Minerva Mills Ltd vs Their Workers

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

Court: Supreme Court of India

Case Number: Civil Appeals Nos. 140 to 143, 156, 157 of 1953

Decision Date: 8 October, 1953

Coram: Mehr Chand Mahajan, B.K. Mukherjea, B. Jagannadhadas

In the case titled Minerva Mills Ltd. versus Their Workers, the Supreme Court of India delivered its judgment on the eighth day of October in the year 1953. The opinion was authored by Justice Mehr Chand Mahajan, who was joined in the bench by Justices B. K. Mukherjea and B. Jagannadhadas. The proceeding was instituted by Minerva Mills Ltd. as the petitioner, seeking relief against the collective body described simply as Their Workers, who were named as the respondents. The official citation of the judgment appears in the All India Reporter at volume 1953, page 505, and also in the Supreme Court Reporter at 1954, page 465. The decision is further indexed in the editorial reports E&D 1958 SC1018 on pages sixteen and nineteen. The substantive issue before the Court concerned the interpretation and application of the Industrial Disputes Act, 1947, particularly the provisions contained in sections seven, eight and ten, which deal with the power of a State Government to constitute an industrial tribunal for a prescribed period, to replace such tribunal at the expiry of that period, and to determine the jurisdiction of the tribunal over disputes referred to it.

The headnote of the decision set out a concise statement of the legal principle that the Court considered essential to resolve the dispute. It observed that Section seven of the Industrial Disputes Act, 1947, endows the appropriate Government – that is, the Government of the State in which the industrial dispute arises – with ample authority to constitute an industrial tribunal for a fixed term of years, months or days as the Government may deem fit. Furthermore, the headnote clarified that the same statutory power permits the Government, upon the lapse of the initially fixed term, to constitute a fresh tribunal. This newly constituted body is authorised not only to hear fresh references but also to take up and dispose of all references that had previously been made to the original tribunal and that remained unresolved at the time of its dissolution. In other words, the statutory scheme ensures continuity in the adjudication process so that no dispute is left without a competent forum merely because the original tribunal’s term has expired. The Court therefore examined whether the State Government had acted within the scope of this power in the circumstances presented by the present case.

The matter before the Supreme Court arose on appeal from several civil appeals numbered 140, 141, 142, 143, 156 and 157, all of which were filed in the year 1953. The Court exercised its appellate jurisdiction over these appeals after granting special leave under an order dated the twenty-third of April, 1953. The special leave allowed the Supreme Court to review the judgments rendered on the nineteenth of December, 1952, by the Labour Appellate Tribunal of India, Third Bench, located in Madras. Those earlier judgments pertained to appeals numbered 245/52, 246/52, 247/52 and 248/52, which involved the same parties and the same industrial disputes that were now before the Supreme Court. For the petitioners, who were the appellants in each of the six civil appeals, the Solicitor-General for India, C. K. Daphtary, appeared with the assistance of I. B. Dadachanji. The respondents in appeals 140 to 143 were represented by counsel identified as S. Mohan Kumaramangalam, while the respondents in appeals 156 and 157 were represented by counsel identified as H. J. Umrigar. The Supreme Court therefore had before it a consolidated matter involving several appeals, each challenging the correctness of the Labour Appellate Tribunal’s findings regarding the constitution and jurisdiction of the industrial tribunals that had been set up by the Government of Mysore.

The factual background began with a notification issued by the Government of Mysore on 15 June 1951, invoking the powers granted by Section 7 of the Industrial Disputes Act, 1947, to create an Industrial Tribunal for a term of one year. The Tribunal was constituted to consist of a chairman and two members, and it was charged with adjudicating industrial disputes in accordance with the provisions of the Act. The persons appointed to the Tribunal were: Chairman Rajadharmaprasakta T. Singaravelu Mudaliar; Member Janab Mohamed Sheriff; and Member Sri S. Rangaramiah. Under Section 10(1)(c) of the Act, two disputes involving the management and workers of Minerva Mills Ltd., Bangalore, and two disputes involving the management and workers of Mysore Spinning and Manufacturing Co. Ltd., Bangalore, were referred to this Tribunal, together with several other disputes. By the date on which the one-year term expired, 15 June 1952, the Tribunal had disposed of only five of the twenty-two disputes that had been referred. In the four disputes that are the subject of the present appeal, the Tribunal had merely framed the issues and had not proceeded to record any evidence. Consequently, on 27 June 1952, the Government issued a second notification constituting a new Tribunal for the adjudication of those unresolved disputes, and, acting under Section 10(1)(c) of the Act, referred all the pending disputes to the newly constituted Tribunal.

In this case the disputes that the first tribunal had left unresolved were transferred to a newly constituted tribunal by a second notification that was not worded very clearly, and the wording has attracted considerable comment from the courts below and also from this Court. The notification reads as follows: “Whereas under Notification No. L.S. 1075-L.W. 68-51-2, dated 15th June, 1951 an Industrial Tribunal for the adjudication of industrial disputes in accordance with the provisions of the Industrial Disputes Act, 1947, was constituted for a period of one year, And whereas the said period of one year has expired creating a vacancy in the office of both the chairman and the two members, namely, Chairman: Sri B. R. Ramalingiah. Members: Janab Mohamad Sheriff. Sri S. Rangaramiah. Now therefore in exercise of the power conferred under sections 7 and 8 of the Industrial Disputes Act, 1947, H.H. the Maharaja of Mysore is hereby pleased to constitute an Industrial Tribunal for adjudication of industrial disputes in the Mysore State in accordance with the provisions of the Act and further to appoint the following persons as chairman and members thereof Chairman: Sri B. R. Ramalingiah. Members: Janab Mohamad Sheriff. Sri K. Shamaraja Iyengar. Under section 10 (1) (c) of the Industrial Disputes Act, 1947, H.H. the Maharaja is pleased to direct that the tribunal now constituted under this notification shall hear and dispose of all the references made to the previous tribunal constituted under the notification of 15th June, 1951, and which have remained undisposed of on 15th June, 1952.”

When the second tribunal began to hear the four disputes that formed the subject of these appeals, the employers raised several preliminary objections concerning the tribunal’s jurisdiction. Their principal contentions were threefold: first, that the one-year time limit fixed for the life of the first tribunal was unauthorized and illegal, so the first tribunal continued to exist despite the expiry of that period; second, that the Government could not withdraw the disputes from the first tribunal while its members were still available to perform their duties, and consequently section 8 did not apply to the facts of this case; and third, that even if the newly constituted tribunal possessed jurisdiction, the trial could not commence from the point where the first tribunal had left the matters, but had to start anew. The employees opposed each of these propositions. They argued that the Government was fully competent to create one or more Industrial Tribunals under section 7 and that it was permissible to prescribe a limited period of operation for such tribunals. They further maintained that the notification dated 27th June 1952 was valid under both sections 7 and 8 of the Act, that the second tribunal had been properly constituted, and that it possessed jurisdiction over the disputes referred to it under section 10(1)(c) of the Act.

In this case the second Industrial Tribunal rejected the preliminary objections that the employers had raised and held that the Government possessed authority to constitute the first tribunal for a limited period, that the second tribunal had been properly constituted, and that the references made to it were valid and could be pursued from the point at which the first tribunal had left them. The employers responded to this order by filing appeals before the Labour Appellate Tribunal, identified as Appeals Nos. 245 to 248 of 1952, and they simultaneously instituted writ applications under article 226 of the Constitution of India before the High Court, recorded as C.P. Nos. 79 and 80 of 1952-53, seeking writs of prohibition to stop the second tribunal from adjudicating the four disputes that formed the subject of the appeals. Because the questions presented for determination in the appeals and in the writ applications were substantially the same, the High Court adjourned the hearing of the writ applications until the Labour Appellate Tribunal had decided the appeals. The Labour Appellate Tribunal, by an order dated 19 December 1952, dismissed all four of the appeals, and consequently the High Court of Mysore, by an order dated 25 March 1953, dismissed the writ applications while granting the employers a certificate of leave to appeal to this Court. Following those developments the employers moved the Supreme Court seeking special leave to appeal against the Labour Appellate Tribunal’s order in the four appeals, and the Supreme Court granted such special leave by an order dated 23 April 1953. As a result, before this Court now stand four appeals against the order of the Labour Appellate Tribunal, recorded as Civil Appeal Nos. 140 to 143 of 1953, together with two appeals arising from the High Court’s refusal to entertain the employers’ article 226 applications, recorded as Civil Appeal Nos. 156 and 157 of 1953. Since all of these appeals raise a common question of law, they can be disposed of by a single judgment. Counsel appearing for the employers argued that the four disputes between the employers and the employees, which had been referred to the Industrial Tribunal constituted by the notification of 15 June 1951, remained pending before that tribunal and that only that original tribunal had the authority to adjudicate and render awards on those disputes. Counsel further asserted that the second tribunal, created by the notification of 27 June 1952, lacked jurisdiction to entertain the references or to issue any awards concerning them. It was contended that the Industrial Disputes Act does not empower the Government to appoint a tribunal for a limited duration; rather, the Act only enables the Government to constitute a tribunal and to refer specific disputes to it. The argument was advanced that the provisions of the Act implicitly indicate that once a tribunal is appointed it may cease to function only after it has exhausted the references made to it, that is, after it has rendered its award. It was also urged that the Government possesses no authority, once it has made a reference under section 10 of the Act, to withdraw that reference from the original tribunal and transfer it to another tribunal. It was suggested that the members of the first tribunal should be directed to hear those references and to give their award.

It was submitted that a reference to an Industrial Tribunal could not be withdrawn by the Government until the Tribunal had fully exhausted its jurisdiction, that is, until it had delivered its award; this submission was supported by a citation to the Supreme Court report (6-83 S.C. India/59). Further, it was urged that once the Government had made a reference under section ten of the Industrial Disputes Act, it possessed no authority to retract that reference from the Tribunal and assign it to another Tribunal, and counsel suggested that the members of the original Tribunal should be directed to continue hearing the pending references and to render the award themselves. In the Court’s opinion, none of these contentions could be sustained on the basis of the statutory provisions. Section seven of the Act provides: “The appropriate Government may constitute one or more Industrial Tribunals for the adjudication of industrial disputes in accordance with the provisions of this Act. (2) A Tribunal shall consist of such number of independent members as the appropriate Government may think fit to appoint, and where the Tribunal consists of two or more members, one of them shall be appointed as the chairman thereof ….” Section eight further provides that if, for any reason, a vacancy occurs in the office of the chairman or any other member of a court or Tribunal, the appropriate Government shall, in the case of a chairman, and may, in the case of any other member, appoint another independent person in accordance with the provisions of section six or section seven, as the case may be, to fill the vacancy, and the proceedings may be continued before the court or the Tribunal so reconstituted. These provisions do not limit or restrict the powers of the Government and do not forbid the Constitution of a Tribunal for a limited period or for the adjudication of a limited number of disputes. By their very nature and purpose, Industrial Tribunals are not intended to be permanent bodies; they are created only when industrial disputes arise and normally continue to function until the disputes referred to them are resolved. Nevertheless, this circumstance does not preclude the Government from fixing a time limit for the existence of a Tribunal so that it may function expeditiously and avoid unnecessary prolongation. Mr. Daphtary, however, contended that although the language of section seven appears broad enough to permit the Government to constitute Tribunals for any period it deems appropriate, this wide construction must be read in light of other provisions of the Act. He referred specifically to section four, which deals with conciliation officers; sub-section (2) of section four provides that a conciliation officer may be appointed for a specified area or for specified industries in a specified area, or for one or more specified industries, and may be appointed either permanently or for a limited period. He argued that the nature of the duties of conciliation officers, which can be either permanent or temporary, indicated a legislative intent that might limit the Government’s discretion in constituting Industrial Tribunals.

The Court observed that, unlike the duties of conciliation officers, which are expressly provided to be either permanent or for a limited period, the statute does not convey a similar intention regarding Industrial Tribunals. Consequently, it could not be deduced that the legislature intended to restrict the Government’s authority to constitute tribunals on an ad-hoc basis for a particular dispute. The Court noted that the absence of any limitation on the Government’s power indicates that the executive may establish tribunals for any duration it deems appropriate, whether for a fixed term, for a specific case, or for a group of cases, depending on the circumstances prevailing in a given area or situation. The Court then examined sections 15 to 20 of the Act, which impose the requirement that once a dispute is referred to a tribunal, the adjudication must be completed by that tribunal alone and that the tribunal’s award must be the sole award. Section 15 obliges the tribunal to conduct its proceedings expeditiously and, as soon as practicable after concluding them, to submit its award to the appropriate Government. The Court found no basis in these provisions for supporting Mr Daphtary’s argument that the Government’s discretion is curtailed. Section 20(3) states that “proceedings before a tribunal shall be deemed to have commenced on the date of the reference of dispute for adjudication and such proceedings shall be deemed to have concluded on the date on which the award becomes enforceable under section 17-A.” This clause merely fixes the temporal markers for the beginning and end of the tribunal’s proceedings and does not limit the Government’s power to appoint a tribunal for a limited period. The Court also considered section 33, which mandates that the conditions of service of workmen remain unchanged during the pendency of adjudication proceedings. In the Court’s view, both the Labour Appellate Tribunal and the High Court were correct in holding that none of these provisions imply that section 7 inherently prohibits the Government from withdrawing a dispute once it has been referred to a tribunal or from creating a tribunal for a limited term. Accordingly, under section 7, the appropriate Government retains ample authority to constitute a tribunal for a specified duration, with the understanding that the tribunal’s existence will automatically terminate upon the expiry of that period.

In this case, the Court observed that Mr Daphtary had argued that the notification which appointed the first tribunal for a period of one year was illegal and that, consequently, the first tribunal should continue to exist. The Court found that this argument lacked legal force and could not be upheld. The Court further noted that Mr Daphtary contended the Government was not empowered to withdraw the dispute that had been referred to the first tribunal while the members of that tribunal remained available, and that the Government could not transfer the dispute to a second tribunal. The Court examined this additional contention and concluded that it also could not be sustained. The reasoning of the Court was that the statutory provisions allowed the Government to appoint a tribunal for a limited duration and to replace it when necessary, regardless of the continued availability of the original members. Accordingly, the Court held that the Government’s action in withdrawing the dispute from the first tribunal and appointing a second tribunal did not violate any legal requirement. By rejecting both of Mr Daphtary’s submissions, the Court affirmed that the appointment of the first tribunal for one year was valid and that the subsequent replacement of that tribunal was within the Government’s lawful authority.