State Of Uttar Pradesh vs Lakshmi Ice Factory and Others

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

Court: Supreme Court of India

Case Number: Civil Appeals Nos. 51

Decision Date: 7 February 1962

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

In the matter titled State of Uttar Pradesh versus Lakshmi Ice Factory and Others, the Supreme Court of India rendered its judgment on 7 February 1962. The judgment was authored by Justice A K Sarkar, and the bench was composed of Justices A K Sarkar, P B Gajendragadkar and K N Wanchoo. The petitioner before the Court was the State of Uttar Pradesh and the respondents were Lakshmi Ice Factory together with other parties. The decision is reported in 1963 AIR 399 and 1962 SCR Supl. (3) 59, and it is cited as RF 1992 SC1277 (22). The statutory framework involved the Industrial Disputes Act, 1947 (U.P. Act 28 of 1947) and the Statutory Orders framed thereunder, specifically clause 9 (7) of those orders, which dealt with the pronouncement of an award in open court.

The factual backdrop was that the Government of Uttar Pradesh, relying on section 3 of the U.P. Industrial Disputes Act, 1947, and on the statutory orders made under that provision, referred certain industrial disputes arising between the ice‑factory respondents and their respective workmen to an Industrial Tribunal for adjudication. The Tribunal examined the matters but did not pronounce its award in open court, contrary to the requirement of clause 9 (7) of the Statutory Orders. Instead, the Registrar of the Tribunal informed the ice factories that the Tribunal’s award had been submitted to the Government. The award was subsequently published in the Uttar Pradesh Gazette, and the Regional Conciliation Officer directed the ice factories to implement the award immediately. The ice‑factory respondents approached the Allahabad High Court asserting that the award was a nullity because it had not been pronounced in open court as mandated by clause 9 (7), and they sought writs to set aside the award. The High Court granted the writs and quashed the Gazette notification publishing the award.

The Supreme Court was called upon to decide two principal questions: first, whether the sub‑clause (7) of clause 9 of the Statutory Orders is mandatory (imperative) or merely advisory (directory); and second, whether that sub‑clause is ultra vires because it conflicts with the Industrial Disputes Act under which it was framed. The Court held that the legislative intent was clear in making the requirement of open‑court pronouncement mandatory. Accordingly, any award that is not pronounced in open court is a nullity. The Court further concluded that the provision in sub‑clause (7) of clause 9 is indeed imperative and not merely directory. Regarding the second question, the Court found that the requirement for open‑court pronouncement falls within the powers conferred by section 3(g) of the Act, and that section 6 of the Act does not prohibit the making of such a provision. Consequently, the rule requiring the Tribunal to pronounce its decision in open court is not in conflict with section 6 of the Act. In reaching this conclusion, the Court referred to the authority of Montreal Street Railway Co. v. Normandin, [1917] A C 170.

The judgment was delivered under the civil appellate jurisdiction of the Supreme Court, concerning Civil Appeals Nos. 51 and 52. These appeals arose from the judgment and decree dated 23 September 1959 of the Allahabad High Court (Lucknow Bench) in C M. Applications Nos. 15 (O.J.) and 16 (O.J.) of 1957 respectively. The Court’s decision clarified the mandatory nature of open‑court pronouncement of industrial awards and affirmed that such a requirement is constitutionally valid within the framework of the Uttar Pradesh Industrial Disputes Act, 1947.

Counsel for the appellants appeared for the State of Uttar Pradesh and certain of its officers in both appeals, while counsel for respondent No. 1 represented Lakshmi Ice Factory and its workers in one appeal and Prakash Ice Factory and its workers in the other. The judgment was delivered on 7 February 1962 by Justice Sarkar. The two appeals were heard together because each involved the same question of how certain provisions of the Uttar Pradesh Industrial Disputes Act, 1947 (hereinafter “the Act”) should be interpreted. By a notification dated 10 February 1956, the Government of Uttar Pradesh referred distinct industrial disputes that had arisen between each ice factory and its respective workmen to an Industrial Tribunal for adjudication. The specific content of those disputes was not material to the issues before this Court. The Tribunal conducted hearings but did not deliver its award in open court as required by the procedural rules. Instead, on 8 November 1956 the Registrar of the Tribunal informed the factories that the award had been submitted to the Government. Subsequently, on 15 December 1956 the award was published in the Uttar Pradesh Gazette, and the Gazette indicated that the award was dated 8 November 1956. On 26 December 1956 the Regional Conciliation Officer, appointed under the Act, directed the factories to give immediate effect to the award. In response, the factories filed writ petitions before the Allahabad High Court on 3 January 1957 under article 226 of the Constitution, seeking to quash the award and to restrain the Government and the workmen from implementing it. Their principal argument was that the award was a nullity because it had not been pronounced in open court, as mandated by the applicable rules. The High Court, by its judgment of 23 September 1959, allowed the factories’ petitions and issued writs setting aside the notification that had published the award. The present appeals challenge that High Court decision. Section 3 of the Act empowers the Government, in specific circumstances, to make provisions by general or special order for (i) appointing industrial courts, (ii) referring any industrial dispute for adjudication in the manner prescribed in the order, and (iii) addressing matters incidental or supplementary to the other provisions of the order. Exercising this power, the Government issued an order on 14 July 1954, herein referred to as the “Statutory Order.” It was under the authority of the Act read with the Statutory Order that the Government issued the February 10 1956 notification. Pursuant to clause 8 of the Statutory Order, the Government established the Tribunal. Clause 9 of that Order sets out the procedure to be followed by the Tribunal, and sub‑clause (7) of clause 9 expressly provides that the Tribunal’s decision must be in writing, pronounced in open court, and dated and signed by the member or members of the Tribunal at the time of pronouncement.

In the Statutory Order, clause nine prescribed the procedure to be followed by the Tribunal, and sub‑clause (7) of that clause required that “the decision of the Tribunal shall be in writing and shall be pronounced in open court and dated and signed by the member or members of the Tribunal, as the case may be, at the time of pronouncing it.” Clause eleven authorised the Government to refer any industrial dispute to the Tribunal, and sub‑clause (9) of element nine granted the Tribunal authority to frame Standing Orders governing its practice and procedure. Exercising this power, the Tribunal issued Standing Order number thirty‑six, which stipulated that “Judgment shall be pronounced in open court either immediately after the close of the arguments or on a subsequent date of which previous notice shall be given to the parties. It shall then be signed and dated by the Tribunal.” Acting under this Standing Order, the Tribunal fixed a date for pronouncing its judgment in open court; although the specific date is not recorded in the case file, the Tribunal later notified the parties on 25 September 1956 that the original date had been changed to 9 October 1956. On that latter date the award was not pronounced in open court, nor was any further notice of a new date provided to the parties. The Ice Factories first learned of the award only through a letter dated 8 November 1956 from the Registrar of the Tribunal, and it became clear that the award had never actually been pronounced in open court. The principal issue presented to the Court was whether the requirements of sub‑element (7) of element nine were mandatory. The High Court had held them to be mandatory and consequently set aside the Notification that published the award. The appellants argued that the High Court erred, contending that the provisions were merely directory and that the Tribunal’s failure to pronounce the award in open court did not render the award void. Counsel for the appellants, referring to the rule of construction in Maxwell on Interpretation of Statutes, tenth edition, page three hundred eighty‑one, asserted that where statutory prescriptions relate to the performance of a public duty, and where invalidating acts done in breach of those prescriptions would cause serious inconvenience or injustice without furthering the Legislature’s purpose, such prescriptions are generally understood to be merely instructional, that is, directory. The counsel maintained that sub‑element (7) of clause nine imposed a public duty on the Tribunal, and because the parties before the Tribunal had no control over the Tribunal’s conduct, the provision should be regarded as directory and a breach should not nullify the award.

The Court noted that because none of the parties before the Tribunal exercised any control over it, the clause in the Statutory Order that prescribed the manner in which the Tribunal must discharge its duty should be regarded as merely directory; consequently, a failure by the Tribunal to observe that clause would not render its act a nullity. The Court further expressed the view that the rule quoted from Maxwell on the Interpretation of Statutes does not apply to the present case. That rule, the Court explained, is relevant only where treating the statutory prescriptions that relate to the performance of a public duty as mandatory would cause injustice or hardship without advancing the purpose of the statute. The Court found that none of those conditions existed in the statute under consideration. To illustrate the rule, the Court referred to the decision in Montreal Street Railway Co. v. Normandin (1) cited in Maxwell’s text, where certain statutory provisions governing the revision of a jury list were ignored. The issue was whether a verdict rendered by a jury empanelled from a list revised in contravention of the provision was a nullity. The Court in that case held that the verdict was not a nullity because the provision concerning the revision of the jury list was merely directory. The Court further observed that the purpose of the provision was to distribute the jury burden equally among all eligible persons, to secure jurors who were likely to attend, and to prevent the packing of juries. It was quoted that, “It does far less harm to allow cases tried by a jury formed as this one was … with the opportunities there would be to object to any unqualified man called into the box, to stand good, than to hold the proceedings null and void. So to hold would not, of course, prevent the courts granting new trials in cases where there was reason to think that a fair trial had not been had” (p. 176). The Court stressed that the present matter was wholly different. It held that the proceedings before the Tribunal would not become a nullity even if clause 9(7) of the Statutory Order were treated as mandatory. Declaring the provision imperative would not inflict serious hardship on anyone. The Court observed that the Government could always require the Tribunal to pronounce its decision in open court, extending the time fixed for the decision if necessary. Either party to the proceeding could also request that the Government call upon the Tribunal to announce its award in open court. The Court was confident that the Government would act to correct the defect once it was brought to its notice, since the Government itself had referred the matter to the Tribunal for a decision. As soon as the Tribunal pronounced its award in open court, the proceedings would become fully effective. The Court also reiterated the accepted rule of construction that enactments governing court procedure are ordinarily imperative, as noted in Maxwell on the Interpretation of Statutes, 10th edition, p. 379. It further appeared to the Court that

In this case the Court observed that interpreting clause 9(7) of the Statutory Order as merely a directory provision would defeat the purpose for which the legislature enacted the rule. To discover the intended purpose, the Court examined the remaining provisions of the Statutory Order together with the Industrial Tribunal Act and related legislation. Section 6 of the Industrial Tribunal Act states: “(1) When an authority to which an industrial dispute has been referred for adjudication has completed its enquiry, it shall, within such time as may be specified, submit its award to the State Government. (2) The State Government may… enforce for such period as it may specify all or any of the decisions in the award.” Under this section the Tribunal submitted its award to the Government, and the Government issued a Gazette notification dated 15 December 1956 directing that the award be enforced for one year from the date of publication. Because the award must be submitted to the Government under section 6, it must be in writing; a verbal award could not be transmitted in that manner. Consequently, the requirement in sub‑clause 9(7) that the Tribunal’s decision be in writing is imperative, and this implication leads to the conclusion that the other provisions in the same sub‑clause were intended to be equally mandatory.

The Court then turned to clause 18 of the Statutory Order, which reads: “The Tribunal or the adjudicator shall hear the dispute and give its or his decision within 180 days (excluding holidays but not annual vacations observed by courts subordinate to the High Court) from the date of reference made to it or him by the State Government and shall thereafter as soon as possible, supply a copy of the same to the parties to the dispute… Provided that the State Government may extend the said period from time to time.” The language of this clause is clearly mandatory. The Tribunal does not possess the power to issue an award after the prescribed period; if it did, the proviso allowing the State Government to extend the period would be unnecessary. Therefore, it is obligatory on the Tribunal to render its decision within the 180‑day limit, and any award made after that period would be a nullity. When clause 18 speaks of “giving a decision,” the Court held that this can only be satisfied by the method prescribed in sub‑clause 9(7), namely pronouncing the award in open court, because that is the only manner contemplated by the Order. Hence, the terms of clause 9(7) must be read as imperative; otherwise, it would be impossible to ascertain whether the requirements of clause 18 had been complied with, and the legislative intent behind the Statutory Order would be frustrated.

The Court observed that if the requirement of pronouncing an award in open court were not mandatory, it would be impossible to determine whether the award complied with clause 18 of the Statutory Order, and consequently no one could know whether the award was void. Treating sub‑clause (7) of clause 9 as merely directory would therefore render clause 18 ineffective and defeat the purpose of the framers of the Statutory Order. The Court further noted that sub‑clause (2) of clause 24 leads to the same conclusion. This sub‑clause provides that any clerical or arithmetical mistake, or any error arising from an accidental slip or omission, may be corrected by the Tribunal or the adjudicator within one month of giving the decision or award, either on the Tribunal’s own motion or on an application by any party. Accordingly, the right to correct such errors expires after one month, and neither the Tribunal nor any party may seek correction beyond that period. For clause 24(2) to operate, the date on which the decision is given must be known. The Court held that the date can be known only when the award is pronounced in open court, because only then is the award dated and signed at the moment of pronouncement, as required by sub‑clause (7) of clause 9. If the award could be given in any other manner, a party might be deprived of the right to move the Tribunal for correction within the prescribed time. The Court therefore emphasized that the open‑court pronouncement is essential to satisfy the requirements of clauses 18 and 24(2). Moreover, the Court pointed to clause 31 of the Statutory Order, which states that, except as provided in the Order and in the Industrial Disputes (Appellate Tribunal) Act, 1950, every order or direction made under the Order shall be final and conclusive and shall not be questioned by any party in any proceeding. The Act of 1950 provides for appeals from decisions of certain industrial tribunals to the Appellate Tribunal established under it. Consequently, clause 31 makes a decision of the Tribunal on a reference final, subject only to an appeal permitted under the Industrial Disputes (Appellate Tribunal) Act, 1950.

Under section 7 of the Industrial Disputes (Appellate Tribunal) Act, 1950, an appeal is permitted to the Appellate Tribunal from any award or decision of an Industrial Tribunal that deals with the matters specified in that section. The provision further indicates that an Industrial Tribunal mentioned in section 7 includes a Tribunal that has been created under a State law, even when that State law does not contain a provision for an appeal, as is shown by provision 2(o)(iii) of the 1950 Act. The Uttar Pradesh Act, while not expressly providing a mechanism for appeal, is subject to clause 31 of the Statutory Order, which declares that a decision of the Tribunal is final subject only to the provisions of the 1950 Act. Consequently, it follows that an appeal may be lodged under the 1950 Act to the Appellate Tribunal that is constituted under that Act, even when the decision originates from a Tribunal established under the Statutory Order. Section 10 of the 1950 Act further provides that an appeal is valid only if it is filed within thirty days of the date on which the award is published, where the law that made the award requires such publication, or within thirty days of the date on which the award is made where no publication requirement exists. Neither the Uttar Pradesh Act nor the Statutory Order contains any rule that requires the award to be published. Therefore, an appeal from a Tribunal created under the Statutory Order must be presented within thirty days of the making of the award. This makes it essential for the parties to know the exact date on which the award is made so that they can exercise their right of appeal. The date of the award can be ascertained only when the judgment is pronounced in open court, because the date of the award coincides with the date of its pronouncement. Hence, pronouncing the judgment in open court is indispensable; without such a pronouncement, the statutory provisions governing appeal would be ineffective, and the right of appeal could be lost.

The Court therefore concluded that the clear legislative intention is to require that judgments be pronounced in open court by the Tribunal, and any judgment that is not pronounced in that manner must be treated as a nullity. In reaching this conclusion, the Court found it unnecessary to address Standing Order No 36 separately, because the provisions of that Standing Order are substantially identical to clause 9(7) of the Statutory Order, and both should be interpreted in the same way. Moreover, since clause 9(7) of the Statutory Order has been held to be mandatory, any differing view of Standing Order No 36 would have no effect on the operative clause. Mr Aggarwala subsequently contended that clause 9(7) of the Statutory Order and Standing Order No 36 were ultra vires because they conflicted with the Act under which they were framed. He argued that, according to section 6 of the Act, the Tribunal’s sole duty is to submit its award to the Government after completing the enquiry, and that the section does not require the Tribunal to pronounce its award in open court. On that basis, he maintained that the provisions of the Statutory Order and the Standing Order were in conflict with section 6 and therefore had no legal effect, rendering the question of the mandatory nature of clause 9(7) or Standing Order No 36 irrelevant.

In this case the Court considered the argument that the requirement to pronounce the Tribunal’s decision in open court was unlawful because it conflicted with Section 6 of the Act. The advocate contended that the provisions contained in the Statutory Order and in Standing Order No 36, both of which were enacted under powers granted by the Act, were in direct conflict with Section 6 and therefore had no legal effect. On that basis he further asserted that it was unnecessary to determine whether clause 9(7) of the Statutory Order or the corresponding provision in Standing Order No 36 were mandatory. The Court held that this contention lacked any foundation. Section 6, which obliges the Tribunal to submit its award to the Government, necessarily presupposes that an award will be made, but it does not prescribe the manner in which the award must be made. No other provision in the Act specifies how the award is to be delivered. By contrast, Section 3(g) empowers the Government, by general or special order, to provide for incidental or supplementary matters that are necessary for the resolution of an industrial dispute referred for adjudication under any order made under Section 3. The requirement that the decision be pronounced in open court, as set out in clause 9(7) of the Statutory Order, falls squarely within the authority contemplated by Section 3(g). Section 6 does not prohibit the making of such a provision; its primary purpose is to direct that the Tribunal submit the award to the Government for enforcement, and it has no bearing on the procedure by which the Tribunal renders its award. Consequently a rule duly framed under the Act requiring the Tribunal to pronounce its decision in open court is not in conflict with Section 6. The Court therefore concluded that the appeals were untenable, dismissed them and ordered the appellants to pay costs.