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Full Case Details
G.K. MITTER, J
“… 3. Whether the strike at the Delhi Cloth Mills and the lockout declared by the management
on the 24-2-1966 are justified and legal and whether the workmen are entitled to wages for the
period of the lockout?
. – On March 4, 1966, an order under Section 10(1) and Section 12(5) of the
Industrial Disputes Act was passed over the signature of Secretary (Industries and Labour), Delhi
Administration, Delhi referring to the Special Industrial Tribunal certain matters setforth in the Schedule
annexed thereto for adjudication. According to the recitals in the order, it appeared to the Delhi
Administration from a report submitted by the Conciliation Officer under Section 12(4) of the Act that an
industrial dispute existed between the managements of Delhi Cloth Mills and Swatantra Bharat Mills and
their workmen represented by four different Unions and the Chief Commissioner, Delhi, was satisfied on
a consideration of the said report that the said dispute should be referred to an Industrial Tribunal. The
terms of reference specified in the Schedule are reproduced below:
- Whether the ‘sit-down’ strike at the Swatantra Bharat Mills from 23-2-1966 is justified and
legal and whether the workmen are entitled to wages during the period of the strike?” - The report of the Conciliation Officer shows that trouble had arisen over the claim of bonus in the
Delhi Cloth and General Mills and Swatantra Bharat Mills, two units of the same company. The report
also shows that at a meeting convened at 2.30 p.m. on February 23, 1966, the Works Committee
recommended that the payment of bonus should be suspended pending examination of the entire issue in
conciliation or otherwise. But before this could be announced, workers started demonstration outside the
mill premises of the first named unit and became violent. To quote from the report:
“As the situation became tense inside the mill premises and the workers left work, the
management closed down the turbine at about 4 p.m. on 23-2-1966. Later on, at about 11.00 p.m.
the management put up a notice that in view of the prevailing circumstances in the Mills, it was
not possible to work the mills until conditions become normal … As there was no improvement in
the situation and as workers who were inside the mills were reported to have caused further
damage to the mill property, the management declared a lockout at about 6 p.m. on 24th
February, 1966 … The workers, however, are very much restive over the management’s
declaration of lockout.”
With regard to Swatantra Bharat Mills, the report runs:
“(T)he situation is peaceful although the workers resorted to the stay-in-strike from 7.30 p.m. on
23rd February, 1966 and the strike still continues. It appears that their attitude is that whatever is
decided at the DCM level will automatically be applicable to them as well. The workers do not
seem to be in a mood to start the work unless the workers of the Delhi Cloth Mills also start
work”.
The recommendation in the report was that the dispute should be immediately referred to a Tribunal
for adjudication along with the issue of prohibitory orders under Section 10(3) of the Act. The report
notes that the Unions’ leaders had pressed that the question of workers’ claim for wages for the strike
period in the Swatantra Bharat Mills and lockout period in the Delhi Cloth Mills should also be included
and the Tribunal to be constituted should proceed immediately in the matter. - The Management filed a statement of case before the Special Tribunal on April 9, 1966 and the
Unions filed separate statements of case between April 10, 1966 and April 13, 1966. There were
Replications and Rejoinders up to May 21, 1966. - On June 3, 1966, the Company prayed before the Industrial Tribunal that Issues 3 and 4 may be
decided before the parties were called upon to lead their evidence. As regards Issues 3 and 4, the
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contention of the management was that the fundamental basis of these two matters was that there was a
strike at the Delhi Cloth Mills and a sit-down strike at the Swatantra Bharat Mills and the only question
referred to the Tribunal for decision related to the legality and justification of the said strikes. All the four
Unions contended before the Tribunal that there was no strike at the Delhi Cloth Mills. Two of the
Unions’ case was that the strike at Swatantra Bharat Mills was in sympathy with the workmen of the
Delhi Cloth Mills; while the other two Unions’ case was that there was a lockout in the Swatantra Bharat
Mills. As regards the first issue, the case of the Management was that there was a settlement on December
13, 1965 relating to the computation of bonus for the year 1963-64 between the Company and the two
major Unions. It was stated further that the settlement referred to the computation of bonus in accordance
with the provisions of the Payment of Bonus Act, 1965 and in arriving at the settlement, all the available
and relevant financial statements had been shown to the Unions which accepted the accounts based on
allocation of share capital and reserves during the years previous to and including 1963-64. Further,
according to the Management, one of the Unions had entered into another settlement with the
Management of the DCM Silk Mills with regard to that Union for the year 1964-65, and in view of these
settlements, it was not open to the workmen of the Delhi Cloth Mills and Swatantra Bharat Mills to
question the correctness and reasonableness of the allocations made by the Management towards share
capital and reserves of these two units. - The Tribunal considered the pleas put forward before it and several decisions cited in support and
came to the conclusion that as the strike covered by Issue 3 and sit-down strike covered by Issue 4 were
disputed by the Unions, or at any rate not admitted by all of them “it would be the duty of the Tribunal to
decide whether there was a strike at DCM as covered by Issue 3 and whether there was a sit-down strike
by S.B.M. as covered by Issue 4.” According to the Tribunal, it would not be exceeding its jurisdiction at
all and would not be going beyond the scope and ambit of the reference to examine Issues 3 and 4 in the
above light and accordingly, the Tribunal held that the parties would be at liberty to adduce such evidence
as they liked in confirmation or denial of the fact of a strike and sit-down strike regarding Issues 3 and 4. - Proceeding in the order in which the arguments were addressed, we propose to deal with Issues 3
and 4 first. Under Section 10(1)(d) of the Act, it is open to the appropriate Government when it is of
opinion that any industrial dispute exists to make an order in writing referring “the dispute or any matter
appearing to be connected with, or relevant to, the dispute, … to a Tribunal for adjudication.” Under
Section 10(4) “where in an order referring an industrial dispute to a Labour Court, Tribunal or National
Tribunal under this section or in a subsequent order, the appropriate Government has specified the points
of dispute for adjudication, the Labour Court or the Tribunal or the National Tribunal, as the case may be,
shall confine its adjudication to those points and matters incidental thereto.” - From the above it therefore appears that while it is open to the appropriate Government to refer
the dispute or any matter appearing to be connected therewith for adjudication, the Tribunal must confine
its adjudication to the points of dispute referred and matters incidental thereto. In other words, the
Tribunal is not free to enlarge the scope of the dispute referred to it but must confine its attention to the
points specifically mentioned and anything which is incidental thereto. The word “incidental” means
according to Webster’s New World Dictionary:
“happening or likely to happen as a result of or in connection with something more important;
being an incident; casual; hence, secondary or minor, but usually associated:”
“Something incidental to a dispute” must therefore mean something happening as a result of or in
connection with the dispute or associated with the dispute. The dispute is the fundamental thing while
something incidental thereto is an adjunct to it. Something incidental, therefore, cannot cut at the root of
the main thing to which it is an adjunct. In the light of the above, it would appear that the third issue was
framed on the basis that there was a strike and there was a lockout and it was for the Industrial Tribunal to
examine the facts and circumstances leading to the strike and the lockout and to come to a decision as to
whether one or the other or both were justified. On the issue as framed it would not be open to the
workmen to question the existence of the strike, or, to the Management to deny the declaration of a
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lockout. The parties were to be allowed to lead evidence to show that the strike was not justified or that
the lockout was improper. The third issue has also a sub-issue, namely, if the lockout was not legal,
whether the workmen were entitled to wages for the period of the lockout. Similarly, the fourth issue
proceeds on the basis that there was a sit-down-strike in the Swatantra Bharat Mills on 23-2-1966 and the
question referred was as to the propriety or legality of the same. It was not for any of the Unions to
contend on the issues as framed that there was no sit-down strike. On their success on the plea of
justification of the sit-down strike depended their claim to wages for the period of the strike. - Apart from the consideration of the various decisions cited at the Bar, the above is the view which
we would take with regard to Issues 3 and 4. We have now to examine the decisions cited and the
arguments raised and see whether it was competent to the Tribunal to go into the question as to whether
there was a strike at all at the Delhi Cloth Mills or a sit-down strike at the Swatantra Bharat Mills or a
lockout declared by the Management on 24-2-1966. - The decisions on the point to which our attention was drawn are as follows. In Burma-Shell Oil
Storage & Distributing Co. of India Ltd. v. Workmen [(1961) 2 LLJ 124] one of the disputes referred to
the fifth Industrial Tribunal by the Government of West Bengal under Section 10 of the Industrial
Disputes Act was a claim for bonus for 1955 payable in 1956 for the Calcutta Industrial area. The
Industrial Tribunal heard both the parties and awarded 4½ months basic salary as bonus for the year 1955
to the clerical staff and the operatives of the companies. This Court referred to the recital in the order of
the Government of West Bengal and observed that the reference was between the four appellants and their
workmen represented by the named Workers’ union on the other. According to this Court, it appeared
from the record that the said union represented only the workmen in the categories of labour, service and
security employees in the Calcutta industrial area and so prima facie the two demands made by the union
would cover the claims of the operatives alone. This Court also relied on the fact that the appellants had
dealt with the two categories of employees distinctly and separately. According to Gajendragadkar, J. (as
he then was) who delivered the judgment of the Court:
“If the reference does not include the clerical staff and their grievances, it would not be open to
the members of the clerical staff to bring their grievances before the tribunal by their individual
applications or for the tribunal to widen the scope of the enquiry beyond the terms of reference
by entertaining such individual applications.”
Accordingly, it was held that the appellants were right in contending that the tribunal had no authority to
include within its award members of the clerical staff employed by the appellants. - In Express Newspapers v. Workmen & Staff [(1962) 2 LLJ 227] the two items of dispute
specified in the order of reference were:
(1) Whether the transfer of the publication of Andhra Prabha and Andhra Prabha Illustrated
Weekly to Andhra Prabha (Private) Ltd., in Vijayawada is justified and to what relief the workers
and the working journalists are entitled?
(2) Whether the strike of the workers and working journalists from 27th April 1959, and the
consequent lockout by the management of the Express Newspapers (Private) Ltd., are justified
and to what relief the workers and the working journalists are entitled?
On the same day as the Government of Madras made the order of reference, it issued another order
under Section 10(3) of the Act prohibiting the continuance of the strike and the lockout in the appellant
concern. Against this latter order, the appellant filed a writ petition in the Madras High Court and the
workers also filed another writ petition against the order by which the dispute was referred to the
Industrial Tribunal for adjudication. In regard to the second petition, the learned Single Judge of the
Madras High Court held on the merits that what the appellant had done did not amount to a lockout but a
closure and so the substantial part of the dispute between the parties did not amount to an industrial
dispute at all. In the result, he allowed the application of the company in part and directed the tribunal to
deal only with the second part of the two questions framed by the impugned reference. There was some
modification in the order by a Division Bench of the Madras High Court. The matter then came up to this
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Court. It was held by this Court that the High Court could entertain the appellant’s petition even at the
initial stage of the proceedings before the industrial tribunal and observed:
“If the action taken by the appellant is not a lockout but is a closure, bona fide and genuine, the
dispute which the respondents may raise in respect of such a closure is not an industrial dispute at
all. On the other hand, if, in fact and in substance, it is a lockout, but the said action has adopted
the disguise of a closure and a dispute is raised in respect of such an action, it would be an
industrial dispute which industrial adjudication is competent to deal with. There is no doubt that
in law the appellant is entitled to move the High Court even at the initial stage and seek to satisfy
it that the dispute is not an industrial dispute and so the Industrial Tribunal has no jurisdiction to
embark upon the proposed enquiry.”
It was further observed:
“If the Industrial Tribunal proceeds to assume jurisdiction over a non-industrial dispute, that
can be successfully challenged before the High Court by a petition for an appropriate writ, and
the power of the High Court to issue an appropriate writ in that behalf cannot be questioned.
It is also true that even if the dispute is tried by the Industrial Tribunal, at the very
commencement, the Industrial Tribunal will have to examine as a preliminary issue the question
as to whether the dispute referred to it is an industrial dispute or not, and the decision of this
question would inevitably depend upon the view which the Industrial Tribunal may take as to
whether the action taken by the appellant is a closure or a lockout. The finding which the
Industrial Tribunal may record on this preliminary issue will decide whether it has jurisdiction to
deal with the merits of the dispute or not.”
The Court then proceeded to consider the facts of the case and the contentions raised before the
tribunal. It referred to a settlement which had been reached between the parties and embodied in a
memorandum drawn up on 6th November, 1958 under Section 12(3) of the Act. This settlement was to
operate for two and half years. The case of the respondents was that during the negotiations between the
appellant and the union in the presence of the acting Labour Minister and the Labour Commissioner, the
appellant had tried to insert a clause in the agreement in respect of the decision that the paper Andhra
Prabha would not be shifted for publication to Vijayawada during the period of the settlement and that the
workmen would be continued to be employed as before at Madras and this was objected to by the
respondent whereupon a verbal assurance was given that the business of the appellant would be carried on
at Madras for two and half years. The respondents contended that the said assurance was one of the terms
of the conditions of the respondents’ service and the transfer effected by the appellant contravened and
materially modified the said condition of service. In regard to Issue 2, the argument was that in effect the
Government had determined this issue and nothing was left for the tribunal to consider. The Court
observed that the wording of this issue was in-artistic and unfortunate and held:
“Even so, when the question of this kind is raised before the Courts, the Courts must attempt to
construe the reference not too technically or in a pedantic manner, but fairly and reasonably.
Thus construed, even the inelegant phraseology in framing the issue cannot conceal the fact that
in dealing with the issue, the main point which the tribunal will have to consider is whether the
strike of the respondents on 27th April 1959 was justified and whether the action of the appellant
which followed the said strike is a lockout or amounts to a closure … Thus, having regard to the
content of the dispute covered by Issue 2, it would not be right to suggest that the reference
precludes the tribunal from entertaining the appellant’s plea that what it did on 29th April is in
fact not a lockout but a closure. The fact that the relevant action of the appellant is called a
lockout does not mean that the tribunal must hold it to be a lockout.” - This decision has been referred to by the Tribunal as giving it jurisdiction to examine the question
as to whether there was a strike at all. Both sides have referred to this decision in support of their
respective contentions. According to the respondents, the fact that the Tribunal could go into the question
as to whether there was a lockout or a closure went to show that the Tribunal’s jurisdiction was not
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limited because of the use of the word “lockout” in the second issue so that the Tribunal was precluded
from examining the question as to whether there was a lockout at all while according to the appellants it
was because the Tribunal had always to consider whether the issue referred was an industrial dispute that
the Tribunal had to scrutinise whether the cessation of business of the company was due to a lockout
which it was competent to adjudicate upon or whether it was due to a closure which was not an industrial
dispute at all. - In our opinion, there was enough material on the record in that case to show that the company had
been trying for some time past to transfer its business elsewhere and the action of the appellant which
followed the strike on April 27, 1959 was in fact a closure and not a lockout. The facts of that case were
very special and the decision must be limited to those special facts. - In Syndicate Bank v. Workmen [(1966) 2 LLJ 194], there was a dispute between the appellant
bank and its employees with respect to C rank officers which was referred by the Central Government to
an Industrial Tribunal in the following terms:
(1) Whether the Canara Industrial and Banking Syndicate, Ltd., Udipi, is justified in
imposing the condition that only such of those workmen would be considered for appointment as
officer-trainee and promotion to probationary C rank officers who agree to be governed by the
rules of the bank applicable to such officers in respect of the scale of pay and other conditions of
service? If not, to what relief are such workmen entitled?
(2) Whether the bank is justified in imposing the condition of twelve months training as
officer-trainee before appointment as C rank officer in addition to the probation prescribed after
the appointment as C rank officer? If not, to what relief are the workmen entitled?
Before the tribunal it was contended on behalf of the appellant that the first term of reference
proceeded on the assumption that C rank officers were officers of the bank while the workmen urged that
the question whether C rank officers were workmen was implicit in the first term of reference. The
Tribunal accepted the plea of the respondents and proceeded to consider that question. It came to the
conclusion that C rank officers were workmen. On the question whether the imposition of the condition
that workmen would only be promoted as C rank officers if they accepted the condition that they would
be governed by the rules of the bank, it found against the appellant. Before this Court it was argued on
behalf of the appellant that there was no reference on the question of the status of C rank officers and the
tribunal went beyond the terms of reference when it decided that C rank officers were workmen. It was
held by this Court:
“that the first term of reference had implicit in it the question whether C rank officers were
workmen or not. If that were not so, there would be no sense in the reference, for if C rank
officers were assumed to be non-workmen, the bank would be justified in prescribing conditions
of service with respect to its officers and there would be no reference under the Act with respect
to conditions imposed by the bank on its officers who were not workmen.” - In the last mentioned case, the question whether C rank officers were workmen had to be
examined by the tribunal, for, if they were not, there could be no reference under the Industrial Disputes
Act. In the case before us, there is no such difficulty. The third and the fourth terms of reference in the
instant case are founded on the basis that there was a strike at the Delhi Cloth Mills and a sit down strike
at the Swatantra Bharat Mills and that there was a lockout declared by the management of the Delhi Cloth
Mills on 24-2-1966. On the order of reference, it was not competent to the workmen to contend before the
Tribunal that there was no strike at all; equally, it was not open to the management to argue that there was
no lockout declared by it. The parties would be allowed by their respective statement of cases to place
before the Tribunal such facts and contentions as would explain their conduct or their stand, but they
could not be allowed to argue that the order of reference was wrongly worded and that the very basis of
the order of reference was open to challenge. The cases discussed go to show that it is open to the parties
to show that the dispute referred was not an industrial dispute at all and it is certainly open to them to
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bring out before the Tribunal the ramifications of the dispute. But they cannot be allowed to challcenge
the very basis of the issue set forth in the order of reference. - On behalf of the respondents, Mr Chari put before us four propositions which according to him
the Tribunal had to consider before coming to a decision on these two issues. They were: (i)The fact that
there was a recital of dispute in the order of reference did not show that the Government had come to a
decision on the dispute; (ii) The order of reference only limited the Tribunal’s jurisdiction in that it was
not competent to go beyond the heads or points of dispute; (iii) Not every recital of fact mentioned in the
order of Government was irrebuttable; and (iv) In order to fix the ambit of the dispute it was necessary to
refer to the pleadings of the parties. No exception can be taken to the first two points. The correctness of
the third proposition would depend on the language of the recital. - So far as the fourth proposition is concerned, Mr Chari argued that the Tribunal had to examine
the pleadings of the parties to see whether there was a strike at all. In our opinion, the Tribunal must, in
any event, look to the pleadings of the parties to find out the exact nature of the dispute, because in most
cases the order of reference is so cryptic that it is impossible to cull out therefrom the various points about
which the parties were at variance leading to the trouble. In this case, the order of reference was based on
the report of the Conciliation Officer and it was certainly open to the Management to show that the
dispute which had been referred was not an industrial dispute at all so as to attract jurisdiction under the
Industrial Disputes Act. But the parties cannot be allowed to go a stage further and contend that the
foundation of the dispute mentioned in the order of reference was non-existent and that the true dispute
was something else. Under Section 10(4) of the Act it is not competent to the Tribunal to entertain such a
question. - In our opinion, therefore, the Tribunal had to examine Issues 3 and 4 on the basis that there was a
strike at the DCM unit and a sit-down strike at Swatantra Bharat Mills and that there was a lockout
declared with regard to the former as stated in the third term of reference. It was for the Tribunal to
examine the evidence only on the question as to whether the strikes were justified and legal. It then had to
come to its decision as to whether the workmen were entitled to the wages for the period of the lockout in
the Delhi Cloth Mills and for the period of the sit-down strike at the Swatantra Bharat Mills. - In the result, the preliminary objection of the Management with regard to Issues 3 and 4 succeeds
