Bombay Union of Journalists & Ors
Vs. The State of Bombay & ANR  INSC 258 (19 December 1963)
19/12/1963 GAJENDRAGADKAR, P.B.
GUPTA, K.C. DAS
CITATION: 1964 AIR 1617 1964 SCR (6) 22
CITATOR INFO :
F 1967 SC1206 (9) E 1975 SC1735 (4) R 1975
SC2226 (9) RF 1975 SC2238 (14) R 1976 SC1474 (9) E&D 1985 SC 860 (3,5) R
1985 SC 915 (6) F 1987 SC 695 (5,6) R 1990 SC 255 (2,4,5)
Industrial Dispute-Reference by
Government-Discretion of Government-Industrial Disputes Act (XIV of 1947), s.
25FScope of-Duty of Government to make a reference.
The appellants 2 and 3 were working
journalists and they were retrenched on payment of three months salary in lieu
of notice. The first appellant took up their case and alleged that the
retrenchment was not bona fide and they were in fact victimised. On the failure
of conciliation proceedings a report was submitted to the State Government
(respondent No. 1). After hearing the parties concerned the Government passed
an order refusing to refer the dispute. The reasons given 23 for the refusal
were that the termination of service was retrenchment and the management did
not appear to have acted mala fide. Thereupon the appellants filed a petition
under Art. 226 of the Constitution praying -for the issue of a writ of mandamus
directing the Government to consider the matter afresh. The single Judge who
heard the petition dismissed it and after appealing to a Division Bench without
success the present -appeal was filed by special leave granted by this Court.
It was contended on behalf of the appellants
that the Government while deciding whether a reference should be made has in
fact decided the merits of the case and therefore the order of refusal to refer
was illegal. The other contention was that the service of notice as required
under s. 25F(c) of the Act was mandatory and the management not having served
such a notice the Government ought to have taken this failure into
consideration which the Government has not done.
Held: When the appropriate Government
considers the question as to whether any industrial dispute should be referred
for adjudication or not, it may consider, prima facie, the merits of the
dispute and take into account other relevant considerations which would help it
to 'decide whether making a reference would be expedient or not. If the dispute
in question raises a question of law, or disputed questions of fact the
Government should not purport to reach final conclusions because these are
matters which would normally be within the jurisdiction of the Industrial
Tribunal. If the claim made is patently frivolous or is clearly belated or if
the impact of the claim on the general relations between the employers and the
employees in the region is likely to be adverse the Government may refuse to
make a reference.
The State of Bombay v. K. P. Krishnan, 
1 S.C.R. 227.
(ii) Clause (c) of s. 25F of the Act cannot
be said to constitute a condition precedent which has to be fulfilled before
retrenchment can be validly effected even though that clause has been included
under s. 25F along with cls. (a) and (b) which prescribe conditions precedent.
The observations in the following cases to the effect that s. 25F (c) is
mandatory are clearly in the nature of orbiter dicta.
State of Bombay v. The Hospital Mazdoor
Sabha,  2 S.C.R. 866, The District Labour Association, Calcutta v. ExEmployees
of Tea Districts Labour Association,  3 S.C.R. 206 and Workmen of Subhong
Tea Estate v. The outgoing Management of Subhong Tea Estate,  Y L.L.J.
333 (iii) Even if s. 25F(c) was constituted a condition precedent it would not
necessarily follow that a writ of mandamus should be issued against the
Government. The breach of s. 25F(c) by the Management is a serious matter and
the Government normally would refer such a dispute for adjudication. But the
provision of s. 10(1) read with s. 12(5) clearly shows that even where there is
a breach of s. 25F(c) the Government may have to consider the expediency of
making a reference. But 24 if the Government refuses to make a reference for
irrelevant considerations, or on extraneous grounds or acts mala fide a party
would be entitled to move the High Court for a writ of mandamus.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 497 of 1963.
Appeal by special leave from the judgment and
order dated September 10, 1960, of the Bombay High Court in Appeal No. 10 of
Bishan Narain and 1. N. Shroff, for the
H. N. Sanyal, Solicitor General of India, V.
S. Sawhney and R. H. Dhebar, for respondent.No. 1.
S. V. Gupte, Additional Solicitor-General of
India, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for respondent No.
December 19, 1963.-The Judgment of the Court
was delivered by GAJENDRAGADKAR J.The principal point of law which this appeal
raises for our decision relates to the construction of section 25F(c) of the Industrial
Disputes Act, 1947 (No.
14 of 1947) (hereinafter called the Act). The
Bombay Union of Journalists which is the Trade Union registered under the Trade
Unions Act, 1926, Mrs. Aruna Mukherji, and Mr. M. T.
Thomas are appellants 1 to 3; and the State
of Bombay, and the Indian National Press, Bombay, which is a Private Ltd.
Co. are respondents 1 and 2 respectively in
the present appeal. Appellant No. 2 was appointed on the staff of the second
respondent on a salary of Rs. 500 p.m. with effect from 1st January, 1955. On
the 30th November, 1957, she was served with -notice of termination of her
services with effect from 1st December, 1957. The notice recited the fact that
the management in Consultation with the Editor had decided to retrench her
services. Appellant No. 3 Mr. Thomas who was employed as a Sub-Editor in the
'Free Press Journal' some time in 25 1953, was similarly served with a notice
of retrenchment dated the 30th November, 1957 by which his services were
terminated as from the 1st December, 1957. In both the notices the two
appellants respectively were told that their services had been retrenched under
section 3(2) of the Working Journalists (Conditions of Service) and Miscellaneous
Provisions Act, 1955, and that in lieu of notice they would be paid their
salaries for three months. Both the appellants collected their salaries for the
month of November and ceased to work for respondent No. 2 as from the 1st
It appears that appellant No. 1 took up their
cause on the 3rd December, 1957 and wrote to the Director-in-charge of the
second respondent complaining that the action taken by the 2nd respondent
smacked of vindictiveness against appellants 2 and 3, and demanded that the
notices issued should be withdrawn forthwith and they should be reinstated in
their original posts. Respondent No. 2 did not concede the said demand;
thereupon, appellant No. 1 moved the Labour Commissioner of respondent No. 1
for taking further action in the matter. At that stage, the Conciliation Officer
intervened and called the parties before him. As a result of the discussion
held before the Conciliation Officer, it was discovered that no settlement was
possible, and so, the Conciliation Officer submitted a failure report under s. 12(4)
of the Act on the 15th April, 1958. In this report, the Conciliation Officer
expressed his opinion that in view of the stand taken by the parties, there was
no possibility of any settlement, and so, he was compelled to record a failure.
After the matter was thus reported to
respondent No. 1 by its Conciliation Officer, both the parties filed their respective
statements before respondent No. 1. Respondent No. 1 considered the said
statements and the report submitted by the Conciliation Officer and came to the
conclusion that it was not necessary to refer the dispute to a Tribunal under
s. 12(5) of the Act. This decision was communicated to the appellants by the
Dy. Secretary, Labour and Social Welfare Department of respondent No. 1 by his
letter dated 1st July, 1958. It is necessary to set out the reasons given 26 in
this letter for not referring the dispute to the Tribunal. These reasons were
set out in the letter in these terms "(1) The termination of services of
Shrimati Aruna Mukherji and Shri M. T. Thomas a ppears to be an act of
retrenchment on the part of the management for which the management is willing
to pay all the legal dues to the retrenched persons; and (2) in effecting the
said termination the management does not appear to have acted mala fide or
vindictively nor practised victimisation for trade union activities." The
appellants then moved the Bombay High Court under Art.
226 of the Constitution for a writ of
mandamus against respondent No. 1. It was urged on their behalf that the
refusal of respondent No. 1 to refer the dispute to the Industrial Tribunal
under s. 12(5) of the Act was illegal, and so, they prayed that the High Court
should issue a writ directing respondent No. 1 to consider the matter afresh
and decide whether a reference should be made or not. This writ petition was
heard by a single Judge of the said High Court and was ultimately dismissed.
The appellants challenged the correctness of the said decision by a Letters
Patent Appeal before a Division Bench of the High Court. The Division Bench
agreed with the view taken by the learned single Judge, and so, the appeal was
dismissed. It is against this decision that the appellants have come to this
Court by special leave.
The first contention which has been raised
before us by Mr. Bishan Narain on behalf of the appellants is that the reasons
given by respondent No. 1 in refusing to make a reference show that respondent
No. 1 considered the merits of the dispute and came to the conclusion that the
reference would not be justified; and Mr. Bishan Narain contends that in
dealing with the merits of the dispute, while deciding the question as to
whether a reference should be made or not under s.,12(5) of the Act respondent
No. 1 has acted illegally and improperly. The relevant scheme of the Act as disclosed
by s. 12 is clear. When any industrial dispute exists or 27 is apprehended, the
Conciliation Officer may hold conciliation proceedings in the manner prescribed
by s. 12.
If the Conciliation Officer's efforts to
bring out a settlement of the dispute fail, then he makes a failure report
under s. 12(4); -and s. 12(5) provides, inter alia, that 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 the Tribunal, it may make such
reference. It, however, adds that where the appropriate Government does not
make such -a reference, it shall record and communicate to the parties
,concerned its reasons therefor. The argument is that s. 12(5) imposes an
obligation on respondent No. 1 to record reasons for refusing to make a
reference; and the reasons given by respondent No. 1 in the present case
indicate that respondent No. 1 acted beyond its jurisdiction in proceeding to
consider the merits of the dispute while deciding whether the reference should
be made or not.
This argument must be rejected, because 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 according 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
power under s 10(1), subject to this that s. 12(5) imposes 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). This
question has been considered by this Court in the case of the State of Bombay
v. K. P. Krishnan & Others (1). The decision in that case clearly shows
that when the appropriate Government considers the question as to whether any
industrial dispute should be referred for adjudicationor not, it may consider,
prima facie, the merits of the dispute and take into account other relevant
considerations which would help it to decide whether making a reference would
be expedient or not. It is true that if the dispute in question raise questions
of law, (1)  1 S.C.R. 227.
28 the appropriate Government should not
purport to reach a final decision on the said questions of law, because that
would normally lie within the jurisdiction of the Industrial Tribunal.
Similarly, on disputed questions of fact, the appropriate Government cannot
purport to reach final conclusions, for that again would be the province of the
Industrial Tribunal. But it would not be possible to accept the plea that the
appropriate Government is precluded from considering even prima facie the
merits of the dispute when it decides the question as to whether its power to
make a reference should be exercised under s. 10(1) read with s.12(5), or not.
if the claim made is patently frivolous, or is clearly belated, the appropriate
Government may refuse to make a reference. Likewise, if the impact of the claim
on the general relations between the employer and the employs in the region is
likely to be adverse, the appropriate Government may take that into account in
deciding whether a reference should be made or not. It must, therefore be held
that a prima facie examination of the merits cannot be said to be foreign to
the enquiry which the appropriate Government is entitled to make in dealing
with a dispute under s. 10(1), and so, the argument that the appropriate
Government exceeded its jurisdiction in expressing its prima facie view on the
nature of the termination of services of appellants 2 and 3, cannot be
Mr. Bishan Narain has then urged that the
main point of controversy between the parties was in regard to the failure of
respondent No. 2 to comply with the provisions of S.
25F(c) of the Act and that has not been
considered by respondent No. 1 while refusing to make a reference in the
present case. Section 25F(c) provides that no workman to which the said
provision applies shall be retrenched by the employer until notice in the
prescribed manner is served on the appropriate Government. It is common ground
that notice had not been served by respondent No. 2 on respondent No. 1 as
required by s. 25F(c) prior to the termination of services of appellants 2
& 3; and the argument is that the reasons mentioned by respondent No. 1 in
its communication to appellant No. 1 indicating its refusal to make a
reference, show that this aspect of the matter has not been 29 considered by
respondent No. 1 and that, it is urged, introduces a serious infirmity in the
said reasons and calls for ,a writ of mandamus requiring respondent No. 1 to
rectify the said omission. There is no substance in this argument. It appears
that the Rules framed by respondent No. 1 under the Act indicate that
respondent No. 1 has construed the provision of s. 25F(c) as being directory
and not as constituting a condition precedent for the validity of retrenchment
under s. 25F. Rule 80 of the said Rules clearly Shows that where the employer
has retrenched the employee by offering to pay him the requisite amount of
remuneration in lieu of notice prescribed by s. 25F(a), the employer is
required to serve the notice of the -,aid retrenchment within seven days of the
date of retrenchment, and that means that in such a case, the notice has not to
be served on the Government before retrenchment is effected.
In other words, R. 80, it is conceded, treats
the notice prescribed by s. s 25F(c) as condition subsequent and not a
condition precedent. In view of the Rule framed by itself respondent No. 1 must
not have thought it necessary to make any reference to -the argument urged by
the appellants that respondent No. 2's failure to serve a notice on respondent
No. 1 before retrenchment was effected introduced an infirmity in the order ;of
retrenchment. Rule 80 framed by respondent No. 1 was itself an answer to the
said plea, and so, respondent No. 1 -may well have thought that it was
unnecessary to give that reason in its communication to the appellants.
Besides, in dealing with this contention, it
is necessary to remember that in entertaining an application for a writ of
mandamus against an order made by the appropriate Government under s. 10(1)
read with s. 12(5), the Court is not sitting in appeal over the order and is
not entitled to ,consider the propriety or the satisfactory character of the
reasons given by the said Government. It would be idle to suggest that in
giving reasons to a party for refusing to make a reference under s. 12(5), the
appropriate Government has to write an elaborate order indicating exhaustively
-all the reasons that weighed in its mind in refusing to make -a reference. It
is no doubt desirable that the party concerned should be told clearly and
precisely the reasons why no reference is made, because the object of s. 12(5)
appears 30 to be to require the appropriate Government to state, its reasons
for refusing to make a reference, so that the reasons. should stand public
scrutiny; but that does not mean that a party challenging the validity of the
Government's decision not to make a reference can require the Court in writ
proceedings to examine the propriety or correctness of the said reasons. If it
appears that the reasons given show that the appropriate Government took into
account a consideration which was irrelevant or foreign, that no doubt, may
justify the claim for a writ of mandamus.
But the argument that of the pleas raised by
the appellants two have been considered and not the third, would not
necessarily entitle the party to claim a writ under Art.
That takes us to the main point which has
been strenuously argued before us by Mr. Bishan Narain with regard to the
construction of s. 25F(c). His contention is that just as s. 25F(a) and (b) are
both mandatory and constitute conditions precedent for valid retrenchment, so
is s. 25F(c) mandatory and a condition precedent. The prohibition contained in
s. 25F is put in the negative form and it is coupled with the condition that no
retrenchment can be effected until the three conditions specified by clauses
(a),. (b) and (c) are satisfied. The negative form adopted by the provision
coupled with the use of the word "until" which introduces the three
conditions, indicates that the conditions must be first satisfied before
retrenchment can be validly effected. In this connection, Mr. Bishan Narain has
referred to the decision of this Court in the State of Bombay & Others v.
The Hospital Mazdoor Sabha & Ors. (1) where it has been held that the
requirement prescribed by s.
25F(b) is mandatory and has to be complied
with before an industrial employee can be retrenched. Dealing with s.
25F(b), it was observed in that judgment that
clauses (a) and (c) of the said section prescribed similar conditions, though
it was expressly added that the Court was then not concerned to construe them.
Mr. Bishan Narain has also invited our attention to the fact that in Tea
Districts Labour Association, Calcutta v. Ex-Employees of Tea Districts (1)
 2 S.C.R. 866.
31 Labour Association and Anr.(1), it was
conceded that the requirement as to notice prescribed by s. 25F(c) was
mandatory and amounted to a condition precedent. Likewise, it appears that in
the case of The Workmen of Subong Tea Estate v. The Outgoing Management of
Subong Tea Estate & Anr. (2) recently decided by this Court, it has been
incidentally stated that the three conditions prescribed by clauses (a), (b)
and (c) of s. 25F appear prima facie to constitute conditions precedent before
an industrial workman can be validly retrenched. In that case, no question
arose about the construction and effect of the provisions of s. 25F and the
observations are clearly in the nature of obiter observations and even then
they indicate that the Court thought that prima facie the three conditions may
be similar. No decision of this Court has been cited before us where this
question has been directly considered and decided.
Mr. Bishan Narain, however, urges, and with
some force, that the nomal rule of construction requires that if clauses (a)
and (b) of s. 25F constitute conditions precedent, clause (c) in the context
must also receive the same construction.
Prima facie, this argument is no doubt
attractive; but a closer examination of the section shows that clause(c) of s. 25F
cannot receive the same construction as clauses (a) and (b) of s. 25F. Section
25F(a) requires that the workman has to be given one month's notice in writing.
indicating the reasons for retrenchment, and the period of notice has to expire
before the retrenchment takes place. It also provides that the workman can be paid
in lieu of such notice wages for the said period. It is the latter provision of
clause (a) which requires careful consideration in dealing with the character
of the requirement prescribed by s. 25F(c). This latter provision allows the
employer to retrench the workman on paying him his wages in lieu of notice for
one month prescribed by the earlier part of clause (a), and that means that if
the employer decides to retrench a workman, he need not give one month's notice
in writing and wait for the expiration of the said period before he (1) 
3 S.C.R. 207.
(2) (1964 1 L.L.J. 333).
32 retrenches him; he can proceed to retrench
him straightaway on paying him his wages in lieu of the said notice. Take a
case where retrenchment is effected under this latter provision of clause (a);
how would the requirement of clause (c) operate in such a case? If it is held
that the notice in the prescribed manner has to be served by the employer on
the appropriate Government before retrenching the employee in such a case, it
would mean that even in a case where retrenchment is effected on payment of
wages in lieu of notice it cannot be valid unless the requisite notice is
served on the appropriate Government; and that does not appear to be logical or
reasonable. Reading the latter part of clause (a) and clause (c) together, it
seems to follow that in cases falling under the latter part of cl. (a) the
notice prescribed by cl. (c) has to be given not before retrenchment, but after
retrenchment; otherwise the option given to the employer to bring about
immediate retrenchment of the workman on paying him wages in lieu of notice
would be rendered nugatory. Therefore, it seems that clause (c) cannot be held
to be a condition precedent even though it has been included under s. 25F along
with clauses (a) and'(b) which prescribe conditions precedent. The argument
based on the negative form in which the provision is enacted and the use, of
the word "until" no doubt are in favour of the appellant's
contention, but the context seems to require a different treatment to the
provision contained in clause (c). Besides, the requirement introduced by the
use of the word "until" is complied with even on the view we are
inclined to take about the nature of the condition prescribed by clause (c),
because after the retrenchment is effected, the employer has to comply with the
condition of giving notice about the said retrenchment to the appropriate
Government, and that is where the provision in clause (c) that the notice has
to be served in +,he prescribed manner assumes significance. Rules have been
framed by the Central Government and the State Governments in respect of this
notice and, stated broadly, it does appear that these Rules do not require a
notice to be served in every case before retrenchment is effected. In regard to
retrenchment effected on paying the workman his wages in lieu of notice, the
Rules seem to provide that the notice in 33 that behalf should be served within
the specified period prescribed by them; that is to say, under the Rules,
notice in such a case has to be served not before the retrenchment, but after
the retrenchment within the specified period. Mr. Bishan Narain no doubt
contends that if his construction of s. 25F(c) is correct, the Rules would be
invalid and that is true; but on the view we are inclined to take, the Rules
framed by the Government appear to be consistent with the policy underlying the
provision prescribed by s. 25F(c). We are, therefore, satisfied that s. 25F(c)
cannot be said to constitute a condition precedent which has to be fulfilled
before retrenchment can be validly effected.
In this connection, there is one more
consideration which is relevant. We have already seen the requirement of s. 25F(a).
There is a proviso to s: 25F(a) which lays down that no such notice shall be
necessary if the retrenchment is under an agreement which specifies a date for
the termination of services. Clause (a) of s. 25F, therefore, affords a
safeguard in the interests of the retrenched employee; it requires the employer
either to give him one month's notice or to pay him wages in lieu thereof
before ,he is retrenched. Similarly, clause (b) provides that the workman has
to be paid at the time of retrenchment, compensation which shall be equivalent
to 15 days' average pay for every completed year of service, or any part
thereof in excess of six months. It would be noticed that this payment has to
be made at the time of retrenchment, and this requirement again provides a
safeguard in the interests of the workman; he must be given one month's notice
or wages in lieu thereof and he must get retrenchment compensation as
prescribed by clause (b). The object which the Legislature had in mind in
making these two conditions obligatory and in constituting them into conditions
precedent is obvious.
These provisions have to be satisfied before
a workman can be retrenched. The hardship resulting from retrenchment has been
partially redressed by these two clauses, and so, there is every justification
for making them conditions precedent.
The same cannot be said about the requirement
as to clause (c). Clause (c) is not intended to protect the interests of the
workman as such. It is only intended to give intimation to the appropriate
Government about the retrenchment, and 134-159 S.C.-3.
34 that only helps the Government to keep
itself informed about the conditions of employment in the different industries
within its region. There does not appear to be present any compelling
consideration which would justify the making of the provision prescribed by
clause (c ) a condition precedent as in the case of clauses (a) & (b).
Therefore, having regard to the object which is intended to be achieved by
clauses (a) & (b) as distinguished from the object which clause (c) has in
mind, it would not be unreasonable to hold that clause (c), unlike clauses (a)
& (b), is not a condition precedent.
There is one more point which ought to be
mentioned before we part with this appeal. Even if we had held that s. 25F(c)
constitutes a condition precedent, it would not have been easy to accept Mr.
Bishan Narain's contention that a writ of mandamus should be issued against
respondent No. 1.
A writ of mandamus could be validly issued in
such a case if it was established that it was the duty and the obligation of
respondent No. 1 to refer for adjudication an industrial dispute where the
employee contends that the retrenchment effected by the employer contravenes
the provisions of s. 25F(c). Can it be said that the appropriate Government is
bound to refer an industrial dispute even though one of the points raised in
the dispute is in regard to the contravention of a mandatory provision of the
Act? In our opinion, the answer to this question cannot be in the affirmative.
Even if the employer retrenches the workman contrary to the provisions of s.
25F(c), it does not follow that a dispute resulting from such retrenchment must
necessarily be referred for industrialist adjudication. The breach of section
25F is no doubt a serious matter and normally the appropriate Government would
refer a dispute of this kind for industrial adjudication; but the provision
contained in s. 10(1) read with s. 12(5) clearly shows that even where a breach
of s. 25F is alleged, the appropriate Government may have to consider the expediency
of making a reference and if after considering all the relevant fact the
appropriate Government comes to the conclusion that it would be inexpedient to
make the reference, it would 'be competent to it to refuse to make such a
reference. We ought to add that when we are discussing this legal position, we
are necessarily 35 assuming that the appropriate Government acts honestly and
bona fide. If the appropriate Government refuses to make a reference for
irrelevant considerations, or on extraneous grounds, or acts mala fide, that,
of course, would be another matter; in such a case a party would be entitled to
move the High Court for a writ of mandamus.
The result is, the appeal fails and is
dismissed. There would be no order as to costs.