Workmen of Shri Rangavilas Motors (P)
Ltd. & ANR Vs. Shri Rangavilas Motors (P) Ltd. & Ors  INSC 27 (1
01/02/1967 SIKRI, S.M.
CITATION: 1967 AIR 1040 1967 SCR (2) 528
Industrial Disputes Act (14 of 1947), s.
10(1) (c) and (d) proviso (1) "Affected", if means
"interested"--Order of reference--Whether should state why reference
was made to Labour Court-"Appropriate Government," test for deciding.
The second appellant was a workman in the
workshop of the first respondent dent company any in its Bangalore branch in
the Mysore State. The head,office of the Company at Krishnagiri, in the Madras
State, transferred him to Krishnagiri, contrary to the agreement that he would not
be transferred .from Bangalore for ten years. On the workman raising
objections, the Company removed him from service.
The Krishnagiri Motor Workers' Union, a
majority of whose members numbering more than one hundred were employees of the
Company, took up the workman's grievance, and the Government of Mysore referred
the industrial dispute to the Labour Court under s. 10(1) (c) of the Industrial
Disputes Act, 1947. One of the questions referred was : whether the order of
transfer was illegal and if so" Whether the workman was entitled to
"reinstatement in the Bangalore branch with benefits of back wages".
The Labour Court ordered the reinstatement of the workman in the Bangalore
branch. The Company challenged the award by a writ petition in the High Court.
The High Court while holding that the Mysore Government was the appropriate
Government to make the reference, quashed the award on the grounds : (1) that
the legality of the removal of the workman was not the -subject matter of
reference, and (2) that the reference to the Labour Court could not be
justified under s. 10(1)(c), because the dispute fell within the Third and not
the Second Schedule to the Act; nor under the first proviso to s. 10(1)(d),
because, the Government did not act under -that proviso, and because, more than
one hundred persons were interested in and therefore likely to be affected by
In appeal to this Court, the Company sought
to support the judgment of the High Court also on the ground that the Mysore
-Government was not the appropriate Government to make the reference.
HELD : (1) The legality of the termination of
the service of the workman wag included in the order of reference. [532 D- E]
The words "with benefit of back wages" coupled with the word
"reinstatement" are appropriate only to a case of removal.
On the facts of the case, the transfer of the
workman was illegal and so, his removal from service should be set aside and be
should be reinstated with benefits of 'back wages.
[532 F-G] (2) The reference to the Labour
Court was valid under the first proviso to s. 10(1) (d). [533 H] (a) High Court
misinterpreted the proviso by equating the two ,words interested and affected.
The members of the Union which sponsored the cause of the workman were
interested in the dispute, but they would not necessarily be affected by the
dispute. [533 F-G] 529 (b) It is not necessary that the order of reference
should expressly state that it was because of the proviso that the reference
was being made to the Labour Court. If it could be justified on the facts,
there is nothing in the Act which makes such a reference invalid. [533 E-F] (3)
The Mysore Government was the -appropriate Government to make the reference,
because, the subject matter of the, dispute substantially arose within the
jurisdiction of the Mysore Government. [534 H] The proper question to raise is
: where did the dispute arise and not where was the dispute sponsored : that
is, whether there is a nexus between the dispute and the territory of the State
making the reference. Ordinarily if there is a separate establishment and the
workman is working in that establishment, the dispute would arise at that
place. [534 A-E] Indian Cable Co. Ltd. v. Its Workmen,  Supp. 3 S.C.R.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 1065 of 1965.
Appeal by special leave from the judgment and
order dated February 27, 1963 of the Mysore High Court in Writ Petition No.
1096 of 1961.
M. K. Ramamurthi, for the appellants.
O. P. Malhotra, P. C. Bhathari and O. C.
Mathur, for respondent No. 1.
The Judgment of the Court was delivered by
Sikri, J. This appeal by special leave is directed against the judgment of the
Mysore High Court in Writ Petition No. 1096 of 1961 by which the High Court
allowed the Writ Petition and quashed the impugned award dated June 30, 1961,
made by the Labour Court, Bangalore, in Reference No. 51 of 1960. In order to
appreciate the points raised before us it is necessary to give the relevant
The second appellant before us, R.
Mahalingam, was engaged as a Foreman in the workshop of Sri Rangavilas Motors
(P) Ltd., the first respondent, hereinafter referred to as the Company, in the
month of April, 1956. By an order dated January 21, 1960, Mahalingam was
transferred from Bangalore to Krishnagiri where the head office of the Company
is situated. Mahalingam entered into correspondence with the Company alleging
that according to the conditions of his employment he could not be transferred
from Bangalore to Krishnagiri. Ultimately, the Company framed charges against
Mahalingam and removed him from service by an order dated April 7, 1960. On
April 8, 1960, Mahalingam complained in writing to the Assistant Commissioner
of Labour who was functioning as the Conciliation Officer at Bangalore. Later
on, one Selvaraj took part in the conciliation proceedings on the authority of
the resolution dated July 21, 1960, passed at the General Body 530 meeting of
Krishnagiri Motor Workers' Union, among whose members 112 out of 170 were
employees of the Company.
Selvaraj filed a statement of claims before
the Conciliation Officer on September 1, 1960. The -Conciliation Officer
reported to the Government that the conciliation proceedings had failed, and
thereupon the State Government by its order dated November 1, 1960, made in
exercise of the powers conferred by cl. (c) of sub-s. (1) of s. 10 of the
Industrial Disputes Act, 1947 (XIV of 1947)-hereinafter referred to as the
Act-referred for adjudication by the Labour Court, Bangalore, the following
points in dispute :- " 1. Whether the order of the management of Sri
Rangavilas Motor (Private) Ltd., in transferring the workman Sri It.
Mahalingam, Foreman, from their branch at Fort, Bangalore, to Krishnagiri, is
illegal or unjustified. If so, is the workman entitled to reinstatement in
Bangalore Branch with benefits of back wages or to any other relief ?
2. Is Sri R. Mahalingam, Foreman, entitled to
arrears of increments and overtime wages, if so, what is the amount he is
entitled to ? Selvaraj, inter alia, prayed in his statement of claims, filed on
behalf of Mahalingam, as follows "...it is prayed that the Hon'ble Court
may be pleased to direct the second party (the Company) to cause the payment of
overtime wages due, increments due (as mentioned in the annexure to this
statement) as also the arrears of wages from 1-2-60 to 15-3-1960 and order
payment of back wages with effect from the date of termination of service by
setting aside the said order of termination and to reinstate the workman with
continuity of service." The Company, in reply, contended that the
reference was limited only to the question of transfer, and hence no question
of reinstatement or back wages could be adjudicated upon. Further, the Company
contended that the reference was bad because it did not fall under any of the
items enumerated in the Second Schedule to the -Act. It was also contended that
the dispute was an individual dispute. One further objection was raised to the
effect that the reference should have been made to the National Tribunal and
not to the Labour Court The Labour Court overruled all the objections regarding
jurisdiction raised by the Company and made the award holding that both the
transfer as well as the removal from service of Mahalingam were illegal and
that he Was entitled to overtime wages as well as 531 increments. The Labour
Court made the following further direction: - "The workman Sri Mahalingam
should be reinstated in ore branch with full back wages in continuity of the
past service and with same emoluments. The second party should also pay the
arrears of Rs. 4629/27 towards the overtime wages and as well as the increments
due.Rs. 384". (sic.) As stated above, the Company filed writ petition
challenging the award. The High Court formulated the points which arose out of
the arguments addressed before it thus:-
1. Whether the dispute referred by the State
Government to the Labour Court is an industrial dispute ?
2. If it is such a dispute- (a) Whether the
State Government of Mysore was not the appropriate Government to make the
reference ? and (b) Whether the reference should have been made by the Central
Government to a National Tribunal
3. Whether any dispute relating to the
termination of the service of the fourth respondent is included in the order of
4. Whether the points of dispute actually
referred fall within the scope of the items enumerated in the second Schedule
of the Industrial Disputes Act and are therefore within the competence of the
Labour Court ?
5. Whether on the question of transfer there
was any dispute at all for adjudication On the first point the High Court,
agreeing with the Labour Court, held that on the facts what was originally an
individual grievance of Mahalingam did assume at the time the reference was
made by the Government the character of an industrial dispute.
On the first part of the second point, the
High Court held that the State Government of Mysore was the appropriate
Government to make the reference. On the second par' it held that it was for
the Central Government to decide to refer or not to refer the dispute but the
State Government which is the appropriate Government in relation to the dispute
does not lose its power of -making 'a reference.
On the third point the High Court held that
the question of legality or otherwise of the Company's action in removing Mahalingam
from service was not the subject-matter of reference to the M2 Sup. CI/67-5 532
Labour Court and its award to the extent it dealt with that topic was without
On the fourth point, the-High Court held that
the first proviso to cl.'(d) to s. 10 (1) of the Act did not apply and that the
dispute relating to increments and overtime wages was beyond the jurisdiction
of the Labour 'Court and could not have been validly referred to it. It also
held that the dispute regarding transfer was included in the expression
"rules of discipline" enumerated as item 8 of the Third Schedule, and
was therefore pot within the, competence of the Labour Court to adjudicate upon
in view of these findings the Award was quashed. Regarding point No. 5 formulated
by it, the High Court observed that it was. unnecessary to examine that point,
but as the matter had been, argued at some length, the High Court stated its
opinion thereon. In its opinion, there was no scope far making the order of
transfer the subject-matter of any dispute.
The same points that were formulated by the
High Court were-. argued before us. Mr. Ramamurti, appearing on behalf of the
appellants, urged regarding point No. 3 that on its true interpretation the
order of reference was quite clear and that the question of termination of
services of Mahalingam was included in the order of reference. We have already
reproduced the order of reference and, in our opinion, there is force in what
Mr. Ramamurti urges It seems to us that the order of reference is quite clear
if regard is: had to the words "reinstatement in Bangalore branch with
benefits of back wages." If the words with benefits of back wages"
considered,and with respect,the High Court did not consider them, the High
Court's conclusion might possibly be justified. It seems to us that by the time
the reference tame to be made everybody knew that Mahalingam had been removed
from service. The words "with benefits of back wages" coupled with
the word "reinstatement" are appropriate only to a case of removal
and not to a case of transfer. On the facts of this case it is quite clear that
the contention of Mahalingam was that the transfer was illegal and if the
transfer as illegal, his removal from service would fall automatically with the
finding that the transfer was illegal, and one of the appropriate reliefs that
would be given would be reinstatement in the Bangalore Branch with benefits of
back wales. In our view it is because of the above considerations that the word
"removal" was not expressly mentioned. In this connection the High
Court relied on the provisions of s. 10(4) of the Act which reads as under
"10(4) Where in an order referring an industrial dispute to 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, the Labour Court or the Tribunal or the National 533 Tribunal, as
the case may be, shall confine its adjudication to those points and matters
inidental thereto." We are unable to appreciate how this sub-section has
any re- levance to the question of construction of the order of reference made
by the Government. It is true that he points in dispute must be specified, but
the point with which we are concerned is, whether as a matter of construction
the point in dispute has been specified or not, and according to us the dispute
regarding removal has been specified.
Regarding the fourth point, with respect, the
High Court misinterpreted the first proviso to cl. (d) to s."10(1).
This proviso reads as follows "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) The High Court negative the, plea of Mahalingam on two grounds:
First that there is nothing either -in the order of reference. or in any, other
material placed before it to indicate that the Government have applied their mind
to the applicability of the proviso to the facts of this case or have actually
acted pursuant to the proviso in making the references to the Labour Court and
secondly, that there can be no doubt that more than one hundred. per sons are
interested in, and are therefore likely to be affected by the dispute in
question. In our view 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. The second
reason given by the High Court, with respect is erroneous because it seems to
have equated, the words "interested' and ",affected". It would
be noticed that s. 10(1A) uses both the words "interested" or
"affected". Section 10(5) also uses both the words
"interested" or "affected". It seems to us that there is a
difference in the import of the words " interested" or,
"affected". 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. The dispute in this case was
regarding the validity of the transfer and consequent removal of the appellant.
The other workmen would naturally be interested in the dispute but they are not
affected by this dispute. In our opinion, the High Court erred in holding that
the first proviso to s. 10(1)(d) did not apply to the facts of this case. In
view of our decision on this point, it is not necessary to go into the question
whether the points in dispute fell within the second or the third Schedule to
534 Therefore, the appeal must succeed unless
the Company can satisfy us that the points decided against it should have been
decided in its favour. This takes us to the other points. Mr. O. P. Malhotra
strongly urges that the State Government of Mysore was not the appropriate
Government to make the reference. He .says that although the dispute started at
Bangalore, the resolution sponsoring this dispute was passed in Krishnagiri,
and,, that- the proper test to be applied in the case of individual disputes is
where the dispute has been sponsored. It seems to us that on the facts of this
case it is clear that there was a separate establishment at 'Bangalore and
Mahalingam was working there. There were a number of other workmen working in
this place. The order of transfer, it is true, was made in Krishnagiri at the
head office, but the order was to operate on a workman working in Bangalore. In
our view the High Court was right in holding that the proper question to raise
is : 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. As the High Court observed, there should 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. This Court in- Indian Cable Co. Ltd. v. Its Workmen(1)
held as follows:
"The Act contained no provisions bearing
on this question, which must, consequently, be decided on the principles
governing the jurisdiction of Courts to entertain actions or proceedings.
Dealing with a similar question under the provisions of the Bombay Industrial
Relations Act, 1946, Chagla, C. J., observed in Lalbhai Tricumlal Mills Ltd. v.
Vin and Others  1 L.L.J. 557, 558 'But What we are concerned with to
where did the dispute substantially arise ?
Now, the Act does not deal with the cause of action, nor does it indicate what
factors will confer jurisdiction upon the labour court.
But applying the well-known tests of
jurisdiction, a Court, or Tribunal would have jurisdiction if the parties
reside within jurisdiction or if the -subject-matter of the dispute
substantially arises within jurisdiction.' In our opinion, those principles are
applicable for deciding which of the States has jurisdiction to make a reference
under s. 10 of the Act".
Applying the above principles to the facts of
this case it is quite. -clear that the subject-matter of the dispute in this
case substantially -arose within the jurisdiction of the Mysore Government.
(1)  Supp. 3 S.C.R. 589 :  1
535 Mr. Malhotra further urges that the High
Court erred in holding that it was an industrial dispute. We see no force in
this contention. The High Court rightly observed that once the findings of fact
recorded by the Labour; Court are accepted, there is no doubt in law that in
the circumstances of this case, what was originally an individual grievance of
Mahalingam did assume, at the time the reference was made by the Government,
the character of an industrial dispute.
Mr. Malhotra urges that the finding of the
Labour Court that the transfer was illegal was perverse. It is not necessary to
go into this question because once it is held that there is an agreement
between the Company and Mahalingam that he could not be transferred from
Bangalore, the transfer would be bad. The Labour Court had observed that one of
the terms of agreement was that the Company had agreed not to transfer
Mahalingam to any place out of Bangalore, for a period of ten years; the
Company had transferred Mahalingam from Bangalore to the head office at
Krishnagiri and this action of the Company was in contravention of the terms of
Then Mr. Malhotra tried to urge the fifth
point formulated by the High Court. This point was not taken before the Labour
Court and we did not allow him to raise this point.' In the result the appeal
is allowed, judgment of the High Court set aside and the Award of the Labour
The appellant will have his costs here and in
the High Court.