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Full Case Details
PATANJALI SASTRI, C.J.
- The first respondent raised a preliminary objection before the Magistrate that the latter had no
jurisdiction to proceed with the enquiry because the award on which the prosecution was based was ultra
vires and void on the ground that the reference to the Industrial Tribunal which resulted in the award was
not made by the Government in accordance with the requirements of Section 10 of the Act. As the
Magistrate refused to deal with the abjection as a preliminary point, the first respondent applied to the
High Court under Article 226 of the Constitution for a writ of certiorari to quash the proceeding pending
before the Magistrate. The application was heard in the first instance by a Single Judge who referred the
matter to a Division Bench in view of the important questions involved, and it was accordingly heard and
decided by Govinda Menon and Basheer Ahmed Sayeed, JJ. who upheld the objection and quashed the
proceeding by their order dated 15th November, 1950. From that order the State of Madras has preferred
this appeal.
- The proceeding arose out of a charge-sheet filed by the police against
the first respondent for an offence under Section 29 of the Industrial Disputes Act, 1947. The charge was
that the first respondent failed to implement certain terms of an award dated 15th December, 1947, made
by the Industrial Tribunal, Madras, appointed under the Act and thereby committed a breach of those
terms which were binding on him.
- The second respondent, the South Indian Cinema Employees’Association (hereinafter referred to as
the Association) is a registered trade union whose members are employees of various cinema companies
carrying on business in the State of Madras. Among these are the 24 cinema houses operating in the city
of Madras, including the “Prabhat Talkies”. On 8th November, 1946, the Association submitted to the
Labour Commissioner of Madras, who had also been appointed as the Conciliation Officer under the Act,
a memorandum setting forth certain demands against the employers for increased wages and dearness
allowance, annual bonus of three months’ wages, increased leave facilities, provident fund, and adoption
of proper procedure in imposing punishment and requesting the officer to settle the disputes as the
employers were unwilling to concede the demands. After meeting the representatives of the employees
and the employers, the Labour Commissioner suggested on 28th April, 1947, certain “minimum terms”
which he invited the employers and the union officials to accept. The managers of six cinema companies
in the city including “Prabhat Talkies” agreed to accept the terms but the managements of other
companies did not intimate acceptance or non-acceptance. It would appear that, in the meantime, a
meeting was convened on 22nd February, 1947, of the employees of four cinema companies including
“Prabhat Talkies”. Ninety-four out of 139 workers attended the meeting and resolutions were passed to
the effect that no action need be taken about the demands of the Association as the managements of those
companies agreed to some improvement in the matter of wages and leave facilities and promised to look
into the workers’ grievances if they were real. But as the terms suggested by the Labour Commissioner
were not accepted by all the employers, the representatives of the Association met that officer on 13th
May, 1947, and reported that the Association had decided to go on strike on any day after 20th May,
1947, if their demands were not conceded. As the conciliation proceedings of the Labour Commissioner
thus failed to bring about a settlement of the dispute, he made a report on 13th May, 1947, to the State
Government as required by Section 12(4) of the Act stating the steps taken by him to effect a settlement
and why they proved unsuccessful. In that report, after mentioning the minimum terms suggested by him
and enumerating the ten demands put forward by the employee, the Labour Commissioner stated as
follows:
“As the employers have not accepted even the minimum terms suggested by me and as the
employees are restive, I apprehend that they may strike work at anytime. I therefore suggest that
the above demands made by the workers may be referred to an Industrial Tribunal for
adjudication. I have advised the workers to defer further action on their notice pending the orders
of Government,”
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and he concluded by suggesting the appointment of a retired District and Sessions Judge as the sole
Member of the Special Industrial Tribunal “to adjudicate on this dispute”. - Thereupon the Government issued the GOMS No. 2227 dated 20th May, 1947, in the following
terms:
“Whereas an industrial dispute has arisen between the workers and managements of the
cinema talkies in the Madras city in respect of certain matters;
And whereas in the opinion of His Excellency the Governor of Madras, it is necessary to
refer the said industrial dispute for adjudication;
Now, therefore, in exercise of the powers conferred by Section 7(1) and (2) read with
Section 10(1)(c) of the Industrial Disputes Act, 1947 His Excellency the Governor of Madras
hereby constitutes an Industrial Tribunal consisting of one person, namely, Sri Diwan Bahadur
K.S. Ramaswami Sastri, Retired District, and Sessions Judge, and directs that the said
industrial dispute be referred to that tribunal for adjudication.
The Industrial Tribunal may, in its discretion settle the issues in the light of a preliminary
enquiry which it may hold for the purpose and thereafter adjudicate on the said industrial
dispute.
The Commissioner of Labour is requested to send copies of the order to the managements
of cinema talkies concerned.” - The Tribunal sent notices to all the 24 cinema companies in the city and to the Association calling
upon them to file statements of their respective cases and to appear before it on 7th July, 1947. Pleadings
were accordingly filed on both sides and the Tribunal framed as many as 22 issues of which Issue (3) is
material here and runs thus:
“Is there a dispute between the managements of the city theatres and their respective employees
justifying the reference by the Government to the Industrial Tribunal for adjudication? Whether
such an objection is tenable in law?” - It appears to have been claimed on behalf of some of these companies including “Prabhat Talkies”
that so far as they were concerned there was no dispute between the management and their employees and
therefore they should not be included in the reference or the award. The Tribunal repelled this argument
observing:
“That even if some of the theatres have got a staff contented with their lot there is a substantial
dispute in the industry taken as a whole. After I arrive at my decision about the basic wages,
increments, dearness allowance etc. the same will bind the industry as a whole in the city of
Madras if the Government accepts and implements my award.” - The Tribunal accordingly held that none of the cinema companies should be “removed from the
ambit of this industrial dispute and adjudication”. It also found as a matter of fact that “the idyllic picture
of industrial peace and contentment” put forward by the first respondent company was not justified by the
evidence. Issue 3 was thus found for the Association. The Tribunal finally passed its award on 15th
December, 1947, which was confirmed by the Government on 13th February, 1948, and was declared
binding on the workers and the managements with effect from 25th February, 1948, the date of its
publication in the Fort St. George Gazette, for a period of one year from that date. It is alleged that the
first respondent failed to implement certain provisions of the award when their implementation was due
and thereby committed an offence punishable under Section 29 of the Act. - No prosecution, however, was instituted till 24th April, 1950, as, in the meanwhile, certain
decisions of the Madras High Court tended to throw doubt on the validity of references made in general
terms without specifying the particular disputes or the groups of workers and managements between
whom such disputes existed, and legislation was considered necessary to validate awards passed on such
references. Accordingly the Industrial Disputes (Madras Amendment) Act, 1949, was passed on 10th
April, 1949, purporting to provide, inter alia, that all awards made by any Industrial Tribunal constituted
before the commencement of that Act shall be deemed to be valid and shall not be called in question in
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any court of law on the ground that the dispute to which the award relates was not referred to the Tribunal
in accordance with the provisions of the Industrial Disputes Act, 1947 (Section 5). It also purported to
validate certain specified awards including “the award in the disputes between the managements of
cinema theatres and workers” (Section 6), which obviously refers to the award under consideration in
these proceedings. - In support of his application to the High Court the first respondent herein raised three contentions.
First, the Government had no jurisdiction to make the reference in question as there was no dispute
between the management and workers of “Prabhat Talkies” and, therefore, the reference and the award
insofar as they related to the first respondent were ultra vires and void; secondly, in any case the
notification by the Government purporting to refer an industrial dispute to the Tribunal was not competent
under the Act, inasmuch as it did not refer to any specific disputes as arising for adjudication and did not
mention the companies or firms in which the disputes are said to have existed or were apprehended; and
thirdly, the Madras Amendment Act was unconstitutional and void under Section 107 of the Government
of India Act, 1935, being repugnant to the provisions of the Central Industrial Disputes Act, 1947, and
also void under Article 13(1) read with Article 14 of the Constitution as being discriminatory in character.
The learned Judges, by separate but concurring judgments, upheld these contentions and issued a
certificate under Article 132(1) of the Constitution as the case raised substantial questions of law
regarding the interpretation of the Constitution. As we considered that the contentions of the appellant on
the first two points must prevail, we did not hear arguments on the constitutional issue. - Before dealing with the main contentions of the parties, we may dispose of a minor point raised
by Mr Krishnaswami Aiyangar, for the first time before us, namely, that the prosecution of the first
respondent for the alleged breach of some of the terms of the Tribunal’s award is unsustainable inasmuch
as it was instituted after the expiry of the award. In support of this argument learned counsel invoked the
analogy of the cases where it has been held that a prosecution for an offence under a temporary statute
could not be commenced, or having been commenced when the statute was in force, could not be
continued after its expiry. Those decisions have no application here. The first respondent is prosecuted for
an offence made punishable under Section 29 of the Act which is a permanent statute and when he
committed the alleged breach of some of the terms of the award, which was in force at the time, he
incurred the liability to be prosecuted under the Act. The fact that the award subsequently expired cannot
affect that liability. - On behalf of the appellant, the Advocate-General of Madras urged that the question whether there
existed an industrial dispute when the Government made the reference now under consideration was an
issue of fact which the High Court ought not to have found in the negative at this preliminary stage before
evidence was recorded by the trial court. He submitted, however, that, on the facts already appearing on
the record, there could be no reasonable doubt that an industrial dispute did exist at the relevant time. We
are inclined to agree. The ten demands set forth in the Labour Commissioner’s letter of 13th May, 1947,
which were not agreed to by the managements of the 24 cinema theatres in Madras clearly constituted
industrial disputes within the meaning of the Act. Basheer Ahmed Sayeed, J., with whom the other
learned Judge concurred, says:
“There is nothing in the letter of the Commissioner which would indicate that these demands
made by the South Indian Cinema Employees’Association were referred to the respective owners
of the cinema houses in the city of Madras as a body or to any of them individually.” - This, we think, is based on a misapprehension of the true facts. The demands were identical with
those mentioned in the Association’s memorandum originally submitted on 8th November, 1946, and
they formed the subject of discussion with the representatives of the cinema companies in the city in the
course of the conciliation proceedings. That memorandum, which was not made part of the record in the
court below, was produced here, and Mr Krishnaswami Aiyangar was satisfied that the demands referred
to in that memorandum were the same as those mentioned in the Labour Commissioner’s letter of 13th
May, 1947, of which all the employers were thus fully aware. Nor is it correct to say “that the disputes, if
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any, which might have existed between the workmen of the petitioner’s cinema and the petitioner himself
had been settled by the petitioner’s ready and willing acceptance of the terms suggested by the
Commissioner”. The terms accepted by the first respondent were what the Commissioner called “the
minimum terms” and were by no means the same as the demands put forward by the Association, which
were never accepted by the Association. The Commissioner’s letter of the 13th May, 1947, made this
clear. - But, in truth, it was not material to consider whether there was any dispute outstanding between
the first respondent and his employees when the Government made the reference on 20th May, 1947. The
learned Judges appear to have assumed that the disputes referred to a tribunal under Section 10(1)(c) of
the Act must, in order that the resulting award may be binding on any particular industrial establishment
and its employees, have actually arisen between them. “Analysing the order of reference of the Madras
Government now under consideration,” the learned Judges observe, “it is obvious that there is no mention
of the existence of any dispute between the petitioner (the first respondent herein) and his workmen…. In
fact there was no dispute to be referred to a Tribunal so far as this petitioner is concerned. If, therefore,
there was no jurisdiction to make any reference, it follows that the whole reference and the award are both
invalid and not binding on the petitioner”. This view gives no effect to the words “or is apprehended” in
Section 10(1). In the present case, the Government referred “an industrial dispute between the workers
and managements of cinema talkies in Madras city in respect of certain matters.” As pointed out in the
Labour Commissioner’s letter to the Government, there were 24 cinema companies in Madras, and the
Association, which, as a duly registered trade union, represented their employees, put forward the
demands on behalf of the employees of all the cinema houses in the city. Fifteen out of 43 workers of the
“Prabhat Talkies” were admittedly members of the Association which thus figured as one of the parties to
the dispute. In that situation, the Government may have thought, without a close examination of the
conditions in each individual establishment, that disputes which affected the workmen collectively existed
in the cinema industry in the city and that, even if such disputes had not actually arisen in any particular
establishment, they could, having regard to their collective nature, well be apprehended as imminent in
respect of that establishment also. It is not denied that notices were sent by the Tribunal to all the 24
companies and they all filed written statements of their case in answer to the demands made by the
Association on behalf of the employees. In these circumstances, it is idle to claim that the Government
had no jurisdiction to make the reference and that the award was not binding on the respondent’s
organisation. The latter was clearly bound by the award under Section 18 of the Act. - It was next contended that the reference was not competent as it was too vague and general in its
terms containing no specification of the disputes or of the parties between whom the disputes arose. Stress
was laid on the definite article in clause (c) and it was said that the Government should crystallise the
disputes before referring them to a Tribunal under Section 10(1) of the Act. Failure to do so vitiated the
proceedings and the resulting award. In upholding this objection, Govinda Menon, J., who dealt with it in
greater detail in his judgment, said, “Secondly, it is contended that the reference does not specify the
dispute at all. What is stated in the reference is that an industrial dispute has arisen between the workers
and the management of the cinema talkies in the city of Madras in respect of certain matters. - This is, however, not to say that the Government will be justified in making a reference under
Section 10(1) without satisfying itself on the facts and circumstances brought to its notice that an
industrial dispute exists or is apprehended in relation to an establishment or a definite group of
establishments engaged in a particular industry, and it is also desirable that the Government should,
wherever possible, indicate the nature of the dispute in the order of reference. But, it must be remembered
that in making a reference under Section 10(1) the Government is doing an administrative act and the fact
that it has to form an opinion as to the factual existence of an industrial dispute as a preliminary step to
the discharge of its function does not make it any the less administrative in character. The court cannot,
therefore, canvas the order of reference closely to see if there was any material before the Government to
support its conclusion, as if it was a judicial or quasi-judicial determination. No doubt, it will be open to
a party seeking to impugn the resulting award to show that what was referred by the Government was not
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an industrial dispute within the meaning of the Act, and that, therefore, the Tribunal had no jurisdiction to
make the award. But if the dispute was an industrial dispute as defined in the Act, its factual existence and
the expediency of making a reference in the circumstances of a particular case are matters entirely for the
Government to decide upon, and it will not be competent for the Court to hold the reference bad and
quash the proceedings for want of jurisdiction merely because there was, in its opinion, no material before
the Government on which it could have come to an affirmative conclusion on those matters. The
observations in some of the decisions in Madras do not appear to have kept this distinction in view. - Moreover, it may not always be possible for the Government, on the material placed before it, to
particularise the dispute in its order of reference, for situations might conceivably arise where public
interest requires that a strike or a lock-out either existing or imminent should be ended or averted without
delay, which, under the scheme of the Act, could be done only after the dispute giving rise to it has been
referred to a board or a tribunal [vide Sections 10(3) and 23]. In such cases the Government must have the
power, in order to maintain industrial peace and production, to set in motion the machinery of settlement
with its sanctions and prohibitions without stopping to enquire what specific points the contending parties
are quarrelling about, and it would seriously, detract from the usefulness of the statutory machinery to
construe Section 10(1) as denying such power to the Government. We find nothing in the language of that
provision to compel such construction. The Government must, of course, have sufficient knowledge of
the nature of the dispute to be satisfied that it is an industrial dispute within the meaning of the Act, as, for
instance, that it relates to retrenchment or reinstatement. But, beyond this no obligation can be held to lie
on the Government to ascertain particulars of the disputes before making a reference under Section 10(1)
or to specify them in the order. - This conclusion derives further support from clause (a) of Section 10(1) which provides in the
same language for a reference of the dispute to a board for promoting a settlement. A board is part of the
conciliation machinery provided by the Act, and it cannot be said that it is necessary to specify the dispute
in referring it to such a body which only mediates between the parties who must, of course, know what
they are disputing about. If a reference without particularising the disputes is beyond cavil under clause
(a), why should it be incompetent under clause (c)? No doubt, the Tribunal adjudicates, whereas the
Board only mediates. But the adjudication by the Tribunal is only an alternative form of settlement of the
disputes on a fair and just basis having regard to the prevailing conditions in the industry and is by no
means analogous to what an arbitrator has to do in determining ordinary civil disputes according to the
legal rights of the parties. Indeed, this notion that a reference to a tribunal under the Act must specify the
particular disputes appears to have been derived from the analogy of an ordinary arbitration. The scope of
adjudication by a Tribunal under the Act is much wider and it would involve no hardship if the reference
also is made in wider terms provided, of course the dispute is one of the kind described in Section 2(k)
and the parties between whom such dispute has actually arisen or is apprehended in the view of the
Government are indicated either individually or collectively with reasonable clearness. The Rules framed
under the Act provide for the Tribunal calling for statements of their respective cases from the parties and,
the disputes would thus get crystallised before the Tribunal proceeds to make its award. On the other hand
it is significant that there is no procedure provided in the Act or in the Rules for the Government
ascertaining the particulars of the disputes from the parties before referring them to a Tribunal under
Section 10(1). - In view of the increasing complexity of modern life and the interdependence of the various sectors
of a planned national economy, it is obviously in the interest of the public that labour disputes should be
peacefully and quickly settled within the framework of the Act rather than by resort to methods of direct
action which are only too well calculated to disturb the public peace and order and diminish production in
the country, and courts should not be astute to discover formal defects and technical flaws to overthrow
such settlements. - In the result we set aside the order of the High Court and dismiss the first respondent’s petition.
