Niemla Textile Finishing. Mills Ltd. Vs.
The 2nd Punjab Industrial Tribunal [1957] INSC 1 (10 January 1957)
BHAGWATI, NATWARLAL H.
DAS, SUDHI RANJAN (CJ) AIYYAR, T.L.
VENKATARAMA SINHA, BHUVNESHWAR P.
DAS, S.K.
CITATION: 1957 AIR 329 1957 SCR 335
ACT:
Industrial Disputes Act, 1947 (XIV Of 1947)-Constitutional
validity Legislative competency-Powers of Industrial TribunalsWhether
Legislative-The Government of India Act, 1935 (25 & 26 Geo. 5, Ch. 42),
Sch. VII, List III, Entries 27, 29-Constitution of India, Arts. 14, 19 (1) (f)
and (g).
HEADNOTE:
The disputes between the appellants and their
workmen were referred to the Industrial Tribunal for adjudication by the
appropriate Government, under the provisions of the Industrial Disputes Act,
1947. It was contended for the appellants that the reference to the Tribunal
was bad because (1) the Act was ultra vires the Constitution inasmuch as its
provisions are ,Violative of the fundamental rights enshrined in Art. 14 and
Art. 19 (1) (f) and (g) of the Constitution, (2) the Industrial Tribunals are
legislating in the guise of adjudication,, and this amounts to delegation of
the powers of legislation which it was not competent to the Central Legislature
to do so, and (3) the definition of the term " industry'.. comprises
industrial as well as non-industrial concerns and, therefore, the Act was not
within the legislative competence of the Central Legislature under Entry 29 of
List III of the SeventhSchedule to the Government of India Act, 1935.
Held: (1) The Industrial Disputes Act, 1947,
is not unconstitutional and the provisions of the Act do not contravene Arts.
14 and 19 (1) (f) and (g) of the Constitution.
The basic idea underlying all the provisions
of the Act is the settlement of industrial disputes and the promotion of
industrial peace so that production may not be interrupted and the community in
general may be benefited, and the appropriate Government has, therefore, a
discretion in the matter of making the reference to one or other of the
Authorities under the Act and also in the matter of carrying out the, various
provisions of the Act, including the curtailment or extension of the period 'of
136 preparation of the award of the Tribunal, having regard to the. exigencies
of the situation and the objects to be achieved.
(2) Industrial Tribunals while settling
particular industrial disputes referred to them, lay down certain general
principles to be observed in regard to the determination of bonus,
reinstatement of dismissed or discharged employee,% and other allied topics
mainly with the object of promoting industrial peace, but these principles or
rules of conduct, though they are applied as precedents by the Industrial
Tribunals while adjudicating upon other similar industrial disputes referred to
them, are not rules of law and do not amount to legislation.
(3) The Act is not ultra vires the
legislature, as the matters included within the definition of the term "
industry " are within the legislative competence of the Central
Legislature under Entries 27 and 29 of List III of the Seventh Schedule to the
Government of India Act, 1935.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 333-335 of 1955 and Petitions Nos. 65, 182 and 203 of 1956.
Appeals by special leave from the judgment
and order dated April 15, 1955, of the Punjab High Court at Chandigarh in Civil
Writs Nos. 131-133 of 1955 and Petitions under Article 32 of the Constitution
of India for the enforcement of fundamental rights.
Veda Vyasa, Bhagirath Das and M. L. Kapur for
the appellants.
Veda Vyasa, S. K. Kapur and N. H. Hingorani,
forthe petitioners in Petitions Nos. 65 and 182 of 195.5.
Veda Vyasa, Bhagirath Das and B. P.
Maheshwari, for the petitioner in Petition No. 203 of 1956.
S. M. Sikri, Advocate-General of Punjab,
Jindra Lal and T.
M. Sen, for respondent No. 2 in the Appeals
and respondents Nos. 1 and 2 in the Petitions.
Sadhan Chandra Gupta, Bawa Shiv Charan Singh
and Janardhan Sharma, for respondent No. 3 in the appeals and in Petitions Nos.
182 and 203 of 1956.
Porus A. Mehta and T. M. Sen, for the
Intervener in Appeal No. 333 of 1955 (Attorney-General of India on behalf of
the Union of India).
337 Veda Vyasa, S. K. Kapur and N. H.
Hingorani, for the Interveners in the appeals (petitioners in Petitions Nos. 65
and 182 of 1956).
1957. January 10. The Judgment of the Court
was delivered by BHAGWATI J.-These three appeals with special leave from the
orders of the High Court of Punjab and three petitions under Art. 32 of the
Constitution challenge the vires of the Industrial Disputes Act, 1947 (XIV of
1947), hereinafter referred to as the Act.
The appellants in the three appeals are
engaged in the manufacture and production of textiles. There were disputes
between them and their workmen, and, by two notifications each dated March 4,
1955, in regard to the first two of them and by a notification dated February
25, 1955, in respect of the third, the State of Punjab, respondent No. 2,
referred the said disputes for adjudication to the 2nd Punjab Industrial
Tribunal, Amritsar, respondent No. 1, who entered upon the said references and
issued notices to the appellants to file their written statements. The
appellants in Civil Appeal No. 335 of 1955 filed their written statement on
March 31, 1955, without prejudice to their contentions that respondent No. 2
was not competent to refer the disputes for adjudication by respondent No. I
and that respondent No. I had no jurisdiction to entertain the reference. The
appellants in Civil Appeals Nos. 333 and 334 of 1955 were called upon to file
their written statements on or before April 23, 1955, which they did raising the
same objections as to the competency_ of respondent No. 2 and the jurisdiction
of respondent No. 1.
On April 14, 1955, however, the appellants in
all the three appeals filed writ petitions. in the High Court under Art.
226 of the Constitution against, inter alia,
respondents Nos. I and 2 asking for writs in the nature of prohibition
restraining respondent No. 1 from proceeding with the references, writs in the
nature -of certiorari directing respondent No. 1 to transmit the records of the
proceedings for being quashed and writs in the nature of mandamus directing
respondent No. 2 43 338 to cancel the notifications under which the said
references had been made. The grounds which were urged in support of these
applications were that their mills were controlled industries within the
definition of the term contained in el. (ee) of s. 2 of the Act as amended by
s. 32 of Act LXV of 1951, that they were engaged in the production and
manufacture of textile goods and were a textile industry within the meaning of
the word 'textiles" as mentioned in the First Schedule to Industry
(Development and Regulation) Act, 1951, and had been declared an industry of
which the Union Government had taken control within the meaning of the said
Act, that the disputes purporting to be referred by respondent No. 2 to
respondent No. 1 were industrial disputes concerning a controlled industry
specified in this behalf by the Central Government and that, therefore, the
appropriate Government for the purposes of the Act so far as their mills were
concerned was the Union Government and not respondent No. 2 and that respondent
No. 2 had no jurisdiction or authority to refer the existing or apprehended
disputes between them and their workmen to respondent No. I and the references
being invalid there was no jurisdiction in respondent No. 1 to entertain the
said references. These petitions came up for hearing before a Division Bench of
the High Court consisting of the learned Chief Justice and Mr. Justice Kapur
who dismissed the same in limine observing that they were premature, obviously
meaning that respondent No. I could determine the objection in regard to its
jurisdiction to entertain the references and unless and until it did so the
appellants had no cause of action to file the said petitions' It appears that
on or about April 12, 1955, a Division Bench of the said High Court consisting
of the learned Chief Justice and Mr. Justice Falshaw had admitted a writ
petition based on the very same grounds and had granted a stay of proceedings
before respondent No. 1 therein. It further appears that on April 18, 1955, the
very same Bench which dismissed the petitions of the appellants in limine on
April 15, 1955, admitted a writ petition filed by the Saraswati 339 Sugar
Syndicate Ltd., inter alia, against respondent No. 2 wherein, besides the
grounds urged in their writ petitions, an additional ground questioning the
constitutionality of s. 10 of the Act had also been urged and ordered the stay
of proceedings before the Industrial Tribunal. The appellants filed on April
18, 1955, applications before the High Court for leave to appeal, to this Court
and for stay of further proceedings before respondent No. 1. Notices were
issued by the High Court to the respondents in those applications but stay of further
proceedings was refused.
The appellants having come to know of the
order passed by the Division Bench of the High Court on April 18, 1955, on the
writ petition of the Saraswati Sugar Syndicate Ltd., filed petitions on April
19,1955, for review of the orders dated April 15, 1955, dismissing their writ
petitions in limine. In these petitions for review the appellants, with a view
to bring their applications within the ratio of the writ petition of the
Saraswati Sugar Syndicate Ltd., alleged that their counsel had inadvertently
failed to raise the contention that s. 10 of the Act was ultra vires the
Constitution. The High Court was prepared to issue notices to the respondents
but was not prepared to grant the stay of further proceedings with the result that
on the request of the counsel for the appellants the said petitions for review
were dismissed on April 20, 1955.
On April 25, 1955, the appellants filed
petitions in this Court for special leave to appeal under Art. 136 of the
Constitution. In these petitions for special leave, they contended that s. 10
of the Act was void and infringed the fundamental right guaranteed under Art.
14 of the Constitution "being discriminatory in its ambit". Special
leave was granted to all the three appellants by this Court on May 2, 1955, and
an order for consolidation of these appeals was made on June 1, 1955.
This plea as to the unconstitutionality of s.
10 of the Act was elaborated by the appellants in para 12 of their statement of
the case filed before us:" That section 10 of the Industrial Disputes Act
is also ultra vires of the Constitution of India,. as it conflicts with the
provisions of Art. 14 of the 340 Constitution. The section is discriminatory in
ambit and scope. It confers on the appropriate Government unregulated and
arbitrary powers inasmuch as no rules have been made to justify differentiation
between parties similarly situated and circumstanced in every respect. There is
no rational basis of classification providing different procedures for dealing
with the same or similar matters. The reference to a Board under section 10 (1)
(c) of the Act is certainly more beneficial, speedy, inexpensive and less
cumbersome." Not content with merely challenging the constitutionality of
s. 10 of the Act, the appellants in Civil Appeal No: 333 of 1955 filed in this
Court on October 3, 1956, a petition under Art. 32 of the Constitution, being
Petition No. 203 of 1956, challenging the vires of the whole Act on various
grounds which had not been urged in the proceedings taken by the appellants
till then. We shall not enumerate all these grounds but refer at the
appropriate place only to those contentions which were urged before us by the
learned counsel at the hearing.
A similar petition under Art. 32 of the
Constitution had been filed by the Atlas Cycle Industries Ltd., on September
15, 1956, being Petition No. 182 of 1956, containing identical grounds of
attack against the constitutionality of the Act. A notification had been issued
on April 27, 1956, by the State of Punjab referring the industrial disputes
between them and their workmen for adjudication by the 2nd Industrial Tribunal
and they asked for a writ of certiorari quashing the said reference and writs
of mandamus and/or prohibition directing the State of Punjab to withdraw the
said reference from the Industrial Tribunal and prohibiting the Industrial
Tribunal from proceeding with the same. Petition No. 65 of 1956 had been filed
on March 21, 1956, by five workmen of. the Indian Sugar and General Engineering
Corporation. Ltd., carrying on an undertaking in the name and style of the
Saraswati Engineering Works. A notification had been issued by the State of
Punjab referring the disputes which had 341 arisen between them and their
workmen to the 2nd Industrial Tribunal and one of the matters thus referred for
adjudication was whether the workmen dismissed or discharged after July 15,
1955, should be reinstated. The petitioners were temporary hands employed by
the Saraswati Engineering Works in place of the permanent workmen who had been
dismissed or discharged after July 15, 1955, and they, in the interests of
themselves and 200 other employees who were in the same category, apprehended
that if the Industrial Tribunal ordered the reinstatement of the permanent
workmen who had been dismissed or discharged, they would be out of employment.
They had apparently the support of the Saraswati Engineering Works who were
keen to retain them in their employ and filed the petition challenging the
constitutionality of the Act on identical grounds. Besides thus challenging the
vires of the Act, they also urged in their petition that the undertaking was a
controlled industry and the appropriate Government which was competent to make
the reference was the Union Government and not the State of Punjab. They also
asked for the same reliefs as in Petition No. 182 of 1956.
The Attorney-General of India asked for and
obtained leave to intervene on behalf of the Union of India at the hearing of
the Civil Appeals Nos. 333 to 335 of 1955 and so did the petitioners in both
the Petitions Nos. 182 of 1956 and 65 of 1956. These petitions along with
Petition No. 203 of 1956 were set down for hearing and final disposal after the
Civil Appeals Nos. 333 to 335 of 1955 and all of them were heard together. This
common judgment will govern the decision in all.
It may be noted at the outset that the
question as to the various undertakings being controlled-industries and the
appropriate Government for making the references of the industrial disputes
arising between them and their workmen being the Union Government and not the
State of Punjab which was the very basis of the writ petitions filed in the
High Court and was also one of the grounds oil which special leave. to 342
appeal had been obtained from this Court was ultimately abandoned in the course
of the hearing before us and nothing more need be said about it. The only
contention which has been urged before us in these three special leave appeals
and the three Art. 32 petitions is in regard to the vires of the Act.
In order to appreciate the grounds of attack
against the constitutionality of the Act it is necessary to briefly survey the,
provisions of the Act as it stood before the amendments made by the Industrial
Disputes (Amendment and Miscellaneous Provisions) Act, 1956 (XXXVI of 1956).
The Act was passed, as the preamble shows, with the express purpose of making
provision for the investigation and settlement of industrial disputes and for
certain other purposes therein appearing. Section 2(j) defines " industry
" to mean any business, trade, undertaking, manufacture or calling of
employers and includes any calling, ,service, employment, handicraft or
industrial occupation or avocation of workmen. Section 2(k) defines an "
industrial dispute " to mean 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. Chapter II of
the Act sets out the authorities under the Act and they are (1) The Works
Committee, (2) Conciliation Officers,(3) Boards of Conciliation, (4) Courts of
Enquiry, and (5) Industrial Tribunals. These are different authorities with
different powers and the purposes for which they are set up and their functions
are prescribed in the Act. The Works Committee consists of representatives of
employers and workmen engaged in a particular establishment and is constituted
in the prescribed manner in order to promote measures for securing and
-preserving amity and good relations between the employers 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. The Conciliation Officers are appointed by notification by 343 the
appropriate Government charged with the duty of mediating in and promoting the
settlement of industrial disputes. Boards of Conciliation are constituted by
notification by the appropriate Government as occasion arises for promoting the
settlement of industrial disputes.
Courts of Enquiry are constituted by
notification by the appropriate Government as occasion arises for enquiring
into any matter appearing to be connected with or relevant to an industrial
dispute. Industrial Tribunals are constituted by the appropriate Government for
the adjudication of industrial disputes in accordance with the provisions of
the Act.
Chapter III provides for reference of
disputes to Boards, Courts or Tribunals and the relevant portion of s. 10
provides as under:
" 10. (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 enquiry ; or (c)refer
the dispute or any matter appearing to be connected with, or relevant to, the
dispute, to a Tribunal for adjudication:
Provided 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 ha been
frivolously or vexatious 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." Chapter IV
prescribes the procedure, powers and duties of the several authorities. The
Conciliation Officers are enjoined for the purpose of bringing about a
settlement of a dispute, without delay to investigate the dispute and all
matters affecting the merits and the right settlement thereof and are also
empowered to do all such things as they think fit for the purpose of inducing
the parties to come to an amicable settlement 344 of the dispute. If a
settlement of the dispute or of any of the matters in dispute is arrived at in
the course of conciliation proceedings, they are to send a report thereof to
the appropriate Government together with a memorandum of the settlement signed
by the parties to the dispute. If no such settlement is arrived at, the Conciliation
Officers have, as soon as practicable and after the close of the investigation,
to send to the appropriate Government a full report setting forth the
proceedings and steps taken by them for ascertaining the facts and
circumstances relating to the dispute land for bringing about a settlement
thereof together with a full statement of such facts and circumstances, their
findings thereon, the reasons on account of which, in their opinion, a
settlement could not be arrived at and their recommendations for the
determination of the dispute. If, on a consideration of such report the
appropriate Government is satisfied that there is a case for reference to a
Board or Tribunal., it may make such reference. The Boards of Conciliation to
whom a dispute may be referred under the Act are enjoined to endeavour to bring
about a settlement of the same and for this purpose they are, in such manner as
-they think fit and without delay, to investigate the dispute and all matters
affecting the. merits and the right settlement thereof and are also empowered
to do all such things as they think 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 of any of the matters is arrived at in the course of the
conciliation proceedings they are to send a report thereof to the appropriate
Government together with a memorandum of the settlement signed by the parties
to the dispute. If no such settlement is arrived at they are, as soon as
practicable after the close of the investigation, to send to the appropriate
Government a full report setting forth the proceedings and steps taken by them
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, their findings thereon the reasons on account of
which, in their opinion, a' 345 settlement could not be arrived at and their
recommendations for the determination of the dispute. The Courts of Enquiry are
enjoined to enquire into the matters referred to them and report thereon to the
appropriate Government. The Industrial Tribunals to whom an industrial dispute
may be referred for adjudication are to hold their proceedings expeditiously
and, as soon as, practicable on the conclusion thereof, submit their award to the
appropriate Government.
Section 19, sub-ss. (3), (4) and (6)prescribe
the period of operation of awards:
" 19. (3) An award shall, subject to the
provisions of this section, remain in operation for a period of one year:
Provided that the appropriate Government may
reduce the said period and fix such period as it thinks fit:
Provided further that-the appropriate
Government may, before the expiry of the said period, extend the period of
operation by any period not exceeding one year at a time as it thinks fit so,
however, that the total period of operation of any award does not exceed three
years from the date on which it came into operation.
(4) Where the appropriate Government, whether
of its own motion or on the application of any party bound by the award,
considers that since the award was made, there has been a material change in
the circumstances on which it was based, the appropriate Government may refer
the award or part of it to a Tribunal for decision whether the period of
operation should not, by reason of such change, be, shortened and the decision
if the Tribunal on such -reference shall subject to the provision for appeal,
be final.
(6) Notwithstanding the expiry of the period
of operation under sub-section (3), the award shall continue to be binding on
the parties until a period of two months has elapsed from the date on which
notice is given by any party or parties intimating its intention to terminate
the award." Chapter V contains provisions in regard to the proof strikes
and outs and declares what are illegal strikes and lock-outs for the purpose of
the Act, 44 346 Chapter V-A was introduced by Act XLIII of 1953 and contains
provisions in regard to the lay-off and retrenchment of workmen. The other
provisions of the Act are not relevant for the purpose of this enquiry and need
not be referred to.
It follows from this survey of the relevant
provisions of the Act that the different authorities which are 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 a discretion to choose
one or the other of the authorities for the purpose of investigation and
settlement of industrial disputes and whether it sets up one authority or the
other for the achievement of the desired ends depends upon its appraisement of
the situation as it obtains in a particular industry or establishment. The
Works Committees are set up with the object of avoiding such a clash of
interest or material differences of opinion as would otherwise lead to
industrial disputes. If the measures adopted by the Works Committees do not
achieve the end in view and industrial disputes arise or are apprehended to
arise between the employers and the workmen, Conciliation Officers may be
appointed by the appropriate Government charged with the duty of mediating in
and promoting settlement of industrial disputes. If the Conciliation Officers
succeed in bringing about a settlement between the employers and the workmen,
such settlements are to be signed by the parties to the disputes ; but if in
spite of the endeavours of the Conciliation. Officers properly directed in that
behalf no settlement is arrived at between the parties, the Conciliation
Officers are to send a full report in the manner indicated above so that the
appropriate Government may have before it complete materials in order to enable
it to come to a conclusion whether there is a case for reference to a Board or
Tribunal at the case may be. If the appropriate Government is satisfied that
there is a case for reference to, a Board of Conciliation, it may constitute
such Board -for promoting the settlement of the industrial dispute consisting
of a Chairman and 2 or 4 other members 347 as it thinks fit, charged with the
duty of doing 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. If the Board
succeeds in arriving at a settlement, a report thereof together with a
memorandum of the settlement will be sent by it to the appropriate Government
but if no such settlement is arrived at the Board will, send to the appropriate
Government a full report in the manner indicated above including its
recommendations for the determination of the dispute. It may be noted 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 in the event of
a failure to bring about such settlement will furnish materials to the
appropriate Government to make up its mind whether it will refer the dispute
for adjudication to an Industrial Tribunal. Before, however, any such reference
is made by the appropriate Government it may set up a Court of Enquiry for the
purpose of enquiring into any matter appearing to be 'connected with or
relevant to an industrial dispute. The Court of Enquiry will enquire into those
matters and report thereon to the appropriate Government within six months from
the commencement of the enquiry. That report will furnish materials to the
appropriate Government for finally determining whether the industrial dispute
shall be referred by it for adjudication to the Industrial Tribunal. It may be
that the report of the Court of Enquiry discloses circumstances under which the
appropriate Government considers that it is not necessary to refer the
industrial dispute for adjudication to the Industrial Tribunal. In that event
the matter will end there and. the appropriate, Government may await further
developments before referring the industrial dispute for adjudication to the
Industrial Tribunal. If,, on the other hand, the materials embodied in the
report of the Court of Enquiry disclose circumstances which make it necessary
for the appropriate Government to refer the industrial dispute for adjudication
to the Industrial Tribunal, the appropriate Government will constitute an
Industrial Tribunal for adjudication 348 of the industrial dispute-in
accordance with the provisions of the Act. The Industrial Tribunal would then
adjudicate upon such dispute and submit its award to the appropriate
Government.
These are the steps which are contemplated in
the manner indicated in s. 10 of the Act for reference of disputes to Boards,
Courts or Tribunals. It is not necessary that all these steps should be taken
seriatim one after the other.
Whether one or the other of the -steps-should
be taken by the appropriate Government must depend upon the exigencies of the
situation, the imminence of industrial strife resulting in cessation or
interruption of industrial production and breach of industrial peace
end-angering public tranquility and law and order. If the matter brooks delay the
appropriate Government may start conciliation proceedings culminating in a
reference to a Board of Conciliation and also Court of Enquiry, if need be,
before a full-fledged. reference is made to. an Industrial Tribunal If, on the
other hand, the matter brooks no, delay the appropriate Government may possibly
refer the dispute to a Board of Conciliation before referring it for
adjudication to an Industrial Tribunal or may straightaway refer it for
adjudication by the Industrial Tribunal.
What step would be taken by the appropriate
Government -in the matter of the industrial dispute must, therefore, be
determined by the surrounding circumstances, and the discretion vested in the
appropriate Government for setting up one or the other of the authorities for the
purpose of investigation and settlement of industrial disputes must be
exercised by it having regard to the exigencies of the situation and the
objects to be achieved. No hard and fast rule can be laid down as to the
setting up of one or the other of the authorities for the purpose of bringing
about the ,desired end which is the settlement of industrial disputes and
promotion of industrial peace and, it is hardly legitimate to say that such
discretion as is vested in the appropriate Government will be exercised
"with an evil eye and an unequal hand." It is contended in the first
instance that the provisions of the Act are violative of the fundamental 349
rights enshrined in Art. 14 and Art. 19(1) (f) and (g) of the Constitution ;
that it is open to the appropriate Government to differentiate -between the
parties ,similarly placed and circumstanced in every respect and in the absence
of any rules made in this behalf the appropriate Government has unregulated and
arbitrary powers to discriminate between the parties; that there is no rational
basis of classification providing different treatment for different parties and
it, is open to the appropriate Government, in one case, to refer the industrial
dispute to a Court of Enquiry, and in another case to refer it to an Industrial
Tribunal and that the procedures before the Courts of Enquiry and before the
Industrial Tribunals are different, the one before the Courts of Enquiry being
less onerous and less: prejudicial to the parties than that before the Industrial
Tribunals. It is submitted that the reports of the Courts of Enquiry are quite
innocuous whereas the awards of the Industrial Tribunals are binding on the
parties and are. backed up by sanctions behind them, and in regard to the,
periods of operation also, it is open to the appropriate Government, in one
case to reduce the -same to an extent which will make them negligible in point,
of time whereas in another case it is open to it to extend the periods even.
upto three years from the dates on. which the awards came into operation and
the appropriate Government may, in the exercise of its unfettered and
uncontrolled discretion, adopt different measures in the case of different
parties so as to discriminate between them and work to the prejudice of those less
fortunately situated.
It is also contended that these
discriminatory provisions being inextricably interwoven with the rest of the
provisions of the Act or being such that the Central Legislature would not have
enacted the rest of the provisions of the Act without including the same
therein, the whole of the Act is ultra vires the Constitution.
We are unable to accept these contentions.
Having regard to the provisions of the Act hereinbefore set out it is clear
that s. 10 is not discriminatory in its ambit and the appropriate Government is
at liberty 350 as and when the occasion arises to refer the industrial disputes
arising or threatening to arise between the employers and the workmen to one or
the other of the authorities according to the exigencies of the situation.
No two cases are alike in nature and the
industrial disputes which arise or are apprehended to arise in particular
establishments or undertakings require to be treated having regard to the
situation prevailing in the same. There cannot be any classification and the
reference to one or the other of the authorities has necessarily got to be
determined in the exercise of its best discretion by the appropriate
Government. Such discretion is not an unfettered or an 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 various authorities are
to be set up with particular ends in view and it is the achievement of the
particular ends that guides the discretion of the appropriate Government in the
matter of setting up one or the other of them. The purpose sought to be
achieved by the Act has been well defined in the preamble? to the Act. The
-scope of industrial disputes is defined in s. 2(k) of the Act and there are
also provisions contained in the other sections of the Act which relate to
strikes and lock-outs, lay-off and retrenchment as also the conditions of
service, etc., remaining unchanged during the pendency of proceedings. These
and analogous provisions sufficiently indicate the purpose and scope of the Act
as also the various industrial disputes which may arise between the employers
and their workmen which may have to be referred for settlement to the various
authorities under the Act. The achievement of one or the other of the objects
in view by such references to the Boards of Conciliation or Courts of Enquiry
or Industrial Tribunals must guide and control the exercise. of the discretion
in that behalf by the appropriate Government and there is no scope, therefore,
for the argument that the appropriate Government would be in a position to
discriminate between one party and the other.
351 Apart from the references to be thus made
to the Boards of Conciliation, Courts of Enquiry or Industrial Tribunals, the
appropriate Government is also given the powers to prescribe the period of
duration of the award made by the Industrial Tribunal. Normally the award is to
be in operation for one year from the date of its commencement. The
circumstances, however, may have changed between the date of the reference and
the date of the, award and power is thus given to the appropriate Government to
reduce the said period and fix such period as it thinks fit. Power is also
given to the appropriate Government, if the circumstances warrant that
decision, to extend the period of operation by any period not exceeding one
year at a time as it thinks fit before the expiry of the normal period of one
year-, provided however that the total period of operation of any award does
not exceed three years from the. date on which the same came into operation.
This power is to be exercised, -if, in the opinion of the appropriate
Government, the circumstances have not so changed as to warrant the parties to
the industrial dispute to ask for a change in the terms of the award and in
that event the award may continue to be in operation for the maximum period of
three years from the date of its commencement. The case in which there has been
a material change in the circumstances on which the award has been based is
mentioned in s. 19(4) of the Act and there the appropriate Government, whether
of its own motion or on an application of any of the parties bound by the award
is empowered to refer the award or a part thereof to a Tribunal if it is
satisfied about such material change in the circumstances for a decision
whether the period of operation should not by reason of such change be
shortened and the decision of the Tribunal on such reference, subject to the
provision for appeal, is declared to be final. It appears, therefore, that all
the various possibilities are thought of by those who framed this legislation
and wide discretion has been given to the appropriate Government to same having
regard to the case or 352 to refer the question of the reduction of the period
of operation to an Industrial Tribunal in case there has been a material change
in the circumstances on which the award was based. Here also it cannot be urged
that there is an unguided and unfettered discretion in the matter of changing
the period of operation of the award. The appropriate Government cannot merely
by its own volition change the period without having regard to the
circumstances of a particular case. There is no warrant for the suggestion that
such discretion will be exercised by the appropriate Government arbitrarily or
capriciously or so as to prejudice the interest of any of the parties
concerned. The basic idea underlying all the provisions of the Act is the,
settlement of industrial disputes and the promotion of industrial peace so that
production may not be interrupted and the community in general may be
benefited. This is the end which has got to be kept in' view by the appropriate
Government when exercising the discretion which is vested in it in the matter
of making the reference to one or the other of the authorities under the Act
and also in the matter of carrying out the various provisions contained in the
other sections of the Act including the curtailment or extension of the period
of operation of the award of the Industrial Tribunal. We are, of opinion that
there is no substance in the contention urged before us that the relevant
provisions of the Act and in particular a. 10 thereof are unconstitutional and
void as infringing the fundamental rights guaranteed under Art. 14 and Art. 19
(1) (f) and (g) of the Constitution. If these provisions are -thus intra vires
there is no need to consider the further argument advanced before us that these
provisions are so inextricably interwoven with the other provisions of the Act
or are such that the Legislature would not haven acted the other provisions of
the Act without, :incorporating the same therein.
It is next contended that the Industrial
Tribunals to whom industrial disputes are referred for adjudication by the
appropriate Government are legislating in the guise of adjudication and this
amounts to delegation 353 of the powers of legislation which it was not
competent to the Central Legislature to do. The argument is that the Industrial
Courts 'are not bound to follow the provisions of the ordinary law of the land
as enacted in the Indian Contract Act, the Payment of Wages Act, the Workmen's
Compensation Act, the Indian Limitation Act and the like, but are authorised by
the terms of the Act to lay down their own code of conduct in regard to
industrial relations and their own policy in regard to the promotion of
industrial peace. This, it is submitted is legislation and the Legislature hat
in effect abdicated its powers in favour of the Industrial Courts. The
provisions in regard to reinstatement of dismissed or discharged employees, the
provisions in regard to lay-off and retrenchment and the provisions in regard
to strikes and lock-outs, amongst others, are pointed out as introducing
provisions contrary to the positive law of the land and as laying down a code
of conduct or policy, and reference is made in this behalf to a decision of the
Federal Court in Western India Automobile Association v. Industrial Tribunal,
Bombay, and Others (1) and two decisions of the Madras High Court, viz., The
Electro Mechanical Industries Ltd., Madras v. The Industrial Tribunal No. 2 for
Engineering Firms and Type Foundries, Fort St. George, Madras, and Another(1)
and Shree Meenakshi Mills Ltd. v. State of Madras (3). It has to be remembered,
however, that 'the functions of the Industrial Tribunals, while adjudicating
upon the industrial disputes referred to them for adjudication, are quite
different from those of arbitration tribunals in commercial matters. As has
been observed by Ludwig Teller in 'Labour Disputes and Collective Bargaining',
Vol. 1, p. 536:
" Then too, 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
(1)[1949] F.C.R. 321.
(3)[1951] IT M.L.J. 382.
(2) [1950] II M.L.J.479.
354 existing obligations and disputes
relating to existing agreements." It was also observed by the Privy
Council in Labour Relations Board of Saskatchewan v. John East Iron Works,
Ltd.(1), while referring to a claim for reinstatement by a dismissed employee
as one of the typical matters in dispute between employers and employees:
" The jurisdiction of the Board (Labour
Relations Board)............ is not invoked by the employee for the enforcement
of his contractual rights: those, whatever they may be, he can assert
elsewhere. But his reinstatement, which the terms of his contract of employment
might not by themselves justify, is the means by which labour practices
regarded as unfair are frustrated and the policy of collective bargaining as a
road to industrial peace is secured. It is in the fight of this new conception
of industrial relations that the question to be determined by the Board must be
viewed." After quoting these observations of the Privy Council,
Rajamannar, C. J., pointed out in Shree Meenakshi Mills Ltd. v. State of Madras
(2) at p. 388:
" The essential object of all recent
labour legislation has been not so much to lay down categorically the mutual
rights and liabilities of employer and employees as to provide recourse to a
given form of procedure for the settlement of disputes in the interests of the
maintenance of peaceful relations between parties, without apparent conflicts
such as are likely to interrupt production and entail other dangers. It is with
this object that in the United States there has been legislation arranging for
the adjustment of conflicting interests by collective bargaining. In Great
Britain there have been Acts like the Industrial Courts Act, 1919, which
provides for Industrial Courts to enquire into and decide trade disputes. There
is also provision for Conciliation Boards under the Conciliation Act, 1896. In
fact, our Industrial Disputes Act is modelled on these two British Acts."
(1) [1949] A.C. 134.
(2) [1951] II M.L.J. 382.
355 This being the object of the enactment of
the Act by the Central Legislature, the powers vested in the Industrial
Tribunals in the matter of the settlement of industrial disputes referred to
them for adjudication, wide though they may be but guided as they are by
considerations of policy as indicated above, can hardly be characterised as
legislative powers. No doubt they lay down certain general principles to be
observed in regard to the determination of bonus, reinstatement of dismissed or
discharged employees and other allied topics but they are enunciated mainly
with the object of promoting industrial peace while settling particular
industrial disputes referred to them. These principles or rules of conduct,
though they are applied as precedents by the Industrial Tribunals while
adjudicating upon other similar industrial disputes referred to them, are not
rules of law strictly so called and do not amount to legislation by the
Industrial Tribunals. Even if the analogy of the Court,% of Law be applied to
the Industrial Tribunals, the Industrial Tribunals at best lay down or declare
what the principles or the rules of conduct governing the relations between
employers and the employees should be. A declaration of the principles or rules
of conduct governing the relations between the parties appearing before the
Industrial Tribunals is quite different from legislation which would be binding
on all parties and indeed there is no provision in the Act which confers on the
Industrial Tribunals either the power to make rules which would have statutory
effect or the power to legislate in regard to certain matters which crop up
between employers and employees. In the absence of any such provision, the mere
fact that the Industrial Tribunals, while pronouncing awards in the several
industrial disputes referred for their adjudication by the appropriate
Government, lay down certain principles or rules of conduct for the guidance of
employers and employees, does not amount to exercise of any legislative power
and no question of their being invested with. any legislative powers can arise.
So far as delegated legislation is concerned,
abstract definitions of the difference between the judicial and 356 the
legislative functions have been offered (See the distinction drawn by Mr.
Justice Field in the Sinking Fund case (1)), but they are of little use when
applied to a situation of complicated facts. The function of a Court is to
decide cases and leading jurists recognize that in the decision of many cases a
Court must fill interstices in legislation. A legislator cannot anticipate
every possible legal problem; neither can he do justice in cases after they had
arisen. This inherent limitation in the legislative process makes it essential
that there must be some elasticity in the judicial process. Even the ordinary
courts of law apply the principles of justice, equity and good conscience in
many cases; e. g., cages in tort and other cases where the law is not codified
or does not in terms cover the problem under consideration. The Industrial
Courts are to adjudicate on the disputes between employers and their workmen
etc., and in the course of such adjudication they must determine the
"rights" and "wrongs" of the claim,% made, and in so doing
they are undoubtedly free to apply the principles of justice, equity and good
conscience, keeping in view the further principle that their jurisdiction is
invoked not for the enforcement of mere contractual rights but for preventing
labour practices regarded as unfair and for restoring industrial peace on the
basis of collective bargaining. The process does not cease to be judicial by
reason of that elasticity or by reason of the application of the principles of
justice, equity and good conscience.
It is not necessary to discuss the various
authorities to which we have been referred on the nature and scope of the
legislative process. Suffice it to say that there is neither legislation nor
delegated legislation in the awards which are pronounced by the Industrial
Tribunals while adjudicating upon the industrial disputes referred to them for
adjudication and this contention is devoid of any force.
It is lastly contended that the Act was not
within the legislative competence of the Central Legislature inasmuch as the
definition of the term " industry " in (1) (1879) 99 U. S. 700, 761 ;
25 L. Ed. 496, 5i6.
357 s. 2(j) of the Act comprises industrial
as well as non.
industrial concerns and the Act which was
expressly enacted with the object of investigation and settlement of industrial
disputes is not covered by Entry 29 of List III of the Seventh Schedule to the
Government of India Act, 1935. That Entry relates to ",Trade unions;
industrial and labour disputes" and it is urged that industrial disputes
being the subject of legislation, there was no warrant for defining the term
,industry " so as to include therein labour disputes and those too in
non-industrial concerns.
The definition of industry contained in s.
2(j) of the Act being comprehensive enough to include labour disputes in
non-industrial concerns, it is not possible to separate the ultra vires part of
that definition from the intra vires part of it with the result that the whole
of the definition must be held to be ultra vires and in so far as it permeated
the whole of the Act, the Act as a whole should be declared void. This argument
is sought to be supported by drawing our attention to certain decisions of the
Industrial Tribunals which have included hospitals, educational institutions
And even the business of Chartered Accountants within the definition of "
industry " contained in the Act and it is urged that if such
non-industrial concerns are also included in the definition of the term
industry. ", the Act is certainly ultra vires Entry 29.
We need not pause to consider whether the
decisions of the Industrial Tribunals above referred to are correct. That will
have to be done when the question is raised directly before us for
adjudication. The fact that the Industrial Tribunals have put an extended
construction on the term " industry " is no reason for holding that
the definition itself is bad or ultra vires. what we have got to see is whether
the definition of the term " industry " is within the legislative
competence of the Central Legislature and on a prima facie reading of the same
we are not prepared to say that the same is unwarranted or not covered by Entry
29. A wrong application of the definition to cases which are not strictly
covered by it cannot vitiate the definition if otherwise it is not open to
challenge. It 46 358 should be noted that, according to the preamble, the Act
was enacted not only for settlement of industrial disputes but for other
purposes also. It is open to the respondents also to justify the definition of
the term " industry " as contained in s. 2(j) of the Act by having
resort to Entry 27 of the same List which refers to ,Welfare of labour;
conditions of labour ; provident funds;
employers' liability and workmen's compensation; health insurance, including
invalidity pensions; old age pensions The definition of the term "
industry " including as it does any calling, service, employment,
handicraft, or industrial occupation or avocation of workmen, would, therefore,
be justified under this Entry even if the same is not covered by Entry 29 above
referred to. The Entries in the Legislative Lists should not be given a narrow
construction, they include within their scope and ambit all ancillary matters
which, legitimately come within the topics mentioned therein. In the matters
before us, moreover, the concerns or undertakings are all industrial concerns
and fall squarely within the definition of the term " industry "
strictly socalled and it is not open to the pursuers, situated as they are, to
challenge the same. This contention also has no substance and must be rejected.
It, therefore, follows that the Act is intra
Vires the Constitution and Civil Appeals Nos. 333,334 and 335 of 1955 as also
Petitions Nos. 203, 182 and 65 of 1956 must be dismissed. There will, however,
be one set of costs payable by the appellants in Civil Appeals Nos. 333 to 335
of 1955 to the respondents therein So far as Petitions Nos. 203 of 1956, 182 of
1956 and 65 of 1956 are concerned, each party will bear and Pay its respective
costs thereof.
Appeals and Petitions dismissed.
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