of the State Policy in our Constitution, and in its application to the working class, it secures for them, just and
humane conditions of work. But what these actually imply, cannot be specified in rigid terms for all times, because the
concept of ‘welfare’ is necessarily dynamic, bearing a different interpretation from country to country and from time to
time, and even in the same country, according to its value system, social institutions, degree of industrialisation and
general level of social and economic development. Even within one country, its concept may be different from region to
region.13 According to the pre-independence notions, it could cover, apart from known amenities, items like housing,
medical and educational facilities, cooperative societies, holidays with pay and social insurance measures.14 The study
team appointed by the Government of India in 1959, to examine the labour welfare activities then existing, divided the
entire range of these activities into three groups, viz, (i) welfare within the precincts of an establishment-medical aid,
crèches, canteens, supply of drinking water, etc, (ii) welfare outside the establishment-provision for indoor and outdoor
recreation, housing, adult education, visual instruction, etc and (iii) social security. The committee of experts on welfare
facilities for industrial workers, convened by the ILO in 1963, had divided welfare services into two groups, viz, (1) those
within the precincts of the establishment and (2) those outside the establishment, which are reproduced as follows:

1. Welfare and amenities within the precincts of the establishment. (l) Latrines and urinals, (2) washing and bathing
facilities, (3) crèches, (4) rest shelters and canteens, (5) arrangements for drinking water, (6) arrangements for
prevention of fatigue, (7) health services, including occupational safety, (8) administrative arrangement within a plant, to
look after welfare, (9) uniforms and protective clothing, and (10) shift allowance.
2. Welfare outside the establishment. (1) Maternity benefit, (2) Social insurance measures, including gratuity, pension,
provident fund and rehabilitation, (3) benevolent funds, (4) medical facilities, including programmes for physical fitness
and efficiency, family planning and child welfare, (5) education facilities, including adult education, (6) housing
facilities, (7) recreation facilities, including sports, cultural activities, library and reading rooms, (8) holidays homes and
leave travel facilities, (9) workers’ co-operatives, including consumers’ co-operative stores, fair price shops and co-
operative thrift and credit societies, (10) vocational training for dependents of workers, (11) other programmes for the
welfare of women, youth and children, and (12) transport to and from the place of work15

Though the provision of schools, canteens, crèches and recreation-homes, reading rooms, games, including indoor games,
etc, have become a part of the amenities generally provided by the industries to the workmen, industrial adjudication has to
take various facts into consideration before directing an employer to provide such facilities. In Dharangadhara, the
demand that the employer should himself establish a school for the education of the children of the workmen, was rejected
by the Supreme Court, as it was impossible to put a permanent structure for a school in the land where the industry was
situated, particularly when there was a school already in existence, within a distance of three to four miles and furthermore,
when the workmen were getting fair wages and the employer was not in a position to bear the burden of the cost of
providing a school. In view of these facts, the court also rejected the demand of the workmen, for being provided with a
recreation home with a canteen, a reading room and indoor games for their use.16 In IGN Rly, the company had already
provided canteen facilities to the workmen. But the industrial tribunal directed the company to improve and enlarge the
arrangements and further, that the workers should be given wholesome food at prices lower than the prevailing market
rates. The Supreme Court modified the award and applied the provisions of the Bengal Factory Rules 1949, which
contained provisions on the question of accommodation to be provided in r 67 and provisions as regards the prices to be
charged in r 69 in ch V, and directed the company accordingly.17

Retiral Benefits

Retiral benefits, such as provident fund, gratuity and pension schemes, have been common in certain governmental

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employments. Such schemes were also introduced for their employees, by certain enlightened employers. In addition to
such benefits, the Industrial Disputes Act also makes statutory provisions for compensation on the termination of the
service of an employee by way of retrenchment, on a transfer or closure of an undertaking. Such social security measures
have introduced an element of stability and protection in the midst of the stress and strains of modern industrial life. In this
connection, the following observations of the national commission on labour are noteworthy:

It is a major aspect of public policy today and the extent of its prevalence is a measure of the progress made by a country towards
the ideal of a welfare state ... social security envisages that the members of a community shall be protected by collective action,
against social risks causing undue hardship and privation to individuals, whose private resources can seldom be adequate to meet
them. It covers, through an appropriate organisation, certain risks to which a person is exposed. These risks are such that an
individual of small means cannot effectively provide for them by his own ability or foresight alone, or even in private combination
with his colleagues. The concept of social security is based on the ideals of human dignity and social justice. The underlying ideal
behind social security measures is that a citizen who has contributed or is likely to contribute to his country’s welfare, should be
given protection against certain hazards.18

Provident Fund

The provision of provident fund has also been recognised as a term of condition of employment, for industrial workmen.
Legislative measures have imposed the requirements of creating a provident fund, on the employers and employees
statutorily, in certain types of industries. But in the industries where these statutes do not apply, the provision for provident
fund schemes by industrial adjudication on the lines of the Employees’ Provident Fund Act, has become almost a normal
feature.19 However, in such cases, the provident fund schemes can only be awarded, if the establishment has the financial
capacity to bear the burden. In introducing a retrial benefit like a provident fund scheme, industrial adjudication has,
therefore, to consider first and foremost, the financial capacity of the employer to bear the burden imposed. For this
purpose, the adjudicator has also to take into account, the future prospects of the concern.20 But the burden of proof to
show that the employer does not have the financial capacity, is on the employer. In other words, it is for the employer to
show, by adducing the relevant evidence, that the liability imposed by the introduction of the provident fund scheme is
excessive and is beyond his paying capacity. After ascertaining the financial capacity of the employer, he has further to
consider the practice prevailing in the other comparable units of the same industry in the region.21

French Motor Car, provides an instance where the Supreme Court curtailed the unwarranted enhancement made by the
tribunal in the rate of the provident fund contribution to be made by the employer. The company had a scheme of provident
fund under which the rate of contribution by the employer was 81½ per cent of the basic pay. But, on the Employees’
Provident Fund Act 1952 and the Employees’ Provident Fund Scheme 1952 being applied to the motor car industries in
1960, the company changed the rate to 61¼ per cent of the gross earnings, ie, basic pay plus dearness allowance, in
accordance with the Act and the scheme. The tribunal fixed the employers’ contribution at eight per cent of the gross
earning, ie, basic wage plus dearness allowance. The only reason given by the tribunal for raising the contribution was that
such a rate was, recommended by the technical committee some time before the award after a thorough study of the
problem from all points of view as being fit for adoption by well-established and prosperous concerns like the company,
and, legislation on the lines of the committee’s recommendations, was under contemplation. While modifying the award
fixing the rate of contribution at 61¼ per centum of the gross earnings (basic pay plus dearness allowance), Wanchoo J
observed:

... but the fact remains that no law has so far been made, making any change in the rate of contribution. We see no reason why
simply because some recommendation, which is still to be implemented, has been made by a committee, that the contribution
should be increased to eight per centum in the case of the appellant company only, when the general rate is only 6 per cent per
centum. 22

Gratuity

In the early stages of industrial adjudication, gratuity was treated as a gift of payment, gratuitously made by an employer to
his employees at his pleasure and the workman had no right to claim it. But gradually gratuity came to be treated as a term
of employment and industrial adjudication started treating it as a reward paid to the workmen for the long, good, efficient,
faithful and meritorious service rendered by them to the employer, for a fairly substantial and long period.23 It came to be
regarded as a legitimate claim which the industrial workmen could make and which, in appropriate cases, might give rise
to an industrial dispute. Thus, industrial jurisprudence came to recognise gratuity as some sort of retrial benefit available to
an employee, for his long and continuous meritorious service.24 The object of so providing a gratuity scheme was to
provide a retiring benefit to workmen, who had rendered a long and unblemished service to the employer and thereby,

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contributed to his prosperity. It is one of the efficiency devices and is considered necessary for an ‘orderly and humane
elimination’ from industry, of superannuated or disabled employees who, but for such retiring benefit, would continue in
employment even though they function in-efficiently.25 The general principle underlying gratuity was that by virtue of the
length of their service, workmen were entitled to claim a certain amount as their retiral benefit.26 But, since the Parliament
passed the Payment of Gratuity Act 1972, which comprehensively covers the law relating to gratuity, most of these
decisions do not hold the field. A detailed discussion of the subject of gratuity is beyond the scope of this work.

Retrenchment Compensation

Section 25F makes a provision for the payment of compensation to industrial employees when their services are terminated
by way of retrenchment, on their becoming surplusage. Section 25FF makes provision for a similar compensation being
paid to the workmen, on the transfer of the undertaking from one employer to another, Likewise, s 25FFF makes a
provision for the payment of similar compensation to workmen, on the closure of the undertaking of the employer.
Compensation under these provisions has been made a statutory term of employment or condition of labour of the
industrial employees. For a detailed discussion, see the notes and comments under those sections.

Pension

Like the provident fund, pension is also a measure of security for old age, inability and death of the bread-winner. The
provident fund is not an adequate cover. for the contingencies of death and inability. Hence, in certain industries, where the
financial capacity permits, the employers introduce pension schemes for providing such security to their workmen. A
scheme of pension is different in scope and content from a provident fund scheme and a gratuity scheme. A provident fund
scheme postulates a certain amount of contribution by the employer and equivalent amount of contribution by the
employee, payable on his retirement or death. A pension is a periodic payment of a stated sum. These schemes have much
in common, as they are all ‘efficiency devices’, and are considered necessary for an ‘orderly and humane elimination’ from
industry, of superannuated or disabled employees. A single judge of the Assam and Nagaland High Court held that after
the scheme has been brought into force by an employer, it is no longer a matter of bounty and the scheme has to be
enforced and the management cannot refuse pension as a condition of service to the retired employees. A mere mention of
certain period in the hypothetical illustration contained in the scheme, for the purpose of calculation and computation of
pension, did not limit the time regarding the pension, and from that it could not be inferred that, the scheme was not for
life.27

Miscellaneous Service Conditions

It is not permissible for an industrial establishment to have two sets of Standing Orders to govern the relevant terms and
conditions of the service of its employees. Such a change would not be permissible under the Industrial Employment
(Standing Orders) Act 1946, even if the proposed changes do not affect the existing rights of the employees.28 The
condition of service, that an unmarried woman in a particular department, has to resign on her marriage, was held to be
unreasonable and was abrogated in the interests of social justice.29 On the facts of the under-noted case,30 certain workmen
who were not given employment in a particular season in a sugar factory, as provided in the relevant Standing Orders,
were held to be entitled to the compensation awarded by the labour court, and were also entitled to preferred for
employment, in the succeeding seasons, over those to whom compensation had been awarded by the labour court, subject,
however, in the instance of a preference being given to the workmen to whom compensation had been awarded, over new
men, in case such workmen applied for employment in the succeeding seasons. The demand of the workmen that the
office-bearers of a trade union should not be transferred, so long as they are office-bearers, can be the subject-matter of an
industrial dispute, as it is intimately connected with the conditions of service.31 Similarly, a dispute relating to a change of
the designations of employees and increase of the pay-scales, relate to the terms of employment.32 ‘The badli workmen
have no right to claim to be made permanent.33 The deployment or reduction of cabin crew complement, as also the matter
of standard force or pattern of crew scheduling in an airline service, is essentially a managerial function and cannot be
interfered with in industrial adjudication.34 A concession given to some workmen to do full time work for the trade union,
will not constitute a term of employment or condition of labour. Nor will it fall within the meaning of item 8 of Sch, IV of
the Act.35 Likewise, duty relief granted to an office-bearer of a trade union, would not constitute a condition of service.36 A
dispute as to who is the elected President of a trade union of workmen, will not fall within the ambit of the definition of an
‘industrial dispute’, because it is not connected with the employment or non-employment or terms of employment or with
the condition of labour of any person. Such a dispute is for the civil court to decide.37

‘Any Person’

The expression ‘any person’, in the end of the definition of an ‘industrial dispute’, is not subject to any qualification,
restriction or limitation as to its scope. The word ‘person’ has not been limited to ‘workman’, nor is it co-extensive with
‘any workman’, potential or otherwise. Though the expression must receive a more general meaning, it cannot mean

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‘anybody or everybody in this wide world’. If the expression is given its ordinary meaning, then the definition will become
inconsistent with the objects and other provisions of the Act and also the other parts of the definition itself. The
requirement of the definition, that the dispute must relate to the employment or non-employment or the terms of
employment or the conditions of labour of ‘any person’, necessarily, therefore, imports a limitation in the sense that a
‘person’ in respect of whom the employer-employee relation never existed or can never exist, cannot be the subject-matter
of an industrial dispute between the employer and the workmen.38 It, therefore, cannot include an outsider.39 In other
words, it does not mean any person unconnected with the disputants in relation to which the dispute is not of the kind
described in the definition. It is not the intention of the legislature to create a situation where, though the dispute does not
concern them in the least, workmen are entitled to fight it out on behalf of the ‘non-workmen’.40

In NK Sen, Chagla CJ of the Bombay High Court illustrated the absurdity of construing these words without any limitation
or qualification, whatsoever, and expounded the crucial test of direct and substantial interest of the workmen in the
employment, non-employment or the terms of employment or the conditions of labour of the person concerned and further
observed that in the absence of such interest, no industrial dispute could be raised with regard to such a person. The
dispute, in this case, arose out of the dismissal of the medical officer of a tea estate, who was not a workman as defined in s
2(s). From the context of the definition of ‘industrial dispute’ and its setting in the Act, the court applied limitations on the
construction of the expression ‘any person’, in the sense that a person in respect of whom the employer-employee relation
never existed or can never possibly exist, cannot be the subject-matter of a dispute between the employers and the
workmen. It was, therefore, held that ‘any person’ in the definition clause, means a person in whose employment or non-
employment, terms of employment, or conditions of labour, the workmen as a class, have a direct and substantial
interest—with whom they have, under the scheme of the Act, a community of interest. It is the community of interest of
the class as a whole—the class of employers or class of workmen—which furnishes the clear nexus between the dispute
and the parties to the dispute, it was observed that in cases where a party to the dispute is composed of aggrieved workmen
themselves and the subject-matter of the dispute relates to them or any of them, they clearly have a direct interest in the
dispute. Likewise, where a party to the dispute, composed of workmen espousing the cause of another person, whose
employment or non-employment etc, may prejudicially affect their interest, the workmen have a substantial interest in the
subject-matter of the dispute. In both such cases, the dispute is an industrial dispute.41 Thus, the majority not only approved
the view of the Bombay High Court, but also, on its own reasoning, reached the same conclusion by approaching the
question from a somewhat different standpoint. On a review of the earlier decisions of the labour’ appellate tribunal and
various High Courts, the court stressed that the crucial test is one of community of interest with the concerned person, and
subjected the construction of the expression ‘any person’ to the following two limitations:

(1) The dispute must be a real dispute between the parties to the dispute (indicated in the first two parts of the definition
clause) so as to be capable of settlement or adjudication by one party to the dispute, giving the necessary relief to the
other; and
(2) The person regarding whom the dispute is raised, must be one in whose employment, non-employment, terms of
employment or conditions of labour, (as the case may be) the parties to the dispute have a direct or substantial interest.42

In the absence of such direct and substantial interest, the dispute cannot be said to be a real dispute between the parties.
The person with respect to whom a dispute is raised by the workmen, must be one in whose employment, non-
employment, terms of employment or conditions of labour, the workmen as a class, have a direct or substantial interest,
though he need not be, strictly speaking, a workman within the meaning of s 2(s) of the Act. The majority decision in the
Dimakuchi Tea Estate case was approved by a larger Bench of five judges of the Supreme Court, in Dahingeapara Tea
Estate.43 In Kays Construction, the court reiterated that the expression ‘industrial dispute’ is wide enough to cover a
dispute raised by the employer’s workmen in regard to the non-employment of others, also who may not be his workmen
at the material time.44 In Standard Vacuum, it was held that the workmen had a community of interest with the employees
of the contractor and they had also a substantial interest in the subject-matter of the dispute, in the sense that the class to
which they belonged, namely, workmen, was substantially affected thereby and the company could give relief in the
matter.45 In Bombay Union of Journalists, the court elucidated that the ‘community of interest’ must be regarding a direct
or substantial interest, viz, that the workmen who seek to support the cause of a person, must themselves be directly and
substantially interested in the dispute. But what a direct and substantial interest is, would depend on the facts and
circumstances of each particular case.46 In Reserve Bank of India, on the construction of the word ‘person’ in s 2(k),
Hidayatullah J, held:

It may, however, be said that if the dispute is regarding employment, non-employment, terms of employment or conditions of
labour of non-workmen, in which workmen are themselves vitally interested, the workmen may be able to raise an industrial
dispute. Workmen can, for example, raise a dispute that a class of employees, not within the definition of workmen, should be
recruited by promotion from workmen. When they do so, the workmen raise a dispute about the terms of their own employment,

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though incidentally, the terms of those who are not workmen, are involved. But workmen cannot take up a dispute in respect of a
class of employees who are not workmen and in whose terms of employment those workmen have no direct interest of their own.
What direct interest suffices is a question of fact, but it must be a real and positive interest and not fanciful or remote.47

In Greaves Cotton, Jaganmohan Reddy J observed:

The consistent view of this court is that non-workmen as well as workmen, can raise a dispute in respect of matters affecting their
employment, conditions of service etc, where they have a community of interest provided they are direct and are not remote.

This statement of law is not only vague, but is positively wrong and runs counter to the spirit of the ID Act and the earlier
decisions of the Court. In Andhra Bank, an industrial dispute raised by the clerical staff of the bank, who were workmen,
relating to the grade III officers, was referred for adjudication. Their grievance was that the promotion made to the
category of grade III officers, who were, admittedly, non-workmen, by fitment, was discriminatory. Reversing the holding
of the single judge, the Andhra Pradesh High Court held that while raising a dispute about the terms of their own
employment, though incidentally, the terms of employment of the grade III officers (who were not workmen) were also
involved, the clerical staff were not agitating for a revision of the pay scales of the grade III officers. The clerical staff,
therefore, had a direct interest in the matter, for their next stage of promotion, to the category of grade III officers by
fitment. In the circumstances, the dispute was validly raised and referred.48 In Indian Bank, the facts were: by an agreement
between the bank and the union, the bank was bound to fill a fixed percentage of the posts of officers from amongst the
clerical cadre staff. The bank promoted certain members of its clerical cadre staff as officers and posted them in its
branches. These officers were not allowed the benefit of two additional increments, which were, however, given to the
officers of the same grade, who were not promoted from the clerical cadre staff. This discrimination led to a dispute,
between the bank and its workmen, which culminated in a reference of the dispute for adjudication. The tribunal over-ruled
the preliminary objection of the bank that the dispute was not an industrial dispute, because the officers whose terms of
employment were disputed before it, were not ‘workmen’. In writ proceedings, the High Court discountenanced the
contention of the employer that the dispute could not be an ‘industrial dispute’ because it related to the conditions of
service of the employees who were non-workmen out and out, and held that the workmen who raised the dispute were
really fighting for their own conditions of service ie, the conditions of service which would obtain for them when they
would be promoted as officers. Accordingly, the interest of the workmen in the determination of the conditions of service
of the promotee officers, was neither remote nor unsubstantial, but was direct and vital in view of the fact that a fixed
percentage of the higher posts had to go to them. The court further observed that Andhra Bank was based on a
misunderstanding of the dicta of the Supreme Court. But the person in whose employment or non-employment etc, the
workmen are directly or substantially interested, must be a definite person. Logically, there can be no interest of the
workmen in indefinite or vague persons.49

In Hindustan Lever, a single judge of the Delhi High Court held that there can be no interest or nexus between the
workmen and the vacancies resulting from resignations or retirements of the employees under the management. Such
interest in filling up the vacancies, was ‘fanciful or remote’ and was in no sense, direct. The dispute raised by the workmen
relating to the filling up of such vacancies, was abstract and amorphous.50 The Act has used the expression ‘any person’
and not ‘any post’, and the workmen could not fight a battle for those nonexistent persons, who might or might not be
appointed by the management to the vacant posts. On the other hand, a single judge of the Madras High Court, held that a
dispute relating to the fixing of a ratio between the heirs and dependents of the workmen, and the outsiders, in the matter of
recruitment, would constitute an industrial dispute, because the workmen as a class, have a substantial community of
interest in the employment of their heirs and dependents.51 In other words, the heirs and dependents of the workmen would
fall within the ambit of the expression ‘any person’. Therefore, the dispute is an ‘industrial dispute’. If this holding is
correct, then a demand by the workmen, that nobody other than the heirs or dependents should be employed, would also
fall within the ambit of an ‘industrial’ dispute, which will lead to a logical absurdity. Furthermore, the heirs and
dependents of the workmen cannot be definite persons, in whose employment or non-employment, at the time of making
the demand of fixing the ratio, the workmen could have been interested. The dispute, therefore, was relating to the
employment or non-employment of vague and non-existent persons. This decision is clearly wrong. It was for the
employer to plead and prove that there was no ‘community of interest’ between the person concerned and the other
workmen of his establishment, in order to establish that the dispute or question was not an ‘industrial dispute’ but on
general principles of pleading and evidence, the burden of proof should be on the workmen, to show that they have a
‘community of interest’ with the person concerned, for bringing the dispute within the purview of the definition of an
industrial dispute.52

Illustrations

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A tea estate was sold as a going concern and the purchaser continued to employ the labour and some members of the staff
of the vendor. The dispute raised by such workmen, regarding the discharged workmen, was held to be an industrial
dispute, as the discharged workmen were the persons in whose employment or non-employment, the actual workmen of
the purchaser of the estate, had a direct and substantial interest, though the discharged workmen were not, strictly
speaking, workmen of the purchaser.53 A proprietary business was taken over by a private limited company, in which the
former proprietor, his wife and the former manager became directors. The new company refused to take into service,
certain workmen employed by the former concern. The dispute raised by the workmen of the company with respect to the
non-employment of the workmen of the previous concern, was held to be a dispute in connection with the non-
employment of the persons in whose employment and non-employment, the workmen of the company had a direct and
substantial interest.54 The workmen employed in Standard Vacuum Refining Co, raised a dispute that the contract system
of labour, adopted by the company, for the cleaning and maintenance of the refinery (plant and machinery) belonging to
the company, should be abolished. It was held that, though the persons working under the contractor were not the workmen
of the company, the workmen of the company had a real and substantial interest in the question of the employment of
contract labour for the work of the company.55 A dispute between the workmen of a company managed by a managing
agency company, regarding the promotion of a person employed as an assistant factory supervisor in another company,
managed by the same managing agency company, was held to be an industrial dispute, because the workmen raising the
dispute had a real and substantial interest in the dispute, as there was a common register of the employees, for the purposes
of granting promotion to the senior most workmen in the common register.56 A claim put up on behalf of the retrenched
employees of an establishment, for additional bonus, was held to be an industrial dispute, because the workmen had a
direct and substantial interest in the matter of such bonus being paid in future, to the retrenched workmen.57 A dispute
regarding the employment of casual workmen, taken up by the regular workmen employed in an establishment, was held to
be an industrial dispute, as the workmen had a community of interest with the cause of the casual workmen.58 The cause of
a dismissed member of the clerical staff, ie, a time-keeper, in a textile mill, espoused by other non-staff workmen, through
their union was held to have assumed the character of an industrial dispute, notwithstanding the fact that the workmen who
espoused the cause were not members of the clerical union, because such workmen had a community of interest with the
dismissed workman.59

In Mukand Ltd, the brief facts, to the extent they are relevant to the present discussion, were: The company concluded a
Settlement with Mukand Staff and Officers Association in 1974 whereby the welfare scheme framed for the staff and
officers, jointly funded and managed by the company and the Association did not create any condition of service.
Admittedly, it appears that the Association is a composite union of employees who answer to the definition of ‘workman’
and a few other employees, who did not strictly fall within the ambit of the said definition. The company concluded a
Settlement in 1982 covering service conditions of all staff and officers including those in grades 01 and 00, and another
settlement in 1989, which inter alia stipulated:

It is the Company’s contention that a substantial number of the staff, not being ‘workmen’ under Section 2(s) of the Industrial
Disputes Act, 1947 (hereinafter referred to as ‘the Act’) are not covered by the provisions of the Act. Without prejudice to the
rights and contentions of both the parties with regard to the applicability of the provisions of the Act, the parties have reached a
comprehensive Settlement covering in addition to the demands made in the said ‘Charter of Demands’, the issue of annual bonus
as well, under Sections 12(3) and 18(3) of the Act read with Rule 62 of the Industrial Disputes (Bombay) Rules, 1957 in
conciliation proceedings on the following terms. ...This Settlement did not cover employees in Grade 01 and 00 who are General
Foremen or Senior Officers and Asstt. General Foremen or Officers. (Italics supplied)

The disposition of the management towards the Association and the quality of drafting manifested in the above settlement,
which are considered critical in the overall management of industrial relations in an undertaking, are not being dealt with
here. What is relevant for the topic under discussion is that on 4 November 1991, the Association served a Charter of
Demands on the Company. Failure report was submitted by Conciliation Officer followed by reference by the Government
of Maharashtra on 17 February 1993, which ran thus:

...Whereas the Government of Maharashtra has considered the report submitted by the Conciliation Officer under sub-section (4) of
Section 12 ... in respect of the dispute between M/s Mukand Ltd. ... and the workmen employed under them, over the demands
mentioned in the schedule appended hereto. ... after considering the aforesaid report is satisfied that there is a case for reference to
the dispute to an Industrial Tribunal....60 (Italics supplied).

Before the tribunal, the management contended that, barring a few employees, the bulk of them were not ‘workmen’ as
defined in s 2(s) and that the tribunal had no jurisdiction to grant any relief to the employees who fell outside the scope of
the said definition. Despite this, the tribunal proceeded to pass the award covering all the grades, ie, Grade 12 to Grade 01

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& 00 (in the ascending order, the Grades 01 & 00 representing General Foremen/Senior Officers and Asst General
Foremen/Officers), directing the company to pay (i) an ad hoc amount to Rs 500/- per month to all employees in Grades 12
to 00; and (ii) by its interim Award Part-II, directed payment of employees on the basis of basic pay slab an ad hoc amount
ranging from Rs 375/- to Rs 1050/- per month to employees who had not been granted additional ad hoc payment by the
appellant-Company. After prolonged litigation in the High Court, the matter landed in the Supreme Court. Quashing the
orders of the lower courts and remanding the matter to the tribunal with a direction to adjudicate the matter in accordance
with law, Dr Lakshmanan J (for self and Sabharwal J), held:

The dispute referred to by the order of Reference is only in respect of workmen employed by the appellant-Company. It is,
therefore, clear that the Tribunal, being a creature of the Reference, cannot adjudicate matters not within the purview of the
dispute actually referred to it by the order of Reference. In the facts and circumstances of the present case, the Tribunal could not
have adjudicated the issues of the salaries of the employees who are not workmen under the Act nor could it have covered such
employees by its award. Even assuming, without admitting, that the Reference covered the non-workmen, the Tribunal, acting
within its jurisdiction under the Act, could not have adjudicated the dispute insofar as it related to the ‘non-workmen’. ... In the
instant case, the employer and the employees by their conduct in concluding settlements in the past could not create for, or confer
upon, an adjudicating authority jurisdiction, where none existed, in respect of employees to whom the provisions of the Act are not
applicable. This apart, the employer had not waived his right to raise the issue of the status of the employees under the Act in any
of these settlements. The employer cannot held (sic) to have waived his rights regarding the issue of the status of the employees
under the Act in the absence of any of the settlements concluded by them with their employees. The High Court has come to the
conclusion that there are grave and fundamental errors, including the errors in assessing financial capacity, burden etc. in the award
of the Tribunal. ... The Division Bench has erred in holding that there is a community of interest between the workmen and the
non-workmen and holding further that the workmen can raise a dispute regarding the service conditions of non-workmen. This
reasoning, in the absence of any pleading regarding the community of interest, is fallacious. (Paras 23 & 49) (Italics supplied).

It is submitted that this case was rightly decided. The tribunal, while adjudicating the dispute, lost sight of the essential
features of the case, and proceeded to decide the issue relating to ‘non-workmen’, who clearly fall outside the pale of ID
Act, thereby exceeding its legitimate confines.

‘Industry’ and ‘Industrial Dispute’

The statutory definition of an ‘industrial dispute’ makes no mention as to the purpose that an industrial dispute must have.
But union affairs and activities have revealed that though certain types of disputes may be urged as falling within the ambit
of ‘industrial dispute’, yet, they cannot be treated as ‘industrial disputes’. To meet such cases, the courts have, in effect,
established that the word ‘industrial’ in the phrase ‘industrial dispute’, implies that a dispute connected with the ‘terms and
conditions’ or the questions of employment of any person is an industrial dispute only if it relates to an ‘industry’. In other
words, the definition discloses that disputes of particular kinds alone are regarded as industrial disputes. It may be noticed
that the definition of ‘industrial dispute’ does not refer to an ‘industry’. But an industrial dispute, on the grammar of the
expression itself, means a dispute in an industry.61 Moreover, the expressions ‘employers’ and ‘workmen’ used in the
definition of ‘industrial dispute’, carry the requirements of an ‘industry’ in that definition by virtue of their own definitions
in ss 2(g) and 2(s) of the Act.62 The definition of ‘industrial dispute’, therefore, pre-supposes the continued existence of the
industry.63 In Madras Gymkhana, Hidayatullah J held that the adjective ‘industrial’ in the definition of ‘industrial dispute’,
relates the dispute to an ‘industry, as defined in s 2(j) of the Act, “industry is the nexus between employers and employees
and it is this nexus, which brings two distinct bodies together”. The learned judge further observed:

Primarily, therefore, industrial disputes occur when the operation undertaken rests upon the co-operation between employers and
employees, with a view to production and distribution of material goods, in other words, wealth, but they may also arise in cases
where the co-operation is to produce material services. The normal cases are those in which the production or distribution is of
material goods or wealth and they will fall within the expressions ‘trade’, ‘business’ and ‘manufacture’. 64

It, therefore, follows that before an ‘industrial dispute’ can be raised between employers and employers or between
employers and their workmen or between workmen and workmen, in relation to the employment or non-employment or
the terms of employment or the conditions of labour of any person, there must first be established a relationship of
employer and employees associating together, the former following a trade, business, manufacture, undertaking or a
calling of employers, in the production of material goods and material services and the latter following any calling, service,
employment, handicraft or industrial occupation or avocation of workmen, in aid of the employer’s enterprise.65 In other
words, besides the requirements of s 2(k), unless the dispute is related to an ‘industry’ as defined in s 2 (j), it will not be an

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industrial dispute.

Clause (ka): INDUSTRIAL ESTABLISHMENT OR UNDERTAKING

General

The expression ‘industrial establishment’, ‘undertaking’ and ‘industry’, have been synonymously used at various places in
the Act. The expression, was not defined in the Act. The expression ‘undertaking’ occurs in ss 25FF, 25FFA, 25FFF, 25-O
and 25R. Section 25F uses the word ‘industry’, while s 25G uses the word ‘industrial establishment’. Since these two
sections are cognate, the word ‘industrial establishment’ as used in s 25G, has to be understood to mean an ‘industry’ as
used in s 25F. The term ‘industry’, as defined in s 2(j) of the Act includes, inter alia, an ‘undertaking’. Thus ‘undertaking’
is a narrower concept than ‘industry’. In other words, ‘industry’ is a whole of which an ‘undertaking’ may be a part. The
expression ‘undertaking’ as used in the definition of ‘industry’ was given a restricted meaning in Bangalore water
Supply.66 Thus, reading down this expression as used in the context of s 25FFF, it must mean, a ‘separate and distinct
business or commercial or trading or industrial activity’. In Hindustan Steel, the court pointed out that the word
‘undertaking’, as used in s 25FFF, appears to have been used in its ordinary sense, connoting thereby, ‘any work,
enterprise, project or business undertaking’. It is not intended to cover the entire ‘industry’ or business of the employer.67
A closure or stoppage of a part of the business or activity of the employer would seem, in law, to be covered by this sub-
section. The question, however, is to be decided on the facts of each case. But the expression ‘undertaking’ cannot
comprehend an infinitesimally small part of a manufacturing process.68 The present definition brings in the ambit of an
‘industrial establishment’ or ‘undertaking’, any establishment or undertaking in which any ‘industry’, as defined in s 2(j),
is carried on. Thus, it is the character of an activity as an ‘industry’, which brings any establishment or undertaking within
the ambit of the definition. What was hitherto implicit has now been made explicit by this definition.

Proviso

The proviso contemplates multifarious activities of certain establishments or undertakings, some of which may be
comprehended within the definition of ‘industry’ and some of which may not. In the circumstances:

(a) where the activities of any unit of such establishment or undertaking, which is an ‘industry’, is severable from the other
units of the establishment or undertaking which are not ‘industry’, such unit shall be deemed to be a separate ‘industrial
establishment or undertaking’, while the rest of the units will not fall within the definition of an ‘industrial establishment
or undertaking’. For instance, the activities of a university, which may be an establishment or undertaking, being
education, will not fall within the definition of industrial establishment or undertaking. But if the University carries on a
transport service and also maintains a workshop for the up-keep and repairs of the buses, the unit carrying on the
transport activity will be an ‘industrial establishment or undertaking’, for the purposes of this clause.
(b) if the predominant activity or each of the predominant activities carried on by an establishment or undertaking is an
‘industry’ and the other activities carried on by such undertaking or establishment are not severable from the
predominant activity, the entire establishment or undertaking shall be deemed to be an industrial establishment or
undertaking.

Clause (kk): INSURANCE COMPANY

To fall within the meaning of this definition, an ‘insurance company’ has to satisfy the following two requirements:

(i) It should be an insurance company as defined in section 2 of the Insurance Act 1938 (4 of 1938), and

(ii) it should have branches or other establishments in more than one state.

Clause (kka): KHADI

This clause has been inserted by the Amending Act 46 of 1982.69 It assigns the same meaning to the expression ‘khadi’ as
in cl (d) of s 2 of the Khadi and Village Industries Commission Act 1956, which reads:

‘Khadi’ means any cloth woven on handlooms in India from cotton, silk or woollen yarn handspun in India or from a mixture of
any two or all of such yarns;

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Clause (kkb): LABOUR COURT

This clause has been renumbered as cl (kkb) by the Amending Act 46 of 1982.70Labour courts are constituted under s 7 of
the Act. There may be one or more of such courts in a state. The Second Schedule to the Act specifies the matters within
the jurisdiction of the labour courts. But by the first proviso to sub-s (1) of s 10, the ‘appropriate Government’ has been
given the discretion to refer any matter in the Third Schedule also, to a labour court, where the dispute is likely to affect
more than one hundred workmen. Besides, the ‘appropriate Government’ has also been vested with the power to assign
certain other functions, to labour courts under the Act. Section 33C(2) confers jurisdiction on such labour courts, as may be
specified in this behalf, to determine the amount of any benefit, which is capable of being computed in terms of money.
Like industrial tribunals or national tribunals, labour courts are quasi-judicial bodies. Their functions, powers and duties
are also similar to those of industrial tribunals or national tribunals.

Clause (kkk): LAY-OFF

The Concept of Lay-off

Under the common law, an employer can terminate the services of an employee at any time, even though his business or
his industry may only be temporarily stopped and there is every prospect of a resumption of that business or industry.
There is no obligation upon the employer to temporarily, suspend the services of his employee and reinstate him when his
business or industry is resumed. He is perfectly free to dismiss him and employ new men when the business or industry
was resumed. Nor does the common law impose any obligation upon the employer, to give any compensation to an
employee, if his services are retrenched.71 But now the industrial law has made inroads in the common law right of the
employer. Though the Act, as originally enacted, did not contain a definition of ‘lay-off’, the term ‘lay-off’ was well-
recognised in the industrial arena and disputes were often raised in relation to a ‘lay-off’ of workmen, in various industries.
Industrial adjudicators sometimes awarded compensation for the period of ‘lay-off’. But many a time, when the ‘lay-off’
was found to be justified, workmen were not awarded wage-compensation.72

In Gaya Cotton Mills, the labour appellate tribunal refused to award compensation, because the Standing Orders of the
company provided that the company could, under certain circumstances, stop any machine or machines or department or
departments, wholly or partially, for any period or periods, without notice or without compensation in lieu of notice.73Even
where a compensation for the ‘lay-off’ was awarded, there was no uniformity. In order to ameliorate the difficulties of
workmen who were laid-off in such situations, the legislature made a provision for the payment of compensation for the
‘lay-off’ period and also defined ‘lay-off’ by inserting this clause in s 2 of the Act, by the Industrial Disputes
(Amendment) Act 1953 (Act 43 of 1953). The provision for compensation to workmen for the ‘lay-off’ period was made
by s 25C in ch VA inserted by the Amending Act. However, s 25A exempts ‘industrial establishments’ employing less
than fifty workmen and establishments of seasonal character or establishments in which the work is performed only
intermittently, from the application of the provisions of s 25C to 25 E. The Industrial Disputes (Amendment) Act 1976
(Act 32 of 1976) ‘has engrafted ch VB in the Act, which not only narrows down the definition of ‘lay-off’ as applicable to
the industrial establishments covered by that chapter but also subjects a ‘lay-off’ to certain stringent conditions in such
establishments.

Failure, Refusal or Inability - Meaning and Implications

In its etymological sense, a ‘lay-off’ is a ‘period during which a workman is temporarily discharged’. In other words, even
according to the dictionary meaning, ‘lay-off’ means to discontinue work or activity: to dismiss or discharge temporarily.
When workers are in employment and they are ‘laid-off’, that immediately results in their unemployment, however
temporary, and such unemployment will fall within the definition of a ‘lay-off’.74 But in its statutory sense, it is not a
temporary discharge. It means the ‘failure, refusal or inability’ of the employer, on account of shortage of coal, power or
raw materials, or the accumulations of stock, a breakdown of machinery, or for any other reason, to give employment to a
workman.75 The key to understand the definition is to be found in the words ‘failure, refusal or inability of an employer’.
From these words, it is clear that the unemployment has to be on account of a cause which is independent of any action or
inaction on the part of the workmen.76 Further, the unemployment must result from a failure, refusal or inability of an
employer, on account of the causes enumerated in the definition.77 ‘Lay-off’ means the failure, refusal or inability of the
employer, to give employment to his workmen, on account of the contingencies mentioned in the definition. It is neither a
temporary discharge of a workman, nor a temporary suspension of his contract of service. It is merely a fact of a temporary
unemployment of the workmen, in the work of the industrial establishment.78 Under the general law of master and servant,
an employer may discharge his employee, either temporarily or permanently, but that cannot be done without adequate
notice. A mere refusal or inability to give employment to a workman, when he returns for duty, on one or more grounds
mentioned in this definition, is not a temporary discharge of the workman.

(i) On Account of Shortage of Coal, Power etc

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In order to attract the definition of a lay-off, the temporary unemployment must be on account of a shortage of coal, power
or raw materials, or the accumulation of stocks, or a break down of machinery. These are the specific causes for which the
failure, refusal or inability of the employer to give work to the workmen may the justified and termed as a ‘lay-off’.79 By
the Amending Act 46 of 1982,80 the factor of vis major has been introduced by the use of the words ‘natural calamity’ to
the already specified causes. Now causes such as fire, floods and earthquakes are also comprehended in the definition.

(ii) For Any Other Connected Reason

The Amending Act 46 of 1982, has substituted the words ‘for any other connected reason’, for the words ‘for any other
reasons’. The use of the words ‘any other reason’ indicates that it was not the intention of the legislature to bring within the
definition, every possible circumstance which could result in the unemployment of the workers. The Bombay High Court,
in Central India Spg, though expressed the view that the words ‘or for any other reason’ should be limited or restricted for
the purpose of carrying into effect the provisions of the Act, further observed that:

If, in point of fact, the ‘lay-off’ was occasioned because of strikes or go-slow tactics or absenteeism of workers in other section of
the mill on which the particular section in which some workers were ‘laid-off’, was dependent, then their ‘laying-off’ could not be
deemed to fall within the definition of section 2(kkk) of the Act.81

But construing the words ‘any other reason’, the Supreme Court applied the principle of ejusdem generis in Kairbetta,
where it observed that:

Any other reason to which the definition refers must ..., be a reason which is allied or analogous to the reasons already specified’
and ‘if there is a strike or slowing down of production in one part of the establishment and if lay-off is the consequence, the reason
for which ‘lay-off’ has taken place, would undoubtedly be similar to the reason specified in the definition.82

These observations by implication, overruled the holding of the Bombay High Court in Central India Spinning. Even on
the plain reading of the language of the definition, read with s 25E(iii), the view of the Bombay High Court is untenable.
However, the question as to whether the expression ‘any other reason’ used in the definition would include a case of ‘lay-
off’ effected on account of the difficulties of the employer to secure financial assistance, was left undecided in Dewan Tea
Estate.83 The financial crisis faced by the employer, on account of the refusal of the Government to develop its land and
sell it, is absolutely irrelevant for effecting a ‘lay-off’. But a single judge of the Madras High Court has taken the view that
a temporary stoppage of roving bobbins to the weaving unit of a textile mill, pending the dismantling of the preparatory
machines at the mills and the installation of the same at such unit, amounted to a ‘lay-off as the reason was allied to or
analogous with the other specific reasons mentioned in the definition.84The Act 46 of 1982 has made explicit what was
implicit in the definition, by the use of the words ‘any other connected reason’. The reason for a ‘lay-off’ must be
connected with a reason specified in the definition. Since the financial difficulties of the employer cannot be one of the
causes connected with any of the enumerated causes, it will not fall within the ambit of the definition. The Madhya
Pradesh High Court, in Hope Textiles, held that a financial contingency is not a cause for which a ‘lay-off’ could be
imposed.85 The Gauhati High Court held that the old age or illness of the managing director, is not a permissible ground for
a lay-off.86 In SAE Mazdoor Union, a single judge of the Madhya Pradesh High Court held that the application for a lay-
off, on account of ‘lack of adequate orders’ would fall within the scope of ‘connected reasons’, and the continuance of
production, would only lead to an accumulation of stocks, and that it furnished a sufficient ground for the labour
commissioner to consider for, the grant of permission.87

Explanation

The explanation introduces a fiction in the definition, according to which, every workman whose name is borne on the
muster rolls of the industrial establishment and who presents himself for work at the establishment at the time appointed
for the purpose, during the normal hours on any day and is not given employment by the employer within two hours of his
presenting himself, shall be deemed to have been ‘laid-off’ for the day. The explanation along with the two provisos,
contains three deeming provisions. The first is that if a worker who has presented himself for work at the commencement,
is not given employment within two hours of his presenting himself, he will be deemed to have been laid off for the entire
day. The second part of this explanation provides that if the workman, instead of being given employment at the
commencement of the shift, is asked to present himself for work during the second half of the shift and is given
employment in the second half, he shall be deemed to have been ‘laid-off’ only for the first half of the day. The third part
of the explanation provides that if a workman is not given work even after presenting himself at the commencement of the

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second half of the shift, he shall not be deemed to have been laid-off and he shall be entitled to full basic wages and
dearness allowance for that second half.88

A perusal of the definition, together with the explanation, merely shows that it lays down the circumstances in which a
‘lay-off’ can come about, but without limiting it to any particular period of time. The three deeming provisions in the
explanation, with regard to the mode of calculation of the period of ‘lay-off’, would either be independent substantial
provisions, or would be by way of raising a presumption, and a conclusion with regard to the period for which the ‘lay-off’
is supposed to have been effective. This explanation has nothing to do with the ‘quality of the lay-off’. In other words,
without affecting or in any other manner, quantifying the circumstances in which a ‘lay-off’ would come under the main
definition, the explanation purports to raise a quantitative presumption with regard of the extent of the time during which
the ‘lay-off’ is deemed to be effective. In other words, there is nothing in the definition of ‘lay-off’ which prescribes the
presentation of a workman for work during the first two hours or his coming for work again at the beginning of the second
part of the shift, as a condition precedent to ‘lay-off’.89

Workman who can be Laid-off

Workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched: the
refusal, failure or inability of an employer to give work, refers only to a workman whose name is borne on the muster rolls
of his industrial establishment and who has not been retrenched. Section 25D casts a duty on the employer for maintaining
the muster rolls of the workmen. If, therefore, an employee’s name is not borne on the muster rolls of the establishment or
he has been retrenched, even if his name was borne on the muster rolls, the question of his ‘lay-off’ would not arise.

Employer’s Right to ‘lay-off’ Workman

The Bombay High Court, in MA Veiyra, expressed the view that under the general law, the management is free to dispense
with the services of a workman, but under the Act, it is under an obligation to lay him off; that being so, the action of ‘lay
off’ by the employer cannot be questioned as being ultra vires.90 In KT Rolling, dealing with a case to which the provisions
of Ch VA did not apply, as the employer at the relevant time, had employed less than fifty workmen, a majority of the Full
Bench of that High Court held that it was not open to the industrial tribunal, under this Act to have awarded ‘lay-off’
compensation to the workmen employed in an industrial establishment to which s 25C did not apply.91 A single judge of
the Kerala High Court, in South India Corpn, also observed that an industrial tribunal will have no jurisdiction to award
lay-off compensation to the workmen of an establishment, to which the Act did not apply. In this case, the Standing Orders
of the employer company provided that the normal working of the factory would be for 8 or 9 months. Hence, it could not
be held that an employer should provide work for 245 days in a year and that he would be liable, on principles of social
justice, to pay compensation for any period which falls short of it, and the statute could not be circumvented by calling the
claim compensation as unemployment compensation.92 But in Dewan Tea Estate, the Supreme Court held that s 25C does
not recognize a common law right of an industrial employer to ‘lay-off’ his workmen because the laying off under s 25C,
refers to a ‘laying off’ as defined in s 2 (kkk) and so, the workmen who can claim the benefit of s 25C must be workmen
who are laid-off and laid-off for reasons contemplated in s 2(kkk), and in the words of Gajendragadkar J:

If any case is not covered by the Standing Orders, it will necessarily be covered by the provisions of the Act, and ‘lay-off’ would
be permissible only where one or the other of the factors mentioned in section 2(kkk) is present and for such ‘lay-off’
compensation will be awarded under section 25C. 93

The last observation was made by the court, in Firestone, implies that:

If the power of ‘lay-off’ is there in the Standing Orders but the grounds of the ‘lay-off’ are not covered by them, rather are covered
by the provisions of the Act, then, ‘lay-off’ would be permissible only on one or other of the factors mentioned in clause (kkk).94

The court found further support for the proposition from the fact that ‘there is no provision in the Act, specifically
providing that an employer would be entitled to ‘lay-off’ his workmen, for the reasons prescribed by s 2(kkk) ’. In this
case, at the relevant time, the establishment of the employer employed less than fifty workmen. Hence, the provisions of s
25C were not applicable. The question for consideration, therefore, was, whether the management had a right to ‘lay-off’
their workmen and whether the workmen were entitled to claim wages or compensation for the period of ‘lay-off’? In the
absence of any power conferred on the employer by the Act to ‘lay-off’ a workman, the court observed, such power must
be found out from the terms of contract of service or Standing Orders governing the establishment. Since the Standing
Orders Act was not applicable to the establishment and the contract of employment was silent in this behalf, it was held

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that the workmen would be entitled to their full wages for the period of ‘lay-off’.95

Adjudication

‘Lay-off’ has to be resorted to by an employer as a trade exigency, when the conditions stated in s 2(kkk) occur. The
tribunal, therefore, will undoubtedly have jurisdiction to see whether any of these contingencies, in fact, did exist, due to
which the employer was unable or he failed or refused to give employment to the workmen concerned. If the requisite
conditions did not exist, the ‘lay-off’ will not be a ‘lay-off’ as defined in the Act, but it will be a mere sham. Then the
tribunal will have power to interfere and give the necessary relief to the workmen. In dealing with a ‘lay-off’, it will not be
open to the tribunal to inquire as to whether the employer could have avoided the ‘lay-off’ by being more diligent, more
vigilant or more farsighted. That is a matter relating to the management of the undertaking and unless mala fides are
alleged and proved, the tribunal can have no jurisdiction to sit in judgment over the acts of management of employer and
investigate whether a more prudent management could have avoided the situation which led to the ‘lay-off’. If the tribunal
embarks upon an inquiry as to whether the employer had shown sufficient, farsightedness in managing his affairs, it would
exceed its jurisdiction, which will be amenable to be corrected by judicial review. If the ‘lay-off’ is mala fide, in the sense
that the employer had deliberately and maliciously brought about a situation where the ‘lay-off’ became necessary, then it
is no ‘lay-off’ as contemplated by the definition. In other words, mala fides of the employer in declaring a ‘lay-off’, really
means that no ‘lay-off’ has taken place, so a finding as to mala fides of the employer in declaring a ‘lay-off’, naturally
takes such lay off out of the definition. Likewise, if a ‘lay-off’ has been declared in order to victimise the workmen or for
some other ulterior purpose, the position would be the same and it would not be a ‘lay-off’.96 But a ‘lay-off’, which merely
exceeds any particular period, is not necessarily illegal, contrary to law or mala fide. Mala fides of an employer, with
respect to his act of ‘laying-off’ his employees, have necessarily to be specifically alleged and proved before the tribunal.
In such a case, the relief provided to the laid-off workmen, under s 25C, would not be the only relief to which they would
be entitled. The workmen will be entitled to their full wages for the period of such purported ‘lay-off’.

Lay-off v Contract of Employment

The very essence of ‘lay-off’ is that it is a temporary stoppage and that within a reasonable period of time, the employer
expects that the business or industry would continue and his employees, who have been laid-off, will be restored to their
full rights as employees. In ‘lay-off’, the vinculam juris of the relationship of employment is not broken, though, for the
time being, it goes under suspended animation. In other words, when there is a stoppage of work due to any reason
specified in this clause, or any other analogous reason, all that the employer can do is to suspend the contract, for the time
being. Thus, as soon as the temporary stoppage comes to an end, the employees are entitled to resume their service and
receive full wage. It is not open to the employer, under the cloak of a ‘lay-off’, to keep his employees in the state of
suspended animation and not to make up his mind as to whether the industry or business would ultimately continue or
there would be a permanent stoppage and thereby, deprive them of their full wages.1 The employees continue to be in the
muster roll of the employer and they have to be reinstated as soon as normal working is resumed.2

‘Lay-off’ and ‘Lockout’- Distinction

In Kairbetta Estate v Rajamanickam , the Supreme Court considered the concept of ‘lay-off’, vis-a-vis that of a ‘lockout’
and observed:

The concept of a ‘lockout’ is essentially different from the concept of a ‘lay-off’, and so, where a closure of business amounts to a
lockout under section 2(1), it would be impossible to bring it within the scope of a ‘lay-off’ under section 2(kkk). The points of
distinction between a ‘lay-off’ and a ‘lockout’ may be broadly stated as follows:
(a) A ‘lay-off’ generally occurs in a continuous business, whereas, ‘lockout’ is a closure of business for the time-being.

(b) In the case of a ‘lay-off’, owing to the reasons specified in section 2(kkk), the employer is unable to give employment to
one or more workmen, whereas, in the case of a ‘lockout’, the employer deliberately closes the business and locks out
the whole body of workmen for reasons which have no relevance to the causes specified in section 2(kkk).
(c) In the case of a ‘lay-off’, the employer may be liable to pay compensation, as provided by sections 25C, 25D and 25E of
the Act, but the liability for compensation cannot be invoked in the case of a ‘lockout’, as the liability of the employer in
cases of ‘lockout’ would depend upon whether the ‘lockout’ was justified and legal or not.
(d) But whatever the liability, the provisions applicable to the payment of ‘lay-off’ compensation cannot be applied to the
cases of ‘lockout’.
(e) A ‘lockout’ is resorted to by the employer as a weapon of collective bargaining and also, ordinarily, involves an element
of malice or ill-will, while ‘lay-off’ is actuated by the exigencies of the business.3

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There are also certain points of resemblance between a ‘lay-off’ and a ‘lockout’, namely:

(a) Both ‘lay-off’ and ‘lockout’ are of a temporary nature and both arise out of and exist during an emergency, though the
nature of the emergencies in each case, is different.
(b) Both in ‘lay-off’ and in ‘lockout’, the relationship of employment is only suspended and is not severed.

(c) A ‘lay-off’ resorted to in contravention of the provisions of section 25M is illegal and punishable under section 25Q
while a ‘lockout’ declared in contravention of the provisions of sections 10(3), 10A(4A), 22 or 23 is illegal and
punishable under section 26.

‘Lay-off’ and ‘Closure’ - Distinction

The distinction between a ‘lay-off’ and a ‘closure, has been considered by the Madras High Court in Kaleeswara Mills.4
The distinction between the two is clearly evident. A ‘lay-off’ is a failure, refusal or inability of an employer, due to
reasons beyond his control, to give employment to a workman whose name is borne on the muster rolls, while a ‘closure’
is the closing of the business permanently or temporarily, for an indefinite period by the management. The question as to
whether a particular case would come under ‘closure’, ‘lockout’ or ‘lay-off’, would depend on the facts of each case.

Clause (l): LOCKOUT

General

The expression ‘lockout’ was more comprehensively defined in s 2(e) of the repealed Trade Disputes Act 1929, which is
reproduced below:

‘Lock-out’ means the closing of a place of employment or the suspension of work, on the refusal of an employer to continue to
employ any number of persons employed by him, when such closing, suspension or refusal occurs in consequence of a dispute and
is intended for the purpose of compelling those persons or of aiding another employer, in compelling persons employed by him, to
accept the terms or conditions of or affecting employment.

The definition was based on the definition of ‘lockout’ as defined in s 8(b) of the repealed Trade Disputes and Trade
Unions Act 1927, which ran thus:

Lock-out’ to mean ‘closing of a place of employment or suspension of work or a refusal by an employer to continue to employ any
number of persons employed by him, in consequence of a dispute done with a view to compelling those persons or to aid another
employer in compelling persons employed by him, to accept terms or conditions of or affecting employment.

The present definition in Indian statute omits the words ‘when such closing, suspension or refusal occurs in consequence
of a dispute and is intended for the purpose of compelling those persons or of aiding another employer, in compelling
persons employed by him, to accept the terms or conditions of, or affecting employment’, from the old definition of 1929
Act. The deletion of these words has left the definition in a mutilated and truncated form of the concept. In Sri
Ramachandra Spg Mills, the Madras High Court has vividly pictured the consequences of construing the definition of a
‘lockout’ as it stands and without reading the effect of the deleted words into it, in the following words:

As the words of the definition stand, whatever be the circumstances in which he finds himself placed and whatever the strength of
the agencies that forced on him the step and however important he may be to avoid the result, if an employer closes the place of
employment or suspends work on his premises’, a ‘lockout’ would come into existence. A flood may have swept away the factory;
a fire may have gutted the premises; a convulsion of nature may have sucked the whole place under ground, still, if the place of
employment is closed or the work is suspended or the employer refuses to continue to employ his previous workers, there would be
a ‘lockout’ and the employer would find himself exposed to the penalties laid down in the Act. 5

The High Court then read the effect of the deleted words into the definition and observed that where the shut-down,
suspension or refusal is used as a weapon corresponding to a strike, then only it will be a lockout and said:

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...If an employer shuts down his place of business as a means of reprisal or as an instrument of coercion or as a mode of exerting
pressure on the employees or, generally speaking, when his act is what may be called an act of belligerency, there would be a
‘lockout’. If, on the other hand, he shuts down his work because he cannot, for instance, get the raw materials or the fuel or the
power necessary to carry on his undertaking or because he is unable to sell the goods he has made or because his credit is
exhausted or because he is losing money, that would not be a lockout.

Similarly, in Kairbetta (supra), the Supreme Court also observed that ‘the essential character of ‘lockout’ continues to be
substantially the same’, and further read the effect of the deleted words into the definition by saying that in ‘the struggle
between capital and labour, the weapon of strike is available to labour and is often used by it, so is the weapon of a lockout
available to the employer and can be used by him’. By the Amending Act 46 of 1982,6 the word ‘temporary’ has been
inserted before the word ‘closing’. The legislature has made it clear that under the present definition, three alternative acts
of the employer, in the process of collective bargaining, constitute a ‘lockout’, namely: (a) a ‘temporary’ closure of a place
of employment, in contradistinction to a ‘closure’, as defined in s 2(cc), where the closure is of a ‘permanent’ nature; (b)
suspension of work; or (c) refusal to continue to employ any number of persons employed by the employer. The phrase
‘refusal by an employer to continue to employ’ in the definition, corresponds to the phrase ‘cessation of work’ or ‘refusal
to continue to work or accept employment’ occurring in the definition of a ‘strike’.7 Just as a ‘strike’ is a weapon available
to the employees for enforcing their industrial demands, a ‘lockout’ is a weapon available to the employer to persuade by a
coercive process, the employees, to see his point of view and to accept his demand.8 A ‘lockout’ can, therefore, be
described as the antithesis to a strike.9 It may, however be pointed out that a mention of the strike or lockout aspect of
collective bargaining, warrants a note of caution regarding the danger of a distorted perspective. It is a commonly accepted
axiom that ‘the power to strike and to lockout is the motive force of collective bargaining’. A corollary is that ‘there is no
bargaining power if there is no freedom and opportunity to refuse to continue the relationship’.10 As RE Mathews says:

It is easy to accept this axiom and its corollary too uncritically, as it is to ignore what is at least the percentile truth they
incorporate. Collective bargaining is a catch-as-catch-can kind of business in which disdain for such uncouthness as is labelled
‘duress’ in more polite contract circles, has no place.11

There is no doubt that a lockout is an instrument of coercion or a weapon of oppression or a means of reprisal or a
pressure-valve to revolve the workmen round, to coerce them to come to terms with the management. Therefore, the
possibility of creating artificial circumstances as a justification for a declaration of a lockout, cannot be ruled out. But a
lockout by itself, is not an industrial dispute as defined in s 2(k) of the Act. From a juxtaposition of the definitions of a
‘lockout’ in s 2(l) and that of an ‘industrial dispute’ in s 2(k), it is evident that a lockout is a unilateral and volitional act on
the part of the employer, while an ‘industrial dispute’ is bilateral in character, as it arises when a demand of the workmen
is rejected by the employer.12 The words ‘refusal by an employer to continue to employ any number of persons employed
by him’ in the definition of a ‘lockout’, have to be read with the rest of the definition and also the word ‘lockout’ In other
words, these words have to be given a restricted meaning, viz, ‘refusal by the employer to allow any number of persons
employed by him, to attend to their duties, without effecting a termination of service’.13

The expression ‘refusal to employ’ in the context of the definition, does not mean a refusal to find work for the workmen,
but it only means a refusal or an intention not to pay. It will not be a ‘lockout’ if the employer pays the workmen, but does
not give them any work.14 The definition of a ‘lockout’ postulates the existence of the relationship of employer and
employee. In other words, if the relationship of employer and employee does not exist between the parties, there can be no
‘lockout’. A ‘lockout’ can exist only during the continuance of such relationship between the parties. Accordingly, when
the contract of employment is (rightly or wrongly) terminated by an employer, the conditions of a ‘lockout’ cannot
continue to exist. Therefore, in cases where the employer sets up a plea of termination of the services of the workman, it
would be necessary for the adjudicator to investigate into the facts relating to the termination of service and decide that the
termination was binding and legal. In cases in which the termination is found to be binding and legal, it would be
impossible for him to hold that the ‘lockout’ had continued and required to be lifted. If, however, the termination is found
to be illegal and not binding on the workmen, it would be open to him to come to the conclusion that the termination being
illegal, was of no consequence, hence, the ‘lockout’ had continued by failure of the employer to continue to employ the
concerned workmen.15

Lockout v Contract of Employment

Hence, as a ‘strike’ does not contemplate a severance of the relation of the employer and employee; so also, a ‘lockout’
does not sever the relationship.16The Act treats ‘strikes’ and ‘lockouts’ on the same basis; it treats one as the counterpart of
the other. In a ‘lockout’, the relationship of employer and employee remains as before; only some links in that chain of

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relationship are broken.17 A ‘lockout’ is neither an alteration to the prejudice of the workman, of the conditions of service
applicable to him, nor a discharge or punishment, whether by dismissal or otherwise, of the workman.18

‘Lockout’ and ‘Closure’ - Distinction

The distinction between a ‘lockout’ and a ‘closure’ has been explained by the Supreme Court in Express Newspapers.19

In the case of ‘closure’, the employer does not merely close down the place of business, but he closes the business itself,
finally and irrevocably. A ‘lockout’ on the other hand, indicates the closure of the place of business and not a closure of the
business itself, a lockout is usually used by the employer as a weapon of collective bargaining, to compel the employees to
accept his proposals, just as a strike is a weapon in the armoury of labour in the process of collective bargaining, to compel
the employer to accept their demands. Though the distinction between a ‘closure’ and a ‘lockout’ appears to be clear in
theory, in actual practice, it is not always easy to decide whether the purported ‘closure’ is a real and genuine closure,
properly so-called, or whether it is a sham or a disguise for a ‘lockout’.20 Closure is a matter of policy of the employer,
whether to run his business or not. The employer may close down an industrial activity bona fide on such eventualities as
suffering continuous loss, no possibility of a revival of the business or an inability for various other reasons, to continue
the industrial activity. There may be a closure for any of these reasons. These reasons are not exhaustive, but are merely
illustrative. But it cannot be said that a closure must always be permanent and irrevocable, as that would be ignoring the
causes which may have necessitated the closure. A change of circumstances may encourage an employer to revive the
industrial activity which was really intended to be closed.21 If, instead of effecting a closure, the employer takes recourse to
a lockout, to avoid the statutory liabilities, including payment of compensation or for bargaining, he cannot claim such a
right, nor can his action be said to be bona fide.22 To merely say that there was no ‘lockout’ is quite different from saying
that it was a case of a ‘closure’. It may or may not be a case of a ‘lockout’, that is a matter which the tribunal has to decide;
but it cannot be a case of closure unless a closure has been specifically pleaded by the employer. If, however, a case of
closure is pleaded, that has to be decided by the tribunal as a jurisdictional issue, because the jurisdiction of the tribunal to
adjudicate the points of reference will depend upon the decision of this jurisdictional issue. In other words, on the finding,
the tribunal may record on this preliminary issue, it may decide whether it has jurisdiction to deal with the merits of the
dispute or not. But if closure has not been pleaded, the tribunal is under no obligation to decide this as a preliminary
issue.23 If it is a closure, then the matter ends there. The court cannot go into the question of the propriety of such an order.
The finding whether a particular case is a case of ‘closure’ or of a ‘lockout’ is not a pure question of fact, but it is a mixed
question of fact and law. Such a finding is amenable to a writ jurisdiction, if it is perverse.24

Illustrations

The closure of a place of business for a short duration of three days, which was done in retaliation to certain acts of
workmen, was held to be a lockout.25 A temporary suspension of work, necessitated by a lack of stock, was held not to
constitute a lockout.26 Likewise, a temporary stoppage of work for a lack of raw material, was held not to be a lockout.27 A
closure of a section of an industry carried on by an employer, on account of trade reasons, was held not to be a lockout and
the closure of another section also, as a result of the refusal of the workmen to work in sympathy for the workmen of the
former section, was not held to be a lockout.28 The suspension of certain workmen, with the ultimate view of the
termination of their services, for misconduct, was held not to constitute a lockout.29 Likewise, retrenchment and discharge
of workmen have been held not to be a lockout.30

Legality v Justifiability of Lockouts

Sections 22 & 23 impose certain restrictions on the commencement, and ss 10(3) & 10A(4A) prohibit the continuance of a
lockout. Section 24 lays down that a lockout commenced or continued in contravention of these provisions, would be
illegal. Likewise, there are restrictions in state statutes, the contravention of which renders lockouts illegal. Apart from
these statutory restrictions, there is nothing in law that prohibits employers from locking out workmen as a measure of
collective bargaining. The prevalent view appears to be thus:

In the absence of a prohibitory statute or a contract governing the situation, the employer has the legal right to lockout his
employees or to close down or to remove his factory, because of a labour dispute or to avoid anticipated labour difficulties.31

Although, there are cases which tend to indicate that ‘such a statement is too broad and should be confined in its
application, to the facts involved’; because in general, public policy is, opposed to the closing or removal of factories for
the purpose of discouraging, intimidating or punishing employees for union activities.32 In other words, a lockout may be
legal inasmuch as it is declared in compliance with the statutory requirements, but it may be unjustified, as it might have
been declared with the ulterior motive of victimising workmen for their trade union activities, or it may be unjustified for
having been continued for an unreasonably long time. Whether a lockout is legal or illegal is a question of law. But the

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question as to whether a lockout is justified or unjustified, is a mixed question of law and fact. In the cases referred to
above, the court has not adverted to the statutory definitions of ‘wages’ in s 2(rr) and of ‘lockout’ in s 2(1) of the Act.
From a juxtaposition of these two definitions, it is evident that by ‘closing a place of employment’ or a ‘suspension of
work’ or a refusal ‘to continue to employ any number of persons’, the employer disables the workmen from fulfilling the
‘terms of employment’, which would have entitled them to wages. Having himself disabled the workmen to fulfill the
terms of employment, the employer cannot disentitle them to the wages which they would have earned. The questions of
legality or illegality, justifiability or unjustifiability of the ‘lockout’ are relevant for the entitlement of the workmen to
wages during the period of a lockout. The principle, as applicable to the entitlement of the workmen, to wages for the
period of ‘strike’, will equally apply to the entitlement of the workmen for the period of a ‘lockout’.

Note: For a detailed discussion, see notes and comments under s 2(q), ‘Wages for the Period of Strike’.

Illustrations

In one case, the workmen assembled near the office of the establishment during the recess period, stayed away from their
work, and continued there till late in the evening, shouting slogans, so much so that the members of the office staff and
some workers who wanted to return home after the working hours, were prevented from leaving the factory premises, till
the police arrived on the scene and dispersed the workmen. In these circumstances, it was held that the lockout declared by
the employer from the following day, was justified as the action on the part of the workmen was a strike. Similarly, a
lockout necessitated by the ‘go-slow tactics’ or ‘improper conduct of the workmen’, was also held to be justified.33 A
lockout declared as a result of a hunger strike by certain workmen of a factory, who held key-posts, was held to be legal
and justified, despite the fact that notice as required by section 22, was not given.34 The management declared that instead
of Sundays, Saturdays would be off-days, because the State Government had imposed restrictions on the use of electricity
and curtailed the supply of electricity on Saturdays. The workers not only remained absent on a Saturday, but refused to
work even on Sunday, which constituted a strike and the work of the factory consequently, came to a standstill. The
lockout declared by the management consequent upon such strike, was held to be justified.35 On the other hand, a lockout,
declared as a consequence of the refusal of the workmen to do additional work, which the employer had no right in law, to
ask them to do, by altering the conditions of service, in the implementation of the rationalisation scheme, was held to be
unjustified and the workmen were held to be entitled to wages for the period in question.36 Locking out the workmen
without any prior notice by the employer to them, as a retaliatory measure to terrorise them, was held to be an illegal and
unjustified lockout. It was illegal because no prior notice, as required by law, was given, and unjustified, as it was
retaliatory in nature.37 Some of the workmen staged a stay-on-strike and subsequently, came to join their duties, but they
were asked to sign a good conduct bond, which the workmen refused to sign, as they objected to the use of the words ‘at
the instigation of others’ in the bond. The refusal of the employer to give work to the workmen in the peculiar
circumstances of the case, was held to be an unjustified lockout.38

Wages for the Period of Lockout

The Act imposes certain prohibitions and restrictions on ‘lockouts’, as well as on ‘strikes’. Chapter V; s 10(3), s 10A(4A),
s 22 and s 23 impose certain prohibitions on the commencement or continuance of ‘strikes’ and ‘lockouts’ and s 24 renders
the ‘strikes’ or ‘lockouts’ continued and commenced in contravention of these prohibitions, illegal. Chapter VI prescribes
the penalties for illegal strikes and lockouts. But unlike ‘lay-off’, ‘retrenchment’, ‘transfer of the undertaking’ or ‘closure
of the undertaking’, there is no provision in the Act providing for any compensation to the workmen affected by a ‘strike’
or a ‘lockout’. The reason is plain. ‘Layoff’, ‘retrenchment’, ‘transfer of the undertaking’ or ‘closure of the undertaking’
arise out of trade exigencies. None of these acts is a measure of collective bargaining. But ‘lockouts’ and ‘strikes’ are
weapons of collective bargaining, in which both the sides stand to gain or lose, depending upon various circumstances.
Hence, in using these weapons of collective bargaining, the party using them takes its own risk in the process of
pressurising the other to concede to its demands. Thus, if a ‘lockout’ is legal and justified, for instance, it is precipitated by
certain acts on the part of the workmen themselves, the employer will not be liable to pay and the employees will not be
entitled to receive wages for the duration of the ‘lockout’. In Hindustan Steel, the Orissa High Court held that mere change
in hours of work from 7 am to 8 am would not amount to lockout of workmen, as none of the elements indicated in the
definition of a ‘lockout’ was satisfied, particularly, when the place of the employment had not been closed, nor had the
work been suspended.39

But if, on the other hand, the ‘lockout’ is illegal, the employer will be liable to pay full wages to the workmen. Even if the
lockout is legal, but it is unjustified, for instance, it is declared with a view to victimising the workmen, or is continued for
an unduly protracted period of time, the employer will be liable to pay and the workmen will be entitled to receive the full
wages and other benefits, for the period of the ‘lockout’. The same principle applies when a ‘lockout’ is declared in
consequence of a legal strike. But when an unjustified or illegal strike is followed by a ‘lockout’, which becomes
unjustified on account of its unreasonably long duration, a case of the apportionment of the blame between the employer
and the workmen, arises.40 However, in deciding the quantum of wages, for the period of the lockout, to be paid to the

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concerned workmen, their conduct at the relevant time has to be taken into consideration.41 It is incumbent upon the
tribunal, to apply its mind to the question of apportionment of the blame on the two parties and to its effect on the amount
of wages to be awarded to the workmen, for the period of the unjustified ‘lockout’, after allowing the relevant evidence
being adduced before it.42 In case a ‘lockout’ is illegal or unjustified, it is not necessary for the workmen, for being entitled
to wages for the period of the lockout, to show that they had been reporting for work during such period.43

Clause (la): MAJOR PORT

A ‘major port’ has been defined in s 3(8) of the Indian Ports Act 1908 (15 of 1908), as follows:

A ‘major port’ means any port which the Central Government may, by notification in the Office Gazette, declare, or may, under
any law for the time being in force, have declared to be a major port.

Clause (lb): MINE

This definition adopts the definition of a mine as in s 2(j) of the Mines Act 1952, which is as follows:

‘A mine’ means any excavation where any operation, for the purpose of searching for or obtaining minerals, has been carried on,
and includes, unless exempted by the Central Government by notification in the Office Gazette, any premises or part thereof, on
which any process ancillary to the getting, dressing or preparation for sale of minerals or of coke is being carried.

A plant manufacturing tar and industrial coke from coal purchased from outside, has been held to be a mine within the
meaning of s 2(lb) of the Act.44 On the other hand, a cement factory working at a distance of 15 miles from the mines,
using limestone quarried from the mines, was held not to fall within the definition of a ‘mine’ as in s 2, despite the fact that
the mine and the cement factory were under the same management.45

Clause (ll): NATIONAL TRIBUNAL

By the Industrial Disputes (Amendment and Miscellaneous Provisions) Act 1956 (Act 36 of 1956), a provision has been
made for the constitution of a National Industrial Tribunal under s 7B of the IDA. This definition has also been inserted by
the amending Act. The amending Act abolished the Labour Appellate Tribunal, established under the Industrial Disputes
(Appellate Tribunal) Act 1950. National Industrial Tribunals are constituted to adjudicate upon industrial disputes of
concerns having all-India establishments and also to deal with disputes between banks and their employees.

Clause (lll): OFFICE BEARER

Any member or the executive of a trade union is an ‘office bearer’ for the purpose of s 36(1). But the definition expressly
excludes an auditor.

Clause (m): PRESCRIBED

This definition is the same as in s 2(j) of the repealed Trade Disputes Act 1929, under which the rule-making power was
given to the government by s 19. Now, s 38 of the Industrial Disputes Act, gives power to the appropriate government to
make rules for the purpose of giving effect to the provisions of this Act.

Clause (n): PUBLIC UTILITY SERVICE

Legislation

This clause is based on cl (g) of s 2 of the repealed Trade Disputes Act 1929 and was enacted in the original Industrial
Disputes Act 1947, with a view to assure special attention to disputes relating to ‘public utility service’ industries, for
which special provisions have been enacted in the Act. Section 12(1) makes it obligatory on a conciliation officer to hold
conciliation proceedings in the prescribed manner, when the dispute relates to a ‘public utility service’ and notice under s
22 has been given. The proviso to s 10(1) enjoins on the ‘appropriate government’, that it must make a reference of an
industrial dispute, when the dispute relates to a public utility service. With respect to strikes and lockouts in ‘public utility’
services, s 22 contains special provisions.

Sub-Clause (i): Railway and Air Service

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This sub-clause makes the railway and transport services for the carriage of passengers or goods, public utility services.
These services being the life arteries of the nation, the legislature thought it fit to make these services, public utility
services.

Sub-Clause (ii): Section of an Establishment involving Safety

In each industry or industrial establishment, there is a particular section, on the working of which, the safety of the
establishment or the workmen employed therein, depends; for instance, the power house, the sanitation and conservancy
section and the watch and ward etc. Even if a particular industry or industrial establishment is not a ‘public utility service’,
by the sub cl (ii), the particular section of it, on the working of which its safety or the safety of the workmen employed
therein depends, has been made a ‘public utility service’.

Sub-Clause (iii): Postal, Telegraph or Telephone Service

The postal, telegraph and telephone services, again being modes of communication of thought and information, have been
made ‘public utility services’, with a view to allow these services to work in an uninterrupted manner.

Sub-Clause (iv): Power, Light and Water Services

Industries supplying power, light or water to the public, are very essential for the living of men in the society and the
interruption of the regular flow of power or water is likely to cause disturbance in the normal living of the members of the
society. Hence, the establishments supplying power, light or water to the public, have been made ‘public utility services’.

Sub-Clause (v): Public Conservancy or Sanitation System

The system of public conservancy or sanitation have been brought within the purview of ‘public utility services’, because
the disruption of these systems again, is likely to cause disturbance to normal human life. The mere fact that instead of the
word ‘service’, the word ‘system’ has been used in relation to conservancy or sanitation, cannot lead to an inference that a
system of public conservancy or sanitation would not be a ‘public utility service’.46

Sub-Clause (vi): First Schedule Industries

The present First Schedule was substituted for the former First Schedule, by the Industrial Disputes (Amendment and
Miscellaneous Provisions) Act 1956 (Act 36 to 1956). The schedule as originally enacted, had only five items. The present
schedule is headed: ‘Industries which may be declared to be public utility services under sub-cl (vi) of cl (n) of s 2 ’, and
now, it includes ten, items namely:

(a) Transport (other than railways) for the carriage of passengers or goods, ‘by land or water’

(b) Banking

(c) Cement

(d) Coal

(e) Cotton textiles

(f) Foodstuffs
(g) Iron and steel

(h) Defence establishments

(i) Service in hospitals and dispensaries, and

(j) Fire brigade service.

Some of the states have added certain other items to the list by amending enactments. Thus, it is only the ‘industries’ as
specified in the First Schedule, that can be declared to be ‘public utility services’ under this sub-clause. The proviso to this
sub-clause further confines this power with respect to time, ie, any of these scheduled industries can be declared in the first
instance, for a maximum period of six months, by a notification in the Office Gazette. In case the period is to be extended,
it can only be done again, by a similar notification. For the exercise of the power by the ‘appropriate government’, to

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declare a scheduled industry to be a ‘public utility service’ for the purpose of this Act, the following requirements must be
satisfied:

(i) The activity with respect to which the notification is made, is an ‘industry’ within the meaning of section 2(j).

(ii) The appropriate government must be satisfied that public emergency or public interest require a particular scheduled
industry to be declared a public utility service.
(iii) Such declaration must be made by a notification published in its Office Gazette.

(iv) The notification should specify-the period for which the declaration is made and such period should not exceed six
months in the first instance.
(v) After the expiry of the period specified in the notification, in case the government considers it necessary to extend the
period, it can do so. But the period can only be extended by a fresh notification, after having applied its mind afresh, to
the requirement of public emergency or public interest, in extending the time and the extended period should not exceed
six months. There is no limit on the number of times the government can extend the period, provided that the period is
extended each time, after considering the requirement of public emergency or public interest and the extension is made
for a period not exceeding six months at anyone time and by notification in its Office Gazette.

In terms of cl (i) of s 2(n) ‘any railway service’ or ‘any transport service for the carriage of passengers or goods by air’, is
comprehended in the definition of a ‘public utility service’. Entry 1 in the First Schedule is ‘transport other than railways,
for the carriage of passengers or goods by land or water’. In other words, any transport (other than railways) for the
carriage of passengers or goods, by land or water cannot be a ‘public utility service’ unless a notification, as required by cl
(vi) of s 2(n), has been issued by the appropriate government.47

Clause (o): RAILWAY COMPANY

This clause is the same as cl (h) of s 2 of the repealed Trade Dispute Act 1929. It was enacted in the original IDA and it
has remained unamended so far. Section 3(5) of the Indian Railways Act 1890 reads as follows:

‘Railway company’ includes any persons, whether incorporated or not, who are owners or lessess of a railway or parties to an
agreement for working a railway.

The expression ‘railway’ has been defined in s 3(4) of the Railway Act. Under s 2(n) of the IDA, a ‘railway service’ is a
‘public utility service’. Under s 2(a) of the Act, the ‘appropriate government’ in relation to a ‘railway company’, shall be
the Central Government.

Clause (oo): RETRENCHMENT

Evolution of the Concept

‘Retrenchment’ was not defined either in the repealed Trade Disputes Act 1929, or in the IDA, as originally enacted. The
definition was inserted by the Industrial Disputes (Amendment) Act 1953. The definition has to be read with the relevant
section in Chs VA and VB. The definition of the term ‘retrenchment’ is very wide and is in two parts. The first part is
exhaustive, which lays down that ‘retrenchment’ means the termination of the service of a workman by the employer, ‘for
any reason what-so-ever’, otherwise than as a punishment inflicted by way of a disciplinary action. Thus, the main part
itself, excludes the termination of the service as a measure of punishment, inflicted by way of a disciplinary action, from
the ambit of the definition of retrenchment.48 The second part further excludes:

(i) a voluntary retirement of the workman;

(ii) a retirement of the workman on reaching the age of superannuation;

(iii) a termination of the service of the workman as a result of non-renewal of the contract of employment; or

(iv) a termination of service on the ground of continued ill health of the workman.49

Retrenchment can occur only in a Live Industry

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In Pipraich Sugar Mills, the Supreme Court held that ‘retrenchment’ means a termination by the employer, of a service of
a workman, who is a ‘workman’ as defined in s 2(s), according to which a workman is a person who is employed ‘in an
industry’. ‘Industry’ means a ‘live industry’, and not a closed one. The entire scheme of the Act assumes that there is in
existence, an industry and then proceeds to provide for various steps to be taken when a dispute arises in the industry.
Thus, the provisions of the Act relating to ‘lockout’, ‘strike’, ‘lay-off’, ‘retrenchment’, ‘conciliation’ and adjudication on
proceedings’, have meaning only if they refer to an ‘industry’ which is running and not to one which is closed. Therefore, s
2 (oo) and s 25F have no application to a closed or a dead industry. In other words, there can be no ‘retrenchment’ unless
there is a discharge of the surplus labour or staff, in a continuing or running industry.50 The underlying assumption, of
course, is that the undertaking is running as an undertaking and the employer continues as an employer, but where, either
on account of a transfer of the undertaking or on account of the closure of the undertaking, the basic assumption
disappears, there can be no question of retrenchment, within the meaning of the definition contained in s 2(oo) of the Act.51
A single-judge of the Calcutta High Court, in Bharat Coking Coal,52 has held that the loss of employment of workers on
the closure of an undertaking, will amount to ‘retrenchment’. This holding is not correct. From the text of the judgment, it
appears that the attention of the court was not drawn to the language of s 25FFF, which specifically says that ‘wherever an
undertaking is closed down, for any reason whatsoever, every workman who has been in continuous service for not less
than one year in the undertaking, immediately before such closure, shall…, be entitled to ‘notice’ and ‘compensation’ in
accordance with the provisions of s 25F, as if the workman had been retrenched’. From this language, it is evident that
upon closure of an undertaking, the workmen who lose their employment, are only entitled to notice and compensation in
terms of s 25F. But this language does not lead to the conclusion that the loss of employment of the workmen, on the
closure of an undertaking, would constitute ‘retrenchment’. If that was the intention of the legislation, it could have been
expressed in a clear and unambiguous language.

Judicial Interpretation of ‘Retrenchment’ - Initial Trends

In Pipraich Sugar Mills, dealing with the question of whether the discharge of the workmen on a closure of the
undertaking would constitute ‘retrenchment’ and, hence, the workmen were entitled to retrenchment compensation, the
Supreme Court observed:

Retrenchment connotes, in its ordinary acceptation, that the business itself is being continued, but that a portion of the staff or the
labour force is discharged as surplusage; and the termination of the services of all the workmen, as a result of the closure of the
business cannot, therefore, be properly described as retrenchment...Retrenchment means, in ordinary parlance, discharge of the
surplus, it cannot include discharge on closure of business.53

Though these observations were made in connection with a case where the closure took place before the amendment of the
Act, the court left open the question as to the correct interpretation of the definition of ‘retrenchment’. Glossing on these
observations, a five-judge Bench, in Barsi Light Rly,54 observed that they explained ‘the meaning of retrenchment, in its
ordinary acceptation’. In this case, the court had specifically to interpret the term ‘retrenchment’ as defined in s 2(oo),
while dealing with the two appeals, one relating to a claim for compensation, made by an employee on the transfer of a
railway undertaking and the other relating to a claim for compensation, made on the closure of a mill. The question before
the court was: Whether the definition of ‘retrenchment’ merely gives effect to the ordinary accepted notion of
‘retrenchment’ in an existing or running industry, by embodying the notion in apt and readily intelligible words, or does it
go so far beyond the accepted notion of ‘retrenchment’ as to include the termination of service of all workmen in an
industry, when the industry itself ceases to exist, on a bona fide closure or discontinuance of his business by the employer?
Answering this question on behalf of the court, SK Das J said:

What, after all, is the meaning of the expression ‘for any reason whatsoever’? When a portion of the staff or labour force is
discharged as surplusage, in a running or continuing business, the termination of service which follows, may be due to a variety of
reasons, eg, for economy, rationalization in industry, installation of a new labour-saving machinery, etc. The legislature, in using
the expression ‘any reason whatsoever’, says, in effect: ‘It does not matter why you are discharging the surplus; if the other
requirements of the definition are fulfilled, then it is ‘retrenchment’... What is being defined is ‘retrenchment’, and that is the
context of the definition. It is true that an artificial definition may include a meaning different from or in excess of the ordinary
acceptation of the word which is the subject of the definition; but there must then be compelling words to show that such a
meaning, different from or in excess of the ordinary meaning, is intended. Where, within the framework of the ordinary acceptation
of the word, every single requirement of the definition clause is fulfilled, it would be wrong to take the definition as destroying the
essential meaning of the word defined... For the reasons given above, we hold... that retrenchment, as defined in section 2(oo) and
as used in Section 25F has no wider meaning than the ordinary, accepted connotation of the word: it means the discharge of the
surplus labour or staff by the employer, for any reason whatsoever, otherwise than as a punishment inflicted by way of a

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disciplinary action, and it has no application where the services of all workmen have been terminated by the employer, on a real
and bona fide closure of his business...or where the services of all the workmen have been terminated by the employer, on the
business or undertaking being taken over by another employer... On our interpretation, in no case is there any retrenchment, unless
there is a discharge of surplus labour or staff in a continuing or running Industry.55 (Italics supplied).

On this interpretation, the expression ‘for any reason whatsoever’, must necessarily be read in conjunction with reasons
like economy, rationalisation in industry, installation of new labour-saving machinery etc. The essential and basic element
of ‘retrenchment’ is, therefore, surplusage. In other words, when an employer, in an existing and running concern or
industry, finds that he has staff or labour which is in excess of the number required and hence, is surplus, the services of
such workmen as are in excess, can be terminated and such termination would be ‘retrenchment’. Surplusage in a running
business or industry, is the very basis of ‘retrenchment’. For instance, where an employer wants to cut down on
expenditure or he wants to introduce new labour saving devices, he may have to prune the labour or staff found to be in
excess, that is the concept of ‘retrenchment’. If the termination is for any other reason, it cannot be ‘retrenchment’. Thus,
the expression ‘for any reason whatsoever’, even though seemingly wide, must necessarily draw within its ambit, not any
act of commission and omission on the part of the employer, but the concept of termination of the surplus workers’
services due to reasons such as economy, rationalisation in industry, installation of new labour-saving machinery or
device, standardisation or improvement of plant or technique and the like. It is the conjunction with such reasons that the
words ‘any reason whatsoever’ must be read and construed.56 Consequent upon the decision in Barsi Light Rly, the
legislature amended the Act by the Amending Act 18 of 1957, substituting the present ss 25FF and 25FFF for the previous
s 25FF, which make provisions for notice or payment of wages in lieu of notice and compensation to be given to a
workman discharged from service, on a transfer or closing down of an industrial undertaking, ‘as if the workman had been
retrenched’. But the definition of retrenchment in s 2(oo) was not amended. After this amendment, another five-judge
Bench, in Anakapalle, affirming the ratio of Barsi Light Rly, observed that retrenchment ‘necessarily postulates the
termination of the employees’ services on the ground that the employees had become surplus’.57 Thus, even after the
amendment by the Amending Act of 1957, the interpretation of retrenchment in Barsi Light Rly was affirmed. The
Bombay High Court, in Municipal Corpn of Greater Bombay, observed:

It is clear from these observation that in their Lordships’ view, the expression ‘retrenchment’ meant discharge of surplus labour or
staff and did not mean a termination of the contract of employment for other causes.58

In this case, the discharge of the concerned workmen, for behaviour prejudicial to the interests of the concern, was not
considered to be ‘retrenchment’. A contrary view was taken by another Division Bench of the same High Court.59 In
National Garage,60 a Full Bench of that High Court, therefore, considered these cases and affirming the holding in
Municipal Corporation, Grt Bombay, held that a termination of services simpliciter, whether on giving a month’s notice
under the provisions of the Standing Orders or otherwise, would not amount to ‘retrenchment’. It was further observed that
the question-whether the termination of service amounts to ‘retrenchment’ or not-must be determined in each case, on the
facts and circumstances of that case and if the termination of service is found to be due to the reason that the workman
discharged was surplus, ie, in excess of the requirements of the business or industry concerned, it would amount to
‘retrenchment’, while the termination of his service due to any other reason, will not constitute ‘retrenchment’. A similar
view was taken by the Punjab,61 Calcutta,62 Patna,63 Rajasthan,64 Madras,65 Orissa,66 Assam and Nagaland67 and Kerala68
High Courts.

Misinterpretation of ‘Retrenchment’ - Later Trends

But in later decisions, the courts started deflecting from this principle, to suit the exigencies of various fact-situations. In
Digwadih Colliery, the Supreme Court held that the termination of the service of a badli workman, who had worked for
more than 240 days, was ‘retrenchment’ and he was entitled to the benefits of the provisions relating to retrenchment.69
Following this decision, in Wilcox Buckwell, the court held that even the termination of the services of the a temporary
employee, on the ground of surplus labour, amounts to retrenchment.70 In Shambhu Nath Mukherjee, the court went a step
further in holding that the striking-off of the name of a workman constituted retrenchment.71 Likewise, in State of Punjab,
on the construction of the expression ‘retrenchment’, which has been defined in s 2(q) of the Payment of Gratuity Act
1972, to mean a ‘termination of service of an employee otherwise than on superannuation’, a two-judge Bench of the
Supreme Court held that except for superannuation, any termination of service would amount to ‘retirement’ for the
purposes of the Act, hence, retrenchment, since ‘retrenchment’ is a ‘termination of service’, the court observed: ‘It is
immaterial that the termination is occasioned by the need to discharge surplus labour.’72 The court further observed that
‘retrenchment’ implies the discharge of surplus labour, as explained in Barsi Light Rly, nonetheless, it amounts to a
termination of service. This case appears to have put the ratio of Barsi Light Rly up side down. Explaining the phrase
‘termination by the employer’, Balasubramanian J, of the Madras High Court, observed that where an employer directs the

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employee to leave the job and quit the place, it is not an act done by the employee, but is an act done by the employer, and
hence, it cannot be characterised as a voluntary resignation. In such an event, the employee would be entitled to
retrenchment compensation.73

The NCL-II recommended that the term ‘retrenchment’ should be defined precisely, to cover only a termination of
employment arising our of a need for a reduction of surplus workers in an establishment, such surplus having arisen out of
one or more of several reasons.74 The Calcutta,75 Bombay,76 Punjab,77 Assam and Nagaland78 High Courts took the view
that a discharge of a workman, in accordance with the terms of the Standing Orders or discharge simpliciter, under the
contract, will not constitute ‘retrenchment’. Likewise, a single judge of a Madras High Court, in AS Kannan,79 held that the
discharge of a casual labourer, on the ground of medical unfitness, would not amount to retrenchment. On the other hand,
the High Courts of Kerala,80 Andhra Pradesh,81 Madras,82 and Patna,83 held that the termination of the service of certain
temporary workmen, who were surplus staff, is retrenchment. Another point which has engaged judicial attention is,
whether the termination of service on the expiry of the time stipulated in the contract of service, is ‘retrenchment’. The
labour appellate tribunal, in Balkrishna Ganpat,84 held that such termination would not constitute ‘retrenchment’, but it did
not reason out the decision. In Hindustan Steel, the Orissa High Court held that the termination of service in terms of the
contract of employment, is also ‘retrenchment’ and ‘no distinction is available to be made...between a termination of
service by the efflux of time, in terms of the contract of employment, and a termination of service under a living contract.85
In this case, the termination of service of the head time-keeper, at the end of the contracted period was, therefore, held to
be retrenchment. In Sundaramony, the High Court took the view that the temporary hands, drafted in exceptional or
extraordinary contingencies or in temporary vacancies, would become surplus on the return of the permanent incumbents
to the jobs. In appeal, the Supreme Court based its decision on the construction of the words ‘for any reason whatsoever’
as ‘very wide and almost admitting of no exception’, and held that the termination of service of a temporary workman,
even if employed only for a certain number of days, would constitute retrenchment.86 Apart from this bare observation,
there was no discussion in the judgment, nor was there any reference to the limitations imposed on these words by the
larger Benches in Pipraich Sugar Mills,87 and Hariprasad.88

In Hindustan Steel,89 the Supreme Court held that automatic termination of service, on the expiry of the contractual period
of three years would constitute ‘retrenchment’. From the proviso to s 25F(a), which provides that no notice required
thereunder, shall be necessary if the ‘termination is under an agreement which specifies a date for the termination of
service’, the court inferred that the proviso would have been unnecessary if retrenchment, as defined in s 2(oo), was
intended not to include a ‘termination of service by efflux of time in terms of an agreement between the parties’. In this
view of law, the court held that such a termination would fall within the purview of ‘retrenchment’. This, however, was
considered as an additional reason. On behalf of the employer, it was conceded that the point was covered by
Sundaramony, though it was pointed out that that case was in conflict with the decision of a larger Bench in Barsi Light
Rly. But the court observed that it did not find anything in Barsi Light Rly, which was inconsistent with Sundaramony and
held that giving full effect to the words ‘for any reason whatsoever’, would be consistent with the scope and purpose of s
25F and not contrary to the scheme of the Act. The decision of the court was actuated by the fact that in order to
‘streamline the organisation and to effect economy wherever possible, the company had chosen not to renew the contract
of the concerned workman’. The Patna High Court also, for similar reasons, held that the termination of the services of a
substituted carriage khalasi, who had continued in service for five years, in the circumstances of the case, was
‘retrenchment’.90 But Nambiyar CJ, though subscribing to the view of Eradi J, went a step further and said that the Bench
was bound to follow the larger Bench decision in the Barsi Light Rly, in preference to Sundaramony, Hindustan Steel and
Delhi Cloth Mills.91

13 Williamsons (India) Ltd v Workmen (1962) 1 LLJ 302 [LNIND 1962 SC 94], 306 (SC), per Gajendragadkar J.
14 Yamna Mills Co Ltd v MM Mandai (1957) 1 LLJ 620 [LNIND 1957 BOM 57] (Bom) (DB), per Tendolkar J.
15 Uttar Pradesh Electric Supply Co Ltd v Mohd Gause 1970 Lab IC 438, 440 (All), per Khare J.
16 Associated Cement Co Ltd v Workmen (1957) 2 LLJ 559 (LAT).
17 Workmen of SBI v Secy & Treasurer of SBI (1984) 2 LLJ 239, 241 (Mad) (DB), per KBN Singh CJ
18 Rasiklal Mondial joshi v Bank of Baroda (1956) 1 LLJ 103 (LAT).
19 Praga Industries Ltd v Workers (1959) 2 LLJ 379 [LNIND 1959 SC 110] (SC) : AIR 1959 SC 1194 [LNIND 1959 SC 110]:
[1960] 1 SCR 161 [LNIND 1959 SC 110] per Gajendragadkar J.

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20 International Encyclopaedia of Social Sciences, 1968, Vol 16, p 424.

21 Salkia Transport Agency Pvt Ltd v Fifth IT (1963) 1 LLJ 722 (Cal), per BN Banerjee J.
22 Madura Coats Ltd v Mathan (1987) 2 LLJ 388, 390 (Ker) (DB), per Malirnath CJ.
23 DCM Chemical Works v Workmen (1962) 1 LLJ 388 [LNIND 1962 SC 97] (SC), per Wanchoo J.
24 International Encyclopaedia of Social Sciences, 1968, Vol 16, p 425.
25 JK Cotton Spg and Wvg Mills Co Ltd v LAT (1963) 2 LLJ 436 [LNIND 1963 SC 157], 444 (SC), per Gajendragadkar J.
26 Indian Oxygen Ltd v Workmen (1963) 1 LLJ 264 [LNIND 1963 SC 2] (SC), per Das Gupta J.
27 Alembic Chemical Works Co Ltd v Workmen (1961) 1 LLJ 328 [LNIND 1960 SC 348], 334 (SC) : AIR 1961 SC 647 [LNIND
1960 SC 348]: [1961] 3 SCR 297 [LNIND 1960 SC 348], per Gajendragadkar J.
28 RB Diwan Badri Das v Industrial Tribunal (1962) 2 LLJ 366 [LNIND 1962 SC 293] (SC) : AIR 1963 SC 630 [LNIND 1962 SC
293]: [1963] 3 SCR 930 [LNIND 1962 SC 293], per Gajendragadkar J.
29 Mohammed & Sons v Workmen CA No 338 of 1966 (27-7-1967) (SC), per Wanchoo CJI.
30 Indian Oxygen Ltd v Workmen (1969) 1 LLJ 235 [LNIND 1968 SC 193], 240-42 (SC) : AIR 1969 SC 306 [LNIND 1968 SC 193]:
[1969] 1 SCR 550 [LNIND 1968 SC 193] per Shelat J.
31 Uttar Pradesh Electric Supply Co v RK Shukla (1969) 2 LLJ 728 [LNIND 1969 SC 200], 738 (SC) : AIR 1970 SC 237 [LNIND
1969 SC 200]: (1969) 2 SCC 400 [LNIND 1969 SC 200], per Shah J.
32 Workmen v Otis Elevators Co (India) Ltd (1972) 1 LLJ 166 [LNIND 1971 SC 543], 168-70 (SC) : (1972) 4 SCC 690 [LNIND 1971
SC 543], per Vaidialingam J.
33 Rai Bahadur Diwan Badri Das v IT (1962) 2 Lt J 366, 371-72 (SC), per Gajendragadkar J.
34 Gramophone Co Ltd v Workmen (1964) 2 LLJ 131 [LNIND 1964 SC 114], 137-38 (SC), per Wanchoo J.
35 Indian Oxygen Ltd v Workmen (1963) 1 LLJ 264 [LNIND 1963 SC 2], 266 (SC) : 1963 Supp (2) SCR 736 : (1963) 3 FLR 196, per
Das Gupta J.
36 Buckingham & Carnatic Co Ltd v Workmen CA No 674 of 1968 (25-7-1968) (SC), per Vaidialingam J.
37 Dalmia Cement (Bharat) Ltd v Workmen (1961) 2 LLJ 130 [LNIND 1960 SC 82], 132-33 (SC) : AIR 1967 SC 209 [LNIND 1960
SC 82], per Das Gupta J.
38 May and Baker v Workmen (1961) 2 LLJ 94 [LNIND 1961 SC 18], 98 (SC) : AIR 1967 SC 678 [LNIND 1961 SC 18], per
Wanchoo J.
39 Cinema Theatres v Workmen (1964) 2 LLJ 128 [LNIND 1964 SC 106], 131 (SC), per Wanchoo J.
40 Alembic Chemical Works Co Ltd v Workmen (1961) 1 LLJ 328 [LNIND 1960 SC 348] (SC) : AIR 1961 SC 647 [LNIND 1960 SC
348]: [1961] 3 SCR 297 [LNIND 1960 SC 348], per Gajendragadkar J.
41 Calcutta Insurance Co Ltd v Workmen (1967) 2 LLJ 1 [LNIND 1967 SC 36], 10-12 (SC), per Mitter J.
42 Remington Rand of India Ltd v Workmen CA No 2105 of 1966 (11-8-1967) (SC), per Mitter J.
43 Alembic Glass Industries Ltd v Workmen (1976) 2 LLJ 316 [LNIND 1976 SC 241] (SC) : AIR 1976 SC 2091 [LNIND 1976 SC
241]: (1976) 3 SCC 522 [LNIND 1976 SC 241], per Shinghal J.
44 Karam Chand Thapar & Bros Ltd v Workmen (1964) 1 LLJ 429 [LNIND 1963 SC 178], 434 (SC), per Das Gupta J.
45 Hindustan Times Ltd v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431] (SC) : AIR 1963 SC 1332 [LNIND 1962 SC 451]:
[1964] 1 SCR 234 [LNIND 1962 SC 451], per Das Gupta J.
46 Associated Cement Companies Ltd v CWK Union (1972) 2 LLJ 40 [LNIND 1972 SC 178], 43 (SC) : AIR 1972 SC 1552 [LNIND
1972 SC 178]: (1972) 4 SCC 23 [LNIND 1972 SC 178], per Mathew J.
47 Technological Institute of Textiles v Workmen (1965) 2 LLJ 149 [LNIND 1965 SC 85], 152 (SC), per Ramaswami J.
48 Hindustan Times Ltd v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431], 117 (SC) : AIR 1963 SC 1332 [LNIND 1962 SC 451]:
[1964] 1 SCR 234 [LNIND 1962 SC 451], per Das Gupta J.
49 Alembic Glass Industries Ltd v Workmen (1976) 2 LLJ 316 [LNIND 1976 SC 241] (SC), per Singhal J.
50 Shambhoo Singh v Central IT-cum-LC (1981) 2 LLJ 376, 378 (MP) (DB), per GB Singh CJ.
51 Indian Iron & Steel Co Ltd v Workmen (1958) 1 LLJ 260 [LNIND 1957 SC 105], 268 (SC), per SK Das J.
52 Delhi Cloth & General Mills Ltd v Piara Lal 1976 Lab IC 21, 25 (Delhi), per Rangarajan J.
53 Binny Ltd v Workmen 1973 Lab IC 1119 (SC), per Grover J.

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54 Sawantram Ramprasad Mills Co Ltd v Kundanmal Sardarmal Jain (l960) 1 LLJ 63 (Bom) (DB), per Tambe J.
55 Uttar Pradesh Electric Supply Co v RK Shukla (1969) 2 LLJ 728 [LNIND 1969 SC 200], 738 (SC), per Shah J.
56 Remington Rand of India Ltd v Workmen CA No 2105 of 1966 (11-8-1969) (SC), per Mitter J.
57 Pfizer Pvt Ltd, Bombay v Workmen (1963) 1 LLJ 543 [LNIND 1962 SC 400], 555 (SC), per Gajendragadkar J.
58 Associated Cement Staff Union v Associated Cement Co (1964) 1 LLJ 12 [LNIND 1963 SC 279], 15 (SC) : AIR 1964 SC 914
[LNIND 1963 SC 279], per Das Gupta J.
59 Mohammed & Sons v Workmen CA No 338 of 1966 (27 July 1967), per Wanchoo CJI.
60 Government of India (1969), Report of NCL-I, Para 9.43, at p 105
61 Saxby and Farmer (India) Ltd v Workmen 1975 Lab IC 361 -62 (SC), per Grover J.
62 Pfizer Pvt Ltd v Workmen (1964) 1 LLJ 543, 555 (SC), per Gajendragadkar J.
63 Workmen of NTC of India v NTC of India , CA No 852 of 1966 (18 October 1966) (SC), per Bhargava J.
64 Bhiwani Textile Mills v Workmen (1969) 2 LLJ 739 [LNIND 1969 SC 97] (SC),
65 Federation of S&ME Industries v Workmen 1972 Lab IC 1275 (SC) : AIR 1972 SC 2126 : (1973) 3 SCC 374, per Vaidialingam J.
66 Bijli Cotton Mills Ltd v Workmen (1972) 2 LLJ 320 [LNIND 1972 SC 182], 327 (SC) : AIR 1972 SC 1903 [LNIND 1972 SC 182]:
(1972) 1 SCC 840 [LNIND 1972 SC 182], per Dua J.
67 Hindustan Steel Ltd v Workmen (1973) 2 LLJ 250 [LNIND 1973 SC 176] (SC) : AIR 1973 SC 1397 [LNIND 1973 SC 176]:
(1974) 3 SCC 182 [LNIND 1973 SC 176], per Mukherjee J.
68 Saxby and Farmer (India) Pvt Ltd v Workmen 1975 Lab IC 361 -62 (SC), per Grover J.
69 Government of India (1969), Report of NCL-I, p 247.
70 Smith’s Labour Law, 1954, 2nd ed, p 723.
71 Mathurdas Kanji v LAT (1958) 2 LLJ 265 [LNIND 1958 SC 46], 269 (SC), per Subba Rao J.
72 Government of India (1969), Report NCL-I, p 247.
73 Titaghur Paper Mills Co Ltd v Workmen (1959) 2 LLJ 9 [LNIND 1959 SC 92], 14 (SC) : AIR 1959 SC 1095 [LNIND 1959 SC
372]: 1959 Supp (2) SCR 1012, per Wanchoo J.
74 Smith’s Labour Law, 1954, 2nd ed, p 723.
75 Burn & Co v Employees (1960) 2 LLJ 261 [LNIND 1960 SC 99] (SC) : AIR 1960 SC 896 [LNIND 1960 SC 99]: [1960] 3 SCR
423 [LNIND 1960 SC 99], per Wanchoo J.
76 National Iron and Steel Co Ltd v Workmen (1962) 2 LLJ 752 [LNIND 1962 SC 271], 756 (SC), per Mudholkar J.
77 Hindustan Steel Ltd v State of Orissa ,CA No 1969 of 1969 (4-4-1975) (SC), per Gupta J.
78 (1972) 1 LLJ 642 [LNIND 1972 SC 140], 652 (SC), per Mitter J.
79 Government of India (1969), Report of NCL-I, Para 7.8, at p. 249.
80 Raza Buland Sugar Co Ltd v Workmen (1972) 2 LLJ 35 [LNIND 1972 SC 173] (SC) : AIR 1972 SC 2292 [LNIND 1972 SC 173]:
(1973) 4 SCC 158 [LNIND 1972 SC 173], per Vaidialingam J.
81 Unichem Laboratories Ltd v Workmen (1972) 1 LLJ 576 [LNIND 1972 SC 127] (SC) : AIR 1972 SC 2332 [LNIND 1972 SC 127]:
(1972) 3 SCC 552 [LNIND 1972 SC 127].
82 Mumbai Kamgar Sabha v Abdulbhai Faizullabhai (1976) 2 LLJ 186 [LNIND 1976 SC 84] (SC), per Krishna Iyer J.
83 Mahalaxmi Cotton Mills v Workmen (1952) 2 LLJ 635 (LAT).
84 Ispahani Ltd v Employees’ Union (1959) 2 LLJ 4 [LNIND 1959 SC 100], 7 (SC), per Wanchoo J.
85 Grahams Trading Co (India) Ltd v Workmen (1959) 2 LLJ 393 [LNIND 1959 SC 103], 396 (SC) : AIR 1959 SC 1151 [LNIND
1959 SC 103]: [1960] 1 SCR 107 [LNIND 1959 SC 103], per Wanchoo J.
86 Isphani Ltd v Isphani Employees’ Union (1959) 2 LLJ 4 [LNIND 1959 SC 100] (SC) : AIR 1959 SC 1147 [LNIND 1959 SC 100]:
[1960] 1 SCR 24 [LNIND 1959 SC 100] per Wanchoo J.
87 Bombay Co Ltd v Workmen (1964) 2 LLJ 109 [LNIND 1964 SC 103], III (SC), per Wanchoo J.
88 Tulsidas Khimji v Workmen (1962) 1 LLJ 435 [LNIND 1962 SC 160] (SC), per Sinha CJI.
89 Grahams Trading Co Ltd v Workmen (1959) 2 LLJ 393 [LNIND 1959 SC 103], 396 (SC) : AIR 1959 SC 1151 [LNIND 1959 SC
103]: [1960] 1 SCR 107 [LNIND 1959 SC 103], per Wanchoo J.

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90 BN Elias and Co Ltd Employees’ Union v BN Elias and Co Ltd (1960) 2 LLJ 219 [LNIND 1960 SC 90], 221 (SC) : AIR 1960 SC
886 [LNIND 1960 SC 90]: [1960] 3 SCR 382 [LNIND 1960 SC 90], per Wanchoo J.
91 Jardine Henderson v Workmen (1962) 1 LLJ 405 [LNIND 1962 SC 103], 408 (SC) : AIR 1963 SC 474 [LNIND 1962 SC 103]:
1962 Supp (3) SCR 582, per Wanchoo J.
92 Tulsidas Khirija v Workmen (1962) 1 LLJ 435 [LNIND 1962 SC 160] (SC) : AIR 1963 SC 1007 [LNIND 1962 SC 160]: [1963] 1
SCR 675 [LNIND 1962 SC 160], per Sinha CJI.
93 Tocklai Experimental Station v Workmen (1961) 2 LLJ 694 [LNIND 1961 SC 361] (SC), per Gajendragadkar J.
94 Workmen of Modern Tile & Clay Works v IT (1965) 2 LLJ 657 (Ker), per Mathew J.
95 (1962) 1 LLJ 435 [LNIND 1962 SC 160], 443 (SC), per Sinha CJI for the majority.
96 Tulsidas Khimji v Workmen (1962) I LLJ 435 (SC) : AIR 1963 SC 1007 [LNIND 1962 SC 160], per Sinha CJI.
97 Tulsidas Khimji v Workmen (1962) I LLJ 435(SC) : [1963] 1 SCR 675 [LNIND 1962 SC 160], per Ayyangar J (dissenting).
1 EM Rao, Industrial Jurisprudence: A Critical Commentary, 2015, 2nd ed, pp 142-4.
2 Vegetable Products Ltd v Workmen (1965) 1 LLJ 468 [LNIND 1964 SC 308], 471-72 (SC) : AIR 1965 S C 1499 [LNIND 1964 SC
308], per Wanchoo J.
3 Sri Upendra Chandra Chakraborty v United Bank of India (1985) 2 LLJ 398 [LNIND 1985 SC 157], 400 (SC) : AIR 1985 SC 1010
[LNIND 1985 SC 157]: 1985 Supp SCC 26, per Khalid J.
4 Kerala Vyapari Vyavasayi Youth Wing Pathanamthitta D Committee v State of Kerala 1989 Lab IC 938, 940 (Ker), per Viswanatha
Iyer J.
5 Churakulam Tea Estate Pvt Ltd v Workmen (1969) 2 LLJ 407 [LNIND 1968 SC 256] (SC) : AIR 1969 SC 998 [LNIND 1968 SC
256]: (1969) 1 SCR 931 [LNIND 1968 SC 256], per Vaidialingam J.
6 Jabalpur BK Punchayat v Jabalpur Electric Supply Co Ltd 1972 Lab IC 3 [LNIND 1971 SC 359], 9 (SC), per Mitter J.
7 Vegetable Products Ltd v Workmen (1965) 1 LLJ 468 [LNIND 1964 SC 308], 471 (SC), per Wanchoo J.
8 Bombay Co Ltd v Workmen (1964) 2 LLJ 109 [LNIND 1964 SC 103] (SC), per Wanchoo J.
9 Vegetable Products Ltd v Workmen (1965) 1 LLJ 468 [LNIND 1964 SC 308], 471 (SC), per Wanchoo J.
10 (1961) 1 LLJ 521 [LNIND 1960 SC 321] (SC), per Wanchoo J.
11 Ibid 538, per Subba Rao J.
12 Rallis India Ltd v IT 1979 Lab IC (NOC) 98 (Cal), per Sabyasachi Mukharji J.
13 Government of India, Report of the National Commission on Labour, pp 111-12.
14 Labour Investigation Committee, 1946, (cited in) Govt of India (1969), Report of NCL-I, p 110.
15 Government of India (1969), Report of NCL-I, p 112.
16 Dharangadhara Chemical Works v Workmen (1962) 1 LLJ 197 [LNIND 1962 SC 19] (SC), per Sarkar J.
17 India Genl Navigation & Rly Co Ltd v Workmen (1961) 2 LLJ 372, 375 (SC), per Das Gupta J.
18 Government of India (1969), Report of NCL-I, p 162.
19 Novex Dry Cleaners v Workmen (1962) 1 LLJ 271 [LNIND 1962 SC 50], 275 (SC), per Gajendragadkar J.
20 Air Lines Hotel Pvt Ltd v Workmen (1961) I LLJ 663, 667 (SC), per Das Gupta J.
21 Novex Dry Cleaners v Workmen (1962) 1 LLJ 271 [LNIND 1962 SC 50], 274-75 (SC), per Gajendragadkar J.
22 French Motor Car Co Ltd v Workmen (1962) 2 LLJ 744 [LNIND 1962 SC 366], 749-50 (SC) : AIR 1963 SC 1327 [LNIND 1962
SC 366], per Wanchoo J.
23 Bharatkhand Textile Manufacturing Co Ltd v Textile Labour Assn, Ahmedabad (1960) 2 LLJ 21 [LNIND 1960 SC 81] (SC), per
Hidayatullah J.
24 Remington Rand of India Ltd v Workmen (1968) 1 LLJ 542 [LNIND 1967 SC 225] (SC), per Shah J.
25 Delhi Cloth & General Mills Co Ltd v Workmen (1969) 2 LLJ 755 [LNIND 1968 SC 298], 765 (SC), per Shah J.
26 Indian Hume Pipe Co Ltd v Workmen (1959) 2 LLJ 830 [LNIND 1959 SC 185], 832 (SC), per Gajendragadkar J.
27 Namburinadi Tea Co Ltd v Workmen of NTE 1968 Lab IC 1386 (Assam & Naga), per Goswami J.
28 Salem-Erode Electricity Co v Employees’ Union (1966) 1 LLJ 443 [LNIND 1965 SC 293] (SC), per Gajendragadkar CJI.
29 Bombay Labour Union v International Franchises Pvt Ltd (1966) 1 LLJ 41 [LNIND 1965 SC 217] 7 (SC), per Wanchoo J.

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30 Mahalakshmi Sugar Mills Co Ltd v Workmen (1961) 2 LLJ 623 (SC), per Wanchoo J.
31 Darshak Ltd v IT (1986) 1 LLJ 253, 261-62 (Kant), per Ramajois J.
32 Punjab State Co-operative Supply and Marketing Federation Ltd v State of Punjab 1996 Lab IC 1463, 1464-65 (P&H), per NK
Sodhi J.
33 Sukhjit Starch and Chemicals Ltd v State of Punjab (1962) 2 LLJ 269 (Punj), per Gosain J.
34 Air India Cabin Crew Assn v Air India (1981) 2 LLJ 306, 308 (Born) (DB), per Pratap J.
35 Secretary of Tamil Nadu Electricity Board Accounts Subordinate Union v Tamil Nadu EB (1984) 2 LLJ 478 (Mad), per Mohan J.
36 Workmen of Indian Bank v Management of Indian Bank (1985) 1 LLJ 6 (Mad), per Natarajan J.
37 South Arcot Central Co-operative Bank Employees Assn v Management 1995 Lab IC 783, 785 (Mad) (DB), per Somasundaram J.
38 Workmen of Dimakuchi Tea Estate v DTE (1958) 1 LLJ 500 [LNIND 1958 SC 1], 504 (SC) : AIR 1958 SC 353 [LNIND 1958 SC
1], per SK Das J.
39 Vijay Kumar Mills v Vijaykumar Mills National Workers Union (1964) 2 LLJ 399 [LNIND 1963 MAD 242]-400 (Mad) (DB), per
Ramachandra Ayyar CJ.
40 All India Reserve Bank Employees’ Assn v RBI (1965) 2 LLJ 175 [LNIND 1965 SC 146], 188 (SC), per Hidayatullah J.
41 NK Sen v Labour Appellate Tribunal (1953) 1 LLJ 6, 9-10 (Bom) (DB), per Chagla CJ.
42 United Commercial Bank Ltd v KN Gupta (1952) 1 LLJ 782 (LAT) (FB).
43 Workmen of DTE v Dahingeapara Tea Estate. (1958) 2 LLJ 498 [LNIND 1958 SC 79], 503 (SC) : AIR 1958 SC 1026 [LNIND
1958 SC 79], per SK Das J.
44 Kays Construction Co Ltd v Workmen (1958) 2 LLJ 660 [LNIND 1958 SC 124], 665-66 (SC), per Gajendragadkar J.
45 Standard Vacuum Refining Co of India Ltd v Workmen (1960) 2 LLJ 233 [LNIND 1960 SC 109], 238 (SC), per Gajendragadkar J.
46 Bombay Union of Journalists v The Hindu (1961) 2 LLJ 436 [LNIND 1961 SC 316], 440 (SC) : AIR 1963 SC 318 [LNIND 1961
SC 316], per Shah J.
47 All India RBE Assn v Reserve Bank of India (1965) 2 LLJ 175 [LNIND 1965 SC 146], 188 (SC) : AIR 1966 SC 305 [LNIND 1965
SC 146]: [1966] 1 SCR 25 [LNIND 1965 SC 146], per Hidayatullah J.
48 Andhra Bank Employees’ Assn v Andhra Bank Ltd 1978 Lab IC 1001 (AP) (DB), per Gangadhara Rao J.
49 Management of Indian Bank Ltd v IT (CG) (1977) 1 LLJ 343 [LNIND 1977 MAD 49] (Mad), per Koshal J.
50 Mgmt of Hindustan Lever Ltd v Delhi Administration 1977 Lab IC 681 (Del), per AB Rohtagi J.
51 Management, Southern Textile Ltd v United TLA (1983) 1 LLJ 435 [LNIND 1982 MAD 239] (Mad), per Padmanabhan J.
52 Vallamalai Estate v Workers of Vallamalai Estate (1973) 1 LLJ 273 [LNIND 1972 MAD 165], 277 (Mad) (DB), per Veeraswami
CJ.
53 Workmen of Dahingeapara Tea Estate v Dahingeapara Tea Estate (1958) 2 LLJ 498 [LNIND 1958 SC 79] (SC), per SK Das J.
54 Kays Construction Co Pvt Ltd v Workmen (1958) 2 LLJ 660 [LNIND 1958 SC 124] (SC), per Gajendragadkar J.
55 Standard Vacuum Refining Co of India Ltd v Workmen (1960) 2 LLJ 233 [LNIND 1960 SC 109] (SC), per Wanchoo J.
56 Bhatkawa Tea Co Ltd v HR Deb AIR 1961 Cal 395 [LNIND 1961 CAL 12], per Sinha J.
57 East Asiatic Co (India) Pvt Ltd v Fourth IT (1961) 1 LLJ 720 [LNIND 1960 CAL 102] (Cal)(DB), per Lahiri CJ.
58 Travancore Rubber Works Employees Union v IT (1962) 1 LLJ 478 (Ker), per Vaidialingam J.
59 Vijayakumar Mills Ltd v Vijayakumar National Workers Union (1964) 2 LLJ 399 [LNIND 1963 MAD 242] (Mad) (DB), per
Ramachandra Ayyar CJ.
60 Mukand Ltd v Mukand Staff and Officers Association AIR 2004 SC 3905 [LNIND 2004 SC 307], per Dr Lakshmanan J.
61 Mgmt of Safdarjung Hospital v Kuldip S Sethi (1970) 2 LLJ 266 [LNIND 1970 SC 180] (SC) : AIR 1970 SC 1407 [LNIND 1970
SC 180]: (1970) 1 SCC 735 [LNIND 1970 SC 180], per Hidayatullah CJI.
62 Workmen of Indian Standards Institution v Mgmt of ISI (1976) 1 LLJ 33 [LNIND 1975 SC 389] (SC) : AIR 1976 SC 145 [LNIND
1975 SC 389]: (1975) 2 SCC 847 [LNIND 1975 SC 389], per Bhagwari J.
63 Pipraich Sugar Mills Ltd v PSMM Union (1957) 1 LLJ 235 [LNIND 1956 SC 84], 239 (SC) : AIR 1957 SC 95 [LNIND 1956 SC
84]: [1956] 1 SCR 872 [LNIND 1956 SC 84], per Venkatarama Ayyar J.
64 Madras Gymkhana Club Employees Union v Gymkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292] (SC) : AIR 1968 SC 554
[LNIND 1967 SC 291]: [1968] 1 SCR 742 [LNIND 1967 SC 291], per Hidayatullah J.

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65 Mgmt of Safdarjung Hospital v Kuldip Singh Sethi (1970) 2 LLJ 266 [LNIND 1970 SC 180] (SC) : AIR 1970 SC 1407 [LNIND
1970 SC 180]: (1970) 1 SCC 735 [LNIND 1970 SC 180], per Hidayatullah CJI.
66 Bangalore WSS Board v A Rajappa (1978) 1 LLJ 349 [LNIND 1978 SC 70] (SC), per Krishna Iyer J.
67 Mgmt of Hindustan Steel Ltd v Workmen 1973 Lab IC 461 [LNIND 1973 SC 12] (SC) : AIR 1973 SC 878 [LNIND 1973 SC 12]:
(1973) 3 SCC 564 [LNIND 1973 SC 12], per Dua J.
68 Avon Services (P) Agencies Ltd v IT (1979) 1 LLJ 1 [LNIND 1978 SC 284] (SC), per Desai J.
69 Brought into force wef 21 August 1984.
70 Ibid.
71 MA Veiyra v CP Fernandez (1956) 1 LLJ 547 [LNIND 1955 BOM 261], 549 (Born) (DB), per Chagla CJ.
72 Workmen of Firestone Tyre and Rubber Co of India Pvt Ltd v Mgmt (1976) 1 LLJ 493 [LNIND 1976 SC 49] (SC), per Untwalia J.
73 Gaya Cotton and Jute Mills Ltd v GCJML Union (1952) 2 LLJ 37 (LAT).
74 Priya Laxmi Mills Ltd v Mazdoor Mahajan Mandal (1977) 1 LLJ 22 [LNIND 1976 SC 355] (SC), per Goswami J.
75 H Chinnapan v Kaleeswara Mills Ltd (1968) 1 LLJ 352, 354 (Mad), per Kailasam J.
76 Central India Spg, Wvg and Mfg Co Ltd v IC (1959) 1 LLJ 468 [LNIND 1958 BOM 96], 473 (Born) (DB), per Mudholkar J.
77 Kairbetta Estate v Rajamanickam (1960) 2 LLJ 275 [LNIND 1960 SC 92], 277 (SC), per Gajendragadkar J.
78 Workmen of Firestone TRCI Pvt Ltd v Firestone Ltd (1976) 1 LLJ 493 [LNIND 1976 SC 49], 497 (SC), per Untwalia J.
79 Kairbetta Estate Kotagiri v Rajamanickam (1960) 2 LLJ 275 [LNIND 1960 SC 92], 277 (SC), per Gajendragadkar J.
80 Brought into force on 21 August 1984.
81 Central India Spg Wvg & Mfg Co Ltd v IC (1959) 1 LLJ 468 [LNIND 1958 BOM 96], 472 (Born) (DB) : AIR 1958 Bom 225
[LNIND 1957 BOM 77]: (1958) 60 Bom LR 440, per Mudholkar J.
82 Kairbetta Estate v Rajamanickam (1960) 2 LLJ 275 [LNIND 1960 SC 92], 277-78 (SC) : AIR 1960 SC 893 [LNIND 1960 SC 92]:
[1960] 3 SCR 371 [LNIND 1960 SC 92], per Gajendragadkar J.
83 Workers of Dewan Tea Estate v Management (1964) 1 LLJ 358 [LNIND 1963 SC 264] (SC), per Gajendragadkar J.
84 R Narayanaswami v LC (1965) 2 LLJ 677 [LNIND 1965 MAD 23] (Mad), per Ramakrishan J.
85 Hope Textiles Ltd v State of Madhya Pradesh (1993) 1 LLJ 603 -04 (MP) (DB) : (1992) 65 FLR 770 : (1992) 2 MPJR 44, per
Kokje J.
86 Management of Gauhati Press Pvt Ltd v LC 1983 Lab IC 824, 827 (Gau), per Saikia J.
87 SAE Mazdoor Union v Labour Commr (2001) 4 LLN 1105. 1109-10, (MP), per Kulshreshta J.
88 RS Rekchand Mohatas Spg and Wvg Mills Pvt Ltd v LC (1968) 1 LLJ 610 [LNIND 1967 BOM 38], 613 (Bom), per Paranjpe J.
89 Ibid, 614.
90 MA Veiyra v CP Fernadez (1956) 1 LLJ 547 [LNIND 1955 BOM 261], 550 (Bom) (DB), per Chagla CJ.
91 KT Rolling Mills Pvt Ltd v MR Meh (1963) 2 LLJ 667 [LNIND 1962 SC 315] (Bom) (FB).
92 South India Corpn v All Kerala CFW Federation (1960) 2 LLJ 103 (Ker) : AIR 1960 Ker 208 [LNIND 1959 KER 246]: 1960 KLJ
129, per TK Joseph J.
93 Workers of Dewan Tea Estate v Management (1964) 1 LLJ 358 [LNIND 1963 SC 264] (SC), per Gajendragadkar J.
94 (1976) 1 LLJ 493 [LNIND 1976 SC 49] (SC), per Untwalia J.
95 Workmen of Firestone TRCI Pvt Ltd v Firestone Ltd (1976) 1 LLJ 493 [LNIND 1976 SC 49], 497 (SC), per Untwalia J.
96 Tatanagar Foundry Co v Workmen (1962) 1 LLJ 382 [LNIND 1962 SC 110], 385 (SC) : AIR 1962 SC 1533 [LNIND 1962 SC
110]: 1962 Supp (3) SCR 795, per Gajendragadkar J.
1 MA Veryra v CP Fernandez (1956) 1 LLJ 547 [LNIND 1955 BOM 261] (Born), per Chagla CJ.
2 Anusuyabai Vithal v JH Mehta (1959) 2 LLJ 742, 744 (Born) (DB) : (1959) 61 Bom LR 417, per Chainani CJ.
3 Kairbetta Estate v Rajamanickam (1960) 2 LLJ 275 [LNIND 1960 SC 92], 277 (SC), per Gajendragadkar J.
4 H Chinnapan v Kaleeswara Mills Ltd (1968) 1 LLJ 352, 354 (Mad), per Kailasam J.
5 Sri Ramachandra Spg Mills v State of Madras (1957) 1 LLJ 90, 92-93 (Mad): 1957 ILR 90, per Balakrishna Ayyar J.
6 Brought into force on 21 August 1984.

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7 Mohamed Samsuddin v Sasamusa Sugar Works Ltd (1956) 1 LLJ 575, 577 (LAT).
8 Express Newspapers Ltd v Workers (1962) 2 LLJ 227, 232 (SC), per Gajendragadkar J.
9 Kairbetta Estate v Rajamanickam (1960) 2 LLJ 275 [LNIND 1960 SC 92], 278 (SC), per Gajendragadkar J.
10 Taylor, The Vountary Arbitration of Labour Disputes, 1951, 49 Mich, L Rev 787, 789-90.
11 RE Mathews, Labor Relations and the Law, 1953, p 294.
12 Andhra Pradesh EEC v APEEC Staff Union (1987) 1 LLJ 324, 327 (AP), per K Ramaswamy J.
13 Feroz Din v State of West Bengal (1960) 1 LLJ 244 [LNIND 1959 SC 208], 249 (SC), per Sarkar J.
14 Mohamed Samsuddin v Sasamsua Sugar Works Ltd (1956) 1 LLJ; 575, 577 (LAT).
15 Shakti Electro Mechanical Industries Pvt Ltd v FN Lala (1974) 2 LLJ 1, 5-6 (Born) : (1974) 76 Bom LR 42 : 1974 Mhlj 264
[LNIND 1972 BOM 61], per KK Desai J.
16 Feroz Din v State of West Bengal (1960) 1 LLJ 244 [LNIND 1959 SC 208], 248 (SC), per Sarkar J.
17 Mohamed Samsuddin v Sasamusa Sugar Works Ltd (1956) 1 LLJ 575 (LAT).
18 Lakshmi Devi Sugar Mills Ltd v Ram Sarup (1957) 1 LLJ 17 [LNIND 1956 SC 85], 22 (SC), per Bhagwati J.
19 Express Newspapers Ltd v Workers & Staff Employed (1962) 2 LLJ 227, 232 (SC) : AIR 1963 SC 569 [LNIND 1962 SC 253]:
[1963] 3 SCR 540 [LNIND 1962 SC 253], per Gajendragadkar J.
20 Express Newspapers Ltd v Workers & Staff (1962) 2 LLJ 227, 232 (SC), AIR 1963 SC 569 [LNIND 1962 SC 253] per
Gajendragadkar J.
21 General Labour Union (Red Flag), Bombay v BV Chavan 1985 Lab IC 726, 728 (SC), per Desai J.
22 Govrepore Co Ltd v Nuddea Mills Co Ltd (1990) 2 LLJ 245 [LNIND 1989 CAL 262], 247 (Cal), per MK Mukherjee J.
23 Mgmt of RF Engg Ltd v State of Bihar 1970 Lab IC 1119, 1126 (Pat) (DB), per Untwalia J.
24 Kamalalaya Stores Karamchari Samity v Kamalalaya Stores Pvt Ltd 1977 Lab IC (NOC) 110 (Cal), per Basak J.
25 Lord Krishna Sugar Mills Ltd v State of Uttar Pradesh (1964) 2 LLJ 76 (All), per Dwivedi J.
26 Anamallais Timber Trust Ltd v Chacko (1952) 2 LLJ 604 (LAT).
27 Praboo Pandey v JK Jute Mills Co Ltd (1956) 1 LLJ 588 (LAT).
28 Industrial and General Engineering Co v Workmen (1964) 2 LLL 438(Mys) (DB), per Somnath Ayyar J.
29 State of Bihar v Deodar Jha AIR 1958 Pat 51, 58 (DB), per Banerji J.
30 Feroz Din v State of West Bengal (1960) 1 LLJ 244 [LNIND 1959 SC 208] (SC), per Sarkar J.
31 Iron Moulders’ Union v Allis-Chambers Co 20 LRA (NS) 315.
32 Abrams v Alien 173 AIR 671.
33 Gobindo Sheet Metal Works and Foundry v Workmen 11 FJR 363 (LAT).
34 Pipraich Sugar Mills Ltd v Workmen 10 FJR 413 (LAT).
35 Workmen of Sur Iron and Steel Co Pvt Ltd v Mgmt (1971) 1 LLJ 570, 573 (SC), per Bhargava J.
36 Northbrook Jute Co Ltd v Workmen (1960) 1 LLJ 580 [LNIND 1960 SC 87] (SC), per Das Gupta J.
37 Lord Krishna Sugar Mills Ltd v State of Uttar Pradesh (1964) 2 LLJ (79) (All), per Dwivedi J.
38 India Machinery Mazdoor Union v India Machinery Co Ltd (1956) 2 LLJ 408 (LAT).
39 Mgmt of Hindustan Steel Ltd v State of Orissa 1970 Lab IC 1233 (Ori) (DB), per RN Misra J.
40 India Marine Service Pvt Ltd v Workmen (1963) 1 LLJ 122 [LNIND 1962 SC 260], 126 (SC), per Mudholkar J.
41 Northern Dooars Tea Co Ltd v Workmen of Dem Dima Tea Estate (1964) 1 LLJ 436 [LNIND 1963 SC 184], 440 (SC), per
Gajendragadkar J.
42 Pradip Lamp Works v Pradip Lamp Works Karamchari Sangh (1956) 1 LLJ 507 (SC), per Dua J.
43 Itakhoolie Tea Estate v Workmen (1960) 2 LLJ 95 [LNIND 1960 SC 8] (SC), per Subba Rao J.
44 Bhowra Coke Plant v Bhowra Coke Plant Workers’ Union (1956) 1 LLJ 195 (LAT).
45 Cement Works Karamchari Sangh v IT 1971 Lab IC 143, 146-47 (Raj), per Tyagi J.
46 Municipal Council, Washim v Manguji Zenduji Dhamane 1978 Lab IC 881, 888 (Bom) (DB), per Dharmadhikari J.

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47 Municipal and Panchayat Employees Union v State of Gujarat (1988) 1 LLJ 309 (Guj), per Ahmadi J.
48 Workmen of State Bank of India v State Bank of India 1990 Lab IC 1750 (SC), per Sawant J.
49 Avon Services (Production Agencies) Pvt Ltd v IT (1979) 1 LLJ 1 [LNIND 1978 SC 284], 7 (SC), per Desai J.
50 Pipraich Sugar Mills Ltd v PSM Mazdoor Union (1957) 1 LLJ 235 [LNIND 1956 SC 84], 239 (SC) : AIR 1957 SC 95 [LNIND
1956 SC 84]: [1956] 1 SCR 72 [LNIND 1956 SC 9] per Venkatarama Ayyar J.
51 Santosh Gupta v State Bank of Patiala, (1980) II LLN 170(SC), per Chinnappa Reddy J.
52 Bharat Coking Coal Ltd v CGIT 1995 Lab IC 971, 974 (Cal), per AK Chakravarty J.
53 Ibid, 241-42.
54 Barsi Light Rly Co Ltd v KN Joglekar (1957) 1 LLJ 243 [LNIND 1956 SC 104], 247 (SC), per SK Das J.
55 Ibid, 248-52.
56 Kamleshkumar R Mehta v PO, CGIT (1980) 1 LLJ 336, 346 (Bom) (DB) : 1979 mh LJ 874 per Lentin J.
57 Anakapalle CAIS Ltd v Workmen (1962) 2 LLJ 621 [LNIND 1962 SC 345], 628-29 (SC) : AIR 1963 SC 1489 [LNIND 1962 SC
345]: [1963] supp 1 SCR 730 per Gajendragadkar J.
58 Municipal Corpn of Greater Bombay v LAT (1957) 1 LLJ 37, 44 (Bom), per Shah J.
59 Mst Dewli Bakaram v State Industrial Court (1959) 1 LLJ 475 [LNIND 1958 BOM 99] (Bom) (DB), per Mudholkar J.
60 National Garage v J Gonsalves (1962) 1 LLJ 56 [LNIND 1961 BOM 51] (Bom) (FB) : AIR 1962 Bom 152 [LNIND 1961 BOM
53] per Chainani CJ.
61 Goodlass Nerolac Paints Pvt Ltd v Chief Commr, Delhi (1967) 1 LLJ 545 [LNIND 1966 PNH 57] (Punj) : AIR 1962 Bom 152
[LNIND 1961 BOM 53] per Narula J.
62 Haji Ismail Said & Son Pvt Ltd v Fourth IT (1966) 2 LLJ 59 [LNIND 1965 CAL 127], 68 (Cal) (DB) : AIR 1966 Cal 375 [LNIND
1965 CAL 127] per PB Mukharji J.
63 Burrakur Coal Co Ltd v Azimuddin Ashraff (1960) 2 LLJ 434, 437-38 (Pat) (DB) : AIR 1960 Pat 554 per Kanhaiya Singh J.
64 Rajasthan SEB v LC (1966) 1 LLJ 381, 388-89 (Raj) (DB) : AIR 1966 Raj 56 per Kan Singh J.
65 Mettur Industries Ltd v AR Verma (1958) 2 LLJ 326 [LNIND 1958 MAD 52] (Mad) : AIR 1959 Mad 479 [LNIND 1958 MAD 52]
per Balakrishna Ayyar J.
66 State Transport Controller v IT (1965) 2 LLJ 376, 385-86 (Ori) (DB).
67 SK Neogi v Union of India AIR 1970 Assam & Nag 131, 137 (DB), per Goswami J.
68 CVA Hydross & Son v Joseph Sanjon (1967) 1 LLJ 509 (Ker) : 1966 KLJ 113 per Mathew J.
69 Digwadih Colliery v Workmen (1965) 2 LLJ 118 [LNIND 1965 SC 93]-19 (SC) : AIR 1966 SC 75 [LNIND 1965 SC 93]: [1965] 3
SCR 448 [LNIND 1965 SC 93] per Hidayatullah J.
70 Mgmt of Wilcox Buckwell (India) Ltd v Jagannath 1974 Lab IC 706 -07 (SC), per Grover J.
71 Delhi Cloth and Gen Mills Co Ltd v Shambhu Nath Mukherjee 1977 Lab IC 1695 [LNIND 1977 SC 280], 1698 (SC), per Goswami
J.
72 State of Punjab v Labour Court AIR 1979 SC 1981 [LNIND 1979 SC 410]: 1980 Lab IC 1084 : [1980] 1 SCR 953 [LNIND 1979
SC 410] per Pathak J.
73 A Sambanthan v PO Addl LC (1998) 3 LLN 388, 393 (Mad), per Balasubramanian J.
74 Government of India (2002), Report of NCL-II, p 39, para 6.43.
75 Haji Ismail Said and Son Pvt Ltd v Fourth IT (1966) 2 LLJ 59 [LNIND 1965 CAL 127], 68 (Cal) (DB) : AIR 1966 Cal 375
[LNIND 1965 CAL 127] per PB Mukharji J.
76 Devidayal N Sharma v State IC (1961) 1 LLJ 167 (Bom) (DB) : AIR 1959 Bom 65 [LNIND 1958 BOM 82] per Mudholkar J.
77 Amritsar Rayon & Silk Mills Pvt Ltd v IT (1962) 1 LLJ 176 (Punj), per Gosain J.
78 SK Neogi v Union of India AIR 1970 Assam & Nag 131,137 (DB), per Goswami J.
79 S Kannan v Union of India 1978 Lab IC (NOC) 128 (Mad), per Mohan J.
80 L Krishnan v Divl Personnel Officer, Southern Rly (1972) 2 LLJ 568 (Ker) (DB) 1972 KLJ 1001 per Subramonian Poti J.
81 Divl PO, Southern Rly v GJ Reddy 1976 Lab IC 115, 120 (AP) (DB), per Chinnappa Reddy J.

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82 State Bank of India v N Sundaramony (1975) 1 LLJ 453 [LNIND 1975 MAD 66] (Mad) (DB) (1975) ILR 3 Mad 150 per
Veeraswamy J.
83 Basant Lal Sah v DME (C&W) NE Rly 1976 Lab IC 609 (Pat) (DB), per BD Singh J.
84 Balkrishna Ganpat v Ruston and Horns (India) Ltd, Bombay (1956) 1 LLJ 599 (LAT).
85 Hindustan Steel Ltd v State of Orissa 1970 Lab IC 345 (Ori) (DB), per RN Misra J.
86 State Bank of India v N Sundaramony (1976) 1 LLJ 478 [LNIND 1976 SC 13] (SC) : AIR 1976 SC 1111 [LNIND 1976 SC 13]:
1976 Lab IC 769 [LNIND 1976 SC 13] per Krishna Iyer J.
87 Pipraich Sugar Mills (1957) 1 LLJ 235 [LNIND 1956 SC 84] (SC): AIR 1957 SC 95 [LNIND 1956 SC 84] per Venkatarama
Ayyar J.
88 Hariprasad Shivshankar Shukla v AD Divekar (1957) 1 LLJ 243 [LNIND 1956 SC 104] (SC), per SK Das J.
89 Hindustan Steel Ltd v State of Orissa (1977) 1 LLJ 1 [LNIND 1976 SC 330], 3-4 (SC), per Gupta J.
90 Basant Lal Sah v DME(CW) NE Rly, (1977) 2 LLJ 154, 161 (Pat) (DB), per BD Singh J.
91 Asst PO, Southern Rly v KT Antony (1978) 2 LLJ 254 (Ker) : ILR 1978 (1) Kev 216

End of Document

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER I Preliminary

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER I Preliminary

S. 2. Definitions.—

Post Sundaramony Phase - Judicial Chaos

The High Courts of Delhi,92 and Bombay,93 and a single judge of the Madras High Court,94 held that there was no
inconsistency between the ratio of Barsi Light Rly and that of the N Sundaramony and Hindustan Steel. In other words, the
ratio of the Barsi Light Rly case, that ‘retrenchment’ is a discharge of surplus labour by the employer, ‘for any reason
whatsoever’, has remained unshaken by the subsequent decisions, in State Bank of India and Hindustan Steel, and has not
been in any way, departed from. On the other hand, the Madras High Court, in Raghavachari, held that the concept of
surplusage is no longer sustainable, in view of the definition of retrenchment meaning ‘the termination by the employer, of
the services of a workman for any reason whatsoever’.95 But in Santosh Gupta, a two-judge Bench of the Supreme Court
again discountenanced the contention that retrenchment means a discharge of a workman on account of surplusage, with
the observation:

If this submission is right, there was no need to define the expression ‘retrenchment’ and in such wide terms. We cannot assume
that the Parliament was undertaking an exercise in futility, to give a long-winded definition, merely to say that the expression
means what it always meant.96

In this case, the service of the employee was terminated after the completion of 240 days of continuous service, before the
date of the termination of service, without complying with the requirements of the provisions of s 25F. The termination of
service as ‘retrenchment’ was disputed by the employee on the ground of non-compliance with the provisions of s 25F,
which was contested by the employer on the ground that it was not a case of ‘retrenchment’, because the service was
terminated for the reason that the employee had failed to pass the relevant test required for confirmation in the service. It
was contended that since it was not a case of surplusage, there was no ‘retrenchment’ of the employee. The tribunal
accepted the pleas of the employer. In appeal by special leave, the Supreme Court distinguished Barsi Light Rly on the
ground that it was decided before the insertion of the present ss 25FF and 25FFF in the Act. The court also noticed the
observations in that case to the effect that a ‘termination of service for any reason whatsoever’, would mean ‘no more and
less than the discharge of a labour force which is a surplusage, but glossed that the misunderstanding of these observations
resulted in confusion, firstly from not appreciating the real question which was posed and answered in that case and,
secondly, the reference to discharge on account of surplusage was ‘illustrative, and not exhaustive, by way of contrast with
a discharge on account of transfer or closure of business’. Then, the court relied on the observations in Hindustan Steel, to
the effect that there was nothing inconsistent in N Sundaramony’s case with Barsi Light Rly. In coming to the conclusion
that the words ‘for any reasons whatsoever’, in the definition of ‘retrenchment’, should be understood to mean ‘what they
plainly say’, the court observed that the expression ‘retrenchment’ must include ‘every termination of the service of a
workman, by an act of the employer’, unhampered by precedent. In other words, every termination of service of a
workman, whether as surplus or otherwise, would be ‘retrenchment’. This view was reiterated by a majority of a three
judge Bench in Surendra Kumar.1 In Mohan Lal,2 again, a two-judge Bench of the court observed that ‘niceties and
semantics apart, a termination by the employer, of the service of a workman, for any reason whatsoever, would constitute
retrenchment, except in such cases excepted in the section itself’. In this case also, the court emphasised that Barsi Light
Rly was decided in the context of closure and was not dealing with the definition of retrenchment under s 2(oo) and
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adopted the reasoning of Santosh Gupta. Likewise, another two judge Bench of the court, in Robert D’Souza,3 over-ruling
the decision of the Full Bench of the Kerala High Courts, reiterated the later view, departing from Barsi Light Rly. In
Gammon India, the termination of the service of the workman, on account of recession and reduction in the volume of
work of the employer company, was held to be retrenchment in the traditional sense of the term.4 The court then added a
comment that that view does not hold the field, in view of the subsequent decisions ending with Robert D’ Souza. Again,
in KSRTC, another two-judge Bench of the court contented itself with the observation:

We are inclined to hold that the stage has come when the view indicated in N Sundaramony’s (supra) has been ‘absorbed into the
consensus’ and there is no scope for putting the clock back or for an anticlockwise operation.5

But in all these cases, the court has kept its eyes shut as to the impact of this view on the other provisions of the Act. It is
submitted that N Sundaramony, Hindustan Steel, Delhi Cloth Mills, Santosh Gupta, Surendra Kumar Verma, Mohan Lal
and L Robert D’Souza cases were wrongly decided. These decisions are not in conformity with the ratio decidendi of the
five-judge Bench decision in the Barsi Light Rly case, where the court, on the construction of ‘retrenchment’ as defined in
s 2(oo), has unequivocally stated that ‘retrenchment means discharge of surplus labour or staff by the employer, for any
reason whatsoever...in no case is there any retrenchment unless there is a discharge of surplus labour or staff in a
continuing or running industry’. In other words, unless there is discharge of surplus labour or staff, there can be no
retrenchment. In Sundaramony’s case, the employee used to be intermittently employed for a period of nine days and then
discharged from service. It was not a case of discharge of surplus labour, but it was a case of discharge of the workman
from service under the contract. Evidently, it was a case of an unfair labour practice. The result of striking down the
termination of the service of the workman could, therefore, have been achieved directly by holding it to be a case of an
unfair labour practice, instead of adopting the dubious path of holding it to be a case of retrenchment and striking it down
for non-compliance of s 25F and thus, stultifying the law. The Hindustan Steel case again, was not a case of discharge of
surplus labour. It was a case of discharge of a workman by efflux of time, under the contract. This may not even be a case
of termination by the employer, within the meaning of the definition of ‘retrenchment’, because the termination of service
by efflux of time is by the mutual contract of the parties and cannot be said to be a ‘termination of service by the
employer’.

In Delhi Cloth Mill’s case, the name of the employee was struck off the rolls, the act purporting to be under a Standing
Order, for having absented himself for more than eight consecutive days. But, in fact, he was not absent for eight
consecutive days. This was again a case of a wrongful termination of service, rather than ‘retrenchment’, because there was
no discharge of the workman as surplus. Santosh Gupta’s case too was not a case of a discharge of the employee as
surplus. The employee was discharged from the service for not having taken the test required for qualifying for
confirmation. Though in the Hindustan Steel case, at least a specious observation was made that Sundarammoney had not
departed from the ratio of the Barsi Light Rly case, however, in the case of Santosh Gupta, the majority opinion in
Surendra Kumar Verma, Mohan Lal, KSRTC, leave no room for doubt that there is a clear departure. The decision of a
larger Bench of the court must prevail over the decisions of smaller benches.6 Now the five judge Bench in Punjab LDRC,7
has reaffirmed the dicta of the smaller benches, deviating from the holding in Barsi Light Rly. As pointed out by Lord
Hailsham of Marylebone, the Lord Chancellor, in Cassel & Co Ltd v Broom :

...in the hierarchical system of courts which exist in the country, it is necessary for each lower tier...to accept loyally, the decisions
of the higher tiers. Where decisions manifestly conflict, the decision in Young v Bristol Aeroplane Co Ltd. ,8 offers guidance to
each tier, in matters affecting its own decisions. It does not entitle it to question considered decision in the upper tier, with the same
freedom... 9

If the court were of the view that Barsi Light Rly, did not lay down the correct law, it is desirable to constitute a larger
Bench and restate the law. The later decisions have accentuated the literal meaning of the expression, ‘the termination by
the employer of the service of a workman for any reason whatsoever’, without working out the implications and effect of
the other relevant provisions of the Act, on the construction of the definitions of ‘retrenchment’. The concept of
‘surplusage’ is implicit in the scheme of the provisions of the act, relating to ‘retrenchment’, viz, s 2A, s 25F, s 25G, s 25H,
s 25N, s. 25O, item 10 of the Fourth Schedule and rr 76 and 76A, read with Forms P and PA of the Industrial Disputes
(Central) Rules 1957. Though in the Punjab Land Development & Reclamation Corpn case, the court did refer to ss 25F,
25G and 25H, instead of working out their implication on the interpretation of the definition, it tangentially slipped into the
concept of a harmonious construction, which neither the context nor the text of the definition warrants. While adopting the
literal construction, the court has accentuated that the ratio of Barsi Light Rly should be understood in the context of its
facts dealing with the, question that the termination of the services of the workmen, on closure of an undertaking, did not
fall within the definition of retrenchment, while completely losing sight of the clear and candid interpretation of the
definition by the earlier bench in Barsi Light Railway to the effect that retrenchment means discharge of surplus labour

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and that, in no case can there be retrenchment, if the discharge is not on account of surplasage. In the face of an
unequivocal interpretation of the language of the definition, by a Constitution Bench affirmed by two Constitution Benches
and one four-judge Bench (Hariprasad, Pipraich and Anakapalle), to say that the ratio of Barsi Light Rly was confined to
its own facts, ie, the termination of the services of the workmen on account of closure was not retrenchment is, to say the
least, a judicial perversion of highest order. Furthermore, if the ratio decidendi of Barsi Light Rly is to be confined to a
termination of service of the workman on closure, ignoring the unequivocal interpretation of the definition, then the ratio
of the cases like Bangalore Water Supply,10 should be confined to the facts of those cases and the views of the court on
other points should be treated no more than an obiter. From an analysis of these provisions, it would appear that it could
never have been the intention of the legislature, to make retrenchment synonymous with a discharge simpliciter, ie, ‘every
termination of the service under the contract’.11 If the observation in Santosh Gupta’s case, that ‘every termination of the
service of a workman by an act of the employer’, is ‘retrenchment’, is correct, then the termination of the service of an
individual workman will be virtually impossible and absurd consequences, by applying the provisions of s 25G, s 25H, s
25N and s 25Q, will follow. In Surendra Kumar Verma,12 in a separate judgment, Pathak J has recorded a candid and
unequivocal dissent from the holding in Santosh Gupta’s case, in observing: ‘I mention this only because I should not be
taken to have agreed with the interpretation of s 2(oo), rendered in Santosh Gupta v State Bank of Patiala’. This provides a
justification for the court to reconsider and restate the law on the subject, with certainty. Even in English Law, the
expression ‘redundancy’, which is the English counterpart of ‘retrenchment’, in its statutory definition, refers to three
broad categories of redundancy: ‘cession of the business or part of a business, moving or changing the place of
employment, the employees surplus to the requirements of a business’.13 While the appeals pending before the Supreme
Court were lying dormant under a labyrinth of dust layers, the legislature has provided some relief by inserting sub-cl (bb)
to s 2(oo), which excludes ‘a contractual termination of service’ from the definition of retrenchment’. See notes and
comments under s 2(oo)(bb).14 On the plain language of the definition, ‘retrenchment’ takes place only where the employer
terminates the service of a workman. Despite the use of the words ‘for any reason whatsoever’, wherever it is claimed that
there is retrenchment, it must necessarily be established that there is a termination of service of the workman, by the
employer.15 In other words, if the termination of the service of the workman is not by the employer, but is caused by the
workman himself, by resigning or abandoning the job or it takes place due to his death, such termination will not fall
within the ambit of the definition of ‘retrenchment’, because such termination of service is not caused by the employer.16

In Shambhu Nath Mukherjee,17 the employer company struck the name of the workman off its rolls, purporting to act under
the relevant Standing Order, for remaining absent for ‘more than eight consecutive days’. But, in fact, the workman had
not been absent for eight consecutive days. In these circumstances, the court held that striking the name of the workman
off the rolls of the company, amounted to retrenchment, because the termination was caused by the employer and it was
not under any Standing Order. This case, therefore, is not an authority for the proposition that where a workman is deemed
to have himself left the service, it will be a case of retrenchment. Likewise, in Robert D’Souza,18 the language of the order
was as follows: ‘your services are deemed to have been terminated’. From the language too, it would appear that the
service was terminated by the employer and not by the employee himself. In Madhabananda Jena,19 no contemporaneous
material was placed before the court, to prove that the workman had been treated as an absconder and was dealt with as
such. Furthermore, no cogent and plausible reason had been given as to how he could abscond from duty after having put
in five years of service. Nor was he informed that if he did not join duty by a specific date, his service would be
terminated. Striking off the name of the workman on these facts and in there circumstances, was held to amount to a
termination of service by the employer. In HD Singh,20 the Reserve Bank of India struck the name of the workman off its
rolls, for the reason that he had passed the matriculation examination, without even giving him any order in writing or
otherwise informing him. In this situation, striking the name of the workman off the bank’s rolls, was held to be
‘retrenchment’. The Andhra Pradesh Electricity Board, in terms of its Regulation 28(3), passed an order declaring that the
workman had ceased to be in service, for absenting himself from duty without leave, for over a year. It was held that such
an order amounts to retrenchment.21 A single judge of the Calcutta High Court, in Naresh Chandra Das held that an
automatic termination of the service of a workman, in accordance with the Standing Orders, will amount to retrenchment.22
In this decision, the single judge has not considered the fundamental law, but has contented himself by juxtaposing the
rival contentions and then, in the end, saying that there was no further scope to hold that ‘simply because of the action of
the employee, his service stood terminated, and the employer was not responsible for such termination, and the same was
not retrenchment within the meaning of s 2(oo) ’. Hardly any logical reasoning is discernible from the judgment. This view
is incorrect. But if the power under the Standing Order is exercised mala fide, it would be a different matter.

For instance, in Dabur, in view of the conduct of the employer in not sanctioning or refusing extension of the leave of the
concerned workman, as required by the Standing Orders, it was not permitted to treat the service of the workman to have
automatically been terminated.23 The Madhya Pradesh High Court held that the termination of the service of a workman in
terms of the Standing Order, on the ground of inefficient and unsatisfactory work, would amount to retrenchment.24 But the
Orissa High Court held that where the Standing Orders provide that if the management is satisfied that it is inexpedient or
against the interest of security, to continue to employ a workman, he may be discharged, and such discharge under the
Standing Orders would not amount to retrenchment.25 Likewise, a single judge of the Karnataka High Court, in Binny Ltd,

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has held that the termination of the service of a workman in terms of the standing orders, for absence from duty for a
certain number of days, on his being arrested by the Police under s IPC for certain offences, will not constitute
retrenchment.26 Similarly, the Bombay High Court, in PSS Kharkhana, held that a striking off of the name of the workman
from the rolls, for remaining absent for about three years, without any justification, would not constitute retrenchment. The
court further observed that though striking the name of a workman, off the roll, without anything more, would constitute
retrenchment, every striking off of the name from the rolls, would not constitute retrenchment. The intention to abandon
the job is normally not to be attributed to an employee. It would ultimately depend on the established facts and
circumstances of each case. It is just not possible to lay down a universal proposition that it may generally be observed,
that a long and continuous absence for years together, without any reason or justification whatever and without anything
more, can give rise to an inference of abandonment.27 In providing work to a casual workman for a short periods, the
consequential breaks in service being unavoidable, they will not necessarily lead to an inference of the termination of
employment, as contemplated by the definition of retrenchment. There must be undisputable evidence of the fact that the
casual workmen who have put in continuous service of not less than one year, have been unequivocally told that they will
never be given work.28 A single judge of the Bombay High Court held that the termination of the service of a workman for
a ‘loss of confidence’, would amount to retrenchment.29 But in view of the undernoted dicta of the Supreme Court,30 this
holding is no longer good law. A single judge of the Bombay High Court held that a termination of the service of a
workman, who had attained the age of 60 years, ‘when retrenchment becomes necessary’ in terms of the relevant certified
Standing Orders of the corporation, will be a retrenchment, requiring compliance with s 25F or 25 M, as the case may be.31

The decision rendered by a Constitution Bench, presided over by Mukharji CJI, in Punjab LDRC, has been identified for a
detailed analysis, not because it had contributed in any commendable way, to the development of the law relating to
retrenchment, but because of the host of infirmities manifested in the reasoning, the patent misreading of the ratio of Barsi
Light Railway and other cases, the misapplication of law to the facts, and the predominantly obnoxious decision that was
finally handed down by the Bench. The reasoning of Saikia J, who delivered the judgment, was inconsistent, ambivalent
and is flooded with half tones. It is proposed to discuss a few aspects of this monumental decision below. Referring to
Hariprasad Shivshankar Shukla, he observed:

...the court was neither called upon to decide, nor did it decide, whether in a continuing business, retrenchment was confined only
to a discharge of the surplus staff and the reference to discharge of surplusage was for the purpose of contrasting the situation in
that case, ie, workmen were being retrenched because of cessation of business and those observations did not constitute reasons for
the decision. What was decided was that if there was not a continuing industry, the provision could not apply. In fact, the question
whether retrenchment did or did not include other terminations, was never required to be decided in Hariprasad and could not,
therefore, have been, or be taken to have been, decided by this court.32

This is a completely tainted reading of Hariprasad. The issue raised in Hariprasad (along with Barsi Light Railway and
Pipraich Sugar Mills) was, ‘whether retrenchment compensation was payable in the event of termination due to transfer or
closure of undertaking.’ These cases being the first of their kind to come up to the highest court, the Constitution Bench
could not have straightaway determined that issue, without first answering the fundamental questions, namely, (i) what is
the connotation of the term ‘retrenchment’ and (ii) what is its denotation, ie, would it cover a case of termination
occasioned by a transfer or closure of the undertaking? The court rightly went into the basic issue of the ‘definition’, on
which the derivative issue of the entitlement to compensation was solely dependant. The learned judges answered the basic
question by observing that ‘retrenchment’ could have no wider meaning than the ordinary connotation of the word,
according to which, it meant ‘the discharge of surplus labour or staff’. They finally held that there could be no
retrenchment, in the event of an en bloc termination due to a transfer or closure of the undertaking, on the principle that
retrenchment presupposes the continuance of the business by the same employer, with the residual labour force. For that
matter, the focus of the definition is on ‘the’ employer and not on ‘an’ employer. The principle of ‘last come, first go’,
publication of seniority lists and the re-employment of retrenched workmen, richly endorse the ratio of Hariprasad, while
rejecting Sundaramony and other cases decided by smaller benches. It would be as absurd to deny the nexus between these
provisions and the definition, as to affirm their applicability to a case of loss of lien or discharge due to efflux of time.
Then comes the following observation, which speaks volumes about the concern of Saikia J (or the lack of it) for judicial
discipline-an issue that was indeed raised by the counsel:

In a fast developing branch of Industrial and Labour Law, it may not always be of particular importance to rigidly adhere to a
precedent, and a precedent may need to be departed from if the basis of legislation changes.33

A vast body of case law was evolved by the Apex Court on the principles of industrial adjudication and on almost every
aspect of the employment relationship, during the 1950s and 1960s itself, thanks to eminent judges of the caliber and
vision of Dr Gajendragadkar. Labour Law was not in an embryonic stage, as implied by this averment and at any rate,

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certainly not in the 1990s. Granted his proposition, still the reasoning hardly lends any support to the conclusion reached,
as it calls for an affirmative answer to the further question, ‘was there any change in the basis of legislation between
Hariprasad-Anakapalle,34 on the one hand and Sundaramony-Shambhunath Mukherjee on the other?’ The answer is an
emphatic ‘No’. Thus, the departure heralded by the smaller benches, was without merit. The judicial trend began by Iyer J,
and fostered by others, received the clearance of the Constitution Bench in Punjab Land Development Corporation, with a
cascading effect down the line. Commenting on these disquieting judicial trends, HM Seervai observes:

...if judges disregard judgments binding on them, in order to give play to their own attitudes, concepts and ideals, the result can
only be judicial chaos... this state of affairs must bring the administration of justice into disrepute by substituting for the certainty
of the law, as laid down by the Constitution Bench of the Supreme Court, the uncertainty of the fluctuating opinion of different
judges.35

This prophetic observation came true very soon in the realm of industrial law. In Kamaleshkumar, (decided on 4
September 1979), the Bombay High Court held that retrenchment under s 2(oo), meant only termination on account of
surplusage and if the termination was for any other reason, it was not retrenchment. A few observations made by Lentin J,
deserve special mention.

A plain reading of section 2A ... gives a clear and unfailing indication that the legislature itself, had no intention of confusing or
identifying retrenchment with other forms of termination of service and that in order to bring the case of an individual workman
within the four corners of retrenchment, recourse can only be had to the definition of that word as contained in section 2(oo) ....
Section 25G provides for the procedure for retrenchment, which can be summarised by the phraseology ‘last come, first go’. Such
a procedure would have been inconceivable if termination of service in a case other than surplusage, viz, say, for loss of
confidence, was intended by the legislature to be categorised as retrenchment. This section also brings to the forefront, that the
centrifugal force revolving round the terminology ‘retrenchment’ is excess or surplusage or superfluity... Section 25H makes this
even clearer. That section provides for the re-employment of retrenched workmen and states that where any workmen are
retrenched and the employer proposes to take into his employ any person, he shall, in the prescribed manner, give an opportunity to
the retrenched workmen to offer themselves for re-employment and such retrenched workmen shall have preference over other
persons. ... It would be anomalous to the point of absurdity and would result in a horrifying situation if an employer, who
terminates the service of his workman for the loss of confidence or inefficiency or insubordination and the like, is to be expected ...
to re-employ that very worker in the same industry or business and that too, in preference to other workmen, whose services are not
terminated either for loss of confidence, inefficiency, insubordination and the like...The result would be utter chaos, where industry
and business would grind to a halt. (pp 324-23). ... Item No 10 of the Fourth Schedule, which provides for conditions of service, for
a change of which, notice is to be given, provides for ‘rationalisation, standardization or improvement of plant or technique which
is likely to lead to retrenchment of workmen.’ Rule 81 of the Industrial Disputes (Bombay) Rules 1957, provides for the
maintenance of a seniority list of workmen and states that the employer shall prepare a list of all workmen in the particular
category, from which retrenchment is contemplated, arranged according to the seniority of their service in that category and cause
a copy thereof to be pasted on a notice board in a conspicuous place, in the premises of the industrial establishment, at least seven
days before the actual date of retrenchment. Form XXIV-A-I of form of notice, to be given by an employer under clause (c) of sub-
section (1) of section 25N of the Industrial Disputes Act, provides that the employer must state that he proposes to retrench the
particular workmen and he has to give a reply against each item mentioned in the annexure. Item 18 of that annexure, to which the
employer must give his reply, is: ‘anticipated savings due to the proposed retrenchment.’ Thus, Item No 10, Rule 81 and form
XXIV-A-I are yet further indications that it was not, and could never have been, the intention of the legislature, to make
retrenchment synonymous with a termination on grounds like loss of confidence, insubordination or inefficiency. The entire
scheme of the Act emphasises this abundant measure.36

Lentin J, had correctly analysed the definition, in an orderly and systematic way, with reference to the Constitution Bench
decision rendered in Hariprasad and other cognate provisions of the Act and the rules made thereunder, and held that
retrenchment means a termination on account of surplusage, and it was not the intention of the legislature to confuse or
identify it with other forms of termination of service, such as, discharge, dismissal, termination, and so on, appearing in
various sections of the IDA. This decision is pre-eminently right, while those rendered by the Supreme Court in
Sundaramony, Santosh Gupta, Sambhunath Mukherjee, Hindustan Steel, Surendrakumar Verma, Mohan Lal, Robert
D’Souza, including that of another Constitution Bench in Punjab Land Development Corporation, and others, are wholly
misconceived and positively repugnant to the objects and scheme of the Act. Then came Guest Keen Williams, (decided in
1992), where the facts were: A workman, having availed an absence due to sickness, granted by ESI Corporation, did not
report for duty on the expiry of the period and remained absent without permission. Consequently, the management
informed the workman that in terms of the Standing Orders, he must be deemed to have left the services of the company
without notice thereby, terminating his contract of service. The High Court held that the termination of service by the

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operation of Standing Order No 20, ie, remaining absent without leave for a specific period, resulting in the termination of
his services, would not fall under s 2(oo) and hence would not be ‘retrenchment’. Repelling the contentions raised by the
counsel on the basis of the Supreme Court decisions rendered in Sundaramony et al, including that in Punjab LDRC,
Mohan CJ, observed:

...as we have pointed out above, it was not by the act of the management, but it was by the operation of the Standing Order 20, that
the workman himself had terminated his contract of service. We are unable to accept the argument advanced on behalf of the
workman that the construction of the Standing Orders will have to yield to section 25J of the IDA, since it has an overriding effect.
This argument ignores the language of section 2(oo) of the IDA. Only if it falls under section 2(oo), will section 25J come into
play. Having regard to the pronouncement in Venkatayya’s case,37 we are not persuaded to conclude that in case of the workman
terminating his service, it would amount to a ‘discharge’ within the meaning of section 2(oo) of the IDA.38

Leaving aside the jugglery of words and phrases, the facts of the case in Guest Keen Williams, were no different from
Shambunath Mukherjee and Robert D’Souza. All the three cases refer to the same phenomenon, ie, continuous
unauthorised absence or overstay of leave, for more than 8 or 9 consecutive days, which entails a loss of lien for the
workman, the said absence having been treated as a voluntary abandonment of employment on his part. Accordingly, once
the intimation has been sent, the name of the employee stands struck off from the muster rolls of the establishment. The
observation of Mohan CJ, that the facts of Guest Keen Williams were different from Shambhunath Mukherjee and Robert
D’Souza, is, therefore, without force. It is not a case of resignation on the part of the workman. It was a case of a deemed
termination, occasioned by an unauthorised absence for a given number of days, and the case was identical to that of the
other two cases. Even so, the reliance placed by the learned Chief Justice on Buckingham & Carnatic, is refreshing, in the
light of the fact that all the later decisions led by Sundaramony, were wholly flawed in so far as they misconstrued the
definition in s 2(oo) and expanded its sweep beyond the scheme of the Act and the contemplation of the legislature.

The third case was that of PSS Karkhana, in which the management invoked the relevant provision of the Standing Orders
and struck off the name of a workman, who remained absent for more than 8 consecutive days (in this case, he was absent
for nearly three years). Puranik J, of the Bombay High Court, distinguished Shambhunath Mukherjee on facts and held that
there was no doubt that the workman had abandoned and relinquished his service, and that his removal from the roster was
a formality; that nothing survived in the dispute, and he was not entitled to reinstatement, much less continuity of service.39
The learned judge very rightly followed the decisions rendered by the Supreme Court in Venkatayya and National Engg
Industries,40 in preference to the perversions manifested in Sambhunath Mukherjee, Sundaramony and Hindustan Steel.
The above decision was affirmed by the Bombay High Court.41 At the first blush, the above three decisions of the Bombay
and Karnataka High Courts appear to be a violation of the ratio of Sundaramony, Robert D’Souza and Punjab LDRC. It
may also expose the learned judges to the charge of ‘judicial indiscipline’, for not honouring a binding precedent handed
down by a court of a superior jurisdiction, from Sundaramony onwards. Such a charge, if at all levelled, deserves to be
rejected in limine, on the ground that the credit for judicial indiscipline must go to Iyer, Reddy and Desai JJ, who created a
Frankenstein’s monster by waving the wand of judicial hyper-activism indiscriminately, in all directions. Nevertheless, a
detailed examination reveals that the learned judges in Kamlesh Kumar, Guest Keen Williams and PSS Karkhana preferred
to toe the line of reasoning adopted in Hariprasad, Barsi Light Railway, Pipraich, Anakapalle, Venkatayya and National
Engg Industries, and rejected outright, that of Sundaramony and others. In view of the fact that the smaller benches had
departed from a binding decision given by four Constitution Benches, the decisions of the smaller benches should be
treated as per incuriam. Thus, from this standpoint too, the Bombay and Karnataka High Courts were right in following
Hariprasad, as against Sundaramony and others. The sum-total of this discussion lends support to the view that a judge of
a High Court or the Supreme Court, if confronted with the dilemma as to which of the two conflicting ratios to choose, is
free to follow either the former, led by Hariprasad, or the latter, led by, Sundaramony, without being guilty of judicial
indiscipline.42 Adverting to the decision rendered by the Constitution Bench in Punjab LDRC, which runs counter to the
decision rendered by four Constitution Benches on the same issue, in Barsi Light Railway, Hariprasad, Pipraich and
Anakapalle, it is conceded that the Supreme Court is empowered to review its own decision and to lay down the correct
law. But the point at issue is “can a bench overrule the ratio evolved or affirmed by four co-ordinate benches? The
following observations of Gajendragadkar CJI, in Shri Bhagawan, may throw some light on this aspect:

If a learned single judge, hearing a matter, is inclined to take the view that the earlier decisions of the High Court, whether a
Division Bench or of a single judge, need to be reconsidered, he should not embark upon that inquiry sitting as a single judge, but
should refer the matter to a Division Bench or, in a proper case, place the relevant papers before the Chief Justice, to enable him to
constitute a larger bench to examine the question. That is the proper and traditional way to deal with such matters and it is founded
on healthy principles of judicial decorum and propriety. 43

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It is equally well settled that if a Bench of a lesser number of judges or a co-ordinate bench is of the opinion that the earlier
decision had not laid down the correct law, the only course left to it is to place the papers before the Chief Justice, for
constituting a larger bench to go into the matter comprehensively and all over. Assuming for the sake of argument, and
without conceding, that the Constitution Bench in Punjab LDRC had the power to reverse all the earlier decisions rendered
by the four Constitution Benches, in Barsi Light Railway, Hariprasad, Pipraich and Anakapalle, at one stroke, the points
for consideration would be: (i) Was there any review worth the name, except meekly endorsing the misconstruction placed
by the smaller benches? (ii) Was there any analysis of the import of terms such as discharge, dismissal, etc, with reference
to their similarities and dissimilarities? (iii) Was there any application of judicial mind to the contextual aspects, such as
the interaction between the definition and the provisions enshrined in Ch V-A? (iv) And, finally, has the Bench
pronounced the law in clear and unequivocal terms? The answer to all these questions is, again, an emphatic ‘No’. The
arguments advanced by Saikia J, lack conviction, apart from unfolding his struggle to persuade himself that there was
nothing inconsistent in the demonstrations of Sundaramony, vis-à-vis Hariprasad, whereas, the fact remains that
Sundaramony was a clear case of departure from a binding precedent, coupled with gross judicial in discipline and abuse
of judicial power on the part of lyer J. The Constitution Bench finally held:

Applying the above reasonings, principles and precedents, to the definition in section 2(oo) of the Act, we hold that ‘retrenchment’
means the termination by the employer of the service of a workman for any reason whatsoever, except those expressly excluded in
the section.

A reading of this verdict takes us as far as square one, and no further! Answers to the following basic issues are as elusive
after the decision, as they were before: What is the connotation and denotation of the phrase ‘termination by the
employer?’—a phrase that was given a wild interpretation by Iyer J and other judges? Does it cover a case of loss of lien
on appointment or voluntary abandonment of service, as stipulated in the Standing Orders? In both these cases, the
employer is, as a matter of procedure and for putting the records straight, required to inform the workman in writing, of the
fact that he has lost his lien on his appointment. Having intimated the workman thus, the next logical step would be to
strike his name off the rolls, signaling the severance of the employer-employee relationship, which, if not done, would
introduce an obnoxious element into the concept of employment. Should such ‘intimation’ per se, be treated as a ‘positive
act of termination by the employer’, as was held in Robert D’Souza?44Should the consequential ‘striking off of the name of
the workman from the rolls’ be regarded as a ‘positive act of termination by the employer’, as was held in Delhi Cloth
Mills? After going through the lengthy rhetoric, running into twenty-five pages, the reader is still left wondering, ‘what is
it that the court had ultimately decided?’ In several ways, the larger Bench decision was a judicial disaster. With great
respect, it is submitted that if Sundaramony was just confined to making bad law, Punjab Land Development Corporation
went a few steps further and made it even worse. This aspect is discussed below. Out of the cluster of 17 appeals, the facts
in respect of respondent no 645 are as follows:

[He was employed on probation, along with the other respondents] by the appellant, a partnership firm, on 12 June
1975...Respondent No 6 stopped attending his duties from 9 August 1975 and he left the service of his own accord. The labour
court, by its award dated 16 September 1980, held that the termination amounted to retrenchment and was illegal for non-
compliance with the provisions of section 25F of the Act and he was entitled to reinstatement, with full back wages. The
management’s writ petition challenging the award having been unsuccessful, it has appealed.

The following analysis of facts and law betrays the sub-standard quality of this decision:

(i) Respondent No 6 had put in some 60 days of service, which falls far short of 240 days, the minimum qualifying service
under Chapter V-A. Even assuming that the company had ostensibly retrenched him, the respondent would still not have
been eligible for either notice wages or compensation, because of the shortfall in the requirement of ‘continuous service’
[ section 25F, read with section 25B ]; and
(ii) in the second place, according to the facts admitted and recorded, he stopped attending duties and left the services on his
own accord, which exclude any positive act of ‘termination by the employer’ and hence, does not fall within the
definition in terms of the ratio evolved in the case, as cited above.

The Bench strangely decided the case by stating: ‘the result is that CA Nos...1898 of 1982...are dismissed with costs...’46
This virtually means that the final verdict runs spectacularly counter to the principles enunciated by the court and, still
worse, in the same case and in the same page. The Bench dismissed the appeal by an innocuous, one-line observation,
without realising that its final order was at loggerheads with its own ratio. The second case,47 in the same batch was,
according to the admitted facts, a case of dismissal for an act of misconduct, after holding a disciplinary inquiry, upheld by

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the labour court, but reversed by the High Court. The Constitution Bench dismissed the appeal by the same order, without
discussing the facts, which have nothing whatsoever to do with retrenchment! Was it not the duty of the court to decide the
preliminary issue of ‘whether a dismissal for an act of misconduct falls at all, within the sweep of the definition of
retrenchment’, before proceeding further? What justification can the court offer for mixing up a case of dismissal with
others relating to retrenchment, when the two are birds of different feathers altogether? The right course for the court
would have been to remand the cases involving ‘retrenchment’, to the respective lower courts, for disposing them of as per
the ratio evolved, while de-linking and handling those falling under ‘dismissal’ separately, than to take upon itself, the task
of grouping them together and giving a blanket decision in such a desolate manner.48

It is, however, refreshing to note that, even though the Supreme Court has so far, not opted for going into the larger
question relating to the connotation of retrenchment, the recent decisions clearly point to a shift in its approach to the
definition in s 2(oo). For instance, in Om Prakash, the Supreme Court observed that ‘retrenchment’, as defined in s 2(oo),
contemplates an act on the part of the employer, which puts an end to the service, to fall within its ambit. If the workman
ceased to report for duty and, even after he ceases to report for duty, it is not his case that at any point of time, he reported
for duty and was refused work, it could not be said that it was a case in which the employer had done anything to put an
end to his employment. Hence, such a case would not fall will the meaning of s 2(oo) of the Act, nor would it satisfy the
requirements of s 25F.49 Where the services of a workman were terminated as a consequence of his not attending to his
duties for more than six months, and it was found that he had remained absent for more than six years, despite an
intimation from the management, it was held that if the contract of employment provides for a termination of service in a
particular manner, the non-compliance of the provisions of s 25F would not nullify or vitiate the order.50 In Indian Airlines,
the Kerala High Court examined the definition of ‘retrenchment’ [ s 2(oo) ] in the light of the insertion of sub-cl (bb)
therein. Jagannatha Raju J, (for himself and Paripoornan, J), observed:

Section 2(oo), prior to the amendment of 1984, was in a particular manner. Subsequent to the amendment in 1984 and the
introduction of clause (bb), the termination of the service of the workman, as a result of the non-renewal of the contract of
employment, on its expiry or of such contract being terminated under a stipulation in that behalf, such termination of the employee
will not come within the meaning of ‘retrenchment’. This amendment, as indicated earlier, was brought in specifically to rectify the
situation created by the wide definition given to ‘retrenchment’ in N Sundaramony’s case. ()...In this context, it may be observed
that the law, as laid down by the Supreme Court in N Sundaramony’s case,51 is no longer good law, in view of the recent
Constitution Bench decision of the Supreme Court, in Punjab Land .... Labour Court.52 In this decision, the Supreme Court
considered elaborately, the effect of the judgment of Krishna Iyer J, in N Sundaramony’s case, and as to how that judgment was
rendered without referring to the earlier Constitution Bench decisions. The court dealt with these matters in paragraphs 36 to 39
and in paragraph 42, at page 503. It was clearly pointed out that the judgment in N Sundaramony’s case is bad law, as it did not
follow the earlier binding precedent of the Supreme Court and that the Constitution Bench decisions bind smaller divisions of the
court. In paragraph 58, the Supreme Court referred to the subsequent decision of Ranganath Misra J, in Management of Karnataka
State Road Transport Corporation...53and then dealt with the question of interpretation of section 2(oo) of the Act, from paragraph
61 onwards...” 54 ().

In this regard, it is necessary to point out that there was nothing in Punjab LDRC to suggest that the Constitution Bench
held that Sundaramony was bad in law, as averred by Raju J, in Indian Airlines case (supra). The following passages from
the decision of Punjab LDRC illustrate the point:

The question whether the positive content of section 2(oo), restricting the definition of workmen rendered surplus, for any reason,
whatsoever, is part of the ratio or not, submits Mr Venugopal, is wholly; an academic question in view of the fact that as many as
nine High Courts have restricted the applicability of sections 25F, 25G and 25H to only cases of termination of services of surplus
labour for any reason whatsoever and not to other types of termination, whatever may be the reason for such termination. Even if a
judgment was to be based on two alternative reasons or conclusions, each one of these alternative reasons or basis, would form the
ratio of the judgment. It is also urged that the argument would equally apply to the ratio of Anakapalle’s case, rendering the
judgment in Sundaramony’s case and the later decisions per incuriam, for not having noticed or followed a binding precedent of
the Supreme Court itself, as the judgment of the Constitution Bench binds smaller divisions of the court ()...both the earlier
decisions of the court, in Hariprasad and Sundaramony, were considered and it was held that there was nothing in Hariprasad
which was inconsistent with the decision in Sundaramony’s case ()...Speaking for the Court, RN Misra J, significantly said:... ‘We
are now inclined to hold that the stage has come when the view indicated in Sundaramony case (supra) has been absorbed into the
consensus and there is no scope for putting the clock back or for an anti-clockwise operation’ ()...More than a month thereafter, in
Gammon India ...,55 a three-judge Bench...said (p 235): ‘On a true construction of the notice, it would appear that the respondent
had become surplus on account of reduction in volume of work and that constitutes retrenchment, even in the traditional sense of
the term, as interpreted in Pipraich Sugar Mills Ltd v Pipraich Sugar Mills Mazdoor Union ,56 though that view does not hold the

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field in view of the recent decisions of this court in State Bank of India v N Sundaramony. ().

From the above, it is clear that it was more a contention raised by the counsel, that Sundaramony should be treated as per
incuriam, than a conclusion reached by the Bench. The decision of Raju J, in Indian Airlines was correct, both on facts and
law, but his attempt to base his reasoning and conclusion on the ratio of Punjab LDRC was undoubtedly misconceived. Far
from holding that Sundaramony was per incuriam, Saikia J affirmed the views of different judges in cases that fell for
decision in Sundaramony and thereafter, which aspect has been discussed at some length in the preceding paragraphs.

Excluded Cases

In the light of the phrase “termination ... for any reason whatsoever” appearing in the first part of the definition is
susceptible to wide and even ‘wild’ interpretation, as has been the case with a few extremist judges of the last quarter of
20th century, it is proposed to commence the discussion with a process of elimination, ie, by identifying the kinds of
termination, which are excluded from the definition before moving on to the cases which are either expressly or by
necessary implication brought within the sweep of the definition.

‘Punishment Inflicted by Way of Disciplinary Action’

The definition specifically excludes the termination of service as punishment, inflicted by way of a disciplinary action,
from the ambit of ‘retrenchment’. The question: whether a particular termination is retrenchment, or is by way of
punishment for a disciplinary action, would depend upon the facts and circumstances of each case.57 In Lachman Das,58 in
view of the allegations of the workmen, that they were victimised because of their union activities and participation in a
strike, the Delhi High Court inferred that they were really being punished by the employer by way of a disciplinary action.
Therefore, the termination of their service was held to be outside the definition of ‘retrenchment’. It was further observed
that the termination of service by way of a disciplinary action, is directly in conflict with the termination by way of
‘retrenchment’, as the former is by way of punishment, while the latter is in the interest of economy, or because the
employer did not need the services of the workmen, who had become surplus. In State Bank of India, the Supreme Court
held that the termination of a workman under paragraph 52(10)(c) of the Sastri Award, even though described as a
punishment not amounting to a ‘disciplinary action’, not being discharge simpliciter, would not amount to retrenchment
within the meaning of s 2(oo) of the Act.59 Likewise, in Anand Cinema, the Madhya Pradesh High Court held that an
innocuous order of termination of service, in fact, founded on misconduct, without the holding of any domestic inquiry,
would not amount to a retrenchment.60

Likewise, in Jagdish Chandra Vyas, the relevant Standing Order provided for a punitive action in case of absence of
workmen for 10 days or more, without the permission of the competent authority, and not for a simple discharge. The
termination of the service of a workman under such Standing Order, therefore takes such termination out of the purview of
the definition of retrenchment.61 In Indian Iron and Steel Co, the Supreme Court held that, where the workman raised a
dispute after 13 years after the employer’s intimating him about the automatic loss of lien, as a consequence of an
unauthorised overstay of leave, the denial of relief to the workman by the tribunal was justified. The termination of the
service of a workman for overstaying leave, as per the Standing Orders providing for such automatic termination, would be
bad if it did not provide an opportunity of hearing to the workman whose services are treated to have come to an end
automatically.62 The principles of natural justice have to be complied with. In the absence of an opportunity to the
workman, such termination amounts to retrenchment, without following the provisions of the law.63 The termination of a
workman, who had put in 240 days of service, for a continuous, unauthorised absence of 20 days, without holding any
inquiry and without complying with s 25F, is invalid.64

Voluntary Retirement

The termination of the service of a workman, on the ground of voluntary retirement, has specifically been excluded from
the definition of retrenchment. Just as the employer can determine the contract of employment by retrenchment, discharge
or dismissal, the employee has the right to determine the contract, by voluntary retirement. The expression ‘voluntary
retirement’ used in this clause, would mean that unless the termination of the service is the result of a voluntary move on
the part of employee or it is an act of his own independent volition, he cannot be said to have ‘voluntarily retired’. The
mere submission of the employee to the termination of his service by the employer, is not a ‘voluntary’ act of the former.
‘Voluntary retirement’ and ‘termination of service’ are two different concepts. Termination of service can be brought about
by either of the parties to the contract, by determining the contract of employment, while voluntary retirement is an act of
volition on the part of the employee alone. Neither apathy, nor a submission on the employee’s part would alter the
essential character of a termination of service of an employee by the employer and convert it into a ‘voluntary retirement’.
For instance, a concession shown by the employer to the employee, to extend his service by two months, and the

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acceptance by the employee of the same, would not amount in law, to be a case of a ‘voluntary retirement’ on the part of
the employee, on the expiry of the extended period.65

The acceptance by the employee of the benefit of the extension that the employer was willing to give, without any
condition attached to the benefit, would not make it a case of a voluntary retirement. Where the employee has no choice
between retiring or not retiring, he cannot be said to have ‘voluntarily retired’. It would, therefore, be a case of a
termination of the service of the employee by the employer. In Bengal Nagpur Cotton,66 a workman offered to retire from
service, provided he was granted certain retirement benefits, such as pension and gratuity. But the employer was not
willing to grant a pension. Consequently, the employee communicated his willingness to continue in service. But the
employer subsequently informed the workman, that in case he could cease to be in service from a particular date, gratuity
at a particular rate would be sanctioned to him. But on that particular date, the concerned workman, in spite of his protest,
was asked to hand over the charge, which he did in protest. In these circumstances, the Supreme Court held that it was not
a case of a voluntary retirement of the worker, but it was a clear case of a termination of service by the employer, against
the protest made by him. A voluntary retirement comprehends a determination of the contract of employment by the
employee, by voluntarily resigning or abandoning his job.67The expression ‘retire’ comprehends a resignation. But the
resignation must be voluntarily tendered. If it is tendered on account of duress or coercion etc, it ceases to be a voluntary
act of the employee, expressing his desire to quit service. Therefore, when an employee voluntarily tenders his resignation,
it is an act by which he voluntarily gives up his job, Hence, such a resignation is covered by the expression ‘voluntary
retirement’ used in this cause.68 Voluntary submission of resignation by the workman on his own will does not amount to
retrenchment.69 In Hindustan Lever Ltd, Savant J, affirming the finding recorded by the tribunal, observed:

There is, thus, a finding of fact that as a result of the rationalisation and reorganisation, the workers were adversely affected and
what was done by way of voluntary retirement, was nothing short of retrenchment.70

The above observation of Savant J is as specious and inartistic as that of the finding of the tribunal, and is repugnant to
litera legis as well as sententia legis in the face of sub-cl (a) of s 2(oo), which expressly excludes voluntary retirement
from the ambit of the definition of retrenchment. Retrenchment is by way of a positive act of termination, brought about by
the employer, in which the workman has no say, and it can never be said to be ‘voluntary’, whereas ‘voluntary retirement’,
as the name itself suggests, stands on a different footing in so far as the whole initiative, whether to opt for the Voluntary
Retirement Scheme (VRS) or not, rests with the workman and not with the employer. The very fact that, in the instant
case, not all the workmen had opted for VRS, despite the scheme being attractive in financial terms, goes to prove that the
discretion to opt for it or to reject it, solely rested with the workmen and, at any rate, not with the employer. That being the
position, to hold that the ‘voluntary retirement was nothing but retrenchment’, is a travesty of fact and law. Secondly,
viewed from a very fundamental perspective, why should an employer frame a voluntary retirement scheme at all, offering
a hefty amount as compensation, which is several times more than the retrenchment compensation payable under the law,
if not for reducing the surplus manpower and effecting economy of operations en route to making his product more
competitive in the market? Was it the assumption of the learned judge that industrial employers offer attractive voluntary
retirement schemes, with a huge financial outflow, merely as a matter of gratis or charity, or because there are no better
avenues for them to spend corporate funds? In striking contrast, Shah J, of the same High Court, in New Haven Steel,
categorically held that a voluntary retirement scheme offered with extra monetary benefits (which was opted for by 17
workmen) and the subsequent retrenchment of a few more workmen, were perfectly within the right of the management,
and that the tribunal had no power to question the right of the management to reorganise its business as per the market
demands.71 This decision is right and that of Savant J, in Hindustan Lever, is absolutely baseless and perverse.

In Narendra Singh Solanki, a single judge of the Rajasthan High Court held that where an employee abandoned the
employment voluntarily and did not report for duty for nearly four years, it could not be said that it amounted to a
‘termination by the employer of the services of a workman’, within the meaning of s 2(oo).72 Where the employee submits
his resignation voluntarily, the grant of compensation under s 25 does not arise, and an award of compensation by the
labour court, is liable to be quashed.73 Once it is admitted that the workmen had resigned and their accounts were settled,
and the said resignations were on the me of the labour court as exhibits, it is not open to them to turn round and say that
they had never submitted there resignations.74 In Tata Iron & Steel, the workman submitted an application on 1 April 1995
for his premature/voluntary retirement with a request to consider his case for payment of ex-gratia amount, in view of his
long association with the company. The application for voluntary retirement was accepted on the same day ie 1 April 1995
and he was relieved. Later on he approached the management with an application to rescind his voluntary retirement under
pressure from his superiors. He also made a further request to reconsider his case and revoke the voluntary retirement,
because his entire settlement was adjusted against the building loan with the result, he was not able to manage his family.
The management rejected his request vide letter dated 22 June 1995. The labour court held that the appellant is entitled to
relief of reinstatement in service with full back wages and other consequential benefits. A single judge of High Court

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upheld the order of the labour court, which was reversed by the Division Bench. Dismissing the appeal filed by the
workman, Lakshmanan J (for self and Panta J) held:

We have also perused the Memo of Appeal and other representation made by the appellant. The appellant has made a vague
allegation that he was forced to take retirement. Neither he has made it specific nor had given the name of any officer who
compelled him to write the letter dt.1st April, 1995 or exercised undue and excessive pressure to sign the letter of
premature/voluntary retirement. Though the Labour Court has come to the conclusion that the appellant was compelled to submit
the letter of resignation, the same is not supported by any acceptable evidence. It is settled law that suspicion and doubt cannot take
the place of evidence. No finding of fact can be given on mere doubt and suspicion or on the basis of baseless allegations. The
appellant having written letter of voluntary retirement and after having accepted the retiral benefits without any protest cannot now
turn round and say that he was compelled to submit his premature/voluntary retirement. The appeal has absolutely no merits and
we, therefore, have no hesitation to dismiss the same and to affirm the order passed by the learned Judges of the Division Bench of
the High Court.75

Note: For a detailed discussion of the subject, see notes and comments under s 2(k), under the topic - ‘Determination of
the Contract of Employment by the Employee’; caption - Resignation & Abandonment of job.

Superannuation

Cases of superannuation too have been excluded from the definition of retrenchment. For a case to come under this sub-
clause, two things are necessary: (1) There must be a stipulation on the point of retirement in the contract; and (2) the
stipulation must be with regard to the age of superannuation. The expression ‘contract of employment’ means a contract
under which an employee was accepted in service of the employer. In Fibre Foam, the workmen were retired on attaining
the age of 58 years. The contract of employment did not specify that the concerned workmen had to retire on attaining the
age of 58 years. But the workmen received the gratuity from the employer, under the Payment of Gratuity Act 1972, which
fixed the age of superannuation at 58 in cases where the age is not fixed under the contract of employment. In these
circumstances, it was held that though technically, the age of superannuation prescribed by the Payment of Gratuity Act
could not be applied while adjudging a question of retrenchment, since the workmen themselves had accepted the gratuity
money from the employer, based on the Payment of Gratuity Act, it was not open to them to plead that it was a case of
retrenchment.76 In Jugantar, in terms of the relevant Standing Order, the working journalist retired from service on
attaining the superannuation age of 60 years and drew his gratuity and provident fund dues in acceptance of his retirement,
with effect from December 1976. Thereafter, he was re-employed for a period of 12 months only, which expired on 1
December 1977. The Supreme Court discountenanced the contention of the journalist that his service for the further period
of 12 months, was a continuation of his previous employment and the termination of his service was retrenchment. On the
facts and circumstances of the case, the court held that the re-employment of the journalist was not in continuation of his
original service nor could the termination of his service be held to be retrenchment; and that s 25F had no application.77

Contractual Termination

Sub-clause (bb) was inserted in cl (oo) of s 2 by the Amending Act 49 of 1984.78 It purports to exclude the following from
the ambit of the definition of retrenchment: (i) the termination of the service of a workman as a result of the non-renewal
of the contract of employment between the employer and the workman concerned, on its expiry; or (ii) the termination of
the contract of employment in terms of a stipulation contained in the contract of employment, in that behalf. The first part
relates to a termination of the service of a workman as a result of a non-renewal of the contract of employment between the
employer and the workman concerned, on its expiry. The second part refers to ‘such contract’ being terminated under a
stipulation in that behalf, contained therein. The expression ‘such contract’, used in the second part, refers to the ‘contract
of employment between the employer and the workman’, mentioned in the first part. Therefore, if there is a stipulation in
the ‘contract of employment between the employer and the workman’, providing the mode, manner and date of the
termination of service, such termination of service has now specifically been excluded from the definition of
‘retrenchment’, by this sub-clause. The cases contemplated under both the parts, therefore, will not be ‘retrenchment,79
Conversely, a case not falling within either of the parts of this sub-clause, will be ‘retrenchment’, falling within the main
part of the definition. In other words, where, in fact, there is no non-renewal of the contract or there is no stipulation in the
contract in that behalf, the termination of service will constitute a ‘retrenchment’. The Constitutional validity of sub-cl (bb)
was challenged in Ram Prasad. The Rajasthan High Court held that the provisions of s 2(oo)(bb) are neither arbitrary, nor
violative of Arts. 14, 19, 21, 23 and 39(d) of the Constitution.80 A Full Bench of the Madras High Court, in Terminated
LIC EW Assn, held that the said clause neither offended Pt III of the Constitution nor did its provisions run counter to the
provisions of ss 25F, 25G and 25H of the Act.81

If the contract of employment between the employer and the employee, does not specify the period of employment for

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which the employment is made or there is no stipulation in such contract, providing the mode and manner of the
termination of the service, the provisions of this sub-clause will have no application. For instance, in Arun Kumar, it was
an essential condition for a temporary hand, to pass a written test before he could be absorbed on a permanent basis. But
the employee could not pass the test and his service was terminated. The Patna High Court held that the failure of the
workman to pass the examination did not automatically bring his services to an end. The termination of his service,
therefore, was retrenchment.82 The provision of retrenchment in the Act does not provide any security of tenure. It only
provides for certain benefits to a workman in the case of termination of his service in a manner falling with in the
definition of ‘retrenchment’. On complying with the requirement of ss 25F or 25N and 25G, it is open to the employer to
retrench a workman.83

In CM Venugopal, Regulation 14 of the Life Insurance Corporation of India (Staff) Regulations 1962, framed under s
48(2) (cc) of the Life Insurance Corporation of India (Amendment) Act 1981, empowered the corporation to terminate the
service of an employee within the period of probation. The employee was put on probation for a period of one year, which
was extended by another year. Under the terms of employment, he was required to do a certain minimum quota of business
during the period of probation. Since he failed to accomplish that, he was required to achieve the target during the
extended period of probation. As he failed to fulfil the prescribed norm to earn the confirmation, he was further advised to
improve his performance, before the expiry of the extended period of probation. His service was terminated in terms of
Regulation 14 of the corporation, as he could not meet the requirements. A three-judge Bench of the Supreme Court held
that the case was covered by the exception contained in sub-cl (bb) of s 2(oo). And as the termination of service was under
the specific stipulation provided in Regulation 14, as well as in the order of appointment of the employee, it was not
retrenchment.84 In Morinda Co-op Sugar, a sugar factory used to employ certain number of workmen during the crushing
season only and at the end of the crushing season, their employment used to cease. The Supreme Court held that despite
the fact that the workmen had worked for more than 240 days in a year, the cessation of their employment at the end of the
crushing season would not amount to retrenchment, in view of the provisions of sub-cl (bb) of s 2(oo).85 However, the
court directed the employer to maintain a register of workmen engaged during the previous season and to publicise it at the
onset of the new season and engage the same workers in accordance with their seniority and the exigencies of the work.

The termination of the service of casual workmen on daily wages, will not fall within the exception contained in sub-cl
(bb) of s 2(oo) of the Act, because the ‘contract of employment’ is referable to contracts other than the engagement of
casual workers on daily wages. A ‘non-renewal of the contract of employment’ presupposes an existing contract of
employment, which is not renewed. Even in respect of a daily-wager, a contract of employment may exist, such contract
being from day to day. The position however, would be different when such a contract is in reality, a camouflage for a
more sustaining nature of arrangement, but the mode of a daily-wager is adopted so as to avoid the rigors of the Act. This
clause does not contemplate to cover a contract such as of a daily-wager and is rather intended to cover a more general
class of contracts, where a regular contract of employment is entered into and the termination of the service is because of a
non-renewal of the contract. This interpretation of sub-cl (bb) is in consonance with the substantive provision of cl (oo) of
s 2, defining ‘retrenchment’ as the termination of service of a workman for any reason whatsoever.86 Likewise, the
termination of the service of a ‘badli’ workman, in terms of the contract of employment, will not be retrenchment in view
of this provision.87

In SGovindaraju v KSRTC , the Supreme Court did not consider it necessary to decide the point that if the termination of
service of a workman by non-renewal of the term of contract of employment or under a stipulation contained in the
contract of employment in that behalf, will not amount to ‘retrenchment’ in view of the provisions of sub-cl 2(bb), it would
enable unscrupulous employers to always provide for a fixed term or stipulation in the contract of service, for terminating
the employment of employees, to escape the rigor of s 25F or s 25N of the Act. And it would further confer arbitrary
powers on the employer, which would be destructive of the protection guaranteed by the Act, to the employees.88 This
ruling is an illustration of judicial hyper-activism on the part of a few judges of the Supreme Court. Instead of addressing
the core issue that fell for decision, ie, whether there was a violation of s 25F in the context of s 2(oo)(bb) of the Act, the
learned judge dealt with the case in a slovenly manner and infused the doctrine of ‘natural justice’ in an industrial action to
which the said doctrine has no application, whatsoever, in the light of the fact that the said sub-clause expressly excludes
termination as a result of non-renewal of the contract of employment or such employment being terminated under a
stipulation contained therein in that behalf. It is well-settled that the principles of natural justice only supplement the law
and not supplant it, and that they operate only in the unoccupied interstices of law. By the same token, they cannot be
pressed into service while dealing with a provision which declares the rights and duties of the parties in unequivocal and
crystal clear terms, as can be seen from the language of s 2(oo)(bb). Is it possible that the learned judge, with decades of
experience at the bar and the bench, was so ignorant of these fundamental canons of interpretation? As per the admitted
facts, it was not a case of dismissal for an act of misconduct, and a termination due to efflux of time, which is manifestly
excluded from the definition. In a case where a workman was not considered fit for the post, what was it that the workman
could presumably explain and against what? Was the judge contemplating an explanation about the circumstances that led
to his failure in the test conducted for the post? It does not require a vast experience at the Bar or the Bench to answer the

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elementary question as to under what rule of law, can the principles of natural justice come into play in a case like this?
Again, what is meant by his observation ‘...though no elaborate inquiry is needed’? ‘Inquiry’, in industrial relations
parlance, has a definite connotation and means a full-fledged inquiry, that has been held in full compliance with the
principles of natural justice. The law does not recognise a ‘wishy-washy’ inquiry of the kind suggested by Singh J. It is
amusing to find such platitudes in a judgment coming from the apex court! What is meant by his observation that a fixed
tenure contract would be ‘destructive of the protection guaranteed by the Act’, when the self-same Act provides for
exceptions, of which sub-cl (bb) is an integral part? Singh J had transgressed the limits of judicial review by importing
irrelevant issues into the reasoning process, which issues were not raised before the appropriate forums below. This
decision is a striking illustration of the manner in which judicial power is abused, even at the highest level, not to speak of
lower courts and tribunals. The decision of the single judge of the Karnataka High Court, in the same case, is right and that
of Singh J is patently wrong.

It can be seen that various High Courts, using interpretative techniques, have mellowed down the rigor of the bare reading
of the statute. In SN Shukla, the Allahabad High Court observed that sub-cl (bb) is in the nature of an exception to s 2(oo)
and has to be construed strictly and in favour of the workmen, as the entire object of the Act is to secure a just and fair deal
to them, while adjudicating on the termination of the service of a workman for non-renewal of the contract of employment,
on expiry of the time stipulated in it. The nature of employment must be judged by the nature of duties performed by the
workman and not on the basis of the letter issued by the employer. Section 2(oo)(bb) cannot be extended to cases where
the job continues and the employee’s work is also satisfactory, but periodical renewals are made to avoid giving a regular
status to the workmen, as it would be an ‘unfair labour practice’. If contractual employment is resorted to as a mechanism
to frustrate the claim of the employee to become regular or permanent against a job which continues, or the nature of duties
is such that the colour of a contractual agreement is given to take it out from s 2(oo), then such agreement cannot be
regarded as fair or bona fide. In this case, since the workmen had been working for nearly five years continuously and their
jobs were not seasonal, casual or of a daily worker and their duties were like that of a regular employee, the termination of
their services on the expiry of the stipulated period in the agreement or a non-renewal of their contract of employment, did
not come under sub-cl 2(oo)(bb) and amounted to retrenchment.89 A similar view has been taken by a single judge of a
Bombay High Court, in Dilip Shrike, holding that the mere fact that the contract of employment provided for termination
by efflux of time, would not by itself, be sufficient to take such terminations out of the scope of the definition of
retrenchment. The adjudicator has to address himself to the question as to whether the period of employment was
stipulated in the contract of employment as a device to escape the applicability of the definition of retrenchment.90

A single judge of the Punjab & Haryana High Court, in Balbir Singh, has pointed out that this clause, being in the nature of
an exception, cannot be given a meaning which will nullify or curtail the ambit of the principle clause, because it is not
intended to be an outlet for unscrupulous employers to shunt out workmen in the garb of non-renewal of their contracts,
even if the work subsists. The clause, therefore, has to be construed strictly in favour of the workman, as far as possible.
This provision cannot be resorted to, to frustrate the claim of the employee against an uncalled for retrenchment or for
denying other benefits. In other words, it is not to be so interpreted as to enable an employer to resort to the policy of ‘hire
and fire’ and give unguided power to him, to renew or not to renew the contract, irrespective of the circumstances in which
it was entered into or the nature and extent of the work for which he was employed. It has to be interpreted to limit it to the
case where the work itself has been accomplished and the agreement of hiring for a specific period, was genuine. If the
work continues, the non-renewal of the contract has to be dubbed asmala fide.91 The Gujarat High Court, in JJ Shrimali, in
view of the stipulation in the contract of employment, that as soon as the scarcity relief work is wound up or comes to an
end, the contract of service will also come to an end, it was held that the termination of service did not amount to
retrenchment.92 In Chakradhar Tripathy, the workman was appointed in the post of junior assistant, as a matter of urgency,
as an ad hoc employee for 89 days, which period was extended from time to time, with short breaks, at the request of the
employee, on the basis of his fresh application. Although the workman had put in more than 240 days, pending the
recruitment of a regular candidate for the post, the Orissa High Court held that in these circumstance, the non-renewal of
the contract was not mala fide or colourable. Hence, the termination of his employment will not constitute retrenchment.93
In MPBK Sangh, on a review of the law as laid down by the Supreme Court and by various High Courts, a single judge of
the Madhya Pradesh High Court has stated the following principles of interpretation and application of the provisions of
this clause—

(i) that the provisions of section 2(oo)(bb) are to be construed benevolently, in favour of the workmen;

(ii) that if the workman is allowed to continue in service by making periodic appointments, from time to time, then it can be
said that the case would not fall under section 2(oo)(bb) ;
(iii) that the provisions of section 2(oo)(bb) are not to be interpreted in a manner which may stifle the main provision;

(iv) that if the workman continues in service, the non-renewal of the contract can be deemed as mala fide and it may amount
to be a fraud on the statute;

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(v) that there would be a wrong presumption of non-applicability of section 2(oo) (bb), where the work is of a continuous
nature and there is nothing on record to show that the work for which a workman had been appointed, has come to an
end.94

It is well settled that if a provision is merely declaratory, it may be retrospective. But a remedial provision is only
prospective, unless it is expressly made retrospective by the legislature or it is held to be so by necessary implication.95For
modern purposes, a declaratory Act is one which removes existing doubts as to the common law or the meaning or effect
of any statute. But a remedial statute, on the contrary, may either be enlarging or restraining.96 By inserting cl (bb) in the
definition of ‘retrenchment’, in s 2(oo), the legislature wanted to restrict the meaning of the term ‘retrenchment’ as
interpreted by the Supreme Court. The provision, therefore, is remedial and not declaratory. Such a substantive provision,
imposing an additional restriction on the meaning of ‘retrenchment’, cannot be construed to be retrospective by necessary
intendment. It is only prospective in nature.1 Therefore, a termination effected in pursuance of a condition, that services
can be terminated by one month’s notice or salary in lien thereof, before the insertion of this clause, would not be governed
by its provisions and would, therefore, be retrenchment.2 Both the parts of sub-cl (bb) postulate a fixed tenure. The first
part refers to a non-renewal of the contract, after the expiry of that period, while the second part refers to the termination of
the contract of employment upon giving notice of a certain specified period of time. Therefore, if there is no provision for a
period of termination of a contract of service, the provisions of the clause will not be attached. Generally, the contract of
employment, or in cases of statutory corporations or government undertakings, the statutory rules or regulations governing
the service, provide that the service of an employee can be terminated by giving notice of a specified period of time by
either side or a payment in lieu thereof. In some cases, even unilateral provisions, that the service of an employee can be
terminated ‘at any time without assigning any reason’, are inserted. In West Bengal SEB, the Supreme Court struck down
Regulation 34 of the West Bengal State Electricity Board Regulations, which empowered the board to terminate the
service of an employee by giving three months’ notice or three months’ salary in lieu of the notice, being violative of Art.
14 of the Constitution. Speaking for the three-judge Bench of the court, in a voice charged with anguish and emotion,
Chinappa Reddy J said:

On the face of it, the regulation is totally arbitrary and confers on the Board, a power which is capable of vicious discrimination. It
is a naked ‘hire and fire’ rule, the time for banishing which all together, from the employer-employee relationship, is fast
approaching. Its only parallel is to be found in the entry 8 clause so familiar to administrative lawyers.3

In Central Inland Water, r 9(i) of the service discipline and appeal rules of the corporation provided that the employment
of a permanent employee shall be subject to termination on giving three months’ notice on either side, or payment of an
amount equivalent to three months’ basic pay and dearness allowance in lieu thereof. In case the employee failed to give
such notice, the corporation had the right to deduct such amount from his dues. A two-judge Bench of the Supreme Court
struck down the rule as being violative of Arts. 14 and 16 of the Constitution and also being void under s 23 of the Indian
Contract Act 1872, as opposed to public policy. In view of the grossly unequal position of the employer and the
employees, the court discountenanced the argument of the corporation, that the ‘mutuality clause’ was duly accepted by the
employees.4 Another two-judge Bench of the court, in OP Bhandari, Thakkar J said:

This rule cannot co-exist with Articles 14 and 16(1) of the Constitution of India. The said rule must therefore, die, so that the
fundamental right guaranteed by the aforesaid constitutional provisions remain alive. For, otherwise, the guarantee enshrined in
Articles 14 and 16 of the Constitution can be set at naught, simply by framing a rule authorizing the termination of service of an
employee by merely giving a notice. In order to uphold the validity of the rule in question, it will have to be held that the tenure of
service of a citizen who takes up employment with the state, will depend on the pleasure or whim of the competent authority,
unguided by any principle or policy. And that the services of an employee can be terminated, though there is no rational ground for
doing so, even arbitrarily or capriciously. To uphold this right is to accord a magna carta to the authorities invested with these,
powers, to practice uncontrolled discrimination at their pleasure and caprice, on considerations not necessarily based on the welfare
of the organization, but possibly based on personal likes and dislikes, personal preferences and prejudices.5

However, in view of the extremely wide coverage of the impugned regulation, the court indicated three categories of
employees covered by it, viz, ‘blue collar’ workmen, the ‘white collar’ or clerical staff and the ‘gold collar’ or the
managerial cadres. With respect to the ‘blue collar’ and ‘white collar’ employees, the court unreservedly applied the rule
laid down in Central Inland Water; but with respect to the ‘gold collar’ employees, the managerial cadres, the court made a
distinction between the private sector and public sector employees. It noticed that the managerial cadres of the private
sector undertakings were not governed either by the provisions of the Industrial Disputes Act or by the Constitutional or
statutory provisions. Hence, such employers are free to cut ‘the dead wood and can get rid of a managerial cadre employee
in case he is considered to be wanting in performance or in integrity’.6 But with respect to the managerial cadre employees,

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employed by the public sector undertakings, the court noticed the impediments of Arts. 14 and 16 and suggested law
reform. The law stated in the above three cases has been affirmed by a four to one majority of the court in Delhi Transport
Corpn, holding that Regulation 9(b) of the corporation, which provided for the termination of employment by giving ‘one
month’s notice or pay in lieu thereof, vested absolute, unbridled and arbitrary powers in the employer to terminate the
service and as such, was violative of the Constitutional mandate contained in Art. 14 of the Constitution. The majority held
that the corporation had no power to make a rule providing for the sacking of the permanent employees on unspecified
grounds, by merely giving a month’s notice or pay in lieu thereof.7

In the cases discussed above, the Supreme Court was dealing with the legal validity of statutory regulations framed by the
statutory corporations, providing for the termination of service of an employee by giving him notice of a specified period
of time or paying salary in lieu thereof. The court was not considering the legal validity of s 2(oo) of this Act. The effect of
these dicta is that any stipulation in a contract of employment, fixing the term of employment or providing for the
termination of service by giving a notice for certain specified period of time or payment of wages in lieu thereof, will be
void. In case of public sector undertakings, such stipulation will be void as violative of the guarantees of Arts. 14 and 16 of
the Constitution, being arbitrary and discriminatory and also being opposed to the public policy under s 23 of the Contract
Act. In case of private sector undertakings, such provisions will be void under s 23 of the Contract Act. These holdings,
therefore, castrate sub-cl (bb) of s 2(oo). Hence, the provisions made in the contract of employment, rules or Standing
Orders, for termination of employment by giving notice for a certain specified period of time or paying wages in lieu
thereof or termination of employment by non-renewal of the term of contract, will not have the protection of sub-cl (bb) of
s 2(oo) of the Act. A question of pertinent relevance arises, as to whether a statutory provision in an Act of Parliament or
of State Legislature, can be abrogated by a judicial pronouncement, without even discussing the legality or Constitutional
validity of such provision.

There has, however, been a significant departure of the judicial view, in respect of termination of the contract due to efflux
of time or due to non-renewal of the contract on its expiry. For instance, in Pushpa Srivastava, the facts were: The
employee was appointed as a Research Executive on an ad hoc basis, for a period of three years, on contractual basis.
Though the appointment came to an end on 21 March 1990, yet, she was continued beyond the prescribed period. On 13
July 1990 she tendered her resignation, which was accepted on 31 July 1990. Notwithstanding the acceptance of the
resignation, the employee made a further request that her services might be continued for some more time. On this request,
she was given an ad hoc appointment on a contractual basis, as a Training Executive, on a consolidated salary of Rs 2400/-
per month. A few days before the appointment was about to come to an end in terms of the contract, she filed a writ
petition in the High Court and obtained a direction to regularise her services within three months. Quashing the order of
the High Court, Mohan J, (for himself, Sharma and Venkatachala JJ) held:

To our mind, it is clear that where the appointment is contractual and by efflux of time, the appointment comes to an end, the
respondent could have no right to continue in the post. Once this conclusion is arrived at, what requires to be examined is, in view
of the services of the respondent being continued from time to time, on ad hoc basis, for more than a year, whether she is entitled to
regularisation. The answer should be in the negative...The appointment was purely ad hoc and on a contractual basis, for a limited
period of six months, the right to remain in the post comes to an end.8

In M Venugopal, the issue before the Supreme Court was, whether the termination of an employee at the end of a two-year
probation period, amounts to retrenchment within the meaning of s 2(oo)(bb) of the IDA. The question had to be
determined in the light of s 48(2)(cc) of the Life Insurance Corporation (Amendment) Act 1981, read with Regulation 14
of the LIC of India (Staff) Regulations 1960. Regulation 14 provided for a probationary period of one year, which could be
extended to a maximum of one more year, making it a total of 2 years for employees belonging to classes I & II. Singh J
held:

Regulation 14 aforesaid, has to be read as a statutory term of the contract of employment between the corporation and the
appellant. The order of appointment had fixed a target in respect of the performance of the appellant, which admittedly, the
appellant failed to achieve within the period of probation, which was extended up to two years. As such, the corporation was
entitled not to confirm the appellant in terms of the order of appointment and to terminate his service during the period of
probation, without any notice...Any such termination, even if the provisions of the Industrial Disputes Act were applicable in the
case of the appellant, shall not be deemed to be ‘retrenchment’ within the meaning of section 2(oo), having been covered by
exception (bb). Before the introduction of clause (bb) in section 2(oo), there were only three exceptions...(a) voluntary retirement;
(b) retirement on reaching age of superannuation; and (c) on ground of continued ill health. This court, from time to time, held that
the definition of ‘retrenchment’ being very wide and comprehensive in nature, shall cover within its ambit termination of service in
any manner and for any reason, otherwise than as a punishment inflicted by way of disciplinary action. The result was that even
discharge simpliciter, was held to fall within the purview of the definition of ‘retrenchment’...Now, with the introduction of one

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more exception to section 2(oo), under clause (bb), the legislature has excluded from the purview of ‘retrenchment’, (i) the
termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and
the workman concerned, on its expiry; (ii) such contract being terminated under a stipulation in that behalf, contained in the
contract of employment, it need not be impressed that if in the contract of employment, no such stipulation is provided or
prescribed, then such contract shall not be covered by clause (bb) of section 2(oo). In the present case, the termination of the
service of the appellant, as a result of the contract of employment having been terminated under the stipulations specifically
provided under Regulation 14 and the order of the appointment of the appellant.(sic) In this background, the non-compliance with
the requirement of section 25F shall not vitiate or nullify the order of termination of the appellant.9

In Escorts, the Supreme Court held that the termination of the service of a workman, as a result of a non-renewal of the
contract of employment on its expiry, would not constitute retrenchment, in view of sub-cl (bb) of s 2(oo). In Allahabad
Bank, the workman was employed on a day-to-day basis, by giving employment for one day at a time, with the issuing of
successive letters. The Supreme Court quashed the order of the tribunal, holding that the workman shall be deemed to have
continued in service and would also be entitled to wages and allowances, and held that the relationship between the parties
being contractual, the term of contract was that the services stood terminated at the end of the day, and the status of the
workman was, at best, that of a daily-wager, and that being so, the workman could not insist on his being continued to be
employed and the Bank was under no legal obligation to employ him.10 In Uptron India Ltd, the Supreme Court,
interpreting cl 17(g) of the Standing Orders of the company, held that the services of a permanent employee cannot be
terminated by giving him three months notice or pay in lieu thereof, or even without notice, notwithstanding any
stipulation in the certified Standing Orders and that any clause in the Standing Orders providing for an automatic
termination of service of a permanent employee, would be bad in law. The court, while interpreting the words ‘such
contract’, appearing in sub-cl (bb) of s 2(oo), observed that if the contract was for a fixed term, with a stipulation that the
services would be liable for termination on or before the expiry of the said period, in such a case, the termination of the
service either before the expiry or the period stipulated or on the expiry of the said period, would not amount to
retrenchment.11

In Birla VXL, where the services of a workman, who was appointed on a temporary basis for a period of two years, were
terminated, the Supreme Court held that, having regard to the clear terms of his appointment order, which the workman
had accepted by signing at the foot thereof, the employer was entitled to bring the employment to an end at the conclusion
of the period of temporary employment.12 In the absence of a fixed term in the order of appointment, the provisions of s
2(oo)(bb) have no application, and there can be no justification to interfere with the order of the labour court, directing the
reinstatement of the workman.13 Where the rules provided that the service of the workman should be regularised subject to
her passing the type test, and her services were terminated after she failed to pass the test, despite several attempts, without
complying with s. 25F, it was held that her employment was not contractual in view of the fact that the statutory rule did
not prescribe any time limit, and hence, it would not fall within the exception contained in sub-cl (bb) of s 2(oo), and,
accordingly, the High Court confirmed the award of the labour court, directing her reinstatement.14 In MP Electricity
Board, the Supreme Court held that, where the services of an employee were terminated on her failing to qualify in the
test, in accordance with the terms and conditions mentioned in the offer of appointment, such termination would fall within
the ambit of the exception in sub-cl (bb) of s 2(oo) of the IDA.15 In Nareshkumar Parmar, the facts disclosed that the
respondent-company advertised for a pharmacist on contractual basis in pursuance whereof the appellant workman applied,
got selected, signed the contract and joined. After completing 240 days service, he applied for regular selection when
called for, but before the selection could be completed, he filed a petition in the High Court claiming regularisation.
Rejecting the petition, the Gujarat High Court held that the appellant-workman was engaged as pharmacist on contractual
basis and, therefore, the claim advanced by him for regularization on the ground that he should be treated as temporary
workman in terms of the Certified Standing Orders was not maintainable.16

In Haryana SFCCW Store, the facts were: Certain workmen were engaged in May-June 1993 as watchmen on contract
basis, with the condition that the appointment would last till the stocks kept in the open area at the Hasanpur Mandi were
disposed of their services and were terminated in April 1994, after the stock lying in the open yard was cleared. The
management did not comply with the provisions of s 25F before terminating the workmen. Mohapatra J held that their
appointment being for a specific purpose and for a particular period, there was no retrenchment, as their termination fell
within the purview of cl (bb), and accordingly, the question of complying with the conditions precedent to retrenchment, as
stipulated in s 25F did not arise.17 In Saudi Arabian Airlines, the facts briefly were: A security guard, who was engaged for
a fixed term of two years, filed a complaint alleging unfair labour practice under provisions of MRTU & PULPA 1971,
whereupon the industrial court directed the management to make him permanent in terms of Standing Order 4(c) of the
Certified Standing Orders of the company, which mandates that ‘after continuous employment of 240 days, the incumbent
has to be treated as a permanent employee’. Refusing to interfere with the direction issued by the industrial court, Kochar
J, of Bombay High Court held:

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There was no end of the work of the security guards and, therefore, appointment letter issued by the petitioner to appoint the
respondent workman for a period of two years was a camouflage or pretext to deprive him of the benefits of permanency and
permanent employment. The conclusion is inescapable that the work continued and the post of Security Guard was of permanent
nature and therefore, there was no application of section 2(oo)(bb) of Industrial Disputes Act.18 (Italics supplied)

In Karnataka Handloom, the facts disclosed that a person was engaged on contract basis for specific period of 9 months to
train the weavers of the society, whereafter his contract was terminated. The labour court ordered reinstatement without
back wages, which was upheld by both the tiers of High Court. Quashing the orders of the courts below, Lakshmanan J
observed:

When a person enters a temporary employment or gets engagement as a contractual or casual worker and the engagement is not
based on a proper selection as recognized by the relevant rules or procedure, he is aware of the consequences of the appointment
being temporary, casual or contractual in nature. Such a person cannot invoke the theory of legitimate expectation for being
confirmed in the post when an appointment to the post could be made only by following a proper procedure for selection and in
cases concerned, in consultation with the Public Service Commission. Therefore, the theory of legitimate expectation cannot be
successfully advanced by temporary, contractual or casual employees. It cannot also be held that the State has held out any promise
while engaging these persons either to continue them where they are or to make them permanent. The State cannot constitutionally
make such a promise. It is also obvious that the theory cannot be invoked to seek a positive relief of being made permanent in the
post... the respondent was engaged only on contract basis. It is only a seasonal work and, therefore, the respondent cannot be said
to have been retrenched in view of what is stated in clause (bb) of section 2(oo) of the Act. Under these circumstances, we are of
the opinion that the view taken by the Labour Court and the High Court is not correct and is illegal.19

In Darbara Singh, the Supreme Court held that where it was found that the respondent-workman was appointed for a
specific period on daily wages and the contract contains stipulation that, on the appointment of a regular employee, his
temporary appointment would come to an end, it was wrong for the labour court and High Court to direct reinstatement. In
another case involving the same Electricity Board, the same learned judge held that persons appointed by the Board as
‘meter readers’ on contractual basis with payment being made on ‘per-meter-reading’ basis at a fixed rate coupled with the
further fact that no regular employment was ever offered to them by the Board, their termination fell within the exception
contained in sub-cl (bb) of s 2(oo).20 In another case involving the same Electricity Board, an identical issue relating to an
identical set of facts as Darbara Singh (supra) fell for the decision of Supreme Court. Setting aside the orders of labour
court and the High Court, Pasayat J (for self and Chatterjee J) held that the engagement of the workman was for specific
period and conditional; that on the appointment of regular meter readers, the engagement of the workman was dispensed
with; and that the contracts clearly governed the terms of engagement.21 A person appointed on ad hoc and temporary basis
for 29 days on 13 occasions with technical breaks had no right to be absorbed as regular employee, could the termination
of his service amount to retrenchment under s 2(oo) attracting s 25F.22 In Apparel Export Promotion, the facts were: the
service of the respondent-peon was terminated as per cl 2 of the appointment letter which gave the right to employer to
terminate by giving 24 hours notice during period of probation. The Labour Court held the termination valid. A single
Judge of the High Court remanded the matter back to the Labour Court for fresh decision. The Delhi High Court
comprising Dipak Misra CJ and Manmohan J, while allowing the appeal by the employer-Council, observed that the
termination was in accordance with the condition in the contract of employment and fell within s 2(oo)(bb).23 In a more or
less similar set of facts, the Gujarat High Court held that where the employment stood terminated on the expiry of the date
stipulated in the offer of appointment, it clearly fell within the purview of s 2(oo)(bb), and hence invoking the provisions
of s 25F would not arise.24

Continued ill-health

A termination of the service of a workman on the ground of continued ill-health, has also been excluded from the
definition of retrenchment. ‘Ill-health’ means disease, physical defect, infirmity or unsoundness. A person who is not free
from disease is certainly not possessing sound health, required for active duties and if that sort of thing continues for a long
period, he must be said to be suffering from continued ill-health. The term suggests that the condition of ill-health is
prolonged for a considerable period. ‘Ill-health’ that which is intermittent, cannot be termed as continued ill-health. It
should be of a sufficiently long duration and continuous.25

According to Webster’s New International Dictionary, ‘health’ means the ‘state of being hale, sound or whole, in body,
mind or soul’. According to the same dictionary, ‘hale’ means ‘free from defect, disease or infirmity, sound, healthy’. New
Collins Concise English Dictionary defines ‘ill-health’ as ‘not in good health; sick’. The Concise Oxford Dictionary (third
edn) defines ill-health as ‘Out of health; sick; with disease; with anxiety (of health), unsound, disordered, morally bad’.

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According to the Shorter Oxford English Dictionary, ‘ill-health’ means, ‘unsound, disordered; out of health; not well.’
Therefore, according to the dictionary meaning, ‘health’ does not necessarily mean an absence of organic disease; if a
person is infirm or not sound in body or mind, he cannot be said to possess health. ‘Ill-health’ obviously, means disease,
physical defect, infirmity or unsoundness. A person who is not free from infirmity or disease or, in other words, is not
possessing sound health for active duties, and if this state of health continues for a long period, he may be said to be
suffering from ‘continued ill-health’. A person can be said to be suffering from ‘continued ill-health’ when the disease is
spread over for some period of time.26 The use of the word ‘continued’ before the expression ‘ill-health’, suggests that it is
prolonged for a considerable period. It should be of a sufficiently long duration as well as continuous. Therefore, ill-health
which is intermittent, cannot be termed as continued ill-health. The expression ‘continued ill-health’ has to be construed to
be referable to a state of physical condition of the person concerned, incapacitating him for an indefinite period, though the
same need not necessarily be correlated to any organic disease in the system.27

The question as to whether an employer can validly retire bus drivers on the ground of their defective or sub-normal eye
sight, developed during the course of their employment, was examined by the Supreme Court in the landmark case of
Anand Bihari, in which the facts disclosed that the workers in question were employed as drivers and had put in a long
service, discharging their duties to the satisfaction of the corporation. A medical examination revealed that they had
developed a defective eye sight and did not have the required vision for driving heavy motor vehicles. Therefore, the
corporation terminated their services. This action of the corporation was challenged by the workmen by a writ petition
before the High Court of Rajasthan, on the ground that the termination of their services amounted to ‘retrenchment’, within
the meaning of s 2(oo) of the Act and since the requirements of s 25F were not complied with, the ‘retrenchment’ was
illegal. On the other hand, the corporation contended that the termination of service being on the ground of ‘ill-health’, was
not ‘retrenchment’. The High Court upheld the contention of the corporation, that the termination of the service of the
workmen in question, was not ‘retrenchment’. In appeal, the Supreme Court affirmed the decision of the High Court in
holding that the defective eye sight, disabling the workmen from discharging their normal duty of bus driving, fell within
the meaning of the expression ‘continued ill-health’. Hence, the termination of the service of the drivers was not
‘retrenchment’. Speaking for the court, Sawant J said:

Even otherwise, it can scarcely be disputed that the expression ill-health’, used in sub-clause (c), has to be construed relatively and
in its context. It must have a bearing on the normal discharge of duties. It is not any illness, but that which interferes with the usual
orderly functioning of the duties of the post, which would be attracted by the subclause. Conversely, even if the illness does not
affect the general health or general capacity and is restricted only to a particular limb or organ, but affects the efficient working of
the work entrusted, it will be covered by the phrase. For it is not the capacity in general, but that which is necessary to perform the
duty for which the workman is engaged, which is relevant and material and should be considered for the purpose...Therefore, any
disorder in health, which incapacitates an individual from discharging the duties entrusted to him or affects his work adversely or
comes in the way of his normal and effective functioning, can be covered by the said phrase. The phrase has also to be construed
from the point of view of the consumers of the concerned products and services. If, on account of a workman’s disease or
incapacity or debility in functioning, the resultant product or service is likely to be affected in any way, or to become a risk to the
health, life or property of the consumer, the disease or incapacity has to be categorised as ill-health for the purpose of the said
sub-clause. Otherwise, the purpose of production, for which the services of the workman are engaged, will be frustrated and worst
still, in cases such as the present one, they will endanger lives and property of the consumers. Hence, we have to place a realistic
and not a technical or pedantic meaning on the said phrase. We are, therefore, more than satisfied that the said phrase would
include cases of drivers, such as the present ones, who have developed a defective or subnormal vision or eyesight, which is bound
to interfere with their normal working as drivers. Such drivers, therefore, were held to be suffering from ‘continued ill-health’ and
the termination of their services for that reason, therefore, was not ‘retrenchment’.28 (Italics supplied)

However, despite holding that the termination of the service of the drivers in question, did not amount to ‘retrenchment’,
the learned judge held that the said termination was unjustified, inequitable and discriminatory.29 The learned judge
observed that the service conditions of bus drivers must provide for adequate safeguards, because they had developed
defective eyesight or sub-normal sight on account of the occupational hazards. The court, therefore, evolved and directed a
scheme to be framed, for providing alternative jobs, along with retirement benefits and for payment of an additional
compensation, proportionate to the length of the service rendered by them, in case of a non-availability of alternative jobs.
The scheme is summarised as follows:

(i) The corporation shall, in addition to giving each of the retired workmen, his retirement benefits, offer him any other
alternative job which may be available and which he is eligible to perform.
(ii) In case no such alternative job is available, each of the workmen shall be paid, along with his retirement benefits, an
additional compensatory amount as follows:

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(a) where the employee has put in more than 5 years’ or less than 5 years’ service, the amount of compensation shall be
equivalent to 7 days’ salary per year of the balance of his service;
(b) where the employee has put in more than 5 years’ but less than 10 years’ service, the amount of compensation shall
be equivalent to 15 days’ salary per year of the balance of his service;
(c) where the employee has put in more than 10 years’ but less than 15 years’ service, the amount of compensation
shall be equivalent to 21 days’ salary per year of the balance of his service;
(d) where the employee has put in more than 15 years’ service but less than 20 years’ service, the amount of
compensation shall be equivalent to one month’s salary per year of the balance of his service;
(e) where the employee has put in more than 20 years’ service, the amount of compensation shall be equivalent to two
months’ salary per year of the balance of his service. The salary will mean the total monthly emoluments that the
workman was drawing on the date of his retirement.
(iii) If the alternative job is not available immediately, but becomes available at a later date, the corporation may offer it to the
workman, provided he refunds the proportionate compensatory amount.
(iv) The option to accept either of the two reliefs, if an alternative job is offered by the corporation, shall be that of the
workman.

While evolving the scheme, the court was influenced by three factors; namely (i) the workmen concerned were
incapacitated to work only as drivers and were not rendered incapable to taking any other job, either in the corporation or
outside; (ii) the workmen were at an advanced stage of their life and it would be difficult for them to get a suitable
alternative employment outside; and (iii) the relief available under the scheme should not be such as would induce the
workmen to feign disablement, which, in the case of a disability such as the development of a defective eye sight, may be
easy to do. In Rameshwar Dass, a three-judge Bench of the court observed:

If the judgment of this court in Anand Bihari ... (supra), is read in its proper context and spirit, then it has to be held that this court
impressed on the State Road Transport Corporation, to first provide for alternative jobs to such drivers, who have become
medically unfit for heavy vehicles. A direction for the payment of an additional compensation was given only when it is not
possible at all, in the existing circumstances, to provide alternative jobs to such drivers. It need not be pointed out that the
authorities of the corporation should not take recourse only to the payment of the additional compensation, without first examining
whether such drivers could be put on alternative jobs.30

In this case, the Haryana State Road Transport Corporation gave alternative employment to the drivers who had developed
defective or sub-normal eye sight due to occupational hazards and had became unfit to drive heavy vehicles. But
subsequently, the corporation retired such drivers on the ground of medical unfitness and paid them an additional
compensation. In view of the ratio of the Anand Bihari case, taking all the facts and circumstances into consideration, the
court directed the corporation to apply its mind properly, to the question of whether the employees who had suffered
injuries and had become medically unfit could be given some job by way of rehabilitation and the question of payment of
additional compensation arose only if it was not possible to provide alternative jobs to them or to some of them. The court
further directed that the question of providing alternative jobs to the employees should be examined within four months
from the date of the production of the order of the court. The court also made it clear that the tenure of the alternative job
only, will be till the date of superannuation of the employees. The employees to whom alternative jobs are provided, as
directed by the court, will reimburse the corporation for the additional compensation received by them.

The contract of employment postulates a certain state of physical fitness in the workman. If he is discharged on the ground
of ill-health, it is because he was unfit to discharge the service which he had undertaken under the contract, to render.31
‘Continued ill-health’ includes any physical detect or infirmity, incapacitating a workman for future work, for an indefinite
period.32 Occasionally, the health of an individual may break down and the doctor may fail to diagnose the cause of the
physical debilitation. But while continued ill-health is only a state of the physical condition of a person, which need not
necessarily be correlated to any organic disease in the system, a mere physical weakness at a particular moment of time
would not constitute ‘continued ill-health’. If that were to be the law, any passing ailment, which may temporarily render
any employee unable to do work, would result in the far-reaching consequence of his discharge from service.33

Before discharging a workman from service, the employer, therefore, has to be satisfied that because of ‘continued ill-
health’, the workman is unfit to perform his duties. In other words, the employer should be satisfied that the employee has
remained in continued ill-health and because of that continued ill-health, he has become unfit to perform the duties for

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which he was employed. The unfitness to perform the duties is, thus, related to continued ill-health. If a person has
maintained ill-health and because of that, he has become unfit to perform his duties, he can be asked to leave the job. The
ill-health must be of such a nature, that the person is not in a position to do the job for which he was employed.34 But the
service of an employee cannot be terminated on the basis of a presumption of continued ill-health. In Lalit Mohan Puri, the
employer asked the driver of a heavy vehicle, to appear before an ESI doctor, to prove his ill-health, which the employee
refused and the employer terminated his services on the ground of ill-health. The labour court upheld the termination of the
service, on the basis of the presumption of ill-health, from the refusal of the employee to appear before the ESI doctor. The
Delhi High Court set aside the award of the labour court, on the ground that the service of an employee could not be
terminated on the basis of a mere presumption. Speaking for the court, Wadhwa J, observed that the long service of the
employee would not be wiped out:

... merely on the basis of a presumption raised under section 114 of the Evidence Act 1872. In our view, the respondent should
have some direct evidence with it, to show firstly, that the petitioner was suffering from ill-health and secondly, that he continued
to be in ill-health till the time of the termination of his service.35

The court, therefore, held that an inquiry should have been held to prove that the employee had continued to be of ill-
health and the matter should not have been left merely to presumption. Where, therefore, a workman is discharged on the
ground of ill-health, it is because he was unfit to discharge the service which he had undertaken to render and therefore, it
had really come to an end itself.36 The reason for the discharge of a workman in such a case is, that he cannot render the
services required of him and which, under the contract of service, he is bound to render. Hence, he would not fall in the
category of surplusage, ie, one who is ‘no longer required’. The industrial adjudicator, therefore, has to see whether the
continued ill-health of the workman had made him unfit to perform his duties. However, it is one thing to say that a person
is ‘unfit’ to perform his duties and it is quite a different thing to say that he is unable to perform his duties because of his
ill-health. For instance, when an employee falls ill and because of ill-health, he is ‘unable’ to perform his duties during the
period of illness, would not mean that because of the illness, he has also become ‘unfit’ to perform his duties. Continued
ill-health mayor may not render him, in the course of time, unfit to perform the duties. It is quite possible that on his
recovery from the illness, the workman may resume his job and may perform his duties as efficiently as he did prior to his
illness. It is also possible in a particular case, that the nature of the prolonged illness was such as ultimately would render
the workman unfit to perform his duties. So, in each case, where a workman is discharged from service on the ground of
his having become unfit to perform his duties, because of his ‘continued ill-health’, the adjudicator has to record a finding
as to whether the ‘continued ill-health’ had rendered him unfit to perform his duties.37

But the question, whether a workman suffered from ‘continued ill-health’ or not, is a pure question of fact. It may be open
to the workman to demolish the truth of the contention that he was suffering from ‘continued ill-health’. For instance, a
termination of the service of a workman on account of incapacity to work, due to old age, was held not be
‘retrenchment’.38 Likewise, a termination of the service on account of the anaemic condition of the employee, was held not
to be a case of ‘continued ill-health’.39 Similarly, cardiac trouble was held not to be a case of ‘continued ill-health’ and the
termination of the service for such reason, was held to be ‘retrenchment’.40 A termination of service with the bald
statement that the termination was on account of medical unfitness, without spelling out any particular ailment or the
period for which the workman had been suffering from the same, would not be a termination on account of continued ill-
health.41 On the other hand, a person suffering from mental derangement was held to have been suffering from continued
ill-health.42 A person who lost three fingers of his left hand and as a result, lost 30 per cent of his earning capacity, was
held to be suffering from continued ill-health.43

The order of the labour court, directing the reinstatement of a workman who was discharged on medical grounds, treating
the said termination as retrenchment, was not sustainable, as such termination for reasons of continued ill-health is
excluded from the definition of retrenchment in s 2(oo).44 The labour court, having found that the termination of the
service of a workman, for continued ill-health, was justified, cannot delve into the adequacy of such action or to award an
ex gratia payment.45 In Barsi Light Rly (supra), the Supreme Court held that sub-cll (a), (b) and (c) of cl 2(oo), defining
retrenchment, whether inserted by way of abundant caution or on account of an excessive anxiety for clarity, merely
exclude certain categories of termination of service, from the ambit of the definition. They do not necessarily show what is
to be included within the definition. In Sohan Lal, the brief facts were: the workman met with a road accident while
working as a driver in Haryana Roadways. In the course of the medical examination conducted by a civil surgeon, it was
found that he was unfit to discharge the duties as a driver. Thereafter, a notice was issued to him in March 1997 proposing
to retire him from service. The workman submitted his explanation on the consideration of which, the management retired
him from service with effect from 27 March 1997. The management submitted to the labour court that it made every
attempt to find an alternative job with a view to accommodate him, which, however, did not yield any positive result. It
was also submitted that the workman was paid all the retiral benefits, in addition to compensation calculated at the rate of
21 days wages for every years of the residual service. The labour court took note of all the facts and declined to grant the

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relief sought for by the workman, which was upheld by the High Court, with the result the workman approached the
Supreme Court. While dismissing the petition, Ranjan Gogoi J (for self and Sathasivam J) took note of the formula
evolved by the Court in Anand Bihari (supra), and held:

Following the judgment of this Court in Anand Bihari ... as already noticed, a ‘scheme’ engrafting the essential parameters
prescribed by this Court had been brought into force in the State of Haryana by Memorandum dated 20.08.1992. The said scheme,
as applicable to the State of Haryana, creates an obligation on the employer (Haryana Roadways) to find suitable alternative
employment for an employee proposed to be discharged on the ground of medical disability if such disability is attributable to the
service rendered. ... The facts of the present case clearly go to show that the appellant was found to be medically unfit to continue
to work as a driver. His case for alternative employment in terms of the Memorandum dated 20.08.1992 was duly considered. No
such alternative employment was available. Consequently, additional compensation payable to the appellant in terms of the
Memorandum dated 20.08.1992 was calculated and paid. The materials on record would also go to show that the superannuation of
the appellant, if he had continued in service, was due on 30.09.2004.Taking into account the totality of the facts of the present case,
we are of the view that the award of the learned Labour Court dated 27.02.2004 affirmed by the High Court by its order dated
22.08.2005 will not require any interference by us.46 (Paras 10 & 12).

Tenures of Service v Retrenchment

Contract Labour

Contract labour, engaged by a contractor for a particular period and for a particular job, are not ‘workmen’ under the IDA.
Such employment comes to an end automatically, as soon as the time is over and the job is over. The disengagement of
contract labour does not amount to retrenchment and does not attract s 25F. Such contract workers are not entitled to
absorption in the service of the company, in respect of whose work, they were engaged by the contractor.47

Casual Workers

The Calcutta High Court held that the termination of the service of a casual workman, will fall within the meaning of the
definition of ‘retrenchment’.48 However, in DR Aher, where a daily-rated workman, employed on a purely temporary basis
in an irrigation project, having been so engaged for a period of six years, did not report for duty on his own, but five years
later, raised an industrial dispute alleging an illegal termination, the Bombay High Court quashed the award of
reinstatement with full back wages, passed by the labour court, and held that there was no termination of service, that the
award passed by the labour court was not only illegal, but had also resulted in the miscarriage of justice.49 Muster-roll
workers, engaged by the forest department, who had worked for more than 240 days in a calendar year and who had not
been retrenched as contemplated under s 25F and who had been working continuously for a period ranging from 3 to 10
years, were held entitled to continue in service.50 Where services were not terminated or retrenched by the management,
but the workers remained absent after a particular date, the provisions of s 25F were not held applicable. Once a situation
is held to be not a case of termination of service by the management, whether the workmen had worked for 240 days or
more, becomes immaterial. In the case of certain daily-rated workers, who had worked on the muster roll for a very short
period, the relief of reinstatement with back wages was refused.51 Where the workmen employed as casual labourers in a
cable-laying project of the telecom department were terminated, such termination did not come within the purview of the
definition of retrenchment in s 2(oo) and there was no need to comply with s 25F.52

Where the casual workers, who had put in 240 of days of service and whose services were terminated, challenged the order
of the labour court, directing payment of compensation in lieu of reinstatement, the High Court held that a reinstatement
would merely put the workers in the same position as they were earlier, namely, as casual workers, and hence, the relief of
compensation granted by the labour court was appropriate.53 In a case where a daily-wager, who had put in more than 240
days of service, was terminated without complying with s. 25F, on the ground that his original appointment was not made
against a sanctioned post and hence, he was not a workman within the meaning of the IDA, a single judge of the Karnataka
High Court observed that the distinction between seeking regularisation and insisting on the procedure under s. 25F to be
followed, was significant and the two should not be confused, and held that a retrenchment, without following the
prescribed procedure under s 25F, was void ab initio.54 Coolies employed by a municipality, to remove garbage, are daily-
rated workers and are neither regular, nor permanent employees, and have no right to claim a regular employment, and
hence, the order of the labour court, directing their reinstatement, is bad.55 The termination of the service of a person, who
was employed intermittently on a casual basis and on daily wages on work relating to audit and accounts, does not amount
to retrenchment.56 In SM Nilajkar, Lahoti J (for self and Brijesh Kumar J), had outlined the scheme and purpose of sub-cl
(bb) of s 2(oo) in the following words:

It is common knowledge that the Government as a welfare State floats several schemes and projects generating employment

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opportunities, though they are short lived. The objective is to meet the need of the moment. The benefit of such schemes and
projects is that for the duration they exist, they provide employment and livelihood to such persons as would not have been able to
secure the same but for such schemes or projects. If the workmen employed for fulfilling the need of such passing-phase-projects
or schemes were to become a liability on the employer State by too liberally interpreting the labour laws in favour of the workmen,
then the same may well act as a disincentive to the State for floating such schemes and the State may opt to keep away from
initiating such schemes and projects even in times of dire need, because it may feel that by opening the gates of welfare it would be
letting in onerous obligations entailed upon it by extended application of the labour laws. Sub-clause (bb) in the definition of
retrenchment was introduced to take care of such like situations by Industrial Disputes (Amendment) Act, 1984 with effect from
18-8-1984.57 ().

The above observation of Lahoti J is right. The said sub-clause was intended to serve the twin objects of: (i) providing the
much needed exit route to the industry to plan and adjust its manpower according to the fluctuating requirements as
dictated by the market forces; and (ii) tiding over the problem of unemployment, at least partially, by engaging workers in
different peripheral/non-perennial/marginal activities for short spells in different sectors of economy. This view is in
striking contrast to the judicial perversions of alarming magnitude that surfaced in S Govindaraju v KSRTC (supra). In
Haryana Roadways, the facts briefly were: the workman was appointed in various capacities as a class IV employee
between March 1988 and February 1989 with intermittent breaks, whereafter he was not given appointment, which gave
rise to the dispute. The tribunal held that the workman worked for about 264 days during the said period and on this view
of the matter ordered reinstatement with continuity of service and 50% back wages. Mathur J (for self, Lahoti CJI and
Balasubramanian J), took the view that the respondent-workman was not doing any technical job, but was only employed
as a class IV worker and that where the length of service was short the award of back wages was wholly inappropriate. On
this view of the matter, the learned judge, while upholding the reinstatement part of the award, set aside that part which
directed the employer to pay back wages.58

In Haryana State EDC, the facts briefly were: the respondent workman was appointed for a period of 89 days as Junior
Technician (Electronics) on an ad hoc basis in 1990. In terms of an offer of appointment made to her, the post was purely
temporary and her services were liable to be terminated without assigning any reason or notice. It was categorically stated
that she would have no claim for regular appointment having worked with the corporation on ad hoc basis. Her services
were extended from time to time. In each of the offer of appointment, similar terms and conditions were laid down, and in
this manner she was appointed, terminated and reappointed for a period of 89 days, each time, with an intermittent break of
2-3 days between October 1990 and February 1992. Her service was finally terminated in February 1992. The labour court
directed reinstatement of the workman with full back wages on the premise that she had completed 240 days service. The
writ petition filed by the corporation was dismissed by the High Court. Sinha J (for self and Balasubramanian J), held:

In this case the services of the respondent had been terminated on a regular basis and she had been re-appointed after a gap of one
or two days. Such a course of action was adopted by the Appellant with a view to defeat the object of the Act. Section 2(oo)(bb) of
the Industrial Disputes Act, 1947, therefore, is not attracted in the instant case. ... However, indisputably, the respondent was
appointed on an ad hoc basis. She, although qualified to hold the post of Junior Technician, when the advertisement had been
issued for filling up the said post, did not apply therefor. The services of the respondent was terminated as far back as in the year
1992. ... in the peculiar facts and circumstances of this case, interests of justice would be subserved if in the place of reinstatement
with back wages, a lump sum amount is directed to be paid by way of compensation. This order is being passed keeping in view
the fact that. ... the respondent has not worked since 1992. The post on which she may have been working must have also been
filled up. ... It is wholly unlikely that respondent in the meantime had not been working anywhere else, since the respondent had
not placed any material on record to show that she had not been working. ... we modify the impugned order by directing that the
respondent shall be compensated by payment of a sum of Rs. 25,000/- instead of the order for reinstatement with back wages.59
(Paras 11-14 & 20)

In Haryana Tourism, the facts disclosed that the corporation, which was running fast-food centres, had decided to
discontinue the activity of running these outlets and to handover them to the transport department, which necessitated
retrenchment of daily wagers engaged in the centres in 1991. The labour court directed reinstatement of the workers, but
with 25 per cent back wages, which was confirmed by the High Court. Allowing the appeal in part, the Supreme Court
held that payment of a compensation of Rs. 60000/- per workman in lieu of reinstatement having regard to the lapse of
time.60 In Municipal Council, Samrala, where it was found that the workman was employed and disengaged thrice in a
span of 18 months, and the workman was aware that her service was liable to be terminated at the end of the period(s), the
case fell within the purview of s 2(oo)(bb). Termination of her service cannot be challenged on the ground of violation of s
25F.61Where the service of a person, who was appointed on contractual basis for different periods, has been terminated,
such termination falls within the exception stipulated under sub-cl (bb) of s 2(oo) and it ceases to be ‘retrenchment’. Once

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it is covered by sub-cl (bb), Ch V-A cannot have any application and by the same token, s 25G cannot have any
application. No legal right is derived to continue in service in terms of provisions of Act under which he was governed.
Thus, the question of depriving him of any status or privilege as stipulated in Item 10 of Sch 5 of the Act, which provide
for acts amounting to unfair labour practice, would not arise.62 Where a person was engaged again and again as a Junior
Typist for fixed periods on daily wages, his disengagement after the lapse of the last order is covered by the exception
contained in sub-cl (bb) of s 2(oo), and hence it does not amount to retrenchment.63 A daily wager engaged, not in
accordance with the statutory rules, cannot claim reinstatement, much less regularization.64

In District Programme Coordinator, the facts were: the Mahila Samakhya was a registered society and was engaged in
women empowerment activities in certain areas of Karnataka and funded by the Government of Netherlands. The
respondent-driver were engaged on fixed tenure basis in two spells, the second spell being from 1 November 1997 to 31
October 1998. The contract of employment further stipulated that the services were liable to be terminated at any time
before the expiry of the tenure by giving one month notice or wages in lieu thereof. During the second spell of his tenure,
some omissions and commissions on his part came to the notice of the Samakhya and some oral enquiry was conducted in
the said omissions commissions. His service was terminated on 3 July 1998 by invoking the termination clause mentioned
above. The labour court held that the termination simpliciter was illegal and ordered reinstatement with full back wages, as
no disciplinary enquiry was held by the management. The High Court, while upholding the order, reduced the back wages
to 30 per cent. A Bench of Supreme Court comprising Sinha and Chatterjee JJ, held that it was not a fit case for ordering
reinstatement and ordered payment of a compensation of Rs. 56,000/- in lieu of reinstatement.65 In Ghaziabad
Development Authority, a fundamental issue that fell for the decision of Supreme Court was “whether the Proviso to s 6N
of the Uttar Pradesh Industrial Disputes Act 1947 is in pari materia with sub-cl (bb) of s 2(oo) of the Central Act, in order
to bring fixed tenure contracts within the pale of the said exception in the latter Act.” Section 6N of UPIDA runs thus:

S. 6N. Conditions precedent to retrenchment of workmen.—No workman employed in any industry who has been in
continuous service for not less than one year under an employer shall be retrenched by that employer until-
(a) the workman has been given one month’s notice in writing indicating the reasons for retrenchment and the period of
notice has expired or the workman has been paid in lieu of such notice wages for the period of the notice:

Provided that no such notice shall be necessary if the retrenchment is under an agreement which specifies a date for
the termination of service;

(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days’ average
pay for every completed year of service or any part thereof in excess of six months; and,
(c) notice in the prescribed manner is served on the State Government.” (emphasis added).

Highlighting the distinction between the two provisions, Sinha J (for self and Bedi J), observed:

Section 6N of the Act unlike section 25B of the Industrial Disputes Act, 1947 does not provide that working for a period of 240
days in the preceding year would subserve the purpose. What is necessary under the said provision is working for a period of 240
days in one year. Once, a workman, has been in continuous service for not less than one year before his retrenchment, one month’s
notice in writing. indicating the reason thereof or wages in lieu thereof, as also compensation equivalent to fifteen days’ average
pay for every completed year of service or in part thereof in excess of six months is imperative. Proviso appended to clause (a) of
section 6N of the Act provides that no notice would be necessary to be served, if the retrenchment has been in terms of an
agreement which specified a date for the termination of service. The said proviso is not in pari materia with section 2(oo)(bb) of
the Industrial Disputes Act, 1947.66 ().

In the light of the facts of the case, which disclosed that: (i) there was no agreement between the employer and the
workman as contemplated in the Proviso to s 6N(a) ; (ii) the workman was engaged on daily wages; (iii) sanction of the
State Government was necessary for the creation of posts; (iv) no post was sanctioned by the Government after 31 March
1990, which fact was neither denied nor disputed; and (v) any appointment in violation of the Constitutional provisions
and statutory rules would be void. Sinha J held that the labour court should not have directed the reinstatement of the
workman in service. On this view of the matter, Sinha J ordered payment of Rs. 50,000/- as compensation to the workman
in lieu of reinstatement. InUP Brassware Corporation, which too came within the pale of s 6N of UPIDA, Sinha J (for self
and Balasubramanian J), held that although in the normal course a direction to pay full back wages in the event of an
invalid termination was being usually given, with the passage of time, a pragmatic view of the matter was being taken by

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the court realizing that the industry was not compelled to pay to the workman for the period during which he apparently
contributed little or nothing at all to it and/or for a period that was spent unproductively as a result whereof the employer
would be compelled to go back to a situation which prevailed many years ago, namely, when the workman was retrenched.
The learned judge further held that payment of full back wages was not automatic, and that no precise formula could be
laid down as to the circumstances under which the payment of entire back wages should be allowed.67

In a case where the services of casual workers, who were engaged continuously for several years, were terminated, it was
held that the award of the labour court directing their reinstatement with half back wages would not call for interference,
more so, when the facts disclosed that there was no evidence to the effect that they were engaged on contractual basis in
order to bring it within the exception under sub-cl (bb) of s 2(oo).68 However, in MP Police Housing Corpn, the MP High
Court comprising (Menon and Kaushal JJ), upheld the award of the labour court directing reinstatement of a casual
workman who completed 240 days service and whose service was terminated without complying with s 25F. The Bench
held that the denial of back wages was justified in view of the fact that he was only a daily wager.69 A person who was
engaged as water boy on a casual basis but for an unbroken period of 11 years from 1983 to 1994 is a workman and his
termination without complying with s 25F was illegal, and directed reinstatement, but without back wages.70 In Bhavnagar
Municipal Corporation, the facts disclosed that the service of a workman, who was engaged for fixed periods on a casual
basis and on daily wages, was terminated. It was further established that he had worked only for 54 days. The labour court
ordered reinstatement which was confirmed by the High Court. Quashing both the orders, Radhakrishnan J (for self and
Ghose J), held that the contract of appointment consciously entered into by the employer and the employee would, over
and above the specific terms of the written agreement, indicates that the employment was short-lived and the same was
liable to termination, on the fixed period mentioned in the contract of appointment, and that in view of the fact that there
was no retrenchment under s 2(oo) read with s 2(bb). It was therefore, held that ss 25G & 25H would not apply to the facts
of the case.71

In Dilip Kumar Mandal, the facts briefly were: the workman worked as a peon but his service was orally terminated
without paying retrenchment compensation. The tribunal refused to pass the award of reinstatement on ground of no
employer-employee relationship and that the petitioner failed to establish to have worked as daily wager for 240 days or
more. Hearing the writ petition, Srivastava J, of Patna High Court held that the petitioner could not succeed in proving his
appointment to post of peon but proved to be working as daily wager. There was nothing to show that petitioner was
appointed as daily worker for fixed period, and no document was brought by the Respondent/bank to show that petitioner
was appointed on basis of contract for certain period and that, after its expiry, the contract was not renewed and hence the
said termination did not come under s 2 (oo)(bb). The learned judge held that, in these circumstances, the tribunal ought to
have drawn adverse inference against Respondent/bank and given a finding to the effect that the petitioner worked for
more than 240 days, and that nearly 19 years rolled by since his termination. On this view of the matter, the learned judge
ordered payment of Rs. 2,00,000/- as compensation payable by the Respondent/bank in lieu of compensation for back
wages as well as reinstatement.72 In Microwave Project, the issue related to the termination of service of a ‘casual’ worker
engaged on a specific project. Quashing the orders of the lower courts and remanding the matter to the tribunal, Pasayat J
(for self and Kapadia J) observed that the tribunal failed to consider the issues in proper perspective; that the effect of s
2(oo)(bb) was completely lost sight of; that the facts disclosed that there was no dispute that the employment was for a
specific project; that there was no discussion of the various materials produced before the tribunal; that the orders of the
High Court proceeded on the basis that because there was non-compliance with the requirements of s 25F, the Award was
justified; and that the question of applicability of s 25F would be dependent upon the basic question relating to
applicability of s 2(oo)(bb) of the Act, which aspect was lost sight of.73

Trainees

A termination of the service of a trainee, initially appointed for one year and continued in service for more than two years,
amounts to retrenchment and such appointment is not saved by cl (bb) of s 2(oo). The employer has to comply with the
provisions of s 25F.74 In Kalyani Sharp, the labour court and the High Court held that a trainee technician, who was
appointed to undergo training for a period of one year, with the stipulation that the facility of training might be withdrawn
at any time before completion, without assigning any reason, was entitled to the protection of s 25F in view of the fact that
he had completed 240 days. Quashing the orders of the labour court and the High Court, the Supreme Court held that from
the order of employment, it was evident that the workman was on probation and his service was terminated during
probation and as such, there was no question of issuing a notice to the respondent, before terminating his service.75 In Surat
MNSB, it was found that the management appointed a person as a trainee, for a period of two months and extended the
training period up to one year by issuing five separate orders, each for a duration of two months, followed by her
appointment as a temporary junior clerk-cum-cashier, for a period of one month. Her services were extended by issuing
fresh appointment orders, each for one month, so much so that she was continued as a temporary clerk-cum-cashier for 10
months, making it a grand total of 1 year 10 months from the date of the initial appointment as a trainee, till the date on
which she was terminated. The labour court directed reinstatement with full back wages, which was upheld by a single

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judge of the Gujarat High Court. The learned single judge held that the said termination would not fall within the exception
in sub-cl (bb) of s 2(oo). The facts of this case disclose mala fides on the part of the employer. The staggering number of
16 appointment orders (6 as a trainee and 10 as a temporary clerk-cum-typist) establish that it was not a case of a mere
fixed-tenure appointment as contemplated by s 2(oo)(bb), and that the employer acted in a questionable manner. In a letters
patent appeal, the Division Bench of the Gujarat High Court partially allowed the appeal by reducing the back wages to 50
per cent, without, however, disturbing the order directing the reinstatement, and observed that the exception in sub-cl (bb)
to s 2(oo), had no application to cases, where, based on evidence, it was found that the action of the employer was by way
of victimisation or, in any case, not bona fide.76 Where the employee was appointed as a trainee for six months, on the
condition that on a satisfactory completion of the training and on passing the test, he would be eligible for appointment as
an officer, and his service was terminated as he did not clear the written test, the Supreme Court held that the case fell
within the exception in s 2(oo)(bb).77 A single judge of Madras High Court held that the termination of service of a trainee
on ground of unsatisfactory performance does not amount to retrenchment nor does it amount to punishment, and the
award of the labour court directing reinstatement with back wages was not sustainable.78

Temporary Workmen

In Tata Consulting Engineeers, the facts disclosed that a workman was engaged on a temporary basis, for a period of three
months, which was extended by subsequent orders, so much so that she continued in employment for more than one year.
A single judge of the Bombay High Court held that her termination would amount to retrenchment, and it would not be
covered under sub-cl (bb) of s 2(oo).79 An employee engaged for meeting the rush or overload of work or a contingency, is
an employee to whom the provisions of s 25F of the Act would be attracted and the termination of his service without
payment of retrenchment compensation, would be void ab initio.80 An employee covered by the Kalelkar Award, under
which he is entitled to be brought into the ‘converted temporary establishment’, by virtue of putting in five years of
continuous service, if terminated in violation of s 25F, he is entitled to reinstatement with full back-wages.81 The
termination of the service of a ‘tracer’, appointed on a purely temporary basis, as a consequence of the closure of one
division and three sub-divisions, does not attract the provisions of s 25F, unless it is shown that the power was misused or
vitiated by its mala fide exercise.82 In Air India, the Supreme Court, while setting aside the order of the High Court,
directing the management to absorb a temporary employee who had worked in the organisation for 53 days only, observed:

We fail to understand as to how the High Court could have passed an interim order, much less a final order, in matters of service
which ultimately would upset the scheme of recruitment itself, restraining the appellant from the termination of the services when
the term of employment comes to an end. 83

In a case, where an employee appointed on a temporary basis, for a period of 89 days, against a permanent post of a lower
division clerk, was reappointed for another period of 89 days, after the expiry of the initial appointment, and further re-
appointed for another 89 days, before being terminated, it was held that her appointment was for a fixed period,
notwithstanding the fact that she had worked for more than 240 days, and hence, the termination of her service did not
amount to retrenchment.84 The termination of work-charged employees, appointed for fixed periods and posted at various
locations, does not amount to retrenchment, as such a termination is attracted by s 2(oo)(bb), irrespective of the length of
the period that may have been stipulated in the contract.85 In Estate Officer, the facts were: a workman was employed on a
temporary basis, for a period of 89 days. After the expiry of the initial period, he was again appointed for another period of
89 days, after giving a break. Finally, his service was terminated as provided in the contract. The labour court recorded a
finding that the action of the employer was mala fide and was aimed at depriving the workman of the benefit of s 25F, and
ordered a reinstatement, even though the workman had not worked for 240 days. Sudhalkar J (for himself and Gill J),
upheld the order of the labour court and that the termination was illegal. To say the least, the decision of both the labour
court and the Division Bench is not in consonance with the plain provisions of law.86 It is conceded that the court can
interfere in a case where the employer terminates the services of a workman, who has completed one year of continuous
service as defined in s 25B, without complying with the provisions of s 25F. Even here, if the appointment is found to be
contractual, for a fixed term, there is no need to comply with s 25F, as it would be squarely covered by s 2(oo)(bb), as laid
down by the Supreme Court in Escorts Ltd,87 and Birla VXL.88 Besides, no court can deny the employer, the right to
engage employees on a temporary basis, for a fixed term. In this case, the facts disclosed that the workman had put in 232
days of temporary service. The employer had every right to terminate a temporary workman engaged for a fixed term,
before he completes 240 days, and on that sole ground, no inference could be drawn that the employer had acted mala fide.
It is not as if all the jobs in an organisation are of a permanent nature or of a perennial character, and the right of an
employer to engage temporary and casual workmen, to take care of certain exigencies, as long as he is within the four
corners of law, cannot be questioned. This decision reflects, not the proper and judicious exercise of judicial power, but its
misinterpretation of statutes. The learned judge imagined and imported too many things into the case facts, which is clearly
unwarranted. That apart, this decision runs counter to the ratio of Escorts Ltd, Birla VXL, Allahabad Bank,89 and other
decisions which touch upon the termination of the service of temporary workmen, employed for a fixed period.

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Another decision which proceeds on the same lines is that of Mukesh Kumar, rendered by the same Bench that handed
down the decision in Haryana Urban Development. In this case, despite the fact that the labour court had rejected the
claim of the workman on the ground that he had not worked for 240 days, Sudhalkar J brought into the case, the doctrine
of ‘unfair labour practice’, which, in the understanding of the learned judge, meant a ‘termination of the services of a
workman, before his completing 240 days of service’. He further held that what was in issue before the labour court, was
not the mere completion of 240 days of service, but an unfair labour practice. 90 It is shocking that a High Court judge
could deal with cases so recklessly and contrary to the plain provisions of law. It would be a real miracle, if the learned
judge could cite the appropriate reference from Sch V to the IDA, where it is stipulated that a ‘termination of the services
of a workman, before his completing 240 days of services, amounted to an unfair labour practice’, and, conversely, at least
one provision in any labour statute of his choice, which compels the employer to engage workmen for not less than 240
days. To say the least, the manner in which Sudhalkar J proceeded to decide the above cases discloses the grave
misconceptions of a fatal nature, entertained by him. Both the above decisions deserve to be rejected without a second
look, as being repugnant to all notions of sound reasoning and common sense. In striking contrast, the Orissa High Court
held that, in a case where the workman had not put in one year of continuous service, within the meaning of s 25(B), ie, he
had not worked for 240 days in a year, he was not entitled to compensation under s 25F.91 A single judge of the Rajasthan
High Court, in Giridhar Gopal,92 expressed a similar view. In Rattan Singh, where the services of an employee, who had
served continuously for the requisite statutory minimum period in a year, were terminated without complying with s 25F,
the Supreme Court held that the said termination was illegal. However, considering the fact that 20 years had elapsed since
the termination of the service, instead of directing a reinstatement, a sum of Rs 25,000 was directed to be paid in lieu of
reinstatement and back wages.93

Seasonal Employees

In Morinda Coop Sugar, the issue was “whether the termination of seasonal workers, engaged during the crushing season
would amount to retrenchment.” Rejecting the contention, Ramaswamy J (for self and Hansaria J), observed:

It would thus be clear that the respondents were not working throughout the season. They worked during crushing seasons only.
The respondents were taken into work for the season and consequent to closure of the season, they ceased to work. ... The question
is whether such a cessation would amount to retrenchment. Since it is only a seasonal work, the respondents cannot be said to have
been retrenched in view of what is stated in clause (bb) of Section 2(oo) of the Act. Under these circumstances, we are of the
opinion that the view taken by the Labour Court and the High Court is illegal. However, the appellant is directed to maintain a
register for all workmen engaged during the seasons enumerated hereinbefore and when the new season starts the appellant should
make a publication in neighbouring places in which the respondents normally live and if they would report for duty, the appellant
would engage them in accordance with seniority and exigency of work.94

The Madras High Court held that seasonal employees had no right to regularisation, till they were duly selected and the
mere continuance for 480 days in service, would not qualify them for regularisation and, accordingly, a termination of their
services on the completion of the procurement season would not be attracted by s 25F.95 Termination of seasonal workers
at the end of the season, does not amount to a ‘retrenchment’ under s 2(oo), and they do not acquire a right to
regularisation.96 In Krishik Upaj, it was held that workers appointed on seasonal basis and not against any clear vacancy,
would not have any right to claim permanency, even if they had completed 240 days in a year.97 In another case involving
the same company, another single judge took a contrary view and upheld the award of the labour court, directing the
company to retain a workman on the ground that he had worked for more than 240 days in service, that other workmen
junior to him, were retained in service, and that the management could not adduce evidence to prove that the said workman
was engaged in work of a seasonal nature.98 A settlement providing for a regular absorption of seasonal employees,
depending on a permanent vacancy, can be invoked by seasonal employees to their advantage, as and when permanent
vacancies arise. No claim for regularisation need be considered if there are no permanent vacancies.1 In Bhogpur Coop
Sugar Mills, Sinha J (for self and Katju J), held that the termination of the service of a seasonal workman employed in a
sugar factory and who had not completed 240 days of service would not amount to retrenchment.2

Probationers

The Gauhati High Court has held that the termination of the service of a probationer, on a bald statement that he was
medically unfit, would fall within the definition of ‘retrenchment’.3 In Raghavendra Kulkarni, the Supreme Court held that
the termination of a probationer, in terms of the appointment letter, does not amount to a retrenchment.4 In SN Jhavar, the
Supreme Court classified the cases falling within the ambit of a ‘deemed confirmation’ under three heads, and observed:

The question of deemed confirmation in service jurisprudence, which is dependent upon the language of the relevant service rules,

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has been the subject-matter of consideration before this court, times without number, in various decisions and there are three lines
of cases on this point. One line of cases is where the service rules or in the letter of appointment, a period of probation is specified
and the power to extend the same is also conferred upon the authority, without prescribing any maximum period of probation and if
the officer is continued beyond the prescribed or extended period, he cannot be deemed to be confirmed. In such cases, there is no
bar against termination at any point of time after the expiry of the period of probation. The other line of cases is that where, while
there is a provision in the rules for an initial probation and extension thereof a maximum period for such extension is also
provided, beyond which it is not permissible to extend the probation. The inference in such cases is that the officer concerned is
deemed to have been confirmed upon expiry of the maximum period of probation, in case, before its expiry, the order of
termination has not been passed. The last line of cases is where, though under the rules, the maximum period of probation is
prescribed, the same also require a specific act on the part of the employer, of issuing an order of confirmation and of the
probationer’s passing a test for the purpose of confirmation. In such cases, even if the maximum period of probation has expired
and neither any order of confirmation has been passed, nor the person concerned has passed the requisite test, he cannot be deemed
to have been confirmed, merely because the said period has expired.5

The services of a probationer cannot be terminated for negligence in allowing vehicles to pass without collecting octroi,
unless he has been given an opportunity of being heard and an inquiry is conducted.6 In SN Vasudevan, the facts of the
case were: a few machine operaters were appointed on probation for a period of six months, with a provision for an
extension of the probation, if considered necessary. As against this, the Standing Order No 4(2) provided, inter alia, that a
probationer shall be closely watched in regard to his conduct, ability and adaptability to the job and if he does not meet the
requirements, his services will be terminated without notice, during or at the end of the probationary period. The
management extended the probation of the workmen, and later terminated their services. The labour court upheld the said
termination on the ground that it fell within the ambit of s 2(oo)(bb), in view of the fact that they were appointed for a
fixed period, on probation, which was liable to be extended, and hence, the provisions s 25N were not attracted. Gopala
Gowda J, held that the Standing Orders did not provide for an extension of the probation period and hence, the action of
the management in extending the probation, admittedly under the contract of employment, was repugnant to the Standing
Orders.7

This part of the decision deserves to be attacked. Extension of probation is an implied power conferred on the employer,
unless there is a clause in the Standing Orders which positively prohibits such extension or which imposes a ceiling on the
maximum period of probation, beyond which, the workman if continued, shall be deemed to have been automatically
confirmed. Where no such ceiling is prescribed, the probationer shall continue to be a probationer and does not get
automatically confirmed after the expiry of the said probation period. That is the settled legal position, as laid down by the
apex court in Dharam Singh,8BP Bhatnagar,9 and a host of other cases. In the present case, it was an admitted position that
the Standing Orders did not stipulate any ceiling on the maximum period of probation. The expression in Standing Order
No 4(2), that ‘his services will be terminated without notice, during or at the end of the probationary period’ could not
obviously be interpreted to mean that the employer should necessarily terminate his services at the end of the probationary
period. If the employer, in his discretion, feels that the probationer requires some more time to measure up to the job
demands and extends the probationary period, it could be not be said that such an extension works out to the disadvantage
of the workman. On the contrary, such an extension of the probationary period is beneficial to the workman, for the reason
that it gives one more opportunity to him to prove his suitability. In the face of a crystal clear legal position relating to
probation, and in the light of the above discussion, to hold that the employer had no right to the extend the probation,
sounds capricious. On this point, the view taken by the labour court is right and that of Gopala Gowda J, is misconceived
and wrong. In Muir Mills, Lakshmanan J (for self and Kabir J), held that in terms of the offer of appointment, the appellant
mill reserved the right to terminate the service of a probationer without assigning any reason and without any notice. That
being so, the termination of probationer under the said clause would not amount to retrenchment in view of the exception
carved out under sub-cl (bb) thereof. By the same token, the award of the tribunal granting relief of reinstatement with
back wages was not proper and deserved to be set aside.10

Part-time Workmen

A part-time workman, whose services were terminated without complying with the provisions of s 25F, is a workman and
is entitled to a reinstatement.11

Workmen appointed illegally and in contravention of Rules

In Eranallor SC Bank, a single judge of the Kerala High Court held that the appointment of an employee, made without the
authority of law, will be void ab initio and the termination of his services will not be retrenchment.12 On the other hand, in
Mithilesh Kumar Singh, a single judge of Patna High Court held that the termination of service of a workman, on the
ground that his initial appointment was not legal and valid, would amount to a retrenchment. The court observed that the

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idea of an illegal and invalid appointment is quite foreign to the Industrial Disputes Act.13 A similar view was taken by the
Madras High Court, in Srirangam CU Bank, in which the facts disclosed that the workman was appointed as a temporary
clerk by the bank, in contravention of its rules and regulations. In view of the wide amplitude of the language of the
definition of ‘retrenchment’, the termination of his service was held to be ‘retrenchment’. Rejecting the contention of the
employer bank that, since the appointment of the workman was void, he could not be continued in the service and,
therefore, the termination of his service would not amount to ‘retrenchment’, the court observed that since the workman
had put in over two years of service, he had been in continuous service for more than one year under the employer bank, as
required by s 25F, and whether the appointment was made in accordance with the law or not, does not make any
difference, and what is relevant is the fact of employment and not the legality or otherwise, of it.14 The Madhya Pradesh
High Court, in Rajesh Kumar, held that a termination of the employment of a probationer or of an invalidly appointed
worker, will be retrenchment because an invalid appointment is not one of the exceptions to the provisions of the main
definition of retrenchment.15 The view of the single judge of the Kerala High Court is the correct law, because the holding
judgments of the Patna, Madras and Madhya Pradesh High Courts will lead to absurd consequences. It would mean that
illegally and invalidly employed employees will be automatically validated and they will be treated at par with the legally
and validly employed employees. Thus, though the definition of ‘retrenchment’ comprehends a termination of service, it is
not that every termination of service is retrenchment. In other words, every case of a discharge simpliciter may not be a
case of retrenchment,16 though there is a preponderance of judicial opinion, that every termination of service, not falling
under any of the exception of s 2(oo), would amount to retrenchment. The words ‘termination by the employer of the
service of a workman, for any reason whatsoever’ are the keywords.17

Adjudication of Retrenchment

All ‘retrenchment’ is termination of service, but all termination of service may not be ‘retrenchment’. In order to be a
‘retrenchment’, the termination of service has to fall within the ambit of the definition of ‘retrenchment’, as given in s
2(oo) of the Act.18 Furthemore, s. 25F prescribes the requirements of notice and compensation, as conditions precedent to a
retrenchment of workmen. Section 25G introduces the rule ‘last come first go’, in effecting ‘retrenchment’ of workmen. A
termination of service, without satisfying these statutory requirements, will be no ‘retrenchment’ in the eye of law. Hence,
a non-compliance with these mandatory provisions, will render the purported retrenchment invalid. Industrial adjudication,
therefore, has jurisdiction to see whether, in fact, these preconditions have been complied with or not. A termination of the
service of a workman, as a measure of ‘retrenchment’, without complying with the mandatory requirements of law, will be
illegal. But the word ‘illegal’ has a very wide significance. Considered in isolation, it is vague; for the termination of
employment may be illegal for different and even conflicting reasons. Therefore, the meaning of the word ‘illegal’ has to
be understood in the context of the allegations of facts constituting the particular kind of illegality pleaded. It would follow
that the word ‘illegal’ so construed, according to the context, would not include some meaning of illegality which was not
pleaded and which was contrary to the pleadings.19

In JK Iron, the Supreme Court observed that if in applying the principle ‘first come, last go’, the employer gives a
preferential treatment to juniors, without any acceptable or sound reasons, the industrial adjudication will be well justified
in holding that the action of the management is not bona fide and the adjudicator will be within his jurisdiction to go into
the question of the bona fides of the retrenchment. However, the question of notice and compensation required by s 25F
and the rule of ‘last come, first go’, as enshrined by s 25G, would arise only if the termination of the service of a workman
is ‘retrenchment’ as contemplated by s 2(oo). These requirements are not attracted in cases of termination of service
otherwise than as ‘retrenchment’.20 The desire of an employer to make profit is natural and, therefore, lawful.21 It is not
open to an industrial adjudicator to tell an employer as to how he should conduct his business.22 So long as the
retrenchment is carried out bona fide and is not vitiated by any considerations of victimisation or unfair labour practice,
and the employer comes to the conclusion that he can carryon his undertaking with reasonable efficiency, with the number
of employees retained by him after retrenchment, the tribunal ought not to ordinarily, interfere with such decision. It is for
the management to decide the strength of its labour, required to carry out efficiently, the work of its undertaking. If,
therefore, as a result of a re-organisation, the number of the existing employees exceeds the reasonable and legitimate
needs of the undertaking, the employer, subject to his obligations under Chs VA and VB of the Act, can effect
retrenchment.23

It is not the function of the tribunal to go into the question of whether such a scheme is profitable or not, or whether it
should have been adopted by the employer. There is no provision in industrial law which confers any power on the tribunal
to inquire into such a dispute, so long as it is not actuated by any consideration of victimisation or any unfair labour
practice.24 ‘A person must be considered free to so arrange his business, that he avoids a regulatory law and its penal
consequences, which he has, without the arrangement, no proper means of obeying. This, of course, he can do only so long
as he does not break that or any other law’.25 A person has a right to re-organise his business in any fashion he likes, for the
purpose of economy or convenience. It is within the managerial discretion of an employer, to organise and arrange his
business in the manner he considers best. So long as that is done bona fide, it is not competent for the tribunal to question

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its propriety. Hence, the management has a right to determine the volume of its labour force, consistent with its business or
anticipated business, and its organisation. If, for instance, a scheme for re-organisation of the business of the employer,
results in surplusage of employees, no employer is expected to carry the burden of such economic dead weight and
retrenchment has to be accepted as inevitable, however unfortunate it be.26 The fact that the action of retrenchment, taken
by the employer, is in exercise of his right of re-organisation of his business, is an important aspect which has to be
specifically pleaded and proved before the tribunal and then, to be decided by the tribunal.27

Subject to the provisions of Chs VA and VB, the management has a right to take a decision to retrench the dead weight of
uneconomic surplus. The justification for the retrenchment has, however, to be assessed by the reasonableness of the
decision taken by the management in a particular situation of actual or threatened losses. It is not to be assessed as the
vindication of that step by future events and by the substituted judgment of any other agency, judicial or otherwise, which
has no responsibility or hazard in the industry.28 For instance, a retrenchment cannot be said to be unjustified merely for
the reason that the employer could have transferred the workmen to another unit in another part of the country, and the
tribunal, a therefore, cannot infer that the failure of the employer to transfer the retrenched employees to other units,
renders the retrenchment unjustified.29 Likewise, the fact that the implementation of a reorganisation scheme, adopted by
an employer, for reasons of economy and convenience, would lead to the discharge of some of the employees, will have no
material bearing on the question as to whether the re-organisation has been adopted by the employer bona fide or not.30
The law, however, requires that in effecting a retrenchment, for any reason whatsoever, the employer must be acting bona
fide and not for the purpose of victimising his employees and in order to get rid of their services.31 For instance, the
retrenchment of a workman, who had put in one and a half decades of continuous service, on the ground that his age was a
little more than the maximum eligible age for appointment, at the time of the employment, was held to be unjustified and
invalid.32 A mere invocation of the Standing Orders, for a termination of service, will not, ipso facto, take the termination
beyond the jurisdiction of the industrial tribunal.

In appropriate cases, the tribunal will have jurisdiction to find out as to whether the invocation of the Standing Order was
capricious, arbitrary, or mala fide, or was the result of victimisation or an unfair labour practice, and set aside the
‘retrenchment’ or award compensation if the facts of the case justify.33 But the tribunal has to confine its adjudication to
the terms of reference and the pleadings of the parties. It is ‘not open to it to fly off at a tangent, disregarding the pleadings
and reach any conclusion that it thinks as just and proper’.34 For instance, where the only point of a dispute which was
referred by the state government, to the tribunal, for adjudication, was, whether the ‘retrenchment’ of the workman by the
general manager of the corporation was legal and valid, the tribunal had no jurisdiction to engage itself in the inquiry as to
who had retrenched the workman concerned and whether he was competent to do so or not, because a workman cannot, in
the same breath, say that he has not been retrenched and also say that his retrenchment is invalid and inoperative.35 In
Subong Tea Estate, the Supreme Court stated the following propositions for the guidance of industrial adjudicators:

(1) The management can retrench its employees only for proper reasons, which means, that it must not be actuated by any
motive of victimisation or any unfair labour practice;
(2) It is for the management to decide the strength of its labour force, and the number of workmen required to carry out
efficiently, the work in his industrial undertaking; the decision, therefore, must always be left to be determined by the
management in its discretion;
(3) If the number of employees exceeds the reasonable and legitimate needs of the undertaking, it is open to the management
to retrench them;
(4) Workmen may become surplus on the ground of rationalization or on the ground of economy, reasonably and bona fide
adopted by the management, or on the ground of other industrial or trade reasons; and

(5) The right of an employer to effect retrenchment, cannot normally be challenged, but when there is a dispute in regard to
the validity of the retrenchment, it would be necessary for the tribunal to consider whether the impugned retrenchment
was justified and it would not be open to the employer, either capriciously or without any reason at all, to say that it
proposes to reduce its labour force, for no rhyme or reason.36

Burden of Proof

The burden of proof to establish that the termination of service of a workman is retrenchment, is on the person putting
forward the claim. In other words, where an employee claims that he has been retrenched, he must prove that he was
retrenched from service and it is not for the employer to prove that the discharge or termination of the services of the
employees was otherwise than by way of retrenchment.37

Clause (p): SETTLEMENT

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The repealed Trade Disputes Act, 1929, did not contain the definition of ‘settlement’. The definition as originally enacted
in the Industrial Disputes Act, 1947, was as follows: “Settlement means a settlement arrived at in the course of a
conciliation proceeding”. This definition did not take notice of any private settlement or agreement, arrived at between the
parties, in the course of their direct negotiations. A Division Bench of the Bombay High Court observed that, ‘it is only
that settlement upon which the law has its imprimatur and to which the law has given sanctity and which the law has made
binding’.38 The old definition was substituted by the present one, by the Amending Act of 1956.

Settlement and Agreement

The definition of settlement now envisages two categories of settlements (i) a settlement which is arrived at in the course
of conciliation proceedings, ie, one which is arrived at with the assistance and concurrence of the conciliation officer, who
is duty-bound to promote a right settlement and to do everything he can, to induce the parties to come to a fair and
amicable settlement of the dispute, and (ii) a written agreement between the employer and workmen, arrived at otherwise
than in the course of conciliation proceedings.39 The legal effects of both the kinds of settlements are not identical, in that
whereas the former binds all the present and future workmen as specified in s 18(3), even though such persons are not
parties to the dispute and join the establishment subsequent to the settlement, the latter binds only the actual parties to the
agreement, under the provisions of s 18(1) of the Act.40 Rule 58(2) of the Industrial Disputes (Central) Rules, 1957,
prescribes the manner of signing the settlement. Section 18(1) makes such a settlement binding on the parties to the
agreement, while s 18(3) makes a settlement arrived at ‘in the course of conciliation proceedings’ binding on the parties
enumerated therein. A settlement becomes binding on the parties and comes into operation on the date agreed upon by the
parties to the dispute and, if no date is agreed upon, on the date on which the memorandum of the settlement is signed by
the parties to the dispute and a copy of it is sent to the concerned officer. A party who wants to take advantage of a
settlement, has to establish that the requisites of the ‘settlement’ had been complied with.41

The Preamble to the Act postulates the settlement of ‘industrial disputes’. Therefore; in terms of the definition of a
settlement, what is settled between the parties is an ‘industrial dispute’, which, inter alia, is a dispute between the
employer and the workmen. If the employees concerned do not fall within the category of workmen, no agreement or
arrangement between them, even if it is in compliance with the requirements of s 2(p) and the relevant rules, will be a
‘settlement’ as postulated by the Act.42 A settlement between an employer and workmen, if not duly terminated, will
operate as an inviolable condition of service of the workmen. Such a settlement is only a step up in labour’s progressive
ascent to the goal of their ultimate ideal, namely, a living wage with the realisation of other aspirations, including a
partnership with the employer.43 A voluntary settlement is, however, to be distinguished from an adjudication. There may
be several factors that may influence the parties to come to a settlement, as a phased endeavour in the course of collective
bargaining. It is a process of give and take. By a settlement, the labour may scale down its claims and score in some other
aspects and save unnecessary expenses in uncertain litigation. Once cordiality is established between the employer and
labour, in arriving at a settlement, which operates well for the period for which it is enforced, there is always a likelihood
of further advances in the shape of improved emoluments by voluntary settlement, avoiding friction and unhealthy
litigation. This is the quintessence of settlement, which courts and tribunals should endeavour to encourage. ‘Any
settlement arrived at should be a just and fair one,44 It is in this spirit that the settlement has to be judged and not by the
yardstick adopted for scrutinising an award in an adjudication. A settlement, therefore, cannot be judged on the touchstone
of the principles which govern the adjudication of industrial disputes.45 In the words of Koshal J:

If the settlement had been arrived at by a vast majority of the concerned workers, with their eyes open, and was also accepted by
them in its totality, it must be presumed to be just and fair and not liable to be ignored while deciding the reference, merely because
a small number of workers...were not parties to it or refused to accept it, or because the tribunal was of the opinion that the workers
deserved marginally higher emoluments than they themselves thought they did. A settlement cannot be weighed in any golden
scales and the question whether it is just and fair, has to be answered on the basis of principles different from those which come
into play when an industrial dispute is under adjudication.46

A settlement is the result of collective bargaining and when a recognised union negotiates with an employer, the workers
as individuals, do not come into the picture and it is not necessary that such individual workers should know the
implications of the settlement, since a recognised union, which is expected to protect the legitimate interests of the labour,
enters into a settlement with the best interests of the labourers in view. There may be exceptional cases where there may be
allegations of mala fides, fraud or even corruption or other factors, which cannot altogether be ruled out. The settlements in
the course of collective bargaining, ought to be weighed in their proper perspective and to be considered by law courts
while implementing the same, as representing the wishes and desires of the workmen of the concerned organisation. A
settlement ought not to be interfered with so easily, even though it may operate with a little bit of harshness to a section of
employees and there ought to be some amount of give and take for the proper industrial peace and harmony in the country.

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Law courts, therefore, have a bounden obligation to maintain such a settlement and to give due consideration to a
settlement arrived at between the recognised union and the management. It would, therefore, be improper for industrial
adjudication, to ignore the settlement and insert something which is totally different.47 The Karnataka High Court has gone
to the extent to say that even if the settlement is technically not in accordance with the law, it should not be interfered with
in judicial review, where it is between the management and the majority of the workmen, who have taken benefit under the
settlement and thereafter, resumed normal production and industrial peace, unless it is shown that the terms of the
settlement are onerous and against the interests of the majority of the workmen. It is well-settled that the extraordinary
jurisdiction of the writ court or judicial review should not be exercised, even if the aggrieved party has made out a case on
a question of law, unless a substantial injustice has been caused to it.48

The Andhra Pradesh High Court held that where the management is guilty of dishonouring its commitments under a
settlement, whether it is called the ‘understanding’ or ‘minutes of discussion’, after taking full advantage of the terms
thereof, and having trapped the union into an agreement and after taking advantage of that agreement, it could not be said
that the settlement was not binding on the management. In this case, the court reprimanded the conduct of the
management, in trying to resile from the settlement so entered into.49 The question of the justness and fairness of a
settlement should be examined with reference to the situation, as it stood on the date on which it was arrived at. For
instance, if a settlement is arrived at between the parties during the pendency of adjudication proceedings, the possibility of
an adverse decision operates as a positive force in favour of a deliberate and careful effort by both the parties, to settle their
disputes through direct negotiations. There may also be the probability of the workmen having to refund some amounts to
the employer, in the event of the award going in favour of the employer.50 A settlement, therefore, is not to be seen in bits
and pieces, by holding some parts good and acceptable and others bad. Unless it can be demonstrated that the
objectionable portion is such that it completely out-weighs all the other advantages gained, the court will be slow to hold a
settlement as unfair and unjust. The settlement has to be accepted or rejected as a whole.51 In construing a settlement, if
two views are possible, the view which is more favourable to the workers should be adopted.52 But a settlement obtained
by fraud or vitiated on account of its being involuntary, will be no settlement in the eye of law.53

However, unless an agreement arrived at between the parties, either before a conciliation officer, or otherwise, is a
settlement in its grammatical or ordinary signification, it will not be a settlement within the meaning of the definition. The
term ‘settle’ is used in more senses than one. For instance, one settles properties, one settles accounts, literally and
metaphorically. In relation to disputes, the word in the dictionary sense would mean, to decide by arrangement between the
contesting parties’. Obviously, what is decided by a settlement, is the ‘industrial dispute’. Every settlement is an
arrangement or agreement, though every arrangement or agreement is not a settlement. An agreement or arrangement will
not be a settlement merely because the parties to the dispute choose to call it a ‘settlement’ and such agreement or
arrangement is incorporated in a memorandum of settlement, signed by the parties for the purposes of settlement. The
agreement or arrangement must decide some part of the dispute or some matter in the dispute or decide the procedure by
which the dispute is to be resolved, or affect the dispute in some manner or the other, or provide for some act or
forbearance in relation to the dispute, on the part of a party or parties to the dispute. In other words, a settlement only
settles the matter or matters in the dispute which it settles. If some of the matters in dispute are not settled, it cannot be said
that the settlement settles the entire dispute or settles those matters in dispute, which are not within the scope of the
settlement. For instance, an interim settlement which not only leaves the dispute relating to the quantum of bonus at large,
but also leaves at large, the time and manner of the payment of the bonus in its entirety and settles only the manner and
time of an ad hoc payment to be made on account of the bonus and the procedure for the determination of the dispute to be
adopted for the time being, would not fall within the definition of a settlement, as contemplated by the Act.54

An agreement to refer an industrial dispute to an arbitrator, under s 10A(l) of the Act, is not a settlement, because the
dispute in question subsists after such agreement and does not come to an end.55 In Hindustan Lever, speaking for the
Supreme Court, Desai J observed that the courts, by interpretative process, must strive to reduce the field of conflict and
expand the area of agreement and show its preference for upholding agreements sanctified by mutuality and consensus in
the larger public interest, namely, to eschew industrial strife, confrontation and consequent wastage.56 When any trade
union enters into some settlement of an industrial dispute, with the employer, the presumption is that it has acted in the
best interests of its members. Therefore, when a settlement of an industrial dispute is reached at, between the sponsoring
union, particularly when it commands the support of the majority, it should be prima facie, considered to be in the best
interests of the employees of the concerned establishment or industry, even of the public body. Such presumption is not
assailable in the absence of any oblique motive behind it. But a mere allegation in this regard would not be sufficient, as it
is easier to allege than to prove. The allegation of an oblique motive, even at the stage of pleadings, should be based on
some concrete materials and not based on a vague allegation.57 There are two modes of settling industrial disputes between
parties, viz:

(1) by a settlement arrived at in the course of conciliation proceedings; and

(2) by a settlement otherwise than in the course of conciliation proceedings.

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Settlement Arrived at in the Course of Conciliation Proceedings

Law attaches importance and sanctity to a settlement arrived at in the course of conciliation proceedings, since it carries a
presumption that it is just and fair and makes it binding on all the parties, as well as other workmen in the establishment, or
the part of it to which it relates. There is a distinction between a ‘settlement arrived at in the course of conciliation
proceedings’ and a settlement arrived at ‘by an agreement between the employer and workmen, otherwise than in
conciliation proceedings’, both as regards the procedure to be followed in the two cases and as regards the persons on
whom they are binding.58 The legislature, when it made a settlement binding not only on the parties, but also on the present
and future employers and workmen, it intended that such settlement is arrived at in the course of conciliation
proceedings.59 The manner of arriving at a settlement in the course of conciliation proceedings has been prescribed by s
12(3), s 13(2) and r 58 of the Industrial Disputes (Central) Rules 1957. Section 12(3) and s 13(2) require the conciliation
officer or the board, as the case may be, to send a report of the settlement arrived at, in the course of the conciliation
proceedings, to the ‘appropriate government’, together with a memorandum of the settlement signed by the parties to the
dispute. Rule 58 prescribes the requirement of the memorandum of settlement.

Sub-rule (1) prescribes that the memorandum of settlement shall be in form H, while sub-r (2) prescribes the mode and
manner of signing the settlement and sub-r (3) repeats the requirement of s 12(3), that a conciliation officer should send a
report of such a settlement to the Central Government. Section 18(3) makes such a settlement binding not only on all the
parties to the dispute, but also upon the heirs, successors and assigns of the employer, in respect of the establishment and
also, in certain cases, upon all the other parties summoned to appear in the proceedings as parties to the dispute, before the
authority. It also makes such a settlement binding on all the present and future workmen employed in the establishment.
Section 12(3) postulates that it should be a settlement between the parties to the dispute, which would include not merely
one section, but all the workmen who are before the conciliation officer in connection with the conciliation proceedings, on
an identical issue.60 The report of the board of conciliation under s 13(2), in addition to the requirements of r 58, must also
comply with the requirements of s 16. Such report shall have to be published in accordance with the provisions of s 17.
The settlement arrived at in the course of the conciliation proceedings, stands on a higher footing than a settlement arrived
at de hors the conciliation proceedings. Therefore, in order to have a binding effect under s 18(3), on the other parties, who
are not parties to the settlement, it would be necessary, firstly, that there should be a conciliation proceeding pending and,
secondly, that the settlement should have been arrived at in the course of the conciliation proceedings.61

A settlement which does not comply with the requirements of the statute, viz, the section and the relevant rules framed by
the appropriate government, will not be a valid settlement.62 A settlement, after it becomes enforceable under the law,
cannot be modified subsequently, by a tribunal, arbitrator or any authority, under the Act.63 The words ‘in the course of
conciliation proceedings’, though refer to the duration when the conciliation proceedings are pending, do not mean any
agreement arrived at between the parties privately, during this period. In Bata Shoe Co, the Supreme Court pointed out that
a settlement, ‘in the course of conciliation proceedings’, does not mean a settlement which is reached at between the
parties during the period when a conciliation proceeding is pending before a conciliation officer, but is the one which is
assisted and aided by the conciliation officer, by his advice and concurrence, on his being satisfied that the settlement is
fair and reasonable, for it is the duty of the conciliation officer to promote a right settlement and to do everything he can do
to induce the parties to come to a fair and amicable settlement of the dispute. It is only such a settlement as is arrived at
while the conciliation proceedings are pending, that can be binding under s 18(3). The legislature, when it made such a
settlement binding, not only on the parties thereto, but also to the present and future employers and workmen, intended that
such settlement is arrived at with the assistance of the conciliation officer and is considered by him to be reasonable and,
therefore, has his concurrence.64 The intention of the legislature in making the settlement arrived at during the conciliation
proceedings so binding on the parties was that the conciliation officer will not be a mere silent spectator or a mediator
alone, but it would be obligatory on him to ensure the presence of the parties and that the interests and obligations of all the
concerned parties are taken into account.65

However, the conciliation officer is not an adjudicating authority. Therefore, a conciliation officer is not required to decide
the dispute on merits. Patently, his task is one of discussion, or advice and persuasion, so that the matters in dispute are
clarified to the parties themselves; and thrashing out the various points out of the dispute, in their presence, so that they are
enabled to come to a settlement which is fair and amicable. The hearing by the conciliation officer, if any, is for the
purpose of ascertaining the points of the dispute between the parties and for the purpose of finding out the matters which
affect the rights and merits of the parties.66 If the conciliation officer is satisfied, after negotiations with the parties, that the
terms of the settlement taken as a whole, are beneficial to the workmen, being fair and reasonable, it is not open to the
reviewing court to examine whether there was an application of mind by him, to each and every term of the settlement. But
the conduct and the action of the conciliation officer, in impressing the settlement with the stamp of a settlement in the
course of conciliation proceedings, is open to scrutiny by a reviewing court, though the relief granted by the reviewing
court would be of a declaratory nature, which may, in appropriate cases, necessitate the granting of a consequential relief.67

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Where the conciliation officer, after the receipt of a statement of claim, did not initiate any proceedings for conciliation, in
that neither the investigation was made, nor any negotiations were held by her, nor did she make any attempt to induce the
parties to reach a settlement and also did not apply her mind to the question, whether the settlement was fair or reasonable,
it could justifiably be said that it was a settlement de hors the conciliation proceedings.68

The Madras High Court, in, Ramakrishna Industries, held that a settlement will not have the effect of the settlement in the
course of conciliation proceedings, ‘unless it is brought about with the assistance and concurrence of the conciliation
officer and he has got a significant role to play in seeing to it that the terms arrived at are fair to both the parties’.
Otherwise, it will not be a settlement in the course of conciliation proceedings. But even such a settlement may not
survive, if it violates the provisions of Ch VA or VB of the Act, particularly when it is unreasonably bristling with
unjustness and unfair labour practices.69 A settlement brought about with the mediation of any person other than the
conciliation officer, during the pendency of conciliation proceedings, cannot be treated as a settlement ‘arrived at in the
course of conciliation proceedings’. For instance, a settlement brought about with the intervention of a minister or a chief
minister, will not be a settlement arrived at in the course of conciliation proceedings, for a minister is not a conciliation
officer.70 Nor would a mere statement in an agreement, to the effect that the minister had assured his good offices for the
implementation of the demands and on his assurances, the union had called off the agitational programme, constitute a
settlement of the dispute. However, the mere participation of a Minister, or Chief Minister in the conciliation proceedings,
will not change the character of the conciliation proceedings, if the conciliation has been brought about with the aid and
assistance of the conciliation officer. Merely because sometimes, a labour leader or a minister participated, to induce the
parties to come to a fair and amicable settlement of the dispute, the proceedings would not cease to be conciliation
proceedings. But if it can be shown that during the proceedings or in the meeting, the presence or participation of the
minister made the presence of the conciliation officer of no consequence, or he abandoned his function of superintendence
and control, then it can be said that there was no conciliation proceeding. Since the binding effect of such settlement under
s 18(3), is far-reaching, it is incumbent on the conciliation officer to apply his mind to such a settlement, arrived at ‘in the
course of the conciliation’ before him, to see whether the settlement is fair and reasonable and has not been procured by
fraud, coercion or undue influence. On being satisfied as to this aspect of the settlement, he should record the settlement
and send a report to the appropriate government. The question as to whether a settlement, in fact, was aided and assisted by
the conciliation officer, having satisfied himself after applying his mind to it, is a question of fact and must be specifically
pleaded and proved in challenging the settlement.71

An industrial dispute need not necessarily be a dispute between an employer and his workmen. It happens, though rarely,
that the dispute may be between two sets of workmen in the same establishment. The parties to such a dispute must
necessarily be the two factions of the workmen. In such a situation, no settlement can be arrived at between the employer
and one faction of the workmen. A settlement arrived at between the employer and one faction of the workmen, even
through the mediation of the conciliation officer, will be no settlement in the eye of the law.72 A settlement arrived at,
without the assistance and concurrence of the conciliation officer, will be quashable in judicial review. A writ petition
praying for a declaration, that the settlement entered into between the employer and the union is not a settlement within the
meaning of s 12(3) of the Act, and that it does not have the effect contemplated under s 18(3) of the Act, is maintainable.73
The answer to the question, whether a settlement was arrived at in the course of conciliation proceedings or not would
depend upon what happened during the conciliation proceedings and the part played by the conciliation officer during
those proceedings, to bring into being, a fair and amicable settlement for the resolution of the controversy in regard to
which the conciliation proceedings were commenced.74 A settlement which is arrived at without the mediation of an
officer, or with one who is not a ‘conciliation officer’, will not be a ‘settlement’. An officer whose appointment has not
been made by a notification in the Office Gazette of the appropriate government, as required by s 4(1), will not be a
‘conciliation officer’, in the eye of law. Likewise, ‘an implied agreement by acquiescence or conduct, such as the
acceptance of a benefit under an agreement to which the worker acquiescing or accepting the benefit was not a party’ will
be outside the purview of the ‘settlement’ and shall not be binding on such a worker either under sub-s (1) or under sub-s
(3) of s 18 of the Act.75

But in MICO, the workmen had sought a declaration from the High Court to the effect that the settlement in question, be
declared to be invalid, as it was not a settlement in the eye of law, having been entered into ‘in the course of conciliation
proceedings’. Though the court held that the settlement was not a settlement in the course of conciliation proceedings, it
declined to grant the declaration sought for, as it found that the settlement was a settlement between the management and
the majority of workmen and a good majority of the workmen had taken the benefit under the settlement and thereafter,
resumed normal production and maintained industrial peace. The court observed that unless it was shown that the terms of
the settlement were onerous and against the interests of the majority of the workmen, it would not be proper for the court
to grant the declaration in exercise of its writ jurisdiction. The court also found that the capacity of the petitioners and
members of the association of workmen itself, was in dispute before a civil court. It could, therefore, not be said that the
interests of the workmen as a whole, were in jeopardy by the impugned settlement. The court was further influenced by the

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fact that there was a possibility of industrial unrest and eruption of violence between the two groups of workmen, in case
the settlement was disturbed.76

In Hindustan Zinc, the facts were: after the failure of the conciliation proceedings, at the request of the management to
explore the possibility of a settlement, the conciliation officer went to the office of the company. His efforts resulted in a
settlement, which was recorded in the form of the ‘minutes of discussion’, which was signed by four representatives of the
management and five representatives of the workmen. In the settlement it was agreed that the workmen will file an appeal
against the order of dismissal and the management agreed to award punishment other than a dismissal, discharge or
removal of the concerned workman, from service. Though the workmen implemented the terms of the settlement, the
management disposed of the appeal of the workmen by reducing the punishment to one of discharge, from that of a
dismissal, thus resiling from the settlement. The workmen, therefore, filed a writ petition in the High Court of Andhra
Pradesh. In the meanwhile, the government referred the dispute relating to the discharge of the workmen, for industrial
adjudication under s 10(1) of the Act. Thereupon, the said writ petition was dismissed as being infructuous. Before the
industrial tribunal, the management took the objection that the reference was invalid in view of the settlement. Though the
tribunal upheld the objection raised by the management, it observed that the order of discharge issued to the workman was
illegal, being inconsistent with the settlement. It also suggested that it was open to the chairman-cum-managing director to
apply his mind and award punishment other than a removal from service, as per the understanding. When the workman
approached the management for implementing the award, the management took the stand that there was no award to be
implemented, since the reference itself had been rejected. The workmen again filed a writ petition, seeking a reinstatement
in service, with back wages and continuity of service. The High Court strongly deprecated the conduct of the management
in dishonouring its commitments under the settlement, whether called as an ‘understanding’ or as the ‘minutes of
discussion’, after having trapped the union into an agreement and after having taken full advantage of that agreement. In
the facts and circumstances of the case, the court held that the agreement reached at, between the parties, was a settlement
and the same was binding on the management.77 If the question that is agitated can be resolved only by reference to
complicated questions of fact, then the reviewing court may direct the aggrieved party to resort to alternative remedies that
might be available.78

In State Bank Staff Union, a settlement arrived at between the employees of the State Bank of India and the State Bank,
relating to the conditions of service of the employees, was not implemented. Nor were the copies of the settlement
forwarded to the authorities, as required by r 58(4) of the Central Rules framed under the Act on the ground that an
approval of the Central Government was required before the implementation of the terms of the settlement. The union
issued a notice of strike and forwarded copies of the settlement to various authorities. Consequently, the conciliation
officer initiated conciliation proceedings, during the pendency of which, the employees went on a strike. The bank issued a
circular that it will deduct the salaries of the workmen for the strike period, on the principle of ‘no-work-no-pay’. The
circular was challenged in a writ petition by the union of the Madras High Court quashed the circular, holding that there
was no breach of the requirements of s 22, because the conciliation did not relate to an industrial dispute, as it was not
connected with the employment or non-employment, terms of employment or conditions of labour of a person, and the
non-implementation of the requirements of r 58(4) of the Industrial Disputes (Central) Rules 1957 would not be of any
consequence, as the settlement in terms of s 20(2)(a) comes into existence when a memorandum of settlement is signed by
the parties to the dispute.79

Settlement otherwise than in the Course of Conciliation Proceedings

The first part of the definition, viz, a settlement in the course of conciliation proceedings, is the denotation of the word
‘settlement’. But ‘a written agreement between an employer and workmen, arrived at otherwise than in the course of
conciliation proceedings’ has been brought within the ambit of the definition, in an inclusive manner; This extended
meaning is the connotation of the definition. By this connotation of the definition, it is further required that such an
agreement of settlement should be signed by the parties thereto, in the prescribed manner and a copy thereof should be sent
to the ‘appropriate government’ and the conciliation officer. Settlement of labour disputes by direct negotiation or
settlement through collective bargaining, is always to be preferred for, as is obvious, it is the best guarantee of industrial
peace, which is the aim of all legislation for the settlement of labour disputes.80 In order to bring about such a settlement
more easily and to make it more workable and effective, it is no longer necessary under the law, that the settlement should
be confined to that arrived at in the course of conciliation proceedings, but now, it includes ‘a written agreement between
the employer and the workmen, arrived at otherwise than in the course of conciliation proceedings, where such agreement
has been signed by the parties thereto, in such manner as may be prescribed and a copy thereof, has been sent to the
appropriate government and conciliation officer’.81 Such a settlement, arrived at by agreement between the employer and
the workmen, otherwise than in the course of conciliation proceedings, is binding only on the parties to the agreement,
under s 18(1) of the Act and it is not binding on the other workmen, who are not parties to the settlement.82 Therefore, an
agreement by acquiescence and without being in writing, signed by the parties, will not be a settlement as contemplated by
the definition and will not have the binding effect.83 Nor would the record of an agreement in writing, without complying

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with the requirements of the relevant rule, be called a ‘settlement’ as defined in the Act.84 Rule 58 of the Industrial
Disputes (Central) Rules 1957, prescribes the memorandum of settlement. Under sub-r (1), the memorandum of settlement
in case of a settlement in the course of conciliation proceedings and a settlement otherwise than in the course of
conciliation proceedings, is the same, viz, in form H.85 Sub-rule (2) prescribes that the settlement shall be signed by:

(a) in case of an employer, by the employer himself, or by his authorised agent, or when the employer is an incorporated
company or other body corporate, by the agent, manager, or other principal officer of that corporation;

(b) in case of the workmen, by any officer of a trade union of the workmen or by five representatives of the workmen, duly
authorised in this behalf, at a meeting of the workmen held for the purpose;
(c) in the case of the workman in an industrial dispute under section 2A, by the workman concerned.

The Explanation to the rule defines an ‘officer’ of a trade union to mean any of the following office-bearers:

(i) The President;

(ii) The Vice-President;

(iii) The Secretary (including the General Secretary);

(iv) A Joint Secretary;

(v) Any other officer of the trade union, authorised in this behalf, by the President and the Secretary of the union.

Thus, where the workmen are represented by a recognised union, the settlement may be arrived at between the employer
and the union. But if the Constitution of the union provides that any of its office-bearers can enter into a ‘settlement’ with
the employer, on behalf of the union and its members, a ‘settlement’ may be arrived at between the employer and such
office-bearers. The office-bearers, who wish to enter into a settlement with the employer, should have the necessary
authorisation by the executive committee of the union or by the workmen.86 An agreement between an employer and the
workmen, arrived at otherwise than in the course of conciliation proceedings, would not constitute a ‘settlement’ unless the
requirements prescribed by the relevant rules are complied with. In other words, such a settlement will be non-est in the
eye of the law,87 and parties can resile from such a settlement. By providing that such a ‘settlement’ should be in the proper
form and signed by the parties and copies thereof, signed by both the employer and the workmen, should be forwarded to
the concerned authorities for their information, the legislature has made in-built safeguards against its misuse. These
requirements are not empty formalities and they are intended to protect the interests of the workmen. That purpose will be
frustrated if these requirements are not strictly construed or duly complied with. In other words, the requirements
contained in s 2(p) and r 58 are mandatory and non-compliance of them, shall vitiate the settlement.88 In Delhi Cloth Mills,
the Supreme Court said that the settlement has to be in compliance with the statutory provisions, as they are of a
mandatory character.89 In Brooke Bond, a controversy arose as to whether the office bearers of a trade union could sign an
agreement, without their being specifically-authorised to do so, either in the Constitution of the union or in the resolution
adopted by the union. The Apex Court held:

... unless the office bearers who signed the agreement, were authorised by the executive committee of the union, to enter into a
settlement or the Constitution of the union contained a provision that one or more of its members would be competent to settle a
dispute with the management, no agreement between any office bearers of the union and the management can be called a
settlement, as defined in section 2(p). If the ‘settlement’ is to have a binding effect on all the workmen, the procedure prescribed by
Rule 58 must be fully complied with. 90

But in Hindustan Lever, a particular ‘agreement’ was not in the form and manner, as required by the relevant rule. And
taking advantage of this agreement, the employer had successfully blocked the adjudication of several earlier references at
the threshold, by setting up the ground that the said agreement was a ‘settlement’, which covered the dispute under
reference. But in this case, the employer took the converse position, and claimed that the said agreement was not a
‘concluded agreement’, and therefore, not a settlement. In view of the fact that in the earlier references, the employer had
taken an effective and wholesome advantage of the agreement, as a settlement, the court observed that no court of justice
can ever permit such a thing to be done, and treated the agreement in question to be a settlement.91 This holding was, thus,
based on the peculiar facts and circumstances of the case. There is no reference in it to the language of s 2(p) and r 58. The
case, therefore, as pointed out by Dr BP Saraf J, in Adil Patel (supra), cannot be treated as an authority for a general
proposition, that the requirements of r 62 are not mandatory. In Adil’s case, a letter written to the company by the union

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and signed by its general secretary, vice president and a special representative of the employees, was set up by the
management as a ‘settlement’ between the management and the recognised union, as binding on all employees, even if
some of them were not its members. On an illuminating review of the relevant case law, and the statutory provisions the
learned judge held that since this letter was not in compliance with the statutory requirements of s 2(p) and r 62 of the
Bombay Rules, it was not a settlement in the eye of the law.

Likewise, in IAAI, the minutes of a meeting, recorded and duly signed by two representatives of the management and two
of the union, were sought to be relied on as a ‘settlement’. The Delhi High Court held that since the statutory requirements
were not complied with, the record of the minutes was not a ‘settlement’ in the eye of the law and as such, were not
binding on any of the parties.92 But in Johnson & Johnson, the Bombay High Court held that in view of the fact that the
settlement was fair and accepted by all the workmen, a procedural violation in arriving at it would not render it illegal.93 A
settlement arrived at between the parties, without the mediation of a conciliation officer or the conciliation board, will,
under s 18(1), bind only the parties to such settlement and not any other person. A settlement arrived at between an
association of employees and the representatives of the labour, through negotiations which comply with the requirements
of the definition, is binding on all the members of the association.94 Likewise, a settlement arrived at between an employer
and the union of the workmen, is equally binding not only on such union, but also on the workmen whom it represents.

In MICO, the Supreme Court rejected the contention that the settlement arrived at between the employer and the union of
the workmen, was not binding on the workmen, because the union was a distinct legal entity from the workmen. The court
observed that apart from the tenor of the settlement and the principle of collective bargaining, recognised by industrial law,
the contention was contrary to the provisions of the Act itself, under which a settlement arrived at between the employer
and a union representing the employees, during the conciliation proceedings, is binding not only on such union but also on
the workmen whom it represents.95 When a recognised union negotiates with an employer, the workers, as individuals, do
not come into the picture. It is not necessary that each individual worker should know about the implications of the
settlement, since a recognised union, which is expected to protect the legitimate interests of the labour, enters into a
settlement in the best interests of labour. This would be the normal rule, though there may be exceptional cases where there
may be allegations of mala fides, fraud or even corruption or other inducements, or where on the face of it, the settlement
is highly unconscionable and grossly unjust.96 From the language used in the definition of a ‘settlement’, it is clear that a
settlement can be arrived at between the employer and the employees, at any time, even during the pendency of the
adjudicatory proceedings. A settlement is no less a settlement if it is arrived at after an industrial dispute is referred to the
tribunal and it does not and cannot cease to be a settlement.97

In Hindustan Lever Ltd, Savant J, of the Bombay High Court, held that a settlement, as understood by s 2(p), must
necessarily be with the union, since the dispute before the court, was not concerning either a discharge, dismissal,
retrenchment or termination of the service of a workman.98 This decision calls for some analysis as there is nothing, either
in s 2(p) or in s 18(1), to suggest that an individual workman is prohibited from entering into a settlement with the
management. That there should necessarily be a trade union in every industrial establishment, for negotiations and
settlement of issues, is equally unknown to industrial law and no enactment provides for a compulsory unionisation of
industrial establishments. On the contrary, the law permits a group of workmen and even an individual workman, to enter
into a settlement with the management, whether or not there is a union and whether or not he or they are members of any
union. Section 18(1) clearly stipulates, in terms: ‘A settlement arrived at by an agreement between the employer and
workman, otherwise than in the course of...’ The singular word ‘workman’, occurring in the above sub-section, clearly
points to the fact that an individual workman is not, in any way prevented from entering into a settlement with the
management. Sawant J relied, inter alia, on the decisions of the apex court, rendered in Ram Prasad Vishwakarma,1 and
Brooke Bond,2 in support of his decision. But, regrettably, neither of the said decisions touch upon the question that is
directly and substantially at issue in the present case, much less, lend any support to his line of reasoning.

In Ram Prasad Vishwakarma, the issue raised and answered was, ‘in an industrial dispute of a collective nature, the
individual workman could at no stage, be a party to the proceedings, which question has nothing to do with a situation
where the union has not espoused the cause and is nowhere in the picture, as here’. In Brooke Bond, the issue was: what
would be the effect if the office bearers signing the settlement, had no authorisation from the executive committee of the
union? The apex court held that in the absence of an authorisation from the executive committee, an agreement between
any office-bearer and the management, could not be called a settlement, as defined in s 2(p). It is difficult to understand
how these decisions could be considered relevant to the issues raised in Hindustan Lever, where the fact was that an
individual workmen had signed the settlements. Where the individual workman himself, signs a settlement touching upon
his own conditions of service, the law does not require him to furnish any authorisation, which is indispensable if he is
represented by a union. In the face of the unambiguous language used in s 18(1), to hold that a ‘settlement’ means ‘a
settlement arrived at, with the union’ is a gross misreading of the provisions of the Act, and amounts to rewriting the
enactment. Both the finding recorded by the tribunal and the conclusion reached by Savant J, are perverse and contrary to
the spirit of law. In striking contrast, another single judge of the same High Court, Kochar J, in another case involving the

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very same company, ie, Hindustan Lever, ruled that, where all but one field-force employees arrived at individual
settlements on identical lines, with the management, during the pendency of the dispute raised by the union on their behalf,
it was unreasonable on the part of the tribunal to proceed further with the reference, and it should make an award in terms
of the settlement between the parties.3 The learned judge rightly followed the ratio ofDN Ganguly.4 Between the two
decisions, the view taken by Kochar J is right and that of Savant J is repugnant to the provisions of the IDA, and is clearly
wrong. Sub-rule (4) of r 58 of the Industrial Disputes (Central) Rules 1957 requires that the copies of the memorandum of
settlement, arrived at otherwise than in the course of conciliation proceedings, should be sent ‘jointly’ by the parties, to the
Central Government, the Chief Labour Commissioner (Central), and the Regional Labour Commissioner and the Asst
Labour Commissioner concerned. Any settlement which does not comply with these requirements, will be no ‘settlement’
within the meaning of this provision.5A Division Bench of the Orissa High Court, on the construction of r 64(5), requiring
that the copy of the settlement shall be ‘jointly’ sent, took the view that it is a requirement in excess of the provision of s
2(p) of the Act, and therefore, cannot be held to be mandatory.6 This is the correct view of the law.

Note: For the mode and manner of arriving at a settlement in conciliation proceedings, see notes and comments under s
12(3), infra and for the binding effect of such a settlement, see notes and comments under s 18(3). (Infra)

Clause (q): STRIKE

The definition of a ‘strike’ in this clause, is the same as it was in s 2(1) of the repealed Trade Disputes Act 1929. It has
since not undergone any amendment. Chapter V deals with strikes and lockouts. Sections 10(3), 10A(4A), 22 or 23
prohibit the continuance and commencement of strikes in certain circumstances and s 24 renders the strikes commenced or
continued in contravention of these prohibitions, illegal; s 25 prohibits financial aid to illegal strikes and lockouts and s 26
provides for a penalty for illegal strikes and lockouts, s 27 prescribes the penalty for instigation of strikes and lockouts and
s 28 prescribes the penalty for giving financial aid to illegal strikes and lockouts.

Judicial Definitions

In England, various judicial definitions have been attempted by courts,7 the most accepted and precise of which is as
expounded by Hannen J, in Farrer v Close. 8 He defined ‘strikes’ as a simultaneous cessation of work on the part of the
workmen. In the United States of America, a fairly comprehensive definition has been given in Uden v Schaeffer ,9 in the
following words:

A strike is the act of quitting work by a body of workmen, for the purpose of coercing their employer to accede to some demands
they have made upon him, and which he has refused; but it is not a strike for workmen to quit work, either singly or in a body,
when they quitted without intention to return to work, whatever may be the reason that moves them so to do.10

Ordinary meaning of Strike

A concerted refusal to work on the part of men, who are accustomed to work in a particular vocational area; more shortly,
‘ceasing work or downing tools’11 seems to be the ordinary meaning of the term ‘strike’. The dictionary definitions are not
wholly in accord with one another. For instance, the Oxford dictionary defines the noun ‘strike’ as a ‘concerted cessation
of work on the part of a body of workers, for the purpose of obtaining some concession from the employer or employers’,
though in defining the verb ‘strike’, it omits any reference to the purpose; the Webster’s dictionary defines the noun
‘strike’ as ‘the act of quitting work, done by a mutual understanding by a body of workmen, as a means of enforcing
compliance with demands made on their employer; a stopping of work by workmen, in order to obtain or resist a change in
conditions of employment’. The Encyclopaedia of Social Sciences defines a ‘strike’ as a ‘concerted suspension of work by
a body of employees; usually for the purpose of adjusting an existing dispute over the terms of the labour contract’.12The
Encyclopaedia Britannica defines a strike in the labour sense, as ‘a stoppage of work by a common agreement on the part
of work-people, for the purpose of obtaining or resisting a change in the conditions of employment’.13In England, ‘strike’
was defined in the repealed Trade Disputes and Trade Union Act 1927, as a ‘cessation of work by a body of persons
employed in any trade’. According to Ludwig Teller, the word ‘strike’, in its broad significance, has reference to a dispute
between an employer and his workers, in the course of which, there is a concerted suspension of employment. He describes
four characteristics of a ‘strike’, as the term is employed in modern times, which are:

(i) an established relationship between the strikers and the person or persons against whom the strike is called;

(ii) the constituting of that relationship as one of employer and employee;

(iii) the existence of a dispute between the parties and the utilisation by the labour, of the weapon of concerted refusal to
continue to work, as the method of persuading or coercing compliance with the workmen’s demand; and

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(iv) the contention advanced by workers that, although work ceases, the employment relation is deemed to continue, albeit in
a state of a belligerent suspension.14

In Austrialia, some of the state Parliaments have passed legislations which define the word ‘strike’. All such statutory
definitions are of the extensive type and save in Queensland, do not exclude the ordinary meaning of the word ‘strike’. All
these definitions have in common, the notion of quitting, cessation or discontinuance of work in combination, and further,
the idea that such a cessation must be for the purpose of wresting concessions from an employer, while in some quarters,
there is the insistence that the demands must relate to the conditions of employment, a requirement which would probably
exclude many strikes for organisational purposes. But it is clearly agreed on all sides, that the cessation of work must be
used as a weapon for the furtherance of some demand.15

Ingredients of Strike

The definition of a strike in s 2(q), is exhaustive. The essential ingredients of the definition may be treated under the
following heads:

(a) Industry

‘Any Industry’—The words ‘employed in any industry’ postulate that there should be an ‘industry’ within the meaning of s
2(j), in which the concerned workmen are employed. In other words, unless the establishment in which the striking persons
are employed is an ‘industry’, even if the other ingredients of the definition are satisfied, it would not be an industrial
strike within the meaning of s 2(q).

(b) Cessation of Work or Refusal to Work

(i) ‘Cessation of Work Acting in Combination’

The expressions ‘acting in combination’, ‘concerted refusal’ or ‘refusal under a common understanding’, though appear to
be distinct, the line of demarcation between them is not quite clear and occasionally, they overlap and may be
compendiously described as ‘concerted activities’. Likewise, the expressions ‘cessation of work’, ‘refusal to continue to
work’ or ‘to accept employment’, though not synonyms, too overlap. The notion of quitting, cessation or discontinuance of
work in combination, is an essential requirement of the definition of a strike. Thus, a mere cessation of work will not come
within the purview of the definition of a ‘strike’, unless it can further be shown that such cessation of work was a
concerted action, for the purpose of enforcing an industrial demand.16 A combination means an agreement or a concert. In
order to establish such concert, there need be no formal meetings, discussions, or even an interchange or a mutual consent
or assent, to a common purpose or a course of conduct. It may be deduced from similar acts and course of conduct. But
once it is proved that the cessation of work or refusal to work was the result of a concerted action, on the part of the
workers or of the workers acting in combination, under a common understanding, such a stoppage, even for a short period,
say for two to four hours, must fall within the definition of a ‘strike’. In other words, the fact that the duration of a strike
was for a few minutes or even for a few hours, is irrelevant.17 There is nothing in the scheme of the Act or the provisions
thereof, to show that in order to constitute a ‘strike’, the cessation or stoppage of work must be by virtue of an industrial
dispute.18 Likewise, the purpose behind the cessation of work too, would be irrelevant in determining whether the cessation
or stoppage of work would constitute a strike or not.19 It is implicit in the definition of a strike that the ‘cessation of work’
or ‘concerted refusal to work’ must be in defiance of the employer’s authority.20 A cessation of work, even while working
on paid overtime, would amount to a ‘strike’.21 But a mere presence of certain workmen in the striking crowd, in the
absence of any satisfactory proof of their having ‘ceased’ to work or ‘refused’ to work, would not amount to a ‘strike’.22
Similarly, if a workman joins certain demonstrations organised in connection with the ‘strike’, or if he takes part in the
preparation of a strike, his conduct cannot amount to taking part in the ‘strike’, as such.23 In cases where workmen go on a
‘hunger strike’, by refraining from taking food in the off-duty period, it would not be a ‘strike’ within the meaning of s
2(q). But if the ‘hunger strike’ is not simply refraining from taking food, but is also accompanied by a cessation of work by
a body of persons employed in any industry, it would clearly come within the definition of a strike.24

(ii) ‘Concerted Refusal or Refusal Under Common Understanding...to Continue to Work or Accept Employment

A concerted refusal under a common understanding of any number of employees, to continue to work or accept
employment, would constitute a strike. In Mahanga Ram, the Allahabad High Court held that where the workmen did not,
in fact, commence the work for some time after lifting their tokens and punching their cards, they were not guilty of taking
part in a strike. The court took the view that the concerned workmen had combined not with an intent to cease work, but
with a view to staging a demonstration and thus, delayed the start of work by about 15 or 30 minutes and it could not be
considered that their action amounted to a ‘strike’, as they had technically commenced their duties by lifting their tokens

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and punching their cards; hence, there was really no cessation of work.25 But admittedly there was a concerted action on
the part of the workmen, in refusing to commence work after lifting their tokens and punching their cards, with a common
understanding of staging a demonstration. The words ‘refusal to continue to work’, in the definition, clearly indicate that
work can be struck even after its commencement. An interruption of work, a concerted refusal or refusal under a common
understanding to work, or to accept employment, even for a short time, say half an hour or less, would constitute a strike,
within the meaning of s. 2(q) of the Act.26 The decision of the labour appellate tribunal, in Standard Vacuum (supra), that
the en bloc absence of the workmen, in the special circumstances of the case, was not a strike, is also not consistent with
the wording of the definition. But when the workmen refuse to do additional work, which the employer has no right, in
law, to ask them to do, it would not amount to a strike, even if such refusal is concerted or under a common
understanding.27

Illustrations of actions which amount to Strike

The cessation of work by workmen acting in combination and a refusal to work on the calendar machine of the mills.28
Staying away from work under a common understanding, as a protest to the introduction of a card system for marking
attendance for the workmen.29 A concerted refusal by coal loaders and trammers, continuously, for four days, on account
of quarrels between rival labour unions.30 A pen-down strike by the workmen of a bank.31 Stoppage of work by workmen
for two to four hours and their refusal to resume work, as a result of the refusal of the employer, to declare the forenoon of
a particular day as a holiday due to a solar eclipse.32 Stoppage of work by the workmen with a view to enforcing their
demand of the removal of the weaving master and his favourite workmen in a textile mill.33 Refusal to work by workmen
on a listed holiday, for which the management had offered a compensatory holiday in accordance with a prior agreement
between the management and the union.34 Refusal of workers to resume work on account of the sudden death of a worker,
acting in concert.35 But where two workmen were absent from duty on a particular day and there was no evidence to show
that the absence was due to concert between the two workmen and other persons, or that there was a common
understanding between them and other persons, or that they would not continue to work or there would be a refusal to
work; it was held that the absence did not constitute a strike.36

(c) Relationship of Employment

‘Persons employed’—The definition of a ‘strike’ in s 2(q), uses the expression ‘persons employed’, which means that there
should be a relationship or contract of employment between the striking employees and the industry. This also has
reference to the contract of employment mentioned in s 22 and s 23. In the contract of employment of every workman,
there is an implied term that he will work according to the rules of the concern in question.37Unless there is a contract of
employment between the striking persons and the industry, there can be no strike within the meaning of s 2(q) of the Act.

Types of Strikes

Strikes may be broadly considered under the following heads:

(i) Primary Strike

A strike in its primary use, is a weapon which is used directly against the employer with whom an industrial dispute exists.
This type of strike takes various forms, such as ‘sit-down’ or ‘stay-in’, ‘strike’, ‘tool-down’ or ‘pen-down’ strike, ‘go-
slow’, ‘boycott’, ‘picketing’ or ‘black-ban’, etc. ‘Stay-in’, ‘sit-down’, ‘tool-down’ or ‘pen-down’ strikes are some of the
names given to strikes in various circumstances. In such strikes, workmen peacefully enter the premises of the
establishment or the office, without indicating their intention to go on strike. But having thus entered the premises, they
generally stay at their places of work or sit down there. When clerical workers refuse to do their work, such refusal is
generally known as a ‘pen-down’ strike.38 Likewise, when factory workers refuse to work with their tools, such action is
known as a ‘tool-down’ strike.39 On account of the workmen staying inside the premises of the establishment, such strikes
are also known as ‘sit-down’ or ‘stay-in’ strikes. A ‘sit-down’ strike is defined as occurring whenever a group of
employees or others, interested in obtaining a certain objective in a particular business, forcibly take over the possession of
the property of such business, establish themselves within the plant, stop its production and refuse access to the owners or
to others desiring to work. The ‘sit-down’ or ‘stay-in’ strike can be more accurately defined as a strike in the ‘traditional
sense’, to which is added the element of trespass of the strikers upon the property of the employer.40 In other words, every
‘sit-down’ or ‘stay-in’ strike involves a tort of trespass. Such a strike, therefore, constitutes a civil conspiracy, for the
employees have a right to enter and remain on the employer’s premises only for the purpose of their work (as invitees at
common law), or for other purposes, as the employer may allow, for example, recreation. In such cases, they are usually
licensees at common law.

(ii) Secondary Strike

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A ‘secondary strike’ has been defined by Ludwig Teller as a ‘coercive measure adopted by workers, against an employer,
connected by product or employment, with alleged unfair labour conditions or practices.41. In such a strike, the pressure is
applied not against the primary employer, with whom the industrial dispute exists, but against a person who has some sort
of trade relations with him. The employees of the secondary employer threaten to strike, until the secondary employer
refuses to deal with the primary employer. Frequently, the threat of a strike is enough, as the secondary employer himself
has no direct dispute with the union and will naturally wish to preserve the industrial peace of his concern.

(iii) Sympathetic Strike

A ‘sympathetic strike’ is one called for the purpose of indirectly aiding others, the striking employees having no demand or
grievances of their own and the strike having no direct relation to the advancement of the interest of the strikers.42 Such a
strike is an unjustifiable invasion of the rights of the employers and is, therefore, unlawful. In USA, a union calling a
sympathetic strike is liable in damages, for the injuries thereby inflicted and the strike may be enjoined. It would appear
that the extreme view of some authorities on the right to strike, is not dependent upon the motive; a sympathetic strike is
not to be condemned as unlawful.43

(iv) Go-Slow

‘Go-slow’ is not like an ordinary strike, which has been recognised as a lawful weapon under certain circumstances and is
controlled by the provisions of law. ‘Go-slow’ has, on the other hand, been made a misconduct under the Model Standing
Orders appended to the Industrial Employment (Standing Orders) Act 1946. Workers are under an obligation to their
employers, to procure average production, and if they deliberately refuse to give that average, they must be held to be
guilty of the misconduct of ‘go-slow’.44The fact that the workmen are piece-raters does not make a ‘go-slow’ policy any
the less unlawful. A behest by some workmen, to others, to adopt a ‘go-slow’ policy, would be an act of serious
misconduct.45 The law relating to various aspects of ‘go-slow’, has been elaborately stated by the Supreme Court in the
following two cases. In Bharat Sugar Mills, certain workmen indulged in a ‘go-slow’. The employer company, on the basis
of a domestic inquiry, decided to dismiss 21 workmen. But the tribunal held that the domestic inquiry was not proper and
the employer was guilty of a mala fide conduct and victimisation, and except in the case of one workman, the others were
not guilty of a deliberate ‘go-slow’. In appeal against the order of the tribunal, the Supreme Court held that the evidence
produced before the tribunal clearly established that 13 out of 20 workmen were ‘guilty of a deliberate ‘go-slow’, whose
dismissal was justified. Speaking for the Supreme Court, Das Gupta J, stated the law in the following words:

‘Go-slow’, which is a picturesque description of a deliberate delaying of production, by workmen pretending to be engaged in the
factory, is one of the most pernicious practices that discontented or disgruntled workmen sometimes resort to. It would not be far
wrong to call this dishonest. For, while thus delaying production and thereby reducing the output, the workmen claim to have
remained employed and thus to be entitled to full wages. Apart from this also, ‘go-slow’ is likely to be much more harmful than a
total cessation of work by strike. For, while during a strike, much of the machinery can be fully turned off, during the ‘go-slow’,
the machinery is kept going on a reduced speed, which is often extremely damaging to the machinery parts. For all these reasons,
‘go-slow’ has always been considered a serious type of misconduct. 46

Then, in SU Motors, the company did not pay the workers, the wages for the entire month of July 1984, because the
workers had indulged in a ‘go-slow’, and consequently, the production for the month had been negligible. As a
consequence, the company was compelled declare a lockout with effect from 14 August 1984. On a complaint lodged by
the union under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act 1971
(MRTU & PULP Act 1971), the industrial court held that the company had committed an ‘unfair labour practice’ by not
paying the full monthly wages to the workmen for the month of July and directed the company to pay the same. In appeal
against the said order, the Supreme Court, on the admitted facts, accepted the finding recorded by the industrial court that
there had been a ‘go-slow’ resorted to by the workmen and the production had suffered during the period in question. It
also accepted the right of the employer to deduct the wages, as admittedly, the workmen had resorted to a ‘go-slow’.
However, while allowing the appeal, the court directed that the company shall not deduct more than 5 per cent of the
wages of the workmen, for the month of July 1984. In this case, the court recognised the right of the employer to treat a
‘go-slow’ as an act of misconduct, liable to a penal disciplinary action, as also the liablility of the delinquent persons, to
face the consequences, including a deduction of wages and dismissal from service. Sawant J held:

There cannot be two opinions that go-slow is a serious misconduct, being a covert and a more damaging breach of the contract of
employment. It is an insidious method of undermining discipline and at the same time, a crude device to defy the norms of work. It
has been roundly condemned as an industrial action and has not been recognised as a legitimate weapon of the workmen to redress
their grievances. In fact, the Model Standing Orders, as well as the certified Standing Orders of most of the industrial

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establishments, define it as a misconduct and provide for a disciplinary action for it. Hence, once it is proved, those guilty of it
have to face the consequences, which may include a deduction of wages and even a dismissal from service.47 (Paras 36 & 37).

But, by its very nature, the proof of go-slow, particularly when it is disputed, involves an investigation into its various
aspects, such as the nature of the process of production, the stages of production and their relative importance, the role of
the workers engaged at each stage of production, the pre-production activities and the facilities for production and the
activities of the workmen connected therewith and their effect on production, the factors bearing on the average
production, etc. The go-slow further may be indulged in by an individual workman or only some workmen, either in one
section or different sections, or in one shift or both shifts, affecting the output in varying degrees and to different extents,
depending upon the nature of the product and the productive process. Even where it is admitted, a go-slow may, in some
case, present difficulties in determining the actual or approximate loss, for it may have repercussions on the production
after the go-slow ceases, which may be difficult to estimate. The deduction of wages for a go-slow may, therefore, present
difficulties which may not be easily resoluble. When, therefore, wages are sought to be deducted for a breach of contract,
on account of a go-slow, the quantum of deduction may become a bone of contention in most of the cases, inevitably
leading to an industrial dispute to be adjudicated by an independent machinery, statutory or otherwise, as the parties may
resort to. It is necessary to emphasise this because unlike in the case of a strike, where a simple measure of a pro-rata
deduction from the wages may provide a just and fair remedy, the extent of the deduction of wages on account of a go-
slow action may, in some case, raise a complex question. The simplistic method of deducting a uniform percentage of
wages from the wages of all workmen, calculated on the basis of the percentage fall in production compared to the normal
or average production, may not always be equitable. It is, therefore, necessary that in all cases where the factum of a go-
slow and/or the extent of the loss of production on account of it, is disputed, there should be a proper inquiry on the
charges which furnish particulars of the go-slow and the loss of production on that account. The rules of natural justice
require it, and whether they have been followed or not, will depend on the facts of each case.

92 Shri Ram Institute For Industrial Research v PO, LC (1978) 37 FLR 1 (DB), per Deshpande J.
93 Kamleshkumar R Mehta v PO, CGIT (1980) 1 LLJ 336 (Bom) (DB) 1979 (39) FLR 329 per Lentin J.
94 S Palani v Indian Bank (1980) 1 LLJ 187 [LNIND 1979 MAD 297] (Mad), per Varadarajan J.
95 Raghavachari v Madras P & L Assn (1980) 1 LLJ 273 [LNIND 1979 MAD 113] (Mad) (DB), per Ramaprasada Rao CJ.
96 Santosh Gupta v State Bank of Patiala (1980) 2 LLJ 72 [LNIND 1980 SC 214] (SC) : AIR 1980 SC 1219 [LNIND 1980 SC 214]:
1980 Lab IC 687 per Chinnappa Reddy J.
1 Surendra Kumar Verma v CGIT (1981) 1 LLJ 386 [LNIND 1980 SC 403], 388 (SC) : AIR 1981 SC 422 [LNIND 1980 SC 403]:
1980 Lab IC 1292 per Chinnappa Reddy J.
2 Mohan Lal v Mgmt of Bharat Electronics Ltd 1981 Lab IC 806 [LNIND 1981 SC 244] (SC), per Desai J.
3 L Robert D’ Souza v Executive Engineer, Southern Rly (1982) 1 LLJ 330 [LNIND 1982 SC 47], 333-34 (SC) : AIR 1982 SC 854
[LNIND 1982 SC 47]: 1982 KLJ 164 per Desai J.
4 Gammon India Ltd v Niranjan Dass 1983 Lab IC 1865 [LNIND 1983 SC 361], 1867 (SC), per Desai J.
5 Mgmt of KSRTC v M Boraiah (1984) 1 LLJ 110 [LNIND 1983 SC 326], 115 (SC) : AIR 1983 SC 1320 [LNIND 1983 SC 438]:
1984 (48) FLR 89 per Ranganath Misra J.
6 Mattulal v Radhe Lal AIR 1974 SC 1596 [LNIND 1974 SC 161], 1602 : (1975) 1 SCR 127 [LNIND 1974 SC 161] per Bhagawati
J.
7 Punjab LDRC v PO, LC (1990) 2 LLJ 70 [LNIND 1990 SC 310], 90 (SC) : 1991 (61) FLR 73 : (1990) 3 SCC 682 [LNIND 1990
SC 310] per Saikia J.
8 [1944] KB 718.
9 [1972] AC 1136.
10 1978 Lab IC 467 [LNIND 1963 SC 89] (SC), per Krishna Iyer J.
11 Kamleshkumar R Mehta v PO, CGIT (1980) 1 LLJ 336 (Bom) (DB) 1979 Mh LJ 874 per Lentin J.
12 Surendra Kumar Verma v CGIT-cum-LC (1981) 1 LLJ 386 [LNIND 1980 SC 403], 388 (SC) : AIR 1981 SC 422 [LNIND 1980
SC 403]: (1980) 4 SCC per Pathak J.

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13 Cyrile Grunfeld, The Law of Redundancy, 1980, 2nd ed, p 172.

14 Ins by Amending Act 49 of 1984, brought into force wef 18 August 1984.
15 English Electric Co of India Ltd v IT (1987) 1 LLJ 141, 155, 158 (Mad) (DB) : AIR 1958 SC 130 [LNIND 1957 SC 105] per
Chandurkar CJ.
16 Indian Iron & Steel Co Ltd v Workmen (1958) 1 LLJ 260 [LNIND 1957 SC 105], 268 (SC), per SK Das J.
17 1977 Lab IC 1695 [LNIND 1977 SC 280] (SC), per Goswami J.
18 (1982) 1 LLJ 330 [LNIND 1982 SC 47], 333-34 (SC), per Desai J.
19 Madhabananda Jena v Orissa SEB (1990) 1 LLJ 463 [LNIND 1989 ORI 27] (Ori) (DB), per DP Mohapatra J.
20 HD Singh v Reserve Bank of India 1985 Lab IC 1733, 1735 (SC), per Khalid J.
21 Syed Bin Ali v Supdtg Engineer, APSEB 1986 Lab IC 848 (AP), per Jeevan Reedy J.
22 Naresh Chandra Das v Seventh IT 1982 Lab IC 579 (Cal), per GN Ray J.
23 Dabur Pvt Ltd v State of West Bengal 1978 Lab IC 1581 (Cal) (DB), per Anil K Sen J.
24 Factory Manager, CIMM Co Ltd v Naresh C Saxena 1985 Lab IC 941, 945 (MP) (DB), per CP Sen J.
25 Gour Hari Patra v PO, ITL 1976 Lab IC 999, 1003 (Ori) (DB), per RN Misra J.
26 Binny Ltd v PO, LC (1976) 1 LLJ 237, 243 (Kant), per Rama Jois J.
27 Bada Sahab Devgonda Patil v MD, SPSS Kharkhana Ltd (1988) 2 LLJ 413 [LNIND 1987 BOM 491] (Bom) (DB) : 1988 (90) Bom
LR 131 : 1988 Mh LJ 370.
28 English Electric Co of India Ltd v IT (1987) 1 LLJ 141, 154 (Mad) (DB), per Chandurkar CJ.
29 Ramachandra Vithuji Kothare v IC (1986) 1 LLJ 363, 367 (Bom) : 1985 Mh LJ 709 per Dhabe J.
30 Chandulal v Mgmt of PAW Airways (1985) 2 LLJ 181 [LNIND 1985 SC 138]-82 (SC) : AIR 1985 SC 1128 [LNIND 1985 SC
138]: 1985 Lab IC 1225 per Ranganath Misra J.
31 Maharashtra STTC Ltd v Vasudev V Joshi 1990 Lab IC 1004, 1009 (Bom), per Sujata Manohar J.
32 Punjab Land Development and Reclamation Corpn Ltd v LC (1990) 2 LLJ 70 [LNIND 1990 SC 310] (SC), (1990) 3 SCC 682
[LNIND 1990 SC 310] per Saika J.
33 Ibid, 88, 89.
34 Anakapalle CA & IS Ltd v Workmen (1962) 2 LLJ 621 [LNIND 1962 SC 345] (SC) : AIR 1963 SC 1489 [LNIND 1962 SC 345]:
(1962) II LLJ 621SC per Gajendragadkar, J.
35 HM Seervai, Constitutional Law of India, 1996, Vol 3, 3rd ed, p 1983.
36 Kamaleshkumar Mehta v CGIT (1980) 1 LLJ 336 (Bom) : [1980] I LLJ 336 Bom : 1979 Mh LJ 874 per Lentin J.
37 Buckingham and Carnatic Co Ltd v Venkatayya (1963) 2 LLJ 638 [LNIND 1963 SC 177] (SC) : AIR 1964 SC 1272 [LNIND 1963
SC 177] per Gajendragadkar J.
38 Mgmt of Guest Keen Williams v PO, Labour Court (1992) 1 LLJ 846, 866 (Kant), per Mohan CJ.
39 MD, PSS Karkhana v Babasaheb Devgonda Patil 1988 Lab IC 288 [LNIND 1987 BOM 213] (Bom), per Puranik J.
40 National Engineering Industries Ltd v Hanuman (1967) 2 LLJ 883 [LNIND 1967 SC 213] (SC) : AIR 1968 SC 33 [LNIND 1967
SC 212].
41 Balasaheb D Patil v MD, PSS Karkhana (1988) 2 LLJ 413 [LNIND 1987 BOM 491] (Bom) (DB) : 1988 (90) Bom LR 131 : 1988
Mh LJ 370.
42 EM Rao, Industrial Jurisprudence: A Critical Commentary, 2015, 2nd ed, pp 714-5.
43 Shri Bhagawan v Ram Chand AIR 1965 SC 1767 [LNIND 1965 SC 64]-68: [1965] 3 SCR 218 [LNIND 1965 SC 64].
44 L Robert D’Souza v Exec Enggr, Southern Railway (1982) 1 LLJ 30 (SC), per Desai J.
45 CA No 1898 of 1982, p 73, para 5.
46 Ibid, p 95, para 83.
47 CA No 8456 of 1983.
48 EM Rao, op cit, pp 766-7.
49 State of Haryana v Om Prakash (1998) 8 SCC 733.

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50 Om Prakash v PO, IT-cum-LC (1999) 1 LLN 579 (P&H) (DB) : (1998) 2 LLJ 542 P&H, per Gupta J.
51 State Bank of India v N Sundaramony (1976) 1 LLJ 478 [LNIND 1976 SC 13] (SC) : AIR 1976 SC 1111 [LNIND 1976 SC 13] per
Krishna Iyer J.
52 Punjab Land Development and Reclamation Corpn Ltd v LC (1990) 2 LLJ 70 [LNIND 1990 SC 310] (SC) : (1990) 3 SCC 682
[LNIND 1990 SC 310] per Saika J.
53 Mgmt of Karnataka SRTC v M Boraiah (1984) 2 LLJ 110 (SC), per Misra J.
54 Indian Airlines v Sebastian (1994) 2 LLJ (Suppl) 498(Ker).
55 Gammon India Ltd v Niranjan Das (1984) 1 LLJ 233 [LNIND 1983 SC 361] (SC) : AIR 1984 SC 500 [LNIND 1983 SC 361] per
Desai J.
56 Pipraich Sugar Mills Ltd v Pipraich Sugar Mills Mazdoor Union (1957) 1 LLJ 235 [LNIND 1956 SC 84] (SC) : AIR 1975 SC 95
per SK Das J.
57 State Transport Controller v IT (1965) 2 LLJ 376 (Ori) (DB).
58 Lachman Das v Indian Express Newspapers (B) Pvt Ltd 1977 Lab IC 823 (Del) (DB), per Deshpande J.
59 State Bank of India v Workmen of State Bank of India (1990) 2 LLJ 586 [LNIND 1990 SC 458], 594 (SC) : AIR 1990 SC 2034
[LNIND 1990 SC 458] per Sawant J.
60 Employers, Anand Cinema v Mohan Tiwari 1993 Lab IC 651, 661 (MP) (DB), per Dharmadhikari J.
61 Jagdish Chandra Vyas v Rajasthan SRTC (1995) 2 LLJ 204 -05 (Raj) : 1995 (71) FLR 556 per Kokje J.
62 Mgmt of Indian Iron and Steel Co Ltd v Prahlad Singh : AIR 2001 SC 69 [LNIND 2000 SC 1424]: (2001) 1 SCC 424 [LNIND
2000 SC 1424] : (2000) 2 LLJ 1653 [LNIND 2000 SC 1424] per Patil J.
63 Scooters India Ltd v M Mohammad Yaqub (2001) 1 LLN 67 (SC), per Variava J.
64 Muththambaranam v PO, Le (2001) 4 LLN 894 (Mad), per Dinakaran J.
65 PS Desikachari v ‘Mail’ (1961) 2 LLJ 771, 777 (Mad) (DE), per S Ramachandra Ayyar Offg CJ.
66 Bengal Nagpur Cotton Mills Ltd v J Bastion (1960) 1 LLJ 501 [LNIND 1960 SC 58], 503 (SC) : AIR 1960 SC 1110 [LNIND 1960
SC 58] per Gajendragadkar J.
67 National Engineering Industries Ltd v Hanuman (1967) 2 LLJ 883 [LNIND 1967 SC 213], 887 (SC) : AIR 1968 SC 33 [LNIND
1967 SC 212] per Wanchoo J.
68 JK Cotton Spg & Wvg Mills Co Ltd v State of UP 1990 Lab IC 1511, 1517 (SC), per Ahmadi J.
69 Rishi Pal Singh v Labour Court, (2003) 4 LLJ 35 (UP), per Rakesh Tiwari J.
70 Hindustan Level Ltd v Employees Union (1999) 1 LLN 930, 945 (Bom), per Savant J.
71 New Haven Steel Ball Corporation (P) Ltd v RK Yadav (1999) 1 LLN 953, 956 (Bom), per Shah J.
72 Narendra S Solanki v R&F Production (2000) 3 LLN 446 (Raj), per Palshikar, J.
73 Roxy Industrial Corpn v State of Punjab (2001) 3 LLN (P&H), per Sudhalkar J.
74 Balak Ram v PO, Labour Court (2002) 2 LLN 246 (P&H) (DB), per Gill J.
75 Gyanendra Sahay v Tata Iron & Steel Co Ltd AIR 2006 SC 2795 [LNIND 2006 SC 509]: (2006) 5 SCC 759 [LNIND 2006 SC
509] per Lakshmanan J.
76 Fibre Foam Pvt Ltd v K Kannan Nair 1979 Lab IC 252 (Ker), per Namboodiripad J.
77 Binoy Kumar Chatterjee v Jugantar Ltd (1983) 2 LLJ 8 [LNIND 1983 SC 103] (SC) : AIR 1983 SC 865 [LNIND 1983 SC 103]
per Pathak J.
78 Brought into force wef 18 August 1984.
79 Mukhtyar Singh v Food Corpn of India (1994) 2 LLJ 488 [LNIND 1992 MP 7], 495-96 (MP) (DB) (1994) 11 LLJ 488 MP.
80 Ram Prasad v State of Rajasthan 1992 Lab IC 2139, 2148 (Raj) (DB), per Chopra J.
81 Terminated FTTLICEW Assn v LIC of India (1993) 1 LLJ 1040, 1062 (Mad) (DB), per Srinivasan J.
82 Arun Kumar v Union of India 1986 Lab IC 251 -52 (Pat), per Lalit Mohan Sharma J.
83 Pratap Kumar Patnaik v MD, OSRTC 1991 Lab IC 954, 956 (Ori) (DB), per Gopalaswamy J.
84 CM Venugopal v LIC of India (1994) 1 LLJ 597 [LNIND 1994 SC 135] (SC) : AIR 1994 SC 1343 [LNIND 1994 SC 135] per NP
Singh J.

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85 Morinda Co-op Sugar Mills Ltd v Ram Kishan 1996 Lab IC 221 (SC), per Ramaswamy J.
86 CMD, Orissa RTC Ltd v Ramesh Chandra Gouda (1994) 2 LLJ 1127 [LNIND 1995 SC 106]-29 (Ori) (DB): 78 (1994) CLT 639
per Rath J.
87 Shankariah v KSRTC (1986) 1 LLJ 195 -96 (Kant) : 1985 (2) Kav LJ 94 per Rama Jois J.
88 SGovindaraju v KSRTC (1986) 2 LLJ 351 [LNIND 1986 SC 125] (SC) : AIR 1986 SC 1680 [LNIND 1986 SC 125] per KN Singh
J.
89 Nath Shukla v Allahabad University 1987 Lab IC 1607 (All) (DB), per Sahai J.
90 Dilip H Shrike v Zilla Parishad 1990 Lab IC 100, 103 (Bom), per Patel J.
91 Balbir Singh v Kurukshetra CC Bank Ltd (1990) 1 LLJ 443 [LNIND 1989 PNH 65], 445 (P&H); per A Chaudhary J.
92 JJ Shrimali v DDO Mehsana 1989 Lab IC 689, 697 (Guj) (DB), per Ahmadi J.
93 Chakradhar Tripathy v State of Orissa 1992 Lab IC 1813 (Ori) (DB), per Padhi J.
94 Madhya Pradesh BK Sangh v Syndicate Bank 1996 Lab IC 1161 [LNIND 1995 MP 195], 1165-66 (MP), per Doabia J.
95 Bharat Heavy Electricals Ltd v RV Krishnarao 1989 Lab IC 1914, 1918 (Guj) (DB), per Majmudar J.
96 State Bank of India v Workmen (1959) 2 LLJ 205 [LNIND 1959 SC 113], 220 (Be), per SK Das J.
1 Bharat Heavy Electricals Ltd v RV Krishnarao 1989 Lab IC 1914, 1918 (Guj) (DB), per Majumdar J.
2 Krishi Utpadan Mandi Samiti v IT (II), UP 1997 Lab IC 3112, 3115 (All), per Trivedi J.
3 West Bengal SEB v DB Ghosh (1985) 1 LLJ 315, 373 (SC), per Chinnappa Reddy J.
4 Central Inland Water Tpt Corpn Ltd v BN Ganguli (1986) 2 LLJ 171 [LNIND 1986 SC 112] (SC) : AIR SC 1571 per Madan J.
5 OP Bhandari v ITDC Ltd (1986) 2 LLJ 509 [LNIND 1986 SC 353], 511-12 (SC) : AIR 1987 SC 1111 per Thakkar J.
6 Ibid, 512.
7 Delhi Transport Corpn v DTC Mazdoor Congress (1991) 1 LLJ 395 [LNIND 1990 SC 489] (SC) : AIR 1991 SC 101 [LNIND
1990 SC 824]: 1991 Lab IC 91 per Ray J.
8 Director, IMD v Pushpa Srivastava (1993) 1 LLJ 190 [LNIND 1992 SC 474] (193-94) (SC) : AIR 1992 SC 2070 [LNIND 1992
SC 474] per Mohan J.
9 M Venugopal v DM, LIC of India (1994) 1 LLJ 597 [LNIND 1994 SC 135] (600-01) (SC) : AIR 1994 SC 1343 [LNIND 1994 SC
135] per Singh J.
10 Allahabad Bank v Prem Singh (1997) 3 LLN 269 (SC).
11 Uptron India Ltd v Shammi Bhan (1998) 2 LLN 959, 965 (SC).
12 Birla VXL Ltd v State of Punjab (1999) 1 LLJ 220 [LNIND 1998 SC 485] (SC) : AIR 1999 SC 561 [LNIND 1998 SC 485].
13 Executive Engineer CPWD v MP Kolharkar (2000) 2 LLJ 1410 (SC).
14 Vice-Chancellor, Kurukshetra University v PO, LC (2001) 4 LLN 1148 (P&H), per Nijjar J.
15 MP Electricity Board v Dinesh Kumar (2001) 2 LLJ 423 [LNIND 2001 SC 787] (SC) : 2001 (90) FLR 873.
16 Nareshkumar Manilal Parmar v ONGC Ltd (2001) 2 LLJ 919 (Guj) (DB) : 2001 (90) FLR 28.
17 Haryana State FCCW Store Ltd v Ram Niwas (2002) 2 LLJ 1153 [LNIND 2002 SC 404] (SC), per Mohapatra J.
18 Saudi Arabian Airlines v Ashok M Panchal (2003) 4 LLJ 107 [LNIND 2002 BOM 845] (Bom), per Kochar J.
19 MD, Karnataka Handloom DC Ltd v M L Raval AIR 2007 SC 631 [LNIND 2006 SC 979]: (2006) 13 SCC 15 [LNIND 2006 SC
979] per Lakshmanan J.
20 Punjab State Electricity Board v Darbara Singh AIR 2006 SC 387 [LNIND 2005 SC 908], per Pasayat J.
21 Punjab State Electricity Board v SK Puri AIR 2007 SC (supp) 647, per Pasayat J.
22 Manik v State of Maharashtra (2010) 3 LLJ 781 (Bom).
23 Mgm., Apparel Export Promotion Council v Surya Prakash (2011) 3 LLJ 335 (Del) (DB) : 178 (2011) DLT 624.
24 Gujarat Water Supply & SSB v Bipinchandra N Ramanuj (2011) 1 LLJ 84 (Guj).
25 Mgmt of Bisra Stone Lime Co Ltd v Workman 1992 Lab IC 451 (Ori) (DB), per Mohanty J.
26 P Muthukrishnan v Mgmt of Central Cinema (1992) 1 LLJ 519, 521 (Mad), per D Raju J.
27 Marmeswar Das v PO, LC 1984 Lab IC 837, 840 (Gau) (DB), per Hansaria J.

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28 Anand Bihari v Rajasthan State Transport Corpn 1991 Lab IC 494, 498 (SC), per Sawant J.
29 Ibid.
30 Rameshwar Dass v State of Haryana (1995) 2 LLJ 716, 717 (SC) : (1995) 3 SCC 285 per NP Singh J.
31 Match and Plywood Mazdoor Sabha v Wood Works 1984 Lab IC 1375, 1377 (Ker), per Khader J.
32 Burrakur Coal Co Ltd v Azimuddin Ashraff (1960) 2 LLJ 434, 438 (Pat) (DB) : AIR 1960 Pat 554 per Kanhaiya Singh J.
33 Madurai Mills Co Ltd v Meenakshi Ammal (1963) 1 LLJ 1,4 (Mad), per Jagadisan J.
34 Iqbal Narain Saxena v PO, LC 1982 Lab IC 79 (All) (DB), per TS Misra J.
35 Lalit Mohan Puri v Pure Drinks (ND) Ltd (1992) 2 LLJ 439 [LNIND 1991 DEL 561] (Del) (DB) : 46 (1991) DLT 118 per Wadhwa
J.
36 Workmen of Bangalore WC&S Mills Co Ltd v Mgmt (1962) 1 LLJ 213 [LNIND 1962 SC 30], 217 (SC), per Sarkar J.
37 Peirce Leslie & Co Ltd v Rama Moily (1965) 2 LLJ 41, 43 (Mys), per Somnath Ayyar J (obiter).
38 Burrakur Coal Co Ltd v Azimuddin Ashraff (1960) 2 LLJ 434 (Pat) (DB) : AIR 1960 Pat 554 per Kanhaiya Singh J.
39 Madurai Mills Co Ltd v Meenakshi Ammal (1963) 1 LLJ 1, 4 (Mad), per Jagadisan J.
40 Raghavachari v Madras P&L Assn 1980 Lab IC 116, 117 (Mad) (DB), per Ramaprasada Rao J.
41 Marmeswar Das v PO, LC 1984 Lab IC 837, 840 (Gau) (DB), per Hansaria J.
42 Imperial Tobacco Co of India v S Ethiraj (1954) 2 LLJ 637 (LAT).
43 Match and Plywood Mazdoor Sabha v Star Wood Works 1984 Lab IC 1375, 1377 (Ker), per Kader J.
44 Mgmt of DATC Ltd v PO, First Addl LC (2002) 3 LLN 292 (Mad) (DB), per Shanmugam J.
45 N Kumaresan v PO (2002) 1 LLN 1026 (Mad), per Kalifulla J.
46 Sohan Lal v State of Haryana AIR 2013 SC 1767 [LNIND 2013 SC 516], per Ranjan Gogoi J.
47 Nuclear Fuel Complex v KP Reddy (2002) 2 LLN 966 (AP) (DB), per Lakshmanan CJ.
48 Tapan Kumar Jena v General Manager, Calcutta Telephones 1981 Lab IC (NOC) 68 (Cal) (DB).
49 State of Maharashtra v DR Aher (1998) 1 LLJ 716 (Bom), per Marlapalle J.
50 State of West Bengal v NG Jana (1998) 1 LLN 540 (Cal) (DB), per Mishra CJ.
51 Kanda Swami v PO, IT (2000) 3 LLN 960 (Del), per Sikri J.
52 Telecom District Manager v AA Angali (2001) 1 LLN 260 (Kant) (DB), per Bharuka J.
53 L & T Mcneil Ltd v PO, LC (2001) 3 LLN 807 (Mad), per Jayasimha Babu J.
54 Nagappa H Lamani v Mgmt of Sericulture Deptt (2002) 3 LLN 1026 (Kant), per Rangavittalachar J.
55 Rajapalayam Municipality v PO, LC (2001) 2 LLN 1112 (Mad), per Meenakumari J.
56 President, Peroorkada SC Bank Ltd v S Sheena (2002) 3 LLJ 459 (Ker) : 2002 (95) FLR 1137 per Nair J.
57 S M Nilajkar v Telecom District Manager AIR 2003 SC 3553, per Lahoti J.
58 General Manager, Haryana Roadways v Rudhan Singh AIR 2005 SC 3966 [LNIND 2005 SC 528], per Mathur J.
59 Haryana State Electronics Dev Corpn Ltd v Mamni AIR 2006 SC 2427 [LNIND 2006 SC 338], per Sinha J.
60 Haryana Tourism Corporation v Fakir Chand AIR 2003 SC 4465 [LNIND 2003 SC 875], per Balakrishnan J.
61 Municipal Council, Samrala v Sukhwinder Kaur 2006 AIR SCW 4091, per Sinha J.
62 Haryana State Agricultural Mktg Board v Subhash Chand AIR 2006 SC 1263 [LNIND 2006 SC 135], per Sinha J.
63 Kishore Chandra Samal v Div Manager , OSCDC Ltd AIR 2006 SC 3613 [LNIND 2005 SC 909], per Pasayat J.
64 Superintending Engineer PWD v Surender (2009) 2 LLJ 582 (P&H) : 2009 (120) FLR 503 per Ahluwalia J.
65 District Programme Coordinator, Mahila Samakhya v Abdul Kareem AIR 2009 SC 512 [LNIND 2008 SC 1874].
66 Ghaziabad Development Authority v Ashok Kumar AIR 2008 SC (Supp) 1334, per Sinha J.
67 UP Brassware Corporation Ltd v Uday Narayan Pandey AIR 2006 SC 586 [LNIND 2005 SC 954], per Sinha J.
68 Executive Engineer, Jaipur RE Division v PO IT (2010) 1 LLJ 23 (Orr) : 108 (2009) CLT 34.
69 MP Police Housing Corporation v Sher Singh (2012) 4 LLJ 146 (MP) (DB) : 2012 (133) FLR 66.

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70 G Udayakumar v General Manager, Telecom (2012) 2 LLJ 691 (Mad) : (2012) 1 MLJ 859 [LNIND 2011 MAD 4197] per
Vasanthakumar J.
71 Bhavnagar Municipal Corporation v Salimbhai U Mansuri AIR 2013 SC 2762 [LNIND 2013 SC 655], per Radhakrishnan J.
72 Dilip Kumar Mandal v Union of India (2015) 1 LLJ 728 (Pat), per HK Srivastava J.
73 Microwave Project, Kota v Ramesh Chand AIR 2007 SC (Supp) 683, per Pasayat J.
74 HB Vinoba v MD, Hindustan Photo Films (1998) 1 LLN 744 (Mad), per Sarhasivam J.
75 Kalyani Sharp India Ltd v Labour Court (2001) 2 LLN 853 (SC).
76 Surat MNS Bank Ltd v MB Joshi (2001) 3 LLN 444 (Guj), per Rathod J.
77 Madhya Pradesh Electricity Board v DK Agarwal (2002) 3 LLN 94 (SC).
78 Mgmt of TI Diamond Chain Ltd v PO, 2nd LC (2003) 1 LLJ 198 (Mad) : 2002 (95) FLR 1091 per Rajan J.
79 Tata Consulting Engineeers v Vatsala K Nair (1998) 1 LLN 525, 527 (Bom), per Lodha J.
80 Madhya Pradesh Textbook Corpn v KK Pancholi (1998) 5 LLN (Supp), per Dharmadhikari J.
81 Exec Enginee4, YMP Division v Anant (1999) 1 LLN (Bom), per Rebello J.
82 EE Roads and Buildings v R K Bhatt (2000) 2 LLN 632 (Guj), per Srivastava J.
83 Air India Ltd v Dharmendar Kumar (2001) 1 LLN 62 (SC).
84 Navodaya Vidyalaya v KR Hemavathy (2001) 3 LLN 590 (Kant) (DB).
85 Purushottambhai R Kachhadia v State of Gujarat (2001) 3 LLN 627 (Guj), per Abichandani J.
86 Estate Officer, Haryana UDA v PO, IT (2001) 3 LLN 1139 (P&H) (DB), per Sudhalkar J.
87 Escorts Ltd v PO (1997) 3 LLN 65 (SC).
88 Birla VXL Ltd v State of Punjab (1999) 1 LLJ 220 [LNIND 1998 SC 485] (SC).
89 Allahabad Bank v Prem Singh (1997) 3 LLN 269 (SC).
90 Mukesh Kumar v Presiding Officer (2001) 4 LLN 1159 (P&H) (DB), per Sudhalkar J.
91 Gangadhar Labia v PO, LC (2002) 1 LLN 452 (Orissa) (DB), per Mohanty J.
92 Giridhar Gopal Saini v Industrial Tribunal (2002) 2 LLN 692 (Raj), per Madan J.
93 Rattan Singh v Union of India (1998) 5 LLN (Supp) (SC).
94 Morinda Coop Sugar Mills Ltd v Ram Kishan (1995) 5 SCC 653 [LNIND 1995 SC 829] : AIR 1996 SC 332 [LNIND 1995 SC
829]: (1996) 1 LLJ 870, per Ramaswamy J.
95 Tamil Nadu CSCW Union v Mgmt (1998) 1 LLJ 728 [LNIND 1997 MAD 868], 735 (Mad) (DB), per Lakshmanan J.
96 PSMPT Sangam v PS Mills Ltd 2002 (2) LLN 345 (Mad) (DB), per Sathasivam J.
97 Krishik Upaj Mandi Samithi v PO, LC (2001) 2 LLN 1093 (MP), per Jha J.
98 Krishi Upaj Mandi Samithi v PO, LC (2001) 2 LLN 1099 (MP), per Kulshreshta J.
1 Tamil Nadu CSCW Union v Mgmt (1998) 1 LLJ 728 [LNIND 1997 MAD 868], 736 (Mad) (DB), per Lakshmanan J.
2 Bhogpur Coop Sugar Mills Ltd v Harmesh Kumar AIR 2007 SC 288 : (2006) 13 SCC 28 : (2007) 1 LLJ 488 per Sinha J.
3 M armeswar Das v Presiding Officer, Labour Court 1984 Lab IC 837, 842 (Gall) (DB), per TN Singh J.
4 Life Insurance Corpn of India v Raghavendra S Kulkarni (1998) 1 LLN 56 (SC) : AIR 1998 SC 327 : (1997) 8 SCC 461 : (1998) 2
LLJ 1161.
5 High Court of Madhya Pradesh v SN Jhavar (2001) 4 LLN 1248, 1253 (SC).
6 Munshi Ram v PO, LC (2002) 2 LLN 662 (P&H), per Bali J.
7 SN Vasudevan v Bharat Fritz Werner (P) Ltd (2001) 3 LLN 361 (Kant), per Gopala Gowda J.
8 State of Punjab v Dharam Singh AIR 1968 SC 1210 [LNIND 1968 SC 28], 1212.
9 Acctt Genl, MP v BP Bhatnagar CA No 458 of 1962 (23-1-1962) (SC).
10 Muir Mills Unit of NTPC Ltd v Swayam Prakash Srivastava AIR 2007 SC 519 [LNIND 2006 SC 1070]: (2007) 1 SCC 491
[LNIND 2006 SC 1070] : (2007) 1 LLJ 801 [LNIND 2006 SC 1070] per Lakshmanan J.
11 State of Rajasthan v Lal Bahadur Yadav (2002) 3 LLN 1205 (Raj), per Chauhan J.

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12 Eranallor Service Cooperative Bank Ltd v LC (1986) 2 LLJ 492, 495 (Ker), per Radhakrishna Menon J.
13 Mithilesh Kumar Singh v State of Bihar (1995) 1 LLJ 973, 975 (Pat), per Aftab Alam J.
14 Srirangam Co-op Urban Bank Ltd v LC (1996) 2 LLJ 216 [LNIND 1996 MAD 316] (Mad) (DB), per KA Swami CJ.
15 Rajesh Kumar v State of Madhya Pradesh (1994) 2 LLJ 320, 322 (MP) (DB), per Dubey J.
16 Barsi Light Rly Co Ltd v KN Joglekar (1957) 1 LLJ 243 [LNIND 1956 SC 104], 247 (SC), per SK Das J.
17 State Bank of India v N Sunderamony (1976) 1 LLJ 478 [LNIND 1976 SC 13] (SC) : AIR 1976 SC 1111 [LNIND 1976 SC 13]:
(1976) 1 SCC 822 [LNIND 1976 SC 13], per Krishna Iyer J.
18 CVA Hydross & Son v Joseph Sanjon (1967) 1 LLJ 509, 516 (Ker), per Mathew J.
19 Lachman Das v Indian Express Newspapers (B) Ltd 1977 Lab IC 823, 825 (Del) (DB), per Deshpande J.
20 JK Iron & Steel Co Ltd v Workmen (1960) 2 LLJ 64 [LNIND 1960 SC 35], 67 (SC) : AIR 1960 SC 1288 [LNIND 1960 SC 35],
per Subba Rao J.
21 Angus Engineering Works v Hanif Mohd (1955-56) 8 FJR 605 (LAT).
22 Royal Calcutta Golf Club v Third Industrial Tribunal (1960) 1 LLJ 464, 467 (Cal), per Sinha J.
23 Workmen of Subong Tea Estate v Subong Tea Estate (1964) 1 LLJ 333 [LNIND 1963 SC 278], 338-39 (SC) : AIR 1967 SC 420
[LNIND 1963 SC 278]: [1964] 5 SCR 602 [LNIND 1963 SC 278], per Gajendragadkar J.
24 Parry & Co Ltd v PC Pal (1970) 2 LLJ 429 [LNIND 1968 SC 358], 438 (SC), per Shelat J.
25 Ghatge & Patil CE’ Union v G & P (Tpt) Pvt Ltd (1968) 1 LLJ 566 [LNIND 1967 SC 239], 570 (SC), per Hidayatullah J.
26 Parry & Co Ltd v PC Pal (1970) 2 LLJ 429 [LNIND 1968 SC 358], 438 (SC), per Shelat J.
27 CCTransport Co Ltd v IT (1978) 2 LLJ 278, 280-81 (Ker) (DB), per Gopalan Nambiyar CJ.
28 Film DE Assn v MGM (I) Ltd (1962) 2 LLJ 99 [LNIND 1961 MAD 137], 104 (Mad), per Anantanarayanan J.
29 Parry & Co Ltd v PC Lal (1970) 2 LLJ 429 [LNIND 1968 SC 358], 437-39 (SC), per Shelat J.
30 D Macropollo & Co Pvt Ltd v Employees’ Union (1958) 2 LLJ 492 [LNIND 1958 SC 87], 497 (SC), per Gajendragadkar J.
31 Royal Calcutta Golf Club v Third IT (1960) 1 LLJ 464, 467 (Cal), per Sinha J.
32 Rajeshwar Nath v Union of India 1981 Lab IC 696, 697 (Raj), per Lodha J.
33 Haji Ismail Said & Sons Pvt Ltd v Fourth IT (1966) 2 LLJ 59 [LNIND 1965 CAL 127], 69 (Cal), per Mukharji J.
34 Parry & Co Ltd v PC Pal (1970) 2 LLJ 429 [LNIND 1968 SC 358], 438 (SC), per Shelat J.
35 Rajasthan SRTC v Judge, IT 1985 Lab IC 480 (Raj).
36 Workmen of Subong Tea Estate v Subong Tea Estate (1964) 1 LLJ 333 [LNIND 1963 SC 278], 338-39 (SC) : AIR 1967 SC 420
[LNIND 1963 SC 278]: [1964] 5 SCR 602 [LNIND 1963 SC 278], per Gajendragadkar J.
37 ECP Rathinaswami v Labour Court (1964) 2 LLJ 86 [LNIND 1963 MAD 280] (Mad), per Srinivasan J.
38 Poona Mazdoor Sabha v GK Dhutia (1956) 2 LLJ 319 [LNIND 1956 BOM 105], 321 (Bom) (DB), per Chagla CJ.
39 Tata Chemicals Ltd v Workmen 1978 Lab IC 637 [LNIND 1978 SC 113] (SC), per Jaswant Singh J.
40 SJoseph v Panyam Cement and Mineral Industries (1967) 1 LLJ 10 [LNIND 1965 AP 91], 13 (AP) (DB), per Kumarayya J.
41 Rattan Singh v State of Punjab 1983 Lab IC (NOC) 39 (P&H), per Tiwatia J.
42 Bipin Bihari Sinha v Union of India 1983 Lab IC (NOC) 74 (Pat) (DB).
43 Shukla Manseta Industries Pvt Ltd v Workmen (1977) 2 LLJ 339 [LNIND 1977 SC 242], 341-42 (SC), per Goswami J.
44 General Manager, Security Paper Mill v RS Sharma 1986 Lab IC 667 [LNIND 1986 SC 39], 670 (SC), per Venkatramiah J.
45 Herbertsons Ltd v Workmen 1977 Lab IC 162 [LNIND 1976 SC 415], 168 (SC), per Goswami J.
46 Tata Engineering & Locomotive Co Ltd v Workmen (1981) 2 LLJ 429 [LNIND 1981 SC 411], 431 (SC), per Koshal J.
47 Shaw Wallace & Co Ltd v First IT 1986 Lab IC 2030, 2036 (Cal), per UC Banerjee J.
48 Mico Employees’ Assn v State of Karnataka (1987) 1 LLJ 300, 322 (Kant), per Bopanna J.
49 Mgmt Hindustan Zinc Ltd v HZ Workers Union (1988) 2 LLJ 318 (AP) (DB), per Bhaskaran CJ.
50 New Standard Engineering Co Ltd v ML Abyankan (1978) 1 LLJ 487 [LNIND 1978 SC 34], 491 (SC), per Shinghal J.
51 Herbertsons Ltd v Workmen 1977 Lab IC 162 [LNIND 1976 SC 415], 168 (SC), per Goswarni J.

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52 Gen Secy, Cochin Port Wharf Staff Assn v Chairman, Cochin Port Trust (1982) 1 LLJ 173, 177 (Ker), per Bhaskaran J.
53 Adamji M Badri v Labour Court (1981) 1 LLJ 367, 370 (Guj) (DB), per Sheth J.
54 Indian Tobacco Co Ltd v Government of WB (1971) 1 LLJ 89, 94 (Cal) (DB), per SK Mukherjee J.
55 Rasbehary Mohanty v PO, LC (1974) 2 LLJ 222, 226 (Ori) (DB), per RN Misra J.
56 Workmen of Hindustan Lever Ltd v Hindustan Lever Ltd 1984 Lab IC 276 [LNIND 1984 SC 6], 287 (SC), per Desai J.
57 Gandhidham Nagalpalika v RC Israni (1993) 1 LLJ 432, 440 (Guj) (DB), per Divecha J.
58 General Manager, Security Paper Mill v RS Sharma 1986 Lab IC 667 [LNIND 1986 SC 39], 669 (SC), per Venkatramiah J.
59 Delhi Cloth & General Mills Co Ltd v Union of India 1984 Lab IC 1323, 1326 (Del) (DB), per Chadha J.
60 Tiruchi STC Pvt Ltd v IT (1962) 1 LLJ 94 [LNIND 1961 MAD 171], 99 (Mad), per Veeraswami J.
61 BC Banik v Indian Overseas Bank 1980 Lab IC (NOC) 79 (Cal), per Sabyasachi Mukharji J.
62 Mgmt, Cooperative Store Ltd v Ved Prakash Bhambri 1989 Lab IC 289 (Del), per Bahri J.
63 Vishnu Sugar Mills Ltd v Aziz (1952) 2 LLJ 481 (LAT).
64 Bata Shoe Co Pvt Ltd v DN Ganguly (1961) 1 LLJ 303 [LNIND 1960 SC 345] (SC) : AIR 1961 SC 1158 [LNIND 1960 SC 345]:
[1961] 3 SCR 308 [LNIND 1960 SC 345], per Wanchoo J.
65 Mafatlal Engg Industries Ltd v Mafatlal Engineering Industries Employees’ Union (1992) 2 LLJ 657, 671 (Bom), per Saldanah J.
66 Krishnarajendra Mills Workers Union v ACL 1968 Lab IC 153, 157 (Mys) (DB), per Tukol J.
67 ITC Employees’ Assn v State of Karnataka (1981) 1 LLJ 431, 438 (Kant), per Boppanna J.
68 Delhi Cloth & General Mills Co Ltd v Union of India 1984 Lab IC 1323, 1327 (Del) (DB), per Chadha J.
69 Ramakrishna Industries Pvt Ltd v Workers Jothi Mills (1992) 2 LLJ 797 [LNIND 1991 MAD 609] (Mad) (DB), per Nainar
Sundaram CJ.
70 Nagercoil Electric Supply Corpn Ltd v IT (1953) 1 LLJ 208 (TC), per PK Subramanya Iyer J.
71 Praga Tools v Praga Tools Mazdoor Sabha (1975) 1 LLJ 218, 222 CAP), per Obul Reddy J.
72 V Mohanakumaran Nair v Hindustan Latex Ltd 1987 Lab IC 950, 953 (Ker), per KT Thomas J.
73 Britannia Biscuit CE Union v Asst Commr of Labour (1983) 1 LLJ 181, 190 (Mad), per Padmanabhan J.
74 Mysore Sugar CE Union v Commr of Labour (1968) 1 LLJ 491, 494 (Mys) (DB), per Somnath Ayyar J.
75 Jhagrakhan Collieries Pvt Ltd v CGAT 1975 Lab IC 137 (SC), per Sarkaria J.
76 Mico Employees’ Assn v State of Karnataka (1987) 1 LLJ 300, 322 : ILR 1986 Kar 3474 (Kant), per Bopanna J.
77 Mgmt of A LP, Hindustan Zinc Ltd v HZW Union (1988) 2 LLJ 318, 322 (AP) (DB), per Bhaskaran CJ.
78 Britannia Biscuit CE Union v Assistant Commr of Labour (1983) 1 LLJ 182, 194 (Mad), per Padmanabhan J.
79 State Bank Staff Union v SBI (1991) 1 LLJ 163 [LNIND 1990 MAD 579], 175 (Mad) (DB) : (1992) I MLJ 131, per Nainar
Sundram J.
80 New Standard Engineering Co Ltd v ML Abhyankar (1978) 1 LLJ 487 [LNIND 1978 SC 34] (SC), per Singhal J.
81 Burmah Shell Workers’ Union v State of Kerala (1960) 1 LLJ 323 [LNIND 1959 KER 297], 328 (Ker), per Joseph J.
82 General Manager, Security Paper Mill v RS Sharma 1986 Lab IC 667 [LNIND 1986 SC 39], 670 (SC), per Venkatramiah J.
83 Cooper Engineering Ltd v DM Aney 1971 Lab IC 603, 609-10 (Bom) (DB), per KK Desai J.
84 Air India Cabin Crew Assn v Air India (1981) 2 LLJ 306, 309 (Bom), per Pratap J.
85 Cement Works Karmchari Sangh v Industrial Tribunal 1971 Lab IC 143, 147-48 (Raj), per Tyagi J.
86 Hindustan Housing Factory Ltd v Hindustan Housing Factory Employees’ Union 1969 Lab IC 1450, 1458 (Del), per Tatachari J.
87 Genl Secy, National & Grindlays Bank Employees’ Union v I Kannan 1978 Lab IC 648, 653 (Mad).
88 Adil K Patel v Tata Iron and Steel Co Ltd 1994 Lab IC 2394 [LNIND 1994 BOM 96], 2399 (Bom), per Saraf J.
89 Workmen of Delhi Cloth and General Mills Co Ltd v Mgmt 1970 Lab IC 1470, 1472 (SC), per Dua J.
90 Brooke Bond India v Workmen (1981) 2 LLJ 184 [LNIND 1981 SC 298], 188 (SC) : AIR 1981 SC 1660 [LNIND 1981 SC 298]:
(1981) 3 SCC 1041, per Gupta J.
91 Workmen of Hindustan Lever Ltd v Mgmt 1984 Lab IC 276 [LNIND 1984 SC 6] (SC), per Desai J.

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92 IAAI Workers Union v IAAI (1991) Lab LR 481(Del).

93 Johnson & Johnson Ltd v Maharashtra GK Union (1997) 2 LLJ 1157 [LNIND 1996 BOM 101], 1161 (Bom) : (1996) 5 Bom CR
181 [LNIND 1996 BOM 101].
94 Rajalakshmi Mills Ltd v Workmen (1957) 2 LLJ 427 (LAT).
95 Workmen of Motor Industries Co v Motor Industries Co Ltd (1969) 2 LLJ 673 [LNIND 1969 SC 166] (SC) : AIR 1969 SC 12 80
[LNIND 1969 SC 166]: (1969) 2 SCC 13 [LNIND 1969 SC 166], per Shelat J.
96 Herbertsons Ltd v Workmen 1977 Lab IC 162 [LNIND 1976 SC 415], 165 (SC), per Goswami J.
97 Garment Cleaning Works v DM Aney (1970) 2 LLJ 195 [LNIND 1969 BOM 21] (Bom) (DB), per Patel J.
98 Hindustan Level Ltd v Employees Union (1999) 1 LLN 930, 943 (Bom), per Savant J.
1 Ram Prasad Vishwakarma, v Chairman, IT AIR 1961 SC 857 [LNIND 1960 SC 333].
2 Brooke Bond India Ltd v Workmen (1981) 2 LLN 286 (SC).
3 Hindustan Lever Ltd v HLMS (2001) 1 LLN 1095 (Bom), per Kochar J.
4 State of Bihar v DN Ganguly (1958) 2 LLJ 634 [LNIND 1958 SC 92] (SC) : AIR 1958 SC 1018 [LNIND 1958 SC 92]: [1959] 1
SCR 1191 [LNIND 1958 SC 92].
5 Jhagrakhan Collieries (P) Ltd v CGIT 1975 Lab IC 137, 140 (SC), per Sarkaria J.
6 Kalinga Jute Products (P) Ltd v PO, IT, (1980) 1 LLJ 239, 245-46 (Ori) (DB), per SK Ray CJ.
7 Halsbury’s Laws of England, 1962, 3rd ed, Vol 38, p 59.
8 [1869] LR 4 QB 602, 612, per Hannen J.
9 110 Wash 391.
10 American Jurisprudence, 1st ed, per Higgins J.
11 Australian Commonwealth Shipping Bd, v Federated Seamen’s Union 35 CLR 462, 483, per Higgins J.
12 Encyclopaedia of Social Sciences, 1934, Vol 14, p 419.
13 Encyclopaedia Britannica, 1992, Vol 21, p 470.
14 Ludwig Teller, Labor Disputes and Collective Bargaining, 1940, Vol 1, pp 236-37, s 78.
15 Skyes, Strike Law in Australia, 1960, p 44.
16 Tata Iron & Steel Co Ltd v Workmen (1967) 1 LLJ 381 (Pat) (DB), per Narasimham CJ.
17 Buckingham & Carnatic Mills v Workmen (1953) 1 LLJ 181 [LNIND 1952 SC 77], 183 (SC), per Mahajan J.
18 GD Dalyi v Goodlass Wall Ltd (1956) 1 LLJ 468, 469 (LAT).
19 Patiala Cement Co Ltd v Certain Workers (1955) 2 LLJ, 57 (LAT).
20 Standard vacuum Oil Co v MG Gunaseelan (1954) 2 LLJ 656, 651 (LAT).
21 Jessop and Co Ltd v Fifth IT 1974 Lab IC 522, 528 (Cal) (DB), per Sabyasachi Mukharji J.
22 Sitalpur Sugar Works Ltd v State of Bihar (1958) 2 LLJ 95, 99 (Pat) (DB), per Rajkishore Prasad J.
23 OK Ghosh v EX Joseph (1962) LLJ 615 (SC), per Gajendragadkar J.
24 Mgmt of Katkona Colliery, Western Coal Fields Ltd v PO, CGIT 1978 Lab IC 1531 (MP) (DB), per GP Singh J.
25 Mehnga Ram v Labour Appellate Tribunal (1957) 1 LLJ 603 [LNIND 1956 ALL 79], 614-15 (All) (DB) : AIR 1956 All 644
[LNIND 1956 ALL 79], per Kidwai J.
26 Buckingham & Carnatic Mills v Workmen (1953) 1 LLJ 181 [LNIND 1952 SC 77] (SC), per Mahajan J.
27 Northbrook Jute Co Ltd v Workmen (1960) 1 LLJ 580 [LNIND 1960 SC 87], 584 (SC), per Das Gupta J.
28 Model Mills Ltd v Dharamdas (1958) 1 LLJ 539 [LNIND 1957 SC 110], 543 (SC), per Imam J.
29 Indian Hume Pipe Co Ltd v Rashtriya Indian Hume Pipe Mazdoor Sangh (1957) 2 LLJ 67 (LAT).
30 Sirka Colliery Ltd v South Karanpura Coal Mines Workers’ Union (1951) 2 LLJ 52 (LAT).
31 Punjab National Bank Ltd v Workmen (1959) 2 LLJ 666 [LNIND 1959 SC 166], 684 (SC), per Gajendragadkar J.
32 Buckingham & Carnatic Co Ltd v Workmen (1953) 1 LLJ 181 [LNIND 1952 SC 77], 183 (SC), per Mahajan J.
33 Rashtriya Mill Mazdoor Sangh v Crown Spg and Mfg Co Ltd (1954) LAC 401(LAT).

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34 Upper India Couper Paper Mills Co Ltd v Workers (1954) 2 LLJ 347 (LAT).
35 National Textile Workers Union v Sree Meenakshi Mills (1951) 2 LLJ 516 (LAT).
36 Ram Sarup v Rex AIR 1949 All 218 [LNIND 1948 ALL 32], per Chandiramani J.
37 Ram Naresh Kumar v State of West Bengal (1958) 1 LLJ 567 [LNIND 1957 CAL 138], 570 (Cal) (DE), per Guha Ray J.
38 Punjab National Bank Ltd v Workmen (1959) 2 LLJ 666 [LNIND 1959 SC 166], 684 (SC), per Gajendragadkar J.
39 Lakshmi Devi Sugar Mills Ltd v Ram Sarup (1957) 1 LLJ 17 [LNIND 1956 SC 85], 22 (SC), per Bhagwati J.
40 Ludwig Teller, Labor Disputes and Collective Bargaining, 1940, Vol I, p 311.
41 Ibid at p 298.
42 Dorchy v Kansas 71 L Ed, 248, 261.
43 American Jurisprudence, Ist ed, s 390, pp 718-19.
44 Janab Muhammad Israil v Saxby and Farmer (India) Ltd (1956) 1 LLJ 72, 75 (LAT).
45 Ziakh v Firestone Tyre & Rubber Co Ltd (1954) 1 LLJ 281 [LNIND 1953 BOM 121] (Bom) (DB), per Chagla CJ.
46 Bharat Sugar Mills Ltd v Jai Singh (1961) 2 LLJ 644 [LNIND 1961 SC 306], 647 (SC) : [1962] 3 SCR 684 [LNIND 1961 SC 306],
per Das Gupta J.
47 SU Motors (P) Ltd v Workmen (1990) 2 LLJ 39 [LNIND 1990 SC 308], 51-54 (SC) : (1990) 4 SCC 744 [LNIND 1990 SC 308] :
[1990] 3 SCR 214 [LNIND 1990 SC 308], per Sawant J.

End of Document

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER I Preliminary

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER I Preliminary

S. 2. Definitions.—

Strike as a Weapon in the process of Collective Bargaining

On the question of right to strike work, Lord Denning MR observed:

The nature of the right of strike is such as in my view cannot be abridged or taken away, save in strict conformity with the
provisions of the statute providing for such abridgment or taking away.48

The right to strike is labour’s ultimate weapon and in the course of the century, it has emerged as the inherent right of
every worker. It is an element which is of the very essence of the principle of collective bargaining.49 In the landmark case,
the Federated Municipal and Shire Council Employees Union of Australia v Melbourne Corpn , speaking for the High
Court of Australia, Isaacs and Rich JJ stated:

Industrial warfare is no mere figure of speech. It is not the mere phrase of theorists. It is recognised by the law as the correct
description of internal conflicts in industrial matters.50

The expression ‘industrial warfare’ was adopted by Lord Loreburn LC, who described strikes and lockouts as weapons
allowed by the law.51 In the words of Gajendragadkar J:

In the struggle between the capital and labour, the weapon of strike is available to labour and is often used by it, as is the weapon
of lockout available to the employer and can be used by him.52

Thus a strike is the antithesis of a lockout. It is regarded as a powerful weapon of collective bargaining and is generally
fraught with the possibility of industrial dislocation, with all its attendant hardships and evils, the occurrence of which is
regarded as one of the powerful levers to bring about agreements. ‘Of course, a collective strike is economic pressure by
cessation of work and not exchange of pleasantries. It means embarrassing business’.53 Trade unions with a sufficient
membership strength, are able to bargain more effectively with the management than individual workmen. This bargaining
strength would be considerably reduced if it is not permitted to demonstrate by adopting agitational methods, such as
‘work to rule’, ‘go-slow’, ‘absenteeism’, ‘sit-down strike’ and ‘strike’. This right has been recognised by almost all
democratic countries.54 The idea has been succinctly expressed by Prof Mathews thus:

The strike is itself a part of the bargaining process. It tests the economic bargaining power of each side and forces each to face
squarely, the need it has for the other’s contribution. As the strike progresses, the workers’ savings disappear, the union treasury
dwindles, and management faces mounting losses. Demands are tempered, offers are extended, and compromises previously
unthinkable, become acceptable. The very economic pressure of the strike is a catalyst, which makes agreement possible. Even
when no strike occurs, it plays its part in the bargaining process, for the very prospects of the hardship which the strike will bring,
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

provides a prod to compromise. Collective bargaining is a process of reaching an agreement, and ‘strikes’ are an integral and
frequently necessary part of that process.55

Collective bargaining, for securing improvement on matters like wages, basic pay, dearness allowance, bonus, provident
fund and gratuity, leave and holidays and other terms of service or conditions of labour, is the primary object of trade
unions and when demands like these are put forward, a strike thereafter, may justifiably be resorted to, in an attempt to
induce the employer to agree to the demands or at least to open negotiations.56 Sometimes, the threat of a strike is enough
to make the employer concede to the demands of the union. In Umesh Nayak, speaking for the Supreme Court, Sawant J
stated the law in the following words:

The strike, as a weapon, was evolved by the workers as a form of direct action, during their long struggle with the employers. It is
essentially a weapon of last resort, being an abnormal aspect of employer-employee relationship and involves a withdrawal of
labour, disrupting production, services and the running of the enterprise. It is a use by the labour of their economic power, to bring
the employer to see and meet their viewpoint, over the dispute between them...The cessation or stoppage of work, whether by the
employees or by the employer, is detrimental to the production and economy and to the well being of the society as a whole. It is
for this reason that industrial legislation, while not denying the right of workmen to strike, has tried to regulate it, along with the
right of the employer to lockout and has also provided a machinery for peaceful investigation, settlement, arbitration and
adjudication of the disputes between them...The strike or lockout is not be resorted to, because the concerned party has a superior
bargaining power or the requisite economic muscle to compel the other party to accept its demand. Such indiscriminate use of
power is nothing but an assertion of the rule of ‘Might is right’. Its consequences are lawlessness, anarchy and chaos in the
economic activities which are most vital and fundamental to the survival of the society. Such action, when the legal machinery is
available to resolve the dispute, may be hard to justify. This will be particularly so when it is resorted to by the section of the
society which can well await the resolution of the dispute by the machinery provided for the same. The strike or lockout, as a
weapon, has to be used sparingly, for the redressal of urgent and pressing grievances, when no means are available or when
available, means have failed to resolve it. It has to be resorted to, to compel the other party to the dispute, to see the justness of the
demand. It is for this reason that industrial legislation, such as the Act, places additional restrictions on strikes and lockouts in
public utility services.57

No doubt, a strike is a recognised mode of agitation, to press home the demand of the workers, in the process of collective
bargaining, but a strike cannot be resorted to, to pressurise the management to accede to the demands which they cannot
get lawfully. For instance, the weapon of strike cannot be used to pressurise the management to pay an additional amount
of bonus, apart from the bonus permissible under the Payment of Bonus Act.58

Illegal Strikes

Though the right to strike is not raised to the high pedestal of a ‘fundamental right’ under the Constitution, it is recognised
as a mode of redress for resolving a grievance of the workers. The workers in a democratic state, have the right to resort to
a strike, in order to express their grievances or to make certain demands. Thus, a strike is a necessary safety valve in
industrial relations.59 Brandies J, speaking for the US Supreme Court, observed: A strike may be illegal because of its
purpose, however orderly the manner in which it is carried.60In America and England, there are certain objects which
render the strike illegal. But in India, in the field of industrial law, it is not the objects which makes the strike illegal, but it
is the breach of statutory provisions, which renders certain industrial strikes illegal. Sections 10(3) and 10 A(4A) of the ID
Act empower the appropriate government to prohibit the continuance of a strike, which may be in existence on the date of
the reference of a dispute in connection with such dispute. Section 22(1) prohibits the commencement of a strike in public
utility service industries, without complying with the requirements thereof. Section 23 prohibits the commencement of a
strike during the pendency of conciliation, adjudication and arbitration proceedings and for some time even after the
conclusion of such proceedings. It also proscribes a strike during the period of operation of the a settlement or an award, in
respect of matters covered by such settlement or award. Section 24(1) makes the strikes in contravention of these
provisions, illegal.61 Likewise, there are provisions in state statutes also, which make strikes in contravention of the
prohibitory provisions thereof, illegal.62 A strike can be illegal only when it contravenes some provision of law. It would
follow that a strike continued or commenced, without a contravention of any statutory provision, would be legal even if it
is of a violent type. For instance, in BR Singh, the strike resorted to by the workmen, in frustration and to press their
demands, without contravening any of the statutory requirements, was held to be legal. Conversely, a strike, however
orderly and peaceful, would be illegal, if it contravenes the statutory provisions.63 In Churakulam, the Supreme Court
observed that a strike contravening the provisions of s 23(a) would be illegal. But since admittedly, there were no
conciliation proceedings before the board on the day on which the factory workers went on the strike, the strike could not
come within the prohibition of s 23(a).64 An illegal strike will invite disciplinary proceedings, because it is an act of

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misconduct.65

Justified and Unjustified Strikes

In Chandramalai Estate, Das Gupta J, stated:

While on the one hand, it has to be remembered that a strike is a legitimate and sometimes, unavoidable weapon in the hands of
labour, it is equally important to remember that an indiscriminate and hasty use of this weapon should not be encouraged. It will
not be right for labour to think that for any kind of demand, a ‘strike’ can be commenced with impunity, without exhausting the
reasonable avenues available for a peaceful achievement of their objects. There may be cases where the demand is of such an
urgent and serious nature, that it would not be reasonable to expect the labour to wait after asking the government to make a
reference. In such cases, the strike, even before such a request has been made, may well be justified.66

But the justifiability of a strike has to be viewed from the standpoint of the fairness and reasonableness of the demands
made by the workmen, and not merely from the standpoint of their exhausting all the other legitimate means open to them,
for getting the demands fulfilled.67 The question of the justifiability or otherwise, of a strike, would also depend upon
whether the demands are made bona fide, for the betterment of the conditions of service of the workmen or whether they
are made frivolously or for any ulterior purpose.68 Thus, where, after the failure of conciliation efforts, the workmen could
have waited to ask the government to make a reference before starting the strike, the strike was held to be unjustified.69
Likewise, where the circumstances clearly showed that the demand of the workmen, regarding ex-gratia bonus, could not
be considered to be of an urgent and serious nature, the launching of a strike was held to be unjustified.70 On the other
hand, where the strike was not directly connected with the demand for bonus and uncontroverted evidence established that
the strike was a protest against the unreasonable attitude of the management, in boycotting the conferences held by the
Labour Minister, the strike was held to be not unjustified.71 Similarly, where the employer failed to pay bonus to the
workmen, as ordered by the Supreme Court as well as the High Court, the strike could not be held to be unjustified,
particularly so, as the strike was peaceful and the workmen did not resort to acts of violence or intimidation, nor did they
violate the civilised norms during the period of strike or earlier and the strike was immediately recalled when the issue of
the payment of bonus was finally settled.72 A strike may be justified if it is bona fide, resorted to for the betterment of the
conditions of service of the workmen. At the commencement, a strike may be both legal and justified. It may become
illegal if continued after an order under s 10(3) or s 10(4A) has been made by the ‘appropriate government’. The strike
may also become unjustified as it progresses, if the strikers resort to acts of violence and sabotage. Or else, a strike may
become unjustified on account of its being motivated by extraneous considerations, not connected with the genuine
grievances of the workmen; it also may become unjustified on account of being unduly and inordinately protracted.
Though such strikes may not be illegal, they might certainly be unjustified. The justifiability or non-justifiability of a strike
is irrelevant for determining the question of wages for the period of such strikes.

The question, whether a particular strike was justified or not, is a question of fact, which has to be judged in the light of the
facts and circumstances of each case. Furthermore, the ‘use of force or violence or acts of sabotage, resorted to by the
workmen’ during a strike, is apt to render a strike unjustified. A strike, however, cannot be said to be unjustified unless the
reasons for it are entirely perverse or irrational.73Therefore, the question, whether a ‘strike’ is justified or unjustified, has to
be examined by taking into consideration various factors, such as the service conditions of the workmen, the nature of their
demands, the cause which led to the strike, the urgency of the cause or demand, the reasons for not resorting to the dispute-
resolving machinery provided by the Act or the contract of employment or the service rules and regulations, etc. An
inquiry into these issues is essentially an inquiry into the factors which, in some cases, may require taking of oral and
documentary evidence. The appropriate forum to conduct such inquiry is industrial adjudicator. But such an inquiry cannot
be conducted by’ the High Court in its writ jurisdiction, under Art. 226 of the Constitution. In Umesh Nayak, the Supreme
Court held that the High Court had erred in recording its finding on the question of the legality and justifiability of a
‘strike’, by assuming the jurisdiction which was properly vested in the industrial adjudicator.74 However, if the findings of
the industrial adjudicator suffer from an ‘error of law apparent on the face of the record’ or is based on no evidence or is
perverse, it is liable to be interfered with, in Judicial review by the High Court in its jurisdiction under Art. 226 of the
Constitution,75 In Amalendu Gupta, the Calcutta High Court held writ court would be competent to decide the question of
justifiability of the strike.76

Illegal Strike - If can be considered as Justified

In IGN Rly, speaking for the Supreme Court, Sinha CJI stated the law thus:

The tribunal, having held that the strike was illegal, proceeded to discuss the question, whether it was justified, and came to the
conclusion that it was ‘perfectly justified’. In the first place, it is a little difficult to understand how a strike in respect of a public

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utility service, which is clearly illegal, could at the same time be characterised as ‘perfectly justified.’ These two conclusions
cannot in law, co-exist. The law has made a distinction between a strike which is illegal and one which is not, but it has not made
any distinction between an illegal strike which may be said to be justifiable and one which is not justifiable. This distinction is not
warranted by the Act, and is wholly misconceived, specially in the case of employees in a public utility service. Every one
participating in an illegal strike, is liable to be dealt with departmentally, of course, subject to the action of the department being
questioned before an industrial tribunal, but it is not permissible to characterise an illegal strike as justifiable.77

Referring to this statement of law, in Gujarat Steel Tubes, Krishna Iyer J, observed:

This court did observe that if a strike is illegal, it cannot be called ‘perfectly justified’ and glossed that ‘between the perfectly
justified and unjustified strike, the neighborhood is distant’, and then, he inferred that, ‘mere illegality of the strike does not, per se,
spell unjustifiability.78

From a cursory glance of the passage cited above, it is obvious that the words ‘perfectly justified’, being put in quotes,
refer to the holding of the tribunal. Then there is the comment of the court that it was difficult to understand as to how a
strike which was illegal, could at the same time, be characterised as ‘perfectly justified’ by the tribunal, as these two
conclusions are irreconcilable in law. This is followed by the opinion of the court that the law ‘has not made any
distinction between an illegal strike which may be said to be justifiable and one which is not justifiable. This distinction is
not warranted by the Act and is wholly misconceived...It is not permissible to characterise an illegal strike as justifiable’. It
is clear that while expressing its opinion, the court has not used the word ‘perfectly’ to qualify the word ‘justifiable’, as
observed by Iyer J, in Gujarat Steel Tubes. He has, therefore, misread the holding of the court in IGN Rly., and his
conclusion is, therefore, unwarranted. For fortifying his conclusion, he further relied on Crompton Greaves, and observed
that in that case, ‘this court held that even if a strike is illegal, it cannot be castigated as unjustified, unless the reasons for it
are entirely perverse and unreasonable - an aspect which has to be decided on the facts and circumstances of each case’.
But in Crompton Greaves, there is nothing to support this observation or conclusion. The relevant passage reads:

It is well-settled that in order to entitle the workmen to wages for the period of strike, the strike should be legal as well as justified.
A strike is legal if it does not violate any provision of the statute. Again, a strike cannot be said to be unjustified, unless the reasons
for it are entirely perverse or unreasonable. Whether a particular strike was justified or not, is a question of fact, which has to be
judged in the light of the facts and circumstances of each case.79

That case dealt with the question of payment of wages to the workmen for the period of strike and lays down that for being
entitled to wages for the period of the strike, the strike should have been ‘legal as well as justified’. Then, it further points
out that a strike is legal ‘if it does not violate any provision of the statute’ and it cannot be said ‘to be unjustified, unless the
reasons for it are entirely perverse or unreasonable’. The clear legal position, as established by the IGN Rly and Crompton
Greaves cases, is that if a strike is illegal, it is not permissible to characterise it as justifiable. In other words, a strike which
is illegal (being violative of the statutory provisions), cannot be justified. But even if a strike is legal, it has further to be
seen whether it is justified or unjustified. The question of justifiability or unjustifiability would depend upon the facts and
circumstances of each case. Therefore, there is no warrant for the inference from these two decisions, that a ‘mere illegality
of a strike does not, per se, spell unjustifiability. Even if the strike is legal, it cannot be castigated as unjustified. The
question of the legality or illegality of a strike is relevant in the context of disciplinary action, because going on an illegal
strike is generally made an act of misconduct under the Standing Orders. As observed in IGN Rly, in this connection, the
only question of any practical importance, that may arise in the case of an illegal strike, would be the kind or quantum of
punishment which has to be modulated in accordance with the facts and circumstances of each case. The justifiability or
unjustifiability of a legal strike is relevant in the context of the wages payable to the workmen for the period of the strike.
In Umesh Nayak,80 a Constitution Bench of the court referred to and relied on the holding in the IGN Rly and did not refer
to the obiter observations of the court in the Gujarat Steel Tubes case.

Effect of Strike on Contract of Employment

The sui-generis nature of striking employees or the employees whose work has ceased in consequence of a lockout, is now
well recognised in law, ie, ‘although the work ceases, the employment relation is deemed to continue, albeit in a state of a
belligerent suspension’.81 In Iron Moulders, the sui-generis nature was cited with approval:

Neither strike, nor lockout completely terminates, when this is its purpose, the relationship between the parties. The employees
who remain to take part in the strike or whether the lockout do so that they may be ready to go to work again on terms to which

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they shall agree - the employer remaining ready to take them back on terms to which he shall agree. Manifestly then, pending a
strike or a lockout, and so to those who have not finally and in good faith, abandoned it, a relationship exists between employer and
employee, that is neither that of the general nature of employer and employee, nor again that of employer looking among strangers
for employees or employees seeking from strangers, employment.82

A recognition of the notion of a striking employee is also contained in Keith Theatre, where the court said:

While out on strike, it is not considered that the strikers have abandoned their employment, but rather have only ceased from their
labour.83

The position of the law is the same in India also, as stated by the Supreme Court in Michael Mark, holding that if
employees absent themselves from work because of a strike, for the enforcement of their demands, there can be no
question of an abandonment of their employment, by them. And, if the strike was in fact, illegal, the employer may take a
disciplinary, action against the workmen under the Standing Orders or otherwise, and dismiss them.84 In this connection, in
Oriental Textile, the court further said:

While it is an accepted principle of industrial adjudication, that workmen can resort to strike in order to a press for their demands,
without snapping the relationship of employer and employee, it is equally a well-accepted principle, that the work of the factory
cannot be paralysed and brought to a stand-still by an illegal strike, in spite of legal steps being taken by the management to resolve
the conflict. The management has the right in those circumstances, to carry on the work of the factory, in furtherance of which, it
would employ other workmen and justify its action on merits, in any adjudication of the dispute arising therefrom.85

Punishment for Participating in Illegal Strikes

Taking part in an illegal strike amounts to a misconduct on the part of an employee, which will expose him to disciplinary
action. In other words, the employees who take part in an illegal strike, make themselves liable to be dealt with
departmentally, by their employers.86 But if the strike is not illegal, the disciplinary action of a discharge or dismissal will
be uncalled for. In BR Singh (supra), the dismissal of certain workmen for going on a strike, which was not illegal, but was
resorted to out of frustration and not for any animosity towards any officer and without indulging in any destructive
method, was held to be improper. However, until an employee is formally dismissed from service for such misconduct, the
relation of employment subsists and the continuity of service is not affected.87 In other words, the dismissal of workmen
for going on an illegal strike, without holding a domestic inquiry against them, for the charges, in accordance with the
rules of natural justice, will not be sustainable in industrial adjudication.88 Furthermore, before inflicting the punishment on
the delinquent workmen, not only do they have to be found guilty of the charges levelled against them, but their role in the
strike has also to be determined by the adjudicator, to see whether the punishment is warranted or not. In Model Mills, the
employer company dismissed certain workmen under its Standing Orders, for participating in an illegal strike and the
dismissal was held to be proper and justified by the Supreme Court.89 In Bata Shoe Co, the court held that where the
Standing Orders authorise dismissal as a punishment for going on an illegal strike, the order of dismissal would be
justified, even though there was no violence and the strikers remained peaceful.90

In Michael Mark (supra), the court, however, discountenanced the action of the employer in filling the places of the
striking workmen, by employing new hands, as the striking workmen had not joined duty despite the notices given to them.
The court observed that if the employees absent themselves from work on account of a strike, in furtherance of their
demands, there could be no question of abandonment of employment by them and held that if the strike was, in fact,
illegal, the employer could take disciplinary action against the employees, in compliance with the Standing Orders, and
dismiss them. In IGN Rly (supra), the court laid down the general rule that merely taking part in an illegal strike, without
anything further, would not necessarily justify the dismissal of all the workmen taking part in the strike and that it was
necessary to hold a regular inquiry, after furnishing the charge-sheet to each of the workmen sought to be dealt with for his
participation in the strike. In Oriental Textile, there were no Standing Orders applicable to the establishment, and the court
held that the domestic inquiry should have been held in order to entitle the employer to dispense with the services of its
workmen on the ground of misconduct. Dealing with the question as to whether, before the services of the workmen who
are on strike, are terminated, is an inquiry into their misconduct obligatory and would an omission to comply with this
requirement, make the order of termination illegal, the court held:

It appears to us that merely because workmen go on strike, it does not justify the management’s order terminating their services. In
any case, if allegations of misconduct have been made against them, those allegations have to be inquired into by charging them
with specific acts of misconduct and giving them an opportunity to defend themselves at the inquiry. Even where a strike is illegal,

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it does not justify the management in terminating their services merely on that ground, though if it can be shown on an inquiry, that
the conduct of the workmen amounted to a misconduct, it can do so...If, however, the management does not hold such an inquiry or
the inquiry is due to some omission or deficiency, not valid, it can nonetheless support its order of discharge, termination or
dismissal when the matter is referred for industrial adjudication, by producing satisfactory evidence and proving misconduct. Even
in such cases, the evidence which is produced to substantiate and justify the action taken against the workman, is not as stringent as
that which is required in a court of law. At any rate, the evidence should be such as would satisfy the tribunal that the order of
termination is proper.91

The position of law, therefore, seems to be that if there are Standing Orders providing for a dismissal, in the establishment,
the striking workmen may be punished or dismissed in compliance with the requirements thereof but in cases where there
are no such Standing Orders, it would be necessary to serve the individual workmen, who have participated in the strike,
with charge-sheets and then to hold a regular domestic inquiry to determine the quality of the misconduct and the quantum
of punishment, by finding out whether they were peaceful strikers or violent strikers, so as to deserve the extreme penalty
of a dismissal. It is only after complying with these requirements, that a workman, if found guilty of the charges, may be
dismissed.92 It is not as if, simply because the workman participated in an illegal strike, necessarily and in every case, a
dismissal must be visited upon the workman. Majmudar J pointed out:

In case of a mass movement, crusade and mass hysteria, actions taken and statements made by the concerned striking workmen,
cannot be judged on the touchstone of cold logic, resorted to in an air-conditioned court room, detached from the atmosphere under
which such statements are made and such acts are undertaken. They have to be judged in their own settings, which were aflame
and explosive in character.93

There may be an actual participation and a passive participation on the part of the workman, in an illegal strike. It may be
that those workmen who actually participated, may deserve a more serious punishment than the passive participants.
Passive participants cannot be punished to the same extent as the active participants or the militant workmen.94 The
quantum of punishment would vary depending upon the facts and circumstances in each case.95 The kind or quantum of
punishment has to be modulated in accordance with the facts and circumstances of each case. However, in case of an
illegal strike, the striking workmen are liable to be suspended forthwith, pending an inquiry into their conduct.96 But a
mere participation in an illegal strike, which is peaceful and non-violent, would not justify the suspension or dismissal of
the participants. Nor would a mere participation in an illegal strike, bar the strikers’ claim for reinstatement if they are
dismissed,97 for ‘there may be reasons for distinguishing the case of those who have acted as dumb-driven cattle, from
those who have taken an active part in fomenting the trouble and instigating workmen to join such a strike or have taken
recourse to violence’. Though the employer may be justified in imposing the extreme punishment of dismissal, on the
striking workmen who had indulged in violent activities or defied prohibitory orders issued by the authorities, such
punishment will be too severe for those workmen who were peaceful strikers or acted like dumb-driven cattle.1 On the
other hand, even if the strike is legal and justified, if the workmen resort to violence, an order of dismissal may be proper.2

In Changunabai, the Bombay High Court pointed out that no doubt, those workmen who take part in an illegal strike,
make themselves liable to be dealt with by their employers, whether such participation is passive or active. However, a
distinction has to be maintained in dealing with both the types of workmen who may have been guilty of a participation in
the illegal strike, because both are not liable to the same kind of punishment. A passive participation in a strike, which is
illegal, and may also be unjustified, does not, ipso facto, invite a dismissal or a punitive discharge. To justify the ultimate
penalty, there must be an active individual excess, ie, masterminding the unjustified aspects of the strike, such as violence,
sabotage or some other reprehensible role. In the absence of such gravamen in the accusation and proof thereof, through
cogent individualised proof, the extreme economical penalty of a penal termination is wrong, especially in an economic
structure where large scale unemployment stares in the face.3 The requirements of law before a just punishment, for going
on an illegal or an unjustified strike, can be inflicted upon a delinquent workman, have been succinctly stated by Krishna
Iyer J, in Gujarat Steel Tubes, in the following words:

The short position is this. Is there a punishment of any workman? If yes, has it been preceded by an inquiry? If not, does the
management desire to prove the charge before the tribunal? If yes, what is the evidence, against whom, of what misconduct? If
individuated proof be forthcoming and relates to an illegal strike, the further probe is this: was the strike unjustified? If yes, was the
accused worker an active participant therein? If yes, what role did he play and of what acts was he the author? Then alone the stage
is set for a just punishment. These exercises, as an assembly-line process, are fundamental. Generalisation of a violent strike, of a
vicious union leadership, of strikers fanatically or foolishly or out of fear, failing ro report for work, are good background material,
beyond that, they must not be identified by a rational process, the workman, their individual delinquency and the sentence

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according to their sin. Sans that, the dismissal is bad. 4

It may be pointed out that in view of the decision in IGN Rly, to the effect that an illegal strike cannot be justified, the
query in the above passage, viz, ‘the further probe is this: was the strike unjustified?’, would be unwarranted and uncalled
for. It is not in the interest of the industry that there should be a wholesale dismissal of all the workmen who merely
participated in a strike. Nor is it in the interest of the workmen themselves. The question of punishment, therefore, has to
be considered by industrial adjudication, keeping in view the over-riding consideration of the full and efficient working of
the industry as a whole. To determine the question of punishment, therefore, a clear distinction has to be made between
those workmen who not only joined in such strike, but also took part in obstructing the loyal workmen from carrying on
their work, or took part in violent demonstrations, or acted in defiance of law and order, on the one hand, and those
workmen who were more or less silent participants in such a strike. In order to find out which of the workmen, who had
participated in an illegal strike, belonged to one or the other of the two categories, the strikers may, for the sake of
convenience, be classified as: (i) peaceful strikers, and (ii) violent strikers. Industrial adjudication has to inquire into the
part played by each. The punishment of dismissal or termination of service, may be imposed on such workmen as have not
only participated in an illegal strike, but have also fomented it and have been guilty of violence or of doing acts detrimental
to the maintenance of the law and order in the locality of the establishment.5 A physical obstruction of loyal workers, by
the strikers, during a strike, so as to prevent them from attending the place of work, is a serious misconduct, for which a
punishment of dismissal would be justified.6

If the order of the punishment lacks bona fides or is a measure of victimisation or an unfair labour practice, even though
purporting to be under the Standing Orders, it would be vitiated. For instance, if the employer picks up only a few
employees for imposing the penalty of dismissal, without any rational explanation, where a large number of workmen had
gone on strike, the action can be held to be mala fide, inasmuch as it is based on an irrational or unreasonable
discrimination. Likewise, if the employer makes an unreasonable discrimination in the matter of taking back employees,
particularly when no clear distinction can be made between the persons who are taken back into service, although they had
participated in the strike, and the persons who are dismissed, there may, in certain circumstances, be ground for industrial
adjudication to interfere.7 But the circumstances of each case have to examined by the adjudicator, before he can interfere
with the order of the employer in a properly held managerial inquiry, on the ground of discrimination.8 In the undernoted
case,9 the action of the employer in selecting six workmen out of a large number of strikers for punishment, was held to be
mala fide, inasmuch as it was based on an irrational and unreasonable discrimination, and their dismissal was unjustified.
A participation in an illegal strike may not necessarily and in every case, be punished with a dismissal; but where an
inquiry has been properly held and the employer has imposed the punishment of dismissal on the employee who has been
guilty of the misconduct of joining an illegal strike, the tribunal should not interfere, unless it finds an unfair labour
practice or victimisation against the employee.10

Wages for the Period of Strike

The question as to whether the workmen who proceed on an strike, whether legal or illegal, are entitled to wages for the
period of the strike, has generated a good bit of decisional grist. As early as 1953, in Buckingham & Carnatic, the claim of
workmen for wages for the strike period was rejected by the Supreme Court, because the strike was found to be illegal, as
the textile mill was a public-utility-service and a notice, as required by the Act, had not been given to the management.11 In
Chandramalai Estate (supra) the Supreme Court deprecated the indiscriminate use of the weapon of strike. In the facts and
circumstances of the case, it found that the strike was unjustified. It was, therefore, held that the workmen were not entitled
to even 50 per cent of the wages, for the period of the strike.

Similarly, in Fertiliser Corpn, the workmen were denied wages for the period of the strike, because the strike, though not
illegal, was unjustified in the facts and circumstances of the case.12 In IGN Rly (supra), the court observed that an ‘illegal’
strike cannot be characterised as ‘justified’, because the law makes a distinction only between a strike which is ‘illegal’
and one which is not. But it does not make any distinction between an ‘illegal’ strike which may be said to be justifiable
and one which is not justifiable. Such a distinction is wholly misconceived and especially so in the case of employees in a
‘public-utility-service’. Therefore, in order to entitle the workmen for wages for the period of the strike, the strike must be
both legal and justified. If the strike is legal as well as justified, it would be difficult for the employer to resist the claim of
the workmen for wages for the period of the strike; on the other hand, if the strike is unjustified, the workmen may not be
entitled to wages for the period of the strike. This principle was conversely applied by another three-judge Bench of the
court, to the fact-situation in Churakulam, in which the court held that since the strike was neither ‘illegal’, nor
‘unjustified’, the workmen were entitled to wages for the days on which they went on strike. Likewise, in Crompton
Greaves, the workmen were held to be entitled to the wages for the period of strike, as the strike was held to be neither
illegal, nor unjustified. However, in connection with the ‘unjustifiability’ of a strike, the court pointed out:

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A strike cannot be said to be unjustified, unless the reasons for it are entirely perverse or unreasonable. Whether a particular strike
was ‘justified’ or not, is a question of fact, which has to be judged in the light of the facts and circumstances of each case. It is also
well-settled that the use of force or violence or acts of sabotage resorted to by the workmen, during a strike, disentitle them to
wages for the strike period. 13

It is apparent from the decisions in Churakulam and Crompton Greaves that the view taken in them was that, for an
entitlement to wages for the period of strike, the strike has to be both legal and justified. The employees cannot be entitled
to wages for such period merely because the strike was legal. In other words, if the strike was illegal but justified, or if the
strike was legal but unjustified, the employees would not be entitled to the wages for the strike period.14 But the question,
whether the workmen who had proceeded on the strike, whether legal or illegal, were at all entitled to wages for the period
of the strike, was for the first time considered by a two-judge Bench of the court in TS Kelawala, in which the facts were:
the All India Bank Employees Assn gave a call for a countrywide strike in support of the demand of the bank employees
for a wage revision. Consequently, on 29 December 1977, the bank employees went on a four hours strike, from the
beginning of the working hours, despite warnings of wage deductions for the period of the strike, issued by the bank. After
the strike period, the employees resumed work on that day and the bank did not prevent them from doing so. But the hours
of the strike covered the banking hours for the public. Therefore, the bank issued a circular directing its managers and
agents to deduct a full day’s salary of those employees, who had participated in the strike. The employees’ union
challenged that circular of the bank by a writ petition, which was allowed by the High Court of Bombay. In appeal by a
special leave, a two-fold question was raised before the Supreme Court, as to whether the bank was entitled to deduct the
wages of the workmen, for the period of the strike, and further, whether the bank was entitled to deduct wages for the
whole day or pro-rata only for the hours for which the employees had struck work. However, the question as whether the
strike was legal or illegal and whether it was justified or unjustified, was not raised in this case. In short, the only question
debated before the Supreme Court was whether, even assuming that the strike was legal, the bank was entitled to deduct
wages, as it purported to do under the circular in question. Answering this question, the court held that the legality or
illegality of the strike had nothing to do with the liability for a deduction of the wages and even if the strike was legal, it
did not save the workers from losing the salary for the period of the strike. Therefore, both legal as well as illegal strikes
invite a deduction of the wages, on the principle that ‘whoever voluntarily refrains from doing work when it is offered to
him, is not entitled for a payment for work he has not done’. In other words, the court upheld the doctrine of ‘no work, no
pay’.15

In the Umesh Naik (supra), certain settlements were entered into between the union of the workmen and the management
of the bank, under s 2(p), read with s 18(1) of the Act, under which the employees of the bank were entitled to certain
advantages with retrospective effect. The bank, however, did not forward the copies of the memorandum of settlements to
the authorities, as required by r 58(4) of the Industrial Disputes (Central) Rules 1957. The settlements, therefore, were not
implemented by the bank, on the plea that the implementation of the settlements, giving the extra benefits to the workmen,
required the government’s approval, which was in process. The union on the other hand, contended that the settlements
were signed without any pre-condition that they were to be cleared by the government. Since the matter was becoming a
stalemate, the union issued a strike notice to the bank, demanding an immediate implementation of the settlements and the
payment of the arrears of pay and allowances, pursuant to them. Though there was no formal strike notice in terms of s 22
of the Act, on the basis of a copy of the notice given by the union to the bank, the Deputy Chief Labour Commissioner &
Conciliation Officer (Central), wrote to both the parties, informing them that he would be holding conciliation proceedings
under s 12 of the Act and required them to attend the conciliation proceedings, along with a statement of the case, in terms
of r 41 (a) of the Rules. After a few meetings, the conciliation officer found that there was no meeting ground and no
settlement could be arrived at. However, he kept the proceedings alive by stating that, in order to explore the possibility of
bringing about an understanding in the matter, he would hold further discussions. As the employees felt that the possibility
of the implementation of the settlements was not in sight, their union gave a letter to the conciliation officer, requesting
him to treat the conciliation proceedings as closed. But the conciliation officer still decided to keep the proceedings open,
with a view to explore the possibility of resolving the matter amicably. Subsequently, on 18 October 1989, the bank issued
a circular notice, stating, inter alia, that it would deduct salary for the days the employees go on a strike, on the principle
of ‘no work, no pay’. In spite of the circular, the employees went on a strike, on a 16 October 1989 and filed a writ petition
in the High Court for quashing the circular threatening to deduct the salary for the days of the strike. The High Court,
quashed the circular dated 18 October 1989, relying on the holding in Churakulam and held that the workmen were
entitled to wages for the strike period, as the strike was legal and justified. In appeal by special leave, the Supreme Court
set aside the decision of the High Court, holding that the decision of the High Court, with respect to the legality, as well as
the justifiability of the strike, was erroneous, being beyond the writ jurisdiction of the High Court, since the jurisdiction to
decide the questions of fact involved in these issues, was properly vested in the industrial adjudicator. The court, therefore,
directed the government to refer the dispute with regard to a deductions of wages, for adjudication, to the appropriate
authority under the Act.16 In The Statesman, the workmen had resorted to an illegal strike, following which, the

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management had declared a lockout and thus, the declaration of the lockout was ‘legal’. However, in view of the
unreasonable attitude adopted by the management in continuing the lockout, the tribunal held that the blame for the ‘strike’
and the ‘lockout’, had to be apportioned between both the sides and accordingly, ordered the payment of half wages for the
period of the lockout. Affirming the award of the tribunal, Krishna Iyer J, stated the law in the following words:

If the strike is illegal, wages during the period will ordinarily be negatived, unless considerate circumstances constrain a different
course. Likewise, if the lockout is illegal, full wages for the closure period shall have to be ‘forked out’, if one may use that
expression. But in between, lies a grey area of twilight law. Strictly speaking, the whole field is left to the judicious discretion of
the tribunal. Where the strike is illegal and the sequel of a lockout, legal, we have to view the whole course of the developments
and not stop with examining the initial legitimacy. If one side or the other behaves unreasonably or the overall interests of good
industrial relations warrant the tribunal making such directions regarding strike period wages, as will meet with justice, fair play
and pragmatic wisdom, there is no error in doing so. His power is flexible. 17

The purport of these observations is that the mere fact that a strike or a lockout, at the commencement, was legal, but the
subsequent events or conduct of the parties renders the strike or the lockout, illegal or unjustified, will expose the situation
to judicial scrutiny and the discretion of the adjudicator. In none of these cases, except in TS Kelawala, the court has
adverted to the statutory language of the definitions of ‘strike’ and ‘wages’. Even in this case, though the court did refer to
the language of these definitions and observed that:

...reading the two definitions together, it is clear that wages are payable only if the contract of employment is fulfilled and not
otherwise, and when the workers do not put in the allotted hours of work, or refuse to do it, they would not be entitled to the wages
proportionately.

It still went into the irrelevant question of the justifiability or unjustifiability of the strike. ‘Strike’ has been defined in s
2(q) of the Act, which reads:

Strike’ means a cessation of work by a body of persons employed in any industry, acting in combination, or a concerted refusal, or
a refusal under a common understanding of any number of persons, who are or have been so employed, to continue to work or to
accept employment.

And the term ‘wages’ has been defined in s 2(rr) which, omitting the surplus words, reads:

‘Wages’ means all remuneration capable of being expressed in terms of money, which would, if the terms of employment,
expressed or implied, were fulfilled, be payable to a workman in respect of his employment or of work done in such employment...

In other words, if, for a certain period of time, a workman does not fulfil the expressed or implied terms of his contract of
employment, or does no work, no remuneration will be payable to him for that period, in respect of his employment, in
terms of the definition of ‘wages’. Thus, in this definition, the legislature has unequivocally incorporated the doctrine of
‘no work, no pay’. When the workmen go on strike, they cease to work, refuse to continue to work or to accept
employment. Therefore, they wantonly fail to fulfil the terms of the contract of employment. From a juxtaposition of these
definitions of ‘wages’ and ‘strike’, the conclusion that the workmen, who go on a strike, are not entitled to wages for the
period of the strike, is inescapable. On the clear and unambiguous language of the statute, the questions of legality or
illegality, or justifiability or unjustifiability of the ‘strike’ are irrelevant. Likewise, in the case of a ‘lockout’, the question
of its legality or illegality or justifiability or unjustifiability are also irrelevant. In view of the plain language of the
definition of a ‘lockout’ in s 2(1), an employer who declares a ‘lockout’, is liable to pay wages to the workmen for the
period of the ‘lockout’, because he disables them to fulfil the terms of the contract of employment, by closing the place of
employment.18 Therefore, while going into these questions, the court side-stepped the statute and strayed into the
prohibited area of judicial legislation. In this connection, the holding of a single judge of the Calcutta High Court, in
Algemene Bank, is relevant, where, on the construction and application of the expression ‘wages’, in the Payment of
Wages Act, Sabyasachi Mukherji J, stated that the definition ‘...in express terms, mentions as remuneration, that which
would have been payable, if the terms of the employment were fulfilled and one of the main terms of employment,
undoubtedly, in the instant case, is that the employee would work for a specified period of work during the working hours’.
Therefore, ‘if the employee does not work for a specified period of work, then the remuneration would not be payable’.
Even under the general law of contract, an employee who does not perform the work required of him, under the contract,
will not be entitled to wages foot such period, because of a failure of the consideration. Referring to the dictum of Lord

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Denning to the effect:wages are to be paid for services rendered, not for producing deliberate chaos,19 Sabyasachi
Mukherjee J observed:

The right of the employees to get remuneration depends upon the performance of his work during the period of employment. If
there is any failure of that consideration, then taking a strict view of the matter, the employer is entitled to refuse any payment at
all.20

In the cases discussed hereinabove, the attention of the Supreme Court does not appear to have been drawn to this holding
of the Calcutta High Court. In Swastik Textiles,21 the facts were: the workmen went on a strike for some days, after which
they called off the strike. But when they returned to work, they were not allowed to resume duty by the management,
unless they gave a statement in writing, as required by the management. The statement contained an admission of having
participated in the illegal strike and also required the workmen to seek pardon of the management and give an undertaking
that they would not question the validity of any penalty that the management may decide to impose upon them for
participating in the illegal strike. It further contained an assurance that the workmen would not indulge in a similar
misconduct in the future. On the refusal of the workmen to give the statement, the management did not permit them to
resume their duty for a period of about two months from the date of their having called off the strike. In the adjudication
proceedings arising out of the dispute relating to the wages for this period, the tribunal held that the action of the
management, refusing to permit the workmen to resume their duty, was not justified. Hence, the workmen were entitled to
the wages for the period in question. The Division Bench, in a writ petition filed against the award of the tribunal, upheld
the validity of the direction given by the tribunal. Following the decision of the Apex Court in Umesh Naik (supra), a
single judge of the Madras High Court held that a strike by workmen during the pendency of conciliation proceedings, is
illegal, warranting a deduction of the wages for the days of such illegal strike. In Neyveli Lignite Corpn, a single judge of
the Madras High Court held that the mere issuing of a strike notice would not confer the right to wages, and that, in order
to claim wages, the workmen should show that, the strike was not only legal, but also justified.22 Apparently, these
decisions are based on the ratio evolved by Sawant J, in Umesh Naik and TS Kelawala. These two decisions merit some
detailed analysis in the context of a pioneering decision given by a Constitution Bench in IGN Rly. In Umesh Naik, Sawant
J observed:

We may now refer to...Kelawala’s case,23...Since it was not the case of the employees, that the strike was justified, neither
arguments were advanced on that basis, nor were the aforesaid earlier decisions cited before the court. There is, therefore, nothing
in the decisions of this court in Churakulam Tea Estate,24 and Crompton Greaves cases,25...or the other earlier decisions cited
above, which is contrary to the view taken in TS Kelawala. What is held in the said decisions is that to entitle the workmen to the
wages for the strike period, the strike has both to be legal and justified...We, therefore, hold, endorsing the view taken in TS
Kelawala, that the workers are not entitled to wages for the strike-period, even if the strike is legal. To be entitled to the wages for
the strike period, the strike has to be both legal and justified...26 (,).

As was rightly pointed out by Sinha CJI, in India General Navigation (IGN) and Rly Co Ltd, the justifiability or
unjustifiability of the strike, has no relevance to a strike under the Act, and the concept of ‘justifiability of a strike’ is
wholly foreign and unknown to industrial law. How does it matter whether or not any argument was advanced in Kelawala
in support of the justifiability of an illegal strike, which, going by the binding ratio of IGN Railway, cannot, at any rate, be
held to be justified, because of a prima facie violation of ss 22 and 23 of the IDA? Sawant J, then went on to observe that
there was nothing in Churakulam and Crompton Greaves, that was contrary to the view taken by him in Kelawala. This
observation is wrong on facts. Indeed, Sawant J, by his decision in Kelawala, tacitly reversed not only Churakulam and
Crompton Greaves, but also Gujarat Steel Tubes,27 at one stroke, and rightly so. In Kelawala, he clearly held that no wages
were payable in the case of a strike, whether it was legal or illegal, which is not the same thing as the ratio of Cromptom
Greaves and Gujarat Steel Tubes, which propounded in terms: in order to be entitled to wages, the strike should be both
legal and justified.’ In the face of a line of reasoning that proceeded so spectacularly in the opposite direction, the further
observation of Sawant J, that ‘there was nothing contrary in Kelawala’ is intriguing. Reverting to his later decision in
Umesh Naik, it is significant to note the relevant portion of his observation:

We, therefore, hold, endorsing the view taken in TS Kelawala that the workers are not entitled to wages for the strike period, even
if the strike is legal. To be entitled to the wages for the strike-period, the strike has to be both legal and justified...

The second part of the above statement is inconsistent with the first. In Kelawala, it was clearly held: ‘There should not be
any confusion between the strike as a legitimate weapon and the liability of deduction of wages incurred on account of it,
whether the strike is legal or illegal’. If, as per this ratio, the workmen are not entitled to wages for a strike-legal or illegal-

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then, by no means can that position be reconciled with the later observation in Umesh Naik: ‘to be entitled to the wages for
the strike period, the strike has to be both legal and justified’. In other words, having virtually struck down Crompton
Greaves and Gujarat Steel Tubes by his peremptory observation in Kelawala, Sawant J, endorsed the perverse ratio of
Crompton Greaves and Gujarat Steel Tubes, thereby denouncing his own decision in Kelawala, to the contrary. The
decision of a single judge in Neyveli Lignite Corporation, is a standing example of the fallout of uncertain and half-hearted
rulings of the kind given in Umesh Naik. It is an undeniable fact that Crompton Greaves and Gujarat Steel Tubes were
wrongly decided glaringly violating the binding precedent set in IGN Railway, and, therefore, have to be necessarily
treated as per incuriam. In the final analysis, out of all these new-generation decisions, handed down by activist judges,
Kelawala alone can rightfully claim to be consistent with IGN Rly and with the scheme of the Act, while other decisions,
commencing from Churakulam and ending with Umesh Naik, suffer from the vice of judicial caprice, either in whole or in
part.

Civil Liability of the Unions

Workmen and their unions are immune under s. 18(1) of the Trade Unions Act 1926, from any civil liability. The fact that
a strike is illegal, is immaterial in this connection. The law with respect to the tort of conspiracy, is well-established. The
position of law has as declared by Ramaswamy CJ of Patna High Court, as he then was, affirmed by the Supreme Court in
Rohtas Industries:

Conspiracy, as a tort, must arise from a combination of two or more persons doing an act. It would be actionable if the real purpose
of the combination is the inflicting of damage on A, as distinguished from serving the bona fide and legitimate interests of those
who so combine and there is a resulting damage to A...In the case of a ‘mixed motive’ or a ‘mixed purpose’ for the conspiracy, the
test is: what is the dominant motive or the dominant purpose of the conspiracy...It is well-established that if there is more than one
purpose actuating the combination, the liability must depend on ascertaining, what the pre-dominant purpose is.28

On the general issue of strikes, NCL-II observed:

We also discussed the question, whether any distinction should be made between ‘strike’ and ‘work stoppage’ and came to the
conclusion that the existing definition of ‘strike’, in the Industrial Disputes Act 1947, may stand, ‘Go slow’ and ‘work to rule’ are
forms of action which must be regarded as misconduct. Standing Orders and provisions relating to unfair labour practices already
include them and provide for action both in the case of ‘go slow’ and ‘work to rule’...There are some industries or services where
the effects of industrial action, create situations which threaten the lives and the normal and the essential needs and activities of the
vast majority. One’s liberty has to be seen in the light of the equal right that everyone else has, to demand and enjoy liberty. Social
intervention thus, becomes justified and necessary to protect the interests of all concerned...We, therefore, recommend that in the
case of socially essential services, like water supply, medical services, sanitation, electricity and transport, when there is a dispute
between employers and employees in an enterprise, and when the dispute is not settled through mutual negotiations, there may be a
strike ballot as in other enterprises, and if the strike ballot shows that 51% of workers are in favour of a strike, it should be taken
that the strike has taken place, and the dispute must forthwith be referred to compulsory arbitration (by arbitrators from the panel of
the Labour Relations Commission (LRC), or arbitrators, agreed to by both sides)...We are recommending the withdrawal of the
Essential Services Maintenance Act.29

Clause (qq): Trade Union

The expression ‘trade union’ was not defined in the Act so far. But now, in view of the amendments introduced by the
Amending Act 46 of 1982, the term ‘trade union’ has been defined to mean a ‘trade union, registered under the Trade
Unions Act 1926’. Section 2(h) of the Trade Unions Act 1926 (16 of 1926), defines a ‘trade union’ as:

‘trade union’ means any combination, whether temporary or permanent, formed primarily for the purpose of regulating the
relations between workmen and employers or between workmen and workmen, or between employers and employers, or for
imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more trade unions:

Provided that this Act shall not affect:

(i) any agreement between partners as to their own business;

(ii) any agreement between an employer and those employed by him, as to such employment; or

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(iii) any agreement in consideration of the sale of the goodwill of a business, or for instruction in any profession, trade or
handicraft.

Clause (r): TRIBUNAL

The repealed Trade Disputes Act of 1929, did not provide for adjudication of industrial disputes. Hence, there was no
provision for the creation or constitution of tribunals. The industrial tribunals, inter alia, were created for the first time,
under the original Industrial Disputes Act 1947, in which a ‘tribunal’ was defined by the original cl (r) of s 2. The
definition was amended by the Amending Act of 1957.

Clause (ra): UNFAIR LABOUR PRACTICE

Prior to the amending Act of 1982, though the expression ‘unfair labour practice’ was generally used in connection with a
wrongful termination of the service of a workman, it was not defined in the Act. Nor, judicially, had any meaning been
ascribed to it, even while dealing with cases of a wrongful termination of the service as a measure of victimisation or
unfair an labour practice. For instance, in HD Singh,30 the action of the Reserve Bank of India, in striking the name of the
workman off its rolls, without giving him any order in writing, either refusing work or informing him that his name would
be struck off the rolls, was held to be an act of ‘unfair labour practice’. The term ‘unfair labour practice’ was defined under
the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act 1971 (Act 1 of 1972), to
mean practices listed in Schs II, III and IV thereof. The termination of the service of an employee, without issuing a show
cause notice or holding a domestic inquiry, has been held to be an act of indulging in an ‘unfair trade practice’, within the
meaning of sub-items (a), (b) and F of item 1 of Sch IV of that Act.31 Now, this clause has been inserted by the Amending
Act 46 of 1982, which defines an ‘unfair labour practice’ to mean any of the practices specified in the Fifth Schedule. The
Fifth Schedule enumerates the unfair labour practices: (i) on the part of the employers and trade unions of employers and
(ii) on the part of workmen and trade unions of workmen. Chapter VC has also been inserted by the same Amending Act.
Section 25T of this chapter, prohibits an ‘unfair labour practice’, while s 25U prescribes the penalty for committing an
unfair labour practice. After these amendments, to employ workmen as casuals and continue them as such for years, with
the object of depriving them of the status and privilege of permanent workmen, has been held to be an unfair labour
practice, falling within the purview of item 10 of para (1) of the Fifth Schedule of the Act.32

In P Rajeev, the Karnataka High Court pointed out that the object behind a particular order of appointment, has to be
examined to find out whether it is an unfair labour practice. Since mala fide is an essential ingredient of item 10 of the
Fifth Schedule, mala fides have to be alleged and proved. In the absence of such an allegation or proof, it is not possible to
stigmatise a particular mode of appointment as an unfair labour practice. Such oblique motive on the part of the employer,
cannot be inferred, merely because appointments were made for temporary periods and the employees were continued in
service temporarily, from time to time.33 In Assn of SRT Undertakings, the union held violent demonstrations and staged
dharnas at the residences of senior officers and also abused and assaulted some senior executives of the employer and
threatened them with dire consequences. In this situation, the employer instituted a suit for certain perpetual injunctions. A
single judge of the Delhi High Court held that, in view of the provisions of item 2(b) of Pt II of the Fifth Schedule, the
workmen had indulged in an ‘unfair labour practice’, and therefore, the employer was entitled to the grant of the perpetual
injunctions.34 On the issue of terming an action as an unfair labour practice, the Supreme Court in Raja Ram, held:

...before an action can be termed as an unfair labour practice it would be necessary for the Labour Court to come to a conclusion
that the badlis, casuals and temporary workmen had been continued for years as badlis, casuals or temporary workmen, with the
object of depriving them of the status and privileges of permanent workmen. To this has been added the judicial gloss that artificial
breaks in the service of such workmen would not allow the employer to avoid a charge of unfair labour practice. However, it is the
continuity of service of workmen over a period of years which is frowned upon. Besides, it needs to be emphasized that for the
practice to amount to unfair labour practice it must be found that the workmen had been retained on a casual or temporary basis
with the object of depriving the workman of the status and privileges of a permanent workman. There is no such finding in this
case. Therefore, Item 10 in List I of the Fifth Schedule to the Act cannot be said to apply at all to the respondent’s case and the
Labour Court erred in coming to the conclusion that the respondent was in the circumstances, likely to acquire the status of a
permanent employee.35 (Italics supplied).

Applying the above principle to a case with a similar set of facts involving the same employer, Ms Ruma Pal J, while
setting aside the award of the tribunal as well as the order of the High Court, held that in the light of the fact that no finding
to the effect that the practice amounted to unfair labour practice was recorded by the tribunal, the conclusion reached by it
that the Bank had committed an unfair labour practice was not tenable.36 In Hindustan Lever, the facts briefly were: the
service of a workman who was engaged as a casual clerk was terminated giving rise to a complaint by the workman

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alleging unfair labour practice against the management by engaging him on casual basis for four years with an intention to
deprive him of the status and privileges of a permanent workman. The tribunal held that the employer had committed an
unfair labour practice under s 2(ra) read with Item 10 of Sch V. Quashing the award, Rajesh Kumar J of Allahabad High
Court held that the workman did not worked for 240 days in the preceding year, nor could he discharge the burden of
proving that the management was guilty of any unfair labour practice.37

Clause (rb): VILLAGE INDUSTRIES

Since the Amending Act 46 of 1982, refers to village industries at several places, therefore, it became necessary to define
‘village industries’. Accordingly, by this clause, the expression ‘village industries’ has been given the same meaning as
assigned to it in cl (b) of s 2 of the Khadi and Village Industries Commission Act 1956, which reads:

‘Village Industries’ means all or any of the industries specified in the schedule and includes any other industry deemed to be
specified in the schedule, by reason of a notification under section 3.

Clause (rr): WAGES

Etymologically, the term ‘wages’ means an ‘amount paid periodically, especially by the date or week or the month or time
during which the workman or servant is at the employer’s disposal’. Webster’s Third New International Dictionary defines
‘wages’ as a ‘pledge of payment of monetary remuneration by an employer, for labour or services, according to the
contract or on an hourly, daily or piece-work basis and often including bonuses, commission and amounts paid by the
employer for insurance, pensions, hospitalisation and other benefits especially; such remuneration is paid to skilled or
unskilled labour’. In the language of law, ‘wage’ is the consideration for the work done by an employee for his employer,
paid periodically. Section 2(s) of the Act postulates that industrial employment, to do any skilled or unskilled, manual,
supervisory, technical or clerical work, is for ‘hire or reward’. It is this ‘hire or reward,’ which forms the subject-matter of
‘wages’ of an industrial employee.

Components of Wages

The definition of ‘wages’ is in three parts. The first part defines ‘wages’ as ‘all remuneration capable of being expressed in
terms of money, which would, if the terms of employment, expressed or implied, were fulfilled, be payable to workman in
respect of his employment or work done in such employment’. This is the denotation of the term ‘wages’, or what it
denotes. The second part is designed to include something more than what the term primarily denotes. This part gives an
extended connotation, by including certain payments, allowances and amenities, in the ambit of the definition. The third
part of the definition excludes three types of payments made by the employer, viz, (i) bonuses; (ii) contribution towards
pension or provident funds or for any other benefit of a workman, under the law for the time being in force; and (iii)
gratuity payable on the termination of the service of a workman. The NCL-II recommended the bifurcation of the terms
‘wages’ and ‘remuneration’ and redefining them separately: the term ‘wages’ to include only basic wages and dearness
allowance and no other allowance; and ‘remuneration’ to include all other payments, including other allowances as well as
overtime payment, together with wages.38

(i) Remuneration

Remuneration is a more formal version of ‘payment’. It means to recompense by paying an equivalent for a service. In
other words, remuneration is a return for the services rendered. The definition, however, postulates that the remuneration
must be ‘capable of being expressed in terms of money’, payable to a workman, in respect of his employment or for the
work done in such employment.39 Any amount paid to a workman by way of remuneration, must be in respect of his
employment or work done by him. In Bennett Coleman, the car allowance and the benefit of a free telephone and
newspaper, given to the workman, were held not to be covered by the word ‘remuneration’ as used in the first part of the
definition, because they were not restricted to the employment or the work of the workman as a special correspondent and
were not fixed after taking into consideration, the expenses which he would have ordinarily to incur in connection with his
employment, or the work done in such employment.40 The definition expressly states that the remuneration in respect of
the employment or for the work done, would be payable to a workman only when he has fulfilled the express or implied
terms of the contract of his employment. Hence, if the express or implied terms of the contract of employment are not
fulfilled by the workman, he would not be entitled to remuneration. The contract of employment has many express and
implied terms. Non-fulfilment of such terms would disentitle the workmen to claim remuneration. The pivotal term of
employment of a workman in an industry, is to do ‘any skilled or unskilled, manual, supervisory, technical or clerical
work’. If a workman absents from work or having come to work, does not perform the duties assigned to him and thus,
fails to do the work for which he was employed, he may be disentitled from claiming ‘remuneration’. On the same
principle, workmen who go on a strike, pursuant to their demands, would not be entitled to the remuneration for the strike

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period. Though, going on a legal strike, may be a legitimate right of the workmen, in the process of collective bargaining,
yet, they cannot be, simultaneously, on strike and fulfilling the terms of their employment.41 Such a claim, therefore, will
not be comprehended in the definition of ‘wages’. Any such claim, therefore, would be de hors the Act itself.

(ii) Basic wage and Allowance

The expression ‘basic wage’ has not been defined in the Act, though the concept of ‘basic wage’ is relevant for fixing the
wage-structure. The adjectival ‘basic’ means, what is normally allowable to all-irrespective of special claims. The phrase
‘basic wage’ is also ordinarily understood to mean that part of the price of labour, which the employer must pay to all
workmen, belonging to all categories. The phrase is used ordinarily, in contradistinction to allowance-the quantum of
which may very in different contingencies. The ‘basic wage’, therefore, does not include additional emoluments, which
some workmen may earn on the basis of a system of bonuses, related to the production. The quantum of the earnings from
such bonuses, varies from individual, to individual according to their efficiency and diligence; it will vary sometimes from
season to season, with the variation in the working conditions in the establishment; it will also vary with variations in the
rate of supply of raw materials or with the assistance obtainable from machinery. This element of variation excludes the
additional emoluments from the connotation of the ‘basic wage’.42

Allowances Included in the Definition

All allowances, including dearness allowance, to which a workman, at the relevant time, is entitled, have been brought
within the definition of wages, by the including part. Such allowances may be discussed under different heads, as
appearing in the definition itself.

Sub-clause (i) -General Allowances

As fringe benefits of industrial employment, employers pay various sorts of allowances to their workmen, depending upon
the nature of their duties and other incidents of the employment. Such allowances have been taken in the definition of
wages, by the inclusive part. Quite a few of these allowances are discussed below illustratively.

(i) Tiffin Allowance:

Commercial or industrial concerns, with a view to ensure efficiency and to economise time, sometimes provide free tiffin
facilities to their employees. In certain industries and regions, it has become customary and an implied condition of
service. In Mc Leod, the company was supplying free tiffins, ie, two cups of tea and two biscuits to each of the members of
their clerical staff and one cup of tea and one biscuit each, to the members of the subordinate staff. On the ground that the
tiffin arrangement was not satisfactory, the workmen demanded a cash allowance in lieu of the tiffin arrangements. Most
of the comparable concerns in the same region, were also supplying free tiffins to their employees. The Supreme Court
affirmed the award of the tribunal, directing the employer to pay the clerical staff and the subordinate staff, at the rate of
eight annas and six annas respectively, on all working days, in lieu of the tiffin, holding that the tiffin arrangement was an
implied condition of service, in addition to the wages and dearness allowance and it was an amenity to which the
employees were entitled, as a matter of right.43 But in a somewhat different situation, in River Navigation, the court
affirmed the award of the tribunal, rejecting the demand of the employees of the company, working at the ghats, that the
tiffin as provided to similar workmen in their head office, should be paid to them. The tribunal rejected the demand
because:

(i) the expenditure of the workmen on account of tiffin, was theoretically, included in the wage structure;
(ii) the companies which were the constituent members of the Bengal Chambers of Commerce, provided a tiffin allowance to
the employees posted only at the head office;
(iii) providing for tiffin was only an act of generosity;

(iv) the company had set up canteens at the branch offices, on a ‘no-profit no-loss’ basis, where the workmen could obtain
food at a rate cheaper than the market rate; and
(v) the supply of free tiffin to all workmen in the ghat area would cost the company a sum of Rs 3,35,000. The court
observed that the fact that the company had set up a canteen, wherein workmen obtained food at cheap rates, was in
itself, a reasonable amenity in the matter of providing food for the employees. It was observed that the mere fact that the
company was providing, in addition, tiffin to the workmen in the head office, could not itself be a ground to hold that the
company should do likewise for the employees at the branch offices as well. 44

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In Remington Rand, the industrial tribunal awarded an enhanced rate of lunch allowance, with the direction that such
allowance should be paid to all the workmen employed in the Bangalore branch. In making these directions, the tribunal
was influenced by the financial capacity of the employer company to pay, the existence of such allowance in some other
companies, and the discrimination between the workmen employed in Calcutta and Delhi on the one hand and in the
Bangalore office, on the other. But in appeal, the Supreme Court noticed that the finding of the tribunal, that there was a
lunch allowance in existence in other similar concerns in Bangalore, was not based on any evidence. Regarding the
financial capacity, the court observed that the mere fact that the establishment has the capacity to bear an additional burden
of a lunch allowance, would, by itself, be no ground for conceding to the demand, if it is not justified, especially when the
wage-structure prevailing in the employer company was undisputably fair and the dearness allowance paid to the
workmen, had been linked with the index of cost of living, which took care of the rise in the of cost living from time to
time. It was, therefore, held that if the company were to be compelled to pay a lunch allowance to all the workmen,
including those who worked at the Bangalore office, it would, in fact, mean a double provision for the constituent of the
cost of food, which was already provided for in the wage-scales and the rates of dearness allowance. The holding of the
tribunal regarding discrimination, was buttressed by the plea on behalf of the workmen, that the principle of industry-cum
region should not be applied to the lunch allowance with the same rigidity as it is applied in the adjudication of wage-
scales and dearness allowance; which was also discountenanced by the court, with the observation that it would mean
‘cutting holes in a principle which industrial adjudication has, for a number of years, accepted and which has lent a certain
amount of uniformity in a field where problems have to be resolved on a pragmatic approach’. Following the rule in River
Navigation (supra), the award directing the payment of lunch allowance, was set aside.45

In a connected appeal,46 the tribunal, on a consideration of the minimum expenses incurred by a workman while being on
duty, away from his place of residence, did away with the graded scale of batha prevailing in the company and introduced
a uniform scale at the rate of Rs 10 per day, to all those drawing up to Rs 500 per month and also drew an elaborate
scheme to make a provision against a workman falling ill while on an out-station duty. The Supreme Court set aside this
award, holding that the tribunal had gone beyond the usual concept of batha, as the award of Rs 10 per day did not take
into account the normal expenses that the workman would incur, if he were at the headquarters. The court itself adopted
the rates prevailing at the Madras office of the company. In Statesman, there were two canteens—one for officers and the
other for the subordinate staff. The staff of the officers’ canteen was getting a dietary allowance of 50 paise, while the staff
of the subordinate staff canteen was not getting a similar allowance. The Supreme Court affirmed the award of the tribunal,
granting the same allowance to the staff of the subordinate staff canteen as well, with the condition that if they take free
food from the canteen, they would become ineligible for the allowance, since they could not have both.47

(ii) Running Allowance:

In Calcutta Port Commrs, the workmen of the Calcutta Port Trust Railways, claimed a running allowance, payable to the
‘running staff of the state railway, performing comparable duties’ and also demanded free passes and PTOS on the lines
admissible to the employees of the state railways. The tribunal rejected both the claims. In appeal by special leave, the
Supreme Court observed that these allowances and facilities were not available to the employees of the port trust railways,
as their service in all material respects, could not be compared with that of the employees of the state railway, because the
work performed by them was not substantially the same or of similar nature, as the work of the state railway employees.
After comparing various incidents of both the services, the court held that the tribunal was justified in not acceding to the
demand for the running allowance. Likewise, on comparing the incidents of the facilities of PTOS given to the employees
of the state railways, the court held that the employees of the port trust railways were not entitled to them.48

(iii) Clothing and Uniform Allowance:

In Chandramalai Estate, the tea plantation estate had been paying a clothing allowance to their workmen for a number of
years, which had become an implied condition of service. On the employer’s stopping the payment of this allowance, the
workmen raised an industrial dispute and the tribunal awarded the payment of the clothing allowance. The award was
affirmed by the Supreme Court, with the observation that such allowance having become a condition of service, could not
be refused on the ground that the workmen did not raise any dispute when the allowance was stopped.49 In DCM Chemical
Works on the consideration of certain facts, the tribunal awarded the supply of uniforms by the employer, to a certain
category of workmen and that, in addition to the uniforms, the persons entitled to the uniforms, should also be given
protective equipment. In appeal, the Supreme Court upheld the award of the tribunal with respect to the supply of
uniforms, but it set aside the award with respect to the protective equipment, because the tribunal had overlooked the
difference between the uniforms and protective equipment which was provided under the Delhi Factory Rules, for a certain
category of workmen, and not to all to whom uniforms were to be supplied. The protective equipment was to be given for
certain purposes specified in the rules and had no connection with the uniforms, which the employer company was ordered
to supply to its workmen, for reasons entirely different.50 In Remington Rand, the union demanded that the employer
should provide, for all its subordinate staff and mechanics, four sets of uniforms per year or pay them the cost thereof, on

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the ground that the nature of the work done by them was such that their dresses got dirty. But the management had, in the
course of negotiations, offered aprons to the mechanics, which was not accepted by them on the ground that they would
not give them complete protection. The company had been giving two sets of uniforms to the peons and drivers. In the
circumstances, the tribunal directed that if the dresses worn by the mechanics got dirty during the course of employment,
the management should provide such number of sets of uniforms ‘as it deems fit under the circumstances’. This direction
was affirmed by the Supreme Court in appeal.51 In Kirloskar Electric Co, the company had been giving uniforms to its
watchmen, drivers, sweepers and canteen workers and such other workmen who were to be provided with protective
clothing under the Factories Act and the rules framed thereunder. The workmen demanded that all workers should be
provided with a pair of uniforms and a pair of shoes every year. The award of the tribunal, that uniforms should be
supplied to certain other categories of workers as well, was affirmed by the Supreme Court in view of the relevant
evidence and the additional financial burden involved in supplying the uniforms.52 In Statesman, the employer used to
supply warm coats to gate darwans and inspectors, but did not extend this facility to other darwans and delivery peons. The
Supreme Court upheld the award of the industrial tribunal, directing that ‘all the members of the subordinate staff should
be supplied with warm coats’, while rejecting the claim for warm jerseys over and above the warm coats.53

(iv) Retaining Allowance for Off-season:

The question as to whether retaining allowance should be paid to seasonal workers during the off-season, has been
discussed by many committees, constituted by the Uttar Pradesh Government, for this purpose. The divergent views
expressed by these committees made the problem quite complex, by further confounding the confusion. The question was
considered by the Supreme Court in Rohtas Sugar Ltd v Mazdoor Seva Sangh. 54 After considering the various aspects of
the matter, Das Gupta J, observed that in deciding, whether on principles of social justice, which it is the aim of industrial
adjudication to apply, in order to justify the payment of a retaining allowance to unskilled workmen in these sugar
industries, it is necessary to take into account:

(a) the opportunity of alternative employment in the off-season, that will be available to such workmen;

(b) the degree in which such workmen can be said to have become attached to the particular factory where they work;

(c) the likely benefit to the industry; if such workmen are induced to return to the factory, by the incentive of retaining
allowance to be paid while the season commences; and
(d) the capacity of the industry to bear the burden of a retaining allowance.

Certain benefits paid to the workmen, if withdrawn by the employer, on the provisions of the Employees’ State Insurance
Act 1948 being made applicable to the establishment, to the admissible extent, would give rise to an industrial dispute, as it
would be a dispute connected with the ‘terms of employment or with the conditions of labour’ of the workmen. Such a
dispute would be validly referable under s 10 of the Industrial Disputes Act.55 For instance, in Nawabganj Sugar, there was
an order by the UP government to pay a retaining allowance to the workmen employed in the sugar factories in Uttar
Pradesh, which expired in 1950. Even after the expiry of the said order, the sugar factories continued to pay the retaining
allowance at a certain rate, to their clerks, for the off-season. The employer company had also been paying the retaining
allowance to its clerks for about five years after the expiry of the order of the government. But for the off-seasons 1954-59,
the company paid the retaining allowance only to some of its clerks, while denying the same to the others. The tribunal
directed the company to pay to the concerned workmen, the same retaining allowance as was paid to the others. In appeal,
the company could not explain to the Supreme Court as to how and why it paid the retaining allowance to half of the
seasonal clerks and not to the others. It was therefore, held that, in view of the facts of the case, and the practice followed
by the other factories in the neighbourhood, the company could not make any distinction in the payment of the retaining
allowance, by paying it to some of its clerks and denying it to others.56

(v) Over-time Allowance:

Section 59 of the Factories Act 1948, prescribes that a worker who works over-time in a factory, shall be entitled to twice
his ordinary rate of wages in respect of the over-time work. And for the purposes of calculating such over-time, the
expression ‘ordinary rate of wages’ has been defined to mean the basic wage, plus such allowances, including the cash
equivalent of the advantage accruing on account of the concessional sale to workers of food grain and other articles, as the
worker is, for the time being, entitled to, but does not include a bonus. Section 33 of the Mines Act 1952 is in similar
terms. This provision specifically includes the dearness allowances in the definition of ‘ordinary rate of wages’. For
workers working in factories and mines, the rates of over-time have been fixed by relevant statutes. In Delhi Cloth Mills,
the power-plant operators of the mill claimed extra remuneration for having to forego half an hour’s rest interval, which, in
substance, was a claim for an over-time payment. The industrial tribunal made a rather startling observation, that these
operators were working continuously for eight-and-a-half hours in a day. But this could not be possible, as there were three

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shifts working in the mill. The employer’s case was that the wages were fixed in accordance to the fact that in view of the
nature of their work, they would be working for eight hours at a stretch, without the half hour’s interval admissible to the
other workmen. On the basis of the evidence on record, the Supreme Court held that the power plant operators were not
entitled to any extra remuneration for having to forego the half-hour rest interval.57

In their respective Shops and Establishments Acts, ‘some states have prescribed the rates of overtime work and the
overtime allowance is paid in accordance with the provisions of these statutes. Some such statutes even extend the
provisions of the Factories Act to certain establishments. For instance, s 70 of the Bombay Shops and Establishments Act
extends the provisions of the Factories Act beyond its usual scope and further provides that where the Act, as extended,
applies, the Shops and Establishment Act would not apply, except to a shop or establishment situated within the premises
of a factory; and it further enables the state government to extend the provisions of the Factories Act to any such shop or
commercial establishment, situated within the precincts of the factory. The effect of this provision is to supplement the
provisions of the Factories Act, by extending them to those persons who are employed in a factory, though they are not
‘workers’ within the meaning of s 2(1) of the Factories Act 1948.58 But the Shops & Establishments Acts of certain states
do not prescribe the rates of overtime work which the workmen may have to do. The question, therefore, of the fixation of
overtime rates in such cases, is left to industrial adjudication. In Karam Chand Thapar, the Supreme Court stated the
following principles for fixing the overtime allowance:

(i) Overtime allowance should have relation to the total wage packet, viz, basic wage plus dearness allowance.

(ii) It should be fixed on a consideration of the financial capacity of the company.

(iii) It should also be fixed in consonance with the practice prevalent in other concerns in the neighbourhood. 59

Accordingly, the court affirmed the award of the tribunal, fixing the overtime allowance at one-fourth times the wages, viz,
the basic wage plus the dearness allowance, in respect of the workmen working at the head office of the company, at
Calcutta. In another decision pronounced on the same day, ie, Jessop & Co, the court fixed the over-time allowance in case
of another company, having its head office at Calcutta, at one-half times the ordinary rate of wages, ie, the basic wage plus
the dearness allowance.60 In Indian Oxygen, the tribunal, after taking into consideration the overtime paid by other
industrial concerns in the region, awarded one-fourth times the ordinary wages, for overtime work exceeding 39 hours a
week, but not exceeding 48 hours and in cases where the work exceeded 48 hours, (48 hours of work being the maximum,
provided by the Bihar Shops and Establishments Act) at the rate of double the ordinary rates of wages, as provided in the
Act. The employer company challenged the award of the tribunal before the Supreme Court, on the ground that:

(i) the company’s factory at Jamshedpur, having been declared an establishment under the Bihar Shops and Establishments
Act, could be made liable to pay for overtime work at the rate provided in that Act, viz, at double the ordinary rate when
a workman was asked to work beyond 48 hours per week, as provided therein, but it could not be asked to pay more than
its ordinary rate of wages, payable to workmen, if they were asked to work beyond 39 hours, but less than 48 hours; and
(ii) the comparative statement of the overtime rates paid by other concerns in Jamshedpur, before the tribunal, showed that if
the company were made to pay one-fourth times its ordinary rate of wages, it would, in the light of the higher scales of
wages, be paying more than the other concerns.

The court observed that in view of the fact that the total hours of work per week were 39 hours, under the conditions of
service of the company, the workmen asked to work beyond those hours, would obviously be working overtime and the
company would be expected to pay them compensation for such overtime work. The Bihar Shops and Establishments Act,
therefore, had no relevance to this question, as that Act fixed the maximum number of hours of work allowable thereunder,
ie, 48 hours a week, and provided for double the rate of the ordinary wages, for work being done after the 48 hours. It was
not, therefore, as if the provisions of the Act governed the overtime payments, payable by the employer, where the
maximum hours of work were governed by the conditions of service prevailing in his establishment. If the company were
asked to pay at the rate equivalent to the ordinary rate of wages, for the work done beyond 39 hours, but not exceeding 48
hours work a week, it would be paying no extra compensation at all, for the work done beyond the agreed hours of work,
and it would mean that the working hours would indirectly be increased, consequently altering the conditions of service.
On this view of the matter, the court affirmed the award of the tribunal, as it was made after taking into consideration, the
comparatively higher scales of wages prevalent in the company.61

In Calcutta Electric Supply Corpn, the tribunal directed that the overtime rate for non-factory personnel should, in no case,
be less than the time-rate. And no employee should get an overtime at more than the time-rate, until he had completed 48
hours a week, but as soon as he exceeded 48 hours, the overtime should be one-half times the time-rate. This rate of

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overtime wage, in favour of non-factory personnel, was directed to be given effect from the date of the reference. The
workman challenged this award in appeal before the Supreme Court, in so far as the tribunal had limited the overtime
wages to the time-rate, for any period short of 48 hours a week. The court held that it was inclined to admit the appeal and
set aside the award of the tribunal and to direct that overtime should be paid at one-half times the hourly rate, for all hours
of work beyond the scheduled hours and not merely for hours of work beyond 48 hours in a week and this had to apply
from the date of the order of the court. However, in view of the heavy financial burden of the retrospective effect of the
proposed increase of overtime wages and in view of the further delay involved in the remand of the case, for ascertaining
the financial capacity of the company, the parties agreed to a suggestion of the court, that in respect of the overtime period
for hours worked in excess of the scheduled hours, up to 48 hours, should be one-half times the hourly rate, instead of the
hourly rate, which the company had already paid in terms of the award.62

(vi) Compensatory Allowance:

The adjectival expression—’compensatory’—used in the phrase ‘compensatory allowance’, is indicative of the fact that
such an allowance is a compensation for something. For instance, the allowance paid to the workmen, for the work done
on holidays, has been treated as a compensatory allowance. Likewise, an allowance paid in lieu of any benefit, to which
the workmen, for the time being, are entitled, would fall within the ambit of such an allowance. Compensatory allowance
and other allowances have been included as item two in the Third Schedule to the Industrial Disputes Act. In Shaparia
Dock & Steel, the labour appellate tribunal awarded a compensatory allowance to the daily-rated workmen. Timely-rated
workmen were given twice their normal rates of wages, for work on weekly rest days and holidays, provided that where a
worker was given an alternative day of rest in place of the weekly day of rest, the extra payment for him was fixed only at
half the normal wage. As regards the watchmen, on the facts of the case, the tribunal directed that they should also get
emoluments, equal to that of the daily-rated workers.63

(vii) Acting Allowance:

Acting allowance is the allowance paid to an employee when he is acting in a higher post, on the employee holding the
higher post proceeding on leave or otherwise, being away from his duties. The recognised principle with respect to acting
allowance is that the acting incumbent will get an acting allowance equivalent to the difference between his salary and the
minimum salary of the higher post in which he is acting, subject to a maximum of 25 percent of the incumbent’s basic
salary. In Burn & Co, the employer was following this rule. But adjudicating on an industrial dispute, regarding a revision
of the acting allowance, the tribunal awarded the difference between the actual pay of the incumbent and the actual pay of
the person in whose place the incumbent employee acted, subject to a maximum of 25 per cent of his basic salary. The
tribunal did not alter the existing rules, but in modifying the rules regarding the acting allowance, it took the view that the
acting man does practically the same work as was done by the person for whom he was acting and the company derives
benefit from his work. In appeal, the Supreme Court set aside the order of the tribunal in this respect, as it was inconsistent
with the recognised principle in respect of the fixing of the acting allowance.64

(viii) Special Allowance:

A special allowance may be granted to the workmen, in view of certain special circumstances peculiar to a situation or
where they have to run some special risk. For instance, a special allowance in banks is paid in terms of the Shastri and
Desai awards, when an employee discharges duties of a supervisory nature or is accorded the status of a person competent
to discharge functions of a supervisory character. In VABhide, dealing with the claims of the employees, for the payment of
a special allowance, granted to the supervisors under the Shastri and Desai awards, the Supreme Court held that before a
person can claim the supervisory or special allowance, he must establish that he is discharging duties and functions which
are similar to or the same as the duties or functions assigned to supervisors, under those awards.65 In Reserve Bank of
India, the bank gave a special allowance to its officers, to accept a transfer to Gauhati in the North Eastern region. This
allowance was available only to such officers as were posted in Gauhati on transfer from areas outside the north eastern
region, to mitigate the hardships faced by them on such transfer. In the peculiar facts and circumstances of the case, the
Supreme Court did not countenance the challenge to the payment of such allowance, to the officers transferred from
outside the north eastern region, on the ground of discrimination.66

Likewise, in Haroon Rashid, also, the Supreme Court upheld the award of the tribunal. In this case, a special pay of Rs 35
was granted to 10 per cent of the junior accountants. This special pay was not granted to them in lieu of promotion, for
having been stagnated in the lower post or grade, but it was granted for handling more complex and important work. Such
junior accountants were entitled to this special pay till they were appointed to the next promotional post of senior
accountant. It was a kind of an intermediate level of post or grade. Therefore, this special pay had to be taken into account,
while fixing their pay on promotion.67 In Gramphone Co, the sepoys who were entrusted with the work of carrying money
from the bank and who were doing duplicating and filing work as well, claimed a special allowance. The award of the
tribunal, rejecting the demand, in view of the fact that the office of the company was situated in the heart of the city and

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not at a long distance from the bank and the sepoys carrying money, did not carry any risk and the duty of bringing money
from the bank was not strenuous as compared to any other duty usually allotted to the sepoys, and that the duplicating and
filing work was not of such a nature as to call for any special allowance, was affirmed by the Supreme Court.68 In
SSDhaliwal, certain bank employees claimed a special allowance under the Shastri and Desai Awards and the bipartite
settlements. However, these awards specified only the posts which would carry the special allowance and not the duties
which carried the special allowance. The Division Bench of the Delhi High Court held that the claims of the employees
would require the determination of the question of whether the special allowance went with posts only, or was also payable
for discharging certain duties, which could be done on a reference under s 10(1), and not under s 33C(2) of the Act.69

48 Morgan v Fry [1968] 3 WOR 506, 516, per Lord Denning MR.
49 Andhra Pradesh SRTCE Union v APSRTC 1970 Lab IC 1225, 1226 CAP), per Chinnappa Reddy J.
50 Federated MSCEU of Australia v Melbourne Corpn [1918-19] 26 CLR 508, 552-53 (HCA).
51 Conway v Wade [1909] AC 506, 511 (HL), per Lord Lorwburn LC.
52 Kairbetta Estate v Rajmanickam (1960) 2 LLJ 275 [LNIND 1960 SC 92], 278 (SC), per Gajendragadkar J.
53 Gujrat Steel Tubes Ltd v GST Mazdoor Sabha (1980) 1 LLJ 137 [LNIND 1979 SC 464] (SC), per Krishna Iyer J.
54 BR Singh v Union of India 1990 Lab IC 389, 396 (SC), per Ahmadi J.
55 RE Mathew, Labour Relations and the Law, 1953, p 563.
56 Swadeshi Industries Ltd v Workmen (1960) 2 LLJ 78 [LNIND 1960 SC 7], 81 (SC), per Das Gupta J.
57 Syndicate Bank v K Umesh Nayak (1994) 2 LLJ 836, 849 : AIR 195 SC 319 (SC), per Sawant J.
58 Coimbatore PMDPTM Sangam v State of TN (1986) 1 LLJ 303, 305-06 : (1984) 2 MLJ 102 [LNIND 1983 MAD 337] (Mad) (DB),
per Gokulakrishnan J.
59 Gwalior Rayons Silk Mfg (Wvg) Co Ltd v Distt Collector 1982 Lab IC 367, 370 (Ker), per TC Menon J.
60 Dorchy v Kanasas 71 L Ed 248.
61 Andhra Pradesh SRTCE Union v APSRTC 1970 Lab IC 1225, 1226 (AP), per Chinnappa Reddy J.
62 Raja Bahadur Motilal Poona Mills v Tukaram P Musale (1957) 1 LLJ 258 [LNIND 1956 SC 88] (SC), per Govinda Menon J.
63 BR Singh v Union of India 1990 Lab IC 389, 396 (SC), per Ahmadi J.
64 Mgmt of Churakulam Tea Estate v Workmen (1969) 2 LLJ 407 [LNIND 1968 SC 256] (SC), per Vaidialingam J.
65 Bank of India v TS Kelawala (1990) 2 LLJ 39 [LNIND 1990 SC 308], 50 (SC) per Sawant J.
66 Mgmt of Chandramalai Estate v Workmen (1960) 2 LLJ 243 [LNIND 1960 SC 107], 246 (SC), per Das Gupta J.
67 National Transport General Co Ltd v Workmen 10 FJR 409, 411 (LAT).
68 Western India Match Co Ltd v Wimco Mazdoor Union (1957) LAC 322(LAT.
69 Chandramalai Estate, Emakulam v Workmen (1960) 2 LLJ 243 [LNIND 1960 SC 107] (SC), per Das Gupta J.
70 Mgmt of Fertilizer Corpn of India v The Workmen (1970) 2 LLJ 25 (SC), per Vaidialingam J.
71 Churakulam Tea Estate v Workmen (1969) 2 LLJ 407 [LNIND 1968 SC 256] (SC), per Vaidialingam J.
72 LIC of India v Amalendu Gupta (1988) 2 LLJ 495, 505 (Cal) (DB), per Baboo Lall Jain J.
73 Crompton Greaves Ltd v Workmen (1978) 2 LLJ 80, 82 (SC), per Jaswant Singh J.
74 Syndicate Bank v K Umesh Nayak (1994) 2 LLJ 836, 849 : AIR 1995 SC 319 : (1994) 5 SCC 572 (SC), per Sawant J.
75 Sadul Textile Mills Ltd v Workmen (1958) 2 LLJ 632, 638 (Raj) (DB), per Wanchoo CJ.
76 Life Insurance Corpn of India v Amalendu Gupta (1988) 2 LLJ 495, 505 (Cal) (DB), per Baboo Lall Jain J.
77 India Gen. Navigation & Rly Co Ltd v Workmen (1960) 1 LLJ 13 [LNIND 1959 SC 182], 22 : AIR 1960 SC 219 [LNIND 1959 SC
182] (SC), per Sinha CJI.
78 Gujarat Steel Tubes v GST Mazdoor Sabha (1980) 1 LLJ 137 [LNIND 1979 SC 464] : AIR 1980 SC 1896 [LNIND 1979 SC 464]
(SC), per Krishna Iyer J.

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79 Crompton Greaves Ltd v The Workmen (1978) 2 LLJ 80, 82 : AIR 1978 SC 1489 (SC), per Jaswant Singh J.
80 Syndicate Bank v K Umesh Nayak (1994) 2 LLJ 836 (SC), per Sawant J.
81 Ludwig Teller, Labor Disputes & Collective Bargaining, 1940, Vol 1, p 237, s 78.
82 Iron Moulders Union v Allis Chalmers 20 LRA (NS) 315.
83 Keith Theatre v Vachon 134 ME 392.
84 Express Newspapers (P) Ltd v Michael Mark (1962) 2 LLJ 220 [LNIND 1962 SC 242], 223 : AIR 1963 SC 1141 [LNIND 1962
SC 242] (SC), per Mudholkar J.
85 Oriental Textile Finishing Mills v LCT (1971) 2 LLJ 505 [LNIND 1971 SC 426], 510 : AIR 1972 SC 277 [LNIND 1971 SC 426]
(SC), per Jaganmohan Reddy J.
86 India General Navigation & Rly Co Ltd v Workmen (1960) 1 LLJ 13 [LNIND 1959 SC 182], 22 (SC), per Sinha CJI.
87 Jairam Sonu Shogale v New India Rayon Mills Co Ltd (1958) 1 LLJ 28, 30 (Bom) (DB), per Dixit J.
88 BR Singh v Union of India 1990 Lab IC 389, 397 (SC), per Ahmadi J.
89 Model Mills Ltd v Dharamdas (1958) 1 LLJ 539 [LNIND 1957 SC 110] : AIR 1958 SC 311 [LNIND 1957 SC 110] (SC), per
Imam J.
90 Bata Shoe Co Pvt Ltd v DN Ganguly (1961) 1 LLJ 303 [LNIND 1960 SC 345] : AIR 1961 SC 1158 [LNIND 1960 SC 345], per
Wanchoo J.
91 Oriental Textile Finishing Mills v LC (1971) 2 LLJ 505 [LNIND 1971 SC 426], 510-11 : AIR 1963 SC 1141 [LNIND 1962 SC
242] (SC), per Jaganmohan Reddy J.
92 IMH Press v Additional Industrial Tribunal (1961) 1 LLJ 499 [LNIND 1960 SC 110], 501 (SC), per Wanchoo J.
93 Vasanti M Shah v All India HFMC Society Ltd (1986) 1 LLJ 69, 76 : (1985) 1 GLR 281 (Guj) (DB), per Majmudar J.
94 Gujarat Steel Tubes Ltd v Gujarat Steel Tubes Mazdoor Sabha (1980) 1 LLJ 137 [LNIND 1979 SC 464], 165 (SC), per Krishna
Iyer J.
95 Bharat Barrel & Drum Mfg Co Pvt Ltd v FH Lala 1978 Lab IC 31 (Bom) (DB), per Tuljapurkar CJ.
96 Lakshmi Devi Sugar Mills Ltd v Ram Sarup (1957) 1 LLJ 17 [LNIND 1956 SC 85] (SC), per Bhagwati J.
97 Punjab National Bank Ltd v Workmen (1959) 2 LLJ 666 [LNIND 1959 SC 166] (SC), per Gajendragadkar J.
1 India General Navigation & Rly Co Ltd v Workmen (1960) 1 LLJ 13 [LNIND 1959 SC 182], 22 : AIR 1960 Sc 219 [LNIND 1959
SC 182] (SC), per Sinha CJI.
2 Swadeshi Industries Ltd v Workmen (1960) 2 LLJ 78 [LNIND 1960 SC 7] (SC), per Das Gupta J.
3 Changunabai C Palkar v KM Mills Ltd (1992) 2 LLJ 640, 643 (Bom) (DB), per PD Desai CJ.
4 Gujarat Steel Tubes Ltd v GST Mazdoor Sabha (1980) 1 LLJ 137 [LNIND 1979 SC 464] : AIR 1980 SC 1896 [LNIND 1979 SC
464] (SC), per Krishna Iyer J.
5 India Gen Navigation & Rly Co Ltd v Workmen (1960) 1 LLJ 13 [LNIND 1959 SC 182], 22 : AIR 1960 SC 219 [LNIND 1959 SC
182] (SC), per Sinha CJI.
6 Bengal Bhatdee Coal Co v Ram Prabesh Singh (1963) 1 LLJ 291 [LNIND 1963 SC 13], 294 (SC), per Wanchoo J.
7 Burn & Co Ltd v Workmen (1959) 1 LLJ 450 [LNIND 1958 SC 174], 454 (SC) : AIR 1959 Sc 529 [LNIND 1958 SC 174], per
Imam J.
8 Bata Shoe Co v DN Ganguly (1961) 1 LLJ 303 [LNIND 1960 SC 345], 310 (SC), per Wanchoo J.
9 Northern Dooars Tea Co Ltd v Workmen of DDTE (1964) 1 LLJ 436 [LNIND 1963 SC 184], 441 (SC), per Gajendragadkar J.
10 Bata Shoe Co v DN Ganguly (1961) 1 LLJ 303 [LNIND 1960 SC 345], 310 (SC), per Wanchoo J.
11 Buckingham & Carnatic Co Ltd v Workers (1953) 1 LLJ 181 [LNIND 1952 SC 77] : AIR 1953 SC 647 (SC), per Mahajan J.
12 Mgmt of Fertiliser Corpn of India v Workmen (1970) 2 LLJ 25, 39 : AIR 1970 SC 867 [LNIND 1968 SC 340] (SC), per
Vaidialingam J.
13 Crompton Greaves Ltd v Workmen (1978) 2 LLJ 80, 82 : AIR 1978 SC 1489 (SC), per Jaswant Singh J.
14 Syndicate Bank v K Umesh Nayak (1994) 2 LLJ 836, 840, per Sawant J.
15 Bank of India v TS Kelawala (1990) 2 LLJ 39 [LNIND 1990 SC 308] : (1990) 4 SCC 744 [LNIND 1990 SC 308] : [1990] 3 SCR
214 [LNIND 1990 SC 308] (SC), per Sawant J.
16 Syndicate Bank v K Umesh Naik (1994) 2 LLJ 836 : AIR 1995 SC 319 (SC), per Sawant J.

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17 The Statesman Ltd v Workmen (1976) 1 LLJ 484 [LNIND 1976 SC 5], 489 : AIR 1976 SC 758 [LNIND 1976 SC 5] (SC), per
Krishna Iyer J.
18 Cf, Kairbetta Estate v Rajamanickam (1960) 2 LLJ 275 [LNIND 1960 SC 92], 278 (SC), per Gajendragadkar J.
19 Secy of State v Associated Society of LEF [1972] 2 All ER 949, 967 (CA), per Lord Denning MR.
20 Algemene Bank v CGLC 1978 Lab IC 47, 55 (Cal), per Sabyasachi Mukherji J.
21 Swastik Textiles Engineers Pvt Ltd v RS Santsingh (1984) 2 LLJ 97 : (1984) 1 GLR 470 (Guj) (DB), per Mankad J.
22 NLCWPU v Neyveli Lignite Corpn Ltd (2001) 1 LLN 948,952 (Mad), per Karpagavinayagam J.
23 Bank of India v TS Kelawala (1990) 2 LLJ 39 [LNIND 1990 SC 308] (SC), per Sawant J.
24 Mgmt of Churakulam Tea Estate (P) Ltd v Workmen (1969) 2 LLJ 407 [LNIND 1968 SC 256] (SC), per Vaidialingam J.
25 Crompton Greaves Ltd v Workmen (1978) 2 LLJ 80, 82 (SC), per Jaswant Singh J.
26 India General Navigation & Railway Co Ltd v Workmen (1960) 1 LLJ 13 [LNIND 1959 SC 182] : AIR 1960 SC 219 [LNIND
1959 SC 182]) (SC), per Sinha CJI.
27 Gujarat Steel Tubes Ltd v GST Mazdoor Sabha (1980) 1 LLJ 137 [LNIND 1979 SC 464], 168 (SC), per Iyer J.
28 Rohtas Industries Ltd v Rohtas Industries Staff Union (1976) 1 LLJ 274 [LNIND 1975 SC 523] : AIR 1976 SC 425 [LNIND 1975
SC 523] (SC), per Krishna Iyer J.
29 Government of India (2002), Report of NCL-II, Chap 13, pp 39-40.
30 HD Singh v Reserve Bank of India 1985 Lab IC 1733, 1738 : AIR 1986 SC 132 [LNIND 1985 SC 278] (SC), per Khalid J.
31 Promer Sales Pvt Ltd v Manohar Sondhur 1993 Lab IC 1762, 1766 (Bom), per Kantharia J.
32 Govt of Tamil Nadu v TNRCGE Union (1993) 1 LLJ 977 (Mad) (DB), per Abdul Hadi J.
33 P Rajeev v Karnataka SCC Ltd (1992) 1 LLJ 217, 222 : 1990 (3) ar LJ 1 (Kant), per Shivashankar Bhat J.
34 Assn. of SRT Undertakings v Employees Union 1986 Lab IC 1543 (Del), per Luthra J.
35 Regional Manager, SBI v Raja Ram (2004) 8 SCC 164.
36 Regional Manager, SBI v Rakesh Kumar Tewari AIR 2006 SC 839 [LNIND 2006 SC 6]: (2006) 1 SCC 530 [LNIND 2006 SC 6],
per Ms Ruma Pal J.
37 Hindustan Lever Ltd v IT (2008) 1 LLJ 222 [LNIND 2007 ALL 39] : (2007) 7 AWC 7014 (All .), per Rajesh Kumar J.
38 Government of India (2002), Report of NCL-II, Chap 13, p 40, para 6.40.
39 Bhagaband Colliery v Workmen (1962) 2 LLJ 356 [LNIND 1962 SC 244] (SC), per Mudholkar J.
40 Bennett Coleman & Co Pvt Ltd v Punya Priya Das Gupta (1969) 2 LLJ 554 [LNIND 1969 SC 150], 565-66 : AIR 1970 SC 426
[LNIND 1969 SC 150] (SC), per Shelat J.
41 Algemene Bank v CGLC 1978 Lab IC 47 (Cal), per Sabyasachi Mukharji J.
42 Muir Mills Co Ltd v Workmen (1960) 2 LLJ 586 [LNIND 1960 SC 112], 590-91 (SC), per Das Gupta J.
43 Mc Leod & Co Ltd v Workmen (1964) 1 LLJ 386 [LNIND 1963 SC 272], 387-88 : AIR 1964 SC 1449 [LNIND 1963 SC 272]
(SC), per Gajendragadkar J.
44 River Navigation Co Ltd v Employees CA Nos 916 and 692 of 1965 (1967), per Subba Rao CJI.
45 Remington Rand of India Ltd v The Workmen CA No 856 of 1968 (1968) (SC), per Shelat J.
46 Ibid, connected with CA No 2119 of 1969.
47 Statesman Ltd v Workmen (1976) 1 LLJ 484 [LNIND 1976 SC 5], 488 : AIR 1976 SC 758 [LNIND 1976 SC 5] (SC), per Krishna
Iyer J.
48 Workmen of Calcutta Port Commrs v CP Commrs CA No 973 of 1966 (1969) (SC), per Vaidialingam J.
49 Chandramalai Estate v Workmen (1960) 2 LLJ 243 [LNIND 1960 SC 107] : AIR 1960 SC 902 [LNIND 1960 SC 107] (SC), per
Das Gupta J.
50 DCM Chemical Works v Workmen (1962) 1 LLJ 388 [LNIND 1962 SC 97], 399 : [1962] Supp 3 SCR 516 (SC), per Wanchoo J.
51 Remington Rand of India Ltd v Workmen (1968) 1 LLJ 542 [LNIND 1967 SC 225] : AIR 1968 SC 224 [LNIND 1967 SC 425]
(SC), per Mitter J.
52 Mgmt. of Kirloskar Electric Co Ltd v Workmen (1973) 2 LLJ 305 [LNIND 1973 SC 201] : AIR 1973 SC 2119 [LNIND 1973 SC
201] (SC), per Grover J.

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53 Statesman Ltd v Workmen (1976) 1 LLJ 484 [LNIND 1976 SC 5], 488 : AIR 1976 SC 758 [LNIND 1976 SC 5] (SC), per Krishna
Iyer J.
54 Rohtas Sugar Ltd v Mazdoor Seva Sangh (1960) 1 LLJ 567 [LNIND 1960 SC 39], 569-71 : AIR 1960 SC 671 [LNIND 1960 SC
39] (SC), per Das Gupta J.
55 Basant Kumar Sarkar v Eagle Rolling Mills Ltd (1964) 2 LLJ 105 [LNIND 1964 SC 52] (SC), per Gajendragadkar CJI.
56 Nawabganj Sugar Mills Co Ltd v Workmen (1964) 1 LLJ 750 [LNIND 1963 SC 309] (SC), per Wanchoo J.
57 Delhi Cloth & General Mills Co Ltd v Workmen (1964) 1 LLJ 55, 59 (SC), per Das Gupta J.
58 BP Hira (WM, Central Rly) v CM Pradhan (1959) 2 LLJ 397 [LNIND 1959 SC 107] (SC), per Gajendragadkar J.
59 Karam Chand Thapar & Bros Ltd v Workmen (1964) 1 LLJ 429 [LNIND 1963 SC 178], 434-35 (SC), per Das Gupta J.
60 Workmen of Jessop & Co Ltd v Jessop & Co Ltd (1964) 1 LLJ 451 [LNIND 1963 SC 179], 454-55 (SC), per Wanchoo J.
61 Indian Oxygen Ltd v Workmen 1969 Lab IC 467, 472-73 (SC), per Shelat J.
62 Workmen of Calcutta Electric Supply Corpn Ltd v CESC Ltd (1973) 2 LLJ 258 [LNIND 1973 SC 179] : AIR 1973 SC 2143
[LNIND 1973 SC 179] (SC), per Mukherjea J.
63 Engineering Mazdoor Sabha v Shaparia Dock & Steel Co Ltd (1957) 1 LLJ 324 (LAT).
64 Burn & Co Ltd v Workmen (1959) 1 LLJ 450 [LNIND 1958 SC 174], 459 (SC), per Imam J.
65 State Bank of Hyderabad v VA Bhide (1969) 2 LLJ 713 [LNIND 1969 SC 181] : AIR 1970 SC 196 [LNIND 1969 SC 181]: (1969)
2 SCC 491 [LNIND 1969 SC 181] (SC), per Vaidialingam J.
66 Reserve Bank of India v RBI Staff Officers Assn, AIR 1992 SC SC 485 : (1991) 4 SCC 132 [LNIND 1991 SC 361] (SC), per Kania
J.
67 Union of India v Mohd Haroon Rashid 1995 Lab IC 1634 (SC).
68 Gramphone Co Ltd v Workmen (1964) 2 LLJ 131 [LNIND 1964 SC 114], 138 (SC), per Wanchoo J.
69 Union Bank of India v SS Dhaliwal 1980 Lab IC 26 (Del) (DB), per Prakash Narain J.

End of Document

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER I Preliminary

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER I Preliminary

S. 2. Definitions.—

(ix) Moving Staff Allowance:

In Remington Rand, the workmen employed in the Eranakulam branch of the company, demanded that those workmen
who were deputed on tout, on the company’s work, should be given a day off if they had to travel two nights
consecutively. A further demand was made that the travelling staff should be paid overtime for the work done on holidays
while on tour, at double the normal wages for the day. The tribunal, on examining a mechanic who used to go on tours,
found that the jurisdiction of the Ernakulam branch was limited to the districts of Trivandrum, Quilon, Alleppey and
Kottayam and that even if he was forced to work on holidays, he was given over-time wages. But in spite of these findings,
it held that it was only just and reasonable that the touring mechanics should be given a day off, if they travelled on two
consecutive days, for reaching a place of work and also an overtime at double the rate, for the work done on holidays. In
appeal against the award of the tribunal, by the employer, the Supreme Court observed that, in view of the limitation as to
the jurisdiction of the branch noted above, the occasion for a mechanic spending two consecutive nights for reaching a
place of work, will arise very seldom and if such an occasion does arise, there was no reason why a workman should not
get the overtime wages as awarded by the tribunal.70 Project allowance paid to the employees falls within the definition of
‘wages’ in s 2(rr), and any reduction of the said allowance amounts to change in the conditions of service in terms of s 9A
of the Act.71

(x) Key Allowance:

In Indian Overseas Bank, a key allowance was paid to its cashiers from 15 September 1958, but it was discontinued after
the Desai Award, with effect from 1 December 1962. On a dispute being raised with respect to the stoppage of the
allowance to the head cashier of the Chandni Chowk, Delhi branch of the bank, the tribunal found that the key allowance
was not a part of the benefits under the Shastri Award and it was introduced as a result of a separate agreement between the
bank and the head cashier. In view of the fact that the key allowance was a term and condition of employment of the head
cashier, it was held that the bank could not discontinue the allowance, except after following the procedure laid down by s
9A of the Industrial Disputes Act and r 34 of the Industrial Disputes (Central) Rules 1957. Since that procedure had not
been followed, the key allowance was payable from 1 December 1962, till such time when it could be said to be legally
discontinued. Affirming the award of the tribunal, the Supreme Court observed that the key allowance was payable even
after the Desai Award, as the correct procedure was not followed by the bank while discontinuing the allowance.72

(xi) Vacation Allowance:

In Polychem, the industrial tribunal allowed the demand of the workmen of the company, claiming a vacation allowance
for the workmen, at the same rate as was granted to the higher staff of the company, both at the head office and at its
Chembur plant. This award was challenged by the company before the Supreme Court, on the ground that there was no
evidence in support of the conclusions arrived at by the tribunal and that it proceeded on grounds which were irrelevant
and contrary to the settled principles relating to the adjudication of industrial disputes. Furthermore, nowhere in the region,
was the vacation allowance granted in similar industries and thus, there was no comparable instance. It was further pointed
out that the workmen in the establishment, were getting various other amenities, like dearness allowance, according to the
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revised textile rates, overtime wages, lunch allowance (not allowed to officers), gratuity, uniforms and medical facilities. It
was, therefore, urged that the real criterion should have been the overall pay structure of the workmen, in the light of the
standard prevailing in similar industries in the same region and the mere capacity of the employer to pay, should not be the
sole criterion. In the circumstances of the case, the court took the view that the tribunal committed a serious error in not
considering the other allowances and other amenities allowed to the respondent workmen and comparing their total wage-
packet, with the total wage-packet, of those employees to whom the allowance in question had been allowed, when
determining this question, and the question in issue was virtually decided exclusively, on the basis that the employer had
the financial capacity to stand the burden of such allowance being granted to the workmen, at the same higher rate slab,
with the same conditions. The court observed:

The difference between the amenities allowed to the workmen and to the staff to whom the vacation allowance is granted, must, in
law and justice, be looked into and the question then decided, whether or not the present workmen’s demand is justified. The
principle of region-cum-industry has no doubt to be kept in view, but then the comparable industries in the region have to be
considered from all the relevant aspects which have been laid down by this court in various decisions...But to what extent that
should weigh with the tribunal is for the tribunal to decide in the light of all the relevant circumstances. The total wage packet of
the various categories of employees in the appellant’s industry itself, including the question of their nature of duties and functions,
however, deserves to be given primary importance so that there is no reasonable chance of heart-burning and discontentment
amongst the different categories of workmen, on account of the differential treatment which, though seemingly justifiable, may, in
real effect, be discriminatory. The importance of appropriate standardisation of wages in the appellant-industry, on a proper
consideration of the duties and functions of the different categories of employees, must be kept in view in deciding the present
dispute.73

In Shaw Wallace, the award of the tribunal, with respect to an yearly travelling allowance, maintaining the rate of train fare
as agreed between the parties, but with the modification that a workman who is visiting his home town or village, shall be
entitled to an actual class 2 train fare for the outward and return journey for himself, his wife and dependent children, once
a year, was upheld by the Calcutta High Court. The court observed that the additional benefit conferred on the workman
was, as a matter of fact, a bare necessity, considering the rising prices, the cost of living index and considering the fact that
an annual holiday is required for the purpose of a proper and efficient discharge of his duty by a workman.74

(xii) Education Allowance for Employees’ Children:

In Hindustan Aeronautics, the workmen of the company, employed in their Barrackpore branch, engaged in repairs of
aircrafts, claimed an allowance for the education of their children, on the basis that education facilities were available to
the workmen at Bangalore. On the other hand, the employer company pleaded that certain educational facilities were given
to the employees living in the township of the company at Bangalore, but not to those living in the city of Bangalore and
the workmen working at Barrackpore had also been provided with certain educational facilities. The tribunal directed the
employer company to pay Rs 12 per month, to each employee, to meet the educational expenses of their children,
irrespective of the number of children a particular workman may have, despite the fact that, strictly speaking, the claim for
the education allowance, could not form the subject-matter of the industrial dispute in question. The award of the tribunal
was set aside by the Supreme Court, holding that in substance and in effect, the direction given by the tribunal in this
connection, was by way of a revision of the wage-structure of the employees and it was beyond the scope of the issue
referred for adjudication, as no such reference was either asked for, or made.75

Sub-clause (i) - Dearness Allowance:

Dearness allowance has been comprehended in the definition of, wages’, by the inclusive cl (i). It is the additional payment
made by an employer to his employees, to compensate them to a certain extent, for the rise in the cost of living.76 The
process of the rise in prices continues with the passage of time and the improvement in economic conditions. Even a fair
wage, fixed for the time being, tends to sag downwards and adjustments in wage levels becomes necessary. To a certain
extent, the disparity is made up by the payment of the dearness allowance. In Hindustan Antibiotics, the award of the
tribunal merging a portion of DA with the basic wage and linking the balance to the cost of living was challenged on the
ground that it amounted to granting Dearness Allowance on Dearness Allowance. Repelling the contention, Subba Rao,
CJI rightly observed:

“The doctrine of dearness allowance was only evolved in India. Instead of increasing wages as it is done in other countries,
dearness allowance is paid to neutralise the rise in prices. This process was adopted in expectation that one day or other we would
go back to the original price levels. But, when it was found that it was only a vain hope or, at any rate, it could not be expected to
fall below a particular mark, a part of the dearness allowance was added to the basic wages, that is to say, the wages to that extent
were increased. While the Tribunal increased the wages, in fixing the dearness allowance, it looked into the overall picture,

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namely, whether the total wage packet would approximate to the total packet of wages in comparable industries. There is no
question, therefore, of paying dearness allowance on dearness allowance, but it was only a payment of dearness allowance in
addition to the increased wages. Even on the basis of the increased wages, dearness allowance was necessary to neutralise the rise
in prices. That is exactly what the Tribunal has done.”77

In the words of Desai J:

Dearness allowance is directly related to the erosion of real wages by the constant upward spiralling of the prices of basic
necessities and as a sequel to the inflationary input, the fall in purchasing power of the rupees...Dearness allowance is inextricably
intertwined with price rise, it being an attempt to compensate loss in real wages on account of price rise, considered as a passing
phenomenon, by compensation. That is why it is called variable dearness allowance...Dearness allowance, by its very form and
name, has an intimate relation to the prevailing price structure of basic necessities at the centre in which the workman is
employed.78

The system of dearness allowance as a separate component of wages, in contradistinction to the ‘basic wage’, is a special
feature, peculiar to India. To a certain extent, it is also prevalent in some Asian countries. But in the industrialised
countries, wages themselves are adjusted to neutralise the increase in the prices and the rise in the cost of living. In the
United States of America, Belgium, Denmark and Italy, the ‘escalator clauses’, which are somewhat similar to linking the
total wage to the index, are common. In some agreements in the United States, another device, known as the ‘wage
reopening clause’, has been used. In this system, all other clauses remain undisturbed, except the one which relates to
wages, which can be reopened even during the pendency of the contract. This system is prevalent in Norway and Sweden
as well. In some Asian countries, systems somewhat similar to the ‘dearness allowance’ in India, are in vogue. For
instance, in Ceylon, there are several allowances, such as, ‘cost of living allowance’, ‘rent allowance’ and ‘special living
allowance’, which have the same effect as the ‘dearness allowance’ in India. A somewhat similar system is prevalent in
Pakistan also. In Japan, wages include a cost of living allowance and rent allowance. The NCL-I observed:

...while some form of relationship between wage levels and cost of living increase is preferred, the form of the relationship varies.
While the predominant pattern appears to be the adjustment of the wages as a whole, the practice of keeping the compensation for
price increase as a separate element, also exists; both arrangements have their own advantages and disadvantages. The main
advantage claimed for the latter is its flexibility...while wage rates cannot be brought down because of a fall in prices, the dearness
allowance, if kept as a separate element, can. The system can also be designed to reduce the time-lag between the price increases
and the payment of compensation therefor. The opposite view is that the way the system has operated all these years, has resulted
in a complete distortion of the wage-structure, with the dearness allowance portion, in certain areas, being several times the size of
the basic wage. This may have an adverse repercussion on incentives and productivity. The system of DA, as it has evolved in this
country, may, under certain circumstances, add to the inflationary tendencies.79

In India, with the rise of prices during the first world war, there started a clamour in different industries and different
centres, to secure compensation for the rising prices of commodities. In Ahmedabad, the demand led to the epic fast of
Mahatma Gandhi and it succeeded in securing for workers, the principle of protecting their real wage in the event of a
substantial rise in the prices. This compensation, presently termed as ‘dearness allowance’ (DA), was, at some centres,
called ‘dear-food allowance’ (to emphasise its food component) in the early stage of its being recognised as a separate
component of the remuneration for work. In the inter-war period, and particularly during recession, these allowances were
adjusted, taking into account the lower price level. The practice of paying a ‘dearness allowance’, as distinct from the
‘basic-wage’, had these early beginnings.80 The outbreak of the second world war ruptured the relationship between the
wages and the price-line, which, in its train, brought a spate of industrial disputes in perhaps, all the industrial centres in
the country. Consequently, a compensation for the increase in the prices was sought to be secured during this period,
through the machinery of industrial adjudication, set up for the settlement of such disputes. Dearness allowance was
primarily intended to be a temporary expedient and was sought to be made as a protection to those who had no cushion at
all, in their wage-packet, in the face of an appreciable rise in prices. Some relief was given to others as well. The price
indices have now assumed menacing figures. This is the stark reality of the situation and any problem regarding wages or
dearness allowance has to be considered in that background; at the same time, not losing sight of the national economy.81
In other words, dearness allowance was intended as the protection of persons whose salaries were at the subsistence level,
against the adverse effects of a rise in prices.82 In the language of Ahmadi J:

The concept of dearness allowance, the second most important element in a worker’s wage-plan, next to the basic wage, was
introduced during the second world war, to meet the increase in the cost of living caused by inflation. It was either linked to the

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cost of living index or was given by way of a flat increases. When linked to the former, it was granted to all the income groups at a
flat rate or was graded on a scale admissible to different income groups, diminishing with the rise in the income. Basically, the
concept of dearness allowance was designed to combat inflation and protect real wages and therefore, it would appear that there
should be cent per cent neutralisation. This is a concept peculiar to India, Ceylon, Pakistan and Bangladesh.83

The Commission on Dearness Allowance, in May 1967, stated that historically, dearness allowance was regarded as
applicable to those employees whose salaries were at the subsistence level or a little above, in order to enable them to face
the increase in the dearness of essential commodities. Industrial adjudication introduced a system of ‘dearness allowance’,
to supplement the wages of workmen, for neutralising the rise in the prices, in the expectation that one day or the other,
prices will go back to the original level, based on the assumption that the increase in the living costs was a phenomenon of
a temporary character and ‘the expectation was that such allowance would be adjusted downwards and would eventually
disappear’. But the hope that the prices will decline, never came true and ‘dearness allowance’ has, therefore, come to stay.
On realizing that the price level could not be expected to rail beyond a particular mark, a part of the ‘dearness allowance’
was added to the ‘basic wages’, that is to say, the wages, to that extent, were increased.84 According to one estimate, nearly
two thirds of the industrial working force is now being compensated on this basis. Thus, the prevalent system of ‘dearness
allowance’, originating as a protection against a fall in the real wages and temporary in character, has come to stay as a
part of the total wage structure.85 Even on the basis of the increased wages, dearness allowance still became necessary to
neturalise the rise in prices with the passage of time. Dearness allowance has thus, continued, for fuller neutralisation of
the rise in the cost of living, as a result of the ever rising price-line of commodities. In the last thirty years, besides
industrial tribunals and the Supreme Court, it has been discussed and accepted by various bodies. 86 Historically and by the
industrial texts as well as by the observations of various commissions and committees, dearness allowance was regarded as
applying to those employees whose salaries were at the subsistence level or a little above it...in order to enable them to face
the increasing dearness of essential commodities. The Government of India also set up a number of wage boards for
determining the terms of employment in several industries and such wage boards have generally sought to keep the
‘dearness allowance’ as a separate component of the wages, though some of them have recommended the merger of a
substantial part of it, with the basic wage. A tripartite meeting over the last 20 years, also felt the same way. On account of
the ephemeral nature of the price line, the system of dearness allowance cannot be constant and it varies from time to time,
centre to centre, and from industry to industry, within the same centre. In the language of Goswami J:

Like all changes in life and in a continuous march towards progress of society, the concept of dearness allowance also may change
to take in a wider range of commodities and services, to make life worth living as far as practicable, subject to the compelling
limitations of general interest... the old definition of dearness allowance may not even serve the climate of the new aspirations of
various classes of employees of this vast country. Luxuries of yesterday may be the comforts of today and necessities of tomorrow.
The economic solution must reckon the turn-abouts in social urges. Because even the worm turns. Industrial adjudication, which
has not the limitations of the ordinary courts, has to respond to the needs of the changing society and it may be possible to widen
the scope of dearness allowance, if that serves the cause of general welfare. There may be no inexorable rule, tying down economic
existence to a definition of bygone days, if unsuitable or irrelevant in the context of the times.87

In some cases, a flat rate of dearness allowance has been made applicable to all the employees, irrespective of their wages,
while in other cases, it has varied according to the wage or salary slabs. A graded percentage, linked to the wages or the
salaries, has also been linked to the working class consumer price index. This resulted in a variety of systems, with
dearness allowance linked to the index emerging dominant. The system of dearness allowance, as it has been evolved in
this country, may, under certain circumstances, add to the inflationary tendency. The NCL-I has considered these issues
and felt that the changes in money wages should be associated with the corresponding changes in the cost of living and
that, without such adjustment, the real wages would be eroded. In view of the fact that the system of dearness allowance
has come to stay in this country and, as in most of the cases, it is linked to the index, the commission has discussed the
issues arising out of such linkage in some detail, in its report.88 Since the object of dearness allowance is to neutralise the
rise in the cost of living, it would not be proper to adopt an academic or doctrinaire approach to the problem. In
considering the problem, industrial adjudication has necessarily, to adopt a pragmatic approach in fixing the dearness
allowance and has to take care and see that the legitimate demand of the employees is met without doing any injustice to
the employer and without acting unfairly to him.89 Desai J notes:

It is, by now, well-settled that dearness allowance to workmen at a particular place should depend upon the place, where the
workmen are working, irrespective of the fact that the industrial undertaking in which they are employed, is a unit of an industrial
enterprise, having an all India or inter-state operation.90

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Dearness allowance, therefore, has to be fixed after taking into account, the total emoluments or the total wage-packet of
the workers, viz, wages, production or incentive bonus, the existing dearness allowance, if any, and the value of other
amenities, like concessional food, quarters, water and light etc.91 In Wenger & Co (supra), though the Supreme Court did
not treat the tips received by the bearers in a restaurant, as a substitute, wholly or partially, for dearness allowance, nor
treated them as a payment made by or on behalf of the employers, it took into account a certain minimum of such tips in
determining the quantum of the dearness allowance, at a flat rate. In Rambagh Palace Hotel, the court observed that the
proper approach for the tribunal is to bear in mind the fact that tips are received, and make some suitable adjustment in that
behalf. The court reiterated that the receipt of tips by the staff is not anything like a payment made by the management to
its employees, warranting consideration by the tribunal, to depress the award of dearness allowance, though it is a factor
which may, perhaps, be borne in mind by the tribunal while finalising the actual figures of dearness allowance.92 In Bengal
Chemicals, the following guidelines were laid down:

1. Full neutralisation is not normally given, except to the very lowest class of employees.

2. The purpose of dearness allowance being to neutralise a portion of the increase in the cost of living, it should ordinarily,
be on a sliding scale and provide for an increase on the rise in the cost living and a decrease on a fall in the cost of
living.
3. The basis for the fixation of wages and dearness allowance should be industry-cum-region.

4. Employees getting the same wages, should get the same dearness allowance, irrespective of whether they are working as
clerks, members of subordinate staff for factory workmen.
5. The additional financial burden which a revision of the wage structure or dearness allowance would impose upon an
employer, and his ability to bear such burden, are very material and relevant factors to be taken into account.93

(i) Financial Capacity of the Employer:

By and large, the same principles govern the adjudication of wages and of dearness allowance. Hence, where dearness
allowance is to be awarded to supplement the basic-wage, which is below the minimum wage or subsistence wage, the
capacity of the industry or the employer to pay, is irrelevant.1 But, in other cases, the financial capacity of the industry, the
employer or the establishment, as the case may be, to pay, is a material factor to be taken into consideration in awarding
dearness allowance.2 In Millowners Assn, the Supreme Court emphasised that in trying to recognise and give effect to the
demand for a fair wage, including the payment of dearness allowance, to provide for an adequate neutralisation, industrial
adjudication must always take into account the problem of the additional burden which such wage structure would impose
upon the employer and ask itself, whether the employer can reasonably be called upon to bear such burden.3 In Filmistan,
the court reiterated that the tribunal...must examine the facts and figures relating to the financial position of the
establishment concerned, compare the said position with the financial position of comparable concerns, and inquire what
would be the total impact of the additional burden of the revised wage structure’. In other words, while considering the
claim for dearness allowance, industrial adjudication has to consider, whether an employer is capable of bearing the
additional financial burden, which may have to be imposed upon it on account of the increase in the dearness allowance.4
The financial capacity of the employer is a relevant consideration in this connection.5 The failure of the tribunal to adopt
such a course, would constitute a serious infirmity in its approach. Likewise, it is obligatory on the part of the tribunal, to
determine the true financial position of the establishment and also the impact which the increase in the ‘dearness
allowance’ would have on its financial resources. This principle consists of two parts, viz, (1) the capacity of the industry
to pay, and (2) the financial burden that would result by any increase in the dearness allowance, which may be granted by
the tribunal.6 The burden of proof, however, is on the employer, to show by pleading and by adducing relevant evidence,
that he has no capacity to bear the financial burden that the increase in the dearness allowance would cast on him.7 If the
employer fails to plead and establish by adequate and relevant evidence, that he has no financial capacity to bear the
additional burden of the increase in the dearness allowance, before the tribunal, he cannot successfully assail the award on
the ground of a want of the requisite financial capacity.8 The Allahabad High Court held that the payment of dearness
allowance, has a priority over income-tax and other reserves. Therefore, in considering the financial soundness of an
undertaking, for the purpose of paying dearness allowance, the gross profits should be arrived at, without deducting the
provisions for depreciation, taxation and reserves. Considerations for determining the net profits under the Income-Tax
Act, for taxation purposes, are different from considerations of social justice, on which the payment of dearness allowance
is based. A reserve may be liable to be deducted from the profit and loss account for the purpose of taxation, but it cannot
have priority over the requirement of the payment of dearness allowance.9

No doubt, the financial capacity of the employer is an important factor in determining the ceiling on dearness allowance,
but it cannot be made the sole criteria for the purpose.10 The mere fact that a particular company is a member of the
chamber of commerce, would not justify a claim by the workmen, as of right, or as a matter of course, for the scales of

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‘dearness allowance’ to be at the level recommended by the chamber. In Gujarat Electricity Board, dealing with the
demand for ‘dearness allowance’, the industrial tribunal held that the workmen, having failed to prove that the total wage
packet, including the dearness allowance, fell below the minimum wage, the capacity of the electricity board to bear the
burden of paying its employees, the enhanced dearness allowance, would be a relevant factor. In this view of law, the
tribunal rejected the claim of the workmen for dearness allowance, because the board was already running at a heavy loss
and would not have been able to meet the extra burden which would be imposed upon it if the dearness allowance, as
claimed by the workmen, was allowed. The award of the tribunal was affirmed by the Supreme Court in appeal.11

In Press Employees’ Assn, the dearness allowance paid by the company was held to be otherwise fair, the claim for an
increase in the dearness. allowance, therefore, was negatived by the labour appellate tribunal.12 In Kapoor Silk Mills,
though the tribunal found that the financial position of the employer was not very re-assuring, it still awarded an increase
in the dearness allowance. The award of the tribunal was quashed by the High Court, as there was nothing to show as to
how the tribunal had come to the conclusion that the dearness allowance should be increased and in view of the fact that
the tribunal had ignored the principles laid down by the Supreme Court in this behalf.13 In Ghaziabad Engineering, the
tribunal, in coming to the conclusion that the financial position of the company was sound, relied upon a news item
published by a newspaper, that the company was importing new Russian tractors, even though the agency for selling the
tractors of the company was in danger of being terminated on account of the State Trading Corporation taking over such
agency. In appeal, the Supreme Court held that the news item was one of the circumstances which the tribunal took into
consideration, along with the balance-sheet of the company, which showed that the agency was one of the many lines of
business of the company and the closure of the agency would not affect the financial structure of the company seriously.14

In Silk & Art Silk Mills, the claim of the union for a hundred per cent neutralisation of the consumer price index in
Bombay, was resisted by the employers’ association, inter alia, on the ground that the demand was beyond the financial
capacity of most of its member units, and furthermore, that the position of the industry was steadily deteriorating due to
various reasons. But on the basis of the materials produced before it by the parties, the industrial court took the view, that
the position of the industry in general, and the financial capacity of the employer units, in particular, was satisfactory, and
granted a 99 per cent neutralisation of the rise in the Bombay consumer price index 106(o1d series), on the basis of a
minimum basic wage of Rs 30 per month of 26 working days. In appeal by special leave, the Supreme Court affirmed the
award, holding that the industrial court was fully aware of the nature of the demand and the extent of the burden which the
employer units will have to bear and taking a broad and overall view of the financial position of the employer units into
account, it had tried to reconcile the natural and just claims of the employees for a higher rate of dearness allowance, with
the capacity of the employers to pay it and in that process, it had made allowance for the legitimate desire of the employer
to make reasonable profits. It was observed, that what was really material in assessing the financial capacity of the
employer units, in this context, was the extent of the gross profits made by them.15 In British India Corpn, the award of the
tribunal, enhancing the dearness allowance from 37 paise per point to 75 paise per point, was challenged on the ground that
the employer company had been taken over by the Central Government as a sick unit and had suffered losses. It was
further contended that even if there was no case to interfere with the award of the tribunal, looking into the financial
situation of the employer, the court must grant some indulgence, by evolving some formula by which the employer is
absolved of the liability to pay the balance of the arrears of the enhanced dearness allowance. The court declined to grant
the indulgence, With the observation:

It must be remembered that the dearness allowance hardly, if ever, keeps pace with the rise in the index. There is always a gap
between the rise in the index and the related dearness allowance formula and also the fact that neutralisation never reaches cent per
cent rise in prices and therefore, any tinkering with the dearness allowance formula would cause a dent in the otherwise
uneconomic pay packets of these industrial workmen.16

(ii) Industry-cum-region Basis:

In the words of Desai J:

In the matter of dearness allowance especially, the court should lean in favour of an adjudication of the dispute on the principle of
industry-cum-region, because dearness allowance is linked to the cost of living index of a particular centre, which has a local
flavour...A man is exposed to the vagaries of the market where he resides and works, even though he may be an employee of a
national, multinational or trans-national industrial empire. The workman is concerned with the vagaries of price fluctuations in the
area in which he resides and works for gain and to which he is exposed. Therefore, the region-cum-industry principle must inform
industrial adjudication in the matter of dearness allowance...Realising this situation, courts have leaned in favour of the
determination of dearness allowance as linked to cost of living index, if available, for the centre where the workman is employed,
and in the matter of neutralisation, on the industry-cum-region principle.17

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Note: For a detailed discussion of this topic, see notes and comments under the head ‘Adjudication of wage fixation’.

In revising the scales of the dearness allowance payable to the workers, the tribunal has to take into account, the total pay
packet of similarly placed categories of workmen in another similar company and the same should be made, more or less,
similar to each other. In this connection, what is relevant is not the years of service. The dearness allowance has to be fixed
at any given point of time, on the basis of the basic wages and the slab and not on the basis of the years of service. If the
same has to be fixed in comparison to another concern, for affecting the basic wage structure, the two extreme points in the
two concerns have to be fixed. If the span of one is shorter than the other, there has to be some acceleration in between, so
as to make the two wage structures, including all the allowances, more or less equal.18

(iii) Neutralisation of Increase in Prices:

The labour appellate tribunal took the view, that while awarding ‘dearness allowance’, cent per cent neutralisation of the
price of cost of living should not be allowed, as it will lead to a vicious circle and will add fillip to the inflationary spiral.19
This view was approved by the Supreme Court in Calcutta Tramways, where it observed that a distinction cannot be made
in this respect, among the lowest paid employees, in the very lowest of manual labourers, whose income is just sufficient
to keep body and soul together. It is impolitic and unwise to neutralise the entire rise in the cost of living, by a dearness
allowance. More so, in the case of middle classes. The main consideration, so far as dearness allowance is concerned, is
neutralisation of the cost of living and it matters not if the dearness allowance paid in all the industries in the area, is taken
into consideration, for ascertaining what the correct dearness allowance ought to be for a particular concern.20 The dearness
allowance which is paid in all concerns, is after all, a reflection of:

(a) the capacity of the concern to pay; and

(b) the necessity for such payment, having regard to the rise in the cost of living.21

Wherever the facts justify, a higher dearness allowance should be granted, for a satisfactory neutralisation of the cost of
living, in the interest of long-lasting industrial peace in the industry.22 Besides, with the possibility of inflation in the
future, another reason for not giving a cent per cent neutralisation is that the industrial workers are also expected to make
some sacrifice, like other citizens.23 The whole purpose of dearness allowance being to neutralise the portion of the
increase in the cost of living, it should ordinarily be on a sliding scale and provide for an increase, on a rise in the cost of
living and for a decrease, on the fall in the cost of living.24 In considering the claim for a dearness allowance or for a
revision of the dearness allowance, amongst other factors, it should be borne in mind that, (i) full neutralisation is not
normally given, except to the very lowest class of employees and (ii) the purpose of dearness allowance being to neutralise
a portion of the increase in the cost of living, it should ordinarily be on a sliding scale and provide for an increase, on the
rise in the cost of living and for a decrease, on fall in the cost of living.25 However, in so far as the lowest paid employees
at or just above the subsistence level are concerned, they are entitled to a 100 per cent, or at any rate, not less than a 95 per
cent neutralisation in the cost of living. Thus the ratio of neutralisation cannot be more than 100 per cent, even in the case
of the lowest paid employees.26 According to Sawant J:

The neutralisation of the rise in the consumers price index, mayor may not mean the same thing as the neutralisation of the rise in
the cost of living, depending upon the basket of goods and services which are taken into consideration for compiling the consumer
price index and the income group whose cost of living is sought to be protected. The consumer price index which is used in
industrial adjudication, for considering the rise or fall in the prices, for fixing the dearness allowance, is the consumer price index
of the basket of goods and services consumed by the average worker. This consumer price index is known as the All India
Working Class Consumer Price Index. The dearness allowance is paid to workmen of all establishments, on the basis of the rise
and fall in this consumer price index. Further, as held by all the expert committees and commissions, the object of granting
dearness allowance is to neutralise as nearly as possible, the rise in the consumer price index for the lowest paid workman or the
minimum wage earner in any establishment and the percentage of neutralisation should go on declining on a sliding scale, with the
higher wage groups. Although, therefore, theoretically, it is possible to contend...that the consumer price index does not necessarily
indicate a rise and fall in the cost of living of all the sections of the workmen, for the purposes of industrial disputes, the wage
authorities, committees and commissions have not so far favourably considered the idea of compiling different consumers price
indices for different wage groups, and have, in fact, treated the concept of cost of living, synonymously with that of the consumer
price index of the working class. In fact, they have, in terms, discouraged the idea of neutralising fully, the cost of living of
workmen, save those at the minimum wage level.27

The NCL-I pointed out:

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...the only purpose of dearness allowance is to enable the worker, in the event of a rise in the cost of living, to purchase the same
amount of goods of basic necessity, as before. This purpose would be served by an equal amount of dearness allowance to all
employees, irrespective of the differences in their emoluments.28

Hence, the commission recommended that a 95 per cent neutralisation should be granted against the rise in the cost of
living, to those drawing minimum wage in non-scheduled industries. Neutralisation, at the best, may be such as to
neutralise fully, the increase in the cost of living or, it may be restricted to neutralising only a portion of the increase. Full
or cent per cent neutralisation can be achieved if the increase in the cost of living is fully compensated, so that the pay of
the worker is not adversely affected. But an award of more than a 100 per cent of the increase in the cost of living, would
be more than a neutralisation and would, in fact, give the worker an increased wage. The result would be that the worker
would be getting an increased wage-packet, whenever there is a price rise, a result which would not have been envisaged
while making the provision for the grant of dearness allowance.29 The commission, therefore, was reluctant to recommend
the same rate for workers in higher wage groups, for fear that it may spark off inflationary trends. In Hindustan Lever,
Ahmadi J, who delivered the opinion of the court, observed:

Normally, such a dearness formula suffers from two drawbacks, (i) it has the pernicious effect of distorting the wage-structure and
(ii) it results in a sharp erosion of the real income, particularly of those in the higher wage groups. Generally speaking, the
distortion of the wage-structure takes place because employees in different pay scales, are granted dearness allowance, not at a
uniform rate, but at a tapering rate, ie, the workers in the lower scales getting a higher neutralisation as compared to those in the
higher pay brackets, in whose case the neutralisation percentage diminishes with the rise in the basic wage. That is because it is
believed that those in the higher pay brackets have a cushion to absorb the brunt of inflation.30

In Silk and Art Silk Mills,(supra), the Industrial Court granted dearness allowance at the rate of 99 per cent neutralisation of
the rise in the Bombay CPI on the basis of the minimum basic wage of Rs 30 per month of 26 working days. In appeal, the
Supreme Court held that the award was correct and the industrial court was justified in relying on these documents for
finding the trend or the norms in the region, as regards the extent of neutralisation payable for the lowest paid employees.
The court observed:

The question of the extent of neutralisation to the workmen in the units, does not depend solely upon the fact whether
neutralisation to that extent, has been allowed to the employees in comparable concerns in the same industry, in the same region.
Much distinction cannot be made in this respect, among the lowest paid employees in the region, merely because some of them are
employed in other industries.

In Killick Nixon (supra), the Supreme Court candidly pointed out that the lowest paid employees and those above the
subsistence level, were entitled to a 100 per cent, or at any rate, not less than a 90 per cent neutralisation of the rise in the
cost of living and declined to put any ceiling on dearness allowance payable to employees within the slab of the first Rs
100, unless it could be shown by the management, that the rate of neutralisation in their case, was more than 100 per cent.
With respect to the other employees, it was left to the tribunal to consider the question, having regard to the principles laid
down by the court in this connection, as to whether a ceiling should be imposed or not. In SCVKUSM Ltd (supra), a
neutralisation of the variable dearness allowance, at 125 per cent was awarded. In Mazgaon Docks (supra), Sawant J held:

One thing, therefore, is certain, that the trend, beginning from the Third Pay Commission, is in favour of the view that the object of
the dearness allowance is to prevent the erosion of real income, and not merely to protect the consumption basket of essential
goods and services, against the price rise. The Fourth Pay Commission and the High Power Pay Committee have, as pointed out
earlier, felt the need to protect the monthly basic pay up to Rs 3,500 of the government employees, fully. Whatever the view,
therefore, with regard to the object of dearness allowance, that one may accept, it can safely be concluded, on the authority of these
expert government panels, that the rise in the cost of living up to the basic pay of at least Rs 3,500 per month, needs to be
neutralized to the extent of 100 per cent. As observed by the High Power Pay Committee, the consumption basket, which is the
basis of the All India Consumer Price Index, is not relevant up to the said basic pay range. It is also to be noted that these expert
panels have afforded a substantial protection even to the monthly incomes above Rs 3,500, by recommending 75 per cent and 65
per cent of neutralisation to incomes between Rs 3,500 to Rs 6,000 and above Rs 6,000 respectively.

(iv) Ceiling on Dearness Allowance:

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In Killick Nixon, the Supreme Court held that the removal of the ceiling on dearness allowance would not be justified, as
the company had made out a case for an imposition of a ceiling. The court indicated the following important factors, which
the adjudicator should bear in mind while deciding the question of ceiling on dearness allowance:

(1) Condition of the wage-scales prevalent in the company.

(2) Condition of the wage level prevalent in the industry and the region.

(3) The wage packet as a whole, of each earner in the company, with all amenities and benefits, and its ability and potency to
cope with the economic requirements of daily existence, consistent with his status in society, his responsibilities,
efficiency at work and with industrial peace.
(4) The position of the company viewed in relation to other comparable concerns in the industry and the region.

(5) Peremptive necessity for a full neutralisation of the cost of living, at the rock-bottom of the wage-scale, if at or just above
the subsistence level.
(6) The rate of neutralisation which is being given to the employees in each salary slab.
(7) Huge distortion of wage differentials, taking into reckoning, all persons employed in the concern, should be avoided.

(8) Degree of sacrifice necessary, even on the part of the workers, in general interest.

(9) The compulsive necessity of securing social and distributive justice to the workmen.

(10) Capacity of the company to bear the additional burden.

(11) Interest of national economy.

(12) Repercussions in other industries and the society as a whole.

(13) The state of the consumer price index at the time of the decision.

(14) Forebodings and possibilities in the foreseeable future, as far as can be envisaged.

The court further observed:

It will always be a delicate task for the tribunal to strike a balance, keeping in view the above principles, weightage to each one of
which being variable, according to the conditions obtaining. Whether or not there should be a ceiling on dearness allowance in a
given case, must depend on the facts and circumstances of that case. There can be no inexorable rule in that respect.

In Indian Hume Pipe, speaking for the court, Khalid J, pointed out:

A close study of the Killick Nixon case will bear out, that this court did not lay down that in all cases, the slab system of dearness
allowance should be abolished or done away with, to the detriment of the workers. All that this court held in that case was that the
employer having made out a case for putting a ceiling on dearness allowance, it was for the tribunal to decide at what particular
amount there should be a ceiling on dearness allowance...Thus, the ratio of that case cannot be extended to every case, to interfere
with the DA scheme, which is beneficial to the workmen.31

In this case, the court set aside the award of the industrial tribunal, that the employer was justified in substituting the slab
system of dearness allowance with the revised textile scale of dearness allowance for workmen, affording a 115 per cent
neutralisation, with the observation that the theory of a ceiling on the quantum of dearness allowance cannot be accepted,
since, under the prevailing conditions, there is no control over the prices of essential commodities and as such, a ceiling
would not give a sufficient cushion when prices of essential commodities continuously rise. It is thus evident that the
observations in this case too, are not intended to lay down any proposition of law, but are restricted to the facts of the case.
It was pertinently pointed out by the court, that if there is material to show that the dearness allowance system adopted by a
company, had become ‘improper’ or unscientific, because the workmen were getting a fantastic amount of dearness
allowance, a departure from the existing slab system could be envisaged; the court, therefore, not only approved the ratio
of Killick Nixon, but further held that if the employer had made out a case for putting a ceiling on the dearness allowance,
it was for the tribunal to decide as to at what particular amount, there should be a ceiling on the dearness allowance.

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The Bombay High Court, in negatived the demand of the employer, to change the existing basis for neutralisation of living
index, by adopting the neutralisation rate giving lesser benefits to all workmen, uniformly, including the clerical and
subordinate staff, without linking it to their basic pay. Speaking for the court, Sawant J observed that in dealing with the
question of replacement of the existing system, the first thing the adjudicator is required to consider is, whether the system
which is sought to be introduced is more or less beneficial to the workmen, compared to the existing one. If it finds that the
new system is less beneficial than or deprives the workmen of the benefits available in the existing system, it has to keep
its hands off the new system, unless of course, there are compelling reasons to do so. Any considerations, such as a
uniformity with other concerns, is not relevant for downgrading the existing benefits, which would have been in existence
for about 40 years. Though the court set aside the award of the tribunal, replacing the existing system of dearness
allowance with the new one, it remitted the matter to the tribunal for fresh consideration, in the light of the distortions and
disparities in the wage packets of the workmen and their superior officers and the financial capacity of the company to bear
the burden of the dearness allowance, because these facts have to be established by applying the relevant tests in this
connection.32 In Hindustan Lever, the facts disclosed that the claim of management for a ceiling on DA was accepted by
the tribunal, which passed an order fixing a ceiling on a basic pay exceeding Rs 500 per month. The award of the tribunal
was challenged by the union as well as the management in the High Court of Bombay. A single judge upheld the award,
which was reversed by the Division Bench. The Division Bench was of the view that the prevailing dearness allowance
system did not result in an over-neutralisation of the cost of living index at any level of income group and had maintained a
tapering scale, though not a steeply declining one. And the system also did not result in the distortion of the total incomes,
either of the workmen inter se, or between the workmen and their superiors, namely, the executive staff. Upholding the
decision of Division Bench in a Special Leave Petition, Ahmadi J, observed:

As is so well-known, wages are among the major factors in the economic and social life of the working classes. Workers and their
families depend almost entirely on wages, to provide themselves with the three basic requirements of food, clothing and shelter.
The other necessities of life, like children’s education, medical expenses, etc, must also come out of the emoluments earned by the
bread-winner. Workers are therefore, concerned with the purchasing power of the pay-packet they receive for their toil. If the rise
in the pay-packet does not keep pace with the rise in the prices of essentials, the purchasing power of the pay-packet falls, reducing
the real wages, leaving the workers and their families worse off. Therefore, if on account of inflation, prices rise while the pay-
packet remains frozen, real wages will fall sharply. This is what happens in periods of inflation. In order to prevent such a fall in
real wages, different methods are adopted to provide for the rise in the prices. In the cost-of-living sliding scale systems, the basic
wages are automatically adjusted to price changes shown by the cost of living index. In this way, the purchasing power of the
workers’ wages is maintained to the extent possible and necessary. However, leap-frogging must be avoided.33

(v) Cost of Living Index and Consumer Price Index:

In India, a standarised type of family-living study was first initiated in Bombay in 1921. Such inquiries were also
conducted in some centers in Bihar in 1923, in Sholapur in 1925 and in Ahmedabad in 1926. While reviewing the position
of social surveys in India, the Royal Commission on Labour pointed out the great paucity of statistical material in this
country, for judging the standard of living of the workers and recommended the conduct of socio-economic inquiries of the
type of family living surveys. This report naturally gave an impetus to the conduct of family budget inquiries. In all the
surveys that followed, sampling and interviewing techniques were adopted, though, of course, not of a such an advanced
nature. A statistical analysis of the data collected was also attempted.34During the second world war, the Government of
India appointed the Rau Court of Inquiry, constituted under the Trade Disputes Act 1929. The commission, inter alia,
recommended that the Central Government should take up the responsibility for maintaining an up-to-date cost of living
index number, for important areas and centres. The government accepted this recommendation and set up a special
organisation called ‘The Directorate of Cost of Living Index Numbers’, and family budget inquiries among industrial
workers were conducted at 28 centers during 1944-45, in the course of which, 2700 budgets were collected. A significant
feature of these inquiries was that for the first time in this country, an attempt was made to conduct such inquiries
simultaneously, at a large number of centres, under more or less uniform techniques. During the same period, the Labour
Bureau of the Government of India and some of the organisations of the state governments, continued to conduct family
budget inquiries from time to time, at specific areas or centres, either for deriving weighing diagrams for consumer price
index numbers, or for collection of data required for fixation of minimum wages. In the background of these events, the
Second Five Year Plan made the following noteworthy recommendations:

The existing wage structure in the country comprises, in the main, of a basic wage and a dearness allowance. The latter component
in a majority of cases, has relation to cost of living indices at different industrial centres. These indices have not been built up on a
uniform basis; some of them are worked out on primary data, collected about 20 to 25 years ago and are, therefore, not a true
reflection on the present spending habits of workers. Since one of the questions which the wage commission will have to take into

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account is the demand made by the workers’ organisations, for merging a part of the dearness allowance with the basic wage,
evolving recommendations for such a merger, will not be sufficiently scientific, if the cost of living indices at different centres, do
not have a uniform basis. Steps will therefore, have to be taken simultaneously, with the undertaking of a wage census, to institute
inquiries for the revision of the present series of cost of living indices at different centres.35

Pursuant to the above recommendation in the Second Five Year Plan, the Labour Bureau, Ministry of Labour and
Employment, Government of India, conducted a family living survey in 1958-59. The survey was based on the co-
operation of several institutions and its technical details were worked out under the guidance of a technical advisory
committee on the cost of living index numbers, consisting of the representatives from the Ministry of Labour Employment,
Food & Agriculture, Finance, Planning Commission, The National Sample Survey Directorate, The Department of
Statistics (CSO), the Indian Statistical Institute and the Reserve Bank of India. The field work was entrusted to the
Directorate of National Sample Survey, and the processing and tabulation of the data collected in Sch A (family budget), to
the Indian Statistical Institute, Calcutta. The tabulation of the data collected under Sch B, which dealt with the level of
living, was done in the labour bureau. It was a multi-purpose survey, and so, the investigation conducted under it, covered
both the family budget and the level of living. The ultimate analysis of the data, publication of reports on the results of the
surveys and construction and maintenance of new series of consumer price index numbers, were the responsibilities of the
labour bureau.

The first thing the organisation did was to define a ‘working class family’, which was the basic unit of the survey. It was
defined in terms of sociological and economic considerations, as consisting of persons: (i) generally related by blood and
marriage or adoption; (ii) usually living together and/or served from the same kitchen; and (iii) pooling a major part of
their income and/or depending on a common pool of income, for a major part of their expenditure. The geographical area
to be covered during the survey, was decided in consultation with the local organisations, both official and non-official. At
the Ahmedabad centre, 46 localities were selected for the purpose of the survey; they consisted of 16 chawls, 21 labour
colonies (housing societies) and 9 villages. Before setting the ultimate units of the family living survey, viz, the families,
two types of sampling methods were adopted: tenement sampling and pay-roll sampling. The sample size for a centre was
determined on the basis of the number of industrial workers, the type of sampling followed, the work-load manageable by
an investigator and the required precision of weight to be derived from Sch A for consumer price index numbers. The
sample size for Ahmedabad was 720 families, to be canvassed for Sch A. The number of samples finally collected &
tabulated, was 722, for Sch A. The two samples drawn for Schedules A and B were, however, mutually exclusive, because
canvassing for both the schedules from the same sampled families, would have caused fatigue, both to the investigators
and to the informants. The whole sample was staggered over a period of twelve months, evenly, so as to eliminate seasonal
effects on the consumption pattern. The selection of the sample was done in two stages. In the first stage, the chawls within
each of the wards, were grouped to form blocks of about 150 households each and these blocks, along with the labour
colonies (housing societies), were grouped to form clusters of about 450 households each, so that each cluster had blocks
from different wards. From the list of these clusters and villages, four independent simple systematic samples of 12
clusters or villages each, were selected for the survey. Each of the 12 clusters sampled for an investigation, was assigned to
a particular month for inquiry by a random process. That is how the first stage was arranged.

The second stage unit for selection was a working class family. Each month, the investigator listed all the families in the
cluster allotted to that month, by a house-to-house visit and classified them as working class families and others. While
listing, information was also collected on the family size, the expenditure class to which it belonged and the state of origin
of the head of the family. This information was utilised to arrange the working class families in the cluster, first by family
size, and within these classes, by expenditure class and within these, by the state of origin. A simple systematic sample of
20 working class families was drawn from this arranged list. Every fourth family in this sample was contacted for filling
Sch B (on the level of living) and the remaining three were contacted for Sch A (on family budget). That is the nature of
the procedure adopted while selecting the families for the sample survey and for determining the size of the sample. The
sample survey was designed to cover a period of twelve months, at each centre. At the Ahmedabad centre, the work was
carried on between August 1958 and July 1959. The method of survey was the interview method. The questionnaire which
each investigator adopted, covered a wide range of subjects, accurate replies to some of which could not be had without
explaining the significance of the question to the persons concerned.

The population of Ahmedabad is about 11.5 lakhs. The working class population in Ahmedabad was reported to be
concentrated in thirteen localities. The markets predominantly patronised by the working class population in Ahmedabad,
were six and it were these markets that were selected for the collection of retail prices, for the new service series of
consumer price index number of the Ahmedabad centre. From the summary of the report, a broad idea as to the manner in
which and the method by which the investigation was made, which ultimately led to the construction of the consumer price
index number, is available. From the two respective inquiries, viz, the one held in 1926-27 and the other in 1958-59, the
comparative contents of the basket, as devised by them, is available. The former inquiry reflects the consumption pattern

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of the working class as it existed in the year 1926 and the index number then devised was composed of five groups, viz, (i)
food, (ii) fuel and lighting, (iii) clothing, (iv) house rent, and (v) miscellaneous. The food group in its turn, consisted of 16
items; the fuel and lighting group of four items; the clothing group of seven items; the house rent group of one item, viz,
the house rent, and the miscellaneous, of two groups, viz, bidis and soap. Thus, in all, 30 items were included. These items
represented 82.82 per cent of the average monthly expenditure and they were respectively, assigned 58, 710, 12 and 4
weights, which together aggregated 91. At the time of this inquiry, the items included in the investigation totalled 49; out
of them, 30 were priced and 19 were unpriced, and in respect of the latter, the method of imputation was adopted. This
series was prepared after collecting the budget of 985 families, when the estimated population of the city of Ahmedabad
was nearly 3 lakhs. The new series is based on an inquiry into 722 working class families, conducted in 1958-59, when the
total population of the city was about 11 lakhs. The total working class families at this time, were estimated to be 51.5
thousand; and so, the percentage of the sample size in relation to the universe of the working class families, would come to
about 1.4 not less than 0.5. The weighing diagram for the new series is based on 110 articles, divided into the same main
five groups, viz:

(1) food;
(2) fuel and lighting;
(3) clothing;
(4) housing; and,
(5) miscellaneous.

The important groups in this inquiry carried, respectively, the weights of 64.41, 6.22, 5.05, 9.08 and 15.24, which
aggregated 100. The total number of items included in the basket was 239. Of these, 89 were priced items and 150
unpriced, and in respect of the latter, the method of imputation was adopted. In the new series, the unpriced items were
considerably more than in the earlier one. The total expenditure of all the items in the 1926-27 inquiry, was Rs 36.01, of
which Rs 32.35 was the expenditure on priced items and Rs 3.66 was the expenditure on non-priced items. In terms of
percentage, the expenditure on priced items, to the total expenditure, was 89.8 per cent and the expenditure on unpriced
items, to the total, was 10.2 per cent. In the latter inquiry of 1958-59, the total expenditure on all items was Rs 139.06. Of
this, Rs 124.91 was the expenditure on priced items and Rs 14.15 was the expenditure on non-priced items. In terms of
percentage, the first expenditure was 89.8 per cent and the second was 9.2 per cent. Thus, the expenditure on unpriced
items in the latter inquiry is not larger than that in the former inquiry. The components of the basket at the time of the latter
inquiry, had considerably increased, with the growth of the country’s economy and the change in the standard of living of
all citizens; so have the requirements of the working class increased and the components of the basket, which was devised
in 1926-27, have now become completely obsolete. The following observation of the survey is significant:

...the consumer price index number measures nothing but changes in prices, as they affect a particular population group; and so, it
is really a price index number, as distinct from a cost of living index number. In fact, these indices used to be termed as cost of
living index numbers in the past, but in order to make their meaning clear, it was decided by the government to change the name to
consumer price index numbers, in accordance with international recommendations and growing practice in other countries. Most of
the state governments compiling such index numbers, have also adopted this usage.36

In Millowners’ Assn, this survey was challenged by the Ahmedabad Millowners’ Association, on various grounds. The
industrial court did not accept the contention on behalf of the Millowners’ Association, that the sample size was inadequate
or had vitiated the quality of the survey and held that the method of inquiry adopted by the investigators, who conducted
the survey, was by no means, unsatisfactory or unscientific and in its opinion, having regard to the local conditions, it was
indeed the most feasible and satisfactory way to adopt. The industrial court, therefore, was of the opinion that the adoption
of the interview method did not introduce any infirmity in the survey and held that the compilation of the consumer price
index by the Labour Bureau, Simla, in the city of Ahmedabad, was proper and was not unscientific, nor did it suffer from
any major infirmity. In appeal, the Supreme Court itself, considered the report and other evidence and the opinions of
experts in detail and upheld the view taken by the industrial court. Speaking for the court, Gajendragadkar J, who delivered
the opinion of the court, said:

This index number is intended to show over a period of time, the average percentage change in the prices paid by the consumers,
belonging to the population group, proposed to be covered by the index, for a fixed list of goods and services consumed by them.
The average percentage change, measured by the index, is calculated month after month, with reference to a fixed period. This
fixed period is known as the ‘base-period’ of the index, and since the object of the index is to measure the effect of price-changes
only, the price-changes have to be determined with reference to a fixed list of goods and services of consumption, which is known

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as a fixed ‘basket’ of goods and services.37

The index does not purport to measure the absolute level of prices, but only the average percentage change in the prices of
a fixed basket of goods and services, at different periods of time. There are certain preliminary considerations which are
relevant in the construction of consumer price index numbers. The first consideration is the purpose which the index is
intended to serve, and that necessarily, involves the definition of the group of consumers to which the index is intended to
relate. Then, it is necessary to determine the consumption level and pattern of the population group, at a period of time
which generally, becomes the base-period of the index numbers. For that purpose, a list of commodities and services has to
be made. Usually, this list would contain items of food, fuel and light, clothing and others; items of services, such as barber
charges, bus fare, doctor’s fee, etc, have also to be selected. It is the combined total of the items of commodities and
services, that constitutes the basket. Then follows a description of the quality of each commodity and service, through
which price-changes have to be measured. Generally, one quality, which is popularly consumed by the population group, is
selected for each commodity and service. The importance of the weight which has to be attached to each commodity or
service, is also a material factor. For instance, if rice is considered to be twice as important as wheat in the consumption
pattern, the weight of rice will be two in relation to one of wheat. Having determined the consumption level and the pattern
of the population group, the next task to attempt is to arrange for the regular collection of price data for the various
qualities of commodities and services which enter the basket. With this material, the consumer price index has to be
compiled from month to month, subsequent to the base-period. That, shortly stated, is the nature of the preliminary
considerations which have to be borne in mind, while constructing the consumer price index numbers.

In Ahmedabad Millowners’ Assn, the industrial court accepted the linking factor at 3.17, adopted by the Government of
Gujarat, to link the existing series with the new series of ‘Consumer Price Index Numbers’, for the city of Ahmedabad.
The Supreme Court held that the employers had not placed any material before the industrial court, to justify their
contention, that for determining a linking factor, the behaviour of prices for two or three years during the relevant period,
should be and could be studied and then a factor should be decided on the average rise in the prices during the period in
question. However, the court made it clear that its decision on this point should not be taken to be of any general
significance and should be confined to the facts of the case under consideration. If the employers and employees thought it
necessary or desirable, that this question should be scientifically examined and determined in a general way, it would be
appropriate for them to move the government to appoint a special body of experts to deal with it. But in the under noted
case,38 an increase of three rupees per month in the dearness allowance, on the ground that the cost of living had gone up
and also on the ground that there were other sources of income for the employer, was held unjustified, as there was no
evidence on record, to support such findings of the tribunal. The award of the increase in the dearness allowance, therefore,
was quashed in a writ petition.

In Indian Oxygen, dealing with the demands of the workers of the Kanpur unit of the company, that the dearness allowance
payable to the workmen at Kanpur, should be linked with the consumer price index for the industrial workers at Kanpur,
the court observed that the consumer price number for industrial workers (base 1960-100) were being compiled and
published by the Labour Bureau, Simla, every month in respect of 50 industrial centres, scattered all over the country.39
The material collected is through the family surveys of working class families. There are six main groups for which indices
for each centre are being compiled besides the general index. They are:

(i) Food;
(ii) Pan, supari, tobacco and intoxicants;
(iii) Fuel and light;
(iv) Housing;
(v) Clothing, bedding and footwear;
(vi) Miscellaneous.

Consumer price index numbers are intended to measure the relative temporal (overtime) changes in the price of a fixed
basket of goods and services, consumed by the index population, in a current period, in relation to the base period. The
index numbers are compiled by using the Laspeyres’ formula. Broadly stated, this formula takes note of the base and
current prices for a particular item and the quantity consumed of those items during the period, in relation to the base
period. It would appear that for the compilation of an index, there are three essential requirements, namely: (1) a weighing
diagram, which is the relative percentage share of the total consumption expenditure, as revealed by the basic family
budget inquiry in respect of different items, (2) the base prices of the different items which go into the index basket, and
(3) the current prices in respect of each one of the items featuring in the index basket. The weighing diagram for a centre is
derived on the basis of the data collected through family budget inquiries, which were conducted in 1958-59, at each one

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of the 50 centres. The survey was conducted by taking all the samples of working class families, in each of the 50 centres
and the data was collected by interviewing these families. Based on the results of the family budget inquiries, the average
expenditure of a family per month, on different items of consumption, was arrived at. An all India average consumer price
index number is a weighted average of the 50 centres’ indices. This is compiled and published alongwith the index number
for each centre.40

(vi) Rates and Scales of Dearness Allowance: Uniform rates and Flat rates

In Jardine Henderson, according to the practice prevalent in West Bengal, the employer company was paying dearness
allowance at different rates, to its clerical and subordinate staff. In view of the deteriorating financial condition of the
company, the Supreme Court affirmed the award of the tribunal, rejecting the demand of the workmen of the subordinate
staff, for raising their dearness allowance to the level of the dearness allowance being paid to the clerical staff, viz, at a rate
linked with the middle class cost of living index, though it did not allow the reduction in the rates of dearness allowance, as
claimed by the employer, on the basis of the deteriorating financial position of the company.41 In Greaves Cotton, the court
upheld the validity of an award of the industrial tribunal, fixing the scales of dearness allowance for the subordinate staff
and the factory workmen at the same rates as were applicable to the clerical staff. Speaking for the court Wanchoo J said:

Time has now come when employees getting same wages should get the same dearness allowance irrespective of whether they are
working as clerks, or members of subordinate staff or factory workmen. The pressure of high prices is the same on these various
kinds of employees. Further, subordinate staff and factory-workmen these days, are keen to educate their children as clerical staff
and in the circumstances there should be no difference in the amount of dearness allowance between employees of different kinds
getting same wages. Further an employee whether he is of one kind or another getting the wage hopes for the same amenities of
life and there is no reason why he should not get them, simply because he is, for example, a factory-workman though he may be
coming from the same class of people as a member of clerical staff.42

The principle of Greaves Cotton, however, applies to the workmen of the same establishment. It cannot be stretched to
different establishments. In WIMCO, Mudholkar J observed that there was no valid reason for compelling employers to
offer uniform terms of employment to their employees working in different establishments because various considerations
must enter into the question such as the value of their work to the employer, the employer’s ability to pay, the cost of
living, the availability of the persons for doing the particular kind of work and so on. Hence, in the circumstances of this
case and in view of the history of industrial adjudication in Bengal, and also the precise reasons for adopting different rates
of dearness allowance by the company for its employees at the sales office and the factory, the award of the industrial
tribunal could not be characterised as contrary to principles of industrial law.43 In Associated Power, the court held that
there should be no disparity between the dearness allowance paid by the company to its employees at its two factories. In
this case an electric company had two factories. Under the terms of agreement, the workmen working at one of the
factories were given higher rates of dearness allowance and certain other benefits which were not given to the workmen at
the other factory though the workmen were found to be transferable from one factory to the other and the same work was
carried on by both the factories.44

In a case where a company is paying dearness allowance at different rates, the dearness allowance depends upon the place
of posting of an employee. There may be some difficulty, however, to apply this principle to the case of an employee
having no definite place of posting. In such a case, the principle that dearness allowance should be governed by the place
of posting can only mean that the employees should get dearness allowance where their families (ie wife and children) are
residing, for that would be the place of posting of such employees for all practical purposes.45 In the language of Desai J,
dearness allowance ‘generally, has a local flavour’. Payment of dearness allowance, therefore, would depend upon the
place where the workmen are working irrespective of the fact that industrial undertaking in which the workman is
employed has a unit of industrial enterprise having all-India or inter-state operation. If the concept of uniformity on an all-
India basis is introduced in the matter of dearness allowance, it would work havoc, because the price structure in a market
economy at places like Bombay, Madras, Calcutta, Delhi, Ahmedabad has little or no relation to smaller centres like
Kanpur. Uniformity and equality have to be amongst the equals measured by common denominator. In the matter of
dearness allowance, any attempt at uniformity between the workmen working in metropolitan areas and smaller centres
like Kanpur, would be destructive of the concept of dearness allowance. In other words, uniformity amongst the similar
persons would be productive.

In respect of Sliding scale of rates though dearness allowance at a flat rate is permissible,46 the whole purpose of dearness
allowance, being to neutralise a portion of the increase in the cost of living, it should ordinarily be on a sliding scale and
provide for an increase on rise in the cost of living and decrease on a fall in the cost of living47 but where incremental
scales of wages are fixed and dearness allowance is expressed as percentage of basic wages, then the dearness allowance
will vary with the basic wages of the workmen in the same scale in accordance with the length of their service, which

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would not be fair. Hence, dearness allowance must be fixed on the basis of extra cost of feeding three consumption units
on which basic wages are also based and that should apply whether the workman is in the highest or in the lowest rung of
the ladder of his grade.48 In Hindustan Motors, the Supreme Court directed that a sliding scale be attached to the dearness
allowance awarded by the industrial tribunal on the lines that it will be liable to be increased or decreased on the basis of
one rupee for every five points in case of rise and fall in the cost of living index from point 364 on the same lines as
provided for in the third major engineering award.49 Likewise, on consideration of all the circumstances in Hindustan
Times, the Supreme Court directed that a sliding scale be attached to the dearness allowance of twenty-five rupees per
month as awarded by the tribunal so as it will be liable to be increased or decreased on the basis of one rupee for every ten
points in case of rise and fall in the cost of living from the base of 400, the 1939 index being taken to be 100.50

(vii) Revision of Dearness Allowance:

Increase and decrease in dearness allowance: Regarding increase in dearness allowance, the problem of constructing a
wage-structure as well as a dearness allowance is to be tackled on the basis that wage structure and dearness allowance
should not be changed from time to time; as they are long range plans,51 but the passage of time brings in its train various
improvements in the conditions of living of people due to scientific and technological advancements. This affects the
living standards of the working classes as well. Besides, the gulf between the wages and the cost of living goes on
widening with the increase in prices of commodities and other amenities. In the course of time, therefore, the dearness
allowance which is given to compensate for the rise in the cost of living starts to sag down and then ceases to sufficiently
make up the gap between wage and cost of living, and a revision of wages or dearness allowance then becomes
necessary.52 The principle is now settled that if the paying capacity of the employer increases or the cost of living shows an
upward trend, the industrial employees would be justified in making a claim for the re-examination of the rates of the
dearness allowance. The tribunal will not be normally justified in rejecting it solely on the ground that enough time has not
passed after the making of the award. The question regarding revision will have to be examined on the merits of each
industrial case by the tribunal concerned.53 But like fixation of wages or dearness allowance, in the first instance, the
revision of wage-structure or dearness allowance is equally a delicate operation. The wage-structure or dearness allowance,
therefore, when fixed by the industrial adjudicator as reasonable after a fair consideration of the available material should
not be disturbed except on clear proof of error or unfairness.54 Further, as in the case of basic wage, no change in existing
scales of dearness allowance should also be made unless there is a material change in the circumstances or any other strong
reasons to revise the scale.55 The industrial adjudication has evolved certain principles for revising the wage structure or
dearness allowance.56 For instance in Remington Rand, the Supreme Court indicated the circumstances which would justify
upward revision of the dearness allowance fixed under a settlement or award, viz,

(i) improvement in the financial position of the employer subsequent to the settlement or award; or

(ii) rise in the cost of living subsequent to such settlement or award.

Speaking for the court, Gajendragadkar J observed:

It is quite conceivable that if the cost of living shows a tendency to rise very high, the workmen would be entitled to claim that
there should be a change in rates of dearness allowance basically fixed in order to allow them more neutralisation, and such a
demand cannot be rejected without examining its merits solely on the ground that because a provision is made for adjustment from
time to time, the scheme ought to remain in force for all time and cannot be reopened or re-examined.57

In this case, the rates of dearness allowance were linked with the cost of living index fixed under the terms of settlement
between the parties in 1953. The settlement also provided for increase in the rates of dearness allowance on a percentage
basis linked to the increase in the then cost of living index. The demand raised by the workmen for revision of the dearness
allowance in 1958 was referred to the tribunal in 1959. Taking into consideration the relevant factors ie, the financial
capacity of the employer to bear the additional burden, the rise in the cost of living and the rates of dearness allowance
paid to workmen in comparable concerns, the tribunal increased the dearness allowance. The award was affirmed by the
Supreme Court. But when the circumstances disclosed improvement in the financial position of the employer and high rise
in the cost of living subsequent to a settlement or award have been established, a claim for revision of dearness allowance
cannot be rejected without examining it on merits.58 In other words, the industrial adjudication has to bear in mind the
other two principles, namely, the financial capacity of the employer to bear the burden of enhanced clearness allowance
and the industry-cum-region rule. As in fixing wage scales or dearness allowance so also in revising the same, two
principal factors must weigh with the adjudicator, i.e., how the wages prevailing in the establishment in question compare
with those given to workmen of similar grades or scales by similar establishments in the same industry or in their absence
in similar establishments in other industries in the region and what wage scales the establishment in question can pay
without any undue strain on its financial resources.59 In Bengal Chemicals, the tribunal took the view that since the

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employer company by a settlement had agreed to pay increased dearness allowance if there was a substantial change in the
cost of living index, the question of the financial capacity of the company did not come in for consideration. But in appeal,
the Supreme Court said that the financial burden that will be thrown on the company by reason of dearness allowance is a
very material and relevant factor to be taken into account in such circumstances.60 In Cinema Theatres, the increase in the
cost of living index over a course of nine years was held to be a ‘change of circumstances’, justifying an upward revision
of the wages-scales and dearness allowance for the concerned employees fixed in the year 1951.61

In another case involving Remington Rand, the workmen employed at the Bangalore office of the company raised an
industrial dispute for the revision of dearness allowance. The tribunal found that the cost of living index in Bangalore for
1965 was 641.74 while the corresponding figure for Madras in that month was 617. It further noted that the company had
revised the scales of dearness allowance in July 1961, but in spite of this, there was a disparity in the payment of dearness
allowance to workmen working at Madras and to those working at Bangalore and, therefore, held that there was no
reasonable justification for the disparity. In view of the enormous profits the company was making, the tribunal directed
that the dearness allowance should be paid to the employees of the Bangalore branch at the rate at which and in the manner
in which it was paying dearness allowance to its employees at Madras regional office. In appeal by a special leave, the
court, after noticing that the cost of living index at Bangalore was higher than that of Madras, affirmed the award of the
tribunal.62 In Karam Chand Thapar, the workmen claimed upward revision of dearness allowance in accordance with the
Bengal Chamber of Commerce scheme in view of two facts, viz, that there was a steep rise in the price of living index and
also that the company was in financial position to afford the claimed dearness allowance. But the employer company
resisted the claim on the ground that the demand of the workmen for dearness allowance according to the Bengal Chamber
of Commerce scheme had been consistently rejected by the tribunals and also by the Supreme Court. The court held that
the steep rise in the cost of living index between the period of the earlier award and the award under appeal, was
considered to be sufficient justification for the revision of the rates of dearness allowance.63

Note: For a detailed discussion on decrease in dearness allowance, see notes and comments under ‘Reduction in wage-
structure’.

(viii) Retrospective Award of Dearness Allowance:

In Phaltan Sugar, dearness allowance was revised by an award of the industrial tribunal directing retrospective operation
of the award. Such revision was directed to come into effect not from the date of reference but from some date subsequent
thereto but earlier than the date of making of the award. It was also found that the financial capacity of the employer at the
relevant time was satisfactory. The Supreme Court in appeal, held that the tribunal could have directed retrospective
operation of the revised rates of dearness allowance even from the date of reference.64 However, once dearness allowance
is fixed by the award of an industrial tribunal, it becomes a condition of service and any vital change in the financial
position of the management can be brought about only after asking for yet another adjudication on the basis of such altered
circumstances vitally effecting the capacity of the employer to pay.65 The question of retrospective operation of awards
‘relating to wages’ has been discussed in detail under the head ‘Wages’ caption—’Retrospective award of wages’.

Sub-clause (ii) - Housing Accommodation

The NCL-I cited the following observations made by the Rege Committee (1944-46) on housing:

Very little, by way of providing more and better housing for industrial labour, has been done either by government or
municipalities. Employers have no doubt made some contribution to better housing by erecting lines, tenements or small cottages
in certain industrial centres. The houses created by them differ greatly from one another and only a small percentage of workers
are, on the whole, accommodated in them. It may, however, be said that employers’ tenements are, all things considered together,
far superior to the slums that have been allowed to develop in cities...a perusal of our ad hoc survey reports in respect of different
industries would show that the housing conditions in general are far from satisfactory.66

The problem of housing industrial labour is a very big problem and involves a huge amount. Efforts are being made by the
Central Government to invite the co-operation of industrial employers to tackle this problem with progressively increasing
financial and other assistance offered by the state governments. The problem has also been engaging the attention of all the
three organs of the state, ie, the legislature, the executive and the judiciary. There have been several enactments on the
subject. It is obvious that the problem cannot be tackled in isolation by industrial tribunals, in meeting the housing
demands made by employees in individual cases. In Patna Electric Supply Co, Gajendragadkar J observed:

It is necessary to emphasise that, in considering the claims of workmen sympathetically on the ground of social and economic
justice, industrial adjudication has to bear in mind the interests of national economy and progress which are relevant and

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material...In the present economic condition of our industries, it would be inexpedient to impose this additional burden on the
employers. Such an imposition may retard the progress of our industrial development and production and thereby prejudicially
affect the national economy. Besides, such an imposition on the employers would ultimately be passed by them to the consumers
and that may result in an increase in prices which is not desirable from the national point of view. It is true that the concept of
social justice is not static and may expand with the growth and prosperity of our industries and a rise in our production and national
income; but so far as the present state of our national economy and general financial condition of our industry are concerned, it
would be undesirable to think of introducing such an obligation on the employers today. That is why we think the industrial
tribunals have very wisely refused to entertain pleas for housing accommodation made by workmen from time to time against their
employers.67

In the circumstances of this case, the tribunal had not discussed the question about the financial liability of the employer to
meet the additional burden imposed by the award. However, in view of the erroneous view with respect to the effect of the
housing scheme sanctioned by the Bihar Government, taken by the tribunal, the award was set aside. Later, in Tocklai
Experimental Station, the court held that under the present economic conditions prevailing in the country, the
responsibility for providing housing accommodation could not reasonably be placed solely on the shoulders of the
employer and expressed the hope that, in due course, the problem may have to be tackled by the industry in co-operation
with the state and the state would have to bear a part of that responsibility. In the circumstances of this case, the
enhancement of the house rent allowance at a flat rate of Rs 20 instead of Rs 10 was held to be justified. But allowing this
enhancement, the court stated a further test that a demand for the provision of housing accommodation could be
entertained, if the financial position of the employer could bear the burden.68 In United Salt Works, Gajendragadkar J
explained that the observations in Patna Electric were ‘not intended to lay down an invariable or inflexible rule.
Exceptions can and should be made where circumstances justify the departure from the said observations’. In the
circumstances of this case, it was held that the undertaking given by the employer to make reasonable provision for
housing to all its permanent employees, would meet the ends of justice.69 In Mohammed & Sons, Wanchoo CJI observed:

We do not think that conditions have changed since that decision was given and we still think that the responsibility for providing
housing facilities should not be thrown on the industries in this country under the present conditions. 70

In Shevaroy Bauxite, in view of the very low terms of remuneration of the workmen and the financial capacity of the
employers, the Supreme Court upheld the direction of the tribunal awarding a house-rent allowance to the workers as well
as staff members of the company equal to 10 per cent per month of the basic wage or pay of the workmen or staff, subject
to a minimum of Rs 5 and maximum of Rs 25.71 In Corpn of Madras, the workmen of the corporation were entitled to
house-rent allowance in terms of the recommendations of the pay commission. The workmen concerned were given
quarters by the corporation in view of the nature of their duties. But after occupying the quarters for about a month, the
workmen vacated the quarters and claimed house-rent allowance in terms of their entitlement. The corporation declined to
pay the house-rent on the plea that when quarters were provided for them, the workmen could not refuse the same and
claim house rent. The workmen, therefore, filed applications under s 33C(2) for computation of the benefit of house-rent
and the labour court directed the payment of house rent allowance to the workmen. In a writ petition against the order of
the labour court, the Madras High Court upheld the direction of the labour court as there was no condition in the rules
relating to the service of the workmen that they should occupy the quarters and that in lieu of their occupation of the
quarters the house-rent allowance shall not be payable.72

On the other hand, in Indian Oxygen, the employer company had built four quarters within the premises of its factory,
intended to lodge the workmen employed in its watch and ward department. The relevant Standing Order provided that
after the employer provided any quarters to a watch and ward employee, it shall be for his personal use only and he shall
not permit outsiders to use them. Though the quarters in question were built with the intention of lodging therein its watch
and ward employees, the fact that it had done, so did not mean that it was under an obligation to give them to the
workmen. The workmen employed in the watch and ward department, raised a dispute claiming that they were entitled to
be provided with the said quarters, that the company had imposed an unreasonable condition that the quarters would only
be for their personal use and that even their families would not be permitted to reside with them therein, that therefore,
none of them except one could live in those quarters and; consequently, the company was bound to pay, in lieu of those
quarters, quarter allowance to each one of them at the rate of Rs 15 per month. The tribunal allowed the claim and directed
the company to pay to each of the said workmen, Rs 10 per month as quarter allowance. But in appeal, the Supreme Court
observed that the tribunal misconstrued the relevant provision in the Standing Orders in assuming that the company was
under an obligation to provide quarters, which assumption was not borne out by the provisions of the Standing Orders in
question, and if there was no obligation on the employer to provide the workmen with quarters, their claim for quarter
allowance in lieu of quarters was not sustainable and, therefore, held that the tribunal was manifestly in error in holding
that in a case where the company did not provide quarters to anyone of these workmen with permission to live with his

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family, the company should pay quarter allowance. The award, therefore, was set aside.73

Sub-clause (ii) - Supply of Light and water:

The value of the supply of light and water also has been brought within the ambit of the definition of wages where these
are supplied to the workmen.

Sub-clause (ii) - Medical Attendance:

The medical and surgical benefit plans providing hospitalisation of workers or the group health insurance, sickness and
accident compensation schemes were pioneered by enlightened employers as an important part of their developing
personnel policies and programmes.74 Two factors, however, have contributed to direct financing of such plans by
employers, viz,

(1) because such payments can be made ‘before income tax’, and

(2) because direct financing can provide greater benefit to the workmen also, as, if the same amount were paid to the
workmen as wages, each employee will be forced to pay taxes on that.

In recent years, the trade unions have sought the expansion of the coverage of these schemes. Consequently, more liberal
plans not only by increasing benefit amounts but also by adding to the kinds of medical services provided have been
introduced. For the above reasons, the employers have not disagreed about the desirability of the medical benefit plans. On
this issue, the employers, therefore, cannot be cast in the role of employees’ antagonist. The issue in negotiation has
essentially been the degree and cost of particular liberalisation of those benefit plans.75 The Government of India enacted
the Employees’ State Insurance Act 1948, designed to provide cash benefits in case of sickness, maternity and employment
injury, payment in the form of pension to dependents of workers who died of employment injuries and medical benefit to
workers. Workers’ families were also brought into the scheme later. It introduced contributory principle to cover these
contingencies, provided protection against sickness, replaced lump sum payments by pension in the case of dependent’s
benefit and placed the liability for claims on a statutory Organisation. The Act applies to all non-seasonal factories run
with power and employing twenty or more persons, excluding mines or railway running sheds. It covers all employees,
manual, clerical and supervisory, and employees engaged by or through contractors, whose remuneration does not exceed
Rs 500 per month. Moreover, the definition of ‘employee’ has been enlarged to include administrative staff and the
persons engaged in connection with purchase of raw materials or sale or distribution of products and related functions by
an amendment of the Act in 1966. It can be extended to cover other establishments or classes of establishments, industrial,
commercial, agricultural, or otherwise. The scheme has been gradually extended but because of the vastness of the country
and the considerable preparatory work involved, such as provision of building, equipment and personnel, the scheme could
not be implemented throughout the country simultaneously. A plan for its phased extension to different places was drawn
up. Transitory provisions which require payment of special contributions by all employers had to be introduced to meet the
objection of the employers in covered areas that Employees State Insurance scheme levy would affect their competitive
position adversely. The contribution of employers in implemented areas was fixed on a rate higher than that for employers
in non-implemented areas.76 In this work, a detailed discussion of the Employees State Insurance Act and the scheme is out
of place. In Remington Rand, the three awards of industrial tribunals were challenged by the employer company before the
Supreme Court, on the grounds that:

(i) the provision for medical facilities is the responsibility not of the employer, but, in a welfare state, of the government;
(ii) assuming that it is an employer’s obligation, medical expenses, which a workman would ordinarily have to incur, were
looked after and taken into account when fair wages were settled; and
(iii) in any event, medical facilities, including those to the workmen’s family and without any ceiling, could not be sustained.

Regarding medical facilities to workmen and their families, the Supreme Court observed:

The tribunals in these cases, not only did not fix any ceiling, but also did not define who would be the members of the family of a
workman. Obviously, in such a scheme, the possibility of its being abused, cannot be altogether ruled out. It was, therefore,
necessary that if the tribunal desired to impose such an additional obligation on the company, it should have made a proper
scheme, defining the limits of the company’s obligation, both as to the ceiling on the benefit and the beneficiaries thereunder.
Vague and indefinite directions, instead of fostering harmony, are likely to open up a vista for future bickerings and disputes in

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their implementation.77

However, on the facts and in the circumstances of the case, the court gave certain directions modifying the awards. In a
later case of the same company, the Supreme Court introduced the same scheme for the workmen in the Madras office of
the company also.78 In National Insurance, affirming the award of the tribunal, directing the employer company to appoint
a medical practitioner, and to pay to the employees, medical expenses, if certified by the medical practitioner, not
exceeding Rs 100 a year, the Supreme Court held that the award was fair and reasonable and the demand for Rs 300 a year
was too excessive and the suggestion for the allowance to be carried forward could not be accepted, as it was neither
proper nor legitimate.79 InNational and Grindlays Bank, the tribunal directed that the employees of the Kanpur Branch of
the National and Grindlays Bank, would be entitled to medical aid and expenses, up to a monetary limit of Rs 250 per
annum, which would be available to the employees as well as to the members of their families. The tribunal further
allowed hospitalisation charges, not only for the employees, but also for members of their families. In appeal by special
leave, the Supreme Court noticed that under the bipartite agreement, the workmen were having the benefit of medical aid
extended to the members of their families, which was not applicable to the workmen before. It was observed that even
though the employees of the Kanpur Branch had no upper limit, their families were given the benefit of medical aid and
there was no justification for the tribunal to extend the hospitalisation facilities to the members of their families, if that was
not enjoyed by the workmen in the other branches of the appellant bank and in other banks which were similarly situated.
Hence, there was no justification for giving the employees of the Kanpur branch, a favoured treatment, which other
employees of the banks and even of the appellant bank, in other branches, could not avail, under the bipartite agreement. In
view of the fact that the bank was agreeable to give a higher limit, as indicated in its offer before the conciliation officer,
which offer was also reiterated before the court, the Supreme Court allowed the appeal partly and directed a higher limit of
Rs 250 to be fixed towards medical aid and expenses of the employees of the Kanpur branch and their families, as defined
in the bipartite agreement, and also entitled each of the workmen to hospitalisation, in terms of the said agreement.80

Sub-clause (ii) - Other Amenities:

The value of any other amenity, any service or any concessional supply of food grains or other requisites, has also been
included within the meaning of wages, by this clause. Such amenities, services or concessions, therefore, will have to be
taken into account as a component of the wages.

Sub-Clause (iii) - Travelling Concession:

The expression ‘any travelling concession’, used in the definition of wage under s 2(rr)(iii), connotes a concession
specifically provided by the employer, in the form of free travelling or travelling at a reduced rate.81 In the group of
appeals reported as Atul Products, the Industrial Tribunal of Gujarat rejected the claim of the workmen, for a free transport
facility, but directed the company to pay an allowance of 15 paise per day to every employee who stayed at a distance of
five miles or more, from the village Atul, but such allowance need not be paid on days on which the employee was on
earned leave or any other type of leave, authorised or otherwise. These directions were challenged by the company as well
as the workmen, before the Supreme Court, in cross-appeals. While the company wanted the allowance awarded by the
tribunal to be set aside, the workmen, on the other hand, required the allowance to be enhanced. In this group of appeals,
both the companies took the plea that it was not the function or duty of an employer to provide transport facilities or pay an
allowance for the same. The common question for consideration of the court, therefore, related to the claim of the
workmen for the payment of a transport allowance, to enable them to go from their place of residence to the place of work.
Both the companies were public limited companies, engaged in the business of manufacturing dyes and chemicals and
other intermediates and were having their factories in the village Atul. The basis of the claim made by the workmen of
both these companies was, that the majority of the workmen employed in these companies came from a distance of 5 to 10
miles. Since the factories were not situated in a place where labour force was available easily, majority of the workmen
had to come from distant villages or the town of Bulsar, and the workmen, therefore, had to incur a bus fare of 40 paise per
trip from Bulsar to Atul and another 40 paise for the return journey. Therefore, each day, a workman had to incur and
expense of 80 paise as bus fare, in going to the village Atul from Bulsar and back and this was too much of an expense,
which could not be borne by an employee from and out of his wages. In the case of Atul Products, the demand was for a
uniform allowance of Rs 15 per month, while in the case of Atic Industries, the demand was slightly different. In the
circumstances of the case, the directions of the tribunal were held justified. The court also rejected the appeal of the
workmen in Atic Industries, for enhancement of the allowance merely because the financial capacity of the employer was
sound and could bear the additional burden.82 In Delhi Electric Supply Undertaking, one of the demands in dispute related
to the claim of the workmen for an increase in the conveyance allowance of the inspectors and superintendents of the Delhi
Electric Supply Undertaking. The tribunal rejected the claim, on the ground that the conveyance allowance had already
been fixed for motorcycles and motorcars on a rational basis and that any disturbance in the rates, will have repercussions
on every category of workmen. But having due regard to the increase in the cost of maintenance, fuel, etc, which the

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employer had itself taken note of and the extra mileage that had to be covered, the Supreme Court, in appeal, gave an
increase of Rs 25 and Rs 12.5 per month, to the superintendents and inspectors, respectively, over the existing rates of
allowance given to them.83

Sub-Clause (iv) - Commission

This sub-clause has been inserted by the Amending Act 46 of 1982. It includes any commission payable on the promotion
of sale or promotion of business, or both. Previously, commission was not considered to be a part of the wages, as its
quantum varied with the promotion of sales or business, brought about by the workman. But now, commission payable to a
workman on promotion of sale or business or both, has specifically been made a component of ‘wages’.

Excluded Items

(a) Bonus

The use of the word ‘any’ before bonus, indicates that it is not only the bonus payable under the Payment of Bonus Act
1965, but a bonus of any type would not form a part of the ‘wages’, under the Act. Insofar as a bonus under the Payment of
Bonus Act is concerned, there is no difficulty in its exclusion from the wages. In Orissa SRTC, the Orissa High Court held
that the minimum statutory bonus payable under the Payment of Bonus Act 1965, is excluded from the definition of wages.
Therefore, it would not form a part of the back-wages awarded to the workman. But, since the workman had been
reinstated with full back wages, he would have been entitled to the statutory minimum bonus payable to him for the period
during which he was out of the job, apart from the wages. Therefore, he was entitled to the bonus, though separately. Even
a bonus which, in nature, is akin to such bonus, though not covered by the Act, would be excluded from the meaning of
wages. But in the case of any other type of ‘bonus’, the question that arises is whether such ‘bonus’ is a ‘remuneration’
within the meaning of the principal clause, or an allowance, within the meaning of cl (i) of the including clause, or is it a
bonus within the meaning of the excluding cl (a)? For instance, in view of its incidents, production bonus, which is
sometimes called the incentive wage or incentive bonus, would appositely fall within the meaning of the word
‘remuneration’, rather than under bonus. It is, therefore, a question of fact, depending upon the facts and circumstances of
each case, as to whether a particular ‘bonus’ would fall within the meaning of the words, ‘remuneration’, ‘allowance’ or
‘bonus’, as used in the definition.84

In State Bank of India, a novel contention was raised before the writ court, that the parties to the settlement-award had
understood and intended that, for computing the wages payable to the workmen, bonus, the contribution of the employer
towards the provident fund and the gratuity, were also to be included. However, in view of the absence of any pleading or
evidence before the tribunal or the High Court, the contention was rejected.85 In Bala Subrahmanya Rajaram, dealing with
the definition of wages under s 2(vi) under the Payment of Wages Act 1936, the relevant portion of which is in pari
materia with the definition of ‘wages’ under this Act, the Supreme Court held that the bonus which is not payable under
the contract of employment, but is payable because of the award of the industrial tribunal, is not ‘wages’ within the
meaning of the Payment of Wages Act.86

In Vayitri Plantations, the Kerala High Court held that the monthly ex gratia payment made to workmen, which was not a
part of the original contract of employment, but was offered by the employer, long after the employee’s promotion, on
terms that it was in appreciation of his good services and the payment had to be shown separately in the books and records
of the employer and was liable to be increased or decreased or totally withdrawn, at the discretion of the employer, was not
includible for the purposes of computing the wages.87

(b) Contribution to Pension or Provident Fund etc

The contribution made by the employer, to any pension fund or provident fund or for any other benefit of the workmen,
under any law, for the time being in force, has also specifically been excluded from the definition of ‘wages’, by the
excluding cl (b). Such contributions made by industrial employers, for retiral or other benefits of their workmen, therefore,
cannot be taken into account in computing ‘wages’ for the purposes of the Act. Hence, any dispute relating to any such
items would not be covered under item one of the Third Schedule, though it may fall under item five of that Schedule.

(c) Gratuity

Gratuity has also been excluded from the definition of wages. Any type of gratuity, whether under the Payment of Gratuity
Act or otherwise, will, therefore, not be taken into account in computing wages for the purposes of this Act.

Wage Concepts

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The Committee on Fair Wages had identified three distinct levels of wages, i.e., (i) the minimum wage; (ii) the fair wage;
and (iii) the living wage. Justice Gajendragadkar observed that “in an expanding economy, the contents of these
expressions also expand and vary.”88 These levels naturally, do not represent a static, inflexible concept; they would vary
and expand according to the economic development and compulsions of social justice’.89 It is, therefore, very difficult, if
not quite impossible, to define, or even describe accurately, the contents of the terms ‘living wage’, ‘fair wage’ or
‘minimum wage’. These terms, or their variants—the ‘comfort or decency level’, the ‘subsistence level’, and the ‘poverty
or the floor level’—cannot and do not mean the same thing in all countries, nor even in different industries in the same
country. What may be a fair wage in a particular industry in one country, may be a living wage in the same industry in
another country. Similarly, what may be a fair wage in a given industry today, may cease to be fair and border on the
minimum wage, in the future.90 In other words, the concepts of ‘minimum wage’, ‘fair wage’ and ‘living wage’ are not
static and would keep on changing with the circumstances, with the growth, both of industries and of the economy, the
living standards and circumstances of the industries and the people.91 The following passage of Philip Snowden on the
wage concepts was cited by Das Gupta J, in Hindustan Times:92

At the bottom of the ladder, there is the minimum basic wage, which the employer of any industrial labour must pay, in order to be
allowed to continue an industry. Above this is the fair-wage, which may roughly be said to approximate to the need-based
minimum, in the sense of a wage which is ‘adequate to cover the normal needs of the average employee, regarded as a human
being in a civilised society’. Above the fair wage, is the ‘living wage’—a wage which will maintain the workman in the highest
state of industrial efficiency, which will enable him to provide his family with all the material things which are needed for their
health and physical well being, enough to enable him to qualify to discharge his duties as a citizen.93

This statement has been reiterated by the court in Workmen v Management of Raptakos Brett & Co Ltd , where Kuldip
Singh J said:

Broadly, the wage-structure can be divided into three categories-the basic ‘minimum wage’, which provides bare subsistence and is
at poverty-line level, a little above is the ‘fair-wage’ and finally, the ‘living wage’, which comes at a comfort level.94

However, the court further observed that though it is not possible to demarcate these levels of the pay structure with any
precision, these are well-accepted norms, which broadly distinguish one category of pay-structure from another.

Minimum Wage

As a matter of fact, the concept of ‘minimum wage’ has recently undergone a progressive change. It is no longer based
upon the subsistence theory, according to which minimum wage equals the cost of commodities necessary to feed and
clothe a worker and his family. In Hindustan Times (supra), Das Gupta J said, ‘at the bottom of the ladder, there is the
minimum basic wage, which the employer of any industrial labour must pay in order to be allowed to continue an
industry’. In other words, the minimum wage is the lowest wage in the scale, below which the efficiency of a worker is
likely to be impaired. However, the content of the expression ‘minimum wage’ too, is not fixed and static. It varies and is
bound to vary from time to time and from place to place. With the growth and development of national economy, living
standards would improve and so would the notions about the respective categories of wages expand and be more
progressive.95 According to the Committee on Fair Wages:

The minimum wage must provide not merely for the sustenance of life, but for the preservation of the efficiency of the worker. For
this purpose, the minimum wage must also accommodate some measure of education, medical requirements and amenities.96

The Committee categorically stated that an industry which was incapable of paying this minimum wage, had no right to
exist and in cases where the continued existence of such an industry was imperative, in the larger interest of the country, it
was the responsibility of the state to take steps to enable that industry to pay at least the minimum wage. The Committee
was of the definite view that for fixing the minimum wage, no regard should be paid to the capacity of the industry to pay
and it should be based solely on the requirements of the worker and his family. In other words, the Committee recognised
that the minimum wage, as described, formed a part of the fair wage, though at its lower level. For claiming such a wage,
the employee, in its view, should not be called upon to prove an employer’s capacity to pay.1 These predilections of the
Committee on Fair Wages, in favour of the minimum wage, have been reverberated by industrial adjudicators in their
awards and particulars by the Supreme Court, in its judicial dicta. In Phaltan Sugar, the labour appellate tribunal said that
the minimum wage now includes not only the bare physical necessities, but also a modicum of comforts, otherwise known
as conventional necessities.2 The Tripartite Committee of the Indian Labour Conference, held in New Delhi in 1957,

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declared the wage policy which was to be followed during the second five-year plan. The Committee accepted the
following five norms for the fixation of ‘minimum wages’:

(i) In calculating the minimum wage, the standard working class family should be taken to consist of 3 consumption units for
one earner; the earnings of women, children and adolescents should be disregarded.

(ii) The minimum food requirement should be calculated on the basis of a net intake of calories, as recommended by Dr
Aykroyd, for an average Indian adult of moderate activity.
(iii) Clothing requirements should be estimated at a per capita consumption of 18 yards per annum, which would give the
average worker’s family of four, a total of 72 yards.
(iv) In respect of housing, the rent corresponding to the minimum area provided for under the government’s industrial housing
scheme, should be taken into consideration in fixing the minimum wage.
(v) Fuel, lighting and other ‘miscellaneous’ items of expenditure should constitute 20 of the total minimum wage.3

(vi) Children’s education, medical requirement, minimum recreation, including festivals/ceremonies and provision for old
age, marriage, etc, should further constitute 25 percent of the total minimum wage.4

The standards of minimum wage, as laid down by the committees, were adopted by the Supreme Court also, in holding
that the minimum wage must provide not merely for the bare subsistence of life, but also for the preservation of the
efficiency of the worker and for this purpose, the minimum wage must also provide for some measure of education,
medical requirements and amenities and that the minimum wage rates must ensure not only the mere physical needs of the
worker, which would keep him just above starvation, but must father ensure for him, not only his subsistence and that of
his family, but also to preserve his efficiency as a workman.5 This judicially pronounced concept of the components of the
minimum wage has been generally accepted by industrial adjudication. Sometimes, the ‘minimum wage’ is described as a
‘bare-minimum wage’, in order to distinguish it from the wage structure, which is ‘subsistence plus’ or fair wage. But too
much emphasis on the adjective ‘bare’ in relation to the minimum wage, is apt to lead to an erroneous assumption, that
‘minimum wage’ is a wage which enables the worker to cover his bare physical needs and keep himself just above
starvation. That clearly is not intended by the concept of ‘minimum wage’. On the other hand, since the capacity of the
employer to pay is treated as irrelevant, it is but right that no addition should be made to the components of the minimum
wage, which would take minimum wage near the lower level of fair wage, but the components of this concept must ensure
for the employee, not only his subsistence and that of his family, but must also preserve his efficiency as a worker.6 In the
words of Hegde J:

Minimum wage does not mean wage just sufficient for bare sustenance. At present, the concept of a minimum wage is a wage
which is somewhat intermediate to a wage which is just sufficient for bare sustenance and a fair wage. That concept includes not
only a wage sufficient to meet the bare sustenance of an employee and his family, but it also includes expenses necessary for his
other primary needs, such as medical expenses, expenses to meet some education for his children and in some cases, transport
charges etc.7

This concept of minimum wage is in harmony with the theory that in all civilised countries, minimum wage approximates
to the statutory minimum wage which the state should strive to achieve, particularly in this country, having regard to the
Directive Principles of the State Policy, enshrined in the Constitution. The recommendations of the Committee on Fair
Wages, that in awarding the minimum wage, the capacity of the employer to pay is irrelevant and where an industry cannot
afford to pay the minimum wage, it has no right to exist, has also been emphasised by judicial pronouncements. In Bijay
Cotton Mills, dealing with a challenge to the constitutional validity of the provisions of the Minimum Wages Act, relating
to fixation of minimum wages, on the grounds of repugnancy to Art. 19(1)(g), speaking for the Supreme Court, Mukherjea
Jobserved:

Individual employers might find it difficult to carryon their business on the basis of the minimum wages fixed under the Act, but
this must be due entirely to the economic conditions of these particular employers. That cannot be a reason for striking down the
law itself, as unreasonable.8

In Crown Aluminium Works, Gajendragadkar J vehemently held that the principle, that no industry has the right to exist
unless it is able to pay its workmen at least a bare minimum wage, admits no exceptions, and the employment of labour on
starvation wages cannot be encouraged or favoured in a modern democratic welfare state. If, therefore, an employer cannot
maintain his enterprise without cutting down the wages of his employees below even a bare subsistence or minimum wage,

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he would have no right to conduct his enterprise on such terms.9 These dicta have since become classic.10 In Express
Newspapers, speaking for the court, Bhagwati J, observed:

...whereas the bare minimum or subsistence wage would have to be fixed irrespective of the capacity of the industry to pay, the
minimum wage thus contemplated, postulates the capacity of the industry to pay and no fixation of wages which ignores this
essential factor of the capacity of the industry to pay, could ever be supported. 11

But in U Unichoyi (supra) explaining these observations, Gajendragadkar J said that in the Express Newspapers’ case, the
court was dealing with the statutory wage structure, where s 9 of the Working Journalists (Conditions of Service and
Miscellaneous Provisions) Act 1955, authorised the imposition of a wage structure very much above the level of the
minimum wage and the observations of Bhagwati J in that case, were made in that context, which could not be and should
not be divorced from the text of the provisions, with respect to which they were made. In Kamani Metals, speaking for the
court, Hidayatullah J, with eloquent candour remarked:

...minimum wage which, in any event, must be paid, irrespective of the extent of profits, the financial condition of the
establishment or the availability of workmen on lower wages. This minimum wage is independent of the kind of industry and
applies to all alike big or small. It sets the lowest limit below which wages cannot be allowed to sink, in all humanity.12

The same sentiment has been reverberated by Kuldip Singh J, in Raptakos Brett, in observing that the wage-structure
which approximately answers the six components enumerated therein, is nothing more than a ‘minimum wage’ at
subsistence level and added that the employees are entitled to the ‘minimum wage’ at all times and under all
circumstances. An employer who cannot pay the minimum wage has no right to engage labour and no justification to run
the industry.13 In S Krishna Murty, in a writ petition under Art. 32 of the Constitution, filed on behalf of the workmen of
the irrigation department of the Andhra Pradesh State Government, the Supreme Court noted that no minimum wage had
been fixed for the category of the workmen like the workmen employed in the irrigation department. In the facts and
circumstances of the case, the court directed the state government to fix the minimum wage for such workmen within four
months from the date of the order.14 The concept of minimum wage too, is dynamic. It is a wage-structure above the mere
subsistence wage. It takes into account, primary amenities, such as medical care and education. As the standard of living
increases, there must be a gradual change in the concept of the minimum wage, in any developing economy.15 In fixing this
wage, the industrial adjudicator or any other authority, will have to consider the position from the point of view of the
worker. This wage will, therefore, have to be fixed irrespective of the capacity of the industry to pay.16 In other words, it is
the first charge on the ‘industry’.17 It is universally recognised that a minimum wage must be prescribed to prevent the evil
of ‘sweating’ and for the benefit of workmen, who are not in a position to bargain with their employers.18The minimum
wage policy, as it has emerged in this country, distinguishes between the organised industries and the sweated ones. The
Minimum Wages Act 1948 is an instrument which seeks to protect the interests of the workers in the latter. In the
organised sector, the wage fixing authorities have generally been guided by the report of the Committee on Fair Wages.
The minimum wage defined by it, indicated only the components which should be taken into account in fixing the
minimum wage. It was the Indian Labour Conference (15th session) which, for the first time, moved in the direction of
formally quantifying its main components.19 A Minimum Wage Fixing Machinery Convention was held in Geneva, in the
year 1928 and the resolutions passed in that Convention were embodied in the International Labour Code. These
resolutions required that for the purpose of determining the minimum rates of wages to be fixed:

... the wage-fixing body should, in any case, take account of the necessity of enabling the workers concerned, to maintain a suitable
standard of living. For this purpose, regard should primarily be had to the rates of wages being paid for similar work in trades
where the workers are adequately organised and have concluded effective collective agreements, or, if no such standard of
reference is available in the circumstances, to the general level of wages prevailing in the country or in the particular locality.20

In the light of these resolutions, the Whitely Commission examined the question of ‘minimum wage’ and gave a general
conclusion that it was likely that there were many trades in which a minimum wage might be desirable, but not
immediately practicable and recommended that ‘as in other instances cited, the policy of gradualness should not be lost
sight of, if the desired end is to be achieved’.21 The Central Legislative Assembly, in the year 1938, adopted a resolution,22
urging the payment of ‘sufficient wages’ and fair treatment to workers employed in industries receiving protection or
subsidy from the government. ‘Sufficient wage’ was defined as ‘a wage which would ensure to every worker, the
necessities for existence, food, clothing, housing and education, taking into account, at the same time, the practical side of
the question and the needs of the industry’. However, the implementation of the resolution was deferred.

The ‘minimum wage’ was discussed in the fifth session of the Indian Labour Conference, held in September 1943, but in

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the context of ‘social security’. The question of statutory wage control was again discussed by the fourth session of the
Standing Labour Committee, held in January 1944. The Committee came to the conclusion that there was a fair body of
opinion in favour of some form of minimum wage for regions, but the enforcement of the minimum wage was a matter of
very great importance. After a full debate in another session of the Indian Labour Conference, and scrutiny in the special
sub-committee appointed by it, the Minimum Wages Bill was introduced in the Central Legislative Assembly in April
1946 and the Minimum Wages Act 1948, was enacted, which came into force on 15 March 1948. The main object of the
Act is to prevent ‘sweated’ labour, as well as to prevent the exploitation of unorganised labour. It proceeds on the basis
that it is the duty of the state that, at least minimum wages are paid to the employees, irrespective of the capacity of the
industry or the unit, to pay the same. The mandate of Art. 43 of the Constitution is that the state should endeavour to
secure, by suitable legislation or economic organisation or in any other way, to all workers, agricultural, industrial or
otherwise, work on living wage, under conditions of work which ensure a decent standard of life and full enjoyment of
leisure and social and cultural opportunities. This fixing of a minimum wage is just a first step in that direction. In the
course of time, the state has to take many more steps to implement that mandate.23

The policy of the Act, therefore, is to prevent the employment of such sweated labour, in the interest of general public, and
so, in prescribing the minimum wage rates, the capacity of the employer need not be considered, because what is being
prescribed is the minimum wage rates, which a welfare state assumes, every employer must pay before he employs the
labour.24 If the labourers are to be secured in the enjoyment of minimum wages and they are to be protected against
exploitation by their employers, it is absolutely necessary that restraints should be imposed on their freedom of contract
and such restriction cannot, in any sense, be said to be unreasonable. On the other hand, the employers cannot be heard to
complain if they are compelled to pay the minimum wages to their labourers, even though, the labourers, on account of
their poverty and helplessness, are willing to work on lesser wages.25 The Act does not define ‘minimum wages’,
presumably because it would not be possible to lay down a uniform wage for all industries throughout the country, on
account of different and varying conditions prevailing from industry to industry and from one part of the country to
another. In this connection, the following observations of the Supreme Court are noteworthy:

The concept of minimum wage is likely to undergo a change with the growth of our economy and with the change in the standard
of living. It is not a static concept. Its concomitants must necessarily increase with the progress of the society. It is likely to differ
from place to place and from industry to industry. That is clear from the provisions of the Act itself and is inherent in the very
concept. That being the case, it is absolutely impossible for the legislature to undertake the task of fixing the minimum wages in
respect of any industry, much less in respect of an employment. That process must necessarily be left to the government.26

Although the Minimum Wages Act was intended mainly as a measure of preventing sweating or exploitation of labour,
through the payment of unduly low wages, it took into account, such employments in which labour was unorganised or
weakly organised and over the years, a number of new employments have been added by the state governments, to the
original schedule, depending on local requirements. But such extension of the coverage of the Act, brought in its wake,
difficulties of implementation.27 The following recommendations of the NCL-I, in connection with the fixing of the
minimum wage, are apposite:

The minimum wage may thus vary from region to region and even within the same region, from time to time, depending on
particular situations. Prescribing some rigid criteria in regard to minimum wage fixation is, therefore, neither feasible nor desirable.
It will necessarily have to be left flexible. We are further of the opinion that laying down a rigid cash equivalent of the content of a
statutory minimum wage, whose coverage is essentially transitional, under conditions of development, would not serve any useful
purpose.28

In Transport Corpn of India, a single judge of the Bombay High Court pointed out that when the minimum rates of wages
are fixed by the ‘appropriate government’, under the provisions of the Minimum Wage Act, then industrial adjudicators are
not supposed to fix the minimum rates of wages, because in such a case, ‘fixation’ is done only by the government. The
adjudicators, therefore, do not ‘fix’ the minimum rates of wages. They merely ascertain what the minimum rates of wages
for the purposes of deciding ‘fair-wage’ are.29 In Millowners Assn (supra), the Supreme Court held that a basic minimum
wage can be fixed by an industrial tribunal when the statute has not fixed the minimum wage.30Section 3(2A) of the
Minimum Wage Act 1948, does contemplate fixation of minimum wage by industrial adjudication. In fixing such a
minimum wage, the tribunal may take into account all the facts and fix the minimum wage, which may even be higher than
the minimum wage contemplated under the Minimum Wages Act.31

The basic concept on which the provisions of the Minimum Wages Act are founded, is to prevent the sweating and
exploitation of labour, through payment of unduly low wages. It would, therefore, conceptually follow, that just as in the
case of scheduled industries, statutorily determined minimum wages have to be paid by the employer to his employees, in

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order to prevent sweating and exploitation of labour, so must the employer in any establishment not covered by the
schedule, also pay to his employees, a minimum wage, because what applies to the establishments included in the schedule
to the Minimum Wages Act, must, on principles of social justice, apply with equal force, to industrial establishments not
covered in the schedule as well. In such cases, considerations of social justice ought to play a major role in shaping the
social, economic and industrial policies of a welfare state. This aspect has to be borne in mind by industrial adjudicators in
fixing the level of wages. From the judicial dicta,32 it is clear that in fixing the bare minimum wages and subsistence
wages, industrial adjudicators will have to consider the position from the point of view of the worker, the capacity of the
employer to pay such a wage would be irrelevant. The concept of minimum wage is no longer the same as in 1936, and
even 1957 is way behind. In the language of Kuldip Singh J:

A worker’s wage is no longer a contract between an employer and an employee. It has the force of collective bargaining under the
labour laws. Each category of the wage structure has to be tested at the anvil of social justice, which is the live-fibre of our society
today.

The learned judge further observed:

Purchasing power of today’s wage cannot be judged by making calculations which are solely based on 30 or 40 years old wage-
structure. The only reasonable way to determine the category of wage structure, is to evaluate each component of the category
concerned, in the light of the prevailing prices. There has been a sky-rocketing rise in the prices and the inflation chart is going up
so fast, that the only way to do justice to the labour, is to determine the money value of the various components of the minimum
wage in the context of today.33

In non-scheduled industries, wages are fixed in a variety of ways, of which two are accentuated, viz, collective bargaining
and failing that, industrial adjudication. Generally, a wage-settlement proceeds by first fixing the wage for the lowest
category of workers in the industry or unit, and then differentials for scales are built up on the basis of this minimum. If
wage determination is industry-wise, within an area, the wage fixed, whether it is through collective bargaining or with the
help of industrial adjudication, is on the basis of the overall capacity of the industry to pay. However, industrial
adjudication has consistently taken the view that the capacity to pay, of an individual unit, is irrelevant for fixing the
minimum wage for the industry in a local area, so long as the industry as a whole, can pay. If a unit has no capacity, either
it goes out of existence or improves its working to acquire the necessary capacity. Where, however, the wages for
individual units in a local area are fixed through collective bargaining or industrial adjudication, arguments are entertained,
in the process of such determination, about the capacity of the units to pay.34

Though, in fixing a non-statutory minimum wage, the capacity of the industry to pay is irrelevant, industrial adjudication
cannot proceed to fix the fair wage, while purporting to fix the minimum wage without taking the financial capacity of the
industry to pay, into consideration.35 The adjudicator has also to bear in mind, the minimum wage paid by other similarly
situated industries in the region. For instance, in Orient Paper Mills, the tribunal took into consideration, other industries in
the region, in which minimum wages were higher than the minimum wages paid by the company in question, because
there were no other comparable concerns in the same line of business in the region. The tribunal took the view that the
industry-cum-region rule in French Motor Car,36 could not apply to the facts of the case and observed that if the minimum
wages in the company were to be fixed more on the basis of the minimum wages prevailing in the other industries in the
region, then the revision was really necessary. Accordingly, it thought that it would be appropriate to fix the minimum
wage in the company, as the minimum wage prevailing in those industries. In appeal, the Supreme Court observed that,
having come to the conclusion which the tribunal did, it should have given full effect to the principle laid down in French
Motor Car, and therefore, should have proceeded to fix the minimum wage in the company on the basis of the average
minimum wage prevailing in the other industries, instead of proceeding on the alternative calculation on some other basis,
so as to arrive at a lower figure. In this connection, the court pertinently pointed out that the total wage-packet of the three
components, viz, the basic wage, the dearness allowance and the production bonus, had to be taken into consideration in
fixing the minimum wage.37

In Jaydip Industries, during the pendency of an industrial dispute relating to wages, before the industrial tribunal, the
Government of Maharashtra fixed the minimum rates of wages for certain employees including paper and paper board
manufacturing industry. Subsequently, the tribunal adjudicated the reference made to it and revised the rates of wages for
the workmen. The award of the tribunal was challenged in appeal before the Supreme Court, by the employer, contending
that once the appropriate government had fixed the minimum rate of wages in the employment under s 3 of the Act, it was
not open to the tribunal to fix higher rates of wages as minimum wages. Repelling the contention, the Supreme Court
observed that the fixation of minimum rates of wages by the appropriate government does not operate as a bar to the
tribunal to fix the minimum wages at higher or lower rates, if the dispute was pending at the time of the fixation of the

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minimum wages.38 In other words, the tribunal was not bound by the rates of wages fixed by the government under the
provisions of s 3 and could fix rates of minimum wages in its award. Since the rates fixed by the tribunal were minimum
rates of wages.

Fair Wage

Das Gupta J defined ‘fair wage’ as something above the minimum wage ‘which may roughly be said to approximate to the
need-based minimum, in the sense of a wage which is adequate to cover the normal needs of the average employee
regarded as a human being in a civilised society.’39 In the words of Hidayatullah J, ‘a fair wage, lies between the
minimum-wage which must be paid in any event and the living wage, which is the goal’.40 Bhagwati J described a ‘fair
wage’ as a mean between the living-wage and the minimum-wage.41 Marshall would consider the rate of wages prevailing
in an occupation as ‘fair’ if it is ‘about one level with the average payment for tasks in other trades, which are of equal
difficulty and disagreeableness, which require equally rare natural abilities and an equally expensive training’. Prof Pigou
would apply two degrees of fairness, in judging a wage-rate, viz, ‘fair in the narrower sense’, and ‘fair in the wider sense’.
A wage-rate, in his opinion, is ‘fair in the narrower sense’, when it is equal to the rate current for similar workmen in the
same trade and the neighbourhood, and fair ‘in the wider sense’, when it is equal to the predominant rate for similar work
throughout the country and in the generality of trades’.42 It may roughly be said to approximate to the need-based
minimum, in the sense of wage which is adequate to cover the normal needs of the average employee regarded as a human
being in a civilised society.43 The fair wage must also take note of the economic reality of the situation and the minimum
needs of the worker, having a fair sized family, with an eye to the preservation of his efficiency as a worker.44 A fair wage
is thus, related to fair workload and the earning capacity. It is a step lower than the living wage. The concept of fair wage,
therefore, involves a rate sufficiently high, to enable the worker to provide a standard family, with food, shelter, clothing,
medical care and education of children, appropriate to his status in life, but not at a rate exceeding the wage earning
capacity of the class of establishment concerned.45 But only such of the items which go directly to reduce the expenditure
that would otherwise go into the family budget, are relevant in fixing the fair wage.46 As time passes and prices rise, even a
fair wage fixed for the time-being, tends to sag downwards and then a revision becomes necessary.47 In the language of
Hidayatullah J:

A fair wage is thus related to the earning capacity and workload. It must, however, be realised that a fair wage is not a living wage,
by which is meant a wage which is sufficient to provide not only the essentials above-mentioned, but a fair measure of frugal
comfort, with an ability to provide for old age and evil days. Fair wage lies between the minimum wage, which must be paid in any
event, and the living wage, which is the goal.48

Thus, while the lower limit of the fair wage must obviously be the minimum wage, the upper limit is equally set by what
may broadly be called the capacity of the industry to pay. This will depend not only on the economic position of the
industry, but also on its future prospects. Between these two limits, the actual wage will depend on a consideration of
certain factors, viz:

(i) the productivity of labour,

(ii) the prevailing rates of wages,

(iii) the level of national income and its distribution, and

(iv) the place of the industry in the economy of the country. 49

In the actual calculation of the fair wage, the Committee on Fair Wages observed that it was not possible to assign any
definite weights to these factors. The wage fixing machinery should relate a fair load of work and the needs of a standard
family, consisting of three consumption units, inclusive of the earner. The capacity of a particular industry in a specified
region, should be taken into account to determine ‘the capacity to pay’, and this in turn, could be ascertained by taking a
fair cross-section of the industry in the region concerned. The committee recognised the fact that ‘the present level of our
national income does not permit of the payment of a ‘living wage’ on the standards prevalent in more advanced countries’.
But according to the committee, this should not preclude the fixation of fair wages on different and lower standards, and
‘at almost any level of the national income, there should be a certain level of minimum wages, which the society can
afford; what it cannot afford are minimum wages fixed at a level which would reduce employment itself and thereby,
diminish the national income.’ The Committee on Fair Wages also recognised that the concepts laid down by it could not
be viewed in any static sense; they would very from time to time, depending on the economic and social developments in
the country. The principle that the luxuries of today, become necessities of tomorrow, was implicit in this recognition.
These recommendations have exerted a considerable influence on the wage fixing authorities while formulating the wage

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structures in various industries and industrial units.

Living Wage

The concept of living wage, which has influenced the fixation of wages, statutorily or otherwise, in all economically
advanced countries, is an old and well-established one. There are several current definitions of ‘living wage’, attempted in
the recent past.50 The quintessence of all these definitions is that a living wage should enable the male earner to provide for
himself and his family, not merely the bare essentials of rood, clothing and shelter, but also a measure of frugal comfort,
including education for the children, protection against ill-health, requirement of essential social needs, and a measure of
insurance against the more important misfortunes, including old-age.51 In other words, a living wage should not only
provide the essentials contemplated by a fair wage, but should also be sufficient to provide for a fair measure of frugal
comfort, with an ability to provide for old-age and evil days.52 The living wage, according to the Committee on Fair
Wages, represents the higher level of wage, and naturally, it would include all amenities which a citizen living in a modern
civilised society is entitled to, when the economy of the country is sufficiently advanced and the employer is able to meet
the expanding aspirations of his workers. As the traditional doctrine interprets it, the living wage is a will-o’-the-wisp,
which floats a little further ahead, an arm’s length out of reach. Its pursuit belongs to the same category as ‘squaring the
circle’.53 In Hindustan Times, Das Gupta J, wistfully observed:

While industrial adjudication will be happy to fix a wage-structure which would give the workmen, generally, a living wage,
economic considerations make that only a dream for the future. That is why, the industrial tribunals in this country generally
confine their horizon to the target of fixing a fair wage. 54

In a later case, viz, RBI Employees Assn, in the same strain, Hidayatullah J remarked:

...our political aim is ‘living wage’, though in actual practice, living wage has been an ideal which has eluded our efforts like an
ever-receding horizon and will so remain for some time to come. Our general wage structure has at best, reached the lower levels
of fair wage, though some employers are paying much higher wages than the general average.55

In Hindustan Antibiotics, Subba Rao CJI, struck an optimistic note, that the prosperity in the country would help to
improve the conditions of labour and the standard of life of the labour can be progressively raised from the stage of
minimum wage, passing through need-bound fair-wage, to a living wage.56 More than two decades later, Khalid J, in
Indian Hume Pipe Co, still echoing the sentiments of Hidayatullah J, observed:

...This court has, often times, emphasised the need for a ‘living wage’ to workmen, instead of a subsisting wage. It is indeed a
matter of concern and mortification that even today, the aspirations of a living wage for workmen remain a mirage and a distant
dream.57

As nothing short of a living wage can be a fair wage, he exhorted that, ‘it should be the combined effort of all concerned,
including the courts, to extend the workmen a helping hand, so that they get a living wage, which would keep them to
some extent at least, free from want’. In Raptakos Brett, Kuldip Singh J, has observed:

A living wage has been promised to the workers under the Constitution. A ‘socialist’ framework, to enable the working people a
decent standard of life, has further been promised by the 42nd amendment. The workers are hopefully looking forward to achieve
the ideal. The promises are piling-up, but the day of fulfilment is nowhere in sight. Industrial wage, looking as a whole, has not yet
risen higher than the level of minimum wage.58

The Directive Principles enshrined in the Constitution, make it the duty of the state to strive and secure living wages for
the working class. This, however, cannot be achieved at one stroke, for the interests of the industry and its survival are as
important as the betterment of the standard of living of the working class. All the same, unless there is a continuous and
progressive trend towards securing better living conditions for labour, which would necessarily, in its turn, call for a
determination of a progressive, higher minimum wage, it is only likely that the goal may never be reached.59

Machinery for Wage Fixation

In United Kingdom

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In the United Kingdom, where trade boards, and not general boards, have been set up, the Minister of Labour appoints a
board if he is satisfied that no adequate machinery exists in a particular trade or industry, for effectively regulating the
wages and that it is necessary to provide such machinery. The trade board is a fairly large body, consisting of an equal
number of representatives of employers and workers with a few independent members, including the chairman. Although,
appointments are made by the minister, the representatives of employers and workers are appointed on the
recommendation of the associations of the concerns. The trade board publishes a notice announcing its tentative proposals
for the fixation or revision of a wage-rate and invites objections or comments. After a two months’ notice, the board takes
a final decision and submits a report to the minister, who must confirm the rate unless, for any special reason, he returns
the recommendations of the board for further consideration.60

The Wage Council Act 1945 (8 and 9 Geo VI c 17), provides for the establishment of wage councils. The Minister of
Labour and National Services, has the power to make a wage council order, after considering objections made with respect
to the draft order, on behalf of any person appearing to him to be affected. The wage council makes such investigation as it
thinks fit and publishes a notice of the wage regulation proposals and the parties affected are entitled to make written
representations with respect to these proposals, whose representations the wage council considers. The wage council can
make such further inquiries as it considers necessary and thereafter, submits the proposals to the minister, either without
any amendment or with such amendments as it thinks fit, in regard to the same. The minister considers these wage-
regulation proposals and makes an order giving effect to the proposals from such date as may be specified in the order.
Remuneration fixed by the wage regulation orders is called the ‘statutory minimum remuneration’. There are similar
provisions under the Agricultural Wage Regulation Act 1924 (14 and 15 Geov c 37), in regard to the regulation of wages
by agricultural wage committees and the agricultural wage board.

In The United States of America

In the United States of America, some state laws prescribe that the representatives of employers and workers should be
elected, but in the majority of states, the administrative authorities are authorised to make direct appointments. The boards
so set up, are empowered to make inquiries, to call for records, to summon witnesses and to make recommendations
regarding the minimum wages. Some American laws lay down a time-limit for the submission of the proposals. The
administrative authority may accept or reject a report and refer it back for reconsideration or form a new board for
considering the matter afresh. Some of the laws provide that if the report is not accepted, the matter must be submitted
again to the same wage board.61 The whole procedure for the determination of wages, in the United States of America, is
described in two decisions of the Supreme Court: (a) Inter-State Commerce Co v MR Luis Ville 62 and (b) Opp Cotton Mills
v Administrator. 63The Fair Labour Standards Act 1938, in the United States of America, provides for a convening by the
administrator, of industry committees, for each such industry, which, from time to time, recommends the minimum rates of
wages to be paid by the employers. The committee recommends to the administrator, the highest minimum wage-rates for
the industry, which it determines, having due regard to the economic and competitive conditions, will not substantially
curtail employment in the industry. Wage orders can thereupon be issued by the administrator, after due notice to all
interested persons and after giving them an opportunity to be heard.

In Australia

In Australia also, there are provisions in various states for the appointment of wage boards, the details of which are not
necessary for the present purpose. Reference, as an instance, may be made to the wage board system in Victoria, which
was established in 1896, as a means of directly regulating wages and working conditions in industries subject to
‘sweating’, and was not intended to control industrial relations as such. Under the Factories and Shops Act 1924, wage
boards are to be set up for various industries, with a court of industrial appeals, to decide upon appeals from the
determinations of a wage board. Industries for which there is no special wage board are regulated by the general wages
board, which consists of two employers’ representatives, nominated by the Victorian Chamber of Manufactures, two
employees’ representatives, nominated by the Melbourne Trade Hall Council, and a chairman, agreed upon by these four
members or nominated by the Minister of Labour.64 It may be noted that in the majority of cases, these wage boards are
constituted of an equal number of representatives of the employers and the employees and one or more independent
persons, one of whom is appointed as the chairman.

In India

The history of wage-fixation in India is of recent vintage. There was practically no effective machinery until the second
world war, for the settlement of industrial disputes or the fixation of wages. The first important enactment for the
settlement of disputes was the Bombay Industrial Disputes Act 1938, which created an industrial court. The Act had
limited application and the court was not charged with the responsibilities of fixing and regulating wages. During the war,
state intervention in the settlement of industrial disputes, became necessary and numerous adjudicators were appointed to

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adjudicate on trade disputes under the Defence of Indian Rules. The Industrial Disputes Act 1947, is the first effective
measure with an all-India applicability, for the settlement of industrial disputes. Under this Act, various tribunals have
passed awards regulating wages in a number of important industries.

The first enactment, specifically to regulate wages in this country, is the Minimum Wages Act 1948. This Act is limited in
its operation to the so-called sweated industries, in which labour is practically unorganised and working conditions are far
worse than in organised industries. Under that Act, the appropriate government has either to appoint a committee to hold
inquiries and to advise it in regards to the fixation of the minimum rates of wages, or, if it thinks that it has enough material
on hand it has to publish its proposals for the fixation of wages, in the Official Gazette and to invite objections. The
appropriate government finally fixes the minimum rates of wages, on the receipt of the recommendations of the committee
or of the objections from the public. There is no provision for appeal. There is an advisory board in each state, to co-
ordinate the work of the various committees. There is also a central advisory board, to co-ordinate the work of the state
boards. Complaints of non-payment of the minimum rates of wages fixed by government, may be taken to claim
authorities. Breaches of the Act are punishable by criminal courts.65

It is worthy of note that these committees, sub-committees, state advisory boards and central advisory boards, are to
consist of persons to be nominated by the Central Government, representing employers and employees in the scheduled
employments, who shall be equal in number, and independent persons not exceeding one-third of its total number of
members; one of such independent persons shall be appointed the chairman, by the appropriate government. Under an
amendment to the Bombay Industrial Relations Act 1946, wage boards can be set up in the state of Bombay, either
separately for each industry or for a group of industries. The wage board is to consist of an equal number of representatives
of employers and employees and some independent persons, including the chairman, all of whom would be nominated by
the government. The board decides disputes relating to reduction in the number of persons employed, rationalisation or
other efficiency systems of work, wages and the period and mode of payment, hours of work, and leave with or without
pay. When a matter has been referred to a wage board, no proceedings may be commenced or continued before a
conciliator, conciliation board, labour court or industrial court. The wage boards are authorised to form committees for
local areas, for the purpose of making inquiries. It is obligatory on the government to declare the decisions of the wage
boards, binding, but where the government feels that it will be inexpedient, on public grounds, to give effect to the whole
or any part of the decision, the matter has to be placed before the state legislature, the decision of which will be binding.
There is a provision for filing of appeals from the decisions of the wage boards, to the industrial court. Those wage boards,
moreover, are under the superintendence of the industrial court. Recommendation 30, being the recommendation
concerning the application of the minimum wage-fixing machinery, made by the International Labour Office in 1949
(extracts from Conventions and Recommendations 1919-49, published by International Labour Office 1949), is
noteworthy, which is in the following words:

(1) The minimum wage-fixing machinery, whatever form it may take (for instance, trade board for individual trades,
tribunals), should operate by way of investigation, into the relevant conditions in the trade or part of trade concerned,
and consultation with the interests primarily and principally affected, that is to say, the employers and workers in the
trade or part of trade, whose views on all matters relating to the fixing of the minimum rate of wages should, in any case,
be solicited and be given full and equal consideration.
(2)

(a) To secure greater authority for the rates that may be fixed, it should be the general policy, that the employers
and workers concerned, through representatives equal in number or having equal voting strength, should
jointly take a direct part in the deliberations and decisions of the wage-fixing body; in any case, where
representation is accorded to one side, the other side should be represented on the same footing. The wage-
fixing body should also include one or more independent persons, whose votes can ensure effective decisions
being reached in the event of the votes of the employers’ and workers’ representatives being equally divided.
Such independent persons should, as far as possible, be selected in agreement with or after consultation with
the employers’ and workers’ representatives, on the wage-fixing body.

(b) In order to ensure that the employers’ and workers’ representatives shall be persons having the confidence of
those whose interests they respectively represent, the employers and workers concerned should be given a
voice as far as is practicable in the circumstances, in the selection of their representatives, and if any
organisations of the employers and workers exist, these should, in any case, be invited to submit names of
persons recommended by them, for appointment on the wage-fixing body.
(c) The independent person or persons mentioned in paragraph (a), should be selected from among men or women
recognised as possessing the necessary qualifications for their duties and as being dissociated from any interest
in the trade or part of trade concerned, which might be calculated to put their impartiality in question.66

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The following appraisement of the system of establishing trade boards, by the Committee on Fair Wages, may be noted in
this context:

A trade board has the advantage of expert knowledge in the special problems of the trade for which it has been set up and is,
therefore, in a position to evolve a scheme of wages suited to the conditions obtaining in the trade. The system, however, suffers
from the limitation that there is no one authority to co-ordinate the activities of the various boards, with the result that wide
disparities may arise between the scales sanctioned for similar industries. A general board ensures due co-ordination’, but is far
less competent than a trade board, to appreciate the special problems of each trade. The Bombay Textile Labour Inquiry
Committee have stared in their report, that the trade board system is best suited to Indian conditions, particularly because the very
manner of functioning of trade boards is such, that wages are arrived at largely by discussion and conciliation and that it is only in
exceptional cases, that the deciding votes of the chairman and of the independent members have to be given.67

It is clear therefore, that a wage board, relating to a particular trade or industry, constituted of a equal number of
representatives of employers and employees, with an independent member or members, one of whom is appointed the
chairman, is best calculated to arrive at the proper fixation of wages in that industry. The NCL-I made the following
recommendations:

There is little scope for making any radical departure from the existing procedures and practices being adopted for wage fixation in
organised industry. Building up on the procedures evolved so far and making improvements in the process, would indeed be
necessary. There is no doubt that wage boards have done some useful work and they should continue...Some of these and other
recommendations of which we would like to make a special mention are:
(i) There need be no independent persons on the wage board. If considered necessary, an economist could be associated with
it, but only as an assessor;
(ii) As far as possible, the chairman should be appointed by the common consent of the parties. An agreed panel of names
should also be maintained by the proposed National/State Industrial Relations Commissions, for appointment as
chairman. They should preferably be drawn from the members of the proposed National or State Industrial Relations
Commissions. In case a chairman is appointed by the consent of both the parties, he should arbitrate if no agreement is
reached in the wage board. A person should not be appointed as chairman of more than two wage boards at a time. In
case the commission is unable to prepare a panel of agreed names, the government shall appoint the chairman;
(iii) The wage boards should normally be required to submit their recommendations within one year of their appointment. The
date from which the recommendations would take effect, should be mentioned by the wage board, in the
recommendation itself;
(iv) The recommendations of a wage board should remain in force for a period of five years;

(v) Unanimous recommendations of wage boards should be made statutorily binding. In cases where no agreement is reached
within the wage board, the chairman should arbitrate, if the chairman, before appointment, was acceptable to both sides;
(vi) A Central Wage Board Division should be set up in the Union Ministry of Labour and Employment on a permanent basis,
to service all wage boards. This division should lend the necessary staff support to the wage boards and also supply
statistical and other information needed by them, for the expeditious disposal of the work; and

(vii)A manual of procedure for wage boards should be prepared.68

Wage Fixation by Industrial Adjudication

Subject Matter of Reference

The Third Schedule to the Act, enumerates the matters which are within the jurisdiction of an industrial tribunal,
constituted under s 7 A. Item I of this schedule refers to ‘wages, including periods and modes of payment’. From a cursory
reading of this item and the definition of ‘wages’ in s 2(rr), it would appear that on a reference relating to wage fixation, a
tribunal, apart from all remuneration payable to workmen as consideration for the work done by them, can also go into all
such allowances including, dearness allowance, as the workmen are entitled to at the time of the dispute. Hence, if the
workmen are not entitled to any allowance, including dearness allowance, at the time of raising the dispute, the tribunal
cannot deal with such items if the reference is made merely with respect to wages. That is why, the second item of the

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schedule refers to ‘compensatory and other allowances’. In other words, if, at the time of raising the dispute for wages, the
workmen were not entitled to a compensatory allowance or any other allowances, including dearness allowance, the
tribunal will have no jurisdiction to award these allowances on a reference for the adjudication of wages, unless a dispute
has been separately raised and referred for adjudication, in connection with such allowances. Any bonus, contributions to
any pension or provident fund and gratuity have specifically been excluded from the definition of wages. Hence, in
adjudicating a reference in connection with wages, the tribunal cannot award these benefits to the workman. Item 5 deals
with ‘bonus, profit sharing, provident fund and gratuity’. The disputes relating to these matters, therefore, have to be
specifically raised and referred for adjudication.

General Principles

Wage fixation is an important subject in any social welfare programme.69 With the advent of the doctrine of a welfare
state, which is based on notions of a progressive social philosophy, the theory of ‘hire and fire’, as well as the theory of
‘supply and demand’, which were allowed free scope under the doctrine of laissez faire, have become obsolete and no
longer hold the field in constructing a wage-structure. In a given case, industrial adjudication has to take into account, to
some extent, considerations of right and wrong, propriety and impropriety, fairness and unfairness. ‘It is in this sense, and
no doubt, to a limited extent’ as pointed out by Gajendragadkar J, ‘that the social philosophy of the age supplies the
background for the decision of industrial disputes as to wage structure’. Under the growing strength of the trade union
movement, collective bargaining enters the field and wage structure ceases to be a purely arithmetical problem.
Considerations of the financial position of the employer and the state of the national economy, have their say, and the
requirements of a workman living in a civilised and progressive society, have also come to be recognised.70 The social and
ethical implications of arithmetic and economics of wages cannot be ignored in the present age.71 Subba Rao CJI, observed
that the social and economic uplift of labour is important for securing industrial peace, which is essential to increase the
national productivity.72 Vaidialingam J held:

The object of industrial law is to improve the service conditions of industrial labour, so as to provide for them, the ordinary
amenities of life, with a view to bring about industrial peace, which would, in turn, accelerate the productivity of the country,
resulting in its prosperity, the prosperity of the country in its turn, will help to improve the conditions of labour. The worker is
interested in his pay packet and given reasonable wages, he can be expected to be a satisfied worker.73

In all countries, wage policy is a complex and sensitive area of public policy. This is because the employer, in his pursuit
to surpass competition, through expansion facilities, increased production, greater efficiency and higher profits, may ignore
the aspirations of the workmen for higher wages, lower hours, fringe benefits and security, which may threaten their
present status and becloud future prospects. The relative status of the workers in the society, their commitment to industry
and their attitude towards the management, their morale and motivation towards productivity, their living standards and
their way of life, are all conditioned by the wages and their conditions of service, including security. In the language of the
NCL-I:

A policy dealing with this crucial problem cannot be simply economic, as it has to reckon with the relative multi-dimensional
social phenomena, in which, besides the workers and the management, the consumer and the society at large and in consequence,
the State are all vitally interested ... Equally important in this context, are the concrete social facts that must be taken into account
in the formulation of a wage structure at any given time.74

Hence, the problem of wage structure, with which industrial adjudication is concerned in a modern democratic state, in the
ultimate analysis, depends, to some extent, on the ethical and social considerations. Besides, there are numerous complex
factors, some of which are economic and some springing from social philosophy, giving rise to conflicting considerations,
that have to be borne in mind. In formulating a wage structure in a given case, industrial adjudication does take into
account, to some extent, considerations of right and wrong, propriety and impropriety, fairness and unfairness.75 Wage
structure is ‘a determinant of the shares of rival claimants of the product of industry and national dividend, but there may
often be conflict between its short run and long run objectives, as well as between profit and social interests’.76 In
Hindustan Times, Das Gupta J, observed:

The fixation of wage-structure is among the most difficult tasks that industrial adjudication has to tackle. On the one hand, not only
the demands of social justice, but also the claims of the national economy, require that attempts should be made to secure to
workmen, a fair share of the national income which they help to produce. On the other hand, care has to be taken that the attempt at
a fair distribution does not tend to dry up the source of the national income itself On the one hand, better living conditions for
workmen, that can only be possible by giving them a ‘living wage’, will tend to increase the nation’s wealth and income. On the
other hand, unreasonable inroads on the profits of the capitalists might have a tendency to drive capital away from fruitful

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employment and even to affect prejudicially, capital formation itself The rise in prices that often results from the rise of the
workmen’s wages may, in its turn, affect other members of the community and may even affect prejudicially, the living conditions
of the workmen themselves. The effect of such a rise in price on the country’s international trade, cannot also be always ignored.
Thus, numerous complex factors, some of which are economic and some spring from social philosophy, give rise to conflicting
considerations that have to be borne in mind. Nor does the process of valuation of the numerous factors remain static. While
international movements in the cause of labour have, for many years, influenced thinking and sometimes even judicial thinking in
such matters, in this country, the emergence of an independent democratic India has influenced the matter even more profoundly.77

In formulating the wage structure, the adjudicator has to reconcile the following conflicting interests, viz:

(a) the natural and just claims of the employees, for a fair and higher wage;

(b) the financial capacity of the employer;

(c) the legitimate desire of the employer to make a reasonable profit;

(d) the rise in price-structure which may result from the fixation of a wage-structure; and

(e) the reasonableness of the additional burden which may be imposed upon the consumer, by the wage-structure78.

Hence, the fixation of a wage-structure is always a delicate task, because a balance has to be struck between the demands
of social justice, which require that the workmen should receive their proper share of the national income which they help
to produce, with a view to improving their standard of living, and the depletion, which every increase in wage makes in the
profits, as this tends to divert capital from industry into other channels thought to be more profitable.79 In balancing the
conflicting interests of the employer, the employees and the public, the adjudicator has a delicate job of weighing; and it is
a three-and not a two-pan scale. His is a tedious task of reconciliating a head-on clash of various very basic policies and
interests, namely: freedom of contract, freedom of trade, sanctity of contract, individual liberty, protection of business,
right of work, making of training available to the employees, earning of livelihood for oneself and family, utilisation of
one’s skill and talent, continued productivity, betterment of one’s status, avoidance of one’s becoming a public charge,
encouragement of competition and discouragement of monopoly and international trade, etc. To quote the NCL-I:

The right of the workers for a fair standard, the claim of the industry for expansion through its own surplus, the charges on the
industry for public revenues, the need of the economy for resources and the need of the consumer to get supplies at stable and fair
prices, all become relevant factors, which an industrial adjudicator has to bear in mind.80

The claim of the employee, for fair and higher wages, is undoubtedly based on the concept of social justice, and it plays
inevitably, a major part in the construction of the wage-structure. There can be little doubt that if the employees are paid a
better wage, which would enable them to live in fair comfort and discharge their obligation to the members of their
families in a reasonable way, they would be encouraged to work wholeheartedly and their work shall appreciably increase
in efficiency.81 Not only social justice, but also claims of national economy, require that attempts should be made to secure
to workmen, a fair share of the national income, which they help to produce.82 Besides, the requirements of a workman
living in a civilised and progressive society, have also to be recognised.83 In the language of Goswami J ‘The central figure
in the adjudication, however, is the wage-earner, who should have a fair deal in the bargain in a real sense, as far as can be,
without at the same time ignoring the vital interests of the industry whose, viability and prosperity are also the mainstay of
labour.’84

In trying to recognise and give effect to the demand for a fair wage, including the payment of a dearness allowance, to
provide for an adequate neutralisation against the increasing rise in the cost of living, industrial adjudication must always
take into account the problem of the additional burden, which such wage-structure would impose upon the employer and
ask itself, whether the employer can reasonably be called upon to bear such burden.85 Not only the consideration of the
financial capacity of the employer, but the state of the national economy has also to be taken into consideration.86 Care,
therefore, has to be taken, that the attempt at a fair distribution does not tend to dry up the source of the national income
itself.87 But it has to be borne in mind that the first claim is of the workers, for a basic minimum wage, irrespective of any
other consideration. Beyond this, however, in the determination of the wage differential, the capacity of the industry to pay
and other considerations become relevant.88 How the various competing claims have to be balanced, in a given case,
should mainly be the function of an impartial adjudicator, in an industrial proceeding, unless the legislature chooses to
adopt other appropriate means and methods. However, the principles of wage-structure cannot operate in vacuum, divorced
of the realities of the situation. It is necessary to take note of so many factors from the real life a worker lives, or is
reasonably expected to live or to look forward to, with hope and fervency, in the entire social context. Principles, therefore,

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have to be evolved from the conditions and circumstances of actual life.89 The social and economic conditions prevailing in
the country at the relevant time too, have to be borne in mind. Considering the question of wages in the background of the
directive principles enshrined in our Constitution, a wage structure should serve to promote a fair remuneration to labour,
ensuring due social dignity, and strengthen incentives to efficiency, without being unmindful of the legitimate interests and
expectations of the consumer, in the matter of prices. Guided by this principle, if the financial capacity of the industry
permits, the workers should, broadly speaking, be allowed their due share in the prosperity of the industry, to which they
have contributed by their labour, so as to enable them, within reasonable limits, to improve their standard of living.90
Industrial adjudication, in this connection, has to be pragmatic, though it does not follow that it has to be unscientific and
remain simply as a matter of expediency. There are, of course, theoretical generalisations or principles that may provide
guidelines for framing a wage policy.91

Industrial adjudication has evolved certain broad principles for formulating, the wage structure in industrial undertakings.
It is now well settled, that industrial adjudication can alter or modify the contractual terms of employment, between an
employer and his employees. In an industrial dispute as to wage-structure, therefore, the immediate objective is to settle
the dispute by constructing such a wage-structure as would do justice to the interests of both labour and capital, establish
harmony between them and lead to their genuine and whole-hearted co-operation in the task of production.92 To lay down
a hard and fast rule in a case, such as the fixation of wages, would hinder the achievement of maximum justice, as such, a
rule might leave no room for compromise, or might compel a compromise where none is necessary. Hence, almost always,
neither does the tribunal fix, nor, it can in fact, fix the wage-structure so as to reach the perfection point.93

Relevant Factors for Wage Fixation

Broadly speaking an industrial adjudicator, in fixing a wage-structure, has to balance the following factors:

(a) Better living conditions for workmen can only be possible by giving them a living wage, which in turn, will tend to
increase the national wealth and income.
(b) Higher wages, nearing a ‘living wage’, would appreciably increase the efficiency of workmen, by enabling them to live in
fair comfort and discharge their obligations to the members of their families.
(c) A wage-structure nearing a ‘living wage’, would be conducive to harmony and peace in the industry.

(d) Claims of social justice and the national economy, to secure to workmen, a fair share of the national income, which they
help to produce.
(e) The requirements of a workman’s living wage in a civilised and progressive society.

For counter-balancing the above considerations, the following points have to be borne in mind, in favour of keeping the
wage-structure at a reasonable level:

(a) Unreasonable inroads into the profits of the employer may have the tendency to drive capital away from fruitful
employment and may prejudicially affect capital formation.
(b) A wage structure which is beyond the financial capacity of the employer, may lead to the closure of the industry itself.

(c) The wage-structure being a long-range plan, a long range view of the financial capacity of the industry should be taken
into consideration.

(d) In considering an increase in the wage, the increase should be correlated to minimum wage, in relation to the financial
capacity of the industry to bear the burden.
(e) The effect of an increase on other similar industries in the region, should be taken into consideration, ie, a wage-structure
should take into consideration the industry-cum-region basis, after giving careful consideration as to the ability of the
industry to pay.
(f) The total pay-packet of the workmen, including the dearness allowance, other allowances and other benefits enjoyed by
them.
(g) The effect of the rise in prices, resulting from the rise of wages, which may affect other members of the community and
even prejudicially affect the living conditions of the workmen themselves.
(h) The effect of the rise in prices on the international trade of the country.

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The problem of wage-structure fixation has also to be tackled on the basis that such wage-structure should not be changed
from time to time. It is a long range plan; and so, in dealing with this problem, the financial capacity of the employer must
be carefully examined.1 In determining the question as to whether workmen are entitled to an increase in the rate of wages,
the dearness allowance and other benefits enjoyed by them, have also to be taken into consideration.2 Further, the tribunal
has to consider the minimum wage and the capacity of the management to bear the burden of the increased wages, and then
to correlate the increment in the minimum wage, in relation to the capacity of the industry.3 Hence, in achieving the
immediate objective, industrial adjudication has to take into account several principles of wage structure and decide every
dispute so as to do justice to both the sides.4 For these reasons, the Supreme Court has repeatedly stressed the need for
considering the problem on an industry-cum-region basis, giving careful consideration to the ability of the industry to pay.5
In this connection, the following observations of NCL-I are apposite:

The determination of wages implies evolving and sustaining a wage structure which (i) permits a fair remuneration to labour, (ii)
permits a fair return to capital, and (iii) strengthens incentives to efficiency. Apart from these intra-industry wage-differentials, the
inter-industry and inter-regional wage differentials have a relevance. The latter may be due to the limitations of the market or on
account of inter-regional disparities in productivity, due to differences in technology, capital per worker or organisation. It is
expected that with the industries competing for skill in the country as a whole, these will be soon eliminated. Inter-industry
differentials likewise, are also unjustified except on grounds of local differences in technology and capital per worker.6

No distinction can be made in fixing the wage-structure, dearness allowance or gratuity, etc, between the workmen
employed by public sector undertakings and those employed in private sector undertakings. In Hindustan Antibiotics, after
a careful consideration of the constitutional, legislative, judicial and executive trends of opinion with regard to the
question, the Supreme Court held that the principles evolved by industrial adjudication in regard to private sector
undertakings, will also govern public sector undertakings, having a distinct corporate existence.7 The International
Encyclopaedia states thus:

Wage structure is a generic term for the set of inter-relations among a collection of wage-rates. It is frequently used in contrast to
the concept of wage-level, which refers to an average of collection. Correlative with the concept of wage-structure, is that of wage-
differential-some measure of difference between elements of a wage-structure. In short, a wage, structure is the relation among two
or more wages related to one another in some systematic way.8

Industrial adjudication has laid down two principal factors, which weigh while fixing or revising a wage structure, viz, (i)
what wage scales the establishment in question can pay, without any undue strain on its financial resources, and (ii) how
the wages prevailing in the establishment in question, compare with those given to workmen of a similar grade and scale,
by similar establishments in the same industry, or, in their absence, in other similar establishments in other industries in the
region.9 Thus, the former factor is the financial capacity of the employer and the latter has come to be known as the
principle of region-cum-industry. In the absence of the requisite material for the construction of a wage structure, before
the Tribunal, its award in that respect would not be sustainable.10

Financial Capacity

Though, in fixing the minimum wage, the question of the financial capacity of the employer is irrelevant, the case of fair
wage stands on a different footing. In a case where the employer is already paying the minimum wage and the claim is for
a fair wage, the question of the financial capacity of the employer is not only relevant, but is pertinent, because fixing the
upper limit of the fair wage would depend upon the capacity of the employer to pay. The burden, therefore, above the
minimum wage, can only be justifiably imposed if the industry is capable of meeting that extra burden.11 Hence, the
capacity of the employer to bear the financial burden must receive due consideration. The past performance of the
company and the future prospects, with a totality of the picture, must be present in the mind of the adjudicator, while
deciding the dispute.12 In the fixation of rate of wages, which includes within its compass, the fixation of the scales of
wages also, the capacity of the industry to pay, is one of the essential circumstances to be taken into consideration.13 The
question of the fixation of a wage-structure, like every major consideration, is to be considered on the basis that the
conflicting claims of capital and labour must be harmonised on a reasonable basis, and if it appears that the employer
cannot really bear the burden of the increase in the wage-bill, industrial adjudication should not hesitate to give him relief,
if it is satisfied that if such relief is not given, then he may have to close down his business.14 The capacity of the industry
to pay means one of the following things, viz:

(a) the financial capacity of all the industries in the country, to pay;

(b) the financial capacity of a particular industry as a whole, to pay;

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(c) the financial capacity of an employer to pay; or

(d) financial capacity of a particular unit of establishment (marginal, representative or average) to pay.

(a) Financial Capacity of all the Industries in the Country to Pay:

Here, the word ‘industry’ is used in the most comprehensive sense, which may perhaps be an industry as defined in s 2 (j)
of the Act. This concept of industry becomes relevant in the national context, when it is to be decided that below a
particular level, any employer in the whole country, in any industry, will not employ any workman. But, in this country, so
far, the stage when any such wage has been fixed on this basis, has been not reached.

(b) Financial Capacity of Particular Industry as a Whole, to Pay:

This, refers to particular types of industries in the whole country, such as, the jute industry, cotton and textile industry, coal
industry, paper industry, sugar industry and engineering industry, etc. It would obviously not be possible for industrial
adjudication to measure the capacity of each of the units of an industry, and the only practicable method is to take a fair
cross-section of that industry.15 In Express Newspapers, Bhagwati J held:

... the capacity of an industry to pay should be gauged on an industry-cum-region basis, after taking a fair cross-section of that
industry. In a given case, it may be even permissible to divide the industry into appropriate classes and then deal with the capacity
of the industry to pay classwise...no doubt, against the ultimate background that the burden of an increased rate should not be such
as to drive the employer out of business.

The learned judge further observed:

Industrial adjudication is familiar with the method which is usually adopted to determine the capacity of the employer to pay the
burden sought to be imposed on him. If the industry is divided into different classes, it may not be necessary to consider the
capacity of each individual unit, to pay, but it would certainly be necessary to consider the capacity of the respective classes to bear
the burden imposed on them. A cross-section of these respective classes may have to be taken for a careful examination and all
relevant factors may have to be borne in mind in deciding what burden the class, considered as a whole, can bear. If possible, an
attempt can also be made, and is often made, to project the burden of the wage-structure into two or three succeeding years and
determine how it affects the financial position of the employer. 16

In Bajrang Jute Mills, Vaidialingam J held that the uniform wage scales fixed by a wage board, for all the jute mills in the
various regions in the country (20 in West Bengal and 9 in other parts of the country) without taking note of the financial
position of the individual units and in disregard of the region-cum-industry formula, were improper. The learned judge
held:

...the requirement of considering the capacity of each individual unit to pay, may not become necessary if the industry is divided
into different classes. Even if the industry is divided into different classes, it will still be necessary to consider the capacity of the
respective classes, to bear the burden imposed on them. For this purpose, a cross-section of these respective classes may have to be
taken, for a careful consideration, for deciding what burden the class considered as a whole, can bear.17

In Kirlampudi Sugars, Jaganmohan Reddy J observed:

The classification into classes, it will be seen, is not an obligatory one, but is required only in cases where otherwise, a fair wage
cannot be determined. Any injunction that the industry in a region should in all cases be divided into classes, while determining a
fair wage for that industry, would, on the other hand, be likely to introduce a greater disparity. ... There is nothing in the Bajrang
Jute Mills’ case, which makes it obligatory on a wage board, to divide an industry into regions as well as classes, or to examine the
financial capacity of every unit in that industry in the region, irrespective of the conditions prevailing in the different regions of
that industry. As long as all relevant factors appertaining to that industry, industry wise and region wise, have been considered and
the capacity of a fair cross-section of that industry to pay, in that region, has been ascertained, the recommendations of the wage
board cannot be held to be invalid. It is not in every case, that a division into classes in the same region, on a unit wise capacity,
should be made before recommendations of the wage structure, dearness allowance or other conditions of service in that industry
could be held to be fair and within the financial capacity of the industry in that region.18

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(c) Financial Capacity of an Employer to Pay:

The particular employer may be having a number of establishments, being managed and controlled by him. If in the
circumstances and facts of a particular case, the entire business of an employer is a composite whole, then the financial
capacity of the employer with respect to all his establishments, is to be taken into consideration. Large-scale industries are
managed very rarely by individual employers. Generally, joint stock companies are floated for running and managing such
industries. Such companies, occasionally, set up a number of establishments, in one or more states in the country. If the
various establishments have a functional integrity, ie, they are functionally interdependent on one another, the financial
capacity of the whole company has to be taken into consideration.

(d) Financial Capacity of a Particular Unit or Establishment to Pay:

An employer may have a number of units or establishments or only one unit or establishment. In the latter case,
occasionally, the words ‘employer’ and ‘establishment’ have been used interchangeably, in industrial adjudication. If each
unit or establishment of an employer is separate from the others with no functional integrity with the others, the financial
capacity of that particular unit or establishment alone is relevant for the purposes of wage fixation. The financial capacity
of the employer with respect to other units, is irrelevant. In Gujarat Electricity Board, the Supreme Court held that the
financial capacity of the board should be judged not only on the basis of its commercial undertakings, but also on the basis
of its other activities, which were in the nature of national duties. The running of power house was only one branch of
those activities. Hence, the demand for additional wages could not be granted when the board did not have the capacity to
pay and was incurring heavy losses.19 While fixing a wage-structure on the basis of a fair wage, a long range view of the
financial position of the employer’s undertaking is to be taken.20 In Ahmedabad Millowners Assn, Gajendragadkar CJI
observed:

...industrial adjudication must always take into account, the problem of the additional burden which such wage structure would
impose upon the employer and ask itself whether the employer can reasonably be called upon to bear such burden...It is a long
range plan; and so, in dealing with this problem, the financial position of the employer must be carefully examined.21

A close scrutiny of the concern’s working has to be made. The profit and loss account, the prospects of the concern
improving itself in future and all other relevant matters will have to be taken into account. The expenses properly incurred
for working of the industry, such as buying of the raw material, expenses incurred in running the factory office, transport
expenses, expenses incurred in marketing, and other such allowable expenses, have to be deducted. The determination of
gross profits varies according to the basis of accounting adopted. But the deduction of income-tax, reserves and
depreciation are not permissible for the purposes of determining the financial capacity of the concern. However, the
amount of bonus paid or is payable, will have to be deducted for the purpose of calculating the financial capacity.22 Having
ascertained the financial position of the undertaking, the adjudicator has to assess the additional burden imposed on the
employer, by the wage-structure, for seeing whether he would be able to meet it for a reasonably long period in the
future.23 Not only the present financial ability, but also the financial stability in the future, of the employer, must be
proved, to justify the burden of the wage-structure or fixation of an increased fair wage, on an incremental scale. It would
not be right to compel an employer to bear the burden of an increased fair wage on an incremental scale, out of the capital,
for such a situation is likely to lead to a closure of his business, which would be even more detrimental to the workmen
themselves.24

A broad and overall view of the financial position of the employer, has to be taken into account. It would not be
permissible to lay undue emphasis on a temporary prosperity or temporary adversity of the employer.25 In other words, an
even view of unusual profits made by an undertaking for a particular year, as a result of some adventitious circumstances,
or unusual losses incurred by it for similar reasons, has to be taken by the adjudicator. Such considerations should play a
major role.26 Similarly hypothetical considerations, that in the near future, the financial position of the employer would be
affected by certain contingencies, should not be taken into account.27 Likewise, in determining the financial stability of the
concern or its ability to bear the burden of the wage-structure, the pious hopes expressed in the directors’ reports, as
regards the future prospects, cannot be accepted as conclusive.28 Sometimes, statements of this nature, in the annual reports
of the directors, are made to strike a note of hope, to dispel doubts and misgivings in the minds of the shareholders and
these cannot be a substitute for the actual audited figures of accounts. The adjudicator, therefore, is to ascertain the
financial position of the concern from its audited accounts, in accordance with the principles of accountancy.29 Broadly,
the adjudicator has to bear in mind, the profit earning capacity of the concern, the profits earned in the past, its reserves and
the possibility of replenishing the reserves, the claim of capital, risks involved-in short, the financial stability of the
concern.30

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In judging the financial capacity of the employer, industrial adjudication has to look at the burden as well. It is not proper
that the employer should pay increased wages to one class of workers and utilise whatever balance remains, for payment to
the other class of workers, irrespective of whether they can be paid increased wages or not. This is not what is envisaged
by the term ‘capacity to pay’. No doubt, the wage increase will have to be met from the revenue, and only thereafter, the
profits can be computed. Once, it is found that the burden of the proposed increase of wages is heavy, it cannot be assumed
that the burden can be borne by the establishment. As Kailasam J put it:

It is of utmost importance that the industry must be kept going as long as it can pay the minimum wages. It may, sometimes, be
necessary for the workers to make some sacrifice to keep the industry going. It is not wise to kill the goose that lays the golden
egg. The capacity of the industry to bear the burden will have to be taken into account, in determining whether a provision can be
made for fixing a wage structure...In determining the capacity of the industry to bear the burden, all relevant facts will have to be
taken into account and the actual state of affairs determined... 31

In such cases, assumptions are not enough. The adjudicator is required to ascertain the financial capacity and fix a wage
structure according to that capacity.32 The proper measure for gauging the capacity of an industry to pay, is to take into
account the elasticity of the demand for the product, the possibility of tightening up the organisation, so that the industry
could pay higher wages without difficulty, and the possibility of an increase in the efficiency of the lowest paid workers,
resulting in an increase in the production, considered in conjunction with the elasticity of the demand for the product, no
doubt against the ultimate background that the burden of the increased rate, should not be such as to drive the employer out
of business.33 The following are some of the important considerations which are to be carefully weighed in determining the
financial capacity of an industry:

(i) the progress of the industry in question;

(ii) the prospect of the industry in future;

(iii) the existence and extent of the profits of the industry;

(iv) the nature of demand which the industry is expected to secure;

(v) the extent of the burden and its gradual increase, which the industry may have to face.

These considerations are merely illustrative, and not exhaustive. In Unichem Laboratories, the tribunal proceeded, on the
basis of the gross profits, without any deductions for taxation, depreciation and development rebate, as against the claim of
the company to have the calculations made on the basis of net profits. In appeal before the Supreme Court, this method
was challenged on behalf of the employer company. The court held that if the Drugs Price (Control) Order materially
affects the prosperity of the business of the company, it would be open to it to raise a dispute for the reduction in the wage
structure by showing that the financial position had been weakened to such an extent, that it cannot bear the burden of the
wage structure fixed by the award and the matter may have to be examined on its merits.34 In Shri Chalthan VKUSM
(supra), the court observed that the decisions in Unichem, etc, were given on their own particular facts and are not to be
understood as laying down that under no circumstances, the deduction for depreciation, reserves etc, could be made.
Kailasam J observed:

It may be that for the prudent management of an industry, it would be desirable to take into account, to some extent, the
depreciation of the machinery, for otherwise, after a lapse of years, the machinery may get worn out and without a provision for its
replacement, the industry itself would come to a stop. Whether provision for such depreciation should be made and if so, to what
extent, will depend upon the facts of the case. Depreciation allowance to the extent of making out a loss, need not be accepted, but
a reasonable provision should be made...It cannot be taken as a hard and fast rule, that a provision for depreciation, provision for
development rebate and tax liabilities, should never be allowed. While the preservation of the industry is paramount, the attempts
of the management to show that the company is running at a loss, by boosting the depreciation allowances, etc, should not be
permitted. In short, the real capacity of the industry to bear the extra burden will have to be determined. An employer claiming a
depreciation allowance, is only entitled to the actual or probable depreciation of the machinery, tools, etc, for the period, due to
wear and tear. The depreciation cannot be computed on any natural basis or on the profit and loss account furnished by the
company.35

In Shivraj Fine Arts, speaking for the court, the same judge suggested further factors which would determine the capacity
of the industry to pay, viz, the productivity of the labour, the prevailing rates of wages in the same and similar industries, in

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the same neighbouring localities, the present economic position of the industry, its prospects in the near future, etc. Fair
wage will grow with the growth and development of the national economy and the progress made by the industry, must
approximate to the capacity of the industry to pay.36 As stated by the NCL-I, a policy dealing with the chronic problem,
cannot be simply economic, as it is to reckon with relative multidimensional social phenomena, in which the workers and
the management, the consumer and the society at large and in consequence, the state, are of vital interest. The claims of the
employees for a fair and higher wage, depends not only on the financial capacity of the employer, but also on the interests
of the consumer and the state, the employer’s desire for a reasonable profit, the rise in the prices which may affect the
consumer and the national economy, which, in turn, may have an adverse effect on the labour itself.

Industry-Cum-Region Formula

The Committee on Fair Wages, in its report, recommended that in determining the capacity of an industry to pay, it would
be wrong to take the capacity of a particular unit or the capacity of all industries in the country. The relevant criterion
should be the capacity of a particular industry in a specified region and, as far as possible, the same wages should be
prescribed for all units of that industry in that region. It will ‘obviously’ not be possible for the wage-fixing board to
measure the capacity of each of the units of an industry in a region and the only practicable method is to take a fair cross-
section of that industry.37 This classic recommendation has been adopted by industrial adjudication as a guiding principle,
which has come to be known as the ‘industry-cum-region basis’ for fixing wage structures in industrial establishments. The
legal position now, is well-settled, that the wage structure has to be fixed on an industry-cum-region basis, having due
regard to the financial capacity of the unit under consideration.38 The aim of this principle is that the scales of wages or
dearness allowance fixed for a particular unit or industry, should not be out of tune with the wages etc, prevalent in the
industry or the region, so that unfair competition may not result between one establishment and another and the diversity in
the wages in the region may not lead to industrial’ unrest.39 The main object, obviously, is that in similarly circumstances
units and in similar activities, as far as possible, the wages should not differ widely. If that were to be so, then there would
be migration of labour from one industry to the other and there would also be a possibility of industrial unrest amongst the
employees engaged in the same kind of business or industry.40 In Remington Rand, Shelat J observed:

The foundation of the principle of industry-cum-region is that, as far as possible, there should be uniformity of conditions of
service in comparable concerns in the industry in a region, so that there is no imbalance in the conditions of service between
workmen in one establishment and those in the rest. The danger otherwise, would be migration of labour to the one where there are
more favourable conditions, from those where conditions are less favourable. Therefore, the mere fact that a particular concern can
bear an additional liability would, by itself, be no ground to impose upon it, such extra obligation 41

Rejecting the contention of the workmen, that the principle of industry-cum-region should not be applied in adjudicating a
dispute regarding tiffin allowance, as it is applied in the adjudication of wage-scales and dearness allowance, the court
observed that such a proposition would mean ‘cutting holes in a principle which industrial adjudication has, for a number
of years, accepted and which has lent a certain amount of uniformity in a field where the problems have to be resolved in a
pragmatic approach’. This rule, on the one hand, tends to the maintenance of industrial peace in the entire region, and on
the other, it puts the different concerns of the industry on a more or less equal footing, in their productive struggle.42
Wanchoo J observed:

It is now well-settled that the principle of industry-cum-region has to be applied by an industrial court, when it proceeds to
consider questions like wage-structure, dearness allowance, and similar conditions of service. In applying that principle, industrial
courts have to compare wage-scales prevailing in similar concerns in the region with which it is dealing, and generally speaking,
similar concerns would be those in the same line of business as the concern with respect to which the dispute is under
consideration.43

The capacity of an industry to pay should be gauged on an industry-cum-region basis, after taking a fair and representative
cross-section of that industry and dividing them into appropriate classes and then dealing with the capacity of the industry
to pay, classwise.44 In Jessop & Co, Wanchoo J pointed out that one of the reasons behind the principle of region-cum-
industry is that concerns of more or less the same standing, in the same industry, should have as nearly as possible, the
same wages, so that they might stand on par with one another in the matter of competition. Otherwise, if disparate rates of
wages are fixed in a particular concern, which are much higher than the prevailing rates of wages in concerns of similar
standing in the same industry, it will be put to a disadvantage when it comes to compete in the market for the sale of its
product. It is for this reason that when scales of pay are being fixed, the tribunals look at what are called comparable
concerns, in framing the wage-structure.45 In Greaves Cotton, the court emphasised that in fixing wages and dearness
allowance, the tribunal should take into account, the wage scales and dearness allowance prevailing in comparable
concerns carrying on in the same industry, in the same region.46 In Kamani Metals, Hidayatullah J observed:

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In attempting to compare one unit with another, care must be taken that units differently placed or circumstanced, are not
considered as guides, without making an adequate allowance for the differences. The same is true when the regional levels of
wages are considered, and compared. In general words, comparable units may be compared but not units which are dissimilar.
While disparity in wages in industrial concerns similarly placed, leads to discontent, attempting to level up wages, without making
sufficient allowances for differences, leads to hardships.47

In French Motor Car, the Supreme Court held that the principle of industry-cum-region has to be applied by an industrial
tribunal, when it proceeds to consider questions like wage-structure, dearness allowance and similar conditions of
service.48 In Remington Rand, a further requirement of taking into account the total wage-packet, of basic wage and
dearness allowance, in comparing the wage structure of an establishment with others in the region, was added.49 In other
words, it would not be safe to compare a comparatively small concern with a large concern in the same line of business
and impose a wage structure prevailing in the larger concern as a rule of thumb, without considering the standing, the
extent of labour, the extent of business and the extent of profits made by the two concerns, over a number of years.50 Thus,
where there is a large disparity between two concerns in the same business, in the same region, it would not be safe to fix
the same wage-structure for the large flourishing concerns of long standing, as obtaining in a small struggling concern,
without any other consideration.51 In French Motor Car, Wanchoo J further observed that the tribunal has to compare
wages scales prevalent in similar concerns in the region which are in the same line of business. Further, even in the same
line of business, it would not be proper to compare a small struggling concern with a large flourishing concern. The
question, whether there is a large disparity between the two concerns, is always a question of fact and it is not necessary
for the purpose of comparison, that the two concerns must be exactly equal in all respects. All that the tribunal is to see is
that the disparity is not so much as to make the comparison unreal. The learned judge held:

...where a particular concern is already paying the highest wages in its own line of business, the industrial courts would be justified
in looking at wages paid in that region in other lines of business, it should take care to see that the concerns from other lines of
business taken into account, are such as are as nearly similar as possible, to the line of business carried on by the concern before it.
It should also take care to see that such concerns are not so disproportionately large as to afford no proper basis for comparison. 52

In Novex Dry Cleaners (supra), Gajendragadkar J laid down a few tests for comparing an establishment with others in the
same region, which comprise their standing, the extent of the labour force employed by them, the extent of their respective
customers; and a comparative study of the profits and the losses incurred by them for some years before the date of award.
Then, in Williamson, the same learned judge held that in considering the question about comparable concerns, tribunals
should bear in mind all the relevant facts in relation to the problems, viz the extent of the business carried on by the
concerns, the capital invested by them, the profits made by them, the nature of the business carried on by them, their
standing, the strength of their labour force, the presence or absence and the extent of reserves, the dividends declared by
them, and the prospect about the future of their business - these and all other relevant facts have to be borne in mind.53
These principles were reiterated in other cases, which can be re-stated as follows:

(i) Their standing;

(ii) the strength of the labour force employed by them;

(iii) the extent of their respective customers;

(iv) the position of the profits or losses incurred by them for some years, before the date of the award;

(v) the extent of the business carried on by the concerns;

(vi) the capital invested by them;

(vii)the nature of the business carried on by them;

(viii) the presence and absence and the extent of their reserves;

(ix) the dividends declared by them; and

(x) the prospects of their business in the future.

In Kamani Metals, Hidayatullah J observed:

The observations, no doubt, lay down the principle guidelines, but they are not intended to operate with the rigidity of a statutory

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enactment. The court has indicated what lines of inquiry are likely to lead to the discovery of correct data for the fixation of fair
wages...but fruitless inquiries into matters of no particular importance to a case, are hardly to be insisted upon, because rather than
prove to be of assistance, they might well frustrate the very object in view. Each case requires to be considered on its own facts.54

In Hindustan Antibiotics, it was canvassed that a public sector undertaking could not be compared with companies in the
private sector, for the purpose affixation of wages. The Supreme Court repelled the contention of management and held
that the principles as have been laid down for employers in the private sector apply with equal force to the employers in the
public sector as well.55 In Unichem (supra), it was contended on behalf of the management that no unit doing business in
collaboration with a foreign concern, though doing the same kind of business, could ever be considered for the purpose of
comparison, for such concerns have the distinct advantages of international research facilities and reputation in business,
which enable them to market their products more easily and thus, enable them to pay higher wages to their employees.
Repelling the contention, the court observed that:

So long and to the extent that concerns having foreign collaboration are doing business in India and in a particular concerned
region, we do not see any reason why they should not be taken into account for purposes of being treated as comparable units,
provided the tests for such purposes, as laid down by this court, are satisfied. No doubt, some of those concerns may be having
advantage in various matters. But merely, because they possess such advantage in the field of business, is not a circumstance for
eliminating such concerns for purposes of comparability. The object of industrial adjudication is, as far as possible, to secure
uniformity of service conditions amongst the industrial units in the same region. If a concern having a foreign collaboration,
properly satisfies the tests of comparability, it would be improper to regard such a unit as uncomparable, merely on the ground that
it is a concern with a foreign collaboration or interest and that the unit with which it is sought to be compared is entirely of Indian
origin and resources.56

In Chandan Metal Products the Gujarat High Court upheld the validity of the recommendations of the wage board for
engineering industries. The wage board, in the context of engineering industries, after referring to the various products that
the industry was engaged in manufacturing, definitely undertook a relevant exercise of classifying the industry and the
classification according to the strength of the unit, provided a rational and intelligible criterion for classification. A
regional and size classification, ultimately enabled the wage board to determine the paying capacity region-wise and class-
wise. From the extensive examination carried out by the board in formulating its recommendations, it clearly appeared that
it took into consideration, all the relevant factors and the established principles of region-cum-industry, evolved by the
Supreme Court. In view of the fact that the wage board had correctly examined the paying capacity of the units region-wise
or size-wise, no exception could be taken of its findings and it was not open to an independent unit to complain that it had
no capacity to implement the recommendations of the wage board. There was no error in the award of the tribunal, refusing
to examine the capacity of the industry to meet the likely additional burden, which could be imposed upon a particular unit
which was called upon to implement the recommendations of the wage board.57

In dealing with the comparable character of industrial undertakings, industrial adjudication should not usually rely on oral
evidence alone, because these questions cannot be decided merely on the interested testimony, either of the workmen or of
the employer and his witnesses. The question has to be considered in the light of material facts and circumstances, which
are generally proved by documentary evidence.58 In Madura Coats, where the tribunal rejected the demand for an upward
revision of wages and allowances, on the ground that the financial position of the company was not sound, Rebello J of the
Bombay High Court, while partially allowing the award, held that the tribunal should have considered the wages prevailing
in comparable concerns in the region, before deciding to reject the demands on the ground that the financial position of the
company was not sound.59 This observation is absolutely misplaced in the facts and circumstances of the case. It was not
the case of the union that the wages being paid in the company were below subsistence level. It is a well-settled law that
the lower limit of a fair wage is set by the minimum wage and its upper limit, by the capacity of the industry to pay, which,
in turn, depends not only on the present economic position of the industry, but also on its future prospects. Between these
two limits, the actual wages will depend on a consideration of the following factors:

(a) the productivity of labour;

(b) the prevailing rates of wages in the same or similar occupations, in the same or neighbouring localities;

(c) the level of national income and its distribution; and

(d) the place of the industry in the economy of the country.60

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Applying the said principles, governing the determination of a ‘fair wage’, as laid down by Gajendragadkar CJI in
Millowners’Association,61 what ostensible purpose could be served by a mere consideration of the comparable wage
structure, when the employer does not have the financial capacity to pay? It is not as if the industrial tribunal is a branch
office of the bureau of statistics, to engage itself in the futile exercise of collecting and comparing data relating to wages
and allowances, if such data is incapable of being applied to the case at hand. The mere fact that other concerns in the same
or similar line of business in the region, are paying higher wages, is no valid ground to impose additional burden on a
company, which is on a downhill course. The ratio of New Egerton Woollen Mills,62 on which Rebello J apparently relied,
could be pressed into service, if only the other condition laid down by Shelat J is satisfied, ie, such additional burden does
not cause an undue strain on the financial resources of the company, and not otherwise. When this principle, is applied to
the case of Madura Coats, the conclusion that the company was not in a position to bear any additional financial burden, is
inescapable. Even so, the trial court granted certain demands like privilege leave, encashment, leave travel, educational
allowance, conveyance allowance, food subsidy and gratuity, while disallowing other demands which were accepted by the
management, despite the precarious financial position of the company. At any rate, it was a finding of fact recorded by the
tribunal, after applying its mind to the oral and documentary evidence produced before it, and the High Court could not, in
a writ jurisdiction, go into the questions of fact, or reappreciate the evidence and reach a different conclusion. The
reasoning and conclusion of Rebello J run counter to the principles governing wage revision vis-à-vis the financial
condition of industrial undertakings, and is wholly misconceived and perverse.

In Hindustan Motors, the Supreme Court observed that it is ordinarily desirable, to have as much uniformity as possible, in
the wage scales of different concerns of the same industry, working in the same region. It may, however, not always be
possible to attain this object because of the different financial capacities of different concerns. Bur where no such obstacle
is present, industrial adjudication always tries to secure the same wage-rates for the different concerns in the same
industry, in the same region. The court, therefore, applied the wage scales awarded by the third major engineering tribunal
in Bengal.63 In French Motor Car, (supra), the court held that so far as the clerical staff and the subordinate staff are
concerned, it might be possible to take into account even those concerns, which are engaged in different lines of business,
for the work of the clerical and subordinate staff is more or less the same in all kinds of concerns. When the inconsistency
in the above two decisions was highlighted, in Greaves Cotton, Wanchoo J responded thus:

...in applying the industry-cum-region formula for fixing wage scales, the tribunal should lay stress on the industry part of the
formula, if there are a large number of concerns in the same region, carrying on the same industry; in such a case, in order that
production cost may not be unequal and there may be equal competition, wages should generally be fixed on the basis of the
comparable industries, namely, industries of the same kind. But where the number of industries of the same kind in a particular
region is small, it is the region part of the industry-cum-region formula which assumes importance, particularly in the case of the
clerical and sub-ordinate staff, for as pointed out in the French Motor Car Co’s case... there is not much difference in the work of
this class of employees, in different industries.64

According to the decision in French Motor Car, where greater stress is laid on the region part of the formula, care has to
be taken to see that the comparison is made with concerns as nearly similar as possible to the concern in question. But in
Greaves Cotton, two reasons appear to have weighed with the Supreme Court:

(a) the four companies were carrying on different businesses and the main company was an investment and financing
company and it was not clear from the record, whether there were several comparable concerns in the same region; and
(b) in the documents filed by both the parties, there were certain concerns which were, according to both the parties,
comparable concerns. It is on these facts that the court held that the tribunal was not wrong in the case of the clerical.
and subordinate staff, in leaning towards the region part of the formula and comparing the companies under
consideration, with those concerns which were comparable according to both the parties.65

In Orient Paper, the tribunal found that there were no other concerns in the same line of business as the appellant
company, in the region, which could be compared with it. There were only two other paper mills in the region. But the
appellant company was an old, established business, manufacturing paper on a very large scale, whereas both the other two
paper mills were of a recent origin, as compared to the appellant company. The strength of the labour force and the annual
production of the other two paper mills was also much lower and their profits much smaller than those of the appellant
company. In these circumstances, the tribunal took the view that it would not be proper to compare the wage-structure of
these paper mills, with that of the appellant company and compared the wages paid by other industries in the region,
namely, three collieries, a cement factory and an aluminium company, which were situated not very far away from the
place where the company had its factory, for fixing the minimum wages for the workmen of the appellant company. In
appeal, the Supreme Court held that the comparison was justified.66 In Tata Chemicals, the production of the company was

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considerably higher than the combined production of two other two units in the Saurashtra region. There was no other
heavy chemicals concern in the region, which could be favourably compared with the company, insofar as the nature and
extent of business, capital outlay, percentage of gross and net profits, strength of labour, reserves, dividends on equity
share and prospects of future business were concerned. The company held a unique position in heavy chemicals, in the
region. In view of these facts, the company was compared with the industries outside the Saurashtra region of the State of
Gujarat, for the purposes of linking the dearness allowance to the textile dearness allowance, paid to the industrial workers
at Ahmedabad, which was based on the report of the family living survey among the industrial workers at Ahmedabad in
1958-59, compiled as a result of the joint investigation carried on in a rational and scientific manner, by several
institutions. Jaswant Singh J held:

It cannot also be lost sight of, that with the march of time, the narrow concept of industry-cum-region is fast changing and too
much importance cannot be attached to region. The modern trends in industrial law seem to lay greater accent on the similarity of
industry rather than on the region. It was observed by this court in Workmen of New Egerton Woollen Mills v New Egerton
Woollen Mills ,67 that where there are no comparable concerns in the same industry, in the region, the tribunal can look to concerns
in other industries in the region for comparison, but in that case, such concerns should be as similar as possible and not
disproportionately large or absolutely dissimilar. On the parity of reasoning, it is reasonable to conclude that where there are no
comparable concerns, engaged in a similar industry, in the region, it is permissible for the industrial tribunal or court to look to
such similar industry or industries, as nearly similar as possible, in adjoining or other regions in the state, having similar economic
conditions.68

In Food Corpn of India, the Supreme Court allowed parity in the matter of scales of pay, allowances and terms and
conditions of service for the departmental labour employed by the corporation, throughout the country.69 In Hindustan
Transmission, the workmen and staff working in the head office, claimed that they should be given wage scales, dearness
allowance and other benefits, at par with the workmen and staff working in the factory. But the tribunal refused to award
accordingly, in view of the fact that the hours and conditions of work in the head office and the factory were quite
different. However, for considering the question of wages, etc, the tribunal considered three comparable concerns, out of
which it selected one which was comparable to the concern in this case. The Bombay High Court upheld the award of the
tribunal, as it did not find any reason for interference with the same, in its writ jurisdiction.70

Equal Pay for Equal Work

The doctrine of ‘equal pay for equal work’ has been enshrined in Art. 39(d) in Pt IV of the Constitution, which is one of
the directive principles of the state policy, requiring the state to secure ‘equal pay for equal work, for both men and
women’. The directive principles, though not enforceable in any court, are nevertheless fundamental in the governance of
the country and it is the duty of the state to apply these principles in making the laws. In the language of Chinnappa Reddy
J, ‘equal pay for equal work’ is not a mere demagogic slogan. It is a constitutional goal capable of attainment through
constitutional remedies, by the enforcement of constitutional rights’.71 In G Sreenivasa Rao, Kuldip Singh J stated:

The doctrine of ‘equal pay for equal work’ cannot be put in a straight-jacket. Although the doctrine finds its place in the directive
principles, but this court, in various judgments, has authoritatively pronounced that the right to ‘equal pay for equal work’ is an
accompaniment of the equality clause enshrined in Articles 14 and 16 of the Constitution of India. Nevertheless, the abstract
doctrine of ‘equal pay for equal work’ cannot be read in Article 14. A reasonable classification, based on intelligible criteria,
having nexus with the object sought to be achieved, is permissible.72

However, in subsequent cases, the court has gone even to the extent of saying that the principle of ‘equal pay for equal
work’ has assumed the status of a fundamental right in service jurisprudence, having regard to the constitutional mandate
of equality in Arts. 14 and 16 of the Constitution. It has ceased to be a judge-made law, as it is a part of the constitutional
philosophy which ensures a welfare socialistic pattern of a state, providing equal opportunity to all and ‘equal pay for
equal work’ for similarly placed employees of the state. The principle not only applies to the state as such, but it also
applies to state instrumentalities. This right has been zealously enforced as a fundamental right in effectuating the
constitutional goal of equality and social justice, by the Supreme Court.73 This principle should also apply to industrial
employees, with equal vigour. In the year 1976, the Parliament enacted the Equal Remuneration Act 1976 (Act No 25 of
1976):

To provide for the payment of equal remuneration to men and women workers and for the prevention of discrimination on the
ground of sex, against women, in the matter of employment and for matters connected therewith or incidental thereto.

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This Act enacts the provision of the Equal Remuneration Ordinance 1975, promulgated to implement the provisions of Art.
39(d) of the Constitution, in the year which was being celebrated as the International Women’s Year. Dealing with the
provisions of this Act, in Mackinnon Mackenzie, the Supreme Court held that the Act does not permit the management to
pay to a section of its employees, doing the same work or work of a similar nature, lesser pay, contrary to s 4(1) of the Act,
only because it is not able to pay equal remuneration, to all and further observed that the applicability of the Act does not
depend upon the financial ability of the management to pay equal remuneration, as provided by it.74 In this case, the lady
stenographers were paid less remuneration than the male stenographers. Section 4 of the Act requires that in order to get
relief, the employee should establish that the remuneration paid by the employer is at rates less favourable than those at
which remuneration is paid to the employees of the opposite sex, for performing the same work or work of a similar
nature. In deciding whether the work is the same or is broadly the same, the authority should take a broad view and also
adopt a broad approach in ascertaining whether any differences are of practical importance, because the very concept of
‘similar work’ implies a difference in detail. But that should not defeat a claim of equality on trivial grounds. Actual duties
performed should be looked at and not those that are theoretically possible. For the purpose of making a comparison, the
duties generally performed by men and women should be looked at. In view of the fact that the lady stenographers were
getting less remuneration, the court granted the relief under s 4(1) of the Act.

In Randhir Singh, the Supreme Court stated that though the principle of ‘equal pay for equal work’ is not expressly
declared to be a fundamental right, it is a constitutional goal. The requirements of Art. 39(d) of the Constitution, viz, ‘equal
pay for equal work, for both men and women’ means ‘equal pay for equal work’ for everyone and as between the sexes.
Hence, the concept of ‘equal pay for equal work’ is accentuated and has assumed the status of a fundamental right in
service jurisprudence. Directive principles, therefore, have to be read into the fundamental rights as a matter of
interpretation. Article 14 of the Constitution enjoins on the state, not to deny any person ‘equality before the law’ and the
‘equal protection of the laws’ and Art. 16 declares that there shall be equality of opportunity for all citizens, in matters
relating to employment or appointment to any office under the state. Hence, on the construction of Arts. 14 and 16, in the
light of Art. 39(d) and the Preamble to the Constitution, the principle of ‘equal pay for equal work’ partakes the character
of a fundamental right and has to be applied to ‘cases of unequal scales of pay, based on no classification or on irrational
classification, though drawing different scales of pay, doing identical work, under the same employer.’ Elaborating the
concept of ‘equal pay for equal work’ and its application, the court observed:

Where all things are equal, that is, where all relevant considerations are the same, persons holding identical posts may not be
treated differentially in the matter of their pay, merely because they belong to different departments. Of course, if officers of the
same rank perform dissimilar functions and the powers, duties and responsibilities of the posts held by them vary, such officers
may not be heard to complain of dissimilar pay, merely because the posts are of the same rank and the nomenclature is the
same...and there are different grades in a service, with varying qualifications for entry into a particular grade, the higher grade
often being a promotional avenue for officers of the lower grade. The higher qualifications for the higher grade, which may be
either academic ‘qualifications or experience based on the length of service, reasonably sustain the classification of the officers
into two grades, with different scales of pay. The principle of ‘equal pay for equal work’ would be an abstract doctrine, not
attracting Article 14, if sought to be applied to them. 75

The mere fact, that the nature of work in two sets of employment is more or less the same, will not entitle the workmen in
such employments to the same scale of pay. The scales of pay, in governmental departments, public sector undertakings,
and even industrial undertakings, are fixed by expert bodies like the pay commission, which consist of persons having a
specialised knowledge of the subject and have to go in depth, of all the relevant factors, including the nature of the work.
Apart from the nature of work, educational qualifications, responsibilities of the posts and experience etc, are taken into
account for fixing the pay scales. In Delhi Veterinary Assn, the Supreme Court observed that apart from the nature of
work, the pay structure should reflect many other values and stated that the employer should follow certain basic principles
in fixing pay scales for various posts and cadres. The degree of skill, strain of work, experience involved, training required,
responsibility undertaken, mental and physical requirements, disagreeableness of the task, hazard attendant on the work
and fatigue involved, are, according to the third pay commission, some of the relevant factors which should be taken into
consideration in fixing pay scales. The method of recruitment, the level at which the initial recruitment is made in the
hierarchy of service or cadre, minimum educational and technical qualifications prescribed for the post, the nature of
dealings with the public, avenues of promotion available and horizontal and vertical relativity with other jobs in the same
service or outside, are also relevant factors. 76

Then, elaborating the same theme, in JP Chaurasia, the court said that apart from the nature of the work or the volume of
the work done, the other relevant factors to be taken into account are ‘evaluation of duties and responsibilities of the
respective posts’. Even if the functions of two posts or jobs appear to be same or similar, there may be differences in the
degree of performance. The quantity of work may be the same, but the quality may be different. That cannot be determined

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by relying on the averments in the affidavits of the interested parties. These factors can best be determined by expert
bodies, like a pay commission, who would be best equipped to evaluate the nature of duties and responsibilities of posts.
The determination by such bodies should normally be accepted and the court should not try to tinker with such
equivalence, unless it is shown that it was made with extraneous considerations.77

The above decision was followed by the court in Pramod Bhartiya.78 In this case, the lecturers working in higher
secondary schools had failed to establish that the distinction between their scales of pay and that of the non-technical
lecturers working in technical schools, is either irrational and has no basis, or that it was vitiated by mala fides, either in
law or in fact. In Shyam Babu Verma,79 the claim by a group of pharmacists for equal pay, was rejected on the ground that
the classification made by the body of experts, after a full study and analysis of the work, should not be disturbed except
for strong reasons, which indicate that the classification made was unreasonable. In Hari Narayan Bhowal, the court
observed that the principle of ‘equal pay for equal work’, therefore, can only be enforced if the claiming persons satisfy the
court that not only is the nature of the work identical, but in all other respects also, they belong to the same class and there
is no apparent reason to treat ‘equals as unequals’. In the absence of a very clear case, satisfying the court that the scales
provided to a group of persons, on the basis of material produced before it, amounts to discrimination, without any
justification, the court should not take upon itself the responsibility of fixing the scales of pay, particularly when different
scales of pay have been fixed by the pay commission or pay revision committees, comprising persons who are experts in
the field, after examining all the relevant materials. In the process undertaken by the court, an anomaly in different services
may be introduced, of which the court may not be conscious, in the absence of relevant materials before it. Therefore, the
claimants must produce relevant material before the court to satisfy it that ‘they have not been treated as equals within the
parameters of Art. 14 ’. And in the absence of such material, the court should be reluctant to issue any writ or direction to
treat them as equal, particularly when a body of experts has found them not to be equal. In this case, the court rejected the
claim of the volunteers enrolled under the West Bengal National Volunteer Force Act 1949, to be treated at par with the
constables employed in the West Bengal Police Force, because they formed two different classes in public service,
particularly when the scales of pay had been fixed by an expert body, after taking into account all relevant materials. The
Supreme Court pointed out that merely because the academic qualifications and physical requirements of both were similar
or that the agragamies were also given certain fire fighting training, along with other training, it could not be inferred that
they performed similar duties, functions and responsibilities as the firemen.80

In Basavalingappa, in the absence of relevant material, the general question as to whether on the basis of educational
qualification, different pay scales could or could not be prescribed, was not considered by the court and the case was
decided on the facts and circumstances of the case, that an instructor will perform the same duties and will do the same
work, in spite of the fact that he may be a certificate holder or a diploma holder. Consequently, different pay scales could
not be enforced for the same post, merely on the basis of the holding of a certificate or a diploma.81 In Supreme Court EW
Association, on a review of its earlier dicta, the court observed that although the doctrine of ‘equal pay for equal work’
does not come within Art. 14 of the Constitution as an abstract doctrine, if, however, any classification is made relating to
the pay-scales and such classification is unreasonable or if unequal pay is based on no classification, then Art. 14 will at
once be attracted and such classification is liable to be struck down and ‘equal pay for equal work’ must be directed. In
short, where unequal pay has brought about a discrimination within the meaning of Art. 14 of the Constitution, it will be a
case of ‘equal pay for equal work’ as envisaged by Art. 14 of the Constitution. If, therefore, the classification is proper and
reasonable and has a nexus to the object sought to be achieved, the doctrine of ‘equal pay for equal work’ will not have any
application, even though the persons doing the same work are not getting the same pay. In the absence of any
discrimination within the meaning of Art. 14 of the Constitution, the abstract doctrine of ‘equal pay for equal work’, as
envisaged in Art. 39(d) of the Constitution, has no application and in view of the provisions of Art. 37, it will not be
enforceable.82 In CCE Stenographers, the Supreme Court held that ‘equal pay for equal work is a fundamental right’,
because it is ‘a concomitant of Art. 14 of the Constitution ’. Therefore, ‘equal pay for unequal work’ will be a negation of
the right. However, the court pointed out that ‘equal pay’ must depend upon the nature of the work done, and it may not be
judged by the mere volume of the work, there may be qualitative difference as regards the reliability and responsibility;
while the functions may be the same, the responsibilities would make a difference. Often the difference is a matter of
degree and there is an element of value-judgment by those who are charged with the fixing of the scales of pay and other
conditions of service. The value-judgment, however, has to be made bona fide, reasonably, on an intelligible criterion,
which has a rational nexus with the object of the differentiation, and then, such differentiation will not amount to
discrimination. Speaking for the court, Sabyasachi Mukharji J held:

The same amount of physical work may entail different qualities of work, some more sensitive, some requiring more tact, some
less-it varies from nature and culture of employment. The problem about equal pay cannot always be translated into a mathematical
formula. If it has a rational nexus with the object to be sought, for, as reiterated before, a certain amount of value-judgment of the
administrative authorities who are charged with fixing the pay scale, has to be left with them and it cannot be interfered with by the
court, unless it is demonstrated that either it is irrational or based on no basis or arrived at mala fide, either in law or in fact.83

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In Deb Kumar Mukherjee, the Supreme Court, while setting aside the order of High Court, noted that though the duties
performed by the inspectors in Grade I and II may be the same, no fault could be found with the classification done by the
Pay Commission, as a classification in the cadre on the ground of selection based on merit, is permissible. With regard to
the directions of the High Court, that the inspectors in the housing department should be given the same pay scale as was
given to the inspectors of the animal husbandry department, the court observed that there was a patent fallacy in the
reasoning, as there was nothing common in the housing department and the animal husbandry department.84 In Grih
Kalyan Kendra, there was no discrimination between the claimant workmen and other equally situated persons. The claim,
therefore, was held to be unsustainable.85 Likewise, in IN Misra, the classification between the principal private secretary
and private secretaries to the Chief Justice and yet another grade for the remaining private secretaries, was held to be
proper and valid and not suffering from any constitutional infirmity.86 Similarly, in TTD, a school belonging to Tirumala
Tirupati Devasthanam was closed and the teachers were retrenched. They were re-employed in another school and at the
time of re-employment, the salary which they were getting at the closed school was protected, which was more than those
of the teachers in the new school. The teachers already working in the new school made a grievance that the transferred
teachers were junior to them and were being paid a higher salary. The High Court of Andhra Pradesh, in its writ
jurisdiction, granted to them the same salary as was paid to the teachers who were transferred from the closed school. In
appeal by special leave, against the decision of the High Court, the Supreme Court noted that since the school in which the
teachers were serving, was closed, the proper and legal course for the Devasthanam was to transfer them to the other
school and protect their higher salary, which they were drawing in the old school. In the facts and circumstances of the
case, the application of the principle of ‘equal pay for equal work’ was unwarranted.87 In KS Mahalingegowda, the
Government of Karnataka adopted and implemented a centrally sponsored scheme of vocationalisation of secondary
education, with the object of providing diversified educational opportunities and a supply of skilled manpower, and also to
provide an alternative to those students, who did not wish to pursue academic studies beyond the tenth class. The teachers
employed under the scheme were employed on a part-time basis and their terms and conditions were altogether different
from those of the teachers teaching in the regular courses of education in the state. The teachers employed under the
scheme, however, claimed that they should be regularised in service, in the same pay-scales and under the terms and
conditions of service as were being given to the non-vocational teaching staff in the state. In view of the fact that there was
no parity between the two in imparting training and education or in other terms and conditions of employment, the
Supreme Court held that the claim of the vocational teachers was not tenable.88

Similarly, in Purna Chandm Nanda, the Supreme Court rejected the claim of the appellant, who was holding the post of a
dairy overseer and claimed that he had been promoted to the post of a dairy supervisor and was posted as a farm manager
in the district livestock breeding farm, and therefore, was entitled to ‘equal pay for equal work’ as a farm manager, with
the observation that merely because the posts of dairy supervisor and the farm manager were inter-changeable, the dairy
supervisor did not automatically become entitled to be the holder of the post of a farm manager and for the same scales of
pay. In view of the fact that the scales of pay of the two posts were different, the court pointed out that a direction to grant
‘equal pay’ to the appellant, would allow him to jump the queue and land on a higher ladder.89 In Fertilizer Corpn, the
Supreme Court held that there was no discrimination in fixing the pay of the two categories of employees, one who had not
acquired the officers’ grade and the other who had already acquired the officers’ grade, keeping in view their designation
as well as their pay scales obtaining on the relevant date, because they were in different classes. The court observed that
these two categories were unequal and the claimants could not, in law, make any grievance if different principles were
adopted in fixing their respective pay scales.90 In Ramashraya Yadav, the Supreme Court observed that the principle of
‘equal pay for equal work’ will not apply where the qualifications prescribed, mode of recruitment and the nature of duties
are different for regular employees and a temporary employee. Therefore, the claim of the temporary investigator-cum-
computer, for payment of salary at par with the regular investigator-cum-computer, could not be sustained.91 In Prem
Singh Soda, the employee was employed on an ad hoc basis, against an unsanctioned post. He was immune from the
rigours of disciplinary action and responsibility. It was, therefore, held that he was not entitled for equal pay as was paid to
regular employees discharging the same work.92 On the other hand, in MP Singh, in the facts and circumstances of the
case, the classification of officers in the cadre of sub-inspectors, inspectors and deputy superintendents of police, in the
central investigation units of the central bureau of investigation, into two groups, namely, deputationists and non-
deputationists, for paying different rates of special pay, did not pass the test of classification permissible under Arts. 14 and
16 of the Constitution, as it did not bear any rational relation to the objects of the classification.93 In Tannery and Footwear
Corpn, the Supreme Court directed the revision of the pay scales of the employees of the Tannery and Footwear
Corporation of India, so that they were at par with the pay scales of such employees employed in the Cotton Corporation of
India. The court held that though the two corporations were distinct legal entities, at the same time, it could not be ignored
that both were instruments of the Government of India, and who were bound by the directions contained in Pt IV of the
Constitution. This direction was made in view of the fact that the nature of the work and duties performed by the
employees in both the corporations, was the same.94

In R Kumar, in view of the specific provision under s 77(l)(a) of the Presidency Town Insolvency Act, as amended by the

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Tamil Nadu Management (Madras Act 5 of 1943), the Chief Justice of the Madras High Court recommended that the
employees in the Official Assignee attached to the High Court, should be treated at par with those equal categories in the
Madras High Court Service and Tamil Nadu Secretariat Service, in the matter of fixing their pay, because the duties,
responsibilities and qualifications prescribed were similar in both, High Court’s Service and the Official Assignee Service.
The court observed that it would be in violation of Art. 229 of the Constitution of India, if the recommendations of the
Chief Justice of the Madras High Court, in this connection, are not accepted by the government. Therefore, a direction was
issued to change the nomenclature of the staff members of the High Court Official Assignee Service, at par with those
equal categories in the Madras High Court Service and the Tamil Nadu Secretariat Service and revise the pay scales of the
members of, Official Assignee Service, and bring them at par with the equal categories of the Madras High Court Service
and the Tamil Nadu Secretariat Service.95 In G Krishna Rao, there were two grades of district judges, viz, grade 1, and
grade 2. If a district judge grade 1, was appointed as chairman of the industrial tribunal, he would get a salary in the scale
of Rs 5000-6200, but if in the same post, a grade 2 district judge was appointed, such district judge was entitled only to Rs
3580-5380 scale. The duties performed by the chairman, industrial tribunal, whether he was a grade 1 or grade 2 district
judge, were the same and identical. Therefore, denying the scale attached to the post of a chairman, occupied by a grade 2
district judge, was held to be wholly arbitrary and without any basis.96 In Balo Rai, the subsisting wage structure of the
piece-rated coal unloading workers was covered by an agreement subsisting between the parties. The Patna High Court
upheld the claim of such piece-rated workers and observed that the right of the workers to claim a proper pay-scale, could
not be prevented on the plea that their wage structure was covered by an agreement.1 In T Krishnan Unni, in the light of the
principles stated by the Supreme Court, a single judge of the Kerala High Court held that a scale of pay lower than that of
the promotees, being given to the direct recruits is unjustified, as it is not based on any rational basis. From the above
discussion, it is evident that the court has applied the doctrine of ‘equal pay for equal work’, depending upon the fact-
situations of each case.2 The undernoted case,3 along with several others is the further illustration of the application of the
doctrine. These decisions arose out of employment under the state, and are governed by the provisions of Arts. 14 and 16
of the Constitution. This doctrine will apply to employees in industrial employment, wherever permissible, with equal
force.

‘Rates of Wages’ and ‘Scales of Wages’

‘Rates of wages’ and ‘scales of wages’ are two different expressions, with two different connotations.4 The substance of
the statutory, as well as the dictionary meanings of the term ‘wages’ is that it is an ‘amount paid periodically, especially by
the days of week or month, for the time during which the workman or the servant is at the employer’s disposal’. The use of
the word ‘rate’ in the expression ‘rates of wages’, has not the effect of limiting its connotation. The expression, therefore,
means the manner, mode or standard of the payment of remuneration for work done, whether at the start or in subsequent
stages. ‘Rate of wages’ would thus include ‘scales of wages’ and there is no antithesis between the two expressions, the
former expression being applicable both to the initial, as well as, the subsequent amounts of wages. In other words, the
larger connotation of the expression ‘rates of wages’ is capable of comprising in its scope and ambit, ‘the scale of wages’.5
The fixation of the rates of wages, which includes within its compass, the fixation of the scales of wages, and the fitment
of workmen into wage scales, will also depend on the paying capacity of the industry.

Fitment of a Workman

Implicit and intrinsically connected with the questions of revision of the wage-scales, is the question of the fitment of
employees into the wage scales and a flat or an ad hoc increase of the salaries of workmen, wherever considered necessary.
This is elementary and fundamental to the jurisdiction of the industrial tribunal, in revising wage-scales. An industrial
tribunal, therefore, when deciding upon the wage-scales of the employees of an establishment, would have full liberty to
propose an ad hoc increase of salaries, as part of the revision of the wages, because the fitment into the revised pay scales
is itself a part of the revision of pay-scales.6 Normally, in the question of ‘fitting-in’, the length of the service of the
employee is taken into account and in the absence of any evidence that another uniform rule was followed by the
employer, the length of the service is the only criterion available, to be adopted in laying down the rules of ‘fitting-in’.7
These considerations are proper and relevant for industrial tribunals to adopt, while revising the wage-scales of the
employees of a concern. But there is no rule, statutory or otherwise, which prescribes that, whenever there is a revision of
the pay-scales of the employees of an establishment, either as a result of an award of a tribunal or by agreement, if an
employee’s basic salary is out of step in the scale prescribed, the same should be raised to bring it on to a step higher in the
scale. The considerations which may be appropriate for revising the wage-scales of the employees of a concern, cannot be
taken into account by an industrial tribunal in determining whether the basic salary of an employee should be raised to
bring it on a step higher in the scale.8 In the words of Bhargava J:

It has to be kept in view, that a scale is provided with two objectives. One is that a workman should, while improving in efficiency
with experience, receive some compensation in the form of increments, in a scale of pay. The second principle for prescribing a
scale of pay is that a workman, when he starts his service, has usually more restricted requirements, which increase with the lapse

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of time. It has been envisaged that a workman, when first joining service, may have only himself to feed, or at the most two
mouths, so as to include his wife. An average family of a workman under the present conditions, is envisaged to include two or
three children at a later stage, and, with this development in the family, the burden on the workman increases. One of the reasons
for granting a scale of pay is to make a provision for this increased burden.9

Further, even an unskilled mazdoor is in the same position and considering the present social concept, it would be fair even
if an unskilled mazdoor is given a scale of pay, stretched over a period of ten years, within which he can be expected to
stabilise his family burden.10 In French Motor Car (supra), Wanchoo J observed:

...generally, adjustments are granted when scales of wages are fixed for the first time. But there is nothing in law to prevent the
tribunal from granting adjustments even in cases where previously, pay-scales were in existence, but that has to be done sparingly,
taking into consideration the facts and circumstances of each case. The usual reason for granting adjustments, even where wage
scales were formerly in existence, is that the increments provided in the former wage-scales were particularly low and therefore,
justice required that an adjustment should be granted a second time.11

It was, therefore, held that there was no justification for making an adjustment in the manner which had been provided by
the tribunal, when new scales were fixed and all that should reasonably have been provided in the matter of adjustment
was that, when an employee was brought on to the new scale, his pay should have been stepped up to the next stage in the
new scale, in case there was no such pay in the old scales. In Hindustan Times (supra), Das Gupta J observed:

...what adjustment should be given when fixing the wage-scales, whether for the first time or in place of an old existing scale, has
to be decided by industrial adjudication after a consideration of all the circumstances of the case. It may well be true that in the
absence of any special circumstances, an adjustment of the nature as allowed in this case, by allowing a special increment in the
new scale, on the basis of service already rendered, may not be appropriate. 12

In Greaves Cotton, referring to the earlier cases, the court observed that the question as to whether an adjustment should be
granted or not, would always depend upon the facts and circumstances of each case. On a comparison of the scales of pay
of the company and those prevalent in other concerns, the court found that the pay-scales were not high, as compared to the
pay-scales in comparable concerns, and if, anything, they were on the lower side and in the concerns of the company, the
first rate of increments was generally on the lower side and lasted for a longer period than in the case of comparable
concerns. In this situation, the holding of the tribunal, awarding increments by way of a adjustment, was upheld, although
this resulted in raising the pay-packet of the workmen, which would stand in comparison with some of the best concerns in
the region.13 Similarly, the court affirmed the award of the tribunal in Gramophone Co, ordering that the workers should be
fixed in the awarded scale according to their present pay and if it did not coincide with any of the new scales, they should
be stepped up to the nearest higher stage and thereafter, the workmen, who had completed three years of service, should be
given one increment and those who had completed six years of service, or more, should be given two increments. In view
of the fact that some grades were enforced in the company earlier, the court found no reason to interfere with the provision
made by the tribunal, in the matter of adjustments.14 But later, in Calcutta Insurance, where the scales prevalent in the
company were unusually low, as compared to those of other comparable concerns, before the date of the award, and unless
the length of the services of the workmen was taken into consideration, great hardship was likely to be inflicted on the
existing workmen, when compared with the salary and dearness allowance which new workers would get, the pay and
dearness allowance of the workmen fixed by the tribunal was held to be fairly comparable to those of the workmen
working in other comparable concerns. Thus, by fitting the workers in the new scales of pay, taking into account their
length of service, the company would be rehabilitating them to a certain extent, even though they might have suffered in
the past, on account of the inadequacy of the scales of pay and dearness allowance. In view of the fact that the wage scales
and dearness allowance were low even as compared to other comparable concerns and to the financial capacity of the
employer to bear the burden, the award of the tribunal was affirmed and the court declined to modify it with respect to the
question of adjustment of the workmen into the new scales.15

In National Tobacco, the tribunal directed that when fitting workmen in the new grades, each workman should only be
stepped up to the next stage in the new scale, just above the salary which the workman was getting in the existing scale
applicable to him. This direction was challenged before the Supreme Court, on behalf of the workmen, on the ground that
it would result in a loss of benefit to those workmen who had put in long years of service, because, in some cases, even the
new workmen, employed for the first time, may become entitled to the same salary in the new scale, as would be payable
to a workman who had put in service for a longer period, with the company. It was, therefore, contended that the tribunal
should have directed that each workman would be entitled to one increment in the new scales, for over three years of
service, with a maximum of five increments. Since the grades of pay had not been revised for a large number of years and

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the scales of pay had become outdated, the court partially accepted the contention of the workers, that the adjudication of
the fitment in the new scales, should take into account the length of the service put in by the workmen, under the old
scales. Speaking for the court, Bhargava J, held that it would be unjust that a workman with a long period of service should
be made to draw the same salary in the new scale as a new entrant and thus, be deprived of all the benefits of his earlier
long service and, on this view of the matter, directed that all the workmen should be fitted at the amount of salary being
drawn already, or, if there be no such stage in the new scale, at the next higher stage or at the stage in the new scale to
which he would be entitled, if he were deemed to start in that new scale and was given one increment for every three years
of service, with a maximum of five increments, whichever was higher.16 In Indian Link Chain, while prescribing the
consolidated wage scales of daily wages, the tribunal had neither adopted the scales of wages claimed by the union, nor did
it fix them on a point-to-point basis. Setting aside the award, Jaganmohan Reddy J observed:

This principle, in our view, recognises that the payment in a graduated wage-scale should reflect the years of service of an
employee in that grade. When the graduated wage-scale is first fixed and a fitment is made therein, a subsequent revision in the
wage-scales does not require any further fitment, because the original fitment will continue to give them the advantage of their
service. 17

Classification of Employees for Wage Fixation

While fixing wages, it is necessary for the tribunal, who is entrusted with this task, to see the nature of the work which a
workman is required to perform and then place him in a category to which he belongs. Such classification or categorisation
is incidental to wage fixation and therefore, will fall within the jurisdiction of the tribunal under s 10(4). However, the
tribunal has to apply its mind and then decide as to which classification or category a particular workman belongs. If a
classification is based on no material, such classification will not be sustainable.18 The classification of workmen for the
purposes of wages, has to be two-fold, namely,

(a) classification of jobs, and

(b) fitting of existing staff into the various classified jobs. The fitment of the employees into various categories and classes
has been dealt with in the foregoing topic.

The classification of jobs, has to be dealt if it is in dispute, between the employer and the workmen, with by the tribunal
itself but fixing of individual workmen in particular classified jobs can best be done by the management, in consultation
with the union of workmen. The disputed cases may be referred for adjudication, under this category.19 In Indian Hume
Pipe,20 the management and the workmen agreed before the industrial tribunal, that the categories and classifications of the
respective employees shall be as provided under an earlier award between them. But the tribunal reclassified certain
categories of workmen so as to be inconsistent with the agreement. The direction of the tribunal in this respect, was set
aside by the Supreme Court. The usual pattern of the categories of workmen are: unskilled, semi-skilled and skilled, but in
some cases, there are further sub-divisions of these classifications. In Greaves Cotton, the tribunal introduced a ‘higher
unskilled’ category. The Supreme Court, in appeal, observed that it could not be understood:

...how the unskilled category can be sub-divided into two, namely, ‘lower’ and ‘higher’ unskilled, though we can understand the
semi-skilled and skilled categories being sub-divided, depending upon the amount of skill. But there cannot be degrees of a want of
skill, among the unskilled class.21

Piece-Rate System

Piece-rate is what is paid by results or the output of work, which is often described as a ‘task’. There is greater
consideration to quantity in fixing piece-rates in some particular types of work, in some industries, with a guaranteed
minimum. The same standard may not be appropriate in all types of piece-work. With reference to a particular work, the
importance of man rather than the machine employed, may have to be dealt with differently. Even in piece-rates, it will be
necessary to look around to find same correlation with time-rates of the same or similar class of workers; for example, the
contribution of the worker to the job, the nature of the work, the part played by the machine, the incentive to work and
above all, protection against any creation of industrial unrest, because of the existence side by side, of two categories of
workers, particularly if there is no possibility of transfer of labour from one type of work to the other, from time to time.
Again, there may be some work where a special skill of the worker, with or without machine, may be necessary and that
factor will have to be then, considered. It will vary from industry to industry and from one process to another. No hard and
fast rule can be laid down, nor is it possible or helpful. In industrial adjudication, the tribunal will have to see that the

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piece-rates do not drive workers to fatigue or to the limit of exhaustion and hence, will have to keep an eye on the time
factor in work. Then again, a guaranteed minimum may also have to be provided, so that for no fault of a diligent worker,
he does not stand to lose on any account. There may be a misty penumbra, which has got to be pierced through upon all
available materials on record and also what the tribunal, in fairness, can lay its hands on, with notice to the parties, for the
purpose of fixing the piece-rates, while balancing all aspects. These are broadly, the bare outlines of approaching a matter
so involved and sensitive as wage fixation, particularly when no one at the present time, can shut one’s eyes to the rising
spiral of prices of essential commodities. The wages of the piece-rated workmen have to be kept in line with the wages of
the time-rated workmen, with the object of avoiding discrimination and heart-burn among workers and for the maintenance
of industrial peace among them.22 In British India Corpn,23 two types of employees, viz, checkers and perchers, were doing
the same work on two different stages, in the weaving unit of a textile mill. The checkers were paid on piece rate and daily
wages basis, while perchers were paid on a monthly rate basis. A single judge of the Allahabad High Court held that the
award of the industrial tribunal, directing that the checkers should also be paid on a monthly basis, was valid and
justifiable. He further observed that it was a case of fixing the wages on a monthly basis and there was no question of
revising the wages in the industry.

Inter-State Concerns

In Dunlop Rubber. which an all India concern, the Supreme Court held that it would be advisable to have uniform
conditions of service and, if uniform conditions prevail in any such concern, they should not be easily changed. But cases
may arise where, if necessary, on the basis of the industry-cum-region basis, changes may have to be made, even where the
conditions of an all India concern are uniform. Even though uniformity may be desirable in an all India concern, the
tribunal should not abstain from seeing that fair conditions of service prevail in the industry with which it is concerned. If
any scheme, which may be uniformly in force throughout India in such a concern appears to be unfair and not in
accordance with the prevailing conditions in the region, it would be the duty of the tribunal to make changes in the scheme,
to make it fair and bring it in line with the prevailing conditions, particularly in the region in which the tribunal is
functioning, irrespective of the fact that the demand is made by only a small minority of the workmen employed in one
place, out of the many where the all-India concern carries on its business.24 Though this case was dealing with the
introduction of the scheme of gratuity, the principle equally applies to the formulation of a wage-structure. In Remington
Rand (supra), the claim for a lunch allowance, on the basis of a similar allowance being given in some other branches, was
rejected by the court.

Standardisation of Wage Scheme

Standardisation means levelling up of those whose, terms and conditions of service which are less favourable than the
standardised ones, and levelling down those of such others, whose terms and conditions are more favourable than the
standardised ones. It is well known that a standardisation of the conditions of service, in industrial adjudication, generally
does not recognise exceptions. If the wage-structure is standardised, it is intended to make wages uniform in the whole
industry brought under the working of the standardisation scheme.25 The whole purpose of introducing a standardisation
scheme with respect to wages, is to standardise wages by raising them to the standardised level where they are low and by
reducing them where they are high, in order to fit them in the standardised scheme. When a standardisation scheme of
wages comes into force, it is an integrated whole and may sometimes result in some categories of workmen getting less
than what they were getting before. However, it would not be against the basic principles of standardisation, to protect the
wages of individual workmen, who might be getting more than the wages fixed in the standardised scheme at the time
when such a scheme is brought into force. The tribunal, however, has discretion to decide whether it will protect these
individual workmen or not. If it gives no direction for such protection to individual workmen, they will not be protected
and their wages will have to be lowered, in case they are higher than those fixed in the standardisation scheme. But if the
tribunal considers that it will be more in consonance with justice, to protect the wages of the individual workmen, it may
give a direction to that effect, even though they may be more than the wages fixed in the standardisation scheme. Wanchoo
J laid down the following three conditions:

(a) There can be no further raising of the wages of the protected workmen, by the management, after the standardisation
scheme comes into force, for any such further raise will be against the principle of standardisation;
(b) If the standardisation scheme fixes incremental scales of wages and if a protected workman is getting a wage which is
between the minimum and the maximum and he is not entitled, in accordance with the length of his service, to that
wage, but to something less in the grade, the extra amount that he may be getting, will have to be absorbed in future
increments, till he is properly ‘fitted-in’ in the incremental scale, according to the length of his service; and
(c) When any workman’s service comes to an end, for any reason whatsoever, no other employee, whether new or old, would
be entitled to claim the pay which the outgoing employee was getting, on the ground that a vacancy with the higher pay
has arisen.26

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In DCM, the Bombay scheme of standardised wages (for textile industry) was applied by the textile mills in Delhi,
according to which, two looms were the normal assignment of one weaver. The employer equated one Turkish loom in its
mills, to two plain looms and enforced the deduction in wages in accordance with para 7 of the Bombay scheme but there
was nothing in the Bombay scheme to justify the assumption that one Turkish loom would be equivalent to two ordinary
looms. The Supreme Court held that there was no justification for introducing a deeming provision in the scheme, that a
person working on one Turkish loom should be deemed to be working on two ordinary looms, so as to enable the employer
to enforce a deduction in the wages of the weavers attending to three or more looms. When the wages were fixed on a
piece-rate basis, and the workmen were able to effect their production by attending to more looms as a result of an
improvement in the machinery, there could be no justification for any deduction in their wages. It is the essence of a piece-
rate basis, that more the production by the workmen, the proportionately larger would be their wages, subject to such
conditions as might be prescribed in this behalf.27 In National and Grindlays Bank, the tribunal awarded that the
employees of the Kanpur branch of the bank would be entitled to medical aid and expenses, up to a monetary limit of Rs
250 per year, which would be available to the employees as well as to the members of their families, as defined in a
bipartite settlement. The award was challenged before the Supreme Court, not only on the ground that it was
discriminatory and showed an unwarranted favour to the employees of one of the branches of the bank at Kanpur, but also
that it was against the principles of standardisation, which was the basis of the bipartite agreement. The court noticed that
the object of the bipartite agreement was to standardise the facility in respect of medical aid and expenses, but when it was
found that one of the branches of the bank was not able to fall in line, that point was left for further negotiation, but
nonetheless, it was made manifestly clear, that standardisation should be achieved to bring them in line with the workmen
of the other branches of the bank, in regard to medical aid expenses. The court held that there was no cogent reason upon
which the tribunal could distinguish the claim of the workmen at Kanpur and single them out for a beneficial treatment,
which was not applicable to the workmen engaged in other branches. On this view of the matter, the court held that the
workmen located at Kanpur should be treated on par with the employees of the other branches, who were similarly
situated.28

Revision of Wage Structure

In dealing with the question of a revision of the wage scales, the technical considerations of res judicata cannot bar
industrial adjudication.29 For a detailed discussion of the principle of res judicata, see notes and comments under s 10(4) of
the Industrial Disputes Act.

(a) Increase in Wage-Structure

The same principles will govern the revision of a wage structure as they govern the formulation of a wage structure in the
first instance, by industrial adjudication, because there is no difference between a revision of the pay scale and a fixation of
the wage structure. The revision of a wage-structure, like constructing a wage structure in the first instance, is a delicate
task and the tribunal has to bear in mind, as against the labour’s demand for a higher wage, the problem of the additional
burden which a revision of the wage scales would impose. In revising the wage-structure, therefore, industrial adjudication
has to take into account, a broad and overall view of the financial position of the employer and then, to make an attempt to
reconcile the natural and just claim of the employees for a fair wage, with the capacity of the employer to pay. In
determining such capacity, allowance must be made for the legitimate desire of the employer to make a reasonable profit.
In National Insurance, from the revised scales awarded by the tribunal, it was manifest that except for one grade, the scales
for the rest of the grades offered by the employer company, to the union, in its notice, compared favourably with those
granted by the tribunal. In these circumstances, the Supreme Court did not think it proper to interfere with the scales of
wages. Shelat J observed:

...to harmonise the conflicting claims of labour and capital on a reasonable basis, and so, if it appears that the employer cannot
really bear the burden of the increased pay bill, industrial adjudication cannot refuse to examine his case and should not hesitate to
give him relief, if it is satisfied that if such relief is not given, the employer may have to close down his business.30

In enhancing a wage-structure, as in constructing a wage-structure for the first lime, the nature of the work, the quantum of
the work available for the worker, the average wages that he would earn for each item of work during a month, and the
paying capacity of the industry, have to be taken into consideration and an enhancement can be awarded only after having
due regard to all these factors.31 In New Egerton Woollen Mills, while professing to treat the establishment in question,
with another, as a comparable concern, the tribunal did not fix the revised wage scales so as to equalise them with those
prevailing in the other concern. From a comparison of the wage scales in the two concerns, the disparity between them was
apparent. The Supreme Court, therefore, held that since the tribunal held the other concern to be the only comparable unit

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in the region, it would not, for any reason, fix wage scales at levels lower or less favourable than those existing in the other
concern. Since there was no question of the company not having the requisite financial capacity, the Supreme Court itself,
modified the wage scales awarded by the tribunal, so as, to at least, bring them in line with those in the other concern.32

(b) Reduction in Wages

In Millowners Assn, Gajendragadkar CJI held that the decision of this problem must also be based on the major
consideration, that the conflicting claims of labour and capital must be harmonised, on a reasonable basis. The learned
Chief Justice observed:

...If it appears that the employer cannot really bear the burden of the increasing wage bill, industrial adjudication, on principle,
cannot refuse to examine the employer’s case and should not hesitate to give him relief, if it is satisfied that if such relief is not
given, the employer may have to close down his business. It is unlikely that such situations would frequently arise, but on
principle, if such a situation does arise, a claim by the employer for the reduction of the wage structure, cannot be rejected
summarily.33

In Crown Aluminium Works, Gajendragadkar J held:

We do not think it would be correct to say that in no conceivable circumstances, can the wage structure be revised to the prejudice
of workmen ... theoretically, no wage structure can or should be revised to the prejudice of workmen, if the structure in question
falls in the category of the bare subsistence or the minimum wage’. ... it would be open to the employer to claim its revision, even
to the prejudice of the workmen, provided a case for such revision is made out on merits, to the satisfaction of the tribunal.34

In Indian Hume Pipe, the tribunal, having found that the financial position of the company was sound, nevertheless
accepted the case of the company for a change in the dearness allowance system. The Supreme Court observed that the
entire approach of the tribunal was erroneous. The court held that there was no reason to change the slab system, to the
detriment of the workmen, without compelling reasons, which should have existed for a long period of time. Speaking for
the court, Khalid J observed:

Normally, the answer would be in the negative. Tribunals and courts can take judicial notice of one fact; and that is that the wages
of workmen, except in exceptionally rare cases, fall within the category of mere ‘subsisting-wages’. That being so, it would be
inadvisable to tinker with the wage-structure of workmen, except under compelling circumstances. Employers have seldom
displayed a co-operative attitude where wage structure of workmen is devised. They have never showed a willingness for the
involvement of labour with the capital, so as to engender a participative labour capital relationship. This is a reality that tribunals
and courts have to reckon with, that being so, courts and tribunals have necessarily to keep their hands off from upsetting a wage-
structure that has satisfactorily worked for a long time. The sweat of the labour is never reflected in any balance sheet, although the
latent force behind every successful industry is this sweat. With their present wage structure, the labour just exists. No one should
try to deny them even this bare source of existence.35

Then again, in Raptakos Brett, the employer sought to restructure its dearness allowance scheme, by abolishing the slab
system and substituting the same by a scheme prejudicial to the workmen, on the ground that the slab-system had resulted
in over neutralisation, thereby, landing the workmen in the high-wage island. The court held that the dearness allowance
scheme which had stood the test of time for almost 30 years and had been approved by various settlements between the
parties, could not have been justifiably abolished by the industrial adjudicator and the High Court.36

Retrospective Award of Wages

It is now well established that the tribunal has power to give retrospective effect to its award. Hence, the tribunal has
discretion to give effect to the wage-structure formulated by it, from a retrospective date, a date anterior to the date of the
award. As to the date from which the award should come into force, industrial adjudication has treated the date of demand
and the date on which the award comes into force, as two extreme points. It has, however, the discretion to fix any
intermediate date, depending upon the circumstances of each case. When the tribunal has fixed the date with effect from
which the award of wages should be effective, in a proper exercise of its discretion, the courts will be reluctant, in judicial
review, to interfere with the date so fixed.37 The date from which the award of wages should be made effective, has to be
decided by the tribunal on consideration of the circumstance of each case and no general formula can be laid down in this
connection.38 It is, therefore, a matter to be decided by the tribunal, in its discretion, on a careful consideration of the
peculiar circumstances of each case, which would obviously include the financial capacity of the employer to bear the

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burden of a retrospective fixation of the new scales of wages.39 In Lipton, the Supreme Court did not regard the fact that
the labour union had presented its charter of demands to Lipton Ltd, for the first time, towards the end of December 1963,
as sufficient in itself, for giving a retrospective effect to the new scales of pay from that point of time.40

In United Collieries, a demand for an increased wages was found justified on merits by the tribunal and the benefit of the
increased wages was given, in the circumstances of the case, to the concerned workmen, with effect from retrospective
dates. The award was confirmed by the Supreme Court in appeal, with certain modifications.41 In Hydro Engineers, the
tribunal directed the employer to give effect to the award retrospectively, approximately from the date of the demand,
presumably because by that time, the cost of living index had gone up considerably and not to have done so would have
resulted in depriving the workmen of the minimum wages commensurate with that rise. The Supreme Court, in appeal by
special leave, did not think this to be a fit case for it to interfere with the retrospective date of the award.42 In National
Insurance and National Tobacco (supra) the Supreme Court declined to interfere with the retrospective operation of the
award on the ground that, on facts, the tribunal could not be said to have exercised its discretion improperly or
unreasonably. In Filmistan, however, the court noticed a number of infirmities in the award of the tribunal and particularly,
that it had not properly considered the financial capacity of the employer and also, that it had not taken into consideration,
other relevant factors, in fixing the wage-scales, and remanded the case for fresh hearing. Notwithstanding the demand of
the workmen for retrospective operation of the award, the tribunal directed that the award will have effect from 4
November 1965, ie, the date on which the case was remanded by the Supreme Court to it. In appeal, the Supreme Court
noticed that such retrospective operation would be casting a heavy burden on the management. The Court, though felt that
it should not interfere with the award, yet having regard to the facts and circumstances, ordered that the wages and
dearness allowance awarded would be enforceable with effect from 10 November 1966.43

70 Remington Rand of India Ltd v Workmen (1967) 2 LLJ 866 [LNIND 1967 SC 226] : AIR 1968 SC 224 [LNIND 1967 SC 425]
(SC), per Mitter J.
71 Director, State Farms Corpn of India Ltd v IT & LC (2003) 3 LLJ 81 : 2003 (3) WLC 83 (Raj .) per AD Singh J.
72 Indian Overseas Bank Ltd v Workmen CA No 480 of 1966 (1967): [1968] 38 Comp Cas 395 (SC), per Hidayatullah J.
73 Polychem Ltd v RD Tulpule (1972) 2 LLJ 29 [LNIND 1972 SC 169] : AIR 1972 SC 1967 [LNIND 1971 SC 666] (SC), per Dua J.
74 Shaw Wallace & Co Ltd v First IT 1986 Lab IC 2030, 2036 (Cal), per UC Banerjee J.
75 Hindustan Aeronautics Ltd v Workmen (1975) 2 LLJ 336 [LNIND 1975 SC 249] : AIR 1975 SC 1737 [LNIND 1975 SC 573]
(SC), per Untwalia J.
76 Kamani Metal & Alloys Ltd v Workmen (1967) 2 LLJ 55 [LNIND 1967 SC 18] (SC), per Hidayatullah J.
77 Hindustan Antibiotics Ltd v Workmen AIR 1967 SC 948 [LNIND 1966 SC 319] (960) : (1967) 1 LLJ 114 [LNIND 1966 SC 319] :
[1967] 1 SCR 652 [LNIND 1966 SC 319] (SC), per Subba Rao, CJI.
78 Workmen of Indian Oxygen Ltd v Mgmt CA No 806 of 1982 (2-5-1982) (SC), per Desai J.
79 Government of India (1969), Report of NCL-I, p 239.
80 Ibid, p 238.
81 Killick Nixon Ltd v KACE Union (1975) 2 LLJ 53 [LNIND 1975 SC 201], 56 : AIR 1975 SC 1778 [LNIND 1975 SC 201] (SC),
per Goswami J.
82 Mgmt of Shri CVKUS Mandali Ltd v Industrial Court (1979) 2 LLJ 383 [LNIND 1979 SC 357], 386 : AIR 1980 SC 31 [LNIND
1979 SC 357] (SC), per Kailasam J.
83 Hindustan Lever Ltd v BN Dongre 1995 Lab IC 1136, 1143 (SC), per Ahmadi J.
84 Hindustan Antibiotics Ltd v Workmen (1967) 1 LLJ 114 [LNIND 1966 SC 319], 127 : AIR 1967 SC 948 [LNIND 1966 SC 319]
(SC), per Subba Rao CJI.
85 Government of India (1969), Report of NCL-I, p 239.
86 Ibid.
87 Killick Nixon Ltd v Killick & Allied Companies Employees’ Union (1975) 2 LLJ 53 [LNIND 1975 SC 201], 55-56 (SC), per
Goswami J
88 Government of India (1969), Report of NCL-I, p 239.

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89 Wenger & Co v Workmen (1963) 2 LLJ 403 [LNIND 1962 SC 420], 412 (SC), per Gajendragadkar J.
90 Workmen of Indian Oxygen Ltd v Indian Oxygen Ltd CA No 806 of 1982 (2-5-1985) (SC), per Desai J.
91 Workmen of Orient Paper Mills Ltd v Orient Paper Mills Ltd (1969) 2 LLJ 398 [LNIND 1968 SC 205], 403 (SC), per Bhargava J.
92 Rambagh Palace Hotel v Rajasthan HW Union 1976 Lab IC 1474, 1475 : AIR 1976 SC 2303 [LNIND 1976 SC 2] (SC), per
Krishna Iyer J.
93 Bengal Chem & Pharma Works Ltd v Workmen (1969) 1 LLJ 751 [LNIND 1968 SC 279], 758 : AIR 1969 SC 360 [LNIND 1968
SC 279] (SC), per Vaidialingam J.
1 Union Drug Co Ltd v Fifth Industrial Tribunal (1963) 1 LLJ 172 (Cal), per BN Banerjee J.
2 Manton & Co Ltd v State of West Bengal (1962) 2 LLJ 444 (Cal), per BN Banerjee J.
3 Ahmedabad Millowners’ Assn v Textile Labour Assn (1966) 1 LLJ 1 [LNIND 1965 SC 185],28 (SC), per Gajendragadkar CJI.
4 Filmistan Pvt Ltd v Workmen (1966) 1 LLJ 744 [LNIND 1965 SC 299] (SC), per Gajendragadkar CJI.
5 Shivraj Fine Arts Litho Works v State IC 1978 Lab IC 828 (SC), per Kailasam J.
6 Gokak Mills Ltd v Industrial Tribunal 1970 Lab IC 337, 341-42 (Mys) (DB), per Gopivallabha Iyengar J.
7 Art Bangles Pvt Ltd v The Workmen CA No 918 of 1966 (3-12-1968) (SC), per Vaidialingam J.
8 Karam Chand Thapar & Bros Pvt Ltd v Workmen (1973) 2 LLJ 115 [LNIND 1973 SC 119] (SC), per Vaidialingam J.
9 Symonds & Co Pvt Ltd v Symonds & Co Karamchari Sangh 1980 Lab IC (NOC) 77 (All) (DB).
10 Workmen of Jagjiwandas Narotamdas Metal Factory v Mgmt (1951) 2 LLJ 778 (LAT).
11 Workmen of GEB v Gujarat Electricity Board (1969) 2 LLJ 791 [LNIND 1968 SC 388], 796-98 : AIR 1970 SC 87 [LNIND 1968
SC 388] (SC), per Bhargava J.
12 Press Employees’ Assn v The Statesman Ltd (1954) 1 LLJ 167 (LAT).
13 Kapoor Silk Mills v Mill Mazdoor Sabha, (1967) 2 LLJ 89 (Bom) (DB), per Patel J.
14 Ghaziabad Engineering Co Pvt Ltd v Workmen (1969) 2 LLJ 777 [LNIND 1969 SC 217] : AIR 1970 SC 390 [LNIND 1969 SC
217] (SC), per Shah J.
15 Silk & Art Silk Mills’ Assn Ltd v Mill Mazdoor Sabha (1972) 2 LLJ 175 [LNIND 1972 SC 243] : AIR 1972 SC 2273 [LNIND 1972
SC 243] (SC), per Mathew J.
16 British India Corpn v Industrial Tribunal 1984 Lab IC 14, 15 : AIR 1984 SC 362 [LNIND 1983 SC 215] (SC).
17 Workmen of Indian Oxygen Ltd v Indian Oxygen Ltd CA No 806 of 1982 (1985) (SC) per Desai J.
18 West Coast Paper Mills Ltd v West Coast PME Union 1990 Lab IC 1945, 1953 (Bom) (DB), per Suresh J.
19 Buckingham & Carnatic Co Ltd v Workers (1951) 2 LLJ 314 (LAT).
20 Clerks of Calcutta Tramways v CTC Ltd (1956) 2 LLJ 450 [LNIND 1956 SC 79], 453 : AIR 1957 SC 78 [LNIND 1956 SC 79]
(SC), per Govinda Menon J.
21 Associated Cement Companies Ltd v Workmen (1953) 2 LLJ 845 (LAT).
22 Tata Oil Millis Co Ltd v Workmen (1953) 2 LLJ 492 (LAT).
23 Clerks of Calcutta Tramways v Calcutta Tramways Co Ltd (1956) 2 LLJ 450 [LNIND 1956 SC 79] (SC), per Govinda Menon J.
24 Hindustan Times Ltd v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431] (SC), per Das Gupta J.
25 Bengal Chemical & Pharma. Works Ltd v Workmen (1969) 1 LLJ 751 [LNIND 1968 SC 279], 757 (SC), per Vaidialingam J.
26 Killick Nixon Ltd v KAC Employees Union (1975) 2 LLJ 53 [LNIND 1975 SC 201], 64 (SC), per Goswami J.
27 Mazgaon Dock Ltd v Assn of Engg Workers 1990 Lab IC 1061, 1069 (Bom) (DB), per Sawant J.
28 Government of India (1969), Report of NCL-I, p 243.
29 Mgmt of SCVKUS Mandali Ltd v IC (1979) 2 LLJ 383 [LNIND 1979 SC 357], 387 : AIR 1980 SC 31 [LNIND 1979 SC 357] (SC),
per Kailasam J.
30 Hindustan Lever Ltd v BN Dongre 1995 Lab IC 1136, 1143 : AIR 1995 SC 817 [LNIND 1994 SC 1260]: (1994) 6 SCC 157
[LNIND 1994 SC 1260] (SC), per Ahmadi J.
31 Monthly Rated Workmen at Wadala Factory of Indian Hume Pipe Co. Ltd. v Indian Hume Pipe Co. Ltd. Bombay, (1986) 1 LLJ 520
[LNIND 1986 SC 122], 527-28 (SC, per Khalid J) : AIR 1980 SC 1794 .
32 Mazgaon Dock Ltd, Bombay v Assn of Engineering Workers, Bombay, 1990 Lab IC 1061, 1088-89 (Bom) (DB), per Sawant J.

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33 Hindustan Lever Ltd v BN Dongre 1995 Lab IC 1136 : AIR 1995 SC 817 [LNIND 1994 SC 1260]: (1994) 6 SCC 157 [LNIND
1994 SC 1260] (SC), per Ahmadi J.
34 ‘A Guide to CPI Numbers’, Labour Bureau, Ministry of Labour and Employment, pp 172-73.
35 Cited in Ahmedabad Millowners’ Assn v Textile Labour Assn (1966) 1 LLJ 1 [LNIND 1965 SC 185], 20 (SC), per Gajendragadkar
J.
36 ‘A Guide to CPI Numbers’, Labour Bureau, Ministry of Labour and Employment, p 5.
37 Ahmedabad Millowners Assn v Textile Labour Assn (1966) 1 LLJ 1 [LNIND 1965 SC 185] (SC), per Gajendragadkar CJI.
38 Royal Calcutta Golf Club v Third Industrial Tribunal (1960) 1 LLJ 464 (Cal), per Sinha J.
39 Workmen of Indian Oxygen Ltd v IOL CA No 806 of 1982 (SC), per Desai J.
40 Source: “Consumer Price Index: An anatomy” published by Labour Bureau, Simla.
41 Jardine Henderson Ltd v Employees (1961) 1 LLJ 641 [LNIND 1961 SC 15] : AIR 1967 SC 515 [LNIND 1961 SC 15] (SC), per
Wanchoo J.
42 Greaves Cotton & Co Ltd v Workmen (1964) 1 LLJ 342 [LNIND 1963 SC 254], 348 : AIR 1964 SC 689 [LNIND 1963 SC 254]
(SC), per Wanchoo J.
43 Workmen of WIMCO v Western India Match Co Ltd (1962) 1 LLJ 660, 661 : AIR 1966 SC 976 [LNIND 1962 SC 161] (SC), per
Mudholkar J.
44 Associated Power Co Ltd v Workmen (1964) 1 LLJ 743 [LNIND 1963 SC 253], 745 (SC), per Gajendragadkar J.
45 India General Navigation and Rly Co Ltd v Workmen (1960) 1 LLJ 561 [LNIND 1960 SC 89] (SC), per Wanchoo J.
46 Swastic Cashew Industries Pvt Ltd v IT (1967) 1 LLJ 30, 41 (Mys) (DB), per Gopivallabha Ayyanagar J.
47 Workmen of Hindustan Motors Ltd v Mgmt (1962) 2 LLJ 352 [LNIND 1962 SC 265], 355-56 (SC), per Das Gupta J.
48 Vishuddhananda Saraswathi Marwari Hospital v Workmen (1952) 2 LLJ 327 (LAT).
49 Workmen of HML v Hindustan Motors Ltd (1962) 2 LLJ 352 [LNIND 1962 SC 265], 356 (SC), per Das Gupta J.
50 Hindustan Times Ltd v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431], 115 : AIR 1963 SC 1332 [LNIND 1962 SC 451] (SC),
per Das Gupta J.
51 Ahmedabad Millowners’ Assn v TLA (1966) 1 LLJ 1 [LNIND 1965 SC 185] (SC), per Gajendragadkar CJI.
52 Kamani Metals & Alloys Ltd v Workmen (1967) 2 LLJ 55 [LNIND 1967 SC 18], 58 (SC), per Hidayatullah J.
53 Karam Chand Thapar & Bros Pvt Ltd v Workmen (1973) 2 LLJ 115 [LNIND 1973 SC 119] (SC), per Vaidialingam J.
54 Phaltan Sugar Works Ltd v Employees (1961) 2 LLJ 136 [LNIND 1960 SC 119], 139 (SC), per Das Gupta J.
55 Indian Vegetable Products Workers’ Union v Mgmt (1954) 2 LLJ 441 (LAT).
56 Kamani Metals & Alloys Ltd v Workmen (1967) 2 LLJ 55 [LNIND 1967 SC 18], 58 (sq, per Hidayatullah J.
57 Remington Rand of India Ltd v Workmen (1962) 1 LLJ 287 [LNIND 1962 SC 87], 290 (sq per Gajendragadkar J.
58 Bengal Chem & Pharma Works Ltd v Workmen (1969) 1 LLJ 751 [LNIND 1968 SC 279], 758 (SC), per Vaidialingam J.
59 Workmen of NEW Mills v New Egerton Woollen Mills (1969) 2 LLJ 782 [LNIND 1969 SC 96], 788-89 (SC), per Shelat J.
60 Bengal Chem and Pharma Works Ltd v Workmen (1969) 1 LLJ 751 [LNIND 1968 SC 279], 759 : AIR 1969 SC 360 [LNIND 1968
SC 279] (SC), per Vaidialingam J.
61 Cinema Theatres v Workmen (1964) 2 LLJ 128 [LNIND 1964 SC 106] (SC), per Wanchoo J.
62 Remington Rand of India Ltd v Workmen (1968) 1 LLJ 542 [LNIND 1967 SC 225] : AIR 1968 SC 224 [LNIND 1967 SC 425]:
(1967) 1 LLJ 866 (SC), per Mitter J.
63 Karam Chand Thapar & Bros Pvt Ltd v Workmen (1973) 2 LLJ 115 [LNIND 1973 SC 119] : AIR 1973 SC 1266 [LNIND 1973
SC 119] (SC), per Vaidialingam J.
64 Phaltan Sugar Works Ltd v Employees (1961) 2 LLJ 136 [LNIND 1960 SC 119] : AIR 1967 SC 330 [LNIND 1960 SC 119] (SC),
per Das Gupta J.
65 SSLight Rly Co v IT 1971 Lab IC 308 [LNIND 1970 DEL 63], 311 (Del), per Rangarajan J.
66 Government of India (1969), Report of NCL-I, p 145.
67 Patna Electric Supply Co Ltd v Workers Union (1959) 2 LLJ 366 [LNIND 1959 SC 75] 372-73 : AIR 1959 SC 1035 [LNIND 1959
SC 75] (SC), per Gajendragadkar J.

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68 Tocklai Experimental Station v Workmen (1961) 2 LLJ 694 [LNIND 1961 SC 361], 698-99 : AIR 1962 SC 1340 [LNIND 1961 SC
361] (SC), per Gajendragadkar J.
69 United Salt Works & Industries Ltd v Workmen (1962) 1 LLJ 131 [LNIND 1961 SC 141] (SC), per Gajendragadkar J.
70 Mohammed & Sons v Workmen CA No 338 of 1966 (27-7-1967) (SC), per Wanchoo CJI.
71 Mgmt of SB Products Co Pvt Ltd v Workmen 1971 Lab IC 1243 : AIR 1971 SC 2134 (SC), per Mitter J.
72 Corpn of Madras v Rathan Singh (1969) 2 LLJ 156 (Mad), per Kailasam J.
73 Indian Oxygen Ltd v Ram Adhar Singh CA No 1444 of 1966, (1968) (SC), per Shelat J.
74 International Encyclopaedia of Social Sciences, 1968, Vol 8, p 497.
75 Ibid, s 498.
76 Government of India (1969), Report of NCL-I, pp 166-67.
77 Remington Rand of India Ltd v Workmen (1969) 19 FLR 46 : AIR 1970 SC 1421 [LNIND 1969 SC 420]: 1970 Lab IC 1182
[LNIND 1969 SC 420] (SC), per Shelat J.
78 Remington Rand of India Ltd v Workmen 1970 Lab IC 1182 [LNIND 1969 SC 420], 1184-85 : AIR 1970 SC 1321 [LNIND 1970
SC 263]: (1969) 19 FLR 46 (SC), per Shelat J.
79 National Insurance Co Ltd v Workmen CA No 693 and 841 of 1966 (13-9-1968) (SC), per Shelat J.
80 Mgmt of National & Grindlays Bank Ltd v Workmen 1971 Lab IC 1491 [LNIND 1971 SC 341] : AIR 1971 SC 2454 [LNIND 1971
SC 341]: (1971) 2 SCC 595 [LNIND 1971 SC 341] (SC), per Jaganmohan Reddy J.
81 Shalimar Paints Ltd v Third IT 1971 Lab IC 164 [LNIND 1970 CAL 56] (Cal), per TK Basu J.
82 Atul Products Ltd v Workmen (1972) 2 LLJ 20 [LNIND 1972 SC 157] : AIR 1972 SC 1234 [LNIND 1972 SC 157] (SC), per
Vaidialingam J.
83 Workmen DESU v Mgmt (1972) 2 LLJ 130 [LNIND 1972 SC 227] : AIR 1973 SC 365 [LNIND 1972 SC 227] (SC), per
Vaidialingam J.
84 Distt Transport Manager, OSRTC v LC 1991 Lab IC 2477 -78 (Ori) (DB), per Hansaria CJ.
85 State Bank of India v CGIT (1994) 2 LLJ 329 (All), per DS Sinha J.
86 Bala Subrahmanya Rajaram v BC Patil AIR 1958 SC 518 [LNIND 1958 SC 23], 520 : (1958) 1 LLJ 773 [LNIND 1958 SC 23] :
[1958] 1 SCR 1504 [LNIND 1958 SC 23] (SC), per Vivian Bose J.
87 Vayitri Plantations Ltd v Babu Mathew 1994 Lab IC 632, 636 : (1994) 1 LLJ 1131 (KER) (DB) (Ker), per Jagannadha Rao CJ.
88 Crown Aluminium Works v Workmen (1958) 1 LLJ 1 [LNIND 1957 SC 106] (SC), per Gajendragadkar J.
89 Government of India (1969), Report of NCL-I, Chapter 16, p 236.
90 Crown Aluminium Works v Workmen (1958) 1 LLJ 1 [LNIND 1957 SC 106], 6 (SC), per Gajendragadkar J.
91 UK Roller Flour Mills v IC 1979 Lab IC 45, 51 (Bom) (DB), per Tulpule J.
92 Hindustan Times Ltd v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431], 112 (SC), per Das Gupta J.
93 Philip Snowden, The Living Wage, 1912, p 6.
94 Workmen v Mgmt of Raptakos Brett & Co Ltd 1992 Lab IC 289, 292 : AIR 1992 SC 504 [LNIND 1991 SC 571]: (1992) 1 LLJ 340
[LNIND 1991 SC 571] : (1992) 1 SCC 290 [LNIND 1991 SC 571] (SC), per Kuldip Singh J.
95 Express Newspapers Pvt Ltd v Union of India (1961) 1 LLJ 339 [LNIND 1958 SC 25], 364 (SC), per Bhagwati J.
96 Workmen v Mgmt. of Raptakos Brett & Co Ltd 1992 Lab IC 289, 293 : AIR 1992 SC 504 [LNIND 1991 SC 571]: (1992) 1 LLJ
340 : (1992) 1 SCC 290 [LNIND 1991 SC 571] (SC), per Kuldip Singh J.
1 Government of India, Report of the Committee on Fair Wages (CFW), 1947-49, p 115.
2 Phaltan Sugar Mills v Workmen (1954) 2 LLJ 341, 345 (LAT).
3 Standard Vacuum Refining Co of India Ltd v Workmen (1961) 1 LLJ 227 [LNIND 1961 SC 25] (SC), per Gajendragadkar J.
4 Workmen v Mgmt of Raptakos Brett & Co Ltd 1992 Lab IC 289, 293 (SC), per Kuldip Singh J.
5 Killick Nixon Ltd v Killick and Allied Co Employees Union (1975) 2 LLJ 53 [LNIND 1975 SC 201], 56-57 (SC), per Goswami J.
6 U Unichoyi v State of Kerala (1961) 1 LLJ 631 [LNIND 1961 SC 175], 637 (SC), per Gajendragadkar J.
7 Chandra Bhawan Boarding and Lodging v State of Mysore AIR 1970 SC 2042 [LNIND 1969 SC 368], per Hegde J.

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8 Bijay Cotton Mills Ltd v State of Ajmer (1955) 1 LLJ 129 [LNIND 1954 SC 129], 131 : AIR 1955 SC 33 [LNIND 1954 SC 129]
(SC), per Mukherjee J.
9 Crown Aluminium Works v Workmen (1958) 1 LLJ 1 [LNIND 1957 SC 106], 6 : AIR 1958 SC 30 [LNIND 1957 SC 106] (SC), per
Gajendragadkar J.
10 Lipton Ltd v Employees (1959) 1 LLJ 431 [LNIND 1959 SC 14], 442 (SC), per SK Das J.
11 Express Newspapers Pvt Ltd v Union of India (1961) 1 LLJ 339 [LNIND 1958 SC 25], 364 : AIR 1958 SC 578 [LNIND 1958 SC
25]: (1964) 1 LLJ 9 [LNIND 1963 SC 303] (SC), per Bhagwati J.
12 Kamani Metals & Alloys Ltd v Workmen (1967) 2 LLJ 55 [LNIND 1967 SC 18], 58 : AIR 1967 SC 1175 [LNIND 1967 SC 18]
(SC), per Hidayatullah J.
13 Workmen v Mgmt. of Raptakos Brett & Co Ltd 1992 Lab IC 289, 293 : AIR 1992 SC 504 [LNIND 1991 SC 571]: (1992) 1 SCC
290 [LNIND 1991 SC 571] (SC), per Kuldip Singh J.
14 S Krishna Murty v State of AP 1995 Lab IC 1773 (SC), per Sawant J.
15 Malayalam Plantations Ltd v State of Kerala (1976) 1 LLJ 114, 132 (Ker) (FB), per Subramanian Poti J.
16 Hindustan Hosiery Industries v FH Lala (1974) 1 LLJ 340 [LNIND 1974 SC 33], 347 (SC), per Goswami J.
17 Lipton Ltd v Employees (1959) 1 LLJ 431 [LNIND 1959 SC 14], 442 (SC), per SK Das J.
18 All India RBI Employees’ Assn v Reserve Bank of India (1965) 2 LLJ 175 [LNIND 1965 SC 146], 190 (SC), per Hidayatullah J.
19 Government of India (1969), Report of NCL-I, p 234.
20 ILO Convention and Recommendations 1919-1966, p 133; (cited by NCL-I, pp 230-31).
21 Government of India (1931), Report of the Royal Commission on Labour, p 212.
22 Report on the Working of Minimum Wages Act, Ministry of Labour & Employment, 1966, p 16 (NCL-I, p 231).
23 Chandra Bhawan Boarding & Lodging v State of Mysore AIR 1970 SC 2042 [LNIND 1969 SC 368], per Hegde J.
24 Crown Aluminium Works v Workmen (1958) 1 LLJ 1 [LNIND 1957 SC 106] (SC), per Gajendragadkar J.
25 Bijay Cotton Mills Ltd v State of Ajmer (1955) 1 LLJ 129 [LNIND 1954 SC 129]-31 (SC), per Mukherjee J.
26 Chandra Bhawan Boarding and Lodging v State of Mysore AIR 1970 SC 2042 [LNIND 1969 SC 368], 2048, per Hegde J.
27 Government of India (1969), Report of NCL-I, p 232.
28 Ibid, p 233.
29 Transport Corpn of India Ltd v State of Maharashtra 1993 Lab IC 507, 514 : (1993) 2 LLJ 365 (Bom), per Cazi J.
30 (1966) 1 LLJ 1 [LNIND 1965 SC 185] (SC), per Gajendragadkar CJI.
31 Shivraj Fine Arts Litho Works v State Industrial Court 1978 Lab IC 828, 835 (SC), per Kailasam J.
32 Crown Aluminium Works v Workmen (1958) 1 LLJ 1 [LNIND 1957 SC 106] (SC), per Gajendragadkar J.
33 Workmen v Mgmt. of Raptakos Brett & Co Ltd 1992 Lab IC 289, 293 : AIR 1992 SC 504 [LNIND 1991 SC 571]: (1992) 1 LLJ
340 : (1992) 1 SCC 290 [LNIND 1991 SC 571] (SC), per Kuldip Singh J.
34 Government of India (1969), Report of NCL-I, p 232.
35 Shivraj Fine Arts Litho Works v State IC 1978 Lab IC 828, 835 (SC), per Kailasam J.
36 French Motor Car Co Ltd v Workmen (1962) 2 LLJ 744 [LNIND 1962 SC 366] : AIR 1963 SC 1327 [LNIND 1962 SC 366] (SC),
per Wanchoo J.
37 Workmen of Orient Paper Mills Ltd v Orient Paper Mills (1969) 2 LLJ 398 [LNIND 1968 SC 205] : AIR 1969 SC 976 [LNIND
1968 SC 205] (SC), per Bhargava J.
38 Jaydip Industries v Workmen (1972) 1 LLJ 244 [LNIND 1971 SC 649] : AIR 1972 SC 605 [LNIND 1971 SC 649] (SC), per
Mathew J.
39 Hindustan Times Ltd v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431], 112 (SC), per Das Gupta J.
40 Kamani Metals & Alloys Ltd v Workmen (1967) 2 LLJ 55 [LNIND 1967 SC 18], 58 (SC), per Hidayatullah J.
41 Express Newspapers Pvt Ltd v Union of India (1961) 1 LLJ 339 [LNIND 1958 SC 25] (SC), per Bhagwati J.
42 Re Express News Papers, op cit, p 363.
43 Hindustan Times Ltd v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431], 112 (SC), per Das Gupta J.
44 Hindustan Hosiery Industries v FH Lala (1974) 1 LLJ 340 [LNIND 1974 SC 33] (SC), per Goswami J.

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45 All India Reserve Bank Employees’ Assn v Reserve Bank of India (1965) 2 LLJ 175 [LNIND 1965 SC 146], 190 (SC), per
Hidayatullah J.
46 Hindustan Antibiotics v Workmen (1967) 1 LLJ 114 [LNIND 1966 SC 319], 129 (SC), per Subba Rao CJI.
47 Kamani Metals & Alloys Ltd v Workmen (1967) 2 LLJ 55 [LNIND 1967 SC 18] (SC), per Hidayatullah J.
48 UK Roller Flour Mill v Industrial Court 1979 Lab IC 45, 51 (Bom) (DB), per Tulpule J.
49 Express Newspapers Pvt Ltd v Union of India (1961) 1 LLJ 339 [LNIND 1958 SC 25], 364 : AIR 1958 SC 578 [LNIND 1958 SC
25] (SC), per Bhagwati J.
50 Express Newspapers Pvt Ltd v Union of India (1961) 1 LLJ 339 [LNIND 1958 SC 25], 361-62 (SC), per Bhagwati J.
51 Express Newspapers Pvt Ltd v Union of India (1961) 1 LLJ 339 [LNIND 1958 SC 25] (SC), per Bhagwati J.
53 Prof M Fogarty, The Just Wage, 1969, p 152 cited by the NCL-I, p 237.
54 Hindustan Times Ltd v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431], 112 : AIR 1963 SC 1332 [LNIND 1962 SC 451] (SC),
per Das Gupta J.
55 All India RBI Employees Assn v Reserve Bank of India (1965) 2 LLJ 175 [LNIND 1965 SC 146], 190 : AIR 1966 SC 305 [LNIND
1965 SC 146] (SC), per Hidayatullah J.
56 Hindustan Antibiotics Ltd v Workmen (1967) 1 LLJ 114 [LNIND 1966 SC 319], 120 : AIR 1967 SC 948 [LNIND 1966 SC 319]
(SC), per Subba Rao CJI.
57 Monthly Rated Workmen of Indian Hume Pipe Co Ltd v Mgmt (1986) 1 LLJ 520 [LNIND 1986 SC 122], 530 : AIR 1986 SC 1794
[LNIND 1986 SC 122] (SC), per Khalid J.
58 Workmen v Mgmt. of Raptakos Brett & Co Ltd 1992 Lab IC 289, 293-94 : AIR 1992 SC 504 [LNIND 1991 SC 571]: (1992) 1 SCC
290 [LNIND 1991 SC 571] : (1992) 1 LLJ 340 [LNIND 1991 SC 571] (SC), per Kuldip Singh J.
59 Malayalam Plantations Ltd v State of Kerala (1976) 1 LLJ 114, 133 (Ker) (FB), per Subramonian Poti J.
60 Report of the Committee on Fair Wages, pp 25-26.
61 Ibid, p 26.
62 [1912] 227 US 88; 57 Law Ed 43l.
63 [1940] 312 US 126; 85 Law Ed 624.
64 Kenneth F Walker, Industrial Relations in Australia, 1956.
65 Report of the Committee on Fair Wages, pp 26-27.
66 Ibid, pp 370-71.
67 Ibid, p 371.
68 Government of India (1969), The Report of NCL-I, pp 273-74.
69 Hindustan Hosiery Industries v FH Lala (1974) 1 LLJ 340 [LNIND 1974 SC 33], 347 (SC), per Goswami J.
70 Standard Vacuum Refg Co of India Ltd v Workmen (1961) 1 LLJ 227 [LNIND 1961 SC 25], 232 (SC), per Gajendragadkar J.
71 Barbara Wootten, The Social Foundations of Wage Policy, 1955.
72 Hindustan Antibiotics Ltd v Workmen (1967) 1 LLJ 114 [LNIND 1966 SC 319], 120 (SC), per Subba Rao CJI.
73 Unichem Laboratories Ltd v The Workmen (1972) 1 LLJ 576 [LNIND 1972 SC 127], 594 (SC), per Vaidialingam J.
74 Government of India (1969), Report of NCL-I, Chap 15, p 220.
75 Standard Vacuum Refining Co of India Ltd v Workmen (1961) 1 LLJ 227 [LNIND 1961 SC 25], 232 (SC), per Gajendragadkar J.
76 Government of India (1969), Report of NCL-I, pp 220.
77 Hindustan Times v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431], 112 (SC) : AIR 1963 SC 1332 [LNIND 1962 SC 451]:
[1963 (6) FLR 313, per KC Das Gupta J.
78 Ahmedabad Millowners’ Assn v TLA (1966) 1 LLJ 1 [LNIND 1965 SC 185], 28 (SC), per Gajendragadkar CJI.
79 Kamani Metals & Alloys Ltd v Workmen (1967) 2 LLJ 55 [LNIND 1967 SC 18], 57-58 (SC), per Hidayatullah J.
80 Government of India (1969), Report of NCL-I, p 228.
81 Ahmedabad Millowners’ Assn v Textile Labour Assn (1966) 1 LLJ 1 [LNIND 1965 SC 185], 28 (SC), per Gajendragadkar CJI.
82 Hindustan Times v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431], 112 (SC), per Das Gupta J.

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83 Standard Vaccum Refining Co of India Ltd v Workmen (1961) 1 LLJ 227 [LNIND 1961 SC 25], 232 (SC), per Gajendragadkar J.
84 Hindustan Hosiery Industries v FH Lala (1974) 1 LLJ 340 [LNIND 1974 SC 33] (SC), per Goswami J.
85 Ahmedabad Millowners’ Assn v Textile Labour Assn (1966) 1 LLJ 1 [LNIND 1965 SC 185],28 (SC), per Gajendragadkar CJI.
86 Standard Vacuum Refining Co of India Ltd v Workmen (1961) 1 LLJ 227 [LNIND 1961 SC 25], 232 (SC), per Gajendragadkar J.
87 Hindustan Times v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431], 112 (SC), per Das Gupta J.
88 Government of India (1969), Report of NCL-I, p 228.
89 Hindustan Hosiery Industry v FH Lala (1974) 1 LLJ 340 [LNIND 1974 SC 33] (SC) : AIR 1974 SC 526 [LNIND 1974 SC 33]:
(1974) 4 SCC 316 [LNIND 1974 SC 33], per Goswami J.
90 Polychem Ltd v RD Tulpule (1972) 2 LLJ 29 [LNIND 1972 SC 169], 34 (SC), per Dua J.
91 Government of India (1969), Report of NCL-I, p 220.
92 Crown Aluminimum Works v Workmen (1958) 1 LLJ 1 [LNIND 1957 SC 106], 6 (SC), per Gajendragadkar J.
93 Hindustan Antibiotics Ltd v Workmen (1967) 1 LLJ 114 [LNIND 1966 SC 319], 130 (SC), per Subba Rao CJI.
1 Ahmedabad Millowners’ Assn v Textile Labour Assn (1966) 1 LLJ 1 [LNIND 1965 SC 185], 28 (SC), per Gajendragadkar CJI.
2 National Carbon Co (India) Ltd v Judge, Labour Appellate Tribunal (1958) 1 LLJ 472 [LNIND 1957 CAL 79], 481 (Cal), per
Sinha J.
3 KEH Abdul Samad Saheb & Co v IT (1963) 1 LLJ 504, 507 (Mad), per Veeraswami J.
4 Crown Aluminimum Works v Workmen (1958) 1 LLJ 1 [LNIND 1957 SC 106], 6 (SC), per Gajendragadkar J.
5 Hindustan Times v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431], 112-13 (SC), per Das Gupta J.
6 Government of India (1969), Report of NCL-I, p 228.
7 Hindustan Antibiotics Ltd v Workmen (1967) 1 LLJ 114 [LNIND 1966 SC 319], 126 (SC), per Subba Rao CJI.
8 International Encyclopaedia of the Social Sciences, 1968, vol 16, p 403.
9 Workmen of New Egerton Woollen Mills v New Egerton Woollen Mills (1969) 2 LLJ 782 [LNIND 1969 SC 96], 788-89 (SC), per
Shelat J.
10 Ahmedabad Millowners’ Assn v Textile Labour Assn (1966) 1 LLJ 1 [LNIND 1965 SC 185] (SC), per Gajendragadkar CJI. .
11 Workmen of Gujarat Electricity Board v Gujarat Electricity Board (1969) 2 LLJ 791 [LNIND 1968 SC 388] (SC), per Bhargava J.
12 Sangam Press Ltd v The Workmen (1975) 2 LLJ 125 [LNIND 1975 SC 204] (SC), per Goswami J.
13 Express Newspapers Pvt Ltd v Union of India (1961) 1 LLJ 339 [LNIND 1958 SC 25], 367 (SC), per Bhagawati J.
14 Ahmedabad Millowners’ Assn v Textile Labour Assn (1966) 1 LLJ 1 [LNIND 1965 SC 185]-2 (SC), per Gajendragadkar CJI.
15 Unichem Laboratories Ltd v The Workmen (1972) 1 LLJ 576 [LNIND 1972 SC 127] (SC), per Vaidialingam J.
16 Express Newspapers Pvt Ltd v Union of India (1961) 1 LLJ 339 [LNIND 1958 SC 25], 366-67, 413-14 (SC) : AIR 1958 SC 578
[LNIND 1958 SC 25], per Bhagwati J.
17 Workmen of Shri Bajrang Jute Mills v Employers (1970) 2 LLJ 6, 11 (SC) : AIR 1970 SC 878 : 1970 (1) Anwr 141 : 1970 (20) FLR
252 ], per Vaidialingam J.
18 Mgmt of Kirlampudi Sugar Mills Ltd v IT (1971) 2 LLJ 491 [LNIND 1971 SC 414], 498 (SC) : (1973) 3 SCC 626 [LNIND 1971
SC 414], per Jaganmohan Reddy J.
19 Workmen of Gujarat Electricity Board v Gujarat Electricity Board, (1969) 2 LLJ 791 [LNIND 1968 SC 388] (SC) : AIR 1970 SC
87 [LNIND 1968 SC 388]: (1969) 1 SCC 266 [LNIND 1968 SC 388] per Bhargava J.
20 Bharatkhand Textile Mfg Co Ltd v Textile Labour Assn, Ahmedabad (1960) 2 LLJ 21 [LNIND 1960 SC 81], 30 (SC), per
Gajendragadkar J.
21 Ahmedabad Millowners’ Assn v TLA (1966) 1 LLJ 1 [LNIND 1965 SC 185], 28 (SC), per Gajendragadkar CJI.
22 Shivraj Fine Arts Litho Works v State Industrial Court 1978 Lab IC 828, 836.
23 Workmen of Gujarat Electricity Board v Gujarat Electricity Board (1969) 2 LLJ 791 [LNIND 1968 SC 388] (SC), per Bhargava J.
24 DCM Chemical Works v Workmen (1962) 1 LLJ 388 [LNIND 1962 SC 97], 395 (SC) : [1962 (4) FLR 409 ], per Wanchoo J.
25 Bharatkhand Textile Mfg Co Ltd v Textile Labour Assn (1960) 2 LLJ 21 [LNIND 1960 SC 81], 30 (SC), per Gajendragadkar J.
26 Ahmedabad Millowners’ Assn v Textile Labour Assn (1966) 1 LLJ 1 [LNIND 1965 SC 185],28 (SC), per Gajendragadkar CJI.

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27 Wenger & Co v Workmen (1963) 2 LLJ, 403, 412 (SC), per Gajendagadkar J.
28 Jeewanlal (1929) Ltd v Workmen (1957) 1 LLJ 320 (LAT).
29 Sangam Press Ltd v The Workmen (1975) 2 LLJ 125 [LNIND 1975 SC 204], 127 (SC) : AIR 1975 SC 2035 [LNIND 1975 SC
204]: (1975) 4 SCC 357 [LNIND 1975 SC 204], per Goswarni J.
30 Indian Oxygen & Acetylene Co Ltd Employees Union v IOA Co Ltd (1956) 1 LLJ 435 -36 (LAT).
31 Mgmt of Shri Chalthan Vibhag Khan Udyog Sahakari Mandali Ltd v Industrial Court (1979) 2 LLJ 383 [LNIND 1979 SC 357],
391 (SC) : AIR 1980 SC 31 [LNIND 1979 SC 357]: (1979) 4 SCC 622 [LNIND 1979 SC 357], per Kailasam J.
32 Press Trust of India v Union of India 1974 Lab IC 716 (SC), per Jaganmohan Reddy J.
33 Express Newspapers Pvt Ltd v Union of India (1961) 1 LLJ 339 [LNIND 1958 SC 25], 367 (SC), per Bhagwati J.
34 Unichem Laboratories Ltd v The Workmen (1972) 1 LLJ 576 [LNIND 1972 SC 127] (SC) : AIR 1972 SC 2332 [LNIND 1972 SC
127]: (1972) 3 SCC 552 [LNIND 1972 SC 127], per Vaidialingam J.
35 Mgmt of Shri CVKUSM Ltd v GS Barot, v Industrial Court (1979) 2 LLJ 383 [LNIND 1979 SC 357], 391 (SC) AIR 1980 SC 31
[LNIND 1979 SC 357]: (1979) 4 SCC 622 [LNIND 1979 SC 357], per Kailasam J.
36 Shivraj Fine Arts Litho Works v State IC 1978 Lab IC 828, 836 (SC), per Kailasam J.
37 Report of the Committee on Fair Wages, pp 13-15, paras 21 23.
38 Unichem Laboratories Ltd v The Workmen (1972) 1 LLJ 576 [LNIND 1972 SC 127] (SC), per Vaidialingam J.
39 Kamani Metals & Alloys Ltd v Workmen (1967) 2 LLJ 55 [LNIND 1967 SC 18], 59 (SC), per Hidayatullah J.
40 UK Roller Flour Mills v Industrial Court 1979 Lab IC 45, 52 (Bom) (DB), per Tulpule J.
41 Remington Rand of India Ltd v Workmen CA Nos 856, 1475 & 2119 of 1968 (1968) (SC), per Shelat J.
42 Workmen of Hindustan Motors Ltd v Mgmt. (1962) 2 LLJ 352 [LNIND 1962 SC 265], 355 (SC), per Das Gupta J.
43 French Motor Car Co Ltd v Workmen (1962) 2 LLJ 744 [LNIND 1962 SC 366] (SC), per Wanchoo J.
44 Express Newspapers Pvt Ltd v Union of India (1961) 1 LLJ 339 [LNIND 1958 SC 25], 367-68 (SC), per Bhagwati J.
45 Workmen of Jessop & Co Ltd v Jessop & Co Ltd (1964) 1 LLJ 451 [LNIND 1963 SC 179], 453 (SC), per Wanchoo J.
46 Greaves Cotton & Co Ltd v Workmen (1964) 1 LLJ 342 [LNIND 1963 SC 254], 349 (SC), per Wanchoo J.
47 Kamani Metals & Alloys Ltd v Workmen (1967) 2 LLJ 55 [LNIND 1967 SC 18], 59 (SC) : AIR 1967 SC 1175 [LNIND 1967 SC
18], per Hidayatullah J.
48 French Motor Car Co Ltd v Workmen (1962) 2 LLJ 744 [LNIND 1962 SC 366], 747 : AIR 1963 SC 1327 [LNIND 1962 SC 366],
per Wanchoo J.
49 Remington Rand of India v Workmen (1962) 1 LLJ 287 [LNIND 1962 SC 87], 292 (SC), per Gajendragadkar J.
50 Novex Dry Cleaners v Workmen (1962) 1 LLJ 271 [LNIND 1962 SC 50],273 (SC), per Gajendragadkar J.
51 Tata Chemical Ltd v Workmen 1978 Lab IC 637 [LNIND 1978 SC 113], 642 (SC), per Jaswant Singh J.
52 French Motor Car Co Ltd v Workmen (1962) 2 LLJ 744 [LNIND 1962 SC 366] AIR 1963 SC 1327 [LNIND 1962 SC 366], per
Wanchoo J.
53 Williamsom (India) Pvt Ltd v Workmen (1962) 1 LLJ 302 [LNIND 1962 SC 94], 305 (SC), per Gajendragadkar J.
54 Kamani Metals & Alloys Ltd v Workmen (1967) 2 LLJ 55 [LNIND 1967 SC 18] (SC) : AIR 1967 SC 1175 [LNIND 1967 SC 18],
per Hidayatullah J.
55 Hindustan Antibiotics Ltd v Workmen (1967) 1 LLJ 114 [LNIND 1966 SC 319] (SC) : AIR 1967 SC 948 [LNIND 1966 SC 319],
per Subba Rao CJI.
56 Unichem Laboratories Ltd v Workmen (1972) 1 LLJ 576 [LNIND 1972 SC 127], 593-94 (SC), per Vaidialingam J.
57 Chandan Metal Products Pvt Ltd v Engineering Kamdar Union (1977) 2 LLJ 27 (Guj) (DB) : (1976) GLR 849, per DA Desai J.
58 Workmen of Balmer Lawrie & Co Ltd v Mgmt (1964) 1 LLJ 380 [LNIND 1963 SC 248], 385 (SC), per Gajendragadkar J.
59 Madura Coats Employees Union v GS Baj (2002) 1 LLN 925 (Bom), per Rebello J.
60 Government of India (1969), Report of NCL-I, Annexure X, p 36.
61 Ahmedabad Millowners’ Association v TLA (1966) 1 LLJ 1 [LNIND 1965 SC 185], 28 (SC), per Gajendragadkar CJI.
62 Workmen of New Egerton Woollen Mills v Mgmt (1969) 2 LLJ 782 [LNIND 1969 SC 96] (SC), per Shelat J.
63 Workmen of Hindustan Motors v Hindustan Motors (1962) 2 LLJ 352 [LNIND 1962 SC 265], 355 (SC), per Das Gupta J.

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64 Workmen of Orient Paper Mills Ltd v Orient Paper Mills Ltd (1964) 1 LLJ 342 [LNIND 1963 SC 254], 346 (SC) : AIR 1964 SC
689 [LNIND 1963 SC 254]: [1964] (8) FLR 100, per Wanchoo J.
65 Anil Starch Products Ltd v Industrial Court (1965) 2 LLJ 441, 450 (Guj) (DB), per Shelat CJ.
66 Workmen of OPM Ltd v Orient Paper Mills Ltd (1969) 2 LLJ 398 [LNIND 1968 SC 205] (SC) : AIR 1969 SC 976 [LNIND 1968
SC 205]: [1969] 1 SCR 666 [LNIND 1968 SC 205], per Bhargava J.
67 Tata Chemicals Ltd v Workmen (1969) 2 LLJ 782 [LNIND 1969 SC 96] (SC).
68 1978 Lab IC 637 [LNIND 1978 SC 113], 643-44 (SC), per Jaswant Singh J.
69 Food Corpn of India Workers’ Union, v FCI 1990 Lab IC 1919 (SC), per SC Agarwal J.
70 Industrial Workers Union v HT Products Ltd (1991) 1 LLJ 343 [LNIND 1990 BOM 62], 348 (Bom) : [1990 (60) FLR 655 ], per
Mehta J.
71 Randhir Singh v Union of India (1982) 1 LLJ 344 [LNIND 1982 SC 52]-45 (SC), per Chinnappa Reddy J.
72 State of AP v G Sreenivasa Rao (1989) 2 LLJ 149 [LNIND 1989 SC 151] (SC) : 1989 (1) SCALE 627 : (1989) 2 SCC 290 [LNIND
1989 SC 857] : [1989] 1 SCR 1000 [LNIND 1989 SC 857], per Kuldip Singh J.
73 Krish Kalyan Kendra Workers Union v Union of India (1991) 1 LLJ 349 [LNIND 1991 SC 10], 352 (SC).
74 Mackinnon Mackenzie & Co Ltd v Audrey D’Costa (1987) 1 LLJ 536 (SC) : AIR 1987 SC 1281 : (1987) 2 SCC 469 : [1987] 2 SCR
659, per Venkataramiah J.
75 Randhir Singh v Union of India (1982) 1 LLJ 344 [LNIND 1982 SC 52]-45 (SC) : AIR 1982 SC 879 [LNIND 1982 SC 52]: 1982
(1) SCALE 110 [LNIND 1982 SC 52] : (1982) 1 SCC 618 [LNIND 1982 SC 52], per Chinnappa Reddy J.
76 Delhi Veterinary Assn v Union of India AIR 1984 SC 1221 [LNIND 1984 SC 109], 1223 : 1984 Lab IC 860 : 1984 (1) SCALE 663
[LNIND 1984 SC 109] : (1984) 3 SCC 1 [LNIND 1984 SC 109].
77 State of Uttar Pradesh v JP Chaurasia (1989) 1 LLJ 309 [LNIND 1988 SC 496], 315 (SC) : AIR 1974 SC 753 : 1974 Cr LJ 625 :
(1974) 4 SCC 471, per Jagannatha Shetty J.
78 State of Madhya Pradesh v Pramod Bhartiya (1993) 1 LLJ 490 [LNIND 1992 SC 681] (SC) : AIR 1993 SC 286 [LNIND 1992 SC
681]: (1993) 1 SCC 539 [LNIND 1992 SC 681], per Jeevan Reddy J.
79 Shyam Babu Verma v Union of India (1994) 1 LLJ 815 -16 (SC) : (1994) 2 SCC 521 [LNIND 1994 SC 178] : [1994] 1 SCR 700
[LNIND 1994 SC 178], per NP Singh J.
80 State of West Bengal v Hari Narayan Bhowal (1995) 2 LLJ 328, 332 (SC) : (1994) 4 SCC 78 : [1994] 3 SCR 24,, per NP Singh J.
81 State of Mysore v B Basavalingappa AIR 1987 SC 411 [LNIND 1986 SC 521]-12 : (1994) III LLJ 771(SC) : 1986 (2) SCALE
1095 : 1986 Supp (1) SCC 661, per Oza J.
82 Supreme Court Employees Welfare Assn v Union of India (1989) 2 LLJ 506 [LNIND 1989 SC 351], 519 (SC) : AIR 1990 SC 334
[LNIND 1989 SC 351]: (1989) 4 SCC 187 [LNIND 1989 SC 351], per MM Dutt J.
83 Federation of AIC&CE Stenographers v Union of India 1989 Lab IC 1157 (SC), per Sabyasachi Mukharji J.
84 State of West Bengal v Deb Kumar Mukherjee (1995) 2 LLJ 694 [LNIND 1995 SC 419] (SC) : AIR 1995 SC 1889 [LNIND 1995
SC 419]: [1995] 2 SCR 1122 [LNIND 1995 SC 419] : 1995 (3) JT 333 [LNIND 1995 SC 419] : 1995 (2) SCALE 430 [LNIND
1995 SC 419] : 1995 (2) SCJ 112, per Kuldip Singh J.
85 Grih Kalyan Kendra Workers’ Union v Union of India (1991) 1 LLJ 349 [LNIND 1991 SC 10], 352 (SC) : AIR 1991 SC 1173
[LNIND 1991 SC 894]: 1991 (1) SCALE 1 : (1991) 1 SCC 619 [LNIND 1991 SC 894].
86 JN Misra v State of Uttar Pradesh (1991) 1 LLJ 223 (All) (DB), per UC Srivasraya J.
87 Tirumala Tirupati Devasthanam v LA Ramaswamy (1994) 2 LLJ 357 [LNIND 1993 SC 441] (SC) :: 1995 (7) SLR 731 : 1994 (27)
ATC 75.
88 KS Mahalingegowda v Secy to Govt (1995) 2 LLJ 699, 701-2 (SC) : 1994 (Supp-5) SCR 476 : 1995 (Supp-2) SCC 95, per Kuldip
Singh J.
89 Purna Chandm Nanda v State of Orissa (1996) 2 LLJ 638 (SC) : AIR 1997 SC 7 : 1996 (Supp-2) SCR 235 : 1996 (9) SCC 221.
90 Fertilizer Corpn of India Ltd v Sarat Chandra Rath (1996) 2 LLJ 913 [LNIND 1996 SC 1312], 918 (SC) : AIR 1996 SC 2744
[LNIND 1996 SC 1312]: 1996 (Supp-5) SCR 90 :: (1996) 10 SCC 331 [LNIND 1996 SC 1312], per Kirpal J.
91 State of UP v Ramashraya Yadav (1996) 2 LLJ 92 [LNIND 1996 SC 382], 94 (SC) : AIR 1996 SC 1188 [LNIND 1996 SC 382]:
[1996] 2 SCR 707 [LNIND 1996 SC 382] : (1996) 3 SCC 332 [LNIND 1996 SC 382], per GB Pattanaik J.
92 Prem Singh Soda v State of Rajasthan 1996 Lab IC 1469 (Raj), per NK Jain J.
93 MP Singh v Union of India AIR 1987 SC 485 [LNIND 1987 SC 57], 489 : (1987) 1 SCC 592 [LNIND 1987 SC 57] : [1987] 1
SCR 1014 [LNIND 1987 SC 57], per Venkataramiah J.

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94 Employees of T&FW Corpn of India v Union of India (1991) 1 LLJ 563 [LNIND 1990 SC 777] (SC) : AIR 1991 SC 1367 [LNIND
1990 SC 777]: 1991 Supp (2) SCC 565, per SC Agarwal J.
95 R Kumar v State of Tamil Nadu (1996) 2 LLJ 1 [LNIND 1996 MAD 61] (Mad) : (1996) I MLJ 393, per Lakshmanan J.
96 GKrishna Rao v State of Andhra Pradesh 1996 Lab IC 1223 (AP), per G Bhikshapathy J.
1 Balo Rai v State of Bihar 1996 Lab IC 2100 (Pat), per Ashok Kumar Ganguly J.
2 T Krishnan Unni v Chairman and Managing Director (1996) 2 LLJ 1072, 1081-82 (Ker), per DJ Jagannadha Raju J.
3 MS Pandiva v State of Cujamt (1997) 2 LLJ 89 (Guj) : (1996) 2 GLH 1043 : (1997) 1 GLR 647, per Parikh J.
4 Express Newspapers Pvt Ltd v Union of India (1961) 1 LLJ 339 [LNIND 1958 SC 25], 364 (SC), per Bhagwati J.
5 Ibid, p 367.
6 Tata Consulting Engineers v Workmen 1981 Lab IC 594 [LNIND 1980 SC 453], 603 (SC), per Chinnappa Reddy J.
7 Bijli Mazdoor v Uttar Pradesh Electric Co (1952) LAC 475,482 (LAT).
8 Hindustan Lever Ltd v Workmen CA Nos 1779-80 of 1967 (20-2-1968) (SC), per Hegde J.
9 Workmen of NTC of India Ltd v NTC of India Ltd CA No 852 of 1966 (1968) (SC), per Bhargava J.
10 Ibid.
11 French Motor Car Co Ltd v Workmen (1962) 2 LLJ 744 [LNIND 1962 SC 366] (SC) : AIR 1963 SC 1327 [LNIND 1962 SC 366]:
1963 (6) FLR 80 per Wanchoo J.
12 Hindustan Times Ltd v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431], 120 (SC) : AIR 1963 SC 1332 [LNIND 1962 SC 451]:
1963 (6) FLR 313, per Das Gupta J.
13 Greaves Cotton & Co Ltd v Workmen (1964) 1 LLJ 342 [LNIND 1963 SC 254], 350 (SC) : AIR 1964 SC 689 [LNIND 1963 SC
254]: 1964 (8) FLR 100 : [1964] 5 SCR 362 [LNIND 1963 SC 254], per Wanchoo J.
14 Gramophone Co Ltd v Workmen (1964) 2 LLJ 131 [LNIND 1964 SC 114] (SC), per Wanchoo J.
15 Calcutta Insurance Ltd v Workmen (1967) 2 LLJ 1 [LNIND 1967 SC 36], 6-8 (SC) : AIR 1967 SC 1286 [LNIND 1967 SC 36]:
1967 (14) FLR 345, per Mitter J.
16 Workmen of NTC of India Ltd v NTC of India CA No 852 of 1966 (1968) (SC), per Bhargava J.
17 Indian Link Chain Mfrs. Ltd v Workmen (1971) 2 LLJ 581 [LNIND 1971 SC 479], 589-91 (SC) : AIR 1972 SC 343 [LNIND 1971
SC 479]: 1972 Lab IC 200 : (1971) 2 SCC 759 [LNIND 1971 SC 479], per Jaganmohan Reddy J.
18 Ganganagar Sugar Mills Ltd v IT 1970 Lab IC 479, 483 (Raj), per Tyagi J.
19 Indian Oxygen Ltd v Workmen (1963) 2 LLJ 83 [LNIND 1962 SC 405] (SC), per Wanchoo J.
20 Indian Hume Pipe Co Ltd v Workmen (1964) 1 LLJ 412 [LNIND 1963 SC 173] (SC), per Gajendragadkar J.
21 Greaves Cotton & Co Ltd v Workmen (1964) 1 LLJ 342 [LNIND 1963 SC 254], 347-48 (SC) : AIR 1964 SC 689 [LNIND 1963
SC 254]: 1964 (8) FLR 100 per Wanchoo J.
22 Hindustan Hosiery Industries v FH Lala (1974) 1 LLJ 340 [LNIND 1974 SC 33], 347-80 (SC), per Goswami J.
23 British India Corpn Ltd v PO, IT 1989 Lab IC 716, 719-11 (All), per RR Misra J.
24 Dunlop Rubber Co (India) Ltd v Workmen (1959) 2 LLJ 826 [LNIND 1959 SC 186]-28 (SC) : AIR 1960 SC 207 [LNIND 1959 SC
186], per Wanchoo J.
25 Alembic Chemical Works Co Ltd v Workmen (1961) 1 LLJ 328 [LNIND 1960 SC 348], 332 (SC) : AIR 1961 SC 647 [LNIND
1960 SC 348],, per Gajendragadkar J.
26 Birla Cotton, Spg & Wvg Mills Ltd v Workmen (1962) 1 LLJ 642 (SC), per Wanchoo J.
27 Delhi Cloth & Gen Mills Co Ltd v Workmen (1964) 1 LLJ 55 (SC), per Das Gupta J.
28 Mgmt of National & Grindlays Bank Ltd v Workmen 1971 Lab IC 1491 [LNIND 1971 SC 341] (SC), per Jaganmohan Reddy J.
29 Workmen of Balmer Lawrie & Co Ltd v Mgmt (1964) 1 LLJ 380 [LNIND 1963 SC 248] (SC), per Gajendragadkar J.
30 National Insurance Co Ltd v Workmen CA No 693 and 841 of 1966 (1968) (SC), per Shelat J.
31 Radha Krishna Umbrella Factory v IT 1971 Lab I C 811, 814 (Ker), per Isaac J.
32 Workmen of NEW Mills Ltd v New Egerton Woollen Mills Ltd (1969) 2 LLJ 782 [LNIND 1969 SC 96], 789-91, per Shelat J.
33 Ahmedabad Millowners’ Assn v TLA (1966) 1 LLJ 1 [LNIND 1965 SC 185], 29 (SC), per Gajendragadkar CJI.

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34 Crown Aluminium Works Ltd v Workmen (1958) 1 LLJ 1 [LNIND 1957 SC 106], 7 (SC) : AIR 1958 SC 30 [LNIND 1957 SC
106]: [1958] 1 SCR 651 [LNIND 1957 SC 106] :, per Gajendragadkar J.
35 Workmen of Indian Hume Pipe Co Ltd v Indian Hume Pipe Co. Ltd. (1986) 1 LLJ 520 [LNIND 1986 SC 122], 529 (SC) : AIR 1986
SC 1794 [LNIND 1986 SC 122]: 1986 Lab IC 1644 : 1986 (1) SCALE 1217 :, 1986 Supp (1) SCC 79, per Khalid J.
36 Workmen v Raptakos Brett & Co Ltd 1992 Lab IC 289, 297-98 (SC), per Kuldip Singh J.
37 Workmen of NEW Mills v New Egerton Woollen Mills (1969) 2 LLJ 782 [LNIND 1969 SC 96], 791 (SC), per Shelat J.
38 Hindustan Times Ltd v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431], 120 (SC) : AIR 1963 SC 1332 [LNIND 1962 SC 451]:,
per Das Gupta J.
39 Prabhulal Patiram & Co v IT (1966) 2 LLJ 206, 210 (MP) (DB) :: 1965 MPLJ 781 [LNIND 1964 MP 53], per Dixit CJ.
40 Lipton Ltd v Employees (1959) 1 LLJ 431 [LNIND 1959 SC 14] (SC) : AIR 1959 SC 676 [LNIND 1959 SC 14], per SK Das J.
41 United Collieries Ltd v Workmen (1961) 2 LLJ 75 (SC), per Wanchoo J.
42 Hydro (Engineers) Pvt Ltd v Workmen (1969) 1 LLJ 713 [LNIND 1968 SC 133] (SC) :, AIR 1969 SC 182 [LNIND 1968 SC 133]:
1969 (18) FLR189 per Shelat J.
43 Filmistan Pvt Ltd v Workmen (1972) 24 FLR l (SC), per Vaidialingam J, (1971) 40 FJR 479.

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER I Preliminary

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER I Preliminary

S. 2. Definitions.—

Burden of Proof and Procedure

Burden of Proof

It is open to an employer or establishment, to plead a financial inability to implement the burden of the increased wage-
structure. On such a plea being taken, the tribunal would frame a specific issue. But the burden of proof, to show that he
has no financial capacity to stand the burden imposed upon him, would be upon the employee.44 The employer knows his
financial position best and the conclusive proof of that may be the balance sheet, which normally is in his possession. In
other words, what the financial position of a company is, is within the special knowledge of the company and the burden of
proof, consequently, to show that it has no financial capacity to stand the burden imposed upon it, would be upon it.45 It is,
therefore, for the employer to show what his financial position is, and how it is going to place an undue or impossible
burden upon him, to implement the demanded wage. Of course, the justification of the plea of a want of financial capacity,
will depend upon the evidence of the financial position of the employer or the unit, as the case may be, over a period of
years, showing that it cannot bear the burden, or that it is only a temporary or fortuitous situation, with every possibility of
a financial improvement in the immediate future. The determination of the wage-structure by the tribunal will be, on the
evidence produced before it, according to the financial capacity of the employer or the unit. Once this is finally
determined, the employer or the unit cannot continue to assert that it has no financial capacity to implement the award.46

Procedure

Even where the wages are to be fixed on the industry-cum-region basis, it is open to the industry to plead that it has not got
the financial capacity to bear the increased burden.47 When such a plea is specifically raised, it is the duty of the tribunal to
determine whether the increased burden could be borne by the particular industry. It is incumbent upon the tribunal to give
a real and effective opportunity to the employer, to establish his case, where he has pleaded and sought to prove that the
increase in the existing rates of wages, is beyond his financial capacity to bear.48 Before fixing a wage structure, the
tribunal must examine the financial position of the employer. In a controversy between the parties, regarding the question
of financial capacity, the tribunal is bound to record a finding as to whether the employer is so capable. It is only on being
satisfied, that the employer is financially capable of bearing the burden, that the tribunal would be justified in awarding
increased wages. An award, imposing an additional burden, in the shape of increased wages, without giving a definite
finding as to the financial capacity, would be improper.49 In Cochin State Power, where the tribunal, despite its conclusion
that in view of the higher rate of dearness allowance paid to them, the workmen could not claim higher wage scales than
those prevalent in another similar concern, where dearness allowance at a lower rate was paid to the workmen, fixed wage-
scales higher in some respects, than those prevailing in the other concerns, the Supreme Court set aside the award of the
tribunal in this respect and remanded the case for reconsideration.50 Similarly, where the tribunal directed an ad hoc
increase in the piece rate wages, on the ground that the wages were fixed some 10 years ago, without considering other
relevant factors, including the capacity of the employer to bear the burden of the proposed increase, the award was quashed
in writ proceedings and the tribunal was directed to consider the issue in its proper perspective.51 Where the tribunal did
not consider the financial capacity of various major concerns of managing agency companies, for fixing the wage scales or
dearness allowance, Sinha J of Calcutta High Court quashed the award on the ground that, in the absence of a reference to
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the financial capacity of the companies to pay, the determination of wage scales was not proper.52 Where the wage board
did not consider the financial capacity of a particular jute mill, but recommended certain scales of wages and dearness
allowance on the basis of some large jute mills in another part of the country, it was held that the approach of the wage
board determining uniform wage scales and dearness allowance for the entire jute industry suffered from an inherent
weakness and a manifest error.53

Clause (s): WORKMAN

Evolution of the Concept

Origin and Evolution

section 2(k) of the repealed Trade Disputes Act 1929, contained the definition of ‘workman’. In the Industrial Disputes Act
1947, the definition of ‘workman’, as originally enacted in s 2(s), was as follows:

‘Workman’ means any person employed (including an apprentice) in any industry, to do any skilled manual or clerical work, for
hire or reward and includes, for the purpose of any proceedings under this Act, in relation to an industrial dispute, a workman
discharged during that dispute, but does not include any person employed in the naval, military or air service of the Crown.

This clause underwent changes in the course of amendments, the latest being the 2010 amendment. The NCL-II
recommended the gender-neutral expression ‘worker’, instead of ‘workman’, that is currently found in the Industrial
Disputes Act and certain other Acts.54 In Ganeshi Lal, Pasayat J (for self and Sathasivam J) held that a peon, who is
engaged on daily wages and attached to the public prosecutor, is not a workman, as the Law Department of the
Government can by no stretch of imagination be considered to be an industry within the meaning of the Act.55

Ingredients of the Definition of ‘Workman’

The ingredients of the definition of a ‘workman’ may be treated under the following heads:

Any Person Employed... but does not Include any Such person

The definition of a ‘workman’ in s 2(s), in connection with persons employed in an industry, falls in three parts. The first
part of the definition gives the statutory meaning of a workman. This part of the definition determines a workman by
reference to a person (including an apprentice) employed in an ‘industry’, to do any manual unskilled, skilled, technical,
operational, clerical or supervisory work, for hire or reward.56 This part determines what a ‘workman’ means. This is the
signification or denotation of the word or what the word denotes. The second part is designed to include something more in
what the term primarily denotes. By this part of the definition, persons who have been dismissed, discharged or retrenched
in connection with an industrial dispute, or whose dismissal, discharge or retrenchment has led to an industrial dispute; for
the purposes of any proceedings under the Act in relation to such industrial dispute, have been included in the definition of
workman. This part gives an extended connotation to the expression workman. The third part specifically excludes the
categories of the persons specified in cll (i) to (iv) of this subsection. The third part connotes that even if a person satisfies
the requirements of any of the first two parts, but if he falls short in any of the four categories in the third part, he shall be
excluded from the definition of workman. The first part brings in the concept of the contract of employment between the
employer of an industrial establishment and the employee. Unless there is a contract of employment between the two or, in
other words, there is a relationship of employer and employee between them, the definition of a ‘workman’ will not come
into play. But once the relationship of employment is established, its duration would not be material. Even a temporary or
casual, employee would fall within the ambit of this part of the definition of workman. 57 In Hutchaih, a single judge of
Karnataka High Court held that the definition does not state that a person, in order to be a workman, should have been
employed in a substantive capacity or on a temporary basis in the first instance, or after he is found suitable for the job,
after a period of probation. In other words, every person employed in an industry, irrespective of his status-be it temporary,
permanent or of a probationer-would be a workman.58 In SK Verma, the Supreme Court held that a ‘development officer’
of the Life Insurance Corporation of India, was a workman.59

However, the court did not indicate as to under what rubric, the duties of a ‘development officer’ would fall and proceeded
on a pragmatic, rather than a pedantic approach of construction, that the entire labour force should be included in the
definition, while the managerial-force should be excluded. The Gujarat High Court held that a badli workman will fall
within the definition of a workman.60 The Rajasthan High Court held that a telephone operator, who does not fall in any of
the exceptions contained in the definition is a workman.61From the words used in the definition, it is clear that not only the
persons who are actually employed in an industry, but also those who have been discharged, dismissed or retrenched in
connection with or as a consequence of an industrial dispute; and whose dismissal, discharge or retrenchment has led to

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that dispute, would fall within its ambit. But the inclusive part of the definition in s 2(s), talks of any proceedings under
this Act in relation to a ‘industrial dispute.’ In other words, the second category of persons included in the definition,
would fall in the ambit of the definition, only for the purposes of any proceedings under this Act, in relation to an
‘industrial dispute’ and for no other purpose.62 For determining the question as to whether an employee is a workman or
not, it is the date of reference that is relevant. What is, therefore, to be seen is whether on the date of the reference, there
was any dispute in respect of the workman, which could be referred for adjudication to the tribunal. Hence, once a tribunal
is vested with the jurisdiction to entertain the dispute which is validly referred to it, does not cease to continue that
jurisdiction merely because subsequently, the workman ceases to be a workman.63 A daily wager is a workman entitled to
the protection of s 25F.64 In Kamyani Vidya Mandir, the facts disclosed that it was an educational institution imparting
training to the mentally challenged children. The dominant purpose of hiring employees by the institution was only to train
the mentally challenged children and to look after them. The respondent in this case was a ‘teacher’ engaged on a
temporary basis from August 1992 to April 1993. Her service was terminated resulting in an industrial dispute. While
holding that she was not a ‘workman’ within the meaning of s 2(s), the Bombay High Court observed that the articles were
made by children together with the teachers; the mentally challenged persons were not paid money for the products which
they were trained to manufacture; and that in these circumstances, there was neither employer-employee relationship nor
any systematic activity for the production of goods.65

Apprentice

The expression ‘apprentice’ has not been defined in the Act. In the Shorter Oxford Dictionary, an ‘apprentice’ has been
defined as a ‘learner of a craft; one who is bound by a legal agreement to serve an employer for a period of years, with a
view to learn some handicraft, trade, etc, in which the employer is reciprocally bound to instruct him.’ In the Chambers
Dictionary, to serve apprenticeship means ‘to undergo training of an apprentice’. Stroud’s Judicial Dictionary defines an
‘apprentice’ as ‘a person bound to another for the purpose of learning his trade or calling; the contract being of nature that
the master teaches and the other serves a master with the intention of learning’.66 According to Halsbury’s Laws of
England,67 under the contract of apprenticeship, ‘the apprentice is bound to serve a master faithfully, in a trade or business,
for an agreed period and the master undertakes to give the apprentice instruction in it and either to maintain him or pay his
wages’. In other words, by ‘the contract of apprenticeship’, a person is bound to another for the purpose of learning the
trade or calling, the apprentice undertakes to serve the master for the purpose of being taught and the master undertakes to
teach him.68 In the language of Goswami J:

... the heart of the matter in apprenticeship is, therefore, the dominant object and intent to impart on the part of the employer and to
accept on the part of the other person learning, under certain agreed terms. That certain payment is made during the apprenticeship,
by whatever name called, and that the apprentice has to be under certain rules of discipline, do not convert the ‘apprentice’ to a
regular employee under the employer. Such a person remains a learner and is not an employee.69

Thus, the contract of apprenticeship accentuates teaching on the part of the master and learning on the part of the
apprentice, as the primary object of the ‘contract of apprenticeship’. Where, therefore, this object is only ancillary and not
primary, the contract is one of service, rather than that of ‘apprenticeship’. In s 2(s) of the Industrial Disputes Act 1947, an
‘apprentice’ has specifically been included in the definition of ‘workman’ but in the subsequent legislation,viz, the
Apprentices Act 1961 (Act No 52 of 1961), s 2 (aa) defines the term ‘apprentice’ to mean ‘a person who is undergoing
‘apprenticeship’ training in a designated trade in pursuance of a contract of apprenticeship’ and s 18 of that Act further
provides thus:

S. 18. Apprentices are trainees and not workers.—Save as otherwise provided in this Act—

(a) every ‘apprentice’ undertaking apprenticeship training in a designated trade in an establishment shall be a trainee and not
a worker, and
(b) the provisions of any law with respect to labour shall not apply to or in relation to such apprentice.

Statutory vs Non-Statutory Apprentice - Legal Status and Distinction

A few questions that engaged the attention of courts were:

(i) what is the legal status of statutory apprentices engaged under Apprentice Act 1961?

(ii) do they have the right to absorption in the regular services of the employer?

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(iii) what are the legal consequences of engaging statutory apprentices without executing the contract of apprenticeship as
required under the Act? and
(iv) what are the effects of continuing a statutory apprentice as such, after the expiry of the period stipulated in the contract?

A survey of the decisions rendered by High Courts and the Supreme Court unfolds a disturbing trend, in that the learned
judges across-the-board, have failed to come to grips with the expressions ‘apprentice’ and ‘trainee’ as well as in
distinguishing a ‘statutory apprentice’ from a ‘non-statutory apprentice/trainee’. In the result, it has to be stated, with great
respect, court decisions in this regard have been consistently wrong. These expressions appear in several enactments
including the Apprentices Act 1961 and Industrial Disputes Act 1947. Before going into the judgments properly, it is
worthwhile to take a look at the origin and evolution of the expressions ‘apprentice’ and ‘trainee’ in the Indian context.
Leaving the above enactments aside for a moment, it is important to recognise the fact that the words ‘apprentice’ and
‘trainee’ have been in use not only in the industrial context, but also in other professions such as law and medicine. The
Industrial Disputes Act, which is an earlier law (1947) defines ‘workman’ in s 2(s),inter alia, as any person including an
‘apprentice’. The Model Standing Orders framed by the Central and State Governments under the Industrial Employment
(Standing Orders) Act 1946 (IESOA 1946) recognise ‘apprentice/trainee’ as one of the classes of workmen alongside
casual, temporary, probationer, etc. At the time when IESOA and IDA were enacted, there was no Apprentices Act, which
took birth some 14 years later in 1961. It is not in dispute that prior to 1961 there was nothing like a ‘statutory apprentice’
and no employer was required to engage a given number of apprentices for imparting training under the National
Employment and Training Policy. Prior to 1961, industrial employers did engage trainees or apprentices under their own
training schemes for imparting training in several trades and occupations before regularising or confirming them as
permanent workmen. It is also conceded that such company-specific training programmes continued, and are continuing,
even after the enactment of Apprentices Act 1961.

The Apprentices Act 1961 requires industrial employers to engage certificate holders in different trades such as turners,
fitters, electricians, welders, etc, through the auspices of the State or Central Apprenticeship Advisers for a specific period
ranging from one year to 18 months and impart training. The number of apprentices is determined as a proportion to the
number of permanent employees engaged in each trade. The Act requires that the apprentices should be sponsored by the
Apprenticeship Adviser and the contracts of apprenticeship should be registered with the Apprenticeship Adviser, who
represents the government. This mandatory requirement goes to establish that in the absence of registration of the contract
of apprenticeship, the apprentice or trainee ceases to be a ‘statutory’ apprentice and becomes a non-statutory or voluntary
apprentice. The stipend paid by the employer to the apprentices is partly reimbursed by the government in certain classes
of establishments subject to certain conditions. Most importantly, the Act does not impose any obligation on the employer
either to absorb the apprentices in his organisation after the completion of training or even to give preferential treatment to
them while recruiting permanent employees in any of the trades. Section 18 of the Apprentices Act stipulates that the
‘apprentices are trainees and not workers’, and further states that the ‘provisions of any law with respect to labour shall
not apply to or in relation to such apprentice’. It is significant to note that the said section used both the expressions
‘apprentice’ and ‘trainee’, interchangeably, to mean the same thing, and distinguished both of them from ‘worker’. The
question then is: what is meant by the expression ‘such apprentice’ appearing in the last part of cl (b) of s 18 ? Should it
be taken to mean ‘any apprentice or trainee engaged under any scheme of whatsoever nature’ or should it be confined to
‘such of those apprentices or trainees, who have been specifically sponsored by, and whose contracts of apprenticeship
have been registered with, the Apprenticeship Adviser in accordance with the provisions of the Apprentices Act 1961’?
The answer to the question is decided in favour of the latter, and does not present any difficulties. Reverting to the
controversy, till the Apprentices Act was enacted there was no confusion with regard to the legal status of an apprentice or
trainee because of the inclusion of the term ‘apprentice’ in the definition of workman in s 2(s) of IDA. Moreover, till 1961
there was no need for differentiating an ‘apprentice’ from a ‘statutory apprentice’, in the light of the fact that there was
only one class ie, the former to the exclusion of ‘statutory apprentice’.

While a ‘statutory apprentice’ is governed by the provisions of the Apprentices Act, an (non-statutory) apprentice or
trainee simpliciter is governed by individual contracts and/or standing orders. Again, the pre-fixes ‘statutory’ and ‘non-
statutory’ came to be used only after the enactment of the Apprentices Act 1961, and not before, with the ostensible
purpose of distinguishing the one class from the other. The service of a ‘non-statutory’ apprentice/ trainee can be
terminated at any time during the period of apprenticeship/training without assigning any reason and without notice or
compensation in lieu thereof, whereas the contract of apprenticeship of a ‘statutory’ apprentice cannot be terminated before
the expiry of the period, without the written permission from the Apprenticeship Adviser, as provided in sub-ss (2) and (3)
of s 7 of the Act. A ‘statutory apprentice’ or ‘statutory trainee’ engaged under the Apprentices Act is manifestly outside the
ambit of labour laws in terms of s 18, whereas a non-statutory apprentice or trainee is governed by all the labour laws like
any other ‘workman’ or ‘employee’ or ‘worker’, as the case may be.70It is relevant to note that the word ‘apprentice’ as
defined in s 2(aa) of the Apprentices Act 1961 shall only be a trainee and not a ‘worker’ and the provisions of ‘any law
with respect to labour’ shall not apply to or in relation to him. The employees under various labour laws have been defined

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by different expressions. For instance, in the Factories Act, the expression ‘worker’ has been used; in the Employees’ State
Insurance Act 1948, the expression’ employee’ has been used while in s 2(s) of the Industrial Disputes Act, the expression
‘workman’ has been used, which means ‘any person (including an apprentice) employed in any industry...’.

In TELCO, after considering the scheme of the Apprentices Act 1961, particularly the definition of ‘apprentice’ in s 2(aa)
and the provisions of s 18 of that Act and the definition of ‘employee’ in s 2(9) of the Employees’ State Insurance Act
1948, the Supreme Court held that an ‘apprentice’ is not an ‘employee’ as defined in the Employees’ State Insurance Act.
In order to buttress its decision, the court made a significant observation that if the legislature intended to enlarge the
definition of the word ‘employee’ in s 2(9) of the ESI Act, it could have included the word ‘apprentice’ in it, as has been
done in s 2(s) of the Industrial Disputes Act. Such a deliberate omission on the part of the legislature can be attributed only
to the well-known concept of ‘apprenticeship’ which the legislature assumed and took note of for the purpose of the Act.
That is not to say that if the legislature intended, it could not have enlarged the definition of the word ‘employee’ even to
include an ‘apprentice’, but the legislature did not choose to do so.71 In Hanuman Choudhary, the question whether an
‘apprentice’ in view of the definition of ‘apprentice’ in s 2(aa) and the provisions of s 18 of the Apprentices Act 1961, will
not be a‘workman’ as defined in s 2(s) of the Industrial Disputes Act despite having specifically been included in the
definition, came before a single judge of the Rajasthan High Court. In this case, referring to the observations of the
Supreme Court in connection with the inclusive definition of ‘workman’ contained in s 2(s) of the Industrial Disputes Act,
the court pointed out that the Supreme Court had not considered the definition of ‘workman’ in s 2(s) of the Industrial
Disputes Act in conjunction with the provisions of s 18 of the Apprentices Act 1961 as in that case it was primarily
concerned with the question as to whether an apprentice could be regarded as an employee under s 2(9) of the Employees
State Insurance Act 1948. Therefore, that decision ‘cannot be read as laying down that in spite of the provisions of s 18 of
the Apprentices Act, an ‘apprentice’ governed by the Apprentices Act is to be treated as a ‘workman’ under s 2 (s) of the
Industrial Dispute Act. The court, therefore, held that an ‘apprentice’ governed by the Apprentices Act is not a ‘workman’
for the purpose of the Industrial Disputes Act and the provisions of the Industrial Disputes Act would not be applicable to
him.72

In coming to the above conclusion, it gave a two-fold reason. Firstly, that the Apprentices Act is not an exhaustive Act to
cover all types of apprentices as it is applicable only to ‘apprentices’ undergoing ‘apprenticeship training’ in pursuance of
the contract executed under s 4 of that Act. There may be persons, though engaged as ‘apprentices’ but not covered by that
Act. Hence, such ‘apprentices’ would fall within the definition of ‘workman’ in s 2(s) of the Act and would be governed
by its provisions. Secondly, the Industrial Disputes Act is a general law applicable to all categories of workmen whereas
the Apprentices Act is a particular law enacted with special reference to ‘apprentices’ postulated by that Act. The
definition of ‘workman’ in s 2(s) of the Industrial Disputes Act was enacted in 1956 prior to the enactment of the
Apprentices Act in 1961. The provisions of s 18 of the Apprentices Act would, therefore, prevail over the provisions
contained in s 2(s) of the Industrial Disputes Act relating to ‘apprentices’ and an ‘apprentice’ as defined in that Act cannot
be regarded as a ‘workman’ under s 2(s) of the Industrial Disputes Act. This holding of the single Judge of the Rajasthan
High Court is not correct law because the first reason given by him truncates while the second reason completely castrates
the definition of ‘workman’ in s 2(s) of the Industrial Disputes Act insofar as it relates to ‘apprentices’. It is submitted that
the doctrine of ‘implied repeal’ is not applicable as the two enactments,viz, the Industrial Disputes Act 1947 and the
Apprentices Act 1961 do not occupy the same field nor does the latter lay down an exhaustive Code in respect of the
subject-matter replacing the former law.73Furthermore, it is well established law that while construing and applying
welfare statutes, the welfare of the weaker party, particularly the working class, should be protected. It is also noteworthy
that s 18 of the Apprentices Act uses the word ‘worker’ while the definition in s 2(s) of the Industrial Disputes Act uses the
word ‘workman’ which specifically includes an ‘apprentice’ and these are two different concepts. Therefore, the word
‘apprentice’ in the definition of ‘workman’ in s 2(s) of this Act cannot be abrogated by the general language of s 18 of the
Apprentices Act.

In view of the provisions of s 22 of the Apprentices Act, it is not obligatory on the part of the employer to offer any
employment to an apprentice who has completed the period of his ‘apprenticeship’ training in his establishment nor is it
obligatory on the part of the apprentice to accept employment under the employer, where such apprentice is covered by
that Act. This provision is however, subject to the non-obstante clause in s 22(2) which leaves no doubt that despite the
provisions contained in sub-s (1), the employer is under an obligation to offer suitable employment to the apprentice if the
‘contract of apprenticeship’ contains a condition that the apprentice shall serve the employer after the successful
completion of the training. A priori, when such an offer is made, the apprentice on his part is bound to serve the employer
in the capacity in which he was working as an apprentice. In Narinder Kumar, on the construction of the relevant clause in
the contract of apprenticeship to the effect that the apprentice ‘shall be absorbed in the department if there are vacancies’
and the general text of the contract, the Supreme Court held that it created a reciprocal obligation on both the parties as ‘it
binds the employer to offer the employment to the apprentice (if there is a vacancy) and equally, it binds the ‘apprentice’ to
accept the offer’ because the object of this provision is to guarantee to the extent of the existence of vacancies that the
apprentices will not be rendered jobless after they complete their training. In order to be a workman under s 2(s) of the

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Industrial Disputes Act, it has to be established that the apprentice is not covered by the provisions of the Apprentices Act.
Even if he is such an apprentice, he has further to establish that he is employed in the establishment.74 In other words, any
person, whether he is an apprentice or not, can be regarded as a ‘workman’ only if he is employed in that establishment to
do any work of the nature contemplated in the definition. It is not enough to establish that the person claiming such a status
is an ‘apprentice’.75

In Patel Somnath,76 the idea of engaging apprentices for one year in this case was to give them practical training for one
year. The contract of apprenticeship specifically mentioned the period of one year, specifically stipulating that at the expiry
of one year, the services of the apprentices shall be treated as terminated. In view of this contractual situation, a single
Judge of the Gujarat High Court held that the apprentice was not entitled to any allowance allowed to regular employees.
In Abdul Aziz,77 the period of apprenticeship was for one year but on completion of the period of training, the apprentice
applied to the employer that his apprenticeship should be extended, but no such extension was granted by the employer.
However, he continued to work for some years. A single judge of the Rajasthan High Court held that his continuation in
work did not clothe him with any higher status than that he had at the time of entry in the apprenticeship contract. But in
Jagdish Vyas, a Division Bench of the same High Court distinguished this decision where a person appointed as an
apprentice for one year was allowed to continue in employment for more than three years without any specific order
extending the apprenticeship or otherwise and held that the employee has to be considered as a ‘workman’ entitled to the
vacant post.78 A statutory apprentice engaged after executing the contract as required under the Apprentices Act 1961, does
not become a workman merely because the period of apprenticeship was extended by five months, and there is no violation
of ss 25G & H in the event of termination of the apprenticeship contract.79 No provision of any labour law applies to an
apprentice under the Apprentices Act 1961, and an apprentice is not a workman within the meaning of s 2(s), and the
labour court has no jurisdiction to order reinstatement of an apprentice holding that his services were terminated in
violation of s 25F.80 But where an apprentice was engaged for more than 240 days after the expiry of one year of contract
period, and was terminated at the end of it, it was held that the provisions of s 25F apply and that the order of reinstatement
with full back wages passed by the labour court is justified.81 Where the employer engaged apprentices purported to be
under the Apprentices Act 1961 but did not get the apprenticeship contracts registered as required under s 4 of the said Act,
and the apprentices claimed that they continued in service beyond the maximum period allowed under the Apprentices Act
and were performing regular duties like any other workman, the labour court has jurisdiction to go into the facts and grant
appropriate relief.82

Where the UPSEB, having terminated the service of an employee designated as an ‘apprentice’ and contended that no
labour law applied to him in terms of the provisions of the Apprentices Act 1961, Vineet Saran J, of the Allahabad High
Court rejected the plea of the management on the ground that no contract of apprentice ship was registered with the
Apprenticeship Adviser nor was it shown that the employee was appointed as a trainee under a scheme framed in that
behalf. The learned judge further pointed out that the said employee was engaged on regular work in all the three shifts and
held that, in the light of these facts, he was a ‘workman’ within the meaning of s 6(z) of UPIDA.83 In another case
involving the same employer, the facts disclosed that the Board had sent the Apprentice contract of an apprentice
draftsman to the Apprenticeship Adviser, but the latter kept it pending with him without formally registering. His
apprenticeship was terminated by the Board on the completion of the period stipulated in the contract of apprenticeship.
The labour court set aside his termination on the ground that he was a ‘workman’ and that his termination without
complying with the provisions of UPIDA was illegal since he had completed 240 days service. Quashing the award of
labour court, Chauhan J, of Allahabad High Court held that the Board could not be held responsible for the failure of the
Apprenticeship Adviser in registering the contract of apprenticeship, and that person was very much an ‘apprentice’.84 It is
submitted that this case was rightly decided. In Trambak Rubber, the facts disclosed that the company terminated the
services of some 72 employees on the ground that they were ‘trainees’ and not ‘workmen’. The issue before the industrial
court was whether they were merely trainees or ‘employees’ (workmen) within the meaning of s 3(5) of the Maharashtra
Recognition of Trade Unions and Prevention of Unfair Labour Practices Act 1971 (MRTU & PULP Act 1971). The
industrial court recorded a finding that they were only ‘trainees’ and upheld their termination, which award was quashed
by the High Court. In appeal, the Supreme Court, speaking through Venkatarama Reddi J (for self and Balakrishnan J),
held that the High Court was right in setting aside the impugned award passed by the industrial court, and further observed
that the management evidently came forward with a false plea dubbing the ‘employees/workmen’ as ‘trainees’ so as to
resort to summary termination and deny them their legitimate benefits.85

In another case involving the same company, the facts were: a few workers filed a complaint alleging non-payment of
minimum wages and exploitation in the form of extended hours of work against the management. While the complaint was
pending before the industrial court, the management terminated their services. The industrial court accepted the contention
of management that the applicants were trainees and not workers, and passed an award accordingly. In a writ petition, the
High Court quashed the order of industrial court, and held that there was an error of law apparent on the face of record, and
that merely because no appointment letters were issued to the applicants they would not cease to be workmen, and ordered
reinstatement in service but without back wages.86 In Audco India, the facts were: the company terminated the service of

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an apprentice. The labour court ordered reinstatement on the ground that the management did not comply with s 25F,
which award was challenged in the High Court. Quashing the award, the Madras High Court held that even if the finding
of the labour court with regard to the status of the apprentice as a ‘workman’ was acceptable, his case would come within
the exception of sub-clause (bb) of s 2(oo), and that the labour court misdirected itself on the question of construing the
term of apprenticeship given to the second respondent as well as the effect of s 2(oo)(bb).87 In State of Haryana, the facts
briefly were: a person engaged as an ‘apprentice’ under the provisions of the Apprentices Act, was subsequently
terminated resulting in an industrial dispute, which was referred for adjudication. The labour court held that he was a
‘workman’ u/s 2(s) of the IDA and ordered reinstatement. Quashing the award, Raina J, of the Punjab and Haryana High
Court held that reading of definition of “apprentice” in ss 2(aa) and 2(r) read with s 18 of the Apprentices Act leaves
nothing to doubt that it was a special Act and could not cover workmen and the it precludes the application of any other
labour law - be it UPIDA or IDA (Central Act). That being so labour court or tribunal would not have any jurisdiction to
entertain any dispute arising therefrom, and that the award passed by the labour court cannot be sustained as it suffers from
incurable jurisdictional infirmity.88

UPSEB v SM Singh - A Landmark Decision for all the Wrong Reasons

In UP State Electricity Board v Shiv Mohan Singh , the facts disclosed that the Board did not register some of the contracts
with the Apprenticeship Adviser. The point urged before the Supreme Court was that, in view of the said breach in the face
of the mandatory requirement to register the contracts, the legal status of the said apprentices stood changed from that of
‘apprentices’ under the Apprentices Act to that of ‘workmen’ under the IDA. The only question relevant for reaching a just
and fair conclusion was: ‘what is the legal effect of non-registration of the contracts of apprenticeship?’ Justice Mathur (for
self and Hegde J,Sinha J, concurring) held that none of them was entitled to be treated as a ‘workman’ within the meaning
of the IDA. A few observations made by Mathur J have been identified for analysis below. The learned judge observed:

From the scheme of things it is more than apparent that the Apprentices Act, 1961 is a complete Code in itself and it lays down the
conditions of the apprentices, what shall be their tenure, what shall be their terms and conditions and what are their obligations and
what are the obligations of the employer. It also lays down that the apprentices are trainees and not workmen and if any dispute
arises then the settlement has to be done by the Apprenticeship Adviser as per Section 20 of the Apprentices Act, 1961 and his
decision thereof is final. Now, under the scheme of these things, it clearly shows that the nature and character of the apprentice is
nothing but that of a trainee and he is supposed to enter into a contract and by virtue of that contract he is to serve for a fixed
period on a fixed stipend. This will not change the character of the apprentice to that of a workman under the employer where he is
undergoing the apprentice training. Sub-section (4) of Section 4 only lays down that such contract should be registered with the
Apprenticeship Adviser. But by non-registration of the contract, the position of the apprentice is not changed to that of a workman.
() .... The purpose is to train the people for employing them in the industries, it was never the intention that those trained candidates
automatically become the workmen. ... The definition makes it clear that they are apprentices for a purpose undergoing a training
and in Section 18 it has been clearly mentioned that they will not be treated as a workmen and they will be treated as a trainee and
no labour laws will apply in relation to such apprentices. Viewing the expression “shall” in this context, cannot be construed as a
mandatory....It is purely administrative act and not forwarding contract of the apprenticeship to the Apprenticeship Adviser will
not change the character of the incumbent and it will not render the contract of apprenticeship invalid or void. If the contract of
apprenticeship is to be treated as a mandatory and contract is not sent then the effect will be that the apprentice will not be entitled
to any benefit flowing from the Act. In fact, by treating the expression “shall” here as a mandatory it will be more counter
productive to the interest of the trainees rather than for their benefit. The employer can take a shelter under the plea that since the
contract of the employment has not been registered with the Apprenticeship Adviser, therefore, he is not under any obligation to
pay stipend to the apprentice trainees and he is not under an obligation to impart the training to him also… () ... We are, therefore,
are of the considered view that non-registration of the contract of apprenticeship would not render the same nugatory.89 ().

Observation I

Now, under the scheme of these things, it clearly shows that the nature and character of the apprentice is nothing but that of a
trainee and he is supposed to enter into a contract and by virtue of that contract he is to serve for a fixed period on a fixed stipend.
This will not change the character of the apprentice to that of a workman under the employer where he is undergoing the
apprentice training.

The above observation is wrong both on facts and law. Once it is recognised that there are two classes of
apprentices/trainees - one under the provisions of the Apprentices Act and the other under the Industrial Disputes Act with
different terms and conditions governing their engagement - the conclusion that they are distinct legal entities is
inescapable.Secondly, the two enactments serve totally different objects. The former is merely confined to impart training

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to the candidates sponsored by the Apprenticeship Adviser for a determinate period of time, and the latter for investigation
and settlement of disputes mainly between the employer and his workmen. Thirdly, as already stated in the preceding
paragraphs, the need to distinguish the two classes of apprentices was necessitated after the enactment of Apprentices Act
1961, and not before. Fourthly, prior to 1961, the expression ‘statutory apprentice’ was unknown and beyond legal
conception. Fifthly, until the enactment of the Apprentices Act 1961, ‘apprentice’ and ‘trainee’ were being used
synonymously to mean the same class, as can be seen from the Model Standing Orders as well as Certified Standing
Orders of different industrial establishments in force during that period. Sixthly, the expression ‘apprentice’ was expressly
included in the definition of ‘workman’ in s 2(s), which means that he is entitled to pursue the remedy provided under the
ID Act, whereas the ‘apprentice’ under Apprentices Act was excluded from the operation of any of the labour laws
including the ID Act. Seventhly, in respect of an ‘apprentice’ engaged under the company’s training scheme, the employer
is under no obligation to send the contract of training to, or get it registered with the Apprenticeship Adviser or any other
external authority, whereas in respect of a ‘statutory apprentice’, the employer is mandated to get the contract registered
with the Apprenticeship Adviser. It does not stop there. In terms of r 6 of the Apprenticeship Rules 1992, the Central
Government may specify and model the ‘contract form’ as provided for in Sch V (for trade apprentices), which has to be
used by the employer while engaging apprentice, whereas the employer is free to design and draft his own contract of
training in respect of the trainees/apprentices engaged under its own training scheme. Eighthly, while an employer has the
power to terminate the services of an ‘apprentice’, ie, a ‘workman’ answering to s 2(s) of the ID Act as provided for in the
individual contract, he is not free to dispense with the services of an ‘apprentice’ answering to the definition under s 2(aa)
read with s 2(e) of the Apprentices Act. In terms of s 7 (2) & (3), any premature termination of the apprenticeship contract
could only be effected by an order passed by the Apprenticeship Adviser, and not by the employer. Ninthly, the stipend paid
to the statutory apprentices is partially reimbursed and/or shared by the government in respect of industrial establishments
employing less than 150 workers, whereas no such reimbursement/sharing is contemplated in the case of
‘apprentices’/‘trainees’ engaged by an establishment under its own training scheme. Tenthly, r 8 of Apprenticeship Rules
1992 stipulates that, in the event of pre-mature termination of the apprenticeship of a statutory apprentice due to the failure
on the part of employer, the employer has to pay compensation equivalent to three months last drawn stipend, whereas the
training of a trainee/apprentice engaged under the company’s training scheme can be terminated without notice or
compensation at any time during the period of training. Eleventhly, a trainee or apprentice engaged under the company’s
training scheme can raise an industrial dispute under s 2A read with s 11A of ID Act and seek remedy through the medium
of conciliation, adjudication, etc, whereas a statutory apprentice engaged under the provisions of Apprentices Act cannot
seek the remedy provided under the ID Act in view of s 18 of the Apprentices Act which prohibits the application of any
labour law to statutory apprentices. He can only appeal to the Apprenticeship Adviser for relief. Twelfthly, in the case of a
statutory apprentice, s 5 of the Act provides for ‘Novation’ of the apprenticeship contract, which concept is wholly foreign
to industrial employment with no application, whatsoever, to the trainees engaged under the company’s training scheme.
And, lastly, in addition to the expression ‘apprentice’, the Apprentices Act also defines ‘worker’ [ s 2(r) ] to mean “any
person who is employed for wages in any kind of work and who gets his wages directly from the employer, but shall not
include an apprentice referred to in clause (aa)”, whereas ID Act defines ‘workman’ which includes ‘apprentice’. In the
face of these glaring facts, to hold that it will not change the character of the apprentice to that of a workman under the
employer where he is undergoing the apprentice training, not only sounds strange, but also runs counter to the scheme of
Apprenticeship under the Apprentices Act, given that the rights and liabilities as well as the remedy and relief
contemplated under Apprentices Act are totally different from those prescribed under the ID Act.

Observation II

Viewing the expression “shall” in this context, cannot be construed as a mandatory. ... It is purely administrative act and not
forwarding contract of the apprenticeship to the Apprenticeship Adviser will not change the character of the incumbent and it will
not render the contract of apprenticeship invalid or void.

To say that the non-forwarding and the non-registration of the contract with the Apprenticeship Adviser cannot be
construed as mandatory is a misconception of law. The word ‘shall’ appearing in the provision can by no stretch of
imagination be construed as merely directory. If the contract is not registered with the Apprenticeship Adviser, then the
apprentice ceases to be a statutory apprentice and gets transformed into a trainee engaged by the company voluntarily or
under its training scheme, if such a scheme exists. The further implication of non-registration is that none of the provisions
of the Apprentices Act, which grant protection and/or certain additional facilities to the apprentice, which are not normally
available to voluntary trainees as, for instance: (i) payment of stipend at the rates prescribed from time to time, (ii) casual
leave with pay @ 12 days/annum, (iii) medical leave with pay @ 15 days/annum, (iv) extraordinary leave with pay @ 10
days/annum (making it a total 37 days paid leave), (v) protection against non-payment of stipend, (vi) prohibition of
engaging the apprentice in night shifts, ie, between 10.00 PM and 6.00 AM, (vii) releasing the apprentice for Related
Instruction (RI) Classes with full stipend for the period of absence, (viii) protection against deductions from the stipend,
etc. Many of these facilities are not available to a trainee/apprentice engaged under the company’s training scheme. To

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illustrate, a trade union which is not registered under the Trade Unions Act 1926 (‘TU Act’) may still call itself a ‘union’
and may even raise an industrial dispute on behalf of its members, but it certainly cannot claim the criminal and civil
immunity granted to a registered union under ss 17 & 18 of the TU Act. Similarly, an unregistered union cannot have
perpetual succession and common seal nor could it acquire or alienate property, much less sue or be sued in its name.
Could it still be said that a non-registered union stands on the same legal footing as a registered union? Applying the same
analogy to a non-statutory apprentice whose contract of apprenticeship has not been (or is not required to be) registered
with the Apprenticeship Adviser, could it reasonably be argued that he stands on the same footing as a statutory
apprentice? Is it possible to brand the registration of apprenticeship contract as a mere administrative act bordering on an
empty and useless formality? The learned judge virtually reproduced the entire Apprentices Act in his judgment running
into a staggering 126 paragraphs spanning some 39 pages. At the end of all that hard labour, what is it that he had decided?
With great respect, this decision is wrong on all counts.

Observation III

If the contract of apprenticeship is to be treated as a mandatory and contract is not sent then the effect will be that the apprentice
will not be entitled to any benefit flowing from the Act. In fact, by treating the expression “shall” here as a mandatory it will be
more counter productive to the interest of the trainees rather than for their benefit. The employer can take a shelter under the plea
that since the contract of the employment has not been registered with the Apprenticeship Adviser, therefore, he is not under any
obligation to pay stipend to the apprentice trainees and he is not under an obligation to impart the training to him also. ... We are,
therefore, of the considered view that non-registration of the contract of apprenticeship would not render the same nugatory.

The above observations, as to the consequences of non-registration, are no less frightening! To say that “by treating the
expression ‘shall’ as mandatory would be counter-productive to the interests of the trainee” is like putting the cart before
the horse, for the reasons already enumerated in the preceding paragraph. It is only by virtue of registering the contract, the
apprentice gets covered by the provisions of the Act and will be entitled to the benefits and facilities contemplated
thereunder. If, on the other hand, the contract is not registered, he ceases to be a statutory apprentice and becomes a
trainee/apprentice engaged under the company’s programme, and acquires the legal status of ‘workman’ within the
meaning of s 2(s) of the ID Act. What is meant by the further observation: “the employer can take shelter under the plea
that since the contract ... he is not under any obligation to pay stipend ... not under obligation to impart the training”? Is it
possible for an employer to engage someone for imparting training or to work for him and still get away without paying
stipend or wages, that too, in the present age? Can the learned judge, with decades of experience at the bar and bench, cite
at least one instance where an employer has engaged workers for work and denied the wages in their entirety in an
industrial context, and got away with it? Assuming that the employer has not paid wages, the worker has the option of
quitting the company for good, apart from filing a complaint under s 15 of the Payment of Wages Act or under s 33C of
the ID Act for recovering the money due to him.Contrary to what has been concluded by the learned judge (in Para 125),
the fact remains that the non-registration of contract of apprenticeship renders it very much nugatory in so far as the
apprentice ceases to be an ‘apprentice’ under the Apprentices Act.

The learned judge approved the view taken by the Rajasthan, Kerala and Allahabad High Courts as against those of
Gujarat and Madhya Pradesh. With great respect, the conclusion reached by Mathur J, runs counter to his reasoning in so
far as having recognised the fact that the contracts were not registered as required under the Act (at p 5023), the learned
judge nevertheless proceeded to hold that they were still apprentices under Apprentices Act and hence could not be treated
as workmen within the meaning of s 2 (s) of the IDA. In National Small Industries, a similar issue fell for decision. Briefly
stated, the facts were: the respondent was initially appointed as a casual labourer. Three years later, he was called for an
interview for the post of, and selected as, Apprenticeship Trainee (Shop Assistant), and was appointed as such on a
monthly salary of Rs 750. Thereafter he was asked to perform several duties such as dispatch work, etc, before being
terminated after one year. The Labour Court and the High Court rightly ordered reinstatement on the ground that,
notwithstanding the nomenclature, the workman was working as a regular employee. In appeal, Altamas Kabir J,
committed the same error and quashed the order of the courts below on the ground that he was an apprentice under the
Apprentices Act.90 If the respondent were an apprentice under the Apprentices Act, would it have been possible for the
employer terminate his apprenticeship contract abruptly and unilaterally without bringing the Apprenticeship Adviser into
picture in view of s 7 of the Act? Did the learned judge ask right questions before coming to the conclusion that the
respondent was an apprentice under the Apprentices Act? With great respect, it is submitted that the learned judges of
Supreme Court have been consistently committing grave errors of law in so far as they have failed to distinguish a
‘statutory’ apprentice (non-workman under ID Act) from a ‘non-statutory’ apprentice/trainee (workman under ID Act). As
already stated in the preceding paragraphs, the word ‘apprentice’ appearing in s 2(s) of the IDA refers exclusively to a
‘non-statutory’ apprentice and such ‘apprentices’ and/or ‘trainees’ are very much ‘workmen’ under the IDA with all the
concomitant rights to claim absorption in the regular services of the undertaking and to raise an industrial dispute and
claim relief, if their services are dispensed with wrongfully.91

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The learned judges have not been able to display any depth in their analysis of these expressions, apart from failing to
grasp the fundamental distinction between the two classes of trainees/apprentices - statutory vs non-statutory. As was held
in Assam Oil Co, if the validity of termination of the service of a voluntary (non-statutory) apprentice is challenged in
industrial adjudication, it would be competent to the Industrial Tribunal to enquire whether the impugned order of
discharge was passed in the bona fide exercise of the power conferred by the contract.92 With great respect for Mathur,
Sinha and Kabir JJ, the decisions in Shiv Mohan Singh and National Small Industries were founded on a defective
appreciation of facts coupled with misapplication of law thereto, and are patently unfair, inequitable, illegal and wrong.
The view taken by Gujarat and Madhya Pradesh High Courts was right, and that of the Supreme Court is clearly wrong. In
Mahanadi Coal Fields, Mathur J, held that the employer is under no obligation to offer employment to statutory
apprentices engaged under the Apprentices Act 1961 in the absence of any conditions in the contract of apprenticeship to
that effect; and that no writ of mandamus can be issued to the company to give appointment to the apprentice.93

‘Employed in an Industry’

In order to bring a person within the definition of ‘workman’ it must inter alia be proved that he was employed in an
industry. In the absence of existence of this relationship, there can be no question of that person being a workman.94 Once
it is established that the activity in question is an ‘industry’ as defined in s 20, the question then arises, as to whether the
persons concerned are employed in such industry. The expression ‘employed in an industry’ would take in the employees
who are employed in connection with operations incidental to the main industry. For instance, in Basti Sugar Mills Ltd v
Ram Ujagar ,95 the workers employed by a contractor to remove press-mud from the sugar factory were held to be
‘workmen’ employed by the factory because removing press-mud was considered ordinarily to be a part of the sugar
factory. In Saraspur Mills, the workers of a canteen run by a co-operative society were held to be the ‘workmen’ of the
factory because the factory was under an obligation to maintain and run the canteen for its employees under theFactories
Act and the rules made thereunder.1 In JK Cotton, the Supreme Court observed that it was not easy to decide as to what is
the field of employment included in the principle of ‘incidental’ relationship? and what would be the limitations of the said
principle? and it is not easy to draw a line. In this case, the court held that the malis employed in the residential bungalows
allotted to the officers and the directors of the textile mill, as provided in the terms and conditions of the employment of
such officers and directors, were ‘workman’ because their work was ‘incidental’ to the main work of the industry. In
support of this view, the court drew sustenance from the analogy of the bus drivers employed by the company to operate
the buses run by it for providing transport amenities to its employees.2 The analogy is neither elegant nor apposite. Though
the court recognised the need to prescribe a limitation in dealing with the question of ‘incidental relationship’ with the
main industrial operations, so as to exclude operations, or activities whose relation with the main industrial activity may be
remote, indirect and far-fetched, it did not lay down any such test and contented itself with the ambivalent statement that it
is hardly necessary to emphasise that in modern world the industrial operations have become complex and complicated and
for the efficient and successful functioning of any industry, ‘incidental’ operations are called in aid and it is the totality of
these operations that ultimately constitutes the industry as a whole.’

In Food Corpn of India, Desai J held that the essential condition of a person being a workman within the terms of the
definition is that he should be employed to do the work in that industry and in other words, that there should be, an
employment of his by the employer and that there should be relationship between the employer and him as between the
employer and employee or master and servant. Unless a person is thus employed, there can be no question of his being a
‘workman’ within the definition of the term; that where a contractor employs a workman to do the work which he
contracted with a third person to accomplish on the definition as it stands, the workman of the contractor would not
without something more, become the workman of third person.’ In this view of the law, the court held that when the
contract system was in vogue in the corporation, the workmen employed by the contractor were not the workmen of the
corporation.3 Employees engaged by a contractor running the canteen of a factory cannot be held to be the employees of
management.4 There is no master and servant relationship between Telco convoy drivers and the management of Telco, as
the control over the drivers was vested with the Telco contract transport contractors association, that no memorandum of
settlement was ever arrived at between Telco and the convoy drivers, that in earlier series of litigations also, no court had
ever declared the relationship of employer and employee between the convoy drivers and Telco, and hence, the dispute
raised by the convoy drivers for absorption in the company was without merit.5

‘For Hire or Reward’

In order to bring a person within the ambit of definition, the work for which he is employed should be for ‘hire or reward’,
whether the terms of employment be express or implied. The work must be for wages or other remuneration. Otherwise,
there will be no consideration for the work done, and without consideration there can be no contract of any kind.6 The
legislature has used the words hire or reward’ rather than the word ‘wages’ with a view to enlarging the scope of the
definition. ‘Hire or reward’ may take any form.7 There is a distinction between the words ‘hire’ and ‘reward’. The word
‘hire’ necessarily imports an obligation to pay. The further inclusion of the second word ‘reward’ is not merely for the

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purpose of giving an alternative word to ‘hire’ meaning the same thing, but for the purpose of bringing in a subject-matter
which does not include ‘hire’ and includes cases where there is no obligation to pay.8 Remuneration may be paid on pro
rata basis or even on commission basis.

Relationship of Employment

In the words of Bhagwati J:

The essential condition of a person being a workman within the terms of this definition is that he should be employed to do the
work in that industry, that there should be, in other words, an employment of his by the employer and that there should be the
relationship between the employer and him as between employer and employee or master and servant. Unless the person is thus
employed there can be no question of his being a ‘workman’ within the definition of the term as contained in the Act.9

The relationship of employer and employee is constituted by a contract, express or implied between employer and
employees. A contract of service is one in which a person undertakes to serve another and to obey his reasonable orders
within the scope of the duty undertaken.10 The terms of the contract creating such relationship of employment may be
express or implied, ie, a contract of employment may be inferred from the conduct which goes to show that such a contract
was intended although never expressed,11 as when there has, in fact, been employment of the kind usually performed by
employees.12 In other words, creation of relation need not be, by written or verbal consent;13 it may, and very often does
rest, on the implication of circumstances.14 Any such inference, however, is open to rebuttal,15 as by showing that the
relation between the parties concerned was on a charitable footing,16 or the parties were relations,17 or partners,18 or were
directors of a limited company which employed no staff.19 Proof of existence of the relation can be made out as fairly and
fully by circumstantial evidence as it can be by evidence which is direct.20 While the employee, at the time, when his
services were engaged, need not have known the identity of his employer, there must have been some act or contract by
which the parties recognised one another as master and servant.21

In law, the time-honoured expression ‘master and servant’ indicates the relationship which exists when one person who
employs another to do certain work exercises the right of control over the performance of the work to the extent of
prescribing the manner in which it is to be executed. The employer is the master and the person who is employed is the
servant.22 The words ‘employer and employee’ are the out-growth of the old terms’master and servant’; they have been
adopted by reason of the shift of the relation in general from a personal to an impersonal one and are the terms now
commonly used to describe the relationship.23It would seem that the terms ‘employer’ and ‘employee’ make a better
designation of the relation in this industrial age. In the Industrial Disputes Act 1947, the terms ‘employer’ and ‘workman’
have been used whereas in the Payment Bonus Act 1965, the terms ‘employer’ and ‘employee’ have been used.

Independent Contractor v Employee

‘Few problems in the law have given greater variety than the cases arising on the borderline between what is clearly an
employer-employee relation and what is clearly an independent entrepreneurial dealing,24 for ‘it is often easy to recognise
a contract of service when you see it, but difficult to say where the difference lies’.25 Problems of this kind have come
before the courts with the advent of social legislation in England during the last ninety years and in India during the last
fifty years. Consequently, a considerable body of case-law has developed under the recent social welfare legislation. There
has been an extraordinary variety of relationship which has come before courts at one time or another, and it is now clear
that it is impossible to define a contract of service in the sense of stating a number of conditions which are both necessary
to, and sufficient for, the existence of such a contract. This position has been succinctly stated in the American
jurisprudence. ‘It is the element of control of the work that distinguishes the relationship of master and servant from the
independent contract relationship. The most important test in determining whether one employed to do certain work is an
independent contractor or a mere servant is the control over the work which is reserved to the employer’.26 In other words,
the identifying mark of the servant is that he should be under the control or supervision of the employer in respect of the
details of the work.27 In Mersey Docks, Lord Porter held:

Many factors have a bearing on the result. Who is paymaster, who can dismiss, how long the alternative service lasts, what
machinery is employed, have all to be kept in mind. The expressions used in any individual case must always be considered in
regard to the subject-matter under discussion but amongst the many tests suggested I think that the most satisfactory, by which to
ascertain who is the employer at any particular time is to ask who is entitled to tell the employee the way in which he is to do the
work upon which he is engaged.28

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In other words, the ‘direction and control’ are the telling factors in determining the relationship of employment. This test,
however, as pointed out by Lord Mcmillan, does not exclude other factors as well because the ‘question in each case turns
on its own circumstances, decisions in other cases are rather illustrative than determinative’.29 But from the development of
the law during the last quarter of the century in this field, it would appear that the emphasis has shifted and no longer rests
so strongly upon the question of control. In the words of Roskill J, control is obviously an important factor. In some cases
it may still be a decisive factor, but it is wrong to say that in every case it is the decisive factor. It is now, as I venture to
think no more than a factor, albeit a very important one.30 The test of control is, therefore, not as determinative as used to
be thought to be the case, though no doubt, it is still of value in that the greater the degree of control exercisable by the
employer, the more likely it is that the contract is one of service.31 To distinguish between an independent contractor and a
servant, the test is whether or not the employer retains the power, not only of directing what work is to be done, but also of
controlling the manner of doing the work. If a person can be overlooked and directed in regard to manner of doing his
work, that person is not a contractor’.32 The control of the management, which is necessary element of the relationship of
master and servant, is not directed towards providing or dictating the nature of the article to be produced or the work to be
done, but refers to the other incidents having a bearing on the process of work the person carries out in the execution of the
work. The manner of work is to be distinguished from the type of work to be performed.33 The distinction is also drawn
between ‘contract for services’ and ‘contract of service’. The distinction is; in one case that the master can order or require
what is to be done, while in the other case that he can not only order or require what is to be done, but how itself it shall be
done.34 In the words of Lord Denning:

... under a contract of service, a man is employed as a part of the business, and his work is done as an integral part of the business;
whereas, under a contract for services, his work, although done for the business, is not integrated into it but is only accessory to
it.35

But, ‘... the test of being a servant does not rest nowadays on submissions to orders. It depends on whether the person is
part and parcel of the organisation’.36 Between ‘complete control’ and ‘complete independence’, a variety of circumstances
may exist, and the law recognises that many types of services involve a wide field of initiative and discretion being left to
the servant.37 Occasionally, there may be hybrid cases which have, so to speak, elements of both within them, that cannot
easily be lodged in pigeon-holes labelled as ‘master and servant’ and ‘self-employed’. It may, therefore, be exceedingly
difficult to know as to in what pigeon-hole one can properly put the relationship.38 ‘The duties to be performed may
depend so much on special skill or knowledge or they may be clearly identified or the necessity of the employee acting on
his own responsibility may be so evident, that little room for direction or command in detail may exist’.39 Under modern
industrial conditions, the actual control is more often than not in the hands of a foreman or manager who is himself a
servant. A further illustration is of the captain of a vessel who may well be able to assert de facto control over the crew, but
he is not legally its master; they are fellow-servants.40 Lord Parker CJ observed that when one is dealing with a
professional man, or a man of some particular skill and experience, there can be no question of an employer telling him
how to do the work, therefore, the absence of control and direction in that sense can be of little, if any use as a test. What in
fact matters is lawful authority to command so far as there is scope for it.41 And there must always be some room for it if
only in incidental or collateral matters.42 The question, therefore, is not whether the control is exercised; it is as to where is
the right of control? The distinction between the physical control and the right of control is important.43 Hence various
considerations, such as the nature of the undertaking, the freedom of action given, the magnitude of the contract amount,
the manner in which it is to be paid for, the power of dismissal or circumstances in which the payment of reward may be
withheld, bear on the solution of the question.44 In other words, the determination of the question would depend upon the
terms of the contract entered into between the parties and no general proposition of universal application can be laid
down.45

The control includes the power of deciding the thing to be done, the way in which it will be done, the means employed in
doing it, the time when and the place where it shall be done. All these aspects of control must be considered in deciding
whether the right exists in a sufficient degree to make one party the master and the other his servant. The right need not be
unrestricted. To find where the right resides one must look first to the express terms of contract and if they deal fully with
the matter, one may look no further. If the contract does not expressly provide which party shall have the right, the
question must be answered in the ordinary way by implication. The obligation to do work subject to other party’s control is
a necessity, though not always a sufficient, condition of a contract of service. If the provisions of the contract as a whole
are inconsistent with its being a contract of service, it will be some other kind of contract and the person doing the work
will not be a servant.46 These tests are not necessarily concurrent nor is it necessary that each test in itself is controlling.
Furthermore, it is now clear that it is impossible to define a contract of service in the sense of stating a number of
conditions which are both necessary to and sufficient for, the existence of such a contract. In marginal situations, it is
reasonable to keep in mind the general policy considerations underlying the whole doctrine. But it is exceedingly doubtful
whether the search for a formula in the nature of a single test for identifying a contract of service serves a useful purpose. It
is now too plain that past attempts to formulate principles and tests of universal validity applicable to cases give rise to

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many difficulties. The position has been stated by Atiyah in his valuable book, Vicarious Liability in the Law of Torts, in
the following words:

The most that can profitably be done is to examine all the possible factors which have been referred to in these cases as bearing on
the nature of the relationship between the parties concerned. Clearly not all of these factors will be relevant in all cases, or have the
same weight in all cases. Equally clearly no magic formula can be propounded for determining which factors should, in any given
case, be treated as the determining ones. The plain fact is that in a large number of cases the court can only perform a balancing
operation, weighing up the factors which point in one direction and balancing them against those pointing in the opposite direction.
In the nature of things it is not to be expected that this operation can be performed with scientific accuracy.47

It would thus be clear that no one fact is determinative and that all the relevant facts have to be taken into account. It is
axiomatic that every case must turn upon its own facts. The court has to approach a particular case not so much by
reference to the facts in other cases, arising sometimes under similar legislation, sometimes under different legislation, but
by reference to the facts of the particular case as found and then in the light of those facts as so found, apply the pointers
afforded by the well-established principles by the earlier cases for the purpose of determining whether a particular contract
of employment is a ‘contract of service’ or a ‘contract for services’ and thus decide whether the particular person is a
person employed under a contract of service or whether he is a self-employed person. The court, however, has to avoid too
much reference to the facts of other cases though it has to bear in mind, the principles laid down by those cases. Since the
principles laid down in the judgments cannot perhaps be formulated with scientific accuracy, the court has to hazard the
risk of performing a balancing operation.48

International trends

It may be of some interest to study the development of this branch of law in different countries, viz, England, United
States, Australia, Canada and India.

In England:

In the earlier cases, it seems to have been suggested that the most important test, if not the all-important one, was the
extent of control exercised by the employer over the servant. This distinction (viz, between telling a servant what to do and
telling him how to do it) was based upon the social conditions of an earlier age; it assumed that the employer of labour was
able to direct and instruct the labourer as to the technical methods he should use in performing his work. In a mainly
agricultural society and even in the earlier stages of the industrial revolution, the master could be expected to be superior to
the servant in the knowledge, skill and experience which had to be brought to bear upon the choice and handling of the
tools. The control test was well suited to govern relationships like those between a farmer and an agricultural labourer
(prior to agricultural mechanization), a craftsman and journeyman, a householder and a domestic servant, and even a
factory owner and an unskilled ‘hand’. It reflects a state of society in which the ownership of the means of production
coincided with the profession of technical knowledge and skill in which that knowledge and skill was largely acquired by
being handed down from one generation to the next by oral tradition and not by being systematically imparted in
institutions of learning from universities down to technical schools. The control test postulates a combination of
managerial and technical functions in the person of the employer ie, what to modern eyes appears as an imperfect division
of labour.49 However from the development of the law during the last quarter of the century, it would appear that the
emphasis has shifted and no longer rests so strongly upon the question of control. In the language of Mocatta J:

The test of control is, therefore, not as determinative as used to be thought to be the case, though no doubt, it is still of value in that
the greater the degree of control exercisable by the employer, the more likely it is that the contract is one of service.50

As pointed out by Roskill J:

Control is obviously an important factor. In some cases it may still be a decisive factor, but it is wrong to say that in every case it is
the decisive factor. It is now, as I venture to think no more than a factor, albeit a very important one.51

In J & W Henderson, a case decided by the House of Lords under the Workmen’s Compensation Act, Lord Thankerton
recapitulated with approval, the four indicia of contract of service derived by Lord Clark J from the authorities referred to
by him in the judgment under appeal, viz:

(i) the master’s power of selection of his servant;

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(ii) payment of wages or other remuneration;

(iii) the master’s right to control the method of doing the work; and

(iv) the master’s right of suspension or dismissal; and further observed that modern industrial conditions have so much
affected the freedom of the master in cases in which no one could reasonably suggest that the employee was thereby
converted into an independent contractor, that, if and when an appropriate occasion arises, it will be incumbent on this
house to reconsider and to restate these indicia.52

For example, (i), (ii), and (iv) and probably also (iii) are affected by the statutory provisions and rules which restrict the
master’s choice to men supplied by the labour bureau, or directed to him under the essential work provisions, and his
power of suspension or dismissal is similarly affected. These matters are also affected by the trade union rules which are,
at least primarily, made for the protection of the wage earners. It was, then, suggested that the particular requirement of a
contract of service is the right of the master in some reasonable sense to control the method of doing the work, and that this
factor of superintendence and control has frequently been treated as critical and decisive of the quality of the relationship.
However, it has been apparent for long that an analysis of the extent and the degree of such control is not in itself decisive.
It is left to the courts of law to decide what the ‘contract of employment’ or ‘service’ is in the circumstances of each case.
Broadly speaking, there are three tests for discerning the ‘contract of employment’, viz:

(i) the ‘traditional’ or ‘control’ test;

(ii) ‘organisation’ or ‘integration’ test; and

(iii) ‘mixed’ or ‘multiple’ test.

The ‘traditional’ or ‘control’ test refers to the control of an employee by another, not only as to what he must do but also as
how and when he must do.53 This test, has been described by Mc Cardie J in Performing Right Society, as the final test.54
This test, however, has been found increasingly difficult to apply to modern industrial relationships. An attempt, at first
was made to extend the ‘control’ test by making control of the manner in which work was to be done, to be a decisive test
rather than simply the control of what the worker did. In Mersey Docks, Lord Simons observed that the test should turn on
‘where the authority lies to direct or to delegate to, the workman, the manner in which the work is to be done.’ By this
device, the subordination to the employer’s managerial power was made the criterion.55 But inadequacy of this test was
pointed out by Somervell LJ in Cassidy, criticising statement of Hillbery J in Collins,56 when he alluded to the case of a
certified master of a ship. The master may be employed by the owner under what is clearly a contract of service and yet the
owner has no powers to tell him how to navigate the ship.57 The decision in this case holding that a hospital was
vicariously liable for an injury suffered by a patient following negligent treatment by full time medical staff, was a further
landmark in this direction. This holding provoked juristic thinking to suggest, that the ‘organisation’ test, viz, did the
alleged servant form part of the alleged master’s organisation, would be a decisive test?58 In Morren, Lord Parker pointed
out that when one is dealing with a professional man or a man of some particular skill and experience, there can be no
question of an employer telling him how to work; therefore, the absence of control and direction in that sense can be of
little, if any, use as a test.59 Cases like this illustrate how a contract of service may exist even though the control does not
extend to prescribing how the work shall be done. On the other hand, there may be cases when one, who engages the other
to do work, may reserve for himself full control of how the work is to be done, but nevertheless the contract is not a
contract of service.60

Inspired by the bold criticism of the ‘control’ test by Somervell LJ in Cassidy, Lord Denning in Stevenson, Jordan and
Harrison, adumbrated the ‘organisation’ or ‘integration’ test, viz, under a contract of service, a man is employed as part of
the business, and his work is done as an integral part of the business; whereas under a contract for services, his work,
although done for the business; is not integrated into it but is only accessory to it.61 This point was illustrated by giving
instances of a ship master, a chauffeur and reporter on the staff of a newspaper who are all employed under a contract; but
a ship pilot, a taxi man and a newspaper contributor are employed under the contract for services. Shortly afterwards, in
Bank Voor, Lord Denning LJ again observed: that test of being a servant does not rest now-a-days on submission to
orders. It depends on whether the person is part and parcel of the organisation.62 This observation was criticised in Ready
Mixed Concrete, where Mackenna J, clearly took the view that those four indicia or at least two of them were in the present
day, no longer determinative of the question whether the contract is one of service.63 In this case, it was stated that the
contract of service exists if three conditions are fulfilled, ie:

(i) a servant agrees that in consideration of a wage or other remuneration, he will provide his own work and skill in the
performance of some service for his master;

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(ii) he agrees, expressly or impliedly, that in the performance of that service he will be subject to other’s control in a
sufficient degree to make the other, master; and
(iii) the other provisions of the contract are consistent with its being a contract of service.

In Argent, Roskill J suggested that ‘the matter can be determined by reference to what in modern parlance is called
economic reality’. In other words, all these relevant matters have to be borne in mind. One has to look at the totality of the
evidence, at the totality of the facts and then apply them to the language of the statute.64 One cannot do better than echo the
words of Somervell LJ in Cassidy (supra), viz, ‘one perhaps cannot get much beyond this, ‘was his contract a contract of
service within the meaning which an ordinary person would give to the words? Thus, the ‘organisation’ or ‘integration’
test also does not provide a clear and candid answer in a myriad of situations in modern industrial employment. This has
led the courts in recent times to prefer the more resilient ‘multiple mixed test’. At its most casuistic level, this is simply
said to be a ‘common sense’ approach of the ‘reasonable man’. Apart from this, various criteria have been suggested, such
as the employer’s power of selection and dismissal, and form of payment of wages, and in addition, the employer’s right to
control the method of doing the work. Most recently, it has been suggested that a ‘multiple’ test should be applied in two
stages. First, it must be asked whether there is control. This is a necessary but not a sufficient test. Secondly, it must be
asked whether the provisions of the contract are ‘consistent with its being a contract of service’. In other words, are there
indications that the worker is an entrepreneur rather than an employee? For example, has he invested in tools and taken the
chance of profit or the risk of loss? On the other hand, the mere fact that he is paid on an incentive basis or that he is
expressly declared to be ‘self-employed’ is not conclusive. The entrepreneurial element is clearly of importance. But it
begs the question to ask whether the contract is ‘consistent with a contract of service’. Had it been asked whether the
contract was consistent with a contract of services, precisely the opposite result would have been reached. In other words,
the form of the question will dictate the answer given.65

In the United States of America:

A few cases, while dealing with statutory definitions, have laid down that the terms such as ‘employees’ need not be
confined to conventional limitations or the traditional common law conceptions or some other distilled essence of their
local variations, for determining the jural relationship of master and servant. However, the courts in the United States of
America too have not completely given a go-by to the common law conceptions, especially the application of the
supervision and control test.66 The law on the subject has been stated in American Jurisprudence in the following words:

The really essential element of relationship is the right to control and the right of one person, the master, to order and control
another, the servant, in the performance of work by the latter, and the right to direct the manner in which the work shall be done. It
is, however, essential that the master shall have control and direction not only of the employment to which the contract relates, but
also of all its details, and if these elements of control and direction are lacking, no relationship of master and servant exists. The
test of employer-employee relation is the right of the employer to exercise control of the details and method of performing the
work.67

The case of Silk, is the most important of the cases on the topic decided by the Supreme Court of the United States of
America. The case disposed of two suits raising the question whether men working for the plaintiff, Silk and Greyvan were
‘employees’ within the meaning of that word used in the Social Security Act 1935. The judges of the court agreed upon the
test to be applied though not in every instance upon its application to the facts. It was not to be what they described as ‘the
common law test’, viz, ‘power of control whether exercised or not, over the manner of performing service to the
undertaking’. The test was whether the men were employees ‘as a matter of economic reality’. The important factors were
said to be ‘the degrees of control, opportunities of profit or loss, investment in facilities, permanency of relation and skill
required in the claimed independent operation’. The facts of the case were that Silk sold coal by retail, using the services of
two classes of workers, unloaders and truck drivers. The unloaders moved the coal from railway vans into bins. They came
to the yard when they wished and were given a wagon to unload and a place to put the coal. They provided their own tools
and were paid a certain amount per ton for the coal they shifted. All the nine judges of the Supreme Court held that these
men were employees. The court said thus:

Giving full consideration to the concurrence of the two lower courts in a contrary result, we cannot agree that the unloaders in the
Silk case were independent contractors. They provided only picks and shovels. They had no opportunity to gain or lose except from
the work of their hands and these simple tools. That the unloaders did not work regularly is not significant. They did work in the
course of the employer’s trade or business. This brings them under the coverage of the Act. They are of the group that the Social
Security Act was intended to aid. Silk was in a position to exercise all necessary supervision over their simple tasks. Unloaders

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have often been held to be employees in tort cases. 68

Silk’s drivers owned the trucks in which they delivered coal to Silk’s customers. They paid all the expenses of operating
their trucks including the wages of any extra help they needed or chose to employ. They came to the yard when they
pleased and were free to haul goods for other people. They were paid for their deliveries at a rate per ton. Greyvan carried
on a road hauler’s business. Their drivers too owned their trucks and were required to pay all the costs of operation. They
were not allowed to work for anyone else but Greyvan, and had to drive the trucks themselves, or if they employed a relief
driver, to be present when he drove. They had to follow all the rules, regulations and instructions of Greyvan. They were
paid a percentage of the tariff which Greyvan charged the customers. A majority of the court held that both sets of drivers
were independent contractors. The court held thus:

...Where the arrangements leave the driver-owners so much responsibility for investment and management as here, they must be
held to be independent contractors. These driver-owners are small businessmen. They own their own trucks. They hire their own
helpers. In one instance, they haul for a single business, in the other for any customer. The distinction, though important, is not
controlling. It is the total situation, including the risk undertaken, the control exercised, the opportunity for profit from sound
management, that marks these driver-owners as independent contractors.69

The reasoning of the American Supreme Court apparently required that there should be some power of control vested in
the driver if he is to qualify as an independent contractor. That the power need not be very extensive appears from the facts
in Greyvan’s case. The driver’s investment, and the risk undertaken by him, seem to be important issues of consideration.
In determining whether one acting for another is a servant or independent contractor, the following among others, are the
commonly recognised tests.70

(i) as to who has the right to direct what shall be done and when and how it shall be done;

(ii) existence of a contract for the perfomance by a person of a certain piece or kind of work at a fixed price;

(iii) independent nature of his business or his distinct calling;

(iv) his employment of assistants with the right to supervise their activity;

(v) his obligation to furnish necessary tools, supplies and materials;

(vi) work except as to final results;

(vii)the time for which the workman is employed;

(viii) the method of payment to be made, by time or job; and

(ix) whether work is part of the regular business of the employer.

In the Re-statement of the Law, it is stated that with reference to the common law concept of the relationship of master and
servant, more than one factor will have to be taken into consideration for determining the existence of a jural relationship
of master and servant. These have been enumerated below:

(a) the extent of control which, by agreement, the master may exercise over the details of the work;
(b) whether or not the one employed is engaged in a distinct occupation or business;

(c) the kind of occupation with reference to whether, in the locality the work, is usually done under the directions of the
employer or by a specialist without supervision;
(d) the skill required in the particular occupation;

(e) whether the employer or the workman supplies the instrumentalites, tools and the place of work for the person doing the
work;
(f) the length of time for which the person is employed;

(g) the method of payment, whether by the time or by the job;

(h) whether or not the work is a part of regular business of the employer; and

(i) whether or not the parties believe they are creating the relationship of master and servant.

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The comment on factor (e) above is in these words:

Ownership of instumentalities: The ownership of the instrumentalities and tools used in the work is of importance. The fact that a
worker supplies his own tools is some evidence that he is not a servant. On the other hand, if the worker is using his employer’s
tools or insturmentalities, especially if they are of substantial value, it is normally understood that he will follow, the directions of
the owner in their use, and this indicates that the owner is a master. This fact is, however, only of evidential value.71

This implies that in effect the employer’s ownership of the instrumentalities is relevant only because of a rebuttable
presumption that the parties meant him to control the use of his own property. It also says that the worker’s ownership is
evidence that he is not a servant, but it does not say why. If the reason is the same in both cases, and the worker’s
ownership is evidence only because of its bearing on control, it is plainly not the correct position. It would, however,
appear that the importance of the provision of instrumentalities and tools lies in the simple fact that, in most circumstances,
where a person hires out a piece of work to an independent contractor he expects the contractor to provide all the necessary
tools and equipment. Indeed, it may well be that little weight can today be put on the provision of tools of a minor
character, as opposed to the provision of plant and equipment on a large scale. In the latter case, the real object of the
contract is often the hiring of the plant, and the services of a workman to operate the plant are purely incidental’.72

In Australia:

The law obtaining in Australia has been discussed in some detail in Queensland Stations, in which the question was
whether a payment made by the company to a driver was ‘wages’ within the meaning of a Pay-roll Tax Assessment Act,
which depended on whether the relation between the company and the driver was that of master and servant. The driver
was employed under a written contract to drive 317 cattles to a destination. The contract provided that he should obey and
carry out all lawful instructions and use the whole of his time, energy and ability in the careful driving of the stock, that he
should provide at his own expense all men, plant, horses and rations required for the operation, and that he should be paid
at a rate per head for each of the cattle safely delivered at the destination. He was held to be an independent contractor.
Speaking for the court, Dixon J held:

There is, of course, nothing to prevent a driver and his client forming the relation of employee and employer ... But whether they
do so must depend on the facts. In considering the facts it is a mistake to treat as decisive a reservation of control over the manner
in which the driving is performed and the cattle are handled. For instance, in the present case, the circumstance that the driver
agrees to obey and carry out all lawful instructions cannot outweigh the countervailing considerations which are found in the
employment by him of servants of his own, the provision of horses, equipment, plant, rations, and a remuneration at a rate per head
delivered. That a reservation of right to direct or superintend the performance of the task cannot transform into a contract of service
what in essence is an independent contract...”73

In a later case, viz, Humberstone, the same judge dealt with the question; whether the owner-driver of a truck was a servant
under a contract of service so as to be covered by Workmen’s Compensation Act? For a number of years, the owner had
taken his truck at about the same time each day to the factory where he had been given goods to deliver to the customers of
the factory owners. He maintained the truck, supplied the fuel at his own expense, and was paid for goods carried at a rate
per car-mile. He carried on delivering goods until about the same time each evening, when he was knocked off. From these
facts, it was inferred that there was a continuing contract between the factory owner and the truck owner which was not a
contract of service. For this conclusion, Dixon J gave the following reasons:

The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual
supervision or whether an actual supervision was possible but ‘whether ultimate authority over the man in the perfomance of his
work resided in employer so that he was subject to the latter’s order and directions’. In the present case, the contract by the
deceased was to provide not merely his own labour but the use of heavy mechanical transport, driven by power, which he
maintained and fuelled for the purpose. The most important part of the work to be perfomed by his own labour consisted in the
operation of his own motor truck and the essential part of the service for which the respondents contracted was the transportation
of their goods by the mechanical means he thus supplied. The essence of a contract of service is the supply of the work and skill of
a man. But the emphasis in the case of the present contract is upon mechanical traction. This was to be done by his own property in
his own possession and control. ‘There is no ground for imputing to the parties, a common intention that in all the management and
control of his own vehicle, in all the ways in which he used it for the purpose of carrying their goods, he should be subject to the

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commands of the respondents’.74

It would appear that if the obligation to provide the truck, etc, were relevant only as evidence of intention in the matter of
control, it would cease to be relevant where the parties had expressed their intention in that matter, and if as in Queensland
the contract expressly provided that the drover should be subject to the other party’s control, he would be a servant. But in
Queensland, it was decided that the driver’s contract was an ‘independent contract’: his obligation to provide the men, the
horses, etc, determined its nature and made it, notwithstanding his submission to control, something other than a contract
of service. Hence, the view taken in Queensland is preferable to that of Humberstone.75 This also finds support from the
observation of Dixon CJ in Zuijs, to the effect that what matters is lawful authority to command so far as there is scope for
it. And there must always be some room for it, for only in incidental or collateral matters.76

In Canada:

The position of this branch of law in Canada has been succinctly summed up by Lord Wright in Montreal Locomotive
Works. In this case there were two questions, viz:

(i) whether a corporation was the occupant of an armament factory so as to be liable to pay an occupation tax; and,

(ii) whether it was carrying on a business in the factory so as to be liable to pay business tax.

The answer to both the questions depended on whether the corporation was acting as the government’s agent in the
manufacture of armaments or as an independent contractor. All the funds necessary for the enterprise were provided by the
government which bore all the financial risks. The corporation was subject to the government’s control in making the
armaments and received a fee for each unit of production. It was held, on these facts, that the corporation was not liable to
pay the taxes. Lord Wright expressed his opinion in the following words:

In earlier cases a single test, such as the presence or absence of control, was often relied on to determine whether the case was one
of master and servant, mostly in order to decide issues of tortious liability on the part of the master or superior. In the more
complex conditions of modern industry, more complicated tests have to be applied. It has been suggested that a four-fold test
would in some cases be more appropriate, a complex involving (1) control; (2) ownership of the tools; (3) chance of profit; (4) risk
of loss. Control in itself is not always conclusive. Thus the master of a chartered vessel is generally the employee of the shipowner
though the charterer can direct the employment of the vessel. Again the law often limits the employer’s right to interfere with the
employee’s conduct, as also to trade union regulations. In many cases, the question can only be settled by examining the whole of
the various elements which constitute the relationship between the parties. In this way it is in some cases possible to decide the
issue by raising as the crucial question whose business is it, or in other words by asking whether the party is carrying on the
business, in the sense of carrying it on for himself or on his own behalf and not merely for a superior.77

This opinion of Lord Wright has been commented upon by Mac Kenna J in Ready Mixed Concrete. The substance of the
gloss is: In the opinion of Lord Wright of the shipowner, the charterer and the shipmaster, the control is shown in two ways
not to be conclusive. Though, the shipowner had delegated to the charterer his right to give directions to the shipmaster,
and in that limited sense no longer had control, he was still the master. Again, though the charterer had the power of giving
directions, and in that sense had control, he was not the master. The second illustration shows that a right of control limited
by law or by trade union regulations may be sufficient for the relation of master and servant. This does not go far in the
direction of a four-fold test. It is easier to relate Lord Wright’s (2), (3) and (4) to the case mentioned in the last sentence of
the quotation. If a man’s activities have the character of a business, and if the question is whether he is carrying on that
business for himself or for another, it must be relevant to consider which of the two owns the assets ‘the ownership of the
tools’ and which bears the financial risk (‘the chance of profit’, ‘the risk of loss’). He, who owns the assets and bears the
risk is unlikely to be acting as an agent or a servant. If the man performing the service must provide the means of
performance at his own expense and accept payment by results, he will own the assets, bear the risk, and be to that extent
unlike a servant. There does not appear anything in the Montreal case to support the view that the ownership of the asset is
relevant only to the question of control. Lord Wright seems to have treated his three other tests as having a value
independent of control in determining the nature of the contract.78

In India:

The case of Shivanandan Sharma, can be taken as the convenient point where the tests for determining the question
whether a person is an ‘employee’ or ‘independent contractor’, was considered by the Supreme Court for the first time and

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‘supervision and control’ was held to be the crucial test for determining the relationship.79 In Dharangadhara Chemical,
the court held that the test of ‘supervision and control’ may be taken as the prima facie test for determining the relationship
of employment.80 While discussing the English decisions, Bhagwati J, preferred to adopt this test in the absence of
restatement of law as pointed out by Lord Thankerton in J & W Henderson, that there is need to reconsider and restate
indicia of contract of service. The prima facie test, therefore, for determining the relationship was held to be the existence
of the right in the master to ‘supervise and control’ the work done by the servant not only in matter of directing what work
the servant is to do but also the manner in which he is to do his work.81 But since the nature or extent of control which is
requisite to establish the relationship of employer and employee must necessarily vary from business to business and is by
its very nature incapable of precise definition,82 the court suggested that correct method of approach, would be to consider
whether having regard to the nature of work there was due control and supervision by the employer. To use the language of
Fletcher Moulten LJ:

...the greater the amount of direct control exercised over the person rendering the services by the person contracting for them, the
stronger the ground for holding it to be a contract of service.83

The control and supervision test laid down in Dharangadhara case was reaffirmed by the court, in Chintaman Rao, in
which the court was dealing with the definition of worker’ in s 2(1) of the Factories Act. Giving restricted meaning to the
words ‘directly or through an agency’ in the definition, it was held that ‘worker’ was a person employed by the
management and that there must be a contract of service and a relationship of master and servant between them.84 In
Shankar Balaji Waje, the Supreme Court clarified:

Control of the management, which is a necessary element of the relationship of master and servant is not directed towards
providing or dictating the nature of the article to be produced or the work to be done, but refers to other incidents having a bearing
on the process of work the person carries out in the execution of the work. The manner of work is to be distinguished from the type
of work to be performed.85

In VP Gopala Rao, the court held that it was a question of fact in each case whether the relationship of master and servant
exists between the management and the workmen and there could be no abstract a priori test of the work control required
for establishing the contract of service.86 It is, therefore, not surprising that in recent years, the ‘control’ test, as
traditionally formulated, has not been treated as an exclusive test. However, ‘it is exceedingly doubtful today whether the
search for a formula in the nature of a single test to tell a ‘contract of service’ from a ‘contract for services’ will serve any
useful purpose. The most, what profitably can be done, is to examine all the factors that have been referred to in the cases
on the topic. Clearly, not all of these factors would be relevant in all these cases or have the same weight in all cases. It is
equally clear that no magic formula can be propounded which factors should in any case be treated as determining ones.
The plain fact is that in a large number of cases, the court can only perform a balancing operation weighing up the factors
which point in one direction and balancing them against those pointing in the opposite direction. In Silver Jubilee
Tailoring House, Mathew J pointed out that:

It is in its application to skilled and particularly professional work that control test in its traditional form has really broken down. It
has been said that in interpreting ‘control’ as meaning the power to direct how the servant should do his work, the court has been
applying a concept suited to a past age. 87

During the last three decades, the emphasis in the field has shifted and no longer rests so strongly upon the question of
control. Control is obviously an important factor and in many cases, it may still be the decisive factor but it is wrong to say
that in every case, it is decisive. It is now no more than a factor, although an important one. The fact that generally, the
workers attend the shop which belongs to the employer and work there, on the machines, also belonging to him, is a
relevant factor. When the services are performed generally in the employers’ premises, this is some indication that the
contract is a contract of service and it is possible that this is another facet of the incidental feature of employment.
Likewise, the fact that the workers work on the machines supplied by the proprietor of the shop is an important
consideration in determining the nature of the relationship. The further fact that a ‘worker can be removed’ which means
nothing more than that the employer has the liberty not to give further work to an employee, who has not performed his job
according to the instructions of the employer or who has been absent from the shop for a long time, would be, speaking of
control and supervision, consistent with the character of the business. The supply of equipment also is some indication as if
the employer provides the equipment, it may indicate that the contract is a contract of service whereas if the other party
provides the equipment it may provide some evidence that he is an independent contractor. This is not based on the theory
that if the employer provides the equipment he retains some greater degree of control for the control arises only from the
need to protect one’s own property, little significance can be attached to the power of control for the purpose of

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determining the nature of the contract. It seems, therefore, that the importance of the provision of equipment lies in the
simple fact that, in most circumstances, where a person hires out a piece of work to an independent contractor to provide
all the necessary tools and equipment, whereas if he employs a servant he expects to provide them himself. Hence, no
sensible inference can be drawn from this factor in circumstances where it is customary for servants to provide their own
equipment. Relying on these principles in Shining Tailors, the court held that the piece-rated workers working for a big
tailoring establishment were workmen of the establishment. Speaking for the court, Desai J, observed:

The right of removal of the workman or not to give work has the element of control and supervision’ which was amply satisfied in
the fact of this case. In the premises, the tribunal was not right in holding that the piece-rate itself indicates a relationship of
independent contractor which was an error apparent on the record disclosing a total lack of knowledge of the method of payment in
various occupations in different industries.88

From these decisions, it would appear that the law in India too is not static. In the words of Krishna Iyer J: To crystallise
criteria conclusively is baffling but broad indications may be available from decisions.89 By and large, for determining the
contractual relationship as to whether a person is employed as an ‘independent contractor’ or as an ‘employee’ or whether
the contract is ‘of service’ or ‘for services’, the same principles as obtaining in England would apply. In Hussainbhai, the
Supreme Court stated the law in the following words:

Where a worker or group of workers labour to produce goods or services and these goods or services are for the business of
another, that other is, in fact, the employer. He has economic control over the workers’ subsistence, skill, and continued
employment. If he, for any reason, chokes off, the worker is, virtually, laid off. The presence of intermediate contractor with whom
alone the workers have immediate or direct relationship ex contractu is of no consequence when, on lifting the veil or looking at
the conspectus of factors governing employment, we discern the naked truth, though draped in different perfect paper arrangement,
that the real employer is the management, not the immediate contractor...If the livelihood of the workmen substantially depends on
labour rendered to produce goods and services for the benefit and satisfaction of an enterprise, the absence of direct relationship or
the presence of dubious intermediaries or the make-believe trappings of detachment from the management cannot snap the real-life
bond. The story may vary but the inference defies ingenuity. The liability cannot be shaken off. Of course, if there is total
dissociation in fact between the disowning management and the aggrieved workmen, the employment is, in substance and real-life
terms, by another. The management’s adventitious connections cannot ripen into real employment.90

In Kerala State Coir Corpn, a single judge of the High Court held that security personnel supplied by a registered society
to work in the factory of the Kerala State Coir Corporation Limited were employed by the corporation because it
controlled them, allotted work to them and decided the nature of the work they had to render while the society’s role was
only to supply the persons to do the work.91 In Atma Parkash, a single judge of the Punjab and Haryana High Court held
that where the facts disclosed that the state handloom corporation supplied material to weavers for making carpets and also
provided market facilities, and the weavers weave the carpets and supply the same to the corporation on piece-rate basis,
and there is no question of rejecting the carpets so weaved and supplied, there was no control whatsoever over the work of
the weavers and no master-servant relationship existed between the corporation and the weavers, and such weavers were
not workmen within the meaning of s 2(s).92 In Nestle India, the Punjab and Haryana High Court held that an agent
appointed to collect milk from farmers for which he was being paid a commission as an agent is not a workman of the
company within s 2(s), as the company had no control over the way the agent operated and the agent was free to appoint
others to do his job, and that the agreement which was terminated by the company was purely a commercial agreement.93
In Indian Banks Assn, it was held that in the light of the fact that the ‘deposit collectors’ engaged by a bank were
accountable to the bank and were under the control of the bank, and there was master-servant relationship between the
bank and the deposit collectors, they were workmen within the meaning of s 2(s), notwithstanding the fact that they have
no fixed time and are free to regulate their own hours of work, which was due to the nature of the job which involves
contacting depositors at such times as required by the latter. Even so, the work they were doing was completely different
from the work, which the regular employees were doing. There could thus be no question of absorption and there was also
no question of the ‘deposit collectors’ being paid the same pay scales, allowances and other services of the regular
employees of the banks.1 From the decided cases, no criterion of general application is discernible, as the question in each
case turns on its own facts and circumstances. The decisions, therefore, are rather illustrative than determinative. Some
illustrative cases, therefore, have been collected under the following four headings, viz:

(i) Employed under contract of service;

(ii) Independent contractors;

(iii) Miscellaneous cases;

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(iv) Workers employed by the contractors.

Employed under a Contract of Service - Legal Position:

Agarias engaged in a salt manufacturing company working under the supervision and control of the officers of the
company but free to engage others to assist them who were paid by the company on the basis of per maund of salt.2 A bidi
manufacturing concern engaged certain persons on contract for getting the work of rolling bidis done, who in turn further
engaged a certain number of persons for the work of rolling the bidis. The intermediaries were taking home the bidi leaves
for cutting in proper shape and the persons employed by them used to do the work of rolling the bidis in the premises of
such, intermediaries with the material supplied to them by the intermediaries.3 The workers of a match factory who used to
carry home raw materials and return finished products in a stipulated time and at fixed rates.4 A treasurer employed by a
bank under contract for running a pay office who was on the evidence on record, found to be in charge of nomination of
staff appointment and dismissal, etc.5 A carpenter employed in a soap factory for making packing.6 Coolies employed in a
mill through a contractor but being treated by the mill as its own employees regarding bonus and leave, etc.7 Cartmen
employed in a salt manufacturing factory by a mistry to load and transport the salt bags from the site of the firm to the
railway siding were the workmen qua the factory.8 An employee recruited by the coal field recruiting organisation to work
in a particular colliery was held to be a workman.9 The weavers in question paid on piecework basis, there being
regulartity of attendance, and had to work on the specified warps supplied to them by the management though having
freedom to weave as many pieces as they liked of two restricted qualities of cloth, and were entitled to the benefit of
weekly holidays and the management had the right to frame charges for misconduct and remove the weavers from work.10
The tailors working in the establishment of a tailoring house. The fact that some of the tailors also did work for other
tailoring establishments was not considered as militating against their being employees of the proprietor of the shop where
they attended for work.11

An employer had adopted two systems for getting beedis made. One was to get beedis maufactured from the licenced
persons who took the tobacco and leaves from the employer which they distributed to different other persons who made
the beedis according to specifications. The beedis were then supplied by the licencee to the employer on agreed rates. The
second method was that the employer supplied tobacco and leaves to different persons which they took to their homes and
made beedis and supplied the same to the employer at a fixed rate. These persons were known as pass-book holders
because they were supplied with pass-books in which the materials given to them and the supplies of beedis made by them,
were regularly entered. The employer also took deposit from such persons. In the circumstances and on the facts of the
case, the pass-book holders were held to be ‘employees’ of the employer while the ‘licencees’ were held not to be
‘employees’.12 The Punjab National Bank gave a certain allowance to facilitate its area manager to employ a driver. The
area manager paid this amount of allowance drawn by him by way of salary to the driver but the jeep which he was to
drive belonged to the bank. The expenses of petrol, oil and maintenance were also incurred by the bank. The area manager
had no vehicle of his own. In the circumstances, it was held that the driver was the employee of the area manager and not
of the bank.13 The court does not appear to have correctly comprehended the scope of the ‘control and direction’ test and it
is a case of clear misapplication of the principle. The employees working in a canteen within the premises of the mills and
the management of which was entrusted to a trust were held to be employees of the mills.14 The tiny deposit agents
employed in the deposit mobilisation activity of the bank have been held to be falling within the definition of ‘workmen’
and not independent contractor.15

Independent Contractors - Whether Workmen:

On the facts found in the case, it held that there was no relationship of master and servant between the owner of a bidi
factory and the concerned persons who used to roll the bidis in the factory and were independent contractors.16 Handloom
workers working as casual piece workers and who had no fixed hours of work and were paid by piece rate.17 A person
engaged under a contract as a medical officer for attending to the employees of a company, in its various establishments
daily at a prescribed time for which he was paid a fee in the shape of retainer, and who could, at his discretion, engage
another medical officer to do the same duties in his absence.18 Goldsmiths engaged by a gold merchant for manufacturing
jewels for him, where such goldsmiths were asked to finish jewels within a given time and when it was open to such
goldsmiths to finish jewels within a given time or earlier and engage themselves in other of their own.19 A goldsmith who
undertook the manufacture of ornaments like other goldsmiths which he was asked to manufacture and would receive
remuneration which would depend upon the nature of the work done, was held not to be under the order or control of the
proprietor of the concern for whom he was doing it.20 Jewellers employed by a firm of jewellery manufacturers to make
their standard products, at fixed or agreed rates and where the firm gave no general directions and had no general
directions and had no general control over these persons who could employ their own helpers of their own accord.21 A
salesman previously working on salary basis but later shifting to commission basis plus travelling allowance and not
entitled to any provident fund or leave facilities though his tour programme were approved by the employer.22 A dairy
commission agent engaged to sell milk for a dairy, in the facts and circumstances of the case was held not to be a

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‘workman’ because the agreement for selling milk with commission was not a contract of service.23 There is no
relationship of master and servant between a lawyer engaged by a company on retainer basis to look after its interests
before labour courts and conciliation authorities.24 In Puri Urban Coop Bank, a two judge Bench of the Supreme Court
held that an appraiser engaged by the bank for the purpose of weighing, testing and appraising the quantity, value and
purity of the gold ornaments pledged with the bank for raising loan is not a ‘worker’ within the meaning of s 2(s), on the
basis of the sole test of control and supervision.25 This holding is not only contrary to the earlier dicta of the court, but is
also inconsistent with the modern trends of law as the test of ‘control and supervision’ which once held the field has
receded into the background.26

Jewel appraisers appointed by Indian Overseas Bank are not workmen of the Bank in the light of the fact that: (i) they are
not required to sign in the attendance register of the bank; (ii) they were not required to make any leave application; (iii)
they were paid a minimum amount every month - in the instant case, not by the Bank, but by the loanee, (iv) they are
required to weigh the ornaments brought to the Bank for pledge and to appraise quality, purity and value, but they could
not be directed as to the manner in which it was to be done; and (v) it was not obligatory for the Bank to allot work to any
particular jewel appraiser. On facts, Pasayat J (for self and Arun Kumar J), held that Jewel Appraisers were not the
employees of the Bank.27 In Electronics Corporation, the facts disclosed that the persons were appointed on retainership
basis for repair of TV sets manufactured by the Corporation. There were no regular posts like Service Engineers or
Licencees or Retainer in the company and such contracts are entered into by the company to attend to additional work as
and when required. The company was entering into individual contracts with its retainers and there was no compulsion
whatsoever to enter into the contract year after year. Some of the workmen of the Corporation opted for working in terms
of those individual contracts as they found the same to be more lucrative and paying rather than being regular employees.
No appointment letter was ever given to them by the company. They had not enrolled their names with the employment
exchange. The retainers used to visit the company for collecting complaints, collecting components, for receiving
payments and for repairing the called back sets. The tribunal held that there was no employer-employee relationship
between the Corporation and the said retainers and that they were not the workmen of the corporation, which was set aside
by the High Court. Quashing the orders of the High Court and restoring the award of the tribunal, Pasayat J (for self and
Panta J), held that in the light of the fact that the retainers were getting Rs 90/- per set, an amount equivalent to 2.24% was
being deducted from their bills towards income tax, and that, in the event of a dispute, cl 15 of the agreement provided for
arbitration, under the Arbitration Act 1940, the said agreement was a job contract and hence they were not the employees
of the corporation.28

Employees engaged on Miscellaneous works - Whether Workmen:

A chowkidar working in the bungalow of the governing director of a company outside the premises without evidence about
his actual employment by the company or his being paid by the company or his working under the control of the company
was held not to be a workman.29 A person whose employment is prohibited by law such as a child below the age of 15
whose appointment is prohibited by s 69 of the Factories Act will not be a workmen within the meaning of the definition.30
A teacher employed in a primary school run by a factory was held not to be a workman.31A teacher working in an
educational institution is not covered by the definition of’workman’, though the institution where he is teaching may be an
industry, and consequently a reference under s 10(1)(d) of the Act is not maintainable.32 A canteen worker employed in a
textile mill was held not to be performing duties of a clerical nature; hence was found not to be a workman.33 Domestic
servants will not come under the definition of workman, as they are not employed in an industry34 A person who retires
from service and receives bonus will not fall within the definition.35 In Mineral Exploration Corporation, the facts briefly
were: the corporation engaged a few workmen as ‘contingency’ workers for years together, whereas the standing orders
provided only for ‘casual’ and ‘temporary’ workmen. The said ‘contingency’ workers were transferred from project to
project and were posted in places far away from civilization and facilities and they did not get amenities with regard to the
health and residence although such facilities are available to the permanent workmen doing similar work. The workmen
lived away from their families while working on a project and faced all types of hardships. The apex court speaking
through Lakshmanan J (for self and Panta J) observed:

Usual practice of the Corporation has been to keep contingent workmen for long duration of time and offering regular appointment
periodically which abruptly has stopped due to unfair attitude of the Management. Reduction in work leading to poor physical and
financial performance has been a result of incompetent and poor Management which cannot be allowed to play with the future of
thousands of employees and their families. ... We feel its just and proper to issue the following directions to the Tribunal which is
directed to consider the following directions and pass appropriate orders after affording opportunities to both the parties.
1. The Tribunal is directed to again scrutinize all the records already placed by the appellant-Union and also the records
placed by the Management and discuss and deliberate with all the parties and ultimately arrive at a conclusion in regard
to the genuineness and authenticity of each and every claimant for regularization. This, exercise shall be done within
nine months from the date of receipt of this judgment.

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2. Subject to the outcome of the fresh enquiry of the award, the respondent-Corporation should absorb them permanently
and regularize their services, the persons to be so appointed being limited to the quantum of work which may become
available to them on a perennial basis.
3. The respondent-Corporation may absorb on permanent basis only such of those workmen who have not completed the
age of superannuation.
4. The respondent-Corporation are not required to absorb on permanent basis such of the workmen who are found medically
unfit for such employment.
5. The absorption of the eligible workmen on a regular and permanent basis by the Corporation does not disable the
Corporation from utilizing their services for any other manual work for the Corporation upon its needs.
6. In the matter of absorption, the persons who have worked for longer period as contingent workmen/ad hoc/temporary
shall be preferred to those who have to be in shorter period of work.
7. The workman should have worked for more than 240 days in a year. The conduct and behaviour of the workman should
be good.36

Part-time workers - Whether Workmen:

In Silver Jubilee Tailoring (supra), the Supreme Court held that tailors working on a part-time basis in a tailoring shop fall
within the definition of ‘workman’. Part-time carpenters and polishmen engaged in the factory were workmen.37 A doctor
employed in the industry for rendering medical aid to its employees on a part-time basis was a workman.38 The definition
is sufficiently wide to include ‘a part-time employee.39 A class IV employee working on a part-time basis was a
workman.40 However, the High Courts of AP,41 and Kerala,42 held that a part-time employee would not fall within the
definition of ‘workman’ within the meaning of 2(s). A person, who is a permanent employee of some other employer and
working under another employer as a temporary employee on a part-time basis, is not a workman within the meaning of s
2(s) entitled to raise an industrial dispute as against the second employer, and is not entitled to compensation under s 25F
in the event of his termination.43 However, a single Judge of the Rajasthan High Court took a different view and observed
that the word ‘part-time’ had nothing to do with the nature of employment; it only regulates the duration of working hours
of the employee; a part-time employee also falls within the definition; and that, at the most, he might be paid back-wages
as he had been paid as part-time employee and that he could not claim back wages on the basis of wages which a full-time
employee was entitled to.44 In Municipal Board, Pratapgarh, Garg J, of Rajasthan High Court held that a part-time worker
is a ‘workman’ within the meaning of the Act and that the illegality or irregularity in making the appointment could not be
a ground for refusing to comply with s 25F.45A workman employed on a part time basis but under the control and
supervision of an employer is a workman in term of s 2(s) of the Act, and is entitled to claim the protection of s 25F
thereof, should the need so arise.46 This controversy was set at rest by Supreme Court in Devinder Singh, in which Singhvi
J (for self and Ganguly J), observed:

The source of employment, the method of recruitment, the terms and conditions of employment/contract of service, the quantum of
wages/pay and the mode of payment are not at all relevant for deciding whether or not a person is a workman within the meaning
of Section 2(s) of the Act. ... It is apposite to observe that the definition of workman also does not make any distinction between
full-time and part-time employee or a person appointed on contract basis. There is nothing in the plain language of Section 2(s)
from which it can be inferred that only a person employed on regular basis or a person employed for doing whole-time job is a
workman and the one employed on temporary, part- time or contract basis on fixed wages or as a casual employee or for doing
duty for fixed hours is not a workman. ... Whenever an employer challenges the maintainability of industrial dispute on the ground
that the employee is not a workman within the meaning of Section 2(s) of the Act, what the Labour Court/Industrial Tribunal is
required to consider is whether the person is employed in an industry for hire or reward for doing manual, unskilled, skilled,
operational, technical or clerical work in an industry. Once the test of employment for hire or reward for doing the specified type of
work is satisfied, the employee would fall within the definition of ‘workman’.47 (Italics supplied)

Sub-contractor - Whether Workman:

It has been seen that a contractor is not a workman within the meaning of s 2(s). The same principle will govern a sub-
contractor. Hence, ‘a sub-contractor is not the servant of the contractor employing him’.48 Likwise, a servant of a sub-
contractor is not prima facie the servant of the person who engages the contractor.49 A few illustrations are: The employer
company had agreed to see that the contract labour was paid in the manner indicated in the settlement. But there was no
evidence to show that the labourers so employed by the contractor were employees of the employer company. It was,
therefore, held that there was no relationship of master and servant between the company and the labourers employed by

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the contractor.50 A labourer employed by an independent contractor who looked only to the contractor for his wages and
over whom the company for whom the contractor was working had no control or supervision was held not to be a
workman of the company.51 The labourers working in a colliery under a contractor were held not to be workmen of the
colliery and the fact that the manager of the colliery had the power to suspend such labour under the Mining Act was held
immaterial in determining the employer-employee relationship.52

Place of Work - Its relevance in determining whether a person is Workman:

The location of a worker is of no material consequence, because all would contribute directly or indirectly to the ultimate
planned result. The preposition in before ‘any industry’ in the definition of ‘workman’ has been used by the legislature to
signify the inclusion of the persons employed, and not their position or location in the industry as a whole. Applying this
principle, it was held that the domestic servants in the quarters of the officers employed by the employer company in
connection with the sugar manufacturing business were workmen.53 Likewise, the malis (gardeners) employed in the
bungalows of the officers and directors of a company were held to be ‘employed in the industry’ to do the work which was
incidentally connected with the main industry.54 In the under-noted cases,55 the fact that the bidi workers and
intermediaries were doing the rolling of the bidis in their own houses was held not to be inconsistent with the existence of
the relationship of the master and servant between the employer and the bidi rollers. In UP Sugar and Cane Development
Corporation, it was held that a demand for declaring seasonal workers employed in a sugar mill as permanent workmen is
not a case of mere fitment as per the nature of duties performed, but one which involves the exercise of managerial
function, and that a labour court cannot give such declaration.56

Contract Workers employed in canteens - Whether Workmen:

On the question, ‘whether the workmen employed in the canteens, provided by the industrial or commercial-
establishments, are the employees of such establishments’?, there was a divergence of judicial opinion. In Saraspur Mills
(supra), the Supreme Court held that the workers employed in such a canteen, even if run by a co-operative society, were
the workmen of the factory, as it was under a mandatory obligation to maintain and run the canteen. In MMR Khan, ealing
with the canteens run by various railway establishments, the court classified such canteens into three categories, ie:

(a) statutory canteens, ie, canteens compulsorily required to be provided by statute, ie, section 46 of the Factories Act 1948
or any other provision of law;
(b) non statutory recognised canteens set up as a staff welfare measure, but with prior approval and recognition of the railway
board as per the procedure detailed in the railway establishment manual; and
(c) non-statutory, non-recognised canteens, ie, those which were established without prior approval or recognition of the
railway board.57

In this case, the workmen employed in the statutory canteens were held undoubtedly to be the employees of the railway
establishments, and in view of the provisions of railway establishment manual, the workmen employed in the non-statutory
recognised canteens were also held to be the employees of the railway establishments. But the employees of the non-
statutory, non-recognised canteens were held not to be the employees of the railway establishments. In All India Rly
Institute Employees Assn, Sawant J held that the employees in railway institutes/clubs could not be treated as employees of
the railways because the provision of such institutes/clubs was not mandatory as they were established only as a part of
welfare measure for the railway staff.58 However, in Parimal Chandra Raha, the learned judge enunciated the following
principles:

(i) Where, as under the provisions of the Factories Act, it is statutorily obligatory on the employer to provide and maintain
canteen for the use of his employees, the canteen becomes a part of the establishment, and therefore, the workers
employed in such canteen are the employees of the management.
(ii) Where, although it is not statutorily obligatory to provide a canteen, it is otherwise an obligation on the employer to
provide a canteen, the canteen becomes a part of the establishment and the workers working in the canteen, the
employees of the management. The obligation to provide a canteen has to be distinguished from the obligation to
provide facilities to run canteen. The canteen run pursuant to the latter obligation, does not become a part of the
establishment.
(iii) The obligation to provide canteen may be explicit or implicit. Where the obligation is not explicitly accepted by or cast
upon the employer either by an agreement or an award etc, it may be inferred from the circumstances, and the provision
of the canteen may be held to have become a part of the service conditions of the employees. Whether the provision for
canteen services has become a part of the service conditions or not, is a question of fact to be determined on the facts

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and circumstances in each case. Where to provide canteen services has become a part of the service conditions of the
employees, the canteen becomes a part of the establishment and the workers in such canteen become the employees of
the management.
(iv) Whether a particular facility or service has become implicitly a part of the service conditions of the employees or not, will
depend, among others, on the nature of the service/facility, the contribution the service in question makes to the
efficiency of the employees and the establishment, whether the service is available as a matter of right to all the
employees in their capacity as employees and nothing more, the number of employees employed in the establishment
and the number of employees who avail of the service, the length of time for which the service has been continuously
available, the hours during which it is available, the nature and character of management, the interest taken by the
employer in providing, maintaining, supervising and controlling the service, the contribution made by the management
in the form of infrastructure and funds for making the service available etc.59

In view of this statement of law, the court held that the canteen had become a part of the establishment of the life insurance
corporation. The canteen committee, the cooperative society of the employees and the contractors engaged from time to
time were in reality, the agencies of the corporation and there was only a veil between the corporation and the canteen
workers who, in fact, were the employees of the corporation. The court, therefore, directed the corporation to prescribe
different service conditions for different types of employees and pending such prescription of service conditions, the
corporation should pay to all the employees the minimum of the salary presently being paid to class 4 employees together
with allowances and special facility, if any, and other benefits available to class 4 employees. But in Reserve Bank of
India, a larger Bench of the court noticed that admittedly, there was no statutory liability cast on the bank to run a canteen
under s 46 of the Factories Act 1948 and also observed that the Industrial Dispute Act does not contain extended definition
of ‘employer’. Therefore, in the absence of any obligation statutory or otherwise, regarding running of a canteen by the
bank, similar to Factories Act or railway establishment manual, and in the absence of any effective or direct control in the
bank to supervise and control the work done by various persons, the workers in the canteens run by the implementation
committee (canteen committee) could not come within the ratio of MMR Khan (supra). In this case, by way of subsidy, the
bank bore to the extent of 90 per cent of the expenses incurred by the canteen for payment of salary, provident fund
contribution, gratuity and uniform etc. The bank, also provided premises, fixtures, utensils, furniture, electricity, water etc,
free of charge. The canteens were run either by ‘implementation committee (canteen committee)’ or a ‘co-operative
society’ or ‘contractors’. The dispute, in this case, was as to ‘whether 166 employees engaged in various canteen
establishments of the Reserve Bank of India at Bombay were the workers of the Reserve Bank of India’? In the fact of this
case, the court held:

In the absence of any statutory or other legal obligation and in the absence of any right in the bank to supervise and control the
work or the details thereof in any manner regarding the canteen workers employed in three types of canteens, it could not be said
that the relationship of master and servant existed between the bank and the various persons employed in the three types of
canteens. 60

Therefore, the 166 persons mentioned in the list attached to the reference were not workmen of the Reserve Bank of India.
Hence, the demand for their regularisation was unsustainable and they were not entitled to any relief. The court considered
it unnecessary to go into the questions as to what extent propositions the no. (iii) and (iv) stated in Parimal Chandra, were
required to be clarified or modified. The facts of the Parimal Chandra and Reserve Bank were quite similar and, in both
the cases, it was not mandatory for the employers to provide canteens but the application of the principles stated in
Parimal Chandra is irreconcilably at variance with Reserve Bank. In Coates of India, the court had to deal with the
question, as to ‘whether the workmen employed in the canteen run on the premises of the factory were the employees of
the company’? The stand of the employer was that they were the employees of the contractor who was running the canteen
in the factory premises. The court observed that some requirement under the Factories Act of providing a canteen in the
industrial establishment was by itself not decisive of the question or sufficient to determine the status of the persons
employed in the canteen. In these circumstances, the court refrained from expressing its opinion on the question in view of
the findings of fact recorded by the High Court to the effect that the workmen were employed only by the contractors who
were running the canteen and they were not the employees of the company. Thus, the court concluded that these workmen
could not be held to be employed by the company. 61

In Bombay Canteen Employees’Assn, in view of certain admission made by the employees, the Supreme Court took the
view that such employees were not ‘workmen’ within the meaning of the definition of s 2(s) of the Act. Therefore, the
industrial adjudication on a reference under s 10(1) of the Act was not permissible. The court, however, suggested that
since the canteen was a statutory canteen, the remedy of approaching the administrative tribunal under s 19 of the
Administrative Tribunals Act 1985 and the extraordinary remedy by way of writ petition under Art. 226 are available to

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such employees and it is open for them to resort to such remedies.62 In State Bank of India, the Supreme Court held that the
employees working in the canteens run by the local implementation committees at the branches of State Bank of India as
per the welfare scheme of the bank were non-statutory and non-recognised canteens, and that the employees of such
canteens would not become the employees of the bank as there was no statutory or contractual obligation or obligation,
under the Sastri award, on the bank to run such canteens.63 Even though postal department discharges sovereign functions,
nevertheless the activity of running a departmental non-statutory canteen for the employees is not a sovereign activity, is
severable and is an industry and the person employed as a cook in such a canteen is a ‘workman’ within the meaning of s
2(s).64 Following the decision of the apex court rendered in Bombay Telephone CE Assn, the Bombay High Court held that,
in terms of the notifications issued by the Government of India, all posts in the canteen and tiffin rooms run departmentally
in the Central Government offices or establishments are civil posts, and hence, the employees cannot be called as
‘workmen’ within the meaning of s 2(s) of the ID Act.65 In NTPC,66 and MDNL,67 Rajendra Babu J, relied upon a passage
extracted from the SAIL case, which runs thus:

We have gone thorough the decisions of this Court in VST Industries’ case,68GB Pant University’s case,69 and Mohammed Aslam’s
case.70 All of them relate to statutory liability to maintain the canteen by the principal employer in the factory/establishment. That
is why in those cases, as in the Saraspur Mills’ case,71 the contract labour working in the canteen were treated as workers of the
principal employer. These cases stand on a different footing and it is not possible to deduce from them the broad principle of law
that on the contract labour system being abolished under sub-section (1) of section 10 of the CRLA Act (sic) the contract labour
working in the establishment of the principal employer has to be absorbed as regular employees of the establishment. () ... An
analysis of the cases, discussed above, shows that they fall in three classes: (i) where contract labour is engaged in or in connection
with the work of an establishment and employment of contract labour is prohibited either because the industrial adjudicator/Court
ordered abolition of contract labour or because the appropriate Government issued notification under section 10(1) of the CLRA
Act, no automatic absorption of the contract labour working in the establishment was ordered; (ii) where the contract was found to
be a sham and nominal, rather a camouflage, in which case the contract labour working in the establishment of the principal
employer were held, in fact and in reality, the employees of the principal employer himself. Indeed, such cases do not relate to
abolition of contract labour but present instances wherein the Court pierced the veil and declared the correct position as a fact at the
stage after employment of contract labour stood prohibited; (iii) where in discharge of a statutory obligation of maintaining a
canteen in an establishment the principal employer availed the services of a contractor the Courts have held that the contract labour
would indeed be the employees of the principal employer.”72 ()

The reliance placed by Rajendra Babu J on the above observations of the Constitution Bench in SAIL case calls for some
analysis. At the time of deciding Saraspur Mills, the Contract Labour Act was not in force, as the matter relating to its
Constitutional validity was pending in the apex court. Hence, the facts of the said case or the decision rendered therein can
be of no help in deciding the issues raised in MDNL and NTPC. In GB Pant University the facts disclosed that the
employees working in the university cafeteria were not engaged through the medium of contractor, but were appointed by
the Food Committee which had a specific role in the management and control of the cafeteria. The Contract Labour
(Regulation and Abolition) Act 1970 (CLRAA) was neither applicable to the case nor were the provisions of the said Act
cited by counsel on either side before the Supreme Court. Hence, this decision too cannot throw any illuminating light on
the cases at hand. In VST Industries, Rajendra Babu J (for self and Variava J), having quashed the writ of mandamus issued
by the Andhra Pradesh High Court on the ground that it was beyond its jurisdiction, surprisingly allowed the said order to
stay! The relevant observations of the learned judge are reproduced below:

We do agree that the respondents have a strong case on merits. Since we have held that the High Court had no jurisdiction to
entertain a petition under Article 226 of the Constitution, we would have set aside the order made by the High Court. However, in
the special features of the case, although we do not agree with the High Court on the first question raised, we feel, after clarifying
the legal position, that we should not disturb the decision given by the High Court. The appeal, therefore, stands dismissed subject
to what is stated in regard to writs to be issued by the High Court in respect of persons or authorities exercising public duty or
otherwise.73 (Italics supplied).

Prima facie, this is a perverse decision for the reason that once it is held that the mandamus issued by the High Court was
without jurisdiction, status quo ante stands automatically restored, and nothing would be left for the court to decide
thereafter. It is true that the respondents had a strong case, but, then, where does the remedy lie - is it in the Constitution of
India or in the Industrial Disputes Act? Having held that the High Court had no jurisdiction to entertain a petition under
Art. 226, what was the provocation for the learned judge to allow the order of the High Court to stand?What are the so-
called special features of the case that enchanted and persuaded the learned judge? Could it still be said that this can be
classified as a ‘judicial decision’ properly so called? Reverting to the cases cited in SAIL and relied upon by Rajendra
Babu J, the fourth one is that of Mohammed Aslam, which centred round the short question ‘whether the employees in the

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unit-run canteens of defence services are government employees, and whether Central Administrative Tribunal had
jurisdiction to entertain applications by them under the provisions of the Administrative Tribunals Act, 1985’. Again,
CLRAA had no application to that case, and neither side had cited the Act nor had raised any issue thereunder. Thus, none
of the cases referred to by Rajendra Babu J, barring VST Industries, was relevant to the issues raised in the case at hand,
and VST Industries was decided by himself in a desolate manner, as explained above.

The mere fact that an employer is under a statutory obligation to provide for a canteen in his factory does not give rise to
the further presumption that he is required to engage regular workers in running the canteen. Factories Act and Contract
Labour Act serve different objects and the one has nothing to do with the other. With great respect, it has to be stated that
Rajendra Babu J, has decided all the three cases, ie, VST Industries, MDNL and NTPC in a perfunctory manner, with
absolutely no application of judicial mind. In striking contrast, the decision rendered by Ashok Bhan J in Haldia Refinery
places the law in the proper perspective. The learned judge held that the mere fact that the management exercises effective
control over the contractor in the running of the canteen does not mean that the employees working in the canteen become
the employees of the management. The learned judge further observed that canteen employees would be employees of
management only for limited purpose of Factories Act, and they cannot claim absorption or regularisation in the services
of management.74 It is submitted that Haldia Refinery lays down the correct law. In the event of any doubt as to the
engagement of contract workers in statutory canteens, it will do well for any court at any level to follow Haldia Refinery
and reject all the other three cases, namely, VST Industries, MDNL and NTPC outright as being perverse and absurd. In
Rourkela Shramik Sangh, the litigagtion relating to the absorption of contract workers in the regular services of Rourkela
Steel Plant had long history. In order to appreciate the issues raised in this case, it is necessary to take a look at the decision
rendered in RK Panda, in which the workers of the Rourkela Steel Plant filed a writ petition before Supreme Court, inter
alia, for a direction to the effect that that they were entitled to be paid the same pay as is paid to the regular employees;
that they be treated as such on the premise that they had been employed by various contractors and were doing jobs which
are perennial in nature and identical to what were being done by regular employees of the Plant. The relevant portion of the
direction is reproduced below:

(i) All labourers, who had been initially engaged through contractors but have been continuously working with the
respondent for the last ten years on different jobs assigned to them in spite of the replacement and change of the
contractors, shall be absorbed by the respondent, as their regular employees subject to being found medically fit and if
they are below 58 years of age, which is the age of superannuation under the respondent.

(vi) The respondent shall be at liberty to retrench workmen so absorbed, in accordance with law. This order shall not be
pleaded as a bar to such retrenchment.
(vii)If there is any dispute in respect of the identification of the contract labourers to be absorbed as directed above, such
dispute shall be decided by the Chief Labour Commissioner (Central), on material produced before him by the parties
concerned.
(viii) This direction shall be operative only in respect of 142 jobs out of 246 jobs, in view of the fact that contract labour has
already been abolished in 104 jobs.75

The appellant workmen had filed interlocutory applications with the following prayers:

(a) That the respondents be directed to regularize the service of all the workmen working in any of the 246 jobs at the time of
filing of this petition and continuously working since then;
(b) Clarify that the standards of medical fitness to be applied in case of these workmen should be the standards used for
regular workmen for their retrenchment;
(c) Clarify that this judgment dated 12-5-94 would also apply to those workmen who had been retrenched in 1990 and 1992
and have not yet been taken back in employment;
(d) Direct the respondents to pay wages to those 292 workmen who were kept out of employment for the period 22-5-89 to
30-11-89, contrary to the orders of this Court.

The workmen did not press prayers (a) & (b), whereas in respect of prayers (c) & (d), the Supreme Court clarified that if
any of the workmen is not absorbed/regularized despite this court’s directions/orders, the workmen concerned would be at
liberty to pursue any other remedy or may approach any other authority prescribed under law. Pursuant thereto 5340

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applications were received and out of said applicants 2677 applicants were found eligible for absorption, whereas the
remaining cases of 2663 workmen were referred to the CLC in terms of the said judgment. The CLC passed his detailed
orders on January 4, 1995. Reverting to the present case, the interpretation placed by Delhi High Court on an order passed
in RK Panda (supra), was challenged by the union before the Supreme Court. Dismissing the petition, Sinha J (for self,
Khare and Lakshmanan JJ) held:

... the appellants were fully aware of the fact that they were required to approach the Industrial Tribunal in terms of the provisions
of the Industrial Disputes Act for ventilating their grievances. ... The order of this Court dated 16th October, 1995, as quoted supra,
is absolutely clear and unambiguous.The term ‘authority’ used in this Court’s order dated 16th October, 1995 must be read in the
context in which it was used. The appellant in terms thereof could seek a reference which would mean a reference in terms of
Section 10 of the Industrial Disputes Act. It could also approach ‘the authority in accordance with law’ which would mean
authority under a statute. The High Court, by no stretch of imagination, can be an authority under a statute. ... Furthermore, even
otherwise, a disputed question of fact normally would not be entertained in a writ proceeding. ... In any event, the orders of the
Chief Labour Commissioner dated 4th January, 1995 also shows that other documents which were placed on record by the
workmen had also been scrutinized and they had not been found reliable. ... We are, therefore, of the opinion that no case has been
made out for interference with the impugned judgment.76

Burden of proof:

The burden of proof is on the workman to establish the employer-employee relationship. In other words, where a person
asserts the relationship and it is denied by the employer, it is for him and not for the employer to prove the fact.77 In order,
therefore, to bring a dispute within the ambit of the definition of ‘industrial dispute’, the workmen have to plead and prove
the relationship of employment between them and the employer in relation to an establishment, by adducing evidence
before the tribunal. In discharging the burden, the workmen may call for the books of accounts or any other records or
documents in possession of the employer. If he refuses to produce them an inference may be drawn against him that if the
documents had been produced, they would have shown what the opposite party wanted to make out. But in the absence of
a specific plea taken by the workmen that the employer-employee relationship exists between them and the employer, no
adverse inference against the employer can be drawn from the fact that he did not produce his books of accounts.78 Once
the relationship of employer and employee is established, then it is for the employer to show that the employee concerned
fails in one of the excepted categories and as such is not a workman.79 The question, whether the relationship between the
parties is one of employer and employee, is a pure question of fact.80 But the status of a workman has to be inferred as a
matter of law from the facts found and if the question involved is one of drawing a legal inference as to the status of a
party from the facts found, that is not a pure question of fact. If the inference drawn by the tribunal in regard to the status
of the workman involves the application of certain legal tests, that necessarily becomes a mixed question of fact and law.81
The question, whether the relationship of employer and employee exists ought to be raised as a preliminary issue because
on the determination of this issue will depend the validity of the reference. The mere fact that a preliminary issue is raised
with respect to the existence of relationship does not mean that sufficient evidence should not be adduced by the parties in
support of their respective contentions. In the absence of relationship of employer and employee, the reference will be
invalid and the tribunal will have no jurisdiction to adjudicate upon the dispute. But where tribunal after considering the
evidence comes to the finding that such relationship exists, the writ court will normally not interfere with such a finding of
fact.82 However, the issue being a jurisdictional issue will be amenable to judicial review, if the finding is manifestly or
obviously erroneous or perverse.83

44 Novex Dry Cleaners v Workmen (1962) 1 LLJ 271 [LNIND 1962 SC 50] (SC), per Gajendragadkar J.
45 Thomas Duff and Co (India) Ltd v Fourth IT 1983 Lab IC 1243, 1248-49 (Cal) (DB), per MK Mukherjee J.
46 Mgmt of Kirlampudi Sugar Mills Ltd v Industrial Tribunal (1971) 2 LLJ 491 [LNIND 1971 SC 414], 503 (SC) : (1973) 3 SCC 626
[LNIND 1971 SC 414], per Jaganmohan Reddy J.
47 Mgmt of Shri CVKUS Mandali Ltd v IC (1979) 2 LLJ 383 [LNIND 1979 SC 357], 392 (SC), per Kailasam J.
48 TM Abdul Rahim & Co v North Arcot DBW Union (1958) 2 LLJ 736 (Mad), per Rajagopalan J.
49 Airlines Hotel Pvt Ltd v Workmen (1961) 1 LLJ 663 [LNIND 1961 SC 16], 666 (SC) AIR 1962 SC 676 [LNIND 1961 SC 16]:
1961 (3) FLR85:, per Das Gupta J.

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50 Cochin State Power, Light Corpn Ltd v Workmen (1964) 2 LLJ 100 [LNIND 1963 SC 143] (SC), per Wanchoo J.
51 KEH Abdul Samad Saheb & Co v IT (1963) 1 LLJ 504, 507 (Mad), per Veeraswami J.
52 Bangur Bros Ltd v Govt of West Bengal (1961) 2 LLJ 351, 359-60 (Cal), per Sinha J.
53 Workmen of Shri Bajrang Jute Mills v The Employers (1970) 2 LLJ 6 (SC), per Vaidialimgam J.
54 Government of India (2002), Report of NCL-II, chap 13, p 38, para 6.32.
55 State of Rajasthan v Ganeshi Lal AIR 2008 SC 690 [LNIND 2007 SC 1440]:: [2007] 1 SCR 1197 [LNIND 2007 SC 1440] : 2008
(2) SCC 533 [LNIND 2007 SC 1440] : 2007 (13) JT 423 : 2007 (14) SCALE 61 [LNIND 2007 SC 1440], per Pasayat J.
56 Hutchiah v Karnataka State Road Transport Corpn (1983) 1 LLJ 30, 36 (Kant) (DB), per Rama Jois J.
57 Elumalai v Mgmt of Simplex Concrete Piles (India) Ltd (1970) 2 LLJ 454 (Mad) : 1970-83-LW 317, per Ismail J.
58 Hutchiah v Karnataka State Road Transport Corpn (1983) 1 LLJ 30, 37 (Kant) (DB), per Rama Jois J.
59 SK Verma v Mahesh Chandra 1983 Lab IC 1483 [LNIND 1983 SC 233], 1485 (SC), per Chinnappa Reddy J.
60 Sarabhai Chemicals v Subhas N Pandya (1984) 2 LLJ 75, 77 (Guj) (DB), per Poti CJ.
61 Satyendra Singh Rathore v Rajasthan Rajya Pathya Pustak Mandal Jaipur (1989) 2 LLJ 289, 292 (Raj) (DB), per Byas J.
62 R Antony v Renusagar Power Co Ltd (1996) 2 LLJ 329 [LNIND 1995 ALL 886] (All), per VN Mehrotra J.
63 RG Makwana v Gujarat SRTC (1987) 1 LLJ 172 -73 (Guj) (DB), per Kokulakrishnan CJ.
64 Dy Executive Engineer v Prafulbhai V Virda (2008) 2 LLJ 958 (Guj), per Rathod J.
65 Kamyani Vidya Mandir v Sangeeta Eknath Sanghpal (2008) 1 LLJ 712 [LNIND 2007 BOM 1145] (Bom) : 2007 (6) Bom CR50.
66 Stroud’s Judicial Dictionary, 1986, 5th ed, Vol 1, p 159.
67 Halsbury’s Laws of England, Vol 16, p 377.
68 Cf R v Edingale (Inhabitants) [1930] 1 QB & C 379.
69 Employees’ State Insurance Corpn v Tata Engineering & Locomotive Co Ltd (1976) 1 LLJ 81 [LNIND 1975 SC 393] (SC), per PK
Goswami J.
70 EM Rao, Industrial Jurisprudence: A Critical Commentary, 2015, 2nd ed, pp 161-3.
71 Employees ‘State Insurance Corpn v Tata Engg & Locomotive Co Ltd (1976) 1 LLJ 81 [LNIND 1975 SC 393], 85 (SC) : AIR 1976
SC 66 [LNIND 1975 SC 393]: (1975) 2 SCC 835 [LNIND 1975 SC 393], per PK Goswami J.
72 Hanuman Prasad Choudhary v Rajasthan SEB 1986 Lab IC 1014 (Raj) per SC Agrawal J.
73 Cf, Deep Chand v State of Uttar Pradesh AIR 1959 SC 648 [LNIND 1959 SC 3],665 per SR Das CJI.
74 Narinder Kumar v State of Punjab 1985 Lab IC 541 -42, per Chandrachud CJI.
75 Mgmt of Tungabhadra Sugar Works Pvt Ltd v LC 1983 Lab IC 1185, 1187-88 (Kant) (DB), per Malimath J.
76 Patel P Somnath v Gujarat State LDC Ltd 1992 Lab IC 2370, 2380-81 (Guj), per SD Shah J.
77 Abdul Aziz v Rajasthan SRTC [1992] 2 WLC 558 (Raj).
78 Rajasthan SRTC v Jagdish Vyas (1995) 2 LLJ 387 -88 (Raj) (DB): [1995(70)FLR723].
79 Rajasthan SRTC v Mahavir Singh (1999) 2 LLN 609 (Raj), per Chauhan J.
80 Gujarat Electricity Board v Ballkhan D Joya (2000) 3 LLN 747 (Guj), per Bhatt J.
81 Textile traders Cooperative Bank Ltd v JN Patel (2000) 3 LLN 766 (Guj), per Rathor J.
82 Ram D Paswan v LC (1999) 2 LLN 571 (Pat) (DB), per Sharma J.
83 UP State Electricity Board v PO, LC (2003) 3 LLJ 88 (All) : (2002) 5 AWC 3956, per Vineet Saran J.
84 UP State Electricity Board v AK Shukla (2003) 2 LLJ 1013 [LNIND 2003 ALL 504] (All) : (2003) 3 AWC 2266 [LNIND 2003
ALL 504], per Dr Chauhan J.
85 Trambak Rubber Industries Ltd v Nashik Workers’ Union (2003) 3 LLJ 226 [LNIND 2003 SC 556] (SC),: AIR 2003 SC 3329
[LNIND 2003 SC 556]: (2003) 6 SCC 416 per Reddi J.
86 Nashik Workers Union v Trimbak Rubber Industries (2002) 1 LLN 861 (Bom), per Chandrachud J.
87 Mgmt of Audco India Ltd v PO, Principal LC (2009) 3 LLJ 700 (Mad)
88 State of Haryana v Satish Kumar (2013) 3 LLJ 281 (P&H), per RN Raina J.

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89 UP State Electricity Board v Shiv Mohan Singh, AIR 2004 SC 5009 [LNIND 2004 SC 1025]: 2004 (Supp-4) SCR 953 : 2004 (8)
SCC 402 [LNIND 2004 SC 1025], per Mathur J.
90 National Small Industries Ltd v V Lakshminarayanan (2007) I LLJ SC 571(SC), per Kabir J.
91 EM Rao, Industrial Jurisprudence: A Critical Commentary, 2015, 2nd ed, p 164
92 Assam Oil Co Ltd v Workmen (1960) I LLJ 587 (590) (SC) : AIR 1960 SC 1264 [LNIND 1960 SC 108]: 1960 (1) FLR 190 :
[1960] 3 SCR 457 [LNIND 1960 SC 108], per Gajendragadkar J.
93 CMD, Mahanadi Coal Fields Ltd v Sadashib Behera, (2005) I LLJ 870(SC) : (2005) 2 SCC 396 [LNIND 2005 SC 14] : (2005)
SCC (LS) 289 : [2005] 1 SCR 60 [LNIND 2005 SC 14], per Mathur J.
94 Workmen of Swatantra Bharat Mills v Mgmt 1984 Lab IC 1235 (Del), per GC Jain J.
95 Basti Sugar Mills Ltd v Ram Ujagar (1963) 2 LLJ 447 [LNIND 1963 SC 93] (SC) AIR 1964 SC 355 [LNIND 1963 SC 93]: 1963
(7) FLR253, per Das Gupta J.
1 Saraspur Mills Co Ltd v Ramanlal Chimanlal (1973) 2 LLJ 130 [LNIND 1973 SC 128], 132-33 (SC) : AIR 1973 SC 2297
[LNIND 1973 SC 128]: 1973 (26) FLR 294 : (1973) 14 GLR 948 : 1973 Lab IC 1040 [LNIND 1973 SC 128] : (1974) 3 SCC 66
[LNIND 1973 SC 128], per Grover J.
2 JK Cotton Spg and Wvg Mills Co Ltd v LAT (1963) 2 LLJ 436 [LNIND 1963 SC 157], 440-441 (SC), per Gajendragadar J.
3 Workmen of Food Corpn of India v Food Corpn of India (1985) 2 LLJ 4 [LNIND 1985 SC 71], 9 (SC) : AIR 1985 SC 670
[LNIND 1985 SC 71]: 1985 (1) SCALE 344 [LNIND 1985 SC 71] : (1985) 2 SCC 136 [LNIND 1985 SC 71], per Desai J.
4 Jaya Nand v Hindustan Machine Tools Ltd (2002) 3 LLN 504 (P&H), per Anan d J.
5 Telco Convoy Drivers Mazdoor Sangh v PO, IT (2001) 4 LLN 1084 Ohar), per Eqbal J.
6 Ready Mixed Concrete Ltd v Minister of Pensions and National Insurance [1968] 2 WLR 775 (QB), per Mackenna J.
7 Halsbury’s Laws of England, 1958, Vol 25, 3rd ed, p 448.
8 Bonham v Zurich General Accident & Liability Insurance Co Ltd [1945] KB 292, 300 (CA), per Uthwatt J.
9 Dharangadhara Chemical Works Ltd v State of Saurashtra (1957) 1 LLJ 477 [LNIND 1956 SC 99], 480 (SC), per Bhagwati J.
10 Vamplew v Parkgate Iron and Steel Co [1903] 1 KB 851 (CA).
11 Thorn v London Corpn [1875] LR 10 Exch 112,123.
12 Halsbury’s Laws of England, 1958, Vol 25, 3rd ed, pp 455-56, para 884.
13 Thacker Coal and Coke Co v Burke 5 LRA (NS) 1091-98, Annotated cases 885.
14 Pugmire v Oregon Short Line R Co 13 LRA (NS) 565; 14 Annotated cases 384.
15 R v Pendleton (Inhabitants) [1812], 15 East 449, 453-54, per Lord Ellenborough CJ.
16 R v Lyth (Inhabitants) [1793] 5 Term Rep 327-29, per Lord Kanyon CJ.
17 Gregory-Stoke Parish v Pitmister [1726] 2 Sess Cas KB 132.
18 Fisk v Pollard [1920] AR 39; Lopes v Marino [1939] AR 188.
19 Roundabout Ltd v Beirne [1959] IR 423.
20 Kassler’s Estate 41 Am St rep 74.
21 Davis v Industrial Commission 15 AIR 732.
22 CB Labatt, Master and Servant, 1913, p 9.
23 35 American Jurisprudence, Ist ed, p 445.
24 National Labour Relations Board v Hearst Publications 88 L Ed 1170, 1178, per Rutledge J.
25 Stevenson Jordan & Harrison Ltd v Macdonald and Evans [19 5211 TLR 101, 111 (CA), per Denning LJ.
26 35 Arnrican Jurisprudence, 445-46, s 3.
27 Chintaman Rao v State of Madhya Pradesh (1958) 2 LLJ 252 [LNIND 1958 SC 11], 256 (SC), per Subba Rao J.
28 Mersey Docks & Harbour Brd v Coggins & Griffith Liverpool Ltd [1947] AC 1 (CA), per Lord Porter.
29 Ibid, 14 per Lord Mcmillan.
30 Argent v Minister of Social Security [1968] 1 WLR 1749 (QB), per Roskill J.
31 Whittaker v Minister of Pensions and National Insurance [1966] 3 All ER 531, 537 (QBD), per Mocatta J.

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32 Halsbury’s Laws of England, 1958, Vol 25, 3rd ed, p 498.

33 Shankar Balaji Waje v State of Maharashtra (1962) 1 LLJ 119 [LNIND 1961 SC 342], 124 (SC), per Raghubar Dayal J.
34 Collins v Hertfordshire County Council [1947] 1 All ER 633, 638. .
35 Stevenson, Jordan & Harrison Ltd v Macdonald & Evans [1952] 1 TLR 101, 111 (CA), per Lord Denning LJ.
36 Bank Voor Handel Scheepvaart v Slatford [1951] 2 All ER 779, per Denning LJ.
37 Hedley v Pinkney & Sons Steamrhip Co [1892] 1 QB 58, per Lord Esher, MR.
38 Inglefield v Macey [1966-67] 1, Knights (Indus) Rep 146, per Ashworth J.
39 Zuijs v Wirth Bros Proprietary Ltd [1955] 93 CLR 561, 571.
40 Hedley v Pinkney & Sons Steamship Co [1892] 1 QB 58, per Lord Esher MR.
41 Morren v Swinton and Pendlebury Borough Council [1965] 1 WLR 576, 582, per Lord Parker CJ.
42 Zuijs v Wirth Bros Proprietary Ltd [1955] 93 CLR 561, 571.
43 Hedley v Pinkney & Som Steamship Co [1892] 1 QB 58, per Lord Esher MR.
44 Performing Right Society v Mitchell & Booker Ltd [1924] 1 KB 762, 767, per Mccardie J.
45 Birdhichand Sharma v First Civil Judge, Nagpur (1961) 2 LLJ 86 [LNIND 1960 SC 326]-87 (SC), per Wanchoo J.
46 Ready Mixed Concrete Ltd v Minister of Pensions and National Insurance 1 [1968] 2 WLR 775, per Mackenna J.
47 Atiyah, Vicarious Liability in the Law of Torts, 1967 ed, pp 37-38.
48 Argent v Minister of Social Social Security [1968) 1 WLR 1749 (QB), per Roskill J.
49 Otto Kahn Freund in [1951] 14 Modern Law Review, 505.
50 Whittaker v Minister of Pensions and National Insurance [1966] 3 All ER 531, 537 (QBD), per Mocana J.
51 Argent v Minister of Social Security [1968] 1 WLR 1749 (QB), per Roskill J.
52 Short v J & W Henderson Ltd [1946] AC 24 , 33-34 (HL), per Lord Thankerton.
53 Halsbury’s Laws of England, 1958, Vol 25, 3rd ed, p 498.
54 Perfoming Right Society Ltd v Mitchell & Booker Ltd [1924]1 KB 762, per Mc Cardie J.
55 Mersey Docks and Harbour Board v Coggins & Griffth, Liverpool Ltd [1947] AC 1, 12 (CA).
56 Collins v Hertfordshire County Council [1947] 1 All ER 633 (KBD), per Hillberry J.
57 Cassidy v Ministry of Health [1951] 1 All ER 574, 579 (CA), per Somervell LJ
58 OKahn Freund(1951) 14 MLR 504, 505-06.
59 Morren v Swinton and Pendlebury Borough Council [1965] 1 WLR 576, 582, per Lord Parker CJ.
60 Market Investigations Ltd v Minister of Social Security [1969] 2 WLR 1 (QB), per Cooke J.
61 Stevenson, J&H Ltd v Macdonald and Evani [1952] 1 TLR 101, 111 (CA), per Lord Denning LJ.
62 Bank Voor Handel Scheepvaart v Slatford [1953] 1 QB 248, 295, per Lord Denning LJ.
63 Ready MC (SE) Ltd v Minister of P&NI [1968] 2 WLR 775 (QB), per Mackenna J.
64 Argent v Minister of Social Security [1968] 1 WLR 1749, 1759 (QB), per Roskill J.
65 Happle BA and O’ Higgins, Paul, pp 16-18.
66 National Labour Relations Board v Hearst Publication, 88 L Ed 1170.
67 35 American Jurisprudence, Ist ed, pp 445-46, s 3.
68 United States v Silk 91 L Ed 1757 : 331 US 304, per Reed J.
69 Ibid, 319.
70 Moody v Industrial Accidents Commission 60 ALR 299.
71 Published by the American Law Institute.
72 Atiya, Vicarious Liability in the Law of Torts, 1967 ed, 64-65.
73 Queensland SPLTD v Federal Commr of Taxation [1954] 70 CLR 539, 552, per Lord Dixon J.

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74 Humberstone v Northern Timber Mills [1949] 79 CLR 389, 404, per Dixon J.
75 Ready Mixed Concrete (SE) Ltd v Minister of P & N Insurance [1968] 2 WLR 775, 798 (QBD), per Mackenna J.
76 Zuijs v Wirth Bros Proprietary Ltd [1955] 93 CLR 561, 571.
77 Montreal Locomotive Works Ltd v Montreal and Att Gen for Canada [1947] 1 DLR 161(PC).
78 Ready Mixed Concrete (SE) Ltd v Minister of P & N Insurance [1968] 2 WLR 775, 798 (QBD), per Mackenna J.
79 Shivanandan Sharma v Punjab National Bank Ltd (1955) 1 LLJ 688 [LNIND 1955 SC 23], 696 (SC) : AIR 1955 SC 404 [LNIND
1955 SC 23]: C, [1955] 1 SCR 1427 [LNIND 1955 SC 23], per Sinha J.
80 Dharangadhara Chemical Works Ltd v State of Saurashtra (1957) 1 LLJ 477 [LNIND 1956 SC 99], 480-81 (SC) : AIR 1957 SC
264 [LNIND 1956 SC 99]: [1957] 1 SCR 152 [LNIND 1956 SC 99], per Bhagwati J.
81 Short v J & W Henderson Ltd [1946] AC 24 ,33-34 (HL), per Lord Thankerton.
82 Cf, Cassidy v Ministry of Health [1951 J 1 All ER 574 per Somervell LJ.
83 Simmom v Health Laundry Co [1910] 1 KB 543, 549-50, per Fletcher-Moulten LJ.
84 Chintaman Rao v State of Madhya Pradesh (1958) 2 LLJ 252 [LNIND 1958 SC 11], 257 (SC) : AIR 1958 SC 388 [LNIND 1958
SC 11]: (1958) 28 AWR 638 : 1958 Cr LJ 80, per Subba Rao J.
85 Shankar Balaji Waje v State of Maharashtra (1962) 1 LLJ 119 [LNIND 1961 SC 342], 124 (SC), per Raghubar Dayal J.
86 VP Gopala Rao v Public Prosecutor (1970) 2 LLJ 59 [LNIND 1969 SC 100], 62 (SC) : AIR 1970 SC 66 [LNIND 1969 SC 100]:
1970 Cr LJ 22 : (1969) 1 SCC 704 [LNIND 1969 SC 100], per Bachawat J.
87 Silver Jubilee Tailoring House v Chief Inspector of Shops and Establishments (1973) 2 LLJ 495 [LNIND 1973 SC 289], 50l : AIR
1974 SC 37 [LNIND 1973 SC 289]: 1974 (1) An WR 95 : (1974) 1 MLJ 95 [LNIND 1973 SC 289] : (1974) 3 SCC 498 [LNIND
1973 SC 289].
88 Shining Tailors v Industrial Tribunal (1983) 2 LLJ 413 [LNIND 1983 SC 221]-15 (SC) : AIR 1984 SC 23 [LNIND 1983 SC 221]:
1983 Lab IC 1509 [LNIND 1983 SC 221] : 1983 (2) SCALE 397 [LNIND 1983 SC 221] : (1983) 4 SCC 464 [LNIND 1983 SC
221], per Desai J.
89 Employers in Relation to PNB v Ghulam Dastagir (1978) 1 LLJ 312 [LNIND 1978 SC 3], 314 (SC), per Krishna Iyer J.
90 Hussainbhai v Alath Factory, Tezhilali Union 1978 Lab IC 1264, 1265 (SC), per Krishna Iyer J.
91 Kerala State Coir Corpn Ltd v Industrial Tribunal (1995) 1 LLJ 951, 952 (Ker) :: ILR 1995 (1) Kerala 706 [LNIND 1994 KER
342]: 1985 (1) KLJ 209, per KT Thomas J.
92 Atam Parkash v State of Haryana (1998) 1 LLN 661 (P&H), per Chalapathi J.
93 Nestle India Ltd v PO, LC (2002) 1 LLN 415 (P&H), per Gill J.
1 Indian Banks Assn v Workmen of Syndicate Bank (2001) 2 LLN 25 (31) (SC), per Variava J.
2 Dharangadhara Chemical Works Ltd v State of Saurashtra (1975) 1 LLJ 477 (SC), per Bhagwati J.
3 DC Dewan Mohideen Sahib & Sons v United Bidi Warders’ Union (1964) 2 LLJ 633 [LNIND 1964 SC 129] (SC), per Wanchoo J.
4 Modern Match Industries v LAT (1958) 1 LLJ 69 (Mad), per Rajagopalan J.
5 Shivnandan Sharma v Punjab National Bank Ltd (1955) 1 LLJ 688 [LNIND 1955 SC 23] (SC), per Sinha J.
6 Re AM Chinniah (1957) 1 LLJ 280 [LNIND 1956 MAD 173] (Mad), per Ramaswami J.
7 Kanpur Mill Mazdoor Union v Muir Mills Co Ltd (1955) 2 LLJ 537 (LAT).
8 Badjampura Salt Factory v Workers (1959) 1 LLJ 544 (AP), per Srinivasachari J.
9 Chandrabali v Tata Iron & Steel Co Ltd (1965) 2 LLJ 214 (Pat)(DB).
10 Madurai General Workers’ Union v Brinda Textiles Handloom Factory (1968) 2 LLJ 101 (Mad), per Ramakrishnan J.
11 Silver Jubilee Tailoring House v Chief Inspector of Shops and Establishments (1973) 2 LLJ 495 [LNIND 1973 SC 289] (SC), per
Mathew J.
12 Madan Beedi Depot v IT (1974) 1 LLJ 436 (Ker), per MU Isaac J.
13 Employers in relation to the Punjab National Bank v Ghulam Dastagir (1978) 1 LLJ 312 [LNIND 1978 SC 3] (SC), per Krishna
Iyer J.
14 Workmen of Swatantra Bharat Mills Canteen v Mgmt 1984 Lab IC 1235 (Del) per GC Jain J.
15 Mgmt of Indian Bank v PO, IT (1990) 1 LLJ 50 [LNIND 1989 MAD 388], 58 (Mad) (DB), per Srinivasan J.

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16 Shankar Balaji Waje v State of Maharashtra (1962) 1 LLJ 119 [LNIND 1961 SC 342] (SC), per Raghubar Dayal J.
17 Re M Ratnaswami Mudaliar (1959) 1 LLJ 631 [LNIND 1958 MAD 109] (Mad) (DB), per Panchapakesa Ayyar J.
18 TN Lakshmipathi (Dr) v Standard Vacuum Oil Co Ltd (1961) 2 LLJ 767 (Mad), per Ramakrishnan J.
19 K Kesava Reddiar v Labour Appellate Tribunal (1957) 1 LLJ 645 [LNIND 1957 MAD 12] (Mad), per Rajagopalan J.
20 Achutha Achar v Sharda Jewellery Mart (1968) 1 LLJ 500 (Mys) (DB), per Somnath Ayyar J.
21 Hamilton Jewellery Workmen Union v Hamilton & Co Ltd[1956] LAC 462(LAT).
22 Rashtriya Mazdoor Sabha v Modi Oil Mills (1955) 2 LLJ 163 (LAT).
23 Abad Dairy Dudh Vitaran Kendra Sanchalak Mandal v State of Gujarat 1989 Lab IC 1770 (Guj) (DB) per RJ Shah J.
24 Indian Sulphacid Industries Ltd v LC (1993) 1 LLJ 496, 498 (P&H), per HS Bedi J.
25 Mgmt of Puri Urban Coop Bank v Madhusudan Sahu (1992) 2 LLJ 6 [LNIND 1992 SC 365], 7 (SC) : AIR 1992 SC 1452 [LNIND
1992 SC 365]: 74 (1992) CLT 50 : [1992] (65) FLR 805 : 1992 (1) SCALE 1059 : (1992) 3 SCC 323 [LNIND 1992 SC 365], per
Punchhi J.
26 Critical note on this judgment by BR Dolia, Editor, LLJ (1992) 2 LLJ 8 .
27 General Manager, Indian Overseas Bank v All India Overseas Bank Employees Union AIR 2006 SC 1699 [LNIND 2006 SC
2017]:: (2006) 3 LLJ 773 [LNIND 2006 SC 631] : 2006 LIC 3502 : (2006) 7 SCC 330 [LNIND 2006 SC 631], per Pasayat J.
28 Electronics Corpn of India Ltd v ECISE Union AIR 2006 SC 2996 [LNIND 2006 SC 631], per Pasayat J.
29 JK Jute Mills Co Ltd v Workmen 10 FJR 228 (LAT).
30 Newspaper Publishers Pvt Ltd v Workmen (1965) 2 LLJ 315 (Mys), per Sadasivayya J.
31 Vishnu Sugar Mills Ltd v State of Bihar (1966) 1 LLJ 777 (Pat) (DB).
32 Bokaro Steel Plant v PO, LC (1999) 3 LLN 1143 (Pat), per Raj J.
33 Suti Mill Mazdoor Sabha v BIC Ltd (1957) 1 LLJ 297 (LAT).
34 See, notes under s 2(j).
35 Bilash Chandra Mitra v Balmerlawrie and Co (1953) 1 LLJ 337 [LNIND 1952 CAL 141] (Cal), per Bose J.
36 Mineral Export Corpn EU v Mineral Exploration Corpn AIR 2007 SC (Supp) 1837, per Lakshmanan J.
37 Rajaram Rokade & Bros v Shriram Chintaman Warkar 1977 Lab IC 1594 (Bom) (DB), per Dharmadhikari J.
38 PN Gulati v Presiding Officer, LC, Gorakhpur 1977 Lab IC 1088 (All) (DB) per Seth J.
39 Govindbhai Kanabhai Maru v NK Desai 1988 Lab IC 505 [LNIND 1987 GUJ 8], 507 (Guj), per Qureshi J.
40 Yashwant Singh Yadav v State of Rajasthan 1990 Lab IC 1451 (Raj) (DB), per Byas J.
41 G Rangdmannar Chetty, Proprietor, Sri Satyanarayana Rice Mill v IT AIR 1960 AP 371 [LNIND 1959 AP 124].
42 WHD’ Cruz & Sons v ME Thomas (1996) 1 LLJ 706, 712 (Ker) :: [1995 (71) FLR 398 ]: ILR 1996 (1) Kerala 132, per Kamat J.
43 AK Selvaraj v PO, LC (1998) 4 LLN 351 (Mad), per Jagadeesan J.
44 State of Rajasthan v Lal Bahadur Yadav (2002) 3 LLN 1205 (Raj), per Chauhan J.
45 Municipal Board, Pratapgarh v LC (2003) 4 LLJ 223 (Raj), per SK Garg J.
46 Divisional Mgr, New India Assurance Co Ltd v A Sankaralingam AIR 2009 SC 309 [LNIND 2008 SC 1975]: (2008) 10 SCC 698
[LNIND 2008 SC 1975] : (2009) 1 LLJ 602 [LNIND 2008 SC 1975] : 2009 LIC 151, per Bedi J.
47 Devinder Singh v Municipal Council, Sanaur AIR 2011 SC 2532 [LNIND 2011 SC 406]:: (2011) 6 SCC 584 [LNIND 2011 SC
406] : 2011 (5) JT 333 : 2011 (4) SCALE 631 [LNIND 2011 SC 406] : (2011) 3 LLJ 1 [LNIND 2011 SC 406] : 2011 LIC 2799, per
Singhvi J.
48 Rapson v Cubbil [1942] 9 M&W 710; Overton v Freeman [1952] II CB 867, 873, per Maule J.
49 Cf, Halsbury’s Laws of England, 1958, Vol 25, 3rd ed, p 448, para 871 ‘Characteristics of the relationship’.
50 India Gen. Navigation and Rly Co Ltd v Workmen (1966) 1 LLJ 735 [LNIND 1965 SC 284] (SC), per Gajendragadkar CJI.
51 Sri Goenka Mills v Shiupur Mill Mazdoor Sangh (1954) 1 LLJ, 149 (LAT).
52 Chotanagpur Coal Fields Workers’ Union v Karagati Colliery (1952) 2 LLJ 23 (LAT).
53 Punjab Sugar Mills Co Ltd v State of Uttar Pradesh (1960) 1 LLJ 756 [LNIND 1959 ALL 219] (All) (DB AIR 1960 All 444
[LNIND 1959 ALL 219]), per Dwivedi J.

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54 JK Cotton Spg and Weaving Mills Co Ltd v LAT (1963) 2 LLJ 436 [LNIND 1963 SC 157] (SC), per Gajendragadkar J.
55 United Beedi Workers’ Union v Janab SA Hussain & Sons (1964) 1 LLJ 285 (Mad) (DB), per Ramchandra Ayyar CJ.
56 UP Sugar &CDC Ltd v Chini Mill Mazdoor Sangh AIR 2009 SC 387 [LNIND 2008 SC 1929]: (2008) 9 SCC 544 [LNIND 2008
SC 1929] : (2009) 1 LLJ 595 [LNIND 2008 SC 1929] : 2009 LIC 905, per Altamas Kabir J.
57 MMR Khan v Union of India (1990) Supp SCC 191 per Sawant J.
58 All India Rly Institute Employees Assn v Union of India (1991) 2 LLJ 265 [LNIND 1990 SC 112] (SC) : AIR 1990 SC 952
[LNIND 1990 SC 112]: 1990 (1) SCALE 295 : (1990) 2 SCC 542 [LNIND 1990 SC 112], per Sawant J.
59 Parimal Chandra Raha v Life Insurance Corpn of India (1995) 2 LLJ 339 [LNIND 1995 SC 456], 350 (SC) : AIR 1995 SC 1666
[LNIND 1995 SC 456]: (1996) 1 Cal LT 22(SC) : 1995 (2) SCALE 518 : 1995 Supp (2) SCC 611, per Sawant J.
60 Mgmt of Reserve Bank of India v Workmen (1996) 2 LLJ 42 (SC) : AIR 1996 SC 1241 [LNIND 1996 SC 2794]: 1996 Lab IC 1048
: 1996 (2) SCALE 708 [LNIND 1996 SC 2794] : (1996) 3 SCC 267 [LNIND 1996 SC 2794], per Paripoornan J.
61 Workmen of the Canteen of Coates of India Ltd v Coates of India Ltd AC No 3479 of 1987 (1996) (SC).
62 Bombay Canteen Employees’Assn v Union of India (1997) 6 SCC 723 [LNIND 1997 SC 904] : AIR 1997 SC 2817 [LNIND 1997
SC 904]: JT 1997 (6) SC 57 : (1997) 2 LLJ 647 (SC), per K Rarnaswsamy J.
63 State Bank of India v SBICE Union (2000) 1 LLJ 1441 [LNIND 2000 SC 673] 1453, 55 (SC) : AIR 2000 SC 1518 [LNIND 2000
SC 673]: 2000 (3) SCALE 290 : (2000) 5 SCC 531 [LNIND 2000 SC 673], per Shah J.
64 Union of India v IT (1998) 2 LLN 926 (Mad), per Jayasimha Babu J.
65 Bombay TCE Assn v Union of India (1997) 2 LLN 1038 (SC)
66 National Thermal Power Corpn v Karri Pothuraju AIR 2003 SC 3647 [LNIND 2003 SC 664]: (2003) 7 SCC 384 : 2003 (7) JT
149 : 2003 (6) SCALE 04 : (2003) 3 LLJ 567 [LNIND 2003 SC 664] : 2003 LIC 3120, per Rajendra Babu J.
67 Mishra Dhatu Nigam Ltd v M Venkataiah AIR 2003 SC 3124 [LNIND 2003 SC 663]: (2003) 7 SCC 488 : (2003) 3 LLJ 847
[LNIND 2003 SC 663], per Rajendra Babu J.
68 VST Industries Ltd v VSTI Workers Union (2001) I LLJ 470(474-5) (SC) : (2001) 1 SCC 298 [LNIND 2000 SC 1796], per Rajendra
Babu J.
69 GB Pant University of Agriculture and Technology v State of UP AIR 2000 SC 2695 [LNIND 2000 SC 1098]: (2000) 7 SCC 109
[LNIND 2000 SC 1098] : (2000) 2 LLJ 1109 [LNIND 2000 SC 1098] : 2000 LIC 2893, per Banerjee J.
70 Union of India v M Aslam AIR 2001 SC 526 [LNIND 2001 SC 40]: (2001) 1 SCC 720 [LNIND 2001 SC 40], per Pattanaik J.
71 Saraspur Mills Ltd v Ramanlal Chimanlal AIR 1973 SC 2297 [LNIND 1973 SC 128]: 1973 Lab IC 1040 [LNIND 1973 SC 128] :
(1973) 2 LLJ 130 [LNIND 1973 SC 128] SC : (1974) 3 SCC 66 [LNIND 1973 SC 128]per Grover J.
72 SAIL v National Union of Waterfront Workers AIR 2001 SC 3527 [LNIND 2001 SC 1870]: (2001) 7 SCC 1 [LNIND 2001 SC
1870] : (2001) 2 LLJ 1087 [LNIND 2001 SC 1870] : 2001 LIC 3656, per Quadri J.
73 VST Industries Ltd v VSTI Workers Union (2001) I LLJ 470 (474-5) (SC) : (2001) 1 SCC 298 [LNIND 2000 SC 1796], per
Rajendra Babu J.
74 Haldia Refinery Canteen Employees Union v IOC Ltd AIR 2005 SC 2412 [LNIND 2005 SC 443]: (2005) 5 SCC 51 [LNIND 2005
SC 443], per Ashok Bhan J.
75 RK Panda v Steel Authority of India Ltd 1994 AIR SCW 2460, per NP Singh J.
76 Rourkela Shramik Sangh v Steel Authority of India Ltd, AIR 2003 SC 1060 [LNIND 2003 SC 120]: (2003) 4 SCC 317 [LNIND
2003 SC 120], per Sinha J.
77 Swapan Das Gupta v First LC 1976 Lab IC 202 (Cal), per Sabyasachi Mukharji J.
78 NC John v Secretary TTS & CE Workers’ Union 1973 Lab IC 398, 402 (Ker), per Isaac J.
79 Rallis India Ltd v State of West Bengal (1983) 2 LLJ 293, 296 (Cal), per Amitabha Dutta J.
80 Dharangadhara Chemical Works Ltd v State of Saurashtra (1957) 1 LLJ 477 [LNIND 1956 SC 99], 482 (SC), per Bhagwati J.
81 Lloyds Bank Ltd v Panna Lal Gupta (1961) 1 LLJ 18 [LNIND 1960 SC 279],21-22 (SC), per Gajendragadkar J.
82 Reckitt & Coleman of India Ltd v Fifth IT 1980 Lab IC 92,94 (Cal) (DB), per MM Dun J.
83 Lloyds Bank Ltd v Panna Lal Gupta (1961) 1 LLJ 18 [LNIND 1960 SC 279],21-22 (SC), per Gajendragadkar J.

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER I Preliminary

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER I Preliminary

S. 2. Definitions.—

Contract Labour (Regulation & Abolition) Act 1970:

The principles enunciated in the earlier dicta have been incorporated in the Contract Labour (Regulation & Abolition) Act
1970. It has been enacted by the Parliament for regulating the employment of contract labour in certain establishments and
to provide for its abolition, in certain circumstances, and for matters connected therewith. The Act came into force on and
from 5 September 1970 and it applies to:

(a) every establishment in which 20 or more workmen are employed or were employed as contract labour on any day of the
preceding 12 months; and
(b) to every contractor who employs or employed on any day of the preceding 12 months 20 or more workmen.

The Act further gives liberty to the ‘appropriate government’ to apply its provisions to any establishment employing such
number of workmen less than 20 as may be specified in the notification. The Preamble declares that the statute has been
enacted for two purposes, viz:

(a) to regulate the employment of contract labour; and

(b) to provide for its ‘abolition’ in certain circumstances and for matters connected therewith.

It is evident that the Act does not contemplate the total abolition of contract labour system. It provides for its abolition only
in certain circumstances and to regulate employment of ‘contract labour’ in certain establishments. In other words, while
realising the need for abolishing the contract labour system in certain circumstances, the Parliament also felt the need to
continue it in other circumstances by properly regulating the same. It makes specifically clear that the Act will not apply to
an establishment in which work, only of intermittent or casual nature, is performed. The Act makes provisions for
registration of establishments employing contract labour and licensing of contractors. It also contains provisions ensuring
the welfare and health of the contract labour by providing canteens, rest rooms, first aid facilities. It makes the principal
employer ultimately responsible for seeing that the provisions of the Act are complied with and the payment of wages
made to the contract labour. It also empowers the ‘appropriate government’ to prohibit the employment of contract labour
under certain circumstances. The Central Government has made rules in exercise of the powers under the Act namely
Contract Labour (Regulation and Abolition) Rules 1971 which were brought into force wef 10 February 1971.

From the provisions of the Act and scheme of the rules, it is evident that every contractor engaging contract labour for the
establishment, is required to obtain a registration certificate and licence respectively from the authorities under the Act.
Furthermore, if the contract labour is employed for doing the same type of job as is done by the direct employees of the
principal employer, the same wages are to be paid and the same facilities are to be given to the contract labour as are being
paid or given to the direct employees. The contravention of the provisions of the Act, the rules and the conditions of the
licenses granted to the contractor is made a penal offence. Section 10 empowers the ‘appropriate government’ to prohibit
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

employment of contract labour in any process, operation or other work in any establishment, after consultation with the
central board or the state board, as the case may be, by notification in the Official Gazette. Before issuing the notification
prohibiting the employment of contract labour in any establishment, the ‘appropriate government’ shall have regard to the
conditions of work and benefits provided for the contract labour in the establishment and other relevant factors such as:

(a) whether the process, operation or other work is incidental to or necessary for the industry, trade, business, manufacture or
occupation that is carried on in the establishment;

(b) whether it is of a perennial nature, ie, it is of sufficient duration having regard to the nature of the industry, trade,
business, manufacture or occupation carried on in the establishment;
(c) whether it is done ordinarily through regular workmen in that establishment or an establishment similar thereto; and
(d) whether it is sufficient to employ considerable number of whole-time workers.

The explanation to that section makes the decision of the ‘appropriate government’ final with regard to the question:
whether the process, operation or other work is of perennial nature? The effect of non-registration of an establishment
under the Act is that the establishment cannot employ contract labour. So also, the effect of non-licensing of the contractor
is that the contractor is precluded from undertaking or executing any work through contract labour. The constitutional
validity of the Act has been upheld by the Supreme Court in Gammon India.84The effect of this Act on the jurisdiction of
the industrial tribunals, to adjudicate upon disputes relating to abolition of contract labourer the absorption of such labour
by the principal employer was considered by the Supreme Court in Vegolis.85 In this case, apart from employing a large
number of workmen for its main work, the employer company employed labour through a contractor for loading and
unloading and some other work. The regular workmen raised an ‘industrial dispute’ claiming that the system of work of
loading and unloading etc, done through the contractor should be abolished, which was referred to an industrial tribunal for
adjudication. The tribunal held that the contract system should be abolished and the employer must employ only permanent
workers for doing the work which was being done through the contract labour. It buttressed its view with the provisions of
the Contract Labour (Regulation and Abolition) Act. In appeal, before the Supreme Court against the award of the tribunal,
apart from questioning the decision of the tribunal on merits, the employer company also challenged the jurisdiction of the
tribunal to consider the question of abolition of contract labour system in view of the provisions of the Act. On
consideration of the scheme of the Act and examination of its provisions, the court held that the tribunal’s directions to the
company not to engage any labour through the contractor for the work of loading and unloading must be set aside, because
the jurisdiction to decide about the abolition of the contract labour, or, to put it differently, to prohibit employment of
contract labour, has now to be done in accordance with s 10 of the Act and the question whether the contract labour should
be abolished or not, is left to the ‘appropriate government’, under it. Therefore, the tribunal had no jurisdiction to give
directions with respect to abolition of the contract labour after the date of coming into operation of the Act’.

It will thus appear from this decision, firstly, that an industrial dispute can be raised, by the direct workmen of the
establishment for abolition of the contract labour system. Secondly, although on the date the dispute was raised, the Act
was not in force, hence the dispute with regard to the abolition of the contract labour system had to be decided by the
tribunal. But since the Act came into force at the time of the decision, the dispute had to be decided in accordance with the
provisions of the Act. Hence on and after the coming into force of the Act, no direction could be given by an industrial
tribunal to abolish the contract labour system, since the jurisdiction to give directions with regard to the prohibition of
contract labour is vested in the ‘appropriate government’. In Food Corpn, the facts disclosed that a contractor was engaged
for handling foodgrains at Siliguri depot and the Corporation had nothing to do with the manner of handling done by the
contractor. The labour was employed by the contractor and payments were made by him. In this fact-situation, there was
no privity of contract of employment between the corporation and the workmen. Referring to the expression ‘employed’ in
the definition of ‘workman’ in s 2(s), speaking for a three judge Bench of the Supreme Court, Desai J said:

The expression ‘employed’ has atleast two known connotations but as used in the definition, the context would indicate that it is
used in the sense of relationship brought about by express or implied contract of service in which the employee renders service for
which he is engaged by the employer and the latter agrees to pay him in cash or kind as agreed between them or as statutorily
prescribed. It discloses a relationship of command and obedience. The essential condition of a person being a workman within the
terms of the definition is that he should be employed to do the work in that industry and that there should be, in other words, an
employment of his by the employer and that there should be relationship between the employer and him as between employer and
employee or master and servant. Unless a person is thus employed, there can be no question of his being a ‘workman’ within the
definition of the term as contained in the Act.86

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In this view of law, the court held that where a contractor employs workmen to do the work which he contracted with a
third person to accomplish, on the definition as it stands, the workmen of the contractor would not without something more
become the workmen of that third person. Therefore, when the contract system was in vogue, the workmen employed by
the contractor were certainly not the workmen of the corporation. In Mathura Refinery, the Supreme Court refused to
direct the Indian Oil Corporation to absorb the contract labour in its employment saying that contract labourers have not
been found to have direct connection with the refinery. In other words, there was no relationship of employer and
employee between the corporation and the contract labourers concerned.87 In Dena Nath, the court was dealing with the
question ‘whether the persons appointed by the principal employer through a contractor would be deemed to be the direct
employees of the principal employer or not where the principle employer does not get registration under s 7 and/or the
contractor does not get a licence under s 12 of the Act? A two-judge Bench pointed out that the Act has two purposes to
serve, viz:

(i) to regulate the conditions of service of the workers employed by the contractor who is engaged by a principal employer;
and
(ii) to provide for the abolition of contract labour altogether, in certain notified processes, operation or other works in any
establishment by the appropriate government under section 10 of the Act. 88

In Gujarat Electricity Board, he facts were: the thermal power station of the Board employed a large number of skilled and
unskilled manual labourers to carry out loading and unloading work etc. The union of the workmen raised a dispute as to
‘whether the workers whose services are engaged by the contractors, but who are working in the thermal power station of
Gujarat Electricity Board at Ukai, can legally claim to be the employees of Gujarat Electricity Board?’ This dispute was
referred for adjudication to an industrial tribunal who, after taking the relevant evidence and the law laid down by various
judicial decisions into account, held that the workmen concerned in the reference could not be the workmen of the
contractors. Therefore, all the workmen employed by the contractor should be deemed to be the workmen of the board.
The tribunal also gave consequential directions to the board for payment of wages etc to the workmen. The award of the
tribunal was upheld by the High Court of Gujarat. In an appeal against the order and judgment of the High Court, the main
contention advanced before the Supreme Court on behalf of the board was that ‘after coming into force of the Act, it is
only the ‘appropriate government’ which can abolish the contract labour system, after consulting the central board or the
state board, as the case may be, and no other authority including the industrial tribunal has jurisdiction either to entertain
such dispute or to direct abolition of the contract labour system. Furthermore, in any case, neither the ‘appropriate
government’ nor the industrial tribunal has the power to direct that workmen of the erstwhile contractor should be deemed
to be the workmen of the principal employer such direction is contrary to the provisions of the Act. The Central
Government or the industrial tribunal, as the case may be, can only direct the abolition of the contract labour system as per
the provisions of the Act. But the Act does not permit either of them to declare the erstwhile workmen of the contractor to
be the employees of the principal employer. Sawant J, laid down the following propositions:

(i) In view of the provisions of section 10 of the Act, it is only the appropriate government which has the authority to abolish
genuine labour contract in accordance with the provisions of the said section. No court including the industrial
adjudicator has jurisdiction to do so.
(ii) If the contract is sham or not genuine, the workmen of the so called contractor can raise an industrial dispute for declaring
that they were always the employees of the principal employer and for claiming the appropriate service conditions.
When such dispute is raised, it is not a dispute for abolition of the labour contract and hence the provisions of section 10
of the Act will not bar either the raising or the adjudication of the dispute. When such dispute is raised, the industrial
adjudicator has to decide whether the contract is sham or genuine. It is only if the adjudicator comes to the conclusion
that the contract is sham, then he will have jurisdiction to adjudicate the dispute. If, however, he comes to the conclusion
that the contract is genuine, he may refer the workmen to the appropriate government for abolition of the contract labour
under section 10 of the Act and keep the dispute pending. However, he can do so if the dispute is espoused by the direct
workmen of the principal employer. If the workmen of the principal employer have not espoused the dispute, the
adjudicator, after coming to the conclusion that the contract is genuine, has to reject the reference, the dispute being not
an industrial dispute within the meaning of section 2(k) of the ID Act. He will not be competent to give any relief to the
workmen of the erstwhile contractor even if the labour contract is abolished by the appropriate government under
section 10 of the Act.

(iii) If the labour contract is genuine a composite industrial dispute can still be raised for abolition of the contract labour and
their absorption. However, the dispute, will have to be raised invariably by the direct employees of the principal
employer. The industrial adjudicator, after receipt of the reference of such dispute will have first to direct the workmen
to approach the appropriate government for abolition of the contract labour under section 10 of the Act and keep the

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reference pending. If pursuant to such reference, the contract labour is abolished by the appropriate government, the
industrial adjudicator will have to give opportunity to the parties to place the necessary material before him to decide
whether the workmen of the erstwhile contractor should be directed to be absorbed by the principal employer, how many
of them and on what terms. If, however, the contract labour is not abolished, the industrial adjudicator has to reject the
reference.
(iv) Even after the contract labour system is abolished, the direct employees of the principal employer can raise an industrial
dispute for absorption of the ex-contractor’s workmen and the adjudicator on the material placed before him can decide
as to who and how many of the workmen should be absorbed and on what terms. The court pointedly noticed that, as a
matter offact, on abolition of the contract labour system, the workmen are in a worse position as they could neither be
employed by the contractor nor an obligation is cast on the principal employer to engage them in his establishment. This
is a vital lacuna in the Act which could only be removed by a suitable amendment of the Act, because neither section 10
nor any other provision of the Act or the rules made thereunder provides for determination of the status of the workmen
of the erstwhile contractor once the ‘appropriate government’ abolishes the contract labour system. 89

The basic question, ‘whether on abolition of the contract labour system, the contract labour is entitled to be absorbed by
the principal employer’?, came up again before a three judge Bench of the court in Air India. In addition to the aforesaid
basic question, on the basis of the respective contentions of the parties, the court formulated further four ancillary
questions, viz:

(i) whether the High Court under Article 226 has power to direct their absorption?;

(ii) whether it is necessary to make a reference under section 10 of the ID Act for adjudication of disputes qua absorption of
the contract labour?;
(iii) whether the view taken by this court in Dena Nath and Gujarat Electricity Board cases (supra) is correct in law?; and

(iv) whether the workmen have got a right for absorption and, if so, what is the remedy for enforcement?90

The court did not agree with Dena Nath case as according to Ramaswamy J its ‘ratio falls foul of constitutional goals of
the trinity; they are free launchers to exploit the workmen’. Therefore, this case does not lay down the correct law.91 And
according to Majmudar J, Each of the conclusions reached in that case...flies in the face of the very scope and ambit of the
Act and frustrates the very scheme of abolition of contract labour envisaged by the Act’. And such a conclusion cannot be
countenanced, ‘as it results in a situation where relatives of the patient are told by the operating surgeon that operation is
successful but the patient has died.92Gujarat Electricity Board was also faulted by Ramaswamy J for the reason that the
award-proceedings suggested therein were beset with several incongruities and obstacles in the way of the contract labour,
for immediate absorption. Since, the contract labour gets into the service of the principal employer, the union of the
existing employees may not espouse their cause for reference under s 10 of the ID Act. The workmen, who on abolition of
contract labour system have no right to seek reference under s 10 of ID Act. Moreover, the workmen immediately are kept
out of job to endlessly keep waiting for award and thereafter resulting in further litigation and delay in enforcement. The
management would always keep them at bay for absorption. It would be difficult for them to work out their right.
Moreover, it is a tardy and time-consuming process and years would roll by. Without wages, they cannot keep fighting the
litigation endlessly. The right and remedy would be a teasing illusion and would be rendered otiose and practically
compelling the workman at the mercy of the principal employer. Since these shortcomings were not brought to the
attention of the court in that case, its decision is not correct.93 Agreeing with this, Majmudar J echoed that the scheme
envisaged in Gujarat Electricity Board was not workable and to that extent the said judgment cannot be given effect
to.94Dena Nath and Gujarat Electricity Board were, therefore, overturned. In the end, the court concluded that ‘though
there is no express provision in the Act for absorption of the employees whose contract labour system stood abolished by
publication of the notification under s 10(1) of the Act, in a proper case, the court as sentinal in the qui vive is required to
direct the appropriate authority to act in accordance with law and submit a report to the court and based thereon proper
relief should be granted.95 In this view of law, it was held:

The moment the contract labour system stands prohibited under section 10(1), the embargo to continue as a contract labour is put
an end to and direct relationship has been provided between the workmen and the principal employer. Thereby, the principal
employer directly becomes responsible for taking the services of the workmen hitherto regulated through the contractor’ (sic).96
And further that ‘the linkage between the contractor and the employee stood snapped and direct relationship stood restored
between the principal employer and the contract labour as its employees. Considered from this perspective, all the workmen in the
respective services working on contract labour are required to be absorbed in the establishment’ of the employer.97

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Accordingly, the court affirmed the decision of the Bombay High Court that on a writ court can direct the principal
employer to absorb contract labour after its abolition, even though some of the contractors have violated s 12 and the
principal employer has violated the provisions of s 7 of the Act and upheld the direction to the principal employer to
absorb the contract labour after the abolition of the contract labour system and to regularise their services with effect from
the respective dates of the judgments of the High Court with all consequential benefits. This decision creates more
problems than it cures as it loses sight of the different incidents of employment of the workmen by the contractors and by
the principal employers particularly when such employers happen to be highly organised large-scale undertakings. The
employment in such undertakings is governed by rules and regulations which include qualifications, cadres, retiral age,
grades and scales of pay etc, whereas no such factors are taken into account in the employment by contractors. Contractors
keep on shifting their labour force from one establishment to another as required by the exigencies of their own business.
On the day of the abolition of the contract labour system in an establishment, the contractor may be having excessive
number of people or he may be having superannuated and unqualified people in his employment. They all, by ipse dixit of
this holding, will become the employees of such undertaking. There may be workmen who might have worked just for a
day or two before the abolition of the contract system. They too will be entitled to be absorbed in the service of the
principal employer. Thus, there may be two categories of employees, one direct employees, the other inherited from the
contractors. This is apt to mess up the whole organisational system of the undertaking regarding qualifications, retirement
age, grades and scales of pay etc. Furthermore, by forcing the workforce of the contractor on the principal employer, it
may create chaotic budgetary conditions. From the report of the judgment, the attention of the court does not appear to
have been called to such consequences of absorption of the contract labour force by the principal employer. These were
perhaps some of the considerations which the Parliament had in mind for not making it incumbent on the principal
employer to absorb the labour force employed by the contractor after the abolition of the contract labour system. However,
Air India was overruled by a Constitution Bench of the Supreme Court in SAIL. Quadri J held:

We have already noticed above the intendment of the CLRA Act that it regulates the conditions of service of the contract labour
and authorises in section 10(1) prohibition of contract labour system by the appropriate government on consideration offactors
enumerated in sub-section (2) of s 10 of the Act among other relevant factors. But, the presence of some or all those factors, in our
view, provide no ground for absorption of contract labour on issuing notification under sub-section (1) of section 10. Admittedly,
when the concept of automatic absorption of contract labourer as a consequence of issuing notification under section 10(1) by the
appropriate Government, is not alluded to either in s 10 or at any other place in the Act and the consequence of violation of section
7 and 12 of the CLRA Act is explicitly provided in sections 23 and 25 of the CLRA Act, it is not for the High Courts or this Court
to read some unspecified remedy in section 10 or substitute for penal consequences specified in sections 23 and 25 a different
sequel, be it absorption of contract labour in the establishment of principal employer or a lesser or a harsher punishment. Such an
interpretation of the provisions of the statute will be far beyond the task of ironing out the creases and the scope of interpretative
legislation and as such dearly impermissible. We have already held above, on consideration of various aspects, that it is difficult to
accept that the Parliament intended absorption of contract labour on an issue of abolition notification under section 10(1) of CLRA
Act. (para 105, at p 167)...On the issuance of prohibition notification under section 10(1) of the CLRA Act prohibiting employment
of contract labourer or otherwise, in an industrial dispute brought before it by any contract labourer in regard to conditions of
service, the industrial adjudicator will have to consider the question whether the contractor has been interposed either on the
ground of having undertaken to produce any given result for the establishment or for supply of contract labour for work of the
establishment under a genuine contract or is a mere ruse/camouflage to evade compliance of various beneficial legislations so as to
deprive the workers of the benefit thereunder. If the contract is found to be not genuine but a mere camouflage, the so-called
contract labourer will have to be treated as employees of the principal employer who shall be directed to regularise the services of
the establishment subject to the conditions as may be specified by it for that purpose...’ (para 125(5), at p 172)...If the contract is
found to be genuine and the prohibition notification under section 10(1) of the CLRA Act in respect of the concerned establishment
has been issued by the appropriate Government, prohibiting employment of contract labourer in any process, operation or other
work of any establishment and where in such process, operation or other work of the establishment the principal employer intends
to employ regular workmen he shall give preference to the erstwhile contract labourer, ifotherwise found suitable and, if necessary,
by relaxing the condition as to maximum age appropriately taking into consideration the age of the workers at the time of their
initial employment by the contractor and also relaxing the condition as to academic qualifications other than technical
qualifications.98 [para 125(6), at p 172].

The above decision of the Constitution Bench in SAIL is a significant departure from the disturbing trends of judicial
expansionism witnessed during last quarter of 20th century. It is not in dispute that that nowhere does the Contract Labour
(Regulation and Abolition) Act stipulate that ‘abolition’ of contract labour system means the ‘automatic absorption’ of the
contract workers in the services of principal employer, nor, for that matter, the expression‘regulation’ appearing in the
short title of the Act could mean ‘regularisation’ of their services under the principal employer. Neither the CLRA Act nor
any other law in this branch provides for such implied transfer of the contract of employment from one employer to

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another. Viewed from the perspective of statutory construction, Quadri J, firmly established the principle that the judicial
legislation through the medium of interpretation is ‘interstitial’ and should be confined to filling ‘molecular’ gaps. Quadri
J, resurrected the proposition that placing a wild interpretation on statutory provisions beyond the contemplation of
legislature is not the same thing as ‘ironing out creases’, to quote the phrase of Lord Denning MR. On this issue, the
recommendation of NCL-II is as follows:

The Commission is conscious of the fact that in the fast changing economic scenario and changes in technology and management,
which are entailed in meeting current challenges, there cannot be a fixed number of posts in any organisation for all time to come.
Organisations must have the flexibility to adjust the number of this workforce based on economic efficiency. It is essential to focus
on core competencies if an enterprise wants to remain competitive. We would, therefore, recommend that contract labour shall not
be engaged for core production/services activities. However, for sporadic seasonal demand, the employer may engage temporary
labour for core production/ service activity. We are aware that off-loading, perennial, non-core services like canteen, watch &
ward, cleaning, etc. to other employing agencies has to take care of three aspects:
(1) there have to be provisions that ensure that perennial core services are not transferred to other agencies or esrablishments;

(2) where such services are being performed by employees on the payrolls of the enterprises, no transfer to other agencies
should be done without consulting, bargaining (negotiating) agents; and
(3) where the transfer of such services does not involve any employee who is currently in service of the enterprise, the
management will be free to entrust the service to outside agencies. The contract labour will, however, be remunerated at
the rate of a regular worker engaged in the same organisation doing work of a comparable nature or if such worker does
not exist in the organisation, at the lowest salary of a worker in a comparable grade, ie unskilled, semi-skilled or skilled.
The principal employer will also ensure that the prescribed social security and other benefits are extended to the contract
worker. There is a reason that compels us to make this recommendation. At many of the centers we visited, we were told
during evidence, that there were cases of contractors making deductions from the wages of contract workers as their
contribution towards social security, and then absconding without depositing either the contribution realised from the
workers or their own contributions into the appropriate social security fund.1

As already noted, in Gujarat Electricity Board, the court noticed the vital lacuna of not providing for absorption of
workmen of the contractor after abolition of the contract labour system, but it left it at that as the lacuna could only be
removed by suitable amendment of the Act. Lacuna is Roman for the word ‘gap’. In view of the principle that a matter,
which should have been, but has not been provided for in a statute, cannot be supplied by the courts, as to do so will be
‘legislation and not construction’.2 In other words, it is not permissible for a court to fill in the gap in an Act of the
legislature. In England, in Seaford Court Estate, Lord Denning LJ suggested a purposive approach as against the
traditional literal approach to solve a question of interpretation. He said thus:

A judge should ask himself the question: If the makers of the Act had themselves, come across this ruck in the texture of it, how
would they have straighten it out? He must then do as they would have done. A judge must not alter the material of which it is
woven, but he can and should iron out the creases.3

This statement was severely criticised by the House of Lords in Magor & St. Mellons,4 where Lord Simonds described it as
a ‘naked usurpation of the legislative function under the guise of interpreration.’ He pertinently stated that the proposition,
that ‘the court having discovered the intention of the Parliament...must proceed to fill in the gaps...what the legislature has
not written, the court must write’ cannot be supported. ‘And it is the less justifiable when it is guess work with what
material the legislature would, if it had discovered the gap, have filed it in. If a gap is disclosed, the remedy lies in an
amending Act’. In the court of appeal, Lord Denning LJ protested and repeated what he said in Seaford Court Estate:

We do not sit here to pull the language of Parliament and of ministers to pieces and make nonsense of it. That is an easy thing to do
and that is a thing to which lawyers are too oftenprone. We sit here to find out the intention of Parliament and of ministers and
carry it out, and we do this better by filling in the gaps and making sense of the enactment than by opening it upto destructive
analysis.5

By this statement of law, all he meant was that the court may fill in the gap for making sense of the enactment where
otherwise absurd consequences will follow. That is why he hastened to caution that a judge must not alter the material of
which the statute is ‘woven but he can and should iron out the creases. He never meant that in the guise of construction of

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the statute, the court should embark on the journey in the tertitory of ‘judicial legislation’. It is evident from the clear and
candid language in a subsequent statement:

Judicial power rests on the combined wisdom of the judges. Their jurisdiction is more restrictive than creative. Their principal
function is to restrain the abuse of power by others in the state...So far as creative work is concerned, so far as creative policy is
concerned there the judges have no hand. They cannot direct the government to spend money on this or that. They cannot do any
thing to help the poor or the unemployed. They cannot provide housing for the homeless. All social reform must be left to others.
So must all political reforms. The doctrine of ‘presumed intent’ is occasionally pressed into service for construction of contracts or
family arrangement agreements but it is not permissible to use this doctrine for interpretation of statutes which have to be
construed in accordance with recognised principles of interpretation of statutes.

The function of the court is to apply the law, interpret the law and in this country, even to strike-down the law where it is
inconsistent with the constitutional mandates. Where the language of the statute is plain and unambiguous, no construction
is needed. But where the language is not plain or is ambiguous or literal construction would lead to absurdity, it is open to
the court to interpret it to give effect to the intent of the Parliament. In construing welfare statutes, if two constructions are
possible it is permissible for the court to adopt such construction as may be more beneficial to the weaker sections of the
society but neither by ingenuity of interpretative techniques nor by extending the frontiers of the power of judicial review,
it is permissible for the court to stray into the territory of judicial legislation. However, noble and benevolent the personal
predilections or ideological inclinations of a judge be, they are no licence for trespassing into the forbidden area of
legislation. So also the works and thoughts of political and social thinkers. The three organs of the state, viz, legislature,
judiciary and executive are like the head, heart and hands of the human body. According to the basic scheme of the
Constitution, neither of these three separate organs of the government can take over the functions assigned to the others.6 If
they do not work in union and harmony and trespass into the others’ territories, the result will be chaos. In the language of
Khare J, it is not safe ‘to bend the arm of law only for adjusting equity’.7The object of the Act is to ‘regulate the
employment of the contract labour’ and to provide for its abolition. Neither the scheme nor any provision of the Act
purports to provide for the employment of the contract labour on the abolition of the contract labour system. In Air India,
the court itself noticed that there is no provision in the Act for absorption of employees, whose contract stood abolished by
publication of the notification under s 10(1) of the Act but it justified its excursion in the legislative territory with the
observation that ‘the power of the court is not fettered by the absence of any statutory prohibition. Accordingly, it directed
that after the abolition of the contract labour system, the workmen employed by the erstwhile contractor automatically
become entitled to be absorbed by the principal employer. Itis submitted that this holding requires reconsideration. Firstly,
it is in conflict with the holding of another three judge Bench in Food Corpn, in which Desai J unequivocally held that the
essential condition of a person being a workman within the meaning of definition in s 2(s) is that there should be a
relationship of employment between him and the employer and ‘unless a person is thus employed, there can be no question
of his being a workman’. Such relationship cannot be created either by adding words to the statute or by extending the
scope of judicial review. In either case, it will be judicial legislation. Even the wide jurisdiction of Art. 142 would not
warrant an excursion into the territory of judicial legislation. Secondly, the direction that the employees of the erstwhile
contractor will automatically become the employees of the principal employer on the abolition of the contract labour
system is naked usurpation of the legislative function. Thirdly, the court had not adverted to the practical organisational
difficulties, as earlier pointed out, which is apt to create chaotic conditions in the establishment of the principal employer.

Nature of Work

For an employee in an industry to be ‘workman’ under the definition, after its amendment by the amending Act of 1982, it
is manifest that he must be employed to do:

(a) Manual work;

(b) Unskilled work;
(c) Skilled work;
(d) Technical work;
(e) Operational work;
(f) Clerical work;
(g) Supervisory work.

The question as to whether an employee is a ‘workman’ as defined in s 2(s) of the Industrial Disputes Act, has to be
determined with reference to his principal nature of duties and functions. Such question is required to be determined with

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reference to the facts and circumstances of the case and the materials on record. It is not possible to lay down any strait-
jacket formula which can be determinative of the real nature of duties and function being perfomed by an employee in all
cases. In any case, where an employee is employed to do any type of work enumerated in the definition, there is hardly any
difficulty in treating him as a ‘workman’ under the appropriate classification. But in the complexity of industrial or
commercial organisations, quite a large number of employees are often required to do more than one work. In such cases, it
becomes necessary to determine under which classification the employee will fall for the purpose of deciding whether he
comes within the definition of’ ‘workman’ or goes out of it.8 In Burmah Shell, a three judge Bench of the Supreme Court
held that in order to bring an employee within the ambit of the definition of ‘workman’ the nature of the work performed
by him must fall within one or other of the above seven classifications. The rationale of this holding was that if every
employee of an industry was to be a workman, except those in the four exceptions, these seven classifications need not
have been mentioned in the definition and a workman could have been defined as a person employed in an industry except
in a case where he was covered by one of the exceptions. Hence, the specifications of the seven types of work obviously
was intended to lay down that an employee is to become a ‘workman’ only if he is employed to do work of one of those
types while there may be employees who, in doing any such work would not be out of the scope of the work without any
resort to exceptions. An apposite example was that of a person employed in canvassing and promoting sales for an
industry. Though such a person may be an employee but he would not fall within the definition of ‘workman’ because his
work would not fall within anyone of the classifications enumerated in the definition.9 In this view of the law, ‘sales
engineering representatives’ and ‘district sales representatives’ were held not to be workmen as their work did not fall
within the specified categories. This holding was followed by various High Courts in the undernoted cases,10holding that
the sales representatives employed for sales promotion work would not fall within the definition of ‘workman’ but the
subsequent enactment-Sales Promotion Employees (Conditions of Service) Act 1975, brings sales representatives
employed for sales promotion, in medical and pharmaceutical concerns within the purview of workman. This enactment
also enables the Central Government by notification to apply its provisions to any other establishment engaged in any
notified industry. In other words, if an industry is notified under this Act, the provisions of the ID Act would also be
attracted to these types of workmen.

In TP Srivastava, the Supreme Court discarded the contention on behalf of the appellant that he was a workman as he was
covered by the provisions of the Sales Promotion Employees (Conditions of Service) Act 1976. The court observed that
since that Act was enacted subsequent to the termination of the service of the appellant, he was not covered by the
provisions of that Act which was not retrospective in effect. Futhermore, there was no notification under the enactment
applying the provisions of that Act to the employees of the industry in which he was employed. Therefore, since the duty
of the appellant was of imaginative and creative nature, it could not be termed as either manual, skilled, unskilled or
clerical in nature. The supervision element involved in his work was merely incidental.11 But in this case, the attention of
the court was not drawn to its earlier holding in SK Verma, where a three-judge Bench of the Supreme Court held that the
words qualifying the word ‘work’ are intended to limit or narrow the amplitude of the definition of ‘workman’. On the
other hand, they indicate and emphasise the broad sweep of the definition which is designed to cover all manner of persons
employed in any industry, irrespective of whether they are engaged in skilled or unskilled work, manual work, supervisory
work, technical work or clerical work. The broad definition is to take in the entire labour force and exclude the managerial
force.12 It could not be the intention of the Parliament to keep out of the purview of the legislation small bands of
employees who, though not on the management side of the establishment, are yet to be denied the ordinary rights of the
force of labour for no apparent reason at all. This holding renders all the expressions qualifying the word ‘work’ in the
definition redundant in taking the view that the broad intention of the legislature is ‘to take in the entire ‘labour force’ and
exclude ‘managerial force’. If this was the object which the legislature by insertion of the expression ‘operational’ aims to
achieve, that could have been achieved unequivocally by deleting all the adjectival words qualifying the word ‘work’ in the
definition instead of inserting an ambivalent expression like ‘operational’. This decision is in conflict with the rationale of
May & Baker and Burmah Shell (supra). However, the Bombay High Court in SG Pharmaceuticals, held that the medical
representatives employed for canvassing and promoting sales of products of the employer company did not fall within the
definition of workman.13 But, a single judge of the Karnataka High Court in Ram Mohan, followed SK Verma, being the
later decision, while holding that an employee working as a sales promotion representative fell within the definition of
workman. 14 Likewise, in view of the duties performed by a person designated as sales representative, a single judge of the
Bombay High Court held that he was a ‘workman’.15 In A Sundrambal, the court held that a teacher employed in an
educational institution cannot be called a ‘workman’ because imparting of education which is the main function of the
teachers, cannot be considered as skilled or unskilled, managerial or supervisory work or technical work or clerical work.
Speaking for the court, Venkataramiah J said:

Imparting of education is in the nature of a mission or a noble vocation. A teacher educates the children; he moulds their character,
builds up their personality and make them fit to become responsible citizens. Children grow under the care of teachers. Clerical
work, if any, they may do, is only incidental to their work of teaching. 16

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The court relied upon the decision in May & Baker. But attention of the court does not appear to have been invited to the
conflict between this line of cases and the later decision in SK Verma’s case (supra). No effort has been made to reconcile
the contradictory viewpoints even in a subsequent decision in SK Maini v Carona Sahu Co Ltd. 17 However, in OM
Bhargava v Satyavati Bhargava ,18 a two-judge Bench of the court, on noticing the conflict, has recommended to the Chief
Justice of India for consideration as to whether it would be appropriate to constitute a three-judge or five-judge Bench, to
hear the matter. An interesting question arose before a single judge of the Kerala High Court where the archakas or priests
in a temple claimed to be workmen. In view of the evaluation of the archaka or priest, the court held that the services of
the archaka would not fall in any of the categories as contemplated by the definition. The court observed that the diety he
propitiates cannot be looked upon as a profit-producing scheme or setup. Nor can the temple be equated to an industry or a
commercial employer. The priest stands away from the general queue, with his distinctive dress, decorum, discipline and
devotion and with his distinct duties and subtle services. There is all the difference between a mahout, cook or clerk, active
in the precincts of temple or its corridors and office rooms and a priest placed in the sanctum sanctorum and silently saying
his prayers.19 In Carona Sahu, Ray J said:

... the designation of an employee is not of much importance and what is important is the nature of duties being perfomed by him.
The determinative factor is the main duties of the concerned employee and not some work incidentally done. In other words, what
is in substance, the work which employee does or what is in substance he is employed to do. Viewed from this angle, the employee
is mainly doing supervisory work but incidentally or for a fraction of time, does also some manual or clerical work, the employee
should be held to be doing supervision work. Conversely, if the main work is of manual, clerical or technical nature, the mere fact
that some supervisory or other work is also done by the employee incidentally or only a small fraction of working time is devoted
to some supervisory work, the employee will come within the purview of the ‘workman’ as defined in Section 2(s) of the Industrial
Disputes Act.20

In this case, on a close scrutiny of the nature of the duties and functions of the shop manager with reference to the admitted
terms and conditions of service of the employee, it was held that he was not a workman. Where an employee who was
originally employed as a typist-clerk is subsequently designated as an officer-in-charge but his principal job on change of
the designation was not shown as that of an officer nor was there any change in the remuneration, the change of the
designation would not take him out of the definition of ‘workman’.21 Nor will the difference in salary make any
difference.22 In Hongkong and Shanghai Banking Corporation, the Calcutta High Court upheld the finding of fact recorded
by the tribunal to the effect that the principal duties of the employee, whose service was terminated, were clerical in nature
notwithstanding his promotion as ‘staff officer’ by the petitioner-bank. On this view of the matter, Chattopadhyay J, held
that there was no ground to upset the said finding of tribunal that the employee was ‘workman’ within the meaning of s
2(s).23However, if the service ‘conditions of certain workmen are changed by an agreement between the workmen and they
can be held as members of the management staff and not workmen within the meaning of the Act, such workmen will
cease to be workmen because of altered conditions but such an agreement will not take away the right of the workmen
under this Act to raise a dispute that, in fact, they still continue to be workmen on account of the real nature of their duties.
If, on consideration of the nature of the duties performed by the employees, they are, in fact, found to be workmen as
defined in the Act, simply because they had agreed to be included in the catagories of officers, they cannot be precluded
from claiming that they are still workmen.24 It is the nature of duties and not the designation which determines as to
whether an employee is a workman.25 The test is the nature of the main duties of the employee. In other words, what is in
substance the work which he does or what he was in substance employed to do. In the language of Desai J:

Where an employee has multifarious duties and a question is raised whether he is a workman of someone other than a workman,
the court must find out what are the primary and basic duties of the person concerned and if he is incidentally asked to do some
other work, may not be necessarily in tune with the basic duties, these additional duties cannot change the character and status of
the person concerned. In other words, the dominant purpose of employment must be first taken into consideration and the gloss of
some additional duties must be rejected while determining the status and character of a person.26

For instance, if he is mainly doing supervisory work but incidentally or for a fraction of the time also does some clerical,
manual or technical work, it would have to be held that he is employed in a supervisory capacity,27 which excludes him
from the definition of the ‘workman’. Likewise, if the manual, clerical or technical work is only a small part of the main
duties or is incidental to his main work which is not manual, clerical or technical, then again the workman will not fall in
the definition of ‘workman’.28 In Burmah Shell (supra), it was held that if the main work is of manual, clerical or technical
nature, the mere fact, that some supervisory or other work is also done by the employee incidentally or as a small fraction
of his work, will not take him out of the purview of the definition of a ‘workman’. It is not casual or occasional work
which a particular employee does which is decisive of what is the nature of his employment nor decisive of the question
whether he is employee at all falling within the definition. The principle is now well-settled that an employee must be held

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to be employed to do that work which is the main work he is required to do even though he may be incidentally doing
other type of work. In cases where an employee is employed to do purely one of the seven types of work, enumerated in
the definition of ‘workman’, there would be no difficulty in treating him to be a ‘workman’ under the appropriate
classification. However, in the complexity of the industrial and commercial organisations in practice, quite a large number
of employees are frequently required to do more than one kind of work. An employee may be doing manual work as well
as supervisory work, or he may be doing clerical work as well as supervisory work or he may be doing technical work as
well as clerical work or technical work as well as supervisory work. In such cases, it would be necessary to determine
under which classification he would fall for the purpose of finding out whether he falls in or goes out of the definition of
‘workman’. The principle is now well settled that for this purpose, a workman must be held to be employed to do the work
which is the main work he is required to do, even though he may be incidentally doing other type of work.29

Even if the main work of an employee involves some manual, clerical or technical work that by itself would not bring the
employee with in the definition of workman’ when such work is incidental to the main work, for instance, canvassing
orders and promoting sales.30 A distinction therefore, has necessarily to be made between the principal work of an
employee and the ancillary duties involved in doing the principal work. In other words, even though a salesman is required
to have some technical knowledge incidental to do some manual, clerical, or technical work in discharging his main duties,
for instance promotion of sales of the employer’s goods, he would not fall within the definition of ‘workman’ on account
of the nature of his principal duties,31 but an employee cannot be taken out from the category of a workman merely
because he is described as a salesman. The question in each case will have to be decided with reference to the special facts
and circumstances thereof. The mere description of a person as a salesman cannot be conclusive. The entire collocation of
the duties assigned to him has to be considered.32 If the main duty is of a manual, clerical or technical nature and selling is
merely incidental to the duty, the situation would be different and the employee concerned would fall within the ambit of
the definition of ‘workman’.33 The principal or main work in the employment of a person will have to be determined from
the letter of appointment, the nature of the duty the employee is to perform in the course of his employment and other
attending circumstances.34

Manual Work

‘Manual work’ in this definition is not necessarily confined to work by the application of hands but comprises work
involving physical exertion as distinct from mental or intellectual exertion. Even workmen who do not do work with their
hands but work with their legs or remain standing on duty would be doing manual work, for instance, members of watch
and ward staff employed for security of the properties of a concern do the manual work.35 However, if the manual work
performed by a person is of an ancillary nature to his main duties which are not of a manual nature, he would not fall
within the definition sheerly by virtue of such ancillary manual duty.36 The labour appellate tribunal held that the work of a
gate sergeant incharge of the watch and ward staff whose main duty is to look after the property of a factory by supervising
his own men was not of a manual nature.37 But in a later decision,38 that tribunal held that the work of a jamadar of watch
and ward staff, having no administrative control over the other members of the staff working under him was of a manual
nature. This is the correct view of law while the correctness of the earlier decision is not free from doubt but the fact that
the nature of a person’s work was not ‘supervisory’ would not necessarily mean that his duties were mainly of a manual
nature.39

Unskilled Work

An instance of unskilled work is provided in the decision of the Gujarat High Court in Bata India, where the workman was
a salesman in a shoe shop. It was held that the nature of his work was of ‘unskilled labour’. The fact that he tried to
impress upon the customers that the shoes manufactured by the company were durable, was not his principal duty. The
other instances of unskilled work are the work of loaders and unloaders of materials and goods in an industrial
establishment. Likewise, the work of peons, daftries and sweepers is also the work of unskilled nature.40

Skilled Work

After the amendment, any type of skilled work performed by the employee will fall within the definition. The work of
teachers teaching in schools has been held to be skilled work.41 Likewise, the work of an artist employed by an advertising
expert on work which could be done only by persons with artistic talent and requisite technique has also been held to be
skilled work.42 The work of a bench chemist in a sugar mill which consisted mainly of carrying out chemical analysis and
recording results, with typing work, has been held to be skilled work.43 Another instance of skilled work is the work of the
compounder of a doctor.44 The other instances of skilled work are the work of masons, carpenters and iron smiths etc. The
Bombay High Court held that the functions performed by a laboratory assistant engaged by the directorate of health
services of the state government were in the nature of a skilled artisan and, therefore, he would be a ‘workman’.45 Jewel
appraisers engaged by a bank are workmen under s 2(s).46

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Technical Work

The ‘technical’ nature of work was engrafted in the definition by the Amending Act of 1956. The word ‘technical’ has
different meanings depending on the context in which it is used. The etymological meaning of the word ‘technical’
according to the Oxford Dictionary is ‘of or pertaining to the mechanical arts and applied science generally, as in technical
education, or technical school’.47 The technical work depends upon the special mental training or scientific or technical
knowledge of a person. The broad test is that if a person is employed because he possesses such faculties and they enable
him to produce something as a creation of his own, he would be employed on ‘technical work’ even though in carrying out
that work, he may have to go through a lot of manual labour; but if on the other hand, he is merely employed in
supervising work of others, the fact that for the purpose of proper supervision, he is required to have technical knowledge,
will not convert his supervisory work into technical work. In Bombay Dyeing, the Bombay High Court, held that a person
can be said to be employed in a technical capacity, if he is in the first place a skilled person. Besides, he must have enough
dexterity to discharge the work assigned to him with speed and accuracy. He must also have a skill. In the case of a person
employed in a technical capacity, the application of a knowledge or art or a particular craft or work is the distinguishing
feature. With the assistance of the knowledge he possesses, a person employed in a technical capacity is able to bring about
a result which could not be brought about by a person, however skilled, who is to perform routine, repetitive work. A
person employed in a technical capacity has to use his judgment and has to find out whether a particular work can be done
in one manner or another and then do it in the manner in which he thinks it is better done. The work which results from the
labour of such a person necessarily bears, at least in some small measure, the imprints of his personality and the knowledge
of the person who does that work. It is not necessary that such a person must be innovative, but it must necessarily be a
work, the contours of which are not predetermined before that work is actually performed by him in a technical capacity.48

Applying these tests, a camera operator working in the screen making department of textile mills was held not to be
performing any technical work. An assistant engineer working in a sugar factory who was only looking after the work of
workmen working under him as well as the concerned machines, and who was not responsible either for allocation of work
to the workmen or for disciplinary control over the workmen was held to be doing technical work.49 A chemist-in-charge
of performing the work essentially of a technical nature, having power to recommend leave but no power to grant leave or
to take disciplinary action is a workman.50 Likewise, a qualified printing technologist appointed as a foreman in a job
department of a printing press whose duty consisted of allocation of jobs, assignment of work, indenting materials,
recommending leave, appraising work for promotion and also examining composed materials for getting mistakes
corrected has been held to be a workman as his main function was that of a qualified printing technologist and the
supervisory work was simply incidental to his main work.51 The work of giving advice and guidance cannot be held to be
an employment to do technical work.52 Further, the mere possession of technical education is not sufficient. In order to fall
within the ambit of the expression ‘technical’ as used in the definition, the employee must also have been ‘employed’ in
the industry to do ‘technical’ work.53 Highly qualified teachers possessing technical qualifications were held not to be
workmen because they were not employed to do any ‘technical’ work. In Bharat Bhawan, the Supreme Court held that the
‘artists’ engaged by the trust, whose main object was the promotion of art and culture, could not be treated as skilled
workmen, as their work was creative art, and no goods were produced in the trust nor was it meant for business purposes,
and hence they were not workmen as defined under s 2(s).54 On the construction of the definition prior to the amendment
of 1956, the Supreme Court, in Dimakuchi Tea Estate, had held that persons belonging to the ‘medical or technical staff
were a different category from workmen.55 But the Assam High Court has taken the view that besides the technical work of
engineers or technicians, etc, the expression ‘technicial’ would also cover the work of a doctor who possesses the
knowledge of human anatomy and pointed out that even in Dimakuchi (supra), the Supreme Court regarded a medical
practitioner as a member of technical staff.56

By the amending Act 1956, two more categories of work were added to the categories of work, namely, ‘supervisory’ and
‘technical’ but a person who is employed in a supervisory capacity and draws wages exceeding Rs 500 per month or
exercises functions mainly of the managerial nature, is excluded from the definition. No such restriction has been placed
on a person doing ‘technical’ work. Nevertheless, the effects of the words, ‘but does not include any such person’, in the
end of the first part of the definition read with cll (iii) and (iv), would be that any person employed to do ‘technical’ work
would fall outside the purview of the definition of ‘workman’, if he: (i) is employed mainly in a managerial or
administrative capacity; or (ii) being employed in supervisory capacity draws wages exceeding Rs 500 per mensem or
exercises, either by nature of his duties attached to the office or by reason of the powers vested in him functions mainly of
a managerial nature. Unless, therefore, a person employed to do any ‘technical’ work is excluded by virtue of cll (iii) and
(iv), he will fall within the ambit of the definition of ‘workman’ irrespective of the amount of salary he draws or the nature
of duties he performs. After the amendment, persons doing technical work such as draftsmen, engineers, assistant
engineers, foremen, glass technologists, medical officers, compounders and doctors, etc, would fall within the definition of
workmen. For instance, chemists working in Burmah Shell were held to be performing technical work and not working in a
supervisory capacity. On the contrary, sales representatives and transport engineer were held to be falling outside the

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definition of workman because the nature of their work did not fall in any of the four specified categories, in particular, the
technical work, as their duty was to promote sales which could not be held to be technical work.57

The work of a personnel manager who was a qualified lawyer in giving advice and guidance to the management with
respect to labour laws was held not to be of a technical nature.58 A film cameraman has been held to be a ‘workman’ as
film photography is technical work.59 The pilots flying aircrafts of the air companies are treated as workmen irrespective of
the fact that they draw heavy remuneration.60 No doubt, a medical officer of an establishment will fall within the purview
of the definition of workman as the nature of his work is ‘technical’,61 the doctors, however, rendering only professional
services to various establishments where no relationship of employment is created between parties will not be entitled to
claim the status of a workman. It could not be the intendment of legislation to cover the professional doctors who have no
relationship of employment with the establishment they serve in the definition of workman. A graduate apprentice who
was appointed as a senior foreman and on the relevant date was working as a development officer carrying basic salary of
Rs 1050 and dearness allowance of Rs 210, on the facts and in the circumstances of the case, was held to be a workman
doing only technical work and not supervisory, administrative or managerial work.62 A geologist working in a company is
a workman. The mere fact that he was assisted by a driver, who was only to drive his vehicle and a helper, who was only
assisting him in transportation of instruments could not make him a person performing supervisory duties.63 A
physiotherapist, who is performing the duties as assigned to him by the department or medical superintendent, exercises no
function of managerial nature and is a workman as defined in the Act.64 A general duty medical officer, who is in charge of
a first-aid and male nurse, nursing attendant, sweeper and ambulance driver and all of them working under him in the first-
aid post and taking instructions from him, is not a workman within the meaning of s 2(s).65 A Draftsman working under the
supervision of superiors is a workman.66

Operational Work

The expression ‘operational’ qualifying the word ‘work’ has been introduced by the Amending Act 46 of 1982.67The word
‘operational’ or any of its derivatives, has not been defined anywhere in the Act. The insertion of this expression, therefore,
at once introduces superfluity and ambiguity. According to Black’s Law Dictionary,68 an ‘operative’ is ‘a workman, a
labour man, an artisan, particularly one employed in factories.’ The Shorter Oxford English Dictionary says that an
operative is a workman ‘concerned with manual, or mechanical work’ or ‘a person engaged in work on production as a
workman or artisan.’69Webster’s Third International Dictionary,70 defines an ‘operative’ as a person who is to do physical
operations by hand or machines; occupied in productive labour; a skilled or unskilled person employed in an industry; one
who operates or works in any branch of industry, trade or profession, a worker; a workman in any industry, art and an
artisan or mechanic. From these etymological meanings ascribed to the word ‘operative’, it is obvious that any type of
work in an industrial establishment performed by the workers, is ‘operational’ work. Every type of’operational work’
would also fall in the other categories of work, viz, manual, unskilled, technical, clerical or supervisory, as well. The
workers doing operational work may be called operatives. Though the contours of the other expressions used in qualifying
the word ‘work’ have been delineated by judicial dicta, the dimensions of the expression ‘operational’ are hazy and vague.
If the legislature intended to bring all types of work performed by the workmen in an industry within the perimeter of the
definition, it was not necessary to use so many expressions to qualify the word ‘work’. It would have been advisable to
delete all the words after the words ‘to do any’ and before the word ‘work’ in the opening part of the definition. Then the
relevant portion will read: ‘workman’ means any person (including an apprentice) employed in any industry to do any
work for hire or reward’. This object could have been better achieved with precision and clarity by deleting all the
adjectival expressions after the words ‘to do any’ qualifying the word ‘work’ in the opening part of the definition instead
of adding an ambivalent expression like ‘operational’. This would have obviated obscurity.71

Clerical Work

In common parlance, a clerk is one employed for doing routine work as a writer, copyist, account-keeper or correspondent
in office. His work implies stereotype work, without power of control or dignity or creativeness. Clerical work, as
ordinarily understood, is synonymous with routine, stereotype work which does not involve any initiative, control or
dignity.72 A clerk employed to do general office duties may be styled as a general assistant, but this does not necessarily
confer upon him the rank of an officer.73 Both manual and clerical work, in the sense in which these terms have been used
in s 2(s), connote more or less routine work, skilled or otherwise, which does not require any material amount of initiative
in its performance, the employee entrusted with such work not being required to perform substantial duties of a
supervisory, directional or controlling nature. In ascertaining the true status of an employee, regard must be had not to any
temporary arrangement that might be made as a measure of convenience but to his substantive position.74 The duties of a
clerk are not inconsistent with a limited amount of supervision and control over other employees, but in each case it will be
essential to examine the facts and to determine what is the nature of the work. The question as to whether a particular
person is doing clerical work or not, has to be decided by finding out the dominant nature of the work done by an
employee.75 The question is essentially one of fact and no general answer which can cover all cases is possible.76

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In Madikal Service Co-op Bank,77 the bank manager of a co-operative bank claimed to be a workman because certain of his
duties involved clerical work. A single judge of the Kerala High Court found that the manager was in immediate and near
control of the functions of the branch and was responsible for the executive administration even though he was functioning
under the secretary and was subject to the control of the board of directors. The nature of his duries and functions were
mainly managerial and whatever clerical work he might have been doing was only negligible. Since his employment was
mainly of managerial and administrative nature, he would not fall within the definition of a ‘workman’. A legal assistant,
who is not discharging any functions of a managerial nature nor employed in a supervisory capacity, but tendering only
legal advice as and when called upon by the management is a workman as defined in s 2(s).78 A salesman who discharges
the duties of providing service to farmers, maintaining records and expenditure connected with function of service centres,
and timely submission of reports, etc, is essentially doing a job of clerical nature, and is a workman within the meaning of
s 2(s) 79but a single judge of the Gujarat High Court took a different view and held that a ‘salesman’ who collects the
material and despatches the same as per the same order booked by him would not answer to the definition of workman, and
he cannot invoke the machinery provided under the Industrial Disputes Act.80 The tour executive of a travel agency, whose
job is to look after the tourists arriving at the airways and their lodging, make out and verify their bills, etc, is a workman
within the meaning of s 2(s).81 In Sanjeev Kumar, the Punjab and Haryana High Court held that it would be dangerous to
adjudge the nature of work from the allowance a man was getting. The nature of work was allotted to him by virtue of his
post. A senior accounts assistant, re-designated as accounts executive, doing the work of preparation of vouchers, details of
cheques, etc, and having no managerial or administrative powers, would be a workman within the meaning of s 2(s).82

(i) Illustrations of Clerical Work:

An employee working as an accountant in the branch office of a company doing mainly clerical work, ie, maintenance of
general ledgers, journals, store-ledger and the preparation of drafts and letters in connection with the maintenance of his
accounts was directed to take charge of the branch office from the branch manager temporarily and he was doing the
additional work of supervising the work of the other clerks, disbursing salaries and replying to the letters received by the
office, according to instructions from the head office for some time. In the facts and circumstances of the case it was held
that the employee was doing the work of a clerical nature and the addition of some duties temporarily did not alter his
status as a clerk.83 An assistant manager of a bank whose duties were purely of a clerical nature and who put up notes
regarding leave and staff matters to the manager who passed orders on them was held to be doing clerical work.84 A
cashier whose duties were not of any directional or supervisory nature was held, to be performing duties of clerical
nature.85 A depot superintendent and an assistant depot superintendent employed by an oil distributing company
performing duties substantially of a clerical nature were held to be clerks.86 The work of a draughtsman employed by a
machinery manufacturing company to make copies of drawings was held to be of a skilled clerical nature.87 A godown
keeper whose work was of a purely clerical nature was held to be a clerk.88 The work of an inspector in a joint audit
department of a commercial organisation was held to be mainly of a clerical nature.89 Proof-readers in offices of
newspapers who read and correct proofs which involves no judgment and the nature of whose work is more or less
mechanical were held to be mainly doing clerical work.90 The work of a sub-agent at the main office branch of a bank
whose duties were purely of clerical nature, but who had incidentally to do some supervisory work also was held to be
clerical.91 A lady secretary engaged to do stenographical, clerical or secretarial work of a confidential nature was held to be
doing work only of clerical nature.1 The work of a time-keeper whose duty was only to check arrivals and departures was
held to be a work of clerical nature.2 A touring representative employed by a film distributing company to check sales and
sale proceeds at various centres who had to submit reports of checking sales to the company was held to be doing work
only of a mechanical nature and hence purely of clerical nature.3 A watch and ward inspector in a sugar factory who had
also to purchase materials for stores, spare parts, secure permits and fitness certificates, submit reports, maintain a diary of
the work done all under the direction of the management without any independent initiative and who during the working
season had to perform some supervisory duties along with maintaining a number of registers involving a lot of clerical
work was held to be a workman on account of the preponderance of clerical duties over supervisory duties.4

(ii) Illustrations of Non-clerical Work:

The work of an advertising manager, employed inter alia for securing advertisement for a journal and to devise ways and
means of increasing the circulation.5 The work of chemists employed in sugar mills even though they had incidentally to
record the results of their chemical analysis coupled with ancillary work of typing.6 Doctors and compounders employed in
the dispensaries of industries.7 The work of sub-editor of a story-magazine to make additions, alterations or corrections in
news items, stories or articles and select strories and perform duties which involve literary talents of a high order which
also involve exercise of judgment, initiative, and creation.8 The work of a person employed as an engineer, later resident
engineer incharge of a very important engineering construction which required technical knowledge, initiative and
independent judgment and was not merely a routine mechanical type of work.9 The duties of a gate sergeant incharge of
watch and ward staff in a tannery to look after the property of the factory by supervising his own men.10 The work of

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welfare officers in a commercial education institution.11 The work of teachers working in education institutions.12 Porters
and Graders waiting in the marketing yard and engaged by merchants and growers for loading, unloading and grading of
agricultural products are not the workmen of the Cooperative Marketing Society - a society which was formed with the
object of protecting the growers from exploitation by traders - as they are neither appointed by the society nor does the
society exercise any control over them.13 The view expressed by Chalapathi J of the Punjab and Haryana High Court in
Darshan Lal,14 did not seem to have found favour with the Supreme Court. A legal assistant in a sugar mill performing
duties such as preparing written statements and notices, recording enquiry proceedings, giving opinions to management,
drafting, filing pleadings and representing management in all cases and also conducting departmental enquiries does not
perform a stereotype job. His job involves creativity and hence, he cannot be said to be workman.15 In Muir Mills, the facts
disclosed that the respondent-workman was appointed by the appellant-company as a legal assistant. It was found that he
was working in a supervisory capacity and was supervising court cases and whenever necessary preparing draft replies to
matters that were pending in the court. Drawing a distinction between profession and occupation, Lakshmanan J (for self
and Kabir J) observed:

... if we draw a distinction between occupation and profession we can see that an occupation is a principal activity (job, work or
calling) that earns money (regular wage or salary) for a person and a profession is an occupation that requires extensive training
and the study and mastery of specialized knowledge, and usually has a professional association, ethical code and process of
certification or licensing. Classically, there were only three professions: ministry, medicine, and law.These three professions each
hold to a specific code of ethics, and members are almost universally required to swear some form of oath to uphold those ethics,
therefore “professing” to a higher standard of accountability. Each of these professions also provides and requires extensive
training in the meaning, value, and importance of its particular oath in the practice of that profession. ... A member of a profession
is termed a professional. However, professional is also used for the acceptance of payment for an activity. Also a profession can
also refer to any activity from which one earns one’s living, so in that sense sport is a profession. ... it is clear that respondent No.1
herein is a professional and never can a professional be termed as a workman under any law.16 (Paras 36-38)

In yet another case involving a similar set of facts in Glaxo Smithklin Pharmaceuticals, a person, who was appointed as
‘Industrial Relations Assistant’, was found to have been performing functions, such as tendering legal advise to the
management from time to time, preparation of draft enquiry report, conducting domestic enquiries and holding conferences
with advocates in relation to the company’s acts. It was further found that, as an employee in the category of management
staff, his conditions of service were different than those provided for the workers of the company, and that the leave and
pension scheme applicable to him were not covered by the settlement reached between the company and its workmen.
Pasayat J (for self and Panta J), upheld the decision of the High Court to the effect that, in the light of the nature of
functions performed by the appellant which are managerial in nature, he could not be considered to be a workman within
the meaning of the Act.17

Supervisory Work

Section 2(s), as it originally stood, defined a workman as meaning, inter alia, any person employed (including an
apprentice) in any industry to do any skilled or unskilled, manual or clerical work for hire or reward. Under this, employers
often claimed that the workmen concerned were officers or members of the supervisory staff and as such did not fall under
s 2(s), and workmen used to contend that they were doing merely clerical or mechanical work and did not fall in the class
of officers and supervisors. Under the present definition, a person engaged to do supervisory work unless he falls within
the exception of cl (iv) shall fall within the definition. It is, however, evident from the definition that the employee in order
to fall within the definition of workman must have been ‘employed’ in a ‘supervisory capacity’. Merely performing some
supervisory duties will not take the employee out of the definition of workman. The word ‘supervision’ means to oversee,
to look after. Therefore, ‘supervision’ which is relevant in this connection is the supervision done by an employee in a
higher position over the employees in the lower position. Such supervision is the supervision of the work which is in
connection with the industry in question.18 In the words of Hidyatullah J:

The word ‘supervise’ and its derivatives are not words of precise import and must often be construed in the light of the context, for
unless controlled, they cover an easily simple oversight and direction as manual work coupled with a power of inspection and
superintendence of the manual work of others.19

The words have to be construed in the context of the definition but what determines the question whether a person is doing
supervisory work or not is the nature of the duties and functions assigned to him. Supervision may be in relation to the
supervision of an automatic plant. The person who attends on such a machine may do either technical or manual work but
he does not do supervisory work merely because he looks after the machine. The word ‘supervisor’ means a person who
oversees the work of others. It means ‘overseer’. A person can be said to be a supervisor if there are persons working under

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him, over whose work he has to keep a watch. In other words, he is that person who examines and keeps a watch over the
work of his subordinates and if they err in any way, corrects them. It is his duty to see that the work in any industrial unit is
done in accordance with the manual, if there is one, or in accordance with the usual procedure. It is not his function to
bring about any innovation. It is not his function to take any managerial decision, but it is his duty to see that the persons
over whom he is supposed to supervise, do the work assigned to them according to the rules and regulations. The central
concept of supervisor is the fact that there are certain persons working under him. If a person is doing any work which
does not require him to look after or inspect or examine the work of persons who are subordinate to him or working under
him, that person cannot be said to be a supervisor. Supervision necessarily refers to persons working under the supervisor
and it does not extend to supervision of plant and machinery. Checking the plant and the machinery will not make a person
supervisor. In other words, supervision means ‘supervision over men and not machines’.20 The essence of ‘supervisory’
work is the supervision by one person over the work of the others. Supervision contemplates direction and control. A
‘supervisor’, as understood in s 2(s) really means that the person exercising supervisory work is required to control the
men and not the machine.21 It is not necessary that a supervisor must be supervising his fellow employees. It is enough that
the supervisory work must be working in relation to the industry in which the person is employed but the work in relation
to the industry may be done by an independent contractor whose work may also require some supervision.22 His duty is to
see how the employees will be engaged in different works of production and maintenance.23

The Patna High Court in Bipin Bihari, observed that merely because it has not been shown that the development officers of
the Life Insurance Corporation of India have no power of assigning duties and distribution of work among insurance
agents working in their area, it cannot be held that their work is not supervisory in character. Likewise, the power of
appointment and dismissal or disciplinary power are not necessary incidents of supervisory power, they more properly
appertain to managerial power. Even in the absence of such power, a person can supervise the activities of other employees
working under the same master.24 For exercising ‘supervisory’ power, it may often be necessary that the ‘supervisor’
himself must have technical expertise, otherwise he may not be in a position to exercise proper supervision of the workmen
handling sophisticated plants and machineries. But if a person is required to render his technical knowledge in the matter
of production alongwith other workmen as directed by other supervisors, then he cannot be said to be exercising
supervisory works or administrative works.25 Ordinary supervision work is not of a ‘supervisory’ nature for the purposes of
the definition.26 Having regard to the categories of service indicated by the use of different words like ‘supervisory’,
‘managerial’ and ‘administrative’, it is not necessary to import the notions of one into the interpretation of the other. Such
words are advisedly loose expressions with no rigid frontiers and too much subtlety in trying to precisely define where
supervision ends, management begins or administration starts should not be encouraged for that would be theoretical and
not practical. It should be broadly interpreted from common sense point of view where tests will be simple both in theory
and their application. Interpreting so:

(i) a supervisor need not be a manager or an administrator;

(ii) he can be a workman so long as he does not exceed the wage limit of Rs 1600 per month (as it then was); and

(iii) irrespective of his salary, he is not a workman who is to discharge functions mainly of managerial nature by reason of the
duties attached to his office or the powers vested in him.27 A superintendent, quality control, drawing a salary exceeding
Rs 1600 per month (as it then was) is not a workman.28

Dealing with the disputes with respect to the nature of the work performed by an employee as to whether it was of
supervisory nature or otherwise, industrial adjudication generally considers the essence of the matter and does not attatch
undue importance to the designation of the employee or the name assigned to the class to which he belongs. It is always a
matter of determining what the primary duties of an employee were—Does he do clerical or manual work? If the answer is
in affirmative, he is a workman. Or are his duties of supervisory nature? If the answer is in affirmative, he is not a
workman. In considering the latter aspect of the problem, industrial adjudication generally has taken the view that the
supervisor or an officer should occupy a position of command or decision and should be authorised to act in certain matters
within the limits of his authority without the sanction of the manager or other supervisors.29 To come to a conclusion that a
person is working in a supervisory capacity, it is necessary to prove that there were at least some persons working under
him whose work he is required to supervise. The mere fact that a person is incharge of a section, would not make him a
supervisor if there is nobody else in the section whose work is to be supervised. A person cannot be said to be working in a
supervisory capacity merely because he is to supervise the person, who helps him in doing the work, which he himself is to
perform. For instance, a clerk who has been given the assistance of a peon, cannot be said to be working in a supervisory
capacity. Likewise, training by a chief analytical chemist to an apprentice as a part of work by itself cannot become
supervisory work. It is necessary to prove that the person is working in a supervisory capacity or exercising supervisory
power.30 When one talks of a person working as a supervisor, one understands it to mean a person who is watching the
work being done by others to see that it is being done properly.31 Thus, in determining the status of an employee, his
designation is not decisive; what determines the status is the consideration of the nature of his duties and the functions

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assigned to him.32 Even the fact, that the work performed by a workman is of responsibility and onerous nature, would be
immaterial for determining the question as to whether his work is of supervisory character or not.33

These principles, though on their face appear to be simple, in their application have often vexed the courts. In May &
Baker (supra), on the construction of the definition of ‘workman’ before its amendment in 1956 in which the word
‘supervisory’ did not occur, the Supreme Court held that the employee concerned whose main work was that of canvassing
and incidental to that work he did some clerical or manual work as well, was not a ‘workman’ within the meaning of s 2(s).
As the use of the word ‘mainly’ accentuates its significance, the employee was held not to be a ‘workman’ because, the
manual work was merely incidental to his main duties. Later, in South India Bank, referring to the work of an accountant
who occasionally acted in place of the agent, the court observed that the mere fact that he was designated as accountant
would not take him out of the category of ‘workman’. He was merely a senior clerk, doing mainly clerical duties going by
the designation of the accountant and was in reality in place of the agent when the agent was absent, did not form part of
his principal and main duties.34 In Ananda Bazar Patrika, it was held:

The question, whether a person is employed in a supervisory capacity or on clerical work, in out opinion, depends upon whether
the main and principal duties carried out by him are those of a supervisory character, or of a nature carried out by a clerk. If a
person is mainly doing supervisory work, but, incidentally or for a fraction of the time, also does some clerical work, it would have
to be held that he is employed in supervisory capacity; and, conversely, if the main work done is of clerical nature the mere fact
that some supervisory duties are also carried out incidentally or as a small fraction of the work done by him will not convert his
employment as a clerk into one in supervisory capacity.35

In State Bank of Hyderabad, the Supreme Court had to consider the claim of certain employees for payment of special
allowance granted to ‘supervisors’ under certain bank awards, ie, Shastri and Desai awards. The stand of the bank was that
in order to claim supervisory allowance, the employees must establish that the main or essential duties entrusted to them
and actually discharged by them were duties and functions of a supervisory nature. The court observed:

Before a person can claim the supervisory special allowance, he must establish that he has discharged the duties and functions
which are similar to or the same as the duties or functions assigned to supervisors coming under category...In deciding the status of
an employee claiming the special allowance, the designation of the employee is not decisive and what determines the status is a
consideration of the nature of the duties and functions assigned to the employee concerned.36

Where the labour court, having held that the employee was holding a supervisory position and hence not a workman within
the meaning of s 2(s) and hence the reference was liable to be rejected, yet directed the management to pay Rs 75000 as
compensation, the High Court quashed that part of the award of the labour court by which compensation was awarded and
held that the remedy of the employee could lie in the civil court only.37 The accountant of a company whose predominant
and primary duties were supervisory in nature and his main duty was to supervise the accounting section of the factory of
which he was the head, is not a workman, even though some of the work he was doing in the absence of the clerks or in
association with clerks in the preparation of accounts, which was only incidental to his main job to oversee the work of his
subordinates.38 Maintenance supervisor, who is treated as part of management personnel having separate pension and
gratuity schemes and was delegated the duties of recommending leave, calling for requisition from stores and evaluating
the work of employee below him is not a ‘workman’ within the meaning of s 2(s).39 A senior service engineer, whose job
was installation, servicing and repair of xerox machines, is a ‘workman’ within the meaning of s 2(s), although he was
drawing a salary of Rs 3400 per month, more so, when no evidence was led by the employer to show that his job was
managerial or supervisory in nature.40 The question whether an employee performs supervisory duties or not is pre-
eminently a question of fact.41 A person who is doing manual, clerical and technical work will come within the definition
of workman if incidentally he does some supervisory work also. In determining as to whether certain categories of
employees would fall in the definition of workmen or not or in order to exclude a man from the definition of industry, the
employer has specifically to plead and prove the fact that the employee concerned worked mainly and principally in
supervisory capacity or in managerial or administrative capacity or supervisory capacity and was drawing wages exceeding
Rs 1600/-, now Rs 10,000/-. In the absence of precise and positive evidence to prove the exact nature of work which the
employee was performing, it cannot be held that he was doing administrative or supervisory work.42 A traffic inspector
working in a road transport corporation whose duties were predominantly supervisory in character, could not be held to be
an artisan and, therefore, not a workman.43

(i) Illustrations of Supervisory Work:

The work of an employee as head of a department having power of control, supervision and direction over his department
for the purpose of recruitment, promotion, etc.44 The work of labour officer in a jute mill involving exercise of initiative,

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tact and independence.45 The job of an assistant engineer working as shift engineer having control over workmen working
under him.46 The duties of a person employed as district mains engineer employed by an electricity supply company who
has to see other employees working under him discharge their duties properly.47 The work of a gate sergeant incharge of
the watch and ward staff of a tannery whose main duty was to look after the property of the factory by supervising his own
men.48 The work of an assistant weaving supervisor in a jute mill.49 The work of the depot superintendents, and assistant
depot superintendents involving a considerable amount of initiative to perform them; the duties performed by transport
engineers; blending supervisors and the foreman and depot superintendent the foreman (chemicals) are supervisory in
nature in view of the principal duties performed by them. Incidentally, they were also drawing salary in excess of Rs 500
per month in terms of the exception under sub-clause (iv).50 The work of a personnel manager who was a qualified lawyer
in giving advice and guidance to the management with respect to labour laws was held to be of supervisory nature.51
Development officers of the Life Insurance Corporation of India supervising the work of the agents in promoting the sales
of the insurance policies are doing supervisory work.52 Workmen who were promoted as sub-managers and are governed
by separate terms and conditions were not ‘workmen’ within the meaning of s 2(s).53

(ii) Illustrations of Non-supervisory Work:

The work of an auditor performing the duties of checking of accounts which is purely mechanical in nature and does not
involve any supervisory function.54 The work of a teller in a bank which does not show any element of supervisory
character.55 The duties performed by the fuelling superintendent were held not to be mainly or substantially of supervisory
nature but were mainly of a manual nature. Hence, they were not excluded from the definition of workman by exception
(iv) though they were drawing salary of more than Rs 500 per month.56 A mechanic doing ordinary supervisory work of
supervising automatic machines would not be doing ‘supervisory’ work.57 An inspector of an insurance company, whose
main duties involve procuring business to the management, organising and developing the business within the allotted
area, is not a ‘workman’ within the meaning of s 2(s). If in the process of procuring business, he collects cash and gives
receipt, it is only an incidental duty being performed by him along with his main duties, which would not make him a
workman.58

Officers:

An officer is generally invested with the power of supervision and control in contradistinction to the stereotype work done
by a clerk.59 He generally occupies a position of command or decision and is authorised to act in certain matters within the
limits of his authority without the sanction of his superiors.60 In SK Verma (supra), from the terms and conditions of the
appointment of a Development Officer of LIC, the Supreme Court noticed that he was a whole-time employee of the
corporation. His principal duty was to organise and develop the business of the corporation in the areas allotted to him and
for that purpose to recruit active and reliable agents, to train them to canvass new business and to render post-sale services
to policy-holders. He was expected to assist and inspire the agents; he was expected to stimulate and excite the agents to
work and thus he was to be a friend, philosopher and guide of the agents working within his jurisdiction and no more, but
he had no authority whatsoever to bind the corporation in any way. He had no authority to appoint agents or take
disciplinary action against them. Nor did he supervise the work of the agents. The agents were not his subordinates. Nor
did he have any subordinate staff. In these circumstances, the court held that he was a ‘workman’. This case was wrongly
decided apart from reflecting gross judicial indiscipline on the part of the learned judge, in so far as the issues raised in the
case were squarely covered by May & Baker and Burmah Shell (supra).

It was in HR Adyanthaya that a Constitution Bench finally and flatly rejected the judicial aberrations of grave magnitude
surfaced in the decision of Reddy J, in SK Verma, and very rightly so. Justice Sawant (for self, Singh, Mohan, Ray and NP
Singh JJ), peremptorily held that SK Verma was decided per incuriam.61 The question raised in Adyanthaya was: whether a
‘medical representative’ is a workman within the meaning of s 2(s) ? Justice Sawant referred to the relevant provisions of
SPECSA and held in the negative, as the nature of work they perform could not be said to fall under any of the
expressions, ie, ‘skilled’, ‘clerical, ‘technical’ or ‘operational’. The learned judge highlighted the fact that in Ved Prakash
Gupta too, the Bench did not refer to May & Baker, WIMCO and Burmah-Shell cases. The learned judge did not, however,
hold Ved Prakash Gupa as per incuriam. But, the fact remains that Ved Prakash too was indeed per incuriam, in the light
of the fact that the said decision was given contrary to, and in total ignorance of, the earlier decisions which were binding
on the Bench. In Mukesh Tripathi, the facts briefly were: the appellant was appointed by LIC as apprentice development
officer to be imparted training for a period of one year, whereafter he was to be appointed as a development officer,
provided his work and conduct were found satisfactory. His apprenticeship was terminated at the end of one year. The
tribunal held that since he was terminated after completing one year, he was a workman, which was set aside by the High
Court. Upholding the decision of High Court, Sinha J, observed:

It may be true...that SK Verma (supra) has not been expressly overruled in HR Adyanthaya (supra) but once the said decision has
been held to have been rendered per in curiam, it cannot be said to have laid down a good law. This Court is bound by the decision

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of the Constitution Bench. ... A ‘workman’ within the meaning of Section 2(s) ...must not only establish that he is not covered by
the provisions of the Apprenticeship Act but must further establish that he is employed in the establishment for the purpose of
doing any work contemplated in the definition.62

It is submitted that Adyanthaya and Mukesh Tripathi were consistent with the principles laid down in 1960s and 1970s and
were right, whereas the decisions in SK Verma and Ved Prakash Gupta were per incuriam, wholly misconceived and
completely flawed. The apex court has rightly rejected the faulty reasoning and perverse conclusion in these cases. A
purchase officer, in a company manufacturing printed packing material work involving specialized knowledge of
machinery and material purchased and of the market, performs mainly managerial functions, and hence is not a
workman.63 In another case involving a similar set of facts, the learned judge held that a person who was appointed as Asst
Puchase Officer (Logistics Management) and performs functions such as appraisal of staff, assessing and verifying the
work done by subordinates is a ‘workman’.64 In Kirloskar Electric Co, Agarwal J, of Delhi High Court observed that the
designation of Accounts Officer or Assistant Manager is only a misnomer as long as the nature of duties performed by the
incumbent suggest that he was performing clerical duties, and that the employee was being appointed for a fixed term of
three years and renewing the contract every time only with a view to deny the benefits available to him under the Act. On
this view of the matter, the learned judge held that there was no merit in the writ petition.65 In Standard Chartered Bank,
the facts were: the respondent workman was appointed as a Personal Financial Consultant and the duties assigned to the
incumbent included “achieving allocated business targets, ensuring high quality customer service, ensuring external and
internal compliance on all branch transactions, handling difficult customer situations and contributing to the overall
achievement of business growth.” While setting aside the award passed by labour court directing her reinstatement,
Chandrachud J, of Bombay High Court held that the labour court had erred in so far as it did not have regard to the
dominant nature of duties assigned to her.66 It is significant that this decision of the learned single judge was upheld, in
appeal, by the Division Bench of Bombay High Court comprising Ms Ranjan Desai and Mr Ranjit More, JJ67A surgeon
employed in a eye hospital is a professional who is required to use his skill and knowledge in diagnosing and treating
patients, and he cannot be said to be a ‘workman’ within the meaning of ID Act.68

Persons Excluded

The definition specifically excludes all such persons who fall in any of the following four cases even though they may be
satisfying the requirements of the main section. Once it is shown that the concerned employee is performing any skilled or
unskilled, manual, supervisory, technical or clerical work, then he shall be considered to be a ‘workman’ unless he falls
under any of the excluded cases. The exclusion has to be proved by the party which claims that the case falls in any of the
excluded categories.

Sub-clause (i): Armed Forces

This clause excludes the following categories of persons from the definition who are subject to:

(1) The Air Force Act 1950 (45 of 1950), or

(2) The Army Act 1950 (46 of 1950), or
(3) The Navy Act 1957 (62 of 1957).

Section 9 of the Army Act 1950 (46 of 1950) does not make any person subject to the Army Act, but it only declares
civilians of defence services to be on active service. The employees employed in the engineering stores depot of the
defence establishment under the Ministry of Defence, therefore, would not be subject to the Army Act 1950. Accordingly,
the employees not being in active defence service cannot be excluded from the definition of workmen.69

Sub-clause (ii): Police and Prisons

This clause excludes any person who is in the police service or an officer or other employee of a prison. In Hussan
Mhasvadkar, the Supreme Court held that the powers of the Inspector appointed by the Bombay Iron and Steel Labour
Board constituted under Maharashtra Mathadi, Hamal and Other Manual Workers (Regulation of Employment) Act 1969,
and the duties and obligations cast upon him are identical and akin to law enforcing agency or authority and are also at part
with a prosecuting agency in the public law field, and hence he is not a ‘workman’ under s 2(s).70

Sub-clause (iii): Managerial or Administrative Capacity

This clause excludes the persons working in ‘managerial or administrative capacity’ from the purview of the definition,
even though they may be satisfying other ingredients of the definition.71 The words ‘managerial or administrative capacity’

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have not been defined in the Act, therefore, have to be interpreted in their ordinary sense. In order to be in a position of
management, it is not necessary that the employee should be at the top of the heirarchy or that he should have absolute
power in any respect. It is not even necessary that the individual should be in the sole control of an organisation or of a
department of that organization. The clause speaks of persons ‘employed mainly in a managerial or administrative
capacity’; it does not say what they have to be in management. But it is not difficult to say that the management which the
section envisages and with which a person may be entrusted may be in respect of matters falling within a department,
sector or compartment of the establishment. It would not be right to say that a person is not in a position of management
unless he has jurisdiction over any definite territory; managerial position can be attained also inside a department. It is not
necessary that the person should have the power of making appointments. If an individual has officers subordinate to him
whose work he is required to overlook, if he has to take decisions and also the responsibility for ensuring that the matters
entrusted to his charge are efficiently conducted and an ascertainable area or section of work is assigned to him, an
inference of a position of management would be justifiable.72 Managerial or administrative functions require a person to
control the work of others. For instance, a branch manager of a bank exercising all managerial powers on account of the
nature of the duties attached to the post of a manager could not come under the definition of ‘workman’73 It does not mean
that a person, who does some work and gets assistance for doing that work, can be described as a person who is working in
a managerial or administrative capacity.74

The mere designation by which a person is designated is not conclusive of his status as an officer; industrial adjudication
has to look to the nature of the duties assigned to the person concerned.75 In order to take an employee out of the definition
of a ‘workman’, it is necessary to show that he is employed, in fact and substance, mainly in a managerial or administrative
capacity.76 The fact whether the supervisory functions predominate or the functions are mainly of a managerial nature is
very difficult to assess and almost impossible to determine without clear and adequate evidence.77 The mere designation of
a person as a manager or administrator of an industry is not sufficient to conclude that he is not a workman. An adjudicator
has to see whether he is or was employed in the industry to do any managerial or administrative work. It is, however for
the employee to specifically state and establish before the adjudicator that he was a workman and was not employed
mainly in a managerial or administrative capacity.78 An employee whose substantial duty was only that of a security
inspector at the gate of the factory premises could not be excluded from the definition of ‘workman’ because he was not
performing the duties either of managerial or supervisory nature.79 The management has to raise a specific plea before the
adjudicator that the workman is not a workman for the reason of being employed in a managerial or administrative
capacity. In case another plea is taken, for instance, that the employee was not a workman being employed in a supervisory
capacity and drawing wages more than Rs 1,600 which is rejected by the tribunal, the management will not be permitted to
make a somersault and take the plea that the employee was employed in a managerial or administrative capacity.80 Mere
reference of the dispute pertaining to a manager cannot confer jurisdiction on the labour court or tribunal, having regard to
the fact that the employee was not a workman under s 2(s).81A person appointed as assistant electrical engineer and
promoted to the level of factory administrator and manager (special assignment) is not a ‘workman’, and hence, not
entitled to relief under the Act.82

An employee designated as manager (research and development) and entrusted with the job of promoting and projecting
company’s image, creating new products, continuous investigation and identification of alternative materials for
substitution in the existing product range, finding remedies for existing problems in order to improve quality and
efficiency, etc, is a workman.83 The development officer of LIC of India is not a person in administrative or managerial
cadre and as such is a ‘workman’ within the meaning of s 2(s).84 Where the management had treated the employee as
workman under s 2(s) for the purpose of issuing charge sheet and conduct of enquiry, it is estopped from taking the stand
before the labour court that the delinquent was not a workman.85 The secretary of a cooperative society whose
responsibility is the management of affairs and executive administration of the society, as stipulated in its bye-laws, is not
a workman within the meaning of s 2(s).86 In Press Trust of India, a single judge of Madras High Court held that persons
performing managerial or supervisory functions and are drawing more than Rs 1600/- pm (now Rs. 10,000/-), on facts are
not workmen within the meaning of s 2(f)(i) and (ii) of the Working Journalists and Other Newspaper Employees
(Conditions of Service) and Miscellaneous Provisions Act 1955 [WJONE (CoS) & MPA 1955].87 A Pastor in a Church is
not a workman under s 2(s) of IDA.88 In a yet another interesting case in Manoranjan Chakraborty, the employer issued a
charge-sheet to an employee and conducted domestic enquiry as provided for in the standing orders of the company
culminating in his dismissal from the service. The tribunal passed an award holding that the reference of the dispute by the
government was not maintainable as he was not a ‘workman’ within the meaning of the ID Act. Aggrieved by the said
award, the employee approached the High Court. While remanding the case to the tribunal, PK Ray J, of Calcutta High
Court held that the respondent-employer led the employee to believe that he was a ‘workman’ and conducted domestic
enquiry as per certified standing orders; hence the company was estopped from pleading that the petitioner was not a
workman but supervisor. The learned judge observed that the aforesaid point was not considered by the tribunal with the
result its decision was vitiated with perversity and illegality.89 Branch Manager of a co-operative bank is not a
‘workman’.90

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Sub-clause (iv): Supervisory Capacity

A person doing work of a ‘supervisory’ nature has been added in the definition of ‘workman’ by the Amending Act of
1956 but this clause excludes such a person who being employed in supervisory capacity:

(1) draws wages exceeding Rs 1,600 per month; or

(2) exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions
mainly of a managerial nature.91

Thus, any person employed in an industry to do any supervisory, technical or clerical work for hire or reward is a
‘workman’. But cl (iv) contemplates that a person employed in a supervisory capacity will also be a workman provided he
does not draw wages exceeding Rs 1,600 per mensem.92Ordinarily, a supervisor or an officer occupies a position of
command or is authorised to take independent decisions and is authorised to act in certain matters within the limits of his
authority without the sanction of his supervisors.93 But in determining the question as to whether a person is employed in a
supervisory capacity or otherwise, the mere designation is not decisive of the nature of employment. The question whether
a person is employed in a ‘supervisory’ capacity or on clerical work, depends upon whether the main and principal duties
carried out by him are those of a supervisory’ character or of a nature carried out by a clerk. If a person is mainly doing
‘supervisory’ work, but, incidentally or for a fraction of the time, also does some clerical work, he would be deemed to be
employed in a ‘supervisory’ capacity. For instance, a foreman working in the job department of a newspaper press whose
duty required him to ensure output by efficiently managing the manpower, machines and materials and who was required
to recommend leave, appraise work for promotion and indenting material has been held to be a supervisor.94 Conversely, if
the main work done is of a clerical nature, the mere fact, that some supervisory duties are also carried out incidentally or as
a small fraction of the work done by him, will not convert his employment as a clerk into one of supervisory capacity.95 An
employee employed in the main capacity of a supervisor discharging the duties of allocation of jobs, assignment of work,
recommendation of leave, carrying out of promotional appraisals, but incidentally discharging other technical work will
not fall within the definition of ‘workman’.96 The question whether a person is a ‘workman’ or not is a mixed question of
fact and law, and where it is found that the employee was working as quality assurance in-charge of the company, most of
his duties are supervisory and managerial in nature, and he could not be said to be a workman.97 In Reserve Bank
Employees’ Assn, an ingenious argument was worked up before the Supreme Court on behalf of the workmen for drawing
a distinction between the word ‘work’ in the main part of s 2(s) and the word ‘capacity’ in cl (iv). It was suggested that the
Amending Act 1956 was enacted recognising the same difficulty as was experienced in the United States of America in
enacting the Taft-Hardey Act after the decision in Packard Motor Car,98 and may be said to have adopted the same tests by
making a distinction between ‘work’ and ‘capacity’. It was argued that these tests provided for that twilight area where the
operatives (to use a neutral term) seem to enjoy a dual capacity. But after noticing the changes introduced by the
Amending Act of 1956, the court repelled the argument. Speaking for the court, Hidayatullah J, said:

But the unity between the opening part of the definition and clause (iv) was expressly preserved by using the word ‘such’ twice in
the opening part. The words, which bind the two parts, are not—’but does not include any person’. They are—’but does not
include any such person’ showing clearly that what is being excluded is a person who answers the description ‘employed to do
supervisory work’ and he is to be excluded because being employed in a ‘supervisory capacity’ he draws wages exceeding Rs 500
per month, or exercises functions of a particular character.

Then after referring to the American statutes and the decision relied upon in the argument, the court went on to say:

The scheme of our Act is much simpler, than that of the American statutes. No doubt, like the Taft-Hartley Act, the Amending Act
of 1956 in our country was passed to equalise bargaining power and also to give the power of bargaining and invoking the
Industrial Disputes Act to supervisory workmen.

And then concluded:

Workman here includes an employee employed as supervisor. There are only two circumstances in which such a person ceases to
be a workman. Such a person is not a workman if he draws wages in excess of Rs 500 per month or if he performs managerial
functions by reason of a power vested in him or by the nature of duties attached to his office. The person who ceases to be a
workman is not a person who does not answer the description ‘employed to do supervisory work’ but one who does answer that
description. He goes out of the category of ‘workmen’ on proof of the circumstances excluding him from the category.1

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For instance, assistant engineers employed by the Kerala State Electricity Board drawing salary over Rs 500 per month and
performing supervisory duties were held to be falling under the excluded category and as such not to be workmen.2
Likewise, the development officers of the Life Insurance Corporation of India supervising the development of the business
of the corporation in promoting the sales of the insurance policies through the insurance agents working in their areas have
been held to be performing supervisory work.3 But an employee who was admittedly performing the duties of supervisory
character was held to be a workman because the management had failed to show that he was drawing wages exceeding Rs
500 per month.4 It is only the persons employed in ‘supervisory capacity’ drawing wages exceeding Rs 1,600 per month or
performing functions mainly of managerial nature who have been excluded from the definition. Clause (iii) excludes the
persons employed in an industry; if they are employed mainly in a ‘managerial or administrative capacity’. But before a
person who is doing supervisory work and whose wages do not exceed Rs 1,600 per month, can be taken out of the
category of workmen, it must be shown that he is employed in fact and in substance mainly in a managerial or
administrative capacity.5 If a person is employed to do any work which is not in a managerial or administrative capacity,
he will not be excluded from the definition of ‘workman’ even if he draws wages more than Rs 1,600 per month.6 Hence a
person employed to do technical work, for instance, an engineer, a pilot of an aircraft, a technologist or a doctor, will
continue to be a workman even if his emoluments are far in excess of Rs 1,600, provided that his work is not of a
supervisory nature or his functions are not mainly of managerial nature. This appears to be somewhat anomalous.

A person employed as a personal assistant to the managing director who used to sign affidavits and letters as a principal
officer of the company and also used to enter into settlements and negotiations with the union on behalf of the company
has been held to be discharging the function of a supervisory nature. Since he was drawing remuneration comprising salary
of Rs 2,500 and conveyance allowance of Rs 1,000 he was held to be outside the purview of the definition of workman.7
On the other hand, a private secretary attached to an officer with the duty to arrange his official functions and to maintain
confidentiality in respect of matters she came across, has been held to be not working in a supervisory capacity or
discharging managerial or administrative function.8 A residential medical officer, who is responsible for the proper
maintenance and financial matters of the hospital, is not a workman.9 Station masters and traffic inspectors employed by
the state road transport corporation, are persons whose work is supervisory in nature and drawing a salary of Rs 1600/-
,(now Rs 10,000/-) per mensem, and hence are not workmen within the meaning of s 2(s).10 Where the duties of supervisor
(process) comprised receiving raw material and dispatching finished product, the mere fact that he was incidentally looking
after the work of plant foreman during his absence does not take him out of the purview of s 2(s).11 Checking of bags and
containers of employees at the entrance is not a job of supervisory nature; one or the other part of the job might be of a
supervisory nature, but that does not make the same a dominant one.12Medical representatives who answer to the definition
of ‘sales promotion employees’ within the meaning of s 2(d) read with s 6(2) of the Sales Promotion Employees
(Conditions of Service) Act 1976, fall within the definition of ‘workman’ under s 2(s) of the ID Act except when they are
engaged in supervisory or managerial or administrative capacity.13Stressing the need for recasting the definition of
workman, NCL-II recommended as follows:

Relatively better off section of employees categorised as workmen like Airlines Pilots, etc. do not merely carry out
instructions from superior authority but are also required and empowered to take various kinds of on the spot decisions in
various situations and particularly in exigencies. Their functions, therefore, cannot merely be categorized as those of
ordinary workmen. We, therefore, recommend that Government may lay down a list of such highly paid jobs who are
presently deemed as workmen category as being outside the purview of the laws relating to workmen and included in the
proposed law for the protection of non workmen. Another alternative is that the Government fix a cut-off limit of
remuneration, which is substantially high enough, in the present context, such as Rs. 25,000/- p.m. beyond which
employees will not be treated as ordinary ‘workmen’. It would be logical to keep all the supervisory personnel, irrespective
of their wage/salary, outside the rank of worker and keep them out of the purview of the labour laws meant for workers.
All such supervisory category of employees should be clubbed along with the category of persons who discharge
managerial and administrative functions. The Commission would also recommend that such a modifed definition of
worker could be adopted in all the labour laws. We expect managements to take care of the interests of supervisory staff as
they will now be part of the managerial fraternity.14

Retired Employees- Whether Workmen:

In Standard Chartered Bank, the union raised dispute against the denial of pensionary benefits to the employees, who
retired before November 1, 2001. Three questions came up for decision before the Calcutta High Court: (i) whether the
retired employees of the Bank would answer to the definition of ‘workman’ under s 2 (s) ; (ii) whether the union of retired
employees could raise an industrial dispute; and (iii) whether the union coud seek a direction to the Regional Labour
Commissioner (Central) to submit a failure report to the Central Government. Rejecting the contentions, the High Court
held that a retired employee is not a ‘workman’ within the meaning of ID Act, nor could he be a party to an industrial
dispute. By the same token, no direction would lie to the Regional Labour Commissioner (Central) to submit a failure

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report.15

Judicial Review

The question whether an employee is a workman or not cannot be properly adjudicated in writ proceedings under Art. 226
of the Constitution and the appropriate remedy is to raise an industrial dispute and have it referred for adjudication under s
10 of the Act,16 because it involves several disputed questions of fact which may be proved either by oral evidence or
documentary evidence and by evidence of conduct and circumstances and the ultimate decision will depend on careful
consideration of the whole of the evidence.17 The principle is that ‘where basic facts are disputed and complicated
questions of law and fact depending on evidence are involved, the writ court is not the proper forum for seeking relief.
Similarly, the question, whether an employee working in any particular capacity such as technical, managerial and
supervisory, is also a mixed question of fact and law, which cannot be satisfactorily decided on the basis of inconclusive
evidence adduced for the limited purpose of deciding the preliminary issue. It has to be decided after recording full
evidence, as the question would require overall consideration of all the aspects of the matter.18 Mere letter of appointment
of the employee is not sufficient evidence for deciding the question because in the course of his employment, his duty
might be altered by the employer so as to change the capacity in which he works. Hence, apart from the letter of
appointment, the subsequent events would be relevant evidence for determining the question. The tribunal will be in a
position to satisfactorily determine the question only after taking full evidence on the issues, including the preliminary
issue.

Protection of Managerial Personnel- Recommendations of NCL-II

The NCL-II observed that there was a need to provide a minimum level of protection to managerial and other (excluded)
employees too, against unfair dismissals or removals, which should be done through adjudication by a labour court or the
Labour Relations Commission or arbitration.19

84 Gammon India Ltd v Union of India (1974) 1 LLJ 489 [LNIND 1974 SC 109] (SC) : AIR 1974 SC 960 [LNIND 1974 SC 109]:
1974 Lab IC 707 : (1974) 1 SCC 596 [LNIND 1974 SC 109], per Ray CJI.
85 Vegolis Pvt Ltd v Workmen (1971) 2 LLJ 567 [LNIND 1971 SC 461], 574 (SC) : AIR 1972 SC 1942 [LNIND 1971 SC 461]:
(1971) 2 SCC 724 [LNIND 1971 SC 461] : [1972] 1 SCR 673 [LNIND 1971 SC 461], per Vaidialingam J.
86 Workmen of Food Corpn of India v Food Corpn of India (1985) 2 LLJ 4 [LNIND 1985 SC 71], 9 (SC) : AIR 1985 SC 670
[LNIND 1985 SC 71]: 1985 (1) SCALE 344 [LNIND 1985 SC 71] : (1985) 2 SCC 136 [LNIND 1985 SC 71], per Desai J.
87 Mathura Refinery Mazdoor Sangh v Indian Oil Corpn Ltd (1991) 2 SCC 176 [LNIND 1991 SC 92] (SC) : 1991 (1) SCALE 297.
88 Dena Nath v National Fertilizers Corpn (1992) 1 LLJ 289 [LNIND 1991 SC 617], 292 (SC) : AIR 1992 SC 457 [LNIND 1991 SC
617]: 1992 GLH (1) 144 : JT 1991 (4) SC 413 : 1992 Lab IC 75 : 1991 (2) SCALE 1081 : (1992) 1 SCC 695 [LNIND 1991 SC
617], per Yogeshwar Dayal J.
89 Gujarat Electricity Board v Hind Mazdoor Sabha (1995) 2 LLJ 790 [LNIND 1995 SC 638], 803, 815 (SC) : AIR 1995 SC 1893
[LNIND 1995 SC 638]: 1995 (3) SCALE 498 : (1995) 5 SCC 27 [LNIND 1995 SC 638], per Sawant J.
90 Air India Statutory Corpn v United Labour Union (1997) 1 LLJ 1113 [LNIND 1996 SC 2076] (SC) : AIR 1997 SC 645 [LNIND
1996 SC 2076]: 1996 (9) SCALE 70 [LNIND 1996 SC 2076] : (1997) 9 SCC 377 [LNIND 1996 SC 2076].
91 Ibid, pp 1146, 1148, per K Ramaswamy J.
92 Ibid, p 1154, per Majmudar J.
93 Ibid, pp 1149-50, per Ramaswamy J.
94 Ibid, p 1154, per Majmudar J.
95 Ibid, p 1149, per K Ramaswamy J and 1155, per Majmudar J.
96 Ibid, p 1146, per K Ramaswamy J.
97 Ibid, p 1149, K Ramaswamy J.
98 SAIL v National Union of Waterfront Workers (2001) 4 LLN 133 (SC) per Quadri J.
1 Government of India (2002), Report of NCL-II, chap 13, pp 47-48, para 6.109.

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2 Hansraj Gupta v Dehradun Mussoorie Electric Tramway Co Ltd AIR 1933 PC 63, 65, per Lord Russel of Killowen.
3 Seaford Court Estate Ltd v Asher [1949] 2 KB 481, 489, per Lord Denning LJ.
4 Magor & St Mellons RDC v New Port Corpn [1952] AC 189 191, per Lord Simonds J.
5 Lord Denning, Discipline of Law, 1939, p 13.
6 Cf, Indira-Nehru Gandhi v Raj Narain AIR 1975 SC 2299, 2435, per Beg J.
7 Ahmedabad Municipal Corpn v Virendra Kumar Jayantibhai Patel (1997) 2 LLJ 765 [LNIND 1997 SC 973], 768 (SC), per Khare
J.
8 SK Maini v Corona Sahu Co Ltd (1994) 2 LLJ 1153, 1158 (SC), per GN Ray J.
9 Burmah Shell OS & D Co of India Ltd v Burmah Shell Management Staff Assn (1970) 2 LLJ 590 [LNIND 1970 SC 452] (SC) : AIR
1971 SC 922 [LNIND 1970 SC 452]: (1970) 3 SCC 378 [LNIND 1970 SC 452], per Bhargava J.
10 Shalimar Paints Ltd v Third IT 1974 Lab IC 213, 216 (Cal) (DB), per BC Mitra J.
11 TP Srivastava v National Tobacco Co of India Ltd (1992) 1 LLJ 86 [LNIND 1991 SC 537]-87, per V Ramaswami J.
12 SK Verma v Mahesh Chandra 1983 Lab IC 1483 [LNIND 1983 SC 233], 1485 (SC), per Chinnappa Reddy J.
13 SG Pharmaceuticals v VD Padamwar 1990 Lab IC 24, 29 (Bom) (DB), per Deshpande J.
14 A Ram Mohan v Labour Court , Bangalore (1989) 2 LLJ 179 (Kant): 1989 (59) FLR 1, per Rama Jois J.
15 Promer Sales Pvt Ltd v Manohar Sondhur 1993 Lab IC 1762, 1766 (Bom), per Kantharia J.
16 A Sundrambal v Govt of Goa, Daman & Diu (1989) 1 LLJ 61 [LNIND 1988 SC 341], 65 (SC) : AIR 1988 SC 1700 [LNIND 1988
SC 341]: 1989 Lab IC 1317 : 1988 (2) SCALE 82 : (1988) 4 SCC 42 [LNIND 1988 SC 341], per Venkataramiah J.
17 SK Maini v Carona Sahu Co Ltd (1994) 2 LLJ 1153 (SC), per GN Ray J.
18 S.K. Maini v M/s. Carona Sahu Company Limited (1995) 1 LLJ 415 [LNIND 1994 SC 267] (SC) : AIR 1994 SC 1824 : (1994) 3
SCC 510 : [1994] 2 SCR 333.
19 A Kesava Bhatt v Sree Ram Ambalam Trust (1990) 1 LLJ 192 (Ker), per A Sukumaran J.
20 (1994) 2 LLJ 1153 (SC), per GN Ray J.
21 Enamelnagar Dev Corpn Ltd v Second IT 1986 Lab IC 1741, 1747 (Cal) (DB), per GN Ray J.
22 Arkal Govind Raj Rao v Ciba Geigy of India Ltd Bombay (1985) 2 LLJ 401 [LNIND 1985 SC 177], 405 (SC), per Desai J.
23 Hongkong and Shanghai Banking Corporation v Central Government Industrial Tribunal (2003) 2 LLJ 293 [LNIND 2002 CAL
145] (Cal .), per Chattopadhyay J
24 Guest Keen Williams Ltd v Asst Labour Commr, West Bengal 1986 Lab IC 1668 [LNIND 1986 CAL 232] (Cal) (DB), per GN Ray
J.
25 Sunita B Vatsaraj v Karnataka Bank Ltd (1999) 3 LLN 497 (Bom).
26 Arkal Govind Raj Rao v Ciba Geigy of India Ltd, Bombay (1985) 2 LLJ 401 [LNIND 1985 SC 177], 403 (SC), per Desai J.
27 Ananda Bazar Patrika Pvt Ltd v Workmen (1969) 2 LLJ 670 (SC) per Bhargava J. .
28 May & Baker (India) Ltd v Workmen (1961) 2 LLJ 94 [LNIND 1961 SC 18], 97 (SC), per Wanchoo J.
29 Burmah Shell OS&D Co of India Ltd v Burmah Shell Management Staff Assn (1970) 2 LLJ 590 [LNIND 1970 SC 452], 596 (BC) :
AIR 1971 SC 922 [LNIND 1970 SC 452]: [1971] (22) FLR 11 : (1970) 3 SCC 378 [LNIND 1970 SC 452] per Bhargava J.
30 May and Baker (India) Ltd v Workmen (1961) 2 LLJ 94 [LNIND 1961 SC 18], 97 (SC) per Wanchoo J.
31 Shalimar Paints Ltd v Third IT 1974 Lab IC 213, 217 (Cal) (DB), per BC Mitra J.
32 Mgmt of Bharat Kala Kendra Pvt Ltd v RK Baweja 1981 Lab IC 893 [LNIND 1980 DEL 273], 897-98 (Del) (DB), per
Ranganathan J.
33 Western India Match Co Ltd v Workmen (1963) 2 LLJ 459 [LNIND 1963 SC 142], 463 (SC), per KC Das Gupta J.
34 Ramendra Narayan Deb v Eighth IT 1975 Lab IC 94, 97-98 (Cal) (DB), per SK Datta J.
35 BLC Ltd v Ram Bahadur Jamadar (1957) 1 LLJ 422 -23 (LAT).
36 Burmah-Shell OS & D Co of India Ltd v Workmen (1955) 2 LLJ 153 (LAT).
37 Cawnpore Tannery v Workmen (1955) 2 LLJ 459 (LAT).
38 BIC Ltd v Ram Bahadar Jamadar (1957) 1 LLJ 422 (LAT).

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39 May and Baker (India) Ltd v Workmen (1961) 2 LLJ 94 [LNIND 1961 SC 18], 97 (SC), per Wanchoo J.
40 Bata India Ltd v BH Nathani 1978 Lab IC 386, 389 (Guj) (DB), per Obul Reddi CJ.
41 A Sundarambal v Govt of Goa, Daman & Diu (1983) 2 LLJ 491 [LNIND 1988 SC 341], 498 (Bom) (DB), per Jahagirdar J.
42 SA Phenany v J Walter Thompson Co (Eastern) Ltd 9 FJR 324 (LAT).
43 Chintaman Martand Salvekar v Phaltan Sugar Works Ltd (1954) 1 LLJ 499 (LAT).
44 Lakshmi Devi Sugar Mills Ltd v State of UP (1955) 2 LLJ 1 [LNIND 1955 ALL 82] (All) (DB), per Dayal J.
45 CA Ribeiro v Directorate of Health Services, Govt of Goa (1999) 3 LLN 517 (Bom) (DB), per Batta J.
46 All India OBE Union v IT (2001) 1 LLN 930 (Mad), per Kalifulla J.
47 A Sundarambal v Govt of Goa, Daman & Diu (1983) 2 LLJ 491 [LNIND 1988 SC 341], 498 (Bom) (DB) per Jahagirdar J.
48 Bombay Dyeing and Mfg Co Ltd v RA Bidoo (1990) 1 LLJ 98 [LNIND 1989 BOM 210], 101-02 (Bom) (DB) : 1989 (2) Bom CR
367 [LNIND 1989 BOM 210] : 1989 (91) Bom LR 219, per Jahagirdar J.
49 Uttar Pradesh State Sugar Corpn Ltd v Deputy Labour Commy, 1990 Lab IC 645 (All), per BN Misra J.
50 Sudhirkumar v Ferro Alloys Corpn Ltd 1992 Lab IC 657 (Bom), per Quazi J.
51 Shrikant Vishnu Palwankar v PO, First LC 1992 Lab IC 722, 726 (Bom), per Srikrishna J.
52 Burmah Shell OS & D Co of India Ltd v Burmah Shell MS Assn (1970) 2 LLJ 590 [LNIND 1970 SC 452] (SC), per Bhargava J.
53 A Sundarambal v Govt of Goa, Daman & Diu (1989) 1 LLJ 61 [LNIND 1988 SC 341], 63 (SC), per Venkataramiah J.
54 Bharat Bhawan Trust v BBA Association (2002) 1 LLN 54 (57) (SC), per Rajendra Babu J.
55 Workmen of Dimakuchi Tea Estate v Dimakuchi Tea Estate (1958) 1 LLJ 500 [LNIND 1958 SC 1] (SC) : AIR 1958 SC 353
[LNIND 1958 SC 1], per SK Das J.
56 Bengal United Tea Co Ltd v Ram Labhaya (1962) 2 LLJ 37 (Assam) (DB), per Mehrotra J.
57 Burmah Shell OS & D Co of India Ltd v Burmah Shell MS Assn (1970) 2 LLJ 590 [LNIND 1970 SC 452] (SC), per Bhargava J.
58 Pabbojan Tea Co Ltd v LC 1977 Lab IC 721, 730 (Gau) (DB), per Sarma J.
59 Marshal Braganza v SR Samant (1975) 2 LLJ 189 (Bom), per RL Aggarwal J.
60 Mathur Aviation v Lieutenant Governor; Delhi (1977) 2 LLJ 255, 261-62 (Del), per Dalip Kapur J.
61 MM Wadia Charitable Hospital v Dr Uina Kanat Ramchandra Warerkar (1997) 2 LLJ 549 (Bom .)
62 Ashok Leyumd Ltd v A Vijayakumar (1981) 2 LLJ 9 (Mad), per Mohan J.
63 Mahajan Borewell Co v Rajaram Bhatt (1998) 3 LLN 253 (Kant) (DB), per Sethi CJ.
64 Choithram HR Centre v Capt DK Shukla (1998) 3 LLN 453 (MP), per Tiwari J.
65 Mgmt of HEC Ltd v PO, LC 1998 (3) LLN 902 (SC), per Kirpal J.
66 Maheshwar Singh v Indomag Steel Technology Ltd (2010) 4 LLJ 51 (Del .): 170 (2010) DLT 682 [LNIND 2010 DEL 122] : [2010
(126) FLR 426 ], per Gambhir J.
67 Brought into force wef 21 August 1984.
68 Black’s Law Dictionary, 1968, revised 4th ed, p 1240.
69 Shorter Oxford English Dictionary, p 1452.
70 Websters 3rd New International Dictionary, p 1581.
71 Toshniwal Bros Pvt Ltd v Delhi Administration (1976) ILR 2 (Del) 548, per HL Anand J.
72 Workmen of Macfarlane & Co Ltd v Fifth IT (1964) 2 LLJ 556, 558 (Cal) per BN Bannerjee J.
73 Burmah Shell OS & D Co of India Ltd v Workmen (1955) 2 LLJ 228 (LAT).
74 Mysore Vegetable Oil Products Ltd v LC (1961) 2 LLJ 508, 510 (Mad), per Balakrishna Ayyar J.
75 Sundarambal v Government of Goa, Daman and Diu (1989) 1 LLJ 61 [LNIND 1988 SC 341], 63 (SC), per Venkatramiah J.
76 Upper Jumna Valley Electricity Supply Co, Ltd v Workmen (1955) 2 LLJ 50 (LAT).
77 Madikal Service Co-op Bank Ltd v Labour Court (1988) 2 LLJ 49, 53 (Ker), per Bhat J.
78 Darshan Lal v Director, State Transport (1998) 1 LLN 665 (P & H), per Chalapathi J.

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79 IFFCO Ltd v PO, LC (1998) 4 LLN 442 (P&H), per Sat Pal J.
80 Shaw Wallace and Co Ltd v NR Trivedi (1999) 1 LLN 319 (Guj), per Pandit J.
81 Aloysius Nunes v Thomas Cook India Ltd (2000) 3 LLN 160 (Bom), per Rebello J.
82 Sanjeev Kumar Gupta v PO, LC, (2001) 1 LLN 447 (P&H) (DB), per Sudhalkar J.
83 Mysore Vegetable Oil Products Ltd v LC (1961) 2 LLJ 508, 510 (Mad), per Balakrishna Ayyar J.
84 Punjab National Bank Ltd v Certain Workmen (1953) 1 LLJ 368 (LAT).
85 Janardana Mills Ltd v Certain Workmen (1953) 1 LLJ 344 (LAT).
86 Burmah Shell OS & D Co of India Ltd v LAT (1954) 2 LLJ 155 (Mad), per Rajagopala Ayyangar J.
87 East Asiatic Co Staff Union v East Asiatic Co (India) Ltd (1954) 2 LLJ 730 (LAT).
88 Janardana Mills Ltd v Certain Workmen (1953) 1 LLJ 344 (LAT).
89 Kilburn and Co Ltd v Dibendra Chandra Dey [1956) LAC 393.
90 Mitra Prakasan Ltd v Bramha Dutta Vidyarthi 10 FJR 505 (LAT).
91 Madan Gopal v Hindustan Commercial Bank Ltd (1956) 1 LLJ 414 (LAT).
1 Burmah-Shell OS & D Co of India Ltd v Employees (1954) 1 LLJ 21 (LAT).
2 East India Industries (Madras) Ltd v IT (1954) 2 LLJ 418 (Mad), per Rajagopala Ayyangar J.
3 Manoranjan Pictures Corpn Ltd v Rawait Singh (1957) 2 LLJ 102 (LAT).
4 Mawana Sugar Work Ltd v Workmen (1955) 2 LLJ 462 (LAT).
5 Radio Television v KK Sharma (1962) 2 LLJ 722 (Punj), per Shamsher Bahadur J.
6 Chintaman Martand Salvekar v Phaltan Sugar Works Ltd (1954) 1 LLJ 499 (LAT).
7 Lakshmi Devi Sugar Mills Ltd v State of UP (1955) 2 LLJ I (AlI) (DB), per Dayal J.
8 Mitra Prakashan Ltd v Brahma Dutta Vidyarthi 10 FJR 505 (LAT).
9 S Balakrishna v Merz and Mclellan (India) 2 FJR 397 (LAT).
10 Cawnpore Tannery Ltd v Workmen (1955) 2 LLJ 459 (LAT).
11 Certain Workmen of the BIET (I) Ltd v British Institute of Engg Technology (India) (1953) 1 LLJ 592 (LAT).
12 A Sundarambal v Government of Goa, Daman and Diu (1989) 1 LLJ 61 [LNIND 1988 SC 341], 65 (SC), per Venkataramiah J.
13 Workmen of Nilgiri Coop Mktg. Society Ltd v State of Tamil Nadu AIR 2004 SC 1639 [LNIND 2004 SC 156]:: (2004) 3 SCC 514
[LNIND 2004 SC 156] : (2004) 2 LLJ 253 [LNIND 2004 SC 156] : 2004 LIC 905, per Sinha J.
14 Darshan Lal v Director, State Transport (1998) 1 LLN 665 (P & H), per Chalapathi J.
15 Mgmt of Sonepat Coop Sugar Mills Ltd v Ajit Singh AIR 2005 SC 1050 [LNIND 2005 SC 142]: (2005) 3 SCC 232 [LNIND 2005
SC 142] per Sinha J.
16 Muir Mills Union of NTC Ltd v Swayam Prakash Srivastava AIR 2007 SC 519 [LNIND 2006 SC 1070]: (2007) 1 SCC 491
[LNIND 2006 SC 1070] : (2007) 1 LLJ 801 [LNIND 2006 SC 1070] : 2007 LIC 978, per Lakshmanan J.
17 C Gupta v Glaxo Smithklin Pharmaceuticals Ltd AIR 2007 SC (Supp.) 1244, per Pasayat J.
18 Arkal Govind Raj Rao v Ciba Geigy of India Ltd, Bombay (1985) 2 LLJ 401 [LNIND 1985 SC 177], 404 (SC) : AIR 1985 SC 985
[LNIND 1985 SC 177]: 1985 Lab IC 1008 [LNIND 1985 SC 177] : 1985 (1) SCALE 927 [LNIND 1985 SC 177] : (1985) 3 SCC
371 [LNIND 1985 SC 177], per Desai J.
19 All India Reserve Bank Employees’ Assn v RBI (1965) 2 LLJ 175 [LNIND 1965 SC 146], 188 (SC), per Hidayatullah J.
20 Bombay Dyeing & Mfg Co Ltd v RA Biddoo (1990) 1 LLJ 98 [LNIND 1989 BOM 210], 101-02 (Bom) (DB), per Jahagirdar J.
21 Titaghur Paper Mills Co Ltd v First IT 1982 Lab IC 307, 316 (Cal), per GN Ray J.
22 Bipin Bihari Sinha v Union of India 1983 Lab IC (NOC) 74 (Pat) (DB).
23 Titaghur Paper Mills Co Ltd v 1st IT 1982 Lab IC 307,316 (Cal), per GN Ray J.
24 Bipin Bihari Sinha v Union of India 1983 Lab IC (NOC) 74 (Pat) (DB).
25 Titaghur Paper Mills Co Ltd v Ist IT 1982 Lab IC 307, 316 (Cal), per GN Ray J.
26 Blue Star Ltd v NR Sharma (1975) 2 LLJ 300, 304 (Del), per Deshpande J.

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27 Mcleod & Co v Sixth IT AIR 1958 Cal 273 [LNIND 1958 CAL 37], 280, per PB Mukharji J.
28 GM Pillai v AP Lakhanikar (1998) 2 LLN 690 (Bom), per Lodha J.
29 Lloyds Bank Ltd v Panna Lal Gupta (1961) 2 LLJ 18, 24 (SC), per Gajendragadkar J.
30 SB Kulkarni v Indian Red Cross Society (1988) 1 LLJ 411 -12 (Bom) (DB), per Sawant J.
31 Mathur Aviation v Lieutenant Governor, Delhi (1977) 2 LLJ 255, 261-62 (Del), per Dalip Kapur J.
32 Ananda Bazar Patrika Pvt Ltd v Workmen (1969) 2 LLJ 670 -72 (SC), per Bhargava J.
33 Punjab National Bank Ltd v Workmen (1961) 2 LLJ 162, 164 (SC), per Gajendragadkar J.
34 South India Bank Ltd v AR Chacko (1964) 1 LLJ 19 [LNIND 1963 SC 277], 23 (SC) : AIR 1964 SC 1522 [LNIND 1963 SC 277],
per Das Gupta J.
35 Ananda Bazar Patrika Pvt Ltd v Workmen (1969) 2 LLJ 670 -71 (SC) : (1970) 3 SCC 248 [LNIND 1969 SC 507], per Bhargava J.
36 State Bank of Hyderabad v Vasudev Anant Bhide (1969) 2 LLJ 713 [LNIND 1969 SC 181], 727 (SC), per Vaidialingam J
37 Digvijay Cement Co Ltd v Chandvani Jamnadas S (1999) 2 LLJ 1085 (Guj), per Balia J.
38 Ganesh Prasad Pandey v KW Thakre (1999) 1 LLN 918 (929) (Bom), per Lodha J.
39 Union Carbide (India) Ltd v D Samuel (1999) 2 LLN 165 (Bom), per Rebello J.
40 GM, Kores (India) Ltd v PO, LC (1999) 3 LLN 1121 (Ori) (DB), per Dash J.
41 Hindustan Motors Ltd v Fourth IT 1980 Lab IC 267, 269 (Cal) (DB), per MM Dutt J.
42 Titaghur Paper Mills Co Ltd v First IT 1982 Lab IC 307, 316 (Cal), per GN Ray J.
43 Mohd Ismail v Government of Andhra Pradesh 1991 Lab IC 772,777 (AP), per Sarma J.
44 Bata Shoe Co Ltd v Ali Hassan (IT) (1956) 1 LLJ 278 (Pat) (DB), per Ramaswami J.
45 R Jagannadham v State of Andhra Pradesh (1958) 1 LLJ 202 (AP), per Chandra Reddi J.
46 East Asiatic Co Ltd v JE Morris (1955) 1 LLJ 418 (LAT).
47 Upper Jumuna Valley Electricity Supply Co Ltd v Workmen (1955) 2 LLJ 50 (LAT).
48 Cawnpore Tannery Ltd v Workmen (1955) 2 LLJ 459 (LAT).
49 Nellimarla Jute Mills Co Ltd v Staff Union (1955) 1 LLJ 167 (LAT).
50 Burmah Shell OS&D Co of India Ltd v Workmen (1955) 2 LLJ 153, 228 (LAT).
51 Pabbojan Tea Co Ltd v LC 1977 Lab I C 721, 730 (Gau) (DB), per Sarma J.
52 Bipin Bihari Sinha v Union of India 1983 Lab IC (NOC) 74 (Pat) (DB).
53 Mgmt of Madura Coats Pvt Ltd, v Presiding Officer, Labour Court (2011) 3 LLJ 183 (Mad .): [2011(128)FLR1040]: 2011 LLR
486, per Chandru J.
54 Lloyds Bank Ltd v Pannal Lal Gupta (1961) 1 LLJ 18 [LNIND 1960 SC 279] (SC), per Gajendragadkar J.
55 Punjab National Bank Ltd v Workmen (1961) 2 LLJ 162 (SC), per Gajendragadkar J.
56 Burmah Shell OS & D Co of India Ltd v Burmah Shell MS Assn (1970) 2 LLJ 590 [LNIND 1970 SC 452] (SC), per Bhargava J.
57 Blue Star Ltd v NR Sharma (1975) 2 LLJ 300 (Del), per Deshpande J.
58 GL Pahwa v New India Assurance Co Ltd (2000) 3 LLN 963 (Del), per Sikri J.
59 Workmen of Macfarlane and Co v Fifth IT (1964) 2 LLJ 556, 558 (Cal), per BN Banerjee J.
60 Lloyds Bank Ltd v Panna Lal Gupta (1961) 1 LLJ 18 [LNIND 1960 SC 279], 24 (SC), per Gajendragadkar J.
61 HR Adyanthaya v Sandoz (India) Ltd, AIR 1994 SC 2608 [LNIND 1994 SC 715]: (1994) 5 SCC 737 [LNIND 1994 SC 715], per
Sawant J.
62 Mukesh K Tripathi v LIC of India AIR 2004 SC 4179 (4184, 86) : (2004) 8 SCC 387 : (2004) 3 LLJ 740 : 2004 LIC 3688 per Sinha
J.
63 Twenty First Century Printers Ltd v KP Abraham (2009) 2 LLJ 378 [LNIND 2008 BOM 759] (Bom) : [2008 (119) FLR 883 ], per
Bobde J.
64 Vijay D Kale v Pieco Electronics & Electricals Ltd (2009) 3 LLJ 262 [LNIND 2009 BOM 90] (Bom) : 2009 (2) Mh Lj 628, per
Bobde J.
65 Kirloskar Electric Co Ltd v Government of NCT, Delhi (2010) 2 LLJ 701 (Del), per Agarwal J.

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66 Standard Chartered Bank v Vandana Joshi (2010) 2 LLJ 409 [LNIND 2009 BOM 1122] (Bom) : 2010 (112) Bom LR 69 : [2010
(124) FLR 960 ], per Chandrachud J.
67 Vandana Joshi v Standard Chartered Bank (2011) 2 LLJ 261 (Bom) (DB : 2010 (112) Bom LR 4514 ), per More J.
68 Mgmt, Multan SSC Eye Hospital v PO, LC (2012) 3 LLJ 479 (Del) : 187 (2012) DLT 756, per Khanna J.
69 Union of India v Central Government IT 1986 Lab IC 1269, 1274 (Cal), per UC Banerjee J.
70 Hussain M Mhasvadkar v BISLB (2001) 4 LLN 766, 770 (SC), per Doraiswamy Raju J.
71 Burmah Shell OS & D Co of India Ltd v Burmah Shell MS Assn (1970) 2 LLJ 590 [LNIND 1970 SC 452] (SC), per Bhargava J.
72 Standard Vaccum Oil Co v Commr of Labour (1959) 2 LLJ 771 [LNIND 1959 MAD 98], 777 (Mad), per Balakrishna Ayyar J.
73 Aparna Kumar Dhargupta v United Industrial Bank India Ltd 1979 Lab IC 506, 509 (Cal), per Bannerjea J.
74 Mathur Aviation v Lieutenant Governor, Delhi (1977) 2 LLJ 255, 262 (Del), per Dalip Kapur J.
75 Ananda Bazar Patrika Pvt Ltd v Workmen (1969) 2 LLJ 670 -72 (SC), per Bhargava J.
76 Syndicate Bank Ltd v Workmen (1966) 2 LLJ 194 [LNIND 1965 SC 321], 199 (SC), per Wanchoo J.
77 Michael Villavarayar v His Workmen (1963) 2 LLJ 203 [LNIND 1963 MAD 13], 207 (Mad) (DB), per Anantanarayan J.
78 Gouri Charan Kanungo v PO, IT 1977 Lab IC 1154, 1157 (Ori) (DB), per Acharya J.
79 Ved Prakash Gupta v Delton Cable India Pvt Ltd 1984 Lab IC 658 [LNIND 1984 SC 380], 662 (SC), per Varadarajan J.
80 RG Makwana v Gujarat State Road Transport Corpn (1987) 1 LLJ 172, 174 (Guj), per Gokulakrishnan CJ.
81 Central Bank of India v ACL (2000) 1 LLJ 167 [LNIND 1999 ALL 245] (All), per Seth J.
82 R Devanath v PO, LC (2000) 4 LLN 234 (Mad), per Venkatachalam J.
83 Mgmt of Chem Crown (India) Ltd v PO, Addl LC (2000) 2 LLJ 410 [LNIND 2000 MAD 256] (Mad), per Venkatachalm J.
84 LIC of India v IT, (2002) 1 LLN 305 (Ker), per Hairharan Nair J.
85 Shaw Wallace & Co Ltd v PO, Second Addl IT (2002) 1 LLN 317 (Mad), per Murugesan J.
86 Rajamma VK v LC (2003) 4 LLJ 740 (Ker), per Nair J.
87 Varadachari R v Mgmt of PTI (2003) 2 LLJ 420 (Mad), per Padmanabhan J.
88 MR Damon (Ms) v MM Raja Dass (2003) 2 LLJ 730 (Mad) : 2003 (2) CTC 161 [LNIND 2003 MAD 426], per Govindarajan J.
89 Manoranjan Chakrabortty v State of West Bengal (2003) 4 LLJ 876 (Cal), per Ray J.
90 Gujarat Industrial Coop Bank Ltd v Jobanputra (2005) 4 LLJ 153 (Guj), per HK Rathod J.
91 Burmah Shell OS & D Co of India Ltd v Burmah Shell MS Assn (1970) 2 LLJ 590 [LNIND 1970 SC 452] (SC), per Bhargava J.
92 Vinry Kumar Majoo v State of Rajasthan (1968) 2 LLJ 398, 401 (Raj), per Kan Singh J.
93 Toshniwal Bros Pvt Ltd v Delhi Administration (1976) ILR 2 (Del) 548, per HL Anand J.
94 Shrikant Vishnu Palwankar v PO, First LC 1992 Lab IC 722, 725 (Bom), per Srikrishna J.
95 Ananda Bazar Patrika v Workmen (1969) 2 LLJ 670 -71 (SC) : (1970) 3 SCC 248 [LNIND 1969 SC 507], per Bhargava J.
96 Shrikant Vishnu Palwankar v PO, First LC (1992) 2 LLJ 378 [LNIND 1991 BOM 553], 382 (Bom), per Srikrishna J.
97 Somnath T Galande v PO, LC (2008) 2 LLJ 767 [LNIND 2008 BOM 124] (Bom) : 2008 (2) ALL MR 628: 2008 (5) Bom CR 865
[LNIND 2008 BOM 124], per Swatantra Kumar J.
98 Packard Motor Car Co v National Labour Relations Board 91 L Ed 1040.
1 All India Reserve Bank Employees’ Assn v RBI (1965) 2 LLJ 175 [LNIND 1965 SC 146], 186-87 (SC) : AIR 1966 SC 305
[LNIND 1965 SC 146]: [1966] 36 Comp Cas 165 (SC), per Hidayatullah J.
2 Kerala State Electricity Workers Federation v Kerala SEB (1983) 2 LLJ 30, 32 (Ker), per Narendran J.
3 Bipill Bihari Sinha v Union of India 1983 Lab IC (NOC) 74 (Pat) (DB).
4 Balbir Singh v State of Haryana 1983 Lab IC 996 -97 (P&H), per Tewatia J.
5 Syndicate Bank Ltd v Workmen (1966) 2 LLJ 194 [LNIND 1965 SC 321], 199 (SC), per Wanchoo J.
6 Re Shree Madhav Mills Ltd (1966) 2 LLJ 827, 831 (Bom), per KK Desai J.
7 Saroj Ramesh Shah v Balakriskna Pen Pvt Ltd (1995) 1 LLJ 176 [LNIND 1994 BOM 338], 179 (Bom), per Kapadia J.

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8 Pushpa Gupta v Chmn & MD, Engineers India Ltd (1995) 1 LLJ 1023 [LNIND 1994 DEL 814], 1029 (Del), per KS Bhat J.
9 Ardeshir DM Hospital v State of Bihar (2000) 3 LLN 1060 (Pat), per Eqbal J.
10 Orissa SRTCEAU v Orissa SRTC (2001) 2 LLN 520 (Ori), per Mohapatra J.
11 Manganese Ore (India) Ltd v Union of India (2001) 4 LLN 249 (Bom), per Gundewar J.
12 Assembly of God Hospital & Research Centre v First IT (2002) 4 LLN 721 (Cal), per Seth J.
13 Rajasthan Medical and Sales Representatives Union v IRI (P) Ltd (2001) 1 432 (Raj) (DB).
14 Government of India (2002) Report of the NCL-II, Chap 13 p 37, para 6.19 & 6.20.
15 Standard Chartered Grindlays Bank REA v Union of India, (2007) 2 LLJ 887 [LNIND 2007 CAL 19] (Cal).
16 SL Soni v Rajasthan State Mineral Development Corporation Ltd 1986 Lab IC 468, 472 (Raj), per SC Agrawal J.
17 Dunlop (India) Ltd v Delhi Administration 1973 Lab IC 640 (Del) (DB), per Hardy J.
18 Kesoram Ind & Cotton Mills Ltd v Third IT 1987 Lab IC 769 -71 (Cal) (DB), per Susanta Chatterjee J.
19 Government of India (2002), Report of NCL-II, p 37, para 6.22.

End of Document

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O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER II Authorities under the Act

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER II Authorities under the Act

S. 3. Works Committee.—

(1) In the case of any individual establishment in which one hundred or more workmen are employed or have been
employed on any day in the preceding twelve months, the appropriate government may by general or special
order require the employer to constitute in the prescribed manner a Works Committee consisting of
representatives of employers and workmen engaged in the establishment, so however, that the number of
representatives of workmen on the Committee shall not be less than the number of representatives of the
employer. The representatives of the workmen shall be chosen in the prescribed manner from among the
workmen engaged in the establishment and in consultation with their trade union, if any, registered under the
Indian Trade Unions Act 1926 (16 of 1926).
(2) It shall be the duty of Works Committee to promote measures for securing and preserving amity and good
relations between the employer and workmen and, to that end, to comment upon matters of their common interest
or concern and endeavour to compose any material difference of opinion in respect of such matters.

LEGISLATIVE HISTORY

The provision for the Constitution of a works committee was, for the first time, made in the original Industrial Disputes
Act of 1947. It has not undergone any amendment so far. These committees are analogous to the ‘joint production
committees’ in the United States, Russia, and Britain.1 The legislatures of certain states, who have enacted their own Acts
for the investigation and settlement of industrial disputes, have also made provision for such committees. The Central
Provinces and Berar Industrial Disputes Settlement Act 1947, by s 21 provided for the Constitution of a works
committee.2Likewise, s 36 of the Madhya Pradesh Industrial Relations Act 1960 and s 48 of the Bombay Industrial
Relations Act 1946 also provide for the Constitution of joint committees.

OBJECTS AND PURPOSES OF THE WORKS COMMITTEE

The Act postulates the investigation and settlement of an ‘industrial dispute’ through a three-fold process, ie:

(i) voluntary negotiation;

(ii) mediation or conciliation; and
(iii) arbitration or adjudication.

The institution of a works committee is the first step in the process of investigation and settlement of industrial disputes by
the direct method of negotiations between the representatives of employers and the representatives of workmen engaged in
an industrial establishment. The Royal Commission on Labour had suggested that works committees should be formed for
establishing close contacts and cordial relations between managements and employees. Power, therefore, has been given to
the appropriate government to require works committees to be constituted in every industrial establishment employing one
hundred workmen or more, and their duties are to remove causes of friction between employers and workmen in the day to
day working of the establishment and to promote measures for securing amity and good relations between them. Industrial
peace will be most enduring where it is founded on voluntary settlement. A works committee, therefore, is created with a
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

view to rendering recourse to the remaining machinery, provided in the Act for the settlement of disputes.3A works
committee, constituted under s 3 is one of the authorities under the Act. The intention of the legislature in creating a works
committee and dubbing it as an authority under the Act is to secure industrial harmony between those who are connected
with the working in the establishment concerned and to see that good and amicable relationship is prevalent between the
employers and the workmen. Further, the object in the formation of a works committee is the promotion of amity and good
relations between the employer and the workmen and to place all the matters before the said authority so that any
difference between the employer and the workmen in the matters concerning the industry should be composed and settled.
This, being the laudable object with which the works committee has been created by the Act as a statutory functionary, it is
essential that the authorities who undertake the formation of such a works committee should see that the committee is
really a works committee as contemplated by the Act and not a committee to subserve certain exclusive sectional interests.4

It has been provided that the works committee shall consist of at least equal number of representatives of workmen and
representatives of the employer on the committee, with a view to ensure a democratic setup. Furthermore, it has been
provided that the representatives of workmen shall be chosen in the prescribed manner from among the workmen engaged
in the establishment. Part 7 (rr 38 to 57) of the Industrial Disputes (Central) Rules 1957, has made elaborate provisions for
the Constitution of works committees, election of representatives of workmen, their term of office, dissolution of such
committees, etc. In case, there is a registered trade union operating in the industrial establishment, in addition to
compliance with the requirements of rr 38 to 57, representatives of the workmen shall have to be chosen in consultation
with the trade union. The relevant rules of Industrial Disputes (Central) Rules 1957 are rr 38 to 43. Evidently, these rules
do not contemplate nomination of representatives of workmen in any situation and circumstance whatsoever. Rule 38
requires an employer, to whom an order made under s 3(1) of the Act relates, to constitute a works committee in the
prescribed manner. Rule 39 contemplates that the total members constituting a works committee shall not exceed 20 and
further that the number of representatives of the workmen shall not be less than the representatives of the employer. This
rule does not require that the number of the representatives of the employer and the representatives of workmen shall be
equal. The true legal position appears to be that, their respective number may or may not be equal. But if it is unequal, the
rule steps in and says that the number of representatives of the employer shall not be less than the number of
representatives of the workmen which may either be equal or more than the representatives of the employer. In any case,
the number of representatives of the workmen shall not be less than the number of representatives of the employer.
Nomination of the representatives of the employer is no doubt contemplated by r 40. In fact, that is the only mode in which
representatives of the employer may be brought on the works committee. Equally clear is the fact that the representatives
of the workmen are to be always elected. The manner of this election may vary but there has to be an election. Rule 41
empowers an employee to ask for certain information whether any workmen of an establishment or numbers of a registered
trade union and where he has a reason to believe that the information furnished to him by any trade union is false, he may,
after informing the union, refer the matter to the assistant labour commissioner whose decision will be final.

The scheme of the rules for Constitution of works committees provides: Where there is a registered trade union having
more than fifty per cent membership of the workers of the establishment, the total number of members of the works
committee will be elected without distribution of any constituency; and if in an industry, no trade union registered under
the Trade Unions Act represents more than fifty per cent of the members, then only, the election will be held in two
constituencies; one from the members of the registered trade union or unions and the other from non-members of the trade
unions. Only in the latter contingency, discretion is given to the employer to further sub-divide the constituency into
department, section or shed. From this, it is evident that there may be a situation in a particular establishment where some
sections may have no membership of any trade union at all, whereas in other sections, there may be membership of trade
unions. In such a situation, under r 42 of the Central Rules, it has to divide into two constituencies, ie, members of the
registered trade union and non-members. There may be further sub-division in order to provide for representation to any
section of the workmen who have no representation in any trade union at all. Where there is a registered trade union in an
establishment having more than fifty per cent membership, r 43 will not be attracted. If r 42 does not apply, there is no
occasion for r 43 or the proviso therein to come into operation because the latter is not an independent substantive
provision.5Rule 42 contemplates that the representatives of the workmen are to be elected in two groups but if in an
establishment the majority of the workers are in one union, then no division in two groups is necessary. In that situation,
the representatives of the workmen will be elected in a single group without any kind of division. There is no provision in
the rules to the effect that if the union has majority of the workers as its members, then nomination of the representatives
of the workmen may be done by the employer in consultation with the trade union. However, such works committees can
only be required by the appropriate government to be constituted only in industrial establishments wherein one hundred or
more workmen are employed or have been employed on any day during the twelve months preceding the day of the order
of the government under s 3 and r 38. In this section, the expression ‘industrial establishment’ has to be understood as
having the same meaning as the term ‘industry’ in s 2(j) of the Act. The order of the government be general or special, ie,
the order may be addressed to employers in general in a particular area or in a particular industry employing one hundred
or more workmen, or the order, may be addressed to a particular employer who employs one hundred or more person. It is

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not obligatory on the ‘appropriate government’ to require the Constitution of a works committee.

SUB-SECTION (1): CONSTITUTION OF WORKS COMMITTEE

Sub-section (1) lays down that in the case of any industrial establishment in which one hundred or more workmen are
employed or have been employed on any day in the preceding twelve months, the appropriate government may, by general
or special order, require the employer to constitute in the prescribed manner a works committee of representatives of
employers and workmen engaged in the establishment, so however that the number of representatives of the workmen on
the committee shall not be less than the number of representatives of the employer.6 Once an order, under sub-s (1) of s 3,
is made in respect of an industrial establishment, it is obligatory on the employer to comply with the requirements of the
order by constituting a works committee. But before a valid order under s 3(1) is made, the following conditions must
exist:

(i) The establishment, with respect to which the order is made, must be an ‘industrial establishment’, ie, the
requirement of section 2(j) must be satisfied.
(ii) There should be 100 or more workmen employed in such establishment on the day of the order or on any day
during the twelve months preceding the day of the order.
(iii) Such workmen should be the workmen within the meaning of section 2(s) in relation to the employer on whom
the order is made under section 3(1).
(iv) The government making the order should be the ‘appropriate government’.

Rule 41 of the ID (Central) Rules 1957 prescribes the method of consultation with the trade unions as required by this
provision but even if in some state Rules there is no such provision, the requirement of the section of consultation with the
trade unions cannot be dispensed with. The Orissa High Court in Prafulla Mohan Das, held that though the Orissa
Industrial Disputes Rules 1959 have not prescribed any manner of consultation with the trade union, the consultation as
envisaged by s 3 of the Act, cannot be dispensed with. Therefore, the election held for electing works committee members
without consultation with the trade union, is liable to be set aside.7

SUB-SECTION (2): FUNCTIONS AND DUTIES OF WORKS COMMITTEE

Sub-section (2) mandatorily enjoins on the works committee to promote measures for securing and preserving amity and
good relations as between the employer and the workmen and, to that end, to comment upon matters of their common
interest or concern and endeavour to compose any material difference of opinion in respect of such matters.8 The powers of
the works committee in regard to the range of subjects it can discuss, are very wide. There is no subject concerning the
relations of employers and employees which the Works Committee is precluded from considering.9 But the scope of the
duties is confined to two things only, ie:

(i) to comment upon matters of common interest between employers and workmen, with a view to promote
measures for securing and preserving amity and good relations between them; and
(ii) to endeavour to compose any material difference of opinion in respect of such matters of common interest or
concern.

The expression ‘comment’ in its dictionary meaning means ‘a note in explanation; criticism or illustration of something
written or said; annotation; a remark as an observation or criticism’. The expression ‘endeavour’ means ‘to try; exert effort;
make an earnest attempt; strive’. The duty and authority of the works committee, therefore, cannot extend to anything
more than making comments upon matters of common interest or concern and to endeavour to compose any material
difference of opinion in respect of such matters. Neither ‘comment’ nor ‘endeavour’ could be held to extend to decide the
question, on which differences have arisen or are likely to arise, one way or the other. Regarding the nature and functions
of the works committee, Das Gupta J observed:

The language used by the legislature makes it clear that the works committees were not intended to supplant or supersede the
unions for the purpose of collective bargaining; they are not authorised to consider real or substantial changes in the conditions of
service; their task is only to smooth away frictions that might arise between the workmen and the management in day to day work.
By no stretch of imagination can it be said that the duties and functions of the works committee included the decision on such an
important matter as the alteration in the conditions of service by rationalisation. ... The fact that the workmen’s representatives on
the committee agreed to a certain decision, would be no way binding on the workmen or their union. The works committee cannot
consider important matters like rationalisation scheme,10

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The works committees are normally concerned with the problems arising in the day to day working of the concern and the
functions of the works committees are to ascertain the grievances of employees, and when the occasion arises to arrive at
some agreement also. But the function and responsibility of the works committees, as their very nomenclature indicates,
cannot go beyond recommendation, hence they are more or less bodies who, in the first instance, endeavour to compose
differences and final decision rests with the parties as a whole. The comments of the works committee, though carry great
weight, yet are not conclusive or binding in nature,11 on the subject of ‘employment’ or ‘non-employment’ which would
include the case of dismissal’,12 or the re-employment of a ‘retrenched workman’,13 or questions involving pay scales or
dearness allowance, etc.14

FUNCTIONING OF WORKS COMMITTEE IN THE INDUSTRY

In certain cases, works committees have functioned quite successfully to the mutual advantage of workmen and their
employers in avoiding serious and difficult situations like litigation, strikes and lockouts, etc. Some of the factors that have
generally contributed to the success of works committees are:

(a) existence of cooperation and cordial relations between workers and the management and also trade union;
(b) sympathetic attitude by management, especially in encouraging workers to put forward their grievances and suggestions;

(c) foresight of managements in having prior consultation with the works committees before bringing any changes in respect
of welfare measures, service conditions, etc;
(d) higher education standards amongst workers; and

(e) framing of model Constitution and bye-laws for the works committees.

On the other hand, there have been formidable difficulties in the smooth functioning of the works committees some of
which are:

(a) lack of appreciation on the part of the management and the workmen’s representatives of the functions and significance
of the committees;
(b) illiteracy and lack of understanding amongst the workers, especially those employed in backward areas;

(c) disinclination of workers’ representatives on the works committee to participate in the deliberations of the committee;

(d) too high an expectation by workers from their representatives who, being unable to satisfy the high expectations, become
unpopular and are disinclined to serve on the committees; and
(e) lack of cooperation of the trade union leaders and in some cases even their opposition to the Constitution and functioning
of the works committees on account of the fear that their own representative character will cease, if works committees
function.

There have been instances of trade unions regarding the works committees as their rivals; and of opposing the formation of
works committees due to inter-union rivalry.15 The NCL-II, while recognising that workers participation in management
introduced statutorily through the institution of works committees had not been successful, perhaps because of the method
of Constitution of works committees and the functions assigned to these committees, recommended that the works
committee should be substituted by an industrial relations committee to promote in-house dispute settlement.16

DISSOLUTION OF WORKS COMMITTEE

Rule 57 of the Industrial Disputes (Central) Rules 1957, empowers an officer or authority to whom power under s 3 has
been delegated under s 39, to dissolve a works committee, in the manner prescribed in that Rule, if the officer or authority
is satisfied that the committee has not been constituted in accordance with the Rules (rr 38 to 57) or that not less than two-
third of the number of representatives of the workmen have, without any reasonable justification, failed to attend three
consecutive meetings of the committees, or that the committee has, for any other reason, ceased to function. This power
cannot be further delegated. Before the election of successful candidates can be set aside, the rules of natural justice require
that a notice on such members or on the union to which they belong, should be served. As no rule requires the employer to
maintain a voters’ list, the failure of the employer to prepare a voters’ list before the election cannot be held to be an
irregularity vitiating the election.17 In Jaspal Singh, the order passed by Central Government under r 57 of Industrial

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Disputes (Central) Rules dissolving the Works Committee on the ground that the election to the Committee was postponed
beyond a date as provided in the r 46 thereof. Rule 46 runs thus:

46. Procedure for election

(1) The employer shall fix a date as the closing date for receiving nominations from candidates for election as workmen’s
representatives on the committee.
(2) For holding the election, the employer shall also fix a date which shall not be earlier than three days and later than fifteen
days after the closing date for receiving nominations.
(3) The dates so fixed shall be notified at least seven days in advance to the workmen and the registered trade union or unions
concerned. Such notice shall be affixed on the notice board or given adequate publicity amongst the workmen. The
notice shall specify the number of seats to be elected by the groups, sections, shops or departments and the number to be
elected by the members of the registered trade union or unions and by the non-members.
(4) A copy of such notice shall be sent to the registered trade union or unions concerned. (Italics supplied)

Quashing the order of dissolution, Arun Mishra J of Madhya Pradesh High Court held that the simple fact that the date of
election was postponed beyond the date fixed under r 46 was not enough to invalidate the fresh election held after the
initial postponement. The learned judge observed that the dissolution order did not deal elaborately with the prejudice
caused to the parties by alleged change in the list of voters and by the postponement of election, and directed the matter to
be heard and decided afresh.18 In South Eastern Coalfields, the brief facts were: the Central Government issued an order
directing the company to constitute Works Committee. In reply the company made a representation to the Government to
grant exemption under s 36B of ID Act in view of the fact that there was in existence in the company an effective
Grievance Redressal Mechanism. The Government rejected the representation on the ground that a statutory committee
cannot be substituted on by any other committee. (It is to be noted here that at that time s 9C was not yet enforced).
Allowing the writ petition, Sujoy Paul J of Madhya Pradesh High Court held that on a conjoint reading of s 3 and s 36B, it
was crystal clear that the test for deciding the question of exemption was “whether there exists adequate provision for
investigation and settlement of industrial disputes and that the litmus test was whether the provision and committee
mentioned by the company were well equipped and suitable to investigate and settle the industrial disputes of workmen.”
The learned judge observed that the application was rejected by the Government at threshold solely on the ground that the
statutory committee could not be substituted by any other committee without going into the nature of activity, the
grievance redressal mechanism and the scope of its intervention in industrial disputes, etc.19

1 Joint Production Committees in Great Britain, ILO Publication Studies and Reports, Series A, No 42, p 1.
2 Subs by Amended Act no 21 of 1955.
3 Statement of Objects and Reasons’, Gazette of India, Pt 5, 239-40.
4 MD Ramakrishnan v Tamilnadu Electricity Board (1971) 1 LLJ 433, 435-36 (Mad), per Ramaprasada Rao J.
5 Union of India v MTSSD Workers Union (1988) 1 LLJ 543 [LNIND 1988 SC 58], 547 (SC), per Oza J.
6 MD Ramakrishnan v Tamilnadu Electricity Board (1971) 1 LLJ 433, 435-36 (Mad), per Ramaprasada Rao J.
7 Prafulla Mohan Das v Steel Authority of India Ltd (1992) 1 LLJ 621 (Ori) (DB).
8 MD Ramakrishnan (supra).
9 Metal Box Co of India Ltd v Workmen (1952) 1 LLJ 822 (LAT).
10 Northbrook Jute Co Ltd v Workmen (1960) 1 LLJ 580 [LNIND 1960 SC 87], 583 (SC) : AIR 1960 SC 879 [LNIND 1960 SC 87],
per Das Gupta J.
11 Kemp & Co Ltd v Workmen (1955) 1 LLJ 48, 53 (LAT).
12 Elgin Mills Co Ltd v Suti Mill Mazdoor Union (1951) 1 LLJ 184 (LAT).
13 JK Jute Mill Co Ltd v Rashtriya Mill Mazdoor Sabha (1952) 1 LLJ 184 (LAT).
14 Kemp & Co (supra).

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15 Ministry of Labour, Government of India, at the 17th session of the Indian Labour Conference, pp 72-74.
16 Government of India (2002), Report of NCL-II, Chap 13, p 116, para 12.48.
17 Peerjade Husen Sab Mohadin v Commissioner of Labour (1964) 2 LLJ 451 (Mys) (DB) : [1965(10)FLR12].
18 Jaspal Singh v Union of India (2003) 4 LLJ 886 (MP), per Mishra J.
19 South Eastern Coalfields Ltd v Union of India (2013) 4 LLJ 301 (MP) : ILR [2013] MP 2631, per Sujoy Paul J.

End of Document

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER II Authorities under the Act

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER II Authorities under the Act

S. 4. Conciliation Officers.—

(1) The appropriate government may, by notification in the Official Gazette, appoint such number of persons as it
thinks fit, to be conciliation officers, charged with the duty of mediating in and promoting the settlement of
industrial disputes.
(2) A conciliation officer may be appointed for a specified area or for specified industries in a specified area or for
one or more specified industries and either permanently or for a limited period.

LEGISLATION

In the repealed Indian Trade Disputes Act of 1929, there was no provision for the appointment of conciliation officers. The
conciliation machinery in that Act consisted only of a ‘Board of Conciliation’ which by experience proved to be
inadequate to meet the situation. Consequently, s 18A was added to that Act in 1938 whereby the Central and provincial
governments were authorised to appoint ‘Conciliation Officers’ to act as ‘mediators’ in ‘trade disputes’, and this provision
has been reincarnated in s 4 of the Industrial Disputes Act 1947. It is discretionary on the part of the ‘appropriate
government’ to appoint conciliation officers. If the government decides to make appointment of conciliation officers, the
appointment shall be by a notification in the Official Gazette. The government again has the discretion to appoint any
number of persons to be conciliation officers as it thinks fit. The duty of conciliation officers is to mediate in and promote
the settlement of industrial disputes.

SUB-SECTION (1): APPOINTMENT OF A CONCILIATION OFFICER

Sub-section (1) empowers the ‘appropriate government’ to appoint any number of persons, as it thinks fit, to be
conciliation officers to perform the duties of mediating in industrial disputes and promoting their settlement. Such
appointment has to be made by a notification in the Official Gazette of the government. Any person whose appointment as
conciliation officer has not been notified in the Official Gazette of the government cannot discharge the duties of a
conciliation officer.20 A notification issued under this provision cannot be retrospectively amended by adding new persons
to be conciliation officers. Such amendment will be invalid in the eyes of law. Furthermore, if the earlier notification itself
has already been superseded, the question of amendment of a non-existent notification would not arise.21

SUB-SECTION (2)

Appointment for Specified Area or Industries

Sub-section (2) further empowers the ‘appropriate government’ to appoint conciliation officers who have been appointed
as such under sub-s (1), to discharge their duties in specified areas or for specified industries in a specified area or for one
or more specified industries either permanently or for a limited period. The appointment of conciliation officers in such
specified areas or industries as contemplated by this sub-section does not postulate such appointment to be made by a
notification in the Official Gazette. The position, therefore, is that a person becomes a conciliation officer as soon as his
appointment is made by the appropriate government ‘by notification in the Official Gazette’. Further, the appointment of
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

such conciliation officers for a specified area or for specified industries in a specified area or for one or more specified
industries is not required to be made by a notification in the Official Gazette. This point arose before the Supreme Court in
Jhagrakhand Collieries (supra). However, as the fact of the appointment of the conciliation officer concerned, by a
notification in the Official Gazette of the appropriate government, that itself was not clear from the record, hence the court
did not decide the point on the basis of the inadequate facts.

Mediation

Mediation is a process wherein a third party attempts to secure settlement of labour disputes by persuading the parties
either to continue their negotiations or to consider procedural or substantive recommendations that the mediator may
make.22Section 2(d) defines ‘Conciliation Officer’ and s 2(e) defines ‘conciliation proceedings’. Section 11 inter alia, lays
down the procedure and powers of the conciliation officers. Under s 12, the duties of conciliation officers are prescribed.
In case of public utility services, where notice of strike or lockout is given under s 22, it is obligatory on the conciliation
officer to hold conciliation proceedings. In non-public utility services and in public utility services, where notice of strike
or lockout is not given, the conciliation officer has, however, the discretion to decide whether or not to hold conciliation
proceedings.23 A conciliation proceeding in a public utility service is deemed to have commenced on the day on which the
notice of strike or lockout under s 22 is received by a conciliation officer.24In connection with the proceedings in case of
non-public utility service and in public utility service where no notice of strike or lockout under s 22 is given, the Act is
silent. But in a non-public utility concern, from r 10 of the Central Rules, it appears that the conciliation proceedings will
commence on the day mentioned in the formal notice given by the conciliation officer. However, the Act and the Rules are
completely silent as to on what date the conciliation proceeding in a public utility concern where no notice of strike or
lockout under s 22 is given and there is an ‘industrial dispute’ existing or apprehended, can be deemed to have
commenced. Rule 12 of the Industrial Disputes (Central) Rules 1957, enjoins on the conciliation officer to conduct
proceedings expeditiously in such manner as he deems fit. By s 11(2) of the Act and r 23 of the Industrial Disputes
(Central) Rules 1957, the conciliation officer is empowered to enter the premises occupied by any establishment to which
the dispute relates, after giving reasonable notice to parties, and inspect the same or any work, machinery, appliance or
article therein, or interrogate any person therein in respect of anything situated therein or anything relevant to the subject-
matter of the conciliation. Section 11 (4) of the Act empowers the conciliation officer to enforce attendance of any person
for the purpose of examination of such person or to call for and inspect any document which he has ground for considering
to be relevant to the dispute or necessary for the purpose of verifying the implementation of any award. In this connection,
he enjoys the same powers as are vested in a civil court under the Code of Civil Procedure. Section 36(3) imposes a
complete bar against the parties being represented by legal practitioners in any conciliation proceedings. The persons, by
whom the parties are entitled to be represented, have been enumerated in s 36.

Nature of the Functions of Conciliation Officer in Conciliation Proceedings

The functions of a conciliation officer are not judicial or quasi-judicial bur are administrative in nature but where the duties
to be performed by him are judicial or quasi-judicial in nature, then, in connection with everything that they do, the
formalities of a judicial trial will have to be observed, eg, they cannot ascertain from one side its views except upon notice
to, or in the presence of the other party. It is but patent that no conciliation proceedings could be carried on under such
conditions.25 According to the judicial dicta, the functions of the conciliation officers under s 33 are the same as those of
labour courts, tribunals or national tribunals.26 Since the functions of the labour courts, tribunals and national tribunals are
quasi-judicial, a priori the functions of the conciliation officer also should be treated as quasi-judicial. But this is
anomalous as neither s 11 nor any other provision of the Act vests a conciliation officer with quasi-judicial powers. The
law requires re-statement on this point.

20 Jhagrakhand Collieries Pvt Ltd v CGIT 1975 Lab IC 137 (SC), per Sarkaria J.
21 Workmen of Hindustan Construction Co Ltd v Mgmt (1987) 1 LLJ 451 [LNIND 1986 MAD 245], 457 (Mad) (DB), per Chandurkar
CJ.
22 Vermo H Jemons, Bibliography on Dispute Settlement by Third Parties, 572 (USA).
23 Tata Collieries Labour Assn v Mgmt of Digwadhi Colliery [1953] LAC 638.
24 Section 20(1) of the Industrial Disputes Act 1947, and notes thereunder.
25 Royal Calcutta Golf Club Mazdoor Union v State of West Bengal (1957) 1 LLJ 218 [LNIND 1956 CAL 118] (Cal), per Sinha J.

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26 Delhi Cloth and General Mills Co Ltd v Ludh Budh Singh (1972) 1 LLJ 180 [LNIND 1972 SC 17], 199 (SC), per Vaidialingam J.

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O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER II Authorities under the Act

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER II Authorities under the Act

S. 5. Boards of Conciliation.-

(1) The appropriate government may as occasion arises by notification in the Official Gazette constitute a Board of
Conciliation for promoting the settlement of an industrial dispute.
(2) A Board shall consist of a chairman and two or four other members, as the appropriate government thinks fit.
(3) The chairman shall be an independent person and the other members shall be persons appointed in equal numbers
to represent the parties to the dispute and any person appointed to represent a party shall be appointed on the
recommendation of that party:

Provided that, if any party fails to make a recommendation as aforesaid within the prescribed time, the
appropriate government shall appoint such persons as it thinks fit to represent that party.

(4) A Board, having the prescribed quorum, may act notwithstanding the absence of the chairman or any of its
members or any vacancy in its number:

Provide d that if the appropriate government notifies the Board that the services of the chairman or of any
other member have ceased to be available, the Board shall not act until a new chairman or member, as the
case may be, has been appointed.

LEGISLATION

Section 6 of the repealed Trade Disputes Act of 1929, provided for the Constitution of boards while s 7 laid down the
duties of the boards. The present section is based on s 6 of the repealed Act of 1929.

CONSTITUTION AND FUNCTIONS OF THE BOARD OF CONCILIATION

According to the present section, a board consists of a chairman and two or four other members, as the ‘appropriate
government’ thinks fit, who are appointed in equal numbers to represent the parties to a particular dispute. The chairman of
the board must be an independent person within the meaning of s 2(i) of the Act. The members appointed to represent
parties are to be appointed on the recommendation of the parties or if a party fails to make a recommendation within the
prescribed time, the appropriate government is to appoint such persons as it thinks fit to represent that party.27 The quorum
for conducting proceedings is two where the strength is three and three where the strength is five.28 Where a dispute is of a
complicated nature and the issues involved are important and require special handling, boards are preferred to conciliation
officers. However, in recent years no board has been constituted by the Central Government. Disputes are referred to the
boards under s 10(1)(a). Section 11 lays down the procedure and powers of the boards, while s 13 deals with the duties of
the boards. Section 20 provides for the time limits at which the ‘conciliation proceedings’ before the board are to be
deemed to have commenced and concluded. Section 16 provides for the form of the report of the board which requires
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

publication under s 17. Part 3 of the Industrial Disputes (Central) Rules 1957, prescribes the procedure, powers and duties,
inter alia of the conciliation boards.29

CONCILIATION OFFICER Vs CONCILIATION BOARD

There are certain similarities and dissimilarities in the Constitution and functions of the conciliation officers and the
boards.

Similarities

(a) Power to Enter Premises

Both the conciliation officer and members of a board have the power to enter the premises occupied by any establishment
to which the dispute relates, after giving reasonable notice for the purpose of inquiry into any existing or apprehended
industrial dispute.30

(b) Public Servants

The conciliation officers as well as the members of the board are to be deemed to be public servants within the meaning of
section 21 of the Indian Penal Code.31

(c) Settlement Report

In case of settlement arrived at during the conciliation proceedings before the conciliation officers as well as the board,
both have to submit their reports to the appropriate government.32

(d) Failure Report

The conciliation officer as well as the board have to submit the failure report to the appropriate government if no
settlement is arrived at.33

(e) Duty to Promote Settlement

The conciliation officers as well as the boards are charged with the same duties of promoting settlement of industrial
disputes.34

(f) Powers under Section 33

The powers of the conciliation officers as well as of the board to grant or withhold approval or permission under section 33
to the action of the employer discharging or dismissing a workman during the pendency of conciliation proceedings are
similar.

Dissimilarities

(a) Powers regarding Documents and Witnesses

The board has powers:

(1) to enforce the attendance of any person and examining him on oath;
(2) to compel the production of documents and material objects;
(3) to issue commissions for examination of witnesses; and
(4) in respect of other matters that may be prescribed, and every inquiry or investigation by a board is judicial
proceeding within the meaning of sections 193 and 228 of the Indian Penal Code.35

A conciliation officer, however, has only the power to enforce attendance of any person for the purpose of examination of
such person or to compel the production and inspection of documents.36

(b) Procedure

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The board has to follow the procedure like the courts and tribunals and subject to any rules that may be made in this
behalf; whereas the conciliation officers are not bound by any procedural formalities, and the inquiry by a conciliation
officer is of informal nature.37

(c) Initiation of Conciliation Proceedings

A conciliation officer can initiate proceedings in case of the public utility service only after a notice under section 22 has
been given, and in any other case, he may in his discretion, hold the conciliation proceedings where an ‘industrial dispute’
is existing or is apprehended.38But the conciliation proceedings before a board can commence only after a reference has
been made to it under section 10(1) of the Act by the ‘appropriate government’.39

(d) Statement in Failure Report

The conciliation officer in his ‘failure report’ has only to state the facts and circumstances of the dispute along with the
reasons on account of which, in his opinion, the settlement could not he arrived at,40 whereas the board in its report has to
state:

(1) the steps taken by it for ascertaining the facts and circumstances relating to the dispute and for bringing about a
settlement thereof;
(2) statement of facts and circumstances relating to the dispute and for bringing about a settlement thereof;
(3) its findings on the facts and circumstances of the dispute;
(4) the reasons on account of which, in its opinion, the settlement could not be arrived at; and
(5) its recommendations for the determination of the dispute.41

(e) Publication for Settlement or Failure Report

The settlement recorded or the failure report submitted by the board under section 13(3) is required to be published under
section 17 ; whereas no such publication is required for the settlement recorded or the failure report submitted by the
conciliation officer under section 12(4) of the Act.

(f) Period for Submission of Report

The period for submission of the conciliation officers’ report is 14 days from the date of commencement of the
proceedings or any other shorter period that may be fixed by the appropriate government and this period may be extended
by agreement of the parties in writing42 whereas the period for submission of the report of the board is two months from
the date of reference of the dispute to it or a shorter period that may be fixed by the appropriate government and this period
may be extended by agreement of all the parties in writing; or by the government for father time not exceeding two months
in aggregate.43

(g) Commencement and Conclusion of Conciliation Proceedings

Before a conciliation officer, the conciliation proceedings commence on the date on which a notice of strike or lockout
under section 22 is received by him in case of a public utility concern and in any other cases on the date indicated by him
in formal notice under rule 10 of the Central Rules or the corresponding state rule, and conclude on the date of signing of
the memorandum of settlement by the parties and in case of ‘no settlement’, on the date on which the appropriate
government receives the report of the conciliation officer except in the case of a reference under section 10(1) of the Act
being made during the pendency of the conciliation proceedings in which case the conciliation proceedings conclude on
the date on which the reference is made. Before the board, the proceedings commence on the date the dispute is referred to
it under section 10(1) (a) and conclude on the date on which the report of the board is published under section 17 of the
Act.44

(h) Number of Members

A conciliation officer has to act singly for bringing about the settlement of the industrial dispute between the parties while
the board consists of a chairman and two or four other members.

(i) Permanency of Tenure

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A conciliation officer is a permanent employee on the rolls of the Government, usually belonging to the Labour
Department, whereas a conciliation board is temporary in so far as it comes into being on being appointed by the
appropriate government and stands dissolved once the purpose is served, i.e., after the settlement has been arrived at
between the parties or a failure report has been submitted by the board to the government.

27 Section 5 of the ID Act and r 6 of the Industrial Disputes (Central) Rules 1957.
28 Section 5(4) of the ID Act and r 14(1) of the Industrial Disputes (Central) Rules 1957.
29 Rules 9 to 30 of the Industrial Disputes (Central) Rules 1957.
30 Section 11(2).
31 Section 11(6).
32 Sections 12(3) and 13(2).
33 Sections 12(4) and 13(3).
34 Sections 4 and 5.
35 Section 11(3) and r 23 of the Industrial Disputes (Central) Rules 1957.
36 Section 11 (4).
37 Section 11(1).
38 Section 12(1) ; KH Gandhi v Sinha (RNP) (1958) 1 LLJ 82 (Pat) (DB), per Sinha J.
39 Section 13(1).
40 Section 12(4).
41 Section 13(5).
42 Section 12(6).
43 Section 13(5).
44 Section 20.

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O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER II Authorities under the Act

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER II Authorities under the Act

S. 6. Courts of Inquiry.—

(1) The appropriate government may as occasion arises by notification in the Official Gazette constitute a court of
inquiry for inquiring into any matter appearing to be connected with or relevant to an industrial dispute.
(2) A court may consist of one independent person or of such number of independent persons as the appropriate
government may think fit and where a court consists of two or more members, one of them shall be appointed as
the chairman.
(3) A court, having the prescribed quorum, may act notwithstanding the absence of the chairman or any of its
members or any vacancy in its number:

Provided that, if the appropriate government notifies the court that the services of the chairman have ceased
to be available, the court shall not act until a new chairman has been appointed.

LEGISLATION

This provision was enacted in the original Act of 1947. Rule 5 of the Industrial Disputes (Central) Rules 1957 provides
that the appointment of a court of inquiry together with the names of persons constituting the court shall be notified in the
Official Gazette.

COURT OF INQUIRY

Section 2(f) defines a ‘court of inquiry’. Section 6 enables the ‘appropriate government’ to constitute a court of inquiry and
the reference to that court of any matter appearing to be connected with or relevant to an industrial dispute has to be made
under s 10(1)(b).45Section 11 prescribes the procedure and powers of the ‘court of inquiry’. Section 14 lays down the
duties of the court of inquiry. Section 16 provides for the form of the report which requires publication under s 17. During
the pendency of proceedings before a court of inquiry, there is no bar against workmen going on strike, (s 22 ). Likewise,
there is no bar against the employer declaring a lockout (s 23 ). Section 33, does not bar the employer from taking action
against a workman during the pendency of proceedings before the court of inquiry.

45 Ushodaya Publications Pvt Ltd v Govt of AP 1983 Lab IC 580, 592 (AP) (DB), per Kuppuswami CJ.

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER II Authorities under the Act

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER II Authorities under the Act

46[S. 7. Labour Courts.—

(1) The appropriate government may, by notification in the Official Gazette, constitute one or more labour courts for
the adjudication of industrial disputes relating to any matter specified in the Second Schedule and for performing
such other functions as may be assigned to them under this Act.
(2) A labour court shall consist of one person only to be appointed by the appropriate government.
(3) A person shall not be qualified for appointment as the presiding officer of a labour court, unless—
47[(a) he is, or has been, a judge of a High Court; or
(b) he has, for a period of not less than three years, been a district judge or an additional district judge; or
48[(c) ***];
49[(d)] he has held any judicial office in India for not less than seven years; or
50[(e)] he has been the presiding officer of a labour court constituted under any Provincial Act or State Act
for not less than five years.]
51[(f) he is or has been a Deputy Chief Labour Commissioner (Central) or Joint Commissioner of the State
Labour Department, having a degree in law and at least seven years’ experience in the labour department
including three years of experience as Conciliation Officer:

Provided that no such Deputy Chief Labour Commissioner or Joint Labour Commissioner shall be
appointed unless he resigns from the service of the Central Government or State Government, as the
case may be, before being appointed as the presiding officer; or

(g) he is an officer of Indian Legal Service in Grade III with three years’ experience in the grade.]

LEGISLATION

The Industrial Disputes Act of 1947, as originally enacted did not contain provisions regarding the creation of labour
courts. By the Industrial Disputes (Amendment and Miscellaneous Provisions) Act of 1956, for the old s 7, the present ss
7, 7 A, 7B, and 7C were substituted. Apart from s 7, which defines a ‘labour court’, the Second Schedule of the Act, was
also inserted by the same amending Act of 1956. Section 7 has been amended by the Industrial Disputes (Amendment) Act
1964 (Act 36 of 1964), whereby cll (a) and (b) of the old sub-s (3) have been respectively relettered as cll (d) and (e) in the
present sub-s (3) and present cll (a), (b) and (c) of sub-s (3) have been inserted afresh. As a result of this amendment, cll
(a), (b) and (c) in sub-s (3) are now the same as cll (a), (aa) and (b) of sub-s (3) of the amended s 7A. By this amendment,
the range of persons qualified to be appointed as presiding officers has been enlarged.

SUB-SECTION (1)
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

(i) Constitution of Labour Courts

The appropriate government has been empowered by sub-s (1) of s 7 to constitute one or more labour courts in a state.
Thus, the provision is wide enough to enable the appropriate government to constitute more than one labour court. The
Central Government may constitute labour courts in any state for adjudication of the matters in respect of which it is the
‘appropriate government’ while a State Government may constitute labour courts in its territories for adjudication of the
matters in relation to which it is the ‘appropriate government’. This section does not provide for any territorial limits to the
jurisdiction of the labour courts so constituted. It is permissible for the appropriate government to refer any ‘industrial
dispute’ in whatever territory of the state it may arise, to any of the labour courts, though no doubt for the purposes of
convenience, it may decide to refer only disputes arising in a particular region to the labour court in that region.52 The
labour courts are to be appointed by a notification in the Official Gazette of the ‘appropriate government’. This clause is
self-contained so far as the Constitution of the labour courts is concerned. As soon as a notification under this clause is
issued, the labour court is constituted. The government may take time to appoint a person as the presiding officer of the
labour court but the appointment of the presiding officer cannot be held to be a part of the Constitution of the labour court.
If for any reason a vacancy occurs in the office of the presiding officer of a labour court, the ‘appropriate government’
shall appoint another person to fill the vacancy under s 8 of the Act.53This sub-section merely provides for the Constitution
of labour courts and lays down that they shall be competent to adjudicate upon any matters specified in the Second
Schedule and to perform such other functions as may be assigned to them under the Act. But this provision does not
indicate as to how a labour court will take congnizance of a dispute. From s 10, it is clear that the labour court can take
cognizance of an industrial dispute only on a reference having been made to it under that section. Hence, a party to a
dispute cannot approach a labour court directly for adjudication of an industrial disputes.54

(ii) Functions of Labour Courts

The labour courts shall be constituted for:

(a) adjudication of industrial disputes relating to any matters specified in the Second Schedule [ section 7(1) ] or matters
appearing to be connected with or relevant to such disputes [ section 10(1)(c) ]; and
(b) performing such other functions as may be assigned to them under the Industrial Disputes Act [ section 7(1) and s 33C(2)
].

(a) Adjudication of Industrial Disputes

The Second Schedule specifically refers to s 7, which provides for the Constitution of labour courts for the adjudication of
industrial disputes relating to matters in that schedule and for performing such other functions as may be assigned to
them55 but the first proviso to s 100 ) lays down that where the disputes relates to a matter specified in the Third Schedule,
if it is not likely to effect more than 100 workmen, it can be referred to a labour court. Thus, disputes arising under Second
Schedule can alone be adjudicated by a labour court unless the case falls under the first proviso to s 10(l) of the Act in
which case the dispute under the Third Schedule can also be adjudicated upon by the labour court.56 Therefore, if on the
facts of a case, it appears that the dispute relating to a matter covered in the Third Schedule is likely to affect more than
100 workmen, the reference to the labour court would be invalid.57 Item 6 of the Second Schedule is the residuary item
under which, except the matters specified in the Third Schedule in respect of which, the industrial tribunal has exclusive
jurisdiction, not only the labour court, but even the industrial tribunal will have jurisdiction to adjudicate.58 The jurisdiction
of the labour court to adjudicate upon matters enumerated in the Second Schedule, or matters in the Third Schedule in
cases falling under the first proviso to s 10(1), or upon all matters other than those specified in the Third Schedule, springs
from the reference made to it by the ‘appropriate government’ under s 10 of the Act.59 Once a labour court is constituted to
deal with ‘industrial disputes’, the ‘appropriate government’ has to refer to it such disputes as fall within its jurisdiction.
However, if there are more than one labour courts so authorised in any area, there would obviously be a choice of forum,
unless there were certain rules under which such choice is limited.60 The functions of a labour court are of great public
importance and are quasi-judicial in nature. The principles of adjudication of the disputes referred to the labour courts
constituted under s 7, industrial tribunals constituted under s 7A and national tribunals constituted under s 7B are the same.
The jurisdiction of the labour court stems from the order of reference and is sustained until it makes an award and the same
becomes enforceable. Once the labour court is seized of jurisdiction by virtue of the order of reference made to it, it cannot
be taken away by subsequent acts on the part of the parties.61 Nor can the jurisdiction of the labour court be taken away by
the government by cancelling, withdrawing or superseding the reference once made to it.62A labour court, constituted
under s 7, cannot be abolished by the ‘appropriate government’, till it has made the awards in the references made to it, in
the absence of a specific provision in the Act. Section 21 of the General Clauses Act cannot be pressed into service. Hence,

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a notification cancelling a labour court constituted under s 7 and constituting a fresh labour court will operate from the date
of that notification (and will not affect references made earlier) and the references made from the dates of the new
notification will only be taken cognizance of by the new labour court.63 It is not permissible for the labour court to
entertain more disputes than are contemplated in the reference nor is it permissible for it to decline to adjudicate matters
which clearly arise in the terms of the reference.64

(b) Performing such other Functions as may be Assigned under this Act

The word ‘assign’ means conferment of powers under the Act on one or more labour courts, as the case may be.65 The
other matters assignable to labour courts are:

(1) voluntary reference of industrial disputes by a written agreement between the parties under section 10(2) ;
(2) arbitration reference under section 10A ;
(3) application for ‘permission’ or ‘approval’ under section 33 ;
(4) application under section 33C(2) for computation of ‘any money benefit’ which is capable of being computed in
terms of money;66 and
(5) reference of awards or settlements for interpretation in cases of difficulty or doubt under section 36A.

These matters have been dealt with in their proper places under the relevant sections.

(iii) Presiding Officer

The labour court will consist only of one person and such person is to be appointed by the ‘appropriate government’. Sub-
sections (1) and (2) deal with different subjects. Sub-section (1) refers to the Constitution of labour court while sub-s (2)
refers to the appointment of a person as presiding officer of the labour court. There may be a composite notification by
which a labour court is constituted and a person is appointed as the presiding officer of that labour court. However, the
source of power under each sub-section is distinct. Once a labour court is constituted under sub-s (1) of s 7, it need not be
reconstituted again and again whenever there is a vacancy in the post of presiding officer and another person is appointed
to that post. This position is clear from s 8 also, which refers to the appointment of a person in accordance with the
provisions of the Act to fill a vacancy occurring in the office of the presiding officer of a labour court.67

(iv) Qualifications of the Presiding Officer of a Labour Court

The labour court is one of the authorities enumerated under Ch II. Sections 7, 7A and s 7B prescribe special qualifications
for the presiding officers. These adjudicatory bodies are one man bodies and each of these sections prescribes the
qualifications of the presiding officers of the authorities constituted thereunder. InStatesman, Hidayatullah CJI observed
that the intention of legislature is that persons, who can be described as ‘independent’ and with sufficient judicial
experience, must be selected. The mention of High Court judges and district judges in these sections indicates that
ordinarily judicial officers from the civil judiciary must be selected at least so long as separation of judiciary from the
executive in the public services is not finally achieved. The appointment of a person from the rank of civil judiciary carries
with it an assurance which is unique. From a cursory glance of these sections, it would appear that the selection is most
restricted in the case of national tribunals, and in varying degree less and less restricted in cases of tribunals and labour
courts. A national tribunal, can only be presided over by a person who is or has been a judge of a High Court. These
qualifications do not admit of any doubt or exception since the incumbent’s qualifications are quite clearly laid down. In
the case of tribunals, the range of selection is made wider by including a district judge or an additional district judge, who
held the office for a period of not less than three years. The selection is made still wider in the case of labour courts by
making competent, in addition, presiding officers of labour courts constituted under any Provincial Act or State Act for not
less than five years, and persons holding judicial office for not less than seven years. This sub-section lays down that a
person shall not be qualified for appointment as a presiding officer of a labour court unless:

(1) he is, or has been, a judge of a High Court; or

(2) he has for a period of not less than three years been a district judge or an additional district judge; or
(3) he has held any judicial office in India for not less than seven years; or
(4) he has been a presiding officer of a labour court constituted under any Provincial Act or state Act for not less than
five years.

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(5) he is or has been a Deputy Chief Labour Commissioner (Central) or Joint Commissioner of the State Labour
Department, having a degree in law and at least seven years’ experience in the labour department including
three years of experience as Conciliation Officer; or
(6) he is an officer of Indian Legal Service in Grade III with three years’ experience in the grade.

Note: Items (5) and (6) above have been inserted in the year 2010, as indicated in the main section.

In the same case, while considering the question whether a person, who had held the office of a magistrate for not less than
seven years, would satisfy the requirement of judicial office within the meaning of s 7(3) (d) of the Act, the learned Chief
Justice held that the phrase ‘judicial office’ postulates that there is an office and that office is primarily judicial. ‘Office’
means a fixed position for the purpose of duties. The distinction between ‘judicial function’ and ‘judicial office’ was held
to be artificial and unsubstantial in view of the fact that the magistrate was holding a fixed position for 19 years and
performing functions primarily of a judicial character. On this view of the matter, the learned Chief Justice refused to
interfere by way of a writ of quo warranto with the appointment of the presiding officer of the labour court in view of the
provisions of s 9 of the Act.68 The Punjab and Haryana High Court has taken the view that the office of registrar to the
pensions appeals tribunal is administrative in nature and not a judicial office, even if the tribunal be a judicial or quasi-
judicial authority.69 Likewise, the Bombay High Court held that assistant commissioner of labour in the service of the State
Government could not validly be appointed as labour court judge.70 In Labour Law Practitioners Assn, the Supreme Court
quashed the notification issued by the Government of Maharashtra appointing assistant commissioners of labour as judges
of labour courts, and observed that bearing in mind the principle of separation of powers and independence of the
judiciary, judicial service contemplated a service exclusively of judicial posts in which there would be a hierarchy headed
by a district judge. Persons presiding over industrial and labour courts would constitute judicial service so defined.
Therefore, the recruitment of labour court judges has to be made in accordance with Art. 234 of the Constitution.71

(v) Court Subordinate to the High Court

The Patna High Court, had taken the view that the labour court constituted under s 7 of the Industrial Disputes Act, is a
‘court subordinate’ to the High Court within the meaning of s 115 of the Code of Civil Procedure. It was, however,
observed that since the case has been placed before a Division Bench, it would make no difference whether the
applications were under s 115 of the Code of Civil Procedure or under Art. 227 of the Constitution. For all intents and
purposes the court said that the scope of application under s 115 of the Code of Civil Procedure or under Art. 227 of the
Constitution is not very different.72 The Gujarat High Court held that labour courts, industrial tribunals and national
tribunals are courts within the meaning of s 3 of the Contempt of Courts Act 1971 for the purposes of s 10.73

46 Sections 7, 7A, 7B and 7C subs by Act 36 of 1956, s 4, for s 7 (wef 10-3-1957).

47 Ins by Act 36 of 1964, s 3 (wef 19-12- 1964).
48 Clause (c) omitted by Act 46 of 1982, s 3 (wef 21-8- 1984).
49 Clauses (a) and (b) relettered as (d) and (e) respectively by Act 36 of 1964, s 3 (wef 19-12-1964).
50 Ins by Act 36 of 1964, s 3 (wef 19-12-1964).
51 Ins by Act 24 of 2010, s 4 (wef 15-9-2010 vide S.O. 2278 (E), dated 15-9-2010)).
52 Muthe Steels (India) Ltd v LC, 1979 Lab IC 325 [LNIND 1980 SC 275], 332 (AP) (DB), per Kuppuswamy J.
53 East India Pharmaceutical Works Ltd v GS Verma 1973 Lab IC 1501, 1502 (Pat) (DB), per SNP Singh J.
54 Vishnu Sadav Bhattacharya v Cycle Industries 1973 Lab IC 396, 397 (MP) (DB), per Raina J.
55 South Indian Bank Ltd v AR Chacko (1964) 1 LLJ 19 [LNIND 1963 SC 277], 21 (SC), per Das Gupta J.
56 Sindhu Resettlement Corpn Ltd v IT (1965) 2 LLJ 268, 273 (Guj) (DB), per Shelat CJ.
57 Mgmt of Gauhati Transport Assn v LC 1969 Lab IC 1568, 1573-74 (Assam & Nag), per Goswami J.
58 Sindhu Resettlement Corpn Ltd v IT (1965) 2 LLJ 268, 273 (Guj) (DB), per Shelat CJ.
59 Working Journalists of ‘Hindu’ v ‘Hindu’ (1961) 1 LLJ 288 [LNIND 1960 MAD 138] (Mad), per Veeraswami J.

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60 Chipping & Painting Employees Asm v AT Zambre (1968) 2 LLJ 193, 198 (Bom) (DB), per Nain J.
61 Working Journalists of ‘Hindu’ v ‘Hindu’ (1961) 1 LLJ 288 [LNIND 1960 MAD 138] (Mad), per Veeraswami J.
62 State of Bihar v DN Ganguli (1958) 2 LLJ 634 [LNIND 1958 SC 92] (SC), per Gajendragadkar J.
63 East India Pharmaceutical Works Ltd v GS Verma 1973 Lab IC 1501, 1508-09 (Pat) (DB), per SNP Singh J.
64 Mgmt Gauhati Transport Assn v LC 1969 Lab IC 1568, 1573-74 (DB) (Assam & Nag), per Goswami J.
65 Coromandal Fertilisers Ltd v State of AP (1988) 2 LLJ 390, 391 (AP), per K Ramaswami J.
66 South Indian Bank Ltd v AR Chacko (1964) 1 LLJ 19 [LNIND 1963 SC 277], 21 (SC), per Das Gupta J.
67 Mgmt of Bararee Coke Plant v Workmen 1968 Lab IC 512, 514 (Pat) (DB), per Narasimham CJ.
68 Statesman Pvt Ltd v HR Deb AIR 1968 SC 1495 [LNIND 1968 SC 94], 1497-98 : 1969 (18) FLR 100 : 1968 Lab IC 1525 : [1968]
3 SCR 614 [LNIND 1968 SC 94], per Hidayatullah CJI.
69 Haryana Coop Transport Ltd v State of Punjab 1969 Lab IC 301 (P&H) (DB), per Shamsher Bahadur J.
70 State of Maharashtra v LLP Assn 1987 Lab IC 1061 (Bom) (DB), per Bharucha J.
71 State of Maharashtra v LLP Association (1998) 1 LLJ 868 [LNIND 1998 SC 189] (SC), per Sujata V Manohar J.
72 Calcutta Chemical Co Ltd v Barman (DK) 1969 Lab IC 1498, 1504 (Pat) (DB), per Untwalia J.
73 Shaikh Mohammed bhikan Hussainbhai v Manager, Chandrabhanu Cinema 1986 Lab IC 1749 (Guj) (FB).

End of Document

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER II Authorities under the Act

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER II Authorities under the Act

74[S. 7A. Tribunals.—

(1) The appropriate government may, by notification in the Official Gazette, constitute one or more industrial
tribunals for the adjudication of industrial disputes relating to any matter, whether specified in the Second
Schedule or the Third Schedule 75[and for performing such other functions as may be assigned to them under this
Act].
(2) A tribunal shall consist of one person only to be appointed by the appropriate government.
(3) A person shall not be qualified for appointment as the presiding officer of a tribunal unless—
(a) he is, or has been, a judge of a High Court; or
76[(aa) he has, for a period of not less than three years, been a district judge or an additional district judge
77[***].

78[(b) he is or has been a Deputy Chief Labour Commissioner (Central) or Joint Commissioner of the State
Labour Department, having a degree in law and at least seven years’ experience in the labour department
including three years of experience as Conciliation Officer:

Provided that no such Deputy Chief Labour Commissioner or Joint Labour Commissioner shall be
appointed unless he resigns from the service of the Central Government or State Government, as the
case may be, before being appointed as the presiding officer; or

(c) he is an officer of Indian Legal Service in Grade III with three years’ experience in the grade.]
(4) The appropriate government may, if it so thinks fit, appoint two persons as assessors to advise the tribunal in the
proceeding before it].

LEGISLATION

There was no provision of any adjudicatory machinery in the repealed Trade Disputes Act 1929. Tribunals were created for
the first time by s 7 of the Industrial Disputes Act 1947, for the purpose of ‘adjudicating’ upon ‘industrial disputes’,
referred to them by the ‘appropriate government’, thus introducing ‘compulsory adjudication’ where voluntary
negotiations or mediation through the machinery of conciliation authorities fail. But after the experience of a decade, the
employers and workmen have been given the option to refer industrial disputes to voluntary arbitration by mutual
agreement in writing under s 10A of the Act. By the Industrial Disputes (Amendment and Miscellaneous Provisions) Act
1956, original s 7 was replaced by the present ss 7, 7A, 7B and 7C. Section 7A empowers the appropriate government to
constitute industrial tribunals. This section has been further amended by s 4 of the Industrial Disputes (Amendment) Act
1964, by the insertion of cl (aa). Consequently, now, even a person who has been a ‘district judge’ or ‘additional district
judge’, for a period not less than three years, can be appointed as presiding officer of an industrial tribunal.

SUB-SECTION (1)
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

(i) Constitution of Industrial Tribunals

The appropriate government has been empowered by s 7A to constitute one or more industrial tribunals. The Central
Government can appoint tribunals in any state for the adjudication of the ‘industrial disputes’ in relation to which it is the
‘appropriate government’. A State Government may constitute one or more industrial tribunals in its territory, for
adjudicating the matters in respect to which it is the appropriate government. The appointment of the industrial tribunals
has to be made by the appropriate government by means of a notification in its Official Gazette. The moment a notification
under this sub-section is issued in the Official Gazette. the establishment of the industrial tribunal is complete and
permanent. The appointment of the presiding officer of the tribunal, though essential, is a separate matter. However, the
appropriate government can constitute a tribunal and make an appointment of the presiding officer thereof simultaneously
by a composite notification or by different notifications.79In terms of amendment of 1982, the tribunals have been given
jurisdiction not only to adjudicate upon the ‘industrial disputes’ relating to any matter specified in the second or Third
Schedule but also will have jurisdiction to perform ‘such other functions as may be assigned to them under the Act’. This
amending Act has relegated some functions to the industrial tribunals other than the adjudication of disputes on reference
under s 10. Such other matters, therefore, have been covered by the amendment. However, s 10(1)(d) further provides that
when a reference is made of an industrial dispute relating to any matter specified in the Second or Third Schedule, any
matter appearing to be connected with or relevant to that dispute can be further referred to the tribunal for adjudication. It
is immaterial whether any such ‘matter appearing to be connected with or relevant to’ the basic dispute relates to any
matter specified in the Second or Third Schedule or not. It is sufficient that the matter is connected with or relevant to the
dispute that has been referred for adjudication to the tribunal.

In LIC of India, the Central Government in exercise of powers under s 10(1) (d) of the Act referred an industrial dispute
for adjudication to the Central Government Industrial Tribunal, Bombay between the Management of the Life Insurance
Corpn of India, Bombay and its workmen represented by the All India Insurance Employees Association. The award of the
tribunal arising out of this reference was challenged before the Bombay High Court on the ground that the Central
Government Industrial Tribunal had no jurisdiction to entertain the dispute which will affect the functioning of the Life
Insurance Corporation all over India. It was submitted that the Central Government Industrial Tribunal, Bombay had only
limited territorial jurisdiction confined to Maharashtra and Gujarat and it had no jurisdiction to decide disputes which have
effect all over India. Therefore, the national tribunal ought to have been constituted for this purpose under the Act, as the
impugned award was without jurisdiction. On appraisal of the relevant language of the statute, the court held that the
provisions of s 7B did not expressly or impliedly curtail the territorial jurisdiction of the Central Government Industrial
Tribunal. The award therefore, could not be considered beyond the territorial jurisdiction of the Central Government
Tribunal.80The correctness of this holding is not free from doubt. In the absence of any statutory rules or regulations, the
appropriate government can regulate its public services in exercise of its executive powers. In Paulose, the Government
entrusted the work of selection of candidates for the appointment of presiding officers of industrial tribunals and labour
courts to the advocate-general. This mode of selection of the candidates was challenged by a writ petition in the High
Court of Kerala on the ground that the government is bound to make appointment to this post after giving an opportunity to
all eligible persons before considering for appointment by proper publicity through advertisement in newspapers. In the
absence of such opportunity being given to all the persons having such prescribed qualification to be appointed, the
method was unfair and arbitrary and, therefore, violative of Arts. 14 and 16 of the Constitution. A single judge of the
Kerala High Court upheld the appointment holding that the action taken by the government was within the powers
enjoined by law and it is not the requirement of law that for every recruitment to an office under the state, there must be an
advertisement in the public press. Therefore, it is not necessary that the state must in every case of public employment
issue an advertisement or notice inviting applications for an office.81

(ii) Term of the Tribunal

Under the provisions of s 7A, the appropriate government has ample power of constituting an industrial tribunal for a
limited time intending thereby that its life would automatically come to an end on the expiry of that time. Again, the
‘appropriate government’ has wide discretion to appoint tribunals for any limited time or for a particular case or a number
of cases or for a particular area. When a tribunal constituted for a limited period automatically comes to an end after the
expiry of the period, the ‘appropriate government’ can constitute another tribunal and refer to it the disputes which were
pending before the first tribunal and remained undisposed. On the life of a tribunal coming to end by efflux of time or by
the disposal of the cases for the adjudication of which it was specifically constituted, no question of vacancy in the office
really arises and it is not a case falling under s 8, but the situation that arises falls within the ambit of s 7A, ie, a new
tribunal has to be constituted under s 7A, rather than filling in the vacancy under s 8.82 The government can nominate a
person to constitute an industrial tribunal for adjudication of ‘industrial disputes’ as and when they arise and refer them to
it under s 10 ; or it may constitute a tribunal for a particular case or cases.83 The scope of the two steps, viz, Constitution of
industrial tribunal under sub-s (1) and appointment of presiding officers under sub-s (2) though may be notified in one

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notification, is different from each other. The industrial tribunal is constituted for the adjudication of ‘industrial disputes’,
while its presiding officer is appointed to preside over the tribunal. It is obvious that the tribunal may be constituted for a
longer or indefinite period, while the presiding officer may be appointed only for a short or limited period. For instance,
the tribunal may continue, while its presiding officer may abdicate his office, by retirement on attaining the prescribed age,
resignation or death. Thus, the term of the tribunal is not co-extensive with that of its presiding officer. The tribunal
constituted under s 7A is a permanent tribunal.84 Under s 8, when a vacancy occurs in the office of a presiding officer
another person may be appointed in his place, and the tribunal will then carry on from the stage at which the case was
when the vacancy was filled.85

In Minerva Mills, the Supreme Court, construing a notification constituting an industrial tribunal to the effect that, ‘under s
10(1)(c) of the Industrial Disputes Act, HH the Maharaja is pleased to direct that the tribunal now constituted under this
notification shall hear and dispose of all the references made to the previous tribunal constituted under the notification of
15 June 1951, which have remained undisposed of on 15 June 1952’ observed that, ‘this notification does not say that this
new tribunal cannot hear the dispute de novo. If any prejudice is caused to the employers, it will be open to the newly
constituted tribunal to begin the hearing of the disputes from the very first stage’. Thus, if in a case the tribunal ceases to
exist, the appropriate government while constituting a new tribunal can, in the same notification, empower the new tribunal
to begin hearing of the pending ‘industrial disputes’ from the stage at which they were left by the previous tribunal in the
process of adjudication. If, however, the span of the tribunal itself comes to an end and a new tribunal is constituted in its
place under s 7A, it is open to the newly constituted tribunal to begin denovo, if otherwise prejudice is likely to be caused
to any party. It is, however, open to either party to point out and convince the new tribunal that prejudice will be caused if
a de novo trial is not held. 86

Once the tribunal has been constituted and its appointment has been duly notified, along with the name of the presiding
officer who is appointed to it, disputes may be referred to such tribunal under s 10 by the ‘appropriate government’, for
adjudication. It is, however, pertinent to note that reference is to the tribunal and not to its presiding officer. The two are
conceptually distinct. In some states, a practice has developed to mention in the order of reference the name of the
presiding officer, who for the time being may be presiding over the tribunal, because in such states the tribunals do not
bear any distinctive serial numbers or other mark which may distinguish them from each other, such as first tribunal,
second tribunal, etc. The name of the presiding officer of the tribunal, therefore, is intended to merely identify the tribunal
concerned out of many that may be operating in a particular region to which the reference is intended to be made. An
ingenious point was raised before the Delhi High Court in Blue Star.87 The presiding officer of the labour court went on
temporary leave and the government appointed another person as the presiding officer during his absence. The
appointment of the temporary presiding officer was, however quashed by the High Court for the reason that the real
presiding officer had not demitted his office and there was no vacancy under s 8 created by his going on leave.88 In the
meantime, a reference was made to the labour court constituted for the union territory of Delhi and presided over by the
temporary presiding officer. When the real presiding officer resumed his office upon his return from leave, his jurisdiction
to adjudicate on the reference was challenged on the ground that the reference was made to the other presiding officer and
he alone could adjudicate on it. It was argued that since the appointment of the temporary presiding officer had been
annulled by the High Court, the reference itself was invalid. The objection prevailed with the labour court and it held that it
had no jurisdiction to adjudicate on the dispute on the ground that the reference had been made to the labour court presided
over by the other presiding officer and that such a reference could be heard only by him and not by any other presiding
officer of the labour court. Furthermore, since the appointment of the temporary presiding officer was itself invalid, the
reference did not survive. This award of the labour court was quashed by the High Court holding that the reference was to
the labour court then presided over by the temporary presiding officer which was otherwise presided over by the real
presiding officer and not to the individual presiding officer.

A tribunal once appointed cannot be abolished by an executive act merely because the government chooses to put an end to
it when a reference is pending before it, for the state cannot do indirectly what is not permissible to it to do expressly or
impliedly under the Act. Hence, a dispute pending before such a tribunal cannot be referred to another tribunal under s
10(1) (d) as that can be done only under s 33B.89 The fact that a tribunal derives its authority from an order of reference to
adjudicate upon a dispute, does not extinguish the authority of the tribunal nor does it render the tribunal functus officio,
when the tribunal communicates its decision to the ‘appropriate government’ which referred the dispute. On disputes being
raised, the appropriate government is entitled to refer those disputes to an industrial tribunal, and the tribunal may make its
award on the disputes referred to it, and for the purpose of the dispute so referred and decided by an award, the
proceedings before the tribunal may be deemed to be concluded. But the tribunal does not become functus officio qua those
disputes, nor does it come to an end with the making of an award. The government would, therefore, be entitled to make a
reference under s 36A to a tribunal for clarification of a prior award, and a supplementary award of the tribunal on such
reference would be valid.90 In Renjit Kumar, s 7A(3)(a), as amended by the State of Kerala by Act 28 of 1961, was under
challenge. More specifically, the issue was about the disparity in pay between the Presiding Officers of Industrial
Tribunals and District Judges, by which the former were placed in a lower scale of pay. In a writ petition filed by the

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respondents, the Kerala High Court directed the Government of Kerala to place the presiding officers in the same scale of
pay as the district judges. Aggrieved, the State of Kerala moved the Supreme Court. Dismissing the appeal, Panta J (for
self and Thakker J) held:

The State Government had granted pay scale at par with that of the District Judges before the recommendations of the pay scales of
the District Judges by the Shetty Commission by which District Judges were placed in higher scales which benefit has been denied
to the Presiding Officers of Industrial Tribunals merely, on the ground that the Presiding Officers of the Industrial Tribunal are not
appointed under Article 233 of the Constitution of India nor they are appointed to the Judicial Services of a State under Article 234
of the Constitution. The action of the State Government in treating the officers presiding over the Industrial Tribunal differently
from the District Judges in the matter of pay scales on its face is in violation of Article 14 of the Constitution of India (para 9)...
Having regard to the well-reasoned judgment of the Division Bench, we are of the view that the impugned judgment warrants no
interference inasmuch as no illegality, infirmity or error of jurisdiction could be shown before us by the appellant-State.91 (para
14).

(iii) Jurisdiction and Powers of the Tribunal

The first proviso to s 10(1), however, lays down that where the dispute relates to a matter specified in the Third Schedule
and is not likely to affect more than one hundred workmen, the appropriate government has the discretion to make the
reference to a labour court. Thus, whereas, questions arising under the Second Schedule can be adjudicated both by a
tribunal as well as a labour court, questions arising from matters in the Third Schedule can be referred for adjudication to a
tribunal alone, unless the case falls under the first proviso to s 10 (1)(d). There is a marked distinction between the
jurisdiction of the labour court and that of the industrial tribunal. Whilst the labour court, functioning for all purposes
enumerated under the Act, has certain duties and responsibilities as prescribed therein, the matters to be dealt with and
which are within the jurisdiction of the industrial tribunal as prescribed under s 7A are entirely different.92The industrial
tribunals constituted under this section are required not only to adjudicate industrial disputes but also may be required ‘to
perform such other functions as may be assigned to them under this Act’. The word ‘assign’ means conferment of powers
under the Act on such tribunals. In other words, apart from the power to refer the matters for adjudication of industrial
disputes relating to any matter whether specified in the Second Schedule or the Third. Schedule, such tribunals can be
required to perform such other functions as may be assigned to them under the Act. For instance, functions of a labour
court under ss 7 and 33C can also be assigned to an industrial tribunal and vice versa when the functions of a labour court
under s 7A are assigned to an industrial tribunal constituted under s 7A, it can legally and validly discharge the functions
of a labour court. For the sake of brevity, a compendious name such as industrial tribunal-cum-labour court has been
coined.93

(iv) Tribunal’s functions are of Quasi-judicial Nature

Though, industrial tribunals are not courts, in the strict sense of the term, they have to discharge quasi judicial functions.
Their powers are derived from the statute that created them and they have to function within the limits imposed by it and to
act according to its provisions.94 Being judicial or quasi-judicial bodies, these tribunals are bound to serve notices upon the
parties to a reference. The service of such notices is essential and any award made without serving of such notices will be
fundamentally wrong.95 The nature of the functions of the industrial tribunals was considered by the Supreme Court in
Bharat Bank, in which Mukherjea J held that the functions and duties of an industrial tribunal are very much like those of
bodies discharging judicial functions, although it is not a court. Its powers in some respects are different and far wider
from those of an ordinary civil court. It has jurisdiction and power to give reliefs which a civil court, administering the law
of the land, does not possess in the discharge of its duties; for instance, ordering as a judicial body the reinstatement of a
discharged or dismissed workman.96 All the four judges who delivered their opinions touching upon the subject. After
consideration of the provisions of the Act, Kania CJI held that it seemed that ‘the tribunal is discharging functions very
near to those of a court, although it is not a court in the technical sense of the word’.97 Fazal Ali J precisely pointed out that
‘there can be no doubt that the industrial tribunal has, to use a well-known expression, “all the trappings of a court” and
performs functions which cannot but be regarded as judicial. This is evident from the rules by which the proceedings
before the tribunal are regulated’.98 Mahajan J elaborated:

The adjudication of the dispute has to be in accordance with evidence legally adduced and the parties have a right to be heard and
being represented by a legal practitioner... the industrial tribunal has all the necessary attributes of a court of justice. It has no other
function except that of adjudicating on a dispute. It is no doubt true that by reason of the nature of the dispute that they have to
adjudicate, the law gives them wider powers than are possessed by ordinary courts of law, but powers of such a nature do not affect
the question that they are exercising judicial power... that circumstance does not make them anything else but tribunals exercising
judicial power of the state, though in a degree different from the ordinary courts and to an extent which is also different from that

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enjoyed by an ordinary court of law.1

On the basis of the holding in Bharat Bank’s case, a Full Bench of the Gujarat High Court held that the labour courts,
industrial tribunals and national tribunals fall within the meaning of the word ‘court’ in s 10 of the Contempt of Courts Act
1971.2

PRESIDING OFFICER

Sub-section (2) lays down that the tribunal shall consist of one person only who is to be appointed by the government and
designated as ‘presiding officer’ of the tribunal.

QUALIFICATIONS OF THE PRESIDING OFFICER

Sub-section (3) prescribes qualifications for the appointment of presiding officers of industrial tribunals and lays down that
a person shall not be qualified for appointment as the presiding officer of a tribunal unless:

(a) he is, or has been, a judge of a High Court; or

(aa) he has, for a period of not less than three years, been a district judge or an additional district judge; or.

(b) he is or has been a Deputy Chief Labour Commissioner (Central) or Joint Commissioner of the State Labour
Department, having a degree in law and at least seven years’ experience in the labour department including three years
of experience as Conciliation Officer; or
(c) he is an officer of Indian Legal Service in Grade III with three years’ experience in the grade.

Note: Items (b) and (c) have been inserted in the year 2010, as indicated in the main section.

Section 7A(3) indicates that it is a person that can be appointed as a tribunal not an office.3Section 7C prescribes further
qualifications for such appointment, ie, (i) the person appointed must be an ‘independent person’, and (ii) he must not have
attained the age of 65 years. Thus, if a person appointed as presiding officer of an industrial tribunal does not satisfy the
requirements of s 7A(3) and s 7C, his appointment shall be invalid and he shall have no jurisdiction for the purposes of the
Act. For cl 2(aa) of the Central Act, the State of Haryana substituted its own cl 2(aa), which reads: “(aa) he is qualified for
appointment as, is or has been a district judge or an additional district judge or.” Pursuant to this clause, the State
Government appointed certain practising lawyers as presiding officers of the industrial tribunals and the labour courts who
had completed seven years practice as advocates. However, a district judge can be appointed by the State Government in
consultation with the High Court. A practising advocate can only be appointed as a district judge if he has been ‘for not
less than seven years an advocate or a pleader and is recommended by the High Court for appointment’. Thus, a lawyer,
even if he has completed seven years of practice at the bar, is not eligible for appointment as a district judge or additional
district judge unless he is ‘recommended by the High Court for appointment’. In other words, the requirement of seven
years’ practice at the bar and the recommendation by the High Court for the appointment are cumulative sine qua non for
appointment to the post of a district judge. In this view of law, a Full Bench of the Punjab and Haryana High Court in Tul-
Par Machine, quashed the appointment of the presiding officers of the industrial tribunals and the labour courts because
their appointment had not been recommended by the High Court. However, the court accepted the contention of the state
that merely because the appointments of the presiding officers of the tribunals and the labour courts had been quashed, this
would not ipso facto vitiate the awards rendered by them. The court, therefore, held that the offices of the presiding
officers of the tribunals and the labour courts did lawfully exist and even if the appointments of the incumbents thereto had
been set aside, the awards delivered by them under the colour of office would not be rendered inoperative on the basis of
the de facto doctrine.4

ASSESSORS

Sub-section (4) authorises the ‘appropriate government’, if it so thinks, to appoint two persons as assessors to advise the
tribunal in the proceedings before it. The assessors are usually appointed in cases involving technical or scientific details.
Rule 25 of the Industrial Disputes (Central) Rules 1957 prescribes that where assessors are appointed to advise a tribunal
or national tribunal under sub-s (4) of s 7A or sub-s (4) of s 7B or under sub-s (5) of s 11, the labour court, tribunal or
national tribunal, as the case may be, shall in relation to proceedings before it, obtain the advice of such assessors but such
advice shall not be binding on it. In National Iron and Steel Co, the Supreme Court observed that ‘for the determination of
technical matters, it is always desirable to have the assistance of persons who are familiar with the subject. No doubt, the
ultimate decision would rest with the tribunal but since the decision has to be based on proper material, it should not have

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denied to itself the opportunity of obtaining the appropriate material.5

74 Sections 7, 7A, 7B and 7C subs by Act 36 of 1956, s 4 for original s 7 (wef 10-3-1957).
75 Ins by Act 46 of 1982, s 4 (wef 21-8-1984).
76 Ins by Act 36 of 1964, s 4 (wef 19-12- 1964).
77 The word ‘or’ omitted by Act 46 of 1982, s 4 (wef 21-8-1984).
78 Ins by Act 24 of 2010, s 5 (wef 15-9-2010 vide S.O. 2278 (E), dated 15-9-2010). Earlier, cl (b) omitted by Act 46 of 1982, s 4 (wef
21-8-1984).
79 Hotel Kanishka v Delhi Administration 1995 Lab IC 2381, 2386 (Del), per Anil Dev Singh J.
80 LIC of India v All India Insurance Employees Assn 1989 Lab IC 1493 (Bom), per Sujata Manohar J.
81 Paulose v State of Kerala (1993) 2 LLJ 491 (Ker) : ILR 1993 (1) Ker 563 per Mathew J.
82 Cf, Minerva Mills Ltd v Workers (1954) 1 LLJ 119 [LNIND 1953 SC 82], 122 (SC), per Mahajan J.
83 JB Mangharam & Co v KB Kher AIR 1956 MB 183 (DB), per Dixit J.
84 G Claridge & Co Ltd v IT AIR 1951 Bom 100 [LNIND 1951 BOM 11], per Shah J.
85 Maharaja Shri Umaid Mills Ltd v IT AIR 1954 Raj 274 [LNIND 1954 RAJ 114], per Wanchoo CJ.
86 Minerva Mills Ltd v Workers (1954) 1 LLJ 119 [LNIND 1953 SC 82], 123 (SC) : AIR 1953 SC 505 [LNIND 1953 SC 172]:
[1954] 1 SCR 465 [LNIND 1953 SC 172], per Mahajan J.
87 Blue Star Engineering Co (Bom) Pvt Ltd v LC 1975 Lab IC 1171 (Del) (DB).
88 Fedders Lloyd Corpn Pvt Ltd v Lieutenant Governor, Delhi 1970 Lab IC 421 [LNIND 1969 DEL 112], 423-24 (Del) (DB).
89 Shellac Industries Ltd v Workmen (1967) 1 LLJ 492, 495 (Cal) (DB), per Dutt J.
90 G Claridge & Co Ltd v IT AIR 1951 Born 100, per Shah J.
91 State of Kerala v B Renjith Kumar AIR 2009 SC (supp) 465, per LS Panta J.
92 PSS Bommanna Chettiar Sons v LC 1973 Lab IC 882, 883 (Mad), per Ramaprasada Rao J.
93 Coromandal Fertilisers Ltd v State of AP (1988) 2 LLJ 390, 391 (AP), per K Ramaswamy J.
94 JK Iron & Steel Co Ltd v Iron & Steel Mazdoor Union (1956) 1 LLJ 227 [LNIND 1955 SC 119] (SC), per Bose J.
95 Indian Mining Assn v Koyla Mazdoor Panchayat 4 FJR 239 (LAT).
96 Bharat Bank Ltd v Employees (1950) I LLJ 921 (SC) : AIR 1950 SC 188 [LNIND 1950 SC 4]: [1950] 1 SCR459, per Mukherjea J.
97 Ibid, per Kania CJI.
98 Ibid, pp 922-23, per Fazal Ali J.
1 Ibid, p 932, per Mahajan J.
2 Shaikh M Hussainbhai v Chandrabhanu Cinema 1986 Lab IC 1749 (Guj) (FB).
3 Mgmt of Punjab National Bank Ltd v LC 1969 Lab IC 1574, 1579 (J&K), per IN Bhat J.
4 Tul-Par Machine & Tool Co v Joginder Pal 1983 Lab IC 1615, 1626 (P&H) (FB), per Sandhawalia CJ.
5 National Iron and Steel Co, Ltd v Workmen (1962) 2 LLJ 752 [LNIND 1962 SC 271], 757 (SC) : AIR 1963 SC 325 [LNIND 1962
SC 271]: [1963] 3 SCR 660 [LNIND 1962 SC 271], per Mudholkar J.

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The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER II Authorities under the Act

6[S. 7B. National Tribunals.—

(1) The Central Government may, by notification in the Official Gazette, constitute one or more national industrial
tribunals for the adjudication of industrial disputes which, in the opinion of the Central Government, involve
questions of national importance or are of such a nature that industrial establishments situated in more than one
State are likely to be interested in, or affected by, such disputes.
(2) A National Tribunal shall consist of one person only to be appointed by the Central Government.
(3) A person shall not be qualified for appointment as the presiding officer of a National Tribunal 7[unless he is, or
has been, a Judge of a High Courts’.]
(4) The Central Government may, if it so thinks fit, appoint two persons as assessors to advise the National Tribunal
in the proceeding before it.]

CONSTITUTION OF NATIONAL TRIBUNAL

The power to constitute national tribunals is only with the Central Government under s 7B. A national tribunal can he
constituted only for the adjudication of the ‘industrial disputes’ involving questions of national importance or the
‘industrial disputes’ in which industrial establishments situated in more than one state are likely to be interested or are
likely to be affected by. The reference to a national tribunal can be made only by the Central Government whether it is or
is not the appropriate government.8 Sub-section (6) of s 10 provides that when a reference of an industrial dispute under
sub-s (lA) of s 10 is made to a national tribunal, it is the national tribunal alone which will have jurisdiction to adjudicate
upon the dispute and any industrial tribunal or the labour court before whom the same dispute may be pending for
adjudication, shall cease to have jurisdiction to proceed further with the adjudication of the dispute.9Sub-section 7 of s 10
further provides that when a reference of an ‘industrial dispute’ is made to the national tribunal by the Central
Government,’ whether it is the ‘appropriate government’, or not, then notwithstanding anything contained in the Act, any
reference in ss 10, 17, 19, 33 A, 33B and 36A to the appropriate government, in relation to that dispute, shall be construed
as a reference to the Central Government.10 In Life Insurance Corpn of India (supra) a single judge of the Bombay High
Court held that in describing the nature of the dispute which may be referred to a national tribunal, the Act does not
provide that if a dispute is likely to affect industries in more than one state, the dispute may be referred to the national
tribunal. But this is a matter of discretion which the Central Government has to exercise in deciding whether or not to
constitute a national tribunal. The phrase ‘the Central Government may constitute’ in s 7B and the phrase ‘the Central
Government may refer’ in s 10(1) indicate that the Central Government has a discretionary power to constitute a national
tribunal in disputes, which in its opinion, are of the kind referred to in these sections and if it is of the view that such
disputes should be decided by a national tribunal. the Central Government, therefore, is not bound to constitute a national
tribunal for adjudication of such disputes. This view is debatable.

PRESIDING OFFICER

Sub-section 2 lays down that the national tribunal shall consist of one person only who is to be appointed by the Central
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Government and designated as its presiding officer.

QUALIFICATIONS OF THE PRESIDING OFFICER

This provision lays down that a person shall not be qualified for appointment as a presiding officer of the national tribunal
unless he is, or has been a judge of a High Court. The selection in case of national tribunal is more restricted. A national
tribunal can only be presided over by a person who is or has been a judge of a High Court. Section 7C also prescribes
further qualifications that the incumbent of the office of the presiding officer of a national tribunal should be an
‘independent person’ and also should not have attained the age of 65 years.11

ASSESSORS

Sub-section (4) authorises the Central Government, if it so thinks fit to appoint two persons as assessors to advise the
national tribunal in the proceedings before it. The assessors are usually appointed in cases involving technical or scientific
details. Rule 25 of the Industrial Disputes (Central) Rules 1957 prescribes that where assessors are appointed to advise a
National Tribunal under sub-s 4 of s 7B or under sub-s 5 of s 11, the national tribunal shall in relation to proceedings
before it, obtain the advice of such assessors but such advice shall not be binding on it.

6 Sections 7, 7A, 7B and 7C subs by Act 36 of 1956, s 4, for original s 7 (wef 10-3-1957).
7 Subs by Act 46 of 1982, s 5 (wef 21-8- 1984).
8 See, notes and comments under s 10(1A), post.
9 Ibid, s 10(6) post.
10 Ibid, s 10(7) post.
11 See, notes and comments under s 7C.

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The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER II Authorities under the Act

12[S.
7C. Disqualifications for the Presiding Officers of Labour Courts, Tribunals and
National Tribunals.—
No person shall be appointed to, or continue in, the office of the Presiding Officer of a Labour Court, Tribunal or National
Tribunal, if-

(a) he is not an independent person; or

(b) he has attained the age of sixty-five years.]

INDEPENDENT PERSON

The opening part of s 7C read with cl (a) prohibits the appointment of a person to, or continuance in, the office of the
presiding officer of a labour court, tribunal or national tribunal if he is not an ‘independent person’. According to cl (i) of s
2, a person shall be deemed to be an ‘independent’ person for the purposes of appointment as the chairman or other
member of a board of conciliation, court of inquiry or tribunal, if he is unconnected with the ‘industrial dispute’ referred to
such board, court, or tribunal or with any industry directly affected by such dispute. However, cl (a) of s 7C does not refer
to the appointment as chairman or the other members of a board or court of inquiry. Nor does it refer to an ‘industrial
dispute’ or any ‘industry affected’ by such dispute. On the other hand, it refers to the appointment of a person to the office
of ‘a presiding officer of a labour court, tribunal or national tribunal’. From a juxtaposition of these two provisions, the
definition of the expression ‘independent’ in cl (i) of s 2 does not appear to be adequate for the purposes of s 7C.
According to cl (i) of s 2, if a particular ‘industrial dispute’ has been referred to a conciliation board, or the court of
inquiry, or a tribunal, a person who is connected with that dispute or with any industry directly affected by that dispute
shall not be deemed to be an ‘independent person’ for the purpose of his appointment as a chairman or other member of
such bodies. It is understandable that if a labour court, tribunal or national tribunal is specifically constituted for
adjudication of a particular industrial dispute by construing the word ‘tribunal’ used in cl (i) of s 2 to mean ‘a labour court,
tribunal or national tribunal’, a person connected with such ‘industrial dispute’ or ‘any industry directly affected by such
dispute’ can be deemed not to be an ‘independent person’. Hence, his appointment as the presiding officer of such
‘tribunal’ can be deemed to be prohibited, furthermore, even if such a dispute is referred for adjudication to a body
presided over by such a person, he shall be prohibited from continuing in the office of the presiding officer.

But in practice, the labour courts, tribunals or national tribunals, are rarely constituted for adjudication of only one dispute.
A large number of industrial disputes are referred to such bodies. At the time of the appointment of an incumbent, he
would not know as to what disputes are pending before the tribunal or what disputes are likely to be referred to. If, after his
appointment as presiding officer of a ‘tribunal’, the incumbent comes to know that he is connected with a particular
industrial dispute or with any industry directly affected by such dispute or such dispute is referred to the tribunal after his
appointment, he will not be an ‘independent’ person qua such dispute alone. However, this will not vitiate his appointment
as the presiding officer of the tribunal. The government has the power to transfer such a dispute from that tribunal to
another tribunal under s 33B. From the language of s 7C it appears that lack of ‘independence’ in a person not only
disqualifies him from being appointed to the office of the presiding officer of a labour court, tribunal or national tribunal,
but it also disqualifies him from continuing in such office. The expression ‘independent person’ used in s 7C therefore,
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appears to be much wider in scope than ‘independent person’ defined in cl (i) of s 2. However, for the purposes of s 7C, an
‘independent person’ having not been defined in the Act, it is not clear as to when a person can be treated to be not an
‘independent’ person which will disqualify him from being appointed to the office of the presiding officer of a labour court
or industrial tribunal or national tribunal or to continue in such office. The appointment of retired High Courts judges or
retired district judges for short terms makes them dependent upon the Government for their extension. This practice
debases the freedom of the industrial adjudication hence it requires serious consideration by the Parliament to make such
adjudicators really ‘independent’ persons.

AGE OF THE PRESIDING OFFICER

The second disqualification is with respect to the age of presiding officer. A person cannot be appointed to or continue in
the office of the presiding officer of a labour court, tribunal or national tribunal after he has attained the age of sixty-five
years. Some states have, however, extended this age limit as, for example, Punjab which extended the age limit up to 67
years.13The insertion of age disqualification in s 7C, only prescribes the age of retirement. Section 7A (3) (a) provides for
the appointment of a High Court judge (sitting or retired) as presiding officer of an industrial tribunal. Age is clearly not a
qualification under this sub-clause as the age for retirement for a judge of a High Court is 62 years. Likewise, cl (aa)
provides for the appointment of a district judge or an additional district judge, sitting or retired, as presiding officer of a
tribunal. Accordingly, a retired district judge or additional district judge who is aged over 62 will be eligible for
appointment under this sub-clause. Thus, the age of a person does not enter into his qualifications under sub-cll (a), (aa)
and (b) of s 7A (3). Further, the insertion of the age qualification in s 7C of the Act, is more consistent with the intention of
the legislature to add a new provision prescribing the age of retirement for the presiding officer.14 Hence, the qualification
on the basis of age cannot be imported into s 7A (3) of the Act by drawing an inference from the provisions of s 7C of the
Act. Where an additional district judge, belonging to the Haryana Superior Judicial Service was transferred and posted as
presiding officer, industrial tribunal-cum-labour court, claimed that he should be allowed to continue as presiding Officer
till he completes 67 years as provided under s 7C of the ID Act (as amended by the Government of Punjab), the Supreme
Court repelled the contention and held that, in the absence of termination of lien from the cadre of Haryana Superior
Judicial Service, he continued to be governed by the r 19 of Punjab Superior Judicial Service Rules (as applicable to the
State of Haryana) in terms of which, the age of superannuation was 60 years, and not 67 years under the amended s 7C of
the ID Act.15

12 Sections 7, 7A, 7B and 7C subs by Act 36 of 1956, s 4, for original s 7 (wef 10-3-1957).
13 Vide, Punjab Act 8 of 1957, s 3 (wef 3-6-1957).
14 Cf, Atlas Cycle Industries Ltd v Workmen (1962) 1 LLJ 250 [LNIND 1962 SC 61], 256 (SC), per Venkatarama Ayyar J.
15 BS Sharma v State of Haryana (2001) 1 LLN 858 (SC).

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O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER II Authorities under the Act

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER II Authorities under the Act

16[S. 8. Filling of Vacancies.—

If, for any reason a vacancy (other than a temporary absence) occurs in the office of the presiding officer of a Labour
Court, Tribunal or National Tribunal or in the office of the chairman or any other member of a Board or court, then, in the
case of a National Tribunal, the Central Government and in any other case, the appropriate government, shall appoint
another person in accordance with the provisions of this Act to fill the vacancy, and the proceeding may be continued
before the labour court, tribunal, national tribunal, board or court, as the case may be, from the stage at which the vacancy
is filled].

LEGISLATION

Section 10 of the repealed Trade Dispute Act 1929 made a similar provision. Section 8 of the Industrial Disputes Act 1947
as originally enacted, made provision for ‘filling of vacancies’, which was subsequently substituted by s 4 of the Industrial
Disputes (Amendment & Miscellaneous Provisions) Act 1951 (Act 40 of 1951). That provision was again substituted by
the present section by virtue of s 5 of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act 1956 (Act
36 of 1956).

FILLING OF VACANCIES

When for any reason, a vacancy occurs in the office of the presiding officer of a labour court, tribunal or national tribunal
or in the office of the chairman or any other member of the board or court; the Central Government in case of the national
tribunal and in any other case, the ‘appropriate government’, shall appoint another person to fill in the vacancy so caused.
The vacancy can be filled in by taking into consideration the provisions of this Act. In other words, the incumbent
appointed to fill in the vacancy must satisfy the requirements of s 7A or s 7B, as the case may be, and also s 7C in any
case. The appointment then shall be governed by the provision of s 9. Normally, a vacancy in the office of the presiding
officer of the bodies enumerated in this section would occur when the presiding officer dies, retires, resigns or otherwise
becomes disqualified under s 7C. It may also happen that a person appointed as the presiding officer under s 7, s 7A or s
7B may have been appointed under a misapprehension of his qualifications. If, in such a case, it is found that he, in fact,
did not possess the requisite qualifications, his appointment would be void ab initio.17 The office of the presiding officer
would, therefore, be treated as vacant ab initio. Further, if a person was disqualified under s 7C, his appointment will also
be void ab initio. But if a person becomes disqualified under s 7C, after his valid appointment, his continuance in the office
from the time of his becoming so disqualified, becomes void. The words ‘for any reason’ have been advisedly used by the
legislature with a view to take in all sorts of contingencies under which a vacancy may occur in the office of the presiding
officers of the adjudicatory bodies mentioned in the section. It is however, only when a vacancy occurs that the
government can proceed under s 8. But otherwise, after reference having been made, the appropriate government has no
longer power to interfere with its proceedings except to the extent of exercising such powers as have been expressly
granted to it.18For instance, the government has power to transfer a dispute from one tribunal to another under s 33B and s
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8 does not control s 33B of the Act.19 The power under s 33B of the Act, however, can be exercised only for sufficient
reasons.20

Before the amendment of s 8 by the amending Act of 1956, it was not clear whether the expression ‘vacancy’ used therein
referred to a permanent vacancy or a temporary one as well. On the construction of the unamended section in United
Commercial Bank, speaking for a majority, Kania CJI discussed the question as to when a vacancy could be said to have
arisen and when it could not be said to have arisen due to temporary absence of a member of the tribunal. In this case, one
of the members of the Industrial Tribunal was appointed as a whole-time member of another tribunal and it was not known
how long he would continue to do the duties in the boundary tribunal. In these circumstances, the absence of a member
from the industrial tribunal, was held not to be a temporary vacancy. It was, therefore, held that a vacancy within the
meaning of s 8 had arisen. This view has been given legislative recognition in amended s 8 by the Amending Act of 1956.
A temporary absence of the presiding officer, chairman or any other member of any of the bodies mentioned in the section,
does not give rise to a ‘vacancy’ in his office within the meaning of s 8 of the Act. Hence, there is no question of any
appointment being made in his place to fill in the vacancy. After the vacancy has been filled, the new incumbent becomes
the presiding officer of the body to which he is appointed and the proceedings may be continued from the stage at which
they were left. In other words, it will not be necessary to start the proceedings from the beginning before that person.21 In
Fedders Lloyd, the facts were: the appropriate government made an order purporting to be under s 8 appointing a person as
the presiding officer of the labour court, Delhi while the permanent incumbent proceeded on leave for a few weeks. The
appointment was quashed by the Delhi High Court holding that the order could not be regarded as under s 8, because the
absence of the permanent presiding officer was obviously a temporary absence. The court observed:

The reason for insertion of the words ‘other than a temporary absence’ after the word ‘vacancy’ in section 8 ...was to clarify that a
vacancy must be a permanent one and is not caused by the temporary absence of the presiding officer ... For, when a vacancy is
filled under section 8 of the Act, proceeding is continued from the stage at which the vacancy is filled. The intention obviously is
to make a permanent arrangement necessitated by the occurrence of a permanent vacancy. 22

The appointment could not even be sustained under s 7 as there could not be two presiding officers of the same labour
court. Section 7 contemplates Constitution of the labour court which in the circumstances of the case was not permissible.
Though the appointment of the temporary incumbent was annulled, the High Court in a subsequent decision viz, Blue Star
Engg, held that a reference made to the labour court while it was presided over by a temporary incumbent was not invalid
because the annulment of the appointment of the temporary incumbent as the presiding officer in the temporary absence of
the permanent incumbent did not affect the validity of the order of reference.23 Though, s 8 speaks of the appointment of a
person to fill in the vacancy occurred in the office of the presiding officer of a labour court, tribunal or national tribunal
etc, it does not say that such appointment is to be made by a Gazette Notification. But r 5 of the Industrial Disputes
(Central) Rules 1957 requires that the names of the persons constituting such bodies shall be notified in the Official
Gazette. In view of the fact that r 5 of the Industrial Disputes (Bihar) Rules 1961 refer to the appointment of persons to
preside over the ‘Board, Court or Tribunal’... and omitted the words ‘Labour Court’, the Patna High Court held that while
filling in the vacancy of the presiding officer of a labour court under s 8, it was not necessary to make the appointment of
such presiding

16 Subs by Act 36 of 1956, s 5, for s 8 (wef 10-3-1957).

17 Haryana Co-op Transport Ltd v State of Punjab (1970) 1 LLJ 611 (P&H) (DB), per Shamsher Bahadur J.
18 Harendranath Bose v Second IT (1958) 2 LLJ 198 [LNIND 1957 CAL 193] (Cal), per Sinha J.
19 Sur Enamel & Stamping Works Pvt Ltd v State of WB 1968 Lab IC 257, 258 (Cal), per BN Banerjee J.
20 Associated Electrical Industries (India) Pvt Ltd v Workmen (1961) 2 LLJ 122 [LNIND 1960 SC 59] (SC), per Gajendragadkar J.
21 United Commercial Bank Ltd v Workmen (1951) 1 LLJ 621 [LNIND 1951 SC 26] (SC) : AIR 1951 SC 230 [LNIND 1951 SC 26]:
[1951] 2 SCR 380 [LNIND 1951 SC 26], per Kania CJI.
22 Fedders Lloyd Corpn Pvt Ltd v Lt Governor, Delhi 1970 Lab IC 421 [LNIND 1969 DEL 112],423-24 (Del) (DB).
23 Blue Star Engineering Co (Bom) Pvt Ltd v LC 1975 Lab IC 1171 (Del) (DB).

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O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER II Authorities under the Act

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER II Authorities under the Act

24[S. 9. Finality of orders constituting Boards, etc.—

(1) No order of officer by a Gazette Notification.25 the appropriate government or of the Central Government
appointing any person as the chairman or any other member of a board or court or as the presiding officer of a
labour court, tribunal or national tribunal shall be called in question in any manner; and no act or proceeding
before any board or court shall be called in question in any manner on the ground merely of the existence of any
vacancy in, or defect in the Constitution of, such board or court.
(2) No settlement arrived at in the course of a conciliation proceeding shall be invalid by reason only of the fact that
such settlement was arrived at after the expiry of the period referred to in sub-section (6) of section 12 or sub-
section (5) of section 13, as the case may be.
(3) Where the report of any settlement arrived at in the course of conciliation proceeding before a board is signed by
the chairman and all the other members of the board, no such settlement shall be invalid by reason only of the
casual or unforeseen absence of any of the members (including the chairman) of the board during any stage of the
proceeding.]

LEGISLATION

An analogous provision was contained in s 8 of the repealed Trade Disputes Act 1929. The Industrial Disputes Act 1947
(as originally enacted) contained s 9 in a simpler form making provision for the finality of orders constituting the boards.
On the construction of the unamended s 9, in United Commercial Bank(supra), Kania CJI held that the award of the All-
India Industrial Tribunal (Bank Disputes) was void on the ground of defect in the Constitution of the tribunal.
Consequently, an amendment was brought about by the Industrial Disputes (Amendment and Miscellaneous Provisions)
Act 1956, by virtue of s 5 of which, the present s 9 was substituted for the old one. It may be noticed that the first part of
the section refers to the appointment of any person as the chairman or any other member of board or court or as the
presiding officer of a labour court, tribunal or national tribunal. The second part deals with a board or court which means a
‘board’ as defined in s 2(c) and the court of inquiry as defined in s 2(f) of the Act.26

SUB-SECTION (1)

(i) Finality of Appointments and Proceedings

The jurisdiction of civil courts is barred by the use of the words ‘in any manner’ in this sub-section.27In other words, the
orders of the ‘appropriate government’ appointing the officers mentioned in this sub-section cannot be questioned before
civil courts for obtaining decrees invalidating such appointments, on the grounds of illegality or otherwise of such
appointments. Further, any act or proceeding before any board or court has also been saved from being questioned in civil
courts on the mere ground of (a) a vacancy, or (b) a defect in the Constitution of a board or court.

(ii) Jurisdiction of High Court under Article 226 of the Constitution

The bar of sub-s (1) of s 9 relates only to the jurisdiction of the civil courts, it is only the civil courts which would be
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precluded from entertaining the disputes regarding the validity of the appointment and the proceedings of the presiding
officers of the labour courts.28 The power of the High Courts under Art. 226 of the Constitution to issue directions, orders
or writs cannot be disputed where the tribunal is not duly constituted or is acting without jurisdiction,29 and the powers of
certiorari and quo warranto under plenary powers of Art. 226 of the Constitution give ample authority to the writ court to
grant the necessary relief to an aggrieved party.30Neither the Parliament nor the State Legislature can take away the right
conferred on the High Courts under Art. 226 of the Constitution. Such right can only be abridged by an amendment of the
Constitution. Hence, the Industrial Disputes Act, even though it may be very widely worded, cannot take away the
jurisdiction of the High Court under Art. 226 of the Constitution. It is, therefore, open to a High Court in its writ
jurisdiction to consider the validity of the appointment of any person as the chairman or any other member of a board or
the court or the presiding officer of a labour court, tribunal or national tribunal. The provision, therefore, cannot shut out an
inquiry for the purposes of a writ of quo warranto, if there is a clear usurpation of the office.31 Once it is determined that
the tribunal has no jurisdiction, it can be prohibited by a writ of prohibition. A writ of quo warranto, can be issued if the
qualifications prescribed for the appointment of presiding officers are not satisfied or any of the disqualifications
prescribed by s 7C is found or comes into existence, ie, the officer crosses the age limit or no longer remains an
‘independent person’ within the meaning of s 2(i). The legislature cannot take away the powers of the High Court given to
it by Art. 226 of the Constitution.32

FINALITY OF SETTLEMENTS

Sub-s (2) makes provision that a settlement arrived at after the period provided in ss 12(6) and 13(5), shall not be invalid.
Thus, if conciliation proceedings are continued after the period of 14 days or less as may be fixed by the government
before a conciliation officer, or proceedings before a board are continued beyond the period of two months or less as fixed
by the government, any settlement arrived at as a result of such proceeding, has been saved by this provision and it shall be
valid and binding in spite of the fact that such settlement was arrived at after the prescribed period.

CASUAL ABSENCE OF A MEMBER OF THE BOARD DOES NOT INVALIDATE A SETTLEMENT

Sub-section (3) makes provision that any settlement shall not be invalid only by reason of the casual or unforeseen absence
of any member or the chairman of a board during any stage of the proceeding, where the report of any settlement is signed
by the chairman and all the other members of the board.

24 Subs by Act 36 of 1956, s 5, for s 9 (wef 10-3-1957).

25 Sri Veena Chandra v Mgmt. of Vishwamitra Press 1977 Lab IC 1490, 1496 (Pat) (DB), per LM Sharma J.
26 Statesman Pvt Ltd v HR Deb 1968 Lab IC 1525 (SC), per Hidayatullah CJI.
27 Mewar Textile Mills Ltd v IT AIR 1951 Raj 161 [LNIND 1951 RAJ 6], per Wanchoo CJ.
28 Haryana Coop Transport Ltd v State of Punjab (1970) 1 LLJ 611 (P&H) (DB), per Shamsher Bahadur J.
29 Mewar Textile Mills Ltd v IT AIR 1951 Raj 161, per Wanchoo CJ.
30 Harayana Coop Transport Ltd v State of Punjab (1970) 1 LLJ 611 (P&H) (DB), per Shamsher Bahadur J.
31 Statesman Pvt Ltd v HR Deb 1968 Lab IC 1525 (SC), per Hidayatullah CJI.
32 Lila Vati Bai v State of Bombay AIR 1957 SC 521 [LNIND 1957 SC 25], per Sinha J.

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O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER IIA Notice of Change

The Industrial Disputes Act, 1947 (Act 14 of 1947)

1CHAPTER IIA Notice of Change

S. 9A. Notice of Change.—

No employer, who proposes to effect any change in the conditions of service applicable to any workman in respect of any
matter specified in the Fourth Schedule, shall effect such change,—

(a) without giving to the workmen likely to be affected by such change a notice in the prescribed manner of the
nature of the change proposed to be effected; or
(b) within twenty-one days of giving such notice:

Provided that no notice shall be required for effecting any such change—

(a) where the change is effected in pursuance of any 2[settlement or award]; or

(b) where the workmen likely to be affected by the change are persons to whom the Fundamental and
Supplementary Rules, Civil Services (Classification, Control and Appeal) Rules, Civil Services (Temporary
Service) Rules, Revised Leave Rules, Civil Services Regulations, Civilians in Defence Services
(Classification,. Control and Appeal) Rules or the Indian Railway Establishment Code or any other rules or
regulations that may be notified in this behalf by the appropriate government in the Official Gazette, apply.

LEGISLATION

There was no provision in the repealed Trade Disputes Act 1929 or in the Industrial Disputes Act of 1947, providing for
‘notice of change’. As a result of persistent demand that ‘notice of change’ should be given, whenever it is proposed to
make any change in the conditions of service of workmen, the new chapter, i.e., Chapter 2A consisting of ss 9A and 9B
was inserted by s 6 of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act 1956, with effect from 10
March 1957. The effect of s 9A is that the employer shall not introduce any change in respect of matters specified in the
Fourth Schedule, without giving to the workmen likely to be affected by such change, a notice of the nature of the change.
It is further enjoined upon the employer not to effect the proposed change within twenty-one days of giving of the notice.

OBJECT AND SCOPE

The object of this section is to prevent a unilateral action on the part of the employer changing the conditions of service to
the prejudice of the workmen.3 The real purpose of enacting this provision is ‘to afford an opportunity to the workmen to
consider the effect of the proposed change and, if necessary, to present their point of view on the proposal’ and such
consultation would further serve to stimulate a feeling of common joint interest of the management and workmen in the
industrial progress and increase productivity.4 In other words, s 9A was enacted with a view to protect the interests of
workmen who may be affected by a proposed change by the employer. This section is a mandatory provision.5 Therefore,
any change made in the conditions of service applicable to any workman in respect of any matters specified in the Sch 4,
without complying with the requirements of this section shall be a nullity and void ab initio and as such inoperative in
law.6 As soon as the employer proposes a change in the conditions of service applicable to any workman, the provisions of
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this section are attracted and the employer has to give the notice under this section to the workman.7 The legislature has
contemplated three stages in making provision for the notice of change under s 9A. The first stage is the proposal by the
employer to effect a change; the second stage is the time when he gives a notice and the third stage when he effects the
change on the expiry of 21 days from the date of the notice. The conditions of service do not stand changed, either when
the proposal is made or the notice is given but they are affected only when the change is actually made, i.e., when the new
conditions of service are actually introduced.8 The employer is under no obligation to await a reference which could be
made at the instance of the workers before implementing the proposals contained in the notice.9This section provides for
procedure for alteration of conditions of service with respect to matters specified in the Fourth Schedule when there is no
industrial dispute or conciliation proceedings pending. There is no provision in the Act prohibiting the management from
altering the conditions of service after following the procedure prescribed thereunder. Once the management complies with
the express provisions of the Act, it cannot be said to owe a public duty or statutory duty to await a reference by the
workmen to challenge the proposals contained in the notice under s 9A of the Act.

NOTICE

(i) Change in Condition of Service

Section 9A requires an employer who proposes to effect any change in the conditions of service applicable to any
workman in respect of any matter specified in the Sch 4, to give to the workmen likely to be affected by such change, a
notice in the prescribed manner of the nature of the change proposed to be effected, before effecting such change. Rule 34
of the Industrial Disputes (Central) Rules 1957, prescribes the procedure for giving such a notice. The notice is to be given
in form ‘E’. The provisions of this section are mandatory and they are enacted for protecting the interests of the workmen
likely to be affected by the proposed change,10 and prohibit an employer from giving effect to any change in the conditions
of service applicable to any workman in respect of any matter specified in the Fourth Schedule without giving to the
workman likely to be affected, by such change, a notice in the prescribed manner of the nature of the change proposed to
be effected. Further, the employer is enjoined not to effect the proposed change within 21 days of the notice.11 For
attracting the provisions of this section, firstly, there should be a change in the conditions of service and secondly, such
change should be related only to the conditions of service enumerated in the Fourth Schedule.12 For instance, where the
services of some conductors were terminated being surplus as a result of rationalisation and standardisation effected by the
corporation, such rationalisation fell under item 10 of the Sch 4 and it could not be given effect to without giving the notice
required under s 9A of the Act. Mere withdrawal of a privilege will not amount to a change in service conditions until such
privilege having been allowed to be enjoyed by the employees over a long stretch of time, as a matter of custom or usage
and has, in effect, become an accepted condition of service.13

In Calcutta Electricity Supply, the employer-company had a scheme of giving medical benefits to its employees which was
withdrawn after coming into operation of the Employees’ State Insurance Act 1948 (ESI Act) on the ground that the
medical benefits under the Act were more generous. The employees disputed this decision ofthe management on the
ground of contravention of the provision of s 9A of the Act. The industrial tribunal held that the change effected by the
management was in contravention of s 9A because it was not entitled to withdraw the medical benefits which were already
in existence before the Act came into force. In appeal against the award of the tribunal, the Supreme Court held that the
contention of the employer that the benefits available under the ESI Act were more beneficial was factually not correct.
Apart from that, the court further held that there was nothing in the ESI Act or the regulations framed thereunder which
enables the employer to withdraw the pre-existing benefits merely because the employees came to be covered under that
Act.14 In SBI Staff Union, under the regulation framed by the bank, a member of the award staff (clerical) was given the
right to contest elections to the state assemblies and local bodies subject to certain conditions contained in a circular.
Subsequently, the bank sought to withdraw this right which was contested by the staff union of the bank. The Andhra
Pradesh High Court held that the withdrawal of this concession to contest the elections was not only infringement of
provisions of s 9A but also was violative of the rules of natural justice.15

In Coal India, the facts were: The company has a number of establishments. In some establishments, they observe a five-
days’ week and in others, a six-days’ week. Some workmen posted at the establishments observing five-days’ week
requested the management to post them at establishments observing six-days’ week. After having been so posted, they
claimed that the management had violated s 9A by effecting a change without notice, as required by that section. A single
judge of the High Court held that there was no breach of s 9A, firstly because the workmen had not denied the averment of
the management that security personnel are required to work six-days in a week for eight hours daily and, secondly, that
the workmen had got transferred to those establishments on their own request.16 This section relates to a change proposed
in the conditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule. It is
doubtful whether this is attracted when the service itself has changed instead of there being a change proposed or brought
about in the conditions of service to which the workman belongs. So long as the workman is in service, there may be no
change in the conditions thereof in respect of any matter specified in the Fourth Schedule without the requisite formalities,

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including notice to the workman being gone into. But where there is a cessation of the service itself and the workmen are
absorbed differently, it does not appear that it would-also be a case covered under s 9A. For instance, in Ordnance
Parachute Factory, the workmen working as tailors ‘C’ in the ordnance factory agreed to choose to work as labour ‘B’
under the apprehension of retrenchment. A single judge of the Allahabad High Court held that though the workmen
continued to be in the employment of the same employer but the employment was not the same. Therefore, the absorption
of the workmen as labour ‘B’ did not require notice as contemplated by s 9A. Furthermore, since the change was brought
about with the volition of the workmen, it was not necessary to give the notice.17 The opening words of this section
indicate that the requirement of notice would apply, if an employer proposes to effect changes in conditions of service and
not to a case where certain conditions of service become applicable to the employees by operation of law.18 In other words,
the change contemplated by this section is one which the employer has volition to make or not to make. Where an
employer is compelled to give effect to any statutory rule or order which brings about change in the terms of employment,
such change would not fall within the ambit of this section.19

A change which is not related to any of the conditions of service enumerated in the Fourth Schedule will not attract s 9A.
For instance, in Robert D’Souza, it has been held that retrenchment is not covered under any item of the Fourth Schedule.
Hence, it cannot be said to be a change in the conditions of service of a workman.20 Likewise, in Sur Iron and Steel, a
change of weekly off-days from Sunday to Saturday on account of some restrictions being imposed on the use of
electricity by the State Government, was held to be outside the ambit of the Fourth Schedule. The Supreme Court observed
that s 9A applies only to matters enumerated in the Fourth Schedule to the Act and there is no specific entry in that
Schedule which would cover a condition of service relating to weekly off-days.21 Though, the decision is not entirely based
on this view, there is a clear indication in the judgment that the alteration did not attract the provisions of s 9A.22 In Tata
Iron and Steel, the weekly off-days were temporarily changed from Sunday to Wednesday in one colliery of the employer
company and to Thursday in the other, on account of shortage of power supply. In view of the emergency of the situation,
a notice as contemplated by s 9A was not possible. Despite this fact, the court held that the items 4, 5 and 8 of the Fourth
Schedule, viz, ‘hours of work and rest intervals’; ‘leave with wages and holidays’ and ‘withdrawal of customary
concession or privilege or change in usage’, was wide enough to cover the weekly off-days, and thus s 9A was attracted.23
The concept of ‘weekly days of rest’ as contemplated by s 28 of the Mines Act is altogether different from the items
envisaged in the Fourth Schedule. Nor can a temporary change as an emergency measure fall within the ambit of the
expression ‘withdrawal of any customary concession or privilege’ on any canons of statutory construction. The effect of
this decision is that even for a temporary change in emergency circumstances, a notice under s 9A would be required,
despite the fact that there may not be sufficient time for giving such notice in the circumstances of a given case. This will
not only result in a great deal of hardship to the employers resulting in loss and exposing them to penal consequences
under the Act, but will also encourage indiscipline and disharmony in industry.24 The reasoning of the court on all the three
points is unsound and lacks adequate perceptions of the statutory provisions and the principles of industrial jurisprudence.

In Assam Match Co, the court considered both the above cases. In this case, the question was whether the employer had
contravened s 9A of the Act, when on the request of the majority of the workers, the holiday for Diwali was changed from
a particular day to the next day. Referring to item No 5 of the Fourth Schedule, which deals with ‘leave with wages and
holidays’, the court said, ‘prima facie, if a holiday has been fixed, the management may not have power to totally cancel
the same or deprive the workman of such a holiday without confirming to the provisions of s 9A. But on the facts of the
case, it held that the change in question could not be considered to be an alteration in the conditions of service. The court
observed that if a large body of workmen required change of the day of the holiday on the ground that the festival is not
being observed on the day originally fixed and the management changes the date, it could not be stated that there was an
alteration in the conditions of service because the workmen were not at all deprived of the holiday for Diwali which, in
fact, they got on the next day.25Tata Iron and Steel Co’s case was explained as confined to its peculiar circumstances and
the court avoided to go into the correctness of that decision probably because it was not canvassed. The court noticed the
clear conflict in the earlier two dicta and instead of resolving the conflict and laying down what would be the correct
approach, it restricted itself to deciding the matter before it on the special facts of that case, but subsequently, in a case
relating to a public sector undertaking, ie, ONGC, the court adopted altogether different norms and process of reasoning, in
holding that the change (in the working hours of the staff, from 6½ to 8 hours in the administrative office of the Natural
Gas Commission at Baroda, did not attract the provisions of s 9A, because it was not a change of the nature contemplated
by the Fourth Schedule of the Act.26 It is not possible to reconcile the rationale of this decision with the ratio of Tata Iron
and Steel Co. It is difficult to understand that if even the temporary change-a purely emergency measure as in Tata Iron
and Steel Co fell within items 4, 5 and 8 of the Fourth Schedule, why, on the unequivocal language of the statute, the
change in the working hours in Oil and Natural Gas Commission should not fall within the ambit of item 4? It is rather
surprising that in the latter case, the court altogether omitted to refer to its earlier decision though the judgments in both the
cases were delivered by the same judge. In Hindustan Lever, the Supreme Court held that the reorganisation of the
business of the employer company from three into two departments will not fall within the perimeter of items 8, 10 and 11
of the Fourth Schedule of the Act, on the facts of the case, because the word ‘affected’ used in the expression ‘workman
likely to be affected by such change’, in s 9A(a) would mean that the workers should be ‘adversely affected’ by such

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change. Hence, unless the workers are adversely affected by the change in question, it will not fall within the mischief of s
9A. Since the workmen, in fact, were not adversely affected by the change brought about by the reorganisation in question,
the provision of s 9A were not attracted. While reviewing its earlier decisions, the court contented itself with the following
observation:

A close scrutiny of various decisions would show that whether any particular practice or allowance or concession had become a
condition of service would always depend upon the facts and circumstances of each case and no rule applicable to all cases could
be culled out from these decisions. 27

Little effort appears to have been made to reconcile the ratio decidendi of these cases. Particularly, the conflict in the ratio
of Tata Iron and Steel on the one hand and the Sur Iron and Steel and ONGC on the other, has neither been clearly
comprehended nor resolved. In Tata Iron and Steel, the change being of a temporary nature and an emergency measure had
no adverse effect on the workmen while in ONGC, the change was clearly of adverse nature in changing the working hours
from 6½ to 8 hours. Though, the court took the view that the change caused by the reorganisation would not attract the
provisions of s 9A, it held that the non-payment of wages to the workmen for a particular period on their refusal to do the
work according to the reorganised scheme, constituted an ‘alteration of the conditions of service of the workers’, hence
notice of reorganisation under s 9A was required. It is rather strange that in one breath the court said that since the
reorganisation did not adversely affect the workers, the notice was not required, while in the next, it said that the failure to
give the notice of the scheme of reorganisation resulting in ‘alteration of condition of service’ invalidated the
reorganisation. In taking this view, in this case, the court again appears to have been weighed by the consideration that the
workmen will lose wages for the period for which they had refused to work, otherwise no logic, to justify these
contradictory stands, is discernible. Even if the facts before the two tribunals were different, on consolidation of the
appeals, the entire gamut of the facts was before the court. In the earlier part of the judgment, the court said that the change
on account of reorganisation would not fall under items 8, 10 and 11 of the Fourth Schedule but in the later part, it has not
indicated as to under what item it would fall. Presumably, it may be referable to item 1. But neither the construction of
item 1, nor the ratio of North Brook Jute Co on which reliance seems to have been placed, would warrant this view. The
picture of law emerging out of these decisions is completely blurred; therefore the law requires restatement. In Indian Oil
Corpn, the employer company had withdrawn a compensatory allowance payable to its workmen on the line of such
allowance previously introduced by the Central Government posted throughout Assam as it thought that the rule of the
Central Government was not binding on it. This allowance was withdrawn unilaterally, without giving any notice to the
workers. It was held that the compensatory allowance was undoubtedly an implied condition of service so as to attract the
mandatory provisions of s 9A.28 In Food Corpn of India, the court held that by cancelling the direct payment system and
introducing the contractor, both the wages and mode of payment were altered within the meaning of item 1 of the Fourth
Schedule. Hence, notice of change was required for introducing the change.29 A single Judge of the Bombay High Court,
after referring to the decisions of the Supreme Court in Sur Iron & Steel, Tata Iron & Steel and Assam Match cases,
opined:

These decisions do not lay down any consistent principle of law...proper conclusion to be arrived at would depend upon the facts of
each case; and, therefore, a change which might bring in its wake the requirements of section 9A in one case, would not necessarily
bring the same result in another situation.30

In this case, 22 November 1970 was the normal weekly off-day and 24 November 1970 was to be observed as bandh day.
Considering the inadvisability of working the factory on the day of the proposed bandh, the employers decided to keep the
factory closed on bandh day and, in its place, work on the normal weekly off, i.e., 22 November 1970. Accordingly, a
notice was displayed on the notice board, which stated that 24 November would be treated as the weekly off-day in lieu of
22 November which would be treated as a working day. The short question for consideration was, whether the action of the
company in displaying the notice on the notice board changing the weekly off-day was violative of the provisions of s 9A.
The court held that it would be difficult on the facts of the case to bring the matter within the entry 4 or entry 8 of the
Fourth Schedule. Working at the matter from any reasonable angle and considering an isolated change as an exception for
one occasion and not a permanent one, the change was not considered to be such a change as would materially and
adversely affected the workmen. Hence, the provisions of s 9A were not attracted. The Madras High Court held that the
exclusion of a trade union, which has not acquired the status of a recognised union under the code of discipline, from the
category of unions which could negotiate with the management, will not amount to a change in the conditions of service.
Such exclusion would not come within the mischief of s 9A of the Act. Nor would it constitute withdrawal of any
customary concession or privilege or change in usage within the meaning of item 8 of the Fourth Schedule.31

In CI Kannan, a single judge of the Madras High Court held that the object of this provision is that conditions of service in

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force at the time when a workman entered service could not be changed to his prejudice without giving notice to him. The
prohibition of s 9A is with regard to the change in the conditions of service applicable to any workman and it does not
appear to be applicable to regulations relating to the conditions of service which were brought into force for the first time
unless it could be shown that since the employees entered the service, the conditions of service have been changed by the
regulations which were brought into force for the first time. Referring to item 9 in the Fourth Schedule, the High Court
said that the introduction of the new rules of discipline would only mean introduction of certain rules of discipline which
were not applicable to the employees on the date of their employment and would not relate to the rules that were framed
for the first time.32 Mere change in the channel of promotion does not tantamount to increase or reduction in the number of
persons employed within the meaning of item 11 of the Fourth Schedule. Therefore, the provisions of s 9A are not
attracted.33 In Hindustan Shipyard, the employer granted concession to the workmen due to war time emergency to attend
office half an hour late with the reservation of the right to change the office hours at any time. In these circumstances, it
was held that the workmen having agreed to the reservation by the employer to alter the working hours, made the right to
alter the working hours also a condition of service and, therefore, the action in accordance with the said right was not hit
by the provisions of s 9A.34 In Shalimar Paints, a single judge of the Calcutta High Court held that shifting the venue of
business of the employer from one place to another does not constitute ‘transfer’ and as such will not constitute a change in
the conditions of service within the meaning of s 9A, because the employer has an inherent right to change his place of
business.35 This view is not free from doubt. The change of place of business may not constitute transfer from one place of
business to another but change of place of business will obviously constitute a change in the conditions of service of the
workmen who were accustomed to work in the place of their original employment and would fall within the ambit of the
expression ‘change in usage’ as used in item 8 of the Fourth Schedule.

In Navbharat Hindi Daily, the Bombay High Court held that the retrenchment of certain workmen as a result of installation
of a mono composing machine for rationalising machinery fell within the ambit of item 10 of the Fourth Schedule. Hence,
the retrenchment without notice as required by s 9A was vitiated. The Fourth Schedule makes it clear that notice under s
9A is required only in cases of proposed change in the conditions of service in respect of any matter specified in it. Item 10
of this schedule deals with rationalisation, standardisation or improvement of plant ‘which is likely to lead to retrenchment
of workmen’. The emphasis, in this item, is on its likely effect on employment and not on rationalisation, etc.36 In KEC
International, Rebello J, of the Bombay High Court held that Voluntary Retirement Scheme (VRS) proposed by the
company results in reduction of posts and hence attracts item (ii) of Sch IV of the Act and therefore, notice under s 9A was
mandatory. He cited Tata Iron and Steel Co,37Amrit Banaspati Co,38Hindustan Lever,39 and a host of other decisions in
support of his reasoning and conclusion.40 With great respect, Rebello J, had misapplied the ratio of the said decisions to
the facts of the case. VRS is a voluntary scheme offered by the management with workmen being left absolutely free to opt
for it or not. That being the position, it is trite to say that VRS by itself amounts to a change in the conditions of service to
the prejudice of the workmen. As a matter of fact, the learned judge admitted the said legal position. It is not as if that VRS
should necessarily involve an increase in the workload of the residual workforce. For instance, where the operations
themselves are scaled down due to product-market imperatives or where changes are brought about in technology, process
or structure, there need not be any increase in the workload of the workmen and, further, it may even result in the reduction
of workload in certain situations. The learned judge blissfully ignored the fact that VRS had become an accepted norm of
reducing surplus manpower in view of the tyrannical provisions enshrined in Ch V-B and that, while offering VRS, the
employer would be shelling down many times the compensation that would have been paid, had the workmen been
retrenched under the provisions of the Act. Thus, VRS is nothing more than an expensive alternative to retrenchment with
a difference.

In the case of retrenchment, the employer exercises his right to terminate the service of surplus staff, whereas in VRS, the
workmen exercise their right either to opt for the scheme or not, at their sole discretion according as the scheme is
attractive or not. The reasoning of Rebello J, is plagued by his failure to appreciate the essence of VRS in the light of the
statutory prohibition imposed by the law. His observation, ‘the question is whether on account of the VRS there is likely to
be retrenchment on account of rationalisation, standardisation or improvement of plant or technique’, ‘makes no sense in
view of his other observation in the same paragraph to the effect, ‘as pointed out earlier, definition of retrenchment
excludes voluntary retirement. Then, he proceeds to justify his rhetoric by another statement in the same paragraph. In the
notice put up by petitioner...it is mentioned that there is need for the company to continuously upgrade the quality of its
products. Prima facie, therefore, item (10) can be attracted.’ Could it be said that ‘improvement in the quality of products’
is the same thing as ‘improvement in plant or technique’? Assuming, without conceding, that they mean the same thing,
should such a change in product quality—which implies an increase in the market share, greater stability and a competitive
edge for the organisation-be branded as a change in the conditions of service to the prejudice of workmen or to their
advantage? None of the decisions cited by the learned judge in his copious judgment, running into 61 paragraphs in 20
pages, lends support to his line of reasoning or the conclusion reached. However, while an appeal against the same
decision was pending before a Division Bench, the parties arrived at consent terms signed by counsel on both sides. The
Division Bench, while passing an order in terms of the agreement reached between the parties, set aside the order of the

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single judge, not on merits, but on the basis of the said terms of consent. The Bench comprising Srikrishna and Nijjar JJ,
observed:

It is made clear that the contentions raised by the parties in their respective writ petitions are kept open to be urged before the
industrial court and/or in any other proceedings. We also make it clear that neither the industrial court nor any single judge of this
court is bound by any observations made in the order passed by the learned Single Judge which has been set aside by consent.41

The Division Bench obviously did not find it necessary to go into the merits of the order passed by Rebello J. Even so,
from the above observations of the Division Bench, it is quite clear that the Bench discountenanced the reasoning and
conclusions reached by the single judge. A single judge of the Andhra Pradesh High Court in G Mamthaiah v APSEB ,42
held that the change in the conditions of service relating to ‘classification by grades’ as contemplated by item 7 of the
Fourth Schedule would include classification into and creation of new categories of classes. For instance, where two or
more grades were interposed between two categories of security guards, the court held that a change in the conditions of
service particularly when new higher minimum educational qualification was prescribed even for initial appointment
would constitute a change in conditions of service relating to ‘classification by grades’. In Food Corpn, the Bombay High
Court held that reduction in rate of overtime allowance cannot be done without complying with the requirements of a
notice under s 9A.43In another case involving the same Corporation, the facts were: overtime allowance was payable to the
employees of the Food Corporation of India as was payable to the employees of the Central Government. But after the
Goa, Daman and Diu Shops and Establishments Act 1973 came into force, the overtime allowance became payable to the
employees in terms of that Act which was much more than what was provided under the Central Government Rules.
Subsequently, FCI was exempted from the application of the Act and it sought to recover the excess overtime allowance
paid to the employees under the Act, This was resisted by the employees on the ground that notwithstanding the
exemption, it was incumbent on the FCI, to comply with the requirements of s 9A. The Bombay High Court held that for
bringing about the necessary change in the rate of overtime allowance in terms of the exemption, the requirements of s 9A
had to be complied with by giving notice of change.44

A change in the working hours can only be effected by giving notice under s 9A. This section does not deal with the
question whether the management has a right to change the hours of work but merely prescribes the manner of change of
hours by giving the requisite notice of change. The provisions of this section would cover also a case where the
management has a right to withdraw a concession unilaterally. Whether there was an agreement to alter the hours
unilaterally or not has nothing to do with the mode of intimation prescribed by s 9A of the Act.45 If a change has been
affected by imposition, it may be sufficient that the concerned workmen think it prejudicial, whether it be truly so or
otherwise. But, where the change has been affected by consent, as between certain workmen and the employer, upon an
offer by the employer and acceptance of the terms by the concerned workmen, and the rest of the workmen in the industry
are unaffected because the status quo prevails, the union of the workmen cannot step in and presume to dictate, by telling
the workmen that the choice was erroneous and that they are ignorant of their true welfare. The requirement of a ‘notice’ to
workmen would arise only if they are likely to be affected prejudicially. A change in the conditions of service
contemplated by the section should be understood in that sense. It is not intended to cover a case where the proposal is, for
instance, to enhance the pay scales or to better the other terms by a unilateral decision of the employer.46

Where the employer had put up a notice changing the weekly off from 23 August 1994 to 24 August 1994 on account of
shortage of raw material, it was held that the said change, though in compliance with the requirements of s 52(1)(b) of
Factories Act, still amounted to violation of s 9A of ID Act read with the provisions of Ch VB, and the employer was
bound to pay compensation for the day. Further held that it was not possible for the employer to change the weekly off
solely on the ground that there was no material available for work to be provided on a particular date.47 The expression
‘conditions of service’ really implies the actual continuance of the relationship of employer and employee. It would not
cover the case of wrongful discharge or termination of service.48 A single judge of the Karnataka High Court held that
since the age of retirement as such is not one of the matters included in the Fourth Schedule nor is it any general condition,
it is not necessary to give notice as required by s 9A.49 In State Bank of India, the bank issued a notification to the effect
that any staff member seeking election to a public or local body should give an undertaking that he would not take undue
advantage of his position in bank and that in case he gets elected, he should resign from the service of the bank, failing
which he would be discharged from service. Treating this letter of request seeking permission to contest the election as
letter of resignation, the Supreme Court held that the said notification was not violative of s 9A, and such participation in
election could not be considered as a customary privilege connected with the conditions of work.50 Withdrawal of duty
relief granted to the office-bearers of trade union is not attracted by s 9A and the grant of such duty relief is not in the
nature of a customary concession.51The Industrial Disputes Act does not recognise any right to work relief in the event of a
workman being elected as an office-bearer of the union, and the withdrawal of the concession by the management is not
attracted by s 9A.52 Fixing the rates of foodstuffs and beverages supplied in the canteen is not a condition of service and,

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consequently, the revision of the rates does not amount to a change in the condition of service.53

(ii) Prescribed Manner

Where the Central Government is the ‘appropriate government’, r 34 of the Industrial Disputes (Central) Rules 1957,
which deals with the notice of change is the relevant rule, for effecting the change in the conditions of service of any
workmen, under which the manner has been prescribed. The notice is to be in form E. In cases where the State
Government is the ‘appropriate government’, the rules framed by such State Government would be relevant. The
procedure prescribed for the notice of change, however, has to be followed in respect of matters specified in the Fourth
Schedule only. In Lokmat Newspapers,54 the Supreme Court held that any management, which seeks to introduce new
working pattern for its existing work force by any future scheme of rationalisation, standardisation or improvement of
plant or technique, which has a tendency to lead to future retrenchment of workmen, has to give prior notice of the
proposed change. Thus, the notice under s 9A must precede the introduction of rationalisation concerned, and not follow it.
In Mukund Ltd, a single judge of the Bombay High Court held that calling workers on Sunday amounts to a change in the
conditions of service under s 9A read with s 52 of the Factories Act, and failure to give notice under the former section
amounted to unfair labour practice, despite the fact that the workers were given compensatory holiday and were also paid
extra amount for having worked on a weekly holiday.55 This is not a proper way of reading the provisions of the Factories
Act as well as the ID Act. Section 52(1)(a) of the Factories Act clearly permits the employer to engage a worker on the
first day of the week, provided he is given compensatory holiday within three days before or after, etc. The only
requirement imposed on the manager was to deliver a notice, one day before the weekly holiday or the substituted day
whichever is earlier, at the office of the Inspector of Factories and display a notice in the factory. In the instant case, it is an
admitted fact that the workers were being called depending upon exigencies and were being compensated more than what
the law requires not only by giving a compensatory holiday but also by paying extra amount. Could it by any stretch of
imagination be said that such working on a weekly holiday amounts to a change in conditions of service? Pandya J,
misapplied the law to the case facts. The decision of the trial judge that the complaint of the union was without merit in
view of the fact that such calling of workers on Sunday was based on exigencies and hence temporary in nature, was right
and that of Pandya J, is not in consonance with the letter and spirit of law. A single judge of the Madras High Court held
that, even after issuing a notice under s 9A, the management cannot alter the service conditions covered by an earlier
settlement, which has expired, until it is altered or modified or replaced by another settlement or otherwise in accordance
with law.56

The IAAI decision of Madras High Court

The case of International Air Cargo Workers, as decided by the Madras High Court (2002) is a standing illustration of the
judicial misconceptions of grave magnitude apart from being a replica misinterpretation of the provisions and
misapplication of law. It is, therefore, considered expedient to devote some space to analyse the case in the following
paragraphs. The facts of the case, briefly, were: the IAAI, entered into a contract with Mis Airfreight Ltd, for the loading
and unloading of cargo at the Madras Airport. On the expiry of the contract with the company, the loading and unloading
operators working therein were directly employed by IAAI as casual workers on a day-to-day basis for a period of 9
months, ie, from November 1985 to July 1986. Thereafter, pursuant to a direction from the High Court, the said workers
formed an Industrial Cooperative Society and continued to handle the work of IAAI on the basis of a contract. The workers
of the society raised a dispute for regularisation of their services in IAAI. Sathasivam J, as he then was, speaking for (self
and Jnanaprakasam J) held that, having engaged the workmen directly after the cancellation of the contract with the private
company, the IAAI sought to replace the direct payment system and introduce the contractor, which amounted to alteration
of the conditions of service, which was illegal without complying with s 9A, and hence the workers had become the
workers of IAAI.57

In the first place, the observation that the change from casual to contract employment (through the Industrial Cooperative
Society) called for a notice under s 9A, reflects the grave misconceptions of law entertained by the learned judge. It is an
admitted fact that the second writ petition No 5164 of 1986 filed by the said workers for their absorption as loaders-cum-
packers as permanent and regular employees in IAAL was dismissed by the same High Court. The High Court recorded
the memorandum filed by counsel for IAAI to the effect that till such time IAAI has made its own regular arrangements, it
would consider mitigating the hardship of ex-loaders and packers by accommodating them as far as possible on a contract
basis through a cooperative society except by way of regular absorption in the services of IAAI, and accordingly dismissed
the writ petition filed by the workmen. In the face of these facts, to say that the management of IAAI failed to comply with
notice under s 9A is too far-fetched and militates against settled law. The learned judge failed to grasp the fact that it was
not a mere agreement entered into by the management and union suo motu, but an arrangement made by the management
to accommodate the workers in pursuance of the direction issued by the High Court. Once the workers formed into a
cooperative society and entered into an agreement with the management to undertake packing and loading operations, it
acquires the character of a contract for service and not of a contract of service. That being the position, why should a notice

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of change be given under s 9A ? In the light of the admitted fact that there is no employer-employee relationship between
IAAI and the members of the Coop Society, could it still be argued that s 9A has application as between the parties? Even
in the erstwhile dispensation, ie, before forming into a cooperative society, the said workmen were only casual workers
engaged on a day-today basis and were never on the permanent rolls of IAAI. It is equally amusing to hear a High Court
judge holding that the said change falls in entry (1) of Sch IV of the ID Act, ie, ‘wages, including the period and mode of
payment.’ (,).

It should be clearly understood that the above expression ‘wages’ refers to the amount payable or paid, ‘period’ refers to
the interval between two successive payments, and ‘mode’ refers to payment in coins or currency notes or kind. In order to
understand the implications of the said entry of Sch IV, one has to necessarily refer to s 4,5 and 6 of the Payment of Wages
Act 1936. Section 4, which deals with the ‘fixation of wage periods, stipulates that no wage period shall exceed one month.
Section 5, which deals with the ‘time of payment of wages’ stipulates that payment should be made on 7th or 10th day
after the last day of the wage period, according to the number of persons employed. Section 6 deals with the ‘mode of
payment’, and stipulates that wages should be paid in current coin or currency notes or in both. The learned judge
proceeded to interpret the expression in item 1 of Sch IV in a perfunctory manner, without getting a hang of what it
connotes and what its significance is. Even assuming for the sake of argument that the interpretation placed by the learned
judge on item 1 of Sch IV, is correct, howsoever precarious it might be, still s 9A has no application in the light of the fact
that the change, if at all, was made pursuant to the agreement reached between the parties and recorded and directed by the
High Court. Viewed from any angle, s 9A had no application whatsoever to the present case, and the decision was
apparently based on a misreading of law and wrong assumptions made by the court. It is not necessary to go into the other
limb of his argument as to the applicability of Art. 14 of the Constitution. The Constitution of India does not prohibit
contract labour or contract work. In this case, the workers themselves formed into a co-operative society and entered into a
contract for service with IAAI, and there was nothing in such an arrangement which could be said to be repugnant to Art.
14. The third line of reasoning of the learned judge was based on ‘supervision’ and ‘control’. The mere fact that the
workers of immediate employer or the co-operative society have to work under the control of the principal employer does
not transform them into the employees of the principal employer. Control test was discarded long ago as the exclusive
determinant of master-servant relationship. InO’Kelly, the court of appeal laid down the following tests to determine the
true nature of employment relationship:

(a) Is there a measure of control indicative of an employer-employee relationship?

(b) Is the person carrying out the work for and on behalf of the employer or in business on his (or her) own account?

(c) Is the person free to accept or refuse work at will?

(d) Is the person supplied with a uniform and equipment?

(e) Is the person subject to disciplinary or grievance procedure?

(f) Must the person take holidays when and as directed?

(g) Is the person paid regularly either weekly or monthly? And are wages or salary paid gross or net of tax?

(h) What has been agreed with the Inland Revenue?58

‘Control’ test was replaced by the ‘economic reality’ test as a comprehensive yardstick, which takes into its fold several
related factors that have a bearing on employment relationship from a wider perspective. In US v Silk , a Bench of nine
judges of the US Supreme Court applied the economic reality test, ie, the degree of control, opportunities of profit or loss,
investment in facilities, permanency of relations and the degree of skill required, and held that the ‘unloaders’ engaged by
the company were ‘employees’ for the purpose of the Social Security Act 1935.59 In Market Investigation Ltd, it was held:

... it is fair to say that there was at one time a school of thought according to which the extent and degree of the control which B
was entitled to exercise over A in the performance of the work would be a decisive factor. However, it has been apparent for long
that an analysis of the extent and degree of such control is not itself decisive.60

In Agra Electric Supply, the Supreme Court held that the term ‘employee’ is quite different from ‘self-employed’ person.
A self-employed person owes no loyalty to the employer other than to complete a specific job of work within the specified
time limits in return for an agreed fee. He is his own master.61 Even where a person is self-employed, it does not imply that
he can produce whatever he feels like producing and that the contracting party is obliged to accept it without question. In
IAAI case, notwithstanding the fact that the workers were carrying out the work as members of the cooperative society,
they were still required to subject themselves to the rules and regulations framed by International Airports Authority of

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India, in the light of the fact that airports are sensitive places and have of late become targets of terrorist attacks etc, with
imminent danger to the plant, installations and personnel including passengers. Viewed from this standpoint, the mere fact
that they were under the control and supervision of IAAI does not per se transform them into the employees of IAAI. As a
matter of fact, the workers in the instant case were not even eligible to be regarded as the employees of an immediate
employer (ie, contractor) in order to support their claim for absorption in the regular services of principal employer, in the
light of the fact that they were members, and not the employees, of the cooperative society, which had entered into a
contract with IAAI to render certain services in the airport. On this view of the matter, the ‘control’ and ‘supervision’ test
propounded by the learned judge rests on a tenuous footing apart from being time-barred in its application. Subsequent to
the publication of the 6th edition of this book (2004),62 the IAAI challenged the completely flawed decision of Sathasivam
J in Supreme Court by Special Leave under Art. 136. Castigating the tribunal, in the first place, for recording a wholly
perverse finding on three points urged before it, and rejecting the gloss added by Sathasivam J while affirming the perverse
findings of the tribunal, in the second, Raveendran J (for self and Panta), observed:

On the contention urged, the following questions arise for our consideration in this case :
(i) Whether the agreement between the contractor society and the IAAI in regard to cargo handling work was sham and
nominal and consequently, the workers engaged as contract labour in regard to cargo handling work, were the direct
employees of IAAI ?
(ii) Whether the status of loaders-cum-packers engaged in cargo handling work was illegally changed from that of direct
casual labour to contract labour in violation of section 9A of the ID Act, 1947?
(iii) In the absence of a notification under section 10 of CLRA Act prohibiting the employment of contract labour in the
process/operation of cargo handling work, whether the workmen employed as contract labour are entitled to claim
absorption? ()

What is significant is that, the Union did not plead that the contract labour agreement between the society and IAAI was sham and
nominal. In fact, it could not do so, as the contract was not with a private contractor operating with a profit motive, but with a
society of the very workers. Nor did the first respondent-Union allege that IAAI was exercising direct control and supervision over
their work or that IAAI was directly paying their salary or that IAAI was directly taking disciplinary action against them. () ...
Therefore, the question of violation of section 9-A of ID Act does not arise. () ... The offer of IAAI to enter into a contract with the
society formed by the workers, for supply of contract labour was readily welcomed and accepted by the Workers’ Union ...
Virtually, the seal of approval by the Court was put on the same by recording the proposal and the acceptance of the workers the
same. The writ petition of the workers was dismissed and attained finality. Thus, the contracts with the society were genuine,
beneficial voluntary bilateral contracts and there was nothing sham or nominal about it. It should also be noticed that at no point of
time, the workers or their Union pleaded that the agreement between IAAI and the society was sham or nominal. () ...
Unfortunately, the Tribunal goes to the extent of referring to the memo filed by the IAAI before the High Court ... offering to give
the cargo handling contract to the society formed by the workers of Airfreight, as a compromise or settlement which is opposed to
public policy, principles of natural justice and an unfair labour practice. It further describes it as a settlement which the workers
were constrained to enter. () ... The contracts between IAAI and the society make it crystal clear that a lump sum consideration
was to be paid by the IAAI to the society and the society was responsible for payment to its members who were send as contract
labour. ... This is a finding based on absolutely no evidence and shockingly perverse and is liable to be rejected accordingly. () ...
In view of the above we answer the questions as follows:

(i) The contract labour agreement between IAAI and the society was not sham, nominal or as a camouflage and the contract
labour were not the direct employees of IAAI.

(ii) There was no violation of section 9-A of the ID Act.

(iii) In the absence of a notification under section 10 of CLRA Act prohibiting the employment of contract labour in the
operation of cargo handling work, the workmen employed as contract labour are not entitled to claim absorption. ... In
the light of our findings on the two questions the order of the Division Bench cannot be sustained and is liable to be set
aside and the order of the learned Single Judge has to be restored.63 (Paras 29 & 30).

In Divisional Engineer, TMD, a single judge of the Madras High Court held that a change in the working hours of daily-
rated NMR employees from 8 hours per day for 6 days a week to 9 hours per day for 5 days a week, which deprived the
workmen extra payment for one hour extra work per day, was bad as the change was made without issuing notice under s
9A, and that the workers would be entitled to extra payment for one hour every day.64 The conditions of service for the
change of which, a notice is to be given under s 9A read with Sch IV do not in terms include the fixation of a period of

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service or date of retirement. Introduction of maximum period of service would not operate to the detriment of the
employee, who was otherwise entitled to serve only for six months and was liable to be terminated by giving one month’s
notice, and hence no notice under s 9A is required.65 A single judge of the Bombay High Court held that there is no
provision in any law in force, which allowed amendment to the terms of settlement by issuing a notice under s 9A. The
terms and conditions agreed to in a settlement continue to survive even after the expiry of the settlement, and in the
absence of any amendment to the settlement or unless another settlement on revised terms was signed, no such facility
which was already there could be withheld.66 An order of transfer does not constitute reversion or demotion and hence
does not attract the provisions of s 9A.67 An isolated instance of changing the weekly off from Wednesday to Thursday,
which was also a holiday, more so when there was no reduction in the number of paid holidays, does not amount to a
change in the conditions of service warranting a notice of change under s 9A and, therefore, there was no unfair labour
practice under item 9 of Sch 4 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices
Act 1971 (MRTU & PULP Act 1971).68

In Lakshmi Vilas Bank, the facts disclosed that the bank was paying a special allowance to machine operators and punch
operators of its data processing centre at the rate of Rs 152/- and Rs 87/- per month respectively. Consequent upon
outsourcing the job, the bank withdrew payment of the said special allowance and transferred the operators to other
departments. Adjudicating the dispute raised against the contravention of s 9A, the tribunal, without giving a finding as to
whether s 9A was complied with or not, rejected the claim of the workmen and held that ‘it was left to the will and
pleasure of the bank’. Quashing the award and remanding the matter to the tribunal, Sathasivam J of the Madras High
Court, as he then was, held that it was mandatory for the bank to give 21 days’ notice to the workmen concerned, which
duty it did not fulfill, and hence the discontinuance of special allowance was wrong; and that the award of the tribunal
against the workmen, in the absence of a specific finding whether s 9A was complied with or not, was not sustainable.69 In
an undertaking where ‘Good Friday’ was a holiday for over 25 years, it had become the usage and privilege of workmen.
Such a privilege cannot be withdrawn without following the mandatory provisions enshrined in s 9A, and mere posting the
decision on the notice board is not a sufficient compliance of s 9A.70 It is not enough to send the notice of change to the
union. Such a communication cannot be treated as sufficient compliance of the provision. Section 9A makes it mandatory
to serve the notice in the prescribed form on every workman who is likely to be affected by the proposed change.71 In
Digvijay Cement, the Gujarat High Court dismissed the writ petition filed by the union on the ground that the question
whether the management had violated s 9A or not was a question of fact which should be decided in a regular adjudication
proceeding in the remedy provided under the ID Act.72 In Richard Fritchley, the facts disclosed that a few employees,
having opted for the voluntary separation under a scheme announced by the management, later turned out and raised an
industrial dispute alleging that it was not resignation but retrenchment and that the management had violated s 9A.
Rejecting both the pleas, Ghulam Mohammad J of AP High Court held that notice under s 9A was not necessary as the
scheme offered was voluntary, and there was no retrenchment in view of the fact that the employees willingly opted out
after receiving lumpsum amount.73

In Steel Plant Employees Union, the facts were: the Steel Authority of India Ltd, issued a circular in 2001 announcing a
scheme for leasing houses/flats to employees, ex-employees, their spouses and legal heirs. The employees union filed an
application alleging violation of s 9A on the ground that while many workmen were waiting in the queue the impugned
circular threw open the allotment of houses and flats to other including the employees of other public sector undertakings.
Rejecting the contention, Sathasivam J of the Madras High Court, as he then was, held that there was no violation of s 9A
and that the impugned circular was in order.74 The discontinuance of mailing section and the consequent termination of the
services of workmen does not attract the provisions of s 9A, and it is not in every case of retrenchment a notice under s 9A
is required.75 Rationalisation cannot be done without giving notice under s 9A to the workmen who are likely to be
affected, in this case the closing down of packaging division, failing which the consequential termination would be
illegal.76 In Orissa Mining Corporation,77 the facts were: the management revised pay scales and benefits upward with
effect from April 1, 1998 and while doing so restructured the house rent allowance that was payable as a percentage of
basic pay for employees located in different stations. The corporation further gave an option to the employees either to opt
for the revised scales of pay or continue with the existing, ie, pre-revised pay scales in their entirety. The employees
having exercised and enjoyed the benefits filed a complaint alleging violation of s 9A in so far as their house rent
allowance was reduced. The management contended that the revision of pay scales was effected as a package deal and that
no worker was prejudicially affected. Despite this, the tribunal passed an award holding that the reduction in house rent
allowance was not justified as it was in violation of s 9A. Quashing the award passed by the tribunal, the Orissa High
Court supportively cited the view expressed by another Division Bench of the Madras High Court in Tamil Nadu
Electricity Workers, to the effect: “It appears to us to be very clear that s 9A was never designed to prevent the
implementation of any change, which is not change imposed by the employer on the workmen, but which is based upon the
consent of the workmen to the offer by the employer, upon the exercise of their judgment that the change was
beneficial.”78

In Rashtriya Chemicals, the company issued a notice proposing change in the service conditions, which was referred for

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adjudication. The tribunal passed an order directing the employer to adduce evidence in support of the proposed change,
which order was challenged by the company in a writ petition. The company contended that the union should be directed
to adduce evidence, in the first instance, against the proposed change. Rejecting the contention, Chandrachud J of the
Bombay High Court held that that it was the employer who had sought to alter the prevailing conditions of service which
were the subject matter of industrial settlements. That was the import of the notice of change under s 9A and it was,
therefore, for the employer to establish the legitimacy of the grounds underlying the notice of change. The learned judge
further held that the Industrial Tribunal was not in error in rejecting the application filed by the employer that the union be
directed to lead evidence first.79 In Food Corporation, the facts disclosed that the corporation, having paid overtime wages
as provided for in the West Bengal Shops and Establishments Act 1963, stopped the said payment to the workers on the
ground that they failed to discharge their duty during the normal working hours of the week. Having lost before the
tribunal and single judge of the High Court, the Corporation moved the Division Bench of Calcutta High Court. Speaking
for the Court, Ashim K Banerjee J held that: (i) if the workers did not discharge their duties during the normal hours, the
employer should take departmental action; and (ii) having earlier paid overtime wages at the prescribed rate under the 1963
Act, the employer could not suddenly withdraw the same without following s 9A.80 Where, in the dispensary of a power
generation plant, the facts disclosed that the dispensary never worked beyond six-and-half hours, the change in the hours of
work to eight hours without complying with s 9A is illegal.81Reduction in the qualifying age of employees’ children from
28 to 25 years for medical benefit and restricting the number of children to two to be entitled to such benefit do not attract
the provisions of s 9A, as it was not shown by the workmen that grant of medical benefit was part of conditions of service.
The petitioner-workmen should workout their remedy under the ID Act and that High Court cannot go into that question
while exercising its writ jurisdiction.82 In Thai Airways, a single judge of Delhi High Court held that s 9A was meant for
protecting the service conditions of permanent workmen and not those of daily wagers or casual workers and, hence, the
award of the tribunal holding that the termination of service of casual workers was in violation of s 9A was untenable and
deserved to be set aside.83 Customary puja allowance that was being paid to the employees for long has become a condition
of service, and its stoppage without following the provisions of s 9A is invalid and void ab initio.84

(iii) Proviso to the Section

The proviso to s 9A dispenses with the requirement of notice in the following cases:

(1) where the change is effected pursuant to any ‘settlement or award’;85 or

(2) where the workmen likely to be affected by the change are the persons to whom the following statutory rules apply:

(a) Fundamental and Supplementary Rules;

(b) Civil Services (Classification, Control and Appeal) Rules;

(c) Civil Services (Temporary Service) Rules;

(d) Revised Leave Rules;

(e) Civil Service Regulations;

(f) Civilians in Defence Services (Classification, Control and Appeal) Rules;

(g) Indian Railway Establishment Code;

(h) Any other rules or regulations that may be notified in this behalf by the appropriate government in the Official
Gazette.

Apart from the rules enumerated in cl (b) of the proviso, the ‘appropriate government’ has also been given further power to
include any other rules or regulations in this category by a notification in its Official Gazette.86 In other words, notice is
dispensed with only in the case of such persons as are governed by the rules which are specified therein and ‘any other
rules or regulations’ that may be notified in this behalf by the appropriate government in the Official Gazette.87 The
proviso cannot be construed to mean that if an employee is governed by the rules other than those mentioned therein, the
employer in such a case must give a notice of change before he complies with the statutory rule or order which has not
been made or issued by him. It may, however, be a different matter if the employer himself is the statutory authority to
make rules or issue orders relating to conditions of service. In such a situation, it may be possible to say that the employer
has to comply with s 9A unless the case is brought within the exceptions contained in the proviso.88 But the language of cl
(b) indicates legislative intention to exclude the persons governed by service rules only for the limited purpose of s 9A and
not in respect of other matters.89 The NCL-II recommended that there should be no statutory obligation on the employer to
give prior notice, in regard to item 11 of the Fourth Schedule for the purpose of increase in the workforce, as is the position

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now.90

(iv) Notice of Change and Article 226

The Madras High Court held that, notwithstanding the availability of an alternative remedy under the ID Act for violation
of the provisions of s 9A, a writ petition under Art. 226 would be maintainable in a case where the change in holidays
resulted in a change in the customary practice.91 A notice of change under s 9A is really an order which takes effect on
completion of 21 days, and the legality or otherwise of a notice under s 9A issued by a government company in respect of
a matter falling under item 4 of Sch IV, ie, ‘hours of work and rest intervals’, can be examined under Art. 226 of the
Constitution. By reason of introducing the change, the management cannot enhance the working hours.92 However, in
Singareni Collieries, the Andhra Pradesh High Court held that the number of helpers provided to tradesmen would depend
upon the exigencies of the situation and may or may not be a condition of service and that the impugned circular issued by
the management reducing the number of helpers could not be termed as violative of s 9A on the alleged ground that it was
an alteration of conditions of service, and that the workmen could pursue the alternative remedy under the ID Act for
redressal of their grievances.93 In AP Foods, the issue was whether the High Court has jurisdiction to entertain a writ
petition under Art. 226 in respect of a dispute relating to bonus and issue directions to the company. The appellant-
organisation was run by AP Nutrition Council and was owned and controlled by the Government of Andhra Pradesh with
its principal object to provide nutritious foods to school and pre-school children, pregnant women and lactating mothers
and such other categories of beneficiaries as the Government from time to time decide within the general framework of the
Government social welfare programmes. It was claimed to be a non-profit motive establishment. It did not sell or distribute
its product either in public or to outsiders except those selected by the Government of Andhra Pradesh under its
programmes. In view of the nature of the activities, the Government issued an order to the effect that the Payment of
Bonus Act 1965 would not be applicable to the appellant. However, the appellant was paid one month’s salary as ex-gratia
from 1985, which was withdrawn in the year 1993. The writ petition filed by 243 employees was allowed by single judge
of the High Court, which was affirmed by a Division Bench. Relying on the principles laid down by SC in several cases
including Hindustan Steelworks,94 Pasayat J (for self and Chatterjee J) held that a bare reading of s 22 of the Payment of
Bonus Act makes the position clear that, where the dispute arises between an employer and employees with respect to the
bonus payable under the Act or with respect to the application of the Act in public sector then such dispute shall be
deemed to be an industrial dispute within the meaning of ID Act; that as disputed questions of fact were involved, and an
alternative remedy was available under the ID Act, the High Court should not have entertained the writ petition, and
should have directed the writ-petitioners to avail the statutory remedy. The learned judge directed the government of
Andhra Pradesh to refer the following questions for adjudication.

(1) Whether there was violation of Section 9-A of the Industrial Disputes Act, 1947 as claimed by the employees?
(2) Whether the withdrawal of the construction allowance amounted to the change in the conditions of service.
(3) Whether AP Foods was liable to pay Bonus.95

EFFECT OF SECTION 33 ON SECTION 9A

The language of ss 9A and 33 indicates that the legislature has envisaged existence of undisputed right in an employer to
alter the conditions of service applicable to the workmen to their prejudice. Before its amendment, the original s 33
imposed a total ban and provided that, ‘no employer shall during the pendency of...proceedings before a tribunal...alter to
the prejudice of the workmen concerned in the dispute, conditions of service applicable to them’. The present s 33 clearly
contemplates that the tribunal may grant express permission to an employer to alter conditions of service applicable to the
workmen to their prejudice.96 In other words, the right of the employer to effect change in the conditions of service of
workmen is subject to the provisions contained in s 33 during the pendency of any proceedings before a conciliation
officer, board, labour court, industrial tribunal or national tribunal. Section 33(1)(a) refers to permission relating to any
matter connected with the dispute. No change can be brought about in the conditions of service of a workman to his
prejudice during the pendency of any such dispute but from the language of s 33(2)(a) which permits the employer to alter
the conditions of service in regard to ‘any matter not connected with the dispute’ without even applying for the approval of
the tribunal and further from the language of s 9A, which contemplates that the employer has a right to serve a notice for
change in conditions of service, it appears that the employer has a right to alter conditions of service applicable to his
workmen. It is now well settled that lifting the ban of s 33 does not effectively bring about the alteration in terms of
conditions of service of workmen as desired by an employer,97 because even if the ban is lifted, the right of the workmen to
raise an industrial dispute with regard to the alteration of conditions is not taken away. The question whether conditions of
service can be altered or not will have to be ultimately decided by the industrial tribunal on reference under s 10. This
would be the position even where a valid notice of change under s 9A as regards conditions of service was given by the
employer.98

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Hence, the conditions of service as existing, either settled by an award or settlement would continue to be binding both on
the employer and workmen, until they are altered by a contract or settlement or an award made in a reference under s 10.
The language of ss 9A and 33(1) which deals with the manner in which the employer who contemplates alteration of
conditions may proceed, is plain and clear. These provisions are only procedural and do not create extra or new rights in
favour of an employer. In deciding for the purposes of s 33, as to at what point of time, the employer ‘alters’ any
conditions of service, it is necessary to ascertain the time when the change, of which notice under s 9A is given, is actually
effected. If at the time, the change is effected, a proceeding is pending before a tribunal, s 33 is attracted and not otherwise.
The point of time when the employer proposes to change the conditions of service and the point of time when the notice is
given are equally irrelevant.1Section 31 (2) makes the contravention of s 9A punishable with fine which may extend to one
hundred rupees. The NCL-II expressed the view that the notice of change, issued by an employer as per provisions of s 9A,
should not operate as a stay under s 33 though such a decision of the management will be justiciable under s 33A.2

1 Chapter 2A consisting of ss 9A and 9B, ins by Act 36 of 1956, s 6 (wef 10-3-1957).

2 Subs by Act 46 of 1982, s 6 (wef 21-8-1984).
3 Tamilnadu Electricity Workers v Madras SEB (1962) 2 LLJ 136 (Mad), per Veeraswami J.
4 Tata Iron & Steel Co Ltd v Workmen (1972) 2 LLJ 259 [LNIND 1972 SC 300] (SC), per Dua J.
5 Navbharat Hindi Daily v Navbharat Shramik Sangha (1984) Lab IC 445, 448 (Bom) (DB), per Patel J.
6 Janta Co-operative Sugar Mills Ltd, Bhogpur v LC 1987 Lab IC 1093 (P&H), per Tewatia J.
7 Mgmt of Indian Oil Corpn Ltd v Workmen (1975) 2 LLJ 319 [LNIND 1975 SC 229] (SC), per Murtaza Faisal Ali J.
8 Northbrook Jute Co Ltd v Workmen (1960) 1 LLJ 580 [LNIND 1960 SC 87] (SC), per Das Gupta J.
9 Gordon Woodroffe Employees Union v State of Tamil Nadu 1990 Lab IC NOC 148 (Mad) (DB).
10 Navbharat Hindi Daily v Navbharat Shramik Sangha 1984 Lab IC 445, 448 (Bom) (DB), per Patel J.
11 CI Kannan v Employees State Insurance Corpn 1968 Lab IC 945, 948 (Mad), per Kailasam J.
12 Sewak Bus & Transport Co Pvt Ltd v Punjab State 1973 Lab I C 218, 221 (P&H), per Tuli J.
13 Gurudas Chatterjee v State Bank of India (1983) 2 LLJ 200, 207 (Cal), per GN Roy J.
14 Calcutta Elec Supply Corpn Ltd v CES Workers’ Union (1995) 1 LLJ 874, 876 (SC).
15 State Bank of India Staff Union v SBI 1992 Lab IC 2078, 2081 (AP) (DB), per Sardar Ali Khan J.
16 Coal India Employees Union v Coal India Ltd (1993) 1 LLJ 646 [LNIND 1992 CAL 98] (Cal), per Susanta Chatterjee J.
17 GM, Ordnance Parachute Factory v PO, IT-cum-LC 1987 Lab IC 365, 377 (All), per Agarwal J.
18 All India ITDCE Union Unit v Hotel Ashok, 1984 Lab IC NOC 107 (Kant), per Rama Jois J.
19 Hemant K Gupta v Dist Coop Central Bank Ltd 1982 Lab IC 1435, 1439 (MP) (DB), per GP Singh CJ.
20 L Robert D’Souza v Executive Engineer, Southern Rly (1982) 1 LLJ 330 [LNIND 1982 SC 47], 333-34 (SC), per Desai J.
21 Workmen of Sur Iron and Steel Co Pvt Ltd v Mgmt (1971) 1 LLJ 570, 573 (SC), per Bhargava J.
22 Assam Match Co Ltd v Bijoy Lal Sen (1973) 2 LLJ 149 [LNIND 1973 SC 170], 152 (SC), per Vaidialingam J.
23 Tata Iron and Steel Co Ltd v Workmen (1972) 2 LLJ 259 [LNIND 1972 SC 300] (SC) : AIR 1972 SC 1917 [LNIND 1972 SC
300]: (1972) 2 SCC 383 [LNIND 1972 SC 300], per Dua J.
24 Samnuggur Jute Factory Co Ltd v Workmen 1982 Lab IC 1334, 1335 (Cal) (DB), per Banerjee J.
25 Assam Match Co Ltd v Bijoy Lal Sen (1973) 2 LLJ 149 [LNIND 1973 SC 170] (SC) : AIR 1973 SC 2155 [LNIND 1973 SC 170]:
(1974) 3 SCC 163 [LNIND 1973 SC 92] : 1973 Lab IC 1158, per Vaidialingam J.
26 Oil and Natural Gas Commission v Workmen (1973) 1 LLJ 18 [LNIND 1972 SC 470] (SC) : (1973) 3 SCC 535 [LNIND 1972 SC
470] : AIR 1973 SC 968 [LNIND 1972 SC 470], per Dua J.
27 Hindustan Lever Ltd v Ram Mohan Ray (1973) 1 LLJ 427 [LNIND 1973 SC 65] (SC) : (1973) 4 SCC 14 : AIR 1973 SC 1156
[LNIND 1973 SC 65], per Alagiriswami J.

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28 Mgmt of Indian Oil Corpn Ltd v Workmen (1975) 2 LLJ 319 [LNIND 1975 SC 229] (SC), per Murtaza Fazal Ali J.
29 Workmen of FCI v Food Corpn of India (1985) 2 LLJ 4 [LNIND 1985 SC 71], 13 (SC), per Desai J.
30 Mistry Lallubhoy and Co v Engg and Metal Workers’ Union 1979 Lab IC 196 (Bom), per SK Desai J.
31 Neyveli Lignite Corpn Labour and Staff Union v Mgmt, 1984 Lab IC 1865 (Mad) (DB), per Nainar Sundram J.
32 CI Kannan v Employees State Insurance Corpn 1968 Lab IC 945, 948 (Mad), per Kailasarn J.
33 Life Insurance Corpn of India, v All India IE Assn 1989 Lab IC 1493, 1500 (Bom), per Sujata Manohar J.
34 Workmen of Hindustan Shipyard Pvt Ltd v IT (1961) 2 LLJ 526 (AP) : 1961 ALT 873, per Jaganmohan Reddy J.
35 Shalimar Paints v Third IT (1971) 2 LLJ 58 [LNIND 1970 CAL 56] (Cal) : AIR 1971 Cal 90 [LNIND 1970 CAL 56], per TK
Basu J.
36 Navbharat Hindi Daily v Navbharat Shramik Sangha 1984 Lab IC 445, 448 (Bom) (DB), per Patel J.
37 Tata Iron and Steel Co Ltd v Workmen (1972) LLN 581 (588) (SC).
38 Amrit Banaspati Co Ltd, v S Taki Bilgarmi (1971) 2 LLJ 317 [LNIND 1971 SC 376] (SC).
39 Workmen v Hindustan Lever Ltd (1973) 1 LLJ 427 [LNIND 1973 SC 65] (SC).
40 KEC International Ltd v Kamani Employees’ Union (1998) 2 LLN 707, 725 (Bom), per Rebello J.
41 KEC International Ltd v Kamani Employees Union (1998) 4 LLN 540 (Bom) (DB).
42 1986 Lab IC 1161, 1164 (AP), per Jeevan Reddy J.
43 Transport and Dock Workers’ Union v Food Corpn of India 1986 Lab IC 1393 [LNIND 1985 BOM 281], 1399 (Bom) (DB), per
Daud J.
44 Food Corpn of India Employees Assn v FCI (1991) 2 LLJ 562 [LNIND 1990 BOM 47] (Bom) (DB), per Kamat J.
45 Workmen of Hindustan Shipyard Pvt Ltd v IT (1961) 2 LLJ 526 (AP), per Jaganmohan Reddy J.
46 Tamilnadu Electricity Workers’ Federation v Madras SEB (1964) 2 LLJ 392 [LNIND 1963 MAD 296] (Mad), per
Ananranarayanan J.
47 Hartex Tubes (Private) Ltd v Asst Commissioner of Labour (1998) 1 LLN 466 (Bom), per Rebello J.
48 Manu v Aspinwal & Co Ltd (1963) 1 LLJ 212 (Ker), per Vaidialingam J.
49 Gokak Mills v Workmen of Gokak Mills 1993 Lab IC 1850, 1854 (Kant), per Rajendra Babu J.
50 GM, State Bank of India v SBI Staff Union (1998) 3 LLN 5 (SC), per Sujata V Manohar J.
51 Secretary, TNEBAS Union v TNEB (1998) 3 LLN 838 (Mad) (DB), per Nainar Sundaram J.
52 Tamil Nadu CSCA Staff Union v TNCSC Ltd (1998) 3 LLN 844 (Mad) (DB), per Liberhan CJ.
53 Voltas SPE Union v Voltas Switchgear Ltd (2001) 1 LLN 1135 (Bom), per Daga J.
54 Lokmat Newspapers (P) Ltd v Shankar Prasad (1999) 3 LLN 538 (553) (SC), per Majmudar J.
55 Mukund Staff and Officers’Association v Mukund Ltd (1999) 3 LLN 952 (Bom), per Pandya J.
56 South ADCCBLE Assn v Dy Commr of Labour (1999) 4 LLN 1102 [LNIND 1998 MAD 822], 1107 (Mad), per Govindarajan J.
57 International ACW Union v IAAI (2001) 4 LLN 909 (Mad) (DB), per Sathasivam J.
58 O’Kelly v Trusthouse Forte Plc (1983) ICR 708 (CA).
59 US v Silk 331 US 704.
60 Market Investigation Ltd v Minister of Social Security [1968] 3 All ER 732.
61 Agra Electric Supply Co Ltd v Alladin (1969) 2 LLJ 540 [LNIND 1969 SC 261], 544 (SC), per Shelat J.
62 EM Rao, OP Malhotra’s The Law of Industrial Disputes, 2004, 6th ed.
63 International Airport Authority of India v IACW Union, AIR 2009 SC 3063 [LNIND 2009 SC 824]: (2009) IV LLJ 31SC : (2009)
13 SCC 374 [LNIND 2009 SC 824], per Raveendran J.
64 Div Engr, TMD v Secy, TNHRWD (2001) 1 LLN 1000 (Mad), per Sirpurkar J.
65 Harmohinder Singh v Kharga Canteen (2001) 3 LLN 715 (SC), per Ruma Pal J.
66 Christine Hoden (I) (P) Ltd v State of Goa (2002) 1 LLN 943 (Bom), per Upasani J.
67 N Yadavakrishnan GM, TNSTC Ltd (2002) 1 LLN 1034 (Mad), per Dinakaran J.

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68 Bajaj Tempo Ltd v BK Sena (2002) 2 LLN 992 (Bom), per Kochar J.
69 Lakshmi Vilas Bank Employees Union v LVB Ltd (2002) 4 LLN 118 (Mad), per Sathasivam J.
70 Chidambaranar DPT Sangham v Tiruchendur Coop Spg Mills Ltd (2003) 4 LLJ 916, per Sathasivam J.
71 Punjab State CS&M Federation Ltd v PO, IT (2003) 4 LLJ 186 (P&H), per Singhvi J.
72 Digvijay Cement and Asbestos Mazdoor Sabha v State of Gujarat (2003) 1 LLJ 795 [LNIND 2002 GUJ 505] (Guj) : (2003) 2 GLR
992.
73 Richard Fritchley v Mgmt of Gatesway Hotel (2003) 4 LLJ 404 (AP), per Ghulam Mohammad J.
74 Steel Plant Employees Union, Salem v SAIL (2003) 1 LLJ 189 (Mad) : (2002) 2 MLJ 271 [LNIND 2002 MAD 241], per
Sathasivam J.
75 Alarsin ME Union v Alarsin Pharmaceuticals Pvt Ltd (2004) 3 LLJ 870 [LNIND 2004 BOM 515] (Bom) : 2004 (3) Mh LJ 650:
2004 106 (3) Bom LR 853, per Ms Mhatre J.
76 Ramaratnam KS v LC (2002) 2 LLJ 1166 (Mad), per Rajan J.
77 Mgmt of Orissa Mining Corpn v Workmen (2004) 1 LLJ 1 (Ors) : 2003 (II) OLR 288, per Patra J.
78 Tamil Nadu EW Federation v Madras State Electricity Board AIR 1965 Mad 111 [LNIND 1963 MAD 296]: (1964) ILR 2 Mad.
79 Rashtriya Chemicals & Fertilisers Ltd v RCFE Union (2008) 2 LLJ 1032 [LNIND 2007 BOM 1307] (Bom) per Chandrachud J.
80 Food Corporation of India v Union of India (2009) 4 LLJ 850 (Cal) : 2009 (7) SLR 702 [LNIND 2009 CAL 398] : 2010 (127) FLR
460, per Banerjee J.
81 Maharashtra State PGC Ltd v Maharashtra VMK Sangh (2009) 2 LLJ 627 [LNIND 2009 BOM 131] (Bom) : 2009 (121) FLR 238
per Bobde J.
82 NLC Workers’ Progressive Union v NLC Ltd (2012) 3 LLJ 756 (Mad), per Chitra Venkataraman J.
83 Thai Airways International Ltd v Govt of NCT of Delhi (2012) 4 LLJ 523 (Del) : 191 (2012) DLT 278, per Shali J.
84 Nadia Distt CC Bank Ltd v Employees’ Union (2012) 2 LLJ 326 (Cal) : 2012 (133) FLR 1045 per Chakrabarti J.
85 Paresh Chandra Roy v Life Insurance Corpn 1970 Lab IC 530, 533 (Cal), per BC Mitra J.
86 Air India Cabin Crew Assn v Air India (1981) 2 LLJ 306, 308, per Pratap J.
87 PV Mani v Union of India 1985 Lab IC 1591, 1609 (Ker) (FB), per Sivaraman Nair J.
88 Hemant Kumar Gupta v President, Distt CCB Ltd 1982 Lab IC 1435, 1439 (MP) (DB), per GP Singh CJ.
89 Zilla Parishad, Bhandra v Khushal 1986 Lab IC 117, 121 (Bom) (DB), per Mohta J.
90 Government of India (2002), Report of NCL-II, Chap 13, p 43, para 6.82.
91 Voltas VE Union v Voltas Ltd (1999) 4 LLN 1107 (Mad) (DB), per Sivasubramaniam J.
92 Kerala E&AECLW Congress v District Labour Officer (2001) 4 LLN 380 (Ker), per Gafoor J.
93 Singareni Collieries Workers Union v Mgmt (2002) 4 LLN 83 (AP) (DB), per Sinha CJ.
94 Hindustan Steelworks Constn Corpn Ltd v Employees Union 2005 (6) SCC 725 [LNIND 2005 SC 608].
95 AP Foods v S Samuel AIR 2006 SC 3622 [LNIND 2006 SC 461]: (2006) 5 SCC 469 [LNIND 2006 SC 461] : (2006) III LLJ
18SC, per Pasayat J.
96 Haribhau Shinde v IT 1970 Lab IC 664 [LNIND 1969 BOM 45] (Bom) (DB), per KK Desai J.
97 See, notes and comments under s 33.
98 Haribhau Shinde v IT 1970 Lab IC 664 [LNIND 1969 BOM 45] (Bom) (DB), per KK Desai J.
1 Northbrook Jute Co Ltd v Workmen (1960) 1 LLJ 580 [LNIND 1960 SC 87] (SC), per Das Gupta J.
2 Government of India (2002), Report of NCL-II, Chap 13, p 43, para 6.82.

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER IIA Notice of Change

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER IIA Notice of Change

3[S. 9B. Power of Government to Exempt.—

Where the appropriate government is of opinion that the application of the provisions of section 9A to any class of
industrial establishments or to any class of workmen employed in any industrial establishment affect the employers in
relation thereto so prejudicially that such application may cause serious repercussion on the industry concerned and that
public interest so requires, the appropriate government may, by notification in the Official Gazette, direct that the
provisions of the said section shall not apply or shall apply, subject to such conditions as may be specified in the
notification, to that class of industrial establishments or to that class of workmen employed in any industrial
establishment.]

EXEMPTION OF INDUSTRIAL ESTABLISHMENTS FROM SECTION 9A

This section empowers the ‘appropriate government’ to exempt certain class of industrial establishments or certain class of
workmen employed in any industrial establishments from the application of the provisions of s 9A. However, before the
Government makes the direction exempting any class of industrial establishments or class of workmen employed in any
‘industrial establishment’, the following requirements must be complied with:

(1) The appropriate government should have formed the opinion that:

(i) the application of the provisions of section 9A to any class of industrial establishments or to any class of workmen
employed in any industrial establishment affect the employers in relation thereto so prejudicially that such
application may cause serious repercussions on the industry concerned, and
(ii) public interest requires that such industrial establishments or a class of workmen employed in any industrial
establishment should be exempted from the application of section 9A.
(2) The direction of exemption and any conditions subject to which the direction of exemption is made should be made by a
notification in the Official Gazette of the ‘appropriate government’.

3 Ins by Act 36 of 1956, s 6 (wef 10-3-1957).

End of Document
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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER IIB Grievance Redressal Machinery

The Industrial Disputes Act, 1947 (Act 14 of 1947)

1CHAPTER IIB Grievance Redressal Machinery

S. 9C. Setting up of Grievance Redressal Machinery.—

(1) Every industrial establishment employing twenty or more workmen shall have one or more Grievance Redressal
Committee for the resolution of disputes arising out of individual grievances.
(2) The Grievance Redressal Committee shall consist of equal number of members from the employer and the
workmen.
(3) The chairperson of the Grievance Redressal Committee shall be selected from the employer and from among the
workmen alternatively on rotation basis every year.
(4) The total number of members of the Grievance Redressal Committee shall not exceed more than six:

Provided that there shall be, as far as practicable, one woman member if the Grievance Redressal Committee
has two members and in case the number of members are more than two, the number of women members
may be increased proportionately.

(5) Notwithstanding anything contained in this section, the setting up of Grievance Redressal Committee shall not
affect the right of the workman to raise industrial dispute on the same matter under the provisions of this Act.
(6) The Grievance Redressal Committee may complete its proceedings within thirty days on receipt of a written
application by or on behalf of the aggrieved party.
(7) The workman who is aggrieved of the decision of the Grievance Redressal Committee may prefer an appeal to
the employer against the decision of Grievance Redressal Committee and the employer shall, within one month
from the date of receipt of such appeal, dispose off the same and send a copy of his decision to the workman
concerned.
(8) Nothing contained in this section shall apply to the workmen for whom there is an established Grievance
Redressal Mechanism in the establishment concerned.]

1 Subs by Act 24 of 2010, s 6 (wef 15-9-2010 vide S.O. 2278 (E), dated 15-9-2010). Before substitution, Chap IIB (as inserted by Act
46 of 1982, s 7 ) stood as under:
“CHAPTER IIB
Reference of Certain individual disputes to grievance settlement authorities
S. 9C. Setting up of Grievance Settlement Authorities and reference of certain individual disputes to such authorities.—
(1) The employer in relation to every industrial establishment in which fifty or more workmen are employed or have been
employed on any day in the preceding twelve months, shall provide for, in accordance with the rules made in that behalf
under this Act, a Grievance Settlement Authority for the settlement of industrial disputes connected with an individual
workman employed in the establishment.
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

(2) Where an industrial dispute connected with an individual workman arises in an establishment referred to in sub-section (1), a
workman or any trade union of workmen of which such workman is a member, refer, in such manner as may be prescribed,
such dispute to the Grievance Settlement Authority provided for by the employer under that sub-section for settlement.
(3) The Grievance Settlement Authority referred to in sub-section (1) shall follow such procedure and complete its proceedings
within such period as may be prescribed.
(4) No reference shall be made under Chapter III with respect to any dispute referred to in this section unless such dispute has
been referred to the Grievance Settlement Authority concerned and the decision of the Grievance Settlement Authority is not
acceptable to any of the parties to the dispute.”

End of Document

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O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER III Reference of Disputes to Boards, Courts or Tribunals

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER III Reference of Disputes to Boards, Courts or Tribunals

S. 10. Reference of Disputes to Boards, Courts or Tribunals.—

(1) 1[Where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at
any time,] by order in writing—
(a) refer the dispute to a Board for promoting a settlement thereof; or
(b) refer any matter appearing to be connected with or relevant to the dispute to a court for inquiry; or
2[(c)refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, if it relates to any
matter specified in the Second Schedule, to a Labour Court for adjudication; or
(d) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, whether it relates
to any matter specified in the Second Schedule or the Third Schedule, to a Tribunal for adjudication:

Provided that where the dispute relates to any matter specified in the Third Schedule and is not likely to
affect more than one hundred workmen, the appropriate Government may, if it so thinks fit, make the
reference to a Labour Court under clause (c):]

3[Provided further that] where the dispute relates to a public utility service and a notice under section 22
has been given, the appropriate Government shall, unless it considers that the notice has been frivolously
or vexatiously given or that it would be inexpedient so to do, make a reference under this sub-section
notwithstanding that any other proceedings under this Act in respect of the dispute may have
commenced.

4[Provided also that where the dispute in relation to which the Central Government is the appropriate
Government, it shall be competent for that Government to refer the dispute to a Labour Court or an
Industrial Tribunal, as the case may be, constituted by the State Government:]

5[(1A) Where the Central Government is of opinion that any industrial dispute exists or is apprehended and the
dispute involves any question of national importance or is of such a nature that industrial establishments situated
in more than one State are likely to be interested in, or affected by, such dispute and that the dispute should be
adjudicated by a National Tribunal, then, the Central Government may, whether or not it is the appropriate
Government in relation to that dispute, at any time, by order in writing, refer the dispute or any matter appearing
to be connected with, or relevant to, the dispute, whether it relates to any matter specified in the Second Schedule
or the Third Schedule, to a National Tribunal for adjudication].
(2) Where the parties to an industrial dispute apply in the prescribed manner, whether jointly or separately, for a
reference of the dispute to a Board, Court, 6[Labour Court, Tribunal or National Tribunal], the appropriate
Government, if satisfied that the person applying represent the majority of each party, shall make the reference
accordingly.
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

7[(2A) An order referring an industrial dispute to a Labour Court, Tribunal or National Tribunal under this section
shall specify the period within which such Labour Court, Tribunal or National Tribunal shall submit its award on
such dispute to the appropriate Government:

Provided that where such industrial dispute is connected with an individual workman, no such period shall
exceed three months:

Provided further that where the parties to an industrial dispute apply in the prescribed manner, whether
jointly or separately, to the labour court, tribunal or national tribunal for extension of such period or for any
other reason, and the presiding officer of such Labour Court, Tribunal or National tribunal considers it
necessary or expedient to extend such period, he may for reasons to be recorded in writing, extend such
period by such further period as he may think fit:

Provided also that in computing any period specified in this sub-section, the period, if any, for which the
proceedings before the Labour Court, Tribunal or National Tribunal had been stayed by any injunction or
order of a civil court shall be excluded:

Provided also that no proceedings before a Labour Court, Tribunal or National Tribunal shall lapse merely
on the ground that any period specified under this sub-section had expired without such proceedings being
completed.]

(3) Where an industrial dispute has been referred to a Board, 8[Labour Court, Tribunal or National Tribunal] under
this section, the appropriate Government may by order prohibit the continuance of any strike or lockout in
connection with such dispute which may be in existence on the date of the reference.
9[(4)Where in an order referring an industrial dispute to 10[a Labour Court, Tribunal or National Tribunal] under this
section or in a subsequent order, the appropriate Government has specified the points of dispute for adjudication,
11[the Labour Court or the Tribunal or the National tribunal, as the case may be] shall confine its adjudication to

those points and matter incidental thereto.

(5) Where a dispute concerning any establishment or establishments has been, or is to be, referred to a 12[Labour
Court, Tribunal or National Tribunal] under this section and the appropriate Government is of opinion, whether
on an application made to it in this behalf or otherwise, that the dispute is of such a nature that any other
establishment, group or class of establishments of a similar nature is likely to be interested in, or affected by, such
dispute, the appropriate Government may, at the time of making the reference or at any time thereafter but before
the submission of the award, include in that reference such establishment, group or class of establishments,
whether or not at the time of such inclusion any dispute exists or is apprehended in that establishment, group or
class of establishments].
13[(6) Where any reference has been made under sub-section (1A) to a National Tribunal, then notwithstanding
anything contained in this Act, no Labour Court or Tribunal shall have jurisdiction to adjudicate upon any matter
which is under adjudication before the National Tribunal, and accordingly—
(a) if the matter under adjudication before the National Tribunal is pending in a proceeding before a Labour
Court or Tribunal, the proceeding before the Labour Court or the Tribunal, as the case may be, in so far as it
relates to such matter, shall be deemed to have been quashed on such reference to the National Tribunal; and
(b) it shall not be lawful for the appropriate Government to refer the matter under adjudication before the
National Tribunal to any Labour Court or Tribunal for adjudication during the pendency of the proceeding in
relation to such matter before the National Tribunal.]

14[Explanation—In this sub-section, ‘Labour Court’ or ‘Tribunal’ includes any Court or tribunal or other
authority constituted under any law relating to investigation and settlement of industrial disputes in force
in any State].

(7) Where any industrial dispute, in relation to which the Central Government is not the appropriate Government, is
referred to a National Tribunal, then notwithstanding anything contained in this Act, any reference in section 15,
section 17, section 19, section 33A, section 33B and section 36A to the appropriate Government in relation to
such dispute shall be construed as a reference to the Central Government but, save as aforesaid and as otherwise

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expressly provided in this Act, any reference in any other provision of this Act to the appropriate Government in
relation to that dispute shall mean a reference to the State Government.]
15[(8) No proceedings pending before a Labour Court, Tribunal or National Tribunal in relation to an industrial
dispute shall lapse merely by reason of the death of any of the parties to the dispute being a workman, and such
Labour Court, Tribunal or National Tribunal shall complete such proceedings and submit its award to the
appropriate Government.]

ORDER OF REFERENCE

‘Where Appropriate Government is of opinion’

Section 10(1) as originally enacted, opened with the words ‘if any industrial dispute exists or is apprehended’. On the
construction of those words in s 10, as it originally stood, the Madras High Court took the view that the decision of the
Government referring an ‘industrial dispute’ was amenable to judicial review and that the reviewing court could look into
even the questions whether an ‘industrial dispute’ factually existed or was apprehended.16 The High Court pointed out that
from the words ‘if any industrial dispute exists or is apprehended’, it was not clear as to who was to decide whether an
industrial dispute is ‘existing’ or is ‘apprehended’? and the difficulty was accentuated in the case of an ‘apprehended’
industrial dispute. The vagueness in penning the unamended s 10(1) was also noted by the Supreme Court in United
Commercial Bank,17 where Chandrasekhara Iyer J posed the question, ‘whose apprehension is referred to in the Act; the
government’s or the parties’ or the tribunal’s or anyone else’s? What is to happen if the apprehension does not crystallise
into an actual dispute before the tribunal enters on its duties as regards the reference? Is the tribunal bound even then to
take note of the mere apprehension and proceed to decide a dispute notwithstanding the fact that the parties say that there is
no dispute between them?’ Since, these questions did not fall for decision in the case, the court left them undecided with
the laconic remark, ‘these are interesting questions of wide import’. Section 10(1) was amended by the Industrial Disputes
(Amendment) Ordinance 1951 and the words ‘where the appropriate government is of opinion that the industrial dispute
exists or is apprehended, it may at any time by an order in writing refer the dispute...’, were substituted for the words: ‘if
any industrial dispute exists or is apprehended the appropriate government may, by order in writing, refer the dispute...’
Thus, the vagueness pointed out in the United Commercial Bank was removed by the legislature. But shortly afterwards, a
Constitution Bench of the Supreme Court presided over by Patanjali Sastri CJI including all the three judges of the Bench
which decided United Commercial Bank, on the construction of unamended s 10(1), in CP Sarathy, stated the following
propositions:

(i) the government should satisfy itself, on the facts and circumstances brought to its notice, in its subjective opinion that an
‘industrial dispute’ exists or is ‘apprehended’;
(ii) the factual existence of a dispute or its apprehension and the expediency of making reference are matters entirely for the
government to decide;
(iii) the order making a reference is an administrative act and it is not a judicial or a quasi-judicial act; and

(iv) the order of reference passed by the government cannot be examined by the High Court in its jurisdiction under Article
226 of the Constitution to see if the government had material before it to support the conclusion that the dispute existed
or was apprehended.18

Though these propositions were based on the unamended Act, which did not contain the words ‘where the appropriate
government is of opinion’, the court implied the formation of ‘subjective opinion’ by the appropriate government, in the
words ‘if any industrial dispute exists or is apprehended’.19 But in Western India Match Co, referring to the observations of
Patanjali Sastri CJI in CP Sarathy case that the function of the appropriate government to make a reference under s 10(1) is
an administrative function, speaking for the Supreme Court, Shelat J said:

It was so held presumably because the government cannot go into the merits of the dispute, its function being only to refer such a
dispute for adjudication so that the industrial relations between the employer and his employees may not continue to remain
disturbed and the dispute may be resolved through a judicial process as speedily as possible.20

In Rohtas Industries. commenting on the observations in CP Sarathy, Hegde J held:

This interpretation of section 10(1) is based on the language of that provision as well as the purpose for which the power in

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question was given and the effect of a reference. That decision cannot be considered as an authority for the proposition that
whenever a provision of law confers certain power on an authority on its forming a certain opinion on the basis of certain facts, the
courts are precluded from examining whether the relevant facts on the basis of which the opinion is formed had in fact existed. 21

A subtle distinction was drawn that ‘the existence of circumstances but not the opinion’ was open to judicial scrutiny. In
Shambhu Nath Goyal, referring to the language of s 10(1), the court pointed out that the power conferred on the
government by this provision to refer the dispute can be exercised only when there is an existing or apprehended industrial
dispute.22 Implicit in the power of making reference is ‘the existence of the satisfaction that what is referred to is an
industrial dispute’.23 In this case, after referring to earlier dicta, the court held that ‘in making reference under s 10(1), the
“appropriate government” is doing an administrative act and the fact that it has to form an opinion as to the factual
existence of an industrial dispute as a preliminary step to the discharge of its function does not make it any less
administrative in character’. Thus, there is a considered body of judicial opinion that while exercising power to or of
making a reference under s 10(1), the appropriate government performs an administrative act and not judicial or quasi-
judicial act.24 The satisfaction of the existence of an industrial dispute or the satisfaction that an industrial dispute is
apprehended is ‘a condition precedent to the order of reference’. An order of reference cannot be made mechanically
without forming an opinion. For formation of the necessary opinion, the ‘appropriate government’ must also be satisfied
that a person whose dispute is being referred for adjudication is a ‘workman’. If the dispute is not between an employer
and his workman, it is not an ‘industrial dispute’ and the Government can justifiably refuse to refer the dispute. From the
material placed before it, the Government reaches an administrative decision whether there exists an existing or
apprehended industrial dispute. In either event, it can exercise the power under this section.

The adequacy or the sufficiency of the material on which the opinion was formed, is beyond the pale of judicial scrutiny. If
the action of the Government in making the reference is impugned by a party, it would be open to such a party to show that
what was referred was not an industrial dispute and that the tribunal had no jurisdiction to make the award but if the
dispute was an industrial dispute, its factual existence and the expediency of making a reference in the circumstances of a
particular case are matters entirely for the Government to decide upon, and it will not be competent for the court to hold
the reference bad and quash the proceedings for want of jurisdiction merely because there was, in its opinion, no material
before the Government on which it could have come to an affirmative conclusion on those matters.25 The Government is
not required to serve a notice on the management before making a reference under s 10 of the dispute raised by the
Employees Association relating to the categorisation of employees.26 The nature of the process of formation of the
‘opinion’ may be stated in the inimitable words of Lord Denning in Trinidad Cement.

True it is that the governor has to enquire and, no doubt, he did-in his administrative capacity, but he had not to conduct anything
in the nature of judicial or quasi judicial inquiry.27

The order making reference under s 10(1) is an ‘unspeaking’ order which to use Lord Summer’s famous phrase ‘speaks
only with the inscrutable face of a sphinx’.28Therefore, the opinion of the government, under s 10(1) in referring the
dispute, in this sense, is subjective and is not open to judicial scrutiny. In other words, the court cannot canvass the order of
reference closely to see if there was any material before the government for coming to its conclusion as if it was judicial or
a quasi-judicial determination but it will be open to a party seeking to impugn the award resulting from the order of
reference to show that what was referred by the government was not an ‘industrial dispute’ at all within the meaning of the
Act and the tribunal had no jurisdiction to make the award. No doubt, it is for the government to be satisfied about the
existence or apprehension of the dispute. However, it would be open to the party impugning the reference that there was no
material before the government, and it would be open to the tribunal to examine the question, but that does not mean that it
can sit in appeal over the decision of the government and come to a conclusion that there was no material before the
government. Furthermore, the question whether an industrial dispute existed on the date of the reference is a question of
fact to be determined by the tribunal on the material placed before it.29 When the ‘appropriate government’ makes a
reference of an industrial dispute for adjudication, it does not decide any question of fact or law. The only condition which
the exercise of that power should satisfy, is that there should be the existence or apprehension of an industrial dispute.
When once the government is satisfied about this question, it acquires jurisdiction to refer the dispute for adjudication.30
However, the condition precedent to the formation of such opinion, that there should be an existing or apprehended
‘industrial dispute’ is imperative and the recitals of the existence or apprehension of the industrial dispute cannot preclude
the judicial review from going behind those recitals and in determining whether, in fact, there was any material before the
‘appropriate government’ and if there was, whether the government applied its mind in coming to the conclusion that an
industrial dispute was in existence or was apprehended, and it was expedient to make the reference. Therefore, an order of
reference is open to judicial review, if it is shown that the appropriate government had no material before it or it has not
applied its mind to the material before it or has not taken into consideration certain vital facts which it ought to have taken
into consideration.31

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It is now well established that ‘the discretion is neither unfettered nor arbitrary, for s 10(1) clearly provides that there must
“exist” an “industrial dispute” as defined by the Act or such a dispute must be ‘apprehended’ before the government
decides to refer it for adjudication’.32 The law takes note of certain well-recognised principles regarding the exercise of
discretionary power. There must be a real exercise of discretion ie, the authority must be exercised honestly and not for
corrupt or ulterior purposes. In dealing with this problem, therefore, it is necessary to discern that the exercise of the
discretionary power depends upon the honest formation of opinion that an industrial dispute is in existence or is
apprehended and further that it will be expedient to make the reference after applying the mind to the relevant material
before the government. The words ‘where the appropriate government is of opinion’ indicate that the opinion must be
formed by the appropriate government and it is of course implicit that the opinion must be an honest one.33Furthermore,
the appropriate government must act reasonably and not capriciously or arbitrarily nor according to whims or fancies. It
will be an absurd exercise of discretion if, for example, the government forms the requisite opinion on account of pressure
by any political party. Within these narrow limits, the opinion is not conclusive and, can be challenged in a court of law.34
In English cases also, there are dicta to the effect that, if there were no grounds on which an authority could be satisfied,
the court might infer that it had not applied its mind to the relevant facts or did not honestly hold the view expressed to be
taken and that the court would interfere if there were no materials before the authority upon which it could be reasonably
‘satisfied’ that the order should be made.35 In other words, the order of reference can be challenged by establishing bad
faith or mala fide and corrupt motive as bad faith will destroy any action. However, bad faith or corrupt motive will be a
matter to be established by the party alleging or propounding bad faith or corrupt motive by affirming and stating the facts.
These facts are not only to be alleged but also have to be proved.36

The discretion of the government to make an order of reference is dependent on the satisfaction of these requirements and
no jurisdiction outside the section which empowers making a reference can be exercised. In Sindhu Resettlement Corpn, in
the first instance, the workman demanded reinstatement which the employer declined. Then he claimed retrenchment
compensation, which too was declined in the circumstances of the case. The dispute was taken up by the union claiming
retrenchment compensation for the workman on the ground that the employer had failed to take him back in its
employment. The conciliation proceedings failed, subsequently on the basis of the failure report of the conciliation officer,
the state of Gujarat referred the dispute relating to the reinstatement of the workman for adjudication to an industrial
tribunal and the tribunal awarded reinstatement with full back wages. This award was challenged on three grounds, one of
which was that the reference with respect to the reinstatement was not valid, because the dispute about reinstatement was
not raised by the workman or the union with the management. This challenge was sustained by the Supreme Court with the
observations thus:

If no dispute at all was raised by the respondents with the management, any request sent by them to the government would only be
a demand by them and not an industrial dispute between them and their employer. An industrial dispute, as defined, must be a
dispute between employers and employers, employers and workmen and workmen and workmen. A mere demand to a
government, without a dispute being raised by the workmen with their employer cannot become industrial dispute...The
government had to come to an opinion that an industrial dispute did exist and that opinion could only be formed on the basis that
there was a dispute between appellant and the respondents relating to reinstatement. 37

This view is not correct on the facts or in law. Though the court noticed that ‘it may be that conciliation officer reported to
the government that an industrial dispute did exist relating to the reinstatement’ of the workman and payment of back
wages to him, it pointed out that no such dispute, in fact, was raised either by the workman or the Union with the employer
before going to the conciliation. As already stated, the workman at the outset claimed reinstatement and that having been
declined, he claimed the retrenchment compensation. From this claim for retrenchment compensation, the court has
inferred that the claim regarding reinstatement was given up. But it has not given effect to the word ‘difference’ in the
definition of ‘industrial dispute’, Even if subsequently, the workman and the union claimed retrenchment compensation,
the ‘difference’ of opinion relating to reinstatement and back-wages continued to exist. Furthermore, the court also does
not appear to have appreciated that the conciliation proceedings, are not adjudication proceedings but they are merely
negotiations between the parties with the mediation of the conciliation officer for bringing about a settlement of an
‘apprehended’ or ‘existing’ industrial dispute. Therefore, it is open, for one party to raise a claim and the other party to
reject it in the conciliation proceedings and this would be a ‘difference’ or ‘dispute’ qua that claim between the employer
and the workmen. Even if such a dispute was not actually existing before going to the conciliation, it could well be
‘apprehended’ and would come into ‘existence’ as soon as the claim is rejected before the conciliation officer.38 This is
what exactly happened in this case. Before the conciliation officer, the dispute relating to reinstatement and back-wages
did exist on which he made a failure report which was the foundation of the reference. It is not necessary that the dispute
should have become an ‘existing dispute’ before the conciliation officer. The law requires that the ‘industrial dispute’ must
exist or be apprehended on the date of the reference.39 It could not, therefore, be said that the government based its opinion
on material which was not relevant to the formation of opinion. The decision on this point requires reconsideration. From

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the use of the words ‘any industrial dispute exists or is apprehended’, it is obvious that the existence or apprehension of an
‘industrial dispute’ is a condition precedent to the making of the reference.40

CP Sarathy (supra) provides an illustration of a reference of an apprehended dispute. In this case, at the relevant time, there
was no actual existing dispute between a particular employer owning a cinema theatre and his workmen but the
government made a reference of an industrial dispute existing in the cinema industry as a whole in the town of Madras
including the cinema of the employer. The Supreme Court upheld the validity of the order of reference on the basis of the
expression ‘apprehended’ used in this section. In Pradip Lamp Works. the court held that the reference of an industrial
dispute to avert a threatened strike was an ‘existing’ or at any rate an ‘apprehended’ industrial dispute.41 But in ITC, the
order of reference was attacked on the ground that it was mechanically made by the government without application of
mind inasmuch as the use of the composite phrase, ‘exists or apprehended’ in the order, demonstrated that there was no
application of mind of the authorities concerned making the order of reference. It was pointed out that, on the facts of the
case, either an ‘industrial dispute’ ‘existed’ or it could be ‘apprehended’ and it could not be both. The use of the words ‘or
is apprehended’ in the order of reference was a mere surplusage and did not necessarily lead to the conclusion that the
reference was made in a cavalier manner without any application of mind.42

A dispute comes into ‘existence’ as soon as it is raised by one party with the other and is rejected by the other and once
having come into existence, it continues unless it is settled by means of a settlement, adjudication or arbitration.43 The
question whether an industrial dispute was raised or not is a question of fact. It must, therefore, be raised before the
tribunal. It cannot be allowed to be raised for the first time before the High Court in its jurisdiction under Art. 226 or
before the Supreme Court in appeal under Art. 133 or Art. 136 of the Constitution. However, no reference can be made by
the ‘appropriate government’ unless at the time when it decides to make the reference, an ‘industrial dispute’ between the
employer and his employees either existed or was apprehended and the reference it makes must be with regard to that and
no other industrial dispute.44 These requirements postulate the absence of a general discretion to go on a fishing expedition
to find evidence. No doubt the formation of opinion is subjective, but the existence or apprehension of a dispute, of the
nature of an industrial dispute which is a sine qua non for making an order of reference, must be demonstrable. If the order
of reference is questioned on the ground that there was no material before the ‘appropriate government’ leading to the
conclusion of the apprehension or existence of an industrial dispute, the order of reference might be amenable to
interference in judicial review, despite its being an administrative order. Since the ‘existence’ or ‘apprehension’ of an
‘industrial dispute’, is a condition fundamental to the forming of opinion, it must be proved at least prima facie. In other
words, at least it must be shown that the government formed an opinion that an ‘industrial dispute’ existed or was
apprehended between the parties before a valid reference could be made.

Ordinarily, after an order or reference has been made, the writ court does not interfere and the question of the validity of
the reference is left to the tribunal to decide. Nevertheless, if the court finds that the government has acted in clear
contravention of the provisions of law or has taken its decision on extraneous or irrelevant considerations and no
investigation into the disputed facts is involved, it can, in appropriate cases, entertain a writ petition against the order of
reference. For instance, in Jaipur Polyspin, there was absolutely no material before the government on the basis of which it
could have directly or indirectly made a reference with regard to bonus for the years 1982-83 to 1986-87 while the
conciliation report unmistakably related to the claim for bonus for the year 1987-88.45 In the absence of any dispute or
difference between the parties regarding the claim for bonus for the year 1982-83 to 1986-87, a single judge of the
Rajasthan High Court held that the appropriate government was not competent to make reference for the years other than
1987-88 but in what types of cases, the writ court will interfere would depend on the facts and circumstances in each case.
In Aulia Bidi Factory, Burhanpur v Industrial Tribunal ,46 the state government was made a respondent party in the writ
petition filed against the award of the industrial tribunal but no reply was filed on behalf of the state and, therefore, there
was no material whatsoever before the High Court to show as to what material, if any, the government had before it on the
basis of which it formed its opinion that an industrial dispute existed between the parties. The High Court, therefore, held
that the opinion being based on no material, the consequent reference was invalid in law. The impugned award of the
tribunal, adjudicating upon that reference was, therefore, quashed. It is not sufficient to assert that the circumstances exist
which give no clue as to what they are because the circumstances must be such as to lead to conclusions of certain
definiteness. An order of reference made by a government, without applying its mind to the materials and facts before it, in
the light of the law laid down by judicial pronouncements in this behalf, would be manifestly erroneous and without
jurisdiction and, as such liable to be quashed.47

The power to make an order of reference under s 10(1) arises as soon as the necessary opinion is formed by the appropriate
government as to the existence or apprehension of an industrial dispute. The opinion, therefore, is naturally to be formed
before the order is made. Hence, if the opinion was formed and an order was made after that, it will be a valid exercise of
the power. The mere fact that the formation of opinion was not recited in the order would not take away the power to make
the order. The validity of the order, therefore, does not depend upon the recital of the formation of opinion or on giving the
details of facts upon which opinion is formed in the notification of reference, but on the factual formation of the opinion on

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the basis of the relevant material. If, by inadvertence or otherwise, the recital of the formation of opinion is not mentioned
in the preamble to the order, the defect can be remedied by showing other evidence to the effect that the order was made
after forming such opinion and that there was a valid exercise of the power. If, on the other hand, the order ex facie valid
contains a recital that the condition precedent is satisfied, the court would presume that the necessary condition was
fulfilled and the burden will be on him, who challenges the accuracy of the recital, to prove that it was incorrect.48 Nor is it
necessary that the government should disclose, either in its notification or in its counter-affidavit, details of facts on which
it formed its opinion and came to the conclusion that it is expedient to make the reference.49 The stage of dispute is not
relevant consideration, but the consideration germane for making a reference is the dispute. It would not make any
difference as to whether the dispute between the employer and the workmen was at the stage of workmen’s suspension or
they happened to be dismissed in pursuance of the domestic inquiry that were held in the intervening time.50 An order of
reference made by a notification not authenticated by a secretary, additional secretary, joint secretary, deputy secretary,
under secretary or such other officer empowered by the President under Art. 77 or by the Governor under Art. 166 of the
Constitution in that behalf, to authenticate the notifications issued under the Act, will not be a valid order.51 In making the
order of reference which is an administrative function, the appropriate government is, under s 10(1)(2), required to form its
opinion after applying its mind to the material before it but the government is not required to give a hearing to the parties
before making the reference as the tribunal has jurisdiction to decide the controversy even with respect to the validity of
the reference after giving hearing to the parties.52Unless the order of reference discloses the illegality on its face, it is not
reviewable. Unlike s 12(5) of the Act, it is not necessary to state reasons for making the reference in the order of
reference.53 Though, the rules of natural justice would apply even to administrative orders, it is not necessary that
administrative orders, like the order of reference under s 10(1) should be speaking orders unless the statute specifically
enjoins such a requirement.54 Joint reference by the government of a dispute relating to termination or retrenchment of
several employees working in different branches of the bank is valid.55 In Indian Tea Assn, the Supreme Court summarised
the law relating to the powers of government while making a reference of a dispute as follows:

(1) The appropriate government would not be justified in making a reference under section 10 of the Act without satisfying
itself on the facts and circumstances brought to its notice that an industrial dispute exists or apprehended and if such a
reference is made, it is desirable wherever possible, for the government to indicate the nature of dispute in the order of
reference.
(2) The order of the appropriate government making a reference under section 10 of the Act is an administrative order and is
not a judicial or quasi-judicial one, and the court, therefore, cannot canvass the order of reference closely to see if there
was any material before the government to support its conclusion, as if it was a judicial or quasi-judicial order.
(3) An order made by the appropriate government under section 10 of the Act being an administrative order, no lis is
involved as such an order is made on the subjective satisfaction of the government.
(4) If it appears from the reasons given that the appropriate government took into account any consideration irrelevant or
foreign material, the court may in a given case, consider the case for a writ of mandamus.
(5) It would, however, be open to a party to show that what was referred by the government was not an industrial dispute
within the meaning of the Act. 56

Following the decision rendered in Indian Tea Assn, a single Judge of Gujarat High Court held that the refusal by the
Central Government to make a reference of the dispute after forming an opinion, on facts, to the effect that the person
raising the industrial dispute was not a ‘workman’ and that there was no direct employer-employee relationship, the High
Court held that such a refusal did not suffer from any infirmity.57

Refusal to make a Reference

In Bombay Journalists, Gajendragadkar J, held a prima facie examination of the merits is not foreign to the enquiry which
the government is entitled to make in dealing with a dispute under s 10(1). The learned judge identified two circumstances
in which it would be incompetent for the government to refuse to make a reference:

(i) where the dispute raises questions of law; and

(ii) where it involves disputed questions of fact, because both these circumstances fall within the province of the Tribunal.58

Where a particular matter is covered under a previous settlement or award which is in force, a subsequent reference of the
matter for adjudication is incompetent. If, however, a demand made by the workmen earlier was withdrawn or was not
pressed and hence is not covered by the previous settlement or award, the bar of ss 18 and 19 does not operate and the

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subsequent reference and adjudication as to that demand is competent and valid.59 A second reference of an almost
identical matter already covered by an award unless properly terminated under s 19 of IDA is invalid.60 The refusal by the
government to refer a dispute relating to dismissal of a workman, on the sole ground of absence of mala fides on the part of
employer, is bad in law, because the determination as to the presence or absence of mala fides is a judicial function and
hence not within the competence of the government.61 It is mandatory for the government to record and communicate the
reasons to the parties concerned, where the dispute has gone through conciliation and a failure report has been submitted. If
the government refuses to refer the dispute on extraneous grounds, irrelevant considerations or acts of mala fide, the party
would be entitled to move the High Court for a writ of mandamus.62 The existence of satisfaction, that what was referred
was an industrial dispute, was implicit in the power to make a reference.63 The discretion conferred on the government was
neither unfettered nor arbitrary.64 From the aforesaid discussion, the legal position can be summed up thus: The
government has the power to validly refuse to make a reference, if any of the following four conditions are satisfied:

(i) The claim is patently frivolous or vexatious; or

(ii) It is clearly belated or, in other words, has become stale; or

(iii) The dispute, if referred for adjudication, is likely to impact the general relations between the employers and the
employees in the region adversely; and
(iv) The matter is covered by a subsisting settlement or award.

In other words, the power to make a reference is administrative and/or discretionary and is absolute in so far as the
government is under no obligation to justify its decision. However, this absolute power is not available while refusing to
make a reference, in which case the government is under a statutory obligation to communicate the reasons to the parties.
In Union Bank of India, the facts were: the government refused to make a reference of the dispute relating to the increase
in the rate of interest by the bank for loans to employees. Kochar J held that the refusal was without jurisdiction and
directed the government to refer the dispute.65 Where the government refused to make a reference on the ground that “the
workman has not substantiated his arguments with documentary evidence; that he has not worked for more than 120 days
in 12 consecutive months”, Kulashrestha J of Madhya Pradesh High Court, while quashing the order, observed that the
order amounted to adjudication of the dispute and that the government could not have undertaken adjudication of the
disputed facts.66 The reason given by the government, that the employer was not an ‘industry’, amounted to adjudication of
the dispute and the refusal to refer the dispute on that ground is invalid.67 In Rathinaswamy, the Central Government
refused to refer the dispute relating to the conferment of permanence on ‘temporary messengers’ on the ground that the
matter was covered by a settlement entered into under s 18(1) between the State Bank of India and the majority union.
Directing the government to make a reference of the dispute, the Madras High Court held that it was not proper for the
government to decide such contentious issues, which could only be resolved by adjudication.68 In Amts Karmachari Sangh,
the government refused to make a reference on the ground that there was no employer-employee relationship between the
parties. Quashing the impugned order of the Dy. Labour Commissioner (who represented the appropriate government),
Upadhyay J of Gujarat High Court observed that the reasoning of the government stands in direct conflict with the
provisions of s 2(k) and s 2A of the Industrial Disputes Act in so far as the question whether there existed employer-
employee relationship and whether the workman was entitled to relief were matters to be decided by a labour court or
industrial tribunal.69

In Sarva Shramik Sangh, the facts briefly were: The appellant union filed a writ petition in 1999 in the Bombay HC
seeking the following reliefs: (i) a direction to the Central Government to hold an investigation under s 10 of CLRAA on
an application made by it earlier (in 1998) and make an order abolishing the contract labour system in respect of workmen
working in the canteen of the Marketing division of IOC; and (ii) a direction to IOC to absorb/regularize the services of
said workers. The writ petition was dismissed for want of prosecution in November 2003. Thereafter, the union filed
another writ petition in HC in 2004 contending that the contract between IOC and the canteen contractor was sham and
bogus and seeking a direction to the Central Government to refer the dispute relating to the permanency of canteen
workers. The HC issued a direction to the Central Government to consider and dispose of the request for reference with a
further direction to maintain status quo in respect of the workmen concerned till the disposal of reference application. In
pursuance of it, conciliation proceedings were held and the conciliation officer sent a failure report in September 2004. The
Central Government by its order of 21 December 2004 refused to make a reference on the ground that “the workmen were
not appointed by IOC, but were engaged by the contractor having a valid and legal contract”. The union filed a writ
petition against the said order, which was dismissed by the High Court on the following grounds: (a) that the union had
earlier filed a writ petition for abolition of contract labour in the canteen of IOC, which was dismissed in 2003 for non-
prosecution and attained finality; (b) that the union, once having sought the relief of abolition of contract labour, was
estopped from seeking any other relief by contending that the contract was sham and not genuine; and (c) that the order of
Central Government refusing to make a reference did not suffer from any infirmity or arbitrariness. One of the issues were

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canvassed before SC was “whether the decision of the Central Government refusing reference requires interference.”
Raveendran, J (for self and Panta, J), cited several decisions of SC commencing from CP Sarathy and observed that the
facts of present case were squarely covered by the decision in Ram Avtar Sharma (supra). The learned Judge finally held:

... it can safely be concluded that a writ of mandamus would be issued to the appropriate Government to reconsider the refusal to
make a reference, where (i) the refusal is on irrelevant, irrational or extraneous grounds; (ii) the refusal is a result of the appropriate
government examining the merits of the dispute and prejudging/adjudicating/determine the dispute; (iii) the refusal is mala fide or
dishonest or actuated by malice; (iv) the refusal ignores the material available in the failure report of the Conciliation Officer and is
not supported by any reason. ()...we allow this appeal and direct the Central Government to reconsider the matter in the light of the
observations above and take an appropriate decision on the request for reference of the dispute to the Industrial adjudicator. As and
when the state (sic) Government makes the reference, it is for the Industrial Tribunal to consider the dispute on merits, on the basis
of materials placed before it, uninfluenced by the observations of the High Court or this Court. 70 ()

Withdrawal, Cancellation or Supersession of Reference

There will be withdrawal of a reference when the dispute which has been referred is taken out of the purview of the
tribunal and there will be supersession of a previous reference when the second reference comprises matters or disputes
totally unconnected with or different from the disputes originally referred.71 In DN Ganguli, the Supreme Court held that
the government has no power, either express or implied, to cancel or withdraw a reference after it has made the order of
reference. An order cancelling, withdrawing or superseding a reference would, therefore, be incompetent and invalid and
would be liable to be struck down being ultra vires the power of the ‘appropriate government’ under the Act.72 The
reviewing court cannot direct the ‘appropriate government’ to withdraw a reference simply because the government has
discretion in the matter of making a reference and the parties have no legal right in the matter.73 This is so because the
appropriate government cannot be directed to exercise a power which it does not possess, ie the power to withdraw a
reference.74 The reason is that upon a tribunal ceasing to exist, it cannot proceed further with the pending adjudication.
Further, unless a dispute is referred to it under s 10(1), the new tribunal constituted under s 7A, cannot proceed with the
adjudication of the industrial dispute even though such a dispute was pending adjudication before the old
tribunal.75However, the distinction between the tribunal and its presiding officer is to be borne in mind. If the tribunal itself
lapses, the question of a fresh reference arises but where the tribunal constituted under s 7A continues and the term of the
presiding officer expires, the vacancy so caused may be filled in under s 8. In such cases, it would not be necessary to
make a fresh reference. There is no express power in the ‘appropriate government’ by its executive act, to abolish a
tribunal after referring a dispute to it under s 10(1) till it makes an award. Nor does it possess jurisdiction to refer the same
dispute to another tribunal by abolishing the tribunal before which such dispute was pending adjudication.76

In Lipton, the government, while making reference, omitted to include certain demands of the employees and all the
demands of management. Subsequently, realising that the presiding officer had retired, the government made another
reference substituting the name of another person in place of the first presiding officer. In this reference, the government
incorporated the demands of the employees which had not been included in the first reference. This order of reference was
challenged by the management by a writ petition. Meanwhile, the government made yet another reference including some
of the demands of the employees and only three demands out of nine demands of the management. The management
amended its writ petition by including the third reference as well. A single judge of the Bombay High Court (Nagpur
Bench) held that the third order of reference was bad to the extent it dropped the six demands of the management out of the
nine included in the first order of reference, but upheld the validity of the remaining reference. In connection with the word
‘supersession’ used in the second order of reference, the court observed that it was a mere misnomer because the third
order of reference made explicit by adding some more demands though it did not use the expression ‘supersession’. After
the amendment of 1956, the government can withdraw an ‘industrial dispute’ pending before a tribunal or any other
adjudicatory authority and transfer the same to another but from the language of that provision, it is clear that whenever the
government decides to withdraw a reference from an adjudicatory authority, it has to transfer the same to another
adjudicatory authority. It is not that the government can withdraw the reference from adjudication after once having made
the reference.77 In Indian Rayon, a single judge of Gujarat held that, while it is well settled that the appropriate government
can vary and amend the terms of reference, it has no power to cancel the reference once made. The learned judge further
observed that the petitioner-company at whose instance, the order of reference was passed was not given opportunity of
hearing, and thus the order cancelling the earlier order of reference was illegal and bad in law both for want of express or
implied jurisdiction and for being in violation of the principles of natural justice.78

Note: For further discussion, see notes and comments under s 33B -captioned ‘Power of the Government to withdraw and
transfer certain proceedings’.

Amendment or Correction of Reference

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The question whether after making the order of reference, the ‘appropriate government’ could subsequently amend it, was
considered by the Madras High Court in South India Labour Relations Organisation, and it was held that it is open to the
government to make, under s 10, an independent reference concerning any matter not covered by the previous
reference.79The consensus of judicial opinion, as can be discerned from the decisions of several High Courts, is that while
the appropriate government acting under s 10, has the power to add to or amplify, a matter already referred for
adjudication, it will have no power to supersede or cancel the old reference in such a way as to effect a withdrawal of the
reference validly referred. There is no bar to the application of the rule of construction embodied in s 21 of the General
Clauses Act 1897 insofar as it is consistent with the Act and is not likely to defeat its purpose. The logical conclusion,
therefore, is that any amendment, addition or modification which the government can make subsequent to the order of
reference cannot go to the length of superseding or withdrawing the original reference.80 Though, the government has the
power to rectify or correct the previous order of reference,81 under the guise of amending or correcting the previous order
of reference, the order of amendment or the corrigendum tantamounting to supersession of the previous order of reference
cannot be validly made because such an order would be ultra vires the power of the government.82 But there is no bar to
amend a pending reference by a subsequent notification which is in the nature of addition to or amplification of the issue
already referred to adjudication. This is so because amending a reference relating to a pending dispute by way of addition
or amplification thereto is not inconsistent with any of the provisions of the Act and adoption of such a course would not
defeat the purposes of the Act. The crux of the problem is as to whether the amendment which is sought to be made by a
subsequent order of the State Government is merely an amplification of or is supplemental to or makes an addition to the
matters already referred to for the decision of the industrial tribunal or the labour court concerned or whether it amounts to
the revocation or cancellation or withdrawal or supersession of the reference already made or of any of the issues contained
in the earlier reference.83

However, clerical errors can always be corrected and such correction does not amount either to withdrawal of, or
cancellation of, the order of reference.84 In other words, the appropriate government can amend a reference by way of
addition or modification so long as the amendment does not have the effect of withdrawing or superseding the reference
already made. Similarly, the government has the power to issue a second order of reference for correcting an obvious
mistake or terminological error which has inadvertently crept in the first order of reference. In Bombay Gumasta Union,
the order of reference contained a mistake, in that an officer of the government clubbed 13 respondents describing them as
‘Kumar Group of Companies’ though the conciliation proceedings related to each and everyone of the 13 respondents.
This mistake was noticed by the tribunal and the government by a corrigendum for the words ‘Kumar Group of
Companies’, the names of the 13 respondents were incorporated. A single judge of the Bombay High Court held that the
government had simply corrected the mistake it had committed in the title to the reference. In these circumstances, it could
not be said that the government had substituted new parties in the place of the old ones. The corrigendum, therefore, was
only a correction and nothing more. The reference, therefore, was not incompetent. The cardinal principle in determining
the question, whether the amendment amounts to a correction of clerical error or introduction of fresh material, is whether
the relief claimed by the aggrieved party in the original notification can be granted in the proceedings which are to take
place in pursuance of the amended notification.85 If the same relief can be granted, the mistake may be considered as
clerical which can be corrected by amendment. But if the same relief cannot be granted, then it means that the original
notification has been cancelled or withdrawn and another notification has been issued in its place which the appropriate
government is not competent to do.86 The government has no authority to amend the reference for adjudication to implead
the company as party to the dispute between the canteen contractor and its workman, when the Division Bench of the High
Court had earlier ruled that impleading of the company was illegal and it stood deleted from the array of parties before the
tribunal.87 Under s 10, the government has the power to amend the existing reference pending before the labour court. It is
also not necessary to issue notice to the employer and consider his objections before making reference on the second
application.88 The government has inherent powers to correct apparent errors in its reference, but that does not mean that
the government has power to (review) recall its earlier order of reference.89

‘Appropriate Government at any time may refer’

It is the appropriate government which has the power to make the reference. Hence, the reference of a dispute by a
government which is not the appropriate government will not be valid but a reference may be made by any authority duly
authorised by the appropriate government. In Bharat Textile Mills, the notification making the reference of an industrial
dispute for adjudication was issued in the name of the President of India and was made and signed by the labour
commissioner who had been vested with the powers exercisable under ss 10 and 12(5) in relation to the industrial disputes.
The Punjab and Haryana High Court held that the notification was neither void nor without jurisdiction and was, therefore,
not liable to be quashed and the award made on such reference was not without jurisdiction. The words ‘at any time’
preceded by the word ‘may’ in s 10(1), indicate the intention of the legislature that the government has discretion to refer a
dispute at any time, if it is of the opinion that an industrial dispute is existing or is apprehended.90 This gives rise to the
following questions:

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(i) whether the conciliation proceedings are a condition precedent in the making of the order of reference?
(ii) Whether during the pendency of the proceedings for ‘permission’ or ‘approval’ of the action of discharge or dismissal of
a workman, before an authority under Section 33, a reference of the dispute relating to such discharge or dismissal can
validly be made for adjudication?
(iii) whether once having refused to make a reference the appropriate government can subsequently make a reference of the
same matter? and
(iv) whether there is any limitation in making the order of reference?

These questions have given rise to some judicial discussion and are, therefore, dealt in some detail hereunder:

(i) Conciliation Proceedings

In Avon Services (supra), Desai J held that s 12 casts duty upon the conciliation officer to hold conciliation proceedings in
respect of the industrial dispute that exists or is apprehended. It is mandatory on the conciliation officer to hold the
conciliation proceedings where the dispute relates to a public utility service and a strike notice has been served under s 22.
The conciliation officer must try to promote a settlement between the parties. Either he succeeds in bringing the parties to a
settlement or fails in his attempt. In either case, he must submit a report to the appropriate government. But the procedure
for promoting settlement cannot come in the way of the appropriate government making reference even after such a report
is received. In WIMCO, Shelat J observed:

Ordinarily, the question of making a reference would arise after conciliation proceedings have been gone through and the
conciliation officer has made a failure report. But the government need not wait until such a procedure has been completed. In an
urgent case, it can ‘at any time’ ie even when such proceedings have not begun or are still pending, decide to refer the dispute for
adjudication. The expression ‘at any time’ thus takes in such cases as where the government decides to make a reference without
waiting for conciliation proceedings to begin or to be completed.91

There is nothing in s 10(1) to indicate that the ‘appropriate government’ has to wait for the conciliation officer’s report
under s 12(4). The second proviso to s 10(1) makes it obligatory on the ‘appropriate government’ to make a reference of an
industrial dispute relating to a public utility service where a notice of strike or lock-out under s 22 has been given. The
government is enjoined to made a reference irrespective of the fact that any other proceeding including conciliation
proceedings under the Act have commenced. It is implicit in this proviso that even before the conciliation proceedings
have started, the ‘appropriate government’ will have the power to make the reference of the dispute. The conciliation
officer’s report is, therefore, not a condition precedent for the government for exercising its power to make a reference
under s 10(1) of the Act.92A priori, even if the conciliation proceedings are not held according to the statutory provisions
on the basis of which the failure report is sent to the government, it will not affect the validity of the reference.93 The
provisions of s 10(1) are not controlled by the provisions of s 12(4) or 12(5) of the Act,94because when the appropriate
government considers the question as to whether a reference should be made under s 12(5), it has to act under s 10(1) of
the Act, and s 10(1) confers discretion on the ‘appropriate government’ either to refer the dispute, or not to refer it, for
industrial adjudication, accordingly as it is of the opinion that it is expedient to do so or not. In other words, in dealing with
an industrial dispute in respect of which, a failure report has been submitted under s 12(4), the appropriate government
ultimately exercises its powers under s 10(1), subject to this, that s 12(5), impose an obligation on it to record reasons for
not making the reference when the dispute has gone through conciliation and a failure report has been made under s
12(4).95It is not necessary that all the steps contemplated in the Act for settlement of an industrial dispute should be taken
by the appropriate government one after the other. The different authorities which are constituted under the Act are set up
with different ends in view and the appropriate government is invested with the discretion to choose one or the other of the
authorities for the purpose of investigation and settlement of industrial disputes, upon its own appraisement of the
situation.1 Rules 10A and 10B of the Industrial Disputes (Central) Rules 1957 apply where reference is made on the report
of the conciliation officer or on an application by the employer or the workman, but there is no bar to the government
making a reference of the consequential matters arising as a result of the decision of the industrial tribunal or labour court
one way or the other.2 The government making an order of reference under s 10, is not confined to the dispute which was
the subject-matter of conciliation proceedings, but is entitled to refer any ‘existing’ or ‘apprehended’ industrial dispute.3

(ii) Pending Application under Section 33

In ITC, the question before the High Court of Karnataka was whether the government was competent to refer the dispute
relating to dismissal for adjudication under s 10, while an application filed under s 33(2)(b) for the approval of the said

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dismissal was pending before the tribunal. Rama Jois J held that any decision under s 33 is not final and, therefore, cannot
yield to a limited and semi-final remedy provided under s 33(2)(b) proceedings. Therefore, notwithstanding that a
proceeding under s 33 is pending, a dispute validly can be referred to adjudication under s 10(1).4 On the construction of
the words ‘the appropriate government...may at any time, by order in writing... refer the dispute...for adjudication’, the
final conclusion of the learned judge is quite correct. But the reasoning that the decision of the court under s 33(2)(b) will
not be final and bar reference under s 10(1) is not correct. In Navalbhai K Chanhan, the Gujarat High Court held that an
order of reference with respect to dismissal of a workman can validly be made for adjudication during the pendency of an
application for approval under s 33(2)(b) of the Act. In a s 33(2)(b) case, dismissal or discharge takes place before the
application is made. Approval of the order of dismissal or discharge merely ratifies the action while disapproval has the
affect of obliterating the order. On the other hand, in ss 33(1) and 33(3) cases, the dismissal or discharge of a workman
takes place only after the express permission in writing is given by the appropriate authority. Therefore, there is a
contradistinction between the provisions of s 33(2)(b) on the one hand and ss 33(1)(b) and 33(3)(b) on the other. In the
former case, the order of reference with respect to the dismissal or discharge of a workman can validly be made in view of
the power of the government to make the order of reference at any time, irrespective of the fact that a petition for approval
is pending before the appropriate authority because in such a case, the action of discharge or dismissal has already taken
place. But in the latter case, the order of reference will be premature because the dismissal does not take place unless the
appropriate authority has accorded express permission in writing.5

(iii) Previous Refusal

When there is an industrial dispute, the factual existence of which cannot really be in dispute, a determination afresh by the
government of the question of expediency of referring such a dispute for adjudication under s 10(1) of the Act after having
previously declined to make a reference, does not amount to a review of any question judicially determined previously.
The consensus of judicial opinion is that a prior order by the government under s 12(5), refusing to refer for adjudication a
particular dispute, cannot affect the jurisdiction of the government to exercise the statutory power conferred upon it by s
10(1) of the Act on any subsequent occasion.6 This view has been affirmed in Western India Match (supra), in which the
Supreme Court considered two questions viz,

(i) do the words ‘at any time’ in section 4K of the UP Industrial Disputes Act 1947 (which is in pari materia with section 10
of the Central Act ) have any limitation or can the government refer a dispute for adjudication after the lapse of about six
years, as in this case, after the accrual of cause of the dispute? and
(ii) in what circumstances, can ‘the Government refer such a dispute for adjudication after it has once refused to do so?

Answering the first point, the court said:

In fact when the government refuses to make a reference it does not exercise its power; on the other hand it refuses to exercise its
power and it is only when it decides to refer that it exercises its power. Consequently, the power to refer cannot be said to have
been exhausted when it has declined to make a reference at an earlier stage...the fact that it had earlier refused to exercise its power
does not preclude it from exercising it at a later stage. In this view, the mere fact that there has been a lapse of time or that a party
to dispute was, by the earlier refusal, led to believe that there would be no reference and acts upon such belief, does not affect the
jurisdiction of the government to make the reference.

But the second question, viz, as to in what circumstances can the Government refer a dispute for adjudication after once
having declined to refer it, was not separately answered by the court. The answer to this question is to be found in the
answer to the first question itself, in the observation:

In the light of the nature of the function of the government and the object for which the power is conferred on it, it would be
difficult to hold that once the government has refused to refer, it cannot change its mind on a re-consideration of the matter either
because new facts have come to light or because it had misunderstood the existing facts or for any other relevant consideration.7

On the facts of the case, the court found that the earlier decision of the government refusing to make the reference was
based on the misapprehension of facts and said:

If the government subsequently found that its earlier decision was based on such misapprehension and on facts brought to its
notice, it reconsiders the matter and decides to make the reference it is difficult to say that it exercised the discretion conferred on it

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by section 4K in any inappropriate manner.

With respect to stale claims, the court said:

There is no reason to think that the government would not consider the matter properly or allow itself to be stampeded into making
references in cases of old or stale disputes or reviving such disputes on the pressure of unions.

In Binny, it was pointed out to the court that the government had already refused to refer the dispute on two occasions and
there was no material on record to show as to what persuaded the government ultimately to do so but the court observed
that the mere fact that previously the government had taken the view that no reference was called for, would not, entitle the
court to conclude that there could be no cause for reference of the dispute subsequently, and from the earlier refusal, it did
not follow that thereafter the government could not either change its mind or make an order of reference on fresh material
before it, as s 10(1) empowers the appropriate government to make a reference ‘at any time’ whenever it is of opinion that
any industrial dispute exists or is apprehended. However, for want of the relevant material before it, the court could not go
into the question whether the government had any material before it justifying the reference. It was, therefore, observed
that this point could only be canvassed either in a proceeding to which the government was a party or where the court was
in possession of all the available material relating to the dispute and in the absence of the government from the array of the
parties, it was not possible to come to any finding as to whether there was any such material or not.8 Since this point was
raised in appeal by special leave before the Supreme Court, the view of the court is quite justified.

In Avon Services (supra), the appeal was against the order and judgment of the High Court dismissing the writ petition of
the appellant inlimine, in which the appropriate government was impleaded as a party. In this case, the appropriate
government had declined to make reference of an industrial dispute relating to the termination of the services of two
workmen but about nine months after the refusal, the government referred the dispute for adjudication to the industrial
tribunal. This order of reference did not disclose any reasons for making the reference. The tribunal directed the
reinstatement of the workmen with full back wages. The award of the tribunal was challenged before the High Court of
Punjab and Haryana in a writ petition impleading inter alia the government of Haryana which was dismissed in limine. In
appeal, against the order of the High Court, before the Supreme Court, it was contended that subsequent to the earlier
refusal to refer the dispute, neither had any facts come to light nor was it discernible from the order of reference that the
government had misunderstood the existing facts or there was any other relevant consideration. It was further submitted
that the order of reference did not disclose any reasons justifying reconsideration of its earlier decision refusing to refer the
dispute. It was also pointed out to the court that the government was before it as a party to the appeal and since it had not
filed any affidavit controverting these averments, the order of reference was bad for non-compliance with the requirements
as suggested by the court in WIMCO. Following that decision, the court rightly held that it was competent for the
appropriate government to refer an industrial dispute for adjudication which it earlier declined to do. Speaking for the
court, Desai J stated:

Merely because the government rejects a request for a reference or declines to make a reference, it cannot be said that the industrial
dispute has ceased to exist, nor could it be said to be a review of any judicial or quasi-judicial order or determination. The
industrial dispute may nonetheless continue to remain in existence and if at a subsequent stage the appropriate government is
satisfied that in the interest of industrial peace and for promoting industrial harmony it is desirable to make a reference, the
appropriate government does not lack power to do so under section 10(1), nor is it precluded from making the reference on the
only ground that on an earlier occasion it had declined to make the reference. The expression ‘at any time’ in section 10(1) will
clearly negative the contention that once the government declines to make a reference the power to make a reference under section
10(1) in respect of the same dispute gets exhausted. Such a construction would denude a very vital power conferred on the
government in the interest of industrial peace and harmony and it need not be whittled down by interpretative process...A refusal of
the appropriate government to make a reference is not indicative of an exercise of power under section 10(1), the exercise of the
power would be a positive act of making a reference. Therefore, when the government declines to make a reference the source of
power is neither dried up nor exhausted. It only indicates that the government for the time being refused to exercise the power but
that does not denude the power. The power to make the reference remains intact and can be exercised if the material and relevant
considerations for exercise of power are available; they being the continued existence of the dispute and the wisdom of referring it,
in the larger interest of industrial peace and harmony. Refusal to make the reference does not tantamount to saying that the dispute,
if it at all existed, stands resolved. On the contrary, the refusal to make a reference, not compelling the parties to come to a talking
table or before a quasi-judicial tribunal would further accentuate the feelings and a threat to direct action may become imminent
and the government may as well reconsider the decision and make the reference. ... It is not absolutely necessary that there ought to
be some fresh material before the government for reconsideration of its earlier decision. The government may reconsider its
decision on account of some new facts brought to its notice or for any other relevant consideration and such other relevant

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consideration may include the threat to industrial peace by the continued existence of the industrial dispute without any attempt at
resolving it and that a reference would at least bring the parties to the talking table.9

In one breath, the court recognised that the government may reconsider its decision on account of some ‘new facts brought
to its notice or for any other relevant consideration...such other relevant considerations may include the threat to industrial
peace by the continued existence of the industrial dispute without any attempt at resolving it and that a reference would at
least bring the parties to the talking table’ and at the same time, it said that ‘it was not absolutely necessary that there ought
to be fresh material before the government for reconsideration of its earlier decision’. These observations are not only self-
contradictory but are also irreconcilable with the ratio of WIMCO, which provides unequivocal guidelines for exercise of
the government’s discretion for reconsideration of the question of referring the dispute which it had earlier declined to
refer. To say that, it is not absolutely necessary that there should be fresh material before the government for
reconsideration of its earlier decision, would give sanction to arbitrariness on the part of the government resulting in
absurd situations. For instance, even after the lapse of fifty years, from its refusal to refer a dispute for adjudication,
without any further facts or relevant consideration, the government would be competent and justified to make a valid
reference merely because the ‘industrial dispute’ may ‘continue to remain in existence’. By this logic, the ‘industrial
disputes’, which are not referred for adjudication, will continue to exist for centuries, nay eternally. In other words, the
power of the government to refuse to refer a dispute will be rendered otiose because the dispute always will continue to
exist in cases where the government refused to refer it. That is why in WIMCO, the court had indicated the facts and
circumstances in which the government can justifiably reconsider the question of referring the dispute to adjudication
which it had declined earlier.

The existence of facts and circumstances, indicated in WIMCO, must be discernible either from the order of reference or
from the return filed by the government to the writ petition. It is, therefore, desirable that when the government decides to
refer the same dispute for adjudication, subsequent to its refusal to make a reference, it must state reasons showing that
new facts had come to light or there was misunderstanding as to the existence of facts or there was any other relevant
consideration including the threat to peace in the order of reference. Alternatively, these reasons may be stated in the
counter-affidavit in reply to the writ petition challenging the order of reference. In the absence of the statement of reasons
actuating the government to reconsider the question of making the reference, the guidelines provided in WIMCO that ‘there
is no reason to think that the government would not consider the matter properly or allow itself to be stampeded into
making a reference in cases of old or stale dispute or reviving such disputes on the pressure of unions’, would be rendered
to be a merely pious hope, because the order being ‘the inscrutable face of a sphinx’10 will not be open to judicial scrutiny
and the government will always be able to ‘disarm the court by taking refuge in silence’.11 There may be various
possibilities of the government being pressurised into making the reference subsequent to the previous refusal; for
instance, the change of the officer responsible for making the reference, connection of the trade union with the ruling party
at the relevant time, change of the government from one political party to another; mala fides and so on. Obviously, such
considerations cannot be bona fide or for relevant or germane reasons warranting the departure from the previous decision.
This is illustrated in the case of Srikrishna Jute Mills.12 After having declined to make the reference of a dispute, the
‘appropriate government’ subsequently referred the same for adjudication on the representation of an MLA. In a writ
petition, challenging the subsequent reference, though the Andhra Pradesh High Court correctly stated the ratio of the dicta
of the Supreme Court in WIMCO and Binny, in its application to the facts of the case it went haywire. From the facts of the
case, it was not discernible that any new facts had come to light or the government had misunderstood the existing fact or
there was any other relevant consideration. Obviously, the reference was made because the MLA had brought political
pressure on the government, who had made the indorsement on the application of the workman. The consideration, that the
application of workman was sent along with a covering letter of the MLA, was clearly extraneous and irrelevant to the
facts which the government could take into consideration in determining the expediency of referring the dispute for
adjudication. Hence, the reference was liable to be quashed on certiorari.

Again in Shanti Theatres, a single judge of the Madras High Court quashed the reference made in similar circumstances. In
this case, the reference relating to the dismissal of three workmen was declined by the appropriate government on three
occasions between 1969 and 1978, before the reference was finally made for adjudication. This order of reference was
challenged by the employer in a writ petition before the High Court on the grounds that there was no fresh material before
the government nor the earlier orders were passed by it under any misapprehension. It was stated in the affidavit that the
reference was politically motivated and based on extraneous grounds and as such was vitiated by mala fides. It was also
urged that, in the course of ten years, the situation had changed and the employer had been under the impression that a
quietus had been given once for all to the dispute. It was, therefore, submitted that the government should have considered
the inequity in referring a stale claim for adjudication after the lapse of a decade. The court quashed the award on the
ground that the order was bad as it had not given any reasons disclosing any fresh material or that the earlier orders were
passed as a result of any misapprehension. The court also observed that there was no reason justifying the reference after
the lapse of such a long time.13

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The decision of Supreme Court in Avon Services is not only bad in law, as it advances abuse of power, but is also likely to
bring industrial disharmony by reviving old and dead controversies. The absurdity of reviving a dead case was illustrated
in Mahabir Jute Mills, where the Supreme Court itself noted that between the dismissal of 800 workmen which was the
subject-matter of the dispute and the hearing of the appeal by special leave, nearly twenty years had elapsed and an
embarrassing situation had arisen for the employer, as the workmen employed in place of dismissed workmen had already
put in 20 years of service.14 It is submitted that in view of the decision rendered in WIMCO, as against the perverse
reasoning of Desai J in Avon Services, it is not necessary for the appropriate government to give a hearing to the parties
before making a reference after previously having refused to do so on one or more occasions. It would be necessary for the
government to state reasons in the order of reference in such a situation for the scrutiny of the judicial review to see that it
has not been ‘stampeded into making a reference in case of old or stale dispute or reviving such dispute on the pressure of
unions or external forces’.

In Sultan Singh, the government had refused to make the reference on the ground that there was no existing dispute. The
workmen again represented to the government to make the reference and the labour minister made a note on the
representation directing the government to make a reference. Despite that, no reference was made and on further
representation, the labour commissioner ordered that ‘in view of the decisions already taken’ it is not necessary to
reconsider the earlier decision and, therefore, again declined to make the reference. The writ petition was dismissed by the
Punjab & Haryana High Court. In appeal, the Supreme Court held that, from a conjoint reading of s 10(1) and s 12(5), the
State Government has to form an opinion whether an industrial dispute exists or is apprehended and then to decide whether
to refuse or make the reference. In case the government refuses to make a reference, s 12(5) requires it to record and
communicate its reasons to the parties concerned. But in case the government makes a reference, there is no requirement to
record or communicate the reasons, as the function of making reference is only administrative and not quasi-judicial. For
forming its opinion, the appropriate government is entitled to go into the question whether an industrial dispute exists or is
apprehended. It would be a subjective satisfaction on the basis of the material on record. In an administrative order, no lis
is involved. Hence, there is no need to issue any notice to the employer to hear him before making or refusing to make a
reference. There is no need for giving a hearing even if the government makes a reference after initial refusal and such
reference does not cease to be an administrative order; and so is not incumbent upon the government to record the reasons.
In the light of this legal position, the court rejected the view of the High Court. However, the apex court did not give any
relief to the workmen in view of the decision of the government that no industrial dispute existed.15 In FCI, a few workmen
were dismissed from service immediately after appointment as they had procured the employment by means of fraud and
collusion with some employees of the corporation. The government categorically refused to refer the matter to the tribunal
on the ground that the dismissal in question was not retrenchment. However, after a lapse of six years, the government
made a reference, without applying its mind to the facts of the case and without hearing the management. The Calcutta
High Court held that the second reference was not in accordance with the law and was liable to be struck down because it
did not indicate any application of mind, particularly in the absence of management being heard before the reference was
made. The court observed:

The trend of judicial pronouncements unmistakably point out that natural justice in the special circumstances as in the present one
demands that the employer ought to have been heard before the actual reference is made and that having not been done the
impugned reference on the said ground alone is liable to be struck down. That there was no application of mind on the part of the
government is evident from the fact that when the earlier reference was refused on a definite ground, no reason is disclosed why
after lapse of six years a reference was made. True, the government is not bound to disclose what materials, if at all were
considered when the reference is made. But failure to give a chance of hearing or an opportunity to the management to submit their
case before the decision to refer the dispute was made only shows lack of application of mind which must vitiate the reference.16

In view of the expanding dimensions of administrative law, it is desirable that the legislature engrafts the requirement of
stating reasons in case where the appropriate government decides to refer an industrial dispute for adjudication after
previously having declined to do so. It is also desirable that a period of limitation is prescribed for making the order of
reference instead of leaving it to unlimited vagaries of the government to make the reference ‘at any time’ after forming its
opinion as to the existence or apprehension of the ‘industrial dispute’. This will have a salutary effect against the revival of
stale and dead controversies. This is the least requirement of fair administration, in the interest of industrial peace and
harmony.17 After having declined to refer the dispute for adjudication, if the appropriate government subsequently chooses
to make the reference, it has the power only to refer that dispute which was previously ‘existing’ or ‘apprehended’. In
Sindhu Resettlement Corpn (supra), it was categorically held that while purporting to make the reference of the industrial
dispute, it cannot refer altogether a different dispute for adjudication.18 In Central Bank of India, the facts briefly were: the
Central Government had, after the initial refusal of the dispute raised by the general secretary of the union as long back as
1971 in respect of a facility which was withdrawn by the bank, the dispute remained unresolved for over 25 years; made a
second reference of the same dispute. The tribunal held that the second reference was valid, which order was impugned by

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the bank. While observing that an earlier rejection to make a reference did not denude the government of its power to make
second reference later under s 10(1), Mukul Mudgal J of the Delhi High Court held that such second reference should be
with notice to the affected party, the Bank in this case, and that, in the light of the fact that the reference was made without
notice to the bank, it was without jurisdiction.19 This is decision calls for some analysis. Answers to the following
questions expose the grave misconceptions of Himalayan proportions that crept into the judicial process:

(i) Why should the government give a hearing to the employer before making a reference, albeit after initial refusal? (ii)
What is the nature of the function performed by the government while making a reference? (iii) At what stage could it be
said that the rights of parties have been affected—is it at the time of making a reference or after the Tribunal passes an
order? In the face of several authorities to the contrary, to hold that the employer needs hearing merely because reference
was refused in the first instance, is a judicial misconception. If the issuance of notice or giving a hearing to the employer
has no application while making reference of an apprehended dispute suo motu under s 10 (1) or on the receipt of failure
report [ s 12(4) read with s 10(1) ], the said requirements can have no application to a reference made after initial refusal
either. For that matter, even the fact that the workmen have a right to move the High Court under Art. 226 is also irrelevant
in determining the nature and scope of the power conferred under s 10. The power of government to make a reference is in
no way limited by the right conferred on either party to move the High Court for a writ. The above decision of Mukul
Mudgal J runs counter to the principles enunciated by the Supreme Court and is wrong with no binding force and deserves
to be rejected as being baseless and without any merit. In striking contrast, in a similar set of facts in Lokmat Newspapers,
DD Sinha J of Bombay High Court held that the making of a reference is an administrative function; that being so, it can,
after refusing to make a reference, refer the same dispute at a subsequent stage on new facts brought to its notice, and that
an order making reference being an administrative one, there was no need to issue notice or to hear the employer.20 This
decision was consistent with the spirit of s 10 and with the rulings of the Apex Court and is right, as against the
misconceived decision of Mukul Mudgal J in Central Bank (supra).

(iv) Limitation

There is no period of limitation prescribed in the Act for making a reference under s 10(1). It is for the appropriate
government to consider whether it is expedient or not to make the reference.21 The words ‘at any time’ used in s 10(1) do
not admit of any limitation in making an order of reference. The laws of limitation which might bar any civil court from
giving a remedy in respect of lawful rights cannot be applied by an industrial tribunal.22 However, the policy of industrial
adjudication is that very stale claims should not be generally encouraged or allowed unless there is a satisfactory
explanation for delay, as, apart from the obvious risk to industrial peace from the entertainment of claims after long lapse
of time, it is necessary also to take into account the unsettling effect which it is likely to have on the employer’s financial
arrangement,23 and to avoid dislocation of industry. In Shalimar Works, the Supreme Court pointed out that though there is
no limitation prescribed in making a reference of disputes to industrial tribunal under s 10(1), even so it is only reasonable
that disputes should be referred as soon as possible after they have arisen and after conciliation proceedings have failed.24
In WIMCO (supra), though the court observed that the reference of the dispute made nearly six years after the previous
refusal to make the reference, was valid and justified. The court, however, observed, that the government would consider
these questions properly and will not allow itself to be stampeded into making reference of old or stale disputes or revive
such disputes on the pressure of unions but these observations are nothing more than lip-service of pious hope, because in
practice references of inordinately delayed disputes have not been refused. A single judge of Delhi High Court has gone to
the extent of holding that a reference made even 18 years after the cause of the dispute arose was justified for the flimsy
reason that the employer had not properly decided the case of the workman.25 On the other hand, another single judge of
Bombay High Court in R Ganeshan, held that inordinate and unexplained delay is just and proper ground for refusing to
make a reference.26

There is no hard and fast rule regarding the time for making the order of reference. As to what is the reasonable time
within which the dispute should be referred after the failure of conciliation proceedings or whether a claim has become too
stale or not, will depend upon the facts and circumstances of each case.27 Likewise, whether the intervening period
between the date of earlier refusal of the government to make a reference and its subsequent decision to reopen the dispute
is short or long would also necessarily depend upon the facts and circumstances of each case.28 Though it is desirable that
there should be no unreasonable or inordinate delay in making a reference by the appropriate government, delay or laches
cannot be made a ground for striking down the reference. In the matter of making a reference, the ‘appropriate
government’ is the supreme authority and the tribunal would hardly enter that arena and encroach upon its functions. It is a
matter concerning the administrative action of the government and the tribunal is not competent to go into the question of
delay in making the reference after assuming jurisdiction over the matter. It is duty-bound to decide the question on merits
and the ground of delay cannot be made a jurisdictional matter before the tribunal. The tribunal may, if it thinks fit, take
such facts into account only in the matter of granting relief to the employee.29 In Ajaib Singh, where the workman raised a
dispute against his termination after a lapse of 7 years, the Supreme Court held that, as no plea of delay was taken by the
management before the labour court, the workman could not show the circumstances preventing him from approaching the

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court at an earlier stage and, had that plea been taken, the workman would have been able to show the circumstances or
even to satisfy the court that such plea was not sustainable after the reference was made by the government.30 In KGID, a
single judge of Karnataka High Court held that delay by itself could be no ground to reject the reference. The rejection by
the tribunal of the dispute regarding payment of bonus for the year 1980, on the ground that the reference was made after a
lapse of 12 years from 1980 and that the dispute, since, had become stale, was not sustainable in law.31 In Mahavir Singh,
the Supreme Court observed that, a reference could be made after a delay of 9 years, and it cannot be denied merely on the
ground of delay and that mere delay does not cease the dispute, but taking care at the time of granting relief to the
concerned workman.32 In Nedungadi Bank, the apex court held:

Law does not prescribe any time-limit for the appropriate government to exercise its powers under section 10 of the Act. It is not
that this power can be exercised at any point of time and to revive matters which had since been settled. Power is to be exercised
reasonably and in a rational manner. There appears to us to be no rational basis on which the Central Government has exercised
powers in this case after a lapse of about several years of the order dismissing the respondent from service. At the time reference
was made, no industrial dispute existed or could be even said to have been apprehended. A dispute, which is stale could not be the
subject-matter of reference under section 10 of the Act. As to when a dispute can be said to be stale would depend on the facts and
circumstances of the each case. When the matter has become final, it appears to us to be rather incongruous that the reference be
made under section 10 of the Act in the circumstances like the present one. In fact it could be said that there was no dispute
pending at the time when the reference in question was made. The only ground advanced by the respondent was that two other
employees who were dismissed from service were reinstated. Under what circumstances, they were dismissed and subsequently
reinstated is nowhere mentioned. Demand raised by the respondent for raising industrial dispute was ex facie bad and
incompetent.33

In Gurmail Singh, where the labour court dismissed the reference on the ground that there was a delay of 8 years in raising
the dispute, the Supreme Court condoned the delay and ordered that the workman would not be entitled to any back wages
for the 8 year period, but would be entitled to 50 per cent of wages from the date of raising the dispute till the date of
reinstatement.34 However, in Indian Iron & Steel, the Supreme observed that the tribunal was right in not granting any
relief to the workman as he preferred the claim almost after a period of 13 years without any reasonable or justifiable
ground.35 In Balbir Singh, where counsel for petitioner strongly relied on Ajaib Singh in favour of condoning the delay and
granting relief to the workman, the Supreme Court, rejecting the said contention, observed:

We have carefully considered the contentions raised by the learned counsel for the petitioner. We have also perused the
aforementioned decision. We do not find that any general principle, as contended by the learned counsel for the petitioner, has
been laid down in that decision. The decision was rendered in the facts and circumstances of the case, particularly, the fact that the
plea of delay was not taken by the management in the proceeding before the tribunal. In the case on hand, the plea of delay was
raised and was accepted by the tribunal. Therefore, the decision cited is of little help in the present case. Whether relief to the
workman should be denied on the ground of delay or it should be appropriately moulded, is at the discretion of the tribunal
depending upon the facts and circumstances of the case. No doubt the discretion is to be exercised judicially. The High Court, on
consideration of the matter, held that there was no ground to interfere with the discretion exercised by the tribunal. We are not
satisfied that the award of the tribunal declining relief to the petitioner, which was confirmed by the High Court, suffered from any
serious illegality which warrants interference by this Court. Accordingly, the special leave petition is dismissed. 36

A conspectus of the above decisions discloses the fact that the law relating to the delay in raising or reference of disputes is
bereft of any principle, which can be easily comprehended by the lawyer and litigant. In some cases, the delay was
condoned, while in others, not, even though there was no perceptible difference in the nature or extent of delay as between
them. It is also observed that the High Courts have adopted highly divergent approaches in condoning the delay and in
granting or refusing relief to workmen, even when the plea of delay was raised by the management before the trial court. It
is also observed that there was no uniformity nor consistency in the decisions in respect of the number of years of delay.
The fact that Limitation Act does not apply to industrial disputes does not imply that the workmen can raise or the
government can refer disputes at their sweet will after inordinate delay and that such delay should be favourably treated by
the courts. Such a view militates against the very concept of administration of justice and the principles of natural justice.
For example, in Ajaib Singh a delay of 7 years was condoned on the ground that the employer had not taken the plea of
delay before the labour court, whereas in Nedungadi Bank, the delay of 7 years in making reference was not. Interestingly,
Saghir Ahmad J, was the Presiding Judge of both the benches that decided Ajaib Singh and Nedungadi, which are poles
apart in so far as the line of reasoning advanced and the conclusions reached, regardless of the fact that the two cases are
identical as to the extent of delay. What message do these two decisions with an identical set of facts - one condoning the
delay and other condemning it - convey to the lawyer, litigant and the general public? The case of Sapan Kumar Pandit, is
a classic example of ‘gross abuse of judicial power’ on the part of the Apex Court. The facts of the case were: a workman,

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whose services were terminated in 1975 along with a few others, raised a dispute in 1990, which was referred for
adjudication in 1993 under s 4K of the UPIDA, in all, 18 years after termination. The High Court rightly struck down the
reference as being stale. Justice Thomas (for self and Sethi J), observed:

There are cases in which lapse of time had caused fading or even eclipse of the dispute. If nobody had kept the dispute alive during
the long interval, it is reasonably possible to conclude in a particular case that the dispute ceased to exist after some time. But when
the dispute remained alive though not galvanized by the workmen or the union on account of other justified reasons it does not
cause the dispute to wane into total eclipse...The High Court has obviously gone wrong in axing down the order of reference made
by the government for adjudication.37

The above decision exposes not only judicial laxity of the worst order touching upon questions of vital importance, but
also a total absence of conviction on the part of the learned judge. The mere fact that the Act does not prescribe any
limitation does not mean that disputes can be referred after a substantial lapse of time. What is meant by the observation:
‘when the dispute remained alive though not galvanized by the workmen or the union on account of other justified
reasons’, when the facts disclose that the workman slept over for 15 years and failed to explain the inordinate delay? If 10
other workmen raised a dispute through the union immediately after termination (i.e., in the year 1976) and the appellant
did not choose to raise a dispute either along with them or thereafter, that fact itself should give rise to the presumption that
the appellant was not interested in invoking the machinery provided under the Act. At any rate, the decision given by the
labour court in respect of the said ten workmen would not be applicable to him automatically in view of the fact that he
was not a party to the dispute raised by them nor did he raise a dispute on his own. It is not for the judge to explain, on
behalf of the workman, the unexplained delay running into 15 years and argue his case, as if he was holding a brief for
him. The doctrine of ‘total eclipse’ vs ‘partial eclipse’ invented and imported by Thomas J, into the reasoning process is
absolutely baseless and irrelevant. An analysis of the aforesaid decision raises the question: “on what principle known to
law did the learned judge condone the delay of 17 years in making the reference, out of which 15 years was directly
attributable to the workman himself, more so, in the face of several rulings of the Supreme Court to the contrary?” The
kind of misplaced generosity displayed by Thomas J in Sapan Kumar Pandit is clearly uncalled for, apart from being
wholly misplaced and perverse. The decision of the High Court was right, being consistent with several authorities, a few
of which are cited in the following paragraph, and that of Thomas J, is clearly wrong.38 In Shivalinga, the Supreme Court
rejected the argument advanced by counsel, which was based on the ratio of Sapan Kumar Pandit, and held ‘that the delay
of more than 9 years on the part of the workman did not deserve to be condoned and such delay would render the claim
stale.39 Despite this ruling, a single judge of Delhi High Court condoned the unexplained delay of five years and set aside
the order of tribunal refusing to grant relief to the workman on that count.40 In JC Biswas, the Supreme Court upheld the
dismissal of a development officer, who remained absent from station without permission for 61 days and who filed a writ
petition against the management after an unexplained delay of 5 years.41 In Digambar Kalaskar, where a dismissed
workman slept over for 18 years spending his time in writing letters to the State and Central ministers, without raising a
dispute as provided in the Act, it was held that his claim for a reference of the dispute under s 10(1) became stale and there
was no justification to condone the delay, even though no limitation was prescribed under the Act.42

In Surjit Singh, the Punjab and Haryana High Court held that if plea of delay was not taken, the delay might be condoned.
But, if a dispute had become stale, it should not be revived after a lapse of long period, if the plea regarding delay was
taken.43 Where the workman, whose services were terminated on account of an FIR filed against him in a criminal case in
1978, did not raise the dispute for 11 months after the said FIR was quashed in 1994, and again did not take any interest to
challenge the award of labour court which went against him for 4 years after the passing of award, the writ petition is not
maintainable because of the unexplained delay.44 In a case where the labour court condoned the unexplained delay of 9
years in raising a dispute that was referred under s 10 and ordered reinstatement with 50 per cent back wages, and the
employer reinstated him pending proceedings in the High Court, the Karnataka High Court held that no blood could be
pumped into either by a labour court or by the High Court for a stale dead reference, and that the single judge committed a
serious error in failing to notice the enormous delay in the light of binding judgments of the apex court, but held that, in the
particular facts of the case, the workman would not be entitled to any back wages.45 Where the workman raised a dispute
after 12 years, a single judge of Madras High Court held that the relief of reinstatement cannot be denied on grounds of
delay, but the labour court had to exercise discretion while granting the appropriate relief.46 The denial of back wages by
the tribunal on the ground that he would have been otherwise employed is not proper, and, in view of the unexplained
delay in raising the dispute, the award of back wages from the date of demand notice would meet the ends of
justice.47Where a daily-wager, having worked for 395 days raised a dispute against his termination after 8 years, the High
Court quashed the order of labour court directing reinstatement with 25 per cent back wages and held that in view of the
unexplained delay of 8 years, the workman was not entitled to any relief even if there was any violation of the provisions
of the ID Act on the part of the employer.48

Where the labour court condoned a delay of more than six years in raising the dispute on the part of a conductor, who was

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dismissed for misappropriation, and ordered reinstatement, the award was quashed and the punishment restored.49 In a
case, where a workman was dismissed, for remaining absent without authorisation coupled with non-reply to the charge-
sheet and failure to present himself in the enquiry, the High Court taking notice of the above facts and also of the fact that
there was an unexplained delay of 4 years in raising the dispute, modified the order of labour court from reinstatement with
80 per cent back wages to reinstatement without back wages.50 In KR Singh, Ms Nishita Mhatre J of the Bombay High
Court directed the labour court to condone a staggering delay of nearly 20 years on the part of workmen in filing an
application under s 33C(2) of theID Act claiming over time wages.51 In striking contrast, Kochar J of the same High Court,
in an exactly identical case involving the same employer and the same issue, quashed the order of labour court granting
relief under s 33C(2) on ground of delay of 15-20 years.52 The decision of Ms Mhatre J calls for some analysis. The facts
of the case unfold that the employees slept for a staggering 20 years and filed a petition thereafter claiming some money
from the employer. The learned judge failed to apply her judicial mind while passing a perverse order of this kind. The law
does not require the employer to maintain the records beyond a certain period, after which they can be consigned to bonfire
legitimately. Can the learned judge cite an illustration to the effect that the jurisprudence of any country has degraded itself
to such an abysmal level in which, where one party seeks to get a wrongful gain through the judicial process, the judge
could afford the luxury of dealing with the claim in a casual and perfunctory manner and allow the mischief to pass
muster? Could it be said that the decision reflects a sound judicial disposition? The labour court and Kochar J are right, and
Ms Mhatre J, is absolutely wrong. But why blame the judges of High Courts, when the position with the Supreme Court is
even worse, with two benches presided over by the same learned judge with identical set of facts reached opposite
conclusions in two cases, as disclosed in Ajaib Singh and Nedungadi?

Notwithstanding a few cases such as IISCO,53 which were decided rightly, the fact remains that misconceived and ultra-
generous decisions, not at the cost of the court but at the cost of employers, far outnumber those decided rightly,
particularly, in respect of stale claims and delayed references. It is hardly necessary to cite them all here. The fact that the
courts are fastening the liability to reinstate - not only reinstate but also pay back wages - to the employers, where the
employers were not even guilty of contributory negligence or responsible in any manner in the workmen raising disputes
belatedly, revolts against all canons of justice and fairplay. To say the least, most of these decisions are injudicious and,
still worse, outrageous! The consequences of the chaotic rulings of the Supreme Court, which are bereft any reason or
logic, are far reaching for the industrial community, as can be seen from the fact that the judicial anarchy that took birth in
the precincts of the Supreme Court, in respect of stale claims and delayed references, continues unabated with High Courts
passing judgments condoning undue delays. For example, in TNPDC, it was held that a delay of 4 years in raising the
dispute could be a factor only in deciding the quantum of back wages and not the dismissal itself.54 Notional increments
cannot be denied on the ground of delay on the part of the workman in approaching the court.55 Yet another decision which
displayed an over-generous approach is Aska Coop Society, in which the Orissa High Court travelled to the length of
holding that the award of the tribunal could not be held to be invalid merely because there was delay of 15 years in raising
the dispute by the workman.56 In Kishori Lal, Sapre J of the MP High Court condoned a delay of 7 years on the part of the
workman in raising the dispute, remanded the matter to the government to examine the reasons for delay before rejecting
the reference.57 In the midst of judicial chaos created by Thomas, Saghir Ahmed JJ, and other learned judges and nurtured
by several High Courts, it is refreshing to come across a highly responsible and mature decision by Ms Gyan Sudha Misra
J of Rajasthan High Court in Satyanarain Sharma. The facts of this case briefly were: the workman remained absent for 3
years and spent another 4 years before he sought a reference of the dispute relating to the termination of his service by
Hindustan Copper Ltd. On a rejection of the reference by Central Government, the workman approached the High Court.
Dismissing the petition, the learned judge observed that though the law did not prescribe any time limit for the government
to exercise its power to refer the dispute, the said power could not be exercised at any point of time in order to revive stale
claims. The learned judge further observed that the delay on the part of petitioner-workman showed that he was neither
prompt nor diligent in pursuing his case.58 It is submitted that the decision given by Ms Gyan Sudha Misra J is right and
just, whereas all other decisions rendered, to the contrary, by the Supreme Court and different High Courts are perverse
and obnoxious and are unmistakably wrong. Yet another decision, which deserves full compliments from every right-
thinking citizen is that of BS Chauhan J of the same High Court in Rajendra Singh Gehlot, in which the learned judge
upheld the rejection by the government to make a reference of the dispute raised after a lapse of 20 years,59 as against the
bankrupt decision given by Thomas J in Sapan Kumar Pandit. In SM Nilajkar, the facts briefly were: a number of
workmen were engaged by the telecom department for digging, laying cables, erecting poles, etc, during 1985-87 and the
services of these workmen were terminated in 1987 on completion of the work. The tribunal directed the telecom
department to reinstate all the workmen with continuity of service and 50% back wages. A single judge of the Karnataka
High Court, while holding that they were not project employees, took note of the fact that there was a delay of 7 to 9 years
in raising the dispute and in view of this and other facts, modified the award to the extent of reinstatement with continuity
of service and other consequential benefits, but without any back wages. The Division Bench allowed the appeal preferred
by the employer and set aside the award of the tribunal and the order of judge. Quashing the order of Division Bench,
Lahoti J (for self and Brijesh Kumar J) held:

It is true, as held in M/s Shalimar Works Ltd v Their Workmen (supra),60that merely because the Industrial Disputes Act does not

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provide for a limitation for raising the dispute it does not mean that the dispute can be raised at any time and without regard to the
delay and reasons therefore ... A delay of 4 years in raising the dispute after even reemployment of the most of the old workmen
was held to be fatal in M/s Shalimar Works ... In Nedungadi Bank Ltd v KP Madhavankutty (supra),61 a delay of 7 years was held
to be fatal and disentitled to workmen to any relief. In Ratan Chandra Sammanta v Union of India (supra),62 it was held that a
casual labourer retrenched by the employer deprives himself of remedy available in law by delay itself, lapse of time results in
losing the remedy and the right as well ... we do not think that the delay in the case at hand has been so culpable as to disentitle the
appellants for any relief. ... Pursuant to the judgment in Daily Rated Casual Employees Under P and T Department v Union of
India (supra),63the department was formulating a scheme to accommodate casual labourers and the appellants were justified in
awaiting the outcome thereof. On 16-1-1990 they were refused to be accommodated in the scheme. On 28-12-1990 they initiated
the proceedings under the Industrial Disputes Act followed by conciliation proceedings and then the dispute was referred to the
Industrial Tribunal cum-Labour Court. We do not think that the appellants deserve to be non suited on the ground of delay. ... The
fact remains that there was delay, though not a fatal one in initiating proceedings calculating the time between the date of
termination and initiation of proceedings before the Industrial Tribunal-cum-Labour Court. The employee cannot be blamed for the
delay. The learned single Judge has denied the relief of back wages while directing the appellants to be reinstated. That appears to
be a just and reasonable order. Moreover, the judgment of the learned single Judge was not put in issue by the appellants by filing
an appeal. ... For all the foregoing reasons we are of the opinion that the decision of the Division Bench deserves to be set aside
and that of the learned Single Judge restored, except for the finding that the appellants were not project employees.64 (Paras 17, 18
& 19).

In Turi RD, a delay of 10 years in raising a dispute by the workman whose service was terminated was condoned by a
single judge of Gujarat High Court on the ground that the Limitation Act 1963 does not apply to the proceedings under the
Industrial Disputes Act.65 Where the workman filed a petition under s 10(1B)(c) [of West Bengal Amendment 1989]
before a labour court, which did not have territorial jurisdiction resulting in delay and thereafter approaching the proper
labour court, the Calcutta High Court held that the delay so caused was not so fatal as to non-suit the workman.66 In the
larger interests of legal certainty, this issue calls for a comprehensive approach on the part of the apex court coupled with
laying down well-defined, intelligible guidelines.67 In Asst Engineer, CAD, the facts disclosed that a quasi-permanent
employee raised an industrial dispute after a lapse of 8 years after the termination of her service. The labour court ordered
reinstatement together with 30% of back wages. The said award was upheld by both tiers of High Court despite plea of the
appellant that the claim was a stale one apart from the fact that the irrigation department itself was closed on completion of
the project. Quashing the orders of the courts below, Pasayat J (for self and Thakker J) observed that, the labour court
should not have granted relief; and that the learned single judge and the Division Bench did not consider the issues in their
proper perspective and arrived at abrupt conclusions without even indicating justifiable reasons.68 Where the workman
failed to file the appeal before the appellate authority notified by the employer and slept over the matter for five long years
and raised an industrial dispute thereafter, the tribunal condoned the delay and adjudicated the reference in the course of
which, it directed the reinstatement of the workman. Quashing the order of the tribunal, a single judge of the Karnataka
High Court held that, the settled legal position is that delay itself deprives a person of his remedy available in law. In the
absence of any fresh cause of action or any legislation, a person who has lost his remedy by lapse of time loses his right as
well. The learned judge further observed that, if on account of the delay, the dispute has become stale or ceases to exist, the
reference should be rejected.69

Delay in the Disposal of Cases and its Implications

In Mgmt of MCD, the facts disclosed a staggering delay of 33 years in disposing the case relating to the termination of
service of a workman. On the question of the quantum of back wages, the Supreme Court held that the reason for not
granting full back wages to the workman was, firstly, due to the fact that for no fault of the parties, the litigation took more
than three decades and it would not be proper to saddle the corporation and its exchequer which was meant for public
benefit with such a huge financial burden, and secondly, the workmen could not have remained totally unemployed for 33
years.70 Where the labour court ordered reinstatement of a workman without back wages on ground of five years delay in
raising the industrial dispute, a two judge Bench of Supreme Court comprising Majmudar and Sabharwal, JJ, noticed that
the delay was due to the workman initially approaching the central Administrative Tribunal, for which neither he nor the
employer could be said to be responsible, and held that the burden of back wages should be borne equally by both sides,
and accordingly ordered payment of 50 percent of back wages from the date of termination to the date of
reinstatement.71Now, if the workman pursued a wrong remedy resulting in delay, it is perfectly legitimate for the court to
condone the delay, if covered by the period of limitation, if any, prescribed in the Act. However, if the workman has not
taken proper legal advice and runs around different courts and tribunals in a chaotic manner, the employer should not be
directed to pay for the delay caused in the process. This decision reminds of the observation of Lord Hewart:

It is necessary to remember that in litigation there are more parties than one, that it is wrong to gratify the plaintiff to the detriment

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of the defendant and that, while sympathy is a most commendable quality, it never appears in a less attractive guise than when it is
practised at the expense of somebody else.72

A single judge of the Bombay High Court admittedly following this decision, held in Nanded CCCWRS, that the workman
should not be penalised for pursuing remedy before a wrong court, and hence, no fault could be found with the decision of
labour court awarding full back wages.73 The precedent set in the process requires reversal by a larger bench so as to
enable it to remain consistent with the principles of equity, fairness and justice.

Form and Contents of the Order of Reference: ‘By Order in Writing’

The only requirement of s 10(1) is that the order of reference should be in writing. No form is prescribed under the rules
for making such order. It is sufficient if the existence of a dispute and the fact that the dispute is referred to the tribunal are
clear from the order.74 The government is left to its own devices while passing the order. An order of reference has to be
signed in accordance with the provision of Arts. 77 and 166 of the Constitution. Similarly, any corrigendum or amendment
to such an order is also to be signed according to the same provision.75 The order of reference need not necessarily be
signed by a Governor of the State where the State is the appropriate government or by the President of India, where the
Central Government is the appropriate government. It is sufficient that the approval of the Governor or the President for
referring the dispute was obtained and the order is actually signed by the authorised officer.76 However, orders of reference
hastily drawn or drawn in a casual manner often give rise to unnecessary dispute and thereby, prolong the life of industrial
litigation which must always be avoided.77 In order to avoid such glaring mistakes in references, it is necessary that before
making the reference, the Government must bestow great care so as to obviate references which are baseless and do not
represent the actual dispute between the parties.78 It should, therefore, carefully formulate the points of dispute; they
should be so worded as to avoid ambiguity or prejudice or advantage to one or the other party to the dispute.79 In Eagle
Fashions, the Delhi High Court held that the terms of reference should clearly spell out the real dispute between the parties
and if that were not so, the order of reference would be liable to be interfered with in exercise of writ jurisdiction. When
the factum of employment and termination itself were in dispute, the terms of reference could not have been so framed as
to presume the employment and its termination and confining the reference merely to adjudication of illegality or
unjustness thereof. Such an order of reference drawn up without application of mind would be vitiated.80 It would be in the
interests of justice if the terms of reference are spelt out with care, exactitude and with such detail as would obviate any
controversy as to the scope of the reference. It is also in the interest of justice that all the disputes raised between the
parties should be referred for adjudication at one instance and not in a truncated and piecemeal manner so that there can be
a composite and single adjudication of all disputes between the parties.81

There is no statutory requirement of the Act or the Central Rules that an order of reference under s 10 must be notified in
the Official Gazette, though as a matter of practice generally, such orders are made by the government by notification in
their Official Gazettes. The want of publication of an order of reference, therefore, does not make the order of reference in
any way invalid.82 The government should make reference in writing indicating the parties to the dispute and the point of
controversy. The parties might be indicated individually or collectively with reasonable clearness.83 It is not necessary to
specify in the order of reference, the reliefs to be given by the tribunal in adjudicating upon the industrial dispute.84Nor the
government need to state its reasons for making a reference to the tribunal while making a reference under s 10(1) of the
Act.85 There is nothing in the Act to indicate that the government cannot make a reference indicating that a party to the
dispute is a trade union.86Nor is there any bar in the Act to the government referring a dispute piecemeal, having regard to
the exigencies of the situation.87 Thus, where separate but not inconsistent demands are made against the management by
two groups of workmen belonging to two different unions, the government can refer each demand separately for
adjudication.88 The order of reference can ask the tribunal to adjudicate upon a particular question first and then to decide
the further questions if it should find in favour of the workers on the first question.89 Where there are specific words that a
particular person shall decide the matter in dispute contained in the annexure, it is sufficient to constitute a reference.90 But
a notification appointing a certain person as a tribunal and referring to him in general terms all the industrial disputes
which may arise at any time in the future would be illegal. 91

Similarly, a general notification referring the disputes which are apprehended in a certain industry without specifying the
particular firms in which such disputes are apprehended, is incompetent.1 Likewise, if an order of reference does not
specify the names of the concerned workmen or the names of the employers with whom the dispute exists, the reference
will be bad for vagueness.2 The order of reference, however, would not be rendered bad in law, if the requisite satisfaction
is not recorded in the order of reference itself Even if there is some such lacuna, the order does not become invalid ab
initio and the defect can be made good by filing an affidavit later on to show that the condition precedent was satisfied3
Nor an order of reference under s 10(1)(c) is incompetent merely because it is made in general terms and the disputes are
not particularised in it4 Furthermore, mere wording of the order of reference is not decisive in the matter of tenability of a
reference.5 In Mangalam Publications, a dispute raised by an individual workman, a retired section officer in this case,

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claiming arrears on re-classification in terms of Bachawat award was referred for adjudication. Quashing the award, the
Kerala High Court held that a claim for arrears would arise only if there was a re-classification as per the Bachawat award
and whether the establishment was liable to be reclassified was not an individual grievance but a collective one; that such a
dispute has to be at the instance of the union or a number of workmen to be referred for adjudication under s 10(1)(c) Act;
and that no individual dispute could be raised.6 Similarly, disputes between several establishments and their workers can be
referred to an industrial tribunal by the government by a single notification.7 Likewise, the absence of indication that the
dispute was under s 2(k) or s 2A in the order of reference, will not go to show that it is not an industrial dispute within the
meaning of either of the two provisions. Such absence of indication will not invalidate the order of reference since the law
does not require the government to do so. If a question does arise as to whether the dispute is one as defined under s 2(k) or
s 2A, it is for the adjudicating authority to ascertain the same from the material on record.8 Whether the dispute referred to
the industrial tribunal is an industrial dispute under s 2(k) or s 2A is of no consequence so far as the tribunal’s power to
adjudicate is concerned, and that formal defects in citation of reference will not oust the jurisdiction of the tribunal.9

Authorities to whom Reference can be Made

Section 10(1) vests the ‘appropriate government’ with discretion to choose one or the other of the authorities ie, under cl
(a) a board, under cl (b) a court of inquiry, under cl (c) a labour court or under cl (d) an industrial tribunal, for the purpose
of investigation and settlement of industrial disputes. The government may set up one authority or the other for the
achievement of the desired ends depending upon its appraisement of the situation as it obtains in a particular industry or
establishment. It is not necessary that all the steps enumerated in s 10(1) should be taken seriatim one after the other by the
‘appropriate government’. Whether one or the other of the steps should be taken by the appropriate government, must
depend upon the exigencies of the situation, eg, the imminence of industrial strike resulting in cessation of industrial
production and breach of industrial peace endangering public tranquility and law and order. What steps would be taken by
the ‘appropriate government’ in the matter of an industrial dispute must, therefore, be determined by the surrounding
circumstances. No hard and fast rule can be laid down with respect to making reference to the one or the other of the
authorities for the purpose of bringing about the desired end-the settlement of an ‘industrial dispute’ and promotion of
industrial peace.10It is manifest that the powers of reference given to the ‘appropriate government’ under cll (a), (b), (c)
and (d) of s 10(1) are in the alternative and not cumulative in character. In other words, the ‘appropriate government’
cannot, at one and the same time, refer an industrial dispute for adjudication to a labour court under s 10(1)(c) and refer
any matter connected with it or relevant to the identical industrial dispute to a court of inquiry under s 10(1)(b) of the
Act.11 The different authorities constituted under the Act are set up with different ends in view and are invested with
powers and duties necessary for the achievement of the purposes for which they are set up. The appropriate government is
invested with discretion to choose one or the other of the authorities for the purpose of investigation and settlement of
industrial disputes, whether the government sets up one authority or the other for the achievement of the desired ends
depends on its appraisement of the situation as it obtains in a particular industry or establishment.12An authority mentioned
in this section, can take cognizance of an industrial dispute only on a reference being made to it. There is no provision in
the Act under which a party can directly refer a dispute to any such authority for investigation, settlement or adjudication.
Hence, an employer or a workman cannot approach these authorities directly. Their jurisdiction can be invoked only in the
manner provided under the Act.13

(i) Board

In terms of cl (a), the appropriate government can refer a dispute to a board for promoting a settlement thereof but it is only
an industrial dispute that can be referred to a board and any matter appearing to be connected with, or relevant to, the
dispute cannot be referred to the board under this provision. In Niemla Textile (supra), it was held that a reference to the
board of conciliation is but a preliminary step for the settlement of the industrial dispute and the report made by it would
furnish materials to the government to make up its mind whether to refer the dispute for adjudication to an industrial
tribunal.

(ii) Court of Inquiry

The government may refer any matter appearing to be connected with, or relevant to, the dispute to a court of inquiry under
cl (b) for the purpose of inquiring into such matter. From the language of this provision, it is obvious that the function of a
court of inquiry is neither conciliatory nor adjudicatory, it is only investigatory. A report of the court of inquiry furnishes
material to the appropriate government for finally determining whether the ‘industrial dispute’ should be referred by it for
adjudication to an industrial tribunal.14 It may be that a report of the court of inquiry discloses circumstances under which
the ‘appropriate government’ considers that it is not necessary or expedient to refer the industrial dispute for adjudication
to a labour court or industrial tribunal. It is open to the government to refer ‘any matter connected with, or relevant to, an
industrial dispute’ to a court of inquiry even without referring the dispute for adjudication. A reference to a court of inquiry
is not a subsidiary proceeding which is dependent upon the existence of a proceeding relating to the dispute before an

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industrial tribunal.15 For making a valid reference under this clause to a court of inquiry, the following conditions have to
be satisfied:

(a) the appropriate government must be of the opinion that an industrial dispute exists or is apprehended;

(b) the matter referred to must be one appearing to be connected with or relevant to an industrial dispute; and

(c) the order of reference must be an order in writing.

Once these conditions are satisfied, there is no requirement of law that the government should give particulars in the
notification of the industrial dispute which exists or is apprehended. Before the reference of an industrial dispute is made
for adjudication to an industrial tribunal, the government may set up a court of inquiry for the purpose of inquiring into any
matter appearing to be connected with or relevant to the dispute. The court of inquiry will inquire into those matters and
submit a report of its findings to the appropriate government within six months from the commencement of the inquiry.
That report will furnish materials to the appropriate government for finally determining whether the industrial dispute
should be referred by it for adjudication to the tribunal. The court of inquiry may disclose the circumstances under which
the appropriate government may consider that it is not necessary to refer the dispute for adjudication. In that event, the
matter will end and the government may await further developments before referring the dispute for adjudication. If on the
other hand, the materials embodied in the report disclose circumstances which make it necessary for the government to
refer the dispute for adjudication to the tribunal, the appropriate government will refer the matter for adjudication to the
industrial tribunal. But there is nothing in the language of the Act warranting that once an industrial dispute is referred to a
tribunal, matters connected with the industrial disputes cannot be referred to a court of inquiry.16 The government is not
precluded from first constituting a court of inquiry and then referring to it matters connected with or relevant to an
industrial dispute.

(iii) Labour Court

The government has the discretion to refer an ‘industrial dispute’ or any matter appearing to be connected with or relevant
to the ‘dispute’ to a labour court under cl (c), if such dispute or matter relates to any matter specified in the second
schedule to the Act.17 The first proviso to s 10(1)(d) uses only the word ‘affected’ but s 10 (lA) and s 10(5) use the word
‘interested’ or ‘affected’. There is a difference in the import of the words ‘interested’ or ‘affected’. For instance, a union
which sponsors the cause of an individual workman is ‘interested’ in the dispute, but the workmen who are the members of
the union are not necessarily ‘affected’ by the dispute.18 But, the expression ‘likely to affect’ in the first proviso to s 10
(l)(d) should be interpreted to have the same import and should be understood in the same way as the words ‘workmen
concerned in the dispute’ in s 33 of the Act.19 It is clear from the proviso to s 10(1)(d) that a reference to a labour court
with respect to a matter which falls within the third schedule is permissible only when by the application of its mind, the
appropriate government comes to the conclusion that the dispute is not likely to affect more than one hundred workmen
and that it is, therefore, proper to make a reference to the labour court. The opinion so formed by the government must be
displayed by the order of reference although in a proper case, the formation of that opinion could be demonstrated by
independent evidence.20 In Blue Star, the Patna High Court repelled the contention that the reference should have been
made under s 10(2) and not under s 10(1)(c), and held that, though there was difference between the two provisions, once
the reference was made under s 10(1)(c) or s 10(2), the procedure for adjudication would be the same; the parties would be
required to put in their written statement, adduce evidence and so on, and that being the position, the distinction would be
academic in nature, particularly so, where no case was made out that the parties were likely to suffer or would have
suffered prejudice.21

(iv) Industrial Tribunal

The discretion of the appropriate government under s 10(1) is very wide to refer an industrial dispute or any matter
appearing to be connected with, or relevant to, the dispute, whether it relates to any matter specified in the second schedule
or the third schedule, to a tribunal for adjudication.22 An order which refers for adjudication any matter specified in the
schedule, cannot be held to be vague or uncertain on the ground that it did not specify what was considered as ‘dispute’
and what were constituted as ‘connected matters’, when the schedule indicated with sufficient clarity what those matters
were.23 In Kamani Employees’ Union, the State of Maharashtra referred certain disputes for adjudication to the industrial
tribunal including one relating to production bonus. Subsequently, while the adjudication of that reference was pending,
the government made another reference to the same tribunal for adjudication of the question whether the existing incentive
scheme of production bonus should be replaced by a new incentive scheme. This order of reference referred to the earlier
order of reference, also stating that the company made a representation to the State Government that the terms of reference
already made should be supplemented so as to include the above question. It was further stated that the government is of
the opinion that the matter on which further reference is asked for by the employer is ‘connected with or relevant to the

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said dispute’ regarding the revision of production bonus which was already the subject-matter of the earlier reference. The
Supreme Court held that the second order of reference was neither a withdrawal of the previous reference nor was it a case
of supersession of that reference. On the other hand, the question regarding the nature of the modification to be effective to
the production bonus scheme had to be considered by the tribunal, having due regard to the scheme as it existed as well as
to the various suggestions that may be made by the parties. If the employer had relied on a newly evolved scheme, it was
competent to the tribunal to consider how far that scheme could be adopted in this particular case and this aspect of the
matter could have been considered by the tribunal, because it was ‘connected with or relevant to the dispute’ relating to
production bonus. Hence, there was no interference in any manner with the power of the tribunal in adjudicating upon the
demands relating to production bonus as the question referred for adjudication in the subsequent reference was really a
matter ‘connected with or relevant to the dispute’ already pending adjudication.24 Where the reference of an industrial
dispute raised by workmen claiming upwards revision of wage-scales or dearness allowance is made for adjudication, a
dispute arising out of the counter-claim made by the employer asking for downwards revision should also be referred as it
would be ‘connected with and relevant’ to the dispute of the workmen for the purpose of proper adjudication.25

First Proviso

Normally, the matters specified in third schedule to the Act are referable to an industrial tribunal under s 10(1)(d) but the
first proviso to sub-s (1) carves out an exception in cases where the disputes relate to any matter in the third schedule and
are not likely to affect more than 100 workmen.26 In such cases, the ‘appropriate government’ has been given the discretion
to make a reference to a labour court under cl (c) of s 10(1). The requirements of this proviso are two, namely:

(i) that the dispute is not likely to affect more than 100 workmen; and

(ii) the ‘appropriate government’ thinks it fit to make the reference to a labour court.

The word ‘affected’ cannot be equated with the word ‘interested.’ For instance, ‘the union which sponsors the cause of an
individual workman is ‘interested’ in the dispute but the workmen who are members of the union are not necessarily
‘affected’ by the dispute’.27 Therefore, it is not sufficient that more than 100 workmen are interested in the dispute but the
dispute, in fact, should be likely to ‘affect’ more than 100 workmen. The question, whether the dispute is likely to affect
more than 100 workmen or not is a question of fact. In Rangavilas Motors, the question raised was about the implication of
the words ‘if it so thinks fit’. The Supreme Court observed:

It is not necessary that the order of reference should expressly state that it is because of the proviso that a reference is being made
to the labour court and if the reference can be justified on the facts, there is nothing in the Act, which makes such a reference
invalid.28

The purport of this view is that, in case the facts justify that the dispute is not likely to affect more than 100 persons, it
implies that the government thought it fit to refer the matter to a labour court, even though there is no material on record to
indicate that the Government had applied its mind to the applicability of the proviso. In other words, the requirement of
‘thinking fit is implicit in the fact of making the reference’. This view is not sound, because it completely ignores the
second requirement of thinking the dispute to be fit for reference to the labour court. Thus, even an erroneous reference to
a labour court merely because more than 100 persons are likely to be affected would be a valid reference. Thus, the words
‘if it so thinks fit’ would be rendered redundant.

Second Proviso

This proviso vests the government with an overriding power of making a reference in case the dispute relates to a public
utility service and a notice of strike or lock-out under s 22 has been given.29 In such a case, making of reference is
imperative. Further, the appropriate government can make reference even if the conciliation proceedings before a
conciliation officer or any proceedings under s 33A or 33 C are pending in connection with such a dispute. However, this
proviso contains two exceptions. The appropriate government may refuse to make the reference if it considers:

(i) that the notice of strike or lock-out, as the case may be, under section 22 is of frivolous or vexatious nature; or

(ii) that it would be inexpedient to make the reference.30

But in case, the government refuses to make the reference in view of these two reasons, it shall have to comply with the
requirements of s 12(5) viz, to record its reasons for refusing to make the reference and communicate those reasons to the

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concerned parties. The reasons of the Government in coming to the conclusion that the notice is of frivolous or of
vexatious nature or it is inexpedient to make the reference before refusing to make the reference are amenable to judicial
review,31 but the appropriate government is the sole arbiter of the question whether the notice of strike or lockout under s
22 is frivolous or vexatious, or whether it is inexpedient to make a reference. These are not objective facts which can be
determined by a court of law. If, therefore, the government comes to a conclusion and forms an opinion which is not
vitiated by mala fide or based on irrelevant or extraneous considerations, then the decision of the government would not be
amenable to judicial review.32 This proviso, however, will not apply if the notice as required by s 22 has not been given or
is illegal or does not comply with the requirements of sub-s (4) of s 22 of the Act. Even where the notice under s 22 is
given, which comprises of many demands and each one of which constitutes a separate dispute, the government is not
bound to make a reference of all the disputes and demands.33

Third Proviso

This proviso has been inserted by the amending Act 46 of 1982.34 It empowers the Central Government to refer the
industrial disputes, in relation to which it is the appropriate government, to a labour court or an industrial tribunal, as the
case may be, constituted by the State Government. Now; it is not necessary that the Central Government, where it is the
appropriate government, must refer the disputes only to the labour courts or industrial tribunals constituted by the Central
Government.

Subject Matter of Dispute

Before a dispute can be referred under s 10(1), the first and the foremost requisite is that it should be an ‘industrial dispute’
as defined in s 2(k). Then, s 10 requires that the ‘appropriate government’ must form its opinion on the material before it
that the ‘industrial dispute’ is ‘existing’ or is ‘apprehended’. After forming the opinion, the government under s 12(5) has
to be satisfied with respect to the expediency of making the reference. Then, only the government will make or refuse to
make the reference. Some illustrative cases dealing with matters which are fit and which are not fit for reference are set out
below.

(i) Matters Fit for Reference

A dispute regarding modification of the Standing Orders under the Industrial Employment (Standing Orders) Act 1946,
would be an ‘industrial dispute’, as certified Standing Orders like all other Standing Orders define conditions of service
and, therefore, any dispute concerning the propriety, fairness or reasonableness of the Standing Orders could be validly
referred for adjudication.35 Any action taken by an employer under the Standing Order giving rise to a dispute between the
employer and the workmen on a matter concerning the ‘employment’ or ‘non-employment’ can be referred by the
government.36 Likewise, a dispute relating to an item covered by the certified Standing Orders of an establishment can be
validly referred.37A dispute between the management and workmen regarding inclusion of the emoluments earned by
workmen for festival holidays for the purposes of computing bonus under para 7(2) of the scheme under the Coal Mines
Provident Fund and Bonus Scheme Act, would be an ‘industrial dispute’ which can be referred for adjudication under s 10
of the Act.38An industrial dispute between a cooperative society and its workmen can be validly referred for adjudication,
notwithstanding the fact that there are provisions in the Cooperative Societies Act itself for settlement of disputes because
the Industrial Disputes Act, being a special Act dealing with settlement of industrial disputes, general powers under the
Cooperative Societies Act cannot govern them.39 A dispute relating to the production bonus scheme which is in substance
an incentive wage plan, is an industrial dispute and can be referred for adjudication.40 A difference between management
and certain workmen as to whether the latter are bound by a settlement arrived at a conciliation proceeding, is an industrial
dispute which can be referred.41 Similarly, an agreement between a person representing a minority of workers and
management cannot put an end to a dispute, and such a dispute, therefore, can be referred for adjudication.42 The
government can refer for adjudication even a dispute as to whether the closure of particular establishment was real or a
pretence of closure.43 A question relating to permission under s 33, to dismiss a workman is different from the question
whether the dismissal of that workman is justified or not. Therefore, even during the pendency of an appeal in the Supreme
Court against an order under s 33, a dispute relating to the dismissal of a workman can be validly referred.44 When the
subject-matter of reference made to the labour court relates to a term of employment or to the conditions of employment of
a person, the labour court has jurisdiction to examine whether the dispute arose out of any unfair labour practice by the
employer, giving cause for the dispute.45

(ii) Matters not Fit for Reference

There are certain matters which cannot be referred for adjudication on account of certain statutory provisions, even if those
matters are ‘existing’ or ‘apprehended’ industrial disputes. Disputes regarding matters covered by a settlement arrived at
under s 12(3) cannot be referred to adjudication during the continuance of such settlement.46 Matters covered by previous
awards cannot be referred during the currency of such awards.47 However, matters which are expressly stated to have been

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not settled by a settlement arrived at between the parties can be referred to the tribunal for adjudication.48 Non-
implementation of an award does not, however, fall within the definition of an industrial dispute; therefore, it cannot be
referred for adjudication.49 A proceeding pending under s 36A is not a proceeding in respect of an industrial dispute within
the meaning of s 33(1) or s 33(3). Therefore, a reference made by the appropriate government under s 36A is not a
reference in respect of an industrial dispute within the meaning of s 10(1).50It is only a reference in regard to the
interpretation of an award. Section 10 would not apply to a reference under s 36A. Any dispute relating to a closure which
is admitted or found to be real will fall outside the purview of this Act and, therefore, cannot be validly referred by the
government, hence disputes relating to a closed industry and those relating to post closure period cannot be referred, but
disputes relating to pre-closure period,51or arising simultaneously with the closure can be referred.52 Even the question
whether closure was justified or not, cannot constitute reference of an industrial dispute.53 There can be no valid reference
with respect to the reinstatement of a workman who is not alive on the date of reference, as his claim for reinstatements
must be deemed to have died with him.54

In Indian Oil Corporation, Biswas J of Gauhati High Court held that the reference of a dispute for regularisation of
contract workers in the services of the principal employer would only frustrate the object of ameliorating the plight of the
workmen. The only course for immediate relief was to issue notification under s 10 of the Contract Labour (Regulation and
Abolition) Act 1970.55 In striking contrast, in a case involving the same employer, ie, Indian Oil Corporation, and the same
issue, ie, regularisation of contract labour, the learned single judge, Mukul Mudgal J of Delhi High Court held that a
dispute could be raised under s 10(1) of the ID Act, even in the absence of a notification issued under s 10 of the Contract
Labour Act. On this view of the matter, the learned judge directed the Central Government to make a reference of the
dispute.56What do these two diametrically opposite decisions of two High Courts involving the same issue and, still worse,
the same employer convey to the general public and industrial community, except callousness, indifference and judicial
anarchy? Between the two, the decision given by Biswas J (for Division Bench) is right and that of Mukul Mudgal J is
wholly misconceived and wrong. In Electronics Corporation, the facts were: the industrial tribunal, Maharashtra, passed
an award rejecting the reference made to it on the ground that the respondent-union failed to establish the existence of
employer-employee relationship between the company and some 30 of its members whose services were terminated. The
tribunal accepted the contentions of the company to the effect: (i) that there was no contract of employment between the
company and the ‘retainers’ claiming to be employees since they were independent persons with whom the company had
entered into a contract for servicing of television sets sold by them to the customers; and (ii) that the industrial dispute
referred was not maintainable as there could be no dispute between the company and the ‘retainers’. On a consideration of
the documents as well as oral evidence, the tribunal came to the conclusion that the ‘Retainer’s had individually entered
into contracts with the company for service of repairing the Television sets sold by the company and that there was no
master and servant relationship between the company and the 30 persons who claimed to be employees. The said award of
tribunal was quashed by the High Court. Setting aside the order of the High Court and restoring the award of the tribunal,
Pasayat J (for self and Panta J), observed:

“It was fairly accepted and admitted that taking into consideration that retainership was more beneficial than the regular service
employees, all the seven employees left the service of the company and accepted the retainership. It was also accepted that there
were several retainers who were working in several places like Delhi, Calcutta, Lucknow. ... The retainers used to visit the
company for collecting complaints, collecting components, for receiving payments and for repairing the called-back sets. Except
for these reasons, they were not required to go to the company. ... The Tribunal also noted that the witness has admitted that the
scheme was for retainership and there was no question of his asking for absorption as regular employees. Till 1989-90 they were
getting more income than the regular employees and, therefore, had not sought for regularization. But since 1989-90 they found the
regular employees were getting more salary than their income, and, therefore, they claimed regularization. ... the Tribunal was right
in its view that no employer-employee relationship existed. Observations of the High Court to the contrary are clearly untenable
because the findings and the reasons given by the Tribunal have not been discussed ...”57

In Bongaigaon Refinery, the Supreme Court held that the reference of the dispute raised by a person, whose joining report
was refused by the company on being found that he secured employment by concealing certain material facts, stood
vitiated in so far as he had not entered the employment of company. The Division Bench of High Court was not right in
directing the government to make a reference, and the reference under s 10 was wholly unwarranted and uncalled for.58 In
Sanat Kumar Dwivedi, the Supreme Court held that where the workman accepted the order of reinstatement without back
wages, a subsequent dispute raised by him for back wages is clearly not maintainable.59 Where reference of a dispute
relating to retrenchment was made, the labour court was bound to adjudicate the said dispute. It has no jurisdiction to
dismiss the dispute on the ground that the appointment of the workman was not legal.60 In Oriental Fire, a Constitution
Bench of the Supreme Court held that the dispute as to the categorisation of workmen in different categories under a
scheme framed by the management for rationalising and revising the pay-scales and other terms and conditions of services
of its employees, is well within the jurisdiction of the tribunal to resolve the problem and that if a reference of the dispute
was made under s 10, the tribunal cannot decline to adjudicate it on the ground that it had no jurisdiction to go into the

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merits of the case.61The employees working in the statutory canteens run departmentally in Central Government offices
hold civil posts and hence, the industrial tribunal has no jurisdiction to adjudicate the reference under s 10 of the Industrial
Disputes Act.62 Where the management suspended operations on two occasions and issued notice that the employees
would not be entitled to wages for the period on the principle of ‘no work, no pay’ and the government referred the
resultant dispute for adjudication, the High Court held that there was an industrial dispute and the government was justified
in making the reference.63

In International Airports Authority, Raveendran J (for self and Panta J) held that where there is no abolition of contract
labour under s 10 of the Contract Labour (Regulation and Abolition) Act 1970 (CLRA Act), but the contract labour
contend that the contract between principal employer and contractor is sham and nominal, the remedy is purely under the
ID Act. The industrial adjudicator can grant the relief sought if it finds that contract between principal employer and the
contractor is sham, nominal and merely a camouflage to deny employment benefits to the employees and that there is in
fact a direct employment, by applying tests like: who pays the salary; who has the power to remove/dismiss from service
or initiate disciplinary action; who can tell the employees the way in which the work should be done, in short who has
direction and control over the employees.64 A dispute relating to the removal of a ‘badli’ worker on account of
unauthorized absence cannot be the subject-matter of an industrial dispute, and such a dispute cannot be referred for
adjudication. Being a ‘badli’ workman, he is not entitled to any protection under the Act and reference made to the labour
court would be incompetent.65 In GM, ONGC, briefly state, the facts were: The demand raised by the contractual workers
union for regularization in the services of ONGC was resisted by ONGC both in conciliation and before the tribunal on the
ground that there was no employer-employee relationship between the workers and the Corporation. The award passed by
the tribunal directing regularization was challenged in a writ petition before a single judge, who quashed the award passed
by the tribunal. The Division Bench reversed the findings of the single judge and restored the award passed by the tribunal,
with the result the Corporation moved the Supreme Court. Justice HS Bedi (for self and Tarun Chatterjee J) took note inter
alia of the following finding of facts recorded by the tribunal:

(1) That there existed a relationship of master and servant.

(2) That there was no contractor appointed by ONGC.

(3) That the ONGC used to supervise and allot works to individual workers.

(4) That the ONGC took disciplinary action and called for explanations from the workers.

(5) The workers were paid wages though they did not attend their duties due to Cachar Bandh and due to flood.

(6) The wages were paid direct to the workers by the ONGC and the acquaintance roll was prepared by the Management to
make payment to the workmen.

While dismissing the appeal, the learned judge held:

The pleadings in the present matter would show that the core issue before the Tribunal was with regard to the status of the
employees as employees of the ONGC or of the contractor and that it was this issue simpliciter on which the parties went to trial.
Mr Dave’s argument with regard to the decision of the Tribunal being beyond the reference, is to our mind, and in the
circumstances, hyper technical. In this background, we feel that the judgments cited by Mr Dave pertaining to regularization of
contract labour are not applicable to the facts of the case.66 ()

Judicial Review of the Order of Reference

Making of an order of reference under s 10(1) is undoubtedly an administrative function of the ‘appropriate government’
based upon its own opinion with respect to the existence or apprehension of an industrial dispute and its subjective
satisfaction as to whether it would be expedient to make a reference or not. Though the earlier thinking was that such an
order cannot be interfered with at all by the courts,67 the recent trend of judicial thinking is that though in a very limited
field, the order of reference is amenable to judicial review under certain circumstance68 but the reference of an industrial
dispute is not barred by the existence or availability ofanother remedy because raising an industrial dispute is a well
recognised and legitimate mode of redress available to a workman which has achieved statutory recognition under the
Industrial Disputes Act and this statute-recognised mode of redress cannot be denied to a workman, the reference cannot be
amenable to judicial review on the ground of existence or availability of alternative remedy.69 From the decided cases, no
exhaustive or final criteria emerges as to on what grounds an administrative order is amenable to judicial review. Nor any
such exhaustive or final criteria is possible in a growing branch of law like the administrative law. However, some broad

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heads under which an order of reference may be reviewable are discussed below.

(i) The Referring Government not the ‘Appropriate Government’

Section 10(1) opens with the words ‘where the appropriate government is of opinion’. Hence, if the government making
the reference is not the appropriate government within the meaning of s 2(a) of the Act, the reference will not be a valid
reference. But in cases where certain disputed questions of fact are involved, the proper course would be to raise a
preliminary objection before the tribunal. The correctness of the order of the tribunal on the preliminary question can then
be challenged before the writ court.

(ii) Improper Opinion, no opinion and non-application of mind

The appropriate government has to form an opinion with respect to the ‘existence’ or ‘apprehension’ of an industrial
dispute. Thus, the power to make an order of reference arises only when necessary opinion is formed by the appropriate
government with respect to existence or apprehension of an industrial dispute.70 With respect to the existence or
apprehension of an industrial dispute, the government is the sole arbiter and its opinion is final. Likewise, the
determination of the question whether it is expedient to make a reference or not, depends upon the discretion of the
appropriate government. But in forming its opinion or in exercising its discretion as to whether a reference should be made
or not if the government had no material before it or even if it had the material before it, it had not applied its mind to such
material, or had based its opinion on certain irrelevant and extraneous considerations or left out of consideration, certain
vital matters which it ought to have taken into consideration, the order of reference would be invalid and would be liable to
be quashed. When the validity of order of reference is challenged, a reviewing court can make inquiry as to whether the
point in dispute was taken into account or not, to quash the order on certiorari and to direct the government to re-consider
the reference. In such a case, the opinion of the government would be based on non-consideration of relevant material and
the point for adjudication that has been referred is not the point in dispute between the parties. If the dispute referred by the
‘government is altogether different from the dispute between the parties, the reference will be reviewable.71 However, a
tribunal which is the creature of the statute has to take the reference as it is made to it and it cannot question the power or
authority of the appropriate government in making the reference. Nor can it enter upon the consideration as to whether the
pre-conditions empowering the State Government to make the reference existed or not, when the State Government is not a
party to the proceedings before it.72 The reference, is reviewable only by a High Court in its writ jurisdiction under Art.
226 of the Constitution. The opinion of the government may be assailable for the following reasons:

In forming the ‘opinion’ that an industrial dispute existed or was apprehended, if the government had no material before it, the
order of reference will be liable to be quashed73 The formation of opinion cannot import an arbitrary or irrational state of affairs. In
other words, the opinion must be grounded on ‘materials which are of rational and probative value’.74 An order of reference under
section 10, though justiciable, cannot be held to be bad merely because there was no material before the government on which it
could come to an affirmative conclusion.75 If in making the order of reference, the government did not take into account some vital
material which it ought to have considered, and upon taking it into consideration, the government could not have made the
reference, the reference will be liable to be quashed.76 If in forming the opinion, that the reference should be made, the ‘appropriate
government’ took into account any extraneous or irrelevant consideration which had no rational connection with the question of
making the reference, in the ultimate analysis, the case would be one of ‘no opinion’ at all and the order of reference would be
beyond the scope of the power of the government under section 10(1) of the Act.77 In such a case the order of reference will be bad
even if the authority has acted bona fide and with the best of intention.78

Before forming the opinion, the appropriate government must have applied its mind to the questions whether there is an
industrial dispute existing or apprehended and whether it will be expedient to refer the dispute on the basis of material
before it. If the government has not at all applied its mind, it cannot be said to have formed its opinion on these questions.79
If the order of reference is challenged on the ground that the government has not applied its mind to the material before it,
the government will have to satisfy the writ court by filling an affidavit to show that it had material before it and that the
reference was made after taking into consideration the material regarding the existence or apprehension of the dispute. The
absence of such evidence may make the reference vulnerable on the ground of lack of material or non-application of mind,
but the opinion must be of the authority itself. In other words, if the authority in forming the opinion has acted under the
dictates of another body, the exercise of power to make the order of reference would be bad.80 In SAIL, explaining the
nature and scope of jurisdiction under s 10 of the Contract Labour (Regulation and Abolition) Act 1970 (CLRA Act 1970)
and under s 10 of ID Act 1947, Sinha J (for self and Dalveer Singh J) held that for the purpose of exercising jurisdiction
under s 10 of the CLRA Act, 1970 the appropriate government is required to apply its mind. Its order may be an
administrative one but the same would not be beyond the pale of judicial review. It must, therefore, apply its mind before
making a reference on the basis of the materials placed before it by the workmen and/or management, as the case may be
while doing so, it may be inappropriate for the same authority on the basis of the materials that a notification under s

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10(1)(d) of ID Act of 1947 be issued, although it stands judicially determined that the workmen were employed by the
contractor. The State exercises administrative power both in relation to abolition of contract labour in terms of s 10 of the
CLRA Act of 1970 as also in relation to making a reference for industrial adjudication to a labour court or a tribunal under
s 10(1)(d) of ID Act of 1947. While issuing a notification under the CLRA Act of 1970 the state would have to proceed on
the basis that the principal employer had appointed contractors and such appointments are valid in law, but while referring
a dispute for industrial adjudication, validity of appointment of the contractor would itself be an issue as the state must
prima facie satisfy itself that there exists a dispute as to whether the workmen are in fact not employed by the contractor
but by the management.81

In another case involving SAIL, the facts were: the union made a representation to Labour Commissioner in 1987 with a
request to admit in conciliation the dispute about the regularization of services of its members who were working as
contract labours with M/s Bardhan and Co under principal employers ie, the present appellants. The state of West Bengal
issued notification on 15 July 1989 prohibiting employment of contract labours in the 4 stockyards. The aforesaid
notification was kept in abeyance from time to time and ultimately was extended till March 1994. Some workers belonging
to the Union filed a writ petition in the Calcutta High Court seeking absorption in view of the said notification. It was inter
alia stated that they were working as contract labours. A single judge ordered that the writ petitioners were entitled to
absorption and regularisation in SAIL from 15 July 1989, which was upheld by the Division Bench. Following the
Constitution Bench decision in SAIL, the Supreme Court quashed the order of the Division Bench as well as the
proceedings initiated on the reference made by the State Government, and further observed that the union was all along
focusing on several aspects but never claimed that the contract was sham or bogus and that there could be no automatic
absorption on the abolition of contract labour system.82 In Brijbhushan Yadav, facts were: a few workmen engaged as
security guards through contractor to work in BSNL, Ministry of Telecommunications, secured an award through the
industrial tribunal, and lost before the High Court approached the Supreme Court. Setting aside the order of High Court
and remitting the matter back to it, Sathasivam J (for self and Chatterjee J) observed:

... If it is established that after 30.10.1997, there was no valid contract between the security agency and the Department, the stand
of the workmen that they were continued as security guards by the Telecom Department is to be accepted. As observed earlier,
perusal of the order of the High Court does not show that any specific reference and discussion was made to the order/orders
extending their contract with security agency up to 31.05.1999. (para 12) ... before this Court, respondents-Department have filed
an application for permission to file additional documents as Annexures R-3 to R-8 in support of their stand that all the workmen
were employed by the security agency and not by the Department. (para 13) ... we set aside the impugned order passed by the High
Court in all these matters and remit the same to the High Court for fresh disposal after rendering a specific finding as to the
subsistence/existence of agreement or contract with the security agency up to 31.05.1999 and pass appropriate orders. Both the
Department as well as the workmen are permitted to place all the relevant material before the High Court in support of their
respective claim and it is for the High Court to decide the issue on merits ...83 (para 14).

In Bharat Coking Coal, the facts in brief were: a contractor was engaged in 1977 to construct a coal washery on a turnkey
basis. After the completion of the project in 1979, the contractor terminated the service of all, but 39 skilled workers, after
paying retrenchment compensation etc. The said 39 workers were retained to look after the maintenance work of washery
after it was operationalized, and their services too were terminated after one year in January, 1981, resulting in a dispute
raised by them demanding absorption in BCCL. The dispute was referred under s 10 for adjudication to an industrial
tribunal, which directed absorption of the workmen in BCCL with continuity of service and consequential benefits. The
BCCL did not challenge the award and implemented the terms. Thereafter, some five workers including the appellants in
the present case filed a civil suit for declaration which was decreed by the civil court in their favour and upheld by the first
and second appellate courts. Quashing the orders of the courts below directing reinstatement of the said workers, the
Supreme Court held:

... the appropriate Government is empowered to make a reference under Section 10 of the Act only when “Industrial dispute exists”
or “is apprehended between the parties”. (para 25). .. the services of the appellants and those at whose instance the reference was
made were terminated long back prior to making of the reference. These workers were, therefore, not in the services of either
Contractor or/and BCCL on the date of making the reference in question. Therefore, there was no industrial dispute that “existed”
or “apprehended” in relation to appellants’ absorption in the services of the BCCL on the date of making the reference. (para 26) ...
since the appellants’ services were discontinued or/and retrenched (whether rightly or wrongly) long back, the question of their
absorption or regularization in the services of BCCL, as claimed by them, did not arise and nor this issue could have been gone
into on its merits for the reason that it was not legally possible to give any direction to absorb/regularize the appellants so long as
they were not in the employment. (para 27) ... absorption and regularization in the service can be claimed or/and granted only when
the contract of employment subsists and is in force inter se employee and employer. (para 28). .. the only industrial dispute, which
existed for being referred to the Industrial Tribunal for adjudication was in relation to termination of appellants’ employment and -

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whether it was legal or not? It is an admitted fact that it was not referred to the Tribunal and, therefore, it attained finality against
the appellants. (para 29) ... the reference, even if made to examine the issue of absorption of the appellants in the services of
BCCL, the same was misconceived. (para 30) ... the reference made to examine the issue of appellants’ absorption qua the BCCL
was incapable of being referred to on the said question and in any event, it was incapable of being answered in favour of the
appellants. (para 33) ... having regard to the peculiar facts of this case and the reasons, which we have set out herein below, we are
inclined to hold that the appellants are entitled to claim the retrenchment compensation from the Contractor/BCCL.84 (para 36)

(iii) Mala fides

In any enactment which creates powers, there is a condition implied that the powers shall be used bona fide for the purpose
for which they are conferred.85A priori, a reference made to any of the authorities under this section will be mala fide and
colourable exercise of power if it is made for achieving an alien purpose, viz, a purpose not mentioned in the statute.
Though mala fides of personal ill-will is not to be held established except on clear proof, it is not necessary that it should
be established only by direct evidence or that it must be discernible from the impugned order. Bad faith can be deduced as
a reasonable and inescapable inference from the proved facts.86 In the classic words of Warrington LJ:

No public body can be regarded as having statutory authority to act in bad faith or from corrupt motives, and any action purporting
to be that of the body, but proved to be committed in bad faith or from corrupt motives, would certainly be held inoperative.87

An action suffers from legal mala fide when its ostensible purpose is different from the real one.88 However, such bad faith
will be a matter to be established by a party propounding bad faith or mala fide. He should affirm the set of acts and it
would not be sufficient merely to allege the facts but they will have to be proved.89 Inference of mala fide cannot be drawn
from the mere fact that the government was acting with promptitude and without any delay.90 In British India Corpn, the
Supreme Court remanded the case to the Punjab High Court as inspite of an allegation of mala fides on the part of the
government, it had dismissed the petition in limine basing its decision on a mere comparison of the relevant items in the
previous order of reference with the impugned order of reference. Bhagwati J observed that when there was an allegation
of mala fides on the part of the government, the High Court should have issued notice to the respondent and after
according a hearing to the parties, it should have recorded its decision on consideration of all the circumstances of the case
which would have been brought to its notice. The learned judge emphasised that the High Court was not justified in
dismissing the petition in limine as it was tantamount to preventing the parties from presenting their respective cases.91 In
DN Ganguli, while dealing with a case of cancellation of a notification of reference, the Supreme Court reiterated the same
view and held that if validity of cancellation of notification making an order of reference was challenged on the ground of
mala fides, it might be relevant and material to inquire into the motive of the government. Thus, if the court finds that the
government was actuated by mala fide motives in making an order of reference, the reference would be invalid.92

(iv) No Industrial Dispute

The dispute with respect to the existence or apprehension of which the appropriate government is to form its opinion must
be an industrial dispute as defined in s 2(k). If it could be shown that what was referred was not an industrial dispute at all,
the jurisdiction of the authority to deal with the dispute can be questioned even though the factual existence of the dispute
may not be the subject of a party’s challenge.93 However, the determination of the question whether a particular dispute is
an industrial dispute or not may depend upon the determination of various facts. Hence, a preliminary objection has to be
taken before the authority to whom the reference is made that what is referred is not an industrial dispute at all. The
correctness of the decision of the authority on this question will be amenable to judicial review94 but if what was referred
to adjudication was prima facie not an ‘industrial dispute’ at all, satisfying the fundamental requirements of s 2(k), the
order of reference will be invalid and incompetent ab initio.95 In National Engineering Industries, the Supreme Court held
that if there is no industrial dispute in existence or apprehended, the appropriate government lacks power to make any
reference.96 Where the government made a reference of a dispute relating to the termination of a workman on receipt of the
failure report of the conciliation officer under s 12(4), it could not be said that the reference made was incompetent on the
ground that there was no dispute in existence or apprehended as on the date of reference.97

(v) Improper Subject Matter of Dispute

A reference to a board can only be made of a matter of any dispute for promoting a settlement, and reference to a court of
inquiry can be made of any matter appearing to be connected with or relevant to the dispute. But the reference to the
adjudicatory authorities, viz, the labour courts and industrial tribunals has to be made for the matters specified in the
second or the third schedule or any matters appearing to be connected therewith or relevant thereto. If a reference of a
matter covered by the third schedule is made to a labour court, unless it falls within the purview of the first proviso, such

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reference would be invalid. If the matter that is referred is not connected with or relevant to an ‘industrial dispute’, the
reference of such matter would again be invalid. Where the government made a reference in terms: ‘whether the
workmen... are entitled to wages for the lockout period from...’, and the management in a writ petition contended that the
reference was bad in law, as there was no lockout at all, the Supreme Court upheld the order of High Court quashing the
reference on the ground that it did not reflect the real dispute between the parties. The Supreme Court held that it is open to
the High Court to examine whether the government had taken note of the relevant considerations while making a reference
of a dispute, and the finding of the High Court in this regard cannot be disputed. The proper course is to direct the
government to take steps to make the reference to the concerned authority after taking all the relevant material on record.1
Where the management declared a lockout as a consequence of go-slow tactics resorted to by workers, and the government
made a reference in terms ‘whether the workmen shown in annexure A are entitled to wages with effect from 1 December
2000 onwards...’, a single judge of Delhi High Court quashed the reference, and held that the reference should be made of
the entire dispute, as the entitlement of workmen to wages was directly dependent on whether lockout was legal or
justified.2 In India Cements, the Madras High Court held that, whereas the dispute related to ‘non-absorption’, the
reference made by the government in terms of ‘termination of service’, was a mistake not of substance but of form, and
hence it would not affect the validity of notification referring the industrial dispute for adjudication.3

(vi) The Activity not ‘Industry’

The adjective ‘industrial’ in the definition of ‘industrial dispute’ relates to the dispute in an industry as defined in s 2(j) of
the Act.4 In other words, besides the requirement of s 2(k), unless the dispute is related to an ‘industry’ as defined in s 2(j),
it will not be an ‘industrial dispute’. Therefore, if the reference is made of a dispute which relates to any activity which is
not ‘industry’, it will not be a valid reference.5 The reference of an industrial dispute which arises after the establishment
becomes dead on account of closure, shall therefore, be invalid as the provisions of the Act will apply only to an existing
or live industry.6 A reference is not necessarily bad because at the time when it was made, the industry no longer existed.
The power of the state to make a reference is to be determined with reference not to the date on which it is made but with
reference to the date on which the right, which is the subject matter of the dispute, arises, and the machinery provided
under the Act would be available for working out the right which accrued prior to the dissolution of the business. The
dispute should be in a live industry and not in a dead or closed industry as the definition of industrial dispute presupposes
continued existence of ‘industry, and a closed or dead establishment would not fall within the definition of ‘industry’. The
provisions of this Act, therefore, will not apply to such an industry, because the entire scheme of the Act assumes that there
is in existence an ‘industry’. In other words, where, the business has been closed and it is either admitted or found that the
closure is real and genuine, any dispute arising with reference thereto would fall outside the purview of the Act and that
will be, a priori so, if a dispute arises—if one such could be convinced—after the closure of the business between the
quondam employer and employees.7

There is thus a clear distinction between the two classes of cases, namely, (i) those in which the cause of action arose at the
time when the business had been closed; and (ii) those in which the cause of action arose at the time when the business was
being still carried on. There can be no ‘industrial dispute’ in respect of the first category of cases, because the real subject-
matter of the dispute had ceased to exist when the dispute arose. But in regard to the second category, where the dispute
actually arises before the closure of the business, it does not cease to be an ‘industrial dispute’ merely because
subsequently the industry is closed. There is no provision of law according to which the closure of industry extinguishes
the industrial dispute which had arisen before such closure.8 In UP Electric Supply, the Supreme Court discountenanced
the proposition that, as soon as a particular industry ceases to function, any adjudication in respect of a dispute which had
occurred prior thereto becomes abortive and observed that ‘if the dispute is one which relates to the past working of the
industry and in particular where the claim of the workmen is for benefits which according to their view had accrued to
them in the past, it can hardly be said that the adjudication is without any purpose’. If the workmen ask for better service
conditions like the revision of wage scales, dearness allowance, medical and other facilities, gratuity etc, it would be
useless for the tribunal to complete the adjudication and award how the service conditions etc ought to be bettered or
revised, where the industry is non est. Where however the dispute, is over a claim to benefits by way of bonus for work
done in the past, it would be the duty of the tribunal to complete the adjudication and make its award. If the tribunal finds
that because of the services rendered by the workers in the past, an industry reaped profits a portion whereof should go to
the workmen, it should not lie in the mouth of the employers to say that inasmuch as they have ceased to carry on the
business their obligation to pay for the service rendered in the past should be wiped out.9

(vii) Reference Contrary to Law

The order of reference should be made to the authorities in accordance with the provisions of s 10(1). If the order is
contrary to these provisions in the matter of selecting the appropriate authority, the order shall be invalid.10 Likewise,
where an order of reference covering some items of industrial disputes is pending adjudication a further order of reference
covering the same subject-matter would be invalid.11 Besides, where the reference is inconsistent with statutory provisions,

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it would be invalid.12 For instance, in Indian Rubber, the provisions of the Industrial Disputes Act were suspended in
respect of the relief undertaking by a notification under the West Bengal Relief Undertakings (Special Provisions) Act
1972. A reference of an industrial dispute between the undertaking and its workmen to an industrial tribunal by the State of
West Bengal was held to be without jurisdiction being contrary to law.13 In Corpn of the City of Mangalore, the Karnataka
High Court held that in a reference under s 10A, the age of superannuation fixed by the rules under the Madras District
Municipalities Act cannot be modified by an adjudicator or arbitrator because such a reference would not be valid in law.14
Likewise, reference of a dispute the subject matter of which is covered by the provisions of the Contract Labour
(Regulation and Abolition) Act 1970 will not be valid and proper. Though the recent judicial trend is to permit all
industrial disputes to be referred to adjudication, the reviewing court cannot be blind to the real issues involved in the
case.15 Similarly, a dispute with respect to payment of gratuity which is covered by the Payment of Gratuity Act 1972
being a self-contained Code, cannot be validly referred or be adjudicated upon by the adjudicatory authorities under the
Act.16 A reference which is violative of the Constitutional provisions such as Art. 14 will be invalid in law. But the
situation will be different where an order of reference is quashed by the High Court as invalid. A second reference of the
same dispute after curing the defect will not be barred, as at the time of such reference there was no existing dispute
pending before the tribunal in the eye of law.17 In Tarang Theatre, a reference made under the provisions of the UP
Industrial Disputes Act 1947 by the State Government, was rejected by the labour court on the ground that the unionwhich
had taken up the matter of the workmen, could not espouse the cause of the workman, without going into the merits of the
case. Subsequently, the State Government made a reference of the dispute under s 10 of the Central Industrial Disputes
Act. A single judge of the Allahabad High Court held that the subsequent reference was not contrary to law as it was not
repugnant to s 12 of the UP Act. The maintainability and validity of the reference have to be viewed with reference to the
circumstances existing at the time when the reference was made.18 A single judge of the Madras High Court held that if the
government refers a dispute relating to one establishment and its workmen, whereas it had already rejected precisely the
same dispute between another establishment and its workmen, will not be discriminatory.19 This view is not the correct
view of the law. The reference in such a situation will not only be discriminatory but may also be mala fide. If on the date
of making the reference there was no jurisdictional defect or any other bar operating to prevent reference being regarded as
valid reference, the validity of the reference will not be open to challenge.20 The order of reference will not be invalid
merely because of some inadvertent statement in it. For instance, where the order of reference mentioned that the dispute
related to the dismissal of four workmen while only three were dismissed, the entire dispute was not vitiated. The validity
of the reference relating to the dismissal of three workmen was upheld.21

(viii) Disputes Covered by a Settlement or a Previous Award

Reference of an industrial dispute, the subject-matter of which is covered by a settlement as defined in s 2(p) of the Act,
would be invalid during the period of operation of such a settlement.22 The reason is simple. The jurisdiction to conciliate,
arbitrate or adjudicate is there only when there is an industrial dispute. Adjudication under s 10, arbitration under s 10A
and conciliation under s 12 are the remedies available under the Act for resolving an industrial dispute. When once a
dispute is resolved by a settlement in the course of conciliation or otherwise, no dispute remains to be resolved by
arbitration or adjudication.23The law is well settled that if there is a binding settlement which has not been terminated in
accordance with the procedure laid down in the Act, no industrial dispute can be raised with regard to the items which
form the subject-matter of the settlement. Such matters cannot be the subject-matter of conciliation proceedings under s 12
or of reference under s 10 of the Act.24 But the reference of the points of dispute which are not covered by the settlement or
which were not visualised at the time of the settlement cannot be prevented.25 Likewise, if a settlement is not in accordance
with the requirements of the provisions of the Act or the rules, it will not be a settlement in the eye of law and it will not
bar reference of the points purported to have been settled under it.26 In Motor Industries, the Karnataka High Court held
that if after the termination of service of the workmen, a settlement was arrived at between the union of the workmen and
the management which was accepted by the workmen, there could be no industrial dispute for the government to refer for
adjudication. If, in spite of such settlement, the government were to make an order referring the settled dispute for
adjudication, once again it would be a clear case of acting without authority of law and such an action could not but be
described as capricious and arbitrary exercise of power or abuse of the power on the part of the government.27 The question
whether the settlement is in accordance with the statute and the rules, is a question of law which could be raised even
during the course of argument without taking any plea even if it is not raised in the pleadings.28 A settlement can be arrived
at either in the course of conciliation proceedings or outside the conciliation proceedings. A settlement arrived at in the
course of conciliation proceedings shall be binding on all parties to the industrial dispute and all heirs, successors or
assignees of the employer and all persons who were employed on the date of the dispute and all persons who subsequently
become employed in the establishment under s 18(3) of the Act. But a settlement arrived at otherwise in the course of
conciliation proceedings will bind only parties to the settlement. It will not bind the workmen who were not a party to the
settlement.

In ICI, the management entered into a settlement with one of the unions. Subsequently, an industrial dispute relating to the
same demands was referred to an industrial tribunal for adjudication at the instance of the other union. A single judge of

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the Bombay High Court held that the reference was validly made despite the settlement. The court observed that a
settlement entered into between the management and the union outside the conciliation proceedings will bind only the
workmen who were members of that union in terms of s 18(1), and not the other workmen and they would not be bound by
such settlement. A reference of an industrial dispute relating to the matters covered by such settlement would not be
barred. The tribunal, therefore, can validly adjudicate upon such a reference. The jurisdiction of the tribunal would be of
the widest amplitude. The tribunal may, in its adjudication adopt the terms of the settlement and impose the same on the
workmen raising the dispute if satisfied that the terms of the settlement are reasonable and the imposition of the terms of
the settlement upon the entire body of workmen in the industrial establishment would be a fair and just resolution of the
dispute. The fact that a majority of the workmen is a party to the settlement would be a material and relevant factor to be
considered by the tribunal in this connection. Which terms of the settlement are fair and need be extended to the entire
body of workmen and which need not be, are matters within the discretion of the tribunal. The tribunal may even
incorporate in the award the beneficial terms of such settlement without imposing the obligatory or restrictive covenants
contained therein. It would further be open to the tribunal notwithstanding the settlement to grant reliefs which might be
higher than the reliefs obtainable under the settlement. In such a case, such relief would be available even to the persons
covered by the settlement because the award will be binding on all workmen by virtue of s 18(3). The principle of ‘all or
none’ has no relevance in industrial adjudication. Therefore, the contention that the settlement being an integral whole
should be applied to all workmen, including those who were not parties to the settlement, either as a whole or not at all, is
not sustainable. But only such matters as have been settled by the settlement cannot form the subject-matter of conciliation
or reference.29 In Spencer, the relevant clause in the settlement provided that the dismissal of the workman ‘will stand but
the company will have no objection to dispute in this respect being referred for adjudication to a tribunal by the
government’. The High Court negatived the contention of the employer that since the question as to the dismissal was
finally decided by the settlement, the reference was not competent and the tribunal had no jurisdiction to entertain the
same. The court pointed out that the clear intention of the parties that the employer was not willing to withdraw the order
of dismissal, but whether such order was valid or not would finally be decided by the tribunal and, therefore, the settlement
did not affect the right of the parties to continue prosecuting the reference of the dispute regarding the dismissal of the
workman.30 But if a settlement is not a settlement as defined in s 2(p), it will not bar reference of the dispute for
adjudication. Mere acquiescence in such a settlement or its acceptance by workers would not make them a party to the
settlement.31 However, the question whether the settlement had, in fact, been terminated or was subsisting is a question of
fact and will require determination by the adjudicating authority.32 Likewise, a matter covered by an award of an arbitrator,
labour court, tribunal or national tribunal cannot be validly referred for adjudication during the period of operation of such
award.33

In ANZ Grindlays Bank, the facts were: A long-term settlement was entered into between the Bank and AIGB Employees
Association, which was the majority union, admittedly under s 18(1). The minority union, ie, AIGB Employees Federation
refused to sign the settlement. Nevertheless, the management offered to extend the benefits of the said bi-partite settlement
to employees, who were not members of the Association, subject to the condition that they accept the terms of settlement
in writing. The Federation (i.e., the minority union) objected to the said clause. The Government referred the dispute raised
by the Federation for adjudication in December 1998 in terms: “Whether the terms of bipartite settlement dated 18-8-1996,
between the management of ANZ Grindlays Bank Limited, and All Indian Grindlays Bank Employees Association which
bound withholding of benefits of settlement to workmen who are not members of All India Grindlays Bank Employees
Association until the individual gives acceptance of the settlement in the given format is legal and justified? If not, what
relief are the workmen entitled to?” The writ petition filed by the bank challenging the said reference was dismissed at
both the tiers of the High Court. Quashing the orders of the High Court, a Bench comprising Sema and Mathur, JJ,
observed that a plain reading of the reference made by the Government did not show that it did not refer any dispute or
apprehended dispute between the bank and the federation; and that it did not refer any demand or claim made by the
Federation or alleged refusal thereof by the bank; that in such circumstances, it was not possible for the Court to hold that,
on account of the settlement dated 18 August 1996 arrived at between the bank and the association, any dispute or
apprehended dispute had come into existence between the bank and the federation; the mere action of the bank in asking
for written acceptance of the terms of the settlement from the non-members of the association could not be said to have
given rise to any kind of dispute between the bank and the federation; and, therefore, the reference made by the
government for adjudication was wholly redundant and uncalled for.34

It is submitted that this case was rightly decided by the Supreme Court. The dispute raised by the employees federation
was, in the first place, frivolous and vexatious, nay, there was indeed no factum of a dispute. While making the reference,
the Government had acted in haste without applying its mind to the facts. This is yet another instance [a few others
including Sindhu Resettlement Corporation (supra), have been discussed elsewhere in this section], which discloses the
casual style in which higher bureaucracy in the government proceed to conduct official business in a callous and desolate
manner without applying its mind to the facts and circumstances of the case and, still worse, in gross violation of the very
law, which the bureaucrats are expected to enforce. Otherwise, how can one explain the irresponsible and reckless
reference of the so-called ‘dispute’, where no industrial dispute of the kind contemplated in s 2(k) had ever existed! Then

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comes the turn of the High Court. With great respect, both the learned single judge and the Division Bench handled the
case in a cavalier fashion and passed mediocre orders without first recording a finding on the question “was there any
dispute at all, as defined in s 2(k) of the Act, which required resolution through adjudication”, in the light of the facts that
(i) the bank signed a valid settlement with the majority union, (ii) that it was willing to extend the benefit to all the
employees of the bank, who were not members of the majority union, subject to their accepting the terms of settlement, in
writing; and (iii) that the federation, which is a minority union had itself not raised any demands on the bank, except
objecting to the requirement of written acceptance of the terms of settlement. The Supreme Court rightly quashed the
reference made by the government was bad, while at the same time setting aside the orders passed by the learned single
judge and the Division Bench of the High Court.

(ix) Reference to Arbitration

In Karnal LK Sanghatan, the State Government had referred an industrial dispute which was already pending arbitration
before an arbitrator under s 10A. Quashing the reference, the Supreme Court observed that s 10 and s 10A are the
alternative remedies to settle an industrial dispute. Therefore, an industrial dispute can either be referred to an industrial
tribunal for adjudication under s 10 or parties can enter into arbitration agreement and refer it to an arbitrator under s 10 A.
But once the parties have chosen their remedy under s 10A, the government cannot validly refer that dispute for
adjudication under s 10.35

(x) Notice

The function of the government under s 10(1) in making the order of reference is an administrative and not a judicial or
quasi-judicial one, for determination of the rights of any parties. Hence the failure of the ‘appropriate government’ to give
notice of the order of reference to the parties does not vitiate the exercise of the statutory power of the government vested
in it under s 10(1) of the Act. Since the order of reference is to be made upon subjective satisfaction of the government,
there is no question of any hearing being given to the parties. Hence, an order of reference without giving notice to the
parties concerned would not be violative of the rules of natural justice.36 The failure of the government to give notice to
either of the parties would not sustain a charge of mala fides on that ground alone.37

(xi) Promissory Estoppel

An interesting point arose before the Calcutta High Court in Kesoram Industries, the employer had declared lock-out on
account of illegal activities of the workmen. In the course of conciliation proceedings, the labour commissioner made
certain suggestions in favour of the workmen, except that the lockout would be treated on ‘no work, no pay’ basis.
Consequently, the State Government represented to the management that if it accepted the labour commissioner’s
suggestions and lifted the lock-out, the State Government would take no further steps under the Act. Accordingly, the
management accepted the suggestions and lifted the lock-out. But the workmen did not accept the labour commissioner’s
terms and resorted to strike. Consequently, the government referred the dispute under s 10 as to whether the workmen were
entitled to wages for the period of lock-out and strike. The management challenged the validity of the reference on the
ground that the reference was barred by promissory estoppel. A single judge of the High Court held that the reference was
not barred by the assurance of the government.38

Parties to Dispute

Although a reference may be in general terms, it must cover all the members of the known class of workers. Where it is
worded in such a manner that it cannot be predicated of any particular workman of that class that he is a party to the
proceedings, the reference will be defective.39 Where a notification states that a dispute relating to retrenchment, etc, of
workmen (specific cases to be cited by employees) is referred to the tribunal, a person, who claims to be a worker and
insists that his case should be decided by the tribunal, cannot take up the contention that the reference is not valid under s
10 because it has not specified the names of workmen. That being so, the tribunal is also entitled to decide that he is not a
workman and refuse to pass any order when he approaches it. 40 For instance, where there was a dispute in a factory which
had been leased out by a company to a lessee, it was the lessee who was in the management of the factory and not the
lessor company. Thus, the lessor company would not be a proper party in the reference of the dispute for adjudication.
Even though the notice of reference is served on the lessor company, it could not be made a party to the proceedings before
the tribuna1.41There is nothing in the Act to indicate that the government cannot make a reference indicating that a party to
the dispute is a trade union. The government should make a reference in writing indicating the parties to a dispute and the
point of controversy. The parties might be indicated individually or collectively with reasonable clearness.42 In Hotel
Imperial, the Supreme Court observed that where the dispute is of general nature relating to the terms of employment or
conditions of labour as a body, it is not necessary to mention in the order of reference the names of the particular workmen
who might have been responsible for the dispute. Thus, where the workers of an employer are collectively made parties to
an industrial dispute, all those in the service of the employer on the date of reference under s 10(1) are parties to the

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dispute. But the court specifically stated that where the dispute refers to the dismissal, etc, of particular workmen as
represented by the union, then it may be desirable to mention the names of those workmen in the order of reference.43 The
government may even make one common order of reference with respect to a number of employers or establishments, if
there is a functional integrality among them or, if necessary, for the sake of uniformity.44

Constitutional Validity of Section 10(1)

Having regard to the provisions of the Act, it is clear that s 10 is not discriminatory in its ambit. The discretion given to the
‘appropriate government’ under s 10(1) is not an unfettered or uncontrolled discretion nor an unguided one, because the
criteria for the exercise of such discretion are to be found within the terms of the Act itself. The provisions of s 10 are not
unconstitutional, as there is no infringement of the fundamental rights under Arts. 14 and 19(1)(f) and (g) of the
Constitution.45 Likewise, the refusal of the government to refer a dispute for adjudication would not amount to
infringement of Art. 14 of the Constitution merely because the government had in an earlier case referred the case of a
similar employee for adjudication. If in law, the government is justified in refusing a reference, the applicability of Art. 14
does not arise at all.46

Provisions of Co-Operative Societies Acts

The question, whether the relevant provisions of the Co-operative Societies Acts bar a reference under s 10 of the
Industrial Disputes Act, has vexed the courts and given rise to conflict of judicial dicta. The question involves the
construction of the words ‘touching the business of a society’ in corresponding state statutes. A single judge of the Calcutta
High Court in Co-operative Milk Societies, on the construction of the words ‘touching the business of a co-operative
society’ in s 86 of the Bengal Co-operative Society Act, held that an industrial dispute between a co-operative society and
its workmen does not relate to the actual business of the co-operative society, even if the dispute consequently, remotely or
ultimately touches or affects the business of the co-operative society, Thus, such dispute shall not fall within the ambit of
the expression ‘any dispute touching the business of a co-operative society’. Therefore, a dispute regarding disciplinary
action taken by a co-operative society against a paid servant of the society was expressly excluded from the purview of the
Registrar’s jurisdiction under s 86.47 But this view was dissented from, by a Division Bench of that High Court in Co-
operative Industrial Home, in which it was observed that the consensus of the judicial opinion was against the very wide
proposition laid down by the single judge in Co-operative Milk Societies’case. The Bench held that the dispute between
society and employee regarding the dismissal of an employee was a dispute ‘touching the business of the society’ and it
also related to its affairs. It was further observed that the Bengal Co-operative Societies Act 1940 excluded the application
of the Industrial Disputes Act.48 In Rashtriya Khadan, a Full Bench of MP High Court held that the employees of the co-
operative societies engaged in industrial activities are to be governed by the Industrial Disputes Act and not by s 55 of the
MP Co-operative Societies Act 1969.49 The Madras High Court in South Arcot CMT Society, took the view that the
definition of industrial dispute’as given in this Act does not include ‘any controversy regarding terms concerning an
association or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or
conditions of employment, regardless of whether or not the disputants stand in approximate relation of an employer and
employee’. The court also expressed doubt whether the Industrial Disputes Act itself applied to such disputes when there
was the Madras Co-operative Societies Act 1932, which provided a machinery for the settlement of adjudication of
disputes under s 51.50

In Kasturbanagar, a single judge of that High Court, however, took the view that the scope of s 51 of the Madras Co-
operative Societies Act was limited and it related only to the disputes ‘touching the business of a registered society’ and
arising between the society and its servants. Therefore, a claim for retrenchment compensation under s 25F of the
Industrial Disputes Act by a workman retrenched by the society, though a dispute between the society and its servant, was
not a dispute ‘touching the business of the registered society’. Hence, the industrial disputes such as relating to
retrenchment compensation or gratuity etc are not contemplated by the provisions of the Co-operative Societies Act and
such disputes are covered by the Industrial Disputes Act which provides a special machinery to decide them.51The single
judge distinguished the decision of the Division Bench which rested on the fact that the employees there were shareholders
and were not ‘workmen’ as defined in the Industrial Disputes Act. Subsequently, another Division Bench of that High
Court in Salem CM Society, has affirmed the view of the single judge in Kasturbanagar CHC Society and dissented from
the view of the Division Bench in South Arcot CMT Society in view of certain provisions of the Act having not been
noticed by the bench in that case.52 The Bombay High Court in Majoor Sahkari Bank, held that the Industrial Disputes Act
applies to the industrial disputes arising between a co-operative society as employer and their workmen as its employees.
Therefore, a reference under s 10(1) would not be barred by the provisions of the Bombay Co-operative Societies
Act.53Likewise, the Kerala High Court, on the construction of the words ‘touches the business of a co-operative society’ in
s 60(1) of the Travancore Cochin Co-operative Societies Act 1951 held that this provision did not preclude a reference
under s 10 of the Industrial Disputes Act. It was further held that s 10 of the Industrial Disputes Act was designed to deal

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with controversies which by their very nature were outside the purview of ordinary litigation like the one contemplated
under s 60(1) of the Travancore-Cochin Co-operative Societies Act.54 In Malabar CCB, that High Court observed:

Cooperative societies are creatures of statute, controlled by their Constitution, and concerned with their contracts. Industrial
disputes stem, not from the subtle refinements of contractual obligations but from the rougher jurisprudence of social justice and
readjustment. The uplands of industrial tribunals are out of bounds to the Registrar of Co-operative Societies. ... even if the
workmen of cooperative societies are its shareholders, that would not preclude a reference of an industrial dispute under the
Industrial Disputes Act between a co-operative society and its workmen because a co-operative society is not a mere aggregate of
its members but it has a legal personality, separate and distinct from that of its shareholders.55

Dealing with the provisions of s 96 of the Gujarat Co-operative Societies Act, the Gujarat High Court in Gujarat State
CLM Bank, took the view that this provision related to its ordinary meaning, viz, adjudication of rights and obligations
under the ordinary law and not the adjudication of industrial disputes’ which have acquired a special meaning and
significance under the industrial law. The industrial law seeks to provide an extraordinary process of adjudication which
has been designed to deal with controversies, which by their very nature are outside the scope and purview of ordinary
litigation. Further, an ‘industrial dispute’ connotes an entirely different concept from disputes arising under the
Cooperative Societies Act between the parties mentioned in s 96 of the Act, and the authority functioning under the Co-
operative Societies Act, cannot have the power and jurisdiction to decide differences or claims or demands that arise under
the industrial law.56 A similar view has been taken by the Rajasthan High Court in Kendriya SS Sangh, wherein it was held
that the provisions of s 61 of the Rajasthan Co-operative Societies Act would not necessarily exclude the applicability of
the Industrial Disputes Act to a dispute between a co-operative society and its workmen.57 Likewise, the Orissa High Court
in Bhanjanagar CU Bank, held that a dispute regarding disciplinary action taken by a Co-operative Bank. not being within
the jurisdiction of the registrar of co-operative societies, could be validly adjudicated by an industrial tribunal.58 In Co-op
Central Bank, the Supreme Court subscribed to the general proposition that the jurisdiction of the industrial tribunals under
the Industrial Disputes Act will only be barred if the dispute in question can be completely decided by the registrar under s
61 of the Andhra Pradesh Co-operative Societies Act 1964 and in the circumstances of the case held that the ‘industrial
dispute’ in question referred to the tribunal could not possibly be referred for decision to the registrar under s 61 of that
Act, as it related to alteration of a number of conditions of service of the workmen which relief could only be granted by an
industrial tribunal dealing with an ‘industrial dispute’ and could not fall within the powers of the registrar dealing with the
dispute under s 61 of the Act.59

In Allahabad District Cooperative, the court observed that the dispute relating to conditions of service of the workmen
employed by the society cannot be held to be a dispute touching the business of the society within the meaning of s 70 of
the UP Co-operative Societies Act 1966.60 The dispute in respect of betterment and upliftment of service conditions of
managers employed in village agricultural cooperative credit societies does not come within the purview of the
Constitution, management or the business of a co-operative society and, therefore, s 75 of the Rajasthan Co-operative
Societies Act, is not a bar for raising an industrial dispute.61The reference of a dispute to a labour court under this Act is
not barred by the provisions of ss 55(2) and 64 of the Madhya Pradesh Co-operative Societies Act 1961.62 A Full Bench of
the Punjab and Haryana High Court in Sonepat Co-op. Sugar Mills, struck down the provisions of s 128 of the Haryana
Co-operative Societies Act 1984 in so far as they excluded the jurisdiction of the industrial tribunals and labour courts to
decide the disputes relating to a member and a co-operative society being invalid, arbitrary and ultra vires Art. 14 of the
Constitution.63 In Bhopal CCB, a single judge of Madhya Pradesh High Court held that the dismissed employees of
cooperative societies registered under the Madhya Pradesh Co-operative Societies Act 1960, could take recourse to the
remedy provided under s 55 of that Act, and not under s 10 of the Industrial Disputes Act. A reference under s 10 of the ID
Act was, therefore, incompetent and the award passed in pursuance thereof was a nullity.64 In Sagarmal, the Supreme
Court took the same view and held that the provisions of the Industrial Disputes Act did not apply to the employees of co-
operative bank.65Section 102 of Haryana Cooperative Societies Act 1984, which provides that a dispute between the
employee and the society has to be decided by an arbitrator, does not exclude the jurisdiction of the labour court to
adjudicate the dispute on a reference made under s 10(1) of the ID Act.66 In Bijapur CMPS Union, the issue before
Supreme Court was about the date from which the ouster of jurisdiction of labour courts and tribunals in service disputes
between a cooperative society and its employees takes place. The Karnataka Cooperative Societies Act 1959 was amended
by Act 19 of 1976, by which service disputes between a cooperative society and its employees was to be referred to the
Registrar for adjudication, and there was no specific provision therein to the extent of ousting the jurisdiction of labour
courts and industrial tribunals, with the result that the Registrar of Cooperative Societies provided an alternative remedy in
addition to the machinery provided under the ID Act. However, the said Amendment of 1976 was neither reserved for, nor
received, the assent of President. In the meantime, the said Act was further amended by Act 2 of 2000 specifically
excluding the jurisdiction of labour courts and industrial tribunals coupled with a ‘non obstante’ clause. Specifically, two
questions fell for the consideration of the court.

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(1) Whether the jurisdiction of Labour Court under the ID Act, was barred by section 70 of the KCS Act with reference to
co-operative societies and if so, from when;
(2) Even if Labour Court had jurisdiction, whether the appellant was entitled to file an application under Section 10(4A) of
ID Act in respect of a cause of action which occurred in 1978.

After an analysis of legislative history, Raveendran J (for self and Mathur J) answered question (1) by summarizing the
legal position with precision in the following words:

(a) Even though clause (d) was added in section 70(2) with effect from 20.1.1976, section 70(1) did not exclude or take away
the jurisdiction of the Labour Courts and Industrial Tribunals under the Industrial Dispute Act to decide an industrial
dispute between a Society and its employees. Consequently, even after insertion of clause (d) in section 70(2) with effect
from 20.1.1976, the Labour Courts and Industrial Tribunals under the Industrial Dispute Act, continued to have
jurisdiction to decide disputes between societies and their employees.
(b) The jurisdiction of Labour Courts and Industrial Tribunals to decide the disputes between co-operative societies and their
employees was taken away only when sub-section (1) and sub-section (2)(d) of section 70 were amended by Act 2 of
2000 and the amendment received the assent of the President on 18.3.2000 and was brought into effect on 20.6.2000;
(c) The jurisdiction to decide any dispute of the nature mentioned in section 70(2)(d) of the KCS Act, if it answered the
definition of industrial dispute, vested thus :
(i) exclusively with Labour Courts and Industrial Tribunals till 20.1.1976;

(ii) concurrently with Labour Courts/Industrial Tribunals under ID Act and with Registrar under section 70 of the KCS
Act between 20.1.1976 and 20.6.2000; and
(iii) exclusively with the Registrar under section 70 of the KCS Act with effect from 20.6.2000.67 ()

Having stated the legal position thus, the learned judge proceeded to deal with question (2) above, ie, whether the
appellant-workman was entitled to file an application under s 10(4A) in respect of a cause of action that arose in 1978.
This part of the decision has been discussed at the appropriate place in this section as it directly falls under the Karnataka
amendment. In North East Karnataka RTC, the facts briefly were: a driver of the corporation was dismissed after
conducting an enquiry on the ground that while overtaking another bus of the corporation, he hit the hind part of that bus
with the result the other bus lost control and hit a tree resulting in the death of 4 passengers and injuries to many others.
The labour court ordered reinstatement on the ground that there was no evidence to show that the said driver had not taken
reasonable care in driving the bus. The High Court too upheld the award of the labour court. Allowing the appeal and
remitting the matter to the labour court, Kapadia J (for self and Pasayat J) observed that the facts show that the offending
bus collided with the hind portion of the other bus and the impact of the offending bus was so great that the other bus went
and dashed into a tree resulting in injuries to 56 passengers and death of 4 lives. The learned judge directed the labour
court to decide, whether in the circumstances of the case, the doctrine of res ipsa loquitur would be applicable or not.68

Shops and Establishments Act

A Full Bench of the Madras High Court in Safire Theatre, held that s 2A read with s 10 of the Industrial Disputes Act does
not fully bar the remedy under s 41 of the Tamil Nadu Shops and Establishments Act 1947. If a decision is rendered under
s 41 (2) of the Tamil Nadu Act before the Government had made a reference under s 10 of the Industrial Disputes Act, the
decision would be final between the parties. However, before the conclusion of the inquiry under s 41 of the Tamil Nadu
Act, if the Government makes a reference under s 10 of the Industrial Disputes Act, the pending proceedings under s 41 of
the Tamil Nadu Act could not be continued. Both the remedies are available to a workman but in the alternative.69 In Bata
India, a single judge of the Kerala High Court held that the remedy under s 18(2) of the Kerala Shops and Commercial
Establishments Act 1960, does not exclude the remedy of a reference under s 10(1) of the Industrial Disputes Act 1947.70
In Nirchiliya, the Supreme Court observed:

Once remedy could be worked out in either of the forums when the proceeding before the labour court was not continued, in the
absence of any specific bar under either the Madras Shops and Establishments Act 1947 or the Industrial Disputes Act against the
alternative forum being moved, the jurisdiction of the authority under the Madras Act would not be barred.71

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The Madras High Court in TN Chandra, held that a workman entitled to the benefits of chapter VA of the Industrial
Disputes Act, can have such right adjudicated upon even in proceedings under s 41 of the Tamil Nadu Shops and
Establishments Act 1947. However, the employee has to satisfy the authority with respect to its entitlement to the benefits
of that chapter by establishing that he is a ‘workman’ and the establishment in which he is employed is an ‘industry’ within
the meaning of Industrial Disputes Act. He has also to establish that he has been in continuous service of the employer for
not less than one year as required by s 25B of the Act.72

Section 34A of the Banking Companies Act 1949 (Act 10 of 1949)73

The only result of s 34A of the Banking Companies Act 1949 is that, in regard to two items,viz, secret reserves and
provisions, the reasonable quantum which’ would be available for taking into account by the adjudicator would be
estimated and determined by an expert body which is a governmental authority or practically a department of government,
viz, the Reserve Bank of India, which is entrusted by law with the duty of maintaining the credit structure of the country.
Hence, s 34A of the Banking Companies Act, does not come in the way of effective adjudication by an industrial tribunal.
The disputes between the parties in relation either to wages, bonus or other amenities or perquisites which involve
financial obligations on the part of the employer remain even after the enactment of s 34A of the Banking Companies Act,
with the adjudicator and he alone can determine the rights of the parties subject to the provisions of the industrial law or
other relevant legislation, and the relief which he could award to the employees remains the same. The adjudicator alone
determines the capacity of the industry to pay or bear the enhanced cost.74

Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act 1971 (Act 1 of 1972)

In Daji M Surve, the Bombay High Court held that the provisions of the Maharashtra Recognition of Trade Unions and
Prevention of Unfair Labour Practices Act 1971 bars a reference of the industrial dispute with respect to a matter which the
adjudicatory authorities under that Act are seized.75 In Cipla, the Supreme Court held that the industrial court and labour
court constituted under MRTU and PULP Act would not have jurisdiction to entertain disputes on behalf of contract
workers and the right forum would be the labour court/industrial tribunal constituted under the Industrial Disputes Act, and
that such disputes could only be adjudicated upon in a reference made under s 10 of the ID Act.76 This view was reaffirmed
in Vividh Kamgar Sabha.77

Civil Suits

Section 9 of the Code of Civil Procedure,1908 provides:

S. 9.Courts to try all civil suits unless barred.—The courts shall (subject to the provisions herein contained) have jurisdiction to
try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred.

Explanation I.—A suit in which the right to property or to an office is contested is a suit of a civil nature, notwithstanding that such
right may depend entirely on the decision of questions as to religious rites or ceremonies.

Explanation II.—For the purposes of this section, it is immaterial whether or not any fees are attached to the office referred to in
Explanation I or whether or not such office is attached to a particular place.

The principles relating to the jurisdiction of ordinary civil courts with respect to matters which are entrusted to special
tribunals constituted by the legislature have been summed up in Mulla’s Code of Civil Procedure, as follows:

(i) Where the statute re-enacts a right existing at common law and provides a special form of remedy therefor, the
jurisdiction of the civil court to deal with the matter is not excluded unless the statute says so expressly or by necessary
implication.
(ii) So also where the statute creates a new right but provides no special remedy therefor, it can be enforced in the ordinary
civil courts.
(iii) However, where a statute creates a new right not existing at common law and specifies a particular mode in which it is to
be enforced, that bars by implication, the jurisdiction of civil courts.

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(iv) Even when the jurisdiction of civil courts is excluded, they would have jurisdiction to examine into cases where the
provisions of the statute have not been complied with or where the statutory tribunal has not acted in conformity with the
fundamental principles of judicial procedure, or of natural justice.78

These principles are based on the celebrated dictum of Willies J in Wolverhampton, wherein the learned judge stated the
law thus:

There are three classes of cases in which a liability may be established and founded upon a statute. One is, where there was liability
existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from
the remedy which existed at common law; there unless the statute contained words which expressly or by necessary implication
exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of
cases is, where the statute gives the right to sue merely, but provides no particular form of remedy; there the party can only proceed
by action at common law. But there is a third class, viz, where a liability not existing at common law is created by a statute which
at the same time gives a special and particular remedy for enforcing it...The remedy provided by the statute must be followed, and
it is not competent to the party to pursue the course applicable to cases of the second class.79

With respect to Indian statutes creating special liability and providing for procedures and remedies, this statement of law
was adopted by the Privy Counci1.80 The question of the exclusion of jurisdiction of the civil courts by special statutes has
also been the subject-matter of a number of decisions of the Supreme Court.81 In Pabbojan Tea, dealing with the question
of fixation of minimum-wages, the Supreme Court observed:

The exclusion of the jurisdiction of the civil courts is not to be readily inferred, but such exclusion must either be explicitly
expressed or dearly implied and even if jurisdiction was excluded, the civil courts would still have jurisdiction to examine into
cases where the provisions of the Act had not been complied with, or the statutory tribunal had not acted in conformity with the
fundamental principles of judicial procedure.82

On an analysis of the provisions of the Act, the court held that the civil court has jurisdiction to entertain suits for
declaration that the orders of the authority under the Minimum Wages Act were illegal and void and without jurisdiction
and for further declaration that the employees (sub-normal workers) were not entitled to fullminimum wages without
performing a day’s task or without working the prescribed number of hours. Industrial legislation is enacted with the object
of ensuring industrial peace and harmony and preventing the exploitation of labour. The object and purpose of the
Industrial Disputes Act is settlement and investigation of industrial disputes with a view to minimise industrial strife and to
promote industrial peace and harmony and have the industrial disputes decided by special forums, provided in the Act, as
expeditiously as possible. The whole idea underlying the Industrial Disputes Act ‘has been to provide a speedy,
inexpensive and effective forum for resolution of disputes arising between workmen and their employers. The idea has
been to ensure that the workmen do not get caught in the labyrinth of civil courts with their layers upon layers of appeals
and revisions and the elaborate procedural laws, which the workmen can ill afford. The procedures followed by civil
courts, it was thought, would not facilitate a prompt and effective disposal of these disputes. As against this, the courts and
tribunals created by the Industrial Disputes Act are not shackled by these procedural laws nor is their award subject to any
appeals or revisions. Because of their informality, the workmen and their representatives can themselves prosecute or
defend their cases. These forums are empowered to grant such relief as they think just and appropriate. They can even
substitute the punishment in many cases. They can make and remake the contracts, settlements, wage structures and what
not. Their awards are no doubt amenable to jurisdiction of the High Court under Art. 226 as also to the jurisdiction of this
court under Art. 32, but they are extraordinary remedies subject to several self-imposed constraints. It is, therefore, always
in the interest of the workmen that disputes concerning them are adjudicated in the forums created by the Act and not in a
civil court. That is the entire policy underlying the vast array of enactments concerning workmen. This legislative policy
and intendment should necessarily weigh with the courts in interpreting these enactments and the disputes arising under
them’.83

The Act does not contain any provision expressly barring the jurisdiction of the civil courts to entertain disputes which
may fall within the ambit of an ‘industrial dispute’ or within the provisions of chapters 5A or 5B of the Act. These chapters
specifically confer certain special rights on the workmen which are not available to them in common law or under any
other statute. Furthermore, it is now well established that an adjudicatory authority under the industrial law is not bound by
the contract between an industrial employer and his workmen. It has the discretion to modify or extend an existing
agreement or make a new one between the parties.84Though there is nothing in the Act vesting such jurisdiction in the
adjudicatory authorities, it has been conferred on them by the dicta of the Supreme Court. In exercise of this jurisdiction,
the industrial tribunals can award re-instatement of a dismissed employee, reframe wage-structure, award various

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allowances, fringe benefits, bonus and gratuity etc. In such cases, civil courts will have no jurisdiction to grant a decree for
enforcing such rights or to grant injunction to prevent the breach of any such right. However, in cases where the ‘industrial
dispute’ is for the purpose of enforcing any right, obligation or liability under general law or the common law and not a
right, obligation or liability created by the industrial adjudication, or under the Act, then the alternative forums are there,
giving an election to the suitor to choose his remedy either by moving the machinery under the Act or approach the civil
courts. There has been a considerable divergence of opinion in the dicta of various High Courts on the question of the
ouster of jurisdiction of civil courts with respect to industrial disputes.85 In PremierAutomobiles, the Supreme Court found
that the disputes in the case involved adjudication of rights/obligations by the Industrial Disputes Act. However, in view of
the confusion created by the conflicting dicta of various High Courts, the court considered several decisions of the English
and Indian courts on the subject and enunciated the following four principles in para 23 of its opinion:

(1) If the dispute is not an industrial dispute, nor does it relate to enforcement of any other right under the Act the remedy lies
only in the civil court.

(2) If the dispute is an industrial dispute arising out of a right or liability under the general or common taw and not under the
Act, the jurisdiction of the civil court is alternative, leaving it to the election of the suitor concerned to choose his
remedy for the relief which is competent to be granted in a particular remedy. ... There will hardly be a dispute which
will be an ‘industrial dispute’ within the meaning of section 2(k) of the Act and yet will be one arising out of a right or
liability under the general or common law only and not under the Act.
(3) If the industrial dispute relates to the enforcement of a right or an obligation created under the Act, then the only remedy
available to the suitor is to get an adjudication under the Act.
(4) If the right which is sought to be enforced is a right created under the Act such as chapter 5A then the remedy for its
enforcement is either section 33C or the raising of an industrial dispute, as the case may be.86

The learned judge pointed out that a contingency might arise in regard to the dismissal of an unsponsored workman which
would be an ‘industrial dispute’ in view of s 2A and as such civil courts would hardly have an occasion to deal with cases
falling under this principle. In this connection, the court clearly pointed out that it is plain that the suitor cannot have both
the remedies and he is to choose one or the other. In TI Aron, termination of the service of the employee was declared to be
a nullity in the eyes of law by a civil court in a suit filed under s 9 of the Code of Civil Procedure as it was in flagrant
violation of the statutory provisions. The suit was held to be maintainable under principle no 2 stated above. Sabhahit J of
the Karnataka High Court pointed out that if the suit was for reinstatement, it could be instituted only under the provisions
of the Industrial Disputes Act, as such, it would have fallen within principle No 3 and not principle no 2 as in Premier
Automobiles. The learned Judge went on to observe:

Thus, considering in this perspective, it is obvious that the impugned order of termination of the Karnataka State Road Transport
Corporation, which was earlier known as ‘TheMysore State Road Transport Corporation’, which is a statutory Corporation, is
susceptible to attack as having been in flagrant violation of the provisions made in the statute and as such, the termination or
discharge is a nullity in the eye of law. Such a suit arises out of the general law of the land and is maintainable in a civil court.
Such a dispute may also be brought up under the Industrial Disputes Act. (para 19)...Thus, considered as a whole, I am satisfied
that the dispute that arises on the facts of the present case is of such a nature as can be taken cognizance of under section 9 of the
CPC. There is no implied bar of jurisdiction in view of the provisions of the Industrial Disputes Act as the relief claimed is not one
that arises exclusively out of the provisions of the Industrial Disputes Act but is of a general nature arising out of the general law,
the cognizance of which can be taken under section 9 of the CPC.87 (para 26).

The distinction drawn by Sabhahit J, between general law and special law is artificial, unwarranted and is out of context.
The further distinction drawn by the learned judge between a statutory corporation and a non-statutory corporation is
equally irrelevant, for the purpose of determining the question relating to the jurisdiction of civil courts, so long as it is
admitted that the employee is a ‘workman’ and what was sought to be adjudicated is an ‘industrial dispute’ within the
meaning of ss 2(s) and 2(k), respectively, of the ID Act. In the face of a binding ruling given in Premier Automobiles,
which clearly laid down that the jurisdiction of civil courts stands ousted by implication, to hold that the dispute could be
taken cognisance of under s 9 of Code of Civil Procedure, is misconceived and wrong. In Bharat Petroleum, the Bombay
High Court held that the obligations of workmen or trade union contemplated by s 22 are obligations in realm, enforceable
by the society at large. The obligation not to go on strike is prescribed under a special statute, namely, Industrial Disputes
Act. The only manner in which the statute contemplates their enforcement is by way of penalties prescribed in s 26, ie,
imprisonment and/or fine. A civil suit to restrain the employees from going on a strike, irrespective of whether the
proposed strike is legal or illegal under a special statute, cannot be brought in a civil court.88 However, in IOC, the Delhi
High Court granted an interim injunction under O 39, r 3 of the CPC against the employees from staging the proposed

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strike, in view of the fact that the conciliation officer issued notices to the parties and that the demands were under active
consideration, and a strike would cause irreparable loss and injury not only to the employer but also to the public at large.89

A cursory glance of the Act would show that the only rights and obligations it creates are under chs VA and VB.90 The
claims of workmen for reinstatement, wage-rise, dearness allowance and other fringe benefits etc though recognised by
industrial adjudication, are not created by the Act. Such claims, being de hors, the contract would however, be beyond the
jurisdiction of the civil courts. Hence, by necessary implication, the jurisdiction of the civil courts is barred to give such
reliefs. It is, therefore, suggested that principle no 3 should be slightly amended to read: ‘If the industrial dispute relates to
the enforcement of a right or an obligation created under the Act or by industrial adjudication, then the only remedy
available to the suitor is to get an adjudication under the Act’. In Jitendra Nath Biswas, the Supreme Court held that the
relief of reinstatement and back wages is available under the Industrial Disputes Act and cannot be granted by civil court,
and, therefore the jurisdiction of civil court is excluded.91 A Full Bench of the Punjab and Haryana High Court in Sukhi
Ram, on the application of principle no 2 held that the civil court has jurisdiction to entertain the question whether the
termination of the service of a workman is void, illegal, ultra vires and against the principles of natural justice. 92 From the
facts stated in the judgement it is not clear whether the consequential relief sought by the plaintiff was for damages or for
reinstatement and back wages. It may be pointed out that the civil court undoubtedly, will have the jurisdiction to give
former relief but to award the latter relief would be beyond its jurisdiction as such relief could only be awarded by an
industrial tribunal or labour court.

A single judge of the Orissa High Court in the Orissa RTC, held that the dispute about the legality of retrenchment of a
workmen being an ‘industrial dispute’, the remedy for which has been specifically provided in the Act, is not cognisable
by the civil court.93 Likewise, a single judge of the Kerala High Court held that a dispute relating to the question, as to
whether the transfer of a workman is mala fid e by way of victimisation and unfair labour practice, cannot be of a civil
nature because law does not recognise any limitations on the powers of employers to transfer their employees on the
ground of mala fide or unfair labour practice. However, there is express provision in s 25T read with item 7 of the fifth
schedule to the Industrial Disputes Act regarding the mala fide transfer of a workman from one place to another. The
proper forum for challenging the transfer on the ground of mala fide, victimisation and unfair labour practice is, therefore,
under the Industrial Disputes Act and not the civil court.94 This decision was followed by a single judge of the Kerala High
Court in Mookan, Major.95 In VA Damodaran, though in form the prayer in the suit was for declaring the age of the
plaintiff and that he was entitled to continue in service till a certain date and for granting a permanent injunction restraining
the defendants in any way interfering with the plaintiffs service by way of retirement, in effect, the plaintiff had agitated
that the action of the defendant in retiring him from service was invalid as it was in contravention of the Standing Orders
which fixed the superannuation age at 58 years. Thus, the relief of declaration that was claimed was not only regarding
declaration of the age bur it was regarding contravention of the Standing Orders also. A single judge of the Madras High
Court held that the civil court could not legitimately have jurisdiction to entertain and decide the suit because the relief
claimed through the suit was in substance regarding the legality of superannuation under the Standing Orders.1

A number of mixed questions of law and fact have to be decided before the issue of jurisdiction can be properly disposed
of In order to determine the question whether the suit is triable by the civil court or the industrial tribunal, therefore, the
following questions have to be determined: (i) whether it is an industrial dispute; (ii) whether it is for the enforcement of a
right under the Industrial Disputes Act or a right or obligation under the general or common law. The Calcutta High Court
held that a suit to declare suspension of an industrial Worker as void and illegal is not barred by the provisions of the
Industrial Disputes Act particularly when the matter of suspension has not acquired the character of an industrial
dispute.2Likewise, a suit by a workman for damages for wrongful dismissal before the insertion of s 2A, could not be
ousted by the Industrial Disputes Act.3The question whether a dispute is an ‘industrial dispute’ or not is a jurisdictional
issue upon the determination of which will depend the jurisdiction of the tribunals under the Act under principle no 1 as
enumerated in Premier Automobiles. Hence, it is open to an aggrieved party to approach the civil court for deciding this
question. Alternatively, the aggrieved party may take the preliminary objection before the tribunal that the dispute in
question is not an ‘industrial dispute’. If the dispute is held not to be an ‘industrial dispute’, either by the civil court or the
tribunal, then the industrial tribunal will have no jurisdiction to adjudicate upon the dispute and it is only the civil court
that can decide it. In Rajasthan SRTC, a three-judge Bench of the Supreme Court noticed the controversy arising out of
principle no 2 and particularly the qualifying statement in para 24 of the judgment in Premier Automobiles case (supra).
According to principle no 2, ‘if the dispute is an ‘industrial’ dispute arising out of a right or liability under the general or
common law and not under the Industrial Disputes Act, the jurisdiction of the civil court is alternative and it is left to the
person concerned either to approach the civil court or to have recourse to the machinery provided by the Industrial
Disputes Act.’ After analysing the earlier dicta of the court and the various High Courts, Jeevan Reddy J, reiterated the law
on the subject as follows:

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(1) Where the dispute arises from general law of contract, ie, where reliefs are claimed on the basis of the general law of
contract, a suit filed in civil court cannot be said to be not maintainable, even though such a dispute may also constitute
an ‘industrial dispute’ within the meaning of section 2(k) or section 2A of the Industrial Disputes Act 1947.
(2) Where, however, the dispute involves recognition, observance or enforcement of any of the rights or obligations created
by the Industrial Disputes Act, the only remedy is to approach the forums created by the said Act.
(3) Similarly, where the dispute involves the recognition, observance or enforcement of rights and obligations created by
enactments like Industrial Employment (Standing Orders) Act 1946—which can be called ‘sister enactments’ to
Industrial DisputesAct—and which do not provide a forum for resolution of such disputes, the only remedy shall be to
approach the forums created by the Industrial Disputes Act provided they constitute industrial disputes within the
meaning of section 2(k) and section 2A of Industrial Disputes Act or where such enactment says that such dispute shall
be either treated as an industrial dispute or says that it shall be adjudicated by any of the forums created by the Industrial
Disputes Act. Otherwise, recourse to civil court is open.
(4) It is not correct to say that the remedies provided by the Industrial Disputes Act are not equally effective for the reason
that access to the forum depends upon a reference being made by the appropriate government. The power to make a
reference conferred upon the government is to be exercised to effectuate the object of the enactment and hence not
unguided. The rule is to make a reference unless, of course, the dispute raised is a totally frivolous one ex facie. The
power conferred is the power to refer and not the power to decide, though it may be that the government is entitled to
examine whether the dispute is ex facie frivolous, not meriting an adjudication.
(5) Consistent with policy of law aforesaid, we commend to the Parliament and the state legislatures to make a provision
enabling a workman to approach the labour court/industrial tribunal directly ie, without the requirement of a reference
by the government in case of industrial disputes covered by section 2A, Industrial Disputes Act. This would go a long
way in removing the misgivings with respect to the effectiveness of the remedies provided by the Industrial Disputes
Act.
(6) The certified Standing Orders framed under and in accordance with the Industrial Employment (Standing Orders) Act
1946 are statutorily imposed conditions of service and are binding both upon the employers and employees, though they
do not amount to ‘Statutory Provisions’. Any violation of these Standing Orders entitles an employee to appropriate
relief either before the forums created by the Industrial Disputes Act or the civil court where recourse to civil court is
open according to the principles indicated herein.
(7) The policy of law emerging from Industrial Disputes Act and its sister enactments is to provide an alternative dispute
resolution mechanism to the workmen, a mechanism which is speedy, inexpensive, informal and unencumbered by the
plethora of procedural laws and appeals upon appeals and revisions applicable to civil courts. Indeed, the powers of the
courts and tribunals under the Industrial Disputes Act are far more extensive in the sense that they can grant such relief
as they think appropriate in the circumstances for putting an end to an industrial dispute.4

The principles enunciated by Jeevan Reddy J in the Rajasthan SRTC and, in particular, principle (6), suffer from a host of
inconsistencies. In the first place, what is meant by the observation: otherwise, recourse to civil court is open’ as
enunciated in (3) above? Is there a single right or obligation created by the Industrial Employment (Standing Orders) Act
1946, in respect of which, civil courts can exercise jurisdiction either concurrently with, or to the exclusion of, labour
courts and industrial tribunals created by the ID Act? This way principle (3) breaks open a narrow channel for numerous
litigations. A look at entry 1 of Sch II to the ID Act, ie, ‘the propriety or legality of an order passed by an employer under
the Standing Orders’ reveals the fact that every action taken under Model Standing Orders or Certified Standing Orders
falls within the jurisdiction of labour courts and industrial tribunals. Again, entry 6 of Sch III and IV refers to ‘shift
working otherwise than in accordance with Standing Orders’, in respect of which an employer is required to give a notice
of change under s 9A of the Act, falls within the jurisdiction of industrial tribunals. Secondly, at a very general level, can
the Apex Court single out at least one aspect of standing orders, which is incapable of being comprehended by the
definition of ‘industrial dispute’ in s. 2(k) in respect of which, a special remedy has not been provided under IDA? The
expressions - employment, non-employment, terms of employment and conditions of labour - appearing in the definition
clause are so comprehensive and of such amplitude that they take into their fold every conceivable aspect of employment
relationship from cradle to grave. A glance at Schs II, III & IV reveals the fact that whether it is a right or obligation
created under IDA or its sister enactments like the IESOA, or even those created under several other pieces of labour
legislations such as PBA, FA, EPFA, PGA—has been brought within the jurisdiction of Labour Courts and Industrial
Tribunals. That being the legal position, where is the question of seeking alternative remedy in civil courts? And lastly, the
further observation made in principle (6) above, ie, ‘Any violation of these Standing Orders entitles an employee to
appropriate relief either before the fora created by the Industrial Disputes Act or the civil court where recourse to civil
court is open according to the principles indicated herein’ is even worse, as it is capable of throwing the lawyer and the

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litigant alike into total confusion, given the fact that taking recourse to a civil court is not the same thing as seeking the
special remedy provided under the ID Act. Once the civil court is allowed to entertain a suit, the rigidity of Code of Civil
Procedure enters into the litigation process. A collateral consequence of such an interpretation is that the proceeding
acquires the character of civil adjudication, with the further implication that the civil court reaches the limit of its power
the moment it enforces the contract made by the parties, and cannot travel one inch beyond. On the contrary, the very
concept of industrial adjudication rests on the proposition that the adjudicator can extend an existing agreement or make a
new one or create new obligations or modify the old ones. Viewed in this perspective, where does the jurisdiction of civil
courts stand? RSRTC made the legal position murkier, quite contrary to its ostensible purpose of clarifying and explaining
the ratio of Premier Automobiles. This decision is replete with equivocal and inconsistent observations made by the
learned judge, which reflect more his confusion than clarity as to the relative turf of ID Act and civil courts, more so, in the
face of an authoritative decision in Premier Automobiles. What was the provocation for the learned judge to indulge in a
creative exercise of this kind in a vital matter which was so conclusively decided and was in force for two decades!? If a
judge of any court at any level is faced with the dilemma of choosing between Premier Automobiles and RSRTC, he should
invariably choose the former and reject the latter without a second look as being perverse and misconceived.5 In Apollo
Tyres, a workman filed a civil suit seeking several reliefs including (i) a declaration that he was a workman, (ii) that his
transfer to West Bengal was illegal; (iii) restraining the management from compelling him to accept the promotion; (iv)
restraining the management from interfering with his legitimate right to perform his duties as a general secretary of the
trade union; and (v) granting the cost of suit. The trial court allowed the objection on jurisdiction of the civil court filed by
the management and dismissed the suit filed by the workman. The appellate authority reversed the decree of the trial court
and ruled that it had jurisdiction to try the suit. In the Civil Miscellaneous Appeal by the company, the High Court
confirmed the order of the first appellate authority. Setting aside the orders passed by the High Court and the first appellate
authority, a Bench comprising Katju and Dattu JJ held:

On the facts of the case, we are clearly of the view that the suit filed by the plaintiff was barred by section 14(b) of the Specific
Relief Act, 1963 which states that a contract of personal service cannot be enforced in a civil suit. In our opinion, if the plaintiff
had any grievance and if he is a workman as defined in the Industrial Disputes Act, 1947, he should have raised an industrial
dispute and sought relief under the Industrial Disputes Act, 1947 before the Labour Court or Industrial Tribunal. There are many
powers which the Labour Court of Industrial Tribunal enjoy which the Civil Court does not enjoy eg the power to enforce contracts
of personal service, to create contracts, to change contracts etc. These things can only be done by the Labour Court or Industrial
Tribunal but cannot be done by a civil Court. A contract for personal service includes all matters relating to the service of the
employee eg confirmation, suspension, transfer, termination etc. (para 12)…In our opinion, the reliefs claimed by the plaintiff were
clearly seeking enforcement of a contract of personal service and the civil Court has no jurisdiction to grant such reliefs as held by
this Court in the case of Pearlite Lioners (P) Ltd v Manorama Sirsi .6 The High Court and the first appellate Court were clearly in
error in holding that the civil Court had jurisdiction in the matter and the trial Court was right in holding that the civil Court had no
jurisdiction and rightly dismissed the suit filed by the plaintiff. (para 13) ... Accordingly, this appeal is allowed, the impugned
judgment of the High Court and the first appellate Court are set aside and that of the trial Court is restored.7 (para 14)

It goes to the credit of the learned judges, Markandey Katju and HL Dattu JJ that they placed the legal position relating to a
right / duty / obligation created under the industrial law and the remedy provided thereunder in the correct perspective.
This decision exposes the half-tones that surfaced in Rajasthan SRTC, which has been analysed at some length in the
preceding paragraph. There is practically no right relating to a ‘workman’ employed in an ‘industry’, which is not capable
of being grasped by the definition of ‘industrial dispute’ in s 2(k) of the ID Act. The said definition is so exhaustive and
inclusive that it indeed is impossible to envisage a right created even by common law in respect of an industrial workman,
for the enforcement of which the Industrial Disputes Act is silent thereby driving a workman to seek remedy in a civil
court. It is once again submitted that Apollo Tyres was rightly decided in contradistinction to Rajasthan STRC, which was
decided in a casual and callous manner.

In Nizam Sugars, the delinquent employee filed a suit for declaration that the domestic inquiry conducted by the employer
was void and, for permanent injunctionrestraining the employer from proceeding thereafter. The employer sought time for
filing the counter and in the meanwhile terminated the services of the delinquent. In this fact situation, a single judge of the
Andhra Pradesh High Court held that the suit was not maintainable in law because the employee sought to enforce his right
created under the Industrial Disputes Act and his remedy was only under that Act.8 The civil court, prima facie, has no
jurisdiction to decide the validity or otherwise of the order of termination and while deciding the issue whether the plaintiff
has a prima facie case or not, the trial court could also consider whether it lacks or not, the inherent jurisdiction to try the
suit. The dismissal of the employee during the pendency of the suit affect the jurisdiction of the civil court to try the suit
covered by s 2A of the Act which provides a forum for settlement of individual dispute covered by s 2A particularly when
the court should be satisfied that a strong prima facie case has been made out by the plaintiff, including the question of
maintainability of the suit. The dismissal of a suit by the civil court on the ground that it had no jurisdiction as the matter

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was in the realm of industrial adjudication, will not bar adjudication by an adjudicatory authority under the Industrial
Disputes Act.9 Likewise, a dispute relating to transfer of employees on the mala fide ground of victimisation and
punishment would constitute an industrial dispute, therefore, a civil suit challenging such transfer is not maintainable.10 In
Road Transport Undertakings, the facts were: a few workers indulged in violent demonstration and the employer filed a
suit for the issue of a perpetual injunction which was contested by the workman on the ground that the civil court had no
jurisdiction to entertain and decide the suit for grant of an injunction because the alleged acts of the Workers amounted to
unfair ‘labour practice’ within the meaning of s 2(ra) of the Act, and that, therefore, it was only an industrial tribunal which
was entitled to take cognizance of such matters. It was further contended that the civil court was debarred from taking
cognizance in respect of unfair ‘labour practice’ ever though it is an offence since s 34 of the Act bars cognizance by the
court. A single judge of the Delhi High Court held that s 34 was in respect of taking cognizance by the criminal court and
did not debar a civil court from taking cognizance of a matter of civil nature.11 In Chandrakant Nikam, Pattanaik J,
speaking for another three-judge Bench, observed:

It may be borne in mind that the Industrial Disputes Act was enacted by the Parliament to provide speedy, inexpensive and
effective forum for resolution of disputes arising between workmen and the employers, the underlying idea being to ensure that the
workmen do not get caught in the labyrinth of civil courts which the workmen can ill-afford, as has been stated by this Court in
Rajasthan State Road Transport Corporation case (supra). It cannot be disputed that the procedure followed by civil courts is too
lengthy and consequently, is not an efficacious forum for resolving industrial disputes speedily. The power of industrial courts also
is wide and such fora are empowered togrant adequate relief as they think just and appropriate. It is in the interest of the workmen
that their disputes, including the dispute of illegal termination, are adjudicated upon by an industrial forum...In the aforesaid
premises and having regard to the relief sought for in the suits filed in the civil court, we have no manner of hesitation to come to
the conclusion that in such cases the jurisdiction of the civil court must be held to have been impliedly barred and the appropriate
forum for resolution of such dispute is the forum constituted under the Industrial Disputes Act...12

While holding that the jurisdiction of civil courts stood barred by implication, Pattanaik J did not dilate upon the other part
of the decision rendered in Rajasthan SRTC to the effect that the jurisdiction of civil courts was not barred in respect of
rights and obligations created under the Industrial Employment (Standing Orders) Act 1946. There is an urgent need to
review and restate the legal position by expressly barring the jurisdiction of civil courts as laid down in Premier
Automobiles. In Golden Hills Estates, a single judge of the Madras High Court held that a civil suit for declaration that
termination of the services of a workman was null and void and that he continued in service was not maintainable.13 In a
case where the civil court recorded a finding that it has jurisdiction to try a case of dismissal of a workman, on the ground
that the right of the workman did not arise solely under the industrial law but also under the general law, a single Judge of
Karnataka High Court held that, leaving the correctness of the said finding aside, once the workman had elected to seek
remedy by filing a civil suit and lost the case in the civil court, he was bound by the finding that the domestic enquiry held
as well as the dismissal were valid, he would not thereafter be permitted to agitate the same issue by raising an industrial
dispute under the ID Act. The fact that a competent court, on his election of the remedy, decided the issue operates as res
judicata, and the labour court cannot retry the same issue.14 A dismissed workman of Punjab Roadways, who, having filed
a civil suit and lost, raised an industrial dispute, the Punjab and Haryana High Court held that he was debarred from
agitating the dispute after he had failed in civil court on the principle of res judicata.15 The NCL-II categorically
recommended that the jurisdiction of civil courts should be expressly ousted in respect of all matters for which provision is
contained in the relevant labour laws.16 In BS Bharti, the facts briefly were: The respondent-workman was engaged as a
fitter on a daily basis from 1971 to April 1973, whereafter he was treated as a probationer for an initial period of six
months at the end of which, his probation was extended by another three months. On his services not being found
satisfactory, his probation was terminated on 24 January 1974. The government refused to refer the dispute for
adjudication. The appellant thereafter filed a suit in the civil court, which decreed the suit of the appellant. Aggrieved by
the decree, the company filed a regular first appeal before the High Court, which following the judgment in RSRTC,
allowed the appeal and set aside the judgment passed by the trial court. Upholding the order of High Court, Hegde J (for
self, Sinha and Mathur JJ) observed:

In cases where the application for reference under the provisions of the Industrial Disputes Act has been rejected by the appropriate
authority, the aggrieved party should pursue the same by way of a writ petition and if possible get the dispute referred under the
Industrial Disputes Act. If he fails to do so even after such attempt or fails to make such an attempt, the directions issued in para 37
of the above judgment in the case of Rajasthan State Road Transport Corporation (supra) does not apply…. In the said view of the
matter, we find no reason to interfere with the judgment of the High Court.17

In Kehar Singh, HK Sema J (for self and AR Lakshmanan J) dealt with the question of the jurisdiction of civil courts. The
following observations are self-explanatory:

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In view of the order that we propose to pass, it may not be necessary to recite all facts leading to the filing of the present appeal.
The respondent herein was working as Conductor in the Haryana Roadways, Sirsa Depot. He was dismissed from service. ...
Aggrieved by the order of dismissal, he preferred an appeal before the Additional Transport Commissioner which was dismissed
on 29-6-1995. Aggrieved thereby, the respondent filed civil suit ... seeking a decree of declaration ... The trial Court framed as
many as 7 issues. One of the important issue framed was issue No. 6, whether the Civil Court has got jurisdiction to try the present
suit. We are dismay (sic) to note that no finding has been recorded on this issue by the Trial Court. The Trial Court, however,
proceeded to examine the case on merits, without determining the jurisdiction of the court. It is now well established principle of
law that a decree without the jurisdiction is a nullity. Unfortunately, all the Courts below including the High Court has failed to
notice this important question of law. (para 4) ... We repeatedly made query from the learned counsel for the respondent as to
whether the finding has been recorded by the Trial Court regarding the jurisdiction of the Civil Court. We received no answer.
(para 5) ... In a recent judgment of this Court in the case of Rajasthan State Road Transport Corpn v Zakir Hussain 18 in which my
brother Dr Justice AR Lakshmanan was party, this Court after considering the various Judgments including the judgment referred
above, has come to the conclusion that the Civil Court has no jurisdiction to entertain such suit. (para 9) ... In the view that this
Court has been taking consistently, the Civil Court has no jurisdiction to entertain such suit and any decree passed by the Civil
Court without jurisdiction, is a nullity. The High Court has failed to notice the position of law enunciated by this Court in catena of
decisions.19 (refer para 10)

Once the original decree itself has been held to be without jurisdiction and hit by the doctrine of coram non judice, there
would be no question of upholding the same merely on the ground that the objection to the jurisdiction was not taken at the
initial, first Appellate or second Appellate stage. It must, therefore, be held that the civil court in this case had no
jurisdiction to deal with the suit and resultantly the judgments of the Trial Court, First Appellate Court and the Second
Appellate Court are liable to be set aside for that reason alone and the appeal is liable to be allowed. In view of this verdict
of ours, we have deliberately not chosen to go into the other contentions raised on merits.20 In a case involving a
conductor, the civil court entertained the suit and decreed it, despite the employer raising an objection to the effect that the
civil court had no jurisdiction. The appellate court too proceeded blindfold and dismissed the appeal filed by the
management. What is worse, the High Court of Rajasthan, in second appeal, treaded the same path as the District Judge
and dismissed the appeal. Is it possible that the learned judges at all the three levels of Trial Court, District Court and
High Court were operating from a position of abject ignorance of the rudimentary legal principles? Assuming that they
are, as reflected in their decisions, should they not apply their mind to the averments of the management in its objection
and come to a reasoned conclusion? If this is not a callous, indifferent and reckless manner of handling a case, on the part
of the judges at all the three levels, what else could it be? A bus conductor is very much a workman within the meaning of
s 2(s) of the ID Act. The Corporation itself is an ‘industry’ within the meaning of s 2(j). And finally, the dispute relating to
dismissal falls within the subject matter ‘non-employment’ within the meaning of ‘industrial dispute’ under s 2(k). Once
these three parameters are satisfied, the dispute becomes an industrial dispute, which can only be adjudicated in the remedy
and manner provided in the ID Act. Could it be said that the learned judges could not grasp these elementary aspects,
which even a student of labour law in a graduate school could very well grasp? Quashing the irresponsible decisions
handed down right from the Trial Court up to the High Court, Lodha J (for self and Raveendran J) observed:

The case of the respondent as set up in the plaint, therefore, is that in the absence of departmental enquiry as contemplated in
Standing Orders, the order of dismissal is bad in law. It is true that respondent pleaded that he has been dismissed from service
without affording any opportunity of defence and hearing and in breach of principles of natural justice but the said ... plea has to be
understood in the backdrop of his pleading that the dismissal order has been passed contrary to Standing Orders without holding
any departmental enquiry. The legal position that Standing Orders have no statutory force and are not in the nature of
delegated/subordinate legislation is clearly stated by this Court in Krishna Kant.21 In that case (Krishna Kant), this Court while
summarizing the legal principles in paragraph 35(6) stated that the certified Standing Orders framed under and in accordance with
the Industrial Employment (Standing Orders) Act, 1946 are statutorily imposed conditions of service and are binding both upon the
employers and employees, though they do not amount to ‘statutory provisions’ and any violation of these Standing Orders entitles
an employee to appropriate relief either before the forum created by the Industrial Disputes Act or the civil court where recourse to
civil court is open according to the principles indicated therein. In Bal Mukund Bairwa (2) (2009 AIR SCW 2566), in para 37 of
the report, the position has been explained that if the infringement of the Standing Orders is alleged, the civil court’s jurisdiction
may be held to be barred but if the suit is based on the violation of principles of common law or constitutional provisions or on
other grounds, the civil court’s jurisdiction may not be held to be barred. In our opinion, nature of right sought to be enforced is
decisive in determining whether the jurisdiction of civil court is excluded or not. In the instant case, the respondent who hardly
served for three months, has asserted his right that the departmental enquiry as contemplated under the Standing Orders, ought to
have been held before issuing the order of dismissal and in absence thereof such order was liable to be quashed. Such right, if
available, could have been enforced by the respondent only by raising an industrial dispute and not in the civil suit. In the

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circumstances, it has to be held that civil court had no jurisdiction to entertain and try the suit filed by the respondent.22

The above case was rightly decided, but the reliance placed by the learned judge on Krishna Kant, with all the horrors that
beset the reasoning process therein, is certainly misconceived for the reason that the said decision is a poor representative
of sound judicial thought on the question of ‘implied ouster’ of the jurisdiction of civil courts in the realm of industrial
disputes.

SUB-SECTION (1)(A): DISPUTES INVOLVING QUESTIONS OF NATIONAL IMPORTANCE OR DISPUTES

RELATING TO ESTABLISHMENTS SITUATED IN MORE THAN ONE STATE

Sub-section (1A) empowers the Central Government to refer an ‘industrial dispute’ or any matter appearing to be
connected with or relevant to that dispute in the second or Third Schedule to a national tribunal for adjudication
irrespective of the fact whether or not it is the ‘appropriate government’ in relation to that dispute. Under this sub-section,
the Central Government is to form its opinion merely on the question as to whether an industrial dispute exists or is
apprehended. However, before the Central Government can make a reference under this sub-section, it must have formed
its opinion that:

(1) there is a dispute which satisfies the requirement of an industrial dispute as defined in section 2(k).

(i) such industrial dispute exists or is at least apprehended at the time of making the reference;

(ii) such dispute

(a) involves any question of national importance; or

(b) is of such a nature that industrial establishments situated in more than one state are likely to be interested in, or
affected by such dispute, and that
(2) the dispute should be adjudicated upon by a national tribunal.

The opinion of the Central Government that these conditions exist is a pre-condition to the making of a reference to the
national tribunal.23 If any of these conditions does not exist, the reference to the National Tribunal will not be justified.
Subject to these limitations and also the further requirement of acting bona fide, the discretion of the government in
making the order of reference is unreviewable. For making reference with respect to inter-state industrial establishments,
the discretion of the government has been made very wide. The legislature has used the words ‘industrial establishments
situated in more than one state are likely to be interested in or affected by, such dispute’. For exercise of power under this
sub-section, therefore it is not necessary that the inter-state establishments should be ‘affected’, but it is sufficient even if
they are ‘likely to be interested’ in the dispute proposed to be referred to the National Tribunal. The words ‘interested’ or
‘affected’ cannot be equated. There is a difference in the import of the words ‘interested’ and ‘affected’. For instance, the
union which sponsors the cause of an individual workman is ‘interested’ in the dispute but the workmen who are the
members of the union are not necessarily ‘affected’ by the dispute.24Section 10(6) divests a labour court or an industrial
tribunal of the jurisdiction to adjudicate upon any matter pending adjudication before it after the Central Government has
made a reference of that matter to the National Tribunal under this sub-section. The words ‘at any time’ used in sub-s (1A)
read with sub-s (6) indicate that a reference by the Central Government to National Tribunal can be made even after the
matter has been referred to a labour court or an industrial tribunal under s 10(1) by the ‘appropriate government’. It is now
well-settled that the appropriate government has no power to cancel or supersede a reference made by it under s 10(1) of
the Act. However, it is obvious that the reference made by the appropriate government under s 10(1) can be superseded by
a reference made by the Central Government in exercise of its power under sub-s (1A) to a national tribunal.

1 Subs by Act 18 of 1952, s 3, for “If any industrial dispute exists or is apprehended, the appropriate Government may” (wef 4-3-
1952).
2 Subs by Act 36 of 1956, s 7, for cl (c) (wef 10-3-1957).
3 Subs by Act 36 of 1956, s 7, for ‘Provided that’ (wef 10-3-1957).
4 Ins by Act 46 of 1982, s 8 (wef 21-8-1984).

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5 Ins by Act 36 of 1956, s 7 (wef 10-3-1957).

6 Subs by Act 36 of 1956, s 7, for ‘or tribunal’ (wef 10-3-1957).
7 Ins by Act 46 of 1982, s 8 (wef 21-8-1984).
8 Subs by Act 36 of 1956, s 7, for ‘or tribunal’ (wef 10-3-1957).
9 Ins by Act 18 of 1952, s 3 (wef 4-3-1952).
10 Subs by Act 36 of 1956, s 7, for ‘a tribunal’ (wef 10-3-1957).
11 Subs by Act 36 of 1956, s 7, for ‘the tribunal’ (wef 10-3- 1957).
12 Subs by Act 36 of 1956, s 7, for ‘tribunal’ (wef 10-3-1957).
13 Sub-sections (6) and (7) ins by Act 36 of 1956, s 7 (wef 10-3-1957).
14 Explanation ins by Act 36 of 1964, s 5 (wef 19-12-1964).
15 Ins by Act 46 of 1982, s 8 (wef 21-8-1984).
16 TD Ramayya Pantulu, IT v Kutty & Rao (E) Ltd (1949) 1 LLJ 13 (Mad) (DB), per Horwill J.
17 United Commercial Bank Ltd v UPBE Union (1952) 2 LLJ 577 [LNIND 1952 SC 47] (SC), per Chandrasekhara Iyer J.
18 State of Madras v CP Sarathy (1953) 1 LLJ 174 [LNIND 1952 SC 84] (SC) : AIR 1953 SC 53 [LNIND 1952 SC 84]: [1953] 4
SCR 334 [LNIND 1952 SC 84], per Patanjali Sastri CJI.
19 Newspapers Ltd v IT (1957) 2 LLJ 1 [LNIND 1957 SC 28], 8 (SC), per Kapur J.
20 Western India Match Co v WIMCO Workers’ Union (1970) 2 LLJ 256 [LNIND 1970 SC 4], 262 (SC) : (1970) 1 SCC 225 [LNIND
1970 SC 4] : AIR 1970 SC 1205 [LNIND 1970 SC 4], per Shelat J.
21 Rohtas Industries Ltd v SD Agarwal AIR 1969 SC 707 [LNIND 1968 SC 428], 715 : (1969) 1 SCC 325 [LNIND 1968 SC 428] :
[1969] 39 Comp Cas 781 (SC), per Hegde J.
22 Shambhu Nath Goyal v Bank of Baroda (1978) 1 LLJ 484 [LNIND 1978 SC 35] (SC) : AIR 1978 SC 1088 [LNIND 1978 SC 35]:
(1978) 2 SCC 353 [LNIND 1978 SC 35] : 1978 Lab IC 961 [LNIND 1978 SC 35], per Desai J.
23 A Sundarambal v Government of Goa, Daman and Diu (1989) 1 LLJ 61 [LNIND 1988 SC 341], 65 (SC), per Venkataramiah J.
24 Ram Avtar Sharma v State of Haryana (1985) 2 LLJ 187 [LNIND 1985 SC 122] (SC), per Desai J.
25 Avon Services (Production Agencies) Pvt Ltd v IT (1979) 1 LLJ 1 [LNIND 1978 SC 284], 4 (SC), per Desai J.
26 General Insurance Emp Assn v PO, IT (2002) 1 LLN 1040 (Mad), per Sathasivam J.
27 Beetham v Trinidad Cement Ltd [1960] 1 All ER 274, 280 PC, per Lord Denning.
28 Rex v Nat Bell Liquors Ltd [1922] 2 AC 128, 159, per Lord Summer.
29 Shambhu Nath Goyal v Bank of Baroda, Jullundur (1978) 1 LLJ 484 [LNIND 1978 SC 35], 486 (SC) : AIR 1978 SC 1088
[LNIND 1978 SC 35]: (1978) 2 SCC 353 [LNIND 1978 SC 35] : 1978 Lab IC 961 [LNIND 1978 SC 35], per Desai J.
30 Kirloskar Electric Co Ltd v Workmen (1974) 2 LLJ 537, 541 (Kant), per Venkararamiah J.
31 India Tourism Dev Corpn, v Delhi Administration 1982 Lab IC 1309, 1328 (Del) (FB), per Chadha J.
32 Western India Match Co v Western India Match Co Workers’ Union (1970) 2 LLJ 256 [LNIND 1970 SC 4] (SC), per Shelat J.
33 Cf, Barium Chemicals Ltd v Co Law Board AIR 1967 SC 295 [LNIND 1966 SC 132],309, per Mudholkar J.
34 Cf, Rohtas Industries Ltd v SD Agarwal AIR 1969 SC 707 [LNIND 1968 SC 428],720-21 : (1969) 1 SCC 325 [LNIND 1968 SC
428] : [1969] 39 Comp Cas 781 (SC), per Bachawat J.
35 Rass-Clunis v Papadopoullons [1958] 1 WLR 546.
36 Cf, RC Cooper v Union of India AIR 1970 SC 564, 644, per Shah J.
37 Sindhu Resettlement Corpn Ltd v IT (1968) 1 LLJ 834 [LNIND 1967 SC 268], 839 (SC) : AIR 1968 SC 529 [LNIND 1967 SC
267]: [1968] 1 SCR 515 [LNIND 1967 SC 267], per Bhargava J.
38 Shambu Nath Goyal v Bank of Baroda, Jullundur (1978) 1 LLJ 484 [LNIND 1978 SC 35] (SC), per Desai J.
39 Bombay Union of Journalists v Hindu (1961) 2 LLJ 436 [LNIND 1961 SC 316], 439 (SC), per Shah J.
40 Agfa Gevaert India Ltd v Second IT, West Bengal 1983 Lab IC NOC 108 (Cal), per Barooah J.
41 Pradip Lamp Works v Workmen (1970) 1 LLJ 507 [LNIND 1969 SC 299] (SC) : 1969 (19) FLR 385 : 1969 (2) UJ 588 [LNIND
1969 SC 299], per Shelat J.

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42 Mgmt of Monghyr Factory of ITC Ltd v LC 1978 Lab IC 1256 [LNIND 1978 SC 170], 1259-60 (SC), per Untwalia J.
43 Sunit Kumar Roy v Union of India 1977 Lab IC 794, 798 (Pat) (DB), per Choudhuri J.
44 Western India Match Co v Workers’ Union (1970) 2 LLJ 256 [LNIND 1970 SC 4], 262 (SC), per Shelat J.
45 Jaipur Polyspin Ltd v State of Rajasthan (1994) 2 LLJ 917, 928 (Raj), per GS Singhvi J.
46 (1966) 1 LLJ 356, 360 (MP) (DB), per Dixit J.
47 Maheshwar Rao v State of Orissa (1974) 2 LLJ 127, 129 (Ori) (DB), per RN Misra J.
48 Swadeshi Cotton Mills Co Ltd v IT (1961) 2 LLJ 419 [LNIND 1961 SC 121], 424 (SC) : AIR 1961 SC 1381 [LNIND 1961 SC
121]: [1962] 1 SCR 422 [LNIND 1961 SC 121], per Wanchoo J.
49 JK Cotton Manufacturers v JN Tiwari AIR 1959 All 639, per VJ Oak J.
50 Rohtas Industries Ltd v State of Bihar 1977 Lab IC (NOC) 102 (Pat) (DB).
51 Pride Machinery Works v State of Punjab 1971 Lab IC 940 -41 (P&H), per Tuli J.
52 Dunlop (India) Ltd v Delhi Administration 1973 Lab IC 640, 645 (Del) (DB), per Hardy J.
53 United Provinces Electric Supply Co Ltd v IT 1974 Lab IC 902, 905 (Cal), per AK Mookerjee J.
54 Mahabir Jute Mills Ltd v Shibban Lal Saxena (1975) 2 LLJ 326 [LNIND 1975 SC 239], 330 (SC), per Murtaza Fazal Ali J.
55 Allahabad Bank v CGIT-cum-LC 1998 (3) LLN 105 (All), per Mahajan J.
56 Secretary, Indian Tea Association v AK Barat (2000) 2 LLN 25 [LNIND 2000 SC 1947], 28 (SC).
57 Lakhtaria P Narsinhbhai v Union of India (2003) 4 LLJ 848 (Guj), per KM Mehta J.
58 Bombay Union of Journalists v State of Bombay AIR 1964 SC 1617 [LNIND 1963 SC 305]: 1964 (8) FLR 236 : (1964) I LLJ
351SC : [1964] 6 SC R22, per Gajendragadkar J.
59 Technological Institute of Textiles v Workmen (1965) II LLJ 149(SC), per Ramaswamy J.
60 Employers of Thungabhadra Ind Ltd v Workmen (1973) II LLJ 283 (SC) : AIR 1973 SC 2272 [LNIND 1973 SC 196]: 1973 Lab IC
1227 [LNIND 1973 SC 196] : (1974) 3 SCC 167 [LNIND 1973 SC 196], per Vaidialingam J.
61 Workmen of Cochin Chamber of Commerce v Kerala (1976) II LLJ 108(Ker), per Subramonian Potty J.
62 Bombay Union of Journalists v State of Bombay (1964) I LLJ 351 (358) (SC) : AIR 1964 SC 1617 [LNIND 1963 SC 305]: [1964]
6 SCR 22 [LNIND 1963 SC 305], per Gajendragadkar J.
63 Shambhu Nath Goyal v Bank of Baroda (1978) I LLJ 484 (SC) : AIR 1978 SC 1088 [LNIND 1978 SC 35]: (1978) 2 SCC 353
[LNIND 1978 SC 35], per Desai J.
64 Western India Match Co v Workmen (1970) II LLJ 256 (SC) : AIR 1970 SC 1205 [LNIND 1970 SC 4]: (1970) 1 SCC 225
[LNIND 1970 SC 4], per Shelat J.
65 Union Bank of India Employees Union v Union of India, (2003) 1 LLJ 171 [LNIND 2002 BOM 759] (Bom) : 2003 (1) Bom CR
800 [LNIND 2002 BOM 759] : 2003 (96) FLR 806, per Kochar J.
66 Gaya Prasad v Union of India (2003) 4 LLJ 60 (MP), per Kulsreshtha J.
67 All India and GM Union v Govt of NCT of Delhi (2003) 4 LLJ 685 [LNIND 2003 DEL 648] (Del), per Mukul Mudgal J.
68 Rathinaswamy C v State Bank of India (2007) 3 LLJ 380 (Mad).
69 Amts Karmachari Sangh v DCL (2013) 4 LLJ 157 (Guj) : 2013 Lab IC 4142 : 2014 (141) FLR 452, per Upadhyay J.
70 Sarva Shramik Sangh v Indian Oil Corporation AIR 2009 SC 2355 [LNIND 2009 SC 823]: (2009) III LLJ 237SC : (2009) 11 SCC
609 [LNIND 2009 SC 823], per Raveendran, J.
71 State of Maharashtra v Kamani Employees’ Union 1975 Lab IC 387 [LNIND 1973 SC 171], 389 (SC), per Vaidialingam J.
72 State of Bihar v DN Ganguli (1958) 2 LLJ 634 [LNIND 1958 SC 92] (SC) : AIR 1958 SC 1018 [LNIND 1958 SC 92]: [1959] 1
SCR 1191 [LNIND 1958 SC 92], per Gajendragadkar J.
73 Karnal-Kaithal Coop Transport Society v State of Punjab (1959) 1 LLJ 274 (Punj) (DB), per Bhandari CJ.
74 State of Bihar v DN Ganguli (1958) 2 LLJ 634 [LNIND 1958 SC 92] (SC), per Gajendragadkar J.
75 Minerva Mills Ltd v Workers (1954) 1 LLJ 119 [LNIND 1953 SC 82] (SC), per Mahajan J.
76 Shellac Industries Ltd v Workmen (1967) 1 LLJ 492, 495 (Cal) (DB), per Datta J.
77 1992 Lab IC 1090, 1093 (Bom) (Nagpur Bench) per M Desai J.
78 Indian Rayon Industries Ltd v State of Gujarat (2003) 4 LLJ 1034 (Guj), per Rathod J.

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79 South India LR Organisation v State of Madras (1954) 1 LLJ 8 (Mad) (DB), per Venkatarama Ayyar J.
80 NN Chakravarty v State of Assam AIR 1960 Assam 11 (DB), per Sinha CJ.
81 Kesoram Cotton Mills v Second LC (1963) 1 LLJ 169 [LNIND 1962 CAL 131] (Cal), per BN Banerjee J.
82 Brindra Kumar Chaterjee v Reliance Jute Mills Co Ltd (1958) 2 LLJ 67 (Cal) (DB), per Lahiri J.
83 Manager, RD Press v Rajasthan SPK Sangh 1977 Lab IC 1061, 1064 (Raj), per DP Gupta J.
84 SK Burman, Dabur Pvt Ltd v Workmen (1967) 2 LLJ 863 [LNIND 1967 SC 214]-65 (SC), per Bhargava J.
85 Bombay Gumasta Union v MR Bhope 1995 Lab IC 2258 (Bom), per AP Shah J.
86 District Motor Workers’ Union v State of Haryana (1970) 1 LLJ 607 (P&H), per Balraj Tuli J.
87 Krishnan K v HMT Ltd (2000) 1 LLJ 498 (Ker), per Venkatachala Moorthy J.
88 Schoot Glass India Pvt Ltd v Asst Commissioner of Labour (2000) 2 LLJ 1498 (Guj), per Rathod J.
89 Modern Foundry & Machine Works Ltd v State of Maharashtra (1999) 1 LLJ 1137 (Bom), per Marlapalle J.
90 Bharat Textile Mills v Punjab State 1980 Lab IC 1316 (P&H) (DB), per GC Mittal J.
91 Western India Match Co Ltd v WIMCO Workers’ Union (1970) 2 LLJ 256 [LNIND 1970 SC 4]-58 (SC), : AIR 1970 SC 1205
[LNIND 1970 SC 4]: (1970) 1 SCC 225 [LNIND 1970 SC 4] per Shelat J.
92 Raju’s Cafe v IT (1951) 1 LLJ 219 [LNIND 1950 MAD 225] (Mad) (DB), per Rajamannar CJ.
93 Ramakrishna Mills Ltd v Govt. of Tamil Nadu (1984) 2 LLJ 259 [LNIND 1984 MAD 23], 266 (Mad) (DB), per Nainar Sundaram J.
94 Kanti Cotton Mills Ltd v State of Saurashtra AIR 1953 Sau 46 (DB), per Shah CJ.
95 Bombay Union of Journalists v State of Bombay (1964) 1 LLJ 351 [LNIND 1963 SC 305], 354 (SC), per Gajendragadkar J.
1 Niemla Textile Finishing Mills Ltd v Second Punjab Tribunal (1957) 1 LLJ 460 [LNIND 1957 SC 1] (SC), per Bhagwati J.
2 Mgmt of Ambala Cantt Electric Supply Corpn Ltd v Workmen 1971 Lab IC 854, 859-60 (P&H), per Tuli J.
3 Karamchand Thapar & Bros Ltd v Clerical Employees 4 FJR 365, 369 (LAT).
4 ITC Ltd v Govt of Karnataka (1985) 1 LLJ 227 (Kant) : 1984 (2) Kar LJ 252, per Rama Jois J.
5 Navalbhai K Chanhan v Shri Digvijay Woollen Mills Ltd (1988) 2 LLJ 101, 108 (Guj) (DB) : 1987 GLH (2) 197 : (1987) 2 GLR
1091 per Majmudar J.
6 G Muthitkrishnan v New Horizon Sugar Mills Pvt Ltd (1980) 1 LLJ 215 [LNIND 1979 MAD 225] (Mad) (FB), per Ramprasada
Rao CJ.
7 Mahabir Jute Mills v Shibban Lal Saxena (1975) 2 LLJ 326 [LNIND 1975 SC 239] (5C), per Murtaza Fazal Ali J.
8 Binny Ltd v Workmen (1972) 1 LLJ 478 [LNIND 1972 SC 117], 484 (5C) : (1972) 3 SCC 806 [LNIND 1972 SC 117] : AIR 1972
SC 1975 [LNIND 1972 SC 117], per Mitter J.
9 Avon Services (Production Agencies) Pvt Ltd v IT (1979) 1 LLJ 1 [LNIND 1978 SC 284] (5) (SC) : AIR 1979 SC 170 [LNIND
1978 SC 284]: (1979) 1 SCC 1 [LNIND 1978 SC 284], per Desai J.
10 R v Nat Bell Liquors Ltd [1922] 2 AC 128, 159, per Lord Summer.
11 HWR Wade, Administrative Law, 1971, 3rd ed.
12 Srikrishna Jute Mills v Government of AP 1977 Lab IC 988 (AP) (DB), per Divan CJ.
13 Shanti Theatres Pvt Ltd, Madras v State of TN [1979] 55 FJR 389, 412, per Padmanabhan J.
14 Mahabir Jute Mills Ltd v Shibban Lal Saxena (1975) 2 LLJ 326 [LNIND 1975 SC 239] (335-6) (SC) : AIR 1975 SC 2057 [LNIND
1975 SC 239]: (1975) 2 SCC 818 [LNIND 1975 SC 239], per Murtaza Fazal Ali J.
15 Sultan Singh v State of Haryana (1996) 1 LLJ 879 [LNIND 1995 SC 1290] (SC).
16 Food Corporation of India v CGIT 1996 Lab IC 2287, 2291 (Cal), per Bhattacharjee J.
17 AK Kraipak v Union of India AIR 1970 SC 150 [LNIND 1969 SC 197]: (1969) 2 SCC 262 [LNIND 1969 SC 197] : [1970] 1 SCR
457 [LNIND 1969 SC 197], per Hegde J.
18 Sindhu Resettlement Corporation Ltd. v. Industrial Tribunal of Gujarat. (1968) 1 LLJ 834 [LNIND 1967 SC 268] (SC) : AIR 1968
SC 529 [LNIND 1967 SC 267]: [1968] 1 SCR 515 [LNIND 1967 SC 267], per Bhargava J.
19 Central Bank of India v OP Singla (2003) 4 LLJ 796 [LNIND 2003 DEL 692] (Del .), per Mukul Mudgal J.
20 Lokmat Newspapers Ltd. v Commissioner of Labour (2003) 1 LLJ 767 [LNIND 2002 NGP 146] (Bom) : 2003 (97) FLR 36 : 2003
(1) Mh LJ 103 per DD Sinha J.

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21 Vithabhai Nana v Bombay Fine Worsted Manufacturers (1955) 1 LLJ 637 (LAT).
22 Inder Singh & Sons v Workmen (1961) 2 LLJ 89, 92 (SC), per Das Gupta J.
23 Jhagrakhand Collieries Pvt Ltd v CGIT (1960) 2 LLJ 71 [LNIND 1960 SC 41] (SC), per Gajendragadkar J.
24 Shalimar Works Ltd v Workmen (1959) 2 LLJ 26 [LNIND 1959 SC 108], 31 (SC) : AIR 1959 SC 1217 [LNIND 1959 SC 108]:
[1960] 1 SCR 150 [LNIND 1959 SC 108], per Wanchoo J.
25 Ithad Motor Transport Pvt Ltd v Bir Singh (1974) 2 LLJ 243, 249-53 (Del), per Prithvi Raj J.
26 R Ganeshan v Union of India 1993 Lab IC 802, 806 (Bom), per Ashok Agarwal J.
27 Inder Singh & Sons v Workmen (1961) 2 LLJ 89, 92 (SC), per Das Gupta J.
28 Western India Match Co v Workmen (1970) 2 LLJ 256 [LNIND 1970 SC 4], 261-65 (SC), per Shelat J.
29 BR Herman & Mohatta (I) Pvt Ltd v Seventh IT 1977 Lab IC (NOC) 13 (Cal) (DB).
30 Ajaib Singh v SCMPS Society Ltd (1999) 2 LLN 674 (SC).
31 Workmen of KGID, Bangalore v Principal IT 1999 (3) LLN 219 (Kant), per Gopala Gowda J.
32 Mahavir Singh v UPSEB, (1999) 3 LLN 872 (SC).
33 Nedungadi Bank Ltd v KP Madhavan Kutty (2000) 2 LLN 21, 24-5 (SC).
34 Gurmail Singh v Principal, Govt College (2000) 1 LLJ 1080 (SC).
35 Mgmt of Indian Iron & Steel Co Ltd v Prahlad Singh (2000) 2 LLJ 1653 [LNIND 2000 SC 1424] (SC), per Patil J.
36 Balbir Singh v Punjab Roadways (2001) 2 LLN 118, 119 (SC).
37 Sapan Kumar Pandit v UPSEB (2001) 2 LLJ 788 [LNIND 2001 SC 1433], 792 (SC), per Thomas J.
38 EM Rao, Industrial Jurisprudence: A Critical Commentary, 2015, 2nd ed, pp 467-8.
39 Assistant Executive Engineer v Shivalinga (2002) 2 LLN 19 (SC).
40 Mangal Singh v PO, Le (2001) 4 LLN 1075 (Del), per Dr Sharma J.
41 LIC of India v JC Biswas (2000) 2 LLJ 1030 [LNIND 2000 SC 1079] (SC), per Patil J.
42 Digambar R Kalaskar v Bank of Maharashtra (2001) 1 LLN 699 (Bom), per Kochar J.
43 Surjit Singh v PO, IT (2001) 3 LLN 318 (P&H) (DB), per Sudhalkar J.
44 Ram Karan v PO, Le (2001) 4 LLN 638 (P&H) (DB), per Sudhalkar J.
45 North-West KRTC v Abdul Salam (2002) 1 LLN 986 (Kant) (DB), per Gururajan J.
46 EE, Construction Divn, v M Ganapathy (2001) 1 LLN 1006 (Mad), per Murugesan J.
47 Hoshiar Singh v PO, LC (2002) 1 LLN 427 (P&H), per Sudhalkar J.
48 Division Forest Officer v Raghuvar (2002) 1 LLN 1245 (Raj), per Keshote J.
49 Cheran Transport Corpn Ltd v PO, LC (2002) 2 LLN 418 (Mad), per Padrnanabhan J.
50 Gujarat SRTC v SP Bhoi (2002) 3 LLN 612 (Guj), per Nandi J.
51 Union of India (thro’ GM, Western RIY), v KR Singh (2002) 1 LLN 949 (Bom), per Mhatre J.
52 Union of India v PS Pansora (2002) 1 LLN 844 (Bom), per Kochar J.
53 Mgmt of IISCO Ltd v Prahlad Singh, AIR 2001 SC 69 [LNIND 2000 SC 1424]: (2001) 1 SCC 424 [LNIND 2000 SC 1424] :
(2000) I ILLJ 1653 SC : (2001) 1 MLJ 95 [LNIND 2000 SC 1424] (SC).
54 MD, TNPDC Ltd v G Jeelendran (2002) 3 LLN 1197 (Mad), per Jayasirnha Babu J.
55 P Srinivas v IT (2000) 2 LLN 1196 (AP).
56 Mgmt of Aska Coop Society Ltd v State of Orissa (2003) 2 LLJ 1143.
57 Kishori Lal v Opium and Alcoloid Factory (2003) 4 LLJ 788 (MP), per Sapre J.
58 Satyanarain Sharma v Union of India (2003) 4 LLJ 7 (Raj), per Ms Gyan Sudha Misra J.
59 Rajendra Singh Gehlot v Union of India (2003) 4 LLJ 977 (Raj), per Dr BS Chauhan J.
60 AIR 1959 SC 1217 [LNIND 1959 SC 108]: (1959) II LLJ 26SC : [1960] 1 SCR 150 [LNIND 1959 SC 108].
61 AIR 2000 SC 839 [LNIND 2000 SC 184] (2000) 2 SCC 455 [LNIND 2000 SC 184] : (2000) I LLJ 561SC.

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62 AIR 1993 SC 2276 [LNIND 1993 SC 461]: 1993 Lab IC 1672 : 1993 (2) SCALE 974.
63 AIR 1987 SC 2342 [LNIND 1987 SC 711]: (1988) 1 SCC 122 : (1988) I LLJ 370SC : 1988 Lab IC 37.
64 SM Nilajkar v Telecom District Manager, Karnataka AIR 2003 SC 3553 : (2003) 4 SCC 27 : (2003) I ILLJ 359SC, per Lahoti J.
65 Turi RD v Union of India (2006) 4 LLJ 140 (Guj), per SD Dave J.
66 Ludlow Jute and Specialities Ltd v State of West Bengal, (2012) 1 LLJ 567 (Cal .) : 2011 (130) FLR 719.
67 EM Rao, Industrial Jurisprudence: A Critical Commentary, 2015, 2nd ed, pp 470-1.
68 Asst Engineeer, CAD, Kota v Dhan Kunwar AIR 2006 SC 2670 [LNIND 2006 SC 474]: (2006) III LLJ 12SC : (2006) 5 SCC 481
[LNIND 2006 SC 474], per Pasayat J.
69 Karnataka SRTC v Ramesh Babu, (2015) 1 LLJ 149 (Kant) : 2014 (6) Kar LJ 49 : 2015 (145) FLR 10, per Abdul Nazeer J.
70 Mgmt of MCD v Prem Chand Gupta (2000) 1 LLN 358 (SC).
71 Anil Kumar Puri v PO, LC (2000) 4 LLN 605 (SC).
72 Lord Hewart, Not without Prejudice, 1937, p 228.
73 GM, Nanded CCCWRS Ltd v Shankar (2002) 1 LLN 172 (Bom), per Khandeparkar J.
74 India Paper Pulp Co Ltd v India Pulp Workers’ Union (1949) 1 LLJ 258 (FC), per Kania CJI.
75 Birla Cotton Spg & Weaving Mills Ltd v Addl IT 16 FJR 152 (Punj), per Mehar Singh J.
76 Krishna Bus Service Pvt Ltd, Delhi v Delhi Administration 1985 Lab IC 1520, 1522 (Del), per Bhandare J.
77 Express Newspapers Ltd v Workers (1962) 2 LLJ 227, 234 (SC), per Gajendergadkar J.
78 Workmen Mysore Paper Mills Ltd v Mgmt., Mysore Paper Mills Ltd 1970 Lab IC 1113, 1116 (Mys) (DB).
79 Mgmt of Mahadev Textile Mills v Addl IT 1976 Lab IC 1284, 1288 (Kant), per Shetty J.
80 Eagle Fashions v Government of NCT of Delhi, 1998 (1) LLN 269 (Del) (DB).
81 Municipal Employees Union v Govt of NCT, Delhi 2001 (2) LLN 328 (Del), per Sen J.
82 Bijay Cotton Mills Ltd v Employees (1957) 1 LLJ 311 (LAT).
83 Hotel Imperial New Delhi v Chief Commr, Delhi (1958) 1 LLJ 92 (Punj) (DB).
84 Punjab National Bank Ltd v AN Sen (1952) 1 LLJ 371 (Simla), per Harnam Singh J.
85 Prabhudayal Himatsingka v State of Punjab AIR 1959 Punj 460 (DB), per Grover J.
86 Hotel Imperial New Delhi v Chief Commr, Delhi (1958) 1 LLJ 92 (Punj) (DB).
87 NN Chakravarty v State of Assam AIR 1960 Assam 11 (DB), per Sinha CJ.
88 Kanti Cotton Mills Ltd v State of Saurashtra AIR 1953 Sau 46 (DB), per Shah CJ.
89 Shree Swadeshi Oil Mills v Workmen (1955) LAC 181(LAT).
90 Bijay Cotton Mills Ltd v Employess (1957) 1 LLJ 311 (LAT).
91 Re RBSSN Lakshmanan Chettiar AIR 1950 Mad 835 [LNIND 1949 MAD 13], per Subba Rao J.
1 TD Ramayya Pantulu, IT v Kutty & Rao (Engineers) Ltd (1949) 1 LLJ 13 (Mad) (DB), per Harwill J.
2 Shalimar Works Ltd v Workmen (1959) 2 LLJ 26 [LNIND 1959 SC 108] (SC), per Wanchoo J.
3 Swadeshi Cotton Mills Co Ltd v IT (1961) 2 LLJ 419 [LNIND 1961 SC 121] (SC), per Wanchoo J. .
4 Hotel Imperial v Chief Commr, Delhi (1959) 2 LLJ 553 [LNIND 1959 SC 118] (SC), per Wanchoo J.
5 Sheshrao Bhaduji Hatwar v PO First LC (1992) 1 LLJ 672, 673 (Mad) (DB), per Mohta J.
6 Mangalam Publications (India) P Ltd v V Thampy Iype (2007) 1 LLJ 455 (Ker .).
7 National Iron & Steel Co Ltd v State of West Bengal (1967) 2 LLJ 23 [LNIND 1967 SC 10], 28 (SC), per Miner J.
8 National Asphalt Products Construction Co v NM Kothari 1977 Lab IC 1300, 1303 (Bom) (DB), per Sawant J.
9 Steel Authority of India Ltd v HS Employees Union (1998) 1 LLJ 704 [LNIND 1997 CAL 24] (Cal), per Jain J.
10 Niemla Textile Finishing Mills Ltd v Second Punjab Tribunal (1957) 1 LLJ 46, 465 (SC), per Bhagwati J.
11 Hindustan General Electrical Corpn Ltd v State of Bihar (1965) 2 LLJ 92, 95 (Pat) (DB).
12 Ushodaya Publications Pvt Ltd v Govt of AP 1983 Lab IC 580, 594 (AP) (DB), per Kuppuswami CJ.

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13 Vishnu Sadav Bhattacharya v Manager Cycle Industries 1973 Lab IC 396 -97 (MP) (DB), per Raina J.
14 Ibid.
15 Alien Berry & Co Ltd v A Das Gupta AIR 1952 Cal 850 [LNIND 1951 CAL 259], per Bose J.
16 Ushodaya Publications Pvt Ltd v Govt of AP 1983 Lab IC 580, 594 (AP) (DB), per Kuppuswami CJ.
17 North Bihar Sugar Mills Ltd v State of Bihar 1980 Lab IC 669 (Pat) (DB), per Jha J.
18 Workmen of Sri Ranga Vilas Motors Pvt Ltd v Mgmt (1967) 2 LLJ 12 [LNIND 1967 SC 26], 17 (SC), per Sikri J.
19 V Guruviah Naidu & Sons v Workmen (1965) 1 LLJ 304 (Mad), per Veeraswami J.
20 T Abdul Rahiman Sahib v State of Mysore (1967) 1 LLJ 61 -62 (Mys) (DB), per Somnath Ayyar J.
21 Blue Star Ltd v PO, Le (2001) 2 LLN 534 (Pat) (DB).
22 Bangalore Woollen, Cotton & Silk Mills Co Ltd v Workmen (1968) 1 LLJ 555 [LNIND 1967 SC 274] (SC) : AIR 1968 SC 585
[LNIND 1967 SC 273]: [1968] 1 SCR 581 [LNIND 1967 SC 273] per Vaidialingam J.
23 Bengal Provincial Bank Empolyees Assn v Salim M Merchant AIR 1958 Cal 297 [LNIND 1957 CAL 206], per Sinha J.
24 State of Maharashtra v Kamani Employees’ Union, 1975 Lab IC 387 [LNIND 1973 SC 171] (SC), per Vaidialingam J.
25 Burmah Shell OS & D Co India Ltd v Govt of TN (1976) 2 LLJ 230, 237 (Mad), per Ramanujam J.
26 Jammu and Kashmir Project Construction Corpn Ltd v LC, 1983 Lab IC 257, 260 (J&K), per Kotwal J.
27 Workmen of Sri Ranga Vilas Motors (supra).
28 Workmen of Sri Ranga Vilas Motors v Mgmt (1967) 2 LLJ 12 [LNIND 1967 SC 26], 17 (SC), per Sikri J.
29 Jaslok Hospital & Research Centre v BV Chavan 1983 Lab IC 1100, 1106 (Bom), per Pendse J.
30 Tirupathi Motor Tpt Workers Union v Venkateswara Bus Union 1968 Lab IC 1534 (AP), per Seshachalapthi J.
31 See, notes and comments under s 12(5) of the Act (infra).
32 Ramchandra Abaji Pawar v State of Bombay AIR 1952 Born 293 -94 (DB), per Chagla CJ.
33 Papanasam Labour Union v State of Madras (1959) 1 LLJ 526 [LNIND 1958 MAD 158] (Mad), per Balakrishna Ayyar J.
34 Brought into force wef 21 August 1984.
35 Bangalore Woollen, Cotton & Silk Mills Co v Workmen (968) 1 LLJ 555, 556 (SC), per Vaidialingam J.
36 Aruna Metal Industries v LC (1960) 2 LLJ 681 (Mad), per Ramachandra Ayyar J.
37 Bangalore Woollen, Cotton & Silk Mills (supra).
38 Hurriladih Coal Co Ltd v G Palit (1964) 1 LLJ 298 (Pat) (DB).
39 Co-operative Mill Societies Union Ltd v State of West Bengal (1958) 2 LLJ 61 [LNIND 1958 CAL 65] (Cal), per PB Mukharji J.
40 Titaghur Paper Mills Co Ltd v Workmen (1959) 2 LLJ 9 [LNIND 1959 SC 92] (SC), per Wanchoo J.
41 Basawan Singh v Rohtas Industries Ltd AIR 1957 Pat 493 (DB), per Kanhaiya Singh J.
42 Standard Coal Co Ltd v SP Varma AIR 1952 Pat 56 (DB).
43 Iyyappen Mills Pvt Ltd v State of Travancore Cochin (1958) 1 LLJ 50 (Ker) (DB), per MS Menon J.
44 Associated Cement Co Ltd v IT AIR 1958 Punj 330, per Gosain J.
45 Gujarat SRTC v Workmen (1999) 4 LLN 998 (Guj), per Balia J.
46 Amin Chand Pyare Lal v Second Punjab IT (1958) 1 LLJ 604 (Punj), per Bishan Narain J.
47 Punjab Distilling Industries Ltd v IT (1958) 2 LLJ 109 (Punj), per Grover J.
48 Arrah Electric Supply Co Ltd v Workmen AIR 1952 Pat 134 (DB), per Ramaswami J.
49 Grahams Trading Co (India) Ltd v Second IT (1963) 2 LLJ 153 (Cal), per BN Banerjee J.
50 Sendra Bansjora Colliery Co Pvt Ltd v Shantilal M Bhatt (1963) 2 LLJ 331 (Pat) (DB).
51 Pipraich Sugar Mills Ltd v PSM Mazdoor Union (1957) 1 LLJ 235 [LNIND 1956 SC 84] (SC), per Venkatarama Ayyar J.
52 Maharaj Weaving Mills v State of Punjab AIR 1958 Punj 210 : 1961 (3) FLR23, (1958) II LLJ 625P&H, per Bishan Narain J.
53 Hamida Match Mfg Co v State of Bhopal AIR 1954 Bhopal 17, per Sathey CJ.
54 Mgmt of Tocklai Experimental Station v State of Assam AIR 1960 Assam 132, per Deka J.

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55 Indian Oil Corporation Ltd v PO, IT (1999) 2 LLJ 904 (Gau) (DB), per Biswas J.
56 Suresh Kumar v Union of India (2004) 1 LLJ 53 [LNIND 2003 DEL 535] (Del) : 106 (2003) DLT 254 : 2003 (71) DRJ 742
[LNIND 2003 DEL 535], per Mukul Mudgal J.
57 Electronics Corpn of India Ltd v ECISE Union, AIR 2006 SC 2996 [LNIND 2006 SC 631]: (2006) III LLJ 773SC : (2006) 7 SCC
330 [LNIND 2006 SC 631], per Pasayat J.
58 Bongaigaon Refinery & Petrochemicals Ltd v S Ahmed (2001) 4 LLN 44 (SC).
59 Sanat Kumar Dwivedi v DJSBV Bank Maryadit (2001) 1 LLN 66 (SC).
60 Nagappa H Lamani v Mgmt of Sericulture Deptt (2002) 3 LLN 1026 (Kant), per Rangavitralchar J.
61 Workmen v Oriental Fire & General Insurance Co Ltd (2001) 2 LLN 615 (SC), per Rajendra Babu J.
62 MTNL v UK Bhandari (2001) 2 LLN 902 (Bom) (DB).
63 Famtex Exports (P) Ltd v Govt of Tamil Nadu (2002) 4 LLN 463 (Mad), per Kanagaraj J.
64 International Airports Authority of India v IACW Union AIR 2009 SC 3063 [LNIND 2009 SC 824]: (2009) IV LLJ 31SC : (2009)
13 SCC 374 [LNIND 2009 SC 824], per Raveendran J.
65 Bangalore Metropolitan Tpt Corpn v T V Anandappa AIR 2009 SC (Supp) 1058, per Pasayat J.
66 GM, ONGC v ONGC Contractual Workers Union AIR 2008 SC (Supp) 1994, per Bedi J.
67 State of Madras v CP Sarathy (1953) 1 LLJ 174 [LNIND 1952 SC 84] (SC), per Patanjali Sastri CJI.
68 Western India Match Co v Western India Match Co Workers’ Union (1970) 2 LLJ 256 [LNIND 1970 SC 4] (SC), per Shelat J.
69 Jai Bhagwan v Mgmt of Ambaw CCB Ltd 1983 Lab IC 1694 (SC), per Chinnappa Reddy J.
70 Swadeshi Cotton Mills Ltd v IT (1961) 2 LLJ 419 [LNIND 1961 SC 121], 424 (SC), per Wanchoo J.
71 Orient Paper Mills Sramik Congress v State of Orissa (1988) 2 LLJ 75, 81 (Ori) (DB), per GB Patnaik J.
72 UK Roller Flour Mill v Industrial Court 1979 Lab IC 45 (Bom) (DB), per Tupule J.
73 Cf, Barium Chemicals Ltd v Co Law Board AIR 1967 SC 295 [LNIND 1966 SC 132], para 26, per Hidayatulah J.
74 Cf, Liversidge v Anderson [1942) AC 206 (HL), per Lord Mcmillan.
75 Modern Foundry & Machine Works Ltd v State of Maharashtra (1999) 1 LLJ 1137 (Bom), per Marlapalle J.
76 Cf, R v Paddington Ex Parte Peachey Property Corpn Ltd [1965] 2 All ER 836, 842 (CA), per Lord Denning MR.
77 Cf, Bombay Union of Journalists v State of Bombay (1964) 1 LLJ 351 [LNIND 1963 SC 305] (Bom), per Gajendragadkar J.
78 Machinder Shivaji v King AIR 1950 FC 129, per Patanjali Sastri J.
79 Cf, King Emperor v Sibnath Banerji 72 LA 241 (PC), per Lord Thankerton.
80 Cf, Commr of Police v Gordhandas Bhanji [1952] SCR. 135, per Vivian Bose J.
81 Steel Authority of India Ltd v Union of India, AIR 2006 SC 3229 [LNIND 2006 SC 772]: (2006) III LLJ 1037SC : (2006) 12 SCC
233 [LNIND 2006 SC 772], per Sinha J.
82 Steel Authority of India Ltd v State of WB, AIR 2009 SC 120 [LNIND 2008 SC 1919]: (2009) I LLJ 241SC : (2008) 14 SCC 589
[LNIND 2008 SC 1919], per Pasayat J.
83 Brijbhushan Yadav v Union of India AIR 2007 SC (supp) 1014, per Sathasivam J.
84 Oshiar Prasad v Mgmt of SCW, BCCL (2015) 1 LLJ 513 (SC), per AM Sapre J.
85 Pratap Singh v State of Punjab (1966) 1 LLJ 458 [LNIND 1963 SC 211] (SC), per Rajagopala Ayyangar J.
86 Ushodaya Pubn Pvt Ltd v Govt of AP 1983 Lab IC 580, 588 AP (DB), per Kupuswami CJ.
87 Cf, R v Governors of Darlington School [1844] 6 QB 682 , 715, per Warrington LJ.
88 Santosh Dattaram Nadkarni v New India Industries Ltd (1988) 2 LLJ 392 [LNIND 1988 BOM 109], 396 (Bom) (DB), per Sawant
J.
89 RC Cooper v Union of India AIR 1970 SC 564, 644, per Ray J.
90 Rohtas Industries Mazdoor Sangh v State of Bihar 1974 Lab IC 1266, 1271 (Pat) (DB), per Sarwar Ali J.
91 British India Corpn Ltd v IT AIR 1957 SC 354, per Bhagwati J.
92 State of Bihar v DN Ganguli (1958) 2 LLJ 634 [LNIND 1958 SC 92] (SC) : AIR 1958 SC 1018 [LNIND 1958 SC 92]: [1959] 1
SCR 1191 [LNIND 1958 SC 92], per Gajendragadkar J.

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93 Newspapers Ltd v IT (1957) 2 LLJ 1 [LNIND 1957 SC 28], 8 (SC), per Kapur J.
94 Gouripore Co Ltd v State of WB (1975) 1 LLJ 247, 250 (Cal), per Amiya Kumar Mookerji J.
95 Sindhu Resettlement Corpn (supra).
96 National Engg Industries v State of Rajasthan (1999) 4 LLN 1185, 1199 (SC).
97 Manganese Ore (India) Ltd v Union of India (2001) 4 LLN 249 (Bom), per Gundewar J.
1 Moolchand KR Hospital K Union v Labour Commr (2001) 1 LLN 920 (SC).
2 Maya Export Corpn v Secretary, Labour (2002) 1 LLN 1169 (Del), per Sen J.
3 Genl Secy, ICE Union v India Cements Ltd (1999) 2 LLJ 1 [LNIND 1998 MAD 862] (Mad) (DB), per Shivappa J.
4 Madras Gymkhana Club Employees’ Union v Gymkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292] (SC), per Hidayatullah J.
5 Mgmt, Sacred Heart Convent High School, v State of Tamil Nadu (1992) 1 LLJ 745 -46 (Mad), per Kanakra J.
6 Hariprasad Shivshanker Shukla v AD Divelkar AIR 1957 SC 121 [LNIND 1956 SC 104], per SK Das J.
7 Pipraich Sugar Mills (supra).
8 Ravikrishna Weaving Mills Pvt Ltd v State of Kerala (1959) 2 LLJ 760 (Ker), per Vaidialingam J.
9 UP Electric Supply Co Ltd v Workmen (1971) 2 LLJ 528 [LNIND 1971 SC 429] (SC) : AIR 1971 SC 2521 [LNIND 1971 SC
429]: (1971) 3 SCC 495 [LNIND 1971 SC 429], per Mitter J.
10 State of Bombay v KP Krishnan (1960) 2 LLJ 592 [LNIND 1960 SC 125] (SC), per Gajendragadkar J.
11 Rohtas Industries Mazdoor Sangh v State of Bihar 1974 Lab IC 1266, 1272 (Pat) (DB), per Sarwar Ali J.
12 Workmen of Hercules Insurance Co Ltd v Mgmt, (1961) 1 LLJ 249 [LNIND 1960 SC 322] (SC), per Gajendragadkar J.
13 Indian Rubber Mfrs Ltd v State of WB 1983 Lab IC NOC 67 (Cal), per Barooah J.
14 Corpn of the City of Mangalore v NS Giri (1991) 1 LLJ 150, 153 (Kant) (DB), per Mohan CJ.
15 Workmen of Seshasayee Paper and Board Ltd v State of TN (1991) 1 LLJ 274 [LNIND 1990 MAD 370], 278 (Mad), per Kanakaraj
J.
16 Rashtriya Hair Cutting Saloon v Maharashtra Kamgar Sabha 1991 Lab IC 1539, 1547 (Bom), per Dhanuka J.
17 Amristar Central CCS Ltd v State of Punjab 1982 Lab IC (NOC) 95 (P&H), per Punchhi J.
18 Tarang Theatre v State of Uttar Pradesh 1992 Lab IC 1085 (All), per ML Bhat J.
19 Mgmt, Southern Textile Ltd v United TLA (1983) 1 LLJ 435 [LNIND 1982 MAD 239] (Mad), per Padmanabhan J.
20 Chairman, Bank of Cochin v All Kerala BEF 1978 Lab IC 262, 263 (Ker) (DB), per Nambiyar CJ.
21 Ramakrishna Mills Ltd v Govt of Tamil Nadu (1984) 1 LLJ 259, 267 (Mad) (DB), per Nainar Sundram J.
22 Madras District A&GE Union v State of Madras (1964) 2 LLJ 407 (Mad), per Veeraswami J.
23 FACT Employees’ Assn v Mgmt of FACT Ltd (1983) 1 LLJ 240, 243 (Ker), per Narendran J.
24 Indian Industrial Works Ltd v Engineering Mazdoor Sabha (1955) 2 LLJ 675 (LAT).
25 Indian Airlines v Airlines Cabin Crew Assn (1994) 2 LLJ 587 (Del), per SC Jain J.
26 Co-operative Store Ltd v Ved Prakash Bhambri (1990) 1 LLJ 119, 121 (Del), per Bahri J.
27 Motor Industries Co Ltd v Govt of Karnataka (1989) 1 LLJ 88, 96 (Kant) (DB), per Rama Jois J.
28 Co-operative Store Ltd v Ved Prakash Bhambri (1990) 1 LLJ 119, 121 (Del), per Bahri J.
29 ICI Ltd v NA Kadam 1993 Lab IC 1498, 1508-09 (Bom), per BN Srikrishna J.
30 Spencer & Co Ltd v Third IT 1978 Lab IC 57, 60 (Cal) (DB), per Pyne J.
31 Bombay Port Trust Employees Union v Union of India (1988) 2 LLJ 39, 41 (Bom), per Bharucha J.
32 J Thomas & Co Pvt Ltd v Government of Kerala 1977 Lab IC 1329, 1330 (Ker) (DB), per Eradi J.
33 Employers of Thungabhadra Industries Ltd v Workmen (1973) 2 LLJ 283 [LNIND 1973 SC 196] (SC), per Vaidialingam J.
34 ANZ Grindlays Bank v Union of India, AIR 2006 SC 296 [LNIND 2005 SC 877]: (2005) 12 SCC 738 [LNIND 2005 SC 877] :
2006 (1) ALT 21 (SC), per Mathur J.
35 Karnal LK Sanghatan v Liberty Footwear Co 1990 Lab IC 301 [LNIND 1989 SC 425], 308 (SC), per Jagannatha Shetty J.

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36 Goodyear (India) Ltd v IT (1968) 2 LLJ 682, 692-93 (Raj) (DB), per Mehta J.
37 BN Elias & Co Pvt Ltd v GP Mukherjee AIR 1959 Cal 339 [LNIND 1958 CAL 290], per Bachawat J.
38 Kesoram Industries and Cotton Mills Ltd v DCL 1985 Lab IC 5 (NOC) (Cal), per Padma Khastgir J.
39 Mahnga Ram v LAT (1957) 1 LLJ 603 [LNIND 1956 ALL 79] (All) (DB), per Kidwai J.
40 Sundar Lal Saxena v Hindustan Commercial Bank Ltd AIR 1953 All 260 [LNIND 1952 ALL 250] (DB), per Bhargava J.
41 SKG Sugar Ltd v IT (1959) 1 LLJ 420 [LNIND 1958 SC 135] (SC), per Bhagwati J.
42 Hotel Imperial v Chief Commr, Delhi (1958) 1 LLJ 92 (Punj) (DB).
43 Hotel Imperial v Hotel Workers Union (1959) 2 LLJ 553 [LNIND 1959 SC 118], 555 (SC) : AIR 1959 SC 1214 [LNIND 1959 SC
118]: [1960] 1 SCR 279 [LNIND 1959 SC 118], per Wanchoo J.
44 National Iron and Steel Co Ltd v State of West Bengal (1967) 2 LLJ 23 [LNIND 1967 SC 10], 28 (SC) : [1967] 2 SCR 391 [LNIND
1967 SC 10] : 1967 (14) FLR 356, per Mitter J.
45 Niemla Textile Finishing Mills Ltd v Second Punjab Tribunal (1957) 1 LLJ 460 [LNIND 1957 SC 1] (SC), per Bhagwati J.
46 A Sundarambal v Government of Goa, Daman and Diu (1989) 1 LLJ 61 [LNIND 1988 SC 341], 65 (SC), per Venkatramiah J.
47 Co-operative Milk Societies Union Ltd v State of WB (1958) 2 LLJ 61 [LNIND 1958 CAL 65] (Cal) : AIR 1958 Cal 373 [LNIND
1958 CAL 65]: (1958) 1 CALLT 56 (HC), per PB Mukharji J.
48 Workmen’s Coop Industrial Home Ltd v First IT (1968) 2 LLJ 772, 778 (Cal) (DB) : 72 CWN 669, per Sinha CJ.
49 Rashtriya Khadan MSS Ltd v PO, CGIT 1975 Lab IC 1409, 1422, 1424-26 (MP) (FB).
50 South Arcot CMTS Ltd v Syed Batcha (1964) 1 LLJ 280 [LNIND 1963 MAD 188], 284 (Mad) (DB) : AIR 1964 Mad 103 [LNIND
1963 MAD 188], per Venkatadri J.
51 Kasturbanagar CHC Society v Soundra Rajan (1967) 2 LLJ 126 (Mad) : AIR 1968 Mad 67 [LNIND 1966 MAD 121], per
Kailasam J.
52 Workmen of Salem CMS for ESM Ltd v Govt of TN (1974) 2 LLJ 385 [LNIND 1973 MAD 284] (Mad) (DB) : (1974) ILR 3 Mad
176, per Veeraswami CJ.
53 Majoor Sahkari Bank Ltd v MN Majumdar (1955) 2 LLJ 755 [LNIND 1955 BOM 78] (Bom) (DB) : AIR 1957 Bom 36 [LNIND
1955 BOM 78]: ILR 1956 Bom 73 [LNIND 1955 BOM 78].
54 Kerala State HWC Society Ltd v State of Kerala (1964) 1 LLJ 559 (Ker) (DB), per MS Menon CJ.
55 Malabar CC Bank Ltd v State of Kerala (1964) 1 LLJ 557, 558 (Ker) (DB), per MS Menon CJ.
56 Gujarat State CLM Bank Ltd v LC (1968) 1 LLJ 670 (Guj) (DB) : (1968) GLR 815, per Bakshi J.
57 Kendriya Sarvodaya Sahkari Sangh Ltd v IT (1967) 1 LLJ 270 [LNIND 1966 RAJ 47] (Raj) (DB) : AIR 1968 Raj 33 [LNIND
1966 RAJ 47], per Ran Singh J.
58 Bhanjanagar CU Bank Ltd v SJ Rao 1974 Lab IC 291, 292 (Ori) (DB), per GK Misra CJ.
59 Co-operative Central Bank Ltd v Addl IT (1969) 2 LLJ 698 [LNIND 1969 SC 152] (SC), AIR 1970 SC 245 [LNIND 1969 SC
152]: (1969) 2 SCC 43 [LNIND 1969 SC 152] per Bhargava J.
60 Allahabad District Cooperative Ltd v Hanuman Dutt Tiwari AIR 1982 SC 120 : (1981) 4 SCC 431.
61 Rajasthan Rajya SSV Union v Judge, IT 1985 Lab IC 1023, 1027 (Raj) (DB), per Kasliwal J.
62 Sahakari Vipnan (Marketing) Sanstha Maryadit v LC 1987 Lab IC 344 (MP) (DB), per Sohani J.
63 Sonepat Co-operative Sugar Mills Ltd v PO, LC 1986 Lab IC 1916 (P&H) (FB), per Prem Chand Jain CJ.
64 Bhopal Co-operative Central Bank v KS Tomar (1998) 3 LLN 829 (MP), per Prasad J.
65 Sagarmal v District SK Bank Ltd (1998) 5 LLN (supp) (SC).
66 Bhuna Coop Sugar Mill Ltd v Mohinder Singh (2000) 4 LLN 413 (P&H) (DB), per Sudhaikar J.
67 Dharappa v Bijapur CMPS Union, AIR 2008 SC 1848, per Raveendran J.
68 MD, NEKSRTC v Devidas M Sadananda, AIR 2006 SC 3273 : (2006) 8 SCC 52 : (2006) 3 LLJ 788 SC, per Kapadia J.
69 Safire Theatre v CWC (1977) 2 LLJ 312 [LNIND 1976 MAD 319] (Mad) (FB), per Kailasam CJ.
70 Bata India Ltd v State of Kerala 1985 Lab IC 687 (Ker), per MP Menon J.
71 Nirchiliya v Mgmt of Safire Theatre, Madras (1991) 1 LLJ 111, 112 (SC).
72 TN Chandra v South India Corpn (Agencies) Ltd, (1992) 1 LLJ 739 [LNIND 1991 MAD 64], 734 (Mad) (DB), per D Raju J.

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73 Renamed as the Banking Regulation Act 1949 (Act 10 of 1949).

74 All India Bank Employees’ Assn v National IT (1961) 2 LLJ 385 [LNIND 1961 SC 283] (SC), per Rajagopala Ayyangar J.
75 Daji M Surve v ITC Ltd, Bombay 1991 Lab IC 1157 (Bom), per Kantharia J.
76 Cipla Ltd v MGK Union (2001) 2 LLN 19 (SC).
77 Vividh Kamgar Sabha v Kalyani Steels Ltd (2001) 1 LLN 782 (SC).
78 Mulla’s Code of Civil Procedure, 1965, Vol 1, 13th ed, p 41.
79 Wolverhampton NWW Co v Hawkesford [1859] 6 CB (NS) 336, 356. per Willies J.
80 Secretary of State v Mask &-Co 67 LA 222 (PC), per Lord Thankerton.
81 Illuri Subbayya Chetty & Sons v State of Andhra Pradesh AIR 1964 SC 322 [LNIND 1963 SC 336], per Gajendragadkar J.
82 Pabbojan Tea Co v Deputy Commissioner (1967) 2 LLJ 872 [LNIND 1967 SC 237], 878 (SC) : AIR 1968 SC 271 [LNIND 1967
SC 236]: [1968] 1 SCR 260 [LNIND 1967 SC 236], per Mitter J.
83 Rajasthan SRTC v Krishna Kant 1995 Lab IC 2241, 2250 (SC), per Jeevan Reddy J.
84 Western India Automobile Assn v IT (1949) 1 LLJ 245, 256 (FC), per Mahajan J.
85 Krishnan v EID and SF Ltd (1964) 1 LLJ 217 [LNIND 1963 MAD 143] (Mad), per Veeraswami J.
86 Premier Automobiles Ltd v KS Wadke (1975) 2 LLJ 445 [LNIND 1975 SC 299], 459 (SC), per Untwalia J.
87 K.S.R.T.C. v T.I. Aron (1983) 2 LLJ 300, 303 (Kant), per Sabhahit J, 1983 (1) Karlj 555.
88 Bharat Petroleum Corpn v PE Union (2001) 2 LLN 253 (Bom) (DB), per Srikrishna J.
89 Indian Oil Corporation v Oil Sector Officers’ Assn (2001) 2 LLN 326 (Del), per Sen J.
90 Ramesh Chandra Singh v Union of India 1981 Lab IC 781, 786 (All), per Mithal J.
91 Jitendra Nath Biswas v Empire of India & Ceylon Tea Co 1990 Lab IC 308, 311 : AIR 1990 SC 255 [LNIND 1989 SC 369]:
(1989) 2 LLJ 572 [LNIND 1989 SC 369] : (1989) 3 SCC 582 [LNIND 1989 SC 369] (SC), per Oza J.
92 Sukhi Ram v State of Haryana 1982 Lab IC 1282, 1287 : (1982) ILR 2 P&H 328 (P&H) (FB), per Sandhawalia CJ.
93 Orissa RTC Ltd v Sachidananda Kanungo 1985 Lab IC 140 (NOC) (Ori), per PC Misra J.
94 Kerala Rubber and Reclaims Ltd v PA Sunny 1989 Lab IC 964, 966 (Ker), per Malimath CJ.
95 Mookan, Major v BM, Southern Roadways Ltd 1989 Lab IC 2246, 2248 : (1991) 1 LLJ 533 (Kant), per Hiremath J.
1 VA Damodaran v EID Parry (I) Ltd 1991 Lab IC 1588 (Mad), per Somasundaram J.
2 Siten Bose v Ananda Bazar Patrika Pvt Ltd 1980 Lab IC 466, 469 (Cal) (DB), per SM Guha J.
3 Oil India Ltd v Dhirendra Kumar Das 1980 Lab IC 410 (Gau) (DB), per Singh J.
4 Rajasthan SRTC v Krishan Kant 1995 Lab IC 2241, 2249 (SC), per Jeevan Reddy J.
5 EM Rao, Industrial Jurisprudence: A Critical Commentary, 2015, 2nd ed, p 349.
6 Pearlite Lioners (P) Ltd v Manorama Sirsi (2004) 3 SCC 172 [LNIND 2004 SC 23] : 2004 AIR SCW 273.
7 Apollo Tyres Ltd v PS Sebastian AIR 2009 SC 2174 : (2009) 14 SCC 360 : (2010) 1 LLJ 621 [LNIND 2009 SC 1064] (SC).
8 Nizam Sugars Ltd v G Veeraswamy 1996 Lab IC 2022 (AP), per KS Srivastav J.
9 United India Insurance Co Ltd v Paramjit Singh (1995) 1 LLJ 640 -41 (P&H), per NK Sodhi J.
10 Hindustan Lever Ltd v TOM & ACK Union 1996 Lab IC 1446 (Cal), per Basudeva Panigrahi J.
11 Assn of State Road Transport Undertakings v ASRTUE Union 1986 Lab IC 1543 : (1987) 1 LLJ 77 (Del), per Luthra J.
12 Chandrakant T Nikam v Municipal Corpn of Ahmedabad (2002) 1 LLJ 842 [LNIND 2002 SC 103], 847-8 : AIR 2002 SC 997
[LNIND 2002 SC 103]: (2002) 2 SCC 542 [LNIND 2002 SC 103] (SC), per Pattanaik J.
13 K Ponniah v Golden Hills Estates (P) Ltd (1998) 2 LLN 571 (Mad), per Thangaraj J.
14 Motor Industries Co Ltd v Presiding Officer (1998) 3 LLN 244 (Kant), per Mohan Kumar J.
15 Iqbal Singh v PO, LC (2001) 1 LLN 1207 (P&H) (DB), per Sudhalkar J.
16 Government of India (2002), Report of NCL-II, Chap 13, p 46, para 6.99.
17 BS Bharti v IBP Co Ltd AIR 2004 SC 4355 [LNIND 2004 SC 844]: (2004) 3 LLJ 549 [LNIND 2004 SC 844] : (2004) 7 SCC 550
[LNIND 2004 SC 844] (SC), per Hegde J.

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18 Rajasthan State Road Transport Corpn v Zakir Hussain 2005 (7) SCC 447 [LNIND 2005 SC 623] : (2005) 3 LLJ 786 [LNIND
2005 SC 623] (SC).
19 State of Haryana v Bikar Singh AIR 2006 SC 2473 [LNIND 2006 SC 200]: (2006) 2 LLJ 754 [LNIND 2006 SC 200] : (2006) 9
SCC 450 [LNIND 2006 SC 200] (SC), per HK Sema J.
20 Chief Engineer, Hydel Project v Ravindra Nath, AIR 2008 SC 1315 [LNIND 2008 SC 160]: (2008) II LLJ 294: (2008) 2 SCC 350
[LNIND 2008 SC 160] (SC), per Sirpurkar J.
21 Rajasthan State Road Transport Corporation v Krishna Kant AIR 1995 SC 1715 [LNIND 1995 SC 618]: AIR 1995 SCW 2683 :
(1995) II LLJ 728(SC).
22 RSRTC v Deen Dayal Sharma AIR 2010 SC 2662 [LNINDORD 2010 SC 167]: (2010) 6 SCC 697 [LNINDORD 2010 SC 167] :
2010 (5) SCALE 1 [LNINDORD 2010 SC 167] (SC), per Lodha J.
23 Rameshwar Prasad v State of Bihar (1973) 2 LLJ 15, 22 (Pat) (DB), per Untwalia J.
24 Workmen of Sri Ranga Vilas Motors Pvt Ltd v Sri Ranga Vilas Motors Pvt Ltd (1967) 2 LLJ 12 [LNIND 1967 SC 26], 17 (SC), per
Sikri J.

End of Document

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER III Reference of Disputes to Boards, Courts or Tribunals

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER III Reference of Disputes to Boards, Courts or Tribunals

10[S. 10A. Voluntary Reference of Disputes to Arbitration.—

(1) Where any industrial dispute exists or is apprehended and the employer and the workmen agree to refer the
dispute to arbitration, they may, at any time before the dispute has been referred under section 10 to a Labour
Court or Tribunal or National Tribunal, by a written agreement, refer the dispute to arbitration and the reference
shall be to such person or persons (including the presiding officer of a Labour Court or Tribunal or National
Tribunal) as an arbitrator or arbitrators as may be specified in the arbitration agreement.
11[(1A) Where an arbitration agreement provides for a reference of the dispute to an even number of arbitrators, the
agreement shall provide for the appointment of another person as umpire who shall enter upon the reference, if
the arbitrators are equally divided in their opinion, and the award of the umpire shall prevail and shall be deemed
to be the arbitration award for the purposes of this Act.]
(2) An arbitration agreement referred to in sub-section (1) shall be in such form and shall be signed by the parties
thereto in such manner as may be prescribed.
(3) A copy of the arbitration agreement shall be forwarded to the appropriate government and the conciliation officer
and the appropriate government shall, within 12[one month] from the date of the receipt of such copy, publish the
same in the Official Gazette.
13[(3A) Where an industrial dispute has been referred to arbitration and the appropriate government is satisfied that
the persons making the reference represent the majority of each party, the appropriate government may, within
the time referred to in sub-section (3), issue a notification in such manner as may be prescribed; and when any
such notification is issued, the employers and workmen who are not parties to the arbitration agreement, but are
concerned in the dispute, shall be given an opportunity of presenting their case before the arbitrator or
arbitrators.]
(4) The arbitrator or arbitrators shall investigate the dispute and submit to the appropriate government the arbitration
award signed by the arbitrator or all the arbitrators, as the case may be.
14[(4A) Where an industrial dispute has been referred to arbitration and a notification has been issued under sub-
section (3A), the appropriate government may, by order, prohibit the continuance of any strike or lockout in
connection with such dispute which may be in existence on the date of the reference.]
(5) Nothing in the Arbitration Act 1940 (10 of 1940)15 shall apply to arbitrations under this section.]

LEGISLATION

This section was inserted by s 8 of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act 1956 and it
was enacted with the object of enabling employers and employees to voluntarily refer their disputes to arbitration
themselves by a written agreement and for the enforcement of agreements between them, reached otherwise than in the
course of conciliation proceedings.16 The provisions of the various sub-sections of s 10A and s 17 project a time bound
programme from the stage of reference to the culmination of the award. Strict adherence to these provisions is a condition
precedent for passing a valid award.17
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SUB-SECTION (1)

(i) Reference to Arbitrator

The requirements of sub-s (1) are:

(a) there should be an existing or apprehended industrial dispute;

(b) the reference to arbitration should be by a written agreement;

(c) the reference should be made before the dispute has been referred under section 10 to a labour court, an industrial tribunal
or national tribunal; and
(d) the names of the person or persons to act as arbitrator or arbitrators must be specified in the arbitration agreement. Such
persons may be presiding officers of labour courts, tribunals or national tribunals.

The section is not very clearly worded, but the essential features of its scheme are not in doubt.18The first requirement of
this section is that there must be an ‘industrial dispute’ which is in existence or is apprehended. The words ‘where any
industrial dispute exists or is apprehended’ postulate that what is in existence or is apprehended must be an ‘industrial
dispute’ within the meaning of s 2(k) of the Act. If the dispute which is existing or apprehended is not an ‘industrial
dispute’ at all, the reference will not be competent.19 In Sindhu-Hochtief, a single judge of the Bombay High Court held
that the dispute as to what should happen to the undistributed bonus will not fall within the definition of ‘industrial dispute’
as defined in s 2(k) inasmuch as it would not be a dispute or difference connected with the employment or non-
employment or the terms of employment or with the conditions of labour. Hence, even the consent of the parties to the
reference of such dispute to arbitration under s 10A could not validate the reference.20 An agreement, to refer an ‘industrial
dispute’ to an arbitrator under this section, is not a ‘settlement’ of the dispute as postulated by s 2(p) of the Act, because
the dispute subsists after such an agreement and does not come to an end.21 The scope of the words ‘at any time’ has been
limited by the words that immediately follow, viz, ‘before the dispute has been referred under s 10 to a labour court,
tribunal or national tribunal’. It follows that after an industrial dispute has been referred to an arbitrator under s 10A, it
cannot be validly referred to a labour court, tribunal or national tribunal for adjudication.22

The reference of a dispute to arbitration under s 10A can, however, be made even if the conciliation proceedings before a
conciliation officer are pending or a reference regarding that dispute under s 10(1)(a) or (b) has already been made to a
board or a court of inquiry. The wording of this sub-section enables and confers the powers on parties to enter into an
arbitration agreement. However, such agreement must be in the prescribed form and must specify the name of the
arbitrator or arbitrators and a copy of the arbitration agreement should be forwarded to the ‘appropriate government’, on
receipt of which the ‘appropriate government’ is required to publish the same in the Official Gazette. It means that all
parties interested in the dispute should have notice of reference of the dispute to arbitration and such of them might present
their viewpoint to the arbitrator, as choose to do so. The procedure to be followed under s 10A is directory and the
government is required to adopt, if it wants to make the award of the arbitrator binding on the parties or persons who have
not joined the reference to arbitration. However, sub-s (4) requires that the award has to be submitted to the ‘appropriate
government’. It is after the parties have named the arbitrator and entered into a written agreement in that behalf that the
‘appropriate government’ steps in to assist the further proceedings before the named arbitrator.23 An arbitration agreement
which affects the interest of large number of employees could never be a private agreement outside the scope of s 10A, and
the non-publication of the arbitration agreement under s 10A(3) would be fatal to the arbitration award.24

The arbitrator or arbitrators may be private persons or even the presiding officer of labour courts, tribunals or national
tribunals. However, when an industrial dispute is referred to an arbitrator, his jurisdiction to arbitrate on the dispute will be
under s 10A and not under s 10 and his award will not be governed by the provisions of the Act relating to the awards of
the labour courts or tribunals but will be governed only by the provisions relating to the awards of the industrial arbitrators.
However this section will have no application to an arbitration agreement which is not in compliance with the requirements
of sub-ss (2) and (3) thereof.25 On a reference to more than one arbitrator, when there is no provision for an award made by
less than all being valid, each one of them must act personally in performance of the duties of his office, as if he were the
sole arbitrator, for, as the office is joint, if one refuses or omits to act, the others can make no valid award. Such a
provision is, implied, unless a contrary intention is expressed, whenever the arbitration agreement requires that there shall
be three arbitrators (as distinguished from merely permitting the appointment of three arbitrators) the award of any two is
then binding.26 For the making of an award it is enough that the arbitrators act together and finally make up their mind and
express their decision in writing. This writing must be authenticated by their signatures. The award thus made and signed
is complete and final so far as the arbitrators are concerned. The giving of a written notice to either party is not essential to
the making of an award.27

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(ii) Procedure before the Arbitrator

Section 11 lays down that an arbitrator shall follow such procedure as he may think fit. The Madhya Pradesh High Court
appears to have misread s 11 in KP Singh,28where it observed that s 11 of the Act prescribes the procedure to be followed
by a conciliation officer, the board, the court or the tribunal; but leaves the arbitrator to follow his own procedure. The
observation is not in accordance with the clear language of sub-s (1). From this observation, the court further deduced that
‘that is certainly in consonance with the principles of arbitration...’ This observation is not correct as an arbitrator has to
follow the same procedure a board, court, labour court, tribunal or national tribunal has to follow. In other words, the
arbitrator has to evolve his own procedure in accordance, however, with the rules of natural justice. The law has been
correctly stated by another Division Bench of the same High Court in Aftab-e-Jadid, where speaking for the court, CP Sen
J said:

Subject to any limitations contained in the arbitration agreement and to any statutory direction as to the manner in which he has to
discharge his duties, an arbitrator may conduct any proceedings in any manner he thinks fit so long as he acts in accordance with
the principles of natural justice, equity and good conscience. Though the Arbitrator is not bound by the procedure laid down either
in the Civil Procedure Code or by the strict rules of evidence but this does not mean that his procedure might be opposed to natural
justice or he must disregard the rules of evidence which are founded on fundamental principles of justice and public policy. An
arbitrator is also not bound to reduce the evidence in writing unless the terms of agreement so required.29

On the reference having been made to the arbitrator, he has all the powers, the terms of reference, to which both sides are
partly, conferred.30 Before the arbitrator acquires jurisdiction to arbitrate on the industrial dispute referred to it, it is
imperative that the mandatory requirements of s 10A must be complied with.

SUB-SECTION (1A): UMPIRE

From a cursory glance of sub-s (1) and sub-s (1A), it would appear that the parties can appoint an even number of
arbitrators. Previously there was no provision to resolve the matter if the arbitrators were equally divided in opinion. In
such a situation, the parties had to make a reference to an arbitrator over again or to move the government for making a
reference under s 10. This difficulty has now been removed by the legislature by the insertion of sub-s (1A), which makes
an imperative provision for the appointment of an umpire in case an even number of arbitrators is appointed by the parties.
Where in the course of such arbitration, the arbitrators are equally divided in their opinion, the award of the umpire shall
prevail and shall be deemed to be the arbitration award for the purposes of this Act.

SUB-SECTION (2): ARBITRATION AGREEMENT—‘AS MAY BE PRESCRIBED’

Sub-section (1) requires the arbitration agreement to be in writing and sub-s (2) requires such agreement in the prescribed
form and to be signed by the parties thereto in the prescribed manner. Part 2 of the Industrial Disputes (Central) Rules
1957 deals with arbitration agreements. Rule 7 prescribes that an arbitration agreement shall be in Form C and also lays
down the procedure for its delivery to the authorities mentioned therein and also the requirement of the consent in writing
by the arbitrator or arbitrators. The Orissa High Court held that it is not necessary that the arbitration agreement must be in
form ‘C’ and it is sufficient if the requirements of that Rule and form are substantially complied with by the arbitration
agreement. Similarly, state governments have prescribed their own corresponding Rules.31

SUB-SECTION (3): PUBLICATION OF THE ARBITRATION AGREEMENT

The first part of this provision requires the parties to forward a copy of the arbitration agreement to the appropriate
government and the conciliation officer and the second part further requires the appropriate government to publish the
agreement in the Official Gazette within ‘one month’ from the date of the receipt of such copy. In both the cases, the
legislature has used the imperative word ‘shall’. On the question of the requirement of forwarding the copy of the
arbitration agreement to the appropriate government and the conciliation officer, there is complete unanimity of judicial
opinion that the requirement is mandatory and its non-compliance will render any arbitration proceedings and award
invalid.32 However, with respect to the second requirement, viz, the publication of the agreement in the Official Gazette
within one month from the date of its receipt, there was wide divergence among different High Courts, some holding the
provision as mandatory, while others stating that it was merely directory. The cobwebs of confusion were finally cleared
by the conclusive pronouncement of the Supreme Court in Karnal LK Sangahtan, in which it was held that the arbitration
agreement must be published before the arbitrator considers the merits of the dispute and non-compliance of this
requirement would be fatal to the arbitral award. In other words, publication of the arbitration agreement in the Official
Gazette is a mandatory condition, non-compliance of which would invalidate the arbitral proceedings and the award while
the requirement of publication within a period of one month from the date of the receipt of the agreement by the

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government is merely directory. According to this holding, the award may be published at any time ‘before the arbitrator
considers the merits of the case.33

SUB-SECTION (3A): EMPLOYERS AND WORKMEN WHO ARE NOT PARTIES

This sub-section is introduced by the Industrial Disputes (Amendment) Act 1964, and it provides that even though the
government is satisfied that the persons making the reference represents the majority of each party, it may still, within a
period of one month, issue a notification with a view to give an opportunity to those employers and workmen who are not
parties to the arbitration agreement but are concerned in the dispute, to present their case before the arbitrator or the
arbitrators. If the requirements of this section are not complied with, the government will not be able to issue a notification
under s 10A(4A) prohibiting the continuance of any strike or lockout which may be in existence on the date of the
reference in connection with the dispute under reference. The Madras High Court held that the requirements of this
provision are, therefore, mandatory and an award made by the arbitrator where the requirements of this provision have not
been complied with, will be rendered invalid.34 However, a single judge of the Delhi High Court in DCM Clerks, has taken
the view that the provisions of this sub-section are not mandatory but they are directory.35

SUB-SECTION (4)

(i) Award of Arbitrator

This sub-section empowers the arbitrator to investigate and adjudicate upon the ‘industrial dispute’ referred to him under
the arbitration agreement and then to submit the award signed by him. Such award is also to be published, like any other
award under the Act, by the appropriate government within a period of thirty days from the date of its receipt, in
accordance with the provisions of s 17 and it is final after being published under s 17(2). An award of the arbitrator which
is not published as required by s 17 (1) of the Act, will be incapable of being enforced as postulated by s 17 A and as such
will have no force of law. Section 17A makes an award enforceable on the expiry of thirty days from the date of its
publication under s 17. Section 18(2) makes an arbitration award, which has become enforceable, binding on the parties to
the agreement who referred the dispute to arbitration. Section 18(3) makes the arbitration award, in case where a
notification has been issued under sub-s (3A) of s 10A, which has become enforceable, binding not only on all parties to
the dispute but also on all other parties summoned to appear in the proceedings, the heirs, successors or assigns of the
employer and all present and future workmen. Under s 19(3), the arbitral award remains in operation for a period of one
year from the date on which it becomes enforceable subject to the powers of the ‘appropriate government’ to reduce or
extend the period of its operation. According to s 19(6), such award further continues to be binding on the parties even
after the expiry of the period of its operation under s 19(3) until a period of two months have lapsed from the date on
which either of the parties intimates its intention to the other to terminate the award. By fiction of s 20, proceedings before
an arbitrator under s 10A are deemed to have commenced on the date of the reference for arbitration and concluded on the
date when the award becomes enforceable. Section 21 makes provision for keeping certain matters confidential by the
arbitrator. Section 29 makes the breach of any terms of an award, a penal offence. Section 30 provides for penalty in cases
of unlawful disclosure of information required to be kept confidential. Section 33C makes provision for recovery of money
or computation of any benefit capable of being computed in terms of money, due under an award from the employer.

(ii) Jurisdiction of the Arbitrator

The arbitrator ‘functioning within the framework of such agreement of the parties under s 10A of the Act, does not have
the status of a statutory arbitrator, though there may be similarities between the two; nor could it be said of him, that he is a
court even if some trappings of a court are present, as he lacks the fundamental, inherent judicial power vested by the state
in a court. His jurisdiction, based on specific agreement of parties to abide by his decision, is consensual in nature.
Reference of an industrial dispute to an arbitrator under s 10A is more or less an ad hoc arrangement to serve a particular
purpose as desired by the parties. It may differ from private arbitration simpliciter inasmuch as the reference in terms of the
agreement is made by the government by due publication in the Official Gazette, and the award given by him also is to be
published in the Official Gazette. In a sense proceedings before him are quasi-judicial in character. Once the award is
rendered he becomes functus officio and it will not be competent thereafter for him to consider, or do anything further in
relation to the dispute referred to him for adjudication pursuant to the specific agreement in that behalf.36 If the arbitrator
finds that what is referred to him is not an industrial dispute at all, he has no jurisdiction to proceed further with the
arbitration proceedings. Sub-section (4) requires the arbitrator or arbitrators to ‘investigate the dispute’. This provision,
unlike sub-s (4) of s 10, does not talk of the adjudication of any matters ‘incidental to’ the dispute. Nor sub-s (1) like sub-s
(1)(d) of s 10, talks of the reference of ‘any matter appearing to be connected with or relevant to the dispute’. The
arbitrator, therefore, has to strictly adjudicate upon the dispute as specifically referred to him by the agreement of the
parties and it cannot go into any other matters whether connected with or relevant or incidental to the dispute. Though the
provisions of Arbitration Act 1940 do not apply to the proceedings before an industrial arbitrator, the general principles
regarding the validity of such arbitrator’s award would apply. For instance, where the award can be held to be vitiated on

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account of the misconduct on the part of the arbitrator or where he exceeds jurisdiction, or does not hear the parties or fails
to determine an important question referred to them to be answered, the award will be amenable to judicial review under
Art 226 of the Constitution. However, the award of the arbitrator cannot be called in question as a defective award on any
procedural ground or that a particular criterion has not been kept in view by the arbitrator. This is so, because the arbitrator
has been invested with authority to settle the dispute between the parties on joint agreement between them, so he is well
expected to do substantial justice between the parties in giving his award.37

The award of an arbitrator under this section is of quasi-judicial character. The question whether such an award should
state reasons for its decision, has given rise to conflicting judicial dicta. The Punjab High Court preferred the view that ‘the
law does not intend to confer on the arbitrator under the Act, uncontrolled and absolute power to make the award
completely bare of reasons so as to render it incapable of judicial scrutiny. It was further observed that ‘as an arbitrator had
to decide a proposal and an opposition, in other words, to determine, a lis, the decision which he had to give could not be
devoid of any reference to the mode or manner by which the opinion was formed’.38 The Madhya Pradesh High Court,39
has categorically stated that there is an applied statutory obligation on the arbitrator to give reasons in support of the
conclusions of fact and law reached by him in the award. Though he is not required to write a lengthy judgment, like a
court, he must briefly indicate the working of his mind, ie, the process of reasoning which led him to decide the dispute
referred to him. Hence, his failure to state reasons, which is obligatory, would constitute an error of law apparent on the
face of the record. In other words, an award not based on any reasons is liable to be quashed. On the other hand, the Patna
High Court held that the desirability for giving the grounds on which a decision is based does not ipso facto lead to the
conclusion that such grounds must be given in the quasi-judicial decision of an arbitrator, where there is no specific
provision in the law itself to that effect. It was further observed that the court or tribunal to which the reference was made
would be bound to give reasons for its findings in accordance with the provisions of law. If, however, the parties
voluntarily choose a private person, it cannot necessarily follow that such a person also would be bound to give reasons for
the decision arrived at by him.40 A single judge of the Delhi High Court, also held that the award of an industrial arbitrator
will not be invalid merely because he has not given the reasons for his decision because there is no provision in the Act,
mandatory or directory, that an arbitrator must give reasons for his award.41The view of the Patna and the Delhi High
Courts does not appear to be correct. No doubt there is no provision in the Act which requires a labour court, tribunal or
national tribunal to state reasons for its award. All that s 16(2) requires a labour court, tribunal or national tribunal, is that
their awards ‘shall be in writing and shall be signed by its presiding officer’. Similarly, sub-s (4) of s 10A requires that the
award of an industrial arbitrator shall be signed by him. Thus, in either case there is no requirement of stating reasons.
However, in both cases, the requirement of stating reasons is implied in order to enable the scrutiny of the judicial review
of such awards. It is now well-settled that the award of an industrial arbitrator is amenable to judicial review. In Rohtas
Industries, the Supreme Court observed:

Suffice it is to say, an award under section 10A is not only not invulnerable but more sensitively susceptible to the writ lancet
being a quasi-statutory body’s decision. The absence of reasons in support of the award will shut-out the judicial scrutiny by
making it an inscrutable face of sphinx. 42

Industrial arbitration is based altogether on different principles and norms and the scope of arbitration is also not like civil
arbitration. The analogy of civil arbitration adopted by the Delhi High Court is, therefore, not apposite. The view of the
Punjab and the Madhya Pradesh High Courts is correct law. A single judge of the Madras High Court, took the view that a
person appointed to arbitrate upon an ‘industrial dispute’ in the course of conciliation proceedings under s 12(3) will not
acquire the status of an arbitrator under s 10A. He will merely be a private arbitrator. Since such an arbitrator will not be
governed by the provisions of s 10A, the exclusion of the Arbitration Act under sub-s (5) will not apply to such an
arbitrator.43In this case, the court had recorded that it was common ground between the parties that the impugned decision
was not an award following an arbitration under s 10A of the Industrial Disputes Act.

SUB-SECTION (4A): PROHIBITION OF CONTINUANCE OF STRIKES AND LOCKOUTS

This provision corresponds to sub-s (3) of s 10 of the Act. It empowers the government to prohibit the continuance of a
strike or lockout, in connection with an industrial dispute, which may be in existence on the date such dispute is referred to
arbitration. The only pre-condition to the exercise of this power is that a notification under sub-s (3A) should have been
issued. The power is, however, discretionary with the government whether or not to prohibit the continuance of a strike or
lockout in the circumstances of each case.44

SUB-SECTION (5): EXCLUSION OF THE ARBITRATION ACT

This provision specifically excludes the application of the provisions of the Arbitration Act 1940 (Act 10 of 1940)45to the
award of an arbitrator under s 10A. The effect of this is that the jurisdiction of the civil courts and the application of other

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provisions of civil law to the award of industrial arbitrator under s 10A has been barred. In other words, the scheme of this
Act does not contemplate a private arbitration outside the Act as a method of resolving an industrial dispute merely
because the parties say that the matter will be left for informal arbitration, the agreement cannot be stated to refer the
dispute to an arbitration, outside the preview of s 10A.46 In Hindustan National Glass, the Calcutta High Court held that an
application under s 30 of the Arbitration Act challenging the award of an arbitrator under s 10A is not maintainable. The
award of an industrial arbitrator is not amenable to any provisions of civil law but it is subject to the provisions of the
Industrial Disputes Act only. Section 17 requires the publication of the award of the arbitrator like the award of any other
adjudicatory authority. After such award is published, it is to be dealt with under the same provisions of the Act as the
awards of other adjudicatory authorities,viz, a labour court, a tribunal or a national tribunal.47

JUDICIAL REVIEW

In Dental Technicians, Lord Goddard CJ stated, ‘There is no instance of which I know in the books, where certiorari or
prohibition has gone to any arbitrator, except a statutory arbitrator, and a statutory arbitrator is a person to whom, by a
statute, the parties must resort’. 48 This dictum gave rise to a conflict of judicial opinion on the question ‘whether an
arbitrator functioning under s 10A was a statutory arbitrator and whether his decision would be binding on the parties’. The
Kerala High Court held that such an arbitrator is not a statutory arbitrator, because s 10A leaves the choice of arbitration
and arbitrator to the will of the parties.49 The same view was taken by the Madras High Court.50 On the other hand, the
High Courts of Bombay,51 and Patna,52 held that the arbitrator contemplated by s 10A has all the attributes of a statutory
arbitrator. However, in Engineering Mazdoor Sabha, as an obiter, the Supreme Court observed:

Article 226 under which a writ of certiorari can be issued in an appropriate case is, in a sense wider than Article 136, because the
power conferred on the High Court to issue certain writs is not conditioned or limited by the requirement that the said writs can be
issued only against the orders of courts or tribunals. Under Article 226(1), an appropriate writ can be issued to any person or
authority, including in appropriate cases any government, within the territories prescribed. Therefore, even if the arbitrator
appointed under section 10A is not a tribunal under Article 136, in a proper case, a writ may lie against his award under Article
226.53

Now, these obiter observations have been accepted as correct law by the Supreme Court in Rohtas, where Krishna Iyer J
observed:

It is legitimate to regard such an arbitrator now as part of the methodology of the sovereign’s dispensation of justice, thus falling
within the rainbow of statutory tribunals amenable to judicial review...Suffice it to say, an award under section 10A is not only not
invulnerable but more sensitively susceptible to the writ lancet being a quasi statutory body’s decision. 54

If, therefore, an arbitrator records findings based on no legal evidence and the findings are either his ipse dixit or based on
conjectures and surmises or his findings suffer from additional infirmity of non-application of mind, the award will be
quashable being perverse.55 For a complete understanding of judicial trends, which disclose not only the progressive
evolution and consolidation of the law relating to the scope of ‘judicial review’ of the awards of arbitrators appointed
under s 10A, but also of the approbation and reprobation resorted by the later judges of Supreme Court, it is necessary to
examine the decisions commencing from Air Corporation, in some detail. In that case, the facts were that the corporation
and its employees entered into an agreement whereby the parties agreed under s 10A of IDA to submit their disputes to a
committee of arbitration consisting of two representatives each of the corporation and the union with an independent
chairman of the status of a High Court judge to be appointed by the government. The agreement provided that a unanimous
agreement of the arbitrators would be binding on the parties, but failing such unanimity the decision of the chairman was
to be deemed to an award made by a single and sole arbitrator. The government of Bombay appointed Mr Vyas, a retired
judge of Bombay High Court as the chairman. During his absence from Bombay, the representatives of the corporation and
the union in the committee of arbitrators arrived at a ‘unanimous agreement’ on all demands except one, which was left to
be decided by him; and by a letter addressed to him, the representatives asked him to sign the agreement and declare the
award in terms of it. On his return to Bombay, he declined to do so till he had studied the agreement and understood its full
implications, more so as he conjectured that the union representatives had brought pressure upon the representatives of the
corporation. Thereafter, he and his wife went on an inaugural flight by a ‘Boeing’ to USA at the invitation of the
corporation and accepted substantial hospitality from the corporation. Thereafter, he came to the conclusion that the
agreement was vague and proceeded to give ‘directions’ subject to which the agreement was to be implemented. The union
filed a writ petition under Arts. 226 and 227 to set aside the chairman’s directions on the ground that he had no jurisdiction
to give them, and on the ground that he had disqualified himself as an arbitrator. The High Court rejected the preliminary
objection, ie, that there was no jurisdiction to entertain the petition under Art. 227, since the arbitration was that of a
private tribunal. Chandrachud J (as he then was), on a consideration of the provisions of ID Act, held that the arbitration

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contemplated by s 10A had all the essential attributes of statutory arbitration under s 10 of the Act, and assuming that the
word ‘tribunals’ in Art. 227 meant statutory and not private tribunals, an arbitration functioning under s 10A was a
statutory tribunal. On this view of the matter, he held that the arbitrator under s 10A was subject to the superintendence of
the High Court.56 He distinguished the English Law as expounded in Dental Technicians, wherein Lord Goddard CJ
observed:

I have never heard of certiorari or prohibition going to an arbitrator...It would be an enormous departure from the law relating to
prerogative writs if we were to apply these remedies to an ordinary arbitrator... 57

Citing the above decision, Chandrachud J of Bombay High Court (as he then was), observed (supra):

Now, in the first place, it must be remembered that in England, the issue of prerogative writs is largely conditioned by historical
reasons. Secondly, the arbitrators against whom the writ was sought in the English case were a purely private body to whom
reference was made in pursuance of a clause in the indenture of apprenticeship...The observations contained in the judgment of
Lord Goddard, CJ, that a statutory arbitrator is a person to whom by statute the parties must resort cannot be read to mean that in
no other case could a tribunal be deemed to be a statutory tribunal. The only question which arose for decision in that case was
whether a writ of certiorari or prohibition could lie against what was admittedly a private body of arbitrators and in repelling the
argument that it could, the learned Law Lord has mainly relied upon English practice.

In his commentary on the above decision, Seervai observes:

The misconduct of the chairman was so grave that it is not surprising that the court should have arrived at the result it did and
quashed the chairman’s direction. It is submitted, however, that the decision that the chairman acting under section 10A, Industrial
disputes Act, was a tribunal within the meaning of Article 227, was contrary to the decisions in Bharat Bank Ltd... and in Durga
Shankar Mehta,58...and it is submitted further that this part of the judgment must be treated as overruled by the Supreme Court in
Engineering Mazdoor Sabha v Hind Cycles ,59... Does a writ of certiorari lie to quash the award of an arbitrator appointed under
section 10A, Industrial Disputes Act, that is, an arbitration award as it is called in the Act? The question is not free from difficulty,
for the arbitrator under that section derives his authority to act, from the consent of parties in the first instance, nor is there any
legal obligation on the parties to resort to a private arbitrator. Consequently, a court in India may feel that the decision in the
Dental Technicians’ case covers an arbitration award. However, the judgments in that case show that the application for a writ of
certiorari was there designed as a short-cut to the normal procedure under the English Arbitration Act 1950, by which parties can
get an award set aside, or an arbitrator restrained from proceeding with an arbitration. The Indian Arbitration Act 1940, confers
similar rights to challenge an award or to restrain an arbitrator from proceeding further. Therefore, persons resorting to private
arbitration in England or in India do not bind themselves to accept an award, if it should be fraudulent or in excess of the
arbitrator’s jurisdiction. And yet, if certiorari does not lie in India, such acceptance must be the result of the combined effect of
section 10A(5) and section 17, Industrial Disputes Act, the first of which excludes the application of the Indian Arbitration Act,
1940; and the second of which provides that an award published under that section is not to be called in question by any court in
any manner whatsoever... a court would be justified in holding that though arbitration under section 10A of the Industrial Disputes
Act is not compulsory, and though the arbitrator derives his authority in the first instance from the consent of parties, section
10A(4) of the Act imposes a legal obligation, and confers a legal authority, on the arbitrator to decide questions affecting the rights
of subjects and having the duty to act judicially. The award is to be sent not to the parties but to the appropriate government, which
is under an obligation to publish it within thirty days. This view of section 10A(4) is justified by its plain language and harmonises
with the whole scheme of the Act which largely assimilates an arbitration award to the award of a court or tribunal constituted
under the Act so far as the making, publication and the finality attaching to the award are concerned, as also in the consequences
which flow from a failure to carry out the award. It also harmonises with the object for which the Act was enacted, namely, that the
settlement of industrial disputes is not a matter, which concerns the parties alone, but is also a matter, which concerns the State and
the public. The above considerations show that the writ of certiorari issued in the Air Corporation case, was rightly issued.60

In Rajinder Kumar Kindra,61 the facts were that the dispute relating to the dismissal of a salesman was referred to an
arbitrator under s 10A. The arbitrator held that the findings of the inquiry officer were based on no legal evidence and
therefore perverse. The management did not ask for an opportunity before the arbitrator to lead evidence afresh before him
to substantiate the charges. The arbitrator, having recorded his findings, did not pass an award of reinstatement. In the
meantime, he was elevated as a judge of the Delhi High Court. As there was no formal order from him, a second reference
was made to a retired additional district and sessions judge, Delhi, as an arbitrator, who found that the dismissal of the
workman was based on proved charges, that the inquiry proceedings were not vitiated by violation of the principles of

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natural justice etc, and passed an award stating that the workman was not entitled to relief. The workman filed a writ
petition in the Delhi High Court, which dismissed the matter in limine observing that the matter depends upon assessment
of evidence and the court cannot reappraise the same under Art. 226 of the Constitution. The workman appealed to the
Supreme Court by special leave. Desai J, having made a solemn declaration to the effect that the court was not re-
appreciating the evidence, exactly did that by minutely dissecting, as it were, the enquiry proceedings and other documents
to arrive at the conclusion that the enquiry was vitiated. Some of his observations are reproduced below:

(1) Let it be made absolutely clear...that the only misconduct imputed to the appellant was that he was negligent in keeping
the cheque book...There is not a little of evidence in support of the allegation of misappropriation or embezzlement of
funds or manipulation of accounts by the appellant...there is absolutely not an iota of evidence which could indicate that
the appellant issued any cheques himself or that he aided or abetted someone to issue the bogus cheques (para 9).
(2) Someone so minded to forge the cheque and to withdraw money from some one’s account may use anybody’s cheque
book. In such a situation, the owner of the cheque book unless he had participated in the conspiracy in any manner for
facilitating withdrawal of the amount cannot be attributed any misconduct for keeping his cheque book unattended or
not in safe custody. Therefore, first limb of charge no 3 can be rejected as per se untenable without anything more (para
10).
(3) Mr Jain contended that once Mr Kakkar came to the conclusion that the appellant was given full opportunity to
participate in the domestic enquiry, neither High Court under Art 226 nor this Court under Article 136 can sit in appeal
over the findings of the enquiry officer and reappraise the evidence. We have not at all attempted to reappreciate the
evidence though in exercise of the jurisdiction conferred by section 11A of the Industrial Disputes Act 1947 both
arbitrator and this Court can reappraise the evidence led in the domestic enquiry and satisfy itself whether the evidence
led by the employer established misconduct against the workman.
(4) This court in Workmen of M/s Firestone...,62 held that since the introduction of section 11A ...the industrial tribunal is
now equipped with the powers to reappraise the evidence in the domestic enquiry and satisfy itself whether the said
evidence relied upon by the employer establishes the misconduct alleged against the workman. It is equally well settled
that the arbitrator appointed under section 10A is comprehended in section 11A.
(5) This court in Gujarat Steel Tubes...,63 held that an arbitrator appointed under section 10A is comprehended in section 11A
and the arbitral reference apart from section 11A is plenary in scope. Therefore, it would be within the jurisdiction both
of the arbitrator as well as this Court to reappreciate evidence though it is not necessary to do so in this case.
(6) It is thus well-settled that where the findings of misconduct are based on no legal evidence and the conclusion is one to
which no reasonable man would come, the arbitrator appointed under section 10A or this court in appeal under Article
136 can reject such findings as perverse. Holding that the findings are perverse do not constitute reappraisal of evidence,
though we would have been perfectly justified in exercise of powers conferred by section 11A to do so. (para 16)

The above decision of Desai J furnishes a classic example of the extent to which judges over-reach themselves in blatant
violation of the principles enunciated by the Supreme Court to the contrary. In this connection, it is pertinent to recall the
observations of Mahajan J to the effect that the Supreme Court would not constitute itself into a mere ‘court of error’ and
substitute its decision for the determination of a tribuna1.64 In a subsequent case, the learned judge, as Chief Justice of
India, reiterated:

...the Constitution having trusted the wisdom and good sense of the Judges of this Court in this matter, that itself is a sufficient
safeguard and guarantee that the power will only be used to advance the cause of justice, and that its exercise will be governed by
well established principles which govern the exercise of overriding Constitutional power.65

Where to place the likes of Desai J, in the legal history of India, which was characterised by an uncompromising approach
of eminent judges like Justice Mahajan and others towards maintaining high standards of judicial disposition? However, an
arbitrator under this section is not a tribunal’ within the meaning of Art. 136 of the Constitution. Likewise, it is not a
‘tribunal’ within the meaning of Art. 227 of the Constitution.66 The Madhya Pradesh High Court in MG Panse v SK Sanyal
, has expressed the view that after the decision of the Supreme Court in Rohtas Industries, the earlier decision in
Engineering Mazdoor Sabha to the effect that an arbitrator functioning under s 10A is not a ‘tribunal’ within the meaning
of Art. 136 of the Constitution, does not now hold the field.67 The Mysore,68 the Madhya Pradesh69 and the Orissa70 High
Courts have taken the view that an arbitration award made under sub-s (4) based on an arbitration agreement which does
not comply with the requirements of sub-s (3) will be invalid and unenforceable. However, a Full Bench of the Madras71
High Court held that the arbitration agreement which does not comply with the requirement of sub-s (3) will not be invalid.

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Hence, the award made on the basis of such agreement will be valid. In taking this view, the Full Bench relied on the
above Bench decisions of the three High Courts. However, none of those decisions, supports the view of the Full Bench.
Apart from relying on these decisions, the Full Bench has not given any reasons of its own. The view of the Full Bench of
the Madras High Court is incorrect.

However, all these High Courts appear to have got confused, perhaps in their overenthusiasm, on the question of
jurisdiction under Art. 226. An arbitration agreement which does not comply with the requirements of various sub-sections
of s 10A cannot be deemed to be an agreement under that section. Sub-section (5) excludes the application of Arbitration
Act 1940 only to ‘arbitration under this section’. It is obvious that where the mandatory requirements of this section have
not been complied with, such agreement cannot be ‘under this section’. Where an agreement is not under this section, the
application of the Arbitration Act 1940 is not barred. Therefore, arbitration agreement between the parties which does not
comply with the requirements of sub-s (3) will not be under s 10 A and shall be governed by the provisions of the
Arbitration Act. Hence, a petition under Art. 226 challenging the validity of such arbitration agreement or of an award
made under sub-s (4) based on such an agreement, will not be maintainable. The general principles of the validity of an
arbitrator’s award apply to the award passed by an arbitrator under this section. The award is vitiated if the arbitrator is
guilty of misconduct or exceeds his jurisdiction or does not hear the parties or fails to determine an important question
referred to him to be answered. However, the award cannot be challenged on any procedural grounds or on the ground that
the arbitrator has not kept in view many particular criterion.72 In CITU, a single judge of MP High Court held that an
arbitrator functioning under s 10A is a statutory tribunal, and the question as to the jurisdiction of the High Court to
interfere with the award of an arbitrator is no longer res integra.73 In NS Giri, the facts were: the arbitrator under s 10A
passed an award enhancing the age of superannuation of the employees of Mangalore Corporation to 58 years as against
the age of 55 years prescribed under the regulations framed under the Karnataka Municipal Corporation Act 1976. The
main question was whether the award so made could be given effect to, if it were inconsistent with the statutory provisions
governing the service conditions of the employees. The Supreme Court, relying on Marina Hotel,74 and Hindustan Times,75
held that an award passed under the ID Act should not be inconsistent with the law laid down by the legislature and, if it
were so, it was illegal and could not be enforced. On this view of the matter, the Court upheld the order of the High Court
quashing the award of the arbitrator.76 Where the arbitrator proceeded illegally and decided the dispute on evidence which
is not admissible, a ground for interference has been made out.77

10 Ins by Act 36 of 1956, s 8 (wef 10-3-1957).

11 Ins by Act 36 of 1964, s 6 (wef 19-12-1964).
12 Subs by Act 36 of 1964, s 6, for “fourteen days” (wef 19-12-1964).
13 Subs by Act 36 of 1964, s 6 (wef 19-12-1964).
14 Ins by Act 36 of 1964, s 6 (wef 19-12-1964).
15 Repealed by the Arbitration and Conciliation Act 1996 (26 of 1996).
16 Gazette of India Extraordinary, dated 21 September 1955, Pt 2, s 2, p 411.
17 Andhra Pradesh Country TCM Federationn v Commr of Labour 1985 Lab IC NOC 3 (AP), per Rama Rao J.
18 Engineering Mazdoor Sabha v Hind Cycles Ltd (1962) 2 LLJ 760 [LNIND 1962 SC 337], 796 (SC), per Gajendragadkar J.
19 Cf, Sindhu Resettlement Corpn Ltd v IT (1968) 1 LLJ 834 [LNIND 1967 SC 268] (SC), per Bhargava J.
20 Sindhu-Hochtief (India) Pvt Ltd v Pratap Dialdas (1968) 2 LLJ 515 (Bom), per Tulzapurkar J.
21 Rasbehary Mohanty v PO, LC (1974) 2 LLJ 222, 226 (Ori) (DB), per RN Misra J.
22 North Orissa Workers Union v State of Orissa (1971) 2 LLJ 199 (Ori) (DB), per Patra J.
23 Engineering Mazdoor Sabha v Hind Cycles Ltd (1962) 2 LLJ 760 [LNIND 1962 SC 337] (SC), per Gajendragadkar J.
24 KM Sangh v GM, Western Coal Fields Ltd (1998) 2 LLN 604 (MP), per Kulshrestha J.
25 Ved Prakash v Ram Narain Goyal 1976 Lab IC 1375, 1377 (Del), per Yogeshwar Dayal J.
26 Russell on Arbitration, 1928, 20th ed, p 234.
27 Janardhanprasad v Chandrashekhar AIR 1951 Nag 198 (DB).
28 KP Singh v Gokhale (1970) 1 LLJ 125, 128 (MP) (DB) : ILR [1972] MP 1016 : 1969 JLJ 449, per Tare J.

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29 Aftab-e-Jadid v Bhopal SP Sangh 1985 Lab IC 164 [LNIND 1984 MP 29] (MP) (DB), per CP Sen J.
30 Gujarat Steel Tubes Ltd v Gujarat Steel Tubes Mazdoor Sabha (1980) 1 LLJ 137 [LNIND 1979 SC 464] (SC), per Krishna Iyer J.
31 North Orissa Workers’ Union v State of Orissa (1971) 2 LLJ 199 (Ori) (DB), per Patra J.
32 Moorco (I) Ltd v Govt Tamil Nadu 1993 Lab IC 1663, 1664 (Mad) (DB), per Nainar Sundaram Acg CJ.
33 Karnal Leather Karamchari Sangahtan v Liberty Footwear Co 1989 SCR (3) 1065, per Shetty J.
34 Madras Machine Tools Mfrs v Spl Deputy Commr of Labour 1980 Lab IC 329 [LNIND 1979 MAD 89], 332 (Mad) (DB), per
Mohan J.
35 DCM Clerks Assn v Mgmt CW No 1355 of 1981 (Delhi), per HL Anand J.
36 Kerala SRTC v A Kunjukrishna Pillai 1976 Lab IC 541, 543 (Ker), per K Bhaskaran J.
37 Mgmt of National Projects Construction Corpn Ltd v Workmen (1976) 1 LLJ 86 [LNIND 1975 SC 395] (SC), per Alagiriswami J.
38 Rohtak Delhi Transport Pvt Ltd v Risal Singh (1964) 1 LLJ 89, 96 (Punj) (DB).
39 MG Panse v SK Sanyal 1980 Lab IC 524, 526-27 (MP) (DB), per GP Singh CJ.
40 Rohtas Industries Ltd v Workmen (1968) 1 LLJ 710, 715-16 (Pat) (DB) : AIR 1967 Pat 224, per Dutta J.
41 Mgmt. of Daily Aljamiat v Gopi Nath Aman 1971 Lab IC 1353 (Del), per Avadh Behari Rohatgi J.
42 Rohtas Industries Ltd v Rohtas Industries Staff Union (1976) 1 LLJ 274 [LNIND 1975 SC 523] (SC) : AIR 1976 SC 425 [LNIND
1975 SC 523]: (1976) 2 SCC 82 [LNIND 1975 SC 523], per Krishna Iyer J.
43 Estates Staff Union of South India v Commr of Labour (1970) 1 LLJ 94 (Mad), per Ramakrishnan J.
44 For detailed discussion, see, notes and comments under sub-s (3) of s 10.
45 Repealed by the Arbitration and Conciliation Act 1996 (26 of 1996).
46 Spl Officer, TUCS Ltd, v S Laganathan (1986) 2 LLJ 225 [LNIND 1986 MAD 40], 229 (Mad), (DB), per Nainar Sundaram J.
47 Hindustan NG & IM Union v SN Singh (1982) 1 LLJ 168 (Cal) (DB), per Chittatosh Mookherjee J.
48 Regina v Disputes Committee of Dental Technicians [1953] 1 All ER 327.
49 ATKM Employees’Assn v Musaliar Industries Pvt Ltd (1961) 1 LLJ 81 (Ker), per Velu Pillai J.
50 Anglo-American Direct Tea Trading Co Ltd v Workmen (1963) 2 LLJ 752 [LNIND 1963 MAD 259] (Mad), per Srinivasan J.
51 Air Corpns Employees’ Union v DV Vyas (1962) 1 LLJ 31 [LNIND 1961 BOM 46] (Bom) (DB) : AIR 1962 Bom 274 [LNIND
1961 BOM 46]: 1962 (64) BOMLR 1 : ILR 1962 Bom 292 [LNIND 1961 BOM 46], per Chandrachud J.
52 Rohtas Industries Staff Union v State of Bihar (1962) 2 LLJ 420 (Pat) (DB), per Ramaswami CJ.
53 Engineering Mazdoor Sabha v Hind Cycles Ltd (1962) 2 LLJ 760 [LNIND 1962 SC 337] (SC) : AIR 1963 SC 874 [LNIND 1962
SC 337]: 1963 (6) FLR 103, per Gajendragadkar J.
54 Rohtas Industries v Workmen (1976) 1 LLJ 274 [LNIND 1975 SC 523], 279 (SC) : AIR 1976 SC 425 [LNIND 1975 SC 523]:
(1976) 2 SCC 82 [LNIND 1975 SC 523], per Krishna Iyer J.
55 Rajinder Kumar Kindra v Delhi Administration (1984) 2 LLJ 51 7 (SC), per Desai J.
56 Air Corpn Employees’ Union v DV Vyas (1962) 1 LLJ 31 [LNIND 1961 BOM 46] (Bom) : AIR 1962 Bom 274 [LNIND 1961
BOM 46]: ILR 1962 Bom 292 [LNIND 1961 BOM 46], per Chandrachud J.
57 Regina v Disputes Committee of Dental Technicals (1953) 1 ALL ER 327.
58 Durga Shankar Mehta v Thakur Raghuraj Singh AIR 1954 SC 520 [LNIND 1954 SC 97], per Mukherjea J.
59 Engg Mazdoor Sabha v Hind Cycles Ltd (1962) 2 LLJ 760 [LNIND 1962 SC 337] (SC), per Gajendragadkar J.
60 HM Seervai, Constitutional Law of India, 1993, Vol 2, 4th ed, pp 1694-96.
61 Rajinder Kumar Kindra v Delhi Administration (1984) 2 LLJ 517 [LNIND 1984 SC 267] (SC), per Desai J.
62 Workmen of Firestone TRCI Ltd v Mgmt 1973 I LLJ 278 (SC) : AIR 1973 SC 1227 [LNIND 1973 SC 430]: (1973) 1 SCC 813
[LNIND 1973 SC 430], per Vaidialingam J.
63 Gujarat Steel Tubes Ltd v GST Mazdoor Sabha (1980) 1 LLJ 137 [LNIND 1979 SC 464] (SC), per Iyer J.
64 Bharat Bank Ltd v Workmen (1950) 1 LLJ 921 [LNIND 1950 SC 4], 935-36 (SC), per Mahajan J.
65 Dhakeswari Cotton Mills Ltd v Commissioner of Income-tax AIR 1955 SC 65 [LNIND 1954 SC 149], 69, per Mahajan CJI.

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66 Engineering Mazdoor Sabha v Hind Cycles Ltd (1962) 2 LLJ 760 [LNIND 1962 SC 337] (SC) : AIR 1963 SC 874 [LNIND 1962
SC 337]: 1963 (6) FLR 103, per Gajendragadkar J.
67 1980 Lab IC 524,526 (MP) (DB), per GP Singh CJ.
68 Workmen of Madras Woodlands Hotel v KS Rao 42 FJR 223, 226 (Mys) (DB), per Chandrasekhar J.
69 KP Singh v SK Gokhale (1970) 1 LLJ 125, 128 (MP) (DB), per Tare J.
70 Rasbehary Mohanty v LC (1974) 2 LLJ 222, 226 (Ori) (DB), per RN Misra J.
71 Ramakrishna Kulwantrai Steels Pvt Ltd v Workmen (1977) 1 LLJ 382 [LNIND 1976 MAD 317], 384 (Mad) (FB), per Ramaswami
J.
72 National Projects Construction Corp Ltd v Workmen 1970 Lab IC 907, 913 (Pat) (DB), per Misra CJ.
73 Centre of Indian Trade Unions v State of MP (2002) 2 LLN 256 (MP), per Mishra J.
74 Manna Hotel v Workmen (1961) 21 LLJ 431 (SC).
75 Hindustan Times Ltd v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431] (SC) : AIR 1963 SC 1332 [LNIND 1962 SC 451]:
[1964] 1 SCR 234 [LNIND 1962 SC 451].
76 NS Giri v Corporation of City of Mangalore (1999) 3 LLN 388 (SC), per Lahoti J.
77 Eastern Coalfields Ltd v SK Mukhopadhyaya, Arbitrator (2003) 3 LLJ 1082 (Jhar .)(DB)

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER III Reference of Disputes to Boards, Courts or Tribunals

The Industrial Disputes Act, 1947 (Act 14 of 1947)

SUB-SECTION (2): ‘REFERENCE BY APPLICATION OF PARTIES

Section 10(2) makes it obligatory for the government to make reference of an industrial dispute if the parties to that dispute
apply in the prescribed form. The parties to an ‘industrial dispute’ may make a joint application or they may make separate
applications. In any case the government must be approached by the parties by means of an application in the prescribed
manner to refer a particular dispute. It is not material whether they approach by a joint application or by separate applications
as long as the subject matter of the dispute is the same. The government has to satisfy itself that the persons applying represent
the majority of each party. It is only when these two conditions are satisfied that the appropriate government would be bound to
refer the dispute.

In Poona Labour Union, a joint application was made by the workmen and the employer to the Deputy Commissioner of
Labour, Maharashtra under s 10(2) for referring the dispute for adjudication. The deputy commissioner wanted to make an on
the spot inquiry in respect of the aforesaid dispute and asked the union to produce their membership register along with the
counterfoils of receipts on a particular day. However, the union wrote back to the deputy commissioner that if there be any
doubt about the representative character of the union, the only course would be to hold a secret ballot. In other words, the union
wanted their membership register to be accepted as correct for determining the majority of the workmen of the union or in the
alternative, the secret ballot to be conducted to ascertain the wishes of the majority of the workmen for the purposes of making
the reference. As this request of the union was not acceded to by the deputy commissioner of labour, the union filed a writ
petition in the High Court for a writ of mandamus on the ground that it was mandatory for the State Government to refer the
dispute to adjudication as soon as the parties applied jointly or separately in the manner prescribed under s 10(2). The court
found that though the first condition was satisfied, viz, that the application in the prescribed form had been made but the second
condition namely, that the union represented the majority of the workmen was not satisfied. In view of the fact that the Act
does not require any rules to be made with respect to the manner in which the appropriate government has to hold an inquiry to
satisfy itself that the parties making an application under s 10(2) represent the majority of each part, it is open to the State
Government to hold such an inquiry in any manner which is in consonance with principles of natural justice. Therefore, the
government was justified to hold an inquiry under r 28A of the Bombay Industrial Relations Rules 1947 for the purpose of
ascertaining the membership of the union.25 Rule 3 of the Industrial Disputes (Central) Rules 1957 prescribes that the
application shall be in form A and shall be accompanied by a statement setting forth:

(a) the parties to the dispute;

(b) the specific matters in dispute;

(c) the total number of workmen employed in an undertaking affected;

(d) an estimate of the number of workmen affected or likely to be affected by the dispute; and

(e) the efforts made by the parties themselves to adjust the dispute.

The rule also prescribes the mode of service of the application. However this rule applies only to a reference under s 10(2) and
it does not apply to a reference under s 10(1) of the Act. The parties to an industrial dispute, desiring to have their differences
settled by an industrial tribunal, cannot themselves apply to the tribunal, but must move the appropriate government to refer the
matter to the tribunal. The government has the power to lay down the scope of the dispute requiring adjudication only in a
reference under sub-s (1), but it cannot interfere with the scope, decided by the parties themselves by agreement, in a reference
made under this provision. However, by agreeing to a joint application under s 10(2) of the Act, the employer is not estopped
from raising a preliminary objection as to the maintainability of a reference, for instance on the ground that what is referred is
not an ‘industrial dispute’ or that the concerned employee is not a ‘workman’, or that the undertaking is not an ‘industry’. An
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application in form ‘A’ does not have the effect of depriving a party of the right to raise all objections which the party would
have if the reference is under ss 10(1) and 12(5) of the Act. The observation of Bishan Narain J to the effect that ‘the employer
is not estopped from raising a preliminary objection as to the maintainability of reference’ sounds paradoxical. If the employer
has even an iota of doubt that what is sought to be referred is not an ‘industrial dispute’, why should he, in the first instance, be
a party to the joint application requesting a reference of the dispute? The very fact that he signed the application along with the
union in form ‘A’ should give rise to the irrebuttable presumption that the employer is of the opinion, and is fully convinced,
that there was an industrial dispute which required adjudication and, hence, on the same presumption, he should not be
permitted to retract from that position at a later stage. It is not as if the employer had signed the joint application under duress,
undue influence or misrepresentation! This part of the decision is manifestly wrong and deserves to be rejected as being
without any substance.26

Sub-section (2) does not explicitly lay down whether it is open to the parties to choose a particular labour court or an industrial
tribunal out of several functioning in the state and approach the appropriate government for reference to that particular labour
court or tribunal. However as the overall power is given to the government alone, it appears that it is the government’s choice
of a particular labour court or tribunal, that matters, and it is not open to the parties to select a particular labour court or tribunal
and approach the government that the same be referred to that particular tribunal. The government may, however, accept the
proposal of the parties.27 Jurisdictional objections can always be raised by anyone of the parties, because jurisdiction of the
tribunal entirely depends on existence or apprehension of an ‘industrial dispute’ as defined in the Act.28 Furthermore, the
jurisdiction of the tribunal emanates from the order of reference made by the ‘appropriate government’. Hence, if the referring
government is not the ‘appropriate government’, the tribunal will have no jurisdiction to adjudicate on such a reference. In such
cases, the general principle of law is that neither consent nor waiver can be a substitute for jurisdiction and cure the initial want
of jurisdiction. The basis of jurisdiction can always be looked into by the tribunal irrespective of the agreement of the parties to
make a joint request for reference.29 In the case of associations or unions, the requirement of majority on both the sides arises
but if the dispute is only between an employer and his employees, the requirement of majority with respect to that employer
would not arise. Upon an application being made by the parties to refer the dispute and the government being satisfied with
respect to the fact that the persons applying to it represent the majority, it is bound to refer the dispute under this sub-section.
However, this provision does not entitle anyone of the parties to an ‘industrial dispute’, to compel the appropriate government
to make a reference,30 because in such a case the reference will not be under s 10(2), it will be only under s 10(1), in which case
there is no need of an application, much less in form ‘A’. Though the requirement of making an application in the prescribed
form, viz, in form A is mandatory for a valid reference under s 10(2) of the Act,31 a reference under s 10(1) would not be
vitiated merely on the ground that an application by one of the parties in form ‘A’ was not made.32

SUB-SECTION (2)(A): SPECIFYING THE PERIOD OF ADJUDICATION

Period of Adjudication

This sub-section has been inserted by the Amending Act 46 of 1982. It requires the appropriate government to specify the
period in the order of reference of an industrial dispute, to a labour court, tribunal or national tribunal, within which it should
submit its award on the dispute to the appropriate government. From the language of this provision, it is evident that no
uniform period has been fixed by the legislature for adjudication of all sorts of disputes. It has, advisedly, been left to the
discretion of the appropriate government to specify the period of adjudication, taking into account the nature and incidence of
each particular dispute. In other words, the appropriate government has the discretion to fix the period of adjudication in each
case. The procedure for submitting the award has been prescribed in sub-rr (10) and (11) of r 10B of the Industrial Disputes
(Central) Rules 1957. No doubt this provision, subject to the discretion of the adjudicator, will ensure time bound adjudication.
However, these tribunals have their own physical limitations and constraints of time. Apart from making the adjudication time-
bound, it is necessary for the government to consider increasing the number of these tribunals, commensurate with the
workload on them. Otherwise, the pious hopes raised by this provision will end in disappointment. The Industrial Disputes Act
is a piece of social welfare and beneficial legislation aimed at amelioration of hardships of the working class by providing the
machinery for resolving their grievances by settlement and failing that, by compulsory adjudication expeditiously. The purpose
will be frustrated if the adjudication gets enmeshed in litigative marshes. In HD Singh, the court deprecated the tendency of
employers to stifle the efforts of the workmen in their legitimate claims seeking benefits under the industrial law by tiring them
out in adjudication proceedings raising technical and hyper-technical pleas and dragging industrial adjudication for years
together on such pleas. The court counselled the employers to meet the case of the employees squarely on merits and get them
adjudicated quickly for ensuring industrial peace and contended labour and exhorted the labour to reciprocate to prevent
industrial unrest.33

In a public interest litigation, the Delhi High Court directed the Central Government to constitute, for the time being, one more
industrial tribunal and two more labour courts for the Union Territory of Delhi to deal with large number of arrears and pending
references with further recommendation that the government should look into this aspect in greater depth and it may itself feel
impelled to constitute even larger number of labour courts and industrial tribunals consistent with the actual requirements and

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needs.34 In this case, the court noticed the startling number of applications and references pending before the labour courts and
the industrial tribunals which were escalating with terrific speed. In view of such a heavy work load, making the adjudication
of references time-bound is a contradiction in terms and nothing more than an eyewash. Similar situations may not be denied in
the other states of the country as well. It is, therefore, imperative to increase the number of adjudicatory tribunals
commensurate with the work load.

First Proviso: Disputes of Individual Workmen

This proviso carves out an exception to sub-s (2A). Here the legislature itself has fixed the maximum uniform period of three
months with respect to industrial disputes connected with individual workmen. It takes away the discretion of the appropriate
government to fix the period of adjudication in the order of reference. The maximum period of adjudication with respect to
disputes referred to adjudication under s 2A will be three months by virtue of this proviso. Likewise, the maximum period of
adjudication of the disputes which are connected with individual workmen though not comprehended in s 2A, have partaken
the character of industrial dispute under s 2(k) on being espoused by workmen or unions, is also three months. Apart from the
disputes relating to discharge, dismissal, retrenchment or otherwise termination of the service of an individual workman as
comprehended in s 2A, this proviso also takes the disputes connected with individual workmen relating to their service such as
suspension, leave and transfer etc; when espoused by trade unions or substantial number of fellow workmen.

Second Proviso: Extension of the Period

This proviso further gives discretion to an adjudicator to extend the period fixed by the appropriate government or by the first
proviso, for such further period as he may think fit in two circumstances, viz, (1) when the parties to the dispute whether jointly
or separately apply in the form prescribed by the relevant rules under the Act for extension of such period; or (2) for any other
reason. Even in the absence of any application by the parties for extension of time, an adjudicator has been given suo motu
power to extend the time for ‘any other reason’. However, the adjudicator is required to record his reason for such extension in
writing. This makes the order of the adjudicator reviewable. In other words, the High Court in its writ jurisdiction under Arts.
226 and 227 of the Constitution can scrutinise the legality and validity of the order on the grounds of justifiability of the
reasons recorded by the adjudicator. If the extension of period is for extraneous, irrelevant or non-germane reasons, the order
extending the period will be subject to quashing on certiorari.

Third Proviso: Exclusion of the Period of Injunctions

In reckoning the period of adjudication under this sub-section, if the proceedings before an adjudicator have been stayed by an
injunction or an order of a civil court, the period of operation of the stay shall not be taken into account. For instance, if the
period of adjudication specified in the order of reference is one year and the proceedings before the adjudicator are injuncted by
a civil court or a writ court by a stay order after three months for adjudication and the injunction of the stay continues to
operate for a period of three years, before the matter comes back to the tribunal, the period of three years during which the
injunction or stay remained operative, will not be taken into account and the computation of the period specified in the order of
reference will be as if only three months had expired.

Fourth Proviso: Abatement of Proceedings

This proviso makes it clear that any proceedings pending before an adjudicatory authority, shall not abate merely on the ground
that the period specified in the order of reference under this sub-section has expired. From this it would appear that the
requirements of a definite period is not mandatory but it is merely directory.35 This proviso must be read with the second
proviso which vests the discretion in the adjudicator to extend the period of adjudication. This proviso makes it clear that in
cases where the period specified in the order of reference expires before the order of extension is made by the tribunal either on
application of the parties or suo motu, the proceedings will not abate. From the language of this proviso it further appears that
even if the order of the adjudicator extending the period for adjudication is quashed by a writ court, still the proceedings will
not abate. It will be open to the adjudicator to sustain the extension on valid reasons or to extend the further period on valid and
justifiable reasons. The second and the fourth provisos put together takes much of the wind out of the sail of the main section, if
not make it entirely illusory. The requirements of the main section appear merely to be directory, not mandatory particularly so
when no penalty has been provided for its non-compliance or breaches.36

SUB-SECTION (3): PROHIBITION TO CONTINUANCE OF STRIKES AND LOCKOUTS

Prohibition to continuance after making the Order of Reference

The Act prohibits the commencement and continuance of strikes and lockouts in certain circumstances for achieving its object,
viz, the investigation and settlement of ‘industrial disputes’ in a peaceful atmosphere. Section 10(3) and s 10A(4A) empowers

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the appropriate government to prohibit the continuance of strikes. The pre-conditions to the exercise of the power under this
sub-section are:

(i) an ‘industrial’ dispute should have been referred to a board, labour court, tribunal or national tribunal under section 10 or
arbitrator under section l0A ; and,

(ii) on the date of the reference there should be a strike or lockout in existence in connection with such dispute.

When these two conditions are existing, the appropriate government has the power to prohibit by order the continuance of such
strike or lockout. The words ‘the appropriate government may by order’, indicate that unless the appropriate government makes
the prohibitory order, the strike or lockout will not be automatically prohibited. The power, therefore, has to be exercised by the
government in its discretion. The effect of this sub-section is that even though a strike or lockout when commenced was legal,
it would become illegal if continued after the prohibitory order under s 10(3) has been made. In a case where there is a number
of demands, if the government refers all the demands to a tribunal for adjudication, it derives its powers to prohibit a strike or a
lockout which was resorted to in connection with the points of dispute referred for adjudication.37 The words ‘which may be in
existence on the date of reference’ refer to ‘any strike or lock-out’ and not to ‘such dispute’. However, the Delhi High Court in
Edward Keventers, took the view that if out of the number of demands only some are referred for adjudication, the continuance
of the strike can be prohibited only regarding the disputes which have been referred for adjudication, the prohibition of the
continuance of the strike with respect to the matters which have not been referred to adjudication is not warranted by sub-s (3)
of s 10 of the Act. From the language of the statute, viz, sub-s (3), it is obvious that the question of the existence of an industrial
dispute is irrelevant to the exercise of power under this sub-section. What is material is the existence of a strike or a lockout.
The court has correctly noticed that the words ‘such dispute’ in the sub-section ‘indicate an industrial dispute mentioned in the
earlier part, namely, an industrial dispute referred to a board, labour court, tribunal or national tribunal under this section’.
However, the premises that ‘in order to invoke sub-s (3) of s 10, it would also have to be shown that such a dispute was in
existence on the date of reference’ and that for exercising the power in sub-s (3), it is necessary that ‘the industrial dispute had
been referred to the authority concerned under the section and the dispute was such as was in existence on the date of
reference’, are not warranted by the language or the grammar of the statute.38 The use of the words in the judgment ‘that the
dispute was such as was in existence on the date of reference’ indicates that the High Court has substituted the word ‘as’ for the
word ‘which’ after the words ‘such dispute’. The word ‘which’ occurring in the phrase ‘which may be in existence on the date
of reference’ does not refer to the words ‘such dispute’, but it refers to the words ‘any strike or lockout’. In other words, the
power of the government is to prohibit the continuance of ‘any strike or lockout...which may be in existence on the date of the
reference’. If the purpose of the legislature was to connect ‘such dispute’ with the words ‘may be in existence’ on the date of
reference, then the qualifying words should have been ‘as’ instead of the word ‘which’. Grammatically the word ‘which’
connects the words, ‘may be in existence on the date of reference’ with the words ‘any strike or lockout and not with the words,
‘such dispute’. A priori, the further conclusion of the High Court that ‘likewise the sub-section would not apply if some disputes
were in existence on the date of reference but the same has not been referred to a board, labour court, tribunal or national
tribunal’ is also not correct as it is not warranted by the plain language of the statute. According to Maxwell:

A statute is to be expounded according to its obvious meaning. In other words, unless the language is ambiguous in its literal sense or
leads to any absurdity, repugnancy or inconsistency with the other provisions of the statute, the ordinary and natural sense of the words
cannot be departed from as the words of the statute in such cases, best declares the intention of the statute.39

It is well-settled that the meaning which words ought to be understood to bear is not to be ascertained by any process akin to
speculation and the primary duty of a court is to find the natural meaning of the words used in the context in which they
occur...to give a literal meaning to the language used by Parliament unless the language is ambiguous or, its literal sense gives
rise to an anomaly or, results in something which would defeat the purpose of the Act.40 In this case the language of the statute
is quite clear and unambiguous and the ordinary and normal meanings do not lead to any absurdity or repugnancy or
inconsistency with any provisions of the Act. On the other hand, the construction put on the words of the section by the High
Court in using the word ‘as’ for the word ‘which’ after the words ‘such dispute’ leads to an absurdity.41 Strike, as contemplated
under s 10(3), is to be treated as whole, it cannot be said that there are separate and concurrent strikes relating to each one of
the demands raised by the workmen. The result of this holding is that if some demands out of the total number of demands are
referred under s 10(1), the ‘appropriate government’ will be empowered only to prohibit the strike with respect to those
demands which have been referred and it will not be empowered to prohibit the strike for the demands which have not been
referred. If that be so, the purpose of sub-s (3) would be defeated by including in the charter of demands some frivolous or
unreferable demands which the government will not refer and it would become impossible to prohibit the continuance of a
strike with respect to such frivolous or unreferable demands consequently rendering the provisions of sub-s (3) otiose. The
holding of the High Court is also repugnant to the provisions of s 23, which prohibits the commencement of strikes or lockouts
during the pendency of the proceedings and the ban on commencement of strike is complete. It will be, therefore, illogical that

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though a strike during the pendency of adjudicatory proceedings of an ‘industrial dispute’, cannot be commenced whether it
relates to the matters under reference or un-referred matters, but with respect to the matters which have not been referred, it can
be continued according to the interpretation of sub-s (3) by the High Court. This will further be repugnant to the object of the
Act itself which seeks to investigate and settle industrial disputes in peaceful and harmonious atmosphere by securing industrial
peace. If the strike commenced before the reference can be continued on the ground that some of the demands have not been
referred, the object and purpose of s 10(3) to achieve a peaceful atmosphere during adjudicatory or arbitral proceedings will be
frustrated. This decision, therefore, does not propound correct law. In appeal, the Supreme Court reproduced the text of s 10(3),
instead of construing the language of the statute, it had nevertheless gone on a tangent observing: ‘this stands to reason and
justice and a demand which is suppressed by a prohibitory order and is not allowed to be ventilated for adjudication before a
tribunal will explode into industrial unrest and run contrary to the policy of industrial jurisprudence’.42 The court took the
illustration of a situation where out of 20 demands in a charter of demands, the appropriate government referred only one
demand for adjudication and posed the question to itself as to how can this result in the anomalous situation of the workmen
being deprived of their basic right to go on strike be supportive of those 19 demands’? In posing this question the court appears
to have lost sight of the clear language of the statute which prohibits only the ‘continuance’ of any strike in connection with the
dispute which has been referred. It does not prescribe the right of the workmen to go on strike subsequently in connection with
the disputes which were not referred.

On a true construction of s 10(3), the position of law is that when there is a strike in connection with a number of demands
some of which have been referred to adjudication to an adjudicatory authority, the government has the right to prohibit the
continuance of the strike by invoking that provision. When the strike was commenced, it was in connection with the demands
in dispute. After the reference of some of the demands for adjudication, the strike does not cease to be in connection with the
referred disputes. This gives the right to the government to prohibit continuance of the strike. However, after the prohibition of
the continuance of the strike in existence at the time of the reference, the workmen may commence a fresh strike in connection
with the demands which have not been referred to adjudication, after complying with the requirements of s s 22 and 23 of the
ID Act. The Patna High Court held that where the strike or lockout is not in connection with any dispute referred for
adjudication, but is itself the subject-matter of a dispute, it would not attract the provisions of s 10(3), and it would not justify
an order of prohibition under the said sub-section.43 The words ‘in continuation of any strike or lockout in connection with such
dispute which may be in existence on the date of the reference’, have to be read with reference to the facts of each particular
case. The words ‘in connection with’ mean ‘concerning’ such dispute or ‘relating to’ such dispute. It also means ‘with
reference to’ such dispute. These words seem to be significantly wide. The connection of the dispute and the strike or lockout
may be direct or indirect or even remote. Whether the order of prohibition of the continuance of any strike or lockout relates to
the dispute or has reference to the dispute, directly or indirectly, are questions which have to be decided on the facts and
circumstances of each case.44 In order that the strike or lockout may be ‘in connection with’ a dispute, it is necessary that the
strike or lockout should be something different from the dispute itself. Therefore, an order prohibiting a strike or lockout can
only be made where such strike or lockout is in connection with a dispute, which should be, in order that the strike or lockout
might be in its connection, something different from the strike or lockout itself. On this construction of s 10(3), the Rajasthan
High Court45 has taken the view that a strike or lockout which is the subject-matter of the dispute itself, cannot be termed to be
a strike or lockout in connection with such dispute. Hence, a strike or lockout, which is itself in dispute, would not justify an
order under s 10(3) for its prohibition.

In other words, unless the government makes the order there is no statutory bar on the continuance of strike or lockout. The
Kerala High Court was of the view that the power exercised under s 10(3) is a quasi-judicial power and an order thereunder
could not be passed without giving a reasonable opportunity to all those who would be affected by the order to state and
establish their case.46 As against this, the High Courts of Delhi,47 Andhra Pradesh,48 Karnataka,49 and Bombay,50 held that it
was not necessary for the government to issue a show cause notice to the parties before passing an order prohibiting the strike
and lockouts under this provision. The latter view lays down the correct law, whereas the Kerala High Court is clearly wrong.
In Birla Tyres, the appropriate government invoked s 10(3) and issued an order prohibiting the strike, which was followed by a
letter from the Labour Commissioner to the union to refrain from strike and threatening legal action under r 20 of Trade Union
Rules in the event of failure on the part of the union. Quashing the order of the government and the communication of the
Labour Commissioner, Mahapatra J (for self and Gopala Gowda J) held that no reference of an industrial dispute was made
under s 10, and that in the absence of a reference, the order prohibiting strike was illegal and could not be sustained.51 Where
the branch of a company was closed, the prosecution launched by the government, on the ground that the company had
declared a lockout in contravention of the order passed under s 10(3), was illegal and liable to be quashed in view of the fact
that the labour court in its award did not record a finding to the effect that it was a case of lockout.52

Constitutional Validity of sub-section (3)

The discretion of the government under sub-s (3) is not un-channelled or arbitrary because it provides for the exercise of the
discretion for attaining the objects of the Act which are the settlement of industrial disputes, the promotion of industrial peace,
maintenance of production and benefit to the community in general. It cannot be assumed that the ‘appropriate government’

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will abuse its power even though the power is wide and is to be exercised in its discretion. In view of the objects of the Act, the
discretion vested in the ‘appropriate government’ cannot be said to be unfettered and uncontrolled because to make the exercise
of the powers justiciable will defeat the very purpose of it. While giving the power to the ‘appropriate government’ to prohibit
the continuance of the strikes and lock-outs, the legislature could not have foreseen every contingency or situation that would
arise and to specifically enumerate such contingencies in the Act itself. Though the statute cannot be struck down, the abuse of
power, whenever occurs, would be liable to be struck down.53

SUB-SECTION (4): JURISDICTION OF ADJUDICATORY AUTHORITIES

This sub-section delineates the perimeter of the jurisdiction of the adjudicatory authorities under the Act, viz, the labour court,
the industrial tribunal or the national tribunal to adjudicate. These authorities, hereinafter will be compendiously referred to as
‘the tribunal’. The word ‘jurisdiction’ means authority to decide,54or the ‘legal authority of a court to do certain things’. In the
context of the Industrial Disputes Act, the word ‘jurisdiction’ may be used in three senses viz:

(i) the jurisdiction by Constitution of the tribunal or the qualifications of the presiding officer;

(ii) local jurisdiction of the tribunal; or

(iii) the jurisdiction with respect to the subject-matter of the dispute. In this sense of the word ‘jurisdiction’, the tribunal may have
power to entertain a dispute, though in another sense, it may be said that it has exceeded its power in granting a relief which it
was not authorised to grant.55

An industrial tribunal is the statutory creation, viz, the Industrial Disputes Act. Hence its jurisdiction is confined by the Act, and
it follows that the tribunal will have no jurisdiction, to adjudicate upon any dispute or lis to which the Act does not apply. The
jurisdiction of the tribunal has further been limited by the provisions of s 10(4) to confine its adjudication to ‘the points
specified in the order of reference and matters incidental thereto’. In United Commercial Bank, Kania CJI observed:

Nor can consent give a court jurisdiction if a condition which goes to the root of the jurisdiction has not been performed or fulfilled. No
appearance or consent can give a jurisdiction to a court of limited jurisdiction which it does not possess...The absence of a condition
necessary to find the jurisdiction to make the award or give a decision deprives the award or decision of any conclusive effect. The
distinction clearly is between the jurisdiction to decide matter and the ambit of the matters to be heard by a tribunal having jurisdiction
to deal with the same. ... When however the question is of jurisdiction of the tribunal to make the award...no question of acquiescence or
consent can affect the decision.56

The mere fact that an objection was not taken before the tribunal, would not give it jurisdiction if it had no inherent jurisdiction.

Constitution of the Tribunal

If the tribunal is not properly constituted or the presiding officer does not possess the requisite qualifications under ss 7, 7A or
7B or suffers from any of the disqualifications enumerated in s 7C, he will have no jurisdiction to proceed with the adjudication
of an ‘industrial dispute’, even though such an ‘industrial dispute’ has been referred to him by the ‘appropriate government’ or
the Central Government.

Local Jurisdiction

The jurisdiction of the tribunal emanates from the order of reference. A reference for adjudication to a labour court or industrial
tribunal can be made by the ‘appropriate government’. Therefore if, the subject-matter of the dispute does not lie within the
local limits of the state government which makes the reference or the cause of action not arising within its territories, the
reference will not be competent and the tribunal constituted by such a state government will not be competent to adjudicate
upon such a reference.

Adjudicatory Jurisdiction

The jurisdiction of the tribunal to adjudicate upon an industrial dispute referred to it may be conveniently dealt with under the
following heads:

(i) Industrial adjudication

(ii) Subject matter

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Industrial Adjudication

(i) General Principles

Once a reference has been properly made to an adjudicatory authority, the dispute has to be resolved by it and adjudication
cannot be avoided on the ground that the workman failed to pursue another remedy. The adjudicator cannot refuse to adjudicate
upon the dispute and surrender its jurisdiction to some other authority. Though the appropriate government has jurisdiction to
refer or not to refer a dispute for adjudication, the adjudicator to whom the dispute has been referred has no discretion to decide
whether to adjudicate or not.57In the words of Mahajan J, ‘the expression “adjudication” implies that the tribunal is to act as a
judge of the dispute; in other words, it sits as a court of justice and does not occupy the chair of an administrator. It is pertinent
to point out that the tribunal is not given any executive or administrative powers’.58 However, the scope of adjudication by a
tribunal under the Act, is much wider and also in view of the increasing complexity of modern life and the interdependence of
the various sectors of a planned national economy, it is obviously in the interest of the public that labour disputes should be
peacefully and quickly settled within the framework of the Act rather than resort to methods of direct action which are only too
well calculated to disturb the public peace and order and diminish production in the country and the court should not be astute
to discover formal defects and technical flaws to overthrow settlement.59

The task of an industrial adjudicator is indeed tedious. He has to reconcile the head-on dash between the fundamental rights
guaranteed by the Constitution such as freedom of trade, freedom to practice any profession or to carry on any occupation and
the Directive Principles enshrined in the Constitution which are fundamental in the governance of the country. In addition he
has the delicate task of balancing the conflicting interests of employer, employee and the public on basic policies such as
freedom and sanctity of contract, protection of business, right to work, making training available to employees, earning of
livelihood for oneself and family, utilisation of one’s skill and talent, continued productivity, betterment of one’s status,
avoidance of one’s becoming a public charge, encouragement of competition and development of national and international
trade and avoidance of monopoly, promotion of collective bargaining and elimination of indiscipline in industry and so on. The
adjudication by the industrial adjudicators under the Act is only an alternative form of settlement of industrial disputes on a fair
and just basis.60 The Constitution has vested the powers of judicial review in the High Courts and invested the Supreme Court
with power to sit in appeal over the awards of industrial tribunals, ‘which are founded on somewhat hazy background of
maintenance of industrial peace, which secures the prosperity of the industry and improvement of conditions of the workmen
employed in the industry’.61 Industrial adjudication has also necessarily to be aware of the current socio-economic thought
around; it must recognise that in a modern welfare state, healthy industrial relations are matters of paramount importance and
its essential function is to assist the state by helping in the solution of industrial disputes which constitute a distinct and
persistent phenomenon of modern industrialised state.62 In the language of Krishna Iyer J:

Industrial jurisprudence does not brook nice nuances and torturesome technicalities to stand in the way of just solutions reached in a
rough and ready manner…Grim and grimy life-situations have no time for the finer manners of elegant jurisprudence.63

The ultimate object of industrial adjudication is to help the growth and progress of national economy and it is with that ultimate
object in view that industrial disputes are settled by industrial adjudication on principles of fair-play and justice.64The
provisions of this Act confer wide powers and jurisdiction upon the adjudicatory authorities to make appropriate awards in
determining industrial disputes brought before them. In the interest of social justice and with a view to securing peace and
harmony between the employer and his workmen, industrial adjudication may impose new obligations or abolish the old ones
or alter or modify the terms and conditions of employment, if it is thought fit and necessary to do so.65 Speaking for the federal
court, on the scope and powers of industrial adjudication in Western India Automobile Assn, Mahajan J observed:

Adjudication does not, in our opinion, mean adjudication according to strict law of master and servant. The award of the tribunal may
contain provisions for settlement of a dispute which no court could order if it was bound by ordinary law but the tribunal is not fettered
in any way by these limitations.66

In other words in deciding industrial disputes, the jurisdiction of an industrial adjudicator is not confined to administration of
justice strictly according to law.67 but it can confer rights and privileges on either party which it considers reasonable and
proper, though they may not be within the terms of any existing agreement. Therefore the tribunal, has not merely to interpret
or give effect to the contractual obligations between the parties which it considers essential for keeping industrial peace,68 but
its jurisdiction is much wider and can be reasonably exercised with the object of keeping industrial peace and progress.69 This
holding in Western India Automobile Assn was reverberated by the Supreme Court in Bharat Bank, in which Mukherjee J
observed:

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In settling the disputes between the employers and the workmen, the function of the tribunal is not confined to administration of justice
in accordance with law. It can confer rights and privileges on either party which it considers reasonable and proper, though they may not
be within the terms of any existing agreement, It has not merely to interpret or give effect to the contractual rights and obligations of the
parties. It can create new rights and obligations between them which it considers essential for keeping industrial peace. 70

In Rohtas Industries, SK Das J held:

A court of law proceeds on the footing that no power exists in the courts to make contracts for people; and the parties must make their
own contracts. The courts reach their limit of power when they enforce contracts which the parties have made. An industrial tribunal in
not so fettered and may create new obligations or modify contracts in the interests of industrial peace, to protect legitimate trade union
activities and to prevent unfair practice or victimisation.71

Now in Premier Automobiles, Untwalia J pointed out:

...the powers of the authorities deciding industrial disputes under the Act are very extensive-much wider than the powers of a civil court,
while adjudicating a dispute which may be an industrial dispute. The labour courts and the tribunals to whom industrial disputes are
referred by the appropriate government under section 10 can create new contracts, lay down new industrial policy for industrial peace,
order reinstatement of dismissed workmen, which ordinarily a civil court could not do.72

These dicta of the federal court and the Supreme Court are based on the celebrated statement of law by Ludwig Teller to the
following effect:

...industrial arbitration may involve the extension of an existing agreement, or the making of a new one, or in general the creation of
new obligations or modifications of old ones, while commercial arbitration generally concerns itself with interpretation of existing
obligations and disputes relating to existing agreements.73

This principle enunciating the scope of industrial adjudication has since been followed and adopted by the courts in the field of
industrial adjudication in India.74 The industrial adjudicators therefore, are to adjudicate upon the disputes between the
employers and their workmen and in the course of such adjudication, they must determine the ‘rights’ and ‘wrongs’ of the
claims made, and in doing so they are undoubtedly free to apply the principles of justice, equity and good conscience, without
attaching undue importance to legal technicalities and keeping in view, the further principle that their jurisdiction is invoked,
not for the enforcement of mere contractual obligations but for preventing labour practices regarded as unfair and for restoring
industrial peace on the basis of collective bargaining.75 It is for this reason that the industrial tribunals are armed with
extraordinary powers and have been entrusted with duty of adjudicating disputes of a peculiar character. Therefore, the rights
of an employer to hire labour, to dismiss the employees, to fix wages, dearness allowance, bonus and gratuity, to grant leave
facilities, housing accommodation and other amenities have been controlled and regulated by well-recognised limits placed
upon the contractual rights of the employers by the industrial adjudication. Therefore, industrial adjudication is always a matter
of making adjustment between the two competing claims.76 But, howsoever wide or flexible the scope of industrial adjudication
and the power of the adjudicator may be, it cannot exercise arbitrary jurisdiction.77 No doubt, an industrial adjudicator can
substitute a new contract if it is essential for industrial peace, but ‘it would be arrogating too much power if the tribunal were to
make an award altering a statutory provision’.78 Therefore the industrial adjudication has to proceed on the basis of certain
broad guidelines. The powers of the tribunals are derived from the statutes, which lay down the rules of the game and the
tribunal has to decide according to these rules. The powers conferred upon the tribunal have the sanction of law behind it and
are not exercisable by reason of discretion vested in it.79 The exercise of discretion itself means that something is to be done
according to rules of reason and justice, not according to private opinion but according to law and not humour. It cannot be
arbitrary, vague and fanciful but must be legal and regular.80 The tribunal cannot also ignore altogether the existing obligations
without any rhyme or reason.81 In New Maneckchowk, Wanchoo J observed:

There is no doubt, therefore, that it is open to an industrial court in an appropriate case to impose new obligations on the parties before it
or modify contracts in the interests of industrial peace or give awards which may have the effect of extending existing agreement or
making a new one. This, however, does not mean that an industrial court can do anything and everything when dealing with an
industrial dispute. This power is conditioned by the subject-matter with which it is dealing and also by the existing industrial law and it
would not be open to it while dealing with a particular matter before it to overlook the industrial law relating to that matter as laid down

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by the legislature or by this court.82

In these matters, there are no absolutes and no formula can be evolved which would invariably give answer to different
problems which may be posed in different cases on different facts. In the branch of law relating to industrial relations, in the
words of Shah J ‘the temptation to be crusaders instead of adjudicators must be firmly resisted’.83 It cannot be too strongly
stated and reinstated that every industrial dispute depends upon its own peculiar circumstances. In sailing across the sea of
industrial adjudication, more ships of justice have gone down for failure to sense the treacherous reefs of generality than for
any other reason. ‘In order that industrial adjudication should be completely free from the tyranny of dogmas or the sub-
conscious pressures of preconceived notions, it is of utmost importance that the temptation to lay down broad principles should
be avoided’.84 For, ‘vague and indefinite directions instead of fostering harmony, are likely to open up vistas for future
bickerings and disputes in their implementation’.85 The approach of industrial adjudication, has to be necessarily pragmatic,
and the tests which it applies and the considerations on which it relies would vary from case to case and would not admit of any
rigid or inflexible formula. In attempting to solve industrial disputes, industrial adjudication is generally to be reluctant to lay
down any hard and fast rules or adopt any test of general or universal application.86 It should, therefore, refrain from
enunciating any general principles or adopting any doctrinaire consideration,87 and should avoid formulating and adopting
abstract generalisations.88 Das Gupta J observed:

Nor can the tests and the principles that have been laid down be applied mechanically or by way of syllogism. A mechanical or
syllogistic approach may appear to furnish the easiest way of solving a complicated problem, but the allurement of the easy way has to
be resisted. For, while such ways are beset with risks of errors in all branches of law, they are even more unsafe and inexpedient in
industrial law, where sensitive problems of human relations have to be solved in the mist of all the complexities of modern industrial
organisation. That is why in applying the well-settled tests and principles on these problems, we have to bear in mind that while all tests
that are possible of application should be applied, the value and importance to be attached to individual tests will vary according to the
nature of the industrial activities and according to the nature of the disputes in which the problem has arisen, viz, whether it is in respect
of lay-off, retrenchment, production bonus, profit bonus or something else.89

The tribunals, therefore, should not decide abstract question of law,90 nor should they be unduly influenced by academic
questions of law, but should make an attempt to deal with the merits of each case according to its facts and circumstances.91
While adjudicating a dispute, the tribunal is not vested with the power to decide whether any statutory provision is intra virus
or otherwise. The question whether there was a rationale or logic in making the provision is not to be examined by the tribunal,
and cannot be done by It.92 In Delhi Cloth Mills, speaking of the futility of precedent in the field of industrial adjudication,
Shah J said thus:

We consider it right to observe that in adjudication of industrial disputes settled legal principles have little play; the awards made by
industrial tribunal are often the result of ad hoc determination of disputed questions, and each determination forms a precedent for
determination of other disputes. An attempt to search for principle from the law built up on those precedents is a futile exercise. To the
courts accustomed to apply settled principles to facts determined by the application of the judicial process, an essay into the unsurveyed
expanses of the law of industrial relations with neither a compass nor a guide, but only the pillars of precedents is disheartening
experience...and even generally in the settlement of disputes arising out of industrial relations, there are no fixed principles, on the
application of which the problems arising before the Tribunal or the Courts may be determined and often precedents of cases
determined ad hoc are utilised to build up claims or to resist them. It would, in the circumstances, be futile to attempt to reduce the
grounds of the decisions given by the Industrial Tribunals, the Labour Appellate Tribunals and the High Courts to the dimensions of any
recognised principle.1

An industrial tribunal is not a court of general or residuary jurisdiction but a tribunal with specific jurisdiction enumerated by
the terms of the orders of reference. In other words, it is an ad hoc tribunal with ad hoc jurisdiction to determine specific
industrial disputes.2 It should not base its conclusions on some airy view of what it considers would be a good thing for
workmen.3 In other words, the tribunal has to confine itself to the pleadings and the issues arising therefrom and it is, therefore,
not open to it to fly off at a tangent, with disregard to the pleadings and thus, reach any conclusion that it considers as just and
proper.4 It is ‘desirable that industrial adjudication should deal with problems as and when they arise and confine its decision to
the points which strictly arise on the pleadings between the parties’.5 Therefore, the best course to adopt in dealing with an
industrial dispute is to consider the facts of the case, the nature of the demand made by employees, the nature of the defence
raised by the employer and decide the dispute without unduly enlarging the scope of the inquiry. Care must be taken not to
evolve large principles which may affect the facts and circumstances which are not before the tribunal or which would tend to
prejudice issues not directly raised in the case under adjudication.6 If in the decision of the dispute, some working principles
have to be evolved, that must be done.7 Nevertheless, it may not be irrelevant to point out that in avoiding generalisations

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(however commendable), the guidance afforded by the statute through its own dictionary cannot be ignored.8 In HD Singh, the
Supreme Court remorsefully deprecated the practice of the employers to stifle the efforts of the workmen in their legitimate
claims seeking benefits under the industrial law by tiring them out in adjudication proceedings, raising technical and hyper-
technical pleas and thus, dragging on litigation for years on such pleas. The court counselled the employers to meet the case of
the, workmen squarely on merits and get them adjudicated quickly. It also advised the employers to achieve industrial peace by
evolving a contented labour and the workmen should reciprocate to prevent industrial unrest. 9 The primary duty of the
industrial tribunal is to establish peace in the industry between the employer and workmen but while settling an industrial
dispute with a view to establishing industrial peace, it should not lose sight of the interest of the industry. Any settlement of a
dispute ignoring the interest of the industry is likely to have far-reaching and detrimental effects on the workmen themselves.10

During the past half century, industrial adjudication in India, has served remarkably well. It is a striking testimony to the work,
not only of those who framed the legislation, but also and to a greater degree, of the industrial tribunal, labour appellate
tribunal, High Court and in particular, the Supreme Court whose duty it has been to interpret and apply it. Refusing to lay down
general principles because it has always conceived its function to be the adjudication of issues properly before it for decision
and confining its judgment to the facts and circumstances calling for its intervention in the dispute of the parties. The industrial
adjudication has maintained a steady adherence to the determination of the law in its application to particular facts, avoiding
political or equally vague or ill-defined standards, unaffected by considerations characterised as ‘dynamic’, yet contriving to a
remarkable degree, to infuse common sense and practical considerations into its decisions. Some topics relating to tribunal
jurisdiction which have not been dealt with elsewhere in the book are being dealt with under the following heads:

(a) Employer’s Right of Management

On the right of an employer to organise and carry on his business in any manner he likes, the following words of Hidayatullah J
in Ghatge and Patil, are noteworthy:

A person must be considered free to so arrange his business that he avoids a regulatory law and its penal consequences which he has
without the arrangement, no proper means of obeying. This, of course he can do only so long as he does not break that or any other law.
11

In Parry & Co, Shelat J observed:

It is well-established that it is within the managerial discretion of an employer to organise and arrange his business in the manner he
considers best. So long as that is done bona fide it is not competent to the tribunal to question its propriety...it is for the employer to
decide whether a particular policy in running his business will be profitable, economic or convenient and we know of no provision in
the industrial law which confers any power on the tribunal to inquire into such a decision so long as it is not actuated by any
consideration of victimisation or any such unfair labour practice.12

Acting bona fide means that the organisation or reorganisation should not be affected with the ulterior object of victimising his
employees so as to get rid of their services which would not otherwise be permissible or possible. If an employer remaining
within the four corners of law and acting bona fide organises or reorganises his business, an industrial adjudicator will have no
jurisdiction to interfere with his policy. In Hathisingh, it was held that permitting the tribunal to exercise jurisdiction to inquire
into the prudence of the employer or foresight displayed by him in organising or reorganising his business, will be fraught with
danger or unreasonableness or unfairness to the employer. It may infringe the fundamental right of the employer to carry on his
business.13

(b) Modifying Terms of Contract

As already pointed out, industrial arbitration may involve the extension of an existing agreement or the making of a new one or
in general the creation of new obligations or modification of old ones.14 In Bombay Labour Union, Wanchoo J held:

It is too late in the day now to stress the absolute freedom of an employer to impose any condition which he likes on labour. It is always
open to industrial adjudication to consider the conditions of employment of labour and to vary them if it is found necessary…unless the
employer can justify an extraordinary condition by reason, which carry conviction.15

The terms and conditions of a contract between the employer and an employee can, however, be interfered with by a tribunal
only when it is found necessary in the interest of social justice or exigencies of the situation. The tribunal cannot
indiscriminately interfere with contracts.16 In other words, the jurisdiction of the tribunal is hedged in by the requirements of

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social justice. In Orissa Cement, the Supreme Court upheld the requirement of a condition in the contract requiring that a
wireman should take the examination qualifying him to be a wireman.17

(c) Disputes covered by Standing Orders

The question whether an ‘industrial dispute’ can be raised in respect of the matters covered by the Industrial Employment
(Standing Orders) Act 1946 arose in Bangalore WCS Mills.18 Addressing the question, the court held that there was no warrant
for holding that merely because the Standing Orders Act is self-contained statute, the jurisdiction of the industrial tribunal, to
adjudicate upon the matters covered by the Standing Orders, has been abridged or taken away in any manner. It will always be
open in a proper case for the union to raise an ‘industrial dispute’, and if such a dispute is referred by the government,
concerned for adjudication, the industrial tribunal will have jurisdiction to adjudicate upon the same.

(d) Disputes relating to Service Conditions of Government Employees

In State of Bihar, it was held that the powers under Art 309 did not affect the jurisdiction of a properly constituted tribunal to
adjudicate in relation to an industrial dispute between the government servants and the state, and the industrial tribunal was not
precluded from adjudicating an industrial dispute which might have an impact either direct or indirect on the service conditions
of persons serving in the union or the state.19

(e) Jurisdiction to give Relief

Under this Act, tribunals have full powers to adjudicate upon all matters in dispute between the employers and workmen and
give adequate relief. For instance, where the dispute is with respect to the termination of service of a workman, the tribunal has
the jurisdiction to award reinstatement and back-wages if the termination is found to be wrongful.20 Industrial adjudication is
not adjudication according to the strict law of master and servant but unlike commercial adjudication, it may involve extension
of an existing agreement or making of a new one as long as it is within the scope of the reference.21 Therefore, the tribunals
have given the relief of reinstatement, bonus, gratuity, provident fund, wages, dearness allowance and various other
allowances, amenities and facilities in the course of industrial adjudication of variegated industrial disputes. The industrial
tribunals intended to adjudicate industrial disputes between the management and workmen, settle them, and pass effective
awards in such a way that industrial peace between the employers and the employees may be maintained so that there can be
more production to benefit all concerned. For the above purpose, the industrial tribunals, as far as practicable, should not be
constrained by the formal rules of law and should avoid inability to arrive at an effective award to meet justice in a particular
dispute.22 But a tribunal cannot grant relief not claimed by workmen.23 Likewise, it will have no jurisdiction to award relief in
excess of the demand of workmen.24 Nor can it grant relief with respect to disputes not referred to it because ‘it cannot proceed
to adjudicate disputes not referred’.25 On the other hand, the tribunal cannot deprive the workmen of the benefits which they
were entitled to, in making an award under the pre-existing arrangement and place them in a worse position than before the
award particularly, when the employer did not want any change in their favour.26

Once a reference is made by the government under s 10(1)(c), it is the duty of the labour court to answer the reference and not
to dismiss the same in default or for non-prosecution. If the workman has not produced any evidence or has not filed the claim
statement, it is open to the labour court to decline the reference by passing an appropriate order.27 A labour court cannot refuse
adjudication of the dispute on the ground that the reference was defective and not happily worded.28 It is not competent for the
tribunal to arrive at a finding that the reference is not maintainable only because a settlement had been arrived at with another
union, more so, when the said settlement was arrived at under s 18(1) and not s 18(3). In terms of s 18, the minority union is
also entitled to raise a dispute.29 In KGID, a single judge of Karnataka High Court held that, in a reference made by the
government even if the points of dispute are very vague and suffer from ambiguity, it is the statutory duty of the tribunal to find
out the exact dispute between the parties and adjudicate the same.30 The tribunal has power to refuse reinstatement
notwithstanding violation of s 25F and award only compensation.31 Where, during the pendency of an adjudication proceeding
relating to the transfer of 22 employees to various places, another employee was transferred by the management, he can
approach the tribunal under the original reference.32 The provisions of LIC of India (Staff) Regulations 1960 which provide for
appeal and review of disciplinary actions taken against the employees of the corporation cannot be said to bar the jurisdiction
of industrial tribunal from adjudicating the industrial dispute.33

(ii) Social Justice in Industrial Adjudication

According to Holmes J, social justice is ‘an inarticulate major premise which is personal and individual to every court and
every judge’. In Muir Mills Ltd, Bhagwati J speaking for the Supreme Court held that the concept of social justice does not
emanate from the fanciful notions of any particular adjudicator but must be founded on a more solid foundation.34 This view
was reverberated by Vivian Bose J, in JK Iron.35 In the same strain SK Das J observed that ‘...social justice does not mean that
reason and fairness must always yield to the convenience of a party—convenience of the employee at the cost of employer as in
this case—in an adjudication proceeding. Such one-sided or partial view is really next-of-kin to caprice or humor.36

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Gajendragadkar J persistently emphasised that social and economic justice is the ultimate ideal of industrial adjudication,37 and
that social and economic justice has been given a place of pride in our Constitution.38 In the words of Hidayatullah J, Social
justice is not based on contractual relations and is not to be enforced on the principles of contract of service. It is something
outside these principles, and is invoked to do justice without a contract to back it.39 In JK Cotton, Gajendragadkar J observed:

In our opinion, the argument that the considerations of social justice are irrelevant and untenable in dealing with industrial disputes, has
to be rejected without any hesitation. The development of industrial law during the last decade and several decisions of this court in
dealing with industrial matters have emphasised the relevance, validity and significance of the doctrine of social justice...Indeed, the
concept of social justice has now become such an integral part of industrial law that it would be idle for any party to suggest that
industrial adjudication can or should ignore the claims of social justice in dealing with industrial disputes. The concept of social justice
is not narrow, or one-sided, or pedantic, and is not confined to industrial adjudication alone. Its sweep is comprehensive. It is founded
on the basic idea of socio-economic equality and its aim is to assist the removal of socio-economic disparities and inequalities;
nevertheless, in dealing with industrial matters, it does not adopt a doctrinaire approach and refuses to yield blindly to abstract notions,
but adopts a realistic and pragmatic approach. It, therefore, endeavors to resolve the competing claims of employers and employees by
finding solution which is just and fair to both parties with the object of establishing harmony between capital and labour, and good
relationship. 40

In Ahmedabad Mfg, Dua J said:

This concept of social justice has a comprehensive sweep and it is neither pedantic nor one-sided but is founded on socio-economic
equality. It demands a realistic and pragmatic approach for resolving the controversy between capital and labour by weighing it on an
even scale with the consciousness that industrial operations in modern times have become complex and complicated and for the
efficient and successful functioning of an industry various amenities for those working in it are deemed as essential for a peaceful and
healthy atmosphere. 41

Thus, though industrial adjudication cannot and should not ignore the claims of social justice—a concept based on socio-
economic equality—it has to resolve the conflicting claims of employers and employees by finding not one sided but a fair and
just solution.42 In Burmah Shell, Hegde J observed:

Social security for the weaker sections of our nation is of utmost importance: but then we cannot forget the limitations under which we
are living. While we should not forget our social goals, our purpose may be defeated if we do not approach our problems in a pragmatic
way. It is one thing to settle a dispute by agreement, which affects only the interests of the parties to the agreement; it is a quite different
thing for this court to lay down a rule which will have a wider application. 43

However, in Indian Express, Krishna Iyer J has rather emotively suggested a go-by to pragmatism in the following words:

Industrial jurisprudence is not static, rigid or textually cold but dynamic burgeoning and warm with life. It answers in emphatic negative
the biblical interrogation. ‘What men is there of you whom if his son asks bread will give him a stone’? The Industrial Tribunals of
India in areas unoccupied by precise block letter law, go by the Constitutional mandate of social justice in the claims of the ‘little
people’.44

Then, in Basti Sugar Mills, the same learned judge spoke in the same strain thus:

Social justice is made of rugged stuff...Where social justice is the touchstone where industrial peace is the goal where the weak and the
strong negotiate to reach workable formulae unruffled by the rigidities and formalisms of the law of contracts, it is impermissible to
frown down the fair bonus agreement reached by the representatives of both camps and accepted by the employees in entirety...labour
law is rough hewn and social justice sings a different tune. 45

(iii) Jurisdiction on Remand

The jurisdiction of the tribunal on remand will depend on the order of remand. The High Court in writ proceedings or the
Supreme Court in appeal under Art 136 of the Constitution may order a de novo adjudication of the reference or the remand
may be for a limited purpose. This point is illustrated in ‘Western India Vegetable Products.46

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(iv) Distinction in Jurisdiction under Section 10(4) and Section 33C(2)

There is an important distinction between a reference under s 10(4), and the proceedings under s 33C(2) of the Act. In a
reference under s 10(4), the tribunal is required to confine its adjudication to the points in dispute and also matters incidental
thereto. Therefore, while in a reference under s 10, the tribunal or the labour court may adjudicate upon matters connected with
the dispute or associated with the dispute, in proceedings under s 33C(2), the jurisdiction of the labour court is confined to
compute in terms of money, any benefit due to the workmen or the amount at which the benefit claimed by them should be
computed. The legislature has not given to the labour court the Jurisdiction to adjudicate upon matters incidental to the claim
made by the workmen for any money or benefit due to them under s 33C(2). Therefore, the labour court cannot go into
incidental matters under s 33C(2). For instance, in s 33C(2) proceedings, the labour court cannot enlarge the scope of its
inquiry and proceed to adjudicate on the question of closure, the question of enforceability of the terms of settlement, the
question whether the transferor or the transferee of an undertaking is liable and also the question whether the claim of the
workmen could be enforced against the transferee.47Where industrial disputes arise between the employees acting collectively
and their employers in the manner prescribed by the Act, such disputes can be resolved only by adjudication on a reference
under s 10 and cannot be brought within the purview of s 33G. Similarly, with regard to the fact that the policy of the
legislature in enacting s 33C is to provide a speedy remedy to the individual workman to enforce or execute his existing rights,
the case of existing rights of individual workman has to be dealt with under s 33C(2).48

(v) Res judicata

The doctrine of res judicata is codified in s 11 of the Code of Civil Procedure. It means that if by any judgment or order any
matter in issue has been directly and explicitly decided, the decision operates as res judicata and bars the trial of an identical
issue in subsequent proceedings between the same parties. This principle also comes into play when by such judgment and
order a decision of a particular issue is implicit in it, that is, it must be deemed to have been necessarily decided by implication.
Explanation 4 to that section gives further recognition to the rule of constructive res judicata. In situations where the principle
of direct res judicata would not apply, the rule of constructive res judicata may bar the subsequent proceedings. In other words,
when any matter which might and ought to have been made a ground of defence or attack in a former proceeding but was not
so made, then such a matter to avoid multiplicity of litigation and to bring about finality in it, is deemed to have been
constructively in issue in the eye of law, and, therefore, is taken as decided. Section 11 generally comes into play in relation to
civil suits. It is, however, not exhaustive. Apart from codified law, the principle of res judicata has been applied in various
other kinds of proceedings and situations by courts in England and in India and other countries.49 In Nawab Hussain, the
Supreme Court dilated upon the doctrine of res judicata as under:

The principle of estoppel per rem judicatam is a rule of evidence. As has been stated in Marginson v Blackburn Borough Council
[1939] 2 KB 426, 437 it may be said to be “the broader rule of evidence which prohibits the reassertion of a cause of action”. This
doctrine is based on two theories: (i) The finality and conclusiveness of judicial decisions for the final termination of disputes in the
general interest of community as a matter of public policy, and (ii) the interest of the individual that he should be protected from
multiplication of litigation. It, therefore, serves not only a public but also a private purpose by obstructing the reopening of matters
which have once been adjudicated upon. It is thus not permissible to obtain a second judgment for the same civil relief on the same
cause of action, for otherwise the spirit of contentiousness may give rise to conflicting judgments of equal authority, lead to multiplicity
of actions and bring the administration of justice into disrepute. It is the cause of action which gives rise to an action, and that is why it
is necessary for the courts to recognise that a cause of action which results in a judgment must lose its identity and vitality and merge in
the judgment when pronounced. It cannot therefore survive the judgment, or give rise to another cause of action on the same facts. This
is what is known as the general principle of res judicata.50

There is a diffused spectrum of judicial dicta dealing with various aspects of the application of the principle of res judicata to
the orders and awards of the industrial adjudicators. Section 19(3) provides that an award of an industrial adjudicator remains
operative for a period of one year from the date on which it becomes enforceable. Then, it can be terminated by any party
bound by it by giving a notice as required by s 19(6). But unlike the decree or order of a civil court, the industrial award is not
perpetual and conclusive as it is limited to the duration for which it remains effective and in force under s 19 of the Act.51 It
continues to be binding on the parties only as long as an award remains in operation. There is, thus, a statutory bar to the
reference of an industrial dispute which is the subject-matter of an operative award. In such cases, the question of application of
the principle of res judicata does not arise. But there is no provision in the Act indicating as to when and under what
circumstances the subject-matter covered by an industrial award can be validly referred for adjudication again after the
termination of such award; whether an award given on a matter in controversy between the parties after its termination in terms
of s 19(6) after the expiry of the period of one year as postulated by s 19(3) would operate as res judicata to a subsequent
reference of the same matter for adjudication or, whether the tribunal has no option when such a matter is again referred to it
for adjudication but to proceed to try it de novo, traverse the ground again and come to a fresh decision.

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In Burn and Co, dealing with these questions, the Supreme Court held that though s 11 of the Code of Civil Procedure is
inapplicable to industrial adjudication, the principle underlying it as expressed in the maxim interest reipublicae ut sit finis
litium - which is founded on sound public policy and is of universal application being a rule ‘dictated by a wisdom which is for
all time - is applicable to the decisions of industrial adjudicators for ‘good reasons’. Venkatarama Aiyyer J observed that it
‘would be contrary to the well recognised principles that a decision once rendered by competent authority on a matter in issue
between the parties after a full inquiry should not be permitted to be re-agitated’. It was further pointed out that if ‘an
adjudication loses its force when it is repudiated under s 19(6) and the whole controversy is at large, then the result would be
that far from reconciling themselves to the award and settling down to work it, either party will treat it as a mere stage in the
prosecution of prolonged struggle, and far from bringing industrial peace, the awards would turn out to be but truces giving the
parties breathing time before resuming hostile action with renewed vigour’. However, realising that it was dealing with a case
of fixation of wage-structure which would not admit the application of the principle of res judicata in view of rise in cost of
living with the passage of time and various other transitory factors, the court added that by regarding the awards of the
industrial adjudicators to have long term operations and liable to be modified by change in the circumstances on which they
were based, the objects of the Act would be served.52 The ratio of this case is, generally the principle of res judicata will apply
to the decisions of industrial adjudicators but the awards based on prevailing circumstances such as wage-structure and
dearness allowance, etc, though normally treated to have long term operations would be liable to be modified by change in
circumstances on which they were based. In subsequent decisions,53 the court adopted this principle with respect to awards
based on prevailing circumstances such as wage-structure and dearness allowance. In Straw Board, Goswami J observed that
‘multiplicity of litigation and agitation and re-agitation of the same dispute at issue between the same employer and his
employees will not be conducive to industrial peace which is the principle object of all labour legislations bearing on industrial
adjudication’.54 In Sankar Prasad Banerjee, the Calcutta High Court observed thus:

...the principle of res judicata would be normally applicable to industrial adjudications or awards as industrial settlements are intended,
consistent with the policy of the Industrial Disputes Act 1947, to be operative for a fairly long period unless there is change of
circumstances which may be the basis of the award. In cases where the award is based on prevailing circumstances like determination of
wage structure and the like on existing price index, with the constant change of circumstances like spiraling of prices, the principle of
res judicata would be inappropriate and inapplicable. Such principle would however be applicable when the award is not based on
prevailing circumstances but on rights claimed long existing but found by the labour court as non-existent and there is no scope for any
change of the rights or in the claim of the workmen on the employer by reason of change of circumstances. In this state of affairs there
can be no dispute that in such cases, the principle of res judicata will have full application.55

In Hindustan Lever, Desai J observed that though this highly technical concept of civil justice may be kept in precise confined
limits in the field of industrial arbitration which must as far as possible be kept free from such technicalities that thwart
resolution of industrial disputes; it can safely be said that principle analogous to res judicata can be availed of to scuttle any
attempt at raising industrial disputes repeatedly in defiance of operative settlements and awards.56 In Punjab Coop Bank, the
Court upheld the validity of the application of the principle of res judicata to an issue raised in subsequent proceedings under s
33C(2) which had already been decided by a competent labour court in that regard in earlier industrial dispute.57 In Bombay
Gas, a three judge Bench of the court has gone to the extent of even applying the principle of constructive res judicata where
speaking for the Court Alagiriswami J observed:

The doctrine of res judicata is a wholesome one which is applicable not merely to matters governed by the provisions of the Code of
Civil Procedure but to all litigations. It proceeds on the principle that there should be no unnecessary litigation and whatever claims and
defences are open to the parties should all be put forward at the same time, provided no confusion is likely to arise by so putting forward
all such claims.58

In Mumbai Kamgar Sabha, the court entertained a doubt about the extension of the sophisticated doctrine of constructive res
judicata to industrial law which is governed by special methodology of conciliation, adjudication and considerations of
peaceful industrial relations, where collective bargaining and pragmatic justice claim precedence over formalised rules of
decision based on individual contests, specific causes of action and findings on particular issues.59 A single judge of the
Calcutta High Court in Deepak Puri observed:

In my view considering the purpose for which Industrial Disputes Act has been engrafted in the statute book and the socio economic
conditions of the country it would be positive injustice if the doctrine of constructive res judicata is given a narrower meaning than is
intended to subserve. The doctrine of constructive res judicata ought not and should not be restricted in its applicability.60

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Whether a matter in dispute in a subsequent case had earlier been directly and substantially in issue, between the same parties
and the same had been heard and finally decided by the tribunal, will be of pertinent consideration and will have to be
determined before holding, in a particular case, that the principle of res judicata is attracted.61 The earlier question at issue must
be relevant and germane in determining the question of res judicata in the subsequent proceedings’.62 The principle will be
applicable only when there is an express adjudication on merits of the dispute and not otherwise.63 Furthermore, in order a
decision should operate as res judicata, it must have been directly and substantially in issue in the former proceeding.64 In
Mathura Prasad, the Supreme Court held that if, by an erroneous decision, the court assumes jurisdiction which it does not
possess, its decision cannot operate as res judicata between the parties.65 In Rajendra Jha, the Supreme Court rejected the plea
of the workman that the labour court did not permit the employer to lead evidence by erroneous exercise of jurisdiction but the
court held that the labour court had the jurisdiction to decide whether to allow the employer to lead evidence or not. It might
have acted irregularly in the exercise of that jurisdiction but that is to be distinguished from the cases in which the court
inherently lacks jurisdiction to entertain the proceeding or to pass a particular order. A priori, the plea of the workman was held
to be barred by res judicata.66

In Bharat Barrel, the company decided to close down its factory on a particular date on account of non-availability of raw
material and other compelling circumstances and informed the workmen accordingly that their services would stand terminated
on account of the closure of the factory and they would be paid compensation in terms of the provisions of s 25FFF but
subsequent to the notice of closure, the workmen created a grave law and order situation and consequently, the company
decided to terminate the services of the workmen on a date prior to the date of closure. Then, the workmen raised an industrial
dispute with respect to the bona fide and validity of the closure. In this reference while upholding the validity of the closure, the
tribunal also found that all the Workers had been discharged by the company prior to the date of closure and held, ‘since the
termination of service of the Workers is not connected with the closure, the Workers would not be entitled to any compensation
due to closure’. This award remained unchallenged and became final. Thereafter, at the instance of some of the Workers,
another reference was made by the government. The employer raised an objection before the tribunal that the claim of the
Workers was barred by the principle of res judicata. In appeal, the Supreme Court held that, having allowed the finding that the
workmen had been validly discharged prior to the operation of the notice of closure to become final in the earlier disputes, it
was not open to the workmen to reagitate the same question in the subsequent industrial dispute. Accordingly, the court held
that the award of the tribunal in the subsequent reference was invalid.67

In Punjab State Coop Bank, an employee of the Punjab State Cooperative Bank was retrenched from service on payment of
retrenchment compensation and one month’s salary in lieu of notice. The workman challenged the validity by filing a writ
petition which was dismissed on merits after hearing the parties. Then, the employee raised an industrial dispute which was
referred to a labour court for adjudication which set aside the order of retrenchment and directed the reinstatement of the
workmen with continuity of service. In a writ petition filed by the employer, the Punjab and Haryana High Court held that since
the same question between the same parties had been adjudicated upon by the High Court, subsequent reference of the same
dispute was barred by the principles of res judicata. Speaking for the court, Bahri J held that when different remedies were
available and the workman chose to avail the remedy of the writ jurisdiction under Art. 226 of the Constitution and failed on
merits, he was debarred from approaching the labour court again on the same cause of action and for the same relief.68 If in the
earlier proceedings, it was held that the relief was barred by limitation under the statute of limitation, it would not operate as
res judicata to the same relief in a subsequent proceeding before an authority constituted by a different statute which does not
provide for limitation. For instance, the holding of the labour court functioning under s 26 of the Bihar Shops and
Establishments Act to the effect that the relief was barred by limitation was held not to operate as a bar in granting
compensation by the labour court in reference under s 10 of the Industrial Disputes Act. The Patna High Court inB Choudhury,
observed that for the purpose of attracting the principles of res judicata, the issues in the two proceedings must be common.
Section 10 of the Industrial Disputes Act does not prescribe any time limit, whereas s 26 of the Bihar Shops and Establishments
Act prescribes a period of limitation; hence, there can be no issue in the reference case as to whether the dispute is barred by
limitation. In the absence of an issue in respect of limitation in the reference case, the findings recorded on the question of
limitation in the proceedings under the Shops and Establishments Act, shall not operate as res judicata in the reference case.69

Some distinction of whatever shade or magnitude, may have to be borne in mind in application of the principle of res judicata
in industrial adjudication in contradistinction to civil proceedings. Extremely technical considerations, usually invoked in civil
proceedings, may not be allowed to outweigh substantial justice to the parties in an industrial adjudication. The real character
of the controversy between the parties is the determining factor and in complex and manifold human relations between labour
and capital giving rise to diverse kinds of ruptures of varying nuances, no cast-iron rule can be laid down. 70Industrial disputes
generally relate to claims of wage-structure including dearness allowance and bonus etc and other terms of employment or
conditions of labour of workmen or termination of service whether under the contract, as a measure of retrenchment or by way
of punishment for an act of misconduct. It cannot be said in all cases of industrial adjudication that a question which is once
decided can never be reagitated. For instance, there are certain classes of cases like disputes regarding wage structure, service
conditions etc which arise as circumstances change and new situations arise which may not be barred by the rule of res
judicata.71 The application of the principle of res judicata to adjudication of such disputes is discussed under the following

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heads:

(a) Wage-structure

The labour appellate tribunal was of the view that an award of an industrial tribunal dealing with wage-fixation should be taken
as binding on the parties, even after having been terminated under s 19(6), unless there was a change of circumstances. In other
words, such an award should operate as res judicata to any further reference.72 However, in Burn & Co, the labour appellate
tribunal apparently resiled from this stand with the observation that it was ‘a rule of prudence and not of law’. In this case, the
industrial tribunal had given an award fixing the pay-scales for the clerical and subordinate staff of the company in June 1950.
Exactly after one year of the publication of this award in July 1951, the workmen terminated this award in terms of s 19(6)
declaring their intention not to be bound by it and shortly afterwards, raised an industrial dispute regarding their pay-scales
which was referred for adjudication. The industrial tribunal took the view that the same question had been directly adjudicated
upon by the earlier tribunal and since there was no change in the circumstances, the pay-scales as fixed by the earlier tribunal
should not be disturbed. The labour appellate tribunal disagreed with this view and made certain alterations in the pay-scales. In
appeal, the Supreme Court on principle, disagreed with the view of the labour appellate tribunal and agreed with the view of the
industrial tribunal that in the absence of any change in the circumstances between the first award and the subsequent reference,
the earlier award should not be disturbed. It is in this context that the court enunciated the general proposition of law that the
principle of res judicata should apply to industrial adjudication. However, with respect to awards based on the prevailing
circumstances, it held that, even though such awards should be regarded as having long-time operation, they were liable to be
modified on change of circumstances on which they were based.73

In IGN Rly, dealing with an award of wage fixation while dissenting from the general rule in Burn & Co and emphasising that s
19(6) of the Act itself ‘contemplates that the award cannot be binding after it is terminated’, Wanchoo J suggested a cautious
approach in applying the principle of res judicata to ‘such matters as wages and dearness allowance’. The learned judge further
held that, if the circumstances have changed, there is a good case for a change in the award, and on this view of the matter, he
made come changes in the existing wage-structure in view of a noticeable rise in prices between the previous award and the
subsequent reference.74 In Remington, the court explained the principle enunciated in Burn & Co in the background of its
peculiar circumstances relating to wage fixation.75 However, in Balmer Lawrie, Gajendragadkar J observed that the adjudicator
would not normally be justified in rejecting the claim of the workmen for revision of wage-scales, solely on the ground that
enough time had not passed after the making of the earlier award or that material change in the relevant circumstances had not
been proved. In other words, these factors were not considered as justification to bar the claim for revision of wage-scales. On
the other hand, some other factors such as increase in the paying capacity of the employer, upward trend in the cost of living,
other anomalies, mistakes or errors in the earlier award fixing the wage-structure, the rise in the wage-structure in comparable
industries in the region, were considered as valid justification for wage-revision. The court, however, refrained from laying
down any hard and fast rule in the matter and said that the question of revision of wage-structure must be examined on the
merits in each case that is brought before the adjudicator for his adjudication. On the application of the principle of res
judicata, the learned judge held:

While dealing with the question about revision of wage-scales, it is necessary to remember that the technical considerations of res
judicata should not be allowed to hamper the discretion of industrial adjudication…It is undoubtedly true that wage-scales are devised
and wage-structures constructed as matters of long term policy, and so, industrial adjudication would naturally be reluctant to interfere
with the wage- structures without justification or in light-hearted manner. When a wage-structure is framed, all relevant factors are
taken into account and normally it should remain in operation for a fairly long period; but it would be unreasonable to introduce
considerations of res judicata as such, because for various reasons which constitute the special characteristics of industrial adjudication
the said technical considerations would be inadmissible...the principle of gradual advance towards the living wage, which industrial
adjudication can never ignore, itself constitutes such a special feature of industrial adjudication that it renders the application of the
technical rule of res judicata singularly inappropriate.76

The effect of these dicta is that when on the expiry of the time fixed by s 19(3), an award is terminated by a party under s 19(6),
it is no longer binding on the parties and will not, therefore, bar subsequent reference for fresh wage fixation on which a fresh
award is permissible on account of the changing nature of industrial problems and constant spiraling of prices.77 Lastly, the
application of the principle of res judicata is in so far as claim for revision of wages is concerned is inconsistent with the
approach of the industrial adjudication from the minimum wage towards living wage. In other words, wage structure is in the
process of metamorphosis, an evolution from the subsistence level to the living wage level and it cannot be checkmated by
introducing the technical rules like res judicata in the adjudicatory process.78

(b) Dearness Allowance

By and large, the same principles as applicable to wage revision would apply to the adjudication of dearness allowance disputes

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as well in connection with the application of the principle of res judicata but in Remington Rand (supra), Gajendragadkar J
observed that considerations which are relevant in regard to the fixation of wage-structure by an award would not be relevant in
respect of dearness allowance. In this case, a comprehensive settlement was arrived at in the year 1953 including dearness
allowance. The relevant clause relating to the dearness allowance provided for variations in the payment of the dearness
allowance with rise in the index of cost of living. Subsequently, in the year 1958 by another interim settlement, it was agreed
that the adjustment in the dearness allowance to the rise in the cost of living index will be made by the management every
month instead of every six months as was done till then. It was also agreed that the minimum dearness allowances in Delhi and
Simla would be raised from Rs 58 to Rs 60 per month. This agreement became operative from July 1958, which inter alia
provided that the parties would negotiate amongst themselves for a final settlement. In case no settlement was reached, it would
be open to the union to approach the conciliation authorities. Since the parties could not come to a final settlement in respect of
the dispute raised by the workmen, the dispute was referred for adjudication. The tribunal revised the scheme of the dearness
allowance. In appeal, Gajendragadkar J rejected the contention of the employer in the light of the comfortable financial position
of the company and the rise in the cost of living subsequent to the settlement, and held that the demand for the revision in the
rates of dearness allowance was justified. In Bengal Chemicals, certain rates of dearness allowance were fixed by an industrial
tribunal in the year 1957. This award was challenged in appeal, both by the employer as well as the workmen before the
Supreme Court. The appeal of the employer was dismissed, as no interference with the award was permissible while the appeal
of the workmen was dismissed as it was not pressed.79 Subsequently, in November 1963, a dispute relating inter alia to
dearness allowance was referred for adjudication. The tribunal rejected the contention of the company in view of the fact that
the earlier award was affirmed by the Supreme Court. Thus, it accepted the union’s contention that there should be an increase
or decrease of dearness allowance by one rupee for every five points in the cost of living index. In appeal, it was contended on
behalf of the workmen that there should have been a complete de novo examination of the claim for revision of the dearness
allowance, without being influenced by the earlier award. Repelling the contention, the Supreme Court held that the tribunal
was perfectly justified in proceeding on the basis of the earlier award for considering the nature of the revision of dearness
allowance.80

(c) Bonus

The claim of bonus is for each year. The fact that the claim of the workmen for a particular year was the subject-matter of an
earlier award will not bar the reference of a claim for bonus for a subsequent year but it is not impossible to visualise a situation
where the tribunal awards certain quantum of bonus for a particular year and after the lapse of one year, the workmen terminate
the award in terms of s 19(6) and then claim that the bonus awarded to them for that year was not adequate and seek to re-open
the award by having a further reference made for adjudication. In such a case, the general principle of Burn & Co will apply
with full force and the reference will be barred by the principle of res judicata. Even if some new points are raised to support
the claim for higher quantum of bonus they too will be barred by the rule of constructive res judicata as these points could have
been raised in the earlier adjudication.81 The application of the principle of res judicata to bonus cases appears to have been
misapprehended by a single judge of the Andhra Pradesh High Court in Varahalakshmi Rice, in which the facts disclosed that
the workmen raised an industrial dispute for bonus for the year 1953-54, 1954-55 and 1955-56, but the government referred the
dispute only for the year 1955-56. The tribunal rejected the said claim on the ground of delay as well as on merits.
Subsequently, the government referred the claim of workmen for bonus for the years 1953-54 and 1954-55. The employer
challenged this order of reference by a writ petition on the ground that the claim for payment of bonus for the years 1953-54
and 1954-55 was barred by the principle of res judicata. The High Court held that the matter of demand for bonus for the year
1955-56 having been concluded by the specific decision of the industrial tribunal, it was implicit in the finding that the claim
for bonus for the years 1953-54 and 1954-55 was also untenable and that such a finding would operate as bar to the
adjudication of the impugned reference. In taking this view, the learned judge has displayed unawareness even of the statutory
provisions. According to s 10(4) of the Act, the jurisdiction of the tribunal is confined to the points of dispute specified in the
order of reference and matters incidental thereto. The earlier reference had clearly specified the claim of the workmen for
payment of bonus for the year 1955-56 and it had no reference to the claim for the years 1953-54 and 1954-55. Hence, the
jurisdiction had to be confined only to the payment of bonus for the year 1955-56. By pleadings, the parties cannot enlarge the
scope of the jurisdiction of the tribunal which emanates from the order of reference. The earlier tribunal was incompetent to
decide the question of bonus for the years 1953-54 and 1954-55 as it had not been referred for adjudication. Hence, there was
no decision by a competent court. The question of actual or constructive res judicata would therefore, not arise.82 Dealing with
a case of rehabilitation charge in Trichinopoly Mills, Gajendragadkar J observed that the principles of res judicata could not be
strictly invoked in respect of such points though it was equally true that industrial tribunals would not be justified in changing
the amounts of rehabilitation from year to year without sufficient cause.83

(d) Discharge or Dismissal affirmed in Adjudication on Reference

The action of termination of the services of a workmen by the employer either under the contract or by way of retrenchment or
as measure of punishment by way of discharge or dismissal, may be affirmed or set aside by an industrial adjudicator in
adjudication on a reference of an industrial dispute relating to such termination of the service. In terms of s 19(3), an award

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remains in operation for a period of one year from the date on which it became enforceable. After the lapse of that period,
either of the parties bound by the award may terminate the award by giving two months’ notice to the other party under s 19(6).
By virtue of s 19(5), the provisions of s 19(3) shall not apply to any award which ‘by its nature, terms or their circumstances
does not impose, after it has been given effect to, any continuing obligation on the parties bound by the award’. An award
relating to termination of service of a workman after being given effect to does not impose any continuing obligation on the
workman or the employer. The award, therefore, becomes final and shall not cease to be operative after lapse of one year. It
cannot be terminated by a notice under s 19(6). That dispute cannot be referred to adjudication subsequently. A single judge of
the AP High Court held that, if a workman approaches the civil court for the relief of reinstatement, it would not be open to him
to invoke the jurisdiction of industrial adjudication once again by raising an industrial dispute seeking the relief of
reinstatement with back wages, merely because the civil court did not grant the entire relief sought by him.84

(e) Decision under Section 33C(2)

It is now settled law that the jurisdiction of the labour court under s 33C(2) is not of adjudicatory nature. It is merely analogous
to the jurisdiction of an executing court. Therefore, while purporting to decide the question as to the amount of money due or as
to the amount at which the benefit claimed by the workman should be computed, the labour court cannot arrogate to itself the
jurisdiction of adjudicatory authorities on a reference under s 10 of the Act. In exercise of its limited jurisdiction, no doubt, the
labour court can make an incidental inquiry into the existence of the right of the workman to claim a benefit in terms of money,
but it cannot entertain a claim which is based on the right which is the subject matter of an industrial dispute. Therefore, the
decision of the labour court in its jurisdiction under s 33C(2) will not operate as res judicata in a subsequent reference under s
10. But a single judge of the Delhi High Court in Shoba Puri, held that even a finding of fact by the labour court while deciding
a matter will not operate as res judicata.85 This view is not correct. No doubt the jurisdiction of the labour court under s 33C(2)
is not of adjudicatory nature, but in deciding certain questions of fact, it is the competent court. Therefore, it cannot be said that
the findings of fact by the labour court in exercise of its jurisdiction under s 33C(2) will not operate as res judicata if the same
questions of fact are raised in the course of adjudication proceedings before an adjudicatory authority on a reference under s 10.

(f) Other terms of employment and conditions of service

The question of application of the principle of res judicata to adjudication of disputes relating to other terms of employment
and conditions of service in a subsequent reference, would be governed by the rule, as laid down by the Division Bench of
Calcutta High Court in Sankar Prasad Banerjee.86

(g) Jurisdictional issues

In determining the question whether the principle of res judicata in a given case would apply, the heart of the matter will
always be: what was the substantial question that came up for decision in the earlier proceeding? Sometimes, additional issues
may have to be framed upon which the jurisdiction of the tribunal will depend for deciding the principal issue which has been
referred for adjudication, ie, (i) whether the dispute in question is an ‘industrial dispute’ or (ii) whether the establishment to
which the dispute relates is an ‘industry’ or (iii) the concerned employee is a ‘workman’ or (iv) whether the government
making the reference is the ‘appropriate government’?87 In Theosophical Society, a single judge of the Madras High Court held
that the question whether the activities of the industrial establishment is of an ‘industry’ is to be decided on the state of affairs
obtaining on the date of the order of reference but not on the basis of the circumstances which prevailed at the time of the
earlier decision of the High Court holding that the activities of the establishment were not of an industry. Therefore, the earlier
decision cannot operate as res judicata to subsequent reference because during the period between the last decision and the
order of reference the activities of the establishment might have undergone a change bringing it within the ambit of the
definition of industry.88 The principle of res judicata is governed by the doctrine of the competence of the court whose decision
is put forward as a bar, which requires that the decision must be given by a competent court having jurisdiction to decide the
point. An industrial tribunal is not a court of general jurisdiction to finally decide its own jurisdiction nor is it competent to
decide the question of its jurisdiction in a manner so as to exclude the judicial review to examine its assumption of jurisdiction.
In other words, an industrial tribunal will not be a ‘competent court’, when it assumes jurisdiction outside the Act under which
it acts. In these premises, a prior decision of an industrial tribunal on the question whether a firm of solicitors was an ‘industry’
was held not to operate as res judicata in a subsequent adjudication of the question by another tribunal.89 An industrial tribunal
constituted under this Act possesses a limited jurisdiction and has not been invested with the powers of general administration
to finally decide its own jurisdiction. If the tribunal, therefore, assumes jurisdiction, by an erroneous decision over a subject-
matter, which is not an industrial dispute covered by the Act, in a fresh reference, it would be open to any of the parties to say
that the previous decision was without jurisdiction. In such a case, the previous award would be of incompetent jurisdiction.
For the purpose of deciding a question which relates to the special jurisdiction, if a tribunal finds it necessary to decide another
matter, that matter does not become a matter of special jurisdiction and a decision on it would not bind the parties.

A tribunal of a limited jurisdiction may be invested with powers to deal with a subject-matter only if a certain state of facts
exists or it may be entrusted with jurisdiction also to determine the existence of such facts. In the former case, if the tribunal

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wrongly holds or assumes the existence of those facts on which its jurisdiction depends, then that decision or assumption is not
final or conclusive. Hence, the industrial tribunals do not possess power to finally and conclusively decide whether or not a
particular establishment is an ‘industry’. The earlier decision of a tribunal on a jurisdiction at fact would not, therefore, shut out
an inquiry by a reviewing court and if that court decides that the establishment is not an ‘industry’, the previous decision of the
tribunal on such an issue will not be final between the parties. If the decision of a tribunal on a jurisdictional question were to
operate as res judicata, it would mean that in every case where the tribunal assumes jurisdiction, where in fact it has none, over
a subject-matter by an erroneous decision, that will bind the parties for all times to come. It is open, therefore, to a party in a
subsequent proceeding to say that the previous decision of the tribunal, being a decision on collateral or jurisdictional fact by
the tribunal of limited jurisdiction, is not conclusive.90 Hence, a previous award of an industrial tribunal erroneously deciding a
jurisdictional issue would not operate as res judicata barring a subsequent reference or the Constitutional remedy of judicial
review.91 For instance, the decision of a tribunal in a prior reference on a question as to whether an establishment to which the
dispute relates falls within the definition of ‘industry’ cannot operate as res judicata.

Where an organisation consists of several units, the decision of a tribunal with respect to a particular unit that it falls within the
definition of ‘industry’ or not would not operate as res judicata in a subsequent reference with respect to another unit.92 A
single judge of the Calcutta High Court in Walford Transport, held that the decision of a tribunal in an earlier decision on the
jurisdictional fact as to whether the employee concerned fell within the definition of ‘workman’ would constitute res judicata
in a subsequent reference.93 In Rajagopal Transport, the Madras High Court held that the decision of an industrial tribunal on
the merits of a dispute after holding that it has no jurisdiction, if affirmed by a writ court, will operate as res judicata to a
subsequent reference.94 This decision is not correct as it goes beyond the scope of writ jurisdiction while dealing with
jurisdictional issues. Any decision of a tribunal beyond its jurisdiction is a nullity. It cannot either be affirmed by the reviewing
court nor can it be within the jurisdiction of such court to deal itself with the adjudication of the dispute, which the tribunal
itself had no jurisdiction to decide. The jurisdiction of the writ court is confined only to see whether the tribunal had
jurisdiction. It cannot itself assume the role of an industrial adjudicator. In Indodan Milk Products, a single judge of Allahabad
High Court held that if a dispute has been settled by settlement in the course of conciliation proceedings or otherwise, the
industrial tribunal or the labour court will have no jurisdiction to adjudicate on the same because such a settlement is binding
on the management as well as the union of which the workmen with respect to whose termination of service, the dispute
relates.1

Subject-matter

An industrial tribunal is the creation of statute. Hence its jurisdiction is circumscribed by the Act. Its adjudication must,
therefore, be confined to the perimeter of the provisions of the Act. It cannot dispense its own brand of industrial dispute. It
may, of course look for guidance, to various sources, yet its award is legitimate only so long as it draws its sustenance from the
order of reference. Section 10(4) lays down that the adjudication by the tribunal is to be confined only to:

(i) the points specified in the reference; and,

(ii) the matters incidental thereto.

(i) The Points Specified in the Order of Reference

The industrial tribunal is not a court of general and residuary jurisdiction, but is a tribunal with specific jurisdiction
circumscribed by the terms of an order of reference.2 The scheme of the Act is that a tribunal constituted under the Act has to
determine the dispute referred to it. In other words, unlike an ordinary civil court, a tribunal has no general or inherent
jurisdiction in any class of matters. It can have no power or authority whatever to deal with a dispute beyond that which can be
derived from or traced to ss 7, 7A, 10H and 15 of the Act. Before the tribunal can acquire jurisdiction in any particular case, the
‘industrial dispute’ must be referred to it by the ‘appropriate government’ and its jurisdiction is limited to the dispute so
referred.3 For instance, in Manabendra Choudhury, a single judge of the Calcutta High Court held that after a workman resigns
from his job during the pendency of the adjudication proceedings no dispute with respect to ‘non-employment’ of the workman
was left before the tribunal. Therefore, the tribunal could not have embarked on a field of inquiry as to the factum of such
resignation even for the purpose of computation of the benefits arising out of the decision on the main portion of the issue
referred to it because the tribunal cannot travel beyond the ambit and scope of the issue specifically referred to it for
adjudication. In the circumstances of the case, the court remanded the matter to the tribunal for answering the consequential
part of the issue relating to the relief to which the petitioner would be entitled.4 Where a dispute relating to payment of wages to
certain Workers was not referred, such dispute cannot be validly entertained by the adjudicator and any award determining such
dispute will be without jurisdiction.5 The functions of a tribunal are quasi-judicial but it is not a civil court. It does not have the
inherent power to decide any of the disputes raised by the parties in their pleadings beyond reference. Its jurisdiction is limited
and restricted only to the issues referred to it by the appropriate government by an order of reference.6In other words, the
tribunal has to function within the limits imposed upon it by the statute and has to act according to its provisions.7 In

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adjudicating upon an ‘industrial dispute’, the tribunal cannot allocate to itself powers which the legislature alone can confer or
do, something which the legislature has not permitted to be done. The tribunal acquires jurisdiction to adjudicate upon an
‘industrial dispute’ only after it has been referred to it. In other words, without such a reference, the tribunal does not get any
such jurisdiction to adjudicate upon any dispute.8

In adjudicating upon an industrial dispute, the tribunal must look at the order of reference itself as it is only the subject-matter
of reference with which the tribunal can deal with.9 The tribunal cannot go beyond the terms of reference.10 Where in an order
referring an industrial dispute to a tribunal under s 10(1) or in a subsequent order, the government had specified the points of
dispute for adjudication, the tribunal shall confine the adjudication to those points and matters incidental thereto. It would,
therefore, appear that while it is open to the ‘appropriate government’ to refer the dispute or any matter appearing to be
connected therewith for adjudication, the tribunal must confine its adjudication to the points of dispute referred and the matters
incidental thereto. The government may not always specify the points upon which a reference is made; it may make a reference
generally. In most cases, the order of reference is so cryptic that it is impossible to cull out therefrom the various points about
which the parties were at variance leading to trouble. In such cases, of course the tribunal can ascertain the points of dispute
from the pleadings of the parties to find out the exact nature of the dispute and decide them. Section 10(4) permits the tribunal
to decide only disputes or points referred to it and matters incidental thereto.11 The points of dispute should, therefore, be
carefully formulated and should be so worded as to avoid ambiguity or prejudice or advantage to one or the other party to the
dispute.12 The order of reference by which an industrial dispute is referred to the tribunal for adjudication gives jurisdiction to
the tribunal to deal with the merits of dispute.13 However, what are the merits of a dispute, would depend on the nature of the
reference and the specific questions referred to adjudication.14 The jurisdiction of the tribunal being limited to the matters
referred to it by the government, it would have no right to travel outside the reference, and proceed to adjudicate the matters not
referred to it.15 The legal position is that mere wording of the reference is not decisive in the matter of tenability of reference. It
may contain the defence or may not. If the points of difference are not discernible from the material before the court or tribunal,
it has only one duty, and that is to decide the points on merits and not to be astute to discover formal defects in the wording of
the reference. In other words, inelegant or clumsy wording of the order of reference will not justify short-circuiting the
reference by ignoring the basic background of the dispute and subjecting the workman to unnecessary misery and hardship in
moving the administrative machinery all over again after a long time.16 However, the tribunal has to confine itself to the
pleadings and the issues arising therefrom and it is not open to it to fly off at a tangent disregarding the pleadings and reach any
conclusion that it deems just and proper.17

In Delhi Cloth Mills, the Supreme Court pointed out that the tribunal can look into the pleadings of the parties to find out the
exact nature of the dispute, but it cannot allow the parties to go a stage further and contend that the foundation of the dispute
mentioned in the order of reference was non-existent and that the true dispute was something else. In other words, once a
reference is made to the tribunal, the parties cannot be permitted to make out an entirely new case than the one which was
raised by it and which alone the appropriate government was persuaded to refer for adjudication. An industrial adjudicator
dealing with a reference made to it has no general or inherent jurisdiction to cover all matters which a party might raise before
it for the first time and its jurisdiction is limited only to the dispute referred to it. 18. In Uttar Pradesh SEB, the facts were: a
dispute relating to dismissal was raised by the contract Workers alleging that, the contractor not being a registered contractor,
they should be treated as being directly employed by the State Electricity Board. The tribunal passed an award directing that all
the Workers should be absorbed as regular staff of the State Electricity Board. Quashing the award, a single Judge of Allahabad
High Court held that it was only the government, which had the powers to abolish contract labour, and not the tribunal.19

The High Courts of Madras,20 Delhi,21 Mysore,22 Madhya Pradesh,23 and Bombay,24 held that the tribunal was not at liberty to
enlarge the scope of the reference. Even if a reference is made on an incorrect assumption, it is not open to the tribunal to
enlarge, by its own choice, the scope of the reference and widen the issues for decision and the field of inquiry. In Indian
Oxygen, certain disputes were referred to adjudication on a joint application under s 10(2). The notification of reference stated
that ‘an industrial dispute exists or is apprehended between the management of Indian Oxygen Ltd, Jamshedpur and their
workmen represented by Indoxco Labour Union, Jamshedpur regarding the matters specified in their joint applications dated 7
September 1963’. The notification thus made it clear that the disputes referred to the tribunal were disputes set out in the said
agreement and statements and were between the management of the company’s factory at Jamshedpur and their workmen
represented by the Indoxco Labour Union. However, in view of the amendment of the Constitution of the union, the tribunal
made its award applicable to all workmen employed in the various establishments of the company in the state of Bihar. In
appeal, the Supreme Court held that the award made by the tribunal must necessarily be confined to the disputes referred to it,
the parties to those disputes and the parties who had agreed to refer those disputes for adjudication.25

In Jaipur Udyog, it was held that, it was not open to the tribunal to enlarge the ambit of the dispute between the parties by
reference to difference in the age of superannuation under two sets of Standing Orders relating to two different establishments
owned by the same employer.26 In Firestone, the court observed that the plea for reinstatement of the workmen was based on
the alleged invalidity of the action taken by the management in dismissing these workmen. Therefore, the issue of unfair labour
practice or discrimination by reason of subsequent reinstatement on permanent basis of some workmen was not a matter

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referred to the tribunal for adjudication nor was it in any way connected with or incidental to the right of reinstatement. Hence,
the plea of unfair labour practice or discrimination was altogether an independent question. Therefore, it held that the tribunal
travelled outside the jurisdiction in recording a finding of unfair labour practice and discrimination.27 In Central Inland Water,
the Calcutta High Court held that the question whether the corporation was the ‘successor’ of the company was beyond the
scope of reference and in the circumstances of the case, hence the determination of this question was beyond the jurisdiction of
the tribunal.28 However, there is nothing in s 10(4) or any other section of the Act specifying the duties of the tribunal and
requiring it to adjudicate upon the points in the order of reference which have been given up by the workmen through their
union without any allegation that they were unfairly given up because it is impossible for any tribunal to adjudicate upon any
point of dispute without evidence on record and those who give up the dispute are hardly likely to produce any evidence.29 In
EID Parry, the Madras High Court held that an industrial tribunal is a ‘court’ within the meaning of the Interest Act 1978.
Therefore, the tribunal has the jurisdiction to grant interest on bonus awarded to the workmen from the due date as the tribunal
has wider powers than a civil court while adjudicating an industrial dispute. The fact that the Interest Act 1978 which came into
force in the year 1981 is not applicable, is immaterial.30 In HPCL, the Andhra Pradesh High Court held that a declaration by the
tribunal, that casual Workers were entitled to wages on par with regular Workers, was illegal and was beyond the terms of
reference. The Bench further observed that such a declaration could not also be said to be a decision on a matter incidental to
the point referred to it by the government.31 Where the dispute referred was ‘whether the management of the Bank was justified
in terminating the services of the employee, while engaging a fresh hand in his place was justified’, the award of tribunal
directing reinstatement with full back wages and attendant benefits to the workman was beyond the scope of reference, as the
terms of reference did not contemplate relief of reinstatement to the workman.32

(ii) ‘Matters Incidental Thereto’

The word ‘incidental’ means according to Webster’s New World Dictionary: ‘Happening or likely to happen as a result of or in
connection with something more important: being an incident; casual, hence, secondary or minor, but usually associated’.
Mitter J held:

Something incidental to a dispute must, therefore, mean something happening as a result of or in connection with the dispute or
associated with dispute. The dispute is a fundamental thing while something incidental thereto is an adjunct to it. Something incidental,
therefore, cannot cut at the root of the main thing to which it is an adjunct.33

A point is incidental to another point when the former necessarily depends upon the other.34 ‘Incidental’ implies a subordinate
and subsidiary thing related to some other main or principal thing requiring casual attention while considering the main thing.35
It is obvious, therefore, that the matters which require independent consideration or treatment and have their own importance,
cannot be considered as ‘incidental’. The words ‘matters incidental thereto’ should not be interpreted so as to give vague and
indeterminate jurisdiction to the tribunal, especially over independent matters.36 A matter which is independent in one context,
may become subsidiary in another matter in a different context. It all depends on how and under what circumstances it arises.
In other words, the question whether the adjudication of one matter is incidental to the adjudication of another matter depends
on the facts of the case, the pleadings of the parties and the issues which properly arise for determination on the pleadings.37
The words ‘incidental thereto’ in s 10(4) do not have the same meaning as the words ‘appearing to be connected with or
relevant to’ occurring in cll (b), (c) and (d) of s 10(1). The matters covered by the latter expression must be specifically referred
for adjudication, while the matters covered by the former expression need not be specifically referred as they can be
adjudicated upon as a part of the main dispute. For instance, on an industrial dispute being referred to it, the tribunal has
jurisdiction to determine whether on the facts placed before it, an ‘industrial dispute’ within the meaning of s 2(k) has really
arisen, or the concerned persons are ‘workmen’ as defined in s 2(s) or a particular undertaking is an ‘industry’ within the
meaning of s 2(j) or such industry is a live industry or a closed industry. Such questions can be validly examined and
adjudicated upon by the tribunal as matters incidental to the points of dispute specified in the order of reference. These matters
have not only to be determined as matters incidental to the dispute but have necessarily to be determined as collateral or
jurisdictional issues, as the jurisdiction of the tribunal depends upon such determination, or adjudication.38 Some of the matters
held to be ‘incidental’ and ‘non-incidental’ have been discussed in the following paragraphs:

(a) Incidental Matters

In view of the words ‘incidental thereto’ appearing in s 10(4), interim relief of compensation pending application under s 33
can be granted by the tribunal, being ‘incidental’ to the main question without being itself referred in express terms.39 The
question of grant of interim pay and allowances is incidental and ancillary to the main relief of ‘payment of wages and
allowances, etc’. It is not necessary to specify the relief in the order of reference.40 If for the purpose of deciding a bonus claim,
it is necessary to determine whether the employer employed certain persons, the tribunal has the power and duty to determine
the question. The question, therefore, whether the persons claiming bonus are workmen or not is an incidental question to the
main dispute.41 In a dispute in relation to a claim for gratuity and compensation for the past services rendered by workmen

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referred for adjudication, it was held that the reference was not confined to the claim for gratuity for the past services only, but
also included the fixation of a scheme of gratuity which could come into force at a future date, as such fixation of a scheme of
gratuity is a matter incidental to the claim of the workmen for gratuity.42 Where the question referred to an industrial tribunal
was ‘whether the existing rates of basic wages in a particular concern needed any revision’, it was held that the reference
authorised the tribunal to introduce ‘time-scales of wages’.43 In an order of reference, the industrial dispute was mentioned to
be existing ‘between Kirloskar Bros Ltd Kirloskarwadi and its Workmen’, it was held that the order of reference included not
only the workmen of the machine factory at Kirloskarwadi but also those employed in that company’s press which was
formerly at the place, but before the date of reference had been shifted to Pune. The name of the place was clearly descriptive
and included the workmen working there and also at Pune. It was, therefore, held, that the tribunal should first have decided the
pleas of the company that the press was a separate and independent business, as an incidental question.44

A provision in an award that certain persons shall not be deemed to be workmen was held to be incidental to the point of
reference.45 The determination of the cadre of each category of workmen regarding permanency of servants was not only a
matter incidental to the point referred, ie, ‘rules regarding permanency of servants’ but was also absolutely necessary.46
Fixation of scales of pay was held to be ‘incidental’ to fixation of grade, of pay.47 The demand of the workmen included
revision of overtime for workmen covered by issue no 1 and revision of the scheme of payment of overtime with directions for
additional payment in respect of workmen covered by issue no 2. The references were actually made by the government in
pursuance of an agreement. The ad hoc arrangement that was arrived at in order to overt the strike was a matter incidental to
the reference which had to be made to the industrial tribunal in pursuance of that agreement. In deciding as to what should be
the payment for over-time in future under the award, the tribunal had to consider whether it would be justified to continue the
ad hoc payments and convert them into regular pay because of the claim of the workmen: it was held that there was no ground
at all for enhancing the overtime rates over and above those payable prior to the agreement. The Supreme Court upheld that
competency of the tribunal in holding that these ad hoc payments need not be made in future, as incidental matters to the issues
under reference.48 The question before the tribunal was regarding the adjustment of the workmen in the different grades which
were recommended by the central wage board and the effect to that fixation was to be given retrospectively, Hence, it became
necessary for the employer to raise the issue that if the workmen are to get the benefit of the new grades with retrospective
effect, then whatever the overtime wages and the bonus they had already received shall not be increased according to the
increase in the wages under the agreement. It was held that this matter was undoubtedly incidental to the increase of wages in
accordance with the new grades in which the workmen were to be fixed Up.49 The question of adjustment or otherwise payment
of ad-interim bonus was held to be incidental to the dispute relating to the payment of bonus for a particular year.50 The
question whether the workmen concerned were the employees of the company or its contractor can be decided by the tribunal
as incidental to the main question where the termination of the service was legal and valid.51

(b) Matters Non-incidental

In a dispute between the workmen and the management of Airlines Hotel, one of the demands of the workmen was ‘inspection
of the company’s account books, bills and receipt-book, etc, to ascertain the correct amount collected by the management and
due to the Workers’. The government referred all the demands but refused to refer this demand. The tribunal still gave direction
to the employer ‘to give access’ to the Workers to the account books. Held that the direction was without jurisdiction as the
government had in terms refused to refer the dispute regarding inspection of accounts. There could be no justification for the
direction for what could not be done directly because of the refusal of the government, could not be done indirectly on the plea
that it was incidental.52 In Express Beedi Factory, the question referred to the tribunal was related to ‘leave’, ‘wages’, etc,
which question could arise only in a going concern. The tribunal, however, found that the concern had closed down before it
started the proceedings, and awarded compensation for closure under s 25FFF, a point not referred to it. It was held that the
jurisdiction of the tribunal being confined to the matters referred to it by the government, it would have no right to travel
beyond the reference and to proceed to adjudicate upon matters not referred to it. The fact that the tribunal proceeded at the
invitation of the parties would make no difference to the competence of the tribunal to adjudicate upon the question.53 Where
the reference read as ‘whether leave facilities should be increased, and if so, to what extent?’, the industrial tribunal would have
no jurisdiction to fix the quantum of festival holidays, as it would be beyond, the ambit of the reference, ‘holidays’, being
entirely different from ‘leave’ facilities.54

The issues referred to the tribunal for adjudication related to the question of justification in the increase of workload. The
tribunal granted an interim relief passing an interim award directing continuance of the increased workload on payment of
higher wages. The question of wages, in the circumstances, was considered to be wholly independent and foreign to the
question referred to the tribunal. It was held that such a matter could not be considered to be a matter incidental to the issues
referred for adjudication within the meaning of s 10(4) of the Act.55 The question referred to the tribunal was whether a
workman should be reinstated. The tribunal found that he was not entitled to be reinstated but as a matter ‘incidental’ to the
dispute, it awarded certain compensation to the workman. The labour appellate tribunal not only confirmed the decision of the
industrial tribunal but also increased the quantum of compensation. In writ proceedings, the Calcutta High Court held that
where a specific issue is referred, the tribunal must confine itself to that issue and it is not called upon to exercise general

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jurisdiction and adjust disputes between the parties, it was further observed that compensation for wrongful dismissal or loss of
service is a completely different thing; it does not arise because a man is reinstated, but because he is not reinstated.
Furthermore, it was a complicated matter to be worked out on evidence which had not been led in this case, as no issue arose.
The matter decided was neither ‘incidental’ nor related to the dispute.56 In a reference, the question was as to what should be
‘the service conditions of 59 female Workers’. Before the tribunal, the Workers claimed that the wages should be paid
retrospectively. The tribunal rejected the demand for ‘retrospective’ wages. In writ proceedings against the award of the
tribunal, the High Court observed that on proper construction the expression ‘incidental matters’ referred to prospective and not
retrospective matters, unless the actual terms of reference either expressly or by compelling and necessary implication, gave
jurisdiction to the tribunal to pass orders retrospectively.57

The claim of a company by way of damages on account of an illegal strike which was not referred in the order of reference for
adjudication inter alia on the question whether the strike was illegal, could not be treated as ‘incidental’ to the main question.
The labour appellate tribunal held that the scope of adjudication was entirely limited and determined by the reference and it
was not open to any tribunal to travel outside the same and to decide the question on fanciful notions of social justice.58 The
question of retrenchment could not be adjudicated upon, being an incidental question to the main question whether the ‘non-
absorption’ of certain workmen was justified.59 One of the demands referred to a tribunal was for ‘fixation of working hours’.
After fixing the working hours, the tribunal went a step further and awarded that if the employees were asked to do overtime
work, then the employer would have to pay overtime allowance at a particular rate. However, the question of payment of
overtime work was not referred. In a writ petition against the award, it was held that the direction was beyond the scope of the
reference in view of the language of s 10(4) of the Act.60 The order of reference was, ‘whether the demotion of a particular
workman is justified? If not, is he entitled to the post of fitter-mate or any other relief in lieu thereof?’ The labour court found
that there was no demotion in fact but directed reinstatement of the concerned Worker as a fitter-mate holding that his transfer
was actuated by malice on the part of the manager. It was held that the tribunal exceeded the scope of reference as the question
considered by the labour court was not incidental to the alleged demotion.61

The changing of designations to fit-in with, particular type of work which the Workers have to perform, is a matter which
cannot be said to be incidental to or to be logically dependent on the question of revision of wages.62 The point of provident
fund was not held to be incidental to the retrenchment compensation. The question whether any amount should be added to the
provident fund account of a retrenched workmen is not incidental to the dispute relating to the validity of retrenchment and the
compensation payable to the retrenched workman.63 The question of amalgamation of dearness allowance cannot be considered
to be incidental to, ‘increase of wages’, as it raises specific and distinct issues some of which might be of a far-reaching effect
in the concerned region. Increase of wages is a very different matter, as such an increase would not necessarily comprise even
incidentally the question of amalgamation of dearness allowance with basic wages. For considering such a question there must
be a specific reference.64 Where a dispute related to the demand of the workmen for abolition of the contract system in the
sphere of chassis delivery work and absorption of the convoy leaders, drivers, as regular Workers and the terms of reference
did not include the determination by the tribunal as to whether there was any retrenchment and if there was any retrenchment,
whether proper retrenchment notice was given. Held, the questions relating to retrenchment were not incidental to the points in
dispute referred for adjudication.65 Where the order of reference itself stated the designation of the concerned workmen and the
only question referred for adjudication was, whether the workman was entitled to higher grade and scale of pay, it was held that
on the terms of reference the question of designating the workman did not arise and it could not also be said that it was a matter
incidental to the point referred for adjudication.66 Where the appropriate government referred certain specific disputes but did
not refer the dispute as to the date or dates from which the workmen of a particular section became the employees of the
company, it was held that the disputes relating to the date or dates of employment of such workmen could not be decided as
matters incidental to the specific disputes referred for adjudication.67 Where the claim for bonus payable to the operatives of the
company was referred for adjudication, it was not open to the tribunal to widen the scope of the inquiry beyond the terms of
reference by entertaining individual applications by the clerical staff of the company for bonus.68 In a case where the demand
for reinstatement was based on the alleged invalidity of the action taken by the management in dismissing the workmen, the
issue of unfair labour practice or discrimination by reason of subsequent reinstatement on permanent basis of some of a
workmen was not a matter referred to the tribunal for adjudication nor was it in any way connected with, or incidental to, the
right of reinstatement, it was held that the tribunal travelled outside its jurisdiction in recording a finding of unfair labour
practice without even framing an issue on the alleged unfair labour practice and discrimination, as unfair labour practice and
discrimination was altogether a different question.69

(iii) Construction of the Order of Reference

The scope of reference is a matter of considerable importance. Although it is open to an adjudicator to follow his own
procedure, he has to confine his adjudication to the points of dispute specified in the order of reference and to matters
incidental thereto. Before embarking on adjudication, therefore, the adjudicator has to determine the scope of the order of
reference. Hence, the question of the scope and construction of the order of reference becomes relevant. The construction of the
order of reference will, in all probability, be easy or difficult, according to whether the document has been skillfully or

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carelessly drawn. In India Paper Pulp, speaking for the federal court, Kania CJI said that not infrequently, the orders of
reference are ‘far from satisfactory and are not carefully drafted’.70 In Delhi Cloth Mills, one of the issues raised before
Supreme Court was: ‘which of the two provisions - s 4K of the UP Industrial Disputes Act 1947 (‘State Act’) and s 10 of the
Industrial Disputes Act 1947 (‘Central Act’) - applies in so far as it relates to the jurisdiction of the labour court in respect of
adjudicating ‘matters incidental to the reference’. In the context of the fact that the subject ‘labour’ is enumerated in
‘Concurrent List’, it is considered to take a look at cl (2) of Art. 254 of the Constitution for a better understanding of the
relative turfs of the Centre and States in such circumstances. The said clause runs thus:

(2) Where a law made by the Legislature of a State with respect to one of the matters enumerated in the concurrent List
contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that
matter, then the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President
and has received his assent, prevail in that State:

Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter
including a law adding to, amending, varying or repealing the law so made by the Legislature of the State. (Italics supplied).

Justice Mitter held that s 4K of UP Industrial Disputes Act 1947 does not talk of ‘matters incidental to reference’. Hence, the
labour court had no jurisdiction to decide such matters by invoking provisions of s 10 of the Central Act. as the provisions of
the State Act would prevail by virtue of Art 254 (2) of the Constitution.71 Inaccuracy of language employed in the order of
reference, however, does not always make any difference to the jurisdiction of the tribunal to proceed with the reference and
adjudicate upon it,72 as the tribunal can interpret and find out the real meaning of the order of reference as it stands.73 In the
language of Krishna Iyer J, industrial jurisprudence is an alloy of law and social justice and one cannot be too pedantic in
construing the terms of a reference respecting a dispute for industrial adjudication.74 The general principle, in construing the
public orders made by public authorities in exercise of a statutory power is that they must be construed objectively with
reference to the language used in the order itself, because such orders are meant to have public effect and are intended to affect
the manner and conduct of those to whom they are addressed.75 The tribunals must attempt to construe the order of reference
not too technically or in a pedantic manner, but fairly and reasonably. Even if the phraseology of the order of reference is not
elegant, the tribunals should take to the substance rather than to the form of the order of reference.76 In other words, the tribunal
not only has the power but a duty is cast on it to find out what was the real dispute which was referred to it and to decide it and
not to throw it out on a mere technicality.77 It would involve no hardship if the reference is also made in wider terms provided,
of course, the dispute is one of the kinds described in s 2(k) and the parties between whom such dispute has actually arisen or is
apprehended in the opinion of government, are indicated either individually or collectively with reasonable clearness.78 In
construing the terms of the order of reference and determining the scope and nature of the points referred, ‘the order of
reference itself has to be looked into’.79 However, the words ‘order of reference’ do not mean ‘order of reference only’. The
scope of the order of reference gets crystallised from the statements of the respective cases of the parties.80 In Delhi Cloth Mills
(supra), Mitter J held:

The tribunal must, in any event, look to the pleadings of the parties to find out the exact nature of the dispute, because in most cases the
order of reference is so cryptic that it is impossible to cull out therefrom the various points about which the parties were at variance
leading to the trouble.

It is, thus, clear that where the order of reference is vague or cryptic, the tribunal may look to the pleadings of the parties and
other circumstances with a view to ‘cull out therefrom the various points about which the parties are at variance’ leading to the
dispute and to determine the real nature of the dispute. It was, however, pointedly stated that ‘the parties cannot be allowed to
go a stage further and contend that the foundation of the dispute mentioned in the order of reference was non-existent and the
true dispute was something else. Under s 10(4) of the Act, it is not competent to the tribunal to entertain such a question’.
Therefore, the tribunal cannot allow the parties to challenge the very foundation of the dispute by means of the pleadings or
evidence. Likewise, in Pottery Mazdoor Panchayat, the terms of reference showed that the point in dispute was not about ‘the
fact of closure of business’, but was confined to the narrow question ‘whether the closure was proper and justified’. That being
so, it was held that the tribunal had no jurisdiction to go behind the fact of closure and inquire into the question whether the
business in fact was closed down by the management; and that the tribunal was not at liberty to enlarge the scope of the
reference.81 Even if a reference is made on an incorrect assumption, it is not open to the tribunal while so holding, to enlarge,
by its own choice, the scope of the reference and widen the issues for decision and the field of inquiry including evidence.82In
Jaipur Udyog, the court struck down the award on the ground that the tribunal went beyond the scope of reference.83

However, in Enfield India, a single judge of the Madras High Court held that a dispute expressly stated in the order of reference
to be ‘between the workman...and the management’ is to be construed as a dispute between the workman represented by the
union and the management.84 In this case, though the union had been representing the workman with respect to his non-

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employment before the management and the conciliation officer, from the judgment it does not appear that the dispute was
espoused by the union. Therefore, to say that the dispute was between the workmen of the employer company represented by
the union and its management, is incorrect. It is well-settled that the government is bound by the report of the conciliation
officer. In Sitaram Shirodkar, the case of the workman was that the employer had terminated his services while the case of the
management was that the workman had abandoned the job by absenting from duty. However, the government made reference
to the effect as to whether the action of the management in ‘terminating the services’ of the workman was ‘legal and justified’.
The Bombay High Court held that the reference proceeded only on the basis that ‘there was termination of service’ while
completely leaving out the question of abandonment of job on the part of the workman. Thus, the only question left open for
adjudication was as to whether the ‘termination was legal and proper.’ This disabled the tribunal from going into the question
whether the workman had, in fact, abandoned his job. In this view of the matter, the court held that the reference was bad and
could be quashed on certiorari.85

Adjudication of Individual Dispute: Karnataka Amendment

Section 10(4A) of the Industrial Disputes (Karnataka Amendment) Act 1987 states:

Notwithstanding anything contained in section 9C and in this section, in the case of a dispute falling within the scope of section 2A, the
individual workman concerned may, within six months from the date of communication to him of the order of discharge, dismissal,
retrenchment or termination or the date of commencement of the Industrial Disputes (Karnataka Amendment) Act 1987, whichever is
later, apply, in the prescribed manner, to the labour court for adjudication of the dispute and the labour court shall dispose off such
application in the same manner, as a dispute referred under sub-section (1).86

An application under sub-section (4A) may be made even in respect of a dispute pending consideration of the government for
reference, on the date of the commencement of the Industrial Disputes (Karnataka Amendment) Act 1987. This entitles an
individual workman directly to approach the labour court for adjudication of a dispute falling under s 2A of the Act instead of
approaching it through the appropriate government asking for a reference of the dispute and the labour court shall dispose of
the same ‘in the same manner as a dispute referred under sub-s (1)’. Therefore, the consideration of the application under s
10(4A) is post-reference stage and shall be in the manner as if a dispute has been referred for adjudication under s 10(1).
However, in order to invoke the adjudicatory machinery of the labour court, the existence of an ‘industrial dispute’ on the date
of invoking the jurisdiction under s 10(4A) is a basic requirement the absence of which will take away the jurisdiction of the
labour court to proceed further with adjudication. Therefore, every application made before the labour court under this
provision, should not be treated as relating to a dispute that existed on the date of the application. The labour court is required
to examine and form an opinion as to whether the dispute before it for adjudication existed, which could be adjudicated by it.
Each case should be decided on its own merits. The question whether a dispute exists or not should be decided by the labour
court taking into account several aspects. In Banavasi VS Sangh, a single judge of Karnataka High Court held that the fact that
the government had earlier refused to refer the dispute for adjudication will, by itself, not bar the workmen from filing an
application under this sub-section because this right is de hors the provisions of s 10.87 In Bijapur Coop Milk Producers
Society, the issue before the Supreme Court was about the date from which the ouster of jurisdiction of labour courts and
tribunals in service disputes between a cooperative society and its employees became effective. The Karnataka Cooperative
Societies Act 1959 was amended by Act 19 of 1976, by which service disputes between a cooperative society and its
employees was to be referred to the Registrar for adjudication, and there was no specific provision therein to the extent of
ousting the jurisdiction of labour courts and industrial tribunals, with the result that the Registrar of Cooperative Societies
provided an alternative remedy in addition to the machinery provided under the ID Act. However, the said Amendment of 1976
was neither reserved for, not received, the assent of President. In the meantime, the said Act was further amended by Act 2 of
2000 specifically excluding the jurisdiction of labour courts and industrial tribunals coupled with a ‘non obstante’ clause.
Specifically, two questions fell for the consideration of the Court.

(1) Whether the jurisdiction of Labour Court under the Industrial Disputes Act, was barred by section 70 of the Karnataka
Cooperative Societies Act with reference to co-operative societies and if so, from when.
(2) Even if Labour Court had jurisdiction, whether the appellant was entitled to file an application under Section 10(4A) of
Industrial Dispute Act in respect of a cause of action which occurred in 1978.

The decision of the Court on question (1) has been discussed in the preceding paragraphs. The learned Judge answered question
(2), which directly falls under Section 10 of the Central Act as amended by Karnataka. With reference to this particular aspect,
the facts of the case were: the appellant workman, whose service was terminated on 1-3-1980 approached the labour court
under the amended s 10(4A). The labour court passed an award in 1996 holding that the workman had worked for more than
240 days in the year preceding termination and that his termination without complying with the provisions of s 25F was illegal

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and directed reinstatement with 50% back wages and continuity of service. The most significant fact of the case is that the
termination of service of the workman was effected some 7 years before the Amended section came into force. The said award
was quashed by the Division Bench of Karnataka High Court. Justice Raveendran, while interpreting that portion of the
amended s 10(4A), ie, “the individual workman concerned may, within six months from the date of communication to him of the
order of discharge, dismissal, retrenchment or termination or the date of commencement of the Industrial Disputes (Karnataka
Amendment) Act, 1987, whichever is later”, held that the legislative intent behind the said portion of the amendment was not to
revive stale or non-existing claims, but only ensures that claims which were live, by applying the six month rule in s 10(4A) as
on the date when the section came into effect, have a minimum of six months’ time to approach the Labour Court; and
therefore, the words within six months from the date of commencement of the Karnataka Amendment 1987, whichever is later
only enables those who had been communicated order of termination within six months prior to 7-4-1988, to apply under s
10(4A). On this view of the matter, the learned judge summarized the position with regard to question (2) above thus:

(i) In regard to termination orders communication on or after 7-4-1988, the outer limit for making an application under Section
10(4A) is six months from the date of communication of the order.
(ii) In regard to termination orders communicated during a period of six months prior to 7-4-1988, the period of limitation would
be up to 7-10-1988 even though the six months’ period from the date of communication may actually expire between 7-4-
1988 to 7-10-1988.
(iii) In regard to termination orders communicated prior to 7-10-1987, no claim application under Section 10(4A), could be filed,
as there is no provision for such applications. The remedy under section 10(1) (c) and (d) will continue to be available,
subject, however, to the rule that stale and dead claims will not be referred.

The learned judge finally concluded thus:

The intent of Section 10(4A) is to give a right to the aggrieved workman to challenge the termination order within six months from the
date of accrual of cause of action and not to furnish an one time revival in regard to stale and non-existing claims. Therefore, a claim
application of the petitioner filed on 4.10.1988 in regard to alleged termination on 1.3.1980 (or 19.2.1978 as found by the Labour Court)
was not maintainable under Section 10(4A) of ID Act and could not have been entertained by the Labour Court... We, therefore, find no
reason to interfere with the final order in the judgment of the High Court setting aside the award, though for different reasons. The
appellant is not entitled to any relief. The appeal is, therefore, dismissed.88 (Paras 30 & 31)

SUB-SECTION (5): POWER OF GOVERNMENT TO ADD PARTIES

This provision confers jurisdiction on the ‘appropriate government’ to include in an order of reference any other establishment,
group or class of establishments of a similar nature, who in the opinion of the government are likely to be interested in or
affected by, the dispute. The government has to form its opinion suo motu on an application being made to it. Further, the
government can include such establishments, group or class of establishment, at the time of making an order of reference or at
any time subsequent to that. It is not material whether at the time of inclusion of such establishments, group or class of
establishments, any dispute actually exists or is apprehended in it.89 The ‘appropriate government’ can, by a common order of
reference, refer a common dispute between various establishments engaged in the same business and their respective
workmen.90 This provision contemplates the case of adding of parties to a reference which has already been made when the
dispute involved is of such a nature that any other establishment, group or class of establishments of a similar nature is likely to
be interested in or affected by such dispute. In such a case, the ‘appropriate government’ making the reference may, either at
the time of making the reference or at any time thereafter, but before the submission of the award by the tribunal, include in
that reference such establishment, group or class of establishments. This power can be exercised by the government even when
such dispute did not exist or was not apprehended in that establishment, group or class of establishments at the time of such
inclusion. This sub-section, therefore, applies to the establishment other than the one or ones who are parties to the ‘industrial
dispute’ in respect of which a reference has been made under s 10(1)(d) of the Act.91 The order under s 10(5) is an
administrative order.92No doubt, the words ‘any other establishment, group or class of establishments of a similar nature is
likely to be interested in, or affected by such dispute’ in this section are of wide amplitude. However, they cannot be interpreted
so as to bring in the establishments in which a dispute cannot be raised on account of subsisting settlements. Otherwise, the
result will be that even after adjudication in a reference, the parties bound by such adjudication could claim to be interested in
or affected by a dispute in an establishment of a similar nature and seek to be included as parties to reference of such a dispute.
The harmonious construction which could be placed on ss 10(1), 10(5), 18 and 19 of this Act is that parties who are bound by
subsisting settlements cannot seek to be included in a reference by virtue of this provision even if such a reference is industry-
wise. Furthermore, this sub-section does not override ss 18 and 19 of the Act.93 Subject to the conditions mentioned in s 10(5),
the ‘appropriate government’ is authorised to add other parties to a pending dispute.94 However, under the guise of adding
parties under s 10(5), the government cannot supersede the previous order of reference or substantially vary it. In DN Ganguly,

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the order of reference inter alia referred the point ‘whether the dismissal of workmen in attached list A and the indefinite
suspension of workmen in attached list B are justified’. By a subsequent notification, the government issued a corrigendum to
the order of reference purporting to be under s 10(5), by which the names of the workmen in list B were included in list A and
the names of workmen in list A were included in list B and also included further certain other names in list B. The Supreme
Court held that the corrigendum including fresh names in list B in the circumstances of the case was beyond the powers of the
state government and did not fall within the provisions of s 10(5) of the Industrial Disputes Act.95 In Pioneer Ltd, the
government, after making a reference of the dispute under s 3(1) of the Working Journalists and Other Newspaper Employees
(Conditions of Service) and Miscellaneous Provisions Act 1955 read with s 10 of the Industrial Disputes Act 1947 added
parties to the reference and made certain other amendments to the original reference, which was challenged by the
management. Rejecting the contention, DP Singh J of Allahabad High Court held that the government was entitled to add
parties and to make the amendments to the reference.96

SUB-SECTION(6): BAR OF REFERENCE TO NATIONAL TRIBUNAL

Reference to National Tribunal bars reference to adjudication by Labour Court and Industrial Tribunal

Section 10(1A) empowers the Central Government to refer an industrial dispute to a national tribunal in the circumstances
stated therein. However, sub-s (6) has been devised for avoiding multiplicity of proceedings which may result from such a
reference. This provision bars adjudication upon any matter by a labour court or an industrial tribunal, when such matter has
been referred for adjudication to a national tribunal, under sub-s (1A). The effect of the non-obstante clause is that irrespective
of the other provisions in the Act, it is the national tribunal alone which will be seized of the matter referred to it after a
reference under sub-s (1A) to the complete exclusion of adjudication by other adjudicatory authorities either under this Act or
any state statute.

Pending proceedings to be deemed to have been quashed

This clause provides that if the matter, referred to the national tribunal under sub-s (1A), is at the time of such reference
pending in a proceeding before a labour court or industrial tribunal, the proceeding before such labour court or tribunal, as the
case may be, insofar as it relates to such matter, shall be deemed to have been quashed. The opening part and cl (a) are not
independent of one another, but are linked together by the use of the word ‘accordingly’. The combined effect of these
provisions is not merely to impose a prohibition against proceeding with the inquiry before the tribunal, but there is also an
obligation cast on the tribunal to treat the proceedings which would include the reference itself, as void as having been quashed
by the reference to the national tribunal. This provision should be applied only if the tribunal is satisfied that the subject-matter
of the specific reference in regard to which the provision is invoked, is comprised in the subject-matter of the general reference
to the national tribunal.97

Appropriate Government barred from referring matter pending before the National Tribunal to any Labour Court or a
Tribunal

This clause bars the ‘appropriate government’ from referring a matter to a labour court or an industrial tribunal for adjudication
during the pendency of the proceeding in relation to such matter before the National Tribunal. The effect of this provision is
that if such a matter is referred to a labour court or an industrial tribunal for adjudication, the order of reference shall be void ab
initio and the labour court or the industrial tribunal shall have no jurisdiction to proceed with the adjudication.

Explanation—The effect of the explanation is that not only the reference of a matter pending adjudication before a national
tribunal cannot be made to any labour court or industrial tribunal under the Industrial Disputes Act 1947, but that such
reference cannot be made even to adjudicatory authorities under the state statutes as well. Further, if such a matter is pending
before anyone of such adjudicatory authorities under any state statute, it shall be deemed to have been quashed.

SUB-SECTION (7): CENTRAL GOVERNMENT IS THE APPROPRIATE GOVERNMENT - REFERENCE TO

NATIONAL TRIBUNAL

This sub-section provides that if a dispute is referred to a national tribunal, then notwithstanding anything contained in ss 15,
17, 19, 33A and 36A, the ‘appropriate government’ in relation to such dispute shall be the Central Government.

SUB-SECTION (8): ABATEMENT

This sub-section has been inserted by the Amending Act 46 of 1982.1It lays down that by reason of the death of a workman
who was a party to an industrial dispute pending adjudication before a layout court, tribunal or national tribunal, the
proceedings before such adjudicatory authority will not abate. However, the adjudicator will have to complete such
proceedings and submit his award to the appropriate government. The scope of adjudication by the adjudicatory authority under

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the Act is much wider than the determination of the legal rights of the parties involved in redressing the grievances of an
aggrieved workman in accordance with law. Resolution of industrial disputes by such authorities is necessary for industrial
peace notwithstanding the death of the workmen concerned pending proceedings.2 This provision gives effect to the law
evolved by the Supreme Court when the maxim ‘actio personalis moritur cum persona, a personal action dies with the person’
has limited application. It operates in a limited class of actions, ex delicto actions such as for damages for defamation, assault
or other personal injuries not causing the death of the party, and in other actions where after the death of the party, the relief
granted could not be enjoyed or granting it would be nugatory.3 This maxim ‘though part of English law, has been subjected to
criticism even in England. It has been dubbed as an unjust maxim, obscure in its origin, inaccurate in its expression and
uncertain in its application. It has often caused grave injustice’.4 The applicability of this maxim depends upon the ‘relief
claimed and the facts of each case. By and large, the industrial dispute under s 2A of the Act relates to wrongful termination of
services of a workman. In the event of death of the workman during the pendency of the proceedings, the relief of
reinstatement, obviously, cannot be granted. However, the final determination of the issues involved in the reference may be
relevant for regulating the conditions of service of other workmen in the industry. The adjudicatory authorities under the Act
are the instruments for achieving the primary object of the Act to bring industrial peace. The death of a workman during the
pendency of proceedings, therefore, cannot deprive his heirs or the legal representatives of their right to continue the
proceedings and claim the benefits as successors to the deceased workmen.5

The Bombay High Court in Ambabai Amin, observed that this provision implies that the effective hearing of the dispute must
continue despite the death of one of the parties and an order on merits of the rival contentions should be pronounced and not
that an award dismissing the reference or rejecting the claim simpliciter should be passed by reason of the death. This provision
can only be read to imply that the cause of action which is not personal to the Worker will ensure for the benefit of his heirs
and legal representatives and will be gone into by the tribunal which will dispose of the matters referred to it as are necessary
for deciding these points. In other words, this provision makes it unequivocally clear that the adjudication proceedings will not
abate even if the dispute was of an ‘individual’ nature and the relief could only be given to the workman himself.6 For instance,
in case of wrongful termination of the service of an individual workman, where he claims the relief of reinstatement and back
wages, the tribunal will continue the adjudication proceedings even after the death of the workman. In case he is awarded
reinstatement with back wages, the heirs and successors of the deceased workman will be entitled to the back wages and other
benefits from the date of termination of the service to the date of death of the workman. However, in such a case, the
reinstatement of the workman will be notional for quantifying the benefits up to the date of his death. A single judge of the
Karnataka High Court, held that even if the workmen dies while the dispute is in the conciliation stage before a conciliation
officer, the dispute will not abate by reason of the death of the workman and the legal representatives of the workman can be
brought on record in the conciliation proceedings and continue the same.7 The provisions of this sub-section should be deemed
to apply to all references and other proceedings which were pending on that day.8 In view of s 10(8), an industrial dispute does
not come to an end with the death of the workman, and his legal heirs can initiate and prosecute the industrial dispute.9

25 Poona Labour Union v State of Maharashtra (1969) 2 LLJ 291, 293 (Bom) (DB), per Madon J.
26 Travancore Mineral Workers’ Union v Govt of India (1957-58) 12 FJR 180 (Punj), per Bishan Narain J.
27 Indian Iron & Steel Co Ltd v Triegi Nath (1965) 1 LLJ 620, 628 : AIR 1964 Cal 102 [LNIND 1963 CAL 132] (Cal) (DB), per
Mitter J.
28 Vallamalai Estate v Workers of Vallamalai Estate (1973) 1 LLJ 273 [LNIND 1972 MAD 165], 276-77 (Mad) (DB), per
Veeraswami CJ.
29 Toronto Rly Co v Corpn of City of Toronto [1904] AC 809.
30 Free Press Labour Union v State of Madras (1951) 2 LLJ 302 (Mad), per K Naidu J.
31 Travancore Mineral Workers’ Union v Government of India 12 FJR 180 (Punj), per Bishnu Narain J.
32 Karamchand Thapar & Bros Ltd v Clerical Employees 4 FJR 365, 371 (LAT).
33 HD Singh v Reserve Bank of India 1985 Lab IC 1733, 1738 : AIR 1986 SC 132 [LNIND 1985 SC 278]: (1986) I LLJ 127(SC), per
Khalid J.
34 Inder Mohan v Union of India CWP No 2646 of 1982 (Delhi).
35 Cf, Remington Rand of India Ltd v Workmen (1967) 2 LLJ 866 [LNIND 1967 SC 226] (SC), per Mitter J.
36 Ganges Printing Ink Factory EIC Societies Ltd v 7th IT 1985 Lab IC 1762 (Cal), per Padma Khastgir J.

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37 Mysore City PGW Assn v State of Karnataka 1984 Lab IC 1735, 1737 (Kant), per Rama Jois J.
38 Workmen of Edward Keventers Pvt Ltd v Delhi Admn 1969 ILR Del 767(DB), per HR Khanna CJ.
39 Maxwell, Interpretation of Statutes, 1969, 12th ed, p 1.
40 Shahdara-Saharanpur Light Rly Co Ltd v SS Rly Workers’ Union (1969) 1 LLJ 734 [LNIND 1968 SC 281], 749 (SC), per Shelat J.
41 Keventers Karamchari Sangh v Lt Governor, Delhi (1971) 2 LLJ 375 [LNIND 1970 DEL 70] (Del) (DB), per Andley J.
42 Delhi Administration v Workmen of Edward Keventers 1978 Lab IC 706, 707 : AIR 1978 SC 976 [LNIND 1978 SC 31] (SC), per
Krishna Iyer J.
43 Badri Narayan Saha v Union of India (1999) 3 LLN 365 (Pat) (DB), per Sharma J.
44 Dewar’s Garage (I) Pvt Ltd v Third IT 1977 Lab IC 86 (NOC) (Cal), per Hazra J.
45 Maharaja Kishangarh Mills Ltd v State of Rajasthan AIR 1953 Raj 188 [LNIND 1953 RAJ 188], 190-91, per Ranawat J.
46 AK Kaliappa Chettiar and Sons v State of Kerala (1970) 1 LLJ 97 (Ker), per Isaac J.
47 Keventers Karamchari Sangh v Lieutenant Governor, Delhi (1971) 2 LLJ 375 [LNIND 1970 DEL 70] (Del), per Andley J.
48 Eenadu Press Workers Union v Govt of AP (1979) 1 LLJ 391 (AP) (DB), per Kuppuswami J.
49 Mysore City P&GW Assn v State of Karnataka 1984 Lab IC 1735, 1738 (Kant), per Rarna Jois J.
50 Harish Bijaykumar Khaitan v State of Maharashtra 1987 Lab IC 836, 840 (Bom), per Kantharia J.
51 Birla Tyres Workers Union v State of Orissa (2011) 3 LLJ 859 : 111 (2011) CLT 554 (Orr), per Mahapatra J.
52 Coats India v State of Bihar (2011) 4 LLJ 872 (Pat), per SP Singh J.
53 Niemla Textile Finishing Mills Ltd v Second Punjab Tribunal (1957) 1 LLJ 460 [LNIND 1957 SC 1], 470 (SC), per Bhagwati J. .
54 Ujjambai v State of Uttar Pradesh AIR 1962 SC 1621 [LNIND 1962 SC 584], 1629, per SK Das J.
55 Western India Automobile Assn v IT (1949) 1 LLJ 245, 253 (FC), per Mahajan J.
56 United Commercial Bank Ltd v Workmen (1951) 1 LLJ 621 [LNIND 1951 SC 26], 630 : AIR 1951 SC 230 [LNIND 1951 SC 26]
(SC), per Kania CJI.
57 Jai Bhagwan v Mgmt of Ambala CCB Ltd 1983 Lab IC 1694, 1696 (SC), per Chinnappa Reddy J.
58 Bharat Bank Ltd v Employees of Bharat Bank Ltd (1950) 1 LLJ 921 [LNIND 1950 SC 4], 931 (SC), per Mahajan J.
59 State of Madras v CP Sarathy (1953) 1 LLJ 174 [LNIND 1952 SC 84] (SC), per Patanjali Sastri CJI.
60 Cawnpore Tannery Ltd v S Guha (1961) 2 LLJ 110 [LNIND 1960 SC 266], 112 (SC), per Gajendragadkar J.
61 Delhi Cloth & General Mills Ltd v Workmen (1969) 2 LLJ 755 [LNIND 1968 SC 298], 767 (SC), per Shah J.
62 State of Bombay v Hospital Mazdoor Sabha (1960) 1 LLJ 251 [LNIND 1960 SC 19], 257 (SC), per Gajendragadkar J.
63 Basti Sugar Mills Co Ltd v State v Uttar Pradesh (1978) 2 LLJ 412 [LNIND 1978 SC 232], 419 (SC), per Krishna Iyer J.
64 JK Cotton Spg and Weaving Mills Co Ltd v LAT (1963) 2 LLJ 436 [LNIND 1963 SC 157], 444 (SC), per Gajendragadkar J.
65 Patna Electric Supply Co Ltd v Panza Electric Supply Workers’ Union (1959) 2 LLJ 366 [LNIND 1959 SC 75], 370 (SC), per
Gajendragadkar J.
66 Western India Automobile Assn v IT (1949) 1 LLJ 245, 256 : AIR 1949 FC 111 (FC), per Mahajan J.
67 Bidi, Bidi Leaves and TM Assn v State of Bombay (1961) 2 LLJ 663 [LNIND 1961 SC 353], 670 (SC), per Gajendragadkar J.
68 Bharat Bank Ltd v Employees of Bharat Bank Ltd (1950) 1 LLJ 921 [LNIND 1950 SC 4] (SC), per Kania CJI.
69 Western India Automobile Assn v IT (1949) 1 LLJ 245 (FC), per Mahajan J.
70 The Bharat Bank Ltd v Employees of the Bharat Bank Ltd., Delhi and The Bharat Bank Employees’ Union, Delhi (1950) 1 LLJ 921
[LNIND 1950 SC 4], 948 : AIR 1950 SC 188 [LNIND 1950 SC 4] (SC), per Mukherjee J.
71 Rohtas Industries Ltd v Brijnandan Pandey (1956) 2 LLJ 444 [LNIND 1956 SC 77], 449 (SC) ; AIR 1957 SC 1 [LNIND 1956 SC
77]; (1957) 27 AWR 210, : 1957 (5) BLJR 26, per SK Das J.
72 Premier Automobiles v KS Wadke (1975) 2 LLJ 445 [LNIND 1975 SC 299], 450 (SC) : AIR 1975 SC 2238 [LNIND 1975 SC
299]: [1975] (31) FLR 195 : 1975 Lab IC 1651 : (1976) 1 SCC 496 [LNIND 1975 SC 299], per Untwalia J.
73 Ludwig Teller, Labour Disputes & Collective Bargaining, 1940, Vol 1, p 536.
74 Patna Electric Supply Co v Patna Electric Supply Co Workers’ Union (1959) 2 LLJ 366 [LNIND 1959 SC 75], 370 (SC), per
Gajendragadkar J.

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75 Niemla Textile Finishing Mills Ltd v Second Punjab Tribunal (1957) 1 LLJ 460 [LNIND 1957 SC 1] (SC), per Bhagwati J.
76 Rai Bahadur Diwan Badri Das v Industrial Tribunal (1962) 2 LLJ 366 [LNIND 1962 SC 293], 370 (SC) : AIR 1963 SC 630
[LNIND 1962 SC 293]: [1963] 3 SCR 930 [LNIND 1962 SC 293], per Gajendragadkar J.
77 Punjab National Bank Ltd v IT (1957) 1 LLJ 455 [LNIND 1956 SC 113], 458 (SC), per SK Das J.
78 General Secretary, Madras Harbour Workers’ Union v IT (1972) 1 LLJ 8, 14(Mad), per Palaniswamy J.
79 Bharat Bank Ltd v Employees of Bharat Bank Ltd (1950) 1 LLJ 921 [LNIND 1950 SC 4], 932 (SC), per Mahajan J.
80 Sussanah Sharp v Wakefield [1891] AC 173, 179, per Lord LC Halsbury.
81 Rohtas Industries Ltd v Brijnandan Pandey (1956) 2 LLJ 444 [LNIND 1956 SC 77], 449 (BC), per SK Das J.
82 New Maneckchowk Spg and Wvg Co Ltd v Textile Labour Association (1961) 1 LLJ 521 [LNIND 1960 SC 321], 526 (SC) : AIR
1961 SC 867 [LNIND 1960 SC 321]: [1961] 3 SCR 1 [LNIND 1960 SC 321], per Wanchoo J.
83 Delhi Cloth & General Mills Ltd v Workmen (1969) 2 LLJ 755 [LNIND 1968 SC 298], 767 (SC), per Shah J.
84 RB Dewan Badri Das v IT (1962) 2 LLJ 366 [LNIND 1962 SC 293], 370 (SC), per Gajendragadkar J.
85 Remington Rand of India Ltd v Workmen CAS No 856, 1475 & 2119 of 1968 (SC) per Shelat J.
86 Workmen of Dharampal Premchand (Saughandhi) v Mgmt (1965) 1 LLJ 668 [LNIND 1965 SC 83], 673 (SC), per Gajendragadkar
CJI.
87 Harinagar Cane Farm v State of Bihar (1963) 1 LLJ 692 [LNIND 1963 SC 71], 695 (SC), per Gajendragadkar J.
88 State of Bombay v Hospital Mazdoor Sabha (1960) 1 LLJ 251 [LNIND 1960 SC 19], 257 (SC), per Gajendragadkar J.
89 Western India Match Co Ltd v Workmen (1963) 2 LLJ 459 [LNIND 1963 SC 142], 463-64 (SC), per Das Gupta J.
90 NR Mukherjee v Arnold Hartman Just AIR 1961 Cal 95 [LNIND 1960 CAL 112] (DB), per Lahiri CJ.
91 Workmen of Dahingeapar Tea Estate v Dahingeapar Tea Estate (1958) 2 LLJ 498 [LNIND 1958 SC 79] (SC), per SK Das J.
92 Mgmt of OSRT Corporation v IT (1998) 3 LLN 470 (Orr) (DB), per Pasayat J.
1 Delhi Cloth and Genl Mills Co Ltd v Workmen (1969) 2 LLJ 755 [LNIND 1968 SC 298], 767-68 (SC) : AIR 1970 SC 919 [LNIND
1968 SC 298]: [1970] (20) FLR 176 : 1970 Lab IC 78, per Shah J.
2 Rifle Factory Co-op Society Ltd v Fourth IT (1960) 2 LLJ 517 [LNIND 1959 CAL 4], 521 (Cal), per PB Mukharji J.
3 JK Iron & Steel Co Ltd v Iron & Steel Mazdoor Union (1956) 1 LLJ 227 [LNIND 1955 SC 119], 234 (SC), per Bose J.
4 Parry & Co Ltd v PC Pal (1970) 2 LLJ 429 [LNIND 1968 SC 358], 438 (SC), per Shelat J.
5 Harinagar Lime Farm v State of Bihar (1963) 1 LLJ 692 [LNIND 1963 SC 71], 695 (SC), per Gajendragadkar J.
6 Rai Bahadur Diwan Badri Das v Industrial Tribunal (1962) 2 LLJ 366 [LNIND 1962 SC 293], 370 (SC) : AIR 1963 SC 630
[LNIND 1962 SC 293], per Gajendragadkar J.
7 State of Bombay v Hospital Mazdoor Sabha (1960) 1 LLJ 251 [LNIND 1960 SC 19], 257 (SC), per Gajendragadkar J.
8 Madras Gymkhana Club Employees’ Union v Gymkhana Club (1967) 2 LLJ 720 [LNIND 1967 SC 292] (SC), per Hidayatulla J.
9 HD Singh v Reserve Bank of India 1985 Lab IC 1733, 1738 (SC), per Khalid J.
10 Assam Chah Karmachari Sangha v Assam Co Ltd (1956) 1 LLJ 157 (LAT).
11 Ghatge and Patil CE Union v G&P (Tpt) Pvt Ltd (1968) 1 LLJ 566 [LNIND 1967 SC 239], 570 (SC) : AIR 1968 SC 503 [LNIND
1967 SC 238]: [1968] 1 SCR 300 [LNIND 1967 SC 238], per Hidayatullah J.
12 Parry & Co Ltd v PC Pal (1970) 2 LLJ 429 [LNIND 1968 SC 358], 438 (SC) : AIR 1970 SC 1334 [LNIND 1968 SC 358], per
Shelat J.
13 Hathising Manufacturing Co Ltd v Union of India (1960) 2 LLJ 1 [LNIND 1960 SC 122] (SC), per Shah J.
14 Ludwig Teller, Labour Disputes and Collective Bargaining, 1940, Vol 1, p 536.
15 Bombay Labour Union v International Franchises Ltd (1966) 1 LLJ 417 [LNIND 1965 SC 294], 419 (SC) : AIR 1966 SC 942
[LNIND 1965 SC 294]: : [1966] 2 SCR 493 [LNIND 1965 SC 294], per Wanchoo J.
16 Doom Dooma Circle Cha Mazdoor Sangh v Budla Beta Tea Estate (1953) 2 LLJ 828 (LAT).
17 Orissa Cement Ltd v Workmen (1960) 2 LLJ 91 [LNIND 1960 SC 86] (SC), per Gajendragadkar J.
18 Bangalore WCS Mills Co Ltd v Workmen (1968) 1 LLJ 555 [LNIND 1967 SC 274]-65 (SC) : AIR 1968 SC 585 [LNIND 1967 SC
273]: : [1968] 1 SCR 581 [LNIND 1967 SC 273], per Vaidialingam J.
19 State of Bihar v PO, IT 1977 Lab IC 803, 807-09 (Pat) (DB).

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20 Western India Automobile Assn v IT (1949) LLJ 245 (FC), per Mahajan J.
21 Ludwig Teller, Labour Disputes and Collective Bargaining, 1940, Vol 1, p 536.
22 Workmen of Willamson Milgor & Co Ltd v Mgmt (1982) 1 LLJ 33 [LNIND 1981 SC 452] (SC), per Baharul Islam J.
23 Tocklai Experimental Station v Workmen (1961) 2 LLJ 694 [LNIND 1961 SC 361], 697-98 (SC), per Gajendragadkar J.
24 Gujarat Engineering Co v Ahmedabad Misc Industrial Workers’ Union (1961) 2 LLJ 660, 662 (SC), per Wanchoo J.
25 Delhi Cloth & General Mills Co Ltd v Workmen (1969) 2 LLJ 755 [LNIND 1968 SC 298], 767 (SC), per Shah J.
26 Imperial Chemical Industries (Ind) Pvt Ltd v Workmen [1961] 2 SCR 349 [LNIND 1960 SC 268], 354, per Gajendragadkar J.
27 Abhey Raj Singh v LC (1998) 1 LLN 668 (P&H) (DB).
28 A Sambanthan v PO Addl LC (1998) 3 LLN 388, 392 (Mad), per Balasubramanian J.
29 Workmen of Andrew Yule & Co Ltd v Eighth IT (1999) 1 LLN 722, 725 (Cal), per Sinha J.
30 Workmen of KGID v Principal IT (1999) 3 LLN 219 (Kant), per Gopala Gowda J.
31 Blow Plast Ltd v NSH Mashraqui (1997) 4 LLN 430 (Bom).
32 First Flight Couriers Ltd v KCCGE Union (2001) 4 LLN 1221 (Kant), per Chinnappa J.
33 LIC of India v IT (2002) 1 LLN 305 (Ker), per Hariharan Nair J.
34 Muir Mills Ltd v Suti Mill Mazdoor Union (1955) 1 LLJ 1 [LNIND 1954 SC 159], 6 (SC) : AIR 1955 SC 170 [LNIND 1954 SC
159]: [1955] 1 SCR 991 [LNIND 1954 SC 159], per Bhagwati J.
35 JK Iron & Steel Co Ltd v Iron and Steel Mazdoor Union, Kanpur AIR 1956 SC 231 [LNIND 1955 SC 119]: (1956) 1 LLJ 227
[LNIND 1955 SC 119] SC : [1955] 2 SCR 1315 [LNIND 1955 SC 119] : 1955 SCR (2) 1315
36 Punjab National Bank Ltd v Sri Ram Kanwar, Industrial Tribunal (1957) 1 LLJ 455 [LNIND 1956 SC 113], 456-58 (SC) : 1957 (1)
An WR 53 : [1957] 1 SCR 220 [LNIND 1956 SC 113], per SK Das J.
37 Crown Aluminimum Works v Workmen (1958) 1 LLJ 1 [LNIND 1957 SC 106],6 (SC), per Gajendragadkar J.
38 State of Mysore v Workers in Gold Mines (1958) 2 LLJ 479 [LNIND 1958 SC 82], 484 (SC), per Gajendragadkar J.
39 Rashtriya Mill Mazdoor Sangh v Apollo Mills Ltd (1960) 2 LLJ 263 [LNIND 1960 SC 72], 271 (SC), per Hidayatullah J.
40 JK Cotton Spg and Wvg Mills Co Ltd v LAT (1963) 2 LLJ 435, 444 (SC), per Gajendragadkar J.
41 Ahmedabad Mfg and Calico Ptg Co Ltd v Ram Tahel Ramnand (1972) 2 LLJ 165 [LNIND 1972 SC 226], 174 (SC) : AIR 1972 SC
1598 [LNIND 1972 SC 226]: 1972 Lab IC 864 [LNIND 1972 SC 226] : (1972) 1 SCC 898 [LNIND 1972 SC 226], per Dua J.
42 Indian Oxygen Ltd v Workmen (1969) 1 LLJ 235 [LNIND 1968 SC 193], 242 (SC), per Shelat J.
43 Burmah Shell OS&D Co of India Ltd v Workmen (1970) 1 LLJ 363, 366 (SC), per Hegde J.
44 Indian Express Newspapers (B) Pvt Ltd v Employees Union (1978) 2 LLJ 11 [LNIND 1978 SC 97] (SC) : AIR 1978 SC 1137
[LNIND 1978 SC 97]: [1978] (36) FLR 333 : 1978 Lab IC 848 : (1978) 2 SCC 188 [LNIND 1978 SC 97], per Krishna Iyer J.
45 Basti Sugar Mills Co Ltd v State of UP (1978) 2 LLJ 412 [LNIND 1978 SC 232], 419 (SC) : AIR 1979 SC 262 [LNIND 1978 SC
232]: 1979 Lab IC 129 [LNIND 1978 SC 232] : (1979) 2 SCC 88 [LNIND 1978 SC 232], per Krishna Iyer J.
46 Western India Vegetable Products Ltd v Workmen CA 497 of 1966 (SC), per Vaidialingam J.
47 Central Inland Water Transport Corpn Ltd v Second LC 1971 Lab IC 229, 236 (Cal), per BC Mitra J.
48 Central Bank of India Ltd v PS Rajagopalan (1963) 2 LLJ 89 [LNIND 1963 SC 117], 94 (SC), per Gajendragadkar J.
49 Workmen of Cochin Port Trust v Board of Trustees 1978 Lab IC 1111 [LNIND 1978 SC 158], 1115 (SC), per Untwalia J.
50 State of UP v Nawab Hussain 1977 Lab IC 911 [LNIND 1977 SC 167], 913 (SC) : AIR 1977 SC 1680 [LNIND 1977 SC 167]:
(1977) 2 SCC 806 [LNIND 1977 SC 167] : [1977] 3 SCR 428 [LNIND 1977 SC 167], per Singhal J.
51 DP Dunderdale v GP Mukherjee (1958) 2 LLJ 183 [LNIND 1958 CAL 103] (Cal), per PB Mukharji J.
52 Burn and Co Ltd v Employees (1957) 1 LLJ 226 [LNIND 1956 SC 78], 230 (SC) : AIR 1957 SC 38 [LNIND 1956 SC 78], per
Venkatarama Aiyyar J.
53 India General Navigation & Rly Co Ltd v Workmen (1960) 1 LLJ 561 [LNIND 1960 SC 89]-62 (SC), per Wanchoo J.
54 Workmen of Straw Board Mfg Co Ltd v Mgmt (1974) 1 LLJ 499 [LNIND 1974 SC 114] (SC), per Goswami J.
55 Sankar Prasad Banerjee v Central Government, Labour Court (1975) 1 LLJ 71 (Cal) (DB) : 78 CWN 780, per SK Datta J.
56 Workmen of Hindustan Lever Ltd v Mgmt 1984 Lab IC 276 [LNIND 1984 SC 6], 286 (SC), per Desai J.

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57 Punjab Cooperative Bank Ltd v RS Bhatia (1975) 2 LLJ 373, 375 (SC) : AIR 1975 SC 1898 [LNIND 1975 SC 537]: 1975 Lab IC
1439 : (1975) 4 SCC 696 [LNIND 1975 SC 537], per Untwalia J.
58 Bombay Gas Co Ltd v Jagannath Pandurang (1975) 2 LLJ 345 [LNIND 1975 SC 268], 351 (SC), per Alagiriswami J.
59 Mumbai Kamgar Sabha v Abdulbhai Fazullabhai (1976) 2 LLJ 186 [LNIND 1976 SC 84], 203 (SC) : AIR 1976 SC 1455 [LNIND
1976 SC 84]: (1976) 3 SCC 832 [LNIND 1976 SC 84] : [1976] 3 SCR 591 [LNIND 1976 SC 84] per Krishna Iyer J.
60 Deepak Puri v Fifth IT, 1986 Lab IC 132, 136 (Cal), per UC Banerjee J.
61 Workmen of Straw Board Mfg Co Ltd v Mgmt (1974) 1 LLJ 499 [LNIND 1974 SC 114], 501 (SC), per Goswami J.
62 National Projects Construction Corpn Ltd v Workers Union 1974 Lab I C 812, 814-15 (All), per Gopi Nath J.
63 Dalmia Dadri Cement Ltd v Avtar Narain Gujral (1962) 1 LLJ 261 [LNIND 1962 SC 65] (SC), per Venkatarama Aiyyar J.
64 National Tobacco Co Ltd v Miriyala Kalidas (1962) 2 LLJ 207 (AP), per Chandra Reddi CJ.
65 Mathura Prasad Bajoo Jaiswal v DNB Jeejeebhoy AIR 1971 SC 2355 [LNIND 1970 SC 84], 2359 : (1970) 1 SCC 613 [LNIND
1970 SC 84], per Shah J.
66 Rajendra Jha v PO, LC 1984 Lab IC 1583 [LNIND 1984 SC 218] (SC), per Chandrachud CJI.
67 Bharat Barrel & Drum Mfg Co Pvt Ltd v Bharat Barrel Employees Union (1987) 1 LLJ 492 [LNIND 1987 SC 375], 497 (SC) :
AIR 1987 SC 1415 [LNIND 1987 SC 375]: (1987) 2 SCC 591 [LNIND 1987 SC 375], per Venkataramiah J.
68 Punjab State Coop Bank Ltd v Presiding Officer, Labour Court (1993) 2 LLJ 260, 262 (P&H) (DB) : (1993) 103 PLR 310 [LNIND
1992 PNH 59], per Bahri J.
69 B Choudhury v PO, LC 1983 Lab IC 1755, 1758 (Pat) (DB), per Nagendra Prasad Singh J.
70 Workmen of Straw Board Mfg Co Ltd v Straw Board Manufacturing Co. Ltd. (1974) 1 LLJ 499 [LNIND 1974 SC 114], 510 (SC) :
AIR 1974 SC 1132 [LNIND 1974 SC 114]: [1974] (28) FLR 357 : 1974 Lab IC 730 [LNIND 1974 SC 114] : (1974) 4 SCC 681
[LNIND 1974 SC 114], per Goswami J.
71 Bharat Barrel & Drum Mfg Co Pvt Ltd v BB Employees Union (1987) 1 LLJ 492 [LNIND 1987 SC 375], 497 (SC), per
Venkataramiah J.
72 Army & Navy Stores Ltd v Workmen (1951) 2 LLJ 31 (LAT).
73 Burn & Co Ltd v Employees (1957) 1 LLJ 226 [LNIND 1956 SC 78], 229 (SC) : AIR 1957 SC 38 [LNIND 1956 SC 78], per
Venkatarama Aiyyar J.
74 India General Navigation and Rly Co Ltd v Workmen (1960) 1 LLJ 561 [LNIND 1960 SC 89], 562 (SC) : AIR 1960 SC 1286
[LNIND 1960 SC 89], per Wanchoo J.
75 Remington Rand of India Ltd v Workmen, (1962) 1 LLJ 287 [LNIND 1962 SC 87], 288-90 (SC), per Gajendragadkar J.
76 Workmen of Balmer Lawrie & Co Ltd, v Mgmt (1964) 1 LLJ 380 [LNIND 1963 SC 248], 383-84 (SC) : AIR 1964 SC 728 [LNIND
1963 SC 248], per Gajendragadkar J.
77 Shahdara-Saharanpur Light Rly Co Ltd v Workers Union (1969) 1 LLJ 734 [LNIND 1968 SC 281], 742 (SC), per Shelat J.
78 Workmen of Balmer Lawrie & Co Ltd v Mgmt (1964) 1 LLJ 380 [LNIND 1963 SC 248], 381-84 (SC), per Gajendragadkar J.
79 Bengal Chemical & Pharmaceutical Works Ltd v Employees (1959) 1 LLJ 413 [LNIND 1959 SC 13] (SC), per Subba Rao J.
80 Bengal Chemical & Pharmaceutical Works Ltd v Workmen (1969) I LLJ 751, 756 (SC) : AIR 1969 SC 360 [LNIND 1968 SC
279], per Vaidialingam J.
81 Cf, Bombay Gas Co Ltd v Jaganath Pandurang (1975) 2 LLJ 345 [LNIND 1975 SC 268] (SC), per Alagiriswami J.
82 Varahalakshmi Rice and Oils Mills v Industrial Tribunal (1960) 2 LLJ 473 (AP), per Seshachalapathi J.
83 Trichinopoly Mills Ltd v NCT Mills Workers Union (1960) 2 LLJ 46, 48 (SC) : AIR 1960 SC 1003 [LNIND 1960 SC 6],, per
Gajendragadkar J.
84 Chittivalasa Jute Mills v BV Rao (1989) 2 LLJ 76, 80 (AP) : 1989 (1) APLJ 473, per Panduranga Rao J.
85 Shoba Puri v Sadhu Ram 1987 Lab IC 1751 (Del), per Sunanda Bhandare J.
86 Sankar Prasad Banerjee v Central Government, Labour Cour t (1975) 1 LLJ 71, 76 (Cal) (DB) : 78 CWN 780, per SK Datta J.
87 Workmen of Straw Board Mfg Co Ltd v Straw Board Manufacturing Co. Ltd. (1974) 1 LLJ 499 [LNIND 1974 SC 114], 510 (SC) :
AIR 1974 SC 1132 [LNIND 1974 SC 114]: [1974] (28) FLR 357 : 1974 Lab IC 730 [LNIND 1974 SC 114] : (1974) 4 SCC 681
[LNIND 1974 SC 114], per Goswami J.
88 Workmen of Theosophical Society v Govt of TN (1992) 1 LLJ 375, 378 (Mad), per Kanakaraj J.
89 DP Dunderdale v GP Mukherjee (1958) 2 LLJ 183 [LNIND 1958 CAL 103], 189-90 (Cal), per PB Mukharji J.

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90 Sir Sobha Singh & Sons Pvt Ltd v Delhi Administration (1968) 1 LLJ 752, 754 (Punj), per SK Kapur J.
91 DP Dunderdale v GP Mukherjee (1958) 2 LLJ 183 [LNIND 1958 CAL 103], 189-90 (Cal), PB Mukharji J.
92 Indian Statistical Institute v State of West Benga1 1975 Lab IC 99 (Cal) (DB), per Sabyasachi Mukharji J.
93 Walford Transport Ltd v First IT (1961) 2 LLJ 25, 28-29 (Cal), per Ray J.
94 Mgmt of Rajagopal Transport Pvt Ltd v State of TN (1974) 2 LLJ 154 (Mad) (DB).
1 Indodan Milk Products Ltd v LC (1992) 2 LLJ 234 [LNIND 1991 ALL 536], 237 (All) per Palok Basu J.
2 Rifle Factory Co-op Society Ltd v Fourth IT (1960) 2 LLJ 517 [LNIND 1959 CAL 4] (Cal), per PB Mukharji J.
3 Tamil Nadu Madurai v Working Journalists (1958) 2 LLJ 752 [LNIND 1958 MAD 100], 756 (Mad), per Balakrishna Ayyar J.
4 Manabendra Kumar Choudhury v First Labour Court (1992) 1 LLJ 455 [LNIND 1989 CAL 354], 457 (Cal) : 94 CWN 743, per K
Ganguly J.
5 Mgmt of Food Corpn of India v IT 1992 Lab IC 2059, 2066 (Ori) (DB), per Hansaria J.
6 Bengal River Transport Assn v Calcutta PS Union 1978 Lab IC 1416 (Cal), per Amiya Kumar Mookerji J.
7 Bharat Bank Ltd v Employees of Bharat Bank Ltd (1950) 1 LLJ 921 [LNIND 1950 SC 4] (SC), per Kania CJI.
8 RS Ramdayal Ghasiram Oil Mills v Labour Appellate Tribunal (1963) 2 LLJ 65 [LNIND 1962 SC 415], 67-68 (SC) : AIR 1964 SC
567 [LNIND 1962 SC 415]: 1964 (66) Bom LR98, per Mudholkar J.
9 Calcutta Electric Supply Corpn Ltd v CES Workers Union AIR 1959 SC 1191, 1192, per Gajendragadkar J.
10 Pottery Mazdoor Panchayat v Perfect Pottery Co Ltd 1979 Lab IC 827, 829 (SC), per Chandrachud CJI.
11 Delhi Cloth & General Mills Co Ltd v Workmen (1967) 1 LLJ 423 [LNIND 1966 SC 261] (SC) : AIR 1967 SC 469 [LNIND 1966
SC 261], per Mitter J.
12 Mgmt of Madhadevi Textile Mills v Addl IT 1976 Lab IC 1284, 1288 (Kant), per Shetty J.
13 Jhagrakhand Collieries Pvt Ltd v CGIT (1960) 2 LLJ 71 [LNIND 1960 SC 41] (SC), per Gajendragadkar J.
14 Jardine Henderson Ltd v State of West Bengal 1969 Lab IC 1259, 1261 (Cal), per TK Basu J.
15 Express Newspapers Ltd v Workers (1962) 2 LLJ 227, 234 (SC), per Gajendragadkar J.
16 Sheshrao Bhaduji Hatwar v PO, First Labour Court (1992) 1 LLJ 672, 674 (Bom) (DB), per Mohta J.
17 Parry & Co Ltd v PC Pal (1970) 2 LLJ 429 [LNIND 1968 SC 358], 438, per Shelat J.
18 Delhi Cloth & General Mills Co Ltd v Workmen (1967) 1 LLJ 423 [LNIND 1966 SC 261], 431 (SC) : AIR 1967 SC 469 [LNIND
1966 SC 261], per Mitter J.
19 Uttar Pradesh SEB v PO, IT (2002) 2 LLN 41 (All), per Singh J.
20 WPAR Ramamoorthy v Tirunelveli Dist National Plantation Workers’ Union (1963) 1 LLJ 507 (Mad), per Veeraswami J.
21 Hindustan Housing Factory Ltd v Hindustan Housing Factory Employees’ Union 1969 Lab IC 1450 (Del), per Tatachari J.
22 Workmen of Mysore Paper Mills Ltd v Mysore Paper Mills Ltd 1970 Lab IC 1113, 1116-17 (Mys) (DB).
23 Hindustan Steel Ltd v IT-cum-LC 1971 Lab IC 241 (MP) (DB), per Bishambhar Dayal CJ.
24 A Raman v KN Vani (1982) 2 LLJ 1 (Bom), per Pendse J.
25 Indian Oxygen Ltd v Workmen (1969) 1 LLJ 235 [LNIND 1968 SC 193] (SC) : AIR 1969 SC 306 [LNIND 1968 SC 193]: [1969] 1
SCR 550 [LNIND 1968 SC 193], per Shelat J.
26 Jaipur Udyog Ltd v CWK Sangh (1972) 1 LLJ 437 [LNIND 1972 SC 66] (SC) : AIR 1972 SC 1352 [LNIND 1972 SC 66]: 1972
Lab IC 676 [LNIND 1972 SC 66], per Mitter J.
27 Firestone Tyre India Pvt Ltd v Workmen (1981) 2 LLJ 218 [LNIND 1981 SC 294], 221 (SC) : AIR 1981 SC 1626 [LNIND 1981
SC 294]: 1981 Lab IC 1110 [LNIND 1981 SC 294], per Gupta J.
28 Central Inland Water Tpt Corpn Ltd v Seventh IT (1983) 1 LLJ 157, 162 (Cal) (DB) : AIR 1983 SC 658 [LNIND 1983 SC 147]:
(1983) 3 SCC 401 [LNIND 1983 SC 147], per Pyne J.
29 Glaxo Laboratories (India) Ltd v PO, LC 1977 Lab IC 1523, 1533-34 (AP) (DB), per Sheth J.
30 EID Parry (India) 1990 Lab IC NOC 135 (Mad) (DB).
31 Senior Regional Manager, HPCL v PO, IT (2002) 4 LLN 893 (AP) (DB), per Nayak J.
32 State Bank of India v IT (2002) 4 LLN 909 (AP) (DB), per Nayak J.

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33 Delhi Cloth & General Mills Co Ltd v Workmen (1967) 1 LLJ 423 [LNIND 1966 SC 261], 427 (SC), per Mitter J.
34 Industry Publishers Ltd v Lal Mohan Pal 6 FJR 285 (LAT).
35 Hukumchand Jute Mills Ltd v Labour Appelate Tribunal AIR 1958 Cal 68 [LNIND 1957 CAL 151], 70, per Sinha J.
36 Jaipur Spg & Weaving Mills Ltd v Jaipur SWMM Mazdoor Union (1959) 2 LLJ 656 (Raj) (DB), per Chhangani J.
37 Workmen of Harrisions & Crosfield Ltd v Harrisions & Crosfield Ltd (1969) 1 LLJ 61, 64 (Ker), per Issac J.
38 PPMS Nagarathnam v State of Madras (1965) 1 LLJ 84 (Mad), per Srinivasan J.
39 Hotel Imperial v Hotel Workers’ Union (1959) 2 LLJ 544 [LNIND 1959 SC 136] (SC), per Wanchoo J.
40 Punjab National Bank Ltd v AN Sen (1952) 1 LLJ 371 (Punj) (DB), per Harnam Singh J.
41 Workmen of Kettlewell Bullen & Co Ltd v Mgmt (1960) 2 LLJ 189 (Cal) (DB), per Bachawat J.
42 Nilgiris Tea Estates Ltd v Workmen of Stagbrook Estate (1961) 2 LLJ 573 (Ker), per Vaidialingam J.
43 Workmen of Indian Turpentine & Rosin Co Ltd v Mgmt (1961) 1 LLJ 208 [LNIND 1960 SC 111] (SC), per Das Gupta J.
44 Kirloskar Bros Ltd v Workmen (1962) 1 LLJ 732 (SC), per Das Gupta J.
45 Aluminium Factory Workers’ Union v Indian Aluminium Co Ltd (1962) 1 LLJ 210 [LNIND 1962 SC 26] (SC), per Sarkar J.
46 Route Committee, Bengal Bus Syndicate v Rashtriya BM Congress (1953) 1 LLJ 61 (LAT).
47 Hindustan Steel Ltd v Workmen (1965) 1 LLJ 253 (Ori) (DB), per Narasimham CJ.
48 Workmen of Calcutta Port Commr v Employers CA Nos 1220 & 1222 of 1968, (SC), per Bhargava J.
49 Cement Works Karmachari Sangh v IT 1971 Lab IC 143, 152 (Raj), per Tyagi J.
50 Assam Oil Co Ltd v PO, CGIT 1976 Lab IC 216, 220 (Gau) (DB), per Islam J.
51 Indian Farmers Fertiliser Co-operative Ltd v IT 1991 Lab IC 1747, 1753 (All), per Mehrotra J.
52 Airlines Hotel Pvt Ltd v Workmen (1961) 1 LLJ 663 [LNIND 1961 SC 16] (SC), per Das Gupta J.
53 Express Beedi Factory v Workmen (1960) 1 LLJ 669 (Mad), per Ramachandra Ayyar J.
54 DCM Chemical Works v Workmen (1962) 1 LLJ 338, 389 (SC), per Wanchoo J.
55 Jaipur Spg and Weaving Mills Ltd v Jaipur SWMM Union (1959) 2 LLJ 656 (Raj) (DB), per Chhangani J.
56 Hukumchand Jute Mills Ltd v Labour Appellate Tribunal (1959) 1 LLJ 595 (Cal), per Sinha J.
57 Workmen of Bengal Electric Lamp Works Ltd v Mgmt (1958) 1 LLJ 571 [LNIND 1958 CAL 49] (Cal), per Mukharji J.
58 KP Dos and Co Ltd v Howrah Zillah Loha Karkhana Mazdoor Congress (1956) 1 LLJ 679 (LAT).
59 Spencer and Co Ltd v Labour Appellate Tribunal (1954) 2 LLJ 310 (Mad), per Balkrishna Iyer J.
60 Royal Calcutta Golf Club v Third IT (1960) 1 LLJ 464 (Cal), per Sinha J.
61 Teok Tea Estate v LC (1962) 1 LLJ 178 (Assam), per Deka CJ.
62 Birla Cotton, Spg and Weaving Mills Ltd v Workmen (1956) 2 LLJ 188 (LAT).
63 Industry Publishers Ltd v Lal Mohan Pal 6 FJR 285 (LAT).
64 Workmen of British India Corpn Ltd v British India Corpn Ltd (1965) 2 LLJ 433 [LNIND 1964 SC 290] (SC), per Wanchoo J.
65 K Venkatachalam v Ashok Leyland Ltd (1968) 2 LLJ 807 (Mad), per Kaliasam J.
66 Rohtas Industries Ltd v Workmen 1968 Lab IC 82 (Pat) (DB), per ABN Sinha J.
67 Jardine Henderson Ltd v State of West Bengal 1969 Lab IC 1259, 1291 (Cal), per TK Basu J.
68 Burmah-Shell OS & D Co of India Ltd v Workmen (1961) 2 LLJ 124 (SC), per Gajendragadkar J.
69 Balaji Vegetable Products Pvt Ltd v State of Uttar Pradesh 1982 Lab IC (Noq 130 (All), per KS Varma J.
70 India Paper Pulp Co Ltd v India PPW Union (1949) 1 LLJ 258 (FC), per Kania CJI.
71 Delhi Cloth & General Mills Co Ltd v Workmen (1967) 1 LLJ 423 [LNIND 1966 SC 261], 427 (SC) : AIR 1967 SC 469 [LNIND
1966 SC 261]: AIR 1967 SC 469 [LNIND 1966 SC 261], per Mitter J.
72 State Bank of India v Workmen [1959] LIC 483 (LAT).
73 Hotel Imperial v Chief Commr of Delhi (1957) 1 LLJ 92 (Punj) (DB).
74 Agra Electric Supply Co Ltd, Agra v Workmen (1983) 1 LLJ 304, 305 (SC), per Krishna Iyer J.

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75 Commr of Police v Gordhandas Bhanji AIR 1952 SC 16 [LNIND 1951 SC 63], per Bose J.
76 Express Newspapers Ltd v Workmen (1962) 2 LLJ 227, 234 (SC) : AIR 1963 SC 569 [LNIND 1962 SC 253]: [1963] 3 SCR 540
[LNIND 1962 SC 253], per Gajendragadkar J.
77 Minimax Ltd v Workmen (1968) 1 LLJ 369 (Pat) (DB), per KBN Singh J.
78 State of Madras v CP Sarathy (1953) 1 LLJ 174 [LNIND 1952 SC 84] (SC) : AIR 1953 SC 53 [LNIND 1952 SC 84]: (1953) I
MLJ 212(SC), per Patanjali Sastri CJI.
79 Calcutta Electric Supply Corpn Ltd v CESW Union AIR 1959 SC 1191, per Gajendragadkar J.
80 State of Madras v CP Sarathy (1953) 1 LLJ 174 [LNIND 1952 SC 84], 180 (SC), per Patanjali Sastri CJI.
81 Pottery Mazdoor Panchayat v PPC Ltd 1979 Lab IC 827, 829 (SC), per Chandrachud CJI.
82 WPAR Ramamoorthy v Tirunelveli Dist NPW Union (1963) 1 LLJ 507 (Mad), per Veeraswami J.
83 Jaipur Udyog Ltd v CWK Sangh (1972) 1 LLJ 437 [LNIND 1972 SC 66], 440-41 (SC) : AIR 1972 SC 1352 [LNIND 1972 SC 66]:
1972 Lab IC 676 [LNIND 1972 SC 66], per Mitter J.
84 Mgmt of Enfield India Ltd v Second Additional LC (1981) 2 LLJ 287, 291-92 (Mad), per Padmanabhan J.
85 Sitaram Vishnu Shirodkar v Administrator, Govt of Goa (1985) 1 LLJ 480 [LNIND 1984 BOM 207] (Bom) (DB) : 1984 Mh LJ
566.
86 Ins by the Industrial Disputes (Karnataka Amendment) Act 1987 (Karnataka Act 3 of 1988), s 2 (wef 7-4-1988).
87 Banavasi Vyavasaya Sahakari Sangh Ltd v NC Bapat (1995) 1 LLJ 520, 524 (Kant), per Krishna Moorthy J.
88 Dharappa v Bijapur Co-op Milk Producers Societies Union AIR 2007 SC 1848 [LNIND 2007 SC 542]: (2007) 9 SCC 109
[LNIND 2007 SC 542] : (2007) II LLJ 844SC, per Raveendran J.
89 Chandra Spg and Weaving Mills Ltd v State of Mysore (1964) 2 LLJ 604, 610 (Mys) per Tukol J.
90 MK Textile Mills v Punjab State (1962) 1 LLJ 560 (Punj), per Dua J.
91 Kanji Jadhavji & Co v Transport & Dock Workers Union (1969) 2 LLJ 123, 126-27 (Bom) (DB), per Madon J.
92 Hochtief Gammon v State of Orissa (1969) 2 LLJ 207, 208-09 (Ori) (DB), per Barman CJ.
93 Mgmt of Binny Ltd v Govt of Tamil Nadu (1989) 1 LLJ 180, 196-97 (Mad) (DB), per Srinivasan J.
94 Kesoram Cotton Mills Ltd v Second LC (1963) 1 LLJ 169 [LNIND 1962 CAL 131] (Cal), per BN Banerjee J.
95 State of Bihar v DN Ganguly (1958) 2 LLJ 634 [LNIND 1958 SC 92], 639 (SC) : AIR 1958 SC 1018 [LNIND 1958 SC 92], per
Gajendragadkar J.
96 Pioneer Ltd v State of UP, (2011) 2 LLJ 250 (All.), per DP Singh J.
97 Indian Bank Ltd v IT (1961) 1 LLJ 604 (Mad), per Ramakrishnan J.
1 Brought into force wef 21 August 1984.
2 Gwalior Rayon, Mavoor v LC (1978) 2 LLJ 188 (Ker) (DB), per Chandrasekhara Menon J.
3 Girijanandini Devi v Bijendra Narain AIR 1967 SC 1124 [LNIND 1966 SC 149], 1131, per Shah J.
4 Anjilamma v LC-III, Hyderabad (1996) 1 LLJ 733, 737 (AP), per SR Nayak J.
5 Rameshwar Manjhi v Mgmt of Sangramgarh Colliery (1994) 1 LLJ 376 [LNIND 1993 SC 958] (SC) per Kuldip Singh J.
6 Ambabai M Amin v PO, First LC (1987) 1 LLJ 36, 39 (Bom) (DB), per SK Desai J.
7 Prema v Mgmt, Hulkah GSC Society Ltd (1986) 2 LLJ 546 (Kant), per Bopanna J.
8 Ambabai M Amin v PL Majumdar, PO, LC (1987) 1 LLJ 36, 39 (Bom) (DB), per SK Desai J.
9 Dhanalakshmi v Reserve Bank of India (1999) 1 LLJ 1018 (Kant) (DB).

End of Document

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 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER IV Procedure, Powers and Duties of Authorities

The Industrial Disputes Act, 1947 (Act 14 of 1947)

*CHAPTER IV Procedure, Powers and Duties of Authorities

S. 11. Procedure and Powers of Conciliation Officers, Boards, Courts, and

Tribunals.—

1[(1)Subject to any rules that may be made in this behalf, an arbitrator, a Board, Court, Labour Court, Tribunal or
National Tribunal shall follow such procedure as the arbitrator or other authority concerned may think fit.]
(2) A conciliation officer or a member of a Board 2[or Court or the presiding officer of a Labour Court, Tribunal or
National Tribunal] may for the purpose of inquiry into any existing or apprehended industrial dispute, after
giving reasonable notice, enter the premises occupied by any establishment to which the dispute relates.
(3) Every Board, Court, 3[Labour Court, Tribunal and National Tribunal] shall have the same powers as are vested in
a civil court under the Code of Civil Procedure 1908 (5 of 1908), when trying a suit, in respect of the following
matters, namely:
(a) enforcing the attendance of any person and examining him on oath;
(b) compelling the production of documents and material objects;
(c) issuing commissions for the examination of witnesses;
(d) in respect of such other matters as may be prescribed;

and every inquiry or investigation by a Board, Court, 4[Labour Court, Tribunal or National Tribunal]
shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian
Penal Code (45 of 1860).

(4) A conciliation officer 5[may enforce the attendance of any person for the purpose of examination of such person
or call for] and inspect any document which he has ground for considering to be relevant to the industrial dispute
6[or to be necessary for the purpose of verifying the implementation of any award or carrying out any other duty

imposed on him under this Act, and for the aforesaid purposes, the conciliation officer shall have the same
powers as are vested in a Civil Court under the Code of Civil Procedure 1908 (5 of 1908), 7[in respect of
enforcing the attendance of any person and examining him or of compelling the production of documents]].
8[(5)A Court, Labour Court, Tribunal or National Tribunal may, if it so thinks fit, appoint one or more persons having
special knowledge of the matter under consideration as assessor or assessors to advise it in the proceeding before
it.
(6) All conciliation officers, members of a Board or Court and the presiding officers of a Labour Court, Tribunal or
National Tribunal shall be deemed to be public servants within the meaning of section 21 of the Indian Penal
Code (45 of 1860).
(7) Subject to any rules made under this Act, the costs of, and incidental to, any proceeding before a Labour Court,
Tribunal or National Tribunal shall be in the discretion of that Labour Court, Tribunal or National Tribunal and
the Labour Court, Tribunal or National Tribunal, as the case may be, 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 the appropriate
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

government by the person entitled, be recovered by that government in the same manner as an arrear of land
revenue.]
9[(8)Every 10[Labour Court, Tribunal or National Tribunal] shall be deemed to be civil court for the purposes of 11[
Sections 345, 346 and 348 of the Code of Criminal Procedure 1973(2 of 1974)]].
12[(9) Every award made, order issued or settlement arrived at by or before Labour Court or Tribunal or National
Tribunal shall be executed in accordance with the procedure laid down for execution of orders and decree of a
Civil Court under order 21 of the Code of Civil Procedure 1908 (5 of 1908).
(10) The Labour Court or Tribunal or National Tribunal, as the case may be, shall transmit any award, order or
settlement to a Civil Court having jurisdiction and such Civil Court shall execute the award, order or settlement
as if it were a decree passed by it.]

LEGISLATION

This section corresponds to s 9 of the repealed Trade Disputes Act 1929, which dealt with ‘procedure and powers’.
However, the section as enacted in the original Industrial Disputes Act 1947 has been made much wider in ambit and
scope than its counterpart in the old Act. The section has undergone further substantial amendments as indicated in the
footnotes to the text of the section.

SUB-SECTION (1): PROCEDURE IN ADJUDICATION OF THE REFERENCE

Unlike the superior courts, the tribunal being the creation of statute, derives power from the statute. Such tribunals have no
inherent powers. But apart from powers expressly mentioned in the statute, these tribunals may have powers which are
incidental or ancillary. Such incidental or ancillary powers might have been derived by the tribunals either from the
express provisions of the statute creating such tribunals or by necessary implication of the powers conferred.13Section 11
(1) empowers an industrial adjudicator to follow ‘such procedure’ as he ‘may think fit’ subject to any rules that may be
made in this behalf. In other words, the conduct of the adjudication is absolutely within the control of the adjudicator,
subject only to any rules that may be made by the appropriate government in this behalf.14In other words, if the Act and the
Rules prescribe a particular procedure, the adjudicator shall have to follow that and no other procedure. If, however, the
rules are silent on any particular matter, it is open to the adjudicator to follow such procedure, as he may think fit. That is
to say, the width and amplitude of the power of the adjudicator is unrestricted unless the same is restricted by any
provision of the Act and the Rules.15The wide powers given to the adjudicators to follow their own procedure are aimed at
mitigating the rigors of the technicalities of the procedural law for achieving expeditious investigation and settlement of
industrial disputes. However, the words ‘as it thinks fit’ used in this sub-section are not to be taken literally. They do not
mean that an adjudicator or arbitrator is a lawless autocrat and he can follow any procedure or no procedure according to
his whim or fancy or that he can act in one way in one case and in a different way in another case.16 This power is
conferred on the tribunals for regulating the procedure and not for the exercise of the substantive power conferred under
provisions of the Act and is by itself no source of substantive power.17 An adjudicator, therefore, has to follow the rules of
natural justice in carrying out his functions under the statute because the courts have implied such procedure in construing
the statutes.18 Except to the extent specified in sub-s 3 and the relevant rules, the provisions of the Code of Civil Procedure
1908, are not applicable to proceedings before the authorities mentioned in sub-s (1). The provisions of the Evidence Act,
in their strict sense too, do not apply to proceedings before these authorities. Nevertheless, all these authorities, being of a
quasi-judicial character objectively determining matters referred to them, have to exercise their discretion in a judicial
manner, without caprice, and according to the general principles of law and rules of natural justice.19

The first point of importance is that the adjudicator should inform himself as to the nature of the dispute and as to the
powers and duties entrusted to him or, in other words, as to the scope of the reference. His next duty is to hear the case, for
being able to give a decision in the matter. In some cases, the parties may be ready to appear before the adjudicator at once,
but in others, time may be required by the parties for the preparation of their cases or preliminary proceedings may be
necessary before the actual hearing. In connection with adjudication, it is necessary to consider the evidence that may be
adduced by the parties, the circumstances under which the adjudicator may obtain the assistance of assessors, and the
method of dealing with points of law which may arise in the course of the adjudication. An arbitrator under s 10A, labour
court, industrial tribunal or national tribunal which has to adjudicate upon a matter on reference under s 10 or s 36A or
applications under s 33 or s 33C(2), exercises quasi-judicial powers which means that certain content of the judicial
powers of the state is vested in it and it is called upon to exercise it.20 A quasi-judicial decision pre-supposes an existing
dispute between two or more parties and involves presentation of their case by the parties to the dispute and if the dispute
between them is on a question of fact, the ascertainment of the fact by means of evidence adduced by the parties to the
dispute and often with the assistance of arguments by or on behalf of the parties on the evidence.21 Parties are arrayed

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 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

before these quasi-judicial tribunals. There is thus a lis between the parties. There would be assertion and denial of facts on
either side. With the permission of the tribunal and consent of the opposite side, parties are entitled to appear through legal
practitioners before these quasi-judicial tribunals. The system adopted by these tribunals is the adversary system, a word as
understood in contradistinction to inquisitorial system. Rules 9 to 30 contained in Pt III of the Industrial Disputes (Central)
Rules 1957 and the forms prescribed thereunder, lay down the powers, procedure and duties of these tribunals. Forms
prescribed under the rules are more or less analogous to a plaint in a suit and the reply to be filed would take, more or less,
the form of a written statement. Any party appearing before these tribunals must make a claim or demur a claim of the
other side. Where the parties are at variance, for facility of disposal, issues will have to be framed. It is open to the tribunal
to frame an issue and dispose it off as a preliminary issue.22

Parties have to lead evidence. When there is a burden upon a party to prove or establish the fact so as to invite a decision in
its favour, it has to lead evidence. Obligation of leading evidence to establish an allegation or averment made by a party is
on the party making such allegation or evidence. It must seek an opportunity to lead evidence but evidence can be led only
in support of the contentions pleaded. If there is no pleading raising a contention, there is no question of substantiating
such a non-existing contention by evidence. It is well-settled that, an allegation which is not pleaded, even if there is
evidence in support of it, cannot be examined because the other side had no notice of it and if entertained, it would
tantamount to granting an unfair advantage to the first party. Though pleadings before such tribunals have not to be read
strictly, it is equally true that pleadings must be such as to give sufficient notice to the other party of the case it is called
upon to meet.23 The rules of fair-play demand that where a party seeks to establish a contention which, if proved, would be
sufficient to deny relief to the opposite side, such a contention has to be specifically pleaded and then proved. But if there
is no pleading, there is no question of proving something which is not pleaded. The tribunal would then proceed to decide
the lis between the parties. It has to decide the lis on the evidence adduced before it by the parties, in respect of the
averments and allegations made and contentions raised in their pleadings. Rule 15 provides that the tribunal may accept,
admit or call for evidence at any stage of the proceedings before it and in such a manner as it may think fit. While it may
not be hidebound by the Rules prescribed in the Evidence Act, it is nonetheless a quasi-judicial tribunal proceeding to
adjudicate upon a lis between the parties before it and must decide the matter on the evidence produced by the parties
before it. It would not be open to it to decide the lis on any extraneous considerations. Justice, equity and good-conscience
will inform its adjudication. Therefore, these tribunals have all the trappings of a court of law. Sub-section 1 of s 11
confers powers upon the authorities mentioned therein to follow such procedure as they ‘may think fit’ and sub-s 3 confers
upon them powers of a civil court under the Code of Civil Procedure in respect of matters therein specified.24 Rules 10A
and 10 B of the Industrial Disputes (Central) Rules 1957 prescribe the procedure for filing pleadings of the parties,
hearings, grant of adjournments, examination of witnesses etc before the labour courts, the tribunals and the national
tribunals, it has been made mandatory for the national tribunals to follow the procedure laid down in r 5 of O 18 of the
First Schedule to the Code of Civil Procedure 1908 while it is only directory for the labour courts and the industrial
tribunals to follow these provisions of the Code of Civil Procedure if they consider it necessary in view of the nature of the
particular industrial dispute pending before them.

(i) Notice of Proceedings

An industrial adjudicator, after receipt of a reference, is enjoined to serve notice upon the parties to the reference in
accordance with the relevant rules. But it is not clear as to whether the government should give notice to the parties when it
makes an order of reference. Rule 13, however, requires the authority to whom a reference has been made to ‘inform the
parties’ of the time and place of hearing fixed by it ‘in such manner as he thinks fit’. Rule 18 prescribes that any notice or
summons of such authority may be served either personally or by registered post. Rule 19 lays down the manner of
describing the parties where there are numerous persons arrayed on any side before such authority. Rule 20 prescribes the
manner of service in a case where there are numerous parties to a dispute. In GSeshagiri Rao, a notice was issued by the
labour court under r 20 of the Andhra Pradesh Industrial Rules, which provides that a notice, summons, process or order
may be served either personally or by registered post. The notice was returned with the postal indorsement ‘not available’.
Thereupon a second notice was again issued and that was also returned with the postal indorsement ‘evading to take
delivery’. In these circumstances, the labour court found it unnecessary to order notice once again to the workman. The
Andhra Pradesh High Court held that there was no service either personally or by registered post. It was held that the case
of evasion to take delivery could not be equated with service of the notice. Therefore, the requirement of personal service
or service through registered post was not complied with. Consequently, the award of the labour court was quashed.25

On the construction of r 22(2) of the Industrial Disputes (Bihar) Rules, the Patna High Court in Rameshwar Prasad, held
that the correct, reasonable and legitimate view is that when an industrial dispute is raised on behalf of the entire body of
workmen, they must be deemed to have knowledge of the reference when the notification is published in the Gazette.
Hence, publication of the notification must be held to be constructive notice to them and it is not obligatory on the
government to forward copies of orders of reference to all the unions if there be more than one which have raised the
dispute individually or collectively or to other workmen who are not members of any union. It is not possible to do so nor

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any rule casts any such obligation on the government. Nor is there any obligation on the tribunal to give any notice to the
workmen individually either in accordance with r 22(2) of the Bihar Rules or otherwise. However, the High Court
observed that it would be better for the tribunals to whom reference is made, to avoid any technical dispute, to take
recourse to the general method of service of notice prescribed in r 22(2) of the Bihar Rules which would obviate any
objection. A reasonable notice of the time and place of hearing should be given to the parties so that they may be prepared
for the hearing.26 An award made by a tribunal without summoning the parties likely to be affected by its award will be
fundamentally wrong.27 In Bengal Box Manufacturing Co, the facts were: on the date fixed for hearing of the dispute
before the industrial tribunal, none of the parties appeared; hence the tribunal fixed another date for hearing. Even on the
next date, none of the parties appeared. The notice of hearing was not sent to the principal place of business of the
employer, but was sent to another address, which was returned as ‘refused’. Hence, the tribunal fixed another date for ex
parte hearing with notice only to the union and passed an ex parte award against the employer. The award was challenged
by the employer on the ground of violation of the rules of natural justice. The High Court quashed the award holding that
proper opportunity was not given to the employer for presenting its case and the case was remanded to the tribunal for
hearing after fresh service of notice was served to the employer firm at its principal place of business.28

(ii) Procedure and Practice

Though an adjudicator has the power to follow his own procedure, it is usual practice in all adjudication proceedings to
follow the procedure of an action at nisi prius, ie, a civil suit before a civil court. Depending upon the terms of the order of
reference, the tribunal will decide which party shall have the right to begin, by custom the party having to prove the
affirmative is entitled to open to the case first. After the receipt of the order of reference, the adjudicator issues a notice to
the parties to the dispute and then the following order of proceedings is usually followed:

(1) The claimant files his claim statement.

(2) The respondent files the reply to the claim statement.
(3) The claimant may file a rejoinder to the reply of the respondent.
(4) On these pleadings, the adjudicator frames issues. It also may frame preliminary issues where preliminary
objections are raised.
(5) The claimant opens his case by himself or through his representative and examines his witnesses, who are, in turn
cross-examined by or on behalf of the respondent.
(6) The respondent opens his case by himself or through his representative and examines his witnesses, who are, in
turn cross-examined by or on behalf of the respondent.
(7) The claimant or his representative addresses ‘oral arguments’ to the tribunal.
(8) The respondent or his representative addresses his ‘arguments’ to the tribunal.
(9) The claimant may reply to the arguments of the respondent.
(10) The hearing is then finished and the case is closed by the parties. Then it only remains for the tribunal to consider
the materials before him and prepare his award.

In JK Iron, Bose J delineated the contours of the scope of the procedural jurisdiction of the industrial tribunals in following
words:

Very broadly it follows the pattern of the civil courts when the reference is made by government, the tribunal has to take the
pleadings of the parties in writing and to draw up issues. Then it takes evidence, hears arguments and finally pronounces its
‘judgments’ in open court. It is evident from this that though these tribunals are not bound by all technicalities of civil courts, they
must nevertheless follow the same general pattern. Now, the only point of requiring pleadings and issues is to ascertain the real
dispute between the parties to narrow the area of conflict and to see just where the two sides differ. It is not open to the tribunals to
fly off at a tangent and disregarding the pleadings, to reach any conclusions that they think are just and proper.29

This principle equally applies to the adjudicatory proceedings on a reference under s 10 or on an application under s 33 as
well as on a petition under s 33C(2).30It is the duty of the tribunal to act fairly between the parties and to hear and
determine the case as a judge upon the evidence, oral and documentary, adduced before, him. If the tribunal allows a
prayer from one party, it should not refuse a similar prayer by the other party.31 He should endeavour to exclude from his
mind any previous personal knowledge or pre-conceived notion of the dispute. Both parties should be present when the
hearing is commenced unless the case has taken such a course as to justify the tribunal in proceeding ex parte. Subject to

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this exception, the case should be opened and the evidence taken in the presence of both the parties. At no time during the
adjudication proceedings should the tribunal receive any evidence or communication, relating to the case from one of the
parties or give him an attendance behind the back of another. To do so would have the appearance of partiality or unfair
dealing between the parties which might vitiate the award. If any such communication does come before him he should at
once inform the other party. It is desirable that all entries in the roznama of the tribunal in the proceedings should be
signed by the presiding officer and all corrections or alterations therein should be signed or initialed by him. Not doing so
would leave scope for the parties to make allegations with respect to the correctness of such corrections or alterations.32

(iii) Parties

Section 11(3) of the Act prescribes, inter alia, that the tribunal shall have the same powers as are vested in a civil court
under the Code of Civil Procedure, when trying a suit in respect of the matters specified in cll (a) and (b), from which it is
clear that the power to add a party to the proceedings pending before a tribunal, which a civil court may exercise under the
Code of Civil Procedure, O 1, r 10, is not included in s 11(3). There is no other section in the Act which confers such a
power on the tribunal. However, there is ample authority under s 18(6) to add any person, including the government or
establishment, whose presence is necessary or proper for due adjudications. In other words, while dealing with an
industrial dispute, if the tribunal comes to the conclusion that persons other than those mentioned as parties to the order of
reference were necessary for a valid determination of the dispute, it has the power to summon them; and if such persons
are summoned to appear in the proceedings, the award of the tribunal would be binding on them. Since in cases where
persons are added as parties to an industrial dispute, are likely to raise the question as to whether the joinder of the parties
was justified or not, s 11(3)(b) requires that the tribunal should record its opinion as to whether these persons were
summoned without proper cause. However, it is not open to the tribunal to travel materially beyond the terms of reference
for it is well-settled that the terms of reference determine the scope of its power and jurisdiction from case to case. In other
words, this power cannot be exercised by the tribunal so as to enlarge materially the scope of the reference itself, because
basically the jurisdiction of the tribunal to deal with an industrial dispute is derived solely from the order of reference made
by the appropriate government. ‘If the reference directs the tribunal to adjudicate upon a dispute between X and Y, the
tribunal cannot enlarge the scope of inquiry by bringing in additional parties’. Addition can be made incidentally but not
substantially so as to open up new avenues of inquiry. The test in such cases, therefore, must always be: Is the addition of
the party necessary to make the adjudication effective and enforceable?33 Once a person is impleaded as a party in the
proceedings before a tribunal, principles of natural justice would require that he should be given an opportunity to lead his
own and rebut evidence of other sides.34

(iv) Representation of Parties

A party to an industrial dispute may conduct his case in person or they may be represented by a representative as permitted
by s 36 of the Act.

(v) Pleadings

It is well-settled now that the industrial adjudicators are exercising quasi-judicial powers. A quasi-judicial decision
presupposes an existing dispute between two or more parties and involves presentation of their case by the parties to the
dispute and if the dispute between them is on a question of fact, the ascertainment of the fact by means of evidence
adduced by the parties to the dispute. Any party appearing before the adjudicator must make a claim and demur the claim
of the other side and when there is a burden upon it to prove or establish the fact so as to invite a decision in its favour, it
has to lead evidence.35 Claim statements and written statements are called for enabling the parties to set out their own cases
as well as to give the adversary an opportunity to meet the objections.36 A tribunal is not required to advise the parties
about their rights or what they should do or omit to do.37 Normally, in industrial adjudication, the plaint of the workmen is
known as ‘claim statement’ to which the employer files the ‘written statement’. Then, the workmen may file a ‘rejoinder’ to
the ‘written statement’ of the employer. These pleadings are to be made as prescribed by the rule of the ‘appropriate
government’. Rule 10B of the Industrial Disputes (Central) Rules 1957 provides procedure before the adjudicatory
authorities. Sub-rules (1) to (4) prescribe procedure and the time-limit for filing the pleadings before such authorities.
Various states have promulgated their own rules detailing the procedure of filing the pleadings. Since under s 10(4), the
tribunal has to confine its adjudication to the points specified in the order of reference and matters incidental thereto, the
parties are not permitted to introduce any matters de hors the points of reference and matters incidental thereto. The
parties, however, may raise preliminary objections with respect to the maintainability of the reference. At the preliminary
hearings, any question as to the production of documents may be raised and the adjudicator’s directions taken thereon. It is
within the power of the tribunal to make an order for ‘discovery, production and inspection of documents’. It is common
practice in industrial adjudication for the parties to exchange lists of documents upon which they rely and to which they
propose to refer in the proceedings. An adjudicator will generally make an order to this effect-a course which, although not
so far-reaching as an order for discovery, is often sufficient to meet the requirements of the dispute.

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Pleadings in industrial disputes need not strictly conform to the provisions of the Civil Procedure Code. Not only for the
reason that the Code of Civil Procedure has restricted application to the industrial adjudication under the Act, but the fact
that the Workers generally are illiterate and not conversant with legal formalities, has also to be borne in mind. Hence, the
pleadings in industrial adjudication cannot be strictly construed. Merely because a provision of law has not been mentioned
in a pleading, it cannot be said that there was no proper pleading as long as a party is not taken by surprise and disabled
from leading proper evidence to meet the case of the opposite party.38For instance, where though s 9A of the Industrial
Disputes Act was not pleaded by either party, the consideration of that provision by the tribunal was upheld by the High
Court because it had a vital bearing on the dispute before it.39 but the rules of natural justice require that the pleadings must
at least be such as to give sufficient notice to the other party of the case it is called upon to meet.40 In any case, the
pleadings must be definite for laying the foundation of the evidence in the case. Though the pleadings before the industrial
tribunals have not to be read strictly, it is equally true that the pleadings must be such as to give sufficient notice to the
other party of the case, it is called upon to meet. Where a party seeks to establish a contention, which if proved would be
sufficient to deny relief to the opposite side, such a contention has to be specifically pleaded and proved. If there is no
pleading, there is no question of proving something which is not pleaded. In other words, a contention which is not pleaded
even if there is evidence in support of it, cannot be examined because the other side has no notice of it and if entertained, it
would tantamount to granting an unfair advantage to the first party.41 It is well settled that no amount of evidence can be
looked upon a plea which was never put forward. The reason is that a party cannot be allowed to benefit himself from such
evidence which is at variance with his pleadings. If he were allowed to do so, the opposite party would be taken by
surprise.42 After a plea has been rejected by the tribunal, a party cannot be permitted to make a somersault and take a
different plea. For instance, where the management had taken the plea that the employee in question was not a workman
because he was employed in a supervisory capacity and was drawing wages more than Rs 1600 was not allowed
subsequent to the rejection of this plea, to take the new plea that the employee was actually employed in a managerial and
administrative capacity.43

(vi) Amendments

The amendments are to be allowed so as to give full effect to the adjudication without, however, causing substantial injury
to the other party. An injury may be remedied by an amendment and an appropriate order as to costs. The principle
governing the amendments of pleadings cannot be better stated than in the words of Shah J speaking for the Supreme Court
in Jai Jai RM Lal:

Rules of procedure are intended to be a hand-maid to the administration of justice. A party cannot be refused just relief merely
because of some mistake, negligence, inadvertence or even infraction of the rules of procedure. The court always gives leave to
amend the pleadings of a party, unless it is satisfied that the party applying was acting mala fide, or that by his blunder, he had
caused injury to his opponent which may not be compensated for by an order of costs. However, negligent or careless may have
been the first omission, and, however, late the proposed amendment, the amendment may be allowed if it can be made without
injustice to the other side ... all amendments should be permitted as may be necessary for the purpose of determining the real
question in controversy between the parties, unless by permitting the amendment injustice may result to the other side ... In our
view, there is no rule that unless in an application for amendment of the plaint it is expressly averred that the error, omission or
mis-description is due to a bona fide mistake, the court has no power to grant leave to amend to plaint. The power to grant
amendment of the pleadings is intended to serve the ends of justice and is not governed by any such narrow or technical
limitations. 44

Thus, the tribunal always ought to give leave to amend pleadings of a party, unless it is satisfied that the party applying
was acting mala fide or that by his blunder he caused injury to his opponent which cannot be compensated for by an order
of costs. However, there is no rule that in the application for amendment, the party must expressly aver that the error,
omission or mis-description was due to a bona fide mistake. It would be sufficient if a prima facie case for the amendment
is made out by the applicant. The amendment can only be refused on recording findings that the party applying was acting
mala fide or the injury caused to the opposite party by the mistake, omission or mis-description committed by the applying
party cannot be compensated for by payment of costs. But where no injury is caused to the opponent and the applying
party acted bona fide, the rules of natural justice required that in appropriate cases, the tribunal may allow the amendment
of pleadings. In other words, the industrial adjudicators are competent to allow the parties, when they are not actuated by
any oblique motive, to modify their pleadings to sub-serve the interests of justice.45 In Patna Electric Supply, the original
application was filed by the employer for permission to dismiss the concerned workmen from its employment under a
particular Standing Order but by a subsequent application, the employer sought permission to discharge the workmen
under a different Standing Order, thus altering the relief which it had prayed for in his original application. In other words,
the subsequent application, in substance, was a new application made by the employer to the tribunal, though relying upon
the same facts and circumstances which were set out in the original application. This application was resisted by the

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workmen, but was entertained by the tribunal in permitting the employer to discharge the concerned workmen. In view of
the express finding recorded by the tribunal that the application for leave to discharge the workmen was bona fide and
what the employer did by making the subsequent application was actuated by the honest motive of exercising its right to
discharge the workmen under the relevant Standing Orders instead of dismissing them, the Supreme Court held that once
the tribunal was of the opinion that the subsequent application and the discharge of the workmen for which its permission
was sought was in the honest exercise of the employer’s right, its decision could not be assailed. Amendment of pleadings
should be liberally allowed provided it does not make out a new case. 46

In Royal Nepal Airlines, the Calcutta High Court upheld the validity of an amendment of the written statement for bringing
on record the fact that a certain employee was a Nepalese national because the question of nationality was relevant for the
determination of relief to be granted. The court observed that there was no reason why such amendment should not be
allowed and it could not be said that it would extend the scope of the dispute or introduce a new dispute.47 Likewise, in
Lipton, the tribunal disallowed the amendment of an application filed by the employer for amending its written statement
for the reason that the application was ‘belated, repetitive, argumentative, raising legal pleas and was mala fide in certain
other respects’. The Delhi High Court set aside the order of the tribunal holding that the amendments sought were neither
frivolous nor in the nature of surprise to the workman concerned nor did they amount to withdrawal of any admission
made by the management earlier. The amendment application was made even before the evidence of the workmen was
started. In that sense the application was not belated. The mere fact that the application was repetitive and argumentative
and in some parts legal submissions were elaborate, did not make the application bad in law or mala fide. The holding of
the tribunal, therefore, was contrary to well-known principles of law in regard to amendment of pleadings.48

(vii) Issues

In Shankar Chakravarti v Britannia Biscuit Co , the Supreme Court observed:

‘Where parties are at variance for facilities of disposal, issues will have to be framed.’ Issues in industrial disputes are usually of
two types, namely, (a) issues referred by the government for adjudication, and (b) incidental issues which are sometimes issues of
law or issues of mixed law and fact.49

As far as issues of the first category are concerned, there is no question of framing such issues by the tribunals, because
they have to adjudicate upon such issues as are referred to them. The tribunal has no power to vary or alter such issues.
However, on pleadings of the parties, the tribunals may frame issues of the second category. Such additional or ancillary
issues are framed for better appreciation of the cases of the parties with reference to the principal issue or issues which
have been referred for adjudication and on the basis of which the jurisdiction of the tribunal will have to be determined.50 It
is open to the tribunal to frame an issue on a jurisdictional point and dispose it off as a preliminary issue. The tribunal may
as well frame preliminary issues if the point on which the parties are at variance, as reflected in the preliminary issue,
would go to the root of as the matter. However, the tribunal cannot travel beyond the pleadings and arrogate to itself the
power to raise issues which the parties to the reference are precluded or prohibited from raising; to wit if the employer does
not question the status of the workman, the tribunal cannot suo motu raise the issue and proceed to adjudicate upon the
same and throw out the reference on the sole ground that the concerned workman was not a ‘workman’ as defined in the
Act.51 Sometimes, the failure of the tribunal to frame such preliminary issues may lead to miscarriage of justice. For
instance, where having framed one omnibus vague issue as to validity of a Worker’s dismissal, because of criminal
misconduct, the tribunal committed several errors in proper assessment of evidence and laid wrong burden of proof on the
management in respect of points of fact not even agitated in the pleadings and which the management was not even called
upon, in law, to meet, the resulting award was held to be defective.52

But where the tribunal has ascertained the real dispute, the omission to frame formal issues cannot by itself vitiate its order,
if it has dealt with the contentions raised by the parties before it.53 In framing the issues, the tribunal has to consider the
question of placing the burden of proving the issue on one of the two parties. All that ‘burden of proof means is as to who
has the right to begin leading evidence. The tribunal also in its discretion may, in the circumstances of a case, shift the
burden of proof from one party to another. A single judge of the Punjab and Haryana High Court has taken the view that
the question of shifting of burden of proof on an issue howsoever erroneous is not amenable to judicial review.54 If an
objection as to the maintainability of the dispute or jurisdiction of the tribunal is raised, the tribunal has to examine it as a
preliminary issue. The finding which the tribunal may record on this preliminary issue, will decide whether it has
jurisdiction to deal with the merits of the dispute or not. For instance, in a disciplinary case, the tribunals must decide the
legality and validity of the domestic inquiry as a preliminary issue and on that decision being pronounced, it will be for the
management to decide whether it will adduce any evidence before the tribunal.55 The consequences which ensue if the
domestic inquiry is valid, are entirely different from the consequences which ensue if it is held invalid. In other words,
scope of inquiry and hearing gets restricted or enlarged, as the case may be. Therefore, it is not possible for the tribunal to

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hear such a preliminary issue along with the main reference, as the scope of hearing and inquiry stands restricted and
enlarged, depending on the finding one way or the other on the preliminary issue.56 If the tribunal finds that it has no
jurisdiction, there will be an end of the proceedings before it, so far as the main dispute is concerned and the tribunal will
have no jurisdiction to go into the merits of the reference and any finding recorded by the tribunal on merits will be
ineffective, being without jurisdiction.57

(viii) Burden of Proof

The general principle of the law of evidence is that he who asserts must prove. In other words, burden of proof is the
obligation to adduce evidence to the satisfaction of the tribunal or court in order to establish the existence or non-existence
of a fact contended to by a party. The principle of burden of proof is founded on the rule of roman law, ie, ei incumbit
probatio, qui dicit, non qui negat—the burden of proving a fact rests on the party who substantially asserts the affirmative
of the issue and not upon the party who denies it, for a negative is usually incapable of proof. This rule of evidence has
been adopted in practice not because it is impossible to prove a negative but because the negative does not admit of direct
and simple proof, of which the affirmative is capable. The expression ‘burden of proof has two distinct and often blurred
meanings viz:

(a) the burden of proof as a matter of law and pleadings. This, burden, as it has been called, for establishing a case, whether
by preponderance of evidence or beyond a reasonable doubt; and,
(b) the burden of proof in the sense of introducing evidence.

In the Indian Evidence Act, s 101 uses the expression in the former sense while s 102 uses it in the latter sense. The former
type of onus viz the burden of proof of the facts in issue is usually known as the general burden of proof or the burden of
proof on pleadings. This type of burden of proof has been called by jurists, the ‘legal burden’. The phrase ‘legal burden’
was coined by Lord Denning while the phrase ‘persuasive burden’ was used by Dr Glanville Williams. Other jurists have
referred to it as the burden of proof on the pleadings.58 This burden is entitled to be called the ‘legal burden’ because its
incidence is determined by the substantive law, and the adjective ‘persuasive’ gives some indication of its real nature. The
legal or persuasive burden is the burden borne by the party who will lose the issue unless he satisfies the tribunal of the
facts to the appropriate degree of conviction. The pleadings do not always indicate which party bears the burden, and the
answer to a somewhat controversial question is assumed if it is said to be ‘fixed’, for the epithet is designed to emphasise
the fact that this burden does not shift in the course of a trial-a matter of words about which there is room for two views in
the case of issues to which certain rebuttable presumptions of law are applicable.59 The latter type of onus is called the
professional or the tactical burden.60 The burden of proof in the first sense is fixed at the beginning of the trial by the state
of pleadings and it is settled as a question of law, remaining unchanged, throughout the trial exactly where the pleadings
place it and never shifts in any circumstances whatsoever. The burden of proof in the second sense, however, constantly
shifts, as one scale of evidence or the other preponderates.61

In Shankar Chakravarti, the Supreme Court observed that though the adjudicatory authorities under the Act have all the
trappings of a court, they are not hide-bound by the statutory provisions of the Evidence Act. Section 11 (3) of the Act
confers on them powers of a civil court under the Code of Civil Procedure, only in respect of the matters specified therein.
Such authorities are created for adjudication of the industrial disputes between the parties arrayed before them. Their
functions being of quasi-judicial nature, they have to adjudicate upon such disputes, on the basis of pleadings of the parties
and the evidence adduced before them in accordance with the rules of natural justice. Therefore, any party appearing
before anyone of such authorities must make a claim or demur the claim of the other side. When there is a burden upon a
party to establish a fact so as to invite a decision in its favour, it has to lead the evidence. The obligation to lead evidence
to establish an averment made by a party is on the party making the averment. The test would be as to who would fail if no
evidence is led. Such party, therefore must seek opportunity to lead evidence. The burden of proof in this sense as the
proceedings advance, may be as to shifted from one party on whom it rested at the first instance by his proving facts which
raise a presumption in his favour. In other words, the difference between the onus of proof and burden of proof is that the
onus of proof is fixed whereas the burden of proof shifts, is to be borne in mind. It is, however, not necessary that such
burden must be discharged by positive evidence of a party. A party could rely on the evidence given by the other party and
prove certain facts. In case, no evidence is adduced on either side, the party on whom the onus lies to prove certain facts
must fail. But if it has on the evidence no difficulty in arriving at a definite conclusion, then the burden of proof on the
pleadings recedes to the background.62 Where, however, evidence has been led by the contesting parties on the mooted
question, abstract considerations of onus are out of place and in such a situation the truth or otherwise of the case must
always be adjudged on the evidence led by the parties.63 This point has been illustrated in the judgment of the Supreme
Court in Damodar Valley Corpn, in which an argument was advanced on behalf of the management that the contents of a
document filed along with the written statement on behalf of the workmen before the tribunal were not explained by any
witness with reference to categories of workmen eligible to construction allowance. But the court held that this did not

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absolve the management, which was in possession of all information, of its responsibility to place the necessary materials
before the tribunal to show the distinguishing and differentiating feature of the categories of workmen entitled to
construction allowance. Since the management was in possession of all facts, it was for it to furnish the relevant
information to the tribunal.64

The Evidence Act does not apply to industrial adjudicators, but even so the principle of law enunciated on the burden of
proof and onus, is a basic principle of law which the industrial tribunals are also required to follow. If there is no sufficient
evidence on the part of a party to prove the existence of facts which would entitle him to the reliefs prayed for, it must be
held that he has failed to discharge the burden of proof on pleadings which lie on him only. Where the court finds it
difficult to make up its mind, the question comes to the fore-ground and takes a deciding factor. When after the entire
evidence is adduced, the tribunal feels that it cannot make up its mind as to which of the versions is true, it will hold the
party on whom burden lies, has not discharged the burden.65 Where an employee claims that he is entitled to a benefit
under the provisions of ch 5 A, by claiming compensation for retrenchment, he must prove that he was retrenched from
service. Normally, it is for the person putting forward the claim to establish the facts and circumstances supporting his
claim. It is not for the employer to prove that the discharge or termination of the services of the employee was otherwise
than by way of retrenchment.66 Likewise, where the workman alleged a practice of the management, that bonus had been
paid even to Workers dismissed for misconduct in the prior years, the burden of proof as to such practice is on the
workman and the management cannot be asked to prove that there was no such practice. But on the other hand, in case of
the refund of the security which belongs to the workman and normally he is entitled to its refund, it is for the management
to prove satisfactorily that it had a lien on that amount for loss caused to it. 67

In Dominent Offset, where the management terminated the services of a few workmen by serving on them a notice of
termination containing allegations of indisciplined behaviour purporting to be in terms of the Standing Orders, but without
holding any inquiry into the said allegations, a single judge of the Punjab and Haryana High Court held that the burden lies
on the management to prove that its action has a legal basis in the Standing Orders.68 Where the workmen claimed that
they did not resign from service, but alleged that the management forged the blank papers on which it obtained their
signatures/thumb impressions and terminated their services, the burden of proving that the management so obtained their
signatures/thumb impressions on blank papers rests on the workmen who raised the dispute, and it is only after such
evidence is adduced that the management should be called upon to prove that the workmen have voluntarily resigned.69
While the burden of proof of misconduct lies with the employer, the contention of victimisation has to be proved by the
employee.70 When the industrial tribunal is called upon to decide the validity of domestic enquiry as preliminary issue, the
burden of proving such validity is on the employer who wants to rely on the fairness of domestic enquiry in defence.71 In
Northcote, a single judge of the Bombay High Court held that, where a ‘resident medical officer’ raised an industrial
dispute against his dismissal, which was contested by the employer, the burden was on the employee to prove that he was a
‘workman’ within the meaning of s 2(s) and it was not for the management to prove the negative facts.72 Where the
workman claimed that he had worked for over one and a half year before being terminated on grounds of unauthorised
absence, the burden of proof is cast on the person having the best evidence, ie, the management. The management having
failed to produce the muster roll, adverse inference has to be drawn against them.73 In Range Forest Officer, the Supreme
Court held that where the workman claims to have worked for 240 days in a year preceding his termination not supported
by salary receipt or record, the onus of proving that he had worked for 240 days lies on him, and that the mere filing of an
affidavit, being only his statement in his favour, is not adequate evidence for a court or tribunal to come to the conclusion
that the workman had, in fact, worked for 240 days in the year preceding his termination.74 Where the management
contended that the employee, who was employed as gradation analyst and assistant production manager was not a
workman within the meaning of s 2(s), the burden of proving that he was not a workman lies on the management.75 Where
the labour court upheld the contention of the employer that the workman, whose service were terminated, had worked only
for 239 days (ie, less than 240 days) and hence there was no violation of s 25F, and the High Court reversed the order of
the labour court, the Supreme Court held that the burden of proving that he had worked for 240 days was on the workman
and he himself having stated at the evidence stage that he had not worked for 240 days, the High Court erred in
overturning the order of labour court without there being anything to show that the said order was perverse, and, hence, the
order of High Court is set aside.76

(ix) Ex-parte Adjudication

At the time of the commencement, the parties should be present unless the case has taken such a course as to justify the
adjudicator in proceeding ex parte. If, however, a party willfully absents himself or conducts himself in such a way that the
adjudication is likely to be impeded, or willfully tries to delay or avoid the proceedings, the tribunal may fix a preemptory
hearing on a particular day. After reasonable notice of hearing has been given to the defaulting party, if he still neglects or
refuses to attend, the tribunal may and ought to hear in his absence. Prompt discharge of business is of particular
importance before a tribunal adjudicating an industrial dispute. Dilatory tactics must, therefore necessarily be discouraged.
When a claimant in a dispute appears to be contumacious in his conduct, the tribunal is justified in relieving the opposite

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party of the ill-effects of such harassing dilatoriness.77 But to proceed ex parte is a serious matter, and before doing so the
tribunal should satisfy itself that the absenting party has no good ground for not appearing. Rule 10B(9) of the Industrial
Disputes (Central) Rules 1957 prescribes the procedure to be followed by a labour court, tribunal or national tribunal and r
22 empowers the authorities specified therein to proceed ex parte where any party fails to attend or to be represented, as if
that party ‘had duly attended or had been represented’. Rule 10B(9) and r 22 somewhat overlap one another. However, the
purpose of both the provisions is that if any party, without sufficient cause, defaults and fails to appear at any stage of
adjudication before the tribunal, the tribunal may proceed with the reference ex parte and decide the reference or any
application in the absence of the defaulting party. But the proviso to sub-r (9) provides that on an application made by
either party before the submission of the award, the tribunal may revoke its order to proceed ex parte, if it is satisfied that
the absence of the party was on justifiable grounds. However, neither the Act, nor the Rules framed under it authorise or
empower an industrial adjudicator to decide references without going into the merits of the disputes even in cases where
one of the parties does not file written statements or does not appear before it.78

A rule empowering the tribunal to proceed ex parte if a party is absent and sufficient cause is not shown for his absence,
would not enable it either to do away with the inquiry or to straightway pass an award without giving a finding on the
merits of the dispute. In other words, the absence of a party does not entail consequence that an award will straightway be
made against him.79 A reference made to an adjudicatory authority, by appropriate government under s 10, confers upon it
jurisdiction to adjudicate on the issues referred to it. Section 20(3) says that the proceedings before such an authority
commence on the date of reference of the dispute and are concluded on the date on which the award becomes enforceable
under s 17A. A reference under s 10 sets in motion adjudication proceedings and they cannot be stopped except by passing
of award. An adjudicatory authority cannot refuse to adjudicate on the dispute and it cannot dismiss the dispute for non-
prosecution. It is of necessity to make an award and forward the same to the appropriate government. An award, once
published, becomes final and enforceable after the lapse of 30 days from the date of publication and it cannot be called into
question by any court in any manner whatsoever.80 To satisfy the definition of an award, there must be an interim or final
‘determination’ of the dispute and there is none where the tribunal merely dismisses the reference for non-prosecution.81
The normal procedure before a tribunal is that whenever a date is fixed, parties or their representatives are required to note
the next date and sign the order sheet accordingly. In case on a date fixed for hearing, there is no sitting of the tribunal for
unforeseen reasons, the parties are not required to appear before it. In such a case, unless the next date is fixed in the
presence of the parties or their representatives, the tribunal cannot proceed with the case on the next date without
informing the parties concerned about it. In UPRTC, on a date fixed for hearing, the presiding officer of the tribunal was
absent and another date was fixed for hearing in the absence of the parties. On the next date of hearing, the tribunal made
an ex parte award against the employer directing the reinstatement of the workman with back wages. The application of
the employer for setting aside the ex parte award was also rejected by the tribunal. A single judge of the Allahabad High
Court set aside the award holding that the tribunal by not granting an opportunity to the employer of being heard violated
the principles of natural justice.82 Likewise, where the tribunal arbitrarily rejects the application for setting aside the ex
parte award, such order of the tribunal is liable to be set aside.

In Jagran Prakashan, the employer’s representative could not attend the hearing before the tribunal because on his way he
fell from the bus and suffered injuries. The tribunal rejected the application for the reason that the name of the employer’s
representative was not mentioned in the application for setting aside the ex parte award though it was mentioned in the
affidavit in support of the application. A single judge of the Allahabad High Court set aside the order of the tribunal being
not proper. The further reason of the tribunal for rejecting the application that some other person should have been deputed
to conduct the case was not found proper.83 The expression ‘ex parte’ only means in the absence of the other party but the
absence of such party shall not hinder or affect the progress of the proceedings. Rule 22 not only authorises an
adjudicatory authority to proceed in the absence of a party, but it also creates a fiction which enables the tribunal to
presume that all the parties are present before it although, in fact, it is not true, and thus make an ex parte award. Hence, an
adjudicator may imagine that the absentee is present, and having done so, he may give full effect to his imagination and
carry it to its logical conclusion. It has to bear in mind the purposes for which fiction is created and has to give effect to
them. Obviously, the intention of r 22 is to enable the tribunal to imagine that a person is present, he is unwilling to adduce
evidence or argue his case. The adjudicator then has of necessity to pass an order on the basis of the evidence placed before
it by the party that, in fact, participated in the proceedings. That is the object of the fiction caused by the words ‘as if he
had duly attended’. Of course, this does not mean, that the adjudicator could have shut his eyes to the intrinsic character of
such evidence produced by the party present and blindly put its imprimatur to it. It has to apply its mind like any other
judicial officer who examines the evidence and hears arguments before forming conclusions. In other words, the
adjudicator has to focus his judicial mind on the merits of the points in dispute, impartially, dispassionately and
objectively.84

He is required to take into account the pleadings of the parties and whatever evidence has been produced by the other party
and come to a judicial conclusion stating its reasons for the same.85 But the tribunal is not saddled with the additional
responsibility to embark on an independent research and investigation of its own to collect materials for adjudication of the

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disputes so long as the tribunal has applied its mind fully to the statements and documents placed before it by the
appearing party before making the award, although ex parte, such an award is not assailable.86 For instance, where the
employer fails to file the written statement to the claim of the workman despite sufficient opportunity having been
afforded, an ex parte award in favour of the workman is passed on the facts found by the workman to exist, the award is
not liable to be interfered with.87 The language of r 22 unequivocally makes the jurisdiction of the tribunal, to render the ex
parte award, conditional upon the fulfilment of its requirements. If there is no sufficient cause for the absence of a party,
the tribunal undoubtedly has jurisdiction to proceed ex parte. But if there is sufficient cause shown which prevented a party
from appearing, then under the terms of r 22, the tribunal will have no jurisdiction to proceed ex parte.88 In ND Patel,89 the
employer had not appeared before the labour court after receiving notice on the ground that the notice was not in the
prescribed form. The Gujarat High Court held that the employer did have the notice and it was not material whether the
notice was in the prescribed form or in any other form. He was, therefore, bound to appear before the court.

Rule 24 of the Andhra Pradesh Industrial Disputes Rules 1958 empowers the industrial adjudicators to proceed ex parte
with a case if any of the parties is absent and if sufficient cause is not shown for the absence. The concept of ‘sufficient
cause’ differs from case to case. It is, therefore, not to be applied rigidly. The tribunal has to consider the facts and
circumstances of each case whether ‘sufficient cause’ has been shown or not. The Andhra Pradesh High Court in DM,
APSRTC,90 held that the rule merely enables the adjudicator to proceed as if the party is present, but this does not enable it
either to do away with the inquiry or to straightaway pass an award without giving a finding on the merits of the dispute
before him. The absence of a party does not entail the consequences that an award straightaway be made against him. It is
incumbent on the adjudicator to go into the merits of the dispute and give such finding as can be on the material placed
before him. Accordingly, the court set aside the award of the tribunal. In Eagle Wood, a single judge of the Calcutta High
Court held that the award of the tribunal was a nullity for non-compliance of the mandatory requirements of r 20B(1) and
(5) which prescribe the mode and manner of filing pleadings and serving a copy of such pleadings on the opposite party.
Apart from these mandatory requirements, there was also the question of compliance of the rules of natural justice. The
learned judge held:

The employer, however, bad cannot be denied the opportunity of hearing in accordance with the provisions of law. If in spite of
such compliance the employer or the employee as the case may be, chooses not to appear, then the tribunal need not wait for the
pleasure of appearance of such a party but not before that 91

In this view of law, the court held that the award was a nullity ab initio or a non-est phenomenon. If there is no award in
the eye of law, mere publication of the same will not confer any sanctity conferring the status of an ‘award’ on it.
Accordingly, instead of quashing the award the court issued a writ of mandamus commanding the government not to give
any effect to the impugned award and remanded the matter to the tribunal with the direction to rehear the matter de novo.

(x) Restoration of Proceedings

Some State Governments like Assam, Madras, UP and Kerala have framed rules under the Act for setting aside ex parte
decisions of the industrial tribunals on showing sufficient cause. Such cases present no difficulty for a tribunal to set aside
its ex parte order, where the defaulting party can show sufficient cause for not attending the proceedings when the order to
proceed ex parte was made. In such a case, an application for restoration should be moved in the open court and should not
be prefaced by a private visit to the presiding officer of the tribunal.92 However, the rules of some of the states such as
Andhra Pradesh, Maharashtra, Orissa etc like the Central Rules, have no provisions for setting aside the ex parte orders or
awards. On the question, whether in the absence of the enabling Rules, a tribunal has jurisdiction to set aside an ex parte
order or award and restore the proceedings, there is conflict of judicial dicta. The various High Courts expressed
diametrically opposite views on the question ‘whether the tribunal has the inherent power to set aside an ex parte order in
the absence of an express rule to that effect’. While some High Courts were against such an implied power, other High
Courts held that the tribunal had the power to set aside an ex parte award if sufficient cause was shown by the party for its
absence. The conflict was set at rest by the decision of the Supreme Court in Grindlays Bank.93The court observed that
even if there is no express provision in the Act or the rules framed thereunder giving the tribunal jurisdiction to set aside an
ex parte order, words ‘shall follow such procedure as the arbitrator or other authority concerned may think fit’ in s 11 (1)
of the Act, are of the widest amplitude and confer ample power upon the tribunal and other authorities to devise such
procedure as the justice of the case demands. In view of this power, the industrial tribunal must necessarily be endowed
with all powers, which bring about an adjudication of an existing industrial dispute, after affording all the parties an
opportunity of hearing. Therefore, ‘where a party is prevented from appearing at the hearing due to sufficient cause and is
faced with an ex parte award, it is as if the party is visited with an award without a notice of the proceedings. It is needless
to stress that where the tribunal proceeds to make an award without notice to a party, the award is nothing but a nullity. In
such circumstances, the tribunal has not only the power but also the duty to set aside the ex parte award and to direct the
matter to be heard afresh.’

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The discretion conferred on the authorities to determine the procedure as they think fit, is subject to the rules made by the
appropriate government in this behalf Rule 22 of the IDCR empowers the authorities to proceed ex parte where any party
fails to attend the proceedings. If this power is implicit, the power to set aside the ex parte award because the power to
proceed ex parte carries with it the power to inquire whether or not there was sufficient cause for the absence of the party
at the hearing. The court further held that even if the award was published in the Official Gazette, the tribunal has the
power to deal with the application properly made before it for setting aside the ex parte award and pass suitable orders.
This holding was followed by the court in Satnam Verma, in which the first date of hearing of the reference was fixed for
framing issues, leading evidence and disposal of the reference on 23 February 1982. But the workman understood the date
of hearing to be 26 February 1982 on which date he appeared and found that the matter had been disposed of ex parte on
23 February 1982. On the same day, he moved an application pointing out that his information about the date was
incorrect. But the labour court held that since the award had already been published in the Official Gazette, it had no
jurisdiction to recall and set aside the ex parte order and to restore the case to the file. The Supreme Court held that the
labour court was in error in rejecting the request of the workman, particularly, when the assertion on the part of the
workman was bona fide and was not seriously controverted.94 It is, therefore, now settled law that the adjudicator has
ample jurisdiction to entertain an application to set aside an ex parte award even after it has published. But it does not
mean that the tribunal can entertain such an application to set aside an ex parte order even after an inordinate delay. For
instance, in CJ Thomas, a single judge of Kerala High Court refused to entertain an application to set aside the ex parte
order after a delay of more than three years.95 Furthermore, it will be well within the jurisdiction of the adjudicator to reject
an application for setting aside an ex parte order or award, if the applicant fails to show sufficient cause for his default.96
However, good or sufficient cause should relate to the date of absence on which the tribunal decides to proceed ex parte
and not to a date subsequent to that date. Refusal of the tribunal to entertain an application showing good cause relating to
absence of a date subsequent to the date on which the labour court decided to proceed ex parte, will not normally be
amenable to interference in judicial review.1 But in Maharashtra GK Union, the orders of the labour court, dismissing the
application for setting aside the ex parte award as well as the ex parte award were quashed. In this case, the workman was
represented before the labour court by the union which had sponsored the dispute. But the union lost interest in the case as
the workman had joined another union and failed to appear before the labour court. Furthermore, the absence was also due
to industrial unrest and strike. In these circumstances, it was held that the workman should not suffer for lapse of the union
and the matter was remitted back to the labour court for deciding it afresh.2 An application for reviewing an ex parte award
passed by an industrial tribunal, filed before the tribunal after 30 days of the publication of the award, was held to be
barred by limitation as the tribunal had become functus officio after the expiry of 30 days from the date of the publication
of the award.3

In Indian Metals & Ferro Alloys, after the written statement had been filed, issues were framed. On the next date of
hearing, the management was present while the union representing the workmen did not appear. The tribunal, therefore,
made a no dispute award which was subsequently published. The union, then, filed an application for restoration of the
proceedings after setting aside the ex parte award. On the date fixed for hearing of the application, neither party appeared
and the tribunal dismissed the application for non-appearance of the parties. The union again filed another application for
restoration of the earlier application and the tribunal dismissed the same as not maintainable. In writ proceedings against
that order, the Orissa High Court upheld the order of the tribunal and held that O 9, r 13 of the CPC was applicable to
proceedings by reason of Orissa Rules specifically applying O 17 and s 11(1) of that Act provided that the tribunal shall
devise such procedure as it thinks fit but unless s 141 or 151 is applied to proceedings before the labour court, a second
application would not be maintainable.4 A single judge of Madras High Court, interpreting r 22 of the IDCR, held that the
adjudicator should take into consideration the statements filed by the party which remained ex parte and only on
comparative merits of claims and counter claims an ex parte award has to be passed. It is clear that the ex parte award
passed without considering the contentions raised in the counter statement filed before the conciliation officer or before the
labour court or industrial tribunal would not be valid.5 In Virendra Bhandari, the facts were that a dispute regarding
termination of service was referred for adjudication. The tribunal held that there was no dispute as the workman did not
appear in spite of notice and hence the workman remained ex parte. Thereafter, the government by another order made a
reference of a dispute to the tribunal on the same questions on which the earlier reference was made. The tribunal
adjudicated the matter and passed its award. In a writ petition challenging both the reference and award, the High Court
held that in the first reference, the tribunal recorded a finding that no industrial dispute existed and the said determination
fell within the definition of the term ‘award’ under the ID Act, and, therefore, the second reference on the same dispute
was incompetent. On special leave, the Supreme Court, while quashing the order of the Division Bench of High Court,
observed that a perusal of the award made on the earlier occasion would clearly indicate that there was no adjudication of
the dispute at all, and what was stated was that the parties had not appeared before the tribunal; that where there was no
adjudication of the dispute on merits, it could not be said that the industrial dispute did not exist. In such a situation, it is
open to the government to make a second reference of the dispute.6

The above decision calls for some analysis. Once an award was passed by the tribunal in the first reference, setting the

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workman ex parte on ground that he did not enter appearance in spite of notice, the matter stood disposed off once and for
all. An award passed ex parte, after going into the merits of the dispute, is still an award unless it is shown that the tribunal
had recalled the award on an application made by the party explaining his absence to the satisfaction of the tribunal. It is
also not the case that the workman made an application to the first tribunal with a request to condone his non-appearance,
before the publication of the ex parte award. By the same token, a second reference of the same dispute is incompetent.
The observation of the apex court that ‘there was no adjudication’ of the dispute is equally without basis. If the parties do
not appear despite notice, what should the labour court or tribunal do? Should it be asked to wait indefinitely and keep the
matter hanging till such time, the parties find it convenient to appear or respond at their sweet will? Going by the view
expressed by the Supreme Court, either party at its sole discretion may choose not to enter appearance, and raise a fresh
dispute on the same matter on which an ex parte award was already passed and published. It is submitted that the decision
of Supreme Court is clearly wrong and that of the Division Bench of the High Court is right.

(xi) Adjournments

Rule 24 of the Industrial Disputes (Central) Rules 1957, prescribes that among other matters, the provisions of the Code of
Civil Procedure shall apply to the authorities mentioned in s 1 (3) in connection with granting adjournments.7 Rule 10B(8)
of these rules lays down the procedure and prescribes the time-limit for granting adjournments. The question, therefore,
whether an adjournment should or should not be granted in a particular case, is in the discretion of the tribunal.8 The
discretion, however, has to be judicially exercised in the circumstances of the case.9 The tribunal, therefore, must grant
such reasonable adjournments as may be necessary so that justice may be done.10 But while granting adjournments in the
course of adjudication of industrial disputes, the tribunal has to bear in mind that speedy settlement of an industrial dispute
is the very essence of industrial adjudication. Hence, long and elaborate adjournments for any small step that a party may
intend to take, would defeat the purpose of such adjudication.11 Nevertheless, expedition though has its own virtue, an
adjudicator must realise that he has to decide and not simply dispose of a case as quickly as possible. A short adjournment,
therefore, if required by the exigencies of a case, must be allowed in the interest of fair adjudication.12 The order refusing
to grant adjournment in an arbitrary manner or in violation of the rules of natural justice resulting in injustice to a party
will be liable to be quashed on certiorari.13 For instance, where after refusing to grant an adjournment on account of the
illness of the employer’s representative, the tribunal did not adjourn the case for the evidence of the witnesses, who had not
turned up on that date and proceeded ex parte to decide the entire case on the very same day, in the absence of the party
and without hearing him at all, the award was quashed on certiorari.14 A typical illustration of arbitrariness in exercising
discretion in the matter of adjournment is the case of Technological Institute.15 The tribunal adjourned the matter on
various occasions from time to time to enable the workmen to produce evidence. As a matter of fact, it had been doing
nothing but merely adjourning the matter for over two years at the request of the workmen. Ultimately, after adducing
some evidence, the union closed its case. Inspite of the helpful attitude adopted by the management, the tribunal rejected
the request of the management, for leave to adduce evidence and closed the case of the management suo motu very
abruptly without permitting the management to produce evidence on its behalf which it was entitled, in law, to place before
the tribunal. In appeal by special leave, the Supreme Court not only set aside the award of the tribunal but strongly
deprecated the arbitrary attitude of the tribunal and observed that ‘to say the least, this attitude of the tribunal is highly
arbitrary and unjust’. But, where a party remained absent on the date fixed for recording evidence in the presence of
representatives of the parties, nor sent a request for adjournment, there was no denial of opportunity to the party to produce
evidence when the tribunal proceeded ex parte.16 Likewise, where the company had taken some adjournments and on the
last occasion its counsel had given an undertaking not to pray for further time in future, it was held that the tribunal had not
denied reasonable opportunity of being heard by refusing to grant further adjournment to the company. It was observed
that the tribunal had not acted unfairly in disallowing unreasonable prayer for adjournment made by the employer
company.17

(xii) Evidence

(a) Application of the Indian Evidence Act 1872

After the pleadings have been completed and issues have been framed, the tribunal has to record evidence. On an analysis
of the provisions of s 11, it will appear that the adjudicatory authorities under the Act, are authorised to take evidence and
may be treated as courts within the meaning of s 3 of the Indian Evidence Act. But proceedings before such authorities are
to be deemed as judicial proceedings only within the meaning of s s 193 and 228 of the Indian Penal Code and such
authorities are to be deemed as civil courts only for the purposes of s s 345, 346 and 348 of the Code of Criminal
Procedure 1973. For all other purposes, these authorities shall not be deemed to be ‘civil courts’ and the proceedings
before them shall not be treated as judicial proceedings. Rule 15 of the Industrial Disputes (Central) Rules 1957 authorises
the board, labour court, tribunal or national tribunal or an arbitrator under s 10A to accept admit or call for evidence at any
stage of proceedings in such manner as it may think fit. Rule 16 empowers these authorities to administer oath. The state
governments have also framed rules under the Act relating to the procedure of recording evidence after the issues have

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been settled. The pleadings of the parties do not amount to evidence. The evidence may be oral or by affidavits. The party
controverting the statement of the deponent of an affidavit should either file a counter affidavit or ask for an opportunity to
cross-examine the deponent of the affidavit. It is not the duty of the tribunal to invite the party concerned to cross-examine
the deponent. Not inviting a party to cross-examine the deponent will not amount to denial of an opportunity to cross-
examine the deponent.18

Proceedings before these tribunals are quasi-judicial proceedings but on the question whether s 1 of the Indian Evidence
Act makes it applicable of its own force to proceedings before the adjudicatory authorities under the Industrial Disputes
Act there is some divergence of judicial opinion. In an early decision, the Madras High Court went to the extent of saying
that though a court of law is not generally entitled to arrive at a finding in any manner except on the evidence adduced
before it, quasi-judicial tribunals, like the industrial tribunal not hampered by the rules of evidence applicable to
proceedings in a court of law, would be entitled to rely on data available to them otherwise than from evidence adduced on
behalf of the parties.19 On the other hand, the Calcutta High Court, has not only dissented from this decision of the Madras
High Court, but also has dissented from some of its own earlier decisions and held that ‘an industrial tribunal is a ‘court’ in
the wider connotation of the terms as defined in s 3 of the Evidence Act and the Act applies to judicial proceedings before
an industrial tribunal’.20But the preponderance of judicial opinion is that the industrial tribunals not being civil ‘courts’
except for limited purposes within the meaning of s 3 of the Evidence Act, the proceedings before them are merely of
quasi-judicial nature and s 1 of the Indian Evidence Act does not make that Act applicable of its own force to such
proceedings.21Hence, they are not bound by the strict rules of procedure of the Indian Evidence Act. The trend of recent
judicial thinking is that the application of technical rules such as acquiescence, and estoppel etc, are not appropriate to
industrial adjudication.22 The question of acquiescence was dealt with by the Supreme Court in Guest Keen Williams, in
which the pleas of acquiescence and laches were negatived by the court.23 Industrial tribunals should be slow and
circumspect in applying technical principles such as acquiescence and estoppel.24 In Bennett Coleman, the Supreme Court
observed:

... assuming that the rule of estoppel, as incorporated in section 115 of the Evidence Act, were to apply, the foundation of that rule
is that it is inequitable and unjust to person, that if another person by a representation induces him to act as he would not have
otherwise acted, the person who made the representation should be allowed to deny the effect of his former statement on the loss,
and injury of the person who has acted on it [Sarut v Gopal]. 25The rule is one of evidence only and does not create any substantive
right or confer any cause of action on the other. It comes into operation if a statement as to the existence of a fact has been made
with the intention that the other person to whom it is made should believe and act on it and that another person does in fact act
upon the faith of it ... The burden of proving the ingredients of section 115 of the Evidence Act lies on the party claiming estoppel.
The representation which is the basis for the rule must be clear and unambiguous and not indefinite, upon which the party relying
on it is said to have, in good faith and in belief of it, acted.26

The Assam and Nagaland High Court, however, held that the employees who were pitched against the management were
not in an equal position in bargaining. Therefore, it was open to the union, which took up the cause of the employees to
raise the dispute by way of collective bargaining on their behalf. Hence, no question of estoppel would arise in industrial
matters.27 On the other hand, the Madras High Court has on the facts of the case in Natarajan Engineering, applied the
principle of estoppel.28 Though not bound by strict rules of the Evidence Act, industrial tribunals have to comply with the
rules of natural justice in the proceedings before them. Stating it broadly and without intending it to be exhaustive, it may
be said that: rules of natural justice require that a party should have the opportunity of adducing all relevant evidence on
which he relies, that the evidence of the opponent should be taken in his presence, and that he should be given the
opportunity of cross-examining the witnesses examined by that party, and that no materials should be relied on against him
without his being given an opportunity of explaining them.29 Fair play requires that evidence on an allegation made against
a delinquent workman, must be produced before the tribunal in the ‘appropriate manner’ giving an opportunity to the
workman to rebut the same. If that is not done, it will be against the rules of natural justice. For instance, if the past record
of the workman is to be taken into account for determining the quantum of punishment then that record must be produced
before the labour court and the workmen should be given an opportunity before such record is taken into account. If that is
not done, the award of the labour court not taking such record into consideration will not be vulnerable30 but, when
documents are admitted in evidence and are taken into consideration by the tribunal, opportunity should be given to the
party adversely affected by them to rebut such evidence or to contradict statements contained in such documents which are
prejudicial to such party.31

Similarly, even though all the technicalities of the Evidence Act may not be strictly applicable, it is inconceivable that an
industrial tribunal could act on what was not evidence such as hearsay. Nor can the tribunal be justified in basing its award
on copies of documents when the originals which were in existence but were not produced and proved by one of the
methods ie either by an affidavit or by witnesses who had executed them if they were alive and could be produced.32 The
general principles of law of evidence, however, may be applicable.33For instance, parties to industrial adjudication are

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entitled to inspect the record of the tribunal and also to get certified copies under s 74 of the Evidence Act. Even in
proceedings governed by the strict requirements and rules of the Evidence Act, it might not be correct to rule out certain
instances altogether as irrelevant, because they might specifically become relevant as res gestae. That apart, the tribunal
has wide powers in regard to industrial adjudication and is not hide-bound by the niceties of the Evidence Act or the
principles or res gestae.34 It is however, well settled that where there is no evidence before the tribunal on the basis of
which it can form the opinion which finds expression in the award, such opinion will not be sustainable in law.35 Though in
industrial adjudication, the evidence of recognition and identification may have to be considered, the requirement of
recognition and identification cannot be stretched to import the standard of criminal trials, viz that before a workman can
be found guilty of an offence meriting dismissal, he must be recognised, implicated and named by more than one witness.

It is not the quantity of evidence but the quality of the same which has to be looked into and the evidence has to be read as
a whole.36 In Bhagwandas Chopra, during the pendency of adjudication proceedings in connection with the termination of
the services of the workmen before the industrial tribunal in place of the original employer, Narang Bank of the India Ltd,
its successor-in-interest, the United Bank of India, was impleaded as a party to the proceedings before the tribunal. Prior to
the United Bank of India becoming a party, the workman examined himself and he was examined by the representative of
the Narang Bank of India Ltd. Thereafter, the evidence of the workman was closed. Sometime after being impleaded as a
party, the United Bank of India made an application to the tribunal for recalling the workman for cross-examination by it,
but the tribunal rejected the application. The award of the tribunal was quashed by the Delhi High Court on the ground that
the tribunal violated the rules of natural justice by not allowing the United Bank of India to cross-examine the workman. In
appeal by special leave, the Supreme Court set aside the decision of the High Court and held that if the Narang Bank of
India had no right to recall the workman for cross-examination on the day on which the United Bank of India applied to the
tribunal for his cross-examination, the latter bank also could not be granted permission to do so. In the absence of any
exceptional circumstance which would have entitled, in the ordinary course, a party to a proceeding to recall a witness
whose evidence had already been completed, for further cross-examination, the latter bank could also not make such a
claim at all, particularly after both the parties had closed their respective cases before the tribunal. The dismissal of the
application of the United Bank of India for recalling the workman for further cross-examination, in the absence of any
exceptional circumstances, could not be considered as violation of the rules of natural justice.37

A Full Bench of the Andhra Pradesh High Court, in Nalgonda CMS Ltd, held that merely because an industrial tribunal had
certain trappings of a civil court, it could not be considered to be a civil court because the judicial functions performed by
an industrial tribunal under this Act are different from those performed by ordinary courts of law. An industrial tribunal
has no other function except that of adjudicating matters entrusted to it under the provisions of this Act. It is therefore,
outside the hierarchy of the ordinary judicial system. Hence the provisions of Code of Civil Procedure or Evidence Act are
applicable to its proceedings only to a limited extent and it is open to the tribunal to adopt such procedure which it deems
necessary. Furthermore, the preponderance of judicial opinion based on well-established principles of law is to the effect
that the provisions of s 5 of the Limitation Act are not applicable to the proceedings before an Industrial Tribunal. 38 In
FCI, under an earlier order of the Supreme Court, the only question that the tribunal was required to consider was ‘the
identity’ of certain workmen and not whether they or anyone of them had been in employment of the corporation at the
relevant time. However, the tribunal conducted a fresh appraisal to determine as to whether all or any of such workmen
were in employment of the corporation at the relevant time. Apart from holding that the tribunal misconceived the nature
of the orders of the Supreme Court, in conducting a fresh appraisal as to whether all or any such workmen were in
employment of the corporation at the relevant time, the court observed that the tribunal, even in the matter of marshalling
or considering the material placed before it, had gone wrong. As the tribunal is not a court, there should be only ‘material’
and not ‘evidence’ as required by the Evidence Act to prove the facts. The tribunal had examined a number of witnesses
and stated that the evidence of the workmen was not ‘duly proved’, ‘legally proved’ or ‘proved beyond reasonable doubt’.
This approach of the tribunal was also wrong because the only question before it was whether, on weighing the
probabilities, the material placed by the workmen was acceptable or rendered probable. It was not required to consider at
length the minutest particulars in the case, in the light of requirements of the Evidence Act and it should not have
magnified the minor lapses in evaluating the probability.39

(b) Admissibility of Evidence

A quasi-judicial decision presupposes an existing dispute between two or more parties and involves presentation of their
cases by the parties to the dispute and if the dispute between them is on a question of fact, the assertion of the fact by
means of evidence adduced by the parties to the dispute. Any party appearing before a tribunal must make a claim or
demur the claim of the other side and when there is a burden upon it to prove or establish a fact so as to invite a decision in
its favour, it has to lead evidence. The obligation to lead evidence to establish an allegation made by a party is on the party
making the allegation. The test would be as to who would fail if no evidence is led. It must seek an opportunity to lead
evidence.40 Sub-rules (5) and (6) of r 10B prescribe the procedure and time-limit for recording evidence while sub-r (7)
prescribes the procedure and time-limit for hearing the arguments after closing of evidence by the parties. The question as

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to what evidence should be allowed to be adduced on the facts and in the circumstances of a case is in the discretion of the
tribunal. Since the technicalities of the Evidence Act regarding the admissibility of evidence, do not apply to industrial
adjudication, the discretion, of the tribunal is to be exercised for achieving the effective settlement of the industrial
disputes.

In National Insurance, at the stage of arguments, the union produced before the tribunal, a statement showing various
items which should be added back to the net profits, on the basis of which the tribunal added back the items shown in the
statement, to the net profits of the company. The award of the tribunal was challenged in appeal before the Supreme Court
on the ground that at the stage of arguments the tribunal ought not to have permitted the union to adduce additional
evidence and by so doing it deprived the employer-company of the opportunity to lead evidence to counter the contents of
the statement. The court rejected this plea as the statement was not produced as additional evidence before the tribunal
which was, in fact, merely a statement of certain figures from the company’s own balance sheet and the profit and loss
account produced before the tribunal by the company and the statement in question was produced before the tribunal
merely for its ready reference. It was observed that since it did not contain any new material, the company could not rightly
complain that it was taken by surprise or that it was entitled to lead any additional evidence to contest the figures in that
statement and further that if the company wanted to refute that statement, it could very well have done so from the balance
sheet, its directors’ report and profit and loss accounts and other documents on record. On this fact-situation, the court
upheld the view taken by the tribunal in relying upon the statement and declining the company’s request to lead additional
evidence on the ground that the statement contained fresh material.41

However, from Khardah & Co, decided earlier, it would appear that the Supreme Court justified the admission of certain
evidence by the tribunal even after the case had been fully argued, and without notice to the other side. In this case, after
the hearing of the case was over, the union requested the tribunal to send for the records from the registrar of trade unions
to ascertain the fact about the status of the concerned workman as to whether he was an office-bearer of the union, which
fact was disputed by the employer, while dealing with the plea of victimisation. The tribunal acceded to the request of the
union without notice to the other side. In the peculiar circumstances of the case, the Supreme Court, in appeal by special
leave, against the resulting award, held that it could not be contended that the procedure adopted by the tribunal to send for
an authenticated record to ascertain the disputed fact about the status of the concerned workman vitiated the award made
by it. Since this case was decided on its own peculiar facts, it does not lay down a general proposition of law that the
tribunal can always admit evidence after the case has been closed by the parties.42 Even if the tribunal has the power to
allow the parties to adduce further evidence in support of their case at the stage after the closure of arguments and before
the passing of the award on an application made for this purpose and explaining the bona fides of the delay, the tribunal
has the discretion to reject such an application if no case has been made out justifying the production of such evidence.43

If an ex parte inquiry is ordered against a delinquent workman on the ground of his non-participation in the inquiry and the
validity of the inquiry is upheld by the tribunal, there is no provision in the Act which, in such a case, entitles the workman
to lead evidence before the tribunal to show that the charges levelled against him were false and baseless.44 In such a
situation, the employer can validly take advantage of relying on findings of the domestic inquiry as prima facie proof of
alleged misconduct.45 It is well-settled that an allegation which is not pleaded, even if there is evidence in support of it,
cannot be examined because the other side had no notice of it and if entertained, it would tantamount to granting unfair
advantage to the other side.46 But the mere fact that a party has not filed its written statement would not disentitle it to
adduce evidence to rebut or demolish the case of the other side, as it would not be proper to refuse examination of
witnesses when the party later presses for it as it would be against the principles of natural justice.47 In NBCC, in support
of the case of the workman, the labour court principally relied on the oral testimony of an employee of the corporation who
had left its service and subsequently had made claim for damages against the corporation. In a writ petition against the
award of the labour court, a single judge of the Delhi High Court held that the fact that the witness had left the service of
the corporation and had made a claim for damages, by itself would not make his evidence inadmissible and disentitle the
labour court to accept his sworn evidence.48 In Oriental Containers, the Bombay High Court observed that the evidence of
an accomplice cannot be rejected outright and it can be accepted if it receives some independent corroboration.49 In
Chennai ACW Union, a single judge of Madras High Court held that so long as proceedings are pending, there is no lack of
jurisdiction in the adjudicating forum for permitting any party to the proceedings to let in evidence at any stage of the
proceedings before the passing of the award, so long as the material sought to be introduced by way of evidence would
bring forth the truth of the claim made or the defence taken.50

(c) Appreciation of Evidence

The oral or documentary evidence adduced before industrial tribunals must be the evidence which is legally adduced.51 But
a tribunal in its discretion may consider that some evidence adduced by one of the parties is irrelevant or immaterial.52 The
admission or rejection of a piece of evidence placed before a tribunal and its appreciation is a matter exclusively within the
jurisdiction of the tribunal and sufficiency and quality of evidence on which a finding would be arrived at, is also a matter

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for the tribunal to consider.53 Refusal to admit evidence by a tribunal cannot in every case necessarily be deemed to render
the adjudication unfair. But if it has totally ignored certain evidence on record in arriving at a finding, such a finding will
be perverse.54 Similarly where the tribunal finds that a witness has no regard for truth and still relies on his statement, the
resulting conclusion will be perverse.55 Nor can the tribunal allow evidence to be led by one party in the absence of the
other,56 but the tribunal cannot completely ignore the evidence adduced by the parties and record a finding contrary to such
evidence as such a finding would be perverse.57 In Singareni Collieries Ltd, the Supreme Court held that where the
tribunal, on the appreciation of oral and documentary evidence, passed an award granting ‘charge allowance’ to fitters as
referred by the government, it would not be proper for the High Court to interfere with the said award and direct the
payment of said allowance to electricians without any evidence before it.58

(xiii) Preliminary Issues

Section 10(4) of the Act circumscribes the parameters of the jurisdiction of the adjudicatory tribunals requiring them to
confine their adjudication to the points specified in the order of reference and matters incidental thereto. Thus, there are
two categories of points which a tribunal has to decide. Firstly, the points which have been specified in the order of
reference for adjudication. Secondly, the points which are incidental to the points specified in the order of reference for
adjudication. In this category, will come the determination of the questions which go to the root of the jurisdiction of the
tribunal. On the determination of such points will depend the question as to whether the tribunal has the jurisdiction to
adjudicate upon the points referred to it for adjudication. If the decision on the preliminary issues is in the affirmative, the
tribunal proceeds further with the adjudication while if it decides it in the negative, it will have no jurisdiction to proceed
further with the adjudication. Preliminary issues in a suit or proceeding may relate to a question of law, which, if decided
at the commencement of the proceeding, would render the very suit or proceeding incompetent and save the precious time
of the court and unnecessary costs to parties. The purpose of framing preliminary issue, generally on the request of the
defendant, and deciding it at the commencement of the proceeding is that in a number of cases, the very decision thereon
can dispose of the suit or proceeding, without the court having to go into the merits of the case. In TISCO, while observing
that the Tribunal was in error in refusing to decide, as a preliminary issue, the question whether s 33 applied to the case,
Gajendragadkar CJI, held:

It would be legitimate for an employer. to make an application under section 33 without prejudice to his case that section 33 did
not apply...it would be idle and unreasonable to suggest that the employer should make up his mind whether section 33 applies or
not, and if he thinks that section 33 does not apply, he need not make the application; on the other hand, if he thinks that section 33
applies, he should make an application, but then he cannot be permitted to urge that the application is unnecessary. Such a view
is...wholly illogical and unsatisfactory.59

The judicial process outlined by the learned Chief Justice is the only right way of handling cases which fall in the twilight
zones involving questions of jurisdiction. The above view was followed in several subsequent cases. In Strawboard,
Goswami J, held that additional or ancillary issues are framed for better appreciation of the cases of the parties with
reference to the principal issues which have been referred for adjudication and on the basis of which the jurisdiction of the
tribunal would have to be determined.60 Justice Desai held that it is open to the tribunal to frame an issue on a jurisdictional
point and dispose it of as a preliminary issue.61 Sometimes, the failure of the tribunal to frame such preliminary issues may
lead to miscarriage of justice.62 In Cooper Engineering, Goswami J, held that in a case of dismissal or discharge, if the
employer makes a request to the labour court to try the validity of the domestic enquiry as a preliminary issue before
proceeding with the merits of the case, the court should first decide that issue as a preliminary issue; that on the said issue
being pronounced against the employer, it would be for him to decide whether he would adduce additional evidence; and
that if the employer chooses not to adduce additional evidence, it would not thereafter be permissible to him to raise the
issue in any further proceeding.63 In Shankar Chakravarty, the facts disclosed that the management, in an application under
s 33(2)(b), did not make a formal request to permit it to lead evidence. Accordingly the tribunal passed the award, which
was challenged by the management on the ground that the said award was vitiated as the tribunal did not call upon the
management to adduce additional evidence and justify the dismissal. Repelling the contention, Desai J, held:

In an application under section 33 the employer has to plead that a domestic enquiry has been held and it is legal and valid. In the
alternative it must plead that if the Labour Court or Industrial Tribunal comes to the conclusion that either there was no enquiry or
the one held was defective, the employer would adduce evidence to substantiate the charges of misconduct alleged against the
workman. ...there is no duty cast on the Industrial Tribunal or the Labour Court while adjudicating upon a penal termination of
service of a workman either under section 10 or under section 33 to call upon the employer to adduce additional evidence to
substantiate the charge of misconduct by giving some specific opportunity after decision on the preliminary issue whether the
domestic enquiry was at all held, or if held, was defective, in favour of the workman.64

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As rightly held by Desai J, no duty is cast upon the tribunal to prompt the employer to lead additional evidence, and it is
the sole responsibility of the employer to make a request therefor at the appropriate stage. If the employer does not make
any such request, the tribunal would be perfectly right in deciding the case on the strength of the material on record.
However, contrary to this settled legal position, Varadarajan, J, held that the employer must seek permission to adduce
evidence either at the time of making application under s 33 or after the written statement of defence is filed by the
workman u/s. 10 and that, if it fails to make a request at the commencement of proceedings, it would not be allowed to do
so at any later stage, as any delay in making such a request would prejudicially affect the workman and compel him to
surrender which he may not otherwise do.65 Before analysing the merits of this case, we may take a look at another set of
observations of Hegde J (for majority) in Laxmidevamma’s case:

...the directions issued by this Court in Shambhu Nath Goyal’s case need not be varied, being just and fair. There can be no
complaint from the management side for this procedure because this opportunity of leading evidence is being sought by the
management only as an alternative plea and not as an admission of illegality in its domestic enquiry. At the same time, it is also of
advantage to the workman inasmuch as they will be put to notice of the fact that management is likely to adduce fresh evidence,
hence, they can keep their rebuttal or other evidence ready. ...There is one other reason why we should accept the procedure laid
down by this Court in Shambhu Nath Goyal’s case. ...This judgment having held the field for nearly 18 years...the doctrine of stare
decisis require us to approve the said judgment to see that a long standing decision is not unsettled without strong cause…66

Justice Sabharwal, dissenting, observed:

To allow or not to allow the prayer of the management to adduce in such a matter should essentially lie within the discretion of
labour court/Industrial Tribunal to be exercised on well settled judicial principles. ..It appears that earlier to Shambhu Nath
Goyal...it was not doubted that the employer could ask for an opportunity to adduce evidence before the proceedings are closed
before the labour court/Industrial Tribunal. The departure came up only in Shambhu Nath Goyal. ...Except the main judgment of
Shambhu Nath Goyal…, no other decision of the court was cited before us wherein it may have been held that the prayer of the
management to adduce evidence is to be rejected if not made either in the written statement filed to the statement of claim in a
reference under section 10 or at the initial stage of proceedings under section 33(2)(b) … (at pp 206-11).

The settled law has been that the employer has a right to make a request to the Tribunal for adducing evidence at any stage,
but before the close of the adjudication proceedings. Even so, given the peculiar facts and circumstances of the case, the
decision in Shambhu Nath Goyal was correct, regardless of the departure made by the court on a vital aspect. Justice
Varadarajan observed that it was the duty of the management to have got the issue ‘whether the workman was gainfully
employed or not in the intervening period’ framed by the Tribunal and adduced the necessary evidence, unless the object
was to rake up that question at some later stage to the disadvantage of the workman. The exceptional facts and
circumstances disclosed in that case do not justify the laying down of an inflexible rule of universal application, contrary to
the settled principles. The question of adducing additional evidence arises only after the tribunal records a finding that the
domestic enquiry suffers from some infirmity, and not before. No employer can be asked to proceed ab initio on the
presumption that the domestic enquiry was defective and accordingly make a pre-emptive request for adducing evidence at
the stage of filing written statement or an application under s 33(2)(b). The record of domestic enquiry should be presented
to the tribunal for its scrutiny and a result thereon pronounced before the employer could make a request for permission to
lead further evidence. If, for instance, the tribunal comes to the conclusion that the domestic enquiry is unassailable, then
the question of employer adducing additional evidence does not arise. Thus, the employer’s right to make a request for
adducing additional evidence is contingent upon the tribunal recording a finding against the domestic enquiry. The rulings
in Motipur, Ludh Budh Singh, and Cooper Engineering consistently upheld the right of employer to make the request at
any stage before the close of proceedings, and not compulsorily at the commencement of the proceeding. The observation
of Varadarajan J, that the filing of application at a later stage would ‘result in delay’ is ill-founded and without substance.
As a matter of fact, any denial of opportunity to the employer to adduce additional evidence for the reasons mentioned by
the learned judge would work out to the ultimate detriment of the workman himself, as the employer would go back,
initiate fresh disciplinary action, cure the defects and file a foolproof case for approval. In such an event, the workman
would be permanently deprived of the benefit of an enquiry held by an independent judicial authority. The observations of
Hegde J, in Laxmidevamma are as misconceived as those of Varadarajan J. Once the right of employer to adduce additional
evidence is conceded, the discretion whether or not to permit the employer to lead evidence should rest with the labour
court, which can always go into the question of genuineness or otherwise of the request. At any rate, it should not be
superimposed by higher courts thereby robbing the flexibility and, what is more, the discretionary power available to the
trial court under ss 33 & 10(1) read with s 11A.

There is no rule of law which mandates the employer to make a request even before the court has recorded a finding

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against the validity of domestic enquiry. If the employer makes a request immediately after the labour court records a
finding against the domestic enquiry, it could not be said that the employer was guilty of delaying the adjudication process
nor could it be said that such a request operates to the prejudice of the workman. His further observation that ‘it is also of
advantage to the workmen inasmuch as they will be put to notice of the fact that management is likely to adduce fresh
evidence, hence, they can keep their rebuttal or other evidence ready’, is equally without merit for the reason that the
question of the workman leading evidence contra arises only after management has adduced evidence from its side. At any
rate, the workman cannot be expected to indulge in guesswork as to the kind and quality of evidence to be led by him
contra without first knowing what the management has adduced in support of the order of dismissal. His observation that
Shambhu Nath Goyal held the field for 18 years rests on a tenuous foundation. The concern shown by Hegde J for
upholding stare decisis, though commendable, is unsupported by facts, because Motipur was decided by a four-judge
Bench comprising Gajendragadkar CJI, Wanchoo, Hidayatullah and Ramaswamy JJ, which was no less long-standing,
having held the field for as many years as Shambhu Nath Goyal. From the standpoint of judicial precedent, the ratio of
Motipur is binding on all the subsequent Benches of four judges or less, and thus it clearly binds the three-judge Bench
which decided Shambhu Nath Goyal. With respect, it is submitted that both Shambhu Nath Goyal and Laxmidevamma are
monumental illustrations of judicial indiscipline at its pinnacle. It is shocking that Hegde J (speaking for a Constitution
Bench), should have affirmed Shambhu Nath Goyal over the decision of a four-judge Bench and, in the same strain,
express his concern for stare decisis. The dissenting judgment of Sabharwal J places the law in the correct perspective and
is right, whereas that of the majority is completed misconceived and flawed. In Divyash Pandit, the labour court framed
the following issues:

(1) Whether the management is an industry or not under section 2(j) of IDA?

(2) Whether Delhi Administration is not the appropriate Government’?

(3) Whether the petitioner is a ‘workman’ under section 2(s) of IDA?

(4) Whether the domestic enquiry is improper/invalid and whether the finding is perverse?

The labour court decided issue (4) by holding that the findings were perverse and hence was ‘non est in the eye of law’,
and accordingly directed reinstatement of the workman. The court noted the fact that no request was made by the
management to lead evidence in support of charges and to prove the same. A two-judge Bench of the Supreme Court
comprising Ruma Paul and Thakkar JJ swung to the other extreme, and held:

It is true no doubt that the respondent may not have made any prayer for additional evidence in its written statement but, as held by
this Court in Karnataka Road Transport Corporation... did not place a fetter on the powers of the Court/Tribunal to require or
permit parties to lead additional evidence including production of document at any stage of proceedings before they are concluded.
Once the Labour Court came to the finding that the enquiry was non est…the Labour Court should have given one opportunity to
the respondent to establish the charges before passing an Award in favour of the workman.67

The above decision swung the pendulum to the other extreme and is as misconceived as that of Laxmidevamma. It is a little
difficult to understand what prompted the learned judges in Shambhu Nath, Laxmidevamma and Divyash cases, to struggle
so hard to read so many possibilities within a single set of facts, which ipso facto were comprehensively covered by a spate
of authoritative decisions in the 1960s itself. It is not in dispute that the responsibility to make a request to the labour court
at the appropriate stage for leading additional evidence squarely rests on the employer. But, in no case could it be
contended that the Labour Court is under an obligation to read into the mind of the employer and direct him to lead
additional evidence even without a formal request from the latter. Further, such a course on the part of labour court
amounts to prompting one party to do something against the other and would place the dismissed workman’s case in
jeopardy, apart from being repugnant to the principles of natural justice and of sound judicial disposition. If the employer
does not make a formal prayer for permission to lead additional evidence, the implication is that he relies on the validity of
the domestic enquiry proceedings as being unassailable and that he is not interested in leading additional evidence. The
employer would thus miss the opportunity for ever, and cannot be permitted to agitate before the High Court or Supreme
Court that the labour court denied opportunity to him, as the situation was of his own making. The decision in Divyash
Pandit is as unsatisfactory and defective as that of Hegde J in Laxmidevamma. The law on the subject is well-settled and
unambiguous. Eschewing the judicial extremes disclosed in Laxmidevamma and Divyash Pandit, the correct legal position
can be stated thus: ‘The management should make a specific prayer for permission to adduce additional evidence, either in
the application under s 33(2)(b) or in the written statement in a reference under s 10(1) or at a later stage in the
adjudication process, but certainly before the conclusion of the proceeding. Once a prayer is thus made, it is not within the
power of the Labour Court to refuse permission. However, no obligation of whatsoever nature is cast on the Labour Court
to direct the employer, on its own motion, to adduce additional evidence’.

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In Cooper Engineering, the case turned on the question ‘whether the Labour Court should decide, as a preliminary issue,
whether the domestic enquiry violated the principles of natural justice, particularly, where the parties are at variance on
that issue’. The main question was rightly decided by Goswami J, by holding that it is for the employer to take a stand and
seek permission to adduce additional evidence before the labour court; that if it chooses not to adduce any evidence, it
would not thereafter be permissible for the management to raise the issue in any proceeding. But the further gloss added by
the learned judge, to the effect that ‘there would be no justification for any party to stall the final adjudication of the
dispute by the labour court by questioning its decision with regard to the preliminary issue when the matter, if worthy, can
be agitated even after the final award’, is capable of producing great public mischief to the detriment of justice itself. In
the first place, the said observation was more in the nature of obiter and, by no means was part of the ratio decidendi, as
can be seen from his own statement: ‘We are making these observations in our anxiety that there is no undue delay in
industrial adjudication’ (in para 22). In this connection, it should be noted that the above case was decided long before s
17B was inserted in IDA. According to the then prevailing legal position, it made no difference in terms of the legal
consequences for employer, whether the labour court decided the preliminary issue first or decided both the preliminary
issues and merits together. Secondly, the insertion of s 17B changed the complexion of the Act insofar as the employer is
required to pay the last drawn wages, in the event he chooses to challenge the order of reinstatement, which means the final
order of the labour court on merits gives rise to certain legal and financial consequences to the employer. And, lastly,
whatever might be the considerations that weighed with Goswami J in Cooper Engineering, as regards the power to decide
preliminary and merits together, they ceased to have any application or sanctity the moment s 17B was enforced. In HD
Singh, Khalid J (for self and Reddy J), held that the employer was prohibited from raising preliminary objections touching
upon fundamental questions of law or jurisdiction of the court, and that the High Court should not interfere under Art 226.
In DP Maheshwari, Reddy J, who was a member of the Bench that decided HD Singh, added further gloss in his own ultra-
radical style, which runs thus:

There was a time when it was though prudent and wise policy to decide preliminary issues first. But the time appears to have
arrived for a reversal of that policy. We think it is better that Tribunals, particularly those entrusted with the task of adjudicating
labour disputes where delay may lead to misery and jeopardise industrial peace, should decide all issues in dispute at the same time
without trying some of them as preliminary issues. Nor should High Courts in exercise of their jurisdiction under Article 226 of the
constitution stop proceedings before a Tribunal so that a preliminary issue may be decided by them. 68(Italics supplied).

The above observations of Khalid and Reddy JJ are not only misplaced but are patently unconstitutional as well. The need
for determining the preliminary issue is not merely confined to s 33, but extends to the adjudication of disputes referred u/s
10 as well. Order 14, r 2 of CPC, runs thus:

2. Court to pronounce judgment on all issues—

(1) Notwithstanding that a case may be disposed of on preliminary issue, the Court shall, subject to the provisions of sub-rule
(2), pronounce judgment on all issues.
(2) Where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof
may be disposed of on an issue of law only, it may try that issue first if that issue relates to—
(a) the jurisdiction of the Court, or

(b) a bar to the suit created by any law for the time being in force, and for that purpose may, if it thinks fit, postpone
the settlement of the other issues until after that issue has been determined, and may deal with the suit in
accordance with the decision on that issue.

Rules 10B to 29 of IDCR prescribe the procedure to be followed by the Labour Courts and Tribunals, which, to a large
extent, is similar to that of a civil court. Reading the provisions of CPC and IDCR together, it becomes clear that where the
issue raised is one of jurisdiction or of law, and if the proceeding can be disposed of on that issue only, the court should try
that issue as a preliminary issue before going into the merits. It would be futile for the court to go into the merits of the
case, if it has no jurisdiction at all to try the matter or if the issue involves a question of law. In the face of this legal
position coupled with the lethal effect of s 17B, to say that the Tribunals would be justified in short-circuiting the
adjudication process by arrogating jurisdiction wrongfully, merely because the trying of preliminary issues would lead to
misery to one party, is outrageous. The further observation of Reddy J to the effect that the time had changed so much,
warranting the trying of preliminary issues and merits together, is no less ill-founded. Even assuming so, yet the letter and
spirit of Arts. 226 & 32 have certainly not changed to such an extent as to justify cutting corners by Tribunals. It is not as if
the Constitution is meant exclusively for the benefit of one section of society to the detriment of others. This country has

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not yet decided to patronise communism as an ideology to be pursued at the national level so as to dispense the kind of
lop-sided justice advocated by Reddy J. The said issue ‘whether the Tribunals should decide preliminary issues first or
decide them together with merits’ was not raised at any forum below or even before Supreme Court. In these
circumstances, should the above observation be taken as ratio decidendi or an irrelevant and uncalled for obiter coming
from an over-speaking judge?

Chief Justice Sethi of Karnataka High Court followed the anarchic view of Reddy J and held that the practice of framing
preliminary issues in industrial disputes was contrary to ‘law’ and if permitted would defeat the very purpose for which the
IDA was enacted.69It is obscure as to which ‘law’ the learned Chief Justice was referring to—is it the law of jungle or of a
modern, civilised democracy governed by a Constitution of its own? If it were contrary to the so-called ‘law’, what
prevented him from enlightening the Bar and Bench by citing the relevant legal provision? In the first place, whatever may
be the legislative intent as regards ‘speedy disposal’ of industrial disputes, no provision of IDA prescribes ‘summary
procedure’ of the kind provided for under O 37 of CPC. Section 11(3) of the IDA clearly states that the Labour Courts,
etc., shall have the same powers as are vested with the civil court under CPC when trying a suit in respect of enforcing
attendance, examination on oath, production of documents, issuing commissions, and other matters. It further stipulates
that every investigation by Labour Court, etc, shall be deemed to be a judicial proceeding within the meaning of s s. 193
and 228 of IPC. Rule 10B of the IDCR prescribes the powers of, and procedure to be followed by, Labour Courts, etc,
which are analogous to that of a civil court.70

The observation of Reddy J in Maheswari, though does not deserve to be elevated to the status of a sound, much less a
sane, legal proposition, suffers from the further vice of being repugnant to the Constitution, given that it comes from a
Supreme Court Judge, who is supposed to be the custodian of the Constitution. Even assuming that it was right, without
conceding in the least, still its validity stood expired with the insertion of s 17B. Examples of gross abuse of power, self-
misdirection, jurisdictional lapses and excesses on the part of Labour Courts far outnumber those which had been, and are
being, decided in accordance with the law. A glance at the ever-inflating volumes of law journals in this branch bears
eloquent testimony to this fact. If, in a chaotic dispensation bordering on licentiousness, the trial courts were to be directed
not to frame preliminary issues that touch upon questions of jurisdiction and law, it would produce great public mischief to
the detriment of the very concept of justice. To illustrate, where the preliminary issue touches upon questions such as -

(i) whether the Labour Court has jurisdiction at all to try the dispute; or

(ii) whether the person raising the dispute was the employee of the principal employer or of the contractor; or

(iii) whether the person answers at all to the definition of ‘workman’ under section 2(s) ; or

(iv) whether it is a case of abandonment on the part of the workman or a positive act of termination by the employer; or

(v) whether a workman can be said to be a ‘workman concerned in the dispute’ under section 33 ; or

(vi) whether the dispute referred for adjudication is an ‘industrial dispute’ under section 2(k) -

if the Labour Courts were to decide preliminary issues along with merits, it corrupts the judicial process and reduces it to
what may be called ‘unadulterated gambling’. Should the employer go on paying last drawn wages to the employee under
s 17B on the basis of an award, which is prima facie incompetent, absurd and outside the competence of the labour court?
Could it be said that s 17B is meant for imposing such a preposterous obligation on the employer with no recourse in the
event of the Labour Court arrogating to itself jurisdiction beyond the contemplation of the law? The decisions rendered in
Maheshwari and Senapathy deserve to be condemned in the strongest possible language and terms as being perverse and
repugnant to CPC as well as ultra vires the Constitution. In the midst of judicial chaos of this magnitude, the decision of
the Supreme Court in Hussain Mhasvadkar comes very refreshing in that the apex court made an attempt to undo the
damage done by the likes of Reddy J. Two points were urged in the said case: (i) Whether the Bombay Iron and Steel
Labour Board constituted under the provisions of the MMHOMWREWA falls within the definition of ‘Industry’ under s
2(j) of IDA; and (ii) Whether the appellant, working at the relevant point of time as an Inspector, discharging duties,
powers and obligations envisaged under s 15 of the said Act answers to the description of ‘workman’ under s 2(s) of IDA.
Justice Raju (for self and Rajendra Babu, J), held that, in view of the fact that the court below entertained doubts about the
status of the workman under s 2(s) of IDA, they should have refrained from embarking upon adjudication on merits, and
that the larger issue should have been entertained for consideration only if it was absolutely necessary, and not when the
claim could have been disposed of otherwise without going into the nature and character of the undertaking itself.71 This
decision is consistent with the principles laid down in Motipur, Tata Iron and Steel and DCM as against the defective
rulings given in Maheshwari and other cases.72 In Satyadev Chemicals, a single judge of the Gujarat High Court observed:

...It is always desirable that all the issues arising in a matter should be decided together and as expeditiously as possible. However,

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in the present case, the issue is in respect of the inherent jurisdiction of the authority and the application of the Act itself. Further,
no evidence is required to be led for deciding the said issue. It is an admitted fact that each of the above referred 50 employees
received monthly wages exceeding Rs 1600. In view of the provision contained in sub-s (6) of s 1, the provisions of the Act shall
not apply. The application made before the concerned authority is, therefore, not maintainable. Besides, it is also an admitted fact
that all the said employees have also availed of thestatutory remedy available under the Industrial Disputes Act, 1947 and have
filed recovery application before the labour court at Vadodara.73 (in Para 7)

In Gujarat Kamgar Panchayat, Tripathi J rightly held that, where a preliminary objection which goes to the root of the
matter touching upon the very jurisdiction of the tribunal to adjudicate the dispute was raised, the tribunal must first decide
that issue, before deciding other issues. The learned judge further observed that, having decided the preliminary issue
about jurisdiction, there was no reason for the tribunal in the instant case to postpone the decision on the preliminary issue
of such nature, the decision of which would have disposed of the entire case.74 It is submitted that the above two decisions
of Gujarat High Court lay down the correct law consistent with the ratio of Express Newspapers.75

(xiv) Review and Rectification of Errors

The expression ‘review’ is used in two distinct senses, namely,

(i) a review on merits when the error sought to be corrected is one of law and is apparent on the face of the record; and,

(ii) a procedural review which is either inherent or implied in a court or tribunal to set aside a palpably erroneous order
passed under a misapprehension by it.

No review lies on merits unless a statute specifically provides for it. In other words, the power of review is not an inherent
power. It must be conferred either specifically or by necessary implication.76Industrial tribunals and labour courts,
therefore, have no power of review because there is no provision in the Act vesting inherent powers in such tribunal or
courts analogous to those expressly vested in the civil courts by s 151 of the Code of Civil Procedure. The operative words
of s 11 (3) of the Act cannot be construed to confer power of review on the authorities mentioned therein expressly or by
necessary implication. Therefore, such tribunals, do not have the power to alter, clarify or even interpret or explain the
award they have already made, except the power to correct the clerical mistakes.77The provisions of s 36A of the Act
which require a reference to labour court, industrial tribunal or national tribunal of any matters of doubt or difficulty
arising as to interpretation of an award, clearly indicates that an industrial tribunal does not have an inherent power to
interpret or to review its award.78 In Tata Consulting Engineers, the industrial tribunal reduced the wage scales with
retrospective effect and it also laid down the principle enabling the actual fitment of the workmen in their respective wage-
scales and also provided for a number of increments to which they would be entitled having regard to the period of
completed service. Subsequently, on an application by the workmen, the tribunal made an insertion in the award purporting
to clarify and correct the award. A majority of the Supreme Court has taken the view that the words subsequently inserted
by the tribunal were omitted by an accidental slip which the tribunal was entitled to correct.79 But according to the minority
judge, it was not a case of accidental slip or omission because the insertion completely changed the character of the award,
which was not permissible in the guise of correcting an accidental slip or omission. Therefore, the tribunal travelled
outside and beyond the terms of the original award and thus committed a jurisdictional error. On the facts and
circumstances of the case, the view of the minority judge is correct.

However, when the ‘review’ is due to a procedural defect, the inadvertent error committed by the tribunal must be
corrected ex debito justitiae to prevent the abuse of its process and such power is inherent in every court or tribunal.80 Rule
28 of the Industrial Disputes (Central) Rules 1957, empowers the industrial tribunals to correct clerical mistakes or errors
arising from an accidental slip or omission in any award issued by them. Such clerical errors or mistakes, tribunals are
entitled to correct even without notice to the opposite party.81 This correctional jurisdiction conferred on tribunals is, in
terms, identical with the one conferred on the civil courts under s 152 of the Code of Civil Procedure. It is in consonance
with the first and foremost principles that no party should suffer any detriment on account of a mistake or an error
committed by a tribunal. The circumstance that the proceedings before the tribunal are deemed to be concluded when its
award becomes enforceable or that thereupon it becomes functus officio would be no ground for inferring any limitation of
time in the correctional jurisdiction of the tribunal. The legislature has not chosen to lay any limitation of time for
exercising the correctional jurisdiction of the tribunal.82 In Grindlays Bank (supra), the tribunal passed an ex parte award
against the workman which was duly published by the Central Government. Before the award became enforceable on the
expiry of 30 days after its publication, the workmen applied for setting it aside on the ground that they were prevented by
sufficient cause from appearing when the reference was called for hearing. Accordingly, the tribunal set aside the ex parte
award on being satisfied that there was sufficient cause. The Supreme Court repelled the contention that the tribunal had
become functus officio, and therefore, had no jurisdiction to set aside the ex parte award. In view of the provisions in s

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20(3) of the Act, which lays down that the proceedings before a tribunal would be deemed to be continued till the date on
which the award becomes enforceable under s 17A, after the expiry of 30 days from the date of its publication, the court
held that the tribunal retains jurisdiction over the dispute referred to it for adjudication up to the date it becomes
enforceable and till that date it has the power to entertain an application in connection with such dispute. Since the
application for setting aside the ex parte award was filed before the expiry of 30 days of its publication, the tribunal rightly
entertained it and had jurisdiction to entertain it and decide it on merits. It was further held that the jurisdiction of the
tribunal had to be seen on the date of the application made to it and not on the date on which it passed the order setting
aside the ex parte award as ‘there is no finality attached to an ex parte award because it is always subject to its being set
aside on sufficient cause being shown’.

Against an ex parte order or award, the aggrieved party has to apply to the labour court for setting aside such order or
award and the labour court has the jurisdiction to entertain such an application. In Chanchal Singh, an ex parte order was
made against the employer company on 17 March 1979 which was published on 12 April 1979. The company applied for
setting aside the award on 25 April 1979 which was dismissed on 2 November 1979 for default of appearance. The
company then filed a review petition on 30 November 1979 which was rejected by the labour court on 5 March 1980 on
the ground that it had no power to review its judgment. The company then filed a fresh review petition for review of the
order dated 5 March 1980 which was entertained by the labour court. In a writ petition by the workman, against the order
of the labour court entertaining the review petition, the Delhi High Court held that the order of the labour court dated 5
March 1980 was a decision finally deciding the case as far as the labour court was concerned.83 This decision even if
erroneous in law or on facts was not defective due to any procedural defect. Hence the order could not be reviewed by the
labour court though could have been challenged in a writ petition before the High Court or by a petition for special leave to
appeal before the Supreme Court.

In Subrata Guha Sarkar, the company filed a review application of an order of the labour court computing the back wages
and other benefits to which the workman was entitled under an award of the industrial tribunal which was rejected by the
labour court. Subsequently, the employer filed another review petition which was, allowed by the labour court depriving
the legal representatives of the workman, who had died in the meanwhile. A single judge of the Calcutta High Court, in the
circumstances of the case, particularly the dilatory tactics adopted by the employer company, held that the second
application for review was not maintainable particularly when the review application had been disposed of on contest after
hearing both the parties. Speaking for the court, Bhattacharjee J made a very touching observation: ‘What may be a luxury
for the affluent employer is a death-knell to the poor employee. Indeed, if any honest reckoning is made, it will be evident
that the employer incurred expenditure much more than its liability towards the outstanding wages of the employee’.84 This
attitude on the part of the unscrupulous employers apart from being deprecated requires serious sanctions. The analogy of
an ex parte order or decree of a civil court does not apply to an ex parte order or award of the labour court. In the Code of
Civil Procedure which governs the trial of suits by civil courts, there are no provisions analogous to s 17 A(2) and s 20(3)
of this Act. The Code of Civil Procedure does not declare that any order or decree of the civil court shall be final or the
proceedings before a civil court shall be concluded within the prescribed time of the publication of such order or decree.
There is an elaborate procedure enacted in r 30 of O 9 of the Code of Civil Procedure for setting aside an ex parte order or
decree and limitation has been provided therefor.85 In Birla CSW Mills, the Calcutta High Court held that the operative
words of s 11 (3) could not certainly be construed to confer on the tribunal, the power to review or recall the award. Once
the award is published, the tribunal cannot alter, modify, clarify or even interpret the award except a possible power to
correct clerical mistakes. The Bench further observed: we are of the view that the tribunal was not justified in exercising
the power of review/recall of its earlier order on the premise or that it was competent to set aside the ex parte award.86

SUB-SECTION (2): POWER OF ENTRY INTO PREMISES - REQUIREMENT OF NOTICE

This sub-section is analogous to O 18, r 18 of the Code of Civil Procedure, which provides: ‘The court may at any stage of
a suit inspect any property or thing concerning which any question may arise’.87 The sub-section authorises the authorities
mentioned therein to enter the premises occupied by any establishment to which the dispute relates after giving reasonable
notice. This notice is only for the purpose of entering the premises to make an inquiry into any existing industrial dispute
or any apprehended industrial dispute. In the under-noted case,88where the conciliation officer had entered the premises of
a distillery without giving any reasonable notice as required by s 11(2), the Supreme Court discountenanced the contention
that the settlement brought about by him was not legal and binding, as he had lost jurisdiction on account of non-
compliance with the requirement of the notice under s 11(2) and held that the purpose of the notice under s 11(2) is merely
to apprise the establishment that it is a conciliation officer who is coming and not an absolute stranger who has no
connection at all with the machinery set up for the purpose of the Act and that non-compliance with the requirement of
notice under s 11(2), therefore, would not affect the competence of the conciliation officer, to bring about a settlement.

SUB-SECTION (3): POWERS UNDER THE CODE OF CIVIL PROCEDURE 1908

This sub-section provides that the authorities mentioned therein, such as, industrial tribunals, etc, shall have the same

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powers as are vested in a civil court under the Code of Civil Procedure 1908, when trying a suit, in respect of the matters
enumerated therein. It is evident that the entire Code of Civil Procedure has not in terms been made applicable to the
proceedings under this Act. Consequently, the specific provisions of the Code pertaining to jurisdiction do not strictu sensu
govern the adjudicatory proceedings. However, even if the language of the specific sections of the Code is not applicable
to a situation, the broader general principles underlying them would undoubtedly be relevant.89

(i) Oral Evidence - Enforcing Attendance of Witnesses

The evidence to be submitted in industrial adjudication may be:

(a) ‘oral’ consisting of statements made verbally by the parties or their witnesses at the hearing; or

(b) ‘documentary’, consisting of letters, agreements, deeds, statements of accounts, balance-sheets and other documents put
in by either side.

This clause vests the tribunal with the same powers as are vested in a civil court in the matter of enforcing attendance of
any person and examining him on oath. This power includes the power to recall a witness for further examination or cross-
examination.90 The relevant provisions of the Code of Civil Procedure in this behalf are s 27 to s 32 and Orders 16 and 18.
Section 27 to s 32 deal with ‘summons and discovery’. Order 16 deals with ‘summoning and attendance of witnesses’ and
O 18 deals with ‘hearing of the suits and examination of witnesses’. Where the summons issued by the tribunal to the
Managing Director was challenged on the ground that the summons should have been issued to the Branch Manager who
is dealing with the issues raised in the dispute and not to the Managing Director, it was held that under s 11 (3), the tribunal
is vested with the same powers as a civil court under the CPC in respect of enforcing attendance of any person, etc., and
that the Managing Director alone was competent to file the writ petition against the summons issued to him.91 The
evidence is to be taken on oath. However, a party must produce all the witnesses whose evidence is relevant and material
to the case. Particularly in disciplinary matters, the real witness who can prove or disprove the charge levelled against the
delinquent must be produced and failure to produce such a witness would lead to the adverse inference against the party
who should have produced that witness.92False evidence given on oath or affirmation in industrial adjudication
proceedings is perjury, and the person guilty of willfully giving such evidence may be prosecuted and punished for such
crime. Similarly, it is offence to manufacture false evidence to be used in industrial adjudication, even though the
adjudication may not have taken place or the false evidence may not, in fact, have been used. Though the strict
technicalities of the Evidence Act do not apply to industrial adjudication, the rules of evidence to be observed by industrial
adjudication are the same as those which will apply in the courts of law. Adjudicators are often called upon to decide
difficult questions as to admissibility of evidence which is tendered before them. Objections may be taken to the admission
of evidence, either on the ground of incompetency of the witness or of the nature or materiality of the evidence. In the
former case, the adjudicator is the absolute judge, and if he makes an error in receiving or rejecting any evidence, the
award cannot usually be challenged or set aside. But an error as to the materiality of evidence on the part of the adjudicator
may be attended with more serious consequences. The danger usually lies, not in receiving immaterial evidence, but in
rejecting material evidence. If he takes the evidence which is not material, and therefore, ought to have been rejected, no
harm will be done, if such evidence has not been taken into consideration.

An award cannot, in general, be impeached on the ground that the adjudicator has admitted inadmissible evidence, though
where the irrelevant and extraneous evidence goes to the root of the matter and the adjudicator had taken it into
consideration in arriving at his conclusion, the award will be quashable. But if the tribunal erroneously refuses to admit
evidence, which is, in fact, material, he will not have heard everything which might have influenced his mind in coming to
a decision upon the dispute. In such an event, the award will be liable to be quashed. Generally, an adjudicator should hear
all the witnesses and examine all the documents tendered by the parties, though he may be of the opinion that sufficient
evidence has already been adduced. A party will not be successful in getting the adjudicator’s award quashed on the
ground that he has rejected material evidence unless he has, in fact tendered the evidence to the adjudicator, and, if
necessary, has stated its purport. If evidence is of a type which would not be admissible in a court of law, the tribunal must
reject it. For instance, generally, all ‘hearsay’ evidence is inadmissible, ie, any written or verbal statement made by a
person who is not going to be called as a witness at the adjudication. If either side wants to refer to a statement made by a
certain person supporting his view of the case, he must, as a rule, call that person as witness. If he does not, then neither he
nor any of his witnesses may introduce the statement in question as evidence of the truth of the fact stated.93 In examining
his own witnesses—’examination-in-chief’, a party is not entitled to put ‘leading questions’—ie questions so framed as to
suggest the answer required or actually put that answer into the witness’s mouth. But ‘leading questions’ are permissible in
cross-examination. A party may sometimes wish to put further questions to one of his witnesses after cross-examination.
Such ‘re-examination’ must be confined to matters raised in cross-examination, fresh matter should not be introduced
except with the tribunal’s consent.

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(ii) Documentary Evidence—Discovery, Production and Inspection of Documents

This clause invests the tribunal with the powers of civil court under s 30 and s 32 and O 11 of the Code of Civil Procedure
in the matter of ‘compelling production of documents and material objects’. Section 30 deals with power of the court, inter
alia, of discovery of documents and s 32 gives the court some penal rights to compel the compliance of the orders under s
30. Order 11 deals with the discovery and inspection of the documents. Rule 24 of the Industrial Disputes (Central) Rules
1957 also, inter alia, gives the powers under O 11 of the tribunals in the matter of ‘discovery and inspection of
documents’. The combined effect of s 11(3)(b) and r 24 of the Industrial Disputes (Central) Rules 1957 is that the
tribunal’s powers in the matter of production, discovery and inspection of documents are strictly governed by the
provisions of O 11 of the Code of Civil Procedure. An industrial adjudicator has jurisdiction to direct a party to produce
any document that may be in possession of such party for the purpose of proper adjudication of any issue referred to it by
the government or framed by it. However, in connection with the documentary evidence, the adjudicator has to observe a
number of rules. For instance, it is desirable that he should allow evidence to be adduced in respect of all issues and not
piecemeal. 94 In Veeraraghavan, on an application being made by the employer, the labour court issued summons to the
electrical inspector for production of the register showing the employee as cinema operator and the electrical inspector did
not attend the hearing and the application was closed but the employer again filed an application for summoning the
electrical inspector on which the labour court refused to issue summons to the electrical inspector to produce the register.
In a writ petition against the subsequent order of the labour court, a single judge of the Madras High Court held that the
mere fact that the earlier application was closed on the ground of non-appearance of the electrical inspector is no grounds
for rejection of the subsequent application because the document summoned was a material document.95 The adjudicator is
only entitled to consider documents put in evidence. He ought not to allow himself to be influenced by documents which
might have come into his possession but have not been put in as evidence. Where a party wishes to prove the contents of a
document, the ‘best’ or ‘primary’ evidence is production of the document itself ‘secondary’ evidence in the form of a copy
or verbal evidence as to the contents, is admissible only where there is some good reason for failure to produce the
original, but where the object of the party is not to prove the contents of a document but only to establish the position
created by it, independent evidence is admissible. Where parties have entered into a written contract, external evidence -
verbal or written - is not admissible to add to and vary or contradict what is written. However, there are important
exceptions to this general rule. The adjudicator should take a careful note of the evidence called or put in before him or of
any legal points raised in the course of the hearing.

(a) Interrogatories

Rules 1 to 11 of O 11 of the Code of Civil Procedure deal with interrogatories. A party to adjudication proceedings before
an industrial tribunal cannot request it to deliver interrogatories to the other party in regard to points to be proved by the
evidence of the other party, for ‘a party to a suit may administer interrogatories on the material facts relied upon by the
other party for his claim or defence as set out in the pleadings but not on the evidence by which a party’s case may be
proved’. Every party to the adjudicatory proceedings is entitled to see the nature of his opponent’s case, so that he may
know before-hand what case he has to meet at the hearing. But he is not entitled to know the facts which constitute
exclusively the evidence of his opponent’s case. Every adjudication contemplates two sets of facts, namely (1) facts which
constitute a party’s case, this must be pleaded with sufficient details, and (2) facts which constitute a party’s case to be
proved ie evidence which need not be pleaded. 1

(b) Discovery, Production and Inspection of Documents

Rules 12 and 13 of O 11 of the Code of Civil Procedure deal with the discovery of documents. Rule 14 deals with the
production of the documents and rr 15 to 20 deal with the inspection of documents. The employers and employees must
make available to the tribunal all the relevant documents including account books as they are likely to assist proper
decision of a question in issue. Where, therefore, any of the parties to the dispute asks the other for the production of such
documents, it should ordinarily be possible for the opposite party to comply with the request, subject however, to the
protection of s 21 of the Industrial Disputes Act. When any such prayer is made, the tribunal has to use its judicial
discretion in the matter. In the absence of any special circumstances, it would ordinarily be justified in asking one party to
give to the other party, reasonable access to all relevant papers and documents.2The tribunal on examination of the
confidential information can record its conclusions without referring to the figures and facts provided in the confidential
documents, unless the employer gives up his privilege under s 21 of the Act3 but a party can only be ordered to produce
documents which are in its possession or in its power, which evidently refer to existing documents which though not
actually in the immediate possession of the party, are readily available to it. A party cannot be directed to prepare abstracts
or lists from the records in his possession. Neither s 11 of the Act nor r 24 of the Industrial Disputes (Central) Rules 1957
specifically provides for the application of all the provisions of the Code of Civil Procedure governing discovery,
inspection and production of documents. Nevertheless, in considering the powers of industrial adjudicators to order
inspection of documents, the deciding factor should be as to what are the powers of civil court to order

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inspection.4Similarly, where confidential correspondence of a party is sought to be discovered, such party can claim
privilege under the provisions of the Evidence Act.5Section 34A of the Banking Companies Act and s 24 of the Payment of
Bonus Act 1965, indicate that the tribunal dealing with a dispute regarding bonus between a banking company and its
workmen has no power to direct the company to furnish particulars in respect of provisions made for doubtful and bad
debts and other usual necessary provisions, because such a direction would be against the statutory provision and as such
bad in law.6 Once a privilege is claimed, it is not open to the tribunal to question the claim and assert the right to examine
documents. There is no estoppel in claiming such privilege, and the fact that such a document has already been submitted,
does not prevent a party from subsequently claiming the privilege.7

(c) Procedure to Order Discovery and Inspection

It is not an unlimited power or rather a power, the exercise of which is limited only by the discretion of the judge, that even
s 30 of the Code of Civil Procedure, confers on a civil court. The power conferred by s 30 of the Code of Civil Procedure
is specifically subjected to ‘limitations and conditions as may be prescribed’, ie the conditions and limitations prescribed,
for instance, by relevant rules in O 11 of the Code of Civil Procedure. An industrial adjudicator, therefore, must conform to
the general principles that underlie the provisions in O 11 of the Code of Civil Procedure, governing the inspection of
documents. Unless the condition prescribed by r 18(2) of O 11 of the Code of Civil Procedure are satisfied, the power to
order inspection of documents referred to in r 18(2) does not spring into existence. The court or a tribunal must apply its
mind and satisfy itself that the limitations, under which jurisdiction or power is exercisable, are satisfied. If a tribunal fails
to appreciate and apply its mind to the preliminary question it has to decide, it would amount to erroneous assumption of
jurisdiction.8 It follows that the tribunal must comply with the principles contained in the provisions of O 11, r 18, of the
Code of Civil Procedure, before ordering production and inspection of documents. An order passed in contravention of the
principles of the provisions in O 11, especially rr 11 and 18 will be quashable.9 Under O 11, r 15, the right to seek
inspection is confined to the documents referred to in the pleadings or affidavits of the parties against whom the right can
be claimed. Rule 18 (1) of O 11 of the Code of Civil Procedure, provides for inspection of documents other than those
referred to in r 15. The conditions to be satisfied, before the power under r 18(2) can be exercised, are:

(i) there should be an affidavit to show the documents, inspection of which is sought;

(ii) party who applies for the inspection of documents should establish that he is entitled to inspect them; and

(iii) the documents inspection of which is sought, must be in the possession of the party against whom the order for inspection
is sought.

Overriding all these conditions is the further requirement that the court should be of the opinion that the document of
which inspection is sought is necessary either for disposing of fairly the suit or for saving costs. Failure to confirm to the
requirements of the affidavit will affect the power of the court to order inspection. The court, therefore, must insist upon
filing of such affidavit. A party applying for inspection should establish that he is entitled to inspect the documents, full
proof of which the court must insist upon, before ordering the inspection of the documents that fall within the scope of r
18(2). Whether the right to inspect claimed in a given case is to be held established or not must, of course, depend on the
circumstances of that case and it is neither desirable nor even possible to prepare an exhaustive list of cases that would
amount to an established right. The mischief of roving inspection should always be in the mind of the tribunal. Section 11
does not contemplate preparation of evidence by one party for the benefit of the other.10 Until an affidavit of inspection of
document has been directed to be filed, the court would have no jurisdiction to order inspection. This is not a procedure
which can be omitted. It is not merely a shadow but a matter of substance that the party should be called upon and should
be enabled to state on oath as to what documents are relevant and are in his possession or power, before being called upon
to give inspection thereof. The industrial tribunals are creatures of statute and, therefore, they are bound to follow the
procedure laid down by the statute. They cannot evolve their own procedure in the case of discovery and inspection of
documents.11Though the principles regarding discovery and inspection of documents as observed in ordinary judicial trials
are to be observed, ‘in adjudicatory proceedings under the Act as well, in such proceedings ‘too many technical rules ought
not to be imported especially when such rules tend to defeat the purpose for which the Industrial Disputes Act was
promulgated’. Normally, workmen have no access to the books and documents which remain in the possession of the
employer. If on technical grounds, inspection is ruled out, no workman can prove his case. If the tribunal fails to order
production and inspection of relevant evidence and bases its findings on insufficient evidence, its award will be
unsustainable in law.12

In order to determine the relevance, there must be some material before the tribunal. In order that there should be material
before the tribunal, the applicant must place it before the tribunal, and this he can do by setting out in the application, the
necessary facts, the necessary contentions as to the nature of the document, the necessity for their production, what kind of
reliance he wishes to place thereon and what is the case which he wishes to make out. The application for production of

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documents must contain all the necessary materials in order to enable the tribunal to apply its mind, to determine relevancy
of the documents and ascertain whether inspection should be allowed or not and then pass a proper order. It is settled law
that a party to any litigation cannot be permitted to embark on a fishing or roving inquiry in the hope that some material
will come to hand on the basis of which he can set out his case. No doubt, in a proper case, after the necessary material is
on record, the tribunal may order production of relevant documents which would be necessary for the purpose of the
adjudication. But before that can be done, it would be the duty of the party asking for production of the documents to make
out a case as to why it would be necessary for certain documents to be produced.13 Documents of confidential or privileged
nature, such as proceedings, books of the board of directors’ meetings or income tax returns etc, cannot be demanded, by
one party from the other. The aid of the tribunal cannot be invoked for a roving investigation or discovery of possible or
potential causes of action.14 Nor can a party call upon the other to furnish information to him to make out a case to be
presented in the plaint. The question of discovery arises only after the claim statement has been filed. An order passed by a
tribunal, without having the statement of claim before it and with a view to enabling workmen to prepare their statement of
claim, would be bad in law, being not in consonance with the fundamental principle of law contained in O 11 of the Code
of Civil Procedure.15 The tribunal should pass appropriate orders allowing or refusing discovery as discovery does not only
relate to the specific documents mentioned in the application, but has to be made, if ordered by the tribunal, by filing an
appropriate affidavit under O 11, r 13 of the Code in the prescribed Form 5 in the Appendix to the Code. So far as
inspection is concerned, it is for the party claiming inspection to serve an appropriate notice on the other to allow
inspection and on the failure of that party to do the needful, to take appropriate proceedings, before the tribunal in
accordance with law.16

(d) Proof of Documents

In the words of Mahajan J, the adjudication of a dispute has to be in accordance with evidence legally adduced.17By s
11(3), and r 24 of the Industrial Disputes (Central) Rules 1957, certain provisions of the Code of Civil Procedure have
been made applicable to the authorities mentioned therein. Those authorities have been given the same powers as are
vested in civil courts for the purposes specified. There is considerable judicial opinion which holds that to the extent to
which the provisions of the Code of Civil Procedure have been made applicable to the authorities in s 11, they are courts
within the meaning of s 3 of the Indian Evidence Act and are therefore bound by its provisions.18 Anyhow, it is now well
settled that a party to an industrial dispute has to prove by satisfactory evidence, the particular claim he wishes to make.19
But in Sindhu Resettlement Corpn, Bhargava J observed that if no objection is taken to the admissibility or about the
genuineness of a document which has been filed but has not been proved by oral evidence, such document in certain
circumstances may be relied upon by the tribunal because in proceedings before the industrial tribunal, strict proof of
documents in accordance with the provisions of theEvidence Act is not required.20 But this proposition seems to be
confined to the facts of that case alone and cannot be said to be of uniform or universal application in industrial
adjudication. In Bareilly Electricity Supply, Jaganmohan Reddy J observed:

Even if technicalities of the Evidence Act are not strictly applicable except in so far as section 11 of the Industrial Disputes Act
1947 and the rules prescribed thereunder permit it, it is inconceivable that the tribunal can act on what is not evidence such as
hearsay, nor can it justify the tribunal in passing its award on copies of documents when the originals which are in existence are not
produced and proved by one of the methods either by affidavit or by witnesses who had executed them if they are alive and can be
produced. Again if a party wants an inspection, it is incumbent on the tribunal to give inspection, in so far as that is relevant to the
inquiry. The applicability of these principles is well-recognised and admits of no doubt.21

In other words, documents such as profit and loss account statements or balance sheets etc which are produced in the
course of adjudication proceedings, must be proved like any other documents filed in a court of law,22though such
documents may not be strictly admissible in evidence under the Evidence Act.23 In Metro Goldwyn Mayer, the workmen
relied upon a copy of the agreement in respect of wage scales said to have been entered into by their employer with the
workmen at one of their branches. The employer, instead of producing the original agreement which was in its possession,
attacked the accuracy of the wage scales mentioned in the copy produced before the labour court. The labour court
accepted the copy of the agreement produced by the workmen as the basis of its award. In the writ petition against the
award of the labour court, the High Court held that the award was not based on inadmissible or unproved evidence, as the
employer did not do anything to prove the correct scales in force at the particular branch and it was open to the labour
court to accept the evidence led in by the workmen.24 If the signatures of a workman on a document is not disputed, it is
not necessary to examine the person who signed it to prove the document.25 It is well settled that where a party fails to
produce a document required to be produced, it is open to the tribunal to draw an adverse inference against the party failing
to produce the document. However, adverse inference can only be drawn where the documents in possession of a party is
not produced before the tribunal. But such inference cannot be drawn if the document does not exist or is not in the
possession of the party from whom it has been called.26

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Profit and Loss Account and Balance Sheets

In Associated Cement Companies, for the purpose of working out the bonus formula, the Supreme Court stated as a general
rule that the amount of ‘gross profits’ ascertained in the profit and loss account of the employer, is to be accepted without
submitting such statement to a close scrutiny. Nevertheless, if it appears that entries have been made on the debit side
deliberately and mala fid e to reduce the amount of ‘gross profit’, it would be open to the tribunal to examine the question
and if it is satisfied that the impugned entries have been made mala fide, it may disallow them. Likewise, the tribunal may
also exclude any items either on the credit or the debit side, if such items are wholly extraneous or entirely unrelated to the
trading profits of the year. It was, however, pointed out, that it is only in glaring cases where the impugned item may be
patently and obviously extraneous, that a plea for its exclusion should be entertained and the tribunal must resist the
temptation of dissecting the balance sheet too minutely or of attempting to reconstruct it in any manner.27 On the same day,
the same Bench in Indian Hume Pipe, accepted the balance sheet of the company as good evidence to prove that certain
amounts out of the returns were actually used as working capital. Since, these two cases did not talk of the requirement to
prove the correctness of the items included in the profit and loss account statement or the balance sheet, it gave scope for
the view that these documents could be relied upon for providing that the amounts of expenses stated therein were correct
and were available for using as working capital and that it showed that they were in fact so used. But from the report of the
case, it appears that, as a matter of fact, it was conceded that the reserves in fact were used as working capital. Presumably
to meet the contention that the balance sheet had not been proved, Bhagwati J observed, ‘moreover no objection was urged
in this behalf, nor was any finding to the contrary recorded by the tribunal’.28 The ratio of Indian Hume Pipe was
explained in Khandesh Spg & Wvg Mills, in which Subba Rao J pointed out that the observations of Bhagwati J in that case
were not intended to lay down the law that the balance sheet by itself was good evidence to prove as a fact the factual
utilisation of reserves as working capital and the court would not have accepted the items in the balance sheet as proof of
user if it was not satisfied that no objection was taken in that behalf In support of this view, it was stated that since the
accounts of the company were prepared by the management and so also, the profit and loss account statements and balance
sheets, there would be tendency on the part of the employers to deflate the figures of rehabilitation etc and the labour has
no concern with it and when so much depends upon a particular item in the balance sheet, the principles of equity and
justice demand that the industrial adjudicator should insist upon a clear proof of the same and also give a real and adequate
opportunity to the labour to canvass the correctness of the particulars furnished by the employer.29 Thus in this case, the
court clearly envisaged the requirement of the proof of the items included by the employer in the balance sheet and the
right of the labour to test the veracity of the evidence adduced by the employer to prove such items.

The question as regards the sufficiency of the balance sheet itself to prove the fact of utilisation of any reserves as working
capital was also considered in Trichinopoly Mills, where the court held that the balance sheet does not by itself prove any
such fact and that the law requires such an important fact as the utilisation of a portion of the reserves as working capital
has to be proved by the employer by evidence given on affidavit or otherwise and after giving an opportunity to the
workmen to contest the correctness of such evidence by cross-examination.30 The necessity of proof of the correctness of
the statements in the balance sheet was again precisely pointed out in Petlad Turkey, where it was observed that it could
not be presumed that the statements made in a balance sheet are always correct and that the burden is on the party who
asserts the statements to be correct, to prove the same by relevant and acceptable evidence.31 In Metal Box, the court said
that if an employer claims the deduction of any items, say, depreciation, the burden of proof, that depreciation claimed by
him is the correct amount in accordance with the provisions of Income-tax Act, is on the employer and that burden the
employer must discharge once his figures are challenged.32

In Peirce Leslie, the balance sheet of the company for the year in question allowed some amount as provisions for taxation
liability and other amount as provisions for proposed dividend on deferred ordinary shares. No evidence was let in by the
company to show that these amounts were used as working capital in the year in question. The company did not contend
that whatever appeared on the assets side in the balance sheet over and above the ‘paid-up’ capital came out of the
reserves, apparently on the ground that some of the items shown as ‘current liabilities and provisions’ in the balance sheet
would have to be met during the year out of the portion of current assets which portion would accordingly not be available
for use as working capital. If that was the case as regards the other items under ‘current liabilities and provisions’, the same
must be the case as regards the current liability under ‘liability for taxation other than income-tax’ and under ‘proposed
dividend on deferred ordinary shares’. In the absence of any evidence to the contrary, the court held that these ‘current
liabilities’ had also to be met out of the current assets during the year in question as the company failed to prove that the
amounts were used as working capital.33 In Cannanore Spg and Wvg Mills, the requirement of proving the statements in
the balance sheet was highlighted by pointing out that before an analysis of the statement in the balance sheet is
undertaken, it is necessary to establish that the statements in it are, in fact, correct and in the absence of any evidence to
show that any particular entry in the balance sheet is true, it cannot be presumed that the statements is correct.34 In Anil
Starch, the requirement of proper opportunity being given to the labour, to test the correctness of the evidence given on
affidavit on behalf of the management in regard to the user of the reserves as working capital was emphasised.35 These
requirements were taken as settled law in Bengal KM Union, in which the court held:

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It is now well-settled that the balance sheet cannot be taken as proof of a claim as to what portion of the reserves has actually been
used as working capital and that utilisation of a portion of reserves as working capital has to be proved by the employer by
evidence on affidavit or otherwise, after opportunity to the workmen to contest the correctness of such evidence by cross-
examination.36

In UP Electric Supply, the witness, deposing on the expenses incurred in connection with fuel, gave detailed break-up of
the expense in his examination-in-chief and repeated in his cross-examination. In the cross-examination no question was
posed to him as to how the figure of the expense was arrived at. The court held that though the tribunal was not bound to
accept a particular figure appearing in the audited balance sheet, when a witness had deposed about the break-up thereof
and was subjected to cross-examination, his evidence should not be discarded. On this view of the matter, it was held that
the tribunal had erred in not accepting the balance-sheet figure and testified by the witness.37 In Bareilly Electricity Supply,
the court observed:

When a document is produced in a court or a tribunal the questions that naturally arise are: is it a genuine document, what are its
contents and are the statements contained therein true. When the appellant produced the balance sheet and Profit and Loss Account
of the company, it does not by its mere production amount to a proof of it or of the truth of the entries therein. If these entries are
challenged, the appellant must prove each of such entries by producing the books and speaking from the entries made therein. If a
letter or other document is produced to establish some fact which is relevant to the inquiry, the writer must be produced or his
affidavit in respect thereof be filed and opportunity afforded to the opposite party who challenges this fact. This is both in accord
with principles of natural justice as also according to the procedure under Order 19, Civil Procedure Code and the Evidence Act
both of which incorporate these general principles. Even if all technicalities of the Evidence Act are not strictly applicable except
insofar as section 11 of the Industrial Disputes Act 1947 and the rules prescribed therein permit it, it is inconceivable that the
tribunal can act on what is not evidence such as hearsay, nor can it justify the tribunal in basing its award on copies of documents
when the originals which are in existence are not produced and proved by one of the methods either by affidavit or by witnesses
who have executed them, if they are alive and can be produced.38

Again if a party wants an inspection, it is incumbent on the tribunal to give inspection, insofar as that is relevant to the
inquiry. The applicability of these principles is well recognised and admit of no doubt. But a rebuttable presumption in
favour of the duly audited profit and loss account statements and the balance sheets of the companies has been enacted by s
23 of the Payment of Bonus Act.39

Auditor’s Certificates

The presumption raised by s 23 of the Payment of Bonus Act 1965 in favour of the duly audited profit and loss account
and the balance sheets of the companies, will not apply to the auditor’s certificate. As the Act does not provide for any
such presumption, the auditor’s certificates, therefore, have to be proved before the tribunal by adducing proper and
sufficient legal evidence. In Metal Box, the Supreme Court said the burden of proof that depreciation claimed by it was the
correct amount in accordance with the Income Tax Act, was on the employer and that burden he must discharge, once the
figures were challenged and there was no presumption in favour of auditor’s report as is available in case of audited
balance sheets and profit and loss account under s 23 of the Payment of Bonus Act. Shelat J stated the principle in the
following words:

Mere production of auditor’s certificate, especially when it is not admitted by labour, not by the auditor but by the employees of
the company who admitted not to have been concerned with its preparation or the calculations on which it was based, would not be
conclusive. We do not say that in such a case the tribunal should insist upon proof of depreciation on each and every item of the
assets. It should, however, insist on some reasonable proof of the correctness of the figure of depreciation claimed by the employer
either by examining the auditors who calculated and certified it or by some other proper proof Depreciation in some cases would
be of a large amount affecting materially the available surplus. Fairness, therefore, requires that an opportunity must be given to
the employees to verify such figures by cross-examination of the employer or his witnesses who have calculated depreciation
amount***. The proper course for the tribunal in such a case was to insist upon the company adducing legal evidence in support of
its claim instead of taking the figure of depreciation from the profit and loss account which was not worked out in accordance with
the Income Tax Act but under section 205 of the Companies Act, and saying that the company had failed to prove that it was a
mistaken figure.40

(iii) Commissions

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This clause vests the tribunal with the powers of the civil court under the Code of Civil Procedure to issue commission for
examination of witnesses. Order 26, rr 1 to 8 deal with the subject of commissions to examine the witnesses. The power to
issue a commission also includes to re-issue the commission.41

(iv) ‘Matters Prescribed’

The power with which the authorities mentioned in sub-s (3) have specifically been vested are enumerated in cll (a) to (c)
of this sub-section. But with respect to other matters, powers have to be prescribed by the Central or the state government
as the case may be.42 With a view to enable the tribunal to function with a certain amount of agility, the legislature has not
made its procedure hidebound. Only limited and specific provisions of the Code of Civil Procedure have been made
applicable to the procedure of the tribunals in the investigation and adjudication of industrial disputes. However, with a
view to overcome some unforeseen eventualities, the Central Government and the state governments have been
empowered to further apply certain provisions of the Code of Civil Procedure. Rule 24 of the Industrial Disputes (Central)
Rules 1957 prescribes the following further matters with respect to which the provisions of the Code of Civil Procedure to
the investigation and adjudication of industrial disputes by the authorities mentioned in sub-s (3) will apply, namely:

(i) Discovery and inspection: this power has in fact been given by cl (b) of sub-s (3) as well.

(ii) Granting adjournments.43

(iii) Reception of evidence taken on affidavit.44

These are the powers under the Code of Civil Procedure which have been invested in the authorities by the Central Rules.
The various state governments have made their own rules in this behalf applying certain provisions of the Code of Civil
Procedure with respect to the procedure of the authorities mentioned in the sub-section. But in the absence of rules, other
provisions of the Code of Civil Procedure are not applicable to the proceedings before these authorities,45 though in certain
cases the general principles of law which have been given legislative form by enacting them in the Code of Civil
Procedure, would always apply to the proceedings before the tribunals; for instance the principles relating to pleadings,
issues, evidence and hearing etc. The power to bring on record the legal representatives of the deceased workman in a
pending industrial dispute is not one of the powers conferred or prescribed under s 11 (3) of the Act.46

(v) Tribunal - Not a Court

An industrial tribunal is not a ‘court’ within the meaning of s 195(1)(b) of the Code of Criminal Procedure 1973, because
the award given by the tribunal is not final and binding in nature. Even though sub-s (3) provides that for the purpose of s
193, the proceedings before the tribunal will be considered to be judicial, yet it does not provide that an industrial tribunal
will be considered to be a court within the meaning of s 195(1)(b) of the Code of Criminal Procedure. It is, therefore, not
necessary, for the tribunal to file a complaint for an offence under s 193 of the Indian Penal Code. The tribunal, therefore
cannot take cognisance of a complaint under s 476 of the Code of Criminal Procedure for lodging a complaint.47

SUB-SECTION (4): POWERS OF CONCILIATION OFFICER TO ENFORCE ATTENDANCE AND INSPECT

DOCUMENTS

Previously a conciliation officer was empowered only to call for and inspect any document which he has grounds for
considering to be relevant to the industrial dispute under conciliation, or for other purposes specified in this sub-section.
Now, by the Amending Act 46 of 1982,48 a conciliation officer has been empowered to ‘enforce the attendance of any
person for the purpose of examination of such person’ in addition to the power to inspect any document. For this limited
purpose, he is vested with the same powers as are vested in a civil court under the Code of Civil Procedure 1908. But the
powers of the conciliation officers even after the amendment are not as wide as those of the authorities mentioned in sub-s
(3). In Ganesan, the facts were that the special deputy commissioner of labour passed an order to the effect that the
dismissal orders passed by the employer against the workmen after conducting enquiry shall be kept in abeyance and that a
decision shall be taken only after discussions with him. Single judge of the Madras High Court quashed the said order of
the deputy commissioner of labour and held that such an order was not sustainable in law and that there was no provision
in the Standing Orders requiring the management to place his decision before the Special Deputy Commissioner of labour.
The learned judge further held that when once it had been agreed before the conciliation officer that an inquiry would be
conducted, the conciliation officer had no power to impose any restriction on the management from proceeding with the
findings of such inquiry and imposing punishment depending upon the seriousness of the offence.49

SUB-SECTION (5): ASSESSORS

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Sub-section (5) empowers the adjudicatory authorities referred to therein, to appoint assessors to advise them in the
proceedings before them. It clearly vests discretion in these tribunals to appoint an assessor or assessors to advise them in
such proceedings, which has been made clear beyond doubt by the use of the words ‘may, if it so thinks fit’. But every case
must depend on its own facts.50 It is, therefore, open to an adjudicator to consult an expert on any technical questions
arising in the case which presents special difficulty relating to engineering or accountancy etc. But the adjudicator who
invokes expert assistance must not delegate his own functions or allow his advisor to decide the case. It is the decision of
the adjudicator, and not that of the expert, for which the dispute has been referred to adjudication. The expert can only
offer an opinion upon the points upon which he is consulted, it is the adjudicator’s duty to apply the advice he has
received, and to exercise his own judgment, making such use as he may choose of the expert’s opinion in deciding the
dispute. The function of the ‘assessors’ is to assist the tribunal, and to be able to perform their functions properly, they
must have before them the entire evidence. Hence, unless they have an opportunity to hear and consider the entire evidence
which is tendered in a case, they cannot give proper opinion in the matter.51

SUB-SECTION (6): PUBLIC SERVANTS

By virtue of this sub-section, all the authorities enumerated therein shall be deemed to be ‘public servants’ within the
meaning of s 21 of the Indian Penal Code.

SUB-SECTION (7): COSTS OF ANY PROCEEDINGS—DISCRETION OF TRIBUNALS, ETC

On a plain reading of this sub-section, it is manifest that:

(i) the expression ‘costs of any proceeding’ means the costs of the entire proceeding as determined on its conclusion and not
costs in a pending proceeding, nor costs to be incurred in future by a party; and
(ii) the expression ‘costs incidental to any proceeding’ similarly means costs of interlocutory applications, etc—such costs as
have been determined therein, at the conclusion of the hearing.

Neither of the two expressions has any reference to costs payable in advance or to be incurred in future by a party.
Naturally, such costs cannot refer to halting and travelling expenses to be incurred by a party while attending the court on
his own behalf. The provisions of this sub-section are in terms similar to those of s 35 of the Code of Civil Procedure
except for the concluding portion of the sub-section which relates to the recovery of costs as arrears of land revenue. The
provisions analogous to those contained in sub-ss (2) and (3) of s 35 of the Code of Civil Procedure too do not find place in
s 11(7) of the Act. There is no power in the tribunal to direct payment of costs of a party in advance by another party,
irrespective of the final result of a proceeding, nor can the principles of natural justice be invoked in aid of an order which
penalises one party to a dispute by making it pay for the costs of the other party in advance, irrespective of the result of the
proceeding. In the words of SK Das J, such an order is neither natural nor has any element of justice in it.52Tribunals have
been vested with the discretion to award costs. However, this discretion is subject to any rules made under the Act. The
discretion again is to be exercised according to rules of reason and justice, not according to private opinion; according to
law and not humour; it to be not arbitrary, vague, and fanciful, but legal and regular.53 Orders for costs can only be made
by tribunals on well-recognised principles and not on any abstract ideas as to what, irrespective of such principles, should
be considered desirable in a particular case.54 A tribunal has no power to pass orders which are not consistent with the
recognised principles governing such matters, under s 11 (7) of the Act, which specifically deals with the subject.55

On the same principle, the tribunal would have no power under s 11 (7) to direct an employer to treat workmen as on duty
when they come to attend a hearing before it, which tantamounts to, in effect, directing the management to pay in advance
the costs of a proceeding.56 In Bank of India, the facts were in an application by the union of employees, the tribunal
passed an order directing the management to treat the appearance of office-bearers of the union and the workmen
concerned in pending reference as on ‘duty leave’. A single judge of the Bombay High Court quashed the order of the
tribunal, and held that there was no law to support such an order and that even otherwise, granting such an application
could have very serious consequences, firstly, because such an order would be without any legal authority and, secondly,
because it could give rise to indiscipline and financial implications on the employer.57 Ordinarily, in industrial
adjudication, costs do not follow the event. It is unwise to give costs in labour disputes, unless the conduct of either party
has called for it. But where the conduct of party is reprehensible, such as harassing the opposite party or keeping the
opposite party out of their legitimate rights, tribunals would be justified in awarding costs.58 The provisions of s 11(7) are
so worded that the authority concerned shall have the power to determine by whom and to what extent and subject to what
conditions, if any, the costs awarded shall be payable. The power of awarding costs is not limited to parties to the disputes,
like s 35A of the Code of Civil Procedure. Though discretion is conferred on the tribunal to make even a stranger to a
proceeding to pay costs, in appropriate cases, such discretion has to be exercised in accordance with well-recognised

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principles by a court in making an order for costs against or in favour of a person not a party to a proceeding before it. An
order of a tribunal in disregard of such well-recognised principles in awarding costs against or in favour of a person not a
party to a proceeding before it, shall be wrong exercise of its discretion and as such would be quashable.59

SUB-SECTION (8): ADJUDICATORS - CIVIL COURTS FOR CERTAIN PURPOSES

By virtue of this sub-section, the authorities enumerated therein shall be deemed to be a civil court for the purpose of s s
345, 346 and 348 of the Code of Criminal Procedure 1973.

* Chapter IV is continued in Volume II of this book, which begins with Section 11A.
1 Subs by Act 36 of 1956, s 9, for sub-s (1) (wef 10-3-1957).
2 Subs by Act 36 of 1956, s 9, for “Court or Tribunal” (wef 10-3-1957).
3 Subs by Act 36 of 1956, s 9, for “and Tribunal” (wef 10-3-1957).
4 Subs by Act 36 of 1956, s 9, for “or Tribunal” (wef 10-3-1957).
5 Subs by Act 46 of 1982, s 9, for “may call for” (wef 21-8-1984).
6 Ins by Act 36 of 1956, s 9 (wef 10-3-1957).
7 Subs by Act 46 of 1982, s 9, for “in respect of compelling the production of documents” (wef 21-8-1984).
8 Subs by Act 36 of 1956, s 9, for sub-ss (5), (6) and (7) (wef 10-3-1957).
9 Ins by Act 48 of 1950, s 34 and Sch.
10 Subs by Act 36 of 1956, s 9, for “Tribunal” (wef 10-3-1957).
11 Subs by Act 46 of 1982, s 9, for “ Sections 480, 482 and 484 of the CrPC, 1898 (5 of 1898)” (wef 21-8-1984).
12 Ins by Act 24 of 2010, s 7 (wef 15-9-2010 vide S.O. 2278 (E), dated 15-9-2010).
13 Grindlays Bank Ltd v CGIT (1978) 2 LLJ 371 (Cal), per Sabyasachi Mukharji J.
14 Shambu Nath & Sons Ltd v Addl IT (1957) 2 LLJ 287 (Punj), per Bishan Narayan J.
15 Mgmt of Dhenkanal Municipality v IT (1974) 1 LLJ 44, 49 (Ori) (DB), per Misra CJ.
16 Metal Fabricators (India) v BD Gupta 1975 Lab IC 1707, 1710 (Del) (DB), per Deshpande J.
17 ITC Ltd v PO, LC 1985 Lab IC 637, 646 (Kant), per Rama Jois J.
18 Metal Fabricators (India) v BD Gupta 1975 Lab IC 1707, 1710 (Del) (DB), per Deshpande J.
19 Harchura Tea Estate v Labour Appellate Tribunal (1961) 1 LLJ 174, 177 (Cal), per Mukharji J.
20 Bharat Bank Ltd v Employees of Bharat Bank Ltd (1950) 1 LLJ 921 [LNIND 1950 SC 4], 930 (SC), per Mahajan J.
21 Cooper v Wilson [1937] 2 KB 309, per Grear LJ, cited with approval in ibid, p 930, per Mahajan J.
22 Dalmia Dadri Cement Ltd v Workmen 1970 Lab IC 350 [LNIND 1960 SC 82] (P&H), per Narula J.
23 Tin Printers Pvt Ltd v IT (1967) 2 LLJ 677 [LNIND 1966 PNH 89], 680-81 (P&H), per SK Kapur J.
24 Shankar Chakravarti v Britannia Biscuit Co Ltd (1979) 2 LLJ 194 [LNIND 1979 SC 276], 206-08 (SC), per Desai J.
25 GSeshagiri Rao v PO, LC 1979 Lab IC 485, 486 (AP) (DB), per Chowdary J.
26 Rameshwar Prasad v State of Bihar (1973) 2 LLJ 15 (Pat) (DB), per Untwalia J.
27 Bharat Bank Ltd v Employees (1950) 1 LLJ 921 [LNIND 1950 SC 4] (SC), per Mukherjea J.
28 Bengal Box Mfg Co v Second IT (1963) 2 LLJ 475 (Cal), per BN Banerjee J.
29 JK Iron & Steel Co Ltd v I&S Mazdoor Union (1956) 1 LLJ 227 [LNIND 1955 SC 119], 231 (SC) : AIR 1956 SC 231 [LNIND
1955 SC 119]: [1955] 2 SCR 1315 [LNIND 1955 SC 119], per Bose J.
30 Hindustan Development Corpn Ltd v LC (1993) 2 LLJ 356 [LNIND 1992 CAL 324]-57 (Cal), per PK Mukherjee J.
31 Mgmt of Pheros & Co Pvt Ltd v LC 1971 Lab IC 600, 603 (Assam & Nagaland) (DB), per Goswami CJ.

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32 Engineering Mazdoor Sabha v DM Anry (1969) 2 LLJ 296, 299 (Bom) (DB), per Madon J.
33 Hochtief Gammon v IT (1964) 2 LLJ 460 [LNIND 1964 SC 118], 462-66 (SC), per Gajendragadkar CJI.
34 United Bank of India v PO, CGIT-cum-LC 1988 Lab IC 108 (Del), per Kirpal J.
35 Shankar Chakravorti v Britannia Biscuit Co Ltd 1979 Lab IC 1192 [LNIND 1979 SC 276], 1205 (SC), per Desai J.
36 Mgmt of Beverage & Food Products Pvt Ltd v PO, IT 1980 Lab IC 894, 895 (Gau), per Lahiri J.
37 Shankar Chakravorti v Britannia Biscuit Co Ltd 1979 Lab IC 1192 [LNIND 1979 SC 276], 1204-05 (SC), per Desai J.
38 Raymond Woollen Mills Ltd v CS Sonawane 1993 Lab IC 1494, 1496 (Bom), per Kantharia J.
39 Bombay Mothers and Children’s Society v General Labour Union 1991 Lab IC 1653, 1656 (Bom), per Daud J.
40 Tin Printers Pvt Ltd v IT (1967) 2 LLJ 677 [LNIND 1966 PNH 89], 680-81 (Punj), per Kapur J.
41 Shankar Chakravorti v Britannia Biscuit Co Ltd 1979 Lab IC 1192 [LNIND 1979 SC 276], 1205 (SC), per Desai J.
42 Lachman Das v Indian Express Newspapers (B) Pvt Ltd [1977] IC 823, 825 (Del) (DB), per Deshpande J.
43 RG Makwana v Gujarat SRTC (1987) 1 LLJ 172, 174 (Guj) (DB), per Gokulakrishnan CJ.
44 Jai Jai RM Lal v NBM Supply AIR 1969 (SC) 1267 [LNIND 1969 SC 129], 1269-70 : (1969) 1 SCC 869 [LNIND 1969 SC 129] :
[1970] 1 SCR 22 [LNIND 1969 SC 129], per Shah J.
45 Mgmt of Borpukhurie Tea Estate v IT (1978) 1 LLJ 558 [LNIND 1978 SC 85], 562 (SC), per Jaswant Singh J.
46 Patna Electric Supply Co Ltd v Bali Rai (1958) 1 LLJ 257 [LNIND 1957 SC 118], 259 (SC) : AIR 1958 SC 204 [LNIND 1957 SC
118]: [1958] 1 SCR 871 [LNIND 1957 SC 118], per Bhagwati J.
47 Royal Nepal Airlines CE Union v State of WB 1977 Lab IC (NOC) 83, (Cal), per DK Sen J.
48 Lipton India Ltd v IT (1992) 2 LLJ 427 [LNIND 1991 DEL 315]-28 (Del) (DB) : 45 (1991) DLT 452 : [1991 (63) FLR 347, per
Wad J.
49 Shankar Chakravarti v Britannia Biscuit Co (1979) 2 LLJ 194 [LNIND 1979 SC 276], 207 (SC) : AIR 1979 SC 1652 [LNIND
1979 SC 276]: (1979) 3 SCC 371 [LNIND 1979 SC 276], per Desai J.
50 Workmen of Straw Board Mfg Co Ltd v Mgmt (1974) 1 LLJ 499 [LNIND 1974 SC 114], 510 (SC), per Goswami J.
51 Workmen of Hindustan Lever Ltd v Mgmt 1984 Lab IC 276 [LNIND 1984 SC 6], 289 (SC), per Desai J.
52 Mgmt of Chopra Motors Pvt Ltd v PN Thukral 1973 Lab IC 1025 -28 (P&H), per Suri J.
53 Kaleswarar Mills Ltd v Sakthivelu 12 FJR 279 (Mad) (DB).
54 Dalmia Dadri Cement Ltd v Workmen [1970] IC 350 (P&H), per Narula J.
55 Cooper Engineering Ltd v PP Mundhe (1975) 2 LLJ 379 [LNIND 1975 SC 284], 385-86 (SC), per Goswami J.
56 T Chowdappa v PO, LC 1978 Lab IC 1452 (Kant), per Rama Jois J.
57 Prabhakar Shamrao Marathe v Maharashtra State Electricity Board 1975 Lab IC 697, 702 (Bom) (DB), per Desai J.
58 ‘Presumption and Burden’ [1945]; 1961 LQR 397.
59 Hill v Baxter [1958] 1 QB 277, 284, per Delvin J.
60 Cowen and Carter, Essays on the Law of Evidence, 1956, p 242.
61 Pick Up v Tames English Co, 3 QBD 594, 600.
62 Shankar Chakravarty v Brittania Biscuit Co Ltd (1979) 2 LLJ 194 [LNIND 1979 SC 276], 207 (SC), : AIR 1979 SC 1652 [LNIND
1979 SC 276]: (1979) 3 SCC 371 [LNIND 1979 SC 276], per Desai J.
63 British India Corpn Ltd v PO, IT 1989 Lab IC 716, 719 (All), per RR Misra J.
64 Damodar Valley Corpn v Workmen (1973) 2 LLJ 136 [LNIND 1973 SC 134] (SC) : AIR 1973 SC 2292 [LNIND 1973 SC 134]:
1973 Lab IC 1035 [LNIND 1973 SC 134], per Vaidialingam J.
65 Ramendra Narayan Deb v Eighth IT 1975 Lab IC 94, 98 (Cal) (DB), per SK Datta J.
66 ECP Rathinaswami Nadar v LC (1964) 2 LLJ 86 [LNIND 1963 MAD 280] (Mad), per Srinivasan J.
67 Kodaikanal Motor Union v A Nallathambi (1969) 2 LLJ 141 [LNIND 1968 MAD 125], 144 (Mad) : AIR 1969 Mad 374 [LNIND
1968 MAD 125]: 1969 (18) FLR 151, per Ramakrishnan J.
68 Dominent Off-set (P) Ltd v IT 1998 (1) LLN 659 (P&H), per Malte, J.
69 Delta Engineering Co (P) Ltd v IT 1998 (2) LLN 493 (All), per Jain J.

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70 Mackinnon Makenzie & Co Ltd v WN Pereira 1999 (3) LLN 521 (Bom), per Pandya J.
71 Mitra AB v PO, III IT [1999 II LLJ 1243(Cal)], per Samaresh Banerjee J.
72 Northcote Nursing Home (P) Ltd v (Dr) ZH Rahilla 2001 (3) LLN 550 (Bom), per Kochar J.
73 Gurbachan Singh v Jagyasu Re-Rolling Mills 2001 (4) LLN 1157 (P&H), per Sudhalkar J.
74 Range Forest Officer v ST Hadimani 2002 (2) LLN 391 (SC).
75 Mgmt of Hindustan Motors Ltd v Lakshmaiah 2002 (2) LLN 72 S (Mad) (DB), per Kalifulla J.
76 Essen Deinki v Rajiv Kumar 2002 (4) LLN 1176 (SC), per Banerjee J.
77 KV Kumaran v LC 1982 Lab IC 1241, 1243 (Ker), per Sukumaran J.
78 Har Prasad Engg Workshop v State of Uttar Pradesh (1964) 1 LLJ 607 (All), per GC Mathur J.
79 Dawood Khan v LC (1969) 2 LLJ 611 (AP), per Chinnappa Reddi J.
80 FACT Employees’ Assn, Cochin v FACT Ltd (1977) 1 LLJ 182 [LNIND 1996 MAD 736], 185 (Ker), per Thommen J.
81 Karnataka SRTC v S Veerabhadrappa 1988 Lab IC 896 -97 (Kant), per Chandrakantharaj Urs J.
82 Uttar Pradesh RTC v State of UP 1990 Lab IC 1444, 1446 (All), per RA Sharma J.
83 Jagran Prakashan Pvt Ltd, Kanpur v IT 1992 Lab IC 513, 516 (All), per Trivedi J.
84 FACT Employees’ Assn, Cochin v FACT Ltd (1977) 1 LLJ 182 [LNIND 1996 MAD 736], 185 (Ker), per Thommen J.
85 Tamil Nadu Housing Board v II Addl LC (1997) 1 LLJ 923 [LNIND 1996 MAD 736]-24 (Mad) (DB), per Swami J.
86 KV Kumaran v LC 1982 Lab IC 1241, 1243 (Ker), per Sukumaran J.
87 Sr Divl Mechanical Engineer, Northern Rly, v PO, CGLT 1992 Lab IC 1586, 1588 (All), per Sahay J.
88 Grindlays Bank Ltd v CGIT 1981 Lab IC 155 [LNIND 1980 SC 484], 158 (SC) per AP Sen J.
89 ND Patel & Co v MK Parmar 1984 Lab IC 1245 [LNIND 1983 GUJ 243] (Guj) (DB), per Ravani J.
90 Depot Mgr, APSRTC v Govt of AP (1991) 1 LLJ 235, 237 (AP) : 1990 (2) APLJ 360, per Radha Krishna Rao J.
91 Eagle Wood Agencies Pvt Ltd v State of WB (1991) 1 LLJ 85 (Cal) : 1990 (60) FLR 397, per Kalyanmoy Ganguli J.
92 Re Jitendra Nath Banerjee (1966) 1 LLJ 220, 223 (Cal), per Banerjee J.
93 Grindlays Bank Ltd v CGIT 1981 Lab IC 155 [LNIND 1980 SC 484], 157-58 (SC), per AP Sen J.
94 Satnam Verma v Union of India 1985 Lab IC 738, 740 (SC), per Desai J.
95 CJThomas v LC 1991 Lab IC 2481, 2485 (Ker), per KA Nayar J.
96 Nav Bharat & MPC Group of Newspapers v KS Shrivastava (1990) 1 LLJ 339, 398 (MP), per TN Singh J.
1 State of Rajasthan v Bhanwar Lal 1982 Lab IC 75, 78 (Raj), per Lodha J.
2 Maharashtra General Kamgar Union v Calico Chemicals 1983 Lab IC 1456, 1458 (Bom) per Dharmadhikari J.
3 Vivek Salvi v Second IT 1981 Lab IC (NOC) 176 (Cal), per GN Ray J.
4 Indian Metals & FAE Union v State of Orissa (1992) 1 LLJ 581 -82 (Ori) (DB).
5 CMD, Tamil Nadu Minerals Ltd v PO, LC 2000 (3) LLN 1025 (Mad), per Sathasivam J.
6 Virendra Bhandari v Rajasthan SRTC 2002 (3) LLN 758 (SC).
7 R Sarojini v B Laxmana Rao (1969) 1 LLJ 9 (AP), per Obul Reddi J.
8 SK Burman (Dr) Dabur Pvt Ltd v Workmen (1967) 2 LLJ 836 [LNIND 1967 MAD 199] (SC), per Ghargava J.
9 Pradip Lamp Works v Pradip Lamp Workers Karamchari Sangh (1971) 1 LLJ 538, per Dim J.
10 Re Enoch and Zaretz Ky Book & Co [1910] 1 KB 327.
11 GC Bezbarua v State of Assam AIR 1954 Ass 161 (DB), per Sarjoo Prasad CJ.
12 Bordubi Tea Estate v Workmen (1954) 2 LLJ 46 (LAT).
13 Pradip Lamp Works v Prdip Lamp Workers, Karmachari Sangh CA No 482 of 1967, (SC), per Dua J.
14 Elite Engineering and General Works v LC 1969 Lab IC 58, 60-61 (P&H)), per Pandit J.
15 Technological Institute of Textiles v Workmen (1972) 1 LLJ 654 [LNIND 1972 SC 141] (SC) : AIR 1972 SC 1933 [LNIND 1972
SC 141]: (1972) 4 SCC 26 [LNIND 1972 SC 141], per Vaidialingam J.

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16 Hindustan Aluminium Corpn Ltd v Murari Singh 1978 Lab IC (NOC) 96 (All) (DB).
17 Rallis India Ltd v State of West Bengal (1983) 2 LLJ 293, 297 (Cal) (DB), per Amitabha Dutta J.
18 SRamaiah Mudaliar Bros v PO, IT (1992) 1 LLJ 9, 13 (Mad) (DB), per Srinivasan J.
19 Electro-Mechanical Industries Ltd v IT (1950) 1 LLJ 1133 (Mad) (DB), per Rajarnannar CJ.
20 Raghu Singh v Burrakur Coal Co Ltd (1967) 1 LLJ 483; 489 (Cal) (DB), per Bose CJ.
21 Mgmt of WIMCO Ltd v IT (1958) 2 LLJ 315 [LNIND 1958 MAD 23], 320 (Mad) (DB) : AIR 1958 Mad 398 [LNIND 1958 MAD
23]: (1958) ILR Mad 672, per Rajagopalan J.
22 Samnuggur Jute Factory Co Ltd v Workmen 1982 Lab IC 1354 -55 (Cal) (DB), per Banerjee J.
23 Guest, Keen, Williams Pvt Ltd v PJ Sterling (1959) 2 LLJ 405 [LNIND 1959 SC 127] (SC) : AIR 1959 SC 1279 [LNIND 1959 SC
127]: [1960] 1 SCR 348 [LNIND 1959 SC 127], per Gajendragadkar J.
24 Heavy Engineering Corpn Ltd v LC 1990 Lab IC 1057, 1061 (Pat) per SB Sinha J. .
25 (1891) ILR 19 IA 203.
26 Bennett Coleman & Co Pvt Ltd v PP Das Gupta (1969) 2 LLJ 554 [LNIND 1969 SC 150], 562-63 (SC) : AIR 1970 SC 426
[LNIND 1969 SC 150]: (1969) 2 SCC 1 [LNIND 1969 SC 150] : 1970 Lab IC 512 [LNIND 1969 SC 150], per Shelat J.
27 Namburnadi Tea Co Ltd v Workmen 1968 Lab IC 1386 (A&N) (DB), per Goswami J.
28 Mgmt of Natarajan Engg Works v GS Naicker 1970 Lab IC 334 (Mad) (DB), per Anantanarayanan CJ.
29 Cf, Union of India v TR Varma (1958) 2 LLJ 259 [LNIND 1957 SC 91], 264 (SC) : AIR 1957 SC 882 [LNIND 1957 SC 91]:
(1958) I MLJ 67(SC) : [1958] 1 SCR 499, per Venkatarama Ayyar J.
30 Karnataka State Road Transport Corpn v N Nagendrappa (1992) 2 LLJ 168, 172 (Kant), per Shyamsundar J.
31 Raghu Singh v Burrakur Coal Co Ltd (1967) 1 LLJ 483, 490 (Cal) (DB), per Bose CJ.
32 Bareilly Electricity Supply Co Ltd v Workmen (1971) 2 LLJ 407 [LNIND 1971 SC 383], 417 (SC), per Jaganmohan Reddy J.
33 Metro Goldwyn Mayeor (India) Ltd v Workmen (1964) 2 LLJ 287, 294 (Mad), per Srinivasan J.
34 Mahaboob Shahi Kulbarga Mills Co Ltd v K Vittal Kamath (1959) 2 LLJ 196 (Mys) (DB) : AIR 1959 Kant 180 [LNIND 1958
KANT 94]: ILR 1958 Kar 914.
35 John Lee v Chief Commr, Delhi (1967) 2 LLJ 673 (Punj), per Kapur J.
36 Ramakant Rajmangal Yadav v Ramnilan Vijay 1988 Lab IC 296 (Bom), per Kantharia J.
37 Bhagwan Das Chopra v United Bank of India 1988 Lab IC 366 [LNIND 1987 SC 771], 370 (SC), per Venkataramiah J.
38 Nalgonda Coop Mktg Society Ltd v LC, (1994) 2 LLJ 716, 728 (AP) (VB) : 1993 (2) ALT 661 : 1993 (2) An WR 214 [LNIND
1993 AP 130] : 1993 (2) APLJ 336, per A Lakshmana Rao J.
39 Food Corpn of India Workers Union v FCI 1996 Lab IC 2047, 2052-53 (SC), per Paripoornan J.
40 Shankar Chakravarti v Britannia Biscuit Co Ltd 1979 Lab IC 1192 [LNIND 1979 SC 276], 1205 (SC), per Desai J.
41 National Insurance Co Ltd v Workmen CA 693 and 841 of 1966 (SC), per Shelat J.
42 Khardah & Co Ltd v Workmen (1963) 2 LLJ 452 [LNIND 1963 SC 138], 458 (SC) : AIR 1964 SC 719 [LNIND 1963 SC 138]:
[1964] 3 SCR 506 [LNIND 1963 SC 138], per Gajendragadkar J.
43 Santak Singh v Ninth IT 1984 Lab IC 817, 821 (Cal), per Amitabha Dutta J.
44 MJ Mudaliar Bus Service v LC (1960) 1 LIJ 761(AP), per Seshachalapathi J.
45 Sheo Sampat Lal v State of UP 1983 Lab IC 324, 328 (All), per TS Misra J.
46 Shankar Chakravarti v Britiannia Biscuit Co Ltd 1979 Lab IC 1192 [LNIND 1979 SC 276], 1205 (SC), per Desai J.
47 Rohtas Industries Ltd v Workmen 1977 Lab IC 1190, 1190 (SC), per Goswami J.
48 National Buildings Construction Corpn Ltd v MK Jain 1981 Lab IC 62, 68 (Del), per Anand J.
49 Oriental Containers Ltd v Engg Workers Assn (1996) 2 LLJ 454, 472 (Bom) (DB) : 1996 (3) Bom CR 488 [LNIND 1996 BOM
158], per Majithia J.
50 Chennai ACW Union v PO, CGIT 2002 (1) LLN 353 (Mad), per Kalifulla J.
51 Bharat Bank Ltd v Employees of Bharat Bank (1950) 1 LLJ 921 [LNIND 1950 SC 4] (SC), per Mukherjea J.
52 Western India Match Co Ltd v IT (1962) 1 LLJ 629 (SC), per Gajendragadkar J.

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53 Nellikkai Estate v Workmen (1959) 2 LLJ 751, 757 (Ker), per Vaidialingam J.
54 Khardah & Co Ltd v Workmen (1963) 2 LLJ 452 [LNIND 1963 SC 138], 458 (SC), per Gajendragadkar J.
55 India Gen Navigation & Rly Co Ltd v B Chakraborty (1959) 2 LLJ 242 [LNIND 1959 SC 68] (SC), per Gajendragadkar J.
56 Khardah & Co Ltd v Workmen (1963) 2 LLJ 452 [LNIND 1963 SC 138], 458 (SC), per Gajendragadkar J.
57 Nellikkai Estate v Workmen (1959) 2 LLJ 751, 757 (Ker), per CA Vaidialingam J.
58 Mgmt of Singareni Collieries Ltd v Workmen 2002 (1) LLN 653 (SC).
59 Tata Iron and Steel Company Ltd v DR Singh (1965) II LLJ 122(SC), : [1995 (70) FLR 184 ] per Gajendragadkar CJI.
60 Workmen of Strawboard Mfg Co Ltd v Mgmt (1974) I LLJ 499 (510) (SC) : AIR 1974 SC 1132 [LNIND 1974 SC 114]: [1974]
(28) FLR 357 : 1974 Lab IC 730 [LNIND 1974 SC 114] : (1974) 4 SCC 681 [LNIND 1974 SC 114], per Goswami J.
61 Workmen v Mgmt of Hindustan Lever Ltd (1984) Lab IC 276 [LNIND 1984 SC 6] (289) (SC), per Desai J.
62 Mgmt of Chopra Motors (Pvt) Ltd v PN Thukral (1973) Lab IC 1025 (P&H), per Suri J.
63 Cooper Engineering Limited v PP Mundhe (1975) II LLJ 379 (385) (SC) : AIR 1975 SC 1900 [LNIND 1975 SC 284]: [1975] (31)
FLR 188 : 1975 Lab IC 1441 [LNIND 1975 SC 284] : (1975) 2 SCC 661 [LNIND 1975 SC 284], per Goswami J.
64 Shankar Chakravarty v Britannia Biscuit Co Ltd AIR 1979 SC 1652 [LNIND 1979 SC 276]: 1979 Lab IC 1192 [LNIND 1979 SC
276] : (1979) 2 LLJ 194 [LNIND 1979 SC 276] : (1980) 2 LLJ 78 [LNIND 1979 SC 276] : (1979) 3 SCC 371 [LNIND 1979 SC
276], per Desai J.
65 Shambhu Nath Goyal v Bank of Baroda (1983) II LLJ 415 (422-3) (SC) : AIR 1984 SC 289 [LNIND 1983 SC 267]: 1983 (2)
SCALE 931 [LNIND 1983 SC 267] : (1983) 4 SCC 491 [LNIND 1983 SC 267]per Varadarajan J.
66 KSRTC v Lakshmidevamma (2001) II LLJ 199 (203-4) (SC) : AIR 2001 SC 2090 [LNIND 2001 SC 1128]: (2001) 5 SCC 433, per
Santosh Hegde J.
67 Divyash Pandit v Mgmt, NCCBM AIR 2006 SC 92 [LNIND 2005 MP 578]: (2005) 2 SCC 684 [LNIND 2005 SC 45] : 2005 (3)
SLT 293 : (2005) 2 LLJ 151 [LNIND 2005 SC 45].
68 DP Maheshwari v Delhi Administration (1983) Lab IC 1629 (SC), per Chinnappa Reddy J.
69 Senapathy Whitelay Ltd v Puttaswamy (2001) 1 LLN 268 (270) (Kant) (DB), per Sethi CJ.
70 EM Rao, Industrial Jurisprudence: A Critical Commentary, 2015, 2nd ed, pp 426-7.
71 Hussan M Mhasvadkar v BISLB, (2001) 4 LLN 766 (SC), per Doraiswamy Raju J.
72 EM Rao, Industrial Jurisprudence: A Critical Commentary, 2015, 2nd ed, pp 420-8.
73 Satyadev Chemicals (P) Ltd v DGGL Association CA No 1572 of 1999 (Guj) (DB).
74 Gujarat Kamdar Panchayat v Maize Products 2002 (4) LLN 985 (1007) (Guj), per Tripathi J.
75 Mgmt of Express Newspapers (P) Ltd v Workmen AIR 1963 SC 569 [LNIND 1962 SC 253].
76 Grindlays Bank Ltd v CGIT 1981 Lab IC 155 [LNIND 1980 SC 484], 158 (SC), per AP Sen J.
77 Silk Cloth Producers’ Assn v State of Madras (1954) 2 LLJ 410 (Mad) per Rajagopala Ayyangar J.
78 Kammavar Achukudam Ltd v IT (1959) 1 LLJ 395 [LNIND 1958 MAD 140] (Mad), per Balakrishna Iyer J.
79 Tata Consulting Engineers v Workmen 1981 Lab IC 594 [LNIND 1980 SC 453] (SC) : AIR 1981 SC 1088 [LNIND 1980 SC 453]:
[1981] (42) FLR 1 : (1981) 2 LLJ 147 [LNIND 1980 SC 453] SC : (1981) 1 LLJ 332 [LNIND 1980 SC 453] SC : [1981] 2 SCR
166 [LNIND 1980 SC 453], per O Chinnappa Reddy J.
80 Grindlays Bank Ltd v Central Government Industrial Tribunal 1981 Lab IC 155 [LNIND 1980 SC 484] (SC) : AIR 1981 SC 606
[LNIND 1980 SC 484]: 1981 (29) BLJR 104 : (1981) 1 LLJ 327 [LNIND 1980 SC 484] SC : [1981] 2 SCR 341 [LNIND 1980 SC
484], per AP Sen J.
81 Lipton Ltd v Employees (1959) 1 LLJ 431 [LNIND 1959 SC 14] (SC), per SK Das J.
82 Tulsipur Sugar Co Ltd v State of Uttar Pradesh (1969) 2 LLJ 662 [LNIND 1969 SC 132], 669 (SC), per Shelat J.
83 Chanchal Singh v Labour Court 1983 Lab IC 823 (Del) (DB), per Dalip Kapur J.
84 Subrata Guha Sarkar v Second LC (1996) 2 LLJ 116 [LNIND 1995 CAL 303], 120 (Cal) : 100 CWN 182, per Bhattacharjee J.
85 Warring Co-op Agriculture Services Society Ltd v State of Punjab 1987 Lab IC 359, 363-64 (P&H) (DB), per SS Kang J.
86 Mgmt of Birla CSW Mills Ltd v KME Union 2002 (1) LLN 506 (Del) (DB), per Jain J.
87 Rule 23 of the Industrial Disputes (Central) Rules 1957.

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88 State of Bihar v Kripa Shankar Jaiswal (1961) 1 LLJ 334 [LNIND 1960 SC 233] (SC), per Kapur J.
89 Paritosh Kumar Pal v State of Bihar 1984 Lab IC 1254, 1257 (Pat) (FB), per Sandhawalia CJ.
90 Karam Chand Thapar & Bros Pvt Ltd v Workmen of North Chirimiri Colliery (1968) 2 LLJ 261 (MP), per Bhave J.
91 EIP Works Ltd v Addl IT-cum, Addl LC 2001 (3) LLN 151 (AP), per VVS Rao J.
92 Ganesh Rajan Servai v Bennett Coleman & Co Ltd 1989 Lab IC 534, 546 (Bom), per Kantharia J.
93 With respect to hearsay evidence, s 60 of the Indian Evidence Act 1872.
94 Employees of Hindustan Steel Ltd v Hindustan Steel Ltd 1978 Lab IC 799, 801 (Cal) (DB), per MM Dutt J.
95 V Veeraraghavan v Labour Court (1992) 2 LLJ 137, 139 (Mad), per KM Natarajan J.
1 Workmen of Otis Elevator (I) Ltd v Fourth Industrial Tribunal (1963) 2 LLJ 147 (Cal), per BN Banerjee J.
2 Workmen of JS Companies v Joint Steamer Companies (1963) 2 LLJ 349 [LNIND 1963 SC 135], 354 (SC), per Das Gupta J.
3 Garment Cleaning Works v Workmen (1961) 1 LLJ 513 [LNIND 1961 SC 147] (SC), per Gajendragadkar J.
4 Shama Magazine v State of Delhi (1958) 2 LLJ 241 (Punj), per Falshaw J.
5 Reserve Bank of India v CGIT (1959) 1 LLJ 539 (Punj) (DB).
6 Punjab Co-operative Bank Ltd v Workmen 1968 Lab IC 1437 (P&H), per Sharma J.
7 Reserve Bank of India v CGIT (1959) 1 LLJ 539 (Punj) (DB).
8 Mettur Chem & Indl Corpn Ltd v Workers (1955) 1 LLJ 27, 30 (Mad), per Rajagopalan J.
9 Kannan Devon Hills Produce Co Ltd v Staff (1959) 1 LLJ 608 (Ker), per TK Joseph J.
10 Mettur Chem & Indl Corpn Ltd v Workmen (1955) 1 LLJ 27 (Mad), per Rajagopalan J.
11 Burn & Co Ltd v Jitendra Nath Maitra AIR 1956 Cal 592 [LNIND 1956 CAL 107]-93, per Sinha J.
12 BN Elias & Co Pvt Ltd v Fifth IT, West Bengal (1961) 2 LLJ 14 [LNIND 1960 CAL 136] (Cal), per DN Sinha J.
13 Twentieth Century Fox Corpn (India) Pvt Ltd v FH Lala (1974) 2 LLJ 156, 160-61 (Bom), per Mukhi J.
14 All India Bank Employees’ Assn v NIT (1961) 2 LLJ 85 (SC), per Rajagopala Ayyangar J.
15 Associated Cement Co Ltd, Porbandar v NL Vyas (1955) 2 LLJ 525 (Sau), per SJ Chhatpar J.
16 Dalmia Dadri Cement Ltd v Workmen 1970 Lab IC 350 [LNIND 1960 SC 82] (P&H), per Narula J.
17 Bharat Bank Ltd v Employees of Bharat Bank Ltd (1950) 1 LLJ 921 [LNIND 1950 SC 4] (SC), per Mahajan J.
18 Burrakur Coal Co Ltd v LAT (1958) 2 LLJ 580 [LNIND 1957 CAL 156] (Cal), per Sinha J.
19 Trichonopaly Mills v National Cotton Textile Mills Union (1960) 2 LLJ 46, 47 (SC), per Gajendragadkar J.
20 Sindhu Resettlement Corpn Ltd v Industrial Tribunal of Gujarat (1968) 1 LLJ 834 [LNIND 1967 SC 268] (SC) : AIR 1968 SC 529
[LNIND 1967 SC 267], per Bhargava J.
21 Bareilly Electricity Supply Co Ltd v Workmen (1971) 2 LLJ 407 [LNIND 1971 SC 383] (SC) : AIR 1972 SC 330 [LNIND 1971
SC 383]: 1972 Lab IC 188 : (1971) 2 SCC 617 [LNIND 1971 SC 383], per Jaganmohan Reddy J.
22 Petlad Turkey Red Dye Works Co Ltd v D& C Workers Union (1960) 1 LLJ 548 [LNIND 1960 SC 22] (SC), per Das Gupta J.
23 Leonard Biermam Workers’ Union v Second IT (1962) 1 LLJ 68 [LNIND 1961 CAL 115] (Cal), per Banerjee J.
24 Metro Goldwyn Mayer (India) Ltd v Workmen (1964) 2 LLJ 287 (Mad), per Srinivasan J.
25 North Bihar Sugar Mills Ltd v State of Bihar 1980 Lab IC 669, 673 (Pat) (DB), per Jha J.
26 State of Bihar v PO, IT 1977 Lab IC 803, 809 (Pat) (DB)
27 Associated Cement Companies Ltd v Workmen (1959) 1 LLJ 644 [LNIND 1959 SC 94], 663 (SC) : AIR 1959 SC 967 [LNIND
1959 SC 94]: [1959] 1 SCR 925 [LNIND 1959 SC 94], per Gajendragadkar J.
28 Indian Hume Pipe Co Ltd v Workmen (1959) 2 LLJ 357 [LNIND 1959 SC 89], 362 (SC) : AIR 1959 SC 1081 [LNIND 1959 SC
89]: [1959] Supp (2) SCR 948, per Bhagwati J.
29 Khandesh Spg & Wvg Mills Co Ltd v RG Kamgar Sangh (1960) 1 LLJ 541 [LNIND 1960 SC 1] (SC) : AIR 1960 SC 571 [LNIND
1960 SC 1]: SC, [1960] 2 SCR 841 [LNIND 1960 SC 1], per Subba Rao J.
30 Mgmt of Trichinopoly Mills Ltd v NCTM Workers’ Union AIR 1960 SC 1003 [LNIND 1960 SC 6], per Gajendragadkar J.
31 Petlad TRDW Co Ltd v Dyes & Chemical Workers’ Union (1960) 1 LLJ 548 [LNIND 1960 SC 22], 550 (SC) : AIR 1960 SC 1006
[LNIND 1960 SC 22]: [1960] 2 SCR 906 [LNIND 1960 SC 22], per Das Gupta J.

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32 Metal Box Co of India Ltd v Workmen (1969) 1 LLJ 785 [LNIND 1968 SC 223] (SC) : AIR 1969 SC 612 [LNIND 1968 SC 223]:
[1969] 39 Comp Cas 410 (SC) : [1969 (18) FLR 336 ] : [1969] 73 ITR 53 [LNIND 1968 SC 223] (SC), per Shelat J.
33 Peirce Leslie & Co Ltd v Workmen (1960) 1 LLJ 809 [LNIND 1960 SC 71], 815-16 (SC) : AIR 1960 SC 826 [LNIND 1960 SC
71]: [1960] 3 SCR 194 [LNIND 1960 SC 71], per Das Gupta J.
34 Cannanore Spg and Wvg Mills Ltd v Workers Union (1960) 2 LLJ 43 [LNIND 1960 SC 27], 44 (SC), per Das Gupta J.
35 Anil Starch Products Ltd v Ahmedabad Chemical Workers Union (1960) 2 LLJ 88 [LNIND 1959 SC 97], 94 (SC) : AIR 1960 SC
1346 [LNIND 1959 SC 97], per Wanchoo J.
36 Bengal KM Union v Titagarh Paper Mills Co Ltd (1963) 2 LLJ 358 [LNIND 1963 SC 109], 361 (SC) : [1963 (7) FLR 202 ] :
[1964] 3 SCR 38, per Wanchoo J.
37 Uttar Pradesh Electric Supply Co Ltd v Workmen 1971 Lab IC 1495, 1503 (SC), per Mitter J.
38 Bareilly Electricity Supply Co Ltd v Workmen (1971) 2 LLJ 407 [LNIND 1971 SC 383], 416-17 (SC) : AIR 1972 SC 330 [LNIND
1971 SC 383]: 1972 Lab IC 188 : (1971) 2 SCC 617 [LNIND 1971 SC 383], per Jaganmohan Reddy J.
39 Section 23 of the Payment of Bonus Act 1965.
40 Metal Box Co of India Ltd v Workmen (1969) 1 LLJ 785 [LNIND 1968 SC 223], 792 (SC) : AIR 1969 SC 612 [LNIND 1968 SC
223]: [1969] 39 Comp Cas 410 (SC) : [1969 (18) FLR 336 ] : [1969] 73 ITR 53 [LNIND 1968 SC 223] (SC), per Shelat J.
41 Krishna Mahadev v FH Lala (1970) 1 LLJ 68 (Bom) (DB), per Madan J.
42 Malayalam Plantations Ltd v Ponnuswami (1956) 1 LLJ 69 (LAT).
43 See, notes and comments under s 11(1).
44 Order 19, Code of Civil Procedure 1908.
45 Punjab National Bank Ltd v IT (1957) 1 LLJ 455 [LNIND 1956 SC 113] (SC), per SK Das J.
46 V Veeramani v Mgmt of Madurai DCSM Society Ltd 1983 Lab IC 687, 690 (Mad), per Ratnam J.
47 Sudhindra Kumar Deb v Gopika Rajan Datta AIR 1960 Assam 55 -57 (DB), per Mehrotra J.
48 Brought into force wef 21 August 1984.
49 G Ganesan v PO, LC 2001 (3) LLN 631 (Mad), per Murugesan J.
50 Bombay Port & Dock Employees’ Union v MR Meher (1965) 2 LLJ 687, 689 (Bom), per Patel J.
51 Provincial Transport Services v State IC (1958) 1 LLJ 755 (Bom), per Mudholkar J.
52 Punjab National Bank Ltd v Sri Ram Kanwar, Industrial Tribuna (1957) 1 LLJ 455 [LNIND 1956 SC 113], 459 (SC) : 1957 (1) An
WR 53 : [1957] 1 SCR 220 [LNIND 1956 SC 113], per SK Das J.
53 Susannah Sharp v Wakefield [1891] AC 173, 179.
54 United Commercial Bank Ltd v Kartar Singh Campbell-Puri (1952) 2 LLJ 1 (Cal), per HK Bose J.
55 Jeevan Textile Mills v Workmen (1956) 1 LLJ 423 (LAT).
56 Delhi Cloth Mill Chemical Works v Workmen (1960) 2 LLJ 449 (Punj), per Bishan Narain J.
57 Bank of India v BOI Workers’ Organisation 2002 (3) LLN 716 (Bom), per Deshpande J.
58 Aryan Cinema, Poona v Workmen (1953) LAC 403(LAT).
59 United Commercial Bank Ltd v Kartar Singh Campbell-Puri (1952) 2 LLJ 1 (Cal), per HK Bose J.

End of Document

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER IV Procedure, Powers and Duties of Authorities

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER IV Procedure, Powers and Duties of Authorities

1[S.
11A. Power of Labour Courts, Tribunals and National Tribunals to give
Appropriate Relief in case of Discharge or Dismissal of Workmen.(
Where an industrial dispute relating to the discharge or dismissal of a workman has been referred to a Labour Court,
Tribunal or National Tribunal for adjudication and, in the course of the adjudication proceedings, the Labour Court,
Tribunal or National Tribunal, as the case may be, is satisfied that the order of discharge or dismissal was not justified, it
may, by its award, set aside the order of discharge or dismissal and direct re-instatement of the workman on such terms and
conditions, if any, as it thinks fit, or give such other relief to the workman including the award of any lesser punishment in
lieu of discharge or dismissal as the circumstances of the case may require:

Provided that in any proceeding under this section the Labour Court, Tribunal or National Tribunal, as the case may be,
shall rely only on the materials on record and shall not take any fresh evidence in relation to the matter.]

STATEMENT OF OBJECTS AND REASONS2

In Indian Iron and Steel Co, the Supreme Court, while considering the tribunal’s power to interfere with the management’s
decision to dismiss, discharge or terminate the services of a workman, has observed that in cases of dismissal for
misconduct, the tribunal does not act as a court of appeal and substitute its own judgment for that of the management and
that the tribunal will interfere only when there is want of good faith, victimisation, unfair labour practice, etc, on the part of
the management.3 The International Labour Organisation, in its recommendation (No 119) concerning ‘termination of
employment at the initiative of the employer’ adopted in June, 1963, has recommended that a worker aggrieved by the
termination of his employment should be entitled to appeal against the termination, among others, to a neutral body such as
an arbitrator, a court, an arbitration committee or a similar body and that the neutral body concerned should be empowered
to examine the reasons given in the termination of employment and the other circumstances relating to the case and to
render a decision on the justification of the termination. The International Labour Organisation has further recommended
that the neutral body should be empowered (if it finds that the termination of employment was unjustified) to order that the
worker concerned, unless reinstated with unpaid wages should be paid adequate compensation or afforded some other
relief. In accordance with these recommendations, it is considered that the tribunal’s power in an adjudication proceedings
relating to discharge or dismissal of a workmen should not be limited and that the tribunal should have the power, in cases
wherever necessary to set aside the order of discharge or dismissal and direct reinstatement of the workmen on such terms
and conditions, if any as it thinks fit or give such other relief to the workman including the award of any lesser punishment
in lieu of discharge or dismissal as the circumstances of the case may require. For this purpose, a new s 11A has
beeninserted in the Industrial Disputes Act 1947 —‘ID Act’ in short). From this Statement of Objects and reasons, it is
dear that this provision was inserted in the Act, not to limit the jurisdiction of the tribunal as evolved by the dicta of the
Supreme Court, but it was inserted to confer power on the adjudicators to ‘reappraise the evidence adduced in the domestic
inquiry and to grant proper relief to workmen, powers which the tribunal did not possess earlier’.4 The NCL-II observed:

The appropriate Government may also approach the Labour Relations Commission on any individual or collective dispute in any
establishment. All disputes, claims or complaints under the law on labour relations should be raised within one year of the
occurrence of the cause of action. Section 11A of the Industrial Disputes Act 1947 may be retained. However, the law may be
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

amended to the effect that where a worker has been dismissed or removed from service after a proper and fair enquiry on charges
of violence, sabotage, theft and/or assault, and if the labour court comes to the conclusion that the grave charges have been proved,
then the court will not have the power to order reinstatement of the delinquent worker.5

Constitutional Validity of Section 11A

In Delhi Cloth Mills, the Rajasthan High Court has upheld the validity of s 11A. Speaking for the court, Verma CJ, held
that for the purpose of granting relief under this section, there is a clear indication that relief which is considered fit in the
circumstances of the case is to be given after a conclusion is reached that the discharge or dismissal was not justified.
Therefore, there are sufficient guidelines for any authority discharging such functions and whenever a challenge is made to
the decision of the industrial adjudicator, correctness of the decision can be decided on the touchstone of these guidelines
and in case of contravention of such guidelines, the remedies by way of writ petition under Art 226, by way of appeal by
special leave under Art 136 to the Supreme Court are available. Hence, it cannot be said that wide powers conferred on the
industrial adjudicators by s 11A are arbitrary or violative of Art 14 of the Constitution.6

APPLICATION OF THE SECTION

To Pending Reference Cases

In Firestone, the Supreme Court held that s 11A applies only to disputes which are referred for adjudication, after this
section came into force. The prior disputes are, therefore, to be dealt with in accordance with the law laid down in the
earlier decisions of the Supreme Court on this subject.7 But in cases of the disputes referred to adjudication after the
section has come into force, an adjudicator is bound to apply the provisions of this section irrespective of the fact whether
the workman has mentioned it in his pleadings and claimed relief thereunder or not.8Section 11A of the ID Act was held to
be applicable to a proceeding under the UP Industrial Disputes Act 1947, even before the incorporation of s 6(2A) in 1978
therein by the state legislature.9

To Punishment of Discharge or Dismissal

The expressions ‘discharge’ and ‘dismissal’ have acquired definite connotations in Industrial jurisprudence. The word
‘dismiss’ as used in the common parlance is unequivocally understood to mean the termination of the services of a
workmen as a measure of punishment for an act of misconduct, but the word ‘discharge’ is wider in its connotation and, in
the Indian legal context, has acquired a definite meaning to mean termination of the services in terms of the contract of
employment or under the standing orders by serving the prescribed notice or paying wages in lieu thereof. Thus it refers to
what is generally termed as termination/discharge simpliciter. Therefore, when an employer terminates the services of a
workman for the reason that he was a temporary employee and his services were no longer required, it is a case of
‘discharge’ simpliciter under the contract and the provisions of s 11A will not be attracted. Hence, in the course of
adjudication of a dispute relating to such termination of service, the employer cannot claim the right to justify the
termination of service by adducing evidence as if it was an order of dismissal for an act of misconduct committed by the
workman.10 It is only in cases of discharge or dismissal by way of punishment that this section vests the discretionary
jurisdiction in the tribunal to direct reinstatement with or without any terms or conditions or to vary the punishment as the
circumstances of a case may warrant. Furthermore, the section applies only to the punishment of discharge or dismissal
and does not apply to other minor punishments such as warning, fine, withholding increment, demotion or suspension etc.
Similarly, from the words employed in the opening part of s 11A, it is clear that the jurisdiction under this section is
available to a labour court, tribunal and national tribunal, only when a dispute is referred to it for adjudication under s 10.
This jurisdiction is not available to the aforestated tribunals while acting under s 33 or s 36A of the Act.

It is not uncommon that the employers dress the punishment of discharge in the cloak of discharge simpliciter by wording
the order in innocuous language. Conversely, workmen too challenge the discharge simpliciter as a penal discharge. In
such cases, the tribunal can go behind the order to see its substance rather than the form. It is well established law that the
language in which the order of termination of service is couched is not conclusive. It is open to the tribunal to lift the veil
to see whether the form is a mere camouflage for an order of dismissal or vice versa. If the tribunal finds that the order of
discharge simpliciter, by its nature and character in reality, is a measure of punishment for misconduct, it may set aside the
order for non-compliance of the procedure required to be followed in a disciplinary action.11 Where the services of a
temporary employee was terminated on the ground that he had concealed the fact of his removal from service under the
former employer on the charge of corruption at the time of applying for the post but the order of the employer purported to
terminate the service under the contract and no inquiry was held into the matter before termination of the service, such an
order of termination had cast stigma on the service career of the employee. It was a camouflaged dismissal, which was
liable to be set aside.12Where the order of reference was in terms: ‘whether termination of the service of the employees is

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justified or legal’ and the employer too, in his pleadings sets up a case of discharge simpliciter, he cannot subsequently be
permitted to adduce evidence before the tribunal for the first time on the ground that it was not simple discharge, but
dismissal for an act of misconduct. Where however, the workman challenges such termination on the ground that it was a
mere ruse and it was in fact a case of dismissal for an act of misconduct, it would be open to the employer to plead:

(i) that it was a case of termination simpliciter and not at all a case of punishment and alternatively
(ii) that even if it was a case of punishment for an act of misconduct he should be permitted to justify the same by
adducing evidence before the tribunal. 13

In MK Ravi, the reference was ‘whether the termination of the service of the workman was justified and proper?’, but in his
claim statement, the workman pleaded that the termination of his service was not discharge simpliciter but it was a clear
case of wrongful dismissal. In view of this pleading, a single judge of the Kerala High Court held that the labour court was
justified in treating it to be a case of punitive discharge falling within the purview of s 11A. Likewise in Anand Cinema, an
innocuous order of ‘retrenchment’ was found to have been passed for an act of misconduct. the Madhya Pradesh High
Court therefore held that in this situation the evidence of the employer under s 11A could not be shut out.14 Where the
services of a person appointed as a probationer were terminated during the period of probation, the labour court directed
reinstatement on the ground, inter alia, that there was an incident of misconduct or incompetency prior to his discharge
from service. A single judge of the Punjab and Haryana High Court had set aside the award on the ground that the
employee was on probation, which meant on ‘trial’, and that the employer was not obliged to suffer an incompetent
employee for the full term of probation. In appeal, the Division Bench had set aside the order of the single judge and
restored the award of the labour court. Quashing the order of the Division Bench and the labour court, and restoring the
order of the single judge, the Supreme Court through Hegde J (for self and Sinha J) observed:

As noticed above in the instant case, the respondent having been appointed as a probationer and his working having been found not
to the satisfaction of the employer, it was open to the management to terminate his services. Assuming that there was an incident of
misconduct or incompetencey prior to his discharge from service, the same cannot be ipso facto be termed as misconduct requiring
an inquiry. It may be a ground for the employer’s assessment of the workman’s efficiency and efficacy to retain him in service,
unless, of course, the workman is able to satisfy that the management for reasons other than efficiency wanted to remove him from
services by exercising its power of discharge.. .. On the facts of this case, we are satisfied that the incident referred to in the
evidence of the management’s witness does not give rise to a conclusion that the discharge of the respondent was colourable
exercise, with a collateral intention of avoiding an inquiry. Nor does the order of discharge carry any stigma. Hence, the. .. Labour
Court as well as the Appellate Bench of the High Court have erred in coming to a contra conclusion.15

To Arbitrators under Section 10A

The jurisdiction under this section (s 11A ) by express language is vested only in ‘labour court, tribunal or national
tribunal’. An arbitrator under s 10A has not been included. Despite this fact, a majority of a three-judge bench in Gujarat
Steel Tubes, held that an arbitrator under s 10A is comprehended in the expression ‘tribunal’ as used in s 11A. Therefore,
the arbitrator has the same jurisdiction as a labour court, tribunal or national tribunal while adjudicating upon a dispute
relating to disciplinary discharge or dismissal of a workman.16 On no plausible canons of construction or by ingenuity of
‘interpretative technology’, one expression can be said to cover the other. Krishna Iyer J, who delivered the majority
opinion, has invoked the doctrine of casus omissus, in his ‘interpretative technology’ for bringing the expression
‘arbitrator’ within the comprehension of the expression ‘tribunal’ used in s 11A. It amounts to inventing casus omissus,
where none really exists. According to the rules of interpretation, the court cannot interpret a statute to produce a casus
omissus.17 It is a naked usurpation of the legislative function in the guise of interpretation. The learned judge also referred
to a number of foreign and indigenous dicta for arriving at his conclusion but there is nothing in those decisions to support
his activist conclusion that the expression ‘tribunal’ comprehends an ‘arbitrator’. Lord Denning MR who has been relied
on mostly, even in his, provocative heterodoxies has not gone to such an extent. The dissenting judge, Koshal J, rightly
observed that the ‘court would step beyond the field of interpretation, and enter upon the area of legislation ‘if it resorts to
guess work’. Where the text of the statute is unambiguous and not susceptible to dual interpretation, in the language of
Tulzapurkar J:

it would not be permissible for a court, by indulging in nuances, semantics and interpretative acrobatics, to reach the opposite
conclusion than is warranted by its plain text and make it plausible or justify it by specious references to the object, purpose or
scheme of the legislation or in the name of judicial activism.18

Krishna Iyer J, has said thus:

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... the literal latitude of the words in the definition cannot be allowed grotesquely inflationary play but must be read down ...To
bend beyond credible limits is to break with facts, unless language leaves no option.19

To hold that an ‘arbitrator’ under s 10A is comprehended in the term ‘tribunal’ used in s 11A is, to be sure, to bend the
definition ‘beyond credible limits’ by ‘grotesquely inflationary play’. It is submitted that ‘an ornate, pretentious, grandiose
style replete with superfluous frills and rhetorical extravagance’ is a poor substitute for logical legal reasoning and is rather
an ‘undesirable distraction’.20 Prefaces and exordial exercises, perorations and sermons as also these and philosophies
(political or social), whether couched in flowery language or language that needs simplification have ordinarily no proper
place in judicial pronouncements.21 This case strikingly illustrates how far beyond the confines of a case can the court
travel when it chooses to ‘jettison’ the judicial restraint. It also shows, how judiciary is prone to misconceived public good
by confounding private notions with constitutional requirements. The majority opinion is prefaced with a sermon on
morals of litigation and then proceeds to quote ‘the Bible’ and ‘Gandhi Ji’. The judgment turns into 50 pages of print. It
conjures up hyperbolic images; appeals to the Directive Principles in Part-IV of the Constitution, substitutes wholesale
dogmatic assertions for a reasoned consideration of the opposing interests. The slightest invasion of interest has been
confounded with the worst. The most emotive and instigative sentiments have been evoked by most trivial occasions. The
sense of balance, proportion and judicial propriety was completely discarded by Iyer J, while interpreting s 11A. It comes
strangely at a time when working class was more and more gravitating towards militancy and violence stoked by extremist
leaders of the hue and shade of Datta Samant, Suryanarayana Rao, etc., thereby holding the industry and the community to
ransom. This decision reflects nothing worthwhile in terms of reason or logic, except a display of dysfunctional judicial
activism coupled with gross abuse of judicial power on the part of the learned judge.

MISCONDUCT

The expression ‘misconduct’ has not been defined either in the Industrial Disputes Act 1947 or in the Industrial
Employment (Standing Orders) Act 1946. The dictionary meaning of the word ‘misconduct’ is ‘improper behaviour;
intentional wrong doing or deliberate violation of a rule of standard of behaviour’. In Ram Singh, after noticing the
etymological definition of the expression ‘misconduct’, K Ramaswsamy J, observed:

Though this expression is ‘not capable of precise definition, its reflection receives its connotation from the context, the delinquency
in its performance and its effect on the discipline and the nature of duty. It may involve moral turpitude, it must be improper or
wrong behaviour; unlawful behaviour, willful in character; forbidden act, a transgression of established and definite rule of action
or code of conduct but not mere error of judgment, carelessness or negligence in performance of the duty; the act complained of
bears forbidden quality or character. Its ambit has to be construed with reference to the subject matter and the context wherein the
term occurs, regard being had to the scope of the statute and the public purpose it seeks to serve. 22

Generally speaking, misconduct is a transgression of some established and definite rule of action where no discretion is left
except what necessity may demand; it is violation of definite law, a forbidden act.23 It means intentional wrong doing, it
would include unlawful behaviour. A conduct which is blameworthy would be misconduct, if by the commission or
omission of the acts of the employee, the employer suffers loss or it generates an atmosphere destructive of discipline, the
same is misconduct.24 An interesting question arose before the Kerala High Court in Peethambaran. The superintendent of
police invoked Lord Ganapathy’s blessings by performing a special worship at the CBI office in Ernakulam on the
occasion of shifting his office from one wing to another wing of a building. A small amount needed for the worship was
spent by him from his own pocket. A public spirited advocate filed a writ petition in the High Court of Kerala seeking a
writ of mandamus to the Union of India to initiate disciplinary proceedings against the officer as the act of offering prayer
was an act of misconduct being unsecular in nature. The court observed:

We have no doubt that secularism is not an anti-religious doctrine inspite of its emphasis on absolvement of politics from religion
and theocratic society is not the solitary antonym of secular society. Secularism as enshrined in our Constitution respects a person’s
right to believe in any faith and to practise any religion so long as such practice does not hinder public order or morality and health
and so long as such practice won’t interfere with another man’s fundamental rights. It enables both religionists as well as
nullifidians to maintain their respective view points. Neither shall be intolerant towards the other in a secular society.25

In this view of the constitutional concept of secularism, the court held that the conduct of the officer would in no way
constitute an act of misconduct for initiating disciplinary proceedings against him, particularly when he had not spent any
amount from the state exchequer and he honestly believed that such a worship would better the efficiency of his official

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functions. It was a case where a person, despite his public office believed in the blessings of God as necessary for the
commencement of his official work when the office was shifted from one room to another building. In so far as the
relationship of Industrial employment is concerned, a workman has certain express or implied obligations towards his
employer. Any conduct on the part of an employee inconsistent with the faithful discharge of his duties towards his
employer would be a misconduct. Any breach of the express or implied duties of an employee towards his employer,
therefore, unless it be of trifling nature, would constitute an act of misconduct.

In Industrial law, the word ‘misconduct’ has acquired a specific connotation. It cannot mean inefficiency or slackness. It is
something far more positive and certainly deliberate. The charge of ‘misconduct’, therefore, is the charge of some positive
act or of conduct which would be quite incompatible with the express and implied terms of relationship of the employee to
the employer. ‘What is misconduct will naturally depend upon the circumstances of each case’.26 For instance, deliberate
disobedience of any order of the superior authority will be one species of misconduct.27 In workmen of Shalimar Rope
Works, the labour appellate tribunal laid down the following criteria for determining as to whether the act would be an act
of ‘misconduct’, viz, the act :

(i) is inconsistent with the fulfilment of the express or implied conditions of service or
(ii) is directly linked with the general relationship of employer and employee or
(iii) has a direct connection with the contentment or comfort of the men at work or
(iv) has a material bearing on the smooth and efficient working of the concern.28

In Tata Oil Mills, while approving the above criteria, Gajendragadkar J observed:

If the answer to any of these criteria is in the affirmative, the act in question would amount to an act of misconduct. In any case, the
act of misconduct must have some relation with the employee’s duties to the employer. In other words, there must be some rational
connection of the employment of the employee with the employer.29

If the act complained of is found to have some relationship to the affairs of the establishment, having a tendency to affect
or disturb the peace and good order of the establishment or be subversive of discipline in any direct or proximate sense,
such act would amount to ‘misconduct’. Conversely, if the act complained of has no relation to his duties towards his
employer, it would not be an act of misconduct towards his employer.’30 However, breach of contract or a rule of the
employer will not constitute an act of misconduct. For instance, where an employee sub-let a tenement in breach of the
undertaking given by her, it was held that this act was not a breach of discipline, but was merely a breach of contract.31
Likewise, a workman cannot be charged with ‘misconduct’ merely because other workmen threatened to go on strike if he
is not dismissed. the Bombay High Court in Santosh Nadkarni, held that it is no part of the business of the employer to
take sides in intra-union rivalries or disputes. If this is permitted, it would open a flood gate for abuses. Besides, it would
lead to a ‘closed-shop policy’, it will also suppress all freedom of expression and encourage union bossism. It will then
always be open for a majority to remove any employee not only from its fold but from the employment itself.32 In terms of
cl. 14(3) of the Model Standing Orders appended to the Industrial Employment (Standing Orders) Central Rules 1946, the
following acts and omissions shall be treated as misconduct:

(a) wilful insubordination or disobedience, whether alone or in combination with others, to any lawful and
reasonable order of a superior;
(b) theft, fraud or dishonesty in connection with the employer’s business or property;
(c) wilful damage to or loss of employer’s goods or property;
(d) taking or giving bribes or any illegal gratification;
(e) habitual absence without leave, or absence without leave for more than 10 days;
(f) habitual late attendance;
(g) habitual breach of any law applicable to the establishment;
(h) riotous or disorderly behaviour during working hours at the establishment or any act subversive of discipline;
(i) habitual negligence or neglect of work;
(j) frequent repetition or any act or omission for which a fine may be imposed to a maximum of two per cent of the
wages in a month;

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(k) striking work or inciting others to strike in contravention of the provisions of any law, or rule having the force of
law;
(l) Sexual harassment which includes such unwelcome sexual determined behaviour (whether directly or by
implication) as—
(i) physical contact and advances; or
(ii) a demand or request for sexual favours; or
(iii) sexually coloured remarks; or
(iv) showing pornography; or
(v) any other unwelcome physical verbal or non-verbal conduct of sexual nature.

Provided that where there is a complaint of sexual harassment within the meaning of clause (l) of sub-paragraph (3), the
Companies Committee constituted under sub-paragraph (3B) in each establishment for inquiring into such complaints,
shall, notwithstanding anything contained in paragraph 15, be deemed to be the inquiring authority appointed by the
employer for the purpose of these rules.

From the language of this Model Standing Order itself, it is clear that it does not define misconduct or illustrate it,
exhaustively. These cases of misconduct are merely illustrative and by no means exhaustive.33 It is not possible to provide
for every type of misconduct in the Standing Orders for justifying disciplinary action against the workman.34 In Mahendra
Singh Dhantwal, a three judge bench of the Supreme Court observed that Standing Orders of a company only describe
certain cases of misconduct and the same cannot be exhaustive of all the species of misconduct which a workman may
commit. Even though a given conduct may not come within the specific terms of misconduct described in the Standing
Order, it may still be a misconduct in the special facts of a case, which it may not be possible to condone and for which the
employer may take appropriate action. There may be many more acts which may constitute misconduct. The employers
may frame their own Standing Orders suited to the peculiar exigencies of their industries and establishments. Ordinarily,
the Standing Orders may limit the concept of misconduct but not invariably so.35

But in Glaxo Laboratories, glossing on the above, Desai J held that these observations cannot be elevated to a proposition
of law that some misconduct neither defined nor enumerated and which may be believed by the employer to be misconduct
ex post facto would expose the workman to a penalty. The court further pointed out that it cannot be left to the vagaries of
management to say ex post facto that some acts of omission or commission, nowhere found to be enumerated in the
relevant Standing Orders, are nonetheless acts of misconduct not strictly falling within the enumerated misconduct in the
relevant Standing Orders but yet misconduct for the purposes of imposing a penalty.36 The learned judge applied the same
lop-sided logic while deciding Rasiklal Patel.37 In this case, the employee was removed from service by the Ahmedabad
Municipal Corporation on the ground that he made a false suggestion that he had voluntarily left his earlier service because
of transfer while he had actually been removed from service, on the ground of a proved act of misconduct, by his previous
employer. The labour court affirmed the punishment holding that the misconduct alleged against the employee was proved.
The High Court of Gujarat dismissed the writ petition of the employee against the order and judgment of the labour court
with the observation that ‘even if the allegation of misconduct does not constitute misconduct amongst those enumerated
in the relevant service regulations, yet the employer can attribute what would otherwise per se be a misconduct though not
enumerated, and punish him for the same’. Against the judgment of the High Court, the employee filed a petition for
special leave to appeal before the Supreme Court which was dismissed for the reason that it did not merit consideration as
the petitioner was guilty of suppression of material facts. However, in view of the foregoing observation of the High Court,
the court felt that if this statement of law is ‘permitted to go uncorrected, some innocent persons may suffer in future’.
Justice Desai concluded that it is ‘well-settled that unless either in the certified Standing Orders or in the service
regulations an act or omission is prescribed as misconduct, it is not open to the employer to fish out some conduct or
misconduct and punish the workman even though the alleged misconduct would not be comprehended in any of the
enumerated misconduct’. Hence, everything which is required to be prescribed has to be prescribed with precision and no
argument can be entertained that something not prescribed can yet be taken into account as varying what is prescribed.
Again, in AL Kalra, the same bench elaborating the rule in Glaxo Laboratories observed:

Where the misconduct when proved entails penal consequences, it is obligatory on the employer to specify and if necessary define
it with precision and accuracy so that any ex post facto interpretation of some incident may not be camouflaged as misconduct.38

There may be various types of misconduct other than those included in the Standing Orders, which may expose a
delinquent employee to penal consequences. These may be acts of misconduct relating to establishments or undertakings to
which the Industrial Employment (Standing Orders) Act, 1946 does not apply. These acts would, no doubt, be misconduct

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in industrial parlance. On an analysis of the holding of the Supreme Court in Glaxo and Kalra, a single judge of the
Karnataka High Court in Jyoti Home Industries, observed that:

...it can be safely concluded that any act of an employee which would constitute an offence of penal consequences under the Indian
Penal Code or such other analogous legislation is a misconduct. Broadly stated all offences with penal consequences are
misconducts but not all misconducts an offence ...39

In Agnani, it was held that the nature and extent of what constitutes misconduct, will naturally depend upon the
circumstances of each case. When there are Standing Orders, there would be no difficulty because they define
‘misconduct’. In the absence of the Standing Orders, however, the question will have to be dealt with reasonably and in
accordance with commonsense. What acts could be treated as acts of misconduct would depend on the facts and
circumstances of each case.45 In the absence of Standing Orders, it would be open to the employer to consider reasonably
what conduct can be properly treated as misconduct, it would be difficult to lay down any general rule in respect of the
problem. The management, however, has to act in good faith in determining what constitutes major misconduct within the
Standing Orders sufficient to merit dismissal of a workman. For this, it must have facts upon which it bases its conclusions
and it must act without caprice or discrimination and without motive of vindictiveness or intimidation or resorting to unfair
labour practice. There must be infraction of the accepted principles of natural justice. If the act alleged is connected with
vital interest of the workman regarding his earnings, the management should not treat it as an act of misconduct.40

Whether a particular act of misconduct has been committed or not, even though it may not be described, in so many words
in the Standing Orders, will be a matter for the tribunal, to consider. Likewise, whether a particular misconduct will entitle
the employer to punish the employee with dismissal will also be a matter, in an appropriate case, for the decision by the
tribunal. But the mere omission of a certain type of misconduct in the Standing Orders would not entitle the tribunal to
completely shut its eyes to the act of misconduct and to hold the order of dismissal as unjustified for that reason.41
Generally, disciplinary action is based on one or more of the charges of misconduct enumerated in the Standing Orders or
otherwise. The fact that an employee has been erroneously charged under one of the heads of the misconduct, would not
preclude the employer from taking action under another if the actual act committed would fall under the other head. For
instance, under the Standing Orders workmen were charged for ‘wilful insubordination’ instead of ‘striking work’ for
going on illegal strike, the fact that the act fell under the latter head would not prevent the employer from taking action
under either of the clauses.42 The expression ‘misconduct’ covers a large area of human conduct. On the one hand, are the
habitual late attendance, habitual negligence and neglect of work, on the other hand, are riotous or disorderly behaviour
during working hours at the establishment or acts subversive of discipline, wilful insubordination or disobedience. In the
words of Shah J:

Misconduct spreads over a wide and hazy spectrum of Industrial activity; the most seriously subversive conducts rendering an
employee wholly unfit for employment to mere technical default are covered thereby.43

The Bombay High Court in Sharda Prasad, enumerated broadly the following specific illustrative cases of acts of
misconduct, the commission of which would justify dismissal of the delinquent employee:

(i) an act or conduct prejudicial or likely to be prejudicial to the interest or reputation of the master;
(ii) an act or conduct inconsistent or incompatible with the due or faithful discharge of his duty to his master;.
(iii) an act or conduct making it unsafe for the employer to retain him in service;
(iv) an act or conduct of the employee so grossly immoral that all reasonable men may say that he cannot be trusted;
(v) an act or conduct of the employee which may make it difficult for the master to rely on the faithfulness of the
employee;
(vi) an act or conduct of the employee opening before him temptations for not discharging his duties properly;
(vii) an abusive act or an act disturbing the peace at the place of his employment;
(viii)insulting or insubordinate behaviour to such a degree as to be incompatible with the continuance of the relation of
master and servant;
(ix) habitual negligence in respect of the duties for which the employee is engaged; and
(x) an act of neglect, even though isolated, which tends to cause serious consequences. 44

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The effect of such misconduct on the relation of employment has been stated by Lopes L.J, in the following words:

If a servant conducts himself in a way inconsistent with the faithful discharge of his duty in the service, it is misconduct which
justifies immediate dismissal. That misconduct, according to my view, need not be misconduct in the carrying on of the service or
the business. It is sufficient if it is conduct which is prejudicial or is likely to be prejudicial to the interests or to the reputation of
the master and the master will be justified, not only if he discovered it at the time, but also if he discovers it afterwards, in
dismissing that servant. 45

In the same case, Lord Esher MR observed:

The rule of law is, that where a person has entered into the position of servant, if he does anything incompatible with the due or
faithful discharge of his duty to his master, the latter has a right to dismiss him. The relation of master and servant implies
necessarily that the servant shall be in a position to perform his duty duly and faithfully, and if by his own act he prevents himself
from doing so, the master may dismiss him...What circumstances will put a servant into the position of not being able to perform,
in a due manner, his duties, or of not being able to perform his duty in a faithful manner, it is impossible to enumerate.
Innumerable circumstances have actually occurred which fall within that proposition and innumerable other circumstances which
never have yet occurred, will occur, which also will fall within the proposition. But if a servant is guilty of such a crime outside his
service as to make it unsafe for a master to keep him in his employ, the servant may be dismissed by his master; and if the
servant’s conduct is so grossly immoral that all reasonable men would say that he cannot be trusted, the master may dismiss him.46

However, there is no fixed rule of law defining the degree of misconduct which will justify dismissal.47 Hence each case
will depend upon its own facts and circumstances. Whether a particular misconduct is severe or otherwise would depend
upon the facts of each particular case. No hard and fast rule can be laid down to gauge the severity or triviality of the
misconduct. A misconduct which may not be viewed in certain circumstances to be serious, can be serious in another set of
circumstances. A single judge of the Bombay High Court in Basu Deba Das, pointed out that a standard of conduct
expected of an employee in respect of a roadside dhaba or a country liquor bar will not be the same as expected of it while
serving in a five star hotel or in a permit room located in such a hotel. In this case, the punishment of dismissal of the
workman for the misconduct of assaulting a co-worker with a kitchen knife was held to be serious enough to justify the
punishment of dismissal.48 But, when management takes the responsibility to level the charge of misconduct’, there must
be material in support of it, in the absence of which the action taken by the employer would be vitiated by a ‘basic error’ or
‘perversity’. An inference of victimisation also may be plausible.49 Misconduct in industrial employment can broadly be
dealt with under the following headings but these heads are not exhaustive. Nor are they water-tight compartments because
many acts of misconduct falling under one head may also dovetail into or fall under the others as well. These heads and
sub-heads are, therefore, devised merely for the purpose of convenience of treatment.

Misconduct Relating to Duty

In industrial law, like the contract law, existence of duty is the foundation of the misconduct or non-observance, breach or
dereliction of duty. In other words, before an employee can be charged of this type of misconduct, the employer has to
show that the employee had a duty to do the act alleged to have been omitted or to refrain from doing the act alleged to
have been committed. In other words, an ascertainable duty owed by the employee towards the employer in connection
with the employment should have been breached by the employee.50 Such duties may be express or implied.

Express duties are generally created by a statute or the contract inter se the parties or the collective agreement between the
employer and the union, whereas legally enforceable implied duties may be spelt out by the application of common law.
Though it may not be possible to comprehend a general rule covering all possible sources of such duties, in practice, most
of the sources of duty are discernible with sufficient degree of accuracy. Express duties may be created by statute such as
the Factories Act or the Standing Orders framed and certified under the Industrial Employment (Standing Orders) Act.

(i) Non-Observance of Duty

The duties of an employee would include that he would be trustworthy, that his acts would justify the confidence of the
employer, that he would not so act as to prejudice or damage the interests of the employer, that he would not act or conduct
or behave himself in a way inconsistent or incompatible with the faithful discharge of his duties to the employer, that he
would not behave in an insulting or insubordinate manner, that he would not be habitually negligent, etc. Every employee
is expected to behave himself in such a manner so as not to damage or prejudice the interests or reputation of his master,
whatever be the sphere of activity/work of the employee. These principles will be applicable to every employee right from

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the beginning of his employment up to the termination of his employment. These are no additional duties. It is impossible
to define in writing all the duties of every individual employee in an establishment, because any rigid rule delimiting the
several interlinked parts of the technical process of production where labour is employed, that labour cannot be moved
from one aspect of the technical process to another closely-related aspect, would practically paralyse the management.
However, the matter may be very different where there is a covenant for service of a particular type and the person is
called upon to perform some duties totally outside that covenant or is being assigned to some post which is not within the
contract at all.51

The fact that some employees were employed to work as clerks and some as typists would not necessarily lead to the
conclusion that a person who is employed as a clerk can never be employed as a typist or can never be allotted typing
duties.52 It is a general contractual principle, particularly relevant to the industrial employment relationship which takes
effect as an implied term in the contract that the employee should facilitate performance of his obligations under the
contract and must not put it out of his power to do what he has promised to do.53An employee who refuses to carry out an
order is usually making it difficult for the employer to perform his side of the contract. An employee is expected to
discharge not only express duties allotted to him but also the implied duties incidental to his job and the contract of service.
However, the duties which are not allotted to an employee nor are implied or incidental to his job or contract would not be
within his competence. In other words, if an employee does any such act as he is not authorised to do, that by itself would
be a breach of his implied duties. For instance, where a workman deliberately exhibited an advertisement slide which he
was not authorised by the management without the permission of the management during a performance, giving the
advertising firm the benefit of the advertisement to the definite loss of the management, the behaviour of the workman was
held to amount to misconduct and even a misconduct of grave character justifying dismissal.54 Likewise, if an employee
actively anti-canvasses against the quality of goods where the goods are exposed for sale to the public, he has not served
the employer honestly and faithfully and he has not used utmost endeavour to promote the interests of the employer. On
the contrary, he can be said to have acted against the interests of the employer. However, such act should be deliberate and
not otherwise justified.55 To justify the disciplinary action, the employer has to prove that the employee contravened the
express or implied conditions of service. However, the question whether the breach of duty gives rise to a right to dismiss
the workman will depend on a variety of other factors, in particular, the seriousness of the refusal. In other words, not
every uncooperative act is necessarily a repudiation of the fundamental terms of the contract.56

(ii) Non-Performance of Work

Apart from the statutory duties, the generic covenants contained in the contract of service or the implied duties are
incidental to the contract of employment. In practice every employee is entrusted with a specific job in the plant, office or
field which he is required to carry out or perform during the working hours depending upon the nature of the job. The
refusal of the employee to perform or carry out that job or the matters incidental thereto will constitute misconduct in the
absence of any contract, settlement or custom to the contrary. An employee may be guilty of ‘non-performance of work’ in
two ways, viz, by deliberately refusing to attend to the job or work or by neglecting to do the work. The cases falling under
the second category have been dealt with under the next sub-head, viz, ‘negligence of duty’.

(iii) Negligence of Duty

A workman owes a duty to his employer to exercise reasonable care in the performance of his duty. In other words, an
employee must exercise reasonable care and skill in the performance of his duties. A workman, who deliberately neglects
to carry out his work or perform his duty, when required to do that with reasonable care, is guilty of misconduct of
negligence. However, in deciding what is reasonable care, ‘the standards of men and not those of angels’,57 have to be
applied. The concept of negligence has been the subject-matter of great deal of juridical literature. The decided cases on
the application of this duty in any particular circumstance are no more than an analogy and cannot be regarded more than
an existence of a general duty of care. The precise scope of this implied term in the contract of employment is a matter of
controversy. In Lister, the House of Lords was unanimous in deciding that there was an implied term in a lorry driver’s
employment contract that he would exercise reasonable care when going about his employer’s business.58 This part of the
decision seems to have been misconstrued in the latter case of Harvey, in which it was held that a store keeper was not
obliged to indemnify his employer in respect of his negligent driving of his own motor-cycle while fetching some spare
parts in the course of his employment.59 A narrow definition of the ‘duty’ was applied, ie, not to cause damage by his
negligence while doing that which he was actually engaged to do, namely store-keeping. It has been suggested that a wide
definition, ie, to take reasonable care while going about the employer’s business, was what the House of Lords intended to
lay down in Lister’s case.60 A detailed discussion of the subject is beyond the scope of this work. But for practical
purposes, the statement of law relating to negligence in Halsbury’s Laws of England, is instructive:

Negligence is a specific tort and in any given circumstances is the failure to exercise that care which the circumstances demand.
What amounts to negligence depends on the facts of each particular case. In may consist in omitting to do something which ought

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to be done or in doing something which ought to be done either in a different manner or not at all. Where there is no duty to
exercise care, negligence in the popular sense has no legal consequence. Where there is a duty to exercise care, reasonable care
must be taken to avoid acts or omissions which can be reasonably foreseen to be likely to cause physical injury to persons or
property. The degree of care required in the particular case depends on the surrounding circumstances, and may vary according to
the amount of risk to be encountered and to the magnitude of the prospective injury. The duty of care is owed only to those persons
who are in the area of foreseeable danger; the fact that the act of the defendant violated his duty of care to a third person does not
enable the plaintiff who is also injured by the same act to claim unless he is also within the area of foreseeable danger. The same
act or omission may accordingly in some circumstances attract liability for being negligent, although in other circumstances it will
not do so. The material considerations are the absence observance of duty which is on the part of the defendant owed to the
plaintiff in the circumstances of the case and the damage suffered by the plaintiff, together with a demonstrable relation of cause
and effect between the two.61

Thus negligence in legal sense is a negative rather than a positive term and, in any given circumstances, is the failure to
exercise that care which the circumstances demand.62In other words, it is the absence of such care, skill and diligence,
which is the duty of the person to bring in the performance of his work. In case of negligence, a man does not intend that
consequence. Negligence is characterised subjectively by an attitude of indifference and it is, therefore, opposed to
intentional act.63 Negligence and wrongful intentions are rather mutually exclusive states of mind. Where there is a duty to
take care or to exercise certain skill, failure to take care or exercise skill may indicate negligence. An error can be
indicative of negligence and the degree of culpability may indicate the grossness of the negligence. Carelessness can often
be productive of more harm than deliberate wickedness or malevolence. The omission to perform the duty may consist of a
variety of things, for instance, doing nothing or wasting time by loitering, loafing, idling or gossiping or sleeping during
the duty hours or the pretence of waiting instructions with a view to shirk work or because of laziness or wilful indolence.
In day to day work, an honest mistake may be committed and the mistake may be of such a nature as from its own gravity,
it may be indicative of negligence but every error in performing duties can hardly be styled as negligence. A single
instance of such act or omission would not constitute the misconduct of habitual negligence.64 But when these acts are
committed or omitted habitually, they would constitute serious misconduct justifying even the extreme penalty of dismissal
because such negligence of duty is a good ground for the dismissal of the employee.65 ‘Habitual negligence or neglect of
work’ has been included in the list of misconducts in the Model Standing Orders framed under the Industrial Employment
(Standing Orders) Act, 1946. Generally, industrial employers also include this head of misconduct in the Standing Orders
applicable to their establishments.

Habitual negligence or neglect of work on the part of a workman refers to the habit of being negligent or neglectful in the
discharge of his duties. Therefore in order to bring a particular act or omission under this head, it is necessary to establish
that the workman was negligent or neglectful in the discharge of his duties as a habit or confirmed tendency on his part.
Hence isolated or stray incidents of negligence unless attended by serious consequences will not constitute the misconduct
to warrant the punishment of discharge or dismissal. But before a person can be said to be guilty of habitual negligence, it
has to be shown that he has been guilty of negligence on several occasions so as to show that negligence is his habit.66 For
instance, where the concerned workman was found guilty on the charge of negligence in connection with one single
matter, viz, the improper arrangement and labelling of stores, which was alleged to have been committed on one single
occasion, it was held that it was not a case of habitual negligence despite the fact that such arrangement continued for over
several months. Apart from habitual negligence, there may be some acts of gross negligence which may entail serious
damage or consequences to the establishment of the employer. Classic examples of such acts of negligence are, for
example, a sentry who sleeps at his post and allows enemies to slip through; a compositor carelessly placing a plus sign
instead of minus sign in a question paper may cause numerous examinees to fail; a compounder in a hospital or chemist’s
shop who makes up mixture or other medicines carelessly may cause quite a few deaths; the man at an airport who does
not carefully filter the petrol poured into a plane may cause it to crash; the railway employee who does not set the point
carefully may cause a head-on collision.67 In such cases, one act itself would constitute a serious misconduct and it is not
necessary to prove the habit of being negligent on the part of the employee. Therefore, the employers usually include gross
negligence as a separate head in their Standing Orders.

In Kalyani, the facts disclosed that the workman was charge-sheeted for gross dereliction of duty inasmuch as he made
mistakes in the preparation of load-sheet on one day and a balance-chart on another day, which mistakes might have led to
a serious accident to the aircraft. Before the domestic inquiry the workman admitted the mistakes mentioned in the charge-
sheet but contended that he was over-worked and that it was also the duty of the superiors to check the load-sheets and
balance-charts prepared by him. After finding him guilty of the gross negligence involving the possibility of serious
accident, the employer dismissed him from service. It was held that the mistakes committed were of serious nature and the
argument, that other persons were also responsible for checking the work done by the workman, would not mitigate the
mistakes committed by him as he was primarily responsible for the load-sheets and the balance-charts. In view of the

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serious nature of the mistakes, the plea of the workman that he was over-worked in mitigation of the misconduct was also
rejected.68 Likewise, in Caltex, the workman was charge-sheeted for having been caught red-handed while smoking near
an aircraft that was being refueled resulting in a serious accident to the aircraft. After holding the inquiry, the workman
was dismissed from service, which was upheld by the tribunal and affirmed by the Supreme Court.69 In Surendra Kumar
Dash, a sales assistant was discharged from service for misappropriation of funds on the ground that there was short-fall in
the balance amount because he sold the goods without being so authorised. The Orissa High Court held that in the facts
and circumstances of the case, it was a case of negligence and not a case of misappropriation of funds.70The question
whether a particular act of negligence constitutes gross misconduct or not, will depend on its own peculiar facts and
circumstances and the nature of work performed by an employee as well as the status or position he occupies.71 Where a
driver was dismissed for rash and negligent driving causing the death of a 7-year old boy, the labour court ordered
reinstatement. Quashing the award of the labour court, the Madras High Court observed that the direction given by the
labour court was not based on proper appreciation of the issues involved.72

Habitual sleeping during duty hours would constitute an act of gross negligence,73 and serious dereliction of duty. The
seriousness of the misconduct would be aggravated particularly, when the principal duty of the employee is to keep watch
and vigilance on the life and property of the employer as in the case of watch and ward staff.74 For instance, the importance
of the duty of a durban was noted by the Supreme Court in Francis Klein, where it observed that the post of a durban in an
industrial concern, where valuable property, both manufactured goods and assets, required to be guarded, was a post where
trust and confidence of the company were to be maintained and if a durban has failed to give assistance in apprehending a
thief, the refusal of the durban was certainly an act for which the employer was justified in dismissing him on the ground
of loss of confidence.75 In inflicting the punishment of discharge or dismissal from service, the distinction between mere
negligence and wilful or deliberate negligence is also relevant.76 Mere slackness of work, however, is not sufficient to
constitute serious offence of ‘habitual negligence’ or ‘neglect of work’ to warrant an order of dismissal.77 Likewise, the
mere loss of identity card on more than one occasion may not behove a workman as he is expected to be vigilant, but it
will not constitute the misconduct of habitual negligence or neglect of work. Therefore, for such a lapse, he may be liable
for some punishment like a warning, censure or loss of an increment but the punishment of discharge or dismissal for such
lapse is not justifiably warranted.78

Another misconduct which is usually committed by industrial employees is loitering about during the duty hours by
leaving their machines or the seats of work on various pretexts such as chitchatting with others or moving about aimlessly.
If a workman is found guilty of the misconduct of habitual loitering about, that would be a good ground for his dismissal
and the employer will be justified to dismiss him from service. This point has been illustrated by the decision of the
Supreme Court in the case of Burn & Co.79 In this case, inspite of the findings that the workman was always in the habit of
loitering outside his place of work without the permission of his departmental head and that he did not care to get any
permission for going out and further that the warning by the employer had no effect on him, probably because he was the
assistant secretary of the union and he could break discipline with impunity, the tribunal directed the reinstatement of the
workman as it took the view that the penalty of dismissal was rather harsh and out of proportion to the misconduct
committed by him. In appeal, the Supreme Court set aside the award of the tribunal ordering reinstatement as the
misconduct in question was held sufficient to justify the dismissal. Irrespective of whether a right to dismiss a workman
exists, the workman is under an implied duty to indemnify the employer in respect of the consequence of his negligent
conduct.80

(iv) Engaging in Work Similar to that of the Employer

Some employers provide in their Standing Orders that a workman will not engage himself in any work similar in nature to
that carried on by the employer or in which he is employed. Such provisions are made where the employers want to
prohibit clandestine competition by their own employees. In a suitable case, if an employee is found guilty of such act of
misconduct, it may warrant penalty of dismissal. However, the charge has to be specifically alleged and proved. In
Remington Rand, the Supreme Court held that ‘engaging in any work similar in nature’ meant continuity of transactions
and not a single, casual or solitary transaction. In the circumstances of the case, the act of selling one second-hand
typewriter was held not to be a contravention of the relevant standing order.81 In T Krishnamoorthy, the act of borrowing
of agricultural loans at low interest in the names of relatives of the employee and utilising the same for personal purposes
has been held to be an act of misconduct prejudicial to the interest of the employer bank. In the facts and circumstances of
the case, the punishment of reduction in basic pay by one stage for two years has been held not to be excessive.82

(v) Absence without Leave

An employee is under an obligation not to absent himself from work without good cause during the time at which he is
required to be at work by the terms of his contract of service.83 Absence without leave is misconduct in industrial
employment warranting disciplinary punishment. Even if the workman is not absent from the employer’s business

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premises, his absence from the specific place of duty where he is required to be, without permission, would also constitute
an act of misconduct. Therefore, the absence of an employee from duty, if it amounts to misconduct inconsistent with
faithful discharge of his duties, would constitute good cause for his dismissal.84 Habitual absence from duty without leave
has been made a misconduct under the Model Standing Orders framed under the Industrial Employment (Standing Orders)
Act, 1946. Likewise, the industrial employers also include the ‘absence from duty’ without leave in the list of acts of
misconduct in their Standing Orders. Sanction of leave will be a good defence to a misconduct of absence without leave.
This presupposes that before a workman absents himself, he must have applied for and obtained leave from the employer,
whether the leave is of casual nature or earned one.85 No employee can claim leave of absence as a matter of right and
remaining absent without leave will constitute violation of discipline.86 The mere fact that he had applied for leave would
not be a good defence when the leave was refused by the employer in exercise of his discretion, unless it could be shown
that the action taken was actuated by the desire to victimise the workman.87 The fact that the workman was continuously
absent from work without leave on account of his detention in jail for an offence, will not give an immunity to the
workman to remain absent without leave and the employer will be justified in discharging him from service.88 In IISCO,
seven workmen were absent without leave for 14 consecutive days as they were in police custody. From the police
custody, they applied for leave which was refused and the company terminated their service under the relevant Standing
Order for remaining absent without leave. The Industrial tribunal took the view that the relevant Standing Order was not
the inflexible rule and mere application for leave was sufficient to arrest the operation of the Standing Order. In appeal, the
Labour Appellate Tribunal held that in view of the circumstance that the workmen were in custody, the company was not
justified in refusing leave. Quashing the order, SK Das J, observed:

It is true that the arrested men were not in a position to come to their work, because they had been arrested by the police. This may
be unfortunate for them; but it would be unjust to hold that in such circumstances the company must always give leave when an
application for leave is made. If a large number of workmen are arrested by the authorities in charge of law and order by reason of
their questionable activities in connection with a labour dispute (as in this case), the work of the company will be paralysed if the
company is forced to give leave to all of them for more or less indefinite period. Such a principle will not be just; nor will it restore
harmony between labour and capital or ensure normal flow of production. It is immaterial whether the charges on which the
workmen are arrested by the police are ultimately proved or not in a court of law. The company must carry on its work and may
find it impossible to do so if a large number of workmen are absent. Whether in such circumstances leave should be granted or not
must be left to the discretion of the employer. It may be readily accepted that if the workmen are arrested at the instance of the
company for the purpose of victimisation and in order to get rid of them on the ostensible pretext of continued absence, the
position will be different. It will then be a colourable or mala fide exercise of power under the relevant Standing Order; that,
however, is not the case here.89

In TELCO, the workman absented himself without leave or permission with effect from 19 December, 1970 and the
employer issued a memo and charge-sheet on 8 January, 1971 notifying the domestic inquiry to be held against him. Since
the workman failed to appear in the domestic inquiry and the inquiry proceeded ex parte on the basis of which he was
discharged from service, by order dated 5 March 1971. However, on 4 February 1980, the workman informed the
management that he was arrested by the police on 9 December 1970 in connection with a murder case and requested the
management to allow him to join duty. The refusal of the management to accede to this request led to an industrial dispute.
A single judge of the Patna High Court held that the discharge of the workman was valid and justified for continuous
absence without permission or leave.90Another defence open to an employee against the charge for absence without leave
is that the absence was on account of circumstances beyond his control. For instance, where the absence of a workman was
on account of his sudden or serious illness or the serious illness of a relation, that would be an extenuating circumstance
which the employer will have to take into consideration. However, if a workman malingers, feigns sickness in order to
avoid duty by producing a false medical certificate, this would itself be a serious act of misconduct. If the management
requires the application for leave on the ground of sickness to be accompanied by a medical certificate, the workman will
not be justified in absenting himself without producing the medical certificate and grant of leave.91 But whether a workman
was in fact, ill or not, is a question of fact which has to be considered by the inquiry officer on the basis of the evidence
produced before him and cannot obviously be a matter of conjecture or presumption.92 When an employee goes on
applying for extension of leave on the ground of sickness, the employer is not bound to grant him leave for an indefinite
period, especially when no leave is due to him. However, the burden of proof would be on the employee to show that this
absence was justified.93 Such absence without leave constitutes a misconduct justifying disciplinary action against the
delinquent workman. The punishment can only be imposed either by complying with the procedure prescribed by the
Standing Orders of the establishment, if any,94 or with the rules of natural justice. Normally, the punishment should be
inflicted after the workman has been found guilty of the misconduct after holding a domestic inquiry.95

The quantum of punishment in cases of misconduct of absence from duty without leave would depend upon the facts of
each case.96 For instance, where the worker absented after the tiffin hour continuously for two days, such temporary

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absence would not amount to misconduct justifying the penalty of dismissal.97 The absence of a workman, belonging to
watch and ward staff, on account of his arrest for an offence under the Arms and Excise Act, was held sufficient
justification for dismissal in view of the past record of habitual absence without leave on the part of the workman and the
gravity of the offence with which he was charged, was considered to be a good ground for his dismissal.98 On the other
hand, in the absence of a provision in the Standing Orders of a company making ‘absence without leave’ for a short period
of time a misconduct justifying dismissal, the absence of the workman without leave for three days for which he offered
explanation, the extreme penalty of dismissal was held to be unwarranted.99

Absence for mere three occasions in a month, was held not to be sufficient in law to prove the misconduct of habitual
absence.1Systematically leaving work without permission is another variant of absence without leave. When, therefore, a
workman systematically absents himself from work without permission and without making any application for leave, such
act is gross violation of discipline. The fact that the workman happens to be an office bearer of the workers union cannot
confer immunity upon him from punishment for breach of discipline. Such misconduct when proved would justify the
punishment of dismissal.2 In Swaraj Tractors, the facts were: the workman remained absent without leave from 27 March
1991. Three days later, he was arrested by police under s 302 of IPC and kept under detention. A charge-sheet was issued
to the workman for unauthorised absence. The workman did not present himself before the enquiry officer despite notice,
nor was there any communication from him regarding his inability to participate in the enquiry. The enquiry officer
submitted his findings on the basis of which, he was dismissed from service. The said order was challenged by the
workman by filing a civil suit which was decreed on 19 April 1995. The ground for holding the order of termination illegal
was that there had been denial of principles of natural justice and the respondent was not allowed to participate in the
inquiry proceedings. The said order was upheld by the lower appellate Court and the High Court. Quashing the orders of
the courts below, a three-judge Bench of the Supreme Court held:

.. . It was not correct for the Courts below to come to the conclusion that principles of natural justice were violated. Admittedly,
wife of the respondent received the notices and there was nothing to prevent her from participating in the inquiry proceedings or
for the respondent to appoint some person to represent him. Furthermore, even at this stage, there is nothing on record to show that
the respondent made any attempt to communicate with the appellant seeking leave of absence. It is, therefore, quite evident that the
report of the Inquiry Officer that the respondent had been absent without leave was factually correct and as per the Standing Orders
this tantamounted to a misconduct. According to the respondent, he was, first apprehended on 30th March, 1991 but till the order
of dismissal was passed he had not joined duty nor was there any application for grant of leave. In our opinion, therefore, the
Courts below could not have come to the conclusion that the principles of natural justice had been violated.. .. We, therefore, allow
this appeal and set aside the orders of the Courts below, but in view of the fact that the respondent had put in twelve years of
service we direct the appellant to pay to the respondent within four weeks from today an ex-gratia amount of Rs. 3,00,000/-.3

In YP Sarabhai, the facts disclosed that a bank employee remained continuously absent for a long period without any
reasonable cause or justification and inspite of the direction from the management to report for duty and also the
permission granted to him from time to time extending the date to join duty. His conduct showed that he was remaining
absent on the ground of ailment with a view to avoid transfer, even though he was attending court proceedings on different
dates. He was dismissed him from service, which dismissal was upheld by the High Court. Dismissing the appeal filed by
the employee, Lakshmanan J (for himself and Panta J) of the Supreme Court awarded a compensation of Rs. 1,50,000/-,
which included the provident fund dues of Rs. 75,930/-.4 In L&T Komatsu, the respondent-workman was dismissed, after
conducting enquiry, for remaining absent without leave for a total of 105 days in a period of nine months. The labour court
directed reinstatement and substituted dismissal with stoppage of increments. A single judge of the High Court modified
the award denying continuity of service, while retaining the other part of the award. In writ appeal, the division bench
further modified the award by ordering reinstatement without back wages and continuity of service. Allowing the appeal
filed by the company, Pasayat J (for self and Sathasivam J) of the Supreme Court held:

When the factual background is considered in the light of principles indicated above, the inevitable conclusion is that the Labour
Court and the High Court were not justified in directing the reinstatement by interference with the order of termination. The orders
are accordingly set aside. The order of termination as passed by the concerned authority stands restored.5

Where the workman was charged of unauthorised absence, apart from certain other consequential charges, such as, failure
to take interest in work and disobedience, and the said absence being only of few days, the punishment of dismissal was
disproportion and is liable to be set aside. In the instant case, in view of the fact that he had failed to participate in the
enquiry despite notice, he is not entitled to backwages.6 Even where the enquiry held was fair and proper, the tribunal
adjudicating the dispute can go into the question of quantum of punishment and, in the instant case where the employee
had put in 30 years of service, the punishment of dismissal for unauthorised absence for a few days and his argumentative

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nature is disproportionate. The order of the labour court substituting dismissal with stoppage of increment was proper.7
Where a workman was dismissed from service on charges of using filthy language and answering superiors insolently, the
misconduct is trivial and the punishment is disproportionate. However, considering the bitter relations developed and fact
that delinquent was out of employment for several years, a compensation of Rs. 10 lakhs was paid instead of
reinstatement.8 In Jagdish Singh, the facts were: the workman employed as a sweeper remained absent without leave on
four occasions in two months. Absence without leave for a total of 15 days in a period of two months could not be said to
be ‘habitual’. The punishment of dismissal is disproportionate, in view of the fact that he had to sort out the domestic
problems of his daughter with her in laws.9

(vi) Late Attendance

Punctuality in attendance is always an implied condition of service. The management is entitled to demand regular and
punctual attendance on the part of the employees and it has a right to take disciplinary action, if necessary, to dismissal, in
order to ensure that these requirements are fulfilled. Habitual late attendance is a misconduct and is generally included in
the Standing Orders of industrial establishments because late attendance is a species of absence without leave between the
time an employee is required to arrive and the time he actually arrives. Though casual or isolated cases of late attendance
may not warrant serious punishment, yet if an employee makes late attendance a matter of habit, it can be seriously viewed
particularly when the workman has been previously warned to be punctual. The question as to what punishment should be
inflicted in a particular case would depend on the facts and circumstances of that case. For instance, where the workman
concerned, on more than six occasions within a period of twelve months, came late to the office, was warned thrice and on
one occasion was suspended and in spite of that, he continued to persist in his habit of late attendance without any valid
excuse, his dismissal for habitual late attendance was held justified. On the other hand, where the workman was charge-
sheeted for late coming on one occasion, it was held that the punishment of suspension for 10 days without pay was held to
be excessive.10 Where the relevant Standing Orders of the company provided inter alia that an employee would be
discharged for frequent absence without permission and for frequent late or irregular attendance, but this was subject to a
proviso that an employee could not be discharged from service until he had previously received at least one warning, one
severe warning and one suspension which should be recorded on his service sheet, the discharge of the employee was held
invalid for not complying with requirements of the proviso.11

(vii) Strikes

It is an accepted principle of industrial adjudication that workmen can resort to strike in order to press their demands
without snapping the relationship of employer and employee. It is equally a well-accepted principle that the work of the
factory cannot be paralysed and brought to a standstill by an illegal strike, in spite of the legal steps being taken by the
management to resolve the conflict. In such circumstances, the employer has the right to take disciplinary action for the
misconduct of strike against the delinquent workman and also ‘to carry on the work of the factory in furtherance of which
it could employ other workmen and justify its action in any industrial adjudication of the dispute arising therefrom.12 The
Model Standing Orders have included ‘striking work or inciting others to strike work in contravention of the provisions of
any law, or rule having the force of law’ as a head under the acts of misconduct. A further limitation on the right to strike,
viz, the justification ‘has been developed by industrial adjudication. Hence apart from ‘illegal strikes’, the Standing Orders
of the industrial employers include ‘unjustified strikes’ also in the list of acts of misconduct warranting dismissal but the
punishment for taking part in an illegal or unjustified strike would depend upon the construction of the Standing Orders
and also the facts and circumstances of each case. The law with respect to determination of the quantum of punishment for
taking part in an illegal strike has been stated by Sinha CJI, in IGN Rly, in the following words:

The only question of practical importance which may arise in the case of an illegal strike, would be the kind or quantum of
punishment, and that, of course, has to be modulated in accordance with the facts and circumstances of each case. Therefore, the
tendency to condone what has been declared to be illegal by statute, must be deprecated, and it must be clearly understood by those
who take part in an illegal strike that thereby they make themselves liable to be dealt with by their employers. There may be
reasons for distinguishing the case of those who may have acted as mere dumb-driven cattle from those who have taken an active
part in fomenting the trouble and instigating workmen to join such a strike, or have taken recourse to violence...To determine the
question of punishment, a clear distinction has to be made between those workmen who not only joined in such strike, but also
took part in obstructing the loyal workmen from carrying on their work, or took part in violent demonstrations, or acted in defiance
of law and order, on the one hand, and those workmen who were more or less silent participators in such a strike, on the other
hand. It is not in the interest of the industry that there should be a wholesale dismissal of all the workmen who merely participated
in such a strike. It is certainly not in the interest of the workmen, themselves. An Industrial tribunal, therefore, has to consider the
question of punishment, keeping in view the overriding consideration of the full and efficient working of the industry as a whole.
The punishment of dismissal or termination of services, has, therefore, to be imposed on such workmen as had not only
participated in the illegal strike, but had fomented it, and had been guilty of violence or doing acts detrimental to the maintenance

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of law and order in the locality where work had to be carried on.13

In Model Mills, the Standing Orders of the employer-company provided for dismissal for taking part in an illegal strike.
Some workmen were dismissed from service in accordance with the relevant Standing Order for taking part in an illegal
strike. On the construction of the Standing Order, the dismissal was held as proper and justified.14 In Burn & Co, the court
affirmed the award of the tribunal holding that the suspension and dismissal of the workmen for going on illegal strike was
unjustified in the circumstances of the case. In this case, after the dismissal of the workmen, the employer company had
taken back in service a large number of workmen while leaving out the concerned workman. The court observed that mere
participation in the strike would not justify the suspension or dismissal, particularly when no clear distinction could be
made between workmen not taken back into service and those taken back, although they had also participated in the
strike.15 In Caltex, the court reversed the holding of the labour appellate tribunal that the punishment of dismissal for going
on illegal strike was unduly severe with the observation that the labour appellate tribunal appeared to have been influenced
by the consideration that mere participation in an illegal strike might not always and in every case deserve dismissal. The
court itself noticed that it was shown in the inquiry to the satisfaction of the inquiry officer that the workman was guilty of
not merely participating in an illegal strike but also of several other acts of gross indiscipline for which the punishment of
dismissal was provided under the Standing Orders.16 Later, in Bata Shoe Co,17 the court observed that it may be that
participation in an illegal strike may not, necessarily and in every case, be punished with dismissal; but where an inquiry
has been held and the employer has inflicted the punishment of dismissal upon the employee on finding him guilty of the
misconduct of joining an illegal strike, the tribunal should not interfere, unless it finds an unfair labour practice and
victimisation against him. In this case, in spite of the clear finding that the strike was illegal and staged in hot haste, a
misconduct which merited dismissal under the relevant Standing Orders and that the managerial inquiry was proper, the
tribunal had directed the reinstatement of the workmen. The Supreme Court disagreed with the award of the tribunal and
held that on these findings, the tribunal should not have interfered with the action of dismissal. In IMH Press, the court
observed that mere taking part in an illegal strike without anything more would not necessarily justify the dismissal of all
the workmen taking part in the strike.18 In Oriental Textile, the Supreme Court observed:

...merely because workmen go on strike it does not justify the management in terminating their services. In any case, if allegations
of misconduct have been made against them those allegations have to be inquired into by charging them with specific acts of
misconduct and giving them an opportunity to defend themselves at the inquiry. Even where a strike is illegal, it does not justify
the management from terminating their services merely on that ground though if it can be shown on an inquiry that the conduct of
the workmen amounted to misconduct it can do so.. .. .in the case of a domestic inquiry where misconduct is held to be proved, the
tribunal can only interfere with that order if there is mala fide or want of good faith, there was victimisation or unfair labour
practice or the management has been guilty of basic error or violation of the principles of natural justice or on the materials the
finding is completely baseless or perverse. If, however, the management does not hold such an inquiry or the inquiry is due to
some omission or deficiency not valid, it can nonetheless support its order of discharge, termination or dismissal when the matter is
referred for Industrial adjudication by producing a satisfactory evidence and proving misconduct.19

After the insertion of s 11A, the first part of these observations is no longer good law. The jurisdiction of the tribunal by
this provision has been enlarged to go into the merits of the case instead of confining itself to the circumstances delineated
in Indian Iron Steel Co. Furthermore, the jurisdiction of the tribunal to take fresh evidence has on the other hand been
curtailed. However, where during an illegal and unjustified strike, the workmen physically obstructed other willing
workers from work by sitting down between the tram lines, it was a serious misconduct for which the action of dismissal
was justified and no inference of victimisation could be drawn.20 In East Asiatic, in view of the fact that all the workmen
who participated in the strike were given the punishment of cut of a day’s wage alone and in view of the further fact that
the charge of instigation against the concerned workman not having been proved, it was held that the punishment of
dismissal inflicted upon him could not be sustained, as the charge of instigation had failed.21 The mere participation of the
workers in the strike either during working hours or beyond working hours will not itself be such a serious misconduct
even if such presence constitutes a civil trespass,22 but where the workmen forcibly entered the premises of the mills in
spite of the warnings by the watchman and had entered the workshop, the boiler house and the mill house and continued to
stay there, threatening violence towards the property and persons, the action of dismissal was held to be justified.23 The
workmen who staged an illegal strike cannot successfully plead that their action was justified or that the strike was
peaceful, and that it would be against the principles of social justice to punish them with dismissal for such action on their
part.24 There can be no distinction between an illegal strike which may be said to be justifiable and one which is not
justifiable, as it is not permissible to characterise an illegal strike as justifiable which is not warranted by the Act. Every
one participating in an illegal strike is liable to be dealt with departmentally, subject, of course, to the action of the
department being questioned before the Industrial adjudicator.25 Nevertheless, the employer will have the right to dismiss a
workman joining an unjustified strike only when:

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(i) the strike itself is not bona fide, or

(ii) when it is launched on other extraneous considerations and not solely with a view to better the conditions of
labour.26

A worker cannot always be dismissed for joining a strike which is not illegal, but is simply unjustified. In such cases, in
the absence of any evidence to show that the workmen concerned were guilty of violence during the strike, the action of
dismissal cannot be sustained. The question whether a strike is illegal or not is a question of law but the further question
whether the strike was justified or not is a question of fact. When, therefore, on consideration of all the facts and
circumstances, the tribunal comes to the conclusion that the strike was justified, that finding cannot be interfered with in
judicial review even if the tribunal placed undue weight on one or more circumstances.27The act of going on strike would
not constitute abandonment of employment by a workman.28 It is not open to the employer to give employment to some of
the striking workmen and refuse it to others as that would amount to victimisation and unfair labour practice. 29 In Amrit
Vanaspati, the facts were: the respondent-workman was dismissed for misconduct involving riotous and disorderly
behaviour, throwing of a coolie into the boiler, forcing the workers to stop work, etc., after holding enquiry. The labour
court accepted the findings of the enquiry officer and upheld the dismissal. The High Court, in exercise of is writ
jurisdiction, set aside the order of the labour court and directed reinstatement with back wages. Quashing the orders of the
High Court and restoring the award passed by the labour court, Lakshmanan J (for self and Panta J) of the Supreme Court
held:

The Labour Court in the concluding part of its award has held that the charges framed against the workman are charges of
misconduct of serious nature and, therefore, it agreed with the argument of Management that it was not in the interest of
Management and industrial peace to retain such a person in service who was guilty of creating indiscipline in the factory which
affects the production of the factory adversely.. .. Hence, the Labour Court held the dismissal of the workman from service from
8.3.76 by the Management as justified, proper and lawful and the concerned workman was held to be not entitled to receive any
benefit or relief. However, the High Court, as stated earlier, interfered with the factual and categorical findings of the Labour Court
and ordered reinstatement with back wages and other benefits. In our opinion, the High Court while exercising powers under writ
jurisdiction cannot deal with aspects like whether the quantum of punishment meted out by the Management to a workman for a
particular misconduct is sufficient or not. This apart, the High Court while exercising powers under the writ jurisdiction cannot
interfere with the factual findings of the Labour Court which are based on appreciation of facts adduced before it by leading
evidence. In our opinion, the High Court has gravely erred.. . the High Court is not right in interfering with the well considered
order passed by the Labour Court confirming the order of dismissal.30 (para 11) (Italics supplied).

In Bangalore Hospital, seven workmen were dismissed for going on an illegal strike causing serious hardships to patients.
The labour court, having recorded a finding that the workmen resorted to an illegal strike, nevertheless ordered
reinstatement on the ground that no untoward incident happened due to the strike. Quashing the order of the labour court,
the Karnataka High Court held that merely because no untoward incident happened, the dismissal could not be held to be
disproportionate.31 Once it is found that the workman was guilty of inciting other workmen to stage an illegal strike, the
award of the labour court that the said workman was not entitled to any relief does not call for interference by the High
Court.32 Where the workman was dismissed for instigating and forcing his fellow workmen to go on an illegal strike, the
labour court, in the first instance did not record any finding on the merits of the case. On a direction issued by the High
Court to give its finding on merits, the labour court held that the dismissal was not justified and accordingly directed
reinstatement with 50 per cent back wages. Dealing with the matter in a writ petition filed by the management, Marlapalle
J of the Bombay High Court, while quashing the award, castigated the labour court for proceeding with misplaced
sympathy and passing a perverse award. The learned judge further observed that it was necessary for the adjudicator to set
out reasons before interfering with the punishment ordered by the employer.33

In UB Gadhe, the facts disclosed that the management charge-sheeted a few workmen on some 12 counts and dismissed
them, after enquiry, for leading and instigating their fellow workers to resort to an illegal strike in a public utility service,
which continued for about 5-6 months. The labour court directed their reinstatement but without back wages. The High
Court quashed the order of the labour court. Upholding the order of the High Court, Pasayat J (for self and Panta J) of the
Supreme Court, observed:

Power and discretion conferred under the Section needless to say have to be exercised judicially and judiciously. The Court
exercising such power and finding the misconduct to have been proved has to first advert to the question of necessity or desirability
to interfere with the punishment imposed and if the employer does not justify the same on the circumstances, thereafter to consider
the relief that can be granted. There must be compelling reason to vary the punishment and it should not be done in a casual

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manner.34

(viii) Go-slow

Slow-down or go-slow, whether as a concerted action by the workmen or by an individual workman, in reducing
production is a breach of duty and has been condemned as misconduct in Industrial adjudication. An employee who
deliberately works slowly and thereby curtails production or does not complete a job in proper time, is guilty of intentional
omission of duty, which would constitute misconduct. In the words of Das Gupta J:

‘Go-slow’ which is a picturesque description of deliberate delaying of production by workmen pretending to be engaged in the
factory is one of the most pernicious practices that discontented or disgruntled workmen some time resort to. It would not be far
wrong to call this dishonest. For, while thus delaying production and thereby reducing the output, the workmen claim to have
remained employed and thus be entitled to full wages. Apart from this also, ‘go-slow’ is likely to be much more harmful than total
cessation of work by strike. For, while during a strike much of the machinery can be fully turned off, during the ‘go-slow’ the
machinery is kept going on a reduced speed which is often extremely damaging to machinery parts. For all these reasons ‘go-slow’
has always been considered a serious type of misconduct.35

In SU Motors, the Supreme Court held that the misconduct of ‘go-slow’, being of a serious nature would expose the guilty
workman to the consequences of dismissal from service. By its very nature, the proof of ‘go-slow’ particularly when it is
disputed involves into various aspects such as nature of the process of production, the stages of production and their
relative importance, the role of the workers engaged at each stage of production, the pre-production activities and the
facilities for production and the activities of the workmen connected therewith and their effect on production, the factors
bearing on the average production etc. The ‘go-slow’, may be further indulged in by an individual workman, either in one
section or different sections or in one shift or both the shifts affecting the output in varying degrees and to different extent
depending upon the nature of the product and the productive process. Furthermore, even where it is admitted, in some
cases, there may be difficulties in determining the ‘go-slow’ or approximate loss on account of the ‘go-slow’, as it may
have repercussions on production even after the ‘go-slow’ ceases which may be difficult to estimate. Sawant J, observed:

There cannot be two opinions that ‘go-slow’ is a serious misconduct being a covert and a more damaging breach of the contract of
employment. It is an insidious method of undermining discipline and at the same time a crude device to defy the norms of work. It
has been roundly condemned as an Industrial action and has not been recognised as a legitimate weapon of the workmen to redress
their grievances.36

‘Go-slow’ is not like an ordinary strike, which has been recognised as a lawful weapon under certain circumstances. It has
also been made a misconduct under the Model Standing Orders, and it is generally included in the Standing Orders of
Industrial establishments as an act of misconduct liable to disciplinary action. Workers are under an obligation to procure
average production and if they deliberately refuse to give that average, they must be held guilty of the misconduct of ‘go-
slow’.37 In other words, ‘go-slow’ is not a legitimate weapon in the armoury of labour in the process of collective
bargaining.38 In Sasa Musa Sugar Works, Wanchoo J observed that ‘go-slow’ has always been considered as a serious type
of misconduct. The misconduct of ‘go-slow’ may entail two-fold consequences, viz, discharge or dismissal from service
and deduction of wages. In either case, it is necessary that the factum of ‘go-slow’ and/or extent of the loss of production
on account of it is disputed, there should be a proper inquiry on the charges which furnish particulars of the ‘go-slow’ and
the loss of production on that account. The principles of natural justice require it, and whether they have been followed or
not, will depend on the facts of each case. The question of deduction of wages is not as simple as in the case of strike
where measure of pro rata deduction from wages may provide a fair and just remedy, the extent of deduction of wages on
account of ‘go-slow’ action may in some cases raise a complex question. Therefore, the simplistic method of deducting
uniform percentage of wages from the wages of all workmen calculated on the basis of the percentage fall in production
compared to the normal or average production may not always by equitable.39 On the facts and in the circumstances of the
case, the learned judge directed that the employer will not deduct more than 5 per cent of the wages of the workmen for the
month in which the workmen indulged in ‘go-slow’.

(ix) Gherao

The expression gherao in its etymological sense means ‘to encircle’, but in the field of Industrial relations, it has acquired
‘a connotation and meaning’ which is entirely new. It is comparatively a new form of demonstration which is being largely

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resorted to by labour in this country. The meaning of the word gherao and its Industrial implications have been discussed
by a special Bench of five judges of the Calcutta High Court in Jay Engineering Works, in which Sinha CJ, observed:

...we might now define the word ‘gherao’ as a physical blockade of a target, either by encirclement or forceable occupation. The
‘target’ may be a place or a person or persons, usually the managerial or supervisory staff of an Industrial establishment. The
blockade may be complete or partial and is invariably accompanied by wrongful restraint, and/or wrongful confinement, and
occasionally accompanied by assault, criminal trespass, mischief to person and property, unlawful assembly and various other
criminal offences. Some of the offences complained of are cruel and inhuman, like confinement in a small space without lights or
fans, and for long periods without food or communication with the outside world. The persons confined are beaten, humiliated by
abuse and not allowed even to answer calls of nature and subjected to various other forms of torture, and are completely at the
mercy of the besiegers. The object is to compel those who control industry to submit to the demands of the workers, without
recourse to the machinery provided for by law and in wanton disregard of it. In short to achieve their object, not by peaceful
means, but by violence.40

In Krishnakali Tea Estate, the events disclosed that certain workers came in a mob on the night of 12th-13th of October
1980 to the bungalow of Manager of the Tea Estate, armed with lethal weapons such as lathis, bows and arrows and axes
and they gheraoed the Manager and others and by threat demanded bonus at the rate of 20% as against 8.33% offered by
the management. The gherao according to the management continued till 3.00 A.M. on 13 October 1980. On being
informed, the police, Bilasipara, arrived at the estate, but the mob consisting of the workmen became violent and damaged
the bungalow and other property of the estate. During the wrongful confinement of the manager, he was compelled to sign
a document, agreeing to pay 20% bonus. On the basis of above allegations, a domestic enquiry was instituted against the
concerned workmen and after the enquiry, on the report of the Enquiry Officer, the workmen concerned were dismissed
from service. Several events took place post their dismissal including criminal trial and acquittal of the workmen therein.
The labour court, based on the material produced before it, upheld the dismissal. A single judge of Gauhati High Court
quashed the award and directed reinstatement of the workers, which order was upheld by the Division Bench. Quashing the
orders of the High Court and restoring the award of the labour court, Hegde J (for self, Sinha and Mathur JJ) of the
Supreme Court, held:

From the above, it is seen that the approach and the objectives of the criminal proceedings and the disciplinary proceedings are
altogether distinct and different. The observations therein indicate that the Labour Court is not bound by the findings of the
criminal court.. . the Tribunal has come to the conclusion that the concerned workmen had participated in the gherao armed with
deadly weapons and caused damage to the property of the Estate and wrongfully confined the Manager and others for nearly 8 hrs.
Therefore, it found all those workmen who took part in the said incident guilty of the misconduct.. .. This leaves us to consider
whether the punishment of dismissal awarded to the concerned workmen dehors the allegation of extortion is disproportionate to
the misconduct proved against them. From the evidence proved, we find the concerned workmen entered the estate armed with
deadly weapons with a view to gherao the Manager and others in that process they caused damage to the property of the estate and
wrongfully confined the Manager and others from 8.30 p.m. on 12th of October to 3 a.m. on the next day. These charges, in our
opinion, are grave enough to attract the punishment of dismissal even without the aid of the allegation of extortion. The fact that
the Management entered into settlement with some of the workmen who were also found guilty of the charge would not, in any
manner, reduce the gravity of the misconduct in regard to the workmen concerned in this appeal because these workmen did not
agree with the settlement which others are agreed instead chose to question the punishment.. .. For the reasons stated above, this
appeal succeeds. The orders of the High Court are set aside that of the Labour Court is restored.41

In Onkar Nath Misra, the workman was dismissed after conducting enquiry for the misconduct of gheraoing the senior
officers for long hours and inflicting injuries on one of them during the gherao. Hegde J (for self, BP Singh and SB Sinha
JJ) of the Supreme Court, held that it was improper for the labour court to interfere with the order of dismissal.42

Misconduct Relating to Discipline

The word ‘discipline’ has been defined in Webster’s Third New International Dictionary to mean—‘behaviour in
accordance with the rules (as of an organisation)’, —‘Orderly conduct’—‘a rule or system of rules governing conduct or
action’—‘a body of laws relating to conduct’—‘an orderly or regular pattern of behaviour’. The word ‘disciplinary’, inter
alia, has been defined to mean ‘relating to discipline’. Discipline in one form or the other is an element of all organised
activity. Its function is to maintain order by setting limits to individual behaviour which may jeopardise the interests of the
organised establishment. The law of work discipline has three aspects:

There are first of all the sanctions imposed, external to the employment relationship, by the law of social security upon employees

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seeking some social security benefit in cases where they have been guilty of conduct which social security law seeks to deter or
penalise. Secondly, there may be civil or criminal remedies available to the employer in the courts and tribunals as a means of
disciplining the work force. Such remedies may arise out of the contract of employment itself, as in the case of a claim for damages
against an employee who acts in breach of his contract ...Thirdly, there are the disciplinary rules imposed by employers inside the
employment relationship.43

It is this third aspect of work discipline with which the Industrial adjudication or Industrial law is concerned. In Industrial
service, the norms of behaviour not only prescribed by the contract of service or the Standing Orders, but also expected a
workman to conform to the regular pattern of behaviour, working in an organised cross-section of the society i.e., industry,
is generally known as Industrial discipline. The action taken by the Industrial employer to enforce such discipline in his
establishment by censuring or punishing an employee by dismissing him or otherwise, for acts of wrong behaviour-
misconduct, is popularly known as ‘disciplinary action’. Industrial discipline is necessary for the well-ordered conduct of
the Industrial activity. Apart from the productivity of the industry, discipline is essential for the workers themselves and, in
fact, for the entire nation which depends upon the productivity of the Industrial activity in the country. Unfair and
wrongful discharge or dismissal of Industrial workmen as a measure of disciplinary action is one of the major causes of
Industrial disputes. Industrial adjudication has infused a great degree of legalism into the Industrial employment, though
the employers have always regarded the right of disciplinary action as a concomitant to the efficient attainment of the
objectives of Industrial activity. On the other hand, the workers and their unions have tended to regard protection from
arbitrary or unjustified disciplinary action as one of the most important functions of the trade union activity. Large scale
Industrial strife is apt to disturb Industrial peace and harmony and affect not only the production of particular plants or
industries, but may also have an adverse effect even on the national economy. The following acts particularly pertain to the
discipline in a factory or office: (i) Disobedience and/or Insubordination; (ii) Acts subversive of Discipline; (iii) Riotous or
Disorderly Behaviour; and (iv) Damage to Property or Reputation.

(i) Disobedience and/or Insubordination

The word ‘insubordination’ means unwillingness to submit to authority; disobedience to orders; infraction of rules, or
generally disaffected attitude towards authority.44 The word ‘disobedience’ means refusal to obey or negligence in obeying
a command; violation or disregard of a rule or prohibition. For instance, where an employer orders an employee that he
should disclose the names of the members of superior staff who were in fault, it is the duty of the workman to comply with
the order and his refusal to comply with the order will constitute the misconduct of disobedience.45 The Concise Oxford
Dictionary gives the meaning of ‘insubordinate’ as ‘disobedient, rebellious’. The two meanings given by the dictionary do
not mean that only a rebellious conduct would amount to insubordination but even disobedient conduct would amount to
insubordination. The Random House Dictionary gives the meaning of ‘insubordination’ as ‘not submitting to authority;
disobedient, one who is insubordinate’. These meanings would indicate that any person who is ‘disobedient’ becomes
‘insubordinate’ and his conduct amounts to ‘insubordination’. Therefore, where a workman disobeys a lawful order, he can
be said to be guilty of ‘insubordination’ and it need hardly be stated that a misconduct of disobedience and insubordination
would also amount to indiscipline. In American Words and Phrases, the word ‘insubordination’ has been defined to mean
‘insubordination in a civil service implies intentional, wilful disobedience. Insubordination can be rightly charged against a
police officer only upon refusal to obey some order which a superior officer is entitled to give and have it obeyed.
Insubordination of employee imports wilful disregard of express or implied direction and refusal to obey reasonable
orders, and when established, warrants his discharge.’46 An employee must obey all lawful orders given to him by his
employer. Whether an order is lawful or not depends first upon whether the terms of the contract enable the employer to
give such an order, and secondly, in the absence of any express provision, upon the character of the employment’.47 It is
the duty of the workman to comply with the lawful order of the employer because obedience of superior officers and
loyalty to the management are inherent in the jural relationship of master and servant and they need not be prescribed.48

There is no doubt that an employee however old and senior in service has no right to defy the orders of his superiors
whatever his grievance in that behalf.49 A subordinate officer is, therefore, duty bound to obey the lawful order of a
superior officer. The concept of obedience is implicit in the fact that officer receiving the order is subordinate to the officer
giving the order and a lawful order has to be obeyed, unless there is good justification for not complying with such a
lawful order. It is this conduct of declining to obey an order which not only results in disobedience but the conduct of
workman would also amount to insubordination.50Though the concept of insubordination or disobedience do considerably
overlap, they have also certain distinguishing features. For instance, deliberate refusal to obey the orders of the authority
will also constitute insubordination but the negligence in obeying the order will be an act of disobedience though it may
fall within the connotation of the expression ‘insubordination’. Likewise, the expression ‘insubordination’ would include
defiance of persons in authority which may also fall within the connotation of disobedience, but it would also include
disorderly and riotous conduct which makes it impossible for the higher officers to discharge their duties properly and such
conduct may not be strictly disobedience of their order.51 Even when a workman is an active member or offce bearer of a

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union representing the workmen in an Industrial establishment, he is primarily an employee of the establishment. It is
therefore, his duty to answer all reasonable queries addressed to him by the management relating to his work. The fact that
he is an office bearer of a trade union does not confer immunity upon him from the performance of his duty and he cannot
be allowed to adopt a truculent attitude merely because of his holding the capacity of an office bearer of the union.
Persistent refusal by a workman to answer the queries addressed to him from his superiors would amount to
insubordination and breach of discipline and if the charge of such insubordination is proved, the workman would be liable
to disciplinary action.52 Wilful insubordination or disobedience of the employer’s orders, has therefore, been treated as a
serious misconduct in industrial law.53 Such insubordination or disobedience, whether alone or in combination with any
other, of a lawful or reasonable order of a superior, constitutes misconduct which may justify dismissal of the delinquent
employee.54 However, ‘the refusal to obey an order which does not properly relate to the character or capacity of the
service for which the workman is employed,55 or an order contrary to the contract of service,56 would not constitute
disobedience or insubordination. Hence, the refusal of a workman to do the work which he is not obliged to do, would not
constitute disobedience or insubordination.57

Similarly, the impossibility, illegality or ambiguity of the orders or mistake in the orders would be valid defence against
the charge of insubordination or disobedience of orders. For instance, refusal to obey an order, which involves a reasonable
apprehension of danger to the life or person of the workman or is an unlawful order which the workman is justified in
refusing to obey, would not justify dismissal for misconduct of insubordination or disobedience.58 Similarly, the refusal to
work on new equipment requiring intensive practical training for its operation would not constitute an act of
insubordination or disobedience.59 And the refusal of the employee to give in writing about certain events too would not
constitute the misconduct of insubordination.60 In Calcutta Jute (supra), it was held that though the cases of ‘disobedience’
and ‘insubordination’ may considerably overlap in certain cases, ‘insubordination’ and ‘disobedience’ would constitute
different categories of misconduct. In the instant case, the facts disclosed that the Standing Orders of the company
contemplated two types of misconduct: one, ‘wilful insubordination’ and other, ‘disobedience of any lawful and reasonable
orders’ of a superior. On a proper construction of the Standing Orders, the Supreme Court held that ‘insubordination’ was
not the same thing as ‘disobedience’ of the order of an officer directly under whom the workmen charged with misconduct
worked, as was obvious from the two separate heads of the misconduct. ‘Insubordination’ would include defiance of the
person in authority whether such persons were direct superiors of the workman or not and this head of misconduct also
would include a riotous conduct which made it impossible for the higher officers to discharge their duties properly. In
connection with this misconduct, Sarkar J, observed,

it was clearly an implied rule of the factory that higher officers would not be thwarted and prevented from bringing to the notice of
the management the wastefulness of the workman causing loss to the employer.61

In India Marine Service, the workman concerned was a clerk in the purchase department of the company and was working
under a superior officer. The officer took away from the desk of the concerned workman, the purchase estimate book
maintained by him for the purpose of checking the entries made by the workman therein. The workman, thereupon, got
infuriated and abused the officer in the presence of the entire staff and threatened him with violence and even after the
warning by the manager, the workman again repeated the threat to the superior officer. This conduct was held to be an act
of grave insubordination warranting punishment of dismissal.62 In Ananda Bazar Patrika, the militant attitude adopted by
the workman that he would assign to himself his duties and would take no orders from his superiors, was held to be an act
of insubordination and disobedience.63 In Tractors India, refusal on the part of the workman to receive written orders of
the employer was held to be an act of insubordination and a gross misconduct.64 In Caltex, breach of prohibition to smoke
while on duty in the vicinity of the place where an aircraft was being refuelled was held to be a misconduct of
disobedience of orders and an act subversive of discipline.65 In Laxmi Devi Sugar Mills, refusal by the workman, to answer
the questions put to him during the course of a domestic inquiry, was held to be an act of insubordination in breach of
discipline. The fact that the workman was an office bearer of the trade union would not confer any immunity on him to
breach the discipline, as he had to realise that first and foremost he was an employee and owed duty to answer to all
queries which were addressed to him.66

However, the question of signing a statement recorded during a domestic inquiry was held to be standing on a different
footing and a workman giving evidence in the course of domestic inquiry might, if he chooses, sign the report, but he could
not be compelled to do so and his refusal to sign the statement cannot be treated as a misconduct or disobedience of the
lawful orders of his employer.67 Refusal by the compositors in a newspaper office to do the work of ‘joining’ has been held
to be a misconduct of willful disobedience and insubordination.68 Refusal to disclose the names of the members of the
superior staff who were in fault when required by the employer is a misconduct of disobedience.69 Though the refusal to
obey a lawful order of transfer constitutes willful disobedience and insubordination,70 the refusal to obey an order of
transfer contrary to the contract would not constitute disobedience or insubordination.71 Disobedience of orders which are
not enforceable under any rule cannot be the basis of discharge or dismissal.72 The refusal of a workman to do a particular

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kind of new work given to him, which he is not accustomed to do and particularly when the refusal is on account of fear of
doing the work wrongly rather than to willfully disobey the order, would not constitute the misconduct of willful
disobedience warranting disciplinary action.73 Giving evidence in an Industrial adjudication which may be disbelieved by
the tribunal, cannot constitute misconduct of insubordination or disobedience.74 Again, in the absence of rules, requiring a
workman to appear before a particular doctor for medical examination, and the mere disobedience of the workman to
appear before such a doctor would not lead to the inference that he was pretending to be sick.75

The refusal of a bus driver to ply an over-crowded bus was held to be justified in view of the provision of the Motor
Vehicles Act.76 A ‘solitary and single instance’ will not amount to insubordination and ‘in order to prove insubordination
of this nature, there should be strong, cogent, clear evidence of various instances that the employee was not only in habit of
disobeying his superior, but it is his practice to behave towards them in an impertinent manner’. Then, only the charge of
insubordination in question can be taken into consideration along with other instances of habitual misbehaviour, insolent,
arrogant and impertinent manner.77 In Sarabhai Chemicals, the Bombay High Court distinguished Vadivelu on facts and
observed that the observations made therein could not be read as laying down a proposition that disciplinary proceedings
for misconduct can never be taken against an employee on a charge of ‘insubordination’ arising out of a solitary instance
of disobedience of a lawful order or in order for sustaining a charge of insubordination, there should be several and
repeated instances of disobedience. In the circumstances of this case, the refusal of the workman to obey the orders
requiring delivery of challans to be typed was an act of insubordination and gross indiscipline; hence the punishment of
dismissal was justified.78 In Banamali Palei, the Orissa High Court has upheld the validity of the dismissal of the workman
from service for disobedience of the order of transfer made after affording adequate opportunity to participate in the
inquiry.79 It is for the management to establish by relevant evidence that a particular act will constitute misconduct. In the
absence of such proof, the action based on such misconduct will not be sustainable. For instance, in Ram Bilash Goel, the
employer did not elicit information from witnesses as to whether working beyond a particular time constituted overtime,
and refusal to work after that time constituted misconduct. The failure to elicit this material information, therefore, resulted
in error of law apparent on the face of the record vitiating the inquiry and the finding of misconduct.80

In Biecco Lawrie, the facts briefly were: The workman was appointed as general mazdoor in the switch gear works of the
company and his duty, inter alia, was to bring materials from the shop rack to the working benches and afterwards to take
them to their respective racks. On the 04 August 1984, a charge sheet was issued against the respondent on charges of
major misconduct, namely, instigation, insubordination and using of abusive and filthy language against his superiors and
dilatory tactics, which constitute major misdemeanor in terms of standing orders of the company. After enquiry, he was
dismissed, which was affirmed by the industrial tribunal. On a remand from the High Court, the tribunal heard the dispute
again and passed an order holding that the dismissal was illegal and invalid, thus reversing its own earlier decision. The
High Court, having dismissed the writ petition filed by the management, the matter landed in Supreme Court. Quashing the
orders of the courts below, Tarun Chatterjee J (for self and Bedi J) of the Supreme Court, cited several decisions of
Supreme Court covering this particular aspect, and made certain significant observations on the limits imposed on
tribunals and High Courts on the power to interference with the punishment imposed by the employer, particularly, when it
is not harsh and is based on proved misconduct thus:

From a perusal of these observations, made in the aforesaid decisions of this Court as noted hereinabove, it is crystal clear that the
general trend of judicial decisions is to minimize the interference when the punishment is not harsh and definitely for charges that
are levelled against the respondent and in the instant matter, dismissal is absolutely not shocking to the conscience of the court.. ..
The learned Single Judge also misused the power vested in him by remanding back the matter to the Industrial Tribunal for
reconsideration when the charges were found to be proved. The Tribunal also erred in reversing its own decision on the same
evidence for which we fail to see as to how the same Forum can appreciate the same evidence differently. The arguments advanced
by the respondent that there was violation of the principles of natural justice does not stand true and if it does it was duly redressed
by the fresh inquiry conducted by the Tribunal after its order dated 9th of October, 1990.. .. The argument that the work assigned to
the respondent was not a part of his job, even if accepted does not entitle him to abuse his superiors and create an unhealthy
atmosphere where the remaining might just take a clue from the unruly behaviour and subsequently use it to the detriment of the
company. Further the letter by which he accepted all the charges sets up a strong proof against the respondent beyond which
nothing remains to be analyzed.. .. In view of our discussions made hereinabove, we are of the view that the impugned judgment
and order of the Division Bench of the High Court as well as of the learned Single Judge are liable to be set aside and the order of
dismissal passed against the respondent herein must be restored.81

The above observations of the learned judge put the records straight in the context of unabated disturbing awards of trial
courts, and even more irresponsible and reckless decisions of several High Courts in cases involving grave acts of
indiscipline. These dysfunctional trends on the part of labour courts, tribunals and the High Courts deserve to be squarely

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condemned in the strongest possible language and terms.

(ii) Acts Subversive of Discipline

The dictionary meaning of the word ‘subversive’ is ‘tending to subvert’ ‘having a tendency to overthrow, upset, or
destroy’.82The acts subversive of discipline are such acts as tend to subvert discipline or have tendency to overthrow, upset
or destroy discipline in an establishment. ‘An act subversive of discipline is far different from an act of indiscipline on the
part of a particular workman, and the expression ‘act subversive of discipline’ has got a wider impact and connotation, in
that the act must be capable of having an impact on or of impairing the discipline of the Industrial establishment as a
whole’.83 Broadly speaking, all acts which tend to destroy discipline would tantamount to ‘acts subversive of discipline’
which may include misconduct relating to duty, negligence, going on illegal strikes, go-slow, insubordination and
disobedience of orders, riotous and disorderly behaviour etc. but most of these acts of misconduct constitute separate heads
of misconduct by themselves and are treated as such in the Model Standing Order or the Standing Orders of particular
Industrial establishments. The expression ‘acts subversive of discipline’ in the Standing Orders is generally used in a
narrower sense, viz, such acts of workmen, which have the tendency or effect to disturb the peace and good order have,
generally been regarded as acts subversive of discipline.84 Though, it would be difficult to lay down any general rule as to
what acts are subversive of discipline amongst the employees, generally speaking; rowdy conduct in the course of working
hours; misbehaviour committed even outside working hours but within the precincts of the concern and directed towards
the employees of the said concern; the conduct proved against an employee which would render him not worthy of
employment, may constitute acts subversive of discipline tantamounting to misconduct. However, whether an act
subversive of discipline constituting misconduct will depend upon the circumstances of each case.85 The following acts
have been treated as acts subversive of discipline:

(a) writing a letter to the director of the company containing offensive remarks against him,86

(b) behaviour insulting and insubordinate to such a degree as to be incompatible with the continuance of the relation of
employer and employee,87
(c) abusing a superior officer by using vulgar and filthy language88 and use of immoderate language,89

(d) preferring a false complaint to police against a superior officer knowing it to be false with a view to bringing the
management into humiliation,90
(e) the act of wrongfully restraining and confining the manager by workmen with a view to making him concede to their
demands,91
(f) preventing a superior officer from discharging his duties towards the management,92

(g) sleeping in office while on duty,93

(h) rowdy conduct in the course of working hours, or in some cases, even outside the working hours but within the precincts
of the concern and directed towards the employees of the concern94 and
(i) constructing a pacca structure in the labour quarters contrary to the directions of the management and subsequent refusal
to dismantle the same in disobedience to the order of the management.95

In Rama Kant Misra, the Supreme Court held that an act of adopting threatening posture though would amount to ‘riotous
or disorderly behaviour’ it would not amount to an act ‘subversive of discipline’; ‘indiscreet, improper, abusive language
may show lack of culture but merely the use of such language on one occasion unconnected with any subsequent positive
action and not preceded by any blame-worthy conduct may be an act of misconduct subversive of discipline, but it may not
warrant the extreme penalty of dismissal.1 In Bharat Fritz Werner, the court held that the misconduct involving acts of
threatening the highest executive, viz, the president of the company with dire consequences, wrongly confining him in his
room and compelling him to withdraw a notice, constituted acts subversive of discipline on the part of the workmen.2 In
Ram Kishan, the court again emphasised:

When abusive language is used by anybody against a superior, it must be understood in the environment in which that person is
situated and the circumstances surrounding the event that led to the use of the abusive language. No strait-jacket formula could be
evolved in adjudging whether the abusive language in the given circumstances would warrant dismissal from service. Each case
has to be considered on its own facts.3

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In Syed Khader Mohiuddin, the use of intemperate language used by the delinquent in his explanation to the charge-sheet
was held to be an act of misconduct but the extreme penalty for the misconduct was held to be unwarranted.4 In Nanabhai
Parmar, a single judge of Gujarat High Court upheld the award of the labour court setting aside the order of dismissal and
ordering reinstatement without backwages.5It is legitimate for workmen to demand the removal of a particular person from
a particular post in an establishment on the basis that there are circumstances warranting his removal from that post.
Pursuant to this demand, if a workman makes a speech at a meeting held by the union criticising the attitude of an officer
and exhorts the workmen to agitate for his removal or passes a resolution demanding his removal, such action would not
amount to misconduct or insubordination nor would it be an act subversive of discipline6 but it would be an act of gross
misconduct to make a speech at a meeting of workmen which is inflammatory and tends to undermine the discipline of the
workmen or incite them to violence or breach of peace.7 In New Shorrock Mills, the facts were: a badli workman entered
the office of the Deputy Manager and started abusing him and threatened that the mill officers will not be safe outside the
mill and that he did not care if he had to go to jail for murder of four to five officers. A charge-sheet was issued and after
conducting enquiry, the management, instead of dismissing, took a lenient view and discharged him from service. The
labour court passed an order dated 22 June 1980 and, inter alia, held as follows:

(a) That the charge against the respondent was neither vague nor unclear:

(b) That the finding of the Departmental Enquiry was legal and proper;

(c) That the order of discharge was not passed by way of victimisation;

(d) That the Departmental Enquiry had been conducted legally and properly and the respondent was offered reasonable
opportunity of hearing;
(e) That in passing the order of discharge, the appellant management had not acted outside the scope of the enquiry;
(f) That the respondent workman had seriously misbehaved with his superior officers and was thus guilty of misconduct;

(g) That the finding of misconduct reached in the enquiry was neither perverse nor baseless but was proved on the basis of
evidence on record.

Having held that the disciplinary action was foolproof, the labour court surprisingly ordered reinstatement on the ground
that the discharge from service was disproportionate. In appeal, quashing the order of labour court to the extent of
reinstatement, Kirpal J (for self and Verma J) of the Supreme Court observed:

It appears to us that the Labour Court completely misdirected itself in ordering the respondent’s reinstatement with forty per cent
back wages. The Labour Court was exercising jurisdiction under Section 78 of the Bombay Industrial Relations Act 1946. It had
the jurisdiction, inter alia, to decide the disputes regarding the propriety and legality of an order passed by an employer acting or
purporting to act under the Standing Orders. The Labour Court, in the present case, having come to the conclusion that the finding
of the departmental inquiry was legal, and proper, respondent’s order of discharge was not by way of victimisation and that the
respondent workman had seriously misbehaved and was thus guilty of misconduct, ought not to have interfered with the
punishment which was awarded, in the manner it did. This is not a case where the court could come to the conclusion that the
punishment which was awarded was shockingly disproportionate to the employee’s conduct and his past record. The Labour Court
completely overlooked the fact that even prior to the incident in question the respondent had misconducted himself on several
occasions and had been punished. According to the appellant there were at least three other instances where the respondent had
misconducted himself and that he had failed to improve his conduct despite his assurances from time to time. Another aspect which
was overlooked by the Labour Court was that on the finding of the Inquiry officer that the respondent had misbehaved with his
superior officer and was guilty of misconduct, the appellant could have dismissed the respondent from service. The appellant chose
not to do so. Instead it passed on order of discharging the respondent from service. Lesser punishment having been given by the
management itself there was, in our opinion, no justifiable reason for the Labour Court to have set aside the punishment so
awarded. We are unable to accept that the punishment imposed by the management was in any way disproportionate to warrant
interference by the Labour Court. The direction of the Labour Court ordering reinstatement of the respondent with forty per cent
back wages was clearly unwarranted.8 (Italics supplied)

In Mahindra & Mahindra, Hegde J (for self, Chatterjee and Balasubramanian JJ) of the Supreme Court observed:

It is no doubt true that after introduction of Section 11-A in the Industrial Disputes Act, certain amount of discretion is vested with
the Labour Court/Industrial Tribunal in interfering with the quantum of punishment awarded by the management where the
workman concerned is found guilty of misconduct. The said area of discretion has been very well defined by the various judgments

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of this Court referred to hereinabove and it is certainly not unlimited as has been observed by the Division Bench of the High
Court. The discretion which can be exercised under Section 11-A is available only on the existence of certain factors like
punishment being disproportionate to the gravity of misconduct so as to disturb the conscience of the Court, or the existence of any
mitigating circumstances which require the reduction of the sentence, or the past conduct of the workman which may persuade the
Labour Court to reduce the punishment. In the absence of any such factor existing, the Labour Court cannot by way of sympathy
alone exercise the power under Section 11-A of the Act and reduce the punishment. As noticed hereinabove at least in two of the
cases cited before us i.e. Orissa Cement Ltd. and New Shorrock Mills, this Court held : “Punishment of dismissal for using of
abusive language cannot be held to be disproportionate.” In this case all the forums below have held that the language used by the
workman was filthy. We too are of the opinion that the language used by the workman is such that it cannot be tolerated by any
civilised society. Use of such abusive language against a superior officer, that too not once but twice, in the presence of his
subordinates cannot be termed to be an indiscipline calling for lesser punishment in the absence of any extenuating fact or referred
to hereinabove.9

The act or omission, however, resulting from the disobedience, must have some connection with the affairs of the
establishment in that one of the consequences of such act or omission would be to affect the smooth relationship between
the labour and management or between the groups of workmen or be generally subversive of discipline or disturb the
peace in the establishment.10If the act complained of does not relate to the discipline in the employer’s establishment, for
instance, a private quarrel between an employee of an establishment and another citizen, outside the factory premises,
would not fall within the category of misconduct tantamounting to an act ‘subversive of discipline,11but if the act relates to
or subverts the discipline in the establishment even though committed outside, the act would be subversive of the
discipline of the establishment. This point is illustrated in the decision of the Supreme Court in Mulchandani, in which the
relevant Standing Order provided that ‘commission of any act subversive of discipline or good behaviour within the
premises or precincts of the establishment’, would constitute misconduct. The labour court took the view that alleged
assault was not covered by the Standing Order as it had taken place in a railway train outside the premises or precincts of
the establishment. Disagreeing with this view, the Supreme Court observed that on a plain reading of the clause the words
‘within the premises or precincts of the establishment’ referred not to the place where the act, which is subversive of
discipline or good-behaviour, is committed but where the consequence of such act manifests itself. The act wherever
committed, if it has the effect of subverting the discipline or good-behaviour within the premises or precincts of the
establishment, will amount to an act of misconduct subversive of discipline.12 In Hindustan Aeronautics, the relevant
standing order made ‘gambling and money-lending or doing another private business within the company’s premises, a
punishable act of misconduct. It was contended that it was only ‘money-lending’ inside the company’s premises and not
receiving money already lent outside the premises and, hence, the charge under the Standing Order was not sustainable.
Repelling the contention of the workman, the learned judge held that the act of paying money as loan to any other person
as also collecting repayment, both fell within the expression ‘money-lending’. Since, admittedly, the workman had
collected the repayment within the factory premises, it constituted a misconduct within the meaning of the Standing Order.
The court rejected the further contention on behalf of the workmen that in order to constitute misconduct, ‘money-lending’
should be done as a regular business, and held that even a single transaction of money-lending would amount to
misconduct.13However, the misappropriation of funds or fabrication of accounts of a society, by an employee of a
company, which had no financial interest in the society even though it provided certain amenities to the society, was held
not to be an act subversive of discipline against the management of the company.14

(iii) Riotous and Disorderly Behaviour

Riotous and disorderly behaviour is one of the heads of misconduct under the Model Standing Orders in Sch 1 to the
Industrial Employment (Standing Orders) Rules, 1946 framed under the Industrial Employment (Standing Orders) Act,
1946. The Standing Orders framed by the Industrial employers with respect to their establishments also generally include
‘riotous and disorderly behaviour’ committed on the premises of the establishment or in the vicinity thereof during the
working hours or otherwise as a misconduct. The expression ‘riotous and disorderly behaviour’ is very wide in its scope. It
covers acts of committing nuisance on one hand and the acts of assault and riots on the other. Fighting, assaulting, abusing,
drunkenness, etc, on the premises of an establishment during duty hours are some of common instances of riotous or
disorderly behaviour’.15 In the absence of Standing Orders, it would be open to the employer to consider reasonably what
conduct can be properly treated as misconduct and it is difficult to lay down, any general rule in respect of this problem.
Acts which are subversive of discipline being of riotous and disorderly nature amongst the employees would constitute
misconduct. Rowdy conduct in the course of working hours would constitute misconduct; misbehaviour even outside
working hours within the precincts of a concern and directed towards an employee of that concern may, in certain cases,
constitute misconduct, if the conduct proved against the employee is of such a character that he would not be regarded as
worthy of employment, it may in certain circumstances, be liable to be called misconduct. What constitutes the misconduct
or ‘riotous or disorderly behaviour’ would depend on the circumstances of each case. When there are Standing Orders,

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there would be no difficulty because they generally define the misconduct but in the absence of Standing Orders, the
question will have to be dealt with reasonably and in accordance with common sense. 16 If the superior officers are
assaulted by the workmen, it would be impossible for them to discharge their duties properly.17 Participating in an assault
on an officer of the employer or his manager would constitute misconduct of riotous or disorderly character for which the
punishment of discharge or dismissal may be warranted.18 Likewise, raising of provocative and abusive slogans in the
premises of the workshop would constitute misconduct of riotous and disorderly behaviour.19

Howsoever wide the scope of the expressions used in a particular Standing Order making riotous or disorderly behaviour
as a head of misconduct, it must be shown that such behaviour has some rational connection with the employment of the
assailant or the victim.20Generally, the Standing Orders make ‘riotous or disorderly behaviour’ committed during office
hours in the premises of the establishment as misconduct. In such cases, whether a particular act of ‘riotous and disorderly
behaviour’ would fall within the ambit of the Standing Orders, will depend on the construction of the order. However, in
certain cases, particularly where there are no Standing Orders, acts of ‘riotous and disorderly behaviour’ committed even
beyond the working hours and outside the premises of the establishment may also constitute misconduct provided that
there is a rational connection of the act with the employment of the assailant and the victim. Even under the pristine law of
master and servant, a delinquent workman could not escape the consequences of his misconduct for the only reason that it
was committed outside the working premises. For instance, a workman who carries the money of his master to the bank
situated outside the factory premises and misappropriates it while outside the boundaries of the factory premises, cannot be
heard to say that there was no misconduct at all as the act attributed against him was just outside the factory gate. On the
other hand, there can be extreme cases where some act totally unconnected with the employer-employee relationship, but
amounting to one of the offences as provided by statutory provisions such as drunken brawl, may not be appropriately
constituted as an Industrial misconduct. Actions encroaching into the area of crimes may expose the employee to the
process of ordinary criminal law though it may not appropriately fall in the disciplinary jurisdiction of an industry. In
between, there may be many cases falling in the grey area where the contours are hazy and consequently, rendering the
decision difficult.21Therefore, whether any such act will constitute misconduct justifying disciplinary action would depend
upon the facts and circumstances of each case.22

What constitutes establishment or its vicinity would depend upon the facts and circumstances of each case. In Central
India Coalfields, the workman was dismissed for the misconduct of ‘drunkenness fighting, riotous or disorderly or
indecent behaviour in the quarters of the workers attached to a colliery. Though the Industrial tribunal found the workman
guilty of the misconduct in terms of the relevant Standing Order, it set aside the order of dismissal in view of the fact that
the misconduct had taken place outside the colliery premises where he was discharging his duties and also beyond the
working hours. In appeal, the Supreme Court held that normally the Standing Order would apply to the behaviour on the
premises where the workman discharged their duties and during the hours of their work and if the quarrel took place
between workmen beyond the working hours and away from the colliery premises, that would be a private matter which
may not fall within the relevant Standing Order. However, in view of the fact that the incident took place in the quarters at
a short distance from the colliery and the fact that the conduct of the workman clearly amounted both to drunkenness and
riotous and disorderly behaviour, the court upheld the dismissal and set aside the award of the tribunal.23 On the other
hand, in Agnani, the Supreme Court upheld the award of the tribunal setting aside the dismissal of the workman for having
indulged in abusive and vulgar language and creating a riotous scene in a provision store in the colony of the tribune trust.
The court observed that it was plain from the language of the Standing Order which provided that if an employee causes or
threatens to cause mental and/or physical pain or injury to other employees in the trust’s estate, it would be an act of
misconduct entailing dismissal and that the misconduct proved against the workman did not fall under the Standing Order
because the owner of the provision store was not an employee of the tribune. Speaking for the court, Gajendragadkar J
observed:

It may, however, be relevant to observe that it would be imprudent and unreasonable on the part of the employer to attempt to
improve the moral or ethical tone of his employees, conduct in relation to strangers not employed in his concern by the use of the
coercive process of disciplinary jurisdiction.24

In Tata Oil Mills, though the court reiterated that it would be unreasonable to include within the relevant Standing Order
any riotous behaviour ‘outside the factory’ which was the result of a purely private and individual dispute, it evolved the
rule to bring certain acts of misconduct of riotous and disorderly behaviour within the ambit of the relevant Standing
Order, that the management should show that the disorderly or riotous behaviour had some ‘rational connection’ with the
employment of the assailant and the victim. In this case, two workmen were dismissed for the misconduct of way-laying
and assaulting the charge-man of the soap plant of the company’s factory at Tatapuram while he was returning home after
his duty in the second shift. The court held that it was quite clear that the assault committed by the delinquent workman
was not a purely private or individual matter as it was committed because the assaulted workman was supporting the plan
of the company for more production. The assault, therefore, was committed with the motive to terrorise the workman

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against supporting the company’s incentive plant for more production, and so was an act subversive of discipline.25 In
Mulchandani, the relevant Standing Order provided that the commission of any ‘act subversive of discipline or good
behaviour within the premises or precincts of the establishment would constitute an act of misconduct. In this case, the
delinquent workman was dismissed from service for assaulting his superior officer in the train on his way from the factory
to his house after the day’s work. On behalf of the workman, it was contended before the Supreme Court that the alleged
assault having taken place in the train which was obviously outside the ‘premises or precincts’ of the establishment was
not covered by the relevant Standing Order. The Supreme Court held that on a plain reading, the expression ‘within the
premises or precincts of the establishment’ refers not to the place where the act subversive of discipline of good behaviour
is committed but where the consequence of such an act manifests itself. In other words, an act wherever committed, if it
has the effect of subverting discipline or good behaviour within the precincts of the establishment, will amount to
misconduct. The court rejected the contention that the Standing Order leaves out of its scope an act committed outside
though it may result in subversion of discipline or good behaviour within the premises or precincts of the establishment in
question as such a construction would be quite unreasonable.26

In Glaxo Laboratories, Desai J took a diametrically opposite view from the one taken by it in Tata Oil Mills case and
Mulchandani’s case. The facts of these cases are more or less similar to this case. In this case, the court set aside the
dismissal of the delinquent workman who was dismissed for manhandling some other workmen of the company in a bus
chartered by the employer company for the use of the workmen commuting between the factory and the city. The relevant
Standing Order of the company, inter alia, made the commission of such acts ‘committed within the premises or precincts
of the establishment’ as misconduct entailing dismissal. In the first instance, the court has sought to draw a distinction
between the language of the Standing Order in Mulchandani’s case which uses the expression ‘within the premises or
precincts of the establishment’ and that of the Standing Order in Glaxo Laboratories, which uses the expression ‘within the
premises of the establishment or in the vicinity thereof’. The distinction, if any, is as between tweedledee and tweedledum.
Then, the court, ignored the principles laid down in the earlier dicta and has sought to rest its holding on the principle of
strict construction of penal statutes observing that in that case, the court had to put a ‘wide construction on a penal measure
but did not choose to set out its reasons for departing from the well-established principle that penal statutes generally
receive a strict construction’. Justice Desai observed:

The employer has hardly any extra territorial jurisdiction. He is not the custodian of general law and order situation nor the Guru or
mentor of his workman for their well regulated cultural advancement. If the power to regulate the behaviour of the workmen
outside the duty hours and at any place wherever they may be was conferred upon the employer, contract of service may be
reduced to contract of slavery. 27

Then, with a view to make it ‘abundantly clear and incontrovertible’ and in order to avoid any ambiguity being raised in
future and a controversial interpretation question being raised, the court stated the principle that ‘the casual connection in
order to provide linkage between the alleged act of misconduct and employment must be real and substantial, immediate
and proximate and not remote and tenuous’. The principle stated by the court is ambivalent. Its application to the fact-
situation of the case is far from being correct. This decision does not lay down correct law. The consensus of judicial dicta
has been correctly summed up by the court in Mulchandani. Glaxo case is in direct conflict with Mulchandani. The
consequences of Glaxo may be that any officer or worker of an employer can by way-laid, man-handled, assaulted and
even murdered by the disgruntled workmen with impunity as soon as he goes out of the premises, precincts or vicinity of
the establishment. It is with a view to avoid situations like this that Mulchandani’s case had correctly adumbrated the
principle that the expression ‘within the premises or precincts of the establishment’ refers not only to the actual place
where the act of misconduct is committed but also to the place where the consequences of such an act manifests itself. In
Kalyani Steel, the Bombay High Court rejected the contention on behalf of the workman that the Glaxo Laboratories case
overruled Mulchandani, therefore to fall within the ambit of the relevant Standing Order, the act subversive of discipline
must necessarily be committed within the premises of the establishment, and observed that there was no conflict between
the two judgments of the Supreme Court and that a proper reading of Glaxo case, would show that the ratio in the case of
Mulchandani was emphatically reiterated.28 A similar view has been taken by the Kerala High Court in BPL Systems.29

Where it was established that the workmen concerned formed themselves into an unlawful assembly, armed with deadly
weapons, assaulted managing staff, the sole fact that the General Manager, even after suffering head injury caused by a
lathi, did not die could not be said to be a mitigating circumstance justifying the reduction of the punishment of dismissal.
Assault of such a nature is gross misconduct and in the given situation demoralises managing officials. The order of the
tribunal substituting the order of dismissal with stoppage of one increment, and directing reinstatement without backwages
is untenable and is liable to be set aside.30 In a case involving riotous and disorderly behaviour, wherein the enquiry officer
had, after appreciating evidence available on record, come to the conclusion that the charges were proved, the labour court
set aside the order of dismissal on the ground that the enquiry officer had not examined independent witnesses. The High
Court too upheld the order of the labour court. Quashing the orders of the courts below, the Supreme Court Ashok Bhan J

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held that the labour court fell into a factual and legal error in setting aside the findings recorded by the domestic tribunal
and so also the High Court, and restored the dismissal ordered by the employer.31 In T Sreekantan, the facts were: the
respondent workman, who was working as a typist-cum-clerk in the petitioner-bank, behaved in a riotous, disorderly and
indecent manner towards a co-worker and threatened him of dire consequences including to his life in the presence of
higher officials, colleagues and customers. He was charge-sheeted and eventually dismissed after conducting domestic
enquiry. The labour court, while recording a finding that the disciplinary action was in order and that the misconduct
alleged and proved against the workman was a major misconduct, reduced the punishment on the ground that dismissal
was ‘shockingly disproportionate’. Quashing the order of the labour court and restoring the dismissal ordered by the bank,
Ramachandra Menon J, of the Kerala High Court observed:

It is true that the power under Section 11-A enables the Labour Court or Industrial Tribunal to vary, alter or modify the punishment
imposed by the Management even after sustaining the validity of the enquiry, if the punishment imposed is shockingly
disproportionate. Referring to the scope of judicial review exercisable by the High Court, it has been made clear by the Apex Court
on many an occasion that such power shall not be read and misunderstood as a power of appeal and that, it is exercisable only
when the course adopted by the Management would not have been pursued by any person of reasonable prudence and conscience
so as to make it ‘shockingly disproportionate’.. .. It has been observed in paragraph No.10 [of the award] that that the charge was
for ‘major misconduct’ and that the disciplinary authority is definitely justified in imposing a ‘major punishment’. On the next
breath, the second respondent states that the misconduct in the present case cannot however be termed as a grave one as there was
no misappropriation of money or fraud, which shows that the second respondent is having some misconceived idea that unless and
until a misconduct involving misappropriation of funds or any fraud is involved, nobody can be inflicted with the punishment of
dismissal.. .. The specific circumstance for interference contemplated under Section 11-A of the Act is that the punishment should
be ‘shockingly disproportionate’; i.e., it should evoke some sense of ‘shock’ to the conscience in relation to the gravity of the
proven misconduct. Considering the same, no such inference could be drawn in view of the observation of the second respondent
in the previous sentence that the charge was for ‘major misconduct’ and that the disciplinary authority was definitely justified in
imposing major punishment. The second respondent also arrived at a finding that the conduct on the part of the worker made him
to be sent out from the service and that he was no longer liable to be continued in the service of the Bank. It is after justifying the
said extent of the finding arrived at by the Management, that the second respondent sought to substitute the punishment of
‘dismissal’ with that of ‘discharge’ with all superannuation benefits; thus enabling the worker to simply go away with all service
benefits including pension. The course pursued by the second respondent [labour court, here] appears to be rather puerile by
extending misplaced sympathy which cannot be held as correct or sustainable.. .32

In Madhavsinh Solanki, the brief facts were: a daily wager was dismissed after conducting enquiry for a misconduct
involving unruly behaviour, interrupting enquiry proceedings, burning official documents, etc. The labour court ordered
reinstatement despite recording a finding that the disciplinary action was in order. Setting aside the order of labour court,
Sahai J (for self and Shah J) of the Gujarat High Court observed that while exercising jurisdiction, the labour court could
not act as an appellate body, and that the discretion exercised by it should be judicious and not whimsical. The learned
judge further held that past record of service could not be a ground to condone serious misconduct of the kind that was
established in the case.33 Where the charge-sheet did not disclose that the workman used filthy language against the
superior, but only mention that he used inappropriate language, the punishment of dismissal was disproportionate to the
misconduct.34

(iv) Damage to Property and Reputation

Willful damage to the employer’s property, goods or reputation is therefore, usually made misconduct under the Standing
Orders of Industrial establishments. The word ‘willful’ means ‘deliberate’, ‘full of desire to see one’s own wishes or plans
fulfilled’. The conduct of a workman, in handling his employer’s property which indicates that he is unfit for a position of
trust and confidence may justify the employer in dismissing him.35Hence, a willful act is such an act as is done for a
purpose. It is done intentionally and not by accident. It is deliberately done; so compulsion, ignorance or accident is not an
excuse.36 If, therefore, an employee either deliberately or negligently damages the employer’s property or reputation, he
will expose himself to disciplinary action for the misconduct. Deliberate infliction of harm or damage to the employer’s
business with the intent to cause him loss is also known by the name of ‘sabotage’, which is included in the list of
misconducts in the Standing Orders. It may consist of deliberately disrupting the production by tampering with or
damaging machinery or turning off electric current required for operation of the plant and machinery though a break-down
in machinery may by itself not prove that the operator is guilty of sabotage.37Deliberate spoiling of products to cause harm
is also sabotage. Likewise, deliberate disturbance in supply of power to the works by switching off electric power during
the working hours without permission or order of a superior is a misconduct of sabotage deserving the punishment of
dismissal unless the act is shown to have been done due to an error of judgment.38 The order of a superior to switch off
power or error of judgment in doing so would be a good defence to the charge of damage to property on account of

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switching off the electrical power. Making grave allegations against his employer which are false and which the workman
knows to be false or when he gives evidence against the employer which he knows to be untrue,39 will be damage to the
reputation of the employer.

The fact that the workman is an office bearer of the union of workers does not give him any immunity, as an office-bearer
of the union gets no better or higher right than its constituents.40 However, in such cases the employer has to establish that
the false charges were intentionally made and false evidence was intentionally given by the workman and the mere fact
that the evidence given by the employee has not been accepted by the authority is not a good ground for taking disciplinary
action against him.41 Imputing dishonesty or misuse of public funds by the management of a public concern amounts to
misconduct of subversion and damage to the reputation of the employer.42 In Hindustan GEC, the facts were: the workman
made a complaint in writing to the police that the assistant manager and the labour welfare officer of the company along
with others had broken open the lock of the room of a worker and thrown away his belongings when he was actually on
duty. After making investigations, the police reported that the workman had deliberately brought a false complaint and
consequently the complaint was dismissed by the sub-divisional officer. The management dismissed the workman from
service after finding him guilty of the act subversive of discipline in making serious and defamatory allegations against the
officers of the company, who had been put to great harassment and humiliation at the investigation by the police. The
dismissal was upheld as there was no justification for the workman to complain against the officers company’s officers. It
was further held that the workman’s action was subversive of discipline in undermining the authority of the officers and
thereby affecting the maintenance of peace and good order in that factory.43

Misconduct Relating to Morality

‘Morality’ means particular moral principles or rules of conduct, good and uprighteous behaviour and conduct conforming
to customs or accepted standard of a particular culture or group.44 Any behaviour of an Industrial employee which does not
conform to good and uprighteous conduct of a human being or the customs and accepted standards of a civilised society,
such as justice, honesty, modesty etc, may, apart from being a criminal offence, constitute an act of Industrial misconduct.
Acts involving moral turpitude are such acts which involve grave infringement of moral sentiments of the community or
are acts of base vileness and depravity in the private and social duties which a man owes to fellowmen for a society in
general, contrary to the accepted customary rule or right and duty between man and man. Devotion to duty is faithful
service which requires confirmation to the moral principles. Modern approaches to life have changed many ideals which
used to be held sacred and such approaches have also worked a change in our sense of the sublime but even then, the idea
of right and wrong has not been forgotten and the difference between honesty and dishonesty, fidelity and unfaithfulness
has not been wholly lost. Considerations of expediency may be irresistible at times but their evils may have merely to be
put up with and not to be extolled or prescribed as standards of life and work.45 A term will be implied in every contract of
Industrial employment that the employee will serve honestly and faithfully. This duty may be amplified and extended by
express agreement. However, it would be imprudent and unreasonable on the part of the employer to attempt to improve
the moral or ethical tone of his employee’s conduct in relation to strangers not employed in his concern by use of the
coercive process of disciplinary jurisdiction.46In other words, the act complained of must have some rational connection or
bearing on the contract of employment between the employer and the employee.

In Industrial law, the acts of theft, fraud and dishonesty, have been treated as acts of misconduct justifying dismissal apart
from being exposed to the penal liability under criminal law.47 The Model Standing Orders include ‘an act or conduct
inconsistent or incompatible with due or faithful discharge of his duty to the master and an ‘act of conduct of the employee
so grossly immoral that all reasonable men may say that he cannot be trusted’ in the scope of the expression ‘misconduct’.
The Standing Orders of Industrial employers also make such acts and conduct as ‘misconduct’ by including them in their
Standing Orders. There is, however, a distinction between such acts committed by an employee towards his employer and
towards others. In the former case, the misconduct will justify the disciplinary action of dismissal or discharge of a
workman by his employer, but in the latter case, a further consideration arises, whether the act is committed towards an
utter stranger or towards other persons employed by the employer. Criminal law makes special provisions for dealing with
delinquent servants who steal or embezzle the property of the employer or commit fraudulent or dishonest acts, such as
criminal breach of trust, misappropriation, falsification of accounts, etc. Some of the acts which will constitute misconduct
against morality have been discussed under the following sub-heads:

(i) Theft

The acts of theft, fraud and dishonesty committed towards utter strangers may not make a workman guilty of Industrial
misconduct unless he is convicted by a criminal court in which case the employer will have the justification to dismiss him
on the basis of the conviction itself, but in a case, where such an act is committed by a workman against his co-employees,
the employer may have the justification of treating it as an act of misconduct and discharge or dismiss him from service for
loss of confidence. In Kushal Bhan,48 the dismissal of a workman for stealing a bicycle of a co-workman was held

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justified. The offence of theft, committed by an employee, shows that he is dishonest and his suitability and reliability to
continue in service may be affected by that reason and will have a bearing on the contract of service. It will therefore be
good ground for dismissing him from service.49 It may, however, be noted that in inflicting the punishment for the
misconduct of theft, the nature of the theft is an important factor. In cases of minor or trifling acts of theft, the punishment
of dismissal from service may be unwarranted and unsustainable. For instance, in P Orr & Sons, the workman was
dismissed for theft of an empty oil tin worth thirty paise only. The employee had put in 24 years of service with no
warning or black-mark. The dismissal was set aside as the punishment was held to be too harsh and shockingly
disproportionate having regard to the nature of the offence.50 On the other hand, in Ruston & Hornsby, the Supreme Court
held that even an attempt to steal the employer’s property on the part of the workman who was a watchman was a serious
charge and deserved nothing short of the dismissal and the labour court was not justified in interfering with the punishment
in the circumstances of the case.51 Likewise, the Calcutta High Court in Wimco Sramik Union, held that the order of
dismissal passed against the workman for the proved misconduct of theft of the property valued at Rs 150 was not
unjustified as to warrant interference by tribunal under s 11A of the Act. It was observed that the offence of theft which
was committed by the employee concerned showed that he was dishonest and his suitability and reliability to continue in
service might be affected by that reason and would have a bearing on his contract of service and as such, the said offence
was a good ground for dismissing other workman from service. The fact that the workman had rendered a long period of
unblemished service and property stolen was worth Rs 150 did not justify lesser punishment. Furthermore, an attempt to
steal the employer’s property by the workman was a serious charge and deserved nothing short of dismissal. If he was
allowed to get away with lesser punishment, it would be very difficult for the employer to maintain discipline in the
organisation. After finding that the inquiry was fair and proper, there is no justification for interference with the order of
dismissal.52

(ii) Dishonesty and Fraud

Section 24 of the Indian Penal Code 1860 —‘Code’ in short) lays down the definition of the term ‘Dishonestly’ as
‘whoever does anything with the intention of causing a wrongful gain to one person or wrongful loss to another person is
said to do that thing ‘dishonestly’’. Section 25 of the Code lays down the definition of the term ‘fraudulently’ as ‘person is
said to do a thing fraudulently if he does that thing with the intent to defraud but not otherwise.’ ‘Dishonesty’ and ‘fraud’
have distinct meanings in law in contradistinction to their meanings in the ordinary parlance. Dishonesty requires an
intention to cause wrongful loss or wrongful gain of property, but it does not require deception or concealment as a
constituent element. On the other hand, fraud does not require an intention to cause a wrongful loss or wrongful gain to
somebody as there can be fraud even where there is no intention to cause pecuniary loss or damage to the person deceived.
Fraud, however, does require concealment or deception. The element of deception is an essential ingredient of fraud and it
is not necessary for dishonesty. In the words of Subba Rao J:

...the expression ‘defraud’ involves two elements, namely, deceit and injury to the person deceived. Injury is something other than
economic loss, ie, deprivation of property, whether movable or immovable, or of money and it will include any harm whatever
caused to any person in body, mind, reputation or such others. In short, it is a non-economic or non-pecuniary loss. A benefit or
advantage to the deceiver will almost always cause loss or detriment to the deceived. Even in those rare cases where there is a
benefit or advantage to the deceiver, but no corresponding loss to the deceived, the second condition is satisfied. 53

Dishonesty by lying idle is as much a misconduct as making any record or document which intentionally makes a false
statement. For instance, the case of making false entries in the official records, certifying receipt of more than what has, in
fact, been received or certifying receipt of goods which never were received at all, will constitute acts of dishonesty or
fraud. To forge or present a forged document, therefore, would also fall in this category of misconduct. For instance,
making an alteration or change in a document or paper so that it no longer reflects the truth, will constitute an act of fraud
or dishonesty. Likewise, malingering i.e, obtaining leave on false pretence of being ill, will constitute a misconduct. Any
other fraud, such as attempt to obtain wages for work done by others or wages for the period for which the employee did
not work at all, would constitute misconduct under this head. To obtain the employer’s property through a false statement
would also constitute an act of fraud warranting disciplinary action irrespective of the fact that such conduct is sufficient to
amount to a criminal—offence or not. Likewise, obtaining money through false book entries, a false travelling allowance
report, a wage taken for a fictitious worker or a receipt in the name of a fictitious person, would constitute fraudulent acts
warranting disciplinary action of dismissal. Intentional retention of the money of an employer by a workman which does
not belong to him even for a temporary period will tantamount to misappropriation of such money.54 Acts of dishonesty or
fraud constitute misconduct of a serious nature warranting the penalty of dismissal.55 It is, therefore, a grave misconduct on
the part of the employee holding responsible position whose duty is to supervise over the work of the others to deliberately
allow an outsider to impersonate as a permanent workman on the rolls of the employer and claim the benefit to which a
permanent workman is entitled.56

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To warrant the punishment of dismissal, the act must be of a grave nature as casual or minor acts which may technically
constitute fraud or dishonesty will not warrant severe punishment. Furthermore, such acts must have a rational connection
with the employment of the employee with his employer. The acts of theft or dishonesty which have no relation with
employment of the employee with his employer or which relate to outsiders, will generally not constitute misconduct for
the purposes of Industrial discipline as an employer is not the general custodian of the morals of his employees.57 In a case
where a bus conductor was dismissed from service for possessing an amount of Rs. 93/- in excess of the sale of tickets,
which was proved in the course of enquiry, the labour court set aside the order on the ground that the evidence of
passengers in the bus was not adduced and their statements not recorded to verify matter of either non-issuance of tickets
or issuance of tickets of lesser denomination, a single judge and the Division Bench of Karnataka High Court upheld the
award of the labour court. Quashing the orders of the courts below, Hegde J (for self and Sinha J) of the Supreme Court,
held that the interference with the order of dismissal was erroneous.58 In Hoti Lal, the facts disclosed that a conductor was
dismissed for carrying ticketless passengers and was also found in possession of old and used tickets. A division Bench
had set aside the termination on the ground that the amount involved was only Rs. 16/- and the loss suffered by the state
was not heavy. Quashing the order of the Division Bench, Pasayat J (for self and Patil J) of the Supreme Court observed:

It is not only the amount involved but the mental set up, the type of duty performed and similar relevant circumstances which go
into the decision-making process while considering whether the punishment is proportionate or disproportionate. If the charged
employee holds a position of trust where honesty and integrity are inbuilt requirements of functioning, it would not be proper to
deal with the matter leniently. Misconduct in such cases has to be dealt with iron hands. Where the person deals with public money
or is engaged in financial transactions or acts in a fiduciary capacity, highest degree of integrity and trust-worthiness is must and
unexceptionable. Judged in that background, conclusions of the Division Bench of the High Court do not appear to be proper. We
set aside the same and restore order of learned single Judge upholding order of dismissal.59

In Bank of India, an employee obtained employment in a public sector bank by furnishing a false caste certificate claiming
that he belonged to a Scheduled Caste. The High Court, in exercise of its writ jurisdiction, ordered his reinstatement on the
ground that the proceedings for the verification of caste certificate were not initiated within a reasonable period. Quashing
the order of the High Court, the Supreme Court held:

The order of termination does not suffer from any infirmity and the High Court should not have interfered with it. By giving
protection for even a limited period, the result would be that a person who has a legitimate claim shall be deprived of the benefits.
On the other hand, a person who has obtained it by illegitimate means would continue to enjoy it notwithstanding the clear finding
that he does not even have a shadow of right even to be considered for appointment.60 (para 13)

In V Ramana, where the facts disclosed that the bus conductor was guilty of professional misconduct in so far as he did not
issue tickets to the passengers at the boarding point nor did he collect the fare at the alighting point, and was further guilty
of not maintaining the records of tickets and fare, the order of dismissal could not be said to be disproportionate and the
action of management did not call for interference.61 In a case where the services of a bank employee of Regional Rural
Bank were terminated on ground that he had unauthorisedly withdrawn amount from bank, the High Court without
recording any reason as to how and why it found that the punishment shockingly disproportionate, ordered reinstatement of
the workman. In its order, it was found that there was no discussion on this aspect. Quashing the order of the High Court,
Pasayat J, of the Supreme Court held that the very discipline of an organization more particularly a bank is dependent upon
each of its officers and officers acting and operating within their allotted sphere. Acting beyond one’s authority is by itself
a breach of discipline and is a misconduct. The charges against the employee were not casual in nature and were serious.
These aspects do not appear to have been kept in view by the High Court. Mere expression that the punishment is
shockingly disproportionate would not meet the requirement of law. Even in respect of administrative orders.62 In Pallappa
Rao, the workman was charge-sheeted for accepting illegal gratification of Rs 950/- and cheating a consumer, and was
dismissed after conducting enquiry. The labour court directed his reinstatement. Quashing the order of the labour court,
NV Ramana J, of AP High Court observed that the charge against the workman was serious reflecting moral turpitude and
that the labour court did not assign any reason to show how the dismissal ordered by the employer was disproportionate.
The learned judge further observed that the discretion of labour court to interfere with the punishment, though wide, cannot
be exercised arbitrarily or fancifully.63 In Suresh R Bhokare, the employee was charge-sheeted for fraudulently obtaining
recommendation for appointment from social welfare department and was dismissed. The labour court upheld the
dismissal, which order was reversed by industrial court in a revision petition filed by the workman. The writ petition filed
by the management having been dismissed, the matter landed in the Supreme Court. On the basis of the conclusions
reached by the industrial court to the effect that, in the show cause notice, no basis was laid to show what was the nature of
fraud that was being attributed to the workman; that no particulars of the alleged fraud were given; and that the said

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pleadings did not even contain any allegation as to how the appellant was responsible for sending the so called fraudulent
proposal or what role did he play in such proposal being sent, the Supreme Court restored the order of the industrial court
and High Court directing reinstatement of the workman.64 In Bharat Heavy Electricals, a workman, having mortgaged the
title deeds of his property with the employer as a security, fraudulently took away the same and attempted to sell the
mortgaged property. In the course of the enquiry, the workman attempted to justify the removal of the documents by
producing fabricated documents. After enquiry, the workman was dismissed. The labour court, as is the usual practice with
most of them, gave an irresponsible verdict to the effect that the punishment was harsh in view of the fact that his past
record was clean and, on this view of the matter, directed reinstatement. Both the tiers of High Court approved the decision
of the labour court. Quashing the orders of the courts below, Hegde J (for self and Sinha J) of the Supreme Court held:

.. . the reasons given by the Labour Court to reduce the penalty are reasons which are not sufficient for the purpose of reducing the
sentence by using its discretionary power. The fact that the misconduct now alleged is the first misconduct again is no ground to
condone the misconduct. On the facts of this case as recorded by the Labour Court the loss of confidence is imminent, no finding
has been given by the courts below including Labour Court that either the fact of loss of confidence or the quantum of punishment
is so harsh as to be vindictive or shockingly disproportionate. Without such finding based on records interference with the award of
punishment in a domestic inquiry is impermissible. (para26). .. For the reasons stated above the appeals succeed. The impugned
orders to the extent they direct the reinstatement of the respondent is set aside. The order of dismissal of the respondent made by
the appellant pursuant to the inquiry is upheld.65 (para 27).

In H Amaresh, the respondent-workman was employed as a conductor. He was found to be under influence of alcohol
while on duty, apart from not issuing tickets to the passengers and indulging in misappropriation of the money of the
corporation. He was charge-sheeted and finally dismissed after holding disciplinary enquiry. The misconduct of pilferage
was also proved. The labour court taking a lenient view of the misconduct, including pilferage on the ground that the
amount pilfered was petty, directed reinstatement with back wages. Having lost the case at both the tiers of the High Court,
the Corporation approached the Supreme Court. Quashing the orders of the courts below, Lakshmanan J (for self and Panta
J) of the Supreme Court held:

In our view, even short remittance amounts to misconduct and, therefore, applying the rulings of this Court, the impugned order
ought not to have been passed by the Division Bench ordering reinstatement. We, therefore, have no hesitation to set aside the
order passed by the learned Judges of the Division Bench and restore the order of dismissal of the respondent from service. It is
stated that pursuant to the order of the Labour Court the respondent was reinstated in service. Since there was no stay granted by
this Court the respondent had continued in service of the Corporation. In view of the law laid down by this Court and of the facts
and circumstances of this case, the respondent, in our opinion, has no legal right to continue in service any further. We, therefore,
direct the appellant-Corporation to immediately discharge the respondent from service. However, we make it clear that the salary
paid to the respondent and other emoluments during this period shall not be recovered from the respondent. We also make it further
clear that in view of the order of dismissal the respondent shall not be entitled to any further emoluments.. .. For the foregoing
reasons, we allow the appeal filed by the appellant-Corporation and set aside the orders passed by the Labour Court, learned
single Judge and also of the Division Bench as perverse and are against the proved facts and circumstances of the case.66 (Paras
23 & 24)

Although the charges in a departmental proceedings are not required to be proved like in a criminal trial i.e., beyond all
reasonable doubts, we cannot lose sight of the fact that the Enquiry Officer performs a quasi-judicial function, who upon
analysing the documents must arrive at a conclusion that there had been a preponderance of probability to prove the
charges on the basis of materials on record. While doing so, he cannot take into consideration any irrelevant fact. He
cannot refuse to consider the relevant facts. He cannot shift the burden of proof. He cannot reject the relevant testimony of
the witnesses only on the basis of surmises and conjectures. He cannot enquire into the allegations with which the
delinquent officer had not been charged with.67 In APSRTC, the facts were: an employee of the Corporation was found
involved in committing theft of property of the Corporation. The employee admitted his guilt. The act of theft, being a
serious misconduct, there was nothing wrong in the Corporation losing confidence in such an employee and the awarding
punishment of removal from service. The labour court too held that the removal from service was proper after taking into
consideration entire facts and circumstances of case. The AP High Court took a sympathetic view and ordered
reinstatement with continuity of service, after considering the past services of workman. Quashing the order of the High
Court, the Supreme Court held that the interference of the High Court with the order of labour court was improper and
observed that past conduct of workman is not relevant in departmental proceedings.68 In Roop Singh Negi, quashing the
dismissal, Sinha J (for self and Joseph J) of the Supreme Court held that suspicion, however high may be, can under no
circumstances be held to be a substitute for legal proof. The materials brought on record pointing out the guilt are required
to be proved. A decision must be arrived at on some evidence, which is legally admissible. The provisions of the Evidence

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Act may not be applicable in a departmental proceeding but the principles of natural justice are. As the report of the
Enquiry Officer was based on mere ipse dixit as also surmises and conjectures, the same could not have been sustained.
The inferences drawn by the Enquiry Officer apparently were not supported by any evidence. If the Enquiry Officer had
relied upon the confession made by the appellant, there was no reason as to why the order of discharge passed by the
Criminal Court on the basis of self-same evidence should not have been taken into consideration. Since the orders passed
by the disciplinary authority and appellate authority have severe civil consequences, appropriate reasons should be
assigned.69

In Chauhan Vajesinh, the facts disclosed that a conductor was dismissed, after enquiry, for not issuing tickets to 8
passengers though he had collected the fare from them, Rathod J of Gujarat High Court observed that the order passed by
the tribunal upholding dismissal need no interference in a writ proceeding. The learned judge discountenanced the
contention of the workman that the passengers were not examined in the domestic enquiry, and held that in a case
involving dishonesty and misappropriation, dismissal was the only punishment which could be imposed on the workman.70
Where the witnesses deposed that the delinquent workman had confessed to the commission of theft, and the delinquent
workman did not cross-examine the witnesses coupled with the further fact that the no plea was raised by the workman that
the said confession was made by him under duress, it is improper for the labour court to interfere with the findings of the
Inquiry Officer. The order of the labour court directing reinstatement is liable to be set aside.71 In Sarva UP Gramin Bank,
the Supreme Court held that the punishment imposed, reducing the salary of the employee in six stages permanently,
cannot be said to be disproportionate to the gravity of the charges proved against the respondent. The charges related to the
conduct of the respondent in a financial institution whereby, taking advantage of the official position, he attempted to
procure unlawful pecuniary benefits for himself. The charges related to misappropriation, fraud and irregularities with
regard to the maintenance of accounts. He had been siphoning off money belonging to the account holders. He was holding
a position of trust in the Bank, which he betrayed. The court further took notice of the fact that that the Bank had already
been sympathetic and lenient enough.72

(iii) Disloyalty

One of the basic requirements of what an employer would expect to be satisfied from an employee is loyalty towards him.
In other words, the employee is expected to promote the employer’s interest in connection with which he has been
employed and a necessary implication which must be engrafted on such a contract is that the servant undertook to serve his
master with ‘good faith’ and ‘fidelity’.73 The acts of making defamatory and false statements against the employer would
apart from being subversive of discipline, also constitute the misconduct of disloyalty towards the employer as the offence
constitutes willful harm to the employer.74 Likewise, to reveal an employer’s confidential information to unauthorised
persons, particularly when such persons are competitors or otherwise averse to the interests of the employer, who might
use it against him, would constitute a misconduct of disloyalty warranting disciplinary action as such an act by its very
nature would be dishonest. However, the loyalty that law expects of an employee is in connection with his employment.
An employee is not, however, expected to be loyal to all whims, vagaries, creeds or ideologies of the employer because
such things will have no connection with the contract of employment. The question whether a particular act of disloyalty
constitutes misconduct would depend upon the facts and circumstances of each case.

(iv) Corruption

Accepting bribes or illegal gratifications is a criminal offence against government employees. Accepting such
gratifications or bribes, by commercial or Industrial employees, though may not constitute a criminal offence, would
constitute a misconduct, ‘for gifts blind the eyes of the wise and change the words of the just’. The act of receiving bribes
or illegal gratifications constitute a sale by the employee of the information or discretion confided in him by the employer
for his benefit. Industrial employers, therefore, generally include acts of corruption, bribery and undue gratification as acts
of misconduct in their Standing Orders. Demanding bribe, accepting bribe as well as giving bribe are all acts of
misconduct.

(v) ‘Moral Turpitude’

‘Moral turpitude’ is an expression which is used in legal as also societal parlance to describe conduct which is inherently
base, vile, depraved or having any connection showing depravity.75 In fact, in the modern world, there are innumerable
offences for instance, relating to traffic rules, with which any person employed may become guilty of at any time. Such
offences do not involve ‘moral turpitude’. The expression ‘moral turpitude’ used in a statute, therefore, is not to receive the
narrow construction. Wherever conduct of the delinquent is contrary to honesty or is opposed to good morals, or is
unethical, it may safely be held that it involves ‘moral turpitude,.76 ‘That is why the law-makers have carefully
circumscribed the nature of the offence, the conviction therefore would have implication in the matter of employment and

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the only category of offences are those which invite shame on the person who became guilty, which shame will irradiate
on the institution which employs’.77

The term ‘moral turpitude’ by its very nature is somewhat nebulous because it involves an examination of an action in the
light of the prevailing moral norms. Unlike legal norms, moral norms are somewhat nebulous. They can vary from time to
time, from society to society and even from individual to individual. It is possible that an act which may be violative of
moral norms in one society, may be acceptable to another society. Therefore, in a given case, the act has to be judged in the
light of what one considers to be prevailing moral norms of the society in which such an act has been committed. Hence,
the act should not only be contrary to moral norms, it should also involve violation of the moral code in such a manner that
it indicates baseness or depravity of character.78 The Industrial employers generally include acts of moral turpitude in the
list of misconducts warranting disciplinary action. The expression ‘moral turpitude’ implies depravity and wickedness of
character or disposition of the person charged with the misconduct of moral turpitude.79Broadly speaking, acts of baseness,
vileness or depravity in private or social duties which a man owes to his fellowmen or to the society in general, contrary to
the accepted customary norms or right and duty between man and man, would constitute moral turpitude. The Allahabad
High Court, has laid down the following tests for determining as to whether a particular act involves moral turpitude:

(i) whether the act leading to a conviction was such as could shock the moral conscience of society in general,
(ii) whether the motive which led to the act was a base one, and

(iii) whether on account of the act having been committed the perpetrator could be considered to be of a depraved character or
a person who was to be looked down upon by the society? 80

As to whether a person has committed an offence involving moral turpitude; there are two ways of looking at the matter—
one is of considering the nature of the act done and the other of considering the nature of the offence punished under the
statutory provision.81 The question whether a particular act involves ‘moral turpitude’ or not would depend upon its own
facts and circumstances in which the offence was committed. In Pawan Kumar, the Government of Haryana while
considering the question of rehabilitation of ex-convicts took a policy decision, accepting the recommendations of the
Government of India that ex-convicts who were convicted for offences involving ‘moral turpitude’ should not be taken in
government service. A list of offences involving ‘moral turpitude’ which was prepared for information and guidance of the
authorities did not include the offence under s 294 IPC which deals with ‘obscene acts and songs’. This section makes any
person who does any obscene act in any public place or sings, recites or utters any obscene songs, ballad or words, in or
near any public place, is liable to imprisonment for a term extending up to 3 months or with fine or with both. In this case,
a fine of Rs 20 was imposed on the employee but from the records of the Chief Judicial Magistrate who had imposed the
fine it was not discernible as to whether the conviction was validly or legally recorded. The Supreme Court, deprecated the
action of the Government in having proceeded to adversely certify the character and antecedents of the employee on the
basis of the conviction per se to the effect that he was guilty of an act involving ‘moral turpitude’. Even assuming that the
conviction was not open to challenge at that stage, the court held that the courts below had failed to see that the act
complained of did not satisfy the tests laid down in the policy decision of the Government. Speaking for the court, Punchhi
J expressed his anguish thus:

We are rather unhappy to note that all the three courts below, even when invited to judge the matter in the said perspective, went
on to hold that the act/acts involved in conviction under s 294 IPC per se established ‘moral turpitude’. They should have been
sensitive to the changing perspectives and concepts of morality to appreciate the effect of s 294 on today’s society and its
standards, and its changing view of obscenity. The matter unfortunately was dealt with casually at all levels.82

Not content with that, the learned judge suggested law reform to the Parliament to take immediate remedial measures in
raising toleration limits with regard to petty offences especially when tried summarily and to make a provision that
punishment of fine up to a certain limit, say upto Rs 2000/- or so, on a summary/ordinary conviction, shall not be treated as
conviction at all for any purpose and all the more for entry into and retention in government service. This can brook no
delay, whatsoever. One wonders whether the law officers of the Government have drawn the attention of the Parliament at
all to this judicial recommendation. A person convicted for the offence of consuming liquor without a permit in violation
of the Prohibition Act cannot be said to have been convicted of an offence involving moral turpitude.83 the Kerala High
Court, in Saseendran Nair, observed that the question whether the act of issuing a cheque without sufficient funds will
involve element of ‘moral turpitude’ has to be considered de hors the element of cheating. Since, issuance of a cheque
without sufficient funds is not an offence unless it falls under s 415, IPC and also not generally regarded as morally wrong
or corrupt, it can be said that offence under s 138 of the Negotiable Instruments Act 1881 will not normally involve moral
turpitude.84 In this view of law, the court held that the discharge order passed against the employees under s 10 of the

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Banking Regulation Act 1949 on the ground of conviction for offence of issuing cheque without sufficient funds in the
account was improper. Similarly, the discharge of the workman, in Noor Ahmed, was held to be unjustified and invalid by
a single judge of the Andhra Pradesh High Court for the reason that it was not based on an offence involving moral
turpitude. In this case, before entering the services of the bank, the workman had been convicted under s 304A of IPC
which involves ‘moral turpitude’ and sentenced to one year’s rigorous imprisonment but the sentence was suspended under
s 4 of the Probation of Offenders Act 1958 and the sentence was not executed on account of good behaviour of the
workman. This fact was suppressed by the workman in the declaration made by him at the time of entering into the service.
The High Court held that since the sentence was not executed, the workman was not guilty of an offence involving moral
turpitude.85The correctness of this decision is not free from doubt. The suppression of the information relating to his
conviction under s 304A amounted to obtaining employment by a deceitful declaration. This was surely an act of
misconduct involving moral turpitude. The fact that the sentence on conviction under s 304A was not executed under the
Probation of Offenders Act 1958 was not a relevant consideration. In PGIMER v LC , the Punjab & Haryana High Court
upheld the dismissal of a Chowkidar in the Lady Doctor’s Hostel of PGI, Chandigarh, for the misconduct of creating
nuisance under the influence of liquor by undressing himself at the canteen of the Lady Doctor’s Hostel beyond the duty
hours because an employee is required to possess better norms with regard to the morality and was expected not to behave
in an unbecoming manner to the extent of vulgarity.86

PROCEDURE OF DISCIPLINARY ACTION

There is no procedure prescribed for disciplinary action, either in the Industrial Disputes Act 1947 or in the rules made
thereunder, which should be complied with before inflicting disciplinary punishment upon an industrial employee. Neither
the requirements of procedure which a trial court adopts nor the procedural safeguards crystallised under Art 311 of the
Constitution of India can be said to be strictly binding on the employer for his taking disciplinary action against an
industrial worker.87Nevertheless, the infusion of legal formalism into the law of work-discipline by industrial adjudication
has made the industrial employers aware of the restriction of law on their common law right to ‘hire and fire’. This has
also encouraged the workmen to challenge any unlawful act on the part of an employer in imposing a disciplinary action.
The rule that the case should be ‘heard in a judicial spirit and in accordance with the principles of substantial justice’,88 has
been infused as an essential concomitant of disciplinary procedure, even though there is no obligation to adopt the regular
forms of legal procedure. In all cases of detrimental action taken against a worker for misconduct, the employer has to
establish whether the action was taken for ‘just and sufficient reasons’. An industrial worker is always entitled to question
the propriety and justice of a punitive or detrimental action taken against him, in spite of any contract between the
employer and the worker, or the worker’s consent to suffer the said action.89 In Sur Enamel, Das Gupta J, observed that an
inquiry cannot be said to have been properly held unless:

(1) the employee proceeded against has been informed clearly of the charges levelled against him;

(2) the witnesses are examined—ordinarily in the presence of the employee—in respect of the charge;

(3) the employee is given a fair opportunity to cross-examine witnesses;

(4) he is given a fair opportunity to examine witnesses including himself in his defence if he so wishes on any relevant
matter; and
(5) the inquiry officer records his findings with reasons for the same in his report. 90

In Jai Bhagwan, the Supreme Court quashed the award of the tribunal which had upheld the termination of the service of
the workman without giving him the charge-sheet or holding any inquiry against him.91 But disciplinary proceedings can
be commenced or continued only against an employee as long as he is in the service of the employer. For instance, after
the retirement of the workman, there cannot be any disciplinary control over him. To allow employers to commence or
continue disciplinary proceedings against an employee after his retirement, would be destructive of the principles of social
and economic justice which the Constitution of India is designed to secure to all citizens. This will also be destructive of
the concept of relationship of employer and employee which does not exist after retirement of the employee.92

Preliminary Inquiry

Before framing the charges, the disciplinary authorities occasionally make a preliminary investigation or fact-finding
inquiry with a view to satisfy themselves whether any disciplinary action against the workman should be launched or not.
Such investigations are also loosely called ‘Preliminary Inquiries’. In such investigations there may be ex parte
examination or investigation and ex parte reports but these investigations do not form a part of the procedure of the
domestic inquiries. The depositions of the witnesses in such investigations, if any, or the reports of the investigators are

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meant merely for ascertaining whether there is any prima facie case justifying disciplinary proceedings. However, if the
reports of the preliminary inquiry are used against the delinquent workman, they must be properly proved in the course of
the domestic inquiry. In Shivabasappa (a case under Art 311), the Supreme Court held that if the deposition of a witness
recorded in the absence of a public servant in the course of the preliminary investigation is taken on record of the
departmental inquiry against such public servant and after supplying him with a copy of such deposition an opportunity is
given to him to cross-examine the witness who affirms, the truth of his statement already recorded, in a general way, that
would conform to the requirements of natural justice.93 In Kesoram Cotton Wanchoo J, observed:

The minimum that we shall expect where witnesses are not examined from the very beginning at the inquiry in the presence of the
person charged is that the person charged should be given a copy of the statements made by the witnesses which are to be used at
the inquiry well in advance before the inquiry begins and when we say that the copy of the statements should be given well in
advance, we mean that it should be given at least two days before the inquiry is to begin.94

In Khardah & Co, Gajendragadkar J emphasized:

unless there are compelling reasons to do so, the normal procedure should be followed and all evidence should be recorded in the
presence of the workman who stands charged with the commission of acts constituting misconduct. 1

Bhargava J, summed up the position thus:

The evidence, as indicated in these cases, should consist of statements made in the presence of the workman charged. An exception
was envisaged where the previous statement could be used after giving copies of that statement well in advance to the workman
charged, but with the further qualification that the previous statement must be affirmed as truthful in a general way when the
witness is actually examined in the presence of the workman. 2

However, if the preliminary reports do not form part of the evidence before the inquiry officer and are not relied on for
arriving at the findings of the domestic inquiry, it is not obligatory on the employer to disclose them and the omission to
disclose them would not be a non observance of the rules of natural justice in the course of the domestic inquiry.3 For the
purpose of starting the inquiry, the law does not require that the delinquent workman has to be supplied with the copies of
the reports made to the authorities or the management before the charge-sheet has been issued.4 Another interesting facet
of the preliminary inquiry was examined by the Supreme Court in Firestone, in which the workman complained that the
domestic inquiry was held immediately after the preliminary investigation and without taking his explanation in such
investigation and he was thus put at a disadvantage. Hidayatullah J, observed:

...although it may be desirable to call for such an explanation before serving a charge-sheet, there is no principle which compels
such a course. The calling for an explanation can only be with a view to making an inquiry unnecessary, where the explanation is
good, but in many cases it would be open to the criticism that the defence of the workman was being fished out. If after a
preliminary inquiry, there is prima facie reason to think that the workman was at fault, a charge-sheet setting out the details of the
allegations and the likely evidence may be issued without offending against any principle of justice and fair-play.5

In Atlas Copco, a single judge of the Bombay High Court observed:

.. . it may be open to the employer to make discreet inquiries behind the back of the employee as regards various aspects of his
mode of working in the company, but if any adverse order is to result from such inquiry, a due and necessary proceeding has got to
be held in which the employee concerned has got to be given appropriate opportunity to defend himself.6

The law with respect to preliminary inquiries can be stated thus: If the employer makes preliminary inquiry or
investigation for seeing a prima facie case in the allegations made against an industrial workman, it is not incumbent upon
him to call for the explanation of the workman in such preliminary inquiry or before serving the charge-sheet. On the other
hand, calling such an explanation in a preliminary inquiry stands the risk of criticism that the defence of the workman is
being fished out. It may, however, be desirable to hold such a preliminary inquiry for seeing whether there is a prima facie
reason to think that the workman is at fault. If as a result of such inquiry, the employer had reason to think that the
workman is at fault, charge-sheet setting out the details of allegations and the likely evidence, without offending against
any principles of justice and fair-play, may be served on-the workman but unless there are compelling reasons to do so,

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evidence recorded at the back of the workman in such a preliminary inquiry should not be used against him.

Charge-sheet

(i) Requirements of Charge-sheet

Charge-sheet is the charter of disciplinary action. The domestic inquiry commences with the service of the charge-sheet.7
In other words, before proceeding with the domestic inquiry against an offending employee, he must be informed clearly,
precisely and accurately of the charges levelled against him.8 It is the duty of the employer to indicate to the delinquent
employee not only the precise nature of the charges, but also the documents, if any, upon which the charges are based. This
is all the more necessary where the charges are of a general nature and pertain to accounts maintained over a period of
time.9 The charge-sheet should specifically set out all charges which the workman is called upon to show-cause against and
should also state all relevant particulars without which he cannot defend himself.10 The object of this requirement is that
the delinquent workman must know what he is charged with and have the amplest opportunity to meet the charge.11 Fair
hearing presupposes a precise and definite catalogue of charges, so that the person charged may understand and effectively
meet them. If the charges are imprecise or indefinite, the person charged would not be able to understand them and defend
himself, effectively, and the resulting inquiry would not be a fair and just inquiry.12 The charge-sheet must be in writing
and should not be vague.13 After serving the charge-sheet, the delinquent workman should further be given sufficient
opportunity enabling him to give a proper explanation and defend himself.14 The employer cannot justify his action on any
grounds other than those contained in the charge-sheet.15 If the charges are vague and the workman has no opportunity to
reply to them, and the particulars of such charges are also not disclosed to the workman, the inquiry will not be in
conformity with the rules of natural justice.16 Any amount of evidence led in the inquiry is no substitute for a charge-sheet
clearly setting forth allegations, with sufficient precision, so as to enable the employee to defend himself. Any charge-sheet
which fails to comply with this requirement of the principles of natural justice is no charge-sheet at all.17

Where the charge is quite clear even though the misconduct is not mentioned by a specific name, the order will not be
invalid. For instance, where though the charge-sheet did not specifically use the words ‘go-slow’, the workmen understood
the charge and the facts on record clearly showed that the charge against them was of ‘go-slow’ right from the beginning,
the Supreme Court set aside the award of the tribunal ordering reinstatement, and held that the order of dismissal could not
be interfered with merely because the words ‘go-slow’ were not mentioned in the charge-sheet.18 A charge-sheet, however,
is not expected to be a record of evidence. When it gives the necessary particulars of the misconduct alleged, it cannot be
characterised imprecise. It is not necessary to give the statements recorded in the preliminary inquiry with the charge-sheet.
Nor is it necessary to state in the charge-sheet, the particulars of the statements made by witnesses in a preliminary
inquiry.19 When the charge mentions specific instances giving such details as : (i) the time and place of occurrence; (ii) the
names of the complainants; (iii) the acts alleged against the workman; and (iv) the statements of allegation on each count,
the charge would not be defective.20 For instance, where the precise abusive slogans were not incorporated in the charge,
the charge was not held to be defective because the actual slogans would be a matter of evidence, which need not be
incorporated in the charge. Some charges, such as the charge of behaving rudely, do not require specification of the words
actually used. The rude behaviour can be inferred from the gestures, tone, actions as well as the use of various
expressions.21 In Remington Rand, the workman was dismissed from the service for having sold one repaired second hand
typewriter to a customer in contravention of an undertaking given by him to the management that he would not sell any
repaired typewriter to any customer for a period of one year; but since the charge referred only to the sale of the machine,
and not to its repair, the action of dismissal was held to be unsustainable.22

In Burn & Co, the facts disclosed that no charge-sheet was formally drawn against the delinquent workman before
dismissing him from service for an act of misconduct. In the circumstances of the case, the Supreme Court held that this
would not vitiate the order of dismissal as the workman knew what the charge against him was and had an opportunity of
giving his explanation. However, this is an extreme view based on the peculiar facts of that case and cannot be treated as a
general principle, in this case, a number of employees participated in an assault on the works manager and the company
dismissed 14 of them including the concerned workman. From the record, it appeared that subsequent to the order of
dismissal, there were conciliation proceedings and an inquiry by the labour minister as a result of which, he recommended
the reinstatement of seven out of the 14 workmen who had been dismissed, leaving the order of dismissal in operation as
regards the other seven. The LAT took the view that since no charge was framed against the concerned workman and no
inquiry was held, the dismissal of the workman was in violation of the principles of natural justice. Quashing the award,
the Supreme Court held that it would be idle for the workman to contend that he had been dismissed without hearing or
inquiry.23 The person signing the charge-sheet is not the accuser and does not make himself responsible for the truth of
facts stated therein. The charge-sheet merely tells the workman what he is supposed or alleged to have done.24 The mere
fact that the charge-sheet was signed by a person who was not competent to dismiss the delinquent employee would not
vitiate the inquiry and the punishment. In Indian Aluminum, the Karnataka High Court raised the following questions: (i)
has the workman suffered any prejudice? (ii) was he in a position to understand the nature and scope of the charges? (iii)

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was he in a position to meet the charges and, therefore, was he in a position to furnish proper explanation, and held that, if
the answer to these questions was in the affirmative, it could not be successfully contended that the initiation of
disciplinary proceedings was bad. The court finally observed thus:

The disciplinary inquiry is only for the purpose of establishing the guilt of a particular workman or the delinquent officer as the
case may be. Beyond that there is no logic that the charge memo must be issued by the competent officer...it cannot be contended
that the initiation of the disciplinary inquiry lead on ultimately to the order of dismissal and where, therefore, the foundation has
not been properly laid, the edifice cannot remain. 25

In Bharat Heavy Electricals, the charge sheet was neither signed by the competent person nor served by the employer,
though it was subsequently approved by the competent authority. A single judge of the Allahabad High Court held that
such approval would not mean compliance of the requirement of the relevant Standing Order regarding service of the
charge sheet.26 Normally, a reviewing court, cannot issue a writ to quash the memo of charge-sheet unless there is a total
want of jurisdiction or the action is motivated by mala fide intention.27 Disciplinary authority may drop certain charges or
frame fresh charges, which, on a further consideration, might become appropriate or preferable to the charges originally
framed.28 The tribunal also cannot suggest what would have been proper charges but it is incumbent upon the tribunal to
adjudicate on the basis of the charges as framed by the management.29 Generally, the order of dismissal has always a
reference to one or more charges against the workman. In a case, where no domestic inquiry has been held or the domestic
inquiry has been found to be defective, the management would be entitled to adduce evidence in support of those charges.
Even in a case where a valid domestic inquiry has been held in respect of certain charges, the tribunal has to confine itself
to the charges levelled against the concerned workman both in the domestic inquiry and in the order imposing the penalty.
However, where few charges are framed against the workman but the order imposing the penalty is based on certain other
charges, the management was not justified in imposing penalty on the basis of those charges in respect of which the
workman had no opportunity to defend himself. In such a case, it is open to the workman to contend before the tribunal
that:

(i) the domestic inquiry conducted in respect of a few charges is vitiated on account of illegality committed in the
conduct of the inquiry and also,
(ii) he is punished on the charges in respect of which no inquiry was held.

The tribunal has to confine itself to the charges levelled against the workman in the charge-sheet on the basis of which the
penalty was imposed. It is not open to the management to level new charges against the workman before the tribunal which
did not figure or form the basis of the order of punishment or did not figure in the domestic inquiry. Hence, the
management-cannot be allowed to lead evidence on such new charges nor the tribunal has the jurisdiction to record
findings on such new charges and justify the imposing of penalty. If the tribunal, comes to the conclusion on a preliminary
issue that the domestic inquiry is invalid, it may hold an inquiry itself on the charges on which the penalty was imposed
giving full opportunity to the management and the workman concerned. The charges, mentioned in the charge-sheet and
also in the order of dismissal, do not cease to be charges merely because they were not investigated in the domestic
inquiry. Such charges cannot be considered as new charges.30

(ii) Service

Normally, the Standing Orders of industrial establishments provide for the mode of service of notice of disciplinary
proceedings in addition to postal communication. There are generally rules providing for service of the charge-sheet by
affixing the same on the company’s notice board. In G Mckenzie, the employer affixed the notice of inquiry against the
concerned workmen both inside and outside the company’s premises and also sent registered notices to the concerned
workmen out of which some came back unserved. The employer’s request to the union for supplying the addresses of the
concerned workmen also did not elicit any reply. In these circumstances, the Supreme Court held that the resulting inquiry
was valid and proper.31 However, in Bata Shoe, the facts disclosed that the charge-sheets sent to the residential addressed
were returned unserved, whereafter the management displayed the said notices on the notice board. The Supreme Court
held that in such an event the proper course was to publish the notices in a vernacular newspaper having circulation in the
area. In these cases, there was no provision in the standing orders of the company for displaying charge-sheets on the
notice boards of the company. Hence, the resulting order of dismissal was held to be invalid for want of proper service of
charge-sheets.32

Suspension pending Inquiry

After the service of the charge-sheets, where the charges are of serious nature, the employer may suspend the delinquent

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workman pending the inquiry but there is no hard and fast rule that the service of charge-sheet must precede the suspension
order. If the misconduct alleged is of very grave nature and the workman is apprehended at the spot of the commission of
the offence, the employer, in such circumstances may forthwith suspend the workman and then serve him with the charge-
sheet. In DESU, Khanna J, of the Delhi High Court observed that the power of suspension has to be exercised with
circumspection, care and after application of mind. The disciplinary authority must make a fair and proper assessment of
the matter in the given circumstances and carefully scrutinise that prima facie there exists grave and compelling
circumstances which are likely to lead to the dismissal of the employee. A proper judgment exercised by the management
would prevent unnecessary harassment and humiliation of suspension.33 Though the right of an employer to suspend a
delinquent employee pending domestic inquiry is well-recognised in Industrial law, it has to be exercised in accordance
with the procedure laid down by the rules of service or the Standing Orders. Furthermore, such suspension should be
secured by an order on the part of the authority empowered to suspend the person according to law, to debar the employee
temporarily from attending the office and performing his functions.34 ‘Suspension’ connotes temporary cessation of the
right to work or labour,35 or temporary deprivation of office, position or privilege.36 Lord Goddard, in English Electric,
described suspension as dismissal initiated at the discretion of the employer by a promise to re-employ.37 It merely
amounts to a postponement of the actual performance of the contract, and in the case of a continuing contract like the
contract of service between master and servant suspension means that the relationship of master and servant remains in
abeyance for a certain period. If the terms of the contract between the two contracting parties permits, suspension may be
partial but where suspension was not in contemplation of the contract of service, no suspension can take place. The master
is obliged to give a subsistence allowance to the servant, though he may not be obliged to pay him the full wages which are
to be paid for the specific work done by the servant. 38

The legal position as regards the master’s right to place his servant under suspension is now well settled. In Hotel Imperial,
Wanchoo J observed that, under ordinary law of master and servant, the power to suspend the servant without pay is not an
implied term of contract of service, but must arise either from an express term in the contract itself or a statutory provision
governing such contract. It was, therefore, held that ordinarily the absence of such a power would mean that the master
cannot suspend a workman, and if he does so in the sense that he forbids the employee to work, he will have to pay the
wages during the so-called period of suspension.39 Where there is power to suspend either in the contract of employment or
in the statute or the rules framed thereunder, the suspension has the effect of temporarily suspending the relationship of
master and servant with the consequences that the servant is not bound to render service and the master is not bound to
pay.40 In Balvantrai Patel, Ramaswami J stated the general principles in the following words:

It is now well settled that the power to suspend, in the sense of a right to forbid a servant to work, is not an implied term in an
ordinary contract between master and servant, and that such a power can only be the creature either of a statute governing the
contract, or of an express term in the contract itself. Ordinarily, therefore, the absence of such power either as an express term in
the contract or in the rules framed under some statute would mean that the master would have no power to suspend a workman and
even if he does so in the sense that he forbids the employee to work, he will have to pay wages during the period of suspension.
Where, however, there is power to suspend either in the contract of employment or in the statute or the rules framed thereunder, the
order of suspension has the effect of temporarily suspending the relationship of master and servant with the consequence that the
servant is not bound to render service and the master is not bound to pay. This principle of law of master and servant is well
established.. .. It is equally well settled that an order of interim suspension can be passed against the employee while an inquiry is
pending into his conduct even though there is no such term in the contract of appointment or in the rules, but then in such a case
the employee would be entitled to his remuneration for the period of suspension if there is no statute or rule under which it could
be withheld. In this connection, it is important to notice the distinction between suspending the contract of service of an officer and
suspending an officer from performing the duties of his office on the basis that the contract is subsisting. The suspension in the
latter sense is always an implied term in every contract of service. When an officer is suspended in this sense, it means that the
Government merely issues a direction to the officer that so long as the contract is subsisting and till the time the officer is legally
dismissed he must not do anything in the discharge of the duties of his office. In other words, the employer is regarded as issuing
an order to the employee which, because the contract is subsisting, the employee must obey.41

The expression ‘pending inquiry’ generally used in the Standing Orders in relation to such suspension, means only the
inquiry by the employer and not the inquiry pending before any authority under the Industrial Disputes Act. In Ranipur
Colliery, the Standing Orders of the colliery inter alia provided suspension without pay for a period of ten days ‘pending
inquiry’. Dealing with the question whether the expression ‘pending inquiry’ in the relevant Standing Orders of the
company included inquiry by the Industrial tribunal under s 33 of the Act, the Supreme Court said that, ‘Standing Orders
are concerned with employers and employees and not with tribunals’. Hence, in the context of the relevant Standing Order,
the ‘inquiry’ meant only the inquiry by the employer and not by the authority under s 33.42

Subsistence Allowance during the Period of Suspension

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In government service, there are rules providing for an allowance generally known as ‘subsistence allowance’ during the
pendency of departmental proceedings.43 Occasionally, there are provisions in the rules or bye-laws of the governmental
bodies or state institutions vesting discretionary powers in the relevant authorities to grant subsistence allowance to the
suspended workman or not, but this discretion coupled as it is with a benefit has to be exercised in every case reasonably
and according to law and justice and not whimsically or arbitrarily. It is only for stated reasons that the authority
suspending an employee pending inquiry can deny subsistence allowance. The seriousness of the charge levelled against a
delinquent workman can be a valid ground for declining to grant subsistence allowance.44 In Hira Sugar, the Karnataka
High Court set aside an order of the labour court directing payment of subsistence allowance to the employee at the rate of
75 per cent of the wages last drawn by him without affording an opportunity of hearing to the employer. The court
observed that the order was passed without application of mind and as such was arbitrary per se and even mala fide in
law.45 The Standing Orders of Industrial establishments make provision for payment of such ‘subsistence allowance’ to
Industrial employees during the pendency of disciplinary proceedings against them. In the model Standing Orders, in Sch
1, under the Industrial Employment (Standing Orders) Central Rules 1946, framed under the Standing Employment
(Standing Orders) Act 1946, r 14(4) makes the provision for payment of subsistence allowance to Industrial employees to
whom the provisions of that Act apply during the period of suspension, pending a domestic inquiry into the misconduct
alleged against them.

The same principle will apply to the suspension of an Industrial worker. If there is a provision regarding payment of an
allowance for the period of suspension pending disciplinary proceedings against a workman, payment will be made to him
according to that provision. Non-payment of the subsistence allowance to the workman during the pendency of the
domestic inquiry would vitiate the inquiry proceedings,46 but if there is no such provision in the contract of employment or
the Standing Orders or the Standing Orders are not applicable to the establishment, the workman will be entitled to full
wages for the period of interim suspension. An Industrial workman may be suspended pending a domestic inquiry. If such
inquiry results in punishment to the workman, he will not be entitled to any wages (other than the subsistence allowance)
for the period of suspension, because the punishment will be effective from the date of suspension. On the other hand, If
the inquiry does not result in dismissal or the dismissal is found to be bad and the workman is reinstated by Industrial
adjudication, he will be entitled to full wages for the period of suspension, on the footing that he was never legally
dismissed and continued in service. In National Insurance, the court observed:

Suspension pending an inquiry being not a suspension of the contract of employment but only preventing, during the interim
period, the employee from discharging his duties, the employee would be entitled to his wages unless he is ultimately validly
dismissed and dismissal dates back from the date when suspension was ordered. Subsistence allowance during the period of
suspension is generally allowed to government servants under the rules framed in that regard and which have statutory force. No
such rules are ordinarily found in Industrial establishments. To accede to such demand is more or less equating Industrial
employees with civil servants for which there appears to be no justification. 47

Since this case was dealing with a commercial establishment to which the Industrial Employment (Standing Orders) Act
1946 did not apply, these observations did not take note of the Industrial establishments where the Standing Orders provide
for payment of ‘subsistence allowance’ for the period of suspension pending disciplinary proceedings. In such cases, the
‘subsistence allowance’ paid would not be recoverable if the workman is dismissed, nor would the workman be entitled to
anything more if he is reinstated, unless the tribunal expressly directs otherwise.48 It is well settled that if there is a term in
this respect in the contract of employment or the service rules providing for the scale of payment during the suspension,
the payment will be made in accordance therewith.49 Where the employer has the power, to suspend an employee while the
domestic inquiry is pending, under a statute or rules or Standing Orders governing the employment or an express term in
the contract of employment,50 and he places a workman under suspension, then, for the period of suspension, mutual rights
and duties, including the right to wages would be suspended as a rule, ie, the wages and allowances, etc, of the workman
would be withheld for the time being.51 Even if the employer inflicts the lesser punishment of suspension, the workman
still will not be entitled to any wages as in such a case, suspension and withholding the wages for the period of suspension
is by itself punishment.52 In such a situation, the employee will not be entitled to the benefit of increments during the
period of suspension.53 But where the suspension is not permitted by any statute or rules, Standing Orders, it will be no
suspension in the eyes of law and the workman will be entitled to full wages for the period of the so-called suspension
because he would be deemed to be in service for that period. The denial of wages to the workman in such a case merely
because no work was assigned to him or no work was done by him, would not be sustainable.54

The suspension of the workman solely for the reason that a criminal case was pending against him would be invalid but
after the punishment of dismissal has been inflicted on the workman, he will not be entitled to subsistence allowance. The
only possibility of the workman getting the full wages, in accordance with the Standing Orders is when no penal action is
taken against him pursuant to the inquiry during the pendency of which he was suspended.55 Where the employer

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terminated the services of a bus conductor for allowing passengers without ticket, without holding any inquiry, the labour
court adjudicating the said dispute would be justified in directing the employer to pay subsistence allowance.56 Refusal of
payment of subsistence allowance would certainly result in denial of opportunity to the workman to defend himself, such
denial amounts to a violation of principles of natural justice.57 Non-payment of subsistence allowance could be linked to
slow poisoning the employee, and he would gradually starve himself to death.58 A bank employee can be suspended before
serving charge sheet and there is nothing illegal in such an action in view of the bipartite settlement arrived at under s
18(1) between the State Bank of India and the All India SBI Staff Federation, by which para 521(10(b) of the Sastri Award
was modified providing for suspension pending enquiry or ‘initiation of such enquiry’.59 The NCL-II recommended that if
any worker is placed under suspension pending completion of domestic enquiry, he should be entitled to 50 per cent of his
wages as subsistence allowance, and at 75 per cent of wages for the period beyond 90 days if the period of suspension
exceeds 90 days for no fault of the worker, however, the total period of suspension shall not, exceed one year in any case.
If, as a result of continued absence of the worker at the domestic inquiry or if the inquiry and disciplinary action cannot be
completed in time for reasons attributable wholly to the worker’s default or intransigence, the employer will be free to
conduct the inquiry ex parte and complete the disciplinary proceedings based on such ex parte inquiry and further, there
would be no increase in subsistence allowance beyond 50% for the period exceeding 90 days in such cases.60

1 * Chapter IV is continued from Volume I of this book, which contains Sections 1 - 11.
Ins. by Act 45 of 1971, s 3 (wef 15-12-1971).
2 The Gazette of India, Extraordinary, dated 9 December 1971, Pt 2, S 1, 589.
3 Indian Iron and Steel Co Ltd v Workmen (1958) 1 LLJ 260 [LNIND 1957 SC 105] (SC) : AIR 1958 SC 130 [LNIND 1957 SC
105], per SK Das J.
4 Indian Aluminium Co Ltd v LC (1991) I LLJ 328, 333 (Pat) (DB) : 1990 (2) BLJR 1368, per G Sohani CJ.
5 Government of India (2002), Report of the NCL-II, Chapter 13, p 46, para 6.96.
6 Delhi Cloth & General Mills Co Ltd v Shriram FK Union 1989 Lab IC 490, 492 (Raj) (DB) : (1993) 3 LLJ 567 (Raj), per Verma
CJ.
7 The Workmen of Firestone Tyre and Rubber Co of India (Pvt) Ltd v Mgmt (1973) 1 LLJ 278 [LNIND 1972 SC 133], 300-03 (SC) :
AIR 1973 SC 1227 [LNIND 1973 SC 430], per Vaidialingam J.
8 Workmen of Engine Valves Ltd v Engine Valves Ltd (1983) 2 LLJ 232 [LNIND 1983 MAD 110] (Mad) (DB), per Sathiadev J.
9 Satya Narain Singh v IT (1999) 2 LLN 108 (All) : 1999 1 AWC 611 All, per Aloke Chakrabarty J.
10 Digambar Swain v PO, LC 1988 Lab IC 1123 -24 (Ori) (DB) : (1994) 3 LLJ 219 (Ori), per Patnaik J.
11 Ramprasad Ambaram Verma v President, Industrial Court (1991) 2 LLJ 488, 490 (MP) (DB) : 1989 MPLJ 797, per SK Dubey J.
12 Jagdish Prasad v Sachiv, Zila Ganna Committee 1986 Lab IC 1377 (SC) : AIR 1986 SC 1108 [LNIND 1986 SC 65], per BC Ray
J.
13 Gaur BVP Sabha v IT-cum-LC (1993) 2 LLJ 500 -01 (P& H) (DB).
14 Anand Cinema v Mohan Tiwari 1993 Lab IC 651, 661 (MP) (DB) : (1993) 1 LLJ 1105 [LNIND 1992 MP 68] MP, per
Dharmadhikari J.
15 Municipal Committee, Sirsa v Munshi Ram AIR 2005 SC 792 [LNIND 2005 SC 116]: (2005) 1 LLJ 1077 [LNIND 2005 SC 116]
(SC), per Hegde J.
16 Gujarat Steel Tubes Ltd v GST Mazdoor Sabha (1980) 1 LLJ 137 [LNIND 1979 SC 464] (SC) : AIR 1980 SC 1896 [LNIND 1979
SC 464], per Krishna Iyer J.
17 Mersey Docks and Harbour Board v Henderson Bros [1888] 13 AC 595, 600.
18 Manohar Nathusao Samarth v Marotrao AlR 1979 SC 1084, 1090 : [1979] 3 SCR 1078, per Tulzapurkar J.
19 Bangalore Water Supply & Sewerage Board v Rajappa 1978 Lab IC 467 [LNIND 1963 SC 89]-68 (SC) : AIR 1978 SC 548
[LNIND 1978 SC 70], per Krishna Iyer J.
20 Stern, Writing on Judicial Opinions 18 PABAQ 40 (1947).
21 Manohar Nathusao Samarth v Marotrao AlR 1979 SC 1084, 1095 : [1979] 3 SCR 1078, per Tulzapurkar J.

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22 State of Punjab v Ram Singh 1992 Lab IC 2391, 2394 (SC) : AIR 1992 SC 2188 [LNIND 1992 SC 452], per K Ramaswamy J.
23 Workmen of Tanganagaon Tea Estate v Mgmt (1987) 2 LLJ 491, 494 (Gau) (DB), per Saikia J.
24 Jyoti Home Industries v Addl LC 1996 Lab IC 1211, 1214 (Kant), per Mohan Kumar J.
25 CP Peethambaran v Superintendent of Police 1996 Lab IC 1520 -21 (Ker) (DB), per Thomas Ag CJ.
26 WM Agnani v Badri Das (1963) 1 LLJ 684 [LNIND 1963 SC 74], 691 (SC), per Gajendragadkar J.
27 Presidency Talkies v NS Natarajan (1968) 2 LLJ 801 [LNIND 1967 MAD 205]-02 (Mad) : (1968) 2 MLJ 221 [LNIND 1967 MAD
38], per Anantanarayanan CJ.
28 Shalimar Rope Works Mazdoor Union v Shalimar Rope Works Ltd, [1953] LAC 584 (LAT) : 1953 2 LLJ 876.
29 Tata Oil Mills Co Ltd v Workmen (1964) 2 LLJ 113 [LNIND 1964 SC 111], 116 (SC) : AIR 1965 SC 155 [LNIND 1964 SC 111],
per Gajendragadkar J.
30 Lomdhar Tanti v Manager, Murmuria Tea Estate 1975 Lab IC 194 -95 (Gau) (DB) : (1975) 2 LLJ 157 (Gau), per Sen J.
31 Nandita B Palekar v YS Kasbekar (1985) 2 LLJ 336 (Bom) (DB) : 1985 (87) BOMLR 135, per Madhava Reddy CJ.
32 Santosh Dattaram Nadkarni v New India Industries Ltd, (1988) 2 LLJ 392 [LNIND 1988 BOM 109], 394-5 (Bom) (DB), per
Sawant J.
33 Cf New Victoria Mills Co Ltd v LC 1970 Lab IC 428, 431 (All) : AIR 1970 All 210 [LNIND 1968 ALL 89], per Beg J.
34 Express Newpapers Pvt Ltd v IT AIR 1961 Mad 362 [LNIND 1960 MAD 252]: (1961) 1 MLJ 100 [LNIND 1960 MAD 252], per
Jagadeesan J.
35 Mahendra Singh Dhantwal v Hindustan Motors Ltd (1976) 2 LLJ 259 [LNIND 1976 SC 222] (SC) : AIR 1976 SC 2062 [LNIND
1976 SC 222], per Goswami J.
36 Glaxo Laboratories (I) Ltd v PO, LC 1983 Lab IC 1909, 1919-20 (SC) : AIR 1984 SC 505 [LNIND 1983 SC 289], per Desai J.
37 Rasiklal Vaghajibhai Patel v Ahmedabad Municipal Corpn 1985 Lab IC 729, 731 (SC) : AIR 1985 SC 504 [LNIND 1985 SC 5],
per Desai J.
38 AL Kalra v Project & Equipment Corpn of India Ltd (1984) 2 LLJ 186 [LNIND 1984 SC 136], 193 (SC) : (1984) 3 SCC 316
[LNIND 1984 SC 136], per Desai J.
39 Jyoti Home Industries v Addl LC 1996 Lab IC 1211. 1214 (Kant), per Mohan Kumar J.
40 Workmen of Tanganagaon Tea Estate v Mgmt (1987) 2 LLJ 491, 495 (Gau) (DB), per Saikia J.
41 Mgmt of Kasojan Tea Estate v LC 1974 Lab IC 372 -73 (Ass&Nag) (DB), per Goswami CJ.
42 Mill Mazdoor Sabha v JA Baxi (1962) 2 LLJ 326 (Bom) (DB), per Chainani CJ.
43 Delhi Cloth & General Mills Co Ltd v Workmen (1969) 2 LLJ 755 [LNIND 1968 SC 298], 772 (SC) : AIR 1970 SC 919 [LNIND
1968 SC 298], per Shah J.
44 Sharda Prasad Onkarprasad Tiwari v Central Rly (1960) 1 LLJ 167, 170 (Bom) (DB) : AIR 1961 Bom 150 [LNIND 1959 BOM
83], per Raju J.
45 Pearce v Foster (1886) 17 QB D 536, 542, per Lopes LJ.
46 Ibid.
47 Bell v Lever Bros [1932] AC 161 (HL), per Lord Balnesburgh.
48 Basu Deba Das v MR Bhope (1993) 2 LLJ 1022,1035 (Bom) : 1993 (2) Bomcr 90 [LNIND 1992 BOM 639], per Ashok Agarwal J.
49 Presidency Talkies v NS Natarajan (1968) 2 LLJ 801 [LNIND 1967 MAD 205]-3 (Mad) : (1968) 2 MLJ 221 [LNIND 1967 MAD
38], per Anantanarayanan CJ.
50 Cf Empress v Mohd Hussain 3 All Weekly Notes 42.
51 Press Labour Union v Express Newspapers Pvt Ltd (1963) 1 LLJ 492 [LNIND 1962 MAD 189] (Mad), per Anantanarayanan J.
52 Goswami v General Manager, Southeastern Rly (1966) 1 LLJ 194 (Cal) : AIR 1965 Cal 557 [LNIND 1964 CAL 144], per BN
Banerjee J.
53 JF Burros v Contractual Cooperation and Implied Term [1968] 31 MLR 390.
54 Presidency Talkies Pvt Ltd v LC (1969) 1 LLJ 90 (Mad) (DB) : (1968) 2 MLJ 221 [LNIND 1967 MAD 38], per Anantanarayanan J.
55 Vasanti M Shah v All India HFMC Society Ltd (1986) 1 LLJ 69, 76 (Guj) (DB) : (1985) 1 GLR 281, per Majmudar J.
56 Cf Edwards v SOGET (1970] 3 WLR 713, 719-20, per Lord Denning MR.

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57 Jupiter General Insurance Co Ltd v Shroff [1937] 3 All ER 67, per Lord Maugham.
58 Lister v Romford Ice & Cold Storage Co Ltd [1957] AC 555 (HL).
59 Harvey v RG Dell Ltd [1958] 2 QB 78.
60 BA Hepple and Paul O’Higgins, Individual Employment Law(An Introduction.
61 Halsbury’s Laws of England, Vol 34, fourth edn, paras 1, 3.
62 Glasgow Corpn v Muir [1943] AC 448, 456 (HL), [1943] 2 All ER 44,48, per Lord Macmillan.
63 Kesari Mal v State of Rajasthan AIR 1957 Raj 284 [LNIND 1956 RAJ 98] (DB), per Bapna J.
64 Navinchandra S. Shah v Ahmedabad CDS Ltd (1979) 1 LLJ 60 [LNIND 1977 GUJ 35], 63 (Guj) (DB) : (1978) 19 GLR 108, per
DA Desai J.
65 Luma v Arding [1955] 10 Exch 734, 736, per Pollock CB.
66 Edward v Levy [1960] 2 F&F 94-95, per Hill J.
67 Andhra Scientific Co Ltd v A Seshagiri Rao (1961) 2 LLJ 117 [LNIND 1960 SC 340], 121 (SC) : AIR 1967 SC 408 [LNIND 1960
SC 340], per Das Gupta J.
68 PH Kalyani v Air France (1963) 1 LLJ 679 [LNIND 1963 SC 45](SC), per Wanchoo J.
69 Caltex (India) Ltd v Eugene Fernandes (1957) 1 LLJ 1 [LNIND 1956 SC 86] (SC), per Bhagwati J.
70 Surendra Kumar Dash v Orissa State HDC Ltd 1992 Lab IC 1158 (Ori) (DB), per Padhi J.
71 Baster v London & County Printing Works [1899] 1 QB 901.
72 Ayyavu K v Tiruvalluvar Transport Corpn (2003) 4 LLJ 663 (Mad .)
73 Nirmal Sen Gupta v National Carbon Co Ltd CA No 155 of 1959 (1960) (SC), per Wanchoo J.
74 Ford Motor Co of India Ltd v SKK Naik (1952) 1 LLJ 388 (LAT).
75 Francis Klein & Co Pvt Ltd v Workmen (1971) 2 LLJ 615 [LNIND 1971 SC 480], 619 (SC), per Jaganmohan Reddy J.
76 Bhaskar Textile Mills Ltd v IT (1975) 1 LLJ 77, 79 (Ori) (DB), per RN Misra J.
77 Mgmt of Mettur Spg Mills v Labour Officer, Salem 1977 Lab IC 1462, 1464 (Mad), per Mohan J.
78 TK Bandkar v Board of Trustees of Bombay Port Trust 1996 Lab IC 1967 -68 (Bom), per Majithia J.
79 Burn & Co Ltd v Workmen. (1959) 1 LLJ 450 [LNIND 1958 SC 174], 452-53 (SC), per Imam J.
80 Lister v Romford Ice & Cold Storage Co Ltd [1957] AC 555 (HL).
81 Remington Rand of India Ltd v Tahir Ali Baifi (1975) 2 LLJ 376 (SC) : AIR 1975 SC 1896 : (1976) 3 SCC 69, per Alagiriswami J.
82 T Krishnamoorthy v Mgmt of Indian Bank (1995) 1 LLJ 816 [LNIND 1994 MAD 214], 822 (Mad), per Bakthavatsalam J.
83 National Coal Board v Galley [1958] 1 All ER 91 (CA), per Pears LJ.
84 Hanley v Pease and Partners Ltd [1915] 1 KB 698, 705 (DC), per Lush J.
85 Rabindranath Sen v First IT (1963) 1 LLJ 567 [LNIND 1962 CAL 172] (Cal), per BN Banerjee J.
86 Burn & Co v Workmen (1959) 1 LLJ 450 [LNIND 1958 SC 174], 452 (SC), per Imam J.
87 Indian Iron and Steel Co Ltd v Workmen (I958) 1 LLJ 260, 267-68 (SC), per SK Das J.
88 Burn & Co Ltd v Employees (1957) 1 LLJ 226 [LNIND 1956 SC 78], 234 (SC), per Venkararama Ayyar J.
89 Indian Iron and Steel Co Ltd v Workmen (1958) 1 LLJ 260 [LNIND 1957 SC 105] (SC) : AIR 1958 SC 130 [LNIND 1957 SC
105], per SK Das J.
90 TELCO Ltd v PO, IT, (1990) 1 LLJ 403, 407 (Pat) : [1989 (59) FLR 648 ] per Satyeshwar Roy J.
91 Rabindranath Sen v First IT (1963) 1 LLJ 567 [LNIND 1962 CAL 172] (Cal), per BN Banerjee J.
92 Venkatayya v Buckingham & Carnatic Co Ltd (1963) 1 LLJ 16 [LNIND 1962 MAD 14] (Mad) (DB), per Ramachandraayyar CJ.
93 Thomas v Vivian [1872 J 37 JP 288.
94 Bata Shoe Co Pvt Ltd v DN Ganguly (1961) 1 LLJ 303 [LNIND 1960 SC 345] (SC), per Wanchool.
95 Mafatlal Narandas Barot v Div. Controller, State Tpt. (1966) 1 LLJ 437 [LNIND 1965 SC 372], 439 (SC), per Raju J.
96 Nagaraja Rao v State of Mysore (1958) 1 LLJ 319, 322 (Mys) (DB), per SR Das Gupta CJ. Art

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97 Shalimar Rope Works Ltd v State of West Bengal (1965) 1 LLJ 625 (Cal), per BN Banerjee J.
98 Muir Mills Co Ltd v Sri Harbans Singh (1954) 2 LLJ 627 (LAT).
99 MacLeod & Co Ltd v Amar Mukherjee (1954) 2 LLJ 353 (LAT).
1 Tata Iron & Steel Co Ltd v Lattu Tury (1967) 2 LLJ 207 (Pat) (DB) : [1967 (14) FLR 138 ], per Narasimham CJ.
2 Burn & Co Ltd v Workmen (1959) 1 LLJ 450 [LNIND 1958 SC 174], 452 (SC), per Imam J.
3 Swaraj Tractors Division v Raghbir Singh, AIR 2004 SC 1234 [LNIND 2002 SC 1527]: (2004) 3 SCC 50 : 2002 (6) SCALE 36
[LNIND 2002 SC 1527] : (2004) 1 LLJ 458.
4 YP Sarabhai v Union Bank of India AIR 2006 SC 2316 [LNIND 2006 SC 423]: (2006) 5 SCC 377 [LNIND 2006 SC 423], per
Lakshmanan J.
5 L& T Komatsu Ltd v N Udayakumar AIR 2007 SC (supp) 1752 : 2007 (13) SCALE 648 [LNIND 2007 SC 1404] : (2008) 1 SCC
224 [LNIND 2007 SC 1404], per Pasayat J.
6 Pepsu Road Transport Corpn v Rawel Singh AIR 2008 SC (supp) 1591, per CK Thakker J.
7 Mavji C. Lakum v. Central Bank of India, AIR 2008 SC (supp) 1817 : 2008 (7) SCALE 32 [LNIND 2008 SC 820] : (2008) 12 SCC
726 [LNIND 2008 SC 820], per Sirpurkar J.
8 Mgmt of Aurofoods Pvt Ltd v S Rajulu, AIR 2008 SC (supp) 1885, per HS Bedi J.
9 Jagdish Singh v Punjab Engg College, AIR 2009 SC 2458 [LNIND 2009 SC 1290]: (2009) 7 SCC 301 [LNIND 2009 SC 1290],
per HL Dattu J.
10 Tobacco Manufactures (India) Ltd v Kaleshripat Bala (1953) 2 LLJ 263 (LAT).
11 Madras Electric Tramways Ltd v R Vijarajoo (1954) 1 LLJ 781 (LAT).
12 Oriental Textile Finishing Mills v LC (1971) 2 LLJ 505 [LNIND 1971 SC 426], 510 (SC) : AIR 1972 SC 277 [LNIND 1971 SC
426]:, 1972 Lab IC 157 [LNIND 1971 SC 426] : (1971) 3 SCC 646 [LNIND 1971 SC 426], per Jaganmohan Reddy J.
13 India General Navigation and Rly Co Ltd v Workmen, in (1960) 1 LLJ 13 [LNIND 1959 SC 182], 22, 26-27 (SC) : AIR 1960 SC
219 [LNIND 1959 SC 182], per Sinha CJI.
14 Model Mills Ltd v Dharamdas (1958) 1 LLJ 539 [LNIND 1957 SC 110] (SC), per Imam J.
15 Burn & Co Ltd v Workmen (1959) 1 LLJ 450 [LNIND 1958 SC 174], 454 (SC), per Imam J.
16 Caltex India Ltd v Workmen (1960) 2 LLJ 12 [LNIND 1960 SC 34], 14-15 (SC) : AIR 1960 SC 1262 [LNIND 1960 SC 34], per
Gajendragadkar J.
17 Bata Shoe Co Pvt Ltd v DN Ganguly (1961) 1 LLJ 303 [LNIND 1960 SC 345] (SC) : AIR 1961 SC 1158 [LNIND 1960 SC 345],
per Wanchoo J.
18 IMH Press v Additional IT (1961) 1 LLJ 499 [LNIND 1960 SC 110], 501 (SC), per Wanchoo J.
19 Oriental Textile Finishing Mills v LC (1971) 2 LLJ 505 [LNIND 1971 SC 426], 510 (SC) : AIR 1972 SC 277 [LNIND 1971 SC
426]: 1972 Lab IC 157 [LNIND 1971 SC 426] : (1971) 3 SCC 646 [LNIND 1971 SC 426], per Jaganmohan Reddy J.
20 Bengal Bhatdee Coal Co v Ram Prabesh Singh (1963) 1 LLJ 291 [LNIND 1963 SC 13], 293 (SC), per Wanchoo J.
21 East Asiatic Co (India) Pvt Ltd v Workmen (1964) 2 LLJ 626 [LNIND 1964 MAD 166] (Mad), per Ramachandra, Ayyar CJ.
22 Punjab National Bank Ltd v Workmen (1959) 2 LLJ 666 [LNIND 1959 SC 166], 684-85 (SC), per Gajendragadkar J.
23 Lakshmi Devi Sugar Mills v Ram Sarup (1957) 1 LLJ 17 [LNIND 1956 SC 85] (SC), per Bhagwati J.
24 Sridharan Motor Service v IT (1959) 1 LLJ 380 (Mad), per Balakrishna Ayyar J.
25 India Gen. Navigation & Rly Co Ltd v Workmen (1960) 1 LLJ 13 [LNIND 1959 SC 182], 22 (SC) : AIR 1960 SC 219 [LNIND
1959 SC 182], per Sinha CJI.
26 Ramakrishna Iron Foundry v Workers (1954) 2 LLJ 372 (LAT).
27 Swadeshi Industries Ltd v Workmen (1960) 2 LLJ 78 [LNIND 1960 SC 7], 81 (SC), per Das Gupta J.
28 Express Newspapers Pvt Ltd v Michael Mark (1962) 2 LLJ 220 [LNIND 1962 SC 242] (SC), per Mudholkar J.
29 A Raman v KN Vtlni (1982) 2 LLJ 1, 6 (Bom), per Pendse J.
30 Amrit Vanaspati v Khem Chand, AIR 2006 SC 2739 [LNIND 2006 SC 500]: (2006) 6 SCC 325 [LNIND 2006 SC 500] : (2006) 3
LLJ 344 [LNIND 2006 SC 500] : 2006 LIC 3992, per Lakshmanan J.
31 Bangalore Hospital v. Workmen, (2009) 1 LLJ 661 (Kant .) : [2008 (119) FLR 1128 ] : 2008 (6) Kar LJ 344 [LNIND 2008 KANT
179].

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32 Velusamy K v LC, (2009) 3 LLJ 844 (Cal .).

33 Force Motors Ltd v Shrikrishna Shivram Tungar (2008) 2 LLJ 771 [LNIND 2008 BOM 290] (Bom) : 2008 (3) Bom CR53 : [2008
(117) FLR 606 ], per BH Marlapalle J
34 UB Gadhe v GM, Gujarat Ambuja Cement Pvt Ltd AIR 2008 SC 99 [LNIND 2007 SC 1147]: 2007 (11) SCALE 581 [LNIND
2007 SC 1147] : (2007) 13 SCC 634 [LNIND 2007 SC 1147], per Pasayat J.
35 Bharat Sugar Mills Ltd v Jai Singh, (1961) II LLJ 644(647) (SC) : [1962] 3 SCR 684 [LNIND 1961 SC 306] : [1960] 11 STC 793
(SC), per Das Gupta J.
36 SU Motors Pvt Ltd v Workmen (1990) 2 LLJ 39 [LNIND 1990 SC 308], 53 (SC), per Sawant J.
37 Janab Muhammad Israil v Saxby & Farmer (India) Ltd (1956) 1 LLJ 72 (LAT).
38 Firestone TRCI Ltd v Bhoja shetty (1953) 1 LLJ 599 (LAT).
39 Sasa Musa Sugar Works Pvt Ltd v Shobrati Khan (1959) 2 LLJ 388 [LNIND 1959 SC 79], 393 (SC), per Wanchoo J.
40 Engineering Works Ltd v State of West Bengal AIR 1968 Cal 407 [LNIND 1967 CAL 171] (FB), per Sinha CJ.
41 Mgmt of Krishnakali Tea Estate v ABCM Sangh AIR 2004 SC 4647, per Hegde J.
42 Onkar Nath Misra v State of Haryana AIR 2005 SC 2783 [LNIND 2005 SC 286]: (2005) 3 SCC 736 [LNIND 2005 SC 286], per
Hegde J.
43 BA Hepple & Paul O’Higgins, Individual Employment Law(An Introduction, 1971, p 105.
44 Websters Third New International Dictionary.
45 Somanath Sahu v State of Orissa (1965) 1 LLJ 349 (Ori), per Mishra J.
46 Permanent edn, Vol 21, pp 698-99.
47 Gayler-Industrial Law [1955], 39.
48 Somanath Sahu v State of Orissa (1965) 1 LLJ 349 (Ori), per Mishra J.
49 AA Fernandes v Modern Mills Ltd (1990) 1 LLJ 538, 541 (Bom) (DB).
50 Sarabhai M Chemicals Ltd v MS Ajmere (1980) 1 LLJ 295, 301 (Bom) (DB), per Chandurkar J.
51 Calcutta Jute Mfg. Co Ltd v Calcutta JMW Union (1961) 2 LLJ 686 [LNIND 1961 SC 354], 688 (SC), per Sarkar J.
52 Laxmi Devi Sugar Mills Ltd v Nand Kishore Singh (1956) 2 LLJ 439 [LNIND 1956 SC 75] (SC) : AIR 1957 SC 7 [LNIND 1956
SC 75]: 1957 (5) BLJR 5 : [1956] 1 SCR 746 [LNIND 1956 SC 75], per Bhagwat J.
53 Strawboard Manufacturing Co v Gobind (1962) 1 LLJ 420 [LNIND 1962 SC 105] (SC) AIR 1962 SC 1500 [LNIND 1962 SC
105], per Wanchoo J.
54 Cambodia Mills Ltd v IT (1959) 2 LLJ 80 [LNIND 1959 MAD 23] (Mad), per Balakrishna Ayyar J.
55 Prive v Muat [1862] 2 CBNS 508.
56 Manjumalai Estate v Workmen (1963) 1 LLJ 220 (Ker) (DB), per MS Menon CJ.
57 Andhra Scientific Co Ltd v Seshagiri Rao (1961) 2 LLJ 117 [LNIND 1960 SC 340] (SC) : AIR 1967 SC 408 [LNIND 1960 SC
340], per Das Gupta J.
58 Turner v Mason [1845] 14 M&W 112, 118, per Alderson & Rolfe, BB.
59 Assn of Chemical Workers v BD Borude 1993 Lab IC 711, 718 (Bom), per Kantharia J.
60 J Durgappa v Industrial-cum-LC, Ananthapur 1996 Lab IC 837, 839 (AP), per Bikshapathy J.
61 Calcutta Jute Manufacturing Co Ltd v Calcutta JMW Union (1961) 2 LLJ 686 [LNIND 1961 SC 354] : AIR 1966 SC 1731
[LNIND 1961 SC 354], per Sarkar J.
62 India Marine Service Pvt Ltd v Workmen (1963) 1 LLJ 122 [LNIND 1962 SC 260]-23 (SC) : AIR 1963 SC 528 [LNIND 1962 SC
260], per Mudholkar J.
63 Ananda Bazar Patrika Pvt Ltd v Employees (1963) 2 LLJ 429 [LNIND 1963 SC 147] (SC) : AIR 1964 SC 339 [LNIND 1963 SC
147], per Gajendragadkar J.
64 Tractors (India) Ltd v Mohammed Sayeed (1959) 2 LLJ 224 [LNIND 1959 SC 57] (SC), per Gajendragadkar J.
65 Caltex (India) Ltd v Eugene Fernandes (1957) 1 LLJ 1 [LNIND 1956 SC 86] (SC), per Bhagwati J.
66 Laxmi Devi Sugar Mills Ltd v Nand Kishore Singh (1956) 2 LLJ 439 [LNIND 1956 SC 75] (SC) : AIR 1957 SC 7 [LNIND 1956
SC 75]: 1957 (5) BLJR 5, per Bhagwati J.

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67 SKumbalingam v Indian Metal & Metallurgical Corpn, (1964) 1 LLJ 81 [LNIND 1963 MAD 51] (Mad), per Anantanarayanan J.
68 Express Newspapers Pvt Ltd v IT (1959) 2 LLJ 793 (Mad), per Balakrishna Ayyar J.
69 Somanath Sahu v State of Orissa (1965) 1 LLJ 349 (Ori), per Mishra J.
70 Diwan Sugar and Genl. Mills Ltd v Mazdoor Sabha (1954) 1 LLJ 36 (LAT).
71 Manjumalai Estate v Workmen (1963) 1 LLJ 220 (Ker) (DB), per MS Menon CJ.
72 Northern Rly Cooperative Credit Society Ltd v IT (1967) 2 LLJ 46 (SC) : AIR 1967 SC 1182 [LNIND 1967 SC 419], per Bhargava
J.
73 Burn & Co Ltd v Workmen (1959) 1 LLJ 450 [LNIND 1958 SC 174], 454 (SC), per Imam J.
74 Orissa Cement Ltd v Habibuilah (1960) 1 LLJ 522 [LNIND 1959 SC 81] (SC), per Gajendragadkar J.
75 Northern Rly Cooperative Credit Society Ltd v IT (1967) 2 LLJ 46 (SC) : AIR 1967 SC 1182 [LNIND 1967 SC 419], per Bhargava
J.
76 M Mayandi v Director, Tamil Nadu State Transport Corpn (1981) 2 LLJ 146 [LNIND 1981 SC 39]-47 (SC) : AIR 1981 SC 1707
[LNIND 1981 SC 39]: [1981] (43) FLR 325 : (1981) 3 SCC 89 [LNIND 1981 SC 39].
77 KP Vadivelu v Superintendent of Police 1967 FLR 286 (Mad), per Venkatadari J.
78 Sarabhai M Chemicals Ltd v MS Ajmere (1980) 1 LLJ 295, 304 (Bom) (DB), per Chandurkar J.
79 Banamali Palei v Steel Authority of India Ltd, 1986 Lab IC 1685,1687 (Ori) (DB), per Patnaik J.
80 Ram Bilash Goel v Mgmt of Lakwa Tea Estate 1981 Lab IC 1640, 1646 (Gau), per Saikia J.
81 Biecco Lawrie Ltd v State of West Bengal AIR 2010 SC 142 [LNIND 2009 SC 1538]: (2009) 4 LLJ 644 [LNIND 2009 SC 1538] :
(2009) 8 MLJ 451 [LNIND 2009 SC 1538] : 2009 (10) SCALE 334 [LNIND 2009 SC 1538] : (2009) 10 SCC 32 [LNIND 2009 SC
1538], per Aftab Alam J.
82 Webster’s Third New International Dictionary, p 2281.
83 Mgmt of SRP Tools Ltd v PO, Second Addl. LC (1974) 1 LLJ 413, 416 (Mad), per Ismail J.
84 Shalimar Rope Works Mazdoor Union v Shalimar Rope Works (1953) 2 LLJ 876 (LAT).
85 WM Agnani v Badri Das (1963) 1 LLJ 684 [LNIND 1963 SC 74], 689 (SC), per Gajendragadkar J.
86 Jai Chand Bansal v IT (1966) 1 LLJ 289 (Bom) (DB), per Chainani CJ.
87 Edwards v Levy [1860] 2 F&F 94-95, per Hill J.
88 Orissa Cement Ltd v Adikanda Sahu (1960) 1 LLJ 518 [LNIND 1959 SC 82] (SC), per Gajendragadkar J.
89 Syed Khader Mohiuddim v Chairman TNPSC (1997) 2 LLJ 111 [LNIND 1997 MAD 452], 117-18 (Mad), per Lakshmanan J.
90 Agarpara Jute Mills v Sukdeo Roy (1957) 2 LLJ 418 (LAT).
91 Titagarh Paper Mill, Ltd v Employees’ Union (1957) 2 LLJ 550 (LAT).
92 Calcutta jute Mfg. Co Ltd v Calcutta JMW Union (1961) 2 LLJ 686 [LNIND 1961 SC 354] (SC), per Sarkar J.
93 Manekchowk & Ahmedabad Mfg.Co Ltd v IC (1967) 1 LLJ 463 (Guj) (DB), per Shelat J.
94 WM Agnani v Badri Das (1963) 1 LLJ 684 [LNIND 1963 SC 74], 689 (SC), per Gajendragadkar J.
95 Lomdhar Tanti v Manager, Murmuria Tea Estate 1975 Lab IC 194, 196 (Gau) (DB), per Sen J.
1 Rama Kant Misra v State of UP 1982 Lab lC 1790-91 (SC).
2 Workmen of Bharat Fritz Werner Pvt Ltd v Mgmt 1990 Lab IC 844, 853 (SC), per SC Agrawal J.
3 Ram Kishan v Union of India (1996) 1 LLJ 982, 985 (SC) : AIR 1996 SC 255 [LNIND 1995 SC 858]: 1995 (5) SCALE 431 :
(1995) 6 SCC 157 [LNIND 1995 SC 858].
4 Syed Khader Mohiuddin v Tamil Nadu Public Service Commission (1997) 2 LLJ 111 [LNIND 1997 MAD 452] (SC).
5 Nanabhai B Parmar v Ahmedabad MC Workshop 1997 Lab IC 3463, 3465 (Guj) per Keshote J.
6 Laxmi Devi Sugar Mills Ltd v Nand Kishore Singh (1956) 2 LLJ 439 [LNIND 1956 SC 75], 443 (SC), per Bhagwati J.
7 Workmen of Dem Dima Tea Estate v Dem Dima Tea Estate (1963) 1 LLJ 250 [LNIND 1962 SC 231] (SC), per Mudholkar J.
8 New Sherrock Mills v. Maheshbhai T. Rao, AIR 1997 SC 252 [LNIND 1996 SC 1731]: (1996) 6 SCC 590 [LNIND 1996 SC 1731]
: 1997 (1) LLJ 1212 [LNIND 1996 SC 1731] : 1997 LIC 158, per Kirpal J.
9 Mahindra and Mahindra Ltd. v. NB Naravade, 2005 AIR SCW 1115, per Hegde J.

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10 Lomdhar Tanti v Manager, Murmuria Tea Estate 1975 Lab IC 194 --99 (Gau) (DB), per Sen J.
11 WM Agnani v Badri Das (1963) 1 LLJ 684 [LNIND 1963 SC 74] (SC), per Gajendragadkar J.
12 Mulchandani Electrical and Radio Industries Ltd v Workmen (1975) 1 LLJ 391 [LNIND 1975 SC 35] (SC) : AIR 1975 SC 2125
[LNIND 1975 SC 35]: 1975 (30) FLR 169 : 1975 Lab lC 1508, per Gupta J.
13 Hindustan Aeronautics Ltd v Gulab Singh 1986 Lab IC 1403, 1407 (Kant), per Rama Jois J.
14 Indian Express & Chronicle Press v MC Kapur (1974) 2 LLJ 240 [LNIND 1973 SC 98] (SC), per Grover J.
15 Rama Kant Misra v State of Uttar Pradesh 1982 Lab IC 1790 [LNIND 1982 SC 149] (SC).
16 WM Agnani v Badri Das (1963) 1 LLJ 684 [LNIND 1963 SC 74], 691 (SC), per Gajendragadkar J.
17 Boisahabi Tea Estate v PO, LC 1981 Lab IC 557, 565 (Gau) (DB), per Lahiri J.
18 Bum & Co Ltd v Employees (1957) 1 LLJ 226 [LNIND 1956 SC 78] (SC), per Venkatarama Ayyar J.
19 Balwant Singh v New Sutlej Transport Co Pvt Ltd (1989) 2 LLJ 217 -18 (P& H), per Sodhi J.
20 Tata Oil Mills Co Ltd v Workmen (1964) 2 LLJ 113 [LNIND 1964 SC 111], 116 (SC), per Gajendragadkar CJI.
21 BPL India Ltd v BPL & PSP Thozhilali Union (1992) 1 LLJ 115, 117 (Ker), per Sukumaran J.
22 SamnuggurJute Factory v Workmen (1964) 1 LLJ 634 [LNIND 1963 SC 247] (SC), per Gajendragadkar J.
23 Central India Coalfields Ltd, Calcutta v Ram Bilas Shobnath, (1961) 1 LLJ 546 [LNIND 1960 SC 103] (SC), per Gajendragadkar J.
24 WM Agnani v Badri Das, (1963) 1 LLJ 684 [LNIND 1963 SC 74] (SC), per Gajendragadkar J.
25 Tata Oil Mills Co Ltd v Workmen (1964) 2 LLJ 113 [LNIND 1964 SC 111] (SC) : AIR 1965 SC 155 [LNIND 1964 SC 111], per
Gajendragadkar CJI.
26 Mulchandani Elec. and Radio Inds. Ltd v Workmen (1975) 1 LLJ 391 [LNIND 1975 SC 35] (SC), : AIR 1975 SC 2125 [LNIND
1975 SC 35] per Gupta J.
27 Glaxo Laboratories (1) Ltd v PO, LC 1983 Lab IC 1909 (SC), per Desai J.
28 Khandu Krishna Bhogade v Kalyani Steel Ltd, (1995) 2 LLJ 314, 317 (Bom) : [1995] (70) FLR 159, per BN Srikrishna J.
29 Narayanan v BPL Systems Pvt Ltd (1995) 1 LLJ 43, 46 (Ker) (DB) : 1994 (1) KLJ 760, per Jagannadha Rao CJ.
30 Bharat Coking Coal Ltd v Bihar Colliery Kamgar Union, AIR 2005 SC 2006 [LNIND 2005 SC 169]: (2005) 10 SCC 393 [LNIND
2005 SC 189], per Hegde J.
31 Mgmt, WB Colliery v. Ram Pravesh Singh , AIR 2008 SC 1162 [LNIND 2008 SC 226] (2008) 3 SCC 729 [LNIND 2008 SC 226],
per Ashok Bhan J.
32 Federal Bank Ltd v T Sreekantan, (2009) 4 LLJ 809 (Ker .) : 2009 (2) KLJ 317 per Ramachandra Menon J.
33 Madhavsinh N. Solanki v. Gujarat Electricity Corpn Ltd., (2012) 1 LLJ 811 (Guj .), per Sahai J.
34 RK Ramaswamy v. Presiding Officer (2013) 2 LLJ 682 (Mad .) (DB).
35 Sinclair v Neighbour [1967] 2 QB 279.
36 Philips India Ltd v Fifth IT, 1978 Lab IC (NOC) 115 (Cal) (DB).
37 Janata Pictures & Theatres Ltd v Amulya Chakraborty (1956) 2 LLJ 67 (LAT).
38 India General Navigation and Rly Co Ltd v Employees (I96 1) 2 LLJ 372 (SC), per Gupta J.
39 Orissa Cement Ltd v Habibullah (I960) 1 LLJ 522-23 (SC), per Gajendragadkar J.
40 MH Devendrappa v Karnataka State SIDC 1988 Lab IC 1319, 1323 (Kant), per Doddakalegowda J.
41 Orissa Cement Ltd v Habibullah (1960) 1 LLJ 522 [LNIND 1959 SC 81]-23 (SC) per Gajendragadkar J.
42 Punjab National Bank v Workmen (1959) 2 LLJ 666 [LNIND 1959 SC 166], 693-94 (SC), per Gajendragadkar J.
43 Hindustan GEC Ltd v Bishwanath Prasad (1971) 2 LLJ 340 [LNIND 1971 SC 386] (SC) : AIR 1971 SC 2417 [LNIND 1971 SC
386], per Mitter J.
44 Webster’s Third New International Dictionary, p 1469.
45 Sripati Ranjan Biswas v Collector of Customs AIR 1964 Cal 415 [LNIND 1963 CAL 126], 417, per BN Banerjee J.
46 WM Agnani v Badri Das (1963) 1 LLJ 684 [LNIND 1963 SC 74], 691 (SC), per Gajendragadkar J.
47 JK Cotton Spg & Weaving Co Ltd v Workmen (1965) 2 LLJ 153 [LNIND 1965 SC 153] (SC), per Mudholkar J.

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48 Delhi Cloth & General Mills Ltd v Kushal Bhan (1960) 1 LLJ 520 [LNIND 1959 SC 30] (SC) : AIR 1960 SC 806 [LNIND 1959
SC 30]: [1960] 3 SCR 227 [LNIND 1959 SC 30], per Wanchoo J.
49 New Victoria Mills Co Ltd v LC 1970 Lab IC 428 (All), per Beg J.
50 P Orr & Sons Pvt Ltd v PO, LC (1974) 1 LLJ 517 (Mad), per Ismail J.
51 Ruston & Hornsby (I) Ltd v TB Kadam (1975) 2 LLJ 352 [LNIND 1975 SC 231] (SC) : AIR 1975 SC 2025 [LNIND 1975 SC
231]: [1975] (31) FLR 173 : (1976) 3 SCC 71 [LNIND 1975 SC 231] : [1976] 1 SCR 119 [LNIND 1975 SC 231], per
Alagiriswami J.
52 Wimco Sramik Union v Seventh IT 1987 Lab IC 77 (Cal) (DB), per MN Roy J.
53 Vimla (Dr) v Delhi Administration AIR 1963 SC 1572 [LNIND 1962 SC 397], 1576-77 : 1963 Cr LJ 434 : [1963] Supp 2 SCR
585, per Subba Rao J.
54 Bank of India v D Padmanabhadu (1995) 1 LLJ 233, 235 (Kant), per Shivappa J.
55 Tika Ram & Sons Ltd v Workmen (1960) 1 LLJ 514 [LNIND 1959 SC 84] (SC), per Gajendragadkar J.
56 Workmen of Dem Dima Tea Estate v Dem Dima Tea Estate (1963) 1 LLJ 250 [LNIND 1962 SC 231] (SC), per Mudholkar J.
57 Cf WM Agnani v Badri Das (1963) 1 LLJ 684 [LNIND 1963 SC 74] (SC), per Gajendragadkar J.
58 Divl. Controller, KSRTC v AT Mane, AIR 2004 SC 4761 [LNIND 2004 SC 998]: : (2005) 3 SCC 254 [LNIND 2004 SC 998] :
2004 (8) SCALE 308 [LNIND 2004 SC 998] : (2004) 3 LLJ 1074 [LNIND 2004 SC 998] : 2004 LIC 3744, per Hegde J.
59 Regl. Mgr., UPSRTC v Hoti Lal, AIR 2003 SC 801 [LNIND 2003 SC 9]: 2003 Cr LJ 894 : 2003 (1) SCALE 76 [LNIND 2003 SC
9] : (2003) 2 SCC 202 [LNIND 2003 SC 9], per Pasayat J.
60 Bank of India v Avinash D Mandivikar, AIR 2005 SC 3395 [LNIND 2005 SC 693]: (2005) 7 SCC 690 [LNIND 2005 SC 693], per
Pasayat J
61 V Ramana v APSRTC , AIR 2005 SC 3417 [LNIND 2005 SC 672] (2005) 7 SCC 388, per Pasayat J
62 DPS Rural Regional Bank v Munna Lal Jain, AIR 2005 SC 584 [LNIND 2004 SC 1266]: 2004 (10) SCALE 590 [LNIND 2004 SC
1266] : (2005) 10 SCC 84 [LNIND 2004 SC 1468], per Pasayat J.
63 Divl. Exec. Engineer, APSEB v Pallappa Rao (2006) 4 LLJ 343 (AP), per NV Ramana J.
64 Maharashtra SEB v Suresh R Bhokare AIR 2005 SC 1622 [LNIND 2004 SC 1261]: (2005) 1 LLJ 429 [LNIND 2004 SC 1261] :
2004 (10) SCALE 526 [LNIND 2004 SC 1261] : (2005) 10 SCC 465 [LNIND 2004 SC 1261], per Hegde J.
65 Bharat Heavy Electricals Ltd v M Chandrasekhara Reddy, AIR 2005 SC 2769 [LNIND 2005 SC 83]: (2005) 1 LLJ 865 [LNIND
2005 SC 83] : (2005) 2 SCC 481 [LNIND 2005 SC 83], per Hegde J.
66 Divisional Controller, NEKRTC v H Amaresh, AIR 2006 SC 2730 [LNIND 2006 SC 519]: (2006) 6 SCC 187 [LNIND 2006 SC
519], per Lakshmanan J.
67 MV Bijlani v Union of India (2006) 5 SCC 88 [LNIND 2006 SC 257] : AIR 2006 SC 3475 [LNIND 2006 SC 257]: 2006 (2) LLJ
800 [LNIND 2006 SC 257].
68 APSRTC v Raghuda Siva Sankara Prasad, AIR 2007 SC 152 [LNIND 2006 SC 915]: (2007) 1 SCC 222, per Laskhmanan J.
69 Roop Singh Negi v Punjab National Bank, AIR 2008 SC (supp) 921, per Sinha J.
70 Chauhan J Vajesinh v Gujarat SRTC (2008) 2 LLJ 1155 (Guj .), per HK Rathod J.
71 Workmen of Balmadies Estates v. Mgmt, AIR 2008 SC (supp) 1366, per Pasayat J
72 Sarv UP Gramin Bank v Manoj Kumar Sinha AIR 2010 SC 2491 [LNIND 2010 SC 161]: (2010) 3 SCC 556 [LNIND 2010 SC
161], per SS Nijjar J.
73 Roble v Green [1895] 2 QB 315, 320 (CA).
74 Cf Daljeet& Co Pvt Ltd v State of Punjab (1963) 2 LLJ 17 (Punj), per Capoor J.
75 Pawan Kumar v State of Haryana (1996) 2 LLJ 703, 705 (SC), per Punchhi J.
76 Re: ‘P’ an advocate AIR 1963 SC 1313, 1316, per Gajendragadkar J.
77 GMohan v Assistant Collector of Customs, (1990) 1 LLJ 468 -69 (Mad), per David Annoussarny J.
78 Jaysingh Rangarao Raut v Maharashtra SEB (1980) 1 LLJ 117 [LNIND 1979 BOM 72], 120 (Bom), per SV Manohar J.
79 Risal Singh v Chandgi Ram AIR 1966 Punj 393 (DB), per Capoor J.
80 Mangali v Chhakki Lal AIR 1963 All 527 [LNIND 1962 ALL 75], 529, per Srivastava J.
81 Buddha Pitai v Sub-Divisional Officer, Malihabad, Lucknow AIR 1965 All 382 [LNIND 1965 ALL 147], 385 (FB).

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82 Pawan Kumar v State of Haryana (1996) 2 LLJ 703, 705 (SC), : AIR 1996 SC 3300 [LNIND 1996 SC 2868]: 1996 Lab IC 1740 :
(1996) 2 LLJ 703 : 1996 (4) SCALE 480 [LNIND 1996 SC 2868] : (1996) 4 SCC 17 [LNIND 1996 SC 2868] per Punchhi J.
83 Mgmt of T&FEtd v First Addl. LC (1982) 2 LLJ 403, 409 (Mad), per Padmanabhan J.
84 CSaseendran Nair v GM, State Bank of Tranvancore 1996 Lab IC 2543 (Ker) (DB), per Dhinakar).
85 SNoor Ahmed v State Bank of India 1992 Lab IC 1469, 1471 (AP), per Eswaraprasad J.
86 Post-Graduate IMER v LC (1990) 1 LLJ 70, 72 (P&H) (DB), per Bhalla J.
87 VB Dutt & Co Pvt Ltd v Workmen (1962) 1 LLJ 374 [LNIND 1962 SC 33] (SC) : AIR 1963 SC 1914 [LNIND 1963 SC 146]:
[1964] 3 SCR 616 [LNIND 1963 SC 146], per Wanchoo J.
88 Cf Local Government Board v Arlidge [1915] AC 120, 140, per Lord Parmoor.
89 Kannan Devon Hills Produce Co Ltd v LC (1967) 2 LLJ 631 (Ker), per Isaac J.
90 Sur Enamel and Stamping Works Ltd v Workmen (1963) 2 LLJ 367 [LNIND 1963 SC 146], 369 (SC) : AIR 1963 SC 1914
[LNIND 1963 SC 146]: [1964] 3 SCR 616 [LNIND 1963 SC 146], per Das Gupta J.
91 Jai Bhagwan v Mgmt. of the Ambala CCB Ltd 1983 Lab IC 1694 -96 (SC), per Chinnappa Reddy J.
92 Mrinal Kanti Chakraborty v State of WB 1993 Lab IC 1747, 1750 (Cal) (DB), per BP Banerjee J.
93 State of Mysore v Shivabasappa Shivappa (1964) 1 LLJ 24 (SC) : AIR 1963 SC 375 [LNIND 1962 SC 214] per Venkatarama
Ayyar J.
94 Kesoram Cotton Mills Ltd v Gangadhar (1963) 2 LLJ 371 [LNIND 1963 SC 95], 380 (SC) : AIR 1964 SC 708 [LNIND 1963 SC
95], per Wanchoo J.
1 Khardah & Co Ltd v Workmen (1963) 2 LLJ 452 [LNIND 1963 SC 138], 456 (SC) : AIR 1964 SC 719 [LNIND 1963 SC 138], per
Gajendragadkar J.
2 Central Bank of India Ltd v Parkash Chand Jain (1969) 2 LLJ 377 [LNIND 1968 SC 221], 384 (SC) : AIR 1969 SC 983 [LNIND
1968 SC 221], per Bhargava J.
3 Tata Engg. and Locomotive Co Ltd v SC Prasad (1969) 2 LLJ 799 [LNIND 1969 SC 114], 812 (SC), per Shelat J.
4 Jessop & Co Ltd v Fifth IT 1974 Lab IC 522, 525 (Cal) (DB), per Sabyasachi Mukharji J.
5 Firestone TRCI Ltd v Workmen (1967) 2 LLJ 715 [LNIND 1967 SC 243], 717 (SC), per Hidayatullah J.
6 AG Kher v Atlas Copco (India) Ltd (1992) 1 LLJ 423, 427 (Bom), per Sharad Manohar J.
7 CHC Tannery v LC 1969 Lab IC 1253, 1255 (All), per Gulati J.
8 Sur Enamel and Stamping Works Ltd v Workmen (1963) 2 LLJ 367 [LNIND 1963 SC 146] (SC), per Das Gupta J.
9 Sundarlal Dhanraj Kasliwal v Karmaveer KWSK Ltd (1996) 1 LLJ 332, 336 (Bom), per Srikrishna J.
10 Amulya Ratan Mukherjee v Deputy Chief Mechanical Engineer AIR 1961 Cal 40 [LNIND 1960 CAL 117], per Sinha J.
11 Sisir Kumar Das v State of West Bengal AIR 1955 Cal 183 [LNIND 1954 CAL 36], 187, per Sinha J.
12 JK Cotton Spg & Wvg.Mills Co Ltd v Jagannath (1963) 1 LLJ 475 (All), per SN Dwivedi J.
13 Marwari Relief Society, Calcutta v Bacha Misra [1953] LAC 537(LAT).
14 Ziakh v Firestone TRCI Ltd (1954) 1 LLJ 281 [LNIND 1953 BOM 121] (Bom) (DB), per Chagla CJ.
15 Laxmi Devi Sugar Mills Ltd v Nand Kishore Singh (1956) 2 LLJ 439 [LNIND 1956 SC 75]-40 (SC), per Bhagwati J.
16 Northern Rly CCS Ltd v IT (1967) 2 LLJ 46 (SC), per Bhargava J.
17 Miraj TGK Sangh v Manager, Shree Gajanan wvg. Mills (1992) 2 LLJ 686 [LNIND 1991 BOM 469]. 688 (Bom), per Srikrishna J.
18 Dunlop Rubber Co (India) Ltd v Workmen (1965) 1 LLJ 426 [LNIND 1964 SC 318] (SC), per Hidayatullah J.
19 New Victoria Mills Co Ltd v Jagannath (1964) 1 LLJ 110 (All), per Dwivedi J.
20 Bhanuprasad Deviprasad Mankad v State of Saurashtra AIR 1956 Sau 14 (DB), per Shah CJ.
21 Anand Parkash & Sons v Girja Shankar 1976 Lab IC 212, 214 (Del), per BC Misra J.
22 Remington Rand of India Ltd v Tahir ALI Baiji (1975) 2 LLJ 376, 378 (SC) : AIR 1975 SC 1896 : 1975 Lab IC 1437 : (1976) 3
SCC 69, per Alagiriswami J.
23 Burn & Co v Employees (1957) 1 LLJ 226 [LNIND 1956 SC 78], 234 (SC) : AIR 1957 SC 38 [LNIND 1956 SC 78], per
Venkararama Ayyar J.
24 Bennett Coleman & Co Ltd v M Valladores [1956] LAC 1(LAT).

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25 S Nagiah v Indian Aluminum Co (1991) 1 LLJ 554 (Kant) (DB), : ILR 1990 Kant 2744 per Mohan CJ.
26 Bharat Heavy Electricals Ltd v LC 1996 Lab I C 1178, 1180 (All), per Ganguli J.
27 N Subbiah v Indian Bank (1992) 1 LLJ 752, 755 (Mad), per Govindswamy J.
28 Cf, Binod Chandra Mazumdar v Union of India AIR 1960 Punj 147, per Grover J.
29 Oil India Ltd v CGIT 1980 Lab IC (NOC) 93 (Cal), per Amiya Kumar Mookerji J.
30 BS Hiremath v Sri Ganeshar Textile Mills 1979 Lab IC 155 (Kant), per Rama Jois J.
31 G Mckenzie & Co Ltd v Workmen (1959) I LLJ 285 (SC) : AIR 1959 SC 389 [LNIND 1958 SC 131], per Kapur J.
32 Bata Shoe Co Pvt Ltd v DN Ganguly (1961) 1 LLJ 303 [LNIND 1960 SC 345] (SC) : AIR 1961 SC 1158 [LNIND 1960 SC 345],
per Wanchoo J.
33 Delhi Electric Supply Undertaking v GP Satsangi, 1984 Lab IC 54, 65 (Del) (DB), per Khanna J.
34 N Lakshmanan Nambiar v State of Kerala 1991 Lab IC 1740, 1744 (Ker), per KA Nayar J.
35 Abid Mohammad Khan v State of MP (1958) 2 LLJ 425 (MP) (DB), per Dixit J.
36 Mohammad Azam v State of Hyderabad AIR 1958 AP 619, 623 (DB), per Jaganmohan Reddy J.
37 Marshall v English Electric Co Ltd [1945] 1 All ER 653, 655 (CA), per Lord Goddard.
38 Divl.Supdt., Northern Rly v Mukand Lal (1957) 2 LLJ 452, 456 (Punj) (FB), per GD Khosla J.
39 Hotel Imperial v Hotel Workers’ Union (1959) 2 LLJ 544 [LNIND 1959 SC 136] (SC) : AIR 1959 SC 1342 [LNIND 1959 SC
136], per Wanchoo J.
40 VP Gindornia v State of MP (1970) 2 LLJ 143 [LNIND 1970 SC 16], 149 (SC), per Hegde J.
41 Balvantrai Ratilal Patel v State of Maharashtra (1968) 2 LLJ 700 [LNIND 1967 SC 369], 703 (SC) : AIR 1968 SC 800 [LNIND
1967 SC 368], per Ramaswami J.
42 Ranipur Colliery v Bhuban Singh (1959) 2 LLJ 231 [LNIND 1959 SC 62], 235 (SC) : AIR 1959 SC 833 [LNIND 1959 SC 62], per
Wanchoo J.
43 Khem Chand v Union of India (1963) 1 LLJ 665 [LNIND 1962 SC 309], 669 (SC) : AIR 1963 SC 687 [LNIND 1962 SC 309], per
Das Gupta J.
44 V Subramaniam v SBI Staff Co-op. Society Ltd 1981 Lab IC 952 -53 (Mad) (DB), per Ismail CJ.
45 Hira Sugar Co-op Consumers Stores Ltd v PP Korvekal, 1995 Lab IC 1559, 1561 (Kant), per Thakur J.
46 Kailash Nath Pandey v State of Uttar Pradesh 1996 Lab IC 1485, 1487 (All), per Bhargava J.
47 National Insurance Co Ltd v Workmen CA Nos 693& 841 of 1966 (SC), per Shelat J.
48 Mangal Prasad verma v Bihar Coop Mktg Union 1969 Lab IC 788 -90 (Pat) (DB), per Kanhaiyaji J.
49 SSambandam v Secretary, Rly ECB Ltd (1978) 1 LLJ 342 -43 (Mad) (DB), per Veeraswami J.
50 Hotel Imperial, New Delhi v Hotel Workers Union (1959) 2 LLJ 544 [LNIND 1959 SC 136] (SC), per Wanchoo J.
51 Burn & Co Ltd v Workmen (1959) 1 LLJ 450 [LNIND 1958 SC 174], 459 (SC), per Imam J.
52 Cf Kesoram Cotton Mills Ltd v Gangadhar (1963) 2 LLJ 371 [LNIND 1963 SC 95],378 (SC), per Wanchoo J.
53 Rajasthan SEB v Narayan Lal Meena 1995 Lab IC 864 -65 (Raj) (DB), per Chopra J.
54 KSE Board v IT Calicut 1978 Lab IC 917 (Ker), per Khalid J.
55 Mgmt of Ideal Jawa (I) Ltd v T Ramu 1979 Lab IC (NOC) 32 (Kant), per Rama Jois J.
56 Rajasthan SRTC v LC (1998) 1 LLN 318 (Raj), per Bhagwati Prasad J.
57 Fakirbhai F Solanki v PO (1986) 2 LLN 741 (SC), per Venkataramaiah J.
58 Capt M Paul Anthony v BGML (1999) 1 LLJ 746 (SC).
59 State Bank of India v Harbans Lal (2000) 3 LLN 488 (SC).
60 Government of India (2002), Report of the NCL-II, Chapter 13, p 42. para 6.79.

End of Document

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER IV Procedure, Powers and Duties of Authorities

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER IV Procedure, Powers and Duties of Authorities

[S. 11A. Power of Labour Courts, Tribunals and National Tribunals to give
Appropriate Relief in case of Discharge or Dismissal of Workmen.(

Domestic Inquiry Proper

Domestic inquiry in Industrial law has acquired great significance and Industrial adjudication attaches considerable
importance to such inquiry.61 In a number of cases, the Supreme Court held that an inquiry is not an empty formality but an
essential condition to the legality of the disciplinary order. In other words, before the delinquent workmen can be
dismissed for misconduct, the employer should hold a fair and regular inquiry in to the misconduct and dismissal without
holding a regular inquiry would be an illegality.62It is well-settled that disciplinary inquiry has to be a quasi-judicial
inquiry held according to principles of natural justice and the inquiry officer has a duty to act judicially,63 because the
charges of misconduct, if proved, will result not only in deprivation of livelihood of the workman but will also attach
stigma to his character. Industrial adjudication, therefore, insists on a proper inquiry being held and that nothing should
happen in the inquiry either when it is held or after it is concluded and before the order of dismissal is passed, which would
expose the inquiry to the criticism that it was undertaken as an empty formality.64 However, in a case where the workman,
in answer to the charge levelled against him, admits his guilt, there will be nothing more for the management to inquire
into and in such a case holding of an inquiry would be a mere empty formality.65 A misconduct owned and admitted by the
delinquent workman is the antithesis of the violation of the principles of natural justice or victimisation, as the question of
prejudice does not arise under such circumstances,66 but in such a case, there must be an admission of guilt by the
delinquent workman in clear terms. Normally, therefore, in the absence of clear or unambiguous admission of guilt, failure
to hold domestic inquiry would constitute serious infirmity in the order of dismissal.67 In JS Khadgawat, the Rajasthan
High Court held that it is not a hard and fast rule that where the facts are indisputable or that they are admitted, it is not
necessary to observe the principles of natural justice. The so called admission of guilt by the employee may not be
conclusive evidence against him, and the employee is not bound to disclose his defence and give any explanation during
the course of preliminary inquiry. Therefore, where it was concluded that the employee was guilty of offence solely on the
basis of admissions made by him in the preliminary inquiry, the termination of his service without holding a regular
inquiry would be invalid.68 In Madikal Service Co-op Bank, in view of an alleged inculpatory statement, the employee was
dismissed from service without holding a full fledged domestic inquiry but the inquiry officer ignored the written
statement of defence in which the employee had denied all the charges and had also challenged the alleged inculpatory
statement said to have been given by him to the audit party as not a voluntary statement. Furthermore, the statement itself
did not specifically admit the facts mentioned in the charges and it contained only a general statement that he had
committed mistakes and was, therefore, guilty. In the circumstances, the perfunctory inquiry in which no witness was
examined on behalf of the employee, nor was he allowed to cross-examine the witnesses of the management, was held to
be invalid.69

But in Mangal Sen, a single judge of Allahabad High Court held that the mere fact that the employee had asked to be
excused did not mean that he pleaded guilty, particularly when his explanation contained a clear assertion that he was not
guilty. Therefore, the apology of the workman must be read in the context in which it was tendered. In the absence of
proper inquiry, the court held that the dismissal was void and ordered reinstatement of the workman with full backwages
and all attendant benefits.70 In the other hand, in a parallel line of cases,71 the Supreme Court has stated that in cases where
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the inquiry has been found to be invalid or where no inquiry at all was held, ‘the tribunal may give an opportunity to the
employer to prove his case and in doing so the tribunal tries the merits of the case itself. The ratio of these cases is that
where the domestic inquiry held by the employer is found to be invalid by the Industrial tribunal or no inquiry at all has
been held by the employer, the action of dismissal may still be sustained by the employer by justifying it before the
tribunal by adducing relevant evidence. In Motipur Sugar Factory, the defective-inquiry-cases were equated with no-
inquiry-cases. In such cases, the tribunal would have jurisdiction to go into the facts and the employer would have to
satisfy it that the order of dismissal was proper on facts.72 In RK Jain, Vaidialingam J elaborated that it is open to the
management to rely on the domestic inquiry conducted by it and satisfy the tribunal that there is no infirmity attached to
the same and the management has also got a right to justify on facts as well that its order of dismissal was proper.73 This
principle was reaffirmed in Ludh Budh Singh.74 In Firestone, the Supreme Court reiterated the law that in both the cases of
‘no inquiry’ and ‘defective inquiry’, the employer can still justify his action by adducing evidence before the tribunal.
Faced with this situation, the court tried to clarify that it should not be understood as laying down that there is no
obligation whatsoever on the part of an employer to hold an inquiry before passing an order of discharge or dismissal. The
court enumerated four advantages of a domestic enquiry held by the employer:

(i) in spite of its wider powers of adjudication now, the tribunal will have to give cogent reasons for not accepting the
conclusions of the inquiry officer in a case where a proper inquiry has been held and a correct finding is arrived at
regarding the misconduct of the workman;
(ii) it will also enable the employer to persuade the tribunal to accept the inquiry as proper and the finding as correct;

(iii) by holding a proper inquiry, the employer will escape the charge of having acted arbitrarily and mala fide; and

(iv) the holding of a proper and valid inquiry will conduce to the harmonious and healthy relations between the employer and
the workmen and it will serve the cause of Industrial peace.75

In Makhan Singh, Venkataramiah J, held that, on a consideration of the whole material placed before the court, the
decision of the management to terminate the services of the appellant without holding any domestic inquiry was not a bona
fide one. The court noticed that the labour court upheld the dismissal on the basis of the evidence led by the employer
before it in order to justify the dismissal of the workman. Then, on its own appraisal of the evidence, the Supreme Court
held that the order of the labour court was not sustainable as ‘the approach adopted by it to the whole case was highly
casual and superficial.76 Upto this extent, the holding of the court is correct but the further observation that the termination
of the service of the workman was not bonafide, on the sole ground that no domestic inquiry was held, is misconceived.
The mere fact that the employer has not held the domestic inquiry cannot lead to the inference that the termination of
service was not bona fide. The law relating to the requirement of holding domestic inquiries in disciplinary action against
Industrial workmen, as enunciated by the Supreme Court in its pronouncements bristles with contradictions and requires
complete restatement. In the absence of judicial guidelines, the legislature must clarify the position so that the parties know
about the right course to be followed. The decision rendered by Venkataramaiah J in Makhan Singh was itself wrong and
misconceived, being wholly inconsistent with the law laid down in Delhi Cloth Mills, Motipur Sugar Factory and
Firestone, which are authorities for the proposition that, even in the rarest of rare cases where the employer did not
conduct an enquiry before dismissing a workman, his right to adduce evidence before the labour court in support of the
action of dismissal remains unscathed. In Khichrolia, a single judge of Madhya Pradesh High Court held that in the
absence of any provision in the rules for continuance of departmental enquiry after superannuation, the employer had no
legal authority to continue with disciplinary inquiry and to take any consequential action by way of punishment or
recovery.77

(i) Inquiry (Enquiry) Officer

After service of charge-sheet on the delinquent employee, the management has to appoint an inquiry officer for holding
inquiry into the charges levelled against him. In the absence of any statutory provision or contractual postulate, holding of
disciplinary proceedings is purely a managerial function. Therefore, even if an order appointing an inquiry officer has been
made on behalf of the management by an authority who is not competent under the rules which have no statutory force, the
same cannot be regarded as invalid, but where the Standing Orders provide the mode of appointment of an inquiry officer,
the inquiry will be illegal if the inquiry officer is not appointed in accordance with such Standing Orders.78 In Capstan
Meters, the relevant Standing Order provided that in case of a major misdemeanour, the inquiry against the delinquent
workman, shall be held by ‘an officer or officers’ of the company appointed for the purpose, before taking any disciplinary
action but the impugned inquiry was held by an advocate instead of ‘an officer’ of the company. A single judge of the
Rajasthan High Court held that the inquiry held by the advocate was invalid because the Standing Orders were binding on
the employer as well as on the employee.79 In Bernard, in terms of a settlement, the employer bank appointed a special
officer of the bank to hold inquiry into the alleged acts of misconduct against the delinquent employee but during the

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pendency of the inquiry, the inquiry officer retired from the service on superannuation. However, the inquiry officer
completed the inquiry after his retirement, in which the employee participated throughout even after the retirement of the
inquiry officer, without raising any objection. The Bombay High Court in a writ petition filed by the employee held that on
retirement, the inquiry officer had no authority to proceed further with inquiry. Hence, the order imposing punishment
based on such inquiry, was incompetent and without jurisdiction. The court, therefore, quashed the order of punishment
and directed that the workman be paid ‘all consequential benefits’. In appeal by special leave against the order of the High
Court, the Supreme Court upheld the order of the High Court quashing the impugned order of punishment but having
regard to the special facts and circumstances of the case, it held that the High Court should not have ordered payment of
‘all consequential benefits’, and modified the order of the High Court to the extent that the employee will be paid only 50
per cent of the consequential benefits.80

Though domestic inquiries need not be conducted in accordance with the technical requirements of criminal trials, they
must be fairly conducted and in holding them, considerations of fair-play and natural justice must govern the conduct of
the inquiry officer.81 A domestic inquiry must be held by an unbiased person. The inquiry officer should not be biased in
favour of or against either of the parties.82 In other words, the delinquent is entitled to have the disciplinary proceedings
dealt with by an unbiased person, who is wholly unconnected with the incident in question.83 ‘If it’s a goose that’s on trial
there must be no fox in the jury’. The principle that justice must not only be done but must manifestly and undoubtedly be
done applies with equal force to domestic inquiries just as it applies to the quasi-judicial, administrative and judicial
tribunals. If the employer appoints a person as an inquiry officer who has directly dealt with the charge or guilt complained
of, such an inquiry will be nothing but a mockery and idle ceremony because there will be real likelihood of bias on the
part of the inquiry officer.84 A person with a bias against anyone of the parties interested in the disputed misconduct shall
not be a proper person to hold the inquiry, and the inquiry held by such a person would be improper. Any person who sits
in judgment over the rights of others should be free from any kind of bias and must be able to bear an impartial and
objective mind to the questions in controversy. Where a person who discharges a quasi-judicial function has shown by his
conduct, that he is interested in either of the parties, that will disentitle him from acting in that capacity.85 If, therefore,
from the record of a domestic inquiry, it is patent that there was a likelihood of bias in the person who conducted the
inquiry, the inquiry would be vitiated.86 The point of bias has been illustrated in the decision of the Supreme Court in
Kalyani.87 The workman objected to the inquiry being held by a particular officer on the ground that the officer was biased
against him on account of the fact that he had given evidence against him in a case which had resulted in infliction of a fine
on that officer. The conclusion of the labour court that the inquiry was vitiated as it suffered from a serious defect of bias,
was affirmed by the Supreme Court.

However, the bias of the inquiry officer has to be specifically pleaded and proved before the adjudicator. In the absence of
any particulars of bias, the inquiry cannot be held to be vitiated.88 For instance, where the workman takes part in the
inquiry without raising any objection and then makes imputation against the inquiry officer of bias, the inference of bias
should not easily be drawn because otherwise the delinquent workman will be able to make the holding of an inquiry
against him impossible by making imputations against every inquiry officer whenever he finds the trend of the inquiry
going against him.89 However, if from the records of the domestic inquiry itself it is patent that there was likelihood of bias
in the person who conducted the inquiry, the fact that the question of bias was not specifically raised may be immaterial.90
However, if the workman not only does not take any objection to the inquiry being held by a particular person but also
categorically states that he has no objection to the inquiry being held by that person and does not make any allegation
against the inquiry officer in his pleadings, he cannot be permitted to raise the question of the bias of inquiry officer.91 The
mere fact that the delinquent applied for change of inquiry officer which was not conceded would not give rise to inference
of bias particularly when the delinquent is exonerated of some charges while he is found guilty of some others. Bias on the
part of the inquiry officer, in such circumstances, cannot be said to have been proved.92 The prevalent view is that the mere
fact that the inquiry officer is an employee of the management cannot lead to the assumption that he was bound to decide
the case in favour of the management.93 Likewise, the fact that the inquiry officer was subordinate to the disciplinary
authority would be no ground for holding that he acted mala fide or had bias against the delinquent employee.94 Similarly,
the fact that the inquiry was held by an employee of the company who had talks with the management about fixing the
time and date of the inquiry would not vitiate the inquiry.95 Nor does the mere fact that a person received remuneration
from the employer for his services disqualify him from holding a domestic inquiry as a biased person.96 The fact that the
inquiry officer happened to be a shareholder of the company will not lead to the inference of bias.97 It is well-known that
inquiries of this type are generally conducted by officers of the employer companies and in the absence of any special bias
attributable to a particular officer, it has never been held that the inquiry is bad just because it is conducted by an officer of
the employer. For the same reason, a person who had been engaged as a lawyer by the employer in some other prior case
and was subsequently engaged to hold a domestic inquiry against a workman, would not be incompetent on the ground of
bias to conduct the domestic inquiry. It cannot, therefore, be said that the inquiry officer has a bias in favour of the
employer merely because he is the employer’s lawyer and was previously engaged by the employer in Industrial matters.98
A lawyer must normally be presumed to be a man who can act with a sense of detachment and without bias or prejudice as
he is trained in law and an inquiry, therefore cannot be said to be vitiated by the mere fact that the employer’s lawyer

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conducted it,99 but it would be a different matter if the lawyer has given advice to the employer in connection with the
disciplinary proceedings against a workman for an act of misconduct and then was appointed inquiry officer to inquire into
the same act of misconduct against the workman. Further, the fact that the examination of some of the witnesses was
detailed or persistent, would also not warrant a finding that the inquiry officer was biased against the concerned workman.1
Nor does the fact that the inquiry officer attested the statements of the witness lead to the inference that he was biased.2

Contrary to the settled law, a few High Courts took the view that the appointment of an outsider, an advocate, as inquiry
officer would vitiate the proceedings, if there were a provision for appointment of inquiry officer from among the
employees of the company only, and not otherwise.3 This view seems to be ill-founded and incorrect. The mere fact that
there is a provision in the Standing Orders for appointment of the inquiry officer from within the company does not operate
as a bar to engage an advocate as the inquiry officer. It may be that in some cases of alleged misconduct directed against
the supervisory or managerial personnel or those involving inter-group and inter-union clashes, it is to the distinct
advantage of the workmen to have the enquiry conducted by an impartial outsider than by a company official. The fact that
the outsider has no personal knowledge of the background of the workman against whom the charges were framed, itself is
a factor which works out to the advantage of the charge-sheeted workman. Entrusting the domestic inquiry to an outsider,
in such circumstances, would also absolve the management of the charge of infusing bias or importing personal knowledge
into the inquiry process. An inquiry cannot be said to be held properly when the person holding it begins to rely on his own
knowledge or statements.4 In Associated Cement Companies, the Supreme Court observed that in deciding the question as
to whether the explanation given by the workman was true or not, the inquiry officer should not have imparted his personal
knowledge and the knowledge of his colleagues and should also not have relied on reports received from other witnesses.5
Similarly in Doomur Dullang Tea Estate, the inquiry was held to be vitiated as the inquiry officer had imparted personal
knowledge of the incident and also had earlier complained in the criminal cases arising out of the same incident against the
workmen. In a case, where the inquiry officer claims to have seen the misconduct having been committed by the workman,
in all fairness the inquiry should be entrusted to some other person. This is based on the salutary rule that justice must not
only be rendered, but must also appear to be rendered.6 Likewise, where the charges levelled against an employee were
inquired into by the board of directors, two of whom had already made statements in support of the charges, copies of
which statements were not furnished to the employee, the inquiry was held to be vitiated for violation of the principles of
natural justice.7

Andhra Scientific Co, illustrates the principle that where the inquiry officer takes on the role of a witness in addition to his
own, the inquiry would be vitiated as being a clear violation of the canons of fair play and natural justice. The workman, in
this case, was charged with recklessness and inefficiency in the conduct of his work as the store’s manager. The inquiry
was commenced by the general manager himself and after five witnesses had been examined, the general manager stepped
down and the inquiry was taken over by another officer who was till then incharge of securing evidence in the case to
establish charges against the workman concerned. The general manager then gave evidence as a witness in the case but the
decision that the workman was guilty of the charges of the alleged misconduct was reached by the other officer. On the
basis of these findings reached in the inquiry, the workman was dismissed. Affirming the conclusion of the labour court
that the inquiry was vitiated for violation of the principles of natural justice, the Supreme Court held that the inquiry
suffered from two grave infirmities; firstly, the person who had presided over the inquiry at the initial stages, stepped down
and came into the witness box in the later stage which was quite incongruous; secondly, the very person who was in charge
of the prosecution at the earlier stage and was actively concerned in securing the evidence against the workman, took over
the inquiry and after finding the workman guilty of the misconduct, passed the order of punishment. Speaking for the
Supreme Court, Das Gupta J observed:

One can see that in the facts of this case the general manager and Ramanatha Babu formed practically one entity, with two bodies.
At one stage, the first acts as a judge; at a later stage, he steps down as a witness; and the second becomes a judge. There is the
further fact here that the person who gave the actual decision had actively been procuring the evidence, with the avowed motive of
securing a conclusion against the workman. These being the facts, the manner in which the inquiry was conducted in this case can
hardly be said to have ensured fairplay which rules of natural justice require.8

In Meenglas Tea Estate, the inquiry into the alleged misconduct of assault against the delinquent workman was held by
two officers who themselves were the victims of the alleged assault. Affirming the award of the tribunal, that the inquiry
was vitiated, the Supreme Court observed ‘that the inquiry officers were not only in the position of judges, but also the
prosecutors and witnesses and there was no opportunity to the persons charged to cross-examine them and indeed they had
drawn upon their own knowledge of the incident and instead cross-examined the person charged, which was a travesty of
the principles of natural justice.9 In Lambabari Tea Estate, in which the domestic inquiry was presided over by the
manager himself and was conducted in the presence of the assistant manager and two others, the manager recorded the
statements, cross-examined the labourers who were the offenders, made and recorded his own statement of facts and
questioned the offending labourers about the truth of his own statements recorded by himself. Hidayatullah J observed:

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The manager did not keep his function as the inquiring officer distinct but became witness, prosecutor and manager in turns. The
record of the inquiry as a result is staccato and unsatisfactory. 10

In other words, inquiry should always be entrusted to a person who is not a witness or biased against the workmen because
an inquiry cannot be said to be properly held when the person holding the inquiry is biased and begins to rely on his own
statements. If it is not possible to find such a person, some officer from another establishment should be asked to help in
the matter. Likewise, a person who has witnessed the event which is the subject-matter of the charge-sheet and held the
domestic inquiry in the charges. For instance, where an officer himself had seen the stolen property recovered from the
delinquent workman, was held not to be an unbiased inquiry officer against the workman11 but the mere fact, that the
inquiry officer accompanied the assaulted person to the police station on the day following the day of occurrence, would
not make the inquiry officer an eye-witness of the occurrence and incompetent to hold the inquiry.12 It is desirable that the
inquiry should be left to be held by some other persons, who are not likely to import their personal knowledge into the
proceedings which they are holding as inquiry officers because where the inquiry is held by a person, who has himself
witnessed the alleged incident, injustice is likely to result.13 It is open to the employer to entrust an inquiry against a
delinquent workman in an act of misconduct to an outsider. There is no rule that in every case an inquiry must be held by
an officer of the employer company and it cannot be said that a domestic inquiry is illegal or void merely because the
person who held the inquiry was an outsider and not an officer of the employer.14 Likewise, if an employer company,
appoints a person from another establishment at another place who could be expected to take more detached and impartial
view of things instead of appointing a local officer as inquiry officer, in the absence of any provision in the Standing
Orders to the contrary, no prejudice can be said to have been caused to the workman, particularly when he does not take
objection to the appointment of such an officer in the initial stages and appears before him and submits to his jurisdiction,
he cannot later be heard to be saying that he was, in any way, prejudiced on account of the appointment of the inquiry
officer.15

In Buckingham & Carnatic, the relevant Standing Order required that in dismissal cases, the ‘manager’ of the mills should
hold the inquiry. The mill manager asked the senior labour officer of the mills to record evidence of the witnesses after
issuing the charge-sheet to the concerned workman. After considering the evidence recorded by the senior labour officer,
the mill manager found the workman guilty of the charges and dismissed him from service. The order of dismissal was
challenged, before the labour court on the ground that it was only the mill manager who could validly hold the inquiry and
since the evidence was recorded by the senior labour officer, it was bad for non-compliance with the requirements of the
relevant Standing Orders. Affirming the decision of the labour court, the Supreme Court held that the senior labour officer
had confined himself to merely collecting evidence and it was the mill manager who had found him guilty of the charge
after giving fair and full opportunity to the workman, and consequently, passed the order of dismissal and there was no
Standing Order prohibiting the mill manager from asking the senior labour officer from collecting the evidence.16 In
TELCO, speaking for the court, Shelat J observed that an inquiry officer is not entitled to bring the facts which do not form
part of the evidence in his report and doing so would vitiate the inquiry. However, from the report of the inquiry officer, it
was clear that no extraneous matter was relied on by him in holding any of the workman guilty of the charges against him
and the observations regarding such matters were merely incidental. The court stated the general rule in the following
words:

Industrial tribunals, while considering the findings of domestic inquiries, must bear in mind that persons appointed to hold such
inquiries are not lawyers and that such inquiries are of a simple nature where technical rules as to evidence and procedure do not
prevail. Such findings are not to be lightly brushed aside merely because the inquiry officers, while writing their reports, have
mentioned facts which are not strictly borne out by the evidence before them. Of course, if the inquiry officer were to transgress
the rules of natural justice by relying on matters which the workman had no opportunity to meet, the validity of his findings would
be affected. 17

In Pravin Dudhara, the management appointed an inquiry officer, but it did not appoint any presenting officer to represent
its case before the inquiry officer. In this situation, during the course of the evidence, the inquiry officer asked some
clarificatory questions of the witnesses. The inquiry was challenged on the ground that the inquiry officer combined the
role of the judge and the prosecutor by asking the questions of the witnesses. A single judge of the Bombay High Court
held on the facts and in the circumstances of the case, that the questions asked by the inquiry officer, were not in the nature
of cross-examination but were merely of clarificatory nature. Furthermore, the inquiry officer had given full opportunity to
the delinquent to cross-examine all the witnesses of the management. It was not obligatory on the part of the management
to appoint a presiding officer. In this situation, it was held that the inquiry was not vitiated for violation of the principles of
natural justice.18 In Shyam Bahadur Tripathi, the domestic inquiry into the charges against the delinquent employee was
transferred to the departmental officer from impartial officers in violation of the departmental instructions which directed

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that the inquiry should be held by independent agencies like retired judicial officers. The Supreme Court held that the
instructions were only guidelines for the authorities. It was, therefore, an appropriate case where the power of the
corporation to entrust the inquiry to its own officer was validly exercised. The conduct of the inquiry officer in the
circumstances of the case was not vitiated.19

(ii) Procedure of Domestic Inquiry

Neither the Industrial Disputes Act 1947 nor the rules thereunder prescribe any procedure to be followed by employers in
domestic inquiries for investigating the misconduct of delinquent industrial employees.20 An inquiry officer has limited
powers, unlike a regular court where oath can be administered and attendance of witnesses can be compelled and where
counsel can represent the parties, because domestic inquiries are not governed by strict rules of evidence. Therefore, while
judging the evidence led before such a domestic inquiry, it is not open to apply strict standards.21 It is well-settled that the
domestic inquiries do not stand on the same pedestal with the trials of actions or cases in a court; they are not governed by
technical rules or procedural law.22 In the absence of any statutory provisions relating to procedure, the domestic inquiries
held by employers in dealing with cases of misconduct alleged against their employees, though need not conform to all the
requirements of judicial proceedings, they must, however, satisfy the essentials of natural justice.23 The guiding principle,
therefore, is that the inquiry should be conducted with scrupulous regard for the requirements of the rules of natural justice,
that is, without bias, and by giving the delinquent employee, an opportunity for adequately representing his case, as the
question of action taken by the employer is at issue. Apart from compliance with the requirement of the rules of natural
justice, the inquiry must be held honestly and bona fide with a view to determine whether the charge against a particular
employee is proved or not and care must be taken to see that these inquiries do not become empty formalities.24

The basic postulate of a domestic inquiry is that it must be fair in all respects and should not be conducted with ‘evil eye
and uneven hand’. Fairness, particularly requires that it must be conducted as expeditiously as possible without brooking
any unnecessary delay. Normally, disciplinary proceedings must commence at an early date and should be completed
without much delay. There is no period of limitation for initiating the disciplinary proceedings but it must be held within ‘a
reasonable time and the length of the reasonable time must be determined by the facts of the case and the nature of the
order’ passed in such proceedings.25 The mere fact that there was some delay in initiating the disciplinary proceedings will
not be sufficient to vitiate the inquiry. If the delay causes prejudice to the workman, normally courts will take serious note
of it,26 but initiation of disciplinary proceedings, itself may lead to the inference of mala fide on the part of the employer.
In Jagdishmal Bhansali,27 the employee was exonerated of the charges levelled against him on the basis of a preliminary
inquiry and thereafter he was even promoted to the next rank but nine years after that, in the preliminary inquiry, a regular
inquiry was initiated against him without assigning any reasons for revocation of the earlier decision. The Rajasthan High
Court held that the initiation of the disciplinary proceeding culminating in dismissal of the employee was not only violative
of the rules of natural justice but the entire exercise was mala fide and motivated to punish the workman. The steps
generally taken in holding a domestic inquiry are: (a) Notice of Inquiry; (b) Pleadings; (c) Representation of Parties; (d)
Evidence and Rules of Natural Justice.

(a) Notice of Inquiry

In order to be able to take part in the inquiry, the charged workmen must have notice of the day, time and place of inquiry.
The charge-sheet cannot be equated to the notice of inquiry. Even if the workman fails to submit his reply to the charge-
sheet, the inquiry officer is not absolved from his duty to send the notice to the delinquent employee informing him about
the date, time and place of inquiry which would enable him to produce his witnesses and cross-examine the witnesses
produced against him. Non-compliance of this requirement, would be violative of rules of natural justice.28 Fairness
demands that the workman should be told sufficiently in advance as to when and where the inquiry is going to be held so
that he has an opportunity to prepare himself to make his defence at the inquiry and to collect such evidence as he wishes
to lead in support of his defence. It would not be proper that the workman should be called on any day without previous
intimation and the inquiry should begin straight-away. It may be that failure to intimate the workman concerned about the
date of the inquiry may, by itself, not constitute an infirmity in the inquiry, but such a course should ordinarily be avoided
in holding domestic inquiries in industrial matters.29 A single judge of the Punjab and Haryana High Court held:

It is the function of the management to serve notice and to inform the employee verbally in the presence of a witness the date and
time at which the inquiry into his alleged misconduct is to be held. The Standing Orders do not require that the inquiry officer has
to initiate the preliminary proceedings regarding giving of notice and informing the employee concerned of the date and time when
the matter would be taken up and of the allegations against him. 30

In this view of law, the High Court discountenanced the view taken by the tribunal that the inquiry officer assumed the
functions of a judge and it is for him to fix a date and time for the inquiry and to inform both parties about the same,

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because the duty is cast upon the employer under the Standing Orders and the tribunal has to see whether the procedure
laid down in the Standing Orders has been observed or not. If an inquiry is held without informing the workman of the
specific time of the inquiry,31 or if he is informed in the forenoon to attend the domestic inquiry in the same evening,32 it
will not be sufficient notice of inquiry and would be a denial of reasonable opportunity but there is no statutory provision
requiring that a delinquent workman should be given an opportunity to explain why an inquiry in respect of a charge
should not be conducted against him. All that he is entitled to have is that he should be given a notice of the charges
against him and of the allegations on which the charges are based, and a fair and reasonable opportunity to meet the
charges and establish his defence, if any, before the inquiring authority.33 Though the principles of natural justice require
that a notice of proposed domestic inquiry to be held should be given to the concerned workman, they do not require that
even if after giving the notice the concerned person remains absent, the inquiry should not be held in his absence. In other
words, a domestic inquiry, held ex parte after giving the concerned workman due notice, would not be violative of the
principles of natural justice.34

The mode of giving the notice of the domestic inquiry may be provided by the Standing Orders of an establishment. If the
notice is given in compliance with the requirements of the Standing Orders, it will be sufficient notice. In McKenzie,
before commencing the inquiry, the management sent notices of the inquiry to the concerned workmen by registered post
at their addresses registered with the company and also affixed the notices on the company’s notice board, both inside the
premises and outside the gate of the factory and these notices had remained so affixed for a month and a half. Some of the
notices sent by registered post were returned unserved. The company had also written to the union asking for the addresses
of the workmen who had not been served, but no reply was received. Subsequently, the inquiry proceeded ex parte against
those workmen who were absent as a result of which some of the workmen were found guilty of the acts of misconduct
alleged against them and their services were terminated. While upholding the action of the management, the Supreme
Court observed that the company had made every effort, under the circumstances, to serve the notice on the workmen
concerned in the inquiry and it could not be said that the workmen did not have a proper notice of the charges or were not
given a proper opportunity to meet the case against them.35 In Bata Shoe Co, the Standing Orders of the company provided
that the workman charged with any misconduct shall receive a copy of the charge against him and there was no provision
in the Standing Orders for affixing the charges on the notice board of the company. The company dismissed 60 of its
workmen for having participated in an illegal strike and in the case of 13 of these workmen, it was proved that they had not
been served with the charge-sheet and the notice of inquiry and the inquiry took place in their absence. The company had
posted the notices and the charge-sheets on its notice board and also published the notices and charge-sheets in the local
papers, when the charge-sheets sent by registered post had been returned unserved. However,the notice of inquiry
published in the local papers did not contain the names of the 13 workmen. In these circumstances, it was held that these
workmen did not have notice of the inquiry. The court observed that the mere display of the notices on the notice board or
their publication in the newspaper without specifying the names of the persons charged would not meet the requirements of
communication adequately. In view of this basic lapse, the order of dismissal was held invalid on the ground that
principles of natural justice were violated.36 Likewise, where the delinquent workman was not aware of the inquiry held
against him and there was no allegation or proof adduced by the employer that the workman deliberately evaded service of
the notice intimating him about the date of the inquiry, the inquiry was held to be vitiated for want of proper notice.37

(b) Pleadings

In industrial adjudication, for instance, the fact that all aspects of the question in reference to the charter of a worker’s
employment were not set out in the written statement, would not affect the credibility of the evidence led by him at the
trial.38However, the pleadings of the parties before an inquiry officer must state their respective cases, though they may not
strictly conform to the technical procedural requirements. Since, after the insertion of s 11A in the Industrial Disputes Act,
the tribunals will have to confine themselves to the ‘materials on record’, the pleadings of the parties, before the inquiry
officer, have become all the more of vital importance. The tribunals will not permit the parties to go beyond these
pleadings while adjudicating upon the industrial disputes falling within the purview of s 11A.

(c) Representation of Parties

The traditional judicial approach to the representation of the parties before the domestic tribunals is that a domestic inquiry
is a managerial function and as such, it is best left to the management without the intervention of outsiders and persons
belonging to legal profession. This approach is based on the view that inquiries before the domestic tribunal are of simple
nature where technical rules as to evidence and procedure do not prevail and the persons appointed to hold such inquiries
are generally not lawyers.39 In other words, inquiry officers holding inquiry without being unduly influenced by strict rules
of evidence and the procedural juggernaut should hear the delinquent employee in person and in such an informal inquiry,
the delinquent officer would best be able to defend himself.40 There is no provision of law entitling the charged workman
to be represented by anybody else before the domestic inquiries. The rules of natural justice do not postulate that in
domestic inquiries into the charges of misconduct against an industrial employee, he should be represented by a member of

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his union.41 In N Kalindi, the Supreme Court observed that a workman had no right to be represented in the domestic
inquiry by a representative of his union though the inquiry officer in his discretion, may allow an employee to avail
himself of such assistance. In the facts and circumstances of the case, the court held that the inquiry was not vitiated by the
fact that the delinquent workmen were not allowed to be represented in the domestic inquiry by a representative of their
union.42 In Brooke Bond, the court held that the refusal by the inquiry officer to allow a workman to be represented by a
lawyer or by an outsider, did not vitiate the inquiry.43 In the absence of any provision in the Standing Orders, the general
practice adopted by the domestic tribunals is that the accused person himself conducts his case but generally, the Standing
Orders of large industrial establishments make provisions for representation of parties through outsiders in domestic
inquiries. In other words, the refusal by the inquiry officer to a party to be represented by another person permitted by the
Standing Orders would vitiate the inquiry.44 In Dunlop, the Standing Orders of the company provided that only a
representative of the union which was registered under the Indian Trade Unions Act 1926 and was recognised by the
Government could represent a workman in the domestic inquiry. The Supreme Court held that the refusal by the inquiry
officer to allow the workman to be assisted by the workman’s own union which was not registered or recognised did not
vitiate the inquiry. The court observed:

In holding domestic inquiries, reasonable opportunity should be given to the delinquent employees to meet the charge framed
against them and it is desirable that at such inquiry the employees should be given liberty to represent their case by persons of their
choice if there is no Standing Order against such a course being adopted and if there is nothing otherwise objectionable in the said
request.45

It was held that there is no right to representation as such, unless the employer by his Standing Orders recognised such a
right and the refusal to allow representation by any union, unless Standing Orders confer that right, would not vitiate the
proceedings. In the circumstances of the case, refusal of the inquiry officer to accede to the request made by the workman
did not introduce any serious defect in the inquiry itself. However, the latest trend is in the direction of permitting a person
who is likely to suffer serious civil or pecuniary consequences as a result of the inquiry, to enable him to defend himself
adequately by outsiders or legal practitioners.46 In England, speaking for the Court of Appeal in Greyhound Racing, Lord
Denning, MR, observed that when a man’s reputation or livelihood is at stake, he not only has a right to speak by his own
mouth but has also the right to speak by counsel or solicitor.47 This view of Lord Denning was not followed by the Indian
courts earlier, but they gradually started recognising that the denial of assistance to a delinquent workman who is an
illiterate person, would amount to denial of fair opportunity.48 In the last edition of this book at p 820, it was stated thus:

But the observations of Lord MR Denning, in Pett’s case are worthy of a serious consideration. In this connection, it may not be
irrelevant to point out that in a domestic inquiry in a disciplinary matter, verily the reputation and the livelihood of a workman are
at stake. In a number of decisions, the Supreme Court has noted that industrial workmen in India are illiterate persons.49

These days, generally, the persons who are appointed to hold inquiries are well trained persons and occasionally even
lawyers are appointed for this purpose. The employers also have highly trained persons who represent them in such
inquiries. If a workman is not properly represented, he may be seriously prejudiced in his defence. Apart from illiteracy, it
is not every man who has the ability to defend himself on his own as he may not be able to bring out the points in his own
favour or the weakness of the other side as successfully as a skilled man in this behalf may be able to do. The workman
may be nervous, tongue-tied, confused or wanting in intelligence and thus lack the ability to examine or cross-examine
witnesses.50 Desai J, observed:

In the absence of embargo on the right of the delinquent employee to be represented by a legal practitioner, the matter would be in
the discretion of the inquiry officer whether looking to the nature of the charges, the type of evidence and complex or simple issues
that may arise in the course of inquiry, the delinquent employee in order to afford reasonable opportunity to defend himself should
be permitted to appear through a legal practitioner .. In our view we have reached a stage in our onward march to fair play in action
that where in an inquiry before a domestic tribunal the delinquent officer is pitted against a legally trained mind, if he seeks
permission to appear through a legal practitioner refusal to grant his request would amount to denial of a reasonable request to
defend himself and the essential principles of natural justice would be violated. 51

The Calcutta High Court in Director General, P&T, held that the refusal to allow a public servant to be represented by a
legal practitioner in a domestic inquiry was violative of the statutory rule as well as Art 311 (2) of the Constitution.52
Another Division Bench of that High Court, dealing with an industrial matter in India Photographic, has enunciated the
principle that though the court should discourage the involvement of legal practitioners in simple domestic inquiries like
disciplinary inquiries for avoiding complication and delay, yet the court cannot ignore the necessity of such representation

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in exceptional circumstances where refusal of such a representation would constitute failure of the inquiry itself, the
principles of natural justice demand conceding of such a claim. However, the court pointed out that no general rule could
be laid down in this respect but the issue must be left for consideration in the light of the facts of each individual case. In
this case, the delinquent workman was charged with the offences of misconduct of forgery and misappropriation, which if
established would not only affect his reputation and livelihood but would also totally ruin his life. In the circumstances, it
was held that the court rightly exercised its discretion when it directed that the workman be permitted to be represented by
a lawyer in this domestic inquiry.53

On the other hand, a single-judge of the Madras High Court in A Veeman, held that the facts of the case did not warrant
permitting engagement of a lawyer in the domestic inquiry. The court observed that in a domestic inquiry, the workman
cannot insist on taking the assistance of the legal practitioner as an inherent right though it is to be ensured that he does not
stand at a disadvantage and there is no breach of the rule of fair play.54 In Harinarayan Srivastav, the Supreme Court held
that where the allegations were very simple and were not complicated, the denial of permission to be represented by an
advocate would not violate the principles of natural justice, even though the bipartite settlement provides for such
representation with the permission of the management.55 ln Bharat Petroleum, the Supreme Court held that the basic
principle is that an employee has no right of representation in the departmental proceedings by any other person or lawyer
unless the service rules specifically provided for the same.56 Where the Standing Orders provided that a workman can be
defended in a domestic inquiry by a lawyer only with the permission of the management, it was held that the workman had
no absolute right to be defended by an advocate in the enquiry, and it could not be said that there was violation of
principles of natural justice merely because he was denied permission to be defended by an advocate.57 As against this, a
single judge of the Madras High Court held that where the rules applicable to domestic inquiry do not provide for
assistance of lawyer for both the employer and the employee, if the employer had chosen a person who is legally trained,
the principles of natural justice require that the employee’s request for assistance of a lawyer should be accepted by the
management.58 Merely because the word ‘fraud’ was used in the charge-sheet, it does not make the charges ‘serious’ in
order to entitle the workman to be represented by a lawyer, as provided in the bipartite settlement, and the denial of
representation by a lawyer could not be said to have vitiated the inquiry. The tribunal acted in excess of its jurisdiction in
interfering with the inquiry on that count.59

There is no principle of natural justice that a person who had lodged a complaint cannot present his case and be a
prosecutor in a domestic inquiry. A domestic inquiry, therefore, in which the complainant himself was the prosecutor
would not be vitiated for violation of the principles of natural justice.60 Likewise, where a person who complains about the
misconduct of the delinquent workman and in that capacity, gives evidence before the domestic inquiry and also represents
the management in the course of the inquiry, there is no violation of the principles of natural justice,61 as in no sense does
he acts as a prosecutor and judge simultaneously. If any inquiry is not fair on the ground of denial of proper representation,
it is open to the aggrieved workman to challenge its validity in the course of adjudication of the industrial dispute before
the tribunal.62 If the workman is not represented by a legal practitioner before an inquiry officer, the management cannot
validly insist that it must be represented through a lawyer. If a workman is permitted to be represented through a lawyer
before an inquiry officer in the facts and circumstances of a particular case, the management too cannot be denied the same
facility. Normally, large industrial establishments have highly trained officers who are engaged to represent the
management in the domestic inquiries. However, it is not incumbent on the management that it must appoint a representing
officer before the domestic inquiry. It may leave to the inquiry officer himself to elicit relevant information from the
witnesses presented before him by the management and the workman. Such procedure is permissible as long as the inquiry
officer does not play the role of the representing officer.

In K Kasi, a single judge of the Karnataka High Court held that there was no legal compulsion that a presenting officer
should be appointed. The mere fact that the presenting officer is not appointed by the management is no ground to
invalidate an inquiry. If, however, the inquiry officer plays the role of a prosecutor and cross-examines the defence
witnesses or puts leading questions to the prosecuting witnesses thus, clearly exposing a biased state of mind, the inquiry
would be opposed to the principles of natural justice. However, if the questions put by the inquiry officer to the witnesses
are merely for clarification wherever it becomes necessary, the inquiry cannot be impeached as unfair so long as the
delinquent workman is permitted to cross-examine the witnesses after the inquiry officer has put the questions to the
witnesses. In this case, the tribunal had not pointed out any particular question put by the inquiry officer to the witnesses,
which could be regarded objectionable and exposing a state of mind on the part of the inquiry officer. It was, therefore,
held that an inference that the inquiry officer had played the role of prosecutor was not permissible. Therefore, the inquiry
could not be held to be unfair.63 In Venkateshwara Reddy, on review of the earlier dicta, a single judge of the Karnataka
High Court has stated the following principles regarding the employee’s right to be defended by a legal practitioner in a
domestic inquiry:

(a) The right to be represented by a legal practitioner is not an element of principle of natural justice.

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(b) A delinquent employee will have the right to claim to be defended by a legal practitioner, where the rules or regulations
permit the employee to be represented by a legal practitioner.
(c) Where the rules or regulations are silent about representation by a lawyer or vest discretion in the disciplinary authority or
the inquiring authority, to permit the employee to be represented by a legal practitioner or other agent of his choice,
denial of such permission on a request made by the employee, would violate the principles of natural justice—
(i) if the presenting officer is a legal practitioner or a person legally trained or experienced; or

(ii) if the charges are of a serious and complex nature.

(d) Where the rules or regulations specifically prohibit the employee from engaging the service of a legal practitioner, such
rules or regulations will be read down as vesting a discretion in the disciplinary authority to permit the employee to
engage a legal practitioner, where—
(i) the presenting officer is a legal practitioner or legally trained person; or

(ii) the charges are of a serious and complex nature. If it is not so read down, the rule itself may have to be held to be
invalid as violating Art 14 of the Constitution. 64

Where the employer granted the request of the delinquent to be represented by a legal practitioner in the domestic inquiry,
the employer can also avail the services of a legally trained person to be the presenting officer, and the mere appointment
of a legal practitioner as the presenting officer would not ipso facto violate the principles of natural justice.65 Mere refusal
by the inquiry officer to permit the delinquent employee to take the assistance of a co-worker at the domestic inquiry, as
provided for in the Punjab Civil Services Rules, does not result in the invalidation of the inquiry proceedings and the order
of punishment. The court has to examine whether violation of principles of natural justice has caused prejudice to the
delinquent employee in such cases.66

(d) Evidence and Rules of Natural Justice

The strict technical rules of procedure of the Indian Evidence Act 1872 do not apply even to the adjudicatory proceedings
before the adjudicatory authorities under the Industrial Disputes Act 1947 much less would they ‘apply to domestic
inquiries’.67 In TR Varma, Venkatarama Ayyar J, observed:

The law requires that such tribunals should observe rules of natural justice in the conduct of the inquiry, and if they do so, their
decision is not liable to the impeached on the ground that the procedure followed was not in accordance with that, which obtained
in a court of law,...the inquiry is not open to attack on the ground that the procedure laid down in the Evidence Act for taking
evidence was not strictly followed.68

In Rattan Singh, Krishna Iyer J held:

It is well-settled that in a domestic inquiry the strict and sophisticated rules of evidence under the Indian Evidence Act may not
apply. All materials which are logically probative for a prudent mind are permissible. There is no allergy to hearsay evidence
provided ithas reasonable nexus and credibility. It is true that departmental authorities and administrative tribunals must be careful
in evaluating such material and should not glibly swallow what is strictly speaking not relevant under the Indian Evidence
Act...The essence of a judicial approach is objectivity, exclusion of extraneous materials or considerations and observance of rules
of natural justice. Of course, fair play is the basis and if perversity or arbitrariness, bias or surrender of independence of judgment
vitiate the conclusions reached, such finding, even though of a domestic tribunal, cannot be held good.69

Merely because the rules of evidence and procedure do not apply to domestic inquiries and the employer and workmen are
subject to rules laid down in the Standing Orders, it does not mean that the rules of natural justice and fair play are to be
ignored. The rules of natural justice are matters not of form but of substance. The effect of the violation of the rules of
natural justice must result in some sort of sufferance, handicap or prejudice to the delinquent. The alleged prejudice caused
to the delinquent, resulting from the alleged violation of the rules of natural justice must be pleaded and proved before the
tribunal.70 However, mere breach of bare technicalities cannot be equated with violation of the rules of natural justice. Nor
is it the duty of the inquiry officer to explain various aspects of law or natural justice as to what sort of representations he
might have in law in case he chooses to ask for the same. The delinquent must assert his own right. If, however, the inquiry
is proceeded with in a slip-shod way or in a manner which might indicate that the inquiry officer was proceeding on the
basis of standard of proof which is wrong in law and not consistent with the principles of natural justice then in that event,

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the inquiry proceedings might be vitiated.71 If the inquiry officer does not comply with the rules of natural justice, that is to
say, does not give reasonable opportunity to the employee of being heard and to lead evidence and cross-examine the
witnesses of the opposite party or he himself is biased against the employee, the inquiry will be invalid.72 In other words, a
domestic inquiry into the misconduct of an employee would be proper only if it is held in accordance with the rules of
natural justice. The quintessence of the rules of natural justice was stated by B N Banerjee J of the Calcutta High Court in
the following words:

The principle of natural justice in its journey through the centuries, has shed much of its glories and is now crystallised into four
principle of justice, namely:
(i) opportunity for both the contesting parties to be heard;

(ii) hearing before an impartial tribunal so that no man can be a judge of his own cause;
(iii) decision made in good faith; and

(iv) an orderly course of procedure.73

Apart from this, no other principle of natural justice is known in modern Jurisprudence. ‘Principles of natural justice are
not codified rules. Their greatest virtue is adaptability to changing situations. Once the principles of natural justice are
reduced to formalistic straight jackets fettering administrative discretion, the principles cease to be natural.74 The principle
that before a workman can be found guilty for inflicting the punishment of dismissal, he must have been recognised,
implicated and named by more than one witness, cannot be invoked in domestic inquiries or industrial adjudication.75 In a
domestic inquiry, guilt need not be established beyond reasonable doubt; proof of misconduct may be sufficient.76The
inquiry officer can take into consideration the evidence of an accomplice which undoubtedly will be legal evidence. If the
evidence of a co-accused would constitute legal evidence on which the inquiry officer could act, even though retracted
from, would not in any way render finding of guilt in respect of the delinquent workman, incorrect.77 The provisions of s
162 of the Code of Criminal Procedure 1973 too have no application to departmental inquiries.78

Before commencing to record the evidence of the parties, it would be but fair that the inquiry officer should explain to the
delinquent workman the charges levelled against him.79Legal evidence may be direct evidence or indirect evidence. Direct
evidence is what has been defined in s 60 of the Indian Evidence Act 1872 vis-a-vis oral evidence. As against direct
evidence, (s s 60, 62 and 63 of the Indian Evidence Act 1872), there is another type of evidence which is known as
circumstantial evidence. Direct evidence as well as circumstantial evidence is legal evidence but the concept of hearsay
evidence is entirely different. In criminal law, hearsay evidence is inadmissible to prove the fact which is deposed to on
hearsay. However, it does not necessarily preclude evidence as to a statement having been made upon which certain action
was taken or certain results followed. In so far as domestic inquiries in disciplinary proceedings are concerned, the hearsay
evidence may be admissible provided it has reasonable nexus and credibility. The word ‘hearsay’ is used in various senses.
Sometimes, it means whatever a person is heard to say; sometimes it means whatever a person declares on information
given by someone else. The evidence of a statement made to a witness who is not called as a witness may or may not be
‘hearsay’. It is ‘hearsay’ and inadmissible when the object of the evidence is to establish the truth of what is contained in
the statement. It is not ‘hearsay’ and is admissible when it is proposed to establish by the evidence, not the truth of the
statement but the fact that it was made. The fact that it was made quite apart from its truth, is frequently relevant in
considering the mental state and conduct thereafter of the witness or some other persons in whose presence such a
statement is made.80 In the language of Krishna Iyer J in Rattan Singh (supra) ‘there is no allergy to hearsay evidence
provided it has reasonable nexus and credibility’.

Generally, industrial employers may provide the procedure for holding domestic inquiries in their Standing Orders, if
applicable, or the service rules. If there are any rules regarding holding of domestic inquiries prescribed either by the
Standing Orders, rules or by any other provision of law, then those Standing Orders, rules or the law must be followed. A
domestic inquiry against a charge-sheeted workman, without complying with the procedure laid down in the Standing
Orders would be invalid as held by the Supreme Court in Imperial Tobacco.81 In cases, where the Standing Orders or the
service rules do not prescribe any procedure or there are no Standing Orders or service rules, though the domestic inquiries
need not confirm to all requirements of judicial proceedings, they must, however, satisfy the essential requirements of
natural justice.82 The purpose of the rules of natural justice is to safeguard the position of the person against whom an
inquiry is being conducted, so that he is able to meet the charges levelled against him, properly. Though the rules of natural
justice do not change from tribunal to tribunal, even so the nature of inquiry and the status of person against whom inquiry
is held will have some bearing on what should be the minimum requirements of the rules of natural justice. Where, for
example, lawyers are permitted before a domestic tribunal holding an inquiry and the party against whom the inquiry is
being held, is represented by a lawyer, mere reading of the material to be used in the inquiry may sometimes, be sufficient
but where in a domestic inquiry against industrial workers, most of whom are illiterate, and lawyers are not permitted to

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defend them and sometimes even the representatives of the labour unions are also not present to defend them, something
more than a mere reading of statements to be used against them will have to be required in order to safeguard their
interest.83 The ambit of the principles of natural justice which must be followed by the inquiry officers in such inquiries is
well settled by judicial pronouncements.84 Such inquiries, therefore, have to be held with scrupulous regard for the
requirements of rules of natural justice as questions of bona fides or mala fides of employer are at issue.85 The
requirements of natural justice broadly are that:

(i) the inquiry must be held by a person who is not biased in favour or against either of the parties; and

(ii) the delinquent employee should be given a fair opportunity of adequately representing his case by hearing the evidence in
support of the charge, and to cross-examine the witnesses produced against him and also be allowed to rebut the
evidence led against him by examining witnesses including himself if he so wishes on any relevant matter.86

Bias

The principles of bias have been discussed in detail under the caption ‘Rules of natural justice’ under s 17(2) (infra). The
law relating to the bias of the inquiry officers has been discussed under the topic ‘Inquiry officer’ (supra). However, it may
be relevant to note here that a remote apprehension in the mind of the workman that the inquiry officer would be biased
against him is not sufficient to vitiate the disciplinary proceedings on the ground of bias. Likewise, the mere fact that the
inquiry officer was a superior to the delinquent workman, is not sufficient to hold that he was biased against the workman.
It is only in cases where the court has acceptable materials to infer bias that the court will lean in favour of a delinquent,
when a charge of bias is made against the enquiry officer. Otherwise, it will always be easy for a delinquent workman to
defeat the domestic inquiry by making aspersions against the officer conducting the domestic inquiry or by making false
imputations.87 Particularly, where a man categorically says that he has no objection to a particular person holding the
inquiry and also makes no allegation against him; he cannot be allowed to raise the question of bias of inquiry officer
later.88 There is no principle of natural justice that a person who has lodged a complaint cannot be a presenting officer and
prosecutor in a domestic inquiry. That itself will not vitiate a domestic inquiry if no other question of prejudice is there.89

Reasonable Opportunity

Before imposing the punishment of discharge or dismissal, fair play requires that the delinquent workman is given a
reasonable opportunity to put forth his defence before the inquiry officer in the inquiry proceedings in accordance with the
rules of natural justice.90 Natural justice ordains that the inquiry should be held impartially, objectively and after giving an
opportunity of hearing to the delinquent workman.91 Fair opportunity and fair trial are elements of the principles of natural
justice which are always applied to the facts and circumstances of a case and not understood in the abstract.92 The two
elements of a reasonable opportunity of being heard are that firstly, an opportunity to be heard must be given; and
secondly, this opportunity must be reasonable. Both these matters are justifiable and it is for the tribunal to decide whether
an opportunity has been given and whether that opportunity has been reasonable.93 There can be no invariable standard for
‘reasonableness’ in such matters except that the adjudicator’s conscience must be satisfied, that the workman against
whom disciplinary action is proposed has had a fair chance of convincing the inquiry officer that the grounds on which the
action is proposed are either non-existent or even if they exist they do not justify the proposed action. The decision of this
question will necessarily depend upon the peculiar facts and circumstances of each case, including the nature of the action
proposed, grounds on which the action is proposed, the material on which the charges are based, the attitude of the
workman against whom the action is proposed in defending himself in the inquiry, the nature of the pleas raised by him in
reply, the request for further opportunity that may be made, his admission by conduct or otherwise of some or all the
charges and all other relevant matters which help the mind in coming to a fair conclusion on the question.94 What is
‘reasonable opportunity’ will depend on the facts of each case, depending particularly on the nature of the allegation, the
witnesses and their availability and the time and assistance required for preparation to appear at the inquiry.95

In Thejvir Singh, where the inquiry officer gave the workman only one day’s notice to face the inquiry, refused the request
for adjournment, asked him to cross-examine witnesses with non-familiar matters and to present his defence in an hour, the
Supreme Court held that the inquiry was conducted in gross violation of the principles of natural justice, without giving
real and fair opportunity to the workman to participate in the proceedings.96 Similarly, in Anglo American Direct Tea
Trading, the charge-sheet did not show on what evidence the management would rely for the purpose of supporting the
charge and the witnesses that the management wanted to examine were not disclosed and the workman was asked to send
his list of witnesses within 24 hours, a single judge of the Madras High Court held that it could not be said that the
workman was given a ‘fair opportunity’ to defend himself and establish his innocence with reference to the charge framed
against him.1 On the other hand in Ram Bilash Goel, where the delinquent was given 72 hours to submit explanation for
refusing to work over-time, considering the nature of the charge and witnesses proposed to be cross-examined, the time
allowed was not considered to be inadequate.2 In TR Varma, Venkatarama Ayyar J observed:

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Stating it broadly and without intending it to be exhaustive, it may be observed that rules of natural justice require that a party
should have the opportunity of adducing all relevant evidence on which he relies, that the evidence of the opponent should be taken
in his presence, and that he should be given the opportunity of cross-examining the witnesses examined by that party, and that no
materials should be relied on against him without his being given an opportunity of explaining them.3

The basic requirement of a fair opportunity is that inquiry must be conducted honestly and in a bona fide manner with a
view to determining whether the charge framed against a particular employee is proved or not, and therefore, care must be
taken to see that the inquiry does not become empty formality.4 ‘Reasonable opportunity’ means not only framing charges
and asking for explanation but much more. The employee must be apprised of the material on which the charges were
framed, so that he could have a proper opportunity of testing or challenging that material so far as would be possible for
him.5 Though the technical rules of procedure and evidence do not apply to domestic inquiries, the rules of natural justice
require that when a fact is sought to be proved before a tribunal, it must be supported by statements made in the presence
of the person against whom the inquiry is held and if a statement is made at his back, it ought not to be treated as
substantive evidence.6 Therefore, all the evidence against the person concerned should be taken in his presence and he
should be given an adequate opportunity of cross-examining the witnesses giving evidence against him, and that no
material should be relied on against him, without his being given an opportunity of explaining it. The delinquent workman
should further be given the opportunity of questioning the witnesses after knowing in full what they have to state against
him. The witnesses on whom the employer relies, should generally be examined in the presence of the delinquent workman
and he must also be informed of the material sought to be used against him and give an opportunity to explain it.7 In
Meenglass, Hidayatullah J, observed:

It is an elementary principle that a person who is required to answer a charge must know not only the accusation but also the
testimony by which the accusation is supported. He must be given a fair chance to hear the evidence in support of the charge and to
put such relevant questions by way of cross-examination as he desires. Then he must be given a chance to rebut the evidence led
against him. This is the barest requirement of an inquiry of this character and this requirement must be substantially fulfilled before
the result of the inquiry can be accepted. A departure from this requirement in effect throws the burden upon the person charged to
repel the charge without first making it out against him.8

The basic concept is fair play in action—administrative, judicial or quasi-judicial but the concept of fair play in action
must depend on the particular lis, if there be any, between the parties. When on the question of facts there is no dispute, no
real prejudice has been caused to a party aggrieved by an order, absence of any formal opportunity of cross-examination
per se does not invalidate or vitiate the decision arrived at fairly, particularly more so when the party against whom an
order has been passed does not dispute the facts and does not demand to test the veracity of the version or the credibility of
the statement. In KL Tripathi, Sabyasachi Mukharji J, observed:

If the credibility of a person who has testified or given some information is in doubt, or if the version or the statement of the person
who has testified, is in dispute, right of cross-examination must inevitably form part of fair play in action but where there is no lis
regarding the facts but certain explanation of the circumstances there is no requirement of cross-examination to be fulfilled to
justify the fair play in action...The party who does not want to controvert the veracity of the evidence from or testimony gathered
behind his back cannot expect to succeed in any subsequent demand that there was no opportunity of cross-examination specially
when it was not asked for and there was no dispute about the veracity of the statements. When there is no dispute as to the facts or
the weight to be attached on disputed facts but only an explanation of the facts, absence of opportunity to cross-examination does
not create any prejudice in such cases.9

In dealing with domestic inquiries held in industrial matters, the fact that in a large majority of cases employees are likely
to be illiterate and ignorant, should be borne in mind.10 The inquiry officer has to take care in the facts and circumstances
of each case that the defence of the workman is not prejudiced in any manner. The rules of natural justice require that the
workman proceeded against should be informed clearly of the charges levelled against him; witnesses should be normally
examined in his presence in respect of the charges; if statements taken previously and given by witnesses are relied on,
they should be made available to the workman concerned; the workman should be given a fair opportunity to examine
witnesses, including himself, in support of his defence; and the inquiry officer should record his findings based on the
evidence so adduced.11 In other words, before a person is punished, he should be told fairly and clearly what is the offence
charged against him and he should be given reasonable opportunity to adduce such evidence as he chooses in his defence
and to cross-examine the employer’s witnesses or demolish the evidence that is produced against him. All the materials
relied against the delinquent workman in coming to the conclusion by the inquiring authority should be made known to the

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workman concerned.12 A single-judge of the Karnataka High Court in Venkateshwara Reddy, has laid down the following
requirements of reasonable procedure subject to any special provisions relating to procedure in the relevant rules,
regulations, Standing Orders or a statute:

(a) the employee shall be informed of the exact charges which he is called upon to meet;
(b) he should be given an opportunity to explain any material relied on by the management to prove the charges;

(c) the evidence of the management witnesses should be recorded in the presence of the delinquent employee and he should
be given an opportunity to cross-examine such witnesses;
(d) the delinquent employee shall either be furnished with copies of the documents relied on by the management or be
permitted to have adequate inspection of the documents relied on by the management;
(e) the delinquent employee should be given the opportunity to produce relevant evidence—both documentary and oral
which include the right to examine self and other witnesses; and to call for relevant and material documents in the
custody of the employer;
(f) whenever the inquiring authority is different from disciplinary authority, the delinquent employee shall be furnished with
a copy of the inquiry report and be permitted to make a presentation to the disciplinary authority against the findings
recorded in the inquiry report.13

A single judge of Calcutta High Court, while quashing the award of tribunal directing reinstatement on the ground that the
workman was not given reasonable opportunity because the inquiry was conducted ex parte, held that the principle of
affording reasonable opportunity was not a one-way traffic. It was for the person who was on the receiving end to avail of
such opportunity. If he did not avail of this opportunity upon his own misconduct then in that case the inquiry officer
would be well within his right to proceed in his absence.14 The following sub-heads deal with some important aspects of
the manner in which a fair and reasonable opportunity can effectively be given to a delinquent workman:

Supply of Relevant Material:

It is settled law that in the charge sheet, specific averments in respect of the charge shall be made. If the management seeks
to rely on any document in proof of the charge, the principles of natural justice require that such copies of those documents
need to be supplied to the delinquent. If the documents are voluminous and cannot be supplied to him, an opportunity has
got to be given to him for inspection of the documents. Failure of the management to supply the copies of such documents
or to give inspection of the documents to him would violate the principles of natural justice. Furthermore, if the delinquent
seeks to support his defence at the inquiry with reference to any of the documents in the custody of the management, then
the documents either may be summoned or copies thereof may be given at the request and cost of the delinquent.15 The
rules of natural justice are not embodied rules. Therefore, before coming to the conclusion that any particular procedure
adopted by the inquiry officer is violative of the rules of natural justice, the tribunal must be satisfied that the procedure
adopted was not conducive to reach a just decision. A party is not entitled, as of right, to have his attention called to any
material that may come before a quasi-judicial tribunal unless the material in question is likely to prejudice his case either
directly or indirectly.16

Inquiry officers are not courts and, therefore, they are not bound to follow the procedure prescribed by the trial courts nor
are they bound by strict rules of evidence. On the other hand, unlike courts, they can obtain all information of material for
the points under inquiry from all sources, and through all channels without being fettered by rules of procedure, which
govern proceedings in a court. The only obligation which the law casts on them is that they should not act on any
information which they receive unless they put it to the party against whom it is to be used and give him a fair opportunity
to explain it.17 However, the principle that a fact sought to be proved must be supported by statements made in the
presence of the person against whom the inquiry is held and that statements made behind the back of the person charged
are not to be treated as substantive evidence is one of the basic principles which cannot be ignored on the mere ground that
the domestic tribunals are not bound by the technical rules contained in the Evidence Act.18 In PC Thomas, in the domestic
inquiry held by the employer, there was no examination of the witnesses nor were there any exhibits on the record. No
inquiry in the proper legal sense of the term at all was held. All that happened was that even when the delinquent workman
replied to the charge, he was given notice to produce his evidence and documents, if any, in support of his evidence. Even
in the notice, there was no indication of the gist or the substance of the evidence that was proposed to be adduced at the
inquiry in support of the charge. In pursuance to the notice, the matter was posted for hearing when certain questions were
put to the workman, at the end of which the order of dismissal followed. In the circumstances, the inquiry was held to be
vitiated.19 In a case where the enquiry officer allowed certain documents produced by the management as evidence without
supplying copies of the same to the charge-sheeted workman, a single Judge of Calcutta High Court held that, in the

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circumstances, the findings of the enquiry officer that the workman had forged the signature of the Deputy General
Manager was without evidence. On this view of the matter, the learned judge set aside the dismissal and ordered
reinstatement, but with 50% of back wages.20 Once the court sets aside an order of punishment on the ground that the
enquiry was not properly conducted, the court should not severely preclude the employer from holding the inquiry in
accordance with the law. It must remit the concerned case to the disciplinary authority to conduct the enquiry from the
point that it stood vitiated and to conclude the same in accordance with law. However, resorting to such a course depends
upon the gravity of delinquency involved. Thus, the court must examine the magnitude of misconduct alleged against the
delinquent employee. It is in view of this, that courts/tribunals, are not competent to quash the charge-sheet and related
disciplinary proceedings, before the same are concluded on the aforementioned grounds.21

Prima facie, when an employee who is facing an inquiry for misconduct requiring certain materials in the possession of the
company to be produced and they are not made available, the workman may be prejudiced in properly placing his
defence.22 For instance, the refusal of the employer to supply to the workman the documents relating to the previous two
inquiries started and dropped against him was held to be denial of the rules of natural justice.23 An inquiry officer would be
acting contrary to the rules of natural justice, if he acted upon information collected by him which has not been disclosed
to the workman and in respect of which full opportunity of meeting the inferences which arise out of it has not been
given.24 It is highly improper for an inquiry officer to attempt to collect material from outside sources during the conduct
of an inquiry, and not make the information so collected, available to the delinquent workman, and further make use of the
same in the inquiry proceedings. There may also be cases where a very clever and astute inquiry officer may collect
outside information behind the back of the delinquent workman and without any apparent reference to the information so
collected may be influenced in the conclusion recorded by him against the workman. If it is established that the material
was collected behind the back of the workman, collected during the inquiry and such material has been relied on by the
inquiry officer without its having been disclosed to the workman, it can be stated that the inquiry proceedings would be
vitiated.25 A workman, who is to answer to a charge must not only know the accusation but also the testimony by which
the accusation is supported.26

In Ashwani Kumar Suman, the Allahabad High Court quashed the order of dismissal passed against the employee as the
order was founded on incriminating material which the employee was not aware of. Not only such material was not made
available to the employee but he was not even given an opportunity to lead evidence in rebuttal. Furthermore, the previous
record of the employee was taken into consideration while passing the order, without giving him an opportunity to make
representation in regard to that consideration. It was apparent from the order that even the defence of the employee was not
considered and no findings were recorded in spite of the fact that the employee had asserted that he was not afforded a
reasonable opportunity to explain and the copies of the material documents were not furnished to him.27 If a document is
relied upon by a witness and also by the inquiry officer in his findings, it must be made available to the workman before he
is called upon to cross-examine such witness.28 Therefore, when the delinquent wants copies of certain documents which,
according to him, are relevant to prove that the charges levelled against him are not true, failure to furnish the said
documents even on the ground that they are not available will vitiate the inquiry unless proper explanation is given to the
court as to how the documents sought for became unavailable. In the absence of such explanation, the delinquent employee
can successfully contend that he has been denied the opportunity of meeting the charges.29 In other words, if a delinquent
is entitled to a copy of a particular document then he should be supplied with that document because non-supply of that
document prejudices his defence.30 If the documents mentioned in the memo of charge were neither relevant to the charge
nor relied upon by authorities, the non-supply of such documents would not vitiate the proceedings.31 However, if some
document is not traceable and by non-production of such document, the delinquent will not gain while the management
stands to gain, there would be no denial of the rules of natural justice.32 In MN Mardikar, the original note book and the
log book could not be supplied as they were missing and their transcripts prepared by the witnesses earlier were supplied to
the delinquent officer. It was held by the Supreme Court that the employer could not be accused of deliberately
suppressing evidence. Speaking for the court, Ahmadi J said:

In such a situation, the evidence has to be evaluated bearing in mind the fact that the original notebook and the logbook of the jeep
are missing. The non-supply of the original notebook and the logbook cannot, in the circumstances, efface the overwhelming
evidence, both direct and circumstantial, tendered during the departmental inquiry. We are of the view that there is sufficient
evidence on record to return a finding of guilt against the respondent. 33

If a workman is not given copies of statements made by the witnesses before he is called upon to cross-examine the
witnesses on such statements, the inquiry will not be fair even if the statements are read over in the presence of the
workman and marked as evidence in examination-in-chief of the management’s witness because fairness requires that the
workman should have sufficient time to study the statements for preparing his defence.34 Where the copies of letters
marked as exhibits in the inquiry proceedings are not furnished to the delinquent employee even on demand, it is a serious
infringement of the principles of natural justice.35 Similarly, where the findings of the inquiry are based on reports given by

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the superior officers and such reports are not made available to the concerned workman nor are the officers made available
for cross-examination, the inquiry would not be fair and proper.36 Where the statements of witnesses deposing against the
delinquent workman are recorded in his presence and at the time of the domestic inquiry, copies of statements so marked
are not supplied to the workman nor are the statements read over to him before he is asked to cross-examine the witnesses
who have given the statements, the inquiry would be vitiated for want of fair opportunity.37 On the other hand, where
domestic inquiry is conducted by the employer in an elaborate manner, but a copy of the report submitted by a witness is
not furnished to the concerned workman before he is called upon to cross-examine the witness, it cannot be said that any
prejudice is caused to the workman by such failure to furnish the copy and that there was denial of fair opportunity to
him.38 Likewise, failure to read out statements of witnesses to the delinquent workman will not vitiate the inquiry in the
absence of any prejudice caused to him.39 Where the conduct of the delinquent workman reveals a guilty mind in asking
for the production of certain materials, no prejudice can be said to be caused to him. This point is illustrated by the holding
in Awadesh Bhatnagar.40 However, if the inquiry is to be impugned on the ground that the workman was not supplied with
any document, it must be clearly stated by the workman as to which particular documents were not supplied which he had
asked for and which caused prejudice to his case resulting in injustice.41 Where certain documents were mentioned in the
memo of charges, but were neither relevant to the charge nor referred to or relied upon by the authorities nor were
necessary for cross-examination, the non-supply of such documents would not violate the proceedings and there would be
no violation of the principles of natural justice.42

Production of Witnesses:

Section 11(3)(a) of the Industrial Disputes Act 1947 empowers the adjudicatory authorities under the Act to compel
attendance and examination of witnesses as a civil court under the Code of Civil Procedure 1908 but there is no provision
of law, under which the inquiring officers holding domestic inquiries can compel the attendance of witnesses as under the
Code of Civil Procedure 1908 or Code of Criminal Procedure 1973. The purpose of a domestic inquiry is to find out
whether the misconduct alleged against the delinquent workman has in fact been committed by him before a disciplinary
punishment could be inflicted upon him. Therefore, the employer has to establish that the misconduct has been committed
by leading all the relevant evidence before the inquiry officer. Likewise, the workman has to show that he has not
committed the alleged act. He may do this either by picking holes in the evidence led by the employer by cross-
examination or by leading his own evidence to rebut the evidence of the employer. It is open to the parties to summon such
evidence, oral or documentary, which they consider necessary, and if one or the other party has omitted to summon a
witness or a document, the inquiry officer cannot be blamed for it, nor is the inquiry rendered defective or unfair on that
account.43 The failure of a party to produce the relevant oral or documentary evidence may be prejudicial to his case. In
Rashid Ahmad, the conductor of a bus was dismissed from service for having charged excess fare from the passengers. In
the course of the domestic inquiry, at the outset the workman made a request for producing the passengers and the way-
bill. In the circumstances of the case, the court held that the evidence of the passengers was relevant. Non-production of
the passengers or the way-bill was tantamount to refusal of reasonable opportunity to the workman.44 In a domestic
inquiry, the officer holding the inquiry, however, can take no valid or effective steps to compel the attendance of any
witnesses, just as a court can summon witnesses.45

In Tata Oil Mills, the charge-sheeted workman wanted to examine certain witnesses before the inquiry officer and,
therefore, requested the inquiry officer to call these witnesses to give evidence. Though the inquiry officer told the
workman that it was not a part of his duty to call the witnesses and he should in fact have kept them ready himself, yet he
wrote letters to those witnesses in order to assist the workman. One of the witnesses wrote back to the inquiry officer
expressing his inability to be present while the other sent an unsigned reply asking for a few days time on which the
inquiry officer took no action. Consequently, the inquiry had to proceed without examining these witnesses. The tribunal
took the view that the basis of the inquiry was unfair but in appeal, the Supreme Court held that if the workman did not
take steps to produce his witnesses before the inquiry officer, it could not be said that the inquiry officer did not conduct
the inquiry in accordance with the principles of natural justice. The inquiry, therefore, was held to be fair as the inquiry
officer had given ample opportunity to the workman to lead his evidence. The court also rejected the further plea that since
he was unable to lead his evidence for no fault of his own, he should be given an opportunity to prove his case before the
tribunal, with the observations that merely because the witness did not appear to give evidence in support of the
workman’s case, it could not be held that he should be allowed to lead such evidence before the tribunal and if this plea
was to be upheld, then no domestic inquiry would be effective and in every ease, the matter would have to be tried afresh
by the industrial tribunal.46 In Kameshwar Singh, the cashier of a bank was charged with coercing borrowers into paying
him illegal gratification. The substantive evidence was available only with such borrowers whom the cashier threatened.
Thus, the bank was not able to compel the appearance of the borrowers. It was able only to produce the statements of the
borrowers recorded earlier before the inquiry officer. In the circumstances, a single judge of the Patna High Court held that
the inquiry was not invalid even though the borrowers were not examined.47

A single judge of the Calcutta High Court in Golam Rasul, took the view that if a witness cited by a person facing

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disciplinary inquiry is under the control of the disciplinary authority and if the evidence of the witness is material for the
purposes of the inquiry, then the authority should arrange for the production of that witness at the inquiry. In this case, a
particular person was cited as a witness by the employee who was not unwilling to depose, if the inquiring officer found
his examination necessary. The inquiry officer did not come to any conclusion that the examination of that witness was
necessary or not but escaped to examine the witness on the pretext that he had not been cited as a witness at all. It was,
therefore, held that the grievance of the employee, that at the inquiry he was not afforded proper opportunity to defend
himself, in the sense that a witness cited by him was not examined, was justified and the inquiry was vitiated.48 On the
facts of the case, the decision of the High Court is correct, but the principle of law enunciated does not appear to be
consistent with the principle laid down in TELCO,49 where the Supreme Court held that the tribunal was in error in
thinking that the inquiry officer was under any obligation in law to produce the witnesses required by the workman
particularly not as his witnesses but for his cross-examination. Hence, there was no failure on the part of the inquiry officer
when he told the workman that he could neither produce nor compel the company to produce those witnesses. In RK Jain,
the court affirmed the principle that normally, it is the duty of the workman to have his witnesses produced before the
inquiry officer but in the peculiar circumstances of the case, the position was held to be entirely different.50 In Ruston &
Hornsby, it was held that it is not the duty of the inquiry officer to seek the permission of the superiors of a witness to
allow him to give evidence for a workman and it is the duty of the workman himself to summon his witnesses properly.51

In Anshuman Das Gupta, a single judge of the Gauhati High Court held that ‘reasonable opportunity’ envisaged in Art
311(1) of the Constitution includes an opportunity to the delinquent officer to defend himself not only by cross examining
the witness produced against him but also by examining himself or any other witness in support of his defence. The inquiry
would be vitiated if this opportunity were not made available to the delinquent. In this case, N G Das J, of the Gauhati
High Court came to the conclusion that the inquiry was vitiated on the ground that the inquiry officer had not exhausted his
powers in securing the attendance of one of the defence witnesses, who declined to give evidence. 52 This part of the
decision runs counter to the nature of domestic inquiry and the scope and powers of the inquiry officer. What is meant by
the observation ‘the inquiry officer did not exhaust his powers to ensure attendance’ and what powers does an inquiry
officer in a domestic inquiry admittedly enjoy in the matter of enforcing attendance of witnesses? Is it possible that the
learned judge was unaware of the legal position that an inquiry officer is not vested with any judicial power unlike a court
to issue summons or to enforce the attendance of witnesses? The responsibility of producing witnesses in a domestic
inquiry rests with the parties concerned and not with the inquiry officer. Further, this case was squarely covered by Tata
Oil Mills, in which Gajendragadkar CJI, held that it was the responsibility of the parties to produce their witnesses and that
if the workman did not take steps to produce his witnesses before the inquiry officer, it could not be said that the inquiry
officer did not conduct the inquiry in accordance with the principles of natural justice.53 In the face of a binding decision
and well-settled law, to hold that the inquiry stood vitiated because the inquiry officer did not exhaust his powers to ensure
the attendance of witnesses, revolts against common sense not to speak of legal sense or sound judicial process.

Examination of Witnesses

The barest requirement of a domestic inquiry is that the charged workman must be given a fair chance to hear the evidence
in support of the charge and put such relevant questions by way of cross-examination as he desires and then must be given
a chance to rebut the evidence led against him. If the allegations in the charge-sheet are denied by the workman, it is
needless to state that the burden of proving the truth of those allegations will be on the management, and the witnesses
called by the management must be allowed to be cross-examined by the workman and the latter must also be given an
opportunity to examine himself and adduce any other evidence that he might choose in support of his plea.54 The mere
form of inquiry would not satisfy the requirements of the rules of natural justice in industrial law and would not protect the
disciplinary action taken by the employers from challenge. Fair opportunity cannot be said to have been given unless the
witnesses are examined, ordinarily in the presence of the employee in respect of the charges; the employee is given a fair
opportunity to cross-examine the witnesses and he is given a fair opportunity to examine his own witnesses including
himself in his defence if he so wishes, on any relevant matter.55 It would be improper for the inquiry officer to hold a
domestic inquiry while a person is on leave which has not been cancelled and the workman has not been recalled to
duty.56Though the inquiry officer in a domestic inquiry is not bound by the technical rules or the procedure contained in
the Indian Evidence Act 1872, he cannot ignore the substantive rules which form part of natural justice. ‘The principle that
the facts sought to be proved must be supported by the statements made in the presence of the person against whom the
inquiry is held and that statements behind the back of a person charged are not to be treated as substantive evidence, is one
of the basic principles which cannot be ignored on theground that the domestic tribunals are not bound by the technical
rules or procedures contained in the Indian Evidence Act 1872’. Therefore, mere admission in evidence of a prior
statement without putting the same to the witness would not be in consonance with the principles of natural justice.57

Not only the witnesses should be examined in the presence of the charge-sheeted workman but he must also be informed
about the material sought to be used against him and then given an opportunity to explain it, because recording evidence in
the presence of the workman concerned serves a very important purpose. The witness knows that he is giving evidence

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against a particular individual who is present before him and, therefore, he is cautious in making his statement.58 When
evidence is recorded in the presence of the accused, there is no room for persuading the witness to make convenient
statements and it is always easier for an accused to cross-examine the witness if his evidence is recorded in his presence.59
The proper course for the inquiry officer, therefore, is to examine the witnesses from the beginning to the end in the
presence of the workman at the inquiry itself. Oral examination always takes much longer than a mere reading of a
prepared statement of the same length and brings home the evidence more clearly to the person against whom the inquiry
is being held.60 The position is the same, when a witness is called, the statement given previously by him behind the back
of the party is put to him, and admitted in evidence, a copy thereof is given to the party and he is given an opportunity to
cross-examine him.61 The conclusion of an inquiry based on a report given by other employees behind the back of the
concerned workman without making them available for cross-examination would be vitiated for violation of the rules of
natural justice.62 Likewise, the statement made by a witness who is not examined in the presence of the charge-sheeted
workman or is not produced for cross-examination at the inquiry, if taken into account in arriving at the finding of guilt or
inflicting punishment would vitiate the action.63 Any person can give evidence about what he heard but if it is to be used
for proving the truth of that statement, then it would be hearsay and not admissible for that purpose.64

Evidence of statement made to a witness who himself has not been called as a witness may or may not be hearsay
depending on the fact-situation of the case. It is not hearsay and is admissible when it is proposed to establish by evidence,
not the truth of the statement but the fact that it was made. The fact that it was made, quite apart from truth itself, is
frequently relevant for considering the mental state and conduct of a witness subsequently or some other person in whose
presence the statement was made but such statement is hearsay and is inadmissible when the object of the evidence is to
establish the truth of what is contained in the statement, in the absence of any other substantive evidence, hearsay or
indirect evidence cannot take the place of conclusive evidence. Therefore, in regard to the charge against the delinquent,
the proof of truthfulness of the hearsay evidence cannot be dispensed with in a domestic inquiry. In Chandrakumar
Deshmukh (supra), the Bombay High Court further observed:

The basic rule governing domestic inquiries requires that no order entailing penal consequences can be made on the basis of ex
parte statements of witnesses or hearsay evidence...It must be adhered to particularly when facts are disputed and credibility of a
person who has given testimony or some information, is in doubt or is challenged.65

Therefore, the basic rule, that if any document is relied on, the author of it should be examined so that he can be cross-
examined to discover the truth of what is stated in the document. In this case, there was no direct or substantive evidence,
against the delinquent, as regards the date and time of commission of the offence of theft. The finding of the inquiry officer
was based on the evidence of four witnesses who had no personal knowledge regarding the commission of theft on the
particular day. The source of their information was the statements of two other persons who were not available for cross-
examination. The disciplinary punishment based on the domestic inquiry, therefore, was quashed. In a domestic inquiry as
in a regular trial, the burden of proof of establishing the guilt on a charge is always on the accuser and not on the accused.
This burden must be discharged fully.66 If the delinquent seeks to cross-examine the witnesses examined in proof of the
charge, he should be given the opportunity to cross-examine them, in case he is to examine his witnesses for himself to
rebut the charge, that opportunity should be given. Failure to do that will violate the principles of natural justice.67
Normally, in domestic inquiries, it is not fair at the very outset to closely cross-examine the delinquent employee, before
any other evidence is led against him as it is necessary not to expose an illiterate and ignorant person to the risk of cross-
examination. The employer should take steps first to lead evidence against the workman charged, give him an opportunity
to cross-examine the said evidence and should then ask the concerned workman whether he wants to give any explanation
about the evidence led against him.68 Where two separate inquiries were held against two workmen, witnesses examined in
one inquiry and the evidence recorded in that inquiry were used for finding the other worker guilty of misconduct, the
findings against such other workman would be vitiated for violation of rules of natural justice which require that the
findings should be based on evidence led in each inquiry. The fact that the other worker assisted another inquiry held
against the other workman and cross-examined witnesses as legal assistant, does not mean that evidence recorded in that
inquiry automatically becomes evidence recorded in the disciplinary inquiry against the other worker.69 Similarly, where
no evidence is tendered at the domestic inquiry in support of the charges made against the concerned workman and certain
questions are put to him by way of cross-examination, the inquiry would be vitiated for want of fair opportunity.70 There is
an exception to this general rule. In certain circumstances as, for instance, where the workman admits his guilt, it will be
open to the management to examine the workman, even in the first instance, so as to enable him to offer any explanation
for his conduct or to place before the management any circumstances which will go to mitigate the gravity of the offence.
The fact that in the domestic inquiry, the workman was questioned first to find out if there were extenuating circumstances
before the formal evidence was allowed to complete the picture of his guilt, the inquiry would not be vitiated for want of
fair opportunity. If after the examination of the workman, the management chooses to examine any witnesses, the
workman must be given a reasonable opportunity to cross-examine those witnesses and also to adduce any other evidence
he may choose.71

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In certain other cases, it may even be fair to the delinquent workman to take his version first, so that the inquiry may cover
the point of difference and the witnesses may be questioned properly on the aspect of the case suggested by him but even
then, the examination of the workman should not ‘savour of an inquisition’, ‘it is all a question of justice and fairplay’. If
the second procedure leads to a just decision of the disputed points and is fairer to the delinquent than the ordinary
procedure of examining evidence against him first, no exception can be taken to it. It is, however, wise to ask the
delinquent whether he would like to make a statement first or wait till the evidence is over but the failure to question the
workman in this way does not ipso facto vitiate the inquiry unless prejudice is caused to him. If, however, ‘the person
inquired against seems to have been held at a disadvantage or has objected to such a course, then the inquiry may be said to
be vitiated’.72 For instance, where the inquiry officer firmly based his conclusion as to proof of guilt of the delinquent
workman on the evidence of certain witnesses by treating admission of the delinquent workman and his accomplice as
corroborative evidence, but failed to recall the witness for cross-examination, it was held to be a case of absence of proper
opportunity to the workman.73 Where witnesses are not examined from the very beginning at an inquiry in the presence of
the person charged, he should be given a copy of the statements made by the witnesses which are to be used at the inquiry
well in advance, before the inquiry begins. If this is not done and the concerned workman is asked to cross-examine the
witnesses then and there, a fair and adequate opportunity to the workman cannot be said to have been afforded. The court
can take judicial notice of the fact that many of the industrial workers are illiterate and sometimes, even the representatives
of labour unions may not be present to defend them. In such cases, in order to safeguard the interests of the worker, the
opportunity to cross-examine the witnesses should be effective and to read over a prepared statement in few minutes and
then ask the workman to cross-examine the witness making the statement, would make a mockery of the opportunity that
the rules of natural justice require.74 The purpose of cross-examination is set at naught if all the witnesses are present at the
spot of the inquiry during the entire period that the inquiry takes place. Holding of an inquiry in such a manner would
result in the miscarriage of justice.75

In Anand Joshi, the management witness was not orally examined and his written disposition was admitted in evidence and
the delinquent was asked to cross-examine him. A single judge of the Bombay High Court held that the inquiry was not
conducted fairly and properly. 76 In Kalu Ram, the Supreme Court took the view that the tribunal had gone wrong in
holding that the inquiry officer had conducted the inquiry unfairly in that the workman was not given an opportunity to
cross-examine the expert of the employer with the help of an expert of his own. In the domestic inquiry, the expert of the
employer produced by the workman was allowed to be cross-examined by the expert previously examined on behalf of the
employer but the expert produced by the employer was only cross-examined by the workman himself. The court noted that
the tribunal had not found that the workman had ever demanded that he should be permitted to cross-examine the expert
produced on behalf of the employer with the help of an expert of his own and that there had been no refusal of any such
request. The court observed that if the respondent did not ask for any opportunity to cross-examine the employer’s expert
with the help of an expert, that default on his part cannot mean that the inquiry officer violated the principles of natural
justice nor the fact, that the cross-examination by the workman could not be of the same quality as the cross-examination
with the aid of an expert, would mean that the inquiry officer was guilty of breach of the principles of natural justice.77

In Binny, on the question of affording opportunity of cross-examination to a delinquent workman, the Supreme Court
appears to have gone to the extreme of technical limits. In this case, at the end of the examination-in-chief of each witness,
the workman was asked whether he had any question to put to the witness. At the end of the examination of the witnesses
for the management, the inquiry officer called one of them to further give the remarks about the workman’s conduct and
ability and any other relevant information in respect of the workman. When that witness stated that the workman had been
absent without leave or permission on a number of occasions and that about a month back he had behaved in a manner
similar to the one with which he was charged, but no disciplinary action was taken against him on account of the
intercession of another workman, but when the witness was making this statement, the workman intervened and said that
that was on account of a misunderstanding as it was his habit to speak in a loud voice. However, at this stage, the inquiry
officer did not specifically ask the workman, whether he wanted to put any question to the witness on the further testimony
given by him or whether he had any explanation to offer. Though the labour court accepted the finding of the domestic
inquiry that the workman was guilty of the misconduct alleged against him and that the inquiry was fair and proper, it set
aside the order of dismissal of the workman on the ground that he was not given an opportunity to challenge the further
statement of the witness regarding his past record of service nor was he given any opportunity to say whether the witness’s
statement was true or false or reasonably explainable. In appeal, the Supreme Court affirmed the award of the labour court
holding that the record made by the inquiry officer amply demonstrated that the workman was not given a chance to cross-
examine that witness on his further statement nor was he asked to state anything by way of explanation.78 This appears to
be a hyper-technical view of law applied to the simple facts of the case. At no stage, the workman appears to have been
denied the opportunity to cross-examine the witnesses. Nor was he stopped from asking any question. Intervention by the
workman on the face of it appears to be in the nature of cross-examination. The view of the court appears to be based on
the mere fact that the inquiry officer did not ask the workman ‘whether he had any question to put on the further evidence
given and whether he had anything to show for himself in respect of what was alleged?’ But when the workman had

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already explained the statement of the witness by his intervention, there hardly was any need of asking him to put any
further question. The domestic inquiries are of a simple nature and the inquiry officers are not lawyers.79 To import such
highly technical refinements of law into domestic inquiries would perhaps lead to anomalous situations and rob them of all
unconventional norms.

It is open to an inquiry officer to refuse to examine a particular witness, if he bona fide comes to the conclusion that such
witness would be irrelevant or immaterial but if refusal to examine a witness or to allow other evidence to be led appears to
be the result of the desire on the part of the inquiry officer to deprive the person charged, of an opportunity to establish his
innocence, that of course, would be a very serious matter.80 For instance, in Shyam SL Gupta, the charge against the
workman was that he had taken leave on a false pretext of illness. In the course of the inquiry proceedings, the workman
requested the inquiry officer to have the evidence of the doctor who treated him, recorded. The refusal of the inquiry
officer was held to be a breach of rules of the natural justice vitiating the inquiry. It is open to an inquiry officer to disallow
trivial, irrelevant or frivolous questions asked in cross-examination.81 In Balmer Lawrie, the inquiry officer disallowed a
few questions which were of a trivial nature and were not really germane to the main controversy. The Bombay High
Court held that the inquiry was not vitiated, particularly so as no prejudice had been caused in any manner to the
delinquent employee by disallowing such questions during the course of cross-examination. The court, took further note of
the fact that the inquiry officer gave maximum latitude to the representative of the workman in cross examination of the
management witnesses but if the workman was not allowed to properly cross-examine the officer whom he was alleged to
have assaulted, and the witnesses were tutored, the inquiry would be vitiated and the order of dismissal based on that will
be liable to be quashed.82 In Phulbari Tea Estate, it was clear from the record that the witnesses had not been examined in
the presence of the workman charged and even their statements previously recorded in his absence were not furnished or
read over to him. All that happened at the inquiry was that the witnesses were present and the workman was asked to put
questions to them to which the workman replied that he had not committed the alleged act of misconduct and that he had
no questions to put to those witnesses. Thereupon, the inquiry officer brought the previously taken statements of witnesses
on record and on the basis of those statements, the workman was found guilty of the charge. In these circumstances, the
Supreme Court held that the inquiry was vitiated as the basic principles of natural justice were not complied with.83

In IGN Rly, several witnesses had been examined in the absence of the chargesheeted workmen and thus they had been
denied the opportunity to cross-examine those witnesses. Furthermore, even the statements of those witnesses recorded in
the absence of the chargesheeted workmen had not been furnished to them, hence they did not know what had been
deposed against them at the time when their own statements were called for. It was held that the inquiry was vitiated for
violation of the rules of natural justice as it was not a fair and proper inquiry.84 In Bharat Sugar Mills, the inquiry officer
did not examine any witness of the inquiry but contented himself only by recording the statements of the workmen against
whom the inquiry was held and placed on record the written reports made by officers of the employer company against the
workmen without reading out their contents or explaining them to the workmen and without giving them an opportunity to
cross-examine any of the officers who made the reports, for the purpose of testing the correctness of the allegations made
against them in those reports. The inquiry officer took those reports into consideration in finding the workmen guilty of
various acts of misconduct alleged against them. In these circumstances, it was held that the inquiry was not fair and
proper.85 In Associated Cement Cos, the inquiry officer started the inquiry with the examination of the workman himself
and elaborately questioned him about the allegations contained in the report against him by the officers of the company.
After the workman had been subjected to close cross-examination on the charges against him, five witnesses were
examined in support of the charge. It was held that the procedure adopted in the inquiry constituted a grave violation of the
rules of natural justice which vitiated the inquiry and rendered the order of dismissal based on the conclusions reached at
the inquiry, illegal.86 In Firestone, the court clarified that in the absence of any prejudice caused to the workman, the mere
fact that he was cross-examined even before the evidence against him was recorded, the inquiry would not be vitiated.
After analysing all the facts, the court found that no prejudice, had been in fact, caused to the delinquent workman by the
procedure adopted by the inquiry officer, the inquiry, therefore, was not invalid.87 In GAnandam, on the facts and in the
circumstances of the case, a single judge of the Madras High Court held that the examination of delinquent in the first
instance is only a procedural irregularity. If he does not object to such examination at the proper time, the inquiry will not
be vitiated because the only requirement of the domestic inquiry is that it must be fair and the court is satisfied that the
inquiry is fair on the whole. Minor defects need not be viewed seriously.88 Similarly, in CI Poulose, at the very beginning
of the inquiry the delinquent was cross examined by the inquiry officer and questions were asked with respect to admitted
facts to find our whether there was any satisfactory explanation from him. Therefore, no prejudice was caused to the
employee, hence the inquiry was not invalid.89 In British Bank, the Bombay High Court held that non-examination of the
handwriting expert, and placing reliance on an expert’s opinion by the inquiry officer, does not constitute an infirmity in
the disciplinary action.90

In Sur Enamel, the inquiry officer did not examine any witness in support of the charge framed against the delinquent
workman and the reports previously made by the officers of the company were read out to him without keeping those
officers present at the inquiry and without giving him any opportunity to cross-examine those witnesses. These reports of

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the company’s officers were then taken on record and the workman was simply asked to explain why those reports should
not be accepted. These reports were taken into account in finding the workman guilty of the alleged misconduct. It was
held that the procedure adopted in the inquiry was in gross violation of the principles of natural justice and the inquiry was
vitiated.91 In Meenglas Tea Estate, not a single witness was examined by the inquiry officer in support of the charge, nor
was any statement previously made by a witness tendered in evidence. The inquiry, in substance, consisted only of putting
questions to each workman in turn about the charge against him after reading out the charge to him. It was held that the
inquiry was vitiated as it was not held in accordance with the principles of natural justice.92 In Kesoram Cotton, the
employer dismissed some workmen after holding an inquiry into the charges of misconduct against them. In the inquiry
copies of the statements of witnesses previously recorded which had not been supplied to the workmen concerned were
read over to the witnesses when they were produced at the inquiry and after reading these statements over and explaining
them to the workmen they were put on the record and the workmen were asked to cross-examine the witnesses. It was held
that the workmen did not get a fair opportunity to defend themselves as the previously recorded statements were not given
to them well within time. It was suggested that the minimum time for such purpose should be two days before the date
when the inquiry is to begin. In the circumstances of the case, it was held that the principles of natural justice regarding an
adequate opportunity being given to the workmen to defend themselves, were not duly complied with.93 In Ananda Bazar
Patrika, the workman pressed for the examination of only one witness, viz, the editor of the newspaper, which was rejected
by the inquiry officer as he felt that the examination of the editor would not be of any assistance to the workman. Further,
the inquiry officer disallowed certain questions put to witnesses in their cross-examination as he thought those questions to
be irrelevant. The labour court held that the inquiry was not fair but the Supreme Court, while recognizing he right of
inquiry officer to refuse to examine a witness or to disallow questions, which he considers irrelevant, observed that if such
refusal on the part of the inquiry officer is found to be based on his desire to deprive the person charged of an opportunity
to establish his innocence, that would be a very serious matter. In view of the fact that the inquiry had been conducted
elaborately and the workman had been allowed fullest latitude for the cross-examination of the witnesses against him, it
could not be said that refusal to allow the workman to examine the editor could not be held to be unjustified or unfair. On
the second point also, the court observed that the disallowed questions were all recorded, and a look at the record showed
that most of the questions which were disallowed had been properly disallowed. In these circumstances, it was held that
the labour court was not justified in its finding that the enquiry was vitiated.94

In Firestone, the inquiry officer afforded every opportunity to the workman to controvert the case of the management and
prove his case and he was informed of the charge very clearly. Witnesses were examined in his presence and he was
allowed to cross-examine them fully. He was also given an opportunity to lead his evidence and the inquiry officer and the
manager gave him a full chance to explain after appraising him in detail of the finding tentatively reached. A true record of
the inquiry was kept. The inquiry was, therefore, held to be fair and proper.95 In Karunamoy Banerjee, the workman had
admitted the truth of the allegations made against him. Even when the inquiry proceedings began, in which he stated that
he had nothing more to add in respect of the charges framed against him. The inquiry officer put the questions to the
workman only for giving him an opportunity to explain his conduct or to refer to circumstances, if any, which could be
taken into account in the extenuation of his conduct. The workman was also permitted to put questions to the witnesses
examined in the inquiry in support of the charge. The tribunal held the inquiry to be violative of the principles of natural
justice, inter alia, for the reasons:

(i) that the workman had been examined, even in the first instance and he was cross-examined to elicit points in support of
the charges; and
(ii) he was not allowed to cross-examine the witness.

In appeal, the Supreme Court held that: (i) once the workman himself had admitted his guilt, there would be nothing more
for the management to inquire into and the labour court was not justified in holding that it could still be stated that there
was violation of the principles of natural justice merely because of the fact that the workman was examined in the first
instance; and (ii) the workman was specifically asked by the inquiry officer as to whether he wanted to examine or cross-
examine the witnesses, but the workman categorically stated that he did not want to examine or cross-examine any of those
persons. On this view of matter, the Court held that the order passed by the labour court was erroneous, and upheld the
dismissal.96 In Langharajan Tea Estate, the previously recorded statements of the witnesses were read over to the
delinquent in the presence of the said witnesses and he was asked for his comments. The enquiry officer thereafter took the
statements on record as they were read out in the course of the enquiry and were affirmed by them. In the cross-
examination, the workman himself admitted that those two witnesses had told the manager that they saw the facts deposed
to by them from a particular place. The labour court held that the inquiry was not proper because the inquiry officer relied
on the reports of these two witnesses but did not examine them in the presence of the charged workman and that he was
not allowed to put questions to them by way of cross-examination. In appeal, the Supreme Court observed that if these two
grounds found by the labour court really existed, it would have been fully justified in ignoring the findings recorded by the
officer which were based on statements of the persons recorded behind the back of the charged workman.97

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Occasionally, for seeking clarification, the inquiry officer may ask certain questions from the witnesses. That would not
vitiate the inquiry if the opposite side has opportunity to test those by cross-examination. In Buckingham and Carnatic, the
senior labour officer of the company held the inquiry into the misconduct of the delinquent worker. No other officer
separately conducted the prosecution on the side of the management. He put questions to the witnesses to elicit answers
and allowed the workman to cross-examine those witnesses. He also took down the statements of the concerned worker
and asked for clarifications from him wherever necessary. In these circumstances, the inquiry was held to be fair and
impartial. The criticism that the inquiry officer had acted both as a prosecutor and the judge was held to be unwarranted.98
In Mulchandani, two witnesses who had signed the memorandum earlier, stated before the inquiry officer that they had not
signed any such memorandum. No one represented the management at the inquiry. The inquiry officer made a note that
those two witnesses ‘turned hostile’ and put a number of questions to those witnesses during which they admitted their
writings as well as signatures on the memorandum. Those witnesses were cross-examined at length on behalf of the
workman after the inquiry officer had put questions to them. The labour court held that the inquiry was vitiated because the
inquiry officer ‘had no business to treat the company’s witnesses as hostile witnesses on his own’ and ‘to ask questions for
proving the misconduct alleged against the delinquent employee’. In appeal, the Supreme Court observed that it was not
only reasonable but also necessary to look for some explanation for the contradiction of statements made by the workmen
in the memorandum and before the inquiry officer and if the inquiry officer had put certain questions to those witnesses by
way of clarification, it could not be said that he had done something that was not fair and proper, particularly when the
witnesses were allowed to be cross-examined by the union after they had answered the questions asked by the inquiry
officer. The note made by the inquiry officer that the witnesses had ‘turned hostile’, in the opinion of the court, meant only
that what they had stated before him was inconsistent with what appeared in the memorandum signed by them. It was,
therefore, held that the mere fact that the inquiry officer had put some questions to the witnesses by way of clarification, in
the circumstances of the case, would not vitiate the inquiry.99

In KL Tripathi, the delinquent employee had admitted the factual basis of allegations against him and had not questioned
the veracity of the witnesses or the facts or the credibility of the witnesses or of the entries on record. The Supreme Court
held that there was no violation of the principles of natural justice merely because the evidence was not recorded in his
presence or that the materials gathered, the gist of which was communicated to him, were not gathered in his presence. In
the premises, the absence of formal opportunity of cross-examination did not constitute infraction of any principle of
natural justice. It was further observed that neither cross-examination nor opportunity to lead evidence by the delinquent
was an integral part of quasi-judicial adjudication.1 In Indian Explosives, it was held that the fact that the inquiry officer
asked lengthy questions and recorded them in a detailed manner instead of recording the evidence in a summary manner,
would not vitiate the inquiry because no prejudice was caused to the workmen in recording the evidence in a detailed
manner though the converse might have prejudiced them. It was also observed that the fact that the inquiry officer had put
a number of questions including some leading questions to elicit answers from the witness both for and against the
employer, he cannot be said to have played the role of prosecutor or to have been biased against the workmen especially
when he allowed such witnesses to be thoroughly cross-examined by the workmen and also exonerated some of the
workmen. The inquiry officer can also accept the evidence of a witness in so far as it is correct and reject the other part of
it which is untrue.2

Leading Questions:

On the question whether adducing evidence before the inquiry officer in a domestic inquiry by putting leading questions to
a witness in the examination-in-chief would violate the principles of natural justice, the Madras High Court has taken the
view that it would, and the inquiry would not be fair.3 On the other hand, the Calcutta High Court4held that putting leading
questions to a witness in the examination-in-chief would not vitiate the inquiry. As the technicalities and the strict rules of
procedure under the Indian Evidence Act 1872 do not apply to domestic inquiries, the view of the Calcutta High Court
appears to be preferable to the view of the Madras High Court. In Firestone, in which some leading questions were put to a
witness, the Supreme Court observed that too much legalism could not be expected from a domestic inquiry of this
character.5

Inquiry Pending Criminal Proceedings:

The criminal proceedings and disciplinary proceedings are altogether distinct and have different jurisdictional areas. In
disciplinary proceedings, the question is whether the delinquent is guilty of such conduct as would merit his discharge or
dismissal from service or a lesser punishment, as the case may be, whereas in criminal proceedings the question is whether
any offence under criminal law such as Indian Penal Code, Prevention of Corruption Act or any other penal statute is
established, and if established, what sentence should be imposed upon him.6 The conviction in a criminal case requires a
higher standard of proof than required in a disciplinary inquiry.7 The charges levelled in the disciplinary proceedings have
to be tested keeping in mind the enforcement of discipline and the level of integrity amongst the staff in the administration
of the employer while that is not necessarily a relevant factor to be taken note of in criminal proceedings. Therefore, it is

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neither possible nor advisable to evolve a hard and fast straight-jacket formula that where disciplinary proceedings and
criminal proceedings are based on the same set of facts, there should be an interdiction of the disciplinary proceedings
awaiting the decision in the criminal proceedings.8 Furthermore, in a criminal prosecution, the standard of proof is one of
beyond all reasonable doubt while in a domestic inquiry, it is one of the preponderance of probabilities.9 Therefore, even if
there is an acquittal in criminal proceedings, the disciplinary proceedings will still not be barred because such proceedings
have got an independent angle for testing the charges.10 In Bimal Kanta Mukherjee, the labour appellate tribunal took the
view that the principles of natural justice do not require that an employer must wait for the result of the criminal trial
before taking action against an employee.11 This view was affirmed by the Supreme Court in Kushal Bhan.12 In Tata Oil
Mills, Gajendragadkar CJI observed:

...it is desirable that if the incident giving rise to a charge framed against a workman in a domestic inquiry is being tried in a
criminal court, the employer should stay the domestic inquiry pending the final disposal of the criminal case. It would be
particularly appropriate to adopt such a course where the charge against the workman is of a grave character, because in such a
case, it would be unfair to compel the workman to disclose the defence which he may take before the criminal court. But to say that
domestic inquiries may be stayed pending criminal trial is very different from saying that if an employer proceeds with the
domestic inquiry in spite of the fact that the criminal trial is pending, the inquiry for that reason alone is vitiated and the conclusion
reached in such an inquiry is either bad in law or mala fide.13

However, in cases of a simple nature, the inquiry should continue, particularly if the inquiry has proceeded a long way, it
would not be proper to stop the same for an indefinite period especially when the inquiry would not prejudice the criminal
trial of the delinquents. In judging the gravity of the offence, the nature of the allegation has to be taken into account and
not the person or persons who are actually involved in the offence.14 In cases where the charges in both proceedings are the
same and they are of a serious nature, the holding of domestic inquiry may compel the accused person to disclose his
defence, causing serious prejudice to him, it is advisable to stay the domestic inquiry till the completion of the criminal
trial.15 In JK Cotton, the question was, whether the employer should withhold the inquiry pending the appeal of the
workman in case he is convicted by the trial court in the criminal offence. The court observed that the principles of natural
justice do not require that the employer must wait for the decision of a criminal case or an appeal before proceeding with a
domestic inquiry.16 In Anglo-American Direct Tea, a single judge of Madras High Court stated:

If a domestic tribunal had concluded its inquiry and came to a conclusion even before the criminal court had passed judgment, the
domestic tribunal’s conclusion is not vitiated by the fact that, on the same facts, the criminal court has subsequently acquitted the
worker either on a technical ground or on merits. Similarly, if after a conviction by the criminal court, there is a finding of the
domestic tribunal holding the employee guilty on evidence which is independently assessed by it, the fact that subsequently on
appeal, the worker was acquitted does not mean that the domestic tribunal’s conclusion is in any way vitiated but if the criminal
court’s judgment, either of a trial court or of an appellate court, is earlier than the domestic tribunal’s inquiry, the domestic tribunal
is bound to take the judgment of the original court into consideration. If after taking the judgment into consideration, the domestic
tribunal takes a different view, the labour court cannot interfere if it is found that principles of natural justice have been complied
with and there is evidence which could support the finding of the domestic tribunal. But, if the domestic tribunal does not apply its
mind to the judgment of the criminal court, it may show mala fides and, therefore, its order may be liable to be struck down.17

In Jang Bahadur Singh, the Supreme Court rejected the contention of the employee that initiation of disciplinary
proceedings during the pendency of criminal proceedings on the same facts amounts to contempt of court.18 In Kusheshwar
Dubey, the court observed:

The view expressed in the three cases of this court seem to support the position that while there could be no legal bar for
simultaneous proceedings being taken, yet, there may be cases where it would be appropriate to defer disciplinary proceedings
awaiting disposal of the criminal case. In the latter class of cases, it would be open to the delinquent employee to seek such an
order of stay or injunction from the court. Whether in the facts and circumstances of a particular case there should or should not be
such simultaneity of the proceedings would then receive judicial consideration and the court will decide in the given circumstances
of a particular case as to whether the disciplinary proceedings should be interdicted, pending criminal trial. As we have already
stated, it is neither possible nor advisable to evolve a hard and fast straight-jacket formula valid for all cases and of general
application without regard to the particularities of the individual situation. For the disposal of the present case, we do not intend to
lay down any general guideline. 19

In BK Meena, the facts disclosed that the Central Administrative Tribunal (CAT) stayed the disciplinary proceedings
against the delinquent employee, pending criminal proceedings, in view of the fact that the charge-sheet in the criminal

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case and the memo of charges in the disciplinary proceedings were based on the same set of facts and allegations. In
appeal, the court held that the tribunal was in error in staying the disciplinary proceedings against the delinquent employee
pending the criminal proceedings against him. The court observed: ‘Stay of disciplinary proceedings may not be, and
should not be a matter of course. All relevant factors for and against should be weighed and a decision taken in view of the
various principles laid down in the decisions referred to above’.20 In Collegiate Education, the Supreme Court
discountenanced the suggestion that after the employee has been convicted of a criminal charge the disciplinary authority
should wait till the appeal, revision or other remedies are over because it would not be advisable as it would mean
continuing in service of a person who has been convicted of a serious offence by a criminal court.21 It is now well-
established that the acquittal of a delinquent in criminal proceedings does not bar the disciplinary action against him. In
Md. Moosa, the management dismissed a workman pending criminal proceedings against him after holding a fair and
proper domestic inquiry and without reference to the criminal proceedings. Subsequently, the workman was acquitted by
the criminal court. On a reference at the instance of the employee, the tribunal held that the domestic inquiry had been fair
and proper but it set aside the order of dismissal, for the reason that the workman had been acquitted by the criminal court
on coming to the conclusion that the charge levelled against him had not been made out. The tribunal relied on the criminal
court’s judgment. A single judge of the Madras High Court held that the tribunal had no jurisdiction to sit in appeal on the
inquiry and it was not permissible for the tribunal to take into account the evidence in the criminal court which was not
materially available at the domestic inquiry.22

In Ramachandra Modak, the question before the Supreme Court was whether the departmental inquiry pending against the
employee involved in the criminal case could be continued even after his acquittal in the criminal case. The Supreme Court
held that it was a matter which should be decided by the department after considering the nature of the findings given by
the criminal court. The court further observed that normally where the accused was acquitted honourably and completely
exonerated of the charges, it was not expedient to continue a departmental inquiry on the very same charges or grounds of
evidence. However, merely because the accused was acquitted, the power or the authority to continue the departmental
inquiry would not be taken away nor its discretion in any way fettered.23 In Nelson Moris, the Supreme Court held that the
nature and scope of a criminal case were very different from those of a departmental disciplinary proceedings and an order
of acquittal, therefore, could not conclude the departmental proceedings.24 In the absence of any prohibition in law or any
order of a court of law staying the departmental inquiry, the employer was not justified in waiting for an unreasonably long
period of 13 years, during which period the employee was kept under suspension, for the conclusion of the criminal trial.
The disciplinary inquiry commenced against the employee is quashed.25 In Mannalal, a single judge of the Bombay High
Court held that the fact that a criminal trial under s s 353 and 292 of the Indian Penal Code 1860 was pending against the
workman would not bar the holding of a domestic inquiry, which was initiated not only for the said offence of assaulting a
superior officer but also for certain other offences. The criminal proceedings and departmental proceedings could not be
said to be for identical offences and accordingly, the domestic inquiry was permissible. Acquittal by a criminal court did
not mean automatic exoneration of the delinquent.26 Even after acquittal of an accused from a criminal proceeding,
domestic inquiry can be completed and punishment imposed. The dismissal of the workman for theft of mercury belonging
to the company is not barred by his acquittal in the criminal case.27 The factum of conviction by the criminal court is not
washed out merely by the release of the offender on probation under the Probation of Offenders Act 1958. The stigma
continues and the finding of the misconduct resulting in conviction has to be treated as the conclusive proof. The
disciplinary authority can pass an appropriate order upon issue of show cause notice.28

In Bank of Baroda, the facts were, a clerk was dismissed by the bank for giving false statement while submitting his
application for appointment about the pendency of a criminal case against him. The labour court directed the Bank to
reinstate him with full backwages. The Supreme Court ordered that in view of the fact that the pending criminal
proceedings did not relate to an offence involving cheating or misappropriation which would have had a direct impact on
the decision of the appointing bank, the impugned award be maintained subject to the condition that the employee be
treated as a fresh recruit from the date when he was exonerated by the High Court. The court further observed that the
order was rendered on the peculiar facts and circumstances of the case and would not be treated as a precedent in future.29
In Terrace Estate, the Madras High Court held that where the workmen were dismissed after holding the domestic inquiry
into the charges of riotous and disorderly behaviour, their acquittal by the High Court for the offence punishable under s
302 of the Indian Penal Code 1860 would not vitiate the domestic inquiry as the criminal case and the domestic inquiry
were on different charges.30 Acquittal in a criminal trial on benefit of doubt is not a bar to impose penalty in the
departmental proceedings.31 Where the workman challenged the award of labour court confirming the dismissal of a
workman who was dismissed for misappropriation of paddy on the ground that he was acquitted by the criminal court on
the same charge, the Madras High Court, while dismissing the appeal held that there was neither a whisper before the
labour court or before the single judge of the High Court, about the said acquittal nor were the findings of the inquiry
officer challenged before the labour court as wrong.32

Where the workman was dismissed for throwing acid on the face of a co-worker, his acquittal in the criminal proceedings
initiated against him is not a bar against departmental proceedings.33 Where it was found that, in spite of the fact that the

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workman was honourably acquitted by the criminal court, the disciplinary authority has not considered the said fact and
differed therefrom for sound reasons, nor has he issued a show-cause notice before imposing the punishment, the action of
the management amounted to violation of principles of natural justice and hence deserves to be set aside.34 A single judge
of the Madras High Court quashed the order of reinstatement passed by the labour court in a case of dismissal for a
misconduct involving shortage of goods entrusted to him and in the face of conviction by a criminal court for the same
offence, and held that the labour court arrived at a conclusion contrary to the evidence on record.35 Where a workman,
whose services were terminated on conviction in a criminal case lodged by the management for demanding illegal
gratification, was reinstated on being acquitted subsequently by the appellate court on benefit of doubt, the High Court
held that he was not entitled to backwages as his acquittal could not be called a clean acquittal.36 Where the workman
charged for theft was acquitted by the criminal court on the same set of facts as in the domestic inquiry, the dismissal of
the workman on the basis of a statement made by him in the criminal case, which was found to be more in the nature of an
explanation and not confession, is illegal and the workman is entitled to reinstatement.37 In Bharat Gold Mines, the
Supreme Court deduced the following principles on the issue:

(i) Departmental proceedings and proceedings in a criminal case can proceed simultaneously as there is no bar in their being
conducted simultaneously, though separately.
(ii) If the departmental proceedings and the criminal case are based on identical and similar set of facts and the charge in the
criminal case against the delinquent employee is of a grave nature which involves complicated questions of law and fact,
it would be desirable to stay the departmental proceedings till the conclusion of the criminal case.
(iii) Whether the nature of a charge in a criminal case is grave and whether complicated questions of fact and law are involved
in that case, will depend upon the nature of offence, the nature of the case launched against the employee on the basis of
evidence and material collected against him during investigation or as reflected in the charge sheet.
(iv) The factors mentioned in (ii) and (iii) above cannot be considered in isolation to stay the departmental proceedings but
due regard has to be given to the fact that the departmental proceedings cannot be unduly delayed.
(v) If the criminal case does not proceed or its disposal is being unduly delayed, the departmental proceedings, even if they
were stayed on account of the pendency of the criminal case, can be resumed and proceeded with, so as to conclude
them at an early date, so that if the employee is found not guilty his honour may be vindicated and in case he is found
guilty, the administration may get rid of him at the earliest38.

In Dhanna Ram, the facts were: a workman was removed from service on being convicted by the trial court. Subsequently,
he was acquitted by the appellate court. Despite this, the management opted for establishing the charges before the labour
court, but eventually failed to prove the case against the workman, with the result that the labour court directed the
reinstatement of the workman. The Rajasthan High Court, while upholding the order of the labour court, held that the
employer was not entitled to a third opportunity to come to a different finding from what had been reached by two courts,
where he had the fullest opportunity to lead evidence to sustain the allegation against the workman.39 The labour court
cannot interfere with the order of dismissal on the ground that when the criminal court has not relied upon the evidence of
the eye-witnesses to prove negligence on the part of driver, the employer could not have come to the conclusion of
negligence on the part of the driver.40 Acquittal in a criminal trial on benefit of doubt is not a bar to impose penalty in the
departmental proceedings.41 Quashing the order of reinstatement passed by the labour court on the ground that the film
stolen by the workman was only 70 feet and that he was acquitted by the criminal court, it was held that the value of
property stolen was not the criterion, and that the labour court failed to analyse the gravity of offence.42Where the
workman, who was charged for theft but acquitted in the criminal proceeding, did not report for duty thereafter and was
absent unauthorisedly, yet filed a criminal complaint against the management for non-settlement of his terminal benefits, it
was held that the criminal complaint was an abuse of the process of law and was not maintainable, and that the employee
should approach the machinery provided under the ID Act.43 In Uranium Corporation, the facts disclosed that a workman
was charge-sheeted for assaulting the Chief Medical Officer, apart from filing a criminal case against him. While the
criminal proceedings were pending, the management conducted the enquiry and dismissed the workman. Subsequently, he
was acquitted by the criminal court. The Jharkhand High Court upheld the award passed by the tribunal directing
reinstatement of the workman with a lesser punishment of stoppage of two increments, but without any back wages.44
Mere acquittal in a criminal case does not have the effect of nullifying the decision taken in departmental proceedings.45

Adjournments

Even before the domestic tribunals, the parties have no right to go on asking for as many adjournments as they like.46 To
grant or refuse adjournment is in the discretion of the inquiry officer in the circumstances of a case. The mere fact that the
inquiry officer refused to adjourn the case would not vitiate the inquiry.47 The question whether by refusing adjournment,
the inquiry officer denied a reasonable opportunity to a party would depend upon the facts and circumstances of each case.

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The discretion is to be judicially exercised bearing in mind that a party is not denied reasonable opportunity to present his
case in the inquiry. If it appears that by refusing to adjourn the hearing at the instance of the charge-sheeted workman, the
inquiry officer failed to give the said workman a reasonable opportunity to lead evidence, that might, in a proper case, be
considered to introduce an element of infirmity in the inquiry.48 For instance in Tejvir Singh, the workman was given just a
day’s time to face the domestic inquiry. On the request of the workman to postpone the inquiry for two or three days to
enable him to make arrangements for his representation in the inquiry and also to bring his witnesses was rejected. In the
inquiry, the management examined as many as three witnesses the same day and also produced a number of documents
with which the workman was not familiar at all and was not in a position to effectively cross-examine those witnesses.
After completing the evidence of these three witnesses, the workman was immediately called upon to enter his defence.
Even at this stage, his request for adjournment to enable him to produce his witnesses was rejected and he was given only
one hour’s time to get his evidence. The workman was able to get only one witness. In these circumstances, the Supreme
Court deprecated the attitude adopted by the inquiry officer and held that the inquiry had been conducted in gross violation
of the principles of natural justice without giving a real and fair opportunity to the workman to participate in the
proceedings.49 In Baldev Lal, in a different set of facts and circumstances, the Supreme Court held that the refusal of the
inquiry officer to grant further adjournment of the inquiry proceedings was justified.50

Ex Parte Inquiry

Industrial adjudication, normally, discourages the practice of a workman refusing to participate in domestic inquiries or to
withdraw from inquiries without any reasonable ground or taking unreasonable and undesirable attitude. In other words,
when there is no valid reason for the delinquent employee not to appear before the inquiry officer, no complaint for want
of opportunity is tenable.51 In Northern Rly CCS, the workman refused to participate in the inquiry taking a very
unreasonable and undesirable attitude in persistently demanding representation by a stranger which was not permissible.
The Supreme Court observed that such attitude deserved to be condemned.52 However, even in a case, where a workman
refuses to participate in an inquiry or withdraws from the inquiry in the course of the proceedings, it is incumbent on the
inquiry officer to complete the inquiry by taking all evidence ex parte to find out whether or not the charge has been
proved. In the event he finds that the charge is proved he would submit his report to the disciplinary authority. The
disciplinary authority, then should communicate a copy of the inquiry report to the delinquent and seek his explanation for
the proposed action. If the workman submits any explanation, the same has to be taken into consideration and then an
appropriate order should be passed in accordance with law.53 In Imperial Tobacco, at a particular stage of the inquiry
proceedings, the workman withdrew from the inquiry. The employer dismissed the workman without even completing the
inquiry proceedings in the manner prescribed by the Standing Orders. Holding the order of dismissal to be invalid, the
Supreme Court observed that even though the workman had withdrawn from the inquiry-whether rightly or wrongly—‘the
inquiry should have been completed and all evidence should have been taken ex parte’. The fact that the workman
withdrew from the inquiry at an early stage ‘did not absolve the inquiry officer from conducting the inquiry by taking
evidence ex parte’. Furthermore, it also did not absolve the punishing authority from following the procedure prescribed in
the relevant Standing Order in inflicting the punishment, but once the ex parte inquiry is completed on taking all evidence
in compliance with the requirements of the relevant Standing Orders or the principles of natural justice, the action based on
such inquiry normally will not be invalidated.54 In Harinagar Sugar, the delinquent workman refused to participate in the
domestic inquiry initiated against him, unless he was permitted to be represented by an office-bearer of the trade union of
which he was a member. The inquiry officer, therefore, proceeded with the domestic inquiry ex parte. The further
opportunity given to the workman to participate in the inquiry was also not availed of by him. On the basis of the evidence
on record of the ex parte domestic inquiry, the workman was found guilty of the charges levelled against him and was
dismissed from service. The Patna High Court held that the inquiry was not contrary to the principles of natural justice
merely because the workman was not allowed to be represented by a member of his union. The court observed that ‘the
workman who was given an opportunity to take part in the domestic inquiry refused to avail himself of the same and
deliberately absented himself, he could not be allowed to say that the action of the management in proceeding with the
inquiry ex parte was not fair or proper. It is, therefore, not open to him to contend that the inquiry was not bona fide on that
account.55 In a somewhat similar situation, in Lakshmi Devi Sugar Mills, Bhagwati J, observed:

If full and free opportunity was given to the respondents to present themselves at the inquiry and defend themselves, it could not be
said that the inquiry was anything but fair. No principles of natural justice were violated and the management was at liberty to
come to its conclusions in regard to the culpability of the respondents and also to determine what punishment should be meted out
to the respondents for the misconduct and insubordination proved against them.56

The principles of natural justice require that notice of the proposed inquiry should be given to the concerned person. They
do not require that even after giving the notice, if the concerned workman remains absent, the inquiry should not be held in
his absence.57 Thus, where in the midst of a domestic inquiry, the workman withdrew from it for some reason or other and
the inquiry officer thereafter concluded such inquiry ex parte, and held the workmen guilty of the charge levelled against

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them, the validity of the inquiry was upheld.58 Likewise, where the workmen when asked to express their desire to state
whether they would like to have an oral hearing, persisted that the management should negotiate with the union, and the
management, in these circumstances, passed an order dismissing the workmen from service, on the basis of the material on
record, it was held that, in such a situation, the rules of fair hearing or fair opportunity were not violated in any way.59
Where the delinquent workman does not choose to participate in the domestic inquiry to substantiate his case and an
adverse inference for not examining himself would be justified as he would be the best witness for his case and many
features which are within his special and personal knowledge could be appropriately placed before the tribunal.60 In Baldev
Lal (supra), the workman appeared before the inquiry officer and after a shortwhile, he left the room under the pretext of
consulting somebody outside and took more than an hour to return. On resuming the inquiry, when he was asked to sign
the first page of the inquiry proceedings, he refused to do so and again left the inquiry saying that he was to consult his
companions outside. As one of the witnesses of the management was about to give his evidence, the workman’s brother
entered the inquiry room and started interfering with the inquiry proceedings which resulted in a serious scuffle. In the
circumstances, the inquiry was adjourned to another date and a telegram was sent to the workman apprising him of the date
of the inquiry. On the date of the resumed inquiry, a telegram was received from the workman’s wife saying that he was
out of station and requested for postponement of the inquiry. The inquiry officer, however, proceeded with the inquiry ex
parte as a result of which the workman was dismissed. The Supreme Court disagreed with the holding of the tribunal that
the inquiry was in violation of the rules of natural justice, and observed that ‘it would be difficult to say that if the inquiry
officer took the view that the telegram sent by the respondent’s wife was merely another incidence of unwillingness of the
respondent to take part in the inquiry and was an attempt to avoid it and, therefore, the inquiry sought to be held even in
the absence of the respondent, it is an unreasonable view.61

If the delinquent workman does not attend the inquiry on the fixed date and an order of ex parte proceedings is made,
proceedings can be held on subsequent dates without giving any notice to him.62 In case, a workman is prevented from
participating in a domestic inquiry on account of the conduct of the management, there is no doubt that the inquiry if held
ex parte will be vitiated for violation of the principles of natural justice, but if the workman could not participate in the
domestic inquiry for reasons for which the management cannot be held responsible, holding the ex parte inquiry against
them may not necessarily be in violation of the principles of natural justice. In TELCO, the Patna High Court held that the
ex parte inquiry against the delinquent workmen who were arrested by the police not at the instance of the management
was not vitiated for violation of the principles of natural justice. It was further held that since these workmen were held
under criminal charges, it could not be said that their absence was for reasons beyond their control.63

In Mohd Shahid, it was held that the delinquent employee having refused to participate in inquiry, could not turn around
and complain that his dismissal was against principles of natural justice. However, withdrawal from inquiry by the
delinquent would not absolve the inquiry officer from holding an ex parte inquiry according to law. To put it differently, it
does not mean that a finding against the delinquent can be given by an inquiry officer without further investigation. It is
still necessary for the inquiry officer to record the evidence although in the absence of the employee. It is of utmost
necessity that the disciplinary authority examines the case with great care before any decision is taken about the guilt of the
person. The person proceeded against has a right at different stages of proceedings and if he defaulted at one stage then it
will not take away his right to defend himself altogether at a different stage.64 Where the chargesheeted employee has not
submitted his reply to the chargesheet despite repeated reminders nor has appeared before the inquiry officer, and did not
inspect the relevant record, though he was asked to do so, it could not be said that the conclusion of the inquiry officer, on
the basis of the material available, that the charges were proved, was a negation of the principles of natural justice.65 Where
the delinquent workman was served with notice and he filed his reply and also appeared before the enquiry officer, but
remained absent thereafter despite notices, it could not be said that he was not given opportunity to participate in the
enquiry. It was a case of not availing the opportunity given to him. If the enquiry officer proceeds with the enquiry ex parte
in these circumstances, it could not be said that the enquiry was vitiated.66 In CMD, VSP, the facts were: the workman, a
habitual absentee, did not submit his explanation on the ground that his mother was ill, and he did not present himself
before the enquiry officer, despite several opportunities given to him with the result the enquiry was held ex parte. And a
subsequent explanation given to another authority of the company was not pleaded in the enquiry proceedings. It was held
by the Supreme Court that the High Court, in exercise of its writ jurisdiction under Art 226, cannot overturn a legal order
on the ground of sympathy and sentiment.67

In Hemant Kumar, the facts briefly were: the respondent-workman was employed in the appellant-Bank as a cashier-cum-
clerk. In January, 1994 it was discovered that the respondent had been indulging in misappropriation of money by making
fictitious entries and manipulations in the bank’s ledgers. On his malfeasance coming to light, the respondent not only
admitted his guilt in writing vide memo dated 3 March 1994 but also deposited the amount of Rs.14,000/- to make good
the amount earlier defalcated by him. He was given a charge-sheet detailing his various acts of omission and commission
to which he did not give any reply. Nevertheless, before the Enquiry Officer in course of the preliminary enquiry he
expressed the intent to defend himself in the enquiry. The enquiry was first fixed on 15 November 1994 but on that date
the respondent did not appear without giving any intimation to the Enquiry Officer. Due to his non-appearance the enquiry

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was adjourned to 28 November 1994. On that date, once again, he did not come to participate in the enquiry proceedings
but sent a request for adjournment on the ground that his mother-in-law was seriously ill at Agra. The enquiry was once
again adjourned and it was fixed for 14 December 1994. He was intimated about the next date fixed in the enquiry through
registered post as well as hand delivery letters dated 15 November 1994 and 28 November 1994 respectively. On 14
December 1994 the respondent was once again absent and there was no intimation from him. In those circumstances and
having regard to the fact that the witness intended to be examined by the management in support of the charge had come in
connection with that enquiry from Delhi to Dehradun for the third time, the Enquiry Officer decided to proceed with the
enquiry and examine him ex parte. The said witness happened to be the Branch Manager where the respondent was posted
at the material time and where the misappropriation was committed by him. On the basis of the enquiry, the respondent
was dismissed. The tribunal directed reinstatement on the ground that the enquiry was violative of principles of natural
justice, which award was affirmed by the High Court of Uttarkhand. Quashing the orders of the tribunal and the High
Court, Aftab Alam J (for self and Lodha J) of the Supreme Court observed:

We are of the view that both the reasons assigned by the Tribunal for condemning the departmental enquiry as defective are
completely untenable. The principles of natural justice cannot be stretched to a point where they would render the in-house
proceedings unworkable. Admittedly, the respondent had not appeared for the enquiry on two earlier dates. On the third date too he
was absent and there was no intimation from him before the Enquiry Officer, yet the Tribunal insists that it was the duty of the
Enquiry Officer to find out from the concerned department of the bank whether any intimation or application was received from
the respondent.. .. The Tribunal’s observation that it was only the third date of hearing and hence, it could not be said that the
respondent had adopted dilatory tactics can only be described as unfortunate. We completely reject the notion that three barren
dates in an in-house proceeding do not amount to delay.. .. The second reason assigned by the Tribunal that the Enquiry Officer
should have allowed the respondent the opportunity to lead evidence in rebuttal is also without substance in the overall facts of the
case. The respondent had already tendered two admissions of guilt in writing. .. and there was hardly anything that could be said on
his behalf to repel the charges.. .. the Tribunal’s findings are wholly unreasonable and perverse and fit to be set aside. The High
Court, unfortunately, did not consider the matter as it should have, in light of the discussions made above. The High Court’s order
is equally unsustainable.68 (Paras 10-12).

(iii) Report of Inquiry Officer

(a) General Principles

The inquiry report is a document of vital importance in the course of disciplinary proceedings against a delinquent
workman. If the inquiry officer finds that the charges levelled against the workman are proved it will result not only in the
deprivation of the livelihood but also attaches a stigma to the character of the workman. The inquiry report, therefore,
should reflect the application of mind by the inquiry officer to the pleadings and the evidence adduced before him by the
parties. ‘An inquiry report in a quasi-judicial inquiry must show the reasons for the conclusion. It cannot be an ipse dixit of
the inquiry officer’.69 In the words of Subba Rao J, ‘Reasoned order is a desirable condition of judicial disposal ...A
speaking order will at its best be a reasonable and at its worst be at least a plausible one’.70 Satisfactory decision of a
disputed claim may be reached only if it be supported by the most cogent reasons that appealed to the authority. Recording
of reasons in support of a decision on a disputed claim by a quasi-judicial authority ensures that the decision is reached
according to law and is not the result of caprice, whim or fancy or reached on grounds of policy or expediency.71 The
whole object of holding a domestic inquiry against a delinquent workman is to enable the inquiry officer to decide upon
the merits of the dispute before him,72 and such inquiries must conform to the basic requirements of natural justice and one
of the essential requisites of a proceeding of this character is that when the inquiry is over, the officer must consider the
evidence and record his conclusions and reasons therefore.73 A mere form of inquiry would not satisfy the requirements of
industrial law and protect the disciplinary action taken by the employer against challenge.74 It would, therefore, be wholly
misconceived to think that once evidence is recorded, all that the employer is expected to do is to pass an order of
dismissal which impliedly indicates that the employer accepts the view that the charges framed against the employee have
been proved.75 In Kharda & Co., it was held that one of the tests which the industrial tribunal is entitled to apply in dealing
with industrial disputes of this character is, whether the conclusions of the inquiry officer was perverse or whether there
was any basic error in the approach adopted by him. In the absence of the findings or conclusions recorded by the inquiry
officer, it would be impossible for the adjudicator to know as to how he approached the question and what conclusions he
reached before taking the disciplinary action against the delinquent workman and it would, therefore, be difficult for the
adjudicator to decide whether the approach adopted by the inquiry officer was basically erroneous or whether his
conclusions were perverse. The failure of the inquiry officer to record his findings and conclusions at the end of the inquiry
would, therefore, constitute a serious infirmity in the inquiry itself which would render the inquiry invalid and the tribunal
would be justified in ignoring the inquiry. In this case, the inquiry was held to be vitiated by a serious infirmity for the
reason that at the end of the inquiry, the manager who held the inquiry did not record any findings and straightaway passed

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the order of dismissal taking the view that it was not necessary to make a formal report because he himself was the
punishing authority. Gajendragadkar J observed:

If industrial adjudication attaches importance to domestic inquiries and the conclusions reached at the end of such inquiries, that
necessarily postulates that the inquiry would be followed by a statement containing the conclusions of the inquiry officer.76

The inquiry officer, therefore, after taking the evidence adduced by the parties has to record his findings and conclusions as
to whether the misconduct is proved or not which are of vital importance for the adjudication of the dispute arising out of
the disciplinary action. It is, therefore, essential that the officer should makes a brief report indicating clearly his
conclusions and reasons in support thereof. The fact that the inquiry officer himself is the ultimate punishing authority,
cannot help to dispense with the making of the report recording the findings holding the charge-sheeted workman guilty of
the charges levelled against him. It is, of course, not necessary that the report should be elaborate. Howsoever brief the
report is, it should indicate in a broad way the conclusions of the officer and his reasons. The inquiry report is a document
which will have to be closely examined by the Industrial Tribunal when a dispute pertaining to disciplinary action against
the employee is brought before it for its adjudication. In other words, when the legality or propriety of the disciplinary
action, which follows the inquiry report is put in issue before an industrial tribunal, it would be impossible for the tribunal
to consider whether the conclusions reached by the inquiry officer were perverse or not.77 A cryptic report, for instance,
without stating any reasons will be of little value.78

The standard of proof required in a domestic inquiry is only preponderance of probabilities. It is not necessary that there
should be direct evidence. Circumstantial evidence satisfying the test of preponderance of probabilities will be sufficient.79
In Northern Dooars Tea, the inquiry officer did not record any proper finding for his conclusions at the end of his inquiry
but merely drew some notes in that behalf. The Supreme Court did not treat such notes as a finding recorded in the inquiry
and held the inquiry to be invalid.80 In Samnuggur, the report of the inquiry officer was not produced before the tribunal
and, in fact, there was no evidence to show that such a report had at all been made. The tribunal, therefore, took the view
that either the report was not made or was not produced before it and therefore, held that the inquiry was invalid.81 This
holding was affirmed by the Supreme Court in Saran Motors, in which it was held that the mere failure on the part of the
inquiry officer to make notes of his inspection of the spot of the incident could not invalidate the whole domestic inquiry,
when there was other evidence before him to support his findings, his conclusion could not be rejected on that ground.82 In
Howrah Trading, the report of the inquiry officer was considered to be of ‘little value’ because he had failed to give
reasons and submitted a cryptic report ending with the statement that ‘all other relevant points from the proceedings will be
explained personally.83 In Anil Kumar, the evidence was annexed to the report and no correlation was established between
the two, showing application of mind. The court held that there was no inquiry worth the name and the order of
termination based on such proceeding disclosing non-application of mind, was unsustainable.84 The findings of an inquiry
officer must be supported by legal evidence.85 If, after the scrutiny of the report of the inquiry officer, the tribunal comes to
the conclusion that the findings are based on irrelevant and extraneous matters, the inquiry will be liable to be set aside, but
the findings of an inquiry officer are not to be lightly brushed aside merely because an inquiry officer, while writing his
report, has mentioned some facts which are not strictly borne out by the evidence before him.86

In SC Prasad, the inquiry officer had made certain remarks in his report which were not based on any evidence on record
but were based on his personal knowledge. Since, from the inquiry report, it was clear that these remarks were made
incidentally and had not been relied on in holding any of the workmen guilty of the charges, the inquiry was not invalid.
Strictly speaking, an inquiry officer is not entitled to bring in those facts in his report which do not form part of the
evidence. If, therefore, those remarks had been relied on in finding any of the workmen guilty, then undoubtedly, the
inquiry would have been vitiated on the ground that it did not form part of the evidence, because ‘if the inquiry officer
were to transgress the rules of natural justice by relying on matters which the workman had no opportunity to meet, the
validity of his findings would be effected’. The tribunal had held that the inquiry was vitiated on account of delay between
the service of the chargesheet and the report of the inquiry officer but there was no allegation of any tampering of evidence
of any of the witnesses and the delay between the service of the chargesheet and the report of the inquiry officer was not
considerable by any measure and the lapse of time between the recording of the evidence and the taking of the signature
thereon of the witnesses was explained by the inquiry officer. In these circumstances, the counsel for the workmen himself
did not support the view taken by the tribunal but inordinate delay in submitting the inquiry report is likely to vitiate the
findings of the inquiry. However, the question whether an inquiry is vitiated on account of delay in submitting the report
will depend on the facts of each case.87

(b) Minor Discrepancies

No doubt, the report of the inquiry officer will be vitiated where the inquiry officer acts mala fide, ie, ignores or excludes
from consideration, a vital and material piece of evidence or takes into consideration any irrelevant or extraneous

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materials, or where he transgresses the principles of natural justice by being biased against the workman or denies to him a
reasonable opportunity to defend himself or where his report is perverse, ie, the findings are not supported by any evidence
or are entirely opposed to the evidence on record. It has also to be borne in mind that it is not every factual inaccuracy,
however slight or insignificant, that would justify the quashing of the report.88 The fact that statements of certain witnesses
were recorded in shorthand in the course of domestic inquiry but were signed later on, when they were transcribed in long
hand and typed, would not make the inquiry mala fide, irregular or improper.89 The fact that the record of the domestic
inquiry was not signed by the inquiring officer but was signed only by the two witnesses and the concerned workman,
would not lead to the conclusion that, in fact, no inquiry was held.90 Likewise, the mere fact that the inquiry officer had
failed to make notes of inspection of the site of the incident, would not be a sufficient ground to reject his findings when
there was other evidence before him to support his findings.91 In National Carbon, minor discrepancies regarding the
signatures of the witnesses on their statements before the inquiry officer and the signature of the manager on the
endorsement of the inquiry report, were not held to be vitiating the inquiry report, as the workmen could have got them
cleared before the tribunal by cross-examination which was not done.92 In Kalindi, the examination of the inquiry officer’s
report showed that a certain clerical error in the concluding portion of the report had crept in, ie, the name of one person
was accidentally mentioned instead of another person’s but in view of the fact that the actual allegation against the
delinquent workman was found to have been proved by the inquiry officer, it was held that the conclusion and not the
wrong statement weighed with the punishing authority in determining the punishment and the inquiry was, therefore, not
vitiated.93

(c) Perversity

Perversity vitiates disciplinary proceedings. There is a two-fold test of perversity of a finding. The first test is that the
finding is not supported by any legal evidence at all and the second is that on the basis of the material on the record, no
reasonable person could have arrived at the finding complained of.94 In each of these cases, the findings would be treated
as perverse. A finding recorded in a domestic inquiry can be characterised as perverse only if it is shown that such a
finding is not supported by any evidence at all or is entirely opposed to the whole evidence adduced before it or no
reasonable person could have come to the finding on the basis of the evidence on the record.95 In other words, an industrial
tribunal would not be justified in characterising the finding recorded in the domestic inquiry as perverse unless it can be
shown that such finding is not supported by any evidence or is entirely opposed to the whole body of evidence adduced
before it. A broad dichotomy is always maintained between a decision which is perverse and the one which is not perverse.
If the decision is arrived at on no evidence or evidence which is thoroughly unreliable and unacceptable and if a reasonable
and well-instructed person would not act upon such evidence and decide, then it is to be characterised as a perverse order;
but, if there is evidence on record, however, compendious it may be, if it is acceptable and if it could be relied upon, then a
conclusion arrived at in such a situation cannot be termed as a perverse. If otherwise the conclusion of the inquiry officer is
reasonable, then the labour court ought not normally interfere with such a decision on a mere abstruse and abstract basis.1

It is, therefore, essential to bear in mind the difference between a finding which is not supported by any legal evidence and
a finding which may appear to be not supported by sufficient evidence or may be based on inadequate or unsatisfactory
evidence.2 A wrong finding is not necessarily a perverse finding, and a finding cannot be described to be perverse merely
because it is possible to take a different view on the evidence.3 Nor can a finding be called perverse, because in certain
matters, the line of reasoning adopted by the inquiry officer is not very cogent or logical. When it appears to the tribunal
that no person properly instructed in law and acting judicially could have reached the particular decision, it might proceed
on the assumption that misconception of law has been responsible for the wrong decision.4 However, the line of
demarcation between a wrong finding and a perverse finding is hardly perceptible. In Ludh Budh Singh, the Supreme Court
pointed out that a finding recorded by an inquiry officer ignoring the material admissions made by the party in favour of
the workman is not a question of mere appreciation of the evidence, but really recording a finding contrary to the evidence
adduced before him. Therefore, in a case where the findings of fact are based on no legal evidence and the conclusion is
one to which no reasonable man would come, it would be a case of perversity and not of reappraisal of evidence.5 In
Rajinder Kindra, the Supreme Court held that where the findings are based on no legal evidence and are either ipse dixit or
based on conjectures and surmises unrelated to evidence and they disclose non-application of the mind, such findings and
conclusions, are perverse.6 In Saudi Arabian Airlines, Srikrishna J of Bombay High Court observed that the perversity of
findings could arise only if:

(a) there was no evidence whatsoever to support the finding, or

(b) the conclusions recorded were diametrically contrary to the evidence on record, or

(c) the conclusions were such that no reasonable person would have arrived at.7

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In deciding the question as to whether a particular conclusion of fact was perverse or not, the industrial tribunal would not
be justified in weighing the evidence for itself and determining the question of the perversity of the view arrived at by the
inquiry officer in the light of his own findings on the question of fact.8 The findings of the domestic tribunal cannot merely
be brushed aside unless they are shown to be based on no evidence.9 In a domestic inquiry, once a conclusion is deduced
from the evidence, it is not permissible to assail that conclusion even though it is possible for some other authority to arrive
at a different conclusion on the same evidence. This point is illustrated in the decision of the Supreme Court in Banaras
Electric.10In spite of the finding that there was no mala fide intention on the part of the employer and that the inquiry was
not defective, the labour court held that the finding of the inquiry officer was perverse and that there was victimisation as
the inquiry officer should not have placed implicit reliance on the statement of a solitary witness but he must have
subjected his statement to a careful scrutiny in the light of the defence evidence and the surrounding circumstances which
could be of great help in ascertaining the truth, and in the circumstances it was difficult to arrive at the conclusion that the
guilt had been brought home to the workman concerned, the finding of the inquiry officer was not justified from the
evidence on record. This holding was not ultimately sustained in appeal by the Supreme Court as the evidence on record
clearly justified the finding of the inquiry officer that the charged act of misconduct was proved against the workman, and
the employer was justified in finding the workman guilty of disobedience of the order and the finding of victimisation was
based on no evidence and was, therefore, wholly unwarranted in law.

In ASO, RPF, the employee was found guilty of the misconduct for consuming alcohol while on duty on the basis of
medical report of district medical officer who was not examined in the domestic inquiry but the inquiry officer relied on
the report of the Tamil Nadu forensic laboratory which was not marked in the inquiry proceedings. The finding that the
employee was guilty was held to be perverse and unreasonable as it resulted in miscarriage of justice.11 Similarly, in Anand
Chandra Prusty, the burden of proof to establish the charge was on the management, but the inquiry officer instead of
placing the burden of proof to establish the charge on the management, threw it on the delinquent being under the
impression that it was for the workman to establish his denial of the charge and on his failure to do so, the charge should
be taken to have been proved. This illegal casting of burden of proof on the workman resulted in arriving at a wrong
conclusion that in the absence of evidence in support of the defence the charge was proved. The Orissa High Court
quashed the finding of guilt against the employee as being perverse.12 In Chandrakumar Deshmukh, out of two statements
of witnesses, the inquiry officer accepted one in favour of the prosecution and rejected the other in favour of the
delinquents without giving reasons and without examination of those witnesses. A single judge of the Bombay High Court
held that the inquiry was perverse and in violation of the principles of natural justice. The question whether the finding of
the inquiry officer in a domestic inquiry is vitiated or perverse is a pure question of law. Such a question can for the first
time be raised before a writ court or the appellate court. The same principle will apply both to a suit and a writ
proceeding.13 Any action of discharge or dismissal based on the findings of the inquiry officer which are vitiated or
perverse will not be sustainable.14

Show-Cause Notice

Neither the ordinary law of the land nor the industrial law requires an employer to give a show-cause notice to the
workman before imposing disciplinary punishment on him. The only class of cases where such a notice is necessary are
those arising under Art 311 of the Constitution and even that has now been removed by the amendment of that Article.
Such requirement would unnecessarily prolong disciplinary inquiries which in the interest of industrial peace should be
disposed of in as short a time as possible.15 Rules of natural justice do not make it necessary for the employer to give an
opportunity to meet the punishing authority before imposing the punishment and all that is necessary is that a fair inquiry
should be held.16 Nor is there any requirement to give a second show-cause notice to the workman after the employer
forms a provisional opinion that punishment of dismissal or discharge should be awarded as under Art 311 of the
Constitution.17 In TC Srivastava, the court pointed out that no doubt that in industrial law it is not necessary to give second
opportunity, to show cause to the workman against the proposed punishment, but this does not mean that the requirement
of such opportunity cannot be provided in the service rules, regulations or Standing Orders of an undertaking but such
requirement should be discernible from the express language or necessary implication of the Standing Order. In this case,
the relevant Standing Order provided: ‘All dismissal orders shall be passed by the manager...after giving the accused an
opportunity to offer an explanation’. The court observed that these words were wholly inappropriate to convey the idea of
a second hearing or opportunity on the question of punishment but they were appropriate only in the context of seeking an
explanation in regard to the alleged misconduct charged against a worker. Therefore, it is the alleged misconduct that has
to be explained by the workman and not the proposed punishment.18 Likewise in Engine Valves, the relevant Standing
Order provided that ‘no order of dismissal shall be made unless the workman concerned is informed in writing of the
alleged misconduct and is given an opportunity to explain the circumstances alleged against him’, the Madras High Court
held that this Standing Order did not contemplate the requirement of a second show-cause notice.19

If a provision for a show-cause notice has been made in the Standing Orders which have been certified under the Industrial
Employment (Standing Orders) Act 1946, the requirement of show-cause notice against the punishment, in such a case,

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would be statutory and would not be a ‘mere idle formality’. Non-compliance of such requirement of the notice would
vitiate the punishment of dismissal. For instance, in Lakshmiratan Cotton, the relevant Standing Order required the
employer to give notice, in writing, to the concerned workman to show-cause within a specified period of time as to why
the proposed punishment be not awarded, where it proposed to inflict the punishment of dismissal for any misconduct. It
further required that the copies of the findings of the inquiry officer and the charge or charges should also be furnished to
the workman along with the show-cause notice. Evidently, this Standing Order was intended to provide an opportunity to
the workman to show that the findings of the inquiry officer were not justified on the evidence on record and even if the
findings were justified, the extreme penalty of dismissal was not justified, having regard to the nature or gravity of the
misconduct and his past record and any other extenuating circumstances. This condition was thus a condition precedent
before an order of dismissal could validly be passed by the employer. The order of dismissal made without complying with
the requirements of the Standing Order was, therefore, held to be invalid. If an opportunity is not given to the workman to
show-cause against the proposed punishment, it will constitute breach of the mandatory provisions of the Standing Order
as it will amount to depriving him of a reasonable opportunity to defend himself by showing that the findings of the
inquiry officer were not sustainable or at any rate, the proposed punishment was excessive.20

In cases, where a Standing Order, service rule or regulation provides for a show-cause notice, apart from the show-cause
notice, the rules of natural justice require that the report of the inquiry officer along with the record of the inquiry
proceedings and any other relevant material must be furnished to the workman. In the absence of such material, it may not
be possible for the workman to show that the inquiry was not fair or valid and even if the inquiry was fair and valid, the
punishment of dismissal was not commensurate with the gravity of the misconduct for various reasons such as that his past
record should not have been taken into account or that the past record was not so bad as to merit the maximum punishment
of dismissal. Thus, the requirements of Art 311 of the Constitution can be engrafted in the procedure of disciplinary action
under the industrial law by making a provision, in the service rules or the Standing Order applicable to an undertaking, to
that effect. Then, the judicial dicta dealing with the cases under Art 311 (2) of the Constitution would become relevant in
connection with the requirement of show-cause notice for disciplinary action under the industrial law. In Bashyan, a two-
judge bench of the court took the view that the non-supply of a copy of the report would constitute violation of the rules of
natural justice as it will tantamount to denial of the reasonable opportunity as required by Art 311 (2) of the Constitution as
well as the rules of natural justice. The court also pointed out that requirement of supplying a copy of the inquiry report to
the delinquent to enable him to point out anomaly, if any, before the punishment of dismissal is imposed by the
disciplinary authority, is different from serving a second show-cause notice against the penalty to be imposed which has
been dispensed with by the forty-second amendment of the Constitution.21 However, in Ramzan Khan, Mishra CJI held:

Deletion of the second opportunity from the scheme of Art 311(2) of the Constitution has nothing to do with providing a copy of
the report to the delinquent in the matter of making his representation. Even though, the second stage of the inquiry in Art 311(2)
has been abolished by the amendment, the delinquent is still entitled to represent against the conclusion of the inquiry officer
holding that the delinquent is guilty of the charge or charges alleged against him. 22

He further stated that the delinquent was entitled to a copy of the report of the inquiry officer and will also be entitled to
make a representation against it, if he so desires, and non-furnishing of the report would amount to the violation of the
rules of natural justice and make the final order liable to challenge hereafter. In Karunakar, a Constitution Bench affirmed
the earlier dicta to the extent that the right of the employee to receive the report of the inquiry officer is a part of the
‘reasonable opportunity’ of defending himself and if this is denied to him, he is in effect, denied the right to defend himself
and to prove his innocence in the disciplinary proceedings. It further noted that upon receipt of the report, two further
rights of the employee arose viz: (i) the right to show-cause against the findings in the report; and (ii) the right to show-
cause against the proposed penalty, which are independent of one another. The former is the right to prove that the inquiry
is unfair or invalid and the workman is not guilty of the alleged misconduct while the latter is the right to show that no
penalty or lesser penalty should be imposed even if he is held to be guilty. If after considering the inquiry officer’s report
the disciplinary authority decides to drop the proceedings or imposes a penalty other than dismissal or discharge, there is
no occasion to issue the notice to show-cause against the proposed penalty. The right to show-cause against the proposed
penalty arises at the stage when the disciplinary authority after considering the findings in the inquiry report comes to the
conclusion with regard to the guilt of the employee and proposes to award penalty on the basis of its conclusions. This
right has now been dispensed with by the forty-second amendment of the Constitution. The right to receive the inquiry
report is an essential part of the reasonable opportunity under Art 311(2) as well as the rules of natural justice as the
findings recorded by the inquiry officer form an important material fact before the disciplinary authority which along with
the evidence is taken into consideration by it to come to its conclusions. After the amendment of Art 311(2), the
disciplinary authority has to consider the representation of the employee against the report before it arrives at the
conclusion with regard to his guilt or innocence of the employee. Speaking for the court, Sawant J, said:

The theory of reasonable opportunity and the principles of natural justice have been evolved to uphold the rule of law and to assist

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the individual to vindicate his just rights. They are not incantations to be invoked nor rights to be performed on all and sundry
occasions.23

The question, whether in fact, prejudice has been caused to the employee or not on account of the denial to him of the
report has to be considered on the facts and circumstances of each case. Where, therefore, even after the furnishing of the
report, no different consequence would have followed, it would be a perversion of justice to permit the employee to
resume duty and to get all the consequential benefits. It amounts to rewarding the dishonest and the guilty and thus to
stretching the concept of justice to illogical and exasperating limits. It amounts to an ‘unnatural expansion of natural
justice’ which in itself is antithetical to justice.

Evaluation of Ramzan Khan and ECIL Cases

As a general rule, the Supreme Court had always viewed employment relationship in the industrial realm on a footing
totally different from that of public service, in the light of the fact that the nature, objects and purpose of the two classes of
service differ widely. While the procedure for termination of contract of employment in respect of industrial employees is
prescribed by the ID Act read with the Industrial Employment (Standing Orders) Act 1946, that of public servants is laid
down under Art 311 of the Constitution. Even the remedies and relief in case of wrongful dismissal are different for the
public servants as compared to industrial employees. This distinction was clearly highlighted by the Supreme Court of
India through Hidayatullah J, in the Firestone, wherein the learned judge observed, ‘The tribunal equated the domestic
inquiry to enquiries under Art 311 of the Constitution which was hardly proper.’ (at p 718). Over years, this fundamental
distinction between industrial employment and public employment suffered gradual erosion.24 In Karunakar, a
Constitution Bench of the Supreme Court reviewed the law relating to dismissal for misconduct with special reference to
the three judge Bench decision rendered in Ramzan Khan.25 Article 311(2) as amended by the Forty-second Amendment
came in for detailed interpretation. A few extracts of the majority decision of the Supreme Court delivered by Sawant J, for
himself, Mohan, Jeevan Reddy JJ, and Venkatachaliah CJI, (Ramaswamy J dissenting) in Karunakar are reproduced
hereunder:

... Article 311 (2), however, underwent change with the Constitution (15th Amendment) Act of 1963. It explained and expanded
the scope of ‘reasonable opportunity’. For the original expression ‘until he has been given reasonable opportunity of showing cause
against the action proposed to be taken in regard to him’, the provision ‘except after an inquiry in which he has been informed of
the charges against him and given a reasonable opportunity of being heard in respect of those charges and were it is proposed after
such inquiry, to impose on him any such penalty, until he has been given reasonable opportunity of making representation on the
penalty proposed, but only on the basis of the evidence adduced during such inquiry’ was substituted...The Amendment also
provided for a second opportunity to the employee to show-cause against the penalty if it was proposed as a result of the inquiry.
The courts held that while exercising his second opportunity of showing cause against the penalty, against the findings on charges,
as well. What is necessary to note for our present purpose is that in spite of this change, the stage at which the employee was held
to be entitled to a copy of the report, was the stage at which the penalty was proposed, as was the case prior to the said
Amendment. (para 4) ...The provisions of clause (2) of Art 311 were further amended by the Constitution (42nd Amendment) Act
of 1976. It came into force from January 1, 1977. It expressly stated that ‘it shall not be necessary to give such person any
opportunity of making representation on the penalty proposed’. The words ‘such person’ of course meant the person who was to be
dismissed or removed or reduced in rank. In other words, the 42nd Amendment of the Constitution while retaining the expanded
scope of the reasonable opportunity at the first stage, viz, during the inquiry as introduced by the 15th Amendment of the
Constitution, did away with the opportunity of making representation against the penalty proposed after the inquiry. It is this
Amendment to Art 311 (2) which has given rise to the controversy as to whether when the inquiry officer is other than the
disciplinary authority, the employer is entitled to a copy of the findings recorded by him, before the disciplinary authority applies
its mind to the findings and the evidence recorded, or whether the employee is entitled to the copy of the findings of the inquiry
officer only at the second stage, as its conclusions and proposed the penalty. Upon answer to this question depends the answer to
the other questions flowing from it, viz, whether the employee was entitled to make representation against such finding before the
penalty was proposed even when Art 311 (2) stood as it was prior to the 15th Amendment of the Constitution.26 (para 5). (Italics
supplied).

Sawant J, cited the following passage from the decision rendered in Khem Chand, in respect of the three stages of a
departmental proceeding at which reasonable opportunity should be given under the original Art 311 (2) as follows:

(a) an opportunity to deny his guilt and establish his innocence, which he can only do if he is told what the charges levelled
against him are and the allegations on which such charges are based;

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(b) an opportunity to defend himself by cross-examining the witnesses produced against him and by examining himself or
any other witnesses in support of his defence; and, finally,
(c) an opportunity to make his representation as to why the proposed punishment should not be inflicted on him, which he
can only do if the competent authority, after the inquiry is over and after applying his mind to the gravity or otherwise of
the charges proved against the government servant, tentatively proposes to inflict one of the three punishments and
communicates the same to the government servant.27 (para 6).

Having cited the above passage, Sawant J proceeded to hold thus:

While the right to represent against the findings in the report is part of the reasonable opportunity available during the first stage of
the inquiry, viz, before the disciplinary authority takes into consideration the findings in the report, the right to show-cause against
the penalty proposed belongs to the second stage when the disciplinary authority has considered the findings in the report and has
come to the conclusion with regard to the guilt of the employee and proposed to award penalty on the basis of its conclusions. The
first right is the right to prove innocence. The second right is to plead for either no penalty or a lesser penalty although the
conclusion regarding the guilt is accepted. It is the second right, exercisable at the second stage, which was taken away by the 42nd
Amendment. (para 25)...Where the Inquiry Officer is other than the disciplinary authority, the disciplinary proceedings break into
two stages. The first stage ends when the disciplinary authority arrives at its conclusions on the basis of the evidence, inquiry
officer’s report and the delinquent employee’s reply to it. The second stage begins when the disciplinary authority decides to
impose penalty on the basis for its conclusions. If the disciplinary authority decides to drop the disciplinary proceedings, the
second stage is not even reached. The employee’s right to receive the report is thus, a part of the reasonable opportunity of
defending himself in the first stage of the inquiry. If this right is denied to him, he is in effect denied the right to defend himself and
to prove his innocence in the disciplinary proceedings. (para 27)

Admittedly, the Bench not only followed, rather blindly, the earlier decision rendered in Ramzan Khan,28 without applying
its mind to the glaring inconsistencies surfaced therein, but also proceeded to enlarge the scope of the said Article to
pastures which manifestly fall outside the pale of Art 311. The over-emphasis laid by the learned judges in Ramzan Khan
and ECIL on the scope and application of the principles of natural justice is clearly misconceived and wholly misplaced. It
is a settled proposition that the principles of natural justice do not supplant the law of the land, but only supplement it,29
and that they should be applied only in the unoccupied interstices of the statute unless there is a clear mandate to the
contrary.30 That being the settled position, to hold that the 42nd amendment did not take away the right of the employee to
receive a copy of the findings, is repugnant to all canons of statutory construction. The Article, as amended, stipulates: ‘it
shall not be necessary to give such person any opportunity of making representation on the penalty proposed’. For a
complete understanding of the extent of misconstruction placed on amended Art 311, it is necessary to deal with both the
cases in some detail. In Ramzan Khan, Misra CJI observed:

Deletion of the second opportunity from the scheme of Article 311(2) of the Constitution has nothing to do with providing of a
copy of the report to the delinquent in the matter of making his representation. Even though the second stage of the inquiry in
Article 311(2) has been abolished by amendment, the delinquent is still entitled to represent against the conclusion of Inquiry
Officer holding that the charges or some of the charges are established and holding the delinquent guilty of such charges. For doing
away with the effect of the enquiry report or to meet the recommendations of the Inquiry Officer in the matter of imposition of
punishment, furnishing a copy of the report becomes necessary and to have the proceeding completed by using some material
behind the back of the delinquent is a position not countenanced by the procedure. (at p 34)

On the issue ‘what would be position in a case where the disciplinary authority himself held the inquiry, and hence no
separate report was made out by him’, the learned Chief Justice held:

...where the disciplinary authority is the Inquiry Officer there is no report. He becomes the first assessing authority to consider the
evidence directly for finding out whether the delinquent is guilty and liable to be punished. Even otherwise, the inquiries which are
directly handled by the disciplinary authority and those which are allowed to be handled by the Inquiry Officer can easily be
classified into two separate groups... That itself would be a reasonable classification keeping away of the application of Article 14
of the Constitution. (at p 34).

The above observations of Misra CJI give rise to the following questions:

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(i) What was the legal effect sought to be achieved by the 42nd amendment by which the old phrase in the proviso, ie,
‘...until he has been given a reasonable opportunity of making representation on the penalty proposed ...’ was deleted
and substituted it with the phrase, ie, ‘...it shall not be necessary to give such a person any opportunity of making
representation on the penalty proposed’? Did they mean the same thing or different things?
(ii) If the said constitutional amendment was held to be valid-and obviously so, since the court had not struck it down-then,
what ostensible purpose would the furnishing of a copy of the inquiry report serve? Can the delinquent make a
representation either on the findings of the inquiry or on the penalty proposed?
(iii) What would be the position, if, for instance, the disciplinary authority chooses to merely send a communication to the
delinquent enclosing a copy of the inquiry report without disclosing the proposed punishment, in view of the fact that the
court in Ramzan Khan upheld the 42nd amendment and confined its ruling to mere furnishing of a copy of the inquiry
report, and nothing more? Would such a mechanical course pursued by the disciplinary authority, satisfy the
requirements prescribed in Ramzan Khan?
(iv) Going by the observations of Misra CJI, to the effect—‘where the disciplinary authority is the Inquiry Officer there is no
report. He becomes the first assessing authority to consider the evidence directly for finding out whether the delinquent
is guilty and liable to be punished (at p 34)’—what would be the position with regard to the right of delinquent to
receive a copy of the report vis-`a-vis principles of natural justice, given the fact that there is no report at all in a
situation where the disciplinary authority himself has conducted the inquiry?
(v) What quality of ‘reasonability’ can one look for in an invidious distinction drawn between an inquiry conducted by the
disciplinary authority himself on the one hand, and the one conducted by someone other than the disciplinary authority
on the other? How would it satisfy the requirement of ‘equality’ enshrined in Art 14, if two employees of the same
department dismissed in two different modes—one by an inquiry officer-cum-disciplinary authority, and the other by a
disciplinary authority who is not the inquiry officer—knock at the doors of the court for justice? How would the
dynamics of the ratio propounded in Ramzan Khan operate to ensure the constitutional mandate of equality before law,
in such an eventuality?
(vi) In the face of several authorities to the effect that the principles of natural justice do not supplant, but only supplement the
law of the land, and that they could be applied only in the unoccupied interstices of law, what place could ‘natural
justice’ possibly claim in the light of an express provision enshrined in Art. 311(2) ? Would the ratio of Ramzan Khan
supplement Art 311 (2) or supplant it?

Answers to the above questions are too obvious to need a detailed discussion, which unfold the defective approach of
Misra CJI. Once the right to ‘show cause’ is taken away, the supply of a copy, that too only, in cases where the enquiry
was held by a person other than the disciplinary authority, renders the whole exercise otiose and reduces it to an ‘empty
and useless formality’. To say the least, the over-subtle distinction drawn by the learned Chief Justice, between an enquiry
held by the disciplinary authority and the one held by someone else, is trite and obnoxious. If the intention of the
legislature were not to effect a fundamental change in Art 311(2) (as observed by him at p 34), then why should it go
through the complex process of amending the Constitution? It is wholly improper to presume that the Parliament was
indulging in a futile and unproductive exercise while amending the Constitution in substantial terms by which, the
requirement of issuing a show-cause notice was manifestly dispensed with. The line of reasoning adopted by Misra CJI, in
support of his conclusion that the ‘deletion of second opportunity from the scheme of Article 311(2) of the Constitution has
nothing to do with providing of a copy of the report to the delinquent in the matter of making his representation’ (at p 34)
is unsound, perverse and without susbtance. What was the ‘representation’ that the learned Chief Justice was referring to,
and against what? Is it against the proposed punishment!? Given the fact that the court limited its interpretation of the
amended Article to the extent of furnishing a copy of the findings, and nothing more, how can delinquent show cause, if
the employer merely supplies a copy of the report with a one-line covering letter, without disclosing the proposed
punishment? That was the degree of absurdity that the learned Chief Justice had invented and imported into the decision-
making process!

Turning to ECIL, the company, not being a statutory corporation, was not covered by the ratio of Sukhdev Singh,31
notwithstanding the fact that the decision in Sukhdev Singh itself was replete with half-tones and lack of any judicial
conviction on the part of Ray CJI and was wholly misconceived. Be that as it may, the facts of ECIL disclose that the
respondent was working as a Senior Technical Officer, which prima facie implies that he was not a ‘workman’ u/s. 2(s) of
IDA, and therefore the remedies provided under industrial law were not available to him. Secondly, assuming that he was a
‘workman’ for the sake of argument, whatever might be the view taken in Ramzan Khan, neither Art 311 nor the
consequences of the said ruling could apply to it, for the reason that industrial employment is governed by a separate set of
laws and regulations, which apply with as much vigour and force to industrial employees as do the Constitutional

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provisions to public servants. This implies that the employee was required to invoke the machinery provided in IDA only.
On the contrary, if the respondent fell outside the pale of the definition of ‘workman’, the only remedy available to him
was to file a suit in the civil court. Article 311 and IDA operate in different fields with different schemes and objects in
view, and address different classes of employees. To draw a foundational distinction between the two classes of
employment, if the workmen employed in an industry resort to strike, the employer can declare a lockout under s 24(3) of
the ID Act in retaliation. While the public servants can also resort to a strike, can the Government even conceive of a
‘lockout’, not to speak of declaring it as a retaliatory measure? Any attempt to mix up one with the other produces an
absurd result of rendering a particular set of laws nugatory and non est. In ECIL, Sawant J, went on to state:

...it is only appropriate that the law laid down in Mohd Ramzan Khan’s case (supra) should apply to employees in all
establishments whether Government or non-Government, public or private. This will be the case whether there are rules governing
the disciplinary proceeding or not and whether they expressly prohibit the furnishing of the copy of the report or are silent on the
subject. Whatever the nature of punishment, further, whenever the rules require an inquiry to be held, for inflicting the punishment
in question, the delinquent employee should have the benefit of the report of the Inquiry Officer before the disciplinary authority
records its findings on the charges levelled against him... (at p 178)

With great respect for the eminent judge, the exercise undertaken by him to extend Constitutional provisions meant for
public servants to industrial employees is misplaced, uncalled for and is clearly wrong. In the first place, the interpretation
placed on the amended Art 311(2) in Ramzan Khan is itself wholly misconceived, apart from disclosing an unnecessary
trend on the part of the judiciary to undermine the constituent power of the Parliament, not to speak of the legislative
power. Secondly, it is well settled that the principles of natural justice operate in areas not covered by law; and that they do
not supplant the law of the land, but only supplement it;32 that natural justice is not an unruly horse, no lurking landmine,
not a judicial cure-all;33 and that the principles of natural justice could only be applied in the unoccupied interstices of the
statute unless there is a clear mandate to the contrary.34 And, lastly, in the face of the above rulings coupled with an
unambiguous phrase in the proviso to Art 311(2) to the effect: ‘...it shall not be necessary to give such person any
opportunity of making representation on the penalty proposed’, to hold that the 42nd amendment did not take away the
right to receive a copy of the findings, militates against judicial decorum and decency, apart from constituting a patent
transgression of the legitimate boundaries within which the Apex Court is mandated to operate. It was time and again
pointed out by the Supreme Court in a series of decisions that industrial adjudication does not adopt a doctrinaire approach
while dealing with industrial matters and adopts a realistic and pragmatic approach;35 it is one thing to settle a dispute by
agreement, which affects only the interest of the parties to the agreement; it is quite a different thing to lay down a rule
which will have a wider application.36It is difficult to comprehend as to what the provocation was for the learned judge to
adopt a cast-iron approach in a matter that was sharply focused rather than broadly based and, in the second, for laying
down inflexible rules of universal application. With great deference, it is submitted that industrial law has its own set of
norms under IE(SO) Central Rules and ID Act, and provide for a different set of remedies and reliefs; and that Art 311 has
no application, whatsoever, to industrial employment. Both the decisions in Ramzan Khan and ECIL require review by a
larger Bench and the correct law has to be laid down consistent with settled legal principles.37

In SK Singh, though the copy of the inquiry report was not supplied to the employee, he was asked by the High Court as to
what prejudice he suffered on account of non-supply of the report to which he did not give any satisfactory reply. It was,
therefore, held that prejudice caused to the delinquent by non-supply of the inquiry report must be specified and the order
of punishment cannot be interfered with merely for non-supply of copy of inquiry report if no prejudice is caused due to
such non-supply. Having stated the law, the court provided procedural guidelines to the tribunals and the courts. In all
cases, where the inquiry officer’s report is not furnished to the delinquent employee in the disciplinary proceedings, the
tribunals or courts should cause the copy of the report to be furnished to him if he has not already secured it before coming
to the tribunal or the court and then, the opportunity should be given to him to show how his case was prejudiced for non-
supply of the report. If, after hearing the parties, the tribunal or the court comes to the conclusion that the non-supply of the
report would have made no difference to the ultimate findings and the punishment given, it should not interfere with the
order of punishment and mechanically set aside the order of punishment merely because the report was not furnished to the
employee. The tribunal or the court must apply their judicial mind to the question of quashing or upholding the order of
punishment and state the reasons for its conclusion. If the court takes the view that furnishing of the report would have
made a difference to the result in the case, then only should it set aside the order of punishment. The proper relief in such a
case should be the direct reinstatement of the employee with liberty to the employer to proceed with the inquiry by placing
the employee under suspension and continuing the inquiry from the stage of furnishing him with the report.38 In VB
Hiregowdar, a two-judge bench of the court reiterated the holding of the Constitution Bench in ECIL cases that the
decision in Ramzan Khan’s case is of prospective application. In this case, the order of the disciplinary authority punishing
the delinquent was passed on 10 April 1990 much before the judgment in Ramzan Khan’s case. The law laid down in
Ramzan Khan’s case, therefore, had no application in this case.39 In Ram Kishan, the Supreme Court observed:

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The purpose of the show-cause notice, in case of disagreement with the findings of the inquiry officer, is to enable the delinquent
to show that the disciplinary authority is persuaded not to disagree with the conclusions reached by the inquiry officer for the
reasons given in the inquiry report or he may offer additional reasons in support of the findings by the inquiry officer. In that
situation, unless the disciplinary authority gives specific reasons in the show-cause notice on the basis of which the findings of the
inquiry officer in that behalf is based, it would be difficult for the delinquent to satisfactorily give reasons to persuade the
disciplinary authority to agree with the conclusions reached by the inquiry officer. In the absence of any ground or reason in the
show-cause notice it amounts to an empty formality which would cause grave prejudice to the delinquent officer and would result
in injustice to him. The mere fact that in the final order some reasons have been given to disagree with the conclusions reached by
the disciplinary authority cannot cure the defect. 40

In PM Raju, a single judge of the Madras High Court held that second show-cause notice was not necessary if there is no
such provision in the standing orders.41 Where the High Court ordered reinstatement of an employee, who was dismissed
for securing employment on the basis of a forged certificate on the ground of non-furnishing of inquiry report before
passing of the final order, the Supreme Court quashed the order of High Court and restored the punishment and held that
the non-furnishing of inquiry report did not prejudice the workman in any way.42 Failure to supply a copy of inquiry report
to the delinquent does not by itself render the dismissal invalid. The labour court / tribunal should not mechanically set
aside the order of punishment on that sole ground. It should be pleaded and shown by the delinquent as to how the non-
supply of the report has prejudiced his case.43 In NTC (WBAB & O) Ltd., Dharmadhikari J (for self and Pasayat J) of the
Supreme Court held:

We fail to appreciate the reasoning of the High Court in the instant case that in addition to the procedural infirmity of non-supply
of enquiry report, there being non-compliance of clause 14 (4) (c) of Standing Order requiring grant of opportunity of hearing
against proposed penalty, the employee has to be granted relief of reinstatement with full back wages and the employer can be
given liberty to hold a de novo enquiry. (para 9).. . As stated by the High Court, we do not find that the language of clause 14(4)(c)
is mandatory. In any case, non-compliance thereof cannot be held to be a more vitiating factor than non-supply of enquiry report. If
the Constitution Bench of this Court in cases of non-supply of enquiry report directs the procedure to be adopted by allowing the
employer to re-start the enquiry from the stage of supply of enquiry report without reinstating the employee, why such a course
should not be directed to be adopted where the other grievance of the employee is denial of opportunity to show cause against
proposed penalty. When the Court can direct a fresh enquiry from the stage of supply of enquiry report the next step in the enquiry
of giving opportunity against the proposed penalty can also be directed to be taken. After the fresh enquiry is over from the stage of
supply of enquiry report, the employee can be granted opportunity against proposed penalty in terms of clause 14(4)(c) of the
Model Standing Order Rules. Consequential order, if any passed, shall abide the final result of the proceedings. As held in the case
of B. Karunakar and Ors. (supra), if the employee is cleared of the charges and is reinstated, the disciplinary authority would be at
liberty to decide according to law how it will treat the period from the date of dismissal till the period of reinstatement and the
consequential benefits.44 (para 10)

In Plantation Division, the issue was whether the non-supply of the copy of the findings of the Enquiry Officer constituted
a violation of the principles of natural justice. Turning to facts, this was not a case falling within the ambit of Art 309 and
the employees engaged in the Plantation Division were not public servants. Rejecting the contention that there was
violation of the principles of natural justice on that count, Sinha J (for self and Hegde J) of the Supreme Court observed:

In law, the concerned workmen do not enjoy any status as they are not the employees of Union of India and furthermore, their
conditions of service, were not governed by any rule made under Article 309 of the Constitution. Services of the workmen were
also not protected under Article 311 thereof. It has been contended before us that in terms of the extant rules governing the
conditions of service of the workmen, a departmental appeal was maintainable against an order of the Disciplinary Authority.
Presumably, such a remedy was provided with a view to enable the workmen to prefer an effective departmental appeal and only in
that view of the matter, a copy of the enquiry report was supplied by the Appellant along with the order of the dismissal. (para 15).
.. The workmen evidently did not avail the benefit of filing any departmental appeal. In such an appeal they could have shown as to
how and in what manner and to what extent they were prejudiced by non-supply of a copy of the enquiry report. Had the workmen
filed such an appeal, they could have furthermore demonstrated before the Appellate Authority that in terms of the rules and
regulations governing their conditions of service, they were, as a matter of right, entitled to a copy of the enquiry report before an
order of punishment is imposed upon them. (para 16). .. The principles of natural justice cannot be put in a strait-jacket formula. It
must be viewed with flexibility. In a given case, where a deviation takes place as regard compliance of the principles of natural
justice, the Court may insist upon proof of prejudice before setting aside the order impugned before it.45 (para 17)

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The above decision is a master-piece in so far as it places the legal position in proper perspective. This judicial correction
was long overdue in the wake of the legal confusion created by the expansive approach of Sawant J in Karunakar, not to
speak of the bankrupt decision rendered by RN Mishra CJI in Ramzan Khan, both which had contributed their own share
to the judicial mess and ruled the roost for more than two decades. As rightly pointed out by Sinha J, the second show-
cause notice coupled with the supply of a copy of the enquiry report serves two purposes, i.e., first, to point out whether
the report was in order or whether it is baseless or perverse; and, second, whether the punishment proposed by the
disciplinary authority is disproportionate. The delinquent employee can, on receipt of the show-cause notice along with the
enquiry report, organise his defence before making an appeal to the appellate authority. But that facility of an internal
appellate authority is expressly provided in the Fundamental and Supplementary Rules and/or Classification, Control and
Appeal Rules, applicable to government employees governed by Arts 309 - 311 of the Constitution. Even a few public
sector undertakings and public sector banks have a similar provision for internal appeal, before the employee can raise a
dispute. But, as a general rule, neither the Model Standing Orders nor the Certified Standing Orders applicable to industrial
undertakings, in general, and those in private sector, in particular, contemplate an appeal to an internal authority. The
second most important point of difference is that, in the case of a public servant, even “reduction in grade”, i.e., reversion,
is attracted by Art 311, whereas under the industrial law, the labour court or tribunal has no jurisdiction to entertain a
dispute relating to any punishment short of dismissal. For example, s 11A clearly stipulates in terms “in the event of
discharge or dismissal” and is silent on other punishments such as stoppage of increment, reversion to the next lower
grade, etc. Viewed thus, Sawant J proceeded in a cavalier fashion in Karunakar and extended the scope of Art 311 so as to
bring industrial undertakings, which are governed by the Standing Orders Act, into the fold of Art 311, though indirectly.
Justice Sinha deserves full compliments for putting the record straight and clarifying the differential legal position as
applicable to public servants versus industrial workmen.

In Haryana SFC, the issue of the non-supply of the report of the Enquiry Officer and its consequences had once again
come up for the consideration of Supreme Court in the context of the Constitution Bench decision rendered in ECIL v B
Karunakar (supra). Citing the observation made in that case to the effect that “Whether in fact, prejudice has been caused
to the employee or not on account of the denial to him of the report, has to be considered on the facts and circumstances of
each case”, Thakkar J (for self and Jain J) of the Supreme Court, cited several cases - Indian and foreign - and observed:

It is settled law that principles of natural justice have to be complied with. One of the principles of natural justice is audi alteram
partem (“Hear the other side”). But it is equally well settled that the concept `natural justice’ is not a fixed one. It has meant many
things to many writers, lawyers, jurists and systems of law. It has many colours, shades, shapes and forms. Rules of natural justice
are not embodied rules and they cannot be imprisoned within the strait-jacket of a rigid formula.. .. it is clear that though supply of
report of Inquiry Officer is part and parcel of natural justice and must be furnished to the delinquent- employee, failure to do so
would not automatically result in quashing or setting aside of the order or the order being declared null and void. For that, the
delinquent employee has to show `prejudice’. Unless he is able to show that non-supply of report of the Inquiry Officer has
resulted in prejudice or miscarriage of justice, an order of punishment cannot be held to be vitiated. And whether prejudice had
been caused to the delinquent- employee depends upon the facts and circumstances of each case and no rule of universal
application can be laid down.46 (Paras 25 & 47)

In Ganga Yamuna Grameen Bank, it was held that the issuance of a second show-cause notice to the delinquent workman,
before imposing the punishment, is not part of common law principles of natural justice. Such a provision could be laid
down by reason of a statute.47 In Sarva UP Gramin Bank, the facts briefly were: The employee was charge-sheeted for
fraud, misappropriation and irregularities in maintaining the records, etc., and after enquiry followed by a personal hearing
by the Chairman of the bank, imposed the punishment of reduction of his salary in six stages permanently. The employee
challenged the action on the ground, inter alia, that the Bank committed a violation of the principles of natural justice in so
far as he was not given the copy of the findings of the enquiry officer, which was upheld by the High Court. Quashing the
order of the High Court, SS Nijjar J (for self and Sudershan Reddy J) of the Supreme Court cited the above passage from
Haryana State Financial Corporation, and observed:

We have examined the factual situation in this case elaborately to see as to whether any prejudice has been caused to the
respondent. We are unable to accept the submissions of the learned counsel for the respondent that any prejudice has been actually
caused. We are of the considered opinion that there has been no failure of justice in the facts and circumstances of this case by non-
supply of the enquiry report to the respondent.48

Punishment and/or Final Disposal of the Case

Imposing punishment is the last stage in the disciplinary action proceedings against a delinquent workman. This stage

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commences after the disciplinary authority has received the report of the inquiry officer, issued a show-cause notice to the
delinquent workman, if any, and has received his response to such notice. Upon considering the gravity of the misconduct
and the extenuating circumstances, if any, and also any other factor that may be relevant in the facts and circumstances of
the case, the disciplinary authority has to decide the quantum of punishment that may be imposed on the delinquent.

(i) Types of Punishment

Broadly, in the area of industrial law, the punishments which an employer can impose, as a measure of a disciplinary
action for an act of misconduct, on a workman are:

(a) Warning
(b) Fine
(c) Stoppage of or Withholding increment
(d) Demotion
(e) Suspension
(f) Discharge
(g) Dismissal from service

(a) Warning

Warning is a minor punishment which is administered to a workman in writing by the employer for some blameworthy act
or omission. Though not identical, warning is analogous to ‘censure’ as administered to civil servants.49Since warning is a
punishment, it is to be administered to a workman after giving him an opportunity to explain the act or omission alleged
against him and after considering his explanation. However, as this punishment is of a minor nature, the procedure to be
adopted for administering a warning need not be as elaborate as in the case of major punishments of ‘discharge’ and
‘dismissal’. Though the penalty of warning does not materially affect the concerned workman, it can be a material factor to
be taken into consideration in future disciplinary action against him. The past record or the previous punishment suffered
by the delinquent employee though would be irrelevant and ought not to be used for finding him guilty of the charges
levelled against him.50 Yet it may be taken into consideration for deciding the quantum of punishment to be inflicted upon
him.51 If, however, the past record of a delinquent workman is to be taken into consideration, he would be entitled to offer
his explanation concerning it.52

(b) Fine

Fine is a pecuniary punishment that may be inflicted by the employer against the workman for some blameworthy act or
omission. The Standing Orders of some establishments provide for the imposition of fines in case of certain acts of
misconduct. This power under the Standing Orders, however, is subject to s 8 of the Payment of Wages Act 1936 which
reads:

(1) No fines shall be imposed on any employed person save in respect of such acts and omissions on his part as the
employer, with the previous approval of the appropriate government or of the prescribed authority, may have
specified by notice under sub-section (2).
(2) A notice specifying such acts and omissions shall be exhibited in the prescribed manner on the premises in which
the employment is carried on or in the case of persons employed upon a railway (otherwise than a factory), at the
prescribed place or places.
(3) No fine shall be imposed on any employed person until he has been given an opportunity of showing cause
against the fine, or otherwise than in accordance with such procedure as may be prescribed for imposition of
fines.
(4) The total amount of fine which may be imposed in anyone wage-period on any employed person shall not exceed
an amount equal to three per cent. of the wages payable to him.in respect of that wage-period.
(5) No fine shall be imposed on any employed person who is under the age of fifteen years.
(6) No fine imposed on any employed person shall be recovered from him by instalments or after the expiry of ninety
days from the day on which it was imposed.

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(7) Every fine shall be deemed to have been imposed on the day of the act or omission in respect of which it was
imposed.
(8) All fines and all realizations thereof shall be recorded in the register to be kept by the person responsible for the
payment of wages under section 3 in such form as may be prescribed; and all such realizations shall be applied
only to such purposes beneficial to the persons employed in the factory or establishment as are approved by the
prescribed authority.

Explanation—When the persons employed upon or in any railway, factory or industrial or other establishment are part
only of a staff employed under the same management, all such realizations may be credited to a common fund maintained
for the staff as a whole, provided that the fund shall be applied only to such purposes as are approved by the prescribed
authority.

(c) Stoppage of, or Withholding, Increments

In case of graded scales, increments are automatic till the efficiency bar or the maximum of a scale is reached. Withholding
increments in such a case is a punishment.53 This punishment materially affects the workman concerned in his earning.
Hence, this punishment can be inflicted only for proved inefficiency or acts of misconduct, such as insubordination or
habitual negligence etc. after giving him a fair opportunity to explain his conduct. In State Bank of India, the Madras High
Court held that in terms of the Shastra and Desai awards increment is earned by an employee as a matter of course. The
punishment of stopping increment can only be inflicted after the workman has been found guilty of the act of misconduct
alleged against him. Unless a workman is found guilty he cannot be said to be guilty of proved misconduct. Therefore, the
increment can be stopped only when it falls due after the workman has been found guilty in a proper departmental
inquiry.54

(d) Reversion / Demotion

Reversion or Demotion is the negative of promotion whereby not only the delinquent employee is not promoted to the next
job, but he is also downgraded from the present job and is reduced to a lower cadre of service. This punishment is
somewhat analogous to ‘reduction in rank’ as envisaged by Art 311 of the Constitution. It is severer in degree than the
foregoing punishments. This punishment may be inflicted in accordance with the degree of gravity of the misconduct
proved against the delinquent workman. The procedure to be followed for administering this punishment is the same as in
the case of ‘discharge’ and ‘dismissal’. In RN Kulkarni, the facts were: the employer terminated the services of an
employee from the date of the order, but having regard to his prior career gave him an option of serving as a mechanic in
the garage department on the same salary, provided he exercised the option by a particular date. The employee did not
resume his duties. The labour court held that the order of termination, in fact, amounted to an order of demotion and not an
order of discharge. The labour court ordered further inquiry into the question as to whether the order was mala fide. In the
proceedings in a writ petition challenging the award of the labour court on the ground that the order was not an order of
demotion as found by the labour court, the High Court observed that no doubt the impugned order contained an option that
if the workman so desired he could be reappointed as a mechanic in the garage department provided the option was
exercised by the specified date and if the option, in fact, had been exercised by the workman and had become effective, it
could have been possible to argue that, from a practical point of view, it amounted to an order of demotion, but it was clear
from the record that the workman did not report for accepting the re-appointment. It was, therefore, held that the actual
effect of the order was that the services of the workman had been ended either because he did not avail himself of the
option or he went after the appointed date and time and was not allowed to avail of the option. Hence, the order was not an
order of demotion but was of the actual termination of service. Reverting an employee on probation to his original post, for
unsatisfactory work will not constitute demotion because keeping an employee on probation is only to find out whether he
is suitable for the post or not.55 It is submitted that this case was rightly decided.

(e) Suspension

Suspension in industrial law is ordinarily of two kinds, via, (a) suspension as an interim measure pending a domestic
inquiry; and (b) suspension as a substantive punishment. Suspension ‘pending inquiry’ has already been discussed under
the head ‘procedure of disciplinary action’. Suspension ‘as a punishment’ can be inflicted on a workman for a specified
period as permissible under the contract of service or the Standing Orders after finding him guilty of the misconduct
committed by him. Suspension by way of punishment under the relevant Standing Order would not alter the character of
suspension as a temporary action as distinct from the permanent measure of termination of employment.56The punishment
of suspension would not tantamount to lockout as defined in s 2(1) of the Act. The effect of the punishment of suspension
is that the relationship of the master and servant is temporarily suspended with the consequence that the servant is not
bound to render service and the master is not bound to pay.57In other words, the workman will not be entitled to wages for
the period of suspension. The Madras High Court held that suspension amounts to non-employment of a worker and in

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relation to such non-employment when alleged to be devoid of valid reasons, an industrial dispute can be raised. However,
before a dispute can be raised, it should not have remained an individual dispute; it should have acquired the character of
an industrial dispute by being sponsored by a sufficient number of workmen, as suspension not being ‘discharge, dismissal,
retrenchment or otherwise termination of service’ of the employee, would not fall within the purview of s 2A of Industrial
Disputes Act.58

Retrospective suspension:

In the language of Chakravarti CJ of the Calcutta High Court, ‘there can be no meaning in suspending a man from working
during a period when the period has passed and he has already worked, or suspending a man from occupying a position or
holding a privilege in the past when he has already occupied or held it’.59 Nevertheless, where an order of suspension can
be split into two periods of time, one retrospective and the other prospective, and the retrospective part can be severed
from the prospective part, though the retrospective part would be invalid, the prospective part would be perfectly valid and
shall operate upon its own strength.60 The question, however, has to be decided on the facts of each case. Suspension, like
the other punishments, i.e., dismissal or discharge from service with retrospective effect has always been condemned by
courts as illegal and invalid.61

(f) Discharge

The punishments discussed earlier are inflicted as punishment for an act of misconduct while the workman continues in the
employment of the employer. These punishments are generally known as ‘minor punishments’ in the parlance of industrial
law. ‘Discharge’ and ‘dismissal’ of a workman from service as punishment are known as ‘major punishments’. In these
punishments, the contract of employment is determined and the employer-employee relationship ceases to exist. Discharge
as punishment is milder than the extreme punishment of dismissal though like dismissal, it also puts the contract of service
to an end. In case of dismissal, the employee loses a number of benefits whereas in case of discharge only the contract of
service is terminated from a particular date and the employee is not deprived of the benefits accruing to him up to that
date.62 The expressions ‘dismissal’ and ‘discharge’ as measures of punishment for misconduct, in industrial law have
acquired different connotations and one cannot be equated the one with the other,63 though to a certain extent they overlap.
(For further discussion see next topic (“Dismissal”)

(g) Dismissal

The dictionary meaning of the word ‘dismissal’ is ‘to let go; to relieve from duty’. In ordinary parlance, it means nothing
more or less than termination of a person’s office. Dismissal is the ultimate and most drastic disciplinary sanction which
may be inflicted by an employer for an act of misconduct against an industrial workman. Hence, if there is no misconduct,
there can be no punishment. Termination of service therefore, which is not by way of punishment would not tantamount to
dismissal. In the words of Gajendragadkar J:

Punishment is, therefore, correlated to misconduct, both in its positive and negative aspects. That is to say, punishment could be
sustained if there was misconduct and could not be meted out if there was no misconduct.64

In London Chronicle, the facts disclosed that the employee obeyed her immediate departmental head instead of the
managing director of the company. In view of the fact that there were conflicting orders, only one of which could be
obeyed, the disobedience of the managing director’s order in the circumstance of the case was held to be excusable and the
dismissal of the employee was held to be unjustified.65 The breach of an important term now-a-days will not, however,
necessarily justify the action of dismissal if it occurs in such circumstances that the employee has a reasonable excuse or
justification for his conduct. However, the breach of certain terms prima facie will justify the order of dismissal, eg, the
obligation not to steal one’s employer’s property; the obligation not to deal with his property dishonestly; not to damage
the property or the reputation of the employer deliberately; the obligation to obey reasonable and lawful orders etc but
single and isolated acts of misconduct are somewhat less likely to justify dismissal of a workman than is a persistent
pattern of misconduct.66In case of single or isolated act of misconduct a record of unsatisfactory behaviour may tip the
balance justifying the dismissal,67 but what is to be regarded as an important term will depend upon the nature of the
business or nature and the position of the workman,68 and the test to be applied, therefore, must vary with the nature of the
business and the position held by the employee. Misconduct inside the premises of the establishment is likely to give rise
to breach of an obligation entitling the employer to dismiss the workman than the misconduct outside the work-place or
outside working hours; but dependent on the terms of the contract and sometimes on the position of the employee,
misconduct outside the work-place or working hours may exceptionally justify the action of dismissal.69

Likewise, though a private quarrel between an employee and a stranger may not constitute a misconduct justifying the
dismissal, it cannot be reasonably disputed that acts which are subversive of discipline amongst employees or misconduct

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or misbehaviour by an employee which is directed against another employee of the concern may, in certain circumstances,
constitute misconduct so as to form the basis of an order of dismissal or discharge. It is not necessary that the victim
employee and the delinquent workman should be engaged in the performance of their official duties when the act which is
the subject matter of misconduct is stated to have been committed. It is sufficient that both are employees of the same
concern and the misconduct is directed against the former while he is acting in the discharge of the duties imposed on him
by virtue of his office.70The question whether an act of misconduct is sufficient to justify dismissal is not dependent upon
the proof that such misconduct has in fact serious consequences; the test is the nature of the misconduct itself.71 In deciding
whether in a particular case, an act of misconduct is serious enough to justify dismissal, the matter needs to be examined in
the light of all the surrounding circumstances.72 The tribunal has to consider whether in the background of the
circumstances that transpired, the misconduct committed by the concerned workman is so grave as to justify extreme
penalty of discharge or dismissal if imposed on him.73 It is usually only possible to guess the answer to the question, ‘Does
the misconduct in this case, justify dismissal?’ The more serious the misconduct, the more likely it is that an adjudicator
will regard it as justifying dismissal, the more trivial the misconduct, the less likely is an adjudicator to uphold the right of
dismissal.74

The employer has a right recognised in law to dismiss his servant for an act of misconduct committed by him but he is not
bound to dismiss him. That right to dismiss is recognised in law in order to protect the interests of the master. The master
himself is the best judge of the circumstances under which he may choose or elect to exercise or refrain from exercising
that power or right of dismissal. He can waive that right after condoning the misconduct but he cannot exercise that right
after condoning the misconduct. The choice, election, condonation as well as the waiver may either be express or implied,
depending upon the particular circumstances of each case but they must be unequivocal, unqualified and unconditional to
be effective, operative and valid.75 The mere acceptance of terminal benefits such as provident fund and gratuity cannot be
considered as acquiescence on the part of a dismissed workman.76 It is well settled that there can be no dismissal or
discharge made with retrospective effect.77 Such dismissal cannot be sustained in law, but this principle is subject to the
condition that if such a dismissal be made according to the terms of service, either contractual or statutory; for instance,
contained in the Standing Orders, such a dismissal is within the competence of the employer. Where the Standing Orders
of a company provide that a workman found guilty of misconduct might be dismissed with effect from the date of
suspension, an order of dismissal so made must be held to be valid.78 However, whether the retrospective dismissal is
justified or not would depend upon the peculiar circumstances of a case.79 The Gujarat High Court in RM Parmar, has laid
down the following guidelines in the matter of inflicting punishment particularly the punishment of discharge and
dismissal:

1. In a disciplinary proceeding for an alleged fault of an employee, punishment is imposed not in order to seek retribution or
to give vent to feelings of wrath.
2. The main purpose of a punishment is to correct the fault of the employee concerned by making him more alert in the
future and to hold out of warning to the other employees to be careful in the discharge of their duties so that they do not
expose themselves to similar punishment. And the approach to be made is the approach parents make towards an erring
or misguided child.
3. It is not expedient in the interest of the administration to visit every employee against whom a fault is established with the
penalty of dismissal and to get rid of him. It would be counter-productive to do so for it would be futile to expect to
recruit employees who are so perfect that they would never commit any fault.
4. In order not to attract the charge of arbitrariness it has to be ensured that the penalty imposed is commensurate with the
magnitude of the fault. Surely one cannot rationally or justly impose the same penalty for giving a slap as one would
impose for homicide.
5. When different categories of penalties can be imposed in respect of the alleged fault, one of which is dismissal from
service, the disciplinary authority perforce is required to consult himself for selecting the most appropriate penalty from
out of the range of penalties available that can be imposed, having regard to the nature, content and gravity of the
default. Unless the disciplinary authority reaches the conclusion that having regard to the nature, content and magnitude
of the fault committed by the employee concerned, it would be absolutely unsafe to retain him in service, the maximum
penalty of dismissal cannot be imposed. If a lesser penalty can be imposed without seriously jeopardising the interest of
the employer the disciplinary authority cannot impose the maximum penalty of dismissal from service. He is bound to
ask the inner voice and rational faculty why a lesser penalty cannot be imposed.
6. It cannot be overlooked that by and large it is because the maximum penalty is imposed and total ruination stares one in
the eyes that the employee concerned is obliged to approach the court and avail of the costly and time-consuming
machinery to challenge in desperation the order passed by the disciplinary authority. If a lesser penalty was imposed, he

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might not have been obliged to take recourse to costly legal proceedings which result in loss of public time and also
result in considerable hardship and misery to the employee concerned.
7. When the disciplinary proceedings end in favour of the employee the employer has often to pay backwages say for about
five years without being able to take work from the employee concerned. On the other hand, the employee concerned
would have had to suffer economic misery and mental torture for all these years. Even the misery of being obliged to
remain idle without work would constitute an unbearable burden. And when the curtain drops everyone is left with a
bitter taste in the mouth. All because the extreme penalty of dismissal or removal is imposed instead of a lighter one.
8. Every harsh order or removal from service creates bitterness and arouses feeling of antagonism in the collective mind of
the workers and gives rise to a feeling of class conflict. It does more harm than good to the employer as also to the
society.
9. Taking of a petty article by a worker in a moment of weakness when he yields to a temptation does not call for an
extreme penalty of dismissal from service. More particularly, when he does not hold a sensitive post of trust (pilferage
by a cashier or by a store-keeper from the stores in his charge, for instance, may be viewed with seriousness). A worker
brought up and living in an atmosphere of poverty and want when faced with temptation, ought not to, but may, yield to
it in a moment of weakness. It cannot be approved, but it can certainly be understood particularly in an age when even
the rich commit economic offences to get richer and do so by and large with impunity (and even tax evasion or
possession of black money is not considered to be dishonourable by and large). A penalty of removal from service is
therefore not called for when a poor worker yields to a momentary temptation and commits an offence which often
passes under the name of kleptomania when committed by the rich.80

Later, in Jamnadas Becharbhai, the High Court has referred to the rider added by it in proposition no 9 to the effect that
when an employee holding a sensitive post of trust has been dismissed from service, the matter may have to be viewed in a
different light, for instance, pilferage by a cashier or a store-keeper from the stores in his charge. But the rider is not to be
found in the report of the case. In this case, the court sought to elaborate that rider by adding a case of misappropriation by
a bus conductor who has collected fare from passengers but has failed to issue tickets to them. In such a situation the
adjudicator can direct that the offender should be absorbed in some other post which does not involve daily handling of
money etc depending upon the facts and circumstances of the case. The adjudicator can exercise his jurisdiction in
deciding the issue having regard to the facts and circumstances of each case and the demands of the situation in the context
of each matter. In the facts and circumstances of this case, the court held that the reinstatement of the bus conductor who
had collected fare from the passengers and pocketed the same, was not justified by the labour court to order the
reinstatement of the workman and, remanded the case to the labour court for a fresh decision.81 Another Division Bench of
the same High Court in Hussainmiya Chandmiya, observed that in cases of gross misconduct, the most appropriate
punishment would be termination of service and it would be a mockery of justice to brand such an order as not justified
and substitute it by an order under s 11A. In this case, the workman who was a watchman working in the municipal
corporation was convicted under s 420 of the Indian Penal Code for having swindled a substantial amount aggregating to
about Rs 25,000 from poor and innocent citizens by duping them on the pretext that by virtue of his employment, he was in
a position to secure for them residential accommodation belonging to the corporation at a subsidised rent. After his
conviction, he was dismissed from service as a measure of disciplinary action. The court held that in this fact situation the
order could not be said to be ‘unjustified’ and the order of the labour court reinstating him was set aside being arbitrary and
whimsical.82

In T Seeralan, a store attender in the canteen of the employer company, who had put in 17 years of unblemished service,
was dismissed from service for the proved misconduct of theft of canteen coupons of the value of Rs. 24.48/-. The
labourcourt modified the punishment of dismissal to termination of service and further directed the management to pay one
month’s salary to the workman. In a writ petition against the award of the tribunal, a single judge of the Madras High
Court held that the plea for reinstatement of the workman was untenable and the punishment imposed was on the
concessional side because instead of prosecuting the workman under the Indian Penal Code, the company contented itself
only by taking disciplinary action by holding a domestic inquiry against him. In this situation, the court felt that there was
little scope for generosity to be shown, or to bring into existence minor punishment for such derelictions. The learned
judge observed that for the misconduct which is a penal offence, it would be against the interest of the other workmen and
industrial development, if adequate punishment is not imposed when the offence is established. Furthermore, there is very
little scope for any generosity to be shown or to bring into existence minor punishments for such derelictions. Committing
theft had been considered as penal offence in the interest of society to maintain law and order in the country and to strike
out standards, when they occur in industries, would be detrimental to the interests of the nation, if a different approach is
made mainly because he is a workman under ID Act.83

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61 Powari Tea Estate vMK Barkataki (1965) 2 LLJ 102 [LNIND 1964 SC 299] (SC), per Gajendragadkar J.
62 Rohtas Industries Ltd v Ali Hasan (1963) 1 LLJ 253 [LNIND 1962 SC 266] (SC), per Gajendragadkar J.
63 Anil Kumar v Presiding Officer, LC, Punjab (1986) 1 LLJ 101 [LNIND 1985 SC 191]-02 (SC), per Desai J.
64 Khardah & Co Ltd v Workmen (1963) 2 LLJ 452 [LNIND 1963 SC 138], 457 (SC), per Gajendragadkar J.
65 Central Bank of India v Karunamoy Banerjee (1967) 2 LLJ 739 [LNIND 1967 SC 235], 744 (SC), per Vaidialingam J.
66 Biosahabi Tea Estate v PO, LC, 1981 Lab IC 557, 566 (Gau) (DB), per Lahiri J.
67 Andhra Handloom WCS Ltd v LC 1976 Lab IC 932, 934 (AP), per Venkatarama Sastry J.
68 State Bank of Bikaner & Jaipur v JS Khadgawat 1987 Lab IC 112, 116-17 (Raj) (DB), per Lodha J.
69 Madikal Service Co-op Bank Ltd v LC (1988) 2 LLJ 49, 53 (Ker), per Bhat J.
70 Mangal Sen v State of Uttar Pradesh, (1992) 1 LLJ 179, 181 (All), per BN Misra J.
71 Sasa Musa Sugar Works Pvt Ltd v Shobrati Khan (1959) 2 LLJ 388 [LNIND 1959 SC 79], 393 (SC) : AIR 1959 SC 923 [LNIND
1959 SC 79], per Wanchoo J.
72 Workmen of Motipur Sugar Factory v Mgmt (1965) 2 LLJ 162 [LNIND 1965 SC 109] (SC) : AIR 1965 SC 1803 [LNIND 1965 SC
109]. per Wanchoo J.
73 State Bank of India v RK Jain (1971) 2 LLJ 599 [LNIND 1971 SC 481]. 613 (SC) : AIR 1972 SC 136 [LNIND 1971 SC 481]:
1972 Lab IC 13 [LNIND 1971 SC 481] : (1972) 4 SCC 304 [LNIND 1971 SC 481], per Vaidialingam J.
74 Delhi Cloth & General Mills Co Ltd v Ludh Budh Singh (1972) 1 LLJ 180 [LNIND 1972 SC 17], 194-96 (SC), per Vaidialingam J.
75 Workmen of Firestone TRCI Ltd v Mgmt (1973) 1 LLJ 278 [LNIND 1972 SC 133] (SC) : AIR 1973 SC 1227 [LNIND 1973 SC
430]: [1973] (26) FLR 359 : (1973) 1 SCC 813 [LNIND 1973 SC 430] per Vaidialingam J.
76 Makhan Singh v Narainpura CASS Ltd 1987 Lab IC 1631 [LNIND 1987 SC 497] (SC), per Venkatramiah J.
77 R Khichrolia v MPSCM Federation Ltd (2002) 4 LLN 705 (MP), per Mishra J.
78 Bharath Electronics Ltd v K Kasi (1987) 2 LLJ 203 (Kant), per Rarna Jois J.
79 Capstan Meters (India) Ltd v Judge, LC (1991) 2 LLJ 290 (Raj), per Sharma J.
80 Central Bank of India v C Bernard [1991] 78 FJR (BC), per Ahmadi J.
81 Associated Cement Co Ltd v Workmen (1963) 2 LLJ 396 [LNIND 1963 SC 151], 399 (SC), per Gajendragadkar J.
82 Meenglas Tea Estate v Workmen (1963) 2 LLJ 392 [LNIND 1963 SC 50] (SC), per Hidayatullah J.
83 DJ Warkari v KV Karanjkar (1980) 2 LLJ 270 (Bom) (DB), per Chandurkar J.
84 Philips India Ltd v Fifth IT 1978 Lab IC (NOC) 115 (Cal) (DB).
85 Manak Lal v Prem Chand AIR 1957 SC 425 [LNIND 1957 SC 154], per Gajendragadkar J.
86 Workmen of Madura Co Ltd v LC (1966) 1 LLJ 498 (Ker), per KK Mathew J.
87 PH Kalyani v Air France (1963) 1 LLJ 679 [LNIND 1963 SC 45] (SC) : AIR 1963 SC 1756 [LNIND 1963 SC 45], per Wanchoo
J.
88 Golam Rasul v Public Service Commission (1963) 2 LLJ 174, 176 (Cal), per BN Banerjee J.
89 Superintendent, Kaliyar Estate v O Kuriakko (1971) 1 LLJ 83, 85 (Ker), per Issac J.
90 Workman of Madura Co Ltd v LC (1966) 1 LLJ 498, 501 (Ker), per Mathew J.
91 Ram Bilash Goel v Mgmt of Lakwa Tea Estate 1981 Lab IC 1640, 1644 (Gau), per Saikia J.
92 Workmen, Indian Airlines Corpn v Union of India 1984 Lab IC NOC 123 (Cal), per MN Roy J.
93 Delhi Cloth and General Mills Co Ltd v LC (1970) 1 LLJ 23 [LNIND 1969 SC 247],26 (SC), per Shah J.
94 Ajit Singh v Kirpal Singh 1973 Lab IC 376, 380 (Del), per VD Misra J.
95 Jessop & Co Ltd v Fifth IT 1974 Lab IC 522,526 (Cal) (DB), per Sabyasachi Mukharji J.
96 Sridharan Motor Service v IT (1959) 1 LLJ 380 (Mad), per Balakrishna Ayyar J.
97 Shankar S. Ambedkar v Shakti Insulated Wires Pvt Ltd (I 988) 2 LLJ 416-17 (Bom) (DB), per Vaze J.

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98 Saran Motors Pvt Ltd v Vishwanath (1964) 2 LLJ 139 [LNIND 1964 SC 113] (SC), per Gajendragakar J.
99 N Rarichan v RK Venu Nair 1973 Lab IC 536, 538 (Ker), per Govindan Nair J.
1 Statesman Pvt Ltd v HR Deb (1962) 1 LLJ 733, 736 (Cal), per BN Banerjee J.
2 Mgmt. of Dhanalakshmi Mills Pvt Ltd v TV Balakrishnan 1977 Lab IC 1469 -70 (Mad), per Mohan J.
3 PM Raju v PO, Le (2001) 4 LLN 903 (Mad), per Raviraja Pandian J.
4 Workmen of Lambabari Tea Estate v Mgmt (1966) 2 LLJ 315 [LNIND 1965 SC 295], 317 (SC), per Hidayatullah J.
5 Associated Cement Companies Ltd v Workmen (1963) 2 LLJ 396 [LNIND 1963 SC 151] (SC), per Gajendragadkar J.
6 Doomur Dullang Tea Estate v Workmen CA No 516 of 1966 (SC), per Vaidialingam J.
7 SRangarajan v Srirangamjanopakara Bank Ltd (1962) 2 LLJ 482 [LNIND 1962 MAD 142] (Mad), per Veeraswami J.
8 Andhra Scientific Co Ltd v A Seshagiri Rao (1961) 2 LLJ 117 [LNIND 1960 SC 340] (SC), per Das Gupta J.
9 Meenglas Tea Estate v Workmen (1963) 2 LLJ 392 [LNIND 1963 SC 50] (SC) : AIR 1963 SC 1719 [LNIND 1963 SC 50], per
Hidayatullah J.
10 Workmen of Lambabari Tea Estate v Mgmt, (1966) 2 LLJ 315 [LNIND 1965 SC 295], 317 (SC) : AIR 1987 SC 670 [LNIND 1987
SC 44]: [1987] (1) SCALE 53 : (1987) 1 SCC 542 [LNIND 1987 SC 44], per Hidayatullah J.
11 DJ Warkari v KV Karanjkar (1980) 2 LLJ 270 (Bom) (DB), per Chandurkar J.
12 Associated EIM Co P Ltd v Second LC 1969 Lab IC 1262 (Cal), per Acun K Mukherjea J.
13 Associated Cement Co Ltd v Workmen (1963) 2 LLJ 396 [LNIND 1963 SC 151], 400 (SC), per Gajendragadkar J.
14 Ananda Bazar Patrika Pvt Ltd v Employees (1963) 2 LLJ 429 [LNIND 1963 SC 147] (SC), per Gajendragadkar J.
15 Sheo Sampat Lal v State of UP 1983 Lab IC 324, 326 (All), per TS Misra J.
16 Workmen in Buckingham & Carnatic Mills v Mgmt (1970) 1 LLJ 26 [LNIND 1969 SC 238], 28 (SC) : 1969 (1) UJ 494, er
Vaidialingam J.
17 Tata Engineering and Locomotive Co Ltd v SC Prasad (1969) 2 LLJ 799 [LNIND 1969 SC 114], 809 (SC) : (1969) 3 SCC 372
[LNIND 1969 SC 114], per Shelat J.
18 Pravin Rati Lal Dudhara v Municipal Corpn of Gtr. Bombay (1996) 2 LLJ 529 [LNIND 1995 SC 1115], 533 (Born), per Dhanuka
J.
19 Shyam Bahadur Tripathi v UP Public Service Tribunal (1997) 2 LLJ 920 -21 (SC) : (1997) 2 SCC 251.
20 Woodbriar & Sussex Estates v Workers (1960) 2 LLJ 673 (Mad), per Ramachandra Ayyar J.
21 Tannery & Footwear Corpn of India Ltd v State of UP 1979 Lab IC 1434, 1436 (All), per BD Agrawala J.
22 Boisahabi Tea Estate v PO, LC 1981 Lab IC 557, 563 (Gau) (DB), per Lahiri J.
23 Powari Tea Estate v MK Barkataki (1965) 2 LLJ 102 [LNIND 1964 SC 299], 104 (SC), per Gajendragakar CJI.
24 Khardah & Co Ltd v Workmen (1963) 2 LLJ 452 [LNIND 1963 SC 138] (SC), per Gajendragadkar J.
25 Cf, State of Gujarat v Patel Ranghavnatha AIR 1969 SC 1297 [LNIND 1969 SC 177], 1301, per Sikri J.
26 GAnandam v Tamil Nadu Electricity Board (1996) 2 LLJ 1198 [LNIND 1996 MAD 623], 1200 (Mad), per Wahab J.
27 Jagdishmal Bhansali v UIL Co Ltd (1995) 2 LLJ 209, per Chopra J.
28 Uma Shankar Yadav v Registrar of Coop Societies (1993) 1 LLJ 424 [LNIND 1992 ALL 204]-25 (All), per Katju J.
29 Associated Cement Companies Ltd v Workmen (1963) 2 LLJ 396 [LNIND 1963 SC 151], 400-01 (SC), per Gajendragadkar J.
30 Goodyear India Ltd v IT 1968 Lab IC 1599, 1603-04 (P&H), per Tek Chand J.
31 Associated Cement Companies Ltd v Workmen (1963) 2 LLJ 396 [LNIND 1963 SC 151], 400-01 (SC), per Gajendragadkar J.
32 S Rangarajan v Srirangam Janopakara Bank Ltd (1962) 2 LLJ 482 [LNIND 1962 MAD 142] (Mad), per Veeraswami J.
33 Superintendent, Kaliyar Estate v O Kuriakko (1971) 1 LLJ 83, 85 (Ker), per Issac J.
34 Motor Industries Co Ltd v Shaikh Mohammed 1978 Lab I C 1335(Kant), per Rama Jois J.
35 GMcKenzie & Co Ltd v Workmen (1959) 1 LLJ 285 [LNIND 1958 SC 131] (SC) : AIR 1959 SC 389 [LNIND 1958 SC 131], per
Kapur J.
36 Bata Shoe Co Pvt Ltd v DN Ganguly (1961) 1 LLJ 303 [LNIND 1960 SC 345] (SC) : AIR 1961 SC 1158 [LNIND 1960 SC 345],
per Wanchoo J.

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37 Royal Printing Works v IT (1959) 2 LLJ 619 (Mad), per Balakrishan Ayyar J.
38 Tandur and Navandgi SQ Pvt Ltd v Workmen (1964) 1 LLJ 737 [LNIND 1963 SC 249], 740 (SC), per Gajendragadkar J.
39 Tata Engineering & Locomotive Co Ltd v SC Prasad (1969) 2 LLJ 799 [LNIND 1969 SC 114], 809 (SC), per Shelat J.
40 Board of Trustees of Port of Bombay v Dilipkumar R Nadkarni (1983) 1 LLJ 1 [LNIND 1982 SC 167], 4 (SC), per Desai J.
41 Standard Pottery Works v Standard PWE Union (1981) 2 LLJ 280 (Ker), per Vadakkal J.
42 N Kalindi v Tata Locomotive & Engineering Co. Ltd. (1960) 2 LLJ 228 [LNIND 1960 SC 95] (SC) : AIR 1960 SC 914 [LNIND
1960 SC 95], per Das Gupta J.
43 Brooke Bond (I) Ltd v Subba Raman (1961) 2 LLJ 417 [LNIND 1961 SC 419] (SC), per Wanchoo J.
44 Abdul Khader v LC 1988 Lab IC 785 -86 (AP), per PA Choudhury J.
45 Dunlop Rubber Co (I) Ltd v Workmen (1965) 1 LLJ 426 [LNIND 1964 SC 318], 430-31 (SC) : AIR 1965 SC 1392 [LNIND 1964
SC 318], per Hidayatullah J.
46 Board of Trustees of Port of Bombay v Dilipkumar R Nadkarni (I983) 1 LLJ 1, 4 (SC), per Desai J.
47 Pett v Greyhound Racing Assn Ltd [1968] 2 All ER 545, 549 (CA), per Lord MR Denning.
48 Workmen of Madura Co Ltd v LC (1966) 1 LLJ 498, 501 (Ker), per Mathew J.
49 Kesoram Cotton Milts Ltd v Gangadhar (1963) 2 LLJ 371 [LNIND 1963 SC 95], 380 (SC), per Wanchoo J.
50 Cf Pett v Greyhound Racing Assn Ltd [1968] 2 All ER 545,549 (CA), per Lord MR Denning.
51 Board of Trustees of Port of Bombay v DR Nadkarni (1983) 1 LLJ 1 [LNIND 1982 SC 167],4-6 (SC) : AIR 1983 SC 109 [LNIND
1982 SC 167]: 1983 (2) Bom CR 334 : 1983 MPLJ 1 (SC) : 1982 (2) SCALE 1097 [LNIND 1982 SC 167] : (1983) 1 SCC 124
[LNIND 1982 SC 167] : [1983] 1 SCR 828 [LNIND 1982 SC 167], per Desai J.
52 Director General of Post & Telegraphs v NG Majumdar (1974) 2 LLJ 44 (Cal) (DB), per AK Sinha J.
53 India Photographic Co Ltd v Saumitra Mohan Kumar 1984 Lab IC 42,46 (Cal) (DB), per Anil K Sen J.
54 A Veeman v Paramakudi Coop Urban Bank Ltd (1990) 1 LLJ 395, 397 (Mad), per Nainar Sundaram J.
55 Harinarayan Srivastav v United Commercial Bank (1997) 3 LLN 56 (SC).
56 Bharat Petroleum Corpn Ltd v MGK Union (1999) 1 LLN 654 (SC).
57 BV Nagarajachar v PO, CGIT (2001) 1 LLN 583 (Kant), per Datta J.
58 SGnanasambandam v TN Cements Corpn Ltd (2001) 3 LLN 677 (Mad), per Murugesan J.
59 Bank of Baroda v VS Pradhan (2001) 3 LLN 960,965 (Born), per Rebello J.
60 Motor Industries Co Ltd v Shaikh Mohammed 1978 Lab IC 1335 (Kant), per Rama Jois J.
61 NN Rao v Greaves Cotton & Co Ltd (1973) 1 LLJ 81, 85-86 (Born) (DB), per Kotval CJ.
62 N Kalindi v Tata Locomotive and Engineering Co Ltd (1960) 2 LLJ 228 [LNIND 1960 SC 95] (SC), per Das Gupta J.
63 Bharat Electronics Ltd v K Kasi (1987) 2 LLJ 203 (Kant), per Rama Jois J.
64 GR Venkateswara Reddy v Karnataka SRTC (1995) 1 LLJ 1011 [LNIND 1994 KANT 135], 1017 (Kant), per Raveendran J.
65 M Babu v Bank of India (1999) 3 LLJ 1045 (Mad), per Padmanabhan J.
66 Ghanshyam Das v PO, LC (1999) 2 LLJ 28 (P&H) (DB), per Singhvi J.
67 Central Bank of India v Prakash Chand Jain (1969) 2 LLJ 377 [LNIND 1968 SC 221], 382 (SC), per Bhargava J.
68 Union of India v TR Varma (1958) 2 LLJ 259 [LNIND 1957 SC 91], 264 (SC), per Venkatarama Ayyar J.
69 State of Haryana v Rattan Singh (1982) 1 LLJ 46 -47 (SC) : AIR 1977 SC 1512 : 1977 Lab IC 845 : (1977) 2 SCC 491, per Krishna
Iyer J.
70 Manager. Boisahabi Tea Estate v PO, LC 1981 Lab IC 557, 563 (Gau) (DB), per Lahiri J.
71 Ashok Kumar Chowdhury v Calcutta Port Trust (1993) 1 LLJ 541 [LNIND 1992 CAL 97], 543 (Cal) : (1993) 1 Cal LT 52(HC) :
96 CWN 970, per Ajoy Nath Roy J.
72 Workmen of Motipur Sugar Factory v Mgmt (1965) 2 LLJ 162 [LNIND 1965 SC 109] (SC), per Wanchoo J.
73 Saxby and Farmer (India) Ltd v Third IT (1962) 2 LLJ 52, 56 (Cal), per Banerjee J.
74 PN Bahulayan v Plantation Corpn of Keala 1986 Lab IC 1707, 1710 (Ker), per Sivaraman Nair J.
75 Doomar Dullang Tea Estate v Workmen CA No 516 of 1966 (SC), per Vaidialingam J.

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76 JD Jain v Managnnmt of State Bank of India (1982) 1 LLJ 54 [LNIND 1981 SC 465], 58 (SC), per Baharul Islam J.
77 Associated Cement Co Ltd v PO, LC 1977 Lab IC 1463, 1468 (Mad), per Mohan J.
78 B Subbiah Choudary v States of Andhra Pradesh (1960) 2 LLJ 464 (AP) (DB), per Chandra Reddi CJ.
79 Bharath Electronics Ltd v K Kasi (1987) 2 LLJ 203, 209 (Kant), per Rama Jois J.
80 JD Jain v Mgmt of State Bank of India (1982) 1 LLJ 54 [LNIND 1981 SC 465], 58 (SC), per Baharul Islam J.
81 Imperial Tobacco Co of India Ltd v Workmen (1961) 2 LLJ 414 [LNIND 1961 SC 116] (SC) : AIR 1962 SC 1348 [LNIND 1961
SC 116], per Wanchoo J.
82 Central Bank of India Ltd v Karunamoy Banerjee (1967) 2 LLJ 739 [LNIND 1967 SC 235] (SC), per Vaidialingam J.
83 Kesoram Cotton Mills Ltd v Gangadhar (1983) 2 LLJ 371 (SC), per Wanchoo J.
84 Union of India v TR Vttrma (1958) 2 LLJ 259 [LNIND 1957 SC 91] (SC), per Venkatarama Ayyar J.
85 Khardah & Co Ltd v Workmen (1963) 2 LLJ 452 [LNIND 1963 SC 138] (SC), per Gajendragadkar J.
86 Meenglass Tea Estate v Workmen (1963) 2 LLJ 392 [LNIND 1963 SC 50] (SC), per Hidayatullah J.
87 G Ravindran Nair v Chairman; Cochin Port Trust 1979 Lab IC 258 (Ker), per Khalid J.
88 Ram Bilash Goel v Mgmt of Lakwa Tea Estate 1981 Lab IC 1640, 1647 (Gau), per Saikia J.
89 Vijaya Mohini Mills v IT (1993) 1 LLJ 605 [LNIND 1991 KER 358], 607-08 (Ker), per Padmanabhan J.
90 Central Bank of India Ltd v Karunamoy Banerjee (1967) 2 LLJ 739 [LNIND 1967 SC 235], 743 (SC), per Vaidialingam J.
91 Elgin Mills Co Ltd v First LC (1969) 1 LLJ 805 [LNIND 1969 ALL 26], 807 (All), per Satish Chandra J.
92 Mgmt. of Sarada Industries v M Elumalai 1973 Lab IC 1347, 1350 (Mad), per Ramaprasada Rao J.
93 Fedco Pvt Ltd v SN Bilgrami AIR 1960, SC 415, 418-19, per Das Gupta J.
94 State of Mysore v Shivabasappa Shivappa (1964) 1 LLJ 24 (SC), per Venkatarama Ayyar J.
95 Secretary, Assam Chah Mazdoor Sangha v PO, LC 1981 Lab IC 93, 97 (Gau), per Saikia J.
96 Delhi Cloth & Gen Mills Co Ltd v Thejvir Singh (1972) 1 LLJ 201 [LNIND 1972 SC 18], 204 (SC), per Vaidialingam J.
1 Anglo American Direct Tea Trading Co Ltd v LC, (1971) 1 LLJ 147 (Mad), per Ismail J.
2 Ram Bilash Goel v Mgmt of Lakwa Tea Estate 1981 Lab IC 1640, 1643 (Gau), per Saikia J.
3 Union of India v TR Varma (1958) 2 LLJ 259 [LNIND 1957 SC 91], 264 (SC) : AIR 1957 SC 882 [LNIND 1957 SC 91], per
Venkatarama Ayyar J.
4 Assodated Cement Co Ltd v Workmen (1963) 2 LLJ 396 [LNIND 1963 SC 151] (SC), per Gajendragadkar J. .
5 S Rangarajan v Srirangam Janopakara Bank Ltd (1962) 2 LLJ 482 [LNIND 1962 MAD 142] (Mad), per Veeraswami J.
6 Mgmt of Municipal Corpn of Delhi v LC 1975 Lab IC 771, 775-76 (Dd) (DB), per Rangarajan J.
7 Phulbari Tea Estate v Workmen (1959) 2 LLJ 663 [LNIND 1959 SC 102] (SC), per Wanchoo J.
8 Meenglass Tea Estate v Workmen (1963) 2 LLJ 392 [LNIND 1963 SC 50] (SC) : AIR 1963 SC 1719 [LNIND 1963 SC 50], per
Hidayatullah J. .
9 KL Tripathi v State Bank of India (1984) 1 LLJ 2 [LNIND 1983 SC 283], 11 (SC) : AIR 1984 SC 273 [LNIND 1983 SC 283]:
[1984] (48) FLR 38 : 1983 Lab IC 1680 [LNIND 1983 SC 283] : 1983 (2) SCALE 587 [LNIND 1983 SC 283] : (1984) 1 SCC 43
[LNIND 1983 SC 283], per Sabyasachi Mukharji J.
10 Associated Cement Companies Ltd v Workmen (1963) 2 LLJ 396 [LNIND 1963 SC 151], 400 (SC), per Gajendragadkar J.
11 Central Bank of India Ltd v Karunamoy Banerjee (1967) 2 LLJ 739 [LNIND 1967 SC 235], 743 (SC), per Vaidialingam J.
12 Jessop & Co Ltd v Fifth IT 1974 Lab IC 522 (Cal) (DB), per Sabyasachi Mukharji J.
13 GR Venkateshwara Reddy v Karnataka SRTC (1995) 1 LLJ 1011 [LNIND 1994 KANT 135], 1020 (Kant) : 1995 (1) Kar LJ 298
[LNIND 1994 KANT 135], per Raveendran J.
14 Garfa Co-operative Stores Ltd v Isecond IT (2000) 2 LLJ 1236 [LNIND 1999 CAL 233] (Cal), per Sengupta J.
15 Committee of Mgmt. of Kisan Degree Collge v Shambhu Saran Pandey (1995) 2 LLJ 625 -27 (SC).
16 Azizul Haque v State of Uttar Pradesh (1971) 3 SCC 796, per Hegde J.
17 State of Mysore v Shivabasappa Shivappa (1964) 1 LLJ 24 (SC), per Venkatarama Ayyar J.
18 Cmtral Bank of India Ltd v Prakash Chand Jain (1969) 2 LLJ 377 [LNIND 1968 SC 221], 382 (SC), per Bhargava J.

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19 PC Thomas v Mutholi Cooperative Society Ltd 1978 Lab IC 1428 (Ker) (DB), per Gopalan Nambiyar J.
20 Shiva Anand v Indian Airlines (2003) 4 LLJ 362 [LNIND 2002 CAL 334] (Cal), per Kalyan Jyoti Sengupta J.
21 Anant R Kulkarni v YP Education Society AIR 2013 SC 2098 [LNIND 2013 SC 447]: 2013 Lab IC 2341 [LNIND 2013 SC 447] :
2013 (6) SCALE 425 [LNIND 2013 SC 447] : (2013) 6 SCC 515 [LNIND 2013 SC 447], per BS Chauhan J.
22 Awadesh K Bhamagar v Gwalior RSMW Ltd (1972) 2 LLJ 143 [LNIND 1972 SC 231] (SC), per Vaidialingam J.
23 SV Angappan v Tamil Nadu Electricity Board (1990) 2 LLJ 273, 279 (Mad), per Bakthavatsalam J.
24 Cf Collector of CE & LC v Sanwarmal Purohit CA Nos 1362-63 of 1967 (1968) (SC), per Shah J
25 Cf State of Assam v Mahendra Kumar Das AIR 1970 SC 1255 [LNIND 1970 SC 153], 1260, per Vaidialingam J.
26 Meenglass Tea Estate v Workmen (1963) 2 LLJ 392 [LNIND 1963 SC 50] (SC), per Hidayatullah J.
27 Ashwani Kumar Suman v UPSTATE Agro Indl Corpn Ltd 1990 Lab IC 364, 367 (All) (DB), per Raza J.
28 Howrah Trading Co Pvt Ltd v Fourth IT (1966) 2 LLJ 282 (Cal), per BN Banerjee J.
29 Cf K Chindambaram v Govt of Tamil Nadu (1989) 1 LLJ 106, 108 (Mad), per Kader J.
30 State of Madhya Pradesh v Chintaman AIR 1961 SC 1623, 1629, per Gajendragadkar J.
31 UPSRTC v Musai Ram (1999) 2 LLJ 175 (SC).
32 HC Sarin v Union of India [1976] 2 SLR 248 [LNIND 1976 SC 176].
33 State of Maharashtra v MN Mardikar (1991) 1 LLJ 269, 273 (SC), per Ahmadi J.
34 Kesoram Cotton Mills Ltd v Gangadhar (1963) 2 LLJ 371 [LNIND 1963 SC 95], 380 (SC), per Wanchoo J.
35 Tata Iron & Steel Co Ltd v LC, Jamshedpur (1996) 2 LLJ 874, 878 (Pat), per Sahay J.
36 Sur Enamel & Stamping Works Ltd v Workmen (1963) 2 LLJ 367 [LNIND 1963 SC 146] (SC), per Oas Gupta J.
37 Phulbari Tea Estate v Workmen (1959) 2 LLJ 663 [LNIND 1959 SC 102] (SC), per Wanchoo J.
38 Tata Oil Mills Co Ltd v Workmen (1963) 2 LLJ 78 [LNIND 1962 SC 273] (SC), per Gajendragadkar J.
39 Jessop & Co Ltd v Fifth IT 1974 Lab IC 522 (Cal) (DB), per Sabyasachi J.
40 Awadesh K Bhatnagar v Gwalior RS Mfg Wvg Ltd. (1972) 2 LLJ 143 [LNIND 1972 SC 231] (SC) : AIR 1972 SC 1431 [LNIND
1972 SC 231]: 1972 Lab IC 842 : (1973) 3 SCC 779 [LNIND 1972 SC 231], per Vaidialingam J.
41 Bharath Electronics Ltd v K Kasi (1987) 2 LLJ 203, 209 (Kant), per Rama Jois J.
42 Uttar Pradesh SRTC v Musal Ram (1999) 3 LLN 433 (SC).
43 General Electric Co of India Ltd v BK Kedia (1968) 1 LLJ 731, 736 (Punj), per Gurdev Singh J.
44 Rashid Ahmad v UPSRTC 1987 Lab IC 323, 325-26 (All), per Sahai J.
45 Tata Engineering and Locomotive Co Ltd v SC Prasad (1969) 2 LLJ 799 [LNIND 1969 SC 114], 811-12 (SC), per Shelat J.
46 Tata Oil Mills Co Ltd v Workmen (1964) 2 LLJ 113 [LNIND 1964 SC 111] (SC) : AIR 1965 SC 155 [LNIND 1964 SC 111]: 1965
KLJ 90, per Gajendragadkar J.
47 Kameshwar Singh v Canara Bank 1993 Lab IC 692, 700 (Pat), per Aftab Alam J.
48 Golam Rasul v Public Service Commission (1963) 2 LLJ 174, 176 (Cal), per BN Banerjee J.
49 Tata Engineering and Locomotive Co Ltd v SC Prasad (1969) 2 LLJ 799 [LNIND 1969 SC 114], 811-12 (SC) : (1969) 3 SCC 372
[LNIND 1969 SC 114], per Shelat J.
50 State Bank of India v RK Jain (1971) 2 LLJ 599 [LNIND 1971 SC 481], 610-12 (SC) : AIR 1972 SC 136 [LNIND 1971 SC 481]:
1972 Lab IC 13 [LNIND 1971 SC 481] : (1972) 4 SCC 304 [LNIND 1971 SC 481], per Vaidialingam J.
51 Ruston & Hornsby (I) Ltd v TB Kadam, (1975) 2 LLJ 352 [LNIND 1975 SC 231], 356 (SC) : AIR 1975 SC 2025 [LNIND 1975 SC
231]: (1976) 3 SCC 71 [LNIND 1975 SC 231], per Alagiriswami J.
52 Angshuman Das Gupta v Jute Corporation of India Ltd (1998) 1 LLJ 526 (531) (Gau), per Das J.
53 Tata Oil Mills Co Ltd v Workmen (1964) 2 LLJ 113 [LNIND 1964 SC 111] (SC), per Gajendragadkar CJI.
54 Central Bank of India Ltd v Karunamoy Banerjee (1967) 2 LLJ 739 [LNIND 1967 SC 235]. 745 (SC). per Vaidialingam J.
55 Sur Enameland Stamping Works Ltd v Workmen (1963) 2 LLJ 367 [LNIND 1963 SC 146]. 369 (SC). per Das Gupta J.
56 M Muniswami v Superintending Engineer (1969) 1 LLJ 89 (Mad). per Ramakrishnan J.
57 CM Deshmukh v Board of Trustees, Port of Bombay 1995 Lab IC 1496 1502 (Born). per Bhairavia J.

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58 Phulbari Tea Estate v Workmen (1959) 2 LLJ 663 [LNIND 1959 SC 102] (SC). per Wanchoo J.
59 Khardah & Co Ltd v Workmen (1963) 2 LLJ 452 [LNIND 1963 SC 138]. 455 (SC). per Gajendragadkar J.
60 Kesoram Cotton Mills Ltd v Gangadhar (1963) 2 LLJ 371 [LNIND 1963 SC 95], 380 (SC), per Wanchoo J.
61 State of Mysore v Shivabassapa Shivappa (1964) 1 LLJ 24, 26 (SC), per Venkatarama Ayyar J.
62 Sur Enamel and Stamping Works Ltd v Workmen (1963) 2 LLJ 367 [LNIND 1963 SC 146], 369 (SC), per Das Gupta J.
63 KN Baruah v Budla Beta Tea Estate CA 1017 of 1965 (1967) (SC), per Sikri J.
64 Municipal Corpn of Delhi v LC 1973 Lab IC 771,775 (Delhi), (DB), per Rangarajan J.
65 Chandrakumar M Deshmukh v B oT, Port of Bombay 1995 Lab IC 1496 (Born), per Bhairavia J.
66 Bharat Heavy Electricals Ltd v N Narasimhaiah 1983 Lab IC (NOC) 112 (Kant), per CK Urs J.
67 Committee of Mgmt. of Kissan Degree College v Shambhu Saran Pandey (1995) 2 LLJ 625, 627 (SC).
68 Associated Cement Companies Ltd v Workmen (1963) 2 LLJ 396 [LNIND 1963 SC 151], 400 (SC) : [1964] 3 SCR 652 [LNIND
1963 SC 151], per Gajendragadkar J.
69 R Govindraj v GTTC (1992) 1 LLJ 597, 601-02 (Kant) (DB), per Rama Jois J.
70 Meenglas Tea Estate v Workmen (1963) 2 LLJ 392 [LNIND 1963 SC 50] (SC), per Hidayatullah J.
71 Central Bank of India Ltd v Karunamoy Banerjee (1967) 2 LLJ 739 [LNIND 1967 SC 235] (SC) : AIR 1968 SC 266 [LNIND
1967 SC 234], per Vaidialingam J.
72 Firestone TRCI Ltd v Workmen (1967) 2 LLJ 715 [LNIND 1967 SC 243], 718 (SC), per Hidayatullah J.
73 Bharat Heavy Electricals Ltd v N Narasimhaiah 1983 Lab IC (NOC) 112 (Kant), per CK Urs J. .
74 Kesoram Cotton Mills Ltd v Gangadhar (1963) 2 LLJ 371 [LNIND 1963 SC 95], 380 (SC), per Wanchoo J.
75 Sharda Prasad Vishwakarma v State of UP (1968) 1 LLJ 45, 48 (All), per BD Gupta J.
76 Anand G Joshi v Maharashtra SFC 1991 Lab IC 1666, 1678 (Born), per Sugla J.
77 Delhi Cloth and General Mills Co Ltd v Kalu Ram CA No 195 of 1964 (SC), per Wanchoo J.
78 Binny Ltd v Workmen (1972) 1 LLJ 478 [LNIND 1972 SC 117] (SC) : AIR 1972 SC 1975 [LNIND 1972 SC 117]: 1972 Lab IC
1141 [LNIND 1972 SC 117] : (1972) 3 SCC 806 [LNIND 1972 SC 117], per Mitter J.
79 Tata Engineering and Locomotive Co Ltd v SC Prasad (1964) 2 LLJ 799, 809 (SC), per Shelat J.
80 Ananda Bazar Patrika v Employees (1963) 2 LLJ 429 [LNIND 1963 SC 147], 433 (SC), per Gajendragadkar J.
81 Shyam SL Gupta v Mgmt of DCM Chemical Works 1987 Lab IC 1193 (Del), per Mahinder Narain J.
82 Balmer Lawrie Van Leer Ltd v BS Gholap (1996) 1 LLJ 312 [LNIND 1995 SC 8], 315 (Born), per Shah J.
83 Phulbari Tea Estate v Workmen (1959) 2 LLJ 663 [LNIND 1959 SC 102] (SC) : AIR 1959 SC 1111 [LNIND 1959 SC 102], per
Wanchoo J.
84 India Geneal Navigation and Rly Co Ltd v Workmen (1961) 2 LLJ 372 (SC), per Das Gupta J.
85 Bharat Sugar Mills Ltd v Jai Singh (1961) 2 LLJ 644 [LNIND 1961 SC 306] (SC) : [1962] 3 SCR 684 [LNIND 1961 SC 306], per
Das Gupta J.
86 Associated Cement Co Ltd v Workmen (1963) 2 LLJ 396 [LNIND 1963 SC 151] (SC) : 1964] 3 SCR 652, per Gajendragadkar J.
87 Firestone TRCI. Ltd v Workmen (1967) 2 LLJ 715 [LNIND 1967 SC 243] (SC), per Hidayatullah J.
88 GAnandam v Tamilnadu Electricity Board (1996) 2 LLJ 1198 [LNIND 1996 MAD 623], 1200 (Mad), per Wahab J.
89 CI Poulose v President, PSC Bank Ltd 1996 Lab IC 2029,2031-32 (DB) (Ker), per Koshy J.
90 British Bank of the Middle East v Marcus S. Lobo (1999) 2 LLJ 1299 [LNIND 1999 BOM 578] (Born) (DB), per Desai J.
91 Sur Enamel and Stamping Works Ltd v Workmen (1963) 2 LLJ 367 [LNIND 1963 SC 146] (SC) : AIR 1963 SC 1914 [LNIND
1963 SC 146], per Das Gupta J.
92 Meenglass Tea Estate v Workmen (1963) 2 LLJ 392 [LNIND 1963 SC 50] (SC) : AIR 1963 SC 1719 [LNIND 1963 SC 50], per
Hidayatullah J.
93 Kesoram Cotton Mills Ltd v Gangadhar (1963) 2 LLJ 371 [LNIND 1963 SC 95] (SC) : AIR 1964 SC 708 [LNIND 1963 SC 95],
per Wanchoo J.
94 Ananda Bazar Patrika Pvt Ltd v Employees (1963) 2 LLJ 429 [LNIND 1963 SC 147] (SC) : AIR 1964 SC 339 [LNIND 1963 SC
147], per Gajendragadkar J.

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95 Firestone TRCI Ltd v Workmen (1967) 2 LLJ 715 [LNIND 1967 SC 243] (SC), per Hidayatullah J.
96 Central Bank of India v Karunamoy Banerjee (1967) 2 LLJ 739 [LNIND 1967 SC 235], 745 (SC) : AIR 1968 SC 266 [LNIND
1967 SC 234], per Vaidialingam J.
97 Workmen of Langharajan Tea Estate v Mgmt CA No 720 of 1966 (13-9-1968) (SC), per Bhargava J.
98 Workmen in Buckingham and Carnatic Mills v Mgmt (1970) 1 LLJ 26 [LNIND 1969 SC 238], 31 (SC) : 1969 (1) UJ 494, per
Vaidialingam J.
99 Mulchandani Electrical and Radio Industries Ltd v Workmen (1975) 1 LLJ 391 [LNIND 1975 SC 35] (SC) : AIR 1975 SC 2125
[LNIND 1975 SC 35]: [1975] (30) FLR 169 : 1975 Lab IC 1508 : (1975) 4 SCC 731 [LNIND 1975 SC 35], per Gupta J.
1 KL Tripathi v State Bank of India (1984) 1 LLJ 2 [LNIND 1983 SC 283], 10 (SC) : AIR 1984 SC 273 [LNIND 1983 SC 283]:
1983 Lab IC 1680 [LNIND 1983 SC 283] : (1984) 1 SCC 43 [LNIND 1983 SC 283], per Sabyasachi Mukharji J.
2 Indian Explosives Ltd v PO, LC 1975 Lab IC 641, 645 (Pat) (DB), per Agarwal J.
3 Peirce Leslie & Co Ltd v LC (1963) 1 LLJ 797 (Mad), per Veeraswami J.
4 Howrah Trading Co Pvt Ltd v Fourth IT (1966) 2 LLJ 282 (Cal), per BN Banerjee J.
5 Firestone TRCI Ltd v Workmen (1967) 2 LLJ 715 [LNIND 1967 SC 243] (SC), per Hidayatullah J.
6 State of Rajasthan v BK Meena (1997) 1 LLJ 746 [LNIND 1996 SC 1572], 752 (SC), per Jeevan Reddy J.
7 PJ Sunder Rajan v Unit Trust of India (1991) 2 LLJ 247 [LNIND 1990 MAD 150], 249 (Mad) (DB), per Nainar Sundaram J.
8 Kusheshwar Dubey v Bharat Coking Coal Ltd (1988) 2 LLJ 470 [LNIND 1988 SC 438], 473 (SC).
9 Union of India vSARDAR Bahadur 1972 Lab IC 627, 630 (SC), per Mathew J. .
10 MM Rubber Co Ltd v S Natarajan (1985) 2 LLJ 364 [LNIND 1985 MAD 269] (DB), per Venkataswami J.
11 Bimal Kanta Mukherjee v Newman’s Printing Works (1956) 1 LLJ 453 (LAT).
12 Delhi Cloth & General Mills Ltd v Kushal Bhan (1960) 1 LLJ 520 [LNIND 1959 SC 30], 521 (SC) : AIR 1960 SC 806 [LNIND
1959 SC 30]. per Wanchoo J.
13 Tata Oil Mills Co Ltd v Workmen (1964) 2 LLJ 113 [LNIND 1964 SC 111], 119 (SC) : AIR 1965 SC 155 [LNIND 1964 SC 111],
per Gajendragadkar CJI.
14 Udneshwar Prasad v Hindustan SWC Ltd 1983 Lab IC (NOC) 102 (Pat), per PS Sahay J.
15 Vinod Behari Dixit v United Commercial Bank 1979 Lab IC 1239, 1244 (Cal), per Salil Kumar Dana J.
16 JK Cotton Spg and Wvg Co Ltd v Workmen (1965) 2 LLJ 153 [LNIND 1965 SC 153] (SC), per Mudholkar J.
17 Anglo-American DTTRADING Co Ltd v LC (1970) 1 LLJ 481, 484-85 (Mad), per Alagiriswami J.
18 Jang Bahadur Singh v Baijnath Tewari (1969) 1 LLJ 567 [LNIND 1968 SC 132], 570 (SC) : AIR 1969 SC 30 [LNIND 1968 SC
132]: 1968 (2) ALT 280 (SC) : (1968) 38 AWR 580 : 1968 (16) BLJR 939 : 1969 Cr LJ 267, per Bachawat J.
19 Kusheshwar Dubey v Bharat Coking Coal Ltd (1988) 2 LLJ 470 [LNIND 1988 SC 438], 472-73 (SC) : AIR 1988 SC 2118
[LNIND 1988 SC 606]: 1988 (2) SCALE 641 : (1988) 4 SCC 319 [LNIND 1988 SC 606].
20 State of Rajasthan v BK Meena (1997) 1 LLJ 746 [LNIND 1996 SC 1572],752 (SC) : AIR 1997 SC 13 [LNIND 1996 SC 1572]:
1996 Lab IC 2750 : 1996 (7) SCALE 363 [LNIND 1996 SC 1572] : (1996) 6 SCC 417 [LNIND 1996 SC 1572], per Jeevan Reddy
J.
21 Dy Director of Collegiate Education v SN Meera 1995 Lab IC 1615, 1618 (SC), per Jeevan Reddy J.
22 Mgmt of WS Insulator of India Ltd v Md Moosa 1979 Lab IC 102 (Mad), per Ramanujam J.
23 Corporation of Nagpur v Ramachandra G Modak (1981) 2 LLJ 6 [LNIND 1981 SC 119] (8) (SC), per Fazal Ali J.
24 Nelson Moris v Union of India (1999) 2 LLN 1059, 1061 (SC).
25 NK Soloman v Food Corporation of India (1998) 1 LLN 255 (MP), per Dharmadhikari J.
26 Mannalal v Second LC (1998) 1 LLN 862, 866 (Born), per Sirpurkar J.
27 Durgapur Chemicals Ltd v Ninth IT (2001) 4 LLN 1052 (Cal), per Ray J.
28 Kedar Das v LIC of India (1999) I LLJ 464(Orr) (DB), per Patra J.
29 Regional Manager, Bank of Baroda v PO, CGIT (1999) 1 LLJ 656 [LNIND 1999 SC 73] (SC), per Majmudar J.
30 M Krishnan v Mgmt of Terrace Estate (2000) 1 LLN 396 (Mad).
31 Senior Supdt of Post Offices v A Gopalan (2000) 1 LLN 92 (SC).

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32 R Shankaranarayanan v MDCCB Ltd (2000) 4632 (Mad) (DB), per Sirpurkar J.

33 P Elango v LC (2001) 2 LLN 449 (Mad), per Dinakaran J.
34 Sumangal V Rana v State of Maharashtra (2000) 1 LLJ 896 (Born) (DB), per Mane J.
35 S Rangasami v PO, LC (2001) 3 LLN 671 (Mad), per Kalifulla J.
36 Ram KP Mahato v Steel Authority of India Ltd (2001) 4 LLN 1080 Ghar), per Eqbal J.
37 M Ravindran v Mgmt of Bharat Electronics Ltd (2002) 3 LLN 1009 (Kant), per Gururajan J.
38 M Paul Anthony v Bharat Gold Mines Ltd (1999) 1 LLJ 1094 [LNIND 1999 SC 319] (SC) : AIR 1999 SC 1416 : 1999 (2) CTC 579
: 1999 (2) SCALE 363 : (1999) 3 SCC 679, per Saghir Ahmed J.
39 Dhanna Rilm v Rajasthan SRTC (2002) 4 LLN 629 (Raj) (DB), per Balia J.
40 Div Controller, Gujarat SRTC v CJ Rana (1998) 4 LLN 666 (Guj), per Mehta J.
41 Senior Supdt of Post Offices v A Gopalan (2000) 1 LLN 92 (SC).
42 Prasad Film Laboratories v Principal LC (2001) 1 LLN 985 (Mad), per Karpagavinayagam J.
43 GM, Empee Distilleries Ltd v State (2002) 2 LLN 746 (Mad), per Ramamurthi J.
44 Uranium Corpn of India Ltd v PO, CGIT, (2003) 4 LLJ 238 (Jhrk), per M Y Iqbal J.
45 Divl. Controller, GSRTC v Kadarbhai J Suthar, AIR 2007 SC (supp) 660, per Pasayat J.
46 Tata Oil Mills Co Ltd v Workmen (1964) 2 LLJ 113 [LNIND 1964 SC 111], 117 (SC), per Gajendragadkar CJI.
47 JK Cotton Spg Weaving Co Ltd v Workmen (1965) 2 LLJ 153, 155 (SC), per Mudholkar J.
48 Tata Oil Mills Co Ltd v Workmen (1964) 2 LLJ 113 [LNIND 1964 SC 111], 117 (SC), per Gajendragadkar CJI.
49 Delhi Cloth & General Mills Co Ltd v Tejvir Singh (1972) 1 LLJ 201 [LNIND 1972 SC 18], 204 (SC), per Vaidialingam J.
50 Mgmt of Eastern Electric and Trading Co v Baldev Lal (1975) 3 LLJ 367, 370 (SC) : AIR 1975 SC 1892 [LNIND 1975 SC 266]:
(1975) 4 SCC 684 [LNIND 1975 SC 266], per Alagiriswami J.
51 S Visweswariah v New India Assurance Co Ltd (1988) 2 LLJ 233, 237 (Kant) (DB), per PC Jain CJ.
52 Northern Rly Co-operative Credit Society Ltd v IT (1967) 2 LLJ 46 (SC) : AIR 1967 SC 1182 [LNIND 1967 SC 419], per
Bhargava J.
53 State of Uttar Pradesh v TP Lal Srivastava (1997) 1 LLJ 831 [LNIND 1996 SC 1506]-32 (SC) : (1996) 10 SCC 702 [LNINDORD
1996 SC 97] : [1996] Supp 6 SCR 623.
54 Imperial Tobacco Co of India Ltd v Workmen (1961) 2 LLJ 414 [LNIND 1961 SC 116] (SC) : AIR 1962 SC 1348 [LNIND 1961
SC 116], per Wanchoo J.
55 Harinagar Sugar Mills Ltd v Siv Saran Sinha (1961) 2 LLJ 511 (Pat) (DB), per Choudhary J.
56 Lakshmi Devi Sugar Mills Ltd v Ram Sarup (1957) 1 LLJ 17 [LNIND 1956 SC 85],24 (SC), per Bhagwati J.
57 Motor Industries Co Ltd v Shaikh Mohd 1978 Lab IC 1335 (Kant), per Rama Jois J.
58 Brooke Bond India Pvt Ltd v Subha Raman (1961) 2 LLJ 417 [LNIND 1961 SC 419] (SC), per Wanchoo J.
59 Sarada Industries, Ambattur v M Elumalai 1973 Lab IC 1347, 1350 (Mad), per Ramaprasada Rao J.
60 Gokulananda Tripathy v Mgmt. of SD Hamraj (1975) 1 LLJ 133, 135 (Orissa) (DB), per RN Misra J.
61 Mgmt of Eastern Electric and Trading Co v Baldev Lal (1975) 2 LLJ 367 [LNIND 1975 SC 266] (SC) : AIR 1975 SC 1892
[LNIND 1975 SC 266]: (1975) 4 SCC 684 [LNIND 1975 SC 266], per Alagiriswami J.
62 Sheo Sampat Lal v State of Uttar Pradesh 1983 Lab IC 324, 327 (All), per TS Misra J.
63 Tata Engineering Locomotive Co Ltd v State of Bihar 1984 Lab IC 206 -07 (Pat) (DB).
64 Mohd Shahid v Aligarh Muslim University (1998) 1 LLN 430 (All), per Gulati J.
65 Nagar Palika Nataur v UP Public Service Tribunal (1998) 3 LLN 900 (SC).
66 Pepsu Road Transport Corpn v Rawel Singh, AIR 2008 SC (supp) 1591, per CK Thakker J.
67 CMD, VSP v GSP Haribabu, AIR 2008 SC (supp) 1694, per Sinha J.
68 SBI v Hemant Kumar AIR 2011 SC 1890 [LNIND 2011 SC 375]: (2011) 2 LLJ 517 [LNIND 2011 SC 375] : 2011 (4) SCALE 302
[LNIND 2011 SC 375] : (2011) 11 SCC 355 [LNIND 2011 SC 375], per Aftab Alam J.
69 Anil Kumar v PO, LC (1986) 1 LLJ 101 [LNIND 1985 SC 191], 103 (SC), per Desai J.

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70 Madhya Pradesh Industries Ltd v Union of India [1966] 1 SCR 412,466, per Subba Rao J.
71 Mahabir Prasad v State of UP [1971] 1 SCR 201 [LNIND 1970 SC 188], 205, per Shah J.
72 Khardah & Co Ltd v Workmen (1963) 2 LLJ 452 [LNIND 1963 SC 138], 456 (SC), per Gajendragadkar J.
73 Powari Tea Estate v MK Barkataki (1965) 2 LLJ 102 [LNIND 1964 SC 299], 105 (SC), per Gajendragadkar CJI.
74 Khardah & Co Ltd v Workmen (1963) 2 LLJ 452 [LNIND 1963 SC 138], 456 (SC), per Gajendragadkar J.
75 Sur Enamel and Stamping Works Ltd v Workmen (1963) 2 LLJ 367 [LNIND 1963 SC 146], 369 (SC), per Das Gupta J.
76 Khardah & Co Ltd v Workmen (1963) 2 LLJ 452 [LNIND 1963 SC 138], 456-57 (SC), per Gajendragadkar J.
77 Powari Tea Estate v MK Barkataki (1965) 2 LLJ 102 [LNIND 1964 SC 299] (SC), per Gajendragadkar CJI.
78 Howrah Trading Co Pvt Ltd v Fourth IT (1966) 2 LLJ 282, 288-89 (Cal), per BN Banerjee J.
79 Vijaya Mohini Mills v IT (1993) 1 LLJ 605 [LNIND 1991 KER 358], 607-08 (Ker), per Padmanabhan J.
80 Northern Dooars Tea Co Ltd v Workmen of DDTE (1964) 1 LLJ 436 [LNIND 1963 SC 184], 440-41 (SC) : AIR 1967 SC 560
[LNIND 1963 SC 184], per Gajendragadkar J.
81 Samnuggur Jute Factory Co Ltd v Workmen (1964) 1 LLJ 634 [LNIND 1963 SC 247], 636 (SC), per Gajendragadkar J.
82 Saran Motors Pvt Ltd v Vishwanath (1964) 2 LLJ 139 [LNIND 1964 SC 113] (SC), per Gajendragadkar CJI.
83 Howrah Trading Co Pvt Ltd v Fourth IT (1966) 2 LLJ 282 (Cal), per BN Banerjee J.
84 Anil Kumar v LC (1986) 1 LLJ 101 [LNIND 1985 SC 191] (SC) : AIR 1985 SC 1121 [LNIND 1985 SC 191]: 1985 Lab IC 1219
[LNIND 1985 SC 191] : 1985 (2) SCALE 1365 [LNIND 1985 SC 191] : (1985) 3 SCC 378 [LNIND 1985 SC 191], per Desai J.
85 Central Bank of India Ltd v PC Jain (1969) 2 LLJ 377 [LNIND 1968 SC 221], 384 (SC), per Bhargava J.
86 Profulla Mohan Mukherjee v IG of Police (1958) 2 LLJ 705 [LNIND 1958 CAL 186] (Cal) (DB), per Chakravarti CJ.
87 Tata Engineering and Locomotive Co Ltd v SC Prasad (1969) 2 LLJ 799 [LNIND 1969 SC 114], 809 (SC) : (1969) 3 SCC 372
[LNIND 1969 SC 114], per Shelat J.
88 Mgmt. of Imperial Book Depot v VP Aggarwal 1969 Lab IC 120, 122 (Del), per HR Khanna J.
89 Pure Drinks Pvt Ltd v Kirat Singh Maungatt (1961) 2 LLJ 99 (SC), per Gajendragadkar J.
90 Provincial Transport Service v State IC (1962) 2 LLJ 360 [LNIND 1962 SC 272] (SC), per Das Gupta J.
91 Saran Motors Pvt Ltd v Vishwanath (1964) 2 LLJ 139 [LNIND 1964 SC 113], 142 (SC), per Gajendragadkar J.
92 Nirmal Sen Gupta v National Carbon Co Ltd CA No 155 of 1959 (SC), per Wanchoo J. .
93 N Kalindi v Tata Engg & Locomotive Co Ltd (1960) 2 LLJ 228 [LNIND 1960 SC 95], 232 (SC) : AIR 1960 SC 914 [LNIND 1960
SC 95], per Das Gupta J.
94 Central Bank of India Ltd v PC Jain (1969) 2 LLJ 377 [LNIND 1968 SC 221], 380 (SC), per Bhargava J.
95 Parry & Co Ltd v PC Pal (1970) 2 LLJ 429 [LNIND 1968 SC 358], 436 (SC), per Shelat J.
1 Sri Sivasakthi Bus Service v P Gopal 1971 Lab IC 1388 -89 (Mad), per Ramaprasada Rao J.
2 Lord Krishna Textile Mills v Workmen (1961) 1 LLJ 211 [LNIND 1960 SC 332], 219 (SC), per Gajendragadkar J.
3 Parry’s Employees’ Union v Parry & Co (1966) 1 LLJ 535 (Cal) (DB), per Bose CJ.
4 Cf, Provincial Transport Service v State Industrial Court (1962) 2 LLJ 360 [LNIND 1962 SC 272] (SC), per Das Guptaj.
5 Delhi Cloth & General Mills Co Ltd v Ludh Budh Singh (1972) 1 LLJ 180 [LNIND 1972 SC 17], 189 (SC), per Vaidialingam J.
6 Rajinder Kumar Kindra v Delhi Administration (1984) 2 LLJ 517 [LNIND 1984 SC 267], 524 (SC), per Desai J.
7 Saudi Arabian Airlines v Shehnaz Mudbhatkal (1999) 1 LLN 708, 721 (Born), per Srikrishna J.
8 Hamdard Dawakhana Wakf v Workmen (1962) 2 LLJ 772 [LNIND 1962 SC 336] (SC), per Gajendragadkar J.
9 Tata Oil Mills Co Ltd v Workmen (1964) 2 LLJ 113 [LNIND 1964 SC 111] (SC), per Gajendragadkar J.
10 Banaras Electric Light and Power Co Ltd v LC (1972) 2 LLJ 328 [LNIND 1972 SC 252] (SC) : AIR 1972 SC 2182 [LNIND 1972
SC 252]: 1972 Labic 939 : (1974) 3 SCC 103 [LNIND 1972 SC 252], per Jaganmohan Reddy J.
11 Asst Security Officer, RPF v S Sivagnanam (1996) 2 LLJ 597 [LNIND 1996 MAD 503],605 (Mad) (DB) : 1996-2-LW 119, per
Lakshmanan J.
12 Anand Chandra Prusty v Orissa Mining Corpn Ltd 1996 Lab IC 2595, 2597 (Ori).
13 Chandrakumar M Deshmukh v Bot of Port of Bombay 1995 Lab IC 1496,1502 (Bom), per Bhairavia J.

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14 Anandram J Vasvani v Union of India (1983) 2 LLJ 122, 127 (Cal) (DB), per Pyne J.
15 Shahdara-Saharanpur Light Rly Co Ltd v SSRW Union (1969) 1 LLJ 734 [LNIND 1968 SC 281], 744 (SC) : AIR 1969 SC 513
[LNIND 1968 SC 281], per Shelat J.
16 Hamdard Dawakhana Wakf v Workmen (1962) 2 LLJ 772 [LNIND 1962 SC 336], 777 (SC), per Gajendragadkar J.
17 Northern Rly CCS Ltd v IT (1967) 2 LLJ 46, 52 (SC), per Bhargava J. .
18 Associated Cement Companies Ltd v TC Srivastava (1984) 2 LLJ 105 [LNIND 1984 SC 98], 109 (SC) : AIR 1984 SC 1227
[LNIND 1984 SC 98]: 1984 Supp scc 87, per Tulzapurkar J.
19 Engine Valves Ltd v LC (1991) 1 LLJ 372 [LNIND 1990 MAD 517], 379 (Mad) (DB), per Raju J.
20 Lakshmiratan Cotton Mills Co Ltd v Workmen (1975) 2 LLJ 174 [LNIND 1975 SC 197] (SC) : AIR 1975 SC 1689 [LNIND 1975
SC 197], per Bhagwati J.
21 Union of India v E Bashyan 1988 Lab IC 1702 (SC), per Thakkar J.
22 Union of India v Mohd Ramzan Khan (1991) 1 LLJ 29 [LNIND 1990 SC 726] (SC) : AIR 1991 SC 471 [LNIND 1990 SC 726],
per Ranganath Misra CJI.
23 MD, ECIL v B Karunakar (1994) 1 LLJ 210 (SC), per Sawant J.
24 Firestone TRCI Ltd, v Workmen (1967) 2 LLJ 715 [LNIND 1967 SC 243] (SC), per Hidayatullah (SC).
25 Union of India v Mohd Ramzan Khan (1991) 1 LLJ 29 [LNIND 1990 SC 726] (SC) : AIR 1991 SC 471 [LNIND 1990 SC 726],
per Misra CJI.
26 MD, ECIL, v B Karunakar (1994) 1 LLJ 162 [LNIND 1993 SC 1059] (SC) : (1993) 4 SCC 727 [LNIND 1993 SC 1059], per
Sawant J. .
27 Khem Chand v Union of India (1959) 1 LLJ 167 (SC), per Das Gupta J.
28 Union of India v Md Ramzan Khan, (1991) I LLJ 29 (SC) : AIR 1991 SC 471 [LNIND 1990 SC 726], per Misra CJI.
29 AK Kraipak v Union of India, [1970] 1 SCR 457 [LNIND 1969 SC 197], per Hegde J.
30 Charan Lal Sahu v Union of India, (1990) 1 SCC 613 [LNIND 1989 SC 639], per Sabyasachi Mukherji J.
31 Sukhdev Singh v Bhagatram SS Raghuvanshi, AIR 1975 SC 1331 [LNIND 1975 SC 79]: (1975) 1 SCC 421 [LNIND 1975 SC 79],
per Ray CJI.
32 A K Kraipak v Union of India [1970] 1 SCR 457 [LNIND 1969 SC 197], per Hegde J.
33 Chairman, Board of Mining Examination v Ramjee AIR 1977 SC 965 [LNIND 1977 SC 67], 969, per Iyer J.
34 Charan Lal Sahu v Union of India (1990) 1 SCC 613 [LNIND 1989 SC 639].
35 JK Cotton Spinning & WeavingMills Co Ltd v LAT (1963) 2 LLJ 36 (SC). per Gajendragadkar J.
36 Burmah Shell India Ltd v Workmen (1970) 1 LLJ 363 (SC). per Hegde J.
37 Rao, EM (2015), Industrial Jurisprudence: A Critical Commentary, 2nd ed., Lexis Nexis, pp. 222-5
38 SK Singh v Central Bank of India (1997) 2 LLJ 537 (SC) : AIR 1997 SC 2686 : 1996 (7) SCALE 628 : (1996) 10 SCC 694.
39 State of Karnataka v VB Hiregowdar (1997) 2 LLJ 921, 923 (SC) : 1996 (5) SCALE 673 [LNIND 1996 SC 1075] : (1996) 10 SCC
505 [LNIND 1996 SC 1075].
40 Ram Kishan v Union of India, (1996) 1 LLJ 982, 985 (SC) : AIR 1996 SC 255 [LNIND 1995 SC 858]: 1995 (5) SCALE 431 :
(1995) 6 SCC 157 [LNIND 1995 SC 858].
41 PM Raju v PO LC (2001) 4 LLN 903 (Mad), per Raviraja Pandian J.
42 Orientallmurance Co Ltd v S Balakrishnan (2001) 3 LLN 727 (SC).
43 Binny Ltd v S Sankaran (2001) 1 LLN 490 (Mad) (DB), per Sirpurkar J.
44 NTC (WBAB&O) Ltd v. Anjan K Saha, AIR 2004 SC 4255 : (2004) 3 LLJ 757 SC : 2004 (7) SCALE 128 : (2004) 7 SCC 581, per
Dharmadhikari J.
45 Div. Mgr, Plantation, A & N Islands v Munnu Barrick, AIR 2005 SC 1158 [LNIND 2004 SC 1258]: (2005) 1 LLJ 557 [LNIND
2004 SC 1258] SC : 2004 (10) SCALE 513 [LNIND 2004 SC 1258] : (2005) 2 SCC 237, per Sinha J.
46 Haryana State Financial Corporation v KC Ahuja AIR 2009 SC (Supp) 909, per CK Thakker J.
47 Chairman, Ganga Yamuna Grameen Bank v Devi Sahai, AIR 2009 SC 2126 [LNIND 2009 SC 317]: (2009) 2 LLJ 508 [LNIND
2009 SC 317] SC : 2009 (3) SCALE 80 [LNIND 2009 SC 317] : (2009) 11 SCC 266 [LNIND 2009 SC 317], per SB Sinha J.

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48 Sarva UP Gramin Bank v Manoj Kumar Sinha AIR 2010 SC 2491 [LNIND 2010 SC 161]: (2010) 2 LLJ 641 [LNIND 2010 SC
161] SC : 2010 (2) SCALE 255 [LNIND 2010 SC 161] : (2010) 3 SCC 556 [LNIND 2010 SC 161], per SS Nijjar J.
49 For the details of ‘censure’, GIM affairs memo no 39/21/56-Ests (A) dated 13 December 1996.
50 Shankara Pillai v Kerala State (1960) 1 LLJ 621 (Ker), per Vellu Pillai J.
51 India Marine Service Pvt Ltd v Workmen (1963) 1 LLJ 122 [LNIND 1962 SC 260] (SC), per Mudholkar J.
52 Shri Gopal Paper Mills Ltd v IT (1963) 1 LLJ 226 (Punj) (DB), per Grover J.
53 Rasiklal Nanalal Joshi v Bank of Baroda (1956) 1 LLJ 103 (LAT).
54 Workmen of SBI v State Bank of India (1984) 2 LLJ 239 -40 (Mad) (DB), per KBN Singh CJ.
55 National Engineering Employees’ Union v RN Kulkarni (1968) 2 LLJ 82 (Born) (DB), per Patel J.
56 Ram Naresh Kumar v State of West Bengal (1958) 1 LLJ 567 [LNIND 1957 CAL 138], 571 (Cal) (DB), per Guha Ray J.
57 Balvantrai Ratilal Patel v State of Maharashtra (1968) 2 LLJ 700 [LNIND 1967 SC 369], 703 (SC), per Ramaswami J.
58 B Kalyanasundaram v LC (1966) 2 LLJ 430 [LNIND 1965 MAD 89] (Mad) : AIR 1966 Mad 87 [LNIND 1965 MAD 89], per
Srinivasan J.
59 Hemant Kumar Bhattacharjee v SN Mukherjee AIR 1954 Cal 340 [LNIND 1953 CAL 153] (DB), per Chakravartti CJ.
60 Sudhir Rajan Haldar v State of West Bengal (1961) 2 LLJ 283 [LNIND 1961 CAL 46] (Cal) (DB), per Banerjee J.
61 Nepal Chandra Guchait v District Magistrate (1966) 2 LLJ 71 [LNIND 1965 CAL 199] (Cal) : AIR 1966 Cal 485 [LNIND 1965
CAL 199], per BN Banerjee J.
62 Calcutta Chemical Co Ltd v DK Barman 1969 Lab IC 1498, 1506 (Pat) (DB), per Untwalia J.
63 Swaransing Laxmansing v Bombay Garage (Ahmedabad) Ltd (1961) 2 LLJ 40 (Guj) (DB), per Desai CJ.
64 Moti Ram Deka v GM, North East Frontier Rly (1964) 2 LLJ 467 [LNIND 1963 SC 282], 493 (SC), per Gajendragadkar J.
65 Laws v London Chronicle Ltd [1959] 1 WLR 698,701, per Lord MR Evershed.
66 Jupiter General Insurance Co Ltd v Shroff [1973] 3 All ER 67, 73 (PC), per Lord Maugham
67 Pepper v Webb [1969] 1 WLR 514, per Harman LJ.
68 Jupiter General Insurance Co Ltd v Shroff [1973] 3 All ER 67, 73 (PC), per Lord Maugham.
69 WM Agnani v Badri Das (1963) 1 LLJ 684 [LNIND 1963 SC 74] (SC), per Gajendragadkar J.
70 Lalla Ram v Mgmt of DCM Chemical Works 1978 Lab IC 716, 720 (SC), per Jaswant Singh J.
71 Savage v British India Steam Navigation Co [1930] 46 TLR 294.
72 Laws v London Chronicle Ltd [1959] 1 WLR 698, per Lord Evershed MR.
73 Vasanti M Shah v All India HFMC Society Ltd (1986) 1 LLJ 69, 76 (Guj) (DB), per Majmudar J.
74 Individual Employment Law—An Introduction—by BA Hepple and Paul O’Higgins [1971], P 119-21.
75 Co-op Central Bank Ltd v LC 1978 Lab IC 1699, 1702 (AP) (DB), per Lakshmaiah J. J.
76 Mgmt of Mysore Elec. Industries Ltd v Kadiah 1979 Lab IC (NOC) 31 (Kant), per Rarna Jois J.
77 Workmen of Containers and Closures Ltd v First LC (1962) 1 LLJ 471 (Cal), per BN Banerjee J.
78 Harbanslal Malhotra and Sons Pvt Ltd v State of West Bengal (1964) 2 LLJ 342 (Cal), per BN Banerjee J.
79 Calcutta Chemical Co Ltd v DK Barman 1969 Lab IC 1498, 1511 (Pat) (DB), per Untwalia J.
80 RM Parmar v Gujarat Electricity Board 1982 Lab IC 1031 [LNIND 1981 GUJ 125], 1034-35 (Guj) (DB), per Thakkar CJ.
81 Gujarat SRTC v Jamnadas Becharbhai 1983 Lab IC 1349 [LNIND 1982 GUJ 102], 1352 (Guj) (DB), per Thakkar CJ.
82 Municipal Corpn of Ahmedabad v Hussainmiya Chandmiya 1987 Lab IC 1564 [LNIND 1986 GUJ 40] (Guj) (DB), per Ahmadi J.
83 T Seeralan v Presiding Officer, Second Addl LC (1986) 2 LLJ 85, 86 (Mad), per Sathiadev J.

End of Document

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER IV Procedure, Powers and Duties of Authorities

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER IV Procedure, Powers and Duties of Authorities

[S. 11A. Power of Labour Courts, Tribunals and National Tribunals to give
Appropriate Relief in case of Discharge or Dismissal of Workmen.(

(ii) Disciplinary Authority

The power to discharge or dismiss a workman from service, vests in the person who has the power to appoint workmen as
a measure of disciplinary punishment. In other words, such person is the competent disciplinary authority in that behalf but
the general principle that the service of a workman can be terminated only by the person who is the appointing authority
does not mean that the same person should have been in existence on the date of termination of service. What has to be
seen is as to who is the appointing authority for the particular post in question at the relevant time.84 An order passed by an
authority superior to the appointing authority, in view of the fact that the person who was the appointing authority was a
witness in the inquiry proceedings, would be perfectly valid.85 For instance, in Balbir Chand, the Supreme Court rejected
the contention of the employee that the order of dismissal passed against him by the managing director who was the
highest authority in the hierarchy of the corporation was invalid because such order could only be passed by the zonal
manager, who was the appointing and disciplinary authority. The court observed: ‘It is now a well-settled legal position
that an authority lower than the appointing authority cannot take any decision in the matter of disciplinary action. But there
is no prohibition in law that the higher authority should not take decision or impose the penalty as the primary authority in
the matter of disciplinary action.’ It is relevant to note that though an inquiry officer need not necessarily be an officer of
the company and it is permissible even to appoint an outsider to act as an inquiry officer, disciplinary authority can only be
vested in an officer of the employer company or corporation. The disciplinary authority to impose punishment on a
delinquent workman cannot be conferred on an outsider because an outsider cannot be vested with the power to appoint
employees of the company.86 In Heckett Engg, Jaswant Singh J observed:

...It is now firmly established that power to terminate service is a necessary adjunct of the power of appointment and is exercised as
an incident to or consequence of that power...The power to terminate flows naturally and as a necessary consequence from the
power to create. In other words, it is a necessary adjunct of the power of appointment and is exercised as incident to or
consequence of that power; the authority to call such officer into being necessarily implies the authority to terminate his
functions.87

In PS Malavenkar, the draft order terminating the services of the workman was duly approved and initialed by the
competent authority, viz, the general manager, but the order was communicated to the workman by his executive assistant.
The court held that the order was, in fact and in reality, made by the general manager and that the fact that a written
document bears initials only instead of full signatures of the competent authority does not make any significant difference’.
Nor does affixing signature by initialing a document or order detract from its authority unless the law or the rule
specifically require full signatures to be affixed there to make it authentic.88 In Awadesh Kumar, the order of discharge of a
workman was not signed by the manager who was the competent authority under the Standing Orders of the company but
it was signed by two persons one of whom was authorised by the manager while the other was the secretary of the
company. The Supreme Court upheld the validity of the order as the former was competent to sign under the Standing
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

Orders white the latter was superior to the manager who was the competent authority under the Standing Orders. The
exigencies of complex modern industrial organisation of large scale undertakings, particularly where the units of such
undertakings are spread over different locations, make it necessary to delegate the powers to terminate the service of a
workman by officers other than the appointing authority as well.89 The officers to whom such power is delegated will be
competent to impose the punishment of discharge or dismissal on a delinquent workman, provided that such delegation is
not ultra vires of the articles of association and is properly and validly made but the person to whom the power has been
delegated, must himself, exercise the power and he cannot sub-delegate such power unless sub-delegation is authorised by
express words or necessary implication as delegatus potest non delegare.90

In Sambhu Prasad Srivastava, the court upheld the dismissal of the workman by the resident engineer to whom the power
to dismiss any employee from service was delegated by a special power of attorney. On the other hand, a person or
authority to whom the power has not been validly delegated will not be competent to dismiss a workman.91 For instance, in
Rashid Ahmad, the power to appoint employees vested in the directors or ‘an officer authorised by the board of directors’.
Therefore, such persons alone had the power to terminate the services of the employees. In this case, the services of an
employee were terminated by the regional manager who was not so authorised by the board. Hence, termination of service
of the employee was held to be invalid.92 In Hindustan Brown Boveri, the dismissal of the workman, by the works manager
in the absence of proof of delegation of power to him to impose the punishment, was held to be invalid.93 Likewise, in
South Central Rly ECCS, an order of dismissal passed by the secretary of a co-operative society in whose favour there was
no delegation by the managing committee of the society who was the punishing authority, was held to be invalid.94 There
is a marked distinction between initiating the disciplinary proceedings and imposing the disciplinary punishment It is a
well settled legal position that it is not necessary that disciplinary proceedings must only be initiated by the authority
competent to impose the punishment. The proceedings can be initiated even by any authority superior to the appointing
authority.1 In Steel Authority of India, the personnel manager was appointed the disciplinary authority as required by the
discipline and appeal rules of the steel authority but the charges were framed by the chief medical officer who was not
authorised by the rules to frame the charges or to constitute the inquiry committee. The disciplinary proceedings were held
to be invalid.2 However, in Nagiah, the chargesheet was signed by a person who was not authorised to sign. The Karnataka
High Court held that the inquiry based on the chargesheet which resulted in the dismissal of the workman was not vitiated
because the workman had participated in the inquiry proceedings and he had not suffered any prejudice in any manner.3
The fact that the order is not made by the competent authority must be pleaded and proved before the tribunal. Even if the
point has been taken in the pleadings, if it is not proved by adducing relevant evidence, the impugned order inflicting the
punishment of dismissal will be vulnerable. Such a point cannot be raised later before the writ court.4 A person who is the
disciplinary authority for imposing punishment can himself hold the domestic inquiry and then impose the punishment.
There is no bar against that in the industrial law. Nor will the order of punishment inflicted upon an employee by the
competent officer become vitiated by the mere fact that he subsequently appeared before the industrial tribunal to
substantiate the action taken by him on the basis of the report of the inquiry committee of which he was a member.5

(iii) Order of Punishment

The disciplinary action commences with the chargesheet and culminates in the order of punishment. The findings of the
inquiry officer are not binding on the punishing authority which has to finally decide whether the materials at the inquiry
have established the charges and if so, what punishment should be awarded.6 It is open to the tribunal to come to the
different conclusion from the conclusion arrived at by the inquiry officer. If it comes to the conclusion that the charges are
not proved, the foundation for the punishment is knocked off but if after taking the materials into account before it, the
punishing authority comes to the conclusion that the charge against the delinquent is proved before the inquiry officer, that
will be the foundation for the punishment.7 The order of discharge or dismissal must clearly state the grounds for dismissal
of the workman and it would not be proper to apply the common law principle that the ground for dismissal need not be
stated in the order whereby the workman is dismissed from service.8 The requirement of a fair and valid order imposing the
punishment are discussed under the following sub-heads:

(a) Bona Fides

In industrial jurisprudence, the requirement of acting bona fide permeates the entire process of disciplinary proceedings. In
other words, in all stages right from initiation of the disciplinary proceedings by serving the chargesheet on the delinquent
workman through disciplinary inquiry to making the order imposing the punishment, the action of the management must
be fair and bona fide. Particularly, the requirement of acting fairly and bona fide while imposing the punishment is
accentuated. Lack of bona fide vitiates most solemn transactions.9 It is unmistakably clear from the judicial dicta that if the
disciplinary action is commenced mala fide or is a measure of victimisation or unfair labour practice, it will be liable to be
interfered with by industrial adjudication. Violation of the rules of natural justice in conducting the inquiry proceedings
and perversity in recording the findings are other variants of mala fides. ‘In determining the misconduct, the management
must have facts to base its conclusion on and it must act in good faith without caprice or discrimination and without motive

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or vindictiveness, intimidation or resorting to unfair labour practice and there must be no infraction of the accepted rules of
natural justice’.10 In order to avoid the charge of vindictiveness, justice, equity and fair play demand that the punishment
must always be commensurate with the gravity of the offence charged.11 An action of the management of which the
ostensible purpose is not the real purpose and which, though purporting to carry out one object is, in fact, intended to
achieve another, would be lacking in bona fides and would be treated malafide.12 The action of the management has to be
viewed in the context of the entire background in which the action was taken, the circumstances preceding it, attending on
it and those that follow it. For instance, where by a seemingly innocuous order made by the management, a workman is
sought to be punished for the charges of misconduct, it would be open to the tribunal, as indeed necessary for it, to
examine not only the foundation of the order but the real motivation of it. If the action is found to have been conceived
with the intention to victimise the workman on account of his trade union activities or otherwise by way of unfair labour
practice, such action would be mala fide and shall be liable to be struck down even though it could otherwise be justified
on the basis of the contract of service and the rules of service or by any other material in support of the charge.13Likewise,
where an employer discriminates in the matter of awarding the punishment to persons who have been charged and found
guilty of the same act of misconduct, it would lead to an inference of mala fides.14 An inference of mala fides is also
permissible where, it appears that the management had already made up its mind to punish the workman before holding the
inquiry, and the matter stood prejudged.15 A mala fide action cannot be validated merely because it may be justified either
with reference to the contract of service or on the basis of the material relevant to the charge of misconduct.16

In every case, after ascertaining that the principles of natural justice have not been violated, it would be proper for the
tribunal to address itself to the question ‘whether on the materials on which the inquiry officer has reached the conclusion
adverse to the workmen, a reasonable person could have reached such a conclusion’.17 The inference of lack of bona fides
cannot, however, be drawn from irrelevant and extraneous considerations.18 Inference of mala fide may, be drawn even
from the factum of unduly severe and harsh punishment in certain cases. For instance, where the punishment is shockingly
disproportionate to the misconduct or is such as no reasonable employer would impose under the circumstances, an
inference of mala fides may be permissible.19 The mere fact that some of the witnesses, who gave evidence at the domestic
inquiry were promoted subsequent to the inquiry, will not affect the bona fides of the inquiry as they might have been
promoted in the normal course at the relevant time even if no inquiry had been held.20 Thus, the initiation of the
disciplinary action, inquiry proceedings, report of the inquiry officer and the order of punishment, can all be challenged on
the grounds of perversity, mala fides, victimisation and unfair labour practice. However, these are all questions of fact. The
burden of establishing them is on the workman who makes these allegations, by adducing relevant evidence before the
tribunal as it may not always be possible to decide these questions by merely looking into the records of the inquiry.21 If
there is no such pleading, no evidence to prove it is permissible. Even if there is evidence in support of it, it cannot be
examined.22 An allegation of mala fide, such as unfair labour practice, victimisation or discrimination etc have, therefore,
to be specifically pleaded and proved. Hence, a finding of mala fide, victimisation, unfair labour practice or discrimination
in the absence of pleadings or proof shall be perverse or beyond the jurisdiction of the tribunal.23 The question whether a
proper inquiry has been held or not involves a further inquiry into the questions such as: whether the workman has been
duly notified of the charges; whether he has been given opportunity to submit his explanation; whether he had opportunity
to cross-examine witnesses examined on behalf of the management and whether he could lead evidence in his defence.
Though these questions may properly be considered by examining the record of the inquiry relied on by the management,
it may not always be possible to decide the question whether the inquiry has been vitiated on account of mala fides, unfair
labour practice or victimisation by merely looking into the records of the inquiry. In order to establish these facts,
therefore, a workman has to lead evidence before the tribunal for satisfying it that existence of the vitiating circumstances
was not known to him at the time of the inquiry or even if he knew he was not able to establish them at the inquiry for
sufficient reasons.24

Inference of mala fides, however, cannot be lightly drawn. The mere fact that the workman takes part in the union
activities or is an active office bearer thereof, would, per se, not lead to the inference of mala fides or victimisation.25 If the
action is a measure of victimisation or unfair labour practice, passed with an ulterior motive or is capricious and
unreasonable, inference of mala fides will be permissible. In certain cases, a single allegation, if established will be so
serious as to lead to the inference of mala fides but in certain cases, each individual allegation treated separately may not
lead to the inference of mala fide. When all allegations are taken together, the inference drawn from established facts may
lead to the conclusion that the impugned order is passed mala fide, out of personal ill-will or malice.26 However, to find the
plea of mala fides, the tribunal must be in a position to hold positively that the impugned order could have only been made
with dishonest motive and it is not sufficient to find that it was probably so.27 For instance, where the charges of
misconduct are based on objective facts and will have to be established by evidence mainly documentary and there is little
scope of any personal relationship among the concerned workmen and officials as affecting the establishment of such
charges, and the case of malafides is not based on any specific facts or circumstances worth consideration, it would not be
possible to hold that the personal relationship of the superior officials with the workmen can have any bearing on initiation
and conduct of the domestic inquiry.28 Likewise, where an employer terminates the service of a workman who shows
consistent indifference to work and discipline and gets annoyed when he is asked to give an explanation, the termination of

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service cannot be said to be mala fide. The fact that he happens to be an office-bearer of the union will make no
difference.29

(b) Quasi-judicial Nature

The disciplinary proceedings against a workman are quasi-judicial in nature. It is, therefore essential that before imposing
the penalty on the delinquent workman, the disciplinary authority must apply its mind to the record of the proceedings
including the report of the inquiry officer and then modulate the quantum of punishment. The punishment must be
commensurate with the nature and gravity of the misconduct proved against him. Failure to take these materials into
account before awarding the punishment may be fatal to the order of punishment. The order of punishment may be
vulnerable to judicial review, if it appears that the order has been made by the punishing authority without applying its
mind or has been made at the dictates of somebody else but the mere fact that before imposing the punishment, the
punishing authority consults the inquiry officer would not vitiate the order of punishment.30 For instance, in Murari Lal,
the Supreme Court upheld the validity of the order of dismissal by the works manager (punishing authority) which was set
aside by the tribunal on the ground that he had not applied his mind to the facts before ordering the dismissal and he was
simply following the suggestions of the director. The Supreme Court found that, the order was passed by the works
manager. The mere fact that he had referred to the opinion of the director which was the same as his own opinion, did not
mean that he had not formed his own opinion. No exception could be taken to the reference to the opinion of the director.31

In Kalindi, the workmen concerned were chargesheeted for four different acts of misconduct. Each one of them was found
guilty of the first three charges. The inquiry officer did not record any findings as regards the fourth charge but instead
found the workmen guilty of a further misconduct not mentioned in the chargesheet, viz, ‘behaving in a riotous and
disorderly manner by shouting slogans on the shop-floor’. From the record, however, it was dear that the order of dismissal
was based only on the finding that they were guilty of the acts of misconduct alleged in the first three charges. It was,
therefore, held that the act of misconduct not mentioned in the chargesheet, was mentioned as one of the items on which
the order of dismissal was based. This did not affect the validity of the order because the manager would have made the
order of dismissal even leaving the act of misconduct not mentioned in the charge-sheet. In other words, when there is
evidence to show that the punishing authority considered charges proved against the concerned workman as serious
enough to merit the punishment of dismissal, mere mention of the fourth charge, which was not proved in the formal order
of dismissal, would not affect the validity of the dismissal. There was no lack of application of mind.32

In Calcutta Jute, the court observed that an order of dismissal may be rightly sustained if it is based on a finding of a
charge which the workmen concerned had the opportunity of meeting, even though in the course of inquiry other incidental
matters had crept in. Too legalistic a view of minor matters cannot vitiate the order of punishment.33 On the other hand, in
Sur Enamel, the charge against the workman concerned was that he had deliberately caused damage to raw materials in the
course of his work. But the order of dismissal, referred entirely to a different misconduct with respect to which no charge
had been framed, namely, ‘insubordination and disobedience of orders’. The said order was held to be invalid for want of
application of mind to the record.34 In Rashid Ahmad, a conductor was dismissed from service on the basis of two charges,
i.e., (i) charging excess fare from the passengers and tearing of the allotment chart; and (ii) misbehaviour with a co-worker.
The former was the major charge which was not proved while the latter which was the minor one, was proved. The
tribunal passed an order directing reinstament of the workman. In appeal, the Allahabad High Court upheld the order of the
tribunal.35

In a case, where the employer withdraws the order of dismissal on account of a technical defect, which vitiated only the
final order and not the earlier proceedings, then the earlier proceedings upto the stage immediately before the order of
dismissal will not be invalid. In other words, the proceedings upto the stage at which the employer reaches the conclusion
that the workman should be dismissed, will be thoroughly competent and there will be no infirmity in the proceedings. The
withdrawal or the cancellation of the order of dismissal will not mean withdrawal or cancellation of the charges.36 It is in
the sole discretion of the employer to accept an apology from a dismissed workman and reinstate him, for that reason any
discrimination or unfair labour practice cannot be presumed.37 In Dattatray Trimbak Kulkarni, a certain amount of cash
was found missing which the cashier reimbursed but the management proceeded departmentally for misappropriation
against the cashier and the branch manager, and after holding an inquiry, dismissed the cashier while allowing the branch
manager to retire. In a writ petition filed by the cashier on the ground of discrimination, the Bombay High Court held that
the fact of reimbursement cannot oust the right of the bank to take disciplinary action against the delinquent. It may be that
because of reimbursement, the bank did not criminally prosecute him. The action of the bank in dismissing the cashier
while allowing the manager to retire was justified because the past record of the cashier was not without blemish while
there was no such blemish on the conduct of the manager.38

(c) Reasons

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The order imposing the punishment of discharge or dismissal must clearly state the reasons for imposing the punishment
because this order has to undergo the scrutiny of the adjudicatory tribunals and the higher courts in judicial review.39 In
Siemens Engg, speaking for the Supreme Court, Bhagwati J said: ‘The rules requiring reasons to be given in support of an
order is like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasi-
judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not
satisfy the requirement of law.’40 In this case, the court was dealing with imposition of custom duty on certain goods under
the Indian Customs Act. It was not a case of dismissal. However, in KL Tripathi, dealing with a case of dismissal of an
industrial employee, the court distinguished Siemens on facts. The court noticed that though the reasons for the order had
not been stated expressly, in the nature of the charges, and in the explanation offered in the response of the employee to the
show-cause notice, the reasons appeared to be implicit. In the absence of any denial by the employee of the charges
levelled against him, and the admission on the factual basis of the charges by him, the court found that the disciplinary
authority had considered the explanation offered by him, in imposing the penalty of dismissal, and held that the conclusion
of the disciplinary authority was not unreasonable or one which no reasonable man could make.41

In Ram Kumar, the court further pointed out that where the punishing authority agrees with the findings of the inquiry
officer and accepts the reasons given by him in respect of such findings, it is not necessary for it again to discuss the
evidence for coming to the same conclusion as arrived at by the inquiry officer and give its own reasons for coming to the
same conclusion. When the punishing authority accepts the findings of the inquiry officer and the reasons giver, by him in
his order, the question of non-compliance with the principles of natural justice would not arise and it would not also be
correct to say that the order was not a speaking order.42 In SSKoshal, the inquiry officer found that out of the six charges
levelled against the delinquent employee, charge nos 1 and 5 were proved while charge nos 2, 3 and 6 were not proved.
But the disciplinary authority in its final order imposing the punishment, agreed that the finding of the inquiry officer in
respect of charge nos 1 and 5 was proved and charge nos 3 and 4 not proved though he disagreed with the finding with
respect to charges nos 2 and 6 and held that charge no 2 was fully proved while charge no 6 was partly proved. The
Madhya Pradesh High Court held that since the disciplinary authority disagreed with the findings of the inquiry officer in
respect of certain charges, it ought to have recorded and communicated the reasons for such disagreement to the delinquent
employee. That, having not been done, the order of punishment was vitiated for violation of principles of natural justice.43

In K Ashoka, a single judge of the Karnataka High Court held that if the disciplinary authority disagreed with the findings
of the enquiry officer that the delinquent was not found guilty, it would be incumbent upon him to serve a show-cause
notice to the delinquent and give him an opportunity of being heard, before imposing any punishment or instituting a fresh
enquiry.44 In Kunj Bihari Misra, the Supreme Court held that where the disciplinary authority disagreed with the findings
of the enquiry officer, he should record his tentative reasons for such disagreement and convey the same to the delinquent
employee, afford an opportunity to represent before him and then record its findings.45 In M Raja Rao, the Supreme Court
held that it was not necessary for the disciplinary authority to give reasons for agreeing with the conclusions of the enquiry
officer. The mere expression ‘other relevant factors’ used in the order of the disciplinary authority would not necessarily
indicate that he had considered other materials than those produced before the enquiry officer, which might require notice
thereof being given to the delinquent.46 In Anil Gilurker, the facts were: the employee who was a Branch Manager of a
Grammen Bank was charge-sheeted and suspended pending enquiry for sanctioning loans to a large number of brick-
manufacturing units but not disbursing the entire loan amount to the borrowers, and for misappropriating part of the loan
amount. The enquiry officer submitted his report holding that the charge of financial corruption against him was not
proved. The disciplinary authority disagreed with the findings of the enquiry officer, and proposed to impose the
punishment of removal of the appellant along with forfeiture of the contribution of the Bank to the Provident Fund of the
appellant under the Staff Regulations. A notice was issued to him to show cause against the proposed punishment of
dismissal to which the Manager submitted his reply. Eventually he was dismissed by the disciplinary authority. A single
judge of the High Court had set aside the dismissal on the ground that the disciplinary authority did not communicate his
disagreement with the report of enquiry officer to the charge-sheeted employee and directed the Bank to reinstate the
employee with continuity of service and also pay Rs. 1.5 lakhs to him in lieu of arrears of salary. The said order was
quashed by a Division Bench. In appeal, the Supreme Court, speaking through Patnaik J, while setting aside the order of
the Division Bench and restoring the order passed by the single judge, observed that an enquiry should be conducted in
strict adherence to the statutory provisions and principles of natural justice and the charges should be specific, definite and
giving details of the incident which formed the basis of charges and that no enquiry could be sustained on vague charges.47
In Avinash Bhosale, the brief facts were: some 12 crores fraudulent transactions came to light in the branch of which the
employee was the Branch Manager, with the result he was relieved from the branch presumably for his involvement in the
said transactions. The employee, on his own, filed a complaint with police requesting them to identify the culprits. The
AGM contended that the Branch Manager was not authorised to make a complaint to police, when he himself was involved
in the questionable transactions. He was suspended, charge-sheeted and eventually dismissed. In a criminal case filed
against him, he was acquitted of criminal conspiracy u/s. 120B thereof and also of culpability. The case took several
complex turns and twists before reaching Supreme Court. Dismissing the petition, Nijjar J (for self and Gokhale J) held:

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.. . the failure of the prosecution in producing the necessary evidence before the trial court cannot have any adverse impact on the
evidentiary value of the material produced by the Bank before the Inquiry Officer in the departmental proceedings.. .. It is a settled
proposition of law that the findings of Inquiry Officer cannot be nullified so long as there is some relevant evidence in support of
the conclusions recorded by the Inquiry Officer. In the present case, all the relevant documents were produced in the Inquiry to
establish the charges levelled against the appellant. It is a matter of record that the appellant did not doubt the authenticity of the
documents produced by the Bank. (para 46). .. The findings recorded by the Enquiry Officer cannot be said to be based on no
evidence. In such circumstances, the appellant cannot take any advantage of the findings of innocence recorded by the criminal
court. The ‘clean chit’ given by the learned Magistrate was influenced by the failure of the prosecution to lead the necessary
evidence. No advantage of the same can be taken by the appellant in the departmental proceedings. (para 47). .. The extracts
reproduced above would clearly indicate that the Disciplinary Authority was alive to all the submissions made by the appellant.
The Disciplinary Authority had taken into consideration all the relevant material and only then concluded that the charges have
been duly proved against the appellant. Furthermore, it is a matter of record that the appellant was duly supplied a copy of the
Inquiry Report and he had submitted detailed objections to the same. These objections were placed before the Disciplinary
Authority together with the Inquiry Report. Therefore, the appellant cannot possibly claim that there has been a breach of rule of
natural justice. (para 48). .. we find no merit in this appeal and the same is hereby dismissed.48 (para 50).

In SP Malhotra, the facts were more or less similar to those of Anil Gilurkar (supra), which briefly were: the employee
was charge-sheeted for certain acts of misconduct, which included tampering with records, doing unauthorised business
against the interests of the bank, misutilising his official position etc. An enquiry was conducted into the charges. The
enquiry officer exonerated the delinquent employee of all the charges duly supported by sufficient reasons on every
charge. The disciplinary authority partly agreed with the findings on two of the charges, while disagreeing therewith in
respect of the other two charges, and imposed the punishment of dismissal. The Appellate Authority, while concurring
with the enquiry officer on two of the four charges, dismissed the appeal. A single judge of Punjab and Haryana High
Court had set aside the dismissal on the ground that the disciplinary authority, having disagreed with the enquiry officer,
did not communicate the reasons for the said disagreement to the employee. However, a Division Bench held that the
question of communicating the reasons for disagreement did not arise as, in the wake of the decision in Karunakar, there
was no need to issue a show-cause notice before imposing the punishment of dismissal and, in this view of the matter, the
dismissal was valid. Setting aside the order of the Division Bench and restoring the order passed by the learned single
judge, the Supreme Court, comprising BS Chauhan and SA Bobde JJ, held:

In fact, not furnishing the copy of the recorded reasons for disagreement from the enquiry report itself causes the prejudice to the
delinquent. .. The learned single Judge has concluded the case observing as under:

The whole process that resulted in dismissal of the petitioner is flawed from his inception and the order of dismissal cannot
be sustained. I am examining this case after nearly 23 years after its institution and the petitioner has also attained the age of
superannuation. The issue of reinstatement or giving him the benefit of his wages for during the time when he did not serve
will not be appropriate. The impugned orders of dismissal are set aside and the petitioner shall be taken to have retired on the
date when he would have superannuated and all the terminal benefits shall be worked out and paid to him in 12 weeks on
such basis. There shall be, however, no direction for payment of any salary for the period when he did not work.

We do not see any reason to approve the impugned judgment rendered by the Division Bench. Thus, in view of the above, the
appeal is allowed. The judgment and order of the Division Bench is set aside and that of the learned single Judge is restored.49

(d) Past Record

The Service Rules, Standing Orders or the Shops and Establishments Act applicable to various establishments and
undertakings provide guidelines as to what factors should be taken into consideration by the punishing authority before
imposing the punishment. Such statutory provisions generally provide that while considering the question of imposing
punishment on the delinquent, the employer shall take into account the gravity of the misconduct, the previous record of
the employee, if any, and any other extenuating or aggravating circumstances that may exist.50 In imposing the
punishment, such requirements have necessarily to be complied with. In Rama Krishna Steel, the relevant Standing Order
provided: ‘In awarding punishment under the Standing Order, the employer shall take into account the gravity of the
misconduct, the previous record, if any, of the workmen and any other extenuating or aggravating circumstances that may
exist’. A single judge of the Madras High Court held that this does not mean that the term ‘previous record’ in this rule
would mean only punishment awarded to the delinquent previously.51 In other words, apart from any earlier punishment
awarded to the delinquent, the past record may indicate his conduct or any other facts or circumstances which may have an

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extenuating or aggravating effect on the question of punishment. If the order of dismissal based on the charges proved
against the delinquent in the domestic inquiry are sufficiently grave to warrant the punishment of dismissal or discharge,
the fact that the past record of the workman was clean would be of no consequence, but, on the other hand, if the punishing
authority relies on the past record of the delinquent, for imposing punishment, it is incumbent on it to give him an
opportunity to offer his explanation regarding such record. Failure to offer such opportunity will vitiate the resulting
action.52 In Madras Fertilizers, the past record of the service of the workman had seriously influenced the mind of the
punishing authority on the question of punishment but he was denied opportunity to offer his explanation. The Madras
High Court held that the order was vitiated. Speaking for the court, Nainar Sundaram J said:

...the vitiating factor was denial of opportunity to the employee to explain the past record of service at the appropriate time. That
has nullified the resultant action. Thereafter, the matter has to be viewed untainted by the past record of service. This vitiating
factor will not stand mollified by affording an opportunity at the subsequent stage.53

In India Marine Service, the workman was charge-sheeted for ‘insubordination’ which was proved at the domestic inquiry
held for the purpose but the order of dismissal recited some other charges also which were not inquired into, and it also
recited that the past record of service of the workman was against him. Though the order of dismissal referred to these
extraneous matters, from its text, as a whole, it was abundantly clear that the decision of the managing director (punishing
authority) to dismiss the workman was based only on the charge of ‘insubordination’. It was, therefore, held that from a
reference to the past record of the workman in the order of dismissal, it did not follow that it was the effective reason for
dismissing him. The managing director came to the conclusion that the service of the workman must be terminated on the
basis of the charge proved against him and the one sentence referring to the past record was meant only to give additional
weight to the decision already arrived at.54 In N Chinnaiah, the past conduct of the workman was not put in issue either
before the disciplinary authority or the labour court. It was only put into service as an ancillary issue to enable the labour
court to weigh the probabilities of the case while evaluating the quantum of punishment. However, the tribunal was solely
influenced by the past record of the delinquent and refused to grant any relief to him. A single judge of the Andhra Pradesh
High Court held that the tribunal failed to exercise its jurisdiction vested in it under s 11A.55

(e) Quantum of Punishment

It is established law, that imposing punishment for a proved act of misconduct is a matter for the punishing authority to
decide and normally it should not be interfered with by industrial tribunals. The tribunal is not required to consider the
propriety or adequacy of the punishment. In Hind Construction, Hidayatullah J held:

But where the punishment is shockingly disproportionate, regard being had to the particular conduct and the past record, or is such
as no reasonable employer would ever impose in like circumstances, the tribunal may treat the imposition of such punishment as
itself showing victimization or unfair labour practice.56

In FICCI, the employer made a mountain out of a mole-hill and had blown a trivial matter into one involving loss of
prestige and reputation. In this situation, the punishment was held to be unwarranted.57 But in Prabhakar Chaturvedi, the
court held that the punishment of dismissal for the misconduct of misappropriation of an amount of about Rs 21,000 for a
couple of months was not unjustified or grossly disproportionate to the misconduct proved against the delinquent.58 In Ram
Kishan, the delinquent employee was dismissed from service for using abusive language against a superior officer. On the
facts and in the circumstances of the case, the court held that the punishment was harsh and disproportionate to the gravity
of the charge imputed to the delinquent. Speaking for the court, K Ramaswamy J, observed:

When abusive language is used by anybody against a superior, it must be understood in the environment in which that person is
situated and the circumstances surrounding the event that led to the use of abusive language. No straight-jacket formula could be
evolved in adjudging whether the abusive language in the given circumstances would warrant dismissal from service. Each case
has to be considered on its own facts.59

In the same strain, in BM Patil, a single-judge of the Karnataka High Court observed that in the exercise of discretion, the
disciplinary authority should not act like a robot and justice should be moulded with humanism and understanding. It
should assess each case on its own merit and each set of facts should be decided with reference to the evidence regarding
the allegations which should be the basis of the decision. The past conduct of the worker may be a ground for assuming
that he might have a propensity to commit the misconduct and to assess the quantum of punishment to be imposed. The
fact that the delinquent had acted in a particular manner on a past occasion does not mean that in the present case also he

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has acted in the like manner. In this case, a conductor of a bus was dismissed from service for causing a revenue loss of 50
paise to the employer by the irregular sale of tickets. It was held that the punishment was too harsh and disproportionate to
the act of misconduct.60An industrial tribunal has the discretion to consider the question as to whether the punishment
imposed by the employer is shockingly disproportionate to the act of misconduct proved against the delinquent. In the
circumstances of this case, the labour court was justified in taking a lenient view and setting aside the order of dismissal
and giving direction for reinstatement of the workman with a cut of 75 per cent of the wages upto the date of the award.61 It
is needless to say that the discretion has to be judicially exercised and the tribunal can interfere only when it is satisfied
that the punishment imposed by the management is highly disproportionate to the degree of the guilt of the workman.62 In
SBI, an employee of the bank was dismissed from service for misappropriating five rupees without taking into account his
blameless service for 17 years. A single judge of the Bombay High Court upheld the award of the tribunal substituting the
order of dismissal by an order of reversion of the employee to a lower post without backwages.63 On the other hand, in
Lakshmi Machine Works, the workman engaged in production of textiles spinning machinery was found sleeping behind
the cardboard-sheet spread on the floor. In the course of inquiry, his attitude was recalcitrant. The Madras High Court held
that sleeping during duty hours by itself might look like a minor misconduct but when viewed in association with a series
of other acts of misconduct committed by him in the past, the punishment of dismissal was not unjustified.64

(f) Communication of the Decision

The relationship of employer and employee can be effectively terminated ‘not merely by the decision of the employer to
terminate the employee’s service but by the communication of the said decision to the employee’,65 because the
punishment becomes effective only from the date when the order is received by the delinquent workman.66 Therefore, the
communication of the order is a necessity for effective termination of the service of a workman. In Kalyani, the order of
dismissal of the workman was made on 28 May 1960 and was communicated to him on 30 May 1960 which was taken to
be the date of dismissal.67 A single judge of the Kerala High Court in Kottayam DCMSU, held that the order of discharge
or dismissal does not take effect on the day it is prepared or the day on which it is signed. It takes effect when it leaves the
hands of the employer on its journey destined towards the employee and cannot be recalled by the employer.68

ADJUDICATION

Adjudicatory Jurisdiction

The labour appellate tribunal, in Buckingham and Carnatic,69 delineated the parameters of the tribunal’s jurisdiction to
interfere with the hitherto exclusive managerial right of taking disciplinary action against an industrial workman for the
first time. It set out four circumstances which would render the managerial action vulnerable, namely:

(i) where there is want of bona fides, or

(ii) when it is a case of victimisation or unfair labour practice or violation of the principles of natural justice, or

(iii) when there is a basic error of facts, or

(iv) when there has been a perverse finding on the materials.

This delineation was adopted by the Supreme Court, with slight modifications, in IISCO, where it authoritatively
pronounced that the power of the management to direct its own internal administration and discipline was not unlimited
and it was liable to be interfered with by industrial adjudication when a dispute arises ‘to see whether the termination of
service of a workman is justified and to give appropriate relief. Reverberating the voice of the labour appellate tribunal, the
Supreme Court said that industrial adjudication can interfere with the disciplinary action taken by the employer only:

(i) when there was want of good faith;

(ii) when there was victimisation or unfair labour practice;

(iii) when the management had been guilty of a basic error or violation of the principles of natural justice; or

(iv) when on the materials, the finding was completely baseless or perverse. This decision became classic for the justification
of tribunal interference with the disciplinary sanctions of discharge or dismissal imposed by industrial employers on
delinquent workmen. 70

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The postulates (i) and (ii) of Indian Iron & Steel Co, are addressed to the bona fides of the employer in initiating the action
and inflicting the punishment. In other words, the employer is required to act bona fide in initiating the disciplinary action
as well in inflicting the punishment. In initiating the action, the alleged act of misconduct should not be a ruse for
something else, such as the trade union activities of the workman or the employer’s dislike of the workman for some
personal reasons etc. Furthermore, the action should not be motivated by vindictiveness or ulterior purposes, so as to
smack of victimisation or unfair labour practice. Likewise, in the matter of inflicting punishment also the employer should
act fairly. If the punishment is so shockingly disproportionate to the act of misconduct as no reasonable man would ever
impose, that itself may lead to an inference of mala fides, victimisation or unfair labour practice. The postulates (iii) and
(iv) are addressed to domestic inquiry. In holding the inquiry, the inquiry officer must comply with the rules of natural
justice which means, the inquiry officer must be an unbiased person and he must give reasonable opportunity to both sides
of being heard. Furthermore, his findings should not be baseless or perverse, ie, such as a reasonable man, from the
materials on record, could never arrive at. Subsequent decisions of the Supreme Court,71 and High Courts,72 have only
elaborated and clarified some of the implications of this decision, without however, working out the details of its scope
with precision. In some cases, the Supreme Court observed that the question of victimisation or the management being
biased against a workman would not arise once it is held that the finding of misconduct alleged against the employee was
properly arrived at and the domestic inquiry was in no way vitiated.73 This is an over simplification of the matter. These
cases cannot be read to mean that when the inquiry has been held to be valid, the tribunal is barred from going into the
complaint of mala fides of the employer in the matter of initiating the disciplinary action and inflicting the punishment. in
Hind Construction, Hidayatullah J held that even if the inquiry is proper and valid, if the punishment is shockingly
disproportionate, the tribunal may treat the imposition of such punishment as itself showing victimisation or unfair labour
practice.74

In Ved Prakash Gupta, the court set aside the order of dismissal of the workman who was dismissed on the charge of
abusing a worker and an officer of the employer, with the observation that the punishment was shockingly
disproportionate, regard being had to the charge framed against him.75 The Andhra Pradesh High Court in Radhakrishna
Murthy, held that the punishment of dismissal for the misconduct of cheating the company by claiming medical benefit on
a false medical certificate for the treatment of his wife was not shockingly disproportionate to the misconduct.
Furthermore, the punishment neither amounted to victimisation nor unfair labour practice. Nor was it such as no
responsible employer would ever impose in the circumstances of the case.76 On the other hand, a single judge of the same
High Court in VK Durga, held that the punishment of removal of the workman from service for manipulating the entries in
the weighing register from where he did not gain any money, was unreasonable and disproportionately harsh.77 In
Nagendrappa, a bus conductor of the state road transport corporation was dismissed for failure to issue tickets to some
passengers resulting in a loss of Rs 35.10 to the corporation. On the facts and in the circumstances of the case, a single
judge of the Karnataka High Court held that the punishment was not proportionate to the act of misconduct and the labour
court was justified to direct reinstatement.78

The adjudicatory jurisdiction dealing with the disciplinary cases was confined merely to see whether the employer did not
act mala fide in the manner of initiating the action and inflicting the punishment, and the inquiry officer had not violated
the rules of natural justice and his findings were not baseless or perverse. In the absence of these infirmities, it was beyond
the reach of the tribunal to interfere with the managerial action. The questions, whether the material before the inquiry
officer was adequate or not or whether a particular witness, upon whom reliance was placed by the inquiry officer, should
have been believed or not, were for the consideration of the inquiry officer.79 In Ram Swarath Sinha, the labour appellate
tribunal recognised the right of the management to ask for permission to adduce evidence for the first time before the
tribunal to justify its action in a ‘no-inquiry’ case.80 Following this decision, the right of the employer to defend the action
not only on the basis of the domestic inquiry but also to justify the punishment of discharge or dismissal on merits by
adducing relevant evidence before the tribunal has been recognised by the Supreme Court as well. Consequently, the right
of the workman to plead all infirmities in the domestic inquiry, if one has been held to attack the order of dismissal on all
grounds available to him in law and on facts, has also been recognised.81 In Motipur Sugar, it was held that a case of
‘defective-inquiry’ stands on the same footing as ‘no inquiry’ and, in either case, the tribunal will have jurisdiction to go
into the merits of the case on the basis of the evidence adduced before it by the parties, but in such cases, the employer
would not have the benefit which he has in case of a valid domestic inquiry. Wanchoo J observed:

The entire matter would be open before the tribunal which will have jurisdiction, ‘to satisfy itself on the facts adduced before it by
the employer whether the discharge or dismissal was justified...if the inquiry is defective or no inquiry has been held...the entire
case would be open before the tribunal. The employer would have to justify on the facts as well that its order of discharge or
dismissal was proper ...and in either case the tribunal would have jurisdiction to go into the facts and the employer would have to
satisfy the tribunal that in fact, the order of discharge or dismissal was proper’.82

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In such cases, it is open to the tribunal to consider the merits of the dispute and come to its own conclusion on appreciation
of the evidence before it without having any regard for the view taken by the management in dismissing the workman.83 It
is irrelevant whether the workman withdrew from the inquiry or participated in it, the decision has to be on the appraisal of
evidence, and if it is found that the inquiry was not proper, the whole case would be open before the tribunal to decide for
itself, whether the charge of misconduct was proved and what punishment should be awarded.84 It is open to the employer
to rely upon the domestic inquiry conducted by him and satisfy the tribunal that there is no infirmity attached to the same
and he has also the further right to justify, on facts as well, that the order of dismissal or discharge was proper.85 However,
when the employer chooses to adduce evidence before the tribunal to justify his action, the workman will have the
opportunity to rebut such evidence. If the employer fails to avail himself of such an opportunity, it will be open to the
tribunal to make an appropriate award and the employer will, therefore, not be able to make the grievance on that score.86
In Bharat Sugar Mills, after holding that the domestic inquiry was invalid, the tribunal allowed the employer to adduce
evidence to justify its action. In appeal, the Supreme Court rejected the contention of the workman that once the tribunal
had held the domestic inquiry to be defective, it had no option but to set aside the order of dismissal and it could not allow
the employer to adduce evidence before it to justify his action. It would neither be just to the management nor fair to the
workman himself that the tribunal should refuse to take evidence and thereby drive the management to pass through the
gamut of holding an inquiry all over again and deprive the workman of the benefit of the tribunal itself being satisfied on
the evidence adduced before it that he was not guilty of the alleged misconduct.87 In Ritz Theatre, apart from defending its
action on the basis of the domestic inquiry, the management further adduced evidence to justify its action on merits as well
but without looking into the validity of the inquiry, the tribunal set aside the action of the management on the basis of the
evidence adduced before it. In appeal, the Supreme Court accepted the plea of the employer that the tribunal should have
first considered the validity of the domestic inquiry and only in case it came to the conclusion that the inquiry was
improper or invalid that it could have gone into the merits of the case on the basis of the evidence adduced before it.88

In RK Jain, it was held that, if the management defends its action solely on the basis that the domestic inquiry held by it is
proper and valid and if the tribunal holds against the management on that point, the management will fail. On the other
hand, if the management relies not only on the validity of the domestic inquiry, but also adduces evidence before the
tribunal justifying its action, it is open to the tribunal to accept the evidence adduced by the management. It is essentially a
matter for the management to decide about the stand that it proposes to take before the tribunal. It is the right of the
management to sustain its order by adducing independent evidence before the tribunal’ and it was ‘a right given to the
management and it is for the management to avail itself of the said opportunity.89 In Ludh Budh Singh, the court
emphasised that when no inquiry has been held by an employer or when the inquiry has been found to be defective, the
employer has got the right to adduce evidence before the tribunal justifying his action.90 In AVP(C) Ltd, a single judge of
the Kerala High Court held that where the workman contended that the conclusion reached by the inquiry officer was
perverse, it would not be open either for the management to ask for or for the tribunal to grant, opportunity to the employer
to supplement or improve the evidence adduced by him at the domestic inquiry.91 On the other hand, a single judge of the
Madras High Court in India FDS, took the view that the right of the management to adduce additional evidence is not
restricted to cases of no inquiry or defective inquiry alone but can as well be exercised even where the findings of the
inquiry officer are perverse.92 Between the two, the Madras High Court was right and Kerala High Court is clearly wrong.
The conclusions of domestic inquiry may be vitiated either for non-compliance of rules of natural justice or for perversity.
In any case, the inquiry will be vitiated. It is well settled that a vitiated inquiry is equated with no inquiry. The right of the
employer to adduce evidence in such a situation is well-recognised. The decision of the Kerala High Court, therefore, runs
counter to the ratio of the decisions of the Supreme Court in the undernoted cases.93

A question of procedural relevance which engaged the attention of the courts is “whether the tribunal could suo motu call
for the evidence of the employer on merits to justify the disciplinary action where the validity of the domestic inquiry is in
question or is it for the employer to ask for an opportunity to lead evidence? A further corollary to this question is if it is
for the employer to ask for such opportunity, at what stage of the proceedings before the tribunal is he to make the request?
A single judge of the Andhra Pradesh High Court, took the view that if the management or workman do not seek to adduce
any evidence or do not request the tribunal for an opportunity to lead evidence, the tribunal cannot compel the parties to
lead evidence. It is not the duty of the tribunal to compel the parties before it to adduce evidence. The only duty that it has,
is to receive evidence when it is offered by the parties. As it was not the grievance of either party that they had attempted
to adduce some evidence before the tribunal, which it refused to receive, no fault could be found with the order of the
tribunal.94 A similar view was taken by the Orissa High Court, holding that there was no obligation in law on the part of
the tribunal to indicate its mind about the infirmity of the inquiry at any stage before it gave its findings in the award.95 In
Premnath Motors, a preliminary issue with respect to the validity of inquiry had, in fact, been raised by the employer by
making an application. After holding the inquiry to be invalid, the tribunal refused to go into the merits of the case. By an
elaborate and logical process of reasoning, a single judge of the Delhi High Court held that after coming to the conclusion
that the domestic inquiry was invalid, the tribunal must give an opportunity to the employer as well as to the workman to
adduce additional evidence, pro and con the order of dismissal. In such cases, the tribunal is not to content itself by merely
quashing the inquiry, but it must proceed to consider the merits of the charge against the workman on the basis of the

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documentary and oral evidence adduced before it. He, therefore, took the view that it is for the tribunal to direct the
employer to adduce evidence after finding an inquiry to be invalid rather than for the employer to ask for an opportunity to
lead evidence.1

Where the labour court proceeded to decide the case on merits without first deciding the preliminary issue of ‘validity of
enquiry’ and passed a two-in-one order, i.e., hearing both the preliminary issue and merits, the Madras High Court, had set
the order aside and remanded the matter back to the labour court to decide the preliminary issue first.2 In Madhya Pradesh
SRTC, it was held that, after coming to the conclusion that the inquiry was invalid, the tribunal suo motu should give an
opportunity to the employer to prove the merits of the charge by adducing relevant evidence.3 A similar view was also
taken by the Calcutta High Court in Fort William.4 However, the Madhya Pradesh and the Calcutta High Courts did not
support their holding by any reasoning but contented themselves by making a general statement. The dicta of the Orissa,
the Madhya Pradesh and the Delhi High Courts were cursorily touched upon by the Supreme Court in RK Jain, where it
disagreed with the view of the Madhya Pradesh and Delhi High Courts and agreed with the view of the Orissa High Court,
without however attempting to reconcile the apparent conflict in their observations.5 In other words, it was for the
employer to ask for an opportunity to adduce evidence in support of his action and there was no obligatory duty, in law, on
the tribunal to offer an opportunity to the employer, irrespective of whether he asked for it or not. Commenting on this
holding, the court observed that in that case, there was no question of an opportunity to adduce evidence having been
denied by the tribunal as the employer had made no such request and the contention that the tribunal suo motu should have
given an opportunity to the employer to adduce evidence was not accepted in such cirumstances.6 In PP Mundhe, after
holding the inquiry to be invalid, the labour court had set aside the order of dismissal because the employer had not led
evidence before it on the merits of the action. In appeal, the Supreme Court had to consider the question whether any duty
is cast upon the tribunal to give an opportunity to the employer after holding the domestic inquiry to be invalid and
whether failure to do so would vitiate the award but instead of addressing itself to this question, the court indicated the
appropriate stage at which the opportunity has to be given to the employer to adduce additional evidence.7

Glossing on this decision, in Shankar Chakravarti, Desai J observed that it was not an authority for the proposition that the
tribunal, as a matter of law, must first frame preliminary issue and proceed to decide the validity or otherwise of the
inquiry and then serve a fresh notice on the employer by calling upon him to adduce further evidence to sustain the charges
ifhe so chooses to do.8 He further observed that PP Mundhe does not, in any way, overrule the decisions in RK Jain and
Ludh Budh Singh cases. In this case, relying on the observations in Cooper Engineering, an argument was built before the
court that there was an obligatory duty on the tribunal, irrespective of the fact whether there is any such request to that
effect or not, to raise a preliminary issue as to whether the domestic inquiry alleged to have been held by the employer is
proper or defective and then record a formal finding on it and if the finding is in favour of the workman, the employer
should be called upon which he must demonstrate on record, without waiting for such request or demand or pleading from
the employer, to adduce further evidence to sustain the charge of misconduct, if he so chooses. The court rejected the
contention and held that the right to adduce additional evidence to sustain the action before the tribunal, must be.availed of
by the employer by making a request in the pleadings or before the proceedings are concluded. If such a request is made in
the pleadings, the tribunal must give such opportunity. Even if the request is made before the proceedings are concluded,
the tribunal should, ordinarily, grant the opportunity but if no such request is made by the employer, to substantiate the
charges to sustain the action of dismissal in the pleadings or in the course of proceedings, no duty is cast on the tribunal to
suo motu call upon the employer to adduce such evidence. The request to adduce evidence in support of reasons to sustain
the disciplinary action has to be specific and mere filing of documents will not constitute such reasons.9 In Ludh Budh
Singh, Vaidialingam J held:

...the management should avail itself of the said opportunity by making a suitable request to the tribunal before proceedings are
closed. If no such opportunity has been availed of, or asked for by the management, before the proceedings are closed, the
employer can make no grievance that the tribunal did not provide such an opportunity.10

The above observation is based on his earlier decision in RK Jain, to the effect:

It should be remembered that when an order of punishment by way of dismissal or termination of service is affected by the
management, the issue that is referred is whether the management was justified in discharging and terminating the service of the
workman concerned and whether the workman is entitled to any relief ...There may be cases where an inquiry has been held
preceding the order of termination or there may have been no inquiry at all. But the dispute that will be referred is not whether the
domestic inquiry has been conducted properly or not by the management, but the larger question whether the order of termination,
dismissal or the order imposing punishment on the workman concerned is justified...The point to be noted is that the inquiry that is
conducted by the tribunal is a composite inquiry regarding the order which is under challenge. 11

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In PP Mundhe (supra), the court posed the question: ‘what is the appropriate stage which was specifically adverted to in
Ludh Budh Singh, which we are now required to seriously consider whether this conclusion is correct and ensures justice to
all concerned in an industrial adjudication?’ Answering the question, the court observed:

In our considered opinion, it will be most unnatural and unpractical to expect a party to take a definite stand when a decision of
jurisdictional fact has first to be reached by the labour court prior to embarking upon an inquiry to decide the dispute on its merits.
The reference involves determination of the larger issue of discharge or dismissal and not merely whether a correct procedure had
been followed by the management before passing the order of dismissal...We are, therefore, clearly of opinion that when a case of
dismissal or discharge of an employee is referred for industrial adjudication, the labour court should first decide as preliminary
issue; whether the domestic inquiry has violated the principles of natural justice. When there is no domestic inquiry or defective
inquiry is admitted by the employer, there will be no difficulty but when the matter is in controversy between the parties, that
question must be decided as a preliminary issue. On that decision being pronounced, it will be for the management to decide
whether it will adduce any evidence before the labour court. If it chooses not to adduce any evidence, it will not be thereafter
permissible in any proceeding to raise the issue.12

The guidelines provided by the dicta of the Supreme Court lay down that the employer must seek the opportunity to sustain
his action diligently by leading evidence without undue delay. Such a request must be bona fide and should not be filed at
the belated stage so as to prejudice the interest of the worker. It should not also be calculated to break the morale of the
worker through financial stress by adopting dilatory tactics. It should also not have the effect of further delaying the
proceedings, If it is shown that the request of the employer is tainted with any of these defects or some such similar
defects, the tribunal may decline to grant permission,13 but if the request does not suffer from any such vice it is the duty of
the tribunal to permit the employer to lead such evidence if a request is made at the proper stage. When such an
opportunity is asked for, the tribunal has no power to refuse. Giving of an opportunity to an employer to adduce evidence
for the first time before the tribunal is, in the interest both of the management, and the employee, to enable the tribunal to
be satisfied about the alleged misconduct.14 Failure to do that will be violative of the rules of natural justice. However,
when such an opportunity is given to the employer to exercise his right to sustain his action by adducing evidence before
the tribunal, it is equally the right of the workman to plead all infirmities in the order of dismissal and also to attack it in on
all other grounds available to him in law and on facts.15 Once the workman is given full opportunity to rebut and demolish
the employer’s case, there would be no question of any prejudice being caused to him. Nor would there be any prejudice,
resulting in injustice caused to him. The pertinent question is whether any injustice has been done to any party. In the
absence of any injustice, a mere technical error in the procedure will not vitiate the findings of the tribunal.16 It is not
possible to appreciate the observations of Varadarajan J that if the request of the employer is not incorporated in the initial
pleadings, it may ‘result in delay which will lead to wrecking the morale of the workman and compel him to surrender
which may not otherwise do’. This is seeing a ghost in every mulberry bush.

In Rajendra Jha, a three judge Bench of the court did not follow the norms laid down in Shankar Chakravarty and
Shambhu Nath Goyal cases. In this case, the employer had filed an application under s 33(2)(b) for ‘approval’ of the action
of dismissal of the workman but in that application, the employer had not asked, alternatively, for an opportunity to lead
evidence to justify the order of dismissal in case the inquiry was found to be defective. Nor had it asked for such
opportunity in its rejoinder to the written statement of the workman putting the validity of the domestic inquiry in issue.
However, by about the time the hearing of the employer was coming to a close, it requested the labour court orally for
permission to adduce evidence in support of the action of dismissal of the workman. By a composite order, the labour court
held that the domestic inquiry was invalid and also granted permission to the employer to adduce evidence to justify the
dismissal of the workman. The Supreme Court discountenanced the contention of the workman that the labour court had
acted on its own initiative in allowing the employer to lead evidence and held that the labour court had, in fact, granted an
oral request of the employer in allowing him the opportunity to adduce evidence to justify the action of dismissal. This
holding puts the law in its proper perspective. Neither the court insisted that the request of the employer must be in writing
nor that it must be incorporated in the pleadings. The permission granted by the labour court to the employer to adduce
evidence to sustain its action, on its oral request about the time the hearing of the application was coming to a close, was
held to be justified.17

In Basu Deba Das, the employer had not filed the application for grant of permission to lead evidence for justifying the
order of dismissal but he had made the application for adducing the evidence to which the other side did not raise any
objection. A single judge of the Bombay High Court held that the labour court was justified in granting permission.18 A
single judge of the Patna High Court in Lalu Mahto, has observed that it is not necessary for the labour court to record a
finding that a prayer was made by the employer that he should be given an opportunity to justify his action by adducing
evidence, because it is a matter of procedure and no finding is specifically required to be recorded. The court also put the

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burden on the workmen to show by pleading or an affidavit that the employer had not made any prayer.19 In Desh Raj
Gupta, the Supreme Court affirmed the holding of the Allahabad High Court to the effect that the employer factually had
made a request to the tribunal to permit it to justify its order of punishment. In these circumstances, the court held that the
tribunal neither committed any illegality nor any impropriety in directing the employer to justify its action. The tribunal
also gave a chance to the workman of impugning the action of the employer. The tribunal therefore acted in the interest of
the workman and not to his detriment, and further held that the workman could not have made any grievance of the
conduct of the tribunal.20

In Chhatia Weaving Mills, the Orissa High Court held that it is not obligatory on the tribunal to frame preliminary issue on
the question whether the inquiry was fair and proper, because the law does not enjoin on it to decide whether the inquiry
was fair and proper, and then to grant opportunity to the management to adduce evidence if the finding on inquiry went
against it. There is no obligation on the tribunal to decide the dispute under reference piece-meal. If anything, the courts
have deprecated such delaying tactics on the part of the employers.21 The Mysore High Court had to deal with a converse
case where the workman contested the order of dismissal on the grounds of mala fides, victimisation and unfair labour
practice and sought the permission of the tribunal to substantiate these pleas by leading evidence. The tribunal permitted
the workman to lead evidence only in support of his plea of victimisation. This order of the tribunal was challenged in a
writ petition before the High Court by the employer on the ground that by permitting the workman to lead evidence on the
question of victimisation, the tribunal had exceeded the jurisdiction conferred on it by law as he could not be permitted to
lead evidence touching the validity of the domestic inquiry. Though the High Court recognised the right of the workman to
establish the pleas of mala fides, bias, victimisation or unfair labour practice, by leading independent evidence before the
tribunal, it held that such right is not an unqualified one and stated:

In such cases, the workman can lead evidence in support of the aforesaid allegations if he satisfies the tribunal that either he did not
know the facts on which he relies or that he was prevented by sufficient reason to lead evidence when the domestic inquiry was
pending. To hold otherwise would amount to a denial of the right given to the workman to demonstrate that the inquiry is vitiated
for one or the other reasons...22

After holding that the domestic inquiry is invalid, the tribunal will have to give the employer an opportunity to adduce
additional evidence if the request is made at the proper time. The tribunal will also give a similar opportunity to the
employee to lead evidence,23 but the tribunal cannot rely on the evidence in favour of any party which was adduced in the
very domestic inquiry which is held invalid. If the tribunal relies on such evidence; it is procedural irregularity and the
tribunal is deprived of the opportunity of observing demeanour of the witnesses and the opposite party is deprived of the
opportunity to cross examine the witnesses before the tribunal.24 After taking the evidence of both the parties, if the
adjudicator finds that the act of misconduct is not proved, the question of punishment will not arise because the
punishment can only be for an act of misconduct. It is not open to him to sustain the punishment on new grounds,25 but if
he finds that the act of misconduct alleged against the workman is proved, he will proceed to consider the question of
punishment. In Surat Singh, a single judge of the Punjab and Haryana High Court held that the power to alter the
punishment is to be exercised only in a case where the punishment is so harsh as to suggest victimisation. In this case, the
labour court had not recorded any finding of victimisation, and the award was singularly silent, not only on this aspect but
also on the broader aspect whether it would be prudent to reinstate the workman.26

(a) Scope of Jurisdiction of Labour Courts under Section 11A

In Firestone, the Supreme Court interpreted the provisions of s 11A in the light of the law emerging out of its earlier dicta
prior to its insertion, though without making an attempt to reconcile or even showing awareness of the conflicting
statements in them. Summing up the law, the court adumbrated the following guidelines:

(1) The right to take disciplinary action and to decide upon the quantum of punishment are mainly managerial functions, but
if a dispute is referred to a tribunal, the latter has power to see if the action of the employer is justified.
(2) Before imposing the punishment, an employer is expected to conduct a proper inquiry in accordance with the provisions
of the Standing Orders, if applicable, and principles of natural justice. The inquiry should not be an empty formality.
(3) When a proper inquiry has been held by an employer, and the finding of misconduct is a plausible conclusion flowing
from the evidence adduced at the said inquiry, the tribunal has no jurisdiction to sit in judgment over the decision of the
employer as an appellate body. The interference with the decision of the employer will be justified only when the
findings arrived at in the inquiry are perverse or the management is guilty of victimisation, unfair labour practice or mala
fides.

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(4) Even if no inquiry has been held by an employer or if the inquiry held by him is found to be defective, the tribunal in
order to satisfy itself about the legality and validity of the order, has to give an opportunity to the employer and the
employee to adduce evidence before it. It is open to the employer to adduce evidence for the first time justifying his
action; and it is open to the employee to adduce evidence contra.27
(5) The effect of an employer not holding an inquiry is that the tribunal would not have to consider only whether there was a
prima facie case. On the other hand, the issue about the merits of the impugned order of dismissal or discharge is at large
before the tribunal, and the latter, on the evidence adduced before it, has to decide for itself whether the misconduct
alleged is proved. In such cases, the point about the exercise of managerial functions does not arise at all. A case of
defective inquiry stands on the same footing as no inquiry.
(6) The tribunal gets jurisdiction to consider the evidence placed before it for the first time in justification of the action taken
only if no inquiry has been held or after the inquiry conducted by an employer is found to be defective.
(7) It has never been recognised that the tribunal should straightaway, without anything more, direct reinstatement of a
dismissed or discharged employee, once it is found that no domestic inquiry has been held or the said inquiry is found to
be defective.
(8) An employer, who wants to avail himself of the opportunity of adducing evidence for the first time before the tribunal to
justify his action, should ask for it at the appropriate stage. If such an opportunity is asked for, the tribunal has no power
to refuse. The giving of an opportunity to an employer to adduce evidence for the first time before the tribunal is in the
interest of both the management and the employee and to enable the tribunal itself to be satisfied about the alleged
misconduct.
(9) Once the misconduct is proved either in the inquiry conducted by an employer or by the evidence placed before a tribunal
for the first time, punishment imposed cannot be interfered with by the tribunal except in cases where the punishment is
so harsh as to suggest victimisation.
(10) In a particular case, after setting aside the order of dismissal, whether a workman should be reinstated or paid
compensation is, as held by this court in Management of Panitole Tea Estate v Workmen (supra), within the judicial
discretion of a labour court or tribunal. The above was the law as laid down by this court as on 15 December 1971
applicable to all industrial adjudication arising out of orders of dismissal or discharge.28

These guidelines have ever since been followed by the Supreme Court,29 and the High Courts,30 in subsequent cases. In the
following paragraphs, effort has been made to present the up-to-date evolution of the law by discussing the leading cases,
applying these guidelines to various fact situations and explaining and elaborating their implications. The limitations on
tribunal jurisdiction, as delineated in Indian Iron and Steel Co case, have now been removed by the legislature. Previously,
where the employer had held a proper and valid domestic inquiry before passing the order of punishment, the tribunal had
no power to interfere with its findings on the misconduct recorded in the domestic inquiry unless it was vitiated by one or
other infirmities pointed out in Indian Iron & Steel Co. The conduct of the disciplinary proceedings and imposition of the
punishment were all considered to be managerial functions with which the tribunal had no power to interfere unless the
findings were perverse or the punishment was so harsh as to lead to an inference of victimisation or unfair labour practice.
Now this position no longer holds the field. The words, ‘in the course of adjudication proceedings, the labour court,
tribunal or national tribunal...is satisfied that the order of discharge or dismissal was not justified’ clearly indicate that the
tribunal now is clothed with the power to reappraise the evidence adduced in the domestic inquiry and satisfy itself
whether the evidence relied on by the employer establishes the misconduct alleged against a workman. It is however
relevant to note that the ‘basic rule of appreciation of evidence is that anything, which ought to have been stated at the
earliest opportunity, if not stated, should be treated as an after-thought’ and ‘courts are slow to accept after-thoughts as
genuine or believable’.31 Therefore, what was originally a plausible conclusion that could be drawn by an inquiry officer
from the evidence, has now given place to the satisfaction being arrived at by the tribunal that the finding on the
misconduct is correct. The tribunal now is at liberty to consider not only whether the finding on the misconduct recorded
by an employer in the domestic inquiry is correct, but also to differ from that finding if a proper case is made out.
Therefore, what was in the realm of satisfaction of the employer, has ceased to be so and now it is the satisfaction of the
tribunal that finally decides the matter.32

Even in cases, where an inquiry has been held by the employer and a finding on the misconduct is arrived at, the tribunal
can differ with the findings in a proper case to hold that no misconduct is proved. To come to the conclusion either way,
the tribunal will have to reappraise the evidence for itself the tribunal may hold that the misconduct itself is not proved or
that the misconduct proved does not warrant the punishment of dismissal or discharge. The jurisdiction to interfere with
the punishment is also not confined only to the cases where the punishment is shockingly disproportionate to the act of
misconduct. Now the tribunal has to see whether the punishment imposed by the employer is commensurate with the

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gravity of the act of misconduct committed by the delinquent workman. In either case, where necessary, the tribunal may
set aside the order of discharge or dismissal and direct reinstatement with or without any terms or conditions as it may
think fit or give any other relief including award of lesser punishment in lieu of discharge or dismissal, as the
circumstances of the case may warrant.33 Now the tribunal has the jurisdiction and power of substituting its own measure
of punishment in place of the managerial wisdom, once it is satisfied that the order of discharge or dismissal is not justified
on facts and in the circumstances of the case.34

In General Employees Union, a single judge of the Bombay High Court said that s 11A specifically gives two-fold power
to the industrial adjudicator. ‘First is virtually the power of appeal against findings of facts made by the inquiry officer in
his report with regard to the adequacy of the evidence and the conclusion on facts. The second and the far more important,
is the power of reappraisal of the quantum of punishment’. In this case, the court set aside the order of the discharge of the
workman from service for the act of preaching gospel of ‘go-slow’ and held that reinstatement with one-third backwages
from the date of discharge order till the date of reinstatement should be condign in the circumstances.35 Likewise, in
Mohan Sugan Naik, a Division Bench of the same court interfered with the quantum of punishment by substituting the
order of dismissal with an order of reinstatement without backwages. In this case, the workman had been dismissed for the
misconduct of threatening the inquiry officer that he would be stabbed in case he proceeded with the inquiry. Though the
Bench noted that the material on record established that the workman had, in fact, given the threat and also observed that
such threat is quite a serious misconduct, yet it held that the misconduct did not warrant maximum punishment of dismissal
from service.36 It is submitted, that the rationale of this decision that the threat of stabbing the inquiry officer did not
warrant the punishment of dismissal, is wholly misconceived. Does the Bench suggest that the actual act of stabbing would
be necessary in order to sustain an action of dismissal? It is, however, relevant to note that this section was not intended to
cause embarrassment to the management by interfering with the punishment imposed by it, even in cases of grave nature.37

The decision of the tribunal on the preliminary issue that the domestic inquiry was properly held and was valid does not
mean that the order of dismissal or discharge is justified. Such finding does not bar the tribunal from going into the merits
of the case.38 It is, therefore, open to the tribunal to go into the questions that the findings recorded by the inquiry officer
are perverse or the imposition of the punishment is not warranted.39 The onus of proof to establish that the action taken by
the employer is bad in law in the absence of an inquiry or due to defective inquiry, if any, is on the workman. Therefore, it
is for the workman to adduce evidence, and the employer then, may controvert the same, if necessary. The tribunal must
hear and decide the preliminary issue regarding the validity or invalidity of the domestic inquiry first.40 In Firestone, the
court rejected the contention on behalf of the workmen that if the employer has not held a valid domestic inquiry or held
no inquiry at all before imposing the punishment, the tribunal must order reinstatement of the workman on that ground
alone. In other words, the employer had no right to adduce evidence to sustain the disciplinary action before the tribunal
once the inquiry held by him was found to be invalid or he had held no inquiry at all. Therefore, reinstatement as a
sequitur, must follow. The court observed that there was no indication in the section that the right of the employer to
sustain his disciplinary action by adducing evidence before the tribunal was abrogated. If that was the intention of the
legislature, to do away with this right, the section would have been differently worded. Neither are there express words to
that effect nor is there any indication that the section has impliedly changed the law in that respect. Therefore, the position
even now is that the employer is entitled to adduce evidence for the first time before the tribunal, even if he had held no
inquiry or the inquiry held by him is found to be defective; of course an opportunity will have to be given to the workman
to lead evidence contra. If no domestic inquiry has been held by the management or if the management makes it clear that
it does not rely upon the domestic inquiry, it is entitled to straightaway lead evidence before the tribunal and the tribunal is
bound to consider the evidence as adduced before it on merits and give a decision thereon. In other words, it is open to the
management to rely on the inquiry and alternatively to advance a contention that if the inquiry is found not proper, it
should be given an opportunity to lead additional evidence but merely because the employer has taken such a stand, the
labour court cannot jump to the conclusion that the inquiry was not held properly and in a fair manner. In a case where the
employer has sought an opportunity to adduce evidence, it cannot just be ignored on the ground that it will be a sheer
exercise in futility.41

It is then open to the tribunal to deal with the validity of the domestic inquiry if one has been held as a preliminary issue. If
its finding on the subject is in favour of the management, then there will be no occasion for additional evidence being cited
by the management. A priori where the domestic inquiry is found to have been properly held, neither the employer nor the
employee shall have the right to produce further evidence before the tribunal to support or demolish the finding of guilt
recorded nor to sustain the quantum of punishment imposed as a result of the domestic inquiry. It is relevant to note that in
the absence of a clear cut finding to the effect that the order of dismissal or discharge is not justified being unsustainable or
perverse, it would not be permissible for the tribunal to permit the employer to adduce evidence before it to sustain the
action of dismissal or discharge.42 In all such cases, the tribunal shall be competent to reappraise evidence recorded in the
domestic inquiry, not only for upholding or upsetting the finding of guilt recorded by the inquiry officer but also with a
view to determine whether or not the punishment was commensurate with the gravity of the charge made against the
delinquent workman. In extreme cases, additional evidence has been accepted in addition to the evidence already on record

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by the management even when the domestic inquiry was found valid. It is a matter of the discretion of the tribunal just like
an appellate court, which if satisfied that such evidence is to be laid to advance justice, there is no bar for the same even
though a party has no right to adduce evidence to support or demolish the findings but if the finding is against the
management, the tribunal will have to give it an opportunity to cite additional evidence justifying its action. This right of
the employer to sustain its action by adducing independent evidence before the tribunal in a no inquiry or invalid inquiry
case has been given judicial recognition over a long period of years.43

If the preliminary issue is decided against the employer, then the burden shifts and squarely lies on the employer to show
by adducing evidence on merits that the action taken against the workman is justified. He has to lead evidence first to
establish the case on merits and the workman will then lead evidence, if necessary, to controvert the same. But for
adducing evidence on merits, after the preliminary issue is decided against the employer, the employer must have made-a
prayer for adducing such evidence at the appropriate stage. Once the domestic inquiry is set aside by the labour court, no
fresh inquiry can be started by the employer unless it has been set aside purely for legal lacuna.44 When such evidence is
adduced for the first time, it is the tribunal which has to be satisfied on such evidence about the guilt or otherwise of the
delinquent workman. The law, that under such circumstances, the issue about the merits of the impugned order of
dismissal or discharge is before the tribunal at large and that it has to decide for itself whether the misconduct alleged is
proved, continues to have full effect. It is well-settled that when no domestic inquiry is held or the domestic inquiry has
been found to be defective, the tribunal has complete jurisdiction to deal with the entire gamut of the controversy between
the parties. In other words in such a situation, the tribunal itself has to hold a full scale inquiry in which the employer has
not only to prove the alleged misconduct against the workman but also has to satisfy that on the facts and in the
circumstances of the case, the imposition of the punishment was justified.45 In such a situation, the exercise of managerial
functions does not arise at all. In Mgmt. of TUCS, a single judge of Madras High Court held that if the management fails to
make the plea before the labour court that the validity of the domestic inquiry be tried as a preliminary issue, it cannot raise
the plea before the High Court in a writ petition, and, in the absence of an application, there is no duty cast on the labour
court to adopt an advisory role by informing the petitioner of his rights.46 Reproduced below is the observation of Shaman
Kumar Sen J of Calcutta High Court in SMukherjee on the true import of s 11A of the Industrial Disputes Act. The learned
judge observed:

The judgment and decision in Workmen of Firestone’s case (supra) only lays down the principle that under section 11-A if the
inquiry was not properly conducted by the employer, it will be open to the employee to lead further evidence before the Tribunal to
establish that the domestic inquiry is invalid. Since in the instant case, the Tribunal itself came to the finding that the domestic
inquiry was not properly conducted, there is no question of taking further evidence by the Tribunal itself. The Tribunal was
therefore not justified in allowing fresh evidence to be adduced by the employer when there is already a finding by the Tribunal
after consideration of evidence that the domestic inquiry was invalid. If the domestic inquiry is found to be invalid by the Tribunal
then the dismissal also becomes bad on the basis of the said finding of the domestic inquiry.47 (emphasis added).

The above observations merit detailed analysis in the context of the law laid down by the Supreme Court in Firestone case.
In the first place, if the domestic inquiry conducted by the employer was round to be improper, then applying the Firestone
ratio, the onus to adduce additional evidence in support of dismissal lies on the employer, and not on the employee. In
other words, by leading additional evidence to the satisfaction of the tribunal, the employer can still sustain the action of
dismissal, but to say that, in the event of an improperly held domestic inquiry, ‘the employee can lead further evidence
before the tribunal to prove that the inquiry is invalid’ is like putting the cart before the horse. Why should the onus be on
the employee to lead additional evidence to establish the invalidity of the inquiry, which in any case is a finding of fact
recorded in his favour by the tribunal? After all, by adducing additional evidence, the employee is not going to prove that
the inquiry held by his employer is exponentially invalid. Secondly, the question of taking further evidence would arise
only after the tribunal has recorded a preliminary finding that the domestic inquiry was not properly held. If the domestic
inquiry is found unassailable in every respect, where is the need for the employer to adduce any further evidence, and for
what purpose? It is a facility granted to the employer to justify his action, that too, when the domestic inquiry was found
defective. The question of the workman leading evidence contra arises only after the management adduces additional
evidence, and not before. Thus, the right of the employer to adduce additional evidence is founded on the satisfaction of
the following two conditions:

(a) the tribunal has recorded a preliminary finding that the domestic inquiry was not properly held; and

(b) that, in such an event, the employer makes a request to the tribunal seeking permission to lead additional evidence to
justify the action of dismissal.

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In the absence of these two pre-requisites, no question of the employer adducing additional evidence could obviously arise.
Conversely, if these two conditions are fulfilled, it is not within the power of the tribunal to refuse permission to the
employer to adduce further evidence. Lastly, it is not in dispute that a dismissal founded on an improperly held domestic
inquiry is bad, but at the same time the defect is not conclusive or fatal per se. Such a dismissal could be termed ‘bad in
law finally’ only when:

(a) the employer has been permitted, on a request made by him, to adduce additional evidence in support of the action;

(b) the workman is afforded an opportunity to lead evidence contra; and

(c) the tribunal after appreciating the sum-total of

(i) the evidence adduced at the domestic inquiry;

(ii) the evidence and additional evidence adduced by the employer before the tribunal; and

(iii) the evidence adduced by the workman contra comes to the final conclusion that the employer has still failed to
make out a valid case for dismissal.

Paraphrasing, the employer can cure such defects by adducing additional evidence to the satisfaction of the tribunal. This
much is clear from the ratio of Firestone and other cases decided by the Supreme Court for well over 25 years. In fact,
Firestone goes a step further. Where the circumstances were so compelling that the employer has no option than to dismiss
a workman without conducting an inquiry, he is nevertheless entitled to make a request before the tribunal for adducing
evidence for the first time in support of the action taken and, if a request to that effect is made, it is incumbent upon the
tribunal to grant the same. With great respect, it is submitted that this decision is questionable and needs review by a larger
bench. The law relating to the stage at which the employer must seek permission of the tribunal to adduce evidence before
it to sustain the disciplinary action taken by him against the delinquent employee has remained unaltered by s 11A. Even
now the law remains the same as evolved by the judicial dicta prior to promulgation of s 11A. In AB Zodge, before the
closure of the proceedings before the tribunal, the employer sought permission to lead evidence in support of the order of
dismissal but the tribunal refused permission and the Bombay High Court upheld the decision of the tribunal. The Supreme
Court held that denial of the opportunity to the employer to lead evidence before the tribunal in support of the order of
dismissal cannot be justified. Therefore, in view of the law laid down by it in the earlier decision, the court set aside the
order and judgment of the High Court as unsustainable. It further observed that it will be open to the parties to lead such
evidence as they may deem proper before the Industrial tribunal where the matter is to be reheard.48

In Raveendra Kamath, the Kerala High Court said that permission can be granted by the labour court to the employer to
adduce evidence to sustain his action even on an oral request made before the proceeding comes to a close.49 Following
this holding, in KK Bharathan, a single judge of that High Court held that, in the circumstances of the case, the labour
court should have given an opportunity to the management to adduce evidence before it, for sustaining its action, because
such an opportunity can be given even on an oral request. In this case, as a matter off act, the request for permission to
adduce evidence was made in the ‘written statement’ itself.50 In Adichanalloor FSC Bank, another Bench of the same High
Court observed that s 11A does not ‘confer an absolute right on the employer to make an application at any time of the
proceedings and it has to be made at the earliest opportunity’. When such an application is filed, it is for the labour court to
decide whether it is raised at the earliest opportunity or whether delay is explained or whether such application is filed only
to delay the proceedings.51. In Rajendra Jha, the Supreme Court, from the facts on record inferred, that the employer had
made an oral request to the labour court for being given an opportunity to lead evidence to justify its action and held that
the contention of the workmen that the employer had not at all, asked for an opportunity to lead evidence and the court
acted gratuitously in giving an opportunity to the employer of its own accord, was unfounded.52 The right of the employer
to lead additional evidence before the labour court in a case of dismissal does not include leading of fresh evidence in
respect of charges which were not levelled against the workman either in the charge-sheet or in the order of termination.53
In GA Salimani, the facts were: The tribunal passed an order on 2 July 1990 holding that the inquiry held was not proper,
and directed the management to lead evidence in support of the charges but on a request made by the workman against the
direction, the tribunal recalled the said order by passing another order dated 18 October 1990 to the extent it related to
giving liberty to the management to lead evidence. The Karnataka High Court held that such recall of the earlier direction
was not merely procedural but a substantive review on the part of the tribunal and was not permisslble.54 In
Lakshmidevamma, the issue was ‘at what stage should the employer make a request to the labour court in order to be
permitted to adduce additional evidence to justify the action of dismissal, be it a case of regular adjudication under s 10 or
an application rued under s 33(2) (b) ’. Santosh Hegde J (for self and Bharucha J with Patil and Khare JJ concurring, and
Sabharwal J dissenting) affirmed the ratio of Shambhu Nath Goyal in the following words:

Keeping in mind the object of providing an opportunity to the management to adduce evidence before the Tribunal/Labour Court,

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we are of the opinion that the directions issued by this Court in Shambhu Nath Goyal’s case55…need not be varied, being just and
fair. There can be no complaint from the .management side for this procedure because this opportunity of leading evidence is being
sought by the management only as an alternative plea and not as an admission of illegality in its domestic inquiry. At the same
time, it is also of advantage to the workman inasmuch as they will be put to notice of the fact that management is likely to adduce
fresh evidence, hence, they can keep their rebuttal or other evidence ready. This procedure also eliminates the likely delay in
permitting the management to make belated application whereby the proceedings before the Labour court tribunal could get
prolonged. In our opinion, the procedure laid down in Shambhu Nath Goyal’s case (vide supra), is just and fair.56 (para 17, at p
110).

Sabharwal J, in his dissenting judgment cited inter alia the decisions rendered in Bharat Sugar, Ritz Theatre, Motipur
Sugar, Delhi Cloth Mills, PP Mundhe, and other cases and observed:

Such an interpretation [as placed by the majority judges], of procedure takes away the discretion of the labour court/industrial
tribunal. To allow or not to allow the prayer of the management to adduce evidence in such a matter should essentially lie within
the discretion of labour court/industrial tribunal to be exercised on well-settled judicial principles. (para 26, at p 112)...It has been
consistently held that, in principle, there is no difference whether the matter comes before the labour court/industrial tribunal under
section 33 or on a reference under section 10 of the Industrial Disputes Act. In either case, the employer would have to justify that
the order of dismissal or discharge was proper. In either case, the employer would have right to adduce evidence where the
employer dismisses an employee without holding an inquiry or inquiry is found to be defective. (para 28, at p 112)...In the present
case, we are not called upon to decide a case where no request to adduce evidence is made by the employer. (para 34, at p
115)...The departure came up only in Shambhu Nath Goyal’s case. (,)...Except the main judgment of Shambhu Nath Goyal’s case,
no other decision of the court was cited before us wherein it may have been held that the prayer of the management to adduce
evidence is to be rejected if not made either in the written statement filed to the statement of claim in a reference under section 10
or at the initial stage of proceedings under section 33(2)(b) of the Industrial Disputes Act ...(para 17, at p 211).

The dissenting judgment of Sabharwal J is consistent with the long line of cases decided on this issue and is right. An
employer is under no obligation to make a request to the labour court in the absence of a finding against the validity of the
domestic inquiry being recorded. If the employer makes a request immediately after the labour court records such a
finding, no inference of the employer attempting to delay the adjudication process could be drawn. Even where the
employer makes a request in the written statement or in the application under s 33, he gets permission to lead further
evidence only after, and not before, the labour court has recorded a finding against the validity of domestic inquiry. That
being the position, what difference would it make whether the request is made at the commencement of the proceeding or
immediately after the recording of the finding. It is one thing to say that it would be desirable for the employer to make a
request for adducing evidence in the written statement or in the application filed under s 33, as the case may be, and quite
another to suggest that if he does not make a request at the very commencement of the adjudication proceeding, he would
be barred from making the request at a later stage. The fact that Motipur Sugar, decided by a four judge Bench in 1965 was
no less a long-standing decision, holding the field for as many years, exposes the congenital weakness of the other
consideration, namely, stare decisis. The ratio of Motipur Sugar is binding on all subsequent benches of tour judges or less.
A fortiori, the said ratio was binding on the Bench that decided Shambhu Nath Goyal, which brings to surface the harsh
reality that the smaller bench in Shambhu Nath Goyal struck out in a new direction of its own.

In SJ Mehta, the facts disclosed that the employer contended that it was a case of termination simpliciter after paying
compensation as required under s 25F, which was accepted by the workmen, and further offered to lead evidence justifying
termination before the labour court and the labour court refused to grant permission on the ground that the management
was adopting delay tactics, a single judge of Gujarat High Court quashed the order of the labour court and remanded the
matter to the labour court with a direction to give opportunity to the employer to lead evidence.57Both the labour court and
the single judge were questionable on different counts. Once it is admitted by the employer and accepted by the tribunal
that it was a case of termination simpliciter, where is the question of leading evidence in support of such termination
validly effected after paying compensation under s 25F? What purpose would be served by remanding the case to the
labour court with a direction to give an opportunity to the employer to lead evidence; if so, for or against what? The right
course for the High Court would have been to quash the proceedings before the labour court and uphold the action of
employer in view of the admitted fact that it was not a case of dismissal for an act of misconduct, but one of termination
simpliciter after complying with the requirements under s 25F and, more so, that the workmen had accepted the same
without a whisper of protest. In United Planters Assn, the Supreme Court reiterated the law to the effect:

...it has always been the philosophy of industrial jurisprudence that if the domestic inquiry held by the employer was defective,
deficient, incomplete or not held at all, the tribunal instead of remanding the case to the inquiry officer for holding the inquiry de

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novo, would itself require the parties to produce their evidence so as to decide whether the charges, for which disciplinary action
was taken against the employee, were established or not. The pending proceedings keep the employer and the employee in a state
of confrontation generating further misgivings and bitterness. It is, therefore, of paramount importance that such proceedings
should come to an end at the earliest so as to maintain industrial peace and cordial relations between the management and the
labour.58

Then summed up the ratio of Firestone’s case:

...as to the jurisdiction of the tribunal to take evidence to decide the merits of the charges and it was laid down that in spite of the
prohibition contained in the proviso to s 11A, the tribunal, in order to satisfy itself as to the guilt of the person charged,. had the
jurisdiction to take the evidence and that the law in that regard had not undergone any change. It was pointed out that if the
domestic inquiry had been held by the employer, the tribunal will examine the merits of that inquiry and would confine itself to the
evidence already on record but where the inquiry was defective, the tribunal could still take fresh evidence to decide the merits of
the charges. (ibid).

In cases, where the tribunal decides to consider the matter on the evidence adduced before it for the first time, it must
confine itself to the charges framed against the workman on the basis of which the punishment was imposed. It is not open
to the management to level new charges before the tribunal which had not figured in the domestic inquiry or which had not
formed the basis of the order of punishment. Hence, the employer cannot be permitted to adduce evidence in support of
such new charges. Nor can the tribunal have jurisdiction to record findings on such new charges and justify the order of
Eunishment on the basis of such charges as had not preceded the order of punishment.59 It is well-settled that when no
domestic inquiry is held, the matter is at large before the adjudicator on the basis of full scale inquiry and the employer has
not only to prove the misconduct alleged, against the workman but also to satisfy the adjudicator that on the facts and in
the circumstances, infliction of certain kind of punishment was justified.60 In other words, the tribunal has complete
jurisdiction to deal with the entire gamut of the controversy between the parties. It is open to the management to rely on
the inquiry and alternatively advance a contention that if the inquiry is found not proper, it should be given an opportunity
to lead additional evidence but merely because the employer has taken such a stand, the labour court cannot jump to the
conclusion that the inquiry was not held properly in a fair manner. In a case where the employer has sought an opportunity
to adduce evidence, it cannot be just ignored on the ground that it will be a sheer exercise in futility.61 In Firestone, the
court observed that it should not be understood as laying down that there is no obligation on the part of the employer to
hold an inquiry or the inquiry held by him should be an empty formality. If a proper inquiry is conducted by the employer
and a correct finding is arrived at regarding the misconduct, the tribunal will have to give very cogent reasons for not
accepting the view of the inquiry officer. Furthermore, by holding a proper inquiry, the employer will also escape the
charge of arbitrariness or mala fides. A proper and valid inquiry by an employer will also be conducive to harmonious and
healthy relationship between the management and the workman and it will serve the cause of industrial peace. It will also
enable the employer to persuade the tribunal to accept the inquiry as proper and also the findings as correct.62

In Super Silk, the facts were, a workman was dismissed for issuing a false bill to a purchaser. The management could not
produce the original bill before the labour court, but produced the carbon copy of the said bill, which was not admitted by
the labour court as a valid piece of evidence. A single judge of Madras High Court directed the labour court to permit the
management to mark the photocopy of the relevant bill as an exhibit and dispose of the case on merits. The learned judge
further observed that the technicality of strict and sophisticated rules of evidence contemplated under the Indian Evidence
Act need not be applied in the case of a domestic inquiry.63 In BS Kamble, the facts were: A workman was dismissed for a
misconduct involving the bringing of call girls into the hotel premises to be provided to the passengers. The labour court
directed reinstatement of the workman on the ground that the evidence was insufficient. In writ petition, a single judge of
Bombay High Court quashed the order of labour court and upheld the punishment imposed by the management.64 A single
judge of Punjab and Haryana High Court held that where a dismissed workman failed to adduce any evidence despite the
grant of four opportunities, the labour court would be justified in closing the workman’s evidence, and dismissing the case
for non-prosecution.65 In Municipal Committee, Taum, the Supreme Court held that the evidence tendered in the court
should be based on the claim statement, and the courts should be alert on this. In case of inconsistent statement with regard
to the claim by the workman, the labour court would not be justified in granting any relief ignoring the inconsistency in the
claim on the ground of substantial justice.66 Where the workman, whose services were terminated, raised an industrial
dispute claiming to be a permanent employee, and the employer contended that the workman was only a daily-wager
whose services were terminated for being absent without permission, the relief of reinstatement, continuity of service and
backwages granted by the labour court is not justified and the award deserves to be quashed.67

The expression ‘evidence’ is not to be understood in a narrow and technical sense as to mean only such evidence as

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adduced in a court of law as required by the Evidence Act when a person is examined as a witness by administering the
oath. In domestic inquiries, hearsay evidence is not impermissible provided it has reasonable nexus and credibility. The
power given to the tribunal to reassess the evidence before the inquiry officer has to be judicially and judiciously
exercised. It should be exercised in cases where the findings of the inquiry officer are based on ‘no evidence’ or are ‘so
unreasonable’ that ‘no reasonable man could have ever come to it’ or the decision is ‘so outrageous’ in its defiance of logic
or of accepted moral standards that no sensible person could have arrived at it ‘or that it is so absurd that’ one is satisfied
that the decision maker must have taken leave of his senses.’ Then, it would call for interference by the tribunal.68 The
wide discretionary power vested in the tribunal by this section are to be exercised in a judicial and judicious manner before
interfering with the findings of the inquiry officer and the order of punishment. While exercising this jurisdiction, the
tribunal also must act in good faith and must have regard to all the relevant considerations. It should not seek to promote
purposes alien to the letter or spirit of the legislation that has given it the power to act and must not act arbitrarily and
capriciously.69 If the tribunal exercises its jurisdiction mechanically and without weighing the circumstances of the case or
in disregard to the judicial principles, it would be no exercise of a discretion. If the tribunal exceeds its jurisdiction, or its
decision is not reasonably founded on the evidence or it has failed to take into account the matters which it ought to have
taken into account or has taken into account irrelevant or extraneous matters or has acted in violation of the rules of natural
justice or has misinterpreted or misapplied the law, its order or award will be amenable to judicial review.70

The power to set aside the order of discharge or dismissal and grant the relief of reinstatement or lesser punishment does
not mean that in each and every case the tribunal has got untrammeled power to interfere with the punishment. The power
has to be exercised only when the tribunal is satisfied that the order of discharge or dismissal was not justified. The
satisfaction of the tribunal is objective satisfaction and not subjective satisfaction. It involves application of mind by the
tribunal to various relevant circumstances, like the nature of delinquency committed by the workman, his past conduct, the
impact of delinquency on the employer’s business as also the total length of service rendered by him. Furthermore, the
tribunal has to consider whether the decision taken by the employer is just or not. It is only after taking all these factors
into consideration, can the tribunal upset the punishment imposed by the employer. The quantum of punishment cannot be
interfered with without recording specific finding on the point. No indulgence should be granted to a person found guilty
of grave misconduct like cheating, fraud, misappropriation of employer’s fund, theft of public property.71 The tribunal has
no power to convert a penalty into a reward purporting to exercise the discretion under this section.72 In Jai Bhagwan, the
award of the tribunal was quashed by the Supreme Court on the ground that it had utterly failed to apply its mind to the
facts of the case and had not even perused the records. As a matter of fact, without even reading the report of the inquiry
officer, on the basis of its own imagination, it went far beyond the findings of the inquiry report in holding that the
workman was guilty of the misconduct and justified his dismissal from service. Speaking for the court, Chinappa Reddy J
observed that such exercise of a tribunal’s jurisdiction would be a case either of no exercise of jurisdiction or one not
legally exercised. In either case, the writ court can interfere and cannot be content by simply saying that since the tribunal
has exercised its discretion, it will not examine the circumstances of the case to ascertain whether or not such power was
exercised in accordance with the well-settled principles. If the writ court was not to do so, it would be a refusal on its part
to exercise its jurisdiction.73 In Gujarat Steel Tubes, the court said that the writ court can itself reassess the evidence on
record and can come to a conclusion which the tribunal was empowered to arrive at in exercise of its powers under s 11A
of the Act, where the award suffers from a fundamental flaw.74

In EV Raju, on the facts and in the circumstances of the case, the High Court itself examined the evidence on record for
ascertaining whether the management had proved the act of misconduct alleged against the workman and came to the
conclusion that the management was justified in dismissing him.75But once the act of misconduct is proved either in the
inquiry conducted by the employer or by evidence placed before the tribunal for the first time, the punishment imposed on
the delinquent cannot be interfered with by the writ court except where the punishment is so harsh as to suggest
victimisation.76 In Food Corpn of India, a peculiar situation arose before a single judge of the Calcutta High Court. The
tribunal found that the domestic inquiry held on the charges against the delinquent workman was illegal for non-
observance of the principles of natural justice and itself called upon the management to adduce evidence before it to
sustain the action of dismissal. Despite this, the management did not adduce any evidence and yet the tribunal upheld the
order of dismissal. In a writ against the award of the tribunal, the High Court quashed the order of dismissal and ordered
reinstatement of the workman with continuity of service but without backwages.77 In this case, there is no justification for
denying backwages to the workman, because denial of backwages itself is punishment for an act of misconduct. In the
peculiar circumstances of this case, there was no warrant for imposing any punishment.78 In Godrej, a single judge of the
Madras High Court held that where the workman was found guilty of misappropriation and cheating, which are charges of
grave nature, the labour court should not direct reinstatement, though without backwages, on the ground that he was a
married man and he should be reinstated to avoid suffering to his family.79 Once it is found that the charge of theft levelled
against the workman was proved, the tribunal cannot order reinstatement on the ground that the punishment of dismissal
was aggressive and unjustified.80 In Tarun Kr Banerjee, the Supreme Court held that under s 11A, if the tribunal finds the
order of discharge or dismissal of the workman unjustified, it could reappraise evidence adduced in the domestic inquiry
and decide the question of misconduct alleged against the workman. Where, on evidence, the charge of misconduct of the

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workman has been proved, the award of the tribunal contra is not sustainable.81 In Hindustan Motors, the Supreme Court
held that s 11A confers wide discretion on the tribunal in the matter of awarding proper punishment and also in the matter
of the terms and conditions on which reinstatement should be ordered. It necessarily follows that the tribunal is duty bound
to consider whether in the circumstances of the case, backwages have to be awarded and if so, to what extent.82

In Subhash Chandra Sharma, the Supreme Court held that once it was found that the conductor was guilty of drunkenness
and intimidation of the cashier and that the inquiry was properly held, it is not open to the labour court to interfere with the
punishment of dismissal, and that the order passed by the labour court directing reinstatement with 50 per cent of
backwages was arbitrary, capricious and unjustified.83 In a case, where the wife and husband were employees of the same
estate, the wife continued to occupy the quarter allotted to her husband even after his demise and refused to vacate the
premises despite repeated requests from the management and was dismissed for the said misconduct, it was held that the
tribunal was justified in upholding her dismissal on the ground that her action amounted to continued misconduct.84 In
Anna Transport Corpn, Jayasimha Babu J, while setting aside the order of the labour court directing a workman dismissed
for unauthorised absence, held that the discretion vested in the labour court under s 11A was not meant to be equated to
charity. Interference by the High Court would be called for in cases where the reasons given by the labour court were not
germane to a decision relating to the appropriate penalty. The fact that the workman had a family could not be a
justification for condoning all the misconducts or declining to impose any penalty. The learned judge peremptorily
observed that the employer was not required to function as a charity organisation; that any organisation was established to
render efficient service and fulfill the object for which it had been set up; and that if its personnel stay away from work
frequently and for long periods, no organisation could retain them in employment.85

When an employee remains absent from duty without sanctioned leave, the authority can, on the basis of the record, come
to a conclusion about the employee being habitually negligent in duties and an exhibited lack of interest in the employer’s
work. Habitual absence is a factor which establishes lack of interest in work. There cannot be any sweeping generalization.
But at the same time some telltale features can be noticed and pressed into service to arrive at conclusions in the
departmental proceedings. The charge in the instant case was absence without obtaining leave in advance. The conduct of
the employees in this case is nothing but irresponsible in extreme and can hardly be justified. The charge in this case was
misconduct by absence. In view of the Governing Standing Orders unauthorized leave can be treated as misconduct. Thus
the order of the Tribunal refusing to accord approval primarily on the ground that in most cases the leave was treated as
leave without pay and that being the position it cannot be said that the absence was unauthorized, would be liable to be set
aside.86 In Ashok Leyland, where the workman was dismissed for assaulting his departmental head, a single judge of the
Madras High Court held that the award of the labour court directing his reinstatement on the basis of sympathetic
consideration was undoubtedly perverse and could not be sustained.87 Once the misappropriation of funds is proved,
maybe for a small or large amount, there is no question of showing uncalled for sympathy and reinstating the employee
into service. The labour court is bound to respect the punishment imposed by the management.88 Where the labour court
had found that the inquiry held by the employer was fair and proper, there is no substance in the contention of the
employer that the labour court had committed an error in not trying the validity of domestic inquiry as a preliminary issue,
and no prejudice was caused thereby to the employer in any manner.89

In Vikramaditya Pandey, the Supreme Court held that ordinarily, once the termination of service of an employee was held
to be wrongful or illegal, normally the relief of reinstatement with full backwages would be available to the employee.
However, it would be open to the employer to specifically plead and establish that there were special circumstances, which
warranted either non-reinstatement or non-payment of backwages.90 In Krishan Kumar, the Punjab and Haryana High
Court held that where the termination of a workman was held illegal and the employee was ordered to be reinstated with
full backwages and service benefits, such employee would be deemed to have worked during the period he remained a
dismissed employee, and would be entitled to be considered for retrospective promotion, if during that period the
management had promoted his juniors to a higher grade post.91 The consequences of reinstatement means restoration of
contract of service and entitlement to backwages, even where the award of the tribunal was silent on the payment of
‘backwages’. Backwages is an implicit, integral part and a necessary inseparable concomitant of an order of reinstatement,
unless proved that the workman engaged himself in some gainful employment or there existed any other circumstance
which deprive him of the said benefit.92 In Ganayutham, the Supreme Court held that the doctrine of proportionality was at
par with the doctrine of Wednesbury’s unreasonableness and unless it was held that the punishment imposed upon the
delinquent was so irrational as to shock one’s conscience and that no reasonable man while reasonably exercising his
power would impose the same, the High Court could not interfere with the punishment.93 In H Nagaraj, the Supreme Court
observed: ‘We fail to see how the Tribunal, when it upheld the inquiry, could have interfered with the quantum of
punishment in this fashion.’94 Fraud and forgery committed by the employee of a bank are serious acts of misconduct
causing substantial loss to the bank and hence his dismissal from service cannot be said to be disproportionate. The finding
of the tribunal that the charge against the employee was not proved cannot be sustained.95 It is difficult to accept that the
labour court in each and every case has a duty under s 11A to reappraise the whole evidence and to give the findings
thereupon.96 In Parma Nanda, the Apex Court held:

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The jurisdiction of the tribunal to interfere with disciplinary matters and punishment cannot be equated with appellate jurisdiction.
The tribunal cannot interfere with the findings of the inquiry officer or the competent authority where they are not arbitrary or
utterly perverse...It is appropriate to remember that the power to impose penalty on a delinquent officer is conferred on the
competent authority either by an Act of Legislature or rules made under the proviso to Art 309 of the Constitution. If there has
been an inquiry consistent with the rules and in accordance with the principles of natural justice what punishment would meet the
ends of justice is matter exclusively within the jurisdiction of the competent authority ...97

Where the tribunal directed that a bank employee, who was dismissed for fraud, misappropriation and unauthorised
absence, be reinstated, quashing the award of tribunal and restoring the punishment of dismissal, it was held that it would
amount to rewarding fraudulent and dishonest conduct.1 Where the labour court, after recording a finding that the inquiry
held was proper, granted relief of reinstatement with 50 per cent backwages, a single judge of the Rajasthan High Court
quashed the award and observed that the said workman not only struck work but also prevented other workers from
attending to their duties.2 Where the employee of a bank was dismissed for a grave misconduct of forging the signature of
an account-holder in a withdrawal slip and obtaining payment, consideration of past record of service or of the question
whether the bank sustained loss were not relevant, and that the order of the tribunal confirming the dismissal did not
warrant interference.3 The discretion available to the tribunal under s 11A to set aside an order of dismissal or discharge or
to direct reinstatement should be exercised in a judicial and judicious manner. If the discretion is exercised on
humanitarian grounds, the order of the tribunal is not sustainable.4 Once the labour court came to the conclusion that the
services of a driver of state road transport corporation were terminated for want of control over steering and lack of self-
confidence, it is not open to it to direct the corporation to engage him in some other post on ‘humanitarian grounds’. The
labour court has no jurisdiction to substitute the punishment with something less.5 Poverty of a workman is not a ground
on which the labour court can condone misconduct and direct reinstatement.6 In ICRI, the Supreme Court held that where
the tribunal agrees with the inquiry officer, there is no necessity for repeating the evidence and conclusion by the tribunal,
even though the tribunal can differ from the findings of the inquiry officer in a properly conducted inquiry on cogent
reasons.7 In TG Marathe, a single judge of Bombay High Court held that the imposition of punishment was truly to be left
to the disciplinary authority, who, on the one hand, was required to maintain discipline among the employees and to see
that the morale of the other employees is kept up and, on the other, while taking disciplinary action, signals should not be
sent out to the effect that any unruly behaviour having wider impact would be dealt with leniently. The tribunal should
interfere only in a case where the punishment is shockingly disproportionate. The conclusion of the tribunal that the charge
was established was correct, but not its order directing reinstatement with 50 per cent backwages.8 In Chandra
Sekharachari, the Supreme Court observed:

...Once the tribunal had found that the charges against the appellant were not established, it was not open to the learned Single
Judge, who had rightly refused to re-appraise the evidence to say that with better proof the charges could have been established.
The learned single judge had no jurisdiction, not even under s 11A of the Industrial Disputes Act 1947 to enter into the question
whether the charges could have been established by better or further evidence. That is not the function of the court or any quasi-
judicial authority. If it is found as a fact that the charges are not established, then the necessary consequences have to follow and,-
as a corollary thereto, appropriate orders are to be passed. There may be circumstances justifying non-payment of full backwages
but they cannot be denied for the reason that the charges could have been established with better proof. If ‘better proof’ was
available with the management, and it was not furnished or produced before the court, a presumption would arise that such proof, if
furnished, would have gone against the management. We are surprised that the view propounded by the learned Single Judge,
which falls in the realm of speculation, has been upheld by the Division Bench.”9

An employer, who wants to avail himself of the opportunity of adducing evidence for the first time before the Tribunal to
justify his action, should ask for it at the appropriate stage. If such an opportunity is asked for, the Tribunal has no power
to refuse. The giving of an opportunity to an employer to adduce evidence for the first time before the Tribunal is in the
interest of both the management and the employee and to enable the Tribunal itself to be satisfied about the alleged
misconduct. Once the misconduct is proved either in the enquiry conducted by an employer or by the evidence placed
before a Tribunal for the first time, punishment imposed cannot be interfered with by the Tribunal except in cases where
the punishment is so harsh as to suggest victimization.10 In SA Kasundra, a single judge of the Gujarat High Court held that
once it was found in the course of adjudication that the delinquent committed several acts of misappropriation, the
conclusion must be that the delinquent acted dishonestly and the dismissal of the workmen from service could not be said
to be illegal. Under s 11A, the tribunal or the labour court does not have unguided power to set aside the order of dismissal
passed by the employer.11 In Pochaiah, the facts were that the High Court having upheld the order of the labour court to
the effect that the order of dismissal passed by the employer was legal and valid, directed the employer to re-employ the
delinquent workman in a lower category as a new entrant. The Supreme Court, while quashing the order of the High Court,

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held that there was no jurisdiction vested in the High Court to direct the employer to re-employ the delinquent employee,
after upholding the punishment.12 In Laxmi Kant, the Punjab and Haryana High Court held that if there was no order of
termination there was no question of holding an inquiry and the workman had himself abandoned the job, and the finding
recorded by the labour court to the effect that there was no termination of his services was correct. It was further held that
the workman was wanting to take advantage of his own wrong, and there was neither equity nor law in his favour.13 In SC
Sharma, the Supreme Court held that even a threat to assault a co-employee amounts to a serious misconduct and the
punishment of removal could not therefore be construed as shockingly disproportionate to the charges held proved.14

In Ghanshyam Sharma, Arun Madan J (for himself and Laksmanan, CJ) of the Rajasthan High Court set aside the order
passed by a single judge quashing the labour court’s order directing reinstatement of a workman. Briefly, the facts of the
case were: A bus conductor was dismissed from service on being found guilty of not issuing tickets to passengers, and the
conductor himself admitted his guilt. The labour court found that the inquiry was perfectly in order, but ordered
reinstatement. A single judge of the High Court rightly quashed the order of the labour court on the well-settled ground
that once the charges of misappropriation, etc, were proved and the domestic inquiry did not suffer from any infirmity, the
labour court in exercise of its jurisdiction under s 11A cannot substitute dismissal with a lesser punishment on
considerations of private benevolence or uncalled for generosity. Viewed in this perspective, the decision given by the
learned single judge of the Rajasthan High Court was right.15 Where a single judge of the Delhi High Court directed the
management of the bank to reconsider the decision of dismissal of a workman, a Division Bench quashed the order and
held that the single judge was not justified in disturbing an administrative order unless it is found to be illegal, arbitrary or
procedurally wrong, and that the bank’s decision did not suffer from any malady which could warrant interference by the
court.16 Where the services of a workman were terminated on the ground that the workman had not reported for duty after
the expiry of leave, it was held that the principles of natural justice must be read into the certified Standing Orders relating
to leave and, so read, it was obvious that the termination of the workman without a show-cause notice and without an
opportunity to the workman to explain his stand, and without any inquiry had to be treated as non est.17 In the garb of
exercising powers under s 11A, the labour court cannot grant relief of reinstatement to casual workers amounting to
regularisation, when there are no sanctioned posts in statutory bodies and Governmental organisations.18 In a case where
the services of a conductor, who was appointed as a probationer for two years on daily wages, were terminated on being
found that he had not issued tickets to twelve passengers of whom two had paid fares to him, the labour court, in exercise
of the powers conferred on it under s 11A, cannot order reinstatement on the ground that such termination amounts to
retrenchment; more so, it being a case of ‘loss of confidence’, no inquiry was required to be held.19 Where a driver of state
transport corporation was dismissed for having reported for duty in the night shift in a drunken state, there could be no
other punishment except dismissal and the labour court committed a grave error of law in directing reinstatement of such a
driver.20

In Precipenium Valve, the labour court, having held that the misconduct committed by the workman was serious, cannot
direct payment of four years of wages by way of compensation in lieu of reinstatement and such an award is liable to be set
aside.21 Where the labour court upheld the order of dismissal for proved misconduct of slapping a co-worker while on duty
and awarded monetary compensation of Rs 5,000/- in lieu of reinstatement, the High Court held that the award of labour
court did not warrant interference.22 Where the charges of forgery and misappropriation of bank’s fund were proved in the
inquiry and the tribunal directed reinstatement of the workman without backwages holding that the charges were not
proved, the High Court, quashing the award, held that the findings of the tribunal were perverse on facts.23 In BS Hullikatti,
the Supreme Court quashed the order of the labour court reducing the punishment of dismissal to one of reinstatement with
50 per cent backwages even after the finding recorded by the labour court that one of the allegations against the conductor
that he had issued tickets of lesser denomination as against the correct denomination was proved in the domestic inquiry,
which award was confirmed by the single judge and the Division Bench of the High Court. The Supreme Court further
held that once the allegation of such a nature had been proved, interfering with the order of dismissal only amounted to
showing uncalled for sympathy in favour of the workman.24 Where the labour court directed the reinstatement of a
conductor dismissed for non-issue of tickets to passengers holding that the charge was not proved, the High Court quashed
the order of the labour court and upheld the dismissal holding that strict and sophisticated rules of evidence do not apply to
a domestic inquiry.25 The dismissal of a workman employed in a watch factory for a misconduct involving the acceptance
of a watch from a third party for repair without the company’s permission is a serious misconduct and dishonesty and the
punishment of dismissal cannot be termed disproportionate or excessive to the gravity of the proved misconduct.26 Where a
workman was dismissed after proper inquiry for a misconduct involving misappropriation, it is neither proper nor fair on
the part of the labour court to substitute the finding and confidence of the employer with that of its own by ordering
reinstatement. In such a case, the labour court cannot exercise its discretion and alter the punishment.27 In VP Ramulu, the
facts were that the labour court directed reinstatement of a conductor on the ground that the punishment of dismissal was
disproportionate as the amount misappropriated was a paltry sum of Rs 2. A single judge of the Andhra Pradesh High
Court quashed the said order and restored the punishment of dismissal. In appeal, Sinha CJ of the AP High Court upheld
the order of the single judge and observed that the decision of the employer did not warrant interference by the labour court
in exercise of its jurisdiction under s 11A.28

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Where the workman, who secured employment on a fraudulent representation and by furnishing forged educational and
academic documents, was dismissed from service, it was held that such employment was liable to be recalled at the option
of the employer. The fact that the workman had continued in service for a long period does not create equity in his favour
or estoppel against the employer. The fact that the employer has not prescribed any minimum qualifications for
appointment to the post in question is immaterial.29 In a case of dismissal for a misconduct involving assault of a co-
workman, the labour court cannot interfere with the punishment in exercise of its jurisdiction under s 11A. Interference is
called for, only in cases where the punishment is shockingly disproportionate.30 A bank employee, who was dismissed
after holding an inquiry for acts of misconduct inter alia involving the floating of a cooperative society, cheating and
misappropriation of funds, and acting in a manner prejudicial to the interest of the bank, is not entitled to any relief and the
decision of the tribunal not to grant any relief to him does not call for interference.31 Where it is found that the workman
was dismissed for putting up an unauthorised construction in the land belonging to the employer, it is wrong for the labour
court to have passed an award directing reinstatement. The award was set aside and the dismissal upheld.32 The mere fact
that the same labour court took a sympathetic view in one case of dismissal for unauthorised absence and ordered
reinstatement on the ground that the misconduct was not so grave as to warrant dismissal, does not mean that in all
subsequent cases also, the same view should be taken.33 Where a driver was dismissed for being found in a drunken state in
the driver’s rest seat after his turn of driving the bus was over and after completing his journey, the punishment of
dismissal was disproportionate to the gravity of the misconduct, hence, ordered reinstatement but without backwages.34
Where the tribunal held that the finding of the inquiry officer was not perverse, despite the fact that the said finding was
based on the testimony of only one witness who had not seen the accident and no other eye witness was examined, the
High Court held that the order of the tribunal itself requires to be interfered with and set aside.35

In Maharashtra GK Union, a single judge of the Bombay High Court quashed the order of the labour court upholding the
dismissal, disclosed the facts that the employer failed to sustain the charge of misconduct even after adducing additional
evidence before the labour court.36 In V Velayudham,37 where the dismissal of a conductor was upheld by the labour court
but was modified by the High Court directing the employer to appoint him as a ‘cleaner’ on compassionate grounds, the
Supreme Court, while setting aside that part of the order of the High Court, held that there was no reason for the High
Court to have substituted its discretion for that of the labour court. In Gajanan Vibhute, a single judge of the Bombay High
Court held that where the workman was dismissed on the basis of proved misconduct, and the dismissal was also upheld
by the labour court, minor contradictions could not disturb the findings of fact based on record and the High Court in its
writ jurisdiction would not reappreciate the evidence.38 Where the workman was dismissed after due inquiry for
misbehaving with his superior lady officer, the punishment of dismissal was justified.39 In Dev Singh, the facts were: a
senior assistant was charge-sheeted for misplacing a file which was entrusted to him, and after holding enquiry, he was
dismissed from service. The writ petition filed by the workman in the Punjab and Haryana High Court was dismissed. In
appeal, it was contended before the Supreme Court that it was a charge of misplacement of the file and no motive was
attached to it and that the punishment imposed was shockingly disproportionate. Counsel for the workman further
contended that it was open to the Supreme Court to interfere with the punishment in the facts and circumstances of the case
and relied upon the decisions of the court in Bhagat Ram,40Ranjit Thakur,41Mahesh Kumar,42 in support of the said
contention. Setting aside the dismissal order, Hegde J (for himself and Singh J) of the Supreme Court held:

Applying the said principle laid down by this Court in the cases noted hereinabove, we see that in this case the appellant has been
serving the respondent-Corporation for nearly 20 years with unblemished service. .. A reading of the charge sheet shows that the
misplacement alleged was not motivated by any ulterior consideration and at the most could be an act of negligence, consequent to
which the appellant was unable to trace the file again.. .. We think the punishment of dismissal for mere misplacement of a file
without any ulterior motive is too harsh a punishment which is totally disproportionate to the misconduct alleged and the same
certainly shocks our judicial conscience.. .. while upholding the finding of mis-conduct against the appellant, we think it
appropriate that the appellant be imposed a punishment of withholding of one increment including stoppage at the efficiency bar in
substitution of the punishment of dismissal awarded by the disciplinary authority. We further direct that the appellant will not be
entitled to any backwages for the period of suspension. However, he will be entitled to the subsistence allowance payable up to the
date of the dismissal order.43

In Lalit Popli, the employee working in Canara Bank was dismissed after holding an enquiry. The brief facts were: on a
complaint made by one Mr. SV Deshpande, a customer of the Bank, to the police that an amount of Rs. 1.07 lakhs from his
account in five instalments during the year 1991. After conducting preliminary investigation, the employee was charge-
sheeted alleging that he issued a cheque book to one Mr. Mohinder Kumar on the basis of an authorization letter purported
to have been issued by Mr. Deshpande, resulting in the former withdrawing money by forging the signature of Mr.
Deshpande; and that the employee did not verify the signature either at the time of issuing the cheque book or at the time
of withdrawal of the amount; and that the forensic examination revealed that the signature was forged on all the aforesaid

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occasions. In the course of investigation, it was further observed that the authorization letter purported to have been signed
and issued by Mr. Deshpande was not found in the records. The appellate authority rejected the appeal made by the
employee. Accepting the contention of the employee that the enquiry officer should not have come to the conclusion of
establishment of the charges on the basis of the report of the handwriting expert, a single judge of the High Court had set
aside the order of dismissal. In appeal, the division bench quashed the order of the single judge on the ground that while
exercising jurisdiction under Art 226, the High Court could not act as an appellate court. Dismissing the appeal filed by the
employee, Pasayat J (for himself and Patil J) of the Supreme Court held:

.. . the employee accepted that there was some lapse on his part but he pleaded lack of criminal intent. A bank employee deals with
public money. The nature of his work demands vigilance with the inbuilt requirement to act carefully. Any carelessness invites
action.. .. even to the naked eye the mistakes in spelling of ‘signature’ are visible and should not have escaped the eyes of a bank
employee who is supposed to be trained and equipped to notice such glaring mistakes. The Enquiry Officer has noticed the
similarities highlighted by the Handwriting expert in the disputed document and the admitted signatures of the employee to show
how the similarity is visible and even any layman can notice the similarity. These were factual conclusions.. .. Considering the
limited scope of judicial review, the Division Bench was right in upholding the order of dismissal by setting aside the learned
single Judge’s order by which interference was made with it. We find no reason to differ from the conclusions of the Division
Bench. The appeal is without merit and is dismissed accordingly.44 (paras 20-22)

In Kailash Nath Gupta, the Supreme Court held that the power of interference with the quantum of punishment is
extremely limited, but when the relevant factors are not taken note of, which have some bearing on the quantum of
punishment, certainly the Court can direct re-reconsideration or in an appropriate case to shorten litigation, indicate the
punishment to be awarded. Applying the said principles to the instant case, it was found that the appellant-employee, while
working as a Manager in a Public Sector Bank had (i) allowed an advance to a borrower under the SEEUT scheme, (ii)
granted vehical loan to a borrower without adjusting the outstanding loan amount, and (iii) allowed advances to certain
borrowers with a view to extend him the benefit of subsidy money, etc. An enquiry was held into the charges and he was
dismissed. Remitting the matter to the High Court for fresh disposal, Patil J (for himself and Pasayat J) of the Supreme
Court observed:

.. . there was no occasion in the long past service indicating either irregularity or misconduct of the appellant except the charges
which were the subject matter of his removal from service. The stand of the appellant as indicated above is that though small
advances may have become irrecoverable, there is nothing to indicate that the appellant had misappropriated any money or had
committed any act of fraud. If any loss has been caused to the bank (which he quantifies at about Rs. 46,000/-) that can be
recovered from the appellant. As the reading of the various articles of charges go to show, at the most there is some procedural
irregularity which cannot be termed to be negligence to warrant the extreme punishment of dismissal from service.. .. These
aspects do not appear to have been considered by the High Court in the proper perspective. In the fitness of things, therefore, the
High Court should examine these aspects afresh. The consideration shall be limited only to the quantum of punishment and not to
any other question. As the appellant would have superannuated in the normal course in the year 1994, and the matter is pending for
a long time, the High Court is requested to dispose of the matter within six months from the date of receipt of this order.45 (paras
11 & 12).

(b) Judicial Anarchy at the level of Labour Courts and High Courts

The most disturbing tendency is discernible on the part of the labour courts, industrial tribunals and even High Courts,
while handling dismissals for grave acts of misconduct involving dishonesty, fraud, riotous, violent and disorderly
behaviour on the part of the workmen, admittedly drawing inspiration from a few Supreme Court Judges of yester-years. In
this section, quite a few of these decisions are short-listed for discussion and analysis. In HH Pujar, the Supreme Court,
while quashing the orders of the courts below, held that in view of the fact that the conductor himself admitted that he did
not issue tickets to some 20 out of 136 passengers and further conceded that the enquiry was fairly conducted, the labour
court could not have interfered with the punishment on the ground that the ticket-less passengers were not examined during
the departmental enquiry.46 In TK Raju, the facts were: A sales officer, dealing with LPG cylinders took loans totalling
several thousands from different distributors using or abusing his pivotal position in Bharat Petroleum Corporation and
was found to have committed several other irregularities. He was charge-sheeted and dismissed after holding an enquiry.
While exercising writ jurisdiction, the Kerala High Court, relying on AL Kalra,47 and Glaxo,48 took an ultra-generous view
coupled with sympathy for the delinquent officer, and ordered reinstatement on flimsy and untenable grounds. Quashing
the said order, Sinha J (for himself and Naolekar J) of the Supreme Court, observed:

More than one occasion, different courts have taken pains to explain that Kalra (supra) does not lay down any inflexible rule. In

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the aforementioned situation, the High Court in our opinion committed a manifest error in relying upon Kalra (supra) and Glaxo
(supra), as we have noticed hereinbefore, that the Respondent was not charged in terms of the Rules alone. He was charged for
violation of several other clauses of the Rules. The High Court, therefore, was not correct in coming to the conclusion that as some
of the charges were vague and indefinite, thus, no punishment could have been imposed on the basis thereof.. .. The charges
levelled against the Respondent must be considered on a holistic basis. By reason of such an action, the Respondent had put the
company in embarrassment. It might have lost its image. It received complaints from the Federation. There was reason for the
Appellant to believe that by such an action on the part of the Respondent, the Appellant’s image has been tarnished. In any event,
neither the learned single Judge nor the Division Bench came to any finding that none of the charges had been proved.. .. The
power of judicial review in such matters is limited. This Court times without number had laid down that interference with the
quantum of punishment should not be done in a routine manner.. . .49

Justice Sinha made no secret of his displeasure, and very aptly so, at the way the High Court proceeded to blindly follow
the outrageous decisions rendered by Desai J in the above two cases, which stand as monumental illustrations of the
colossal degeneration that beset judicial disposition and judicial standards. The learned judge was by all standards very
mild in his reproach, even though the learned judges of the Kerala High Court deserved nothing short of an outright
condemnation in the strongest terms for following the unruly decisions of Desai J, in preference over Tata Oil
Mills,50Mulchandani,51 and MS Dhantwal.52 All the said three cases were decided by three-judge benches, which laid down
the law relating to disciplinary action and dismissal on firm grounds, and are binding on the benches that decided AL
Kalra, Glaxo, etc. Apart from displaying lawlessness and disorder both in the reasoning and conclusions, Desai J was
further guilty of judicial indiscipline of grave magnitude in so far as he struck out in a weird and chaotic direction. In the
light of the fact that a few judges of High Courts, and even of the Supreme Court, continue to be inspired by the judicial
anarchy infused by Desai J in the decision-making process, it is considered expedient to devote some space to the quality
of the decisions rendered by Desai J, not only in AL Kalra and Glaxo, but also in Rajender Kindra,53 and Rasiklal Patel,54
all of which were decided by him more or less in the same year. The following passages from the book “Industrial
Jurisprudence: A Critical Commentary” on the disgusting judicial approaches, not only of Desai J, but also of his two
brother judges, i.e., Krishna Iyer and Chinnappa Reddy JJ, and their dysfunctional consequences for the industry, economy
and society, deserve mention:

The sudden and steep deterioration in the judicial process began during mid-70s, strangely coinciding with National Emergency.
The three learned judges, namely, Krishna Iyer, Desai and Chinnappa Reddy, can be aptly described as the ‘founding fathers of
judicial chaos’. A few decisions rendered by the trio have been analysed in the preceding paragraphs, and a few more in the
following pages. In this connection, it is important to note that a judicial decision is not only a source of rights as regards the
disputing parties, but is also a source of law as regards the world at large. As the former, it is ‘Judgment’ and as the latter, it is the
‘Precedent’. What the three learned judges ignored with impunity was that their decisions together with the ratio decidendi were
likely to set a Precedent—and a bad Precedent indeed— for the courts of inferior jurisdiction. It was like a shot-in-the-arm for the
Presiding Officers of the Labour Courts and Tribunals, who, while exercising jurisdiction u/s. 11A of the IDA, began looking at
themselves more in the role of “para-union leaders” and “champions of working class”, than as judicial officers. The staggering
number of obnoxious awards passed by labour courts and tribunals - ordering reinstatement with full back wages, even in cases
involving grave acts of misconduct - amply testifies the contagious influence of the three judges on them.

The three judges had literally flashed a green signal to unruly workers and militant trade union leaders like Datta Samant,
Suryanarayana Rao, et al, together with an assurance of the kind: “Don’t worry! Continue with your good work!! We are here to
protect your interests!!!” While it does not take more than a stroke of pen for an irresponsible judge to destroy law and order, it
would certainly take ages for his successors to restore them. That is what exactly has been happening during the past couple of
decades with a few right-thinking judges of 1990s and thereafter swimming across the current to restore ‘justice’ in the Seat of
Justice! The seal of judicial approval put on serious acts of misconduct, and in some cases with criminal overtones, had only
fuelled the fire of inter-union and intra-union violence, physical assaults of managerial and supervisory personnel, and the like,
during the late 1970s and the whole of 1980s in several industrial belts, prominent among them being the Whole of West Bengal,
Bombay-Thane-Belapur, Bangalore-Whitefield-Hosur and Hyderabad-Sanatnagar-Patancheru.

Even though it would be unfair to place the entire blame at the door of the Supreme Court, notwithstanding a few extremist-
anarchist judges like Desai J, yet the Labour Courts and Tribunals cannot escape the charge of actively supporting violence,
riotous and disorderly behaviour by their generous orders of reinstatement of workmen, who were dismissed for acts of misconduct
of grave magnitude. And, strangely and sadly, that is the extent to which judicial standards of labour courts have nose-dived during
the past 25-30 years! It is not as if all the employers have the means to fight cases up to the level of Supreme Court. In such a

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situation, the decision of the Labour Court or Tribunal, and in some cases that of the High Court, becomes final. If a confirmed
goon or criminal is directed to be reinstated and the court order acquires finality, what is the fate of the employer, the industrial
establishment and the people-at-work therein? Secondly, what kind of message is being sent by labour courts to
employees/workers? Is it necessary to answer these questions elaborately!? It is not in doubt that, in the recent past, the learned
Judges of Supreme Court and (a few) of High Courts appear to have firmly resolved not to allow this industrial hooliganism to
thrive, as is manifested in their outright condemnation of such acts as well as the indifference and leniency displayed by inferior
tribunals. Even so, here is the factual material extracted from a monograph published by the All India Organisation of Employers
(AIOE) on ‘industrial violence’ involving not only assaults, but also homicide of supervisory and managerial personnel by militant
workers, which should be an eye-opener to the over-generous Presiding Officers of Labour Courts and Tribunals.55

(Note: The text has been divided into paragraphs and arranged serially numbered by the author to facilitate convenience of
reading).
(i) .. . following 2008, there is sudden increase in labour unrest in certain industry pockets which came at a time when strikes
have actually been on the decline in the country. While strikes and protests are common global phenomena, in the recent
years India is facing an alarming situation with the increase in number of unrest, leading to violence and killings which
reminds us of the trade union militancy period of 1970s and 80s. This surge in industrial unrest has become a concerning
situation for all.
(ii) On September 22, 2008 the CEO of Grazianotransmissioni India, the Indian unit of an Italian auto component maker, was
clubbed to death by a group of 200 workers.
(iii) In another incident, in March 2011, a Deputy General Manager (Operations) of Powmex Steel, a unit of Graphite India
Ltd. was killed after his vehicle was set afire by irate workers
(iv) In November 2010, an Assistant General Manager of Allied Nippon, an auto parts maker, was stoned to death by angry
workers.
(v) In September 2009, the Vice-President (HR) of Pricol was beaten to death by agitating workers.

(v-a)* On July 19, 2012, Mr. Avanish Kumar Dev, General Manager - HR of Maruti Suzuki, Manesar, was burnt alive
in the administration building of the factory, in the course of a major rioting on the part of workers

*Note: The above incident, which took place subsequent to the publication of the AIOE monograph, has been
added by the author.

(vi) These surging incidents of industrial unrests are for sure denting investor’s confidence in the country being a safe
investment destination and a preferred global investment hub. It has also led to production and financial losses to
companies operating in the country. If left unchecked, this ongoing turmoil will surely send wrong signals to foreign and
domestic investors, which will directly affect the country’s economy and employment generation targets. Today,
industrial relation needs more detailed understanding of the needs and mindsets of workers and management, to foster
harmonious functioning of enterprises to promote growth.

Recent Unrest

(vii)Most of the adverse unrests were witnessed in the manufacturing, textile and automobile and auto auxiliary industries
during 2008-11 and names involved — Hyundai, Honda, Nokia, Bosch, Pricol, Maruti Suzuki to name a few - most of
which represent the best across industries.
(viii) Here worth mentioning is the calamitous case of Maruti Suzuki India Ltd., Manesar Plant the largest automobile
manufacturing company in India. The strike at Maruti’s Manesar Plant started on 4th June, 2011 and continued
throughout the year in three phases, adversely affecting the company’s production and also the State Revenues. The
Haryana State Government declared the strike as illegal and imposed ban by passing prohibitory orders and referred the
matter to the local labour court. But even this could not stop the workers from striking. As per estimation, Maruti Suzuki
made a loss of Rs. 400 million or roughly $9 million a day in revenue because of the strike, with 1,200 vehicles a day in
lost output. The striking workers were demanding the registration and recognition of a new union at the Manesar plant,
besides retaining contract labourers for the two upcoming new units inside the complex and withdrawing disciplinary
action against the 11 office bearers of the new union. The strike not only affected Maruti Suzuki but also directly

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affected the supply chain of vendors supplying auto-parts directly to Maruti. Over 100 units suffered a virtual shut-
down, while 300-odd manufacturers, which were indirect vendors were reported a daily loss to the tune of 15-20%.
Moreover, there were numbers of strikes that took place throughout the country during 2011.
(ix) About 900 workers launched a wildcat strike on 16 March that continued for more than a month at General Motor’s India
Ltd., Halol plant at Gujarat, opposing the working conditions in the factory and demanding wage hikes, making the
company suffer a production loss of above 1,500 units. This was the second such incident at Halol in five months.
(x) The leading tyre manufacturer MRF was compelled to declare lockout at its Kottayam plant in Kerala following labour
unrest due to suspension of a worker on disciplinary ground.
(xi) The management of the Hindustan National Glass Industries Limited had to issue suspension of worker for an indefinite
period after violence erupted in July at Rishra factory premises in West Bengal over a wage revision demand, leading to
the closure of the factory.
(xii)Tata Group firm Voltas also faced a similar issue with its workers protesting against the company’s recruitment policy
and wages.
(xiii) The Hindalco Industries, Kochi had to declare lock-out of its plant for about 10 months, for an odd number of 200
employees went on strike demanding an upward revision in monthly wages.
(xiv) Workers at Moser Baer’s Noida facility workers struck a weeklong strike in October demanding a revision in wages and
bonuses.
(xv) Over all, in 2008-11, an increased number of strikes were witnessed in India. To name a few - Satari based Automobile
Corporation of Goa Ltd., Nestle, Mahindra & Mahindra, Hyundai India’s Chennai plant, Rico Auto Limited, Honda
Motorcycle and Scooter India (HMSI), Honda Siel Cars, Haldia Dock Complex of Kolkata Port Trust, Bosch, Toyota
Kirloskar Motors, Pepsico etc.
(xvi) Looking into the adverse industrial unrests scenario in the country, some enterprises were even planning to shift their
base out of the country or to restructure their business operation. As for instance, the Rs. 743 crore automotive
instruments maker Prical, which was recovering from a labour strife that claimed the life of a senior executive at its
Periyanaickanpalayam unit in Coimbatore, Tamil Nadu in September, 2009 was working on a restructuring plan from
automotive business.
(xvii)In another case, frustrated with the continues recurring of labour unrest, Japanese auto major HMSI had threatened to
shut operations at its wholly-owned two-wheeler plant in Haryana and has petitioned the Punjab and Haryana High
Court for relief or else it may shut operations in India if the situation persists. Earlier the Honda power had moved out
from Uttrakhand and shifted its base to Noida following serious labour problem.
(xviii) Even, Toyota Motors, Bangalore in 2006, following a strike, went on to say that it will stall its future
investment plans in the state.
(xix) It is very often noticed that some of the industrial belts are quoted as strike prone zones, due to frequent re-occurrence of
industrial unrest which can be evaluated from the disputes recorded during the last few years. The Gurgaon-Manesar belt
of Haryana is often referred to as notorious belt because of the number of recurring continues labour disputes during the
last five years impacting the industrial environment in the state.
(xx) Though there are no concrete figures on the estimated losses due to the unrest, it is believed that they are to the tune of Rs
800-1000 crore, the biggest brunt being borne by Maruti Suzuki India Ltd. and Honda Motorcycle and Scooter India
(HMSI), which has seen production falling by above 65% and non-operation of a new third production line.
(xxi) A leading newspaper in 2011 stated that an economic survey has quoted Gujarat at the top of labour unrest chart due to
highest number of strikes and other forms of labour unrest on accounts of various financial and disciplinary issues
despite of favorable industrialization policy.56 (Italics supplied).

Supplementary up-date: On January 27, 2012, the workers of Regency Ceramics, Yanam (near Kakinada) went on a rampage
and attacked Mr. KC Chandrasekhar, Vice-President of the Company, who succumbed to the injuries in a hospital in Kakinada.
The factory was thereafter closed.

Note by the Editor: It is not out of place to mention that the editor of this book was himself an Industrial Relations Manager for
nearly 25 years (from the 1970s to 1990s) in different reputed manufacturing organizations and was a witness to the trade union

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militancy and worker violence of grave magnitude in various states and parts of the country. Almost all the companies listed in (xv)
above are progressive organizations and best paymasters, not only by Indian standards, but by international standards even.

It is hoped that the Presiding Officers of Labour Courts and Tribunals read this before showering uncalled for sympathy on goons,
and mercy on hooligans - not at their own expense - but of employers! Apart from strikes, go-slow and other kinds of work-
stoppages, it is startling that five senior executives of industrial organizations were killed by militant workers at different places
within a span of four years! Those many Personnel & Industrial Relations Managers had not lost their lives at the hands of militant
workers in some 30 years of worst and turbulent IR history of the country during the period from 1960s to 1990s! Is it civilized for
adjudicators, particularly at the trial court level, to remain blind to the ground realities and proceed to decide cases in a callous
and irresponsible manner?57

(c) Restoration of Sanity in Judicial Disposition and Judicial Process

The following analysis is again drafted from the aforesaid book on Industrial Jurisprudence for the benefit of the civilised
citizens, lawyers, academics, students of law and, most importantly, for the judges of labour courts and tribunals, in the
fond hope that they would do some soul-searching with special reference to the kind and quality of judgments that are
being rendered by them in this branch of law, to the absolute detriment of equity, fair play, good conscience and the very
sense of justice.58 The reasoning and conclusions of Desai J, with all the misstatements of law and judicial abnormalities,
did not obviously find favour with several right-thinking judges during the 1990s, as can be seen from the following
decisions of Kerala and Bombay High Courts. The first in this chain is Bhavani Metal, in which Dhanuka J, of Bombay
HC, while upholding the dismissal of the workman, observed that Mulchandani had been merely distinguished in Glaxo,
but had not been overruled, as both were judgments of co-ordinate Benches; that both the judgments were operative and
binding, each in its own sphere.59

The second one is that of Sukumaran J, of the Kerala High Court in BPL India, which is in a class by itself in so far as the
learned judge adopted a down-to-earth approach, unembellished by platform rhetoric or ultra-radical ideological overtones.
The facts of the case, in short, were: The workmen resorted to a strike on certain issues. Five workmen, who assaulted
management staff outside the main gate of the factory, were charge-sheeted and eventually dismissed. The relevant
standing order reads: ‘Riotous and disorderly behaviour during working hours within the premises of the company or any
act subversive of discipline either within or outside the premises of the company’. The Labour Court, while observing that
the enquiry was in order, nevertheless ordered reinstatement on the ground that the misconduct took place outside the
factory. Quashing the order of the Labour Court, Sukumaran J, observed:

Till the Glaxo Laboratories case, no decision of any court had referred to Standing Orders as a Penal Statute. The Supreme Court
has in Glaxo Laboratories case (supra), no doubt, now made such an observation. That has to be noted by the courts. ...Glaxo
Laboratories case has not given any interpretation which would render the Standing Order a dead letter. …A question of
interpretation and the invocation of the principles of interpretation would arise only if there be ambiguity in the provisions. Absent
ambiguity, interpretational exercises are irrelevant. …The assault and attack took place just before the factory gate. It was referable
to a strike situation of the factory concerned. Those assaulted and attacked were officers of the management. They were proceeding
to attend the work, though the strike was on. The striking workers had their agitation and shed at the factory gate itself. It is then
abundantly clear that the provocation for the assault and attack was not a private feud, or an individual conflict. ...The decision is
fully covered by the Tata Oil Mills case. ...Tribunal committed an error of law when it thought that no misconduct could be
posited. ...It has, therefore, to be, and is, hereby quashed.60

While making a general observation on the pressing need to eschew industrial violence and preserve order and discipline,
the learned judge observed:

Discipline in an establishment has to be preserved at all costs; almost like the apple of the eye. Violence, crude violence, directed
against the top managerial personnel, would be the swan song of industrial peace. No worker can embrace violence as a motto of
grievance redressal. The tragedy gets aggravated when viewed in the background of a nation where non-violence was a well-
canvassed creed. ...Industrial Tribunals should not develop cold feet, when they have to deal with hard cases, where the very
structure, the morale and discipline of an industrial establishment are imperilled. I have no hesitation in holding that the
seriousness and gravity of the misconduct attracts serious and grave punishment. If the management thought that dismissal was the
proper punishment, that cannot be characterised as viciously unreasonable, justifying interference in writ jurisdiction. The court

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has only to uphold and declare the validity of the managerial action in such circumstances. (ibid.) (Italics supplied).

It is a great relief to find that ‘sanity’ and ‘good sense’ have not vanished from higher judiciary, despite a few judges of the
hue and shade of Desai and Reddy JJ, who condoned with impunity grave acts of misconduct involving militancy,
violence, fraud and misappropriation, with absolutely no concern for the larger interests of the industry and industrial
community. The decision of Sukumaran J, came as the much-awaited shower to the parched land. The highly irresponsible
decisions by the likes of Desai, Iyer and Reddy JJ, during the 1970s and 1980s, graduated themselves to the level of
judicial rewards to criminals and incentives for resorting to violence. Justice Sukumaran manifestly rejected the line of
reasoning of Desai J, and rightly followed Tata Oil, MS Dhantwal and Mulchandani.

The third case, which deserves a mention is that of Srikrishna J, of Bombay High Court (as he then was), in Mather Platt.
In a somewhat similar set of facts as BPL, the learned judge rejected Glaxo Laboratories and followed MS Dhantwal and
Mulchandani. The extract from his decision, which has a refreshing impact on an otherwise chaotic Industrial relations
scene, is reproduced below:

The proposition of law deducible from a conspectus of authorities, during the period 1953 to 1975, appears too firmly settled and
could not have been intended to be dislodged, by a side wind, by the pronouncement in Glaxo Laboratories case. It is difficult to
accede to the contention advanced on behalf of the petitioner that the judgment in Glaxo Laboratories’ case is a radical departure
from the law laid down in Mulchandani’s case. Both Mulchandani and Glaxo Laboratories were judgments of Benches of the
Supreme Court consisting of three Judges. There is no evidence in the Glaxo Laboratories’ case (supra) that the law laid down in
Mulchandani’s case (supra), was departed from or, much less, intended to be over-ruled. ...In my view, there is no difficulty in
holding that it is the law laid down in Mulchandani’s case which must apply to the petitioner’s case. ...As I read them, with great
respect, the observations in the Glaxo’s judgment must be taken to be confined to and arising out of the peculiar phraseology of the
Standing Order which was before the Supreme Court. I am in respectful agreement with the observations of the Supreme Court in
Glaxo.. . In my judgment, interpreting the Standing Order applicable to the petitioner’s case, in the manner suggested by the
petitioner’s counsel, would make it operate as a ‘rogue’s charter’.61 (Italics supplied).

On the facts of the case, Srikrishna J, went on to observe:

Unfortunately, the section of workmen led by the present petitioner...to the residence of Moses in the dead of the night, not for
beseeching him to give up his thinking nor for preaching the benefits of unison in thoughts or deeds, but to overawe and silence
him by sheer muscle-power. They call upon him to open up the doors of his house, and upon his declining to do so, break open the
front and rear doors. They march into his house, like a band of maraudering goons; they assault the lady of the house, the son and
daughter-in-law of Moses and also Moses. ...If this be the conduct of the workmen...can it be said that this was an assault for a
purely and personal and private matter unconnected with the industrial relations...? Looked at from the point of view of law or
common sense which are not sworn enemies - I think that the answer can but be negative. (Italics supplied)

The mild tone and tenor of Sukumaran and Srikrishna JJ, are understandable, in the light of the fact that they were
delivering judgments qua judges of High Courts. That the ratio of Glaxo Laboratories had ruffled the judicial conscience
of many right thinking judges is not in doubt. It goes to the credit of Sukumaran and Srikrishna JJ, that they rendered
yeomen service to the cause of justice and set the tone for a saner judicial approach to cases involving violence and
hooliganism among workers.

The fourth one is BPL Systems, in which MJ Rao CJ, of the Kerala High Court (as he then was) held:

The case in Mulchandani... is directly in point. ...The present case fits squarely into the above case (supra). Likewise in Lala Ram
(supra) the Supreme Court held that if there was ‘nexus’ between the misconduct and the employment, it was sufficient. In the
light of the above dicta, the present case of dismissal was rightly upheld by the Industrial Tribunal. In our view, in Glaxo
Laboratories...Supreme Court, on facts, held that there was no misconduct within the scope of the Standing Orders. ...Glaxo
Laboratories’ case cannot therefore be said to have deviated in principle from the ratio of earlier cases decided by Benches of three
Judges.62

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Again, the softer observations made by the learned Chief Justice, like those of Srikrishna and Sukumaran JJ, are
understandable, notwithstanding the fact that the gross abuse of judicial power by Desai J, does not call for anything short
of an outright condemnation in the strongest possible terms and language.

The fifth case is that of Municipal Corporation of Greater Bombay, in which the facts were: a clash among three rival
unions (led by M/s. George Fernandez, Datta Samant and Baburao Patil) snowballed into violence involving pelting of
stones on the BEST vehicles, damage to the property of undertaking, and injuries to police personnel. The police rounded
up several workers and registered cases under various sections of the IPC. The workmen were charge-sheeted and
eventually dismissed. The Labour Court set aside the dismissal on the ground inter alia that the incident took place outside
the premises of the establishment. Quashing the order of the Labour Court, Pendse J, held:

The Supreme Court in Glaxo’s case specifically observed that the question as to whether there is a causal connection or a nexus
with the place of work will have to be determined. ...it is futile to suggest that even if stones are pelted and damage is done to
BEST buses, the action will not amount to misconduct because the buses were not on the premises of the undertaking. ...the
conduct clearly amounts to misconduct which attracts the Standing Orders. It is necessary to take a pragmatic approach in such
matters and not a technical approach which would defeat the cause of justice and would cause untold hardship to the Undertaking
which is rendering public service. The contention urged on behalf of respondent...would give charter to the employees to
misbehave in the running buses and avoid the consequences.63 (Italics supplied).

Five decisions in a row involving similar facts as of Glaxo bear ample testimony to the fact that the learned judges of High
Courts had to swim against the current and perform an unenviable task to undo the damage done to the cause and sense of
justice by Desai J. It is not in dispute that Glaxo infused a score of obnoxious elements into the realm of industrial
jurisprudence. All the five learned judges, i.e..., Dhanuka, Sukumaran, Srikrishna, MJ Rao and Pendse, JJ, deserve to be
complimented by every sane and right-thinking citizen, and the gratitude of every member of the industrial community for
squarely rejecting the intellectual insolvency of Desai J, as reflected in Glaxo, which bore on its forehead the brand of
‘irrationality’ as picturesquely described by Lord Diplock in CCSU thus: ‘By irrationality, I mean what can now be
succinctly referred to as ‘Wednesbury unreasonableness’. It applies to a decision which is so outrageous in its defiance of
logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could
have arrived at.’64 In Bharat Fritz, in which a few workmen were dismissed, the findings recorded by the High Court
showed that:

(i) the workmen had gone into chamber of the Company’s President in an aggressive mood;
(ii) they threatened him with dire consequences if the notice was not removed;
(iii) they confined him to his room and came very close to him with gesticulations and fisted hands;
(iv) they did not go out in spite of request and shouted slogans stating that the President should not go out; and
(v) they stayed there till the President gave instructions to his staff to remove the notice.

Despite all this, the High Court took a very liberal and generous view of the matter and held that the said acts were not that
grave as to deserve the punishment of dismissal. Quashing the order of HC, Justice Agarwal observed that the said acts
were subversive of discipline and that, taking the facts and circumstances of the case as also the interests of the industry
into consideration, it would not be desirable and expedient to direct reinstatement of these workmen. On this view, the
learned judge ordered payment of compensation in lieu of reinstatement.65 In TELCO, the facts disclosed that the workman
was in unauthorised occupation of a company’s quarter. The suit filed against the workman for vacation was decreed in
favour of the company. When the Town Warden went to execute the decree along with the Nazir of the Civil Court, the
workman assaulted him causing serious injuries. The Labour Court and High Court held that the punishment of dismissal
was disproportionate and ordered reinstatement. Quashing the orders of the courts below, and very rightly so, Pasayat J, of
the Supreme Court, held:

We find that the Labour Court has found the inquiry to be fair and proper. The conduct highlighted by the management and
established in inquiry was certainly of very grave nature. The Labour Court and the High Court have not found that the misconduct
was of any minor nature. On the contrary, the finding on facts that the acts complained of were established has not been disturbed.
That being so, the leniency shown by the Labour Court is clearly unwarranted and would in fact encourage indiscipline. Without
indicating any reason as to why it was felt that the punishment was disproportionate, the Labour Court should not have passed the
order in the manner done.66

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At this point, it is essential to mention Kerala Solvent Extractions, one of the greatest decisions rendered by the Supreme
Court in the ‘post-Desai phase’, which can be rightly described as the fore-runner of several decisions, which restored
sanity in the reasoning process. The very fact that several right thinking Judges of the High Courts and the Supreme Court
have heavily relied upon the observations made in the said case bears eloquent testimony to this assertion. Reverting to
Kerala Solvent Extractions, the facts of the case disclosed that the workmen concerned were employed by the company as
badli headload workers in godowns. A notice was issued stating that only those persons who had studied upto VIII
standard or below should apply. The workmen, who applied for employment stating that they had passed VII standard, did
not specifically mention that they had passed SSLC. It was only after their appointment that the appellant came to know
that they had passed SSLC and that there was a violation of the notification. The appointments were made in the year
1988, and the services of the workmen were terminated by the management in 1989. The labour court ordered their
reinstatement with continuity of service but without back wages. Both the single judge and Division Bench of the Kerala
High Court upheld the order of labour court. Quashing the orders of all the courts below, a Bench comprising
Venkatachaliah CJI, Mohan and Jeevan Reddy JJ of the Supreme Court, made some enlightened observations, which
deserve special mention:

Sri Vaidyanathan, learned senior Counsel for the appellant, submitted, in our opinion not without justification, that the Labour
Court’s reasoning bordered on perversity and such unreasoned, undue liberalism and misplaced sympathy would subvert all
discipline in administration. ...He further submitted that this laxity of judicial reasoning will imperceptibly introduce slackness and
unpredictability in the legal process and, in the final analysis, corrode legitimacy of the judicial process. ...We are inclined to agree
with these submissions. In recent times, there is an increasing evidence of this, perhaps well-meant but wholly unsustainable,
tendency towards a denudation of the legitimacy of judicial reasoning and process. The reliefs granted by the Courts must be seen
to be logical and tenable within the framework of the law and should not incur and justify the criticism that the jurisdiction of
Courts tends to degenerate into misplaced sympathy, generosity and private benevolence. It is essential to maintain the integrity of
legal reasoning and the legitimacy of the conclusions. They must emanate logically from the legal findings and the judicial results
must be seen to be principled and supportable on those findings. Expansive judicial mood of mistaken and misplaced compassion
at the expense of the legitimacy of the process will eventually lead to mutually irreconcilable situations and denude the judicial
process of its dignity, authority, predictability and respectability. ...In this case, we have no hesitation to hold that both the Labour
Court and the High Court have erred... 67(Italics supplied)

The above observation puts the norms of judicial decorum and decency in proper perspective, while chastising the
imperialist tendencies of later phase, which, if heeded to by the higher judiciary, can salvage the prestige and honour of
Supreme Court. When the decisions rendered and judicial disposition displayed by a few judges of the 70s and 80s are
tested on the anvil of Kerala Solvent Extractions, the conclusion, that they did indeed subvert the legislative intent as well
as the Constitution, is irresistible. Five decades ago, Vivian Bose J, administered a similar note of caution in JK Iron, to the
effect: ‘under the guise of doing social justice, the Tribunal must not adopt the attitude of a benevolent despot, ignoring the
real questions at issue and basing its decision on irrelevant considerations’.68 The said observation, directed to the Labour
Courts and Tribunals, did not carve out an oasis for higher judiciary. The only difference between JK Iron and Kerala
Solvent lies in that the former was pronounced at a time when judicial standards were at the zenith of their glory, whereas
latter came when they nose-dived to the rock-bottom level. Even so, it is futile for the Supreme Court to pass strictures on
courts of inferior jurisdiction, when the judges of the apex court themselves fail to demonstrate self-discipline and
restraint. If a lower court is found to be irresponsible in giving a clean chit to cases involving grave acts of misconduct or
exhibiting ultra-generous demeanour far beyond the known legal principles, the blame for such transgression should be
squarely placed at the door of the Supreme Court.69 In Suresh Pal, the labour court upheld the punishment of dismissal
inflicted upon a conductor, who was dismissed for not issuing tickets to twenty passengers thereby causing financial loss to
the corporation. The High Court, while exercising its writ jurisdiction, reduced the punishment to one of censure entry and
stoppage of two increments, on the ground that the punishment of dismissal was shockingly disproportionate. Quashing the
order of the High Court, the Supreme Court observed that the said act on the part of the conductor amounted to serious
misconduct, which should be dealt with an iron hand and not leniently.70

Here is a recent decision rendered by Banumati J, of the Supreme Court (for herself and Thakur J) in Collector Singh,
which pathetically reminds of the dark days of Glaxo, AL Kalra, Gujarat Steel Tubes, Rama Kant Mishra, Ved Prakash
Gupta, etc., which were decided in a dismal fashion by anarchist judges of the hue and shade of Desai, Reddy and Iyer JJ.
Before analysing the mediocre reasoning adopted and the misplaced sympathy showered by Banumathi J, in a case which
disclosed riotous and disorderly behaviour, disobedience, insubordination and the threatening of his superior with dire
consequences outside the factory on the part of a workman, and whose dismissal was upheld by all the courts below, ie, the
labour court, single judge and the division bench of the High Court, it is necessary to state, briefly, the facts of the case: the
workman was charge-sheeted and eventually dismissed, after enquiry on charges of throwing jute / cotton waste balls
hitting the face of the foreman of the company and, when objected, abusing the foreman in filthy language and threatening

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him with dire consequences outside the premises of the factory. On a reference, the labour court upheld the dismissal. The
High Court dismissed the writ petition filed by the workman. A few observartions made by Banumathi J, have been
identified, para-wise, for analysis below, duly italicising the relevant portions:

6... . Learned counsel for the respondent then contended that the appellant is a habitual offender and on a previous occasion, on
18.7.1988 the appellant had misbehaved with a co-worker whereby a warning notice had been issued to the appellant and the
appellant assured never to repeat such an act. It was submitted that inspite of such warning the appellant was again defiant and
having regard to the gravity of charges, the Management imposed punishment of dismissal from service and Labour Court rightly
held that such punishment was justified.

The above facts disclose that it was not a case of momentary, emotional outburst and the workman was having an inherent
tendency to be unruly and violent toward his fellow-workmen, which finally graduated to the level of throwing cotton and
jute balls on his immediate superior coupled with threatening him of dire consequences outside the factory. What does this
threat mean? Could the learned judge, at the level of the Court of Last Resort, afford to allow such a misconduct to pass
muster in convenient silence? The labour court had, after recording evidence on either side and a finding as to the
commission or otherwise of the misconduct, rightly held that dismissal was justified. This decision was upheld by both the
tiers of the High Court.

7... Yet another argument advanced on behalf of the respondent was that use of abusive language against the Foreman is a serious
misconduct and punishment of dismissal from service cannot be said to be harsh or disproportionate. It was submitted that any
leniency towards such misconduct would have serious impact on the discipline amongst the workmen in the factory and keeping in
view the gravity of the charges proved, the courts below have rightly declined to interfere with the quantum of punishment. To
substantiate his contention, learned counsel placed reliance upon a number of judgments.

The arguments advanced by counsel for respondent were sane and right in so far as any lenience in matters of indiscipline
involving riotous or disorderly behaviour, sabotage, dishonesty and fraud will have serious consequences for the whole
organisation by sending wrong signals to the employees at large. Perhaps the learned judge is not aware of what is
happening on the industrial front, particularly, during the past 6-7 years. It will do well for her Lordship to note that some
7 (seven) managerial personnel had lost their lives in four years in union militancy and worker violence. These facts have
been presented in some detail in the preceding paragraphs. It would be better for the learned judges, not only of the
Supreme Court, but at all levels including High Courts and Labour Courts, to go through the terrible incidents narrated
therein.

13. Coming to the case at hand, we are of the view that the punishment of dismissal from service for the misconduct proved against
the appellant is disproportionate to the charges.. .. . Reference may also be made to the decisions of this Court in Rama Kant
Misra,71. .. and Ved Prakash Gupta.72

With great respect, it has to be said that the learned judge had chosen to rely on wrong cases, which represent - not judicial
sanity - but judicial anarchy of the mid-1970s and 1980s infused and fostered by a few unruly judges like Desai J, who
went about condoning grave acts of violence, assaults on fellow-employees, supervisors and managerial personnel. For
instance, Rama Kant Mishra was decided by Desai J (for himself and Eradi J) and Ved Prakash Gupta was decided by
Varadarajan J (for himself, Desai and Reddy JJ). What enlightenment can any one expect to derive from the outrageous
decisions handed down, inter alia, in the above cases? It is surprising why the learned judge left out Glaxo Laboratories,73
from the matrix of cases relied on by her. As a matter of fact, the above two cases cited by her pale into insignificance
before Glaxo - a landmark case, though for all the wrong reasons - which would have greatly strengthened her conclusion,
howsoever frightening it might be, on the issue of proportionality.

14. The High Court has relied on the judgment in Mahindra and Mahindra Ltd.,74wherein it was held that the penalty of dismissal
on the alleged use of filthy language is not disproportionate to the charge as it disturbs the discipline in the factory. We are of the
view that in the facts and circumstances of the present case, the above decision may not be applicable. Considering the totality of
the circumstances, in our view, the punishment of dismissal from service is harsh and disproportionate and the same has to be set
aside.

The High Court had, in its infinite wisdom, relied on Mahindra & Mahindra, and very rightly so, instead of the bankrupt
decisions of Desai and Varadarajan JJ. The High Court deserves whole-hearted compliments for displaying a phenomenal

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sense of proportion and civilised approach while handling a critical case of grave indiscipline, which approach was so
conspicuous by its absence in the decision claimed to be emanating from the Highest Court of the land. Secondly, what is
meant by the observation, “in the facts and circumstances of the present case, the above decision may not be applicable”,
when the facts of the two cases are not only identical, but the present case goes a step further and presents an even more
grave picture? With great deference, was the learned judge visualising a situation in which the delinquent workman travels
a few yards further and physically assaults the Foreman, before the Court could draw a conclusion that the punishment of
dismissal was proportionate to the misconduct? To say the least, this decision is a standing illustration of the falling
standards of decision-making process at the highest level. Thirdly, the last observation (in para 14 above), “considering the
totality of the circumstances, in our view, the punishment of dismissal from service is harsh and disproportionate and the
same has to be set aside”, betrays the half-tones and the absolute lack of judicial conviction on the part of the learned
judge. What is that ‘totality of circumstances’, when the case itself consisted of a simple set of facts, i.e..., insubordination,
riotous and disorderly behaviour and threatening the superior officer, and was proved beyond doubt? What else is there in
this short and simple case, in order to justify the so-called ‘totality’? If it were so, what prevented the learned judge from
highlighting those circumstances before reaching an atrocious conclusion that the punishment was disproportionate.
Viewed from any standard, could any learned judge afford the expensive luxury of adopting Desai J, as a role model in so
far as the analysis of facts, line of reasoning, application of law or final conclusions are concerned? Reverting to the
decision proper, the final conclusion of the learned judge runs thus:

Having said that the punishment of dismissal from service is harsh and disproportionate, this Court in ordinary course would either
order reinstatement modifying the punishment or remit the matter back to the disciplinary authority for passing fresh order of
punishment. But we are deliberately avoiding the ordinary course. We are doing so because nearly two decades have passed since
his termination and over these years the appellant must have been gainfully employed elsewhere. Further, the appellant was born in
the year 1955 and has almost reached the age of superannuation. In such circumstances, there cannot be any order of reinstatement
and award of lump sum compensation would meet the ends of justice. Considering the length of service of the appellant in the
establishment and his deprivation of the job over the years and his gainful employment over the years elsewhere, in our view, lump
sum amount of compensation of Rs.5,00,000/- would meet the ends of justicein lieu of reinstatement, back wages, gratuity and in
full quit (sic) of any other amount payable to the appellant.75 (para 15).

If the reasoning of the learned judge analysed in the above paragraphs is just bad, the final decision granting Rs 5,00,000/-
as compensation is worse. This becomes even more conspicuous in the face of the fact that the learned judge admitted that
the appellant would have been working elsewhere and was gainfully employed. What kind of message was the Apex Court
seeking to send to the civilised citizens at large? At this point, it is considered expedient, even at the cost of repetition, to
cite the following passage from “Industrial Jurisprudence: A Critical Commentary”, which directly refers to the three
learned judges, and which pre-eminently applies to the outrageous decision rendered in collector singh too:

The three judges had literally flashed a green signal to unruly workers and militant trade union leaders like Datta Samant,
Suryanarayana Rao, et al, together with an assurance of the kind: “Don’t worry! Continue with your good work!! We are here to
protect your interests!!!” While it does not take more than a stroke of pen for an irresponsible judge to destroy law and order, it
would certainly take ages for his successors to restore them. That is what exactly has been happening during the past couple of
decades with a few right-thinking judges of 1990s and thereafter swimming across the current to restore ‘justice’ in the Seat of
Justice! The seal of judicial approval put on serious acts of misconduct, and in some cases with criminal overtones, had only
fuelled the fire of inter-union and intra-union violence, physical assaults of managerial and supervisory personnel, and the like,
during the late 1970s and the whole of 1980s in several industrial belts, prominent among them being the Whole of West Bengal,
Bombay-Thane-Belapur, Bangalore-Whitefield-Hosur and Hyderabad-Sanatnagar-Patancheru.76

Could it be said that the decision rendered by Banumati J is any worse? This decision doesn’t deserve any further analysis,
notwithstanding the fact that the learned judge made certain amusing observations - one such observation is,
“compensation. .. in lieu of ‘gratuity’, etc.,” (), which itself is absolutely misconceived in the face of s 4(6) of the Payment
of Gratuity Act in terms whereof an employee, who has been dismissed for certain acts of misconduct including riotous,
violent or disorderly behaviour, is disqualified from receiving gratuity in its entirety! With great deference, it is submitted
that Collector Singh is a standing example of the abuse of judicial power at its peak, punctuated by misplaced reliance,
perverse reasoning, misconceived conclusion and uncalled for generosity, and deserves to be condemned outright and
rejected lock, stock and barrel without a second look.

In Jayaram Reddy, the facts briefly were: the employee, who was engaged on a casual basis as a conductor, was removed
from service for a misconduct related to ticketing. Sometime later, the Corporation notified some 300 vacancies of
conductor. The employee applied for the post without, however, disclosing the fact that he was earlier removed from

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service. He was selected, appointed and was also regularised in due course. Later, the corporation came to know that, while
working on a casual basis earlier, he was removed from service for a misconduct, which fact was concealed by him while
applying for a regular post. He was charge-sheeted and dismissed after enquiry. The labour court directed reinstatement but
without back wages. In a writ petition filed by the workman, a single judge of the AP High Court directed payment of full
back wages, which was confirmed by the Division Bench. However, the employee did not join the company despite the
order of reinstatement as he secured an alternative employment. Quashing the orders of the High Court, Sinha J (for
himself and Joseph J), of the Supreme Court ordered that the amount of Rs. 83,954/- paid to the workman as back wages
should not be recovered.77 Where the bus conductor was found carrying passengers without ticket and was dismissed after
holding an enquiry, the Supreme Court held that interference by the labour court with the quantum of punishment was
improper.78 In Tamilnadu STC, the High Court upheld the order of labour court directing reinstatement of a driver on the
ground that there was no eye witness to the accident and that it was further found that he made sincere attempt to avoid
collision with the oncoming vehicle, and its interference with the quantum of punishment could not be found fault with.
The High Court further observed that it was well established that the accident did not occur due to the rash and negligent
driving on the part of the driver, and that the discretionary power available to the labour court under s 11A could not be
said to have been exercised arbitrarily.79 In Usha Breco, SB Sinha J (for himself and Sirpurkar J), of the Supreme Court
culled out the principles governing the disciplinary process as well as the limitations on exercise of discretion by the labour
court while interfering with the disciplinary action and/or the punishment imposed by the management thus:

The Management is not only required to scrupulously follow the procedures laid down therein but was otherwise bound to comply
with the principles of natural justice. If a misconduct has been committed within the purview of the provisions of the Standing
Order, whether certified or Model, the workmen should be punished. The gravity of the offence, the impact the same would have
on the other workmen as also the fact as to whether the same will have an adverse effect over the functioning of the industry are
relevant considerations.. .. Section 11-A of the Act as interpreted by Firestone Tyre and Rubber Co. (supra) must be applied at
different stages. Firstly, when the validity or legality of the domestic enquiries is in question; secondly, in the event, the issue is
determined in favour of the Management, no fresh evidence is required to be adduced by it whereas in the event it is determined in
favour of the workmen, subject to the request which may be made by the Management in an appropriate stage, it will be permitted
to adduce fresh evidence before the Labour Court.. .. Indisputably, in the event, fresh evidence is adduced before the Labour Court
by the Management, the Labour Court will have the jurisdiction to appreciate the evidence. But, in a case where the materials
brought on record by the Enquiry Officer fall for re-appreciation by the Labour Court, it should be slow to interfere therewith. It
must come to a conclusion that the case was a “proper” one therefor. The Labour Court shall not interfere with the findings of the
Enquiry Officer only because it is lawful to do so. It would not take recourse thereto only because another view is possible. Even
assuming that, for all intent and purport, the Labour Court acts as an appellate authority over the judgment of the Enquiry Officer,
it would exercise appropriate restraint. It must bear in mind that the Enquiry Officer also acts as a quasi-judicial body. Before it,
parties are not only entitled to examine their respective witnesses, they can cross-examine the witnesses examined on behalf of the
other side. They are free to adduce documentary evidence. The parties as also the Enquiry Officer can also summon witnesses to
determine the truth. The Enquiry Officer can call for even other records. It must indisputably comply with the basic principles of
natural justice.. .. It is one thing to say that the finding of an Enquiry Officer is perverse or betrays the well-known doctrine of
proportionality but it is another thing to say that only because two views are possible, the Labour Court shall interfere therewith.
In other words, it is one thing to say that on the basis of the materials on record, the Labour Court comes to a conclusion that a
verdict of guilt has been arrived at by the Enquiry Officer where the materials suggested otherwise but it is another thing to say that
such a verdict was also a possible view.80 (Paras 25, 26 & 28)

In Swapan Kumar Mitra, the facts, in short, were: The workman, who was working as a driver in South Bengal STC, was
charge-sheeted for negligent driving resulting in the death of 15 passengers and was removed after holding an enquiry. In a
writ petition, the workman challenged the said dismissal on the ground that certain documents such as the report of the
district magistrate, etc., which the management relied upon as well as the report of the enquiry officer was not furnished to
him. Secondly, the criminal case instituted against the driver at the instance of one of the injured passengers ended in an
acquittal on the ground of insufficient evidence. A single judge of the Calcutta High Court, while setting aside the removal,
directed the management to supply copies of the said documents to the workman for filing his comments thereon and reach
a fresh conclusion after affording reasonable opportunity to him. In appeal, the Division Bench had set aside the order of
the single judge and ordered reinstatement of the workman with back wages and continuity of service, etc. Addressing the
second issue first, i.e..., the legality of dismissal subsequent to his acquittal in the criminal case, Pasayat J (for himself and
Chatterjee J) of the Supreme Court surveyed the case law on the subject exhaustively and held:

.. . the nature and scope of proof in a criminal case is very different from that of a departmental disciplinary proceeding and order
of acquittal in the former, cannot conclude the departmental proceedings. This Court has further held that in a criminal case charge
has to be proved by proof beyond reasonable doubt while in departmental proceeding the standard of proof for proving the charge
is mere preponderance of probabilities. Such being the position of law now settled by various decisions of this Court, two of which

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have already been referred to earlier, we need not deal in detail with the question whether acquittal in a criminal case will lead to
holding that the departmental proceedings should also be discontinued.That being the position, an order of removal from service
emanating from a departmental proceeding can very well be passed even after acquittal of the delinquent employee in a criminal
case. In any case, the learned Single Judge as well as the Division Bench did not base their decisions relying on the proposition that
after acquittal in the criminal case departmental proceedings could not be continued and order of removal could not be passed. ()

On the first issue of non-supply of certain documents, while quashing the order of the Division Bench, the learned judge
held:

We have already indicated that the learned Single Judge was fully justified in directing the disciplinary authority to proceed from
the stage supplying the Inquiry Report and other documents to the respondent. .. As directed by the learned Single Judge, it would
be open to the respondent No. 1 to file comments or representation against the findings made in the Inquiry Report including the
report of the District Magistrate. After considering these comments, the disciplinary authority is directed to reach a fresh and final
conclusion, on the question whether an order of removal from service of the respondent No. 1 can be passed. It is needless to say
that it would be open to the respondent No. 1 or his authorised representative to cross-examine the witnesses, and also to raise the
question of admissibility of the zerox copy of the report of the District Magistrate before the disciplinary authority. Accordingly,
the judgment of the Division Bench of the High Court is set aside and the order of the learned Single Judge is restored subject to
modifications made herein above. It is also directed that the respondent No.1 during the pendency of the departmental proceeding
shall be paid subsistence allowance in accordance with the rules of the Corporation. The appeal is allowed to the extent indicated
above.81 ()

In LIC of India, one of the issues was the jurisdiction of industrial courts in disputes between the Corporation and its
employees in view of the settled law that LIC of India is ‘State’ within the meaning of Art 12 of the Constitution. Yet
another question was the legal status of Development Officer of the Corporation vis-à-vis the relative jurisdiction of civil
courts versus industrial courts, in view of the fact that ‘Development Officer’ of LIC was held to be a ‘workman’ within
the meaning of s 2(s) of the ID Act. Justice Sinha (for himself and Sirpurkar J) held:

LIC is a “State” within the meaning of Article 12 of the Constitution of India. Its duties and functions are provided for under the
1956 Act. The same by itself, however, having regard to the definition of “Industry” as contained in Section 2(j) of the Industrial
Disputes Act, 1947 cannot take within its umbrage the functions of the Life Insurance Corporation outside its purview. (para 11).. .
Under the industrial law, and in particular the 1947 Act, the authorities specified therein, the appropriate governments and the
industrial courts have various functions to perform. Terms and conditions can be laid down thereunder. Violations of the terms and
conditions of service are also justiciable. Safeguards have been provided under the Act to see that services of a workman are not
unjustly terminated.The 1947 Act provides for a wider definition of termination of service. Conditions precedent for termination of
service have been provided for thereunder. A decision taken by the Disciplinary Authority under the 1956 Act ordinarily could
have been a subject matter of suit. The Civil Court, however, exercises a limited jurisdiction. If however, the concerned employee
is a ‘workman’ within the meaning of the provisions of the 1947 Act, his remedy apart from the common law remedies may also
lie before an industrial court. When a right accrues under two statutes vis-a-vis the common law right, the concerned employee will
have an option to choose his forum. (para 12).. . The jurisdiction of the Industrial Court being wide and it having been conferred
with the power to interfere with the quantum of punishment, it could go into the nature of charges, so as to arrive at a conclusion as
to whether the respondent had misused his position or his acts are in breach of trust conferred upon him by his employer.82 (para
17)

In JK Synthetics, the reference made to the labour court was in two parts: (i) whether the termination of service of the
workmen was proper and legal; and (ii) if not, to what benefits and compensation was the workmen entitled. When the
labour court made the original award, it answered the first part and did not answer theconsequential second part of the
reference. On an application having been made under s 6(6) of the UP Industrial Disputes Act, the labour court recorded
that it accidentally omitted the answer to the second part of the reference and rectified the omission by adding a paragraph
therein. A Bench of the Supreme Court comprising BP Singh and Raveendran JJ, held that the case squarely fell within the
ratio of Tulsipur Sugar (supra),83 and hence the labour court was within its powers to rectify such an error or accidental
omission.84 It is well settled legal position that misplaced sympathy, generosity and private benevolence cannot be a
ground to interfere with the punishment imposed by the Appellate Authority. Even according to the Tribunal, the enquiry
was conducted in just and proper manner. When the enquiry was conducted in just and proper manner, the Tribunal cannot
interfere with the punishment imposed by the Appellate Authority. Only if the findings of the disciplinary
authority/appellate authority are perverse or the Management is guilty of vitimisation, unfair labour practice or mala fide,

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then only the Tribunal can make an interference with the punishment imposed on the workman. Therefore, the reason
assigned by the Tribunal for making interference in the punishment imposed by the Management is not sustainable in law
and as such, the interference made by the Tribunal by invoking the provisions under s 11A is not legally sustainable, hence
the impugned award is liable to be set aside.85 It is settled proposition of law that while considering the management’s
decision to dismiss or terminate the services of a workman, the Labour Court can interfere with the decision of the
management only when it is satisfied that the punishment imposed by the management is highly disproportionate to the
degree of guilt of the workman concerned. Considering the delay in completing the enquiry and the age of the appellant
and the fact that similarly situated workmen were reinstated with lesser punishment, the Labour Court ordered
reinstatement, in exercise of its discretion under s 11A. Once the Labour Court has exercised the discretion judicially, the
High Court can interfere with the award, only if it is satisfied that the award of the Labour Court is vitiated by any
fundamental flaws.86

(d) Punishment other than Dismissal: Interference - Whether Justified

Where the management, after conducting an inquiry, imposed the punishment of stoppage of three increments with
cumulative effect on a bus conductor for non-issue of tickets and the workman raised an industrial dispute, and the tribunal
reduced the punishment to stoppage of three increments without cumulative effect, a single judge of the Gujarat High
Court quashed the order of the tribunal holding that the punishment imposed by the management did not call for
interference.87 The facts of this case and the decisions rendered therein require analysis. In the first place, it is not a case of
discharge, dismissal or retrenchment or termination otherwise in order to permit an individual workman to raise an
industrial dispute by himself as provided under s 2A. Secondly, the facts of the case disclose that neither the union nor a
group of workmen had espoused the cause of the individual workman. Thirdly, the powers conferred on labour courts and
tribunals under s 11A can only be exercised in the case of discharge or dismissal, which clearly excludes any other
punishment short of dismissal from the purview of the adjudicatory jurisdiction of labour courts under s 11A. As a matter
of fact, the scope of power vested in the labour court or tribunal under s 11A is so limited that it cannot adjudicate even a
case of retrenchment or termination otherwise, even though both involve severance of employer-employee relationship. In
the face of this legal position, the reference made by the Government of Gujarat, in a case involving stoppage of increment
was itself incompetent. Secondly, the industrial tribunal should have promptly rejected the reference as being outside the
scope of its jurisdiction. Instead, it proceeded to exercise its jurisdiction wrongfully. In DDA,88 the facts were that the
management refused to allow a workman, who was arrested on a charge of murder and later acquitted by the court, to
report for duty. The management did not issue any charge-sheet, did not hold any inquiry, did not issue any termination
order, but merely refused the workman to resume duties. Further, when the dispute raised by the workman was taken up
for adjudication, the management did not appear before the authority. The labour court passed an ex parte award against
the management directing that the workman should be reinstated with full backwages. A single judge of the Delhi High
Court held that the ex parte order passed by the labour court was justified and it did not call for interference.

2. Proviso

For restoring the balance disturbed by the bewildering maze of conflicting dicta, on the scope of tribunal jurisdiction to
adjudicate upon the validity and justifiability of punishment of ‘discharge’ or ‘dismissal’ imposed upon an industrial
workman by his employer, the Parliament enacted s 11A. The main section enlarges the scope of adjudication while the
proviso enjoins on the tribunal ‘in any proceeding under this section’ to rely only on the ‘materials on record’ and not to
take ‘fresh evidence’ in relation to the ‘matter’. The proviso is a typical illustration of obscurity in drafting. Simple and
perhaps reasonable though the postulates of this proviso appear, they camouflage a pandora’s box of questions to be
resolved; what is the scope of the expression ‘any proceedings under this section’? What is the ‘record’? Is it the record of
the inquiry officer, or of the punishing authority or of the tribunal? What is the connotation of the expressions ‘material on
record’, ‘fresh evidence’ and ‘in relation to the matter’? The answer to these questions would depend upon the construction
of the proviso. It is well settled that the language of a proviso, even if general, is normally to be construed limiting its
operation to the field covered by the section to which the proviso is appended.89 In Dwarka Prasad, speaking for the
Supreme Court, Krishna Iyer J, stated the law in connection with construction of a proviso:

A proviso must be limited to the subject-matter of the enacting clause. It is a settled rule of construction that a proviso must prima
facie be read and considered in relation to the principal matter to which it is a proviso. It is not a separate or independent
enactment. ‘Words are dependent on the principal enacting words, to which they are tacked as a proviso. They cannot be read as
divorced from their context’ ... If the rule of construction is that prima facie a proviso should be limited in its operation to the
subject-matter of the enacting clause, the stand we have taken is sound. To expand the enacting clause, inflated by the proviso, sins
against the fundamental rule of construction that a proviso must be considered in relation to the principal matter to which it stands
as a proviso. A proviso ordinarily is but a proviso, although the golden rule is to read the whole section, inclusive of the proviso, in

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such manner that they mutually throw light on each other and result in a harmonious construction.90

In S Sundaram Pillai, the court summed up the purport and parameters of a proviso thus:

(1) qualifying or excepting certain provisions from the main enactment;

(2) it may entirely change the very concept of the intendment of the enactment by insisting on certain mandatory conditions
to be fulfilled in order to make the enactment workable;
(3) it may be so embedded in the Act itself as to become an integral part of the enactment and thus acquire the tenor and
colour of the substantive enactment itself; and
(4) it may be used merely to act as an optional addenda to the enactment with the sole object of explaining the real
intendment of the statutory provision.91

In Kerala State Cashew Corporation, the facts briefly were: A workman was charge-sheeted for an act of misconduct.
Even though the charges proved were serious, the management took a lenient view and, instead of dismissing, reverted him
to the next lower grade. The union took up the case and the labour court, inter alia, held that the enquiry was proper, but
the enquiry officer was biased. On this view of the matter, it set set the enquiry proceedings and posted the case for fresh
evidence. In a writ petition, a single judge of Kerala High Court upheld the order of the labour court, which was set aside
by the the Division Bench. While dismissing the appeal filed by the union, Pasayat J (for himself and Chatterjee J) of the
Supreme Court upheld the view of the Division Bench, and peremptorily circumscribed the powers of the labour courts
while handing any punishment, which is short of dismissal thus:

The Labour Court had earlier held that the enquiry was properly held and there was no violation of the principles of natural justice
and that the findings were not perverse. The vitiating facts found by the Labour Court against the enquiry are erroneous and are
liable to be set aside. If enquiry is fair and proper, in the absence of any allegations of victimization or unfair labour practice, the
Labour Court has no power to interfere with the punishment imposed. Section 11A of the Act gives ample power to the Labour
Court to re-appraise the evidence adduced in the enquiry and also sit in appeal over the decision of the employer in imposing
punishment. Section 11A of the Industrial Disputes Act is only applicable in the case of dismissal or discharge of a workman as
clearly mentioned in the Section itself.. .. When enquiry was conducted fairly and properly, in the absence of any of the
allegations of victimisation or malafides or unfair labour practice, Labour Court has no power to interfere with the punishment
imposed by the management. Since Section 11A is not applicable, Labour Court has no power to reappraise the evidence to find
out whether the findings of the enquiry officer are correct or not or whether the punishment imposed is adequate or not. Of
course, Labour Court can interfere with the findings if the findings are perverse. But, here there is a clear finding that the findings
are not perverse and principles of natural justice were complied with while conducting enquiry.. .. Above being the position the
impugned judgment of the High Court does not suffer from any infirmity to warrant interference.92 (emphasis added)

The above ruling is right and places the powers conferred on labour courts u/s 11A in the correct perspective. In the face of
clear and unambiguous language used both in the heading which runs thus: “Power of Labour Courts, Tribunals and
National Tribunals to give Appropriate Relief in case of Discharge or Dismissal of Workmen” and in the opening part of
the section, i.e..., “Where an industrial dispute relating to the discharge or dismissal of a workman has been referred to a
Labour Court. . .”, it is too far-fetched for the trial courts to assume jurisdiction in respect of any punishment short of
dismissal, by relying on flimsy notions and untenable arguments. This over-reaching tendency of labour courts and
tribunals deserves to be condemned outright in the strongest possible language. The interpretation of the provision by the
learned single judge of Kerala High Court is equally misconceived. If this could be the level of construing the plain
language of law and the line of reasoning at the level of the High Court, what to speak about a Presiding Officer of the
Labour Court?

(i) ‘In any Proceeding under this Section’

The section opens with the words ‘where an industrial dispute relating to discharge or dismissal of a workman has been
referred to a labour court, tribunal or a national tribunal for adjudication’. The expression ‘any proceeding under this
section’ can, therefore mean only the adjudication proceedings relating to the validity and justifiability of the action of
‘discharge or dismissal’ of the workman but this expression will not comprehend the proceedings under s 33, if during the
pendency of the adjudication of a dispute under this section, an application is made to it for ‘permission’ or ‘approval’ of
the action taken or proposed to be taken against another workman. Taking of ‘fresh evidence’ by an adjudicator has been

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prohibited only ‘in any proceedings under this section’ but as already discussed, the courts have recognised the right of an
employer to sustain the action of ‘discharging’ or ‘dismissing’ a workman by adducing evidence before an adjudicator in
case he held no inquiry or the inquiry held by him is found to be invalid. In such cases, it goes beyond the scope of s 11A
and the whole matter will be at large before the tribunal. The jurisdiction is in such situations much wider than under s
11A.

(ii) ‘Materials on Record’

In Firestone, the Supreme Court declined to confine the expression ‘materials on record’ only to the ‘materials which were
available at the domestic inquiry’, but, on the other hand, held that the expression refers to ‘materials on record before the
tribunal’ which will take in:

(1) the evidence taken by the management at the inquiry and the proceedings of the inquiry, or
(2) the above evidence, and in addition any further evidence led before the tribunal, or
(3) evidence placed before the tribunal for the first time in support of the action taken by an employer as well as the
evidence adduced by the workmen contra.

The record of the tribunal begins with the order of reference made by the appropriate Government to it for adjudication of
an industrial dispute. The charge-sheet, explanation of the workman, the proceedings of the domestic inquiry, viz,
pleadings, the oral and documentary evidence of witnesses before the inquiry officer, the record of the inquiry proceedings,
the report of the inquiry officer, the show-cause notice, if any, given by the employer to the workman before imposing the
punishment and the reply of the workman thereto and the final order of punishment, come ‘on the record’ before the
tribunal only by way of evidence adduced in the course of adjudication proceeding. Item no. 1 above comprehends these
materials. Item no. 2 above would, in addition to the materials comprehended in item no 1, comprehend the order of
reference, the pleadings of the parties and any further evidence led before the tribunal in connection with the validity of the
inquiry and the bona fides of the employer in initiating the action and inflicting the punishment and the record of the
proceedings before the tribunal. Item no. 3 above refers to ‘invalid-inquiry’ and ‘no-inquiry’ cases where the evidence is
adduced before the tribunal, for the first time, in support of the validity and justifiability of action of dismissal taken by the
employer and the evidence adduced by the workman contra. This item comprises of the order of reference, pleadings of the
parties and the evidence adduced by the parties along with the record of the proceedings before the tribunal. Speaking for
himself, Dua and Vaidialingam JJ of the Supreme Court observed:

The above items by and large should be considered to be the ‘materials on record’ as specified in the Proviso. We are not inclined
to limit that expression as meaning only that material that has been placed in a domestic enquiry. The Proviso only confines the
Tribunal to the materials on record before it as specified above, when considering the justification or otherwise of the order of
discharge or dismissal. It is only on the basis of those materials that the Tribunal is obliged to consider whether the misconduct is
proved and the further question whether the proved mis- conduct justifies the punishment of dismissal or discharge. 93

If one of the material pieces of evidence on record is not considered by the tribunal, the award will be amenable to judicial
review. In such a case, the writ court has to see as to what is the impact of non-consideration of such a material. If it
materially affects the ultimate decision taken by the tribunal, then the writ court will review the award.94 In Rohtas, after
holding that the domestic inquiry was fair which position was accepted by the workman, the tribunal directed the parties to
adduce fresh evidence with regard to the charges framed against the workman. In these circumstances, the Patna High
Court held that it was not permissible for the tribunal to take fresh evidence with regard to the charge framed against the
workman. The proviso not only prohibits any ‘fresh evidence’ in relation to the matter being taken by the tribunal, it also
confines the jurisdiction of the tribunal to rely only on the ‘materials on record’.95 In AV Swami, the labour court
considered the past record of the workman in a detailed manner which was neither considered nor referred to by either the
workman or the employer during the domestic inquiry. In view of the clear mandate of the proviso, a single judge of the
Andhra Pradesh High Court held that the labour court was not justified in taking into consideration the past record of the
workman. Hence, the award upholding the removal of the employee from service was quashed.96 In Bhaik Nath, the facts
disclosed that, on the consent of both the management and the workman, the labour court considered the materials
available on record, and by a reasoned order directed the reinstatement of the workman. The management challenged the
award. Upholding the award passed by the labour court, Hegde J (for himself and Sinha J) of the Supreme Court, observed:

In the background of this concession and in the absence of seeking permission for leading evidence in support of its charge by the
appellant it cannot be now permitted to question the procedure adopted by the Labour Court based on consent of the parties. Even
the learned single Judge erred in wrongly recording a finding that the appellant was not given an opportunity to lead evidence. As a

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matter of fact a perusal of the award clearly shows that both the parties addressed arguments on merits and demerits on the basis of
evidence on record and after considering the same Labour Court by a reasoned order agreed with the Inquiry Officer that though in
the two cases in regard to which an inquiry was conducted the respondent workman has not issued tickets to 3 and 2 passengers
respectively, the material on record and explanation given by the respondent sufficiently proved that had good reasons for not
having issued the tickets when the checking staff came for checking and the respondent workman had no intention of defrauding
the Corporation. This is a finding of fact based on material on record accepted by the Inquiry Officer, the Labour Court and the
Division Bench and we find no reason whatsoever to differ from this finding. We are also of the opinion that since the Labour
Court had formed an opinion that Disciplinary Authority had not properly considered the evidence on record while coming to a
contrary conclusion, Labour Court was justified in going into the question of fact that too as consented by the parties and giving a
finding.1

(iii) ‘Fresh Evidence in Relation to the Matter’

The proviso prohibits any ‘fresh evidence’ being taken in any proceeding under the section, in relation to the matter but
what is the connotation of the expressions ‘fresh evidence’, and ‘the matter’ has not been indicated. The expression, ‘fresh
evidence’ therefore, has to be read in the context in which it appears in contradistinction to the expression ‘materials on
record’. The proviso to this section was inserted by the legislature to place limitation on the power of a tribunal as an
appellate authority hearing appeal against the decision in the domestic inquiry. It lays down that the tribunal for the
purpose of exercising the power conferred by the main provision cannot call for further ‘fresh evidence’, as an appellate
authority may normally do under a particular statute, when considering the correctness or otherwise of an order passed by
the subordinate body. The power to receive ‘fresh evidence’ contemplated by this proviso would apply only against
receiving ‘fresh evidence’, while reappraising the evidence recorded in the domestic inquiry. For the purposes of any
proceeding under this section, the tribunal cannot call for ‘further or fresh evidence’ as an appellate authority may
normally do under a particular statute, when considering the correctness or otherwise of an order passed by a subordinate
body.2

In cases, where no inquiry at all has been held, the employer has the right to satisfy the tribunal with respect to the validity
and justifiability of the action of discharge or dismissal. But where a domestic inquiry has been held, it is open to the
workman to contend that the inquiry was not valid or proper. It is equally open for the employer to rely upon the inquiry.
The employer may entirely rely upon the inquiry or alternatively offer to adduce evidence before the tribunal to justify the
validity of the action in case the inquiry is held to be invalid. In the former case the action of discharge or dismissal will
depend upon the validity of the inquiry whereas in the latter case even if the inquiry is held to be invalid, the justifiability
of the punishment of the action of discharge or dismissal will depend upon the evidence adduced before the tribunal by the
employer in support of the action. In such a case, the tribunal will have to try the validity of the inquiry as a preliminary
issue,3 but the tribunal will get jurisdiction to go into the evidence led by the employer only after deciding the question of
the validity of the inquiry.4 If evidence becomes necessary for a decision on this preliminary issue, the workman who
impugns the validity of the inquiry will have to lead evidence. The opportunity to lead evidence cannot be denied to the
workman on the ground that the management does not want to adduce any ‘fresh evidence’. Even if the validity of the
inquiry is not tried as a preliminary issue, the position will not be different. In either case, the workman should get the
opportunity to lead evidence in the first instance as it is his contention that no legal and proper inquiry was held. Then, it
will be for the management to lead evidence contra to show that the inquiry held was legal and valid. The mere fact that
the management does not examine the inquiry officer would not lead to unavoidable inference that no inquiry was held. It
is only when the tribunal comes to the conclusion that the authenticity of the document is proved, then it may draw
inference that no inquiry was held if the inquiry officer has not been examined.5

Since the management has the right to adduce evidence before the tribunal justifying the order of dismissal or discharge, it
arises only after the tribunal comes to the conclusion that the domestic inquiry was defective. The right of the workman to
adduce evidence contra cannot depend upon the fact whether the management wants to lead any fresh evidence or not. In
cases, where the inquiry held by the employer is found to be invalid or no inquiry at all has been held, the tribunal has to
give an opportunity to the employer to adduce evidence for the first time to justify the action and then to give an
opportunity to the workman to rebut such evidence of the employer. In such a situation, it is the duty of the tribunal to go
into that evidence and see whether the action taken by the management was correct or not.6 In Neeta Kaplish,7 Saghir
Ahmed J observed that, if the labour court found that the domestic inquiry held by the employer was defective, the record
pertaining to the said domestic inquiry would not constitute ‘fresh evidence’. Such record would also not constitute
‘materials on record’ within the meaning of s 11A, as the inquiry proceedings had to be ignored altogether. The only way
open to the management was to justify its action by leading fresh evidence as required by the labour court. If such evidence
had not been led, the management had to suffer the consequences. By permitting the management to adduce evidence, after
recording a finding that the inquiry held was not proper, the tribunal does not commit any error. After the incorporation of

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s 11A, the tribunal is now entitled to hold that even if the misconduct is proved, the punishment of discharge and dismissal
is not justified. Therefore, the tribunal is given the power to substitute the view taken by the management.8

3. Relief

After the insertion of s 11A, an industrial adjudicator has not only the jurisdiction to set aside the order of dishcarge or
dismissal of a workman and direct his reinstatement but it also has the discretion to mould that relief including the award
of lesser punishment in lieu of discharge or dismissal as may be warranted by the circumstances of the case.9 In Engine
Valves, the Madras High Court summed up the law thus:

The court exercising powers under s 11A of the Act after finding the misconduct to have been proved is first obliged to advert
itself to the question of necessity or desirability to interfere with the punishment imposed by the management and, if the
management could not justify the punishment imposed thereafter it must consider the question as to the relief that is to be granted
to the employee. In so considering the relief to be granted, the court has an obligation to consider whether the punishment imposed
is disproportionate or shockingly severe to the charges held proved and if so whether a reinstatement has to be ordered or whether
any other lesser punishment has to be imposed. A specific finding must be recorded whether it was expedient and proper to
reinstate the employee or whether award of compensation in lieu of reinstatement will meet the requirements and ends of justice of
the case concerned. Absence of reasons to invoke the power and interfere under provisions of s 11A in a particular case would
render the very exercise of powers rbitrary and perverse and the order consequently would stand vitiated.10

Even if the charges are proved, the tribunal is not bound to uphold the order of discharge or dismissal. It has the discretion
to direct reinstatement with or without any conditions. Nor is the tribunal bound to direct reinstatement merely because the
order of dismissal or discharge is found to be invalid. These are now the matters in the discretion of the tribunal. The
discretion of the tribunal properly exercised is not amenable to judicial review.11 But it is relevant to remember that before
granting relief under this section, the triibunal must record a finding that the discharge or dismissal is illegal or unjustified.
In the absence of such finding, it has absolutely no power to grant any relief or lesser punishment in lieu of discharge or
dismissal as the circumstances of the case may require or any other relief such as compensation.12 The question of relief
arises only where the termination, discharge or dismissal of the service of a workman is unjustified and illegal but once the
adjudicator comes to the conclusion from the ‘material on record’, that the order of dismissal or discharge is not
unjustified, he is not competent to grant any relief and the only option left to him is to reject the reference, but where the
order of discharge or dismissal of a workman is found to be illegal and unjustified, the powers of the adjudicator are wide
enough to grant the relief to the aggrieved workman.13 The relief can be reinstatement with backwages or it may even be of
a part of back wages in case the workman was not wholly blameless. Lump sum compensation in lieu of reinstatement or
backwages is also awarded. The question of granting relief is in the discretion of the adjudicator. The reliefs generally
awarded by the industrial adjudication are discussed under the following three heads:

(i) reinstatement;
(ii) any lesser punishment;
(iii) compensation in lieu of reinstatement; and
(iv) award passed under S 11A - whether amenable to judicial review

In this jurisdiction, it is in the discretion of the tribunal in an appropriate case to award interest on the amount determined
by way of compensation and the rate of such interest is also in the discretion of the tribunal.14 The labour court, while
exercising its jurisdiction under s 11A can modify the punishment of dismissal, if found disproportionate, to that of
reinstatement as a fresh candidate after assigning reasons therefor.15 Once the labour court came to the conclusion that the
termination of service of workman was not justified, the necessary corollary is that the workman is entitled to be reinstated
with full backwages, and not merely by payment of compensation under s 25F sans reinstatement.16 It is well-settled that in
cases where an industrial adjudicator finds the termination of service of an industrial workman by his employer to be
wrongful and invalid, the normal relief is reinstatement with backwages. In cases of wrongful ‘discharge’ or ‘dismissal’ of
a workman by his employer as punishment, s 11A confers jurisdiction on an industrial adjudicator to set aside the order of,
discharge’ or ‘dismissal’ and to give the relief of reinstatement of the workman with or without any conditions or give such
other relief to the workman including the award of any lesser punishment in lieu of ‘discharge’ or ‘dismissal’ in the
circumstances of the case. The power to give these reliefs is inherent in industrial adjudication. Such reliefs were being
given by industrial adjudicators even before the enactment of this section. This section only makes inherent power of the
adjudicators explicit only in cases of termination of service by way of punishment of ‘discharge’ or ‘dismissal’. The relief
of ‘reinstatement’ with or without backwages or of compensation in lieu of reinstatement in cases of termination of service
as discharge simpliciter or as a measure of retrenchment, would not fall within the purview of this section as such

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termination is not by way of punishment but in such cases, the relief is granted by industrial adjudicator in its inherent
power of industrial adjudication.

In Western India Automobile Assn, the federal court held that industrial adjudication does not mean adjudication according
to strict law of master and servant. Hence, if ‘non-employment’ arises by reason of termination of employment by the
employer, it will be within the jurisdiction of the industrial tribunal to determine whether the termination was justified and
will also have the jurisdiction to give relief of reinstatement if, having regard to all circumstances, it thinks that it is
necessary in the interest of industrial peace, but the principles of law governing reinstatement or compensation in lieu of
reinstatement as evolved by industrial adjudication are the same in all the three situations.17 Therefore, the discussion on
these topics will govern the award of these reliefs not only in cases of termination of service by way of disciplinary
punishment of ‘discharge’ or ‘dismissal’ but also will govern the cases of contractual termination of service-discharge
simpliciter and termination of service as a measure of retrenchment. In a case where a driver, was dismissed for remaining
absent without leave, was directed to be reinstated with 75 per cent back wages by the labour court, the High Court took
notice of the fact that the medical reasons given by the workman were found to be genuine and his past record was also
clearn. However, the court felt that the award of 75% back wages was on the high side and reduced it to 40 per cent.18

(i) Reinstatement

The benefit of reinstatement which is awarded to a workman under the terms of an award does not become a term or
condition of the contract between him and the employer as there is no statutory provision in that behalf in the Act.19 There
are, no doubt, other reliefs by way of changes in the terms and conditions of employment which when awarded by the
appropriate tribunal might be treated as implied terms of the contract between the employer and the workers to whom the
award applies and would ensure for the benefit of the workers until varied by appropriate legal proceedings.20 The effect of
an award of reinstatement is merely to set at naught the order of wrongful dismissal of a workman by the employer and to
reinstate him in the service of the employer and to restore him to his former position and status as if the contract of
employment originally entered into has been continuing.21 The terms and conditions of the contract which obtained when
the workman was in the employment of the employer prior to his wrongful dismissal continue on reinstatement to govern
him as before. No variation is affected in the original terms and conditions of the contract. The only thing which happens is
that the workman is reinstated in his old service as before. In Punabhai Govindbhai, the Gujarat High Court held that
reinstatement of a daily wager would mean maintaining his position in the seniority with continuity of service as per his
ranking in his seniority list. After reinstatement such a workman will become entitled to work only as a daily wager. In
such a case, the continuity of service would mean continuity on the same terms and conditions on which he was working
prior to his reinstatement.22

If a workman has to be reinstated under an award of an industrial adjudicator, he should report himself for duty within a
reasonable time from the date of such award. It is not the duty of the employer to take steps to invite the employee in
pursuance of the order of the tribunal setting aside the termination or dismissal order passed by the employer, but it is the
duty of the employee concerned either to claim or inform in writing that he is ready and willing to join the service within a
reasonable time, to give a notice that he should be reinstated, failing which, he would be taking legal proceedings against
the employer. In the absence of any of these things, the employer is under no legal obligation to take steps to reinstate the
employee whose service was terminated by him but subsequently restored to his job under the award of an adjudicator. The
workman should also express his readiness to join service under the employer within a reasonable time. He cannot keep
quiet for months without expressing any desire on his part to take up the employment, in pursuance of the order of
reinstatement or settlement but what is a reasonable time would depend upon the facts and circumstances of each case.23
Where the service of a daily wager engaged against a permanent post was terminated orally, the labour court ordered
reinstatement with 50% back wages, on the ground that the said workman had worked for 267 days and that his service
was terminated without complying with the provisions of s 25F. The said award was reversed by the High Court. In appeal,
the Supreme Court quashed the order of the High Court and restored the award of the labour court.24 In Dattatreya
Birajdar, a daily wager challenged his termination after a lapse of 8 years, whereas the evidence produced before the
labour court disclosed that he had voluntarily left PWD department and joined another department. Despite this factual
position, the labour court directed reinstatement with 25% back wages, which was affirmed by the Bombay High Court. In
addition, the labour court placed the burden to prove that the workman had not worked for 240 days on the employer. Both
the award of the labour court and the order of the High Court were quashed by Supreme Court.25 Where the labour court
directed the reinstatement of a workman who was employed in the agricultural department of the Government, quashing
the orders of the courts below, the Supreme Court held:

We find that neither the Labour Court nor the High Court considered the relevant aspects like whether the Agricultural Department
of the Government of Orissa is an ‘Industry’ and that whether there was any scope for being regularised when admittedly the
Labour Court found that the respondent was engaged on casual basis. The other question was whether there was any termination or
whether the respondent had abandoned the work. These factors apparently have not been considered. Further the question whether

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the respondent had worked for more than 240 days in a calendar year has also not been considered in the proper perspective. That
being so, the impugned order cannot be maintained and is set aside. The matter is remitted to the High Court to consider the
relevant aspects afresh.26

(a) Principles of Adjudication:

General:

In common law, the court will not ordinarily force an employer to retain the service of an employee whom he no longer
wishes to employ,27 on the well recognised principle that the contract of personal employment cannot be specifically
enforced, but in the area of industrial jurisprudence, it is no more open to debate that ‘declaration can be given that the
termination of service is bad and the workman continues to be in service. The specter of common law doctrine that the
contract of personal service cannot be specifically enforced or the doctrine of mitigation of damages does not haunt this
branch of law. The relief of reinstatement with continuity of service can be granted where the termination of service is
found to be invalid.28 Industrial adjudicator can compel the employer to employ a worker whom he does not desire to
employ. In other words, industrial adjudicator has jurisdiction to award reinstatement of a discharged or dismissed
workman.29 If the misconduct for which the workman has been dismissed, has not been proved in the domestic inquiry or
the tribunal, the order of punishment will not stand and the tribunal is bound to award reinstatement of the workman.30
Even to deny a part of the backwages to such a workman would be to inflict punishment on him.31

Relief of reinstatement is on the same footing as relief of restitution.32 Reinstatement means restoration of a dismissed or
discharged workman to his original post. Upon an order of reinstatement, the employee concerned is entitled to be put back
in the same position as if he had never been dismissed or discharged, together with all the back pay, allowances and other
privileges.33 In other words, the effect of an award of reinstatement is to restore the employee to his former position and
status setting aside the order of termination of service, as if it had never been passed and the employee gets the benefit of
continuity of service.34 Reinstatement, therefore, requires that the ex-employee should be restored to his previous position
so far as his capacity, status and emoluments are concerned.35 Hence, an employee would be entitled to notional promotion
on being reinstated which he could have got, if his service had not been terminated, but the benefit of leave travel
concession will be available to the employee only if he has undertaken the travel.36 In industrial adjudication, this is the
same thing as making a contract of employment when the employer is unwilling to enter into such a contract with a
particular person, an industrial adjudicator can direct that an employer shall have the relation of employment with the
employee although he may be unwilling to have such relation.37 If the employee is not put back to his employment, then it
is not reinstatement at all.38 In G Rajendra, the Supreme Court held that whether to grant continuity of service or not while
making the award depends upon the facts and circumstances of each case, and set aside the order of the High Court which
modified the award of labour court from reinstatement with continuity of service to reinstatement without continuity of
service.39 Where the labour court directed reinstatement without backwages, the workman will be entitled to notional
increments at the time of his pay-fixation.40

‘Reinstatement’ differs from ‘re-employment’ in as much as in case of reinstatement, an employee is deemed to have been
in service in spite of the termination of service, whereas in case of re-employment, the workman’s services are lawfully
terminated and he gets back into service afresh on re-employment. In case of reinstatement, the tribunal can award
backwages to a dismissed workman while in case of re-employment such a workman would be entitled to wages only from
the date of his actual re-employment. The order of termination of service, discharge or dismissal of a workman even if
illegal or wrongful is not a nullity and it continues to be operative until set aside by a competent tribunal or court of law.41
Therefore, after setting aside the illegal and invalid order of discharge or dismissal of a workman, the tribunal has to make
a specific order of reinstatement of the workman. The problem confronting industrial adjudication is to promote its two
objectives, the security of employment and protection against wrongful discharge or dismissal on the one hand and
industrial peace and harmony on the other; both leading ultimately to the goal of maximum possible production.42 No hard
and fast rule can be laid down in dealing with this problem. Each case has to be considered on its own merits and in
reaching final decision an attempt must be made to reconcile the conflicting claims made by the workman and the
employer. The workman is entitled to security of service and should be protected against wrongful dismissal, and so the
normal rule would be reinstatement such cases. Nevertheless, in unusual or exceptional cases, the tribunal may have to
consider whether in the interest of the industry itself it would be desirable or expedient not to direct reinstatement. The
industrial adjudication, therefore has to balance the relevant factors without adopting legalistic and doctrinaire approach.43
The tribunal has to examine, therefore, the circumstances of each case to see whether reinstatement of the dismissed
employee is not inexpedient or improper.44 It has to take a decision in a spirit of fairness and justice, following rules of
justice and reason and after carefully examining all the facts and circumstances of the case.45 Past record of the employee,
the nature of his alleged present lapse and the ground on which the order of the management is set aside are also relevant
factors for consideration.46 Normally, where the worker cannot be said to be of a type whose presence as an employee is

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undesirable and is not conducive to maintenance of industrial peace, it will not be a fit case for depriving the workman the
normal relief of reinstatement and grant him compensation in lieu thereof.47

In Western India Automobile Assn, the federal court emphasised the discretion of the tribunal in the matter of awarding
reinstatement when it observed that ‘the tribunal has jurisdiction to adjudicate on the dispute and it can be trusted to do its
duty and it cannot be said that it will give reinstatement relief unless it thinks it necessary to do so’.48 This was
reverberated by the Supreme Court in United Commercial Bank, where it said that ‘whether a discharged employee is to be
reinstated in service or whether compensation would be an adequate relief, is a matter of discretion’. Thus, the discretion
of the tribunal rather than laying down any rule of universal application was accentuated, as to lay down the general rule of
reinstatement being the only remedy would itself fetter the discretion of the tribunal; particularly so when the tribunal is to
act in the interest of industrial harmony and peace. The court further observed that it might well be that, in some cases
imposition of service of a workman on an unwilling employer might not be conducive to such harmony and peace.49
Though the federal court and the Supreme Court emphasised the discretion of the tribunal in awarding the relief of
reinstatement, the labour appellate tribunal emphasised reinstatement as a normal rule in cases of wrongful and unjustified
discharge or dismissal.50 In Buckingham Carnatic, the LAT said that in cases of wrongful dismissal, reinstatement is the
normal relief, though it recognised certain exceptions where reinstatement would not be proper relief.51 In Steel Bros, the
court reiterated that where the termination of service is unjustified and is not bona fide, the normal relief is reinstatement
unless there are exceptional circumstances warranting a departure from the rule.52 In Jitendra Singh Rathor, the Supreme
Court affirmed the award of reinstatement of the workman with half backwages keeping in view the proved misconduct of
the employee as it could not be said that the relief of reinstatement was being granted in terms of withholding of the half of
the backwages and therefore did not constitute penalty.53

The doctrine that reinstatement is a normal rule in cases of wrongful and illegal discharge and dismissal is not inexorable
or absolutely rigid in application. Pragmatic approach has tampered the rule to mean that in unusual or exceptional cases,
where it is not proper or expedient to grant the normal relief of reinstatement the relief of compensation would meet the
ends of justice, because the problem confronting the industrial adjudication is to promote its two objectives, viz, the
security of employment and protection against wrongful discharge and dismissal on the one hand and industrial peace on
the other—both leading to the goal of maximum possible production. In Buckingham Carnatic, the labour appellate
tribunal itself observed that in considering the question of reinstatement ‘the tribunal is expected to be inspired by a sense
of fair play towards the employee on the one hand and consideration of discipline in the concern on the other’. In the same
strain, the Supreme Court in Punjab National Bank, held that no hard and fast rule can he laid down in dealing with this
problem and that each case must be considered on its own merits, and in reaching the final decision, an attempt must be
made to reconcile the conflicting claims made by the employee and the employer. An employee is entitled to security of
service and should be protected against wrongful dismissal and so the normal rule would be reinstatement in such cases.
Nevertheless, in unusual or exceptional cases, the tribunal may have to consider whether in the interests of industry itself,
it would be desirable or expedient not to direct reinstatement.54 The question whether reinstatement should be awarded or
not, has to be decided after balancing the relevant factors and without adopting legalistic or doctrinaire approach. This
approach has been adopted by the courts in subsequent cases.55

There is no doubt that the normal rule in the absence of circumstances which would show that the workman had disentitled
himself from claiming reinstatement, would be to grant reinstatement.56 ‘Plain common sense dictates that the removal of
an order terminating the services of workmen must ordinarily lead to the reinstatement of the services of the workman. It is
as if the order had never been made and so it must ordinarily lead to backwages’.57 In OP Bhandari, speaking for the
Supreme Court, Thakkar J, held that ‘it cannot be posited that reinstatement must invariably follow as a consequence of
holding that the order of termination of service of an employee is void. No doubt in regard to blue collar workman and
white-collar, ie, employees other than those belonging to the managerial or similar high level cadre, reinstatement would
be a rule and compensation in lieu thereof a rare exception’.58 In MK Agarwal, on consideration of the entire matter, the
court held that it should not refuse reinstatement. However, in the circumstances of the case it restricted the salary to 50
percent of what would otherwise be payable to the employee.59 But there can be cases where it would not be expedient to
follow this normal rule and direct reinstatement.60 There may be exceptional circumstances which make it impossible or
wholly inequitable vis-a-vis the employer and workman to direct reinstatement with full backwages. For instance, the
industry might have closed down or might be in severe financial doldrums, the workman concerned might have secured
better or other employment elsewhere and so on. Reinstatement might also be avoided in extraordinary cases where the
post is abolished or there is bitterness between the parties.61 Likewise, the relief of reinstatement may be refused in
exceptional cases like the employer losing confidence in the workman or the retention of the workman leading to
apprehension of breach of security.62 In such situations, there is a vestige of discretion left in the courts to make
appropriate consequential orders. The court may deny the relief of reinstatement where reinstatement is impossible because
the industry has been closed down. And it may deny relief of award of full backwages where that would place an
impossible burden on the employer. In such and other exceptional cases, the court may mould the relief.63

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In Hindustan Apparel, the labour court directed reinstatement of the workmen. But while passing the order of
reinstatement, the labour court recorded a finding that the three workers were gainfully employed. Within two months of
the award, the employer closed down its business and started another business on somewhat similar lines. In appeal against
the award, while granting interim order, the Supreme Court directed payment of Rs. 24000/- to each of the workers and
also expressly recognised the right of the three workers to continue in work in another establishment during the pendency
of the appeals.64 In the absence of any impediments or exceptional circumstances, the relief of reinstatement with
backwages must be awarded. It is, therefore, for the employer to clearly establish the existence of exceptional
circumstances. In other words, the onus to establish the case of departure from the normal rule or practice is on the
employer. The employer, therefore, has not only to raise a specific plea but has also to tender all relevant evidence showing
that his case falls in one of the exceptions.65 Generally, reinstatement is not granted where the workman has indulged in
activities highly prejudicial to the company or there is loss of confidence of the employer in him or dislocation of work or
likelihood of dislocation of work but where the management has not pleaded any of such circumstances, the normal rule of
reinstatement with full backwages and other benefits will follow.66 The tribunal can refuse to order reinstatement where
such a course in the circumstances of the case, is not fair and proper. For deciding the question of relief, the tribunal,
therefore, has to examine the circumstances of each case to see whether reinstatement of the dismissed employee is not
inexpedient or is not improper.67 If the case presents certain unusual or exceptional features so as to make reinstatement
inexpedient or improper, to meet the ends of justice, the tribunal has the discretion to award adequate monetary
compensation instead of reinstatement.68 The power of reinstatement can be exercised by the tribunal where on the facts
and in the circumstances of the case, it finds that the discharge or dismissal of the workman was not justified, but in case of
gross misconduct, the most appropriate punishment would be discharge or dismissal of the workman and ‘it would be a
mockery of justice to brand such an order as ‘unjustified’ and substitute it by an order of reinstatement under s 11A. In
cases, where no order other than the order of dismissal of the workman could be made on the proved facts, the arbitrary
exercise of power of reinstatement, will be reviewable on certiorari.69 In Jaslok Hospital, the Bombay High Court set aside
the order of reinstatement of a workman working in hospital and ordered that his dismissal should be deemed as
retrenchment with accompanying benefits. Speaking for the court, Pendse J, observed:

.. . the hospital and the medical research centre are sensitive institutions and are engaged in saving human lives and the success of
such institutions depends much upon the confidence generated by the staff working there ... the cure of patients depends more on
care and attention lavished than on the medicines administered.70

The success of the institution depends not only on the attitude of the employer but equally in the manner in which the
employees approach their work. On the facts and in the circumstances of the case, the award of reinstatement was held to
be inappropriate. Such relief can also be refused where the workman is virtually on the verge of retirement or is so old and
infirm as to be incapable of discharging his duties.71 In Metal Box, the court modified the order of reinstatement in view of
the superannuation of the workman and directed the payment of backwages and other benefits up to the date of retirement
of the workman.72 No hard and fast rule can, however, be laid down for the exercise of the discretion of the tribunal, as in
each case, it must, in a spirit of fairness and justice in keeping with the objective of industrial adjudication, decide whether
it should, in the interest of justice, depart from the general rule.73 Fair play towards the employee on the one hand and
interest of the employer including the consideration of discipling in the establishment on the other, require to be duly
safeguarded.74 This is necessary in the interest of both security of tenure of the employee and smooth and harmonious
working of the establishment. Legitimate interest of both of them have to be kept in view, if the order is expected to
promote the desired objectives of industrial peace and maximum possible production. Proper balance has to be maintained
between the conflicting claims of the employer and the employee without jeopardising the larger interests of industrial
peace and progress.75 ‘Reinstatement’ is not considered desirable in cases of strained relations between the employer and
the employee or where the post held by the employee had been one of trust and confidence or where the employee was
found to have been guilty of activity subversive or prejudicial to the interest of the industry. In such a case, suitable
compensation could be ordered in lieu of reinstatement.76 A single judge of the Calcutta High Court observed:

Supposing the tribunal comes to the conclusion that the employee is a rogue or a blackguard or a thoroughly incompetent one,
unable to perform his job, it is ridiculous to suggest that such matters are irrelevant and the tribunals must still reinstate the worker
and shut their eyes to the real state of things. Trustworthiness of the worker is one of the important factors to be taken into
account.77

The nature of the relations between the employer and the employee is also a relevant factor to be taken into
consideration.78 The tribunal is also to safeguard the interests of the employer including the consideration of discipline in
the establishment. The nature of the duties performed by the employee and the nature of the industrial establishment

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employing him, is also a relevant consideration.79 These cases are merely illustrative where an exception to the general rule
of reinstatement is to be made.80 No comprehensive rule, as to which circumstances would in a given case constitute an
exception to the general rule, can possibly be laid down. In each case, keeping the objectives of the industrial adjudication
in mind, and in a spirit of fairness and justice, the tribunal has to deal with the question, whether the circumstances of the
case require that an exception should be made and compensation would meet the ends of justice.81 If, on taking these
principles and the relevant factors into consideration, the tribunal comes to the conclusion that reinstatement would not be
desirable or expedient in the circumstances of the case, it may award compensation instead of reinstatement to the
workman in spite of the fact that his discharge or dismissal was invalid owing to some infirmity in the impugned order. In
Sunit Kumar Roy, the Patna High Court had set aside the order of reinstatement with backwages passed by the tribunal,
even though the termination of the service of the workman was held not to be legal and valid, in view of the fact that the
workman had been permanently employed in another concern where he was getting more remuneration than he was getting
with the previous employer.82 The power of an industrial adjudicator under s 11A, to give any relief to the workman
including reinstatement or to subject the order of reinstatement to any terms and conditions, can be exercised only when
the order of dismissal or discharge is found to be unjustified or illegal and not when it affirms the order of discharge.83 In
either case, the decision of the tribunal will be amenable to judicial review and the reviewing court cannot content itself by
simply saying that since the tribunal exercised its jurisdiction, it will not examine the circumstances of the case to ascertain
whether or not such exercise has been made in accordance with the well-established principles. If it were to do so, it would
be a refusal on its part to exercise its own jurisdiction,84 but where the tribunal has objectively assessed the over-all
position on a fair consideration of the material placed before it and came to the conclusion that the reinstatement of the
aggrieved employee was to follow, the reviewing court would not interfere with the discretion of the tribunal when no
exceptional circumstance warranting the denial of benefit was made out.85

In Assam Oil, the facts were: the work of the employee, who was holding a confidential postion as a secretary to the
Branch Manager, was thoroughly unsatisfactory coupled with failure on his part to carry out orders, insolence,
untruthfulness, and disobedience. The services of the employee were terminated purporting to be in terms of the contract of
employment but holding the discharge of the employee to be of a punitive character, the tribunal set aside the termination
of service and directed the reinstatement. In appeal, the Supreme Court upheld the decision of the tribunal, but in view of
the fact that he was holding a position of trust and confidence and the manager had lost confidence in him, the court held
that ‘it would not be fair either to the employer or to the employee to direct reinstatement’ and substituted reinstatement
with an order of suitable compensation.86 In Charottar GSM, the contention of the workman was that once the tribunal had
set aside the order of dismissal on the ground that the domestic inquiry was invalid, the direction of reinstatement should
automatically have followed. The Supreme Court refused to interfere with the order of the tribunal declining reinstatement
for the reason that the workman had resorted to illegal strike, and ordered adequate monetary compensation in lieu of
reinstatement.87

In Doomur DT Estate, the court set aside the order of reinstatement on the ground that some of the workmen had, in fact,
been found guilty of and convicted for violent misconduct by a criminal court and with respect to some others, there was
evidence that they had participated in the violent misconduct. Taking into consideration such a conduct on the part of the
employees, the court held that the relief of reinstatement was not justified.88 In PP Chopra, the court again substituted the
order of reinstatement with an order of appropriate compensation holding that reinstatement would not be expedient in the
circumstances of the case in view of the fact that the employee, who was holding a position of trust and confidence as a
stenographer, had retained the copies of confidential letters dictated to him in regard to other concerns in which the
employer company was interested for the purpose of using them for his own purpose without the consent of the company.
89 In AK Roy, taking into account the fact that the workman was employed in the blast furnace which was a crucial part of

the work, it was held to be a case of an exceptional nature and the relief of reinstatement was not justified and expedient in
view of the adverse police report against the workman.90 Similarly in Francis Klein, in view of the fact that the workman,
who was a durban, had refused to assist another durban in apprehending a thief who was trying to get away with certain
materials of the employer company, the court substituted the relief of reinstatement awarded by the tribunal with adequate
monetary compensation.91 Likewise, in ITC, on the facts and in the circumstances of the case, the court held that the order
of reinstatement was not sustainable. In this case, the workman was dismissed from service having been found guilty of
neglect of duty. Furthermore, his record of service was also not clean in that he had committed several acts of faults in the
past and was sometimes warned and sometimes suspended and sometimes reprimanded for all his acts of omission and
commission. Untwalia J, observed that the labour court had awarded reinstatement without applying its mind to the
question as to whether it was a fit case for reinstatement or for compensation in lieu of reinstatement.92

The burden to establish that one or more of exceptional or unusual circumstances, militating against the award of
reinstatement exist, is however, on the employer and unless that is done, the normal relief of reinstatement is to be
granted.93 In Tulsidas Paul, the employer declined to give work to eight seasonal workers at the instance of the rest of the
workers. The labour court held that the said refusal amounted to unjustified dismissal and directed their reinstatement. The
Calcutta High Court held that, in view of the fact that the employer had not put the question of reinstatement in issue nor

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had it raised any specific objection against the normal rule of reinstatement, there was no case for interference with the
award of reinstatement. The decision of the High Court was affirmed by the Supreme Court.94 Likewise in Panitole Tea
Estate, the court declined to interfere with the award of reinstatement because the plea of loss of confidence against the
reinstatement which required determination on facts, was not raised before the labour court.95 In Assam Match Co, the
court held that the fact that a domestic inquiry was held against the employee on such a charge resulting in loss of
confidence, the employee should not be reinstated.96 In NM Desai, the workmen found guilty of misappropriation in a
domestic inquiry, withdrew all their contentions including the illegality of the order of the punishment of dismissal and
admitted their guilt before the labour court and prayed for mercy but the labour court still ordered their reinstatement with
back-wages on the ground that the punishment was too cruel and disproportionate to the act of misconduct, in the
circumstances of the case. The Gujarat High Court held that the order of the labour court was unjustified and remanded the
matter for examining the cases afresh. Though the court noted that it is hard for the people to find jobs these days and the
delinquent workmen were with dependent families, it held that such considerations are not relevant for deciding the case. It
had further observed:

After all, services with such public corporations are not pasture grounds always open for the people or they are not brought about
for the purpose of furnishing employment to the unemployed in the society. We would, therefore, say that all cases are required to
be examined on their own merits and interests not only of the certain persons likely to be adversely affected are to be seen, but also
interests of such public administrations require to be closely examined and given a due thought.97

In Manoj Mishra, the facts briefly were: the employee who studied up to 12th standard and was working as Tradesman in
Kakrapar Atomic Project (KAAP) was charge-sheeted for the misconduct for unauthorizedly communicating with press
and misleading information causing embarrassment to and damaging the reputation of the project. In the course of the
enquiry, the employee admitted the charges voluntarily and categorically. Acting on enquiry report, the disciplinary
authority ordered the removal of the appellant from the service of KAPP w.e.f. 30 March 1996. The issue before the
Supreme Court was whether the said acts proved against the employee could be termed as bonafide ‘whistle blowing’
meant for cleansing the organisation and whether the punishment was disproportionate to the act of misconduct.
Dismissing the appeal filed by the workman, Nijjar J (for himself and Iqbal J), of the Supreme Court held:

In our opinion, the appellant without any justification assumed the role of vigilante.. .. The newspaper reports as well as the other
publicity undoubtedly created a great deal of panic among the local population as well as throughout the State of Gujarat. Every
informer cannot automatically be said to be a bona fide “whistle blower”. A “whistle blower” would be a person who possesses the
qualities of a crusader. His honesty, integrity and motivation should leave little or no room for doubt. It is not enough that such
person is from the same organization and privy to some information, not available to the general public. The primary motivation
for the action of a person to be called a “whistle blower” should be to cleanse an organization. It should not be incidental or
byproduct for an action taken for some ulterior or selfish motive.. .. the action of the appellant herein was not merely to highlight
the shortcomings in the organization. The appellant had indulged in making scandalous remarks by alleging that there was
widespread corruption within the organization. Such allegations would clearly have a deleterious effect throughout the
organization apart from casting shadows of doubts on the integrity of the entire project. It is for this reason that employees
working within the highly sensitive atomic organization are sworn to secrecy and have to enter into a confidentiality agreement. In
our opinion, the appellant had failed to maintain the standard of confidentiality and discretion which was required to be
maintained.. .. We are not satisfied that this is a case of ‘glaring injustice’.. .. In our opinion, the punishment imposed on the
appellant is not ‘so disproportionate to the offence as to shock the conscience’ of this Court.98

84 Divisional Manager, APRTC v LC 1979 Lab IC 1141, 1145 (AP) (DB), per Madhava Reddy J.
85 Sheo Sampat Lal v State of Uttar Pradesh 1983 Lab IC 324,327 (All), per TS Misra J.
86 Balbir Chand v Food Corpn of India Ltd (1997) 2 LLJ 879 [LNIND 1996 SC 2148]-80 (SC).
87 Heckett Engineering Co v Workman 1977 Lab IC 1843 [LNIND 1977 SC 289], 1846-47 (SC), per Jaswant Singh J.
88 Municipal Corpn Greater Bombay v PS Malavenkar (1978) 2 LLJ 168 [LNIND 1978 SC 157], 171 (SC) : AIR 1978 SC 1380
[LNIND 1978 SC 157]: 1978 Lab IC 1096 : (1978) 3 SCC 78 [LNIND 1978 SC 157], per Jaswant Singh J.

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89 Awadesh Kumar Bhatnagar v Gwalior Rayon Silk Mig ‘Weaving Ltd (1972) 2 LLJ 143 [LNIND 1972 SC 231] (SC), per
Vaidialingam J.
90 Director General ESI v T Abdul Razak (1996) 2 LLJ 765, 771 (SC), per Agrawal J.
91 Jabalpur Electricity Supply Co v Sambhu Prasad Srivastava (1962) 2 LLJ 216 [LNIND 1962 SC 246] (SC) : AIR 1972 SC 1431
[LNIND 1972 SC 231]: 1972 Lab IC 842 : (1973) 3 SCC 779 [LNIND 1972 SC 231], per Dasgupta J.
92 Rashid Ahmad v Uttar Pradesh State Road Transport Corpn, Lucknow 1987 Lab IC 323 -24 (All), per Sahai J.
93 Hindustan Brown Boveri Ltd v Workmen (1968) 1 LLJ 571 [LNIND 1967 SC 218] (SC), per Shelat J.
94 South Central Rly ECC Society v LC (1983) 1 LLJ 469 (AP) : 1982 (1) ALT 353 : 1988 (33) ELT 351 b (A.P.), per Seetharam
Reddy J.
1 Director General, ESI v T Abdul Razak (1996) 2 LLJ 765, 771 (SC), per Agrawal J.
2 Steel Authority of India v LC (1980) 2 LLJ 456 [LNIND 1980 SC 275], 458-59 (SC) : AIR 1980 SC 2054 [LNIND 1980 SC 275]:
[1980] (41) FLR 283 : 1980 Lab IC 1088 [LNIND 1980 SC 275] : (1980) 3 SCC 734 [LNIND 1980 SC 275], per Gupta J.
3 S Nagiah v Indian Aluminium Co (1991) 1 LLJ 554 (Kant) (DB), per Mohan CJ.
4 Santak Singh v Ninth IT 1984 Lab IC 817, 821 (Cal), per Amitabha Dutta J.
5 Mgmt of Orissa Industries v State of Orissa (1974) 1 LLJ 54 (Ori) (DB). per RN Misra J.
6 Superintendent, Kaliyar Estate v O Kuriakko (1971) 1 LLJ 83 (Ker), per Isaac J.
7 Vinayak Bhagwan Shetye v Kismet Pvt Ltd (1984) 1 LLJ 203. 206 (Born) (DB). per Chandurkar J.
8 Shalimar Paints Ltd v Eighth IT 1977 Lab IC 213. 227-228 (Cal). per RM Datta J.
9 General Assembly of Free Church of Scotland v Overtoun [1904] AC 515.
10 G Mckenzie & Co Ltd v Workmen (1959) 1 LLJ 285 [LNIND 1958 SC 131]. 289 (SC). per Kapur J.
11 Rama Kant Misra v State of Uttar Pradesh 1982 Lab IC 1790 [LNIND 1982 SC 149], 1792 (SC).
12 Blue Star Ltd v NR Sharma 1977 Lab IC 328, 332 (Del), per HL Anand J.
13 Manager, SRT Works v Gen,.Secy, OMCTU 1979 Lab IC 1352, 1354 (Ker), per Gopalan Nambiyar CJ.
14 Uttar Pradesh SRTC v State of UP 1978 Lab IC 355, 357 (All) (DB), per SD Agarwala J.
15 Pepsu RTC v PO, IT 1982 Lab IC 1479 (P&H), per Punchhi J.
16 Blue Star Ltd v NR Sharma 1977 Lab IC 328, 332 (Del), per HL Anand J.
17 Central Bank of India Ltd v PC Jain (1969) 2 LLJ 377 [LNIND 1968 SC 221], 379-80 (SC), per Bhargava J.
18 GM, Parry’s Confectionary Ltd v ITL (1974) 1 LLJ 422 (Mad), per Ismail J.
19 Hind Constn. & Engg Co Ltd v Workmen (1965) 1 LLJ 462 [LNIND 1964 SC 313] (SC), per Hidayatullah J.
20 Pure Drinks Pvt Ltd v Kirat Singh Maungati (1961) 2 LLJ 99, 101-102 (SC), per Gajendragadkar J.
21 Orissa Cement Ltd v Workmen (1960) 2 LLJ 91 [LNIND 1960 SC 86], 94 (SC), per Gajendragadkar J.
22 Shankar Chakravarti v Britannia Biscuit Co Ltd 1979 Lab IC 1192 [LNIND 1979 SC 276], 1205 (SC), per Desai J.
23 Firestone TRCI Ltd v Workmen (1981), 2 LLJ 218, 220 (SC), per Gupta J.
24 Ideal Jawa (India) Pvt Ltd v C Madan Mohan (1972) 1 LLJ 316 [LNIND 1971 KANT 217] : (1971) 2 Mys LJ 472 (Mys) (DB), per
Venkataramiah J.
25 Bharat Iron Works v Bhagubhai Balubhai Patel 1976 Lab IC 4 [LNIND 1975 SC 406], 7 (SC), per Goswami J.
26 State of Haryana v Rajindra Sareen (1972) 1 LLJ 205 [LNIND 1971 SC 585], 218 (SC), per Vaidialingam J.
27 KK Ramankutty v State of Kerala 1973 Lab IC 496,506 (Ker), per Subramonian Potni J.
28 Vinod Behari Dixit v United Commercial Bank 1979 Lab IC 1239, 1244 (Cal), per Salil Kumar Datta J.
29 Tata Engg and Locomotive Co Ltd v SC Prasad (1969) 2 LLJ 799 [LNIND 1969 SC 114]-808 (SC), per Shelat J.
30 Jessop & Co Ltd v Fifth IT 1974 Lab IC 522 (Cal) (DB), per Sabyasachi Mukherji J.
31 Dalmia Dadri Cement Ltd v Murari Lal Bikaneria (1970) 2 LLJ 416 [LNIND 1970 SC 323], 423 (SC) : AIR 1971 SC 22 [LNIND
1970 SC 323], per Mitter J.
32 N Kalindi v Tata Locomotive & Engineering Co Ltd (1960) 2 LLJ 228 [LNIND 1960 SC 95], 233 (SC), per Das Gupta J.

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33 Calcutta Jute Manufacturing Co Ltd v CJM Union (1961) 2 LLJ 686 [LNIND 1961 SC 354] (SC) : AIR 1966 SC 1731 [LNIND
1961 SC 354], per Sarkar J.
34 Sur Enamel Stamping Works Ltd v Workmen (1963) 2 LLJ 367 [LNIND 1963 SC 146] (SC), per Das Gupta J.
35 Rashid Ahmad v UPSRTC 1987 Lab IC 323, 325 (All), per Sahai J.
36 Maharashtra SRTC v AN Jadhav (1981) 1 LLJ 186, 188 (Born) (DB), per Chandurkar J.
37 Oil India Ltd v CGIT 1980 Lab IC (NOC) 93 (Cal) (DB), per Amiya Kumar Mookerji J.
38 Dattatray Trimbak Kulkarni v State Bank of India (1993) 1 LLJ 547 [LNIND 1992 BOM 174] (Born) (DB), per Pemise J.
39 Shalimar Paints Ltd v Eighth IT 1977 Lab IC 213, 227-228 (Cal), per RM Datta J.
40 Siemens Engineering & Mfg Co of India v Union of India [1976] Supp SCR 468, per Bhagwati J.
41 KL Tripathi v State Bank of India (1984) 1 LLJ 2 [LNIND 1983 SC 283],14 (SC), per Sabyasachi Mukharji J.
42 Ram Kumar v State of Haryana 1987 Lab IC 1890 [LNIND 1987 SC 604] (SC), per Dutt J.
43 SSKoshal v State Bank of India 1992 Lab IC 2013, 2019 (MP) (DB), per Dhararnadhikari J.
44 K Ashoka v Vijaya Bank, Bangalore (1998) 2 LLN 273 (Kant), per Shetty J.
45 Gopalkrishna Vaman Kamath v Corporation Bank (2002) 2 LLN 987 (Born), per Bhosale J.
46 GM, Canara Bank v M Raja Rao (2001) 2 LLJ 819 [LNIND 2001 SC 772] (SC) : 2003 (5) SCALE 66 [LNIND 2001 SC 772].
47 Anil Gilurker v Bilaspur-Raipur KG Bank Ltd, AIR 2012 SC (supp) 181, per AK Patnaik J.
48 Avinash S Bhosale (Thro’ LRS) v Union of India AIR 2012 SC (supp) 755.
49 SP Malhotra v Punjab National Bank AIR 2013 SC 3739 [LNIND 2013 SC 629]: (2013) 7 SCC 251 [LNIND 2013 SC 629].
50 B Subbiah v Andhra Handloom WCS Ltd (1978) 1 LLJ 37 (AP) (DB), per Sheth J.
51 Mgmt of SRK Steel Industries v LC (1996) 2 LLJ 619 [LNIND 1995 MAD 595], 621-22 (Mad), per Abdul Hadi J.
52 Sheo Sampat Lal v State of UP 1983 Lab IC 324, 329 (All), per TS Misra J.
53 Mgmtt of Madras Fertilizers Ltd v First Addl LC (1990) 1 LLJ 298 [LNIND 1989 MAD 359], 301 (Mad) (DB), per Nainar
Sundaram J.
54 India Marine Services Pvt Ltd v Workmen (1963) 1 LLJ 122 [LNIND 1962 SC 260], 124 (SC) : AIR 1963 SC 528 [LNIND 1962
SC 260], per Mudholkar J.
55 N Chinnaiah v Depot Manager, APSRTC (1997) 2 LLJ 512, 514 (AP) : 1998 (1) An WR 779 : 1996 (1) APLJ 178, per Bikshapathy
J.
56 Hind Construction and Engg Co Ltd v Workmen (1965) 1 LLJ 462 [LNIND 1964 SC 313], 465 (SC) : AIR 1965 SC 917 [LNIND
1964 SC 313], per Hidayatullah J.
57 Mgmt of FICCI v Workmen (1971) 2 LLJ 630 [LNIND 1971 SC 573], 647 (SC) ; AIR 1972 SC 763 [LNIND 1971 SC 573]: [1972]
(24) FLR 103 : 1972 Lab IC 413 [LNIND 1971 SC 573] : (1972) 1 SCC 40 [LNIND 1971 SC 573], per Jaganmohan Reddy J.
58 Addl District Magistrate v JP Chaturvedi (1996) 1 LLJ 811 [LNIND 1996 SC 40], 813 (SC) : AIR 1996 SC 2359 [LNIND 1996
SC 40]: 1996 (1) SCALE 202 [LNIND 1996 SC 40] : (1996) 2 SCC 12 [LNIND 1996 SC 40], per Majmudar J.
59 Ram Kishan v Union of India (1996) 1 LLJ 982, 985 (SC) : AIR 1996 SC 255 [LNIND 1995 SC 858]: 1995 (5) SCALE 431 :
(1995) 6 SCC 157 [LNIND 1995 SC 858], per Ramaswamy J.
60 Karnataka SRTC v BM Patil (1996) 2 LLJ 536, 538 (Kant) : 1995 (5) Kar LJ 665 [LNIND 1995 KANT 300], per Mohan Kumar J.
61 Palghat BPL & PSP Thozhilali Union v BPL India Ltd (1996) 2 LLJ 335 [LNIND 1995 SC 886] : (1995) 6 SCC 237 [LNIND 1995
SC 886].
62 Gujarat RTC v Kachraji Motiji Parmar (1994) 2 LLJ 332, 335 (Guj), per Shah J.
63 State Bank of India v CGIT (1997) 2 LLJ 573 [LNIND 1996 BOM 751] (Born), per Sri Krishna J.
64 Lakshmi Machine Works Ltd v LC (1997) 2 LLJ 1012 [LNIND 1997 MAD 602], 1019 (AP), per Lakshmanan J.
65 Ritz Theatre Pvt Ltd v Workmen (1962) 2 LLJ 498 [LNIND 1961 SC 241],505 (SC), per Gajendragadkar J.
66 J Gopinathan v Dy Labour Commr 1991 Lab IC 1003, 1007 (Ker), per DJJ Raju J.
67 PH Kalyani v Air France (1963) 1 LLJ 679 [LNIND 1963 SC 45], 682 (SC) : AIR 1963 SC 1756 [LNIND 1963 SC 45], per
Wanchoo J.
68 Secretary, Kottayam DCMSU Ltd v IT (1983) 2 LLJ 225. 227 (Ker) : 1982 KLJ 686 . per UL Bhat J.

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69 Buckingham and Carnatic Co Ltd v Workers [1952] LAC 490.

70 Indian Iron and Steel Co Ltd v Workmen (1958) 1 LLJ 260 [LNIND 1957 SC 105] (SC) : AIR 1958 SC 130 [LNIND 1957 SC
105], per SK Das J.
71 Balipara Tea Estate v Workmen (1959) 2 LLJ 245 [LNIND 1959 SC 80], 249 (SC), per Sinha J.
72 Mgmt. of Hyderabad Usha Works v IT (1970) 2 LLJ 315 (AP) (DB).
73 Tata Engineering & Locomotive Co Ltd v SC Prasad (1969) 2 LLJ 799 [LNIND 1969 SC 114],812 (SC), per Shelat J.
74 Hind Construction and Engineering Co Ltd v Workmen (1965) 1 LLJ 462 [LNIND 1964 SC 313], 465 (SC) : AIR 1965 SC 917
[LNIND 1964 SC 313], per Hidayatullah J.
75 Ved Prakash Gupta v Delton Cable India Pvt Ltd, 1984 Lab IC 658 [LNIND 1984 SC 380],662 (SC), per Vardarajan J.
76 Divl Mgr., United Insurance Co Ltd v T Radhakrishna Murthy 1986 Lab IC 1954 (AP) (DB), per Jeevan Reddy J.
77 MPF, APDDC v VK Durga 1988 Lab IC 833, 835 (AP), per MN Rao J.
78 Karnataka SRTC v N Nagendrappa 1991 Lab IC 2470, 2472-73 (Kant), per Shyarn Sundar J.
79 JK Cotton Spg and Weaving Co Ltd v Workmen (1965) 2 LLJ 153 [LNIND 1965 SC 153], 156 (SC), per Mudholkar J.
80 Ram Swarath Sinha v Mgmt of Balsund Sugar Co Ltd [1954] LAC 697(LAT).
81 State Bank of India v RK Jain (1971) 2 LLJ 599 [LNIND 1971 SC 481],613 (SC), per Vaidialingam J.
82 Workmen of Motipur Sugar Factory v Mgmt. (1965) 2 LLJ 162 [LNIND 1965 SC 109], 170 (SC) : AIR 1965 SC 1803 [LNIND
1965 SC 109], per Wanchoo J.
83 Kharadah & Co Ltd v Workmen (1963) 2 LLJ 452 [LNIND 1963 SC 138], 457 (SC), per Gajendragadkar J.
84 Imperial Tobacco Co of India Ltd v Workmen (1961) 2 LLJ 414 [LNIND 1961 SC 116], 416 (SC), per Wanchoo J.
85 State Bank of India v RK Jain (1971) 2 LLJ 599 [LNIND 1971 SC 481], 604 (SC), per Vaidialingam J.
86 Cooper Engineering Ltd v PP Mundhe (1975) 2 LLJ 379 [LNIND 1975 SC 284], 384 (SC), per Goswami J.
87 Bharat Sugar Mills Ltd v Jai Singh (1961) 2 LLJ 644 [LNIND 1961 SC 306], 649 (SC) : [1962] 3 SCR 684 [LNIND 1961 SC 306],
per KC Das Gupta J.
88 Ritz Theatre Pvt Ltd v Workmen (1962) 2 LLJ 498 [LNIND 1961 SC 241] (SC), per Gajendragadkar J.
89 State Bank of India v RK Jain (1971) 2 LLJ 599 [LNIND 1971 SC 481] (SC) : AIR 1972 SC 136 [LNIND 1971 SC 481]: 1972 Lab
IC 13 [LNIND 1971 SC 481] : (1972) 4 SCC 304 [LNIND 1971 SC 481] per Vaidialingam J.
90 Delhi Cloth & Gen Mills Co Ltd v Ludh Budh Singh (1972) 1 LLJ 180 [LNIND 1972 SC 17], 198-99 (SC) : AIR 1972 SC 1031
[LNIND 1972 SC 17]: (1972) 1 SCC 595 [LNIND 1972 SC 17], per Vaidialingam J.
91 Mgmt of AVP(C) Ltd v Secretary, AVPE Union 1982 Lab IC 261 -62 (Ker), per Bhaskaran J.
92 India FDS Ltd v LC 1996 Lab IC 725 (Mad) (DB), per Ramanujan J.
93 Workmen of Firestone TRCI Ltd v Mgmt. (1973) 1 LLJ 278 [LNIND 1972 SC 133], 296 (SC) : AIR 1973 SC 1227 [LNIND 1973
SC 430]: [1973] (26) FLR 359 : (1973) 1 SCC 813 [LNIND 1973 SC 430], per Vaidialingam J.
94 Andhra Pradesh SRTC v IT 1971 Lab IC 594, 597-98, per Sambasiva Rao J.
95 Hindustan Steel Ltd v Workmen (1970) 1 LLJ 337 (Ori) (DB), per Barman J.
1 Premnath Motors Workshop Pvt Ltd v IT (1971) 1 LLJ 167 (Del), per Deshpande J.
2 Supdg. Engr., Kancheepuram ED Circle v MK Vasu, (2010) 4 LLJ 55 (Mad .)
3 Madhya Pradesh SRTC v IC 1970 Lab IC 510 (MP) (DB), per Bishambhar Dayal CJ.
4 Fort William Co Ltd v Ram Deo Ram 1978 Lab IC 891 (Cal) (DB), per Anil K Sen J.
5 State Bank of India v RK Jain (1971) 2 LLJ 599 [LNIND 1971 SC 481], 614 (SC) : AIR 1972 SC 136 [LNIND 1971 SC 481]:
1972 Lab IC 13 [LNIND 1971 SC 481] : (1972) 4 SCC 304 [LNIND 1971 SC 481], pervaidialingam J.
6 Delhi Cloth and General Mills Co Ltd v Ludh Budh Singh (1972) 1 LLJ 180 [LNIND 1972 SC 17], 198 (SC) : AIR 1972 SC 1031
[LNIND 1972 SC 17]: (1972) 1 SCC 595 [LNIND 1972 SC 17], per Vaidialingam J.
7 Cooper Engineering Ltd v PP Mundhe (1975) 2 LLJ 379 [LNIND 1975 SC 284], 385 (SC), per Goswami J.
8 Shankar Chakravarti v Britannia Biscuit Co (1979) 2 LLJ 194 [LNIND 1979 SC 276],205,207-08 (SC) : AIR 1979 SC 1652
[LNIND 1979 SC 276]: [1979] (39) FLR 70 : 1979 Lab IC 1192 [LNIND 1979 SC 276] : (1979) 3 SCC 371 [LNIND 1979 SC
276], per Desai J.

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9 Mgmt of NDTC v Lieutenant Governor of Delhi 1993 Lab IC 913, 915-16 (Del), per Sabharwal J.
10 Delhi Cloth &Gen Mills Co Ltd v Ludh Budh Singh (1972) 1 LLJ 180 [LNIND 1972 SC 17], 190-200 (SC) : AIR 1972 SC 1031
[LNIND 1972 SC 17]: (1972) 1 SCC 595 [LNIND 1972 SC 17], per Vaidialingam J.
11 State Bank of India v RK Jain (1971) 2 LLJ 599 [LNIND 1971 SC 481], 614 (SC) : AIR 1972 SC 136 [LNIND 1971 SC 481]:
1972 Lab IC 13 [LNIND 1971 SC 481] : (1972) 4 SCC 304 [LNIND 1971 SC 481], per Vaidialingam J.
12 Cooper Engineering Limited vs. Shri P.P. Mundhe (1975) 2 LLJ 379 [LNIND 1975 SC 284], 385-86 (SC) : AIR 1975 SC 1900
[LNIND 1975 SC 284]: [1975] (31) FLR 188 : 1975 Lab IC 1441 [LNIND 1975 SC 284] : (1975) 2 SCC 661 [LNIND 1975 SC
284], per Goswami J.
13 Basu Deba Das v MR Bhope (1993) 2 LLJ 1022, 1033 (Born), per Ashok Agarwal J.
14 Workmen of Firestone TRCI Pvt Ltd v Mgmt. (1973) 1 LLJ 278 [LNIND 1972 SC 133],296 (SC), per Vaidialingam J.
15 State Bank of India v RK Jain (1971) 2 LLJ 599 [LNIND 1971 SC 481],614 (SC), per Vaidialingam J.
16 Cheupu Service Co-op Bank Ltd v IT 1980 Lab IC 911, 914 (Ker), per Thommen J.
17 Rajendra Jha v PO, LC 1984 Lab IC 1583 [LNIND 1984 SC 218], 1585-86 (SC), per Chandrachud CJI.
18 Basu Deba Das v MR Bhope 1993 Lab IC 1677, 1689 (Bom), per Agarwal J.
19 Lalu Mahto v CGIT 1987 Lab IC 416 (Pat), per SB Sanyal J.
20 Desh Raj Gupta v IT 1991 Lab IC 1892 (SC), per Sharma J.
21 Chhatia Weaving Mills v IT 1990 Lab IC 1399, 1402 (Ori) (DB), per Patnaik J.
22 Ideal Jawa (India) Pvt Ltd v Madan Mohan (1972) 1 LLJ 316 [LNIND 1971 KANT 217], 324 : (1971) 2 Mys 472(Mys) (DB), per
Venkataramiah J.
23 Delhi Cloth and Genl Mills Co Ltd v Ludh Budh Singh (1972) 1 LLJ 180 [LNIND 1972 SC 17], 198 (SC), per Vaidialingam J.
24 Radio and Elec. Mfg Co Ltd v IT (1978) 2 LLJ 131 (Kant), per Rama Jois J.
25 Vinayak Bhagwan Shetya v Kismet Pvt Ltd (1984) 1 LLJ 203, 206 (Born) (DB), per Chandurkar J.
26 State of Punjab v Surat Singh 1985 Lab IC 10, 12 (P&H), per Punchhi J.
27 Hindustan Machine Tools Ltd v LC 1982 Lab IC 1278 (P&H) (DB), per RN Mittal J.
28 Workmen of Firestone TRCI Ltd v Mgmt (1973) 1 LLJ 278 [LNIND 1972 SC 133], 293-94 (SC) : AIR 1973 SC 1227 [LNIND
1973 SC 430]: [1973] (26) FLR 359 : (1973) 1 SCC 813 [LNIND 1973 SC 430] per Vaidialingam J.
29 East India Hotels v Workmen (1974) 1 LLJ 282 [LNIND 1973 SC 396]. 285-86 (SC). per Jaganmohan Reddy J.
30 Rajasthan SRTC v Lal Chand (1994) 2 LLJ 628. 630 (Raj) (DB). per MC Jain J.
31 General Employees’ Union v Ambassador Sky Chef 1996 Lab IC 299, 303-04 (Born), per Srikrishna J.
32 Workmen of Firestone TRCI Pvt Ltd v Mgmt (1973) 1 LLJ 278 [LNIND 1972 SC 133], 295, per Vaidialingam J.
33 Santak Singh v 9th IT 1984 Lab IC 817, 822 (Cal), per Amitabha Dutta J.
34 Rama Kant Misra v State of Uttar Pradesh 1982 Lab IC 1790 [LNIND 1982 SC 149], 1792 (SC).
35 1996 Lab IC 299, 303-04 (Born), per Srikrishna J.
36 Mohan Sugan Naik v NTC Ltd (1995) 1 LLJ 110, 112 (Born) (DB), per Pendse J.
37 Dharmapuri Distt Co-op Sugar Mills v LC (1997) 2 LLJ 833 [LNIND 1997 MAD 31], 838 (Mad) (DB), per Kanakaraj J.
38 Harpal Singh v LC, Ambala 1994 Lab IC 1367, 1369 (P&H), per JL Gupta J.
39 Tata Iron & Steel Co Ltd v LC, Jamshedpur (1996) 2 LLJ 874, 879, per Sahay J.
40 Ganges Mfg Co Ltd v State of West Bengal (1996) 2 LLJ 904 [LNIND 1995 CAL 143], 912 (Cal), per GK Bhattacharjee J.
41 Bharat Hotel v Workmen 1994 Lab IC 380, 383-84 (Ker), per Pillay J.
42 KSRTC v John D’Souza 1995 Lab IC 1119, 1122 (Kant), per Saldanha J.
43 Balasore DCCB Ltd v Karunakar Das (1995) 2 LLJ 196, 201 (Orr) (DB), per Jagadeb Roy J.
44 MSRT Corpn v TA Gavandee (1994) 1 LLJ 78 [LNIND 1993 BOM 500], 79 (Bom), per Puranik J.
45 Ganesh Rajan Servai v Bannett Coleman & Co Ltd 1989 Lab IC 534, 540 (Bom), per Kantharia J.
46 Mgmt of TUCS Ltd v PO, Principal LC (2000) 4 LLN 276 (Mad), per Meenakumari J.
47 SMukherjee v Third IT (1997) 3 LLJ (Supp) 847, 853 (Cal), per Sen J.

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48 Bharat Forge Co Ltd v AB Zodge (1996) 2 LLJ 643 [LNIND 1996 SC 428], 645 (SC) : AIR 1996 SC 1556 [LNIND 1996 SC 428]:
1996 (2) SCALE 731 [LNIND 1996 SC 428] : (1996) 4 SCC 374 [LNIND 1996 SC 428].
49 Raveendra Kamath v VA Dholakia (1992) 2 LLJ 555, 558 : 1992 (1) KLJ 675 (Ker) (DB), per Paripoornan J.
50 Chela Beedi Workers ICS Ltd v KK Bharathan (1994) 2 LLJ 396, 399 : [1994 (68) FLR 1231 ] (Ker), per Shamsuddin J.
51 Adichanalloor FSC Bank v LC (1996) 2 LLJ 555 -57 : ILR 1996 (2) Kerala 725 [LNIND 1996 KER 77] (Ker) (DB), per Koshy J.
52 Rajendra Jha v LC 1984 Lab IC 1583 [LNIND 1984 SC 218], 1585-86 (SC), per Chandrachud J.
53 Cheran Transport Corporation Ltd v LC (1998) 1 LLN 211 (Mad), per Balasubramanian J.
54 Karnataka SRTC v GA Salimani (2000) 4 LLN 830 (Kant) (DB).
55 Shambhu Nath Goyal v Bank of Baroda (1984) 1 LLN 8 (SC), per Varadarajan J.
56 KSRTC v Lakshmidevamma (2001) 3 LLN 105, 203 (4) (SC), per Hegde J.
57 Beck & Co India Ltd v SJ Mehta (1999) 2 LLJ 836 (Guj), per Balia J.
58 United Planters Assn of SI v KG Sangameswaran 1997 Lab IC 1513, 1516-17 (SC), per Shaghir Ahmed J.
59 BS Hiremath v Mgmt. of Sri Ganeshar Textile Mills 1979 Lab IC 155, 160-61 (Kant), per Rama Jois J.
60 Ganesh Rajan Servai v Bennett Coleman & Co Ltd 1989 Lab IC 534, 540 (Born), per Kantharia J.
61 Bharat Hotel, Ernakulam v Workmen of Bharat Hotel 1994 Lab IC 380, 383-84 (Ker), per Pillay J.
62 Workmen of Firestone TRCI Pvt Ltd v Mgmt. (1973) 1 LLJ 278 [LNIND 1972 SC 133], 293-94 : AIR 1973 SC 1227 [LNIND 1973
SC 430]: (1973) 1 SCC 813 [LNIND 1973 SC 430] (SC), per Vaidialingarn J.
63 Super Silk HWCPSS v LC (1998) 1 LLN (220) (Mad), per Dinakaran J.
64 Tourist Hotel v BS Kamble (2001) 1 LLN 674 (Bom), per Kochar J.
65 Inder Singh v IT (1999) 3 LLN 377 (P&H), per Gupta J.
66 Municipal Committee, Tauru v Harpal Singh (1998) 80 FLR 680 (SC).
67 ZCE, UP Jal Nigam v PO, LC (2001) 4 LLN (All), per Anjani Kumar J.
68 Gujarat SRTC v KN Trambadia 1994 Lab IC 498, 505 (Guj), per Thakker J.
69 Andhra Pradesh SRTC v Addl LC-cum-IT (1984) 1 LLJ 128, 132 (AP), per Ramachandra Rao J.
70 Rama Kant Misra v State of Uttar Pradesh 1982 Lab IC 1790 [LNIND 1982 SC 149], 1792 (SC).
71 Bhagirath Mal Rainwa v Judge, IT (1995) 1 LLJ 960, 963-64 (Raj), per Singhvi J.
72 Mgmt. of KPVSM Rowther & Co P Ltd v P Govindarajulu (1996) 2 LLJ 111 [LNIND 1995 MAD 632], 113 (Mad), per Babu J.
73 Jai Bhagwan v Mgmt. of Ambala CCB Ltd 1983 Lab IC 1694 -95 (SC), per Chinnappa Reddy J. n.
74 Gujarat Steel Tubes Ltd v GST Mazdoor Sabha (1980) 1 LLJ 137 [LNIND 1979 SC 464], 156-63 : AIR 1980 SC 1896 [LNIND
1979 SC 464]: (1980) 2 SCC 593 [LNIND 1979 SC 464] (SC), per Krishna Iyer J.
75 Mgmt of Bangalore MCECS Ltd v EV Raju (1987) 1 LLJ 22, 27 (Kant), per Bopanna J.
76 Post Graduate IMER v LC (1990) 1 LLJ 70, 72 (P&H) (DB), per Bhalla J.
77 Workmen of Food Corpn of India v Union of India (1997) 2 LLJ 462 [LNIND 1996 CAL 111], 466 (Cal), per NN Bhattacharjee J.
78 Nanabhai B Parmar v Ahmedabad MC Workshop 1997 Lab IC 3463, 3465 (Guj), per Keshote J.
79 Godrej and Boyce Mfg Ltd v PO, LC(1998) 3 LLN 363 (Mad), per Sathasivam J.
80 Garden Reach Ship Builders and Engineers Ltd v Third IT (1998) 4 LLN 559 (Cal), per Kundu J.
81 State Bank of India v Tarun Kr Banerjee (2000) 2 LLJ 1373 [LNIND 2000 SC 1255] (SC), per Rajendta Babu J.
82 Hindustan Motors Ltd v TK Bhattacharya (2002) 3 LLN 767 (SC), per Mohapatta J.
83 UPSRTC v Subhash Chandra Sharma (2000) 1 LLJ 1117 [LNIND 2000 SC 492] (SC), per Saghir Ahmad J.
84 Kamala v Yemegundle Estate (2001) 3 LLN 583 (Kant), per Vallinayagam J.
85 Anna Transport Corporation v LC (1998) 1 LLN 710 (Mad), per Jayasimha Babu J.
86 Delhi Transport Corporation v Sardar Singh, AIR 2004 SC 4161 [LNIND 2004 SC 788]: (2004) 3 LLJ 543 [LNIND 2004 SC
788] : (2005) 1 MLJ 40 [LNIND 2004 SC 788] (SC) : 2004 (6) SCALE6 13 : (2004) 7 SCC 574 [LNIND 2004 SC 788], per
Pasayat J.

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87 Ashok Leyland Ltd v PO, LC (1999) 1 LLN 240 (Mad), per Sathasivam J.
88 Janatha Bazar v Secretary. SN Sangha (2000) 4 LLN 571 (SC).
89 Mgmt of Sri Ganapathi Bus Service v LC (2001) 1 LLN 780 (SC).
90 Vikramaditya Pandey v IT (2001) 1 LLN 852 (SC).
91 Krishan Kumar v Haryana SFCCW Stores Ltd (1998) 2 LLN 324 (P&H) (DB), per Mongia J.
92 State Bank of India v RC Dubey (1999) 3 LLN 887, 894 (All), per Garg J.
93 Union of India v G Ganayutham (1998) 5 LLN (Supp) (SC).
94 State of Karnataka v H Nagaraj (1998) 9 see 671.
95 Canara Bank v HT Koli (1999) 1 LLN 197 (Born), per Lodha J.
96 Mannalal v Second LC (1998) 1 LLN 862, 868 (Born), per Sirpurkar J.
97 Union of India v Parma Nanda (1989) 1 LLN 800, 808 (SC).
1 Mgmt of Catholic Syrian Banj v IT (1999) 1 LLN 280 [LNIND 1998 MAD 861] (Mad), per Jayasirnha Babu J.
2 Eicher Goodearth Ltd v LC (1999) 1 LLN 587 (Raj), per Misra J.
3 Baby Vijayan v IT (1999) 2 LLJ 155 (Ker) (DB), per Lakshmanan J.
4 Mgmt of Pattukottai ATC Ltd v S Prakasam (1999) 2 LLN 725 (Mad), per Jain J.
5 Uttar Pradesh SRTC v Pukhraj Singh (1999) 3 LLN 380 (SC).
6 Mgmt of Nagammal Mills Ltd v PO (2001) 4 LLN 944 (Mad), per Venkatachalam J.
7 Udumbachola EWU v ICRI (1998) 1 LLN 622 (SC).
8 LIC of India v TG Marathe (1999) 2 LLN 967 (Bom), per Pandya J.
9 HS Chandra Shekhara Chari v DC, KSRTC (1999) 2 LLN 995, 997 (SC).
10 United Bank of India v. Tamil Nadu BDC Union AIR 2008 SC (supp) 1402, per Pasayat J.
11 Gujarat SRTC v SA Kasundra (1999) 3 LLN 626 (Guj), per Trivedi J.
12 APSRTC v K Pochaiah (1999) 2 LLJ 976 [LNIND 1998 SC 649] (SC) : AIR 1999 SC 2638 [LNIND 1998 SC 649]: (1999) 1 SCC
191 [LNIND 1998 SC 649].
13 Laxmi Kant v PO, IT (1999) 1 LLJ 224 (P&H) (DB), per Gupta J.
14 UPSRTC v SC Sharma (2000) 2 LLN 402 (SC), per Saghir Ahmed J.
15 Ghanshyam Sharma v Rajasthan SRTC (2001) 1 LLN 417 (Raj) (DB), per Arun Madan J.
16 Syndicate Bank v Bakhtawar Singh (2001) 2 LLJ 143 [LNIND 2001 DEL 128] (Del) (DB).
17 Abdul Gani v Vishweshwaraiah Iron & Steel Ltd (1999) 1 LLN 371 (Kant) (DB), per Goud J.
18 Karnataka SRTC v BB Tabusi (2000) 3 LLN 851 (Kant) (DB), per Sreedhar Rao J.
19 Rajasthan SRTC v Jagdish Ram (2000) 3 LLN 1037 (Raj), per Chauhan J.
20 DC, Maharashtra SRTC v SN Ghorpade (2000) 4 LLN 112 (Bom), per Kochar J.
21 Precipenium Valve Manufacturers v PO, Fifth LC (2000) 4 LLN 168 (Bom), per Kochar J.
22 SArmugam v PO, LC (2002) 4 LLN 391 (Mad), per Jayasirnha Babu J.
23 United Bank of India v CGIT (2001) 1 LLN 1158 (Cal), per Bhattacharya J.
24 Karnataka SRTCV BS Hullikatti (2001) 1 LLN 893 (SC).
25 Mgmt of Pandian Roadways Corpn Ltd v PO, LC (2001) 2 LLN 1104 (Mad), per Pandian J.
26 PR Divakaran v PO, Principal LC (2001) 3 LLN 661 (Mad), per Chockalingam J.
27 Uttar Pradesh SRTC v ML Gupta (2001) 3 LLN 707 (SC).
28 VP Ramulu v LC (2001) 3 LLN 906 (AP) (DB), per Sinha CJ.
29 Mgmt of VIS Ltd v BVG Patil (2000) 4 LLN 850 (Kant) (DB), per Bharuka J.
30 Anantnathji Maharaj Jain Temple v RG Pandey (2001) 3 LLN 954 (Bom), per Kochar J.
31 Union Bank of India v KK Salian (2001) 4 LLN 226 (Bom), per Dr Chandrachud J.

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32 P Thangaraj v Oothu Estate (2001) 4 LLN 862 (Mad) (DB), per Kalifulla J.
33 V Rajendran v LC (2001) 4 LLN 864 (Mad), per Sivasubramaniam J.
34 P Rajanna v LC (2002) 1 LLN 578 (AP) (DB), per Nayak J.
35 Mgmt of Cheran Transport Corpn v PO, IT (2002) 1 LLN 389 (Mad), per Oinakaran J.
36 Maharashtra Genl Kamgar Union v USV Ltd (2002) 1 LLN (Bom), per Dr Chandrachud J.
37 Depot Manager, APSRTC v V Velayudham (2002) 2 LLN 37 (SC).
38 Gajanan Vibhute v Larsen & Toubro Ltd (2002) I LLN 788(Bom), per Chandrachud J.
39 Jawahar Khalifulla v DCL (2002) 3 LLN 1090 (Mad), per Venkatachalam J.
40 Bhagat Ram v State of HP (1983) 2 SCC 442 [LNIND 1983 SC 35] : AIR 1983 SC 454 [LNIND 1983 SC 35]: 1983 Lab IC 662
[LNIND 1983 SC 35] : (1983) 2 LLJ 1 [LNIND 1983 SC 35] (SC).
41 Ranjit Thakur v Union of India, (1987) 4 SCC 611 [LNIND 1987 SC 964] : AIR 1987 SC 2386 [LNIND 1987 SC 964]: 1988 Cr
LJ 158 : (1988) 1 LLJ 256 [LNIND 1987 SC 697] (SC).
42 UP State RTC v Mahesh Kumar Mishra, (2000) 3 SCC 450 [LNIND 2000 SC 491] : AIR 2000 SC 1151 [LNIND 2000 SC 491].
43 Dev Singh v Punjab Tourism Dev. Corpn AIR 2003 SC 3712 [LNIND 2003 SC 732]: (2003) 2 LLJ 823 (SC) : 2003 (7) SCALE
122 [LNIND 2003 SC 732] : (2003) 8 SCC 9 [LNIND 2003 SC 732], per Hegde J.
44 Lalit Popli v Canara Bank, AIR 2003 SC 1796 [LNIND 2003 SC 216]: (2003) 2 LLJ 324 [LNIND 2003 SC 216] (SC) : (2003) 3
SCC 583 [LNIND 2003 SC 216], per Pasayat J.
45 Kailash Nath Gupta v EO, Allahabad Bank, AIR 2003 SC 1377 : (2003) 2 LLJ 367 (SC) : 2003 (3) SCALE 428 : (2003) 9 SCC
480, per Patil J.
46 North West Karnataka RTC v HH Pujar, AIR 2008 SC 3060 [LNIND 2008 SC 1465]: (2008) 12 SCC 698 [LNIND 2008 SC 1465]
: (2008) 3 LLJ 629 [LNIND 2008 SC 1465] (SC), per Pasayat J.
47 A.L. Kalra v The P&E Corpn of India Ltd (1984) 2 LLJ 186 [LNIND 1984 SC 136] (SC) : AIR 1984 SC 1361 [LNIND 1984 SC
136]: (1984) 3 SCC 316 [LNIND 1984 SC 136], per Desai J.
48 Glaxo Laboratories (L) Ltd. v. PO, LC (1984) 1 LLJ 16 [LNIND 1983 SC 289] (SC) : AIR 1984 SC 505 [LNIND 1983 SC 289]:
1983 (2) SCALE 831 [LNIND 1983 SC 289] : (1984) 1 SCC 1, per Desai J.
49 C&MD, Bharat Petroleum Corpn v TK Raju, AIR 2006 SC 3504 [LNIND 2006 SC 143]: (2006) 2 LLJ 113 [LNIND 2006 SC 143]
(SC) : 2006 (2) SCALE 553 [LNIND 2006 SC 143] : (2006) 3 SCC 143 [LNIND 2006 SC 143], per SB Sinha J.
50 Tata Oil Mills Co Ltd v Workmen (1964) 2 LLJ 113 [LNIND 1964 SC 111] (SC) : AIR 1965 SC 155 [LNIND 1964 SC 111],
Gajendragadkar CJI.
51 Mulchandani Radio & Elec. Inds. Ltd v Workmen AIR 1975 SC 2125 [LNIND 1975 SC 35]: 1975 Lab IC 1508 : (1975) 1 LLJ 391
[LNIND 1975 SC 35] SC : (1975) 4 SCC 731 [LNIND 1975 SC 35], per Gupta J.
52 Mahendra Singh Dhantwal v Hindustan Motors Ltd AIR 1976 SC 2062 [LNIND 1976 SC 222]: (1976) 2 LLJ 259 [LNIND 1976
SC 222] SC : (1976) 4 SCC 606 [LNIND 1976 SC 222], per Goswami J.
53 Rajender Kumar Kindra v. Delhi Administration, (1984) 2 LLJ 517 [LNIND 1984 SC 267] (SC) : AIR 1984 SC 1805 [LNIND
1984 SC 267]: 1984 (2) SCALE 428 [LNIND 1984 SC 267] : (1984) 4 SCC 635 [LNIND 1984 SC 267], per Desai J.
54 Rasiklal V Patel v Ahmedabad Municipal Corpn, (1985) Lab IC 729, per Desai J.
55 Rao, EM (2015), Industrial Jurisprudence: A Critical Commentary, 2nd ed., Lexis Nexis, pp. 196-200.
56 AIOE, Industrial Unrest - Past Trend & Lessons for Future, New Delhi, pp. 3-5.
57 Rao, EM (Ibid., at p. 200).
58 Ibid., at pp. 190-4.
59 Bhavani Metal Works v PR Sawant, (1991) 1 CLR 147 [LNIND 1990 BOM 644] (Bom .), per Dhanuka J.
60 BPL India Ltd v BPL & PSP Thozhilali Union, (1992) I LLJ 115 (Ker) : ILR 1990 (3) Kerala 102 [LNIND 1989 KER 425], per
Sukumaran J.
61 MR Savant v GM, Mather & Platt (India) Ltd. , (1992) II LLJ 394(401-2) (Bom) : 1992 (2) Bom CR 184 [LNIND 1991 BOM 473],
per Srikrishna J.
62 Narayanan v BPL Systems (P) Ltd. , (1995) I LLJ 43(45-6) (Ker) : 1994 (1) KLJ 760, per MJ Rao CJ.
63 Municipal Corpn of Greater Bombay v SE Phadtare, (1995) I LLJ 70(Bom) : [1994 (68) FLR 674 ], per Pendse J.
64 CCSU v Minister of Civil Service, [1985] I AC 374, per Lord Diplock LJ.

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65 Workmen of Bharat Fritz Werner (P) Ltd v Mgmt, AIR 1990 SC 1054 [LNIND 1990 SC 87]: (1990) 3 SCC 565 [LNIND 1990 SC
87], pe r Agarwal J.
66 Tata Engg & Locomotive Co Ltd v NK Singh, (2007) I LLJ 726(SC), per Pasayat J.
67 Kerala Solvent Extractions Ltd v A Unnikrishnan, (1994) II LLJ 888(889-90) (SC) : 1994 (1) SCALE 631 [LNIND 1993 SC 1064]
: (2006) 13 SCC 61.
68 JK Iron and Steel Co Ltd v Iron & Steel Mazdoor Union, (1956) I LLJ 227 (SC) : AIR 1956 SC 231 [LNIND 1955 SC 119]:
[1955] 2 SCR 1315 [LNIND 1955 SC 119], per Bose J.
69 Rao, EM (ibid., pp. 788-9).
70 UPSRTC v Suresh Pal, AIR 2006 SC 3227 [LNIND 2006 SC 763]: (2006) 3 LLJ 967 [LNIND 2006 SC 763] (SC) : 2006 (9)
SCALE 481 [LNIND 2006 SC 763] : (2006) 8 SCC 108 [LNIND 2006 SC 763], per AK Mathur J.
71 Rama Kant Misra v. State of Uttar Pradesh and Others, AIR 1982 SC 1552 [LNIND 1982 SC 149]: 1982 Lab IC 1790 [LNIND
1982 SC 149] : (1982) 3 LLJ 472 : 1982 (2) SCALE 942 [LNIND 1982 SC 149] : (1982) 3 SCC 346 [LNIND 1982 SC 149], per
Desai J.
72 Ved Prakash Gupta v. Delton Cable India(P) Ltd., AIR 1984 SC 914 [LNIND 1984 SC 380]: (1984) 1 LLJ 546 [LNIND 1984 SC
62] : 1984 (1) SCALE 474 [LNIND 1984 SC 380] : (1984) 2 SCC 569 [LNIND 1984 SC 380], per Varadarajan J.
73 Glaxo Laboratories (I) Ltd v LC, (1984) 1 LLJ 16 [LNIND 1983 SC 289] : AIR 1984 SC 505 [LNIND 1983 SC 289]: 1983 (2)
SCALE 831 [LNIND 1983 SC 289] : (1984) 1 SCC 1, per Desai J.
74 Mahindra and Mahindra Ltd., v. N.B. Narawade, AIR 2005 SC 1993 [LNIND 2005 SC 172]: (2005) 1 LLJ 1129 [LNIND 2005 SC
172] : (2005) 3 SCC 134 [LNIND 2005 SC 172], per Santosh Hegde J.
75 Collector Singh v LML Ltd., [2015] 1 LLJ 86 (SC) : 2014 (12) SCALE 616 [LNIND 2014 SC 932] : (2015) 2 SCC 410 [LNIND
2014 SC 932], per R Banumathi J.
76 Rao, EM (2015), Industrial Jurisprudence: A Critical Commentary, 2nd ed., Lexis Nexis, p. 197.
77 Depot Manager, APSRTC v P Jayaram Reddy, AIR 2008 SC (supp) 713, per SB Sinha J.
78 Divl. Manager, RSRTC v Kamruddin, AIR 2009 SC 2528 [LNIND 2009 SC 1257]: (2009) 3 LLJ 591 : 2009 (8) SCALE 182
[LNIND 2009 SC 1257] : (2009) 7 SCC 552 [LNIND 2009 SC 1257], per SB Sinha J.
79 Tamilnadu State Transport Corpn v. PO, Labour Court (2010) 4 LLJ 311 (Mad .).
80 Usha Breco Mazdoor Sabha v Mgmt, AIR 2009 SC (supp) 994, per SB Sinha J.
81 South Bengal STC v Swapan Kumar Mitra AIR 2006 SC 3533 [LNIND 2006 SC 82]: (2006) 1 LLJ 1087 [LNIND 2006 SC 82] :
2006 (2) SCALE 141 [LNIND 2006 SC 82] : (2006) 2 SCC 584 [LNIND 2006 SC 82], per Pasayat J.
82 LIC of India v R Suresh, AIR 2008 SC (supp) 1887, per Sinha J.
83 Tulsipur Sugar Co Ltd v State of Uttar Pradesh (1969) 2 LLJ 662 [LNIND 1969 SC 132], 669 (SC) : AIR 1970 SC 70 [LNIND
1969 SC 132]: (1969) 2 SCC 100, per Shelat J.
84 JK Synthetics Ltd v KP Agarwal, AIR 2007 SC (supp) 637, per Raveendran J.
85 DGM, SBI v PO, CGIT-cum-LC, (2015) 1 LLJ 206 (Mad) : 2015 Lab IC 596 : 2015 (2) LLN 216, per R Subbaiah J.
86 KVS Ram v Metropolitan Transport Corporation, (2015) 1 LLJ 257 (SC), per R Banumati J.
87 Gujarat SRTC v SP Mansuri (2001) 4 LLN 1200 (Guj), per Majmudar J.
88 Delhi Development Authority v PO (2001) 2 LLN 720 (Del), per Sen J.
89 Indian Aluminium Co Ltd v LC (1991) 1 LLJ 328, 335 (Pat) (FB), per G Sohani CJ.
90 Dwarka Prasad v Dwarka Das Saraf AIR 1975 SC 1758 [LNIND 1975 SC 263]: (1976) 1 SCC 128 [LNIND 1975 SC 263] (SC),
per Krishna Iyer J.
91 S. Sundaram Pillai v R. Pattabiraman AIR 1985 SC 582 [LNIND 1985 SC 20], 592 (SC), per Murraza Fazal Ali J.
92 Gen. Secy, SICFW Union v. MD, Kerala State Cashew Dev. Corpn Ltd. AIR 2006 SC 2208 [LNIND 2006 SC 390]: 2006 (6)
SCALE 44 : (2006) 5 SCC 201 [LNIND 2006 SC 390], per Pasayat J.
93 Workmen of Firestone TRCI Ltd v Mgmt. (1973) 1 LLJ 278 [LNIND 1972 SC 133], 298 (SC) : AIR 1973 SC 1227 [LNIND 1973
SC 430]: [1973] (26) FLR 359 : (1973) 1 SCC 813 [LNIND 1973 SC 430], per Vaidialingarn J.
94 Dist Manager, APSRTC, v LC (1986) 1 LLJ 250, 252 (AP), per Ramaswamy J.
95 Rohtas Industries Ltd v Workmen 1978 Lab IC 949, 952 (Pat) (DB), per LM Sharma J.
96 AV Swami v IT-cum-LC (1991) 2 LLJ 430 -31 (AP), per Sardar Ali Khan J.

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1 Rajasthan SRTC v Bhaik Nath AIR 2005 SC 1571 [LNIND 2005 SC 139]: (2005) 1 LLJ 1139 [LNIND 2005 SC 139] : RLW 2005
(2) SC 292 : (2005) 2 SCC 369, per Hegde J.
2 Workmen of Firestone TRCI Pvt Ltd v Mgmt (1973) 1 LLJ 278 [LNIND 1972 SC 133], 298 (SC), per Vaidialingam, J.
3 Cooper Engineering Ltd v PP Mundhe (1975) 2 LLJ 379 [LNIND 1975 SC 284], 385 (SC), per Goswami J.
4 President, Rubber ICS Ltd,v State of Kerala 1977 Lab IC 406, 409 (Ker) (DB), per Bhaskaran J.
5 Mgmt of ITC Ltd v K Ramesh Babu 1989 Lab IC (NOC) 14 (Kant), per Urs J.
6 Mgmt of Pioneer Estate v Thangaraj (1977) 1 LLJ 281 [LNIND 1976 MAD 29], 283 (Mad) (DB), per Veeraswami CJ.
7 Neeta Kaplish v LC (1999) 1 LLN 7, 14 (SC), per Saghir Ahmad J.
8 TK Bhattacharya v Hindustan Motors Ltd (2001) 4 LLN 306 (Cal) (DB), per Ganguly J.
9 Workmen of Firestone TRCI Pvt Ltd v Mgmt (I973) 1 LLJ 278, 294 (SC), per Vaidialingam J.
10 Engine Valves Ltd v LC, (1991) 1 LLJ 372 [LNIND 1990 MAD 517], 382 (Mad) (DB), per Raju J.
11 Divisional Manager, APSRTC v LC 1979 Lab IC 1141, 1143 (AP) (DB) per Madhava Reddy J.
12 Kanyakumari Automobiles Pvt Ltd v P Natarajan (1983) 1 LLJ 323 [LNIND 1982 MAD 109], 325 (Mad) per Gokulakrishnan J.
13 Rambhau v Maharashtra State Road Transport Corpn (1992) 2 LLJ 872 [LNIND 1992 BOM 427], 880 (Bom), per HD Patel J.
14 Mgmt of Tabesh Processi v PO, LC 1989 Lab IC 1887, 1891, (Mad), per Swamikkannu J.
15 Bharat Heavy Electricals Ltd v PO (2002) 1 LLN 311 (AP) (DB), per Lakshrnanan CJ.
16 Patiala CCB Ltd v Mehar Chand (1998) 3 LLN 513 (P&H), per Chalapathi J.
17 Western India Automobile Assn v IT (1949) 1 LLJ 245, 256 (FC), per Mahajan J.
18 Gujarat SRTC v Gokalbhai M Patel (2003) 4 LLJ 851 (Guj), per Rathod J.
19 SS Shetty v Bharat Nidhi Ltd (1957) 2 LLJ 696 [LNIND 1957 SC 88], 701 (SC), per Bhagwati J.
20 SS Shetty v Bharat Nidhi Ltd (1957) 2 LLJ 696 [LNIND 1957 SC 88], 701 (SC), per Bhagwati J.
21 Andhra Scientific Co v LC 1971 Lab IC 513, 515 (AP) (DB), per Obul Reddy J.
22 EE, Panchayat (R&BD) v Punabhai Govindbhai (1993) 2 LLJ 835 -36 (Guj) (DB), per Nanavati J.
23 Peer Mohd & Co v Mohamed Hussain (1968) 2 LLJ 98, 100 (Mad), per Venkatadri J.
24 Kishan Singh v Exec. Engr., Haryana SAM Board, AIR 2010 SC (supp) 787, per AK Patnaik J.
25 State of Maharashtra v Dattatreya D Birajdar AIR 2007 SC 3056 [LNIND 2007 SC 1008]: (2007) 12 SCC 172 [LNIND 2007 SC
1008], per Pasayat J.
26 State of Orissa v Bilash Chandra Ojha, AIR 2009 SC (supp) 2179, per Pasayat J.
27 SR Tewari v Distt Board, Agra (1964) 1 LLJ 1 [LNIND 1963 SC 110], 4 (SC), per Shah J.
28 Hindustan Tin Works Pvt Ltd v Employees (1978) 2 LLJ 474 [LNIND 1978 SC 227], 477 (SC), per Desai J.
29 Western India Automobile Assn v IT (1949) 1 LLJ 245, 256 (FC), per Mahajan J.
30 Vinayak Bhagwan Shetye v Kismet Pvt Ltd (1984) 1 LLJ 203, 206 (Bom) (DB), per Chandurkar J.
31 Sanotsh D. Nadkarni v New India Industries Ltd (1988) 2 LLJ 392 [LNIND 1988 BOM 109], 396 (Bom) (DB), per Sawant J.
32 Western India Automobile Assn v IT (1949) 1 LLJ 245, 256 (FC), per Mahajan J.
33 Surendra Kumar Verma v CGIT (1981) 1 LLJ 386 [LNIND 1980 SC 403] (SC), per Chinnappa Reddy J.
34 Andhra Scientific Co v LC 1971 Lab IC 513, 515 (AP) (DB), per Obul Reddy J.
35 Western India Authomobile Assn v IT (1949) LLJ 245, 256 (FC), per Mahajan J.
36 Hindustan Zinc Ltd v Jialal Kapur 1987 Lab IC 942 (Raj), per MC Jain J.
37 Andhra Scientific Co v LC 1971 Lab IC 513,515 (AP) (DB), per Obul Reddy J.
38 Hukumchand Jute Mills Ltd v LAT (1959) 1 LLJ 595 (Cal), per Sinha J.
39 G Rajendra v Vikrant Tyres Ltd (2002) 4 LLN 57 (SC).
40 Andhra Pradesh SRTC v P Nageswara Rao (2002) 2 LLN 73 (AP) (DB), per Sinha CJ.
41 Punjab Beverages Pvt Ltd v Suresh Chand (1978) 2 LLJ I (SC), per Bhagwati J.

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42 Hindustan Steels Ltd v AK Roy (1970) 1 LLJ 228 [LNIND 1969 SC 497], 232 (SC), per Shelat J.
43 Punjab National Bank Ltd v Workmen (1959) 2 LLJ 676, 682 (SC), per Gajendragadkar J.
44 Ruby General Insurance Co Ltd v PP Chopra (1970) 1 LLJ 63 [LNIND 1969 SC 333], 66 (SC), per Shelat J.
45 Western India Plywoods Ltd v IT (1982) 2 LLJ 113, 119 (Ker), per UL Bhat J.
46 Buckingham & Carnatic Mills Ltd v Workmen (1951) 2 LLJ 314, 319 (LAT).
47 Delhi Cloth & Gen. Mills Co Ltd v SFK Union 1989 Lab IC 490, 494 (Raj) (DB), per Verma CJ.
48 Western India Automobile Assn v IT (1949) 1 LLJ 245, 256 (FC), per Mahajan J.
49 United Commercial Bank Ltd v UPBE Union (1952) 2 LLJ 577 [LNIND 1952 SC 47] (SC), per Chandrasekhara Iyer J.
50 Chopra Motors v Workmen (1957) 2 LLJ 162 (LAT).
51 Buckingham & Carnatic Mills Ltd v Workmen (1951) 2 LLJ 314 (LAT).
52 Steel Bros & Co Ltd v Workmen (1954) 1 LLJ 314, 318 (LAT).
53 Jitendra Singh Rathor v Shri Baidyanath AB Ltd 1984 Lab IC 554 [LNIND 1984 SC 78] (SC), per Ranganath Misra J.
54 Punjab National Bank Ltd v Workment (1959) 2 LLJ 666 [LNIND 1959 SC 166], 681-82 (SC), per Gajendragadkar J.
55 Assam Oil Co Ltd v Workmen (1960) 1 LLJ 587 [LNIND 1960 SC 108], 591 (SC), per Gajendragadkar J.
56 SSSambre v CRM, State Bank of India (1992) 1 LLJ 684, 690 (Bom) (DB), per Deshpande J.
57 Surendra Kumar Verma v CGIT (1981) 1 LLJ 386 [LNIND 1980 SC 403], 389 (SC), per Chinnappa Reddy J.
58 OP Bhandari v Indian Tourism Dev. Corpn Ltd 1987 Lab IC 25, 28 (SC), per Thakkar J.
59 MK Agarwal v Gurgaon Gramin Bank 1988 Lab IC 380 (SC), per Venkatachaliah J.
60 Assam Oil Co Ltd v Workmen (1960) 1 LLJ 587 [LNIND 1960 SC 108], 591 (SC), per Gajendragadkar J.
61 Surendra Kumar Verma v CGIT (1981) 1 LLJ 386 [LNIND 1980 SC 403], 389 (SC), per Chinnappa Reddy J.
62 SK Burman (Dr), Dabur Pvt Ltd vSTATE of West Bengal 1978 Lab IC 1581 (Cal) (DB), per Anil K Sen J.
63 Surendra Kumar Verma v CGIT (1981) 1 LLJ 386 [LNIND 1980 SC 403], 392 (SC), per Chinnappa Reddy J.
64 Hindustan Apparel Industries v GR Sapre, PO, LC (1984) 2 LLJ 321 (SC).
65 Mgmt of Panitole Tea Estate v Workmen (1971) 1 LLJ 233 [LNIND 1971 SC 132] (SC), per Dua J.
66 Workmen of Sahni Industries v BD Gupta 1984 Lab IC (NOC) 70 (Del), per Yogeshwar Dayal J.
67 Ruby General Insurance Co Ltd v PP Chopra (1970) 1 LLJ 63 [LNIND 1969 SC 333], 66 (SC), per Shelat J.
68 Samnuggur Jute Factory Ltd v Workmen (1964) 1 LLJ 634 [LNIND 1963 SC 247], 637 (SC), per Gajendragadkar J.
69 Municipal Corpn of Ahmedabad v H. Chandmiya 1987 Lab IC 1564 [LNIND 1986 GUJ 40],1566 (Guj) (DB), per Ahmadi J.
70 Jaslok Hospital and Research Centre v BV Chavan 1983 Lab IC 1100 (Bom), per Pendse J.
71 Krishna Murari Lal Kapur v PO, Addl LC [1976] 33 FJR 76 (Del), per HL Anand J.
72 Mgmt of Metal Box of India Ltd v PO , Addl LC CA No 18 (NL) of 1983 (30-10-1983) (SC).
73 Tulsidas Paul v Second LC (1971) 1 LLJ 526, 529 (SC), per Shelat J.
74 Mgmt. of ITC Ltd Monghyr v PO, LC 1978 Lab IC 1256 [LNIND 1978 SC 170],4, 1263 (SC), per Untwalia J.
75 Mgmt. of Panitole Tea Estate v Workmen (1971) 1 LLJ 233 [LNIND 1971 SC 132], 238-39 (SC), per Dua J.
76 Puttaswamy N v Hindustan Machine Tools Ltd (1999) 2 LLJ 431 (Kant) (DB) per Sethi CJ.
77 Hukumchand Jute Mills Ltd v LAT (1959) 1 LLJ 595, 599 (Cal), per Sinha J.
78 Assam Oil Co v Workmen (1960) 1 LLJ 587 [LNIND 1960 SC 108] (SC), per Gajendragadkar J.
79 Mgmt of Panitole Tea Estate v Workmen (1971) 1 LLJ 223, 238-39 (SC), per Dua J.
80 Hindustan Steels Ltd v AK Roy (1970) 1 LLJ 228 [LNIND 1969 SC 497], 232-33 (SC), per Shelat J.
81 Hindustan Steels Ltd v AK Roy (1970) 1 LLJ 228 [LNIND 1969 SC 497], 233 (SC), per Shelat J.
82 Sunit Kumar Roy v Union of India 1977 Lab IC 794, 798 (Pat) (DB), per Choudhuri J.
83 Rallis India Ltd v K Natarajan (1977) 1 LLJ 33, 35 (Kant), per Jagannatha Sherry J.

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84 Hindustan Steels Ltd v AK Roy (1970) 1 LLJ 228 [LNIND 1969 SC 497], 236 (SC), per Shelat J.
85 Mgmt. of AVP (C) Ltd v Secretary, AVPE Union 1982 Lab IC 261 -62 (Ker), per Bhaskaran J.
86 Assam Oil Co Ltd v Workmen (1960) 1 LLJ 587 [LNIND 1960 SC 108] (SC), per Gajendragadkar J.
87 Workmen of CGSM v Charottar GSM Ltd CA No 382 of 1966 (SC), per Bhargava J.
88 Doomur Dullung Tea Estate v Workmen CA No 516 of 1966 (SC), per Vaidialingam J.
89 Ruby General Insurance Co Ltd v PP Chopra (1970) 1 LLJ 63 [LNIND 1969 SC 333], 66 (SC), per Shelat, J.
90 Hindustan Steels Ltd v AK Roy (1970) 1 LLJ 228 [LNIND 1969 SC 497], 234 (SC), per Shelat J.
91 Francis Klein & Co Pvt Ltd v Workmen (1971) 2 LLJ 615 [LNIND 1971 SC 480] (SC), per Jaganmohan Reddy J.
92 Mgmt of ITC Ltd v PO, LC 1978 Lab IC 1256 [LNIND 1978 SC 170], 1263 (SC), per Untwalia J.
93 Orissa Mining Corpn Ltd v OMCE Union (1974) 1 LLJ 60, 64 (Ori) (DB), per RN Misra J.
94 Tulsidas Paul v Second LC (1971) 1 LLJ 526 (SC), per Shelat J.
95 Mgmt of Panitole Tea Estate v Workmen (1971) 1 LLJ 233 [LNIND 1971 SC 132] (SC), per Dua J.
96 Workmen of Assam Match Co Ltd v LC (1973) 2 LLJ 279, 282 (SC), per Gajendragadkar CJI.
97 Gujarat State Road Transport Corpn v NM Desai 1985 Lab IC 1358 (Guj) (DB), per Bhat J.
98 Manoj H Mishra v Union of India AIR 2013 SC 2809 [LNIND 2013 SC 1124]: 2013 Lab IC 2906 : 2013 (5) SCALE 618 [LNIND
2013 SC 1124] : (2013) 6 SCC 313 [LNIND 2013 SC 1124], per SS Nijjar J.

End of Document

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER IV Procedure, Powers and Duties of Authorities

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER IV Procedure, Powers and Duties of Authorities

[S. 11A. Power of Labour Courts, Tribunals and National Tribunals to give
Appropriate Relief in case of Discharge or Dismissal of Workmen.(

Loss of Confidence:

One of the important factors militating against the reinstatement which a good bit of decisional grist has accumulated, is
the ‘loss of confidence’ in the workman by the employer. The plea of the employer of his ‘loss of confidence’, particularly,
where holding a position of trust and confidence, the concerned employees misused that position rendering it insecure and
undesirable to retain him in service, despite his discharge or dismissal having been held to be invalid, will militate against
the award of reinstatement as it is not a light matter to force an employee upon an unwilling employer in such a case.1
Though the employer’s plea that he has lost confidence in the dismissed employee cannot ordinarily be exaggerated, yet in
the special circumstances of a case, it may not be fair to the employer or to the employee to direct reinstatement.2
Likewise, in PP Chopra, the court accepted the employer’s plea of loss of confidence in the workman who was a
stenographer and was in a position of confidence and trust as he was taking down dictation and typing out all kinds of
matters and even secret matters and particularly when he had, in fact, surreptitiously retained with him the copies of some
communications. As the employer could legitimately entertain the feeling, that, if reinstated, he would again retain with
him copies of documents of a confidential nature whenever he felt that such retention would be of use or advantageous to
him. In these circumstances, the feeling on the part of the employer that he could no longer trust the workman for any
confidential matter, could not be regarded as unjustified as it was not unlikely that, in future, the workman might collect
evidence of even more dangerous and harmful nature. Obviously, if the employer could not repose confidence in the
workman if reinstated, he could not make any use of his service as a stenographer.3

AK Roy, is another case where the plea of the employer of loss of confidence in the workman prevailed with the Supreme
Court in view of the recommendations of the senior security officer, based on the verification report from the police, that it
would not be desirable to retain him in service, particularly when the workman was employed in a blast furnace-a crucial
part of the work-with respect to which the employer could not hazard any risk. It was, therefore, not possible to retain the
workman in service on the ground of security and consequently the employer could not place confidence in him any
longer. The court observed that if the management truly felt that it was not possible to retain the workman in the
company’s service on the ground of security, the case would be one of those exceptions where the general rule of
reinstatement could not be applied properly.4 In Francis Klein, the court held the direction of reinstatement of the
workman who held the post of a durban in the employer’s concern, and to allot him some other suitable job, to be
unjustified for the reason that the employer had lost confidence in him on account of his refusal to co-operate when a
colleague of his asked him for assistance to apprehend a thief. Since the job of the workman involved security of valuable
property, both of manufactured goods and other assets, which required to be guarded, the plea of the employer of loss of
confidence was held to be justified and the order of reinstatement was replaced with an order of compensation in lieu of
reinstatement. Speaking for the Court, Jaganmohan Reddy J, observed:

.. . when an employer loses confidence in his employee particularly in respect of a person who is discharging an office of trust and
confidence, there can be no justification for directing his reinstatement.5
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In Sudder Office, in view of the fact that the workman was holding a very responsible post where integrity and honesty
were quite essential, the termination of his service on the ground of loss of confidence was held to be justified.6 But in
Binny, though the tribunal had upheld the validity of the domestic inquiry holding the workman guilty of an aggravated act
of misconduct, it ordered his reinstatement. In appeal, dealing with the plea of loss of confidence, the Supreme Court
observed:

It has become almost a settled principle that reinstatement should not be awarded where the management justifiably alleges that
they have ceased to have confidence in the dismissed employee. In other cases, the tribunal must consider carefully the
circumstances of the case to come to the finding that justice and fair play require that reinstatement should be awarded.7

In Binny, the workman had taken leave on the false pretext of going to his village for settling a land dispute whereas
actually, during that period, he participated in a hunger-strike in front of the Government secretariat as a member of a trade
union. The employer company, therefore, cancelled his leave and directed him to resume duty forthwith. On his failure to
comply with that direction, the company terminated his services under the relevant Standing Order for ‘absenting himself
without leave for eight consecutive working days’. The labour court set aside the order of termination and directed his
reinstatement, with backwages as it took the view that the employer company had no right to revoke the leave already
granted to the workman, but in appeal, by special leave, the Supreme Court held that neither reinstatement nor backwages
could have been awarded as the employer had lost confidence in the workman on account of his having obtained leave on a
false pretext.8 In MK Chhatre, the labout court had awarded reinstatement of the workman after holding that none of the
charges against him were proved. However, in appeal, the Supreme Court observed that reinstatement would not be
justified in view of the facts relating to one of the charges levelled against him. Accordingly, the award of reinstatement
was substituted by a suitable compensation.9 In L Michael, the workman, who was employed as a receipt and despatch
clerk in the office of the employer company, was discharged from service and his discharge was sought to be sustained as
discharge simpliciter on the ground of loss of confidence in view of his having misused his position by passing on ‘very
important and secret information about the affairs of the company to certain outsiders’. The labour court held the discharge
of the workman from service was justified for the reason of ‘loss of confidence’ by the employer in him but in appeal by
special leave, the Supreme Court held that the labour court in sustaining the order of discharge on the ground of loss of
confidence had misread the material evidence, and therefore, itself went into the evidence and found that the plea of loss of
confidence was not made out by the employer. In the circumstances, the Supreme Court itself ordered the reinstatement of
the workman but an objective perusal of the case discernible from the paper book of the appeal does not warrant this
approach and conclusion of the court. Even as a question of law, the following observations are rather off the mark and
would require elucidation:

Loss of confidence is no new armour for the management; otherwise security of tenure, ensured by the new industrial jurisdiction
and authenticated by a catena of cases of this court, can be subverted by this neo formula. Loss of confidence in the law will be the
consequence of the loss of confidence doctrine. In the light of what we have indicated, it is clear that loss of confidence is often a
subjective feeling or individual reaction to an objective set of facts and motivations. The court is concerned with the latter and not
with the former, although circumstances may exist which justify a genuine exercise of the power of simple termination. In a
reasonable case of a confidential or responsible post being misused or a sensitive or strategic position being abused, it may be a
high risk to keep the employee, once suspicion has started and a disciplinary inquiry cannot be forced on the matter. There, a
termination simpliciter may be bona fide, not colourable, and loss of confidence may be evidentiary of good faith of the employer.
10

However, the plea of ‘loss of confidence’ by the employer cannot be accepted as a matter of routine. It does not mean that
in every case, where the employer says that since he terminated the service of the workman for loss of confidence in him,
reinstatement should not be awarded, should be accepted. Loss of confidence cannot merely be subjective based upon the
statement of the mind of the management. Objective facts, which would induce a reasonable apprehension in the mind of
the management regarding the trustworthiness of the employee must be alleged and proved. Otherwise, the right of
reinstatement to which an employee is ordinarily entitled to, on a finding that he is not guilty of any misconduct, will be
irretrievably lost to the employee.11 The tribunal has to carefully examine all the circumstances of the case before coming
to the conclusion that the apprehensions of the employer are genuine and he truly feels that it would be hazardous or
prejudicial to the interests of the industry to retain the workman in his service on the ground of security or discipline before
deciding that instead of reinstatement, compensation would meet the ends of justice.12 The mere fact that the relations
between the employer and the concerned workman were not cordial or were strained, would not by itself establish the case
of loss of confidence and defeat the relief of reinstatement.13

The plea of loss of confidence must have some rational relation to the fact that the employee had misused his position of

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trust and rendered it undesirable to retain him in service. Loss of confidence in the intergrity of an employee should be
substantiated by cogent evidence before the industrial adjudicator. If a workman is entitled, as a general rule, to be
reinstated after his wrongful dismissal is set aside and on the facts it is not possible to find cogent material on which the
establishment can generally be considered to have ‘lost confidence’ in the integrity of the workman, he is entitled to be
reinstated.14 In other words the plea of loss of confidence has to be substantiated specifically by the employer by pleading
and proving it before the tribunal by adducing the relevant evidence. The plea of loss of confidence is only to be
entertained if it is founded on material facts and particulars specifically pleaded and proved. The material facts and
particulars in this regard will, inter alia, include the rule of confidence in the business of the employer, nature of the job
performed by the workman and the specification of the confidentiality involved therein.15 The failure of the employer to do
so will disentitle him to impugn the order of reinstatement. In a case, where the employer states that he has lost confidence
in the employee, the matter has to be weighed properly. The mere assertion of the employer that he has lost confidence
cannot compel the tribunal to refrain from passing an order of reinstatement. The tribunal will have to consider whether the
employer genuinely feels that it is risky to retain an employee in future or that it is hazardous or prejudicial to the interest
of the industry to do so or it is a mere allegation made to send the employee our of employment.16Mere surmises or
suspicion are no proof of the commission of the act justifying loss of confidence.17 In Panitole Tea Estate, the Supreme
Court observed that this aspect requires determination on facts which should be properly placed before the tribunal and a
finding secured after appropriate trial. In other words, the employer must plead and prove before the tribunal all the facts
relevant to the plea of loss of confidence and obtain a finding on that from it.18 The first and foremost requirement to be
proved is that the workman, in fact, held a place of trust and confidence and while holding such a position, he did
something to forefeit the confidence of the employer and to continue him further in the service would be embarrassing and
inconvenient to the employer or would be deterimental to the interest of discipline or security in the establishment.19 In
Cox & Kings, the court repelled the contention, that since the employer had lost confidence in the concerned workman,
compensation without reinstatement would have been adequate relief, because there was no factual basis for the belated
contention.20

In MK Chhatre (supra), in spite of the fact that the plea of loss of confidence was not even raised before the labour court,
the Supreme Court substituted the order of reinstatement by an order of compensation in lieu of reinstatement, in view of
the facts relating to one of the charges. The plea of loss of confidence before the Supreme Court related to a charge which
had not been proved before the labout court. If the charge had not been proved, as held by the Supreme Court itself, the
question of loss of confidence on account of the facts relating to that charge could not arise. In PP Chopra (supra), the plea
of loss of confidence was not raised before the tribunal but this plea was raised for the first time before the Supreme Court
in support of the contention that the tribunal ought not to have directed the workman’s reinstatement. The court accepted
the plea in view of the fact that the workman being a stenographer in the establishment was in a position of confidence and
trust. Since he abused that position by surreptitiously retaining the copies of certain correspondence, the management
could not repose confidence in him, and if reinstated, they would not be able to make use of his services as a stenographer.
In the circumstances, the court held that the tribunal ought not to have directed reinstatement but ought to have awarded
suitable compensation instead. In Anil Kumar Chakraborty, where the workman held the position of trust and confidence
as a compounder, in which capacity he was entrusted with drugs and medicines for being supplied and distributed to the
needy and ailing workers, free of cost, but by abusing his position of trust, he indulged in trafficking in those drugs and
medicines to the deteriment of the health and well-being of the workers.21 A single judge of the AP High Court, in South
Central Rly ECC Society, has deduced the following principles of a plea of loss of confidence:

(i) in order to arrive at a conclusion whether the employer has lost confidence in the employee, there cannot be any strait-
jacket principles as each case has to be assessed on its peculiar facts and circumstances;
(ii) the derelict observance of any act by the employee giving rise to the complaint of losing confidence in him must be a
deliberate one; an innocuous and inadvertent act which causes detriment will not be a circumstance for losing
confidence in the employee;

(iii) the normal rule is that in cases of invalid orders of dismissal, the direction is for reinstatement of the dismissed employee
and the exception is expedience, where, say the employee held a position of confidence and trust and the employer lost
confidence, reinstatement will not be fair. 22

In M Arunagiri, the employer lost confidence in the workman on account of his habitual frequent absence, irregular
attendance and absence of sincerity. The Madras High Court held that the order of reinstatement would not be proper and
only compensation should be awarded.23 In D Seeralan, another Division Bench of that High Court set aside the award of
the labour court and held that the termination of service of the employee for loss of confidence was invalid for non-
compliance with the relevant Standing Orders inflicting the disciplinary punishment, but in view of the fact that the
termination of service was not mala fide, the court awarded compensation in lieu of reinstatement.24 In Kanhaiyalal
Agrawal, the Supreme Court held that in a case of termination for loss of confidence, proof based on objective facts was

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necessary. Where the employees were charged for making payments for sugarcane not actually brought into mills, the
evidence shows that the workmen did not follow the prescribed procedure and were negligent, but there was no evidence to
show that the workmen had misappropriated the money, and hence a conclusion of loss of confidence could not be
drawn.25 In NC Nalwaya, the facts were: an unknown person visited the bank claiming to be the account holder of a
dormant account, and the bank employee disclosed the amount lying in the credit of the account holder without verifying
the identity of the person, resulting in the said stranger withdrawing Rs. 6000/- from the account. The employee was
charge-sheeted and eventually dismissed. In the meantime, the criminal court acquitted him in respect of the same case on
the ground that the charges were not proved beyond reasonable doubt. The Appellate authority dismissed the appeal filed
by the employee on ground of delay. The High Court observed that the delay in approaching appellate authority was
genuine in the light of the pendency of criminal proceedings and that, the question of loss of confidence would not arise.
On this view of the matter, the Court set aside the dismissal. Quashing the order of the High Court and converting the
dismissal into compulsory retirement in the special circumstances of the case, Raveendran J (for himself and AK Patnaik
J), held:

It is now well settled that the courts will not act as an appellate court and re-assess the evidence led in the domestic enquiry, nor
interfere on the ground that another view is possible on the material on record. If the enquiry has been fairly and properly held and
the findings are based on evidence, the question of adequacy of the evidence or the reliable nature of the evidence will not be
grounds for interfering with the findings in departmental enquiries. Therefore, courts will not interfere with findings of fact
recorded in departmental enquiries, except where such findings are based on no evidence or where they are clearly perverse. The
test to find out perversity is to see whether a tribunal acting reasonably could have arrived at such conclusion or finding, on the
material on record.Courts will, however, interfere with the findings in disciplinary matters, if principles of natural justice or
statutory regulations have been violated or if the order is found to be arbitrary, capricious, mala fide or based on extraneous
considerations.26

Delay and Employment of New Persons:

Another circumstance, which is relevant in deciding the question, whether departure from the normal rule of reinstatement
should be made or not, is long delay. Delay can be of two types, namely,

(1) delay between the occasion for the industrial dispute and the agitation or complaint by labour which leads to the
reference; and
(2) delay from the time of reference to the date of final order of reinstatement.

As far as the delay of the second type is concerned, ie, the time that lapses subsequent to the reference of an industrial
dispute would be quite irrelevant in consideration of the relief but the delay of the first type, ie, the time between-the
occasion for the dispute and the agitation or complaint by labour which leads to the reference might be a relevant
circumstance in shaping the relief. Everything will depend on the period of delay, the facts which occasioned the delay,
and the degree of negligence with which the organised labour could be rightly taxed.27 Even the delay of the first type,
though relevant, is not always per se adequate ground for declining the relief of reinstatement, particularly where the
dismissal or termination of service is illegal or amounts to an ‘unfair trade practice’.28 In Shalimar Works, a large number
of workmen were discharged in April 1948. Two references with respect to the reinstatement of 250 workmen were made.
A list of 250 workmen was sent to the tribunal when practically the whole of the adjudicatory proceedings were over and
the tribunal was to consider the question of reinstatement. The tribunal ordered the employer to reinstate 250 workmen
with the direction that it should give notice to the discharged workmen to ask for employment. In appeal, the labour
appellate tribunal awarded reinstatement of 15 workmen, who did not withdraw their provident fund. The Supreme Court
held that even the 15 workmen should not have been ordered to be reinstated by the labour appellate tribunal as there was
no reason for ordering the reinstatement of anyone on such vague references after such an unreasonable length of time. The
court observed that even though there is no limitation prescribed for reference of disputes to an industrial tribunal, it is
only reasonable that disputes should be referred as soon as possible after they have arisen and after conciliation
proceedings have failed, particularly so, when the dispute relates to discharge of a large number of workmen.29 In Punjab
National Bank, the court affirmed the order of reinstatement made by the tribunal and rejected the plea of the employer that
the labour appellate tribunal had not taken into consideration the fact that a long time had elapsed between the date of
dismissal and the award and in the meanwhile it had employed additional hands and the reinstatement would be unfair as it
would cause hardship to the employer but in the absence of the relevant facts, as to how many employees had been
appointed and on what terms, which were within the special knowledge of the employer, the court found it difficult to deal
with the plea on merits. The court said that since the bank had failed to establish its specific case against any of the
employees, there was no reason why the normal rule of reinstatement should not prevail and the employees should not get

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the relief of reinstatement. The mere fact that the bank might have employed some other persons in the meanwhile, would
not necessarily defeat such a claim for reinstatement. Gajendragadkar J, of the Supreme Court observed:

...however much the court may sympathise with the employer’s difficulty caused by the fact that after the wrongful dismissal in
question, he had engaged fresh hands, the court cannot overlook the claims of the employees who, on the findings of the tribunals
below, had been wrongfully dismissed. In the case of such wrongful dismissal, the normal rule would be that the employees thus
wrongfully dismissed must be reinstated.30

The further plea of the employer that a large number of workmen clamouring for reinstatement had already secured
employment elsewhere on permanent basis and so, it was unnecessary to force them on the bank, was also discountenanced
for want of relevant material as it had not been raised before the labour appellate tribunal. In Swadesamitran, the court
further observed that once it has been found that the termination of service of a workman is unjustified and improper, it is
for the tribunal to consider as to what relief the workman is entitled to. The fact that the protracted litigation in regard to
the dispute has inevitably meant delay and in the meanwhile the employer has engaged other workmen, would not
necessarily defeat the claim of the workman for reinstatement.31 In Bombay Steel Rolling, under the terms of a settlement,
the employer had agreed to take back in service, certain workmen on their acquittal in criminal proceedings. Some of the
workmen were acquitted in the criminal proceedings but they did not report for work nor did they ask for reinstatement
within a reasonable time on their acquittal. They applied for being taken back after a long time, which the employer
refused. The tribunal directed their reinstatement. The Supreme Court itself considered the evidence and held that the
concerned workmen had, in fact, not reported for work within a reasonable time after their acquittal and observed that it
would be neither fair nor reasonable to ask the management to comply with the demand for reinstatement made months
and months after such acquittal, particularly, when during this long period, the employer had naturally employed new
hands and in the special circumstances of the case that fact could not altogether be ignored.32 In Binny, the court rejected
the plea of the employer that reinstatement should not be ordered four years after the dismissal of the employee as the
management had already made other arrangements for the work which was formerly being done by the dismissed
workman. The court distinguished its earlier decision in Shalimar Works on the ground that in that case there were a very
large number of workmen, who were to be reinstated while in this case only one workman had to be reinstated and there
would be no serious dislocation of work by the order of reinstatement of one workman. Speaking for the Supreme Court,
Mitter J held:

Normally it will be months before an order of reference is made by the government and one or two years elapsed in almost all
cases before the adjudication by an industrial tribunal is complete. If mere lapse of time be enough to lead the industrial tribunal to
hold that there should be no reinstatement of service, the power of reinstatement will become obsolete. In any case, the
management must try to show that reinstatement will cause dislocation of work and the tribunal must take that into consideration.
In this case, we find no such compelling circumstances.33

An employer who claims a departure from the normal rule must satisfy the adjudicator that the employee is disentitled to
the relief by producing before him necessary evidence. If he fails to raise necessary points for decision, he cannot be
permitted to make a grievance against the relief of reinstatement.34

Accepting Notice and Wages:

Considering the unequal position between an employer and a needy employee, the acceptance of notice-wages and wages
due up to the date of dismissal cannot be a bar to relief or reinstatement of compensation in lieu of reinstatement, unless it
is proved that the acceptance was voluntary and made with full knowledge of its consequences upon the dispute.35 It would
be wrong to draw the inference from the mere fact of receipt of wages for the notice period that the workman voluntarily
gave up his service and was estopped from claiming reinstatement.36 The receipt granted by the employee in such a case
for the notice-wages received does not bar his claim to the relief of reinstatement, if an industrial dispute is raised over his
dismissal.37 In industrial adjudication, technical pleas of estoppel and waiver are generally not entertained. Estoppel is a
rule of evidence and it may have the effect of creating substantive rights as against the person estopped. Besides, the
ingredients of estoppel have to be factually and legally satisfied before the principles of estoppel can be pressed into
service. Acquiescence denotes conduct which is evidence of an intention by a party to abandon a right legitimately due to
him. It may also denote a conduct from which the opposite party could be justified in inferring such an intention.
Acquiescence is only a form of estoppel, and it is of the essence of acquiescence that the party acquiescing should be
aware of, and by words or conduct should represent that he assents to what is a violation of his rights and the other party
should have been deluded by the representation into thinking that this wrongful action was assented to by the first party.
The question of estoppel or acquiescence is essentially a question of fact, which has to be decided on proper materials
before the court. Once facts are established, acquiescence is a matter of legal inference. Waiver is an intentional

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relinquishment of a known right. There could be no waiver unless the person against whom waiver is claimed had full
knowledge of his rights and all facts enabling him to take effectual action for the enforcement of such rights.38 Waiver is
contractual and would constitute an agreement to release or not to assert a right. The pleas of acquiescence or waiver have
to be specifically taken by the opposite party and there should be an issue on that point. They cannot be a matter of bare
presumptions and assumptions. They are questions of fact which have got to be pleaded and proved by adducing relevant
evidence. The burden of proof of the ingredients of acquiescence or waiver is on the person who relies on the same.39 In
Palaniswami, the labour court granted the relief of compensation in lieu of reinstatement on refusal of the management to
reinstate the workmen and the workmen accepted the awarded amount under protest expressly stating that this was without
prejudice to challenge the award in a writ petition. The Madras High Court held that the workman was not disentitled to
claim the relief of reinstatement in the writ petition as the doctrine of ‘approbation and reapprobation’ would not apply;
nor would the doctrine of’accord and satisfaction’ apply to a case of industrial adjudication.40

In Seema Ghosh, the facts were: the workman was taken in service in 1947; the workman was examined by the Medical
Board and his age was assessed; in 1960 a service card was issued by the Management wherein the age of the workman
was recorded as 24 years and the same was duly accepted by the workman by putting his signature; only in 1972, for the
first time, the workman produced a transfer certificate issued from the school and disputed his age; the said transfer
certificate was sent to the District Education Officer who informed the Management that the transfer certificate was not
genuine; it is also not disputed that after the age rectification committee took a decision the workman was examined by a
specially constituted Medical Board in 1984 and his age was assessed as 13-9-1926; the service record was again corrected
and it was made in 1926. In this way, the service of the workman was increased by two years; the workman accepted the
age assessed by the Medical Board in 1984 and according to the age so assessed by the Medical Board workman the same
was increased by two years. In 1986, the workman was given one year’s extension in service and he accepted the said
extension without raising any objection and retired on 13 Septermber 1987. After his superannuation the workman raised
the industrial dispute regarding actual date of superannuation. The Labour Court passed the award holding that the
workman is entitled to full back wages including admissible allowances and other benefits for the period from 13
September 1987 i.e... his date of illegal superannuation to 11 August 1990 i.e... the actual date of retirement. Quashing the
appeal filed by the workman, Lakshmanan J (for Himself and Chattejee J) of the Supreme Court held:

.. . The workman did not challenge the opinion of the Medical Board constituted by the Management for determining the age of the
workman and permitted the workman to work till his attaining the age of retirement. Therefore, the workman in the present case is
estopped from challenging the correctness of the opinion of the Medical Board after his retirement.. .. The workman was to
superannuate in the year 1986 but on the basis of the assessment of age made by the Apex Medical Board, he was allowed to
continue till 13.09.1987. At that stage, the workman did not challenge the decision of the Medical Board. It is only after enjoying
the benefits given to the workman and after availing the benefits, the workman raised a dispute after his retirement in pursuance of
which the Labour Court has passed the Award.. .. the findings arrived at by the Labour Court is nothing but perverse against the
facts and passed the award in favour of the workman on totally misplaced sympathy. In our opinion, both the learned Single Judge
and of the Division Bench are right and within their jurisdiction in re-assessing and re-valuing the weight of the evidence in the
case recorded by the Labour Court by which the High Court came to the conclusion that the workman was not entitled to any
relief.. . .41 (para 31) (Italics supplied)

Discrimination:

Where an employer dismisses a number of workmen on finding them guilty of an act of misconduct but subsequently takes
some of them back in service while leaving others out, it would be open to those workmen who have not been taken back,
to claim reinstatement on the ground of discrimination but whether such an act is an act of discrimination or not, would be
a question of fact depending upon the facts and circumstances of each case. If the employer while taking some workmen
back has left others out for their trade union activities or other ulterior purpose, this may be an act of unfair labour practice
of victimisation and would tantamount to unwarranted discrimination. The aggrieved workmen would, therefore have a
valid ground for reinstatement. But if on the other hand, the employer has not been able to take in service all the workmen
and left some of them out for genuine, valid and justifiable reasons, his action would not be assailable. In Lakshmiratan
Cotton, the employer had to reinstate 31 workmen out of 53 workmen who were dismissed as decided by the Chief
Minister. It was agreed by way of a settlement, that the said decision would be binding on both the sides. It was held that it
could not be a ground for reinstatement of the remaining workmen with respect to whom the reference of an industrial
dispute was made for adjudication.42

Nature of Employment:

In Sundaramoney, the workman was employed as a cashier off and on with an intermittent break. His appointment used to
be treated purely as a temporary one for a period of nine days at a time which could be terminated without assigning any

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reason thereof at the employer’s discretion but this nine days employment tacked on, had ripened to a continuous service
for a year under s 25B(2) of the Act. The termination of the services of the workman after the expiry of his last term was
held to be retrenchment within the meaning of s 2(oo). Accordingly, the Supreme Court directed his reinstatement with
continuity of service though, on the facts and in the circumstances of the case did not award backwage. Thus, irrespective
of the device adopted by the employer to keep the employee permanently in temporary employment, the relief of
reinstatement was considered to be the logical conclusion of its decision to set aside the termination of the services of the
workman.43 A single judge of the Madras High Court in Crompton Engg, held that where employment of a particular
individual is for a specific period or for specific work, the employment automatically comes to an end on the expiry of
such period or after the work was over and consequently, there was no termination and there was no question of
reinstatement.44 In JS Khadgawat, the Rajasthan High Court held that acceptance of the payment of wages for termination
of service in terms of the contract of employment would neither constitute waiver nor estoppel.45 Waiver means
abandonment of right and it may be either express or implicit from the conduct but its basic requirement is that it must be
an intentional act with knowledge. Furthermore, there could be no waiver unless the person who is said to have waived is
fully informed of his right and with full knowledge of such right, he intentionally abandons it.46Estoppel as envisaged by s
115 of the Indian Evidence Act 1872 can arise only if a party to a proceeding has altered his position on the faith of a
representation or promise made by another.47 In the fact situation of some cases, the courts have held the order of
reinstatement to be justified,48 and in other cases, they have held the reinstatement to be unjustified,49 depending upon
various facts and circumstances of each case. Where the employee of a Land Development Bank did not raise the dispute
about her termination within a reasonable time and further averred in her application filed before the labour court to the
effect that she was gainfully employed in Haryana Urban Development Authority and that her service was in fact
regularised therein, allowing the appeal of the Bank, Sinha J (for himself and Hegde J), of the Supreme Court held:

It is trite that the courts and tribunals having plenary jurisdiction have discretionary power to grant an appropriate relief to the
parties. The aim and object of the Industrial Disputes Act may be to impart social justice to the workman but the same by itself
would not mean that irrespective of his conduct a workman would automatically be entitled to relief. The procedural laws like
estoppel, waiver and acquiescence are equally applicable to the industrial proceedings. A person in certain situation may even be
held to be bound by the doctrine of Acceptance Sub silentio. The Respondent herein did not raise any industrial dispute
questioning the termination of her services within a reasonable time. She even accepted an alternative employment and has been
continuing therein from 10-8-1988.. .. She, therefore, did not deny or dispute that she had been regularly employed or her services
had been regularized. She merely exercised her right to join the service of the Appellant.50

(b) Reinstatement with Backwages

Neither reinstatement nor payment of backwages as such is a common law right. These reliefs can, however, be granted by
the industrial tribunals in the course of industrial adjudication.51 Generally the question of backwages would not arise,
when the discharge or dismissal is not set aside and is upheld by industrial adjudication as proper and justified52 but the
question is accentuated when the adjudicator sets aside the discharge or dismissal and awards reinstatement. Normally,
backwages must follow reinstatement as reinstatement is a compendious concept but industrial adjudication has insisted
that backwages must be specifically awarded, to entitle a workman for the claim of backwages because quantum of
backwages is in the discretion of the adjudicator.53 The award of backwages has to be carried out by the employer in letter
and spirit. In Phanindra Chandra Roy, the industrial tribunal had ordered reinstatement of the workman with full
backwages and directed the payment of all his arrears within a month of the receipt of the award. The employer
corporation reinstated the workman after more than a year on his agreeing to accept only 40 percent of the backwages to
which he was entitled in terms of the award. A single judge of the Calcutta High Court set aside the order of the
corporation as unfair and untenable and strongly deprecated such action particularly by a public sector undertaking.54 The
question, whether in a case where reinstatement is found to be a proper relief, what should be the guiding considerations
for awarding full or partial backwages, crops up every time when the workman questions the validity and legality of
termination of his service howsoever brought about, to wit by dismissal, removal, discharge or retrenchment and the relief
of reinstatement is granted? As a corollary to this question, further question is as to, whether the workman should be
awarded full backwages or some sacrifice is expected of him?55 The effect of reinstatement is to restore an employee to his
former capacity, status and emolument, as if his services had never been terminated and the employee gets the benefit of
continuity of service. In the absence of cogent reasons to the contrary such compensation should normally be equal to the
full wages or remuneration which the employee would have received, had he continued in service but for the order of
termination of his service.56

The general rule in industrial adjudication is that when a workman is reinstated after a certain period of enforced idleness
or unemployment, then in the absence of cogent reasons, such reinstated workman should be entitled to full wages or
remuneration which he could have received had he continued in service.57 ‘Wages for the purpose of computing back
wages can only be those wages which are permissible in law’. For instance, when a workman is reinstated with backwages,

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he should be paid the same wages as he would have been getting if he had not been dismissed.58 In other words, ordinarily
when the services of a workman have been illegally terminated by retrenchment, discharge or dismissal, he will be entitled
to full backwages except to the extent he was gainfully employed during the enforced idleness.59 In Changunabai Palkar, a
female employee was dismissed without serving a charge-sheet or holding an inquiry for passive participation in an illegal
strike by the workers in the textile mill. Though the other workers who participated in the strike were allowed to join, the
workman in question who had an unblemished record of 40 years of service was not given the backwages for 14 months.
The Bombay High Court held that the claim for backwages had a legal foundation and denial thereof in the facts and
circumstances of the case was unwarranted and unjustified.60 The effect of reinstatement is that the workman is to be
restored to his previous position so far as his capacity, status and emoluments are concerned.61 The workman has to be
restored to his former position and status setting aside his discharge or dismissal from service as if he had never been
dismissed, and he gets the benefit of continuity of service.62In other words, relief of reinstatement would mean that the
employer has taken away, illegally the right of the workman to work, contrary to the relevant law or in breach of contract,
and simultaneously deprived him of his earnings. Hence, the employer cannot shirk his responsibility of paying the wages
which the workman has been deprived of by illegal or invalid action. If the workmen were always ready to work but they
were kept away therefrom on account of invalid act of the employer, there is no justification for not awarding them full
backwages which were legitimately due to them. Any other view would be a premium on the unwarranted litigative
activity of the employer.63 In such cases, full backwages are to be awarded to effectuate a twin purpose: firstly, that the
discharge or dismissal having been found illegal, the workman continues in service in spite of the order, and secondly, that
in such a case full backwages should be granted for the purpose of creating a climate in which workmen of the concern
may be free from fear of reprisals in participating in the legitimate trade union activities.64 However, there are exceptions
to this rule where the tribunal in its discretion may deny or reduce backwages. In Gujarat Steel Tubes, the Supreme Court
observed:

Certainly, the normal rule, on reinstatement, is full backwages since the order of termination is non est...Even so, the industrial
court may slice off a part if the workmen are not wholly blameless or the strike is illegal and unjustified. To what extent wages for
the long interregnum should be paid is, therefore, a variable dependent on a complex of circumstances’ but the discretion is to be
exercised only in extraordinary cases.65

For instance, the relief of full backwages may be denied where that would place an impossible burden on the employer.66
Similarly, if it is established by the employer that the management sustained a huge loss or a huge amount has to be paid to
a large number of workmen covering a long period and the management will be adversely affected thereby.67 The extent of
income, if any, earned by the workman elsewhere during the period of his enforced unemployment and the nature of the
efforts for the absence thereof, on his parr, to secure alternative gainful employment, will be the relevant factors to be
taken into account in denying or scaling down quantum of backwages. Once the relevant facts are brought on record, there
will be no defect in calculating the income, ifany, earned by the employee elsewhere.68 Likewise, if the workman is found
guilty of misconduct or lapse on his parr, it is within the discretion of the tribunal not to award wages for the period during
which he may have remained out of employment.69 In deciding the question, as to whether the employee should be
recompensed with full backwages and other benefits until the date of reinstatement, the tribunals and the courts have to be
realistic albeit me ordinary rule of full backwages on reinstatement.70 In the very nature of things, there cannot be a strait
jacket formula for awarding the relief of backwages. All relevant considerations will enter the verdict. More or less, it
would be a motion addressed to the discretion of the tribunal. Full backwages except to the extent the workman was
gainfully employed during the period of enforced idleness, would be the normal rule and the party objecting to it must
establish the circumstances necessitating the departure.71 For instance, in Zila Sahakari Bank, where the workman
remained almost unemployed till his reinstatement except for a few months, the award of full backwages from the date of
termination of the employment till the date of reinstatement was held to be valid and justified.72 Likewise, in SG Chemicals
and Dyes, in the circumstances of the case, the workmen whose services were terminated on the ground of illegal closure
were entitled to full wages. The court discountenanced the plea of the employer that they must have taken alternative
employment during the period between the date of closure of the undertaking and the hearing of the appeal before the
Supreme Court and an inquiry, therefore, should be directed into the amount received by them from such alternative
employer so as to set off the amount received by them, against full backwages and future salary payable to them.73
Inordinate delay in agitating the dispute regarding the reinstatement and backwages will have a serious bearing on the
question of backwages. For instance in Steel Authority of India, the labour court awarded reinstatement with backwages to
the workman who had raised the dispute after more than ten years, the Supreme Court observed that even if the order of
termination was void ab initio, there was no justification for waiting over a decade to challenge the order. The employer,
therefore, could not be asked to pay for the default of the workman in raising the dispute after a decade. Even if the order
of maximum punishment could be said to be harsh, there was no justification for the direction of payment of full wages.
The court, therefore substituted the order of full backwages with 25 per cent of the backwages.74

The question really is, as to from what date backwages should be paid? In Upper Ganges VES Co, the Supreme Court held

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that where the termination of service is found to be illegal, the date, on which such order is made which prevented the
employee from returning to his service, should be the starting point for awarding him wages. It would not be proper to say
that the date on which the order of termination of service was found to be illegal by the competent authority should be the
starting date for awarding wages. The declaration of illegality relates back to the date on which the order was made
because the termination brings about cessation in getting wages. In other words, if at the date on which the workman
stopped rendering service by an order which is found to be illegal, that must be the relevant date from which the
backwages must start subject to the general principle, that if that employee has thereafter served somewhere else, the
amount so earned by him should be adjusted.75 In dealing with different types of cases, the tribunal in each case has to see
that relief should be given in a particular case to a particular workman in the matter of compensation by balancing the
conflicting claims and the variations that exist in human conduct and the requirements of social justice.76 On the parity of
reasoning, the adjudicator has to counter-balance the claim of the employer that the workman was gainfully employed
elsewhere during the period of unemployment with him, with the claim of the workman that he was not employed
anywhere at all. The quantum of backwages is, therefore, a matter in the discretion of the tribunal dependent on the facts of
a case. The tribunal will exercise its discretion keeping in view all the relevant circumstances.77 The discretion has to be
exercised having regard to certain approved principles an procedures.78 A workman directed to be reinstated with
backwages would not be entitled to backwages for the period during which he was usefully employed elsewhere,79 because
he cannot be allowed to take double advantage and make excessive gains relying on the wrongful act of the employer.80 In
Hindustan Tin Works, the Supreme Court reiterated that ordinarily the workman whose service has been illegally
terminated would be entitled to full backwages except to the extent he was gainfully employed. If the workman was always
ready to work but he was kept away by invalid or illegal act on the part of the employer, there would be no justification for
not awarding him full backwages which were legitimately due to him. Speaking for the court, Desai J, observed:

In the very nature of thing there cannot be a strait-jacket formula for awarding relief of backwages. All relevant consideration will
enter the verdict. More or less, it would be a motion addressed to the discretion to the tribunal. Full backwages would be the
normal rule and the party objecting to it must establish the circumstances necessitating departure. At that stage the tribunal will
exercise its discretion keeping in view all the relevant considerations. But the discretion must be exercised in a judicial and
judicious manner.81

The court discountenanced the plea that the payment of huge amounts of backwages to the reinstated workman would
shake the financial viability of the company and the burden could be unbearable. However, keeping in view the facts and
circumstances of the case, the court considered it proper to scale down the backwages to 75 per cent payable in two equal
instalments. In A Phillips, a single judge of the Andhra Pradesh High Court emphasised that the burden of showing that the
normal rule should not be followed and the employee should be awarded full backwages is on the employer. Two factors
relevant for departure from the rule and full backwages on reinstatement were pointed out, namely, gainful employment of
the workman during the enforced idleness and the delay involved in raising the industrial dispute against the illegal
termination of service. The further consideration for exercising the discretion in favour of the full backwages were stated to
be harshness of punishment and the period during which the employee was kept out of employment due to no fault
attributable to him, the nature of charges levelled against him and the delay in raising the dispute. In the facts and
circumstances of this case, the backwages from the date of raising the dispute till the date of reinstatement were held to be
just and fair.82 In Surendra Kumar Verma, the court again recognised the discretion of the tribunal to deny the relief of full
backwages in cases where the industry might be closed down or might be in severe financial doldrums and the relief of full
backwages would place an impossible burden on the employer. In such and other exceptional cases, it is permissible for
the court to mould the relief.83 In GT Lad, in view of the fact that the period stretched over six years and further that the
backwages had to be computed, if ordered in full, on a much higher scale because of two settlements which had raised the
scale of wages substantially and the disputed fact that no specific case was put forward by the employer that the workman
concerned had been employed elsewhere during this period, the Supreme Court took a total view of the whole case and
directed the payment of 75 per cent of the wages for the entire period, ie, from the date of dismissal to the date of
reinstatement on the scales and revised scales which might be applicable to the workmen.84 In Gujarat Steel Tubes (supra),
the court ordered reinstatement of a number of workmen whose services had been terminated en bloc and granted
backwages ranging from 50 to 100 per cent to different categories of workmen.85 In Pannijee Sugar, the court quashed the
order of the labour court awarding full backwages to the workman as it had not taken into account the fact that the worker
was admittedly a seasonal worker and remanded the case to the labour court with the direction to consider the question as
to whether the worker is entitled to backwages for all the seasons which he had lost or for a particular season or for the
entire period and for quantification of the relief The labour court was further directed to take into consideration the
evidence, if any, that may be led by both the parties on the question whether the worker was gainfitlly employed elsewhere
during the time he was not working with the employer.86

In Abhinash Chandra Gautam, the amount earned by the workman in his employment as a teacher, during the period of his
unemployment after his discharge was deducted from the total amount of backwages.87 In SM Saiyad, the workman was

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dismissed from service in 1969 and he pursued his remedies in civil courts and then got his dispute referred for industrial
adjudication to a labour court. The labour court directed the reinstatement of the workman but declined to grant
backwages. The Gujarat High Court modified the award by granting backwages only for the period between the date of the
order of reference to the date of reinstatement by the labour court. The Supreme Court held that the fact that the workman
pursued his remedies in the civil court could not be held against him for denying the relief of backwages, and directed
payment of backwages as if he had continued in the service all along. However, with respect to the period of gainful
employment of the workman as an advocate, the court directed that in computing the backwages for the period of gainful
employment of the workman, an amount at the rate of Rs 150 per month should be deducted.88 In Jai Bhagwan, in view of
the fact that the workman had raised the dispute after a considerable delay without doing anything in the meanwhile to
question the termination of his services, the Supreme Court did not think it proper to award full backwages. In the
circumstances of the case, it awarded halfbackwages from the date of termination till the date of its judgment and
thereafter full backwages from the date of judgment until reinstatement.89 The Kerala High Court in Senior DPO, Southern
Rly, held that it is inconsequential that no relief in respect of backwages was either prayed for or granted by the tribunal in
its award ordering reinstatement. The workman still would be entitled to claim relief of backwages to which he is entitled
from the date of the wrongful termination of his service to the date of his reinstatement. He can claim the same in an
application under s 33C(2) and such claim would not be barred by the pleas of res judicata, discharge or limitationetc. The
correctness of this decision is not free from doubt. If in its discretion, the tribunal has not granted backwages, no
entitlement is created in the workman to make the claim of backwages.90 In Pannijee Sugar, the Supreme Court remanded
the case to the labour court with a direction to consider the question as to whether the worker was entitled to backwages
taking into consideration the evidence, if any, that may be led by both the parties on the question whether the worker was
gainfully employed elsewhere during the time he was not working with the employer.91 In P Venugopal, the court affirmed
the award of the labour court directing reinstatement of the employee with continuity of service and backwages on finding
dismissal of the workman invalid and unjustified.92 In SGChemical and Dyes, the court discountenanced the plea of the
employer to direct an inquiry as to whether the workmen had taken up any alternative employment during the intervening
period and had received any amount from such employment so as to set off the amount so received against the backwages
and future salary payable to them. Madon J held:

It is possible that rather than starve while awaiting the final decision on their complaint some of these workmen may have taken
alternative employment. The period which has elapsed is, however, too short for the moneys received by such workmen from the
alternative employment taken by them to aggregate to any sizeable amount, and it would be fair to let the workmen to retain such
amount by way of solatium for the shock of having their services terminated, the anxiety and agony caused thereby, and the
endeavours, perhaps often fruitless, to find alternative employment.93

In Central CSS Ltd, the employer had adopted a very cantankerous attitude towards the employee throughout the litigation
arising out of her illegal dismissal from service which was set aside by the assistant registrar, co-operative societies
ordering her reinstatement without backwages. The High Court of Himachal Pradesh ordered payment of backwages. The
Supreme Court deprecated the cantankerous attitude on the part of the employer resulting in pain and agony to the
employee for over a period of 20 long years. The court observed:

For such thoughtless acts of its officers, the petitioner-society has to suffer and pay an amount exceeding three lakhs is indeed
pitiable. But considering the agony and suffering of the opposite party that amount cannot be a proper recompense.. .. the
permission given shall have nothing to do with the directions to pay the respondent her backwages. Steps, ifany, to recover the
amount shall be taken only after the payment is made to the opposite party as directed by the High Court.94

In Mathura Electric Supply, in view of the fact that the year to year computation of backwages would be a long and tardy
exercise, the employer requested the court to award a reasonable compensation for backwages. In the circumstances of the
case, the court awarded a lump sum of rupees one lac as backwages.95 In MS Dhantwal, on the facts and in the
circumstances of the case and having regard to the monthly pay packet of the workman, the court directed the employer to
pay Rs 5,000 to the workman as backwages, over and above the amount of Rs 20,000 awarded by way of compensation in
lieu of reinstatement. Furthermore, in view of the fact that the workman had been kept on tenterhooks by the employer for
nearly eight years, the court directed a further payment of Rs 2,000 to the workman by way of costs. And that all the
payments should be made within a period of four weeks from the date of the judgment.96 In Municipal Corpn of Delhi, a
single judge of the Delhi High Court instead of remanding the matter for determining the backwages in view of the
pendency of litigation for about 19 years, himself fixed the backwages at Rs 20,000 to meet the ends of justice as it was
not possible to precisely determine as to what backwages the workman would have earned during that period.97 In
Vijaykumar Jasani, the tribunal held that the dismissal of a workman on the ground of absence from duty for two days was
too harsh and disproportionate to the offence which was of a minor nature and set aside the dismissal and awarded
reinstatement with 50 per cent of backwages. In a writ petition by the workman, challenging the denial of the remaining 50

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per cent of the wages, the Gujarat High Court held that even the denial of 50 per cent wages to the workman was
unreasonable and excessive punishment.98 In RD Toplewar, a single judge of the Bombay High Court held that even
though there was an inordinate delay on the part of the employee in approaching the court in challenging the order of
dismissal passed against him, the deprivation of the whole of the backwages would be unjust and disproportionate.1

In Punabhai Govindbhai, the tribunal had awarded the reinstatement of a daily wager with 50 per cent backwages. The
Gujarat High Court observed that the passing of a vague order such as payment of 50 per cent backwages to a daily wager
would create difficulties both for the workman and for the employer because a daily wager is not provided with work
throughout the year. Accordingly, the court modified the award of the labour court on the basis that he had worked 76 days
in a year and directed that the payment of 50 per cent backwages should be calculated on that basis.2 When the tribunal
makes an award stating that the employee in question is entitled to reinstatement with backwages, it really means that the
employee should be paid wages for the period for which he has been kept out of employment and the fact that the award
does not use the expression that he is ‘entitled to backwages till the reinstatement’ or ‘with backwages till reinstatement’
would not make any difference.3 The direction of payment of backwages would normally contain the entire salary for the
period to which the workman would have been emitled ifhis service had not been terminated. This would, a priori include
the national and festival holidays. Hence the workman cannot make separate and independent claim for the salary for
national and festival holidays particularly so because he was not asked to work on national and festival holidays.4 In
Ranchhodji Thakore, a junior clerk was dismissed from service on the basis of his conviction under s 302 read with s 34 of
the IPC sentencing him to life imprisonment. But the conviction was set aside in appeal by the High Court. Thereafter, in a
writ petition filed by the employee, the High Court directed the electricity board to reinstate the employee with continuity
of service but without backwages. In appeal, upholding the decision of the High Court, the court observed that, ‘since the
petitioner had involved himself in a crime, though he was later acquitted, he had disabled himself from rendering the
service on account of conviction and incarceration in jail’, he was not entitled to payment of backwages.5 In Krishnakant
Bibhavnekar, the employee was charged for an offence under the Indian Penal Code and during the trial, he was kept under
suspension. He was acquitted by the trial court and consequently, was reinstated in service without consequential reliefs.
The Supreme Court held that in view of the relevant rules, it was in the discretion of the authority to grant him the reliefs
consequent upon the reinstatement. The court observed:

Though the legal evidence may be insufficient to bring home the guilt beyond doubt and though the prosecution may end in
acquittal, the grant of consequential reliefs with all backwages cannot be as a matter of course.6

In Metro Tyres, the Punjab and Haryana High Court held that merely because the workman, after wrongful dismissal, had
been earning his livelihood by undertaking agricultural operation in his native village, it could not be said that he was
gainfully employed during the period of unemployment so as to reject his claim for backwages ordered by the labour court
along with reinstatement.7 Where the workman was dismissed for tearing of the leave application on not being granted
leave, it was held that the punishment was not only shockingly disproportionate but was unconscionable, and the employer
was directed to reinstate the workman and pay 25 per cent of backwages.8 In Lokashikshana Trust, the facts disclosed that
the workmen were dismissed for staging an illegal strike, after holding a disciplinary inquiry. The labour court, having
recorded a finding that the strike was illegal and that the domestic inquiry held into the charges was valid, yet directed their
reinstatement with full backwages on the ground that the punishment was disproportionate to the charge. The Supreme
Court observed that the direction to pay full backwages in the facts and circumstances was too onerous and accordingly
modified the order from full backwages to sixty per cent of backwages.9 In Cement Corporation, the facts were that a
workman inspite of notices issued by employer, failed to produce proof of age. He was retired from service on 30 June
1990 on the basis of the record available with the company. The workman raised an industrial dispute two years after his
retirement and placed proof before the labour court to show that his date of birth was 2 February 1936. The labour court
accepted the same and ordered backwages for the period between 20 June 1990 and 1 February 1994 and also interest
thereon. Allowing the appeal, the Supreme Court modified the order of the labour court by reducing the backwages for a
period of two years from 1 February 1992 to 30 January 1994 without any interest thereon.10 The above decision of
Supreme Court is open to criticism as that of the labour court. It is an admitted fact that the workman was indifferent to the
several notices issued in all fairness by the corporation directing him to produce the proof of age. He did not respond as
long as he was in service, but all of a sudden woke up two years after his retirement, and produced a certificate, albeit an
authenticated one and claimed wages. It would have been more enlightening, had the Supreme Court reasoned out as to
why an industrial employer should shell out, for no fault of his, two years’ salary to a retired employee and for nothing in
return from him in terms of work, production, etc. In Narsagoud, a Bench comprising Lahoti and Brajesh Kumar JJ of the
Supreme Court observed:

There is a difference between an order of reinstatement accompanied by a simple direction for continuity of service and a direction
where reinstatement is accompanied by a specific direction that the employee shall be entitled to all the consequential benefits,
which necessarily flow from reinstatement or accompanied by a specific direction that the employee shall be entitled to the benefit

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of the increments earned during the period of absence. In our opinion, the employee after having been held guilty of unauthorised
absence from duty cannot claim the benefit of increments notionally earned during the period of unauthorised absence in the
absence of a specific direction in that regard and merely because he has been directed to be reinstated with the benefit of continuity
in service.11

In Jarina Bee, a line attendant of the Electricity Board was dismissed on charge of theft. The labour court found that the
departmental enquiry was not in accordance with principles of natural justice and ordered reinstatement with opportunity
to Board to prove misconduct. The employee expired in the meantime. The High Court ordered the award of full back
wages. Setting aside the order of the High Court as being improper and reducing the backwages to Rs. 85,000/-, Pasayat J
(for himself and Raju J), of the Supreme Court held that the award of full backwages is not the natural consequence of an
order of reinstatement.12 In Nicks (India), Hegde J (for himself and Sinha J) of the Supreme Court held :

In the instant case, we have already noticed that the basic ground on which the Labour Court reduced the back wages was based on
a judgment of the High Court of Punjab and Haryana which, as further noticed by us, was overruled by a subsequent judgment of a
Division Bench. Therefore, the very foundation of the conclusion of the Labour Court having been destroyed, the appellant could
not derive any support from the abovecited judgments of that Court.. .. the trial court, apart from generally observing that in
Ludhiana there must have been job opportunities available, on facts it did not rely upon any particular material to hold that either
such job was in fact available to the respondent and he refused to accept the same or he was otherwise gainfully employed during
the period he was kept out of work. On the contrary, it is for the first time before the writ court the appellant tried to produce
additional evidence which was rightly not considered by the High Court because the same was not brought on record in a manner
known to law. Be that as it may, in the instant case we are satisfied that the High Court was justified in coming to the conclusion
that the appellant is entitled to full back wages.13

In Abdul Kareem, with an identical set of facts as that of Narsagoud (supra) and involving the same corporation, the
Supreme Court held that, where the labour court directed reinstatement but without backwages, it is improper for the single
judge and the division bench to order the payment backwages, and further observed that the principle of law on the point
was no longer res integra.14 In UP State Brassware Corporation, the Supreme Court held:

The decision to close down the establishment by the State of Uttar Pradesh like other public sector organizations had been taken as
far back on 17-11-1990 wherefor a GO had been issued. It had further been averred, which has been noticed hereinbefore, that the
said GO has substantially been implemented. In this view of the matter, we are of the opinion that interest of justice would be
subserved if the back wages payable to the Respondent for the period 1-4-1987 to 26-3-1993 is confined to 25% of the total back-
wages payable during the said period.. .. .The judgments and orders of the Labour Court and the High Court are set aside and it is
directed that the Respondent herein shall be entitled to 25% back wages of the total back-wages payable during the aforesaid
period and compensation payable in terms of Section 6-N of the U.P. Industrial Disputes Act. If, however, any sum has been paid
by the Appellant herein, the same shall be adjusted from the amount payable in terms of this judgment.15

In Rudhan Singh, the Supreme Court held:

There is no rule of thumb that in every case where the Industrial Tribunal gives a finding that the termination of service was in
violation of Section 25-F of the Act, entire back wages should be awarded. A host of factors like the manner and method of
selection and appointment i.e... whether after proper advertisement of the vacancy or inviting applications from the employment
exchange, nature of appointment, namely, whether ad hoc, short term, daily wage, temporary or permanent in character, any
special qualification required for the job and the like should be weighed and balanced in taking a decision regarding award of back
wages. One of the important factors, which has to be taken into consideration, is the length of service, which the workman had
rendered with the employer. If the workman has rendered a considerable period of service and his services are wrongfully
terminated, he may be awarded full or partial back wages keeping in view the fact that at his age and the qualification possessed by
him he may not be in a position to get another employment. However, where the total length of service rendered by a workman is
very small, the award of back wages for the complete period i.e... from the date of termination till the date of the award, which our
experience shows is often quite large, would be wholly inappropriate. Another important factor, which requires to be taken into
consideration is the nature of employment. A regular service of permanent character cannot be compared to short or intermittent
daily-wage employment though it may be for 240 days in a calendar year.16 ()

In Daya Shankar Rai, Sinha J (for himself and Hegde J), of the Supreme Court observed:

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We have referred to certain decisions of this Court to highlight that earlier in the event of an order of dismissal being set aside,
reinstatement with full back wages was the usual result. But now with the passage of time, it has come to be realized that industry
is being compelled to pay the workman for a period during which he apparently contributed little or nothing at all, for a period that
was spent unproductively, while the workman is being compelled to go back to a situation which prevailed many years ago when
he was dismissed. It is necessary for us to develop a pragmatic approach to problems dogging industrial relations. However, no just
solution can be offered but the golden mean may be arrived at.17

In Mahendra Nath Tiwari, a bus conductor was dismissed for driving the bus unauthorisedly and thereby endangering
public as well as property of the corporation. That apart, one passenger was found travelling without ticket, all of which
constitute grave charges against the conductor who was holding a position of trust as far as the corporation is concerned.
The Supreme Court, after taking all the circumstances into account, including the fact that the appeal was admitted on the
limited question of back wages, observed that order of reinstatement should not be interfered at that distance of time.
However, the Court had set aside the award of back wages, and held that the conductor was entitled to wages or salary only
from date of his reinstatement pursuant to direction of labour Court.18 In Sarada Prasad Misra, Thakker J (for himself and
Lakshmanan J), of the Supreme Court cited, inter alia, the above decisions and held:

.. . no precise formula can be adopted nor ‘cast-iron rule’ can be laid down as to when payment of full back wages should be
allowed by the court or tribunal. It depends upon the facts and circumstances of each case. The approach of the court/tribunal
should not be rigid or mechanical but flexible and realistic. The court or tribunal dealing with cases of industrial disputes may find
force in the contention of the employee as to illegal termination of his services and may come to the conclusion that the action has
been taken otherwise than in accordance with law. In such cases obviously, the workman would be entitled to reinstatement but the
question regarding payment of back wages would be independent of the first question as to entitlement of reinstatement in service.
While considering and determining the second question, the court or tribunal would consider all relevant circumstances referred to
above and keeping in view the principles of justice, equity and good conscience, should pass an appropriate order.19 ()

In a case where a driver was removed from service for hitting a road barrier and injuring an employee of the transport
corporation, but it was not proved that the workman had caused injuries intentionally even though he drove the vehical
negligently, the Supreme Court directed payment of 25% of backwages on reinstament.20 In Swayam Prakash Srivastava,
Lakshmanan J (for himself and Kabir J) of the Supreme Court held:

We are also of the view that the award of the Labour Court is perverse as it had directed grant of back wages without giving any
finding on the gainful employment of Respondent 1 and held that the discontinuance of the services of a probationer was illegal
without giving any finding to the effect that the disengagement of Respondent 1 was in any manner stigmatic. In the decision in
MP SEB v. Jarina Bee this Court held that payment of full back wages was not the natural consequence of setting aside an order of
removal. In the instant case, though the termination was as far back as in 1983, the industrial adjudicator has not given any finding
on unemployment. This Court in a recent case of State of Punjab v. Bhagwan Singh held that even if the termination order of the
probationer refers to the performance being “not satisfactory”, such an order cannot be said to be stigmatic and the termination
would be valid.21 ()

In Talwara CCSS Ltd, the Supreme Court observed that, while passing an award relating to back wages, it is necessary for
the industrial courts to consider whether the industry is sick and whether it is in a position to bear the financial burden, and
adjust the equities between the parties. Sinha J (for himself and Joseph J) of the Supreme Court held:

Grant of a relief of reinstatement, it is trite, is not automatic. Grant of back wages is also not automatic. The Industrial Courts while
exercising their power under Section 11A of the Industrial Disputes Act, 1947 are required to strike a balance in a situation of this
nature. For the said purpose, certain relevant factors, as for example, nature of service, the mode and manner of recruitment,viz.,
whether the appointment had been made in accordance with the statutory rules so far as a public sector undertaking is concerned
etc., should be taken into consideration. For the purpose of grant of back wages, one of the relevant factors would indisputably be
as to whether the workman had been able to discharge his burden that he had not been gainfully employed after termination of his
service.. .. .We have noticed hereinbefore that the respondent was employed for a short period and that too in two different spells,
viz., from 1987 to 1990 and from 1995 to 1997. Having regard to the fact that the respondent has not worked for a long period and
the appellant does not have any capacity to pay as it is a sick unit, interest of justice would be subserved if in stead and place of an
award of reinstatement with full back wages, a compensation for a sum of Rs. 2,00,000/- (Rupees two lakhs only) is directed to be

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paid.. . .22

In Mahendra Ram, the facts disclosed the services of an employee, who had worked for more than 240 days, were
terminated. The labour court directed reinstatement with full back wages and continuingy of service, which was upheld by
the High Court. Allowing the appeal filed by the employer in part, the Supreme Court restricted backwages to 50%.23 The
employee, after having been held guilty of unauthorized absence from duty, cannot claim the benefit of increments
notionally earned during the period of unauthorized absence in the absence of a specific direction in that regard and merely
because he has been directed to be reinstated with the benefit of continuity in service. The order of the labour court for re-
fixing the pay duly taking into account the notional increments is not maintainable.24 In Novartis, the facts disclosed that
the company, which was a successor to Sandoz (India) Ltd., transferred three employees directing them to report at their
respective places of transfer. On their refusal to report for duty at the places of transfer, the management discharged them
by giving one month’s notice, and without holding any enquiry. By the time the industrial tribunal passed the award, all the
three of them superannuated. The tribunal, having taken this fact into consideration, ordered payment of back wages,
which should be calculated on the last drawn pay. Writ petitions followed in the High Court. The High Court held that
West Bengal was not the appropriate Government to make the reference. The workmen filed a special leave petition before
the Supreme Court, which quashed the decision of the Division Bench and remanded the matter to it for fresh
consideration. Pursuant to the said direction, the Division Bench held that there was no reason to interfere with the order
passed by the tribunal and submitted the matter to the Supreme Court. On this, the Supreme Court, dealing with the
original special leave petition filed by the workmen, issued notices confined only to back wages. Sinha J (for himself and
Joseph J) observed that the Supreme Court was not inclined to exercise its jurisdiction under Art 142 for the purpose of
directing the payment of back wages on the basis of revised scales of pay, and held that the award passed by the tribunal
did not call for interference.25

In Metropolitan Transport, the facts briefly were: a conductor of the corporation was eventually selected internally as a
Trainee Superintendent (Legal) consequent upon his acquiring a law degree. But during the training period his
performance was not found satisfactory and he was reverted back to the post of Assistant. On January 31, 1995, the
respondent was transferred to Poonamallee Depot but he did not join his duties there and remained absent for about three
months without any prior sanction of leave or intimation. A charge-sheet was issued to him followed by a domestic
inquiry. The workman did not attend the domestic inquiry despite repeated letters and notices including a notice published
in local newspaper, and he was ultimately removed from service in December 1996. In a complaint filed under s 33A
alleging contravention of the provisions of s 33(2)(b), the tribunal, by its order dated July 11, 2003, declared that the
workman was deemed to have been in service and was entitled to all the benefits available. In a writ petition filed by the
Corporation, the Madras High Court granted an interim stay of the order of tribunal, subject to the Corporation depositing
the entire backwages as awarded by Industrial Tribunal and compliance of the provisions of Section 17B of the ID Act.
The Corporation instead of paying last drawn wages to the respondent, reinstated him on 15 June 2004 without prejudice to
the pending writ petition. The said writ petition came to be dismissed on 30 August 2006 and, thus, the order dated 11 July
2003 passed by the Industrial Tribunal attained finality. As the corporation did not pay back wages for the period from
December 1996 to June 2004, the workman filed an application under s 33C(2) for computation and recovery of the same,
which was allowed by the labour court, the amount being Rs. 6,54,766/-. The Corporation challenged the same in the High
Court on the principal ground that he was enrolled as an advocate on 12 December 2000 and was thus gainfully employed,
and hence, he was not entitled to back wages, which was dismissed at both the tiers of the High Court, thus finally
reaching the Supreme Court. Allowing the appeal partially, Lodha J (for himself and Chatterjee J) of the Supreme Court
held:

It is difficult to accept the submission of the learned senior counsel for the respondent that he had no professional earnings as an
advocate and except conducting his own case, the respondent did not appear in any other case. The fact that he resigned from
service after 2-3 years of reinstatement and re-engaged himself in legal profession leads us to assume that he had some practice in
law after he took sanad on December 12, 2000 until June 15, 2004, otherwise he would not have resigned from the settled job and
resumed profession of glorious uncertainties.In this view of the matter, reasonable deduction needs to be made while determining
the back wages to which respondent may be entitled. Taking overall facts and circumstances of the case and all other aspects
including the aspect that he was enrolled as an advocate from December 12, 2000 to June 15, 2004, in our considered view,
demand of justice would be met if the respondent is awarded back wages in the sum of Rs. 4 lacs instead of Rs. 6,54,766/-. We
order accordingly.. . The appeal is, therefore, allowed to the aforesaid extent. The impugned judgments of the division bench as
well as the learned single Judge stand modified accordingly. Time of eight weeks is granted to the Corporation to make payment of
Rs. 4 lacs to the respondent, if not paid so far, failing which it shall carry simple interest @ 6 per cent per annum from June 15,
2004 until the date of payment.26

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In Oberoi Flight Services, a workman was found carrying some 30 soup spoons concealed in his shoe and was caught by
the security. He had himself admitted the misconduct, the management dismissed him from service without issuing any
charge-sheet and without conducting any enquiry. The labour court ordered reinstatement with full back wages, which was
upheld by a single judge of the High Court. The same was set aside by a division bench which ordered payment of Rs.
60,000/- as compensation in lieu of reinstatement. Allowing the appeal in part, the Supreme Court enhanced the
compensation to Rs. 2,00,000/-, but without reinstatement.27 In a dispute relating to back wages payable to a workman
whose service was terminated without enquiry and without reasons coupled with the further facts, namely, (i) there was a
dispute whether the workman was gainfully employed; and (ii) the employer in the meanwhile became financially
unsound, the amount of back wages be curtailed to 50% from the date of termination to the date of reinstatement.28 In
Reetu Marbles, the labour court, while adjudicating a dispute relating to termination of the service of the workman, held
that the termination was illegal for non-compliance with the provisions of s 25F, and accordingly directed the
reinstatement of the workman. On the question of back wages, the labour court opined that, he must have worked
somewhere to earn his livelihood and hence there was no justification to grant back wages, and on this view of the matter,
it did not grant any back wages to the workman. In writ proceedings, the Allahabad High Court modified the award
granting full back wages for the whole period, which order was challenged by the employer in the Supreme Court.
Allowing the appeal, SS Nijjar J (for himself and Chatterjee J), of the Supreme Court reviewed the earlier decisions and
summed up the views of the court thus:

.. . the High Court erred in law in not examining the factual situation. The High Court merely stated that it was not the case of the
employer that the workman had been gainfully employed elsewhere. Although it noticed the principle that the payment of back
wages having a discretionary element involved in it, has to be dealt with in the circumstances of each case and no strait-jacket
formula can be evolved, yet the award of the Labour Court was modified without any factual basis. (). .. payment of full back
wages upon an order of termination being declared illegal cannot be granted mechanically. It does not automatically follow that
reinstatement must be accompanied by payment of full back wages even for the period when the workman remained out of service
and contributed little or nothing to the industry. (). .. It is now also well settled that despite a wide discretionary power conferred
upon the Industrial Courts under Section 11-A of the 1947 Act, the relief of rein-statement with full back wages should not be
granted automatically only because it would be lawful to do so. Grant of relief would depend on the fact situation obtaining in each
case. It will depend upon several factors, one of which would be as to whether the recruitment was effected in terms of the
statutory provisions operating in the field, if any. (). .. In our opinion the High Court was unjustified in awarding full back wages.
We are also of the opinion that the Labour Court having found the termination to be illegal was unjustified in not granting any
back wages at all. (). .. Keeping in view the facts and circumstances of this case we direct that the respondent shall be paid 50 per
cent of the back wages from the date of termination of service till reinstatement.”29 ().

Claim for Reinstatement

(1) Claim for Back Wages on Reinstatement - Burden of Proof

The question whether it is for the workman to show that he was not employed elsewhere during the period between the
termination of his service and the order of reinstatement or is it for the employer to establish that the workman was
employed elsewhere, has given rise to a considerable divergence of judicial opinion. A single judge of the Allahabad High
Court in Rakeshwar Dayal,30 as an obiter said that ‘a servant who sues his employer for wrongful dismissal must show that
he made efforts to minimise his loss’. Following these observations, the Bombay High Court in Malik Dairy,31 quashed the
order of the labour court granting full wages and sent the case back to the labour court for rehearing on this point and gave
no reasons of its own in favour of the holding. A similar view was expressed by a single judge of the Andhra High Court in
SV Mills,32 in observing that the mere order of reinstatement would not automatically entitle the workman to get the
backwages for the entire period and in order to be entitled to get the backwages, the workman has to prove that he made
sincere efforts to secure a job for mitigating the loss or damage and ‘it is then for management to prove otherwise’.
Likewise, a single judge of the Delhi High Court in Krishan ML Kapur,33 held that the claim of backwages could not
succeed merely because the termination or dismissal is set aside. The aggrieved workman would still be bound to make out
a case for award of backwages by producing sufficient material which may show that during the period of his forced
unemployment by the management, he had remained unemployed or partly employed or was otherwise not able to earn
what his employment, if subsisting, with the management would have entitled him to. A single judge of the Madras High
Court in United Bleachers, held that the allegation that the concerned workman was employed elsewhere and was earning
during the period of unemployment has to be proved by the employer and it is not sufficient to take the plea in the written
statement, but it has to be proved by leading evidence or cross-examining the workman before the tribunal for enabling it
to assess the quantum of the backwages.34 Similarly, a single judge of the Allahabad High Court in Kripa Shankar, held
that the burden of proving that the workman was gainfully employed during the period of his unemployment was upon the
employer and in the absence of any such plea or evidence in this behalf, the workman cannot be deprived of his full or
partial backwages.35 The Punjab and Haryana High Court observed that ‘it is for the employer to raise this matter in the

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course of the inquiry and prove that the employee has been earning wages for the whole or for the part of the period in
question.36 In Postal Seals, the Allahabad High Court observed that if the normal rule is to award full backwages on
reinstatement, then the burden of establishing the countervailing circumstances to neutralise the normal rule would be on
the employer. It was, therefore, for the employer to prove that the workman had made some earnings during the period of
his enforced idleness or that he had refused to seek or accept alternative job.37

The Bombay High Court in Lalit Gopal, also explained its earlier holding in Malik Dairy Farms case and held that the
question whether the employee had been gainfully employed during the relevant period must ordinarily be raised not by
the employee but by the employer in the proceedings before the industrial adjudicator.38 In Sadanand Patamkar, another
Division Bench held that it is only fair and proper that the employee should first state whether he was employed or not and
whether any amount of income was earned by him. It is in that sense that the burden of proving the said facts lies on the
employee. Once, however, the said burden is discharged, it is for the employer to prove facts to the contrary.39 The Gujarat
High Court in Dhari Gram Panchayat, held that a workman is entitled to full backwages unless the employer specifically
proves that the workman was employed with some other employer and earning wages.40 In Hindustan Tin Works, the court
has specifically stated that ordinarily a workman whose services have been illegally terminated would be entitled to full
backwages except to the extent that he was gainfully employed during the period of enforced idleness. Backwages would
be the normal rule and the party objecting to it must establish the circumstances necessitating departure.41 In BEST
Workers Union, a single judge of the Bombay High Court held that it is for the employer to allege and prove the
circumstances, justifying the deviation from the normal rule of payment of backwages, such as that the workman was
gainfully employed. The workman is not expected to allege and prove the negative. In view of the fact that the employer
had not raised the contention either before the industrial court or in the affidavit filed before the writ court that the
workman was gainfully employed at the time during the relevant period, the court confirmed the award of full
backwages.42 In Balakrishna Tindal, the same High Court further held that even if the employer makes an application to
the tribunal to adduce evidence at the fag-end of the trial regarding gainful employment of the workman when he was not
in service of the employer, the tribunal must give reasonable opportunity to the employer to prove his case.43 The question
of burden of proof as to who is to prove whether the workman did not get alternative employment for the period for which
the backwages have been awarded to him could arise only if no evidence was given by either party or if the evidence given
by them was evenly balanced but it loses its importance when the parties adduce whatever evidence they had to adduce.44

(2) Discharge and Disimissal - Whether Interim Relief can be Granted

The relief of reinstatement and payment of backwages or wages in lieu thereof, cannot be granted as an interim measure by
the tribunal where the validity of the order of dismissal or discharge is pending adjudication before it. The final order that
in such a case the tribunal can pass is either reinstatement or compensation in lieu of reinstatement and such final order
would be passed if the employer failed to justify the disciplinary action taken by him before the tribunal.45 The interim
relief cannot be the whole relief that a workman would get if he succeeds finally.46

(3) Power to Order Reinstatement under Section 33A

Section 33A of the Act lays down that where an employer contravenes the provisions of s 33 during the pendency of
proceedings before any labour court, tribunal or national tribunal, any employee aggrieved by such contravention may
make a complaint in writing to any of these authorities and on receipt of such complaint the authority to whom the
complaint is made, shall adjudicate upon the complaint as if it were a dispute referred to it or pending before it, in
accordance with the provisions of the Act and shall submit its award to the appropriate Government and the provisions of
the Act shall apply accordingly. It is thus clear that a complaint under s 33 A is equated to a reference under s 10 of the Act
and the tribunal has all the powers to deal with it as it would have in dealing with a reference under s 10 of the Act. A
priori, the provisions of s 11A will mutatis mutandis apply to the adjudication of such complaint. It follows, therefore, that
the tribunal has the power to make such order of relief as may be appropriate in the circumstances of the case and as may
be made if a dispute is referred to it relating to the dismissal or discharge of a workman. Hence, in such a complaint, it is
open to the tribunal, in proper cases, to order reinstatement, as it is within its powers to order reinstatement on such
complaint, if the complaint is that the employee has been dismissed or discharged in breach of s 33 of the Act.47 In s 33A
jurisdiction too, the tribunal cannot grant the interim relief of reinstatement or full backwages, in case the employer does
not take the workman back in his service.48By making a complaint under s 33A of the Industrial Disputes Act, an
employee would not succeed in obtaining an order of reinstatement by merely proving contravention of s 33 of the Act by
the employer. After such contravention is proved, it would still be open to the employer to justify the impugned dismissal
on merits, as the complaint is to be treated as an industrial dispute and all the relevant aspects of the said dispute are to be
considered by the tribunal under s 33A of the Act.49An application for reinstatement in case of wrongful dismissal, can
only be maintained by the person who is a ‘workman’ within the meaning of s 2(s) of the Industrial Disputes Act. The
claim of a dismissed workman for reinstatement with or without compensation for the period of unemployment is not a
‘question or claim respecting property’ within the meaning of Art 133(1)(b). Hence, the aggrieved party cannot be entitled

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as a matter of right to get a certificate under Art 133(1)(b).50

(ii) Any Lesser Punishment

It is a fundamental principle of justice that the punishment should be commensurate with the guilt judex acquitalem semper
spectat debet, a judge ought always to have equity before his eyes.51 In Rama Kant Misra, the Supreme Court observed
that it is a well-recognised principle of jurisprudence which permits the penalty to be imposed for misconduct that the
penalty must be commensurate with the gravity of the offence charged.52 For instance, in Bharat Fritz Werner, the
misconduct of the workmen of indulging in acts subversive of discipline in threatening the president of the company with
dire consequences, wrongfully confining him in his room and compelling him to withdraw notice were established.
However, the court did not find this misconduct sufficient to warrant dismissal. Therefore, keeping in view the interests of
the industry, the court held that reinstatement was not desirable and expedient. In the circumstances, the court directed
compensation for loss of service in lieu of reinstatement.53 In RM Parmar, the Gujarat High Court observed that the power
under this section is a benevolent power conferred on the industrial adjudicators and has to be exercised ‘in the spirit’ in
which the provision has been enacted in order to further the intendment and purpose of the legislation, keeping in view the
following dimensions for adjudication of the question of punishment.54 In B Maharana, it was held:

(1) There is widespread unemployment in our country and it is difficult to secure a job to earn enough to keep body and soul
together unlike in developed countries.
(2) The state does not provide social benefits like unemployment allowance to enable a discharged employee to sustain
himself and his family to some extent, as is being done in developed countries.
(3) In imposing punishment on an erring employee an enlightened approach informed with the demands of the situation and
the philosophy and spirit of the times requires to be made. It cannot be a matter of the ipse dixit of the disciplinary
authority depending on his whim or caprice.
(4) Be it administration of criminal law or the exercise of disciplinary jurisdiction in departmental proceedings, punishment
is not and cannot be the ‘end’ in itself. Punishment for the sake of punishment cannot be the ‘motto’.
(5) The length of service, based on good record and socio-economic condition of the delinquent workman are also
considerations which should weigh with the tribunal while exercising its discretion.55

The powers under s 11A are alternative; the first is to direct reinstatement of the workman on such terms and conditions as
it thinks fit and the second is to give some other relief to the workman including the award of any lesser punishment in lieu
of reinstatement as the circumstances of the case may require.56 Under the second alternative, the tribunal may give the
relief of compensation to the workman, instead of directing reinstatement. In the absence of specific words requiring the
application of the first limb to one category of unjustified dismissals and second limb to another category, it would not be
reasonable or permissible to interpret the provisions so as to limit or restrict the application of either limb to any particular
class of unjustified dismissals, if the tribunal is satisfied that the order of discharge or dismissal is unjustified, it may set
aside that order and direct the reinstatement of the workman on terms, like with backwages or without backwages or with
any part of the backwages. It may also award compensation in lieu of the reinstatement if the circumstances of the case
justify such compensation or it may give any other relief to the workman including award of any lesser punishment.57 The
expression ‘such other relief’ does not necessarily mean payment of backwages upon the reinstatement of the workman. If
the adjudicator holds that the workman should be given some kind of relief, he can award so. For instance, where after
having taken all the relevant factors into consideration, the tribunal ordered reinstatement with 50 per cent backwages of
workmen discharged from service on the ground of misappropriation of money, the award was held to be legal and
justified because the denial of 50 per cent backwages to the workman was considered by the tribunal to be sufficient
punishment for the misconduct proved against him.58

Likewise, where the labour court, took into account various mitigating circumstances having found the misconduct alleged
against the workman to have been proved, and recorded a finding that in the totality of circumstances, the charges proved
did not warrant the extreme punishment of dismissal and ordered reinstatement without backwages, the exercise of
discretion by the labour court was held to be proper and judicious.59 Similarly, where the tribunal alters the punishment of
dismissal with reinstatement without backwages for the misconduct of a driver found to be blameworthy for some acts of
misconduct duly proved against him, the High Court declined to interfere with the award which was just and reasonable
though not exactly in conformity with law.60 If the punishment of discharge automatically disentitles the workman to
receive the terminal benefits like leave, salary, payment of gratuity etc, he can reduce the order of dismissal into one of
discharge.61 It is not necessary that the tribunal must arrive at a finding regarding unfair labour practice or victimisation.
Even if no victimisation or unfair labour practice is proved, it is open to the tribunal to award lesser punishment in lieu of
discharge or dismissal, if it is satisfied that the order of discharge or dismissal was not justified. For instance, where the

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tribunal finds that the domestic inquiry was fairly and properly conducted, the order of dismissal was out of proportion to
the misconduct proved, taking into consideration the magnitude of the offence and the previous conduct of the workman,
the tribunal may award lesser or minor punishment.62

Where the tribunal passes an order of reinstatement without backwages, it would mean penalty imposed upon the
employee by way of lesser punishment. Ordinarily, reinstatement contemplates payment of backwages to the employee
directed to be reinstated for all the period during which he was out of employment on account of the original order of
wrongful dismissal or discharge. A direction withholding payment of backwages either fully or partly is, therefore, penal in
nature.63 ‘Lesser punishment’ contemplated by s 11A is not confined to the Standing Orders or any regulation of the
employer. It takes in its sweep all punishments lesser than discharge or dismissal whether provided in the Standing Orders
or regulations of punishment or not. The tribunals have very wide discretion in awarding punishment to the delinquent
workman while dealing with a dispute relating to discharge or dismissal.64 If on the facts and in the circumstances of a
case, the tribunal finds that a lesser penalty than dismissal or discharge would be sufficient, it is incumbent upon it to
convert the discharge or dismissal into lesser punishment.65 In Bansi Purushottam, the labour court held that the
misconduct alleged against the workman stood proved but the labour court still ordered the reinstatement of the workman
with backwages. In the totality of the circumstances, the Supreme Court felt that the workman should either get the
reinstatement with no backwages or just backwages without reinstatement. The court therefore modified the award of the
labour court and ordered backwages and a sum of Rs. 20,000/-.66 In HMT, while affirming the order of reinstatement of the
workman, but in view of the fact that there was a 14 years time lag between the date of dismissal and the date of the order
of the court, the court felt that instead of full backwages 60 per cent wages till the date of the reinstatement of the workman
will meet the ends of justice.67

Reinstatement under Section 54 of the Bombay Co-operative Societies Act 1925:

Disputes contemplated under s 54 of the Bombay Co-operative Societies Act are disputes of civil nature which would have
been decided by civil courts but for the provisions with regard to compulsory adjudication contained in this section. A
dispute regarding reinstatement cannot be considered to be a civil dispute as there is no right of reinstatement under the
civil law which can be enforced by an employee against his employer.68 The relief of reinstatement of the workmen even
of a co-operative society has to fall within the purview of the industrial law and only tribunals can give the relief of
reinstatement in industrial adjudication.69

(iii) Monetary Compensation in Lieu of Reinstatement

It is well-settled now that in cases of wrongful dismissal or discharge, the normal rule is to award reinstatement but where
a case falls in any of the exceptions to the general rule of reinstatement, the industrial adjudicator has the discretion to
award reasonable and adequate compensation in lieu of reinstatement. Section 11A vests the industrial adjudicators with
discretionary jurisdiction to give ‘such other relief’ to the workmen in lieu of discharge or dismissal as the circumstances
of the case may require, where for some valid reasons it considers that reinstatement with or without conditions will not be
fair or proper. Compensation in such a case is the solarium for unjustified and premature termination of employment.70 In
Air Lanka, it was held that the tribunal has the discretion to award compensation instead of reinstatement if the situation of
a particular case is unusual or exceptional so as to make reinstatement inexpedient or improper. The tribunal has to
exercise its discretion judicially and decide whether the case is one of exception to the general rule of reinstatement.71 As
in case of reinstatement, so also in case of awarding compensation in lieu of reinstatement, it is necessary that the tribunal
must hold that the dismissal or discharge of the concerned workman is wrongful.72 The compensation cannot be granted on
the ground of social justice.73

The award granting compensation in lieu of reinstatement does not infringe the provisions of Art 19(1)(g) in any way, as
the tribunal, which is competent to award reinstatement, is equally competent to award compensation in lieu of
reinstatement.74 Termination of service as a punishment inflicted by way of disciplinary action has been specificially
excluded from the definition of retrenchment. There is, therefore, no scope for allowing retrenchment compensation in
such cases, for there is no question of retrenchment as such, where the tribunal decides not to pass an order of
reinstatement but to give compensation instead.75Hence, compensation for wrongful dismissal cannot be quantified in
accordance with the provisions of s 25F of the Act. Even in cases where the retrenchment of a workman with immediate
effect is held to be unjustified, in fact and law, for want of the retrenchment notice and payment of compensation as
required by s 25F and the court does not consider the order of reinstatement to be proper and expedient, the compensation
payable instead of reinstatement in such a case, cannot be limited to compensation payable in the case of lawful
retrenchment under s 25F and the quantum of compensation in such a case is in the discretion of the tribunal.76 In SSShelly,
the workman claimed compensation equivalent to a sum which he could have earned if he had continued in service till the
age of retirement. The Supreme Court held that the compensation was not to be computed on the basis of breach of
contract or tort committed by the employer in implementing the direction for reinstatement. Bhagwati J, of the Supreme
Court observed:

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The industrial tribunal would have to take into account the terms and conditions of employment, the tenure of service, the
possibility of termination of the employment at the instance of either party, the possibility of retrenchment by the employer or
resignation or retirement by the workman and even of the employer himself ceasing to exist or of the workman being awarded
various benefits including reinstatement under the terms of future awards by industrial tribunal in the event of industrial disputes
arising between the parties in the future....In computing the money value of the benefit of reinstatement, the industrial tribunal
would also have to take into account the present value of what his salary, benefits etc would be till he attained the age of
superannuation and the value of such benefits would have to be computed as from the date when such reinstatement was ordered
under the terms of the award. Having regard to the considerations detailed above, it is impossible to compute the money value of
this benefit of reinstatement awarded to the appellant with mathematical exactitude and the best that any tribunal or court would do
under the circumstances would be to make as correct an estimate as is possible bearing, of course in mind all the relevant factors
pro and con.77

From the dicta of the Supreme Court, the Patna High Court in B Choudhury, deduced certain guidelines which have to be
borne in mind in determining the quantum of compensation, viz:

(i) the backwages receivable;

(ii) compensation for deprivation of the job with future prospect and obtainability of alternative employment;

(iii) employee’s age;

(iv) length of service in the establishment;

(v) capacity of the employer to pay and the nature of the employer’s business;

(vi) gainful employment in mitigation of damages; and

(vii)circumstances leading to the disengagement and the past conduct. 78

These factors are only illustrative and not exhaustive. In addition to the amount of compensation, it is also within the
jurisdiction of the tribunal to award interest on the amount determined as compensation. Furthermore, the rate of such
interest is also in the discretion of the tribunal.1 In Assam Oil, the employee had given up previous employment for joining
the company. Her services were terminated after she had been in employment for about two years. As against this, the
court also took into account the countervailing facts that the employer had paid certain sums to her and her own earning in
the alternative employment and ordered that ‘it would be fair and just to direct the appellant to pay a substantial sum as
compensation to her’. Accordingly, a sum of Rs 12,500/-, offered by the employer which represented about two years’
salary of the employee, was considered to be a fair amount of compensation on payment of which the order of
reinstatement passed by the tribunal was set aside.2 In Santi Patnaik, the amount of compensation equivalent to two years’
salary of the employee awarded by the industrial tribunal was reduced by the Supreme Court to an amount equivalent to
one years’ salary of the employee in view of the fact that she had been in service with the employer only for five months
and also took into consideration the unusual manner of her appointment at the instance of the chief minister of the state.
The court distinguished this case from the Assam Oil Co’s case on facts.3

In Charottar GSM, an amount equivalent to six months’ wages in the circumstances of the case was considered proper in
lieu of reinstatement.4 In PP Chopra, in the circumstances of the case, the Supreme Court substituted the award of the
tribunal directing reinstatement of the workman with half of his backwages till the date of reinstatement, with an order of
compensation equivalent to his salary for one year.5 However, in AK Roy, compensation equivalent to two years’ salary
(last drawn by the workman) was held to be fair and proper to meet the ends of justice.6 In Brahmbhatt, the award of
reinstatement was set aside and the workman was given salary up to the date of actual termination of his service. Since the
termination of his service, was upheld as bona fide under the contract, the question of compensation in lieu of
reinstatement did not arise.7 In MK Chhatre, though the Supreme Court upheld the order of reinstatement made by the
labour court, in view of the fact that the workman was prepared to accept payment at the rate of Rs 380 per month from the
date of his suspension till the date of the award of the tribunal which worked out to Rs. 22,800/- by way of compensation
in lieu of reinstatement, which the employer agreed to pay, the court awarded accordingly. The order of reinstatement
made by the tribunal was converted by the Supreme Court into an order of compensation.8

In Johnson & Johnson, on the agreement of the parties before the Supreme Court, the award of reinstatement was
converted into compensation of Rs 10,000/-.9 In MS Dhantwal, the court quantified the compensation payable to the
workman in lieu of reinstatement with full backwages to a sum of Rs 20,000/-. But while making the payment to the

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workman, the employer deducted Rs 2,145/- towards income-tax. In appeal, the Supreme Court held that the employer was
not justified in making the deduction, and directed the employer to refund the amount deducted with 15 per cent interest to
the workman.10 In ITC, having held that, on the facts and in the circumstances of the case, it was not a fit case when the
order of reinstatement could be sustained, the court directed that in lieu of reinstatement, the workman will get
compensation of Rs 30,000/- which, roughly speaking, would include almost all sums of money payable to him such as
basic pay, dearness allowance etc for a period of about five years.11 In Anil Kumar Chakraborty, in view of the holding
that the workman who held the position of trust and confidence had abused his position, the court converted the award of
reinstatement into compensation of a sum of Rs 50,000/- as just and fair compensation in full satisfaction of all his claims
for wrongful dismissal from service.12

In OP Bhandari, the Supreme Court observed that it was a fit case for granting compensation in lieu of reinstatement as it
found that the apprehensions of the employer corporation as regards the negative consequences of reinstatement was not
unreasonable. The court felt that compensation in lieu of reinstatement would be more appropriate relief but it felt that the
claim for full salary and allowance till the date of superannuation which was more than eight years away was not
reasonable and awarded compensation equivalent to 3.33 years’ salary (including admissible allowances), found to be
reasonable, as it would yield 50 per cent of annual salary and allowances to the employee.13 In MK Agarwal, while
affirming the order of the High Court reinstating the employee, the court restricted the back salary to 50 per cent of what
would otherwise be payable to the employee.14 In Bharat Fritz Werner, the workmen entered inside the room of the
president of the company in an aggressive mood and threatened him with dire consequences if the notice given to them
was not recalled. Not content with that, they confined him to his room and came very close to him making gesticulations
with fisted hands. They did not go out inspite of requests and shouted that he should not go out. They stayed in the room
till the president gave instructions to recall the notice. For these acts of misconduct, some of the workmen were found
guilty in the domestic inquiry and were dismissed from service. The Karnataka High Court held that these acts of
misconduct were not such as to deserve extreme penalty and directed that they should be taken back on duty with one-half
of the backwages as such denial of backwages was sufficient punishment for the acts of misconduct committed by them. In
appeal, the Supreme Court observed:

Reinstatement has not been considered as either desirable or expedient in certain cases where there had been strained relations
between the employer and the employee, when the post held by the aggrieved employee had been one of trust and confidence, or
when, though dismissal or discharge was unsustainable. In the impugned order, the employee was found to have been guilty of an
activity subversive or prejudicial to the interest of the industry ... In cases where it is felt that it will not be desirable or expedient to
direct reinstatement, the workman is compensated monetarily by awarding compensation in lieu of reinstatement for loss of future
employment.15

Then, the court noted that the acts of misconduct alleged against the workmen had been established. These acts were
subversive of discipline on the part of the employees. In this fact situation, the court said that it is not desirable and
expedient to direct reinstatement of these workmen and compensation in lieu of reinstatement may be granted.
Accordingly, the court awarded Rs 1,80,000/- each towards backwages and compensation for loss of future employment in
lieu of reinstatement in addition to the sum of Rs 72,000/- which had already been paid to them. In TP Srivastava, in view
of the fact that the case had remained pending for 16 long years, the Supreme Court ordered that the employee may be paid
three years’ salary in addition to whatever had already been paid to him. However, the court made it clear that this decision
will not be treated as a precedent.16 In Yashvir Singh, the order inflicting the punishment of dismissal was attacked on the
ground that the person who issued the chargesheet and ultimately inflicted the punishment was biased as it was he against
whom the workman had misbehaved and to do so would be to appreciate the worth of his own evidence. Further, the mere
fact that the appellate authority had confirmed the order, would not remove the taint which attached to the original order.
Thus, the order of punishment was violative of the rules of natural justice. On the other side, the employer contended that
under the Standing Orders of the company only that person was charged with the duty to pass order of punishment and had
to do so out of sheer necessity. Hence, the order was not liable to be challenged. The court did not decide upon the rival
contentions but in the circumstances of the case, with a view to put an end to the matter, it directed the payment of Rs
75,000/- in lieu of reinstatement with backwages.17 In Naval Kishore, the tribunal held that the termination was not
justified but it awarded compensation of Rs 15,000/- in lieu of reinstatement. In appeal by special leave against the award
of the tribunal, the employer conceded that the workman may be reinstated. However, without recording any reason as to
why the reinstatement should not be granted, the Supreme Court directed that, in view of the special circumstances of the
case, a sum of Rs. 2,00,000/- be paid to the workman as and by way of compensation. The court gave the following further
instructions:

We further direct that from the amount herein directed to be paid Rs 75,000 are payable as backwages with interest for the period
commencing from 1 March 1980 till today. The payment is Rs 15,000 for the period from 1 March 1980 to 31 March 1980 and Rs
15,000 for each subsequent year. As the income of the appellant is Rs 15,000 per year and as he had no other income, the

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respondent is discharged from the liability of deducting income-tax as required by s 12 of the Income Tax Act 1961. The balance
amount of Rs 1,10,000 (Rupees one lac and ten thousand) shall be deposited by the respondents-Management in the companies the
name of which will be supplied by Mrs P Govindan Nair, learned counsel for the appellant within ten days, by way of fixed
deposits at the rate of interest not less than 15 per cent per annum for a period more than three years in the joint names of the
appellant and his wife. This amount of Rs 1,10,000 (Rupees one lac and ten thousand) is awarded as future compensation for loss
of service at the rate of Rs 15,000 per year for the period of eight years but in order to save the respondents-management from the
liability of paying the interest the payment shall be made as herein directed and spill over will be for a period of eight years. After
the expiry of eight years from today, the amount shall be withdrawn and taken over by the appellant. The respondents-management
is also directed to pay the costs to the appellant which is quantified at Rs 5,000.18

It is submitted that this decision of Desai J was based on his private sense of justice and is repugnant to all notions of law,
justice, reason and fair play, and does not disclose any principle known to law. As already cited elsewhere in this book,
Desai J was part of the three ‘founding fathers of judicial chaos’ along with Iyer and Reddy JJ. In this connection, it is
considered expedient to cite the following passage from the book ‘Industrial Jurisprudence: A Critical Commentary’:

That there has been a conspicuous decline, in the quality of appointments to High Courts and Supreme Court, is not in doubt. There
appears no mechanism worth the name for screening the candidates or for conducting proper reference checks before elevating
them to High Courts. Even if it is there, appointments are being made, as the reports reveal, on extraneous considerations and in
derogation of even IB reports. There are no yardsticks to determine the competency and legal acumen of the persons being
considered for higher judicial positions. Mere marking attendance regularly in the High Court for 10-15 years does not by itself
make an advocate fit to be elevated as a judge! As Washington Irving once said, “young lawyers attend the courts, not because
they have business there, but because they have no business anywhere else!”. .. Several cases have been cited in this book, which
betray the absolute ignorance of even elementary legal principles, not to speak of a reasonable command or a minimum degree of
philosophical penetration, on the part of several judges. To cite a few, with great respect, the decisions in Navinchandra,19Bharat
Fritz,20GTTC,21S. Mukerjee,22Tansi Leather,23Amarnath Dey,24 and a score of others (discussed in the preceding pages) bear
eloquent testimony to the deteriorated standards of selection and/or elevation to High Courts. Even a few decisions of Supreme
Court fall in this category. To illustrate, Crompton,25Sundaramony,26GST,27Hindustan Tin Works,28Maheswari,29Port of
Bombay,30Santosh Gupta,31Govindarajulu,32TTD,33Glaxo,34Fakirbhai,35Meenakshi Mills,36Nedungadi,37Orissa Textile,38Punjab
LDRC,39 and several others are patently mediocre and/or perverse and/or even outrageous with far reaching consequences for the
industrial community. It is common knowledge that the repercussions of poor quality selection and placement at the level of High
Courts does not stop there, but extend up to the Supreme Court in the course of time. It is a wakeup call to the Chief Justice of
India as well as the Governments at the Centre and in the States that a comprehensive, objective and transparent selection policy
with focus on competence and integrity, duly supplemented by rigorous screening and clearance from Intelligence agencies, should
be designed and put in place.40

In Sant Raj, the labour court, having held that that the termination of the service of the workmen was illegal for non-
compliance with s 25F, declined the relief of reinstatement but it awarded one year’s wages as compensation in lieu of
reinstatement, as it held that ‘the termination of service of the workman was bona fide and not in colourable exercise of
power in accordance with the service rules’. The Supreme Court upheld the award, but modified the compensation
payable, in lieu of reinstatement, to Rs. 2,00,000.41 A similar order was made in KC Joshi,42 where the termination of the
service of the workman as assistant store keeper of the oil and Natural Gas Commission, was held to be illegal and
unjustified by the Supreme Court but in the facts and circumstances of the case particularly that a period of nearly 18 years
had passed, the court again awarded a sum of Rs. 2,00,000. In Chandulal,43 the court awarded compensation of Rs 2 lakhs
by way of backwages and in lieu of relief of reinstatement but no directions were given with respect to income-tax
liability. In England, the Royal Commission on Trade Unions and Employers Association observed:

while we do not favour a scale of compensation, we think it desirable for practical reasons to fix a ceiling to the amount of
compensation which can be awarded. This will make it easier for employers to insure against the risk of being obliged to pay
compensation which can be awarded. It would, in our view, be reasonable to provide that the maximum should be an amount equal
to the employees’ wages or salary for two years; and that, as in the case of compensation under the Redundancy Payments Act, in
the compensation of this amount there should be wages or salary in excess of £40 a week44

This was carried into effect in ‘The Industrial Relations Act, 1971’ which provided in s 116 and 118(1) that the amount of
compensation shall be such as the ‘tribunal considers just and equitable in all the circumstances, having regard to the loss
sustained by the aggrieved party ...’ up to a maximum limit of £40,160 or two years’ pay whichever is less. The Industrial
Relations Act 1971 was repealed and replaced by the Trade Union and Labour Relations Act 1974 which has raised the

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maximum compensation payable to £5,200. Statutory provisions in regard to assessment of compensation in lieu of
reinstatement vary in different countries. A survey conducted by the International Labour Office in 1974 noted that ‘where
compensation is awarded either in lieu of reinstatement or as the principal remedy the legislation in some cases leaves the
calculation of the amount of compensation to the entire discretion of the competent body, it indicates certain factors which
must be taken into account in the compensation, specifies a minimum amount of compensation or lays down a maximum
amount of compensation’. However, in no case, the compensation in lieu of reinstatement extends to the balance work
span of the workman. The factors which have to be taken into consideration are inter alia wages, length of service, loss of
career prospects, circumstances of dismissal, age, nature of the work and custom.45 In an illuminating review of the Indian,
English and Ceylonese case-law on the relevant statutory provisions, the Supreme Court of Sri Lanka in Wijeratne, has
stated the principles for awarding compensation in lieu of reinstatement in the following words:

The labour tribunal should normally be concerned to compensate the employee for the damages he has suffered in the loss of his
employment and legitimate expectation for the future in that employment, in the injury caused to his reputation in the prejudicing
of further employment opportunities. Punitive considerations should not enter its assessment except perhaps in those rare cases
where very serious acts of discrimination are clearly proved. Account should be taken of such circumstances as the nature of the
employer’s business and his capacity to pay, the employee’s age, the nature of his employment, length of service, seniority, present
salary, future prospects, opportunities for obtaining similar alternative employment, his past conduct, the circumstances and the
manner of the dismissal including the nature of the charge leveled against the workman, the extent to which the employee’s actions
were blameworthy and the effect of the dismissal on future pension rights and any other relevant considerations. Account should
also be taken of any sums paid or actually earned or which should also have been earned since the dismissal took place. The
amount, however, should not mechanically be calculated on the basis of the salary he would have earned till he reached the age of
superannuation and should seldom, if not never exceed a maximum of three years’ salary.46

In Jagdish Chandra Sharma, it was held that the punishment of dismissal imposed for hitting a superior officer and also
unauthorised absence is not disproportionate and the interference by the labour court in the punishment is unjustified and
without jurisdiction.47 In Tata Press Employees Union, the Bombay High Court peremptorily observed that once the labour
court had come to the conclusion that the enquiry held by the employer was in order and that the punishment of dismissal
was not disproportionate. Having held thus, the labour court proceeded to award compensation of Rs. 2 lakhs and 3 lakhs
to the dismissed workmen. The said award was set aside by a single judge of Bombay High Court. The Division Bench,
upholding the order of the single judge, observed:

.. . the Labour Court has recorded a finding that considering the gravity of the misconduct proved against the workmen,
punishment of dismissal cannot be said to be too harsh and disproportionate. In our opinion, once the Labour Court recorded this
finding, it lost jurisdiction under Section 11-A of the Act to say anything further and to interfere with the punishment awarded. The
view taken by the learned single Judge, in our opinion, is perfectly justified and therefore, the order of the learned single Judge
does not require any interference.”48

In a case where an employee was terminated without complying with the provisions of s 25F, the Rajasthan High Court
held that a compensation of Rs. 25000/- in lieu of reinstatement would meet the ends of justice in view of the fact that
there was a lapse of 8 years and further the said employee had set up his own business.49 Where the workman was
dismissed for using filthy language against superiors and answering them insolently, the Supreme Court held that, in view
of the bitter relations between the parties, it would be inappropriate to go foist a cantankerous and abrasive workman on it,
and ordered payment of Rs. 10,00,000/- as compensation in lieu of reinstatement.50

Award Passed under S 11A - Whether amenable to Judicial Review

The discretionary power of the tribunal in upholding the punishment inflicted by the employer or interfering with it by
awarding lesser punishment is amenable to judicial review by the High Courts in exercise of jurisdiction under Arts 226
and 227 or by the Supreme Court under Art 136. Under Art 227, a High Court is vested with the right of superintendence
and it is indisputably entitled to scrutinise the order of a subordinate tribunal within well-accepted limitations.51 The
reviewing courts can examine whether the tribunal has properly approached the matter for exercising or refusing to
exercise its power under s 11A but when the award is well-reasoned and the tribunal has stated the various considerations
for inflicting the lesser punishment, the award cannot be said to be illegal and void.52 In Baldev Singh, for instance, the
tribunal found that the inquiry was held fairly and properly and there was no violation of the rules of natural justice but in
view of the fact that the punishment was too harsh considering the nature of the charge, it directed reinstatement of the
workman with continuity of service but without backwages and further directed that the period of absence from service is
to be treated as leave of the kind due and in case no leave is due, as leave without pay. The Supreme Court held that the

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award of the tribunal was in conformity with the provisions of s 11A and there was no want of jurisdiction in making the
order in question. The order was not contrary to the provisions of s 11A which vests the adjudicator, to whom the dispute
has been referred, with jurisdiction to pass an appropriate order which he may think proper and expedient on the facts and
in the circumstances of the case.53 Likewise, in Scooter India, the Supreme Court held that the direction of the labour court
on the facts and in the circumstances of the case, for reinstatement of the employee with 75 per cent backwages on the
ground that the delinquent workman should be given an opportunity to reform himself and prove to be loyal and
disciplined employee, was not illegal and arbitrary even though the disciplinary inquiry was fair and lawful.54

In Balwant Singh, the labour court converted the order of dismissal into one of discharge and awarded compensation to the
workman in lieu of reinstatement.55 A single judge of the Punjab and Haryana High Court held that such award was not
permissible under s 11A. Similarly in AA Fernandes, the workman was dismissed from service for an oral altercation
between him and his superior officers. The labour court directed reinstatement without backwages and in cross appeals by
the workman and the employer, the industrial court restored the order of dismissal. The Bombay High Court held that the
misconduct in question even if it is read with the past conduct of the workman could not be considered to be a major one.
Since the misconduct was of a minor nature, the punishment of dismissal was not justified and the maximum punishment it
could merit was suspension for a few days or fine or stopping of increment etc. However, since the employee had already
attained the age of superannuation, the court granted a declaration that the employee be deemed to have been continued in
service till he attained the age of superannuation and he would be entitled to all retirement benefits on that basis.56 In BV
Rao, on the facts of the case, the Andhra Pradesh High Court held that the order of the labour court holding the dismissal
to be wrong and ordering reinstatement without backwages, could not be interfered with because it could not be said that
there was no evidence to support the finding. Nor could it be said that the finding was perverse.57

In exercising discretion to award the lesser punishment, the tribunal has to consider the seriousness and gravity of the
charge committed by the delinquent workman. The Madras High Court, held that the seriousness of the charges will not be
mitigated with reference to the motive with which the workman behaved. Nor is the length of service of the workman
relevant in imposition of punishment to prove misconduct because length of service cannot give license to a workman to
commit misconduct. Likewise, the consideration whether the workman is married or not cannot be relevant in the matter of
leniency of punishment which only depends upon the nature of the misconduct. Similarly, any undertaking by the
workman not to commit misconduct in future or the fact that he had no motive to commit the misconduct or cause loss to
the employer, cannot mitigate the seriousness of the charge. The question of punishment, therefore, has to be considered
with reference to the gravity of the charges levelled against the workman and not de hors them.58 Where the tribunal,
having set aside the order of dismissal, directs reinstatement of the workman without backwages but with continuity of
service, such an order of the tribunal would not be reviewable.59

The discretion should not be exercised in an arbitrary manner but it should be exercised in a judicious manner. The
tribunal, therefore before interfering with the punishment imposed by the management, must take into consideration all the
relevant facts and circumstances and should interfere with the punishment imposed by the management only when it
comes to the conclusion that the punishment imposed is extremely harsh and unjust and wholly disproportionate to the
misconduct proved. The altered punishment imposed by the tribunal, however, should not amount to absolving the
employee of the misconduct or make the punishment illusory or allow the employee to go scot-free, particularly when the
charges are found to be grave in nature.60 On the facts and circumstances of the case, in Rama Kant Misra, the Supreme
Court quashed the award of the labour court which had upheld the validity of the dismissal of the workman for the
misconduct of using abusive and threatening language against a superior officer, as it felt that the punishment on the facts
and in the circumstances of the case was too severe for the act of misconduct and substituted the punishment with
‘withholding of two increments with future effect’ which it felt would be more than adequate for a low paid employee.61 In
Mohd Usman, the Supreme Court upheld the award of the labour court reducing the punishment by setting aside the order
of termination of service and substituted it with the punishment of stoppage of increments for two years. The court
observed:

Section 11A confers power on the labour court to evaluate the severity of misconduct and to assess whether the punishment
imposed by the employer is commensurate with the gravity of misconduct. The power is specifically conferred on the labour court
under s 11A. If the labour court after evaluating the gravity of misconduct held that punishment of termination of service is
disproportionately heavy in relation to misconduct and exercised its discretion, this court, in the absence of any important legal
principles, would not undertake to re-examine the question of adequacy or inadequacy of material for interference by labour
court.62

In Jaswant Singh, while affirming the award of the labour court ordering reinstatement of the workman, the court imposed
the punishment of stopping three increments in the time scale in which he would be reinstated for the next three years with
a view to keep the workman within the bounds of well-disciplined conduct so that the humanistic approach of the court

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may not induce him to repeat his intemperate performance.63 In Vasanti Shah, the Gujarat High Court held that the labour
court had erred in upholding the extreme penalty of dismissal of the employees concerned as it had failed to consider the
question as to whether in the background of the circumstances that transpired and the mass hysteria suffered by the
workmen, the misconduct was so grave as to justify the extreme penalty of dismissal.64 In Bhimsen Maharana, the Orissa
High Court upheld the award of the labour Court setting aside the order of discharge of the workman found guilty of
misappropriation taking into account his otherwise long unblemished record and ordering his reinstatement with 50 per
cent of the backwages.65 On the other hand, in EV Raju, a single judge of the Karnataka High Court after setting aside of
the award of the labour court ordering reinstatement of the workman with half backwages, in view of the fact that the order
of dismissal would seriously prejudice the future career of the workman who was in his middle age, ordered an ad hoc
payment of Rs 25,000 as a lump sum compensation to enable him to rehabilitate himself by seeking suitable employment
elsewhere.66

A single judge of the Bombay High Court in Unnikrishnan, upheld the award of the tribunal awarding 65 per cent of the
wages up to the date of award in lieu of reinstatement as it had found that though the dismissal was not based on a proper
and fair inquiry, the workman was guilty of gross negligence resulting in serious monetary losses to the employer, and
therefore, the dismissal was justified.67 In Sayar, the Management of the Mills was taken over by NTC under the
provisions of the Industries (Development and Regulation) Act 1951 and an ‘authorised controller’ was appointed. The
‘authorised controller’ dismissed the delinquent workman for an act of misconduct. The reference relating to the dispute
regarding dismissal of the workman was discharged by the labour court on the ground that no relief could be claimed
against the owner of the mills. In a writ petition against the order of the labour court, the High Court held that the dispute
had to be continued against the NTC Ltd. The High Court further held that the proceedings before the labour court were
contested only on one ground, viz, against whom the award would be made and itself granted reinstatement of the
workman with full backwages from the date of his dismissal. In appeal, the Supreme Court held that the High Court was in
error to hold that the workman was entitled to reinstatement with full backwages without there being any adjudication of
the dispute. The court, therefore, set aside the order of the labour court and remanded the matter to the labour court for
adjudication of the dispute raised by the workman and with direction to dispose it of in accordance with the law
expeditiously.68

1 Workmen of Assam Match Co Ltd v PO, LC (1973) 2 LLJ 279 (SC), per Gajendragadkar CJI.
2 Assam Oil Co Ltd v Workmen (1960) 1 LLJ 587 [LNIND 1960 SC 108], 592 (SC), per Gajendragadkar J.
3 Ruby General Insurance Co Ltd v PP Chopra (1970) 1 LLJ 63 [LNIND 1969 SC 333], 66 (SC), per Shelat J.
4 Hindustan Steels Ltd v AK Roy (1970) 1 LLJ 228 [LNIND 1969 SC 497], 234-25 (SC), per Shelat J.
5 Francis Klein & Co Pvt Ltd v Workmen (1971) 2 LLJ 615 [LNIND 1971 SC 480], 619 (SC), per Jaganmohan Reddy J.
6 Workmen of Sudder Office v Mgmt (1971) 2 LLJ 620 [LNIND 1971 SC 493] (SC), per Vaidialingam J.
7 Binny Ltd v Workmen (1972) 1 LLJ 478 [LNIND 1972 SC 117] (SC), per Mitter J.
8 Binny Ltd v Workmen 1973 Lab IC 1119 (SC), per Grover J.
9 Chembur Co-op Industrial Estate v MK Chhatre (1975) 2 LLJ 357 [LNIND 1975 SC 222], 359 (SC), per Alagiriswami J.
10 L Michael v Johnson Pumps India Ltd (1975) 1 LLJ 262 [LNIND 1975 SC 55], 268 (SC), per Krishna Iyer J.
11 Royal Laboratories. Hyderabad v LC (1985) 1 LLJ 201, 203 (AP) (DB), per Choudary J.
12 Hindustan Steels Ltd v AK Roy (1970) 1 LLJ 228 [LNIND 1969 SC 497]. 235 (SC), per Shelat J.
13 Workmen of Assam Match Co Ltd v LC (1973) 2 LLJ 279. 281 (SC), per Gajendragadkar CJI.
14 Staff Supdt of State Bank of Patiala v CGIT-cum-LC (1985) 2 LLJ 440 [LNIND 1984 DEL 307], 450 (Del) (DB), per Sachar J.
15 Sadhan SSB Ltd v PO, LC (1993) 2 LLJ 468 [LNIND 1993 ALL 45], 470-71 (All), per DS Sinha J.
16 Western India Plywoods Ltd v IT (1982) 2 LLJ 113, 119 (Ker), per UL Bhat J.
17 Sahu Jain Services Ltd v First LC 1984 Lab IC (NOC) 92 (Cal), per Ashamukul Pal J.
18 Mgmt of Panitole Tea Estate v Workman (1971) 1 LLJ 233 [LNIND 1971 SC 132], 239--40 (SC), per Dua J.
19 Assam Oil Co Ltd v Workmen (1960) 1 LLJ 587 [LNIND 1960 SC 108] (SC), per Gajendragadkar J.

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20 Cox & Kings (Agents) Ltd v Workmen (1977) 1 LLJ 471 [LNIND 1977 SC 142], 478 (SC), per Sarkaria J.
21 Anil Kumar Chakraborty v Saraswatipur Tea Co Ltd (1982) I LLJ 983(SC), per Tulzapurkar J.
22 South Central Rly Employees CCS v LC (1983) 1 LLJ 469, 473 (AP), per Seetharam Reddy J.
23 M Arunagiri v Mgmt of Bata India Ltd 1991 Lab IC 814, 818 (Mad) (DB), per Somasundaram J.
24 D Seeralan v Mgmt of Facit Asia Ltd 1991 Lab IC 362, 366 (Mad) (DB), per Nainar Sundaram J.
25 Kanhaiyalal Agrawal v Gwalior Sugar Co Ltd (2002) 1 LLN 58 (SC), per Rajendra Babu J.
26 State Bank of Bikaner and Jaipur v NC Nalwaya AIR 2011 SC 1931 [LNIND 2011 SC 247]: (2011) 3 LLJ 13 [LNIND 2011 SC
247] : 2011 LLR 634 : 2011 (4) SCALE 56 [LNIND 2011 SC 247] : (2011) 4 SCC 584 [LNIND 2011 SC 247], per Raveendran J.
27 United Bleachers Pvt Ltd v LC (1965) 2 LLJ 237 [LNIND 1965 MAD 18], 241 (Mad) (DB), per Anantanarayanan Offg. CJ.
28 Chandramalai Estate v Workmen (1960) 2 LLJ 243 [LNIND 1960 SC 107] (SC), per Das Gupta J.
29 Shalimar Works Ltd v Workmen (1959) 2 LLJ 26 [LNIND 1959 SC 108] (SC), per Wanchoo J.
30 Punjab National Bank Ltd v Workmen (1959) 2 LLJ 666 [LNIND 1959 SC 166], 691 (SC), per Gajendragadkar J.
31 Swadesamitran Ltd v Workmen (1960) 1 LLJ 504 [LNIND 1960 SC 102], 509 (SC), per Gajendragadkar J.
32 Bombay Steel Rolling Mills Ltd v KRSMPYL Union (1964) 2 LLJ 120 [LNIND 1964 SC 107] (SC), per KC Das Gupta J.
33 Binny Ltd v Workmen (1972) 1 LLJ 478 [LNIND 1972 SC 117] (SC), per Mitter J.
34 Sadanand Patamkar v New Prabhat Silk Mills (1974) 2 LLJ 52,60 (Bom) (DB), per Sawant J.
35 Gowri Silk Mills v Workers (1956) 1 LLJ 49, 54 (LAT).
36 Vishwamitra Press v Workmen (1952) 1 LLJ 181, 187 (LAT).
37 United Commercial Bank Ltd v KD Chaturvedi (1953) 2 LLJ 34 (LAT).
38 Pallavan Transport Corpn v PO, Addl LC (1984) 2 LLJ 132, 137 (Mad), per Nainar Sundaram J.
39 Pallavan Transport Corpn v PO, First Addl LC (1984) 2 LLJ 132, 138 (Mad), per Nainar Sundaram J.
40 Mgmt of Chandra Textiles Pvt Ltd v Palaniswami 1987 Lab IC 1391,1400 (Mad) (DB), per Srinivasan J.
41 Seema Ghosh v Tata Iron and Steel Co., AIR 2006 SC 2936 [LNIND 2006 SC 665]: (2006) 3 LLJ 759 [LNIND 2006 SC 665] :
2006 (4) PLJR 28 : 2006 (8) SCALE 613 [LNIND 2006 SC 665] : (2006) 7 SCC 722 [LNIND 2006 SC 665], per Lakshmanan J.
42 Lakshmiratan Cotton Mills Co Ltd v Workmen (1975) 2 LLJ 174 [LNIND 1975 SC 197], 184 (SC), per Bhagwati J.
43 State Bank of India v N Sundaramony (1976) 1 LLJ 478 [LNIND 1976 SC 13], 483 (SC), per Krishna Iyer J.
44 Mgmt of Crompton Engg Co (M) Pvt Ltd v PO, LC 1975 Lab IC 1006 (Mad), per Ismail J.
45 Bank of Bikaner & Jaipur v JS Khadgawat 1987 Lab IC 112, 118 (Raj) (DB), per SK Mal Lodha J.
46 MP Sugar Mills v State of Uttar Pradesh AIR 1979 SC 621 [LNIND 1978 SC 382], 628, per Bhagwati J.
47 Mahindra and Mahindra Ltd v Union of Indian AIR 1979 SC 798 [LNIND 1979 SC 59], 815, per Bhagwati J.
48 Murugan Mills Ltd v IT (1965) 1 LLJ 422 [LNIND 1964 SC 320] (SC), per Wanchoo J.
49 Sindhu Resettlement Corpn Ltd v IT (1968) 1 LLJ 834 [LNIND 1967 SC 268] (SC), per Bhargava J.
50 Haryana State CLD Bank Ltd v Neelam, AIR 2005 SC 1843 [LNIND 2005 SC 207]: (2005) 1 LLJ 1153 [LNIND 2005 SC 207] :
(2005) 5 SCC 91 [LNIND 2005 SC 207], per Sinha J.
51 Pudukottah Textiles Ltd v A Subramaniam (1958) 1 LLJ 74 (Mad), per Rajagopalan J.
52 Premier Tyres Ltd v Workmen of Premier Tyres Ltd (1973) 2 LLJ 597, 604 (Ker), per Isaac J.
53 Maneck Gopal Divekar v Phoenix Mills Ltd 1988 Lab IC 629, 634 (Bom), per Kantharia J.
54 Phanindra Chandra Roy v Calcutta STC 1991 Lab IC 929, 931 (Cal), per MK Mukherjee J.
55 Hindustan Tin Works Ltd v Employees (1978) 2 LLJ 474 [LNIND 1978 SC 227], 477-78 (SC), per Desai J.
56 Sadanand Patamkar v New Prabhat Silk Mills (1974) 2 LLJ 52, 64 (Bom) (DB), per Sawant J.
57 Vishwamitra Press v Workmen (1952) 1 LLJ 181 (LAT).
58 Apco Fabrics v Ravi Avasthy 1987 Lab IC 1551 (Del), per Kirpal J.
59 Hariganga Security Services Ltd v Member, IC (1991) 2 LLJ 203 [LNIND 1990 BOM 175], 207 (Bom) (DB), per Deshpande J.

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60 Changunabai C Palkar v Khatau Makanji Mills Ltd (1992) 2 LLJ 640 (Bom) (DB), per PD Desai CJ.
61 Western India Automobile Assn v IT (1949) 2 LLJ 245, 256 (FC), per Mahajan J.
62 Sunder Dass v Asthetic Exports Pvt Ltd (1983) 2 LLJ 246 [LNIND 1983 DEL 162], 248 (Del), per AB Rohatgi J.
63 Hindustan Tin Works Pvt Ltd v Employees (1978) 2 LLJ 474 [LNIND 1978 SC 227], 477 (SC), per Desai J.
64 Postal Seals Industrial Co-op Society v LC (1971) 1 LLJ 33, 327(All) (DB), per Dwivedi J.
65 Gujarat Steel Tubes Ltd v GST Mazdoor Sabha (1980) 1 LLJ 137 [LNIND 1979 SC 464], 174-5 (SC), per Krishna Iyer J.
66 Surendra Kumar Verma v CGIT (1981) 1 LLJ 386 [LNIND 1980 SC 403] (389) (SC), per Chinnappa Reddy J.
67 Suresh Chandra Barad v State of Orissa 1982 Lab IC 748 (Ori) (DB), per Das J.
68 Sadananad Patamkar v New Prabhat Silk Mills (1974) 2 LLJ 52, 64 (Bom) (DB), per Sawant J.
69 Hindustan Aluminium Corpn Ltd v Murari Singh 1978 Lab IC (NOC) 96 (All) (DB).
70 Western India Match Co Ltd v Third IT 1978 Lab IC 179 -80 (SC), per Krishna Iyer J.
71 Hindustan Tin Works Ltd v Employees (1978) 2 LLJ 474 [LNIND 1978 SC 227], 477 (SC), per Desai J.
72 Zila Sahakari Bank Ltd v LC 1983 Lab IC 1324, 1328 (All), per TS Misra J.
73 SG Chemicals and Dyes Trading Employees Union v Mgmt 1986 Lab IC 863,878 (SC), per Madon J.
74 Steel Authority of India Ltd v PO (1996) 2 LLJ 720 -21 (SC).
75 Workmen of UPSEB v Upper Ganges VES Co (1966) 1 LLJ 730 [LNIND 1965 SC 283], 734 (SC), per Hidayatullah J.
76 Magnolia Soda Fountains Ltd v Employees (1956) 1 LLJ 176, 178 (LAT).
77 GT Lad v Chemicals & Fibres India Ltd 1979 Lab IC 290 [LNIND 1978 SC 582], 294 (SC), per Jaswant Singh J.
78 Magnolia Soda Fountains v Employees (1956) 1 LLJ 176, 178 (LAT).
79 Mehta Bros v Amar Singh (1961) 2 LLJ 610 (Punj), per Mahajan J.rpal J.
80 Lalit Gopal Berry v MV Hirway (1973) 2 LLJ 22, 25 (Bom) (DB), per KK Desai J.
81 Hindustan Tin Works Ltd v Employees (1978) 2 LLJ 474 [LNIND 1978 SC 227], 478 (SC), per Desai J.
82 Indian Air Lines v A Phillips (1989) 2 LLJ 86, 89 (AP), per Quadri J.
83 Surendra Kumar Verma v CGIT (1981) 1 LLJ 386 [LNIND 1980 SC 403], 389 (SC), per Chinnappa Reddy J.
84 GT Lad v Chemicals and Fibres India Ltd 1979 Lab IC 290 [LNIND 1978 SC 582], 294 (SC), per Jaswant Singh J.
85 (1980) 1 LLJ 137 [LNIND 1979 SC 464] (SC), per Krishna Iyer J.
86 Pannijee Sugar & General Mills v Workmen 1983 Lab IC 670 (SC).
87 Abhinash Chandra Gautam v Union Territory of Tripura 1983 Lab IC 1738 (SC).
88 SM Saiyad v Baroda Municipal Corpn 1984 Lab IC 1446 (SC).
89 Jai Bhagwan v Mgmt of Ambala CCB Ltd 1983 Lab IC 1694, 1696 (SC), per Chinnappa Reddy J.
90 Sr DPO, Southern Rly v PO, CGIT (1979) 1 LLJ 253 (Ker)(DB), per Nambiyar CJ.
91 Pannijee Sugar & General Mills v Its Workmen 1983 Lab IC 670 (SC).
92 P Venugopal v Coromondal Fertilizers Ltd CA No 4114 of 1985 (SC).
93 SGChemical & Dyes TE Union v SGCDT 1986 Lab IC 863, 878 (SC), per Madon J.
94 Central Co-op Consumer’s Store Ltd v LC 1993 Lab IC 1943 -45 (SC).
95 Mathura Electric Supply Co Ltd v State of UP 1984 Lab IC 1455 (SC), per Desai J.
96 Mahendra Singh Dhantwal v Hindustan Motors Ltd 1984 Lab IC 1568 (SC).
97 Workmen of Municipal Corpn of Delhi v Municipal Corpn of Delhi (1987) 1 LLJ 85 [LNIND 1986 DEL 237], 88 (Del), per
Goswamy J.
98 Vijaykumar Muljibhai Jasani v Gujarat SRTC 1987 Lab IC 685 (Guj) (DB), per Mehta J.
1 Maharashtra SRTC v RD Toplewar 1987 Lab IC 789 [LNIND 1986 BOM 192], 797 (Bom), per Dhabe J.
2 EE, Panchayat, R&BD v Punabhai Govindbhai (1993) 2 LLJ 835 -36 (Guj) (DB), per Nanavati J.
3 AR Sambandam v LC (1969) 2 LLJ 422, 426 (Mad), per Ismail J.

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4 Mgmt of Nathan’s Press v K Krishnan 1988 Lab IC 700 -01 (Mad), per Nainar Sundaram J.
5 Ranchhodji Chaturji Thakore v SE (1997) 2 LLJ 683, 684 (SC).
6 Krishnakant Raghunath Bibhavnekar v State of Maharashtra (1997) 1 LLJ 1190 [LNIND 1997 SC 367] (SC).
7 Metro Tyres Ltd v LC (1998) 1 LLN 669 (P&H) (DB), per Singhvi J.
8 C Sankaranarayana v Sree Ganapathy Mills Ltd (2000) 4 LLN 226 (Mad), per Kanakaraj J.
9 Mgmt Lokashikshana Trust v PO, LC (2000) 2 LLJ 531 (SC).
10 Cement Corporation of India Ltd v Raghbir Singh (2001) 3 LLN 853 (SC).
11 APSRTC v. S. Narsagoud (2003) 2 SCC 212 [LNIND 2003 SC 42] (215) : (2003) 1 LLJ 816 [LNIND 2003 SC 42] : 2003 (1)
SCALE 336 [LNIND 2003 SC 42].
12 MP State Electricity Board v Jarina Bee (2003) 6 SCC 579, per Pasayat J.
13 Nicks (India) Tools v Ram Sarat (2004) 8 SCC 222 [LNIND 2004 SC 850] : AIR 2004 SC 4348 [LNIND 2004 SC 850]: (2004) 3
LLJ 764 [LNIND 2004 SC 850] : (2005) 1 MLJ 163 [LNIND 2004 SC 850] : 2004 (7) SCALE 241 [LNIND 2004 SC 850], per
Hegde J.
14 APSRTC v Abdul Kareem, AIR 2005 SC 3791 [LNIND 2005 SC 571]: (2005) 3 LLJ 477 [LNIND 2005 SC 571] : (2005) 6 SCC 36
[LNIND 2005 SC 571], per HK Sema J.
15 UP State Brassware Corpn v. Udai Narain Pandey AIR 2006 SC 586 [LNIND 2005 SC 954]: (2006) 1 LLJ 496 [LNIND 2005 SC
954] : (2006) 1 SCC 479 [LNIND 2005 SC 954], per Sinha J.
16 GM, Haryana Roadways v Rudhan Singh (2005) 5 SCC 591 [LNIND 2005 SC 528] : AIR 2005 SC 3966 [LNIND 2005 SC 528],
per Mathur J.
17 Allahabad Jal Sansthan v Daya Shankar Rai, (2005) 5 SCC 124 [LNIND 2005 SC 452] : AIR 2005 SC 237, per Sinha, J.
18 UPSRTC v Mahendra Nath Tiwari, AIR 2006 SC 405 [LNIND 2005 SC 896]: (2006) 1 LLJ 464 [LNIND 2005 SC 896] : 2005 (9)
SCALE 298 [LNIND 2005 SC 896] : (2006) 1 SCC 118 [LNIND 2005 SC 896], per Balasubramanyan J.
19 UPSRTC v Sarada Prasad Misra, (2006) 4 SCC 736, per CK Thakker J.
20 UPSRTC v Shivaji, AIR 2007 SC 322 : 2006 (11) SCALE 691 : (2006) 13 SCC 637, per SB Sinha J.
21 Muir Mills Unit of NTC (UP) Ltd. v Swayam P Srivastava (2007) 1 SCC 491 [LNIND 2006 SC 1070] : AIR 2007 SC 519 [LNIND
2006 SC 1070], per Lakshmanan J.
22 Talwara CCS Society Ltd v Sushil Kuma r, AIR 2009 SC (supp) 1110, per Sinha J.
23 PVK Distillary Ltd v Mahendra Ram, AIR 2009 SC 2205 [LNIND 2009 SC 493]: (2009) 5 SCC 705 [LNIND 2009 SC 493].
24 I Laxma Reddy v APSRTC, AIR 2008 SC 423 [LNIND 2007 SC 1354]: (2008) 1 LLJ 706 [LNIND 2007 SC 1354] : 2007 (13)
SCALE 383 [LNIND 2007 SC 1354] : (2007) 13 SCC 415 [LNIND 2007 SC 1354], per Pasayat J.
25 Novartis India Ltd v. State of West Bengal, AIR 2008 SC (supp) 836, per SB Sinha J.
26 Metropolitan Transport Corporation v V Venkatesan AIR 2010 SC 206 [LNIND 2009 SC 1649]: (2009) 4 LLJ 305 : 2009 (11)
SCALE 50 [LNIND 2009 SC 1649] : (2009) 9 SCC 601 [LNIND 2009 SC 1649], per RM Lodha J.
27 Ashok Kumar Sharma v Oberoi Flight Services AIR 2010 SC 502 [LNIND 2009 SC 1956]: (2009) 4 LLJ 732 [LNIND 2009 SC
1956] : (2009) 8 MLJ 1161 [LNIND 2009 SC 1956] (SC) : 2009 (13) SCALE 602 [LNIND 2009 SC 1956] : (2010) 1 SCC 142
[LNIND 2009 SC 1956], per RM Lodha J.
28 KVSS Mandawar v Mukesh Kumar Sharma AIR 2010 SC 3840 [LNINDU 2010 SC 3]: 2010 (3) SCALE 303 [LNINDU 2010 SC
3] : (2010) 12 SCC 487 [LNINDU 2010 SC 3], per Radhakrishnan J.
29 Reetu Marbles v Prabhakant Shukla AIR 2010 SC 397 [LNIND 2009 SC 2061]: (2010) 2 SCC 70 [LNIND 2009 SC 2061], per SS
Nijjar J.
30 Rakeshwar Dayal v LC (1962) 1 LLJ 5 (All), per Dhavan J.
31 Malik Dairy Farms v Workers’Union , 1968) 2 LLJ 523 (Bom) (DB), per Tarkunde J.
32 SV Mills v IT [1973] 2AP LJ 374, per Obul Reddy J.
33 Krishan Murari Lal Kapur v PO, LC [1976] 33 FLR 76,79 (Del), per Anand J.
34 United Bleachers Pvt Ltd v LC (1964) 2 LLJ 156, 158 (Mad), per Veeraswami J.
35 Kripa Shankar Dwivedi v IT 1982 Lab IC 973, 975 (All), per Mehrotra J.
36 Daljeet & Co Pvt Ltd v State of Punjab (1966) 1 LLJ 875, 877 (P&H) (DB), per Falshaw CJ.
37 Postal Seals ICS Ltd v LC (1971) 1 LLJ 327, 333 (All) (DB), per Dwivedi J.

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38 Lalit Gopal Berry v MK Hirway (1973) 2 LLJ 22, 25 (Bom) (DB), per KK Desai J.
39 Sadanand Patamkar v New Prabhat Silk Mills (1974) 2 LLJ 52, 65 (Bom) (DB), per Sawant J.
40 Dhari Gram Panchayat v SBSSK Manda (1971) 1 LLJ 508, 524 (Guj) (DB), per DA Desai J.
41 Hindustan Tin Works Ltd v Employees (1978) 2 LLJ 474 [LNIND 1978 SC 227], 478 (SC), pe Desai J.
42 Municipal Corpn of Greater Bombay v BEST Workers, Union (1985) 1 LLJ 327, 329 (Bom), per Jamdar J.
43 Balakrishna Tindal v Indabrator Ltd (1985) 1 LLJ 23, 25 (Bom) (DB), per Kantharia J.
44 Cox & Kings (Agents) Ltd v Workmen (1977) 1 LLJ 471 [LNIND 1977 SC 142], 478 (SC), per Sarkaria J.
45 Delhi Cloth & General Mills Ltd v Addl IT (1960) 2 LLJ 712 [LNIND 1960 SC 283], 715 (SC), per Wanchoo J.
46 Hotel Imperial, New Delhi v Hotel Workers’ Union (1959) 2 LLJ 544 [LNIND 1959 SC 136], 552 (SC), per Wanchoo J.
47 Kumarhatty Co Ltd v Ushnath Pakrashi (1959) 2 LLJ 556 [LNIND 1959 SC 133]-57 (SC), per Wanchoo J.
48 Delhi Cloth & General Mills Ltd v Addl IT (1960) 2 LLJ 712 [LNIND 1960 SC 283] (SC), per Wanchoo J.
49 Punjab National Bank Ltd v Workmen (1959) 2 LLJ 666 [LNIND 1959 SC 166] (SC), per Gajendragadkar J.
50 State of Bihar v DN Ganguly (1957) 2 LLJ 517 (Pat) (DB).
51 Workmen of Tanganagaon Tea Estate v Mgmt (1987) 2 LLJ 491, 496 (Gau) (DB), per Saikia J.
52 Rama Kant Misra v State of UP 1982 Lab IC 1790 [LNIND 1982 SC 149] (SC).
53 Workmen of Bharat Fritz Werner Pvt Ltd v Mgmt (1990) 2 LLJ 226 [LNIND 1990 SC 87], 234 (SC), per BC Agrawal J.
54 RM Parmar v Gujarat Electricity Board 1982 Lab IC 1031 [LNIND 1981 GUJ 125]-34 (Guj) (DB), per Thakkar CJ.
55 MD, Orissa Agro Ind. Corpn v B Maharana 1990 Lab IC 1531, 1537 (Ori) (DB), per V Gopalaswami J.
56 Mgmt of Binny Ltd v Addl LC (1979) 2 LLJ 280 [LNIND 1979 MAD 58] (Mad) (DB), per Mohan J.
57 Workmen of Firestone TRCI Ltd v Mgmt (1973) 1 LLJ 278 [LNIND 1972 SC 133] (SC), per Vaidialingam J.
58 MD, Orissa Agro Ind. Corpn v B Maharana 1990 Lab IC 1531, 1537 (Ori) (DB), per V Gopalaswamy J.
59 T Mitthusamy v PO, LC (1991) 2 LLJ 405 [LNIND 1991 MAD 49] (Mad) (DB), per Anand CJ.
60 E Merck (India) Ltd v VN Parulekar 1991 Lab IC 1555, 1568 (Bom), per Dhanuka J.
61 Jai Bahadur v Motor Industries Co Ltd 1977 Lab IC 143, 145 (Kant), per Jagannatha Shetry J.
62 Mgmt. of DBR Mills Ltd v Ramaiah 1978 Lab IC 1143 -44 (AP) (DB), per Alladi Kuppuswami J.
63 Himachal Road Transport Corpn v PO, LC 1981 Lab IC 356, 359 (HP), per Gupta J.
64 Distt Manager, APSRTC v LC 1978 Lab IC 359, 362 (AP) (DB), per Madhusudan Rao J.
65 Graphite India Ltd v State of WB 1979 Lab IC 1279 (Cal) (DB), per Dun J.
66 Mukund Engineering Works v Bansi Purushottam (1995) 2 LLJ 62 [LNIND 1993 SC 846] (SC).
67 HMT Ltd v LC 1994 Lab IC 344 (SC).
68 Major Sahkari Bank Ltd v MN Majumdar (1955) 2 LL J 755(Bom) (DB).
69 Western India Automobile Assn v IT (1949) 1 LLJ 245 (FC), per Mahajan J.
70 Anglo-American DTT Co Ltd v Workmen of NT Estate (1961) 2 LLJ 625 [LNIND 1960 SC 355], 628 (SC), per Wanchoo J.
71 Air Lanka Ltd v John William Nathan (1991) 1 LLJ 291 [LNIND 1990 MAD 321], 303 (Mad), per Govindasamy J.
72 Punjab National Bank v Workmen (1952) 2 LLJ 648 (LAT).
73 Diwan Sugar Mills v Mazdoor Sabha (1952) 1 LLJ 805 (LAT).
74 Vallabdas Kanji Ltd v CRD Bhutji (1958) 1 LLJ 46 (Ker) (DB), per MS Menon J.
75 Anglo-American DTT Co Ltd v Workmen of NT Estate (1961) 2 LLJ 625 [LNIND 1960 SC 355], 628-29 (SC), per Wanchoo J.
76 Mgmt of Penguins Textile Ltd v LC 1975 Lab IC 526, 528 (AP), per Chinnapa Reddy J.
77 SSShelly v Bharat Nidhi Ltd , (1957) 2 LLJ 696 [LNIND 1957 SC 88] (702-4) (SC), per Bhagwati J.
78 B Choudhury v PO, LC 1983 Lab IC 1755, 1758 (Pat) (DB), per Nagendra Prasad Singh J.
1 Mgmt of Tabesh Process v PO, LC 1989 Lab IC 1887, 1891 (Mad), per Swamikkannu J.

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3 Utkal Machinery Ltd v Santi Patnaik (1966) 1 LLJ 398 [LNIND 1965 SC 277], 401 (SC), per Ramaswami J.
4 Workmen of CGSM Ltd v CGS Mandal Ltd CA No 382/66 (SC), per Bhargava J.
5 Ruby General Insurance Co Ltd v PP Chopra (1970) 1 LLJ 63 [LNIND 1969 SC 333], 67 (SC), per Shelat J.
6 Hindustan Steel Ltd v AK Roy (1970) 1 LLJ 228 [LNIND 1969 SC 497], 236 (SC), per Shelat J.
7 Gujarat Mineral Development Corpn v PH Brahmbhatt (1974) 1 LLJ 97 [LNIND 1973 SC 318] (SC), per Jaganmohan Reddy J.
8 Chembur Co-op Industrial Estate Ltd v MK Chhatre (1975) 2 LLJ 357 [LNIND 1975 SC 222], 359 (SC), per Alagiriswami J.
9 Mgmt of Johnson & Johnson (India) Ltd v Workmen CA 516 170 (SC), per Khanna J.
10 Mahendra Singh Dantwal v Hindustan Motors Ltd (1976) 2 LLJ 259 [LNIND 1976 SC 222] (SC), per Goswami J.
11 Mgmt ITC Ltd v PO, LC 1978 Lab IC 1256 [LNIND 1978 SC 170] (SC), per Untwalia J.
12 Anil Kumar Chakraborty v Saraswatipur Tea Co Ltd (1962) 2 LLJ 483 (SC), per Tulzapukar J.
13 OP Bhandari v India Tourism Development Corpn Ltd (1986) 2 LLJ 509 [LNIND 1986 SC 353] (SC), per Thakkar J.
14 MK Agarwal v Gurgaon Gramin Bank 1988 Lab IC 380 (SC), per Venkatachaliah J.
15 Workmen of BFW v Bharat Fritz Werner Pvt Ltd (1990) 2 LLJ 226 [LNIND 1990 SC 87], 234 (SC), per SC Agrawal J.
16 TP Srivastava v National Tobacco Co of India Ltd (1992) 1 LLJ 86 [LNIND 1991 SC 537], 88 (SC), per V Ramaswsami J.
17 Yashvir Singh v Modern Food Industry (India) Ltd 1993 Lab IC 44 (SC).
18 Naval Kishore v Darbshaw B Cursetjee’s Sons (1984) 2 LLJ 473 [LNIND 1984 SC 223], per Desai J.
19 Navinchandra S Shah v Ahmadabad CDS Ltd (1979) I LLJ 60(Guj) : (1978) 19 GLR 108, per Desai J.
20 Bharat Friz Werner Ltd. v CG Patil (2002) 2 LLN 209 (Kant .), per Gururajan J.
21 Government TT Centre v Asst Commr of Labour 2002 (93) FLR 580 (Kant .), per Gururajan J.
22 S Mukherjee v Third IT (1997) III LLJ (Supp) 847(Cal), per Sen J.
23 The Supdt., Tansi Leather Works v G Gowri (1986) II LLJ 263(Mad), per Singh CJ.
24 Amar Nath Dey v State of West Bengal (2002) 2 LLN 137 (Cal), per Seth J.
25 Crompton Greaves Ltd v Workmen (1978) II LLJ 80 (82) : AIR 1978 SC 1489 : 1978 Lab IC 1379 (SC), per Jaswant Singh J.
26 State Bank of India v N Sundaramony (1976) I LLJ 478 (SC) : AIR 1976 SC 1111 [LNIND 1976 SC 13]: 1976 Lab IC 769
[LNIND 1976 SC 13] : (1976) 1 SCC 22, per Iyer J.
27 Gujarat Steel Tubes Ltd v GST Mazdoor Sabha (1980) I LLJ 137 : AIR 1980 SC 1896 [LNIND 1979 SC 464]: (1980) 2 SCC 593
[LNIND 1979 SC 464], per Iyer J.
28 Hindustan Tin Works Pvt Ltd v Employees AIR 1979 SC 75 [LNIND 1978 SC 227]: (1979) 2 SCC 80 [LNIND 1978 SC 227], per
Desai, J.
29 D. P. Maheswari v Delhi Administration (1983) Lab IC 1629 (SC), per Reddy, J.
30 Board of Trustees, Port of Bombay v DR Nadkarni AIR 1983 SC 109 [LNIND 1982 SC 167]: (1983) 1 SCC 124 [LNIND 1982 SC
167], per Desai J.
31 Santosh Gupta v State Bank of Patiala, (1980) II LLJ 72 (SC) : AIR 1980 SC 1219 [LNIND 1980 SC 214]: 1980 Lab IC 687 :
(1980) 3 SCC 340 [LNIND 1980 SC 214], per Reddy J.
32 S Govinda Raju v KSRTC., (1986) II LLJ 351 (SC) : AIR 1986 SC 1680 [LNIND 1986 SC 125]: 1986 (1) SCALE 794 : (1986) 3
SCC 273 [LNIND 1986 SC 125], per KN Singh J.
33 Workmen of TTD v The Mgmt (1980) I LLJ 211(SC), per Iyer J.
34 Glaxo Laboratories (I) Ltd v LC., (1984) I LLJ 16(SC), per Desai J.
35 Fakirbhai F Solanki v PO AIR 1986 SC 1168 [LNIND 1986 SC 184]: (1986) 3 LJ 124 : 1986 (1) SCALE 1191 : (1986) 3 SCC
131 [LNIND 1986 SC 184], per Venkataramaiah J.
36 Workmen of Meenakshi Mills Ltd v Meenakshi Mills Ltd (1992) II LLJ 294(SC), per Agarwal J.
37 Nedungadi Bank Ltd v KP Madhavan Kutty AIR 2000 SC 839 [LNIND 2000 SC 184]: (2000) 1 LLJ 561 [LNIND 2000 SC 184] :
2000 2 LW 725 : 2000 (1) SCALE 306 [LNIND 2000 SC 184] : (2000) 2 SCC 455 [LNIND 2000 SC 184], per Wadhwa J.
38 Orissa Textile & Steel Ltd v Orissa (2002) I LLJ 858(SC), per Variava J.
39 Punjab Land Dev & Recl Corpn Ltd v LC (1990) II LLJ 70, per Saikia J.

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40 Rao, EM (2015), Industrial Jurisprudence: A Critical Commentary, 2nd ed, Lexisnexis, p.

41 Sant Raj v OP Singla (1985) 2 LLJ 19 [LNIND 1985 SC 118] (SC), per Desai J.
42 KC Joshi v Union of India 1985 Lab IC 1032 [LNIND 1985 SC 143] (SC), per Desai J.
43 Chandulal v Mgmt of Pan AW Airways Inc 1985 Lab IC 1225 (SC), per Ranganath Misra J.
44 Command Paper Number 3623, June 1968, 149, para 554.
45 Third Report, Pt 4B to the 59th session [1974], p 50, para 97.
46 Ceylon Transport Board v AH Wijeratne (1976) 1 LLJ 182, 196 (SC) (SL), per Vythialingam J.
47 Madhya Pradesh Elec. Board v Jagdish C Sharma AIR 2005 SC 1924 : (2005) 2 LLJ 156 : (2005) 3 SCC 401, per
Balasubramanyan J.
48 Tata Press Employees Union v. Tata Infomedia Ltd. (2010) 2 LLJ 847 [LNIND 2010 BOM 268] (Bom .) (DB).
49 E.O., Municipal Board v. State (2003) 4 LLJ 912 (Raj), per Sethna J.
50 Mgmt of Auro Foods Ltd v S Rajulu AIR 2008 SC (supp) 1885, per HS Bedi J.
51 MD, Orissa Agro Ind. Corpn v B Maharana 1990 Lab IC 1531, 1537 (Orr) (DB), per V Gopalaswamy J.
52 Himachal Road Transport Corpn v PO, LC 1981 Lab IC 356, 359 (HP), per Gupta J.
53 Baldev Singh v PO, LC 1987 Lab IC 22, 24 (SC), per Ray J.
54 Scooter India Ltd v LC 1989 Lab IC 1043 (SC).
55 Balwant Singh v New Sutlej Transport Co Pvt Ltd (1989) 2 LLJ 217, 219 (P&H), per Sodhi J.
56 AA Fernandes v Modern Mills Ltd (1990) 1 LLJ 538, 540 (Bom) (DB).
57 BV Rao v Chittivalsa Jute Mills (1990) 1 LLJ 513, 522 (AP) (DB), per Jeevan Reddy J.
58 Sri Gopalakrishna Mills Pvt Ltd v LC (1980) 1 LLJ 425 [LNIND 1980 MAD 11] (Mad) (DB), per Ramanujam J.
59 Sri Ganesar Aluminium Factory v IT 1983 Lab IC 288, 290 (Mad) (DB), per V Ramaswami J.
60 Andhra Pradesh SRTC v Addl LC-cum-IT (1984) 1 LLJ 128, 132 (AP), per Ramachandra Rao J.
61 Rama Kant Misra v State of Uttar Pradesh 1982 Lab IC 1790 [LNIND 1982 SC 149], 1792 (SC).
62 Hindustan Machine Tools Ltd v Mohd Usman (1983) 2 LLJ 386 [LNIND 1983 SC 218] (SC).
63 Jaswant Singh v Pepsu Roadways Transport Corpn 1984 Lab IC 7 [LNIND 1983 SC 259] (SC).
64 Vasanti M Shah v All India HFMCS Society Ltd (1986) 1 LLJ 69, 76 (Guj) (DB), per Majmudar J.
65 Orissa Agro Indl Corpn v Bhimsen Maharana (1992) LLJ 23, 29 (Ori) (DB), per V Gopalaswamy J.
66 Mgmt of Bangalore MCECS Ltd v EV Raju (1987) 1 LLJ 22, 27 (Kant), per Bopanna J.
67 Indian Cork Mills Pvt Ltd v P Unnikrishnan 1989 Lab IC 1389 -90 (Bom), per Daud J.
68 National Textile Corpn Ltd v Sayar 1994 Lab IC 2492 -93 (SC).

End of Document

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER IV Procedure, Powers and Duties of Authorities

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER IV Procedure, Powers and Duties of Authorities

S. 12. Duties of Conciliation Officers.—

(1) Where any industrial dispute exists or is apprehended, the conciliation officer may, or where the dispute relates to
a public utility service and a notice under section 22 has been given, shall, hold conciliation proceedings in the
prescribed manner.
(2) The conciliation officer shall, for the purpose of bringing about a settlement of the dispute without delay
investigate the dispute and all matters affecting the merits and the right settlement thereof and may do all such
things as he thinks fit for the purpose of inducing the parties to come to fair and amicable settlement of the
dispute.
(3) If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the conciliation
proceedings the conciliation officer shall send a report thereof to the appropriate Government 69[or an officer
authorised in this behalf by the appropriate Government] together with a memorandum of the settlement signed
by the parties to the dispute.
(4) If no such settlement is arrived at, the conciliation officer shall, as soon as practicable after the close of the
investigation, send to the appropriate Government a full report setting forth the steps taken by him for
ascertaining the facts and circumstances, relating to the dispute and for bringing about a settlement thereof,
together with a full statement of such facts and circumstances, and the reasons on account of which, in his
opinion, a settlement could not be arrived at.
(5) If, on a consideration of the report referred to in sub-section (4), the appropriate Government is satisfied that
there is a case for reference to a Board, 70[Labour Court, Tribunal or National Tribunal], it may make such
reference. Where the appropriate Government does not make such a reference it shall record and communicate to
the parties concerned its reasons therefor.
(6) A report under this section shall be submitted within fourteen days of the commencement of the conciliation
proceedings or within such shorter period as may be fixed by the appropriate Government:

71[Provided that, 72[subject to the approval of the conciliation officer,] the time for the submission of the
report may be extended by such period as may be agreed upon in writing by all the parties to the dispute.]

LEGISLATION

This section was enacted in the original Industrial Disputes Act 1947. The subsequent amendments have been indicated in
the foot-notes to the body of the section. No doubt, sub-ss (1) to (4) and sub-s (6) deal with the duties of conciliation
officers, but sub-s (5) does not at all refer to the duties of the conciliation officers. Instead it deals with the discretionary
power of the appropriate Government to make or to refuse to make an order of reference. This sub-section further deals
with the duty cast on the Government to record and communicate its reasons in case it refuses to make a reference. The
proviso to sub-s (6) again does not refer to the duties of the conciliation officers but deals with the appropriate
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Government’s power to extend the time for submission of the report of conciliation proceedings.

SUB-SECTION (1):

(i) Holding Conciliation Proceedings

Sub-section (1) requires a conciliation officer to hold conciliation proceedings in the prescribed manner where an industrial
dispute exists or is apprehended, and it makes a clear distinction between disputes relating to non-public utility services
and public utility services; in case of non-public utility service concerns, discretion is vested in the conciliation officer
whether or not to hold conciliation proceedings, whereas in disputes relating to public utility service concerns, conciliation
is mandatory.73 The Bombay High Court in East Asiatic, took the view that since the law confers discretion upon the
conciliation officer whether he should enter upon conciliation or not, he should satisfy himself by all means available to
him about the propriety of undertaking conciliation and, in doing so, if the conciliation officer embarks upon a preliminary
inquiry, in the course of which he holds discussions with the representatives of the parties and even conveys proposals
made by one of the parties to the other, such steps cannot be regarded as a part of conciliation proceedings.74 In Suresh
Vithoo Nare, it was held that mere issuance of a notice by a conciliation officer showing his intention that he may institute
conciliation proceedings would not amount to institution of proceedings.75 The Orissa High Court in Pratap Chandra
Mohanty, expressed the view that the conciliation officer explores the possibility of a settlement by asking the parties for
joint deliberations and such exploration is a preliminary inquiry to the actual conciliation proceedings.76 This is not the
correct view of law. Rule 10 of the Industrial Disputes (Central) Rules 1957, lays down that where the conciliation officer
receives information about an existing or apprehended ‘industrial dispute’, which does not relate to a public utility service
and he considers it necessary to intervene in the dispute, he shall give formal intimation in writing to the parties concerned
declaring his intention to commence conciliation proceedings with effect from such a date as may be specified therein.
Section 2(e) defines ‘conciliation proceedings’ to mean ‘any proceedings held by a conciliation officer...under this Act’.
There is no provision either in the Act or in the Rules providing for holding any preliminary inquiry to enter upon the
conciliation proceedings. If the parties attend ‘any proceedings’ held by a conciliation officer, in compliance with the
notice served by him, such proceedings must necessarily be ‘conciliation proceedings’. The concept of a preliminary
inquiry into conciliation proceedings’ is foreign to the statute.

A single judge of the Orissa High Court held that the conciliation officer can and should start conciliation proceedings as
soon as he gets any information from any source about the existence or apprehension of an industrial dispute. There is
nothing in the Act to show that the conciliation proceedings can be initiated by the conciliation officer only when he is
formally moved by any of the parties. He has the jurisdiction to initiate conciliation proceedings as soon as he finds on
some material or information before him that an industrial dispute exists or is apprehended.77 Under this sub-section, either
upon receiving a complaint from one of the parties or suo motu, where any industrial dispute exists or is apprehended, a
conciliation officer may commence conciliation proceedings in a non-public utility service. In the course of a conciliation
proceeding, the conciliation officer has to get the employer and the representative of the workmen together and investigate
the dispute and for that purpose do all such things, as he thinks fit, with a view to induce the parties to arrive at a fair
settlement of the dispute.78He has to act without delay. For this purpose, he is empowered to enforce attendance of any
person for examining him and also to inspect any document which he deems necessary to inspect. The jurisdiction of the
conciliation officer does not extend only to resolution of the disputes which are brought before him by the parties, but at
least in certain cases it is possible that a dispute is raised about something and the final settlement requires solution of
other disputes as well. For instance, the workmen may demand wage increase and go on strike and during the strike the
management may take disciplinary action against some of the activists for intimidation of loyal workers, the dispute may
ultimately be resolved only if the management agrees at the conciliation talks to drop the disciplinary proceedings. In such
a situation, the conciliation officer would not be incompetent to counter-sign the final settlement embodying the
withdrawal of the disciplinary proceedings. There is no manner prescribed for raising an industrial dispute and bringing it
into existence. Fresh disputes are apt to arise during the conciliation proceedings of another dispute. A conciliation officer,
therefore, is certainly competent to deal with all disputes brought to his notice whether existing at the commencement of
the conciliation proceedings or cropping up during the pendency of such proceedings.79 It is his duty to see that a
settlement which, in his opinion, is a right settlement is amicably arrived at between the parties. After such a settlement is
arrived at, he has to make a report to the Government accordingly and also forward along with it a memorandum of the
settlement duly signed by the parties, ie, the representatives of the workmen and the representatives of the employer.80

The functions of conciliation officers are only conciliatory and not adjudicatory. The main task of the conciliation officer is
to go from one camp to another and find out the greatest common measure of agreement, which certainly cannot be
achieved, if the nature of his duties were judicial.81 ‘Even though a conciliation officer is not competent to adjudicate upon
the disputes between the management and its workmen, he is expected to assist them to arrive at a fair and just settlement.
He is to play the role of an adviser and a friend of both the parties and should see that neither party takes undue advantage
of the situation’.82 Form H of the Central Rules shows that the conciliation officer has also to sign the memorandum of

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settlement, evidencing that the settlement has been reached in the course of conciliation proceedings. It is, however, not the
duty of the conciliation officer that he must investigate into the dispute even when the persons who raised the dispute are
not present to substantiate as to what the dispute is. If the parties raising the dispute are not interested to get a settlement, it
is not the duty of the conciliation officer to try to resolve the dispute in the absence of the persons raising the dispute. It is
the duty of the persons raising the dispute to assist the conciliation officer regarding facts of the dispute and how the same
can be possibly resolved. Rule 9 of the Central Rules envisages that the conciliation officer on receipt of the notice of
strike shall forthwith arrange to interview both the employer and the workmen concerned at a given place and time as he
may deem fit. If on calling the workmen who raised the dispute, the conciliation officer finds that the concerned workmen
have failed to appear, there is no duty cast upon him to go ahead with the matter.83 A union which is not the bargaining
agent, cannot be allowed to join the pending conciliation proceedings. In Indian Aluminum Co, in a tripartite settlement for
holding referendum for determination of ‘bargaining agent’ for workers, it was agreed that a union securing less than 20
per cent votes in the referendum, shall not be entitled to be a bargaining agent. In view of this settlement, a single judge of
the Kerala High Court held that the union which has not secured 20 per cent votes in the referendum, had no right to
represent the workmen in the conciliation proceedings. The union, therefore, could not be a party to the dispute in respect
of which conciliation proceedings were pending.84

(ii) Industrial Dispute Exists or is Apprehended

Before a conciliation officer can embark upon conciliation proceedings, there must be:

(a) an industrial dispute within the meaning of s 2(k) of the Industrial Disputes Act; and

(b) such dispute must be either existing or apprehended.

The conciliation officer can take up the matter for conciliation not only when there is an ‘existing’ dispute but also when
such dispute is ‘apprehended’.85But the ‘existing’ or ‘apprehended’ dispute must be an -industrial dispute as defined in s
2(k) of the Industrial Disputes Act. A dispute which is not between the employers and employers, employers and
workmen, or workmen and workmen, will not be an industrial dispute. Furthermore, a dispute even between such parties
will not be an industrial dispute unless it is connected with the employment, non-employment, terms of employment or
conditions of labour of any person. Any conciliation proceedings in a dispute which is not a dispute or difference
connected with the employment or non-employment, terms of employment or conditions of labour of any person will not
be conciliation proceedings for the purposes of this section.86 An industrial dispute can come into existence when one party
has made a demand on the other and the other party has rejected the same. Even the employer can approach a conciliation
officer if there is a disagreement between the management and the workman on certain vital matters. But mere placement
of charter of demands on the management does not create an apprehended or existing industrial dispute. A demand
partakes the character of an ‘industrial dispute’ when it is rejected by the management either directly or before the
conciliation officer. In exercise of his jurisdiction under s 12(1) to initiate ‘conciliation proceedings’, the conciliation
officer has not been conferred by s 11 (1) the power to follow such procedure as he may think fit. He has, therefore, to
confine himself to the procedure indicated by s 12 or prescribed by the relevant Rules.87

(iii) Conciliation Proceedings in Non-public Utility Service

The use of the word ‘may’ in s 12(1) referring to ‘industrial dispute’ in non-public utility service concerns makes it
abundantly clear that the legislature has invested the conciliation officer with the discretion whether to enter upon
conciliation in regard to such disputes or not. Such discretion cannot, however, be exercised in an arbitrary or capricious
manner. In a case where any existing or apprehended industrial dispute relates to a public utility service is there, it is
mandatory for the conciliation officer to hold conciliation proceedings where notice under s 22 has been given.88 Where
the conciliation officer refused to initiate conciliation proceedings on the ground that there was no industrial dispute
existing or apprehended, he cannot be compelled to hold such proceedings as the Act confers a discretion on the
conciliation officer to decide whether to hold such proceedings or not.89

(iv) Conciliation Proceedings in Public Utility Service

It is incumbent upon a conciliation officer to enter upon conciliation proceedings if:

(a) the concern to which the dispute relates is a public utility service within the meanings of s 2(n) ; and

(b) a notice under s 22 of the Act has been given.

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From the text of the section, it appears that both these conditions are cumulative for making it compulsory for the
conciliation officer to hold proceedings. But if the notice under s 22 is not given, it is in the discretion of the conciliation
officer to initiate conciliation proceedings. In Jaslok Hospital, the industrial tribunal held that the conciliation proceedings
are mandatory only when the dispute relates to a public utility service and notice under s 22 has been given. In other
words, s 12(1) requires that, before holding the conciliation proceedings, both the conditions must be satisfied. But a single
judge of the Bombay High Court held that this view was not correct as ‘though the expression ‘and’ is used after the words
‘where the dispute relates to a public utility service’, the said expression must be read as ‘or’.90 But this holding is not
supported by any reasoning. It is not correct law. From the language of s 12(1), s 22 and r 9 of the Industrial Disputes
(Central) Rules 1957, it is unequivocally clear that the holding of the conciliation proceedings in a public utility service is
mandatory only where a notice under s 22 has been given. Otherwise, it is discretionary.

‘In the Prescribed Manner’:

The Central and state Government have made Rules prescribing the procedure for conciliation proceedings. Rules 9 to 12
of the Industrial Disputes (Central) Rules 1957 are the relevant Rules prescribing the procedure for conciliation
proceedings under the Act with respect to the industries in relation to which the Central Government is the ‘appropriate
Government’.

(v) Functions of Conciliation Officer not Judicial or Quasi-judicial

A conciliation officer is not an adjudicatory authority under the Act,91 nor is he a ‘court’ within the meaning of s 195(1)(c)
of the Code of Criminal Procedure.92 He is not invested with the powers to adjudicate on industrial disputes.93 No doubt
there are opposing parties and various points at issue between them before him, but the conciliation officer is not
competent to hear and decide any of them; all that he can do is to try to persuade the parties to come to a fair and amicable
settlement.94 Although a conciliation officer has wide powers to exercise his resourcefulness and power of persuasion to
try to induce and persuade the parties to come to a fair and amicable settlement, he is not competent to decide the various
points in issue between the opposing parties.95 In other words, his duties are only administrative,96 and are purely
incidental to industrial adjudication.97 His function under s 12 advisedly is not of judicial or quasi-judicial nature, for if it
were so, then in connection with everything he does, the formalities of a judicial trial would have to be observed.1 Unless,
therefore, a conciliation officer has committed some error of law in refusing to take up a dispute for conciliation, his action
cannot be interfered with in writ proceedings. Thus, where the conciliation officer, after satisfying himself that the action
of the management in regard to promotions was bona fide, refused to take up the dispute for conciliation, his order could
not be interfered with by the High Court in writ proceedings. 2

SUB-SECTION (2): EXPEDITIOUS INVESTIGATION OF DISPUTES

Sub-section (2) casts a duty on a conciliation officer to investigate disputes expeditiously and empowers him to do all such
things as he thinks fit for the purpose of inducing the parties to arrive at a fair and amicable settlement.3 The first part of
the sub-section is mandatory on its construction while the second part is merely directory. The first part requires the
conciliation officer, for the purpose of bringing about settlement of the dispute, to investigate the dispute and all matters
affecting the merits and the right settlement thereof, without delay while the second part gives the discretion to him to do
all such things as he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement of the
dispute.4 He is required to do all necessary things as he thinks fit for the purpose of inducing the parties to come to a fair
and amicable settlement of the dispute. If a settlement of the dispute or any of the matters in dispute is arrived at in
accordance with the conciliation proceedings, the conciliation officer shall send a report thereof to the appropriate
Government or an officer authorised in that behalf by the appropriate Government together with a Memorandum of
Settlement signed by the parties. In the words of Venkatramiah J:

Even though a conciliation officer is incompetent to adjudicate upon the dispute between the management and its workmen, he is
expected to assist them to arrive at a fair and just settlement. He is to play the role of an adviser and friend of both the parties and
should see that neither party takes undue advantage of the situation’.5

The Act does not provide any machinery to verify the membership of association. Therefore, the correct way of calculating
membership is by check-off and by form E returns given by the members under the Trade Unions Act. For this purpose,
the conciliation officer can call for records under check-off system and find out the majority union on the basis of form E
returns filed by each of the union but the expression ‘may do all such things as he thinks fit’ cannot be given wide
interpretation as to include power to verify physically the membership of the association to find out which of the unions
operating in a particular establishment has got the majority character.6 It is, therefore, the duty of the conciliation officer to
satisfy himself that amicable settlement reached between the parties is a fair settlement.7 The main task of the conciliation

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officer, therefore, is to go from one camp to the other and find out the greatest common measure of agreement.8A
conciliation officer has to do a variety of things in the course of investigation for the conclusion of conciliation
proceedings. His first duty for the purpose of bringing about a settlement is to act expeditiously without loss of time. When
the conciliation officer decides to act, he has to find out what the dispute between the parties is. This has to be done by
ascertaining from the parties to the dispute what their contentions are. The next function, that he has to discharge, is to
further ascertain the merits and the right to settlement. The last important duty that he has to discharge is that of inducing
the parties to come to a fair and amicable settlement of the dispute.9In effecting a settlement, the conciliation officer has
always to take into account the conflicting claims between the employer on the one hand and the employees on the other
and the view of the different groups of workers as well as all those relevant factors which would lead to the well-being of
the industry, and a satisfactory settlement of the disputes. This necessarily means that adequate consideration must be
given to the demands and viewpoints of the majority of workers. The scheme of the Act is that it reposes confidence in the
conciliation officer in these matters.10 But where a union is not a party to a dispute, the conciliation officer is not obliged to
persuade such a union to participate in the proceedings or to come to a fair and amicable settlement of the dispute raised by
the other unions against the management.11

The mere presence of a minister of the Government in the conciliation proceedings does not vitiate such proceedings in
which the conciliation officer does not abdicate his functions and duties as such officer, but takes such active part as is
required under this provision by way of investigation of the dispute, examination of all matters involving right settlement
of the dispute, and doing all such things as he may think fit for inducing the parties to come to a fair settlement thereof. In
such a case, even absence of the conciliation officer from some meetings in relation to the demands in question, would not
alter the character of conciliation proceedings.12 The power of the conciliation officer is, however, only to promote the
settlement. His power is not adjudicatory. He is not competent to decide finally the various points at issue between the
opposing parties. All that he can do is to try to persuade the parties to agree upon a fair and reasonable settlement. Thus a
special responsibility is placed on the conciliation officer to see that the settlement arrived at is fair and reasonable and he
has to satisfy himself that it is so and then give his concurrence accordingly. The reason is that a settlement arrived at in
the course of conciliation proceedings has a far-reaching binding effect than a settlement arrived at otherwise than in the
course of conciliation proceedings.13

SUB-SECTION (3): SETTLEMENT IN THE COURSE OF CONCILIATION PROCEEDINGS

Sub-section (3) makes it obligatory upon the conciliation officer to send a report to the ‘appropriate Government’, in case a
settlement of industrial dispute is arrived at in the course of conciliation proceedings before him, together with a
memorandum of settlement signed by the parties to the dispute.14 Such reports must be accompanied by a memorandum of
the settlement signed by the parties to the dispute. Rule 58 of the Industrial Disputes (Central) Rules 1957 deals with the
requirements of a memorandum of settlement. Sub-rule (1) prescribes that the memorandum of settlement shall be in form
H, whereas sub-r (2) prescribes the mode and manner of signing the settlement and sub-r (3) enjoins upon the conciliation
officer to send to the Central Government, the report of the settlement together with a copy of the memorandum of
settlement signed by the parties to the dispute.15 The Punjab and Haryana High Court in Punjab Kesri held that a
settlement which complies with all the ingredients of form H even though not formally written on form H, is a valid
settlement in the eyes of law. This provision requires that, though a copy of the memorandum of settlement is to be sent to
the Government, the said copy is to be duly signed by the parties to the dispute.16 The Madras High Court in Natarajan
Engg, had to deal with the question as to whether the signatures on the memorandum on true construction of s 12, should
be only of the parties to the dispute. A corollary to this was whether r 25(2) of the Madras Rules which corresponds with r
58 of the Central Rules was ultra vires s 12 ? But the court left this question undecided because the case was decided
against the employer on the ground of estoppel in view of his conduct in having altered the position and rights of the
parties.17 A single judge of the Delhi High Court in Krishna Gold, held that though a duty is cast on the conciliation officer
to send the report to the ‘appropriate Government’ or authorised officer together with the signed memorandum of
settlement, failure to perform this duty to dispatch the signed copy of the report cannot invalidate the settlement.18

The word ‘report’ must derive its meaning from the context in which it is used. When there is a settlement, a detailed
report may not be necessary since the dispute in the ordinary course is amicably settled. Even the absence of a report under
this section would not vitiate the settlement.19 An agreement entered into between a majority union and the management
can be validly certified and converted into a conciliation settlement by the conciliation officer provided it is fair and
reasonable. It is, however, the duty of the conciliation officer to ascertain that the union which has entered into an
agreement is a majority union and commands support of the majority of the workers in the establishment and that the
agreement is fair and reasonable, when such an agreement is presented before him in the prescribed form. On such
satisfaction, the conciliation officer is bound to certify that the agreement is a conciliation settlement so as to be binding on
the parties to the dispute and also the persons who were not party to the dispute.20 There is nothing in the Act which makes
it obligatory on a conciliation officer to issue notice to any party before a settlement is signed under s 12(3) of the Act
between the management and the workman. Nor is the conciliation officer obliged to hear the union which raised the

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dispute before certifying the settlement reached between the management and the recognised union. The fact that the
conciliation officer has sent a failure report to the Government because of the stand taken by the employer that he is
negotiating with the recognised union for settlement, would not bar a settlement being entered into between the
management and the recognised union with the assistance of another conciliation officer.21 Such a settlement cannot be
said to be vitiated.

There is no provision either in the Act or under the Rules framed under the Act obliging a conciliation officer to counter-
sign only those settlements where the consenting union officials represent a majority. Any settlement made with a minority
union will bind all the workmen of the establishment when it is counter-signed by the conciliation officer, unless it is
established that the dispute related to some special section of workmen with a special kind of demand and that the
consenting parties were in no way representatives of such workmen. It is only a collusive settlement designed to defeat
certain kinds of claims entered into by those who could not speak for even a small section of the workmen interested, could
be an exception to the rule.22 A settlement once arrived at in the course of conciliation proceedings cannot subsequently be
nullified by any party to it unilaterally. In Tiruchirapalli HCBE Union, the facts were: certain settlements were arrived at
in the course of conciliation proceedings in connection with wage structure of the employees in co-operative societies. In
the settlement, the co-operative societies were represented by their office-bearers of the elected bodies who were in charge
of the management of the societies. Subsequently, in place of the elected bodies, special officers were appointed.
Thereupon, the registrar of the co-operative societies issued a circular purporting to nullify the settlement and directed the
special officers to ignore the settlement. The Madras High Court in writ proceedings held that the circular of the registrar
of co-operative societies is incompetent and without jurisdiction.23 In Steel Authority of India, the facts disclosed that a
settlement was arrived at under s 12(3) between the management and the union. Clause 8.9.4 of the settlement provided
that “in case of death due to accident arising out of and in course of employment, employment to one of his/her direct
dependents will be provided.” It was contended that the death of an employee arose out of and in the course of
employment, whereas the post-mortem report did not disclose that it was a natural death. The dependents of the deceased
employee claimed appointment on compassionate grounds in terms of the aforesaid settlement. A writ petition filed by
them was dismissed by a single judge of the Jharkhand High Court, but allowed by the Division Bench. Quashing the order
of the Division Bench, Sinha J (for self and Joseph J) of the Supreme Court observed:

Public employment is considered to be a wealth. It in terms of the constitutional scheme cannot be given on descent. When such an
exception has been carved out by this Court, the same must be strictly complied with. Appointment on compassionate ground is
given only for meeting the immediate hardship which is faced by the family by reason of the death of the bread earner. When an
appointment is made on compassionate ground, it should be kept confined only to the purpose it seeks to achieve, the idea being
not to provide for endless compassion.. .. It was, thus, not held that the death occurred due to an accident. It was not even the case
of respondent. What would constitute ‘an accident arising out of and in the course of employment’ has not been defined. Evidently,
the said phraseology has been borrowed from the provisions of the Workmen’s Compensation Act.24

On the issue of compassionate appointments, Sinha J (for self and Bedi J) cited the earlier decision of the Court in Umesh
Kumar Nagpal,25 and observed:

.. . compassionate employment cannot be granted after a lapse of a reasonable period which must be specified in the rules. The
consideration for such employment is not a vested right which can be exercised at any time in future. The object being to enable
the family to get over the financial crisis which it faces at the time of the death of the sole breadwinner, the compassionate
employment cannot be claimed and offered whatever the lapse of time and after the crisis is over. What should be a reasonable
period would depend upon the rules operating in the field. (para 19). .. For the reasons aforementioned, the impugned judgment
cannot be sustained which is set aside accordingly. The appeal is allowed. Respondent is hereby directed to offer appointment to
the appellant on a suitable post within eight weeks from date.26 (para 20).

In Karnataka Power Corporation, respondent was working in the corporation as a nominal muster roll workman with the
appellant-corporation. On 29 January 1979 a settlement was arrived at under s 12(3) between the corporation and the
union, clause 4 of which read thus:

Casual Labour - Casual workmen who have worked for a period of not less than 240 days during a period of 12 calendar months
are agreed to be brought on monthly establishment from the first of the following month effective from 1-10-1978, subject to
availability of vacancies. The surplus workmen, if any, will be kept on the waiting list and appointed as and when vacancies occur.
In the case of workmen who are not provided with work during monsoon period, the number of days worked in two consecutive
seasons will be counted to determine their eligibility.

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The facts disclosed that the respondent did not report for duty from February 1979, but sent a few letters on and off
seeking employment as a mason. After a lapse of some 18 years, he filed a writ petition seeking directions to the
corporation to absorb him for regular service. Both the single judge and Division Bench of the Karnataka High Court
ordered in favour of the respondent-workman. Quashing the orders of the High Court, Pasayat J (for self and Chatterjee J)
of the Supreme Court relied on several decisions of the court including KV Raja Lakshmiah,27 RN Bose,28 and P
Samantaray,29 and held that: (i) representations would not be adequate explanation to take care of delay, and if the
Government had turned down one representation, the making of another representation on similar lines would not explain
the delay; (ii) no relief could be given to the petitioner who without any reasonable explanation approaches the Court
under Article 32 after inordinate delay, and that it could not be the intention of the Constitution makers that the Supreme
Court should disregard all principles and grant relief in petitions filed after inordinate delay. Most importantly, the learned
judge further observed that the question, whether the relevant clause in the settlement can be applied for providing
appointment to the respondent, could not be adjudicated in a writ petition.30

SUB-SECTION (4): REPORTING FAILURE OF CONCILIATION PROCEEDINGS

‘Failure Report’- Sub-section (4) requires the conciliation officer, as soon as practicable, to submit the ‘failure report’ to
the appropriate Government, in case the conciliation proceedings do not end in a settlement. This requirement is
mandatory, where the conciliation proceedings have taken place. But, when the conciliation proceedings have not taken
place, the question of sending the failure report would not arise.31 The scope of the report contemplated by this section is
different from that of the report of the settlement under sub-s (3). The report under this section should set forth:

(i) the steps taken by the conciliation officer for ascertaining the facts and circumstances relating to the dispute;
(ii) the steps taken by the conciliation officer to bring about a settlement of the dispute;

(iii) a full statement of the facts and circumstances relating to the dispute and steps taken by the conciliation officer to bring
about its settlement; and
(iv) the reason on account of which a settlement could not be arrived at.

The word ‘full report’ must derive its meaning from the context in which it is used. The section requires a ‘full report’
when there is no settlement.32 The failure report under s 12(4) is a very important document. It is one of the most important
materials to be considered by the appropriate Government for considering the questions, whether there is a case for
reference and whether it is expedient to make a reference or not. The object requiring the conciliation officer to make such
a full and detailed report of all the relevant facts and circumstances including the reasons for failure of conciliation is to
enable the Government to be in possession of all facts for deciding as to what course it should adopt under s 12(5) in
making or refusing to make a reference.33 In case of failure of the conciliation proceedings, the conciliation officer is
required to submit the failure report ‘as soon as practicable after the close of the investigation’, stating therein the steps
taken by him for ascertaining the facts and circumstances relating to the dispute and for bringing about a settlement thereof
together with full statement of such facts and circumstances and the reasons on account of which, in his opinion, the
settlement could be arrived at. Though this sub-section does not provide any specific period of time for submission of the
failure report, sub-s (6) provides that the report under s 12 shall be submitted by the conciliation officer within 14 days of
the commencement of the conciliation proceedings and within such further period as may be fixed by the appropriate
Government. The proviso to the section, however, provides that this period may be extended by agreement of all the
parties to the dispute in writing and the approval of the conciliation officer. A single judge of the AP High Court in Praga
Tools, held that even after having reported failure under this provision, a conciliation officer does not become functus
officio and can hold conciliation proceedings again notwithstanding the submission of failure report. The court observed:

.. . if, after submission of the report to the government, the parties approach him or if he feels that the parties are in a mood to
relent or reconcile, it would be perfectly open to him to initiate fresh conciliation proceedings for bringing about a settlement of the
dispute between the parties’.. .. this court’s attention had not been invited to any provision in the Act or to any decision on the
point. In case of failure of conciliation proceedings, such proceedings, according to s 20(2), are deemed to have been concluded on
the day when the failure report is received by the appropriate government.. .. after the conclusion of the conciliation proceedings, if
the parties again approach the conciliation officer, he can commence conciliation proceedings afresh for bringing about a
settlement of the dispute.34

This may be correct as long as the dispute has not been referred to adjudication by the Government. But when the
Government has referred the dispute to adjudication, even if the conciliation proceedings are pending before a conciliation

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officer, they are deemed to have been concluded under cl (c) of sub-s (2) of s 20. Hence, after the reference of the dispute
to adjudication, a conciliation officer cannot commence conciliation proceedings whether he has to commence such
proceedings for the first time or after submitting the failure report. If conciliation proceedings after the reference of the
dispute for adjudication were permissible, it would lead to a conflict between the award resulting from the adjudication and
the settlement arrived at, in the course of conciliation proceedings, both of which are binding under s 18(3) of the Act.
Where the conciliation officer declined to admit the dispute raised by the union in conciliation on the ground that there was
a subsisting settlement between the parties, that the award of the tribunal stipulating a 48 hour week was confirmed right
up to the Supreme Court, the Bombay High Court held that the conciliation officer had no jurisdiction to determine the
merits of the demands of the union while declining to admit the dispute in conciliation.35 When an employee raises an
industrial dispute against the termination of his services, saying that he was performing only clerical duties
notwithstanding the designation of ‘Manager’, it is not open to the labour officer to refuse to close the proceedings and to
submit his failure report to the Government on the ground that the said employee was not a workman. In such a case, the
order passed by the labour officer is quashed and the Government is directed to refer the dispute for adjudication under s
10.36 Where the subject-matter of the dispute has already been settled and the workmen have enjoyed benefits under the
settlement, the conciliation officer has the discretionary power to refuse to take up the dispute for conciliation and to
submit a failure report under s 12(4).37 In Ramesh, the facts briefly were: the services of a few employees were terminated
by the management. When the employees protested, the management promised to give them alternative employment in
another plant owned by them, which promise was apparently not kept up. In addition, there were other contentions, claims
and rival claims too. The conciliation officer accepted the case of management that the said employees were designated as
Managers (Technical), etc., and, on that basis, the Conciliation Officer has prima facie decided that the petitioners could
not be treated as workmen. On this view of the matter, he held that the conciliation proceedings could not be continued
further, and no failure report was sent to the Government either. Quashing the order, a single judge of the Madras High
Court held that the conciliation officer exceeded his jurisdiction in determining whether the employees were workmen or
not, which could only be decided in an adjudication proceeding, and directed the conciliation officer to send a failure
report under s 12(2) (sic).38

SUB-SECTION (5)

(i) Making or Refusing to Make a Reference

Sub-section (5) of s 12 contains a dimorphism of power, viz, power to make a reference and the power to refuse to make a
reference. The first part of the dimorphism which speaks of the power of the appropriate Government to make a reference
lays down that if on a consideration of the report under sub-s (4), the appropriate Government is satisfied that there is a
case for reference, it may make such reference. The first part of the sub-section has however, to be read as part of sub-s (1)
of s 10, which empowers the appropriate Government to make a reference of the dispute. The combined effect of these
provisions is that ordinarily the question of making a reference would arise after conciliation proceedings have been gone
through and the conciliation officer has made a failure report.39However, the expression at ‘any time’ in sub-s (1) of s 10
signifies that the Government does not have to wait until the failure report has been made. It can decide to refer the dispute
even if conciliation proceedings had not yet begun or were still pending. There is nothing in s 10(1) to indicate that the
Government has to wait for the conciliation officer’s report for exercising the power to refer a dispute because the
jurisdiction of the Government to make a reference under s 10(1) is independent of the procedure laid down in s 12(5) of
the Act.40 Either on being satisfied after the consideration of the failure report that there is a case for reference, or
otherwise, where the appropriate Government is of opinion that an industrial dispute exists or is apprehended, it may at any
time refer the dispute. In case the Government decides to make a reference, it has to act under s 10(1), for that is the only
provision which empowers the Government to make reference.41 In other words, the appropriate Government has the
power under s 10(1) to refer a dispute as soon as it forms the opinion that there is an existing or apprehended industrial
dispute. This does not mean that the Government is bound to make the reference. The Government has been given an
important voice in the matter of permitting industrial disputes to seek adjudication by reference to industrial tribunals,
because ‘it is not every case where parties allege the existence of an industrial dispute that a reference can be made’.42 In
UTI Cycles, the Supreme Court observed:

The government has to weigh the facts keeping in mind the objective of industrial peace and smooth industrial relations between
the parties. If, taking into consideration all the facts, the government finds that in the interest of industrial peace, it is not necessary
to make the reference, it may not do so.43

In Alekh Bihari, Pasayat Acting CJ of the Orissa High Court held that it was open to the state Government to take broad
features into considerations while exercising jurisdiction under s 10(1) of the Act. When the appropriate Government
considers the question as to whether a reference should be made under s 12(5), it has to act under s 10(1) of the Act, and s
10(1) confers discretion on the appropriate Government either to refer the dispute or not to refer it for adjudication

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according as it is of the opinion that it is expedient to do so or not.44 Refusal by the Government to refer a dispute raised by
a workmen against his not being appointed as a physiotherapist was valid as the workman concerned did not possess the
requisite qualifications and was overaged.45 Where the Government refused to refer a dispute raised by the workman
against the transfer order passed by the management on the ground that transfer is a management prerogative, the Gauhati
High Court held that such refusal was not open to challenge.46 In Pix Transmissions, the facts disclosed that subsequent to
the submission of failure report by the conciliation officer to the Government under s 12(4), the parties arrived at a
settlement at the bipartite level and filed the same with the Government with a request not to refer the matter for
adjudication. Despite this request, the Government referred the dispute for adjudication. A single judge of the Bombay
High Court, while quashing the order of reference, held that the Government had not addressed itself to the crucial aspect,
namely, whether there was any subsisting industrial dispute at the relevant time, and directed the Government to re-
examine the matter in the light of the settlement arrived at between the parties after the submission of failure report.47
While exercising power under s 12(5), the appropriate Government cannot go into the merits of the industrial dispute and if
it finds that the industrial dispute has arisen, then such dispute needs to be referred for adjudication.48 Where a dismissed
workman, having moved a writ petition in the High Court which was dismissed on merits, raised an industrial dispute and
the Government refused under s 12(5) to make a reference of the said dispute, it was held that the refusal by the
Government was in order, and that it was not open to the workman, he having lost the case in the High Court on merits, to
agitate the matter before another forum.49 In Dhenkenal Mehantar Sangha, the union submitted 18 demands and on the
receipt of the failure report from the conciliation officer, the Government referred 15 demands for adjudication, while
leaving out 3 of them. Further, the Government did not communicate any reasons for refusing to refer the said 3 demands.
A single judge of the Orissa High Court while, directing the Government to take a fresh decision, observed the three
disputes refused to be referred were covered by Item 6 of second schedule.50

In other words, the Government has to take into account the question of expediency of making a reference in the facts and
circumstances of a case. However, when the ‘appropriate Government’ declines to make a reference, the second part of the
dimorphism comes into play, ie, compliance of the requirements of sub-s (5) of s 12 also becomes relevant and necessary.
The discretion not to make reference can be exercised only if (a) there is no existing or apprehended dispute; or (b) it is
inexpedient to make a reference in the circumstances of the case.51 Even if the Government comes to the conclusion that a
prima facie case for reference has been made out, it would still be open to the Government to consider whether there are
any other relevant or material facts which would justify its refusal to make reference. The question as to whether a case for
reference has been made out or not, can be answered in the light of all the relevant circumstances, which would have a
bearing on the merits of the case as well as on the incidental question as to whether a reference should invariably be
made.52 The discretion has to be exercised in such manner that it would not exceed the limits prescribed for the sphere of
reference and enter into the territory of adjudication, the appropriate Government is only expected to decide before making
a reference as to ‘whether on a prima facie examination of the facts of the case, there is a dispute which requires a trial or
adjudication by a tribunal or court’. The Government cannot take upon itself the function of adjudication.53 For instance,
where on a prima facie examination of the dispute, the writ court found that the dispute raised by the workman was
covered by a valid settlement, it was held that the Government was justified in refusing to make the reference.54 In
Moorco, the facts were:

(a) the question whether the company is entitled to the infancy protection under s 16 of the Payment of Bonus Act was,
pursuant to a settlement reached between the parties under s 12(3), referred to the Deputy Labour Commissioner for
arbitration;
(b) the arbitrator gave his decision holding that the management was entitled to protection under s 16 of the Payment of
Bonus Act, but the said decision was neither submitted to the Government nor published under s 17 ;
(c) the union in the meantime filed a civil suit questioning the award, apart from raising an industrial dispute on the self-same
issue of bonus;
(d) the Government on receipt of the failure report from the conciliation officer referred the said dispute to the tribunal for
adjudication;
(e) the management moved the High Court for issuing a writ of mandamus directing the Deputy Labour Commissioner to
forward his decision under (b) above to the Government for publication, which writ petition was pending in the High
Court; and
(f) the management filed another writ petition challenging the reference made by the Government under (d) above.

A single judge of the Madras High Court held that the reference was bad in law in view of the fact that the question of
infancy protection was decided by the Deputy Labour Commissioner as agreed to by the parties in the course of as 12(3)
settlement, and a suit filed by the union questioning the said decision of the Deputy Commissioner of Labour is pending in

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the civil court.55 Where the facts disclosed that the salary and allowances of the workmen were revised unilaterally and
were accepted by the workmen under protest and without prejudice to their rights as indicated in their letter submitted to
the management, the refusal by the Government to refer the dispute on the ground of existence of a settlement between the
management and one of the unions or of the acceptance of the benefits arising out thereunder under protest are not good
grounds for refusing the reference, and accordingly the impugned order of the Government deserves to be quashed.56 The
first part of sub-s (5) of s 12 signifies that after forming the opinion under s 10(1), the appropriate Government ordinarily
will further take into consideration the failure report for being satisfied whether there is a case for reference or it would be
expedient to make the reference.57 The problem which the Government has to consider under s 12(5) is whether there is a
case for reference, which means that the Government must first consider whether a prima facie case for reference has been
made out on merits.58 In the name of such prima facie examination of merits to find out whether the claim is patently
frivolous or not, the Government cannot undertake detailed examination, investigation, appreciation of facts and principles
of law.59 Refusal to make a reference on the ground that the demand mentioned in the demand notice was not fit for being
referred for adjudication because the employee’s case was not proved is incompetent and bad in law.60

In Sharad Kumar, the Supreme Court held that it was wrong for the Government to have refused to refer a dispute raised
by an area sales executive on the ground that he was not a workman within the meaning of s 2(s), and it was for the labour
court or tribunal to decide the question.61Where the Government declined to refer a dispute, raised by the union against a
notice of change issued by the management under s 9A on the ground that the said change was sought to be introduced by
the management after due notice under s 9A, the Government was directed to refer the issue for adjudication. It was held
that the application of s 9A could not be held to be decisive for declining a reference under s 10 read with s 12(5) of the
Act, and that it would be appropriate for the management to establish the justification for the said change before an
adjudicatory forum before implementation.62 Where the Government refused reference on the basis of rival contentions,
namely, the employer contending that the workman resigned from service and offered to re-employ him, whereas the
workman contended that he had neither resigned nor was there any offer of reinstatement, it was held that the refusal to
refer the dispute was not legal.63 Where it was an admitted fact that the workman had worked only for 85-90 days, the
refusal by the Government to make a reference was justified and it could not be said that the Government had adjudicated
upon the controversy regarding the denial of benefit of s 25F to the workman.64 The refusal to refer a dispute relating to
termination on the ground that there was no material to show that the workman had put in 240 days of service is bad in law
as it has no power to delve into the merits of the dispute.65 Where the workers raised a dispute that they were the
employees of Indian Airlines and that they were entitled to the same wages as paid to the other employees of the Airlines,
the refusal by the Government to refer the said dispute, on the ground that they were the employees of contractors and not
of the Airlines, amounts to adjudication of the matter and is hence incompetent.66 In Ramruch Pande, the Bombay High
Court held that it was not open to the Government to go into the merits of demands and refuse to refer the dispute on the
ground that the union had not substantiated its demand, and directed the Government to make the reference.67 The order of
the Government refusing to refer a dispute raised under s 2A, on the ground that the said termination was not illegal,
amounts to adjudication of the dispute and is without jurisdiction.68 Refusal by the Government to refer a dispute relating
to termination of the service of a workman, who was given a fixed-tenure appointment for a period of 85 days, is an order
and such refusal does not amount to adjudication of the dispute.69 Refusal by the Government to make a reference of the
dispute raised by bank employees on the issue of ‘the non-granting of medical leave sans medical certificate from the
bank’s panel of doctors’, on the ground that leave cannot be claimed as a matter of right and hence it was not a fit case for
reference, does not amount to adjudication of the dispute by the Government, and the refusal is well within the power
conferred on the Government under s 10 read with s 12(5).70

In deciding the question of expediency to make the reference or not, the consideration of the Government is not confined
to the conciliation officer’s failure report under s 12(4) alone.71 It would be further open to the Government to consider
other relevant materials and facts which may not be appearing in the report but may come to its knowledge or which may
be brought to its notice.72 Whether there was an expediency or not in the matter of making a reference is to be decided on
evidence in the peculiarity of facts and circumstances of the case.73 For instance, if prima facie the claim is patently
frivolous or is clearly belated,74 or the facts are glaringly against the claim and do not require any trial or adjudication, then
it is open to the appropriate Government to take the view that the case is not a fit one for reference.75 ‘In fact, the
patentness or frivolousness of the dispute would mean that the claim is so utterly untenable that it could not stand for a
minute and that there is no arguable case and there is no case for any consideration whatsoever’.76 Where the employer
challenged the order of reference on the ground that the dispute was raised nine years after termination, it was held that the
Government could not decline reference solely on the ground of delay.77 Refusal by the Government to refer a dispute on
the ground of unexplained delay of 10 years is justified.78 Refusal by the Government to refer a dispute, raised after a lapse
of 11 years on the ground that the dispute was frivolous, is justified.79 A single judge of the Madhya Pradesh High Court
held that the refusal of a reference on the ground that there was a delay of 7 years is not justified when the workman
furnished adequate reasons explaining the delay.80

Likewise, if the impact of the claim on general relations between the employer and the employees in the region is likely to

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be adverse, the appropriate Government may take that into account in deciding whether it would be expedient to make the
reference or not.81 In Atic Employees Union, the state Government found that referring the dispute would raise a spirit of
discontentment amongst a substantial number of workmen who had already signed an undertaking and resumed work.
Referring the dispute would, therefore, amount to giving fillip to industrial unrest on the spot. In the circumstances, the
discretion of the Government refusing to make the reference was not held to be uncalled for or perverse which could be
interfered with, in judicial review.82 If a prima facie case has been made out, reference of the dispute for adjudication
cannot be refused only on the ground of expediency without considering other relevant materials. Though expediency is a
relevant circumstance to be taken into account, the fact of the rights and interests of a vast number of workmen is also a
relevant consideration to be taken into account alongwith the consideration of the question of expediency. As a matter of
fact, the consideration of the effect of the rights and interests of a vast number of workmen is itself a question of
expediency.83 In Shaw Wallace, the Madras High Court deduced the following principles for the Government to bear in
mind while deciding the question of referring or refusing to refer a dispute for adjudication:

(1) The government would normally refer the dispute for adjudication.

(2) The government may refuse to make reference, if-

(a) the claim is very stale;

(b) the claim is opposed to the provisions of the Act;

(c) the claim is inconsistent with any agreement between the parties;

(d) the claim is patently frivolous;

(e) the impact of the claim on the general relations between the employer and the employees in the region is likely to
be adverse; or
(f) the person concerned is not a workman as defined by the Act.

(3) The government should not act on irrelevant and extraneous considerations.

(4) The government should act honestly and bona fide.

(5) The government should not embark on adjudication of the dispute.

(6) The government should not refuse reference on the ground that domestic inquiry was fairly and properly held and
punishment awarded was appropriate. 84

It may be pointed out here that the question whether ‘the person concerned is or is not a workman as defined by the Act’ as
formulated in point no 2(f) above is a jurisdictional question. It is a mixed question of fact and law, on the determination of
which, will depend the jurisdiction of the tribunal. It cannot be said that the determination of such a question will not
involve adjudication. In Hira Cement, it was held that, in a case involving the termination of the contract workers by the
contractor, the Government is justified in refusing to make a reference of the dispute on the ground that there was no
employer-employee relationship between the contract labour and the principal employer, and the High Court would not
canvass the order passed under s 12(5) closely to see if there was any material before the Government to support its
conclusion, as if it was judicial or quasi-judicial determination. The law is well settled that the jurisdiction to decide about
abolition of contract labour, or to put it differently, to prohibit employment of contract labour is to be adjudicated in
accordance with s 10 of the Contract Labour Act. The ID Act has absolutely no application.85Sub-section (5) requires the
‘appropriate government’ to record and communicate, to the parties concerned, its reasons for the refusal to make the
reference. In other words, in dealing with an industrial dispute in respect of which a failure report has been submitted
under s 12(4), the appropriate Government exercises its power under s 10(1) subject to the obligation imposed by s 12(5)
to record and communicate its reasons for not making the reference when the dispute has gone through conciliation and
failure report has been received under s 12(4) of the Act.86 The requirement of recording and communicating the reasons to
the parties by the ‘appropriate Government’ is mandatory and mere recording of the reasons cannot be characterised as
adjudication.87 In Maize Products, repelling the contention of the petitioner-employer, the Gujarat High Court held that, in
terms of the Notifiation dated 26 March 1973 issued by the Government of Gujarat, the Deputy Commissioner of Labour
had the power to refer an industrial dispute for adjudication to a tribunal under s 10(1) read with s 12(4) & (5) of the Act.88
Where the petitioner-employee approached civil court in the first instance to enforce his right and got an adverse finding
and, thereafter filed a writ petition without disclosing the fact that he lost in the civil court, a single judge of the Rajasthan
High Court held that the petitioner was not entitled to any relief because of the suppression of material facts before the
High Court as well as the competent authorities.89

(ii) Judicial Review

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(a) Quashing the Order refusing Reference

On the question whether the word ‘may’ used in the phrase ‘it may make such reference’ in s 12(5) should be construed to
mean as ‘shall’ so as to make it obligatory on the Government to make reference, after it has formed its opinion that there
is an existing or apprehended dispute, a considerable amount of decisional grist has got accumulated. The divergence in the
interpretation of the words ‘may’ and ‘shall’ by different High Courts was set at rest in KP Krishnan, in which the
Supreme Court juxtaposed the rival contentions on the construction of s 12(5) and steered clear of the decision on the
question whether the word ‘may’ in the context of this provision should be construed to mean ‘shall’ and observed that
both the approaches ultimately lead to the same crucial inquiry, viz, ‘are the reasons recorded and communicated by the
Government under s 12(5) germane or relevant or not’. If the writ court is satisfied that the reasons given by the
Government for refusing to make a reference are extraneous and not germane, then it can issue, and would be justified in
issuing a writ even in respect of such an administrative order.90 Elaborating this view further in Bombay Union of
Journalists, the court said that if the appropriate Government refuses to make a reference for irrelevant considerations, on
extraneous grounds or acts mala fide, a party would be entitled to move the High Court for a writ of mandamus.91 In
Hochtief Gammon, the court pointed out that these are not the only powers of the courts in relation to the administrative
orders of the governmental authorities. In this case, the court held that the order of the Government was unsustainable as it
had not taken into consideration the relevant material and had also not said that it was inexpedient to refer the question for
adjudication. In other words, the order of the Government really amounted to an outright refusal to consider the relevant
matters and it also misdirected itself on a point of law in wholly omitting to take into account the relevant considerations
which amounted to unlawful behaviour. Speaking for the court, Alagiriswami J, enunciated the law thus:

The executive have to reach their decisions by taking into account relevant considerations. They should not refuse to consider
relevant matter nor should take into account wholly irrelevant or extraneous consideration. They should not misdirect themselves
on a point of law. Only such a decision will be lawful. The courts have power to see that the executive acts lawfully. It is no
answer to the exercise of that power to say that the executive acted bona fide nor that they have bestowed painstaking
consideration. They cannot avoid scrutiny by courts by failing to give reasons. If they give reasons and they are not good reasons,
the courts can direct them to reconsider the matter in the light of relevant matters, though the propriety, adequacy or satisfactory
character of those reasons may not be open to judicial scrutiny. Even if the executive considers it inexpedient to exercise their
powers they should state their reasons and there must be material to show that they have considered all the relevant facts.92

The writ court cannot place itself in the position of the Government and make a reference itself by reason of its own
satisfaction. Howsoever ‘satisfied’ the court may be,93 it cannot direct the Government to make a reference because it
cannot sit as a court of appeal on the order passed by the Government.94 The court is, therefore, not entitled to consider the
propriety or correctness of the reasons assigned by the Government,95 nor can the Government be mandamussed to make a
person a party to the reference as the remedy of such an aggrieved party would be before the industrial tribunal.96 The writ
court can, however, direct the Government to reconsider whether a reference should be made or not after leaving out the
irrelevant and extraneous reasons.97 The Punjab High Court in Oswal Weaving, enunciated the following proposition with
respect to the judicial review of the Government’s order refusing to make the reference:

(1) The appropriate government acting in exercise of its powers under s 10(1) read with s 12(5) of the Act exercises
administrative functions and not judicial or quasi-judicial functions.
(2) In exercise of its powers under s 10(1) of the Act, the appropriate government has discretion to refer or not to refer any
dispute to a labour court or tribunal, but such discretion has to be exercised in accordance with the provisions of the Act
itself, ie, the appropriate government can decline to make a reference only on two grounds, viz:

(i) that there is no industrial dispute which can be referred; or

(ii) that it is not expedient to make a reference in the circumstances of the case.

(3) If the appropriate government declines to make a reference on any of the abovementioned two permitted grounds, the
decision of the government would not be amenable to a writ or direction, and it would not be open to the court to compel
the government to make a reference. The writ court will not sit in appeal over the decision of the appropriate
government on any of the abovementioned two matters.
(4) The appropriate government can be compelled by a writ in the nature of mandamus to consider the matter as required by s
12(5) of the Act and then to exercise its discretion under s 10(1) of the Act in accordance with law if it is either admitted
or proved that conciliation proceedings had taken place and a report had been submitted by the conciliation officer under

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s 12(4) of the Act, but that the government had not seen the report of the conciliation officer or taken it into
consideration at all before deciding whether to make a reference or not.
(5) A writ of mandamus would also be issued if the government declines to make a reference under s 12(5) of the Act
without recording the reasons for such refusal and without communicating the same to the parties concerned.
(6) An appropriate writ would also be issued to the appropriate government if it is admitted or proved that the refusal to make
a reference of the dispute in question is not bona fide or is actuated by malice or is based on considerations which are
wholly irrelevant or extraneous and are not germane to the statutory considerations on which reference can be declined.1

From the decided cases, the following grounds are discernible, on which the writ court would be justified in issuing a writ
of mandamus directing the Government to reconsider the question of making or refusing to make reference of a dispute:

(i) Failure to record and communicate reasons

(ii) Ignoring conciliation officer’s report

(iii) Nature of reasons:

(a) Irrelevant or extraneous

(b) Reasons tantamounting to adjudication

(iv) Mala fides.2

Failure to Record and Communicate Reasons:

In case the Government refuses to refer a dispute, it is the mandatory requirement of s 12(5) that it shall record its reasons
for the refusal and communicate such reasons to the parties concerned, when the dispute has gone through conciliation and
a failure report has been submitted under s 12(4) of the Act.3 It is, therefore, obligatory on the part of the Government to
set out in the communication issued to the parties clearly and precisely the grounds on which the request for reference was
being declined.4 The object of this provision is to require the ‘appropriate Government’ to state its reasons for refusing to
make a reference, so that the reasons should stand public scrutiny,5 because when the Government has to record reasons, it
would apply a much closer mind to the question, as otherwise it may not be easy for it to give reasons for the decision it
has come to.6 The knowledge that reasons would be made public and be the subject of criticism, would manifestly tend to
prevent capricious and ill-considered actions on the part of the Government,7 and no Government-surely not a democratic
Government-would ever take the risk of giving reasons which would be open to public criticism and even condemnation.8

After the Government has recorded and communicated its reasons to the parties, it cannot in its counter-affidavit to the writ
petition say that in addition to reasons mentioned in the order refusing to make the reference, certain other relevant facts or
grounds not disclosed in the order had also weighed with it in reaching the conclusion that no reference need be made.9
Hence, in case of failure of the appropriate Government to comply with the mandatory requirement to record and
communicate the reasons to the parties, it can be compelled by a writ of mandamus to record and communicate its reasons
when it decides not to make a reference after considering the report of the conciliation officer under s 12(4) of the Act and
other relevant materials.10 The Patna High Court, held that the state Government was not obliged to record and
communicate its reason for not referring some of the disputes for adjudication under s 12(5), because the power was
exercised by the state Government straightaway under s 10(1)(d) without there being any conciliation proceedings.11 This
view is incorrect as it loses sight of the basic principles of industrial law in this behalf. Each one of the demands which is
connected with the employment, non-employment, the terms of employment or with the conditions of labour of any
person, when made by the workmen or their union and refused by the employer would give rise to an industrial dispute.12
A number of such disputes arising out of the demands of the workmen may be referred for adjudication by a single order of
reference. In other words, there is a clear distinction between an ‘industrial dispute’ and an ‘order of reference’. When the
appropriate Government exercises its power to make reference of some of the demands out of a charter of demands, it no
doubt, exercises its power under s 10(1)(d) with respect to such dispute, but with respect to the demands which the
Government refuses to refer, its power under s 10(1)(d) is not exhausted.13

Section 12(5) enjoins upon the ‘appropriate government’ to record and communicate its reasons to the parties for its refusal
to refer the dispute. With respect to the demands which the Government refuses to refer, each one of which is an industrial
dispute by itself, it is obligatory on it to record and communicate its reasons to the parties concerned. The failure of the
Government to record and communicate the reasons with respect to the demands not referred would make the refusal order
amenable to a writ of mandamus. Want of reasons in the order refusing reference cannot be supplied by the plea

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subsequently raised by the Government in the writ petition.14 In other words, the Government cannot be, subsequently,
heard to say that in addition to the reasons mentioned by them in the order, certain other relevant facts or grounds not
disclosed in the order had also weighed with it in reaching the conclusion that no reference need be made,15 because
otherwise the mandatory provisions of this subsection may be deliberately violated and the aggrieved party will have to
undergo the painful necessity of going to the High Court in order to ascertain the reasons for the Government’s decision in
refusing to make the reference.16 In Nirmal Singh, where the labour commissioner exercising the powers of the state
Government under s 12 for making reference, had not given any reasons to justify his conclusion that the delinquent
workman was not a ‘workman’, the Supreme Court instead of remanding the matter for stating reasons, directed him to
make a reference with a view to avoid delay in adjudication.17

Ignoring Conciliation Officer’s Report under Section 12(4) :

From the background of the provisions of sub-ss (1), (2) and (4) of this section, it is clear that the appropriate Government
is bound to consider very carefully the failure report of the conciliation officer under s 12(4) and treat it as furnishing
relevant material which would enable it to decide whether a case for reference has been made out or not.18Section 12(5),
inter alia, provides that if on consideration of the report referred to in sub-s (4), the appropriate Government is satisfied
that there is a case for reference to the tribunal, it may make such reference. On the other hand, if it is satisfied that either
there is no case for reference or it would not be expedient to make a reference of the dispute, it may decline to make the
reference on consideration of the report of the conciliation officer and other relevant materials.19 If, therefore, it is either
admitted or proved that the conciliation proceedings have taken place and a report has been submitted by the conciliation
officer under s 12(4) of the Act, but the appropriate Government has not seen the report or taken it into consideration at all
before refusing to make a reference, the Government can be compelled by a writ of mandamus to reconsider the question
after taking this report into account. In Oswal Weaving (supra), the facts disclosed that the conciliation officer had, in his
failure report, travelled to the length of making recommendation to the Government about making reference and even
enclosed a draft of the ‘order of reference’. The High Court, instead of condemning the action of conciliation officer,
commended his recommendation.20 The legal position in this regard is very clear. Section 12(5) does not require a
conciliation officer to make any recommendation unlike s 13(4). Hence, any recommendation made by the conciliation
officer cannot form an integral part of the report. The case clearly falls within the ratio of Bombay Union of Journalists.
The decision of High Court, therefore, is not correct.

Nature of Reasons:

The area of reasons is one of those areas where the courts having strayed into thickets, the compass reading of principle,
not the random broken twigs or unbiased trail, must show the way out. Broadly stated, in entertaining a petition for issuing
a writ of mandamus, the writ court does not sit in appeal against the value, quality, propriety, correctness, adequacy or the
satisfactory character of the reasons recorded by the appropriate Government in refusing to make a reference.21 The object
of requiring the ‘appropriate government’ to state its reasons for refusing to make a reference is that the reasons should
stand public scrutiny. It is, therefore, desirable that the parties concerned should be told clearly and precisely the reasons
why no reference is made. However, that does not mean that the party challenging the validity of the Government’s order
declining to make a reference can require the court in writ proceedings to examine the propriety or correctness of the said
reasons.22 This provision has been made in order to provide an objective test which may be subjected to judicial scrutiny
by a writ court to examine as to whether the reasons for refusing to make a reference are irrelevant or foreign.23 As to what
is the nature and extent of the reasons to be stated by the ‘appropriate Government’ when it refuses to make an order of
reference, the Supreme Court has stated that the reasons should be germane to the dispute under consideration and should
not be irrelevant or extraneous to the dispute. Furthermore, the reasons should not tantamount to the adjudication by the
Government itself because the Government under s 12(5) discharges only an administrative function and not a judicial or
quasi-judicial function which is the field of the adjudicator. The refusal of the Government, therefore, will be amenable to
the writ of mandamus if the reasons (a) are irrelevant and extraneous or (b) tantamount to adjudication.

Irrelevant and extraneous reasons:

It is now a well settled principle that the order of the Government acting under s 10(1) read with s 12(5) is an
administrative order and not a judicial or quasi-judicial one.24 If in taking the decision to refuse to refer the matter for
adjudication, the Government fails to take some vital and relevant material which it ought to have taken into account for
taking the decision, the decision will be liable to be quashed.25Even in dealing with the question as to whether it would be
expedient not to make reference, the Government must not act in a punitive spirit, but must consider the question fairly and
reasonably, and take into account only the relevant facts and circumstances.26 The requirement to record and communicate
reasons means reasons, which have relevance to the conclusion reached by the Government, which, when adjudged by the
normal test of cause and effect, were intelligible. Refusal to make reference for the reason that the case does not disclose
any legal flaw is not a valid reason.27 For instance, the refusal to refer the dispute for adjudication on the ground that the
union which raised the dispute is not a recognised union is not germane to the question in dispute.28 The refusal of the

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appropriate Government to make reference of a dispute relating to dismissal of a workman by saying that since the
proceedings had been taken in accordance with the principles of natural justice or prima facie it was not mala fide, was
held to be irrational. In Ashwini Kumar Mohanty, the reason for refusal to refer the dispute for adjudication that the bank
was going to have regular recruitment in future, has been held to be improperly based on extraneous considerations.29
Where the statement in the impugned order was to the effect that the state Government on consideration of the report of the
conciliation officer as well as the surrounding facts and circumstances did not consider it fit to refer the dispute for
adjudication, it was held that the order did not comply with the mandatory requirement of recording relevant reasons for
refusing to make reference of the dispute for adjudication.30 Similarly, where the Government refused to make reference
between a corporation owned by it and its employees relating to quantum of bonus for the reason that it could not interfere
in the payment of bonus more than the minimum permissible limit, it was held that refusal to refer was on a consideration
which was totally on a different keel and was, therefore, reviewable.31 Likewise, the order of the Government refusing to
make reference was set aside for non-application of mind and the Government was directed to make reference.32

The mere statement that ‘in the opinion of the state Government the dispute was not fit for reference’, or ‘it would not be
expedient to refer the unsettled disputes to adjudication’, or ‘the action of the management was not mala fide’, would not
constitute due compliance with the requirements of this provision.33 The Madras High Court held that where the services of
a workman were terminated under the relevant Standing Order providing for automatic loss of lien of a workman who
absents himself from duty for more than eight consecutive days is not an irrelevant or extraneous consideration.34 No
doubt, taking the relevant Standing Order into consideration cannot be said to be an irrelevant or extraneous consideration,
but the question as to whether the workman was in fact absent for more than eight consecutive days or whether the relevant
Standing Orders applied to him or not, are questions relevant to be taken into account.35 In Tamil Nadu JAC&TT Union,
the Government referred a dispute raised in a cluster of textile mills for adjudication. Later on, another order was issued
specifying the individual mills. A few member-mills, which were parties to conciliation proceedings, were left out of the
reference. These mills challenged the order of the Government by a writ petition before the Supreme Court. The court held
that the dispute was an ‘industry-wise dispute and not establishment-wise’; hence, these mills should also have been
included in the reference and should not have been left out. Since these mills were members of the association and were
parties to the conciliation proceedings, the Government should not have taken on itself the task of deciding whether these
mills should or should not be governed by the general adjudication affecting all the workmen in the industry. In the
circumstances, the court directed the state Government to forthwith include the mills so left out.36 The refusal of the
Government to make a reference on the ground that a temporary workman had failed to qualify for permanent recruitment
in the written test was upheld by the Allahabad High Court in Onkar Nath Kapoor.37 A single judge of the Madras High
Court held that in refusing to refer the dispute relating to the termination of service of an apprentice on completion of two
years of apprenticeship, after taking into account the relevant material considerations, the Government was not influenced
by irrelevant considerations and there was no misdirection whatsoever in law.38

Reasons Tantamounting to Adjudication:

In TELCO Convoy Drivers,39 the Supreme Court pointed out that the function of the appropriate Government is an
administrative function and not a judicial or quasi-judicial function. Also, in performing this administrative function, the
Government cannot delve into the merits of the dispute and take upon itself the determination of the lis, which would
certainly be in excess of the power conferred on it by this section. To form opinion as to whether an industrial dispute
‘exists’ or ‘is apprehended’ is not the same thing as to adjudicate the dispute itself on its merits. The question as to whether
the persons raising the dispute were workmen or not cannot be decided by the Government. In other words, in exercising
its administrative powers under s 10(1), the Government cannot embark on detailed examination, investigation,
appreciation of facts and application of law which is to be done by the adjudicatory authorities under the Act.40 However,
for forming its opinion, the Government may determine as to whether an industrial dispute ‘exists’ or ‘is apprehended’ or
the claim is frivolous, bogus or put forth for extraneous and irrelevant reasons, not for justice or industrial peace and
harmony.41 The appropriate Government, before refusing to refer a dispute for adjudication, will have to apply its own
mind to the question whether the punishment meted out by the management is justified by the proved misconduct. This is
the field of objective adjudication by the tribunal and not the subjective satisfaction of the Government. In such a situation,
the Government will not be justified to refuse to make the reference, because the workman is entitled to get the evidence as
to the proof of his misconduct reviewed in such a reference as also the quantum of punishment, even if misconduct is held
to have been proved.42 The Government cannot decline to refer the dispute for adjudication simply because in its opinion
based on examination of the merits of the case, it finds no substance in the same because such an approach would amount
to arrogation by the Government to itself the role which properly belongs to an adjudicator.43

The Government is not empowered to decide the merits of the industrial dispute under the garb of giving reasons for
refusal to make the reference.44 The order of the Government refusing to make a reference will also be quashable on
certiorari, if it has refused or failed to take into consideration the plea of the workman that his dismissal was by way of
victimisation.45 In cases of disciplinary discharge or dismissal, there is little scope left for the Government to refuse to

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make reference. However, the Orissa High Court,46 upheld the refusal of the Government to refer the dispute relating to the
dismissal of the workman on the ground that the workman was not able to show that the domestic inquiry was not proper.
The attention of the court does not appear to have been drawn to the provisions of s 11A which has expanded the scope of
the jurisdiction of adjudication. In Munichowdappa, the workman was dismissed from service for having obtained
employment in the army by producing false certificate. The Government of Karnataka refused to refer the dispute on the
ground that the workman had produced false army certificate for getting the appointment, and the services were terminated
after conducting regular inquiry and found guilty of charges framed against him’. The High Court upheld the refusal.47 In
Syndicate Bank, the Supreme Court mandamus sed the Government to reconsider the question of making reference of a
dispute relating to the punishment of stoppage of three increments of the workmen which was rejected on the ground that
the ‘charges of misconduct against the workmen were proved in a duly constituted departmental inquiry and the penalty
was imposed after following the required procedure’. The Supreme Court held that the ground for refusal to make
reference was not valid. It observed:

If such a ground were permissible it would be the easiest thing for the management to avoid a reference to adjudication and to
deprive the worker of the opportunity of having the dispute referred for adjudication even if the order holding the charges of
misconduct proved was unreasonable or perverse or was actuated by mala fides or even if the penalty imposed on the worker was
totally disproportionate to the offence said to have been proved. The management has simply to show that it has held a proper
inquiry after complying with the requisite procedure and that would be enough to defeat the worker’s claim for adjudication. Such
a situation cannot be countenanced by law. 48

In a batch of writ petitions in Ram Avtar, the Government had declined reference in a couple of cases on the ground that it
was learnt that in the first one, the services were terminated only after the charges against him ‘were proved in a domestic
inquiry’; and in the second, that the removal was in accordance with the procedure. The court held that in both the cases,
the reasons given were irrelevant, extraneous and not germane to the determination, and tantamounted to adjudication
which was impermissible. Desai J observed:

Section 11A confers power on the tribunal to examine the case of the workmen whose service has been terminated either by
discharge or dismissal qualitatively in the matter of nature of inquiry and quantitatively in the matter of adequacy or otherwise of
punishment, the question of legality and validity of the inquiry has to be adjudicated upon by the tribunal in a quasi-judicial
determination not by the government and the government cannot usurp this field of adjudication.49

In Madhya Pradesh IK Sangh, Khalid J, of the Supreme Court observed:

.. . while conceding a very limited jurisdiction to the state government to examine patent frivolousness of the demands, it is to be
understood, as a rule, that adjudication of demands made by workmen should be left to the tribunal to decide. Section 10 permits
the ‘appropriate government’ to determine whether the dispute exists or is apprehended and then refer it for adjudication on merits.
The demarcated functions are: (i) reference and (ii) adjudication...There may be exceptional cases in which the state government
may on a proper examination of the demand, come to a conclusion that the demands are either perverse or frivolous and do not
merit a reference. Government should be very slow to attempt an examination of the demand with a view to decline reference and
courts will always be vigilant whenever the government attempts to usurp the powers of the Tribunal for adjudication of valid
disputes. To allow the government to do so would be to render sections 10 and 12(5) of the Industrial Disputes Act nugatory.50

In Jute Mills Staff Assn, the Patna High Court held:

The state government’s jurisdiction under s 10 of the Industrial Disputes Act to make a reference of the industrial dispute is
confined to the satisfaction as to whether any industrial dispute existed or not or is apprehended or not. It has no jurisdiction to
form its own opinion about the correctness or otherwise of the allegations made by either party to the dispute. It cannot come to its
own conclusions on the merits of the dispute. It, however, can determine the issues which emerge from the facts placed before it
but cannot record any finding to say that although a dispute has been raised and parties are at issue with respect to certain
allegations of fact, yet it is not satisfied that an industrial dispute is in existence or is in offing. It shall be, in such a situation
obliged to make a reference.51

A single judge of the Madras High Court in Balakrishnan, has suggested that the normal rule in cases of dismissal,
discharge, termination of service or retrenchment of a workman falling under s 2A read with s 11A of the Act should be to
refer the dispute for adjudication. However, in appropriate cases of exceptional nature, the Government may decline to

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make a reference. The court further observed that the reasons generally shall relate to the larger interest of labour or the
establishment of industrial peace in the region and not on mere merits of the case either on law or on facts.52 In Madhya
Pradesh IK Sangh (supra), the Government had rejected the demand of workmen for (i) dearness allowance and (ii)
cambal allowance on the ground that the Government could not bear the additional burden and that the workmen were not
entitled to cambal allowance as the same was included in the consolidated pay of the workmen. The court held that the said
rejection constituted adjudication and that the Government exceeded its jurisdiction in refusing to refer the dispute. The
Madras High Court struck a different note in K Subramaniam, where speaking for the court Natrajan J, said:

...The government cannot be compelled to refer every dispute for adjudication by the labour court or tribunal solely because of the
additional powers conferred on the tribunal under s 11A, irrespective of the fact whether the inquiry had been held in a fair and
proper manner and the finding had been rendered on the basis of evidence. We are, therefore, unable to approve the view taken by
the learned single judge and hold that because of s 11A the government is bound to apply its mind to the quantum of punishment
before refusing to refer a dispute for adjudication, notwithstanding the fact that no reference is called for as regards the manner in
which the inquiry was held or the correctness of the findings by it.53

In Port and Dock Workers, in the facts and circumstances of the case despite the fact that Government had encroached
upon the jurisdiction of the adjudicator, a single judge of the Bombay High Court declined to issue any directions for
reference of the demands for adjudication which could be termed as state demands.54 The appropriate Government is not
required to write an elaborate order indicating all the reasons that weighed in its mind in refusing to make reference,55 but
it is not precluded from considering the merits of the disputed questions of law of the facts prima facie,, for deciding
whether a dispute should be referred or not the Government has to consider whether a prima facie case has been made out,
ie, an ‘industrial dispute’ exists or is apprehended and whether it would be expedient to make the reference.56 A prima
facie examination of the merits of the matter, therefore, cannot be said to be foreign to the inquiry which the appropriate
Government is entitled to make.57 A prima facie case does not mean a case proved to the hilt but a case which can be said
to be established if the material before the Government is to be believed. In other words, the relevant consideration is
whether on the basis of the material before it, is it possible for the ‘appropriate Government’ to arrive at the conclusion in
question, and not whether that was the only conclusion which could have been arrived at on the basis of that material. In
the words of Gajendragadkar J:

The question, as to whether a case for reference has been made out, can be answered in the light of all relevant circumstances
which would have a bearing on the merits of a case as well as on incidental question, as to whether a reference should,
nevertheless, be made or not.58

For this purpose, the Government may consider the prima facie merits of the case by taking into account the failure report
submitted by the conciliation officer under s 12(4) and also other relevant considerations which would help to decide
whether making a reference would be expedient or not. For instance, where the claim, on the face of it, is patently frivolous
or is clearly belated or where on prima facie examination, if the impact of the claim appears to be such as is likely to
adversely affect the relations of employers and employees in the region, the appropriate Government may take that aspect
into consideration in refusing to make the reference.59 Such reasons would not tantamount to the adjudication of the
dispute by the Government. The only requirement of s 12(5) is that when the Government declines to make the reference
for such reasons, it should set out those reasons in its order of refusal to make the reference and communicate the same to
the concerned parties.60 For deciding, therefore, whether a prima facie case has been made out or not, the Government has
to see whether there is an existing or apprehended industrial dispute and then to consider whether it would be expedient to
make a reference of such dispute in the circumstances of the case.61 However, in determining the question, ‘if the dispute
in question raises questions of law,’ the government should not purport to reach a final decision on the question of law,
because that would normally lie within the jurisdiction of the industrial tribunal.62 For instance, the question whether the
establishment to which the dispute relates is ‘industry’ or not, is a mixed question of fact and law, and it is not for the State
Government to reach the final decision on such question. Such matter falls appropriately within the jurisdiction of
industrial adjudication.63 Furthermore, if instead of saying that the workman has no prima facie case, the Government says
that he has no case in law, it shall be reaching a final conclusion on law.64 Likewise, the point whether an award could be
terminated in part or not being a question of law should not be decided by the appropriate Government, but must be left for
tribunal to decide.65

Questions as to whether a dispute is an industrial dispute,66 or whether an employee is a workman, being mixed questions
of fact and law cannot be appropriately decided by the Government because their determination falls within the realm of
adjudication.67 Every person whose employment falls within the ambit of s 2(s) is a ‘workman’ whether he is temporary,
permanent or probationer. The question that he should have worked for 240 days may be relevant for the purpose of s 25F,
but it is irrelevant in deciding the question whether the dispute should be referred or not.68 The question involving the

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interpretation of rules and regulations of an establishment having far-reaching effects would require adjudication, and the
Government would not be justified in rejecting the demand for reference.69 In Indian Oxygen, the Government had
declined to refer the dispute arising out of the termination of service of a workman for unauthorised absence from duty in
accordance with the Standing Orders without inquiry. The Supreme Court held that matter required reconsideration by the
Government on the merits and directed the Government to consider various aspects of the matter and pass an order as to
whether or not the dispute in question required to be referred.70 Similarly, on disputed questions of fact, the appropriate
Government cannot purport to reach a final conclusion, for that again would be the province of the industrial tribunal.71 In
a case of a disciplinary action, if for the purpose of seeing whether there is a prima facie case for reference or not, the
Government looks into the report of the inquiry officer to see whether the inquiry was regularly conducted or not, it cannot
be said that the Government gave a final decision on the disputed question of fact.72 Conversely, it is not the jurisdiction of
the appropriate Government to direct reinstatement of a dismissed workman as the question as to whether a workman
should be reinstated or not is a question which falls within the jurisdiction of the industrial adjudicator. Hence, such an
order will tantamount to adjudication.73 It cannot be suggested that in any decision of the Government, the element of
decision, even to a limited extent, should be absent as that would make s 12(5) entirely nugatory.74 The power vested in the
Government under this provision being dependent on its own satisfaction, the writ court is only concerned to find out
whether such satisfaction was, in fact reached by the Government in good faith and on consideration of the matters that are
relevant and uninfluenced by extraneous or mala fide considerations. The court will not go into the conclusion of fact
prima facie reached by the Government.75

The mere fact that the workmen were dissatisfied with the result of conciliation or that the management did not concede to
their demands does not ipso facto justify the reference of dispute. A speaking order passed by the Government scrutinising
the record before it to see whether the grievance was genuine or baseless, without substance, frivolous or unjustified would
not tantamount to adjudication. For coming to the prima facie conclusion, it is within the competence of the Government
to see the genuineness of the dispute.76 In England also, the courts quash administrative acts, if those performing them
have acted on extraneous considerations,77 though they persistently deny that in judicial review they can interfere with the
way in which discretion is exercised78 or that they are acting as a court of appeal79 and maintain that they only ensure that
discretion is exercised ‘properly’ or ‘according to law’,80 or that the administration ‘is not declining jurisdiction’.81 The
actions of the administrative authorities, therefore, are investigated in judicial review, with a view to see whether they have
taken into account matters which they ought not to have taken into account, or conversely have neglected to take into
account vital considerations which they ought to have taken into account.82 Sometimes, the courts have suggested that they
will quash an unreasonable decision, because extraneous factors have been taken into consideration.83 However, Lord
Greene suggested ‘unreasonableness’ may be a head separate from ‘extraneous consideration’.84 Of late, the English courts
have been extending the field of judicial review to look into the ‘reasons’ of the administrative orders not only for their
being extraneous but also for being vague, ambiguous and ‘inadequate’. In Baldwin & Francis, Lord Denning wistfully
remarked: ‘Is there a difference when the order speaks but speaks the ambiguous voice of the Oracle? This may someday
call for decision!’85 In Re Poyser and Mills’ Arbitration, the tribunal’s decision was quashed on the ground that it had not
given ‘adequate reasons’ as required by s 12 of the Tribunal and Enquiries Act 1950.86 Megaw J observed:

The reasons that are set out must be reasons which are not only intelligible but which deal with the substantial points that have
been raised. The courts would intervene where the reasons were substantially wrong or inadequate.87

Mala Fides:

A discretion to consider all relevant facts which is conferred on the Government by s 10(1) could be exercised by the
Government even in dealing with s 12(5) provided of course that the said discretion is exercised bona fide, its final
decision is based on consideration of relevant facts and circumstances, and the second part of s 12(5) is complied with. In
other words, if it is admitted or proved that the refusal to make a reference is mala fide or dishonest, or is actuated by
malice or the refusal is based on considerations which are wholly irrelevant, extraneous and not germane to the question in
dispute, a writ of mandamus would be issued against it.88 For instance, where the workmen alleged that the Government
refused to make the reference because it itself was a party to the dispute and the allegation was not controverted by the
Government, the order of refusal was held to be mala fide.89 However, the mere fact that the Government does not refer a
dispute cannot be sufficient to charge the Government with mala fide or dishonest intentions,90 though the reasons stated
by the Government may be considered in dealing with the question of mala fides in its order refusing to make a
reference.91There is a presumption of constitutionality of an administrative act,92 and the Government may and should, be
presumed to act with complete propriety and without any bias while exercising the statutory functions under ss 10(1) and
12(5) of the Act.93The burden of proving mala fides is, therefore, on him who seeks to invalidate such an administrative act
or order of the Government. However, mala fides in the sense of improper motives need not be established only by direct
evidence and if bad faith would vitiate the order, the same can be deduced as a reasonable and inescapable inference from
proved facts.94 In Rajindra Roy, GN Ray J held that it might not be always possible to establish malice in fact in a straight-

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cut manner. In an appropriate case, it is possible to draw reasonable inference of mala fide action from the pleadings, and
antecedent facts and circumstances. However, there must be firm foundation of facts pleaded and established. Such
inference cannot be drawn on the basis of mere insinuations or vague suggestions.95

(b) Directing Government to make Reference

In KP Krishnan, the Supreme Court issued a writ of mandamus to the Government directing that it should consider the
question of, making or refusing to make a reference under s 12(5) ignoring the reasons for its refusal to make the reference.
However, the court did not direct the Government ‘to make the reference’.1 In BPT, a single judge of the Bombay High
Court said that it would be possible to urge in a given case that where the only grounds for refusing a reference have been
found to be unsustainable, the court could direct the appropriate Government to make the reference.2 Even after forming
such opinion and being so satisfied, the Government has further to consider the question of the expediency of ‘making the
reference’. It is not obligatory on the part of the Government to refer each and every dispute where the workmen seek such
a reference. The Government has to weigh ‘the facts keeping in mind the objective of industrial peace and smooth
industrial relations between the parties.3 The AP High Court in Non-Pensioners Assn, held that the scope of mandamus is
to declare a particular order of the Government as illegal and unconstitutional and to direct the Government to consider or
reconsider the matter afresh. However, it cannot straightaway direct the Government to pass an order in a particular
manner, ie, directing the Government to refer the dispute, since it is the discretion of the Government to pass orders after
applying its mind to relevant factors and subject to prima facie satisfaction as to the existence of dispute or otherwise. In
this view of law, the Bench set aside the order of the single judge directing the Government to refer the dispute as it
suffered from arbitrariness and non-application of mind.4 A number of High Courts held that the reviewing court, even if
satisfied that the order refusing to make a reference is not proper or valid, cannot place itself in the position of the
Government and make a reference by reason of its own satisfaction. In other words, even an erroneous view taken by the
appropriate Government is not susceptible to correction by the reviewing court.5 Nor can the reviewing court compel the
appropriate Government to make a reference.6 However, in subsequent decisions, the Supreme Court gave a go-by to this
rule and itself directed the appropriate Government to refer the dispute for adjudication. In Sankari Cement, the court
directed the Government to make a reference of the dispute for adjudication within four weeks from the date of its order.7

In Nirmal Singh, the Government was directed to refer the matter forthwith to dispose it of within two months from the
receipt of its order.8 In K Veerarajan, the Government was directed to refer the dispute for adjudication within one month
from the date of the order of the court and further directed the labour court to dispose of the reference within four weeks
from the time of the order of reference.9 In TELCO Convoy Drivers, quashing the refusal order of the Government, the
court directed it to make the reference of the dispute.10 The charter of demands may contain a number of demands. Some
of the demands may be genuine and some may even be of frivolous nature. Some of such demands may not even constitute
an ‘industrial dispute’ at all, say for instance, the ideological demands. The appropriate Government may straightaway
reject such demands because they will not fall within the ambit of the definition of ‘industrial dispute’. if the dispute under
consideration is not an ‘industrial dispute’ at all, the Government may justifiably refuse to make the reference.11 However,
each one of the demands of the workmen made to the employer which is connected with the employment or non-
employment, or the terms of employment or with the conditions of labour of any person when made by the workmen or
their union and rejected by the employer, would give rise to an ‘industrial dispute.12 A corollary to this is that the
Government can decline to refer all or any of such items of dispute which in its opinion are not ‘existing’ or ‘apprehended’
industrial dispute if it is satisfied that it would not be expedient to refer such dispute. The Government, therefore, will refer
only those demands which in its opinion are ‘existing’ or ‘apprehended’ industrial dispute and it is further satisfied that it
would not be inexpedient to refer such disputes.

SUB-SECTION (6): PERIOD WITHIN WHICH THE REPORT SHALL BE SUBMITTED

Section 12 contemplates two types of reports, namely, (i) settlement report under sub-s (3) and (ii) failure report under sub-
s (4). Sub-section (6) prescribes the period for submission of these reports. In the first instance, either of the reports is to be
submitted within fourteen days or such shorter period as may be fixed by the appropriate Government. However, by virtue
of the proviso to this sub-section, the time for submission of the report can be extended by such further period as may be
agreed upon in writing by all the parties to the dispute. There appears to be some conflict between sub-ss (4) and (6).
Under sub-s (4), the conciliation officer, in a case where no settlement has been arrived at, is required to send a full report
to the appropriate Government, ‘as soon as practicable after the close of the investigation’; whereas under sub-s (6), the
report must be ‘submitted within fourteen days of the commencement of the conciliation proceedings’.13 This seems to be
the result of careless drafting. The intendment of the legislature may, however, become clear by reading these two
provisions together to mean that the report is to be submitted ‘as soon as practicable’ ‘within fourteen days of the
commencement of the conciliation proceedings’. However, a single judge of the Calcutta High Court held that the time-
limit prescribed by sub-s (6) is directory and not mandatory.14 Contravention of s 12(6) requiring submission of the report
within the prescribed time may be a breach of duty on the part of the conciliation officer, but that does not affect the

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legality of the proceedings which are concluded as provided in s 20(2) of the Act in view of certain decisions, laying down
that the legality of the proceedings before the conciliation officer would not be affected in case he exceeds the time-limit
prescribed by the section or the proviso. The proviso therefore, seems to have been rendered redundant, as there is nothing
to stop a conciliation officer from continuing with the proceedings without waiting for the consent of the parties to the
extension of the period.15 In Bombay Tyres, the conciliation officer held 20 meetings to arrive at a negotiated settlement.
However, no settlement could be arrived at. In the facts and circumstances of the case, a single judge of the Bombay High
Court held that the holding of 20 meetings with the management and the union without any result clearly indicated failure
of the conciliation proceedings. The failure of the conciliation officer to submit the failure report was, therefore culpable
and without any justification. The court, therefore, issued mandamus to the conciliation officer to forward to the
Government peremptorily, the failure report within one week 16

69 Ins by Act 35 of 1965, s 4 (wef 1-12-1965).

70 Subs by Act 36 of 1956, s 10, for ‘a tribunal’ (wef 10-3-1957).
71 Ins by Act 36 of 1956, s 10 (wef 17-9-1956).
72 Ins by Act 36 of 1964, s 8 (wef 19-12-1964).
73 General Manager, Security Paper Mill v RS Sharma 1986 Lab IC 667 [LNIND 1986 SC 39], 669 (SC), per Venkatramiah J.
74 East Asiatic & Allied Companies v BL Shelke (1961) 1 LLJ 162, 165 (Bom) (DB), per Mudholkar J.
75 Suresh Vithoo Nare v Dharamsi Morarji Chemicals Co Ltd 1991 Lab IC 1932, 1934 (Bom), per Kantharia J.
76 Pratap Chandra Mohanty v Union of India (1971) 2 LLJ 196, 198 (Ori) (DB), per RN Misra J.
77 Kalinga Tubes Ltd v KT Mazdoor Sangh 1981 Lab IC 277, 280 (Orr), per Acharya J.
78 Sasamusa Sugar Works Ltd v State of Bihar AIR 1955 Pat 49, per Ahmed J.
79 Manoharan Nair v State of Kerala (1983) 1 LLJ 13, 16 (Ker), per MP Menon J.
80 BK Jobanputra v BS Kalelkar (1965) 1 LLJ 543, 546 (Bom) (DB), per Tambe J.
81 Royal Calcutta Golf Club Mazdur Union v State of West Bengal (1957) 1 LLJ 218 [LNIND 1956 CAL 118] (Cal), per Sinha J.
82 General Manager, Security Paper Mill v RS Sharma 1986 Lab IC 667 [LNIND 1986 SC 39], 670 (SC), per Venkatramiah J.
83 State Bank of India SRC v Union of India 1992 Lab IC 1062 [LNIND 1991 PNH 235], 1066 (P&H), per Mongia J.
84 Indal Employees Orgn v Indian Aluminum Co Ltd, 1992 Lab IC 1237, 1240 (Ker), per Sreedharan J.
85 KH Gandhi v RNP Sinha (1958) 1 LLJ 82 (Pat) (DB), per Sinha J.
86 State Bank Staff Union v SBI (1991) 1 LLJ 163 [LNIND 1990 MAD 579], 175 (Mad) (DB), per Nainar Sundaram J.
87 Mico Employees’ Assn v State of Karnataka (1987) 1 LLJ 300, 311 (Kant), per Bopanna J.
88 East Asiatic & Allied Companies v BL Shelke (1961) 1 LLJ 162 (Bom) (DB), per Mudholkar J.
89 Workmen of VM Bus Service v Labour Officer (1970) 2 LLJ 95 (Mad), per Alagiriswami J.
90 Jaslok Hospital & Research Centre v BV Chavan 1983 Lab IC 1100, 1105 (Bom), per Pendse J.
91 Jaswant Sugar Mills Ltd, Meerut v Lakshmi Chand (1963) 1 LLJ 524 [LNIND 1962 SC 308] (SC), per Shah J.
92 Wadhu Mal Agnani v Rulia Ram Sharma (1965) 1 LLJ 659 (Punj), per Khanna J.
93 Jaswant Sugar Mills Ltd, Meerut v Lakshmi Chand (1963) 1 LLJ 524 [LNIND 1962 SC 308] (SC), per Shah J.
94 Employees, Caltex (I) Ltd v Col (1959) 1 LLJ 520, 524 (Mad), per Balakrishna Ayyar J.
95 Madhvan Kutty v Union of India (1982) 2 LLJ 212, 213 (Ker), per Khader J.
96 Royal Calcutta GCM Union v State of West Bengal (1957) 1 LLJ 218 [LNIND 1956 CAL 118] (Cal), per Sinha J.
97 Jaswant Sugar Mills Ltd, Meerut v Lakshmi Chand (1963) 1 LLJ 524 [LNIND 1962 SC 308] (SC), per Shah J.
1 Royal Calcutta Golf Club Mazdur Union v State of West Bengal (1957) 1 LLJ 218 [LNIND 1956 CAL 118] (Cal), per Sinha J.
2 Paints Employees’ Union v MD Nail (1966) 1 LLJ 579 (Bom) (DB), per Chainani CJ.

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3 Sasamusa Sugar Works Ltd v State of Bihar AIR 1955 Pat 49, per Ahmad J.
4 Mico Employees’ Assn v State of Karnataka (1987) 1 LLJ 300, 311 (Kant), per Bopanna J.
5 General Manager, Security Paper Mill v RS Sharma 1986 Lab IC 667 [LNIND 1986 SC 39], 669 (SC), per Venkatramiah J.
6 Tamil Nadu NEE Union v Mgmt. TIC of India Ltd (1992) 1 LLJ 506, 517 (Mad), per Bakthavatsalam J.
7 Mysore Sugar CE Union v Commr of Labour (1968) 1 LLJ 491, 495 (Mys) (DB), per Somnath Ayyar J.
8 Royal Calcutta Golf Club Mazdur Union v State of West Bengal (1957) 1 LLJ 218 [LNIND 1956 CAL 118] (Cal), per Sinha J.
9 Krishnarajendra MW Union v Conciliation Officer (1968) 1 LLJ 504, 507 (Mys) (DB), per Tukol J.
10 TK Padmanabha Menon v PV Kora 1968 Lab IC 1134 (Ker), per Isaac J.
11 Kerala Minerals Employees Congress v ACL (1983) 1 LLJ 424 [LNIND 1982 KER 250] (Ker), per UL Bhat J.
12 Calcutta Electric Supply Corpn Ltd v PC Sen 1978 Lab IC 1395 (Cal) (DB), per SK Datta J.
13 Britannia Biscuit Co Ltd Employees’ Union v ACL (1983) 1 LLJ 181, 190 (Mad), per Padmanabhan J.
14 Krishnarajendra MW Union v Conciliation Officer (1968) 1 LLJ 504, 512-13 (Mys) (DB), per Tukol J.
15 Praga Tools Ltd v Praga Tools Ltd, Mazdoor Sabha (1975) 1 LLJ 218, 221 (AP), per Obul Reddi J.
16 Kesri Printing Press v Ratan Singh (1992) 1 LLJ 759, 761 (P&H) (DB), per Mongia J.
17 Mgmt of Natarajan Engg Works v G Naicker 1970 Lab IC 334 (Mad) (DB), per Anantanarayanan CJ.
18 Krishna Gold & Silver Thread Mills v Union of India 1980 Lab IC 887, 892 (Del), per Leila Seth J.
19 ITC Employees Assn, Bangalore v State of Karnataka (1981) 1 LLJ 431 (Kant), per Bopanna J.
20 Secretary, Plantation EUSI v Estate SUSI 1991 Lab IC 1393, 1403 (Ker) (DB), per KPB Marar J.
21 Britannia Biscuit Co Ltd Employees’ Union v ACL (1983) 1 LLJ 181, 190 (Mad), per Padmanabhan J.
22 Manoharan Nair v State of Kerala (1983) 1 LLJ 13, 16 (Ker), per MP Menon J.
23 Tiruchirapalli HCBE Union v Jt Registrar of CS (1992) 1 LLJ 747 [LNIND 1992 MAD 79] (Mad) (DB), per Nainar Sundaram Ag
CJ.
24 Steel Authority of India v Madhusudan Das AIR 2009 SC 1153 [LNIND 2008 SC 2075]: (2009) 3 LLJ 54 [LNIND 2008 SC 2075]
: 2008 (15) SCALE 39 [LNIND 2008 SC 2075] :, (2008) 15 SCC 560 [LNIND 2008 SC 2075], per SB Sinha J.
25 Umesh Kumar Nagpal v. State of Haryana (1994) 4 SCC 138 : 1994 (2) LLN 420.
26 Mohan Mahto v Central Coalfields Ltd, AIR 2008 SC 39 : (2007) 8 SCC 549, per Sinha J.
27 KV Raja Lakshmiah v State of Mysore AIR 1967 SC 993 [LNIND 1966 SC 288]: (1967) 2 LLJ 434 [LNIND 1966 SC 288] SC, per
Mitter J.
28 RN Bose v Union of India AIR 1970 SC 470 [LNIND 1969 SC 386]: 1970 Lab IC 402 : (1970) 1 SCC 84 [LNIND 1969 SC 386],
per SM Sikri J.
29 State of Orissa v. P Samantaray AIR 1976 SC 2617, per Singhal J.
30 Karnataka Power Corporation v K Thangappan AIR 2006 SC 1581 [LNIND 2006 SC 239]: (2006) 2 LLJ 421 [LNIND 2006 SC
239] : 2006 (4) SCALE 56 [LNIND 2006 SC 239] : (2006) 4 SCC 322 [LNIND 2006 SC 239], per Pasayat J.
31 Workmen of VM Bus Service v Labour Officer (1970) 2 LLJ 95 (Mad), per Alagiriswami J.
32 ITC Employees’ Assn, Bangalore v State of Karnataka (1981) 1 LLJ 431 (Kant), per Bopanna J.
33 Kartikeswar Panda v State of Orissa (1971) 1 LLJ 70, 72 (Ori) (DB), per Ray J.
34 Praga Tools Ltd v Praga Tools Ltd Mazdoor Sabha (1975) 1 LLJ 218, 220-21 (AP), per Obul Reddi J.
35 Philips Workers’ Union v Philips India Ltd (2000) 4 LLN (Bom) (DB), per Chandrachud J.
36 Devdas S Amin v State of Maharashtra (2001) 1 LLN 645 (Bom) (DB), per Daga J.
37 M Sundaramoorthy v Commissioner of Labour (2002) 2 LLN 1167 (Mad), per Rajan J.
38 Ramesh S & Ors v Commissioner of Labour (2010) 1 LLJ 348 (Mad .).
39 Western India Match Co v WIMCO Workers’ Union (1970) 2 LLJ 256 [LNIND 1970 SC 4] (SC), per Shelat J.
40 Raju’s Cafe v IT (1951) 1 LLJ 218 (Mad), per Rajamannar CJ.
41 State of Bombay v KP Krishnan (1960) 2 LLJ 592 [LNIND 1960 SC 125], 599-601 (SC), per Gajendragadkar J.

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42 State of Bihar v DN Ganguly (1958) 2 LLJ 634 [LNIND 1958 SC 92], 638 (SC), per Gajendragadkar J.
43 Workmen v UTI Cycles of India Ltd (1995) 2 LLJ 688, 699 (SC).
44 Alekh Bihari Rout v Union of India (2001) 2 LLN 513 (Ori), per Pasayat ACJ.
45 Hospital Employees Union v Govt of NCT of Delhi (2002) 3 LLN 356 (Del), per Sarin J.
46 Sekhar Rudra v. Oil India Ltd (2003) 2 LLJ 238 (Gau), per Ranjan Gogoi J.
47 Pix Transmissions Ltd v State of Maharashtra (2000) 4 LLN 1008 (Bom), per Khanwilkar J.
48 Bombay Port Trust Employees Union v Union of India (1999) I LLJ 175(Bom), per Lodha J.
49 Ramaswamy Palledar v Government of NCT of Delhi (2001) 1 LLN 223 (Del), per Sikri J.
50 Dhenkanal Mehentar Sanghatan v State of Orissa (2009) 3 LLJ 86 [LNIND 2008 ORI 75] : 107 (2009) CLT 189 (Ori), per Biswal
J.
51 Workmen of Oswal Weaving Factory v State of Punjab (1967) 1 LLJ 557, 566 (Punj) (DB), per Narula J.
52 Kunjuraman Nair v Secy, Government 1978 Lab IC 1169, 1171 (Ker), per Chandrashekhar Menon J.
53 Shaw Wallace & Co Ltd v State of Tamil Nadu (1988) 1 LLJ 177 [LNIND 1987 MAD 333], 186 (Mad) (DB), per Srinivasan J.
54 Mgmt. of Netha Spg Mills v Govt of AP 1990 Lab IC 451, 453 (AP), per K Ramaswamy J.
55 Moorco (India) Ltd v Tamil Nadu (1999) 1 LLN 484 (Mad), per Venkatachalam J.
56 Kamgar Utkarsha Sabha v Ghatge Patil Transport Ltd (1999) 1 LLJ 838 [LNIND 1998 BOM 750] (Bom) (DB).
57 Bombay Union of Journalists v State of Bombay (1964) 1 LLJ 351 [LNIND 1963 SC 305], 354-55 (SC), per Gajendragadkar J.
58 State of Bombay v KP Krishnan (1960) 2 LLJ 592 [LNIND 1960 SC 125], 600 (SC), per Gajendragadkar J.
59 NDDB Employees’ Union v State of Gujarat (1995) 1 LLJ 1,3 (Guj) (DB), per Mehta J.
60 Harbanslal v Labour Commissioner (1998) 2 LLN 369 (P&H), per Sat Pal J.
61 Sharad Kumar v Govt of NCT (2002) 2 LLN 872 (SC), per Mohapatra J.
62 Tamil Nadu APEU v Nuclear Power Corporation (2001) 1 LLN 468 (Mad), per Kalifulla J.
63 Vasudevan v Government of Tamil Nadu (1998) 2 LLN 581 (Mad), per Sathasivam J.
64 Sukhdev Kumar v Union of India (2000) 1 LLJ 1001 (P&H) (DB), per Garg J.
65 P Mallesha v Union of India (1999) 1 LLN 1013 (Kant) (DB), per Ashok Bhan J.
66 Gen Secy, Delhi Mazdoor Sangh v Indian Airlines (1999) 2 LLN 291 (Del), per Mudgal J.
67 Ramruch Pande v State of Maharashtra (2002) 4 LLN 253 (Bom) (DB), per Lodha J.
68 Rajivbhai K Davera v Union of India (2008) 2 LLJ 1156,(Guj.).
69 Sukhdev Kumar v Union of India (1999) 2 LLN 534 (P&H) (DB), per Garg J.
70 Canara Bank Staff Union v Union of India (1998) 1 LLN 893 (Ker), per Lakshmanan J.
71 Bombay Union of Journalists v State of Bombay (1964) 1 LLJ 351 [LNIND 1963 SC 305], 354-55 (SC), per Gajendragadkar J.
72 State of Bombay v KP Krishnan (1960) 2 LLJ 592 [LNIND 1960 SC 125], 600 (SC), per Gajendragadkar J.
73 Andrew Yule & Co CS Union v Mgmt. (1996) 1 LLJ 524, 529 (Cal) (DB), per NK Bhattacharya J.
74 Bombay Union of Journalists v State of Bombay (1964) 1 LLJ 351 [LNIND 1963 SC 305], 354-55 (SC), per Gajendragadkar J.
75 Jagdish Prasad v State of Bihar 1982 Lab IC 1263 (Pat) (DB).
76 NDDB Employees’ Union v State of Gujarat (1995) 1 LLJ 1, 3 (Guj) (DB), per Mehta J.
77 Mysore SP and Potteries Ltd v State of Karnataka (1998) 3 LLN 265 (Kant), per Goud J.
78 Saurashtra Employees Union v SDO (2000) 2 LLJ 797 (Guj), per Bhatt J.
79 Mohan Lal v State of Rajasthan (1998) 4 LLN 499 (Raj), per Singhal J.
80 Wadson Masiha v Union of India (2002) 3 LLN 988 (MP), per Mishra J.
81 Bombay Union of Journalists v State of Bombay (1964) 1 LLJ 351 [LNIND 1963 SC 305], 354-55 (SC), per Gajendragadkar J.
82 Atic Employees Union v State of Gujarat (1984) 2 LLJ 336 -37 (Guj) (DB), per Majumdar J.
83 Tamil Nadu CMPPF Ltd v TNDDCE Union (1985) 2 LLJ 533, 537 (Mad) (DB), per Ramanujam J.

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84 Shaw Wallace & Co Ltd v State of Tamil Nadu (1988) 1 LLJ 177 [LNIND 1987 MAD 333], 195 (Mad) (DB), per Srinivasan J.
85 Hira Cement Workers Union v State of Orissa (2001) 2 LLN 516 (Orr), per Naidu J.
86 Bombay Union of Journalists v State of Bombay (1964) 1 LLJ 351 [LNIND 1963 SC 305], 354-55 (SC), per Gajendragadkar J.
87 Workman of Sundaram Industries Ltd v Mgmt. (1997) 2 LLJ 1090 [LNIND 1997 MAD 792] (Mad) (DB), per Lakshmanan J.
88 Maize Products v Gujarat Kamgar Panchayat (2003) 4 LLJ 1011 (Guj), per PB Majumdar J.
89 Babu Lal v State Bank of Bikaner and Jaipur (2002) 1 LLJ 145 (Raj), per Gyan Sudha Misra J.
90 State of Bombay v KP Krishnan (1960) 2 LLJ 592 [LNIND 1960 SC 125], 602 (SC), per Gajendragadkar J.
91 Bombay Union of Journalists v State of Bombay (1964) 1 LLJ 351 [LNIND 1963 SC 305], 358 (SC), per Gajendragadkar J.
92 Hochtief Gammon v State of Orissa (1975) 2 LLJ 418 [LNIND 1975 SC 322], 428 (SC), per Alagiriswami J.
93 Engineering Staff Union v State of Bombay (1959) 1 LLJ 479 [LNIND 1958 BOM 126], 495 (Bom) (DB), per Chagla CJ.
94 Coimbatore DTMS Union v State of Madras (1967) 2 LLJ 407, 411 (Mad), per Kailasam J.
95 National Union of Comml. Employees v State of Maharashtra (1968) 2 LLJ 169 (Bom), per Thakker J.
96 Dalmianagar Mazdoor Union v State of Bihar (1969) 1 LLJ 358 (Pat) (DB), per Untwalia J.
97 State of Bombay v KP Krishnan (1960) 2 LLJ 592 [LNIND 1960 SC 125] (SC), per Gajendragadkar J.
1 Workmen of Oswal Weaving Factory v State of Punjab (1967) 1 LLJ 557, 566 (Punj) (DB), per Narula J.
2 Engineering Staff Union v State of Bombay (1959) 1 LLJ 479 [LNIND 1958 BOM 126], 494 (Bom) (DB), per Chagla CJ.
3 Bombay Union of Journalists v State of Bombay (1964) 1 LLJ 351 [LNIND 1963 SC 305], 355 (SC), per Gajendragadkar J.
4 Workmen of J & P Coats (I) Pvt Ltd v State of Kerala 1978 Lab IC 265, 267 (Ker) (DB), per Eradi J
5 Bombay Union of Journalists v State of Bombay (1964) 1 LLJ 351 [LNIND 1963 SC 305], 355 (SC), per Gajendragadkar J.
6 Engineering Staff Union v State of Bombay (1959) 1 LLJ 479 [LNIND 1958 BOM 126], 493 (Bom) (DB), per Chagla CJ.
7 Allcroft v Lord Bishop of London, Lighton (1891) AC 666, 681 observation of Lord Herschell.
8 Engineering Staff Union v State of Bombay (1959) 1 LLJ 479 [LNIND 1958 BOM 126], 493 (Bom) (DB), per Chagla CJ.
9 V Shivshankar v State of Karnataka 1981 Lab IC 648, 651 (Kant), per Sabhahit J.
10 Sri Chitra Mills Workers’ Union v State of Kerala (1958) 1 LLJ 295 (Ker), per MS Menon J.
11 Dalmianagar Mazdoor Union v State of Bihar (1969) 1 LLJ 358, 361-62 (Pat) (DB), per Untwalia J.
12 Western India Match Co v WIMCO Workers’ Union (1970) 2 LLJ 256 [LNIND 1970 SC 4] (SC), per Shelat J.
13 See notes and comments under s 10(1).
14 Wings Wear Corpn v Workmen of Wings Wear Corpn 1989 Lab IC 974, 978 (Del) (DB), per Saharya J.
15 Workmen of J & P Coats (I) Pvt Ltd v State of Kerala 1978 Lab IC 265, 267 (Ker) (DB), per Eradi J.
16 Barauni TSM Union v State of Bihar 1977 Lab IC 483, 488 (Pat) (DB), per HL Agrawal J.
17 Nirmal Singh v State of Punjab 1984 Lab IC 1312 [LNIND 1984 SC 203]-13 (SC), per Chandrachud CJI.
18 State of Bombay v KP Krishnan (1960) 2 LLJ 592 [LNIND 1960 SC 125], 599-600 (SC), per Gajendragadkar J.
19 Bombay Union of Journalists v State of Bombay (1964) 1 LLJ 351 [LNIND 1963 SC 305] (SC), per Gajendragadkar J.
20 Workmen of Oswal Weaving Factory v State of Punjab (1967) 1 LLJ 557, 566 (Punj) (DB), per Narula J.
21 State of Bombay v KP Krishnan (1960) 2 LLJ 592 [LNIND 1960 SC 125]. 602 (SC), per Gajendragadkar J.
22 Bombay Union of Journalists v State of Bombay (1964) 1 LLJ 351 [LNIND 1963 SC 305], 355 (SC), per Gajendragadkar J.
23 Barauni TSM Union v State of Bihar 1977 Lab IC 483, 486-7 (Pat) (DB), per HL Agrawal J.
24 State of Madras v CP Sarathy (1953) 1 LLJ 174 [LNIND 1952 SC 84] (SC), per Patanjali Sastri CJI.
25 R v Paddington VO ex p PP Corpn Ltd [1965] 2 All ER 836, 842 (CA), per Lord Denning.
26 Kunjuraman Nair v Secy to Govt. 1978 Lab IC 1169 -70 (Ker), per Chandrashekhara Menon J.
27 Workmen of CC of Commerce v State of Kerala (1976) 2 LLJ 108 (Ker), per Subramoniam Poti J.
28 Dalmianagar MS Sangh v State of Bihar (1974) 1 LLJ 35 -36 (Pat) (DB).

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29 Ashwini Kumar Mohanty v BM, State Bank of B &J 1992 Lab IC 1780, 1786 (Ori) (DB), per Jagadeb Roy J.
30 Barauni TSM Union v State of Bihar 1977 Lab IC 483, 488 (Pat) (DB), per HL Agrawal J.
31 Workmen of Punjab DDC Ltd v State of Punjab 1982 Lab IC 1273, 1275 (P&H), per Punchhi J.
32 Bharat Petroleum Corpn Employees Union v HN Thadani 1991 Lab IC 1183, 1187 (Bom), per Daud J.
33 Barauni TSM Union v State of Bihar 1977 Lab IC 483, 488 (Pat) (DB), per HL Agrawal J.
34 KN Vellayan v Government of Tamil Nadu (1979) 2 LLJ 186 [LNIND 1979 MAD 67] (Mad) (DB), per Ramanujam J.
35 Delhi Cloth and General Mills Ltd v Shambhu Nath Mukherjee (1978) 1 LLJ 1 [LNIND 1977 SC 280] (SC), per Goswami J.
36 Tamil Nadu JAC &TT Union v Govt of Tamil Nadu (1987) 1 LLJ 105 [LNIND 1986 SC 264] (SC), per Chinnappa Reddy J.
37 Onkar Nath Kapoor v Union of India 1979 Lab IC 1341 (All) (DB), per KN Singh J.
38 R Vasantha Selvakumari v State of Tamil Nadu 1985 Lab IC 1064 (Mad), per Ratnam J.
39 TELCO CD Mazdoor Sangh v State of Bihar 1989 Lab IC 1546, 1548 (SC), per MM Dutt J.
40 NDDB Employees’ Union v State of Gujarat (1995) 1 LLJ 1, 3 (Guj) (DB), per Mehta J.
41 Ram Avtar Sharma v State of Haryana (1985) 2 LLJ 187 [LNIND 1985 SC 122], 191 (SC), per Desai J.
42 K Ramaswamy v Government of Tamil Nadu (1979) 2 LLJ 304 (Mad), per Padmanabhan J.
43 Chandra Pratap Singh v Uttar Pradesh SCC Ltd 1988 Lab IC (NOC) 33 (All) (DB).
44 Wings Wear Corpn v Workmen of Wings Wear Corpn 1989 Lab IC 974, 978 (Del) (DB), per Saharya J.
45 Workmen of WW Corpn v Lieutenant Governor, Delhi 1984 Lab IC 798, 800 (Del), per GC Jain J.
46 Radhshyam Rout v State of Orissa (1979) 2 LLJ 396 (Ori) (DB), per RN Mishra J.
47 C Munichowdappa v State of Karnatak a (1985) 1 LLJ 356 (Kant) (DB), per Murlidhar Rao J.
48 Workmen of Syndicate Bank v Govt of India (1985) 1 LLJ 93 [LNIND 1984 SC 301]-94 (SC).
49 Ram Avtar Sharma v State of Haryana (1985) 2 LLJ 187 [LNIND 1985 SC 122] (SC), per Desai J.
50 Madhya Pradesh Irrigation Karmachari Sangh v State of MP 1985 Lab IC 932 (SC), per Khalid J.
51 Jute Mills Staff Assn v State of Bihar 1991 Lab IC 337, 339 (Pat) (DB)
.
52 N Balakrishnan v Government of Tamil Nadu (1987) 2 LLJ 43 (Mad), per Ramaswami J.
53 Government of Tamil Nadu v K Subramaniam 1987 Lab IC 387, 389-90 (Mad) (DB), per Natarajan J.
54 All India P&DWF v Union of India (1989) 2 LLJ 600, 607-08 (Bom), per Ashok Agarwai J.
55 Bombay Union of Journalists v State of Bombay (1964) 1 LLJ 351 [LNIND 1963 SC 305], 355 (SC), per Gajendragadkar J.
56 Karlikeswar Panda v State of Orissa (1971) 1 LLJ 70, 73 (Ori) (DB), per Ray J.
57 Bombay Union of Journalists v State of Bombay (1964) 1 LLJ 351 [LNIND 1963 SC 305], 355 (SC), per Gajendragadkar J.
59 Ibid.
60 Bombay Union of Journalists v State of Bombay (1964) 1 LLJ 351 [LNIND 1963 SC 305], 354-55 (SC), per Gajendragadkar J.
61 Workmen of Oswal Weaving Factory v State of Punjab (1967) 1 LLJ 557, 566 (Punj) (DB), per Narula J.
62 Bombay Union of Journalists v State of Bombay (1964) 1 LLJ 351 [LNIND 1963 SC 305], 354 (SC), per Gajendragadkar J.
63 Rajkumari v State of Himachal Pradesh 1989 Lab IC 841, 844 (HP) (DB), per Desai CJ.
64 HM Venkatachaliah v State of Mysore (1971) 1 LLJ 41, 42 (Mys) (DB), per Somnath Iyer J.
65 Amritsar Textile Clerks’ Assn v State of Punjab (1968) 2 LLJ 343 (Punj), per JN Kaushal J.
66 Karnataka CCE Assn v State of Karnataka 1989 Lab IC 1022 (Kant), per Chandrakantaraj Urs J.
67 Nirmal Singh v State of Punjab 1984 Lab IC 1312 [LNIND 1984 SC 203]-13 (SC), per Chandrachud CJI.
68 Kerala PM&M Workers’ Federation v State of Kerala (1993) 1 LLJ 401, 403 (Ker), per KA Nayar J.
69 Federation of IBE Union v Government of India 1991 Lab IC 65 (Mad) (DB).
70 Indian Oxygen Employees’ Union v State of TN (1992) 1 LLJ 583, 592 (Mad) (DB), per Janarthanam J.

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71 Bombay Union of Journalists v State of Bombay (1964) 1 LLJ 351 [LNIND 1963 SC 305], 354 (SC), per Gajendragadkar J.
72 TS Sivasubrahmanyam v State of Madras (1968) 2 LLJ 89 (Mad), per Venkatadari J.
73 Onkar Chand Dutta v State of Himachal Pradesh 1989 Lab IC 470, 475 (HP) (DB), per PD Desai CJ.
74 Engineering Staff Union v State of Bombay (1959) 1 LLJ 479 [LNIND 1958 BOM 126] (Bom) (DB), per Chagla CJ.
75 Secretary, MMT Employees Union v State of Kerala (1977) 2 LLJ 79, 81 (Ker) (DB), per Eradi J.
76 Mypower MW Union v Secretary-and-Commr, SWD 1996 Lab IC 107, 109 (Kant), per Saldhanha J.
77 SA de Smith, Judicial Review of Administrative Action, pp 297-300.
78 DR Fraser & Co Ltd v Minister of National Revenue [1949] AC 24, 36, per Lord Macmillan J.
79 Ex p Tebbit [1917] 116 LT 85 per Lord Reading CJ.
80 Roberts v Hopwood [1925] AC 578, 600, per Lord Atkinson.
81 R v Bowman [1898] 1 QBD 663 , 666, per Wills J.
82 R v Paddington VO, ex p PP Corpn Ltd [1965] 2 All ER 836, 842 (CA), per Lord MR Denning.
83 Roberts v Hopwood [1925] AC 578, 600, per Lord Atkinson.
84 Associated PPH Ltd v Wednesbury Corpn [1948] 1 KB 223, 233-34 (CA), per Lord MR Greene.
85 Baldwin & Francis Ltd v Patents Appeal Tribunal [1959] 2 All ER 433, 447 (HL), per Lord Denning.
86 Mgmt of Natarajan Engg Works v G Naicker 1970 Lab IC 334 (Mad) (DB), per Anantanarayanan CJ.
87 In Re Poyser and Mills’ Arbitration [1963] 2 WLR 1309.
88 State of Bombay v KP Krishnan (1960) 2 LLJ 592 [LNIND 1960 SC 125], 600 (SC), per Gajendragadkar J.
89 Central Regional WK Sangh v State of UP 1972 Lab IC 75 -76 (All), per Gulati J.
90 Royal Calcutta Golf Club Mazdoor Union v State of West Bengal (1957) 1 LLJ 218 [LNIND 1956 CAL 118] (Cal), per Sinha J.
91 Ramachandra Abaji Pawar v State of Bombay AIR 1952 Bom 293 [LNIND 1951 BOM 176] (DB), per Chagla CJ.
92 Harman Singh v Regional Transport Authority [1954] SCR 371 [LNIND 1953 SC 105], 377, per Mahajan J.
93 Workers and Staff Assn of GSF v State of Mysore 1971 Lab IC 79, 82 (Mys) (DB), per Narain Pai J.
94 Pratap Singh v State of Punjab (1966) 1 LLJ 458 [LNIND 1963 SC 211]. 464 (SC), per Ayyanagar J.
95 Rajindra Roy v Union of India 1993 Lab IC 446 (SC), per GN Ray J.
1 State of Bombay v KP Krishnan (1960) 2 LLJ 592 [LNIND 1960 SC 125], 596, 604 (SC), per Gajendragadkar J.
2 Bombay Port Trust Employees’ Union v Union of India (1988) 2 LLJ 39, 41 (Bom), per Bharucha J.
3 Workmen v UTI Cycles of India Ltd (1995) 2 LLJ 688, 699 (SC).
4 ITC Ltd v Non-Pensioners Assn (1996) 1 LLJ 1106, 1110 (AP) (DB), per Hanumanthappa J.
5 Bombay Union of Journalists v State of Bombay (1961) 1 LLJ 727, 731 (SC), per Mudholkar J.
6 Workmen of OWCP & Sales Society v State of Madras (1966) 2 LLJ 887 (Mad), per Kailasam J.
7 Sankari Cement ATM Sangam v Govt of Tamil Nadu (1983) 1 LLJ 460 [LNIND 1981 SC 415] (SC), per Desai J.
8 Nirmal Singh v State of Punjab 1984 Lab IC 1312 [LNIND 1984 SC 203]-13 (SC), per Chandrachud CJI.
9 K Veerarajan v Government of Tamil Nadu (1987) 1 LLJ 209 [LNIND 1987 SC 49], 214 (SC), per Ranganath Misra J.
10 TELCO Convoy DM Sangh v State of Bihar 1989 Lab IC 1546, 1548 (SC), per MM Dutt J.
11 Kanshahal Mazdoor Union v State of Orissa (1995) 1 LLJ 295, 297 (Ori) (DB), per SK Mohanty J.
12 Papanasam Labour Union v State of Madras (1959) 1 LLJ 526 [LNIND 1958 MAD 158] (Mad), per Balakrishnan Ayyer J.
13 Colliery Mazdoor Congress v New Birbhum Coal Co Ltd [1952] LAC 219(LAT).
14 Sree Type Foundry v State of West Bengal (1962) 1 LLJ 715 [LNIND 1961 CAL 172] (Cal), per BN Banerjee J.
15 ITC Employees Assn v State of Karnataka (1981) 1 LLJ 431, 449 (Kant), per Bopanna J.
16 All India Bombay Tyres IEF v CB Dinagre 1993 Lab IC 817 (Bom), per K Sukumaran J.

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O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER IV Procedure, Powers and Duties of Authorities

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER IV Procedure, Powers and Duties of Authorities

S. 13. Duties of Board.—

(1) Where a dispute has been referred to a Board under this Act, it shall be the duty of the Board to endeavour to
bring about a settlement of the same and for this purpose the Board shall, in such manner as it thinks fit and
without delay, investigate the dispute and all matters affecting the merits and the right settlement thereof and may
do all such things as it thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement
of the dispute.
(2) If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the conciliation
proceedings, the Board shall send a report thereof to the appropriate Government together with a memorandum of
the settlement signed by the parties to the dispute.
(3) If no such settlement is arrived at, the Board shall, as soon as practicable after the close of the investigation, send
to the appropriate Government a full report setting for the proceedings and steps taken by the Board for
ascertaining the facts and circumstances, relating to the dispute and for bringing about a settlement thereof,
together with a full statement of such facts and circumstances, its findings thereon, the reasons on account of
which, in its opinion, a settlement could not be arrived at and its recommendations for the determination of the
dispute.
(4) If, on the receipt of a report under sub-section (3) in respect of a dispute relating to a public utility service, the
appropriate Government does not make a reference to a 17[Labour Court, Tribunal or National Tribunal] under
section 10, it shall record and communicate to the parties concerned its reasons therefor.
(5) The Board shall submit its report under this section within two months of the date 18[on which the dispute was
referred to it] or within such shorter period as may be fixed by the appropriate Government:

Provided that the appropriate Government may from time to time extend the time for the submission of the
report by such further periods not exceeding two months in the aggregate:

Provided further that the time for the submission of the report may be extended by such period as may be
agreed on in writing by all the parties to the dispute.

LEGISLATION

This section is somewhat analogous to s 7 of the repealed Trade Disputes Act, 1929, and it was enacted in the original
Industrial Disputes Act of 1947. The subsequent amendments of section have been indicated in the footnotes to the text of
the section.

SCOPE OF POWERS AND DUTIES OF BOARDS

‘Board’ has been defined in s 2(c). ‘Conciliation proceedings’ has been defined in s 2(e) to mean any proceeding held by a
conciliation officer or Board under this Act. The scope of the powers and duties of Board under s 13 is much larger than
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

the scope of the powers and duties of conciliation officer under s 12.

SUB-SECTION (1): DUTY TO BRING ABOUT THE SETTLEMENT

Unlike a conciliation officer under s 12(1), a Board under sub-s (1) of s 13 acquires jurisdiction to start conciliation
proceedings only on reference being made to it by the ‘appropriate Government’ under s 10(1). On such reference being
made, the Board shall commence conciliation proceedings with a view to bring about an amicable settlement of the dispute
referred to it. Like a conciliation officer, the Board also endeavours to bring about a settlement of a dispute. Its powers are
wider than those of a conciliation officer, but its functions are substantially the same.19 In the course of its endeavour to
bring about a settlement, the Board has been vested with the powers:

(i) to investigate the dispute and all matters affecting the merits and the right settlement of the dispute and for this purpose to
act without delay and in such manner as it thinks fit;
(ii) to induce the parties to come to a fair and amicable settlement of the dispute; and

(iii) to do all such things as it may think fit for that purpose.

SUB-SECTION (2): SETTLEMENT OF DISPUTES

This sub-section is analogous to sub-s (3) of s 12. [See notes and comments under sub-s (3) of s 12 ].

SUB-SECTION (3): FAILURE REPORT

This sub-section is analogous to s 12(4), but its requirements are much wider than those of s 12(4). [See notes and
comments under s 12(4) ]. Under this sub-section, as soon as practicable after the close of the investigation under sub-s (1),
the Board has to make a full report of the appropriate Government setting forth:

(i) the steps taken by it for ascertaining the facts and circumstances relating to the dispute;

(ii) the steps taken by it for bringing about a settlement of the dispute;

(iii) a statement of the facts and circumstances ascertained by it in the course of investigation;

(iv) its findings on the facts and circumstances ascertained;

(v) the reasons on account of which, in the opinion of the board, a settlement could not be arrived at; and

(vi) its recommendations for the determination of the dispute.

SUB-SECTION (4): DUTY TO RECORD AND COMMUNICATE REASONS

Under this sub-section, if on receipt of the failure-report made by the Board in respect of a dispute relating to a public
utility service, the appropriate Government does not make a reference to a labour court, tribunal or national tribunal under
s 10, it shall record and communicate to the parties concerned its reasons therefor. The provisions of s 13 considered as a
whole clearly indicate that the power to make a reference in regard to dispute referred to the board is undoubtedly to be
found in s 10(1). In regard to non-public utility services, there is no ‘express provision made authorising the Government
to make a reference. In case of a public utility service, it is open to the Government to refer a dispute under s 10(1) to a
board, and if the board fails to bring about a settlement between the parties, the Government will be entitled either to refer
or to refuse to refer the dispute for adjudication under s 10(1) of the Act. The second proviso to s 10(1) enjoins upon the
appropriate Government to make a reference where a dispute relates to a public utility service and a notice under s 22 has
been given.

SUB-SECTION (5): PERIOD WITHIN WHICH THE REPORT SHALL BE SUBMITTED

This sub-section prescribes, for the board, the maximum period of two months for submitting its report from the date on
which the dispute was referred to it. The first proviso empowers the appropriate Government to extend the time maximum
by another two months suo motu and the second proviso empowers it to further extend the period if all the parties agree to
that in writing.

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17 Subs by Act 36 of 1956, s 11, for ‘tribunal’ (wef 10-3-1957).

18 Subs by Act 40 of 1951, s 6, for ‘of the notice under section 22 ’ (wef 26-5-1951).
19 State of Bombay v KP Krishnan (1960) 2 LLJ 592 [LNIND 1960 SC 125], 601 (SC) : AIR 1960 SC 1223 [LNIND 1960 SC 125]:
1961 (63) Bom LR 127, per Gajendragadkar J.

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER IV Procedure, Powers and Duties of Authorities

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER IV Procedure, Powers and Duties of Authorities

S. 14. Duties of Courts.—

A Court shall inquire into the matters referred to it and report thereon to the appropriate Government ordinarily within a
period of six months from the commencement of its inquiry.

LEGISLATION

This section was enacted in the original Act of 1947 and is based on s 5 of the repealed Trade Disputes Act 1929 and it has
not undergone any amendment. ‘Court’ has been defined as a court of inquiry in s 2(f) of the Act.

JURISDICTION AND DUTIES OF COURTS OF INQUIRY

The court acquires jurisdiction on a reference made to it under s 10(1). Courts of inquiry are constituted under s 6 for
inquiring into ‘any matter appearing to be connected with or relevant to an industrial dispute’. The procedure and powers
of the court have been dealt with under s 11. The duties of a court of inquiry as laid down in s 14 have to be considered in
the light of s 11. The first duty of the court is to inquire into the matter referred to it. It is not that all sorts of matters can be
referred to the court of inquiry. The language of s 6 makes it clear that such court is constituted for the purpose of inquiring
into ‘any matter appearing to be connected with or relevant to an industrial dispute’. In other words, it is only those matters
which are appearing to be connected with or relevant to an industrial dispute that can be referred under s 10(1) to a court of
inquiry. The second duty of the court is to make a report to the appropriate Government on the inquiry held by it on the
matters referred to it, ordinarily within a period of six months from the date of commencement of the inquiry. The word
‘ordinarily’ qualifying ‘the period of six months’ appears to indicate that the period can be extended. Even if the period is
not extended, the inquiry made beyond the period of six months will not be rendered illegal as the provision in this respect
appears to be only directory.

End of Document
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER IV Procedure, Powers and Duties of Authorities

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER IV Procedure, Powers and Duties of Authorities

20[S. 15. Duties of Labour Courts, Tribunals and National Tribunals.—

Where an industrial dispute has been referred to a Labour Court, Tribunal or National Tribunal for adjudication, it shall
hold its proceedings expeditiously and shall,21 [within the period specified in the order referring such industrial dispute or
the further period extended under the second proviso to sub-section (2A) of section 10 ], submit its award to the
appropriate Government.]

ADJUDICATORY BODIES UNDER SECTION 15

There are three adjudicatory authorities under the Act, viz:

(i) labour courts

(ii) Industrial tribunals

(iii) National tribunals

These authorities are discharging functions similar to those of courts, although they are not courts in the technical sense of
the word.22 To use a well-known expression they have ‘all the trappings of court’ and perform functions which cannot but
be regarded as judicial.23 The decisions of these authorities are not ‘awards’ in the sense in which that term was used in the
Arbitration Act 1940. An ‘award’ under this Act cannot be filed in court, nor is there any provision for applying to the
court to set it aside. All considerations that apply to an ‘award’ under this Act, cannot be said to apply to an award made
under the Arbitration Act.24

DUTIES OF TRIBUNALS, ETC

The duties of tribunals, etc, under s 15 are threefold:

(i) To hold Proceedings Expeditiously

The whole object of the Act is to ensure peace and harmony in the functioning of industry with a view to achieve
maximum industrial productivity. With this object in view, the legislature has enjoined upon the adjudicatory bodies under
the Act to hold adjudicatory proceedings expeditiously. As these bodies are not encumbered with the technicalities of
procedure under the procedural law or the Evidence Act 1872, the proceedings before them should not involve the delays
of the civil courts.

(ii) Adjudication

The adjudicatory authorities, in law, are under a statutory obligation to adjudicate the disputes referred to them by the
appropriate Government. This function has to be discharged by them in accordance with the procedure laid down in the
Act and the rules framed thereunder. The adjudicator is also under a statutory obligation, to grant relief as it may think fit
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

and proper. He is to exercise jurisdiction conferred on him by making adjudication and such jurisdiction cannot be avoided
or relinquished. In Jai Bhagwan, the Supreme Court observed:

...the tribunal to whom the dispute has been referred has no discretion to decide whether to adjudicate or not. Once a reference has
been properly made to industrial tribunal, the dispute has to be duly resolved by the industrial tribunal. Resolution of the dispute
cannot be avoided by the tribunal on the ground that the workman had failed to pursue some other remedy.25

This is illustrated by a Division Bench decision of the Calcutta High Court in GN Vohra, wherein the tribunal had
refrained from adjudicating the dispute referred to it relating to the dismissal of certain workmen on the ground that they
had elected to seek their relief before the labour court under s 33C(2). The High Court quashed the award of the tribunal
for failure to exercise the jurisdiction.26 However, during the course of adjudication before the tribunals occasionally the
workmen give up or do not press some of their demands. Consequently, they do not lead any evidence relating to such
demands. In the absence of any evidence on record, it would be impossible to adjudicate on the merits of such demands. In
such situations, the tribunal has to content itself by recording the statement that the demands were given up or not pressed.
This itself will constitute adjudication of the dispute.27

(iii) Submission of Award

This section has been amended by the Amending Act 46 of 1982.28 Sub-section (2A) inserted in s 10 has engrafted the
requirements of specifying the period of adjudication in the order of reference. The first proviso to that sub-section has
made it incumbent on the adjudicators to submit their awards within a maximum period of three months in cases involving
disputes of individual nature. The second proviso has empowered the adjudicators to extend the period of adjudication in
their discretion. As a sequel to that amendment, this section has been amended to make it clear that the adjudicators will
submit their awards within the period specified in the second proviso to sub-s (2A) of s 10.

JURISDICTION TO ADJUDICATE

[For the scope of jurisdiction of tribunals under s 15, see notes and comments under ss 10(4), 33, 33A, 33C and 36A.]

20 Subs by Act 36 of 1956, s 12, for s 15 (wef 10-3-1978).

21 Subs by Act 46 of 1982, s 10, for “as soon as it is practicable on the conclusion thereof” (wef 21-8-1984).
22 Bharat Bank Ltd v Employees of Bharat Bank (1950) LLJ 921 [LNIND 1950 SC 4], 922 (SC), per Kania CJI.
23 Ibid, p 923, Fazal Ali J.
24 S Dutt v University of Delhi AIR 1958 SC 1050 [LNIND 1958 SC 97], 1056, per AK Sarkar J.
25 Jai Bhagwan v Mgmt of Ambala CCB Ltd 1983 Lab IC 1694, 1696 (SC), per Chinnappa Reddy J.
26 Oil India Ltd v GN Vohra 1977 Lab IC 1610, 1613 (Cal) (DB), per SK Datta J.
27 Glaxo Laboratories (India) Ltd v PO, LC 1977 Lab IC 1523, 1533-34 (AP) (DB), per Sheth J.
28 Brought into force wef 21 August 1984.

End of Document

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O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER IV Procedure, Powers and Duties of Authorities

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER IV Procedure, Powers and Duties of Authorities

29[S. 16. Form of Report or Award.—

(1) The report of a Board or Court shall be in writing and shall be signed by all the members of the Board or Court,
as the case may be:

Provided that nothing in this section shall be deemed to prevent any member of the Board or Court from
recording any minute of dissent from a report or from any recommendation made therein.

(2) The award of a Labour Court or Tribunal or National Tribunal shall be in writing and shall be signed by its
presiding officer.]

SUB-SECTION (1): REPORT OF BOARD AND COURT

Sub-section (1) makes it incumbent on all members of the Board or a court of inquiry to affix their signatures to the report
submitted by them to the appropriate Government. The proviso to this sub-section clarifies the position that the
requirement that all members should affix their signatures to the report should not be deemed to imply that any member
choosing to dissent from a report or from any recommendation made therein is in any way prevented from doing so. It has
already been noticed that a report of the inquiry court is the report about its investigation and a report of the Board is the
report about the conciliation proceedings held by it, ie, settlement report or failure report. [See note and comments under s
13 .]

SUB-SECTION (2): AWARD

The term ‘award’ has been defined in s 2(b) of the Act to mean an interim or final ‘determination’ of an industrial dispute
or any question relating thereto by a labour court, industrial tribunal or .national industrial tribunal, and includes an
arbitration award made under s 10A of the Act.30 After the evidence of the parties is concluded and all the necessary
documents have been put in, the authority to whom the dispute has been referred has to decide the dispute, and embody its
decision in the form of an award. In making his award the adjudicator must pay particular attention to certain points which
are essential to its validity. Some of the points may be considered in the following order:

(i) Time of making the Award

Sub-section (2A) of s 10 now requires the appropriate Government to specify the period of adjudication in each order of
reference. The first proviso to that sub-section requires the adjudicators to submit their awards in cases of the disputes of
individual nature, while the second proviso vests the discretion in the adjudicators to extend the period. The award,
therefore has to be submitted within the specified or extended time, as the case may be.

(ii) Form of the Award

Sub-section (2) requires that an award made by a labour court, tribunal or national tribunal, ‘shall be in writing’ and
‘signed by its presiding officer’. Sub-section (4) of s 10A requires that the award of an arbitrator under that section shall be
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

‘signed by the arbitrator’. The requirement of an arbitral award to be in ‘writing’ is implicit in this. Further, s 17 requires
that such awards are to be published by the appropriate Government. An unsigned award will, therefore, not be operative
in law.31 Furthermore, the award must be signed by the presiding officer who heard the matter. An award heard by one
presiding officer, but signed by his successor who did not hear the case at all will be illegal and vitiated for want of
jurisdiction because he does not have the authority to sign the award without hearing the case. This will constitute a
material irregularity touching the rights of the parties. Such an award will not be an award in the eyes of law.32 Although
such awards are to be in writing, no particular form has been prescribed. However, in preparing an award, care has to be
taken to avoid any question arising in the future as to its validity. Broadly, an award usually consists of two parts, viz, (i)
the recitals, and (ii) the operative part.

(a) The Recitals

Normally, an award should contain introductory matter by way of recitals. However, it is not necessary for its validity to
preface the award with recitals, but in many cases they may be added with advantage, especially where the nature of the
award, or certain part of it may be difficult to understand without some preliminary explanation. If recitals are introduced,
they should be full and clear, and should be so drawn as to lead up to the operative part of the award. They must also be
consistent with the subsequent parts of the award. The following matters may, advantageously be referred to in the recitals
where they are included in the awards:

(i) the name of the appropriate Government;

(ii) parties to the dispute;

(iii) existence or apprehension of the dispute between the parties;

(iv) points of dispute specified in the order of reference or any matters relating thereto; and

(v) the subject-matter of reference, namely, the genesis of the dispute.

The fact that the recitals are incorrect or incomplete will not, however, vitiate the award. However, as an inaccurate recital
might lead to a misconstruction of the award, it is highly desirable to guard against an error of this kind.

(b) The Operative Part

By operative part of an award is meant the decision of the adjudicator upon the matters in dispute under reference. It is the
only real and essential part in an award. It is the duty of the adjudicator or arbitrator to give a decision upon the disputes
which have been referred, and, so long as he gives a clear decision, the form or words in which it is expressed are of no
importance. However, there are many points to be observed in an order. It may be clear that a full and complete decision
has been given, and all the requisites have been satisfied for a valid and binding award.

(iii) Essentials of an Award

Section 10(4) requires that an award of an adjudicator should be confined to the points specified for adjudication in the
order of reference and matters incidental thereto. It is, therefore, clear that the jurisdiction of the adjudicator is limited to
giving decision upon such points and matters only. He has no authority to investigate other matters or give decision
thereon. Hence, where the adjudicator goes beyond such points or matters, his award will not bind the parties so far as it
applies to matters outside the order of reference. The award, to the extent it exceeds jurisdiction, will be quashable. The
exact effect of such excess of jurisdiction will depend upon the award itself. If it is severable, ie, if that part of the award
can be separated from the remainder, the award will be good as to the former part and bad as to the rest; but the good and
the bad parts must be severable. If the good and bad parts cannot be separated, the whole award will be bad. The award
must be so expressed that parties may know exactly what decision has been given by the adjudicator—Id certum est quod
certum reddi potest. In other words, the parties must be able to ascertain from the award what must be done by them to
satisfy its requirements. The following are some pertinent points upon which certainties are required in the award:

(i) The parties to be bound by or to perform the award must be certain.

(ii) If the payment of a sum of money by one party to another is directed, the amount to be paid must be specified, or some
rule or direction given by which the sum to be paid may be calculated without any doubt.
(iii) If the performance of any conditions or terms is directed by the award, such conditions or terms must be clearly defined,
and specific directions should be given as to their proper performance.

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(iv) The time for performance of the award, or of any conditions or terms contained therein, must be expressly fixed, or such
directions given as will enable the time to be easily determined.

If the award is not certain in its meaning, it will be bad, and it may be remitted to the adjudicator for the uncertainty to be
removed unless from its terms a specific and certain meaning can be deduced. An award will not be bad for lack of
certainty and held to be inconclusive, if it contains sufficient indications of the intention of the adjudicator. However, it is
always preferable to prepare an award in clear and unmistakable terms in the first instance than to risk the consequences of
a careless and ill-expressed decision. As a corollary to the rule of certainty, an award must be consistent in all its parts, and
not ambiguous or contradictory. It applies, particularly to cases where several items have been referred for adjudication, or
where from the nature of the dispute, the award directs the performance of certain terms and conditions. In such cases, care
must be taken to see that the findings on the terms and conditions are consistent with one another and with the general
implication of the award. The award must determine the points in dispute though such determination may be ‘interim’ or
‘final’.33 In order to be binding, an award must provide for settlement of all the points referred for adjudication, so that the
parties to the dispute are able to know their legal position without having to resort to further judicial inquiry. The award
must decide all the points covered by the order of reference and raised by the parties to the reference otherwise it will be
vitiated. In deciding the points specified in the order of reference or any matter relating thereto, the tribunal is required to
discuss the materials on which it bases its findings. Mere reference to certain documents without indicating as to what they
say is not enough. When the materials which are the basis of the findings are not disclosed, it will be open to the reviewing
court to examine whether the inference drawn from the undisclosed documents could be reasonably drawn from the
materials on record.34 In addition to deciding the points of reference, the adjudicator must give directions necessary for
proper performance to give effect to the decision. The award which lacks necessary directions may be bad on the ground of
want of finality. However, any directions that are contrary to the law of the land will render the award bad. Likewise, the
directions given beyond the scope of the power of the adjudicator will also be bad for excess of jurisdiction. Finally, the
award must be legal and capable of being performed. In other words, it must be physically possible for the parties to
perform the award and to perform it without contravening the law. This is similar to the rule of law of contract which
requires all contracts to be capable of performance, and to be legal and not contrary to public policy.

(iv) Language of the Award

In making an award it is the duty of the adjudicator not to indulge in language which is not characteristic of judicial
approach. Remarks and criticism can be justified only when they are based on facts, but imputation of motives and mala
fide to any party to the proceedings is not permissible when the facts of the case do not furnish any basis for the same.35
The use of strong language may sometimes be permissible in judicial pronouncements, but using strong words without
realising their due significance and without considering whether their use is justified is entirely out of place in such
pronouncements.36

29 Subs by Act 36 of 1956, s 12, for s 16 (wef 10-3-1957).

30 For a detailed discussion of the subject, see notes and comments under s 2(b).
31 Lloyds Bank Ltd v Lloyds Bank Indian Staff Assn (1953) 5 FJR 149 (SC), per Patanjali Sastri CJI.
32 SM Mujeeb v LC (1990) 2 LLJ 535 -36 (AP), per Radhakrishna Rao J.
33 Notes and comments under 2(b).
34 State of Bihar v PO, IT 1977 Lab IC 803, 810 (Pat) (DB).
35 India General Navigation & Rly Co Ltd v Workmen (1960) 1 LLJ 13 [LNIND 1959 SC 182] (SC), per Sinha CJI.
36 Pure Drinks Pvt Ltd v Kirat Singh Maungatt (1961) 2 LLJ 99, 102 (SC), per Gajendragadkar J.

End of Document

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER IV Procedure, Powers and Duties of Authorities

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER IV Procedure, Powers and Duties of Authorities

37[S. 17. Publication of Reports and Awards.—

(1) Every report of a Board or Court together with any minute of dissent recorded therewith, every arbitration award
and every award of a Labour Court, Tribunal or National Tribunal shall, within a period of thirty days from the
date of its receipt by the appropriate Government, be published in such manner as the appropriate Government
thinks fit.
(2) Subject to the provisions of section 17A, the award published under sub-section (1) shall be final and shall not be
called in question by any court in any manner whatsoever.]

SUB-SECTION (1): PUBLICATION OF AWARD - MANDATORY

The use of the word ‘shall’ indicates that the requirements of s 17 are mandatory. The intendment becomes clear from the
reading of ss 17 and 17A together, that a duty is cast on the Government to publish the award within 30 days of its receipt,
and the provision for its publication is mandatory not directory.38 The principle behind this requirement is that the parties
should know the reasons which the tribunal may have recorded in determining the dispute referred to it. It has no authority
to withhold the publication on the ground that the findings recorded by the tribunal indicated that the dispute referred to it
was not an industrial dispute.39 In Sirsilk, certain disputes between the employer and the workmen were referred to an
industrial tribunal. After adjudication, the tribunal sent its award to the Government for publication. However, before the
award was published, the parties to the dispute came to a settlement and accordingly, wrote a letter to the Government
jointly, intimating the fact that the dispute had been settled, hence the award should not be published. On the
Government’s refusal to withhold the publication, the employer approached the High Court for a writ or direction to the
Government to withhold the publication. The High Court rejected the writ petition as well as the writ appeal arising
therefrom. In appeal, Wanchoo J, on a conspectus of ss 17 and 17A observed, ‘It is clear, therefore, reading ss 17 and 17A
together that the intention behind s 17(1) is that a duty is cast on the Government to publish the award within 30 days of its
receipt and the provision for its publication is mandatory and not merely directory.’ Though the Supreme Court maintained
that s 17(1) is mandatory, and ordinarily the Government has to publish an award sent to it by the tribunal, in the special
circumstances of the case and with a view to avoid a conflict between a settlement binding under s 18(1) and an award
binding under s 18(3) on publication, it held that the only solution is to withhold the publication of the award as this would
not in any way affect the mandatory provision in s 17(1) of the Act.40

In Remington Rand, the award having reached the Government on 14 October 1966, it had to be published latest on the 12
November 1966. However, it was published on 15 November 1966 instead. The award was challenged before the Supreme
Court in appeal by special leave on the ground that it was ineffective as it was published after the period of 30 days
prescribed by s 17(1) had expired, which was a mandatory requirement of law. While glossing on its observations in
Sirsilk, the court observed that those observations merely showed that it was not open to the Government to withhold
publication, but it never meant to lay down that the period of time fixed for publication was mandatory. It was, therefore,
held that though s 17(1) makes it obligatory on the Government to publish its award, the time-limit of 30 days prescribed
therein is merely directory and not mandatory. Mitter J held:

The limit of time has been fixed as showing that the publication of the award ought not to be held up. But the fixation of the period
of 30 days mentioned therein does not mean that the publication beyond that time will render the award invalid. It is not difficult to
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think of circumstances when the publication of the award within 30 days may not be possible. For instance, there may be a strike in
the press or there may be any other good or sufficient cause by reason of which the publication could not be made within 30 days.
If we were to hold that the award would therefore be rendered invalid, it would be attaching undue importance to a provision not in
the mind of the legislature. It is well-known that it very often takes a long period of time for the reference to be concluded and the
award to be made. If the award becomes invalid merely on the ground of publication after 30 days, it might entail a fresh reference
with needless harassment to the parties. The non-publication of the award within the period of 30 days does not entail any penalty
and this is another consideration which has to be kept in mind.41

The language of s 17(1) does not admit of the dissociation of the requirement of publication from the time-limit prescribed
therein. An indication of the legislative intent is that the section does not prescribe any particular mode of publication. The
mode of publication is deliberately left to the discretion of the ‘appropriate Government’ and as such depending on the
circumstances, the Government can decide in a particular case the quickest mode of publication. Therefore, the reason that
due to a strike in the press, the Government may have to delay publication does not seem to have any relevance to the
construction of the section. Nor the fact, that no penalty is prescribed for non-publication within 30 day, any bearing on the
question, because there is also no penalty fixed even for non-publication of the award. Besides, the doctrine of ‘good and
sufficient cause’ introduced by Remington Rand is not warranted by the statute. Question arises whether an award can be
held to be valid on showing ‘good and sufficient cause’ even though published after an inordinate delay, say of a year or
two? Conversely, can an award published after the delay of a day or two be held to be invalid, if the cause shown is not
‘good and sufficient’? What are the norms that the court will bear in mind in determining whether the reasons given by the
Government show ‘good and sufficient cause’? Then, who is to show ‘good and sufficient’ cause? Is it the Government
who may not be before the court? Or is it the party interested to sustain the award, who may not even be aware of the cause
of delay? Furthermore, the holding that for ‘good and sufficient cause’, publication may be delayed, is apt to be used as a
shield for procrastination in publication of awards resulting in hardship to employees and employers. In other words, it will
be providing judicial protection to administrative inactions. Besides, delayed publication of awards may lead to anomalous
consequences and in certain cases may even frustrate the purpose of the adjudication itself. For these reasons, Remington
Rand requires reconsideration.

The NCL-II recommended that, instead of waiting for the publication of the awards in the Official Gazette, awards of the
competent court including the labour courts and the labour relations commissions should be deemed to have come into
effect unless an appeal is preferred within the prescribed period. The labour courts should be empowered to enforce their
own awards as well as the awards of labour relations commissions. They should also be empowered to grant interim relief
in cases of extreme hardship. Officials of labour departments at the Centre and the states who are of and above the rank of
deputy labour commissioners/regional labour commissioners with ten years experience in the labour department and a
degree in law, may be eligible for being appointed as presiding officers of labour courts. The Central and state labour
relations commissions should be declared as set up under Art 323-B of the Constitution. The National Commission should
be empowered with the powers of the Supreme Court of India.42

SUB-SECTION (2): AWARD FINAL AFTER PUBLICATION

Exclusion of Civil Court’s Jurisdiction

This sub-section makes the award of an adjudicator final, subject to the provisions of s 17 A which empowers the
appropriate Government to reject or modify the award in certain contingencies.43 Once the award become final, it is
sacrosanct and cannot be altered or modified by the parties. Nor would any other court be justified to modify or alter the
award by taking a different view of the matter, simply because the status of that court is higher than that of the tribunal
whose order has become final. The award can be reviewable only on the recognised grounds of judicial review.44 The act
of rejection or modification of an award under s 17 A is only an administrative act, and not a judicial act. There is no
appellate or revisional remedy, against the orders and awards of the adjudicators, provided in the Act. On the other hand,
this sub-section expressly makes the award on being published under sub-s (1), as ‘final’ and not liable to ‘be called in
question by any court in any manner whatsoever’. The crux of this provision is to oust the jurisdiction of the civil courts to
interfere with industrial awards, but in cases where such awards are null and void, civil courts have not hesitated from
setting them aside on the theory that such awards are not the ‘awards’ as contemplated by the Act, hence the provision of s
17, making them final and ousting the jurisdiction of the civil courts would not apply to them.45 There is a growing
tendency to exclude or restrict judicial review by legislative measures, by using the expression like the order ‘shall be
final’ or ‘shall not be questioned in any legal proceedings whatsoever’ etc. This has resulted in a large body of legislation
excluding or restricting judicial review by this device giving the final word to the authority concerned. However,
indiscriminate use of such clauses even in cases where no necessity is evident, has made them an ‘insidious habit’.46 The
courts, therefore, have penetrated the checkmate by holding that a general finality clause would be insufficient to deprive
them of their power to interfere for patent errors of law, jurisdictional defects or violation of the rules of natural justice. In

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such cases, the ouster clauses have been held to be ineffective ‘to abridge or attenuate judicial review’,47 as pointed out by
Prof SA de Smith:

A prominent characteristic of English public law has been the restrictive interpretation given by the superior courts to statutory
formulae which, read literally, would have deprived them of their supervisory jurisdiction over inferior tribunals and administrative
bodies, a jurisdiction exercised principally by the award of certiorari to quash. It is perhaps paradoxical that they have sometimes
held their jurisdiction to be effectively ousted by subjectively worded grants of power to either bodies, while substantially
disregarding the plain words of a statute giving the orders and decisions of those bodies the impress of finality.48

In England, to begin with, the courts took the ouster clauses at face value. The House of Lords held that such clauses
provided an exclusive code of judicial review and, though there is no reference to prohibition and certiorari, prevent
recourse to these remedies.49 In Medical Appeal Tribunal, Lord Denning observed that where the statute said: ‘any
decision of a claim or question shall be final’, certiorari could never be taken away except by most clear and explicit
words. The expression ‘final’ etc only meant ‘without appeal’ and made the decision ‘final only on facts not on law’ and
certiorari might still issue for excess of jurisdiction or for error of law on the face of the record.50 In Anisminic, the House
of Lords itself took a divergent view from the one it took in East Elloe. In this case, despite the statute providing that a
determination of the foreign compensation commission ‘shall not be called in question in any court of law’, the House
unanimously held that though this provision bars any challenge for mere error within jurisdiction, it would not protect any
decision which was ultra vires. A majority of the House considered an error which might well have been considered a
mere error within jurisdiction, as an error involving excess of jurisdiction for circumventing the ouster clause ‘by
stretching the doctrine of ultra vires to an extreme point’. Lord Wilberforce pointed out that in holding a ‘decision’
protected by ouster clause to be nullity, the courts are carrying out the intention of the legislature and it would be a
misdescription to speak in terms of a struggle between the courts and the executive. The House made it perfectly clear that
nullity is the consequence of all kinds of jurisdictional errors, eg, breach of natural justice, bad faith, failure to deal with
the right question and taking wrong matters into account. Furthermore, the similarity of both kinds of ouster clauses was
emphasised while rejecting East Elloe as contrary to precedent and principle.51 Prof Wade has suggested that the result of
this striking case was to focus attention on the danger of indiscriminate use of ouster clauses and to ‘persuade Parliament
to provide limited rights of appeal from the commission to the courts’.52 It seems that the use of the ouster clause will no
longer prevent an order being impugned on the ground that it is made mala fide or on wrong grounds, or is unreasonable,
contrary to natural justice or ultra vires in any other way. However, this will have its own anomalous consequences. A
solution to the dilemma has been suggested that the principle in Anisminic should only be applied in cases, of absolute
ouster clauses and where recourse to court is restricted only after a prescribed time, the eventual barring of legal remedies
may be necessary as under a normal statute of limitation, except possibly where an order is ultra vires on its face.
Although this merely confirms the long-established law, it should help to resolve the tangle caused by paradoxical
suggestion that action in excess of jurisdiction may be ‘voidable’ as opposed to ‘void’. As observed by Lord Reid, there
are no degrees of nullity. Thus, it may be possible to reconcile the two extreme views taken by the House of Lords in East
Elloe and Anisminic. In the United Kingdom, though the courts disclaim any intention of rebelling against the sovereign
legislature and appear to obey it rather than defy it, they take the ‘uncompromising stand of holding ouster clauses to be
inoperative in every kind of case where the error can be said to go to jurisdiction, artificial as some of these are’.53

In Australia, the legislature has made a frequent use of the drastic ouster clauses for keeping the courts of law out of the
sphere of labour law. The High Court of Australia has adopted a pragmatic approach of reconciling the obvious intention
of such clauses with the equally obvious intention that the powers of the arbitration court shall be legally limited. It would
decline to intervene ‘where the tribunal has made a bona fide attempt to exercise its authority in a matter relating to the
subject with which the legislation deals and capable reasonably of being referred to the powers possessed by the tribunal,54
Thus, the court refused relief where an appeal board went beyond the question under appeal which it had no power to do,55
and where the tribunal was said to have exercised its jurisdiction by misconstruing ‘lockout,56 On the other hand, the High
Court granted prohibition, in spite of express ouster of judicial remedies, where a board sat without the statutory quorum
which was required for it to function validly. In this way a balance appears to have been struck between the ‘legislative
intention and constitutional logic’. But in Canada the exclusion of the courts from the field of labour law is less successful
than in Australia and the decisions there are in the English tradition.57 In the United States of America, there appears to be
a considerable conflict of judicial dicta though, by and large, their approach is comparable to Anisminic case in favour of
avoiding the exclusionary power by holding error of law to be jurisdictional.58 Thus, though in Australia, the approach of
the court to exclusionary clauses is resilient, in England, Canada and USA, the courts appear to refuse all compromise of
any kind of jurisdictional question as a part of their judicial function.59

After the decision of the Supreme Court in Bharat Bank,60 and Muir Mills,61it is established that the orders and awards of
industrial adjudicators or the administrative orders of the administrative authorities under the Act are amenable to judicial
review because ‘the concept of rule of law still assumes that the judicial power of the state extends to review of executive,

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judicial and quasi-judicial acts, and that any restriction on this power of review is a menace to the rule of law’.62 The
awards of the industrial adjudicators or the orders of the administrative authorities have been made ‘final’ only on facts
and not on law. In other words, the right of an aggrieved person to judicial review is not restricted.63 Though judicial
review of administrative, quasi-judicial or judicial orders would not normally extend to examination of the merits of the
action, it would cover its legality on the grounds of jurisdictional defects, errors of law apparent on the face of the record
or the violation of the rules of natural justice. However, the legislature has intended that the awards of the adjudicatory
authorities shall be ‘final’ and that such awards shall not be called in question by any court ‘in any manner whatsoever’.
This intention normally shall not be defeated except in cases where the award of the tribunal is vitiated by errors of law
apparent on the face of the record and has resulted in such grave miscarriage of justice as to disturb the conscience of the
court or the award is in violation of the principles of natural justice, or is perverse or arbitrary in the sense that it is without
any evidence whatsoever or extraneous considerations have gone into the making of the award. Except in such and similar
circumstances, the power of judicial review shall not be exercised for the purpose of invalidating an award which is
intended to be final and beyond question.64

Power to Set Aside an Ex Parte Award

A single judge of the Calcutta High Court held that the finality as such does not affect the right of the tribunal to recall the
award for reconsideration. What it affects is that so far and so long as it stands, it should not be reopened in any
proceeding. In this connection, reference will have to be made to s 17A which lays down that the award shall become
enforceable on the expiry of 30 days from the date of its publication. Therefore, before the expiry of the 30 days, the
tribunal has the implied power to recall, in appropriate cases, the awards which have not become enforceable by operation
of s 17(1).65 In Grindlays Bank, the facts disclosed that the ex-parte award was made by the Tribunal on 9 December 1976,
which was published by the Government on 25 December 1976. Thus, the said award became enforceable on the expiry of
30 days, ie..., with effect from 25 January 1977. The workman submitted his application for revival on 19 January 1977,
and the Tribunal passed the revival order on 12 April 1977. One of the two issues raised was whether the Tribunal
becomes functus officio on the expiry of 30 days from the date of publication of the ex parte award under Section 17, by
reason of sub-section (3) of Section 20 and was, therefore, deprived of jurisdiction to set aside the award and the
appropriate Government alone had the power under s 17-A(1) to set it aside. The Supreme Court observed:

The contention that the Tribunal had become functus officio and, therefore, had no jurisdiction to set aside the ex parte award and
that the Central Government alone could set it aside, does not commend to us. Sub-section (3) of Section 20 of the Act provides
that the proceedings before the Tribunal would be deemed to continue till the date on which the award becomes enforceable under
Section 17A. Under Section 17A of the Act, an award becomes enforceable on the expiry of 30 days from the date of its
publication under Section 17. The proceedings with regard to a reference under Section 10 of the Act are, therefore, not deemed to
be concluded until the expiry of 30 days from the publication of the award. Till then the Tribunal retains jurisdiction over the
dispute referred to it for adjudication and up to that date it has the power to entertain an application in connection with such
dispute. That stage is not reached till the award becomes enforceable under Section. In the instant case, the Tribunal made the ex
parte award on December 9, 1976. That award was published by the Central Government in the Gazette of India dated December
25, 1976. The application for setting aside the ex parte award was filed by respondent 3, acting on behalf of respondents 5 to 17 on
January 19, 1977 ie.., before the expiry of 30 days of its publication and was, therefore, rightly entertained by the Tribunal. It had
jurisdiction to entertain it and decide it on merits.66 ()

In Anil Sood, the facts disclosed that the Labour Court had rejected the recall application on the very same ground as of
Grindlays Bank, i.e..., that after making the award it became functus officio in the matter. The order of the labour court was
challenged before the High Court, which upheld the view of the labour court. In appeal this Court noted that the award was
made on 11 September 1995 and the application for its recall was filed on 06 November 1995. The Court referred to the
earlier decision in Grindlays Bank and the provisions of s 11(2) & (3) of the Act and held:

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 Rule s of natural justice.. .. 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.. .. 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

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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. 67 (Paras 6, 7 & 8)

It is submitted that Grindlays Bank itself was wrongly decided in so far as the facts of the case revealed that the award was
already published by the Government at the time when the proceeding was restored. Having stated the principle of law
correctly, Sen J, misapplied the said legal principle to the case at hand, for the reason that as on the date the tribunal passed
the order, the award was already in force for over two months. The reasoning of Sen J, in that case that the Tribunal had
the power to revive the proceeding, in view of the fact that the workman filed his application before the expiry of 30 days
u/s. 20 of IDA, is clearly misplaced. What is critical is not so much the date on which the workman submitted his
application as the date on which the award became enforceable. In that case, the award became enforceable on 25 January
1977, whereas the Tribunal passed the order on 12 April 1977, i.e.., two and half months after the award became
enforceable. Applying the provisions of the Act and the settled law on the point, what was the legal status of the Tribunal
on and after 25 January 1977 in so far as the said award was concerned? Could it be said that the Tribunal remained alive
to the said reference or did it become functus officio? The answer can unmistakably and manifestly be in favour of the
latter. Thus, the decision rendered in Grindlays Bank was a product of misapplication of law and is clearly wrong.

Adverting to Anil Sood, which followed Grindlays Bank, the facts disclosed that the award was submitted on September
11, whereas the application for setting the said award aside was filed in November, i.e..., two months later, which
admittedly implies that the award was published by the Government on or before October 11 in terms of the mandatory
provision in s. 17, and that it came into force or was in the process of coming into force. Further, it was a case where the
party did not enter appearance before the Tribunal despite notice, with the result he was set ex parte. Both the above
decisions deserve to be assailed for propounding that the Tribunal has the power to set aside an award even after the expiry
of 30 days after its publication by the Government. It is one thing to say that the Tribunal does not become functus officio
after submitting the award, and quite another to suggest that it continues to enjoy the power to set aside the award after it
had come into operation. Such an interpretation of law militates against the very objects of IDA. Once the award is
published, the decision of the tribunal stands ‘made public’ with the further implication that the dispute has been
conclusively adjudicated by a competent authority. The only exception to this position is where the Government
simultaneously publishes another notice u/s. 17-A stating that the award so published u/s. 17 would not come into force on
the expiry of 30 days, for certain extraordinary reasons, which is an exception to the normal rule. Even in such a rare of the
rarest eventuality, the tribunal has no power to recall the award because, once the award is published, the matter passes into
the absolute jurisdiction of the appropriate Government as provided for in s. 17-A. The facts of the case did not disclose
publication of any second notice by the Government u/s. 17-A withholding the operation of the award. In these
circumstances, what remains after the publication of the award u/s. 17 is nothing but the enforcement of the award, even if
it was found that the award was, or had to be, passed ex parte, and it cannot be permitted to be set aside by the same
Tribunal merely because the defaulting party had shown sufficient cause. If it was found that the Tribunal adjudicated the
dispute arbitrarily without putting a party to notice, then the right course for the aggrieved party is to get it quashed in a
writ proceeding, instead of permitting the tribunal to meddle with the award after it came into force. If, on the other hand,
it was found that the party did not choose to appear even after being put it on notice and after granting sufficient number of
adjournments, then the defaulter should not be allowed to gain an undue advantage from his own wrong. It is submitted
that Grindlays Bank and Anil Sood were wrongly decided and require review. However, in Ajit Singh, a single judge of
Punjab & Haryana High Court held that the Labour Court would become functus officio on the expiry of 30 days after the
publication of the award, and hence the order passed by it setting aside the ex parte award after that period would be
invalid.68Ajit Singh lays down the correct law as against Grindlays Bank and Anil Sood.

At this point it is necessary to draw the attention of the reader to the observation made by SB Sinha J, in Sangham Tape
Co, while referring to the decision of Sen J, in Grindlays Bank. In Sangham Tape Co, the question relating to the “power of
the tribunal to recall an ex parte award after the expiry of 30 days from the date of its publication” had once again come
up for the consideration of the apex court. SB Sinha J (for self and Hegde J), categorically held that the tribunal had no
power to recall the award once it became enforceable u/s 17A. The learned judge admittedly relied upon Grindlays Bank
(supra) as can be discerned from the following passage:

In view of this Court’s decision in Grindlays Bank (supra), such jurisdiction could be exercised by the Labour Court within a
limited time frame, namely, within thirty days from the date of publication of the award. Once an award becomes enforceable in
terms of Section 17A of the Act, the Labour Court or the Tribunal, as the case may be, does not retain any jurisdiction in relation to
setting aside of an award passed by it. In other words, upon the expiry of 30 days from the date of publication of the award in the
gazette, the same having become enforceable, the Labour Court would become functus officio.69

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The reliance placed by Sinha J, on Grindlays Bank calls for some analysis. For this purpose, it is necessary to re-state the
facts of Grindlays Bank, as admitted by Sen J, which, briefly, are:

(i) The Central Government made a reference of the dispute to the Tribunal on July 26, 1975;

(ii) The Tribunal, by a notice dated March 6, 1976 fixed peremptory hearing of the reference for May 28, 1976, but the
hearing was adjourned from time to time on one ground or the other;
(iii) The final hearing of the reference was fixed by the Tribunal for December 9, 1976;

(iv) Counsel for the employees’ association requested for adjournment on the ground that the General Secretary of the
Association suffered bereavement of his father who died on November 25, and that he was required to perform the
Shraddha ceremony of the departed soul, and also produced a telegram to that effect;
(v) Despite the genuineness of the request, duly supported by evidence to that effect, the tribunal rejected its request for
adjournment and decided to proceed ex parte;
(vi) The award was made and submitted to the Government, which was published on December 25, 1976 u/s. 17;

(vii)The Government did not publish a second notice withholding the operation of the award, with the result, the decision of
the Tribunal thus came into public domain and the award was destined to come into force on the expiry of 30 days, i.e...,
with effect from January 25, 1977,
(viii) The Employees’ Association filed a petition before the Tribunal on January 19, 1977, on the ground that they were
prevented by sufficient cause from appearing on the day of final hearing on December 9, 1976;
(ix) The said application was admitted by the tribunal; and

(x) The tribunal passed its order on April 12, 1977 setting aside the award. (Italics supplied)

Sen J, categorically held that the Tribunal becomes functus officio on the expiry of 30 days from the date of the publication
of the award. The learned judge discussed elaborately the provisions of IDA and Code of Civil Procedure, 1908 —‘CPC’
in short) in his judgment, but failed to realise that his final conclusion was diametrically opposite to the principle
enunciated by him in the same case! The decision proper rendered by Sen J, in Grindlays Bank calls for some analysis on
the anvil of the legal principle enunciated by himself in the same case. Once the award is published by the Government u/s
17, and no further action is taken by it either modifying or rejecting the award under the Proviso to s 17A (1) r/w the other
provisions thereof, the legal consequences of publication would automatically follow, i.e..., the dispute stood finally
determined and the award comes into force on the expiry of 30 days, in this case, on 25 January 1977. The recall petition
was filed by the Association at the fag-end of the interregnum, i.e..., 19 January 1977—less than a week before the
scheduled enforcement of the award. The Tribunal passed its order on 12 April 1977 setting the said ex parte award aside.
In other words, as on the date of setting aside the award, the award was not only in public domain, but was also in force for
over two months. In the face of this factual and legal position, could it be said that, even as early as 26 January 1977—not
to speak of 12 April 1977—the Tribunal had the power to recall and set aside the award? What made the Tribunal to take a
right-about-turn within a span of 40 days and persuade itself that there was sufficient cause, which self-same cause did not
appeal to its judicial mind when the request was first made to it on 6 December 1976, in face of an ardent plea made by
counsel for Association, duly substantiated by a telegram? Why did the Tribunal refuse to grant the adjournment in the first
instance and why did it grant the same request later, when there was no change in the circumstances between 9 December
1976 and 19 January 1977? If this is not an abuse of power by the Tribunal, what else could it be? In such a situation, what
is the duty of the Supreme Court, more so, in the light of the fact that the award came into force some 80 days before it was
set aside? Should it close its eyes and passively condone the approbation and reprobation on the part of the Tribunal or
should it uphold the rule of law, given the fact that the award had major implications for the disputing parties? Could it still
be said that the final decision of Sen J, in Grindlays Bank was consistent with the principle enunciated by him in the same
case? Under what provision of law did the Government comply with the recall order passed by the Tribunal, when it was
fully aware of the fact that the award published by it had started producing its legal consequences? What was the
justification for Sen J, to travel beyond the four walls of the law, and uphold a patent illegality attributable to the Tribunal?
Answers to these questions are too obvious to need elaboration. Reverting to Sangham Tape Co, the decision of Sinha J,
and the ratio enunciated therein are beyond the pale of attack, but his observation to the effect that Grindlays Bank was
rightly decided, is a travesty of truth.70

In Radhakrishna Mani Tripathi, the facts briefly were: In an industrial dispute concerning the termination of service of a
workman, the Labour Court passed an ex parte award in favour of the workman on 12 June 1998 directing his
reinstatement with full back wages and continuity in service. The award was made after taking evidence (ex parte) led on
behalf of the appellant. It was published on 05 August 1998. On 29 January 1999 employer filed a petition before the

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Labour Court making a prayer for recall of the award, on the ground that no notice was served on him and he was not
aware of the proceedings before the Labour Court; and that he came to know about the matter only on 27 January 1999 on
receiving a copy of the award sent to him by the Court. After a full dressed hearing on the recall petition the Tribunal
found and held, vide order dated 12 July 2005, that the workman obtained the order for ex parte hearing of the reference
by knowingly suppressing the correct address of respondent No. 1 and as a result the notice issued by the Labour Court
was never served on him. In light of the finding, the Labour Court recalled its earlier award dated 12 June 1998 and fixed
the matter for fresh hearing. The workman filed a writ petition in the Bombay High Court challenging the order of Labour
Court setting aside the award. The High Court dismissed the writ petition and confirmed the order passed by the Labour
Court. One of the issues was whether there was any conflict between r. 26(2) of Industrial Disputes (Bombay) Rules 1957
and s 17(1) of the Industrial Disputes Act 1947. The said Rule runs thus:

(2) Where any award, order or decisions made ex parte under sub-rule (1), the aggrieved party, may within thirty days of the
receipt of a copy thereof, make an application to the Board, Court, Labour Court, Tribunal or an Arbitrator, as the case may be, to
set aside such award, order or decision. If the Board, Court, Labour Court, Tribunal or Arbitrator is satisfied that there was
sufficient cause for non-appearance of the aggrieved party, it or he may set aside the award, order or decisions so made and shall
appoint a date for proceeding with the matter:

Provided that, no award, order or decision shall be set aside on any application as aforesaid unless notice thereof has been served
on the opposite party.

In appeal, Aftab Alam J surveyed the decisions rendered in Grindlays Bank and Anil Sood, and dismissed the appeal
holding that the labour court does not become functus officio after submission of the award, and further observed that there
was no conflict between r 26(2) of Bombay Rules and s 17A(1) of the Act.71 In South Seas Distillaries, the facts disclosed
that the employer did not appear even once before the conciliation officer during the pendency of conciliation proceedings
despite sever letters having been sent to him nor did he present before the labour court despite notice resulting in the labour
court passing an ex parte award. The employer filed an application before the labour court after a lapse of five months for
setting aside the said award, which was rejected by the labour court. In writ proceedings, the Bombay High Court held that
the labour court was right in rejecting the application, and observed that no case was made out by the petitioner-employer
to interfere with the order of labour court.72 In Tamil Nadu KVIB, the a single judge of Madras High Court held that the
labour court becomes functus officio on the expiry of 30 days from the date of publication of the award, and that an
application for setting aside the ex parte made, if made after the expiry of 30 days from the date of publication, was not
maintainable.73 In Stallion Garments, the facts briefly were: some 20 temporary workers remained absent unauthorisedly
for several months, whereafter the management relieved them from their duties in June 2004. Thereafter they obstructed
the premises of the company in a riotous manner, about which a police complaint was lodged and also obtained an interim
injunction from the District Munsif against the workers from disturbing the peaceful running of the factory. After the said
order, 17 out of 20 workers resigned from service, but a few raised an industrial dispute against the termination. It is stated
that the summons sent by the labour court were received by one of the staff of the employer, who did not bring the same to
the knowledge of the employer, and the employer was set ex parte and the award was passed on 28 May 2005. The ex
parte award came to be known to the employer when the workmen sent letters on 26 June 2006 seeking employment based
on the award and thereafter, the management filed application to set aside the ex parte award and also to condone the delay
of 262 days. The labour court dismissed the petitions on the ground that it had become functus officio. Allowing the appeal
a single judge of Madras High Court followed the ratio of Anil Sood and Radhakrishna Tripathi (supra) and held that the
very ex parte award passed by the labour court was without application of mind and further observed that, in the
circumstances of the case, the labour court could not be said to become functus officio.74

In Janakiram Mills, the facts were: the management terminated the service of a watchman, who had put in some 12 years
service, without any charge-sheet or enquiry. The resultant dispute was referred for adjudication. Before the Labour Court,
the parties have filed their respective statements. The workman marked 10 documents and examined himself, after the
Management was set ex-parte. The Labour Court did not pass an award on merits and, instead, held that the Management
was set ex-parte and claim of the workmen was proved, passed the award on 23 October 2010. In the writ petition, the
management contended that (i) it was not an award, (ii) that it had received the copy of the award only in February 2011,
(iii) since the award came into force by that time, it did not file a petition under s 11 of the Act r/w rule 48 of ID (Tamil
Nadu) Rules to recall the award as it would serve no purpose, and (iv) hence, it approached the High Court. Allowing the
writ petition, Vaidyanathan J of Madras High Court cited the decisions rendered in Andhra Handloom Weavers,75 and
United Transformers,76 and observed:

“The Courts have held that “dismissal for default” is not an award. If the contention of the Management has to be accepted that the
labour Court has become functus officio and hence after the award has come into force they have approached this Court, all the

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Management would wait for the award to come into force and thereafter file a writ petition stating that they have no remedy and
the period mentioned under the Rules has expired.. .. It is a well settled law that mere absence of workman or the Union does not
absolve the Labour Court or Tribunal from proceeding with a reference referred to it and making the award. . ., the Tribunal or
Labour Court has to adjudicate on the dispute and not just close or end the proceedings before it by any method which does not
involve adjudication or resolution of the dispute referred to. .. a technical termination of the proceedings does not serve the purpose
of the reference or the object of the Act, 1947. Similar view is applicable to the dispute under the amended provisions. In case, the
party to the proceeding fails to attend or to be represented, the Labour Court or Tribunal will have to proceed with the Industrial
Dispute as if the party had duly attended or had been represented.. .. Based on the materials available on record, the Tribunal will
have to pass an award on merits. In case, an ex-parte award is passed, the matter can be reopened and I.D can be restored if an
application is filed before the award has come into force. If the award has come into force, the Tribunal or the Labour Court will
become functus officio.”77

In Birla Cotton, the facts briefly were: the tribunal, having submitted the consent award, recalled it on the application made
by certain other unions which alleged that the settlement reached before the conciliation officer was not fair and just.
Accordingly, the tribunal framed an additional issue for review, i.e.., “whether the settlement was fair and just”. The writ
petition filed by the management was admitted by the Delhi High Court and the reliefs prayed for were granted. In appeal
by the union, inter alia, two questions touching upon the power of quasi-judicial tribunals i.e.., (i) procedural review, and
(ii) review on merits, came up for the consideration of Supreme Court. Dismissing the appeal, Singh J (for self, Hegde and
Sinha JJ) of the Supreme Court observed:

.. . different considerations arise on review. The expression ‘review’ is used in the two distinct senses, namely (1) a procedural
review which is either inherent or implied in a court or Tribunal to set aside a palpably erroneous order passed under a mis-
apprehension by it, and (2) a review on merits when the error sought to be corrected is one of law and is apparent on the face of the
record.. .. no review lies on merits unless a statute specifically provides for it. Obviously when a review is sought due to a
procedural defect, the inadvertent error committed by the Tribunal must be corrected ex debit justitiae to prevent the abuse of its
process, and such power inheres in every court or Tribunal.. .. it is apparent that where a Court or quasi judicial authority having
jurisdiction to adjudicate on merit proceeds to do so, its judgment or order can be reviewed on merit only if the Court or the quasi
judicial authority is vested with power of review by express provision or by necessary implication. The procedural review belongs
to a different category. In such a review, the Court or quasi judicial authority having jurisdiction to adjudicate proceeds to do so,
but in doing so commits a procedural illegality which goes to the root of the matter and invalidates the proceeding itself, and
consequently the order passed therein. Cases where a decision is rendered by the Court or quasi judicial authority without notice
to the opposite party or under a mistaken impression that the notice had been served upon the opposite party, or where a matter is
taken up for hearing and decision on a date other than the date fixed for its hearing, are some illustrative cases in which the power
of procedural review may be invoked.. .. The order passed is liable to be recalled and reviewed not because it is found to be
erroneous, but because it was passed in a proceeding which was itself vitiated by an error of procedure or mistake which went to
the root of the matter and invalidated the entire proceeding.. .. The recall of the Award of the Tribunal was sought not on the
ground that in passing the Award the Tribunal had committed any procedural illegality or mistake of the nature which vitiated the
proceeding itself and consequently the Award, but on the ground that some matters which ought to have been considered by the
Tribunal were not duly considered. Apparently the recall or review sought was not a procedural review, but a review on merits.
Such a review was not permissible in the absence of a provision in the Act conferring the power of review on the Tribunal either
expressly or by necessary implication. (Paras 18-20) (Italics supplied).

On the question ‘whether there was a conciliation proceeding’ and ‘whether the settlement reached between the parties
could be said to be a settlement arrived at in the course of conciliation proceedings’, the learned judge observed:

.. . The settlement itself recites the fact that there were series of bipartite and tripartite meetings between the representatives of the
Management and the Unions in view of the labour unrest and threat of closing down the operation of the weaving department.
Meetings were also held in the office of the Chief Labour Commissioner with a view to resolve the dispute and a meeting was
thereafter held on May 17, 1983 in the office of Shri K. Saran, Joint Chief Labour Commissioner (Central) where the
representatives of the Management and the Unions participated alongwith the officers of the Labour Department which ultimately
resulted in a settlement. All these facts establish beyond doubt that there was labour unrest and the Conciliation Officer intervened
in the matter and made attempts to bring about a settlement. The submission, therefore, that no conciliation proceeding was in
progress when the settlement was arrived at, must be rejected.78 ()

JUDICIAL REVIEW

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Legislation

The orders and actions of authorities under this Act are reviewable in writ jurisdiction under Art. 32 & 226 and in
superintendent jurisdiction under Art 227 and special appeal jurisdiction under Art 136. The writ jurisdiction of the
Supreme Court under Art 32 can only be invoked for enforcing the ‘fundamental rights’ while the jurisdiction of the High
Court under Art 226 can be invoked not only for enforcing ‘fundamental rights’ but ‘for any other purposes’ as well.79 The
42nd amendment of the Constitution substituted a new Art 226 for the old one. In the new Article, the words ‘for any other
purposes’ appearing in cl (1) of the old Article did not find any place. The remedies of directions, orders or writs
mentioned in this article were available apart from the enforcement of the fundamental rights, for redressal of any injury of
a substantial nature by reason of contravention of any other provision or any provision of any enactment or ordinance or
any order, rule, regulation, by-law or other instrument made therein or for the redressal of any injury by reason of any
illegality in any proceedings by or before any authority, under any such law where illegality has resulted in substantial
failure of justice.80

Two new articles namely, Arts 133A and 226 A were introduced, which prohibited the High Courts from considering the
constitutional validity of any Central law in any proceedings. Under Art 226, the jurisdiction in regard to a question as to
validity of such laws was exclusively vested in the Supreme Court by Art 131A. Clause (3) of the new Art 226 prohibited
the High Courts from entertaining petitions under that Article for redress of any injury referred to in sub-cl (b) or sub-cl (c)
of cl (1) thereto, if any other remedy for such redress was provided by or under any other law for the time being in force.
Clause (4) prohibited the High Courts from granting interim injunctions or stay orders unless (i) copies of writ petitions
and all relevant documents were served on the opposite side and (ii) the opportunity was given to the opposite side of
being heard in the matter. Clause (5) gave discretion to the High Court to dispense with the requirements of cl (4) in
exceptional cases where the threatened injury could not be adequately compensated in money. Such interim order was,
however, to stand vacated on the expiry of 14 days unless before that the opposite party was served with the writ petition
and the relevant documents and was heard. Clause (6) proscribed grant of an interim order by way of injunction, stay or
otherwise which would have the effect of delaying an inquiry into a matter of public importance. Article 227 was also
substituted, partially restricting the High Courts’ jurisdiction taking away its superintendence over ‘tribunals’. By s 58 of
the Constitution (42nd Amendment) Act 1978, special provisions were made as to the pending petitions under Art 226.
Then by the Constitution (43rd Amendment) Act 1977,81 Arts 133A and 226 A were omitted and consequential
amendments were made in Art 226. Shortly afterwards, by the Constitution (44th Amendment) Act 1978, Art 226, was
amended again. Clause (1) of Art 226 was substituted by the present cl (1) which has again made the Constitutional
remedies available ‘for any other purpose’, apart from the enforcement of fundamental rights. The ban of an alternative
remedy in the previous cl (3) has also been removed and the procedure with respect to the interim stay orders or
injunctions too has been modified, by substituting the previous cll (3), (4), (5) and (6) by the present cl (3). In Art 227, the
previous cl (1) has been substituted by the present clause which restores the superintendence of the High Courts on
‘tribunals’. Clause (5) of this article was omitted.82The effect of 44th Amendment is that the law has substantially been
restored to its ante Constitution (42nd Amendment) Act 1976.

The scope of the jurisdiction of the writ courts to interfere with the orders and awards of the industrial adjudicators and to
give appropriate relief to the aggrieved parties is very wide and comprehensive. However, this jurisdiction will not lend
itself to aid a party when the relief prayed for raises a triable issue, such as, the issue of limitation in which case it would
be best to leave the party to seek its remedy by the ordinary mode of action in a civil court.83 The phrase ‘for any other
purpose’, used in Art 226 is to be understood to mean ‘for any other purpose for which any of the writs would, according
to the well established principles, issue’.84 The jurisdiction of the writ courts to issue directions, orders or writs in the
nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari is quite wide, which confers on it an
extensive discretion with the possible limitation that the discretion has to be exercised in accordance with well-established
judicial principles and only on judicial considerations and not arbitrarily.85 Therefore relief by way of appropriate writs or
orders, cannot, generally be refused on an application under Art 226 on the ground that the particular relief, which the
applicant was found entitled to has not been claimed by him.86Apart from the Government and its departments, such
directions, orders or writs can be issued to other persons and authorities as well. A detailed treatment of such authorities is
beyond the scope of this work, as it concerns itself only with the authorities under the Industrial Disputes Act.

Authorities under the Act

The authorities under this Act whose awards, orders or acts are generally exposed to judicial review are:

(i) The Appropriate Government

Since the state intervention permeates the scheme of the Industrial Disputes Act, the role of the Government is dominant in
the statute. Its orders under various provisions of the Act, therefore, though of administrative nature, are reviewable by writ

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courts if they breach the fundamental rights or are made mala fide or are ultra vires the constitutional or statutory
limitations. The finality conferred by the statute will not stand in the way of their judicial review.

(ii) Conciliation Officers, Board of Conciliation and Court of Inquiry

Section 12(1) of the Industrial Disputes Act confers discretion on the conciliation officer to decide whether he shall hold
conciliation proceedings or not excepting cases where the dispute relates to a public utility service and a notice under s 22
has been given in which case, it is mandatory to hold conciliation proceedings. The statute makes a clear distinction
between disputes relating to public utility service concerns and other concerns by using the words ‘may’ in the former case
and ‘shall’ in the latter.87 In the former case, there is no obligation cast on the conciliation officer to undertake the
conciliation proceedings. Hence, there is no room for the issue of a writ of mandamus to a conciliation officer to hold
conciliation proceedings. However, in a public utility service, it is incumbent on the conciliation officer to hold
conciliation proceedings when notice under s 22 has been given. However, if such notice has not been given, the
conciliation officer is not bound to hold the conciliation proceedings. Hence, he cannot be compelled by mandamus to hold
conciliation proceedings unless such notice has been given.88 A single judge of the Delhi High Court, held that there is no
legal duty cast on the conciliation officer to intervene in the matter till some action is taken against the workman and the
workman has a grievance to that extent. Therefore, a conciliation officer cannot be compelled to intervene before any
dispute has arisen between the parties by a writ of mandamus.89

The function of a conciliation officer under s 12 is of a purely administrative character and not of quasi-judicial nature
because he is not under a duty to act judicially and he cannot give a decision on the merits of the dispute. His task is one of
discussion, advice and persuasion for thrashing out the various points of dispute in the presence of the parties for enabling
them to come to a fair and amicable settlement. A settlement arrived at during the course of conciliation proceedings
before a conciliation officer is not quashable on certiorari as it is an act of the parties to the settlement in which the
conciliation officer only uses his good offices to induce the parties to come to a settlement. It is neither an order passed by
the conciliation officer nor a decision recorded by him. Even a writ of mandamus cannot be issued to a conciliation
officer.90 In Jaswant Sugar, the Supreme Court held that a conciliation officer acting under s 33 of the Act for the purposes
of according or refusing ‘permission’ is not a tribunal within the meaning of Art 136. Hence an appeal against such
decision of the conciliation officer is not competent. However, the court left the question whether such an order would be
reviewable by writ courts, undecided, with the observation that this function of the conciliation officer is of quasi-judicial
nature.91 A Full Bench of Gujarat High Court in Testeels, has however, held that the decision of the conciliation officer
under s 33 being of a quasi-judicial nature is amenable to the jurisdiction of the writ court under Art 226. Hence, the
conciliation officer is bound to make a speaking order in this capacity, in other words, he must give reasons for his order.92

The board of conciliation can conciliate upon an ‘industrial’ dispute, only after a reference is being made under s 10(1)(a)
of the Industrial Disputes Act. However, the reference is only for the purpose of ‘promoting a settlement’ of the dispute.
The functions of the board, therefore, are analogous to those of the conciliation officer. Any settlement brought about with
the mediation of the board will neither be by an order nor a decision of the board. It will purely be an agreement between
the parties and not the ‘result of any quasi-judicial proceedings. Therefore, such a settlement, will not be quashable on
certiorari. Though a board may be severed a unit of mandamus to act under s 13 to promote a settlement of the dispute, no
mandamus can be issued to it for the implementation or non-implementation of a settlement which is purely an agreement
between the parties. A court of inquiry is constituted for the purpose of ‘inquiring into any matter appearing to be
connected with or relevant to an industrial dispute’. It can, however, take cognizance of such a matter for inquiry, only
when the appropriate Government refers such a matter to it under s 10(1) (b) of the Act. The court of inquiry is, therefore,
nothing more than a fact finding body and its’ findings will not have the character of a decision of the dispute or any
matter appearing to be connected with or relevant to the dispute. On receiving the findings of the court of inquiry, the
Government may consider the question, whether or not to make a reference under s 10(1)(a). If however, the court of
inquiry does not investigate the matter referred to it, it may be issued a writ of mandamus to discharge its statutory
functions.

(iii) Labour Courts, Industrial Tribunals and National Tribunals

It is now well-settled that the functions of these adjudicatory authorities are of quasi-judicial nature.93 Their orders and
awards, therefore, are reviewable by the High Court in their jurisdiction under Art 226 and by the Supreme Court in its
appellate jurisdiction under Art 136. However, whenever a reference is made by the appropriate Government to a tribunal,
it has to be presumed ordinarily that there is a genuine ‘industrial dispute’ between the parties which requires to be
resolved by adjudication. An attempt, therefore, should be made by the reviewing courts to sustain as far as possible the
awards made by the tribunals instead of differing on trivial points in the awards and ultimately, frustrating the entire
adjudicating process by striking down the awards on hyper-technical grounds.94 However, it is open to a party to show that
what has been referred to the tribunal for adjudication is not an industrial dispute at all and, therefore, the jurisdiction of
the tribunal to make the award can be questioned even though the factual existence of a dispute may not be subject to a

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party’s challenge.95 Therefore, when the orders and awards suffer from jurisdictional defects, errors of law apparent on the
face of record or violation of the rules of natural justice, they may be quashed on certiorari. Section 10(4) of the Industrial
Disputes Act prescribes the perimeter of the jurisdiction of the adjudicatory authorities by laying down that they shall
confine their jurisdiction to the points specified in the order of reference and matters incidental thereto. If these authorities
transgress these limitations, their orders again will be quashable on certiorari as ultra vires. Furthermore, if these
authorities are constituted without complying with the requirements of ss 7 to 7B or their presiding officers suffer from any
of the disqualifications envisaged by these provisions and s 7C, their continuance in office may be challenged by a writ of
quo warranto and their orders and awards may be quashed on certiorari for want of jurisdiction and the proceedings
before them may be arrested by a writ of prohibition. These authorities, for the purposes of this discussion, hereinafter are,
compendiously referred to as tribunal.

(iv) Arbitrators

An award of an arbitrator under s 10A is amenable to judicial review by a writ court under Art 226. However, an arbitrator
under this section is not ‘tribunal’ within the meaning of Art 136 or Art 227. Hence, an arbitral award under this section is
neither amenable to the superintendence of a High Court under Art 227 nor appealable under Art 136.96

Judicial Remedies

The Act has not provided any statutory remedies against the orders or awards of industrial authorities. An aggrieved party,
therefore, has to resort to non-statutory or Constitutional judicial remedies for seeking redress against such orders and
awards. The principal Constitutional remedies are writs and appeals. Articles 32 and 226 empower the Supreme Court and
the High Courts respectively to issue directions, orders or writs including writs in the nature of habeas corpus, mandamus,
prohibition, quo warranto, and certiorari for enforcement of the fundamental rights or for any other purpose. Articles 133
& 136 vest the Supreme Court with ordinary and special appellate jurisdiction. The writs in the nature of certiorari,
prohibition, mandamus, and quo warranto are generally resorted to in dealing with industrial matters while the writ in the
nature of habeas corpus has no relevance in this branch of law. In case, where the complaint is ‘for other purpose’ than the
breach of fundamental rights, an aggrieved person has to petition the High Court under Art 226 or Art 227 in whose
territorial jurisdiction, the authority resides or the cause of action has taken place. In Re Eastern Coalfields, it was held that
the Calcutta High Court has territorial jurisdiction to entertain a writ petition against the order of the Labour Court,
Dhanbad which was served on the petitioner within the jurisdiction of the Calcutta High Court.1 Likewise in Vasudeva
Rao, the Karnataka High Court held that if not wholly, a substantial part of the cause of action had arisen in the State of
Karnataka, therefore, it had jurisdiction to entertain the writ petition.2

In cases of complaints against the breach of fundamental rights, apart from approaching such a High Court, an aggrieved
person may also directly approach the Supreme Court under Art 32. However, in cases where a person has petitioned the
High Court under Art 226 or Art 227, the petition may be heard by a single judge Bench or a larger Bench. In case, the
petition is decided by a single judge, a writ appeal,3 will lie to a Division Bench. Such appeals are permissible under the
relevant clauses of the letters patent of the various High Courts. In an appeal under cl 15 of the letters patent of the
chartered High Courts from the judgment (within the meaning of the term as used in that clause) of a single judge of the
High Court, an appeal lies to the Division Bench of that High Court and there is no qualification or limitation as to the
nature of the jurisdiction exercised by the single judge while passing his judgment, provided an appeal is not barred by any
statute and provided that the conditions laid down in that clause itself are fulfilled. An intra court appeal against the
judgment of a single judge in a petition under Art 226 is permissible as an intra court appeal against the judgment of a
single judge. In other words, under the letters patent clauses of the High Courts, the decision of a single judge in writ
jurisdiction under Art 226 is appealable to the Division Bench of that High Court.4 In a letters patent appeal against the
decision of the single judge, there is no limitation that the letters patent appeal bench can hear only a question of law under
s 100, CPC. The entire matter on the questions of fact and law is open before the appellate bench.5 The Division Bench
may interfere with the holding of the single judge if he has misdirected himself while considering the evidence and takes
into consideration matters which were not germane to the issues involved.

A finding based on a proposition militating against a long line of judicial dicta of the Supreme Court would be liable to be
interfered with by the Division Bench. Where the single judge upheld the view of the labour court that the main and
substantial work of a medical representative falls under the categories manual, technical or clerical, was held to be wrong
in view of his own observations that the main work was canvassing and promoting sales.6Against the order or judgment of
the Division Bench or the larger Bench, an appeal by a certificate under Art 133 will lie to the Supreme Court as the
proceedings of the High Court arising out of the actions, orders and awards of the authorities under the Industrial Disputes
Act are civil proceedings. If the High Court refuses to grant certificate under Art 133, an aggrieved party may move the
Supreme Court by a petition under Art 136 for special leave to appeal. A party aggrieved by an order or award of an
industrial authority may also directly petition the Supreme Court under Art 136 for special leave to appeal. The scope of
appeal under Art 136 directly against the orders and awards of the industrial adjudicator is much wider than that of the

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High Court under Art 226. Hence, the jurisdiction of the Supreme Court in direct appeal, under Art 136, from the orders
and awards of the industrial tribunal is much wider than its jurisdiction under Art 133 against the orders and judgments of
the High Court in writ petitions against the orders or awards of such tribunals. In an appeal under Art 136, the Supreme
Court can go into questions of facts as well as law in appropriate cases; whereas, the High Court in its writ jurisdiction and
Supreme Court in its appellate jurisdiction under Art 133, can only consider questions which are strictly relevant for the
writ court. An appeal, under Art 136, can succeed even if no case is made out for the issue of a writ.7 However, if the
appeal under Art 136 is against an order or judgment of the High Court in a writ petition, the jurisdiction of the Supreme
Court will be the same as that of the High Court in dealing with the writ petition.

(i) Certiorari and Prohibition

(a) In General

In challenging the orders and awards of the authorities under the Industrial Disputes Act, a composite prayer asking for
certiorari and prohibition is generally advantageous. Since these two writs have many common characteristics, they are
discussed together. Certiorari is, historically, an extraordinary legal remedy and is corrective in nature. It is used in the
form of an order by a superior court to an inferior civil tribunal which deals with civil rights of persons and which is a
public authority, to certify the records of any proceedings of the latter, to review the same.8 This remedy arises on principle
from the superintending authority which the superior court possesses and exercises over the inferior jurisdiction as the
delegate of the sovereign.9 ‘Certiorari lies, on the application of a person aggrieved, to bring the proceedings of an inferior
tribunal before the High Court for review so that the court can determine whether they shall be quashed, or to quash such
proceedings. It will issue to quash a determination for excess or lack of jurisdiction, error of law on the face of the record
or breach of the rules of natural justice, or where the determination was procured by fraud, collusion or perjury’.10 The
dictum of Lord Atkin LJ, delineating the scope of certiorari and prohibition, 11 despite certain in-built incongruities, has
become classic, and the subsequent law found its stem and branches from the roots in the phrases used in it. The statement
reads:

Wherever any body of persons having legal authority to determine questions affecting the rights of subjects, and having the duty to
act judicially, act in excess of their legal authority, they are subject to the controlling jurisdiction of the king’s bench division
exercised in these writs.12

In the celebrated decision of the House of Lords in Ridge v Baldwin , Lord Reid pointed out how the gloss of Lord Hewart
CJ was based on the misconception of the observations of Lord Atkin LJ and was inconsistent with the earlier dicta. Lord
Reid observed:

If Lord Hewart meant that it is never enough that a body has a duty to determine what the rights of an individual should be, but that
there must always be something more to impose on it, a duty to act judicially, then that appears to be impossible to reconcile with
the earlier authorities’.. .. the duty to act judicially may arise from the very nature of the functions intended to be performed as it
need not be shown to be ‘super-added.13

This decision broadened the area of application of the rules of natural justice and in the language of Professor Clark, this
decision ‘restored light to an area benighted by the narrow conceptualism of the previous decade’.14 This development of
law was followed in India.15 In Binapani Devi, the Supreme Court observed, ‘If there is power to decide and determine to
the prejudice of a person, duty to act judicially is implicit in the exercise of such power’.16 In AK Kraipak, the court
observed that the concept of quasi-judicial power has been undergoing radical change and ‘the dividing line between the
administrative power and quasi-judicial power is quite thin, and is being gradually obliterated.17 In the words of Bhagwati
J:

The net effect of these and other decisions was that the duty to act judicially need not be super-added, but it may be spelt out from
the nature of the power conferred, the manner of exercising it and its impact on the rights of the persons affected...18

However, a writ of certiorari can never be issued to call for the records, papers and proceedings of an Act or Ordinance for
quashing such Act or Ordinance.19Certiorari and prohibition may be issued to inferior statutory tribunals who do not claim
to be and would not be recognised as courts of justice for controlling their proceedings.20 The orders of the appropriate
Government in making and refusing to make an order of reference under s 10 and s 12(5), appointing the authorities under
ss 7, 7 A and 7B, transferring the proceedings from one tribunal to another under s 33B are amenable to writ of mandamus
upon judicial review while the orders and awards of the adjudicatory authorities under ss 13, 15, 17, 17A 33, 33A, 33C, 36

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and 36A are quashable on certiorari, if they are in excess of jurisdiction or suffer from an error of law apparent on the face
of record or violate the rules of natural justice. These provisions vest these bodies with ‘legal authority to adjudicate upon
or otherwise decide’ the questions of which they are seized. Furthermore, these authorities have ‘to determine questions
affecting the rights of the subjects’. They have, therefore, to comply with the basic procedural requirements. In Western
India Automobile Assn, the federal court said that the industrial adjudicators have the discretionary jurisdiction to award
the relief of reinstatement where they find that the services of industrial workers were illegally or wrongfully terminated.21
This discretion of the tribunals is, however, reviewable.22 Prohibition is ‘a judicial writ, issuing out of a superior court to
an inferior court, preventing the inferior court from usurping jurisdiction with which it is not legally vested’ and it is issued
to compel the courts entrusted with judicial duties to keep within the limits of their jurisdiction.23 In the matter of granting
prohibition, the court will not be fettered by the fact that an alternative remedy exists to correct the absence or excess of
jurisdiction,24 or that an appeal lies against the absence or excess.25 However, an order in the nature of prohibition will not
be issued unless there is a material question involved.26 In cases of patent defects of jurisdiction or where the defect is
apparent on the face of the proceedings, the order of prohibition is not discretionary, it issues ex debito ustitiae.27
Prohibition cannot, however, be claimed as of right where the defect of jurisdiction is not clear. In other words, where the
jurisdictional defect is-not patent, the court has a discretion and may decline prohibition, by reason of the conduct of a
party.28 In cases, where the proceedings before the inferior tribunal are partly within its jurisdiction and partly outside its
jurisdiction, prohibition will lie against doing what is in excess of jurisdiction.29 Likewise, where the inferior tribunal gives
itself jurisdiction by an erroneous conclusion on a point of law, prohibition will lie. However, where the tribunal while
determining the jurisdictional question, decides the question of fact on conflicting evidence,30 the writ court will not
interfere except on very strong grounds;31 nor will prohibition be granted when it is clear that a question which might be
raised in the proceedings, and which is not within the jurisdiction of the inferior tribunal will not be contested in those
proceedings,32 or because the inferior tribunal in the course of its judgment merely uses certain language relevant only to a
cause of action outside its jurisdiction.33 Prohibition will, however, issue as soon as an inferior tribunal proceeds to apply a
wrong law, when deciding a fact on which the jurisdiction depends.34 The power of the High Court to issue writs under Art
226 cannot be disputed where the tribunal is not duly constituted and is acting without jurisdiction.35In cases arising out of
the jurisdiction of the adjudicatory authorities under the Industrial Disputes Act, the High Courts generally refuse to bypass
the normal procedure prescribed by the Act and throttle an inquiry into the facts by issuing writs of prohibition without a
clear-cut prima facie case of want of jurisdiction.36

In Hari Vishnu Kamat, it was observed that the writs of certiorari and prohibition have many common characteristics.
Both the writs have, for their object, the restraining of inferior court or tribunal from exceeding their jurisdiction and they
can be issued, not merely to courts but to all authorities exercising judicial or quasi-judicial functions. However, it has to
be borne in mind that once an adjudication is over, it is only certiorari that can be invoked, as prohibition in such a case
will be futile. However, if a tribunal decides a jurisdictional question erroneously, that decision may be quashed on
certiorari and it may be further interdicted by prohibition from further proceedings to decide the matter on merits. Indian
courts have, by and large, followed the English decisions in issuing writs of prohibition and certiorari though the other
expression ‘orders’ or ‘directions’ used in Art. 226 and 32 have been liberally utilised in getting rid of the technicalities of
the English Law. In other words, when an inferior court or tribunal takes up a matter over which it has no jurisdiction, for
hearing, the person against whom proceedings are taken can move the writ court for an order of prohibition and that
prohibition will forbid the inferior court from continuing the proceedings. On the other hand, if the court hears that cause
or matter and gives a decision, the party aggrieved would move the superior court for a writ of certiorari and on that, an
order will be made quashing the decision on the ground of want of jurisdiction.37 One significant difference between them
is that they are issued at different stages of the proceedings. Prohibition may, and usually must, be invoked at an earlier
stage than certiorari. Prohibition will not lie unless something remains to be done that a court can prohibit. Certiorari will
not lie unless something has been done that a court can quash. But it is sometimes appropriate to apply for both orders
simultaneously - certiorari to quash an order made by a tribunal in excess of its jurisdiction, and prohibition to prevent the
tribunal from continuing to exceed its jurisdiction.38 In the words of Professor Wade: ‘Prohibition stands in much the same
relation to certiorari as injunction stands in relation to declaration. Certiorari and prohibition rest on common principles
and frequently go hand in hand, as where an order is quashed by certiorari, and, at the same time, a prohibition is awarded
to prevent any further irregularity being committed’.39 In Navinchandra Shah, Desai J of the Gujarat High Court (as he
then was), observed:

The expansive and extraordinary power of the High Courts under Art 226 is as wide as the amplitude of the language used
indicates and so can affect any person even a private individual-and be available for any other purpose...The Supreme Court has
spelt out wise and clear restraints on the use of this extraordinary remedy and High Courts will not go beyond those wholesome
inhibitions except where the monstrosity of the situation or other exceptional circumstances cry for timely judicial interdict or
mandate. The mentor of law is justice and a potent drug should be judiciously administered. Speaking in critical retrospect and
portentous prospect, the writ power has, been the people’s sentinel by and large, on the qui vive and to cut back on or liquidate that
power may cast a peril to human rights.40

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In industrial adjudication, an order of reference itself may be challenged being beyond the competence of the ‘appropriate
Government’. There may be cases, where it is patent that the appropriate Government was not competent to make the
reference. In such cases, a party aggrieved by the order of reference may directly invoke the jurisdiction of the writ court.
In such a case, the writ court will quash the order of reference and issue a writ of prohibition to the tribunal directing it not
to proceed with the adjudication of the reference. The scope of writ jurisdiction of the High Court under Art 226 is not the
same as that of an adjudicatory authority on a reference under s 10 or on an application under s 33 or s 33C(2). The
jurisdiction of the authorities under these provisions is much wider. For instance, while adjudicating a dispute relating to
dismissal of a workman under s 10 or dealing with an application under s 33, the industrial authorities can go into the
question whether the dismissal of a workman amounts to victimisation or unfair labour practice or whether the employer
has acted bona fide. These questions cannot be gone into by the writ court.41 The confines of the writ court are only to see
whether the orders or awards of the industrial authorities are suffering from any jurisdictional errors or are violative of the
rules of natural justice or are vitiated by errors of law apparent on the face of the record.42There may be cases where lack
of jurisdiction is not patent but it is latent. For instance, where the jurisdiction of the tribunal to adjudicate upon a dispute
referred to it depends upon the determination of the question, whether the reference is valid; the tribunal may have to
determine the collateral questions, such as, whether what is referred is an industrial dispute or the activity in question is an
industry or the workman concerned is a ‘workman’ within the meaning of the definitions ascribed to these terms in the
Act, and so on. The tribunal cannot assume jurisdiction by erroneously deciding these questions. The decision of the
tribunal on these questions may be impugned before the writ court. If the writ court comes to the conclusion that the
decision of the tribunal on these collateral or jurisdictional question is erroneous, it will quash the decision and prohibit the
tribunal from proceeding with the adjudication of the dispute on merits.

The adjudicatory authorities under the Industrial Disputes Act are vested with jurisdiction to decide and resolve industrial
disputes. Primarily it is for these bodies to decide the disputes referred to them. However, the jurisdictional issues may
have to be decided as preliminary issues, if facts are not in dispute or such issues can be decided independently of the
merits of the case. However, facts of a particular case may not permit or enable such issues to be decided de hors the
merits of the case. In such an event, the adjudicators may have to decide the points of reference and the question, whether
they involve industrial dispute, simultaneously. Normally, a writ court will not entertain the challenge to the order of
reference on the ground that the reference is not an industrial dispute. There may be rare cases when the writ court may be
in a position to decide such question on the basis of admitted facts and having regard to the particular circumstances of a
case, in such a situation, the writ court may intervene at the initial stage. Otherwise, it would be unwise for the writ court
to interrupt the proceedings at the initial stage on a reference in every case. The normal rule is to allow the tribunal duly
constituted for a specific purpose by the law to proceed with its inquiries unless on the face of it, a particular inquiry does
fall within the scope of its powers.43 For instance, a writ court will not quash a memo of charge-sheet unless there is a total
want of jurisdiction or the action is motivated with mala fides.44

The remedies of certiorari and prohibition may be sought together or alternatively for the grounds in the writ petition for
both the remedies will be the same. After quashing the impugned order, the High Court in its writ jurisdiction, has also the
jurisdiction to modulate the relief to meet the exigencies of a situation.45 However, the fact that the writ court has power to
mould the relief to meet the requirements of each case, does not mean that the draftsman of a writ petition should not apply
his mind to the proper relief which should be asked for and throw the entire burden of it upon the court.46 Where the labour
court directed the reinstatement of a workman dismissed for unauthorised absence for 62 days on the ground that certain
other workmen who absented from duty were not dismissed, the High Court exercising its writ jurisdiction under Art 226
set aside the order of the labour court.47 In Panchanan Manna, the Calcutta High Court held that where the punishment
imposed by the disciplinary authority shocks the conscience of the High Court, it could appropriately mould the relief,
either by directing the disciplinary/ appellate authority to reconsider the penalty imposed or, to shorten the litigation, it
may itself impose appropriate punishment with cogent reasons therefor in some cases. In the facts and circumstances of the
case, the workman was ordered to be reinstated but without backwages.48 An award passed by the labour court, (i) without
properly appreciating the questions of law and fact, (ii) without properly construing the wage register and attendance
register produced by the management to show that the workman never worked in the establishment, and (iii) by merely
relying on the oral evidence of the workman, is not sustainable and is liable to be quashed in a writ of certiorari.49 In
PGIMER, the Supreme Court observed:

The labour court being the final court of facts came to a conclusion that payment of 60 per cent wages would comply with the
requirement of law. The finding of perversity or being erroneous or not in accordance with law shall have to be recorded with
reasons in order to assail the finding of the tribunal or the labour court. It is not for the High Court to go into the factual aspects of
the matter and there is an existing limitation on the High Court to that effect. In the event, however, the finding of fact is based on
any misappreciation of evidence, that would be deemed to be an error of law, which can be corrected by a writ of certiorari. The
law is well settled to the effect that finding of the labour court cannot be challenged in a proceeding in a writ of certiorari on the
ground that the relevant and material evidence adduced before the labour court was insufficient or inadequate though, however,

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perversity of the order would warrant intervention of the High Court.50

In Lakshmi Precision, where the High Court upheld the order of labour court directing reinstatement of a workman whose
services were terminated for unauthorised absence, on finding that his absence was on account of illness, the Supreme
Court observed that interference by High Court is justified where it is found that the action was purely and surely arbitrary
in nature. The Supreme Court further held that arbitrariness is an antithesis to the rule of law-equity, fair play and justice.51
Where the employer offered reinstatement without backwages despite the fact that the workman had abandoned the
service, and the workman did not opt for joining even after several reminders from the management, the High Court, while
quashing the order of labour court, held that the employer had not terminated the services of the workman, the workman
was indulging in vexatious litigation and that the labour court failed to consider what was wrong in ordering reinstatement
with full backwages.52 Promotion of the workman during the pendency of disciplinary proceedings does not mean that the
charges against him were wiped out. At the most, it may be a factor while granting final relief to the workman. The award
of the labour court that the workman was free from the charges on account of his promotion is wrong, and is set aside.53
Where the labour court found that the charges of forgery and issue of fake certificates were not proved, and directed
reinstatement of the employee after considering all the documents and evidence, the award of the labour court could not be
said to be perverse.54Where the labour court ordered reinstatement of a worker dismissed for participating in an illegal
strike, it was held that the labour court had power under s 11A to interfere with the quantum of punishment and that the
High Court under Art 226 could not act as an appellate authority over the tribunal.55 The tribunal has power under s 11A to
reappraise evidence and satisfy itself whether the evidence relied upon by the employer establishes the misconduct alleged
against the workmen. The writ would be justified in interfering with the order of the tribunal, only if it comes to the
conclusion that the order of the tribunal is either contrary to some provisions of law or is based upon no evidence on record
to substantiate the same or is based upon certain inadmissible evidence or the tribunal did not allow certain admissible
evidence to be let in, or the conclusion of the tribunal was such which no reasonable person would arrive at.56

However, a single judge of Madras High Court went about reappraising the evidence and ordered reinstatement in a case
where the workman was dismissed for being guilty of using indecorous language and the personnel officer of the company
and the said dismissal was upheld by the labour court in an adjudication under s 11A.57 Such exercise which borders on
assuming appellate jurisdiction is not only unwarranted, but is a patent violation of the principles enunciated by the Apex
Court. And this was certainly not one of those rarest of the rare cases falling within the ratio of BC Chaturvedi,58 and
Mahesh Kumar Mishra,59 warranting the High Court to step in and undo the injustice. At any rate, it does not appeal to
logic or common sense that judges should go about wrongfully interfering with disciplinary actions involving theft, fraud,
dishonesty, misappropriation, or riotous, violent and disorderly behaviour, and set aside punishments on flimsy and
questionable grounds. Another decision which falls in the same species as that of Damodaran is that of the same High
Court in Thangaraj, in which Venkatachalam, J undertook the exercise of reappreciating the evidence, discussing and
evaluating questions of fact, which he was not supposed to do in a petition under Art 226, and finally held that the
dismissal for a misconduct involving giving of false complaint against his superior officer was disproportionate, quashed
the order of labour court and ordered fresh appointment without attendant benefits.60 In Yogeshwar Raj, the workman was
charge-sheeted for submitting a bogus certificate to the effect that he belonged to a scheduled tribe at the time of
employment for a post reserved for scheduled caste/scheduled tribe candidates. The workman did not submit any
explanation despite extension of time sought for by him for submitting the explanation. An inquiry was conducted in the
course of which the inquiry committee came to the conclusion that the caste certificate submitted by the workman was a
bogus certificate. The inquiry committee, however, expressed the view that since the original caste certificate submitted by
the workman in 1976 was subsequently affirmed by a certificate issued from the office of the Collector in 1999, the said
action of the workman did not amount to delinquency on the part of the workman. It was also found that the caste
certificate dated 4 February 1998, submitted by the workman was forged. The disciplinary authority rejected the findings
of the inquiry committee duly supported by reasons and served a show-cause notice on the workman. The workman moved
the High Court, which stayed the proceedings and issued a rule nisi. Allowing the appeal by special leave, Ruma Pal J
observed:

We are not aware as to the reason why the High Court was persuaded to issue a Rule Nisi, but its further observations, ‘prima
facie, we are satisfied that the petitioner belongs to the scheduled caste/scheduled tribe’ and also grant of an interim order staying
the proceedings before the disciplinary authority, were erroneous. It appears from a copy of the writ petition that the respondent
has not questioned the jurisdiction of the disciplinary authority to issue the impugned show cause notice. The two issues of the
respondent’s caste and whether he had adequately explained the production of the bogus certificate of October 4, 1998 are yet to be
decided by the disciplinary authority. Both the issues are primarily issues of fact. The High Court should not have pre-empted a
factual decision of the disciplinary authority on the issues. Nor should the High Court have stayed the proceedings on a prima facie
finding on the subject matter of inquiry particularly when the competence of the disciplinary authority was not in doubt.61

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It is difficult to appreciate as to under what law and authority, constitutional provisions not excluding, could the High
Court exercise a power of this kind and stall the disciplinary proceedings at such an early stage of charge-sheet and
inquiry. On what basis did the High Court proceed to draw a conclusion to the effect that prima facie it was satisfied that
the petitioner belonged to scheduled caste/scheduled tribe, when the matter was yet to be investigated in order to prove or
disprove the claim of the petitioner? This is a striking illustration of abuse of the power of judicial review conferred on the
High Court, and the Supreme Court rightly quashed the order. In Dharampal, the Supreme Court held that the High Court
should not interfere with the approval granted by the tribunal under s 33(2)(b) on the ground that the tribunal had
committed an error while granting approval. The appropriate course for the workman was to invoke s 10 to work out his
rights.62

(b) Bars to Certiorari and Prohibition

It is well-settled law that in its writ jurisdiction under Art 32, the Supreme Court or the High Court under Art 226 will not
decide the disputed questions of fact. The area to decide the disputed questions of fact is in the jurisdiction of the trial
courts who are competent to determine such questions on taking appropriate evidence. A priori, the writ courts do not
embark upon the trial of disputed questions of fact. For instance, in Surendra Prasad, the dispute between the workmen
and the employer with respect to the claim that the canteen workers be treated at par with the other employees of the
corporation, involved disputed questions of fact, the Supreme Court held that it was not the appropriate forum in its
jurisdiction under Art 32 to decide the dispute. The court, therefore, directed the ‘appropriate Government’ to refer the
dispute for adjudication to the industrial tribunal under s 10(1)(b) of the Act. Even the writ jurisdiction of a High Court
under Art 226 is not of an appellate nature, howsoever wide, it is only supervisory jurisdiction.63 The writ of certiorari can
be issued the only in cases where the orders or awards of the quasi-judicial authorities suffer from jurisdictional defects or
are vitiated by errors of law apparent on the face of the record or violate the rules of natural justice. It is not that every
wrong decision of an inferior tribunal is reviewable on certiorari by the writ court. In other words, the writ court cannot sit
in appeal over the findings recorded by a competent tribunal by re-appreciating the evidence for itself, which would be
outside its jurisdiction unless such findings are supported by no evidence or are otherwise perverse.64 Hence, the writ court
is not competent to review the evidence adduced before the inferior tribunal, its duty is merely to see whether its
conclusion is supported by evidence. The question of sufficiency of evidence will not be open before the writ court.65Some
of the cases where the writ court will not review the orders and awards of the tribunals, like the adjudicatory authorities
under the Industrial Disputes Act, are discussed under the following heads. These heads, however, are neither exhaustive
nor mutually exclusive, but they overlap one another in certain areas. However, they have been devised for the
convenience of treatment.

In Estrolla Rubber, the Supreme Court held that Art 227 does not confer an unlimited prerogative upon the High Court to
correct all wrong decisions or to prevent hardships caused thereby. Exercise of this power in interfering with the orders of
courts or tribunals is restricted to cases of serious dereliction of duty and flagrant violation of the fundamental principles of
law or justice where, if the High Court does not interfere, a grave injustice remains uncorrected. The High Court acting
under that article cannot exercise its power as an appellate court or substitute its own judgment in place of that of the
subordinate court to correct an error which is not apparent on the face of the record.66 In Madura Coats, Padmanabhan J of
the Madras High Court, while quashing the order of the labour court directing reinstatement of workmen, who were
dismissed for absence without permission as they were held in judicial custody, observed that the management could not
be held responsible for the workmen being absent for their own personal reasons and without permission. Having held
thus, the learned judge directed the management to pay a lump sum compensation of Rs 1,60,000 to each of the dismissed
workmen in lieu of their reinstatement. Once it is held that the punishment was in order and was preceded by a proper
inquiry, question arises as to whether there is a need to shower generosity on the dismissed workmen at the expense of the
employer. If the employer could not be held responsible for the continued unauthorised absence of the workmen for their
personal reasons and was perfectly justified in imposing the punishment of dismissal, then, by the same token, no liability
could be fastened on to him to pay any compensation in lieu of reinstatement. The learned judge observed:

Taking into consideration the short period of service rendered by each one of them, instead of reinstatement, the labour court
should have directed the management to pay a lumpsum compensation as the workmen have obviously no regard for discipline as
well as no regard for their employment and have failed to report for duty for several months.67

The conclusion reached by Padmanabhan J is repugnant both to the facts as admitted by him and his reasoning, and is
manifestly perverse. In Mysore Sugar, the facts were that in respect of a dispute about the date of birth, the management
constituted a medical board which determined the age of the workman, and the workman accepted the same. After about
30 years, the workman raised a dispute questioning the date of birth as determined by the medical board, and the labour
court directed the management to reinstate the retired workman. Quashing the order of the labour court, the High Court
held that the opinion of the medical board could not be challenged after a lapse of over thirty years when the employee

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himself had accepted it.68

Alternative Remedies:

Before the Constitution (Forty-second Amendment) Act 1976, the existence of an alternative remedy was not a bar to the
exercise of the jurisdiction of the High Court under Art 226, though it was a relevant consideration upon which the High
Court could refuse to exercise its jurisdiction.69 However, cl (3) of Art 226 substituted for the earlier Art 226 by the
Constitution (Forty-second Amendment) Act completely prohibited the High Courts from entertaining petitions for redress
of any injury if any other remedy for such redress was provided for by or under any other law for the time being in force.
This relegated the law to the pre-Constitution period when under s 45 of the Specific Relief Act 1877, the relief in the
nature of mandamus was not available where the petitioner had any other specific and adequate legal remedy.70 This
amendment not only barred the writ of mandamus, but it also barred the writs of prohibition and certiorari as well, if any
alternative remedy was available for redress, even in cases of patent excess of jurisdiction or error of law apparent on the
face of the record or violation of the rules of natural justice. But cl (3) has now been omitted by the Constitution (Forty-
fourth Amendment) Act 1978, the result of which is to restore the law to its pre-forty-second amendment with effect from
29 June 1979. After this amendment, a writ petition cannot be dismissed solely on the ground of existence of an alternative
remedy.71 Although there is no rule or provision of law to prohibit the extraordinary jurisdiction of the courts under Art. 32
and 226, the courts always insist upon recourse to ordinary remedy or the exhaustion of other remedies. A Constitution
Bench of Supreme Court in Thansingh Nathmal dealt with the question as to how the discretionary jurisdiction of the writ
court is required to be exercised with respect to a petition filed under Art 226 by a person before it by by-passing a
statutory alternate remedy available to him for obtaining redressal of his grievance ventilated in his petition. The court
reverberated the well-settled legal position that though the jurisdiction of the writ court is couched in wide terms and the
exercise thereof is not subject to any restriction except the territorial restrictions which are expressly provided for in the
article, the exercise of the jurisdiction is discretionary; it is not exercised merely because it is lawful to do so. The very
amplitude of the jurisdiction demands that it will ordinarily be exercised subject to certain self-imposed restrictions.
Speaking for the court, Shah J spoke thus:

Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in
the manner provided by a statute, the High Court normally will not permit, by entertaining a petition under Art 226, the machinery
created under the statutory to be bypassed and will leave the party applying to it to seek resort to the machinery so set up.72.

In the words of Hidayatullah CJI, ‘this attitude arises from the acceptance of the salutary principle that extraordinary
remedies should not take the place of ordinary remedies’.73 The remedy under Art 226 being in general, discretionary, the
High Court may refuse to grant it to a litigant when an equally convenient, beneficial and efficacious alternative remedy is
open to him and he should be required to pursue that remedy and not invoke the special jurisdiction of the High Court to
issue a prerogative writ.74 For instance, where for more than one year, the petitioner did not avail himself of the efficacious
alternative remedy of appeal against his dismissal where he could appropriately canvass all questions of fact as to how the
order of dismissal was improper or contrary to principles of natural justice, the writ court declined to exercise its
jurisdiction.75 However, in cases where the ordinary process of law appears to be inefficacious, the writ court would
interfere even if other remedies are available. The existence of another remedy does not affect jurisdiction to issue a writ.76
The rule requiring the exhaustion of statutory remedies, before a writ is granted, is however, a rule of policy, convenience
and discretion rather than a rule of law. In the words SR Das CJI, ‘There is no rule with regard to certiorari as there is with
mandamus, that it will lie only where there is no other equally effective remedy.’ Instances are numerous where a writ has
been issued in spite of the fact that the aggrieved party had other legal remedies.77 Where the order complained against is
alleged to be illegal or invalid and being contrary to law, a petition at the instance of the person adversely affected by it,
would lie to the High Court under Art 226 and such a petition cannot be rejected on the ground that an appeal lies to the
higher officer of the state Government.78

The existence of an alternative remedy does not per se operate as an absolute bar to the exercise of the jurisdiction of the
High Court under Art 226, though the existence of an adequate legal remedy is a thing to be taken into consideration in the
matter of granting writs and the writ court will be slow to exercise such jurisdiction where there is an adequate alternative
remedy open to the party. Where the statutory remedy is neither effective nor efficacious, dictates of justice demand that,
in appropriate cases, the remedy under Art 226 should not be denied to the aggrieved party.79 In Maharashtra GK Union,80
the petitioners had not approached the labour court with an application for setting aside the ex parte award on the basis of
the legal advice to the effect that no useful purpose would be served by filing such application considering the view taken
by the same labour court in similar other cases. Thus, though an alternative remedy was available to the petitioners, they
had not availed themselves of the same. However, this was done by them on legal advice and due to the misapprehensions
of the position of law. In these circumstances, the Bombay High Court did not think it fair at the stage of the final hearing
of the writ petition to dismiss the writ petition on the ground of alternative remedy. The Allahabad High Court in

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Nathaniel Masih, held that when the petition has been admitted, it would not be proper to dismiss it at the final hearing on
the mere ground of availability of alternative remedy.81

In Kailash Paswan, the Patna High Court held that once a writ petition is admitted and parties have filed affidavits and
counter-affidavits and the matter remained pending in the High Court for some years, unless there are disputed questions
of fact to be gone into, the writ court should be very loath to dismiss the writ petition on the grounds of alternative remedy.
It should not ordinarily do so. However, the court pertinently pointed out that where certain disputed questions of fact have
to be decided for determining a point in dispute, such questions cannot be decided by a writ court. After all it is a self-
imposed restriction. It is a matter of discretion not of jurisdiction.82 The exercise of discretion depends upon the wrong and
illegality alleged and complained against. For instance, where an order is without jurisdiction and no inquiry into facts is
necessary, it is open to the writ court to interfere without driving the parties to resort to the alternative remedy.83 The
alternative remedy must be a specific remedy, particularly, provided under the statute itself An alternative remedy, on its
plain reading, means a remedy which is available to the petitioner concerned and which is not dependent on the opinion of
any other authority.84 The general remedies like suits or the discretionary appeals under Art 136 are not efficacious
alternative remedies.85The question as to whether or not alternative remedy, in a given case, is equally adequate,
efficacious and speedy, must naturally depend upon the peculiar facts and circumstances of that case and no rigid and
inflexible rules can be formulated to cover every case. For instance, where the complaint was that a direction made by the
authority under the Payment of Wages Act was erroneous in law, the defect could have been cured in appeal under s 17 of
the Act, it was held that the failure to appeal precluded the employer from invoking the jurisdiction of the writ court.86
Likewise, mandamus cannot be granted for enforcing an award of an industrial tribunal which is not a law and the manner
of enforcement has been provided in the Act itself.87

If the matter in controversy would require investigation of questions of fact, such investigation cannot obviously be
undertaken in a writ proceeding under Art 226.88In view of the specific remedy under s 13A of the Industrial Employment
(Standing Orders) Act 1946 being available for resolving the dispute as to whether on the materials found against the
workman, the relevant Standing Order was applicable, the writ petition was held to be not maintainable.89On the question,
whether the remedies provided by the Industrial Disputes Act constitute efficacious alternative remedies so as to bar the
writ jurisdiction of the High Courts under Art 226, a single judge of the Madras High Court, observed that the provision of
an alternative remedy is not always an absolute bar to the exercise of the jurisdiction vested in this court under Art 226,
though the court should be slow to exercise such jurisdiction when there is an adequate alternative remedy open to the
party. In the circumstances of the case, the court quashed the order passed by the tribunal in excess of its jurisdiction.90 In
Hospital Mazdoor Sabha, the Supreme Court affirmed the decision of Bombay High Court entertaining a writ petition
against the order of retrenchment of certain workmen on the ground of breach of the provisions of s 25F of the Industrial
Disputes Act.91 In Basant Kumar Sarkar, a Constitution Bench, dealing with a notification issued under s 1(3) of the
Employees’ State Insurance Act 1948, observed that though the power of the High Courts under Art 226 is very wide, even
this power cannot take within its sweep ‘industrial disputes’ of the kind which were sought to be raised before the High
Court.92 In Rohtas Industries, the Supreme Court observed that, if the industrial dispute relates to enforcement of a right or
an obligation created under the Act, then the only remedy available to the suitor is to get an adjudication under the Act.93
In Bihar Rajya Vidyut Parishad, the court dismissed the petition on the ground of alternative remedy as the question
related to terms and conditions about the workmen, could only be adjudicated on evidence and a writ court would not enter
into the question of fact.94

In Mohd Yousufoddin, the High Court of Andhra Pradesh did not entertain a writ petition without exhausting alternative
remedy under the Industrial Disputes Act, where the workman kept silent for a number of years without challenging the
determination of his date of birth either on account of the statement given by him or on account of the examination by the
medical board.95 The Karnataka High Court in Visvesvaraya Iron & Steel, held that the fact that there was a delay in
disposal of proceedings before the labour court and that there was accumulation of a large number of cases was no cause to
bypass alternative remedy by the writ court.96 In Aziz, the court held that since the corporation was an authority within the
meaning of Art 12, Arts 14 and 16 were applicable to the service conditions of the petitioners under the corporation.
Therefore, it was open to the petitioners in a writ proceeding to enforce their right against the corporation on the ground
that refusal to absorb them in the service of the corporation would be violative of the guarantees of Arts 14 & 16. The
ground that the petitioners had an alternative remedy of raising an industrial dispute was of no avail.97 Likewise, the
employer took recourse to various measures in order to prevent the workmen from getting the bonus in terms of a
settlement and the orders of the Supreme Court and the High Court. The Calcutta High Court in Amalendu Gupta, held that
it is unlikely that the workmen will getquick and efficacious relief by taking recourse to the remedies provided in the
Industrial Disputes Act.1 But if the adjudication involves questions of fact which can be determined only by adducing
relevant evidence in accordance with the procedure, the statutory remedy of s 10 and s 33C(2) should be treated as a bar to
the writ jurisdiction.2 Adjudication of the dismissal of a workman involves the questions of validity of domestic inquiry,
justifiability of the punishment and bona fides of the management. These questions can appropriately be determined by an
industrial tribunal on taking relevant evidence and hearing the parties and not by the writ court. Even from the point of

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view of the workman, the remedy of adjudication under s 10 is better and more effective because he will have full
opportunity of adducing and rebuttal of evidence before the tribunal whose jurisdiction is very wide under s 11A. In such
cases, the alternative remedy of reference and adjudication under s 10 should normally bar the constitutional remedy of
writs.3

A Full Bench of Punjab and Haryana High Court in Manohar Lal, has also held that the remedy of reference available
under s 10 of the Act bars the filing of a writ petition. This remedy does not cease to be a remedy simply because the
matter of reference depends upon the opinion of the Government.4 A similar view has been taken by a Full Bench of Patna
High Court in Dinesh Prasad, in which Sandhawalia CJ held that the suitor must exhaust the remedies under the Industrial
Disputes Act before seeking relief in the writ jurisdiction unless the ‘monstrosity of situation or other exceptional
circumstances cry out for interference by the writ court at the very threshold’.5 The bar of alternative remedy is more
applicable to a writ of mandamus than to a writ of certiorari. It has been pointed out by the Supreme Court in Mohammad
Noor, that though there is no rule with regard to certiorari as there is with regard to mandamus that it would lie only when
there is no other equally effective remedy. It is well established that provided the requisite grounds exist, certiorari will lie
although a right to appeal has been conferred by statute.6 Since mandamus will be issued where there is a specific legal
right and no specific remedy, it may be refused where there is an alternative remedy which is adequate, that is to say,
equally convenient, beneficial and efficacious.7 But the writ of certiorari, subject to certain exceptions, is granted to an
aggrieved party even though there is an alternative remedy, unless of course his conduct disentitles him to relief.8 In
granting an order of prohibition, the court will not be fettered by the existence of an alternative remedy or the availability
of an appeal.9 From the decided cases, it can be summed up that the following are some of the circumstances in which
relief under Art 226 could be granted despite the existence of an alternative remedy:

(1) the petitioner complains of violation of the fundamental rights. However the extraordinary remedy under Art 226 is not
intended to supersede completely the modes of obtaining relief by an action in a civil court or to deny defence
legitimately upon any such actions. In such cases, it will be sound use of discretion to leave the aggrieved party to seek
his remedy by ordinary mode of action in a civil court and to refuse to exercise in his favour the discretion to grant the
remedy under Art 226;

(2) some mandatory provisions of the Constitution have been violated;

(3) rules of natural justice have been violated;

(4) the act complained of is contrary to law or without the authority of law;

(5) the alternative remedy is authorised by law which is ultra vires or the alternative remedy itself is unconstitutional or ultra
vires;
(6) the act complained of is without jurisdiction and the state threatens coercive process for recovering the amount
considered to be payable to it as an arrear of land revenue, if upon the facts established, the amount sought to be
recovered is not payable even though the terms of the contract have to be construed. For instance, where the properties
of a party are attached under the provisions of Revenue Recovery Act for recovering the sums said to be due under a
certificate issued by the concerned authority under s 33C(1) of the Industrial Disputes Act, existence of a remedy of a
suit, could not be considered to be effective alternative remedy to bar the issuance of a writ, if the person aggrieved
could satisfy the court that it has got jurisdiction otherwise to deal with the matter;
(7) the writ petition raises some important questions of interpretation of statutory provisions or rules which public interest
requires to be decided speedily; or
(8) the remedy itself is not adequate.

Following are some of the instances where the remedy itself is not adequate:

(1) where resort to it will not secure the relief which the action complained of demands; for instance where interim relief will
not be available by reason of a statutory notice, such as, is required under s 80 of the Code of Civil Procedure;
(2) where it would be futile to drive a party to an alternative remedy, for instance when an appellate authority has pre-judged
the issue and the authority whose order is impugned has acted under the general or special directions of the appellate
authority;
(3) where the alternative remedy is not a matter of right; for instance a remedy under Art 136 is not an alternative remedy to
what could be granted under Art 226, because the right to apply for leave to the Supreme Court, if it could be called a
‘right’ at all cannot be equated to a right of appeal;

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(4) where the alternative remedy is onerous and burdensome; or

(5) where an alternative remedy is available under a statute but some grounds to be raised fall beyond the jurisdiction of an
authority created under the statute then the writ petition is maintainable to agitate not only sued grounds but also the
grounds which would within the particular jurisdiction of the statutory authority.

In UP State Bridge Corporation, the facts were: some 168 workmen of the corporation remained absent from duty en bloc
from 12 October 1995 causingserious dislocation to the construction work that was in progress. The corporation issued a
notice on 18 October 1995 directing them to report for duty immediately, failing which their names would be struck off
from the rolls, as provided for in the standing order. Similar notices were published in the Hindi Newspaper on 22 & 28
December 1995, which also stated that if the workmen whose names were appended to the notice did not report for duty
within a period of three days from the date of the publication of the notice, it would be presumed that they had abandoned
their services with the Corporation without notice and their contract of service would come to an end and their names
would be removed from the muster roll. According to the appellant despite the repeated notices the workmen continued to
absent themselves and ultimately on 19 January 1996 an order was issued putting an end to the services of 168 workmen
on the presumption that they had abandoned their services with the Corporation on their own. Thereafter, one of the
workmen filed a writ petition before the Lucknow Bench of the High Court, which was dismissed with the endorsement
that they could raise an industrial dispute, if they so desired. A second writ petition was filed, this time by the union, before
the Allahabad High Court, which was allowed by a single judge, who came to the conclusion that the word “absence” did
not by itself mean “abandonment of service” and when an employee went on strike it was not the intention to abandon
service. It was said that “Resorting to strike” is neither misuse of leave nor over-staying of leave. Standing order does not
provide for any provision as to how the question of strike is to be dealt with.” It was further said that the strike was not
illegal as no notice was required to be given to the respondent under Section 22 of the Industrial Disputes Act, 1947. It was
also held that in any event - whether a strike was illegal or legal - it did not amount to abandonment of service justifying
action under the standing orders of the company. Allowing the appeal filed by the Corporation, and quashing the order
passed by the single judge, Ruma Pal J (for self and BP Singh J) of the Supreme Court held:

We are of the firm opinion that the High Court erred in entertaining the writ petition of the respondent-Union at all. The dispute
was an industrial dispute both within the meaning of the Industrial Disputes Act, 1947 as well the UPIDA, 1947. The rights and
obligations sought to be enforced by the respondent-Union in the writ petition are those created by the Industrial Disputes Act. In
The Premier Automobiles Ltd.. ., it was held that when the dispute relates to the enforcement of a right or an obligation created
under the Act, then the only remedy available to the claimant is to get adjudication under the Act. This was because the Industrial
Disputes Act was made to provide

... a speedy, inexpensive and effective forum for resolution of disputes arising between workmen and their employers. The
idea has been to ensure that the workmen do not get caught in the labyrinth of civil courts with their layers upon layers of
appeals and revisions and the elaborate procedural laws, which the workmen can ill afford. The procedure followed by civil
courts, it was thought, would not facilitate a prompt and effective disposal of these disputes. As against this, the courts and
tribunals created by the Industrial Disputes Act are not shackled by these procedural laws nor is their award subject to any
appeals or revisions. Because of their informality, the workmen and their representatives can themselves prosecute or defend
their cases. These forums are empowered to grant such relief as they think just and appropriate. They can even substitute the
punishment in many cases. They can make and re-make the contracts, settlement, wage structures and what not. Their awards
are no doubt amenable to jurisdiction of the High Court under Article 226 as also to the jurisdiction of this Court under
Article 32, but they are extraordinary remedies subject to several self-imposed constraints. It is, therefore, always in the
interest of the workmen that disputes concerning them are adjudicated in the forums created by the Act and not in a civil
court. That is the entire policy underlying the vast array of enactments concerning workmen. This legislative policy and
intendment should necessarily weigh with the courts in interpreting these enactments and the disputes arising under them.10

Although these observations were made in the context of the jurisdiction of the Civil Court to entertain the proceedings relating to
an industrial dispute and may not be read as a limitation on the Court’s powers under Article 226, nevertheless it would need a very
strong case indeed for the High Court to deviate from the principle that where a specific remedy is given by the statute, the person
who insists upon such remedy can avail of the process as provided in that statute and in no other manner. (paras 12 & 13).

On the question of striking the names of 168 workmen, the learned judge observed:

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The final submission of the respondent was that the UPIDA provided for penalty after a departmental enquiry, in respect of the
workman who may have gone on illegal strike and, therefore, there could be no termination of services on account of illegal strike.
The submission is unacceptable as we have said there is no proof that the respondents were on strike at all. Besides, merely
because the action is punishable does not mean that the consequence of an unauthorised absence is not available under the Certified
Standing Orders if it so specifically provides. (para 26).. . In the circumstances, we have no hesitation in setting aside the decision
of the High Court in dismissing the writ petition. This order will, however, not preclude the respondent-Union if it is otherwise so
entitled to raise an industrial dispute under the UPIDA.11 (para 27)

It is submitted that this case was rightly decided. It has to be stated that the misconceived decisions rendered by the
Supreme Court in Sukhdev Singh,12Ajay Hasia,13 and a few other cases - by which the apex court opened the floodgates to
the litigants to discard statutory remedies provided by the law and to directly knock at the doors of High Courts and
Supreme Court - were squarely responsible for the subsequent misuse and abuse of writ jurisdiction, not only by the High
Courts, but by the Supreme Court itself during the past four decades.

Delay and Laches:

A writ court normally aids the vigilant. He who deliberately remains aloof or indifferent or recalcitrant cannot be heard to
say that he is aggrieved.14 It is well-established that the writ of certiorari will not be granted in cases where there is such a
negligence or omission on the part of the applicant to assert his right as, taken in conjunction with the lapse of time and
other circumstances, causes prejudice to the adverse party. This principle is to a great extent, similar to, though not
identical with, the exercise of discretion in the Court of Chancery.15 The principle has been stated by Sir Barnes Peacock in
Lindsay Petroleum, as follows:

Now the doctrine of laches in courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to
give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of
it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in
which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time
and delay are most material. But in every case, if an argument against relief, which otherwise would be just, is founded upon mere
delay, that delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon
principles substantially equitable. Two circumstances, always important in such cases, are the length of delay and the nature of the
acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking one course or the
other, so far as relates to the remedy. 16

Unreasonable and inordinate delay on the part of the petitioner in coming to the High Court for relief under Art 226
without any satisfactory explanation as to such delay would disentitle him from obtaining any relief under this article.17 For
instance, in Govindrao, the employee was dismissed from service in October 1977 and his appeal against that order was
also dismissed in July 1978. He did not challenge the appellate order in a writ petition but again filed a departmental
appeal described as ‘special appeal’ which too was dismissed in May 1982. Subsequently, he challenged the validity of the
dismissal order passed in October 1977. The Madhya Pradesh High Court quashed the order of dismissal. In appeal by
special leave, the Supreme Court held that there was no reason for the High Court to entertain a writ petition after a lapse
of 10 years, and should have dismissed it in limine.18 However, the principle that ordinarily delay will defeat the writ
petition is a proposition, not a rule of law but a rule of practice based on sound and proper exercise of discretion and there
is no inflexible rule that whenever there is delay, there must necessarily be an order of rejection of the petition on that
ground alone. The question whether the delay will defeat the writ petition depends on the facts and circumstances of each
case. In a case where the delay has been reasonably explained and no right has accrued to others in the meantime, which is
likely to be disturbed if the petition is entertained, it will be inconsequential.19 The petition cannot be rejected on the
ground of delay where the petitioner was pursuing other remedies before invoking the jurisdiction of the High Court under
Art 226,20 particularly when no inconsistent legal or equitable situation had arisen because of delay or laches on the part of
the petitioner.21 Where the writ petition has been admitted and a prima facie case has been made out, it would be unjust to
deny the relief merely on the ground of laches.22 The fact that the writ petition was admitted and delay having been
explained, the petition cannot be thrown out merely on the ground of delay and laches at the final hearing.23 In other
words, a petition may not be thrown out merely on the ground of delay, but it will be one of the factors that will weigh
with the court in deciding whether or not the case is a fit one for exercise of the special jurisdiction of the court.24
However, a petitioner cannot exonerate himself from delay on the ground that he was engaged in pursuing non-statutory
representations when he is governed by statutory rules particularly when the delay is unreasonable and inordinate.25 The
Allahabad High Court in Board of Revenue, laid down the rule of practice that a writ petition under Art 226 should be filed

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as quickly as possible after the delivery of judgment. A period of 90 days, which is the period fixed for appeals to the High
Court from the judgment of courts below, should be taken as the period for application for the issue of a writ of certiorari,
and that time can be extended only when circumstances of a special nature, which are sufficient in the opinion of the court
are shown to exist.26 This rule has been explained by the Supreme Court in Chandra Bhushan thus:

But in the absence of a statutory rule, the period prescribed for preferring an appeal to the High Court is a rough measure; in each
case the primary question is whether the applicant has been guilty of laches or undue delay. A rule of practice cannot prescribe a
binding rule of limitation; it may only indicate how discretion will be exercised by the court in determining whether having regard
to the circumstances of the case, the applicant has been guilty of laches or undue delay...The rule which has been laid down in
Mongey’s case is at best a rule of practice, and not a rule of limitation.27

Though the Supreme Court thus recognised that normally the question whether a petition under Art 226 for the issue of a
writ of certiorari has been presented without undue delay or laches is a question for the High Court to decide and it would
not interfere with such discretion, in the circumstances of the case, it held that the High Court had erred in exalting a rule
of practice to a rule of limitation and a departure from the rule of practice was justified. In this case, the attention of the
court does not appear to have been drawn to its decision in Bhailal Bhai, holding that the maximum period fixed by the
legislature as the time within which the relief by a suit in a civil court must be brought may ordinarily be taken to be a
reasonable standard by which delay in seeking remedy under Art 226 can be measured.28 This principle will apply to delay
in writ petitions both under Arts 32 and 226. In Sadasivaswamy, the court pointed out:

It is not that there is any period of limitation for the courts to exercise their powers under Art 226, nor is it that there can never be a
case where the courts cannot interfere in a matter after the passage of a certain length of time. But it would be a sound and wise
exercise of discretion for the courts to refuse to exercise their extraordinary powers under Art 226 in the case of persons who do
not approach it expeditiously for relief and who stand by and allow things to happen and then approach the court to put forward
stale claims and try to unsettle the settled matters.29

In Balwant Singh, the workman did not seek review of the High Court order, which was silent on payment of backwages
nor did he move the Supreme Court against the order, with the result the said order became final. After a lapse of two
years, he filed another writ petition in the High Court claiming monetary compensation also for the period during which he
had not actually worked as well as for the termination of the service. The High Court allowed the writ petition granting the
relief claimed. In appeal by special leave, the Supreme Court held that the High Court, in these circumstances, was not
justified in entertaining the claim and allowing the same and quashed the order of the High Court.30 The Orissa High Court
in Bishnu Charan Mohanty, stated the following principles to be kept in mind while determining whether a writ application
would be liable to be dismissed on account of laches and delay:

(1) The Limitation Act has no application to writ petitions. Where, however, a suit for identical relief would be barred by the
law of limitation, the court would ordinarily refuse to exercise discretion to grant relief under Art 226.
(2) Even if a suit for the same relief is not barred by limitation under the Limitation Act, yet the High Court may refuse to
issue a writ if otherwise the delay is not explainable by satisfactory reasons.
(3) Two important circumstances to be borne in mind in all such cases are: the length of the delay, and the nature of the acts
done during the interval which might affect either party and strike balance of justice or injustice in taking one course or
the other so far as relates to the remedy.
(4) Where, by the conduct of the party, the delay might fairly be regarded as equivalent to a waiver of the remedy, the relief
under Art 226 would be refused.
(5) Even if the conduct or act is not equivalent to a waiver, if the neglect of the petitioner put the opposite party in a situation
in which it would not be reasonable to place him if the remedy is afterwards granted, the relief under Art 226 should be
refused on account of delay and laches.
(6) Utmost expedition is the essence for a claim under Art 226.

(7) No hard and fast rule can be laid down. Each case is to be determined on its own facts and circumstances.31

Discretion of Tribunals:

Since writ court is not an appellate court where the correctness of the order or award under review is to be canvassed, it has

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no jurisdiction to substitute its own opinion for the opinion of the inferior tribunal,32 even if it is satisfied that the decision
is wrong. In other words, the writ court will not probe into the merits of the exercise of discretion of an authority unless the
exercise of discretion is perverse. However, if the discretion has not been exercised in accordance with the principles
recognised by law in this behalf-for instance where the power has been abused by exercising it capriciously, arbitrarily or
improperly or the power is not used at all on account of abdication of power to someone else, or for any other reason, the
writ court will quash the resulting order or award. It is well-settled that discretion must be exercised only by the authority
to which it is committed. In the words of Professor SA de Smith:

The authority must genuinely address itself to the matter before it: it must not act under the dictation of another body or disable
itself from exercising a discretion in each individual case. In the purported exercise of its discretion it must nor do what it has been
forbidden to do, nor must it do what it has not been authorised to do. It must act in good faith, must have regard to all relevant
considerations and must not be swayed by irrelevant considerations, must not seek to promote purposes alien to the letter to the
spirit of the legislation that gives it power to act, and must not act arbitrarily or capriciously.. .. These several principles can be
grouped in two main categories:(i) failure to exercise discretion and (ii) abuse of discretionary power. The two classes are not,
however, mutually exclusive. In other words, discretion may be improperly exercised when irrelevant considerations are taken into
account; and where the authority hands over its discretion to another body, it acts ultra vires. Surrender of independent discretion in
favour of the adoption of a policy pursued by a superior authority or to be guided by the dictates of a superior authority is no less
improper. In some cases, authorities entrusted with statutory discretion are usually entitled to and occasionally obliged to take into
account considerations of public policy, and in some contexts, the policy of the Government. Though it may be relevant to take
these factors into consideration, these will not absolve the authorities from their duty to exercise their personal judgment in
individual cases, unless explicit statutory provision has been made for them to give binding instructions by a superior. 33

The tribunals cannot take any action incompatible with the due exercise of their powers and duties because to act so would
be ‘to renounce a part of their statutory birthright.34 The principle that discretions must be exercised ‘according to law’ is,
indeed, deeply entrenched in the common law, although the demarcation line between the legality and the merits of the
exercise of discretion may very much depend upon the particular context in which the issue arises and upon the prevailing
judicial climate of opinion on the proper role of the courts.35 Yet discretion is not self-defining. Its ambit is usually
established by judicial interpretation. It is, of course, plain that such an interpretation is not made in the abstract. It is made
on the basis of a case. Broadly, it is the power which is given by the statute to make a choice among competing
considerations. Most powers to act, of course, involve some element of choice even if it relates to mere details. Thus
discretion implies power to choose between alternative courses of action.36 The exercise of judicial discretion imports a
duty to be, in the words of Lord Mansfield, ‘fair, candid, and unprejudiced; not arbitrary, capricious, or biased; much less,
warped by resentment, or personal dislike’.37 The concept of discretion was elaborated by Lord Halsbury LC, as:

a duty to act ‘according to the rules of reasons and justice, not according to private opinion ...according to law, and not humour. ..
not arbitrary, vague, and fanciful but legal and regular.38

Judicial discretion is always to be exercised, not capriciously or arbitrarily, but according to sound principles laid down for
exercising it.39 Desai J observed:

Whenever, it is said that something has to be done within the discretion of the authority then that something has to be done
according to the rules of reason and justice and not according to private opinion, according to law and not humour. It is to be not
arbitrary, vague and fanciful but legal and regular and it must be exercised within the limit to which an honest man to the discharge
of his office ought to find himself...It must be governed by rule, not by humour, it must not be arbitrary, vague and fanciful.40

It is well-settled that the role of a writ court is limited to ensure that discretion has been exercised by the authority in
accordance with the law.41 It is, however, clear that, despite such discretion, the writ court is competent to review the
agency’s use of discretion in order to determine whether it is within the permissible class of actions. Presumptively an
exercise of administrative discretion is reviewable for legal error, procedural detect or abuse. One of the methods of
vitiating the exercise of discretion is where the person entrusted with it exercises it at the dictation of some other person. In
such cases, reasoning adopted is that although such a person is acting himself, it is not his own discretion which governs
the act, as the legislature intended that it should be.42 However, this is not an absolute rule to be blindly applied to each
case. There are, at least, two exceptions to this general rule. The first is that where an explicit statutory provision has been
made for a person to be given binding instructions by a superior, if that person, acts accordingly, the action would not be
vitiated.43 The second exception is where the instructions are issued by a person who in law can himself exercise the
discretion, it would not vitiate the action of the inferior authority. In other words, both the authorities superior as well as

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subordinate, if they have concurrent power to exercise administrative discretion then even if the inferior authority purports
to exercise the discretion at the behest of such superior authority, such an exercise of discretion would not be bad in law.44
But an authority who has a discretionary power, cannot be forced to exercise the discretion in a particular manner.45 The
exercise of discretion may be impugned directly or indirectly. The indirect method of challenge is more common. As SA
de Smith wrote:

A person aggrieved by the exercise of a discretionary power may, instead of attacking the merits of the exercise of the discretion,
contend that the repository of the discretion has acted without jurisdiction or ultra vires because of the non-existence of the state of
affairs upon which the validity of the exercise of the discretion depends. Or he may contend that the repository of the discretion has
failed to observe the rules of natural justice (if they are found to be applicable) or other essential procedural requirements. If his
contentions are successful the court will hold the discretionary act to be invalid and the fact that the true reasons for instituting
proceedings will have been his dislike of the manner in which the discretion itself was exercised is not a valid objection to the
proceedings.46

The discretionary power may be abused bona fide or mala fide. Mala fides can be a ground of invalidity sui generis. It can
also be regarded as a quality which brings the exercise of power within one of the other recognised categories of invalidity.
The writ court will generally review judicial discretion of administrative or quasi-judicial authorities;47 but it will refrain
from interfering when the discretion is purely of administrative nature, not measurable by reference to any objective
standards.48 A mere wrong decision cannot be corrected by the writ of certiorari as that would be using the writ
jurisdiction as a cloak of an appeal in disguise. A writ of certiorari is generally granted in cases where a tribunal acts in
flagrant disregard of the rules of natural justice when no particular procedure is prescribed. For instance, when it is brought
to the notice of the court that in interpreting and appreciating the evidence on record the industrial tribunal forgot the
principles of benevolent construction especially in a social welfare legislation, nothing will prevent it from interfering with
the decision of such tribunal.49 Likewise, the refusal of the labour court to grant normal relief of reinstatement with full
backwages in a case of retrenchment without compliance with the provisions of s 25F would not be proper exercise of
discretion.50 A direction with regard to payment of subsistence allowance and backwages is a matter of discretion on the
part of an industrial tribunal and such discretion cannot be interfered with in judicial review unless it is satisfactorily
shown that the discretion has been exercised wrongly or without just grounds.51 Likewise, the writ court cannot come to
any definite finding as to actual increase in dearness allowance and substitute its own discretion in this connection for that
of the tribunal.52 The discretion exercised by the tribunal in fixing the age of retirement after taking the relevant factors into
consideration cannot be interfered with in exercise of the power of superintendence under Art 227.53 Similarly, the
discretion exercised in fixing a gratuity scheme awarded by the tribunal taking into consideration the relevant factors in
consonance with the law laid down by the Supreme Court could not be interfered with in judicial review.54 Likewise,
where the tribunal, taking the relevant facts of a case directs that its award in respect of wages, dearness allowance or any
other matter will be operative from a date between the date of the demand and the date of the award, the reviewing court
generally will not interfere with the discretion of the tribunal.55 Discretion of the tribunal condoning delay or laches will
also not be liable to be interfered with.56

In Shaw Wallace, a single judge of the Madras High Court held that the power of the High Court under Art 226 to interfere
with the discretion exercised by the labour court under s 11A was very limited, and unless it was shown that the labour
court had taken a perverse or shockingly unreasonable view, which no reasonable person with an obligation to judiciously
determine a question would have come to, the exercise of power to interfere in the said discretion was not available.57 In
PGI Medical Assn, the Supreme Court held that the labour court has the discretion to restrict the quantum of backwages,
while ordering the reinstatement of a workman whose services were terminated without complying with the provisions of s
25F. ‘Where the interference of the High Court is sought against such an order of labour court, there exists an obligation
on the part of the High Court to record in the judgment, the reasons before denouncing the order of tribunal. There ought to
be available in the judgment itself a finding about the perversity or the erroneous approach of the labour court and it is only
upon recording therewith that the High Court has the authority to interfere.58 In Balbir Singh, the Supreme Court held that
the tribunal has the discretion to mould the relief and if the discretion is exercised judicially, the order of the tribunal does
not warrant interference.59 Where the workman, who was dismissed from service for assaulting and using intemperate and
foul language against superior officers, was directed by the tribunal to be reinstated with a lesser punishment, the award of
the tribunal was quashed and the dismissal was upheld.60

Where the labour court upheld the dismissal of a workman for beating a co-worker, the High Court held that the labour
court had exercised its jurisdiction properly in the matter.61 In a case where a daily-rated workman did not join the place to
where he was transferred and gave no satisfactory explanation, it amounts to the abandonment of service, and not a case of
termination, yet he was awarded compensation for non-compliance with s 25F, but without reinstatement, a single judge of
the Madras High Court held that the workman had no right to hold the position, and the compensation awarded by the
labour court was to meet the ends of justice, and hence, the order of the labour court did not warrant interference by the

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High Court.62 Where the labour court directed reinstatement of an employee, terminated on grounds of abandonment for
unauthorised absence from duties for two years, the High Court quashed the award and held that the labour court should
not have exercised its discretion to interfere with the termination, in the face of admitted facts that the employee absented
himself deliberately from duty without even a letter and that too for more than two years.63 In Ramanna, the Karnataka
High Court held that in a case, where a conductor was dismissed for not collecting fare from passengers and after taking
into consideration the earlier default cases against him, the labour court while exercising its jurisdiction under s 11A ought
not to have interfered with the punishment by modifying it as reinstatement with 50 per cent backwages.64

Findings of Fact:

A ‘finding of fact’ has been defined by Prof SA de Smith as ‘an assertion that a phenomenon exists, has existed or will
exist, independently of any assertions as to its legal effect’.65 However, in analysing the nature of the process by which a
tribunal has come to its conclusion on a question of fact, perplexing problems may arise. Every finding by an adjudicator
postulates a process of abstraction and inference which may be conditioned solely by his practical experience and
knowledge of affairs or partly or wholly by his knowledge of legal principles. He hears evidence and by satisfying himself
as to its reliability, finds what were the ‘true facts’; it may then be necessary for him to draw a series of inferences from
these primary findings in order to determine what were the material facts on which he had to base his decision; in order to
draw certain of these inferences correctly, he may need to apply his knowledge of legal rules.66 However, a tribunal which
has recorded a finding of a primary fact wholly unsupported by evidence or which has drawn an inference wholly
unsupported by any of the primary facts found by it, will be held to have erred in point of law. The ‘no evidence’ rule is
well-established because the writ courts will intervene where a manifest and gross error of this nature is revealed.67 The
jurisdiction of a writ court to issue a writ of certiorari under Art 226 has been succinctly stated by Gajendragadkar J in
Syed Yakoob, in the following words:

... the jurisdiction to issue a writ of certiorari is a supervisory jurisdiction and the Court exercising it is not entitled to act as an
appellate court. This limitation necessarily means that findings of fact reached by the inferior court or tribunal as a result of the
appreciation of evidence cannot be reopened or questioned in writ proceedings. An error of law which is apparent on the face of
the record can be corrected by a writ, but not an error of fact, however grave it may appear to be. In regard to a finding of fact
recorded by the tribunal, a writ of certiorari can be issued if it is shown that in recording the said finding, the tribunal had
erroneously refused to admit admissible and material evidence, or had erroneously admitted inadmissible evidence which has
influenced the impugned finding. Similarly, if a finding of fact is based on no evidence, that would be regarded as an error of Jaw
which can be corrected by a writ of certiorari. In dealing with this category of cases, however, we must always bear in mind that a
finding of fact recorded by the tribunal cannot be challenged in proceedings for a writ of c ertiorari on the ground that the relevant
and material evidence adduced before the tribunal was insufficient or inadequate to sustain the impugned finding. The adequacy or
sufficiency of evidence led on a point and the inference of fact to be drawn from the said finding are within the exclusive
jurisdiction of the tribunal, and the said points cannot be agitated before a writ court.68

It is now well-settled that the writ court can set aside an order in case of an error of law and not error of fact. In other
words, it is not entitled to correct a finding of fact by the tribunal, as if it were a court of appeal, in its writ jurisdiction.69
The tribunal is the sole judge of a fact and if there be some legal evidence on which its findings may be based, the
adequacy or reliability of this evidence is not a matter which can be permitted to be canvassed in writ proceedings.70 Thus,
a finding of fact based on appraisement of evidence on record cannot be reappraised by a writ court.71 The jurisdiction of
the writ court under Arts 226 and 227 is to be most sparingly exercised and only in appropriate cases in order to keep the
subordinate courts within the ambit and bounds of their authority and not for correcting mere errors.72 In other words,
interference by the writ court is not obligatory if facts of the case do not warrant such interference. Therefore, the power of
the writ court to disturb the findings on question of fact in exercise of extraordinary powers is more than difficult.73 It is
only in matters when the tribunal acts without jurisdiction or in excess of or in violation of the principles of natural justice
or refuses to exercise jurisdiction vested in it by law or there is an error apparent on the face of the record and where all
these aspects have resulted in manifest injustice.74 It is now well settled law that the statement of facts recorded by a court
or quasi-judicial tribunal in its proceedings, as regards the matter which transpired during the hearing, would not be
permitted to be assailed as incorrect, unless steps are taken before the same forum. It may be open to a party to bring such
statement to the notice of the court or tribunal and to have it deleted or amended. Further, it is not open to the parties to say
that the proceedings recorded by the tribunal are incorrect.75 The writ court cannot convert itself into an appellate court
over the tribunals constituted under special legislation to resolve disputes of a kind qualitatively different from ordinary
civil disputes and to readjudicate upon questions of facts decided by such tribunals.76 Therefore, since the finding of fact is
not ill-founded, unreasonable or perverse, the writ court will not interfere.77

The limitations on the exercise of writ jurisdiction in respect of matters based on findings of fact are too well known to be
repeated. Therefore, the writ court cannot interfere with any finding of the adjudicatory authorities, only on the ground that

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on the basis of the material and evidence before it, another view was also possible.78 In the case of Thonimudi Estate, the
Madras High Court declined to interfere with the award of the labour court reinstating the workman, while it held that the
award of backwages with continuity of service was excessive and reduced payment of backwages only for a period of two
years.79 Likewise, where on the question of age of the workman, the industrial tribunal accepted the evidence of the
doctors on the basis of clinical and radiological tests and came to a definite finding that the workman was to retire on a
particular date, the finding of the tribunal is not liable to be interfered with being perverse or unreasonable.80 So long as the
finding stands, the award of the tribunal cannot be interfered with. However, if the tribunal omits to take into consideration
the important evidence while arriving at such a finding which has a material bearing on the controversy, its order would be
vitiated and would be liable to be quashed.81 In other words, if it is found that the tribunal ignored the legal evidence on
record, considered one part of the evidence and rejected the other part on extraneous considerations, in that case the
findings of the tribunal would be perverse inasmuch as he failed to consider the material evidence on record. It cannot go
into the question of insufficiency and credibility of the evidence.82 However, the writ court cannot set aside the finding of
the fact on the basis of the assessment of the evidence, unless it is a case of ‘no evidence’.83 Even a wrong appraisal of
evidence by the inferior tribunal would not justify the writ court in weighing the evidence, as if it were sitting in appeal
against the order of the tribuna1.84 In some cases, it might not be correct to rule out certain instances altogether as
irrelevant because they might specifically become relevant as res gestae. Whether they were so or not, is for the tribunal to
assess and not for the writ court to re-assess.85 If the decision of the inferior tribunal is not perverse, the possibility of a
view other than the one taken by the tribunal is no ground for interference by the writ court.86

Where the labour court rejected the charge of disobedience against the workman on the ground of non-production of
certain documents which was called by the workman from the management, findings of labour court cannot be dubbed as
perverse.87 Likewise, a finding of the court about the date of birth of an employee based on oral and documentary evidence
of the parties is a finding of fact not amenable to interference in judicial review.88 However, if the tribunal in awarding
some relief, acts without jurisdiction, the writ court has ample jurisdiction to interfere, as it is not a question of reviewing
the finding of fact arrived at by the inferior tribunal.89 In a writ petition filed by the employer, the writ court will have no
jurisdiction to grant relief of interest to the workman even though the claim is reasonable.90 For the application of these
principles to cases of industrial adjudication, reference may be made to the under-noted cases.91 In Navinchandra Shah,
Desai, J extended the principle enunciated by the Supreme Court in Chitra Venkata Rao, not only to the extent of
reappraising the evidence and quashing the order of the tribunal, but also granting relief to the party on the basis of such
independent appreciation of evidence.92 First let us take a look at the principle propounded in Chitra Venkata Rao, where
the Apex Court held:

The jurisdiction to issue a writ of certiorari under Art. 226 is a supervisory jurisdiction. The Court exercises it not as an appellate
Court. The findings of fact reached by an inferior Court or Tribunal as a result of the appreciation of evidence are not reopened or
questioned in writ proceedings. An error of law which is apparent on the face of the record can be corrected by a writ, but not an
error of fact, however grave it may appear to be. In regard to a finding of fact recorded by a Tribunal, a writ can be issued if it is
shown that in recording the said finding, the Tribunal, had erroneously refused to admit admissible and material evidence or had
erroneously admitted inadmissible evidence which has influenced the impugned finding. Again if a finding of fact is based on no
evidence, that would be regarded as an error of law which can be corrected by a writ of certiorari. A finding of fact recorded by
the Tribunal cannot be challenged on the ground that the relevant and material evidence adduced before the Tribunal is insufficient
or inadequate to sustain a finding. The adequacy or insufficiency of evidence led on a point and the inference of fact to be drawn
from the said finding are within the exclusive jurisdiction of the Tribunal.93

In Navinchandra Shah, Desai J raised the following ‘leading’ questions, which are rhetorical in nature and are themselves
suggestive of the answers:

(i) Keeping in view our jurisdiction, namely that we can interfere with the order when the finding is completely baseless or
perverse, could it not be said that before we say a finding is baseless or perverse that there was no misconduct at all on
facts alleged and taken as admitted? (p. 67)
(ii) We are taking the evidence as produced to be wholly correct at the initial stage and feel that there is no misconduct. Can
we not say that under Art 226? (p 67)
(iii) How do we expect a petitioner like the present one working as a weighman, more of a mechanical type of work, not
calling for any educational attainment and ready to struggle for the whole of his life getting a meager wage of Rs 150 per
month to understand the provisions of Standing Orders? (p 69)
(iv) Do we expect this petitioner to cross-examine witnesses on his own, unaided and unhelped by any one?

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(v) If the petitioner says he was not employed and if that averment is not questioned in cross examination and if the employer
does not lead evidence and does not say anything, it would indicate that the petitioner was not employed anywhere and
the averment of the petitioner on oath must be accepted as trustworthy and reliable...The question then is should he not
get his backwages?
(vi) What should be the approach in such a matter? The law of the land as pronounced by the Supreme Court is that in such
cases, reinstatement must follow as a necessary corollary. Should he be denied wages? For what offence should the man
be denied wages? Should he be visited with the further penalty by denying him wages? (p 73)
(vii)In such a case, for a writ of certiorari should the court content itself by merely quashing the order by which termination
was provided for? In other words, is it a correct approach to the problem for in every case where a writ of certiorari is
prayed for, the jurisdiction of the court under Art 226 (1) comes to an end as soon as the impugned order is quashed? (p
76)
(viii) The labour court completely overlooked the law of the land, namely, the decisions of the Supreme Court especially on
the question whether before upholding the decision of the domestic tribunal, can it be said that what was alleged was
misconduct within the relevant Standing Order and whether the prescribed mandatory procedure was followed or not
and whether rules of natural justice is not in controversy. In such a case, the order is vitiated, the inquiry itself being
illegal and defective. Now, what do we do? (p 80)
(ix) If Mr Nanavati is right, we quash the order and the matter goes back to the labour court. What has the labour court to do
but merely to pass an order for reinstatement and backwages? (p 80)
(x) Even on the question of backwages, the relevant decisions of the Supreme Court which are binding have not been taken
into consideration. Should we merely pay a lip sympathy to the form rather than the substance of the matter? (pp 80-81).
(xi) The injury is caused by not following the Standing Orders. Rules of natural justice govern every quasi-judicial inquiry. A
contravention of it makes the order void is matter no more in dispute and what is the injury inflicted? (p 81)

Desai, J then proceeded to deal with them as follows:

It is not for a moment suggested that all errors must be overlooked as an error simpliciter. An error which has the consequence of
leading to serious or atrocious consequences may be styled as negligence and it can only be gross provided the degree of
culpability is very high (p 65)

This subsequent performance, therefore, clearly implies that the employer was actuated by an unfair motive in introducing facts
subsequently so as to convert an accidental lapse or a slip of a. bona fide character into one of misconduct or were an element of
mala fide as been introduced. Under these circumstances, the labour court could have interfered and should have interfered (p 68)

All these requirements are conspicuous by their very silence. This led us to make an observation, may be we are wrong, that at
least apart from the petitioner, this manager of the institution was completely oblivious of the requirements of the Standing Orders.
Possibly he did not know that there is something like Standing Orders (p 70)

We honestly feel that the labour court has completely missed the point and the order more or less reproduces the ipse dixit of the
labour court. The court took the misconduct has proved without ever first examining, as was contended, whether the facts alleged
constitute misconduct. It observed that on misconduct being proved, the other thing namely punishment must follow as a matter of
course. It was open to the labour court to look at the inquiry and come to the conclusion whether it is vitiated or not. Not one word
is to be found in the whole order of the labour court as to whether the inquiry was held consistent with the provisions of the
Standing Orders (p 70)

The labour court then observed that the punishment of dismissal to a workman with clean record is too severe. Having so observed,
the labour court converted the order of dismissal into an order of discharge...To say the least the labour court has practically
approached the matter as if it was rubber-stamping the domestic inquiry. From a court of social justice, we expect much better
approach. It must realise that dismissal in the life of a workman aged more than 50 means denial of further opportunity to work and
when it converted the order of dismissal into discharge, we do not understand what was in the mind of the labour court. The mental
process of the labour court is difficult to reconstitute. A termination of service with an averment of proved misconduct would

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hardly help the petitioner even in getting gratuity, provided he had put in that much length of service which would qualify for
gratuity. (p 70)

After recording the finding of misconduct as proved, the conversion of dismissal into discharge is a paper formality devoid of any
meaning. Its consequences are never appreciated. When he applies for service again no one is asking for a certified copy of the
judgment of the labour court. section 11A was not introduced for this purpose. It was introduced to confer vital jurisdiction on
labour court and when there is a dismissal for misconduct, what is expected of the labour court is to first ascertain whether on facts
alleged it constituted misconduct, whether the finding is perverse and whether the inquiry was in consonance with the principles of
natural justice as reproduced in the Standing Orders. None of the three steps is taken. The proof of misconduct is taken for granted
without examining the charge, the complaint, the subsequent foisting in of a cooked up witness Udesing and the non-observance of
relevant provisions of Standing Orders (pp 70-71)

The illegality committed by the labour court is patent on the record in the sense that it did not care to look at the problem according
to the law laid down in this country and in force in this country. Therefore, after the introduction of cl (b) and (c) in Art 226, we
have no doubt in our mind that we cannot be confined to the narrow grooves of old historical notions with regard to writs in
England but in the context of socio-economic justice, we must mould the reliefs as to be effective. That is what we must do and,
therefore, this cloud or doubt about our power must stand dispelled by the discussion herein and we must grant appropriate relief.
(p 81).

The above observations of Desai J are grossly misconceived and militate against the overriding decision of Supreme Court
in Chitra Venkata Rao on the scope of jurisdiction of High Courts while dealing with a petition under Art 226. It is well
settled that the High Court cannot review the evidence or correct an error of fact. It is well-settled that the petitioner would
be entitled to wages only when it is found that he was wrongfully dismissed, and not otherwise. The mere fact that he had
not worked anywhere else is no qualification for being entitled to backwages in the case of a dismissal, which was found
by the labour court to be in order. If the labour court converted the order of dismissal into one of discharge, it was clearly
to help the workman get the terminal benefits, but there was no finding whatsoever recorded by the labour court against the
domestic enquiry or the quantum of punishment. What is meant by the observation: ‘should he be denied wages?’ and
weather the employer need to bear the liability of paying wages for the period of unemployment in the post-dismissal
period, when the enquiry did not suffer from any infirmity, and when he was prepared to comply with the order of labour
court converting the dismissal into one of discharge? A perusal of the facts of the case suggest that the right course would
have been to remand the matter to the tribunal, if the case disclosed an error of law for disposing it off in accordance with
the provisions of law and/or the principles of natural justice. In Anil Vasant Marathe, Daud J of Bombay High Court held:

The plea that the petitioner could have moved for a reference under s 2A read with s 10 of the Industrial Disputes Act 1947 need
not detain us for the existence of an alternative remedy is not always a bar to the invoking of the jurisdiction of the High Court
under Art 226. More than five years have elapsed since the filing of the petition and it would be too late in the day to reject the
petition on the ground of Petitioner not having exhausted the statutory remedies—assuming that these are available to him.94

The further observations of Daud J, in so far as the merits of the case are concerned, run thus:

...It is conceded that the petitioner’s act of wrongfully confining Mrs Katdare was not motivated by any immoral or criminal
considerations. He was annoyed with the refusal of Mrs Katdare to allow him to use the telephone board receiver. To give vent to
his annoyance, he latched the cabin of the telephone reception from outside. This was a childish tantrum and should have been
treated as such. It is said that the wrongful confining had a deleterious effect upon Mrs Katdare. Possibly so but reversion is too
harsh a punishment. With respect to the Additional Municipal Commissioner he took an unusually severe view of the delinquency.
Petitioner’s so-called ‘somewhat blemished record’ has no bearing on the subject and should not lead to the imposition of the harsh
punishment that is impugned in the present case. The question surviving is how the punishment is to be substituted. To my mind
while a reprimand would have served in the normal circumstances. (at p 1085)

In the first place, mens rea is not a necessary pre-condition in respect of a misconduct of this nature, ie wrongful
confinement of a co-employee, that too, of the opposite sex. Thus, the question of probing into the motive, ie whether it is
with immoral intention or otherwise, becomes wholly irrelevant. Secondly, it is understandable if judges interfere with the
punishment of dismissal on the ground that it takes away the livelihood of workmen but the High Court or Supreme Court
cannot interfere with any punishment imposed under industrial law, except when it leads to severance of employer-

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employee relationship. Municipal corporation is an ‘industry’ and is therefore governed by the provisions of the industrial
relations legislation and not Art 311. Lastly, the ID Act does not contemplate raising of an ‘individual’ dispute except in
the case of discharge, dismissal, retrenchment or termination otherwise (s 2A ), which means that in the instant case, the
workman in his individual capacity was not entitled even to move the machinery provided under the Act. No labour court
or tribunal is empowered to entertain the dispute or to interfere with any punishment short of dismissal (s 11A ). That
being the legal position with regard to the remedies provided under the Act, question arises as to whether the High Court
could, entertain a writ petition circumventing the procedure prescribed in the statute. In a significant departure from the
dysfunctional trends unleashed by Desai, Daud JJ and a few others, the Supreme Court in Mahendra Nissan, re-stated the
scope of power conferred under Art 226 consistent with Chitra Venkata Rao and other cases. The facts of the case were: A
workman was dismissed from service for certain acts of misconduct. The labour court confirmed the dismissal. The
Andhra Pradesh High Court in exercise of its jurisdiction under Art 226 modified the order of the labour court to
reinstatement without backwages (fresh appointment) on the ground that the charges levelled against the workman were
not serious enough as to warrant dismissal. Allowing the appeal, Bharucha and Misra JJ observed:

We do not agree with the High Court. The charges are of a serious nature. The first respondent was found to have led out workmen
from the factory premises regardless of the challenge by the security guard. Along with these workmen, the first respondent
entered the administrative building of the appellant and the room of the Deputy General Manager. The Deputy General Manager
and Manager (Personnel) were abused in filthy language and threatened, examples of which have been given. Misbehaviour was
also proved against the first respondent in his conduct with five executives of the appellants. if these are not serious charges against
a workman worthy of his dismissal from service, we do not know what can be. The High Court was quite wrong in the conclusion
that it reached and in the order that it passed. The punishment imposed against the respondent must remain unaltered. 95

The above ruling has restored to Art 226, the scope of which was enlarged - by the judges of the hue and shade of Ray CJI,
Desai J and others during the mid-1970s and thereafter, for no convincing reason - beyond the contemplation of the
founding fathers of the Constitution. Despite several authorities as laid down by the Supreme Court repeatedly during the
1950s and 1960s to the effect that the scope of power and jurisdiction of a High Court while dealing with a petition under
Art 226 was limited, this has not been strictly adhered to. The uncalled for dynamism and misplaced activism displayed by
the learned judges as disclosed in Ajay Hasia, Sukhdev Singh and a spate of others during the two decades commencing
from mid-1970, resulted in virtual anarchy in the legal firmament with litigants directly approaching High Courts and
Supreme Court in absolute disregard of the statutory remedy provided under different enactments, thereby feeding the fire
of inordinate delays in disposing of the cases languishing in the Higher Courts for decades. In Bhola Nath Singh, the facts
disclosed that the High Court examined the evidence as a first appellate court and reversed the findings of fact recorded by
the enquiry officer and accepted by the disciplinary authority while exercising its jurisdiction under Art 226. The Supreme
Court, setting aside the order of High Court, observed that, where no errors of law or procedure leading to manifest
injustice or violation of principles of natural justice were found committed in the domestic enquiry, the exercise
undertaken by the High Court was illegal and unsustainable.96 Where the reference was in terms ‘whether the retrenchment
of workmen of contractors is justified’, the tribunal was right in refusing to go behind the reference and decide the question
whether the retrenched workmen belonged to the contractor or the principal employer. Further, the finding of the tribunal
that the workmen concerned were the workmen of contractor cannot be interfered with by the High Court under Art 226.97

Where the reference made by the Government was in terms ‘whether the workmen should be treated as plant assistants and
given consequential benefits on par with a workman who was appointed along with them, but as plant assistant’, the
Supreme Court upheld the award of the tribunal to the effect that the said workmen having accepted the posts as trainee
operators and having worked in those posts for a long time, it was not open to them to contend that they were entitled to
higher emoluments; that only when their services were treated as plant assistants and from the date they were plant
assistants they would be entitled to the enhanced benefits. The court quashed the order of High Court and held that, in the
circumstances, there was no justification for the High Court to have interfered with the award of the tribunal.1 When the
Labour Court arrives at a finding overlooking the materials on record, it would amount to perversity and the writ Court
would be fully justified in interfering with the said conclusion. The High Court exercising writ of certiorari would not
assume the role of the appellate Court, however, the Court is well within its power to interfere if is shown that in recording
the said finding, the Tribunal/Labour Court had erroneously refused to admit the admissible and material evidence or had
erroneously admitted any inadmissible evidence which has influenced the impugned finding, the writ Court would be
justified in exercising its remedy. If a finding of fact is based on no evidence that would be regarded as an error of law
which can be corrected by a writ of certiorari.2

In JK Synthetics, the facts were that the company had closed a section of its plant for want of power and terminated the
services of workmen. The government made a reference in terms ‘whether the ‘retrenchment’ of workmen of four
divisions of the company was justified’. The tribunal proceeded to decide the question whether or not there was a closure
before dealing with the question of retrenchment and granting relief to the workmen. The Rajasthan High Court came to

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the conclusion that there was no textile section and that there was no closure of it and hence, the tribunal would not have
gone into the question of closure. Quashing the order and restoring the award of tribunal, the Supreme Court held that the
High Court erred in drawing such a conclusion in the face of the fact that it was admitted before the tribunal and there was
no dispute as to the existence of textile section as well as its closure, and observed that the tribunal was right in deciding
that question in the first instance before going into the question of relief to the workmen.3 In Velayudhan, the Supreme
Court held that once the labour court examined the proportionality of the punishment to the gravity of the charge and came
to the conclusion that the punishment of dismissal imposed by the management was justified and proper, it was not for the
High Court to substitute its discretion for that of the labour court.4 In Cyril Emanuel, Narayana J, of the AP High Court
reappraised the evidence and directed that the dismissal, which was upheld by the industrial tribunal, be substituted with a
lesser punishment.5 The learned judge further imported his own conjectures into the case by holding that the workman
might have become the victim of internal politics. In this case, the workman was dismissed for proved misconduct on
charges inter alia of not working and sending petitions against superior officers, etc. This decision is a clear violation of
the law laid down by the Apex Court in a battery of cases, and needs to be reviewed. In IOB, the canteen was closed,
throwing the employees out of employment. This was challenged as violative of s 25-O. The tribunal ordered reinstatement
of 33 employees of the canteen, which was set aside by a single judge of the High Court. The Division Bench in appeal
restored the order passed by the tribunal. The Supreme Court observed:

The learned single judge seems to have undertaken an exercise, impermissible for him in exercising writ jurisdiction, by liberally
appreciating the evidence and drawing conclusions of his own on pure questions of fact, unmindful, though aware fully, that he is
not exercising any appellate jurisdiction over the awards passed by a tribunal, presided over by a judicial officer. The findings of
fact recorded by fact-finding authority duly constituted for the purpose and which ordinarily should be considered to have become
final, cannot be disturbed for the mere reason of having been based on materials or evidence not sufficient or credible in the
opinion of the writ court to warrant those findings, at any rate, as long as they are based upon some material which are relevant for
the purpose or even on the ground that there is yet another view which can reasonably and possibly taken.6

Conduct of the Petitioner:

Writ remedies being of discretionary nature, a party may by his conduct preclude himself from claiming a writ ex debito
justitiae, no matter whether the proceedings he seeks to quash are void or voidable.7 A person whose conscience is not
clear or whose hands are not clean or who has been guilty of laches and deliberate omission is not entitled to invoke the
writ jurisdiction of the court for a writ of certiorari.8 It is not open to a petitioner to pick and choose his own facts and to
determine in advance, what is relevant material or omit to mention any material facts, proceedings and orders and then
claim that he has acted bona fide.9 In this extraordinary jurisdiction, the petitioner is expected to disclose all material facts,
even if they go against him.10 In Vasant Vithal Palse, an application for special leave to appeal filed by a trade union
challenging the award was dismissed by the Supreme Court. Subsequently, an individual workman filed a writ petition
before the High Court impugning the same award without disclosing the fact that the application of the trade union for
special leave to appeal was rejected by the Supreme Court. The High Court took this fact into consideration for rejecting
the writ petition and remarked:

It is only fair that a citizen invoking the extraordinary jurisdiction of this court should place all the facts and circumstances in
respect of the particular litigation before the court and if this obligation is not observed, the petitioner is certainly guilty of
suppression.11

The High Court will not countenance a party taking a ground inconsistent with his own previous action, in granting relief
in its writ jurisdiction.12 Where the objection to the jurisdiction of a tribunal is latent, the acquiescence of the party who is
aware of the assumption of jurisdiction, may disentitle him to a writ because of his conduct.13 Where the petitioner failed
to bring to the notice of the arbitrator under s 10A to entertain and decide the dispute in view of the efflux of time, the
remedy of interference by a writ was declined on the ground of the conduct of the petitioner.14 Where a party did not
appear before the tribunal and allowed the matter to be decided uncontested and gave no explanation for its non-
appearance, the writ court would be justified in refusing to entertain the writ petition because such a party will be deemed
to have waived its rights.15 The failure of the petitioner to file copies of his appointment and termination orders and his
failure to prove, that the remedy before labour court is not efficacious, would disentitle him to invoke the jurisdiction of
the writ court for violation of s 25F.16 In KN Dutt,17 the petitioner was a retired government officer and the government
deducted certain amounts due to it, from his retiral benefits. His writ petition against the said deduction was dismissed.
However, he again filed another writ petition without disclosing the previous writ petition and succeeded before a Division
Bench. In appeal by the state, the Supreme Court strongly disapproved of the conduct of the officer as a serious lapse on
his part.18 In N Palaniswami, the tribunal refused to grant the relief of reinstatement of the workman on the ground that he
was absent from service for a long time and the employer had made some alternative arrangement and, on this ground, it

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ordered the payment of Rs 10,000/- in lieu of reinstatement. Accordingly, the employer sent a cheque covering the amount
awarded by the labour court but the workman accepted the cheque under protest and without prejudice to his right of filing
a writ petition against the award. The court held that the principle of accord and satisfaction will not apply and the conduct
of the worker will not disentitle him to relief either by way of writ petition or by application under any provision of law.19
In Jayanta Nath Mazumdar, the court also awarded a lump sum of Rs. 5000/- in lieu of reinstatement. This amount was
accepted by the workman without any protest. A single judge of the Calcutta High Court held that the petitioner was
disentitled to challenge the award of the tribunal in a writ petition.20

The High Court in its writ jurisdiction cannot interfere with legislative enactments or rules and regulations made
thereunder.21 Even if an order or award of the tribunal is vitiated by certain defects, the High Courts in their jurisdiction
may not interfere unless there is any gross miscarriage of justice or flagrant violation of law calling for intervention.22 On
the same principles, the High Court will not entertain a writ petition for deciding merely technical and abstract questions.23
Likewise, the court will also not issue writs where it will be futile to issue such writs or the interest of justice does not
warrant or where there is no manifest injustice done to the petitioner. Similarly, where there is no infringement of any legal
right or breach of any statutory rules, the extraordinary remedy under the writ jurisdiction will not be available to a
petitioner.24Normally, the High Court will not be inclined to interfere where the petition involves disputed questions of
fact. In such cases, if the High Court is of the view that the disputed questions of fact may not appropriately be tried in a
petition for a high prerogative writ, it can refuse to try these questions and relegate the party to his normal remedy. The
question whether an employee is a workman within the meaning of s 2(s) of the Act, cannot be adjudicated in writ
proceedings and the employee has to raise an industrial dispute and get it referred under s 10.25 The principle is that ‘where
basic facts are disputed and complicated questions of law and fact are involved, the writ court is not the proper forum for
seeking relief. The right course for the High Court is to dismiss the writ petition on this preliminary ground without
entering upon the merits of the case.26 In Biecco Lawrie,27 a single judge of the Calcutta High Court refused to interfere
with a settlement which had been acted upon, and held that if a question of interpretation of the settlement was involved,
the aggrieved party could have recourse to the provisions of s 36A. In UPSEB, a single judge of the Allahabad High Court
refused to interfere with the order of the labour court under s 33C(2) of the Act as no manifest injustice had been done to
the employer.28 Where the labour court recorded a preliminary finding that the enquiry was vitiated and directed the
management to let its evidence and the management filed a writ petition against the said direction, it was held that the High
Court in exercise of its jurisdiction under Art 226 cannot interfere with the orders of the labour court at such a preliminary
stage.29

(c) Judicial, Quasi-judicial and Administrative Functions

In the language of Griffith CJ:

The words judicial power ...mean the power which every sovereign authority must of necessity have to decide controversies
between its subjects, or between itself and its subjects, whether the rights relate to life, liberty or property. The exercise of this
power does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal
or not) is called upon to take action.30

However, a judicial decision is not always the act of a judge or a ‘tribunal’ invested with powers to determine questions of
law and fact; it must, however, be the act of a body or authority vested by law with authority to determine questions of
dispute affecting the rights of citizens under a duty to act judicially. A judicial decision always postulates the existence of a
duty laid upon an authority to act judicially. Administrative authorities are often invested with authority or power to
determine questions which affect the rights of citizens. The authority may have to invite objections to the course of action
proposed by it; it may be under a duty to hear the objectors, and its decision may seriously affect the rights of citizens, but
unless, in arriving at its decision, it is required to act judicially, its decision will be executive or administrative. Legal
authority to determine questions affecting the rights of citizens, does not make the determination judicial; it is the duty to
act judicially which invests it with that character. What distinguishes a judicial act from an administrative one is, therefore,
the duty imposed upon the authority to act judicially.31 For the purposes of certiorari and prohibition, judicial acts have to
be distinguished from the discretionary acts which are ordinarily called administrative.32

In Cooper, the court of appeal indicated that it was not the character of an authority, but the character of the power
exercised, that mattered. If it adversely affects the legal rights or interests, it must be exercised fairly.33Two especially
important aspects are discernible from the judgments of this case; the universality of the principle, which makes it
applicable to almost the whole range of administrative powers; and the presumption that it will always apply, however
silent about it the statute may be. Thus, the courts justified their intervention by holding that every judicial act is subject to
the procedure required by natural justice and then they denominated the great majority of administrative acts as ‘judicial’
for this purpose. The expression ‘quasi-judicial’ was coined as an epithet for powers which, though administrative, were

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required to be exercised as if they were judicial, i.e., in accordance with natural justice. By this device, the courts
developed the system of fair administrative procedure.34 Instead of saying that natural justice must be observed both in
judicial and administrative acts, the courts stretched the meaning of ‘judicial’ in an unnatural way by treating
‘administrative acts’ as ‘judicial’ if they affected a person’s rights or entailed penalty. A graphic example of this is a
statement by Willis J in Hopkins.35 However, Cooper’s case played an important part in the recent revival of the ‘right to
be heard’. Thus, there was a complete overlapping of the expressions ‘judicial’ and ‘administrative’ where a person’s
rights were affected. For an illuminating exposition of the subject, reference may be made to the discussion by SA de
Smith in Judicial Review of Administrative Action,36 concluding on an optimistic note:

At this point, terminological and conceptual problems may appear to be overwhelming. However, we shall see that to an increasing
extent courts exercising powers of judicial review in administrative law are abandoning servitude to their own concepts and
asserting mastery over them.37

In India also, the line of distinction between judicial and administrative functions is also equally blurred. In connection
with the distinction between an administrative power and quasi-judicial power in AK Kraipak, the Supreme Court said:

The dividing line between an administrative power and a quasi-judicial power is quite thin and is being gradually obliterated. For
determining whether a power is an administrative power or a quasi-judicial power one has to look to the nature of the power
conferred, the person or persons on whom it is conferred, the framework of the law conferring that power, the consequences
ensuing from the exercise of that power and the manner in which that power is expected to be exercised. In a welfare state like
ours, it is inevitable that the organ of the state under our Constitution is regulated and controlled by the rule of law. In a welfare
state like ours, it is inevitable that the jurisdiction of the administrative bodies is increasing at a rapid rate. The concept of rule of
law would lose its validity if the instrumentalities of the state are not charged with the duty of discharging their functions in a fair
and just manner. The requirement of acting judicially in essence is nothing but a requirement to act justly and fairly and not
arbitrarily or capriciously. The procedures which are considered inherent in the exercise of a judicial power are merely those which
facilitate, if not ensure a just and fair decision. In recent years the concept of quasi-judicial power has been undergoing a radical
change. What, was considered as an administrative power some years back is now being considered as quasi-judicial power...With
the increase of the power of the administrative bodies it has become necessary to provide guidelines for the just exercise of their
power. To prevent the abuse of that power and to see that it does not become a new despotism. Courts are gradually evolving the
principles to be observed while exercising such powers. In matters like these, public good is not advanced by a rigid adherence to
precedents: New problems call for new solutions. It is neither possible nor desirable to fix the limits of a quasi-judicial power.38

The question whether an act is a judicial act or an administrative one, arises ordinarily in the context of the proceedings of
an administrative tribunal or authority. The fact that an order was issued or an act emanated from an administrative tribunal
would not make it any less a quasi-judicial act, if the aforesaid tests are satisfied. The concept of quasi-judicial act has been
conceived and developed by English judges, with a view to keep administrative tribunals and authorities, who are not
courts and whose orders are not judicial strictu sensu, within their bounds. However, the term quasi-judicial has itself been
used in several different senses.39 In Cooper v Wilson , it was observed:

A true judicial decision presupposes an existing dispute between two or more parties, and then involves four requisites: (1) The
presentation not necessary orally of their case by the parties to the dispute; (2) if the dispute between them is a question of fact, the
ascertainment of the fact by means of evidence adduced by the parties to the dispute and often with the assistance of argument by
or on behalf of the parties on the evidence; (3) if the dispute between them is a question of law, the submission of legal argument
by the parties; and (4) a decision which disposes of the whole matter by a finding upon the facts in dispute and application of the
law of the land to the facts so found, including, where required a ruling upon any disputed question of law. A quasi-judicial
decision equally presupposes an existing dispute between two or more parties and involves (1) and (2), but does not necessarily
involve (3) and never involves (4). The place of (4) is in fact taken by administrative action, the character of which is determined
by the minister’s free choice. 40

The distinction between quasi-judicial and administrative acts of tribunals has been succinctly stated by Parker J in
Manchester Legal Aid Commitee, in the following words:

The true view, as it seems to us, is that the duty to act judicially may arise in widely different circumstances which it would be
impossible, and, indeed inadvisable, to attempt to define exhaustively...When, on the other hand, the decision is that of an
administrative body and is actuated in whole or in part by questions of policy, the duty to act judicially may arise in the course of
arriving at that decision. Thus if in order to arrive at the decision, the body concerned has to consider proposals and objections and

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consider evidence, then there is the duty to act judicially in the course of that inquiry.. . Further an administrative body in
ascertaining facts or law may be under a duty to act judicially notwithstanding that its proceedings have none of the formalities of
and are not in accordance with the practice of a court of law.. .. If, on the other hand, an administrative body in arriving at its
decision at no stage has before it any form of lis and throughout has to consider the question from the point of view of policy and
expediency, it cannot be said that it is under a duty at any stage to act judicially. 41

Halsbury’s Laws of England states as follows:

Potentially important legal consequences flow from the designation of a function as legislative, executive or administrative,
judicial (or quasi-judicial), or ministerial. Precise definitions of these categories are, however, unattainable; one class of function
tends to shade off into another, and in practice classification varies according to the context and the purpose for which
classification is attempted.42

In India, Ridge v Baldwin has been followed by the Supreme Court in PN Sharma, in holding that the decision of an
administrative authority required to act judicially without complying with the rules of natural justice will be a nullity.
Gajendragadkar J held that in dealing with the questions whether any impugned order could be reviewed under Art. 226 of
the Constitution, the test prescribed by Lord Reid in his judgment may afford considerable assistance.43 The tests for
distinguishing quasi-judicial functions from administrative functions were stated by the Supreme Court in KS Advani.44
Those tests were reiterated in Radheshyam.45 The industrial case in which these tests were approved is Jaswant Sugar,
where speaking for the court, Shah J observed:

A judicial decision is not always the act of a judge or a tribunal invested with power to determine question of law or fact: it must
however be the act of a body or authority invested by law with authority to determine questions or disputes affecting the rights of
citizens and under a duty to act judicially. A judicial decision always postulates the existence of a duty laid upon the authority to
act judicially. Administrative authorities are often invested with authority or power to determine questions, which affect the rights
of citizens. The authority may have to invite objections to the course of action proposed by him, he may be under a duty to hear the
objectors, and his decision may seriously affect the rights of citizens but unless in arriving at his decision he is required to act
judicially, his decision will be executive or administrative. Legal authority to determine questions affecting the rights of citizens,
does not make the determination judicial: it is the duty to act judicially which invests it with that character. What distinguishes an
act judicial from administrative is therefore the duty imposed upon the authority to act judicially.46

The following criteria for identifying a judicial decision or act were stated:

(1) it is in substance a determination upon investigation of a question by the application of objective standards to
facts found in the light of pre-existing legal rules;
(2) it declares rights or imposes upon parties obligations affecting their civil rights; and
(3) that the investigation is subject to certain procedural attributes contemplating an opportunity of presenting its
case to a party, ascertainment of facts by means of evidence if a dispute be on questions of fact, and if the dispute
be on question of law on the presentation of legal argument, and a decision resulting in the disposal of the matter
on findings based upon those questions of law and fact.

(d) Grounds for Issue of writs of Certiorari and Prohibition

Every wrong order cannot be quashed merely because it is wrong. It can be quashed by certiorari or injuncted by
prohibition, only if it is vitiated by some fundamental flaw such as violation of the fundamental rights, jurisdictional
failures, violation of the rules of natural justice, errors of law apparent on the face of the record and perversity resulting in
gross miscarriage of justice. In the words of Krishna Iyer J:

Art 226 is a sparing surgery but the lancet operates where injustice suppurates... and judicial power should not ordinarily rush in
where the other two branches fear to tread, judicial daring is not daunted where glaring injustice demands even affirmative
action.47

In Harbans Lal, Pathak J observed:

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The limitations on the jurisdiction of the High Court under Art 226 of the Constitution are well settled... and it is well-known that a
writ in the nature of certiorari may be issued only if the order of the inferior tribunal or subordinate court suffers from an error of
jurisdiction, or from a breach of the principles of natural justice or is vitiated by a manifest or apparent error of law. There is no
sanction enabling the High Court to reappraise the evidence without sufficient reason in law and reach findings of fact contrary to
those rendered by inferior court or subordinate court. When the High Court proceeds to do so, it acts plainly in excess of its
jurisdiction.48

The grounds for issuance of a writ of certiorari or prohibition can be conveniently treated under the following sub-heads:

(i) Fundamental Rights:

It is now well established that the Supreme Court, in exercise of its jurisdiction under Art 32 and the High Courts in their
jurisdiction under Art 226, will quash the orders, directions or awards of the quasi-judicial authorities when they
contravene the fundamental rights or are ultra vires the fundamental rights.49 A detailed survey of this topic, therefore,
would be out of place here.

(ii) Constitutional Safeguards:

Though the breach of constitutional safeguards other than the guarantees of the fundamental rights may not be amenable to
the jurisdiction of the Supreme Court under Art 32, they can be reviewed by the High Courts in their jurisdiction under Art
226. However, this topic also does not play any noticeable role in industrial law, hence this also is not being discussed in
detail.

(iii) Jurisdiction:

Judicial control in Britain has grown out of the theory of jurisdiction, as applied through the old prerogative remedies,
primarily certiorari and prohibition, hence excess or abuse of statutory jurisdiction will be quashed or prohibited as ultra
vires, but power within jurisdiction cannot be controlled unless Parliament has provided a statutory appeal.50 In other
words, in writ jurisdiction, it is not possible for the High Court to examine an impugned award as if the court was hearing
an appeal.51 In the language of Diplock LJ, jurisdiction is an expression which is used in a variety of sense and takes its
colour from its context.52 Broadly speaking, jurisdiction means authority to decide.53 The question whether a tribunal has
jurisdiction depends not on the truth or falsehood of the facts into which it has to inquire, or upon the correctness of its
findings on these facts but upon their nature, and it is determinable at the commencement, not at the conclusion, of the
inquiry.54 Hence, if a body has no such authority to decide a matter before it, its decision is either without jurisdiction or in
excess of jurisdiction. In Ebrahim Aboobakar, the Supreme Court stated that want of jurisdiction may arise from:

(i) the nature of the subject matter; or

(ii) from the absence of some essential preliminary; or

(iii) upon the existence of some facts collateral to the actual matter which the court has to try and which are conditions
precedent to the assumption of jurisdiction by it, ie, jurisdictional facts 55

A more complete statement is by Sir James Coville in Colonial Bank, wherein he stated that these conditions may be
founded either:

(i) on the character of the constitution of the tribunal;

(ii) upon the nature of the subject-matter of the inquiry; or
(iii) upon proceedings which have been made essential preliminary to the inquiry. 56

The jurisdictional defects are dealt with under the following captions: (1) Absence of Jurisdiction on Account of
Constitution of the Tribunal; (2) Excess of Jurisdiction or Lack of Jurisdiction: Nature of Subject-matter of Inquiry; (3)
Declining Jurisdiction; (4) Proceedings Essential to Preliminary Inquiry: Jurisdictional or Collateral Issues; (5) Error of
Law Apparent on the face of Record; (5) ‘Jurisdictional fact’ and ‘Error of Law Apparent on the face of Record’.

(1) Absence of Jurisdiction on Account of Constitution of the Tribunal:

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There is complete absence of jurisdiction if the tribunal is ‘improperly constituted’ or the proceedings before it have been
‘improperly instituted’.57 An authority, which is not constituted in accordance with the statute creating it will be acting
without jurisdiction.58 Not only such an authority will be amenable to a writ of quo warranto, the proceedings before it
may be injuncted by a writ of prohibition and any orders or awards made by it will be liable to be quashed on certiorari.
Sections 7, 7A & 7B of the Act lays down the requirements of law for the constitution of the labour courts, Industrial
tribunals and national tribunals and the qualifications for the appointment of their presiding officers, while s 7C prescribes
disqualifications against the appointment of the presiding officers of these bodies. Hence, if any of these authorities is
constituted without complying with the requirements of these provisions or their presiding officers do not possess the
requisite qualifications or are disqualified under s 7C, their continuance in office and their orders and awards will be
reviewable on the grounds of lack of jurisdiction.59

(2) Excess of Jurisdiction or Lack of Jurisdiction: Nature of Subject-matter of Inquiry:

A startling instance of excess of jurisdiction is illustrated in the decision of the High Court of Assam and Nagaland in
Kasojan Tea State. The labour court after hearing the case on preliminary points, made an award on the merits of the issues
referred for adjudication instead of recording its decision on those points, without even giving an opportunity to the parties
to adduce their evidence on merits. The High Court quashed the award and remanded the case for trial and expressed its
annoyance by directing the government to transfer the matter from the labour court which had made that award to some
other court under s 33B of the Act.60

(3) Declining Jurisdiction:

Declining jurisdiction is another ground on which the orders and awards of the tribunals are liable to be quashed on
certiorari and the authorities may be served with the writ of mandamus to hear and determine the dispute before them in
accordance with law. As to when a tribunal declines or does not decline jurisdiction, has been succinctly stated by
Professor SA de Smith in the following words:

A refusal to exercise jurisdiction may be conveyed by express words or by conduct. Thus, a tribunal is deemed to have declined
jurisdiction if it fails to decide the question before it and instead decides a different question; or if it decides under the dictation of
another body; or if it decides by reference to a predetermined rule of policy without giving any genuine consideration to the
individual merits of the case before it; or if it improperly delegates its power of decision to another person or body; or if it rejects
relevant evidence on the erroneous ground that it has no jurisdiction to inquire into the matter which the evidence was designed to
prove; or if, misconceiving the scope of its own powers, it disclaims competence to take other relevant factors into account; or if it
postpones the hearing for an unreasonable length of time or on inadmissible grounds.. .. A tribunal does not decline jurisdiction by
making an erroneous decision on the merits of a case; but it does decline jurisdiction if it refuses to enter into the merits because it
holds that it has no power to do so. There arises the familiar problem of distinguishing between the merits of a case and
preliminary jurisdictional questions. In the context of refusal of jurisdiction, as distinct from excess of jurisdiction, English courts
have given comparatively little attention to analysis of this problem, but it can be assumed that essentially the same principles
apply to both refusal and excess of jurisdiction.61

The decision of the Calcutta High Court in Continental Commercial Co, provides an instance where the tribunal failed to
exercise jurisdiction. While adjudicating on an industrial dispute covering several demands, the industrial tribunal rejected
certain demands which were covered by an earlier settlement on the ground that the settlement governed the parties, since
it was not terminated in accordance with the relevant provisions of the Industrial Disputes Act. In writ proceedings, against
the award of the tribunal, the High Court observed that the employer had waived the formal notice of termination of the
settlement as required by s 19(2) of the Act. It was, therefore, held that the tribunal had failed to exercise jurisdiction
vested in it by law and that part of the tribunal’s award rejecting those demands of the workmen was quashed and a writ of
mandamus was issued commanding the state government to place the remaining disputes before the same tribunal for fresh
adjudication without taking the settlement into consideration.62

(4) Proceedings Essential to Preliminary Inquiry: Jurisdictional or Collateral Issues:

Broadly speaking, the existence of a fact which is a condition precedent to the operation of a statutory scheme has to be
fully reviewed and independently determined as if it were a question of law by the reviewing court.63 Such collateral facts
are also commonly known as jurisdictional facts,64 as they are collateral to the merits of the main question,65 or the very
issue,66 which a tribunal has to decide in the proceedings before it. According to Prof. SA de Smith, the questions on the
determination of which, the jurisdiction of the tribunal depends, are generally known as preliminary, jurisdictional or
collateral questions. A preliminary or collateral question is said to be one that is collateral to the merits or to the very

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essence of the inquiry, it is not the main question which the tribunal has to decide. No satisfactory test has ever been
formulated for distinguishing findings which go to jurisdiction from findings which go to the merits; and in some cases the
courts, impressed by the logical difficulties, have ignored the distinction altogether. The courts, therefore, have been
generally drawing rough and ready distinctions in individual cases and to justify them by reference to principles and
authority. The result is that many of the reported decisions on the jurisdiction of the tribunals appear to be contradictory.
The learned Professor observed thus:

In so far as the question of a tribunal’s jurisdiction is conceived of as being determinable ‘at the commencement, not at the
conclusion’ of its inquiry, it is to be expected that the following matters will be treated as preliminary to the merits or as conditions
of jurisdiction: whether the tribunal is properly constituted; whether the proceedings have been properly instituted by person
entitled to initiate them; whether process has been duly served; whether a period of limitation has expired; whether the cause lies
within the tribunal’s territorial competence; whether the value of the subject-matter lies within prescribed monetary limits. None of
these matters has been uniformly treated as jurisdictional; but it is clearly proper for a superior court to hold that an inferior
tribunal lacks jurisdiction to embark on an inquiry unless the stage has been properly set.67

In this sense, in India, the theoretical distinction made between ‘jurisdictional facts’ which are collateral and the proof of
which confers jurisdiction on the special tribunals and facts which are left to the decision of the tribunal is no doubt well
settled,68 but the demarcating line is as hazy as in England. In the former case, the correctness of the conclusion can be
reviewed by the High Court acting under Art 226 of the Constitution, regardless of the fact whether the incorrect
conclusion is a question of fact or a question of law,69 while in the latter case, the power to interfere by the superior court
will be limited to errors of law apparent on the face of record or errors of jurisdiction. In Commissioners of Income Tax,
Lord MR Esher observed:

When an inferior court or tribunal or body, which has to exercise the power of deciding facts, is first established by Act of
Parliament, the legislature has to consider what powers it will give that tribunal or body. It may in effect say that, if a certain state
of facts exists and is shown to such tribunal or body before it proceeds to do certain things, it shall have jurisdiction to do such
things, but not otherwise. There it is not for them conclusively to decide whether that state of facts exists, and, if they exercise the
jurisdiction without its existence, what they do may be questioned, and it will be held that they have acted without jurisdiction. But
there is another state of things which may exist. The legislature may entrust the tribunal or body with a jurisdiction, which includes
the jurisdiction to determine whether the preliminary state of facts exists as well as the jurisdiction, on finding that it does exist, to
proceed further or do something more. When the legislature is establishing such a tribunal or body with limited jurisdiction, they
also have to consider whether jurisdiction they give them, whether there shall be any appeal from their decision, for otherwise there
will be none. In the second of the two cases I have mentioned, it is an erroneous application of the formula to say that the tribunal
cannot give themselves jurisdiction by wrongly deciding certain facts to exist, because the legislature gave them jurisdiction to
determine all the facts, including the existence of the preliminary facts on which the further exercise of their jurisdiction depends;
and if they were given jurisdiction so to decide, without any appeal being given, there is no appeal from such exercise of their
jurisdiction.70

By and large, the above dictum of Lord MR Esher has been followed by the Indian courts. If the tribunal proceeds to
assume jurisdiction over an invalid reference or a non-industrial dispute, it can be successfully impugned before a writ
court and the court will have the power to issue an appropriate writ in that behalf. The answer to the question whether or
not the jurisdictional facts should be tried by a High Court in a writ petition or the tribunal, would depend upon the facts
and circumstances of each case and upon the nature of the preliminary issues raised between the parties.71 Conversely, the
tribunal cannot decline to exercise jurisdiction by erroneously holding that the dispute in question is not an industrial
dispute. It is now well-settled that the superior court can review even the findings of fact relating to jurisdictional issues
arrived at by an inferior tribunal.72 In Sadhu Ram, the facts were: the employer had raised a preliminary objection that no
industrial dispute was raised by the workman. The labour court had recorded a categorical finding that the union had raised
a demand with the management. The High Court of Delhi quashed the award by issuing a writ of certiorari. In appeal, the
Supreme Court observed that the jurisdiction under Art 226 had to be exercised with great circumspection. The fact that
the questions decided pertain to jurisdictional facts does not entitle the High Court to interfere with the findings on
jurisdictional facts which the tribunal is competent to decide. Where the circumstances indicate that the tribunal has
snatched at the jurisdiction, the High Court may be justified in interfering. However, where the tribunal gets jurisdiction on
a reference made to it, it was not proper for the High Court to substitute its judgment for that of the labour court and hold
that the workmen had raised no demand with the management.73

The preliminary issues, such as whether on the facts of a case, the dispute is an ‘industrial dispute’ within the meaning of s
2(k) or whether the concerned persons are ‘workmen’ as defined in s 2(s) of the Industrial Disputes Act, can be validly

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examined and adjudicated upon by the tribunal itself, as it is the determination of such collateral issues which confers
jurisdiction upon it to deal with the main reference entrusted to it.74 Hence, a writ of prohibition would not be issued to a
tribunal prohibiting it from proceeding with adjudication proceedings.75 Absence of an ‘industrial dispute’ would
obviously be sufficient to negative the jurisdiction and in such a case, the validity of the order of reference is open to
examination by the High Court to decide whether the tribunal had jurisdiction.76 Likewise, the question as to whether the
reference is competent or not on the ground that previously the government had refused to refer the same dispute for
adjudication, can be decided by the tribunal, hence a writ of prohibition cannot be issued restraining it from proceeding
with the adjudication of such reference.77But if the vires of an Act creating a tribunal is challenged, such a question cannot
be brought before the tribunal constituted under that Act.78Likewise, the validity of a notification under the Act
constituting the tribunal can also not be challenged before that tribunal. Such questions, undoubtedly, have to be decided
by the High Court in its writ jurisdiction without being agitated before the tribunals. In Express Newspapers,
Gajendragadkar J observed:

The High Court undoubtedly has jurisdiction to ask the industrial tribunal to stay its hands and to embark upon the preliminary
inquiry itself. The jurisdiction of the High Court to adopt this course cannot be, and is indeed not, disputed. But would it be proper
for the High Court to adopt such a course unless the ends of justice seem to make it necessary to do so? Normally, the questions of
fact, though they may be jurisdictional facts, the decision of which depends upon the appreciation of evidence, should be left to be
tried by the special tribunals constituted for that purpose. If and after the special tribunals try the preliminary issue in respect of
such jurisdictional facts, it would be open to the aggrieved party to take the matter before the High Court by a writ petition and ask
for an appropriate writ. Speaking generally, it would not be proper or appropriate that the initial jurisdiction of the special tribunal
to deal with these jurisdictional facts should be circumvented and the decision on such a preliminary issue brought a High Court in
its writ jurisdiction.. .. We wish to point out that in making these observations, we do not propose to lay down any fixed or
inflexible rule; whether or not even the preliminary facts should be tried by a High Court in a writ petition, must naturally depend
upon the circumstances of each case and upon the nature of the preliminary issue raised between the parties. Having regard to the
circumstances of the present dispute, we think the court of appeal was right in taking the view that the preliminary issue should
more appropriately be dealt with by the tribunal. The appeal court has made it clear that any party who feels aggrieved by the
finding of the tribunal on this preliminary issue may move the High Court in accordance with the law.79

More often than not, the employers make it a practice to raise all sorts of preliminary objections, invite decisions on those
objections in the first instance and then carry the matter to the High Court under Art 226 of the Constitution and then to the
Supreme Court under Art 136 of the Constitution and then delay the decision of the real disputes for years, sometimes for
decades. This situation was noticed by the Supreme Court in PP Mundhe, wherein it observed that when a case of
dismissal or discharge of an employee is referred for industrial adjudication, the tribunal should first decide as a
preliminary issue whether the domestic inquiry has violated the principles of natural justice when that matter is in
controversy between the parties. However, with a view to obviate undue delay in adjudication of the real disputes caused
by moving the writ courts against the decisions of the adjudicators on preliminary issues, the court made it clear that there
will be no justification for any party to stall the final adjudication of the dispute by the labour court by questioning its
decision with regard to the preliminary issues when the matter, if worthy, can be agitated even after the final award. It will
be also legitimate for the High Court to refuse to intervene at this stage.80 In Standard Pottery Works, it was held that the
writ court should take into account that the decision on a preliminary issue is a matter concerning the jurisdiction of the
tribunal whose further jurisdiction depends on the decision on the preliminary issue.81

In DP Maheshwari, speaking for a three-judge bench, Chinnappa Reddy J observed that with a view to avoid exploitation
by the stronger parties of the weaker ones by dragging the latter from court to court for adjudication of peripheral issues,
thus avoiding a decision on the main issues, the policy of deciding preliminary issues first must be reversed. He advised
the tribunals to decide all issues in dispute at the same time without trying some of them as preliminary issues. He further
advised the High Courts exercising writ jurisdiction under Art 226 of the Constitution against staying proceedings before
the tribunals so that preliminary issues may be decided by them in the first instance. And further exhorted that Arts 226
and 136 should not be used to break the resistance of workmen by stifling the industrial tribunals by all manner of
preliminary objections and journeying up and down. In exercise of the jurisdiction under these Articles, the High Courts
and the Supreme Court are not required ‘to be too astute to interfere with the exercise of jurisdiction by special tribunals at
interlocutory stages and on preliminary issues. 82 These sentiments were again reverberated by the learned judge in SK
Verma, wherein he pointed out that it has become quite a fashion to raise preliminary objections such as that if there is no
‘industry’, there is no ‘industrial dispute’ or the workman is not a ‘workman’, by the employers, whenever a dispute is
referred for adjudication, thus avoiding the decision on the main issues referred for adjudication. Apart from discouraging
the practice of interference by the High Courts and the Supreme Court by staying the proceedings before the industrial
tribunals pending the decision on preliminary issues, the learned judge particularly and pertinently pointed out that the
public sector undertakings must abjure the practice of arresting the decision on the main issues of the dispute under

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reference by raising preliminary objections.83 In SD Singh, Khalid J deprecated the practice of the employers to stifle the
efforts of workmen in their legitimate claims seeking benefits under the industrial law, by tiring them out in adjudication
proceedings raising technical and hyper-technical pleas and thus, dragging on litigation for years altogether on such pleas.
He exhorted the employers to meet the case of the workmen squarely on merits and get it adjudicated quickly.84 In Chhatia
Weaving Mills, the management had filed an application and undertook to substantiate its action through documentary and
oral evidence at the time of hearing. But they led evidence only on the validity of the inquiry and not on the question of
substantiating the allegations being under the impression that they would be called upon by the tribunal to adduce evidence
after holding that the inquiry was not fair and proper. The High Court held that in coming to the conclusion that the
management failed to justify its action of dismissing the workman, the tribunal did not commit any error. Patnaik J
observed:

Where piece-meal dismissal has not been directed by the tribunal or labour court and all controversies are to be disposed of
simultaneously, there is no scope for the industrial tribunal or the labour court disclosing its mind to the parties. Furthermore, it is
not obligatory on the tribunal to frame a preliminary issue on the question whether the inquiry was fair and proper because the law
does not obligate the adjudicator to hear the matter piece-meal and to decide if the inquiry was fair and proper initially and then to
grant an opportunity to the management if the finding went against it to adduce evidence on the delinquency of the workmen and
the punishment imposed. 85

On the other hand, a single judge of the Karnataka High Court in Binny, observed:

It is clear that if in a given case, the decision on the preliminary issue given in favour of the party, who has come to the High Court
in a petition under Art 226 of the Constitution, is not likely to end the main dispute and would unnecessarily prolong the dispute
pending before the tribunal, it is appropriate for this court not to entertain the writ petitions. But in a case where the preliminary
issue decided by the labour court is such that any decision in favour of the party approaching the High Court in a petition under Art
226 would end the dispute itself finally or would curtail unnecessary proceedings before the tribunal, the entertaining of the writ
petition would be expedient in the interest of speedy final decision of the dispute itself.86

An Analysis of PP Mundhe, DP Maheswari & HD Singh cases

In PP Mundhe, the case turned on the question ‘whether the Labour Court should decide, as a preliminary issue, whether
the domestic enquiry violated the principles of natural justice, particularly, where the parties are at variance on that issue’.
The main question was rightly decided by Goswami J by holding that it is for the employer to take a stand and seek
permission to adduce additional evidence before the Labour Court; that if it chooses not to adduce any evidence, it would
not thereafter be permissible for the management to raise the issue in any proceeding. But the further gloss added by the
learned judge, to the effect that ‘there would be no justification for any party to stall the final adjudication of the dispute
by the Labour Court by questioning its decision with regard to the preliminary issue when the matter, if worthy, can be
agitated even after the final award’, is capable of producing great public mischief to the detriment of justice itself. In the
first place, the said observation was more in the nature of obiter and, by no means was part of the ratio decidendi, as can
be seen from his own statement: ‘We are making these observations in our anxiety that there is no undue delay in
industrial adjudication’ (in para 22). In this connection, it should be noted that the above case was decided long before s.
17B was inserted in IDA.

According to the then prevailing legal position, it made no difference in terms of the legal consequences for employer,
whether the Labour Court decided the preliminary issue first or decided both the preliminary issues and merits together.
The insertion of s. 17B changed the complexion of the Act insofar as the employer is required to pay the last drawn wages,
in the event he chooses to challenge the order of reinstatement, which means the final order of the Labour Court on merits
gives rise to certain legal and financial consequences to the employer. Whatever may be the considerations that weighed
with Goswami J in PP Mundhe, as regards the power to decide preliminary and merits together, they ceased to have any
application the moment s. 17B was enforced. In HD Singh, Khalid J (for self and Reddy J) of the Supreme Court, held that
the employer was prohibited from raising preliminary objections touching upon fundamental questions of law or
jurisdiction of the court, and that the High Court should not interfere under Art 226.87 In DP Maheshwari, Reddy J who
was a member of the Bench that decided HD Singh, added further gloss, which runs thus:

There was a time when it was though prudent and wise policy to decide preliminary issues first. But the time appears to have
arrived for a reversal of that policy. We think it is better that Tribunals, particularly those entrusted with the task of adjudicating
labour disputes where delay may lead to misery and jeopardise industrial peace, should decide all issues in dispute at the same time
without trying some of them as preliminary issues. Nor should High Courts in exercise of their jurisdiction under Article 226 of the

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Constitution stop proceedings before a Tribunal so that a preliminary issue may be decided by them.88 (Italics supplied).

The above observations of Khalid and Reddy JJ, are not only misconceived but are positively unconstitutional. The need
for determining the preliminary issue is not merely confined to s. 33, but extends to the adjudication of disputes referred
u/s. 10 as well. Order XIV, r 2 of CPC, runs thus:

2. Court to pronounce judgment on all issues—

(1) Notwithstanding that a case may be disposed of on a preliminary issue, the Court shall, subject to the provisions of sub-
rule (2), pronounce judgment on all issues.
(2) Where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof
may be disposed of on an issue of law only, it may try that issue first if that issue relates to—
(a) the jurisdiction of the Court, or

(b) a bar to the suit created by any law for the time being in force, and for that purpose may, if it thinks fit, postpone
the settlement of the other issues until after that issue has been determined, and may deal with the suit in
accordance with the decision on that issue.

Rules 10B to 29 of IDCR (Industrial Disputes (Central) Rules 1957) prescribe the procedure to be followed by the Labour
Courts and Tribunals, which is to a large extent similar to that of a civil court. Reading the provisions of CPC and IDCR
together, it becomes clear that where the issue raised is one of jurisdiction or of law, and if the proceedings can be disposed
of on that issue alone, the court should try that issue as a preliminary issue before going into the merits. It would be futile
for the court to go into the merits of the case, if it has no jurisdiction at all to try the matter or if the issue involves a
question of law. In the face of this legal position coupled with the lethal effect of s. 17B, to say that the Tribunals would be
justified in short-circuiting the adjudication process by arrogating jurisdiction wrongfully, merely because the trying of
preliminary issues would lead to misery to one party, is outrageous. His further observation that the time had changed so
much, warranting the trying of preliminary issues and merits together, is no less misplaced. Even assuming so, yet the
letter and spirit of Arts 226 and 32 have certainly not changed to such an extent as to justify cutting corners by Tribunals. It
is not as if the Constitution is meant exclusively for the benefit of one section of society to the detriment of others. This
country has not yet decided to patronise communism as an ideology to be pursued at the national level so as to dispense the
kind of lop-sided justice advocated by Reddy J. The said issue ‘whether the Tribunals should decide preliminary issues
first or decide them together with merits’ was not raised at any forum below or even before Supreme Court. In these
circumstances, should the above observation be taken as the ‘ratio decidendi’ or an uncalled for ‘obiter’ coming from an
over-speaking judge?

Chief Justice Sethi of the Karnataka High Court followed the anarchic view of Reddy J, and held that the practice of
framing preliminary issues in industrial disputes was contrary to ‘law’ and if permitted would defeat the very purpose for
which the IDA was enacted.89 It is doubtful as to which ‘law’ the learned Chief Justice was referring to—is it the law of
jungle or of a civilised democracy governed by a Constitution of its own? If it were contrary to the so-called ‘law’, what
prevented him from enlightening the Bar and Bench by citing the relevant legal provision? In the first place, whatever may
be the legislative intent as regards ‘speedy disposal’ of industrial disputes, no provision of IDA prescribes ‘summary
procedure’ of the kind provided for under O XXXVII of CPC. Section 11(3) of the IDA clearly states that the Labour
Courts, etc, shall have the same powers as are vested with the civil court under CPC when trying a suit in respect of
enforcing attendance, examination on oath, production of documents, issuing commissions, and other matters. It further
stipulates that every investigation by Labour Court, etc., shall be deemed to be a judicial proceeding within the meaning of
s s 193 and 228 of IPC. Rule 10B of the IDCR prescribes the powers of, and procedure to be followed by, Labour
Courts,etc, which are analogous to that of a civil court. The observation of Reddy J, in Maheswari, though does not
deserve to be elevated to the status of a sound, much less a sane, legal proposition, suffers from the further vice of being
repugnant to the Constitution, given that it comes from a Supreme Court Judge, who is supposed to be the custodian of the
Constitution. Even assuming that it was right, without conceding in the least, still its validity stood expired with the
insertion of s 17B in IDA. Examples of gross abuse of power, self-misdirection, jurisdictional lapses and excesses on the
part of Labour Courts far outnumber those which had been, and are being, decided in accordance with the law. A glance at
the ever-inflating volumes of law journals in this branch bears eloquent testimony to this fact. If, in a chaotic dispensation
bordering on licentiousness, the trial courts were to be directed not to frame preliminary issues that touch upon questions
of jurisdiction and law, it would produce great public mischief to the detriment of the very concept of justice. To illustrate,
where the preliminary issue touches upon questions such as -

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(i) whether the Labour Court has jurisdiction at all to try the dispute; or
(ii) whether the person raising the dispute was the employee of the principal employer or of the contractor; or

(iii) whether the person answers at all to the definition of ‘workman’ u/s. 2(s); or

(iv) whether it is a case of abandonment on the part of the workman or a positive act of termination by the employer; or

(v) whether a workman can be said to be a ‘workman concerned in the dispute’ u/s. 33; or

(vi) whether the dispute referred for adjudication is an ‘industrial dispute’ u/s. 2(k) -

If the Labour Courts were to decide preliminary issues along with merits, it corrupts the judicial process and reduces it to
what may be called ‘unadulterated gambling’. Should the employer go on paying last drawn wages to the employee u/s.
17B on the basis of an award, which is prima facie incompetent, absurd and outside the competence of the Labour Court?
Could it be said that s. 17B is meant for imposing such a preposterous obligation on the employer with no recourse in the
event of the Labour Court arrogating to itself jurisdiction beyond the contemplation of the law? The decisions rendered in
Maheshwari, HD Singh and Senapathy deserve to be condemned in the strongest possible language and terms as being
insipid, perverse and repugnant to CPC, apart from being ultra vires the Constitution.

In the midst of judicial chaos of this magnitude, the decision of the Supreme Court in Hussain Mhasvadkar comes very
refreshing in that the apex court made an attempt to undo the damage done by the likes of Reddy J. Two points were urged
in the said case: (i) Whether the Bombay Iron and Steel Labour Board constituted under the provisions of the Maharashtra
Mathadi, Hamal and Other Manual Workers (Regulation of Employment and Welfare) Act 1969 (MMHOMWREWA)
falls within the definition of ‘Industry’ u/s 2(j) of IDA; and (ii) Whether the appellant, working at the relevant point of time
as an Inspector, discharging duties, powers and obligations envisaged u/s 15 of the said Act answers to the description of
‘workman’ u/s 2(s) of IDA. Justice Raju (for self and Rajendra Babu J) of the Supreme Court, held that, in view of the fact
that the court below entertained doubts about the status of the workman u/s 2(s) of IDA, they should have refrained from
embarking upon adjudication on merits, and that the larger issue should have been entertained for consideration only if it
was absolutely necessary, and not when the claim could have been disposed of otherwise without going into the nature and
character of the undertaking itself.90 This decision is consistent with the principles laid down in Motipur, Tata Iron and
DCM as against the bankrupt rulings given in Maheshwari and other cases. Reverting to judicial remedies, it goes to the
credit of the Karnataka High Court in so far as the learned judge admittedly rejected the insolvent decisions rendered by
Chinnappa Reddy and Khalid JJ, and ordered that preliminary issues should be decided before going into the merits of the
cases, as can be discerned in DV Jagadish. In this case, the employee had disputed the termination of his service as null
and void, which was contested by the management on the ground that the concerned employee was not a ‘workman’ as
defined in the Act. The Karnataka High Court quashed the order of the labour court which granted the interim relief
without deciding the preliminary issue whether the employee was a ‘workman’ or not with the observation that the labour
court ought to have decided the preliminary issue before considering the question of interim relief.1

(5) Error of Law Apparent on the Face of Record

In England though the application of certiorari to correct jurisdictional errors was never doubted, the efficacy of the writ to
correct errors of law committed by inferior tribunals in exercise of their jurisdiction was for sometime diminished.2 It was
in Northumberland CAT, that the court of appeal revived the original scope and reach of the writ. The court of appeal held
that certiorari could be issued to quash a decision of an inferior court on the ground of error of law apparent on the face of
the record.3 The development and the growth of law, making the error apparent on the face of record as a ground for
quashing the decisions of quasi-judicial and administrative bodies in England,4 is beyond the scope of this work. In TC
Basappa, the Supreme Court accepted the view that error of law apparent on the face of record is a ground upon which a
writ could be issued.5 In Hari Vishnu Kamath, the court stated the law with more clarity by holding that it might be taken
as settled that writ of certiorari could be issued to correct an error of law. But it is essential that it should be something
more than a mere error; it must be one which must be manifest on the face of the record. The court observed that an error
of law on the face of record cannot be defined and must be left to be determined on the facts of each case and, hence, it did
not lay down any principles on which it was to be determined. It rather, expressed the apprehension that if caution is not
exercised, certiorari might be issued as cloak of an appeal in disguise.6 In Nagendra Nath Bora, Sinha J held that one of
the grounds on which the jurisdiction of the High Court on certiorari may be invoked, is an error of law apparent on the
face of record.7

(6) ‘Jurisdictional fact’ and ‘error of law apparent on the face of record’:

For the purpose of reviewing the wrong decisions of quasi-judicial authorities, a distinction is drawn between ‘errors of

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law going to jurisdiction’ and ‘errors of law within jurisdiction’, viz, going to the merits of the case. Normally, the excess
of jurisdiction will invalidate a decision while an error within the jurisdiction will not.8 In the latter type of cases, a tribunal
has jurisdiction to go right, as much as it has jurisdiction to go wrong.9 It is inherent in discretionary power that it includes
the power to decide wrongly. The law on this subject has been succinctly stated in Halsbury’s Laws of England, in the
following words:

Where the proceedings are regular on their face (emphasis added) and the inferior tribunal has jurisdiction to decide a matter, it
ought not to be deemed to exceed its jurisdiction, merely because it goes wrong in law, for instance, if it incidentally misconstrues
a statute, or admits illegal evidence, or rejects legal evidence, or misdirects itself as to the burden of proof or the weight of the
evidence, or even arrives at a decision without any supporting evidence. Nevertheless, the area within which an inferior tribunal
remains free to err on a question of law without committing a jurisdictional error must now be regarded narrow for such a tribunal
may be held to exceed jurisdiction by taking legally irrelevant considerations into account or by failing to take relevant
considerations into account or by asking itself and answering the wrong question, and there are but few errors of law which fall
clearly outside these categories of jurisdictional error.10

This statement of law postulates that where ‘the proceedings are regular on their face’ there is immunity from judicial
review. Conversely, if the proceedings are not regular on their face or there is some error or irregularity on the face of the
proceedings, the case will be exceptional. In such cases, the power to decide wrongly does not extend to errors which are
manifestly apparent or self-evident on the face of the record because it would be an affront to law.11

What is error of law apparent on the face of record?:

The expression ‘error of law apparent on the face of record’ is not capable of a precise definition as indefiniteness is
implicit in its very nature. In R v Medical Appeal Tribunal, ex p Gilmore , Lord Denning LJ suggested that when a tribunal
comes to a conclusion which could not reasonably be entertained by it, if it properly understood the relevant enactment,
then it falls into error in point of law because, when the primary facts appear on the record, an error of this kind is
sufficiently apparent for it to be regarded as an error on the face of the record such as to warrant an intervention of the
court by issuing a writ of certiorari.12 Later, in Baldwin & Francis, on an illuminating review of the earlier cases as an
instance of ‘error of law’ he further said:

...if a tribunal bases its decision on extraneous considerations which it ought not to have taken into account, or fails to take into
account a vital consideration which it ought to have taken into account, then its decision may be quashed on certiorari and a
mandamus issued for it to hear the case afresh.13

In Anisminic, Lord Reid observed:

But there are many cases where, although the tribunal had jurisdiction to enter on the inquiry, it has done or failed to do something
in the course of the inquiry which is of such a nature that its decision is a nullity. It may have given its decision in bad faith. It may
have made a decision which it had no power to make. It may have failed in the course of the inquiry to comply with the
requirements of natural justice. It may in perfect good faith have misconstrued the provisions giving it power to act so that if failed
to deal with the question remitted to it and decided some question which was not remitted to it. It may have refused to take into
account something which it was required to take into account. Or it may have based its decision on some matter which, under the
provisions setting it up, it had no right to take into account. 14

An error of law must be a manifest error apparent on the face of the proceedings. In other words, it should be a patent
error.15 Gajendragadkar J observed:

In all these cases, the impugned conclusion should be so plainly inconsistent with the relevant statutory provisions that no
difficulty is experienced by the High Court in holding that the said error of law is apparent on the face of the record.16

But an error apparent on the face of the record does not mean a mere accidental or formal error which can be set right by
the amendment, but it must be a substantial error which goes to the root of the matter.17 In Satyanarayan, Das Gupta J
attempted a negative test by stating what is not an error of law apparent on the face of record. The learned judge held:

An error which has to be established by a long drawn process of reasoning on the point, where there may conceivably be two

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opinions, can hardly be said to be an error apparent on the face of the record. Thus the complex nature of argument was adopted as
a test of an error of law apparent on the face of record.18

In Ambica Mills, Gajendragadkar J observed:

Sometimes it is said that it is only errors which are self-evident, that is to say, which are evident without any elaborate examination
of the merits, that can be corrected, and not those which can be discovered only after an elaborate argument. In a sense it would be
correct to say that an error of law which can be corrected by a writ of certiorari must be self-evident; that is meant by saying it is
an error apparent on the face of the record, and from that point of view, the test that the error should be self-evident and should not
need an elaborate examination of the record, may be satisfactory as a working test in a large majority of cases; ... Judicial
experience, however, shows that though it cannot be easy to lay down an unfailing test of general application, it is usually not
difficult to decide whether the impugned error of law is apparent on the fact of the record or not.19

In KM Shanmugam, Subba Rao J observed that this test also may not be successful:

.. . for what is complex to one judicial mind may be clear and obvious to another. It depends upon the equipment of a particular
judge. In the ultimate analysis the said concept is comprised of many imponderables. It is not capable of precise definition, as no
objective criterion can be laid down, the apparent nature of the error, to a large extent, being dependent upon the subjective
element. So too, in some cases the boundary between error of law and error of fact is rather thin. A tribunal may hold that 500
multiplied by 10,000 is 5 lakhs (instead of 50 lakhs); another tribunal, may hold that a particular claim is barred by limitation by
calculating the period of time from 1956 instead of 1961; and a third tribunal may make an obvious error deciding a mixed
question of fact and law. The question whether the said errors are errors of law or fact cannot be posited on a priori reasoning, but
falls to be decided in each case. We do not, therefore, propose to define with any precision the concept of error of law apparent on
the face of the record, but it should be left, as it has always been done, to be decided in each case.20

The Bombay High Court too, though in a more striking and emphatic language, echoed the test of self-evident error in New
Gujarat Cotton, wherein it observed:

...the error must be so blatant, so obvious, so manifest or so palpable that when attention is invited to it, no elaborate argument is
needed to support the contention that the conclusion is erroneous. Where, however, by elaborate argument and detailed reference to
evidence a particular conclusion may be demonstrated to be erroneous, we do not think that the conclusion can be regarded as
disclosing an error apparent on the face of the record.21

Error of law and error of fact:

In the language of Prof. Wade:

Findings of fact are the domain where a deciding authority or tribunal can fairly expect to be master in its own house. Provided
only that the facts are not collateral or jurisdictional, the finding will in general be exempt from review by the courts, which will in
any case respect the decision of the body that saw and heard the witnesses or took evidence directly. Just as the courts look
jealously on decisions by other bodies on matters of law, so they look indulgently on their decisions on matters of facts. However,
the questions of law must be distinguished from the questions of fact. This is one of the situations where the rules have taken
different forms under judicial manipulations. There could be no subject on which the courts act with such total lack of consistency
as the difference between the fact and law.22

There is, however, an important exception. If an inferior tribunal records a finding of fact without taking into consideration
the relevant materials or the finding is based on no evidence or is based on irrelevant or extraneous considerations, it will
be an affront to the law which cannot be overlooked, and the order stands self-condemned even though it may be within
jurisdiction.23 In Dharangadhra Chemical Works, the court said that where the tribunal having jurisdiction to decide a
question comes to a finding of fact, such a finding of fact is not open to question, under Art 226 unless it could be shown
to be wholly unwarranted by the evidence.24 It is, therefore, not only difficult but indeed it would be inexpedient to lay
down any general test to determine which error of law can be described as errors of law apparent on the face of record.25
However, this can safely be taken as settled law that the jurisdiction of a High Court to issue the writ of certiorari under
Art 226 is of supervisory nature. Also, while exercising this jurisdiction, the writ court is not entitled to act as an appellate

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court which necessarily means that the findings of fact by inferior courts or tribunals, as a result of appreciation of
evidence cannot be reopened or questioned. An error of law which is apparent on the face of record can be corrected by a
writ court but not an error of fact, however grave it may appear to be. If a finding of fact is based on no evidence or if the
tribunal has admitted inadmissible evidence which has influenced the finding, that would be regarded as an error of law
which may be corrected by a writ of certiorari.26

The writ court can and must inquire whether there is any evidence at all in support of the impugned conclusion.27 In Parry
& Co, the Supreme Court observed that though the finding of fact by a tribunal having jurisdiction to decide a question is
not open to judicial review unless it could be shown to be wholly unwarranted by the evidence, where the tribunal has
disabled itself from reaching a fair decision by some considerations extraneous to the evidence and the merits of the case
or where its conclusions on the very face of it is wholly arbitrary and capricious that no reasonable person could ever have
arrived at that conclusion, interference by judicial review would be justified.28 The case of Rajinder Kumar Kindra,
provides an illustration of this point where the award of the arbitrator under s 10A was quashed by the Supreme Court
being arbitrary and perverse with the observation that where a quasi-judicial tribunal or arbitrator records findings based on
no legal evidence and the findings are either ipse dixit or based on conjectures and surmises and his findings suffer from
the further infirmity of non-application of mind, such findings will be vitiated.29 Where the finding of mala fide, unfair
labour practice or victimisation arrived at by the tribunal is based on no material, the award will be quashable on
certiorari.30 In Radhakrishna Murthy, the workman had claimed medical reimbursement towards the treatment of his wife
on the basis of a false medical certificate where, in fact, she had not undergone any treatment at all. The doctor who issued
the certificate when contacted by the company informed that the certificate issued by him was not true and that he never
treated the woman and that he issued the certificate under pressure brought on him by the workman. He also made an
endorsement on the obverse of the medical certificate stating that ‘this bill is hereby withdrawn’. When confronted with
this endorsement, the workman admitted that he had submitted a false claim, regretted his action and requested the
company for pardon. In the course of the domestic inquiry, the management produced four witnesses who testified the
correctness of the endorsement of the doctor. But the doctor could not be examined as he was away in USA. A single judge
of the AP High Court held that the inquiry was vitiated for non-examination of the doctor who was a material witness.
Quashing the order of the Single judge, Jeevan Reddy J observed:

May be the doctor’s evidence was material; may be his evidence was important; but that is the question touching upon the
adequacy of the evidence, which this court cannot go into under Art 226 of the Constitution. This court can interfere if there is no
evidence in support of the charges or in a case where the finding or the conclusion is such that no reasonable person would have
arrived at it, to wit, perverse; but this court cannot sit as an appellate authority and weigh the evidence. 31

Where the charge levelled against the delinquent worker was that he had attempted to molest one female worker and
whereas the tribunal found that the worker had actually molested the girl, it could not be said that the finding was
perverse.32 Similarly, where the en masse transfer of workmen from one factory to another owned by the same employer
was found to be illegal, the order of the tribunal directing payment of certain amounts at certain rates as travelling
allowance to the transferred place instead of nullifying transfers, was held not to be perverse or arbitrary in view of the fact
that the workmen had already joined the place of transfer acting on the faith of the assurance extended to them by the
employer in writing to arrange for transport or in the alternative to pay travelling allowance particularly so when the
factory from which they were transferred was almost closed down.33 On the other hand, upholding of the validity of a
perverse report of the inquiry officer was held to constitute an error of law apparent on the face of record.34 In Dayaram,
the employer terminated the services of certain employees for being involved and prosecuted for alleged theft, for loss of
confidence and for security reasons even though they were acquitted by the court. The award of the labour court ordering
compensation in lieu of reinstatement was upheld by the High Court of Madhya Pradesh as there was no error of law or
fact committed by the labour court in exercising its judicial discretion.35In Jila SK Bank, a single judge of the Madhya
Pradesh High Court held that the employer cannot challenge a compromise award passed by the tribunal, on the ground
that its counsel engaged in the labour court had no authority to file compromise of the dispute, in view of the settlement
arrived at between the parties.36 In HC Goel, Gajendragadkar J pointed out that the findings of fact, recorded by the
tribunal cannot be reviewed on the ground that the relevant material evidence adduced before the tribunal was insufficient
or inadequate.37 If a tribunal disables itself from reaching a fair decision by some extraneous considerations or where its
conclusion on the very face of it is so wholly arbitrary and capricious that no reasonable person could ever have arrived at
that conclusion, interference by the writ court would be justified.38 Similarly an award which does not state reasons for its
conclusions will be quashable on certiorari.39

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37 Subs by Act 36 of 1956, s 12, for s 16 (wef 10-3-1957).

38 Sirsilk Ltd v Government of Andhra Pradesh (1963) 2 LLJ 647 [LNIND 1963 SC 70], 649 (SC), per Wanchoo J.
39 Workmen of Swadeshi Cotton Mills Co Ltd v Mgmt. 1973 Lab IC 711, 715 (All), per KN Singh J.
40 Sirsilk Ltd v. Government of Andhra Pradesh (1963) 2 LLJ 647 [LNIND 1963 SC 70] (SC), per Wanchoo J.
41 Remington Rand of India v Workmen (1967) 2 LLJ 866 [LNIND 1967 SC 226] (SC).
42 Government of India (2002), Report of NCL-II, Chapter 13, pp 45-46, para 6.95.
43 Kannan Devan Hill Produce Co Ltd v A Varughese (1962) 2 LLJ 158, 161 (Ker), per Vaidialingam J.
44 Bihar SEB v CP Singh 1990 Lab IC 788, 800 (Pat) (DB), per Uday Sinha J.
45 Asbestos Cement Ltd v PD Sawarkar (1970) 2 LLJ 129 [LNIND 1970 SC 65] (SC), per Shelat J.
46 HWR Wade, Administrative Law, 3rd ed, p 151.
47 SA de Smith, Judicial Review of Administrative Action, 3rd ed, p 320.
48 Mafatlal Engg Industries Ltd v Mafatlal EIE Union (1992) 2 LLJ 657, 671-73 (Bom), per Saldanha J.
49 Smith v East Elloe Rural District Council, [1956] AC 736 (HL).
50 R v Medical Appeal Tribunal ex p Gilmore [1957] 1 QB 574, 583, per Lord Denning LJ.
51 Anisminic Ltd v Foreign Compensation Commission [1969] 1 All ER 208.
52 HWR Wade, Administrative Law, third edn, p 152.
53 HWR Wade, ‘Constitutional and Administrative Aspects of the Anisminic Case’, [1969] 85 LQR, p 198.
54 R v Murray, ex p Proctor [1949] 77 CLR 387 (HC).
55 Queen v Members of CSCP Board ex p MSF Member Ltd [1959] 101 CLR 246.
56 Coal Miners’ IU of Workers of Western Australia v Amalgamated Collieries of WA [1960] 104 CLR 437.
57 Toronto Newspapers Guild v Globe Printing Co [1953] 3 DLR 561.
58 Estep v US 327 US 114.
59 HWR Wade, Constitutional and Administrative Aspects of the Anisminic Case, [1969] 85 LQR pp 198, 201-03.
60 Bharat Bank Ltd v Employees (1950) LLJ 921 [LNIND 1950 SC 4] (BC), per Kania CJI.
61 Muir Mills Ltd v Suti Mill Mazdor Union (1955) 1 LLJ 1 [LNIND 1954 SC 159] (SC), per Bhagwati J.
62 Indian Law Institute Studies, Judicial Review through Writ Petitions, p 11.
63 Cf R v Medical Appeal Tribunal, ex p Gilmore [1957] 1 QB 574, 583, per Lord Denning LJ.
64 FACT Employees Assn, Cochin v FACT Ltd (1977) 1 LLJ 182 [LNIND 1996 MAD 736], 189 (Ker), per Thommen J.
65 Grindlays Bank Ltd v CGIT (1978) 2 LLJ 371 : 82 CWN 643 (Cal), per Sabyasachi Mukharji J.
66 Grindlays Bank Ltd v CGIT, (1981) I LLJ 327 : AIR 1981 SC 606 [LNIND 1980 SC 484]: [1981] 2 SCR 341 [LNIND 1980 SC
484] : 1981 (1) SLJ 510 (SC) (SC), per AP Sen J.
67 Anil Sood v PO, Labour Court, (2001) I LLJ 1113(1114) (SC) : (2001) 10 SCC 534.
68 Ajit Singh v PO, LC., (2001) 4 LLN 1165 (P&H), per Sudhakar J.
69 Sangam Tape Company v Hans Raj AIR 2004 SC 4776 [LNIND 2004 SC 996]: (2005) 9 SCC 331 [LNIND 2004 SC 996] : 2004
(8) JT 109 : 2004 (8) SCALE 267 [LNIND 2004 SC 996] : (2004) 3 LLJ 1141 [LNIND 2004 SC 996] : 2004 LIC 4039, per Sinha
J.
70 Rao, EM (2015), Industrial Jurisprudence: A Critical Commentary, 2nd ed, Lexisnexis, pp. 377-380.
71 Radhakrishna Mani Tripathi v LH Patel (2009) 1 LLJ 549 (SC), per Aftab Alam J.
72 South Seas Distillaries & Breweries Pvt Ltd v DR Patne (2003) 4 LLJ 48 [LNIND 2002 BOM 400] (Bom), per Rebello J.
73 Tamil Nadu Khadi and Village Industries Board v P Subramaniam (2009) 1 LLJ 267 [LNIND 2008 MAD 2796] (Mad), per FMI
Kalifulla J.
74 Mgmt of Stallion Garments v PO, LC & Ors., (2010) 3 LLJ 156 (Mad).
75 Andhra Handloom WCS v. State of AP (1963) 2 LLJ 488 (AP), per Gopalakrishna Nair J.

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76 United Transformers Mfg. Co v State of UP (1964) 1 LLJ 722 (All), per Seth J.
77 Mgmt, Janakiram Mills Ltd v PO, LC (2014) 2 LLJ 213 : [2014 (141) FLR 891 ] (Mad), per Vaidyanathan J.
78 Kapra ME Union v Birla Cotton Spg & Wvg Mills Ltd AIR 2005 SC 1782 [LNIND 2005 SC 279]: (2005) 2 LLJ 271 [LNIND 2005
SC 279] : (2005) 13 SCC 777 [LNIND 2005 SC 279], per BP Singh J.
79 State of Orissa v Madan Gopal Rungta AIR 1952 SC 12 [LNIND 1951 SC 59], per Kania CJI.
80 Section 38 of the Constitution (42nd Amendment) Act 1976 (wef 1-2-1977).
81 Came into force with effect from 13 April 1978.
82 Came into force with effect from 20 June 1979.
83 Tilokchand Motilal v HB Muushi [1969] 2 SCR 824 [LNIND 1968 SC 353], per Hidayatullah J.
84 Carlsabad Mineral Water Manufacturing Co Ltd v HM Jagtiani AIR 1952 Cal 315 [LNIND 1950 GAU 1], 318, per Mitter J.
85 Iyyappan Mills Pvt Ltd v Iyyappan Mills Workers’ Union (1962) 2 LLJ 84 (Ker) (DB), per Raghavan J.
86 Ananthanarayanan v GM, Southern Rly (1956) 1 LLJ 29 (Mad), per Balakrishna Ayyar J.
87 East Asiatic & Allied Companies v BL Shelke (1961) 1 LLJ 162 (Bom), per Mudholkar J.
88 Workmen of VM Bus Service v LC (1970) 2 LLJ 95 (Mad), per Alagiriswami J.
89 DCM Chemicals ELC Union v Delhi Administration (1983) 1 LLJ 306 [LNIND 1982 DEL 121]-07 (Del), per NN Goswami J.
90 Krishnarajendra Mills Workers’ Union v ALC (1968) 1 LLJ 504, 507-08, 513 (Mys) (DB), per Tukol J.
91 Jaswant Sugar Mills Ltd v Lakshmi Chand (1963) 1 LLJ 524 [LNIND 1962 SC 308] (SC), per Shah J.
92 Testeels Ltd v NM Desai (1970) 1 LLJ 210 (Guj) (FB), per Bhagwati CJ.
93 Bharat Bank Ltd v Employees of Bharat Bank Ltd (1950) LLJ 921 [LNIND 1950 SC 4], 930 (SC), per Mahajan J.
94 Calcutta Port TS Union v Calcutta RT Assn (1989) 1 LLJ 223 [LNIND 1988 SC 447], 227 (SC), per Venkataramiah J.
95 Newspaper Ltd v IT (1957) 2 LLJ 1 [LNIND 1957 SC 28], 8 (SC), per Kapur J.
96 Engineering Mazdoor Sabha v Hind Cycles Ltd (1962) 2 LLJ 760 [LNIND 1962 SC 337], 768 (SC), per Gajendragadkar J.
1 SK Chatterjee v Eastern Coalfields Ltd 1986 Lab IC 50 (Cal) (DB), per MM Dutt J.
2 Canara Bank v Vasudeva Rao (1986) 1 LLJ 211, 213 (Kant), per Rama Jois J.
3 In some High Courts, the writ-appeal is also called ‘letters patent appeal’.
4 Umaji Keshao Meshram v Radhikabal AIR 1986 SC 1272 [LNIND 1986 SC 77], 1317-18, per Madon J.
5 Asha Devi v Dukhi Sao AIR 1974 SC 2048 [LNIND 1974 SC 219], 2050, per Jagan Mohan Reddy J.
6 SGP Divn. of AS Enterprises Ltd v VD Padamwar 1990 Lab IC 24, 33 (Bom) (DB), per Deshpande J.
7 PD Sharma v State Bank of India (1969) 1 LLJ 513 [LNIND 1968 SC 33], 515 (SC), per Hegde J.
8 R v St Elmundsbury and Ispwich Diocese, ex p White [1947] 2 All ER 170, per Scott LJ.
9 AT Markose, Judicial Control of Administrative Action in India, p 184.
10 Halsbury’s Laws of England Vol 1, fourth edn, p 150, para 147.
11 R v Electricity Commissioners [1924] 1 KB 171, 204-05, per Lord Atkin LJ.
12 R v Criminal Injuries Compensation Board, ex p Lain [1967] 2 QB 864, 870-81, 892.
13 Ridge v Baldwin [1964] AC 40 (HL), per Lord Reid.
14 ‘Natural Justice, Substance of Shadow’—published in Public Law Journal, 1975.
15 Associated Cement Cos. Ltd v PN Sharma (1965) 1 LLJ 433 [LNIND 1964 SC 346], 439 (SC), per Gajendragadkar J.
16 State of Orissa v Binapani Devi (1967) 2 LLJ 266 [LNIND 1967 SC 37], 269 (SC), per Shah J.
17 AIR 1970 SC 150 [LNIND 1969 SC 197], per Hegde J.
18 Maneka Gandhi v Union of India AIR 1978 SC 597 [LNIND 1978 SC 25], 626-27, per Bhagwati J.
19 Prabodh Verma v State of Uttar Pradesh CA No 694 of 1980 (27-7-1984) (SC), per Madon J.
20 R v Electricity Commr [1924] 1 KB 171, 205, per Lord Atkin LJ.
21 Western India Automobile Assn v IT (1949) LLJ 245 (FC), per Mahajan J.

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22 Lalit Gopal v MV Hirway (1973) 2 LLJ 22, 25 (Bom) (DB), per KK Desai J.
23 Re Clifford & O’Sullivan [1921] 2 AC 570.
24 Channel Coaling Co v Ross [1907] 1 KB 145.
25 R v Comptroller-General of Patents, ex p Parke, Davis & Co [1953] 1 All ER 862, 866.
26 Butterworth v Walker [1765] 3 Burr 1689.
27 Express NPEU v Express Newspapers Pvt Ltd (1960) 1 LLJ 351 [LNIND 1959 MAD 130], 359 (Mad) per Ananthanarayanan J.
28 Re Birch [1855] 15 CB 743.
29 Mackonochi v Lord Penzance [1881] 6 App Cas 424, 444, HL, per Lord Blackburn.
30 Joseph v Henry [1850] 1 LM & P 388.
31 R v Fulham, Hammersmith and Kensington Rent Tribunal ex p Aerek [1951] 2 KB 1.
32 Dutens v Robson [1789] Hy Bl 100.
33 Chivers v Savage [1855] 5 E & B 697.
34 R v Kent JJ (1889) 24 QB D 181, DC.
35 Jagannath Vinayak Kale v MI Ahmadi (1958) 2 LLJ 50 (Bom), per KT Desai J.
36 MK Textile Mills v Punjab State (1962) 1 LLJ 560 -61 (Punj), per Dua J.
37 Hari Vishnu Kamath v Ahmad Ishaque AIR 1955 SC 233 [LNIND 1954 SC 174], per Venkatarama Ayyar J.
38 SA de Smith, Judicial Review of Administrative Action, third edn, p 337.
39 HWR Wade, Administrative Law third edn, p 130.
40 Navinchandra S Shah v Ahmedabad CDS Ltd (1979) 1 LLJ 60 [LNIND 1977 GUJ 35] (Guj), per DA Desai J.
41 GM, Security Paper Mill v Hari Shanker Namdeo 1980 Lab IC 367 (MP) (DB), per GP Singh CJ.
42 JD Jain v Mgmt of State Bank of India (1982) 1 LLJ 54 [LNIND 1981 SC 465], 56 (SC), per Baharul Islam J.
43 Bangalore BH Society v State of Kamataka 1988 Lab IC 1225, 1228 (Kant), per Shivashankar Bhat J.
44 N Subbiah v Indian Bank (1992) 1 LLJ 752, 755 (Mad), per Govindasamy J.
45 Navinchandra S Shah v Ahmedabad CDS Ltd (1979) 1 LLJ 60 [LNIND 1977 GUJ 35] (Guj) (DB), per DA Desai J.
46 Prabodh Verma v State of Uttar Pradesh AIR 1985 SC 167 [LNIND 1984 SC 376], 183, per Madon J.
47 India Tourism Development Centre v LC (2000) 3 LLN 269 (Del), per Sikri J.
48 Indian Oil Corporation Ltd v Panchanan Manna (1999) 2 LLJ 66 [LNIND 1998 CAL 193] (Cal) (DB), per Jain J.
49 Nazir Ahmed v A Ramachandran (2000) 4 LLN 948 (Mad), per Venkatachalam J.
50 Post Graduate IMER v Raj Kumar (2001) 1 LLN 804, 806 (SC).
51 Lakshmi Precision Screws Ltd v Ram Bagahat (2002) 4 LLN 25 (SC), per Banerjee J.
52 Competition Printing Press v SJ Singh (2002) 1 LLN 727 (Bom), per Kochar J.
53 GM, North-West KRTC v MH Talwar (2002) 1 LLN 992 (Kant), per Gururajan J.
54 Mgmt of VPAC Bank Ltd v PO, LC (2002) 2 LLN 707 (Mad), per Sirpurkar J.
55 Mgmt of Kongarar Spinners Ltd v PO, LC, (2002) 2 LLN 734 (Mad), per Kulasekaran J.
56 Bennet Coleman & Co Ltd v Third IT (2002) 2 LLN 1073 (Cal), per Ansari J.
57 Damodaran v PO, Second Addl LC (2002) 3 LLN 314 (Mad), per Sathasivam J.
58 BC Chaturvedi v Union of India (1997) 4 LLN 65 (SC).
59 UPSRTC v Mahesh Kumar Mishra (2000) 2 LLN 399 (SC).
60 A Thangaraj v PO, LC (2002) 3 LLN 335 (Mad), per Ventakatachalam J.
61 Air India Ltd v M Yogeshwar Raj (2000) 2 LLJ 250 [LNIND 2000 SC 787], 252-53 (SC), per Ruma Pal J.
62 Dharampal v National Engg Industries Ltd (2002) 1 LLN 691 (SC).
63 Surendra Prasad Khugsal v Chairman, MMTC of India 1993 Lab IC 2433 -34 (SC).

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64 State of Orissa v Murlidhar Jena AIR 1963 SC 404 [LNIND 1961 SC 545], per Gajendragadkar J.
65 AG Basavarajappa v State of Mysore (1968) 2 LLJ 455, 458 (Mys) (DB), per Hegde J.
66 Estrolla Rubber v Dass Estate (P) Ltd, (2001) 8 see 97.
67 Madura Coats Ltd v PO, LC (2001) 2 LLN 1132 (Mad), per Padmanabhan J.
68 Mysore Sugar Co Ltd v Mohanraj (2002) 1 LLN 283 (Kant), per Kumar J.
69 State of Uttar Pradesh v Mohammad Nooh AIR 1958 SC 86 [LNIND 1957 SC 99], per SR Das CJI.
70 Commr of Police v Gordhondas Bhanji [1952] SCR 135 [LNIND 1951 SC 63], 156, per Bose J.
71 V Vellaswamy v IG of Police, Tamil Nadu 1982 Lab IC 356 [LNIND 1981 SC 465] (SC), per Desai J.
72 Thansingh Nathmal v A Mazid Superintendent of Taxes [1964] 6 SCR 654 [LNIND 1964 SC 26], 662, per Shah J.
73 Tilokchand Motichand v HB Munshi [1969] 2 SCR 824 [LNIND 1968 SC 353], 830, per Hidayatullah CJI.
74 Union of India v TR Verma (1958) 2 LLJ 259 [LNIND 1957 SC 91] (SC), per Venkatarama Ayyar J.
75 Promod Ranjan Das v Cuttack Municipality 1974 Lab IC 292, 295 (Ori) (DB), per, Misra CJ.
76 Rashid Ahmed v Municipal Board, Kairana [1950] SCR 566 [LNIND 1950 SC 24], per SR Das J.
77 State of Uttar Pradesh v Mohammad Nooh AIR 1958 SC 86 [LNIND 1957 SC 99], per SR Das CJI.
78 Ram and Shyam Co v State of Haryana AIR 1985 SC 1147 [LNIND 1985 SC 188]: (1985) 3 SCC 267 [LNIND 1985 SC 188], per
Desai J.
79 Duryodhan Naik v Union of India 1969 Lab IC 1282, 1287 (Ori), per Patra J.
80 Maharashtra GKU v Calico Chemical (P&F Divn) 1983 Lab IC 1456 (Bom) (DB), per Dharamadhikari J.
81 Nathaniel Masih v UPSCFD Corpn Ltd 1989 Lab IC 2276 -77 (All) (DB), per Srivastava J.
82 Kailash Paswan v Union of India 1985 Lab IC 433, 436-37 (Pat) (DB), per SB Sanyal J.
83 Allied Sales Corpn v Authority under AP Shops & Estts. Act (1990) 2 LLJ 510 (AP) (DB).
84 Mahabir v DK Mittal, Dy Chief Mech. Engr. NE Rly (1979) 2 LLJ 363, 368 (Pat) (DB), per NP Singh J.
85 SK Burman Dr, Dabur Pvt Ltd v State of WB 1978 Lab IC 1575, 1578-9 (Cal) (DB), per AK Sen J.
86 George Peter C v Workmen (1962) 1 LLJ 484 (Ker) (DB), per Ansari CJ.
87 SDasarathy v Mysore SEB 1974 Lab IC 705 (Mys) (DB), per Govinda Bhat J.
88 Mettur Chem and Indl Corpn Ltd v Workers (1955) 1 LLJ 27, 34-35 (Mad), per Rajagopalan J.
89 Abdul Khalique v Heavy Engg. Corpn Ltd 1985 Lab IC 1114, 1116 (Pat) (DB), per Satyeshwar Roy J.
90 Mettur Chemical and Industrial Coryn Ltd v Workers (1955) 1 LLJ 27, 34-35 (Mad), per Rajagopalan J.
91 State of Bombay v Hospital Mazdoor Sabha (1960) 1 LLJ 251 [LNIND 1960 SC 19] (SC), per Gajendragadkar J.
92 Basant Kumar Sarkar v Eagle Rolling Mills Ltd (1964) 2 LLJ 105 [LNIND 1964 SC 52], 108 (SC), per Gajendragadkar CJI.
93 Rohtas Industrial Ltd v Rohtas Industrial Staff Union (1976) 1 LLJ 274 [LNIND 1975 SC 523], 285-86 (SC), per Krishna Iyer J.
94 Bihar Rajya Vidyut Parishad Field Kamgar Union v State of Bihar AIR 1987 SC 1875, per Pathak CJI.
95 Mohd Yousufoddin v MD, Hyderabad Alwyn Ltd 1991 Lab IC 1700, 1702 (AP), per Radhakrishna Rao J.
96 VISL Contract Workers Assn v VISL 1991 Lab IC 1702 (Kant), per Shivashankar Bhat J.
97 A Aziz v MD, Karnataka SRTC 1986 Lab IC 1722 (Kant), per Bopanna J.
1 Life Insurance Corpn of India v Amalendu Gupta (1988) 2 LLJ 495, 504 (Cal) (DB), per Baboo Lall Jain J.
2 Dharamapuri DCS Mills Ltd v Ramamurthi 1991 Lab IC 24, 27 (Mad) (DB) Sundaram J.
3 Hariba v KSRTC (1983) 2 LLJ 76, 82 (Kant), per Rama Jois J.
4 Manohar Lal v State of Punjab 1983 Lab IC 1763 (P&H) (FB), per PC Jain CJ.
5 Dinesh Prasad v State of Bihar 1985 Lab IC 287, 299 (Pat) (FB), per Sandhawalia CJ.
6 State of UP v Mohammad Noor AIR 1958 SC 86 [LNIND 1957 SC 99], per SR Das CJI.
7 R v Thomas (1892) 1 QB 426.
8 King v Post Master General ex parte Car Michael [1928] 1 KB 291, 299.

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9 Channel Coaling Co v Ross [1907] 1 KB 145.

10 Premier Automobiles Ltd. v. Kamlakar Shantaram Wadke, (1976) 1 SCC 496 [LNIND 1975 SC 299], per Untwalia J.
11 UP State Bridge Corpn Ltd v U.P. Rajya Setu Nigam S. Karamchari Sangh, AIR 2005 SC 4067 [LNIND 2004 SC 216]: (2004) 2
LLJ : 2004 (2) SCALE 466 [LNIND 2004 SC 216] : (2004) 4 SCC 268 [LNIND 2004 SC 216], per Ruma Pal J.
12 Sukhdev Singh v Bhagatram Association of Clause II. Officers, Shyam Lal, Industrial Finance Corporation, AIR 1975 SC 1331
[LNIND 1975 SC 79]: 1975 Lab IC 881 : (1975) 1 LLJ 399 [LNIND 1975 SC 79] : (1975) 1 SCC 421 [LNIND 1975 SC 79], per
Ray CJI.
13 Ajay Hasia v Khalid Mujib Sehrawardi, AIR 1981 SC 487 [LNIND 1980 SC 456]: (1981) 1 LLJ 103 [LNIND 1980 SC 456] :
(1981) 1 SCC 722 [LNIND 1980 SC 456], per Bhagwati J.
14 FACT Employees’ Assn v FACT Ltd (1977) 1 LLJ 182 [LNIND 1996 MAD 736], 191 (Ker), per Thommen J.
15 Maharashtra SRTC v Balwant Regular Motor Service AIR 1969 SC 329 [LNIND 1968 SC 234], 335, per Ramaswami J.
16 Lindsay Petroleum Co v Prosper. .. Kemp 5 PC 221, 239, per Sir Barnes Peacock J.
17 Central Bank of India v S Satyam (1996) 2 LLJ 820 [LNIND 1996 SC 1137], 827 (SC), per JS Verma J.
18 State Bank of Indore v Govindrao (1997) 1 LLJ 841 [LNIND 1997 SC 69]-42 (SC), per Sen J.
19 Paschimbanga TMK Samity v State of West Bengal 1994 Lab IC 2, 22 (Cal) (DB).
20 Abul Hasan v Northern Rly (Works Manager) (1961) 1 LLJ 424 [LNIND 1960 ALL 92] (All) (DB), per RA Misra J.
21 Sathya Kumar v State of Andhra Pradesh 1971 Lab IC 1191, 1203 (AP) (DB), per Gopal Rao Ekbote).
22 SLoganathan v Special Officer of TUCS Ltd 1984 Lab IC 1543, 1547 (Mad), per Venkataswami J.
23 Nathaniel Masih v UP Scheduled Caste F&DC Ltd 1989 Lab IC 2276 -77 (All) (DB), per Srivastava J.
24 Bachittar Singh v Central LC 1969 Lab IC 699, 703 (P&H), per Sarkaria J.
25 Gorachand Kundu v Director, Anthropological Survey of India (1969) 1 LLJ 37, 39 (Cal), per D Basu J.
26 Mongey v Board of Revenue AIR 1957 All 47 [LNIND 1956 ALL 48] (DB), per Agarwala J.
27 Chandra Bhushan v Dy Director of Consolidation, UP [1967] 2 SCR 286 [LNIND 1967 SC 33]-88, per Shah J.
28 State of Madhya Pradesh v Bhailal Bhai AIR 1964 SC 1006 [LNIND 1964 SC 7], per Das Gupta J.
29 PS Sadasivaswamy v State of Tamil Nadu 1974 Lab IC 1431 [LNIND 1974 SC 304]-32 (SC), per Alagiriswami J.
30 Himachal Pradesh RTC v Balwant Singh (1993) 1 LLJ 243 [LNIND 1992 SC 625]-44 (SC), per Sharma J.
31 Bishnu Charan Mohdnty v State of Orissa , (1973) 2 LLJ 528 -29 (Ori) (DB), per GK Misra CJ.
32 Cf Pratap Singh v State of Punjab AIR 1964 SC 72 [LNIND 1963 SC 211], 83, per Ayyangar J.
33 SA de Smith, Judicial Review of Administrative Action, fourth edn, pp 285, 298-356.
34 Birkadale District Electricity Supply Co Southport Corpn [1926) AC 355, 377.
35 SA de Smith, Judicial Review of Administrative Action, fourth edn, p 279.
36 M Nagalakshmiah v State of Andhra Pradesh 1973 Lab IC 656,662 (AP) (FB), per Ekbote CJ.
37 R v Askew [1768) 4 Burr 2186, 2189.
38 Shalp v Wakefield (1891) AC 173, 179, per Lord Halsbury LC.
39 Registrar of Trade Marks v Ashok Chandra Rakhit AIR 1955 SC 558 [LNIND 1955 SC 38], 562, per SR Das J.
40 Sant Raj v OP Singla (1985) 2 LLJ 19 [LNIND 1985 SC 118]-22 (SC), per Desai J.
41 DR Fraser & CO v Minister of National Revenue [1949] AC 24, 36.
42 M Nagalakshmiah v State of AP 1973 Lab IC 656, 662 (AP) (FB), per Ekbote CJ.
43 Schmidt v Home Secretary [1969] 2 Ch D 149 , per Lord Denning.
44 M Nagalakshmiah v State of AP 1973 Lab IC 656, 663 (AP) (FR), per Ekbote CJ.
45 R v Gloucester (Bishop) [1831 J 2 B & Add 158, 163.
46 SA de Smith, Judicial Review of Administrativc Action, fourth edn, p 278.
47 Cf R v Manchester Legal Aid Committee. ex p Brand (RA) & Co [1952] 2 QB 413.
48 Webb v Minister of Housing and Local Government [1964] 1 WLR 1295, 1301.

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49 Ganesh Ranjan Servai v Bennett Coleman and Co Ltd 1989 Lab IC 534, 546 (Bom). per Kantharia J.
50 Ponnuswamy v PO LC 1989 Lab IC 301,304 (Mad), per Nainar Sundaram J
51 Tikaram & Sons Ltd v Workmen (1960) 1 LLJ 514 [LNIND 1959 SC 84] (SC), per Gajendragadkar J.
52 Gokak Mills Ltd v IT 1970 Lab IC 337, 344-45 (Mys) (DB), per Gopi Vallabha Iyengar J.
53 Workmen v Cardbord Box Manufacturing Co 1970 Lab IC 154, 157(Cal), per Bijayesh Mukherji J.
54 Gujarat Wood Works v General Kamgar Union (1971) 2 LLJ 246 (Bom). per Vaidya J.
55 Hindustan Times Ltd v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431] (SC), per Das Gupta J.
56 Paras Nath Misra v UP State IT 1973 Lab IC 888, 890 (All) (DB), per Ojha J.
57 Shaw Wallace & Co Ltd v PO, Second Addl IT (2002) 1 LLN 317 (Mad), per Murugesan J.
58 PGI Medical Education & Research Assn v R Kumar (2001) 1 LLN 802, 807 (SC).
59 Balbir Singh v Punjab Roadways (2001) 2 LLN 118 (SC).
60 Depot Manager, APSRTC v PO, IT (2001) 2 LLN 897 (AP), per Swamy J.
61 Vanamamalai V v Sundaram Textiles Ltd (2000) 1 LLJ 702 [LNIND 1999 MAD 673] (Mad), per Balasubramanian J.
62 P Kalivarthan v PO (2002) 1 LLN 396 (Mad), per Murugesan J.
63 Mgmt o.f Salem Steel Plant v PO, LC (2002) 2 LLN 425 (Mad), per Sivasubramaniam J.
64 Karnataka SRTC v A Ramanna (2001) 3 LLN 592, 596 (Kant) (DB).
65 SA de Smith, Judicial Review’ of Administrative Action, fourth edn, p 128.
66 Ibid, pp 128-29.
67 SA de Smirh, Judicial Review of Administrative Action, fourth edn, p 133.
68 Syed Yakoob v Radhakrishnan AIR 1964 SC 477, 479, per Gajendragadkar J.
69 Hindustan Steel Ltd v State of West Bengal 1977 Lab IC 1417, 1420 (Cal), per Basak J.
70 Oil India Ltd v CGIT 1980 Lab IC (NOC) 93 (Cal), per AK Mookerji J.
71 Sheo Siunpatal v State of UP 1983 Lab IC 324, 326 (All), per TS Misra J.
72 Malabar Products Ltd v IT (1958) 1 LLJ 47 (Ker).
73 WHD’ Cruz v ME Thomas (1996) 1 LLJ 706, 708 (Ker), per Kamat J.
74 Kerala Solvent Extractions Ltd v A Unnikrishnan (1994) 2 LLJ 888 (SC).
75 Bhagwati Prasad v Delhi State MDC 1990 Lab IC 126, 128 (SC), per K Ramaswamy J.
76 Managment of Singareni Collieries Ltd v IT (1989) 2 LLJ 608, 613 (AP), per Amareshwari J.
77 Food Corpn of India v IT 1992 Lab IC 2059, 2064 (Ori) (DB), per Hansaria CJ.
78 Eifco Oil Engine Industries v LC (1992) 2 LLJ 293 -94 (Mad) (DB), per Anand CJ.
79 Thonimudi Estate v LC (1996) 1 LLJ 432 [LNIND 1995 MAD 350], 434 (Mad). per R Jayasimha Babu J.
80 Tollygunge Club Ltd v Fifth IT of West Bengal 1985 Lab IC 103, 106 (Cal), per UC Banerjee J.
81 PN Gulati Dr v PO, LC 1977 Lab IC 1088, 1094 (All) (DB), per Seth J.
82 Oil India Ltd v CGIT 1980 Lab IC (NOC) 93 (Cal), per AK Mookerji J.
83 Janardan Kar v State of Orissa 1974 Lab IC 296, 298 (Ori) (DB), per GK Misra CJ.
84 Managment of Bihar KG Sangh v State of Bihar 1977 Lab IC 466 [LNIND 1984 SC 252], 479 (Pat) (DB). per SK Jha J.
85 Co-op Tea Society Ltd v Cannanore DPW Union (1977) 2 LLJ 16, 19 (Ker) (DB), per Nambiyar CJ.
86 Junkundar Colliery v Sahdeo Thakur 1974 Lab IC 417 [LNIND 1984 CAL 157], 420 (Pat) (DB), per Untwalia CJ.
87 Mgmt. of Muzaffarpur Goshala v State of Bihar 1985 Lab IC 144, 147 (Pat) (DB), per LM Sharma J.
88 UP State Sugar Corpn Ltd v DCL, 1990 Lab IC 645, 647 (All), per BN Misra J.
89 Workmen of Jessop & Co Ltd v Mgmt. 1974 Lab IC 332, 334 (Cal) (DB), per AK Mookerji J.
90 Navabharat, A Hindi Daily v Nagpur Union of WJ 1990 Lab IC 494, 504 (Bom) (DB), per Patel J.

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91 JK Cotton Spg & Wvg Mills Co Ltd v State of UP (1965) 2 LLJ 354 (All), per VG Oak J.
92 Navinchandra S Shah, v Ahmedabda Co-op Deptt Stores Ltd (1979) 1 LLJ 60 [LNIND 1977 GUJ 35] (Guj), per Desai J.
93 State of Andhra Pradesh v Chitra Venkata Rao AIR 1975 SC 2151 [LNIND 1975 SC 309].
94 Anil V Marathe v Municipal Commr of Greater Bombay (1994) 3 LLJ (Suppl) 1082, 1084 (Bom).
95 Mahendra Nissan Allwyns Ltd v MP Siddappa (2000) 1 LLJ 424, 425 (SC).
96 Rai Bareli KGB v Bhola Nath Singh (1999) 1 LLJ 947 (SC).
97 ND Mazumdar and Co v State of West Bengal (1999) 1 LLN 766 (Cal), per Kundu J.
1 Mysore Paper Mills Ltd v Workmen (2001) 2 LLJ 419 [LNIND 2001 SC 609] (SC).
2 Atlas Cycle (Haryana) v Kitab Singh AIR 2013 SC 1172 [LNIND 2013 SC 75]: 2013 Lab IC 1337 : (2013) 2 LLJ 289 : 2013 (1)
LLN 561 (SC) : 2013 LLR 231 : 2013 (2) SCALE 49 [LNIND 2013 SC 75] : (2013) 12 SCC 573 [LNIND 2013 SC 75], per
Sathasivam J.
3 JK Synthetics v RTU Kendra (2001) 1 LLN 877, 884 (SC), per Variava J.
4 Depot Mgr, APSRTC v V Velayudhan (2001) 1 LL J 1117(SC).
5 Cyril Emanuel v PO, Addl IT (2002) 3 LLN 809 (AP), per Narayana J.
6 Indian Overseas Bank v IOBSCW Union (2000) 2 LLN 930, 940 (SC).
7 Municipal Council Ajmer v Nagar PK Sangh 1973 Lab IC 1388, 1391 (Raj) (DB), per Beri CJ.
8 FACT Employees’ Assn, Cochin v FACT Ltd (1977) 1 LLJ 182 [LNIND 1996 MAD 736], 189 (Ker), per Thommen J.
9 SH Motor Transport Co v Motilal Hiralal Mudholkar (1964) 2 LLJ 595 (Bom) (DB), per Abhyankar J.
10 Goa Dock Labour Union v Govt of UT of Goa, Daman & Diu 1969 Lab IC 151 (Goa), per Jetley J.
11 Vasant Vithal Palse v Indian Hume Pipe Co (1970) 2 LLJ 328 (Bom) (DB), per Abhyankar J.
12 Upper Doab Sugar Mill Ltd v State of Uttar Pradesh (1957) 2 LLJ 652 [LNIND 1957 ALL 125]-53 (All), per Mehrotra J.
13 Muncipal Council Ajmer v Nagar Parishad Karamchari Sangh 1973 Lab IC 1388, 1391 (Raj) (DB), per Beri CJ.
14 Plantation Corpn of Kerala Ltd v PN Krishana Pillai 1974 Lab IC 793 (Ker), per Vishwanatha Iyer J.
15 Misak Pen Manufacturing Co-op v MA Malik 1988 Lab IC 1595 (AP), per PA Choudhary J.
16 Zakir Hussain v Engineer-in-Chief, Irrigation Department 1993 Lab IC 836, 843 (All) (DB), per RA Sharma J.
17 State of Haryana v KN Dutt, (1995) 2 LLJ 670 [LNIND 1995 SC 293] : AIR 1996 SC 183 [LNIND 1995 SC 293] (SC), per
Paripoornan J.
18 Union of India v Rajasthan Anushakti Karmachari Union, Rawatbhata 1977 Lab IC 155, 160 (Raj), per Joshi J.
19 Mgmt of Chandra Textiles Pvt Ltd v N Palaniswami (1987) 1 LLJ 458 [LNIND 1986 MAD 227] : (1987) I MLJ 269(Mad) (DB),
per Srinvasan J.
20 Jayanta Nath Mazumdar v State of West Bengal 1986 Lab I C 1399(Cal), per Paritosh K Mukherjee J.
21 ESIC v Kerala Handloom Development Corpn Employees’ Union (1995) 2 LLJ 17 (SC).
22 DN Banerji v PR Mukherjee (1953) 1 LLJ 195-96 (SC), per Chandrasekhara Aiyer J.
23 Uttar Pradesh Electric Supply Co Ltd v HV Bowen 1968 Lab IC 326, 329 (All), per Satish Chandra J.
24 NJ Patterson v State Bank of Hyderabad 1971 Lab IC 350, 352 (AP), per Kondaiah J.
25 SL Soni v Rajasthan State Mineral Development Corpn Ltd 1986 Lab IC 468, 472 (Raj), per SC Agrawal J.
26 DLF Housing Construction Pvt Ltd v Delhi Municipal Corpn AIR 1976 SC 386, 392, per Sarkaria J.
27 Biecco Lawrie SKUNION v Biecco Lawrie Ltd 1988 Lab IC 1449, 1451 (Cal), per PK Mukherjee J.
28 Uttar Pradesh State Electricity Board v PO, LC 1991 Lab IC 476 -77 (All), per RB Mehrotra J.
29 Tube Products Employees Union v Mgmt (1999) 1 LLJ 949 (Mad) (DB).
30 Huddart, Parker & Co v Moorehead 8 CLR 330, 357, per Griffith CJ.
31 Jaswant Sugar Mills Ltd v Lakshmi Chand (1963) 1 LLJ 524 [LNIND 1962 SC 308], 530 : AIR 1963 SC 677 [LNIND 1962 SC
308] (SC), per Shah J.
32 SA de Smith, Judicial Review of Administrative Action, fourth edn, p 77.

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33 Cooper v Wandsworth Board of Works [1863] 14 CB (NS) 180.

34 HWR Wade, Administrative Law, fifth edn, p 448-50.
35 Hopkins v Smethwick Local Board of Health. (1890) 24 QB D 713.
36 Fourth edn, p 68.
37 Op cit, p 89.
38 AK Kraipak v Union of India AIR 1970 SC 150 [LNIND 1969 SC 197]: (1969) 2 SCC 262 [LNIND 1969 SC 197], per Hegde J.
39 For a detailed discussion of the subject, SA de Smith, [1948] 11 MLR, pp 309-10.
40 Cooper v Wilson [1937] 2 KB 309, 340, per Greer LJ and Scott LJ.
41 R v Manchester Legal Aid Commitee [1952] 2 QB 413, 428, per Parker J.
42 Halsbury’s Laws of England, Vol 1, fourth edn, paras 4 and 7.
43 Associated Cement Companies Ltd v PN Sharma AIR 1965 SC 1595 [LNIND 1964 SC 346], 1601 : (1965) I LLJ 433: [1965] 2
SCR 366 [LNIND 1964 SC 346] (SC), per Gajendragadkar CJI.
44 State of Bombay v KS Advani AIR 1950 SC 222 [LNIND 1950 SC 32], 239-40 : [1950] 1 SCR 621 [LNIND 1950 SC 32] : (1950)
2 MLJ 703 [LNIND 1950 SC 32] (SC), per Mukherjea J and p 257, per Das J.
45 Radheshyam v State of Madhya Pradesh AIR 1959 SC 107 [LNIND 1958 SC 113]: [1959] 1 SCR 1440 [LNIND 1958 SC 113] :
1959 MPLJ 185 [LNIND 1958 SC 113], per SR Das CJI.
46 Jaswant Sugar Mills Ltd v Lakshmi Chand (1963) 1 LLJ 524 [LNIND 1962 SC 308], 529-30 : AIR 1963 SC 677 [LNIND 1962 SC
308] (SC), per Shah J.
47 Gujrat Steel Tubes Ltd v GST Mazdoor Sabha (1980) 1 LLJ 137 [LNIND 1979 SC 464], 156 (SC), per Krishna Iyer J.
48 Harbans Lal v Jagmohan Saran AIR 1986 SC 302 [LNIND 1985 SC 329], 304, per Pathak J.
49 Jagannath Baksh Singh v State of UP AIR 1962 SC 1563 [LNIND 1962 SC 145], per Gajendragadkar J.
50 Wade, ‘Anglo-American Adminstrative Laws: More Reflections’ [1966] 82 LQR 226, 229.
51 MN Kumar v May and Baker Pvt Ltd 1986 Lab IC 1005, 1007 (Del) (DB), per Prakash Narain CJ.
52 Anisminic Ltd v Foreign Compensation Commission [1967] 2 All ER 986, 994 (CA), per Diplock LJ.
53 Ujjambai v State of Uttar Pradesh AIR 1962 SC 1621 [LNIND 1962 SC 584], per SK Das J.
54 SA de Smith, Judicial Review of Administrative Action, fourth edn, p 110.
55 Ebrahim Aboobakar v Custodian General of Evacuee Property AIR 1952 SC 319 [LNIND 1952 SC 39]: [1952] 1 SCR 696
[LNIND 1952 SC 39], per Mahajan J.
56 Colonial Bank of Australasia v Willam [1874] LR 5 PC 417, 443.
57 Halsbury’s Laws of England, fourth edn, paras 54 and 60.
58 Jagannath Vinayak Kale v ML Ahmadi (1958) 2 LLJ 50 (Bom), per Desai J.
59 Bharat Bank Ltd v Employees of Bharat Bank Ltd (1950) LLJ 921 [LNIND 1950 SC 4] (SC), per Mahajan J.
60 Mgmt of Kasojan Tea State v LC 1974 Lab IC 372 (Assam & Nagaland), per Goswami J.
61 SA de Smith, Judicial Review of Administrative Action, fourth edn, pp 116, 123-4.
62 Workmen of Continental Comml. Co Pvt Ltd v Govt of WB (1962) 1 LLJ 85, 90-91 (Cal), per Banerjee J.
63 Express Newspapers Ltd v Workers (1962) 2 LLJ 227, 234 (SC), per Gajendragadkar J.
64 Crowell v Benson [1932] 285 US 22.
65 R v Fulham Rent Tribunl [1951] 2 KB 1.
66 R v Lincolnshire [1926] 2 KB 192, 202, per Aktin LJ.
67 SA de Smith, Judicial Review of Administrative Action, founh edn, pp 114-5.
68 T Prem Sagar v Standard Vacuum Oil Co Ltd (1964) 1 LLJ 47 [LNIND 1963 SC 298], 52 (SC), per Gajendragadkar J.
69 United Bidi Workers’ Union v S Ahmed Hussain (1964) 1 LLJ 285, 291-2 (Mad) (DB), per Ramachandra Ayyar CJ.
70 Queen v Commissioners.. . of Income Tax (1888) 21 QBD 313, 319-20, per Lord MR Esher.
71 Express Newspapers v Workers (1962) 2 LLJ 227, 233 (SC), per Gajendragadkar J.

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72 TC Basappa v T Nagappa [1955] 1 SCR 250 [LNIND 1954 SC 84], 257, per Mukherjea J.
73 Sadhu Ram v Delhi Transport Corpn 1983 Lab IC 1516 [LNIND 1983 SC 220] : AIR 1984 SC 1467 [LNIND 1983 SC 220] (SC),
per Chinnappa Reddy J.
74 Bharat Kala Kendra Pvt Ltd v RK Baweja 1981 Lab IC 893 [LNIND 1980 DEL 273], 896 (Del) (DB), per Ranganathan J.
75 PPMS Nagarathnam v State of Madras (1965) 1 LLJ 84 (Mad), per Srinivasan J.
76 Newspaper Ltd v IT (1957) 2 LLJ 1 [LNIND 1957 SC 28] (SC), per JL Kapur J.
77 Champion Cycle Industries v State of Uttar Pradesh (1964) 1 LLJ 724 [LNIND 1963 ALL 168] (All), per MC Desai CJ.
78 Dhulbhai v State of Madhya Pradesh [1968] 3 SCR 662 [LNIND 1968 SC 99], 668, per Hidayatullah CJI.
79 Express Newspapers Ltd v Their Workmen (1962) 2 LLJ 227, 233 : AIR 1963 SC 569 [LNIND 1962 SC 253] (SC), per
Gajendragadkar J.
80 Cooper Engineering Ltd v PP Mundhe (1975) 2 LLJ 379 [LNIND 1975 SC 284], 385-86 : AIR 1975 SC 1900 [LNIND 1975 SC
284] (SC), per Goswami J.
81 Standard Pottery Works v Standard PWE Union (1981) 2 LLJ 280, 286 : ILR 1981 (2) Ker 95, per Vadakkal J.
82 DP Maheshwari v Delhi Administration 1983 Lab IC 1629 (SC), per Chinnappa Reddy J.
83 SK Verma v Mahesh Chandra 1983 Labic 1483-84 : AIR 1984 SC 1462 [LNIND 1983 SC 233] (SC), per Chinnappa Reddy J.
84 SD Singh v Reserve Bank of India 1985 Lab IC 1733, 1738 : AIR 1986 SC 132 [LNIND 1985 SC 278] (SC), per Khalid J.
85 Chhatia Weaving Mills v PO, IT 1990 Lab IC 1399, 1402 : (1992) I LLJ 19(Ori) (DB), per Patnaik J.
86 Binny Ltd v PO, IT (1986) 1 LLJ 220, 228 : ILR 1985 KARNATAKA 59 [LNIND 1984 KANT 101] (Kant), per Rama Jois J.
87 HD Singh v Reserve Bank of India 1985 Lab IC 1733 : AIR 1986 SC 132 [LNIND 1985 SC 278] (SC), per Khalid J.
88 DP Maheshwari v Delhi Administration (1983) Lab IC 1629 (SC), per Chinnappa Reddy J.
89 Senapathy Whitelay Ltd v Puttaswamy , (2001) 1 LLN 268 (270) (Kant) (DB), per Sethi CJ.
90 Hussan M Mhasvadkar v BISLB, (2001) 4 LLN 766 (SC), per Doraiswamy Raju J.
1 Mgmt of Rangaswamy & Co v DV Jagadish (1992) 1 LLJ 133, 136 (Kant) (DB), per KA Swami J.
2 Race Course Betting Control Board v Secretary for Air [1944] Ch 114.
3 Rex v Northumberland Compensation Appeals Tribunal [1952] 1 KB 338.
4 SA de Smith, Judicial Review of Administrative Action, fourth edn, pp 400-408.
5 TC Basappa v T Nagappa AIR 1954 SC 440 [LNIND 1954 SC 84]: [1955] 1 SCR 250 [LNIND 1954 SC 84], per Mukherjea J.
6 Han Vishnu Kamath v Ahmad Ishaque AIR 1955 SC 233 [LNIND 1954 SC 174], 244 : [1955] 1 SCR 1104 [LNIND 1954 SC 174],
per Venkararama Ayyar J.
7 Nagendra Nath Bora v Commr of Hills Division AIR 1958 SC 398 [LNIND 1958 SC 6], 412 : [1958] 1 SCR 1240 [LNIND 1958
SC 6], per BP Sinha J.
8 Anisminic Ltd v Foreign Compensation Commission [1969] 1 All ER 208.
9 Armah v Government of Ghana [1966] 3 All ER 177, 187, per Lord Reid.
10 Halsbury’s Laws of England, Vol 1, fourth edn, p 63, para 57.
11 HWR Wade, Administrative Law, third edn, p 94.
12 R v Medical Appeal Tribunal, ex p Gilmore [1957] 1 QB 574, 582, per Lord Denning LJ.
13 Baldwin & Francis Ltd v Patents Appeal Tribunal [1959] 2 All ER 433, 447 (HL), per Lord Denning.
14 Anisminic Ltd v Foreign Compensation Commission [1969] 1 All ER 208, 213 (HL), per Lord Reid.
15 Prem Singh v Deputy Custodian General AIR 1957 SC 804, 809, per SR Das CJI.
16 Syed Yakoob v Radhakrishnan AIR 1964 SC 477, 480, per Gajendragadkar J.
17 Halsbury’s Laws of England, Vol 2, third edn, p 61, para 118.
18 Satyanarayan v Mallikarjun AIR 1960 SC 137, 141 : [1960] 1 SCR 890, per KC Das Gupta J.
19 Ambica Mills Co Ltd v SB Bhatt (1961) 1 LLJ I, 6 : AIR 1961 SC 970 [LNIND 1960 SC 334] (SC), per Gajendragadkar J.
20 KM Shanmugam v SRVS Pvt Ltd AIR 1963 SC 1626 [LNIND 1963 SC 25], 1630 : [1964] 1 SCR 809 [LNIND 1963 SC 25], per
Subba Rao J.

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21 New Gujarat Cotton Mills v LAT (1957) 2 LLJ 194, 201 : AIR 1957 Bom 111 [LNIND 1956 BOM 161] (Bom) (DB), per Shah J.
22 HWR Wade, Administrative Law, Fifth edn, p 287.
23 HWR Wade, Administrative Law, third edn, p 94.
24 Dharangadhra Chemical Works v State of Saurashtra (1957) 1 LLJ 477 [LNIND 1956 SC 99] : AIR 1957 SC 264 [LNIND 1956
SC 99] (SC), per Bhagwati J.
25 T Prem Sagar v Standard Vacuum Oil Co (1964) 1 LLJ 47 [LNIND 1963 SC 298] (SC) AIR 1965 SC 111 [LNIND 1963 SC 298],
116, per Gajendragadkar J.
26 Tollygunge Club Ltd v Fifth IT of West Bengal 1985 Lab IC 103, 106 (Cal), per UC Banerjee J.
27 Workmen of BEP Ltd v BE Paints Ltd (1974) 2 LLJ 23 (Ker) (DB), per Gopalan Nambiyar J.
28 Parry & Co Ltd v PC Pal (1970) 2 LLJ 429 [LNIND 1968 SC 358], 436 : AIR 1970 SC 1334 [LNIND 1968 SC 358] (SC), per
Shelat J.
29 Rajinder Kumar Kindra v Delhi Administration (1984) 2 LLJ 517 [LNIND 1984 SC 267] : AIR 1984 SC 1805 [LNIND 1984 SC
267]: (1984) 4 SCC 635 [LNIND 1984 SC 267] (SC), per Desai J.
30 IEL Ltd, Giridih v LC, Dhanbad (1993) 1 LLJ 294, 305 : 1992 (1) BLJR 562 (Pat), per SB Sinha J.
31 DM, United India Ins. Co Ltd v T Radhakrishna Murthy 1986 Lab IC 1954, 1958 (DB), per Jeevan Reddy J
32 KM Deb v PO, IT Dibrugarh 1985 Lab IC 254, 259 (Gau) (DB), per TS Misra CJ.
33 Obeetee Pvt Ltd, Mirzapur v State of Uttar Pradesh 1986 Lab IC 829 (All), per BD Agarwal J.
34 Keshav Soma Tawde v State Peoples Pvt Ltd (1988) 2 LLJ 410 (Bom), per Kantharia J.
35 Dayaram v Gwalior Sugar Co Ltd, 1990 Lab IC 995 (MP) (DB), per SK Dubey J.
36 Jila Sahkari Kendriya Bank v LC (1999) 3 LLN 1112 (MP), per Prasad J.
37 Union of India v HC Goel (1964) 1 LLJ 38 [LNIND 1963 SC 208], 45 : AIR 1964 SC 364 [LNIND 1963 SC 208] (SC), per
Gajendragadkar J.
38 State of AP v S Sree Rama Rao AIR 1963 SC 1723 [LNIND 1963 SC 105], per Shah J.
39 Woolcombers of India Ltd v WW Union 1973 Lab IC 1613 [LNIND 1973 SC 251], 1617 (SC), per Dwivedi J.

End of Document

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 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER IV Procedure, Powers and Duties of Authorities

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER IV Procedure, Powers and Duties of Authorities

Error of law and mala fides:

The infirmity of mala fide and the infirmity of error of law apparent on the face of record are separate and distinct, though
conceivably both may be present in the same case. There may be cases of ‘no evidence’ even where the authority is acting bona
fide as well as when the authority is acting mala fide. In the latter case, the conclusion of the authority not supported by any
evidence may be the result of mala fide. If it is shown that there is no evidence to support a conclusion of the authority, a writ
of certiorari will be issued without further proof of mala fides.40 To find a plea of mala fides, the court must be in a position to
hold positively that the authority whose act is impugned could have been acting only with a dishonest motive. It is not
sufficient to find that it was probably so.41 It is established that ‘the record’ includes the documents in the case which are the
basis of the decision as well as the statement of decision itself.42

Rules of Natural Justice:

In administrative law, rules of natural justice are foundational and fundamental concepts and are part of legal and judicial
procedures. Since the rules of natural justice are not embodied rules, it is not possible and practicable to precisely define the
parameters of natural justice.43 In Ranjit Thakur, Venkatachaliah J said:

It is the essence of a judgment that it is made after due observance of the judicial process; that the court or tribunal passing it observes,
at least the minimal requirements of natural justice, is composed of impartial persons acting fairly and without bias and in good faith.44

In the words of Bhagwati J:

Natural justice is a great humanising principle intended to invest law with fairness and to secure justice and over the years it has grown
into a widely pervasive rule affecting large areas of administrative action.45

By developing the principles of natural justice the courts have devised a kind of code of fair administrative procedure. Through
the principles of natural justice, the courts, therefore, control the procedure of the administrative authorities. Natural justice
plays much the same part in British law as does ‘due process of law’ in the Constitution of the United States.46 In America,
natural justice has been described as the ‘distillate of due process of law’.47 In other words, it is ‘the quintessence of the process
of justice inspired and guided by ‘fair play’ in action’.48 ‘Natural justice’, said Lord MR Esher, in Voinet v Barrett , ‘is the
natural sense of what is right and wrong’.49 Harman LJ in Ridge v Baldwin , described natural justice only as ‘fair play in
action’.50 Lord Morris of Borth-y-Gest, elaborated that ‘fair play in action’ is ‘fair in all circumstances’.51 According to Lord
Morris, natural justice is but fairness writ large and judicially.52 But as pointed out by Lord MR Evershed, the principles of
natural justice are easy to proclaim but their precise extent is far less easy to define.53 The expression is sadly lacking in
precision,54 and there really is very little authority indeed as to what it does mean.55 In the language of V Ramaswami J:

... the extent and application of the doctrine of natural justice cannot be imprisoned within the strait-jacket of a rigid formula. The
application of the doctrine depends upon the nature of the jurisdiction conferred on the administrative authority, upon the character of
the rights of the persons affected, the scheme and policy of the statute and other relevant circumstances disclosed in the particular
case.56
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

In its broadest sense, natural justice may mean simply the natural sense of what is right and wrong, and even in its technical
sense it is now often equated with fairness. But in administrative law, natural justice is a well defined concept which comprises
two fundamental rules of fair procedure; that a man may not be judge in his own cause; and that a man’s defence must always
be fairly heard.57 Marshall has formulated these two essential elements of natural justice as follows:

(i) no man shall be judge in his own cause or nemo debet esse judex in propria causa; and

(ii) both sides shall be heard or audi alteram partem.58

The rules of natural justice were formulated by the committee on ministers’ powers in England in 1932, by enunciating the
following three rules:

(i) that no man shall be judge in his own cause, nemo debet esse judex in propria causa;

(ii) that no man shall be condemned unheard, audi alteram partem; and

(iii) that a party is entitled to know the reasons for the decision.59

Other principles that have been stated to constitute the elements of natural justice are, that the parties must have due notice of
when the judge or tribunal will proceed, that the tribunal should not act under the dictation of other persons who have no
authority and that if the tribunal consists of several members all must sit together all the time, that there should be orderly
course of procedure and that the decision must be made in good faith.60 The aim of the rules of natural justice is to secure
justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law
validly made. In other words they do not supplant the law of the land but supplement it. The concept of natural justice has
undergone a great deal of change in recent years. In the past it was thought that it included just two rules.61 In the course of
years many more subsidiary rules came to be added to the rules of natural justice. These and many other rules are merely
extensions or refinements of the two main principles which are the essential characteristics of natural justice and are the twin
pillars supporting it,62ie, (i) no man shall be judge in his own cause; and (ii) both sides shall be heard or audi alteram partem.63
The Romans put them in two maxims nemo judex in causa sua or nemo debet esse judex in propria causa and audi alteram
partem. These principles have been described by Lord Denning with remarkable precision in the phrase, ‘impartiality and
fairness’. These two rules are separate concepts and are governed by separate considerations.64 The sole purpose of these rules
is to ensure fairplay.65

Bias:

‘The rule against bias’ means that no man shall be a judge in his own cause i.e. Nemo debet esse judex in propria suo causa.
This legal maxim, rooted in natural justice, is of ancient verity and has remained undoubted through the years. It forms the
broad foundation upon which the doctrine against bias is based.66 In the words of Bowen LJ, ‘Judges, like Caeser’s wife, should
be above suspicion’.67 In Manaklal, Gajendragadkar J observed that the test always is and must be whether a litigant could
reasonably apprehend that a bias attributable to a member of the tribunal might have operated against him in the final decision
of tribunal.68 In Dimes, Lord Campbell observed that this rule is not to be confined to a cause to which the (judge) is a parry,
but even applies to a cause in which he (judge) has an interest.69 In Arlidge, Lord Haldane referred to it as the rule against
bias.70 This principle is based on the twin requirement, viz, (i) no man should be a judge in his own cause, and (ii) justice must
not only be done but seem to be done.71 There is, however, a distinction between ‘interest’ (bias) and ‘favour’; and ‘favour’
should not be presumed in a judge.72 An illustration of personal interest is to be found in AK Kraipak,73 where the selection of
certain officers made by a special selection board constituted by the Central Government in which one of the candidates
himself was a member, was, quashed by the Supreme Court. Bias, broadly may be classified into three kinds:

Bias Due to Pecuniary Interest:

At common law no man who is himself a party to proceedings or who has any direct pecuniary interest in the result of the
proceedings is qualified to adjudicate in those proceedings, so that the public confidence in the administration of justice may be
maintained.74 In the words of Blackburn J, ‘there is no doubt that any direct pecuniary interest, however, small, in the subject of
inquiry, does disqualify a person from acting as a judge in the matter’.75 For instance, even a negligible shareholding of £ 5
held by a judge in a company of five million pounds has been held to be pecuniary interest vitiating his judgment and it has
been observed, ‘where a pecuniary interest exists, the law does not allow any further inquiry as to whether or not the mind was
actually biased by the pecuniary interest. The fact is established from which the inference is drawn that he is interested in the
decision, and he cannot act as a judge.76 In DV Vyas, the facts disclosed that the chairman of a Committee of Arbitrators was
held to have rendered himself incompetent to decide the cause before him since he had obtained for himself and his wife, free

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passage from Bombay to New York and back and free hospitality during their stay in USA during the inaugural flight of the
‘Boeing’ sponsored by the Air Corporation which was one of the parties. The High Court pointed out that the hospitality of the
corporation accepted by the chairman could not be considered to be too formal or niggardly not to merit attention. Holding that
the payment in kind to an arbitrator appointed under s 10A is not an appropriate mode of payment of fees, Chandrachud J
observed that the courts had always zealously upheld the principle, ‘it is not merely sufficient that justice is done but that
justice must seem to be done’.77

Personal Bias or Non-pecuniary Bias:

‘Personal bias’ is the inclination of the adjudicator in favour or against one of the parties to the proceedings before him. Hence,
where his partisan attitude towards the persons or the matter before him is reflected by words or deeds or his association with a
party who is instituting or defending the proceedings before him, he may be said to be personally biased in favour of or against
a party. In such cases, the reviewing courts will not inquire whether bias in fact has been shown by a Judge and will not hold
him to be disqualified unless the circumstances point out to a real likelihood or reasonable suspicion of bias.78 In order to
disqualify a person from acting in a judicial or quasi-judicial capacity on the ground of interest (other than pecuniary or
proprietary in the subject-matter of the proceedings), a real likelihood of bias must be shown.79AK Kraipak is a case, which fell
in the twilight zone of pecuniary interests and personal interests. In this case the Central Government constituted a special
selection board for selecting persons in the senior scale as well as in the junior scale from those serving in the forest department
of the State of Jammu and Kashmir. This board included one Shri Naqishbund who was also one of the candidates seeking to
be selected to the All India Forests Services. Though he did not sit in the selection board at the time when his name was
considered for selection, he did sit and participate in the deliberations of the board when the names of his rival candidates for
the same post were considered for selection. He also did not participate in the deliberations of the board while preparing the list
of selected candidates in order of preference. The Supreme Court struck down the selection with the observations that under the
circumstances it was improper to include Naqishbund as a member of the board because he was one of the persons to be
considered for selection. Speaking for a Constitution Bench, Hegde J observed:

It is against all canons of justice to make a man judge in his own cause. It is true that he did not participate in the deliberations of the
committee when his name was considered. But then the very fact that he was a member of the selection board must have had its own
impact on the decision of the selection board. Further, admittedly he participated in the deliberations of the selection board when the
claims of his rivals particularly that of Basu was considered. He was also a party to the preparation of the list of selected candidates in
order of preference. At every stage of his participation in the deliberations of the selection board there was a conflict between his
interest and duty. Under those circumstances, it is difficult to believe that he could have been impartial. The real question is not whether
he was biased. It is difficult to prove the state of mind of a person. Therefore what we have to see is whether there is reasonable ground
for believing that he was likely to have been biased. We agree with the learned attorney-general that a mere suspicion of bias is not
sufficient. There must be a reasonable likelihood of bias. In deciding the question of bias we have to take into consideration human
probabilities and ordinary course of human conduct. It was in the interest of Naqishbund to keep out his rivals in order to secure his
position from further challenge. Naturally he was also interested in safeguarding his position while preparing the list of selected
candidates.. .. In a group deliberation, each member of the group is bound to influence the others, more so, if the member concerned is a
person with special knowledge. His bias is likely to operate in a subtle manner. It is no wonder that the other members of the selection
board are unaware of the extent to which his opinion influenced their conclusions. We are unable to accept the contention that in
adjudging the suitability of the candidates, the members of the board did not have any mutual discussion. It is not as if the records spoke
of themselves. We are unable to believe that the members of the selection board functioned like computers. At this stage it may also be
noted that at the time the selections were made, the members of the selection board other than Naquishbund were not likely to have
known that Basu had appealed against his supersession and that his appeal was pending before the state government. Therefore, there
was no occasion for them to distrust the opinion expressed by Naquishbund. Hence the Board in making the selections must necessarily
have given weight to the opinion expressed by Naquishbund.80

A priori, when such a bias is proved, then the entire exercise of conducting an inquiry by a body or a board with the biased
member would be rendered futile as the procedure would not conform to the rules of natural justice.81 It is now well settled that
close relationship of the adjudicator with any of the parties to the proceedings before him, or interested in the subject-matter of
such proceedings will disqualify him.82 In the case of family relationship, the challenge to the proceedings need only establish
so close a degree of relationship as to give rise to ‘reasonable likelihood’ of the judge espousing the cause as his own.83 Some
cases are of personal prejudice and hostility,84 and family relationship.85 A judge would be disqualified if he were a friend of
the mother of one of the parties and that party made it to be known that the judge would be on her side.86 In MLL Kumar, the
inquiry officer was subordinate to the officer who was complainant as well as the witness in the inquiry. In this situation a
single judge of the Andhra Pradesh High Court held that the inquiry should not have been conducted by the officer because the
employee did not have a fair trial. The court further held that the mere fact that the objection to the inquiry was not raised
before the inquiry officer, would have vitiated the enquiry because there is no material to show that the workman was aware

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that he could raise such an objection at the inquiry though the plea of bias could be waived, there must be evidence that there
was such a waiver by conscious understanding of the situation and particularly the awareness that the employee was entitled to
raise the objection.87 In Manaklal, a complaint alleging professional misconduct against an advocate of a High Court was filed
by the respondent. The Chief Justice appointed a bar council tribunal consisting of a chairman and two other members to
inquire into the allegations. But the chairman had earlier represented the complainant in a case. It was held that the chairman
was disqualified on the application of the principle ‘justice should not only be done, but must appear to be done’ to the
litigating public. It was further observed that actual proof of prejudice was not necessary. The possibility of bias was
sufficient.88

In Ranjit Thakur, the court pointed out that as to the test of ‘likelihood of bias’ what is relevant is ‘the reasonableness of the
apprehension in that regard in the mind of the party’. Speaking for the court, Venkatachaliah J, held that the proper approach
for the judge is not to look at his own mind and ask himself, however honestly, ‘am I biased?’; but to look at the mind of the
party before him.89 Personal hostility or animosity towards a party disqualifies an adjudicator from adjudicating, if it gives rise
to real likelihood of bias. In Mineral Development, the proceedings cancelling the petitioner’s licence for the lease of certain
land was quashed as it was found that there was a political rivalry between the petitioner and the revenue minister who also had
filed a criminal case against the petitioner. It was held that the minister was disqualified from taking part in cancelling the
licence in view of his personal hostility.90 However, in the absence of compelling evidence of personal hostility or animosity,
the courts would be reluctant to conclude that any adjudicator’s decision is likely to be warped by personal feeling.91 In NS
Dhamankar, two members of the inquiry committee holding inquiry against the delinquent employee for contravention of the
building rules of the cantonment were prosecuted at the instance of that employee. It was held that these members had
sufficient motivation of being biased. In the circumstances, it was held that the entire proceedings of the inquiry were vitiated
for violation of the rules of natural justice. The legal effect of personal hostility by members or presiding officers of quasi-
judicial tribunals or administrative authorities exercising quasi-judicial functions in general, has ‘to be determined by reference
to the same criteria as those adopted for courts of justice subject to the proviso that it may sometimes be reasonable to disregard
the hostility of a small number of members of a large public body.92

Mala Fides:

Personal animosity or hostility towards any of the parties to the proceedings apart from disqualifying the authority on the
ground of personal bias may also fall under the head of mala fides. These several forms of abuse of power not only overlap to a
very great extent but also run into one another, 93 and the task of separating them analytically in particular fact situation may be
almost insuperable. Mala fides, apart from bringing the proceedings within the ambit of one of the recognised categories of
invalidity, is sui generis a ground for invalidating the proceedings.94 The concept of mala fides, though may not be capable of
precise definition, may be said to comprise of dishonesty, fraud and malice. A power is exercised fraudulently if its repository
intends to achieve an object other than that for which he believes the power has been conferred. For example, a local authority
committee would exercise in bad faith its power to exclude interested members of the public if it deliberately chose to hold the
meeting in a small room. The intention may be to promote another public interest or private interests. A power is exercised
maliciously if its repository is motivated by personal animosity towards those who are directly affected by its exercise.95 Such
an exercise of power is always liable to be quashed on the main ground that it is not a bona fide exercise of power. The
decisions of the Supreme Court in Mineral Developments case and Kraipak’s case illustrate the point.

Official Bias:

Markose has explained ‘official bias’ in following terms:96 In the case of official bias, the officer is not actuated by personal ill-
will. He is so imbued with the desire to promote the departmental policy that he becomes blind to the existence of the interest
of the private individuals. An administrator imbued with a fervour to push through government programmes may be an ideal
official. But he will be a bad judge, his defeat is bias of a very subtle variety called ‘official bias’. Official bias is now tolerated
in England as ‘some risk of bias is inseparable from the machinery which Parliament has set up’.1 In India ‘official bias’ is not
tolerated by courts even if it is sanctioned by statute. In this connection the following observations of Subba Rao J in Gullapalli
Nageswararao, are noteworthy:

It is not out of place here to notice that in England the Parliament is supreme and, therefore, statutory law, however repugnant to the
principles of natural justice, is valid; whereas in India, the law made by Parliament or a state legislature should stand the test of
fundamental rights declared in P art 3 of the Constitution. 2

The relevant question is whether the officer, when he comes to make his decision, genuinely addresses himself to the question
with a mind which is open to persuasion.3 Normally, the quasi-judicial and administrative bodies have some predisposition or
interest with regard to the special matters which they administer. In the language of Schwartz:

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The prime aim of administrative justice is, paradoxically, not justice at all, but the execution of the legislative policy embodied in the
enabling Act. The administrative agency cannot weigh disputes coming before it with the virgin mind of the judge. It is responsible for
the accomplishment of the policy embodied in the legislative scheme, and this may often predispose it in favour of certain results in the
cases which come before it.4

The Supreme Court drew a distinction between the policy bias where an official, who is the repository of the power concerned
with policy making, hears the matter, and where the matter is heard by a minister. The proceedings will be vitiated in the
former case and not in the latter case, because in the former case the official is a part of the department, whereas the minister is
only primarily responsible for the disposal of the business pertaining to that department. This is illustrated in two decisions
known as Gullapalli Nageswara Rao’s cases. In Gullapalli Nageswara Rao v APSRTC (the first case), the inquiry into the
objections of the aggrieved persons against the scheme of nationalisation of road transport service by the home secretary of the
state (though the final decision was taken by the chief minister) was held to have been conducted in substance by one of the
parties to the dispute and was, therefore, violative of the principle against bias.5 In the latter case, viz, Gullapalli Nageswararao
v State of Andhra Pradesh (the second case), which was a sequel to the first case, the chief minister himself heard the
representatives of the objectors and the Road Transport Corporation and then passed the orders approving the scheme as
originally published. However, in this case, the same judge held that the position of the chief minister was quite distinct from
that of the secretary of the department because while the secretary was the head of the department and so a part of it, the
minister-in-charge was only primarily responsible for the disposal of the business pertaining to the department and he was not a
part of the department.6 This view does not appear to be correct. Another instance of departmental or official bias is where first
a person takes part in instituting the proceedings and then he sits to adjudicate upon the same proceedings. In such a case, he
will be combining the functions of a prosecutor and a judge. A typical instance of this is Mohammad Nooh, where in a
departmental trial against a police constable before a deputy superintendent of police, the deputy superintendent of police, who
conducted the inquiry, himself gave testimony. In other words, having pitted himself against, a witness of the constable, the
deputy superintendent of police vacated the judge’s seat and entered the arena as a witness. Having played the role of a witness,
he again sat as a judge on the proceedings. The Supreme Court invalidated the proceedings because the two roles could not
obviously be played by one and the same person. Speaking for the court, SR Das CJI held:

If it shocks our notions of judicial propriety and fair-play, as indeed it does, it was bound to make a deeper impression on the mind of
the respondent, as to the unreality and futility of the proceedings conducted in this fashion ... the rules of natural justice were completely
discarded and all canons of fair-play were grievously violated, by the deputy superintendent of police, ‘continuing to preside over the
trial. 7

Yet another instance of official bias is where any actions or utterances of the adjudicator savour of a pre-judgment. However, a
distinction may have to be made in this connection between pre-judgment of facts specifically relating to a party and pre-
conceptions or pre-dispositions about the questions of law, policy or discretion. Normally, in the former case the adjudicator
will be disqualified, while in the latter a greater leeway may be permissible. Another brand of official bias is where the mind of
the adjudicator abdicates its seat in favour of another’s mind. In other words, when instead of bringing his own mind to bear on
the subject for deciding the question before him, an adjudicator acts on the dictation of another, his decision will be tarnished
and shall be invalidated on the ground of official bias. It is with a view to obviate the possibilities and probabilities of official
bias that s s 7 to 7B of the Industrial Disputes Act provide that persons with judicial experience, either retired District Court
judges or High Court judges shall be appointed as the presiding officers of labour courts, industrial tribunals and national
tribunals and s 7C(a) provides that these officers must be ‘independent’ persons.

Audi Alteram Partem:

Hearing both the sides: The phrase ‘audi alteram partem’ was first formulated by St Augustine.8 This maxim means ‘hear the
other side’. Another maxim rendering the same idea is audiatur et altera pars which means ‘no man should be condemned
unheard.9 In the language of Prof. Wade:

It is fundamental to fair procedure that both sides should be heard: audi alteram partem, ‘hear the other side’. This is the more far-
reaching of the principles of natural justice, since it can embrace almost every question of fair procedure, or due process, and its
implications can be worked out in great detail. It is also broad enough to include the rule against bias, since a fair hearing must be an
unbiased hearing. .. 10

In its application to administrative law, as a ground for certiorari, this rule has had its own ebbs and flows. The classic
statement of this rule was formulated by Lord Loreburn in Board of Education, wherein he stated:

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The departments or officers of state who are under the duty of deciding or determining questions of various kinds...must act in good
faith and fairly listen to both sides, for that is a duly lying upon everyone who decides anything. But I do not think they are bound to
treat such a question as though it were a trial...they can obtain information in any way they think best, always giving a fair opportunity
to those who are parties in the controversy for correcting or contradicting any relevant statement prejudicial to their view. 11

These dicta, however, were not free from snags because the duty to observe audi alteram partem rule could still be subject to
important qualifications as the rules of natural justice are not rigid norms of unchanging content and their ambit may vary
according to the context. Some of these trends were reflected in a decision from Ceylon, viz, Nakkuda Ali. The judicial
committee of the Privy Council held that the controller of textiles although enjoined to act on ‘reasonable grounds’ while
revoking a licence was under no duty to act judicially; hence, compliance with the rules of natural justice was not necessary.
This view was founded on two reasons, (i) that certiorari could only be issued to an authority that was required to follow a
procedure analogous to judicial in arriving at its decision, and (ii) that the controller was not determining a question affecting
the rights of subjects, but was merely ‘taking executive action to withdraw a privilege.12 In Maneka Gandhi, Bhagwati J,
observed:

The audi alteram partem rule is not cast in a rigid mould and judicial decisions establish that it may suffer situational modifications.
The core of it must, however, remain, namely, that the person affected must have a reasonable opportunity of being heard and the
hearing must be a genuine hearing and not an empty public relations exercise.13

The scope of ‘the right to be heard’ has been discussed by the Privy Council in a case from Malaya, wherein Lord Denning
graphically stated the law:

If the right to be heard is to be a real right which is worth anything, it must carry with it a right in the accused man to know the case
which is made against him. He must know what evidences have been given and what statements have been made affecting him; and
then he must be given a fair opportunity to correct or contradict them.14

The rule of audi alteram partem is not confined only to conduct of strictly legal tribunals but is applicable to every tribunal or
body of persons invested with the authority to adjudicate matters involving civil consequences to individual.15 Hence, in
industrial adjudication the rule of audi alteram partem has not only been appliedto the orders or awards of the adjudicatory
authorities under the Industrial Disputes Act but has also been extended to domestic inquiries in the nature of disciplinary
proceedings as well.16 The requirements of audi alteram partem are : (a) Notice; (b) Reasonable Opportunity:

Notice:

The first requirement of the rule of audi alteram partem is that the persons who are likely to be directly affected by the decision
or proceedings should be given adequate notice of the proceedings so that they may be able to (i) effectively prepare their case
and to answer the case of the opponent, if any; (ii) make their representations; and (iii) appear at the hearing. Any proceedings
commenced without notice to the parties are likely to vitiate the resulting decision.17 The law requires that every person whose
civil rights are affected must have a reasonable notice of the case he has to meet.18 Notice must be real and definite,19 and must
give ample time to the parties without which they cannot be said to have been given a reasonable opportunity of being heard.20
Notice should, therefore, intimate the parties of the date and time of commencement of proceedings and also of the venue of the
proceedings.

Reasonable Opportunity:

The second requirement of the rule is that the parties whose civil rights are to be affected by a quasi-judicial authority must
have a reasonable opportunity of being heard in their defence. In the words of Lord Tucker LJ, in Russel,21 ‘whatever standard
of natural justice is adopted, one essential is that the person concerned should have a reasonable opportunity of presenting his
case’. What opportunity may be regarded as reasonable would necessarily depend on the practical necessity of a situation. It
may be a sophisticated full-fledged hearing or it may be hearing which is very brief and minimal; it may be a hearing prior to
the decision or it may even be post-decisional remedial hearing. The rule is sufficiently flexible to permit modifications and
variations to suit exigencies of myriad kinds of situations which may arise.22 In TR Varma, Venkatarama Ayyar J, observed:

Stating it broadly and without intending it to be exhaustive ...rules of natural justice require that a party should have the opportunity of
adducing all relevant evidence on which he relies, that the evidence of the opponent should be taken in his presence and that he should
be given the opportunity of cross-examining the witnesses examined by that party, and that no materials should be relied on against him

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without his being given an opportunity of explaining them.23

This statement of law postulates the following three requirements of fair opportunity or reasonable opportunity:

(i) the adjudicator should receive all the relevant material which a party wishes to produce in support of its case;
(ii) the evidence of the opponent, whether oral or documentary, should be taken in his presence; and
(iii) each party should have the opportunity of rebutting the evidence of the other by cross-examination or explanation.

Even if the provisions of the Indian Evidence Act or the technical rules of general law of evidence do not apply to the
proceedings before industrial tribunals, they are required to observe the rules of natural justice in the conduct of the
proceedings before them and if they do so, their decisions are not liable to be impeached on the ground that the procedure
followed was not in accordance with that which obtains in a court of law.24In other words, though these tribunals are not bound
by technical rules contained in the Indian Evidence Act, yet they cannot ignore the substantive rules which would form part of
the principles of natural justice. An instance where the proceedings before an industrial tribunal were held to be violative of the
rules of natural justice on account of the refusal of the tribunal to take evidence of a party is Technological Institute, in which it
was found that the tribunal had adjourned the case from time to time to enable the workmen to produce their evidence and had
allowed the case to drag on for about two years even after the union’s case was closed. Yet it sternly refused to give an
opportunity to the management to adduce evidence in support of its case and closed the case of the management suo motu and
proceeded to give its award. Furthermore, during the course of examination-in-chief of the accountant of the company by the
workmen, the statements produced by him were found to be incomplete and unsatisfactory and in that situation the
management undertook to furnish the necessary statements in order to enable that witness to give proper evidence before the
tribunal and those statements were supplied the very next day. Setting aside the award of the tribunal for violation of the rules
of natural justice, Vaidialingam J, deprecated this attitude of the tribunal and held:

Inspite of this helpful attitude adopted by the management it is rather regrettable that the tribunal should have closed the proceedings
very abruptly ...without permitting the appellant to produce evidence on its behalf, to say the least, this attitude of the tribunal is highly
arbitrary and unjust.25

Whether an adjournment in the circumstances of a case should or should not be granted, is in the discretion of the adjudicator.26
However, if in refusing to grant adjournment, the tribunal acts arbitrarily, it will be a violation of the rules of natural justice and
the award will be quashable on certiorari.27 Likewise, if the tribunal refuses to give an opportunity to a party to adduce
evidence, it would constitute violation of the rules of natural justice justifying judicial review of the resulting decision.28
Refusing to summon a witness as required by a party and arbitrarily closing the case, would tantamount to breach of the rules
of natural justice.29 If a party is not allowed to lead his evidence, there will be gross violation of the rules of natural justice and
the resulting order will be liable to be quashed. The reviewing court has to look to what actual prejudice has been caused to a
person by the supposed denial to him of a particular right. If no real injustice has been done to the petitioner,30 or where in spite
of the hearing given to the person concerned, the answer to the question involved is the same and cannot be altered by any
amount of persuasion or reasoning, the giving of so-called opportunity or giving a notice to that person would only be an empty
formality or an exercise in futility.31 In such cases the writ court will not interfere.

Even if all technicalities of the Evidence Act are strictly not applicable except in so far as s 11 of the Industrial Disputes Act
and the rules prescribed therein permit, it is inconceivable that the tribunal can act on what is not evidence such as hearsay. Nor
can a tribunal be justified in basing its award on copies of documents when the originals which are in existence and are not
produced and proved by anyone of the methods either by affidavit or by witnesses who have executed them, if they are alive
and can be produced. Again, if a party wants an inspection, it is incumbent on the tribunal to allow inspection, in so far as that
is relevant to the inquiry. The applicability of these principles is well recognised and admits no doubt.32 A mere leaning
towards the principles of natural justice will not justify the interference by the reviewing court.33 It is, therefore, not in every
case that failure to record all evidence sought to be tendered by the party would vitiate the proceedings. If, some evidence
immaterial or irrelevant to the inquiry is disallowed by the authority, the principles of natural justice will not be held to be
violated.34 For instance, where the tribunal did not take into consideration a document which was not placed on record, it was
held that there was no illegality requiring interference by the writ court.35

Fraud and Collusion:

The reviewing courts have an inherent jurisdiction to quash the orders or awards of tribunals if they have been procured by
fraud or collusion.36 In the words of Lord Denning, no judgment of a court, no order of a minister, can be allowed to stand if it
has been obtained by fraud.37 Hence, an order which has been obtained by fraud or on the strength of perjured evidence may be

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quashed by a writ of certiorari.38 However, the allegations of fraud are to be specifically pleaded and proved by relevant
evidence because normally the writ court will decline to quash unless it is satisfied that the fraud was clear and manifest and
was instrumental in procuring the impugned order.39 Fraud and collusion must, therefore, be established by way of an affidavit
as an evidence.

(e) Procedure and Practice

Power to Dismiss In Limine:

The High Court possesses the power to dismiss an application under Art 226 of the Constitutionin limine when it discloses no
substance. If the petition makes a claim which is frivolous, vexatious or prima facie unjust and may not be properly triable in a
petition invoking the writ jurisdiction, the court may decline to entertain the petition.40 Likewise, the court may also reject an
application in limine if it takes the view that the authorities whose acts were called in question had not acted improperly or if it
feels that the petition raised complicated questions of fact for determination, which could not be properly adjudicated upon in
writ proceedings. However, the discretion is judicial. The court, therefore, should not throw out a petition in limine, if a prima
facie case for investigation is made out.41 Where the order of the inferior tribunal is sought to be quashed as prima facie
violation of the rules of natural justice,42 or an order is impugned on the ground of violation of certain provisions of the
Constitution,43 or where a substantial question as to the interpretation of some of the provisions of the Constitution is
involved,44 or where there is an allegation of mala fides against the government or any of its officers,45 the High Court should
not dismiss the application without hearing on the point. Similarly, where prima facie it appears that a fundamental right has
been infringed, the petition should not be rejected in limine merely because evidence has to be taken on some disputed
questions of fact.46 In such cases, even if the affidavit filed by the petitioner is defective, the court should, instead of rejecting
the petition in limine, give the petitioner a reasonable opportunity to file a better affidavit.47 The writ court should generally
consider the materials which were made available to the tribunal and normally should not allow to place fresh or further
materials before it.48

Res Judicata:

In MSM Sharma, the Supreme Court held that the rule underlying the principle of res judicata is to give finality to a decision
arrived at after contest and after hearing the parties interested in the controversy. The question whether the previous decision is
right or wrong is absolutely immaterial in applying the doctrine of res judicata to a subsequent proceeding.49 In Daryao, it was
held that if a writ petition filed by a party under Art 226 is considered on merits as a contested matter and is dismissed, the
decision would continue to bind the parties unless it is otherwise modified or reversed in appeal or other appropriate
proceedings. In such a case, the Supreme Court will refrain from acting under Art 32 as it constitutes a comity between the
Supreme Court and the High Court. Hence where a party has already moved the High Court with a similar complaint and for
the same relief and failed, the Supreme Court would insist on an appeal to be brought before it and would not allow fresh
proceedings to be started under Art 32.50 From the decision rendered in Devilal Modi, the following principles emerge on the
circumstances in which the proceedings under Art 226 would operate as res judicata in a subsequent petition filed before the
High Court under the said Article:

(i) the principle of constructive res judicata applies with equal force to writ petitions under Art 226;

(ii) finality of decisions rendered by a court of competent jurisdiction is to be emphasised;

(iii) parties should not be made to fight twice over the same kind of litigation; and

(iv) a plea which could have been taken by a party in proceedings between him and his opponent, if not taken at the appropriate
time, that party should not be permitted to take the plea against the same party in a subsequent proceeding on the same cause
of action. 51

Though the principles of res judicata are not applicable to writ petitions, a plea cannot be barred on the principles of res
judicata in a subsequent proceeding, if the point was not expressly decided in the earlier petition which was founded on a
different cause of action, particularly when the subject-matter in the earlier proceedings was different.52 If a writ petition filed
by a party is considered on merits as a contested matter and is dismissed, the decision thus pronounced would continue to bind
the parties unless it is otherwise modified or reversed in appeal or other appropriate proceedings permissible under the
Constitution. It would not be open to a party to ignore that judgment. If the writ petition is dismissed not on merits but on some
preliminary point such as laches or alternative remedy etc, then the dismissal of the writ petition would not constitute a bar to a
subsequent petition.53 In Hoshnak Singh, the first writ petition of the petitioner was dismissed by a non-speaking order on the
ground that the petitioner had an alternative remedy by way of an appeal or revision under the statute. The petitioner filed a
second writ petition after pursuing the alternative remedy, which was again dismissed by the High Court on the ground that it
was barred by principles analogous to res judicata. The Supreme Court held that the second petition was not barred by res

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judicata, as the cause of action was entirely different and the earlier dismissal could not stand in the way of the petitioner
invoking the jurisdiction of the High Court.54 In Lal Chand, Venkatachala J, stated the law thus:

When a judge of single judge bench of High Court is required to entertain a second writ petition of a person on a matter, he cannot as a
matter of course, entertain such petition, if an earlier writ petition of the same person on the same matter had been dismissed already by
another single judge bench or a Division Bench of the same High Court, even if such dismissal was on the ground of laches or on the
ground of non-availing of alternate remedy. Second writ petition cannot be so entertained not because the learned single judge has no
jurisdiction to entertain the same, but because entertaining of such a second writ petition would render the order of the same court
dismissing the earlier writ petition redundant and nugatory, although not reviewed by it in exercise of the recognised power. Besides, if
a learned single judge could entertain a second writ petition of a person respecting a matter on which his first writ petition was
dismissed in limine by another learned single judge or a Division Bench of the same court, it would encourage an unsuccessful writ
petitioner to go on filing writ petition after writ petition in the same matter in the same High Court, and have it brought up for
consideration before one judge after another. Such a thing, if is allowed to happen, it could result in giving full scope and
encouragement to an unscrupulous litigant to abuse the process of the High Court, exercising its writ jurisdiction under article 226 of the
Constitution in that any order of any bench of such court refusing to entertain a writ petition could be ignored by him with impunity and
relief sought in the same matter by filing a fresh writ petition. This would only lead to introduction of disorder, confusion and chaos
relating to exercise of writ jurisdiction by judges of the High Court for there could be no finality for an order of the court refusing to
entertain a writ petition. It is why, the rule of judicial practice and procedure that a second writ petition shall not be entertained by the
High Court on the subject matter respecting which the first writ petition of the same person was dismissed by the same court even if the
order of such dismissal was in limine, be it on the ground of laches or on the ground of non-exhaustion of alternate remedy, has come to
be accepted and followed as salutory rule in exercise of writ jurisdiction of courts. 55

On a parity of reasoning, the principle of constructive res judicata would also apply to writ proceedings,56 when the subsequent
writ petition is based on the same cause of action on which the earlier petition was based.57 Normally, where a writ petition is
allowed to be withdrawn without going into its merits, the decision would not constitute res judicata. However, while allowing
the withdrawal of the petition, the court renders a decision on a consideration of the merits of the case, such a decision would
constitute res judicata.58 This principle is applicable when the order is a speaking order and on merits, even if the petition is
dismissed in motion without hearing the other side.59 In Gulabchand,60 the issue as to the circumstances in which a decision
rendered under Art 226 would operate as res judicata in a subsequent suit was considered. It was held that the decision in an
earlier writ petition on merits would bar a subsequent suit involving the same question and for the same relief on general
principles of res judicata. The question, whether the decision of a High Court on a certain point in a writ petition under Art 226
would constitute res judicata in a subsequent appeal under Art 136 was considered by the Supreme Court in Northern Rly CCS,
where Bhargava J observed:

When exercising jurisdiction under article 226 of the Constitution, the High Court does not hear an appeal or revision. The High Court
is moved to intervene and to bring before itself the record of a case decided by or pending before a court or tribunal or any authority
within the High Court’s jurisdiction. A petition to the High Court invoking this jurisdiction is a proceeding quite independent of the
original controversy. The controversy in the High Court, in proceedings arising under article 226, ordinarily is whether a decision of, or
a proceeding before a court or tribunal or authority, should be allowed to stand or should be quashed for want of jurisdiction or on
account of errors of law apparent on the face of the record. A decision in the exercise of this jurisdiction, whether interfering with the
proceeding impugned or declining to do so, is a final decision in so far as the High Court is concerned because it terminates finally the
special proceeding before it. 61

The technical rule of res judicata, although a wholesome rule based upon public policy, cannot be stretched too far to bar the
trial of identical issues in a separate proceeding merely on the assumption that the issues must have been decided. When a writ
petition is dismissed either at the threshold or after contest without expressing any opinion on merits, no issue could be deemed
to have been decided and any other remedy of suit or other proceedings will not be barred by res judicata. In the absence of a
speaking order, it would not be easy to decide what factors weighed in the mind of the court, and that it would be unsafe to hold
that such a summary dismissal would constitute a bar of res judicata against a similar petition filed under Art 32.62 In this
regard, Ahmedabad Mfg Co, is an authority for the proposition that an order of the Supreme Court permitting to withdraw a
petition for special leave unconditionally, would not amount to its dismissal.63 In Paschimbanga TMKS, the Calcutta High
Court has stated the following principles:

(1) the power of the principles of res judicata does not affect the jurisdiction of the court and the plea of res judicata can never
be a jurisdictional question;

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(2) the plea of res judicata can be waived and if a party does not put forward the plea of res judicata in a suit or proceeding, he
must be taken to have waived it; and
(3) in the case of conflicting decrees, orders or decisions between the parties occasioned by non-raising of the plea of res
judicata in the subsequent suit or proceeding, the last of the two conflicting decrees or decisions shall prevail on the ground
that in the eye of law, the last one is binding between the parties.64

Where the writ petition filed by a workman whose services were terminated was dismissed granting liberty to the workman to
take his grievance before the appropriate forum, it could not be said that the writ petition was decided on merits, and hence
such summary dismissal of writ petition does not constitute res judicata so as to bar the reference of dispute.65 In Thiagarajan,
the facts were: An application filed by the employee under s 33C(2) was dismissed by the sixth labour court as not
maintainable on the ground that, on the basis of oral and documentary evidence adduced, he was not a workman within the
meaning of s 2(s). The management thereafter filed the aforesaid order before the first labour court, which was trying a
reference made for the reinstatement of the said employee, and contended that in view of the fact that the employee had not
challenged the said order of the sixth labour court holding that he was not a workman, the said issue had become res judicata,
and that the first labour court was bound by the said decision. The first labour court accepted the said order of the sixth labour
court and recorded its findings that the question of workman had become res judicata and rejected the reference on that point as
not maintainable. The Bombay High Court upheld the view of the first labour court and observed that the issue was finally
determined between the same parties by a competent forum and that the first labour court could not have taken any other
view.66 Where a reference pertaining to promotion, pay-scale fixation, orientation, etc, was decided against the workmen and
another reference was made on similar issues, which was opposed on grounds of res judicata, it was held that the tribunal
dealing with the second reference was in error to have decided the matter after having found it to be barred by res judicata.67

Parties:

In Charanjit Lal, the Supreme Court held that the rights that could be enforced under Art 32 must ordinarily be the rights of the
petitioner himself who complains of infraction of such rights.68 A writ is issued in favour of a person who has some right and
not for sake of roving inquiry leaving scope of manoeuvring.69 Hence, the aggrieved party has to show that he has a legal right
which entitles him to any of the directions, orders or writs, etc, mentioned in Art 226 and that such right has been infringed.70
But different considerations arise when a trade union moves under Art 226 of the Constitution against an award made by an
industrial tribunal.71 Where a trade union espouses the cause of workmen, it will be entitled to file a writ petition when the
award goes against the workmen.72 A minority trade union aggrieved by a settlement arrived at between the management and
the majority union which will be affected by the settlement in view of s 18(3), will be an aggrieved party and have locus standi
to challenge the settlement by a writ petition.73 A writ petition against illegal retrenchment of workman by a service association
representing the employees has been held to be maintainable.74 Likewise, a writ petition by the Association of Tehsil Mohurrirs
vindicating rights or claims on behalf of or common to Tehsil Mohurrirs has been held to be maintainable.75 However, where
the grievances of the members of a ‘trade union or an association’ are of individual and personal nature, it would not give the
union or association the locus standi to move the High Court by a writ petition.76 Labour courts, industrial tribunals and
national tribunals are amenable to certiorari.77 Hence, certiorari can be issued to a High Court judge acting as a special
industrial tribunal constituted under the Industrial Disputes Act.78 An arbitrator under s 10A is amenable to the writ jurisdiction
of the High Court.79 A conciliation officer acting under s 12 is not amenable to the writ jurisdiction,80but the order of the
conciliation officer acting under s 33 of the Industrial Disputes Act being a quasi-judicial order, would be amenable to judicial
review by the writ court. A necessary party is one without which no order can be made effectively; a proper party is one in
whose absence an effective order can be made but whose presence is necessary for a complete and final decision on the
questions involved in the proceedings.81 But a party is a necessary party only if he is likely to be aggrieved or his right
prejudicially affected by grant of relief to the petitioner and the relief cannot, therefore, be granted without hearing such party.82
The following are necessary parties to a proceeding for certiorari:

(1) The inferior tribunal or an authority against whose order or award relief is sought.83

(2) Any other authority in whose possession the record remains.84

(3) Any person who is interested in maintaining the regularity of the proceedings out of which the petition arises or would be
affected by the decision of the court.85
(4) Where the order of an authority is subject to confirmation by another body, the latter is not a party, for, on confirmation, it is
the order of the initial authority which becomes effective.86 But the position would be otherwise, where the final order has
been passed on review or appeal by a superior authority. In such a case, if the superior authority is not impleaded, no relief
can be given to the petitioner.87

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(5) Where apart from the order or award of the tribunal, the order of reference is challenged, the appropriate government would
also be a necessary party.

A writ cannot be issued against a person who is not impleaded as an opposite party to the proceedings,88 and no party other than
those who are impleaded would be bound by an order of the High Court made in the writ proceedings.89 Therefore, in an
application under Art 226, all persons must be made parties who are or likely to be affected by the issue of a writ or order.90
The fact that the number of persons likely to be affected is large is no ground to dispense with their being impleaded.91 For
instance, in Teen Ali Tea Estate, the petitioner had challenged the order of reference of a dispute relating to the termination of
some workmen as illegal and mala fide, but the workmen whose termination was the subject-matter of the dispute were not
made parties. The Gauhati High Court held that the writ petition was not maintainable.92 Where the workmen demands some
benefits from the management, the management will be widely affected by an order of the court. Therefore, the management in
such a case would be a proper party and any relief obtained by the workmen having a bearing on the interests of the
management, in its absence, will not bind the management as the absence of the management would vitiate the proceedings.93
The authorities whose orders are sought to be quashed and also persons interested in maintaining legality or regularity of
proceedings of authorities should be added as parties to a writ petition.94 Where there are allegations of mala fides or bias
against some persons or officials in a writ petition, such allegations cannot be heard unless such persons are made parties to the
petition and thus given opportunity to rebut those allegations.95

Any party likely to be affected by a writ or order may appear at the hearing (or make a prior application) and ask for leave to
join the proceedings or for rule nisi to be served upon it. The court in appropriate case may order that the writ petition be
amended by addition of parties, if a necessary party or a party likely to be affected by the writ or order or a party whose
presence may be necessary to make the writ effective, is not before the court, either on an application made for that purpose, or
of its own motion. The court may direct that such a party be added and the rule nisi be served upon him, or simply that rule nisi
be served upon him or even that he may be permitted to be present at the hearing without being served with a rule nisi. Such
amendments, should, however, ordinarily be done upon a notice to the party proposed to be added. And upon an amendment of
this nature being affected, directions should be given for the use of affidavits or additional affidavits.96 However, merely
because certain questions will have to be determined incidentally in giving or not giving the reliefs asked for, the court does not
make each and every person interested in such questions as necessary parties to such proceedings.97 For instance, in Vijay Singh
Mehta, the Rajasthan High Court held that the trustees of the provident fund and the gratuity fund were not necessary parties.
They could only be proper parties because on account of the relevant regulations of the bank, the liability of the bank could not
cease on transfer of the fund to the trust and the bank was bound to discharge its solemn obligation to see that the payment of
the provident fund and gratuity are made to its employees.98 In challenging the award of an Industrial tribunal before a writ
court, no doubt such tribunal will be a necessary party but the appropriate government will not always be a necessary party to
the writ proceedings.99

The appropriate government will, however, be a necessary party when apart from the validity of any order or award of the
tribunal, the order of reference is also challenged. When an order of assistant labour commissioner under r 61(4) of the
Industrial Disputes (Central) Rules 1957, directing recognition of some workers as ‘protected workmen’ is challenged by a writ
petition, without asking for any relief against those workmen, and the trade unions on whose representations that order has been
passed are parties to the writ petition, the petition can be decided in the absence of those workmen as the unions are already
parties; such ‘protected workmen’ are not necessary parties to the petition.1Likewise, when the writ court is not examining the
competence of the appropriate government directly or of the subjective satisfaction of the government before it exercises the
power conferred upon it under s 10 of the Industrial Disputes Act, but the correctness of a finding given by the tribunal on the
question of jurisdictional facts, it is not necessary to make the concerned government a party to a writ petition.2 Similarly, the
non-joinder of Union of India would not be fatal to the petition where the general manager of the railway who is an ‘employer’
within the meaning of s 2(g) has been made a respondent.3 But a joint application would lie where the applicants are aggrieved
by a common order.4 The number of writs to be filed against an order or award of an authority or tribunal will depend upon the
nature of the order or award and its effect on the parties. The rule is that persons having a common joint interest in the subject-
matter in controversy may be joined as relators while those having separate and district rights may not.5 However, each
aggrieved person must file independent petitions for relief. Joint petitions by several aggrieved persons for relief although
based on a common objection to an order or award of an authority would not lie.6

Where similar disputes between several establishments and their workmen were referred by a single notification to an industrial
tribunal for adjudication, a single writ petition by the establishments for a writ of prohibition was held not to be maintainable.
Likewise, where the interests of the petitioners though similar, are not joint or the same, a single writ petition would not lie.7
On the other hand, where the service of the petitioners were terminated by one and the same order, a single writ petition would
be maintainable.8Similarly, a single writ petition against the order refusing to approve the action of the management dismissing
a number of its workmen under s 33(2) of the Industrial Disputes Act, would be maintainable because the action is one and the
same. Therefore, the cause would also be the same.9 In Transport Corpn, against a common award of the industrial tribunal, 28

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employers filed separate writ petitions while certain other employers covered by the award, did not file petitions though notices
of the 28 petitions were given through the newspapers by the petitioners. In the circumstances, the Bombay High Court held
that the petitions before it were not valid simply because other employers had not filed writ petitions.10

Pleadings:

The allegations and averments in the petition should not be vague or indefinite.11 A person, taking one position in his pleadings
before lower authorities against the impugned order, will not be allowed to take inconsistent stand in his petition for a writ.12
The allegations of fraud must be specifically stated and full particulars in clearest possible terms must be furnished.13 Bad faith
or ill-will is not to be held established except on clear proof thereof, even though such proof need not necessarily be by direct
evidence alone but may be deduced as a reasonable and inescapable inference from proved facts.14 The grounds, which were
taken before the tribunal and dealt with, can only form the subject-matter of a writ petition under Art. 226 and 227 of the
Constitution.15 After setting out the grounds, the petitioner must make the prayer in specific and precise form showing as to
what writ, order or direction he seeks for redressing a wrong which affects him.16 In reply to the writ petition, the opposite
party or parties have to file the return in the form of a counter-affidavit. The counter-affidavit has to be filed by a person who
dealt with the matter in dispute and not by any other person having no concern with the matter. In other words, it should be a
person in a position to speak from personal knowledge.17 If the counter-affidavit denies the facts stated and averments made in
the writ petition on the basis of some material, the petitioner has to controvert such averments by a rejoinder affidavit. If,
however, the averments or allegations made in the writ petition, are not specifically denied or traversed in the counter-affidavit,
the presumption will be in favour of the correctness of such averments etc.18 But if the petitioner does not file any rejoinder
affidavit challenging the correctness of the statements in the counter-affidavit nor files any documents in support of the
petition, the High Court may accept the uncontroverted statements made in the counter-affidavit to be correct.19 The law allows
a party to take any defence which is open to him. In exercise of its jurisdiction in a writ petition, the court can look into any of
the documents referred to in the order itself or the pleadings which initiated the proceedings.20

New Plea:

The jurisdiction of the High Court under Art 226 is not of appellate nature. Hence, it will not permit a party to raise an entirely
new point which was not canvassed before the lower tribunal, for the first time before it.21 It is well-settled that an allegation
which is not pleaded cannot be examined because the other side has no notice of it, and if entertained, it would tantamount to
granting unfair advantage to the other side.22 Even if a point involving a question of fact is raised before the tribunal but has not
been proved by leading relevant evidence before it, it cannot be permitted to be raised before the writ court for decision.23
Likewise, where the point, that the workman was not given adequate opportunity to examine certain witnesses before the
inquiry officer was not pleaded nor was it argued before the industrial tribunal, the High Court would not permit to urge this
point in the writ petition.24 On the same principle, a plea which was raised before the tribunal, but not pressed before it, cannot
be raised before the High Court in its writ jurisdiction.25 Hence, the High Court will not upset the award of a tribunal on a point
not raised or argued before it which it had no occasion to decide.26 Similarly, if an objection that could be validly raised before
an industrial tribunal was not raised, it cannot be raised in the writ petition.27 Likewise, the question of maintainability of the
reference based on the contention that the dispute was not espoused by the union, being a question involving the termination of
service was not permitted to be raised before the writ court for the first time.28 Similarly, the question of loss of confidence
which involves the questions of fact, if not pleaded before the industrial tribunal, cannot be deemed to be raised before the writ
court.29 ‘When a party does not claim any privilege with respect to certain documents, the plea of privilege cannot be allowed
to be raised at the stage of the argument.30 A new point, which the opposite side had no opportunity to meet, cannot be allowed
to be taken in the writ petition.31 A pure question of law which arises on the admitted or proved facts, though not specifically
raised, may be permitted to be canvassed by the High Court.32For instance, where the objection relates to the constitutional
validity of a provision of the Act or the rules thereunder or affects the petitioners’ fundamental rights, such a point can be
raised for the first time in the High Court.33

The objections to the jurisdiction are generally of two types, viz, latent lack of jurisdiction and patent lack of jurisdiction. The
former are those objections which depend upon the determination of certain facts by the tribunal which are known as
jurisdictional facts. For instance, where the plea is that the activity of a particular establishment is not ‘industry’ or the dispute
in question is not an ‘industrial dispute’ or the workman concerned is not a ‘workman’ or the government making the reference
is not the ‘appropriate government’ etc, such points must be raised before the tribunal in the first instance. If these points have
not been raised before the tribunal, they cannot be validly raised before the writ court. If this type of objection is not taken
before the tribunal, the party raising them has to satisfy the High Court that he was unaware of the defects in jurisdiction and
that is why it was not taken,34 and the High Court in its discretion may refuse relief if the party by its own conduct had
disentitled itself to it.35 The latter type of objections relate to the inherent lack of jurisdiction, for instance, the constitutional
validity of the Act or the rules thereunder or the constitution of the tribunal itself. Such points cannot be validly raised before or
decided by a tribunal. Therefore, such points can always be taken before a writ court.36 Similarly, where on the uncontroverted
facts on record, the authority has no jurisdiction to deal with the matter, the petitioner cannot be debarred from raising the point

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of jurisdiction in the writ petition.37 In such cases, the omission by a party to raise the objection as to jurisdiction will not clothe
the tribunal with jurisdiction.38 For instance, an objection that the government making the reference is not the ‘appropriate
government’, can always be raised before the High Court for the first time.39 Neither submission to jurisdiction nor
acquiescence of the parties nor their taking part in the proceedings will debar them from taking the plea, before the High Court,
that the award of the tribunal is without jurisdiction.40 In other words, where the question of jurisdiction goes to the root of the
jurisdiction of a tribunal, the absence of jurisdiction cannot be waived by any amount of consent of the litigant. Therefore, the
business of a supervisory court, whether under Art 226 or Art 227, is to keep the statutory tribunal within its limits. Moreover,
it cannot throw out a petition on the ground that such objection was not taken before the tribunal.41

Evidence:

The writ court normally will not go into disputed questions of fact. However, the basic facts have to be established by the
petitioner. The opposite parties may admit or traverse such facts. The court will proceed on the basis of the uncontroverted
facts. The facts, generally, are averred to by the petitioner by swearing an affidavit in support of them.42 When a person swears
an affidavit in a case which does not concern him, he must explain how he became acquainted with the events and the
happenings which ordinarily did not appear to concern him.43 The facts stated and averments and allegations made should be
admitted or controverted by the opposing parties by filing return counter-affidavits and where no counter-affidavit is filed, the
facts stated and the averments and allegations made in the writ petition supported by an affidavit will have to be accepted as
true.44 Where the return filed by the opposing party is not in the form of an affidavit, such return will not be a valid return and it
need not be taken into consideration.45

Costs:

The normal principle of law is that costs must follow the event.46 This rule would apply to proceedings under the writ
jurisdiction as well unless of course some special reason can be shown for making an order otherwise.47 The conduct of the
parties is an important factor in making the order of costs.48 For instance, in RK Anand, the Delhi High Court awarded costs of
litigation against the Central Government as it found that the government was to be blamed for its inaction.49 Where the
petitioner himself is partly at fault resulting in the impugned order being quashed by the High Court and the authorities acted
bona fide, the court will usually order the parties to bear their own costs.50 In Sophia Reuben, where the collector, who had a
statutory duty under s 33C(1) of the ID Act to recover the amounts due under a certificate issued by the labour court, did not
take any steps for the recovery of the amount for nearly a year in the matter until the workmen were driven to file a petition for
a writ of mandamus, after which he collected the amount; in these circumstances, the High Court ordered the collector to pay
the costs of the writ proceedings personally.51

Appeals:

It is now well settled that an appeal will lie to a Division Bench from the order of a single judge in an application/petition under
Art 226 provided such order constitutes a ‘judgment’ within the meaning of the letters patent.52 The writ-appeal is limited in
scope. The appeal court has the same jurisdiction as the single judge while dealing with the petition in the first instance in
issuing or refusing to issue a writ, direction or order under Arts 226 or 227 on the basis of well recognised principles. The
appellate court normally will not interfere with the discretion of the single judge unless it finds that the exercise of the
discretion is erroneous or improper and not consistent with the well recognised principles of law in issuing the writs.

Relief:

The jurisdiction of the writ court under Arts 226 & 227 is confined not only to the narrow precincts of quashing the impugned
order on certiorari but it can also modulate its order so as to grant the appropriate relief because the jurisdiction of the court
does not come to an end as soon as the impugned order is quashed.53 In a case where the service of the workman has been
terminated by a verbal order and there is no such order in writing, the court can direct the employer to reinstate the workman in
service on finding the termination of the service to be illegal.54 It will be open to the writ court to pass proper order under s
11A, in a case where the tribunal did not consider the facts of the case and refused to exercise its powers under s 11A resulting
in failure of justice.55

(ii) Mandamus

Mandamus literally means a command. It differs from the writ of prohibition or certiorari in its demand for some activity on
the part of the body or person to whom it is addressed.56 The order of mandamus is of most extensive remedial nature, and is, in
form, a command issued by the High Court of justice, directed to any person, corporation, or inferior tribunal, requiring him or
them to do some particular thing therein specified which appertains to his or their office and, in the nature of a public duty. Its
purpose is to remedy defects of justice; and accordingly it will be issued, to the end that justice may be done, in all cases where
there is a specific legal right and no specific legal remedy for enforcing that right; and it may be issued in cases where,

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although there is an alternative legal remedy, yet that mode of redress is less convenient, beneficial and effectual’.57 In other
words, mandamus is a coercive and not a corrective writ; it stimulates the lethargic into action; it commands performance, not
resistance. It cannot lie to restrain action.58Mandamus is the most valuable and essential remedy in the administration of justice,
but it can only be resorted to, to supply the want of some more appropriate ordinary remedy. Its purpose, as generally used, is
to compel corporations, inferior tribunals or public officers to perform their functions, or some particular duty imposed upon
them, which in its nature is imperative, and to the performance of which the party applying for the writ has a clear legal right.
The process is extraordinary, and if the right be doubtful, or duty discretionary, or of a nature to require the exercise of
judgment, or if there be any ordinary adequate legal remedy to which the party applying could have recourse, this writ will not
be granted. The application for the writ being made to the sound judicial discretion of the court, all the circumstances of the
case must be considered in determining whether the writ should be ‘allowed unless the court is satisfied that it is necessary to
secure the ends of justice, or to subserve some just or useful purpose’.59 It is, however, not necessary that the person or the
authority on whom the statutory duty is imposed need to be a public official or an official body. A mandamus can be issued, for
instance, to an official of a society to compel him to carry out the terms of the statute under or by which the society is
constituted or governed and also to companies or corporations to carry out the duties placed on them by the statutes authorising
their undertakings.60 But the writ court cannot, by mandamus compel an inferior tribunal to exercise a jurisdiction which it does
not possess.61 Normally, a writ of mandamus is not issued to or an order in the nature of mandamus is not made against a
private individual. Such an order is made against a person directing him to do some particular thing, specified in the order,
which appertains to his office and is in the nature of a public duty.62 So long as the duty that is sought to be performed is in the
nature of a public duty, it is not necessary that the person or the authority on which the duty is imposed should be a public
official or an official body.63 A writ, order or direction in the nature of a writ of mandamus can be issued in the case where
there is a statutory duty imposed upon an authority and there is a failure on the part of that authority to discharge that statutory
obligation.64

Requirements of Mandamus:

Mandamus cannot be issued unless the following requirements are satisfied:

(1) The applicant must have a legal right to the performance of a legal duty.65

(2) The applicant must further have the legal right to enforce performance of the duty.66

(3) The duty should be imposed by law on the respondent and such duty should be of an imperative ministerial character
involving no judgment or discretion on the part of the respondent.67
(4) The applicant must have made a definite demand of justice and there should be a definite refusal by the respondent and the
fact of such demand and refusal must be set out in the petition.68
(5) The applicant must act in good faith and not for some ulterior purpose or for the benefit of a third party,69 and should not
suppress or mis-state material facts in the application.70
(6) The applicant should not have been guilty of laches or unexplained delay.71

(7) Remedy of mandamus should not have become futile or ineffective.72

(8) The applicant should not have approached the court in mere anticipation of an authority doing something to his prejudice.73

(9) Irregularity complained of, not affecting jurisdiction, should have resulted in failure of justice.74

(10) The petition should not involve complicated question of fact in respect of title to property.75

Alternative Remedy:

Judicial remedies are not meant to short-circuit or circumvent statutory procedures. It is only where statutory remedies are
entirely ill-suited to meet the demands of the extraordinary situations as, for instance, where the very vires of the statute is in
question or where private or public wrongs are so inextricably mixed up and the prevention of the public injury and the
vindication of public justice requires it, then recourse may be had to such remedies. But the court must have good and sufficient
reason to bypass the alternative remedy provided by the statute.76 Normally, if the petitioner has no other specific legal remedy
which is adequate to afford complete relief and if there would be failure of justice if the aid of the writ court is not extended,
remedy by way of mandamus may be invoked.77 Likewise, when a party alleges the breach of his fundamental rights, his way
will not be barred by the rule that when there is an adequate remedy, a prerogative writ will not issue.78 The person claiming
the relief by a writ of mandamus must plead and prove that the remedies available under the Industrial Disputes Act are not
adequate and efficacious. In the absence of such plea and proof, a writ petition for mandamus will not be maintainable.79 The
basic rule is that only a person who has the right to enforce performance of public duty may apply for mandamus.80 In other

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words, it is necessary, that the person claiming a writ of mandamus must have a legal right to the performance of a legal duty
by the one against whom the writ is sought.81

In the words of Prof. de Smith, ‘Mandamus lies to secure the performance of a public duty, in the performance of which the
applicant has a sufficient legal interest’.82 Hence, an application for mandamus will not lie for an order of reinstatement to an
office which is essentially of a private character nor can such an application be maintained to secure the performance of
obligations owed by a company towards its workmen or to resolve private disputes.83 But once the dispute relating to
termination of service of a workmen claiming reinstatement is resolved by an award of the Industrial tribunal ordering his
reinstatement with backwages, it confers a legal right on the workman to be so reinstated and a corresponding obligation is
imposed on the employer to take steps to implement the award. Therefore, the workman has the right to seek a writ of
mandamus against the employer to implement the award of reinstatement with continuity of service and backwages.84 The
words ‘any person or authority’ are not confined to the statutory authorities and instrumentalities of the state, but include any
other person or body discharging public duty. There are, however, two exceptions to this rule, viz, if the rights are purely of a
private nature, no mandamus can be issued and similarly if the authority is purely a private body with no public duty,
mandamus cannot be issued. The public duty is to be judged in the light of the obligation, whether statutory or otherwise,
imposed upon the person or authority for the benefit of the affected party.85 In this connection Shetty J, speaking for the
Supreme Court in Anandi Mukta Trust, has stated the law with clarity and precision:

The words ‘any person or authority’ used in Art 226 are, therefore, not to be confined only to statutory authorities and instrumentalities
of the state. They may cover any other person or body performing public duty. The form of the body concerned is not very much
relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of the positive obligation
owed by the person or authority to the affected party. No matter by what means the duty is imposed. If a positive obligation exists
mandamus cannot be denied...Here again we may point out that mandamus cannot be denied on the ground that duty to be enforced is
not imposed by the statute...judicial control over the fast expanding maze of bodies affecting the rights of the people should not be put
into watertight compartments. It should remain flexible to meet the requirements of variable circumstances. Mandamus is a very wide
remedy which must be easily available ‘to reach injustice wherever it is found.86

A single judge of the Andhra Pradesh High Court in Gattaiah, has held that a writ of mandamus can be issued to a company
registered under the Companies Act to compel it to carry out the statutory requirements of s 25N of the Industrial Disputes Act.
He further observed that the requirements of chapter V-B are in the nature of ‘public duty’ in laying-off or retrenching
workmen.87 In a later case, in EID Parry,88another single judge of the same High Court observed that s 33 of the Act creates a
statutory mandatory obligation upon the employer not to-alter the conditions of service of the workmen concerned in a dispute
pending before the conciliation officer, board, arbitrator, labour court, tribunal or national tribunal, to their prejudice. Hence, if
such alteration is proposed or is likely to take place, the writ court would be ‘perfectly justified in issuing a writ of mandamus
commanding the employer to abide by the said statutory mandatory obligation’. However, in view of the fact that there was no
pendency within the meaning of s 33(1)(a), the court held that there was no occasion for issuing a writ directing the
enforcement of the statutory mandatory obligation. But in this case, the court did not give any reasons for its view. Nor did it
even suggest that a public duty is cast on the employer by the provisions of s 33 of the Act. Another single judge of the same
High Court in IDL Chemicals held that a writ petition against a company is maintainable, even though it is not ‘state’, if there is
a violation of the statutory duties under s 33 of the Act. Accordingly, the court issued a writ of mandamus to the company for
breach of s 33 and declined permission to the company to justify its action resulting in breach of s 33 in the writ proceedings.89
Even in this case, the court did not give any reasons for the maintainability of a writ petition against a company except relying
on Gattaiah.

Similarly, the Gujarat High Court held that the word ‘person’ in Art 226(1) and also in s 3(42) of the General Clauses Act
1897, as provided by Art 367 of the Constitution would cover the companies, who are required to comply with the
requirements of s 25FFA, s 25FFF or s 25O which are the statutory obligations or public duties and not private duties or
obligations. In this case, the court held that the wholesale termination of service of the employees without complying with the
requirements of s s 25FFA and 25FFF of the Industrial Disputes Act was ineffective, inoperative and invalid in law.90 On the
other hand, the Delhi High Court in National Seeds, held that non-compliance of the statutory requirements of s 9A of the Act
did not entitle the workman to claim a writ of mandamus against the company. The court observed that there is no statutory
obligation on a company incorporated under the Companies Act to follow s 9A in the manner in which there will be a statutory
obligation on a company to comply with the provisions of the statute which brings it into existence.91 The Bombay High Court
in Scindia Steam Navigation, did not lay down any new principle but only gave effect to the established principle that if there is
any statutory duty cast upon an individual that will be enforced under Art 226. The Bench observed:

It is now well-established that the mandamus lies to secure the performance of the public or statutory duty though it is not necessary that
the person or authority on whom the statutory duty is cast need be a public official or an official body. If it is found that the company
has some obligation to perform a statutory or a public duty, then it may not be possible to contend that no writ can be issued to the

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company merely because it is a company registered under the Companies Act to enforce the performance of the public duty or the
statutory duty.92

In view of the fact that the ‘settlement’ as defined in s 2(p) though binding under s 18 of the Act, is not an instrument creating a
statutory right or obligation, the High Court declined to issue a writ of mandamus. It further observed that when it is said that
mandamus will issue for the enforcement of a public duty, then as observed by Garner,93 ‘the duty which it is sought to enforce
by order of mandamus must be of a public nature’. In Ganesh Dutt,94 it was held that Maruti Udyog Ltd was not an
instrumentality of the state, and hence was not amenable to writ jurisdiction. Where the Union challenged the closure of a
textile mill under s 25FFA by filing a writ petition under Art 226, it was held that the employer, not being a State within the
meaning of Art 12, was not amenable to writ jurisdiction and no relief could be granted in a petition under Art 226.95 A single
judge of Calcutta High Court held that the refusal of the application for approval of dismissal under s 33(2)(b) does not have
the effect of transforming a contractual liability into a statutory liability, and hence no writ can lie against the employer.1 In
Narkesari Prakashan, the Supreme Court held that the appellant could have availed of the remedy of a reference as provided in
sub-s (6) of s 25N, against an order granting permission to retrench under s 25N ; that the appellant, having chosen the remedy
of moving the High Court under Art 226, could not therefore be heard to make a grievance that the High Court should not have
gone into the merits of that contention.2

In Anaimalai NEW Union, Sivasubramaniam J of the Madras High Court held that a writ could be issued against a private
company, if it violates statutory or public duties or indulges in monstrous activities.3 This decision induces grave
misconceptions about the writ jurisdiction of High Courts vis-`a-vis the distinction (or, the absence of it) between a ‘statutory
duty’ and a ‘public duty’, as the above observation has placed statutory duties on the same footing as ‘public duties’ alongside
‘monstrosities’. In the words of Prof. de Smith, ‘Mandamus lies to secure the performance of a public duty, in the performance
of which the applicant has a sufficient legal interest’.4 In Gattaiah (supra), where similar question arose in relation to chapter
V-B, PA Chowdary J of Andhra Pradesh HC issued a writ of mandamus directing the company to reinstate the workmen, as the
management did not obtain prior permission under s 25N before retrenching the workmen.5

A contractual obligation between the employer and an employee can hardly be said to have the character of a public nature. It is
purely a private contract between two parties to the agreement, namely, the employer and the employee. In Roche Anglo-
French,6 the Bombay High Court held that the company had no public duty in complying with the requirements of s 33(2) and
non-observance of the provisions of that section would not entitle the High Court to issue a writ of mandamus. The crux of the
law relating to the writ of mandamus is that mere breach of statutory duty will not entitle the aggrieved party to a writ of
mandamus. The statutory duty must also be a ‘public duty’. If a duty though statutory, is not a ‘public duty’, no mandamus can
be issued. If the view of the Andhra Pradesh High Court that mere breach of statutory obligation will call for a writ of
mandamus is accepted, then every breach of the Contract Act or the Companies Act or any other statute by private individuals
or companies will call for issuance of a writ of mandamus. The following observations of Shah, J in Roche Anglo-French, in a
direct reference to Gattaiah, deserve special mention:

Now, it is well settled that where the applicant seeks to enforce the performance of duty of public character, a writ of mandamus can be
issued. It is equally well settled that normally a writ of mandamus cannot be issued against a private person, though in proper cases
where the performance of duties of a public nature is involved, such a writ can be issued even against a private individual. It is also
equally well settled that the writ of mandamus can be issued against public officials and public bodies failing to perform any public duty
with which they have been charged ... s 33(2) undoubtedly makes a statutory provision imposing an obligation on the employer with
regard to the matters mentioned in the provisions as regards the conditions of service or employment of different employees. Merely
because the statute provides for certain service conditions which are binding on the employer notwithstanding the conditions of service
which may be agreed upon between the employer and employees and merely because the provisions relate to a dispute which is
common to the several employees of the company, it is difficult to accept the contention that they involved performance of duties of a
public nature. The provision is obviously in the nature of regulating the terms of employment of the employees who have raised the
dispute which is pending before the conciliation officer. In other words, the rights involved are of a private nature and cannot be given
the status of public duty imposed on the employer. ()...It appears that the learned Judge was of the view that the limitations on the
powers of the employers imposed by the provisions of the Industrial Disputes Act being not merely on the interests of individual
workman but in the general interest of industrial peace, a writ of mandamus could be issued. With respect, it is not possible to agree
with the view taken by the learned Judge. Merely because the enactment prescribes certain statutory restrictions in the matter of
retrenchment of workmen it would not follow that thereby a public duty is cast upon the employer. Such provisions merely regulate the
relationship between the employer and the workmen and put limitations on the exercise of the right of the employer. Such statutory
provisions cannot be likened with public duties, performance of which can be directed by issuing a writ of mandamus. It is not possible
to agree with the view expressed by the Andhra Pradesh High Court, which, in our view, runs counter to the law laid down by the
Supreme Court....()

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In Madras Labour Union, Srinivasan, J of Madras High Court, referring to the decision in Gattaiah, held:

...A perusal of the entire judgment would show that mandamus would issue against a private individual or an incorporated company
provided the private individual or the company is enjoined by law to perform a duty of a public nature. If the learned judge has meant
that a writ could be issued against a private person or an incorporated company even for the purpose of enforcing a contractual right
without reference to the question. whether the writ that is sought for would lie against that private individual or company under the
established principles, then we must confess, with great respect to the learned judge, that we are unable to subscribe to that view and
we see no justification for holding that ‘person’ referred to in Art 226 would take in every private individual with respect to every
private act or a mission of his.7 (Italics supplied)

The decisions rendered by Bombay and Madras High Courts are consistent with the law laid down by a host of authoritative
decisions of Supreme Court and are right. It is a judicial misconception of rudimentary nature on the part of Chowdary J that,
being a judge at the level of the High Court, he grossly failed to distinguish a ‘statutory duty’ of contractual nature from a
‘public duty’ having a public law element therein. While it is conceded that in the event of violation of ‘public duty’ a writ
could be issued even to a private person or party, every ‘statutory duty’ cannot be classified as a ‘public duty’. In order for a
duty to partake the character of a public duty, it should be shown that it is a duty, which, though directed at the moment
towards a private party, has implications for the general public. Paraphrasing, the effect of non-performance of such a duty by
the authority concerned is not confined to the party alone, but has implications extended to the public at large. What public duty
could presumably have been violated in a case where an employer retrenches a few of his workmen? Could it be said that a
retrenchment of this kind would have far reaching implications for the community in the sense that the fundamental rights
guaranteed to the members of the public get infringed? Chowdary J grossly misdirected himself and handled the case without
applying his mind to the facts and without following the settled principles and binding precedents. The reasoning and
conclusions reached by Prakash Narain J of the Delhi High Court in National Seeds, Srinivasan J of the Madras High Court in
Madras Labour Union, and that of Shah J of the Bombay High Court in Roche Anglo-French are consistent with the legal
principles governing mandamus laid down by the Apex Court and are right. On the other hand, the decision of PA Chowdary J
of AP high Court in Gattiah reflects nothing worthwhile except a manifest abuse of judicial power on his part, is clearly
misconceived, wholly perverse and absolutely wrong, and deserves to be condemned outright and rejected without a second
look.

In Bharat Petroleum, the Madras High Court comprising Subhashan Reddy CJ and Murugesan J had proceeded to issue a writ
of mandamus against the trade union for resorting to a strike which presumably was illegal within the meaning of s 22 of the
Industrial Disputes Act.8 With great respect, the Chief Justice had no less misdirected himself than PA Chowdary J of AP High
Court in Gattaiah (supra). What public duty is involved in a strike called out by a trade union which calls for interference by
the High Court by way of a mandamus, albeit in a public utility service, more so, when the ID Act read with standing orders
provide for elaborate process and an effective alternative remedy as to the manner of treating and handling an illegal strike or
illegal lockout? Yes, it is conceded that the workmen staging an illegal strike in a public utility strike cause serious
inconvenience to the public apart from financial loss to the employer. It is also admitted that there is no statutory right, much
less a fundamental right, to strike regardless of the fact that strikes and lockouts are an intrinsic part of the collective bargaining
process. The fact that the combined focus of sections 22, 23 and 24 of the ID Act is on prohibition - and not promotion - of
strikes and lockouts is also taken note of. But these facts per se do not by any stretch of imagination give rise to an inference
that the High Court and the Supreme Court can misuse and abuse the power conferred on them under the Constitution by
issuing writs of the kind of mandamus in a reckless manner, more so, when the Act itself provides for an efficacious remedy to
treat the said industrial actions of contractual nature and also the consequences ensuing therefrom. Could it be said that a trade
union or, for that matter, an industrial employer carrying on a particular business, howsoever critical it might be for the general
public, is performing a statutory duty of public duty character having a public law element in it? In this connection, it will do
well to recall what JC Shah J had to say about the expression ‘authority’ appearing in Art 12 in Rajasthan State Electricity
Board. The learned judge in his concurring judgment observed:

I am unable, however, to agree that every constitutional or statutory authority on whom powers are conferred by law is “other authority”
within the meaning of Article 12. The expression “authority” in its etymological sense means a body invested with power to command
or give an ultimate decision, or enforce obedience, or having a legal right to command and be obeyed... Those authorities which are
invested with sovereign power, i.e., power to make rules or regulations and to administer or enforce them to the detriment of citizens
and others fall within the definition of “State” in Article 12, and constitutional or statutory bodies which do not share that sovereign
power of the State are not in my judgment, “State” within the meaning of Article 12 of the Constitution.9 (Italics supplied).

In the face of this candid observation, is it possible by any stretch of imagination to brand a trade union of workmen as an
‘authority’ invested with the State’s sovereign power in the sense of making rules and enforcing their obedience by the citizens,

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etc.? It is both amusing and disgusting to hear Subhashan Reddy CJ with decades of experience at the bar and the bench,
travelling to the length of holding that a trade union of workmen was an ‘authority’, within the meaning of Art 12, performing
a public duty!10 The contentions raised by counsel in the case (at Para 17 of the judgment), that the trade unions could not be
termed as ‘other authorities’ within the meaning of the said Article and that no writ was maintainable, were right, whereas the
reasoning and conclusion reached by Reddy CJ are trite and misconceived. In another case involving the same company and
the same cause, the Bombay High Court comprising Khanwilkar and Gyanoo JJ decided the case on the same lines as its
Madras counterpart.11 Both the High Courts apparently followed the decisions of the Supreme Court, inter alia, in Som Prakash
Rekhi,12 and Shri Anandi Mukta Trust,13 which are themselves finished products of grave misconceptions on the part of the
learned judges. This dysfunctional trend, which had its disquieting beginning in Sukhdev Singh,14 and Ajay Hasia (infra), at the
hands of a team of over-zealous judges headed by AN Ray CJI during the black days of ‘Emergency’ and is continuing
unabated for over 40 years now, needs to be curbed sooner than later, for the good of the country as well as for upholding the
reputation and standing of the Supreme Court. In this connection, it is considered expedient to devote some space to the
decisions in Som Prakash Rekhi and Shri Anandi Mukta Trust and other cases, prefaced by Ajay Hasia. In Ajay Hasia,
Bhagwati J contributed his own share of misconceptions and proceeded to hold that even companies incorporated under the
Companies Act and Societies registered under Societies Registration Act would fall within the expression of ‘Authority’ in Art
12, as can be seen from the following passage:

We may point out that it is immaterial for this purpose whether the corporation is created by a statute or under a statute. The test is
whether it is an instrumentality or agency of the Government and not as to how it is created. The inquiry has to be not as to how the
juristic person is born but why it has been brought into existence. The corporation may be a statutory corporation created by a statute or
it may be a Government company or a company formed under the Companies Act 1956 or it may be a society registered under the
Societies Registration Act 1860 or any other similar statute. Whatever be its genetical origin, it would be an ‘authority’ within the
meaning of Article 12 if it is an instrumentality or agency of the Government and that would have to be decided on a proper assessment
of the facts in the light of the relevant factors. The concept of instrumentality or agency of the Government is not limited to a
corporation created by a statute but is equally applicable to a company or society and in a given case it would have to be decided, on a
consideration of the relevant factors, whether the company or society is an instrumentality or agency of the Government so as to come
within the meaning of the expression ‘authority in Article 12. 15

It is this kind of intellectual myopia, which afflicted the judicial vision of a few ‘activist-populist’ judges of the 1970s & 1980s,
that was largely responsible for the docket explosion and unmanageable workload in higher courts, as the litigants were given a
green signal to circumvent the ordinary and more effective remedies provided under the respective statutes and directly knock
at the doors of higher courts in every trivia. In Som Prakash Rekhi, the judicial perversions touched their zenith in so far as Iyer
J held that Bharat Petroleum Corporation was ‘State’ within the enlarged meaning of Art 12, and further observed that the
commonsense signification of the expression ‘other authorities under the control of the Government of India’ was plain and
there was no reason to make exclusions on sophisticated grounds such as that the legal person must be a statutory corporation.16
In striking contrast, the decision in Tekraj made a refreshing departure from the insolvent trends noticed Ajay Hasia, Sukhdev
Singh and Som Prakash Rekhi. In Tekraj, counsel relied on Sukhdev Singh to press his argument that the Institute of
Constitutional and Political Studies which was a voluntary society formed under Societies Registration Act, but comprising
members of the two Houses of Parliament, was an agency or instrumentality of the state within the meaning of ‘other
authorities’. Justice Misra repelled the contention and held that objects of the society were not governmental business, but
aspects which were expected to equip Members of Parliament and the state legislatures with the requisite knowledge and
experience for better functioning. Many of the objects adopted by the society were not confined to the two Houses of
Parliament and were intended to have an impact on society at large, and hence it could not be said to fall within the meaning of
‘other authorities’.17 In Shri Anandi Mukta Trust, Shetty J held that the words ‘any person or authority’ used in Art 226 may
cover any person or body performing public duty, and not confined only to statutory authorities and instrumentalities of the
state.18 The rendition of Mishra J is right and those of Bhagwati, Iyer and Shetty JJ are repugnant to the Constitution, and are
patently wrong.

Reverting to Bharat Petroleum, the decisions of Madras and Bombay High Courts disclose nothing worthwhile except judicial
high-handedness and a gross and unadulterated abuse of judicial power on the part of the learned judges. If the High Court
chooses to interfere with contractual actions and statutory violations in this manner, then what is the sanctity of s s 26, 27 & 28
of the ID Act and of the acts of misconduct enumerated in the Standing Orders, which provide for the machinery and procedure
for handling such contraventions? Can the High Court assume the direct responsibility of managing industrial undertakings
over the heads of the employers themselves? It is this kind of misplaced judicial activism, bordering on perversion, that is
responsible for encouraging litigants to cut corners by discarding the more effective remedy provided in the respective
enactments, and invoking the writ jurisdiction of High Courts. At a more basic level, what is the sanctity of mandamus issued
against a few thousand workmen and what sense does it make even to a layman? Could it be enforced in any meaningful way,
if the whole body of workmen defies the order with impunity? Is it possible to arrest and try some 60,000-70,000 employees
spread across the country or to initiate contempt proceedings against them for flouting the misconceived mandamus? Assuming

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that it can be done, how does the mandamus get enforced in so far as it commands the party to do its duty vis-à-vis the
consumers who are adversely affected by the strike!? And assuming further that the employees could be arrested and tried,
what would be the fate of production operations of the company? The remedy would be worse than the disease, as it renders the
supply of essential products to the community even more remote and impossible. What practical considerations did prevail
with, and what kind of intellectual exercise was pressed into service by, the learned judges while deciding the case in such a
desolate manner? And, strangely, the judges at the level of High Courts and Supreme Court appear to be content with issuing
writs, in all and sundry cases, while millions of cases are languishing for decades waiting for disposal, nay, parturition. That is
the abysmal level to which the standard and quality of judicial decisions have taken a plunge! The above decisions are reckless,
mediocre and insipid and deserve nothing short of an outright condemnation in the strongest possible language and terms!

In Eagle Rolling Mills, a Constitution Bench presided over by Gajendragadkar, CJI, held that though the power of the High
Court under Art 226 is very wide, even this power cannot take within its sweep ‘industrial disputes’ of the kind which were
sought to be raised before the High Court.19 In Rohtas Industries, Krishna Iyer J, speaking in the same strain, held that if the
industrial dispute relates to enforcement of a right or an obligation created under the Act, then the only remedy available to the
suitor is to get it adjudicated under the Act.20 In Bihar RVPFK Union, Pathak CJI dismissed the petition on the ground of
alternative remedy being available to the workmen which could only be adjudicated on evidence and that the writ court would
not enter into questions of fact.21 Viewed against this backdrop, the relationship between IDL Chemicals (the ‘employer’ in this
case) and the temporary workmen who were retrenched, was purely contractual and private in character, and the question raised
therein fell squarely within the definition of ‘industrial dispute’. At any rate, it could never be considered at par with the
relationship that exists between the state or its instrumentality, on the one hand, and the citizens, on the other. If, in the opinion
of the court, there was a violation of the relevant provisions of the ID Act, the right course would have been to direct the party
to approach the appropriate tribunal provided for under the Act, instead of assuming jurisdiction wrongfully and granting a writ
under the wrong pretext that it was a public duty. Adverting to Animal National Estate, could it be said that the non-issue of a
notice of change under s 9A would have an adverse affect on the public at large? If, as averred by the learned judge, the non-
compliance of s 9A could be considered as a violation of ‘statutory duty’ and, therefore, a ‘public duty, then what class of
duties imposed under various labour laws or, for that matter, in any law of any branch, would possibly fall outside the class
‘public duty’? It is also not a case where the Act conferred a particular right with no specific remedy to enforce it, which
circumstance alone could justify the issue of a writ. If the management had changed the conditions of service without notice
and without permission during the pendency of a proceeding, there is a specific remedy provided under s 33A of the Act itself.
What was the warrant for the learned judge to issue a writ in the face of an equally or more efficacious remedy available to the
workman? The learned judge turned a blind eye to what Prof. Schwartz and Prof. Wade peremptorily observed about
prerogative writs:

The important aspect of the prerogative remedies is that they belong exclusively to public law (with the exception of habeas corpus),
their primary object being to make the machinery of government work properly rather than to enforce private rights. This introduces a
valuable ‘public interest’ element. An application for certiorari is, as the title of the case indicates, a proceeding by the Queen to call
some public authority to account for exceeding or abusing is power. Similarly in a suit for mandamus the Queen is calling for the proper
discharge of some public duty. Although private persons are of course the real plaintiffs, the public character of the proceedings is more
than a mere form.22 (Italics supplied).

According to Halsbury:

The order of mandamus is an order of a most extensive remedial nature, and is, in form, a command issuing from the High Court of
Justice, directed to any person, corporation, or inferior tribunal, requiring him or them to do some particular thing therein specified
which appertains to his or their office and is in the nature of a public duty. Its purpose is to supply defects of justice; and accordingly, it
will issue, to the end that justice may be done in all cases where there is a specific legal right and no specific legal remedy for enforcing
that right..23

The writ of mandamus is not a ‘writ of course’ or a ‘writ of right’, but is discretionary. But where the right, which the applicant
seeks to enforce, is the performance of duties of a public nature which are merely ministerial and cannot be secured at all if a
mandamus is refused, the issue of the writ is not discretionary.24 In exercising its discretion, the court will refuse the writ, if
there is an alternative remedy at law, but the alternative remedy must be equally convenient, beneficial and effectual. In
England, such alternative remedies include a petition of right (replaced by proceedings under the Crown Proceedings Act
1947); an appeal to a court or tribunal; an election petition; an execution; and an action at law.25 The above authorities
eloquently demonstrate that the issue of mandamus is inalienably linked to duties of public nature and not to enforce private
rights inter partes, whether conferred by a statute or otherwise; that even in the case of non-performance of a public duty by an
authority, the issue of a writ is discretionary, if there is an alternative remedy at law which is equally convenient, beneficial and
effectual. It cannot be denied that the Indian Constitution adopted these writs on an as-is-where-is basis from English law and,

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by the same token, they cannot acquire a connotation different from that of English jurisprudence, which implies that Indian
judges are not free to transgress their legitimate confines while exercising the writ jurisdiction. In VST Industries, the facts
were, the VSTI Employees’ Union filed a petition in the Andhra Pradesh High Court seeking for a writ of mandamus directing
the company to treat certain contract workers engaged in the canteen (who were members of the union) as the employees of the
company and for grant of certain monetary and other consequential benefits. Despite the contention of the management that no
writ would lie against a company in view of the fact it was not an authority or a person within the meaning of Art 12 of the
Constitution and that it was not discharging any public duty, both a single judge and the Division Bench of High Court
apparently following Parimal Chandra Raha, and Gattaiah, and held that a writ would lie against a company under a private
management. The High Court further held that s 46 of the Factories Act 1948 imposed on the company a public duty to
establish and maintain a canteen; and that inasmuch as the members of the union were working in the canteen they were
entitled to seek a mandamus. Rejecting the view of the High Court, the Supreme Court held:

Manufacture and sale of cigarettes will not involve any public function. Incidental to that activity there is another obligation under
Section 46 of the Act to set up a canteen when the establishment has more than 250 workmen. That means, it is a condition of service ...
In other words, it is only a labour welfare device for the benefit of its work-force unlike a provision where Pollution Control Act makes
it obligatory even on a private limited company not to discharge certain effluents. In such cases public duty is owed to the public in
general and not specific to any person or group of persons. Further the damage that would be caused in not observing them is immense.
If merely what can be considered a part of the conditions of service of a workman is violated, then we do not think there is any
justification to hold that such activity will amount to public duty. Thus, we are of the view that the High Court fell into error that
appellant is amenable to writ jurisdiction.26 (,)

Viewed in this background, it is difficult to escape the conclusion that the decision of Sivasubramaniam J in Anaimalai NEW
Union, coming, as it were, after the decision of Supreme Court in VST Industries amounts to a blatant defiance of a binding
precedent and constitutes judicial indiscipline of grave magnitude. In Mukul Kumar Shukla, Sikri J of the Delhi High Court,
while repelling the argument of counsel for petitioner for issuing a writ against the respondent for reason of non-compliance
with the mandatory provisions of s 25F of the ID Act, observed:

A Constitution Bench of the Supreme Court in the case of Eagle Rolling Mills,27 has categorically held that in relation to an industrial
dispute, a writ petition under Art 226 of the Constitution of India cannot be entertained and the Writ Court shall not convert itself into
an Industrial Court. The petitioner, in the instant case, has failed to show that any public law character is involved in the writ petition.
Even assuming that the respondent has not complied with the mandatory requirements of s 25F of the Act, its remedy would be to take
recourse to the provisions of the said statute in terms whereof its service conditions are protected. In the Sain Steel Products case,28. ..
relied upon by the petitioner no contention had been raised as to whether a writ petition would be maintainable nor the earlier binding
precedents of the Supreme Court had been cited. It is now a well established principle of law that a judgment cannot be relied upon for
the proposition which had not been canvassed before the Court. Having regard to the facts and circumstances of the case, we are of the
opinion that it is not a fit case where this Court should exercise its discretionary jurisdiction under Art 226 of the Constitution of India.
This writ petition is, therefore, dismissed with liberty to the petitioner to avail alternative remedies available to him. 29

Sikri J declined, and very rightly so, to issue a writ against Hindustan Times, which decision is consistent with the ratio laid
down by the Apex Court in several cases. Speaking in the same vein, the Allahabad High Court in Pepsico, held that the
respondent-company was a private company and not state or an instrumentality of the state under Art 12, and hence the writ
petition filed by the workmen seeking relief against termination of their services by the company was not maintainable.30 In
PNB Employees, where the settlement entered into with one union was challenged by another union in a writ petition, Menon J
dismissed the writ petition and directed the petitioners to approach the tribunal/labour court under the provisions of the ID Act,
and further held that the remedy under Art 226 was not to supersede completely the remedy of obtaining relief by civil suit or
any other statutory provision.31 The decisions of the Bombay, Madras, Delhi, Allahabad and Madhya Pradesh High Courts in
Roche Anglo-French, Madras Labour Union, Hindustan Times, Pepsico and PNB, respectively, should be accepted as
propounding correct law consistent with the ratio evolved by the Apex Court in Eagle Rolling Mills, Rohtas Industries and
other cases. In Nirmalendu Roy, the Calcutta High Court held that the grant of relief under Art 226 is discretionary and should
be exercised only in exceptional circumstances and where the dismissed workman in a public sector undertaking has
efficacious alternative remedy available under s 2A, he must be relegated to avail of the said remedy before invoking the
extraordinary jurisdiction of the High Court.32

In Maruti Udyog, the facts were, as a consequence of industrial relations, problems coupled with go-slow, tool-down strike, and
threats of total strike, etc, the management demanded that the workers should sign a ‘good conduct’ undertaking that they
would not resort to go-slow, etc, in breach of the Standing Orders. The union of workmen, having been unsuccessful to get an
injunction issued by the civil court on jurisdictional grounds, filed a writ petition in the High Court praying inter alia for an

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injunction against the management from enforcing the good conduct undertaking. The High Court held, following several
decisions of the Apex Court, that Maruti Udyog Ltd, was not a ‘State’, and that the union cannot invoke the writ jurisdiction of
High Court for obtaining the same relief, which it could not obtain from the civil court. That the union does not satisfy the three
conditions necessary for the grant of an injunction, namely, (i) that it had a prima facie case; (ii) that the balance of
convenience was in its favour; and (iii) that irreparable loss would be caused to it, if the injunction was not granted, and
therefore the petition should be dismissed.33 In Balakrishna Transport, pending the conciliation proceedings in the labour court,
the union of employees of stage carriage operator resorted to violence and destructive activities by damaging the vehicles to
force the employer to agree to the charter of demands. A single judge of the Kerala High Court directed the police to take
effective steps to protect the vehicles from the highhanded destructive activities of the union and its followers to give protection
to the employer in plying its vehicles. The court observed:

If the workmen resort to force and their actions amount to commission of offences under the ordinary law of the land, police will have
to take effective steps to prevent the same and to bring the offenders to due process of law. Under the guise of the labour agitation, no
one can be permitted to take the law into his own hands. Any laches on the part of the police in this direction will affect the industrial
peace in the state.34

Accordingly, the court directed the police authorities to give protection to the employer in plying his vehicle and it also directed
the labour court to settle the dispute pending before it expeditiously.

(iii) Quo Warranto

(a) Nature of

A writ in the nature of quo warrnato would lie ‘against a person who claimed or usurped an office, franchise or liberty, to
inquire by what authority he supported his claim, in order that right to the office or franchise might be determined’.35 The
leading case on quo warranto is Speyer, in which Lord Reading CJ traced the evolution of the writ of quo warranto and
enunciated the following principles:

(1) A stranger whose motives are not proper cannot apply for a writ of quo warranto;

(2) Quo warranto will lie if there is a public office of subordinative character, even if such office is held at pleasure;

(3) Even if an appointment to the office is made by the Crown, the court even in semblance, cannot command the Crown, the
writ of quo warranto will operate on the occupier of the office;
(4) It is not to be supposed that the Crown would reappoint the person to an office from which he has been ousted on a writ of
quo warranto; and
(5) Even, where a public office is held at the pleasure of the Crown, a writ of quo warranto will lie against the usurper of that
office.36

This decision has been followed in most of the Indian cases. The law on the subject has been stated with precision by
Gajendragadkar J in University of Mysore, thus:

Broadly stated, the quo warranto proceeding affords a judicial inquiry in which any person holding an independent substantive public
office, or franchise, or liberty, is called upon to show by what right he holds the said office, franchise or liberty; if the inquiry leads to
the finding that the holder of the office has no valid tide to it, the issue of the writ of quo warranto ousts him from that office. In other
words, the procedure of quo warranto confers jurisdiction and authority on the judiciary to control executive action in the matter of
making appointments to public offices against the relevant statutory provisions; it also protects a citizen from being deprived of public
office to which he may have a right. It would thus be seen that if these proceedings are adopted subject to the conditions recognised in
that behalf, they tend to protect the public from usurpers of public office; in some cases, persons not entitled to public office may be
allowed to occupy them and continue to hold them as a result of the connivance of the executive or with its active help, and in such
cases, if the jurisdiction of the courts to issue writ of quo warranto is properly invoked, the usurper can be ousted and the person
entitled to the post allowed to occupy it. It is thus clear that before a citizen can claim a writ of quo warranto, he must satisfy the court,
inter alia, that the office in question is a public office and is held by usurper without legal authority, and that necessarily leads to the
inquiry as to whether the appointment of the said alleged usurper has been made in accordance with law or not.37

(b) Quo warranto: When Will Issue?

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A writ in the nature of quo warranto would lie in respect of an office, if:

(1) such office was created by a statute or the Constitution;

(2) the duties of such office are of public nature;
(3) the office is of a permanent nature; and
(4) the occupier is in its possession and user as a usurper.

(c) Who can Petition?

The writ in the nature of quo warranto differs from other writs, viz, certiorari, prohibition and mandamus, where it is necessary
that the petitioner has been prejudicially affected by any wrong act of a public nature or that he is denied any legal right, or a
fundamental right of his, has been infringed or that any legal duty is owed to him. In otherwords, the petitioner must be a
person aggrieved, in other words, a proceeding for quo warranto is, thus, an exception to the general rule that only the person
who has been individually aggrieved can apply for the writ. A writ of quo warranto can be issued at the instance of any
member of the public who acts bona fide and is not a mere pawn in the game having been set up by others.38 But in the case of
quo warranto, even a stranger acting bona fide, can petition a writ court.39 In other words, any member of the public may apply
for a writ of quo warranto challenging the right of a person to hold a public office, provided he is not a man of straw, set up by
others and provided that it is in public interest that the legal position regarding the office should be declared.40 It is not
necessary that the petitioner should be a person who himself claims the office. For instance, even a rate-payer can challenge the
right of a person to sit on a local government board.41

(d) Quo warranto: Against whom can be Issued?

It is clear from the wide scope of Art 226 that the High Court has power to issue an order restraining any person acting in an
office in which he is not entitled to act, and also if the case so requires, declare the office vacant, where the office has been
created by the Constitution itself 42 The remedy of quo warranto is generally regarded as an appropriate and adequate remedy
to determine the right or title to a public office and to oust an incumbent who has unlawfully usurped or intruded into such
office or is unlawfully holding the same.43 A writ in the nature of quo warranto will lie against a person who claims or usurps
an office44 or is otherwise unfit to hold it. However, quo warranto cannot be issued unless the respondent is in actual
possession of the office and exercises the office in fact.45 The person exercising the powers of the office is a necessary party.
When the approval of another person is necessary to the validity of an appointment, that other person is also a necessary
party.46 For instance, where a person is appointed to an office by a government, such government is generally made a party to
the proceedings. ID Act contemplates certain public offices under ss 4 to 7B. The conciliation officers are to be appointed by
the government under s 4 while the chairman and the members of the Board are to be appointed under s 5. The court of inquiry
is to be appointed under s 6. The labour courts, industrial tribunal and national tribunals are to be constituted and their presiding
officers to be appointed under ss 7, 7A and 7B. These provisions specify certain requirements for the appointment of the
presiding officers to these adjudicatory offices. Furthermore, s 7C imposes certain disqualification on the appointment of the
presiding officers of the adjudicatory authorities. The appointment of any person, to these offices which is not consistent with
these provisions; will be void and amenable to a writ in the nature of quo warranto. In HR Deb, Hidayatuallah CJI observed
that, in a quo warranto proceeding, the High Court should be slow to pronounce upon the matter unless there was a clear
infringement of the law. Hence, where there is clear infringement of the provisions of ss 7 to 7C in the appointment of the
presiding officers of the adjudicatory authorities, such an appointment will be vulnerable to a writ of quo warranto.47 In
Joginder Pal, a Full Bench of the Punjab and Haryana High Court held that since the appointment of the presiding officers of
the industrial tribunal and the labour court in the State of Haryana was not in compliance with the requirements of cl (aa)
inserted in s 7A(3) of the Industrial Disputes Act, by the State of Haryana read with Art 233 of the Constitution, the
appointments were bad in law. The court, therefore, quashed the appointments on a writ of quo warranto.48

(e) Alternative Remedies

Quo warranto is a discretionary remedy. Normally therefore, quo warranto will be declined if there is another equally
convenient and effective remedy available.49 However, the existence of a statutory remedy will be no bar to quo warranto if the
objection of the petitioner is outside the scope of the statutory remedy.50 Likewise, the existence of another remedy will not bar
the exercise of the writ court to issue quo warranto if the circumstances of the case demand interference.51 In V Sasitharan v
State of Tamil Nadu , a writ petition was filed by some advocates and a social worker as a public interest litigation seeking a
writ of quo warranto to the chief secretary to show that he was competent to hold the said office. In response to the application,
it was pleaded on behalf of the state that in view of the provisions of the Administrative Tribunals Act 1985 which provided
suitable efficacious remedies for redressing the grievances of the aggrieved petitioners, a writ of quo warranto would not lie. A
single judge of the Madras High Court discountenanced the plea holding that a public interest litigant could not go before the

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tribunal because he could not be construed or equated with a person aggrieved by any order pertaining to any matter within the
jurisdiction of the tribunal. Therefore, a public interest litigant could only approach the High Court questioning the legality of
the appointment by filing a writ of quo warranto.52

(f) Delay or Laches

Delay and laches on the part of the petitioner may bar the remedy of quo warranto.53 Whether the High Court should issue a
writ in such a case would depend upon the facts and circumstances of each case. However, the English rule, that quo warranto
is not available against an incumbent who held office for a number of years, has no application in India.54

(g) Acquiescence

Acquiescence of the petitioner in the act alleged in the petition impugning the right of office will make the application liable to
be dismissed. However, in cases under the Industrial Disputes Act, though an award made by a tribunal may not be quashable
on certiorari, on the application of the doctrine of de facto, the incumbent can undoubtedly be made to vacate the office by a
writ of quo warranto.55 At this point, it is considered necessary to devote some space to the ‘doctrine of de facto’, for the ready
reference of the readers. Simply stated, the said doctrine means “the acts performed by a person acting under the colour of
official title would be valid, even though it is later discovered that the legality of that person’s appointment or election to the
office was deficient.” In Gokaraju Rangaraju, the facts were: An Addl. Sessions Judge, West Godavari, heard a criminal appeal
filed by the accused-appellant under s 6C of the Essential Commodities Act, and rejected the same. Thereupon, the accused
filed a Criminal Revision Petition before the High Court. While the petition was so pending, the Supreme Court, in another
case relating to the legality of the appointment of judges, quashed the appointment of a few judges, which included that of the
Addl. Sessions Judge, West Godavari, with the result he had to vacate the post. The contention raised by the appellant was that,
in the light of the fact that the appointment of the Addl. Sessions Judge was quashed by the Supreme Court, the order passed by
the judge rejecting his appeal should be treated as invalid and non est, for the reason that his appointment itself was
subsequently declared illegal by the apex court. Rejecting the contention, Chinnappa Reddy J (for self, Sen and Islam JJ) held:

The doctrine is now well established that “the acts of the officers de facto performed by them within the scope of their assumed official
authority, in the interest of the public or third persons and not for their own benefit, are generally as valid and binding, as if they were
the acts of officers de jure” (Pulin Behari v King Emperor ).56. .. the doctrine is founded on good sense, sound policy and practical
experience. It is aimed at the prevention of public and private mischief and the protection of public and private interest. It avoids endless
confusion and needless chaos. An illegal appointment may be set aside and a proper appointment may be made, but the acts of those
who hold office de facto are not so easily undone, and may have lasting repercussions and confusing sequels, if attempted to be undone.
Hence the de facto doctrine.”57

(h) Futile Writ

A quo warranto writ will not be issued where it will be futile58 nor will the court grant a writ of quo warranto in cases of mere
technical irregularities.59

(iv) Superintendence of the High Court under Art 227

(a) Nature and Scope of

Article 227 of the Constitution corresponds to s 107 of the Government of India Act 1915, which was reproduced in the
Government of India Act 1935, as s 224. This section, however, introduced new a sub-s (2), providing that nothing in the
section should be construed as giving the High Courts any jurisdiction to question any judgment of an inferior court which was
not otherwise subject to appeal or revision. Section 224 of the 1935 Act has been reproduced with certain modifications as Art
227 in the Constitution, inter alia, omitting the sub-s (2). This significant omission has been regarded by all High Courts in
India, before whom this question has arisen, as having restored the power of judicial superintendence it had under s 15 of the
Indian High Courts Act 1861, and s 107 of the Government of India Act 1915 to the High Courts.60 The power of
superintendence has been extended by Art 227 to superintendence over the inferior tribunals as well. The Constitution has
conferred two types of jurisdiction on the High Courts: one, under Art 226 and the other under Art 227, which is supervisory
jurisdiction. When the executive discharges a judicial function under the provisions of certain laws, then it acts as a tribunal
and in that capacity, it is amenable to the jurisdiction of the High Court under Art 227. The scope of these two jurisdictions is
not identical.61 The power of superintendence conferred by Art 227 has to be exercised most sparingly and only in appropriate
cases in order to keep the subordinate courts or inferior tribunals within the bounds of their authority and not for correcting
mere errors.62 It is thus clear that the power of judicial interference under Art 227, with orders of judicial or quasi-judicial
nature, are not greater than the powers under Art 226.

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Under Art 226, the power of interference may be extended to quashing an impugned order on the ground of errors of law
apparent on the face of the record. However, the power of interference is limited to seeing that the tribunal functions within the
limits of its authority.63 In appropriate cases, Art 227 may be employed to correct at least errors of jurisdiction, to wit,
assumption of excessive jurisdiction or illegal or irregular exercise of it or the refusal or failure to exercise the same—to put the
matter at its lowest—and it would certainly cover cases of non-exercise of jurisdiction in as much as cases of excessive
jurisdiction, the one, pointing to the lower limit, and the other to the higher, of the phrase ‘keeping within the bounds of
authority’.64 For instance, the High Court will quash the award of an industrial tribunal, where it decides the question not
referred to it.65 Likewise, the High Court will be justified in interfering with the order of an industrial adjudicator where he has
transgressed his authority or jurisdiction conferred by s 11A, particularly in cases where the order is arbitrary and tantamounts
to abuse of discretionary jurisdiction.66 Howsoever, wide the power of the court under Art 227 it may be compared to the
provisions of s 115 of the Code of Civil Procedure 1908, it is well established that the High Court cannot assume appellate
powers to correct every mistake of law in exercise of this power. An error not being apparent on the face of record, cannot be
corrected by the High Court in revision under s 115 of the Code of Civil Procedure or under Art 227 of the Constitution.67
Likewise, merely erroneous decisions cannot be corrected under Art 227. In other words, in exercising jurisdiction, under Art
227, the High Court cannot sit in appeal over the decision, of an industrial tribunal, which is brought before it and it cannot
upset the discretionary orders on the ground that if the matter had been raised before it, it might have exercised its discretion
differently.68 However, the High Court will not go into the averments or allegations involving disputed questions of facts69 nor
will it normally interfere with interlocutory orders70 but it may intervene, if the exercise or discretion is capricious or perverse
or ultra vires.71

In exercise of supervisory jurisdiction under Art 227, the High Court has undoubtedly the power not only to quash the orders
made by inferior courts or tribunals, but also to pass substantive orders in place of the orders it has quashed or set aside.72 In
other words, it can not only annul the decision of the tribunal but it can also issue further directions in the matter.73 However,
this jurisdiction being of a discretionary nature will be exercised only where grave miscarriage of justice or flagrant violation of
law calling for intervention takes place.74 While reviewing the decisions of the labour courts, industrial tribunals and national
tribunals, the superintending jurisdiction of the High Court under Art 227 is to be confined to correcting the jurisdictional
errors. Where the conclusion of the tribunal has been based on some acceptable evidence, however inadequate it might be, the
High Court would generally not interfere with such finding in an application under Art 227. However, where the finding is
based on evidence which is ascintilla as to be practically non-existent, or the evidence is such which no reasonable man will
accept, interference with such finding is called for.75 In some High Courts, Art. 226 and 227 are invoked together for
impugning the orders of quasi-judicial authorities for seeking relief on the same grounds. The courts also generally do not
adopt hyper technical rules in granting relief. However, in some High Courts, Art 227 alone is utilised for the purpose of
securing relief by way of writs or directions in the nature of writs, more accurately contemplated by Art 226 of the
Constitution.76 In some cases, this article is invoked for getting orders of inferior tribunals revised just as s 115 of the Code of
Civil Procedure 1908 is utilised for revision of orders of subordinate courts.77 However, this practice has been rebuked by the
Supreme Court in Ahmedabad Mfg, Dua J observed:

We should, however, not be understood to express our approval of the use of article 227 for seeking relief by way of writs or directions
in the nature of writs for which purpose article 226 is expressly and in precise language designed. 78

(b) Tribunals

Adjudicatory authorities under the Industrial Disputes Act,viz, labour courts, industrial tribunals and national tribunals are not
‘courts’ strictu sensu. Hence, they will not fall within the meaning of the expressions ‘courts’ used in Arts 136 or 227 of the
Constitution. However, after the decision of the Supreme Court in Bharat Bank, it is well-settled that these authorities will fall
within the ambit of the expression ‘tribunals’ used in Art 136 of the Constitution. On the parity of reasoning, they will fall
within the expression ‘tribunal’ used in Art 227.79 The Bombay High Court in Air Corporation, held that an arbitrator under s
10A of the Industrial Disputes Act also would fall within the meaning of the expression ‘tribunal’ used in Art 227.80 This view,
however, was pronounced by the High Court before the decision of the Supreme Court in Engineering Mazdoor Sabha, holding
that an arbitrator under s 10A is not a tribunal within the meaning of Art 136 though in a proper case, a writ may lie against his
award under Art 226 because his functions are of a quasi-judicial nature.81 Thus, Air Corporation was expressly overruled by
the Supreme Court.

(c) Procedure and Practice

General: It has been seen that the jurisdiction of a High Court under Art 227 is of supervisory nature limited to the extent of
keeping the courts and tribunals within their jurisdiction. In other words, in this jurisdiction, a High Court, will go into the
question of jurisdictional defects. To that extent, the jurisdiction of the court under Art 227 is more or less the same as that of

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the court under this Art 226. The general procedure and practice of the court under this Article will also be the same as under
Art 226.

New Plea: A point not taken before the original authority cannot be allowed to be raised before the High Court in application
under Art 227 of the Constitution.82

Laches: There is no rule of limitation fixing a period of limitation for preferring an application/petition under Art 227. Such a
rule could not be fixed because this right, which is an important right, is given to a party under Art 227. But generally the
accepted rule is that a party must come to the court as expeditiously as possible. However, the filing of a petition with utmost
expedition is not absolute rule. Exceptional circumstances might arise where notwithstanding the delay, it would be open to the
court to entertain a petition and deal with the matter on merits.83 In Harnam Singh, the facts were that a reference of a dispute
relating to termination of service without complying with s 25F was challenged by the employer by way of a writ petition 12
years after the reference. The High Court accepted the contention of the management that the workmen were not their
employees and that s 25F was not applicable, and quashed the said reference. The Supreme Court, while setting aside the order
of the High Court and directing the labour court to adjudicate the reference, held that the High Court failed to take notice of the
inordinate, unexplained delay on the part of the employer in filing the writ petition and that it was surprising that the employer
took 12 years to approach the Court.84

Adjournment: In the under-noted case,85 the prayer for adjournment of hearing of an appeal being rejected, the labour appellate
tribunal dismissed the appeal before it, without going into its merits. The Bombay High Court, set aside the order of the labour
appellate tribunal as being incompetent and unjustified in the exercise of its power under Art 227.

CONSTITUTIONAL APPEALS

(i) Appeals under Article 133 of the Constitution

From any judgment, decree or final order of a High Court in a writ petition against orders or awards of the industrial authorities
under the Act, an appeal shall lie to the Supreme Court if the High Court grants a certificate of fitness under Art 133 of the
Constitution. For the purposes of granting a certificate, the High Court is required to consider as to whether the case raises a
substantial question of law of the kind mentioned in this constitutional provision. Even if a single such question of law is found
to arise in the case, a certificate must be granted. A certificate of fitness under Art 133 is a pre-condition to the maintainability
of an appeal to the Supreme Court. The stage at which the High Court considers the grant of certificate under Art 133(1) and
the stage at which the Supreme Court hears the appeal, are two distinct stages, and different jurisdictions are exercised with
respect to each stage. Considerations pertaining to the grant of a certificate are not identical with the considerations which
govern the hearing of the appeal. Accordingly, even if some of the points raised by the appellant in the High Court in support of
the petition for a certificate are found insufficient for grant of leave, they can be considered as grounds during the hearing of
the appeal. Thus, the certificate is an open one enabling the appellant to urge all the points arising in the appeal in the Supreme
Court.86 However, a successful party may question the maintainability of the appeal on the ground that the certificate was
issued by the High Court, in contravention of the provisions of Art 133 of the Constitution.87

In an appeal, under this Article, the Supreme Court undoubtedly has the power to review the concurrent findings of the fact
arrived at by the lower court in appropriate cases. The Supreme Court will not ordinarily interfere with concurrent findings of
fact except in exceptional cases. For instance, where the finding is such as it shocks the conscience of the court or by disregard
to the forms of legal process or some violation of some principles of natural justice or otherwise substantial and grave injustice
has been done, the Supreme Court will be justified to interfere with the findings. It is not possible nor advisable to define the
circumstances in which the court will interfere with such concurrent findings of facts and it is in the discretion of the Supreme
Court to decide having regard to the facts of a particular case.88 However, the orders and awards of industrial authorities are
impugned before the High Courts by writ petitions under Arts 226 and 227 of the Constitution. It is, therefore, against the
orders and judgments of the High Courts in such writ petitions that an aggrieved party can approach the Supreme Court in
appeal, on a certificate under Art 133 of the Constitution. In such an appeal, the scope of the jurisdiction of the Supreme Court
is exactly the same as that of the writ court. It will interfere only if the writ court has failed to exercise its jurisdiction. In
granting a certificate under Art 133, the High Court must state as to under what particular clause of this Article the leave is
granted, otherwise the certificate would be invalid and the appeal would not be maintainable.89 An objection to the validity of
the certificate should be taken at the earliest possible moment and the respondent’s failure to do so would not be allowed to
prejudice the appellant, making it impossible for him to resort to the proper remedy of special leave under Art 136, as he could
have done if the objection had been taken at an early stage. Thus, the appellant will not be made to suffer for the failure of the
respondent and the court will not simply dismiss an appeal on the ground that the leave obtained was not a proper one and leave
the matter to rest there. In such cases, if the circumstances of a case warrant, the court would go to the length of granting
special leave to the appellant on oral application.90

(ii) Appeals under Article 136 of the Constitution

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Article 136 of the Constitution empowers the Supreme Court to entertain an appeal by special leave from any judgment, decree,
determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India. The
non obstante clause in the beginning of this Article indicates that very wide discretion has been conferred on the Supreme
Court in the matter of entertaining appeals under this Article and this discretion is not hedged by other Articles in chapter 4 of P
art 5 of the Constitution. In Rajkrushna Bose, referring to the language of cl (1), the Supreme Court observed that it was
sufficient to say that the power conferred on us by Art 136 could not be taken away or whittled down by the legislature. So long
as these words remain, discretion of Supreme Court and High Courts remains unfettered.91 This view was affirmed in Sangram
Singh, where it was held that the jurisdiction which Art 136 confers, entitles the Supreme Court to examine the decisions of all
tribunals to see whether they have acted illegally. The following passage from the judgment of Bose J, who spoke for the court
is fascinatingly illuminating:

That jurisdiction cannot be taken away by a legislative device that purports to confer power on a tribunal to act illegally by enacting a
statute that its illegal acts shall become legal the moment the tribunal chooses to say they are legal. The legality of an act or conclusions.
is something that exists outside and apart from the decision of an inferior tribunal. It is a part of the law of the land which cannot be
finally determined or altered by any tribunal of limited jurisdiction. 92

The extraordinary power, conferred by Art 136 on the Supreme Court cannot therefore, be taken away by any legislation short
of a constitutional amendment.93 The power of the Supreme Court to grant special leave to appeal from the decision of any
court or tribunal in the territory of India, save military tribunals, is not subject to any constitutional limitation, and is left
entirely to the discretion of the Supreme Court. An appeal under Art 136 is not a matter of right but it is in the discretion of the
Supreme Court to grant special leave to appeal or not.1 In Bengal Chemicals, dealing with an industrial case specifically, Subba
Rao J held:

Though article 136 is couched in widest terms, it is necessary for this court to exercise its discretionary jurisdiction only in cases where
awards are made in violation of the principles of natural justice, causing substantial and grave injustice to parties or raises an important
principle of industrial law requiring elucidation and final decision by this court or discloses such other exceptional and special
circumstances which merit the consideration of this court.2

In Shambhu Nath Mukherji, the Supreme Court declined to interfere with the decision of the High Court because the High
Court in its writ jurisdiction had refused to interfere with the award of the tribunal in view of the fact that there was no manifest
error of law on the face of the record nor was there any error of jurisdiction.3 Likewise, in Fuel Injection, the court did not find
any merit in the plea to interfere with the judgment of the High Court. Speaking for the court, Krishna Iyer J pointed out that
the jurisdiction of the Supreme Court in entertaining an appeal by special leave under Art 136 must ordinarily be confined to
what the High Court could and would have done under Art 226 and this limitation must be borne in mind while dealing with
the judgment under appeal.4 Article 136(1) refers to a ‘tribunal’ in contradistinction to a court.5The Supreme Court has
jurisdiction to grant special leave from the determination of a tribunal which is a body that has been invested with a part of the
judicial power of the state. The tribunals which fall within the purview of Art 136 occupy a special position of their own under
the scheme of the Constitution as special matters and questions are entrusted to them for their decisions. The labour courts,
industrial tribunals and national tribunals constituted under the Industrial Disputes Act have been held to fall within the ambit
of the expression ‘tribunal’ used in Art 136(1) of the Constitution as they have many trappings of a court and exercise quasi-
judicial functions, though they are not full-fledged courts in the strict sense of exercising judicial powers.6However, a body
which derives its authority to decide matters by the consent of parties and is not invested with the judicial power of the state
cannot be a ‘tribunal’ with the meaning of Art 136. An arbitrator acting under s 10A of the Act has, therefore, been held to be
de hors the purview of, tribunal’ as postulated by Art 136(1) of the Constitution.7 In Jaswant Sugar Mills, the facts, in brief
were: the management filed an application before the conciliation officer for permission to dismiss 52 workers for having
resorted to an illegal strike. The conciliation officer granted permission to dismiss only 11 out of the 52 workmen in exercise of
the powers conferred on him under cl 29 of the Order promulgated by the Governor under the UP Industrial Disputes Act1947.
The said clause corresponds to s 33 of the Central Act. Two issues fell for the consideration of a Constitution Bench of the
Supreme Court, i.e. (1) Whether an appeal may be entertained in exercise of powers under Art 136 of the Constitution against a
direction of the Conciliation Officer issued in disposing of an application under cl. 29 of the Order promulgated by the
Governor of Uttar Pradesh under the U P Industrial Disputes Act, 1947 and (2) Whether against the direction issued by the
Conciliation Officer exercising authority under cl. 29 of the Order an appeal lay to the Labour Appellate Tribunal under the
Industrial Disputes (Appellate Tribunal) Act, 1950. Counsel for the workmen contended that the appeal against the direction
given by the Conciliation Officer was not maintainable because that the officer exercising authority under cl. 29 of the said
Order was neither a ‘Court’ nor a ‘Tribunal’ within the meaning of Art 136 of the Constitution and, hence, no appeal could lie
to the Supreme Court against the impugned direction. Upholding the contention of the workmen, Shah J observed:

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.. . The Conciliation Officer is again not capable of delivering a determinative judgment or award affecting the rights and obligations of
parties. He is not invested with powers similar to those of the Civil Court under the Code of Civil Procedure for enforcing attendance of
any person and examining him on oath, compelling production of documents, issuing commissions for the examination of witnesses and
other matters. He is concerned in granting leave to determine whether there is a prima facie case for dismissal or discharge of an
employee or for altering terms of employment, and whether the employer is actuated by unfair motives; lie has not to decide whether
the proposed step of discharge or dismissal of the employee was within the rights of the employer. His order merely removes a statutory
ban in certain eventualities, laid upon the common law right of an employer to dismiss, discharge or alter the terms of employment
according to contract between the parties. The Conciliation Officer has undoubtedly to act judicially in dealing with an application
under cl. 29, but he is not invested with the judicial power of the State: he cannot therefore be regarded as a ‘tribunal’ within the
meaning of Art 136 the Constitution.. .. it is thus manifest that the conciliation officer does not hold the status of an industrial tribunal in
exercising powers under s 33 of the Industrial Disputes Act or clause 29 of the Uttar Pradesh Order. It must therefore be held that an
appeal under Art 136 of the Constitution, to this court is not competent against the direction given by the conciliation officer exercising
power under clause 29 of the order issued by the Governor of Uttar Pradesh under the Uttar Pradesh Industrial Disputes Act 1947.”8

It is not necessary that an authority must be given the nomenclature ‘tribunal’. It is sufficient if it satisfies the requirements of
law for an authority to fall within the ambit of a ‘tribunal’ as used in Art 136(1) of the Constitution. For instance, the state
government exercising authority under rr 6(5) & 6(6) of the Punjab Welfare Officers (RCS) Rules framed under s 49(2) of the
Factories Act 1948, was held to be a ‘tribunal’ within the meaning of Art 136(1).9 In Bharat Bank, the Supreme Court laid
down the following principles for interference with the orders and awards of tribunals:

(i) excess of jurisdiction;

(ii) approach to the question referred to in a manner which is likely to result in injustice; or

(iii) adoption of a procedure which runs counter to the well established rules of natural justice, ie:

(a) denial of hearing to a party;

(b) refusal to record evidence of a party; and

(c) acting in any other manner in any arbitrary or despotic fashion.10

However, in Calcutta Tramways, the court classified rather too widely the necessary pre-requisites for interference with the
orders and awards of the industrial tribunal whose conclusions on questions of fact are generally final. Speaking for the court
Govinda Menon J enunciated the following circumstances for the interference of the court:

(i) where the tribunal acts in excess of jurisdiction conferred upon it under the statute or regulation creating it or where it
ostensibly fails to exercise a patent jurisdiction;
(ii) where there is an apparent error on the face of the decision; and

(iii) where the tribunal has erroneously applied the well-accepted principles of jurisprudence.11

In Bengal Chemicals, Subba Rao J further broadened the scope of appeal against the awards of industrial tribunals by laying
down the following requirements for the exercise of the discretionary jurisdiction of the court, namely:

(i) that there is violation of the principles of natural justice, causing substantial and grave injustice to parties;

(ii) that the appeal raises an important principle of industrial law requiring elucidation and final decision by the Supreme Court;
or
(iii) that the appeal discloses such other exceptional or special circumstances which merit consideration of the Supreme Court.12

In Meenakshi Mills, the Supreme Court observed that though the appropriate government or the specified authority is required
to act judicially while granting or refusing permission for retrenchment of workmen under sub-s (3) of s 25N of the Industrial
Disputes Act, it is not invested with the judicial power of the state and it cannot be regarded as tribunal within the meaning of
Art 136 of the Constitution and no appeal would, therefore, lie to the Supreme Court against the order passed under that
provision.13 In Sarathy, Saghir Ahmed J held that the Deputy Commissioner of Labour (Appeals), Madras, which was notified
as the authority under the Tamil Nadu Shops and Establishments Act 1947, had the jurisdiction to adjudicate upon an order

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terminating the services of an employee. The Deputy Commissioner could exercise jurisdiction to decide whether the order of
dismissal passed by the employer was valid or it was passed in violation of any statutory rule or principles of natural justice.
Under s 41(3), the order passed by him is binding on the employer as also on the employee. Ahmed J further held that the
Deputy Commissioner of Labour (Appeals) might not be a ‘Civil Court’ within the meaning of the Code of Civil Procedure, but
was definitely a court.14 The nature of jurisdiction being essentially of a discretionary character and not being fettered by any
rules or principles, the court has dealt with each case on its own merits depending upon its peculiar facts and circumstances. As
such, no hard and fast rules are discernible from the decided cases.

40 Union of India v HC Goel (1964) 1 LLJ 38 [LNIND 1963 SC 208], 45 (SC), per Gajendragadkar J.
41 KK Ramankutty v State of Kerala 1973 Lab IC 496, 506 (Ker), per Subramanian Poti J.
42 HWR Wade, Administrative Law, third edn, p 96.
43 Rattan Lal Sharma v MC, Dr Hari Ram HS School 1993 Lab IC 1808 [LNIND 1993 SC 471], 1812 (SC), per GN Ray J.
44 Ranjit Thakur v Union of India (1988) 1 LLJ 256 [LNIND 1987 SC 697], 260 : AIR 1987 SC 2386 [LNIND 1987 SC 964]: (1987)
4 SCC 611 [LNIND 1987 SC 964] (SC), per Venkatachaliah J.
45 Maneka Gandhi v Union of India AIR 1978 SC 597 [LNIND 1978 SC 25], 625, per Bhagwati J.
46 HWR Wade, Administrative Law, fifth edn, p 413.
47 American Journal of International Law, Vol 67, p 479, per Megarry J.
48 Fontaine v Chastam [1968] 112 Sol Gen 690.
49 Voinet v Barrett [1885]15 LJQ 39, 41, per Lord MR Esher.
50 A much quoted remark of Harman LJ, in Ridge v Baldwin [1963] 1 QB 539, 578.
51 Current Legal Problems, 1973, Vol 26, p 16.
52 Fumell v Whangarei High Schools Board [1973] AC 660, 679, per Lord Morris.
53 Abbott v Sullivan [1952] 1 KB 189, 195, per Lord MR Evershed.
54 R v Local Government Board, ex p Arlidge [1914] 1 KB 160, 199, per Hamilton LJ.
55 Robinson v Fenner [1913] 3 KB 835, 842, per Channell J.
56 Union of India v PK Roy AIR 1968 SC 850 [LNIND 1967 SC 320], 858, per V Ramaswami J.
57 HWR Wade, Administrative Law, fifth edn, p 414.
58 HH Marshal, Natural Justice, p 5; Maneka Gandhi v Union of India AIR 1978, SC 597, 625, per Bhagwati J.
59 Report of the Committee on Ministers’ Powers, pp 65-80.
60 Marshal, Natural Justice, p 5.
61 AK Kraipak v Union of India AIR 1970 SC 150 [LNIND 1969 SC 197], 156 per Hegde J.
62 Kanda v Government of Malaya [1962] AC 322, 337, per Lord Denning.
63 Marshal, Natural Justice, p 5.
64 Kanda v Government of Malaya [1962] AC 322, 337, per Lord Denning.
65 Andhra Scientific Co Ltd vA Seshagiri Rao (1961) 2 LLJ 117 [LNIND 1960 SC 340], 120 (SC), per Das Gupta J.
66 DK Khanna v Union of India 1973 Lab IC 582, 586-87 (HP) (DB), per Pathak CJ.
67 Bonaham’s case [1610] 8 Co Rep 113b.
68 Manaklal v Prem Chand Singhvi AIR 1957 SC 425 [LNIND 1957 SC 154], 429, per Gajendragadkar J.
69 Dimes v Grand Junction Canal [1852] 3 HLC 759, per Lord Campbell.
70 Local Government Board v Arlidge [1915] AC 120, 132.
71 Frame United Breweries Co v Bath Justices [1926] AC 586, 590, per Viscount Cave LC.
72 Brookes v Earl of Rivers [1668] Hardes’ 503.

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73 AK Kraipak v Union of lndia AIR 1970 SC 150 [LNIND 1969 SC 197], 154-55 : (1969) 2 SCC 262 [LNIND 1969 SC 197], per
Hegde J.
74 Serjeant v Dale (1887) 2 QBD 558, 567.
75 R v Rand [1866] LR 1 QBD 230, per Blackburn J.
76 Lesson v General Council of Medical Education (1889) 43 Ch D 366, 384, per Bowen LJ.
77 Air Corpn Employees’ Union v DC Vyas (1962) 1 LLJ 31 [LNIND 1961 BOM 46], 44 : AIR 1962 Bom 274 [LNIND 1961 BOM
46] (Bom) (DB), per Chandrachud J.
78 SA de Smith, Judicial Review of Administrative Action, fourth edn, pp 258-59.
79 R v Rand [1866] LR 1 QB 230, per Blackburn J.
80 AK Kraipak v Union of India AIR 1970 SC 150 [LNIND 1969 SC 197]: (1969) 2 SCC 262 [LNIND 1969 SC 197], per Hegde J.
81 NS Dhamankar v Cantontment Board (1987) 1 LLJ 401, 403 (Kant) per Chandrakantaraj Urs J.
82 R v Rand [1866] LR 1 QB 230, 232-33.
83 DK Khanna v Union of India 1973 Lab IC 582, 588 (HP) (DB), per Pathak CJ.
84 R v Handley [1921] 61 DLR 656.
85 R v Rand [1886] LR 1 QB 230, 232-33.
86 Cottle v Cottle [1939] 2 All ER 535.
87 MLL Kumar v Divisional Manager, APSRTC (1990) 2 LLJ 23, 25 : (1969) 2 SCC 262 [LNIND 1969 SC 197] (AP), per Jagannadha
Rao J.
88 Manaklal v Prem Chand Singhvi AIR 1957 SC 425 [LNIND 1957 SC 154] [1957] 1 SCR 575 [LNIND 1957 SC 154], per
Gajendragadkar J.
89 Ranjit Thakur v Union of India (1988) 1 LLJ 256 [LNIND 1987 SC 697], 260 : AIR 1987 SC 2386 [LNIND 1987 SC 964] (SC),
per Venkatachaliah J.
90 Mineral Development Ltd v State of Bihar AIR 1960 SC 468 [LNIND 1959 SC 224]: [1960] 2 SCR 609 [LNIND 1959 SC 224],
per Subba Rao J.
91 SA de Smith, Judicial Rnlief of Administrative Action, p 265.
92 NS Dhamankar v Cantontment Board (1987) 1 LLJ 401, 403 : ILR 1986 KARNATAKA 4039 (Kant), per Chandrakantaraj Urs J.
93 Associated Provincial Picture Houses v Wednesbury Corpn [1948] 1 KB 223, 229, per Lord MR Greene.
94 Union of India v HC Goel (1964) 1 LLJ 38 [LNIND 1963 SC 208], 45 (SC), per Gajendragadkar J.
95 SA de Smith, Judicial Review of Administrative Action, founh end, pp 335-36.
96 Judicial Control of Administrative Action in India, p 217.
1 R v Leicester Justice [1927] 1 KB 557, 564, per Salter J.
2 Gullapalli Nageswararao v State of AP, AIR 1959 SC 1376 [LNIND 1959 SC 143] (1379) : [1960] 1 SCR 580 [LNIND 1959 SC
143], per Subba Rao J.
3 Creednz v Governor General [1981] 1 NZLR 172.
4 Schwartz, American Administrative Law, 1962, p 92.
5 Gullapalli Nageswara Rao v APSRTC AIR 1959 SC 308 [LNIND 1958 SC 139]: [1959] Supp 1 SCR 319 : (1959) II MLJ 156,
Subba Rao J.
6 Gullapalli Nageswararao v State of Andhra Pradesh AIR 1959 SC 1376 [LNIND 1959 SC 143]: [1960] 1 SCR 580 [LNIND 1959
SC 143], per Subba Rao J.
7 State of Uttar Pradesh v Mohammad Nooh AIR 1958 SC 86 [LNIND 1957 SC 99]: [1958] 1 SCR 595 [LNIND 1957 SC 99], per
SR Das CJI.
8 Dc Daubusanimabus, 14, 22, J-P Migne, PI 42 110.
9 Marshal, Natural Justice, pp 17-20.
10 HWR Wade, Administrative Law, fifth edn, p 441.
11 Board of Education v Rice [1911] AC 179, 182 (HL), per Lord Loreburn J.
12 Nakkuda Ali v Jayaratne [1951] AC 66 (PC).

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13 Maneka Gandhi v Union of India AIR 1978 SC 597 [LNIND 1978 SC 25], 629-30, per Bhagwati J.
14 Kanda v Government of Malaya [1962] AC 322, 327, per Lord Denning.
15 Lapointe v L’ Assn [1906] AC 535, 539 (PC), per Lord Macnaughtan.
16 Indian Iron & Steel Co Ltd v Workmen (1958) 1 LLJ 260 [LNIND 1957 SC 105] (SC), per SK Das J.
17 Cf Hari v Deputy Commr of Police AIR 1956 SC 559 [LNIND 1956 SC 42], per Sinha J.
18 Mukhtar Singh v State of Uttar Pradesh AIR 1957 All 297 (DB), per Agarwala J.
19 Lakshmi Narain Gupta v AN Puri AIR 1954 Cal 335 [LNIND 1953 CAL 29], per Bose J.
20 Lalta Prasad v Inspector General of Police AIR 1954 All 438 [LNIND 1953 ALL 311] (DB), per Mootham J.
21 Russel v Duke of Norfolk [1949] 1 All ER 109 (CA).
22 Maneka Gandhi v Union of India AIR 1978 SC 597 [LNIND 1978 SC 25], 630, per Bhagwati J.
23 Union of India v TR Varma (1958) 2 LLJ 259 [LNIND 1957 SC 91], 264 : AIR 1957 SC 882 [LNIND 1957 SC 91] (SC), per
Venkatarama Ayyar J.
24 Cf Union of India v TR Verma (1958) 2 LLJ 259 [LNIND 1957 SC 91], 263, per Venkatarama Ayyar J.
25 Technological Institute of Textiles v Workmen (1972) 1 LLJ 654 [LNIND 1972 SC 141] : AIR 1972 SC 1933 [LNIND 1972 SC
141] (SC), per Vaidialingam J.
26 Dr SK Barman Dabur Pvt Ltd v Workmen (1967) 2 LLJ 863 [LNIND 1967 SC 214] (SC), per Bhargava J.
27 Elite Engineering & General Works v LC 1969 Lab IC 58, 61 (P&H), per Pandit J.
28 Commonwealth Trust Ltd v IT 1968 Lab IC 57 (Ker), per Govinda Nair J.
29 Punjab Woollen Textile Mill v ITL 1968 Lab IC 763 (P&H), per Pandit J.
30 State of Uttar Pradesh v Vijay Anand AIR 1963 SC 946 [LNIND 1962 SC 127], 952, per Subba Rao J.
31 Wasudeo Laxman Nandanwar v Union of India 1974 Lab IC 141 (Bom) (DB), per Padhye J.
32 Bareilly Electricity Co Ltd v Workmen (1971) 2 LLJ 407 [LNIND 1971 SC 383], 416-17 (SC), per Jaganmohan Reddy J.
33 Janki Nath Sarangi v State of Orissa (1970) 1 LLJ 356 [LNIND 1969 SC 115], 358 (SC), per Hidayatullah CJI.
34 Western India Match Co Ltd v IT (1962) 1 LLJ 629 (SC), per Gajendragadkar J.
35 Indian Farmers Fertiliser Co-op Ltd v IT 1991 Lab IC 1747,1767 (All), per Mehrotra J.
36 R Fulham, Hammersmith and Kensington Rent Tribunal, ex p Gormely [1951] 2 All ER 1030, 1034.
37 Lazarus Estates Ltd v Beasley [1956] 1 All ER 341, 345, per Denning LJ.
38 R v Leicester Recorder [1947] 1 All ER 928, per Lord Goddard CJ.
39 SA de Smith, Judicial Review Administrative Action, fourth edn, p 409.
40 Century Spg and Mfg Co v Ulhasnagar MC AIR 1971 SC 1021 [LNIND 1970 SC 629], 1023, per Shah J.
41 Exen Industries:v CCIE AIR 1971 SC 1025, 1027-28, per Mitter J.
42 Punjab National Bank Lid v IT (1957) 1 LLJ 455 [LNIND 1956 SC 113] (SC), per Ghularn Hasan J.
43 TB Ibrahim v Regional Transport Autority, Tanjore (1953) SCR 290 [LNIND 1952 SC 81] (SC), per Ghulam Hasan J.
44 Jatish Chandra Ghosh v Hari Sadhan Mukherjee AIR 1961 SC 613 [LNIND 1961 SC 19], per Sinha CJI.
45 British India Corpn v IT AIR 1957 SC 354, 356, per Bhagwati J.
46 Cf KK Kochunni v State of Madras AIR 1959 SC 725 [LNIND 1959 SC 27], per SR Das CJI.
47 Dwarka v ITO (1965) 2 SCA 868 [LNIND 1965 SC 107], 879.
48 Karnani Properties Ltd v State of West Bengal 1990 Lab IC 1677 [LNIND 1990 SC 449], 1683 (SC), per SC Agrawal J.
49 MSM Sharma v Shree Krishna Sinha AIR 1960 SC 1186 [LNIND 1960 SC 168]: [1961] 1 SCR 96 [LNIND 1960 SC 168], per
Sinha CJI.
50 Daryao v State of Uttar Pradesh AIR 1961 SC 1457 [LNIND 1961 SC 133]: [1962] 1 SCR 574 [LNIND 1961 SC 133], per
Gajendragadkar J.
51 Devilal Modi v Sales Tax Officcer AIR 1965 SC 1150 [LNIND 1964 SC 262], per Gajendragadhar CJI.
52 Madhya Pradesh IK Sangh v State of MP (1972) 1 LLJ 374 (MP) (DB), per Raina J.

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53 Daryao v State of UP AIR 1961 SC 1457 [LNIND 1961 SC 133], 1465-66, per Gajendragadkar J.
54 Hoshnak Singh v Union of India AIR 1979 SC 1328 [LNIND 1979 SC 156], 1332 (SC), per Desai J.
55 State of Uttar Pradesh v Lal Chand (1993) 2 LLJ 724 [LNIND 1993 SC 109], 730-31 (SC), per Venkatachala J.
56 Daryao v State of Uttar Pradesh AIR 1961 (SC) 1457 [LNIND 1961 SC 133], 1465-66, per Gajendragadkar J.
57 Sone Singh v State Industrial Court 1974 Lab IC 784 -85 (MP) (DB), per GP Singh J.
58 Bishnu Charan Mohanty v State of Orissa (1973) 2 LLJ 528, 535-36 (Ori) (DB), per GK Misra CJ.
59 Sone Singh v State Industrial Court 1974 Lab IC 784,786 (MP) (DB), per GP Singh J.
60 Gulabchand v State of Gujarat AIR 1965 SC 1153 [LNIND 1964 SC 351]: [1965] 2 SCR 547 [LNIND 1964 SC 351], per Subba
Rao J.
61 Northern Rly CCS Ltd v IT (1967) 2 LLJ 46, 51 : AIR 1967 SC 1182 [LNIND 1967 SC 419] (SC), per Bhargava J.
62 Workmen of Cochin Port Trust v Bot, CPT (1978) 2 LLJ 161 [LNIND 1978 SC 157] : AIR 1978 SC 1283 [LNIND 1978 SC 158]
(SC), per Untwalia J.
63 Ahmedabad Mfg & Calico Ptg Co Ltd v Workmen (1981) 1 LLJ 489 [LNIND 1981 SC 149], 492 AIR 1981 SC 960 [LNIND 1981
SC 149] (SC), per Misra J.
64 Paschimbanga TMK Samity v State of WB 1994 Lab IC 2, 22 (Cal) (DB).
65 Manganese Ore (India) Ltd v Union of India (2001) 4 LLN 249 (Bom), per Gundewar J.
66 GThiagarajan v JB Engg Works (2002) 2 LLN 98 (Bom), per Kochar J.
67 Mgmt of Heavy Engineering Corporation v IT (2002) 2 LLN 659 (Jhar), per Mukhopadhyaya J.
68 Charanjit Lal v Union of India [1950] SCR 869 [LNIND 1950 SC 55], 899 : AIR 1951 SC 41 [LNIND 1950 SC 55], per
Mukherjea J.
69 Ratan Chandra Sammanta v Union of India (1993) 2 LLJ 676 [LNIND 1993 SC 461], 678 (SC), per Sahai J.
70 Samrath Transport Co v Regional Tpt Authority AIR 1961 SC 93 [LNIND 1960 SC 383], 95, per Subba Rao J.
71 West Bengal PWE Union v Art Union Ptg.Works Pvt Ltd (1962) 2 LLJ 62 [LNIND 1961 CAL 193] (Cal), per BN Banerjee J.
72 Indian Press Mazdoor Union v Indian Press Pvt Ltd 1975 Lab IC 506 (All) (DB) per CSP Singh J.
73 ITC Employees Assn, Bangalore v State of Karnataka (1981) 1 LLJ 431, 438 (Kant), per Bopanna J.
74 State Transport Accounts Assn v SRTC 1990 Lab IC 1378, 1387 (Ori) (DB), per Mohapatra J.
75 Paschimbanga Tehsil Mohurrir Kalyan Samity v State of WB 1994 Lab IC 2, 22-23 (Cal) (DB).
76 Govt Press Employees’ Assn v Govt of Mysore (1961) 2 LLJ 583, 585 (Mys) (DB), per Narayana Pai J.
77 Bharat Bank Ltd v Employees (1950) 1 LLJ 921 [LNIND 1950 SC 4] (SC), per Kania CJ.
78 Cordon Woodroffi & Co Pvt Ltd v S Venugopal (1958) 1 LLJ 300 (Mad), per Rajagopala Ayyangar J.
79 Engineering Mazdoor Sabha v Hind Cycles Ltd (1962) 2 LLJ 760 [LNIND 1962 SC 337] (SC), per Gajendragadkar J.
80 Workmen of SF Co Ltd v DLO (1966) 1 LLJ 236 (Ker), per VP Gopalan Nambiyar J.
81 Udit NS Malpaharia v Board of Revenue, Bihar [1963] Supp 1 SCR 676, per Subba Rao J.
82 K Srinath v State of Mysore 1973 Lab IC 615 -16 (Mys) (DB), per Narayana Pai J.
83 Gopichand K Sharma v WM, Western Rly Loco Shops (1965) 2 LLJ 623 (Guj) (DB), per Bhagwati J.
84 Hari Vishnu Kamath v Amhad Ishaque AIR 1955 SC 233 [LNIND 1954 SC 174], per Venkatarama Ayyar J.
85 Shibani v Promotha AIR 1952 Cal 238 [LNIND 1951 CAL 250] (241), per Bose J.
86 Sri Krishna Rice Mills v Deputy Director AIR 1960 AP 431 [LNIND 1959 AP 169] (DB), per Chandra Reddy CJ.
87 Badrul Sharma v Custodian of EP AIR 1957 MP 32 [LNIND 1957 MP 13] (DB), per Samvatsar J.
88 Bimal Chand v Chairman, Jiagunj Azimgunj Municipality AIR 1954 Cal 285 [LNIND 1953 CAL 193], per Sinha J.
89 Bhagwati Kuer v Lal Bahadur AIR 1955 All 422 [LNIND 1955 ALL 28], 423 (DB), per Mukerji J.
90 Makhan Lal Chakraborty v S K Chatterjee AIR 1954 Cal, 208, 210 per Sinha J.
91 MAV Prasad Rao v Union of India 1973 Lab IC 1310, 1322 (AP) (FB), per Ekbote CJ.
92 Teen Ali Tea Estate, Naharkatia v State of Assam 1991 Lab IC 2149, 2151 (Gau) (DB).

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93 ITC Ltd v Non-Pensioners’ Assn (1996) 1 LLJ 1106, 1108 (AP) (DB), per Hanumanthappa J.
94 Nagabhushanam v Ankam Anakaiah AIR 1968 AP 74 [LNIND 1966 AP 187], 80 (DB).
95 Raymond Engineering Works v Union of India AIR 1970 Del 5 [LNIND 1969 DEL 80], 13, per Rangarajan J.
96 Makhan Lal Chakraborty v SK Chatterjee AIR 1954 Cal 208 [LNIND 1953 CAL 165], 210, per Sinha J.
97 Samarendra Prasad Chakravarty v Calcutta University AIR 1953 Cal 172 [LNIND 1951 CAL 62].
98 State Bank of Bikaner & Jaipur v VS Mehta 1986 Lab IC 1820 (Raj) (DB), per Jain J.
99 Orissa Road Transport Co Ltd v Lalmohan Majhi (1974) 2 LLJ 49 [LNIND 1973 ORI 81], 52 (Dei) (DB), per RN Misra J.
1 Union of India v Rajasthan Anushakti Karamchari Union, Rawatbhata 1977 Lab IC 155, 157 (Raj), per Joshi J.
2 General SC of India Ltd v GS, Goa DL Union (1984) 1 LLJ 56 [LNIND 1982 BOM 219], 65-66 (Bom) (DB), per Jahagirdar J.
3 Kantamana v GM, SE Rly 1984 Lab IC 736,738 (Nagpur Bench), per Jamdar J.
4 Aswini Kumar v Director of Public Instruction (1966) 2 LLJ 277 (Cal), per D Basu J.
5 Shiv Singh v State Transport Appellate Tribunal AIR 1969 All 14 [LNIND 1967 ALL 158], 18 (DB), per Gangeshwar Prasad J.
6 Revenue Patwaris Union v State of Punjab AIR 1962 Punj 55 (DB).
7 MS Ganapathi Nadar & Som Factory v State of Madras AIR 1957 Mad 616 [LNIND 1957 MAD 47], per Rajagopala Ayyangar J.
8 Somu Kumar Chatterjee v District STC Engineer 1970 Lab IC 629, 635 (Pat) (DB), per BN Jha J.
9 Management of Singareni Collieries Co Ltd v IT (1975) 1 LLJ 470 (AP) (DB), per Sreeramulu J.
10 Transport Corpn of India v State of Maharashtra, 1993 Lab IC 507, 514 (Bom), per AA Cazi J.
11 Sohan Singh v State AIR 1955 Pepsu 1 (FB), per Teja Singh CJ.
12 Sitaram Reddy v Chinna Ram Reddy AIR 1959 AP 159 [LNIND 1958 AP 46] (DB), per Jaganmohan Reddy J.
13 Tinkori Das v LA Collector, Alipore (1966) 70 Cal WN 1100, per Sinha CJ.
14 M Abdul Salam v State of Kerala 1973 Lab IC 541,545 (Ker), per Balakrishna Eradi J.
15 Himatsingh Kubersingh v Board of Revenue AIR 1966 MP 43, 48 (FB).
16 Laxman Singh v Raj Pramukh of Madhya Bharat AIR 1953 MB 54 (DB), per Dixit J.
17 SAP Abbas v State of Bihar 1970 Lab IC 1518, 1528 (Pat) (FB), per Misra CJ.
18 Jorhat Tea Co Ltd v Workmen 1971 Lab IC 1459, 1461 (Assam & Nagaland) (DB), per Pathak J.
19 Bipin Behari Das v State of Orissa 1970 Lab IC 948 (Ori) (DB), per TK Misra CJ.
20 Somanath Sahu v State of Orissa (1965) 1 LLJ 349 (Ori) (DB), per Mishra J.
21 Kanji Kurji v Kala Gopal (1957) ILR Bom 874, per Tendolkar J.
22 Shankar Chakravarti v Britannia Biscuit Co Ltd 1979 Lab IC 1192 [LNIND 1979 SC 276], 1205 (SC), per Desai J.
23 Santak Singh v 9th IT 1984 Lab IC 817, 821 (Cal), per Amitabha Dutta J.
24 Jagat Singh Choudhury v MPEB 1969 Lab IC 546 -47 (MP) (DB), per GP Singh J.
25 Kerala Khadi & Village Industries Board v IT AIR 1965 Ker 112 -13, pervaidialingam J.
26 Murugalli Estate v IT (1965) 2 LLJ 164 (Mad), per Veeraswarni J.
27 Punjab & Sind Bank Ltd v Rameshwar Dayal (1958) 2 LLJ 107 (Punj), per Falshaw J.
28 Samaj represented by Editor v State of Orissa 1990 Lab IC 1867 (Ori) (DB), per Mahapatra J.
29 Tarang Theatre v State of Uttar Pradesh 1992 Lab IC 1085, 1089 (All), per ML Bhat J.
30 Jagannath Dwarkanathnathe v State of Maharashtra 1973 Lab IC 682, 693 (Bom) (DB), per Vaidya J.
31 Glaxo Laboratories (India) Ltd v Glaxo Staff Assn 1974 Lab IC 765 -66 (All), per KN Singh J.
32 National Union of Comml Employees v State of Maharashtra 1968 Lab IC 1191 [LNIND 1966 BOM 62] (Bom), per Thakker J. .
33 Hamdard (Wakf) Laboratories v Raunaq Hussain 1971 Lab IC 405, 410 (Del) (DB), per Khanna CJ.
34 Suprova Sundari Devi v Commr of Income-tax AIR 1958 Cal 641 [LNIND 1957 CAL 212]-421 per Sinha J.
35 Mula v Babu Ram AIR 1960 All 573 [LNIND 1959 ALL 112], 575, per Dhavan J.

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36 Union of India v LC (1970) 1 LLJ 184, 187 (P&H), per Tuli J.

37 Patna Electric Supply Co v Labour Commr 1971 Lab IC 187 (Pat) (DB), per Untwalia J.
38 Pioneer Traders v Chief Controller, Imports and Exports AIR 1963 SC 734 [LNIND 1962 SC 319], 745, per Wanchoo J.
39 Union of India v LC (1970) 1 LLJ 184, 187 (P&H), per Balraj Tuli J.
40 St Arunachalam Pillai v Southern Roadways Ltd AIR 1960 SC 1191 [LNIND 1960 SC 147], 1194, per Imam J.
41 Imperial Tobacco Co of India Ltd v State of WB 1971 Lab IC 305 [LNIND 1970 CAL 197]-06 (Cal), per D Basu J.
42 PJ Joseph v Assistant Excise Commr AIR 1953 Tr & Coch 146, 154 (DB), per Subramania Iyer J.
43 LH Sugar Factories and OM Pvt Ltd v State of UP (1961) 1 LLJ 686 (All), per Dhawan J.
44 Lokesh Chandra v Commr, Rohilkhand Division AIR 1956 All 147 [LNIND 1955 ALL 200]-48, per Mehrotra J.
45 Nimar Cotton Press v Sales Tax Officer AIR 1956 Nag 27, 31 (DB).
46 National Union of Commercial Employees v State of Maharashtra 1968 Lab IC 1191 [LNIND 1966 BOM 62], 1197 (Bom), per
Thakker J.
47 Board of High School v Ram Krishna Verma AIR 1959 All 226 [LNIND 1958 ALL 129], 229-30 (DB), per RN Gurtu J.
48 Gangadhar Narsingdas Agrawal v Union of India AIR 1967 Goa 142, 148, per Jetley J.
49 Lt Gen. RK Anand v Union of India 1992 Lab IC 185, 197 (Del) (DB), per Wadhwa J.
50 KN Sankunny Pillai v Paul AIR 1953 Tr Coch 551-52, per Subramania Iyer J.
51 Sophia Reuben v V.V. Gokhale (1968) 2 LLJ 79 (Bom) (DB), per Nain J.
52 AN D’Silva v Union of India AIR 1962 SC 1130 [LNIND 1961 SC 380], 1132, per Shah J.
53 Naveenchandra S Shah v Ahmedabad CDS Ltd (1979) 1 LLJ 60 [LNIND 1977 GUJ 35], 76-80 (Guj) (DB), per DA Desai J.
54 Tapan Kumar Jena v General Manager, Calcutta Telephones 1981 Lab IC (NOC) 68 (Cal) (DB).
55 Vasanti M Shah v All India HFMCS Ltd (1986) 1 LLJ 69, 77-78 (Guj) (DB), per Majmudar J.
56 Stephen’s Commentaries, Vol 1, 20th edn, p 591.
57 Halsbury’s Law of England, Vol 1, fourth edn, p 111, para 89.
58 Karnal-Kaithal CTS Ltd v State of Punjab (1959) 1 LLJ 274, 280-81 (Punj) (DB), per AN Bhandari CJ.
59 George’s Creek Coal & Co v Allegnay Country [1882] 59 Mad 225.
60 Praga Tools Corpn v CA Imanual (1969) 2 LLJ 749 [LNIND 1969 SC 80], 754 (SC), per Shelat J.
61 State of West Bengal v Kalyani Chowdhury 1970 Lab IC 672 [LNIND 1969 CAL 255]-73 (Cal) (DB), per Ajay K Basu J.
62 Sohan Lal v Union of India AIR 1957 SC 529 [LNIND 1957 SC 27], 532.
63 Workmen of B & C Mills v State of TN (1982) 2 LLJ 90 [LNIND 1982 MAD 133], 97-98 (Mad) (DB), per Padrnanabhan J.
64 Perfect P & SC Pvt Ltd v Bombay NGW Union 1985 Lab IC 82, 95 (Bom), per Dharrnadhikari J.
65 State of Bombay v Hospital Mazdoor Sabha (1960) 1 LLJ 251 [LNIND 1960 SC 19] (SC), per Gajendragadkar J.
66 Vinod Kumar v State of Himachal Pradesh AIR 1959 SC 223 [LNIND 1958 SC 127], per Das CJI.
67 Karnal-Kaithal Co-op Transport Society Ltd v State of Punjab (1959) 1 LLJ 274 -75 (DB), per Bhandari CJ.
68 Rattan Chandra Nayak v Adhar Biswas AIR 1952 Cal 72 [LNIND 1951 CAL 160], Bose J.
69 Shankarlal Jadhavji Joshi v Municipal Commr AIR 1939 Bom 431, per BJ Wadia J.
70 Mohammad v High Commr for India AIR 1951 Nagpur 38 (DB).
71 Bhagwan Dass v Eastern Rly (1958) 1 LLJ 324 (Pat), per Das CJI.
72 KN Gurswamy v State of Mysore AIR 1954 SC 592 [LNIND 1954 SC 104], per Bose J.
73 East India Commercial Co Ltd v Collector of Customs AIR 1957 Cal 606 [LNIND 1957 CAL 36], per Sinha J.
74 DN Banerjee v PR Mukherjee (1953) 1 LLJ 195 [LNIND 1952 SC 85] (SC), per Chandrasekhara Aiyar J.
75 Harnath v State of Hyderabad AIR 1958 AP 222 (DB), per Jagammohan Reddy J.
76 Asst Collector of Central Excise v Dunlop India Ltd AIR 1985 SC 330 [LNIND 1984 SC 367], 332, per Chinnappa Reddy J.
77 Karnal-Kaithal CTS Ltd v State of Punjab (1959) 1 LLJ 274, 277 (Punj) (DB), per Bhandari CJ.

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78 Himmatal Harilal Mehta v State of MP AIR 1954 SC 403 [LNIND 1954 SC 44], per Mahajan CJI.
79 Sushil Kumar Agrawal v Titanore Components Ltd (1996) 2 LLJ 257 [LNIND 1995 ALL 910], 260 (All) (DB).
80 Rai Shivendra Bahadur v Nalanda College (1962) 1 LLJ 247 [LNIND 1961 SC 391] (SC), per Kapur J.
81 Workmen of B & C Mills v State of TN (1982) 2 LLJ 90 [LNIND 1982 MAD 133], 98 (Mad) (DB), per Padmanabhan J.
82 SA de Smith, Judicial Review of Administrative Action, fourth edn, p 546.
83 Fraga Tools Corpn v CA Imanual (1969) 2 LLJ 749 [LNIND 1969 SC 80] (SC), per Shdat J.
84 Jagdish Chand v Labour Commr (1995) 2 LLJ 410 [LNIND 1994 PNH 187], 413 (P&H), per Singhvi J.
85 A Sarasawathi Amma v Kerala SC Bank 1991 Lab IC 367, 370-71 (Ker), per Radhakrishna Menon J.
86 Anandi Mukta SSMVSJMS Trust v VR Rudani 1989 Lab IC 1550 [LNIND 1989 SC 295], 1555-56 (SC), per K Jagannatha Shetty J.
87 T Gattaiah v Commr of Labour 1981 Lab IC 942 [LNIND 1981 AP 38], 951-52 (AP), per PA Choudhary J.
88 Eid Parry Staffs’Assn v Deputy Commr of Labour, Madras (1985) 1 LLJ 340, 343 (AP) : 1984 (1) ALT 36, per Jeevan eddy J.
89 IDL Chemicals Karmika Sangam v State of AP 1985 Lab IC 1273, 1277 (AP), per Jagannadha Rao J.
90 Miscellaneous Mazdoor Sabha v State of Gujrat (1993) 1 LLJ 695 [LNIND 1992 GUJ 7], 708 (Guj) (DB), per Majmudar J.
91 National Seeds Corporation Employee’s Union v National Seeds Corpn (1973) 1 LLJ 254, 257 (Del) (DB) : AIR 1972 Del 292
[LNIND 1972 DEL 40], per Prakash Narain J.
92 Scindia Steam Navigation Co Ltd v SE Union 1983 Lab IC 759,764 (Bom) (DB), per Chandurkar J.
93 Administrative Law, fifth edn, p 208.
94 Ganesh Dutt v State of Haryana (2001) 1 SLR 222 (P&H) (DB).
95 Textile Mazdoor Union v State of Haryana (2001) 4 LLN 1146 (P&H), per Sudhalkar J.
1 Amar Nath Dey v State of West Bengal (2002) 2 LLN 137 (Cal), per Seth J.
2 Narkesari PK Sangh v Narkesari Prakashan Ltd (1999) 2 LLJ 145 [LNIND 1998 SC 30] (SC).
3 Anaimalai National Estate Workers Union v PATN (2002) 4 LLN 530, 540 (Mad), per Sivasubramaniam J.
4 SA de Smith, Judicial Review of Administrative Action, founh edn, p 546.
5 T Gattaiah v Commr of Labour & anor (1981) 2 LLJ 54 (AP), per Chowdary J.
6 Roche Anglo-French Employees Union v PB Benne 1987 Lab IC 924,928 (Bom) (DB), per Shah J.
7 Madras Labour Union v Binny Ltd (1995) 1 LLJ 588 [LNIND 1994 MAD 552], 601 (Mad) (DB) : 1995 (1) CTC 73 [LNIND 1994
MAD 552], per Srinivasan J.
8 Bharat Petroleum Corpn v Petroleum Employees Union (2003) 3 LLJ 229 (Mad) (DB) : (2004) 3 MLJ 456 [LNIND 2004 MAD
507].
9 Rajasthan State Electricity Board v Mohan Lal, AIR 1967 SC 1857 [LNIND 1967 SC 109] (1863-4) : (1968) 1 LLJ 257 [LNIND
1967 SC 110], per Shah J.
10 Bharat Petroleum Corpn v Petroleum Employees Union, (2004) 3 LLJ 821 (Mad), per Subhashan Reddy CJ.
11 Bharat Petroleum Corpn v Petroleum Empoyees Union, (2012) 2 LLJ 415 (Bom) (DB).
12 Som Prakash Rekhi v Union of India, AIR 1981 SC 212 [LNIND 1980 SC 454]: (1981) 1 LLJ 79 [LNIND 1980 SC 454] : (1981) 1
SCC 449 [LNIND 1980 SC 454], per Iyer J.
13 Anandi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust v VR Rudani, AIR 1989 SC 1607
[LNIND 1989 SC 248]: (1989) 2 SCC 691 [LNIND 1989 SC 295], per Jagannatha Shetty J.
14 Sukhdev Singh v Bhgatram, AIR 1975 SC 1331 [LNIND 1975 SC 79]: (1975) 1 SCC 421 [LNIND 1975 SC 79], per Ray CJI.
15 Ajay Hasia v Khalid Mujib Sehrawardi, AIR 1981 SC 487 [LNIND 1980 SC 456]: (1981) 17 SCC 722, per Bhagwati J.
16 Som Prakash Rekhi v Union of India, AIR 1981 SC 212 [LNIND 1980 SC 454]: (1981) 417 SCC 722, 1 LLJ 79 : (1981) 1 SCC
449 [LNIND 1980 SC 454], per Iyer J.
17 Tekraj Vasandi v Union of India, AIR 1988 SC 469 [LNIND 1987 SC 838]: (1988) 1 LLJ 341 [LNIND 1987 SC 838] : 1987 (2)
SCALE 1278, per Ranganath Misra J.
18 Rao, EM (2015), Industrial Jurisprudence: A Critical Commentary, 2nd ed., Lexisnexis, pp. 58-9.
19 Basant Kumar Sarkar v Eagle Rolling Mills (1964) 2 LLJ 105 [LNIND 1964 SC 52], 108 (SC) : AIR 1964 SC 1260 [LNIND 1964
SC 52], per Gajendragadkar CJ.

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20 Rohtas Industries Ltd v RIS Union (1976) 1 LLJ 274 [LNIND 1975 SC 523], 285-86 (SC) : AIR 1976 SC 425 [LNIND 1975 SC
523], per Krishna Iyer J.
21 Bihar RVPF Kamgar Union v State of Bihar AIR 1987 SC 1875 : (1987) 3 SCC 512, per Parhak CJI.
22 Schwartz, Bernard and Wade, Legal Control of Governnment, pp 216-217.
23 Halsbury’s Laws of England, Vol, II, third edn, p 84.
24 R v Bishop of Sarum [1916] 1 KB 466, 470.
25 Vol II, third edn, p 107.
26 VST Industries Ltd v VSTI Workers’ Union (2001) 1 LLJ 470 [LNIND 2000 SC 1796] (SC), per Rajendra Babu J.
27 Basant Kumar Sarkar v Eagle Rolling Mills AIR 1964 SC 1260 [LNIND 1964 SC 52].
28 Sain Steel Products v Naipal Singh (2001) 2 LLN 859 (SC).
29 Mukul Kumar Shukla v Hindustan Times (2002) 4 LLN 1106 (Del), per Sikri J.
30 Workmen, Pepsico India Holdings Ltd v DLC (2000) 2 LLJ 523 (All) (DB), per Katju J.
31 Assn of PNB Employees v DGM, Punjab National Bank (2002) 4 LLN 1115 (MP), per Menon J.
32 Nirmalendu Roy v SAIL (2000) 2 CLJ 283(Cal) (DB).
33 Maruti Udyog Employees Union v State of Haryana & ors (2002) 1 Lin 428(P&H), per Sudhalkar J.
34 Balakrishna Transport v District Superintendent of Police 1991 Lab IC 314, 317 (Ker), per K Sreedharan J.
35 Halsbury’s Laws of England, Vall, fourth edn, p 163, para 169.
36 R v Speyer [1916] 1 KB 595, per Lord Reading CJ.
37 University of Mysore v Govinda Rao AIR 1965 SC 491 [LNIND 1963 SC 341],494 : [1964] 4 SCR 575 [LNIND 1963 SC 341],
per Gajendragadkar J.
38 V Sasitharan v State of Tamil Nadu (1996) 1 LLJ 647 [LNIND 1995 MAD 860], 654 (Mad), per AR Lakshmanan J.
39 Mocherla Venkataraya v Sivarama Prasad AIR 1961 AP 250 [LNIND 1960 AP 77] (DB), per Chandra Reddy CJ.
40 Rajendarkumar v State of Madhya Pradesh AIR 1957 MP 60 [LNIND 1957 MP 35], 66, per Newaskar J.
41 Vishwanath v State of Rajasthan AIR 1957 Raj 75 [LNIND 1956 RAJ 67] (DB), per Wanchoo CJ.
42 Anand Bihari Mishra v Ram Sahay AIR 1952 MB 31 (DB), per Shinde J.
43 A Ramachandran v A Alagiriswami AIR 1961 Mad 450 [LNIND 1960 MAD 97], 460 (DB), per Balakrishna Ayyar J.
44 Jamalpur Arya Samaj v D Ram AIR 1954 Pat 297, 299 (DB).
45 R v Greene [1842] 2 QB 460.
46 Amerendra v Narendra (1952) 56 Cal WN 449.
47 Statesman Pvt Ltd v HR Deb 1968 Lab IC 1525 (SC), per Hidayatullah CJI.
48 Tul-Par Machine Tool Co v Joginder Pal 1983 Lab IC 1615, 1625 (P&H) (FB), per SS Sandhawalia CJ.
49 VD Deshpande v State of Hyderabad AIR 1955 Hyd 36 (DB), per Misra CJ.
50 Shiam Sunder v State of Punjab AIR 1958 Punj 128, per Bishan Narian J.
51 Parmatma Ram v Siri Chand AIR 1962 HP 19 [LNIND 1961 HP 6], 24, per Kapoor CJ.
52 V Sasitharan v State of Tamil Nadu (1996) 1 LLJ 647 [LNIND 1995 MAD 860], 654 (Mad), per AR Lakshmanan J.
53 Shiam Sunder v State of Punjab AIR 1958 Punj 128, per Bishan Narain J.
54 Kashinath v State of Bombay AIR 1954 Born 41 (DB), per Chagla CJ.
55 Statesman Pvt Ltd v HR Deb 1968 Lab IC 1525 (SC), per Hidayatullah CJI.
56 Pulin Behari v Emperor [1912] 15 Cal LJ, 517 (574).
57 Gokaraju Rangaraju v State of Andhra Pradesh AIR 1981 SC 1473 [LNIND 1981 SC 236], per Chinnapa Reddy J.
58 Chauthmal v State of Rajasthan AIR 1953 Raj 73 [LNIND 1952 RAJ 118]-74 (DB), per Bafna J.
59 Hari Shankar Prasad Gupta v Sukheo Prasad AIR 1954 All 227 [LNIND 1953 ALL 264] (FB), per Malik CJ.
60 Ahmedabad Mfg Calico Prtg Co Ltd v Ramtahel Ramanand 1972 Lab IC 864 [LNIND 1972 SC 226], 869 (SC), per Dua J.

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61 Chenaram v State of Rajasthan 1973 Lab IC 1201, 1210 (Raj), per Tyagi J.
62 Bhagwan Dass v CGLC (1963) 1 LLJ 632 (Punj), per Grover J.
63 Nagendra Nath Bora v Commr of Hills Division AIR 1958 SC 398 [LNIND 1958 SC 6], 413. per BP Sinha J.
64 Dalmia Jain Airways v Sukumar Mukherkjee AIR 1951 Cal 193 (SB), per Harries CJ.
65 Ganesh Sugar Mills Ltd v Shyam Behari Lall 1970 Lab IC 1352 (All), per Swarup J.
66 Municipal Corpn of Ahmedaabd v Hussainmiya Chandmiya 1987 Lab IC 1564 [LNIND 1986 GUJ 40], 1566 (Guj) (DB), per
Ahmadi J.
67 Satyanarayan Lakshminarayan Hegde v Malikarjun AIR 1960 SC 137, per KC Das Gupta J.
68 Rajkamal Kalamandir v IMPE Union (1963) 1 LLJ 318 [LNIND 1962 SC 261], 320 (SC), per Gajendragadkar J.
69 Filmistan Pvt Ltd v Balkrishan Bhiwa 1972 Lab IC 28, 31-32 (SC), per Vaidialingam J.
70 Krishna Mahadev v PH Lala (1970) 1 LLJ 68 -70 (Bom) (DB), per Madon J.
71 Sarpanch, Lonand Gram Panchayat v Ramgiri Gosavi AIR 1968 SC 222 [LNIND 1967 SC 160]-24, per Bachawat J.
72 MD Thakur v Labour Appellate Tribunal (1956) 1 LLJ 14 (Bom) (DB), per Bavdekar J.
73 Hari Vishnu Kamath v Ahmad Ishaque AIR 1955 SC 233 [LNIND 1954 SC 174], per Venkatarama Ayyar J.
74 Malabar Products Ltd v IT (1958) 1 LLJ 47, 49 (Ker) (DB), per MS Menon J.
75 Wakefield Estate v Maruthan Uchi (1959) 1 LLJ 397 (Mad), per Balakrishna Ayyar J.
76 Karam Chand Thapar & Bros Pvt Ltd v Workmen (1968) 2 LLJ 261 (MP) (DB), per Bhave J.
77 Surindra Nath Bibra v Stephen Court Ltd AIR 1966 SC 1361 [LNIND 1966 SC 41], per Sikri J.
78 Ahmedabad Mfg & Calico Prtg Co Ltd v R Ramnand 1972 Lab IC 864 [LNIND 1972 SC 226], 870 (SC), per Dua J.
79 Bharat Bank Ltd v Employees (1950) 1 LLJ 921 [LNIND 1950 SC 4] (SC), per Kania CJI.
80 Air Corpn Employees’ Union v DV Vyas (1962) 1 LLJ 31 [LNIND 1961 BOM 46], 40 (Bom) (DB), per Chandrachud J.
81 Engineering Mazdoor Sabha v Hind Cycles Ltd (1962) 2 LLJ 760 [LNIND 1962 SC 337], 768 (SC), per Gajendragadkar J.
82 Rambhau Sakharam Nagre v DG Tatke (1959) 1 LLJ 576 (Bom) (DB), per Vyas J.
83 Jairam Sonu Shogale v New India Rayon Mill Co Ltd (1958) 1 LLJ 28 (Bom) (DB), per Dixit J.
84 Harnam Singh v Punjab SEB (2001) 411N 1232 (SC).
85 Narayan Deju Puthrani v Labour Appellate Tribunal (1957) 2 LLJ 245 [LNIND 1956 BOM 167] (Bom) (DB), per Shah J.
86 Mgmt ITC Ltd v PO, LC 1978 Lab IC 1256 [LNIND 1978 SC 170], 1259 (SC), per Untwalia J.
87 A Raghavamma v A Chenchamma AIR 1964 SC 134, 142, per Subba Rao J.
88 A Raghavamma v A Chenchamma AIR 1964 SC 136 [LNIND 1963 SC 101], 142 : [1964] 2 SCR 933 [LNIND 1963 SC 101], per
Subba Rao J.
89 Sardar Bahadur Sardar Indra Singh Trust v CIT AIR 1972 SC 34 [LNIND 1971 SC 409]-35, per Hegde J.
90 State of Assam v BK Das 1973 Lab IC 920, 925 (SC), per Alagiriswami J.
91 Rajkrushna Bose v Binod Kanungo AIR 1954 SC 202 [LNIND 1954 SC 17]: [1954] 1 SCR 913 [LNIND 1954 SC 17], per SR Das
J.
92 Sangram Singh v Election Tribunal AIR 1955 SC 425 [LNIND 1955 SC 2], 429 : [1955] 2 SCR 1 [LNIND 1955 SC 2], per Bose J.
93 Durga Shankar v Raghuraj Singh AIR 1954 SC 520 [LNIND 1954 SC 97], per BK Mukherjea J.
1 Bengal Chemcial & Pharmaceutical Works Ltd v Employees (1959) 1 LLJ 413 [LNIND 1959 SC 13], 415 (SC), per Subba Rao J.
2 Bengal Chemical & Pharmaceutical Works Ltd v Employees (1959) 1 LLJ 413 [LNIND 1959 SC 13], 415 : AIR 1959 SC 633
[LNIND 1959 SC 13], per Subba Rao J.
3 Delhi Cloth & Gen. Mills Co Ltd v Shambhu Nath Mukherji 1977 Lab IC 1695 [LNIND 1977 SC 280], 1698 (SC), per Goswarni J.
4 Fuel Injection Ltd v Kamgar Sabha (1978) 1 LLJ 2104 (SC), per Krishna Iyer J.
5 Associated Cement Companies Ltd v PN Sharma (1965) 1 LLJ 433 [LNIND 1964 SC 346] (SC), per Gajendragadkar CJI.
6 Bharat Bank Ltd v Employees of Bharat Bank Ltd (1950) 1 LLJ 921 [LNIND 1950 SC 4], 929 (SC), per Mahajan J.
7 Engineering Mazdoor Sabha v Hind Cycles Ltd (1962) 2 LLJ 760 [LNIND 1962 SC 337] (SC), per Gajendragadkar J.

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8 Jaswant Sugar Mills Ltd v Lakshmi Chand (1963) 1 LLJ 524 [LNIND 1962 SC 308] : AIR 1963 SC 677 [LNIND 1962 SC 308],
per Shah J.
9 Associated Cement Companies Ltd v PN Sharma (1965) 1 LLJ 433 [LNIND 1964 SC 346] (SC). per Gajendragadkar J.
10 Bharat Bank Ltd v Employees (1950) 1 LLJ 921 [LNIND 1950 SC 4], 935-36 : AIR 1950 SC 188 [LNIND 1950 SC 4], per
Mahajan J.
11 Clerks of Calcutta Tramways v Calcutta Tramway Co Ltd (1956) 2 LLJ 450 [LNIND 1956 SC 79], 452 : AIR 1957 SC 78 [LNIND
1956 SC 79]: 1957 (1) An WR 23, per Govinda Menon J.
12 Bengal Chemical and Pharma Works Ltd v Employees (1959) 1 LLJ 413 [LNIND 1959 SC 13], 415 : AIR 1959 SC 633 [LNIND
1959 SC 13], per Subba Rao J.
13 Workmen of Meenakshi Mills Ltd v Meenakshi Mills Ltd (1992) 2 LLJ 294 [LNIND 1992 SC 411], 312 : AIR 1994 SC 2696
[LNIND 1992 SC 411]: 1992 (1) SCALE 1248 : (1992) 3 SCC 336 [LNIND 1992 SC 411], per SC Agrawal J.
14 Sarathy v State Bank of India (2000) 2 LLJ 661 [LNIND 2000 SC 896], 664 : AIR 2000 SC 2023 [LNIND 2000 SC 896]: (2000) 5
SCC 355 [LNIND 2000 SC 896], per Saghir Ahmed J.

End of Document

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 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER IV Procedure, Powers and Duties of Authorities

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER IV Procedure, Powers and Duties of Authorities

15[S. 17A. Commencement of the Award.—

(1) An award (including an arbitrational award) shall become enforceable on the expiry of thirty days from the date
of its publication under section 17 :

Provided that—

(a) if the appropriate Government is of opinion, in any case where the award has been given by a Labour Court
or Tribunal in relation to an industrial dispute to which it is a party; or
(b) if the Central Government is of opinion, in any case where the award has been given by a National Tribunal,

that it will be inexpedient on public grounds affecting national economy or social justice to give effect to
the whole or any part of the award, the appropriate Government, or as the case may be, the Central
Government may, by notification in the Official Gazette, declare that the award shall not become
enforceable on the expiry of the said period of thirty days.

(2) Where any declaration has been made in relation to an award under the proviso to sub-section (1), the appropriate
Government or the Central Government may, within ninety days from the date of publication of the award under
section 17, make an order rejecting or modifying the award, and shall, on the first available opportunity, lay the
award together with a copy of the order before the Legislature of the State, if the order has been made by a State
Government, or before Parliament, if the order has been made by the Central Government.
(3) Where any award as rejected or modified by an order made under sub-section (2) is laid before the Legislature of
a State or before Parliament, such award shall become enforceable on the expiry of fifteen days from the date on
which it is so laid; and where no order under sub-section (2) is made in pursuance of a declaration under the
proviso to sub-section (1), the award shall become enforceable on the expiry of the period of ninety days referred
to in sub-section (2).
(4) Subject to the provisions of sub-section (1) and sub-section (3) regarding the enforceability of an award, the
award shall come into operation with effect from such date as may be specified therein, but where no date is so
specified, it shall come into operation on the date when the award becomes enforceable under sub-section (1) or
sub-section (3), as the case may be].

LEGISLATION

Section 17A was inserted in the Act by s 34 read with the Schedule to the Industrial Disputes (Appellate Tribunal) Act
1950. That section again was repealed and in its place the present s 17A was substituted by s 12 of the Industrial Disputes
(Amendment & Miscellaneous Provisions) Act 1956.

SECTION 17A - STRUCK DOWN AS ULTRA VIRES THE CONSTITUTION

 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

This entire section together with sub-sections (1) to (4) was struck down by a single judge of Andhra Pradesh High Court
as being ultra vires the Constitution in Telugunadu WES Federation v Union of India , in which the learned judge
observed:

The Constitution has assigned the Courts the function of determining as to whether the laws made by the legislature are in
conformity with the provisions of the Constitution. In adjudicating the Constitutional validity of the statutes, the Courts discharge
an obligation which has been imposed on them by the Constitution. The Courts would be shirking their responsibility if they
hesitate to declare the provisions of a statute to be unconstitutional, even though those provisions are found to be violative of
constitutional scheme or the provisions. In view of what is stated supra and as I have come to the clear and unmistaken conclusion
that the impugned provision encroaches upon the judicial power of the State, as it violates the basic concept of rule of law and
democratic pattern envisaged by the Indian Constitution, unhesitatingly, I strike down the impugned provision as being ultra vires
the Constitution and consequently the provision contained under Sec. 17(2) of the Act to the extent of the words “subject to the
provisions of Section 17-A ” and whole of Section 17-A with sub-sections 1 to 4 thereof are non-est under law. As an inevitable
corollary, G.O.Ms.No.2 Labour Department, dated 20.1.1994 is quashed as being unsustainable in view of what is held above.
Now, the award which has been published in G.O.Rt.No.2761, Women’s Development, Chief Welfare and Labour Department,
dated 23.12.1993 shall be operative and the same be implemented by respondents 3 to 5 within a period of one month from the date
of receipt of a copy of this order.16

The above decision of the single judge of AP High Court, which can be described as a revolutionary rendition, was
reiterated by a Division Bench of the AP High Court. and further the said judgment was neither reversed nor set aside by
the apex court. Moreover, so far the position remains the same despite the fact that nearly 20 years have rolled on. Thus,
the said decision holds good. Referring to the said decision of AP High Court, another Division Bench of the Madras High
Court expressed a similar view as expressed by the single judge of the said High Court in Textile Technical Tradesmen
Assn, in which Vasant Kumar J (for self and Ravichandra Babu J) observed:

In this case, a competent Special Industrial Tribunal, constituted under the Industrial Disputes Act, 1947, rendered a
decision/award and if the parties to the award are aggrieved about the findings rendered or directions issued, they can only
approach the appellate Court to challenge the award and exercising power under Section 17-A(1) of the ID Act, 1947, which was
already declared as unconstitutional by the Andhra Pradesh High Court in the year 1997 itself.. .. The said position, viz.,
declaration of unconstitutionality of Section 17-A with sub-sections (1) to (4) of the Industrial Disputes Act, 1947 holds good even
today as the Division Bench of the Andhra Pradesh High Court reiterated the said position in W.A.No.403 of 2004 dt. 26.11.2004
and the said judgment has not been reversed or set aside by the Hon’ble Supreme Court. Hence the learned single Judge was
perfectly justified in allowing the writ petition and no ground is made to interfere in the order of the learned single Judge.17

It is submitted that the decision of the AP High Court striking down s 17A as being violative of the basic structure of the
Constitution is right. It is rather surprising that this section remained alive in the Act for four decades. Once it is conceded
that an award passed by the labour court or an industrial tribunal is appealable under Art 136,18 notwithstanding the fact
that the State’s Judicial Power has not been delegated to these quasi-judicial tribunals in full flow, the conclusion that the
awards of labour courts, etc., stand on the same footing as the orders and decrees passed by civil courts is inescapable.
That being so, to stipulate that the award of labour court and tribunal is subject to the scrutiny of the appropriate
government and, not only scrutiny, but are also subject to modification and rejection by the appropriate government,
militates against the very concept of adjudication and judicial process. The AP High Court rightly struck down the entire
section. The learned single judge, the Division Bench of AP High Court and the Division Bench of Madras High Court
deserve full compliments for striking down a retrogressive provision of the Industrial Relations Law. In the final analysis,
and for the above reasons, s 17A is as good as non-existent.

SUB-SECTION (1): WHEN THE AWARD BECOMES ENFORCEABLE

Sub-section (1) of s 17A makes the award of any of the adjudicatory authorities, ie, the labour court, the industrial tribunal
or the national tribunal, including the award of an arbitrator under s 10A, enforceable on the expiry of 30 days from the
date of its publication under s 17. A single judge of the Madras High Court observed that the expression ‘an award shall
become enforceable on the expiry of 30 days’, means that the reinstatement, on the dismissal being found to be wrongful,
must be given effect to by the time the award becomes enforceable, ie, within 30 days of the publication of the award.19A
single judge of the Bombay High Court held that no award, therefore, is enforceable before the expiry of 30 days and
therefore, no obligation is to be discharged before the expiry of the said period. There is no obligation at all on the
employer to implement the award before the expiry of 30 days from its publication and if he does not implement the

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award, it cannot be said that he has committed an offence under s 29 of the Industrial Disputes Act.20 This is the correct
view of law.

PROVISO: DECLARATION

Sub-section (1) of s 17A lays down the general rule that an award of an adjudicator or an arbitrator, on the expiry of 30
days from the date of its publication under s 17, shall become enforceable. The proviso to it lays down the conditions
under which the appropriate government or the Central Government may declare that the award shall not become
enforceable on the expiry of the period of 30 days from the date of its publication. Before making the declaration under the
proviso, the appropriate government or the Central Government, as the case may be, must form its opinion that it will be
inexpedient to give effect to the whole or part of the award on public grounds affecting national economy or social justice.
It cannot be gainsaid that the opinion of the government should be formed on the basis of some material before it that the
requirement of national economy or social justice makes it inexpedient to give effect to a part or the whole of the award.
Any opinion formed by the government without any material before it or taking into account irrelevant or extraneous
considerations in deciding that it will be inexpedient to give effect to the award will be vulnerable. But if the government
has formed its opinion after applying its mind to the material before it and without taking any irrelevant or extraneous
considerations into account, the declaration made by the government being an administrative action will not be reviewable.
The declaration is to be made by a notification in the Official Gazette.

SUB-SECTION (2): POWER TO MODIFY OR REJECT THE AWARD

This provision empowers the appropriate government or the Central Government, as the case may be, by an order to reject
or modify an award. The requirements for the exercise of this power are:

(i) a declaration under proviso to sub-s (1) should have been made;

(ii) the order rejecting or modifying the award should be made within 90 days from the date of publication of the award under
s 17 ; and
(iii) on the first available opportunity, a copy of the order rejecting or modifying the award along with the award should be
laid before the legislature of the state, if the order has been made by the state government and before Parliament, if the
order has been made by the Central Government.21

All these requirements are cumulative. If anyone of them has not been complied with, the order modifying or rejecting the
award will be invalid. The government in exercise of its power under sub-s (2) might reject the award as a whole or any
part thereof or modify the award. In other words, the rejection of the award may be total or partial. The word ‘modified’
will cover not only a partial rejection of the award but would also include any alteration or amendment of the award as
well.

SUB-SECTION (3): WHEN AN AWARD AFTER DECLARATION, MODIFICATION OR REJECTION

BECOMES ENFORCEABLE

This sub-section is in two parts. The first part deals with the point of time when a rejected or modified award becomes
enforceable and the second part deals with the point of time when an award, which has not been rejected or modified under
sub-s (2) but has only been deferred by a declaration under the proviso to sub-s (1) becomes operative. In the latter case,
the operation of the award as a result of the declaration is merely deferred and the award, as it is made by the adjudicatory
authority, comes into force after the expiry of the period of 90 days. In the former case, the modified award shall become
enforceable on the expiry of 15 days from the date on which it is laid before the legislature of a state or the Parliament, as
the case may be, under sub-s (2). But in case the government rejects the award in its entirety, the effect of such rejection
will be that the award will be a nullity. It is, therefore difficult to understand how a nullity can become enforceable. The
words ‘any award as rejected...shall become enforceable’, if refers to an award rejected in entirety appear to be
incongruous-perhaps the result of carelessness in drafting.

SUB-SECTION (4): ‘ENFORCEABILITY’ AND ‘OPERATION’ OF AN AWARD

This sub-section lays down that subject to the provisions of sub-s (1), which fixes the time for enforcement, the award of
the tribunal shall come into operation with effect from such date as may be specified therein, but where no date is
specified, it shall come into operation from the date when the award becomes enforceable under sub-s (1). Ordinarily an
award would come into operation from the time when it becomes enforceable i.e., on the expiry of 30 days from the date of
its publication or on the expiry of the periods prescribed in sub-ss (3) and (4). But an industrial tribunal has the discretion
to order that its award shall be operative from another date.22 Thus, the Act recognises the distinction between ‘operation’

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and ‘enforcement’ of an award. Though normally, the date of enforceability and the date of operation may be identical, yet
there may be cases where the two dates may be different. The date from which the award of a tribunal shall be operative is
the date specifically mentioned in the award itself. But the date of enforceability of the award is the date which follows on
the expiry of 30 days from the date of its publication under s 17 of the Act.23

Retrospective Operation of Award

An adjudicator can specify the date from which an award given by it shall come into operation and that date may be one
prior to the date of reference itself, and in such a case the award takes effect retrospectively. Where a demand for arrears of
increment was for the first time made collectively in August 1957, the tribunal could not direct the benefit of such arrears
for the period prior to August 1957 as it would amount to entertainment of stale claims.24 There is no conflict between the
provisions of ss 17A and 19 of the Act.25 No general rule can be laid down as to the date from which an award should be
made effective.26 The annual financial burden which an award is likely to cast upon a concern is one of such relevant
considerations. Likewise, in giving retrospective effect or in determining the extent of retrospective operation of an award
fixing wage-structure, the adjudicator should take into consideration the fact that on other occasions it increased the wages
of workmen and it should be immaterial whether the increase was referable to the actual matter in dispute before it or not.
In any event, no retrospective operation can be given to an award for any period prior to the date on which any demands in
question were made.27 There is no vested right in any party as to from what particular date an award should be given effect
to.28 Within the two extreme points, viz, the date of demand and the date of award,29 it is open to the tribunal to fix, in its
discretion, a date from which an award passed by it shall come into operation, even without a specific reference being
made on the question of retrospective operation of the award.30

The normal rule, however, is that for justifying the retrospective effect of an award, some special case should be made out.
For instance, it should be shown that there was some deficiency or deprivation caused to employees. Thus, where
employees are getting more salary as compared with the employees of other concerns, there is no just reason for any
grievance on that score and the award should not be given retrospective effect.31 In some cases, the Supreme Court itself in
exercise of its appellate jurisdiction under Art 136 of the Constitution made awards effective from the date when the
demand was first made. In other cases, it declined to interfere with the date fixed by the tribunal. It does not, however,
appear that any general criterion, in this connection, has been laid down.32 Whether or not an award should be given
retrospective effect, is a question to be determined by the tribunal in its discretion, and the discretion exercised on judicial
principles by the tribunal about the commencement of an award cannot be reviewed by courts.33 If the tribunal has
exercised its discretion and no substantial ground is made out to show that it was unreasonably exercised, the mere fact
that it has made its award operative retrospectively from the date of the demand is hardly a ground for interference with the
award. But the tribunal has to exercise its discretion in a judicial manner. The courts in judicial review of the award will
interfere with the discretion of the tribunal if it is exercised unreasonably or arbitrarily in fixing the date of operation of the
award.34

Illustrations

Where the tribunal in the award directed that the minimum wages fixed under it should be given retrospective effect from
the date of the demand and not from the date of the reference, as by that time the cost of living index had already gone up
considerably and not to have done so would have been to deprive the workmen of the minimum wages commensurate with
the rise; it was held that there was no reasonable ground made out to show that the tribunal had unreasonably exercised its
jurisdiction and the mere fact that the award was retrospectively enforced from the date of the demand would hardly be a
ground for interference with the award.35 Where the tribunal in fairness to both the parties felt that an intermediate date
between the date of demand and the date of reference was the proper date from which the award should come into
operation and the ground for selecting this date according to the tribunal was that the prices of commodities began to rise
steeply in the region from that date and this ground was not controverted by any material to the contrary; it was held that
there could barely be any ground for interference by the Supreme Court.36 Where the tribunal after taking note of the rise
in the cost of living index and also adverting to the fact that though the cost of living had increased considerably, the
company did not choose to adjust the dearness allowance suitably and after having regard to all the circumstances, awarded
that the workmen should get dearness allowance commensurate with the cost of living index from the date of reference, the
court declined to interfere with the award.37 Where the tribunal directed that the revised wage structure should take effect
retrospectively and as a result of which the company had to pay arrears of wages for a long period of five to six years; it
was held that the award was justified in view of the fact that since that date there had been a very considerable rise in the
price index and the labour had not so far raised a fresh dispute for a further revision of wages.38 Where the tribunal chose
an intermediate date with a view to be fair to both the sides for giving effect to its award revising the wage structure, it was
held that there was nothing illegal or unfair in the choice of the date.39 Where the tribunal gave effect to the award from the
date of reference rejecting the claims of both the sides, viz, the claims of the workmen to give effect from the date of the
demand and the claim of the employer from the date of the award, it was held that the award could not be interfered with.40

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Where on consideration of the circumstance that there will be a considerable increase in the burden of expenditure on the
company as a result of the revision of wage scales and the rates of dearness allowance, the tribunal decided that the award
should be effective with effect from the usual date when it comes into force, ie, one month after the date of its publication,
it was held that the discretion exercised by the tribunal could not be interfered with as it could not be said to be arbitrary or
unreasonable.41 Where the tribunal chose an intermediate date between the order or reference and the award for enforcing
the scheme of gratuity framed by it, the direction in the award was upheld.42 Where bearing in mind the fact that there was
a good deal of go-slow practised by the workmen during the period between the demand and the award, the direction of the
tribunal to give effect to the increase in wages from a date between the date of the reference and the date of the award; it
was held that there was no reason for interference as in the circumstances of the case, the award could hardly be called
retrospective.43 But, where the labour appellate tribunal modified the original award of the industrial tribunal and gave
direction that the benefit of increments awarded to the employees should take effect from a date prior even to the demands,
the direction was set aside as it was a clear error of law.44

APPEAL UNDER ARTICLE 136 OF THE CONSTITUTION

Whatever finality may be claimed under the provisions of the Act in respect of an award by virtue of ss 17 and 17A of the
Act, it must necessarily be subject to the result of determination of an appeal by special leave.45 However, it is only by
virtue of specific orders made by the Supreme Court under Art 136 of the Constitution, staying operation of an award, or
some such order that operation or enforcement of an award can be stayed and the employer can be made immune from the
operation of the provisions of s 29 which impose penalties for infringement of terms of an award.46

15 Subs by Act 36 of 1956, s 12, for s 17A (wef 10-3-1957). Earlier, S 17A ins. by Act 48 of 1950, s 34 and Sch.
16 Telugunadu WES Federation v Union of India, CDJ 1997 APHC 752 : (1997) 3 ALT 492.
17 Union of India v Textile Technical Tradesmen Assn (2014) 4 LLJ 683 : 2014 Labic 4615(Mad), per Vasantha Kumar J.
18 Bharat Bank Ltd v Employees AIR 1950 SC 188 [LNIND 1950 SC 4]: (1950) I LLJ 921: [1950] 1 SCR 459 [LNIND 1950 SC 4]
(SC), per Kania CJI.
19 Public Prosecutor v Mettur Industrials Ltd (1960) 2 LLJ 351, 352 : AIR 1961 Mad 20 (Mad), per Somasundaram J.
20 State of Maharashtra v Ajit Maneklal Choksia 1979 Lab IC 59 (Bom), per Jahagirdar J.
21 Workmen under DHS v Dir. of Health Services (1973) 1 LLJ 512 -13 (Ori), per RN Misra J.
22 All India RBI Employees’ Assn v Reserve Bank of India (1965) 2 LLJ 175 [LNIND 1965 SC 146], 198 (SC), per Hidayatullah J.
23 South Travancore EW Workers’ Union v NES Copn (1954) 1 LLJ 16 [LNIND 1953 KER 140] (TC) (DB), per MS Menon J.
24 Howrah Municipality v Second IT (1965) 1 LLJ 382, 385 (Cal), per Banerjee J.
25 Bangalore Woollen, Cotton & Silk Mills Co Ltd v State of Mysore (1958) 2 LLJ 613, 618 (Mys) (DB).
26 Workmen of New Egerton Woollen Mills v New Egerton Woollen Mills (1969) 2 LLJ 782 [LNIND 1969 SC 96], 791 (SC), per
Shelat J.
27 Jhagrakhand Collieries Pvt Ltd v CGIT (1960) 2 LLJ 71 [LNIND 1960 SC 41] (SC), per Gajendragadkar.J.
28 Nellimarla Jute Mills Co Ltd v Staff Union (1955) 1 LLJ 167, 176 (LAT).
29 Workmen of New Egerton Woollen Mills v New Egerton Woollen Mills (1969) 2 LLJ 782 [LNIND 1969 SC 96], 791 (SC), per
Shelat J.
30 Hindustan Times Ltd v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431], 120 (SC), per Das Gupta J.
31 Vasant Industrial & Engineering Works v Workmen [1954] LAC 816, 7 FJR 682 (LAT).
32 Hindustan Times Ltd v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431], 120 (SC), per Das Gupta J.
33 Workmen of NEW Mills v New Egerton Woollen Mills (1969) 2 LLJ 782 [LNIND 1969 SC 96], 791 (SC), per Shelat J.
34 Hydro (Engineers) Pvt Ltd v Workmen (1969) 1 LLJ 713 [LNIND 1968 SC 133] (SC), per Shelat J.
35 Hydro (Engineers) Pvt Ltd v Workmen (1969) 1 LLJ 713 [LNIND 1968 SC 133], 718 (SC), per Shelat J.
36 Workmen of NEW Mills v New Egerton Woollen Mills (1969) 2 LLJ 782 [LNIND 1969 SC 96], 791 (SC), per Shelat J.

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37 Bengal Chemical & Pharmaceutical Works Ltd v Workmen (1969) 1 LLJ 751 [LNIND 1968 SC 279], 760 (SC), per Vaidialingam
J.
38 Workmen of Orient Paper Mills Ltd v Orient Paper Mills Ltd (1969) 2 LLJ 398 [LNIND 1968 SC 205], 405 (SC), per Bhargava J.
39 Kamani Metals and Alloys Ltd v Workmen (1967) 2 LLJ 55 [LNIND 1967 SC 18], 61 (SC), per Hidayatullah J.
40 Hindustan Times Ltd v Workmen (1963) 1 LLJ 108 [LNIND 1962 SC 431], 120 (SC), per Das Gupta J.
41 Workmen of NTC of India Ltd v National Tobacco Co of India Ltd CA No 852 of 1966 (SC), per Bhargava J.
42 Delhi Cloth & General Mills Co Ltd v Workmen (1969) 2 LLJ 755 [LNIND 1968 SC 298], 774 (SC), per Shah, J.
43 Bharat Barrel and Drum Manufacturing Co Pvt Ltd v GG Waghmare (1960) 2 LLJ 241 [LNIND 1960 SC 91]-42 (SC), per
Wanchoo J.
44 Jhagrakhand Collieries Pvt Ltd v CGIT (1960) 2 LLJ 71 [LNIND 1960 SC 41], 77 (SC), per Gajendragadkar J.
45 India General Navigation & Rly Co Ltd v Workmen (1960) 1 LLJ 13 [LNIND 1959 SC 182], 18 (SC), per Sinha CJI.
46 India General Navigation & Rly Co Ltd v Workmen (1960) 1 LLJ 13 [LNIND 1959 SC 182], 18 (SC), per Sinha CJI.

End of Document

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER IV Procedure, Powers and Duties of Authorities

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER IV Procedure, Powers and Duties of Authorities

47[S. 17B. Payment of full wages to workman pending proceedings in higher courts.—
Where in any case, a Labour Court, Tribunal or National Tribunal by its award directs reinstatement of any workman and
the employers prefers any proceedings against such award in a High Court or the Supreme Court, the employer shall be
liable to pay such workman, during the period of pendency of such proceedings in the High Court or the Supreme Court,
full wages last drawn by him, inclusive of any maintenance allowance admissible to him under any rule if the workman
had not been employed in any establishment during such period and an affidavit by such workman had been filed to that
effect in such Court.

Provided that where it is proved to the satisfaction of the High Court or the Supreme Court that such workman had been
employed and had been receiving adequate remuneration during any such period or part thereof, the Court shall order that
no wages shall be payable under this section for such period or part, as the case may be.]

OBJECT AND REQUIREMENTS

Before the enactment of this section, the awards of tribunals directing re-instatement were often contested by the
employers in the High Courts or the Supreme Court. Hence, it was felt that the delay in implementation of such awards
caused hardship to the workman. It was, therefore, felt necessary to provide payment of ‘wages last drawn by the workman
from the date of the award till the date it is finally decided in the Supreme Court or the High Court’. This provision,
therefore, codifies the right of the workmen to get their wages, which they could not get in time, on account of long drawn
litigation. This provision gives a mandate to the courts to order wages if its conditions are satisfied.

In Bharat Singh, the Supreme Court noted that even before this section was enacted, the courts were, in their discretion,
awarding wages to workmen when they felt such a discretion was necessary but that was only a discretionary remedy
depending upon court to court.48 This provision is a piece of social-welfare legislation and aims at ameliorating the
hardship caused to the workman who were deprived of the benefits of re-instatement awards during the protracted
litigation in which awards were injuncted by the High Courts or the Supreme Court. The object of introducing this
provision is, therefore, to enable the workman to receive the ‘full wages last drawn’ by him to sustain himself to resist the
litigation carried to the High Courts or the Supreme Court by the management.49 More often than not, the employers, as a
matter of routine, would prefer proceedings before a High Court or the Supreme Court challenging such awards and obtain
stay of their operation. Instances are legion where workmen have been dragged by the employers into an endless mire of
litigation with preliminary objections and other technical pleas to tire them out. Though occasionally, in their discretion,
the courts subjected the stay orders to certain conditions, such as payment of certain amounts to the workmen during the
pendency of the proceedings before them. There was no standard formula quantifying the payment during the pendency of
the proceedings. Nor could such payments be claimed by the workmen as a matter of right because the conditions of
payment were imposed on the facts and in the circumstances of each case. Therefore, by and large, during the pendency of
such proceedings, workmen were deprived of their legitimate right to wages upon reinstatement. Now this section, at once,
codifies the right of a workman to get the wages and quantifies the amount of such wages payable to him during the
pendency of the proceedings before a High Court or the Supreme Court where the award of his reinstatement is challenged
by the employer. In the language of Kamat J:
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Normally, no party has or gets any vested right in the life of the litigation in this or any other court ... However, s 17B of the
Industrial Disputes Act is a statutory exception and creates liability in favour of the workman and against the employer and the
inevitable elongated life of the litigation in such a case becomes necessary to be watched and controlled by the parties and the
system by a process of expedition or characterisation of such petitions as a separate priority-category having preceding position as
compared to other pending proceedings.50

This right is a separate and independent right available to a workman during the pendency of the proceedings before a
High Court or the Supreme Court, where the proceedings have been preferred by the employer, against the award of
reinstatement in his favour. The pre-requirements for invoking this section are:

(i) the award of the tribunal should have directed reinstatement of the workmen on setting aside the order of his dismissal or
unfair termination of service;
(ii) the employer should have preferred proceedings against such award before a High Court or the Supreme Court;

(iii) the workmen should not have been gainfully employed in any establishment during the pendency of the proceedings; and
(iv) as a proof of that, the workman should have filed an affidavit before the court before which the proceedings have been
preferred.

Once these requirements are satisfied, the workman becomes entitled to the wages as contemplated by this provision and
no order of the court, before which the proceedings are pending, is necessary for entitling him to such wages, as the statute
itself creates the right. If, after the workman has filed the affidavit of non-employment, the employer fails to pay wages to
the workman, as required by this section, the workmen may file an application before such court for direction to the
employer to make such payment. Non-compliance with the requirement to pay such wages to the workman should block
further hearing of the proceedings before the court. Any interim payment made to the workman under the order of the
industrial tribunal, in the course of adjudication proceedings, will not bar the claim of the workman to the wages as
contemplated by this section, though the payment so made by the employer may become deductible out of the payments to
be made to him under the provisions of this section, depending upon the nature of the orders of such payment and the facts
and circumstances of each case.51 In Bharat Petroleum, a single judge of the Calcutta High Court held that once it is shown
that all the three ingredients stipulated in s 17B, namely, (i) the labour court directed reinstatement of the workman; (ii) the
employer preferred proceedings against the award in the High Court or the Supreme Court; and (iii) the workman had not
been employed in any establishment during such period, the employer would be liable to pay the last drawn wages to the
workman. The liability under s 17B continues during the whole period of the pendency of proceedings in higher courts,
even if the workman has in the meantime crossed his normal age of superannuation and would have retired, had he not
been dismissed or discharged.52Section 17B is mandatory in character and it gives a mandate to the court to award full
wages if the conditions enumerated in s 17B are fully satisfied. Delay in making the application will not affect the powers
of the court.53 In CM Saraiah, the order of a single judge staying the reinstatement order of the labour court with a
direction to the employer to comply with the provisions of s 17B was reversed by the Division Bench on the ground that
the very dispute itself was raised after inordinate delay. The Supreme Court, while setting aside the order of the Division
Bench, held that the court had no jurisdiction to direct non-compliance with s 17B when the condition precedent for
passing an order in terms of s 17B was satisfied.54

In Commandant, Defence Security, a single judge of the Kerala High Court held that the wages paid under s 17B are in the
nature of subsistence allowance and, hence, not refundable even if ultimately the award is set aside by the court.55 While
dealing with an application under s 17B for payment of last wages drawn, the High Court has no discretion to impose
conditions or to add rider to the order, though it may be open to the High Court to deny the benefit completely, if the
conditions set out in the said section are not satisfied.56 Payment under s 17B continues only so long as the workman is in
service. Once he reaches the age of superannuation, he loses the right to get the last drawn wages under the section. In such
a case, his right is confined only to backwages as per the award.57 An employee cannot continue to get the benefit of full
wages by taking recourse to s 17B after attaining the age of superannuation.58 In U Cheralu, the Supreme Court directed
the college to make ad hoc payment of Rs 500/- per month to the respondent who was to be reinstated as per the labour
court’s order, in lieu of such reinstatement till the disposal of the writ petition filed by the petitioner in the High Court.59 In
Nagar Panchayat, the Madhya Pradesh High Court held that the proceedings commence when the petition is filed before
the High Court or the Supreme Court, as the case may be, and that the Court can pass an order in favour of the workman
from the date of pendency of such proceedings but not from the date of the award.60 In Ghanshyam, the Supreme Court
observed:

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.. . in the event of an employer not reinstating the workman and not seeking any interim relief in respect of the award directing
reinstatement of the workman or in a case where the court is not inclined to stay such award in toto, the workman has two options,
either to initiate proceedings to receiving the full wages last drawn by him without prejudice to the result of the proceeding referred
by the employer against the award till he is reinstated or proceedings are terminated in his favour, whichever is earlier.. .. s 17B
does not preclude the High Courts and the Supreme Court from granting better benefits, more just and equitable, on the facts of the
case, and that the management would be eligible to seek refund of payment of such additional sums in the event the case is decided
in its favour, and hence the payment of any such amount over and above the amounts payable under s 17B was ordered to be paid
on such terms and conditions as would enable the employer to recover the same.61

Last drawn wages are payable from the date of initiation of writ proceeding before the High Court and not from the date of
award.62 The benefit of s 17B must continue until the employer by positive assertions files an affidavit that the employee
has been employed somewhere else. However, the employee is not required to file such an affidavit at every point of
time.63 Where reinstatement has been ordered, backwages will be payable from the date of the award till the date of the
proceedings. Orders under s 17B can be passed even when reinstatement has taken place. The employer is directed to pay
the wages last drawn by the workman, which should not be less than the minimum wages applicable from time to time.64
Where a single judge of the High Court, on application by the management, stayed the operation and implementation of
the award of reinstatement passed by the labour court, a Division Bench held that the learned single judge was not justified
in granting stay without requiring the employer to make payment of last drawn wages as contemplated by s 17B, and
accordingly modified the order passed by the single judge.65 Where the High Court refused to go into the merits of the writ
petition filed by employer against the order of tribunal directing reinstatement of the workman, on the ground that the
employer had not complied with the order made under s 17B, the Supreme Court observed that the High Court ought to
have dealt with the merits of the case and decided the case instead of declining to go into the merits because of non-
compliance with the order made under s 17B. The Supreme Court had set aside the order of the High Court and remitted
the matter back to the High Court for fresh consideration and to decide the case on merits in accordance with law.66The
liability of the employer under s 17B has to be enforced through the court, and there is provision in the Act that unless the
wages of the workmen were paid, the petition would not be maintainable. There is no obligation on the part of the
employer to pay without the orders of the court. The workman has to claim and satisfy the court before being entitled to an
order for payment under s 17B.67

In Hindustan Vegetable Oils, the Supreme Court held that an application under s 17B should be disposed of by the High
Courts with great promptitude before the principal petition and that the former should be disposed of most expeditiously.68
In MP Laghu Udyog, a workman was terminated prior to the transfer of the undertaking from the State Industries
Department, the labour court ordered reinstatement and directed the transferee-employer to pay full back wages even
though the transferee-company was not made party to the dispute. The workman filed an application under s 33C(2)
claiming payment under s 17B and made the transferee employer the respondent for the first time despite the defence of
the transferee-company that as the transferee of the establishment, it was not liable to discharge the liability under the
award of reinstatement, which was executable against the Industries Department of the Government. The labour court,
exercising its jurisdiction under s 33C(2), held that the workman was deemed to have continued in the services of the
transferee-company and directed it to make payment under the provisions of s 33C(2). Kulsreshtha J of the Madhya
Pradesh High Court held that (a) s 17B came into operation only when proceedings were preferred before a High Court or
the Supreme Court against the award directing reinstatement and it would not apply if the award of reinstatement was not
challenged; (b) in the present case, what was in issue was whether the transferee-company was not the employer in relation
to the workman and, hence, was not liable to satisfy the award directing reinstatement; (c) the award could not be enforced
against the transferee who was not a party to the dispute in which the award was passed; and (d) that it was not a case
covered by s 25FF, the ratio of Anakapalle CAIS,69 had no application, and hence the workman could only enforce the
claim against the transferor and not against the transferee.70 The learned single judge further held that the workman was
not precluded from claiming the benefit under the award in accordance with law from the party liable thereunder. This
decision is very refreshing in so far as it reflects high standards of judicial analysis and reasoning. In Mideast India, a
single judge of the Delhi High Court held that the pendency of proceedings before the BIFR and invocation of s 22 of the
Sick Industrial Companies (Special Provisions) Act 1985 would not come in the way of relief granted and payable under s
17B.71

In KNM Hospital, the facts disclosed that the management had established before the High Court by adducing ample
evidence that the dismissed clerk enrolled himself as an advocate and was a busy practitioner with a decent professional
income during the period of his unemployment. Despite this factual position, the High Court ordered payment of last
drawn wages u/s 17B. Quashing the order, Pasayat J held that the High Court reached the conclusion contrary to the
materials on record. The learned judge, however, held that if any amount had already been paid in the peculiar facts of the
case, the workman would not be liable to refund the same.72 In North East Karnataka RTC, the facts were: the workman,

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during the period of unemployment, resulting from his dismissal, was engaged in cultivation and was receiving income
from agricultural operations. The labour court held that the income generated from agriculture could not be treated as
‘gainful employment’ within the meaning of s 17B and, on this view of the matter, awarded full back wages. Both the
single judge and the division bench of the Karnataka High Court were of the opinion that the workman was not gainfully
employed and, hence, upheld the order of the labour court. Quashing the orders of the courts below, Altamas Kabir J (for
self and Lakshmanan J) held:

.. . we are unable to accept the reasoning of the Labour Court that the income received by the respondent from agricultural pursuits
could not be equated with income from gainful employment in any establishment. In our view, “gainful employment” would also
include self-employment wherefrom income is generated. Income either from employment in an establishment or from self-
employment merely differentiates the sources from which income is generated, the end use being the same. Since the respondent
was earning some amount from his agricultural pursuits to maintain himself, the Labour Court was not justified in holding that
merely because the respondent was receiving agricultural income, he could not be treated to be engaged in “gainful employment”
(para 17). .. The single Judge of the High Court without looking into this aspect of the matter merely observed that the
management had not established that the workman was engaged in any gainful employment during the period of dismissal and on
such finding, the learned single Judge chose not to interfere with the award as passed by the Tribunal after remand. (para 18). ..
The Division Bench which heard the Writ Appeal did not also consider the aforesaid aspect of the matter and mechanically
disposed of the appeal with the observation that after going through the order of the learned single Judge and the award of the
Tribunal, it found no ground to interfere with the findings recorded therein. (para 19). .. . regarding the income received by the
respondent for the period of his dismissal from service till the date of the award, we are of the view that the award passed by the
Tribunal after remand and affirmed by the High Court. .. is liable to be modified and the earlier award of the Labour Court dated
23rd February, 1998 is liable to be restored. (para 20). .. We, accordingly, allow the appeal and restore the award passed by the
Labour Court dated 23rd February, 1998 and direct the respondent to give effect to the same expeditiously, if the same has not
already been implemented. (para 21). .. In the event full back wages from the date of dismissal till the date of the award has already
been paid to the respondent, the appellant-Corporation will be entitled to recover the same from the respondent.73 (para 22).

In Talwara CCSS, Sinha, J held that neither the grant of relief of reinstatement nor the grant of back wages could be
automatic. The learned judge further held that the Industrial Courts while exercising their power u/s 11A of the IDA were
required to take into consideration certain relevant factors as, for example, the nature of service, the mode and manner of
recruitment, viz., whether the appointment had been made in accordance with the statutory rules so far as a public sector
undertaking is concerned, etc.; and that for the purpose of grant of back wages, one of the relevant factors would
indisputably be as to whether the workman had been able to discharge his burden that he had not been gainfully employed
after termination of his service.74

It is submitted that the last part of the above decision in Talwara CCSS, i.e., “the workman should discharge the burden
that he had not been gainfully employed” does not seem to be consistent with the law relating to the burden of proof. A
person who denies a thing cannot admittedly prove it. It is one thing to say that he should file an affidavit to the effect that
he was not employed during the period of forced unemployment, and quite another to direct him to discharge the burden
that he was not employed during that period. In view of the fact that the liability to pay full back wages (if awarded by the
labour court) lies on the employer, it is for the employer to prove that the workman was gainfully employed during the
period between the date of dismissal and of reinstatement, in order that he can be entitled to the benefit of ‘reduced
liability’ or ‘no liability’ to pay back wages. This burden can never be fastened to the workman. If the employer fails to
prove to the satisfaction of the court that the workman was gainfully employed, he cannot escape the liability to pay back
wages.75 Where there was no stay of the reinstatement order, and the workman failed to take up the offer of reinstatement
by the employer, and had not enforced the order of reinstatement passed by the labour court, he would not be entitled to
invoke s 17B for wages last drawn by him.76 Where the workman failed to produce any document to the effect that he was
employed by the company or the receipt of salary or the letter terminating his service, he will not be entitled to any relief
under s 17B.77

In Rajasthan Gramin Bank, both the tiers of the High Court proceeded to decide the case in favour of the workman on the
sole ground that the management did not counter the specific plea of the workman that he was not gainfully employed,
whereas the facts disclosed that the management, in its reply to the application of the workman, specifically stated that he
worked in two transport companies subsequent to his dismissal and the copies of vouchers showing the salaries paid by the
two companies were also placed on record in its supporting affidavit. Quashing the orders of the High Court, a Division
Bench comprising Jain and Lodha JJ remanded the matter to the single judge for fresh adjudication.78Section 17B cannot
be invoked by a workman in case the impugned award is for regularisation of service, and not for his reinstatement.79 The
workman is not required to produce evidence that he was not gainfully employed. It is enough if he files an affidavit to that
effect in order to be entitled to 17B payment.80 Last drawn wages under s 17B are payable from 30 days after the

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publication of the award.81 Unless employer proves that workman was receiving adequate remuneration, during pendency
of proceedings before the High Court or the Supreme Court preferred by employer against award of labour court directing
reinstatement of workman, the benefit under s 17B cannot be denied to the workman.82

In Bharat Coking Coal, the facts were: an industrial dispute raised by workmen for regularization was referred for
adjudication. While the proceedings were pending, one of them was transferred. Being aggrieved, a complaint was lodged
under s 33A alleging that the transfer was in violation of Section 33. While the said application was pending the company
issued a charge sheet for alleged wilful absence, resulting in termination of service. The tribunal set aside both the order of
transfer and dismissal, and ordered reinstatement with full backwages, which was challenged by the company by writ
application. During the pendency of the writ petition, the workman filed an application under Section 17B for full wages.
The company alleged that application under Section 17B was not maintainable as it was not an award. A single judge of
the Calcutta High Court held that, if a complaint was lodged under s 33A on the ground that the employer contravened the
provisions of s 33, the complaint was in nature of a dispute and the tribunal would be within power to order reinstatement,
and accordingly s 17B gets attracted. The learned judge further observed that where the award directing reinstatement of
any workman was challenged by the employer, the workman would be entitled to relief under Section 17B till the disposal
of writ application.83 In a case involving a dispute relating to date of birth and the consequential retirement, the labour
court found that the retirement was illegal and ordered reinstatement with full back wages. A single judge of the Jharkhand
High Court stayed the operation of the award in so far as it related to back wages. The question before the Division Bench
was ‘whether the last drawn wages were to be paid from the date of the award or from the date the employer filed the writ
petition’. The Bench comprising Patel and Gupta JJ held that the last drawn wages were payable from the date of the award
and not from the date of filing writ petition by the employer, as such a rendition would operate to the disadvantage of the
workman in that the employer would file the writ petition belatedly and deprive the workman of the last drawn wages that
are due from the date of the award.84 It is submitted that this case was rightly decided.

LIABILITY PENDENTE LITE

Before this section was inserted, the High Courts and the Supreme Court used to give interim relief of some payments to
the workers while granting stay of the operation of the awards ordering reinstatement. However, the workmen had no right
to claim any wages pendente lite. This provision now recognises the right and gives it mandatory force. In Bharat Singh,
the facts disclosed that the labour court directed reinstatement of the workman with continuity of service and backwages in
September 1983. Writ petitions followed in the High Court and the matter finally came up before the Supreme Court. The
Court held that this section could operate retrospectively and would apply even to those awards which were passed prior to
21 August 1984, if they had not become final. Speaking for the court, Khalid J said:

.. . there are no words in the section to compel the court to hold that it cannot operate retrospectively ... to construe it in a manner
detrimental to workmen would to be defeat its object.85

A single judge of the Calcutta High Court has correctly held that the liability cannot be deferred till the conclusion of the
‘proceedings’ because that would make the provision illusory and nugatory and would turn out to be mere otiose.86The
expression ‘wages’ has to be construed to mean ‘wages’ as defined in s 2(rr) of the Act. In IAAI,87 the Madras High Court
directed that the payment as quantified in terms of s 17B should be paid every month. Therefore, the basis of the payment
of monthly wages to the workman during the pendency of such proceedings will be ‘full wages’ [as defined in s 2(rr) ]
drawn by him at the time of termination of his service which will also include any maintenance allowance admissible to
him under any rule. In Kiritikumar Patel, the Gujarat High Court, while exercising its powers under s 17B directed
payment of wages as revised, including the increments, DA etc. which were granted to the employees under two
settlements. The Supreme Court held that the expression ‘full wages last drawn’ must be given the plain and grammatical
meaning and declined to construe the words ‘full wages last drawn’ in a manner which would cast additional burden on the
employer and set aside the directions of the High Court. In appeal, the Supreme Court categorised the interpretations
placed by various High Courts on the expression ‘full wages last drawn’ under three heads:

(i) Wages only at the rate last drawn and not at the same rate at which the wages are being paid to the workmen who are
actually working.
(ii) Wages drawn on the date of termination of the services plus the yearly increment and the dearness allowance to be
worked out till the date of the award.
(iii) Full wages which the workman was entitled to draw in pursuance of the award and the implementation of which is
suspended during the pendency of the proceedings.

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The court then commented that the first construction gives plain and grammatical meaning to the expression ‘full wages
last drawn’ while the second as well as the third constructions read something more than their plain and grammatical
meaning in the words used in the expression. These constructions read the words ‘full wages which would have been
drawn’ instead of the words ‘full wages last drawn’. This extended meaning is not warranted either by the language of or
the object underlying the statute. The court observed:

The object underlying the provision is to relieve, to a certain extent the hardship that is caused to the workman due to delay in the
implementation of the award. The payment which is required to be made by the employer to the workman is in the nature of
subsistence allowance which would not be refundable or recoverable from the workman even if the award is set aside by the High
Court or this court. Since the payment is of such a character, the Parliament thought it proper to limit it to the extent of the wages
which were drawn by the workman when he was in service and when his services were terminated and, therefore, used the words
‘full wages last drawn’. To read these words to mean ‘wages which would have been drawn by the workman if he had continued in
service’ if the order terminating his service had not been passed since it had been set aside by the award of the labour court or the
industrial tribunal would result in so enlarging the benefit as to comprehend the relief that has been granted under the award that is
under challenge. Since the amount is not refundable or recoverable in the event of the award being set aside, it would result in the
employer being required to give effect to the award during the pendency of the proceedings challenging the award before the High
Court or the Supreme Court without his being able to recover the said amount in the event of the award being set aside.88

The above decision placed the law in the correct perspective consistent with the legislative intent coupled with the plain
language of the provision. As a matter of fact, the language used in s 17B is so clear and unequivocal that it excludes
uncalled for interpretational gymnastics. Despite this, a few High Courts went about placing wild and weird interpretation
on the provision to mean ‘the wages he would have drawn had he not been dismissed’, which was clearly warranted. At
last, the apex court denounced this expansionist approach of High Courts and rightly delineated the contours of the said
provision in crystal clear terms.

In view of the observations of the court that the payment made under the provisions of this section to a workman is in the
nature of subsistence allowance, such payment would not be refundable or recoverable from him if the award is set aside
by the High Court or the Supreme Court. But if the award is finally affirmed by the High Court or the Supreme Court, the
workman would not only be entitled to be reinstated in service, but he will also be entitled to other attendant benefits
including the backwages from the date of dismissal to the date of reinstatement. This will comprise of two parts, namely
(a) period between the date of dismissal to the date of initiation of the proceedings in a High Court or the Supreme Court;
and (b) the period from the date of initiation of such proceedings and the date of reinstatement on the conclusion of the
litigation. Prima facie, it may appear that for the period between initiation of litigation against the reinstatement award by
the employer and the factual reinstatement of the workman, he will be getting double the back wages, viz, (i) in terms of
the award; and (ii) as paid under the provisions of this section. However, a little reflection would show that it is a mere
illusion. The payment of backwages in terms of the award is sequitur to the award of re-instatement while the payment
under this section is the statutory recompense to the workman for the expenses incurred by him on the litigation before a
High Court or the Supreme Court and the harassment and hardship suffered by him during the pendency of such litigation.
The former type of payment will be available to the workman only in case the award of re-instatement is upheld by the
High Court or the Supreme Court and not when the award is set aside. But the latter type of payment is unrefundable and
irrecoverable from the employee even if the award is set aside. The provisions of this section relate to the period during
which proceedings are pending before a High Court or the Supreme Court. The liability of the employer, to pay wages as
contemplated by this section, commences from the day he prefers proceedings before a High Court or the Supreme Court.
This does not take into account the period prior to preferring of the proceedings before the High Court or the Supreme
Court.89

If the employer prefers proceedings against the award after unreasonable delay, it is open to the writ court or the Supreme
Court, in its judicial discretion, to compensate the workman with wages for the period between the date of the award and
the initiation of the proceedings before it. Where the employer filed a writ petition against the award of labour court
ordering reinstatement and the workman also filed an application for payment of last drawn wages under s 17B, it was held
that the mere disposal of writ petition does not render the application of the workman infructuous, and the management
was liable to pay wages from the date of filing the writ petition till it was finally disposed of.90 The word ‘pending’ in s
17B has been used without any qualification. A petition is pending before the court under Art 226 once it is filed. The
benefit under s 17B is payable to the workman from the date of filing of the writ petition and not from the date of its
admission by the High Court.91 In Rajasthan SRTC, a single judge of the Rajasthan High Court disposed of the application
filed by the workman under s 17B by directing the Corporation to pay back wages at the rate of last drawn wages together
with increments and revisions of pay. In appeal, the High Court quashed the order of the single judge and held that the Act
does not provide for back wages along with annual increments and periodical revisions of pay; and that it simply meant
wages drawn at the time of dismissal. However, in view of the fact that the Corporation had reinstated the said workmen

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while continuing the proceedings in higher courts, they would be entitled to their normal wages and increments, only from
the date of their reinstatement.92

REINSTATEMENT

This section can only be invoked if there is a direction in the award of the tribunal to ‘reinstate’ any workman. The relief of
reinstatement is normally granted by the industrial adjudicators when the discharge, dismissal, retrenchment or termination
is set aside as being illegal, unfair or mala fide. The effect of the direction of reinstatement is merely to set at naught such
illegal, unfair or mala fide determination of service of the workman and to restore him to his former position and status as
if the contract of employment originally entered into has been continuing.93 In other words, ‘reinstatement’ postulates that
the workman should be put back in the position in which he was before the termination of his service, as if his service was
never terminated. He should be restored to the work which he was doing before the termination of his service with all the
attendant benefits. Once the direction of reinstatement is carried out, nothing further remains to be done. The liability of
the employer to pay and the corresponding right of the workman to receive wages under this section arises as soon as the
High Court or the Supreme Court orders stay of operation of the award during the pendency of the proceedings preferred
by the employer before it. The extraordinary powers of judicial review under Art l36 or Art 226 of the Constitution cannot
be used to destroy the statutory right of a workman under this section because the right pendente lite has been statutorily
recognised by the legislature to remove the hardship to workmen and to protect their interests.94In case the High Court or
the Supreme Court declines to grant stay, the provisions of this section will not come into operation because in that event
the employer would be bound to reinstate the workman forthwith. The failure of the employer to reinstate the workman, in
the absence of an order of stay of operation of the award granted by a High Court or the Supreme Court, will expose him to
the penal consequences of s 29 of the Act apart from recovery proceedings under s 33C of the Act. In VA Unnis, the award
of the labour court directed reinstatement of the workman with backwages which was challenged by the employer in the
Madras High Court. During the pendency of the writ petition, the workman claimed the benefits of s 17B which was
rejected by the single judge with the observation that ‘there was nothing in that provision to suggest that the High Court
should direct the management to pay full wages last drawn by the workman, and that the workman will be at liberty to
work out his remedies for obtaining relief presumably under s 33C(2) of the Act. Quashing the order of the single judge, a
Division Bench observed:

Forcing the employee to work out his rights by a separate proceeding would be contrary to the spirit and the purpose of s 17B of
the Act. In view of the plain language, the court observed that this provision is ‘intended to be invoked in the course of the
proceedings in the High Court and the High Court is entitled to make an order as contemplated by s 17B in the proceedings, taken
by the employer challenging the order of the labour court in the High Court. It is thus clearly permissible for the High Court to
make an order requiring the employer to comply with the provisions of s 17B of the Act. It would be extremely hard and contrary
to the spirit of s 17B to force an employee to seek remedy elsewhere separately to recover wages permitted to be claimed under s
17B of the Act by an application under s 33C(2) of the Act.95

In Samser Ali, the Calcutta High Court had taken the view that the order of an industrial tribunal refusing the ‘approval’ to
the dismissal of a workman would fall within the definition of the ‘award’ and, therefore, the provisions of s 17B would be
applicable and the workman would be entitled to wages as contemplated by this provision during the pendency of the writ
proceedings in which the order of the tribunal was challenged.1 But subsequently, in Bata India, a single judge of the same
High Court took a diametrically opposite view that an order of the tribunal refusing approval of the action of dismissal
under s 33(2)(b), is neither an award nor an order of reinstatement.2 A similar view was taken by the Orissa High Court in
IDL Chemicals,3 In which the court observed that even though the provisions of s 17B would not be attracted where an
order passed under s 33(2)(b) refusing approval was challenged by the employer. It is open to the workman to move the
High Court and the High Court has the jurisdiction to grant him wages in accordance with the formula embodied in s 17B.
This holding is correct law because refusal to grant approval under s 33(2)(b) is not an award. The effect of such order is
simply that the dismissal of the workman is non est. Therefore, the question of reinstatement does not arise. A priori, the
provisions of s 17B are not attracted. But that does not mean that an employer can be permitted to frustrate the right of the
workmen to wages by initiating proceedings in the High Court or the Supreme Court against such order of the tribunal and
by not permitting him to continue to work during the pendency of such proceedings. The courts have ample power to give
relief to the workman analogous to s 17B while injuncting the operation of such order. In GSRTC, a single judge of the
Gujarat High Court held:

The legislature has restricted the scope of the beneficial provision under s 17B to the awards of these judicial authorities. It is
possible to extend the same benefit to the orders of these authorities under s 33(2)(b) of the Act...However, the same logic cannot
be extended further to the determination of the conciliation authorities under s 33(2)(b) of the Act, in the absence of specific
provisions in that behalf under s 17B of the Act.4

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An order of a conciliation officer passed under s 33(5) cannot come within the meaning of the phrase ‘award directing
reinstatement’ under s 17B, having regard to the nature of limited jurisdiction of authorities under s 33, and they cannot
direct reinstatement although the consequence of a refusal to grant approval may render the order of dismissal void. Even
if an employer contravenes s 33(2)(b), the employee cannot claim reinstatement. He must invoke s 33A of the Act.5 In
Hotel Mansingh, a single judge of the Rajasthan High Court held that an application under s 17B for payment of wages
could be made and allowed even in cases of rejection by the industrial tribunal of the approval sought by the employer for
removal of a workman under s 33(2)(b).6 In Air India, Shah, J, having observed that where the employer challenged the
order of tribunal refusing to grant approval of the action of dismissal under s 33(2)(b), held that, even though the workman
was not entitled to invoke s 17B as there was no existing right vested in him, the High Court was competent to direct
payment of wages to the workman in exercise of its jurisdiction under Art 226.7

‘PROCEEDINGS IN THE HIGH COURTS OR IN THE SUPREME COURT’

Section 17(2) of the Act makes the adjudicator’s award, after publication under s 17(1), ‘final’ and not liable to be called
‘in question by any court in any manner whatsoever’. The jurisdiction of the ordinary civil courts to entertain challenge to
such awards has thus been ousted by this legislative device. Even the Act does not provide for any appeal or revision
against the orders or awards of the industrial adjudicators. The expression ‘any proceedings’ in the High Court or the
Supreme Court, therefore, can refer only to the ‘proceedings’ through extraordinary constitutional remedies of judicial
review by way of a writ petition to the High Court under Arts 226 and 227 and an appeal to the Supreme Court under Art
133 or Art 136 of the Constitution. The discretion to grant stay orders injuncting the operation of the industrial awards is a
necessary concomitant of the powers exercisable by these courts. In Vysya Bank, the services of the employee were
terminated on completion of the probationary period during which her services were not found to be satisfactory and she
was found to be inefficient in her work. On consideration of the material on record, the tribunal found that the work of the
employee ‘could not be said to be satisfactory by any stretch of language’. Furthermore, it held that the termination order
was a case of discharge simpliciter because the overall performance was not satisfactory. Despite these findings, the
tribunal not only directed her reinstatement with continuity of service, but also directed that after reinstatement she should
be put on probation for another period of 9 months from the date of joining the duty and from that period, the employer
shall be entitled to ascertain her suitability. The Karnataka High Court held that the order was purely on compassionate
grounds which is not permissible or warranted under the provisions of s 11A of the Act. Therefore, prima facie, there was
sufficient material on record to ignore the effect of s 17B and decline the relief thereunder by the writ court when the
matter is before it. Since it was a rare case, the court in its writ jurisdiction was justified in declining the relief of payment
of wages under s 17B pendente lite.8

AFFIDAVIT OF NON-EMPLOYMENT IN ANY ESTABLISHMENT

The main object of this provision is to remove the economic hardship to a workman where the award directing his
reinstatement is checkmated by the employer by preferring proceedings before a High Court or the Supreme Court against
such award, during the pendency of such proceedings. But the benefit of this section will be available to the workman only
if he is ‘not employed in any establishment’ during the period of pendency of the proceedings before a High Court or the
Supreme Court. This provision, therefore, requires the workman to file an affidavit before such court as a proof of the fact
that he is not so employed. In the absence of such affidavit, the presumption will be against the workman that he is
gainfully employed in some establishment. Hence, he will not be entitled to the benefits of this provision. The purport of
this provision is that during the pendency of such proceedings, the workmen should not have been gainfully employed in
any other establishment from which he receives adequate remuneration. If the workmen is not employed in any other
establishment and is carrying on some work to make both ends meet to sustain himself and his family, he will not be
disentitled to get the benefits provided by this provision. For instance, in HMT, where the workman was running a tea shop
and earned some amount, a single judge of the Rajasthan High Court held that the workman was not employed as
envisaged by this section and he was, therefore, not disentitled to get the benefits provided by it.9

PROVISO: BURDEN OF PROOF

The workman in whose favour the industrial tribunal has made an award directing his reinstatement is required by the main
part of this section to file an affidavit before the court where the employer has preferred proceedings against such award to
the effect that he ‘had not been employed in any establishment’ during the pendency of such proceedings. Once such
affidavit has been filed by the workman, he has discharged the burden cast upon him. Then, by virtue of the proviso, the
burden of proof shifts to the employer. Thereafter, it is for the employer to satisfy the court that the workman, in fact, had
been employed and he had been receiving adequate remuneration during such period or part thereof. If the employer
successfully satisfies the court that the workman had been so employed, the court must direct that wages as contemplated
by s 17B, shall not be paid by the employer to the workman for the period or part thereof, as the case may be. In the
absence of such proof, payment of wages as contemplated by this section must automatically follow on the workman

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having filed his affidavit. The employer has to place sufficient and cogent material before the court for satisfying it that the
workman had, in fact, been employed in any establishment and had been receiving adequate remuneration. The court must
pass an order that the employer shall not be liable to pay wages as required by this section, for the period of pendency or
part thereof, as the case may be, during which the workman was so employed. But if the employer fails to prove to the
satisfaction of the court that the workman was so employed, he has to continue to pay wages as required by this section.10
In Oriental Containers, instead of placing any material before the court, the employer referred to the report of some
detective agency without filing an affidavit stating that the report had been accepted as correct. The Bombay High Court
held that the report of the detective agency per se is not any evidence and evidence has to be led in proof thereof. As no
such evidence had been placed before the court, it did not entertain the plea.11

CONSTITUTIONAL VALIDITY

The question of the constitutional validity of this section came before the Supreme Court in Dena Bank, wherein it
affirmed that a High Court under Art 226 and the Supreme Court under Art 136 is not precluded by s 17B from passing an
order directing payment of a higher amount to the workman, if such higher amount is considered necessary in the interest
of justice. The court may also give directions regarding refund or recovery of the excess amount in the event of the award
being set aside. Such directions, however, would be de hors the provisions of this section. Conferment of the right on the
workman under s 17B cannot be regarded as a restriction on the powers of the High Court or the Supreme Court under Arts
226 and 136 of the Constitution.12

47 Ins by Act 46 of 1982, s 11 (wef 21-8-1984).

48 Bharat Singh v Mgmt of ND Tuberculosis Centre 1986 Lab IC 850 : AIR 1986 SC 842 [LNIND 1986 SC 105] (SC), per Khalid J.
49 Dena Bank v Kiritikumar T Patel, 1998 (1) LLN 375, 381-82 (SC), per Agrawal, J.
50 WHD’ Cruz & Sons v ME Thomas (1996) 1 LLJ 706, 712-13 (Ker), per Kamat J.
51 Workmen rep. by India Cements EU v IT (1991) 2 LLJ 141, 143 (Mad), per Natarajan J.
52 Bharat Petroleum Corpn Ltd v Union of India (1998) 2 LLN 228 (Cal), per Kundu J.
53 Rajasthan SRTC v LC (1998) 1 LLJ 831, 834 (Raj) (DB), per Arora J.
54 CM Saraiah v EE, Panchayat Raj Deptt (2000) 1 LLJ 23 [LNIND 1999 SC 59] : (1999) 9 SCC 229 [LNIND 1999 SC 59] (SC).
55 Commandant, Defence SC Centre v Secy, NCCGUE Assn (2001) 3 LLN 1106 (Ker) (DB), per Joseph CJ.
56 Neelaiah GM v Karnataka STDC (1999) 1 LLJ 146 (Kant) (DB), per Bhakthavatsalam J.
57 Sri Varadaraja Textiles (P) Ltd v PO, LC (1998) 4 LLN 302 (Mad), per Kanakaraj J.
58 Hind Rectifiers Ltd v PO, LC (2001) 1 LLN 155 (Bom), per Shah J.
59 Regional Engineering College v U Cheralu (2000) I LLJ 1086 : AIR 2000 SC 1907 (SC).
60 Nagar Panchayat v SK Rawat (1999) 83 FLR 362 (MP).
61 Dena Bank v Ghanshyam (2001) 3 LLN 30, 32 (SC), per Qadri J.
62 Levcon Instruments (P) Ltd v State of West Bengal (2002) 2 LLN 564 (Cal), per Kundu J.
63 Narendra Kumar v Taj Services (2001) 4 LLN 34 (SC).
64 Paramjit Singh Ahuja v PO, LC (2001) 4 LLN 1069 (Del), per Sen J.
65 BC Kachhadiya v Rajkot Municipal Council (2002) 2 LLN 605 (Guj) (DB), per Panchal J.
66 Hindustan Zinc Ltd v IT (2000) 2 LLJ 1370 : (2001) 10 SCC 211 (SC).
67 Adarsh GSSS Ltd v LC (2001) 1 LLN 732 (All), per Seth J.
68 Workmen of Hindustan Vegetable Oils Corpn Ltd v Mgmt (2000) 2 LLJ 792 [LNIND 2000 SC 641] : (2000) 9 SCC 534 [LNIND
2000 SC 641] (SC).
69 Anakapalle CAIS Ltd v Workmen (1962) 2 LLJ 621 [LNIND 1962 SC 345] (SC), per Gajendragadkar J.
70 Madhya Pradesh LUN Ltd v Mohd Imran (2001) 4 LLN 507 (MP), per Kulshreshta J.

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71 Mideast India Ltd v KM Unni (2002) 4 LLN 169 (Del), per Sarin J.
72 Administrator KNM Hospital v Vinod Kumar, AIR 2006 SC 584 : (2006) 1 SCC 498 : (2006) I LLJ 711(SC), per Pasayat J.
73 North East Karnataka RTC v M Nagangouda, AIR 2007 SC 973 : (2007) 10 SCC 765 : (2007) I LLJ 1013(SC), per Kabir J.
74 Talwara CCSS Ltd. v. Sushil Kumar, 2008 AIR SCW 6532, per Sinha, J.
75 Rao, EM, ‘Industrial Jurisprudence: A Critical Commentary’, 2nd ed, Lexisnexis, (2015), p. 464.
76 Anand Nursing Home v Mahadev Gaikwad (2009) 2 LLJ 580 [LNIND 2008 BOM 974] : 2008 (119) FLR 907 (Bom).
77 GE India Industrial Pvt Ltd v Second LC (2009) 2 LLJ 214 : 2008 (119) FLR 903 (Cal), per DK Gupta J.
78 Rajasthan Gramin Bank v BL Bairwa AIR 2010 SC 1789 [LNIND 2009 SC 818]: (2010) 13 SCC 248 [LNIND 2009 SC 818] :
(2009) III LLJ 235(SC).
79 Mgmt, Rajrappa Washery, Central Coalfields Ltd v Workmen (2010) 3 LLJ 553 (Jhar).
80 Food Corporation of India v Union of India (2011) 2 LLJ 481 : 2011 LLR 77 [LNIND 2010 CAL 67] (Cal), per JK Biswas J.
81 Islamia Institute of Technology v IITE Union (2012) 4 LLJ 488 : ILR 2012 KARNATAKA 968 [LNIND 2012 KANT 4] (Kant),
per Sen J.
82 Kiran Uppal v Ashok Kumar (2012) 4 LLJ 414 : 2012 LLR 918 (Del), per Suresh Kait J.
83 Bharat Coking Coal Ltd v PO, CGIT, (2014) 2 LLJ 207 : 2014 Labic 2748(Cal), per Soumen Sen J.
84 Secretary, Bihar JSKM Sangh v Bharat Coking Coal Ltd (2014) 3 LLJ 24 : 2014 LLR 1041 (Jhar) (DB).
85 Bharat Singh v Mgmt of ND Tuberculosis Centre 1986 Lab IC 850 : AIR 1986 SC 842 [LNIND 1986 SC 105]: (1986) II LLJ
21(SC) per Khalid J.
86 Indian Explosive Ltd v Fourth IT, 1987 Lab IC 525, 527 (Cal) (DB), per Banerjee J.
87 International Air Cargo Workers’ Union v IAAI (1996) 1 LLJ 1192 [LNIND 1995 MAD 793], 1194 : (1996) I MLJ 190(Mad)
(DB), per KA Swamy J.
88 Dena Bank v Kiritikumar T Patel 1998 (1) LLN 375 (381-82) (SC), per SC Agrawal J.
89 Fouress Engg (I) Pvt Ltd v Delhi Admn (1992) 1 LLJ 710 (Del) (DB), per MC Jain J.
90 Hans Raj Mahajan & Sons (P) Ltd v PO, LC, (2001) 3 LLN 778 (P&H) (DB), per Sudhalkar J.
91 Singer India Ltd v State of West Bengal (1999) 1 LLN 779 (Cal), per Ruma Pal J.
92 Rajasthan SRTC v Panwar Kumar & Ors, (2015) 1 LLJ 227 : 2014 (143) FLR 713 (Raj) (DB).
93 SS Shetty v Bharat Nidhi Ltd (1957) 2 LLJ 696 [LNIND 1957 SC 88], 701, per Bhagwati J.
94 Mgmt of Praga Tools v Chairman-cum-PO (1996) 1 LLJ 748, 752 (AP) (DB), per Misra CJ.
95 VA Unnis v MA Khizar Hussain & Sons 1987 Lab IC 527 -528 (Mad) (DB), per Chandurkar CJ.
1 SK Samser Ali v Kesoram I&C Mills Ltd (1988) 1 LLJ 1, 7 (Cal) (DB), per Manasnath Roy J.
2 Bata India Ltd v Seventh IT (1991) 2 LLJ 468 [LNIND 1990 CAL 155] : (1991) 1 CALLT 169 (Cal), per Ganguli J.
3 IDL Chemicals Ltd v SR Tamma 1989 Lab IC (NOC) 16 (Ori) (DB).
4 Gujarat SRTC v Jarnal Sinh D Ramgadhia (1997) 1 LLJ 774, 780 : (1996) 3 GLR 698 (Guj), per Gokhale J.
5 Westinghouse SF Ltd v State of WB (1998) 1 LLJ 654, 660-61 (Cal) (DB), per Ruma Pal J.
6 Hotel Mansingh v Judge, IT (2000) 2 LLJ 1241 : 2000 (4) WLC 184 (Raj), per Verma J.
7 Air India Ltd v PK Upadhaya (1999) 3 LLN 903 (Bom), per Shah J.
8 Vysya Bank Ltd v General Secretary, AIVBE Union (1996) 1 LLJ 420, 423 : 1994 (1) Karlj 15 (Kant), per Hakeem Ag CJ.
9 Mgmt, Hindustan Machine Tools Ltd v LC (1992) 1 LLJ 494, 497 (Raj), per lsrani J.
10 Hind Plastic Industries v LC 1990 Lab IC 236 -37 (Kant) (DB), per Chandrakantaraj Urs J.
11 Oriental Containers Ltd v Engg Workers Assn, 1996 Lab IC 2166, 2181 (Bom) (DB), per Majithia J.
12 Dena Bank v Kiritikumar T Patel CA No 7785 of 1997 : AIR 1998 SC 511 [LNIND 1997 SC 1455]: (1999) 2 SCC 106 [LNIND
1997 SC 1455] (SC), per SC Agrawal J.

End of Document

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O P Malhotra: The Law of Industrial Disputes, 7e 2015
O P Malhotra

O P Malhotra: The Law of Industrial Disputes, 7e 2015 > O P Malhotra: The Law of Industrial Disputes, 7e
2015 > Volume 1 > CHAPTER IV Procedure, Powers and Duties of Authorities

The Industrial Disputes Act, 1947 (Act 14 of 1947)

CHAPTER IV Procedure, Powers and Duties of Authorities

S. 18. Persons on whom settlements and awards are binding.—

13[(1) A settlement arrived at by agreement between the employer and workman otherwise than in the course of
conciliation proceeding shall be binding on the parties to the agreement.
(2) 14[Subjectto the provisions of sub-section (3), an arbitration award] which has become enforceable shall be
binding on the parties to the agreement who referred the dispute to arbitration.]
15[(3)] A settlement arrived at in the course of conciliation proceedings under this Act16[or an arbitration award in a
case where a notification has been issued under sub-section (3-A) of Section 10-A ] or 17[an award 18[of a Labour
Court, Tribunal or National Tribunal] which has become enforceable] shall be binding on—
(a) all parties to the industrial dispute;
(b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board,
19[arbitrator,] 20[Labour Court, Tribunal or National Tribunal] as the case may be, record the opinion that

they were so summoned without proper cause;

(c) where a party referred to in clause (a) or clause (b) is an employer, his heirs, successors or assigns in respect
of the establishment to which the dispute relates;
(d) where a party referred to in clause (a) or clause (b) is composed of workmen, all persons who were employed
in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date
of the dispute and all persons who subsequently become employed in that establishment or part.

LEGISLATION

This section was enacted in the original Industrial Disputes Act 1947. It has since undergone numerous amendments which
have been indicated in the footnotes to the body of the section. Section 18 divides settlements and awards into two
categories. The first category consists of settlements which are arrived at otherwise than in the course of any conciliation
proceedings and the arbitration awards under s 10A. This category is envisaged by sub-ss (1) and (2). The second category
consists of settlements which are arrived at ‘in the conciliation proceedings’ before a conciliation officer or the Board and
the awards of the adjudicatory authorities,viz, the labour courts, tribunals or the national tribunal. The binding effect of
settlements and awards falling under these two categories is also different. The employer, of course, is a common party in
both types of settlements and awards, but workmen who get bound by settlements and awards falling under the first
category are only those workmen, who were parties to the agreement in the case of settlement or were parties to the
reference made to a private arbitrator. The case, however, is different in respect of settlements and awards falling under the
second category.21

The Right to Represent and Bargain Collectively:

In State Bank of India, Srikrishna J (for self and Balakrishnan J), while setting aside the order of the Orissa High Court,
dealt with the issue of ‘general right of a union to bargain’, and observed:
 (IN) O P Malhotra: The Law of Industrial Disputes, 7e 2015

The review petitioner [State Bank of India] has urged two points in support. First, that even the majority union does not
have the right of negotiation or representation with respect to individual grievances and denial of this right to a union,
which was admittedly a minority union, could hardly be said to be discriminatory as the High Court seems to have
assumed. On the contrary, it is urged that conferring such a special right on the minority union would amount to reverse
discrimination. Secondly, it is contended that in Common Law there is no obligation on an employer to confer upon a
union the right to represent individual employees and unless such a provision is expressly made by any statute or statutory
rules, the employer is not obliged to grant any such right. The High Court has found that the 1994 Verification Rules do
not apply. In any event, the State Bank as a public sector bank had created its own efficacious grievance settlement
machinery and there was no justification for the High Court to import the principle, if any, from Rule 24 of inapplicable
rules to override the grievance redressal machinery which was already in place. The petitioner contends that these
submissions have been lost sight of in the judgment, which is sought to be reviewed. Hence, the review petition.. .. For the
respondent association [All Orissa SBI Officers Association], however, it is contended that there is no law under which the
representative character of the majority association has been determined. It is also contended that there is no statutory
provision, which could decide as to which of the contending trade unions really represents the concerned employees. In
these circumstances, it is urged that the judgment of the High Court took a reasonable view, namely, that the non-
recognised trade unions should also be accorded the right of representing individuals and ventilating their grievances by
holding discussions with the employer which is precisely what has been accepted, and reiterated in the judgment of this
Court dated May 6, 2002. It is, therefore, contended that there is no scope whatsoever, much less any need, to review the
judgment.. .. In our view, the contention urged by the counsel for the Review Petitioner has merit and needs acceptance.
There is no Common Law right of a trade union to represent its members, whether for purposes of collective bargaining or
individual grievances of members. This is an inroad made into the Common Law by special statutes. Either the special
statute operates proprio vigore, or it does not. In the situation before us, it is undisputed that Rule 24(a) on which the
respondent association and the High Court placed reliance, has no application. This is accepted even in the judgment under
review. Nonetheless, on general principles of equity, justice and fair play the judgment under review holds that the
minority trade union should also be afforded an opportunity of ventilating individual grievances of its members. It appears
to us that, in doing so, the attention of this Court was not adverted to the elaborate grievance procedure machinery which is
in existence and the details of which are placed on record.22

SUB-SECTION (1): BINDING EFFECT OF A PRIVATE SETTLEMENT

This sub-section was introduced by the Amending Act of 1956, with a view to remedy a defect in the then existing law.
Prior to this amendment, there was no provision to make such settlements binding even on the parties thereto, with the
result that the workmen notwithstanding, such a settlement could raise an ‘industrial dispute’ on the identical matter agreed
upon by their union.23By the same amending Act, the definition of ‘settlement’ was also amended, as the original definition
contemplated only a settlement arrived at in the course of conciliation proceedings, so as to include written agreements
between the employer and workmen arrived at otherwise than ‘in the course of conciliation proceedings’ where such
agreement has been signed by the parties thereto in the prescribed manner and a copy thereof has been sent each to the
‘appropriate government’ and the conciliation officer.24 This sub-section provides that a settlement arrived at by agreement
between the employer and the workmen ‘otherwise than in the course of conciliation proceedings’, as is apparent from the
language of this provision, shall be binding only ‘on the parties to the agreement. In order to make such a settlement
binding on them, it should be arrived at by agreement between the employer and the workmen.25 Normally, it is the union
or the representatives of the employees who enter into agreement with the employer. All the employees do not, as a matter
of fact, become parties, to the agreement but the settlement signed by such representatives binds all those whom they
represent. Therefore, the terms of the settlement become a part of the contract of employment of each individual workman
represented by such representatives.26 In Herbertsons, the Supreme Court held that, where a union claims that a substantial
number of workmen were not a party to the settlement entered into with the majority union and hence they would not be
bound by such settlement, it has to establish that fact before the tribunal by adducing relevant evidence. Even if a few
workers were not members of the majority union, if it is a just and fair settlement arrived at otherwise than in the course of
conciliation proceedings, it should not be disturbed particularly when a recognised and registered union enters into a
voluntary settlement.27

In Tata Chemicals, the court held that a settlement in relation to industrial disputes between the employer and the union
representing the majority workmen will not bind the minority union, who was not a party to the settlement.28 Construed in
the light of the other provisions of s 18, the definition of the term ‘settlement’ and the relevant statutory Rules, this sub-
section does not appear to vest in the employer and the workmen ‘freedom to settle a dispute as they please and clothe it
with a binding effect on all workmen’ or even on all member-workmen of the union to which they belong. The settlement
has to be in compliance with the statutory provisions.29 For instance, an agreement which is by acquiescence and is not in
writing or is not signed, is not a settlement as defined in the Act and cannot, therefore, bind even the parties to such an
agreement.30 Rule 58 of the Industrial Disputes (Central) Rules 1957, provides that a settlement arrived at in the course of

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the conciliation proceedings or otherwise shall be in Form H, and prescribes the persons by whom the memorandum of
settlement can be signed on behalf of the employer and the union respectively. However, a reading of this rule clearly
shows that it pre-supposes the existence of a settlement already arrived at between the employer and the workmen and it
only prescribes the form in which the memorandum of settlement should be signed and by whom it should be signed. It
does not deal with the entering into or arriving at a settlement. Thus, where a settlement is alleged to have been arrived at
between an employer and one or more office bearers of the union, and the authority of the office bearers, who signed the
memorandum of settlement, is challenged or disputed, the said authority has to be established as a fact.31

Affidavits filed by workmen before the industrial tribunal stating that they had effected the settlement of their disputes
with the employer would not constitute a ‘settlement’ of their dispute within the meaning of the term as defined in the
Act.32 The validity of a settlement arrived at under s 18(1) of the Act cannot be gone into by the authority, under the
provisions of a state statute like the Shops and Establishments Act.33 Any memo of the employer subsequent to the
settlement to the contrary cannot override the settlement.34 In DN Ganguly, the Supreme Court observed that it would be
unreasonable to assume that the industrial tribunal would insist upon dealing with the dispute on merits even after it is
informed that the dispute has been amicably settled between the parties.35 In Sirsilk, a settlement was arrived at between
the parties on the same dispute in respect of which the tribunal had sent its award to the government for publication.
However, before the publication of the award, the parties jointly wrote to the government intimating it of the settlement
and requesting it not to publish the award. In view of the mandatory provisions of ss 17(1) and 18(1), the government
refused to withhold the publication. The employer, therefore, filed a writ petition in the AP High Court praying for a writ
restraining the government from publishing the award. The High Court rejected the writ petition. In appeal by special
leave, the Supreme Court held that, though the requirement of s 17(1) to publish the award is mandatory, in the special
circumstances of the case and with a view to avoid conflict between a settlement binding under s 18(1) and an award
binding under s 18(3) on publication, the only solution was to withhold the publication of the award and that would not in
any way have affected the mandatory requirement of s 17(1) of the Act. Wanchoo J observed:

Therefore, as soon as an agreement is signed in the prescribed manner and a copy of it is sent to the government and the
conciliation officer, it becomes binding at once on the parties to it and comes into operation on the date it is signed or on the date
which might be mentioned in it for its coming into operation. In such a case, there is no scope for any inquiry by government as to
the bona fide character of the settlement which becomes binding and comes into operation once it is signed in the manner provided
in the rules and a copy is sent to the government and the conciliation officer. The settlement having thus become binding and in
many cases having already come into operation, there is no scope for any inquiry by the government as to the bona fides of the
settlement.36

In Amalgamated Coffee, the dispute in question was compromised by agreement between the employer and his workmen
during the pendency of the appeal by special leave in the Supreme Court against the award of the industrial tribunal.
Consequently, the employer moved the court for disposing of the appeal in terms of the settlement. This motion was
resisted by some of the workmen on the ground that they were not parties to the agreement and the agreement, therefore,
was not binding on them. The court in the circumstances, remitted the case to the tribunal calling for a finding on the facts
whether actually a large number of the workmen employed by the employer had accepted payments consistent with the
terms of the agreement set up by the employer. The tribunal returned the finding that in every estate, payments were made
in terms of the settlement, that such payments were voluntarily and knowingly accepted by the workmen and that the
settlement was a fair settlement, having regard to the basic facts of the dispute between the parties. In view of these
findings, the Supreme Court observed that the settlement was a fair one, hence the objection by the dissenting workmen
could not be sustained.37 This decision goes even further than the Sirsilk case, preferring a private settlement between the
parties even to an award which had, in fact, been published and become binding under s 18(3) and was the subject-matter
of appeal before the Supreme Court. In Delhi Cloth Mills, the court appears to have taken a diametrically opposite view
holding that during the conciliation proceedings or after the failure of the conciliation proceedings, the parties cannot
arrive at a private settlement and clothe it with a binding effect even on the members of the union which entered the
settlement. In this connection, Dua J who delivered the opinion of the court said:

We do not think the management and the union can, when a dispute is referred to the conciliation officer, claim, absolute freedom
of contract to arrive at a settlement in all respects binding on all workmen, to which no objection whatsoever can ever be raised by
the workmen feeling aggrieved. The question of a valid and binding settlement in such circumstances is, in our opinion, governed
by the statute and the rules made thereunder. Reliance was next placed on section 18(1) to support the binding character of the
settlement. This sub-section for its proper construction must be read with the other sub-sections and the relevant rules, in the light
of the definition of ‘settlement’ as contained insection 2(p) of the Industrial Disputes Act. ‘Settlement’ as defined therein means a
settlement arrived at in the course of conciliation proceedings and includes a written agreement between the employer and
workmen arrived at otherwise than in the course of conciliation proceeding where such agreement has been signed by the parties

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thereto in such manner as may be prescribed and a copy thereof has been sent to the appropriate government and the conciliation
officer. In the light of these provisions we do not think that section 18(1) vests in the management and the union unfettered
freedom to settle the dispute as they please and clothes it with a binding effect on all workmen or even on all member workmen of
the union. The settlement has to be in compliance with the statutory provisions.38

These observations are clearly contradictory to the ratio of Sirsilk and Amalgamated Coffee to which the attention of the
court does not appear to have been drawn. In Sirsilk case, it was pointedly stated that ‘as soon as an agreement is signed in
the prescribed manner and a copy of it is sent to the government and the conciliation officer, it becomes binding at once on
the parties to it and comes into operation on the date it is signed. Applying this rule, it would appear that the settlement
became binding on the day it was signed. The requirement of s 2(p) to send a copy of the settlement to the conciliation
officer was also obviously complied with. Hence, the settlement was in accordance with law and was binding under s 18(1)
on the workmen who were parties to it, particularly the concerned workman himself who was the president of the union at
the time of the settlement. In this connection, it is relevant to note that s 18(1) makes an ‘agreement between the employer
and workman otherwise than in the course of conciliation proceedings’, binding on the parties to the agreement. In other
words, if the workman concerned himself enters into a private agreement with the employer that will make the agreement
binding on him. The workman in this case, therefore, who was a party to the settlement was also bound by the settlement.
The observations of the court, that ‘when a dispute is referred to the conciliation officer’, the parties cannot ‘claim absolute
freedom of contract to arrive at a settlement’, is not borne out by the statute. The Act does not postulate any ‘reference’ to
a conciliation officer of any ‘industrial dispute’. The conciliation proceedings in a public utility service, as in this case,
commence when a notice of strike is received by the conciliation officer, and where no settlement is arrived at, they are
deemed to have concluded when the failure-report of the conciliation officer is received by the ‘appropriate government’.
It is nowhere provided in the Act or the Rules that during the pendency of the conciliation proceedings or after the failure
of such proceedings, the parties are barred from arriving at a private settlement. If there is no bar to a private settlement
after the award has been made, as in Sirsilk, and even after the publication of the award as in Amalgamated Coffee, much
less can there be a bar to such a settlement during the pendency of conciliation proceedings or after the failure of such
proceedings. The view of the court that the parties cannot arrive at a private settlement during, or after the failure of, the
conciliation proceedings, is neither warranted by the statute nor by precedent. The further observation of the court that the
provisions of s 18(1) do not vest in the parties ‘unfettered freedom to settle the dispute as they please and clothe it with a
binding effect’, is no less misconceived. The court found a further flaw in the settlement on the ground of non-compliance
of r 58(4). This rule requires the parties to the settlement to send a copy thereof jointly to the appropriate government. The
memorandum of settlement in this case was sent along with a letter from the management to the government. The court
took the view that since the settlement in question was not jointly sent to the government, the rule was not complied with
in order to clothe the settlement with a binding character on all the workmen. This view is equally misplaced, because the
requirement of jointly sending a copy of the memorandum of settlement to the government is merely directory and not
mandatory. The decision of Dua J in Delhi Cloth Mills is replete with a host of infirmities of rudimentary nature, such as,
misreading of provisions, misapplication of law and perverse analysis, and deserves to be rejected outright as being
repugnant to the time-tested canons of collective bargaining and s 18 of the Act.

The Patna High Court in Rohtas Industries, held that the tribunal had complete jurisdiction to decide whether the
settlement arrived at between the parties was bona fide and as also its binding effect on the workmen concerned. It was
further observed that the tribunal would take into consideration the settlement while passing the final award by it.39 In
Sirsilk, the Supreme Court prohibited the publication of the award with a view to avoid a likely conflict between a binding
award and a binding settlement covering the same subject matter. The High Court does not appear to have appreciated the
ratio of that decision of the Supreme Court and contented itself merely by saying that the said decision had no application
to the present case. The legal position is very clear in so far as a settlement, if arrived at genuinely and bona fide, would be
binding on the parties under s 18(1) and the tribunal should accept it as it is. In Blue Star, pending adjudication, the parties
had jointly filed an application bringing to the notice of the labour court that a private settlement had been arrived at
between them to the effect that the workman will be reinstated without backwages or allowances. As a matter of fact,
pursuant to the settlement, the workman had even joined duty. However, the labour court did not pass an order on the
application for a period of two years. Then, the workman filed an application before the labour court seeking the relief of
backwages based on an alleged oral agreement and the labour court proceeded to inquire into the claim. In a writ petition
filed by the employer for prohibiting the labour court from proceeding with the inquiry, a single judge of the Delhi High
Court held that the labour court could not adjudicate upon the question which stood settled by the settlement because after
the settlement, the adjudication had become infructuous. The learned judge further observed that since there was no
explanation from the workman regarding the delay of two years in seeking the relief of backwages, the workman had
acquiesced and was estopped from raising any dispute.40

In WIMCO, on behalf of the employer, a novel point was addressed to the Supreme Court, that the letter of appointment of
a probationer was in the nature of a privatesettlement binding under s 18 of the Act. In fact, the case was not governed by s

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18 of the ID Act but was governed by s 6B of the UP Industrial Disputes Act which is somewhat similar to s 18 of the ID
Act. On a construction of the provisions of that section, the court held that ‘any privately negotiated settlement should be
submitted for registration to the conciliation officer’. In this view of law, the contention was rejected.41 In Veeramani, a
single judge of the Karnataka High Court held that a settlement under s 12(3) read with r 59 of ID (Mysore) Rules 1959,
which had been signed by a person who was not an authorised agent of the party, has no binding effect on the party whom
he seeks to represent.42 A settlement under s 18(1) between the management of the bank and the union, which stipulates
that a candidate should secure minimum percentage of marks in English to qualify in the written test for promotion, is not
violative of any of the provisions of the Constitution or of the Official Languages Act 1963 or for that matter any public
policy. The said settlement is binding on both the parties unless revoked in accordance with law.43 Where the management
withdrew the facility of treating the office-bearers of recognised trade union as on duty for the purpose of doing trade
union work, a single judge of the High Court, having dismissed the writ petition filed by the workmen on the ground that
the matter involved disputed questions of fact, yet directed the Corporation to continue the facility duly scaled down from
what it had been agreed in the settlement.44

In Hindustan Lever, Savant J of Bombay High Court held that a settlement as understood by s 2(p) must necessarily be
with the union since the dispute before the court was not concerning either discharge, dismissal, retrenchment or
termination of the service of a workman.45 The decision rendered in Hindustan Lever merits analysis, if for nothing else, to
highlight the spate of misconceptions that Savant J brought to bear upon the concept of collective bargaining as well as the
provisions of the ID Act. A look at the ID Act unfolds that there is nothing either in s 2(p) or in s 18(1) to suggest that an
individual workman is prohibited from entering into a settlement with the management or that there should necessarily be a
trade union in every industrial establishment to represent workmen in negotiations. At least in India, no enactment has so
far mandated compulsory unionisation of industrial establishments. On the contrary, the law permits a group of workmen
or even an individual workman to enter into a settlement with the management, whether or not there is a union and whether
or not he/they are the members of it. Section 18(1) stipulates in terms: ‘A settlement arrived at by agreement between the
employer and workman otherwise than in the course of...’ The singular noun ‘workman’ - and not plural ‘workmen’ -
occurring in the above sub-section clearly points to the fact that an individual workman is as much entitled to negotiate
with management and arrive at a settlement just as any other group of workmen or a trade union is. The learned judge
relied, inter alia, on Ram Prasad Vishwakarma (infra), and Brooke Bond (infra), in support of his decision. Strangely,
however, neither of the two decisions touches upon the question that was substantially at issue in Hindustan Lever. For a
complete appreciation of the misplaced comparison drawn by Savant J, it is necessary to briefly discuss both the cases. The
first case was Ram Prasad Vishwakarma, in which the facts were:

(a) It was a case of dismissal of a workman; it had nothing to do with either collective bargaining or with s 18 of the Act.

(b) At the time of deciding the case (1961), s 2A of the ID Act did not take its birth, which section was inserted some four
years later in 1965
(c) Hence, in the pre-1965 dispensation, there was no provision for an individual dispute in terms of the ratio of Central
Provinces Transport Services,46 even in the event of discharge, dismissal etc., and such a dispute had to be necessarily
espoused by a union or a group of workmen, in order to bring it within the ambit of the definition of industrial dispute
under s 2(k).
(d) The general secretary of the union espoused the dispute relating to the dismissal of the appellant-workman, which was
pending before the tribunal for adjudication. The tribunal granted several adjournments as the union and management
represented that talks were going on at the bipartite level and that a compromise was likely to be reached in the matter.
(e) In the meantime, the appellant-workman filed an application before the tribunal stating that he had not authorised the
general secretary to represent his case; that he had no faith in him; and any agreement or compromise filed by him
should not be accepted by the tribunal.
(f) The tribunal rejected the said application and passed an award in terms of the compromise reached between the
management and the union. Having lost the case in the High Court, the workman filed an appeal in the Supreme Court.

The issue raised before the Supreme Court was whether the appellant was entitled to separate representation in spite of the
fact that the Union, which had espoused his cause, was being represented by its Secretary. Rejecting the contention of the
workman, Das Gupta J (for self, Gajendragadkar and Wanchoo JJ) held:

It is now well-settled that a dispute between an individual workman and an employer cannot be an industrial dispute as defined in
section 2(k) of the Industrial Disputes Act unless it is taken up by a Union of the workmen or by a considerable number of
workmen.. .. it cannot be said that the Tribunal committed any error in refusing the appellant’s prayer for representation through

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representatives of his own choice in preference to Fateh Singh, the Secretary of the Union.47

What is the relevance of the above decision to the facts of Hindustan Lever? The second case relied upon was Brooke
Bond, in which the issue was ‘what would be the effect if the office bearers signing the settlement had no authorisation
from the executive committee of the union’. The Apex Court held that in the absence of an authorisation from the
executive committee, an agreement between any office-bearer and the management cannot be called a settlement as
defined in s 2(p).48Here again, there is nothing which could throw any light on the issues canvassed in Hindustan Lever, in
which the facts disclosed that the individual workmen signed settlements with the management, which were undoubtedly
binding on them. It is one thing to say that a settlement, in order to be binding on the workmen in general, should be signed
by the union which represents them, and quite another to suggest that an individual workman is wholly debarred from
entering into a settlement in a matter concerning his service conditions. It is also not disputed that where a union ostensibly
represents the workmen, the office-bearers should submit the authorisation in Form ‘F’ without which the settlement so
arrived at cannot bind the workmen whom the union claims to represent. Where, however, the individual workman himself
signs the settlement touching upon his own conditions of service, the law does not require him to furnish any such
authorisation. In the face of unambiguous language used in s 18(1), to hold that ‘settlement’ means ‘a settlement arrived
with the union’ is a misreading of the provisions, and amounts to rewriting the enactment. Both the finding recorded by the
tribunal and the conclusion reached by Savant J are contrary to the letter and spirit of the ID Act. In striking contrast,
another single judge of the same High Court, Kochar J, in another case involving the same company, ie, Hindustan Lever,
ruled that, where all but one field-force employee arrived at individual settlements on identical lines with the management
during the pendency of the dispute raised by the union on their behalf, it was not reasonable on the part of the tribunal to
proceed further with the reference, and that it should make an award in terms of the settlement between the parties as laid
down by the Supreme Court in DN Ganguly.49 The above decision of Sawant J in Hindustan Lever betrays his inability to
understand the provisions of ID Act in their proper perspective, is wholly misconceived and absolutely wrong. Between
these two decisions, the view taken by Kochar J is consistent with the objects and scheme of the Act and is right, whereas
that of Savant J is repugnant to the law and deserves to be rejected outright without a second look.

In Karnataka SRTC, the Supreme Court held that the management, having entered into a settlement under s 18(1)
recognising the union as the sole bargaining agent for four years and extending the same for another four years coupled
with the facility of check-off, cannot unilaterally withdraw the check-off facility during the subsistence of the settlement
and even after the expiry of the period, until the said settlement is validly terminated under s 19 and a new settlement is
arrived at modifying the terms thereof. The court further held that the order passed by the state government for withdrawal
of the check-off facility during the currency of a valid settlement was totally ultra vires and uncalled for.50 Where a
workman is aggrieved against the bipartite settlement arrived at under s 18(1) between the management of the bank and the
recognised union is not binding on him because he was not a party to the settlement, it is always open to him to challenge
the same in a manner known to law, and he is not entitled to any relief in a writ appeal.51 In Dena Bank, the Supreme Court
held that, where the bank acted in accordance with the settlement reached under s 18(1) providing for two channels of
promotion-one by seniority-cum-merit and the other by merit alone—it would not be proper for the High Court to direct
the management to consider the cases of candidates, who were unsuccessful in the test prescribed for promotion through
‘merit’, as long as the settlement itself has not been challenged.52 The very fact that the All India Union is representing the
workmen employed all over the country in the establishments of the company and substantially large number of workmen
have accepted the settlements, there has to be legitimate inference that the settlements are reasonably acceptable to the
workmen. There is no reason for the minority union not to accept the settlements, after having accepted the benefits
flowing from the said settlements. The will of the majority of the workmen has to be accepted by the petitioner-union and
it cannot persist to have independent and separate adjudication of its own demands when all such demands have been
covered by the settlements with the All India TC Employees Union and the company.53 Where the settlement between the
management and union provided for the employment of a dependent of an employee who died while in service, the denial
of appointment to the son of deceased workman on the ground that the wife of deceased employee was already employed
in the company, goes against the spirit of the settlement, and the tribunal’s order upholding the management’s contention is
contrary to law.54

The intention of the parties to the settlement has to be gathered by the words used by the parties to the settlement. Having
regard to the context in which it was used, even if there is any ambiguity, the court should look at all the parts in the
settlement to ascertain what was really intended by the parties. In this context, the word ‘defect’ in the settlement, which
refers to a disease suffered by the workman making him unfit for work and disentitling him for absorption, has to be
construed, not technically, but liberally so as to advance the right to livelihood. When an employee was disabled by a
disease to perform the duties of his post, the employer should make all attempts to see the final result and make allowances
to get treatment since it promotes reasonableness in employment, otherwise, it amounts to taking away the employment
construing in a technical sense in a manner not reasonable, fair and just.55 In a case where, consequent upon the taking over
of a dairy run by the Municipal Corporation by Dairy Development Corporation, a settlement was reached between the

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transferor, transferee and the employees otherwise than in the course of conciliation proceedings providing for regulating
the service conditions of the erstwhile dairy employees of the Municipal Corporation, such settlement is binding only on
the parties to the agreement in accordance with s 18(1). It does not confer any benefit on the badli workmen who came to
be subsequently employed in the dairy under the transferee-corporation. It is only the settlement, which is arrived at in the
course of conciliation proceedings, ie, under s 18(3), which is binding on the workmen in employment at the time of
settlement as also all those who subsequently become employed in that establishment.56

Where the employees solemnly entered into an agreement with the management under s 18(1) agreeing to scale down the
gratuity amount payable under the Payment of Gratuity Act 1972 in the background of the sickness of the undertaking and
the need for its revival, such an agreement is valid and is not violative of s 14 of the Payment of Gratuity Act. The
workmen, having received the amounts in full, cannot question the lesser payment later.57 The union and workmen, who
are not parties to a settlement reached under s 18(1) between the management and another union, cannot be said to be
aggrieved persons as regards the said settlement, and the writ petition filed by them against the settlement is not
maintainable.58Once an agreement under s 18(1) was entered into which provided for pension and other benefits, and the
said agreement was acted upon by the employer, he cannot turn round and say that it was not an agreement within the
meaning of s 2(p) of the Act as the copy thereof was not sent to the authorities concerned. Once the agreement is acted
upon, there was a performance of the terms and once it is so performed, even in pain, would attract the principle of
equitable estoppel.59 A settlement arrived at under s 18(1) with the recognised union is binding on its members and an
individual workman of the union cannot be permitted to contend that it was not binding on him, merely because he did not
agree to the terms of the settlement or that he was not a signatory thereto.260 In Sarva Shramik Sangh, the facts were, out
of the two unions which submitted charter of demands, the management entered into a settlement with one, which was the
majority union. The minority union did not accept the terms of settlement and raised an industrial dispute which was
referred for adjudication. The industrial court recorded its opinion that the settlement arrived at between the management
and the majority union was just and fair and passed an award in terms of the said settlement. Repelling the contention
challenging the validity of the said award by the minority union, the High Court held that the award of the industrial court
did not warrant interference.61

A settlement reached between the employer and employees under s 18(1) implies that they are the employees of the
employer. It acquires statutory status and the engagement made as a result of such settlement, may be, by way of a job
contract, cannot be said to be a job contract and the employees cannot be said to be contract labourers. In fact, they are
workmen in view of their engagement being the result of statutory settlement under the ID Act. That being so, ‘cessation of
work’ and the consequent non-employment of the workmen amounts to retrenchment within the meaning of s 6N of the
UP Industrial Disputes Act. On this view of the matter, a single judge of the Allahabad High Court upheld the award of the
labour court that the cessation amounted to retrenchment in contravention of the UP Act.62 Once a workman has accepted
the VR Scheme and entered into a settlement with the management under s 18(1), he cannot turn round and complain that
his signature was obtained under coercion. There is no scope to construe that there was an industrial dispute under s 2A
and, by the same token, the order passed by the single judge of the High Court in favour of the workman cannot be
sustained and has to be set aside.63 In HMT, the facts disclosed that a settlement was arrived at between the management
and the union in April 1995 in terms of which, the wages and allowances were revised substantially. The settlement was to
be in operation for a period of five years from 1 January 1992 to 31 December 1996. Clause 13 of the settlement provided
that the payment of arrears from 1 January 1992 to 31 March 1995 would be discussed based on a periodic review of the
financial performance of the company. The question before the Supreme Court was in respect of arrears, which were not
paid as the company was on a downhill course. The financial figures showed a net loss of Rs. 3657 lakhs during the year
1998-99 and net earnings Rs. 2441 lakhs during the year 2000-01. The net worth of the company rose from Rs. 2410 lakhs
to Rs. 5414 lakhs during the same period. On behalf of the company, however, the attention of the court was drawn to
accumulated losses, which were Rs. 139.60 lakhs in 1998-99, Rs. 436.51 lakhs in 1999-2000 and Rs. 379-99 lakhs in
2000-01. The figures for the year 2001-02, the net earnings of this year were Rs. 1024 lakhs and the accumulated losses as
on 31st March, 2002 were Rs. 368 crores. As on 31st March, 2003 the accumulated losses would be about 403.33 crores.
Allowing the appeal in part, Srikrishna J (for self and Balakrishnan J) held:

.. . Clause 13 does not say that the disbursement of arrears would be made only after all accumulated losses are completely wiped
out. It merely says that it would be done on periodical review of the improvement in the financial performance. In our view,
therefore, the appellant was not justified in taking the rigid stand of refusing to disburse any of the arrears on the ground that
accumulated losses persisted. This was obviously an unreasonable stand and the High Courts were justified in exercising their writ
jurisdiction in directing the appellant to make the disbursements. However, we are not satisfied that the High Courts were justified
in directing full disbursement of arrears at one go. We are conscious of the fact that there has been improvement in the financial
performance, yet at the same time, we are also not satisfied that the financial performance had improved to such extent that the
entire liability needs to be discharged at one go. In our view, it would be necessary to give some more breathing time to the
appellant to ensure that the trend of financial improvement does not get reversed.. .. In the result, we allow the appeals partly and
modify the judgments of the Karnataka and Andhra Pradesh High Court as under :

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(A) It is held that there is some improvement in the financial performance of the appellant company subsequent to the
settlement dated 23-4-1995 and its implementation.
(B) It is held that the appellant’s obligation to discharge the liability towards arrears under Clause 13 of the said settlement
has partly arisen.
(C) It is directed that the appellant shall disburse 55% of the arrears payable during the period from 1-1-1992 to 31-3-1995 to
all eligible employees, to the extent of their eligibility, within three months from today.
(D) The balance amount of the arrears payable as aforesaid shall be computed and disbursed to all eligible employees in three
equal annual installments on or before 31st of March, 2005, 31st of March, 2006 and 31st of March, 2007 respectively.64

In Satheeshchandran, the facts related to the promotions in UCO Bank. The employee was employed as a clerk in the
Bank. He was promoted as Assistant Manager with effect from 1 August 1997. The promotion order stipulated that he
would be on probation for one year, which was likely to be extended up to a total period of two years as specified in the
Promotion Policy Settlement (PPS) dated 13 April 1988. While he was on probation, he was transferred to Mavoor where
he had joined the service. A few days later, he requested the management to revert him to his original post, which was
acceded to by the Bank on the following conditions :-

(1) You shall forfeit permanently your chance for promotion to officer’s cadre;

(2) You shall be posted in the capacity of a Clerk notwithstanding your occupying any functional special allowance post prior
to your promotion;
(3) Your name will be included in the common seniority list of eligible employees in the clerical cadre for selection to
functional special allowance posts under bipartite settlements after five years from the date of such reversion;
(4) On reversion, you shall work in both Cash and Accounts Department; You will not be eligible for stagnation increments.

This order was challenged by the employee by way of writ petition, and later in appeal to the Supreme Court. Allowing the
appeal in part, and quashing that part of the order which disentitled him to all future promotions, Naolekar J (for self and
Panta J) held:

11. Under sub-clause (b) of Clause 3.8.3 of the Bipartite Agreement, when an employee seeks reversion after the expiry of
probation period, he may be allowed reversion on his request in the discretion of the Bank and if such a request is acceded to by the
Bank, the employee shall have to forfeit permanently his chances for promotion to officers’ cadre. Therefore, if the promoted
officer has made a request after the expiry of the probation period, he has to give up all chances of future promotions to the
officers’ cadre. Thus, to forfeit chances of promotion to the officers’ cadre, the request for reversion is to be made after expiry of
the probation period. In the present case, the request for reversion, which was made by the appellant on 3.3.1999, was although
after a period of one year but was during the period of probation. The appellant’s case will be governed by sub-clause (a) of Clause
3.8.3 of the Bipartite Agreement and, thus, he can be denied future promotion only for a period of two years from the date the order
of reversion is made effective. The order of the Bank debarring the appellant of all future promotions to the higher rank of Officer
beyond the period of two years is, therefore, illegal and requires correction.. .. the appeal is partly allowed. The order of reversion
imposing a condition that the appellant shall forfeit permanently his chances for promotion to the officers’ cadre is set aside and it
is directed that he shall forfeit his chances for promotion to the officers’ cadre only for a period of two years from the date of the
order of reversion.65 (Paras 11-14) (Italics supplied).

It is submitted that this case was rightly decided. An employee may opt for reversion to his original post, during the period
of promotion to a higher grade post involving higher responsibilities, for a variety of reasons. It could be a case of self-
assessment on his part whether he was having the necessary knowledge and skills to handle the higher grade position,
before the management comes to such a conclusion, which is more detrimental to his career prospects. It could well be
understood that the employee wants time to acquire the knowledge and skills so that he can stake his claim for promotion
at a later date. The mere request to revert him to his original position, that too, during the period of probation in the
promoted post, should not be used as a tool to condemn him for life. The reversion order issued by the management is
archaic, primitive and tyrannical, apart from being in contravention of the terms of settlement reached under s 18(1). The
said portion of the order was rightly struck down by the learned judge.

In Air India Cabin Crew, there was a long history of settlements commencing from 1977 covering, inter alia, the
promotion policy of male Cabin Crew and female Air Hostesses with separate promotional avenues, as, for instance, male

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Cabin Crew was only eligible to post of In-Flight Supervisor prior to 1997. While this was so, a settlement was arrived at
between the Association and the Management in 1997 which provided for a new promotion policy by which the post of
Inflight Supervisor was thrown open to both male cabin crew (i.e., Inflight Purser) and female Air Hotesses, thereby
bringing parity between the two genders. The settlement further provided that all the earlier settlements, awards, past
practices, record notes and understandings arrived at between the erstwhile Corporation (i.e., Indian Airlines Corporation)
and the Association, would continue. Immediately after the signing of the said Memorandum of Settlement, on the very
same day, Air India Limited issued a promotion policy for all the Cabin Crew members, but treated the pre-1997 and post-
1997 crew separately. By a specific clause, the said promotion policy amended the existing promotional avenues for the
male Cabin Crew to that of In-Flight Supervisors and female Cabin Crew to the post of Senior Check Air Hostesses
recruited prior to the settlement. The said promotion policy kept the promotional avenues in the two streams of male Cabin
Crew and female Cabin Crew, recruited prior to 1997, separate. The common issue raised before the Supreme Court was
whether the promotional avenues and other terms of service of the pre-1997 cadre of Assistant Flight Pursers could be
changed to their prejudice. Justice Altamas Kabir (for self and Cyriac Joseph J), while conceding the position of the
appellant-union that that prior to 1997, there was a category of Cabin Crew referred to as In-Flight Supervisors, which was
confined to In-Flight Pursers alone and did not concern the Air Hostesses, rejected the other plea for treating In-Flight
Supervisor as a separate post, and held that the duties discharged by persons designated as ‘In-Flight Supervisors’ did not
create any separate post and the post remained that of ‘In-Flight Pursers’. On the question of the right of the management
to change the promotion policy and the binding effect of the settlement reached in 1997, the learned judge, while
dismissing the petitions filed by the Association, observed:

In our view, the Management of Air India was always entitled to alter its policies with regard to their workmen, subject to the
consensus arrived at between the parties in supersession of all previous agreements. We are also unable to accept the further
submission made on behalf of the appellants that those workmen who had been promoted to the Executive category would
continue to be governed by the Settlements arrived at when they were workmen and were represented by the Association. In our
view, once an employee is placed in the Executive cadre, he ceases to be a workman and also ceases to be governed by Settlements
arrived at between the Management and the workmen through the concerned Trade Union. It is not a question of an attempt made
by such employees to wriggle out of the Settlements which had been arrived at prior to their elevation to the Executive cadre,
which, by operation of law, cease to have any binding force on the employee so promoted by the Management.66 ().

In Needle Industries, the issue was the binding effect of a settlement arrived at otherwise in the course of conciliation
proceedings. A workman who was not a member of the union which signed the settlement and hence not a party thereto
filed an application under s 33C(2) for computation and recovery of the benefits accruing therefrom, which was allowed by
the labour court, but was rejected by a single judge of Madras High Court. Upholding the decision of single judge,
Nagappan J (for self and Sundresh J) observed:

The claimants were not parties to the Settlement under Section 18 (1) of the Act and in the absence of any existing right, claim
under Section 33C(2) of the Act cannot be legally sustained and the Order granting relief to them suffers from lack of jurisdiction;
error apparent on the face of the record and hence, liable to be set aside.67

The NCL-II took note of the practice of industry level negotiations on interest issues, which obtain in several industries
and recommended that the practice should continue. The Commission is in favour of unit level negotiations and
settlements in respect of wages, allowances, general conditions including total number of hours of work, leave, holidays,
social security, safety and health, productivity, manpower adjustments, change in shifts etc, so as to maximize the efficient
functioning of the individual establishments. The Commission recommended that a settlement entered into with a
recognised negotiating agent must be binding on all workers. This is a recommendation of far reaching consequences in
the face of the current law on the binding nature of settlements arrived at in the course of conciliation proceedings [ s 18(3)
] as against the ones arrived at otherwise than in the course of conciliation proceedings [ s 18(1) ]. In other words, the
Commission favours that a settlement arrived at the bipartite level with the recognised negotiating agent should have the
same effect as that of a settlement arrived at in the course of conciliation proceedings. The Commission further
recommended that the recognition, once granted, should be valid for a period of four years to be co-terminus with the
period of settlement; that no claim by anyother trade union/federation/centre for recognition should be entertained till at
least 4 years have elapsed from the date of earlier recognition. The individual workers’ authorisation for check-off should
also be co-terminus with the tenure of recognition of the negotiating agent or college.68

SUB-SECTION (2): BINDING EFFECT OF THE AWARD OF AN ARBITRATOR

This sub-section was inserted by the Industrial Disputes (Amendment and Miscellaneous Provisions) Act 1956. It has been
amended by the Industrial Disputes (Amendment) Act 1964. Before the amendment, an arbitration award was binding on

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the parties who referred the dispute to arbitration, after such an award became enforceable. Now, the result of the
amendment is that such an award would be binding subject to the provisions of sub-s (3). In other words, in a case where a
notification has been issued under sub-s (3A) of s 10A, the award of the arbitrator would not only be binding on the parties
to the agreement who referred the dispute to arbitration but shall also bind the parties mentioned in cl (d) of sub-s (3).

In Nagdevi Kamgar Sabha, the binding effect of an arbitration award came in for the consideration of Bombay High Court.
The facts of the case were: an arbitration agreement was entered into in September 1992 between a union of workmen and
four associations trading establishments. The government issued a notification under s 10A(3). Another union (petitioner,
in the case) submitted a charter of demands to the Commissioner of Labour on 28 August 1992 and when the arbitration
agreement was arrived at between the seventh respondent and respondent Nos. 3 to 6, the petitioner-union protested before
the Commissioner of Labour in writing, and also filed a writ petition before the Bombay High Court challenging the
notification issued under s 10A(3). The Commissioner of Labour declined to make a reference in respect of the charter of
demands raised by the petitioner on the ground that arbitral proceedings were to take place in pursuance of the notification
under Section 10-A and that the petitioner could raise a dispute before the arbitrator under Section 10-A(3) of the Act. The
writ petition was disposed of by a learned single Judge recording the agreement between the parties that the petitioner
would be entitled to represent its workers and would be entitled to be heard before the Board of Arbitrators. In another writ
petition filed by the petitioner against the refusal by the labour commissioner to refer the dispute, the single judge directed
the arbitrator to arbitrate upon the dispute raised by the petitioner union as well. Before the Board of Arbitrators, the
petitioner was impleaded as a party. The Board of Arbitrators, however, declined to issue notices in respect of 700 workers
who had been left out of the purview of the arbitration. The Board of Arbitrators made an award dated 29 October 1994.
The petitioner thereupon filed another writ petition challenging the validity of the award. The employers’ association,
respondent Nos. 3 to 7 also challenged the award by filing writ petitions. One of the issues canvassed before the High
Court was the extension of the award to all the workmen and the establishments set out in the petitioner’s application
before the Board of Arbitrators dated 20 March 1993. Rejecting the contention, Chandrachud J held that in view of the
admitted fact that no notification was issued under s 10A(3A), the operation of the said award could not be extended to
other establishments, which were not parties to the original arbitration agreement that was published by the Government
under s 10A (3) in September 1992.69

SUB-SECTION (3)

(i) Settlements arrived at in the Course of Conciliation Proceedings and Awards

The original s 18 has been renumbered as the present s 18(3) by the Industrial Disputes (Amendment and Miscellaneous
Provisions) Act 1956. This provision with respect to the binding effect, places the ‘settlements arrived at in the course of
conciliation proceedings’ at par with the awards made by the adjudicatory authorities. The combined effect of cll (a) to (d)
of this sub-section is that the ‘settlements arrived at in the course of conciliation proceedings’, or the award made by the
adjudicatory authorities, viz, labour courts, tribunals or national tribunals or an arbitrator [where a notification under sub-s
(3A) of s 10A has been issued] shall be binding on the following persons:

(i) all parties to the industrial dispute [ section 18(3)(a) ];

(ii) all other parties summoned to appear in the proceedings as parties to the dispute, unless the authority before
whom the proceedings are going on, records its opinion that such parties were summoned without proper cause [
section 18(3)(b) ];
(iii) the heirs, successors or assigns of the employer in respect of the establishment to which the dispute relates [
section 18(3)(c) ]; and
(iv) all persons who were employed in the establishment or a part thereof on the date of the dispute, and all persons
who become subsequently employed in the establishment or a part thereof [ section 18(3)(d) ].

Such settlements or awards bind not only the employer who is actually a party to the industrial dispute, but also his heirs,
successors or assigns in respect of that particular establishment.70 A settlement as a whole is binding on the parties, not
parts thereof only. In other words, those who invoke s 18(3) are not entitled to seek the implementation of a settlement
with the reservation treating parts of the terms as binding on them and parts of it not binding.71

Binding on All Parties to the Industrial Dispute:

This clause makes a settlement arrived at ‘in the course of conciliation proceedings’ and an award of a labour court,
tribunal or national tribunal or of an arbitrator [in a case where a notification under sub-s (3A) of s 10A has been issued],
binding on all parties to the dispute. Law gives greater sanctity to settlements than it gives to awards. Therefore, industrial
law does not contemplate any interference with the finality of a settlement and compels a settlement to run on for the

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period mentioned in the settlement itself and neither party is permitted to challenge that settlement during the period of its
operation.72 A settlement arrived at even by an unregistered union is binding on the parties to such a settlement.73 The
principle behind this is that a minority shall not be allowed to jeopardise the right of a majority,74 and in the interest of
uniformity and industrial peace such a settlement should bind all the parties.75 The object of giving extended application to
a settlement ‘arrived at in the course of conciliation proceedings’ is to uphold the sanctity of such settlement and to
discourage an individual employee or a minority union from scuttling the settlement. In the language of Ahmadi J:

There is an underlying assumption that a settlement reached with the help of a conciliation officer must be fair and reasonable and
can, therefore, safely be made binding not only on the workmen belonging to the union signing the settlement but also on others.76

Such a settlement has been put at par with an award. In ITC, the Supreme Court reiterated that a settlement arrived at in the
course of conciliation proceedings, being a product of collective bargaining, is entitled to due weight and consideration. It
cannot be ignored unless it is demonstrably unjust, unfair or the result of mala fides. A settlement extending benefits of life
pension only to employees retiring after a particular date and excluding those who retired before the said date could not be
a ground to characterise the settlement as unjust or unfair. A settlement arrived at under s 12(3) carries a presumption that
it is just and fair. It is binding on all the parties to the dispute as well as the other workmen in the establishment to which
the dispute relates and all other persons who may be subsequently employed in the establishment. An individual employee
cannot seek to wriggle out of the settlement merely because it does not suit him.77 A minority union has no locus standi to
challenge a settlement arrived at between the management and the majority union in the course of conciliation proceedings
under s 12(3) r/w s 18(3) of the Act.78

Power to Summon Parties to Appear:

The original parties to an industrial dispute are those parties that are mentioned in the order of reference and none
other.79There is no sanction in the Act which expressly empowers a tribunal to add parties to the proceedings. However,
such power is necessarily to be implied from s 18. From the provisions of cl (b), it is to be implied that the tribunal has
power to summon parties other than parties to a reference to appear in the proceedings before it as parties to the dispute.
This has a reference to proper and necessary parties who need not necessarily belong to the category of employer and
workmen.80 A necessary or proper party to a dispute referred for adjudication can be summoned at the instance of one of
the parties or suo motu by the tribunal and the award eventually passed will be binding on the party so summoned unless
the tribunal records that the said party was summoned without proper cause.81 In Brahmaputra Tea, the Supreme Court
held that where a receiver was appointed with respect to a tea company and an official liquidator was appointed, the labour
court should have issued notices to either or both of them as it was entitled to, and then should have proceeded to consider,
as to whether any reliefs could be granted to the workmen in view of the provisions of s 18 which clearly visualise parties
being summoned to appear before the labour court.82 Though the power to implead a party to adjudication does not fall
under any of the four heads enumerated in s 11(3), there is abundant authority that the provisions of s 18(3) of the Act vest
an implied authority in the industrial tribunals to implead parties. This power of the tribunals is similar to that under O I, r
10 of the Code of Civil Procedure 1908 to add necessary and proper parties to a dispute83 on whom an award shall be
binding.84The power implied in this provision is to summon such a party. There is no form of summons prescribed so far.
The tribunal, however, may issue summons in a form it deems fit and proper under s 11 (1) and follow such procedure with
regard to it as it may think fit, until the rules are framed under the Act, which deal with the matter of summons, etc.85

Parties cannot be added to Enlarge the Scope of Reference:

The power to summon and add other parties to the dispute which is implied in s 18(3)(b), cannot, however, be exercised by
the industrial tribunal so as to enlarge materially the scope of the reference itself, because basically the jurisdiction of the
tribunal to deal with an ‘industrial dispute’ is derived solely from the order of reference passed by the appropriate
government under s 10(1) of the Act. What the tribunal can consider in addition to the points of dispute specified in the
order of reference, are only the matters incidental to the said dispute; and that naturally suggests certain obvious limitations
on the implied power of the tribunal to add parties to the reference before it, purporting to exercise its implied powers
under this clause. If it appears to the tribunal that a party to an ‘industrial dispute’ named in the order of reference does not
completely or adequately represent the interest either on the side of the employer, or on the side of the employees, it may
direct that other persons should be joined who would be necessary to represent such interest. If the employer named in a
reference does not wholly represent the interest of the employer as such, other persons who are interested in the
undertaking of the employer may be joined. Similarly, if unions specified in a reference do not represent all the employees
of an undertaking, it may be open to the tribunal to add such other unions as it may deem necessary.86A receiver of a
factory is not a party to the dispute even if he has terminated the services of a workman because the workman is the
employee of the factory owner and not of the receiver. The receiver can act only on behalf of the suit-parties and not on his
own behalf and he does not step into the shoes of the owner and unless specifically directed does not carry on the business

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in the usual course.87 The terms of reference in any particular case determine the amplitude of the jurisdiction as well as
the scope of powers exercisable in such a case. The power of the tribunal to summon parties is narrow and limited and is
confined to cases where the summoning of the parties is necessary to make the adjudication of the dispute, as referred,
effective and enforceable. The Act does not vest any power in an industrial adjudicator to summon or implead the heirs or
the legal representatives of a deceased workman and to entertain their claims on behalf of the estate of the deceased
workman and to permit further prosecution of the proceedings. To concede such power will result in a wholesale
substitution of an ‘industrial dispute’ as referred by another dispute between the heirs of the deceased workman and the
employer which is not permissible and would be outside the purview of the Act.88

Principles governing the joinder of parties:

The test always must be: Is the addition of a party necessary to make adjudication itself effective and enforceable?
Conversely, the test may well be, would non-joinder of a party make adjudication proceedings ineffective and
unenforceable? It is in the light of this test that the implied power of the tribunal to add parties must be held to be limited.
The implied power of the tribunal to summon additional parties is confined only to cases where such addition appears to be
necessary for making a reference complete and an award effective and enforceable. Such a power would not be exercised
to extend the scope of the reference and to bring in matters which are not the subject-matter thereof, and which cannot be
incidental to the dispute which has been referred.89 Before impleading a party in a dispute, the tribunal should record a
finding that it is a necessary party to the dispute under O 1, r 10(2) of the Code of Civil Procedure 1908. For instance,
where a party who has purchased property from the vendor, ie, owner of a closed industry who is a party to the dispute in
regard to lockout declared by him, the tribunal must record a finding that the purchaser who is sought to be impleaded
must be a person held to be successor-in-interest. Without such a finding, the tribunal cannot validly implead a person as a
necessary party.90 The parties whose presence is not necessary for the adjudication of a dispute which is pending before a
tribunal, cannot be parties who can be summoned by the tribunal under the sub-section.91 In a case where two unions raise
industrial disputes and one of them settles the dispute raised by it while the other one let the matter be referred to
adjudication on account of the dispute having been settled, a single judge of the Bombay High Court held that the former
union is not a necessary party for adjudication.92 But the correctness of this view is not free from doubt.

Section 18 of the Act empowers an adjudicator to summon the parties to the dispute and all other parties to appear in the
adjudication proceedings as parties to the dispute before it. In Bhagwan Dass Chopra, the Supreme Court felt it necessary
to evolve a reasonable procedure to deal with cases in which, a devolution of interest takes place during the pendency of a
proceeding arising under the Act. The court considered it reasonable to hold that in every case of transfer, devolution,
merger, takeover or a scheme of amalgamation under which the rights and liabilities of one company or corporation stand
transferred to or devolve upon another company or corporation either under a private treaty, or a judicial order or under a
law, the transferee company or corporation as a successor-in-interest becomes subject to all the liabilities of the transferor
company or corporation and becomes entitled to all the rights of the transferor company or corporation subject to the terms
and conditions of the contract of transfer or merger, the scheme of amalgamation and the legal provisions as the case may
be under which such transfer, devolution, merger, takeover or amalgamation, as the case may be, may have taken place.
Hence, the transferee company subject to such terms becomes liable to be impleaded or becomes entitled to be impleaded
in place of or in addition to the transferor company or corporation in any action, suit or proceeding filed against the
transferor company or corporation by a third party and that whatever steps have already taken place in those proceedings
will continue to operate against and be binding on the transferee company or corporation in the same way in which they
operate against a person on whom any interest has devolved in any of the ways mentioned in O XXII, r 20 of the Code of
Civil Procedure, subject of course to any terms in the contract of transfer or merger, scheme of amalgamation or other
relevant legal provisions governing the transaction under which the transferee company or corporation has become the
successor-in-interest of the transferor company or corporation.93 Where the validity of a settlement arrived at between the
management and the union was referred for adjudication, the tribunal, while adjudicating the issue, did not bring on record
the said union which was the party to settlement, Biswas J (for self and AK Mathur CJ) of the Calcutta High Court set
aside the award of the tribunal on the ground that the award was vitiated by a jurisdictional error in so far as it did not
bring on record the Mazdoor Union which was party to the settlement.94

Procedure to Summon Parties to Appear:

The law in respect of the power of the adjudicatory authorities, viz, labour courts, tribunals or national tribunals to summon
a person other than the employer or workmen to appear as a party to the dispute, and the procedure to be followed for the
exercise of such power has been summarised by the Calcutta High Court in Anil Kumar, as follows:

(1) An industrial dispute under the Act arises between an employer and his workmen, where the employer is concerned.

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(2) Such a dispute can only be referred for adjudication by an order made by the appropriate government under the Act.
There is no express provision in the Act or the rules framed thereunder, for adding any party to the adjudication
proceedings other than parties to the reference, by the adjudicating court or tribunal.
(3) Such a power may be granted by prescribing rules and or making the relevant provision of the Code of Civil Procedure,
but so far it has not been done.
(4) From the provisions of cl (b) of sub-s (3) of s 18 of the Act, it is to be implied that the tribunal has power to summon
parties other than parties to the order of reference, to appear in the proceedings as parties to the dispute. This has a
reference to proper and necessary parties, as such parties need not necessarily belong to the category of employer or
workmen.
(5) The power to be implied from the provisions of cl (b) is to summon such a party. The form of summons has not yet been
prescribed, but under sub-s (1) of s 11, the tribunal may issue summons in its own form, and follow such procedure with
regard to it as it may think fit, until rules framed under the Act deal with such matter.
(6) Form D1 is not an appropriate form of summons for that purpose.

(7) Clause (b) of sub-s (3) of s 18 clearly contemplates that not only should there be such a summon but that the party
summoned should have an opportunity to show that he has been summoned without proper cause. Such an opportunity
be given when the party is added as a party without any notice to him, and he is compelled to join in the whole reference
proceedings.
(8) It is not necessary to add such a party at all, but it is sufficient to summon such a party to appear in the proceedings as
party to the dispute. However, after the summons has been served, or a show cause notice why such a summons should
not be served and he has an opportunity of showing cause, it would not be illegal to put him formally on the records as a
party if the tribunal thinks that it would be more convenient for the purposes of the adjudication proceedings.95

Illustrations

A company went into liquidation and its Managing Director, PG Brookes, was appointed as a receiver. The workmen’s
union applied to the tribunal to implead the receiver for the reason that he had taken possession of all the assets of the
company and further that some financial commitments were involved in the issues; therefore it was necessary to implead
the receiver. The industrial tribunal accordingly impleaded the receiver. It was held that s 18(3)(b) by necessary
implication, gives power to the tribunal to add parties.96 There was an industrial dispute between the workers of 65 textile
mills and their managements regarding compensation for involuntary unemployment caused to the workers. One of the
mills applied to the industrial tribunal to summon and implead the Government of Madras as a party to the proceedings
before it. It was held that the tribunal had sufficient authority to summon and implead the government.97 An industrial
dispute between the Delhi Cloth Mills and a few other textile mills on one hand, and their workmen on the other
represented by Kapra Ekta Union, was referred to the adjudication. A petition was made by the Textile Mazdoor Sangh to
be added as a party to the industrial dispute. The tribunal allowed the petition and impleaded the Sangh as a party. The
Punjab High Court held that the tribunal was vested with the power under s 18(3)(b) to implead such parties.98 In an
industrial dispute between Parry & Co, and their workmen, the workmen applied to the tribunal for impleading the
contractors of the employers as a party to the dispute. The tribunal accordingly impleaded the said contractors and
subsequently made an award granting certain reliefs against the said contractors. It was held that the tribunal had no
jurisdiction to give an award against the said contractors. The Government had referred one dispute, while the tribunal
decided another one. Nothing in s 18(3) can possibly be construed as authorising a tribunal to

enlarge the ambit or alter the character of a dispute referred for adjudication under section 10 of the Act.1

In CRO Canteen, an industrial dispute between workmen employed in a canteen and the canteen management was referred
for adjudication. The workmen applied to the industrial tribunal to implead the factory management as a party to the
industrial dispute, alleging that their real employer was the company, and not the canteen committee. The tribunal on
evidence on record found that the real employer was not the company and hence dismissed the application. In writ
proceeding it was held that in view of the findings arrived at by the industrial tribunal, its order rejecting the application to
implead the company as a party to the industrial dispute could not be interfered with. However, liberty was given to the
petitioner for making a second application for impleading the company as a respondent on any ground other than that the
company is the real employer of the concerned workmen.2 The demand for amendment of the Provident Fund Rules was
referred for adjudication. The provident fund vested in the trustees under the Rules of the Provident Fund Scheme. Held,
the trustees of Provident Fund in the circumstances could be summoned to appear as parties to such disputes.3 An
industrial dispute in regard to a claim for bonus between workmen and an employer ‘X’ was referred for adjudication.

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Employer ‘X’ contended that ‘B’ is the real employer and that under the terms of the contract, the latter is liable to meet
the claim of bonus by the concerned employees. Held, the employer ‘B’ in the circumstances could not be impleaded as a
party to the pending dispute. Such questions are not incidental to the main dispute referred for adjudication.4

An industrial dispute in regard to various service conditions between the workmen and management of an electric supply
undertaking was referred for adjudication. Pending such reference, the licence of the company to manufacture and supply
energy was revoked by the State Government, and the properties and assets of the company were sold to the State
Electricity Board, under an agreement, inter alia, providing for sale of a substantial portion of the machinery of the
undertaking to the Board. The Board further had option to take such of the orders and contracts of the company as selected
by it. But the Board was not liable to fulfil contracts or obligations of the company in respect of supply of energy. The
assets of the undertaking were sold free from all incumbrances. Sale and purchase prices were determined in accordance
with the provisions of the Indian Electricity Act 1910. The Board was not under any obligation to meet the claims of the
employees of the company, or to take over or employ any employee of the company. On revocation of its licence, the
company terminated the services of all the employees paying them retrenchment compensation under s 25 FF of the
Industrial Disputes Act. It was held that in the circumstances, the Board could not be considered as a successor-in-interest
of the company, even though there was continuity and identity of the company. The Board in the circumstances was not
considered necessary or proper party, even though there were continuity and identity of the company. The order of the
industrial tribunal impleading the Board as a party to the adjudication proceedings pending between the concerned
employees and the company was quashed by a writ of certiorari.5

In Udaipur Phosphates, a few employees were retrenched by the transferor-employer. In the subsequent transfer of the
undertaking, the transferee-employer signed a ‘Memo of Understanding’ agreeing to employ the existing employees of the
transferor-employer. A single judge of the Gujarat High Court held that the tribunal would be justified in adding the
transferee-employer as a party to the proceedings, only after it comes to the conclusion that the retrenchment effected by
the transferor-employer prior to the transfer of undertaking was invalid.6 Where, in a dispute between a contract worker
and the contractor running a canteen in HMT factory, the Government impleaded the company as a party to the dispute, by
a subsequent order and on the request made by the worker, it was held that the state government had no authority or power
to implead another party on the request of one of the parties to the dispute, more so, in the face of a direction issued by the
Division Bench to the tribunal to decide the dispute between the two parties according to the original order of reference.7 If
the labour court considers that the presence of a party is necessary for the effective adjudication and enforcement of the
award, it has implied power to add or admit a party to the industrial dispute. Where the promotion of a few employees was
challenged by certain others through a civil suit and, during its pendency, by raising simultaneously an industrial dispute,
the application of the first category of employees (who were promoted) seeking to be impleaded as necessary parties
cannot be refused by the labour court in the interests of effective adjudication of the dispute.8 But such power cannot be
exercised by the tribunal to enlarge the scope of reference.9

The management of the company is not a relevant or necessary party to the dispute relating to the termination of the
service of a workman employed by the cooperative society running the industrial canteen, as the workman was neither
appointed nor terminated by the management.10 Where the labour court directed the Chairman-cum-Managing Director to
be impleaded as a party in a dispute where the management contended that there was no employer-employee relationship
between the company and the workman whose services were terminated and that he was in the personal employment of the
Chairman-cum-Managing Director, the High Court quashed the direction of the labour court holding that the said direction
virtually amounts to amending the terms of reference. The High Court further held that the onus of proving that the
workman was not the employee of the company lies on the management.11In a case where the labour court passed an order
under s 33C(2) against the Bay of Bengal Programme of United Nations, which enjoyed legal immunity under the United
Nations (Privileges and Immunities) Act 1947, the High Court held that it is the Government which is answerable to such a
claim against the organisation and accordingly ordered that the Central Government stood impleaded as the opposite party
in the proceedings before labour court12

Extended Operation of Settlements:

The whole policy of s 18 appears to be to give an extended operation to settlements arrived at ‘in the course of conciliation
proceedings’, and that is the object with which four categories of workmen on whom such settlements are binding are
specified in s 18(3) of the Act.13It is manifest that cll (a) and (b) have been given extended meaning by the introduction of
cll (c) and (d) to s 18(3) of the Act.14

Heirs, successors or assigns:

Sub-clause (c) makes a settlement arrived at in the course of conciliation proceedings, and the awards binding on the
‘heirs, successors or assigns’ of the employer in respect of the establishments to which the dispute relates, whether or not
they were summoned to appear before the tribunal as parties to the dispute. But a settlement or an award will not bind the

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heirs, successors or assigns of an employer if at the time of the settlement reference or the award, they were minors.15 This
provision has been enacted with a view to checkmate the devices to avoid the liability under settlements and awards by
transfer of establishments. In Anakapalle CAIS, a company manufacturing sugar which was running at a loss was
contemplating to shift its mills to another locality. The local cane-growers formed a co-operative society and purchased the
machinery and the business of the company. The company agreed to pay statutory compensation to its employees. The
society did not purchase the goodwill of the company nor its outstandings and liabilities. The dispute with respect to 49
permanent employees and 103 seasonal employees who were not absorbed into the service of the co-operative society, was
referred to an industrial tribunal for adjudication. On a preliminary objection being raised, the tribunal held that the society
was a ‘successor-in-interest’ of the company, and gave the relief of re-employment to the concerned employees. In appeal,
the Supreme Court discussed various aspects of the question. Then after enumerating a number of factors to be taken into
consideration for deciding the question whether one party is the successor-in-interest of another, the court observed that
‘the decision of the question must ultimately depend upon the evaluation of all the relevant factors and it cannot be reached
by treating anyone of them as of overriding or conclusive significance.16 In Brahmaputra Tea, the official liquidator
conveyed, by a registered sale deed, the equity of redemption in three tea gardens to a purchaser along with certain other
items of machinery. The sale by the official liquidator, acting on behalf of the tea company, was specifically of the equity
of redemption owned by the company and was subject to the mortgage decree and other liabilities payable up to the date of
sale. In view of the facts and circumstances of the case and the recitals in the sale deed, following the tests laid down in
Anakapalle case, the court held that the purchaser could not be said to be the successor-in-interest of the tea company
because what was purchased by him was only the equity of redemption and part of the assets of the tea company in respect
of which the official liquidator was still functioning.17

Factors to be considered for treating Transferee as Successor-in-interest:

This provision imposes liabilities of an award not only on an employer in the industrial dispute but also his heirs and
successors or assignees. To enforce this liability against a transferee, he must be a successor-in-interest. A person can be
called a successor-in-interest only if the prior business is taken over as a going concern with all its assets and liabilities.
Therefore, before impleading a party, the tribunal should record a finding that the person proposed to be impleaded is
successor-in-interest of the employer, and without such finding, the tribunal cannot implead a person as a necessary party
to the dispute. A person can be called a successor-in-interest only if the prior business is taken over as a going concern
with all its assets and liabilities. But where the entire business is not taken over, only land and buildings are purchased for
starting altogether a new business and the plant and machinery is left to the vendor’s disposal, the purchaser cannot be
considered a successor or assignee of the old business.18 In Anakapalle CAIS (supra), the Supreme Court has stated the
following illustrative tests:

(i) Did the purchaser purchase the whole of the business?

(ii) Was the business purchased as a going concern at the time of the sale transaction?

(iii) Is the business purchased carried on at the same place as before?

(iv) Is the business carried on without a substantial break in time?

(v) Is the business carried on by the purchaser the same or similar to the business in the hands of the vendor?

(vi) If there has been a break in the continuity of the business, what is the nature of the break and what were the reasons
responsible for it?
(vii)What is the length of the break?
(viii) Has goodwill been purchased?

(ix) Is the purchase only of some parts and the purchaser having purchased the said parts, purchased some other new parts and
started a business of his own which is not the same as the old business but is similar to it?

But these tests are merely illustrative and by no means exhaustive or exclusive of one other. For applying these tests to a
particular case, the following observations of the court provide the guidelines:

These and all other relevant factors have to be borne in mind in deciding the question as to whether the purchaser can be said to be
a successor-in-interest of the vendor for the purpose of industrial adjudication. It is hardly necessary to emphasise in this
connection that though all the facts to which we have referred by way of illustration are relevant, it would be unreasonable to
exaggerate the importance of anyone of these facts or to adopt the inflexible rule that the presence or absence of anyone of them is
decisive of the matter one way or the other. If industrial adjudication were to insist that a purchaser must purchase the whole of the

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property of the vendor concern before he can be regarded as a successor-in-interest, it is quite likely that just an insignificant
portion of the property may not be the subject-matter of the conveyance and it may be urged that the exclusion of the said fraction
precludes industrial adjudication from treating the purchaser as a successor-in-interest. Such a plea, however, cannot be entertained
for the simple reason that in deciding this question, industrial adjudication will look at the substance of the matter and not be
guided solely by the form of the transfer. What we have said about the entirety of the property belonging to the vendor concern,
will apply also to the good-will which is an intangible asset of any industrial concern. If good-will along with the rest of the
tangible property has been sold, that would strongly support the plea that the purchaser is a successor-in-interest, but it does not
follow that if good-will has not been sold, that alone will necessarily show that the transferee is not a successor-in-interest. The
decision of the question must ultimately depend upon the evaluation of all the relevant factors and it cannot be reached by treating
anyone of them as of overriding or conclusive significance.19

Establishment to which the Dispute Relates:

The words ‘establishment to which the dispute relates’ have been significantly used in cll (c) and (d). This indicates that
the settlements or awards mentioned in this sub-section would bind the employer under cl (c) only with respect to the
establishment to which the industrial dispute under reference relates. An illustration of this is to be found in the decision of
the Supreme Court in Indian Oxygen.20 In AEI, the Calcutta High Court held that, from the use of the expression
‘establishment’ in s 18(3)(c), it is fairly clear that the establishment must exist in some definite or indefinite form. As a
result of taking over of various establishments of insurance companies doing the life insurance business, the establishment
run by the Life Insurance Corporation is a unified establishment, and the old establishments have not retained their
identity. Consequent upon such merger of the various establishments, it is not possible to say that any old establishment as
such has continued. In this view of the law, the awards and settlements which governed the employers and employees in
relation to various insurance companies, before the establishments were taken over by the Life Insurance Corporation,
were held to have ceased to bind the Life Insurance Corporation under s 18(3) of the Act.21 In Arunachalam, a purchaser
who purchased only four buses along with the route permits from a motor service company, was held not to be a successor-
in-interest of the previous owner, because it did not purchase the entire business of the previous operator whose identity
had been extinguished by selling his business to several purchasers.22

Practice and Procedure:

For the application of s 18(3)(c) of the Act, it is necessary that, if the award is sought to be enforced against a person who
is not a party to the award, such person must be either an heir, successor or an assignee of the establishment to which the
dispute relates. In the absence of evidence to show that the parties against whom certain sums are directed to be recovered
under a certificate issued under s 33C(1) were heirs, successors or assignees of the employer, the certificate issued by such
authority would be bad in law.23

Binding on Present and Future Workmen:

This clause appears to have been designed to meet some difficulties implicit in the collective bargaining with a floating
army of workmen, a few of whom may not choose to be the members of any union and, one or more unions may, for
reasons of their own, not like to reach a settlement. Legislature contemplates making such settlement binding, even on
such indifferent or unwilling workmen, if the conciliation officer brings it about bona fide to ensure industrial peace.24
From the language of this clause, it is clear that where a party referred to in cl (a) or cl (b) is composed of workmen, all
persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute
relates, on the date of the dispute, and all persons who subsequently become employed in that establishment or part
thereof, would be bound by the settlement or the award. In order to bind the workmen, it is not necessary to show that the
said workmen belong to the union which was a party to the dispute before the conciliator. The whole policy of s 18 appears
to be to give an extended operation to an award and a ‘settlement arrived at in the course of conciliation proceedings or
adjudication proceedings’, and that is the object with which the four categories of persons bound by such awards and
settlements are specified.25 The expression ‘any party bound by the award’ in s 19(6) refers to and includes all persons
bound by any award under this section.26 There is a significant difference between the provisions of cl (c) and cl (d).
Clause (c) contemplates that a settlement or an award shall be binding not only upon the employer, but also upon his heirs,
successors or assignees in respect of the establishment to which the dispute relates. But no reference to the heirs,
successors or assigns of a workman is to be found in cl (d). Evidently, it was not the intention of the legislature to provide
for adjudication of an industrial dispute at the instance of heirs or legal representatives of a deceased workman. No duty,
therefore, is cast on the tribunal to bring on record, the heirs or legal representatives of a deceased workman.27

In Anthony Gomes, conciliation proceedings were initiated in connection with a dispute relating to the dismissal of the
workman. But subsequently, a settlement was arrived at between the union and the management, relating to certain

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disputes including the dispute relating to the dismissal of the workman despite the fact that he had ceased to be a member
of the union at that time. In terms of the said settlement, the employment of the workman ceased with effect from a
particular date and he was to be given ex gratia amount equivalent to 40 per cent of his basic wages and dearness
allowance for the period of two months together with one month’s wages inclusive of dearness allowance as an additional
ex-gratia payment and the provident fund dues of the workman were to be paid in accordance with the company’s rules.
Accordingly, the company discharged the workman from service in terms of the settlement. A single judge of the High
Court held that the discharge of the workman being by a settlement in the course of conciliation proceedings was binding
on him.28 This holding does not appear to be correct law. Since, the workman raised a dispute on his own under s 2A
without involving the union, it was not open to the union to club the said dispute with other disputes which were admitted
in conciliation and which nullified the conciliation proceedings initiated into the dispute raised by the workman under s
2A. In Andhra Bank Offices Union, the AP High Court held that, in order to be binding, a settlement should essentially be
between the employer and the workmen. In other words, a settlement between the employer and non-workmen or a union
not representing the workmen will not be binding on the parties.29 In Punjab National Bank, the facts were: a reference
was made by the Government in the following terms:

Whether the demand of the Commission Agents or as the case may be Deposit Collectors employed in the banks listed in
Annexure that they are entitled to the pay scale and other service conditions admissible to regular clerical employees of these banks
is justified? If not to what relief the workers concerned entitled to and from which date?

Several banks including the Indian Banks Association (IBA) were impleaded in the said reference. The tribunal passed an
award on 22 December 1988, in which it opined that the deposit collectors were ‘workmen’ and as such the reference was
maintainable. The tribunal, in its award, directed absorption of eligible deposit collectors, who are less than 45 years of age
as on 3 October 1980, if otherwise eligible, and, to others, extension of benefits as conferred by the Award, i.e., full back
wage of Rs. 750/- linked to minimum deposit of Rs. 7500/ p.m., (ii) Incentive remuneration @ 2% for deposit collected
above Rs. 7500/ p.m., (iii) Conveyance allowance of Rs. 50/ p.m. for deposit collected less than Rs. 10,000/ and Rs. 100/
p.m. for deposit collected over Rs. 10,000/ p.m., and (iv) Gratuity equal to 15 days commission for each year of service
rendered. In the writ petition filed by the Banks against the award, the High Court had set aside that part of the award
which directed absorption of the Deposit Collectors, while upholding the other part thereof. Appeals to Supreme Court
soon followed both from the Banks and the workmen on different grounds including (i) non-maintainability of the award,
(ii) not being given individual notice to the employees, and (iii) the binding nature of the award on the workmen who were
not put on individual notice. Rejecting the contention of respondent-workman that he was not bound by the award, Sinha J
(for self and Bhandari J) observed:

From a perusal of clause (d) of sub section (3) of Section 18 of the Industrial Disputes Act, it is, thus, evident that all workmen
who are employed in the establishment or who subsequently become employed in that establishment would also be bound by an
award made by an industrial Tribunal. The management as also the workmen were parties to the said award. Hence, respondents
cannot be heard to say that the award was not binding on them only because they were not parties.. .. In an industrial dispute
referred to by the Central Government which has an all India implication, individual workman cannot be made parties to a
reference. All of them are not expected to be heard. The Unions representing them were impleaded as parties. They were heard.
Not only the said Unions were heard before the High Court, as noticed hereinbefore from a part of the judgment of the High Court,
they had preferred appeals before this court. Their contentions had been noticed by this Court. As the award was made in presence
of the Unions, in our opinion, the contention of respondents that the award was not binding on them cannot be accepted. The
principles of natural justice were also not required to be complied with as the same would have been an empty formality. The
Court will not insist on compliance of the principles of natural justice in view of the binding nature of the award. Its application
would be limited to a situation where the factual position or legal implication arising thereunder is disputed and not where it is not
in dispute or cannot be disputed. If only one conclusion is possible, a writ would not issue only because there was a violation of the
principle of natural justice.30

Settlement which runs counter to the statutory provisions:

In Oswal Agro, the facts disclosed that, after filing an application for permission under s 25-O, the company entered into a
settlement with the workmen, which was challenged by the workmen in the High Court successfully. Dismissing the
appeal filed by the management, Sinha J (for self and Hegde J) observed:

A settlement within the meaning of Section 2(p) read with sub- section (3) of Section 18 of the Act undoubtedly binds the
workmen but the question which would arise is, would it mean that thereby the provisions contained in Sections 25-N and 25 -0 are
not required to be complied with? The answer to the said question must be rendered in the negative. A settlement can be arrived at

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between the employer and workmen in case of an industrial dispute. An industrial dispute may arise as regard the validity of a
retrenchment or closure or otherwise. Such a settlement however, as regard retrenchment or closure can be arrived at provided such
retrenchment or closure has been effected in accordance with law. Requirements of issuance of a notice in terms of Sections 25-N
and 25 -0, as the case may, and/or a decision thereupon by the appropriate Government are clearly suggestive of the fact that
thereby a publicpolicy has been laid down. The State Government before granting or refusing such permission is not only required
to comply with the principles of natural justice by giving an opportunity of hearing both to the employer and the workmen but also
is required to assign reasons in support thereof and is also required to pass an order having regard to the several factors laid down
therein. One of the factors besides others which is required to be taken into consideration by the appropriate Government before
grant or refusal of such permission is the interest of the workmen. The aforementioned provisions being imperative in character
would prevail over the right of the parties to arrive at a settlement. Such a settlement must conform to the statutory conditions
laying down a public policy. A contract which may otherwise be valid, however, must satisfy the tests of public policy not only in
terms of the aforementioned provisions but also in terms of Section 23 of the Indian Contract Act.. .. Indisputably, in this case, the
industrial undertaking belonging to the appellant herein attracts the provisions of Chapter V-B of the Act and consequently the
provisions referred to in Section 2(s) including Section 25-J shall apply in relation thereto.31 (Paras 15 & 19).

Different Unions concerned with Conciliation Proceedings:

Occasionally peculiar situations arise in the process of settlement of industrial disputes on account of trade union rivalries.
The same establishment may have more than one union. Sometimes, each one of such unions may enter into negotiations
with the employer with respect to certain or some demands of the workmen and likewise, each one of such unions may go
before the conciliator for conciliation of the demands. It also happens that the negotiations with one of the unions in the
course of conciliation proceedings may succeed and end in a settlement whereas there may be no settlement with the other
unions. The question naturally will arise whether such a settlement will bind the other unions, and the workmen in general
in terms of s 18(1)(d). In Ramna