Associated Electrical Industries... vs Its Workmen

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

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: Not extracted

Coram: P.B. Gajendragadkar, K.N. Wanchoo

In the appeal filed by special leave, the dispute was between the appellant, Associated Electrical Industries (India) Private Limited, and the respondents, who were its workmen. The controversy centred on a claim for bonus for the fiscal year 1953‑54. The workmen asserted that they were entitled to a bonus equivalent to four months of basic wages for that year. The appellant, however, had already paid an amount corresponding to two months’ basic wages as bonus. Consequently, the adjudicating authority directed the appellant to pay an additional amount equal to fifteen days of basic wages. The order directing the extra bonus payment formed the basis of the present appeal.

The counsel appearing for the appellant drew the Court’s attention to the fact that the special leave granted was limited to the question of jurisdiction, and that this was the sole issue that the appellant sought to have determined. The jurisdictional question arose because the dispute had been referred successively to different industrial tribunals. Initially, on 21 September 1956, the dispute was referred to the Fifth Industrial Tribunal. Subsequently, on 9 March 1957, the reference was withdrawn from the Fifth Tribunal and the matter was transferred to the Second Industrial Tribunal. The process did not end there; on 10 June 1957, the dispute was again withdrawn, this time from the Second Tribunal, and was referred to the Fourth Industrial Tribunal, which ultimately conducted the proceedings and issued the award that is now under challenge.

The orders effecting each transfer were issued under Section 33B of the Industrial Disputes Act, 1947, a provision that had been enacted in 1956. Section 33B authorises the appropriate Government, by written order stating the reasons, to withdraw any proceedings pending before an industrial tribunal and to transfer them for disposal to another tribunal. The argument advanced was that, although the Government possessed the power to transfer the proceedings, it was required to comply with the conditions of Section 33B, including the mandatory recording of reasons for the transfer. Upon examination of the transfer orders, it was observed that none of them contained any articulated reasons. Each order merely stated that it was “expedient” to withdraw the reference from one tribunal and transfer it to another. In the Court’s view, such a bare statement does not satisfy the requirement of a reason as mandated by Section 33B(1). The absence of a substantive justification means that the statutory condition was not fulfilled.

The Court observed that the requirement to give a statement of reasons under Section 33B had to be complied with both in substance and in form. Simply stating that it was expedient to withdraw a case from one tribunal and transfer it to another, and repeating that formulation on three separate occasions for the same proceedings, did not satisfy the statutory demand for reasons. Normally, when an industrial dispute is referred to an industrial court or tribunal, it is to be tried before that body, and the power to transfer may be exercised only where there are sufficient reasons. In the facts before it, the Court was not prepared to find that any adequate reasons had been recorded as required by the section, and therefore the transfer orders could not be justified under Section 33B(1). Consequently, the Court noted that the precedent set in Bengal Chemical and Pharmaceutical Works Ltd. v. Their Employees would not assist the respondents. Another objection concerned the validity of the present proceedings before the Fourth Industrial Tribunal. The respondent conceded that the definition of “tribunal” in Section 2(r) of the Act had been amended to include tribunals constituted before 10 March 1957, and thus orders made after that date could fall within Section 33B. However, the respondent argued that the first order, dated 9 March 1957, which withdrew the proceedings from the Fifth Industrial Tribunal, was issued before the amendment took effect, creating an additional infirmity. The Court referred to its earlier discussion in Bengal Chemical and Pharmaceutical Works Ltd., where it had held that for proceedings pending in a tribunal constituted before 10 March 1957, the Government acquired the power to transfer them only from that date onward. Because the impugned transfer in the present case occurred on 9 March 1957, it was not protected by the amended definition, and the withdrawal and transfer were therefore invalid, as previously held in State of Bihar v. D.N. Ganguly. In the result, the Court affirmed the objection raised by the appellant regarding the validity of the present proceedings and set aside the award made by the Fourth Industrial Tribunal. Accordingly, the dispute that had originally been referred to the Fifth Industrial Tribunal by the notification of 21 September 1956 was revived, and the matter was ordered to be sent back to that tribunal for disposal in accordance with law.

The Court directed that the pending matter be dealt with in strict compliance with the governing law, ensuring that all procedural and substantive requirements were observed. It emphasized that the disposal of the case must follow the legal standards applicable to such disputes, without deviation or informal handling. In addition, the Court clarified that it would not issue any order concerning the responsibility for costs arising from the proceedings. Consequently, no determination would be made regarding which party, if any, should bear the expenses incurred during the litigation, and the parties were left to bear their own costs unless otherwise provided by law.