Strawboard Manufacturing Co., Ltd vs Gutta Mill Workers' Union

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 134 of 1951

Decision Date: 17 December 1952

Coram: Mehr Chand Mahajan, Natwarlal H. Bhagwati, DAS, SUDHI RANJAN

In this matter the parties were Strawboard Manufacturing Co., Ltd, who appeared as the petitioner, and the Gutta Mill Workers’ Union, who were the respondents. The State of Uttar Pradesh intervened in the proceedings. The judgment was delivered on 17 December 1952 by a bench of the Supreme Court of India consisting of Justices Mehr Chand Mahajan, Natwarlal H. Bhagwati and the presiding Justice Das, Sudhi Ranjan. The case is reported in the 1953 AIR 95 and the 1953 Supreme Court Reports 439, and it is also cited in several later reports including E & D 1957 SC 676 at pages 20 and F 1958 SC 187 at pages 3 and 6, E & D 1958 SC 1018 at pages 17 and 20, R 1963 SC 274 at page 37, R 1970 SC 385 at page 6 and C 1984 SC 87 at page 21.

The substantive question before the Court concerned the powers conferred by the Uttar Pradesh Industrial Disputes Act, 1947, particularly section 6, and the Uttar Pradesh General Clauses Act, 1904, sections 14 and 21, to extend the time allowed for making an industrial award. On 18 February 1950 the Governor of Uttar Pradesh, exercising the authority given by sections 3 and 4 of the Industrial Disputes Act, referred an industrial dispute between the petitioner company and its employees to the Labour Commissioner, directing that the award be submitted no later than 5 April 1950. The award was actually made on 13 April 1950, beyond the prescribed deadline. Subsequently, on 26 April 1950 the Governor issued a notification extending the deadline for the award to 30 April 1950.

The Court held that, in light of the language of section 6 of the Industrial Disputes Act and because the Governor’s notification of 15 March 1951 did not contain a proviso analogous to rule 16 of that notification, the State Government possessed no authority to extend the time limit. Consequently, the adjudicator became functus officio when the original time expired, and the award made after that date was beyond jurisdiction and a nullity. The Court further observed that section 14 of the General Clauses Act did not, by its terms or necessary implication, grant the State Government power to extend the time for making an award. Moreover, although the April 26 order appeared to modify the February 18 order, the absence of a clear provision in section 21 of the General Clauses Act meant that any amendment could not operate retrospectively; therefore, the April 26 order could not give retrospective effect to the extension.

In reaching its conclusion, the Court applied the principles laid down in Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar (L.R. 18 I.A. 55). It distinguished earlier authorities such as Jetha Lal Lakshmi Chand Shah v. Amrita Lal Ojha (I.L.R. [1938] 2 Cal. 482), Lord v. Lee (L.R. 3 Q.B. 404), Dentron v. Strong (L.R. 9 Q.B. 117) and May v. Harcourt (L.R. 13 Q.B.D. 688). The judgment was delivered in the civil appellate jurisdiction, specifically in Civil Appeal No. 134 of 1951, which arose from the judgment and order dated 20 November 1950 of the Labour Appellate Tribunal, Lucknow, in Appeal No. 10 of 1950.

For the appellant, counsel appeared; for the respondent, counsel appeared; for the intervener, counsel appeared. The judgment was delivered by Justice DAS. The appeal was instituted after the Supreme Court granted special leave on 10 May 1951. The order of leave limited the appeal to a single question: whether the Government of Uttar Pradesh possessed authority to extend, after the fact, the time prescribed for making an award when the original deadline had already elapsed. The factual background was undisputed. An industrial dispute arose between the appellant company and its employees. By Labour Department Notification No 637 (ST)/XVIII-53 (ST)/50 dated 18 February 1950, the Governor of Uttar Pradesh, exercising the powers conferred by section 3 read with section 4 of the Uttar Pradesh Industrial Disputes Act, 1947 (U P Act No XXVIII of 1947), referred the dispute to the Labour Commissioner, or to a Conciliation Officer nominated by the Commissioner, for adjudication on seven specific issues. The Governor also directed the adjudicator to complete the proceedings and submit the award to the Government no later than 5 April 1950.

The Labour Commissioner, through his letter No I.M.R. 14-A, nominated Shri M. P. Vidyarthi, Regional Conciliation Officer, U P., as the adjudicator and instructed him to file the award by 25 March 1950. The Commissioner further required that, if the adjudication was unlikely to be finished within that period, the adjudicator should seek an extension of time at least one week before the stipulated date. Subsequently, by Notification No 897 (ST)/XVIII-53 (ST)/50 dated 20 March 1950, the Governor ordered the adjudicator also to decide an additional issue that had been formulated. By a further Notification No 950 (ST)/XVIII-53 (ST)/60 dated 24 March 1950, the Governor referred another additional issue for the adjudicator’s decision. The adjudicator failed to render the award by the original deadline of 5 April 1950 and instead issued the award on 13 April 1950, eight days after the prescribed date. Approximately thirteen days later, on 26 April 1950, the Labour Department issued Notification No 1247 (ST)/XVIII-53 (ST)/50, wherein the Governor, invoking the powers under section 3 read with section 4 of the Act, permitted the adjudicator to submit the award by 30 April 1950. Finally, by Notification No 1447 (ST)/XVIII-53 (ST)/50 dated 1 August 1950, the Governor, exercising authority under section 6(2) read with sections 3 and 4 of the Act, ordered that the award be enforced for a period of six months from the date of that order.

On 17 August 1950 the appellant company filed an appeal before the Labour Appellate Tribunal challenging the award dated 13 April 1950 on the ground that the award was issued after the prescribed time limit had expired. The appellant relied on the order dated 18 February 1950, paragraph (5), in which the Government directed the adjudicator to conclude the proceedings and to submit his award no later than 5 April 1950. Since the award was dated 13 April 1950, the appellant argued that the Government’s subsequent General Order numbered 1247 (ST) XVIII-53 (ST)/50, dated 26 April 1950, could not cure the defect because, under the law, an extension of the adjudicator’s deadline had to be made before the original date of 5 April 1950 in order to keep the adjudicator’s authority alive. Consequently, on the date the adjudicator made the award, namely 13 April 1950, he no longer possessed the power to make an award. The Labour Appellate Tribunal, by its decision of 20 November 1950, dismissed the appeal and made the following observations on the issue. The Tribunal held that the Government, having the authority under section 6 of the Act to fix the time limit for the award, also possessed the necessary incidental power to extend that time limit if it deemed it necessary. The Tribunal further noted that the first proviso to section 3 empowers the Provincial Government to add additional matters for adjudication, and that such additions could logically require more time than originally estimated. Accordingly, the Tribunal expressed the view that it made no difference whether the time was extended before or after the expiry of the original period. The present appeal is confined to that question, and it is supported by Dr. Tek Chand, who submitted that the adjudicator derived his authority from Notification No. 637 dated 18 February 1950. Section 6(1) provides that the adjudicator “shall, within such time as may be specified, submit its award to the State Government,” and the time specified in the order was “not later than 5 April 1950.” Upon the expiry of that time, Dr. Tek Chand argued, the adjudicator became functus officio and lost any power or authority to render the award. He acknowledged that two further issues had been added to the list of matters by the two subsequent orders, but submitted that those issues did not involve any detailed investigation of facts that would necessitate additional time for the award. Finally, the counsel contended that the Uttar Pradesh Act under consideration contained no provision granting the State Government the power to enlarge the time limit for the adjudicator’s award.

The Court observed that the statute did not give the State Government any power to lengthen the period for the adjudicator to make his award. It held that, in the circumstances, if the State Government had considered that the addition of the two new issues made the time fixed in the original notification inadequate, the proper course would have been to cancel that earlier notification and to issue a fresh notification that referred all the issues to the adjudicator and that specified a new time-frame within which the adjudicator was required to render his award. The State Government, however, did not adopt that approach. Instead, it attempted to extend the time for making the award, and it did so not only after the original deadline had elapsed but also after the award had already been submitted. Dr. Tek Chand argued that, even assuming – without admitting – that the State Government possessed the authority to extend the time before the original deadline expired, the State Government certainly lacked any authority to extend the time after the award had been made, because extending the time after the act was already completed was meaningless. He referred the Court to the decision of the Judicial Committee in Baja Har Narain Singh v. Chaudhrain Bhagwant Kuar (1), where the Privy Council held that, under the Code of Civil Procedure of 1882, a court could not extend the period for making an award after the award had already been filed. Section 514 of that Code authorised the court to grant additional time from time to time for the delivery of an award, whereas Section 521 provided that an award would be invalid unless it was made within the period allowed by the court. The Privy Council’s Lordships reasoned that, once an award was made, the power conferred by Section 514 was spent; although the court possessed the fullest power to enlarge the time while the award was not yet completed, it lost that power as soon as the award was made. To give full effect to Section 521, the Judicial Committee therefore confined the exercise of the power under Section 514 to a point in time before the award was rendered. This reasoning was relied upon by Justice Harrington, sitting singly on the Original Side of the Calcutta High Court in Shib Krishna Dawn & Co. v. Satish Chander Dutt (1), a case governed by the Code of 1908. Justice Harrington, however, overlooked the fact that paragraph 8 of the Second Schedule to the Code of 1908, which corresponded to Section 514 of the 1882 Code, expressly conferred on the court the authority to allow further time, either before or after the expiry of the period fixed for making the award.

It was observed that paragraph 15, which corresponded to section 521 of the Code of 1882, did not contain any provision stating that an award made after the prescribed time became automatically invalid. Consequently, the reasoning of the Judicial Committee in the case of Raja Narain Singh v. Chaudhrain Bhagwant Kuar (2) could not be applied to the present matter, which was governed by the Code of 1908. Because the language of the relevant provisions differed between the two Codes, the correctness of Justice Harrington’s decision was called into question by Justice Chitty, who also sat singly on the Original Side of the Calcutta High Court in Sri Lal v. Arjun Das (3).

Subsequently, a Division Bench of the same High Court, hearing an appeal from the Original Side in Jetha Lal Laxmi Chand Shah v. Amrita Lal Ojha (4), dissented from Justice Harrington’s view and held that the Court possessed the power to extend the period for making an award even after the award had actually been made. The judges in that case relied upon the precedent set in Lord v. Lee (1) and also referenced the authorities Dentron v. Strong (2) and May v. Harcourt (3), all of which were decided under section 15 of the Common Law Procedure Act, 1854 (17 & 18 Vic., c. 125). Although that English statute did not contain a provision analogous to section 521 of the 1882 Code, section 15, like section 514 of the Code of Civil Procedure of 1882 (which corresponded to paragraph 8 of the Second Schedule to the Civil Procedure Code of 1908), and like section 9 of the English Arbitration Act, 1889 (corresponding to section 12 of the Indian Arbitration Act, 1899), empowered the Court to enlarge the time for making an award from time to time. A comparable power for extending time is provided in section 148 of the Civil Procedure Code of 1908. By contrast, the Uttar Pradesh Industrial Disputes Act, 1947 contains no such provision; section 6(1) of that Act mandates that the adjudicator submit his award to the State Government “within such time as may be specified” and does not allow specification “from time to time.” The Act further limits the State Government’s ability to set a fresh period of time to those instances in which it remits the award for reconsideration under subsection (2) of section 6, since under subsection (3) the adjudicator is thereafter required to submit the reconsidered award within the time specified by the State Government.

The judgment observed that the provision enjoined the adjudicator to submit his award after reconsideration within such period as might be specified by the State Government. It further noted that even under sections 6(2) and 6(3) of the Uttar Pradesh Industrial Disputes Act, the State Government could, in the order remitting the award, designate a time within which the reconsidered award had to be filed. This authority allowed the State Government to fix a fresh period of time for the act of reconsideration and for filing the reconsidered award, as illustrated by the cited authorities (1) (1868) L.R. 3 Q.B. 404, (2) (1874) L.R. 9 Q.B. 11 7, and (3) I.P.R. 13 Q.B.D. 688. However, the court emphasized that such power did not extend to enlarging the time originally fixed for making the initial award. Consequently, except where the State Government, under section 6(2), remitted the award for reconsideration, it possessed no power to specify a fresh period of time, and it certainly lacked any power to extend the time for the initial award prescribed in section 6(1). In exercising the powers conferred by clauses (b), (c), (d) and (g) of section 3 together with section 8 of the Uttar Pradesh Industrial Disputes Act, 1947, the Governor issued an order embodied in Notification No. 615 (LL)/XVIII-7 (LL)-1951 dated 15 March 1951. The proviso to rule 16 of that order purported to authorise the State Government to extend from time to time the period within which the Tribunal or the adjudicator was to pronounce the decision. The court observed, however, that those rules were not in force at the material time of the present case. Counsel for the respondent and counsel for the State of Uttar Pradesh did not refer to any comparable rule that was operative in 1950. In view of the language of section 6 of the Uttar Pradesh Act and the absence of a rule such as the proviso to rule 16, the court concluded that the State Government had no authority to extend the time and that the adjudicator became functus officio upon the expiry of the time specified in the original order of reference. Accordingly, an award not made within that period had to be held to be without jurisdiction and a nullity, as contended by Dr. Tek Chand. Counsel for the respondents then referred to section 14 of the Uttar Pradesh General Clauses Act, 1904, which provides that any power conferred on the State Government by a Uttar Pradesh Act may be exercised from time to time as occasion requires. The court noted that sections 3 and 4 of the Uttar Pradesh Industrial Disputes Act, 1947, indeed confer power on the State Government to refer disputes to an adjudicator for decision, and that section 6(1) may be read as empowering the State Government to specify the time within which the adjudicator, to whom an industrial dispute is referred, must submit his award. The combined effect of section 14 of the General Clauses Act and section 6(1) of the Industrial Disputes Act was therefore considered in the court’s analysis.

It was submitted that the combination of the U.P. General Clauses Act and section 6(1) of the U.P. Industrial Disputes Act, 1947 required the adjudicator to deliver his report “within such time as may from time to time be specified,” and that, because of this wording, the principles laid down in the English decisions cited earlier should apply to the present dispute. The Court could not accept that argument. The Court explained that under section 14 of the U.P. General Clauses Act the State Government may exercise the powers conferred on it by sections 3, 4 and 6 of the Industrial Disputes Act, which means that the Government may, from time to time, issue orders referring a dispute to an adjudicator and, in each such order, may specify the period within which the adjudicator must render his award. However, the power to specify a time limit does not, and indeed cannot, include a power to extend a time limit that has already been fixed in an earlier order. The legislative history, as reflected in the various statutes mentioned, shows that the legislature deliberately provides a separate power to extend time when it wishes to do so. There is no inherent authority vested in the Court, and certainly no inherent authority in the Executive, to extend that period. Consequently, section 14 of the General Clauses Act, either expressly or by necessary implication, does not give the State Government any power to lengthen the deadline, and the Respondents could not rely on that provision for support.

The intervening State of Uttar Pradesh pointed to section 21 of the U.P. General Clauses Act, 1904, arguing that the order dated 26 April 1950 should be treated as an amendment or modification, within the meaning of that section, of the earlier order dated 18 February 1950. The Court acknowledged that the later order appears on its face to correct the earlier one, but observed that section 21 contains no explicit provision allowing the power of amendment or modification granted to the Government to operate retrospectively. Therefore, an order that is merely an amendment or modification cannot, by virtue of section 21, have retrospective effect. If the amendment operates only prospectively, that is, from the date of the amendment itself, it cannot validate an award that was rendered after the expiry of the time limit set by the original order and before the date of the amending order, a period during which the adjudicator was functus officio and possessed no jurisdiction to act. Accordingly, the Court found that the Respondents could not derive any support from section 21 of the General Clauses Act. As a result, the appeal was allowed, the award was declared null and void, and the Court ordered accordingly.

The Court observed that, taking into account the particular facts and circumstances that had arisen in this matter, it would not make any order as to costs, meaning that neither the appellant nor the respondent would be directed to pay the other's legal expenses. Accordingly, the Court pronounced that the appeal was allowed, thereby setting aside the decision that had been contested. The appellant was represented before the Court by an appointed agent named Ganpat Rai. The respondent’s representation was undertaken by an agent identified as S. D. Sekhari. In addition, the intervener in the proceedings was represented by an agent called C. P. Lal. No further directions regarding costs were issued, and the judgment was concluded on the basis of the allowance of the appeal and the identification of the persons who acted as agents for each party.