The Engineering Mazdoor Sabha vs The Hind Cycles Ltd., Bombay

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

Court: Supreme Court of India

Case Number: Civil Appeals Nos. 182, 183 and 204 of 1962

Decision Date: 18/10/1962

Coram: P.B. Gajendragadkar, Bhuvneshwar P. Sinha, K.N. Wanchoo, K.C. Das Gupta, J.C. Shah

In this matter the petitioner, identified as the Engineering Mazdoor Sabha representing the workmen employed by the respondent Hind Cycles Ltd., Bombay, sought relief before the Supreme Court of India. The judgment was delivered on 18 October 1962. The case was heard by a bench comprising P. B. Gajendragadkar, Bhuvneshwar P. Sinha, K. N. Wanchoo, K. C. Das Gupta and J. C. Shah. The petition was presented as an appeal by special leave from an arbitration award rendered on 8 April 1960. The citation for the decision is reported in 1963 AIR 874 and 1963 SCR Supplement (1) 625, with further references in several later reports. The central question concerned the competence of an appeal under Article 136 of the Constitution of India against an award made by an arbitrator appointed pursuant to Section 10A of the Industrial Disputes Act, 1947. The dispute originated from an agreement dated 3 December 1959, in which the parties voluntarily referred their industrial dispute to arbitration under the said statutory provision. Section 10A(2) prescribed that the agreement must expressly state the parties’ intention to refer the dispute to arbitrators named therein, while Section 18(2) declared that the arbitration award would be binding on the parties. After the reference was accepted on 14 December 1959, the arbitrator issued his award on 8 April 1960. The appellants challenged the award’s validity and obtained special leave to appeal to the Supreme Court. The respondent argued that the appeal was not maintainable because the arbitrator did not constitute a “tribunal” within the meaning of Article 136.

The Court examined whether an arbitrator, to whom a dispute is voluntarily referred under Section 10A, performs a quasi‑judicial function that could be treated as an order under Article 136(1). It held that although the arbitrator’s determination possesses a quasi‑judicial character, the arbitrator is not a tribunal within the constitutional sense because the State has not conferred upon him its inherent judicial power. The power exercised by the arbitrator derives solely from the parties’ agreement, not from any statutory vesting of judicial authority. Consequently, an appeal against an award made under Section 10A does not fall within the ambit of Article 136. The Court also noted that writ jurisdiction under Article 226, which allows the High Court to issue appropriate writs, is broader than that under Article 136, as it is not limited to orders of courts or tribunals. The decision relied upon earlier judgments, including Bharat Bank Ltd. v. Employees of the Bharat Bank Ltd., Province of Bombay v. Kusaldas S. Advani & Others, and Durga Shankar Mehta v. Thakur Raghuraj Singh, to support its reasoning.

The Court observed that the jurisdiction of the High Court to issue certain writs is broader than the jurisdiction contemplated under Article 136, because the High Court’s power to issue writs is not limited by a requirement that such writs may be directed only against orders of courts or tribunals. In the present matter, the Court was tasked with hearing three civil appeals that had been granted special leave to be heard by this Court. The first two appeals, numbered 182 and 183 of 1962, were filed against an award dated 8 April 1960 rendered by an arbitrator in Bombay. The third appeal, numbered 204 of 1962, challenged an award dated 27 August 1961 rendered by an arbitrator in Coimbatore. Counsel K. T. Sule and K. R. Choudhri appeared for the appellants in the first two appeals, while the Solicitor‑General of India, C. K. Daphtary, together with S. K. Bose and Sardar Bahadur, represented the respondents in those same appeals. In the third appeal, advocates G. B. Pai, J. B. Dadachanji, O. C. Mathur and Ravinder Narain appeared for the appellant, and A. S. R. Chari, M. K. Ramamurthi, R. K. Garg, D. P. Singh and S. C. Agarwala represented the respondents. The judgment was delivered on 1 October 1962 by Justice Gajendragadikar.All three appeals were consolidated for hearing because each respondent raised the identical preliminary objection concerning the competence of the Court to entertain the appeals. In the first two appeals, the appellants – the Engineering Mazdoor Sabha and another party – challenged an award pronounced by Mr D. V. Vyas on 8 April 1960. The dispute concerned the Hind Cycles Limited of Bombay and had been voluntarily referred to Mr Vyas under section 10A of the Industrial Disputes Act, 1947, following an agreement dated 3 December 1959. The arbitrator entered on the reference on 14 December 1959 and issued his award on 8 April 1960. By special leave, the appellants appealed, contending the award was invalid and improper on several grounds. The respondent argued that the arbitrator was not a tribunal within the meaning of Article 136, and consequently, a special‑leave appeal could not lie.Civil Appeal No. 204 of 1962 was filed by the Anglo‑American Direct Tea Trading Co. Ltd. against its workmen. The appellant sought to set aside the award rendered by Dr T. V. Sivanandam on 27 August 1961, an award also made under a voluntary reference pursuant to section 10A of the Act. The appellant obtained special leave to approach this Court. The respondents in that case similarly maintained that the appeal was incompetent because the arbitrator did not constitute a tribunal under Article 136. The central question before the Court, therefore, was whether an arbitrator to whom parties voluntarily refer their disputes qualifies as a tribunal for the purposes of Article 136 of the Constitution.

The Supreme Court explained that Article 136(1) authorised, notwithstanding any other provision, the Court to grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter that had been passed or made by any court or tribunal within the territory of India. Sub‑article (2) excluded from this power any judgment, determination, sentence or order that had been issued by a court or tribunal constituted under any law relating to the Armed Forces. The Court observed that Article 136(1) gave it very broad authority and therefore its provisions had to be interpreted liberally. The framers of the Constitution had intended to equip the Supreme Court with extensive powers so that it could address all orders and adjudications of courts and tribunals throughout India, thereby ensuring the fair administration of justice. It was noted that while Articles 133(1) and 134(1) provide for appeals to the Supreme Court only against judgments, decrees or final orders of High Courts, Article 136(1) imposes no such limitation. Consequently, every court and every tribunal in India, except those mentioned in clause (2), fell within the appellate jurisdiction of the Supreme Court under Article 136(1). Moreover, unlike the appellate jurisdiction under Articles 133(1) and 134(1), which could be invoked only against final orders, Article 136(1) could be exercised even against interlocutory orders or decisions. The Court described the scope of Article 136(1) as covering all causes and matters that were brought before courts or tribunals, making its sweep very wide. Although the Court exercised discretion to refuse special leave where it deemed that interference would not be necessary in the interest of justice, such limitations were self‑imposed by the Court and were not prescribed by the text of Article 136(1).

The Court further explained that for a party to invoke Article 136(1) two conditions had to be satisfied. First, the proposed appeal had to arise from a judgment, decree, determination, sentence or order, meaning that the appeal could not be directed against a purely executive or administrative order. If the challenged determination or order was of a judicial or quasi‑judicial nature, the first condition was met. Second, the determination or order in question had to have been made or passed by a court or tribunal situated within the territory of India. Accordingly, the act complained of needed to possess the character of a judicial or quasi‑judicial act, and the authority whose act was being challenged needed to be a court or a tribunal. Unless both of these conditions were fulfilled, Article 136(1) could not be invoked. This analysis underscored the distinction between administrative or executive actions and judicial or quasi‑judicial actions, a distinction that the Court had examined in earlier decisions.

Both of the conditions laid down for invoking Article 136(1) were required to be satisfied; the Court observed that when either condition was lacking, Article 136(1) could not be invoked. The distinction between purely administrative or executive acts and judicial or quasi‑judicial acts had been examined by this Court on many occasions. In the earlier decision of Province of Bombay v. Kusaldas S Advani, Justice Mahajan explained that determining whether an act is judicial, quasi‑judicial, or purely executive depends on the specific terms of the rule authorising the act, as well as on the nature, scope and effect of the power being exercised, and therefore each case must be assessed on its own facts and circumstances. The Court noted that courts established by the State adjudicate cases brought before them in a judicial manner, and the decisions recorded by such courts are clearly judicial decisions. By contrast, administrative or executive bodies are often required to make decisions in a purely administrative manner, and those decisions fall unmistakably within the category of administrative or executive orders. The Court also recognised that judges sometimes perform administrative functions, while administrative or executive authorities may be required to act quasi‑judicially when their statutes entrust them with such jurisdiction. When a statute expressly or by necessary implication requires an authority to act judicially, the decisions of that authority are generally treated as quasi‑judicial. Conversely, where executive or administrative bodies are not mandated to act judicially and may address matters administratively, their conclusions cannot be characterized as quasi‑judicial, even though they must act in good faith. Keeping this broad distinction in mind, the Court found no difficulty in holding that the decisions of arbitrators who are voluntarily referred industrial disputes under section 10A of the Act are quasi‑judicial decisions and therefore constitute a determination or order within the meaning of Article 136(1). This characterization was not seriously contested. The real dispute, the Court observed, was not about the character of the decisions appealed against but about the character of the authority that rendered those decisions. The respondents argued that the arbitrators whose awards were challenged were not tribunals, whereas the appellants asserted that they were tribunals. The Court explained that Article 136(1) distinguishes a “Tribunal” from a “Court.” In the technical sense, a “Court” is a tribunal constituted by the State as part of the ordinary hierarchy of courts and is invested with the State’s inherent judicial powers. A “Tribunal,” as distinguished from a “Court,” also exercises judicial powers and decides matters brought before it judicially or quasi‑judicially, but it does not constitute a court in the technical sense.

In the technical sense, the Tribunal meant a seat of justice, and in performing its duties it possessed some characteristics of a court. However, a domestic tribunal appointed in departmental proceedings or created by an industrial employer could not be regarded as a Tribunal under article 136(1). Likewise, purely administrative tribunals fell outside the scope of that constitutional provision. The tribunals envisaged by article 136(1) were those endowed with certain powers of the courts. They could compel witnesses to appear, administer oaths, and were required to follow procedural rules that ensured natural justice. Although they were not bound by the strict technical rules of evidence, they nonetheless had to decide cases based on the evidence presented before them. They were also not obligated to adhere to every technical rule of law, but their decisions needed to be consistent with the general principles of law. In other words, such bodies were required to act judicially, reach conclusions objectively, and could not operate solely as administrative organs or base their judgments on subjective preferences. The procedural rules governing their proceedings and the powers they wielded were often described as the “trappings of a court,” and a practical way to decide whether a particular body qualified as a Tribunal was to examine whether it possessed those trappings.

The Privy Council, in the case of Shell Company of Australia Ltd. v. Federal Commissioner of Taxation, considered whether the Board of Review created by section 41 of the Federal Income Tax Assessment Act, 1922‑25, qualified as a court exercising judicial power under section 71 of the Australian Constitution. The Council held that the Board was not a court but an administrative tribunal. Lord Sankey, speaking for the Council, scrutinised the statutory provisions establishing the Board and concluded that it functioned as administrative machinery through which a taxpayer could obtain a reconsideration of his contentions. He further explained that an administrative tribunal might act judicially yet remain an administrative body distinct from a court in the strict sense. He stressed that mere external features did not transform a direction issued by an ad‑hoc tribunal into an exercise of judicial power (pp. 297‑298). Lord Sankey observed that authorities clearly demonstrated the existence of tribunals possessing many of the “trappings of a court” while still not being courts that exercised judicial power. In that regard, he proceeded to enumerate the relevant propositions.

The Court listed several negative propositions to clarify that a tribunal does not become a court merely because of certain attributes. It observed that a tribunal does not acquire the status of a court simply because it issues a final decision. It also noted that hearing witnesses under oath does not make it a court, because such procedure alone is insufficient to confer judicial status. Likewise, the appearance of two or more opposing parties before it for resolution does not confer court status. The Court further stated that decisions affecting the rights of individuals do not transform a tribunal into a court. An appeal to a higher court does not change its character, because appellate review alone does not alter the nature of the body. Finally, the referral of a matter by another body does not make it a court, as illustrated on pages 296‑297. These negative propositions demonstrate that the characteristics described may represent the trappings of a court, but the mere presence of such trittings does not automatically transform the tribunal into a court. In this context, the Privy Council employed the vivid expression “the trappings of a Court,” to describe bodies that resemble courts in form but not in legal character. The issue of whether an industrial tribunal possessed the character of a court was later examined by this Court in The Bharat Bank Ltd., Delhi v. Employees of the Bharat Bank Ltd., Delhi (1). That decision is relevant to the present discussion because it addressed the nature of industrial tribunals created under the Act. The majority held that the functions and duties of the industrial tribunal closely resembled those of a body performing judicial functions. Consequently, although the tribunal was not a court, it qualified as a “tribunal” within the meaning of Article 136, as reported in [1950] S.C.R. 459. In other words, the majority opinion, which was regarded as landmark, affirmed that the appellate jurisdiction of this Court under Article 136 could be invoked in appropriate cases. It may be exercised against awards and other orders issued by industrial tribunals established under the Act, because those decisions fall within the scope of judicial review. While analysing the character of an industrial tribunal operating under the Act, Mahajan, J. observed a necessary condition for a tribunal to fall within the scope of Article 136. He said that the tribunal must be constituted by the State, and added that a tribunal would lie outside Article 136 if it performed only administrative or executive tasks without any judicial function of the State. According to the learned judge, tribunals that are invested with certain judicial functions of a court and that display some of its trappings also fall within Article 136. Such tribunals are therefore subject to the appellate control of this Court whenever that control is required in the interests of justice. Consequently, it is evident that beyond the relevance of the trappings of a court, the fundamental condition that makes a body a tribunal under Article 136 is that it must be a State‑created entity. That entity must also be endowed with the State’s inherent judicial power, which enables it to adjudicate disputes. Since the industrial tribunals created under the Act satisfied this test, the majority concluded that the awards made by those tribunals are amenable to review under Article 136.

The Court held that the awards made by the Industrial Tribunals were subject to the appellate jurisdiction of this Court under Article 136. In the case of Durga Shankar Mehta v. Thakur Raghuraj Singh, Justice Mukherjea, delivering the unanimous view of the Court, observed that the majority decision of this Court in Bharat Bank Ltd. had firmly established that the expression “Tribunal” as used in Article 136 does not carry the same meaning as “Court”. Rather, it embraces every adjudicating body, provided such a body is constituted by the State and is invested with judicial functions as distinguished from purely administrative or executive duties. Accordingly, the test to be applied in determining the character of an adjudicating body is whether the said body has been invested by the State with its inherent judicial power. This test requires that the adjudicating body be created by the State and that it be authorized to exercise the State’s judicial authority. The same principle was later reiterated in Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhunjhunwala. The Court then turned to examine the scheme of the relevant provisions of the Act that relate to the voluntary reference of a dispute to an arbitrator, the powers conferred on the arbitrator, and the procedure that the arbitrator must follow. Section 16A, under which a voluntary reference had been made in both cases, had been inserted into the Act by Act 36 of 1956. Section 16A reads as follows: “16A. (1) Where any industrial dispute exists or is apprehended and the employer and the workmen agree to refer the dispute to arbitration, they may, at any time before the dispute has been referred under section 10 to a Labour Court or Tribunal or National Tribunal, by a written agreement, refer the dispute to arbitration and the reference shall be to such person or persons (including the presiding officer of a Labour Court or Tribunal or National Tribunal) as an arbitrator or arbitrators as may be specified in the arbitration agreement. (2) An arbitration agreement referred to in sub‑section (1) shall be in such form and shall be signed by the parties thereto in such manner as may be prescribed. (3) A copy of the arbitration agreement shall be forwarded to the appropriate Government and the conciliation officer and the appropriate Government shall, within fourteen days from the date of the receipt of such copy, publish the same in the official Gazette. (4) The arbitrator or arbitrators shall investigate the dispute and submit to the appropriate Government the arbitration award signed by the arbitrator or all the arbitrators, as the case may be. (5) Nothing in the Arbitration Act, 1940 shall apply to arbitrations under this section.” As a consequence of the insertion of this section, several amendments were made to other provisions of the Act. In particular, Section 2(b), which defines an award, was amended by the addition of the words

In the amendment, the definition of “award” in section 2(b) was expanded to state that it includes an arbitration award made under section 10A. Consequently, an arbitration award is now treated as an award for the purposes of the Act. Because of this inclusion, the arbitration award becomes subject to the many provisions that apply to awards under the Act, namely sections 17, 17A, 18(2), 19(3), 21, 29, 30, 33C and 36A. Under section 17(2), an arbitration award that is published under section 17(1) attains finality and may not be questioned by any court in any manner. Section 17A provides that the arbitration agreement becomes enforceable after a period of thirty days from its publication under section 17. Section 18(2) makes the award binding on the parties who referred the dispute to arbitration. Section 19(3) stipulates that, subject to the provisions of section 19, the award remains operative for one year, unless the appropriate Government shortens that period or fixes a different period, and the Government may also extend the period as prescribed. All other sub‑sections of section 19 also apply to the arbitration award. Section 21, which obliges confidentiality of certain matters, is applicable, and consequently the penalty provision in section 30 for contravention of section 21 also applies. The penalty provision in section 29 for breach of an award may be invoked against an arbitration award. Section 33C, which provides a speedy remedy for recovering money from an employer, is applicable, and section 36A may be used for interpreting any provision of the arbitration award. Thus, by incorporating arbitration awards within the definition of “award,” the Act extends these specific provisions to arbitration awards.

Notwithstanding the broad application of the Act, certain sections do not apply to an arbitration award. Sections 23 and 24, which prohibit strikes and lock‑outs, are inapplicable to the proceedings before the arbitrator to whom a reference is made under section 10A. This distinction shows that the Act treats the arbitration award and the preceding arbitration proceedings as operating on a different basis from awards and proceedings before Industrial Tribunals or Labour Courts. Section 20, which deals with the commencement and conclusion of proceedings, provides that proceedings before an arbitrator under section 10A are deemed to have commenced on the date the dispute is referred for arbitration, and such proceedings are deemed to have concluded on the date the award becomes enforceable under section 17A. This approach contrasts with the rule for Industrial Tribunal proceedings, where commencement is marked by a reference under section 10; here, commencement occurs at the parties’ own reference, even before the appropriate Government takes any action under section 10A.

In this matter the Court observed that, analogous to proceedings before an Industrial Tribunal where the commencement of the proceedings is signified by the reference made under section ten, the commencement of arbitration proceedings is signified by the reference made by the parties themselves under section ten‑A. Consequently, the arbitration process begins at the moment the parties refer their dispute to an arbitrator, even before the appropriate Government authority intervenes or takes any action pursuant to the provisions of section ten‑A. The Court noted that the Central Government and several State Governments have exercised the power conferred by section thirty‑eight sub‑section two (aa) to formulate Rules governing various aspects of arbitration. These Rules prescribe the form of the arbitration agreement, the place and time of hearing, the arbitrator’s authority to take evidence, the manner of service of summons, the power to proceed ex parte where necessary, the power to correct mistakes in the award, and other related matters. The Court pointed out that certain Central Rules—specifically Rules seven, eight, thirteen, fifteen, sixteen and twenty‑eight—appear to draw a distinction between an arbitrator and the other authorities created under the Act. By contrast, some State Rules, for example those framed by the Madras State identified as Rules thirty‑one, thirty‑seven, thirty‑eight, thirty‑nine, forty, forty‑one and forty‑two, treat the arbitrator on the same footing as the other appropriate authorities under the Act. The Court summarized that this state of affairs reflects the position of the relevant statutory provisions and the Rules made thereunder. In light of these provisions the Court turned to examine the character of an arbitrator who commences arbitration proceedings as a result of a reference made to him under section ten‑A.

The Court recorded that the learned Solicitor‑General contended that an arbitrator appointed under section ten‑A is essentially no different from a private arbitrator to whom the parties may refer their dispute under the Arbitration Act of 1940. According to that submission, such an arbitrator must act in a judicial manner, follow a fair procedure, take evidence, hear both parties and render a conclusion based on the evidence presented. The Court acknowledged that, for certain purposes, the award rendered by the arbitrator under section ten‑A may be treated as an award under the Act; however, the legal position remains that the award is issued by an arbitrator appointed by the parties themselves. The Court observed that just as an award made by a private arbitrator becomes a decree subject to sections fifteen, sixteen, seventeen and thirty of the Arbitration Act and consequently binds the parties, an award made by an arbitrator under section ten‑A likewise becomes binding on the parties by virtue of the relevant provisions of the Act. The Court further noted that no writ of certiorari may be issued under article two hundred twenty‑six of the Constitution against an award made by a private arbitrator, and no appeal may lie under article one hundred thirty‑six. The Court held that the same limitation applies to the award made by an arbitrator under section ten‑A.

In this matter, the argument was advanced that the award rendered by an arbitrator appointed under section 10A cannot be distinguished from awards made by private arbitrators, and therefore the same limitations on judicial review apply. To support this proposition, reliance was placed on the decision reported in R. v. Disputes Committee of the National Joint Council for the Craft Dental Technicians (1). In that case, a motion was moved for an order of certiorari to set aside an order issued by the Disputes Committee. Lord Goddard, C.J., observed that the Court possessed no authority to issue orders of certiorari or prohibition against an arbitrator unless the arbitrator was exercising powers that had been conferred by statute. He remarked, “There is no instance of which I know in the books where certiorari or prohibition has gone to any arbitrator, except a statutory arbitrator, and a statutory arbitrator is a person to whom, by statute, the parties must resort.” The Solicitor‑General argued that, although certain powers are granted to an arbitrator appointed under section 10A, such an arbitrator should not be classified as a statutory arbitrator because the parties are not compelled by the statute to approach any particular individual; the arbitrator is chosen by the parties and therefore remains a private arbitrator. Conversely, counsel for the petitioner, Mr Pai, contended that it would be unreasonable to treat the present arbitrator as a private arbitrator. He emphasized that section 10A confers statutory recognition on the appointment, and the subsequent amendments to the Act and the procedural rules framed thereunder demonstrate that the arbitrator has been endowed with quasi‑judicial powers and must conduct proceedings in accordance with procedural rules. Accordingly, he asserted that the arbitrator should be regarded as a statutory arbitrator, making the award subject to a writ of certiorari under Article 226. To bolster this position, Mr Pai cited the Court of Appeal decision in The King v. Electricity Commissioners ex parte London Electricity Joint Committee Co. (1920) Ltd. (1). In that case, the scheme devised by the Electricity Commissioners under section 1 of the Electricity (Supply) Act, 1919, was challenged as ultra‑vires, and a writ of prohibition was issued to prevent the Commissioners from further consideration of the scheme. Addressing whether a writ could be directed against a body such as the Electricity Commissioners, Lord Atkin examined the origins and history of the writs of prohibition and certiorari. He held that the operation of these writs had been extended to restrain the proceedings of bodies that do not claim to be, and would not be recognised as, courts of justice, wherever a group of persons possessed legal authority to determine questions affecting the rights of individuals and had a duty to act judicially, but acted beyond the limits of their legal authority.

The Court observed that any authority which is subject to the controlling jurisdiction of the King’s Bench Division, as exercised through the writs discussed on page 205, must consequently be answerable to that jurisdiction. Lord Atkin then cited a large number of earlier decisions in which writs had been issued against various authorities that were statutorily entrusted with different duties. To the same effect the Court referred to the decision in R. v. Northumberland Compensation Appeal Tribunal ex‑parte Shaw, reported in [1951] 1 All E.R. 268, and also mentioned the authorities listed in Halsbury’s Laws of England, 3rd edition, vol. 2, p. 62, and vol. II, p. 122, together with the earlier case of [1924] 1 K.B.D. 171.

The argument advanced by the appellants was that, against an award pronounced by an arbitrator appointed under section 10A, a writ of certiorari could be issued under article 226, and therefore the arbitrator should be regarded as a tribunal for the purposes of article 136. The Court rejected this line of reasoning as lacking foundation. It held that article 226, which authorises the High Courts to issue writs of certiorari in appropriate cases, is in a sense broader than article 136 because the power conferred by article 226 is not limited to orders issued by courts or tribunals. Under article 226(1) a writ may be directed to any person or authority, including, where appropriate, any government, within the territories prescribed. Consequently, even if an arbitrator appointed under section 10A does not qualify as a tribunal under article 136, a writ of certiorari may nevertheless lie against his award under article 226. The Court therefore concluded that the mere existence of a writ against such an award does not support the appellants’ contention that the arbitrator is a tribunal under article 136.

The Court conceded that, considering various provisions of the Act and the rules framed thereunder, an arbitrator appointed under section 10A cannot be treated exactly like a private arbitrator appointed under the Arbitration Act pursuant to an arbitration agreement. The arbitrator under section 10A is endowed with certain statutory powers, his procedure is governed by specific rules, and the award he pronounces carries statutory validity and a binding character for a prescribed period. In light of these features, the Court suggested that the arbitrator might loosely be described as a “statutory arbitrator,” and therefore the argument presented by the learned Solicitor‑General could be dismissed. However, the Court stressed that the fact that an arbitrator under section 10A is not identical to a private arbitrator does not automatically make him a tribunal under article 136. Even if some trappings of a court are present, the essential requirement of being invested with the State’s inherent judicial power is lacking, and that deficiency prevents the arbitrator from qualifying as a tribunal.

In this case, the Court observed that the arbitrator is appointed solely by the parties to the dispute, and the authority to resolve that dispute comes exclusively from the agreement between those parties. No other source confers this power on the arbitrator. Although the parties’ appointment is recognised under section 10A and, after appointment, the arbitrator is given certain powers and displays some characteristics normally associated with a court, the Court held that this does not make the arbitrator’s adjudicative power a function of the State. Consequently, the principal test that this Court has formulated for determining the nature of an adjudicative body is not satisfied. The Court therefore concluded that the arbitrator cannot be classified as a Tribunal because the State has not invested him with its inherent judicial power; his power to adjudicate derives only from the parties’ agreement. The Court placed the arbitrator’s position somewhere between that of a private arbitrator, who has even fewer attributes, and that of a statutory Tribunal, which is created under a specific statutory provision and is mandated to resolve particular categories of disputes. The essential feature of a statutory Tribunal is its statutory basis and compulsory jurisdiction over defined disputes. The Court also rejected the argument advanced by counsel that a writ of certiorari could be issued against the arbitrator’s award, noting that such an argument does not assist the appellants in their claim that the arbitrator constitutes a Tribunal under Article 136. Addressing the difficulty raised, the Court considered the construction of section 10A and noted the submission that, on a fair and reasonable reading, the arbitrator under that provision should not be distinguished from an Industrial Tribunal and therefore should be regarded as a Tribunal under Article 136. The Court further referred to the decision in Bharat Bank Ltd. (1), where it was held that an Industrial Tribunal is a Tribunal under Article 136 and that an arbitrator is essentially an Industrial Tribunal; on that basis, the Court acknowledged the contention that the present appeals are competent.

The Court then turned to the wording and scope of section 10A. It explained that the provision empowers an employer and the workmen to refer a dispute to arbitration through a written agreement, provided that the dispute has not yet been referred to the Labour Court, a Tribunal, or a National Tribunal under section 10. When an industrial dispute exists or is anticipated, the appropriate Government may refer the matter for adjudication under section 10; however, before such a governmental reference is made, the parties are free to agree to submit their dispute to an arbitrator of their choice, subject to the requirement that the agreement be reduced to writing. Once the parties have documented their agreement, the reference must be made to the person specified in that arbitration agreement. Although the Court observed that the language of the section is not particularly graceful, it emphasized that the essential elements of the scheme are clear and undisputed. Finally, the Court noted that if no reference has been made under section 10, the parties may still proceed under the mechanism provided by section 10A, subject to the conditions outlined above.

In this case, the parties were allowed to agree that their industrial dispute would be referred to an arbitrator of their own choice, provided that the agreement was reduced to writing and that the written instrument specifically named the arbitrator or arbitrators to whom the reference was to be made. The Court recorded that under section 10A the reference must be made to the person or persons identified in the written agreement. Mr. Sule argued that the final clause of section 10A should be read to mean that, after the parties entered into the written agreement, the appropriate Government would make the reference to the named individual or individuals, and that this governmental act would confer on the arbitrator the status of an Industrial Tribunal with the State’s inherent judicial power. In support of this position, he cited the passage that the reference shall be to “such person or persons” and suggested that the act of reference by the Government would vest the arbitrator with the authority to adjudicate. The Court rejected this construction, observing that the language of the last clause plainly indicates that the reference shall be to the person or persons named in the agreement, without invoking the Government at any stage of the process. It held that the provision deals exclusively with the parties’ ability to agree in writing and that, once such an agreement exists, the reference follows directly to the named arbitrator(s). Accordingly, the Court found no basis for reading the Government’s involvement into the operation of section 10A(1).

The Court further explained that the grammatical construction of the clause requires that the reference be made to the arbitrator(s) named in the written agreement, and that the text does not permit the insertion of the Government into the reference mechanism. It noted that the provision merely sets out what the parties may do when they reduce their agreement to writing, and that the possibility of referring the dispute to the Labour Court, Tribunal or National Tribunal does not alter the meaning of the clause. Sub‑section (2) prescribes a specific form for the arbitration agreement, which requires the parties to state that they have agreed to refer the existing industrial dispute to the arbitration of the persons to be named in the form, to describe the matters in dispute, and to indicate other necessary details. The form concludes with a statement that the majority decision of the arbitrators shall be binding on the parties, and it must be signed by the parties and attested by two witnesses. The Court observed that this prescribed form is essentially an arbitration agreement: it identifies the dispute, names the arbitrator(s), and binds the parties to the arbitrator’s award. No additional role for the Government is created by the language of section 10A(2), and the form confirms the Court’s interpretation that the reference is simply to the arbitrator(s) named by the parties.

The Court explained that section 10A requires the parties to sign and attest a prescribed form, and that the form obliges the parties to abide by the majority decision of the arbitrators. After the parties have duly signed and attested the form, subsection (3) mandates that a copy of the form be sent to the appropriate Government and to the conciliation officer. The appropriate Government must then, within fourteen days of receiving the copy, publish the document in the official Gazette. The Court held that this publication is essentially a ministerial act and that the Government has no discretion to refuse it. Subsection (4) directs that the arbitrator shall investigate the dispute and forward his award to the appropriate Government, while subsection (5) expressly excludes the application of the Arbitration Act to arbitrations conducted under section 10A. Consequently, the Court observed that subsection (4) merely requires the arbitrator to exercise powers that the parties have conferred on him through their agreement under subsection (1). The Court noted that the appropriate Government does participate in the arbitration process by publishing the agreement, by requiring the award to be submitted, and by publishing the award thereafter. In that limited respect, the Court said, certain procedural features of the arbitration resemble those of proceedings before an Industrial Tribunal, such as the issuance of an award and subsequent steps concerning that award. Nevertheless, the Court emphasized that the fundamental source of adjudicatory authority differs: the arbitrator’s authority originates from the parties’ agreement, whereas the Industrial Tribunal derives its authority from statutory provisions.

The Court then turned to section 10(2) for comparison. That provision, the Court explained, applies when the parties to an industrial dispute apply in the prescribed manner for a reference of their dispute to an appropriate authority. Section 10(2) requires the appropriate Government, if satisfied that the applicants represent the majority of each party, to make the reference accordingly. In other words, the parties move the Government, and the Government is bound to refer the dispute for adjudication. The Court contrasted this with section 10(1), where, in the absence of a party agreement, the Government retains discretion to refer or not refer a dispute. Under section 10(2), however, once the parties have reached an agreement, the Government must refer the dispute, but the reference itself is made by the Government, not by the parties. By contrast, under section 10A, the reference to arbitration is effected directly by the parties themselves. This distinction, the Court concluded, underscores the different institutional roles and sources of authority under the two sections.

The process required the parties to select an arbitrator and, after they had named that arbitrator and executed a written agreement to that effect, the appropriate Government then intervened to facilitate the subsequent proceedings before the chosen arbitrator. Section 18(2) of the Act further clarifies the effect of an arbitration award. That provision states that once an arbitration award attains the status of enforceability, it becomes binding upon the parties to the agreement who had referred the dispute to arbitration. It is observable that this provision refers specifically to the parties to the agreement as the ones who have referred the dispute to arbitration, which demonstrates that the act of reference originates from the parties rather than from the appropriate Government. Section 10A(5) may also be examined in this context. If the reference to arbitration under section 10A(1) had been made by the appropriate Government, the Legislature could have employed language that would effectively treat the arbitrator as an Industrial Tribunal. In such a situation, it would not have been necessary for the statute to expressly state that the Arbitration Act would not apply to arbitrations conducted under this section. The wording of section 10A(5) indicates that the proceedings envisioned by section 10A are indeed arbitration proceedings, and that, but for the exception provided in sub‑section (5), the Arbitration Act would otherwise have been applicable to them. The appellants have relied upon a recent judgment of the Bombay High Court in the case of Air Corporation Employees' Union v. D. Vyas. In that decision, the Bombay High Court held that an arbitrator operating under section 10A is subject to the judicial superintendence of the High Court under Article 227 of the Constitution, and consequently the High Court may entertain an application for a writ of certiorari against orders issued by that arbitrator. It was undeniably argued before the High Court that the arbitrator was not amenable to the jurisdiction of the High Court under Article 227 because he was a private, not a statutory, arbitrator; however, the Court rejected that argument and concluded that the proceedings before the arbitrator appointed under section 10A possessed all the essential characteristics of a statutory arbitration under section 10 of the Act. From the judgment, it appears that the issue of how to interpret section 10A was not specifically raised before the High Court, nor was its attention drawn to the clear distinctions between the provisions of section 10A and those of section 10. Moreover, the High Court does not seem to have been alerted to the tests established by this Court for determining when an adjudicative body or authority may be regarded as a Tribunal under Article 136. Similar to Article 136, Article 227 also mentions courts and Tribunals, and what has been said about the nature of an arbitrator appointed under section 10A in relation to the requirements of Article 136 may

The Court noted that the decision reported as prima facie (1) (1961)64 Bom. L. R. 1 was relevant to the requirements of Article 227, but it also observed that this point was not directly at issue in the present appeals. Counsel for the petitioner, Mr. Sule, then made a strong submission before the Court. He argued that if the arbitrator appointed under section 10A of the Arbitration Act were not treated as a Tribunal, the result would be unreasonable. He emphasized that the legislature's policy in enacting section 10A was to encourage industrial employers and employees to avoid bitterness by voluntarily referring their disputes to arbitrators of their own choice. According to Mr. Sule, this laudable objective would be frustrated if the parties realised that, once a reference was made under section 10A, the proceedings before the arbitrator would fall outside the scrutiny of this Court under Article 136. He described it as extremely anomalous that parties dissatisfied with an award made by such an arbitrator should be denied the protection afforded by the relevant provisions of the Arbitration Act and also be denied the appellate jurisdiction of this Court under Article 136. The Court recognised that there was some force in this argument. It further observed that, in enacting section 10A, the legislature perhaps had not foreseen that the position of an arbitrator under that provision would become anomalous because the arbitrator was not assimilated to the status of an industrial Tribunal and was placed outside the provisions of the Indian Arbitration Act. The Court, however, stated that such a consideration is for the legislature to address. Consequently, the Court held that the preliminary objection raised by the respondents must be upheld and that the appeals were incompetent under Article 136. Accordingly, the Court ordered the appellants to pay the costs of the respondents in Civil Appeal No. 204 of 1962, made no order as to costs in Civil Appeals Nos. 182 and 183 of 1962, and dismissed the appeals.