Chhotobhai Jethabhai Patel & Co. Vs.
The Industrial Court, Maharashtra Nagpur Bench, Nagpur  INSC 69 (9 March
CITATION: 1972 AIR 1268 1972 SCR (3) 731 1972
SCC (2) 46
CITATOR INFO :
R 1973 SC 883 (16)
Bombay Industrial Relations Act, 1948--ss.
78(1) D, 42(4)--Compliance with s. 42(4) if condition precedent for invoking
jurisdiction of Labour Court under s. 78(1) D.
Against the order of the appellant company
dismissing him, an employer filed an application before the Labour Court under
section 78 of the Bombay Industrial Relations Act, 1946. The Labour Court set
aside the order. The Industrial Court and the High Court confirmed the order of
the Labour Court rejecting the appellant's contention that the order of the
Labour Court was liable to be set aside on the ground that the employee did not
make an application under s. 42(4) in Chapter VIII of the Act' which was a
condition precedent to approaching the Labour Court. On the question whether
the Labour Court could exercise jurisdiction under s. 78(1) D of the Act in a
case where the employee of an industry governed by the Act had not complied
with the provisions of sub-section (4) of s. 42 of the Act read with the
proviso to the sub-section, HELD:Allowing the appeal.
(i) The scheme of Chapter VIII of the Act is
that in regard to any "Change" in an industrial matter there must be
compliance with the provisions of that chapter. There is nothing in the Act
which warrants the conclusion that the legislature by inserting paragraph D in
s. 78(i) intended to chalk out a wholly different course of action to that
prescribed in Chapter VIII dealing with changes. The ,scheme of s. 78 (1) is
that Labour Court is to have power to decide all the disputes covered by
paragraph A. In other words, efforts must first be made by the employer
intending to effect any change in respect of matters covered by s.
42(1), or an employee desiring a change in
respect of any order passed by the employer under standing order which would of
necessity include an order of dismissal, to see whether it was possible to come
to any agreement and an application to the Labour Court could only be resorted
to after efforts had been made to settle the dispute and no agreement had been
arrived at. [739C-G] (ii) A person who is dismissed would, be an employee
within the meaning of s. 3(13) of the Act and there is no valid reason for
differentiating the case of a dismissed employee from one who complains of some
other change. [739H]
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 12 of 1968.
732 Appeal from the judgment and order dated
April 12, 1967 of the Bombay High Court, Nagpur Bench in Special Civil
Application No. 812 of 1966.
M. N. Phadke and Mohinder Narain, for the appellant.
The Judgment of the Court was delivered by
Mitter, J. In this appeal by certificate the question involved is, whether the
Labour Court at Nagpur could exercise jurisdiction under s. 78(1)D of the
Bombay Industrial Relations Act in a case where the employee of an industry
governed by the Act had not complied with the provisions of s. 42(4) of the
said statute read with the proviso to the said sub-section. The Bombay High
Court has held that it was not necessary for an employee first to approach the
employer or to follow the procedure laid down in s. 42(4) including the proviso
before he could apply to the Labour Court for relief under S. 7 8 (1) D.
The facts are as follows. One Nathu,
respondent No. 3 herein, was employed as a munshi in the appellant's Bidi
factor at Bhandara. The appellant had framed a charge sheet against him in
respect of certain acts of misconduct, gross negligence of duty,
insubordination etc. on May 13, 1965.
An enquiry in respect thereof was held on May
15th after receipt of written statement from Nathu. Holding that the charges
leveled against him were proved, the employer dismissed the third respondent
with effect from August 1, 1965. The said respondent filed an application
challenging the order of dismissal before the Labour Court under s. 78 of the
Bombay Industrial Relations Act, 1946, hereinafter referred to as the 'Act', on
the 5th August. His complaint was that the charge sheet was not proper, that
the Head Office of the appellant had no authority to deal with his case tinder
the Standing Orders, that no evidence was allowed or filed on behalf of the
employer and that the finding was based only on his statement and in particular
his cross-examination. He had been forced to append his signature to a certain
paper without the same having been read over to him. The Labour Court after
holding an enquiry took the view that the findings of the enquiry officer were
perverse, that the order of dismissal was passed by a person not authorised to
exercise the power and consequently the Labour Court directed the reinstatement
of the third respondent with all back wages. The appellant preferred an appeal
to the State Industrial Court contending, inter alia, that the third respondent
had failed to comply with the provisions of law in that he did not make an
application under S. 42(4) of the Act which was a condition precedent to
approaching the Labour Court and prayed that the order of the Labour Court
should be set aside on that ground alone.
The Industrial Court confirmed the order of
the Labour Court. The appellant then filed a peti733 tion under Art. 227 of the
Constitution before the Bombay High Court. The High Court field against the
Unfortunately, there is no appearance for the
respondent before us.
In order to appreciate the scope of the
Labour Court's jurisdiction under the Act and in particular the attractability
of s. 78(1)D it is necessary to examine the scheme of the Act as a whole
including the provisions relevant for this appeal. The Act when first passed in
1946 known as the Bombay Industrial Relations Act was applicable to a limited
area within the State. In the Vidarbha region of the State, there was another
similar Act in operation.
The Act suffered numerous amendments from
time to time until 1965 when Maharashtra Act 22 of 1965 was passed The new, Act
was described as an Act "to extend the Bombay Industrial Relations Act,
1946 throughout the State of Maharashtra and for that and for certain other
purposes further lo amend that Act, and to repeal corresponding laws in force
in any part of the State". Under s. 2 of that Act the Bombay Industrial
Relations Act of 1946 as in force immediately before the commencement of the
1965 Act in the Bombay area of the State of Maharashtra was extended to the
rest of the State. The C.P. and Berar Act was repealed. As a result, the Act
now extends to the whole of the State. Chapter I contains only three sections :
s. 2 deals with the extent, commencement and application of the Act and s. 3 is
the definition section. Chapter 11 sets out the authorities to be constituted
or appointed under the Act. S. 9 provides for the constitution of Labour Courts
and S. 10 of Industrial Courts. Chapter III containing ss. 11 to 22 deals with
registration of Unions and Chapter IV with approved Unions. Chapter V deals
with representatives of employers and employees and appearance in proceedings
on their behalf.
Chapter VI deals with Powers and duties of
labour officer and Chapter VIII deals with standing, Orders. Chapter VIII
containing ss. 42 to 47 deals with "changes". Chapter IX deals with
Joint Committees, Chapter X with Conciliation Proceedings, Chapter XI with
Arbitration and Chapter XII with Labour Courts, their territorial jurisdiction,
heir powers, commencement of proceedings before the Labour etc.
It is not necessary to take note of other
Chapters excepting S. 123 in Chapter XIII which deals with the rule making
power. 'the relevant definitive clauses in s. 3 are "(8)
"change" means an alteration in an industrial matter;
(13) "employee" means any person
employed to do any skilled or unskilled work for hire or reward in any
industry, and includes(a) a person employed by a contractor to do any ,work for
him in the execution of a contract with an 734 employer within the meaning of
sub-clause (e) of clause (14) (b) a person who has been dismissed, discharged
or retrenched or Whose services have been terminated from employment on account
of any dispute relating to change in respect of which a notice is given or an
application made, under section 42 whether before or after his dismissal.
discharge, retrenchment or, as the case may be, termination from employment;
but does not include(i) a per.-,on employed
primarily in a managerial administrative, supervisory or technical capacity
drawing basic pay (excluding allowances) exceeding five hundred and fifty
rupees per month;
(ii) any other person or class of persons
employed in the same capacity as those specified in clause (i) above
irrespective of the amount of the pay drawn by such person which the State
Government may, by notification in the Official Gazette, specify in this
(17) "Industrial dispute" means any
dispute or difference between an employer and employee or between employers and
employees or between employees and employees and which is connected with any
(18) "industrial matter' means any
matter relating to employment, work, wages, hours of work, privileges, rights
or duties of employers or employees. or the mode.. terms and conditions of
employment, and includes(a) all matters pertaining to the relationship between,
employers and employees, or to, the dismissal or non-employment of any person;
(b) all matters pertaining to the demarcation
of functions of any employees or class of employees; .
(c) all matters pertaining to any right or
claim under or in respect of or concerning a registered agreement or a
submission, settlement or award made under this Act;
(d) all questions of what is fair and right
in relation to any industrial matter having regard to the person immediately
concerned and of the community as a whole;" 735 Under s. 3 1 (1) every
employer must submit for approval to the Commissioner, of Labour in the
prescribed manner standing Orders regulating the relations between him and his
employees. with regard to the industrial matters mentioned in Schedule within
six weeks from the date of the application of the Act to the industry. Under
sub-s. (5) of the section :
"Until standing orders in respect of an
undertaking come into operation under the provisions of sub-section (4), model
standing orders, if any, notified in the Official Gazette by the State
Government in respect of the industry shall apply to such undertaking."
Schedule 1 to the Act contains among other matters items 10 and 11 relating to
termination of employment including notice to be given by the employer and
employee and punishment including warning, censure, fine, suspension or
dismissal for misconduct, suspension pending enquiry into alleged misconduct
and the acts or omissions which constitute misconduct.
Normally, therefore, standing orders must
deal with misconduct which can lead to dismissal or other punishment.
Under s. 41 the provisions of the Industrial
Employment (Standing Orders) Act, 1946 are not to apply to any industry to
which the provisions of Chapter VII of the Act apply.
As 'industrial matter' as defined in s. 3(18)
includes all matters pertaining to the dismissal or non-employment of any
person, an industrial dispute within the meaning of s. 3(17) must necessarily
arise when there is any difference between an employer and an employee about
The solution to the question before us turns
on the interpretation of the relevant provisions in Chapter VIII headed
"changes". 'Change' as already noticed means any alteration in an
industrial matter. Under s. 42(1) any employer intending to effect any change
in respect of an industrial matter specified in Schedule 11 of which item 3
reads "Dismissal of any employee except as provided for in the standing
orders applicable under this Act".
must give notice of such intention in the
prescribed form to the representative of the employees. He must also send a
copy of such notice to the , Chief Conciliator, the Conciliator for the
industry concerned for the local area, the Registrar, the Labour Officer and
such other person as may be prescribed. He has also to affix a copy of such
notice at a conspicuous place of the premises where the employees affected by
the change are employed. Under sub-s.
(2) of s. 42 an employee desiring a change in
respect of an indus736 trial matter not specified in Schedule I or Schedule III
has to give notice in the, prescribed form to the employer with similar
intimation to others. Under sub-s. (4) any employee desiring a chance in
respect inter alia, of any industrial matter specified in Schedule III of which
item 6 reads "Employment including(i) reinstatement and recruitment"
must make an application to the Labour Court. 'This subsection has a proviso
which runs :
"Provided that no such application shall
lie unless the employee or a representative union has in the prescribed manner
approached, the employer with a request for the change and no agreement has
been arrived at in respect of the change within the prescribed period." S.
44 envisages an agreement between the parties regarding "change" and
registration of the memorandum thereof by the Registrar. Under s. 44-A a
memorandum of agreement arrived at is to be forwarded by either party to the
Registrar by registered post and an agreement which is registered under s. 44
is to come into operation as laid down in s. 45.
The territorial jurisdiction of Labour Courts
extends to local areas for which they are constituted under s. 77 in Part XII.
S. 78 runs as follows :
"78. (1) A Labour Court shall have power
decide(a) disputes regarding(i) the propriety
or legality of an. order passed by an employer acting or purporting to act
under the standing orders;
(ii)the application and interpretation of
(iii) any change made by an employer or
desired by an employee in respect of an industrial matter specified in Schedule
III except item (5) thereof and matters arising out of such change;
(b) industrial disputes(i) referred to it
under section 71 or 72;
(ii) in respect of which it is appointed as
an arbitrator by a submission;
737 .lm15 (c)whether a strike, lock-out,
closure, stoppage or any change is illegal under this Act;
B. try offenses punishable under this Act
where the payment of compensation on conviction for an offence is provided for,
determine the compensation and order it,-; payment;
C. require any employer to(a) withdraw any
change which is held by it to be illegal, or withdraw temporarily any change
the legality of which is a matter of issue in any proceeding pending final
decision, or (b) carry out any change provided such change is a matter in issue
in any proceeding before it under this Act. D. require an employer, where it
finds that the order of dismissal, discharge, removal, retrenchment,
termination of service, or suspension of an employee made; by the employer,(i)
was for fault or misconduct committed by the employee which came to the notice
of the employer more than six months prior to the date of such order;, or (ii)
was in contravention of any of the provisions of' any law, or of any standing
order in force applicable to such employee, or (iii) was otherwise improper or
illegal, (a) reinstate the employee forthwith or by a date specified by it in
this behalf and pay him wages for the period beginning can the date of such
order of dismissal, discharge, removal, retrenchment, termination of' service
or suspension, as the case may be, and ending on the date on which the Labour
Court orders his reinstatement or on the date of his reinstatement, whichever
is later, or (b) to pay to the employee in addition to wages (being wages for
the period commencing on the date of his dismissal, discharge, removal,
retrenchment or termination of service and ending on the date on which the
Labour Court orders such payment), such sum not exceeding four thousand rupees
by way of compensation, regard being had to-loss of employment and possibility
of getting suitable employment thereafter.
738 (2) Every offence punishable under this
Act shall he tried by the Labour Court within the local limits of whose
jurisdiction it was committed.
Explanations dispute falling under clause (a)
of paragraph A of sub-section (1) shall be deemed to have arisen if within the
period prescribed under the proviso to sub-section (4) of section 42, no
agreement is arrived at in respect of an order, matter or change referred to in
the said proviso." Clause D of s. 78(1) was introduced in the Act of
Maharashtra Act 22 of 1965. S. 31 of the Act of 1965 not only introduced cl. D
but also made changes in paragraphs A and C thereof. The forerunner of Act 22
of 1965 i.e. Bill No. LXVI of 1964, the object of which was to make numerous changes
in the Act shows in its Statement of Objects and Reasons that clause 31 of the
Bill was meant to "enlarge the powers of the Labour Court under
s.78". According to this clause "The Labour Court is empowered (by
paragraph D) to direct temporary withdrawal of any change the legality of which
is a matter of issue in any proceedings before it, pending its final
decision." The Labour Court was also thereby further empowered "to
require an employer to reinstate an employee with full back wages or pay him wages
and compensation not exceeding Rs.
2,500/.... if the employee Was dismissed,
The Statement of Objects and Reasons amply
demonstrates that by introducing paragraph D in S. 78(1) the legislature was
'Only seeking to arm the Labour Court with further and more effective powers to
Under s. 79(1) proceedings before a Labour
Court in respect of disputes falling under clause (a) of paragraph A of subs.
(1) of s. 78 must be commenced on an application made by any of the parties to
the dispute etc. and under sub-s. (2) every application under sub-s.(1) has to
be made in the prescribed from and manner. Under S. 84 an appeal lies to the
Industrial Court against the decision of a Labour Court in respect _ of a
matter falling under clause (a) or cl. (c) of paragraph A of sub-s. (1) ,of s.
78 except in the case of lock-out etc. or a decision of such .court under
paragraph C of sub-s. (1) of the said section.
Reading s. 78 as a whole, there is no doubt
left in our minds 'that the legislature wanted the provision to be a
comprehensive one. It contains all the powers of the Labour Court in the matter
of all disputes mentioned and gives it jurisdiction to punish 739 certain
offenses under the Act. It does not lay down the procedure for the attraction
of such jurisdiction. So far as disputes are concerned, the procedure is as
laid down in s. 79.
It will be noted that no mention is made in
s. 84 of paragraph D of S. 78(1) but inasmuch as orders of dismissal,
discharge, removal ,retrenchment, termination of service or suspension of an
employee would come under s. 78(1) paragraph A, the legislature felt it
unnecessary to make any mention of an order under paragraph D in s. 84.
Paragraph D, so far as we can see, is not referred to anywhere, else in the
The question therefore narrows down to this
i.e. whether the legislature by inserting paragraph D in s. 78(1) intended to
chalk out a wholly different course of action to that prescribed in Chapter
VIII dealing with changes. In our view, there is nothing in the Act which
warrants such a conclusion. The scheme of Chapter VIII seems to be that in
regard to any "change" in an matter there must be compliance with the
provisions of that Chapter. In other words, effort must first be made by the
employer intending to effect any change in respect of matters covered by s.
42(1) or an employee desiring a change in respect of any order passed by the
employer under standing orders which would of necessity include an order of
dismissal, to see whether it was possible to come to any agreement and an
application to the labour court could only be resorted to after efforts had
been made to settle the dispute and no agreement had been arrived at.
The scheme of S. 7 8 (1) seems to be that a
Labour Court is to have power to decide, all the disputes covered by paragraph
A. Paragraph B thereof gives the Labour Court the power to try offenses
punishable under the Act and cognizance of such offenses .;an only be taken
under s. 82.
Paragraphs C and D set out what relief the Labour
Courts are empowered to give including directions as may be found necessary in
that behalf. As already noted, the Statement of Objects and Reasons (A clause
31 of the Bill which later resulted in Act 22 of 1965, shows that the
underlying dea was to enlarge the powers of the Labour Court. The Legislature
nowhere intended to make a complete departure from the procedure to be adopted
when powers under s. 78(1)D were to be exercised.
Rule 5 5 of the Bombay Industrial Relations
Rules, 1947 shows how an application is to be made and the period within which
it is to be made.
It must be held that a person who is
dismissed would be an employee within the meaning of s. 3(13) of the Act and we
can 740 see no valid reason for differentiating the case of a dismissed
employee from one who complains of some other change. As the scheme of the Act
is that disputes should be settled as far as possible and primarily through
conciliation and agreement, it does not stand to reason that an employee should
be able to side-step all this by a direct reference to the Labour Court. A
Labour Court is a creature of the statute and it can only exercise such
jurisdiction as the statute confers on it : if there are certain preconditions
to the exercise of its-jurisdiction, it must refuse to entertain any such
application unless such preconditions are first complied with.
In the result we set aside the order of the
High Court, allow the appeal and quash the orders of the Labour Court and the
Industrial Court but do not make any order for consequential relief, in view of
the solemn assurance given to this Court by Mr. Phadke, learned counsel for the
appellant that his client does not desire to give effect to the order of
termination of service passed on the third respondent. In the circumstances of
the case, we make no order as to costs.
Appeal allowed L1031 Sup.