British India Corporation Ltd. And Ors. vs The Industrial Tribunal, Punjab

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

Court: supreme-court

Case Number: Not extracted

Decision Date: 12 September 1956

Coram: Bhagwati

The Supreme Court of India heard an appeal with special leave filed by British India Corporation Limited and others against a decision of the Punjab High Court. The High Court had dismissed, at the preliminary stage, the petition filed by the appellant seeking relief under Article 226 of the Constitution. The judgment of the High Court was rendered on 26 August 1954. The petition in the High Court was filed on 25 August 1954 and asked the Court to issue three writs: a writ of prohibition to stop the Industrial Tribunal, respondent 1, from proceeding with a third reference; a writ of certiorari directing the Tribunal to transmit the case records and to set aside the reference; and a writ of mandamus directing the State of Punjab, respondent 2, to cancel the notification of 2 August 1954 that had created the third reference. The High Court dismissed the petition in limine, and an application for leave to appeal to this Court under Article 133(1)(c) of the Constitution was rejected on 31 August 1954. Nevertheless, the appellant obtained special leave to appeal from this Court on 18 October 1954. The factual background involved a series of industrial disputes between the management of the appellant’s mills and the workers represented by the Dhariwal Mills Mazdoor Union. The first dispute was referred to the Industrial Tribunal, respondent 1, by a Punjab Government notification dated 30 October 1953, and a second dispute was referred by a notification dated 12 December 1953. Respondent 1 heard both matters and rendered an award on 9 July 1954, which the Punjab Government published in its Official Gazette on 13 August 1954. Before that publication, further disputes were alleged and referred to the same Tribunal by a notification dated 2 August 1954, creating the third reference that became the subject of the appellant’s petition.

The appellant contended that every item included in the third reference had already been dealt with in the first two references. Although the wording of the items in the third reference appeared different, the appellant argued that the substantive issues were identical to those that had already been adjudicated and formed the basis of the award dated 9 July 1954. Consequently, the appellant maintained that the third reference was unnecessary and improper, as the matters it sought to address had already been finally decided by the Tribunal and published by the Government. This was the principal contention advanced by the appellant in the petition for relief before the High Court and formed the basis of the appeal to this Court.

The matters that were placed before respondent 1 formed the subject‑matter of an award dated 9 July 1954. That award was officially published by the Punjab Government in the Official Gazette on 13 August 1954. According to the statutory provisions, the award would become enforceable after the lapse of thirty days from its publication, which meant that it became operative on 12 September 1954. The award was not left uncontested; an appeal against the award was filed before the Labour Appellate Tribunal. The Tribunal examined the appeal and rendered its decision on 28 March 1955. The Tribunal’s decision was made effective from 27 April 1955 and was intended to remain in force for at least one year from that date. However, on 26 April 1956, the Punjab Government issued a notification extending the period of operation of the award for an additional year, thereby allowing the award to continue to have effect beyond its original term.

The appellant became aware that, when the appropriate Government believed that an industrial dispute either existed or was likely to arise, it could refer the dispute to the Tribunal for adjudication. On that basis, the appellant alleged that, in making the third reference, respondent 2 “had yielded to political pressure of the labour leaders but in order to circumvent the decision of the Tribunal couched the demands covered in the previous references in a different language and were successful in hoodwinking”. The appellant’s principal contention was that, while the award remained operative, the Punjab Government lacked the competence to refer the very same disputes to respondent 1 for adjudication. The appellant argued that because the award was binding on both parties, no industrial dispute concerning the same subject‑matter could arise during the award’s period of operation. Consequently, any reference by the Punjab Government to respondent 1 during that period would be absolutely incompetent, and respondent 1 would have no jurisdiction to entertain such a reference. The disputes enumerated in the third reference were as follows: (1) whether workers who were illegally dismissed, discharged or retrenched after July 1952 should be reinstated with appropriate compensation; (2) whether facilities that had been provided to workers before 1947 were actually withdrawn and, if so, whether they should be restored; (3) whether employees whose mode of service had been altered or who had been transferred from one type of work to another were being paid their original wages, and if not, whether deductions from their original dues should be restored; (4) whether piece‑rate (contract‑basis) workers were receiving wages that kept pace with the high cost of living and, if not, whether their wages should be suitably increased; and (5) whether the wages of Shri Dina Nath, employee number 833 of the Finishing Department, should be restored and whether increments should be allowed to other workers of his class.

The appellant had not submitted to the jurisdiction of respondent 1, and consequently was unable to obtain any particulars of the statements contained in the petition. The Punjab Government was likewise unable to challenge any of the allegations made in the petition, including the allegation of mala fides, because the petition had been dismissed by the Punjab High Court in limine. Therefore, the arguments presented before the Court by the learned Solicitor‑General for the appellant were confined to a mere comparison of the items of industrial disputes set out in the third reference with certain items of industrial disputes that appeared in the two earlier references.

It may be observed at the outset that the learned Solicitor‑General did not press items (1), (2) and (5) of the third reference, and respondent 1 would certainly have had jurisdiction to adjudicate those items. Accordingly, no writ could issue against respondent 1 in respect of those items. Items (3) and (4), however, formed the subject‑matter of considerable argument before the Court. The learned Solicitor‑General urged that item (3) of the third reference could be compared with item (ii) of the second reference, which read: “Workers working on contract basis when put on another job should be paid at the rate of their average earnings calculated on the basis of their previous three months earnings.” It was pointed out to him that item (ii) of the second reference related only to workers on contract, whereas item (3) of the third reference covered all employees, whether daily‑wage earners or contract workers. Although the terms of the third reference were broader than those of item (ii) of the second reference, the Solicitor‑General contended that daily‑wage earners were not affected because any job to which they were transferred carried the same remuneration as before, and therefore their position was not altered by the transfer. He further claimed that the wording of item (3) of the third reference was a mere camouflage intended to show that item (3) of the third reference and item (ii) of the second reference dealt with distinct subject‑matters, and that, in spite of the award made in the earlier two references, it was competent for the Punjab Government to refer that industrial dispute for adjudication to respondent 1.

Item (4) of the third reference was compared with item (i) of the second reference, which stated that “dearness allowance should be given to workers at Rs 40 per mensem.” While in the case of item (3) of the third reference the terms were wider than those of item (ii) of the second reference, in the case of item (4) of the third reference the terms only brought in

The learned Solicitor‑General pointed out that the reference to the piece‑rate, or contract‑basis, workers was intended to exclude daily‑wage earners from its scope. He further observed that item (4) of the third reference concerned wages rather than dearness allowance. In response, he argued that although the concepts of wages and dearness allowance may be distinct, the definition of “wages” in Section 2(rr) of the Industrial Disputes Act, 1947, does not recognise any separation. That definition describes wages as “all remuneration capable of being expressed in terms of money and included such allowances (including dearness allowance) as the workman was for the time being entitled to”. Relying on this provision, he urged that the subject‑matter of item (4) of the third reference is in fact covered by item (i) of the second reference, and consequently no industrial dispute could arise with respect to that item while the award made in the earlier two references remained in operation.

The Court observed that the facts and circumstances raised by the learned Solicitor‑General during his argument did not appear in the petition nor in any part of the record before the Punjab High Court. It appeared that the High Court’s decision was based merely on a side‑by‑side comparison of the items in the various references, without reference to the additional material raised. Moreover, an allegation of mala fides on the part of the Punjab Government was made, and the wording of items (3) and (4) of the third reference, although apparently different from the corresponding items of the second reference, was asserted to be essentially identical. In such a situation the Court held that the High Court was under a duty to issue notice to the respondents, to give both parties an opportunity to be heard, and to record its decision after considering all the circumstances that might be brought to its attention. Instead, the High Court adopted a course that prevented the parties from presenting their respective cases and dismissed the petition in limine. The Court expressed the view that this course of action was not justified.

Consequently, the Court directed that the matter be remanded to the Punjab High Court. The remand order required the High Court to issue notice to the respondents and to determine the dispute after hearing both parties. The High Court was further instructed to consider the statements and any evidence adduced by the parties before arriving at its decision.

In addition to the procedural direction, the Court indicated that the Punjab High Court, while determining the matter in the manner prescribed, must also decide whether, given that items (1), (2) and (5) of the third reference have not been pressed before this Court and the controversy now centres only on items (3) and (4), it would be appropriate to grant the writ or writs sought by the appellant solely with respect to items (3) and (4). This further determination is contingent upon the High Court concluding that those two items are indeed covered by items (ii) and (i) of the second reference and that no industrial dispute exists with respect to them.

The High Court must consider that the dispute which may be said to arise between the parties concerning those items occurred during the operation of the award that respondent 1 rendered in the earlier references. In that context the High Court will examine whether the contention advanced by the appellant attacks the very foundation of respondent 1’s jurisdiction to entertain the third reference with respect to those items. Alternatively the Court must decide if the appellant’s submission merely challenges the merits of the allegations without affecting jurisdiction. If the first alternative is established, the appropriate remedy would be the issuance of a writ, whereas no writ could be granted under the second alternative. The High Court must also determine whether items three and four of the third reference are separable from items one, two and five, which have not been pressed. If separability is established, the Court must decide whether it may grant the writs requested by the appellant on the condition that it finds those items in the appellant’s favour. Accordingly we remand the matter to the Punjab High Court, directing it to determine the issues in light of the foregoing observations after issuing notice to the respondents. The Dhariwal Mazdoor Union, Dhariwal, applied before us to be made a party to the appeal or, in any event, to be permitted to intervene. We initially allowed the latter relief in this Court, but on further hearing after remand we consider that the Union should be impleaded as a respondent to the petition. Consequently we direct the Punjab High Court to pass the necessary orders for impleading the Union as a respondent and to permit the appellant to amend the petition accordingly. We have been informed that respondent 1 intends to adjudicate the industrial disputes constituting the subject matter of the third reference at an early stage. If the appellant wishes to restrain respondent 1 from proceeding, it must obtain an appropriate stay order from the Punjab High Court. Because obtaining such an order will necessarily require time, we order that the proceedings before respondent 1 in the third reference be stayed for two weeks from today. Within that two‑week period the appellant may, if advised, procure the necessary stay order from the Punjab High Court. Finally, after considering all circumstances, we direct that each party shall bear and pay its own costs incurred in this appeal.